UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
ALLEGIANCE TELECOM, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
01747T102
(CUSIP Number)
William D. Savoy Lucas D. Schenck
Vulcan Ventures Incorporated Foster Pepper & Shefelman PLLC
110-110th Avenue N.E., Suite 550 1111 Third Avenue, Suite 3400
Bellevue, WA 98004 Seattle, WA 98101
(425) 453-1940 (206) 447-4400
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
October 31, 2000
(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Potential persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays
a currently valid OMB control number.
Page 1 of 9 pages
<PAGE>
-------------------------------- --------------------------------
CUSIP NO. 01747T102 13D Page 2 of 9 Pages
---------
-------------------------------- --------------------------------
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Vulcan Ventures Incorporated
-------- -----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
-------- -----------------------------------------------------------------------
3 SEC USE ONLY
-------- -----------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
-------- -----------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E)
-------- -----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Washington
-------- -----------------------------------------------------------------------
----- ----------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY
EACH REPORTING -0- shares
PERSON WITH ----- ---------------------------------
8 SHARED VOTING POWER
4,500,000 shares (1)
----- ---------------------------------
9 SOLE DISPOSITIVE POWER
-0- shares
----- ---------------------------------
10 SHARED DISPOSITIVE POWER
4,500,000 shares (1)
---------------------------------------- ----- ---------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,500,000 shares(1)
-------- -----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
-------- -----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
4.1%
-------- -----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
-------- -----------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 9 pages
(1) Directly owned by Vulcan Ventures Incorporated. Paul G. Allen is the sole
shareholder of Vulcan Ventures Incorporated and may be deemed to have shared
voting and dispositive power with respect to such shares.
<PAGE>
-------------------------- ---------------------------------
CUSIP NO. 01747T102 13D Page 3 of 9 Pages
---------
-------------------------- ---------------------------------
-------- -----------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Paul G. Allen
-------- -----------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
(b) |_|
-------- -----------------------------------------------------------------------
3 SEC USE ONLY
-------- -----------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
-------- -----------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E)
-------- -----------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
-------- -----------------------------------------------------------------------
------ -------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED BY
EACH REPORTING PERSON -0- shares
WITH ------ -------------------------------
8 SHARED VOTING POWER
4,500,000 shares (2)
------ -------------------------------
9 SOLE DISPOSITIVE POWER
-0- shares
------ -------------------------------
10 SHARED DISPOSITIVE POWER
4,500,000 shares(2)
----------------------------------------- ------ -------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,500,000 shares(2)
-------- -----------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
-------- -----------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
4.1%
-------- -----------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
-------- -----------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(2) Directly owned by Vulcan Ventures Incorporated. Paul G. Allen is the sole
shareholder of Vulcan Ventures Incorporated and may be deemed to have shared
voting and dispositive power with respect to such shares.
Page 3 of 9 pages
<PAGE>
SCHEDULE 13D
Item 1. Security and Issuer.
This statement relates to the Common Stock, $.01 par value per share,
of Allegiance Telecom, Inc., a Delaware corporation (the "Issuer"). The Issuer's
principal executive officers are located at 1950 Stemmons Freeway, Suite 3026,
Dallas, Texas 75207.
Item 2. Identity and Background.
The persons filing this statement are Vulcan Ventures Incorporated ("Vulcan
Ventures") and Paul G. Allen. Vulcan Ventures is a Washington corporation whose
principal business is investing in various companies. Paul G. Allen is its sole
shareholder. The principal office of Vulcan Ventures is located at 110-110th
Avenue N.E., Suite 550, Bellevue, Washington 98004. All of Vulcan Ventures'
executive officers and directors are U.S. citizens. Their names, business
addresses and principal occupations are as follows:
Paul G. Allen, Vulcan Ventures Incorporated, 110-110th Avenue N.E.,
Suite 550, Bellevue, Washington 98004. Mr. Allen is Chairman, President and
sole shareholder of Vulcan Ventures and a Director and sole shareholder of
Vulcan Northwest Inc.
William D. Savoy, Vulcan Northwest Incorporated, 110-110th Avenue
N.E., Suite 550, Bellevue, Washington 98004. Mr. Savoy is Vice President
and a Director of Vulcan Ventures and Chairman and President of Vulcan
Northwest Inc.
Bert E. Kolde, Digeo Broadband, Inc., 12131 113th Avenue NE, Suite
203, Kirkland, WA 98034. Mr. Kolde is a Senior Vice President of Digeo
Broadband, Inc., Vice President, Secretary, Treasurer and a Director of
Vulcan Ventures and a Vice President of Vulcan Northwest Inc.
Jo Allen Patton, Vulcan Northwest Inc., 110-110th Avenue N.E., Suite
550, Bellevue, Washington 98004. Ms. Patton is Vice Chairman and a Vice
President of Vulcan Ventures and Vulcan Northwest Inc.
During the last five years, Mr. Allen and Vulcan Ventures have not,
nor, to the best knowledge of Vulcan Ventures, has any other person named in
this Item 2, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
he is or was subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Item 3: Source and Amount of Funds or Other Consideration.
N/A
Item 4: Purpose of Transaction.
The purpose of the transaction disclosed herein was to reduce Vulcan
Ventures' ownership of the Issuer's security. Prior to the transaction listed in
Item 5, Vulcan Ventures owned 6,000,000 shares of the Common Stock of the
Issuer, or approximately 5.5% of the outstanding shares of common stock. After
the transaction listed below, Vulcan Ventures owned less than 5% of the Common
Stock of the Issuer.
Vulcan Ventures does not have any plans or proposals that relate to or
would result in any of the matters specified in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
On October 31, 2000, Vulcan Ventures and Mr. Allen sold 1,500,000
shares of the Issuer on the open market at a per share net price of $26.75.
Subsequent to this transaction, Vulcan Ventures and Mr. Allen each beneficially
own 4,500,000 shares of the Issuer's Common Stock. As of October 31, 2000,
Vulcan Ventures' and Mr. Allen's stockholdings represent approximately 4.1% of
the shares of the class outstanding based upon 108,864,633 shares outstanding as
of August 4, 2000, as reported by the Issuer in its Quarterly Report, on Form
10-Q filed on August 14, 2000. Vulcan Ventures and Mr. Allen have shared voting
and dispositive power with respect to the Common Stock.
Except as set forth herein, Vulcan Ventures and Mr. Allen have not, nor
to the knowledge of Vulcan Ventures have any of its executive officers,
directors or controlling persons named in Item 2, effected any transaction in
the Issuer's Common Stock during the past sixty days.
Page 4 of 9 pages
<PAGE>
To the best knowledge of Vulcan Ventures and Mr. Allen, none of the
other parties named in Item 2 owns any of the Issuer's Common Stock.
Except as set forth in Item 4 of this statement, Vulcan Ventures and
Mr. Allen have not, nor to the knowledge of Vulcan Ventures, has any of its
executive officers, directors or controlling persons named in Item 2, effected
any transactions in the Issuer's Common Stock during the past sixty days.
Neither Vulcan Ventures nor Mr. Allen knows any other person who has
the right to receive or the power to direct the receipt of dividends from or the
proceeds from the sale of any Common Stock beneficially owned by Vulcan Ventures
or Mr. Allen.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
In connection with its purchase of Issuer's shares pursuant to a Common
Stock Purchase and Option Agreement dated as of September 13, 1999, the Issuer
and Vulcan Ventures entered into an Investors Agreement (the "Investors
Agreement") pursuant to which the Issuer has agreed to use its best efforts to
cause (a) one designee nominated by Vulcan Ventures to be appointed to the
Issuer's board (the "Board"), for so long as Vulcan Ventures continues to hold
at least 1,200,000 shares (as adjusted for stock dividends, stock splits and
other recapitalizations) of Common Stock, and (b) two designees nominated by
Vulcan Ventures to be appointed to the Board, if Vulcan Ventures acquires at
least 2,500,000 or more shares under the Option, and so long as Vulcan Ventures
continues to hold at least 4,000,000 shares (as adjusted for stock dividends,
stock splits and other recapitalizations). Vulcan Ventures may not assign its
right to nominate a director or directors under the Investors Agreement.
Under the Investors Agreement, Vulcan Ventures is subject to a
standstill provision for a period beginning on September 13, 1999 and ending on
the earlier of (i) the closing of a Sale of the Company, as defined in the
Investors Agreement, and (ii) the date after September 13, 2002 on which Vulcan
Ventures has not had a representative sitting on the Board for 180 days (the
"Standstill Period"). During the Standstill Period, Vulcan Ventures has agreed
that it and its affiliates and associates will not, directly or indirectly,
among other things: (i) acquire any of the voting securities (or securities
convertible or exchangeable into or exercisable for any voting securities) of
the Issuer or any of its affiliates, (ii) acquire any assets of the Issuer or
any of its affiliates, or (iii) participate in any tender offer, exchange offer,
merger, or other extraordinary transaction involving the Issuer or any of its
affiliates; provided that with respect to the foregoing clauses (i) through
(iii), Vulcan Ventures may take any of such actions within 60 days after another
person that is not an affiliate or associate of Vulcan Ventures has made a
publicly announced proposal to take any such action that would result in a Sale
of the Issuer so long as Vulcan Venture's actions are not in concert with such
other person. In addition, during the Standstill Period, Vulcan Ventures has
agreed that it and its affiliates and associates will not, directly or
indirectly, among other things: (i) become a member of a group with respect to
the Common Stock or other equity securities or assets of the Issuer; (ii) call
or seek to call any special meeting of or initiate a stockholder vote or action
by written consent of the Issuer's stockholders; (iii) participate in any
solicitation of proxies to vote, or seek to influence any person or entity with
respect to the Issuer, in opposition to any matter which has been recommended by
the Board or in favor of any matter which has not been approved by the Board; or
(iv) enter into any discussions, negotiations, arrangements or understandings
with any third party with respect to any of the foregoing. Notwithstanding the
foregoing, Vulcan Ventures and its affiliates and associates may acquire
additional shares of Common Stock as long as their aggregate beneficial
ownership does not exceed 20% of the outstanding securities of the Issuer
entitled to vote generally in the election of directors. Under the Investors
Agreement, if the Issuer adopts a stockholder rights plan, the percentage of
beneficial ownership of Common Stock the acquisition of which will trigger the
provisions of the plan shall not be less than 20% for Vulcan Ventures.
Also concurrently with the Purchase Agreement, Vulcan Ventures entered
into an Amended and Restated Registration Agreement (the "Registration
Agreement") with the Issuer, the Sellers and certain other stockholders with
respect to the registration of the Issuer's securities under the Securities Act
of 1933, as amended. After September 13, 2000, the Registration Agreement
entitles Vulcan Ventures to demand one long-form registration, such as
registration on Form S-1, and two short-form registrations, such as registration
on Form S-3, with respect to the shares of Common Stock purchased by Vulcan
Ventures under the Purchase Agreement. In addition, Vulcan Ventures may
"piggyback" on primary or secondary registered public offerings of the Issuer's
securities. Allegiance has agreed to pay the registration expenses in connection
with these demand and "piggyback" registrations.
Vulcan Ventures has agreed not to make a public sale or distribution of
any of the Issuer's equity securities or any securities convertible into or
exchangeable or exercisable for the Issuer's equity during the seven days prior
to, and the 90-day period following, the effective date of any other
underwritten demand registration or underwritten piggyback registration, unless
the managing underwriters otherwise agree.
Page 5 of 9 pages
<PAGE>
Item 7. Material to be Filed as Exhibits.
Exhibit Description
99.1 Investors Agreement dated September 13, 1999 between
Allegiance Telecom, Inc. and Vulcan Ventures Incorporated.
(Incorporated by reference to Exhibit 99.3 to the Issuer's
Report on Form 8-K filed on September 22, 1999, File No.
0-24509.)
99.2 Amended and Restated Registration Agreement dated September
13, 1999 among Allegiance Telecom, Inc., Battery Ventures IV
L.P., Battery Investment Partners IV, LLC, Frontenac VII
Limited Partnership, Frontenac Masters VII Limited
Partnership, Madison Dearborn Capital Partners II L.P.,
Morgan Stanley Capital Partners III, L.P., MSCP III 892
Investors, L.P., Morgan Stanley Capital Investors, L.P.,
Vulcan Ventures Incorporated and certain other stockholders
listed therein. (Incorporated by reference to Exhibit 99.4
to the Issuer's Report on Form 8-K filed on September 22,
1999, File No. 0-24509.)
99.3 Joint Filing Statement.
Page 6 of 9 pages
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
VULCAN VENTURES INCORPORATED
November 10, 2000 By: /s/ William D Savoy
----------------------------------------------
William D. Savoy, Vice President
*
----------------------------------------------
Paul G. Allen
November 10, 2000 *By: /s/ William D. Savoy
-----------------------------------------------
William D. Savoy as Attorney-in Fact for Paul G. Allen
pursuant to a Power of Attorney filed on August 30, 1999,
with the Schedule 13G of Vulcan Ventures Incorporated
and Paul G. Allen for Pathogenesis, Inc. and incorporated
herein by reference.
Page 7 of 9 pages
<PAGE>
EXHIBIT INDEX
Exhibit Description
Exhibit Description
99.1 Investors Agreement dated September 13, 1999 between
Allegiance Telecom, Inc. and Vulcan Ventures Incorporated.
(Incorporated by reference to Exhibit 99.3 to the Issuer's
Report on Form 8-K filed on September 22, 1999, File No.
0-24509.)
99.2 Amended and Restated Registration Agreement dated September
13, 1999 among Allegiance Telecom, Inc., Battery Ventures IV
L.P., Battery Investment Partners IV, LLC, Frontenac VII
Limited Partnership, Frontenac Masters VII Limited
Partnership, Madison Dearborn Capital Partners II L.P.,
Morgan Stanley Capital Partners III, L.P., MSCP III 892
Investors, L.P., Morgan Stanley Capital Investors, L.P.,
Vulcan Ventures Incorporated and certain other stockholders
listed therein. (Incorporated by reference to Exhibit 99.4
to the Issuer's Report on Form 8-K filed on September 22,
1999, File No. 0-24509.)
99.3 Joint Filing Statement.
Page 8 of 9 pages
<PAGE>
Exhibit 99.3
Joint Filing Statement
We, the signatories of the Statement on Schedule 13D/A to which this
Joint Filing Statement is attached, hereby agree that such Statement is filed,
and any amendments thereto filed by either or both of us will be filed, on
behalf of each of us.
Dated: November 10, 2000
VULCAN VENTURES INCORPORATED
By: /s/ William D. Savoy
--------------------------------------------------------
William D. Savoy, Vice President
*
--------------------------------------------------------
Paul G. Allen
*By: /s/ William D. Savoy
---------------------------------------------------------
William D. Savoy as Attorney-in Fact for Paul G. Allen
pursuant to a Power of Attorney filed on August 30, 1999,
with the Schedule 13G of Vulcan Ventures Incorporated
and Paul G. Allen for Pathogenesis, Inc. and incorporated
herein by reference.
Page 9 of 9 pages
