SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 TO FORM 10-K
ON
FORM 10-K405/A
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended December 31, 1999
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
__ EXCHANGE ACT OF 1934
Commission file number 1-10726
------------------------------
WINSTAR COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3585278
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
685 Third Avenue
New York, New York 10017
(212) 792-9800
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
Rights to Purchase Series B Preferred Stock
The registrant hereby amends items 10, 11, 12 and 13 of its Annual Report
on Form 10-K for the year ended December 31, 1999 as set forth in the pages
attached hereto.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Directors and Executive Officers
William J. Rouhana, Jr., 47, has been a director of Winstar since its
inception, its chairman of the board since February 1991, and its chief
executive officer since May 1994. Mr. Rouhana was president and chief executive
officer of Winstar Companies, Inc., a merchant banking firm which focused on
media and telecommunications investments, and its affiliates from 1983 until
November 1995. Through Winstar Companies, he served, from August 1987 to
February 1989, as vice chairman of the board and chief operating officer of
Management Company Entertainment Group, Inc., a diversified distributor of
entertainment products, and thereafter as its Vice Chairman of the board until
May 1990. Mr. Rouhana was in private legal practice from 1977 to 1984,
specializing in the financing of entities involved in the development of
entertainment products and information services. Mr. Rouhana is a former vice
chairman of the board of governors of the United Nations Association and is a
member of the board of directors of Business Executives for National Security.
He also co-founded and is co-chairman of the Humpty Dumpty Institute and a
member of the board of trustees of Colby College. He is a Phi Beta Kappa
graduate of Colby College, a Thomas J. Watson Fellow (1972-1973) and a graduate
of Georgetown University School of Law.
Nathan Kantor, 57, has been a director of Winstar since October 1994 and
president and chief operating officer of Winstar since September 1995. From 1991
to September 1995, Mr. Kantor was president of ITC Group, Inc., a company that
specialized in the development of emerging competitive telecommunications
companies. Through ITC, Mr. Kantor coordinated all of Winstar's communications
operations from June 1994 to September 1995. From January 1985 to December 1990,
he was president of MCI Telecommunications Corporation (Northeast Division). Mr.
Kantor was a founder of MCI International, Inc., and served as its president and
chief operating officer from its founding in July 1982 to December 1984. From
1972 to 1982, Mr. Kantor held a number of senior management positions with MCI
Communications, including vice president of National Operations. Mr. Kantor also
is currently the chairman of the board and chief executive officer of Image
Telecommunications Corp., a company involved in the development of information
and video servers. Mr. Kantor is a graduate of Florida State University and the
United States Military Academy at West Point.
Timothy R. Graham, 50, has served as executive vice president, general
counsel and secretary of Winstar since October 1994 and has been a director of
Winstar since January 1999. Prior to 1994, Mr. Graham was engaged in the
practice of law, specializing in corporate finance, regulatory and business law.
Mr. Graham is a member of the board of advisors of the Instructional Television
Station of the Archdiocese of New York and a director of the American
Electronics Association. Mr. Graham is a graduate of Fordham Law School and the
Georgetown University School of Foreign Service.
James I. Cash, 52, has been a director of Winstar since January 1997.
Professor Cash has been a member of the faculty of Harvard Business School since
1976, having taught in its Masters of Business Administration, Management
Development, Global Leadership and Advanced Management programs. Professor Cash
currently serves as a trustee for Massachusetts General Hospital and Partners
Healthcare, overseer for the Boston Museum of Science, and is a member of the
board of directors of Cambridge Technology Partners, The Chubb Corporation,
General Electric Company, Knight-Ridder, Inc. and State Street Bank and Trust
Company. Professor Cash has authored numerous articles and several books on
topics related to information technology and corporate management and structure.
Professor Cash is a graduate of Texas Christian University, Purdue University's
Graduate School of Mathematical Sciences and Purdue University's Krannert
Graduate School of Management.
Steven B. Magyar, 51, has been a director of Winstar since June 1993. Since
May 1994, Mr. Magyar has owned and operated a private business which specializes
in financial services for high net worth individuals and business owners. From
1989 to May 1994, Mr. Magyar was a regional vice president of CIGNA Insurance
2
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Co. and during the preceding fifteen years held various sales and sales
management positions with CIGNA. Mr. Magyar has served on CIGNA's strategic
business development committee and has been a guest lecturer at New York
University. Mr. Magyar also is a certified life underwriter and chartered
financial consultant with the American College of Insurance. Mr. Magyar is a
member of the National Association of Underwriters and the American Society of
CLU and ChFC. Mr. Magyar is a graduate of Colby College.
Hartley R. Rogers, 40, has been a director of Winstar since February 2000.
Mr. Rogers has been managing director and co-head of Credit Suisse First Boston
Equity Partners, L.P., a $2.75 billion private equity fund based in New York
City, since its inception in 1998. Prior to that time, Mr. Rogers was managing
director and head of the private investment department at Morgan Stanley Dean
Witter & Co. where he managed the Princes Gate Investors private equity funds
and the Morgan Stanley Bridge Fund, LLC, a high-yield bridge lending entity.
Prior to that time, Mr. Rogers was president of J.G. Fogg & Co. Incorporated, a
venture capital firm, and an investment banker at Morgan Stanley & Co.
Incorporated. He received an A.B. from Harvard College and an M.B.A. from the
Harvard Business School.
Lawrence B. Sorrel, 41, has been a director of Winstar since February 2000.
Mr. Sorrel has been a general partner at Welsh, Carson, Anderson & Stowe VIII,
L.P., a New York City-based private equity investment firm, since joining that
firm in 1998. For the previous twelve years, he worked in the private equity
business at Morgan Stanley Dean Witter & Co. where he was a managing director
and one of the senior executives responsible for the firm's private equity
investment activities. He is chairman of the board of directors of SpectraSite
Holdings, and a member of the board of directors of Emmis Communications, Valor
Telecommunications, Westminster Healthcare, and Select Medical Corporation. He
holds a B.A. from Brown University and J.D. and M.B.A. degrees from Harvard
University.
William J. vanden Heuvel, 70, has been a director of Winstar since June
1995. Since 1984, he has served as senior advisor to Allen & Co., an investment
banking firm, as well as counsel to the law firm Stroock & Stroock & Lavan. He
served as a director of Time Warner from 1981 to 1993 and currently is a
director of Zemex Corp., a New York Stock Exchange listed company engaged in the
mining and exploitation of industrial minerals. Ambassador vanden Heuvel also
has been a member of the IRC Group, a Washington D.C.-based consulting group
made up of former United States ambassadors, since 1981. From 1979 to 1981,
Ambassador vanden Heuvel served as United States Deputy Permanent Representative
to the United Nations. From 1977 to 1979, he served as United States Ambassador
to the European Office of the United Nations and various other international
organizations. He was Special Assistant to United States Attorney General Robert
F. Kennedy from 1961 to 1964. Ambassador vanden Heuvel is a graduate of Deep
Springs College, Cornell University and Cornell Law School. He is chairman of
the Franklin and Eleanor Roosevelt Institute and chairman of the Council of
American Ambassadors and vice chair of the World Federation of the United
Nations Associations.
Bert Wasserman, 67, has been a director of Winstar since June 1995. Mr.
Wasserman served as executive vice president and chief financial officer of Time
Warner, Inc. from 1990 until his retirement in 1995 and served on the board of
directors of Time Warner, Inc. and its predecessor company, Warner
Communications, Inc. from 1981 to 1995. He joined Warner Communications, Inc. in
1966 and had been an officer of that company since 1970. Mr. Wasserman is
director of several investment companies in the Dreyfus Family of Funds. He is a
director of Malibu Entertainment, Inc., Lillian Vernon Corporation and PSC Inc.
He is a graduate of Baruch College and Brooklyn Law School.
Richard J. Uhl, 59, has been the president and chief operating officer of
Winstar for Buildings since joining Winstar in December 1997. In November, 1999,
Mr. Uhl was also appointed group executive and chief financial officer. Before
joining Winstar, Mr. Uhl was a member of the board of directors of Frontier
Corporation, a position he assumed when ALC Communications Corporation merged
with Frontier Corporation in 1995. Mr. Uhl previously served on ALC's board for
four years, and was vice president, controller and treasurer of MCI
Communications Corporation for seven years. Mr. Uhl served as president and
board member of Chicago Holdings, Inc., a privately owned investment banking
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<PAGE>
firm, for 12 years. Mr. Uhl holds a masters degree from the New York University
Graduate School of Business Administration and a bachelor's degree from
Muhlenberg College.
Director Compensation
We pay each outside director $500 for his attendance at each meeting of a
board committee of which he is a member and $1,000 for his attendance at each
meeting of our board as well as annual compensation in an amount of $10,000. In
addition, on January 13th of each year during the term of our 1992 performance
equity plan, assuming there are enough shares then available for grant under
this plan, we award each person who is then a member of our board stock options
to purchase 15,000 shares of our common stock with an exercise price equal to
the market price of our common stock at that time (as determined in accordance
with the 1992 plan). These options are immediately exercisable as of the date of
grant and have a term of ten years.
Compliance with Exchange Act Section 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers and persons who beneficially own more than ten percent of
our common stock to file with the SEC initial reports of ownership and reports
of changes in ownership of common stock. Executive officers, directors and
greater-than-ten percent stockholders are required by SEC regulations to furnish
Winstar with copies of all such reports they file. To Winstar's knowledge, based
solely on review of the copies of such reports furnished to Winstar and written
representations that no other reports were required during the year ended
December 31, 1999, all filings under Section 16(a) were made as required.
Item 11. Executive Compensation
The following table shows the compensation for the years ended December 31,
1999, 1998 and 1997 earned by (i) William J. Rouhana, Jr., our chairman and
chief executive officer, (ii) Nathan Kantor, Timothy R. Graham and Richard J.
Uhl, our other executive officers and (iii) Charles T. Dickson, our former
executive vice president and chief financial officer who resigned in October
1999 (all of these executive officers are referred to collectively as the "named
executive officers").
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
Annual Compensation Long Term Compensation
------------------------------------- ------------------------------------
Restricted
Other Annual Stock Awards Securities
Name and principal Year Salary ($) Bonus Compensation ($) ($) Underlying Options
position ($)(1) (#)
---------------------------- ---- ----------- --------- -------------- ------------ --------------------
<S> <C> <C> <C> <C> <C> <C>
William J. Rouhana, Jr. 1999 537,002 858,587 67,543 (2) - 165,000 (1) (4)
Chairman of the board and 1998 554,387 750,000 - - 1,365,000 (3)(4)
chief executive officer 1997 483,658 500,000 - - 15,000 (4)
Nathan Kantor 1999 524,363 645,000 - - 115,000 (1)(4)
President and chief operating 1998 519,237 625,000 - - 765,000 (3)(4)
officer 1997 448,085 450,000 - - 15,000 (4)
Timothy R. Graham 1999 316,820 300,000 - 312,900 200,000 (1)(4)
Executive vice president, 1998 284,416 220,000 - - 121,500 (1)
general counsel and secretary 1997 225,000 225,000 - - -0-
Richard J. Uhl 1999 332,043 300,000 - 74,000 602,500 (1)
Group executive and chief 1998 311,526 190,000 - - 75,000(1)
financial officer 1997 11,538 30,000 - - 337,500 (5)
Charles T. Dickson 1999 306,455 -0- - - -
Former executive vice president 1998 321,921 150,000 - - 1,500
and chief financial officer (6) 1997 11,923 30,000 - - 375,000(5)
</TABLE>
-----------------------------
(1) Represents or includes bonuses paid or stock options granted as
compensation for the year indicated, the payment or grant of which was made
in the subsequent calendar year.
(2) Includes company paid insurance premiums, aircraft usage ($55,439) and the
company matching contribution under its 401(k) plan, payable in Winstar
common stock.
(3) Includes options to purchase shares of common stock granted pursuant to the
terms of the executive's employment agreement entered into in such year.
See "Employment Agreements."
(4) Includes or represents options to purchase 15,000 shares of common stock
granted annually to directors of Winstar under the 1992 plan.
(5) Granted in connection with the commencement of the named executive's
employment with Winstar.
(6) Mr. Dickson resigned as executive vice president and chief financial
officer of Winstar in October 1999.
Except where indicated, Winstar cannot determine, without unreasonable
effort or expense, the specific amount of certain personal benefits afforded to
its employees, or the extent to which benefits are personal rather than
business. Winstar has concluded that the aggregate amounts of such personal
benefits which cannot be specifically or precisely ascertained do not in any
event exceed, as to each individual named in the preceding table, the lesser of
$50,000 or 10% of the compensation reported in the preceding table for such
individual, and that such information set forth in the preceding table is not
rendered materially misleading by virtue of the omission of the value of such
personal benefits.
5
<PAGE>
OPTION GRANTS IN 1999
The following table sets forth certain information concerning
individual grants of stock options during 1999 to each of the named executive
officers.
<TABLE>
Potential Realizable
Value At Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term
-----------------------------------------------------------------------------------------------------------------------
Percent of
Number of Total Options
Securities Granted to
Underlying Employees in Exercise or
Options Fiscal Year Base Price Expiration
Name Granted (#) (%) ($) Date 5% ($) 10% ($)
-------- ---------- ------------ ------------ ----------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
William J. Rouhana, Jr. 15,000 .1310 27.1667 1/13/09 256,274 649,450
Chairman of the board and
chief executive officer
Nathan Kantor
President and chief 15,000 .1310 27.1667 1/13/09 256,274 649,450
operating officer
Timothy R. Graham 15,000 .1310 27.1667 1/13/09 256,274 649,450
Executive vice president, 120,000 1.0477 28.0000 (2) 606,688 1,883,827
general counsel and 150,000 1.3097 41.3330 (3) 2,108,591 4,783,674
secretary (5) ------- ------ --------- ---------
285,000 2.4884 2,971,554 7,316,952
Richard J. Uhl 75,000 .6548 28.0000 (2) 379,180 1,177,392
Group executive and chief 225,000 1.9645 41.3333 (3) 3,162,886 7,175,511
financial officer(5) 337,500 2.9467 24.6667 (4) 2,300,047 5,082,502
------- ------ --------- ---------
637,500 5.5661 5,842,114 13,435,406
Charles T. Dickson
Former executive vice -0- -0- N/A N/A N/A N/A
president and chief
financial officer(1)
</TABLE>
------------------
(1) Mr. Dickson resigned as executive vice president and chief financial
officer of Winstar in October 1999.
(2) These options vest in equal annual installments over five years and expire
five years after vesting.
(3) These options vest in varying installments over ten years and expire five
years after vesting.
(4) These options vest in equal annual installments over three years and expire
five years after vesting.
(5) The grants reflected in this table do not include grants of 3,000 shares of
common stock and 1,800 shares of common stock, respectively, to Messrs. Uhl
and Graham made under our 1995 plan in October 1999. They also do not
reflect a grant of 7,200 shares of restricted common stock to Mr. Graham
made under our 1995 plan in December 1999, which shares vest in equal
annual installments of 1,800 shares on each of the first through fourth
anniversaries of the date of grant.
6
<PAGE>
AGGREGATED OPTION EXERCISES IN 1999 AND
FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning exercises of
stock options during 1999 by each of the named executive officers and the fiscal
year-end value of unexercised options held by such persons.
<TABLE>
Shares Value Number of Securities Value of Unexercised
Acquired Realized Underlying Unexercised In-The-Money Options at
on ($'s in Options At Fiscal Year-End (1)
Exercise thousands) Fiscal Year-End (#) ($'s in thousands)
Name (#)
----------------- ----------- ------------ ---------------------------- --------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
William J. Rouhana, Jr. - - 2,070,000 525,000 74,631 12,081
Chairman of the board and
chief executive officer
Nathan Kantor 450,000 9,042 1,727,674 280,374 63,849 6,246
President and chief operating
officer
Timothy R. Graham - - 120,300 293,700 4,709 4,611
Executive vice president,
general counsel and secretary
Richard J. Uhl 45,000 1,124 90,000 840,000 3,203 18,665
Group executive and chief
financial officer
Charles T. Dickson 75,000 975 75,300 -0- 2,829 -0-
Former executive vice
president and chief financial
officer (2)
</TABLE>
------------------------
(1) Represents the difference between the aggregate market value at December
30, 1999 of the common stock underlying the options, based on a last sale
price of $48.9167 on that date, and the options' aggregate exercise prices.
(2) Mr. Dickson resigned as executive vice president and chief financial
officer of Winstar in October 1999.
Employment Agreements
In January 1998, Mr. Rouhana and Winstar entered into a three-year
employment agreement, effective March 1, 1998, pursuant to which Mr. Rouhana
continues to serve as Winstar's chairman of the board and chief executive
officer. The employment agreement provides for a minimum annual base salary of
$537,500, with annual increases as agreed upon by Winstar and Mr. Rouhana. The
employment agreement also provides that Mr. Rouhana is eligible for an annual
cash bonus, payable at the discretion of the board, not to exceed 150% of his
base salary then in effect. At the time of execution of this employment
agreement, Mr. Rouhana was granted: (i) immediately exercisable options to
purchase 450,000 shares of common stock for $17.33 per share, the closing sale
price of the common stock on the day immediately preceding the agreement date;
(ii) options to purchase 450,000 shares of common stock which vested on January
6, 1999, of which 150,000 are exercisable at a price of $17.33 per share and
7
<PAGE>
300,000 are exercisable at a price of $26 per share; and (iii) options to
purchase 450,000 shares of common stock which vested on January 6, 2000, of
which 150,000 are exercisable at a price of $17.33 per share and 300,000 are
exercisable at a price of $34.67 per share.
In September 1998, Mr. Kantor entered into a three-year employment
agreement with Winstar. The employment agreement provides for a minimum annual
base salary of $518,350, with annual increases as agreed upon by Winstar and Mr.
Kantor. The employment agreement also provides that Mr. Kantor is eligible for
an annual cash bonus, payable at the discretion of the chief executive officer
and the board, not to exceed 125% of his base salary then in effect. At the time
of execution of this employment agreement, Mr. Kantor was granted: (i)
immediately exercisable options to purchase 250,000 shares of common stock for
$17.33 per share, which is greater than the $14.33 closing sale price of the
common stock on the business day immediately preceding the agreement date; (ii)
options to purchase 250,376 shares of common stock which vested on September 6,
1999, of which 83,709 are exercisable at a price of $17.33 per share and 166,667
are exercisable at a price of $26 per share; and (iii) options to purchase
166,667 shares of common stock which vest on September 6, 2000, of which 83,709
are exercisable at a price of $17.33 per share and 166,665 are exercisable at a
price of $34.67 per share.
In April 1997, Winstar entered into Executive Severance Agreements (each a
"Severance Agreement") with each of the named executive officers and certain
other senior officers of Winstar and its subsidiaries. The Severance Agreement
generally provides that, if during the two years following a Change of Control
or potential Change of Control of Winstar (each as defined in the Severance
Agreement), either (A) the covered executive's employment is terminated by
Winstar (other than due to the executive's death or Disability or for Cause, as
defined in the Severance Agreement) or (B) the covered executive terminates his
or her employment with Winstar for Good Reason (as defined in the Severance
Agreement), then such executive will be entitled to receive certain severance
benefits, including a cash severance payment equal to one and one-half times the
aggregate of (i) such executive's annual base salary then in effect plus (ii)
such executive's average full-year bonus over the prior two years. Additional
benefits to which a covered executive would be entitled include continued
medical and other insurance benefits for one and one-half years following
termination and career outplacement services.
As defined in the Severance Agreement, "Change of Control of Winstar"
generally means that a third party has acquired 35% or more of Winstar's voting
stock (whether through a stock purchase, exchange, tender offer or merger) or
substantially all of Winstar's assets. A "potential Change of Control" of
Winstar would occur if: (w) an agreement is entered into, the consummation of
which would result in a Change of Control; (x) a third party makes a public
announcement of an intention to take action that, if consummated, would result
in a Change of Control of Winstar; (y) Winstar's Stockholder Rights Plan is
triggered; or (z) the board makes a good faith determination that a potential
Change of Control has occurred. The Severance Agreement has an initial term of
three years and renews automatically for successive one-year terms unless
Winstar notifies the covered executive within six months prior to the end of the
then current term that the Severance Agreement will terminate at the end of such
term.
Compensation Committee Interlocks and Insider Participation
The compensation committee is composed of Mr. Magyar, Mr. vanden Heuvel,
Professor Cash and Mr. Sorrel. No executive officer of Winstar sits on the
compensation committee of another entity, one of whose executive officers serves
as a director of Winstar or on Winstar's board, nor does any executive officer
of Winstar serve as a director of another entity, one of whose executive
officers serves on Winstar's board.
8
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
The table and accompanying footnotes on the following pages set forth
certain information as of May 12, 2000 with respect to the ownership of our
common stock by: (i) those persons or groups who beneficially own more than 5%
of our common stock, (ii) each of our directors and named executive officers and
(iii) all of our directors and executive officers as a group (in each case,
based upon information furnished by such persons). Our outstanding Series A and
Series G preferred stock is convertible into and votes as a single class with
our common stock. Shares of common stock issuable upon (A) exercise of options
which are currently exercisable or exercisable within 60 days of the date of
this Report and (B) conversion of the Series A and Series G preferred stock have
been included in the following table with respect to the beneficial ownership of
the person owning such options or preferred stock, but not with respect to any
other persons listed below.
<TABLE>
Number of Shares Percent
Name and Address of Beneficial Owner Beneficially Owned Beneficially Owned (%)
------------------------------------ --------------------- ---------------------
<S> <C> <C>
William J. Rouhana, Jr. (1) 3,756,465 (2) 4.1
Nathan Kantor (1) 1,782,636 (3) 2.0
Timothy R. Graham (1) 585,378 (4) *
Richard J. Uhl (1) 111,000 (5) *
Steven B. Magyar 127,280 (6) *
Two Pine Point
Lloyd Harbor, New York 11742
William J. vanden Heuvel 111,000(7) *
812 Park Avenue
New York, New York 10021
Bert Wasserman 150,000(8) *
126 East 56th Street
New York, New York 10022
James I. Cash 45,000(9) *
Harvard University
Graduate School of Business Administration
Baker Library 187, Soldiers Field Road
Boston, Massachusetts 02163
Hartley R. Rogers 8,906,477(10) 9.1
c/o Credit Suisse First Boston
11 Madison Avenue
New York, NY 10010
Lawrence B. Sorrel 5,275,378(11) 5.6
c/o Welsh, Carson, Anderson & Stowe VIII, L.P.
320 Park Avenue, Suite 2500
New York, New York 10022
Janus Capital Corporation 8,743,298(12) 9.8
100 Fillmore Street
Denver, Colorado 80206-4923
</TABLE>
9
<PAGE>
<TABLE>
Number of Shares Percent
Name and Address of Beneficial Owner Beneficially Owned Beneficially Owned (%)
------------------------------------ --------------------- ---------------------
<S> <C> <C>
Credit Suisse First Boston Equity Partners, 8,906,477(13) 9.1
L.P.
11 Madison Avenue
New York, NY 10010
FMR Corp. 8,222,507(14) 9.2
82 Devonshire Drive
Boston, MA 02019
GBU Inc. 7,842,518(15) 8.8
GEM Capital Management, Inc.
Gerald B. Unterman
70 East 55th Street
New York, NY 10022
Putnam Investments, Inc. 5,992,706(16) 6.7
One Post Office Square
Boston, Massachusetts 02109
Welsh, Carson, Anderson & Stowe VIII, L.P. 5,292,045(17) 5.6
320 Park Avenue, Suite 2500
New York, New York
All directors and executive 20,850,614(18) 19.2
officers as a group (10 persons)
</TABLE>
------------------
* Less than 1%.
(1) The address of this person is c/o Winstar Communications, Inc., 685 Third
Avenue, New York, New York 10017.
(2) Includes (i) 2,347,500 shares of common stock issuable upon exercise of
certain options and (ii) 193,125 shares of common stock issuable upon
exercise of certain options owned by Mr. Rouhana's spouse, as to which Mr.
Rouhana disclaims beneficial ownership. Does not include 187,500 shares of
common stock issuable upon exercise of options which do not become
exercisable within 60 days of the date of this Report. Mr. Rouhana has
agreed that, during the term of Nathan Kantor's employment agreement with
Winstar, he would vote all shares of common stock he controls in favor of
Mr. Kantor as a director of Winstar.
(3) Includes 1,757,674 shares of common stock issuable upon exercise of certain
options. Does not include 365,374 shares of common stock issuable upon
exercise of options which do not become exercisable within 60 days of the
date of this Report.
(4) Includes 166,800 shares of common stock issuable upon exercise of certain
options. Does not include 297,200 shares of common stock issuable upon
exercise of options which do not become exercisable and 7,200 shares of
common stock under a restricted stock award which do not vest within 60
days of the date of this Report.
10
<PAGE>
(5) Includes 105,000 shares of common stock issuable upon exercise of certain
options. Does not include 865,000 shares of common stock issuable upon
exercise of options which do not become exercisable within 60 days of the
date of this Report.
(6) Includes (i) 1,500 shares of common stock owned by Mr. Magyar's spouse, as
to which Mr. Magyar disclaims beneficial ownership, (ii) 3,786 shares of
common stock owned by benefit plans of which Mr. Magyar is the sole trustee
and primary beneficiary and (iii) 105,000 shares of common stock issuable
upon exercise of certain options.
(7) Includes 105,000 shares of common stock issuable upon exercise of certain
options. Also includes 750 shares of common stock owned by Mr. vanden
Heuvel's spouse, as to which Mr. vanden Heuvel disclaims beneficial
ownership.
(8) Includes 135,000 shares of common stock issuable upon exercise of certain
options.
(9) Includes 45,000 shares of common stock issuable upon exercise of certain
options.
(10) Represents shares of common stock issuable upon conversion of the Series G
preferred stock beneficially owned by Credit Suisse First Boston Equity
Partners, L.P., of which Mr. Rogers is a Managing Director, and certain
affiliated parties. Mr. Rogers disclaims beneficial ownership of these
shares.
(11) Includes 5,269,822 shares of common stock issuable upon conversion of the
Series G preferred stock beneficially owned by Welsh, Carson, Anderson &
Stowe VIII, L.P., of which Mr. Sorrel is a General Partner, and certain
affiliates (collectively, "Welsh, Carson"). Mr. Sorrel disclaims beneficial
ownership of the shares of common stock owned directly by Welsh, Carson and
its affiliates. Information with respect to this stockholder was derived
from its Schedule 13D, as filed with the SEC on February 2000.
(12) Represents shares of common stock beneficially owned by Janus Capital
Corporation ("Janus Capital") and certain affiliated investment companies
for which it is a registered investment adviser. As a result of its role as
investment adviser or sub-adviser to these investment companies, Janus
Capital may be deemed to be the beneficial owner of the shares of common
stock held by such companies. However, Janus Capital does not have the
right to receive any dividends from, or the proceeds from the sale of, the
securities held by such companies and disclaims any ownership associated
with such rights. Information with respect to this stockholder was derived
from its Schedule 13G, as filed with the SEC in January 2000.
(13) Represents shares of common stock issuable upon conversion of Series G
preferred stock beneficially owned by Credit Suisse First Boston Equity
Partners, L.P. and certain affiliates. Information with respect to this
stockholder was derived from its Schedule 13D, as filed with the SEC in
February 2000.
(14) Represents shares of our common stock beneficially owned by FMR Corp, the
parent holding company of, among others, Fidelity Management & Research
Company ("Fidelity Management"). FMR Corp is a registered investment
adviser which acts as investment adviser to various registered investment
companies within the Fidelity family of investment funds. Information with
respect to this stockholder was derived from its Schedule 13G, as amended,
as filed with the SEC in February 2000.
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(15) Represents shares or our common stock beneficially owned by GBU Inc. and
GEM Capital Management, Inc. Each of GBU and GEM is a registered investment
adviser which acts as investment adviser to various funds and managed
accounts. Gerald B. Unterman is the President, a director and principal
stockholder of GBU and GEM Capital. Mr. Unterman, GBU and GEM Capital are
deemed to beneficially own shares of common stock held by those funds and
managed accounts over which they exercise control. Information with respect
to these stockholders was derived from their Schedule 13G, as amended, as
filed with the SEC in February 2000.
(16) Represents shares of common stock beneficially owned by Putnam Investments,
Inc. and certain affiliates. Information with respect to this stockholder
was derived from its Schedule 13G, as filed with the SEC in February 2000.
(17) Represents shares issuable upon conversion of Series G preferred stock
beneficially owned by Welsh, Carson, including 22,223 shares issuable upon
conversion of Series G preferred stock beneficially owned by WCAS
Information Partners, LLP. Information with respect to this stockholder was
derived from its Schedule 13D, as filed with the SEC on February 2000.
(18) Includes shares referred to as being included in notes (2) through (11).
Excludes shares referred to in such notes as being excluded.
Item 13. Certain Relationships and Related Transactions
Winstar leases office space located in Westport, Connecticut from KKJ
Properties, LLC, an entity controlled by Nathan Kantor, president and chief
operating officer of Winstar. This is a month-to-month lease under which Winstar
pays monthly rent of $6,600, which Winstar believes to be a fair market rate.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 30th day of May, 2000.
WINSTAR COMMUNICATIONS, INC.
By:/s/ Joseph P. Dwyer
------------------------------
Joseph P. Dwyer
Senior Vice President - Finance and
Principal Accounting Officer
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