PLD Telekom Inc – ‘DEF 14A’ for 8/13/98

As of:  Wednesday, 7/22/98   ·   For:  8/13/98   ·   Accession #:  893220-98-1242   ·   File #:  0-20444

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Definitive Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement Pld Telekom Inc.           66    347K 

Document Table of Contents

DEF 14A
1st Page of 66
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
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  

Filed by the Registrant [x]                                           

Filed by a Party other than the Registrant [ ]                        

Check the appropriate box:                                            

 [ ] Preliminary Proxy Statement        [ ] Confidential, for Use of the
                                                Commission Only (as permitted by
                                 Rule 14a-6(e)(2))
[X] Definitive Proxy Statement                                        

[ ] Definitive Additional Materials                                   

[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12     

PLD TELEKOM INC.    
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant) 

Payment of Filing Fee (Check the appropriate box):                              

[ ] No fee required.                                                  

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.                                                         

(1) Title of each class of securities to which transaction applies:   

--------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:      

--------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed  
       pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):    

--------------------------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:                  

--------------------------------------------------------------------------------

(5) Total fee paid:                                                   

--------------------------------------------------------------------------------

[x] Fee paid previously with preliminary materials.                   

    [ ] Check box if any part of the fee is offset as provided by Exchange Act
      Rule 0-11(a)(2) and identify the filing for which the offsetting fee
   was paid previously. Identify the previous filing by registration
       statement number, or the form or schedule and the date of its filing.

(1) Amount previously paid:                                           

--------------------------------------------------------------------------------

(2) Form, schedule or registration statement no.:                     

--------------------------------------------------------------------------------

(3) Filing party:                                                     

--------------------------------------------------------------------------------

(4) Date filed:                                                       

--------------------------------------------------------------------------------

DEF 14A
2nd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 2nd

PLD TELEKOM INC.
680 Fifth Avenue
24th Floor
New York, New York 10019
------------------------

NOTICE OF SPECIAL AND ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON 
August 13, 1998 
------------------------

TO THE STOCKHOLDERS OF                                                          
PLD TELEKOM INC.:                                                               

Notice is hereby given that a combined Special and Annual Meeting (the
"Meeting") of the stockholders of PLD Telekom Inc. (the "Company") will be held 
at the offices of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New   
York 10178 on August 13, 1998, at 10:00 a.m., local time, for the following     
purposes:                                                                       

        1. To consider and vote upon a proposal to approve an Asset Exchange
   Agreement, dated April 19, 1998 (the "Asset Exchange Agreement"), between
  the Company and News America Incorporated, subsequently assigned by News
   America Incorporated to NewsPLD LLC (together, "News"), providing for the
   acquisition by the Company from News of 100% of the outstanding shares in
   PLD Holdings Limited, in exchange for the issuance of 3,826,041 shares of
 Common Stock of the Company, and the transactions contemplated thereby;

2. To elect ten directors; and                              

      3. To transact such other business as may properly come before the
Meeting or any adjournments thereof.                                  

THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE ASSET EXCHANGE 
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND RECOMMENDS THAT THE     
COMPANY'S STOCKHOLDERS VOTE TO APPROVE THE ASSET EXCHANGE AGREEMENT AND THE     
TRANSACTIONS CONTEMPLATED THEREBY.                                              

  Only stockholders of record as of the close of business on June 15, 1998
will be entitled to notice of the Meeting and to vote at the Meeting and any    
adjournments thereof. A list of stockholders of the Company as of the close of  
business on June 15, 1998 will be available for inspection during normal        
business hours for ten days prior to the Meeting at the Company's executive     
offices at 680 Fifth Avenue, 24th Floor, New York, New York.                    

                                       By order of the Board of Directors,

                   JAMES R.S. HATT
                           Chairman, President and
                               Chief Executive Officer

New York, New York                                                              
July 22, 1998                                                                   

EACH STOCKHOLDER IS URGED TO COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD
IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED 
STATES. IF A STOCKHOLDER DECIDES TO ATTEND THE MEETING, HE OR SHE MAY, IF SO
DESIRED, REVOKE THE PROXY AND VOTE THE SHARES IN PERSON.

DEF 14A
3rd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 3rd

PLD TELEKOM INC.
680 FIFTH AVENUE
24TH FLOOR
NEW YORK, NEW YORK 10019
------------------------

PROXY STATEMENT 
FOR 
SPECIAL AND ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON 
AUGUST 13, 1998 
------------------------

     This proxy statement and the accompanying form of proxy are being mailed on
or about July 22, 1998, to the stockholders of PLD Telekom Inc. ("PLD" or the   
"Company"). These materials are being furnished in connection with the          
solicitation by the Board of Directors of the Company (the "Board") of proxies  
to be voted at a combined Special and Annual Meeting of Stockholders (the       
"Meeting") to be held at the offices of Morgan, Lewis & Bockius LLP, 101 Park   
Avenue, New York, New York 10178 on August 13, 1998, at 10:00 a.m., local time, 
and at any adjournments thereof.                                                

   At the Meeting, the stockholders of record of the common stock, par value
$0.01 per share, of the Company (the "Common Stock") as of the close of business
on June 15, 1998 (the "Record Date") will consider and vote upon proposals: (i) 
to approve an Asset Exchange Agreement, dated April 19, 1998 (the "Asset        
Exchange Agreement"), between the Company and News America Incorporated,        
subsequently assigned by News America Incorporated to NewsPLD LLC (together,    
"News"), providing for the acquisition by the Company from News of 100% of the  
outstanding shares in PLD Holdings Limited, in exchange for the issuance of     
3,826,041 shares of Common Stock (the "Exchange Shares"), and the transactions  
contemplated thereby (such transactions being referred to herein collectively as
the "Asset Exchange"); (ii) to elect ten directors to the Board; and (iii) to   
transact such other business as may properly come before the Meeting or any     
adjournments thereof.                                                           

    The Asset Exchange Agreement and the transactions contemplated thereby are
complex and are discussed in detail in this Proxy Statement. Stockholders are   
strongly encouraged to read carefully and consider this Proxy Statement in its  
entirety.                                                                       

DEF 14A
4th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 4th

AVAILABLE INFORMATION 

    The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance        
therewith files reports and other information with the Securities and Exchange  
Commission (the "Commission"). These reports and other information can be       
inspected and copied at the public reference facilities maintained by the       
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,   
D.C. 20549, and at the following Regional Offices of the Commission: Seven World
Trade Center, New York, New York 10048, and Northwestern Atrium Center, 800 West
Madison Street, Chicago, Illinois 60661. Copies of such material can also be    
obtained from the Public Reference Section of the Commission, 450 Fifth Street, 
N.W., Washington, D.C. 20549, at prescribed rates. The Commission also maintains
a World Wide Web site that contains reports, proxy and information statements   
and other information regarding registrants that file electronically with the   
Commission. The address of that site is http://www.sec.gov.                     

Statements contained herein concerning the provisions of documents are
necessarily summaries of such documents, and each statement is qualified in its 
entirety by reference to the copy of the applicable document filed with the     
Commission.                                                                     

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

The following documents filed by the Company with the Commission are  
incorporated by reference in this Proxy Statement:                              

          (a) Annual Report on Form 10-K, filed with the Commission on March 31,
1998 for the fiscal year ended December 31, 1997;                     

       (b) Amendment No. 1 to Annual Report on Form 10-K/A, filed with the
   Commission on April 29, 1998 for the fiscal year ended December 31, 1997;

       (c) Amendment No. 2 to Annual Report on Form 10-K/A, filed with the
  Commission on July 22, 1998 for the fiscal year ended December 31, 1997;

       (d) Quarterly Report on Form 10-Q, filed with the Commission on May
15, 1998 for the quarter ended March 31, 1998;                        

          (e) Amendment No. 1 to Quarterly Report on Form 10-Q/A, filed with the
Commission on July 22, 1998 for the quarter ended March 31, 1998;     

         (f) Current Report on Form 8-K, filed with the Commission on April 3,
1998, as amended by a Current Report on Form 8-K/A, filed with the    
Commission on April 8, 1998;                                          

          (g) Current Report on Form 8-K, filed with the Commission on April 22,
1998; and                                                             

       (h) The descriptions of the Common Stock set forth in the Company's
     Registration Statements pursuant to Section 12 of the Exchange Act, and any
 amendment or report filed for the purpose of updating such description.

  All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Proxy Statement and
prior to the date of the Meeting shall be deemed to be incorporated by reference
into this Proxy Statement.                                                      

Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Proxy         
Statement to the extent that a statement contained herein or in any other       
subsequently filed document which is also incorporated by reference herein      
modifies or supersedes such statement. Any such statement so modified or        
superseded shall not be deemed, except as so modified or superseded, to         
constitute a part of this Proxy Statement.                                      

 2

DEF 14A
5th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 5th

This Proxy Statement incorporates documents by reference which are not
presented herein or delivered herewith. These documents (not including exhibits 
to the documents incorporated by reference unless such exhibits are specifically
incorporated by reference into the information that this Proxy Statement        
incorporates) are available without charge to any person, including any         
beneficial owner, to whom a Proxy Statement is delivered upon written or oral   
request. Requests should be directed to: PLD Telekom Inc., 680 Fifth Avenue,    
24th Floor, New York, New York 10019, Attention: Secretary (telephone number    
(212) 262-6060).                                                                

 3

DEF 14A
6th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 6th

SUMMARY 

  The following is a summary of significant matters discussed elsewhere in
this Proxy Statement. This summary is qualified in its entirety by reference to 
the more detailed information appearing in this Proxy Statement and the         
Appendices hereto. Stockholders are urged to read the entire Proxy Statement,   
including the Appendices hereto.                                                

THE TRANSACTIONS                                                                

   At the Meeting, stockholders of the Company will be asked to consider and
vote upon proposals: (i) to approve the Asset Exchange Agreement and the        
transactions contemplated thereby; and (ii) to elect ten directors to the Board.

    The Asset Exchange Agreement, which was executed on April 19, 1998, is one
of three agreements executed on that date between the Company, News and Cable   
and Wireless plc ("C&W") relating to the acquisition by the Company and News of 
certain assets owned by C&W. The closing of the transactions contemplated by    
each of these agreements is subject to a number of conditions as described in   
more detail in "The Asset Exchange -- Terms of the Transaction;" "The Asset     
Exchange Agreement" and "-- Regulatory Approvals."                              

 A summary of each of these agreements and the transactions contemplated
thereby are set forth below.                                                    

    BELCEL Acquisition.  Pursuant to an agreement between the Company and C&W,
(the "BELCEL Acquisition Agreement"), the Company agreed with Cable and Wireless
plc ("C&W") to acquire all of the shares of CommStruct International Byelorussia
BV, a Netherlands corporation ("CIBBV"), which is the owner of 50% of           
Belarus-Netherlands Belcel Joint Venture ("BELCEL"), which in turn is the       
operator of a mobile telephone business in Belarus, plus certain intercompany   
indebtedness. The other 50% interest in BELCEL is now, and will, following the  
consummation of the acquisition continue to be, owned by the Minsk City         
Telephone Network (45%) and the Minsk Regional Telephone Network (5%). The      
shares of CIBBV and the intercompany indebtedness being acquired are hereinafter
referred to as the "BELCEL Interest". The Company will issue 500,000 shares of  
Common Stock for the BELCEL Interest.                                           

   C&W-News Transaction.  Pursuant to an agreement between C&W and News (the
"C&W-News Agreement"), News agreed to acquire from C&W all of the shares of the 
Company's Common Stock owned directly and indirectly by C&W (including the      
shares to be issued pursuant to the BELCEL Acquisition Agreement), a warrant to 
purchase 250,000 additional such shares, and all of the shares of PLD Holdings  
Limited, a Bermuda company ("Holdings"), for $80,000,000. Holdings owns 11% of  
PeterStar Company Limited ("PeterStar"), in which the Company also currently    
owns a 60% interest and which is one of the Company's principal operating       
businesses in the former Soviet Union.                                          

Asset Exchange.  Pursuant to the Asset Exchange Agreement, the Company
agreed to acquire from News 100% of the outstanding shares of Holdings (which   
News acquired from C&W) in exchange for the issuance of 3,826,041 shares of     
Common Stock.                                                                   

Resulting Ownerships.  Following completion of the three transactions 
summarized above:                                                               

- News PLD LLC, a wholly owned subsidiary of News America   
       Incorporated, will own an aggregate of 14,381,780 shares of the
       Company's Common Stock (representing approximately 38.0% of the
          outstanding Common Stock after the completion of the transactions)
        and a warrant to purchase an additional 250,000 shares of Common
Stock;                                                  

          - PLD will own, in addition to its other holdings: (i) a 100% interest
            in CIBBV and, indirectly, a 50% interest in BELCEL; and (ii) a total
interest of 71% in PeterStar; and                       

  - C&W will have no remaining interests in any of PLD, CIBBV or
    Holdings and will have received an aggregate of $80,000,000.

     See "Business -- Corporate Structure" for organizational charts showing the
ownership of the Company and its interests in operating businesses including    
PeterStar, and after the closing of the transactions contemplated by the BELCEL 
Acquisition Agreement, BELCEL.                                                  

 4

DEF 14A
7th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 7th

PARTIES                                                                         

 PLD Telekom Inc.  The Company, through its operating subsidiaries, is a
major provider of local, long distance and international telecommunications     
services in the Russian Federation and Kazakhstan. The Company's four principal 
operating businesses are: (i) PeterStar, which provides integrated local, long  
distance and international telecommunications services in St. Petersburg through
a fully digital fiber optic network; (ii) Technocom Limited ("Technocom"),      
which, through Teleport-TP, provides dedicated international telecommunications 
services to Russian and foreign businesses in Moscow and operates a             
satellite-based pan-Russian long distance network; (iii) Baltic Communications  
Limited ("BCL"), which provides dedicated international telecommunications      
services in St. Petersburg; and (iv) ALTEL (formerly known as BECET             
International), ("ALTEL"), which currently provides the only national cellular  
service in Kazakhstan. The Company's executive offices are located at 680 Fifth 
Avenue, 24th Floor, New York, New York 10019 and its telephone number is (212)  
262-6060.                                                                       

News America Incorporated.  News America Incorporated, the principal  
subsidiary in the United States of The News Corporation Limited ("News          
Corporation"), is a holding company whose affiliates and subsidiaries conduct   
the United States activities of News Corporation. News Corporation is a         
diversified international communications company principally engaged in the     
production and distribution of motion pictures and television programming,      
television broadcasting, publication of newspapers, magazines and books,        
promotional marketing services, digital broadcasting system design, conditional 
access and subscriber management systems and providing computer information     
services. All of the businesses in which News Corporation are engaged are       
conducted in highly competitive markets. The activities of News Corporation are 
conducted principally in the United States, the United Kingdom, Australia and   
the Asia Pacific region. News Corporation has also entered into joint ventures  
to provide direct broadcast satellite television services in Latin America.     

    PeterStar Company Limited.  PeterStar, in which the Company currently owns
a 60% interest, operates a fully digital, city-wide fiber optic                 
telecommunications network in St. Petersburg that is interconnected with the    
network of Petersburg Telephone Network ("PTN"), the local telephone company, as
well as the Russian national and international long distance systems. PeterStar 
provides integrated, high quality, digital telecommunications services with     
modern transmission equipment, including local, national and international long 
distance and value-added services, to businesses in St. Petersburg. PeterStar's 
executive offices are located at: Building 31, Line 16, Vassilievski Island,    
199178, St. Petersburg, Russia.                                                 

     PLD Holdings Limited.  Holdings, a Bermuda corporation which is an indirect
wholly owned subsidiary of C&W, is the holding company for C&W's 11% interest in
PeterStar. At the time of its acquisition by the Company, it will have no other 
business activities or material assets. Holdings' registered offices are located
at: Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda.                      

MARKET PRICE INFORMATION                                                        

  On April 17, 1998, the last trading day prior to the announcement of the
proposed transactions, the last reported sale price of the Company's Common     
Stock on the Nasdaq Stock Market (ticker symbol: PLDI) was $9.015625 and the    
last reported sale prices of the American Depositary Receipts of News           
Corporation (ticker symbol: NWS) and C&W (ticker symbol: CWP) on the New York   
Stock Exchange were $29.625 and $37.4375, respectively.                         

THE MEETING                                                                     

    The Meeting will be held on August 13, 1998, at 10:00 a.m., local time, at
the offices of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 
10178.                                                                          

    At the Meeting, the stockholders of record of Common Stock as of the close
of business on June 15, 1998 will consider and vote upon proposals: (i) to      
approve the Asset Exchange Agreement between the Company and News, providing for
the acquisition by the Company from News of 100% of the outstanding shares in   
Holdings, in exchange for the issuance of 3,826,041 shares of Common Stock, and 
the transactions                                                                

 5

DEF 14A
8th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 8th

contemplated thereby; (ii) to elect ten directors to the Board; and (iii) to    
transact such other business as may properly come before the Meeting or any     
adjournments thereof.                                                           

    Approval of the Asset Exchange Agreement and the transactions contemplated
thereby requires the affirmative vote of a majority of the shares present in    
person or represented by proxy at the Meeting and entitled to vote. Directors   
are to be elected at the Meeting by a plurality of the votes cast by holders of 
Common Stock present in person or represented by proxy at the Meeting and       
entitled to vote.                                                               

 Shareholder approval of the Asset Exchange Agreement is being sought by
reason of the application to this transaction of Rule 4460(i)(C)(i) of the      
Marketplace Rules of The Nasdaq Stock Market (the "Nasdaq Rules"), on which the 
Company's shares are listed.                                                    

    C&W, which currently owns approximately 30.0% of the outstanding shares of
Common Stock, has indicated that it intends to vote in favor of the Asset       
Exchange Agreement and the transactions contemplated thereby.                   

REASONS FOR THE ASSET EXCHANGE                                                  

See "The Asset Exchange -- Reasons for the Asset Exchange Agreement;  
Recommendation of the Board of Directors."                                      

RECOMMENDATION OF BOARD OF DIRECTORS                                            

The Board of Directors of the Company has approved the Asset Exchange 
Agreement and the transactions contemplated thereby and recommends that the     
Company's stockholders vote to approve the Asset Exchange Agreement and the     
transactions contemplated thereby. See "The Asset Exchange -- Reasons for the   
Asset Exchange Agreement; Recommendation of the Board of Directors."            

THE ASSET EXCHANGE AGREEMENT                                                    

  The Asset Exchange Agreement sets forth the principal terms by which the
transactions contemplated by the Asset Exchange Agreement will be consummated.  
The Asset Exchange Agreement contains representations, warranties and agreements
of the parties, and provides specific conditions to the consummation of the     
transactions contemplated by the Asset Exchange Agreement. See "The Asset       
Exchange -- The Asset Exchange Agreement."                                      

CLOSING DATE                                                                    

  Subject to the Company's or News' rights to terminate the Asset Exchange
Agreement, the closing of the Asset Exchange will occur three business days     
after the date upon which all of the conditions to the Asset Exchange Agreement 
are satisfied or duly waived, or at such other time and date as the Company and 
News may agree. The Asset Exchange will close at the same time as, and is       
conditioned on, the completion of the transactions contemplated by the C&W-News 
Agreement and the BELCEL Acquisition Agreement. The Company and News currently  
anticipate that the Asset Exchange will be completed on or about August 14,     
1998, if the Asset Exchange Agreement and the transactions contemplated thereby 
are approved at the Meeting.                                                    

RECENT DEVELOPMENTS                                                             

     In recent weeks, there has been considerable turmoil and uncertainty in the
Russian financial markets, prompted in large part by the crisis in the Asian    
financial markets which began in late 1997 and is still continuing, and the     
economic and political problems being experienced by a number of Asian          
countries. While this has not had an immediate impact upon the Company, there   
can be no assurance that it will not have a material adverse effect in the      
future. See "Business -- Recent Developments."                                  

   As of June 1, 1998 the interest rates payable in respect of the Company's
Senior Notes due 2004 and its Revolving Credit Notes due 1998 increased from 14%
to 14.5%, and from 12% to 15%, respectively, because the Company did not raise  
$20,000,000 in additional equity by May 31, 1998, as provided by the terms of   
those Notes. See "Business -- Recent Developments."                             

 6

DEF 14A
9th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 9th

THE MEETING 

GENERAL                                                                         

This Proxy Statement is being furnished to holders of Common Stock in 
connection with the solicitation of proxies by the Board for use at the combined
Special and Annual Meeting of Stockholders to be held on August 13, 1998, at    
10:00 a.m., and at any adjournment or postponement thereof.                     

PURPOSE OF THE MEETING                                                          

   At the Meeting, stockholders of the Company will be asked to consider and
vote upon proposals: (i) to approve the Asset Exchange Agreement and the        
transactions contemplated thereby; and (ii) to elect ten directors to the Board.

This Proxy Statement and its contents have been approved and its      
distribution authorized by the Board.                                           

THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE ASSET EXCHANGE 
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND RECOMMENDS A VOTE "FOR" 
THE APPROVAL OF THE ASSET EXCHANGE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED  
THEREBY.                                                                        

VOTING RIGHTS                                                                   

    The Board has fixed June 15, 1998 as the Record Date for the determination
of stockholders entitled to notice of and to vote at the Meeting. Accordingly,  
only stockholders of record of Common Stock at the close of business on the     
Record Date are entitled to notice of, and to vote at, the Meeting. As of June  
15, 1998, there were 33,520,748 shares of Common Stock outstanding. Each        
stockholder entitled to vote shall have the right to one vote for each share of 
Common Stock outstanding in such stockholder's name.                            

    The Company presently has no other class of stock outstanding and entitled
to be voted at the Meeting (pursuant to the Company's Certificate of            
Incorporation, holders of the Company's Series II Convertible Preferred Stock,  
par value $.01 and Series III Convertible Preferred Stock, par value $.01 are   
not entitled to receive notice of or to attend the Meeting or to vote at the    
Meeting).                                                                       

   The presence in person or by proxy of holders entitled to cast a majority
of all votes entitled to be cast at the Meeting will constitute a quorum.       

Shares cannot be voted at the Meeting unless the holder of record is  
present in person or by proxy.                                                  

SOLICITATION AND REVOCATION OF PROXIES                                          

    The enclosed form of proxy is a means by which a stockholder may authorize
the voting of his or her shares at the Meeting. All shares represented by       
properly executed proxies will be voted in accordance with the directions on the
proxies, unless such proxies are revoked prior to the vote. PROPERLY EXECUTED   
PROXIES CONTAINING NO INSTRUCTIONS REGARDING ANY PARTICULAR MATTER SPECIFIED    
THEREIN WILL BE VOTED FOR THE APPROVAL OF SUCH MATTER OR, IN THE CASE OF        
ELECTION OF DIRECTORS, FOR THE PERSONS NOMINATED BY THE BOARD OF DIRECTORS.     

    Approval of the Asset Exchange Agreement and the transactions contemplated
thereby requires the affirmative vote of a majority of the shares of Common     
Stock present in person or represented by proxy at the Meeting and entitled to  
vote. Directors are to be elected at the Meeting by a plurality of the votes    
cast by holders of Common Stock present in person or represented by proxy at the
Meeting and entitled to vote.                                                   

    In the case of shares that are present at the Meeting for quorum purposes,
not voting those shares for a particular nominee for director (including by     
withholding authority on the proxy) will not operate to prevent the election of 
that nominee if he otherwise receives affirmative votes. An abstention on any   
other item (including as to the Asset Exchange Agreement and the transactions   
contemplated thereby) will operate to prevent approval of the item to the same  
extent as a vote against approval of such item and a broker "non-               

 7

DEF 14A
10th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 10th

vote" on any item (which results when a broker holding shares for a beneficial  
owner has not received timely voting instructions on certain matters from such  
beneficial owner and those matters are matters with respect to which the broker 
has no discretion to vote) will have the same effect on the outcome of the vote 
on such item.                                                                   

The Board does not know of any other matters which may come before the
Meeting. If any other matters are properly presented to the Meeting, for action,
the proxy holders will vote the proxies (which confer discretionary authority to
vote on such matters) in accordance with their best judgment.                   

 Any stockholder of the Company who executes and returns a proxy has the
power to revoke it any time before it is voted. The giving of a proxy does not  
affect a stockholder's right to attend the Meeting and vote in person. A        
stockholder's presence at the meeting, however, will not in itself revoke the   
stockholder's proxy. Any stockholder giving a proxy has the right to revoke it  
by giving written or oral notice of revocation to the Secretary of the Company, 
at 680 Fifth Avenue, 24th Floor, New York, NY 10019, or by delivering a         
subsequently executed proxy, at any time before the proxy is voted.             

    The Company will bear the cost of solicitation of proxies for the Meeting.
In addition to the use of the mails, proxies may be solicited by telephone by   
directors and officers and employees of the Company who will not be specially   
compensated for such services. The Company will request that the Notice of      
Meeting, this Proxy Statement, the proxy and related materials, if any, be      
forwarded to beneficial owners and expects to reimburse banks, brokers and other
persons for their reasonable out-of-pocket expenses in handling such matters.   

    Your proxy vote is important. Accordingly, you are asked to complete, sign
and return the accompanying proxy card whether or not you plan to attend the    
Meeting. If you plan to attend the Meeting to vote in person and your shares are
registered with the Company's transfer agent in the name of a broker or bank,   
you must secure a proxy from your broker or bank assigning voting rights to you 
for your shares of Common Stock.                                                

 8

DEF 14A
11th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 11th

THE ASSET EXCHANGE

    This portion of the Proxy Statement describes various aspects of the Asset
Exchange. The following descriptions do not purport to be complete and are      
qualified in their entirety by reference to the Asset Exchange Agreement        
attached hereto as Appendix A and incorporated herein by reference. ALL         
STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE ASSET EXCHANGE AGREEMENT IN   
ITS ENTIRETY.                                                                   

BACKGROUND TO THE ASSET EXCHANGE                                                

In 1997, C&W announced its decision to dispose of its interest in the 
Company. The Company is aware that C&W had discussions with a number of other   
telecommunications companies regarding the acquisition of such interest. The    
Company does not know the details of those discussions, nor why they terminated.
The Company has had its own discussions with C&W relating to the Company's      
acquisition of the C&W interests in PeterStar and BELCEL. Those discussions     
terminated in 1997 when C&W indicated an unwillingness to sell such interests   
separately from any sale of its interest in the Company. Since C&W was not      
willing to entertain an offer for its PeterStar and BELCEL stakes separate from 
its stake in the Company, the discussions were of a preliminary nature and did  
not progress to a discussion of pricing or other terms.                         

     In July 1997 the Russian government conducted an auction for a 25% interest
in Sviazinvest, an entity created by the government to hold its interests in 85 
privatized regional telephone companies and in Rostelecom, the privatized long  
distance carrier. A number of national and international consortia bid for this 
interest, which was eventually acquired by a group including Oneximbank and     
Renaissance Capital. AO LogoVAZ, a major Russian industrial conglomerate with   
interests, inter alia, in oil, automobiles, airlines and media ("LogoVAZ"), was 
a member of one of the losing consortia. LogoVAZ continued to be interested in  
developing a presence in the Russian telecommunications market and approached   
the Company to discuss ways in which the Company and LogoVAZ might cooperate to 
achieve this.                                                                   

In early 1998, News and LogoVAZ began discussing an investment in the 
Company by News in conjunction with LogoVAZ, and more specifically, a           
transaction in which News and LogoVAZ would jointly purchase the C&W interest in
the Company.                                                                    

Following this, News approached the Company to obtain more information
regarding its business and operations. On March 16, 1998, it executed a         
confidentiality agreement with the Company and thereafter conducted extensive   
due diligence with respect to the Company.                                      

     It was agreed between LogoVAZ and News that News would negotiate to buy the
C&W interest in the Company on its own and, if it was successful, would then    
enter into negotiations with LogoVAZ for the acquisition by LogoVAZ of an       
interest in the position purchased by News.                                     

    News has advised the Company that negotiations with LogoVAZ have commenced
and are continuing.                                                             

    Negotiations between C&W and News ensued with respect to C&W's interest in
the Company as well as its interests in PeterStar and BELCEL. News agreed to    
acquire the PeterStar interest from C&W, but made it a condition to its         
acquisition that the Company agree to acquire this interest from News           
substantially simultaneously with its acquisition from C&W, and that the Company
separately acquire the BELCEL Interest from C&W.                                

 The Company was willing to accede to these requirements of News for the
reasons set forth in "Reasons for the Asset Exchange Agreement; Recommendation  
of the Board of Directors" below. The Board, which had been kept generally      
apprised of the status of the multi-party negotiations, met by telephone        
conference on April 17 and April 19, 1998 to approve the terms of the           
transactions, and the Asset Exchange Agreement, together with the C&W-News      
Agreement and the BELCEL Acquisition Agreement, were signed on April 19, 1998.  
The directors nominated by Navona Communications Corporation Ltd., a Bermuda    
corporation ("Navona") and a wholly owned subsidiary of C&W through which C&W   
holds its shares in the Company, abstained from voting on the transactions. All 
of the other directors of the Company voted in favor of the transactions except 
Mr. Gennady Kudriavtsev, who was not present. Mr. Kudriavtsev subsequently      
indicated his approval of the transactions.                                     

 9

DEF 14A
12th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 12th

TERMS OF THE TRANSACTIONS                                                       

    General.  At the Meeting, the stockholders of the Company will be asked to
consider and vote upon, among other things, a proposal to approve the Asset     
Exchange Agreement and the transactions contemplated thereby.                   

 The Asset Exchange Agreement was executed on April 19, 1998. Closing is
subject to a number of conditions, including approval by the stockholders of the
Company, regulatory approvals and the closing of the two other agreements also  
executed on April 19, 1998.                                                     

   The transactions contemplated by the Asset Exchange Agreement, the BELCEL
Acquisition Agreement and the C&W-News Agreement will not effectuate any        
material changes in the rights of the holders of any capital stock of the       
Company.                                                                        

  BELCEL Acquisition.  Under the BELCEL Acquisition Agreement, the Company
agreed with C&W to acquire 100% of the shares of CIBBV, which is the owner of   
50% of BELCEL, which in turn is the operator of a mobile telephone business in  
Belarus (the other 50% interest in BELCEL is now, and will, following the       
consummation of the acquisition continue to be, owned by the Minsk City         
Telephone Network (45%) and the Minsk Regional Telephone Network (5%)). C&W also
agreed to assign to PLD the benefit of the Loan Agreement, dated November 28,   
1995, between C&W and CIBBV, as amended. The current balance owed by CIBBV to   
C&W (and which will be owed to PLD after the closing of the transactions        
contemplated by the BELCEL Acquisition Agreement) was approximately $8.6 million
as of December 31, 1997. In addition, C&W agreed to either terminate, or assign 
to PLD the benefit of, the existing intercompany indebtedness for money owed to 
C&W and its subsidiaries and affiliates by CIBBV and BELCEL which totaled       
approximately $3.9 million as of December 31, 1997. The Company will issue a    
total of 500,000 shares of Common Stock to C&W for the BELCEL Interest in a     
private placement under Section 4(2) of the Securities Act of 1933 (the         
"Securities Act"). C&W, which is a leading global communications company,       
already owns 10,055,739 shares of Common Stock, or approximately 30.0% of the   
total common stock outstanding.                                                 

Closing of the transactions contemplated by the BELCEL Acquisition    
Agreement is subject to a number of conditions, including, among other things:  
(i) the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), applicable to the C&W-News Agreement shall    
have expired or been terminated (the waiting period was terminated on May 4,    
1998); (ii) no preliminary or permanent injunction or other order or decree by  
any court shall have been issued and remain in effect which prevents the        
consummation of the BELCEL Acquisition Agreement and the transactions           
contemplated thereby, and no statute, rule or regulation shall have been enacted
by any government or governmental agency which prohibits the consummation of the
BELCEL Acquisition Agreement; (iii) the stockholders of the Company shall have  
approved the Asset Exchange Agreement; (iv) the stockholders of CIBBV shall have
approved the transfer of the CIBBV shares to the Company; and (v) the           
performance by the Company and C&W of their respective obligations under the    
BELCEL Acquisition Agreement and the accuracy of their respective               
representations and warranties thereunder. In addition, the obligations of C&W  
to consummate the transactions contemplated by the BELCEL Acquisition Agreement 
are subject to the satisfaction of the conditions to the closing of the         
transactions contemplated by the C&W-News Agreement. Management of the Company  
is not presently aware of any circumstance that would be reasonably likely to   
prevent any of the conditions to the BELCEL Acquisition Agreement from being    
satisfied.                                                                      

   The BELCEL Acquisition Agreement was filed as an exhibit to the Company's
Current Report on Form 8-K, filed with the Commission on April 22, 1998, which  
report is incorporated by reference herein.                                     

     C&W-News Transaction.  Under the C&W-News Agreement, News agreed to acquire
from C&W all of the shares of the Company's Common Stock owned by C&W (including
the shares to be issued pursuant to the BELCEL Acquisition Agreement), a warrant
to purchase 250,000 additional such shares, and all of the shares of Holdings,  
for $80,000,000. Holdings owns 11% of PeterStar, in which the Company also      
currently owns a 60% interest and which is one of the Company's principal       
operating businesses in the former Soviet Union. As noted, at the time of its   
acquisition by the Company, Holdings will have no business activities or        
material assets other than its interest in PeterStar.                           

10

DEF 14A
13th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 13th

Closing of the transactions contemplated by the C&W-News Agreement is 
subject to a number of conditions, including, among other things: (i) the       
waiting period under the HSR Act applicable to the C&W-News Agreement shall have
expired or been terminated (the waiting period was terminated on May 4, 1998);  
(ii) no preliminary or permanent injunction or other order or decree by any     
court shall have been issued and remain in effect which prevents the            
consummation of the C&W-News Agreement and the transactions contemplated        
thereby, and no statute, rule or regulation shall have been enacted by any      
government or governmental agency which prohibits the consummation of the       
C&W-News Agreement; (iii) the Company shall have issued to C&W the 500,000      
shares of the Company's Common Stock pursuant to the BELCEL Acquisition         
Agreement; and (iv) the performance by News and C&W of their respective         
obligations under the C&W-News Agreement and the accuracy of their respective   
representations and warranties thereunder. In addition, the obligations of News 
to consummate the transactions contemplated by the C&W-News Agreement are       
subject to, among other things; (i) no event or events shall have occurred and  
be continuing which, either individually or in the aggregate, would have a      
material adverse effect on the property, business, operations, prospects or     
condition (financial or otherwise) of the Company or PeterStar; and (ii) the    
conditions to closing under the Asset Exchange Agreement shall have been        
satisfied or waived by News. Management of the Company is not presently aware of
any circumstance that would be reasonably likely to prevent any of the          
conditions to the C&W-News Agreement from being satisfied.                      

    The C&W-News Agreement was filed as an exhibit to C&W's Amendment No. 6 to
its Schedule 13D, filed with the Commission on April 20, 1998.                  

Asset Exchange.  The shares of Holdings to be acquired by News (the   
"PeterStar Interest") are the subject of the Asset Exchange Agreement between   
News and the Company. Under the Asset Exchange Agreement, the Company agreed to 
acquire the PeterStar Interest from News immediately upon News' acquisition of  
this Interest from C&W, in exchange for the issuance to News of 3,705,631 shares
of Common Stock. The Company subsequently agreed to issue News an additional    
120,410 shares of Common Stock, in light of an increase in the number of shares 
of Common Stock outstanding. The shares of Common Stock will be issued in a     
private placement under Section 4(2) of the Securities Act. Following the       
completion of these transactions, the Company's interest in PeterStar will have 
increased from 60% to 71%, and News will hold approximately 38% of the          
outstanding shares of the Company's Common Stock. In addition, pursuant to a    
Directors Nomination Agreement between the Company and News, executed at the    
same time as the Asset Exchange Agreement (the "Directors Nomination            
Agreement"), News will have the right to nominate four individuals for election 
to the Board, which currently numbers ten individuals. The Directors Nomination 
Agreement also provides that the number of individuals which News may nominate  
will be adjusted proportionately based upon the size of the Board at any time,  
and will be reduced in the event of certain reductions in the percentage        
interest held by News in the Company. See "The Directors Nomination Agreement." 

     Shareholder Approval.  Shareholder approval of the Asset Exchange Agreement
is being sought by reason of the application to this transaction of Rule        
4460(i)(C)(i) of the Nasdaq Rules. This Rule requires shareholder approval of   
any acquisition for shares of the acquiror of stock of another company in which 
a substantial shareholder of the acquiror owns a 5% or greater interest, and the
number of shares being issued by the acquiror will result in a 5% or greater    
increase in the number of outstanding shares. In this instance, at the time News
transfers the PeterStar Interest to the Company, it will be a substantial       
shareholder of the Company, and the number of shares it will receive for the    
PeterStar Interest will represent approximately 10.1% of the total shares       
outstanding after the issuance.                                                 

  Shareholder approval of the BELCEL Acquisition Agreement is not required
under the Nasdaq Rules and, accordingly, is not being sought in this instance.  
Nevertheless, because the closing of each of the three agreements described     
above is conditioned upon the closing of the other two, a negative vote by      
shareholders of the Company on the Asset Exchange Agreement would mean that the 
transactions contemplated by the C&W-News Agreement and the BELCEL Acquisition  
Agreement would not occur. Conversely, the fact that shareholders of the Company
approve the Asset Exchange Agreement will not assure that the transactions      
contemplated by such Agreement close, not only because the Agreement itself is  
subject to certain other conditions, but in addition because the failure of     
either of the BELCEL Acquisition Agreement or the C&W-News Agreement to close   
will mean that the Asset Exchange Agreement does not close.                     

11

DEF 14A
14th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 14th

    C&W, which currently owns approximately 30.0% of the outstanding shares of
Common Stock, has indicated that it intends to vote in favor of the Asset       
Exchange Agreement and the transactions contemplated thereby.                   

REASONS FOR THE ASSET EXCHANGE AGREEMENT; RECOMMENDATION OF THE BOARD OF        
DIRECTORS                                                                       

   The Board believes that the Asset Exchange Agreement and the transactions
contemplated thereby are fair to and in the best interests of the Company and   
its shareholders. Accordingly, the Board approved the Asset Exchange Agreement  
and the transactions contemplated thereby and recommends that the shareholders  
of the Company vote for approval of the Asset Exchange Agreement and the        
transactions contemplated thereby.                                              

  In reaching its decision to approve the Asset Exchange Agreement and the
transactions contemplated thereby, the Board consulted with its legal and       
financial advisors, as well as the Company's management. The factors which were 
material to the Board's decision were:                                          

          (1) the ability of the Company to increase the size of its interest in
   PeterStar which to date has been the Company's most successful venture in
the former Soviet Union; and                                          

      (2) management's analysis that, based upon its direct knowledge of
     PeterStar's condition based on managing and operating this company for over
 five years, the value of the additional 11% interest in PeterStar being
 acquired by the Company was at least equal to the value of the Exchange
Shares being issued to News.                                          

  Other factors considered by the Board included: management's familiarity
with the operation of PeterStar, a desire to increase the Company's presence in 
the St. Petersburg market and the perceived favorable impact on the market for  
the Company's Common Stock.                                                     

   In addition, because the consummation of the transactions contemplated by
the Asset Exchange Agreement is a condition to the C&W-News Agreement which     
would, inter alia, have the effect of making News the largest shareholder in the
Company in place of C&W, the Board of Directors also considered the impact of   
this transaction upon the Company and concluded that it was in the best         
interests of the Company and its shareholders because of the following factors: 

          (1) the transaction would bring the Company a new shareholder in place
of a shareholder which had been seeking to dispose of its interest;   

    (2) the interest of News in developing a presence in the Russian
telecommunications industry; and                                      

   (3) the profile of News and its affiliates in the international
business community, and their significant experience in international 
business transactions.                                                

   In addition, while the shareholders of the Company are not being asked to
vote on the acquisition of the BELCEL Interest, the Board of Directors of the   
Company also believes that this transaction is fair to and in the best interests
of the Company for the following reasons:                                       

          (1) the opportunity to expand its cellular telephony operations into a
new territory in the former Soviet Union;                             

       (2) the fact that members of senior management had been involved in
the management or operation of BELCEL earlier in their careers, and   
therefore had significant familiarity with its business; and          

         (3) management's analysis that the value of the BELCEL Interest being
  acquired by the Company was at least equal to the value of the shares of
Common Stock being issued to C&W in exchange.                         

THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE ASSET EXCHANGE AGREEMENT 
AND THE TRANSACTIONS CONTEMPLATED THEREBY AND RECOMMENDS A VOTE "FOR" THE       
APPROVAL OF THE ASSET EXCHANGE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED      
THEREBY.                                                                        

12

DEF 14A
15th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 15th

CLOSING DATE                                                                    

  Subject to the Company's or News' rights to terminate the Asset Exchange
Agreement, the closing (the "Closing") of the Asset Exchange will occur three   
business days after the date upon which all of the conditions to the Asset      
Exchange Agreement are satisfied or duly waived, or at such other time and date 
as the Company and News may agree. For a description of the circumstances under 
which the Company or News may terminate the Asset Exchange Agreement, see       
"-- Termination." The Asset Exchange Agreement will close together with the     
completion of the transactions contemplated by the C&W-News Agreement and the   
BELCEL Acquisition Agreement. The Company and News currently anticipate that the
transactions contemplated by the Asset Exchange Agreement will be completed on  
or about August 14, 1998, if the Asset Exchange Agreement and the transactions  
contemplated thereby are approved at the Meeting.                               

THE ASSET EXCHANGE AGREEMENT                                                    

    The description of the Asset Exchange Agreement set forth below summarizes
the material provisions of the Asset Exchange Agreement, a copy of which is     
attached as Appendix A to this Proxy Statement and incorporated by reference    
herein. Shareholders are urged to read carefully the Asset Exchange Agreement.  

Representations and Warranties.  The Asset Exchange Agreement contains
representations and warranties made by the Company and News regarding, among    
other things, the Company's and News': (i) proper organization, powers and      
qualifications of each corporation and similar corporate matters; (ii) the      
authorization, performance and enforceability of the Asset Exchange Agreement;  
and (iii) consents and approvals required to effect the transactions            
contemplated by the Asset Exchange Agreement. In addition, the Company made     
certain representations and warranties as to its business and that of PeterStar,
including, without limitation: (i) financial statements; (ii) absence of certain
changes or events; (iii) legal proceedings and (iv) permits. The representations
and warranties were made as of the date of the Asset Exchange Agreement and, as 
a condition to the closing of the transactions contemplated by the Asset        
Exchange Agreement, must be true in all material respects as of the Closing. The
representations and warranties survive for one year following the Closing.      

   Conduct of Business Prior to Closing.  The Company has agreed that, prior
to Closing, it will, and will cause PeterStar to: (i) conduct their respective  
businesses and operations according to their ordinary and usual course of       
business consistent with past practice; and (ii) provide News and its           
representatives with reasonable access to their respective books, records,      
offices and other facilities and properties. In addition, each of the Company   
and News have agreed to: (i) take all actions and to do, or cause to be done,   
all things necessary, proper or advisable to consummate and make effective the  
transactions contemplated by the Asset Exchange Agreement; (ii) consult with    
each other prior to issuing any public announcement, statement or other         
disclosure with respect to the Asset Exchange Agreement and the transactions    
contemplated thereby; and (iii) cooperate with each other and use all reasonable
efforts to obtain all necessary permits, consents, approvals and authorizations 
of all parties necessary or advisable to consummate the transactions            
contemplated by the Asset Exchange Agreement, including the filing of any       
documentation, applications, notices and documents with government bodies.      

     Conditions to the Asset Exchange Agreement.  The obligations of the Company
and News to consummate the Asset Exchange Agreement and the transactions        
contemplated thereby are subject to, among other things, the satisfaction of the
following conditions: (i) the waiting period under the Hart-Scott-Rodino        
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), applicable to   
the Asset Exchange shall have expired or been terminated (the waiting period was
terminated on May 4, 1998); (ii) no preliminary or permanent injunction or other
order or decree by any court shall have been issued and remain in effect which  
prevents the consummation of the Asset Exchange Agreement and the transactions  
contemplated thereby, and no statute, rule or regulation shall have been enacted
by any government or governmental agency which prohibits the consummation of the
Asset Exchange Agreement; (iii) the stockholders of the Company shall have      
approved the Asset Exchange Agreement; (iv) the transactions contemplated by the
C&W-News Agreement shall have closed; (v) the performance by the Company and    
News of their respective obligations                                            

13

DEF 14A
16th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 16th

under the Asset Exchange Agreement and the accuracy of their representations and
warranties thereunder; and (vii) delivery of opinions of counsel for the Company
and News as to certain corporate matters.                                       

In addition, the obligations of the Company to consummate the Asset   
Exchange are subject to the closing of the transactions contemplated by the     
BELCEL Acquisition Agreement.                                                   

The obligations of News to consummate the Asset Exchange Agreement are
subject to, among other things, the satisfaction of the following additional    
conditions: (i) the absence of any event or events, either individually or in   
the aggregate, which would have a material and adverse effect on the property,  
business, operations, prospects or condition (financial or otherwise) of the    
Company; and (ii) the execution of the Directors Nomination Agreement by the    
Company and News (which was executed on April 19, 1998).                        

   Management of the Company is not presently aware of any circumstance that
would be reasonably likely to prevent any of the conditions to the Asset        
Exchange Agreement from being satisfied.                                        

     Indemnification.  The Company and News have agreed to indemnify, defend and
hold harmless the other party and their respective parents, subsidiaries and    
affiliates from and against all claims, actions, damages, liabilities, costs and
expenses arising out of or resulting from a breach of any representation,       
warranty or agreement in the Asset Exchange Agreement by such party; provided   
that the liability of News pursuant to the indemnification provisions of the    
Asset Exchange Agreement is limited to $100,000 and that of the Company is      
limited to $20,000,000. Any indemnification claims paid by the Company will be  
paid in the form of shares of Common Stock, subject to the rules and regulations
of any stock exchange upon which the Common Stock is traded or any interdealer  
quotation system on which the Common Stock is quoted.                           

Amendment; Waiver; Termination.  The Asset Exchange Agreement may be  
amended, modified or supplemented only by written agreement signed by both News 
and the Company. The Asset Exchange Agreement may be terminated at any time     
prior to Closing: (i) by mutual written consent of the Company and News; (ii) by
either the Company or News if the Asset Exchange has not been consummated on or 
before June 30, 1998 (the date was subsequently extended to August 7, 1998 by   
mutual agreement and the Company anticipates a future extension will be agreed  
upon to such date as may be necessary to close the transactions), unless the    
absence of such occurrence is due to the failure of the party seeking to        
terminate to perform any of its covenants or obligations under the Asset        
Exchange Agreement; (iii) by either the Company or News if any required         
governmental or regulatory consent is not obtained or if an order, judgment or  
decree permanently restraining, enjoining or otherwise prohibiting the Asset    
Exchange shall have been issued; and (iv) by either the Company or News if there
has been a material violation or breach of any agreement, representation or     
warranty contained in the Asset Exchange Agreement.                             

THE DIRECTORS NOMINATION AGREEMENT                                              

Simultaneously with the execution of the Asset Exchange Agreement, the
Company and News entered into the Directors Nomination Agreement regarding,     
among other things, the nomination by the Company of certain individuals        
designated by News for election as directors. The Company has agreed that, upon 
the closing of the transactions contemplated by the Asset Exchange Agreement,   
the BELCEL Acquisition Agreement and the C&W-News Agreement, it will use its    
best efforts to maintain the size of the Board at 10 and cause the Board        
initially to elect as directors four individuals designated by News. Thereafter,
for the term of the Directors Nomination Agreement, the Company will nominate   
the appropriate number of News designees for election by stockholders, as       
described below.                                                                

14

DEF 14A
17th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 17th

    Pursuant to the terms of the Directors Nomination Agreement, the number of
individuals that News shall be permitted to designate for nomination will be    
based on the percentage of the issued and outstanding shares of Common Stock    
then held by News, News Corporation and its subsidiaries and affiliates, as     
follows:                                                                        

                                                                [Download Table]

                                                      PERCENTAGE OF      
          NUMBER OF DESIGNEES                    TOTAL SHARES OUTSTANDING
          -------------------                    ------------------------
                                                                         
4..............................................        23% or over       
3..............................................         15%-22.99%       
2..............................................         10%-14.99%       
1..............................................          5%-9.99%        
0..............................................          Below 5%        

In addition, if the size of the Board is increased to greater than 10 
directors, the number of directors to be designated by News will be             
proportionately adjusted, rounding up where necessary to the next highest whole 
number.                                                                         

The Directors Nomination Agreement expires on April 19, 2008.         

  In connection with entering into the Directors Nomination Agreement, the
Company and News also entered into a letter agreement, dated April 19, 1998,    
providing for the Company and News to continue discussions concerning the size  
of the Board and the number of persons that News may designate as nominees on   
the Company's slate of nominees for election as director. Prior to executing the
Directors Nomination Agreement, the Company had been seeking to implement a     
structure whereby the size of the Board would be expanded to 12 and News would  
be entitled to designate six persons as nominees for the election to the Board. 
Because of uncertainty as to whether the Nasdaq Rules would permit such number  
of designees, the Company and News determined initially to place only four      
members, of a total Board membership of 10 persons, as News' designees on the   
Board, as reflected in the Directors Nomination Agreement. However, the Company 
and News agreed to continue to discuss the issue of Board size and composition  
with a view to preserving their original intent and, if successful, to take such
action as is reasonably necessary to expand the size of the Board to 12 and to  
name a total of six persons to such an expanded Board as representatives of     
News.                                                                           

    No assurance can be given that the Company and News will be able to secure
the approval of the National Association of Securities Dealers, Inc. to the     
foregoing intentions. If such approval is obtained, the Company will consult    
with News with respect to the persons to be nominated and the manner of         
expanding the Board and electing such persons.                                  

REGULATORY APPROVALS                                                            

     Under the provisions of the HSR Act, notice of the Asset Exchange Agreement
was provided to the United States Department of Justice and to the Federal Trade
Commission on April 24, 1998 for the purpose of allowing these federal agencies 
to evaluate the impact of the transactions contemplated by the Asset Exchange   
Agreement on competition in the market. On May 4, 1998, the Company and News    
were notified that the FTC had granted "early termination" of the waiting period
under the HSR Act, thereby clearing the transactions contemplated by the Asset  
Exchange Agreement under the HSR Act. There are no other regulatory approvals   
required for the consummation of the transactions contemplated by the Asset     
Exchange Agreement.                                                             

REGISTRATION RIGHTS                                                             

 The Exchange Shares to be issued to News pursuant to the Asset Exchange
Agreement will be issued in a private placement under Section 4(2) of the       
Securities Act. Pursuant to the Asset Exchange Agreement, the Company has       
granted both demand and "piggy-back" registration rights to News with respect to
the resale by News of the Exchange Shares and the shares of Common Stock        
acquired by News pursuant to the C&W-News Agreement, and any other security of  
the Company owned at any time by News which is registrable under the applicable 
laws of the United States (collectively, the "Registrable Securities").         

15

DEF 14A
18th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 18th

    In the case of demand registrations, upon the request of News, the Company
will file a shelf registration statement with the Commission with respect to the
Registrable Securities identified by News within 60 days, and will use its best 
efforts to cause such registration statement to become and remain effective, and
thereafter to keep the registration statement continuously effective,           
supplemented and amended to the extent necessary to ensure that it is available 
for sales of the shares of the Registrable Securities so registered, until the  
earlier of: (i) the time all such Registrable Securities have been disposed of; 
and (ii) 180 days after the applicable registration statement becomes effective.

The "piggy-back" rights granted to News give it the right, subject to 
customary reductions and carve-outs, to include Registrable Securities in       
registration statements filed by the Company. The Company has agreed to keep any
such registration statements continuously effective, supplemented and amended to
the extent necessary to ensure that it is available for sales of the shares of  
the Registrable Securities so registered, until the earlier of: (i) the time all
such Registrable Securities have been disposed of; and (ii) 90 days after the   
applicable registration statement becomes effective.                            

     The Company has agreed to pay all registration-related expenses relating to
the exercise by News of its registration rights; provided that the Company shall
pay such expenses for only one demand registration statement; provided further  
that, if at or subsequent to April 19, 2003, News, together with its affiliates,
subsidiaries and permitted successors and assigns, collectively own more than   
50% of the aggregate Registrable Securities, then pursuant to the terms of the  
registration rights provisions of the Asset Exchange Agreement, the Company will
be obligated to pay the registration-related expenses for an additional         
registration statement.                                                         

EXPENSES                                                                        

All costs and expenses incurred in connection with the Asset Exchange 
Agreement and the transactions contemplated thereby shall be borne by the party 
incurring such costs and expenses.                                              

ACCOUNTING TREATMENT                                                            

   PeterStar Acquisition.  The acquisition of the additional 11% interest in
PeterStar through the acquisition of 100% of Holdings will be accounted for     
under the purchase method of accounting. Consideration for the additional       
interest will be 3,826,041 shares of Common Stock valued at approximately $33.4 
million. Since the financial statements of PeterStar are consolidated with the  
Company's, the effect of the additional ownership will reduce the minority      
interest charge in the Company's consolidated statement of operations. The      
reduction of the minority interest charge is expected to be offset by increased 
amortization charges since the consideration exceeds the fair value of net      
assets acquired.                                                                

 CIBBV Acquisition.  The acquisition of all of the outstanding shares of
CIBBV and of certain intercompany indebtedness will be accounted for under the  
purchase method of accounting. Consideration will be 500,000 shares of Common   
Stock valued at approximately $4.4 million.                                     

INTERESTS OF CERTAIN PERSONS IN THE TRANSACTION                                 

   On April 19, 1998, in connection with its discussions regarding the Asset
Exchange Agreement and the transactions contemplated by the BELCEL Acquisition  
Agreement and the C&W-News Agreement, the Board granted stock options to James  
R.S. Hatt, President and Chief Executive Officer of the Company, and Simon      
Edwards, Senior Vice President and Chief Financial Officer of the Company, to   
incentivize them to continue to develop the Company's businesses and in         
recognition of the fact that these executives had not been granted stock options
by the Company in almost two years. Mr. Hatt was granted options to purchase an 
aggregate of 280,000 shares of Common Stock and Mr. Edwards was granted options 
to purchase an aggregate of 340,000 shares of Common Stock. The exercise price  
of the stock options is $7.00 as to one-third of each grant and $8.00 as to the 
remaining two-thirds of each grant. The options vested as to one-third on the   
date of grant and the remainder will vest as to one-third each on the first and 
second anniversaries of the date of grant.                                      

16

DEF 14A
19th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 19th

BUSINESS

PLD TELEKOM INC.                                                                

 The Company, through its operating subsidiaries, is a major provider of
local, long distance and international telecommunications services in the       
Russian Federation and Kazakhstan. The Company's four principal operating       
businesses are: (i) PeterStar, which provides integrated local, long distance   
and international telecommunications services in St. Petersburg through a fully 
digital fiber optic network; (ii) Technocom, which, through Teleport-TP,        
provides dedicated international telecommunications services to Russian and     
foreign businesses in Moscow and operates a satellite-based pan-Russian long    
distance network; (iii) BCL, which provides dedicated international             
telecommunications services in St. Petersburg; and (iv) ALTEL, which currently  
provides the only national cellular service in Kazakhstan. ALTEL was formerly   
known as BECET International, although marketing its services under the name    
"ALTEL". In May 1998, ALTEL changed its corporate name to the name under which  
it was doing business.                                                          

The Company's objective is to be a leading participant in the targeted
development of telecommunications infrastructure in the emerging markets of the 
Russian Federation and other countries of the former Soviet Union. The Company  
expects to achieve this goal through: (i) expanding and further integrating its 
existing business and network infrastructure into the public telecommunications 
networks; (ii) providing high quality national long distance services in the    
Russian Federation to complement the international long distance services it    
currently provides to its business customers; (iii) providing additional        
value-added services such as wireless communications, fax, data and Internet    
service as a means of developing new traffic streams; and (iv) further          
developing relationships with local and national strategic partners in the      
Russian Federation and other countries of the former Soviet Union.              

 The Company has several potential sources of cash flows, including fees
from management services, dividends, repayment of intercompany advances, lease  
payments and payments under equipment sales contracts. The Company currently    
generates fees from management services provided to certain of its operating    
subsidiaries. Although its ability to generate dividend income in the near      
future may be limited due to the cash flow requirements of its operating        
businesses, the Company expects to receive dividends in the future. One of its  
operating subsidiaries, ALTEL, paid two dividends in 1997 and a further one     
early in 1998. The Company received payments in respect of intercompany advances
during the course of 1997 and expects this to continue in 1998. In relation to  
leases and equipment sales contracts entered into with its operating            
subsidiaries, the Company started to receive payments in 1998.                  

 The Company's receivables (described above) are all denominated in U.S.
Dollars, as are its Senior Notes due 2004, its Convertible Notes due 2006 and   
its Revolving Credit Notes due 1998, which represent all of its outstanding     
indebtedness. Certain of its operating subsidiaries have incurred bank          
indebtedness, and are expected to continue to do so from time to time. All such 
indebtedness has been, and is expected to continue to be denominated in U.S.    
Dollars. The Company's operating subsidiaries invoice in U.S. Dollars, but      
receive payment in local currency at the then-current rate of exchange for the  
U.S. Dollar. The Company faces an exchange risk to the extent that payment is   
delayed, or the operating subsidiary experiences any difficulty in converting   
the local currency payment received into U.S. Dollars. The Company does not     
attempt to hedge this exchange risk. To date, this exchange risk has not been   
significant. However, there can be no assurance that delays or difficulties in  
converting local currencies may not occur, and that such developments, in       
conjunction with volatility in the local currencies, may not have a material    
adverse effect on the Company.                                                  

     The fostering of existing, and the creation of new, partnerships with local
and regional partners is crucial to the long-term success of the Company in this
environment. In its operating businesses, the Company's partners include: PTN,  
the local telephone system operator in St. Petersburg, and St. Petersburg       
Intercity & International Telephone, the gateway for national and international 
long distance calls to and from St. Petersburg, which together hold an indirect 
14% interest in PeterStar; Kazakhtelekom, the state-owned national              
telecommunications operator in Kazakhstan and the holder of a 50% interest in   
ALTEL; and AO Rostelecom, the primary long distance and international carrier in
the Russian Federation and a 44% shareholder in Teleport-TP. The Company will   
seek to continue developing ventures with local partners who                    

17

DEF 14A
20th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 20th

can provide: (i) assistance in obtaining telecommunications operating licenses; 
(ii) access to network facilities; and (iii) political support.                 

FOR ADDITIONAL INFORMATION CONCERNING THE COMPANY AND ITS OPERATING   
SUBSIDIARIES, INCLUDING PETERSTAR, SEE THE COMPANY'S ANNUAL REPORT ON FORM 10-K 
FOR THE YEAR ENDED DECEMBER 31, 1997 AND THE COMPANY'S QUARTERLY REPORT ON FORM 
10-Q FOR THE QUARTER ENDED MARCH 31, 1998, BOTH OF WHICH, AS AMENDED, ARE       
INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT.                              

PETERSTAR COMPANY LIMITED                                                       

   PeterStar, in which the Company currently owns a 60% interest, operates a
fully digital, city-wide fiber optic telecommunications network in St.          
Petersburg that is interconnected with the network of PTN, the local telephone  
company, as well as the Russian national and international long distance        
systems. PeterStar provides integrated, high quality, digital telecommunications
services with modern transmission equipment, including local, national and      
international long distance and value-added services, to businesses in St.      
Petersburg. The PeterStar network provides an alternative to the PTN network,   
which to date has been characterized by significant capacity constraints.       
PeterStar is able to provide integrated telecommunications services to business 
customers, including users of high bandwidth voice, data and video              
communications services. PeterStar's network is designed to support a wide range
of telecommunications products and services with a high degree of reliability.  
Additionally, PeterStar provides the three cellular operators in St. Petersburg 
with access to digital switching and transmission capacity which significantly  
improves their ability to consistently receive and deliver their customers'     
traffic. As of December 31, 1997, PeterStar had a total of 114,774 lines, of    
which 85,948 were provided to cellular operators.                               

    PeterStar, which started limited service in 1993, generated net income for
the year ended December 31, 1997 of $16.5 million on operating revenues of $54.5
million, as compared to net income of $5.9 million on operating revenues of     
$32.5 million for the year ended December 31, 1996. Subscriber lines installed  
increased from 52,005 at the end of 1996 to 114,774 at December 31, 1997,       
reflecting increased penetration of the business community and cellular         
operators. PeterStar accounted for 47.6% of the Company's operating revenues for
the year ended December 31, 1997, as compared to 52.4% for the year ended       
December 31,1996.                                                               

   PeterStar's strategy is to meet the growing demands of business customers
and other network operators in St. Petersburg through the expansion of its      
current numbering capacity of 100,000 lines allocated by the Russian Federal    
Committee on Telecommunications and Informatics to a total of approximately     
200,000 lines by 2001. PeterStar has recently added incremental transmission    
capacity and upgraded its transmission network from STM-4 to STM-16, as well as 
introducing new service features such as ISDN capability, which allows          
simultaneous transmission of voice, data, video and still images. In addition,  
as part of its strategic relationship with PTN, PeterStar intends to continue to
provide targeted support to PTN in its efforts to upgrade and modernize its     
network. The business environment in St. Petersburg continues to improve, with  
the ongoing growth of small to mid-sized Russian and foreign businesses and the 
development of the banking and financial services industries. PeterStar has     
placed increased emphasis on this market segment in order to capitalize on what 
it considers to be a significant market opportunity.                            

  PeterStar has recently commenced several projects designed to expand its
direct dial services in St. Petersburg and Northwest Russia. PeterStar has      
agreed with PTN to undertake a major infrastructure project involving the       
replacement of analog exchanges with digital exchanges for certain parts of the 
network on Vassilievski Island, a city district in St. Petersburg. This project 
will require the conversion of approximately 30,000 business and residential    
lines that are currently operated by PTN, after which such lines become a part  
of the PeterStar network. In addition, PeterStar plans to further enhance its   
transit network capabilities in order to provide continued support to the       
cellular and other network providers in terminating traffic in St. Petersburg   
and to the national and international gateway.                                  

   FOR ADDITIONAL INFORMATION CONCERNING PETERSTAR, SEE THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997 AND THE COMPANY'S      
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998, BOTH OF     
WHICH, AS AMENDED, ARE INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT.       

18

DEF 14A
21st Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 21st

RECENT DEVELOPMENTS                                                             

    In recent weeks there has been considerable turmoil and uncertainty in the
Russian financial markets, prompted in large part by the crisis in the Asian    
financial markets which began in late 1997 and is still continuing, and the     
economic and political problems being experienced by a number of Asian          
countries. The Russian Rouble has been under significant pressure, requiring the
Russian government to raise interest rates substantially, and to seek assistance
from the International Monetary Fund in order to defend its currency. These     
developments have been accompanied by a substantial decline in the Russian stock
market, the Moscow Times Index having dropped over 50% since January 1, 1998.   

At the present time it is not possible to predict whether the Russian 
government will be successful in avoiding a devaluation of the Rouble, or when  
stability will return to its financial markets. Any devaluation of the Rouble   
could exacerbate existing economic problems in Russia. Such devaluation would   
not immediately affect the Company's operating subsidiaries which, although they
receive payment in local currencies, invoice by reference to U.S. Dollars.      
However, increased economic difficulties in Russia could have an impact on the  
Company's operating subsidiaries, the effect of which it is impossible to assess
at the present time. There can be no assurance that these developments will not 
have a material adverse effect upon the Company in the future.                  

  Under the terms of the Company's Senior Notes due 2004 and its Revolving
Credit Notes due 1998, the interest rate payable increases if the Company has   
not raised $20,000,000 in additional equity by May 31, 1998. The Company did not
complete such an equity offering by such date and accordingly the interest rate 
on the Senior Notes increased from 14% to 14.5% per annum, and the interest rate
on the Revolving Credit Notes increased from 12% to 15% per annum, in each case 
effective June 1, 1998. Such rates revert to their former levels once the equity
offering has been completed. The accreted value of the Senior Notes as of March 
31, 1998 was $99.7 million. Interest due thereon accretes until December 1,     
1998, and thereafter is payable in cash, semi-annually, on each June 1 and      
December 1 thereafter. The amount currently outstanding in respect of the       
Revolving Credit Notes is $15,420,000, and interest is payable thereon monthly  
in cash.                                                                        

CORPORATE STRUCTURE                                                             

  The following charts show the corporate structure of the Company and its
material interests (but exclude intermediate holding companies such as CIBBV and
Holdings), both before and after the transactions contemplated by the Asset     
Exchange Agreement, the C&W-News Agreement and the BELCEL Acquisition Agreement,
together with the percentage of equity ownership of the Company and Technocom in
each operating subsidiary and other significant investments.                    

19

DEF 14A
22nd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 22nd

Before the contemplated transactions:                                 

[CORPORATE STRUCTURE] 
---------------                                                                 
(1) Navona Communications Corporation Limited, a Bermuda company, is a wholly   
owned subsidiary of C&W.                                                

20

DEF 14A
23rd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 23rd

After the contemplated transactions:                                  

[CORPORATE STRUCTURE CHART] 
---------------                                                                 
(1) News PLD LLC, a Delaware holding company, is a wholly owned subsidiary of   
News America Incorporated.                                              

21

DEF 14A
24th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 24th

PLD TELEKOM INC. SECURITY OWNERSHIP 

The following table sets forth certain information (as of May 30, 1998, except  
as otherwise noted), with respect to shares of Common Stock beneficially owned  
by owners of more than five percent of the outstanding Common Stock, by all     
current directors and nominees, by the executive officers of the Company named  
in the Summary Compensation Table included elsewhere in this proxy statement and
by all current directors and executive officers of the Company as a group, both 
on an actual ownership basis and after giving effect to the transactions        
contemplated by the Asset Exchange Agreement, the C&W-News Agreement and the    
BELCEL Acquisition Agreement.                                                   

                                                        [Enlarge/Download Table]

                                                        ACTUAL              AFTER THE TRANSACTIONS(3) 
                                              ---------------------------  ---------------------------
                                                 NUMBER                       NUMBER                  
                                               OF SHARES                    OF SHARES                 
                                              BENEFICIALLY      PERCENT    BENEFICIALLY      PERCENT  
BENEFICIAL OWNER                                OWNED(1)      OF CLASS(2)    OWNED(3)      OF CLASS(3)
----------------                              ------------    -----------  ------------    -----------
                                                                                                      
Cable and Wireless plc(4)...................   10,305,739        30.5%              --          --    
News PLD LLC(5).............................           --          --       14,631,780        38.4%   
Princeton Services, Inc.(6).................    7,013,856        18.1%       7,013,856        16.2%   
BEA Associates(7)...........................    2,165,000         6.5%       2,165,000         5.7%   
Citibank, N.A.(8)...........................    1,928,525         5.8%       1,928,525         5.1%   
James R.S. Hatt(9)..........................      374,999         1.1%         374,999           *    
John G. Davies(10)..........................      333,333           *          333,333           *    
Simon Edwards(11)...........................      318,666           *          318,666           *    
Alan G. Brooks(12)..........................      151,500           *          151,500           *    
Conor Carroll(13)...........................      152,500           *          152,500           *    
Robert Smith(14)............................      149,666           *          149,666           *    
Dr. Boris Antoniuk(15)......................    1,326,240         4.0%       1,326,240         3.5%   
Edward Charles Dilley.......................           --          --               --          --    
Gordon Humphrey(10).........................       10,000           *           10,000           *    
Gennady Kudriavtsev(10).....................       10,000           *           10,000           *    
Dr. Vladimir Kvint(10)......................       10,000           *           10,000           *    
I. Martin Pompadur(10)......................       10,000          --           10,000           *    
Julian Rawle................................           --          --               --          --    
David M. Stovel(10).........................       22,500           *           22,500           *    
All current directors and executive officers                                                          
  of the Company as a group (14 persons)....    2,717,904         7.8%       2,717,904         6.9%   

---------------                                                                 
 (1) In accordance with Commission regulations, the table lists all shares as to
which such persons have or share the power to vote or to direct       
   disposition. The number of shares indicated includes shares issuable upon
the exercise of outstanding stock options, warrants or convertible    
  securities held by each individual or group to the extent exercisable or
    convertible at May 30, 1998 or within 60 days thereafter. Unless otherwise
     indicated, each person has the sole power to vote and to direct disposition
of the shares listed as beneficially owned by such person.            

(2) Percentage for each individual or group calculated with reference to an   
    aggregate of 33,520,748 shares of Common Stock outstanding at May 30, 1998
 and all shares issuable upon the exercise of outstanding stock options,
    warrants or convertible securities that are exercisable by such individual
   or group within 60 days of May 30, 1998. Percentages of less than 1% have
not been indicated.                                                   

(3) The number of shares of Common Stock beneficially owned and the percentage
 of the outstanding Common Stock after giving effect to the transactions
  contemplated by the Asset Exchange Agreement, the C&W-News Agreement and
 the BELCEL Acquisition Agreement. The percentage for each individual or
group has been calculated with reference to an aggregate of 37,846,789
shares of Common Stock to be outstanding after the completion of the  
transactions contemplated by the Asset Exchange                       

22

DEF 14A
25th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 25th

     Agreement, the C&W-News Agreement and the BELCEL Acquisition Agreement, and
all shares issuable upon the exercise of outstanding stock options,   
    warrants or convertible securities that are exercisable by such individual
   or group within 60 days of May 30, 1998. Percentages of less than 1% have
not been indicated.                                                   

 (4) This information is based upon Amendment No. 6 to Schedule 13D, filed April
 21, 1998, with the Commission by C&W, a corporation organized under the
 laws of England and located at 124 Theobalds Road, London WC1X 8RX. The
  amount shown includes currently exercisable warrants to purchase 250,000
shares of Common Stock held by C&W. The remaining shares are held by  
    Navona, a Bermuda corporation and a wholly owned subsidiary of C&W. Navona
  is located at Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda. C&W
  has agreed to sell, and News has agreed to acquire, the shares of Common
Stock and the warrants pursuant to (and subject to the terms and      
conditions) of the C&W-News Agreement.                                

(5) The amount shown represents (i) 10,555,739 shares of Common Stock and a   
     warrant to purchase an additional 250,000 shares of Common Stock which News
     has agreed to acquire from C&W pursuant to, and on the terms and conditions
  set forth in, the C&W-News Agreement and (ii) 3,826,041 shares of Common
     Stock which the Company has agreed to issue to News pursuant to, and on the
     terms and conditions set forth in, the Asset Exchange Agreement. The shares
  of Common Stock and the warrant will be held by News PLD LLC, a Delaware
 limited liability company and a wholly owned subsidiary of News America
  Incorporated, which is located at 1221 Avenue of the Americas, New York,
New York 10036.                                                       

(6) This information is based upon Amendment No. 2 to Schedule 13G, filed     
    February 2, 1998, with the Commission by Princeton Services, Inc. ("PSI"),
     Merrill Lynch Asset Management, L.P. ("Merrill Lynch Asset Management") and
     Merrill Lynch Global Allocation Fund, Inc., each of which is located at 800
    Scudders Mill Road, Princeton, New Jersey 08536. The amount shown includes
shares of Common Stock issuable upon the conversion of 9% Convertible 
Subordinated Notes of the Company (CUSIP 71623PAC) (the "Convertible  
  Notes") and upon exercise of warrants to purchase shares of Common Stock
   (CUSIP 71623PAA) (the "Warrants"). In the aggregate, PSI may be deemed to
  beneficially own 1,698,200 shares of Common Stock, $19,200,000 aggregate
principal amount of Convertible Notes and 74,500 warrants. Each such  
     warrant may be exercised for 34 shares of Common Stock at an exercise price
   of $6.60 per share. The Convertible Notes are convertible, at the rate of
   144.93 shares per $1,000 principal amount, at a conversion price of $6.90
per share. PSI disclaims beneficial ownership of the securities of the
Company.                                                              

 (7) This information is as of December 31, 1997 and is based upon Schedule 13F,
    filed with the Commission by BEA Associates, Inc., which is located at 153
East 53rd Street, New York, New York 10022.                           

 (8) This information is as of December 31, 1997 and is based upon Schedule 13G,
filed February 13, 1998, with the Commission by Citicorp and Citibank,
N.A., which are located at 399 Park Avenue, New York, New York 10043. 

 (9) The amount shown includes currently exercisable options to purchase 329,999
shares of Common Stock.                                               

(10) The amount shown consists entirely of currently exercisable options to     
purchase shares of Common Stock.                                      

(11) The amount shown includes currently exercisable options to purchase 306,666
shares of Common Stock.                                               

(12) The amount shown includes currently exercisable options to purchase 150,000
shares of Common Stock.                                               

(13) The amount shown includes currently exercisable options to purchase 150,000
shares of Common Stock.                                               

(14) The amount shown includes currently exercisable options to purchase 149,166
   shares of Common Stock. Mr. Smith was an executive officer of the Company
    as of December 31, 1997 but he will not be considered as such for the 1998
fiscal year.                                                          

(15) The amount shown includes 1,316,240 shares held by P.S. Marketing &        
   Consultancy Services Limited "P.S. Marketing"), which were issued to P.S.
  Marketing, at the direction of Elite International Limited ("Elite"), in
    connection with the November 1997 acquisition by the Company from Elite of
additional                                                            

23

DEF 14A
26th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 26th
    interests in Technocom. Elite is an Irish company owned by a trust advised
by Dr. Antoniuk and the shares of Common Stock are deemed to be       
beneficially owned by Dr. Antoniuk. The amount shown also includes    
  currently exercisable options to purchase 10,000 shares of Common Stock.
Elite is the beneficial owner of 10 ordinary shares, par value IRPound
 Sterling 1.00, of Technocom, an Irish corporation and subsidiary of the
Company, representing 5.03% of the outstanding ordinary shares of     
Technocom. The Company understands that Dr. Antoniuk has the power to 
    exercise the voting rights of the shares of Technocom owned by Elite. None
  of the other current directors and executive officers of the Company own
    any ordinary shares of Technocom, in which the Company owns a 80.4% equity
interest.                                                             

24

DEF 14A
27th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 27th

ELECTION OF DIRECTORS 

    The Board currently consists of ten members. Each director is elected each
year to hold office for a one year term and until the election and qualification
of the director's successor or until the director's death, removal or           
resignation.                                                                    

James R.S. Hatt, Boris Antoniuk, Edward Charles Dilley, Simon Edwards,
Gordon Humphrey, Gennady Kudriavtsev, Vladimir Kvint, I. Martin Pompadur, Julian
Rawle and David M. Stovel, all of whom are current members of the Board, have   
been nominated by the Board of Directors for election as directors at the       
Meeting.                                                                        

 All nominees have consented to be named and to serve if elected. Unless
otherwise instructed by the stockholders, the persons named in the proxies will 
vote the shares represented thereby for the election of such nominees. The Board
of Directors believes that all nominees will be able to serve as directors; if  
this should not be the case, however, the proxies may be voted for one or more  
substitute nominees to be designated by the Board of Directors or the board may 
decide to reduce the number of directors. THE BOARD OF DIRECTORS UNANIMOUSLY    
RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.                                     

Upon closing of the transactions contemplated by the Asset Exchange   
Agreement, as well as the BELCEL Acquisition Agreement and C&W-News Agreement,  
four current directors will resign from the Board and, pursuant to the terms of 
the Directors Nomination Agreement, News will designate, and the Company will   
nominate, four persons to fill the vacancies created by their resignations. Two 
of the current directors who will resign will be Messrs. Dilley and Rawle, the  
designees of Navona. However, at present, it is not finally determined which    
other current directors will resign. This determination is not expected to be   
made until shortly before the closing of the transactions described above. It is
anticipated that, upon the nomination of the News designees, the remaining      
members of the Board will elect such nominees to fill the vacancies created by  
the resignations of the four members of the Board mentioned in the previous     
sentence. See "The Asset Exchange -- Directors Nomination Agreement" for a      
description of the terms of the Directors Nomination Agreement. If the          
transactions contemplated by the Asset Exchange Agreement, the BELCEL           
Acquisition Agreement and the C&W News Agreement are not consummated, the       
members of the Board will remain unchanged.                                     

NOMINEES FOR ELECTION 

                                                        [Enlarge/Download Table]

                                YEAR FIRST BECAME DIRECTOR, PRINCIPAL OCCUPATIONS DURING  
    NAME OF DIRECTOR     AGE           PAST FIVE YEARS AND CERTAIN DIRECTORSHIPS          
    ----------------     ---    --------------------------------------------------------  
                                                                                          
Dr. Boris Antoniuk...... 49   Dr. Antoniuk has served as a Director of the Company since  
                              June 1997 and as Group Director -- CIS and Russia of the    
                              Company since November 1997. He has many years' experience  
                              in the telecommunications field, having worked for various  
                              government agencies and trade delegations in the Soviet     
                              Union and Russia since 1974, including six years as head of 
                              the U.S. department of the USSR State Committee for Science 
                              and Technology in Moscow and three years as economic adviser
                              to a deputy Prime Minister of the USSR Council of Ministers.
                              Since the economic liberalization of Russia, he has been    
                              involved in a number of commercial ventures, including the  
                              publishing of several Russian computer magazines. Dr.       
                              Antoniuk has served as general manager of Technocom and     
                              Chairman and Chief Executive Officer of Teleport-TP since   
                              1992. Both Technocom and Teleport-TP are operating          
                              subsidiaries of the Company. He also holds the post of      
                              Deputy Chairman of Technopark, a subsidiary of Technocom.   

25

DEF 14A
28th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 28th

                                                        [Enlarge/Download Table]

                                YEAR FIRST BECAME DIRECTOR, PRINCIPAL OCCUPATIONS DURING  
    NAME OF DIRECTOR     AGE           PAST FIVE YEARS AND CERTAIN DIRECTORSHIPS          
    ----------------     ---    --------------------------------------------------------  
                                                                                          
Edward Charles                                                                            
  Dilley(1)............. 59   Mr. Dilley has served as a Director of the Company since    
                              June 1997. Since January 1996, Mr. Dilley has been Director 
                              of Corporate Financial Services for C&W. Prior to joining   
                              C&W, he was employed by Barclays Bank for 40 years,         
                              including in several executive positions. From 1988 to      
                              December 1995, he was Business Centre Director for Barclays 
                              Bank.                                                       
Simon Edwards........... 35   Mr. Edwards has served as Director of the Company since June
                              1997, as Chief Financial Officer of the Company since       
                              October 1995 and Senior Vice President and Treasurer since  
                              February 1997. He was previously Director of Finance for C&W
                              Europe from October 1994 to September 1995. From July 1992  
                              to October 1994, he held a number of corporate finance      
                              positions within C&W. From July 1988 to June 1992 he was a  
                              management consultant with Arthur Andersen.                 
James R.S. Hatt......... 38   Mr. Hatt has served as a Director of the Company since June 
                              1994, as Chief Executive Officer since January 1995 and as  
                              Chairman since June 1995. His career has been exclusively   
                              devoted to building telecommunications businesses in        
                              developed and emerging countries around the world. Prior to 
                              joining the Company, Mr. Hatt worked in a number of senior  
                              positions at C&W, involved extensively in privatizatons and 
                              new business development. From 1988 to January 1995, he was 
                              Group Manager for Business Development, Europe, where he was
                              responsible for corporate development activities in Europe, 
                              the Middle East, India, the CIS, the Baltic States and      
                              Scandinavia.                                                
Gordon Humphrey......... 57   Senator Humphrey has served as a Director of the Company    
                              since June 1997. He served two terms as United States       
                              Senator from the State of New Hampshire, from 1979 to 1991, 
                              where he was a member of the Committee on Foreign Relations,
                              the Armed Services Committee and the Judiciary Committee.   
                              Upon his return to the private sector in 1991, Senator      
                              Humphrey founded the Humphrey Group, Inc., which serves     
                              clients in international commerce, with primary focus on    
                              Russia and the CIS.                                         
Gennady Kudriavtsev..... 57   Mr. Kudriavtsev has served as a Director of the Company     
                              since June 1997. He has many years of telecommunications    
                              experience in Russia and the former Soviet Union. He has    
                              served as Director General of Intersputnik, a Russian       
                              state-owned satellite operator since 1992. Prior to the     
                              breakup of the former Soviet Union, he served as Minister of
                              Communications of the USSR.                                 
Dr. Vladimir Kvint...... 48   Dr. Kvint has served as a Director of the Company since June
                              1997. He is currently Professor, Management Systems and     
                              International Business at Fordham University Graduate School
                              of Business and Adjunct Professor of Management Strategy at 
                              the Stern School of Business, New York University. Dr. Kvint
                              is a Full Lifetime Member of the Russian Academy of Natural 
                              Sciences. From 1989 until 1995 he was a consultant to C&W   
                              Executive Chairman, Lord David Young. From 1992 to 1997, he 
                              was Director, Emerging Markets for Arthur Andersen LLP. He  
                              has published numerous articles and books on emerging       
                              Eastern European markets.                                   

26

DEF 14A
29th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 29th

                                                        [Enlarge/Download Table]

                                YEAR FIRST BECAME DIRECTOR, PRINCIPAL OCCUPATIONS DURING  
    NAME OF DIRECTOR     AGE           PAST FIVE YEARS AND CERTAIN DIRECTORSHIPS          
    ----------------     ---    --------------------------------------------------------  
                                                                                          
I. Martin Pompadur...... 63   Mr. Pompadur has served as a Director of the Company since  
                              May 1998. Since 1988, he has been the President and CEO of  
                              RP Companies, Inc. and he is currently the Chairman, Chief  
                              Executive Officer and Chief Operating Officer of a number of
                              limited partnerships which operate network-affiliated       
                              television stations, radio stations and cable television    
                              systems. From 1977 to 1982, Mr. Pompadur was President of   
                              Ziff Corporation and, prior to joining Ziff, he was with    
                              American Broadcasting Companies for 17 years in several     
                              senior executive positions, including as a member of its    
                              Board of Directors. Mr. Pompadur has been actively involved 
                              in various business ventures in Moscow and the CIS since    
                              1990.                                                       
Julian Rawle(1)......... 36   Mr. Rawle has served as a Director of the Company since     
                              March 1998. He joined C&W in April 1995 and is currently the
                              Representative Director of the C&W CIS office in Moscow.    
                              Prior to joining C&W, Mr. Rawle worked for several          
                              international petroleum companies in Russia and Kazakhstan. 
                              From 1990 to 1993, he was Business Development Manager -- BP
                              International Lubricants Marketing in Moscow, where he was  
                              responsible for setting up BP's first sales office in the   
                              former Soviet Union. From 1993 to 1995, he was a Business   
                              Development Consultant for Chevron involved in business     
                              planning and other projects in Russia and Kazakhstan.       
David M. Stovel......... 49   Mr. Stovel has served as a Director of the Company since    
                              February 1993. He has been President of Brawley Cathers     
                              Limited, an investment bank headquartered in Toronto, Canada
                              since 1987.                                                 

---------------                                                                 
(1) Pursuant to an agreement dated March 3, 1994 between Navona and the Company,
  the Company agreed to nominate two individuals designated by Navona to the
Company's board of directors so long as Navona holds at least 25% of the
total voting shares of the Company. Messrs. Dilley and Rawle are the    
nominees of Navona.                                                     

GENERAL INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES        

     The Board of Directors of the Company met on 12 occasions during 1997. With
the exception of Mr. Kudriavtsev, each director attended at least 75% of the    
aggregate of the meetings of the Board of Directors held during the period for  
which he was a director. Pursuant to applicable Canadian law, to which the      
Company was subject prior to February 28, 1997 as a corporation organized under 
the Business Corporations Act (Ontario), the Company was required to have an    
audit committee of the Board of Directors. The Delaware General Corporation Law,
to which the Company was subject as of February 28, 1997, provides that the     
Board of Directors, by resolution adopted by a majority of the entire board, may
designate one or more committees, each of which shall consist of one or more    
directors.                                                                      

     Compensation Committee.  The Compensation Committee, consisting of David M.
Stovel, Edward Charles Dilley and Dr. Vladimir Kvint, currently has the         
authority to approve salaries, bonuses, stock option grants and other           
compensation matters for officers of the Company and to approve employee health 
and benefit plans. David L. Heavenridge was the Chairman of the Compensation    
Committee prior to his resignation from the Board of Directors in October 1997, 
at which time Dr. Kvint was appointed to replace him on the Compensation        
Committee. Prior to the continuance of the Company from Ontario to Delaware in  
February 1997, Robert Smith also served on the Compensation Committee. In       
addition, prior to the continuance, the Compensation Committee did not have the 
authority to approve stock option grants, which were approved by the entire     
Board of Directors. The Compensation Committee met two times during 1997. Each  
member of the Compensation Committee attended the meeting or meetings of the    
Compensation Committee in 1997 held during the period for which he was a member 
of the committee.                                                               

27

DEF 14A
30th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 30th

    Audit Committee.  The Audit Committee, consisting of Edward Charles Dilley
and David M. Stovel has the authority to recommend the appointment of the       
Company's independent auditors and review the results and scope of audits,      
internal accounting controls and tax and other accounting related matters. The  
Audit Committee met three times during 1997. Each member of the Audit Committee 
attended the meeting or meetings of the Audit Committee in 1997 held during the 
period for which he was a member of the committee. Mr. Smith was a member of the
Audit Committee until his resignation as a director in May 1998.                

CERTAIN BUSINESS RELATIONSHIPS WITH DIRECTORS AND NOMINEES                      

    During 1994 and 1995, C&W provided services to and met certain liabilities
of the Company. At December 31, 1995, the aggregate amount owed to C&W under    
these arrangements was $1,843,000. These amounts were repaid in 1996. C&W and   
the Company are parties to a support services agreement, pursuant to which, on  
an arms'-length basis, the Company and its subsidiaries have access to C&W's    
resources. During 1997, the Company paid an aggregate of approximately $400,000 
to C&W for services provided under such agreement.                              

  The Company entered into an agreement as of January 1, 1995 with Newmark
Capital Limited ("Newmark") with respect to the provision of the services of    
Robert Smith as a consultant to the Company and to act as Chairman of ALTEL. The
agreement provides for the payment of $100,000 per annum (plus additional       
amounts depending on the amount of time devoted by Mr. Smith to the affairs of  
the Company or ALTEL) and is terminable for cause or by either party upon two   
years notice of termination. In addition, Newmark has the option of terminating 
the agreement in the event of a change of control of the Company (defined as    
control of more than 30% of all outstanding voting shares being acquired by any 
person or persons acting in concert other than C&W and its affiliates) and shall
be terminated if Mr. Smith shall be removed from the office of Chairman of      
ALTEL, in which events Newmark shall be entitled to the payment of two years    
remuneration. In 1997, Newmark received $100,000 with respect to the provision  
of Mr. Smith's services. Mr. Smith is President of Newmark. In May 1998, the    
Company and Newmark agreed to terminate the agreement, in exchange for a cash   
payment of $200,000 from the Company to Newmark. At such time, Mr. Smith        
resigned as a director of the Company, Chairman of ALTEL and ceased providing   
consulting services to the Company.                                             

   On November 26, 1997 the Company acquired a further 59 ordinary shares of
Technocom from the two minority shareholders of Technocom, thereby increasing   
its percentage interest in Technocom from 50.75% to 80.4%. The Company acquired 
29 of these shares from Elite, an Irish company beneficially owned by a trust   
advised by Dr. Antoniuk. The total consideration for the shares purchased from  
Elite was $6.25 million in cash and 1,316,240 shares of the Company's Common    
Stock. Sale of these shares is prohibited prior to January 1, 2000.             

   In addition, the Company restructured certain "put and call" arrangements
with the other two shareholders of Technocom. Under these arrangements as       
originally structured the remaining ordinary shares of Technocom held by these  
shareholders (10 shares, or approximately 5% of the total ordinary shares       
outstanding, in the case of Elite) were to have been independently valued in    
1999 and the Company had the right to call, and Elite and the other shareholder 
had the right to put, their respective interests at the per share value         
established by the valuation. These arrangements were restructured as follows.  
In the case of Elite, two of its remaining ten ordinary shares were made subject
to a new put and call arrangement which would come into effect in 1998, with the
"put and call" price to be $1 million or, at Elite's option, that number of     
shares of the Common Stock which resulted from dividing $1 million by the lower 
of $5.85 and the average closing price of such shares over the preceding ten    
trading days. The remaining eight ordinary shares continued to be subject to the
existing put and call arrangements in 1999, except that the valuation would be  
made by the Company and that the amount paid pursuant to the exercise of either 
the put or the call could not exceed $9,620,689 or be less than $6,689,655.     

Technocom has entered into a consulting agreement with Elite for the  
provision to Technocom of the services of Dr. Antoniuk for a period expiring on 
June 30, 2002, pursuant to which Technocom paid Elite fees equal to $108,333 per
annum for the term of the agreement, reviewable periodically, plus the          
reasonable                                                                      

28

DEF 14A
31st Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 31st

expenses of Dr. Antoniuk. As of November 26, 1997, the annual fees payable to   
Elite under this agreement were increased to $158,333.                          

In addition, pursuant to a Service Agreement, dated as of November 26,
1997, with the Company, Dr. Antoniuk has been employed since such date as Group 
Director -- Russia and CIS, at an annual salary of $50,000. The agreement may be
terminated without cause by either party upon six months prior written notice or
for cause as specified; provided that, if either party gives notice of          
termination of employment with the Company, the Company may, in its sole        
discretion, terminate such employment immediately upon the payment of the lump  
sum of six months' gross salary. Dr. Antoniuk may also terminate his employment 
with the Company upon three months prior written notice upon a change in control
of the Company, as defined in the Company's Equity Compensation Plan (a "Change 
of Control"). Upon termination without cause by the Company or upon termination 
by Dr. Antoniuk upon a Change of Control, Dr. Antoniuk is to receive as a       
termination fee an amount equal to two times his then current annual salary from
the Company.                                                                    

   Since June 16, 1997, Dorothea Hatt, the wife of James Hatt, the Company's
President and Chief Executive Officer, has been employed as Legal Assistant of  
the Company at an annual salary of $75,000.                                     

29

DEF 14A
32nd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 32nd

EXECUTIVE OFFICERS OF THE COMPANY 

Set forth below is certain information regarding each of the executive
officers of the Company as of December 31, 1997.                                

                                                        [Enlarge/Download Table]

        EXECUTIVE OFFICERS         AGE                          POSITION                  
        ------------------         ---                          --------                  
                                                                                          
James R.S. Hatt(1)................ 38   President and Chief Executive Officer             
John Davies(2).................... 51   Deputy Chief Executive Officer and Chief Operating
                                        Officer                                           
Simon Edwards(1).................. 35   Senior Vice President, Chief Financial Officer and
                                        Treasurer                                         
Alan G. Brooks(3)................. 56   Special Projects Director                         
Conor Carroll(4).................. 31   Vice President, Operations                        
Robert Smith(5)................... 60   Former Chairman, BECET International              

---------------                                                                 
(1) See "Directors" for biographical information.                               

(2) Mr. Davies has served as Deputy Chief Executive Officer of the Company since
 June 1997 and as Chief Operating Officer of the Company since February 1,
   1998. Previously, from 1995 to 1997, he was a director and partner in Beldi
  & Cie SA providing services to a multinational companies and entrepreneur.
From 1987 to 1995, he was one of the founding directors of Financiere   
  Indosuez, a subsidiary of the Suez Group, which was active in cross-border
 mergers and acquisitions and corporate finance. Prior to that, Mr. Davies
served as a business consultant and a vice president for international  
finance of a privately-owned shipping and commodity trading group.      

(3) Mr. Brooks has served as Special Projects Director of the Company since     
  February 1, 1998. He served as Chief Operating Officer of the Company from
 January 1996 through January 1998 and Senior Vice President from February
1997 through January 1998. Previously, he served in a number of senior  
 management positions with C&W for over 30 years, most recently in Sweden,
    Japan, Papua New Guinea and the Middle East. Mr. Brooks was on secondment to
the Company from C&W from March 1995 until December 1995.               

(4) Mr. Carroll has served as Vice President, Operations of the Company since   
   February 1997. From January 1995 until February 1997 he was Vice President,
    Business Development of the Company. From 1991 to December 1994, Mr. Carroll
was Business Development Manager for C&W Europe.                        

(5) Mr. Smith served as a Director of the Company from September 1993 until May 
1998. Until May 1998, he also served as Chairman of ALTEL, an operating 
   subsidiary of the Company. He was an executive officer of the Company as of
   December 31, 1997 but he will not be considered as such for the 1998 fiscal
   year. He has been President of Newmark, a private investment and consulting
 company, since 1992. From 1990 to 1992, he was Chief Executive Officer of
the First Hungarian Investment Advisory RT.                             

30

DEF 14A
33rd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 33rd

COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

    The following table sets forth for the years ended December 31, 1997, 1996
and 1995 certain compensation paid by the Company to its Chief Executive Officer
and the four other most highly paid executive officers of the Company.          

SUMMARY COMPENSATION TABLE

                                                        [Enlarge/Download Table]

                                                                                     LONG TERM  
                                                     ANNUAL COMPENSATION            COMPENSATION
                                           ---------------------------------------  ------------
                                                                                     SECURITIES 
                                                                    OTHER ANNUAL     UNDERLYING 
    NAME AND PRINCIPAL POSITION      YEAR  SALARY(1)     BONUS     COMPENSATION(2)    OPTIONS   
    ---------------------------      ----  ---------    --------   ---------------  ------------
                                                                                                
James R.S. Hatt..................... 1997  $390,000     $117,000       $78,000            -0-   
  Chairman, President and            1996  $290,000     $191,000       $58,000        250,000   
  Chief Executive Officer            1995  $220,000     $ 75,000       $44,000        200,000   
John Davies......................... 1997  $175,000(3)  $ 52,500       $17,500        500,000   
  Deputy Chief Executive Officer     1996        --           --            --             --   
  and Chief Operating Officer        1995        --           --            --             --   
Simon Edwards....................... 1997  $325,000     $ 97,500       $65,000            -0-   
  Senior Vice President, Chief       1996  $225,000     $165,000       $45,000        200,000   
  Financial Officer and Treasurer    1995  $ 43,750     $ 15,000       $ 8,750        150,000   
Conor Carroll....................... 1997  $150,700     $ 45,210       $30,140            -0-   
  Vice President, Operations         1996  $150,700     $ 90,280       $30,140        150,000   
                                     1995  $110,000     $ 14,300       $22,000         50,000   
Robert Smith........................ 1997  $100,000(4)       -0-           -0-            -0-   
  Former Chairman of ALTEL           1996  $145,833(4)       -0-           -0-        100,000   
                                     1995  $200,000(4)       -0-           -0-            -0-   
Alan G. Brooks...................... 1997  $200,000     $ 60,000           -0-        150,000   
  Special Projects Director          1996  $149,500     $ 40,000           -0-            -0-   
                                     1995       -0-          -0-           -0-            -0-   

---------------                                                                 
(1) All amounts are stated in U.S. Dollars. Certain amounts were paid to Messrs.
   Hatt, Edwards, Carroll and Brooks in British Pounds and have been converted
to U.S. Dollars at a conversion rate of $1.50/Pound Sterling 1.00.      

(2) Other Annual Compensation consists of amounts paid in lieu of certain       
benefits.                                                               

(3) Mr. Davies' employment with the Company commenced on June 1, 1997 and this  
amount is the amount paid to him in salary during the period June 1 to  
December 31, 1997. His current base salary is $300,000 per annum.       

(4) Amounts classified as "salary" were paid as a consulting fee to Newmark for 
    the provision of Mr. Smith's services to ALTEL and the Company. See "Certain
Business Relationships with Directors and Nominees."                    

31

DEF 14A
34th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 34th

 The following table summarizes stock options granted during 1997 to the
persons named in the Summary Compensation Table.                                

OPTION GRANTS IN LAST FISCAL YEAR 

                                                        [Enlarge/Download Table]

                                                                          POTENTIAL REALIZABLE VALUE AT 
                                      PERCENT OF                             ASSUMED ANNUAL RATES OF    
                                     TOTAL OPTIONS                         STOCK PRICE APPRECIATION FOR 
                                      GRANTED TO                                  OPTION TERM(1)        
                            OPTIONS    EMPLOYEES    EXERCISE  EXPIRATION  ------------------------------
           NAME             GRANTED     IN 1997      PRICE       DATE          5%               10%     
           ----             -------  -------------  --------  ----------  -------------    -------------
                                                                                                        
James R. S. Hatt...........     -0-         --          --          --             --               --  
John Davies................ 500,000       37.0%      $5.25     6/23/07     $1,650,848       $4,183,574  
Simon Edwards..............     -0-         --          --          --             --               --  
Conor Carroll..............     -0-         --          --          --             --               --  
Robert Smith...............     -0-         --          --          --             --               --  
Alan G. Brooks............. 150,000       11.1%      $6.00     4/27/02     $  248,653       $  549,459  

---------------                                                                 
(1) Potential Realizable Values are based on an assumption that the stock price 
of the Common Stock starts equal to the exercise price shown for each   
    particular option grant and appreciates at the annual rate shown (compounded
 annually) from the date of grant until the end of the term of the option.
   These amounts are reported net of the option exercise price, but before any
  taxes associated with exercise or subsequent sale of the underlying stock.
    The actual value, if any, an option holder may realize will be a function of
  the extent to which the stock price exceeds the exercise price on the date
the option is exercised. The actual value to be realized by the option  
holder may be greater or less than the values estimated in this table.  

   The following table summarizes option exercises during 1997 and the value
of vested and unvested options for the persons named in the Summary Compensation
Table at December 31, 1997. Year-end values are based upon a price of $5.375 per
share, which was the closing market price of a share of the Company's Common    
Stock on the Nasdaq Stock Market on December 31, 1997.                          

AGGREGATED OPTION EXERCISES IN LAST YEAR AND
YEAR-END OPTION VALUES

                                                        [Enlarge/Download Table]

                                                          NUMBER OF UNEXERCISED        VALUE OF UNEXERCISED    
                                                               OPTIONS AT             IN-THE-MONEY OPTIONS AT  
                                                            DECEMBER 31, 1997            DECEMBER 31, 1997     
                            SHARES ACQUIRED   VALUE    ---------------------------  ---------------------------
           NAME               ON EXERCISE    REALIZED  EXERCISABLE   UNEXERCISABLE  EXERCISABLE   UNEXERCISABLE
           ----             ---------------  --------  -----------   -------------  -----------   -------------
                                                                                                               
James R.S. Hatt............     90,000       $222,150    153,333        166,667             0              0   
John Davies................        -0-             --    166,666        333,334       $31,250       $104,167   
Simon Edwards..............     90,000       $250,950    126,666        133,334             0              0   
Conor Carroll..............        -0-             --     83,333        116,667             0              0   
Robert Smith...............     10,000       $ 21,886    115,833         66,666             0              0   
Alan G. Brooks.............        -0-             --    150,000            -0-             0             --   

   The Company does not currently grant any long-term incentives, other than
stock options, to its executives or other employees. Similarly, the Company does
not sponsor any defined benefit or actuarial plans at this time.                

EMPLOYMENT AGREEMENTS                                                           

  Pursuant to employment agreements, dated as of January 1, 1995, with the
Company and PLD Management Services Limited ("PLDMS"), James Hatt was employed  
(i) as Chief Executive Officer of the Company at an initial annual salary of    
$167,500 and (ii) as an Executive of PLDMS at an initial annual salary of Pound 
Sterling 35,000. During 1996, Mr. Hatt's annual salaries under these agreements 
were $237,500 and Pound Sterling 35,000, respectively. Effective as of August 1,
1997, and as a consequence of the Company moving its executive offices          

32

DEF 14A
35th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 35th

to the United States, the agreement with PLDMS was terminated, and the agreement
with the Company was amended and restated so as, inter alia, to combine the     
salary and other compensation arrangements previously provided by the two       
separate agreements. Under the amended and restated agreement Mr. Hatt's annual 
salary was $390,000 for 1997. In addition to his salary, an amount equal to     
twenty percent of his then current salary amount is payable by the Company to   
Mr. Hatt annually in lieu of all pension and other benefits. The agreement may  
be terminated without cause by either party upon six months prior written notice
or for cause as specified; provided, that if Mr. Hatt gives notice of           
termination of employment with the Company, the Company may, in its sole        
discretion, terminate employment immediately upon the payment of the lump sum of
six months' gross salary. Mr. Hatt may also terminate his employment with the   
Company upon three months prior written notice upon a Change of Control. Upon   
termination without cause by the Company or upon termination by Mr. Hatt upon a 
Change of Control, Mr. Hatt is to receive as a termination fee an amount equal  
to two times his then current annual salary from the Company.                   

 John Davies is employed as Deputy Chief Executive Officer pursuant to a
letter agreement intended to be effective as June 1, 1997, at an initial annual 
salary of $300,000. In addition, he receives an amount equal to ten percent of  
his then current salary amount annually until such time as the Company is able  
to put in place for his benefit a full range of fringe benefits, including      
pension arrangements. The agreement may be terminated without cause by either   
party upon six months prior written notice or for cause as specified. Mr. Davies
may also terminate his employment with the Company upon three months prior      
written notice upon a Change of Control. Upon termination without cause by the  
Company or upon termination by Mr. Davies upon a Change of Control, Mr. Davies  
is to receive as a termination fee an amount equal to two times his then current
annual salary from the Company.                                                 

  Pursuant to employment agreements, dated as of October 1, 1995, with the
Company and PLDMS, Simon Edwards was employed (i) as Chief Financial Officer of 
the Company at an initial annual salary of $107,500 and (ii) as an Executive of 
PLDMS at an initial annual salary of Pound Sterling 45,000. During 1996, Mr.    
Edwards' annual salaries under these agreements were $157,500 and Pound Sterling
45,000, respectively. As with Mr. Hatt, effective as of July 1, 1997 the        
agreement with PLDMS was terminated and the agreement with the Company was      
amended and restated. Under the amended and restated agreement Mr. Edwards'     
annual salary for 1997 was $325,000. In addition to his salary, an amount equal 
to twenty percent of his then current salary amount is payable by the Company to
Mr. Edwards annually in lieu of all pension and other benefits. The agreement   
may be terminated without cause by either party upon six months prior written   
notice or for cause as specified; provided, that if Mr. Edwards gives notice of 
termination of employment with the Company, the Company may, in its sole        
discretion, terminate employment immediately upon the payment of the lump sum of
six months' gross salary. Mr. Edwards may also terminate his employment with the
Company upon three months prior written notice upon a Change in Control of the  
Company. Upon termination without cause by the Company or upon termination by   
Mr. Edwards upon a Change of Control, Mr. Edwards is to receive as a termination
fee an amount equal to two times his then current annual salary from the        
Company.                                                                        

    Pursuant to an employment agreement, dated August 6, 1996, with PLDMS, Mr.
Brooks was employed as Chief Operating Officer as of July 1, 1996 at an initial 
annual salary of $200,000 and for an initial term of 18 months. During 1997, Mr.
Brooks' annual salary under this agreement was $200,000. Effective July 28,     
1997, the termination date for the agreement was extended to September 30, 1997,
and that termination date has been extended orally. Since February 1, 1998, Mr. 
Brooks has been Special Projects Director of the Company.                       

  Pursuant to employment agreements, dated as of January 1, 1995, with the
Company and PLDMS, Mr. Carroll was employed (i) as Vice President, Business     
Development of the Company at an initial annual salary of $55,000 and (ii) as an
Executive of PLDMS at an initial annual salary of Pound Sterling 36,000. During 
1996, Mr. Carroll's annual salaries under these agreements were $75,000 and     
Pound Sterling 50,000, respectively. As of February 1997, Mr. Carroll became    
Vice President, Operations of the Company. The agreement with the Company was   
amended and restated effective as of August 1, 1997 to incorporate various      
changes made in the agreements with Messrs. Hatt and Edwards, but without       
changing the overall compensation arrangements. The agreement may be terminated 
without cause by either party upon six months prior written notice or for cause 
as specified; provided, that if Mr. Carroll gives notice of termination of      
employment with the Company, the Company may,                                   

33

DEF 14A
36th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 36th

in its sole discretion, terminate employment immediately upon the payment of the
lump sum of six months' gross salary. Mr. Carroll may also terminate his        
employment with the Company upon three months prior written notice upon a Change
in Control of the Company. The agreement with PLDMS may be terminated without   
cause by either party upon thirty days prior written notice or for cause as     
specified. Upon termination without cause by the Company or upon termination by 
Mr. Carroll upon a Change of Control, Mr. Carroll is to receive as a termination
fee a specific multiple of his then annual current salary from the Company, as  
determined from time to time by the board of directors. As of December 31, 1997,
the applicable multiple for Mr. Carroll is 4.000. In addition to his salary from
the Company and PLDMS, an amount equal to twenty percent of his then current    
salary amount is payable by the Company to Mr. Carroll annually in lieu of all  
pension and other benefits. No termination payment is payable to Mr. Carroll by 
PLDMS.                                                                          

COMPENSATION OF DIRECTORS                                                       

  Non-employee directors are paid an annual directors' fees of $15,000 and
fees of $750 for each board meeting and $250 for each committee meeting         
attended, and are reimbursed for expenses incurred in connection with attendance
at Board of Directors and Committee meetings. In addition, the chairman of each 
Committee receives an additional annual fee of $5,000. Messrs. Dilley and       
Timothy Lowry (the other representative of Navona during 1997) declined all fees
during 1997, and Messrs. Dilley, Lowry and Rawle (the other representative of   
Navona since March 1998) have declined all fees during 1998. All directors are  
eligible to participate in the Company's 1997 Equity Compensation Plan (the     
"Plan"). However, non-employee directors are only permitted to receive          
non-qualified stock options under the Plan, pursuant to arrangements under      
which, subject to approval by the Board of Directors, such individuals are      
automatically awarded 10,000 options upon becoming a director and a further     
5,000 options annually, thereafter. Messrs. Dilley and Lowry declined all such  
options during 1997.                                                            

See "Certain Business Relationships with Directors and Nominees" for a
description of (i) the Company's consulting agreement with Newmark for the      
provision of services by Robert Smith during 1997, (ii) a description of certain
arrangements between the Company and C&W and (iii) a description of certain     
arrangements between the Company, Technocom and Dr. Antoniuk.                   

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     

     Mr. Hatt was on the board of directors of ALTEL during 1997. Until February
1997, Robert Smith, the Chairman of ALTEL, was a member of the Compensation     
Committee.                                                                      

The following Compensation Committee Report and the Comparative Stock 
Performance Graph shall not be deemed incorporated by reference by any general  
statement incorporating by reference this Annual Report on Form 10-K, as        
amended, into any filing under the Securities Act of 1933, as amended, or under 
the Securities Exchange Act of 1934, as amended, except to the extent that the  
Company specifically incorporates this information by reference, and shall not  
otherwise be deemed filed under such Acts.                                      

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION                  

     The Board of Directors created the Compensation Committee (the "Committee")
to have the responsibility for implementing and administrating the Company's    
compensation policies and programs for its executive officers.                  

     The Compensation Committee is responsible for setting the base salaries and
the total compensation levels of the Chief Executive Officer (the "CEO") and the
other executive officers of the Company having total annual compensation of over
$200,000 and for determining which executives, including the CEO, will be       
granted stock options and the size of such grants. Mr. Hatt does not participate
in the approval of his compensation.                                            

Prior to the continuance of the Company from Ontario to Delaware in   
February 1997, the Compensation Committee did not have the authority to approve 
stock option grants, which were approved by the entire Board of Directors.      
Robert Smith served on the Compensation Committee during 1996, but ceased to be 
a member                                                                        

34

DEF 14A
37th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 37th

of the committee in February 1997. David L. Heavenridge served on the Committee 
during his tenure as a director of the Company during 1997 and, upon his        
resignation as a director in October 1997, was replaced by Vladimir Kvint.      

Compensation Policies                                                       

    The Company's compensation policies for executive officers are designed to
(a) provide competitive compensation packages that will attract and retain      
superior executive talent, (b) link a significant portion of compensation to    
financial results, so as to reward successful performance, and (c) provide      
long-term equity compensation, to further align the interests of executive      
officers with those of stockholders and further reward successful performance.  
The principal components of the Company's executive officer compensation program
are base salary, annual cash incentive awards, and grants of stock options.     
Pursuant to the terms of the Plan, the Company's executive officer compensation 
program also includes grants of stock appreciation rights, restricted stock and 
performance units.                                                              

    Base salary levels for the Company's executive officers are reviewed on an
annual basis by the Committee and are set generally to be competitive with other
companies of comparable size and geographic location, taking into consideration 
the positions' complexity, responsibility, need for special expertise and       
personal hardships due to extensive international travel. Individual salaries   
also take into account individual experience and performance.                   

 The bonus program in 1997 was based on the performance of the Company's
principal operating subsidiaries during 1997. Bonuses earned for 1997 consisted 
of 30% of base salary for each of Messrs. Hatt, Edwards, Davies, Brooks and     
Carroll.                                                                        

Long-Term Compensation                                                      

 The Committee periodically considers the desirability of granting stock
options to officers and other employees of the Company. Prior to the Company's  
continuance as a Delaware corporation in February 1997, stock option grants were
subject to approval by the entire Board of Directors. After February 1997, the  
Committee was granted the authority to make such grants. The objective of these 
grants are to align senior management and stockholder long-term interest by     
creating a strong and direct link between the executive's accumulation of wealth
and stockholder return and to enable executives to develop and maintain a       
significant, long-term stock ownership position in the Company's Common Stock.  
Individual grants of stock options are based upon individual performance. The   
Committee believes that its past grants of stock options have successfully      
focused the Company's executive officers and other members of senior management 
on building stockholder value.                                                  

Compensation of Chief Executive Officer                                     

   In determining the compensation of Mr. Hatt, the Committee has taken into
consideration his experience, dedication, performance and contribution to the   
growth of the Company and its operating subsidiaries over the past two years,   
the personal hardships resulting from extensive international travel, including 
long periods in the countries of the former Soviet Union, and Mr. Hatt's overall
management strengths and business acumen.                                       

                                 Presented by the Compensation
              Committee:

                             David M. Stovel
                                   Edward Charles Dilley
                                Dr. Vladimir Kvint

35

DEF 14A
38th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 38th

COMPARATIVE STOCK PERFORMANCE GRAPH                                             

 The graph below compares the cumulative total stockholder return on the
Company's Common Stock with the cumulative total stockholder return of: (i) the 
Nasdaq Stock Market Composite Index (the "Nasdaq Index"); and (ii) the Nasdaq   
Telecommunications Index, assuming an investment of $100 on February 18, 1993   
(the date the Company's Common Shares were first traded in the United States on 
the Nasdaq Stock Market) in each of the Common Stock of the Company, the stocks 
comprising the Nasdaq Index and the stocks comprising the Nasdaq                
Telecommunications Index, and further assuming reinvestment of dividends, if    
any.                                                                            

                                                                [Download Table]

                                                Nasdaq Stock          Nasdaq      
        Measurement Period                    Market Composite  Telecommunications
      (Fiscal Year Covered)  PLD Telekom Inc.       Index             Index       
                                                                                  
2/18/93                           100.00           100.00             100.00      
12/31/93                          121.10           117.30             142.00      
12/31/94                           67.10           113.50             119.20      
12/31/95                           50.00           158.80             159.90      
12/31/96                           64.50           194.90             165.70      
12/31/97                           56.60           237.10             235.20      

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT 

Section 16(a) of the Exchange Act requires that directors and certain 
officers of the Company, and persons who own more than ten percent of the       
Company's Common Stock, file with the Commission initial reports of ownership   
and reports of changes of ownership of such Common Stock. Based solely on its   
review of the copies of such reports received by the Company and written        
representations from certain reporting persons that no Forms 5 were required for
those persons, the Company believes that during the year ended December 31, 1997
all filing requirements applicable to its officers, directors and ten-percent   
stockholders were satisfied, with the exception of the Initial Statements of    
Beneficial Ownership on Form 3 for Messrs. Antoniuk, Kvint and Kudriavtsev,     
current directors of the Company. Each such director was elected as a director  
of the Company in June 1997 and was obligated to file Initial Statements of     
Beneficial Ownership within 10 days of their election. Due to an administrative 
oversight, these filings were not timely made, but were filed in February 1998  
as soon as the oversight was discovered.                                        

OTHER MATTERS 

 The Board of Directors is not aware of any matters not set forth herein
that may come before the meeting. If, however, further business properly comes  
before the meeting, the persons named in the proxies will vote the shares       
represented thereby in accordance with their judgment.                          

The accounting firm of KPMG Peat Marwick LLP has been selected as the 
Company's independent auditors for the 1998 fiscal year. A representative of    
KPMG Peat Marwick LLP, the Company's auditors during 1997, is expected to be    
present at the Meeting. Such representative will have an opportunity to make a  

36

DEF 14A
39th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 39th

statement if he or she desires to do so and will be available to respond to     
appropriate questions from stockholders of the Company.                         

STOCKHOLDER PROPOSALS FOR THE 1999 ANNUAL MEETING 

  Stockholders may submit proposals on matters appropriate for stockholder
action at annual meetings in accordance with regulations adopted by the         
Commission. To be considered for inclusion in the proxy statement and form of   
proxy relating to the 1999 annual meeting, such proposals must be received by   
the Company no later than December 31, 1998. Proposals should be directed to the
attention of the Secretary of the Company.                                      

ANNUAL REPORT ON FORM 10-K

     The Company will furnish without charge to each person whose proxy is being
solicited, upon the written request of such person, a copy of the Company's     
Annual Report on Form 10-K for the year ended December 31, 1997, as amended,    
including the financial statements, but excluding exhibits. Requests for copies 
of such report should be directed to the Company, Attention: Secretary.         

                                       By order of the Board of Directors,

                   JAMES R.S. HATT
                           Chairman, President and
                               Chief Executive Officer

July 22, 1998                                                                   

37

DEF 14A
40th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 40th

                                                                      APPENDIX A
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

ASSET EXCHANGE AGREEMENT
BETWEEN 
NEWS AMERICA INCORPORATED 
AND 
PLD TELEKOM INC.

DATED APRIL 19, 1998

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

DEF 14A
41st Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 41st

TABLE OF CONTENTS 

                                                                [Download Table]

                                                                     PAGE
                                                                     ----
                                                                         
                                ARTICLE I                                
EXCHANGE OF STOCK                                                        
 1.1.  Exchange of Holdings Shares.................................   A-4
                               ARTICLE II                                
THE CLOSING                                                              
 2.1.  Time and Place of Closing...................................   A-4
 2.2.  Deliveries by News America..................................   A-4
 2.3.  Deliveries by PLD...........................................   A-4
                               ARTICLE III                               
REPRESENTATIONS AND WARRANTIES OF PLD                                    
 3.1.  Organization; Qualification.................................   A-5
 3.2.  Capitalization of PLD and PeterStar.........................   A-5
 3.3.  Authority Relative to this Agreement........................   A-5
 3.4.  Consents and Approvals; No Violation........................   A-6
 3.5.  Reports.....................................................   A-6
 3.6.  Financial Statements........................................   A-6
 3.7.  Undisclosed Liabilities.....................................   A-6
 3.8.  Absence of Certain Changes or Events........................   A-6
 3.9.  Certain Disclosure Matters..................................   A-7
 3.10. Legal Proceedings, etc......................................   A-8
 3.11. Permits.....................................................   A-8
                               ARTICLE IV                                
REPRESENTATIONS AND WARRANTIES OF NEWS AMERICA                           
 4.1.  Organization................................................   A-8
 4.2.  Authority Relative to this Agreement........................   A-8
 4.3.  Consents and Approvals; No Violation........................   A-8
 4.4.  Fees and Commissions........................................   A-9
 4.5.  Title.......................................................   A-9
 4.6.  Investment Intent; Private Placement........................   A-9
                                ARTICLE V                                
COVENANTS OF THE PARTIES                                                 
 5.1   Conduct of Business of PLD and PeterStar....................   A-9
 5.2   Access to Information.......................................  A-10
 5.3   Expenses....................................................  A-10
 5.4   Further Assurances..........................................  A-10
 5.5   Public Statements...........................................  A-11
 5.6   Consents and Approvals......................................  A-11
 5.7   Supplements to Schedules....................................  A-11
 5.8   Completion of Ancillary Agreements..........................  A-12
                               ARTICLE VI                                
CLOSING CONDITIONS                                                       
 6.1   Conditions to Each Party's Obligations to Effect the              
            Transactions Contemplated Hereby.......................  A-12
 6.2   Conditions to Obligations of News America...................  A-12
 6.3   Conditions to Obligations of PLD............................  A-13

 A-1

DEF 14A
42nd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 42nd

                                                                [Download Table]

                                                                     PAGE
                                                                     ----
                                                                         
                               ARTICLE VII                               
REGISTRATION RIGHTS                                                      
 7.1   Registration on Request.....................................  A-14
 7.2   Incidental Registration.....................................  A-15
 7.3   Registration Procedures.....................................  A-16
 7.4   Provision of Information; Transfer of Shares After                
            Registration...........................................  A-18
 7.5   Indemnification.............................................  A-19
                              ARTICLE VIII                               
TERMINATION AND ABANDONMENT                                              
 8.1   Termination.................................................  A-20
 8.2   Procedure and Effect of Termination.........................  A-20
                               ARTICLE IX                                
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION                             
 9.1   Survival of Representations.................................  A-20
 9.2   Statements as Representations...............................  A-20
 9.3   PLD's Indemnification of News America.......................  A-20
 9.4   News America's Indemnification of PLD.......................  A-21
 9.5   Conditions of Indemnification...............................  A-21
 9.6   Cushion.....................................................  A-21
 9.7.  Limitation of Liability.....................................  A-22
 9.8.  Remedies Cumulative.........................................  A-22
 9.9.  Assignment of Certain Representations, Warranties and             
            Indemnification Obligations............................  A-22
                                ARTICLE X                                
MISCELLANEOUS PROVISIONS                                                 
10.1.  Amendment and Modification..................................  A-22
10.2.  Waiver of Compliance; Consents..............................  A-22
10.3.  Notices.....................................................  A-22
10.4.  Assignment..................................................  A-23
10.5.  Confidentiality.............................................  A-23
10.6.  Governing Law...............................................  A-24
10.7.  Counterparts................................................  A-24
10.8.  Interpretation..............................................  A-24
10.9.  Entire Agreement............................................  A-24

 A-2

DEF 14A
43rd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 43rd

ASSET EXCHANGE AGREEMENT

   ASSET EXCHANGE AGREEMENT (this "Agreement"), dated April 19, 1998, by and
between:                                                                        

  NEWS AMERICA INCORPORATED, a corporation organized under the laws of the
State of Delaware ("News America"), with an address at 1211 Avenue of the       
Americas, New York, New York 10036, and                                         

PLD TELEKOM INC., a corporation organized under the laws of Delaware  
("PLD"), with an address at 680 Fifth Avenue, New York, New York 10019.         

W I T N E S S E T H:

WHEREAS, PLD is a provider of local, long distance and international  
telecommunications services in the Russian Federation and Kazakstan; and        

WHEREAS, News America and Cable and Wireless Plc, a company registered
under the laws of England under the number 238525 ("C&W"), are substantially    
simultaneously with the execution and delivery of this Agreement entering into  
that certain Stock Purchase Agreement (the "Stock Purchase Agreement"), pursuant
to which News America will purchase from (a) Navona Communications Corporation  
Ltd. (a wholly owned subsidiary of C&W), a corporation organized under the laws 
of Bermuda ("Navona"), (i) 10,555,739 shares of common stock, par value $.01 per
share ("PLD Common Stock"), of PLD, constituting as at April 16, 1998           
approximately 31.21% of the presently issued and outstanding capital stock of   
PLD (the "PLD Shares"), and (ii) 12,000 shares of common stock, par value       
USD$1.00 per share, of PLD Holdings Ltd., a limited liability company organized 
under the laws of Bermuda ("Holdings"), constituting 100% of the issued and     
outstanding capital stock of Holdings (the "Holdings Shares"), which is the     
owner of eleven percent (11%) of the outstanding common equity interests in     
PeterStar Company Limited, a closed joint stock company organized under the laws
of the Russian Federation ("PeterStar") and (b) C&W, a warrant dated June 28,   
1995, conferring on C&W the right to purchase up to 250,000 shares (subject to  
adjustment on the occurrence of certain events) of PLD Common Stock at an       
exercise price of 11.3125 Canadian dollars per share, expiring on June 22, 1999 
a copy of which is attached hereto as Exhibit A (the "PLD Warrant"; the PLD     
Warrant and the PLD Shares are collectively referred to herein as the "PLD      
Interest") and                                                                  

    WHEREAS, PLD deems it to be advisable and in the best interests of PLD and
its shareholders to facilitate the acquisition of the PLD Interest and the      
Holdings Shares by News America; and                                            

     WHEREAS, News America has advised PLD and C&W that it does not wish to hold
the Holdings Shares and that it is not willing to consummate the acquisition of 
the PLD Interest and the Holdings Shares unless it can substantially            
simultaneously therewith exchange the Holdings Shares with PLD for additional   
shares of PLD Common Stock; and                                                 

  WHEREAS, PLD deems it advisable and in the best interests of PLD and its
shareholders to acquire the Holdings Shares in exchange for shares of PLD Common
Stock; and                                                                      

   WHEREAS, PLD presently owns sixty percent (60%) of the equity interest in
PeterStar; and                                                                  

WHEREAS, immediately prior to the consummation of the transaction     
contemplated hereby, PLD shall have acquired, pursuant to a Share Purchase      
Agreement between PLD and C&W (the "CIBBV Purchase Agreement"), 100 shares of   
common stock, par value 400 Netherlands Guilders per share, of CommStruct       
International Byelorussia BV, a closed limited liability company organized under
the laws of The Netherlands ("CIBBV"), constituting 100% of the issued and      
outstanding capital stock (the "CIBBV Shares") of CIBBV, which is the owner of  
fifty percent (50%) of the outstanding common equity interests in               
Belarus-Netherlands Belcel Joint Venture ("Belcel") and one hundred percent     
(100%) of the outstanding common equity interests in Baltic Operations          
Ltd. -- Latvia, from C&W in exchange for 200,000 shares of PLD Common Stock plus
300,000 shares of PLD Common Stock in consideration for the assignment of       
certain liabilities of CIBBV to PLD or its designee; and                        

 A-3

DEF 14A
44th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 44th

   NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties, intending to be legally      
bound, hereby agree as follows:                                                 

ARTICLE I 

EXCHANGE OF STOCK 

1.1. Exchange of Holdings Shares.                                     

      (a) On the Closing Date and substantially simultaneously with, and
subject to, the purchase of the Holdings Shares by News America as    
 described in the Stock Purchase Agreement, News America agrees to sell,
     assign, transfer and deliver to PLD, and PLD agrees to purchase and acquire
   from News America, all of News America's right, title and interest to the
Holdings Shares.                                                      

          (b) On the Closing Date and against delivery of the Holdings Shares as
set forth above, PLD will issue and deliver to News America 3,705,631 
    newly-issued, fully paid and nonassessable shares of PLD Common Stock (the
   "New PLD Shares"), registered in the name of News America or its designee
or nominee.                                                           

ARTICLE II

THE CLOSING 

 2.1. Time and Place of Closing.  Subject to the terms and conditions of
this Agreement, the consummation of the transaction contemplated hereby (the    
"Closing") shall take place at the offices of Skadden, Arps, Slate, Meagher &   
Flom LLP, 919 Third Avenue, New York, New York 10022 on the third business day  
after News America shall have delivered to PLD written notice that the          
conditions set forth in Section 6.2 hereof have been satisfied (the "Closing    
Date"), or at such other time and place as shall be determined by mutual        
agreement of the parties.                                                       

     2.2. Deliveries by News America.  At the Closing, News America will deliver
or cause to be delivered the following to PLD:                                  

       (a) Immediately upon (and subject to) the receipt thereof from C&W,
the stock certificates or other instruments representing all of the   
 Holdings Shares, duly endorsed in blank or accompanied by duly executed
instruments of transfer, together with any other documents that are   
necessary to transfer to PLD all of News America's right, title and   
     interest in and to the Holdings Shares theretofore acquired from C&W or its
affiliates;                                                           

       (b) the Officer's Certificate referred to in Section 6.3(d) hereof;

        (c) the Opinion of Counsel referred to in Section 6.3(e) hereof; and

        (d) such other documents, instruments and writings as are required to be
    delivered by News America at or prior to the Closing Date pursuant to this
Agreement or otherwise required in connection herewith.               

   2.3 Deliveries by PLD.  At the Closing, PLD will deliver the following to
News America:                                                                   

         (a) stock certificates, registered in the name of News America or its
  nominee or designee, representing 3,705,631 shares of duly issued, fully
   paid and nonassessable PLD Common Stock, and any other documents that are
 necessary to transfer to News America good and marketable title to such
shares;                                                               

       (b) the Officer's Certificate referred to in Section 6.2(f) hereof;

        (c) the Opinion of Counsel referred to in Section 6.2(g) hereof; and

 A-4

DEF 14A
45th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 45th

         (d) such other documents, instruments and writings as are required to
  be delivered by News America at or prior to the Closing Date pursuant to
this Agreement or otherwise required in connection herewith.          

ARTICLE III 

REPRESENTATIONS AND WARRANTIES OF PLD 

 PLD represents and warrants to News America as follows (for purposes of
Sections 3.7, 3.8, 3.9, 3.10 and 3.11 hereof, the term PLD, as of the Closing   
Date, shall mean PLD and its subsidiaries taken as a whole, including without   
limitation, the assets, liabilities, business and operations of Belcel acquired 
pursuant to the CIBBV Purchase Agreement):                                      

 3.1. Organization; Qualification.  PLD is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,  
and has all requisite corporate power and authority to own, lease, and operate  
its properties and to carry on its business as now being conducted. PLD is duly 
qualified or licensed to do business as a foreign corporation and is in good    
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification       
necessary. Schedule 3.1 sets forth, as of the date of this Agreement, each      
jurisdiction in which PLD is qualified to do business as a foreign corporation. 
PLD has heretofore delivered to News America complete and correct copies of its 
Certificate of Incorporation and Bylaws as currently in effect.                 

     3.2. Capitalization of PLD and PeterStar.  Set forth on Schedule 3.2 is the
number of shares in the capital stock or other equity interests of each of PLD  
and PeterStar which are issued and outstanding as of the date of this Agreement.
All such shares are validly issued, fully paid and nonassessable. Other than    
this Agreement, or as set forth in Schedule 3.2, there is no subscription,      
option, warrant, call, right, agreement or commitment relating to the issuance, 
sale, delivery or transfer by PLD and PeterStar of any shares of capital stock  
or other equity interest (including any right of conversion or exchange under   
any outstanding security or other instrument). There are no outstanding         
contractual obligations of PLD and PeterStar to repurchase, redeem or otherwise 
acquire any outstanding shares of capital stock or other equity interest of PLD 
or PeterStar. There are no restrictions or limitations contained in the         
organizational documents of PLD or in any contract, agreement, document or other
instrument to which PLD or any direct or indirect subsidiary is a party or of   
which PLD or any direct or indirect subsidiary is aware that restricts, or      
purports to restrict, the ability of C&W or any of its direct or indirect       
subsidiaries to transfer the PLD Interest to News America or that create or give
rise to, by reason of the transfer of the PLD Interest to News America, any     
pledge, security interest, lien, charge, encumbrance, claim, option or          
limitation affecting the ability of News America to vote such shares or to      
exercise any other rights appurtenant thereto under the Stock Purchase          
Agreement. The New PLD Shares, taken together with the PLD Shares, will         
represent an aggregate of not less than thirty-eight (38%) of the outstanding   
PLD shares after giving effect to the issuance of the New PLD Shares. The PLD   
Warrant is exercisable for shares of PLD Common Stock in accordance with its    
terms.                                                                          

  3.3. Authority Relative to this Agreement.  PLD has full corporate power
and authority to execute, deliver and perform its obligations under this        
Agreement and all ancillary agreements to which it is a party and to consummate 
the transactions contemplated hereby and thereby. The execution and delivery of 
this Agreement and all ancillary agreements to which it is a party and the      
consummation of the transactions contemplated hereby and thereby have been duly 
and validly authorized, by the Board of Directors and, if required, shall be    
duly and validly authorized by the shareholders of PLD prior to the Closing     
Date, and no other corporate proceedings on the part of PLD are necessary to    
authorize this Agreement or to consummate the transactions contemplated hereby  
and thereby. This Agreement and each such ancillary agreement to which PLD is a 
party has been duly and validly executed and delivered by PLD, and assuming that
this Agreement constitutes a valid and binding agreement of News America,       
constitutes a valid and binding agreement of PLD, enforceable against PLD in    
accordance with its terms, except that such enforceability may be limited by    
applicable bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally or general principles of 
equity.                                                                         

 A-5

DEF 14A
46th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 46th

     3.4. Consents and Approvals; No Violation.  Except as set forth in Schedule
3.4, the execution and delivery by PLD of this Agreement and all ancillary      
agreements to which it is a party will not (i) conflict with or result in any   
breach of any provision of the Certificate of Incorporation or Bylaws, or       
similar charter documents, of PLD, (ii) require any consent, approval,          
authorization or permit of, or filing with or notification to, any governmental 
or regulatory authority, (iii) result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement or other  
instrument or obligation to which PLD is a party or by which PLD or any of its  
assets may be bound, except for such defaults (or rights of termination,        
cancellation or acceleration) as to which requisite waivers or consents have    
been obtained, or (iv) violate any order, writ, injunction, decree, statute,    
rule or regulation applicable to PLD or any of its assets.                      

    (b) Except as set forth in Schedule 3.4 and except for the filings by News
America and PLD required by Title II of the Hart-Scott-Rodino Antitrust         
Improvements Act of 1976, as amended (the "HSR Act"), no declaration, filing or 
registration with, or notice to, or authorization, consent or approval of any   
governmental or regulatory body or authority is necessary for the consummation  
by PLD of the transactions contemplated hereby.                                 

   3.5. Reports.  Since January 1, 1997, PLD has, pursuant to the Securities
Act of 1933, as amended (the "Securities Act") and the Securities Exchange Act  
of 1934, as amended (the "Exchange Act"), filed or caused to be filed with the  
United States Securities and Exchange Commission ("SEC") all material forms,    
statements, reports and documents (including all exhibits, amendments and       
supplements thereto) required to be filed by them with respect to the business  
and operations of PLD under each of the Securities Act and the Exchange Act and 
the respective rules and regulations thereunder, all of which complied in all   
material respects with all applicable requirements of the appropriate act and   
the rules and regulations thereunder in effect on the date each such report was 
filed. True and complete copies of each of such forms, statements, reports and  
documents, and such exhibits, have been delivered to News America.              

  3.6. Financial Statements.  PLD has previously furnished to News America
copies of (a) PLD's audited consolidated and (b) PeterStar's audited (i) balance
sheets as of December 31, in each of the years 1997, 1996 and 1995 and (ii)     
related consolidated statements of income and retained earnings and consolidated
changes in financial position of PLD and PeterStar for the fiscal years then    
ended, together with the respective reports thereon of KPMG Peat Marwick LLP and
KPMG, as independent auditors of PLD for 1997, and 1996 and 1995, respectively, 
and KPMG, as independent auditors of PeterStar. Each of the balance sheets      
included in the financial statements referred to in this Section 3.6 (including 
the related notes thereto) present fairly the financial information purported to
be set therein as of the dates thereof, and the other related statements        
included therein (including the related notes thereto) present fairly the       
results of operations and changes in financial position for the periods then    
ended, all in conformity with generally accepted accounting principles applied  
on a consistent basis, except as otherwise noted therein. For purposes of this  
Agreement, the audited consolidated balance sheet of PLD and the audited balance
sheet of PeterStar as of December 31, 1997 are hereinafter referred to as (the  
"Companies' Balance Sheets").                                                   

     3.7. Undisclosed Liabilities.  Except as set forth in Schedule 3.7, neither
PLD nor PeterStar has any material liability or obligation, secured or unsecured
(whether absolute, accrued, contingent or otherwise, and whether due or to      
become due), of a nature required by generally accepted accounting principles to
be reflected in a corporate balance sheet or disclosed in the notes thereto,    
which are not accrued or reserved against in the Companies' Balance Sheets or   
disclosed in the notes thereto in accordance with generally accepted accounting 
principles.                                                                     

     3.8. Absence of Certain Changes or Events.  Except as set forth in Schedule
3.8 or in PLD's Annual Report on Form 10-K for the year ended December 31, 1997,
since the date of the Companies' Balance Sheets there has not been:             

(a) any material adverse change in the business, prospects, 
operations, properties, assets, liabilities, competition, earnings, or
   condition (financial or otherwise) of PLD or PeterStar, or any failure by
PLD or PeterStar to pay its debts when due;                           

 A-6

DEF 14A
47th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 47th

         (b) any event or condition of any character which either individually
or in the aggregate, might reasonably be expected to have a material  
    adverse effect on the business, prospects, operations, properties, assets,
   liabilities, competition, earnings or condition (financial or otherwise),
of PLD or PeterStar;                                                  

         (c) any damage, destruction or loss (regardless of whether covered by
 insurance) that might reasonably be expected to have a material adverse
effect on the business, prospects, operation, properties, assets,     
    liabilities, competition, earnings, or condition (financial or otherwise),
of PLD or PeterStar;                                                  

          (d) any declaration, setting aside or payment of any dividend or other
   distribution (whether in cash, stock, property, or any combination of the
  foregoing) with respect to the capital stock or other equity interest of
 PLD or PeterStar except as specifically provided for in this Agreement;

   (e) any increase in the compensation paid, payable or to become
    payable by PLD or PeterStar to its officers, directors or employees (other
than increases for employees in the ordinary course of business and   
  consistent with past practice), any hiring of new officers, directors or
 employees (other than hiring of new employees in the ordinary course of
business consistent with past practice) or any increase in any bonus, 
    insurance, pension or other employee benefit plan, payments or arrangement
(including loans) made to, for or with any officers, directors, or    
 employees (other than increases for employees in the ordinary course of
   business and consistent with past practice or other increases pursuant to
written employee benefit plans);                                      

     (f) any entry into, material amendment of, or termination of, any
   material agreement, material commitment or material transaction by PLD or
  PeterStar, including, without limitation, any (i) merger, consolidation,
share exchange, acquisition or disposition of assets or stock or any  
 financing transaction or capital expenditure, (ii) indenture, mortgage,
note, agreement or other instrument relating to the borrowing of money
(other than intercompany accounts), (iii) partnership or joint venture
agreement, (iv) material license agreement relating to intellectual   
    property (other than off-the-shelf software licenses), or (v) agreement to
    amend its charter or other organizational documents or any other document,
     contract, agreement, arrangement, undertaking or instrument relating to any
of the foregoing;                                                     

     (g) any entry into, material change to the terms or conditions of
  termination of, any license, permit, franchise, governmental approval or
decree pursuant to which PLD or PeterStar provides telephony, data    
transmission or other telecommunications services;                    

         (h) any notes or accounts receivable or portions of notes or accounts
    receivable written off by PLD or PeterStar as uncollectible, other than in
the ordinary course of business and consistent with past practice;    

   (i) any material obligation or material liability paid (whether
    absolute, accrued, contingent or otherwise), or any lien or encumbrance in
     connection therewith discharged, by PLD or PeterStar, other than (i) in the
ordinary course of business and consistent with past practice, or (ii)
current liabilities shown on the financial statements and current     
liabilities incurred since their date;                                

      (j) any properties or assets, real, personal or mixed, tangible or
intangible, of PLD or PeterStar mortgaged, pledged or subjected to any
security interest, lien or encumbrance;                               

        (k) except as specifically provided for in this Agreement, any sale,
     assignment, transfer, lease, dividend, distribution or other disposition of
     any of property or assets by PLD or PeterStar, other than sales of products
in the ordinary course of business; or                                

    (l) any agreement, understanding or undertaking to do any of the
foregoing by PLD or PeterStar.                                        

3.9. Certain Disclosure Matters.                                      

News America has been furnished with copies of each of the documents, 
contracts, agreements, licenses, permits and other instruments identified on    
Schedule 3.9 hereof (collectively, the "Written Disclosure Materials"). All of  
the Written Disclosure Materials are true and complete copies of each of the    
documents, contracts, agreements, licenses, permits and other instruments that  
they purport to represent, and the Written Disclosure Materials, together with  
the schedules attached hereto, collectively represent a true, fair and          
 A-7

DEF 14A
48th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 48th

complete portrayal of the material business operations of PLD and PeterStar.    
None of the Written Disclosure Materials contains an untrue statement of        
material fact or omits to state any fact required to be stated therein or       
necessary, in light of the circumstances under which such statements are made,  
so as not to be misleading, except to the extent that such statements were later
amended, revised or updated by PLD or PeterStar.                                

    3.10. Legal Proceedings, etc.  Except as set forth in Schedule 3.10, there
are no claims, actions, or proceedings pending or investigation pending or, to  
PLD's knowledge, threatened against or relating to PLD or PeterStar before any  
court, governmental or regulatory authority or body acting in an adjudicative   
capacity. Except as set forth in Schedule 3.10, none of PLD or PeterStar is     
subject to any outstanding judgment, rule, order, writ, injunction or decree of 
any court, governmental or regulatory authority.                                

3.11. Permits.  Each of PLD and PeterStar has all material permits,   
licenses, franchises and other governmental authorizations, consents and        
approvals (collectively, "Permits") necessary to conduct its business as        
presently conducted. Except as set forth in Schedule 3.11, neither PLD nor      
PeterStar has received any written notification that it is in violation of any  
of such Permits, or any law, statute, order, rule, regulation, ordinance or     
judgment of any governmental or regulatory body or authority applicable to it.  
Each of PLD and PeterStar is in compliance with all material Permits, laws,     
statutes, orders, rules, regulations, ordinances, or judgments of any           
governmental or regulatory body or authority applicable to it.                  

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF NEWS AMERICA

News America represents and warrants to PLD as follows:               

   4.1. Organization.  News America is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. News     
America has heretofore delivered to PLD complete and correct copies of its      
organizational documents as currently in effect.                                

     4.2. Authority Relative to this Agreement.  News America has full power and
authority to execute, deliver and perform all obligations under this Agreement  
and all ancillary agreements to which it is a party and to consummate the       
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and all ancillary agreements to which it is a party and the           
consummation of the transactions contemplated hereby and thereby have been duly 
and validly authorized by News America and no other proceedings on the part of  
News America are necessary to authorize this Agreement or to consummate the     
transactions contemplated hereby. This Agreement and all ancillary agreements to
which it is a party have been duly and validly executed and delivered by News   
America, and assuming that this Agreement and each such ancillary agreement     
constitutes a valid and binding agreement of PLD, constitutes a valid and       
binding agreement of News America, enforceable against News America in          
accordance with its terms, except that such enforceability may be limited by    
applicable bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally or general principles of 
equity.                                                                         

4.3. Consents and Approvals; No Violation.  (a) Except as set forth in
Schedule 4.3, neither the execution and delivery of this Agreement by News      
America nor the exchange by News America of the Holdings Shares pursuant to this
Agreement will (i) conflict with or result in any breach of any provision of the
organizational documents of News America, (ii) require any consent, approval,   
authorization or permit of, or filing with or notification to, any governmental 
or regulatory authority, or (iii) result in a default (or give rise to any right
of termination, cancellation or acceleration) under any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, agreement, lease or other 
instrument or obligation to which News America or any of its subsidiaries are a 
party or by which any of their respective assets may be bound, except for such  
defaults (or rights of termination, cancellation or acceleration) as to which   
requisite waivers or consents have been obtained.                               

    (b) Except for the filings by News America and PLD required by Title II of
the HSR Act, no declaration, filing or registration with, or notice to, or      
authorization, consent or approval of any governmental                          

 A-8

DEF 14A
49th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 49th

or regulatory body or authority is necessary for the consummation by News       
America of the transactions contemplated hereby.                                

   4.4. Fees and Commissions.  No broker, finder or other person is entitled
to any brokerage fees, commissions or finder's fees in connection with the      
transaction contemplated hereby by reason of any action taken by News America.  
News America hereby covenants that it will pay to PLD or otherwise discharge,   
and will indemnify and hold PLD harmless from and against, any and all claims or
liabilities for all brokerage fees, commissions and finder's fees (other than as
described above) incurred by reason of any action taken by News America.        

    4.5. Title.  News America makes no representations or warranties regarding
the title to the Holdings Shares (including the interest in PeterStar) that are 
the subject of this Agreement or the business or operation of PeterStar or any  
other matter relating to the Holdings Shares or their provenance; provided,     
however, that News America shall represent in writing to PLD on the Closing Date
that News America shall have taken no action with respect to the Holdings Shares
that would interfere with the transfer to PLD, and the receipt by PLD, of title 
to the Holdings Shares which is of the same quality as the title thereto which  
News America received from C&W. News America hereby assigns to PLD each of the  
representations and warranties made by C&W to News America in the Stock Purchase
Agreement.                                                                      

4.6. Investment Intent; Private Placement.                            

       (a) News America is knowledgeable, sophisticated and experienced in
    making, and is qualified to make, decisions with respect to investments in
   equity securities presenting an investment decision like that involved in
the acquisition of the New PLD Shares. News America or its counsel,   
     accountants or other investment advisers have requested, received, reviewed
and considered all information deemed relevant by them in making an   
informed decisions to acquire the New PLD Shares.                     

       (b) News America is acquiring the New PLD Shares for investment for
  its own account only and not with a view to, or for resale in connection
    with, any "distribution" thereof within the meaning of the Securities Act.
News America has no present intention of selling, granting any        
   participation in, or otherwise distributing the New PLD Shares, except in
  compliance with the Securities Act or pursuant to an available exemption
thereunder.                                                           

      (c) News America understands that the New PLD Shares have not been
  registered under the Securities Act or registered or qualified under any
  state securities law in reliance on specific exemptions therefrom, which
 exemptions may depend upon, among other things, the bona fide nature of
News America's investment intent as expressed herein. News America is 
  familiar with Rule 144 under the Securities Act, as presently in effect,
and understands the resale limitations imposed thereby and by the     
  Securities Act. News America further understands that the certificate(s)
representing the New PLD Shares shall bear the following legend:      

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN      
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR UNDER ANY APPLICABLE STATE  
SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION       
THEREFROM.                                                

ARTICLE V 

COVENANTS OF THE PARTIES

5.1. Conduct of Business of PLD and PeterStar.  Except as described in
Schedule 5.1, during the period from the date of this Agreement to the Closing  
Date, PLD will, and will cause PeterStar to, conduct their respective businesses
and operations according to their ordinary and usual course of business         
consistent with past practice. Without limiting the generality of the foregoing,
and, except as contemplated in this Agreement                                   

 A-9

DEF 14A
50th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 50th

or as described in Schedule 5.1, prior to the Closing Date, without the prior   
written consent of News America, PLD will not, and will not permit PeterStar to:

        (a) (i) create, incur or assume any amount of indebtedness for money
  borrowed, other than in the ordinary course of business, or (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether 
directly, contingently or otherwise) for the obligations of any other 
person except in the ordinary course of business; provided, PLD and   
PeterStar may endorse negotiable instruments in the ordinary course of
business;                                                             

    (b) declare, set aside or pay any dividend or other distribution
    (whether in cash, stock or property or any combination thereof) in respect
of their respective capital stock, or redeem or otherwise acquire any 
shares of their respective capital stock;                             

      (c) enter into any agreement, commitment or transaction (including
without limitation any borrowing, capital expenditure or capital      
    financing), except agreements, commitments or transactions in the ordinary
course of business or as contemplated herein provided, that PLD may   
  nevertheless effect the public offering of shares of PLD Common Stock as
contemplated by the terms of (i) that certain Indenture, dated May 31,
   1996, among the parties signatories thereto, relating to the $123,000,000
    14% senior discount notes due 2004, (ii) that certain Indenture, dated May
31, 1996, among the parties signatories thereto, relating to the      
     $26,000,000 9% convertible subordinated notes due 2006 (each such Indenture
are collectively referred to herein as the "Indentures") and (iii) the
   Revolving Credit Note and Warrant Agreement relating to PLD's $12,400,000
  12% Series A Revolving Credit Notes due 1998 and $3,100,000 12% Series B
Revolving Credit Notes due 1998; or                                   

      (d) enter into any contract, agreement, commitment or arrangement,
    whether written or oral, with respect to any of the transactions set forth
in the foregoing paragraphs (a) through (c).                          

 5.2. Access to Information.  Between the date of this Agreement and the
Closing Date, PLD will, and will cause PeterStar, during ordinary business hours
and upon reasonable notice to, (i) give News America and its accountants,       
counsel, financial advisors and other authorized representatives (the "News     
America Representatives") reasonable access to all books, records, plants,      
offices and other facilities and properties of PLD and PeterStar to which News  
America is permitted access by law, (ii) permit News America to make such       
reasonable inspections thereof as News America may reasonably request; (iii)    
cause the officers and advisors of PLD and PeterStar to furnish News America    
with such financial and operating data and other information with respect to the
business and properties of PLD and PeterStar as News America may from time to   
time reasonably request; (iv) cause the officers and advisors of PLD and        
PeterStar to furnish News America a copy of each report, schedule or other      
document filed by them with any governmental agency or authority, provided,     
however, that (A) any such investigation shall be conducted in such a manner as 
not to interfere unreasonably with the operation of the business of PLD and     
PeterStar or PLD's relationship with the other shareholders of PeterStar, (B)   
PLD and PeterStar shall not be required to take any action which would          
constitute a waiver of the attorney-client privilege and (C) PLD and PeterStar  
need not supply News America with any information which PLD or PeterStar is     
under a legal obligation not to supply.                                         

All information furnished to or obtained by News America and any News 
America Representatives pursuant to this Section 5.2 shall be subject to the    
confidentiality provisions set forth in Section 10.5 hereof.                    

 5.3. Expenses.  Whether or not the transactions contemplated hereby are
consummated, all costs and expenses incurred in connection with this Agreement  
and the transactions contemplated hereby shall be borne by the party incurring  
such costs and expenses.                                                        

5.4. Further Assurances.  Subject to the terms and conditions of this 
Agreement, each of the parties hereto will use all reasonable efforts to take,  
or cause to be taken, all action, and to do, or cause to be done, all things    
necessary, proper or advisable under applicable laws and regulations to         
consummate and make effective the sale, assignment, transfer and delivery of the
PLD Interest, and the Holdings Shares and the interest in PeterStar represented 
thereby, pursuant to this Agreement. From time to time after the date hereof,   
without further consideration, News America will, at its own expense, execute   
and deliver such documents to PLD as PLD may reasonably request in order more   
effectively to vest in PLD good title to the Holdings Shares. From              
A-10

DEF 14A
51st Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 51st

time to time after the date hereof, without further consideration, PLD will, at 
its own expense, execute and deliver such documents to News America or its      
designee (which may include C&W) as News America or such designee may reasonably
request in order more effectively to consummate the sale, assignment, transfer  
and delivery of (a) the New PLD Shares pursuant to this Agreement and (b) the   
PLD Interest and the Holdings Shares pursuant to the Stock Purchase Agreement.  

     5.5. Public Statements.  The parties shall consult with each other prior to
issuing any public announcement, statement or other disclosure with respect to  
this Agreement or the transactions contemplated hereby and shall not issue any  
such public announcement, statement or other disclosure prior to such           
consultation. Notwithstanding the foregoing, the parties may make public        
announcements, statements or other disclosures with respect to this Agreement   
and the transactions contemplated hereby without such consultation to the extent
and under the circumstances in which the parties are legally compelled (by      
deposition, interrogatory, request for documents, subpoena, civil investigative 
demand or similar process, or by order of a court or tribunal of competent      
jurisdiction) to do so, or in order to comply with applicable rules or          
requirements of any stock exchange, government department or agency or other    
regulatory authority, or as required by any securities law or regulation or     
other legal requirement, in any such case in circumstances where such           
consultation would not be practicable.                                          

5.6. Consents and Approvals.                                          

    (a) PLD and News America shall cooperate with each other and (i)
promptly prepare and file all necessary documentation, (ii) effect all
necessary applications, notices, petitions and filings and execute all
  agreements and documents, (iii) use all reasonable efforts to obtain all
necessary permits, consents, approvals and authorizations of all      
governmental bodies and (iv) use all reasonable efforts to obtain all 
necessary Permits, consents, approvals and authorizations of all other
    parties, in the case of each of the foregoing clauses (i), (ii) and (iii),
    necessary or advisable to consummate the transactions contemplated by this
    Agreement or required by the terms of any note, bond, mortgage, indenture,
   deed of trust, license, franchise, permit, concession, contract, lease or
   other instrument to which PLD, Holdings, PeterStar or News America or any
 of their subsidiaries are a party or by which any of them is bound. PLD
   shall have the right to review and approve in advance all characteristics
   of the information relating to PLD or PeterStar; and each of PLD and News
America shall have the right to review and approve in advance all     
characterizations of the information relating to the transactions     
contemplated by this Agreement which appear in any filing made in     
  connection with the transactions contemplated hereby. The parties hereto
    agree that they will consult with each other with respect to the obtaining
  of all such necessary Permits, consents, approvals and authorizations of
 all third parties and governmental bodies. Each of PLD and News America
     shall designate separate counsel with respect to all applications, notices,
   petitions and filings (joint or otherwise) relating to this Agreement and
    the transactions contemplated hereby on behalf of PLD, on the one hand and
News America on the other hand, with all governmental bodies.         

 (b) The parties hereto shall consult with each other prior to
     proposing or entering into any stipulation or agreement with any foreign or
United States governmental authority or agency or any third party in  
connection with any foreign or United States governmental consents and
approvals legally required for the consummation of the transactions   
contemplated hereby and shall not propose or enter into any such      
   stipulation or agreement without the other party's prior written consent,
which consent shall not be unreasonably withheld.                     

    5.7. Supplements to Schedules.  PLD, on the one hand, and News America, on
the other hand, shall have the right from time to time prior to the Closing to  
supplement or amend its Schedules with respect to any matter hereafter arising  
which if existing or known at the date of this Agreement would have been        
required to be set forth or described in such Schedules. Any such supplemental  
or amended disclosure shall be deemed to have cured any breach of any           
representation or warranty made in this Agreement for purposes of Article IX,   
but will not be deemed to have cured any such breach made in this Agreement and 
to have been disclosed as of the date of this Agreement for purposes of         
determining whether or not the conditions set forth in Article VI hereof have   
been satisfied.                                                                 

A-11

DEF 14A
52nd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 52nd

  5.8. Completion of Ancillary Agreements.  Each party will use reasonable
efforts to take or cause to be taken, all action, and do or cause to be done all
things reasonably necessary or advisable to perform their respective obligations
under, in the case of PLD, the CIBBV Exchange Agreement and, in the case of News
America, the Stock Purchase Agreement, each in the form as executed on the date 
hereof.                                                                         

ARTICLE VI

CLOSING CONDITIONS

6.1. Conditions to Each Party's Obligations to Effect the Transactions
Contemplated Hereby.  The respective obligations of each party to effect the    
transactions contemplated hereby shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions:                                

(a) The waiting period under the HSR Act applicable to the  
    consummation of the transactions contemplated hereby shall have expired or
been terminated;                                                      

          (b) No preliminary or permanent injunction or other order or decree by
    any federal, state, local or foreign court which prevents the consummation
   of the transactions contemplated hereby shall have been issued and remain
   in effect (each party agreeing to use its reasonable best efforts to have
any such injunction, order or decree lifted) and no statute, rule or  
    regulation shall have been enacted by any federal, state, local or foreign
   government or governmental agency which prohibits the consummation of the
transactions contemplated hereby;                                     

         (c) All foreign and United States federal, state and local government
  consents and approvals required for the consummation of the transactions
     contemplated hereby shall have become Final Orders (a "Final Order" means a
     final order after all opportunities for rehearing are exhausted (whether or
   not any appeal thereof is pending)) and shall not be subject to terms and
conditions; and                                                       

    (d) If so required, a resolution shall have passed at the annual
meeting of stockholders (or, if applicable, at any special meeting of 
     stockholders) of PLD, convened after proper notice to and/or waiver of such
  notice by the stockholders, with a quorum of the stockholders present or
represented, to approve the transaction contemplated hereby.          

 6.2. Conditions to Obligations of News America.  The obligation of News
America to effect the transactions contemplated by this Agreement shall be      
subject to the fulfillment at or prior to the Closing Date of the following     
additional conditions:                                                          

    (a) There shall not have occurred and be continuing any event or
events, either individually or in the aggregate, which would have a   
material and adverse effect on the property, business, operations,    
prospects or condition (financial or otherwise) of PLD;               

  (b) PLD shall have performed and complied with in all material
    respects the covenants and agreements contained in this Agreement required
  to be performed and complied with by it at or prior to the Closing Date,
   and the representations and warranties of PLD set forth in this Agreement
   shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date as though made at and as of the  
Closing Date;                                                         

(c) News America and C&W shall have closed the transactions 
contemplated by the Stock Purchase Agreement simultaneously with the  
transactions contemplated hereby;                                     

         (d) News America and PLD shall have executed and delivered a Director
   Nomination Agreement containing terms and conditions satisfactory to News
America and PLD and such agreement shall be in full force and effect; 

   (e) The common stock of PLD shall be quoted on The Nasdaq Stock
Market, and no action shall have been taken or shall be pending or    
threatened in respect of the delisting of the common stock of PLD from
eligibility for such quotation;                                       

A-12

DEF 14A
53rd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 53rd

         (f) News America shall have received a certificate from an authorized
     officer of PLD, dated the Closing Date, to the effect that to the officer's
 knowledge, the conditions set forth in Section 6.2(a) and (b) have been
satisfied; and                                                        

 (g) News America shall have received an opinion from E. Clive
Anderson, Senior Vice President and General Counsel of PLD, dated the 
     Closing Date and satisfactory in form and substance to News America and its
counsel, substantially to the effect that:                            

          (i) PLD is a corporation duly organized, validly existing and in
 good standing under the laws of the State of Delaware and has the
       corporate power and authority to execute and deliver this Agreement and
     to consummate the transactions contemplated hereby; and the execution
       and delivery of this Agreement and the consummation of the transactions
    contemplated hereby have been duly authorized by requisite corporate
action taken on the part of PLD;                                

             (ii) this Agreement has been executed and delivered by PLD and is a
 valid and binding obligation of the PLD enforceable against it in
  accordance with its terms, except (A) that such enforcement may be
      subject to bankruptcy, insolvency, reorganization, moratorium or other
      similar laws now or hereafter in effect relating to creditors' rights,
        and (B) that the remedy of specific performance and injunctive and other
      forms of equitable relief may be subject to certain equitable defenses
        and to the discretion of the court before which any proceeding therefore
may be brought; and                                             

           (iii) the issuance and sale of the New PLD Shares to News America
      pursuant to this Agreement are not required to be registered under the
Securities Act.                                                 

   As to any matter contained in such opinion which involves the laws of any
jurisdiction other than the Federal laws of the United States or the laws of the
State of New York, such counsel may rely upon opinions of counsel admitted in   
such other jurisdictions. Any opinions relied upon by such counsel as aforesaid 
shall be delivered together with the opinion of such counsel. Such opinion may  
expressly rely as to matters of fact upon certificates furnished by PLD and     
appropriate officers and directors of each of PLD and PeterStar and by public   
officials.                                                                      

  6.3. Conditions to Obligations of PLD.  The obligations of PLD to effect
the transaction contemplated by this Agreement shall be subject to the          
fulfillment at or prior to the Closing Date of the following additional         
conditions:                                                                     

  (a) News America shall have performed and complied with in all
    material respects the covenants and agreements contained in this Agreement
     required to be performed and complied with by it at or prior to the Closing
   Date, and the representations and warranties of News America set forth in
     this Agreement shall be true and correct in all material respects as of the
    date of this Agreement and as of the Closing Date as though made at and as
of the Closing Date;                                                  

          (b) PLD shall have received stock certificates representing all of the
 Holdings Shares, duly endorsed in blank or accompanied by duly executed
instruments of transfer, together with any other documents that are   
necessary to transfer to PLD good and marketable title to the Holdings
Shares;                                                               

(c) News America and C&W shall have closed the transactions 
 contemplated by the Stock Purchase Agreement, including the purchase by
News America from C&W of the Holdings Shares;                         

          (d) PLD and C&W shall have closed the transactions contemplated by the
CIBBV Purchase Agreement, including the purchase by PLD of the CIBBV  
shares;                                                               

     (e) PLD shall have received from special Bermuda counsel to C&W a
   reliance letter dated the Closing Date to the effect that PLD may rely on
such counsel's opinion to News America in connection with the Stock   
Purchase Agreement and assuming that News America transfers to PLD the
   Holdings Shares with the same quality of title that News America received
    from C&W, PLD will be the beneficial and registered holder of the Holdings
Shares upon the consummation of the transactions contemplated hereby; 

A-13

DEF 14A
54th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 54th

        (f) PLD shall have received a certificate from an authorized officer
of News America, dated the Closing Date, to the effect that to the    
   officer's knowledge, the conditions set forth in Section 6.3(a) have been
satisfied; and                                                        

     (g) PLD shall have received an opinion from Skadden, Arps, Slate,
     Meagher & Flom LLP, special counsel to News America, dated the Closing Date
and satisfactory in form and substance to PLD and its counsel,        
substantially to the effect that:                                     

          (i) News America is a corporation organized and in good standing
       under the laws of the State of Delaware and has the power and authority
        to execute and deliver this Agreement and to consummate the transactions
     contemplated hereby; and the execution and delivery of this Agreement
      and the consummation of the transactions contemplated hereby have been
      duly authorized by requisite action taken on the part of News America;
and                                                             

             (ii) this Agreement has been executed and delivered by News America
  and is a valid and binding obligation of News America, enforceable
against it in accordance with its terms, except (A) that such   
     enforcement may be subject to bankruptcy, insolvency, reorganization,
       moratorium or other similar laws now or hereafter in effect relating to
      creditors' rights, and (B) that the remedy of specific performance and
        injunctive and other forms of equitable relief may be subject to certain
      equitable defenses and to the discretion of the court before which any
proceeding therefore may be brought.                            

   As to any matter contained in such opinion which involves the laws of any
jurisdiction other than the Federal laws of the United States or the laws of the
State of New York, such counsel may rely upon opinions of counsel admitted in   
such other jurisdictions. Any opinions relied upon by such counsel as aforesaid 
shall be delivered together with the opinion of such counsel. Such opinion may  
expressly rely as to matters of fact upon certificates furnished by News America
and appropriate officers and directors of News America and by public officials. 

ARTICLE VII 

REGISTRATION RIGHTS 

7.1. Registration on Request.                                         

 (a) Request.  Upon the written request of News America or any
   permitted successor or assign requesting that PLD effect the registration
    under the Securities Act of all or part of any of the PLD Interest that is
  not registered under the Securities Act, the New PLD Shares or any other
security of PLD owned, from time to time, by News America which is    
registrable under the applicable laws of the United States (the       
     "Registrable Securities") and specifying the intended method of disposition
 thereof, PLD will, subject to the terms of this Agreement, use its best
efforts to effect the registration under the Securities Act of the    
Registrable Securities which PLD has been so requested to register for
     disposition in accordance with the intended method of disposition stated in
    such request; provided, that the request for registration pursuant to this
   Section 7.1 shall relate to the intention to dispose of not less than 25%
of the Registrable Securities then owned by News America or its       
     subsidiaries or affiliates or permitted successors or assigns. For purposes
    of this Article VII, the term "News America" shall include, as the context
requires, all holders of Registrable Securities.                      

          (b) Registration Statement Form.  Registrations under this Section 7.1
   shall be on such appropriate registration form of the SEC (i) as shall be
   selected by PLD and as shall be reasonably acceptable to News America and
(ii) as shall permit the disposition of such Registrable Securities in
    accordance with the intended method or methods of disposition specified in
    the request for such registration. If, in connection with any registration
     under Section 7.1 which is proposed by PLD to be on Form S-3 or any similar
 short form registration statement which is a successor to Form S-3, the
  managing underwriters, if any, shall advise PLD in writing that in their
    opinion the use of another permitted form is of material importance to the
success of the offering, then such registration shall be on such other
permitted form.                                                       
A-14

DEF 14A
55th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 55th

        (c) Expenses.  PLD shall pay all Registration Expenses in connection
 with only one (1) registration effected in accordance with this Section
     7.1; provided, however, that if at or prior to the fifth anniversary of the
   date of this Agreement News America, its affiliates and subsidiaries, and
     any permitted successors and assigns, collectively own more than 50% of the
    aggregate Registrable Securities subject to this Agreement (such number to
take account of any stock splits, dividends, combinations or other    
    adjustments affecting any of the Registrable Securities), then the holders
of Registrable Securities shall be entitled to one (1) additional     
 registration effected in accordance with this Section 7.1 in respect of
which PLD shall pay all Registration Expenses.                        

   (d) Effective Registration Statement.  A registration requested
    pursuant to this Section 7.1 shall not be deemed to have been effected (i)
    unless a registration statement with respect thereto has become effective,
    provided that a registration which does not become effective after PLD has
     filed a registration statement with respect thereto solely by reason of the
   refusal to proceed of News America (other than a refusal to proceed based
    upon the advice of counsel relating to a matter with respect to PLD) shall
be deemed to have been effected by PLD at the request of News America 
    unless News America shall have elected to pay all Registration Expenses in
    connection with such registration, (ii) if, after it has become effective,
  such registration becomes subject to any stop order, injunction or other
   order or requirement of the SEC or other governmental agency or court for
  any reason, or (iii) the conditions to closing specified in the purchase
  agreement or underwriting agreement entered into in connection with such
registration are not satisfied, other than by reason of some act or   
omission by News America.                                             

        (e) Selection of Underwriters.  If a requested registration pursuant
     to this Section 7.1 involves an underwritten offering, the managing or lead
   underwriter or underwriters thereof shall be selected by News America and
shall be acceptable to PLD, which shall not unreasonably withhold its 
acceptance of any such underwriters.                                  

      (f) Notwithstanding anything to the contrary contained herein, PLD
  shall be entitled to postpone for a reasonable period of time (but in no
     event more than 120 days) the filing of a registration statement if, at the
time it receives a request for such registration, (i) PLD reasonably  
determines, on the basis of written advice to such effect from outside
counsel or an investment banking firm representing PLD, that such     
  registration and the offering and sales thereunder by News America would
materially interfere with any financing, acquisition, corporate       
   reorganization or other material transaction or development involving PLD
    or any of its subsidiaries, and promptly gives News America notice of such
determination, (ii) PLD would be required to undergo a special interim
  audit or to prepare and file with the SEC sooner than would otherwise be
required pro forma or other financial statements.                     

7.2. Incidental Registration.                                         

   (a) Right to Include Registrable Securities. If PLD at any time
    proposes to register any of its securities under the Securities Act (other
     than by a registration on Form S-8, or any successor form thereto, relating
to a stock option plan, stock purchase plan, managing directors' plan,
     savings or similar plan and other than pursuant to Section 7.1), whether or
not for sale for its own account, it will each such time give prompt  
written notice to News America of its intention to do so and of News  
   America's rights under this Section 7.2. Upon the written request of News
 America made within 20 days after the receipt of any such notice (which
     request shall specify the Registrable Securities intended to be disposed of
    by News America and the intended method of disposition thereof), PLD will,
    subject to the terms of this Agreement, use its best efforts to effect the
   registration under the Securities Act of all Registrable Securities which
PLD has been so requested to register by News America, to the extent  
requisite to permit the disposition (in accordance with the intended  
methods thereof as aforesaid) of the Registrable Securities so to be  
     registered, by inclusion of such Registrable Securities in the registration
statement which covers the securities which News America proposes to  
    register, provided that if, at any time after giving written notice of its
     intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, PLD
shall determine for any reason either not to register or to delay     
 registration of such securities, PLD may, at its election, give written
 notice of such determination to News America and, thereupon, (i) in the
case of a determination not to                                        
A-15

DEF 14A
56th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 56th

   register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its     
obligation to pay the Registration Expenses in connection therewith), 
   without prejudice, however, to the rights of News America to request that
     such registration be effected as a registration under Section 7.1, and (ii)
    in the case of a determination to delay registering, shall be permitted to
  delay registering any Registrable Securities, for the same period as the
delay in registering such other securities. Except for the shares     
 registered pursuant to this Section 7.2, no registration effected under
this Section 7.2 shall relieve PLD of its obligation to effect any    
registration upon request under Section 7.1, nor shall any such       
    registration hereunder be deemed to have been effected pursuant to Section
7.1. PLD will pay all Registration Expenses in connection with each   
   registration of Registrable Securities requested pursuant to this Section
7.2.                                                                  

    (b) Priority in Incidental Registrations.  If (i) a registration
pursuant to this Section 7.2 involves an underwritten offering of the 
    securities so being registered, whether or not for sale for the account of
  PLD, to be distributed (on a firm commitment basis) by or through one or
more underwriters of recognized standing under underwriting terms     
appropriate for such a transaction, (ii) the Registrable Securities so
requested to be registered for sale for the account of holders of     
 Registrable Securities are not also to be included in such underwritten
offering (either because PLD has not been requested so to include such
  Registrable Securities pursuant to Section 7.4(b) or, if requested to do
    so, is not obligated to do so under Section 7.4(b), and (iii) the managing
     underwriter of such underwritten offering shall inform PLD and News America
  of its belief that the distribution of all or a specified number of such
   Registrable Securities concurrently with the securities being distributed
   by such underwriters would interfere with the successful marketing of the
  securities being distributed by such underwriters (such writing to state
 the basis of such belief and the approximate number of such Registrable
 Securities which may be distributed without such effect), then PLD may,
    upon written notice to News America, reduce the number of such Registrable
Securities the registration of which shall have been requested by News
America so that the resultant aggregate number of such Registrable    
     Securities so included in such registration shall be equal to the number of
shares stated in such managing underwriter's letter.                  

  7.3. Registration Procedures.  If and whenever PLD is required to effect
the registration of any Registrable Securities under the Securities Act as      
provided in Sections 7.1 and 7.2, PLD shall, as expeditiously as possible:      

      (i) prepare and (in the case of a registration pursuant to Section
7.1, such filing to be made within 60 days after the request of News  
   America) file with the SEC the requisite registration statement to effect
  such registration (including such audited financial statements as may be
 required by the Securities Act or the rules and regulations promulgated
    thereunder) and thereafter use its best efforts to cause such registration
 statement to become and remain effective, provided however that PLD may
  discontinue any registration of its securities which are not Registrable
   Securities (and, under the circumstances specified in Section 7.2(a), its
securities which are Registrable Securities) at any time prior to the 
 effective date of the registration statement relating thereto, provided
  further that before filing such registration statement or any amendments
thereto, PLD will furnish to the counsel selected by the holders of   
     Registrable Securities which are to be included in such registration copies
     of all such documents proposed to be filed, which documents will be subject
to the review of such counsel;                                        

         (ii) prepare and file with the SEC such amendments and supplements to
     such registration statement and the prospectus used in connection therewith
  as may be necessary to keep such registration statement effective and to
comply with the provisions of the Securities Act with respect to the  
    disposition of all securities covered by such registration statement until
     the earlier of such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or  
     sellers thereof set forth in such registration statement or (i) in the case
     of a registration pursuant to Section 7.1, the expiration of 180 days after
 such registration statement becomes effective, or (ii) in the case of a
    registration pursuant to Section 7.2, the expiration of 90 days after such
registration statement becomes effective;                             

A-16

DEF 14A
57th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 57th

      (iii) furnish to News America and each underwriter, if any, of the
    securities being sold such number of conformed copies of such registration
   statement and of each such amendment and supplement thereto (in each case
    including all exhibits), such number of copies of the prospectus contained
   in such registration statement (including each preliminary prospectus and
     any summary prospectus) and any other prospectus filed under Rule 424 under
   the Securities Act, in conformity with the requirements of the Securities
     Act, and such other documents, as News America and underwriter, if any, may
reasonably request in order to facilitate the public sale or other    
disposition of the Registrable Securities owned by News America;      

    (iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
    under such other securities laws or blue sky laws of such jurisdictions in
 the United States as News America and any underwriter of the securities
being sold by News America may reasonably request, to keep such       
    registrations or qualifications in effect for so long as such registration
statement remains in effect, and take any other action which may be   
reasonably necessary or advisable to enable News America and any such 
underwriter to consummate the disposition in such jurisdictions of the
  securities owned by News America, except that PLD shall not for any such
purpose be required to qualify generally to do business as a foreign  
corporation in any jurisdiction wherein it would not but for the      
   requirements of this subdivision (iv) be obligated to be so qualified, to
subject itself to taxation in any such jurisdiction or to consent to  
general service of process in any such jurisdiction;                  

        (v) use its best efforts to cause all Registrable Securities covered
  by such registration statement to be registered with or approved by such
  other governmental agencies or authorities as may be necessary to enable
    News America to consummate the disposition of such Registrable Securities;

        (vi) furnish to News America a signed counterpart, addressed to News
America and the underwriters, if any, of:                             

             (x) an opinion of counsel for PLD, dated the effective date of such
registration statement (or, if such registration includes an    
      underwritten public offering, an opinion dated the date of the closing
      under the underwriting agreement), reasonably satisfactory in form and
      substance to News America and its counsel and covering such matters as
       are customarily covered in opinions of issuer's counsel in transactions
of this sort, and                                               

       (y) a "comfort" letter (or, in the case News America does not
     satisfy the conditions for receipt of a "comfort" letter specified in
   Statement on Auditing Standards No. 72, an "agreed upon procedures"
      letter), dated the effective date of such registration statement (and,
       if such registration includes an underwritten public offering, a letter
 of like kind dated the date of the closing under the underwriting
 agreement), signed by the independent public accountants who have
  certified PLD's financial statements included in such registration
       statement, covering substantially the same matters with respect to such
        registration statement (and the prospectus included therein) and, in the
     case of the accountants' letter, with respect to events subsequent to
    the date of such financial statements, as are customarily covered in
     opinions of issuer's counsel and in accountants' letters delivered to
      the underwriters in underwritten public offerings of securities (with,
        in the case of an "agreed upon procedures" letter, such modifications or
      deletions as may be required under Statement on Auditing Standards No.
     35) and, in the case of the accountants' letter, such other financial
matters, and, in the case of the legal opinion, such other legal
     matters, as News America (or the underwriters, if any) may reasonably
request;                                                        

(vii) notify News America and the managing underwriter or   
    underwriters, if any, promptly and confirm such advice in writing promptly
thereafter:                                                           

    (v) when the registration statement, the prospectus or any
        prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed, and, with respect to the 
        registration statement or any post-effective amendment thereto, when the
same has become effective;                                      

A-17

DEF 14A
58th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 58th

            (w) of any request by the SEC for amendments or supplements to the
       registration statement or the prospectus or for additional information;

         (x) of the issuance by the SEC of any stop order suspending the
    effectiveness of the registration statement or the initiation of any
proceedings by any Person for that purpose;                     

           (z) of the receipt by PLD of any notification with respect to the
      suspension of the qualification of any Registrable Securities for sale
under the securities or blue sky laws of any jurisdiction or the
initiation or threat of any proceeding for such purpose; and    

     (viii) notify News America at any time when a prospectus relating
  thereto is required to be delivered under the Securities Act, upon PLD's
  discovery that, or upon the happening of any event as a result of which,
    the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any 
material fact required to be stated therein or necessary to make the  
  statements therein not misleading in the light of the circumstances then
   existing, and at the request of News America promptly prepare and furnish
     to News America and each underwriter, if any, a reasonable number of copies
   of a supplement to or an amendment of such prospectus as may be necessary
     so that, as thereafter delivered to the purchasers of such securities, such
     prospectus shall not include an untrue statement of a material fact or omit
     to state a material fact required to be stated therein or necessary to make
 the statements therein not misleading in the light of the circumstances
then existing;                                                        

   (ix) use its best efforts to obtain the withdrawal of any order
    suspending the effectiveness of the registration statement at the earliest
possible moment; and                                                  

          (x) otherwise use its best efforts to comply with all applicable rules
     and regulations of SEC, and make available to its security holders, as soon
    as reasonably practicable, an earnings statement covering the period of at
    least twelve months, but not more than eighteen months, beginning with the
  first day of PLD's first full calendar month after the effective date of
 such registration statement, which earnings statement shall satisfy the
    provisions of Section 11(a) of the Securities Act and Rule 158 thereunder,
   and will furnish to News America at least five business days prior to the
   filing thereof a copy of any amendment or supplement to such registration
statement or prospectus and shall not file any thereof to which News  
   America shall have reasonably objected on the grounds that such amendment
or supplement does not comply in all material respects with the       
requirements of the Securities Act or of the rules or regulations     
thereunder.                                                           

     PLD will not file any registration statement or amendment thereto hereunder
or any prospectus or any supplement thereto (including such documents           
incorporated by reference and proposed to be filed after the initial filing of  
the registration statement) to which News America shall reasonably object,      
provided that PLD may file such document in a form required by law or upon the  
advice of its counsel.                                                          

 News America agrees by acquisition of such Registrable Securities that,
upon receipt of any notice from PLD of the occurrence of any event of the kind  
described in subdivision (viii) of this Section 7.3, it will forthwith          
discontinue its disposition of Registrable Securities pursuant to the           
registration statement relating to such Registrable Securities until its receipt
of the copies of the supplemented or amended prospectus contemplated by         
subdivision (viii) of this Section 7.3 and, if so directed by PLD, will deliver 
to PLD (at PLD's expense) all copies, other than permanent file copies, then in 
its possession of the prospectus relating to such Registrable Securities current
at the time of receipt of such notice. In the event PLD shall give any such     
notice, the period mentioned in paragraph (ii) of this Section 7.3 shall be     
extended by the length of the period from and including the date when News      
America shall have received such notice to the date on which each such seller   
has received the copies of the supplemented or amended prospectus contemplated  
by paragraph (viii) of this Section 7.3.                                        

7.4. Provision of Information; Transfer of Shares After Registration. 

   (a) News America shall, prior to the filing of any Registration
Statement pursuant to this Agreement, provide PLD in writing with such
information specified in Item 507 of Regulation S-K under             
A-18

DEF 14A
59th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 59th

   the Securities Act and any other similar information reasonably requested
by PLD for use in connection with such Registration Statement or any  
   related prospectus or preliminary prospectus. News America shall promptly
  furnish to PLD all information required to be disclosed in order to make
the information previously furnished to PLD not materially misleading.

          (b) News America agrees that it will not effect any disposition of the
   Registrable Securities that would constitute a sale within the meaning of
    the Securities Act except as contemplated in the Registration Statement or
as otherwise in compliance with applicable securities laws, including,
without limitation, to the extent applicable, the prospectus delivery 
requirements of the Securities Act.                                   

7.5. Indemnification.                                                 

        (a) Indemnification by PLD.  In the event of any registration of any
     securities of PLD under the Securities Act, PLD will, and hereby does agree
  to, indemnify and hold harmless News America against any losses, claims,
damages or liabilities, joint or several, to which News America or any
  director or officer of News America or underwriter or controlling person
   may become subject under the Securities Act or otherwise, insofar as such
    losses, claims, damages or liabilities (or actions or proceedings, whether
     commenced or threatened, in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact 
  contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus, final
 prospectus or summary prospectus contained therein, or any amendment or
    supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the  
     statements therein not misleading. Such indemnification shall be subject to
     customary terms and provisions governing indemnification in transactions of
     this type; provided, however, that PLD shall not be liable in any such case
     to the extent that such loss, claim, damages or liability arises out of, or
is based upon (i) an untrue statement of a material fact made in such 
   Registration Statement, or any omission of a material fact required to be
     stated therein or necessary to make the statements therein, in light of the
    circumstances under which they were made, not misleading, made in reliance
   upon and in conformity with written information furnished to PLD by or on
behalf of News America specifically for use in preparation of such    
     Registration Statement, (ii) the failure of News America to comply with the
covenants and agreements contained in Sections 7.3 or 7.4(a) hereof   
     respecting sale of the Registrable Securities or (iii) any untrue statement
of a material fact, or any omission of a material fact required to be 
     stated therein or necessary to make the statements therein, in light of the
     circumstances under which they were made, not misleading, in any prospectus
   that is corrected in any subsequent prospectus that was delivered to News
America prior to the pertinent sale or sales by News America.         

         (b) Indemnification by News America.  PLD may require, as a condition
     to including any Registrable Securities in any registration statement filed
pursuant to Section 7.3, that PLD shall have received an undertaking  
 satisfactory to it from News America of such Registrable Securities, to
   indemnify and hold harmless (in the same manner and to the same extent as
     set forth in subdivision (a) of this Section 7.5) PLD, each director of PLD
    each officer of PLD and each other person, if any, who controls PLD within
 the meaning of the Securities Act, with respect to (i) any statement or
     alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary    
  prospectus contained therein, or any amendment or supplement thereto, if
 such statement or alleged statement or omission or alleged omission was
    made in reliance upon and in conformity with written information furnished
 to PLD through an instrument duly executed by News America specifically
stating that it is for use in the preparation of such registration    
  statement, preliminary prospectus, final prospectus, summary prospectus,
  amendment or supplement, (ii) the failure of News America to comply with
     the covenants and agreements contained in the last paragraph of Section 7.3
   or in Section 7.4(a) hereof respecting sale of the Registrable Securities
or (iii) any untrue statement of a material fact, or any omission of a
material fact required to be stated therein or necessary to make the  
 statements therein, in light of the circumstances under which they were
     made, not misleading, in any prospectus that is corrected in any subsequent
   prospectus that was delivered to News America prior to the pertinent sale
or sales by News America.                                             

A-19

DEF 14A
60th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 60th

ARTICLE VIII

TERMINATION AND ABANDONMENT 

8.1. Termination.                                                     

         (a) This Agreement may be terminated at any time prior to the Closing
Date, by mutual written consent of News America and PLD.              

          (b) This Agreement may be terminated by News America, on the one hand,
  or PLD, on the other hand, if the transactions contemplated hereby shall
  not have been consummated on or before June 30, 1998; provided, however,
    that the right to terminate this Agreement pursuant to this Section 8.1(b)
 shall not be available to any party whose failure to perform any of its
covenants or obligations under this Agreement has been the cause of or
     resulting in the failure of the transactions contemplated by this Agreement
to occur on or prior to the aforesaid date.                           

       (c) This Agreement may be terminated by either News America, on the
    one hand, or PLD, on the other hand, if (i) any governmental or regulatory
 body, the consent of which is a condition to the obligations of PLD and
     News America to consummate the transactions contemplated hereby, shall have
   determined not to grant its consent and all appeals of such determination
shall have been taken and have been unsuccessful, or (ii) any court of
competent jurisdiction shall have issued an order, judgment or decree 
permanently restraining, enjoining or otherwise prohibiting the       
   transactions contemplated hereby and such order, judgment or decree shall
have become final and nonappealable.                                  

          (d) This Agreement may be terminated by News America, on the one hand,
     or PLD, on the other hand, if there has been a material violation or breach
  of any agreement, representation or warranty contained in this Agreement
   which violation or breach has not been waived by the non-breaching party.

   8.2. Procedure and Effect of Termination.  In the event of termination of
this Agreement and abandonment of the transactions contemplated hereby by either
or both of the parties pursuant to Section 8.1, written notice thereof shall    
forthwith be given by the terminating party to the other party and this         
Agreement shall terminate and the transactions contemplated hereby shall be     
abandoned, without further action by any of the parties hereto without prejudice
to any claims of a party to this Agreement arising prior to the date of such    
termination in respect of any breach of any representation, warranty or         
agreement contained in this Agreement and provided that (a) the provisions of   
Sections 5.4 and Article X (except for section 10.4) hereof shall survive such  
termination, and (b) that regardless of such termination the provisions of      
Article IX hereof shall continue with respect to any such claims. If this       
Agreement is terminated as provided herein all filings, applications and other  
submissions made pursuant to this Agreement, to the extent practicable, shall be
withdrawn from the agency or other person to which they were made.              

ARTICLE IX

SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

9.1. Survival of Representations.  All representations, warranties and
agreements made by PLD or News America in this Agreement shall survive the      
Closing until one (1) year after the Closing.                                   

     9.2. Statements as Representations.  PLD's Written Disclosure Materials and
any statements contained herein made by News America shall be deemed            
representations and warranties within the meaning of Section 9.1 hereof.        

   9.3. PLD's Indemnification of News America.  Subject to the conditions of
this Article VIII, PLD hereby agrees that it shall indemnify, defend and hold   
harmless News America and any parent, subsidiary and affiliate of News America  
(collectively, the "News America Group") from and against all demands, claims,  
actions or causes of action, assessments, losses, damages, liabilities, costs   
and expenses, including, without limitation, interest, penalties and attorneys' 
fees and expenses (collectively, "Damages"), asserted against, resulting to,    
imposed upon or incurred by any of News America Group, directly or indirectly,  
arising out of or                                                               

A-20

DEF 14A
61st Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 61st

resulting from a breach of any representation, warranty or agreement of PLD     
contained in or made pursuant to this Agreement or any facts or circumstances   
constituting such a breach (collectively, "News America's Indemnifiable         
Claims"); provided, however, that the indemnification obligation of PLD with    
respect to any inaccuracy in any of the representations or warranties made by   
PLD in this Agreement shall arise only in the event that PLD had knowledge of   
such inaccuracy on or before the Closing; provided, further, that for purposes  
of this Agreement "knowledge" shall mean knowledge on the part of any member of 
management of PLD or knowledge of such circumstances that would lead a person   
not negligent to investigate and, more likely than not, obtain actual knowledge.

   9.4. News America's Indemnification of PLD.  Subject to the conditions of
this Article VIII, News America hereby agrees that it shall indemnify, defend   
and hold harmless PLD and any parent, subsidiary and affiliate of PLD           
(collectively, the "PLD Group") from and against all Damages asserted against,  
resulting to, imposed upon or incurred by any of the PLD Group, directly or     
indirectly, arising out of or resulting from a breach of any representation,    
warranty or agreement of News America contained in or made pursuant to this     
Agreement or any facts or circumstances constituting such a breach ("PLD        
Indemnifiable Claims"; PLD's Indemnifiable Claims and News America's            
Indemnifiable Claims are collectively referred to herein as the "Indemnifiable  
Claims"); provided, however, that the indemnification obligation of News America
with respect to any inaccuracy in any of the representations or warranties made 
by News America in this Agreement shall arise only in the event that News       
America had knowledge of such inaccuracy on or before the Closing; provided,    
further, that for purposes of this Agreement "knowledge" shall mean knowledge on
the part of any member of management of News America or knowledge of such       
circumstances that would lead a person not negligent to investigate and, more   
likely than not, obtain actual knowledge.                                       

     9.5. Conditions of Indemnification.  The obligations and liabilities of PLD
under Section 9.3 or News America under Section 9.4, respectively, with respect 
to Indemnifiable Claims resulting from the assertion of liability by third      
parties shall be subject to the following terms and conditions:                 

          (a) The member of the News America Group or the PLD Group, as the case
     may be, asserting the existence of an Indemnifiable Claim (the "Indemnified
    Party") will give notice of any such Indemnifiable Claim to the party from
whom Indemnification is sought (the "Indemnifying Party"), and the    
     Indemnifying Party shall undertake the defense thereof by representation of
     their choosing, and will consult with the Indemnified Party concerning such
defense during the course thereof.                                    

         (b) In the event that the Indemnifying Party within a reasonable time
   after notice of any Indemnifiable Claim, fails to defend, the Indemnified
   Party against which such Indemnifiable Claim has been asserted will (upon
   further notice to the Indemnifying Party) have the right to undertake the
    defense, compromise or settlement of such Indemnifiable Claim on behalf of
and for the account and risk of the Indemnifying Party.               

         (c) Anything in this Section 9.5 to the contrary notwithstanding, (i)
if there is a reasonable probability that an Indemnifiable Claim may  
materially and adversely affect the Indemnified Party other than as a 
result of money damages or other money payments, the Indemnified Party
 shall have the right to defend, compromise or settle such Indemnifiable
   Claim, and (ii) the Indemnifying Party shall not, without the Indemnified
Party written consent, settle or compromise any Indemnifiable Claim or
consent to entry of any judgment in respect thereof, unless (A) the   
     Indemnifying Party delivers to the Indemnified Party in advance its written
     agreement satisfactory to the Indemnified Party which provides that amounts
    paid and incurred or to be incurred by the Indemnified Party in connection
    with such Indemnifiable Claim shall be repaid promptly by the Indemnifying
    Party to the Indemnified Party (subject to the limitations of this Article
VIII), and (B) such settlement, compromise or consent includes as an  
   unconditional term thereof the giving by the claimant or the plaintiff to
 the Indemnified Party and/or such member, as the case may be, a release
from all liability in respect to such Indemnifiable Claim.            

  9.6. Cushion.  The provisions for indemnity contained in Section 9.3 and
Section 9.4 hereof shall only be effective with respect to an Indemnifiable     
Claim (or, if more than one Indemnifiable Claim is asserted, with respect to all
Indemnifiable Claims) to the extent the amount (or aggregate amount, in the case
of more                                                                         
A-21

DEF 14A
62nd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 62nd

than one Indemnifiable Claim) of damages sustained in connection therewith      
exceeds One Hundred Thousand dollars (USD$100,000), but to the extent that the  
amount or amounts of damages in respect of Indemnifiable Claims exceeds         
$100,000, the indemnity provisions hereunder shall apply to all such damages,   
without regard to the $100,000 level.                                           

   9.7. Limitation of Liability.  Anything in this Agreement to the contrary
notwithstanding, the liability of an Indemnifying Party to indemnify an         
Indemnified Party against any damages sustained in connection with any          
Indemnifiable Claim shall be limited to Indemnifiable Claims as to which written
notice shall have been given to the Indemnifying Party on or prior to the       
earlier of the first anniversary date of the Closing Date or public release of  
audited financials of PLD covering the fiscal year ended December 31, 1998,     
whether or not the Indemnified Party has actually settled or incurred any       
expense with respect to such Damages. Furthermore, anything in this Agreement to
the contrary notwithstanding, if such Indemnifiable Claim relates to a          
representation or warranty made by (a) News America, the amount of liability    
shall be limited to $100,000 and (b) PLD, the amount of liability shall be      
converted to PLD Common Stock and issued to News America at the same rate/value 
as the PLD shares issued to News America by PLD pursuant to Section 1.1 hereof, 
provided that the amount of liability of PLD shall be limited to twenty million 
U.S. dollars ($20,000,000). In the event that the rules of any stock exchange   
upon which the PLD Common Stock is then traded, or any interdealer quotation    
system upon which quotations for the PLD Common Stock are then available, shall 
not permit the issuance of PLD Common Stock without either the approval of      
shareholders of PLD or the receipt of some other approval, then in satisfaction 
of its liability to indemnify pursuant to this Article IX, PLD shall issue the  
maximum number of shares of PLD Common Stock as can then be issued in accordance
with such rules, and shall issue in respect of the remainder of such liability  
shares of preferred stock having such terms and conditions as may be agreed upon
between News America and PLD, such preferred stock to be convertible into PLD   
Common Stock at such time as any requisite shareholder or other approval is     
obtained.                                                                       

     9.8. Remedies Cumulative.  The remedies provided herein shall be cumulative
and shall not preclude the assertion by News America or PLD of any other rights 
or the seeking of any other remedies against the other party, as the case may   
be.                                                                             

    9.9. Assignment of Certain Representations, Warranties and Indemnification
Obligations.  In lieu of making any representations or warranties with respect  
to the Holdings Shares being sold to and exchange with PLD hereunder, News      
America hereby assigns to the benefit of PLD, its successors and assigns, the   
representations, warranties and agreements made by C&W in the Stock Purchase    
Agreement with respect to the Holdings Shares and its indemnification           
obligations under such agreement, and agrees that PLD has the right to rely upon
such representations, warranties and agreements, and enforce such               
indemnification obligations, as fully as if it were a party to the Stock        
Purchase Agreement. PLD acknowledges and agrees that its sole recourse with     
respect to the Holdings Shares is to seek indemnification from C&W with respect 
thereto and further agrees that News America shall have no liability therefor.  

ARTICLE X 

MISCELLANEOUS PROVISIONS

10.1. Amendment and Modification.  Subject to applicable law, this    
Agreement may be amended, modified or supplemented only by written agreement    
signed by all of the parties hereto.                                            

     10.2. Waiver of Compliance; Consents.  Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,     
covenant, agreement or condition herein may be waived by the party entitled to  
the benefits thereof only by a written instrument signed by the party granting  
such waiver, but such waiver shall not operate as a waiver of, or estoppel with 
respect to, any subsequent or other failure.                                    

    10.3. Notices.  All notices and other communications hereunder shall be in
writing and shall be deemed effectively given upon personal delivery to the     
party to be notified, on the next Business Day after delivery to a recognized   
overnight courier service, upon confirmation of receipt of a facsimile          
transmission, or five days after deposit with the United States Post Office, by 
registered or certified mail (return receipt requested), postage                
A-22

DEF 14A
63rd Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 63rd

prepaid, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice; provided that notices of a change 
of address shall be effective only upon receipt thereof):                       

If to PLD, to:                                                  

PLD Telekom Inc.                                                
680 Fifth Avenue                                                
24th Floor                                                      
New York, New York 10019                                        
Facsimile: (212) 262-8870                                       
Attention: James Hatt                                           

If to News America, to:                                         

News America Incorporated                                       
1211 Avenue of the Americas                                     
New York, New York 10036                                        
Facsimile: (212) 768-2029                                       
Attention: General Counsel                                      

(with a copy to:                                                

Skadden, Arps, Slate, Meagher & Flom LLP                        
919 Third Avenue                                                
New York, New York 10022                                        
Facsimile: (212) 735-2000                                       
Attention: Alan G. Straus, Esq.)                                

     10.4. Assignment.  This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the     
rights, interests or obligations hereunder shall be assigned by any party       
hereto, including by operation of law without the prior written consent of the  
other party, nor is this Agreement intended to confer upon any other person     
except the parties hereto any rights or remedies hereunder; provided, however,  
that (a) PLD will have the right, at any time at or prior to the Closing, to    
designate in writing, in accordance with applicable law, one or more of its     
Affiliates to purchase, in whole or in part, the Holdings Shares on the terms   
set out in this Agreement, and PLD shall remain jointly and severally liable    
with its designee(s) under this Agreement following such designation, (b) News  
America will have the right, at any time at or prior to the Closing, to         
designate in writing, in accordance with applicable law, one or more of its     
affiliates to purchase, in whole or in part, the New PLD Shares on the terms set
out in this Agreement, and News America shall remain jointly and severally      
liable with its designee(s) under this Agreement following such designation and 
(c) News America shall have the right, at its sole discretion, to assign to ZAO 
LogoVAZ ("LogoVAZ") its rights to purchase one-half of the New PLD Shares (and, 
if such rights are exercised, such rights shall be exercised by News America and
LogoVAZ concurrently as to the entire portion of the New PLD Shares); provided, 
that it shall be a condition to any assignment under clauses (b) or (c) hereof  
that the assignee represent and warrant to PLD as to the matters set forth in   
Section 4.6, and otherwise agrees to be bound by the terms of this Agreement as 
if such assignee had been a party to this Agreement.                            

    10.5. Confidentiality.  Each of the Parties hereto will hold, and will use
its reasonable, good faith efforts to cause its respective shareholders,        
partners, members, directors, officers, employees, accountants, counsel,        
consultants, agents and financial or other advisors (collectively "Agents") to  
hold, in confidence all information (whether oral or written), including this   
Agreement and the documents contemplated herein, concerning the transactions    
contemplated by this Agreement furnished to such Party by or on behalf of any   
other Party in connection with such transactions, unless legally compelled (by  
deposition, interrogatory, request for documents, subpoena, civil investigative 
demand or similar process, or by order of a court or tribunal of competent      
jurisdiction, or in order to comply with applicable rules or requirements of any
stock exchange, government department or agency or other regulatory authority,  
or by requirements of any securities                                            
A-23

DEF 14A
64th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 64th

law or regulation or other legal requirement) to disclose any such information  
or documents, and except to the extent that such information or documents can be
shown to have been (a) previously known on a nonconfidential basis by such      
Party, (b) in the public domain through no fault of such Party or (c) acquired  
by such Party on a nonconfidential basis from sources not known by such Party to
be bound by any obligation of confidentiality in relation thereto.              
Notwithstanding the foregoing provisions of this Section 10.5, each Party may   
disclose such information to its Agents in connection with the transactions     
contemplated by this Agreement or any of the other ancillary Agreements so long 
as such Agents are informed by such Party of the confidential nature of such    
information and are required by such Party to treat such information            
confidentially, and to certain governmental agencies in connection with the     
procurement of the governmental authorizations contemplated by this Agreement.  
The obligation of each Party to hold any such information in confidence shall be
satisfied if such Party exercises the same care with respect to such information
as it would take to preserve the confidentiality of its own similar information.
If this Agreement is terminated, each Party will, and will use its reasonable,  
good faith efforts to cause its respective Agents, to destroy or deliver to the 
other Party, upon request, all documents and other materials, and all copies    
thereof, obtained by such Party or on its behalf from the other Party hereto in 
connection with this Agreement that are subject to such confidence.             

    10.6. Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (regardless of the laws that  
might otherwise govern under applicable New York principles of conflicts of law)
as to all matters, including but not limited to matters of validity,            
construction, effect, performance and remedies.                                 

10.7. Counterparts.  This Agreement may be executed in two or more    
counterparts, each of which shall be deemed an original, but all of which       
together shall constitute one and the same instrument.                          

   10.8. Interpretation.  The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of 
this Agreement. As used in this Agreement, (a) the term "person" shall mean and 
include an individual, a partnership, a joint venture, a corporation, a trust,  
an unincorporated organization and a governmental entity or any department or   
agency thereof, (b) the term "subsidiary" when used in reference to any other   
person shall mean any corporation of which outstanding securities having        
ordinary voting power to elect a majority of the Board of Directors of such     
corporation are owned directly or indirectly by such other person and (c) the   
terms "affiliate" and "parent" shall have the meanings set forth in Rule 12b-2  
of the Exchange Act.                                                            

     10.9. Entire Agreement.  This Agreement, including the documents, schedules
and certificates referred to herein, embody the entire agreement and            
understanding of the parties hereto in respect of the transactions contemplated 
by this Agreement. There are no restrictions, promises, representations,        
warranties, covenants or undertakings, other than those expressly set forth or  
referred to herein or therein. This Agreement supersedes all prior agreements   
and understandings between the parties with respect to such transactions.       

   IN WITNESS WHEREOF, PLD and News America have caused this agreement to be
signed by their respective duly authorized officers as of the date first above  
written.                                                                        

                             NEWS AMERICA INCORPORATED

                       By: /s/ JOHN NALLEN
                                            ------------------------------------
                         Name: John Nallen
              Title:

                    PLD TELEKOM INC.

                           By: /s/ JAMES R.S. HATT
                                            ------------------------------------
                             Name: James R.S. Hatt
                                   Title:  President and Chief
                                 Executive Officer

A-24

DEF 14A
65th Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 65th

PLD TELEKOM INC.

 SPECIAL AND ANNUAL MEETING OF STOCKHOLDERS, AUGUST 13, 1998

The undersigned hereby appoints James R.S. Hatt and Simon Edwards, or 
either one of them acting singly, with full power of substitution, the proxy or 
proxies of the undersigned to attend the Special and Annual Meeting of          
Stockholders of PLD Telekom Inc. to be held on August 13, 1998, and any         
adjournments thereof, to vote all shares of stock that the undersigned would be 
entitled to vote if personally present in the manner indicated below and on the 
reverse side, and on any other matters properly brought before the meeting or   
any adjournments thereof, all as set forth in the July 22, 1998 proxy statement.

 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

THIS PROXY IS CONTINUED ON THE REVERSE SIDE,
PLEASE DATE, SIGN AND RETURN PROMPTLY.

DEF 14A
Last Page of 66
TOC
1st
Previous
Next
↓Bottom
Just 66th
PLEASE MARK YOUR CHOICE LIKE THIS [X] IN BLUE OR
 BLACK INK THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR
PROPOSAL 1 AND FOR ALL NOMINEES.

1.       Approval of the Asset Exchange Agreement, dated April 19, 1998, between
      PLD Telekom Inc. and News America Incorporated, and the transactions
contemplated thereby.                                         
  FOR [  ]           AGAINST [  ]        ABSTAIN  [  ]

2.       ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS: Dr. Boris Antoniuk,   
         Edward Charles Dilley, Simon Edwards, James R.S. Hatt, Gordon Humphrey,
     Gennady Kudriavtsev, Dr. Vladimir Kvint, I. Martin Pompadur, Julian
Rawle and David M. Stovel.                                    
         FOR ALL NOMINEES [  ]                    WITHHOLD FOR ALL NOMINEES [  ]

     WITHHOLD FOR THE FOLLOWING ONLY: (WRITE THE NAMES OF THE NOMINEE(S)
IN THE SPACE BELOW)                                           

         -----------------------------------------------------------------------

3.       To vote on such other matters that may properly come before the        
meeting. I plan to attend the meeting: Yes  [  ]      No [  ] 

THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL
 AND ANNUAL MEETING, PROXY STATEMENT AND ANNUAL REPORT OF PLD TELEKOM INC.

                              Dated                           , 1998
                              --------------------------

                              --------------------------------------
                           Signature

                              --------------------------------------
                             Signature if held jointly

                               (Signature should be exactly as name or
                                    names appear on this proxy. If stock is held
                                    jointly, each holder should sign. If signing
                                is by attorney, executor, administrator,
                             trustee or guardian, please give full
title.) 

THIS PROXY WILL BE VOTED FOR THE ABOVE MATTERS AND FOR ALL NOMINEES UNLESS
OTHERWISE INDICATED, AND IN THE DISCRETION OF THE PROXIES ON ALL OTHER MATTERS
PROPERLY BROUGHT BEFORE THE MEETING.

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEF 14A’ Filing		Date		First		Last			Other Filings
		4/19/08		17
		4/19/03		18
		6/30/02		30
		1/1/00		30
		6/22/99		43
		12/31/98		39		62			10-K,  10-K/A
		12/1/98		21
		8/14/98		8		15			10-Q
For Period End:		8/13/98		2		65
		8/7/98		16
Filed on:		7/22/98		2		65			10-K/A,  10-Q/A
		6/30/98		16		60			10-Q
		6/15/98		2		9
		6/1/98		8		21
		5/31/98		8		21
		5/30/98		24		25
		5/15/98		4					10-Q
		5/4/98		12		17
		4/29/98		4					10-K/A
		4/24/98		17
		4/22/98		4		12			8-K
		4/21/98		25					SC 13D/A
		4/20/98		13
		4/19/98		2		66
		4/17/98		7
		4/16/98		43
		4/8/98		4					8-K/A
		4/3/98		4					8-K,  8-K/A,  S-3/A,  S-4/A
		3/31/98		4		21			10-K,  10-Q,  10-Q/A
		3/16/98		11
		2/13/98		25
		2/2/98		25
		2/1/98		32		35
		1/1/98		21
		12/31/97		4		46			10-K,  10-K/A
		11/26/97		30		31
		9/30/97		35					10-Q
		8/1/97		34		35
		7/28/97		35
		7/1/97		35
		6/16/97		31
		6/1/97		33		35
		2/28/97		29
		1/1/97		46
		12/31/96		20		33			10-K,  10-K/A,  NT 10-K
		8/6/96		35
		7/1/96		35
		5/31/96		50
		12/31/95		30		33
		11/28/95		12
		10/1/95		35
		6/28/95		43
		1/1/95		30		35
		3/3/94		29
		2/18/93		38
									List all Filings