<PAGE>
SCHEDULE 14A
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 Section 240.14a-11(c) or Section 240.14a-12
Triton PCS Holdings, 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:
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Notes:
<PAGE>
[Triton Logo]
To the Stockholders of Triton PCS Holdings, Inc.:
You are cordially invited to attend the Annual Meeting of Stockholders
of Triton PCS Holdings, Inc. to be held at Triton's Corporate Headquarters, 1100
Cassatt Road, Berwyn, Pennsylvania 19312, on Wednesday, May 10, 2000, at 2:00
p.m., local time.
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement explain the matters to be voted on at the meeting.
Please read the enclosed Notice of Annual Meeting and Proxy Statement
so you will be informed about the business to come before the meeting. Your
vote is important, regardless of the number of shares you own. On behalf of the
Board of Directors, I urge you to mark, sign and return the enclosed proxy card,
even if you plan to attend the Annual Meeting.
Sincerely,
/s/ Michael E. Kalogris
Michael E. Kalogris
Chairman and Chief Executive Officer
Berwyn, Pennsylvania
April 7, 2000
<PAGE>
TRITON PCS HOLDINGS, INC.
1100 Cassatt Road
Berwyn, Pennsylvania 19312
(610) 651-5900
_______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 10, 2000
_______________
To the Stockholders of Triton PCS Holdings, Inc.:
The Annual Meeting of the holders of Class A common stock of Triton PCS
Holdings, Inc. ("Triton") will be held at Triton's Corporate Headquarters, 1100
Cassatt Road, Berwyn, Pennsylvania 19312, on Wednesday, May 10, 2000, at 2:00
p.m., local time, for the following purposes:
1. The election of two Class I directors; and
2. The ratification of the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as Triton's independent auditors.
The Board of Directors has fixed March 15, 2000 as the record date for the
Annual Meeting with respect to this solicitation. Only holders of record of
Class A common stock at the close of business on that date are entitled to
notice of and to vote at the Annual Meeting or any adjournments thereof as set
forth in the Proxy Statement.
This Proxy Statement, the proxy card and Triton's Annual Report to
Stockholders are being mailed on or about April 7, 2000.
By Order of the Board of Directors,
/s/ David D. Clark
David D. Clark
Corporate Secretary
Berwyn, Pennsylvania
April 7, 2000
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
POSTAGE PAID ENVELOPE AS PROMPTLY AS POSSIBLE. AS SPECIFIED IN THE ENCLOSED
PROXY STATEMENT, A STOCKHOLDER MAY REVOKE A PROXY AT ANY TIME PRIOR TO ITS USE.
<PAGE>
TRITON PCS HOLDINGS, INC.
1100 Cassatt Road
Berwyn, Pennsylvania 19312
(610) 651-5900
_______________
PROXY STATEMENT
2000 Annual Meeting of Stockholders
_______________
Solicitation of Proxies
The Board of Directors of Triton PCS Holdings, Inc. ("Triton") is
furnishing this Proxy Statement to solicit proxies for use at Triton's 2000
Annual Meeting of Stockholders, to be held on Wednesday, May 10, 2000, at 2:00
p.m., local time, at Triton's Corporate Headquarters, 1100 Cassatt Road, Berwyn,
Pennsylvania 19312, and at any adjournment of the meeting. Each valid proxy
received in time will be voted at the meeting according to the choices
specified, if any. A proxy may be revoked at any time before the proxy is voted
as outlined below.
This Proxy Statement and the enclosed proxy card are being first sent
for delivery to stockholders of Triton on or about April 7, 2000. Triton will
pay the cost of solicitation of proxies, including the reimbursement to banks
and brokers for reasonable expenses for sending proxy materials to their
principals.
The shares of Class A common stock represented by valid proxies Triton
receives in time for the Annual Meeting will be voted as specified in such
proxies. Valid proxies include all properly executed written proxy cards not
later revoked. Voting your proxy by mail will not limit your right to vote at
the Annual Meeting if you later decide to attend in person. Executed but
unvoted proxies will be voted:
(1) FOR the election of the Board of Directors' nominees for
Class I directors; and
(2) FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as Triton's independent auditors.
If any other matters properly come before the Annual Meeting, the
persons named on the proxies will, unless the stockholder otherwise specifies in
the proxy, vote upon such matters in accordance with their best judgment.
Voting Securities
Triton's one outstanding class of voting securities is its Class A
common stock, par value $0.01 per share. As of March 15, 2000, there were
outstanding 53,700,442 shares of Class A common stock. Only holders of record
of shares of Class A common stock at the close of business on March 15, 2000,
which the Board of Directors has fixed as the record date, are entitled to vote
at the Annual Meeting.
Each share of Class A common stock is entitled to one vote. The
presence in person or by proxy of holders of record of a majority of the shares
entitled to vote generally will constitute a quorum for the transaction of
business at the Annual Meeting. The affirmative vote of a majority of the votes
entitled to be cast by the issued and outstanding Class A common stock present
at the Annual Meeting in person or by proxy, and entitled to vote, is required
for the election of Class I directors and the ratification of appointment of
independent auditors.
Stockholders may cast their votes in favor of the election of Class I
directors or the ratification of appointment of the auditors or may withhold
authority to vote for one or more director nominees and withhold authority to
vote for auditors. Stockholders withholding authority will be deemed present at
the Annual Meeting for the purpose of determining whether a quorum has been
constituted, but votes withheld will have no effect on the outcome of the vote.
Broker non-votes are not considered shares entitled to vote on the applicable
proposal and are
2
<PAGE>
not included in determining whether such proposal is approved. A broker non-vote
occurs when a nominee of a beneficial owner with the power to vote on at least
one matter does not vote on another matter because the nominee does not have the
discretionary voting power and has not received instructions from the beneficial
owner with respect to such matter. Accordingly, broker non-votes have no effect
on the outcome of a vote on the applicable proposal.
Voting by Proxy
Any proxy duly given pursuant to this solicitation may be revoked by
the stockholder at any time prior to the voting of the proxy (i) by written
notice to the Secretary of Triton at Triton's principal executive offices, 1100
Cassatt Road, Berwyn, Pennsylvania 19312, (ii) by a later-dated proxy signed and
returned by mail before the Annual Meeting or (iii) by attending the Annual
Meeting and voting in person. Attendance at the Annual Meeting will not in and
of itself constitute a revocation of a proxy.
ELECTION OF CLASS I DIRECTORS
(Proposal No. 1)
The Board of Directors presently consists of seven members. Triton's
Second Restated Certificate of Incorporation provides that the Board of
Directors will be divided into three classes, as nearly equal in number as
possible. Each director will serve a three-year term, and one class will be
elected at each year's annual meeting of stockholders. The term of the Class I
directors will expire at the 2000 Annual Meeting, the term of the Class II
directors will expire at the 2001 Annual Meeting and the term of the Class III
directors will expire at the 2002 Annual Meeting, with the members of each class
to hold office until their successors are elected and qualified. At each annual
meeting of stockholders, the successors to the class of directors whose term
expires at that annual meeting will be elected to hold office for a term
expiring at the annual meeting of stockholders held in the third year following
the year of their election and until their successors are elected and qualified.
Because the term of the Class I directors expires this year, the
stockholders will vote upon the election of two Class I directors at the Annual
Meeting. The Board of Directors has nominated Scott I. Anderson and Arnold
Chavkin for Class I directors. Mr. Chavkin was selected as a Class I director
nominee by a majority interest of Triton's cash equity investors pursuant to
Triton's First Amended and Restated Stockholders' Agreement.
Unless otherwise directed in the proxy, the person named in the
enclosed proxy, or the person's substitute, will vote the proxy for the election
of the persons nominated by the Board of Directors below as Class I directors
for a three-year term and until their respective successors are elected and
qualified. The Board of Directors knows of no reason why any nominee for
director would be unable to serve as director. If, at the time of the Annual
Meeting, any of the nominees is unable or unwilling to serve as a director of
Triton, the persons named in the proxy intend to vote for such substitutes as
may be nominated by the Board of Directors.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Nominees for Election to Serve as Directors
- -------------------------------------------
Until the 2003 Annual Meeting
- -----------------------------
Scott I. Anderson.................................... 41 Director
Arnold Chavkin....................................... 48 Director
Present Directors Elected to Serve Until
- ----------------------------------------
the 2001 Annual Meeting
- -----------------------
John D. Beletic...................................... 48 Director
Mary Hawkins-Key..................................... 48 Director
Present Directors Elected to Serve Until
- ----------------------------------------
the 2002 Annual Meeting
- -----------------------
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
Michael E. Kalogris.................................. 50 Chairman of the Board of Directors and Chief
Executive Officer
Steven R. Skinner.................................... 57 President, Chief Operating Officer and Director
John W. Watkins...................................... 38 Director
</TABLE>
Scott I. Anderson has served as a Director of Triton since February
1998. He is currently a member of the board of directors of TeleCorp PCS,
Tritel Communications, Wireless Facilities, Inc., Telephia, Inc. and Xypoint and
a principal of Cedar Grove Partners, LLC and Cedar Grove Investments. Mr.
Anderson was previously Senior Vice President for Acquisitions and Development
at AT&T Wireless Services, Inc., formerly McCaw Cellular Communications, Inc.,
which he joined in 1986, and a director of Horizon Cellular Group.
Arnold Chavkin has served as a Director of Triton since February 1998.
Mr. Chavkin is also a member of the advisory board of Triton Cellular Partners,
L.P. and is a director of American Tower Corporation, Encore Acquisition
Partners, Inc., Hallmark Entertainment Network, R&B Falcon Corporation, SMG,
Inc. and U.S. Silica Company. He also serves on the Advisory Investment Boards
of Richina Group, the Indian Private Equity Fund and the Asia Development
Partners Fund. Mr. Chavkin has been a General Partner of Chase Capital Partners
since January 1992. Prior to joining Chase Capital Partners, he was a member of
Chemical Bank's merchant banking group and a generalist in its corporate finance
group specializing in mergers and acquisitions and private placements for the
energy industry.
John D. Beletic has served as a Director of Triton since February
1998. Mr. Beletic currently serves as Chairman and Chief Executive Officer of
WebLink Wireless, Inc. which he joined in March 1992. He also serves as a
director of Tessco Technologies Inc., iPass Inc. and the Personal Communication
Industry Association.
Mary Hawkins-Key has served as a Director of Triton since January
1999. Ms. Hawkins-Key is the Senior Vice President of Partnerships, Integrations
and New Market Launches for AT&T Wireless Services. Ms. Hawkins-Key joined AT&T
Wireless in 1995. She is a director of TeleCorp PCS and a member of the partner
committee for CMT Partners.
Michael E. Kalogris has served as Chairman and Chief Executive Officer
of Triton since its inception. Mr. Kalogris was previously President and Chief
Executive Officer of Horizon Cellular Group, which he joined October 1, 1991.
Under Mr. Kalogris' leadership, Horizon Cellular Group became the fifth-largest
independent cellular company in the United States, specializing in suburban
markets and small cities encompassing approximately 3.2 million potential
customers, and was sold for approximately $575.0 million. Prior to joining
Horizon Cellular Group, Mr. Kalogris served as President and Chief Executive
Officer of Metrophone, a cellular carrier in Philadelphia, the nation's fourth-
largest market. Mr. Kalogris is a member of the board of directors of the
Cellular Telecommunications Industry Association and serves on its Public Policy
Committee. He is also a member of the advisory board of Waller Capital Media
Partners.
Steven R. Skinner has served as President, Chief Operating Officer and
a Director of Triton since its inception. Mr. Skinner previously served as the
Vice President of Operations and Chief Operating Officer of Horizon Cellular
Group beginning in January of 1994. From March 1992 through December 1993, Mr.
Skinner served as Vice President of Acquisitions for Horizon Cellular Group.
From January 1991 to March 1992, he served as a consultant in the area of
cellular acquisitions to Norwest Venture Capital Management, Inc. and others.
From August 1987 to January 1991, he served as President and General Manager of
Houston Cellular Telephone Company. Prior to joining Houston Cellular, he served
as a General Manager of Cybertel, Inc., a non-wireline carrier serving St.
Louis. Mr. Skinner has also been active in the National CellularOne Group, most
recently acting as Chairman of the Advisory Committee.
John W. Watkins has served as a Director of Triton since February
1998. Mr. Watkins serves as a member of the advisory boards of FrontierVision
Partners, L.P. and Triton Cellular Partners, L.P. and as a director of eBiz.net,
Advanced TelCom Group, Kelmscott Communications and Western Integrated Networks.
Mr. Watkins manages J.P. Morgan's private equity investment activities in the
communications industries. He is a Managing Director and an officer of J.P.
Morgan Capital Corporation. Previously, Mr. Watkins was a director of Horizon
4
<PAGE>
Cellular Group, Prism Radio Partners, L.P., Columbia River Cellular Partners,
L.P. and Savvis Communications Corporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES.
Security Ownership of Management and Certain Beneficial Owners
The following table sets forth, as of March 15, 2000, the number of
shares of Class A common stock beneficially owned by (i) each director, (ii)
each executive officer, (iii) all executives officers and directors as a group
and (iv) each of Triton's stockholders who, based on Triton's records, was known
to Triton to be the beneficial owner, as defied in Rule 13d-3 under the
Securities Exchange Act of 1934, of more than 5% of the Class A common stock.
<TABLE>
<CAPTION>
Number of Voting Shares Percentage of Voting
Name and Address of Beneficial Owner (1) Beneficially Owned Shares Beneficially Owned
- ---------------------------------------- ------------------ -------------------------
<S> <C> <C>
Michael E. Kalogris........................................... 3,147,673(8) 5.9%
Steven R. Skinner............................................. 1,942,906(9) 3.6
David D. Clark................................................ 349,541(10) *
Stephen J. McNulty............................................ 127,347(11) *
Michael C. Mears.............................................. 122,347(12) *
Daniel E. Hopkins............................................. 70,366(13) *
Scott I. Anderson............................................. 22,643(14) *
John D. Beletic............................................... 56,343 *
Arnold Chavkin (2)............................................ ___ ___
Mary Hawkins-Key.............................................. ___ ___
John W. Watkins (3)........................................... ___ ___
CB Capital Investors, LLC (2)................................. 12,270,744 22.9
J.P. Morgan Investment Corporation (3)........................ 2,578,772(15) 4.8
Desai Capital Management Incorporated (4)..................... 11,902,744(16) 22.2
Toronto Dominion Capital (U.S.A.), Inc. (5)................... 2,975,698 5.5
First Union Affordable Housing Community Development
Corporation (6)............................................... 4,079,877 7.6
AT&T Wireless PCS (7)......................................... 12,504,720(17) 18.9
All directors and executive officers as a group (11 persons).. 5,839,166 10.9
</TABLE>
__________
* Represents less than 1%.
(1) Unless otherwise indicated, the address of each person listed in this table
is c/o Triton Management Company, 1100 Cassatt Road, Berwyn, Pennsylvania
19312.
(2) Effective January 1, 2000, (i) CB Capital Investors, LLC became the
successor to CB Capital Investors, L.P., (ii) CB Capital Investors, Inc.
became the managing member of CB Capital Investors, LLC and (iii) Chase
Capital Partners became the manager, by delegation, of CB Capital
Investors, LLC pursuant to an advisory agreement with CB Capital Investors,
Inc. Mr. Chavkin is a vice president of CB Capital Investors, Inc. and a
general partner of Chase Capital Partners. Mr. Chavkin disclaims
beneficial ownership of such shares, except to the extent of his pecuniary
interest therein. The address of CB Capital Investors, LLC is c/o Chase
Capital Partners, 380 Madison Avenue, New York, New York 10017.
(3) Mr. Watkins is a managing director and an officer of J.P. Morgan Investment
Corporation. Mr. Watkins disclaims beneficial ownership of any such
shares. The address of J.P. Morgan is 101 California Street, 38th Floor,
San Francisco, California 94111.
(4) The address of Desai Capital Management Incorporated is 540 Madison Avenue,
New York, New York 10022.
(5) The address of Toronto Dominion Capital (U.S.A.), Inc. is 909 Fannin, Suite
1700, Houston, Texas 77010.
(6) The address of First Union Affordable Housing Community Development
Corporation is One First Union Center, 301 S. College Street, 5th Floor,
Charlotte, North Carolina 28288.
(7) The address of AT&T Wireless PCS is c/o AT&T Wireless Services, Inc., 7277
164th Avenue, N.E., Redmond, Washington 98052.
5
<PAGE>
(8) Includes 518,798 shares of Class A common stock held by Mr. Kalogris as
trustee under an amended and restated common stock trust agreement for
management employees and independent directors, dated June 26, 1998, under
which Triton will distribute Class A common stock to management employees
and independent directors. 1,282,076 of the 2,628,875 shares of Class A
common stock directly held by Mr. Kalogris are subject to forfeiture in
accordance with Mr. Kalogris' employment agreement over a five-year period.
(9) 961,557 of the 1,942,906 shares of Class A common stock are subject to
forfeiture according to the terms of Mr. Skinner's employment agreement.
(10) 274,125 of the 349,541 shares of Class A common stock are subject to
forfeiture according to the terms of letter agreements, dated as of
February 4, 1998 and August 9, 1999, between Triton and Mr. Clark.
(11) 95,208 of the 127,347 shares of Class A common stock are subject to
forfeiture according to the terms of letter agreements, dated as of January
11, 1999 and August 9, 1999, between Triton and Mr. McNulty.
(12) 95,208 of the 122,347 shares of Class A common stock are subject to
forfeiture according to the terms of letter agreements, dated as of
February 4, 1998 and August 9, 1999, between Triton and Mr. Mears.
(13) 42,366 of the 70,366 shares of Class A common stock are subject to
forfeiture according to the terms of a letter agreement, dated as of July
15, 1999, between Triton and Mr. Hopkins.
(14) Mr. Anderson is a principal of Cedar Grove Partners, LLC. He disclaims
beneficial interest of the 23,000 shares owned directly by Cedar Grove
Partners, LLC, except to the extent of his pecuniary interest therein.
(15) Includes 122,663 shares of Class A common stock held by Sixty Wall Street
SBIC Fund, L.P., an affiliate of J.P. Morgan Investment Corporation. The
address for Sixty Wall Street SBIC is 60 Wall Street, New York, New York
10260. J.P. Morgan also owns 8,210,827 shares of Class B non-voting common
stock.
(16) Consists of 5,951,372 shares of Class A common stock held by Private Equity
Investors III, L.P., and 5,951,372 shares of Class A common stock held by
Equity-Linked Investors-II, each an affiliate of Desai Capital Management.
The address for Private Equity Investors III and Equity-Linked Investors-II
is 540 Madison Avenue, 38th Floor, New York, New York 10022.
(17) Consists of 543,683.47 shares of Series D preferred stock convertible into
12,504,720 shares of Class A common stock. Shares of Series D preferred
stock are convertible into an equivalent number of shares of Series C
preferred stock at any time, and shares of Series C preferred stock are
convertible into shares of Class A common stock or Class B non-voting
common stock are at any time.
Board of Directors and Committees
The Board of Directors met seven times in 1999.
Audit Committee
---------------
The Audit Committee met four times in 1999. The current members of the
Audit Committee are Mr. Anderson, as chairman, Mr. Chavkin and Ms. Hawkins-Key.
The functions of the Audit Committee include recommending to the Board of
Directors the appointment of Triton's independent accountants; reviewing with
the independent accountants and Triton's internal auditors their annual audit
plans; reviewing management's plans for engaging the independent accountants to
perform management advisory services; discussing with management, the
independent accountants and the internal auditors the adequacy of Triton's
internal controls and financial reporting process; monitoring significant
accounting and reporting issues; and monitoring compliance with Triton's
policies relating to ethics and conflicts of interest. Both the independent
accountants and the internal auditors have unrestricted access to the Audit
Committee, including the opportunity to meet with the Audit Committee alone.
Compensation Committee
-----------------------
The Compensation Committee met twice in 1999. The current members of the
Compensation Committee are Mr. Beletic, as chairman, Mr. Chavkin and Mr.
Watkins.
The functions of the Compensation Committee include overseeing the
administration of Triton's compensation policies and practices; establishing and
administering the compensation plans of members of senior management and
authorizing any adjustments thereto; administering Triton's Stock and Incentive
Plan and
6
<PAGE>
authorizing all awards granted thereunder; administering Triton's Employee Stock
Purchase Plan; and reporting annually to the stockholders of Triton on matters
concerning the compensation of executives of Triton.
Compensation of Directors
The non-independent members and the AT&T-nominated member of the Board of
Directors do not receive cash compensation for service on the board, although
they are reimbursed for certain out-of-pocket expenses in connection with
attendance at board meetings. The independent directors receive compensation of
$10,000 per year, plus $1,000 for each meeting they attend in person and $500
for each meeting they attend via conference call, as well as shares of Class A
common stock that may, from time to time, be awarded to them under Triton's
Amended and Restated Common Stock Trust Agreement for Management Employees and
Independent Directors, dated June 26, 1998.
Executive Officers
The executive officers of Triton who are not directors are set forth below.
Executive officers of Triton are elected by the Board of Directors at the
meeting of the Board of Directors held immediately following the annual meeting
of stockholders to hold office until the next succeeding meeting of the Board of
Directors held immediately following the annual meeting of stockholders. In the
event of the failure to elect executive officers at the annual meeting of the
Board of Directors, executive officers may be elected at any regular or special
meeting of the Board of Directors. Each executive holds office until his or her
successor has been elected and qualified, or until his or her earlier death,
resignation or removal.
David D. Clark, 35, has served as Executive Vice President, Chief Financial
Officer and Secretary of Triton since its inception. Before joining Triton, he
was a Managing Director at Furman Selz L.L.C. specializing in communications
finance, which he joined in February 1996. Prior to joining Furman Selz, Mr.
Clark spent over ten years at Citibank N.A. and Citicorp Securities Inc. as a
lending officer and a high yield finance specialist. Mr. Clark is also the
Chief Financial Officer of Triton Cellular Partners, L.P.
Stephen J. McNulty, 46, has served as President and General Manager of
Triton's Mid-Atlantic region since July 1998. Before joining Triton, he was
Vice President Central/West Operations with United States Cellular in Chicago,
Illinois. Mr. McNulty previously served as Vice President of Marketing for
ALLTEL Communications from February 1994 to May 1997.
Michael C. Mears, 44, has served as President and General Manager of
Triton's Southern region since its inception. Mr. Mears previously served as
the Vice President and General Manager of American Telecommunications Inc. from
June 1995 until April 1997. Before that, Mr. Mears was the Regional and Area
General Manager of GTE Corp., serving in that capacity from October 1992 to June
1995. From 1986 to 1992, Mr. Mears served as Regional and Area General Manager
for the Providence Journal Company's Cellular One properties.
Daniel E. Hopkins, 35, has served as Vice President of Finance and
Treasurer of Triton since July 1998. Prior to joining Triton, he was a Vice
President in PNC Bank's Media and Communications Group. Mr. Hopkins has over
ten years of banking experience, primarily in the areas of Communications
Finance and Acquisitions/Leveraged Finance. Mr. Hopkins is also the Treasurer
of Triton Cellular Partners, L.P.
7
<PAGE>
Executive Compensation
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Restricted Stock All Other
Name Principal Position Year Salary Bonus Awards (1) Compensation
---- ------------------ ---- ------ ----- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Kalogris Chairman of the Board of 1999 $373,967 $350,000 $792,942
Directors and Chief Executive 1998 $350,000 $350,000 $11,959,963 --
Officer
Steven R. Skinner President and Chief Operating 1999 $267,236 $250,000 $594,707
Officer 1998 $225,000 $225,000 $8,969,973 --
Clyde Smith (2) Executive Vice President and 1999 $238,313 $114,000 $1,480,716 $166,119(3)
Chief Technical Officer 1998 $205,051 $220,000 $1,778,271 $ 16,941
David D. Clark Executive Vice President, 1999 $208,231 $200,000 $2,957,471
Chief Financial Officer and 1998 $190,000 $190,000 $3,334,260 --
Secretary
Stephen J. McNulty President and General Manager 1999 $168,554 $176,000 $2,166,243
of the Mid-Atlantic Region 1998 $79,800 $100,000 -- $10,237
</TABLE>
__________
(1) Consists of 1,508,549 and 444,004 restricted shares of Triton's Class A
common stock awarded during 1998 and 1999, respectively, that vest over a
five-year period commencing February 4, 1998 with an aggregate value of
$68,367,440 and $20,122,261, respectively, based upon the closing price of
the Class A common stock on December 31, 1999. A significant portion of
these shares remain subject to forfeiture at December 31, 1999. See
"Security Ownership of Management and Certain Beneficial Owners."
Mr. Kalogris' and Mr. Skinner's awards vest as follows: 10% vested as of
February 4, 1998, 5% vested during 1999 in connection with the completion
of Phase I of Triton's build-out and 17% vest per year for five years
beginning February 4, 1999. Mr. Smith's awards vest as follows: 17% vest
per year for five years beginning February 4, 1999 and 15% vest based upon
performance measures to be determined. Mr. Clark's and Mr. McNulty's
awards vest as follows: 20% per year for five years beginning February 4,
1999. Notwithstanding the vesting schedules set forth above, all
restricted shares vest in specified circumstances constituting a change of
control.
(2) Mr. Smith resigned from Triton on February 25, 2000. See "Employment
Agreements."
(3) Relocation payment.
Several executive officers were issued shares of restricted stock in
connection with the consummation of Triton's joint venture with AT&T, the
Norfolk acquisition, the Myrtle Beach acquisition and the license exchange with
AT&T. In addition, several executive officers were issued restricted stock under
the amended and restated common stock trust agreement for management employees
and independent directors dated June 26, 1998. 518,798 shares, or .97% of
Triton's total outstanding Class A common stock, is currently held in trust
under this common stock trust agreement of which Michael E. Kalogris is the
trustee. The trustee is required to distribute stock from the trust to
management employees and independent directors as directed in writing by
executive management with the authorization of the Compensation Committee of the
Board of Directors. Triton's Compensation Committee of the Board of Directors
determines at its discretion which persons shall receive awards and the amount
of such stock awards. Triton's stock and incentive plan governs the shares and
letter agreements previously issued and to be issued from the trust established
pursuant to the common stock trust agreement.
8
<PAGE>
Employment Agreements
Michael E. Kalogris. On February 4, 1998, Triton entered into an
employment agreement with Michael E. Kalogris, Chairman of Triton's Board of
Directors and Chief Executive Officer. Mr. Kalogris' employment agreement has a
term of five years unless the agreement is terminated earlier by either Mr.
Kalogris or Triton. Mr. Kalogris may terminate his employment agreement:
. at any time at his sole discretion upon 30 days' prior written notice;
and
. immediately, upon written notice for good reason, which includes:
(a) if there is a change of control, as defined in the employment
agreement;
(b) if Mr. Kalogris is demoted, removed or not re-elected as Chairman of
Triton's Board of Directors. However, so long as Mr. Kalogris remains
a member of Triton's Board of Directors and Triton's Chief Executive
Officer, it is not considered good reason if Mr. Kalogris is no
longer Chairman of Triton's Board of Directors;
(c) there is a material diminishment of Mr. Kalogris' responsibilities,
duties or status and that diminishment is not rescinded within 30
days after receiving written notice of the diminishment;
(d) Triton fails to pay or provide benefits to Mr. Kalogris when due and
does not cure that failure within 10 days of receiving written notice
of that failure;
(e) Triton relocates its principal offices more than 30 miles from
Malvern, Pennsylvania without the consent of Mr. Kalogris; or
(f) Triton purports to terminate Mr. Kalogris for cause for any reason
other than those permitted as for cause reasons under the employment
agreement.
Triton may terminate Mr. Kalogris' employment agreement:
. at any time, upon written notice, without cause at Triton's sole
discretion;
. for cause; or
. upon the death or disability of Mr. Kalogris.
If Mr. Kalogris terminates the employment agreement for good reason other
than due to a change of control, or Triton terminates the employment agreement
without cause, Mr. Kalogris is entitled to receive the following severance
benefits:
. $1.0 million;
. up to an additional $0.5 million if he is unable to secure employment in
a senior executive capacity by the second anniversary of the date of
termination;
. the vesting of some of his unvested shares as follows:
(a) if the termination occurs before February 4, 2001, 50% of all shares
of Class A common stock that are unvested under the employment
agreement as of such date will vest;
(b) if the termination occurs between February 4, 2001 and February 3,
2002, 25% of the unvested shares will vest; and
9
<PAGE>
(c) if the termination occurs after such period, none of the unvested
shares will vest.
Triton will also allow Mr. Kalogris to participate in all health, dental,
disability and other benefit plans maintained by Triton for a period of two
years following the date of termination of the employment agreement.
If Mr. Kalogris' employment is terminated on or after the initial five-year
term of the employment agreement or due to Triton's failure to renew the
agreement, Triton will pay him a severance benefit in the amount of his base
salary at that time. Mr. Kalogris' employment agreement provides for an initial
annual base salary of $350,000, subject to annual increases at the discretion of
the Compensation Committee of the Board of Directors, and an annual bonus in an
amount up to 100% of his base salary based on Triton's performance. Mr. Kalogris
is also entitled to acquire shares of Triton's Series A common stock under a
stock purchase plan that may be created under the terms of the employment
agreement and is required to invest 30% of any amounts he receives on account of
an annual bonus in excess of 50% of his base salary toward the purchase of such
shares.
In the event of any change of control, regardless of whether Mr. Kalogris
terminates the employment agreement, all of his previously unvested shares will
vest immediately.
Steven R. Skinner. On February 4, 1998, Triton entered into an employment
agreement with Steven R. Skinner, Triton's President and Chief Operating
Officer. The employment agreement has a term of five years unless terminated
earlier by either Mr. Skinner or Triton. Mr. Skinner may terminate his
employment agreement:
. at any time at his sole discretion upon 30 days' prior written notice;
and
. immediately, upon written notice for good reason, which includes:
(a) if there is a change of control, as defined in the employment
agreement;
(b) if Mr. Skinner is demoted;
(c) there is a material diminishment of Mr. Skinner's responsibilities,
duties or status and that diminishment is not rescinded within 30
days after receiving written notice of the diminishment;
(d) Triton fails to pay or provide benefits to Mr. Skinner when due and
does not cure that failure within 10 days of receiving written
notice of that failure;
(e) Triton relocates its principal offices more than 30 miles from
Malvern, Pennsylvania without the consent of Mr. Skinner; or
(f) Triton purports to terminate Mr. Skinner for cause for any reason
other than those permitted as for cause reasons under the employment
agreement.
Triton may terminate the employment agreement:
. at any time, upon written notice, at Triton's sole discretion;
. for cause; or
. upon the death or disability of Mr. Skinner.
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<PAGE>
If Mr. Skinner terminates the employment agreement for good reason other
than due to a change of control, or Triton terminates the employment agreement
without cause, Mr. Skinner is entitled to receive the following severance
benefits:
. $675,000;
. up to an additional $337,500 if he is unable to secure employment in a
senior executive capacity by the second anniversary date of the
termination of the agreement;
. the vesting of some of his unvested shares as follows:
(a) if the termination occurs before February 4, 2001, 50% of all shares
of Class A common stock that are unvested under the employment
agreement as of that date will vest;
(b) if the termination occurs between February 4, 2001 and February 3,
2002, 25% of the unvested shares will vest; and
(c) if the termination occurs after such period, none of the unvested
shares will vest; and
. Triton will allow Mr. Skinner to participate in all health, dental,
disability and other benefit plans maintained by Triton for a period of
two years following the date of termination of the agreement.
If Mr. Skinner's employment is terminated on or after the initial five-year
term of the employment agreement, or due to Triton's failure to renew the
employment agreement, Triton will pay Mr. Skinner a severance benefit in the
amount of his base salary at that time. Mr. Skinner's employment agreement
provides for an initial annual base salary of $225,000, subject to annual
increases at the discretion of the Compensation Committee of the Board of
Directors, and an annual bonus in an amount up to 100% of his base salary based
on Triton's performance. Mr. Skinner is also entitled to acquire shares of
Triton's Series A common stock under a stock purchase plan and is required to
invest 30% of any amounts he receives on account of an annual bonus in excess of
50% of his base salary toward the purchase of such shares.
In the event of any change of control, regardless of whether Mr. Skinner
terminates the employment agreement, all of his previously unvested shares will
vest immediately.
Clyde Smith. Effective February 25, 2000, Mr. Smith resigned from his
position as Executive Vice President of Triton. Pursuant to his employment
agreement, and subsequent separation agreement, Mr. Smith will receive total
severance compensation of $409,000 and 51,896 of his unvested shares.
11
<PAGE>
Performance Graph
COMPARISON OF 2 MONTH CUMULATIVE TOTAL RETURN*
AMONG TRITON PCS HOLDINGS, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ TELECOMMUNICATIONS INDEX
<TABLE>
<CAPTION>
Cumulative Total Return
-----------------------------------
10/27/99 10/99 11/99 12/99
<S> <C> <C> <C> <C>
TRITON PCS HOLDINGS, INC. 100.00 195.83 259.72 252.78
NASDAQ STOCK MARKET (U.S.) 100.00 108.06 112.67 129.79
NASDAQ TELECOMMUNICATIONS 100.00 106.06 117.38 142.70
</TABLE>
*$100 INVESTED ON 10/27/99 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
Compensation Committee Report on Executive Compensation
The Compensation Committee consists of three non-employee directors. The
Committee regularly reviews Triton's executive compensation policies and
practices and establishes the salaries of executive officers.
Executive Compensation Policy
-----------------------------
The Committee's executive compensation policy is founded on principles that
guide Triton in establishing all its compensation programs. Triton designs
compensation programs to attract, retain and motivate highly talented
individuals at all levels of the organization. In addition, the programs are
designed to be cost-effective and to treat all employees fairly. To that end,
all programs, including those for executive officers, share these
characteristics:
. Compensation is based on the level of job responsibility, individual
performance, and Triton performance. Members of senior management
have a greater portion of their pay based on Triton performance than
other employees.
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<PAGE>
. Compensation also reflects the value of the job in the marketplace. To
retain its highly skilled work force, Triton strives to remain
competitive with the pay of other highly respected employers who
compete with Triton for talent.
. To align the interests of employees with those of stockholders, Triton
provides employees at all levels of the organization the opportunity
for equity ownership through various Triton programs. In addition,
executive officers and other key employees have the opportunity to
build more substantial equity ownership through Triton stock plans.
. Compensation programs are developed and administered to foster the
long-term focus required for success in the wireless communications
industry.
The Committee believes that Triton's executive compensation program
reflects the principles described above and provides executives strong
incentives to maximize Triton performance and therefore enhance shareholder
value. The program consists of both annual and long-term components. The
Committee believes that the executive compensation program should be considered
as a whole in order to properly assess whether it is attaining its objectives.
In establishing total compensation, the Committee considers various
measures of historical and projected Triton performance, including revenues,
operating results, new market launches, meeting build-out schedules and cost
budgets and implementation of information technology services. These data form
the basis for the Committee's assessment of the overall performance and
prospects of Triton that underpin the Committee's judgment in establishing total
compensation ranges. In evaluating these factors the Committee assigns them
relative weighted values.
Triton also retains independent compensation and benefits consultants to
assist in evaluating executive compensation programs. The use of independent
consultants provides additional assurance that Triton's programs are reasonable
and appropriate to Triton's objectives.
Components to Executive Compensation
------------------------------------
Annual Cash Compensation. Annual cash compensation for 1999 consisted of
two components: base salary and a cash bonus. Base salaries and cash bonuses
are determined with reference to Triton and individual performance for the
previous year, internal relativity and market conditions, including pay at the
wireless communications companies of like size and stature to Triton and general
inflationary trends. Assessment of individual performance includes
considerations of a person's impact on financial performance as well as
judgment, creativity, effectiveness in developing subordinates and a diverse
organization, and contributions to improvement in the quality of Triton's
products, services and operations. As noted above, Triton uses the data from
companies of like size and stature as well as other market data to test for
reasonableness and competitiveness of bases salaries but also exercises
subjective judgment in view of Triton's compensation objectives.
Long-Term Incentive Compensation. Long-term incentive awards typically are
granted to provide executive officers with a competitive long-term incentive
opportunity and an identity of interest with Triton. Long-term incentives will
be generally provided through grants of incentive stock options, non-qualified
stock options and restricted stock options under the 1999 Stock and Incentive
Plan, which is administered by the Compensation Committee. A stock option
permits the holder to buy Triton stock at a specific price during a specific
period of time. As the price of Triton stock rises, the option increases in
value. The intent of such awards is to provide the recipient with an incentive
to perform at levels that will result in better Triton performance and enhanced
stock value.
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<PAGE>
Chief Executive Officer Compensation
------------------------------------
The executive compensation policy described above was applied in
establishing Mr. Kalogris's compensation for 1999, with the basic compensation
levels as determined pursuant to an employment agreement between Mr. Kalogris
and Triton, dated February 4, 1998. Mr. Kalogris participated in the same
executive compensation plans available to Triton's other executive officers.
In 1999, Mr. Kalogris had a base salary of $373,967. On the basis of
Triton's performance versus established goals, and Mr. Kalogris's individual
performance, the Board of Directors determined that an annual cash bonus of
$350,000 had been earned in 1999.
Tax Deductibility Considerations
--------------------------------
Section 162(m) of the Internal Revenue Code limits the deductibility of
compensation in excess of $1 million paid to the executive officers named in
this proxy statement, unless certain requirements are met. It is the present
intention of the Compensation Committee of Triton to preserve the deductibility
of compensation under Section 162(m) to the extent the Committee believes that
doing so would be consistent with the best interests of stockholders. As such,
long-term incentive compensation awards, particularly stock option awards,
generally are designed to meet the requirements for deductibility under Section
162(m).
Members of the Compensation Committee:
- -------------------------------------
John D. Beletic
Arnold Chavkin
John W. Watkins
Compensation Committee Interlocks and Insider Participation
The members of Triton's Compensation Committee include Mr. Chavkin, who is
a general partner of Chase Capital Partners, and Mr. Watkins, a managing
director of J.P. Morgan Capital Corporation. See "Certain Relationships and
Related Transactions" for a description of various transactions between
affiliates of these entities and Triton.
Certain Relationships and Related Transactions
Triton is a party to the following agreements with management and principal
stockholders.
The Stockholders' Agreement
---------------------------
General. Triton has entered into an amended and restated stockholders'
agreement, dated as of October 27, 1999, with AT&T, the cash equity investors
and certain of Triton's current and former executive officers. Additional
management stockholders and the independent directors have also agreed to be
bound by the provisions of the stockholders' agreement in connection with the
issuance to them of capital stock. The agreement covers matters in connection
with Triton's management and operations and the sale, transfer or other
disposition of Triton's capital stock.
Board of Directors. A board of directors divided into three classes and
consisting of seven persons governs Triton. Actions of the board of directors
require the affirmative vote of a majority of the entire board, although some
transactions require a higher vote. The stockholders who are party to Triton's
stockholders' agreement, other than J. P. Morgan Investment Corporation, have
agreed that they will vote their shares together to elect as two of Triton's
seven directors the nominees selected by Triton's cash equity investors and, so
long as AT&T has the right to nominate a director under Triton's certificate of
incorporation, to elect AT&T's nominee.
Representatives of AT&T and several cash equity investors also have the
right to attend each meeting of the board of directors as observers, provided
that they continue to own a certain amount of Triton's capital stock. A
majority of disinterested directors must approve any transactions between Triton
and its stockholders, except for
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<PAGE>
transactions under the shareholders', license, roaming and resale agreements
described in this section and arm's-length agreements with AT&T.
Restrictions on Transfer; Rights of First Offer. The stockholders'
agreement imposes restrictions with respect to the sale, transfer or other
disposition of Triton's capital stock held under the terms of the agreement.
Stockholders may not transfer their shares of common stock prior to February 4,
2001 other than to any affiliated successor; thereafter, stockholders holding
shares of common stock may transfer the shares to any person, subject to rights
of first offer and first negotiation granted to specified parties to the
stockholders' agreement. However, stockholders that are small business
investment corporations and that hold an aggregate of 23,060,343 shares of
common stock may transfer their shares prior to February 4, 2001 if they are
required to do so in order to comply with regulatory requirements, but these
transfers are still subject to the rights of first offer. Additionally, holders
of common stock and Series D preferred stock may transfer those shares at any
time to an affiliated successor or an equity investor affiliate, and, after
February 4, 2001, the cash equity investors may transfer or otherwise dispose of
any of those shares held by them to any other cash equity investors.
AT&T may not transfer or dispose of any of its shares of Series D preferred
stock at any time other than to an affiliated successor. In addition, each
stockholder who is a party to the stockholders' agreement has agreed, subject to
some exceptions, not to transfer or otherwise dispose of any shares of Triton's
capital stock to any of the three largest carriers of telecommunications
services that as of February 4, 1998 constituted interexchange services, other
than AT&T and other specified wireless carriers.
Registration Rights. The stockholders' agreement grants certain demand and
piggyback registration rights to the stockholders. On or after February 4, 2001,
the following stockholders may, subject to the restrictions on transfer
described above, cause an underwritten demand registration, subject to customary
proportionate cutback and blackout restrictions, so long as registration is
reasonably expected to result in aggregate gross proceeds of at least $10.0
million to such stockholder:
. AT&T;
. any stockholder or group of stockholders beneficially owning shares of
Series C preferred stock or common stock, if the sale of the shares to
be registered is reasonably expected to result in aggregate gross
proceeds of at least $25.0 million; or
. certain management stockholders beneficially owning at least 50.1% of
the shares of common stock then beneficially owned by all such
management stockholders together.
In addition to the demand registration rights, any stockholder may, subject
to the restrictions on transfer described above, piggyback on a registration by
Triton at any time, other than registrations on Forms S-4 or S-8 of the
Securities Act, subject to customary proportionate cutback restrictions. The
demand and piggyback registration rights and obligations survive until February
4, 2018.
Rights of Inclusion. In the event of a proposed sale by any stockholder to
any person other than an affiliated successor that would constitute 25% or more
of the aggregate outstanding Series C preferred stock and common stock on a
fully-diluted basis, excluding the Series A preferred stock, the other
stockholders have the right to participate in any such proposed sale by
exercising such right within 30 days after receipt of a notice informing them of
such proposed sale. The purchaser may either purchase all stock offered by all
stockholders electing to participate in such sale, or the purchaser may purchase
stock from stockholders electing to participate in such sale on a pro-rata basis
up to the aggregate dollar amount offered by the purchaser to the initial
selling stockholder.
In an investors' agreement, the cash equity investors have agreed that
specified cash equity investors who sell their shares of common stock may
require the other cash equity investors to also participate in any such sale.
As a result, cash equity investors holding less than a majority of the shares of
common stock may have the effective right to sell control of Triton.
Exclusivity. The stockholders have agreed that during the term of the
stockholders' agreement, none of the stockholders nor their respective
affiliates will provide or resell, or act as the agent for any person offering,
within
15
<PAGE>
the territory defined in the stockholders' agreement, wireless mobility
telecommunications services initiated or terminated using time division multiple
access technology and frequencies licensed by the FCC. However, AT&T and its
affiliates may:
. resell or act as agent for Triton;
. provide or resell wireless telecommunications services to or from
specific locations; and
. resell wireless telecommunications services for another person in any
area where Triton has not yet placed a system into commercial service.
AT&T must provide Triton with prior written notice of its intention to
engage in resales for another person, and only dual band/dual mode phones may be
used in connection with the resale activities. Additionally, with respect to
the markets listed on the roaming agreement, Triton and AT&T have agreed to
cause Triton's respective affiliates in their home carrier capacities to program
and direct the programming of customer equipment so that the other party, in its
capacity as the serving carrier, is the preferred roaming provider in such
markets. Each party also agrees to refrain from inducing any of its customers to
change programming.
Build-Out. Triton is required to:
. meet the construction requirements described in an agreed-upon minimum
build-out plan;
. ensure compatibility of its personal communications services systems
with the majority of systems in the southeastern region of the United
States;
. satisfy the FCC construction requirements in the territory defined in
the stockholders' agreement;
. offer various core service features with respect to its systems;
. cause its systems to comply with AT&T's time division multiple access
quality standards; and
. refrain from providing or reselling interexchange services, other than
interexchange services under its FCC licenses or that Triton procures
from AT&T.
If Triton materially breaches any of the foregoing operational obligations
or if AT&T decides to adopt a new technology standard in a majority of its
markets and Triton declines to adopt the new technology, AT&T may terminate its
exclusivity obligations.
Certain Transactions. In the event of a merger, consolidation, asset
acquisition or disposition or other business combination involving AT&T and an
entity that:
. derives from telecommunications businesses annual revenues in excess
of $5.0 billion;
. derives less than one-third of its aggregate revenues from the
provision of wireless telecommunications; and
. owns FCC licenses to offer and does offer wireless mobility
telecommunications services serving more than 25% of the potential
customers within the territory defined in the stockholders' agreement,
AT&T will have the right, upon written notice, to terminate substantially
all of its exclusivity obligations described above in a portion of the territory
in which the other party owns an FCC license to offer commercial mobile radio
service. However, upon such a termination, Triton has the right to cause AT&T
to exchange into shares of Series B preferred stock:
. all of the shares of its Series A preferred stock;
16
<PAGE>
. all of the shares of its Series D preferred stock, its Series C
preferred stock or any common stock it may have received upon
conversion of its Series D preferred stock into any one of them.
In the event that AT&T is required in any such transaction to dispose of
any of its personal communications services systems in the Charlotte, North
Carolina, Atlanta, Georgia, Baltimore, Maryland/Washington, D.C. or Richmond,
Virginia basic trading areas, Triton has certain marketing rights. AT&T has
agreed, for a period of 180 days, to jointly market with any of its applicable
markets any of Triton's personal communications services systems that are
located within the major trading areas that include the applicable AT&T basic
trading areas. Triton's right is exercisable at any time within the period
commencing with the date of the announcement by AT&T of any such transaction and
terminating on the later of six months after consummation of the transaction and
the date by which AT&T is required under applicable law to dispose of any such
system.
Without the prior written consent of AT&T, Triton and its subsidiaries may
not effect any sale of substantially all the assets or liquidation, merger or
consolidation of Triton or any of its subsidiaries or engage in any business
other than permitted businesses. There are limited exceptions to this
provision.
Acquisition of Cellular Licenses. Triton may acquire cellular licenses that
the board of directors has determined are demonstrably superior alternatives to
construction of a personal communications services system in the applicable area
within the territory, provided that:
. a majority of the cellular potential customers are within the
territory defined in the stockholders' agreement;
. AT&T and its affiliates do not own commercial mobile radio service
licenses in the area; and
. Triton's ownership of the cellular license will not cause AT&T or any
affiliate to be in breach of any law or contract.
Equipment, Discounts and Roaming. At Triton's request, AT&T will use all
commercially reasonable efforts to assist Triton in obtaining discounts from any
vendor with whom Triton is negotiating for the purchase of any infrastructure
equipment or billing services and to enable Triton to become a party to the
roaming agreements between AT&T and its affiliates which operate other cellular
and personal communications services systems so long as AT&T, in its sole
discretion, does not determine such activities to be adverse to its interests.
Resale Agreements. At AT&T's request, Triton will enter into resale
agreements relating to the territory defined in the stockholders' agreement. The
rates, terms and conditions of service that Triton provides shall be at least as
favorable to AT&T, taken as a whole, as the rates, terms and conditions provided
by Triton to other customers.
Subsidiaries. All of Triton's subsidiaries must be direct or indirect
wholly-owned subsidiaries.
Amendments. Amendments to the stockholders' agreement require the consent
of the following stockholders:
. a majority of the shares of each class of capital stock held by the
parties to the stockholders' agreement, including AT&T;
. two-thirds of the common stock beneficially owned by the cash equity
investors; and
. 60.1% of the common stock beneficially owned by the management
stockholders.
However, in the event any party to the stockholders' agreement ceases to
own any shares of capital stock, the party ceases to be a party to the
stockholders' agreement and his or her corresponding rights and obligations
terminate.
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<PAGE>
Termination. The stockholders' agreement terminates upon the earliest to
occur of:
. the written consent of each party to the agreement;
. February 4, 2009; and
. one stockholder beneficially owning all of the shares of common stock.
However, certain provisions of the agreement expire on February 4, 2008,
and some consent rights of AT&T expire if it fails to own a specified amount of
capital stock.
License Agreement
-----------------
Under the terms of a network membership license agreement, dated as of
February 4, 1998, between AT&T and Triton, AT&T has granted Triton a royalty-
free, non-exclusive, limited right and license to use various licensed marks
solely in connection with specified licensed activities, as described below.
The licensed marks include the logo containing the AT&T and globe design and the
expression Member, AT&T Wireless Services Network. The licensed activities
include:
. the provision to end-users and resellers, solely within the territory
specified in the agreement, of communications services on frequencies
licensed to Triton for commercial mobile and radio service provided in
accordance with the AT&T agreements; and
. marketing and offering the licensed services within the territory.
The license agreement also grants Triton the right and license to use the
licensed marks on permitted mobile phones.
AT&T has agreed not to grant to any other person a right or license to
provide or resell, or act as agent for any person offering, the communications
services Triton is offering within the territory under the licensed marks except
to:
. any person who resells, or acts as Triton's agent for, licensed services
provided by Triton, or
. any person who provides or resells wireless communications services to
or from specific locations such as buildings or office complexes, even
if the applicable subscriber equipment being used is capable of routine
movement within a limited area and even if such subscriber equipment may
be capable of obtaining other telecommunications services beyond that
limited area and handing-off between the service to the specific
location and those other telecommunications services.
In all other instances, except as described above, AT&T reserves for itself
the right to use the licensed marks in connection with its provision of
services, whether within or without the territory.
The license agreement contains numerous restrictions with respect to
Triton's use and modification of any of the licensed marks. Triton is obligated
to use commercially reasonable efforts to cause all licensed services that use
the licensed marks to be of comparable quality to the licensed services AT&T
markets and provides in areas comparable to Triton's licensed territory, taking
into account the relative stage of development of the areas and other factors.
The license agreement also sets forth specific testing procedures to determine
compliance with these standards and affords Triton a grace period to cure any
instances of alleged noncompliance. Following the cure period, Triton must
cease using the licensed marks until Triton is in compliance.
Triton may not assign or sublicense any of its rights under the license
agreement. However, the license agreement may be, and has been, assigned to
Triton's lenders under Triton's credit facility. After the expiration of any
applicable grace and cure periods under the credit facility, Triton's lenders
may enforce Triton's rights under the license agreement and assign the license
agreement to any person with AT&T's consent.
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<PAGE>
The license agreement has a five-year term, which renews for an additional
five-year period if neither party terminates the agreement. The license
agreement may be terminated at any time in the event of Triton's significant
breach, including Triton's misuse of any licensed marks, Triton's license or
assignment of any of the rights in the license agreement, Triton's failure to
maintain AT&T's quality standards or if Triton experiences a change of control.
After the initial five-year term, in the event AT&T converts any shares of
Series A preferred stock into common stock in connection with the stockholders'
agreement, the license agreement terminates on the later of two years from the
date of such conversion and the then existing expiration date of the license
agreement. After the initial five-year term, AT&T may also terminate the
license agreement upon the occurrence of specified transactions. See "--The
Stockholders' Agreement--Certain Transactions."
Roaming Agreement
-----------------
Under an intercarrier roamer service agreement, dated as of February 4,
1998, between AT&T, on behalf of its affiliates, and Triton, AT&T and Triton
agreed to provide wireless mobility radiotelephone service for registered
customers of the other party's customers when they are out of their home
carrier's geographic area and in the geographic area where the serving carrier,
itself or through affiliates, holds a license or permit to construct and operate
a wireless mobility radio-telephone system and station. Each home carrier whose
customers receive service from a serving carrier shall pay the serving carrier
100% of the wireless service charges and 100% of the pass-through charges, such
as toll or other charges. Each serving carrier's service charges per minute of
use or partial minute of use for the first three years will be fixed at a
declining rate, and after the first three years will be equal to an adjusted
average home rate or any lower rate the parties negotiate from time to time.
Each serving carrier's toll charges per minute of use for the first three years
will be fixed at a declining rate. After the first three years, the parties may
renegotiate the rate from time to time.
The roaming agreement has a term of 20 years, unless a party terminates
earlier due to:
. the other party's uncured breach of any term of the roaming agreement;
. the other party's voluntary liquidation or dissolution; or
. the FCC's revocation or denial of the other party's license or permit to
provide commercial mobile radio service.
Neither party may assign or transfer the roaming agreement or any of its
rights under the agreement except to an assignee of all or part of its license
or permit to provide commercial mobile radio service, provided that the assignee
expressly assumes all or the applicable part of the assigning party's
obligations under the agreement.
Resale Agreement
----------------
Under the terms of the stockholders' agreement, Triton is required at
AT&T's request to enter into a resale agreement in an agreed-upon form. Under
the resale agreement, AT&T will be granted the right to purchase and resell on a
nonexclusive basis access to and usage of Triton's services in the territory.
AT&T will pay Triton the charges, including usage and roaming charges,
associated with services it requests under the agreement. Triton will retain
the continuing right to market and sell its services to customers and potential
customers.
The resale agreement will have a term of 10 years and will renew
automatically for successive one-year periods unless either party elects to
terminate the agreement. Following the eleventh anniversary of the agreement,
either party may terminate with 90 days' prior written notice. Furthermore,
AT&T may terminate the agreement at any time for any reason on 180-days' written
notice.
Under the terms of the stockholders' agreement, Triton has agreed that the
rates, terms and conditions of service, taken as a whole, that Triton provides
to AT&T under the resale agreement shall be at least as favorable as, or if
permitted by applicable law, superior to, the rates, terms and conditions of
service, taken as a whole, to any other customer. Triton will design the rate
plan Triton will offer under the resale agreement to result in a discounted
average actual rate per minute of use AT&T pays for service at least 25% below
the weighted average actual rate per minute that Triton bills its customers
generally for access and air time.
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Neither party may assign or transfer the resale agreement or any of its
rights thereunder without the other party's prior written consent, which will
not be unreasonably withheld, except:
. to an affiliate of that party at the time of the agreement's execution;
. by Triton to any of its operating subsidiaries; and
. to the transferee of a party's stock or substantially all of the party's
assets, provided that all FCC and other necessary approvals have been
received.
Other Related Party Transactions
--------------------------------
Affiliates of First Union Affordable Housing Community Development
Corporation and J.P. Morgan Investment Corporation, each of which beneficially
owns more than 5% of Triton's capital stock, served as underwriters and received
underwriter fees in connection with Triton's initial public offering completed
in November, 1999.
Over the course of 1997, Triton Communications L.L.C., Triton's
predecessor, incurred certain costs on behalf of Triton Cellular, Inc. an entity
affiliated with Triton through management overlap and shared leased facilities.
These costs totaled $148,100 and Triton Cellular reimbursed Triton in 1999. In
addition, Triton purchased $22,800 of equipment from Horizon Cellular Telephone
Company, L.P., an entity formerly affiliated with Triton through management
overlap and shared leased facilities. In addition, under an agreement between
Triton Cellular, Inc. and Triton, allocations for management services rendered
by some of Triton's management employees on behalf of Triton Cellular and
allocations for shared lease facilities are charged to Triton Cellular. Those
allocations totaled $505,000 during 1999.
On February 3, 1998, Triton PCS entered into a credit facility. On
September 22, 1999, Triton PCS entered into an amendment to that credit facility
that increased the credit facility to $600.0 million. Affiliates of each of
J.P. Morgan Investment Corporation, which beneficially owns approximately 17.4%
of Triton's common stock, CB Capital Investors, which beneficially owns
approximately 19.8% of Triton's common stock, First Union Affordable Housing
Community Development Corporation, which beneficially owns approximately 6.6% of
Triton's common stock, and Toronto Dominion Capital (U.S.A.), Inc., which
beneficially owns approximately 4.8% of Triton's common stock, serve as agent
and lenders under the credit facility. Each of the agent and lenders under the
credit facility has received and will continue to receive customary fees and
expenses in connection with the credit facility. For the year ended December
31, 1999, affiliates of J.P. Morgan Investment Corporation, First Union
Affordable Housing Development Housing Corporation and Toronto Dominion Capital
(U.S.A.), Inc. received approximately $299,932, $359,607 and $237,458,
respectively, in their capacity as lender under such facility, and CB Capital
Investors received approximately $1,205,180 in its capacity as agent and lender
under such facility.
Triton has entered into letter agreements with several of its management
employees and with Triton's independent directors. Under the letter agreements,
these individuals were issued shares of Triton's Class A common stock that vest
at 20% per year over a five-year period.
On August 12, 1999, Triton entered into stock purchase agreements with each
of Scott I. Anderson and John D. Beletic, Triton's two independent directors,
and one officer under which Triton agreed to sell to them an aggregate of 3,400
shares of Triton's Series C preferred stock (which were converted into 78,200
shares of Class A common stock in Triton's initial public offering) for a
purchase price of $100 per share. This transaction was closed in September
1999.
First Union Securities, Inc., an affiliate of First Union Affordable
Housing Community Development Corporation, acted as Triton's exclusive financial
advisor in connection with the sale of Triton's personal communications towers
to American Tower, L.P. pursuant to an asset purchase agreement dated July 13,
1999. Triton paid a fee to such entity of $1.07 million in connection with the
consummation of such sales which occurred on September 22, 1999.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Triton's
executive officers and directors and persons who own more than 10% of Triton's
Class A common stock to file reports of ownership and changes in ownership of
Triton's Class A common stock with the Securities and Exchange Commission and
Nasdaq. Based solely on a review of copies of such reports and written
representations from the reporting persons, Triton believes that from January
1999 through the date of this Proxy Statement, its executive officers, directors
and greater than 10% stockholders filed on a timely basis all reports due under
Section 16(a) of the Exchange Act, except that each of Mr. McNulty, Mr. Mears
and Mr. Smith reported one transaction late and Mr. Beletic reported two
transactions late.
SELECTION OF INDEPENDENT AUDITORS
(Proposal No. 2)
The Board of Directors has selected the firm of PricewaterhouseCoopers LLP
as Triton's independent auditors for the year ending December 31, 2000.
Effective July 16, 1999, Triton engaged PricewaterhouseCoopers LLP as its
independent accountants. KPMG LLP had been Triton's independent accountants
prior to July 16, 1999. The decision to change independent accounts was approved
by Triton's Board of Directors. During the period of coverage from March 6,
1997, the date of inception, through December 31, 1997, the year ended December
31, 1998 and the subsequent interim period through July 16, 1999, there were no
disagreements with KPMG regarding any matters with respect to accounting
principles or practices, financial statement disclosure or audit scope or
procedure, which disagreements, if not resolved to the satisfaction of the
former accountants, would have caused KPMG to make reference to the subject
matter of the disagreement in connection with its report. KPMG's report on
Triton's financial statements did not contain an adverse opinion or disclaimer
of opinion or qualifications or modifications as to uncertainty, audit scope or
accounting principles. Prior to July 16, 1999, Triton had not consulted with
PricewaterhouseCoopers on any items which involved Triton's accounting
principles or the form of an audit opinion to be issued on Triton's financial
statements.
Ratification of the appointment of PricewaterhouseCoopers LLP shall be
effective upon receiving the affirmative vote of the holders of a majority of
the voting power of Triton's Class A common stock present or represented by
proxy and entitled to vote at the Annual Meeting.
A representative of PricewaterhouseCoopers LLP will be present at the
Annual Meeting, will be offered the opportunity to make a statement if the
representative so desires, and will be available to respond to appropriate
questions. In the event the appointment is not ratified, the Board of Directors
will consider the appointment of other independent auditors.
Other Matters
Management does not know of any other matters to be considered at the
Annual Meeting. If any other matters properly come before the meeting, persons
named in the accompanying form of proxy intend to vote thereon in accordance
with their best judgment, and the discretionary authority to do so is included
in the Proxy.
Submission of Stockholder Proposals
The Second Amended and Restated Bylaws of Triton generally require notice
of (i) any proposal to be presented by any stockholder or (ii) the name of any
person to be nominated by any stockholder for election as a director of Triton
at a meeting of the stockholders to be delivered to or mailed and received by
the Secretary of Triton at Triton's principal executive offices, 1100 Cassatt
Road, Berwyn, Pennsylvania 19312. Notice must be received by the Secretary not
less than 60 or more than 90 days prior to the date of the annual meeting.
Accordingly, failure by a stockholder to act in compliance with the notice
provisions will mean that the stockholder will not be able to nominate directors
or propose new business.
Any stockholders who intend to present proposals at the 2001 Annual Meeting
of Stockholders, and who wish to have such proposals included in Triton's Proxy
Statement for the 2001 Annual Meeting, must ensure that
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such proposals are received by the Corporate Secretary of Triton not later than
December 10, 2000. Such proposals must meet the requirements set forth in the
rules and regulations of the Securities and Exchange Commission in order to be
eligible for inclusion in Triton's 2001 proxy materials.
By Order of the Board of Directors,
/s/ David D. Clark
David D. Clark
Corporate Secretary
Berwyn, Pennsylvania
April 7, 2000
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PROXY
TRITON PCS HOLDINGS, INC.
1100 Cassatt Road
Berwyn, PA 19312
Proxy for Annual Meeting of Stockholders
Solicited on Behalf of the Board of Directors
The undersigned stockholder of Triton PCS Holdings, Inc., a Delaware corporation
(the "Company"), hereby appoints David Clark, Scott Anderson and Arnold Chavkin,
or any of them, with full power of substitution in each of them, to cast on
behalf of the undersigned all votes that the undersigned is entitled to cast at
the Annual Meeting of Stockholders of the Company to be held on Wednesday, May
10, 2000, at 2:00 p.m., local time, and any adjournment or postponement thereof,
and otherwise to represent the undersigned at the meeting with all powers
possessed by the undersigned if personally present at the meeting. The
undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and of the accompanying Proxy Statement and revokes any proxy
heretofore given with respect to such meeting.
The votes entitled to be cast by the undersigned will be cast as instructed on
the reverse side. If this proxy is executed but no instruction is given, the
votes entitled to be cast by the undersigned will be cast "FOR" each of the
nominees for Class I Director and Independent Auditor, respectively, as
described in the Proxy Statement and in the discretion of the proxy holder on
any other matter that may properly come before the meeting or any adjournment or
postponement thereof.
- --------------- ---------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- --------------- ---------------
<PAGE>
<TABLE>
<S> <C>
Please mark
[X] votes as in
this example.
1. ELECTION OF TWO CLASS I DIRECTORS 2. ELECTION OF INDEPENDENT FOR AGAINST ABSTAIN
Nominees: AUDITORS [_] [_] [_]
(01) Scott Anderson (02) Arnold Chavkin Nominee:
PricewaterhouseCoopers LLP
FOR WITHHELD
ALL [_] [_] FROM ALL
NOMINEES NOMINEES
Any other matters which may properly come before the meeting or
any adjournment or postponement thereof in the discretion of the
Proxy Holder.
[_] ______________________________________
For all nominees except as noted above
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
Note: Please sign as name appears hereon. Joint owners should
----
each sign. When signing as attorney, executor, administrator,
trustee, guardian or officer, please give full title under
signature.
Signature:______________________ Date:_____________ Signature:____________________________ Date:______________________
</TABLE>
