SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
XM SATELLITE RADIO HOLDINGS INC.
--------------------------------
(Name of Issuer)
Class A Common Stock, par value $0.01 per share
-----------------------------------------------
(Title of Class of Securities)
983759-10-1
-----------
(CUSIP Number)
Christine J. Smith
Vice President
AEA XM Investors Inc.
65 East 55th Street
New York, New York 10022
(212) 644-9500
--------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
August 8, 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 Rule 13d-1(b)(3) or (4), check the following box |_|
Page 1 of 15
Exhibit Index on page 15
<PAGE>
SCHEDULE 13D
_____________________________ _____________________________
CUSIP No. 983759-10-1 Page 2 of 15
_____________________________ _____________________________
________________________________________________________________________________
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
AEA XM Investors Inc.
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)[_]
(b)[X]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS
OO
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
------------------------------------
Delaware
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------
BENEFICIALLY
OWNED 2,264,150
BY EACH
REPORTING
PERSON WITH _________________________________________________________________
8 SHARED VOTING POWER
-------------------
0
_________________________________________________________________
9 SOLE DISPOSITIVE POWER
----------------------
2,264,150
_________________________________________________________________
10 SHARED DISPOSITIVE POWER
------------------------
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
------------------------------------------------------------
2,264,150
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
---------------------------------------------------------------------
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
--------------------------------------------------
7.0%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON
------------------------
OO
________________________________________________________________________________
<PAGE>
SCHEDULE 13D
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CUSIP No. 983759-10-1 Page 3 of 15
_____________________________ _____________________________
________________________________________________________________________________
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
AEA XM Investors I LLC
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)[_]
(b)[X]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS
OO
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
------------------------------------
Delaware
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------
BENEFICIALLY
OWNED 259,207
BY EACH
REPORTING
PERSON WITH _________________________________________________________________
8 SHARED VOTING POWER
-------------------
0
_________________________________________________________________
9 SOLE DISPOSITIVE POWER
----------------------
259,207
_________________________________________________________________
10 SHARED DISPOSITIVE POWER
------------------------
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
------------------------------------------------------------
2,264,150
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
---------------------------------------------------------------------
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
--------------------------------------------------
7.0%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON
------------------------
OO
________________________________________________________________________________
<PAGE>
SCHEDULE 13D
_____________________________ _____________________________
CUSIP No. 983759-10-1 Page 4 of 15
_____________________________ _____________________________
________________________________________________________________________________
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
AEA XM Investors II LLC
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)[_]
(b)[X]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS
OO
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
------------------------------------
Delaware
________________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES -----------------
BENEFICIALLY
OWNED 2,004,943
BY EACH
REPORTING
PERSON WITH _________________________________________________________________
8 SHARED VOTING POWER
-------------------
0
_________________________________________________________________
9 SOLE DISPOSITIVE POWER
----------------------
2,004,943
_________________________________________________________________
10 SHARED DISPOSITIVE POWER
------------------------
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
------------------------------------------------------------
2,264,150
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
---------------------------------------------------------------------
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
--------------------------------------------------
7.0%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON
------------------------
OO
________________________________________________________________________________
<PAGE>
SCHEDULE 13D
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CUSIP No. 983759-10-1 Page 5 of 15
_____________________________ _____________________________
Item 1. Security and Issuer.
--------------------
The class of equity securities to which this statement on
Schedule 13D relates is the Class A Common Stock, par value $0.01 per share (the
"Class A Common Stock"), of XM Satellite Radio Holdings Inc., a Delaware
corporation (the "Issuer"). The principal executive offices of the Issuer are
located at 1500 Eckington Place, N.E., Washington, D.C. 20002.
Item 2. Identity and Background.
------------------------
This Statement is being filed by AEA XM Investors Inc., a
Delaware corporation ("AEA XM Investors"), AEA XM Investors I LLC, a Delaware
limited liability company ("AEA XM I"), and AEA XM Investors II LLC, a Delaware
limited liability company ("AEA XM II" and collectively with AEA XM I, the "AEA
XM Entities") (each, a "Reporting Person").
On August 8, 2000, AEA XM I and AEA XM II purchased an
aggregate of 60,000 shares of the Issuer's Series C convertible redeemable
preferred stock, par value $0.01 per share (the "Series C Preferred Stock"),
which is convertible into shares of the Class A Stock as described in Item 3. XM
Investors I LP, a Delaware limited partnership ("XM Investors I"), is the
managing member of AEA XM I and XM Investors II LP, a Delaware limited
partnership ("XM Investors II"), is the managing member of AEA XM II. AEA XM
Investors is the general partner of each of the XM Investors I and XM Investors
II.
By virtue of its being the general partner of each of XM
Investors I and XM Investors II, the managing members of AEA XM I and AEA XM II,
respectively, AEA XM Investors may be deemed to have beneficial ownership of any
and all shares of Class A Stock beneficially owned by the AEA XM Entities. The
principal business address of AEA XM Investors and the AEA XM Entities is 65
East 55th Street, New York, New York 10022.
AEA XM Investors was formed to act as the general partner
of each of XM Investors I and XM Investors II. XM Investors I and XM Investors
II were formed to (i) act as the managers of AEA XM I and AEA XM II,
respectively, and (ii) to conduct such other activities as may be necessary or
incidental to the foregoing. AEA XM I and AEA XM II were formed (i) to acquire,
own, hold, sell, convert, exchange and transfer equity interests in or
indebtedness of the Issuer, and (ii) to conduct such other activities as may be
necessary or incidental to the foregoing.
For information with respect to the identity and principal
occupation of each executive officer and director of AEA XM Investors see
Schedule I attached hereto.
None of AEA XM I, AEA XM II or AEA XM Investors nor, to the
best of knowledge of each of them, any of its respective executive officers or
directors, has, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or been party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceedings was or is 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.
<PAGE>
SCHEDULE 13D
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CUSIP No. 983759-10-1 Page 6 of 15
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Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
AEA XM I acquired 6,869 shares of the Issuer's Series C
Preferred Stock, which are convertible into shares of Class A Stock at an
initial exercise price of $26.50 per share, pursuant to the Stock Purchase
Agreement, dated as of July 7, 2000 (the "Purchase Agreement") by and among the
Issuer, Motient Corporation, a corporation duly organized under the laws of the
State of Delaware ("Motient"), the Baron Asset Fund series ("Baron Asset") and
the Baron iOpportunity Fund series ("Baron iOpportunity") of Baron Asset Fund, a
business trust organized under the laws of the Commonwealth of Massachusetts,
and the Baron Capital Asset Fund series of the Baron Capital Funds Trust ("Baron
Capital" and collectively with Baron Asset and Baron iOpportunity, "Baron"), a
business trust organized under the laws of the State of Delaware, Clear Channel
Investments, Inc., a corporation duly organized under the laws of the State of
Nevada ("Clear Channel"), Columbia XM Radio Partners, LLC, a limited liability
company duly organized under the laws of the Commonwealth of Virginia ("Columbia
Radio Partners"), DIRECTV Enterprises, Inc. a corporation duly organized under
the laws of the State of Delaware ("DIRECTV"), General Motors Corporation, a
corporation duly organized under the laws of the State of Delaware ("GM"),
Madison Dearborn Capital Partners III, L.P. ("Madison Capital"), Madison
Dearborn Special Equity III, L.P. ("Madison Equity"), Special Advisors Fund I,
LLC ("Madison Advisors" and, collectively with Madison Capital and Madison
Equity, each an entity duly organized under the laws of the State of Delaware,
"Madison"); Telcom-XM Investors, L.L.C., a limited liability company duly
organized under the laws of the State of Delaware ("Telcom");Columbia XM
Satellite Partners III, LLC, a limited liability company duly organized under
the laws of the Commonwealth of Virginia ("Columbia Satellite Partners"),
Columbia Capital Equity Partners III (QP), L.P., a limited partnership company
duly organized under the laws of the State of Delaware ("Columbia Equity
Partners", and collectively with Columbia Radio Partners and Columbia Satellite
Partners, "Columbia"), American Honda Motor Co, Inc., a corporation duly
organized under the laws of the State of California ("Honda") and the AEA XM
Entities. AEA XM II acquired 53,131 shares of Issuer's Series C Preferred Stock,
pursuant to the Purchase Agreement, which are convertible into shares of Class A
Stock at an initial exercise price of $26.50 per share.
Item 4. Purpose of Transaction.
-----------------------
The AEA XM Entities acquired the Issuer's Series C Preferred Stock as
an equity investment in the Issuer, both to strengthen the financial condition,
and to share in a possible increase in value of a significant business.
Certain of the rights of the AEA XM Entities with respect to the
Issuer are governed by a shareholders' agreement by and among the Issuer, the
AEA XM Entities and certain other significant shareholders of the Issuer (the
"Shareholders' Agreement"). Pursuant to the Shareholders' Agreement, the AEA XM
Entities have the right to select one member of the Issuer's Board of Directors
and will have certain approval rights with regard to the selection of one of the
Board of Directors' independent directors. Certain other material provisions of
the Shareholders' Agreement are described in more detail in Item 6 below.
Except as described above in this Item 4 and below in Item 6, neither
of the AEA XM Entities has any plans or proposals that relate to or would result
in any of the actions or events specified in clauses (a) through (j) of Item 4
of Schedule 13D. Notwithstanding the foregoing, and subject to the restrictions
under the Shareholders' Agreement, the AEA XM Entities may determine to change
their investment intent with
<PAGE>
SCHEDULE 13D
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CUSIP No. 983759-10-1 Page 7 of 15
_____________________________ _____________________________
respect to the Issuer at any time in the future. The AEA XM Entities intend to
vote their respective shares of Series C Preferred Stock as each deems
appropriate from time to time. In determining from time to time whether to sell
their shares of the Series C Preferred Stock (and in what amounts) or to retain
such shares, the AEA XM Entities will take into consideration such factors as
they deem relevant, including the business and prospects of the Issuer,
anticipated future developments concerning the Issuer, existing and anticipated
market conditions from time to time, general economic conditions, regulatory
matters, and other opportunities available to the AEA XM Entities. Each of the
AEA XM Entities reserves the right to acquire additional securities of the
Issuer in the open market, in privately negotiated transactions (which may be
with the Issuer or with third parties) or otherwise, to dispose of all or a
portion of its holdings of securities of the Issuer or to change their intention
with respect to any or all of the matters referred to in this Item 4.
Item 5. Interest in Securities of the Issuer.
-------------------------------------
The Reporting Persons may be deemed to be a part of a group
(within the meaning of Section 13(d) of the Exchange Act) that is composed of
the following entities by virtue of the Shareholders' Agreement: (1) General
Motors; (2) DIRECTV; (3) Clear Channel; (4) Motient; (5) Telcom; (6) Madison
Dearborn; (7) Baron; (8) Columbia; (9) AEA XM Entities; and (10) Honda. The
Reporting Persons expressly disclaim beneficial ownership of the shares of Class
A Common Stock of the Issuer held by the other members of the group, and the
filing of this Statement by the Reporting Persons shall not be construed as an
admission by the Reporting Persons that they are, for purposes of Section 13(d)
of the Exchange Act, the beneficial owner of any of the shares of Class A Common
Stock of the Issuer held by the other members of the group.
Based solely upon the Available Data, the Reporting Persons
believe that, as of August 8, 2000, the members of the group beneficially owned
the number of shares of Class A Common Stock of the Issuer set forth in the
table below, constituting in each case that percentage of the Class A Common
Stock of the Issuer outstanding on August 8, 2000 set forth in the table. The
Issuer's Series A convertible preferred stock is convertible into Class A Common
Stock on a one-for-one basis. The Issuer's Series C Preferred Stock is
convertible into shares of Class A Common Stock at the current conversion price
of $26.50.
Name of Beneficial Owner Number of Shares Percentage
------------------------ ---------------- ----------
MOTIENT 16,757,262 34.3%
GM 11,861,221 27.0%
DIRECTV 6,307,969 16.4%
CLEAR CHANNEL 8,329,877 25.8%
COLUMBIA 3,531,343 10.9%
TELCOM 2,661,211 8.2%
MADISON DEARBORN 4,663,418 14.4%
AEA XM ENTITIES 2,264,151 7.0%
HONDA 1,886,792 5.8%
BARON 2,253,314 7.0%
<PAGE>
SCHEDULE 13D
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CUSIP No. 983759-10-1 Page 8 of 15
_____________________________ _____________________________
On August 8, 2000, AEA XM I acquired 6,869 shares of the
Issuer's Series C Preferred Stock at a purchase price of $1,000 per share, and
on August 8, 2000, AEA XM II acquired 53,131 shares of the Issuer's Series C
Preferred Stock at a purchase price of $1,000 per share.
Except for the transactions reported in this Statement, the
Reporting Persons have not engaged in any other transactions in the Issuer's
Class A Common Stock within the past 60 days.
To the best knowledge of the Reporting Persons, none of the
Reporting Persons' executive officers, managing directors or general partners
(as applicable) has effected any transactions in the Class A Common Stock within
the past 60 days, except that the following persons acquired shares of Class A
Stock, in the amounts indicated below, as a stock distribution made in
connection with that executive officers' personal ownership of certain shares of
the Issuers' Series B Preferred Stock:
Pierce J. Roberts, Jr. 57 shares
Based solely upon the information set forth in the Issuer's
Registration Statement, filed June 13, 2000, and on the Available Data, the
Reporting Persons believe that: (1) on October 8, 1999, each of General Motors
and DIRECTV acquired from the Issuer in a private placement 5,393,252 shares of
the Issuer's Series A convertible preferred stock upon conversion of $50,000,000
principal amount (plus accrued interest) of convertible subordinated notes
previously issued to each of General Motors and DIRECTV by the Issuer, at a
conversion price of approximately $9.52 per share, (2) on October 8, 1999, each
of General Motors and DIRECTV acquired 160,000 shares of the Issuer's Class A
Common Stock in the Issuer's initial public offering (the "Offering"), at a
purchase price of $12.00 per share, the initial public offering price of the
Class A Common Stock, and (3) on August 8, 2000, DIRECTV acquired 20,000 shares
of the Issuer's Series C Preferred Stock at a purchase price of $1,000 per
share.
Based solely upon the information set forth in the Issuer's
Registration Statement, dated June 13, 2000, and on the Available Data, the
Reporting Persons believe that: (1) on October 8, 1999, Clear Channel acquired
from the Issuer in a private placement 8,089,877 shares of Class A Common Stock
upon conversion of $75,000,000 principal amount (plus accrued interest) of a
convertible subordinated note previously issued to Clear Channel by the Issuer,
at a conversion price of approximately $9.52 per share, and (2) on October 8,
1999, Clear Channel acquired 240,000 shares of the Issuer's Class A Common Stock
in the Offering, at a purchase price of $12.00 per share, the initial public
offering price of the Class A Common Stock.
Based solely upon the information set forth in the Issuer's
Registration Statement, filed June 13, 2000, and on the Available Data, the
Reporting Persons believe that: (1) on October 8, 1999, Telcom acquired from the
Issuer in a private placement 2,696,626 shares of Class A Common Stock upon
conversion of $25,000,000 principal amount (plus accrued interest) of
convertible subordinated notes previously issued to Telcom by the Issuer, at a
conversion price of approximately $9.52 per share, and (2) on October 8, 1999,
Telcom acquired 80,000 shares of the Issuer's Class A Common Stock in the
Offering, at a purchase price of $12.00 per share, the initial public offering
price of the Class A Common Stock.
Based solely upon the information set forth in the Issuer's
Registration Statement, filed June 13, 2000, and on the Available Data, the
Reporting Persons believe that: (1) on October 8, 1999 Columbia acquired from
the Issuer in a private placement 2,696,626 shares of Class A Common Stock upon
conversion
<PAGE>
SCHEDULE 13D
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CUSIP No. 983759-10-1 Page 9 of 15
_____________________________ _____________________________
of $25,000,000 principal amount (plus accrued interest) of convertible
subordinated notes previously issued to Telcom by the Issuer, at a conversion
price of approximately $9.52 per share, (2) on October 8, 1999 Columbia acquired
80,000 shares of the Issuer's Class A Common Stock in the Offering, at a
purchase price of $12.00 per share, the initial public offering price of the
Class A Common Stock, (3) on August 8, 2000, Columbia XM Radio acquired 4,500
shares of the Issuer's Series C Preferred Stock at a purchase price of $1,000
per share, (4) on August 8, 2000, Columbia XM Satellite acquired 8,203.313
shares of the Issuer's Series C Preferred Stock at a purchase price of $1,000
per share, and (5) on August 8, 2000, Columbia Capita Equity acquired 7,296.687
acquired shares of the Issuer's Series C Preferred Stock at a purchase price of
$1,000 per share.
Based solely upon the information set forth in the Issuer's
Registration Statement, filed June 13, 2000, and on the Available Data, the
Reporting Persons believe that: (1) on October 8, 1999, M-D Capital Partners
acquired from the Issuer in a private placement 2,622,200 shares of Class A
Common Stock upon conversion of $24,310,000 principal amount (plus accrued
interest) of convertible subordinated notes previously issued to M-D Capital
Partners by the Issuer, at a conversion price of approximately $9.52 per share,
(2) on October 8, 1999, M-D Capital Partners acquired 80,000 shares of the
Issuer's Class A Common Stock in the Offering, at a purchase price of $12.00 per
share, the initial public offering price of the Class A Common Stock and (3) on
August 8, 2000, M-D Capital Partners acquired 48,914 shares of the Issuer's
Series C Preferred Stock at a purchase price of $1,000 per share.
Based solely upon the information set forth in the Issuer's
Registration Statement, filed June 13, 2000, and on the Available Data, the
Reporting Persons believe that: (1) on October 8, 1999, M-D Special Equity
acquired from the Issuer in a private placement 58,247 shares of Class A Common
Stock upon conversion of $540,000 principal amount (plus accrued interest) of
convertible subordinated notes previously issued to M-D Special Equity by the
Issuer, at a conversion price of approximately $9.52 per share and (2) on August
8, 2000, M-D Special Equity acquired 1,086 shares of the Issuer's Series C
Preferred Stock at a purchase price of $1,000 per share.
Based solely upon the information set forth in the Issuer's
Registration Statement, filed June 13, 2000, and on the Available Data, the
Reporting Persons believe that on October 8, 1999, Special Advisors acquired
from the Issuer in a private placement 16,179 shares of Class A Common Stock
upon conversion of $150,000 principal amount (plus accrued interest) of
convertible subordinated notes previously issued to Special Advisors by the
Issuer, at a conversion price of approximately $9.52 per share.
Based solely upon the information set forth in the Issuer's
Registration Statement, filed June 13, 2000, and on the Available Data, the
Reporting Persons believe that: (1) in January 1999, Motient loaned the Issuer
approximately $21.4 million, in exchange for shares of common stock of the
Issuer and a note convertible into additional shares of common stock of the
Issuer, (2) on July 7, 1999, Motient acquired from XM Ventures, a trust
established by Worldspace, all of Worldspace's debt and equity interests in the
Issuer, other than a $75 million loan from Worldspace to the Issuer, in exchange
for 8,614,244 shares of Motient's common stock, par value $.01 per share (the
"Exchange Transaction"), (3) immediately after the Exchange Transaction, the
Issuer reorganized its capital structure and the shares of common stock of the
Issuer owned by Motient were exchanged on a one-for-one basis for shares of
Class B Common Stock and as a result, Motient owned 125 shares of Class B Common
Stock of the Issuer, which constituted 100% of the outstanding Class B Common
Stock, and which were the only shares of the Issuer's capital stock then
outstanding; also as part of this reorganization, certain of the debt interests
acquired by Motient in the
<PAGE>
SCHEDULE 13D
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CUSIP No. 983759-10-1 Page 10 of 15
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Exchange Transaction were exchanged for a single convertible note issued by the
Issuer, convertible into shares of the Issuer's Class B common stock, (4) in
September 1999, the Issuer effected a 53,514 for 1 stock split and as a result,
the 125 shares of Class B Common Stock then owned by Motient were exchanged for
6,689,250 shares of Class B Common Stock, (5) on October 8, 1999, upon the
completion of the Offering, all of the convertible notes of the Issuer owned by
Motient converted into 11,182,926 shares of Class B Common Stock and as a result
of this conversion, as of October 8, 1999, Motient owned an aggregate of
17,872,176 shares of Class B Common Stock, (6) on October 8, 1999, Motient
acquired 200,000 shares of the Issuer's Class A Common Stock in the Offering, at
a purchase price of $12.00 per share, the initial public offering price of the
Class A Common Stock, and (7) on January 17, 2000, Motient transferred 1,314,914
shares of the Issuer's Class A Common Stock to Baron Asset Fund pursuant to the
terms of a note issued by Motient to Baron Asset Fund.
Based solely upon the information set forth in the Issuer's
Registration Statement, filed June 13, 2000, and in the Available Data, the
Reporting Persons believe that on August 8, 2000, Honda acquired 50,000 shares
of the Issuer's Series C Preferred Stock at a purchase price of $1,000 per
share.
Based solely upon the information set forth in the Issuer's
Registration Statement, filed June 13, 2000, and in the Available Data, the
Reporting Persons believe that: (1) on January 17, 2000, Baron Asset Fund
acquired 1,314,914 shares of the Issuer's Class A Common Stock from Motient
pursuant to the terms of a note issued by Motient to Baron Asset Fund, (2) on
August 8, 2000, Baron Asset Fund acquired 31,000 shares of the Issuer's Series C
Preferred Stock at a purchase price of $1,000 per share, (3) on August 8, 2000,
Baron iOpportunity Fund acquired 2,000 shares of the Issuer's Series C Preferred
Stock at a purchase price of $1,000 per share, and (4) on August 8, 2000, Baron
Capital Asset Fund acquired 2,000 shares of the Issuer's Series C Preferred
Stock at a purchase price of $1,000 per share.
The Reporting Persons do not know of any other person
having the right to receive or the power to direct the receipt of dividends
from, or the proceeds from the sale of, the shares of Class A Common Stock of
the Issuer beneficially owned by the Reporting Persons.
Item 6. Contracts Arrangements, Understandings or Relationships with Respect
--------------------------------------------------------------------
to Securities of the Issuer.
----------------------------
The summary descriptions contained in this Item 6 of the
Shareholders' Agreement and the Registration Rights Agreement are qualified in
their entirety by reference to the full text of the Shareholders' Agreement and
the Registration Rights Agreement which are incorporated by reference herein and
which were filed as Exhibits 10.1 and 10.2 to Amendment No. 1 to the
Registration Statement of the Issuer on Form S-1, No. 333-39176 filed with the
Securities and Exchange Commission.
Shareholders' Agreement
Set forth below is a description of certain material provisions of
the Shareholders' Agreement:
Governance Provisions. The Issuer's board of directors consists of
eleven members, one of whom is selected by Telcom, one of whom is selected by
General Motors or DIRECTV, one of whom is selected by Clear Channel, one of whom
is selected by the AEA XM Entities, five of whom are selected by Motient, and
two independent directors, one of whom must be approved by Motient, and one of
whom must be approved
<PAGE>
SCHEDULE 13D
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CUSIP No. 983759-10-1 Page 11 of 15
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by a majority of the other parties to the Shareholders' Agreement. Following
receipt of approval of the FCC to transfer control of the Issuer from Motient to
a diffuse group of shareholders, the Issuer's board of directors will consist of
ten members, one of whom will be selected by Telcom, one of whom will be
selected by General Motors or DIRECTV, one of whom will be selected by Clear
Channel, one of whom will be selected by the AEA XM Entities, three of whom will
be selected by Motient, two independent directors of recognized industry
experience and stature whose nominations must be approved by Motient and certain
of the other parties to the Shareholders' Agreement, and one of whom will be the
Issuer's President and Chief Executive Officer. The foregoing board rights are
subject to the parties to the Shareholders' Agreement maintaining their original
investment or certain minimum share percentages in the Issuer.
Conversion of Class B Common Stock to Class A Common Stock. The Class
B Common Stock owned by Motient is convertible into Class A Stock, on a
one-for-one basis, at any time at Motient's discretion. In addition, under the
Shareholders' Agreement, the holders of a majority of the outstanding shares of
Class A Common Stock, which must include at least 20% of the public holders of
the Class A Common Stock, may require conversion by Motient. This conversion
will not be effected, however, if the FCC does not approve the transfer of
control of the Issuer from Motient to a diffuse group of shareholders.
Non-Competition. Motient has agreed not to compete with the Issuer in
the satellite radio business in the United States for so long as Motient holds
5% of the Issuer's common stock and for a period of three years following any
transfer which results in Motient owning less than 5% of the Issuer's common
stock.
Registration Rights Agreement
In addition to the contracts and agreements described above and in
Item 4 above, the AEA XM Entities have certain registration rights with respect
to the Class A Common Stock, pursuant to an amended and restated registration
rights agreement, dated as of August 8, 2000 (the "Registration Rights
Agreement"), by and among the Issuer, the AEA XM Entities and certain other
stockholders named therein. Commencing July 7, 2000, certain stockholders that
are party to the Registration Rights Agreement are entitled to demand
registration with respect to their Class A Common Stock, including shares
issuable upon conversion of other securities. The Series C investors receive
their demand right beginning on August 9, 2000. These rights are subject to the
Issuer's right to defer the timing of a demand registration and an underwriters'
right to cut back shares in an underwritten offering. In addition to these
demand rights, following the Issuer's commencement of commercial operation,
parties to the Registration Rights Agreement holding, in the aggregate, the
shares of Class A Common Stock having a fair market value of not less than
$25,000,000, may request the Issuer to file a registration statement pursuant to
Rule 415. The Series C investors also have a right to demand registration upon a
change of control of the Company. Parties to the Registration Rights Agreement
also have rights to include their Class A Common Stock in registered offerings
initiated by the Issuer, other than an offering for high yield debt.
Other than the Shareholders' Agreement and the Registration Rights
Agreement, there are no contracts, arrangements, understandings, or
relationships between the Reporting Persons or, to the best of their knowledge,
any executive officer or director of any such entity, and any other person with
respect to any securities of the Issuer, including any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
securities of the Issuer, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
<PAGE>
SCHEDULE 13D
_____________________________ _____________________________
CUSIP No. 983759-10-1 Page 12 of 15
_____________________________ _____________________________
Item 7. Material to be Filed as Exhibits.
---------------------------------
Exhibit 1. Amended and Restated Shareholders' Agreement, dated as of
August 8, 2000, by and among XM Satellite Radio Holdings
Inc., Motient Corporation, Baron Asset Fund, Baron
iOpportunity Fund, Baron Capital Asset Fund, Clear Channel
Investments, Inc., Columbia XM Radio Partners, LLC,
Columbia Capital Equity Partners III (QP), L.P., Columbia
XM Satellite Partners III, LLC, DIRECTV Enterprises, Inc.,
General Motors Corporation, Madison Dearborn Capital
Partners III, L.P., Special Advisors Fund I, LLC, Madison
Dearborn Special Equity III, L.P., American Honda Motor
Co., Inc. and Telcom-XM Investors, L.L.C. (incorporated by
reference to the Issuer's to Exhibit 10.1 to Amendment No.
1 to the Issuer's Registration Statement on Form S-1 (File
No. 333-39176)).
Exhibit 2. Amended and Restated Registration Rights Agreement, dated
as of August 8, 2000, by and among XM Satellite Radio
Holdings Inc., Motient Corporation, Baron Asset Fund, Baron
iOpportunity Fund, Baron Capital Asset Fund, Clear Channel
Investments, Inc., Columbia XM Radio Partners, LLC,
Columbia Capital Equity Partners III (QP), L.P., Columbia
XM Satellite Partners III, LLC, DIRECTV Enterprises, Inc.,
General Motors Corporation, Madison Dearborn Capital
Partners III, L.P., Special Advisors Fund I, LLC, Madison
Dearborn Special Equity III, L.P., American Honda Motor
Co., Inc. and Telcom-XM Investors, L.L.C. (incorporated by
reference to the Issuer's to Exhibit 10.2 to Amendment No.
1 to the Issuer's Registration Statement on Form S-1 (File
No. 333-39176)).
Exhibit 3. Joint Filing Agreement, dated as of August 18, 2000.
<PAGE>
SCHEDULE 13D
_____________________________ _____________________________
CUSIP No. 983759-10-1 Page 13 of 15
_____________________________ _____________________________
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: August 18, 2000
AEA XM INVESTORS INC.
By: /s/Christine J. Smith
-----------------------------
Name: Christine J. Smith
Title: Vice President
AEA XM INVESTORS I LLC
By: XM INVESTORS I LP, its managing
member
By: AEA XM INVESTORS INC., its general
partner
By: /s/Christine J. Smith
-----------------------------
Name: Christine J. Smith
Title: Vice President
AEA XM INVESTORS II LLC
By: XM INVESTORS II LP, its managing
member
By: AEA XM INVESTORS INC., its general
partner
By: /s/Christine J. Smith
-----------------------------
Name: Christine J. Smith
Title: Vice President
<PAGE>
SCHEDULE 13D
_____________________________ _____________________________
CUSIP No. 983759-10-1 Page 14 of 15
_____________________________ _____________________________
Schedule I
----------
AEA XM INVESTORS INC.
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Name Present Principal Occupation
---- ----------------------------
<S> <C>
Pierce J. Roberts, Jr., Chairman of the Board Managing Director of AEA Investors,
Inc., a private equity firm
Scott A. Dahnke, President Managing Director of AEA Investors Inc.
Christopher P. Mahan, Vice President, Assistant Secretary Principal of AEA Investors Inc.
and Treasurer
Christine J. Smith, Vice President, Secretary and General Counsel of AEA Investors Inc.
Assistant Treasurer
</TABLE>
<PAGE>
SCHEDULE 13D
_____________________________ _____________________________
CUSIP No. 983759-10-1 Page 15 of 15
_____________________________ _____________________________
Exhibit 3
---------
Joint Filing Agreement
----------------------
In accordance with Rule 13d-1(k) promulgated under the Securities
Exchange Act of 1934, the undersigned agree to the joint filing of a Statement
on Schedule 13D (including any and all amendments thereto) with respect to the
shares of Class A Common Stock, $0.01 par value, of XM Satellite Radio Holdings
Inc., and further agree that this Joint Filing Agreement be included as an
Exhibit thereto. In addition, each party to this Agreement expressly authorizes
each other party to this Agreement to file on its behalf any and all amendments
to such Statement.
Dated: August 18, 2000
AEA XM INVESTORS INC.
By: /s/Christine J. Smith
-----------------------------
Name: Christine J. Smith
Title: Vice President
AEA XM INVESTORS I LLC
By: XM INVESTORS I LP, its managing
member
By: AEA XM INVESTORS INC., its general
partner
By: /s/Christine J. Smith
-----------------------------
Name: Christine J. Smith
Title: Vice President
AEA XM INVESTORS II LLC
By: XM INVESTORS II LP, its managing
member
By: AEA XM INVESTORS INC., its general
partner
By: /s/Christine J. Smith
-----------------------------
Name: Christine J. Smith
Title: Vice President
