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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
Teligent, Inc.
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(Name of Issuer)
Class A Common Stock, par value $.01 per share
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(Title of Class of Securities)
87959Y 10 3
--------------------------------
(CUSIP Number)
Charles Y. Tanabe, Esq.
Senior Vice President and General Counsel
Liberty AGI, Inc.
9197 South Peoria Street
Englewood, Colorado 80112
(720) 875-5400
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 14 , 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 that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 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 Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 20 Pages)
- --------------------
/*/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 the
disclosures provided in a prior cover page.
The information required in 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).
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CUSIP NO. 87959Y 10 3
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NAME OF REPORTING PERSON
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Liberty AGI, Inc.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [X]
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SEC USE ONLY
3
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SOURCE OF FUNDS
4
00
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
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SOLE VOTING POWER
7
NUMBER OF 0 shares
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
21,436,689 shares
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 21,436,689 shares
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0 shares
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
21,436,689 shares
- ------------------------------------------------------------------------------
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
12
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximately 68.88%. See Item 5.
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TYPE OF REPORTING PERSON
14
CO
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Page 2 of 20 Pages
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Statement of
LIBERTY AGI, INC.
Pursuant to Section 13(d) of the Securities Exchange Act of 1934
in respect of
TELIGENT, INC.
Item 1. Security and Issuer.
Liberty AGI, Inc. (formerly known as Silver Spur Land & Cattle Co.), a
Delaware corporation ("Liberty AGI" or the "Reporting Person"), is filing this
Statement on Schedule 13D (this "Statement") with respect to the Class A Common
Stock, par value $.01 per share (the "Class A Common Stock"), of Teligent, Inc.,
a Delaware corporation (the "Issuer"). The Issuer's principal executive offices
are located at 8065 Leesburg Pike, Vienna, Virginia 22182.
Item 2. Identity and Background.
The reporting person is Liberty AGI, whose principal business address is
9197 South Peoria Street, Englewood, Colorado 80112. Microwave Services, Inc.,
a Delaware corporation ("MSI"), is the registered holder of the shares of Class
A Common Stock beneficially owned by Liberty AGI (the "Shares"). MSI is an
indirect wholly owned subsidiary of AGI LLC, a Delaware limited liability
company ("AGI LLC"). AGI's sole member is AT&T Corp., a New York corporation
("AT&T"), and its sole manager is Liberty AGI. Under AGI LLC's governing
documents, Liberty AGI, as manager, is solely vested with the authority to
direct the management of AGI LLC.
Prior to March 9, 1999, Liberty AGI was controlled by Tele-Communications,
Inc., a Delaware corporation ("TCI"). TCI's principal business address is 9197
South Peoria Street, Englewood, Colorado 80112. TCI is principally engaged
through its subsidiaries and affiliates in the acquisition, development and
operation of cable television systems throughout the United States.
As a result of the consummation on March 9, 1999 of the merger (the "AT&T
Merger") of a wholly owned subsidiary of AT&T with and into TCI, (i) TCI became
a wholly owned subsidiary
Page 3 of 20 Pages
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of AT&T; (ii) the businesses and assets of the Liberty Media Group and TCI
Ventures Group of TCI were combined; and (iii) the holders of TCI's Liberty
Media Group common stock and TCI Ventures Group common stock received in
exchange for their shares a new class of common stock of AT&T intended to
reflect the results of AT&T's "Liberty Media Group." Following the AT&T Merger,
AT&T's "Liberty Media Group" consists of the assets and businesses of TCI's
Liberty Media Group and its TCI Ventures Group prior to the AT&T Merger, except
for certain assets that were transferred to TCI's "TCI Group" in connection with
the AT&T Merger, and the "AT&T Common Stock Group" consists of all of the other
assets and businesses of AT&T. AT&T's principal business address is 32 Avenue of
the Americas, New York, New York 10013. AT&T is principally engaged in the
business of providing voice, data and video communications services to large and
small businesses, consumers and government entities in the United States and
internationally.
The Board of Directors and management of the Reporting Person manage the
business and affairs of the Reporting Person, including, but not limited to,
making determinations regarding the disposition and voting of the Shares.
Although the Reporting Person is a wholly owned subsidiary of AT&T, a majority
of the Reporting Person's Board of Directors consists of individuals designated
by TCI prior to the AT&T Merger. If these individuals or their designated
successors cease to constitute a majority of the Reporting Person's Board of
Directors, AGI LLC (or, following the Share Exchange described in Item 6 below,
the Reporting Person) will transfer all of its assets and businesses to a new
entity. Although this new entity would be owned substantially by AT&T, it would
continue to be managed (including with respect to the voting and disposition of
the Shares) by management of the Reporting Person prior to such transfer of
assets.
As a result, the Reporting Person, acting through its Board of Directors
and management, will have the power to determine how the Shares will be voted
and, subject to the limitations of the Delaware General Corporation Law, will
have the power to dispose of the Shares, and thus is considered the beneficial
owner of the Shares for purposes of Section 13(d) of the Exchange Act.
The Liberty Media Group, principally through Liberty Media Corporation, a
Delaware corporation ("Liberty Media"), is engaged in (i) the production,
acquisition and distribution through all available formats and media of branded
entertainment, educational and informational programming and software, including
multimedia products, (ii) electronic retailing, direct marketing, advertising
sales related to programming services, infomercials and transaction processing,
(iii) international cable television distribution, telephony and programming,
(iv) satellite communications, and (v) investments in wireless domestic
telephony and other technology ventures. The Reporting Person is a member of
the Liberty Media Group, and AT&T's interest in AGI LLC is attributed to the
Liberty Media Group.
Schedule 1 attached to this Statement contains the following information
concerning each director, executive officer or controlling person of the
Reporting Person: (i) name and residence or business address, (ii) principal
occupation or employment; and (iii) the name, principal business and address of
any corporation or other organization in which such employment is conducted.
Schedule 1 is incorporated herein by reference.
Page 4 of 20 Pages
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To the knowledge of the Reporting Person, each of the persons named on
Schedule 1 (the "Schedule 1 Persons") is a United States citizen, except for
David J.A. Flowers, who is a Canadian citizen. During the last five years,
neither the Reporting Person nor any of the Schedule 1 Persons (to the knowledge
of the Reporting Person) has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors). During the last five years,
neither the Reporting Person nor any of the Schedule 1 Persons (to the knowledge
of the Reporting Person) has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and, as a result of such
proceeding, 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.
Schedule 2 attached to this Statement contains the following information,
which has been provided to the Reporting Person by AT&T, concerning each
director, executive officer or controlling person of AT&T: (i) name and
residence or business address; (ii) principal occupation or employment; and
(iii) the name, principal business and address of any corporation or other
organization in which such employment is conducted. Schedule 2 is incorporated
herein by reference.
Based upon information provided to the Reporting Person by AT&T, (i) to the
knowledge of AT&T, each of the persons named on Schedule 2 (the "Schedule 2
Persons") is a United States citizen, (ii) during the last five years, neither
AT&T nor any of the Schedule 2 Persons (to the knowledge of AT&T) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), and (iii) during the last five years, neither AT&T nor any of the
Schedule 2 Persons (to the knowledge of AT&T) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and,
as a result of such proceeding, 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.
The foregoing summary of the terms of the AT&T Merger is qualified in its
entirety by reference to the text of the Agreement and Plan of Restructuring and
Merger, dated as of June 23, 1998, among AT&T, Italy Merger Corp. and TCI, a
copy of which has been incorporated by reference as Exhibit 7(a) to this
Statement, and to the text of the AT&T/TCI Proxy Statement/Prospectus, a copy of
which has been incorporated by reference as Exhibit 7(b) to this Statement.
Item 3. Source and Amount of Funds or Other Consideration.
On January 14, 2000, the Liberty Media Group completed its acquisition of
The Associated Group, Inc., a Delaware corporation ("Associated Group"),
pursuant to the Amended and Restated Agreement and Plan of Merger, dated as of
October 28, 1999 (the "Merger Agreement"), among AT&T, A-Group Merger Corp., a
Delaware corporation and a wholly owned subsidiary of AT&T ("Merger Sub"),
Liberty Media and Associated Group. In this transaction, Merger Sub merged (the
"Merger") with and into Associated Group, with Associated Group as the surviving
entity in the Merger. In the Merger, each share of Associated Group's Common
Stock, Class A, par value $.10
Page 5 of 20 Pages
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per share, and Common Stock, Class B, par value $.10 per share, was converted
into 1.20711 shares of Class A Liberty Media Group Stock, par value $1.00 per
share, of AT&T ("Class A Liberty Stock") and 0.49634 of a share of AT&T Common
Stock, par value $1.00 per share ("AT&T Common Stock"). A total of 47,957,512
shares of Class A Liberty Stock and 19,719,190 shares of AT&T Common Stock were
issued in the Merger. In addition, AT&T assumed options to purchase a total of
2,000,000 shares of Associated Group Class B Stock and, following the Merger,
these options represent the right to purchase a total of 4,080,000 shares of
Class A Liberty Stock.
Prior to the Merger, Associated Group contributed all of the outstanding
shares of capital stock of MSI to Microwave Holdings, L.L.C., a newly-formed
Delaware limited liability company of which Associated Group is the sole member
("Microwave Holdings"). Following the Merger, Associated Group was converted to
a Delaware limited liability company called "AGI LLC."
The foregoing summary of the terms of the Merger Agreement is qualified in
its entirety by reference to the full text of the Merger Agreement, a copy of
which is included as Exhibit 7(c) to this Statement and is incorporated herein
by reference.
Item 4. Purpose of Transaction.
The Reporting Person has no current plans to dispose of shares of Common
Stock (see the description of the Share Exchange set forth below in this Item
4). However, the Reporting Person may in the future dispose of shares of Common
Stock in the market, in privately negotiated transactions or otherwise,
including pursuant to the agreements described under Item 6 below. In addition,
while it has no current plans to do so, the Reporting Person reserves the right
to acquire additional shares of Common Stock through market purchases, in
privately negotiated transactions or otherwise, including pursuant to the
exercise of rights under the agreements described under Item 6 below.
The Merger Agreement provides that after the earlier of (a) six months
following the Merger or (b) such time after the Merger that AT&T's ownership of
the outstanding interest in AGI LLC, in AT&T's reasonable judgement, causes a
Parent Adverse Effect (as defined in the Merger Agreement) (provided that
transferring such outstanding interest in AGI LLC to Liberty AGI would, in
AT&T's reasonable judgment, reduce or eliminate the Parent Adverse Effect), AT&T
will transfer all of the equity in AGI LLC to Liberty AGI in exchange for common
stock of Liberty AGI representing the value of the equity interest in AGI LLC
(the "Share Exchange"). The common stock of Liberty AGI held by AT&T following
the Share Exchange will be attributed to the Liberty Media Group.
The Reporting Person intends to continuously review its investment in the
Issuer, and may in the future determine (i) to acquire additional securities of
the Issuer, through open market purchases, private agreements, pursuant to the
exercise of rights under the agreements described in Item 6 below or otherwise,
(ii) to dispose of all or a portion of the securities of the Issuer owned by it
in the market, in privately negotiated transactions or otherwise or (iii) to
take any other available
Page 6 of 20 Pages
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course of action, which could involve one or more of the types of transactions
or have one or more of the results described in the next paragraph of this Item
4. Notwithstanding anything contained herein, the Reporting Person specifically
reserves the right to change its intention with respect to any or all of such
matters. In reaching any decision as to its course of action (as well as to the
specific elements thereof), the Reporting Person currently expects that it would
take into consideration a variety of factors, including, but not limited to, the
following: the Issuer's business and prospects; other developments concerning
the Issuer and its businesses generally; other business opportunities available
to the Reporting Person; developments with respect to the business of the
Reporting Person; changes in law and government regulations; general economic
conditions; and money and stock market conditions, including the market price of
the securities of the Issuer.
Other than as set forth in this Statement, the Reporting Person has no
present plans or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or of
any of its subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy
of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of
control of the Issuer by any person;
(h) A class of securities of the Issuer being delisted from a national
securities exchange or ceasing to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Exchange Act; or
(j) Any action similar to any of those enumerated in this paragraph.
Page 7 of 20 Pages
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Item 5. Interest in Securities of the Issuer.
(a) Liberty AGI presently beneficially owns, through its control of MSI,
21,436,689 shares of Class A Common Stock. Of the 31,121,921 shares of Class A
Common Stock outstanding (based on 9,685,232 shares of Class A Common Stock
outstanding as of November 8, 1999, as reported on the Issuer's Quarterly Report
on Form 10-Q for the quarterly period ended September 30, 1999, and giving
effect to the conversion of 21,436,689 shares of the Issuer's Class B-Series 1
Common Stock, par value $.01 per share ("Series B-1 Common Stock") held by MSI
to an equal number of shares of Class A Common Stock on January 14, 2000 (but
without assuming the conversion of shares of Class B Common Stock, par value
$.01 per share ("Class B Common Stock" and, together with the Class A Common
Stock, the "Common Stock") of the Issuer, or any other convertible or
exchangeable securities or the Issuer, held by any other person)), the
21,436,689 shares beneficially owned by the Reporting Person represent
approximately 68.88% of the issued and outstanding shares of Class A Common
Stock.
Except as described in the preceding paragraph, to the knowledge of the
Reporting Person, none of the Schedule 1 Persons and none of the Schedule 2
Persons beneficially owns any shares of Class A Common Stock.
(b) Except as described in Item 6 below, Liberty has the sole power to vote
or to direct the voting of the Shares. Liberty AGI has the sole power to
dispose of, or to direct the disposition of, the Shares.
(c) Except for (i) the acquisition by Liberty AGI of beneficial ownership
of 21,436,689 shares of Class A Common Stock pursuant to the Merger Agreement
and (ii) the conversion by MSI of 21,436,689 shares of Series B-1 Common Stock
into an equal number of shares of Class A Common Stock following the Merger, no
transactions have been effected by the Reporting Person during the past 60 days.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
The information set forth in Item 4 hereof regarding the Share Exchange is
hereby incorporated by reference herein.
Members Agreement
In connection with the Issuer's initial public offering (the "IPO"), the
Issuer, MSI, Associated Group, Telcom-DTS Investors, L.L.C. (the "Telcom
Stockholder"), Digital Services Corporation (an original member of Teligent,
L.L.C. and an affiliate of the Telcom Stockholder) ("DSC"), the Telcom
Page 8 of 20 Pages
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Stockholder and the owners of the Telcom Stockholder entered into an agreement
(the "Members Agreement") whereby the Issuer granted to DSC certain demand and
"piggyback" registration rights with respect to Common Stock held by DSC at the
time of consummation of the IPO. In addition, in the Members Agreement,
Associated Group and MSI agreed with DSC that upon a "Change in Control" (as
defined in the Members Agreement) of Associated Group or MSI, (i) Associated
Group will immediately convert, and cause its controlled affiliates to
immediately convert, all of the Series B-1 Common Stock owned by them into Class
A Common Stock such that, under the Certificate of Incorporation as then in
effect, Associated Group, alone or together with its controlled affiliates, will
no longer have the right to elect a majority of the Issuer's Board of Directors,
(ii) MSI will cause its designees on the Issuer's Board of Directors to cause
the Issuer's Board of Directors to convene a meeting of the Issuer's
stockholders and (iii) promptly after taking the action described in (ii)
immediately above, MSI will cause such number of its designees on the Issuer's
Board of Directors to resign so that such designees no longer constitute a
majority thereof. The Merger constituted a "Change in Control" for purposes of
the Members Agreement and, immediately following the Merger, MSI caused all of
the Series B-1 Common Stock owned by it to be converted to an equal number of
shares of Class A Common Stock and caused two of its designees on the Issuer's
Board of Directors to resign.
In addition, in the Members Agreement, MSI and the Telcom Stockholder have
each granted to the other rights of first refusal and co-sale rights with
respect to any sale or transfer by the other (other than to an affiliate or
pursuant to a pledge arrangement, and excluding any public sale or distribution
whether pursuant to a registration statement, Rule 144 or otherwise) of shares
of Common Stock (other than Common Stock acquired in public market
transactions). Pursuant to the Members Agreement, Associated Group and the
owners of the Telcom Stockholder have also each granted to the other rights of
first refusal and co-sale rights, with the same exceptions, with respect to any
sale or transfer by the other of shares of MSI, or member or other equity
interests of the Telcom Stockholder, but only if shares of Common Stock
constitute all or substantially all of the assets of MSI or the Telcom
Stockholder, respectively. The Members Agreement is incorporated by reference
as Exhibit 7(d) to this Statement, and the foregoing description of the Members
Agreement is qualified in its entirety by reference to such Exhibit, which is
hereby incorporated herein by reference.
Stockholders Agreement
Immediately prior to consummation of the IPO, MSI, the Telcom Stockholder,
NTTA&T Investment Inc. ("NTTA&T") (collectively, the "Stockholder Parties") and
the Issuer entered into a Stockholders Agreement (the "Stockholders Agreement").
Pursuant to the Stockholders Agreement, NTTA&T and the Telcom Stockholder have
certain rights and obligations with respect to their ownership interest in, and
the governance of, the Issuer, including, so long as the Telcom Stockholder and
NTTA&T, respectively, have the right to elect a member of the Issuer's Board,
the right of such respective directors to approve, among other matters, any
amendment to the Issuer's Certificate of Incorporation which materially and
adversely affects the rights of NTTA&T or the Telcom Stockholder, respectively,
in a discriminatory manner vis-a-vis one or more of the other
Page 9 of 20 Pages
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Stockholder Parties. The Stockholders Agreement also provides that so long as
the Telcom Stockholder and NTTA&T, respectively, have the right to elect a
member of the Issuer's Board of Directors, the Issuer will afford to
representatives of the Telcom Stockholder and NTTA&T, respectively, certain
business consultation rights, including with respect to any action (each a
"Consultation Event") which (i) materially changes the fundamental character of
the Issuer's business, (ii) replaces the Issuer's Chief Executive Officer or
Chief Operating Officer, (iii) involves the sale or pledge by the Issuer of a
substantial portion of its assets or any acquisition, divestiture or merger of
the Issuer with another entity or any joint venture outside the ordinary course
of the Issuer's business or (iv) involves the issuance by the Issuer of shares
of Common Stock or preferred stock to any telecommunications carrier. With
respect to any Consultation Event, the Issuer will be required to provide
reasonable advance notice to NTTA&T and the Telcom Stockholder and, in the case
of the Consultation Event referred to in clause (iv) of the immediately
preceding sentence, to give due consideration to their objections. In the
Stockholders Agreement each of the parties thereto has agreed to vote, or act by
written consent with respect to, all of their respective shares of Common Stock
in favor of the election of the Issuer's Chief Executive Officer as a member of
the Issuer's Board of Directors.
Under the Stockholders Agreement, if the Issuer is required by a change in
law or other circumstance to reduce the level of foreign ownership of the Issuer
and the Issuer is unable to obtain a waiver of such requirement, the Issuer will
have the right, and will be required, at NTTA&T's election, to refuse to sell
stock in the Issuer to any Foreign Owner (as defined in the Stockholders
Agreement) if such a transaction would adversely impact NTTA&T's ability to hold
its then existing share ownership in the Issuer, and, in addition, the Issuer
will have the right, and will be required, at the election of any Stockholder
Party, to repurchase for cash (to the extent permitted by applicable Delaware
corporation law) shares first from all other Foreign Owners other than the
Stockholder Parties, if applicable, and thereafter from each of the Stockholder
Parties, on a pro rata basis (based on the percentage of foreign ownership
attributable to each Stockholder Party) at the fair market value thereof based
on the Issuer's then public trading value.
The Stockholders Agreement is incorporated by reference as Exhibit 7(e) to
this Statement, and the foregoing description of the Stockholders Agreement is
qualified in its entirety by reference to such Exhibit, which is hereby
incorporated herein by reference.
Firstmark Agreement
Pursuant to a Stock Contribution Agreement dated as of March 10, 1997 (the
"FirstMark Agreement") by and between Associated Communications, L.L.C. (the
predecessor to Teligent, L.L.C.), FirstMark Communications, Inc. ("FirstMark"),
Lynn Forester ("Forester"), and, for certain limited purposes MSI and DSC,
Forester was granted certain limited "piggyback" and demand registration rights
with respect to the shares of Class A Common Stock into which Forester's member
interest in Teligent L.L.C. was converted ("Forester Registrable Securities").
In addition, in the FirstMark Agreement, Forester granted to MSI and DSC a right
of first refusal with respect to any sale or other disposition by her of any
equity interest in the Issuer, other than any sale by her in the
Page 10 of 20 Pages
<PAGE>
public market of Forester Registrable Securities registered under the Securities
Act of 1933, as amended (the "Securities Act") or pursuant to Rule 144 under the
Securities Act. The FirstMark Agreement is incorporated by reference as Exhibit
7(f) to this Statement, and the foregoing description of the FirstMark Agreement
is qualified in its entirety by reference to such Exhibit, which is hereby
incorporated herein by reference.
Mandl Employment Agreement
Under the Issuer's Employment Agreement with Alex J. Mandl, the Issuer's
Chairman and Chief Executive Officer, which took effect on September 1, 1996
(the "Mandl Employment Agreement") and to which MSI and DSC are parties for
certain limited purposes, the Issuer has granted Mr. Mandl certain limited
"piggyback" and demand registration rights with respect to the shares of Class A
Common Stock which are subject to stock options under the 1997 Plan as a result
of the conversion, in connection with the IPO, of the Company Appreciation
Rights ("CARs") with respect to Teligent, L.L.C. granted pursuant to the Mandl
Employment Agreement into stock options. The Mandl Employment Agreement also
provides that if either MSI or DSC sells any of their respective interests in
the Issuer to a third party, such seller shall be obligated to require the
purchaser of such interest to purchase, and may require Mr. Mandl to sell to
such third party, a proportionate percentage of the vested equity interest
represented by Mr. Mandl's CARs (which have been converted into stock options as
described above) valued as of the date of such purchase, at the same price paid
by the third party for the interest of such seller. The Mandl Employment
Agreement also provides for a right of first refusal on the part of MSI and DSC
with respect to the disposition by Mr. Mandl of an equity interest in the
Issuer. The Mandl Employment Agreement is incorporated by reference as Exhibit
7(g) to this Statement, and the foregoing description of the Mandl Employment
Agreement is qualified in its entirety by reference to such Exhibit, which is
hereby incorporated herein by reference.
Registration Rights Agreement
The Issuer and MSI have entered into a Registration Rights Agreement dated
as of March 6, 1998 (the "Registration Rights Agreement"), whereby the Issuer
has granted to MSI certain registration rights substantially similar to those
granted to NTTA&T pursuant to a Registration Rights Agreement dated as of
September 30, 1997, and to those granted to DSC pursuant to the Members
Agreement.
The Registration Rights Agreement provides that, subject to meeting certain
minimum number of shares or anticipated offering price thresholds and to certain
holdback periods, MSI may demand registration (each, a "Demand Registration") of
the shares of Class A Common Stock into which its shares of Series B-1 Common
Stock have been converted ("Registrable Securities"), at any time (subject to a
maximum of three Demand Registrations in total) commencing six months after
November 26, 1997 (the date of consummation of the Issuer's initial public
offering of Class A Common Stock). In addition, the Registration Rights
Agreement provides that, subject to certain limitations, MSI may include
Registrable Securities in any registration of Common Stock by the
Page 11 of 20 Pages
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Issuer under the Securities Act (other than on Form S-4 or S-8 under the
Securities Act) (each, a "Piggyback Registration"). MSI also has the right,
commencing six months after November 26, 1997, subject to certain limitations,
to demand that the Issuer effect a registration on Form S-3 under the Securities
Act, if available, (a "Form S-3 Registration") of all or part of its Registrable
Securities, so long as the anticipated aggregate offering price for such
Registrable Securities is in excess of $10 million.
Under the Registration Rights Agreement, the Issuer is required to pay all
registration expenses (other than underwriting discounts and commissions and
fees and disbursements of counsel of the selling stockholders) with respect to
all Demand Registrations and Form S-3 Registrations and up to three Piggyback
Registrations. Under the Registration Rights Agreement, the Issuer is required
to indemnify the selling stockholders, and the Issuer may request as a condition
to effecting any registration indemnification from the selling stockholders,
against certain liabilities in respect of any registration statement covered by
the Registration Rights Agreement.
The Registration Rights Agreement is incorporated by reference as
Exhibit 7(h) to this Statement, and the foregoing description of the
Registration Rights Agreement is qualified in its entirety by reference to such
Exhibit, which is hereby incorporated herein by reference.
January 2000 Stockholders Agreement
On January 13, 2000, Mr. Mandl, Liberty Media, the Telcom Stockholder and,
following the effective time of the Merger, MSI entered into a Stockholders
Agreement with respect to the Issuer (the "January 2000 Stockholders
Agreement"). The January 2000 Stockholders Agreement provides that the parties
will vote their shares so that the Issuer's board of directors shall consist of
eight directors of which three directors will be nominees of MSI and two
directors will be nominees of the Telcom Stockholder. The other three directors
will be (1) Alex J. Mandl for so long as Alex J. Mandl is Chief Executive
Officer of the Issuer, (2) one director nominated by NTTA&T for so long as the
holders of Series B-3 common stock are entitled to designate a director and (3)
one director nominated by Hicks Muse, its affiliates and their officers,
directors, partners and employees and their families (collectively, "Hicks
Muse") for so long as such group holds a specified amount of the Series A
Preferred Stock of the Issuer or Class A Common Stock issuable upon the
conversion thereof. If Alex J. Mandl is no longer a director, NTTA&T is no
longer entitled to designate a director or Hicks Muse is no longer entitled to
designate a director, the replacement for any such director will be an
additional designee who is not affiliated with MSI, the Telcom Stockholder, Alex
J. Mandl or Liberty Media and who is mutually acceptable to each of the
directors designated by MSI and the Telcom Stockholder and one other director
(an "Additional Designee"). The January 2000 Stockholders Agreement also
provides that if Alex J. Mandl ceases to be the Chief Executive Officer of the
Issuer, he will be replaced with an individual who meets the requirements of an
Additional Designee. The January 2000 Stockholders Agreement will terminate on
the earliest of (a) the consummation of a merger transaction in which all of the
outstanding shares of Common Stock of the Issuer are acquired by any party, (b)
September 30, 2001, and (c) September 30, 2000, if MSI and the Telcom
Page 12 of 20 Pages
<PAGE>
Stockholder agree to terminate it on that date. MSI's designees on the Issuer's
board of directors are Robert R. Bennett, Gary S. Howard and David J. Berkman.
A copy of the January 2000 Stockholders Agreement is attached hereto as
Exhibit 7(i) and the foregoing description of the January 2000 Stockholders
Agreement is qualified in its entirety by reference to such Exhibit, which is
hereby incorporated by reference.
Except as described or incorporated by reference in the Schedule 13D,
neither the Reporting Person nor, to the best knowledge of the Reporting Person,
any of its directors, or executive officers has any contracts, arrangements,
understandings or relationships with respect to any securities of the Issuer.
Item 7. Materials to be Filed as Exhibits.
Exhibit 7(a) Agreement and Plan of Restructuring and Merger, dated as of June
23, 1998, among AT&T Corp., Italy Merger Corp. and Tele-
Communications, Inc. (incorporated by reference to Appendix A to
the AT&T/TCI Proxy Statement/Prospectus that forms a part of the
Registration Statement on Form S-4 of AT&T Corp. (File No. 333-
70279), filed on January 8, 1999 (the "AT&T Registration
Statement"))
Exhibit 7(b) AT&T/TCI Proxy Statement/Prospectus (incorporated by reference to
the AT&T Registration Statement)
Exhibit 7(c) Amended and Restated Agreement and Plan of Merger, dated as of
October 28, 1999, among AT&T Corp., A-Group Merger Corp., Liberty
Media Corporation and The Associated Group, Inc. (incorporated by
reference to Appendix A to the Proxy Statement/Prospectus that
forms a part of the Registration Statement on Form S-4 of AT&T
Corp. (File No. 333-89915), filed on October 29, 1996)
Exhibit 7(d) Agreement, dated September 29, 1997, among Teligent, L.L.C.,
Digital Services Corporation, Telcom-DTS Investors, L.L.C.,
Microwave Services, Inc., The Associated Group, Inc. and certain
other parties (incorporated by reference to Exhibit 1 to the
Report on Schedule 13D of the Associated Group, Inc. and
Microwave Services, Inc., dated December 8, 1997 (the "AGI
Schedule 13D"))
Exhibit 7(e) Stockholders Agreement, dated as of November 26, 1997, by and
among Teligent, Inc., Microwave Services, Inc., Telcom-DTS
Investors, L.L.C. and NTTA&T Investment Inc. (incorporated by
reference to Exhibit 2 to the AGI Schedule 13D)
Exhibit 7(f) Stock Contribution Agreement dated as of March 10, 1997 among
Associated Communications, L.L.C., First Mark Communications,
Inc. and Lynn Forester (incorporated by reference to Exhibit 3 to
the AGI Schedule 13D)
Page 13 of 20 Pages
<PAGE>
Exhibit 7(g) Employment Agreement, dated August 19, 1996, between Associated
Communications, L.L.C. and Alex J. Mandl (incorporated by
reference to Exhibit 4 to the AGI Schedule 13D)
Exhibit 7(h) Registration Rights Agreement, dated as of March 6, 1998, by and
between Teligent, Inc. and Microwave Services, Inc. (incorporated
by reference to Exhibit 6 to Amendment No. 1 to the AGI Schedule
13D, dated March 9, 1999)
Exhibit 7(i) Stockholders Agreement, dated January 13, 2000, by and among Alex
J. Mandl, Liberty Media Corporation, Telcom-DTS Investors, L.L.C.
and Microwave Services, Inc.
Page 14 of 20 Pages
<PAGE>
SIGNATURE
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.
Dated: January 24, 2000
LIBERTY AGI, INC.
By: /s/ Charles Y. Tanabe
---------------------
Name: Charles Y. Tanabe
Title: Senior Vice President and General
Counsel
Page 15 of 20 Pages
<PAGE>
SCHEDULE 1
DIRECTORS AND EXECUTIVE OFFICERS
OF
LIBERTY MEDIA CORPORATION
The name and present principal occupation of each director and executive
officer of Liberty Media Corporation ("Liberty") are set forth below. The
business address for each person listed below is c/o Liberty Media Corporation,
9197 South Peoria Street, Englewood, Colorado 80112. All executive officers and
directors listed on this Schedule 1 are United States citizens, except for David
J.A. Flowers, who is a Canadian citizen.
<TABLE>
<CAPTION>
Name Principal Occupation
- ---- --------------------
<S> <C>
John C. Malone Chairman of the Board and Director of Liberty; Director
of AT&T Corp.
Robert R. Bennett President, Chief Executive Officer and Director of
Liberty
Gary S. Howard Executive Vice President, Chief Operating Officer of
Liberty
Daniel E. Somers Director of Liberty; Senior Executive Vice President
and Chief Financial Officer of AT&T Corp.
John C. Petrillo Director of Liberty; Executive Vice President, Corporate
Strategy and Business Development of AT&T Corp.
Larry E. Romrell Director of Liberty; Consultant to Tele-Communications,
Inc.
Jerome H. Kern Director of Liberty
Paul A. Gould Director of Liberty; Managing Director of Allen & Co.
John D. Zeglis Director of Liberty; Director and President of AT&T Corp.
David B. Koff Senior Vice President and Assistant Secretary of Liberty
Charles Y. Tanabe Senior Vice President, General Counsel and Assistant
Secretary of Liberty
Peter Zolintakis Senior Vice President of Liberty
Vivian J. Carr Vice President and Secretary of Liberty
Kathryn S. Douglass Vice President and Controller of Liberty
David J.A. Flowers Vice President and Treasurer of Liberty
</TABLE>
Page 16 of 20 Pages
<PAGE>
SCHEDULE 2
DIRECTORS AND EXECUTIVE OFFICERS
OF
AT&T CORP.
The name and present principal occupation of each director and executive
officer of AT&T Corp. are set forth below. The business address for each person
listed below is c/o AT&T Corp., 295 North Maple Avenue, Basking Ridge, New
Jersey 07920. All executive officers and directors listed on this Schedule 2
are United States citizens.
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
C. Michael Armstrong Chairman of the Board, Chief Executive Officer and
Director
Kenneth T. Derr Director; Chairman and Chief Executive Officer of
Chevron Corporation
M. Kathryn Eickhoff Director; President of Eickhoff Economics Incorporated
Walter Y. Elisha Director; Retired Chairman and Chief Executive
Officer of Springs Industries, Inc.
George M. C. Fisher Director; Chairman and Chief Executive Officer of
Eastman Kodak Company
Donald V. Fites Director; Retired Chairman of Caterpillar, Inc.
Amos B. Hostetter, Jr. Director; Chairman of Pilot House Associates
Ralph S. Larsen Director; Chairman and Chief Executive Officer of
Johnson & Johnson
John C. Malone Director; Chairman of Liberty Media Corporation
Donald F. McHenry Director; President of The IRC Group LLC
Michael I. Sovern Director; President Emeritus and Chancellor Kent
Professor of Law at Columbia University
Sanford I. Weill Director; Chairman and Co-CEO of Citigroup Inc.
Thomas H. Wyman Director
John D. Zeglis President and Director
Harold W. Burlingame Executive Vice President, Merger & Joint Venture
Integration
James W. Cicconi Executive Vice President-Law & Government Affairs
and General Counsel
</TABLE>
Page 17 of 20 Pages
<PAGE>
<TABLE>
<S> <C>
Mirian M. Graddick Executive Vice President, Human Resources
Daniel R. Hesse Executive Vice President and President & CEO, AT&T
Wireless Services, Inc.
Frank Ianna Executive Vice President and President, AT&T Network
Services
Michael G. Keith Executive Vice President and President, Business
Services
H. Eugene Lockhart Executive Vice President and President, AT&T
Consumer Services
Richard J. Martin Executive Vice President, Public Relations and
Employee Communication
David C. Nagel President, AT&T Labs & Chief Technology Officer
John C. Petrillo Executive Vice President, Corporate Strategy and
Business Development
Richard R. Roscitt Executive Vice President and President & CEO, AT&T
Solutions
Daniel E. Somers Senior Executive Vice President and Chief Financial
Officer
</TABLE>
Page 18 of 20 Pages
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
7(a) Agreement and Plan of Restructuring and Merger, dated as of June 23,
1998, among AT&T Corp., Italy Merger Corp. and Tele-Communications, Inc.
(incorporated by reference to Appendix A to the AT&T/TCI Proxy
Statement/Prospectus that forms a part of the Registration Statement on
Form S-4 of AT&T Corp. (File No. 333-70279), filed on January 8, 1999
(the "AT&T Registration Statement"))
7(b) AT&T/TCI Proxy Statement/Prospectus (incorporated by reference to the
AT&T Registration Statement)
7(c) Amended and Restated Agreement and Plan of Merger, dated as of October
28, 1999, among AT&T Corp., A-Group Merger Corp., Liberty Media
Corporation and The Associated Group, Inc. (incorporated by reference to
Appendix A to the Proxy Statement/Prospectus that forms a part of the
Registration Statement on Form S-4 of AT&T Corp. (File No. 333-89915),
filed on October 29, 1996)
7(d) Agreement, dated September 29, 1997, among Teligent, L.L.C., Digital
Services Corporation, Telcom-DTS Investors, L.L.C., Microwave Services,
Inc., The Associated Group, Inc. and certain other parties (incorporated
by reference to Exhibit 1 to the Report on Schedule 13D of the Associated
Group, Inc. and Microwave Services, Inc., dated December 8, 1997 (the
"AGI Schedule 13D"))
7(e) Stockholders Agreement, dated as of November 26, 1997, by and among
Teligent, Inc., Microwave Services, Inc., Telcom-DTS Investors, L.L.C.
and NTTA&T Investment Inc. (incorporated by reference to Exhibit 2 to the
AGI Schedule 13D)
7(f) Stock Contribution Agreement dated as of March 10, 1997 among Associated
Communications, L.L.C., First Mark Communications, Inc. and Lynn Forester
(incorporated by reference to Exhibit 3 to the AGI Schedule 13D)
7(g) Employment Agreement, dated August 19, 1996, between Associated
Communications, L.L.C. and Alex J. Mandl (incorporated by reference to
Exhibit 4 to the AGI Schedule 13D)
7(h) Registration Rights Agreement, dated as of March 6, 1998, by and between
Teligent, Inc. and Microwave Services, Inc. (incorporated by reference to
Exhibit 6 to Amendment No. 1 to the AGI Schedule 13D, dated March 9,
1999)
Page 19 of 20 Pages
<PAGE>
7(i) Stockholders Agreement, dated January 13, 2000, by and among Alex J.
Mandl, Liberty Media Corporation, Telcom-DTS Investors, L.L.C. and
Microwave Services, Inc.
Page 20 of 20 Pages
<PAGE>
Exhibit 7(i)
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of January __, 2000 (this
"Stockholders Agreement"), by and among Alex J. Mandl ("Mr. Mandl"), Liberty
---------------------- ---------
Media Corporation, a Delaware corporation ("Liberty Media") (solely for purposes
-------------
of Section 2(b)), Telcom-DTS Investors, L.L.C., a Delaware limited liability
company ("Telcom") and, as of the Effective Time, as defined below, Microwave
------
Services, Inc., a Delaware corporation ("MSI").
---
WHEREAS, Teligent, Inc., a Delaware corporation (the "Company"),
-------
Telcom, the members of Telcom, Digital Services Corporation, a Virginia
corporation ("DSC"), MSI, and the Associated Group, Inc., a Delaware corporation
---
("AGI"), are parties to an agreement (the "Registration Rights Agreement") dated
--- -----------------------------
as of September 29, 1997, providing for certain rights and obligations of
Telcom, DSC, MSI and AGI relating to their ownership interests in the Company;
WHEREAS, on June 1, 1999, Liberty Media and AGI announced that they
had signed a definitive merger agreement, dated as of May 28, 1999 (the "Merger
------
Agreement"), pursuant to which, among other things, AGI will be acquired in a
- ---------
stock-for-stock merger with a subsidiary of AT&T Corp. (the "Merger") and MSI
------
will become an indirect wholly owned subsidiary of Liberty AGI, Inc. a Delaware
corporation ("LAGI");
----
WHEREAS, LAGI is an affiliate of Liberty, and, as of the Effective
Time, MSI will be an Affiliate (as defined below) of Liberty;
WHEREAS, as contemplated by the Merger Agreement, immediately prior to
the Effective Time, two of the current five representatives of MSI on the Board
of Directors (the "Board") of the Company will resign and MSI, as the sole
-----
holder of Class B-Series 1 Common Stock of the Company, will fill the resulting
vacancies with two persons selected by Liberty Media (the "Liberty Nominees");
----------------
and
WHEREAS, the parties hereto desire to establish certain arrangements
regarding the governance of the Company at and after the effective time (the
"Effective Time") of the Merger.
--------------
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereby agree as follows:
1
<PAGE>
Section 1. Definitions. Capitalized terms used herein and not
------------
otherwise defined shall have the meanings ascribed to them in the Registration
Rights Agreement.
(a) "Independent Person" means a person who, prior to and as of the
time of such person's initial nomination and election or appointment as a
director of the Company, and at all times during such person's incumbency as a
director, does not have any substantial business or other financial relationship
(other than de minimis shareholdings in the Company, Telcom and/or MSI and their
respective Affiliates) with any of the parties or their respective Affiliates.
For purposes of this definition, such nominee may be a board member with Mr.
Mandl on the boards of other companies, and such relationship shall not, in and
of itself, be considered a "substantial business relationship."
(b) "Additional Designee" shall be a person elected or appointed to
fill a vacancy on the Board that results from an event described in Section 3(g)
below, which person at the time of his or her initial nomination and election or
appointment meets the following requirements: such person is an Independent
Person who is acceptable to each of (i) the Telcom Designees on the Board, (ii)
the MSI Designees on the Board and (iii) at least one other director. As
provided under Section 3(b) below, there may be more than one Additional
Designee on the Board at any time.
(c) "Liberty Designees" means three persons designated from time to
time by MSI.
(d) "Telcom Designees" means two persons designated from time to time
by Telcom. So long as Telcom, by virtue of its beneficial ownership of Series
B-2 common stock of the Company, is entitled to designate one director, such
Series B-2 director shall be one of the two Telcom Designees.
(e) "Designees" means the Additional Designees, the Liberty Designees
and the Telcom Designees.
(f) "Affiliate" means, with respect to any specified person, any
other person that, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, the person
specified. Notwithstanding the foregoing, the parties hereto understand and
agree that neither AT&T Corp. nor any subsidiary of AT&T Corp. that is not a
member of the Liberty Media Group shall be deemed to be an Affiliate of any
person that is a member of the Liberty Media Group, except that, for purposes of
the definition of Independent Person and for purposes of Section 5(b), AT&T
Corp. and its subsidiaries shall be deemed to be Affiliates of MSI for so long
as AT&T Corp. directly or indirectly owns more than 50% of the
2
<PAGE>
voting stock of MSI. For purposes of this definition, Liberty Media Group shall
include, without limitation, Liberty Media, LAGI and, following the Effective
Time, MSI.
(g) "Stockholder" means each of Telcom, MSI and Mr. Mandl.
Section 2. Composition of the Board.
------------------------
(a) The parties hereto agree that each of the following events (the
occurrence of each of which shall be mutually conditioned upon the occurrence of
the others) shall occur or become effective immediately after the Effective
Time:
(i) two of the five representatives of MSI on the Board (including the
MSI representative appointed to the Board in connection with the closing of the
sale of the Company's 7 3/4% convertible preferred stock (the "Company Preferred
-----------------
Stock"), but excluding the Liberty Nominees), shall resign;
- -----
(ii) the Board shall adopt resolutions reducing the size of the Board
to eight and filling the remaining vacancy on the Board created by the
resignations described in clause (i) above with a Telcom Designee;
(iii) all of the Class B-Series 1 Common Stock of the Company will
convert into Class A Common Stock of the Company;
(iv) MSI will become a party to this Agreement; and
(v) Telcom, on behalf of itself and DSC, will waive compliance with
Section 2(c)(i) of the Registration Rights Agreement.
(b) The parties hereto agree to take and cause their respective
Affiliates and designated representatives on the Board to take all action within
its or their collective control and power necessary to ensure that, if the
Effective Time occurs, the events described in Section 2(a) above occur
immediately thereafter. Without limiting the generality of the foregoing,
Liberty Media covenants and agrees to cause MSI to become a party hereto at the
Effective Time by executing and delivering a counterpart of this Stockholders
Agreement to the other parties.
3
<PAGE>
(c) Telcom hereby acknowledges and agrees, on behalf of itself and
DSC, that the occurrence of the events contemplated by Section 2(a) of this
Stockholders Agreement will satisfy the requirements of Section 2 of the
Registration Rights Agreement, as such requirements relate to the transactions
contemplated by the Merger Agreement.
Section 3. Covenants.
----------
The Stockholders shall, and shall cause their respective Affiliates
and their designated representatives on the Board to, from and after the
Effective Time, take all action within their collective control and power
(including, without limitation, (i) convening meetings of the Company's Board of
Directors, and (ii) if necessary, the voting of shares of Company common stock
owned directly or indirectly by such Stockholder or by an Affiliate thereof)
necessary to ensure that:
(a) the size of the Board shall be eight members;
(b) the Stockholders and their Affiliates comply with the provisions
of Section 8 of the November 1997 Agreement (as defined in Section 6 below),
provided that, if Mr. Mandl is no longer Chief Executive Officer of the Company,
- -------- ----
the Stockholders shall, and shall cause their respective Affiliates and their
designated representatives on the Board to, take all action within their
collective control and power necessary to ensure that the person selected as
Chief Executive Officer of the Company meets the requirements for an Additional
Designee;
(c) each of MSI and Telcom nominates their respective Designees and the
Stockholders vote, and cause their respective Affiliates to vote, to elect the
Designees as, and to cause the Designees to be, directors of the Company in
accordance herewith at all times following, the Effective Time, and such
Designees are not removed as directors unless the Stockholder who nominated any
such Designee ("Nominator") determines he/she should be removed (in which case
---------
he/she shall be removed and replaced by a new Designee by the Nominator);
(d) each of the Designees shall continue to be nominated and elected as a
director of the Company and to be a director of the Company until the
Termination Date;
(e) any vacancy in the seat on the Board held by a Designee, which
vacancy occurs subsequent to the Effective Time, shall be filled by the
respective Nominator with another Designee immediately;
4
<PAGE>
(f) as soon as practicable after the Effective Time, the Company's
Certificate of Incorporation shall be amended to add the following proviso to
the end of the last sentence of Article Sixth thereof:
"; provided further, that stockholders shall be entitled to act by
written consent in accordance with Section 228 of the DGCL without regard
to any of the foregoing restrictions in order to implement or enforce the
provisions of the Stockholders Agreement dated as of January , 2000,
by and among Alex J. Mandl, Liberty Media Corporation, Microwave Services,
Inc. and Telcom-DTS Investors, L.L.C.";
(g) in the event that any of the following events occur: (i) the
beneficial owner of the Class B-Series 3 Common Stock is no longer entitled
to designate a Series B-3 director; (ii) the investors in the Company
Preferred Stock who are entitled to designate a director (the "HMTF
----
Director") are no longer entitled to designate the HMTF Director; (iii) Mr.
--------
Mandl is no longer a member of the Board; or (iv) an Additional Designee
resigns or is removed, then, in each such case, the resulting director
vacancy shall be filled with a person that meets the requirements for an
Additional Designee within 30 days of the Stockholders' obtaining knowledge
of such vacancy; and
(h) no action is taken which would have the effect of eliminating,
limiting, restricting, avoiding or otherwise modifying the effect of any
provision contained herein.
Section 4. No Inconsistent Agreements. Each Stockholder hereby
--------------------------
covenants and agrees that neither it nor any of its Affiliates shall enter into
any voting agreement or grant a proxy or power of attorney with respect to the
shares of voting stock of the Company it beneficially owns which is inconsistent
with this Stockholders Agreement. Each party hereby represents and warrants
that this Stockholders Agreement:
(a) has been duly authorized, executed and delivered by such party;
and
(b) is a binding obligation of such party, enforceable against such
party in accordance with its terms and does not require the consent of any
person not a party hereto to be effective to bind such party and the shares of
the Company common stock held by such party or any Affiliate thereof.
Section 5. Transfer of Shares. (a) Except as set forth in (b)
-------------------
below and subject to the provisions of Section 10 below, each Stockholder and
its Affiliates shall be free to sell and otherwise transfer any and all of their
shares of Company stock free and clear of any obligations set forth herein;
provided, however, that in the case of a transfer of all of the remaining shares
of
5
<PAGE>
Company stock owned by a Stockholder and its Affiliates, such Stockholder
shall no longer be a party hereunder.
(b) Notwithstanding the foregoing sentence, (i) Telcom agrees that
this Stockholders Agreement and the rights and obligations hereunder shall
attach to each of the shares of voting stock of the Company it beneficially owns
and shall be binding upon any Affiliates of Telcom to which legal or beneficial
ownership shall pass whether by sale, transfer or operation of law and (ii) MSI
(upon its becoming a signatory hereto) agrees that this Stockholders Agreement
and the rights and obligations hereunder shall attach to each of the shares of
voting stock of the Company it beneficially owns and shall be binding upon any
Affiliate of MSI to which legal or beneficial ownership shall pass whether by
sale, transfer or operation of law (provided that beneficial ownership of such
shares shall not be deemed to pass as a result of a change in ownership of MSI
if after such change MSI continues to be the record owner of such shares and is
a member of the Liberty Media Group).
Section 6. Information and Consultation Rights. The parties hereby
-----------------------------------
agree that for the term of this Agreement, so long as MSI (upon its becoming a
signatory hereto) and Telcom, respectively, remain a party hereto and are in
compliance with the provisions hereof, the Company will (a) use reasonable
efforts to provide regular information to, consult with and obtain the advice of
each of their Designees, respectively, in connection with ordinary decisions of
the Board of Directors and (b) have Consultation (as such term is defined in the
Stockholders' Agreement dated November 26, 1997 among the Company, MSI, Telcom,
NTTA&T Investment Inc. and NTT ("November 1997 Agreement") with each of MSI and
-----------------------
Telcom for any Consultation Event (as such term is defined in the November 1997
Agreement).
Section 7. Effectiveness; Termination. Except as otherwise expressly
--------------------------
provided herein and except for Sections 2(b) and 2(c) and this Section 7, which
shall become effective upon execution and delivery hereof, this Stockholders
Agreement shall become effective as of the Effective Time. This Stockholders
Agreement shall terminate at the close of business on the earliest of (i) the
consummation of a merger transaction in which all of the outstanding shares of
Common Stock of the Company are acquired by any party, (ii) September 30, 2001,
(iii) September 30, 2000 (in the case of a written agreement between MSI and
Telcom prior to such date, providing that this Stockholders Agreement shall be
terminated as of September 30, 2000) and (iv) the date on which the Merger
Agreement is terminated if the Merger is not consummated, provided that if this
Stockholders Agreement is terminated pursuant to this clause (iv), this
Stockholders Agreement shall become effective again if Liberty Media or any of
its Affiliates and AGI or any of its Affiliates thereafter and prior to the
occurrence of an event specified in (i), (ii) or (iii) above, enter into any
agreement similar to the Merger Agreement (the earliest of (i), (ii), (iii) or
(iv), the "Termination Date").
----------------
6
<PAGE>
Section 8. Notices. All notices, requests, claims, demands and other
-------
communications under this Stockholders Agreement shall be in writing and shall
be given or made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by facsimile (transmission confirmed), by
courier service or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 8):
if to Mr. Mandl
c/o Teligent, Inc.
8065 Leesburg Pike
Vienna, VA 22182
Telecopier No.: (703) 762-5222;
with a copy to
Teligent, Inc.
8065 Leesburg Pike
Vienna, VA 22182
Telecopier No.: (703) 762-5227
Attention: General Counsel;
if to MSI or Liberty Media
Liberty Media Corporation
9197 South Peoria Street
Englewood, CO 80112
Telecopier No.: (720) 875-5382
Attention: General Counsel;
if to Telcom
Telcom Ventures, L.L.C.
211 North Union Street, Suite 300
Alexandria, VA 22314
Telecopier No.: (703) 706-3801
Attention: President and General Counsel
Section 9. Severability. If any term or other provision of this
------------
Stockholders Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all
7
<PAGE>
other conditions and provisions of this Stockholders Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Stockholders Agreement is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Stockholders Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this
Stockholders Agreement be consummated as originally contemplated to the fullest
extent possible.
Section 10. Entire Agreement; Assignment. This Stockholders
----------------------------
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof; provided, however, the parties expressly agree that the terms and
conditions of the November 1997 Agreement are in no manner amended, modified or
waived by this Stockholders Agreement. Except as expressly set forth herein,
the provisions of the Registration Rights Agreement shall not be amended,
modified or waived by this Stockholders Agreement. This Stockholders Agreement
and all of the rights, interests and obligations under this Stockholders
Agreement may only be assigned by MSI or Telcom, respectively, in connection
with a transfer by MSI or Telcom, respectively, of all, but not less than all,
of the shares of voting stock of the Company held by the transferor at the time
of such transfer to the transferee; provided, that in connection with any such
transfer, MSI or Telcom, as applicable, shall require such transferee to
unconditionally agree in writing to become a "party" and a "Stockholder" for
purposes of this Stockholders Agreement and to be bound by the terms and
conditions hereof ; provided, further, that such shares of voting stock of the
Company being transferred must represent in the aggregate no less than 25% of
the voting stock of the Company beneficially owned by MSI or Telcom, as
applicable, as of the Effective Time (as adjusted for stock splits, stock
dividends, reverse stock splits and similar events). Notwithstanding the
foregoing or any other provisions of this Stockholders Agreement, in no event
shall any transferee acquiring shares from a Stockholder in connection with a
bona fide public offering or a Rule 144 sale become or be required to become a
party hereto or bound hereby. Any purported assignment in violation of this
Section 10 shall be void.
Section 11. Parties in Interest; Certain Events. Except as
-----------------------------------
specifically set forth in Sections 4 and 10 this Stockholders Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Stockholders Agreement, express or implied, is intended to or shall
confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Stockholders Agreement.
Section 12. Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event any provision of this Stockholders
Agreement were not
8
<PAGE>
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
Section 13. Governing Law. This Stockholders Agreement shall be
-------------
governed by and construed in accordance with the laws of the State of Delaware,
without regard to any principles of conflicts of laws of such State.
Section 14. Consent to Jurisdiction. (a) Subject to Section 18
-----------------------
hereof, each party hereby irrevocably submits to the exclusive jurisdiction of
the courts of the State of Delaware and to the jurisdiction of the United States
District Court for the State of Delaware, for the purpose of any action or
proceeding arising out of or relating to this Stockholders Agreement, and each
party hereby irrevocably agrees that all claims in respect of such action or
proceeding shall be heard and determined exclusively in any Delaware state or
federal court. Each party agrees that a final judgment in any action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(b) Each party irrevocably consents to the service of the summons and
complaint and any other process in any other action or proceeding relating to
the transactions contemplated by this Stockholders Agreement, on behalf of
itself or its property, by personal delivery of copies of such process to such
party. Nothing in this Section 14 shall affect the right of any party to serve
legal process in any other manner permitted by law.
Section 15. Headings. The descriptive headings contained in this
--------
Stockholders Agreement are included for convenience of reference only and shall
not affect in any way the meaning or interpretation of this Stockholders
Agreement.
Section 16. Amendments. This Stockholders Agreement may be amended
----------
or modified, and the terms and conditions hereof may be waived, only by a
written instrument signed by the parties hereto or, in the case of a waiver, by
each party waiving compliance.
Section 17. Counterparts. This Stockholders Agreement may be
------------
executed and delivered (including by facsimile transmission) in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed and delivered shall be deemed to be an original but all
of which taken together shall constitute one and the same agreement.
Section 18. WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY
--------------------
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS STOCKHOLDERS
9
<PAGE>
AGREEMENT OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT THEREOF.
10
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has executed or caused
this Stockholders Agreement to be executed as of the date first written above by
its respective officers thereunto duly authorized.
ALEX J. MANDL,
by
---------------------------
Alex J. Mandl
TELCOM-DTS INVESTORS, L.L.C.,
by
---------------------------
Name:
Title:
LIBERTY MEDIA CORPORATION,
(for purposes of Section 2(b) only)
by
---------------------------
Name:
Title:
As of the Effective Time: MICROWAVE SERVICES,
INC.,
by
---------------------------
Name:
Title:
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