<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No.__)
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 (S)240.14a-11(c) or (S)240.14a-12
AIRGATE PCS, 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):
[X] 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:
------------------------------------------------------------------------
[_] 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:
------------------------------------------------------------------------
Notes:
<PAGE>
[AIRGATE LOGO]
233 Peachtree Street, N.E.
Harris Tower, Suite 1700
Atlanta, Georgia 30303
December 16, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of the Stockholders of
AirGate PCS, Inc. on Friday, January 21, 2000, at 1:00 pm, local time at the
Marriott Marquis, 265 Peachtree Center Avenue, N.E., Atlanta, Georgia, 30303. We
hope that many of our stockholders will be able to attend the meeting and we
look forward to greeting those able to attend.
The notice of annual meeting and proxy statement accompanying this letter
describe the specific business to be acted upon.
It is important that your shares be represented at the meeting. Whether or not
you plan to attend in person, you are requested to indicate your vote, and sign,
date, and promptly return the enclosed proxy card in the envelope provided.
On behalf of the Board of Directors, I would like to express our appreciation
for your continued interest in AirGate PCS. The Board of Directors and the
management team look forward to seeing you at the meeting.
Sincerely,
/s/ Thomas M. Dougherty
Thomas M. Dougherty
President and
Chief Executive Officer
<PAGE>
[AIRGATE LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DATE: Friday, January 21, 2000
TIME: 1:00 p.m.
PLACE: The Marriott Marquis
265 Peachtree Center Avenue, NE
Atlanta, Georgia 30303
The purposes of the Annual Meeting are:
1. To elect Directors; and
2. To transact any other business that may properly come before
the meeting.
By Order of the Board of Directors
/s/ Shelley L. Spencer
Shelley L. Spencer
Vice President of Law and
Corporate Secretary
December 16, 1999
Atlanta, Georgia
<PAGE>
PROXY STATEMENT
This Proxy Statement and the accompanying proxy card are first being given or
sent on or about December 16, 1999, to stockholders of AirGate PCS, Inc. in
connection with the solicitation of proxies by the Board of Directors for the
Annual Meeting of Stockholders. This proxy procedure is necessary to permit all
AirGate stockholders, many of whom live throughout the United States and are
unable to attend the Annual Meeting, to vote. The Board of Directors encourages
you to read this document thoroughly and to take this opportunity to vote on the
matters to be decided at the Annual Meeting.
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Voting Procedures.......................................................... 1
Corporate Governance....................................................... 2
Election of Directors (Item 1 on Proxy Card)............................... 3
Executive Compensation..................................................... 6
Certain Related Transactions .............................................. 11
Security Ownership of Certain Beneficial Owners, Directors and Officers.... 12
Section 16(a) Beneficial Ownership Reporting Compliance.................... 13
Stockholder Proposals...................................................... 13
Other Business............................................................. 14
</TABLE>
<PAGE>
AIRGATE PCS, INC.
233 Peachtree Street, N.E.
Harris Tower, Suite 1700
Atlanta, Georgia 30303
VOTING PROCEDURES
YOUR VOTE IS VERY IMPORTANT. The enclosed proxy is solicited by our Board of
Directors for use at the Annual Meeting of Stockholders to be held on Friday,
January 21, 2000, at 1:00 p.m. local time, or at any continuation, adjournment
or postponement thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting. Your shares can only be voted at the
Annual Meeting if you are present or represented by proxy. Whether or not you
plan to attend the Annual Meeting, you are encouraged to vote by proxy to assure
that your shares will be represented. You may revoke this proxy at any time
before it is voted, by written notice to the Corporate Secretary, by submission
of a proxy bearing a later date or by casting a ballot at the Annual Meeting.
Properly executed proxies that are received by the Proxy Committee before the
Annual Meeting's adjournment will be voted in accordance with the directions
provided. If no directions are given, your shares will be voted by the Proxy
Committee as recommended by the Board of Directors. If you wish to give a proxy
to someone other than the Proxy Committee named on the proxy card, you should
cross out those names and insert the name(s) of the person(s), not more than
two, to whom you wish to give your proxy.
WHO CAN VOTE? Stockholders as of the close of business on December 7, 1999 are
entitled to vote. On that day, 11,969,734 shares of common stock were
outstanding and eligible to vote. Each share is entitled to one vote on each
matter presented at the Annual Meeting. A list of stockholders eligible to vote
will be available at the principal executive offices of AirGate PCS, Inc, 233
Peachtree Street, N.E., Harris Tower, Suite 1700, Atlanta, Georgia 30303,
beginning January 11, 2000. Stockholders may examine this list during normal
business hours for any purpose relating to the Annual Meeting.
HOW DO I VOTE? Other than by attending the Annual Meeting and voting in person,
there are two ways registered stockholders may vote their shares by proxy:
. By mail; or
. By facsimile or similar reliable transmission.
To vote by mail, simply mark, sign and date the enclosed proxy card and return
it in the postage-paid envelope provided. You may vote by delivering your proxy
card by facsimile or other reliable reproduction of the proxy card, provided
that the facsimile or other reliable reproduction of the proxy card is a
complete reproduction of the entire original writing or transmission. You may
submit your proxy card by facsimile or other reliable reproduction 24 hours a
day, 7 days a week at (404) 525-7922. If you hold your shares through a broker,
bank or other nominee, you will receive separate instructions from the nominee
describing how to vote your shares.
WHAT SHARES ARE INCLUDED IN THE PROXY CARD? The proxy card represents all the
shares registered to your account.
HOW ARE VOTES COUNTED? The Annual Meeting will be held if a quorum, consisting
of a majority of the outstanding shares of common stock entitled to vote, is
represented. Broker non-votes, votes withheld and abstentions will be counted
for purposes of determining whether a quorum has been reached. "Broker
non-votes"
1
<PAGE>
occur when nominees, such as banks and brokers, holding shares on
behalf of beneficial owners, do not receive voting instructions from the
beneficial owners by 10 days before the Annual Meeting. In this event, the
nominees may vote those shares only on matters deemed routine, such as the
election of Directors. On non-routine matters, nominees cannot vote and there is
a so-called "broker non-vote" on that matter. Because Directors are elected by a
plurality of the votes cast, votes withheld from some or all nominees for
Director could have an effect on the outcome of the election.
WHO WILL COUNT THE VOTE? Our transfer agent, American Stock Transfer & Trust
Company, will tally the vote, which will be certified by an independent
Inspector of Election who shall be a representative of Corporate Communications,
Inc.
IS MY VOTE CONFIDENTIAL? We have a policy of vote confidentiality. Proxies,
ballots and voting tabulations are available for examination only by the
Inspector of Election and tabulators. Your vote cannot be disclosed to our Board
or management, except as may be required by law and in other limited
circumstances.
WHO SHALL PAY FOR THE COSTS OF THE PROXY SOLICITATION? We will pay the costs, if
any, of soliciting proxies for the upcoming Annual Meeting. We will ask banks,
brokerage houses, fiduciaries and custodians holding stock in their names for
others to send proxy materials to and obtain proxies from the beneficial owners
of such stock, and we will reimburse them for their reasonable expenses in doing
so. In addition to soliciting proxies by mail, our directors, officers and
employees may also solicit proxies personally, by telephone or by other
appropriate means.
CORPORATE GOVERNANCE
In accordance with Delaware General Corporation Law and our Certificate
of Incorporation and Bylaws, the business, property and affairs of AirGate PCS,
Inc. are managed under the direction of the Board of Directors. Although
Directors who are not executive officers are not involved in the day-to-day
operating details, they are kept informed of our business through written
reports and documents provided to them regularly, as well as by operating,
financial and other reports presented by the Chief Executive Officer and other
officers of the Company at meetings of the Board of Directors and committees of
the Board of Directors.
Meetings of the Board
During the fiscal year from January 1, 1999 to September 30, 1999, the
Board of Directors acted primarily through written consents and held one
in-person Board of Directors meeting. Our Board of Directors conducts its
business through Board of Directors meetings and the activities of its
committees. The Board typically meets bi-monthly and may have additional
meetings as needed. Each of the Directors attended at least 75% of the total
number of Board meetings held and committee meetings on which such Directors
served during the fiscal year ended September 30, 1999.
Committees of the Board
Audit Committee. Our Audit Committee consists of Mr. Cogan,
Mr. Schiffman and Mr. Ferchat. The Audit Committee is responsible for:
. recommending to the Board of Directors the engagement of our
independent auditors;
2
<PAGE>
. reporting to the Board of Directors on our general financial
condition and the results of the annual audit;
. internal accounting controls;
. our audit practice; and
. professional services furnished by the independent auditors.
Our Audit Committee did not meet during the fiscal year ended September 30,
1999, however the committee has met subsequent to September 30, 1999 regarding
the audit of our financial statements for the fiscal year ended September 30,
1999. We completed our public offering at the end of September 1999.
Nominating Committee. Our Nominating Committee for this Annual Meeting
consisted of Mr. Dougherty, Mr. Cogan and Mr. Ferchat. The Nominating Committee
is responsible for considering and recommending the nominees for Directors to
stand for election at our annual meetings of stockholders. Our Certificate of
Incorporation and Bylaws provide for stockholder nominations of Directors.
These provisions require such nominations to be made pursuant to timely notice
in writing to the Corporate Secretary. The stockholder's notice of nomination
must contain all information relating to the nominee which is required to be
disclosed by our Bylaws and by the Securities Exchange Act of 1934. The
Nominating Committee did not meet during the fiscal year ended September 30,
1999.
Compensation Committee. Our Compensation Committee for the fiscal year
ended September 30, 1999 consisted of the entire Board of Directors. The
Compensation Committee is responsible for reviewing and approving all
compensation arrangements for our officers. The Compensation Committee did not
meet during the fiscal year ended September 30, 1999.
Directors' Compensation
Directors' Fees. Currently, we do not compensate our Directors with
directors' fees or retainers, however, on October 21, 1999, we granted Mr.
Ferchat an option to purchase 10,000 shares of our common stock at a per share
exercise price of $2.00. In addition, the Company does not pay any meeting fees
to the members of the Board's standing committees. We do reimburse Directors for
expenses incurred to attend meetings of the Board of Directors.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee during the year ended September 30, 1999,
consisted of the entire Board of Directors. None of the executive officers
served as a Director or member of the compensation committee or other board
committee performing equivalent functions of another corporation.
ELECTION OF DIRECTORS
ITEM 1 ON PROXY CARD
--------------------
Our Board of Directors consists of six members. Pursuant to our Bylaws,
our Board of Directors is currently evaluating candidates to fill one vacancy on
the Board. The Board will appoint an individual to serve as a Director until the
Annual Meeting in 2001. The Board of Directors is divided into three classes of
directors, as
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<PAGE>
nearly equal in number as possible, with approximately one-third
of the directors elected each year. At the Annual Meeting, two Directors will be
elected for a term expiring at the Annual Meeting in 2003 or until their
successors are elected and qualified. The Nominating Committee has nominated
Gill Cogan and Barry Schiffman for re-election as Directors for a three-year
period. Neither person nominated as a Director has been proposed for election
pursuant to any agreement or understanding between us and any such nominee.
If either nominee is unable or declines to serve at the time of the
Annual Meeting, the shares represented by all valid proxies will be voted for
the election of such substitute as the Board of Directors may recommend or the
Board of Directors may decide to reduce the size of the Board of Directors to
eliminate this vacancy. At this time, we know of no reason why either nominee
might be unavailable to serve.
Under Delaware law and our Bylaws, Directors are elected by a plurality
of the votes present in person or by proxy at a stockholder meeting at which a
quorum is present.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE NOMINEES.
Information with Respect to the Nominees, Continuing Directors and
Named Executive Officers
The following table sets forth, as of December 2, 1999, the names of
the nominees, continuing Directors and Named Executive Officers (as defined
herein), their respective positions with us, their ages, the year in which each
Director became a Director and the year in which their terms (or in the case of
the nominees, their proposed terms) as Director expire.
<TABLE>
<CAPTION>
Expiration of
Director Term as
Name and Position Age Since Director
----------------- --- ----- --------
<S> <C> <C> <C>
NOMINEES
Gill Cogan............................... 46 1998 2003
Director
Barry Schiffman.......................... 53 1998 2003
Chairman of the Board of Directors
CONTINUING DIRECTORS
Thomas M. Dougherty...................... 55 1999 2002
Director, President and Chief Executive
Officer
W. Chris Blane........................... 46 1998 2002
Director and Vice President of New Business
Thomas D. Body III....................... 61 1998 2002
Director and Vice President of Strategic
Planning
Robert A. Ferchat........................ 65 1999 2001
Director
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Name and Position Age
----------------- ---
<S> <C>
NAMED EXECUTIVE OFFICERS
Robert E. Gourlay........................ 45
Vice President of Marketing
Alan B. Catherall........................ 46
Chief Financial Officer
David C. Roberts......................... 37
Vice President of Engineering and Network
Operations
Shelley L. Spencer....................... 36
Vice President of Law and Secretary
</TABLE>
Director Biographies. The following biographies provide a brief description
of each nominated Director and the continuing Directors' principal occupation,
business experience and directorships with other public corporations.
Gill Cogan has been a director of AirGate since 1998. He is co-managing
partner of Weiss, Peck & Greer Venture Partners, a venture capital firm, and has
served in such capacity since 1992. He is a director of Electronics for Imaging,
Inc., and several privately held companies.
Barry Schiffman has been a director of AirGate since 1998. He is
president, executive managing director and, chief investment officer and member
of the board of JAFCO America Ventures, Inc., a venture capital firm, and has
held such position since 1996. From 1994 and until he joined JAFCO, he was a
general partner at Weiss, Peck & Greer Venture Partners.
Thomas M. Dougherty joined AirGate in April 1999. Prior to joining us,
Mr. Dougherty was a senior executive of Sprint PCS. Before that, Mr. Dougherty
served as Executive Vice President and Chief Operating Officer of Chase
Telecommunications, a personal communications services company, from 1996 to
1997. Mr. Dougherty served as President and Chief Operating Officer of Cook
Inlet BellSouth PCS, L.P., a start-up wireless communications company, from 1995
to 1996. Prior to October 1995, Mr. Dougherty was Vice President and Chief
Operating Officer of BellSouth Mobility DCS Corporation a PCS company.
W. Chris Blane has been a director of AirGate since 1998. In 1989, Mr.
Blane was appointed President of Metrex Corporation which constructed the first
fiber optic competitive access network in Atlanta and ultimately merged with MFS
Communications Co., now MCI WorldCom, Inc. In 1995, Mr. Blane joined AirLink II,
as a Vice President for Business Development as it prepared for the C block PCS
auction.
Thomas D. Body III has been a director of AirGate since 1998. In 1989,
Mr. Body was appointed chairman of Metrex Corporation where he oversaw
development of the first fiber optic competitive access network in the Atlanta
market, which subsequently merged with MFS Communications Co., now MCI WorldCom,
Inc. Mr. Body then served as chairman and CEO of MFS-Atlanta as the company
built the first large area sonet
5
<PAGE>
network in the country. After leaving MFS-Atlanta, he then served as a
consultant to MFS until 1994. Mr. Body joined AirLink II as a Vice President
for Strategic Development, as it prepared for the C block PCS auction.
Robert A. Ferchat has been a director of AirGate since October 1999.
Mr. Ferchat previously served as the chairman of the board of directors,
president and chief executive officer of BCE Mobile Communications a wireless
telecommunications company from November 1994 to January 1999. Mr. Ferchat is
a director of GST Telecommunications and Brookfield Properties Corp. as well as
several companies traded on the Toronto Exchange.
Robert E. Gourlay our Vice President of Marketing joined AirLink II as
Vice President-Marketing as it prepared for the block auction.
Alan B. Catherall became AirGate's Chief Financial Officer in March
1998 under a contract between AirGate and Tatum CFO Partners. As a partner in
Tatum CFO Partners, a financial consulting firm, since 1996, Mr. Catherall has
served as chief financial officer or provided consulting services for a variety
of clients. Before joining Tatum CFO Partners, Mr. Catherall was chief financial
officer of Syncordia Services, a joint venture of MCI and British Telecom, from
1994 to 1996.
David C. Roberts our Vice President of Engineering and Network
Operations joined AirLink II in 1995 as a Vice President-Engineering as it
prepared for the C block PCS auction.
Shelley L. Spencer our Vice President of Law and Secretary joined
AirLink II, in 1995 as General Counsel as it prepared for the C block PCS
auction.
EXECUTIVE COMPENSATION
The report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933, as
amended (the "Securities Act") or the Securities Exchange Act of 1934, as
amended, except as to the extent that we specifically incorporate this
information by reference, and shall not otherwise be deemed filed under such
Acts.
Compensation Committee Report on Executive Compensation. Under rules
established by the SEC, we are required to provide certain data and information
regarding the compensation and benefits paid to our Chief Executive Officer and
other executive officers. The disclosure requirements for the Chief Executive
Officer and other executive officers include the use of tables and a report from
the Board of Directors, which served as the Compensation Committee for the
fiscal year ended September 30, 1999, that explains our rationale and
considerations in determining the compensation paid to those individuals.
Compensation Committee Report
Historical Approach. Prior to our public offering of common stock, we
had less than 10 executives. The salaries for these executives were generally
determined by market standards and earnings history. The current Compensation
Committee, which was established after our public offering on October 21, 1999,
will utilize various sources of compensation information upon which to base its
decisions. The compensation information reviewed will include compensation
surveys and peer group analyses. In addition, the Committee will focus on the
salary, pay adjustments and benefit packages of other senior executives in the
telecommunications industry, with particular attention to other wireless
communications corporations.
6
<PAGE>
In reviewing the compensation package for the executive officers, the
Committee will consider a number of factors including asset size, earnings, type
of operations, corporate structure, geographic locations and budget
considerations. The Committee will be provided with relevant, timely and
reliable data regarding compensation.
Compensation Policies. We expect the Committee to consider the
following incentives in setting compensation and benefits and some of the
following incentives in determining bonuses:
. establishing base salaries at a competitive average;
. rewarding the achievement of our annual and long term
strategic goals;
. retaining executive officers by offering competitive
compensation and benefits at a competitive level with other
executives in the wireless communications industry; and
. providing additional motivation for the executive officers to
enhance stockholder value by linking a portion of the
compensation package to the performance of our common stock.
Components of Salary. Compensation is defined as cash remuneration in
the form of salary and bonus and non-cash remuneration in the form of stock
options.
1999 Stock Option Plan. On July 28, 1999, our stockholders approved the
1999 Stock Option Plan, under which officers may be granted of stock options.
Employees who have worked for us for 12 months prior to the date their options
were granted will be able to exercise 25% of their options beginning on July 22,
2000. This percentage will increase in 6.25 percent increments up to 100% at 60
months of employment. Employees who have not worked for us for 12 months prior
to the date their options were granted, other than Mr. Dougherty, will be able
to exercise 25% of their options 12 months after the date of grant. This
percentage will increase in five percent increments up to 100% at 57 months of
employment. The Board of Directors believes that stock ownership is a
significant incentive in building stockholders' wealth and aligning the
interests of employees with those of stockholders. Stock option grants under the
1999 Stock Option Plan were allocated by the Board of Directors based upon past,
present and future service to AirGate. The Board of Directors considers the
amount of outstanding awards in determining the total annual compensation
package. See "-Summary Compensation Table."
Chief Executive Officer. The Chief Executive Officer's compensation
evaluation included consideration of his leadership qualities and experience in
the wireless communications industry. Specific accomplishments included his
success as a regional president for Sprint PCS which included the successful
launch of Sprint PCS service in eighteen major metropolitan areas and his
experience as a senior executive in wireless telecommunications.
The goal of our compensation structure is to be certain that all
executives are compensated consistent with the above guidelines and to assure
that all reasonable and possible efforts are being exerted to maximize
stockholder value. Compensation levels will be reviewed as frequently as
necessary to ensure this result.
The Board of Directors (acting as the Compensation Committee)
W. Chris Blane Thomas M. Dougherty
Thomas D. Body III Barry Schiffman
Gill Cogan
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<PAGE>
Summary Compensation Table. The following table shows, for the fiscal
years ended September 30, 1999 and December 31, 1998, the cash compensation paid
by us, as well as certain other compensation paid or accrued for those years, to
the Chief Executive Officer and our five highest paid executive officers who
received compensation in excess of $100,000 ("Named Executive Officers").
Summary Compensation Table(1)
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards Payouts
------------------------------------------------------------------------------------------------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Principal Salary Compensation Awards Options/SARs Payouts Compensation
Position Year ($)(1) Bonus ($) ($)(4) ($)(5) (#) ($) ($)
- -------------------------- ------- --------------------------------------------------- ---------------------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas M. Dougherty (2) 1999 $ 82,500 $ 71,875(7) ------ ------ 300,000 ------ -------
President and Chief
Executive Officer 1998 ------- ------ ------ ------ -------- ------ -------
Thomas D. Body III (3) 1999 120,000 25,550 ------ ------ 75,000 ------ -------
Vice President 1998 120,000 ------ ------ ------ ------- ------ -------
W. Chris Blane 1999 120,000 25,500 ------ ------ 75,000 ------ -------
Vice President of
Business Development 1998 120,000 ------ ------ ------ ------- ------ -------
Alan B. Catherall 1999 120,000 75,000 ------ ------ 90,000 ------ ------
Chief Financial
Officer 1998 ------- ------ ------ ------ ------- ------ ------
Robert E. Gourlay 1999 120,000 25,900 ------ ------ 75,000 ------ -------
Vice President of
Marketing 1998 120,000 ------ ------ ------ ------- ------ -------
Shelley L. Spencer 1999 120,000 68,425 ------ ------ 115,000 ------ -------
Vice President of Law
and Secretary 1998 120,000 ------ ------ ------ ------- ------ -------
Jack R. Kimzey (6) 1999 33,750 33,750 ------ ------ ------- ------ $16,000
Chief Executive
Officer 1998 67,500 ------ ------ ------ ------- ------ -------
</TABLE>
- ----------
(1) Due to the change in our fiscal year from a fiscal year end of December 31
to September 30 the compensation reported for each person listed in the
table during both 1998 and 1999 includes an overlap of compensation for the
period between September 30, 1998 through December 31, 1998.
(2) Mr. Dougherty became our Chief Executive Officer on April 15, 1999.
(3) Mr. Body served as Chief Executive Officer from January 1998 to October
1998.
(4) There were no (a) perquisites over the lesser of $50,000 or 10% of the
individual's total salary and bonus for the last year, (b) payments of
above-market preferential earnings on deferred compensation, (c) payments
of earnings with respect to long-term incentive plans prior to settlement
or maturation, (d) tax payment reimbursements, or (e) preferential
discounts on stock.
(5) For 1999, the Company had no employee restricted stock plans in existence.
(6) Mr. Kimzey served as Chief Executive Officer from October 1998 to February
1999. Mr. Kimzey resigned in February 1999. From February 15, 1999 to April
15, 1999 Mr. Kimzey was employed as a consultant and received $16,000.
8
<PAGE>
(7) Mr. Dougherty's bonus for the fiscal year ended September 30, 1999
consisted of a cash bonus of $71,875 and options to acquire 10,000 shares
of common stock. The exercise price of the options was equal to the fair
market value of the common stock on October 21, 1999 and are immediately
exercisable.
Employment Agreements
We have entered into an employment agreement with Thomas M. Dougherty,
our Chief Executive Officer. Mr. Dougherty's employment agreement is for a
five-year term and provides for an annual base salary of $180,000, with a
minimum guaranteed annual increase of $20,000 over the next four years, until
April 15, 2004. In addition to his base salary, Mr. Dougherty is eligible to
receive an annual bonus up to 50% of his base salary. Mr. Dougherty was awarded
options exercisable for 300,000 shares of common stock. Under the agreement, Mr.
Dougherty vested in 25% of the awarded stock options on April 15, 1999, with the
remaining 75% of the options vesting in 15 equal quarterly installments
beginning June 30, 2000. The options that vested on April 15, 1999 are not
exercisable until April 15, 2000. If Mr. Dougherty voluntarily terminates his
employment prior to April 15, 2000, he will not be entitled to any of the shares
underlying the stock options. The exercise price of the stock options granted to
Mr. Dougherty is $14.00 per share. In addition, Mr. Dougherty is eligible to
participate in all employee benefit plans and policies.
The employment agreement provides that Mr. Dougherty's employment may
be terminated with or without cause, as defined in the agreement, at any time.
If Mr. Dougherty is terminated without cause, he is entitled to receive (1) six
months base salary, plus one month's salary for each year employed, (2) all
stock options vested on the date of termination and (3) six months of health and
dental benefits. Mr. Dougherty is not entitled to any compensation or benefits
upon voluntary termination or termination for cause. Under the employment
agreement, Mr. Dougherty agreed to a restriction on his present and future
employment. Mr. Dougherty agreed not to compete in the business of wireless
telecommunications either directly or indirectly in our territory during his
employment and for a period of 18 months after his employment is terminated.
Pursuant to a requirement set forth in our management agreement with
Sprint PCS, we entered into employment agreements with W. Chris Blane, Thomas D.
Body III, Robert E. Gourlay, David C. Roberts, and Shelley L. Spencer as of the
completion of the common stock offering. Each of these employees may be
terminated with or without cause at any time. The agreements provide that each
employee, upon termination, will not compete in the business of wireless
telecommunications in our territory or for a period of five years from the date
of the execution of our management agreement with Sprint PCS on July 22, 1998.
These employment restrictions on having another primary business will not apply
when at least one-third of the corporate officers of Sprint and/or Sprint PCS
terminate their employment for any reason within one year following a change of
control, as defined in the management agreement. In the event that an employee
is terminated without cause, we will continue to pay the employee's salary for
the remaining term of the agreement or until the non-compete provision expires
or is waived by Sprint PCS. In addition to these agreements, we have also
entered into an employment agreement with Mark A. Roth. Under his agreement, Mr.
Roth agreed not to compete in the business of wireless telecommunications either
directly or indirectly in our territory during his employment and for a period
of 18 months after his employment is terminated. We expect to enter into an
employment agreement with Alan B. Catherall with similar terms.
9
<PAGE>
Option/SAR Grants Table
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Potential realized
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Number of Option Term (2)
Securities % of Total ------------------------
Underlying Options Exercise Expiration
Name Options(1) Granted Price Date 5% 10%
- ----------------------------- ------------------- ------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Thomas M. Dougherty....... 300,000 25.6% $14.00 04/2009 $2,641,357 $6,693,718
W. Chris Blane............ 75,000 6.4 14.00 07/2009 660,339 1,673,430
Thomas D. Body III........ 75,000 6.4 14.00 07/2009 660,339 1,673,430
Alan B. Catherall.......... 90,000 7.7 14.00 07/2009 792,407 2,008,115
Robert E. Gourlay......... 75,000 6.4 14.00 07/2009 660,339 1,673,430
Shelley L. Spencer........ 115,000 9.8 14.00 07/2009 1,012,520 2,565,925
</TABLE>
- ----------
(1) Mr. Dougherty's options will vest 25% on April 15, 1999, with the remaining
75% of the options vesting in 15 equal quarterly installments beginning
June 30, 2000. The remaining named executive officers will be able to
exercise 25% of their options beginning on July 22, 2000. This percentage
will increase in 6.25 percent increments up to 100% at 60 months of
employment.
(2) The amounts represent certain assumed rates of appreciation. Actual gains,
if any, on stock option exercises and common stock holdings are dependent
on the future performance of the common stock and overall stock market
conditions. There can be no assurance that the amounts reflected in this
table will be realized.
Aggregated Option Exercises and Year-End Option Value Table. The following table
sets forth information concerning the value as of September 30, 1999 of options
held by the Named Executive Officers.
Aggregated Option Exercises in Last Fiscal
Year and FY-End Option Values
<TABLE>
<CAPTION>
Number of Value of
Securities Underlying Unexercised
Unexercised Options In-the-Money Options
at Fiscal Year-End (1) at Fiscal Year-End (1)(2)
---------------------- -------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
- --------------------------- ------------------------- -------------------------
<S> <C> <C>
Thomas M. Dougherty........ --/300,000 $--/$3,262,500
W. Chris Blane............. --/75,000 $--/$815,625
Thomas D. Body III......... --/75,000 $--/$815,625
Alan B. Catherall.......... --/90,000 $--/$978,750
Robert E. Gourlay.......... --/75,000 $--/$815,625
Shelley L. Spencer......... --/115,000 $--/$1,250,625
</TABLE>
- ----------
(1) No options were exercised by any of the named executive officers as of
September 30, 1999.
(2) The values of the unexercised in-the-money options were calculated by
multiplying the number of shares of common stock underlying the options by
the difference between $ 24.875, which was the closing market price of our
common stock on September 30, 1999, and the option exercise price of
$14.00.
10
<PAGE>
Stock Performance Graph
Our common stock did not commence "regular-way" trading on the Nasdaq
National Market until the completion of our initial public offering on September
30, 1999. A comparison of our common stock performance for the fiscal year ended
September 30, 1999 would not be meaningful, and we have omitted the Stock
Performance Graph from this Proxy Statement.
CERTAIN RELATED TRANSACTIONS
From our inception through May 1999, we received financing from
affiliates of Weiss, Peck & Greer Venture Partners and affiliates of JAFCO
America Ventures, Inc. Mr. Cogan, one of our directors, is managing partner of
Weiss, Peck & Greer Venture Partners. Another director, Mr. Schiffman, is
president, executive managing director, chief investment officer and a member of
the board of JAFCO America Ventures, Inc. In August 1998, we issued $1.8 million
of subordinated promissory notes to the Weiss, Peck & Greer Venture Partners
affiliated funds. In September 1998, we issued $3.0 million of subordinated
promissory notes to the JAFCO America Ventures, Inc. affiliated funds. All of
these notes provided for the conversion of the notes into preferred or common
stock upon the satisfaction of certain conditions or repayment of the notes one
year after their issuance. Repayment of the notes was subordinated to senior
secured debt we received in November 1998 from Lucent. We also issued warrants
to purchase the preferred stock to the Weiss, Peck & Greer Venture Partners
affiliated funds and to the JAFCO America Ventures, Inc. related funds in
consideration for their financing. The warrants were to be exercised on the
earlier of five years from the date of issuance or an initial public offering.
In March, April and May 1999, we received an additional $1.25 million of
financing from the Weiss, Peck & Greer Venture Partners affiliated funds and
$1.25 million of additional financing from the JAFCO America Ventures, Inc.
affiliated funds pursuant to subordinated notes. In May 1999, we consolidated
the promissory notes issued to the Weiss, Peck & Greer Venture Partners
affiliated funds in 1998 and 1999 for a total of $3.167 million into two
subordinated promissory notes that were converted into shares of our common
stock concurrently with the completion of our concurrent offerings at a price
48% less than the price of a share of the common stock sold in the common stock
offering. The warrants held by the Weiss, Peck & Greer Venture Partners
affiliated funds were terminated. In May 1999, we issued warrants to the Weiss,
Peck & Greer Venture Partners affiliated funds to purchase shares of common
stock for an aggregate price of up to $2.73 million exercisable at a 25%
discount to the price of a share of common stock sold in the common stock
offering. The warrants are exercisable after the common stock offering for two
years from the date of grant. In May 1999, we consolidated the promissory notes
issued to the JAFCO America Ventures, Inc. affiliated funds for a total of
$4.394 million into subordinated promissory notes that were converted into
shares of our common stock concurrently with the completion of our concurrent
offerings at a price 48% less than the price of a share of common stock sold in
the common stock offering. The warrants held by the JAFCO America Ventures, Inc.
affiliated funds were terminated. In connection with the issuance of these
convertible notes, the warrants and Weiss, Peck & Greer Venture Partners
affiliated funds' existing ownership interest, we entered into registration
rights agreements with the Weiss, Peck and Greer Venture Partners affiliated
funds and the JAFCO America Ventures, Inc. affiliated funds.
11
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND OFFICERS
On December 7, 1999, there were 11,969,734 shares of our common stock
outstanding. The following table presents certain information regarding the
beneficial ownership of common stock, as of December 2, 1999, with respect to:
o each person who, to our knowledge, is the beneficial owner of 5% or
more of our outstanding common stock;
o each of our Directors;
o each of the Named Executive Officers; and
o all executive officers and Directors as a group.
<TABLE>
<CAPTION>
Number of
Shares Percentage
Beneficially of Outstanding
Name and Address of Beneficial Owner(1) Owned(2) Common Stock
- --------------------------------------- -------- ------------
<S> <C> <C>
Essex Investment Management Company, LLC(3).......................... 1,683,425 14.1%
125 High Street
Boston, Massachusetts 02110
Weiss, Peck & Greer Venture Partners affiliated funds(4)............. 1,675,842 15.5
555 California Street, Suite 3130
San Francisco, California 94104
Thomas M. Dougherty................................................. -- --
W. Chris Blane(5)................................................... 325,537 2.7
Alan B. Catherall.................................................... 1,000 *
Robert E. Gourlay(6)................................................ 191,451 1.6
Barry Schiffman(7)................................................... 511,686 4.3
Gill Cogan(8)........................................................ 1,675,842 14.0
Shelley L. Spencer(9)............................................... 87,331 *
Thomas D. Body III.................................................. 320,537 2.7
David C. Roberts..................................................... 140,339 1.2
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares Percentage
Beneficially of Outstanding
Name and Address of Beneficial Owner(1) Owned(2) Common Stock
- --------------------------------------- -------- ------------
<S> <C> <C>
Robert A. Ferchat.................................................... -- --
All executive officers and directors as a group
(11 persons)...................................................... 3,234,155 28.4
</TABLE>
- ----------
(Footnotes on following page)
* Less than one percent.
(1) Except as indicated, the address for each executive officer and director is
Harris Tower 233 Peachtree Street, N.E. Suite 1700 Atlanta, Georgia 30303.
(2) Beneficial ownership is determined in accordance with Rule 13d-3 of the
Securities Exchange Act. A person is deemed to be the beneficial owner of
shares of common stock if such person has or shares voting or investment
power with respect to such common stock, or has the right to acquire
beneficial ownership at any time within 60 days of the date of the table.
As used herein, "voting power" is the power to vote or direct the voting of
shares and "investment power" is the power to dispose or direct the
disposition of shares.
(3) Based upon information contained in a Schedule 13G filed with the
Securities and Exchange Commission on November 9, 1999.
(4) Includes 214,413 shares of common stock issuable upon exercise of presently
exercisable warrants issued to the Weiss, Peck & Greer Venture Partners
affiliated funds.
(5) Includes 305,000 shares of common stock directly held by Mr. Blane, 16,537
shares of common stock held by Mr. Blane's spouse and 4,000 shares of
common stock held by his children.
(6) Consists of 191,451 shares of common stock that Mr. Gourlay is deemed to
beneficially own as a general partner of Robert E. Gourlay & Associates,
LP. Mr. Gourlay's address is 8734 Oakthorpe Drive, Charlotte, North
Carolina 28277.
(7) Includes 511,686 shares of common stock Mr. Schiffman is deemed to
beneficially own as president, chief investment officer and a member of the
board of directors of JAFCO America Ventures, Inc. Mr. Schiffman's address
is 505 Hamilton Avenue, Suite 310, Palo Alto, California 94301.
(8) Consists of 1,675,842 shares of common stock that Mr. Cogan is deemed to
beneficially own as managing partner of Weiss, Peck & Greer Venture
Partners. Mr. Cogan disclaims beneficial ownership of such shares except to
the extent of his pecuniary interest in Weiss, Peck & Greer Venture
Partners affiliated funds. Mr. Cogan's address is 555 California Street,
Suite 3130, San Francisco, California 94104.
(9) Includes 86,931 shares directly held by Ms. Spencer and 400 shares held by
her spouse.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require us to
disclose late filings of stock transaction reports by our executive officers and
Directors and any other person who holds more than ten percent of our common
stock. Based solely on a review of reports received by us and written
representations from our executive officers and directors that no other reports
were required to be filed the Company believes that all Section 16(a) filing
requirements have been met during the 1999 fiscal year, except for one report
which was filed late by Mr. Catherall which reflected a single transaction in
our common stock.
STOCKHOLDER PROPOSALS
To be considered for inclusion in our proxy statement and form of proxy
relating to the Annual Meeting of Stockholders to be held in 2001 a stockholder
proposal must be received by the Corporate Secretary at the Company's principal
executive offices not later than August 18, 2000. Any such proposal will be
subject to Rules and Regulations under the Securities Exchange Act of 1934, as
amended.
13
<PAGE>
Our Bylaws provide an advance notice procedure for a stockholder to
properly bring business before an annual meeting. The stockholder must give
written advance notice to the Corporate Secretary not less than ninety (90) days
before the date originally fixed for such meeting; provided, however, that in
the event that less than one hundred (100) days notice or prior public
disclosure of the date of the meeting is given or made to stockholders, to be
timely notice by the stockholder must be received not later than the close of
business on the tenth day following the date on which our notice to stockholders
of the annual meeting date was mailed or such public disclosure was made. The
advance notice by stockholders must include the stockholder's name and address,
as they appear on our records of stockholders, a brief description of the
proposed business, the reason for conducting such business at the annual
meeting, the class and number of shares of common stock that are beneficially
owned by such stockholder and any material interest of such stockholder in the
proposed business.
OTHER BUSINESS
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the accompanying
Notice of Annual Meeting of Stockholders. If, however, other matters are
properly introduced, the persons named in the accompanying proxy will vote the
shares they represent in accordance with their best judgment.
A copy of our annual report on Form 10-K (without exhibits) for the
nine months ended September 30, 1999, as filed with the Securities and Exchange
Commission, which includes our annual report, will be furnished to stockholders
with this proxy statement.
By Order of the Board of Directors
/s/ Thomas M. Dougherty
Thomas M. Dougherty
President and
Chief Executive Officer
Atlanta, Georgia
December 16, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND PROMPTLY
RETURN THE ACCOMPANYING PROXY CARD IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
14
<PAGE>
REVOCABLE PROXY
AIRGATE PCS, INC.
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 21, 2000
1:00 P.M. EASTERN STANDARD TIME
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the official proxy committee of the
Board of Directors of AirGate PCS Inc. ("AirGate"), each with full power of
substitution, to act as proxies for the undersigned, and to vote all shares of
common stock of AirGate which the undersigned is entitled to vote only at the
Annual Meeting of Stockholders, to be held on January 21, 2000, at 1:00 p.m.
Eastern Standard Time, at the Marriott Marquis, 265 Peachtree Center Avenue,
N.E., Atlanta, Georgia, and at any and all adjournments thereof, as set forth on
the reverse side.
This proxy is revocable and will be voted as directed, but if no
instructions are specified, this proxy will be voted FOR the nominees as
Directors specified and FOR each of the proposals listed. If any other business
is presented at the Annual Meeting, including whether or not to adjourn the
meeting, this proxy will be voted by those named in this proxy in their best
judgement. At the present time, the Board of Directors knows of no other
business to be presented at the Annual Meeting.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
-------------------------------------------------
--FOLD AND DETACH HERE--
<PAGE>
[X] Please mark your votes as indicated
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED NOMINEES AND
"FOR" EACH OF THE PROPOSALS.
1. The election as Directors of all nominees listed (except as marked to the
contrary below).
VOTE
FOR WITHHELD
[ ] [ ]
Gill Cogan and Barry Schiffman
INSTRUCTION: To withhold your vote for any individual nominee, write that
nominee's name on the line provided below:
- --------------
The undersigned acknowledges receipt from AirGate prior to the execution of this
proxy of a Notice of Annual Meeting of Stockholders and of a Proxy Statement
dated December 16, 1999 and of the Annual Report to Stockholders.
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
Signature of Stockholder Date
------------------------------ ----------
Signature of Stockholder Date
------------------------------ ----------
Please sign exactly as your name appears on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder may sign but only one signature is
required.
------------------------------------------------
--FOLD AND DETACH HERE--
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