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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
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[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Teligent, Inc.
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(Name of Registrant as Specified in Its Charter)
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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[TELIGENT LOGO]
April 30, 1999
Dear Fellow Shareholder:
On behalf of the Board of Directors and management of Teligent, Inc., we
cordially invite you to attend the first annual meeting of shareholders of
Teligent. The meeting will be held at 10:00 a.m. eastern standard time, on June
16, 1999, at the Sheraton Premiere located at 8661 Leesburg Pike, Vienna,
Virginia. For most of you, the annual meeting will be your first opportunity to
meet with Teligent's management team. At the annual meeting, we will report to
you on the Company's 1998 financial and operating performance.
As you know, an important aspect of the annual meeting process is the
shareholder vote on corporate business items. I urge you to exercise your rights
as a shareholder to vote and participate in this process.
Whether or not you plan to attend the annual meeting, PLEASE READ THE
ENCLOSED PROXY STATEMENT AND THEN COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT IN THE ACCOMPANYING POSTPAID RETURN ENVELOPE PROVIDED AS PROMPTLY AS
POSSIBLE. This will save the company additional expense in soliciting proxies
and will ensure that your shares are represented at the meeting.
Your Board of Directors and management are committed to the success of
Teligent and the enhancement of your investment. As Chairman of the Board of
Directors and Chief Executive Officer, I want to express my appreciation for
your confidence and support.
Very truly yours,
ALEX J. MANDL
Chairman of the Board and CEO
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TELIGENT, INC.
8065 Leesburg Pike, Suite 400
Vienna, Virginia 22182
(703) 762-5100
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 16, 1999
To Our Shareholders:
The 1999 Annual Meeting of Shareholders of Teligent, Inc. will be held at
the Sheraton Premiere, 8661 Leesburg Pike, Vienna, Virginia, on June 16, 1999,
at 10:00 a.m. eastern standard time, for the purpose of considering and acting
upon the:
1. Election of the Board of Directors of Teligent;
2. Approval of an amendment to the Teligent, Inc. 1997 Stock Incentive Plan
to increase the number of shares of Class A common stock reserved for
issuance thereunder by 4,000,000 shares;
3. Adoption of the Teligent, Inc. 1999 Employee Stock Purchase Plan to
allow Teligent employees to invest in shares of Class A common stock;
4. Ratification of the appointment of Ernst & Young LLP as independent
auditors for Teligent for the year ending December 31, 1999; and
such other matters as may properly come before the annual meeting, or any
adjournments thereof. The Board of Directors is not aware of any other business
scheduled for the annual meeting. Any action may be taken on the foregoing
proposals at the annual meeting on the date specified above, or on any date or
dates to which the annual meeting may be adjourned.
Shareholders of record at the close of business on April 23, 1999, are the
shareholders entitled to vote at the annual meeting, and any adjournments
thereof. A complete list of shareholders entitled to vote at the meeting will be
available for inspection by shareholders at the executive offices of Teligent
during the ten days prior to the meeting as well as at the meeting.
Your vote is very important. Please sign and date the enclosed proxy, and
return it promptly in the enclosed envelope to ensure your representation at the
annual meeting. The proxy will not be used if you attend and vote at the meeting
in person.
BY ORDER OF THE BOARD OF DIRECTORS,
SCOTT G. BRUCE
Corporate Secretary
Vienna, Virginia
April 30, 1999
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE TELIGENT THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE ANNUAL MEETING. A
PRE-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED WITHIN THE UNITED STATES.
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TELIGENT, INC.
8065 Leesburg Pike, Suite 400
Vienna, Virginia 22182
(703) 762-5100
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 16, 1999
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This proxy statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Teligent, Inc. ("Teligent" or the "Company")
of proxies to be used at the annual meeting of shareholders of Teligent, to be
held at the Sheraton Premiere, 8661 Leesburg Pike, Vienna, Virginia, on June 16,
1999 at 10:00 a.m. eastern standard time, and all adjournments of the meeting.
The accompanying Notice of Meeting and this proxy statement are first being
mailed to shareholders on or about April 30, 1999. A copy of the Company's 1998
Annual Report also accompanies these materials.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the annual meeting, shareholders are being asked to consider and vote
upon the matters outlined in the accompanying Notice of Meeting, including the
election of directors of Teligent, the approval of an amendment to the 1997
Stock Incentive Plan to increase the number of shares of Class A common stock
reserved for issuance thereunder by 4,000,000 shares, the adoption of the 1999
Employee Stock Purchase Plan to allow employees to invest in shares of Class A
common stock, and the ratification of the appointment of Ernst & Young LLP as
independent auditors for Teligent for the year ending December 31, 1999.
WHO IS ENTITLED TO VOTE?
Teligent's common stock is comprised of Class A common stock and Class B
common stock. The Class B common stock consists of Series B-1, Series B-2 and
Series B-3 common stock. Each share of Class B common stock is convertible at
any time, at the option of the registered holder, into one share of Class A
common stock. The Class A common stock, together with the Class B common stock,
are referred to in this proxy statement as the "Common Stock."
The rights of holders of Common Stock are substantially identical, except
that until the number of shares held by holders of the respective series of
Class B common stock fall below certain ownership thresholds, these holders will
have the right to elect directors to Teligent's Board of Directors as follows: a
majority of the directors will be elected by the holder of the Series B-1 common
stock; one director will be elected by the holder of the Series B-2 common
stock; and one director will be elected by the holder of the Series B-3 common
stock. The holders of the Class A common stock and Class B common stock, voting
as a single class, will have the right to elect a number of directors equal to
the total number of directors less the number of directors elected by the
holders of Class B common stock. Shareholders may vote in person or by a
properly executed proxy as discussed below. See "PROPOSAL I -- ELECTION OF
DIRECTORS."
WHO CAN ATTEND THE MEETING?
Shareholders of record as of the close of business on April 23, 1999 will
be entitled to notice of and to vote at the annual meeting. As of April 23,
1999, Teligent had 52,741,094 shares of Common Stock issued and outstanding,
consisting of 8,314,795 shares of Class A common stock, 21,436,689 shares of
Series B-1 common stock, 17,206,210 shares of Series B-2 common stock, and
5,783,400 shares of Series B-3 common stock. Each Class A common stock holder of
record on April 23, 1999, is entitled to one vote per share on each matter to be
voted on at the annual meeting, other than the election of directors nominated
by the holders of
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the Class B common stock. Each Class B common stock holder of record on April
23, 1999, is entitled to one vote per share on each matter to be voted on at the
annual meeting, other than the election of directors nominated by the holders of
the other series of Class B common stock. See "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT."
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
Director Elections. Director nominees for the positions to be filled who
receive the highest number of votes from shareholders eligible to vote for such
director nominees will be elected.
Other Matters. The other three matters scheduled to be considered at the
annual meeting, the approval of an amendment to the 1997 Stock Incentive Plan,
the adoption of the 1999 Employee Stock Purchase Plan and the ratification of
the appointment of Ernst & Young LLP as Teligent's independent auditors for the
year ending December 31, 1999, each require the affirmative vote of the majority
of shares present in person or represented by proxy at the annual meeting and
entitled to vote on the matter.
HOW ARE ABSTENTIONS AND BROKER NON-VOTES HANDLED?
Abstentions may be specified on all proposals except the election of
directors and will be counted as votes cast on a particular matter as well as
shares present and represented for purposes of establishing a quorum.
Accordingly, abstentions on the proposals to approve the amendment to the 1997
Stock Incentive Plan, to adopt the 1999 Employee Stock Purchase Plan and to
ratify the appointment of Ernst & Young LLP as Teligent's independent auditors
will each have the effect of a negative vote. Broker non-votes (i.e., proxies
from brokers or nominees indicating that such persons have not received
instructions from the beneficial owners or other persons as to certain proposals
on which such beneficial owners or persons are entitled to vote their shares but
with respect to which the brokers or nominees have no discretionary power to
vote without such instructions) will not be treated as votes cast on a
particular matter but will be treated as shares present or represented for
purposes of establishing a quorum. Accordingly, broker non-votes have no effect
on the outcome of the election of directors, approval of the amendment to the
1997 Stock Incentive Plan, adoption of the 1999 Employee Stock Purchase Plan or
ratification of the appointment of the independent auditors.
PROXIES AND PROXY SOLICITATION
HOW DO I VOTE?
Proxies are solicited to provide all shareholders of record on the voting
record date an opportunity to vote on matters scheduled for the annual meeting
and described in these materials. Shares of Common Stock can only be voted if
the shareholder is present in person at the annual meeting or by proxy. Shares
of Common Stock represented by properly executed proxies will be voted by the
individuals named in such proxy in accordance with the shareholder's
instructions.
WHAT ARE THE BOARD OF DIRECTORS' RECOMMENDATIONS?
Where properly executed proxies are returned to the Company with no
specific instruction as how to vote at the annual meeting, the persons named in
the proxy will vote the shares in accordance with the recommendations of the
Board of Directors. The recommendation of the Board of Directors is set forth
together with the description of each item in this proxy statement. In summary,
the Board of Directors recommends a vote:
- "FOR" the election of management's director nominees (see page 4);
- "FOR" approval of the amendment to the 1997 Stock Incentive Plan (see
page 18);
- "FOR" adoption of the 1999 Employee Stock Purchase Plan (see page 21);
and
- "FOR" ratification of the appointment of Ernst & Young LLP as independent
auditors for the year ending December 31, 1999 (see page 24).
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Should any other matters be properly presented at the annual meeting for
action, the persons named in the enclosed proxy and acting thereunder will have
the discretion to vote on such matters in accordance with their best judgment.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Any person giving a proxy may revoke it at any time before it is voted by
delivering to the Secretary of Teligent, at the above address, a written
revocation or a proxy bearing a later date. Shareholders may also revoke their
proxies by attending the annual meeting in person and casting a ballot.
Attendance at the annual meeting will not in itself constitute the revocation of
a proxy.
WHO PAYS FOR THE COSTS OF SOLICITING PROXIES?
Teligent will pay the costs of soliciting proxies. Teligent will reimburse
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending proxy materials to the beneficial owners of
Common Stock. In addition to solicitation by mail, directors, officers and
employees of Teligent may solicit proxies personally or by facsimile, telegraph
or telephone, without additional compensation.
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PROPOSAL I -- ELECTION OF DIRECTORS
Seven directors will be elected for a one-year term expiring on the date of
the next Annual Meeting of Shareholders or until their respective successors
will have been elected and qualified. The holder of the Series B-1 common stock
will elect four directors, the holder of the Series B-2 common stock will elect
one director and the holder of the Series B-3 common stock will elect one
director. The holders of Class A common stock and Class B common stock voting
together will elect the seventh director. The holders of the Class B common
stock, pursuant to a shareholders agreement entered into between the holders of
the Class B common stock and Teligent, have agreed to vote for the election of
Teligent's Chief Executive Officer as the seventh director.
The persons named in the enclosed proxy intend to vote for the nominees
whose names appear below, other than proxies in which the vote is withheld as to
a nominee. Except as disclosed in this proxy statement, there are no
arrangements or understandings between the nominees and any other person
pursuant to which the nominees were selected.
Set forth below is information as to the persons nominated to become
directors of Teligent. Except as otherwise indicated, each nominee has held the
principal occupation listed or another executive position with the same entity
for at least the past five years. For additional information regarding the
nominees, see "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT,"
"MEETINGS AND COMMITTEES OF THE BOARDS OF DIRECTORS," "COMPENSATION INFORMATION"
and "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
NOMINEE AGE PRINCIPAL OCCUPATION
- ------------------------------------------- --- -------------------------------------------
TO BE ELECTED BY HOLDERS OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK
Alex J. Mandl.............................. 55 Mr. Mandl has been Chairman and Chief
Executive Officer of Teligent since
September 1996. Prior to joining Teligent,
Mr. Mandl served as President and Chief
Operating Officer of AT&T and Executive
Vice President of AT&T and CEO of AT&T's
Communications Services Group (1993-1995).
As President and Chief Operating Officer,
Mr. Mandl oversaw AT&T's operations
including its long-distance, wireless and
local communications services, in addition
to its credit card and Internet businesses.
As Chief Financial Officer of AT&T from
1991 to 1993, Mr. Mandl directed AT&T's
financial strategy, policy and operations,
and managed the acquisition of McCaw
Cellular Communications, Inc. Earlier, Mr.
Mandl served as Chairman and CEO of
Sea-Land Services, Inc., an ocean
transportation and distribution services
company. Mr. Mandl serves on the boards of
the Warner-Lambert Company, Dell Computer
Corporation, Forstmann Little & Co. and
General Instrument Corp.
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NOMINEE AGE PRINCIPAL OCCUPATION
- ------------------------------------------- --- -------------------------------------------
TO BE ELECTED SOLELY BY THE HOLDER OF SERIES B-1 COMMON STOCK
Myles P. Berkman(1)........................ 62 Mr. Berkman has been a director of Teligent
since its inception in March 1996. Mr.
Berkman is Chairman, Chief Executive
Officer, President and Treasurer of The
Associated Group, Inc. ("Associated"),
positions he has held since 1994 with the
exception of Chairman which he has held
since November 1995. In addition to
beneficially owning 48.3% of Teligent's
Class B common stock, Associated is engaged
in the ownership and operation of various
communications related businesses,
including a provider of wireless location
services, international wireless telephony,
radio broadcasting and a portfolio of
marketable equity securities. From 1979 to
1994, Mr. Berkman was President, Chief
Operating Officer and Treasurer of
Associated Communications Corporation
("ACC"), the parent corporation of
Associated prior to 1995, which also was a
publicly traded company. Mr. Berkman
developed ACC into one of the largest
independent U.S. cellular operators at the
time of its sale to SBC Communications Inc.
in 1994. Mr. Berkman is the father of
William H. Berkman and David J. Berkman,
each of whom is also a director of
Teligent.
David J. Berkman........................... 37 Mr. Berkman has been a director of Teligent
since its inception in March 1996. Since
1994, Mr. Berkman has served as Executive
Vice President and a director of
Associated. In addition, Mr. Berkman serves
as Chairman and Chief Executive Officer of
TruePosition, Inc., a wholly owned
subsidiary of Associated. From 1993 to
1994, Mr. Berkman was Executive Vice
President and a member of the Board of
Directors of ACC. Mr. Berkman serves as
director and Vice Chairman of Grupo
Portatel, S.A. de C.V., a company operating
cellular systems in Mexico in which
Associated has a significant interest. Mr.
Berkman is also a director of Entercom
Communications Corp., a public company,
which is the sixth largest radio
broadcasting company in the U.S., and
V-SPAN, Inc., a private company that
specializes in teleconferencing services.
David J. Berkman is the son of Myles P.
Berkman and the brother of William H.
Berkman, each of whom is also a director of
Teligent.
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NOMINEE AGE PRINCIPAL OCCUPATION
- ------------------------------------------- --- -------------------------------------------
William H. Berkman......................... 34 Mr. Berkman has been a director of Teligent
since its inception in March 1996. Mr.
Berkman is currently President of Microwave
Services, Inc., a wholly-owned subsidiary
of Associated. Since June 5, 1997, Mr.
Berkman has served as an Assistant
Secretary of Associated. Before joining
Associated, Mr. Berkman held several
executive positions at The News
Corporation, Ltd. Mr. Berkman also serves
as a director of CMG Information Services,
Inc., a public company that provides
internet solutions through its operating
companies and strategic venture
investments. William H. Berkman is the son
of Myles P. Berkman and the brother of
David J. Berkman, each of whom is also a
director of Teligent.
Donald H. Jones(2)......................... 61 Mr. Jones has been a director of Teligent
since November 1997. He has served as a
director of Associated since 1994. Prior to
1994, Mr. Jones served as a director of ACC
beginning in 1986, as well as a consultant
to ACC beginning in 1982. Mr. Jones is
Chairman of Triangle Capital, a firm
engaged in the development of new business
enterprises and investment activities.
Until April 1997, Mr. Jones was Vice
Chairman of Nets Inc., formerly
Industry.Net Corporation, a company that
was engaged in internet commerce, and from
1992 to June 1996, was its Chairman. Mr.
Jones is a director of Respironics Inc., a
corporation engaged in the development,
manufacturing and marketing of medical
equipment, and PNC Equity Management
Corporation, a corporation engaged in the
investment in growth companies. Mr. Jones
also serves as an adjunct professor of
entrepreneurship at the Carnegie Mellon
Graduate School of Business.
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NOMINEE AGE PRINCIPAL OCCUPATION
- ------------------------------------------- --- -------------------------------------------
TO BE ELECTED SOLELY BY THE HOLDER OF SERIES B-2 COMMON STOCK
Rajendra Singh(1)(2)....................... 44 Dr. Singh has been a director of Teligent
since its inception in March 1996. Since
December 1993, Dr. Singh has served as
Chairman of the Board and Chief Executive
Officer of Telcom Ventures, L.L.C. ("Telcom
Ventures"). Dr. Singh also served as
President of Telcom Ventures, through
September 1997. Dr. Singh also serves as
President and Treasurer of Digital Services
Corporation, an affiliate of Telcom
Ventures. Dr. Singh founded Telcom Ventures
in 1993 and, together with his family, is
one of the principal owners of that
company. Since October 1998, Dr. Singh has
served as Chairman of the Board and acting
Chief Executive Officer of LCC
International, Inc., a worldwide provider
of wireless engineering and design services
and related products which he co-founded in
1983 and which is an affiliate of Telcom
Ventures. The Singh family and The Carlyle
Group are the principal owners of Telcom
Ventures. Dr. Singh has created widely-used
standards of system design and methodology
in the cellular industry.
TO BE ELECTED SOLELY BY THE HOLDER OF SERIES B-3 COMMON STOCK
Tetsuro Mikami(1)(2)....................... 47 Mr. Mikami has been a director of Teligent
since November 1997. Since January 1999,
Mr. Mikami has served as Director, Overseas
Carrier Business Group, Global Business
Division of Nippon Telegraph and Telephone
Corporation ("NTT"). From April 1993 to
December 1998, Mr. Mikami served as General
Manager, Business Solutions Group, Long
Distance, of NTT. Mr. Mikami has been with
NTT for over twenty years and has served in
various senior management roles. He
currently resides in Tokyo, Japan.
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(1) Member of Teligent's Compensation Committee.
(2) Member of Teligent's Audit Committee.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
DOES ANYONE OWN MORE THAN FIVE PERCENT OF THE COMPANY'S STOCK? HOW MUCH STOCK
DOES THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS OWN?
The following table sets forth, as of the April 23, 1999 record date,
information regarding share ownership of: (i) those persons or entities known by
management to beneficially own more than five percent of Teligent's Common
Stock, (ii) each current member of the Board of Directors of Teligent, (iii)
each executive officer of Teligent named in the Summary Compensation Table
appearing under "COMPENSATION INFORMATION" below, and (iv) all current directors
and executive officers of Teligent as a group. The address of each of the
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beneficial owners, except where otherwise indicated, is the same address as
Teligent. An asterisk (*) in the table indicates that an individual beneficially
owns less than one percent of the outstanding Common Stock of Teligent.
CLASS A COMMON CLASS B COMMON STOCK(1)(2)
STOCK(1) ----------------------------------------------------
---------------------- SERIES B-1 SERIES B-2 SERIES B-3
SHARES PERCENT SHARES SHARES SHARES PERCENT
BENEFICIALLY OF BENEFICIALLY BENEFICIALLY BENEFICIALLY OF
BENEFICIAL OWNERS OWNED CLASS OWNED OWNED OWNED CLASS
----------------- ------------ ------- ------------ ------------ ------------ -------
GREATER THAN 5 PERCENT BENEFICIAL OWNERS
The Associated Group, Inc.(3).......... -- -- 21,436,689 -- -- 48.3%
200 Gateway Towers
Pittsburgh, PA 15222
Telcom Ventures, L.L.C.(4)............. -- -- -- 17,206,210 -- 38.7%
200 N. Union Street, Suite 300
Alexandria, VA 22201
Nippon Telegraph and Telephone
Corporation(5)....................... -- -- -- -- 5,783,400 13.0%
Kowa Nishi-Shimbashi Bldg. -B
14-1 Nishi-Shimbashi 2-chome,
Minato-ku, Tokyo 105-0003
Japan
Lynn Forester(6)....................... 682,410 8.2% -- -- -- --
c/o FirstMark Holdings
527 Madison Avenue
New York, NY 10022
FMR Corp.(7)........................... 1,063,200 12.8% -- -- -- --
82 Devonshire Street
Boston, Massachusetts 02109
CURRENT AND NOMINEE DIRECTORS
Alex J. Mandl(8)....................... 2,231,244 21.6% -- -- -- --
Myles P. Berkman(9).................... 10,025 * -- -- -- --
David J. Berkman(10)................... 241,936 2.8% -- -- -- --
William H. Berkman(11)................. 241,936 2.8% -- -- -- --
Donald H. Jones........................ 3,000 * -- -- -- --
Tetsuro Mikami(12)..................... -- -- -- -- -- --
Dr. Rajendra Singh(13)................. 161,776 1.9% -- -- -- --
NAMED OFFICERS WHO ARE NOT DIRECTORS
Kirby G. Pickle, Jr.(14)............... 419,440 4.8% -- -- -- --
Laurence E. Harris(15)................. 242,664 2.8% -- -- -- --
Abraham L. Morris(16).................. 245,664 2.9% -- -- -- --
Steven F. Bell(17)..................... 161,776 1.9% -- -- -- --
Directors and executive officers of
Teligent as a group (11
persons)(18)......................... 3,959,461 33.0% -- -- -- --
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(1) Unless otherwise indicated, each beneficial owner listed above has
represented that he, she or it possesses sole voting and sole investment
power with respect to the shares beneficially owned by such person, entity
or group. The number of shares shown as beneficially owned by such person,
entity or group includes all options, warrants and convertible securities
currently exercisable or exercisable within 60 days of the April 23, 1999
voting record date. The percentages of beneficial ownership as to each
person, entity or group assume the exercise or conversion of all options,
warrants and convertible securities held by such person, entity or group,
but not the exercise or conversion of options, warrants and convertible
securities held by others shown in the table.
(2) Each share of Class B common stock is convertible at any time, at the
option of the registered holder thereof, into one fully paid and
nontransferable share of Class A common stock, subject to adjustment for
any stock splits.
(3) Teligent has granted the registered holder of the shares of Class B common
stock beneficially owned by The Associated Group, Inc., through its
affiliate Microwave Services, Inc., rights to have its shares of
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Class B common stock, which have been or are convertible into shares of
Class A common stock, registered under the Securities Act of 1933.
(4) Teligent has granted the registered holder of the shares of Class B common
stock beneficially owned by Telcom Ventures, L.L.C., through its affiliate
Telcom-DTS Investors, L.L.C., rights to have its shares of Class B common
stock, which have been or are convertible into shares of Class A common
stock, registered under the Securities Act of 1933.
(5) Teligent has granted the registered holder of the shares of Class B common
stock beneficially owned by the Nippon Telephone and Telegraph Corporation,
through its affiliate NTTA&T Investment, Inc., rights to have its shares of
Class B common stock, which have been or are convertible into shares of
Class A common stock, registered under the Securities Act of 1933.
(6) As reported in a Schedule 13D filed with the SEC on March 16, 1999 by Ms.
Forester.
(7) As reported in a Schedule 13G filed with the SEC on March 10, 1999 by FMR
Corp. Fidelity Management & Research Company, a wholly-owned subsidiary of
FMR, is the beneficial owner of all 1,063,200 shares of Class A common
stock reported above as a result of acting as investment advisor to various
investment companies. The ownership of one investment company, Fidelity
Growth Company Fund, amounted to 648,200 or 7.8% of Teligent's Class A
common stock outstanding. Voting of the shares held by the various
investment companies is carried out by the Boards of Trustees of such
companies pursuant to written guidelines.
(8) Includes 2,003,244 shares of Class A common stock issuable upon exercise of
Mr. Mandl's stock options. Also includes 3,000 shares of Class A common
stock held by Mr. Mandl's wife.
(9) Does not include 21,436,689 shares of Class B common stock reported as
beneficially owned by The Associated Group, Inc. As Chairman, President,
Chief Executive Officer and Treasurer of The Associated Group, Inc., Myles
P. Berkman may be deemed to be the beneficial owner of the shares of Class
B common stock beneficially owned by The Associated Group, Inc.
(10) All 241,936 shares of Class A common stock reported are issuable upon
exercise of David J. Berkman's stock options. Does not include 21,436,689
shares of Class B common stock reported as beneficially owned by The
Associated Group, Inc. As a Director and Executive Vice President of The
Associated Group, Inc., David J. Berkman may be deemed to be the beneficial
owner of the shares of Class B common stock beneficially owned by The
Associated Group, Inc.
(11) All 241,936 shares of Class A common stock reported are issuable upon
exercise of William H. Berkman's stock options. Does not include 21,436,689
shares of Class B common stock reported as beneficially owned by The
Associated Group, Inc. As President of Microwave Services, Inc., the holder
of the Series B-1 common stock, William H. Berkman may be deemed to be the
beneficial owner of the shares of Class B common stock beneficially owned
by The Associated Group, Inc.
(12) Does not include 5,783,400 shares of Class B common stock reported as
beneficially owned by Nippon Telegraph and Telephone Corporation. As a
Director, Overseas Carrier Business Group, Global Business Division of
Nippon Telegraph and Telephone Corporation, Tetsuro Mikami may be deemed to
be the beneficial owner of the shares of Class B common stock beneficially
owned by Nippon Telegraph and Telephone Corporation.
(13) All 161,776 shares of Class A common stock reported are issuable upon
exercise of Dr. Singh's stock options. Does not include 17,206,210 shares
of Class B common stock reported as beneficially owned by Telcom Ventures,
L.L.C. As the Chief Executive Officer, a Director and, together with
members of his family, the principal owner of Telcom Ventures, L.L.C., Dr.
Singh may be deemed to be the beneficial owner of the shares of Class B
common stock beneficially owned by Telcom Ventures, L.L.C.
(14) Includes 404,440 shares of Class A common stock issuable upon exercise of
Mr. Pickle's stock options.
(15) All 242,664 shares of Class A common stock reported are issuable upon
exercise of Mr. Harris' stock options.
(16) Includes 242,664 shares of Class A common stock issuable upon exercise of
Mr. Morris' stock options.
(17) All 161,776 shares of Class A common stock reported are issuable upon
exercise of Mr. Bell's stock options.
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(18) Includes shares held directly, as well as shares held jointly with family
members, shares held in retirement accounts, held in a fiduciary capacity,
held by certain of the group members' families, or held by trusts of which
the group member is a trustee or substantial beneficiary, with respect to
which shares the group member may be deemed to have sole or shared voting
and/or investment powers. Also includes 3,700,438 shares of Class A common
stock issuable upon exercise of stock options held by all directors and
executive officers as a group. Does not include the shares of Class B
common stock reported as beneficially owned by The Associated Group, Inc.,
Telcom Ventures, L.L.C. or Nippon Telegraph and Telephone Corporation. See
footnotes 2, 9, 10, 11, 12 and 13 above.
WHO ARE THE NAMED OFFICERS?
Alex J. Mandl, age 55, (see "PROPOSAL 1 -- ELECTION OF DIRECTORS" above).
Kirby G. Pickle, Jr., age 42, has served as President and Chief Operating
Officer since February 1997. Prior to that, Mr. Pickle served as Executive Vice
President of MFS Communications Company, Inc. and President and Chief Operating
Officer of one of its subsidiaries, UUNET Technologies, Inc. Earlier, as
President and COO of MFS Intelenet, Inc., Mr. Pickle managed three businesses
that generated a majority of MFS' revenues. Prior to his service for MFS, Mr.
Pickle was a Vice President at US Sprint (now known as Sprint), a regional sales
manager for MCI Communications Corporation, Inc. and held various management
positions at AT&T.
Laurence E. Harris, age 63, has been Senior Vice President and General
Counsel since December 1996. Prior to joining the Company, Mr. Harris served as
Senior Vice President of Law and Public Policy for MCI Communications
Corporation. Earlier, Mr. Harris was President and Chief Operating Officer of
Metromedia Telecommunications, Inc. and CRICO Communications, a privately-held
paging company. Mr. Harris also served as chief of the FCC's Mass Media Bureau
where he was responsible for regulation and policy for cable, television and
radio broadcasting. Mr. Harris was also responsible for regulatory and antitrust
activities at MCI before serving at the FCC.
Abraham L. Morris, age 40, joined Teligent in April 1997 as Senior Vice
President, Chief Financial Officer and Treasurer. Prior to that, he served as
Senior Vice President for Operations Support at MFS Communications Company,
Inc., where Mr. Morris was involved in business development, revenue assurance
and co-carrier/local service activities. Earlier, Mr. Morris was Vice President
and Chief Transition Officer for MFS Intelenet, Inc., and previously was
Treasurer of MFS. Mr. Morris was involved in MFS' capital raising activities,
including its initial public offering. Before joining MFS, Mr. Morris served as
General Manager, Mergers and Acquisitions at Peter Kiewit Sons', Inc., a
diversified industrial services company.
Steven F. Bell, age 49, assumed the position of Senior Vice President for
Human Resources in April 1997. Prior to joining Teligent, Mr. Bell served as
Vice President for Human Resources and Organization Development at COMSAT
Corporation where he was responsible for executive and staff recruitment and
development at the 4,000-employee satellite communications company. Earlier, Mr.
Bell was Vice President, Human Resources for the worldwide technologies division
of American Express Corporation.
MEETINGS AND COMMITTEES OF THE BOARDS OF DIRECTORS
HOW OFTEN DID THE BOARD OF DIRECTORS MEET DURING 1998?
Meetings of Teligent's Board of Directors are generally held every two
months or so. For the year ended December 31, 1998, the Board of Directors met
seven times. During 1998, no incumbent director of Teligent attended fewer than
75% of the aggregate of the total number of Board of Directors meetings and the
total number of meetings held by the committees of the Board of Directors on
which they served.
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ARE THERE ANY BOARD COMMITTEES?
Teligent's Board of Directors has a standing Audit Committee and
Compensation Committee. The Audit Committee reviews the scope and approach of
the annual audit, the annual financial statements and the auditors' report
thereon and the auditors' comments relative to the adequacy of Teligent's system
of internal controls and accounting systems. The Audit Committee also recommends
to the Board of Directors the appointment of independent public accountants for
the following year. The Audit Committee met three times during 1998. The members
of the Audit Committee are Directors Donald Jones, Tetsuro Mikami and Dr.
Rajendra Singh.
The Compensation Committee reviews management compensation levels and
provides recommendations to the Board of Directors regarding salaries and other
compensation for Teligent's executive officers, including bonuses and incentive
programs. The Compensation Committee met twice in 1998. The members of the
Compensation Committee are Directors Myles Berkman, Tetsuro Mikami and Dr.
Rajendra Singh.
HOW ARE BOARD MEMBERS NOMINATED?
Nominations of persons for election to the Board of Directors may be made
at any annual meeting of shareholders, or at any special meeting of shareholders
called for the purpose of electing directors. Shareholders may nominate
directors to be elected to the Board of Directors. In order to make such a
nomination, the shareholder must (i) be the record holder of the shares on date
of the giving of the notice provided for in Teligent's bylaws and on the record
date for the determination of shareholders entitled to vote at such meeting,
(ii) be entitled to vote for the election of such director(s) and (iii) comply
with the notice procedures set forth in Teligent's bylaws.
IS THERE A DUE DATE FOR SHAREHOLDER NOMINATIONS?
Notice of a shareholder's nomination(s) must be delivered to or mailed and
received by the Company's Secretary at its principal executive offices: (i) in
the case of an annual meeting, not less than 60 days nor more than 90 days prior
to the anniversary date of the immediately preceding annual meeting of
shareholders; provided, however, that in the event that the annual meeting is
called for a date that is not within 30 days before or after such anniversary
date, notice by the shareholder in order to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure of
the date of the annual meeting was made, whichever first occurs; and (ii) in the
case of a special meeting of shareholders called for the purpose of electing
directors, not later than the close of business on the 10th day following the
day on which notice of the date of the special meeting was mailed or public
disclosure of the date of the special meeting was made, whichever first occurs.
Shareholders may request a copy of Teligent's bylaws at no cost, by writing or
telephoning the Company.
COMPENSATION INFORMATION
HOW ARE DIRECTORS COMPENSATED?
Directors are not paid any fees for serving on Teligent's Board of
Directors or any of its committees. Directors are not reimbursed for their
out-of-pocket expenses incurred in connection with attendance at meetings of,
and other activities relating to serving on, the Board of Directors and any of
its committees. Teligent may consider additional compensation arrangements for
its directors from time to time. See "-- Compensation Committee Interlocks and
Insider Participation" and "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS"
below.
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SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation paid
or granted to Teligent's Chief Executive Officer and the four other highest paid
executive officers during 1998 (collectively, the "Named Officers").
LONG TERM
ANNUAL COMPENSATION
COMPENSATION(1) AWARDS
------------------- ---------------------
SECURITIES UNDERLYING ALL OTHER
SALARY BONUS OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
--------------------------- ---- -------- -------- --------------------- ------------
Alex J. Mandl(3).................... 1998 $500,000 $500,000 -- $ 4,800(4)
Chairman of the Board and Chief 1997 500,000 500,000 6,009,732(2) 3,988,270(5)
Executive Officer 1996 165,753 166,666 -- --
Kirby G. Pickle, Jr. (3)............ 1998 $350,000 $275,000 -- $ 4,800(4)
President and Chief Operating 1997 329,808 250,000 1,011,101(2) 192,081(6)
Officer 1996 -- -- -- --
Laurence E. Harris(3)............... 1998 $287,692 $150,000 -- $ 4,800(4)
Senior Vice President, General 1997 275,000 150,000 606,661(2) 4,750(4)
Counsel and Assistant Secretary 1996 15,865 -- -- --
Abraham L. Morris(3)................ 1998 $271,914 $150,000 -- $ 510,560(7)
Senior Vice President, Chief 1997 179,808 125,000 606,661(2) --
Financial Officer and Treasurer 1996 -- -- -- --
Steven F. Bell(3)................... 1998 $246,154 $120,000 -- $ 396,114(8)
Senior Vice President for Human 1997 164,423 100,000 404,440(2) 3,375(4)
Resources 1996 -- -- -- --
- ---------------
(1) The Named Officers did not receive any additional benefits or perquisites
which, in the aggregate, exceeded the lesser of 10% of his salary and bonus,
or $50,000.
(2) Consists of Company Appreciation Rights ("CARs") which were converted on
November 21, 1997 (the date of Teligent's initial public offering) to
options to purchase shares of Teligent's Class A common stock.
(3) The Named Officers joined Teligent on the following dates: Mr. Mandl joined
on September 1, 1996, Mr. Pickle joined on January 20, 1997, Mr. Harris
joined on December 9, 1996, Mr. Morris joined on April 10, 1997, and Mr.
Bell joined on April 7, 1997.
(4) Represents Teligent's contribution to its 401(k) Savings Plan on behalf of
the Named Officers.
(5) Includes $3,983,520 of forgiveness of indebtedness to a subsidiary of
Associated and an affiliate of Telcom Ventures pursuant to Mr. Mandl's
employment agreement, and Teligent's contribution of $4,750 to Mr. Mandl's
401(k) Savings Plan. See "Compensation Committee Interlocks and Insider
Participation" below.
(6) Includes $187,331 in relocation costs paid to Mr. Pickle, and Teligent's
contribution of $4,750 to Mr. Pickle's 401(k) Savings Plan.
(7) Includes Teligent's contribution of $4,800 to Mr. Morris' 401(k) Savings
Plan and $505,760 loan forgiveness. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS" below.
(8) Includes Teligent's contribution of $4,800 to Mr. Bell's 401(k) Savings Plan
and $391,314 loan forgiveness. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS" below.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
None of the Named Officers were granted stock options or stock appreciation
rights ("SARs") by Teligent during 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information as to the aggregate number and
value of stock options held by the Named Officers at December 31, 1998. There
are no Teligent SARs outstanding.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED ON VALUE FY-END (#) FY-END ($)(1)
EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Alex J. Mandl............. -- -- 2,003,244 4,006,488 $50,051,051 $65,445,981
Kirby G. Pickle, Jr....... -- -- 202,220 799,402 4,495,351 17,770,706
Laurence E. Harris........ -- -- 242,664 363,997 5,394,421 8,091,653
Abraham L. Morris......... -- -- 121,332 485,329 2,697,210 10,788,864
Steven F. Bell............ -- -- 80,888 323,552 1,798,140 7,192,561
- ---------------
(1) The closing price of Teligent Class A common stock on December 31, 1998 was
$28.75.
EMPLOYMENT AGREEMENT
Mr. Mandl and Teligent entered into an employment agreement which took
effect September 1, 1996 and expires on September 1, 2002, unless further
extended pursuant to its terms. Under his employment agreement, Mr. Mandl is
entitled to a minimum salary of $500,000 per year, which after August 31, 1998
may be increased at the discretion of the Board of Directors. Mr. Mandl is also
entitled to an annual bonus of $500,000 though December 31, 1999. After December
31, 1999, the amount of bonus paid to Mr. Mandl will be subject to the Board of
Directors' discretion. Commencing September 1, 1999, Mr. Mandl is entitled to
participate in all of Teligent's executive compensation plans, excluding
stock-based incentive plans. The employment agreement prohibits disclosure by
Mr. Mandl of any Company confidential information at any time. In addition,
while Mr. Mandl is employed by Teligent and for two years thereafter, he is
prohibited from engaging or significantly investing in competing business
activities and from soliciting any Company employee to be employed elsewhere.
In accordance with his employment agreement, Mr. Mandl received loans from
two of the holders of the Class B common stock totaling $15 million. These loans
were assigned to Teligent by the two holders of the Class B common stock in
November 1998. These loans will be automatically forgiven (i) twenty percent in
year one and eighty percent in year five, (ii) upon the termination of his
employment by him for good reason or by the Company without cause, or (iii) his
death or disability. See "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS -- Mandl Loans" below. Under his employment agreement, Mr. Mandl
will also receive a $5 million payment upon the expiration of the fifth year of
his employment agreement. Under limited circumstances as set forth in Mr.
Mandl's employment agreement, the $5 million may be paid to him earlier than the
expiration of the fifth year of his agreement. In addition, the $5 million
payment may be reduced as a result of early termination of his employment. In
the event of a "Change in Control" (as defined in the employment agreement) of
Teligent, the principal balance remaining on the loans to Mr. Mandl will be
forgiven and any amount of the $5 million payment still due to Mr. Mandl will be
paid to him.
Mr. Mandl's employment agreement provides that if either of the registered
holders of the Series B-1 common stock or Series B-2 common stock sells any of
their stock in the Company to a third party, such seller will be obligated to
require the purchaser of such interests 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 options
to purchase Class A common stock) valued as of the date of such purchase, at the
same price paid by the third party for the interests of such seller. His
employment agreement
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also provides for a right of first refusal on the part of the registered holders
of the Series B-1 common stock and Series B-2 common stock with respect to the
disposition by Mr. Mandl of any portion of his equity interest in Teligent. In
the event of a "Change in Control" (as defined in the employment agreement) of
the Company, all options held by Mr. Mandl will vest immediately.
In addition, Teligent granted to Mr. Mandl the right to have certain shares
of his Class A common stock registered under the Securities Act of 1933.
Teligent is required to pay all registration expenses, other than underwriting
discounts, commissions and fees, with respect to such registrations required by
the employment agreement and to indemnify Mr. Mandl against certain liabilities
in respect of any such registration statement.
Teligent may terminate Mr. Mandl's employment agreement (i) without cause
by giving 30 days' notice or (ii) for cause upon the Board of Directors's
confirmation that Mr. Mandl has failed to cure the grounds for termination
within ten days after notice thereof. Mr. Mandl may terminate his employment
agreement with Teligent (a) without good reason by giving a 120 days' notice or
(b) for good reason upon Teligent's failure to cure the grounds for termination
within 20 days after notice thereof.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed entirely of non-employee directors
and is responsible for developing and making recommendations to the Board of
Directors with respect to Teligent's executive compensation policies and
practices. In addition, the Compensation Committee determines the compensation
to be paid to the Chief Executive Officer and each of the other Named Officers.
COMPENSATION PHILOSOPHY
The philosophy of the Company's compensation program is, generally, to
provide a performance-based executive compensation program that rewards
executives whose efforts enable Teligent to achieve its business objectives and
enhance shareholder value. Specifically, Teligent's executive compensation
program has been designed to provide an overall level of compensation
opportunity that is competitive within the telecommunications industry, as well
as with a broader group of high technology companies that share the complexity
of achieving aggressive growth targets in a competitive marketplace. The
Compensation Committee uses its discretion to set individual executive
compensation levels warranted in its judgment by market practice, company
performance and individual performance thereby enabling Teligent to attract,
motivate, reward and retain individuals who possess the skills, experience and
talents necessary to advance Teligent's growth and financial performance.
The compensation of the Company's executive officers, including the Named
Officers, is comprised of three elements: base salary, annual cash bonus and
stock options.
Base Salary. Base salary is the primary mechanism used to compensate
executives for their management responsibilities. Base salaries are determined
by evaluating the responsibilities of the position, the experience and knowledge
of the individual, the contribution of the individual to the Company's
achievements during the prior year and the competitive marketplace for executive
talent. The Chief Executive Officer recommends annual salary adjustments for
executive officers after consideration of these factors. The Chief Executive
Officer's recommendations are used by the Compensation Committee to determine
executive officers' annual salary levels.
Annual Bonus. The annual bonuses paid to Teligent's executive officers are
dependent upon individual and overall company performance. At the beginning of
the year, the Compensation Committee approves specific performance measures and
goals based upon the business plan for that year. At the conclusion of the year,
the Compensation Committee compares actual achievements against these goals. The
1998 bonus amounts shown on the "Summary Compensation Table" above reflect the
tremendous accomplishments the Company made during 1998, including publicly
launching service in 15 markets (exceeding the initial target by fifty percent),
signing leases or options for nearly 2,400 customer buildings, building a sales
team of more than 200 and securing state regulatory authority in all 74 of our
licensed markets, and interconnection agreements for all but two of those
markets.
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Stock Options. Stock options provide an incentive for retention of
executive talent and the creation of shareholder value in the long-term since
their full benefits cannot be realized unless the price of Teligent's stock
appreciates over a specified number of years and the executive continues to
perform services for Teligent. The Compensation Committee believes that stock
options serve an important component of compensation by closely aligning
management's interests and actions with those of Teligent's shareholders. During
1998, none of the Named Officers were granted any new stock options, although
each continues to hold a significant number of stock options granted at the time
of their employment.
To further align the interests of Teligent's executives with that of its
shareholders, Teligent's Board of Directors has adopted, subject to shareholder
approval, an employee stock purchase plan. Under the proposed stock purchase
plan, certain employees, including certain executives, would be able to purchase
Teligent stock through deferral of earned and otherwise payable compensation.
COMPENSATION OF THE NAMED OFFICERS
The Compensation Committee has reviewed the compensation of the Company's
Named Officers and has concluded that their 1998 compensation was reasonable in
view of the Company's performance and the contribution of those officers to that
performance.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Pursuant to his employment agreement, Mr. Mandl was paid a base salary of
$500,000 and received an annual bonus of $500,000 for services rendered in 1998.
Mr. Mandl was not granted any new stock options in 1998 although he continues to
hold a significant number of stock options granted at the time of employment.
Mr. Mandl's total compensation package reflects the extraordinary corporate
accomplishments -- taking Teligent from an opportunity to an operating
company -- that were achieved during 1998 under his leadership.
162(M) OF THE INTERNAL REVENUE CODE
In adopting and administering executive compensation plans and
arrangements, the Compensation Committee will consider whether the deductibility
of such compensation will be limited under section 162(m) of the Internal
Revenue Code, as amended, and, in appropriate cases, may serve to structure
arrangements so that any such limitation will not apply.
Submitted by the Compensation
Committee,
Myles Berkman
Tersuro Mikami
Dr. Rajendra Singh
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STOCK PERFORMANCE GRAPH
The line graph below compares the cumulative total shareholder return on
Teligent's Class A common stock to the cumulative total return of the S&P Midcap
400 Index and a custom peer index (the "Peer Index") for the period November 21,
1997 (the date Teligent became a public company) through December 31, 1998. The
graph assumes an initial investment of $100 at November 21, 1997 and
reinvestment of all dividends.
[STOCK PERFORMANCE GRAPH APPEARS HERE]
TELIGENT INC. S&P MIDCAP 400 INDEX PEER INDEX(1)
--------------- ---------------------- -------------
11/21/97 100.00 100.00 100.00
12/31/97 96.10 103.20 99.32
12/31/98 112.20 122.92 97.24
(1) The Peer Index consists of corporations (other than Teligent) who (a) are
U.S. based and whose operations are principally within the U.S., (b) are
classified, along with Teligent, by industry analysts as Competitive Local
Exchange Carriers (CLECs), and (c) were publicly traded throughout the
period November 21, 1997 to December 31, 1998. Specifically, the Peer Group
consists of the following corporations: Advanced Radio Telecom Corporation,
e.spire Communications, Inc., Electric Lightwave, Inc., GST
Telecommunications, Inc., ICG Communications, Inc., Intermedia
Communications, Inc., ITC Deltacom, Inc., McLeodUSA Incorporated, Nextlink
Communications, Inc., RCN Corporation and Winstar Communications, Inc.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Teligent's Compensation Committee members are Directors Myles Berkman,
Tetsuro Mikami and Dr. Rajendra Singh.
Nippon Telegraph and Telephone Corporation. Mr. Mikami is a director of
Teligent and the Series B-3 common stock nominee for election to the Board of
Directors at this year's annual meeting. Mr. Mikami is the Director, Overseas
Carrier Business Group, Global Business Division, of NTT. Through a wholly owned
subsidiary, NTTA&T Investment, Inc. ("NTTA&T"), NTT is the beneficial owner of
13.0% of Teligent's Class B common stock and has the right to elect one director
to Teligent's Board of Directors, provided it maintains certain Series B-3
common stock threshold ownership limits.
Teligent has an agreement with NTT America, Inc. ("NTT America"), a wholly
owned subsidiary of NTT, whereby NTT America provides certain technical services
to Teligent relating to network design and implementation. The term of the
agreement commenced on December 1, 1997, and terminates on November 30, 2002,
unless extended or earlier terminated as provided in the agreement. After the
initial five-year
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period, the term is automatically extended for additional one-year periods
unless either party gives notice of termination within 60 days prior to the then
applicable termination date. Under the agreement, during the first two years of
the initial five-year term, Teligent is required to pay NTT America a fee in the
amount of $4 million per year. The agreement provides that the fees payable by
Teligent to NTT America during each of the remaining three years of the initial
term will be negotiated annually based upon the scope of technical services to
be provided under an annual work plan to be prepared by Teligent and NTT
America. The parties have the right to terminate the agreement in the event they
cannot agree on any annual work plan or the fees payable for such services.
Pursuant to the shareholders agreement entered into between Teligent and
the holders of the Class B common stock, employees of NTTA&T may observe
Teligent's operations, including its technical and marketing activities. NTTA&T
have the right and license to use such product, service, marketing, operational
and technical information of Teligent as are observed by NTTA&T's employees.
This information may, however, only be used in the business of NTTA&T and its
affiliates outside the United States. Such right does not include any specific
patent, copyright, trademark, trade name or similar property rights of Teligent
and will not be assignable to any third party.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mandl Loans. On September 1, 1996, a subsidiary of Associated and an
affiliate of Telcom Ventures made loans to Mr. Mandl in the aggregate principal
amount of $15 million. In November 1998, these loans were assigned to Teligent.
The interest rate on such loans is 6.53% per year. Principal and interest
accrued on the loans will become due and payable on September 3, 2001. On
September 1, 1997, the first anniversary of Mr. Mandl's employment with
Teligent, twenty percent of the principal and all underlying accrued interest
was forgiven. The remaining eighty percent of principal and any underlying
accrued interest will be forgiven on the fifth anniversary of his employment
with Teligent. If Mr. Mandl's employment with Teligent is terminated prior to
September 1, 2001, by Teligent other than for cause or by Mr. Mandl for good
reason or by reason of his death or disability, the outstanding principal
balance and accrued interest thereon will be forgiven. If Mr. Mandl's employment
with Teligent is terminated prior to September 1, 2001 for any other reason, the
outstanding principal balance and interest accrued thereon will become
immediately due and payable.
Other Named Officer Loans. Messrs. Pickle, Morris and Bell received loans
each in the aggregate principal amounts of $1,000,000. Such loans bear interest
at annual interest rates of 5.73%, 5.76% and 5.83%, respectively. The principal
amount and accrued interest on such loans will become due and payable generally
on February 1, 2000, April 10, 2000 and April 7, 2000, respectively. Each of the
loans provides for the forgiveness of the principal balance and interest accrued
thereon; generally, these provisions become applicable either incrementally
during the term of the loan or as of its maturity date (in any case, subject to
the executive's continued employment with Teligent as of such date) or, among
other things, in the event the executive's employment is terminated under
certain circumstances. In 1998, under the terms of the loans, the Company
forgave $505,760 of the balance due on Mr. Morris' loan and $391,314 of the
balance due on Mr. Bell's loan. In addition, each of the loans provides that the
remaining principal balance and interest accrued thereon will become immediately
due and payable in the event the executive's employment with Teligent is
terminated for cause or, generally, by the executive other than by reason of
death or disability. Mr. Harris received a loan in the aggregate principal
amount of $600,000, bearing interest at an annual rate of 6.54%. Mr. Harris'
loan is forgivable only if he is terminated other than for cause; otherwise, his
loan is due and payable to Teligent on June 8, 2000. Mr. Harris also received an
advance of $250,000 in January 1997, which amount will be deducted from any
proceeds paid to him in connection with the exercise of his options to purchase
Teligent Class A common stock.
Teligent has granted to Mr. Mandl, Chairman and Chief Executive Officer of
Teligent, and to Lynn Forester (FirstMark), an 8.2% holder of the Class A common
stock, rights to have certain of their shares of Class A common stock (or shares
of Class A common stock which are subject to options) registered under the
Securities Act of 1933. Teligent is required to pay all registration expenses
(other than underwriting discounts and commissions and fees) with respect to all
registrations required under its agreement with such
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shareholders and to indemnify the selling shareholders against certain
liabilities in respect of any such registration statement.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Teligent's
directors and executive officers, and persons who beneficially own more than 10
percent of a registered class of Teligent's equity securities, to file with the
SEC and The Nasdaq Stock Market initial reports of ownership and reports of
changes in ownership of Teligent's Class A Common stock and other equity
securities of Teligent by the tenth of the month following a change. Officers,
directors and greater than 10 percent shareholders are required by SEC
regulations to furnish Teligent with copies of all Section 16(a) forms they
file.
To Teligent's knowledge, based solely on a review of the copies of such
reports furnished to Teligent and written representations that no other reports
were required during the year ended December 31, 1998, all Section 16(a) filing
requirements applicable to its officers, directors and greater than 10 percent
beneficial owners were complied with.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION
OF THE CLASS A COMMON STOCK NOMINEE, ALEX J. MANDL, AS A DIRECTOR OF TELIGENT.
PROPOSAL II -- APPROVAL OF AN AMENDMENT TO THE 1997 STOCK INCENTIVE PLAN
At the annual meeting, shareholders will be asked to approve an amendment
to the Teligent, Inc. 1997 Stock Incentive Plan to increase the number of shares
of Class A common stock reserved for issuance under the plan by 4,000,000 shares
to a total of 18,729,125 shares. The Board of Directors has adopted the
amendments, subject to shareholder approval.
WHY IS THE 1997 STOCK INCENTIVE PLAN BEING AMENDED?
Teligent believes that long term equity compensation in the form of stock
options is critical in order to attract qualified personnel to Teligent and to
retain and provide incentive to current personnel, particularly in light of the
increasingly competitive environment for talented personnel. As of April 23,
1999, options to purchase 14,502,394 shares were outstanding under the 1997
Stock Incentive Plan, 159,522 shares had been issued pursuant to the exercise of
options granted under such plan and 226,731 shares remained available for future
grants. The Board of Directors believes that the number of shares currently
available under the 1997 Stock Incentive Plan will be insufficient in light of
the anticipated continued growth in Teligent's operations, including anticipated
increases in the number of employees. For this reason, the Board of Directors
has determined that it is in the best interests of Teligent to increase the
number of shares available for issuance under the 1997 Stock Incentive Plan by
4,000,000 shares.
WHAT ARE THE PURPOSES OF THE 1997 STOCK INCENTIVE PLAN?
The purposes of the 1997 Stock Incentive Plan are to facilitate the
ownership of Teligent's stock by officers, other employees, directors and
consultants of the Company, thereby aligning their interests with those of
Teligent shareholders, and to assist the Company in attracting, motivating, and
retaining key personnel.
WHAT ARE THE MAIN FEATURES OF THE 1997 STOCK INCENTIVE PLAN?
The following description of the main features of the 1997 Stock Incentive
Plan, as amended and restated, is qualified in its entirety by reference to the
full text of the 1997 Stock Incentive Plan, as amended and restated, which is
attached as Exhibit A to this Proxy Statement.
As of April 23, there were 14,729,125 shares of Class A common stock
reserved for issuance under the 1997 Stock Incentive Plan, including 12,480,778
shares issuable upon exercise of CARs that were converted to options at the time
of Teligent's initial public offering ("Converted Options"). Shares issued
pursuant to the exercise or vesting of awards granted under the 1997 Stock
Incentive Plan may be new shares or treasury
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shares of Class A common stock. The 1997 Stock Incentive Plan provides that no
participant can receive awards thereunder (excluding Converted Options) that
relate to shares of Class A common stock which in the aggregate exceed 20% of
the total number of shares of Class A common stock authorized for issuance under
the 1997 Stock Incentive Plan.
The 1997 Stock Incentive Plan provides that the Board of Directors may
amend, suspend or terminate the 1997 Stock Incentive Plan at any time; provided,
however, that no amendment that requires stockholder approval under applicable
law in order for the 1997 Stock Incentive Plan to comply with Section 422 or
162(m) of the Internal Revenue Code of 1986 (the "Code"), or in order for the
plan to continue to comply with the rules and regulations of any exchange or
other trading market on which the shares of Class A common stock are traded,
will be effective unless the same will be approved by the requisite vote of
Teligent's shareholders.
The 1997 Stock Incentive Plan provides that it will be administered by the
Board of Directors; provided that the Board of Directors may establish one or
more committees which may, to the extent set forth in the resolutions
establishing such committee or committees, be authorized to grant awards under
the 1997 Stock Incentive Plan to, and administer such awards with respect to,
those participants who are subject to Section 16 of the Securities Exchange Act
of 1934 with respect to Teligent ("Section 16 Participants") or who are
executive officers of Teligent. Any such committee that is authorized to grant
awards to Section 16 Participants (a "Section 16 Committee") will, to the extent
necessary to comply with Rule 16b-3 promulgated under the Exchange Act, be
comprised of two or more "non-employee directors" within the meaning of such
Rule, and any such committee that is authorized to grant awards to executive
officers of Teligent (which may or may not be the same committee as the Section
16 Committee) will, to the extent necessary to comply with Section 162(m) of the
Code, be comprised of two or more "outside directors" within the meaning of such
Section. In the case of grants of awards to participants who are neither Section
16 Participants nor executive officers of Teligent, Teligent's Board of
Directors in its discretion may delegate to a committee or to members of
Teligent's management the authority, subject to such guidelines as Teligent's
Board of Directors may approve from time to time and to ratification by
Teligent's Board of Directors, to make grants of awards to, and administer such
awards with respect to, such participants. The Board of Directors will have the
authority, in its sole discretion, subject to and not inconsistent with the
express provisions of the Plan, to exercise all the powers and authority either
specifically granted to it under the Plan or necessary or advisable in
connection with the administration of the Plan. At present, the Compensation
Committee administers the 1997 Stock Incentive Plan. Teligent's Compensation
Committee members are Directors Myles Berkman, Tetsuro Mikami and Dr. Rajendra
Singh.
The 1997 Stock Incentive Plan provides for the granting of options intended
to be "incentive stock options" within the meaning of Section 422 of the Code
("ISOs") and options which do not qualify as ISOs (collectively, "Options").
SARs may be granted under the 1997 Stock Incentive Plan, either independently of
an Option or in tandem with an Option other than a Converted Option. The 1997
Stock Incentive Plan also provides for the grant of restricted stock awards,
which may be subject to such restrictions as the Compensation Committee in its
sole discretion may deem appropriate; such restrictions may include (without
limitation) achievement of certain performance goals relating to Teligent's
return on assets, return on equity or earnings per share.
Upon the exercise of any Option, the purchase price must be fully paid.
Such purchase price may be paid in cash (including without limitation cash
borrowed from Teligent), by delivery of Class A common stock equal in market
value to the exercise price, a combination thereof or, in the sole discretion of
the Compensation Committee, through a cashless exercise procedure. The 1997
Stock Incentive Plan provides that Teligent has the right to require a
participant to satisfy the tax withholding requirements arising with respect to
awards granted thereunder. Such obligation may be satisfied by a cash payment,
by authorizing Teligent to withhold form the shares of Class A common stock or
cash otherwise payable a number of shares or cash, as applicable, equal to such
obligation, or delivery of Class A common stock equal in market value to such
obligation.
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In the event of a "Change in Control" of Teligent (as defined in the 1997
Stock Incentive Plan), all Options under the 1997 Stock Incentive Plan will
become immediately exercisable in full and all restrictions with respect to
restricted stock awards will lapse.
WHAT IS THE VALUE OF THE BENEFITS THAT DIRECTORS, EXECUTIVE OFFICERS AND
EMPLOYEES CAN OBTAIN UNDER THE 1997 STOCK INCENTIVE PLAN?
Teligent cannot currently determine the number of shares of Class A common
stock subject to options that may be granted in the future to executive
officers, directors, employees and consultants under the 1997 Stock Incentive
Plan. The following table sets forth information with respect to the stock
options granted during the fiscal year that ended December 31, 1998 to the Named
Officers, all current directors, Named Officers as a group, all current
directors (excluding Named Officers) as a group, and all employees and
consultants (including all current officers who are not executive officers) as a
group under the 1997 Stock Incentive Plan. No additional stock options were
granted to the current directors or Named Officers prior to the date hereof.
NUMBER OF SHARES OF CLASS A COMMON STOCK
SUBJECT TO OPTIONS GRANTED
NAME AND PRINCIPAL POSITION UNDER THE 1997 STOCK INCENTIVE PLAN DURING FISCAL 1998
--------------------------- ------------------------------------------------------
Alex J. Mandl
Chairman of the Board and Chief Executive
Officer...................................... --
Kirby G. Pickle, Jr.
President and Chief Operating Officer........... --
Laurence E. Harris
Senior Vice President, General Counsel and
Assistant Secretary.......................... --
Abraham L. Morris
Senior Vice President, Chief Financial Officer
and Treasurer................................ --
Steven F. Bell
Senior Vice President for Human Resources....... --
Named Officers, as a group
(5 persons)..................................... --
Myles P. Berkman
Director........................................ --
David J. Berkman
Director........................................ --
William H. Berkman
Director........................................ --
Donald H. Jones
Director........................................ --
Rajendra Singh
Director........................................ --
Tetsuro Mikami
Director........................................ --
Current directors (excluding Named Officers), as a
group (6 persons)..................................... --
All employees and consultants, as a group
(1,455 persons)................................. 2,084,714
WHAT ARE THE FEDERAL TAX CONSEQUENCES OF THE 1997 STOCK INCENTIVE PLAN?
Options granted under the 1997 Stock Incentive Plan may be either
"incentive stock options" as defined in Section 422 of the Code, or nonstatutory
stock options.
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If an option granted under the 1997 Stock Incentive Plan is an incentive
stock option, under Federal tax laws the optionee will recognize no income upon
grant of the incentive stock option and incur no tax liability due to the
exercise unless the optionee is subject to the alternative minimum tax. Teligent
will not be allowed a deduction for Federal income tax purposes as a result of
the exercise of an incentive stock option regardless of the applicability of the
alternative minimum tax. Upon the sale or exchange of the shares at least two
years after grant of the incentive stock option and one year after receipt of
the shares by the optionee, any gain will be treated as long-term capital gain
under federal tax laws. If these holding periods are not satisfied, the optionee
will recognize ordinary income under Federal tax laws equal to the difference
between the exercise price and the lower of the fair market value of the stock
at the date of the option exercise or the sales price of the stock. Teligent
will be entitled to a deduction in the same amount as the ordinary income
recognized by the optionee. Any gain recognized on such a premature disposition
of the shares in excess of the amount treated as ordinary income will be
characterized under Federal tax laws as long-term capital gain if the sale
occurs more than one year after exercise of the option or as short-term capital
gain if the sale is made earlier. The current federal tax rate on long-term
capital is capped at 28 percent for shares held more than one year, but not more
than 18 months after exercise, and at 20 percent for shares held more than 18
months after exercise. Capital losses are allowed under Federal tax laws in full
against capital gains plus $3,000 on an annual basis of other income.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory stock options. An optionee will not recognize any
taxable income under Federal tax laws at the time he or she is granted a
nonstatutory stock option. However, upon its exercise, the optionee will
recognize ordinary income for Federal tax law purposes measured by the excess of
the then fair market value of the shares over the exercise price. In certain
circumstances, where the shares are subject to a substantial risk of forfeiture
when acquired or where the optionee is an officer, director or ten percent
shareholder of Teligent, the date of taxation under Federal tax laws may be
deferred unless the optionee files a timely election with the Internal Revenue
Service under section 83(b) of the Code. The income recognized by an optionee
who is also an employee of Teligent by payment in cash or out of the current
earnings paid to the optionee, any difference between the sale price and the
optionee's tax basis (exercise price plus the income recognized upon exercise)
will be treated under Federal tax laws as capital gain or loss, and will be
qualify for long-term capital gain or loss treatment if the shares have been
held for more than one year.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL
OF THE AMENDMENT TO THE 1997 STOCK INCENTIVE PLAN.
PROPOSAL III -- ADOPTION OF THE 1999 EMPLOYEE STOCK PURCHASE PLAN
At the annual meeting, shareholders will be asked to approve the Teligent,
Inc. 1999 Employee Stock Purchase Plan that gives employees the opportunity to
invest in shares of Class A common stock. The Board of Directors has adopted the
plan, subject to shareholder approval.
WHY IS THE 1999 EMPLOYEE STOCK PURCHASE PLAN BEING ADOPTED?
The 1999 Employee Stock Purchase Plan is designed to encourage employees to
increase their ownership interest in Teligent and to motivate them to exert
their maximum efforts toward the success of Teligent. The Board of Directors
believes that the approval of the 1999 Employee Stock Purchase Plan is in the
best interests of Teligent because it will provide an incentive for Teligent's
employees to increase their ownership in Teligent and will motivate them to
improve their performance and enhance shareholder value.
HOW DOES AN EMPLOYEE INVEST IN CLASS A COMMON STOCK UNDER THE 1999 EMPLOYEE
STOCK PURCHASE PLAN?
If approved by shareholders, the 1999 Employee Stock Purchase Plan will
provide to employees of Teligent and certain of its subsidiaries the opportunity
to invest from one percent (1%) to fifteen percent (15%) of their annual salary,
by means of payroll deductions, to purchase shares of Class A common stock
through the exercise of stock options granted by Teligent at a purchase price
equal to the lesser of (1) 85% of the fair market value of the Class A common
stock at the beginning of each semi-annual period (January and
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July) (each, an "Offering Date") and (2) 85% of the fair market value of the
Class A common stock at the end of each semi-annual period (December and June)
(each, an "Exercise Date"). Employees eligible to participate in the 1999
Employee Stock Purchase Plan will consist of all employees of Teligent and
certain of its subsidiaries ("Participants"), other than those who regularly
work twenty hours per week or less, work less than five months per year or who
own five percent (5%) or more of the voting securities of Teligent. As of April
23, 1999 there would be approximately 1,396 eligible Participants.
HOW MANY SHARES OF CLASS A COMMON STOCK WILL BE AVAILABLE UNDER THE 1999
EMPLOYEE STOCK PURCHASE PLAN?
The aggregate number of shares of Class A common stock which may be
purchased under the 1999 Employee Stock Purchase Plan is 300,000, subject to
adjustment in the event of stock dividends, stock splits, combinations of
shares, recapitalizations or other changes in the outstanding Class A common
stock. The source of shares under the 1999 Employee Stock Purchase Plan will be
authorized but unissued shares.
WHAT ARE THE MAIN FEATURES OF THE 1999 EMPLOYEE STOCK PURCHASE PLAN?
The following description of the main features of the 1999 Employee Stock
Purchase Plan is qualified in its entirety by reference to the full text of the
1999 Employee Stock Purchase Plan, which is attached as Exhibit B to this Proxy
Statement.
The 1999 Employee Stock Purchase Plan provides that the plan is to be
administered by a committee designated by the Board of Directors and comprised
of at least three directors, each of whom will be a "non-employee director"
within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934. The
Compensation Committee will administer the 1999 Employee Stock Purchase Plan.
Teligent's Compensation Committee members are Directors Myles Berkman, Tetsuro
Mikami and Dr. Rajendra Singh.
Participants will be granted stock options which permit them to purchase
shares of the Class A common stock under the 1999 Employee Stock Purchase Plan.
Participants will designate a percentage of their pay ranging from one percent
(1%) to a maximum of fifteen percent (15%) to be withheld on a regular basis in
order to purchase shares of the Class A common stock on a semi-annual basis
through the exercise of options granted under the 1999 Employee Stock Purchase
Plan ("Payroll Payments"). In order to be eligible to make Payroll Payments,
enrollment and payroll deduction forms must be filed by specified dates. Once
enrolled for Payroll Payments, a Participant will continue to be enrolled in pay
periods at the percentage of pay selected until the Participant either elects a
different rate by filing appropriate forms or terminates these Payroll Payments.
Under the 1999 Employee Stock Purchase Plan, during each calendar year no
Participant can purchase in excess of $25,000 worth of Class A common stock
(based on the fair market value of the Class A common stock at the time the
stock is purchased).
On a semi-annual basis, the administrator of the 1999 Employee Stock
Purchase Plan will credit to the account of a Participant the number of whole
shares of Class A common stock calculated by dividing the total amount of the
Participant's Payroll Payments during the Offering Period by the lesser of (i)
85% of the fair market value of the Class A common stock on the first business
day of the Offering Date and (ii) 85% of the fair market value of the Class A
common stock on the applicable Exercise Date. For purposes of the 1999 Employee
Stock Purchase Plan, the "fair market value" of the Class A common stock on a
particular day will be the last reported sale price (on that date) on the NASDAQ
National Market.
A Participant may withdraw Payroll Payments credited to the Participant's
account under the 1999 Employee Stock Purchase Plan if the amounts have not
already been used to purchase Class A common stock by giving written notice
prior to the next Exercise Date. The cash balance will then be paid to the
Participant and no further payroll deductions will be made from the
Participant's pay until the Participant re-enrolls in the 1999 Employee Stock
Purchase Plan and elects such payroll deductions.
Participants do not have the ability to assign or transfer their rights to
purchase Class A common stock under the 1999 Employee Stock Purchase Plan.
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In the event that the outstanding shares of Class A common stock have been
increased, decreased, changed into or been exchanged for a different number of
or kind of shares of Company securities through reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split or similar
transaction, the Compensation Committee may make appropriate adjustments to the
number and/or kind of shares which may be offered under the 1999 Employee Stock
Purchase Plan.
The Board of Directors has the authority to terminate or amend the 1999
Employee Stock Purchase Plan; provided, however, that the Board of Directors may
not (i) make any change in any option granted thereunder which adversely affects
the rights of any Participant or, (ii) without the approval of the shareholders
of Teligent, increase the maximum number of shares which may be issued under the
1999 Employee Stock Purchase Plan.
WHAT ARE THE FEDERAL TAX CONSEQUENCES OF THE 1999 EMPLOYEE STOCK PURCHASE PLAN?
The 1999 Employee Stock Purchase Plan is intended to qualify as an
"employee stock purchase plan" within the meaning of Section 423 of the Code. In
general, a Participant will not recognize ordinary compensation income upon the
exercise of an option granted under the 1999 Employee Stock Purchase Plan,
provided that the Participant holds the Class A common stock acquired upon
exercise for at least one year from the date of exercise and two years from the
date of grant (the "Holding Period"). Upon the disposition of the acquired Class
A common stock after the end of the Holding Period, the Participant will
recognize ordinary compensation income in an amount equal to the lesser of (i)
the excess of the fair market value of the Class A common stock upon disposition
over the exercise price thereof or (ii) the excess of the fair market value of
the Class A common stock at the time of grant over the exercise price thereof.
Any additional gain upon the sale of the acquired Class A common stock will be
long-term capital gain. If the Holding Period is satisfied by a Participant,
Teligent will not be entitled to a deduction for any income recognized by the
Participant pursuant to either the exercise of options granted under the 1999
Employee Stock Purchase Plan or the sale of the acquired Class A common stock.
If a Participant disposes of the Class A common stock acquired upon exercise of
the option prior to the end of the Holding Period, the Participant will
recognize ordinary compensation income in the year of the disqualifying
disposition in an amount equal to the difference between the exercise price and
the lower of (x) the fair market value of the Class A common tock on the
applicable Exercise Date or (y) the sales price of the Class A common stock, and
Teligent will be entitled to an income tax deduction equal to the amount of the
ordinary compensation income recognized by the Participant. Any additional gain
(or loss) on the sale of the Class A common stock by the Participant will be
taxed as short-term or long-term capital gain (or loss), as the case may be. If
the requirements of Section 423 of the Code are not satisfied upon the date of
an option's exercise, the Participant will recognize ordinary compensation
income equal to the difference between the fair market value of the Class A
common stock at exercise and the exercise price on the date of exercise, and
Teligent will be entitled to an income tax deduction equal to the amount of the
ordinary compensation income recognized by the Participant.
WHAT IS THE VALUE OF THE BENEFITS THAT PARTICIPANTS CAN OBTAIN UNDER THE 1999
EMPLOYEE STOCK PURCHASE PLAN?
Because participation in the 1999 Employee Stock Purchase Plan will vary
from employee to employee and levels of participation among Participants will
also vary, it is not possible to determine the value of benefits which may be
obtained by Participants and other employees under the 1999 Employee Stock
Purchase Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ADOPTION
OF THE 1999 EMPLOYEE STOCK PURCHASE PLAN.
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PROPOSAL IV -- RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has renewed Teligent's arrangement for Ernst & Young
LLP to be its independent auditors for the year ending December 31, 1999,
subject to the ratification of the appointment by shareholders. A representative
of Ernst & Young LLP is expected to attend the annual meeting to respond to
appropriate questions and will have an opportunity to make a statement if he or
she so desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS TELIGENT'S INDEPENDENT
AUDITORS FOR THE YEAR ENDING DECEMBER 31, 1999.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in Teligent's proxy materials for
next year's Annual Meeting of Shareholders, any shareholder proposal must be
received at Teligent's executive office at 8065 Leesburg Pike, Suite 400,
Vienna, Virginia 22182 on or before December 28, 1999. To be considered for
presentation at next year's annual meeting, although not included in the proxy
statement, any shareholder proposal must be received at Teligent's executive
office at the foregoing address on or before April 17, 2000, but not earlier
than March 19, 2000. In the event that the date of next year's annual meeting is
held before May 18, 2000 or after July 16, 2000, the shareholder proposal must
be received on or before the close of business on the 10th day following the day
on which notice of the date of the annual meeting was mailed or public
announcement of the date of such meeting was made, whichever occurs first.
All shareholder proposals for inclusion in Teligent's proxy materials will
be subject to the requirements of the proxy rules adopted under the Securities
Exchange Act of 1934 and, as with any shareholder proposal (regardless of
whether it is included in Teligent's proxy materials), Teligent's Certificate of
Incorporation, Bylaws and Delaware law.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
annual meeting other than the matters described above in this proxy statement.
However, if any other matters should properly come before the annual meeting, it
is intended that holders of the proxies will act in accordance with their best
judgment.
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EXHIBIT A
TELIGENT, INC.
1997 STOCK INCENTIVE PLAN
AS AMENDED AND RESTATED
1. Purpose.
The purpose of the Teligent, Inc. 1997 Stock Incentive Plan (the "Plan") is
to align the interests of officers, other employees, directors and consultants
of Teligent, Inc., a Delaware corporation ("Teligent") and its subsidiaries, now
held or hereafter acquired (collectively, the "Company"), with those of the
stockholders of Teligent; to attract, motivate and retain the best available
executive personnel and key employees of the Company by permitting them to
acquire an, or increase their, equity interest in Teligent; to reinforce
corporate, organizational and business-development goals; and to reward the
performance of individual officers and other employees in fulfilling their
personal responsibilities for long-range achievements.
2. Definitions.
The following terms, as used herein, shall have the following meanings:
(a) "Award" shall mean any Option (including Conversion Options), SAR or
Restricted Stock Award granted pursuant, or which is otherwise
subject, to the Plan.
(b) "Award Agreement" shall mean any written agreement, contract or other
instrument or document between Teligent and a Participant evidencing
an Award.
(c) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
promulgated under the Exchange Act.
(d) "Board" shall mean the Board of Directors of Teligent.
(e) "Change in Control" shall have the meaning set forth in Section 8(f)
hereof.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" shall mean the Compensation Committee or other committee
of the Board which, in accordance with Section 3 of the Plan, may be
authorized to grant Awards.
(h) "Company" shall have the meaning set forth in Section 1 hereof.
(i) "Conversion Options" shall mean the Options which result from the
conversion, in connection with the Initial Offering, of the Company
Appreciation Rights granted under that certain employment agreement,
dated as of September 1, 1996, by and between Teligent, L.L.C. and
Alex J. Mandl, and the Appreciation Units previously granted by
Teligent L.L.C. pursuant to its Long Term Incentive Compensation Plan.
(j) "Effective Date" shall have the meaning set forth in Section 8(k)
hereof.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" per share of Stock as of a particular date shall
mean (i) the average of the high and low sale price per share of Stock
(A) on the national securities exchange on which the Stock is
principally traded for the last preceding date on which there was a
sale of such Stock on such exchange or (B) if the Stock is not then
traded on a national securities exchange, on the NNM for the last
preceding date on which a sale of the Stock was reported on the NNM,
(ii) if the Stock is not then traded on a national securities exchange
and sales of the Stock are not then reported on the NNM, but the Stock
is then quoted on an over-the-counter market other than the NNM, the
average of the closing per share bid and asked prices for the Stock in
such over-the-counter market for the last preceding date on which such
prices were quoted in such market, (iii) if the shares of Stock are
not then traded on a national securities exchange, sales of the Stock
are not
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then reported on the NNM and the Stock is not then quoted on an
over-the-counter market other than the NNM, such value as the Board,
in its sole discretion, shall determine. Notwithstanding the
foregoing, with respect only to the exercise price of Options awarded
effective as of the date on which consummation of the Initial Offering
takes place, the Fair Market Value of the Stock as of such date shall
be the initial offering price of the Stock on such date.
(m) "Incentive Stock Option" shall mean an Option that meets the
requirements of Section 422 of the Code, or any successor provision,
and is designated by the Board as an Incentive Stock Option.
(n) "Initial Offering" shall mean the initial public offering by Teligent
of shares of Stock which is made pursuant to the terms of the
Securities Act of 1933, as amended.
(o) "NNM" shall mean the Nasdaq National Market.
(p) "Nonqualified Stock Option" shall mean an Option other than an
Incentive Stock Option.
(q) "Option" shall mean the right, granted pursuant to the Plan, of a
holder to purchase shares of Stock.
(r) "Participant" shall mean an officer, other employee, director or
consultant of the Company who is, pursuant to Section 4 of the Plan,
selected to participate in the Plan.
(s) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) Teligent or any
of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of Teligent or any of its
affiliates, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, (iv) a corporation owned,
directly or indirectly, by the stockholders of Teligent in
substantially the same proportions as their ownership of stock of
Teligent, or (v) The Associated Group, Inc. or any of its subsidiaries
or affiliates.
(t) "Plan" shall have the meaning set forth in Section 1 hereof.
(u) "Restricted Stock" shall mean any shares of Stock issued to a
Participant, without payment to Teligent, pursuant to Section 7 of the
Plan.
(v) "Restricted Stock Award Program" shall mean the program set forth in
Section 7 hereof.
(w) "SAR" shall mean a stock appreciation right granted to a Participant
under Section 6 of the Plan.
(x) "Section 16 Participant" shall have the meaning set forth in Section 3
hereof.
(y) "Stand-Alone SAR" shall mean a SAR which is not related to an Option.
(z) "Stock" shall mean shares of the Class A Common Stock, par value $.01
per share, of Teligent.
(aa) "Stock Option and SAR Program" shall mean the program set forth in
Section 6 hereof.
(bb) "Tandem SAR" shall mean a SAR which is granted in relation to an
Option.
(cc) "Teligent" shall have the meaning set forth in Paragraph 1 hereof.
(dd) "Ten Percent Stockholder" shall mean a Participant who, at the time an
Incentive Stock Option is to be granted to such Participant, owns
stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of Teligent.
3. Administration.
The Plan will be administered by the Board; provided that the Board may
establish one or more Committees which may, to the extent set forth in the
resolutions establishing such Committee or Committees, be authorized to grant
Awards to, and administer such Awards with respect to, those Participants who
are subject to Section 16 of the Exchange Act with respect to the Company
("Section 16 Participants") or who are executive officers of the Company. Any
such Committee that is authorized to grant Awards to Section 16
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Participants (a "Section 16 Committee") shall, to the extent necessary to comply
with Rule 16b-3 promulgated under the Exchange Act, be comprised of two or more
"non-employee directors" within the meaning of such Rule, and any such Committee
that is authorized to grant Awards to executive officers of the Company (which
may or may not be the same Committee as the Section 16 Committee) shall, to the
extent necessary to comply with Section 162(m) of the Code, be comprised of two
or more "outside directors" within the meaning of such Section. In the case of
grants of Awards to Participants who are neither Section 16 Participants nor
executive officers of the Company, the Board in its discretion may delegate to a
Committee or to members of the Company's management the authority, subject to
such guidelines as the Board may approve from time to time and to ratification
by the Board, to make grants of Awards to, and administer such Awards with
respect to, such Participants. The Board shall have the authority, in its sole
discretion, subject to and not inconsistent with the express provisions of the
Plan, to administer the Plan and to exercise all the powers and authority either
specifically granted to it under the Plan or necessary or advisable in
connection with the administration of the Plan, including, without limitation,
the authority to grant Awards; to determine the persons to whom and the time or
times at which Awards shall be granted; to determine the type and number of
Awards to be granted, the number of shares of Stock to which an Award may relate
and the terms, conditions, restrictions and performance criteria relating to any
Award; to determine whether, to what extent, and under what circumstances an
Award may be settled, cancelled, forfeited, exchanged, or surrendered or
accelerated or an Option or Options, Stand-Alone SAR or Stand-Alone SARs may be
repriced to a lower exercise price; to make adjustments in performance goals in
recognition of unusual or non-recurring events affecting Teligent or the
financial statements of Teligent, or in response to changes in applicable laws,
regulations, or accounting principles; to construe and interpret the Plan and
any Award; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of Award Agreements, consistent with
the terms and provisions of the Plan; and to make all other determinations
deemed necessary or advisable for the administration of the Plan, consistent
with the terms and provisions of the Plan. The Board shall keep minutes of its
meetings. To the extent that the Board has delegated any of its authority to one
or more Committees under this Section 3, any reference to the Board in the Plan
shall be interpreted to mean reference to the relevant Committee.
4. Eligibility.
Awards may be granted to officers, other employees, directors and
consultants of the Company in the sole discretion of the Board. In determining
the persons to whom Awards shall be granted and the type of Award, the Board
shall take into account such factors as the Board shall deem relevant in
connection with accomplishing the purposes of the Plan.
5. Stock Subject to the Plan; Limitation on Grants.
The maximum number of shares of Stock authorized and reserved for issuance
pursuant to the Plan shall be 18,729,125. All such shares of Stock shall be
subject to equitable adjustment as provided herein. Such shares may, in whole or
in part, be authorized but unissued shares or shares that shall have been or may
be reacquired by Teligent in the open market, in private transactions or
otherwise. If any shares subject to an Award are forfeited, cancelled, exchanged
or surrendered or if an Award otherwise terminates or expires without a
distribution of shares to the Participant, the shares of Stock with respect to
such Award shall, to the extent of any such forfeiture, cancellation, exchange,
surrender, termination or expiration, again be available for Awards under the
Plan. Upon the exercise of any Award granted in tandem with any other Awards,
such related Awards shall be cancelled to the extent of the number of shares of
Stock as to which the Award is exercised and, notwithstanding the foregoing,
such number of shares shall no longer be available for Awards under the Plan.
During the term of this Plan, no Participant can receive Awards, including
Options, Restricted Stock and SARs (but excluding Conversion Options), relating
to shares of Stock which in the aggregate exceed twenty percent (20%) of the
total number of shares of Stock authorized for issuance pursuant to the Plan, as
adjusted pursuant to the terms hereof.
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In the event that the Board shall determine that any dividend or other
distribution (whether in the form of cash, Stock or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan, then the Board shall make such equitable
changes or adjustments as it deems necessary or appropriate to any or all of (i)
the number and kind of shares of Stock which may thereafter be issued in
connection with Awards, (ii) the number and kind of shares of Stock issued or
issuable in respect of outstanding Awards, and (iii) the exercise price, grant
price, or purchase price relating to any Award; provided that, with respect to
Incentive Stock Options, such adjustment shall be made in accordance with
Section 424 of the Code.
6. Stock Option and SAR Program.
Each Option and SAR granted pursuant to this Section 6 shall be evidenced
by an Award Agreement, in such form and containing such terms and conditions as
the Board shall from time to time approve, which Award Agreement shall comply
with and be subject to the following terms and conditions, as applicable. Each
Conversion Option shall be governed by and subject to the terms of the Plan, as
well as the specific terms and provisions previously determined by the Board
with respect thereto, which terms and provisions shall be set forth in the Award
Agreement evidencing such Conversion Option.
(a) Stock Options.
(1) Number of Shares. Each Award Agreement shall state the number of
shares of Stock to which the Option relates.
(2) Type of Option. Each Award Agreement shall state that the Option
constitutes an Incentive Stock Option or a Nonqualified Stock Option.
(3) Option Price. Each Award Agreement shall state the Option price,
which, except for the Conversion Options and as provided in Section 6(c)(2)
below, shall not be less than one hundred percent (100%) of the Fair Market
Value of the shares of Stock covered by the Option on the date of grant.
The Option price shall be subject to adjustment as provided in Section 5
hereof. Unless otherwise expressly stated in the Board resolution expressly
granting an Option and except with respect to Options granted by members of
the Company's management pursuant to delegated authority as contemplated by
Section 3 of the Plan, the date as of which the Board adopts the resolution
expressly granting an Option shall be considered the day on which such
Option is granted.
(4) Method and Time of Payment. The Option price shall be paid in
full, at the time of exercise, in cash (including cash received from the
Company as compensation or cash borrowed from the Company), in shares of
Stock having a Fair Market Value equal to such Option price, in a
combination of cash and Stock or, in the sole discretion of the Board,
through a cashless exercise procedure, which may include an exercise
through a registered broker-dealer pursuant to procedures which are, from
time to time, deemed by the Board to be acceptable. Any shares of Stock
withheld upon exercise as payment of the purchase price under an Option
shall be valued at their Fair Market Value on the date of exercise.
(5) Term and Exercisability of Options. Each Award Agreement shall
provide that each Option shall become exercisable over a period determined
by the Board in its discretion, provided, that the Board shall have the
authority to accelerate the exercisability of any outstanding Option at
such time and under such circumstances as it, in its sole discretion, deems
appropriate. The exercise period shall be not more than ten (10) years from
the date of the grant of the Option, except as provided in Section 6(c)(2)
below, or such shorter period as is determined by the Board. The exercise
period shall be subject to earlier termination as provided in Section
6(a)(6) hereof. An Option may be exercised, as to any or all full shares of
Stock as to which the Option has become exercisable, by written notice
delivered in person or by mail to the Secretary of Teligent, specifying the
number of shares of Stock with respect to which the Option is being
exercised, together with payment in full of the Option price. For purposes
of the
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preceding sentence, the date of exercise will be deemed to be the date upon
which the Secretary of Teligent receives both the notification and the
payment.
(6) Termination. The Agreement evidencing the grant of each Award
shall set forth the terms and conditions applicable to such Award upon a
termination of an employee Participant's employment by the Company or the
termination of a consultant or director Participant's service with the
Company, which shall be as the Board may, in its discretion determine at
the time the Award is granted or thereafter.
(b) Stock Appreciation Rights. The Board shall have authority to grant
Stand-Alone SARs, and Tandem SARs with respect to all or some of the shares of
Stock covered by an Option. Stand-Alone SARs granted pursuant to this Section 6
shall be evidenced by an Award Agreement, in such form as the Board shall from
time to time approve, and the terms and conditions of such Awards shall be set
forth therein. A Tandem SAR shall, except as provided in this Section (6)(b), be
subject to the same terms and conditions as the related Option. Each Tandem SAR
granted pursuant to the Plan shall be reflected in the Award Agreement
evidencing the related Option.
(1) Time of Grant of Tandem SARs. A Tandem SAR may be granted either
at the time of grant, or at any time thereafter during the term of the
Option; provided, however, that Tandem SARs related to Incentive Stock
Options may only be granted at the time of grant of the related Option.
(2) SAR Price. Each Award Agreement shall state the price for a
Stand-Alone SAR, which shall not be less than one hundred percent (100%) of
the Fair Market Value of the shares of Stock covered by the Stand-Alone SAR
on the date of grant. The price for a Tandem SAR shall be set forth in the
Award Agreement evidencing the related Option.
(3) Payment. A SAR shall entitle the holder thereof, upon exercise of
the SAR or any portion thereof, to receive payment of an amount computed
pursuant to paragraph (5) below.
(4) Exercise. Each Award Agreement shall provide that each Stand-Alone
SAR shall become exercisable over a period determined by the Board in its
discretion, provided, that the Board shall have the authority to accelerate
the exercisability of any Stand-Alone SAR at such time and under such
circumstances as it, in its sole discretion, deems appropriate. The
exercise period shall be not more than ten (10) years from the date of the
grant of the Stand-Alone SAR or such shorter period as is determined by the
Board. The exercise period shall be subject to earlier termination as
provided in Section 6(b)(8) hereof.
A Tandem SAR shall be exercisable at such time or times and only
to the extent that the related Option is exercisable, and will not be
transferable except to the extent the related Option may be transferable. A
Tandem SAR granted in connection with an Incentive Stock Option shall be
exercisable only if the Fair Market Value of a share of Stock on the date
of exercise exceeds the purchase price specified in the related Incentive
Stock Option.
(5) Amount Payable. Upon the exercise of a SAR, the Participant shall
be entitled to receive an amount determined by multiplying (i) the excess
of the Fair Market Value of a share of Stock on the date of exercise of
such SAR over the price of the Stand-Alone SAR or the Option to which the
Tandem SAR relates, as appropriate, by (ii) the number of shares of Stock
as to which such SAR is being exercised. Notwithstanding the foregoing, the
Board may limit in any manner the amount payable with respect to any SAR by
including such a limit at the time it is granted.
(6) Treatment of Related Options and Tandem SARs Upon Exercise. Upon
the exercise of a Tandem SAR, the related Option shall be cancelled to the
extent of the number of shares of Stock as to which the Tandem SAR is
exercised (and will be deemed to have been exercised for purposes of
determining the number of shares available for the grant of Awards under
the Plan), and upon the exercise of an Option granted in connection with a
Tandem SAR, the Tandem SAR shall be cancelled to the extent of the number
of shares of Stock as to which the Option is exercised (and will be deemed
to have been exercised for purposes of determining the number of shares
available for the grant of Awards under the Plan).
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(7) Method of Exercise. SARs shall be exercised by a Participant only
by a written notice delivered in person or by mail to the Company,
Attention: Senior Vice President for Human Resources, specifying the number
of whole shares of Stock with respect to which the SAR is being exercised.
If requested by the Board, the Participant shall deliver the Award
Agreement evidencing the SAR and, if applicable, the related Option, which
Award Agreement shall be endorsed with a notation of such exercise and
returned to the Participant. For purposes of this paragraph (7), the date
of exercise will be deemed to be the date upon which the Company receives
such notification.
(8) Form of Payment. Payment of the amount determined under paragraph
(5) above may, in the sole discretion of the Board, be made solely in whole
shares of Stock in a number determined based upon their Fair Market Value
on the date of exercise of the SAR or, alternatively, in the sole
discretion of the Board, solely in cash, or in a combination of cash and
shares of Stock as the Board deems advisable. If the Board determines that
payment may be made solely in shares of Stock, and the amount payable
results in a fractional share, payment for the fractional share will be
made in cash.
(c) Incentive Stock Options. Options granted as Incentive Stock Options
shall be subject to the following special terms and conditions, in addition to
the general terms and conditions specified in this Section 6.
(1) Value of Shares. The aggregate Fair Market Value (determined as of
the date the Incentive Stock Option is granted) of the shares of Stock with
respect to which Incentive Stock Options granted under this Plan and all
other Plans of the Company become exercisable for the first time by each
Participant during any calendar year shall not exceed $100,000.
(2) Ten Percent Stockholder. In the case of an Incentive Stock Option
granted to a Ten Percent Stockholder, (x) the Option price shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the
shares of Stock on the date of grant of such Incentive Stock Option, and
(y) the exercise period shall not exceed five (5) years from the date of
grant of such Incentive Stock Option.
7. Restricted Stock Award Program.
Restricted Stock Awards granted pursuant to this Section 7 shall be
evidenced by an Award Agreement, in such form as the Board shall from time to
time approve, and the terms and conditions of such Awards shall be set forth
therein. At the time of the grant of a Restricted Stock Award, the Board may
impose such restrictions or conditions to the vesting of such Award as it, in
its sole discretion, deems appropriate. Such conditions to vesting may include
(without limitation), in the Board's sole discretion, the achievement of
performance goals which may be set forth in the Award Agreement. Such
performance goals may (without limitation) be based on an increase in the
trading price of Stock, achievement of certain goals relating to Teligent's
return on assets, return on equity, earnings per share, in each case, determined
in accordance with generally accepted accounting principles.
(a) Restrictions. Prior to the vesting of a share of Restricted Stock, such
share of Restricted Stock may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of descent and
distribution. Certificates for shares of Stock which may be issued pursuant to
Restricted Stock Awards shall bear an appropriate legend referring to such
restrictions, and any attempt to dispose of any such shares of Stock in
contravention of such restrictions shall be null and void and without effect.
(b) Forfeiture. Subject to such exceptions as may be determined by the
Board, if an employee Participant's continuous employment with the Company shall
terminate for any reason, or if a consultant or director Participant's service
with the Company shall terminate for any reason, any shares remaining subject to
restrictions shall thereupon be forfeited by the Participant and transferred to,
and reacquired by, Teligent at no cost to Teligent.
(c) Ownership. Except to the extent otherwise set forth in the Award
Agreement, a Participant who is granted a Restricted Stock Award shall possess
all incidents of ownership of such shares, subject to Section 7(a), including
the right to receive dividends with respect to such shares and to vote such
shares.
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8. General Provisions.
(a) Compliance with Legal Requirements. The Plan and the granting and
exercising of Awards, and the other obligations of Teligent under the Plan and
any Award Agreement or other agreement shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
regulatory or governmental agency as may be required. Teligent, in its
discretion, may postpone the issuance or delivery of Stock under any Award as
Teligent may consider appropriate and may require any Participant to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of Stock in compliance with applicable
laws, rules and regulations.
(b) Nontransferability. Awards shall not be transferable by a Participant
other than (i) gratuitous transfers by an officer of the Company who is the
holder of an Award to his or her immediate family members or to a trust for the
benefit of any such immediate family member or members, (ii) by will or the laws
of descent and distribution or, (iii) if then permitted by Rule 16b-3 under the
Exchange Act, pursuant to a Qualified Domestic Relations Order (as defined under
the Code or Title I of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder). Awards shall be exercisable during the
lifetime of a Participant only by such Participant or his guardian or legal
representative.
(c) No Right To Continued Employment. Nothing in the Plan or in any Award
granted or any Award Agreement or other agreement entered into pursuant hereto
shall confer upon any Participant the right to continue in the employ of the
Company or to continue service as a consultant or director of the Company or to
be entitled to any remuneration or benefits not set forth in the Plan or such
Award Agreement or other agreement or to interfere with or limit in any way the
right of the Company to terminate such employee Participant's employment or the
service of a consultant or director Participant.
(d) Withholding Taxes. Where a Participant or other person is entitled to
receive shares of Stock pursuant to the exercise of an Option or is otherwise
entitled to receive shares of Stock or cash pursuant to an Award hereunder,
Teligent shall have the right to require the Participant or such other person to
pay to Teligent the amount of any taxes which Teligent may be required to
withhold before delivery to such Participant or other person of cash or a
certificate or certificates representing such shares.
If a Participant makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any share or
shares of Stock issued to such Participant pursuant to the exercise of an
Incentive Stock Option within the two-year period commencing on the date
after the date of the grant or within the one-year period commencing on the
day after the date of transfer of such share or shares of Stock to the
Participant pursuant to such exercise, the Participant shall, within ten
(10) days of such disposition, notify the Company thereof, by delivery of
written notice to Teligent at its principal executive office.
Unless otherwise prohibited by the Board or by applicable law, a
Participant may satisfy any such withholding tax obligation by any of the
following methods, or by a combination of such methods: (a) tendering a
cash payment; (b) authorizing Teligent to withhold from the shares of Stock
or cash otherwise payable to such Participant (1) one or more of such
shares having an aggregate Fair Market Value, determined as of the date the
withholding tax obligation arises, less than or equal to the amount of the
total withholding tax obligation or (2) cash in an amount less than or
equal to the amount of the total withholding tax obligation; or (c)
delivering to Teligent previously acquired shares of Stock (none of which
shares may be subject to any claim, lien, security interest, community
property right or other right of spouses or present or former family
members, pledge, option, voting agreement or other restriction or
encumbrance of any nature whatsoever) having an aggregate Fair Market
Value, determined as of the date the withholding tax obligation arises,
less than or equal to the amount of the total withholding tax obligation.
(e) Amendment and Termination of the Plan. The Board may at any time and
from time to time alter, amend, suspend, or terminate the Plan in whole or in
part; provided that, no amendment which requires stockholder approval under
applicable law in order for the Plan to continue to comply with Section 422 or
162(m) of the Code or in order for the Plan to continue to comply with the rules
and regulations of any
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exchange or other trading market on which Teligent's shares of Stock are traded
shall be effective unless the same shall be approved by the requisite vote of
the stockholders of Teligent. Notwithstanding the foregoing, no amendment shall
affect adversely any of the rights of any Participant, without such
Participant's consent, under any Award theretofore granted under the Plan. The
power to grant Awards under the Plan will automatically terminate at the end of
the 2007 fiscal year. If the Plan is terminated, any unexercised Option or SAR
shall continue to be exercisable in accordance with its terms and the terms of
the Plan in effect immediately prior to such termination.
(f) Change in Control. Notwithstanding any other provision of the Plan to
the contrary, if, while any Awards remain outstanding under the Plan, a Change
in Control of Teligent (as defined in this Section 8(f)) shall occur, then
(unless otherwise provided in the applicable Award Agreement), (x) all Options
and SARs that are outstanding at the time of such Change in Control shall become
immediately exercisable in full and (y) all restrictions with respect to shares
of Restricted Stock shall lapse, and such shares shall be fully vested and
nonforfeitable.
For purposes of this paragraph 8(f), a "Change in Control" of Teligent
shall occur if:
(1) any person or entity, or group of affiliated persons or entities,
other than The Associated Group, Inc., a Delaware corporation, and
Telcom-DTS Investors, L.L.C., a Delaware limited liability company
(collectively, the "Original Shareholders") and/or their respective
affiliates acquires stock of the Company representing more than fifty
percent (50%) of the voting power of all such outstanding stock;
(2) the majority of the Board consists of persons who are designees of
any person or entity or group of affiliated persons or entities which hold
stock in the Company, other than the Original Shareholders and/or their
respective affiliates;
(3) the Company adopts a plan of liquidation providing for the
distribution of all or substantially all of its assets; or
(4) all or substantially all of the business enterprise of the Company
is disposed of pursuant to a sale of assets transaction or a merger,
consolidation or similar transaction in which the Company is not the
surviving entity (unless (A) no person or entity, or group of affiliated
persons or entities, other than the Original Shareholders and/or their
respective affiliates, owns immediately after such transaction stock or
other equity interests of the entity which succeeds to the business of the
Company as a result of such transaction representing more than fifty
percent (50%) of the voting power of all such outstanding stock, (B) a
majority of the board of directors (or comparable governing body) of the
entity which succeeds to the business of the Company as a result of such
transaction consists of persons (or persons designated by such persons) who
constituted a majority of the Board immediately prior to such transaction,
and (C) such successor entity assumes in writing the Company's obligations
under the Plan. For purposes of this definition, "affiliate" (or
derivations thereof) of any person or entity means any other person or
entity directly or indirectly controlling or controlled by or under direct
or indirect common control with such person or entity; and for purposes of
such definition, "control" when used with respect to any person or entity
means the power to direct the management and policies of such person or
entity, directly or indirectly, whether through the ownership of voting
securities or other equity interests, by contract or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
(g) Participant Rights. No Participant shall have any claim to be granted
any Award under the Plan, and there is no obligation for uniformity of treatment
for Participants. Except as provided specifically herein, a Participant or a
transferee of an Award shall have no rights as a stockholder with respect to any
shares of stock covered by any Award until the date of the issuance of a Stock
certificate to him for such shares.
(h) Unfunded Status of Awards. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of Teligent.
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(i) No Fractional Shares. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Award. The Board shall determine whether
cash, other Awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.
(j) Governing Law. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Delaware without
giving effect to the conflict of laws principles thereof.
(k) Effective Date. The Plan has previously been approved by the Board and
Teligent's sole stockholder. The Plan shall become effective on the effective
date of the Initial Offering (the "Effective Date"), and shall be of no force
and effect if the Initial Offering is not consummated.
(l) Beneficiary. A Participant may file with the Board a written
designation of a beneficiary on such form as may be prescribed by the Board and
may, from time to time, amend or revoke such designation. If no designated
beneficiary survives the Participant, the executor or administrator of the
Participant's estate shall be deemed to be the grantee's beneficiary.
(m) Interpretation. The Plan is designed and intended to comply with
Section 162(m) of the Code, and all provisions hereof shall be construed in a
manner to so comply.
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EXHIBIT B
TELIGENT, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Teligent, Inc. 1999 Employee Stock Purchase
Plan (the "Plan") is to provide employees of Teligent, Inc. (the "Company") and
its Designated Subsidiaries with an opportunity to acquire an interest in the
Company through the purchase of Class A Common Stock of the Company, $.01 par
value per share (the "Common Stock"), with accumulated payroll deductions. The
Company intends the Plan to qualify as an "employee stock purchase plan" within
the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"), and the provisions of the Plan shall be construed in a manner
consistent with the requirements of Section 423 of the Code.
2. Definitions.
a. "Authorization Form" shall mean a form supplied by and delivered to
the Company by a Participant in the form of Attachment A hereto authorizing
payroll deductions as set forth in Section 5 hereof and such other terms
and conditions as the Company from time to time may determine.
b. "Board" shall mean the Board of Directors of the Company.
c. "Committee" shall mean a committee of at least three members of the
Board appointed by the Board to administer the Plan and to perform the
functions set forth herein and who are "non-employee directors" within the
meaning of Rule 16b-3 as promulgated under Section 16 of the Securities
Exchange Act of 1934 (the "Exchange Act").
d. "Compensation" shall mean the base salary or wage (including
commissions) payable by the Company to an Employee, including an Employee's
portion of salary deferral contributions pursuant to Section 401(k) of the
Code and any amount excludable pursuant to Section 125 of the Code, but
excluding any bonus, fee, overtime pay, severance pay, or other special
emolument or any credit or benefit under any employee plan maintained by
the Company.
e. "Designated Subsidiaries" shall mean all Subsidiaries designated by
the Board from time to time, in its sole discretion, as eligible to
participate in the Plan.
f. "Eligible Employee", shall mean any Employee excluding: (i) any
Employee who is customarily scheduled to work 20 hours per week or less and
(ii) any Employee who customarily is employed for not more than five (5)
months in any calendar year.
g. "Employee" shall mean any person, including an officer, who is
regularly employed by the Company or one of its Designated Subsidiaries.
h. "Exercise Date" shall mean, with respect to each Offering Period,
the last business day prior to the next Offering Date in which payroll
deductions are made under the Plan.
i. "Fair Market Value" per share as of a particular date shall mean
the last reported sale price (on that date) of the Common Stock on The
Nasdaq National Market.
j. "Offering Date" shall mean the first business day of January and
July of each Plan Year, provided that the Committee shall have the power to
change the Offering Date.
k. "Offering Period" shall mean a period of time during the
effectiveness of the Plan, commencing on each Offering Date and ending on
the Exercise Date thereof.
l. "Participant" shall mean an Employee who participates in the Plan.
m. "Plan Year" shall mean, for the first year the period beginning on
July 1, 1999 and ending on December 31, 1999, and for each year thereafter
shall mean the period beginning on January 1 and ending on December 31.
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n. "Subsidiary" shall mean any corporation, if any, having the
relationship to the Company described in Section 424(f) of the Code.
3. Eligibility and Participation.
a. Any person who is an Eligible Employee on an Offering Date shall be
eligible to become a Participant in the Plan beginning on that Offering
Date and shall become a Participant as of that Offering Date by completing
an Authorization Form and filing it with the Company by the date required
by the Company. Such authorization will remain in effect for subsequent
Offering Periods, until modified or terminated by the Participant.
b. Any person who first becomes an Eligible Employee during an
Offering Period shall be eligible to become a Participant in the Plan as of
the first day of the Offering Date beginning after the date on which that
person became an Eligible Employee and shall become a Participant as of
such date by completing an Authorization Form and filing it with the
Company by the date required by the Company. Such authorization will remain
in effect for subsequent Offering Periods, until modified or terminated by
the Participant.
c. A person shall cease to be a Participant upon the earliest to occur
of:
i) the date the Participant ceases to be an Eligible Employee, for
any reason;
ii) the first day of the Offering Period beginning after the date
on which the Participant ceases payroll deductions under the Plan; or
iii) the date of a withdrawal from the Plan by the Participant.
4. Grant of Option.
a. On each Offering Date the Company shall grant each Eligible
Employee an option to purchase shares of Common Stock, subject to the
limitations set forth in Sections 3.b, 3.c and 10 hereof.
b. The option price per share of the Common Stock subject to an
offering shall be the lesser of: (i) eighty-five percent (85%) of the Fair
Market Value of a share of Common Stock on the Offering Date or (ii)
eighty-five percent (85%) of the Fair Market Value of a share of Common
Stock on the Exercise Date.
c. No Participant shall be granted an option which permits his rights
to purchase Common Stock under all employee stock purchase plans of the
Company to accrue at a rate which exceeds $25,000 of the Fair Market Value
of the Common Stock (determined at the time the option is granted) for each
calendar year in which such stock option is outstanding at any time.
d. No Participant may be granted an option if, upon such grant, such
Participant would own immediately after the grant of an option under the
Plan and applying the rules of Section 424(d) of the Code in determining
stock ownership shares, and/or hold outstanding options to purchase shares,
possessing five percent (5%) or more of the total combined voting power or
value of all classes of shares of the Company.
5. Payroll Deductions.
a. A Participant may, in accordance with rules adopted by the
Committee, submit an Authorization Form that authorizes a payroll deduction
of any whole percentage from one (1) percent to fifteen (15) percent of
such Participant's Compensation (not to exceed the $25,000 limit set forth
in 4(c) above) on each pay period during the Offering Period. A Participant
may increase or decrease such payroll deduction (including a cessation of
payroll deductions) effective as of the start of the next Offering Period,
provided the Employee files with the Company the Authorization Form
requesting such change by the date required by the Company.
b. All payroll deductions made by a Participant shall be credited to
such Participant's account under the Plan. A Participant may not make any
additional payments into such account.
B-2
39
6. Exercise of Option.
a. Unless a Participant withdraws from the Plan as provided in Section
8 hereof, such Participant's election to purchase shares will be exercised
automatically on the Exercise Date, and the maximum number of full shares
subject to such option will be purchased for such Participant at the
applicable option price with the accumulated payroll deductions and cash
dividends (credited pursuant to Section 9 hereof) in such Participant's
account. During a Participant's lifetime, his or her option to purchase
shares hereunder is exercisable only by such Participant.
b. Any cash balance remaining in a Participant's account after the
termination of an Offering Period will be carried forward to the
Participant's account for the purchase of Common Stock during the next
Offering Period if the Participant has elected to continue to participate
in the Plan. Otherwise, the Participant will receive a cash payment equal
to the balance of his or her account as soon as administratively feasible.
c. The shares of Common Stock purchased upon exercise of an option
hereunder shall be credited to the Participant's account under the Plan and
shall be deemed to be transferred to the Participant on the Exercise Date
and, except as otherwise provided herein, the Participant shall have all
rights of a stockholder with respect to such shares.
7. Delivery of Common Stock. As promptly as practicable after receipt by
the Committee of a written request for withdrawal of Common Stock from any
Participant, the Company shall arrange the delivery to such Participant of a
stock certificate representing the shares of Common Stock which the Participant
requests to withdraw. Withdrawals may be made no more frequently than twice each
Plan Year unless approved by the Committee in its sole discretion. Shares of
Common Stock received upon stock dividends or stock splits shall be treated as
having been purchased on the Exercise Date of the shares to which they relate.
8. Withdrawal; Termination of Employment.
a. A Participant may withdraw all, but not less than all, the payroll
deductions and cash dividends credited to such Participant's account (that
have not been used to purchase shares of Common Stock) under the Plan at
any time by giving written notice to the Company received prior to the
Exercise Date. All such payroll deductions and cash dividends credited to
such Participant's account will be paid to such Participant promptly after
receipt of such Participant's notice of withdrawal and such Participant's
option for the Offering Period in which the withdrawal occurs will be
automatically terminated. No further payroll deductions for the purchase of
shares of Common Stock will be made for such Participant during such
Offering Period, and any additional cash dividends during the Offering
Period will be distributed to the Participant.
b. Upon termination of a Participant's status as an Employee during an
Offering Period for any reason, including voluntary or involuntary
termination, retirement or death, the payroll deductions and cash dividends
credited to such Participant's account that have not been used to purchase
shares of Common Stock will be returned (and any future cash dividends will
be distributed) to such Participant or, in the case of such Participant's
death, to the person or persons entitled thereto under Section 12 hereof,
and such Participant's option will be automatically terminated. A
Participant's status as an Employee shall not be considered terminated in
the case of a leave of absence agreed to in writing by the Company
(including, but not limited to, military and sick leave), provided that
such leave is for a period of not more than ninety (90) days or
reemployment upon expiration of such leave is guaranteed by contract or
statute.
c. A Participant's withdrawal from an offering will make that
Participant ineligible to participate in the next succeeding Offering
Period.
9. Dividends.
a. Cash dividends paid on Common Stock held in a Participant's account
shall be credited to such Participant's account and used in addition to
payroll deductions to purchase shares of Common Stock on the Exercise Date.
Dividends paid in Common Stock or stock splits of the Common Stock shall be
B-3
40
credited to the accounts of Participants. Dividends paid in property other
than cash or Common Stock shall be distributed to Participants as soon as
practicable.
b. No interest shall accrue on or be payable with respect to the
payroll deductions or credited cash dividends of a Participant in the Plan.
10. Stock.
a. The maximum number of shares of Common Stock which shall be
reserved for sale under the Plan shall be 300,000, subject to adjustment
upon the occurrence of an event as provided in Section 15 hereof. If the
total number of shares which would otherwise be subject to options granted
pursuant to Section 4.a. hereof on an Offering Date exceeds the number of
shares then available under the Plan (after deduction of all shares for
which options have been exercised or are then outstanding), the Committee
shall make a pro rata allocation of the shares remaining available for
option grant in as uniform a manner as shall be practicable and as it shall
determine to be equitable. In such event, the Committee shall give written
notice to each Participant of such reduction of the number of option shares
affected thereby and shall similarly reduce the rate of payroll deductions,
if necessary.
b. Shares of Common Stock to be delivered to a Participant under the
Plan will be registered in the name of the Participant or, at the election
of the Participant, in the name of the Participant and another person as
joint tenants with rights of survivorship.
11. Administration. The Plan shall be administered by the Committee, and
the Committee may select an administrator to whom its duties and
responsibilities hereunder may be delegated. The Committee shall have full power
and authority, subject to the provisions of the Plan, to promulgate such rules
and regulations as it deems necessary for the proper administration of the Plan,
to interpret the provisions and supervise the administration of the Plan, and to
take all action in connection therewith or in relation thereto as it deems
necessary or advisable. Any decision reduced to writing and signed by a majority
of the members of the Committee shall be fully effective as if it had been made
at a meeting duly held. The Company will pay all expenses incurred in the
administration of the Plan. No member of the Committee shall be personally
liable for any action, determination, or interpretation made in good faith with
respect to the Plan, and all members of the Committee shall be fully indemnified
by the Company with respect to any such action, determination or interpretation.
12. Designation of Beneficiary.
a. A Participant may file, on forms supplied by and delivered to the
Company, a written designation of a beneficiary who is to receive any
shares and cash in the event of the Participant's death.
b. Such designation of beneficiary may be changed by the Participant
at any time by written notice. In the event of the death of a Participant
and in the absence of a beneficiary validly designated under the Plan who
is living at the time of such Participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the
estate of the Participant or, if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may delivery such shares and/or cash to the spouse or to any
one or more dependents or relatives of the Participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as
the Company may designate.
13. Transferability. Neither payroll deductions credited to a Participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and distribution
or as provided in Section 12 hereof) by the Participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 8 hereof.
14. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
B-4
41
15. Effect of Certain Changes. In the event of any increase, reduction, or
change or exchange of shares of Common Stock for a different number or kind of
shares or other securities of the Company by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, stock dividend, stock
split or reverse stock split, combination or exchange of shares, repurchase of
shares, change in corporate structure, distribution of an extraordinary dividend
or otherwise, the Committee shall conclusively determine the appropriate
equitable adjustments, if any, to be made under the Plan, including without
limitation adjustments to the number of shares of Common Stock which have been
authorized for issuance under the Plan but have not yet been placed under
option, as well as the price per share of Common Stock covered by each option
under the Plan which has not yet been exercised.
16. Amendment or Termination. The Board may at any time terminate or amend
the Plan. Except as provided in Section 15 hereof, no such termination can
adversely affect options previously granted and no amendment may make any change
in any option theretofore granted which adversely affects the rights of any
Participant. No amendment shall be effective unless approved by the stockholders
of the Company if stockholder approval of such amendment is required to comply
with any law, regulation or stock exchange rule.
17. Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
18. Regulations and other Approvals; Governing Law.
a. This Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of
Delaware applicable to contracts made and to be performed in such State.
b. The obligation of the Company to sell or deliver shares of Common
Stock with respect to options granted under the Plan shall be subject to
all applicable laws, rules and regulations, including all applicable
Federal and state securities laws, and the obtaining of all such approvals
by governmental agencies as may be deemed necessary or appropriate by the
Committee.
c. The Plan is intended to comply with Rule 16b-3 as promulgated under
Section 16 of the Exchange Act and the Committee shall interpret and
administer the provisions of the Plan in a manner consistent therewith. Any
provisions inconsistent with such Rule shall be inoperative and shall not
affect the validity of the Plan.
19. Withholding of Taxes. If the Participant makes a disposition, within
the meaning of Section 424(c) of the Code and regulations promulgated
thereunder, of any share or shares issued to such Participant pursuant to such
Participant's exercise of an option, and such disposition occurs within the
two-year period commencing on the day after the Offering Date or within the
one-year period commencing on the day after the Exercise Date, such Participant
shall, within five (5) days of such disposition, notify the Company thereof and
thereafter immediately deliver to the Company any amount of Federal, state or
local income taxes and other amounts which the Company informs the Participant
the Company is required to withhold.
20. Effective Date; Approval of Stockholders. The Plan is effective as of
July 1, 1999. The Plan shall be submitted to the stockholders of the Company for
their approval at the next stockholder meeting. The Plan is conditioned upon the
approval of the stockholders of the Company, and failure to receive their
approval shall render the Plan void and of no effect.
B-5
42
ATTACHMENT A
TELIGENT, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
AUTHORIZATION FORM
I, , acknowledge receipt of a copy of the
Teligent, Inc. 1999 Employee Stock Purchase Plan (the "Plan"), and agree to the
terms thereunder.
I elect:
(a) ________ to commence or to continue participation in the Plan,
and effective as of the Offering Date(1) which next commences
after the date hereof, I elect to have ____% (write in any whole
number from 1 to 10, inclusive) of my weekly Compensation
deducted by the Company for the purchase of Common Stock on each
subsequent Exercise Date until I have submitted another form
revoking this authorization or modifying it.
(b) ____ to cease participation in the Plan as of the date hereof.
I further elect:
(a) ____ to have all shares of Common Stock to be delivered to me
hereunder to be registered in my name.
(b) ____ to have all shares of Common Stock to be delivered to me
hereunder to be registered in my name and that of ____________ as
joint tenants with right of survivorship.
Name:
---------------------------------
Date:
---------------------------------
- ---------------
(1)All capitalized terms not otherwise defined in this Authorization Form shall
have the meaning ascribed to them in the Plan.
43
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
REVOCABLE PROXY
TELIGENT, INC.
ANNUAL MEETING OF SHAREHOLDERS - JUNE 16, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TELIGENT, INC.
The undersigned hereby appoints Laurence E. Harris and Scott G. Bruce, with
full power of substitution, and authorizes them to represent and vote, as
designated below and in accordance with their judgment upon any other matters
properly presented at the annual meeting, all the shares of Class A common
stock held of record by the undersigned at the close of business on April 23,
1999, at the Annual Meeting of Shareholders, to be held on Wednesday, June 16,
1999 and or at any and all adjournments thereof.
The Board of Directors recommends a vote "FOR" the election of the Class A
common stock nominee, Alex J. Mandl, as a director of Teligent and "FOR" each
of the other proposals set forth below.
FOR WITHHOLD
--- --------
I. The election of ALEX J. MANDL as a director for a one year term. [ ] [ ]
FOR AGAINST ABSTAIN
--- ------- -------
II. Approval of an amendment to the Teligent, Inc. 1997 Stock Option [ ] [ ] [ ]
and Incentive Plan to increase the number of shares of Class A
common stock reserved for issuance thereunder by 4,000,000 shares.
III. Adoption of the Teligent, Inc. 1999 Employee Stock Purchase Plan. [ ] [ ] [ ]
IV. The ratification of the appointment of Ernst & Young LLP as Teligent's [ ] [ ] [ ]
independent auditors for the fiscal year ending December 31, 1999.
44
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH OF THE PROPOSALS SET FORTH HEREIN.
The undersigned acknowledges receipt, prior to the execution of this Proxy, of
Notice of the Annual Meeting of Shareholders, a Proxy Statement dated April 30,
1999 and Teligent's Annual Report to Shareholders for the fiscal year ended
December 31, 1998.
[ ] Check here if you plan to attend the Annual Meeting.
Dated: ______________________________________________
- ------------------------------------------------------ ------------------------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------------------------------ ------------------------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ABOVE ON THIS CARD. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE. IF SHARES ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN.
- --------------------------------------------------------------------------------
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE
- --------------------------------------------------------------------------------
45
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
REVOCABLE PROXY
TELIGENT, INC.
ANNUAL MEETING OF SHAREHOLDERS - JUNE 16, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TELIGENT, INC.
The undersigned hereby appoints Laurence E. Harris and Scott G. Bruce, with
full power of substitution, and authorizes them to represent and vote, as
designated below and in accordance with their judgment upon any other matters
properly presented at the annual meeting, all the shares of Series 1, Class B
common stock held of record by the undersigned at the close of business on
April 23, 1999, at the Annual Meeting of Shareholders, to be held on Wednesday,
June 16, 1999 and or at any and all adjournments thereof.
The Board of Directors recommends a vote "FOR" the election of the Class A
common stock nominee, Alex J. Mandl, as a director of Teligent and "FOR" each
of the other proposals set forth below.
FOR WITHHOLD
--- --------
I. Election of Directors
ALEX J. MANDL [ ] [ ]
MYLES J. BERKMAN [ ] [ ]
DAVID H. BERKMAN [ ] [ ]
WILLIAM H. BERKMAN [ ] [ ]
DONALD H. JONES [ ] [ ]
FOR AGAINST ABSTAIN
--- ------- -------
II. Approval of an amendment to the Teligent, Inc. 1997 Stock Option [ ] [ ] [ ]
and Incentive Plan to increase the number of shares of Class A
common stock reserved for issuance thereunder by 4,000,000 shares.
III. Adoption of the Teligent, Inc. 1999 Employee Stock Purchase Plan. [ ] [ ] [ ]
IV. The ratification of the appointment of Ernst &Young LLP as Teligent's [ ] [ ] [ ]
independent auditors for the fiscal year ending December 31, 1999.
46
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH OF THE PROPOSALS SET FORTH HEREIN.
The undersigned acknowledges receipt, prior to the execution of this Proxy, of
Notice of the Annual Meeting of Shareholders, a Proxy Statement dated April 30,
1999 and Teligent's Annual Report to Shareholders for the fiscal year ended
December 31, 1998.
Dated: ______________________________________________
- ------------------------------------------------------ ------------------------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------------------------------ ------------------------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ABOVE ON THIS CARD. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE. IF SHARES ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN.
- --------------------------------------------------------------------------------
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE
- --------------------------------------------------------------------------------
47
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
REVOCABLE PROXY
TELIGENT, INC.
ANNUAL MEETING OF SHAREHOLDERS - JUNE 16, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TELIGENT, INC.
The undersigned hereby appoints Laurence E. Harris and Scott G. Bruce, with full
power of substitution, and authorizes them to represent and vote, as designated
below and in accordance with their judgment upon any other matters properly
presented at the annual meeting, all the shares of Series 2, Class B common
stock held of record by the undersigned at the close of business on April 23,
1999, at the Annual Meeting of Shareholders, to be held on Wednesday, June 16,
1999 and or at any and all adjournments thereof.
The Board of Directors recommends a vote "FOR" the election of the Class A
common stock nominee, Alex J. Mandl, as a director of Teligent and "FOR" each of
the other proposals set forth below.
FOR WITHHOLD
--- --------
I. Election of Directors
ALEX J. MANDL [ ] [ ]
RAJENDRA SINGH [ ] [ ]
FOR AGAINST ABSTAIN
--- ------- -------
II. Approval of an amendment to the Teligent, Inc. 1997 Stock Option [ ] [ ] [ ]
and Incentive Plan to increase the number of shares of Class A
common stock reserved for issuance thereunder by 4,000,000 shares.
III. Adoption of the Teligent, Inc. 1999 Employee Stock Purchase Plan. [ ] [ ] [ ]
IV. The ratification of the appointment of Ernst & Young LLP as Teligent's [ ] [ ] [ ]
independent auditors for the fiscal year ending December 31, 1999.
48
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH OF THE PROPOSALS SET FORTH HEREIN.
The undersigned acknowledges receipt, prior to the execution of this Proxy, of
Notice of the Annual Meeting of Shareholders, a Proxy Statement dated April 30,
1999 and Teligent's Annual Report to Shareholders for the fiscal year ended
December 31, 1998.
Dated: ______________________________________________
- ------------------------------------------------------ ------------------------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------------------------------ ------------------------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ABOVE ON THIS CARD. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE. IF SHARES ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN.
- --------------------------------------------------------------------------------
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND
MAIL THIS PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
- --------------------------------------------------------------------------------
49
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
REVOCABLE PROXY
TELIGENT, INC.
ANNUAL MEETING OF SHAREHOLDERS - JUNE 16, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TELIGENT, INC.
The undersigned hereby appoints Laurence E. Harris and Scott G. Bruce, with full
power of substitution, and authorizes them to represent and vote, as designated
below and in accordance with their judgment upon any other matters properly
presented at the annual meeting, all the shares of Series 3, Class B common
stock held of record by the undersigned at the close of business on April 23,
1999, at the Annual Meeting of Shareholders, to be held on Wednesday, June 16,
1999 and or at any and all adjournments thereof.
The Board of Directors recommends a vote "FOR" the election of the Class A
common stock nominee, Alex J. Mandl, as a director of Teligent and "FOR" each of
the other proposals set forth below.
FOR WITHHOLD
--- --------
I. Election of Directors
ALEX J. MANDL [ ] [ ]
TETSURO MIKAMI [ ] [ ]
FOR AGAINST ABSTAIN
--- ------- -------
II. Approval of an amendment to the Teligent, Inc. 1997 Stock Option [ ] [ ] [ ]
and Incentive Plan to increase the number of shares of Class A
common stock reserved for issuance thereunder by 4,000,000 shares.
III. Adoption of the Teligent, Inc. 1999 Employee Stock Purchase Plan. [ ] [ ] [ ]
IV. The ratification of the appointment of Ernst & Young LLP as Teligent's [ ] [ ] [ ]
independent auditors for the fiscal year ending December 31, 1999.
50
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH OF THE PROPOSALS SET FORTH HEREIN.
The undersigned acknowledges receipt, prior to the execution of this Proxy, of
Notice of the Annual Meeting of Shareholders, a Proxy Statement dated April 30,
1999 and Teligent's Annual Report to Shareholders for the fiscal year ended
December 31, 1998.
Dated: ______________________________________________
- ------------------------------------------------------ ------------------------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------------------------------ ------------------------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ABOVE ON THIS CARD. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE. IF SHARES ARE HELD JOINTLY, EACH HOLDER SHOULD SIGN.
- --------------------------------------------------------------------------------
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND
MAIL THIS PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
- --------------------------------------------------------------------------------