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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (Fee Required)
For the fiscal year ended December 31, 1997 or
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from to
Commission file number 1-8309.
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PRICE COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
New York 13-2991700
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification Number)
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45 Rockefeller Plaza, 10020
New York, New York (Zip Code)
(Address of principal executive offices)
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Registrant's telephone number, including area code (212) 757-5600
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock, par value $.01 per share American Stock Exchange
Securities registered pursuant to Boston Stock Exchange
Section 12(g) of the Act: None Chicago Stock Exchange
Pacific Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to the
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to the Form 10-K. [X]
AGGREGATE MARKET VALUE OF THE VOTING STOCK
HELD BY NONAFFILIATES OF THE COMPANY
Aggregate market value of the Common Stock held by non-affiliates of the
Company, based on the last sale price on the American Stock Exchange ("AMEX") on
March 31, 1998 ($12.80 as reported in The Wall Street Journal): approximately
$73.1 million.
The number of shares outstanding of the Company's common stock as of March
31, 1998 was 8,909,686.
DOCUMENTS INCORPORATED BY REFERENCE
None
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE
OFFICERS OF THE COMPANY
------------------------
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
directors and executive officers of the Company and certain executive officers
of Price Communications Wireless, Inc. ("PCW").
NAME AGE OFFICE
- ----------------------- ---- -------------------------------------------------
Robert Price.......... 65 Director, President, Chief Executive Officer and
Treasurer
Kim I. Pressman....... 41 Executive Vice President, Secretary and
Assistant Treasurer
George H. Cadgene..... 79 Director
Robert F. Ellsworth... 71 Director
William J. Ryan....... 66 Chairman of the Board of PCW(1)
M. Wayne Wisehart..... 52 President and Chief Executive Officer of PCW(1)
__________
(1) The positions of Messrs. Ryan and Wisehart were effective April 1, 1998.
Prior to their promotions to such positions, Mr. Ryan served as President
and Chief Executive Officer of PCW and Mr. Wisehart served as Executive
Vice President, Treasurer and Chief Financial Officer of PCW.
The following is a biographical summary of the experience of the
executive officers and directors of the Company, and the executive officers of
PCW named above (each of whom served as an executive officer and director of
Palmer prior to its acquisition by PCW).
Robert Price has served concurrently as a Director and the Chief
Executive Officer, President and Treasurer of PCC since 1979, and has been a
Director of Holdings and PCW since 1997. Mr. Price has been a Director of
PriCellular since 1990. Mr. Price was the President and Assistant Treasurer of
PriCellular from 1990 until May 1997 and has served as Chairman of PriCellular
since May 1997. Mr. Price, an attorney, is a former General Partner of Lazard
Freres & Co. He has served as an Assistant United States Attorney, practiced
law in New York and served as Deputy Mayor of New York City. In the early
sixties, Mr. Price served as President and Director of Atlantic States
Industries, a corporation owning weekly newspapers and four radio stations.
After leaving public office, Mr. Price became Executive Vice President of The
Dreyfus Corporation and an Investment Officer of The Dreyfus Fund. In 1972 he
joined Lazard Freres & Co. Mr. Price has served as a Director of Holly Sugar
Corporation, Atlantic States Industries, The Dreyfus Corporation, Graphic
Scanning Corp. and Lane Bryant, Inc., and is currently a member of The Council
on Foreign Relations. Mr. Price serves as the Representative of the Majority
Leader and President Pro Tem of the New York Senate and as a member of the Board
of Directors of the Municipal Assistance Corporation for the City of New York.
Mr. Price is also a Director and president of TLM Corporation.
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Kim I. Pressman, a certified public accountant, is a graduate of
Indiana University and holds an M.B.A. from New York University. Before assuming
her present office as Executive Vice President and Secretary in October 1994 (in
which she served until August 1997 and again from February 1998 to the
present), Ms. Pressman was Vice President and Treasurer of the Company from
November 1987 to December 1989, and Senior Vice President of the Company from
January 1990 to September 1994. She was also Secretary of the Company from July
1989 to February 1990. Ms. Pressman was Vice President--Broadcasting and Vice
President, Controller, and Assistant Treasurer of the Company from 1984 to
October 1987. Prior to joining the Company in 1984, Ms. Pressman was employed
for three years by Peat, Marwick, Mitchell & Co., a national certified public
accounting firm, and for more than three years thereafter was Supervisor,
Accounting Policies for International Paper Company and then Manager, Accounting
Operations for Corinthian Broadcasting of Dun & Bradstreet Company, a large
group owner of broadcasting stations. Ms. Pressman is a Director, Vice
President, Treasurer and Secretary of TLM Corporation, and a Director, Vice
President and Secretary of PriCellular Corporation.
George H. Cadgene, an engineer by training, is a private investor and
has been a director of the Company since 1981. His former occupational
affiliations include Givaudan Corporation, Trubek Laboratories and International
Flavors and Fragrances, where he served as Vice President for Aroma Chemical
Sales. Mr. Cadgene has served as a Director of Highland Capital Corporation and
Intarome, Inc. He has also served as President of the Essential Oil Association
from 1967 to 1968 and as President of the Drug, Chemical and Allied Trade
Association from 1969 to 1971.
Robert F. Ellsworth has been a director of the Company since 1981. He
is President of Robert Ellsworth & Co., Inc., Washington, D.C., a private
investment firm and Managing Director of The Hamilton Group, LLC, a private
venture group. From 1974 to 1977 he served as an Assistant Secretary and then
Deputy Secretary of Defense. He was a General Partner of Lazard Freres & Co.
from 1971 to 1974, and served in the United States House of Representatives from
1961 to 1967. His professional affiliations include the International Institute
for Strategic Studies, London; Atlantic Council of the United States,
Washington, D.C.; The Council on Foreign Relations, New York; and the American
Council on Germany, New York.
William J. Ryan, Chairman of the Board of PCW since April 1, 1998,
served as Chief Executive Officer and President of Palmer from 1984 until its
acquisition by PCW on October 6, 1997, and served in such capacities with PCW
until April 1, 1998. Mr. Ryan was Chief Operating Officer and President of
Palmer from 1982 to 1984. Mr. Ryan has over 40 years of communications and
telecommunications experience. He joined Palmer in 1970 following that
company's acquisition of certain radio and cable properties which Mr. Ryan had
partially owned and operated since 1955. In his capacity as Chief Executive
Officer, Mr. Ryan has successfully led the Company through 18 acquisitions of
cellular telephone systems. Mr. Ryan is a director of the Cellular
Telecommunications Industry Association, the founding chairman of Cable
Television Advertising Bureau, Inc. and a former president of the Florida Cable
Association, the Florida Broadcasters Association and the Southern Cable
Association.
M. Wayne Wisehart, President and Chief Executive Officer of PCW since
April 1, 1998, served as Chief Financial Officer of Palmer from 1982 until its
acquisition by PCW on October 6, 1997, and served in such capacity with PCW
until April 1, 1998. He was promoted to Treasurer of Palmer in 1983 and to Vice
President in 1987. Mr. Wisehart has over 15 years of communications and
telecommunications experience. In his capacity as Chief Financial Officer of
Palmer, he was instrumental in the financial management and direction of the
Company. Prior to joining Palmer, Mr.
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Wisehart served as Treasurer of the Des Moines Register & Tribune Company of Des
Moines, Iowa, for approximately five years. He began his career in 1972 with
Peat, Marwick, Mitchell & Co. in St. Louis, Missouri, where he became a
Certified Public Accountant. Mr. Wisehart then served as a tax specialist for
three years with General Dynamics Corporation in St. Louis, Missouri.
ITEM 11. EXECUTIVE COMPENSATION
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DIRECTOR COMPENSATION
Directors of the Company are compensated for their reasonable travel
and related expenses in attending in-person Board of Directors or committee
meetings. Directors who are not officers or employees of the Company receive
fees of $25,000 per annum, and also received a bonus of $15,000 for services
during 1997 due to the significant demands made on such directors during the
year.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning
the compensation paid to the executive officers of the Company for the three
years ended December 31, 1997 and compensation paid to the named executive
officers of PCW for the period from and after its acquisition of Palmer on
October 6, 1997.
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
----------------- --------------
SECURITIES
NAME AND PRINCIPAL UNDERLYING ALL OTHER
POSITION YEAR SALARY ($) BONUS($) OPTIONS(2) COMPENSATION
- --------------------------- ------- ---------- --------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Robert Price, 1997 $375,000 $564,300 97,656
President, Chief Executive 1996 $349,900 $425,000 0
Officer and Treasurer 1995 $306,300 $415,000 0
Kim I. Pressman, 1997 $ 90,900 $150,000 97,656 155,000 (3)
Executive Vice President and 1996 $125,000 $107,500 42,969 --
Secretary 1995 $100,000 $120,000 93,262 --
William J. Ryan, 1997 $119,178 $ 0 195,313
Chairman of the Board of
PCW(1)
M. Wayne Wisehart, 1997 $ 71,507 $ 0 146,406
President and Chief
Executive Officer of PCW(1)
</TABLE>
______________________
(1) Prior to their promotions to such positions effective April 1, 1998, Mr.
Ryan served as President and Chief Executive Officer of PCW and Mr.
Wisehart served as Executive Vice President, Treasurer and Chief Financial
Officer of PCW.
(2) Gives effect to five-for-four stock splits of the Company's Common Stock,
in the form of stock dividends, paid on December 23, 1997, April 1, 1998
and April 30, 1998.
(3) Consists of amounts paid under former employment agreement.
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STOCK OPTIONS
The following table reflects the number of options for shares of the
Company's Common Stock subject to options granted under the Company's 1992 Long
Term Incentive Plan (the "LTIP") during the year ended December 31, 1997 to
executive officers of the Company and the named executive officers of PCW.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
POTENTIAL REALIZED
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATED FOR
OPTIONS EMPLOYEES IN EXERCISE OPTION TERM (3)
----------------------
NAME GRANTED(1)(2) FISCAL YEAR PRICE(2) EXPIRATION DATE 5% 10%
- -------------------- ---------- ------------ -------- --------------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert Price 97,656 6.3% $5.37 12/09 372,510 971,798
Kim I. Pressman 97,656 6.3% 5.37 12/09 372,510 971,798
William J. Ryan(4) 195,313 12.6% 4.67 10/09 647,908 1,692,249
M. Wayne Wisehart 146,406 9.4% 4.67 10/09 485,670 1,267,006
</TABLE>
_____________________
(1) Upon the occurrence of a "change in control" of the Company, as defined in
the LTIP, the Company's Stock Option and Compensation Committee may, in its
discretion, provide for the purchase of any then outstanding options by the
Company or a designated subsidiary for an amount of cash equal to the
excess of (i) the product of the "change in control price" (as defined
below) and the number of shares of the Company's Common Stock subject to
the options over (ii) the aggregate exercise price of such options. The
change in control price means the higher of (1) the higher price per share
of the Company's Common Stock paid in any transaction related to a change
in control of PCC and (ii) the highest "fair market value," as defined in
the LTIP, of the Company's Common Stock at any time during the 60-day
period preceding the change in control.
(2) Number of options and exercise price give effect to five-for-four stock
splits, in the form of stock dividends, paid on December 23, 1997, April 1,
1998 and April 30, 1998.
(3) In order to realize these potential values, the closing price of the
Company's Common Stock on October 7, 2009 would have to be $7.99 and $13.32
per share and on December 4, 2009 would have to be $9.18 and $15.32 per
share, respectively.
(4) Mr. Ryan's options terminated unexercised on April 1, 1998. See
"Employment Agreements".
The following table reflects the number of stock options held by the
executive officers of the Company and the named executive officers of PCW on
December 31, 1997.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
SHARES NUMBER OF SECURITIES VALUE OF UNEXERCISED
ACQUIRED VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT FISCAL
ON EXERCISE REALIZED OPTIONS AT FISCAL YEAR END (1) YEAR END
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(#)(1) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert Price 972,563 $3,062,500 -- 97,656 $ 9,765
Kim I. Pressman 55,860 146,450 95,703 97,656 $147,406 9,765
William J. Ryan(2) -- -- 195,313 154,204
M. Wayne Wisehart -- -- 146,406 118,589
</TABLE>
___________________________
(1) Numbers of shares gives effect to five-for-four stock splits, in the form
of stock dividends, paid on December 23, 1997, April 1, 1998 and April 30,
1998.
(2) Mr. Ryan's options terminated unexercised on April 1, 1998. See
"Employment Agreements".
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Robert Price, the
President of the Company, for a term ending October 6, 2000, subject to
extension. The agreement provides for base compensation at the rate of $375,000
per annum, subject to certain cost of living increases, and such performance
bonuses as may be determined by the Board of Directors in its sole discretion.
Under the agreement, if the Company terminates Mr. Price's employment for Cause
(as defined therein), or if Mr. Price terminates his employment at his option,
Mr. Price will be entitled to a severance payment from the Company equal to one
year's base salary. If the Company terminates Mr. Price's employment without
Cause, or if Mr. Price terminates his employment for Good Reason (as defined in
the employment agreement), Mr. Price will be entitled to a severance payment
from the Company equal to three years' base salary. Good Reason is defined to
include the occurrence of a Change in Control (as defined in the agreement).
In 1997, PCW entered into an employment agreement with Mr. Ryan (the
"Ryan Agreement") for a term ending on December 31, 1999. The base salary rate
per annum under the Ryan Agreement for 1997 was $500,000, plus an annual bonus
based upon PCW's financial performance commencing in 1998. In connection with
Mr. Ryan's desire to serve as Chairman of the Board of the Company commencing
effective April 1, 1998, Mr. Ryan and PCW agreed that (i) Mr. Ryan will serve as
Chairman of the Board until December 31, 1998; (ii) in lieu of the other
compensation and benefits under the Ryan Agreement, Mr. Ryan received on April
1, 1998 a single lump sum payment of $875,000 and will participate in the
Company's Bonus Plan for 1998; and (iii) all options for the Company's Common
Stock held by Mr. Ryan have been terminated.
In 1997, PCW entered into an employment agreement with Mr. Wisehart
(the "Wisehart Agreement") for an initial term ending on December 31, 1999. The
Wisehart Agreement has an automatic one-year renewal on each anniversary date
thereof. The base salary rate per annum under the Wisehart Agreement is
$300,000, plus an annual bonus based upon PCW's financial performance commencing
in 1998. The Wisehart Agreement specifies that if Mr. Wisehart is terminated by
PCW
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directors and executive officers of the Company to file with the SEC initial
reports of ownership and reports of changes in ownership of securities of the
Company. Directors and executive officers are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms that they file. To
the Company's knowledge, based solely on review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, all Section 16(a) filing requirements applicable to directors and
executive officers were timely satisfied during the fiscal year ended December
31, 1997.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
------------------------------------------------------------
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock and Series A and Series B
Preferred Stock as of April 30, 1998 by (i) each person or group known to the
Company who beneficially owns more than five percent of the Company's Common
Stock and (ii) all directors and executive officers of the Company and the named
executive officers of PCW as a group:
<TABLE>
<CAPTION>
NAME OF BENEFICIAL NUMBER OF PERCENTAGE
OWNER CLASS OF STOCK SHARES (1) OF CLASS
- -------------------- ---------------------------- ------------ -----------
<S> <C> <C> <C>
Robert Price.............. Common Stock 2,142,266 19.4%
Series A Preferred Stock (2) 728,133 100%
Series B Preferred Stock (2) 364,066 100%
George H. Cadgene......... Common Stock 4,312(3) (4)
Robert F. Ellsworth....... Common Stock 15 (4)
Kim I. Pressman........... Common Stock 20(5) (4)
William J. Ryan........... -- -- --
M. Wayne Wisehart......... -- -- --
All directors and execu-
tive officers and named
executive officers of PCW
as a group (6 persons).... Common Stock 2,146,613 19.5%
Series A Preferred Stock 728,133 100%
Series B Preferred Stock 364,066 100%
</TABLE>
________________________
(1) Under the applicable rules of the Securities and Exchange Commission, each
person or entity is deemed to be a beneficial owner with the power to vote
and direct the disposition of these shares. Information as to number of
shares of the Company's Common Stock and voting power of Series A and B
Preferred Stock gives effect to five-for-four stock splits of the Company's
Common Stock, in form of stock dividend payable on December 23, 1997, April
1, 1998 and April 30, 1998.
(2) Each share of Series A Preferred Stock and Series B Preferred Stock votes
with the Common Stock on the basis of 1.953125 votes and .976562 votes,
respectively, for each vote cast by a share of the Common Stock.
(3) Includes 648 shares held by Mr. Cadgene's wife, as to which Mr. Cadgene
disclaims beneficial ownership.
(4) Less than 1%
(5) Held in self-directed IRA account.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has had a long-standing program of repurchasing shares of
its Common Stock at times when it believes such shares represent a good long
term investment for the Company and an appropriate use of its current cash
resources. On February 10, 1997, the Company purchased 1,013,000 shares of its
Common Stock (the equivalent of 1,978,515 shares after giving effect to the
Company's stock splits payable in December 1997 and April 1998) from Fir Tree
Partners for an aggregate purchase price of $10.6 million. From time to time,
the Company engaged in discussions with Franklin Advisers, Inc. ("Franklin
Funds") concerning the purchase of 2,291,953 (the equivalent of 4,476,470 shares
after giving effect to the aforesaid stock splits) shares of the Company's
Common Stock held by the Franklin Funds but the Company was unable to negotiate
a purchase from the Franklin Funds directly. In June 1997, NatWest Capital
Markets Limited ("NatWest") approached the Company with a proposal for a
transaction, negotiated in June and July, 1997, in which: (i) NatWest would
purchase the shares owned by the Franklin Funds directly from the Franklin
Funds, (ii) NatWest would agree to act as initial purchaser in the offering of
the Old Discount Notes by Holdings (the "Cellular Holdings Offering") (See
"Business -- The Acquisition"), (iii) the Company would issue to NatWest 1,129
units (the "PIK Units") of PIK Preferred Stock and warrants ("PIK Warrants") in
exchange for the shares of the Company's Common Stock acquired from the Franklin
Funds and $3.0 million in fees payable to NatWest in connection with the
Cellular Holdings Offering and (iv) the PIK Units would be redeemed at a
redemption price equal to the liquidation value of the PIK Preferred Stock plus
dividends accrued at the rate of 15% per annum out of the proceeds of the
Cellular Holdings Offering following the consummation of the Company Merger
(which redemption occurred in October 1997). Each PIK Unit consisted of 1,000
shares of PIK Preferred Stock, each with a liquidation value of $25.00 per
share, and PIK Warrants to purchase 515.6 shares of the Company's Common Stock
(the equivalent of 1007 shares after giving effect to the aforesaid stock
splits) per Unit (or an aggregate of 582,112 shares of the Company's Common
Stock; the equivalent of 1,136,937 shares after giving effect to the aforesaid
stock splits) at an exercise price of $0.01 per share.
SIGNATURES
Pursuant to the requirements of Sections 13 and 15(d) of the
Securities and Exchange Act of 1934, the Company has duly caused this amended
report on Form 10-K/A to be signed on its behalf by the undersigned, thereunto
duly authorized.
PRICE COMMUNICATIONS CORPORATION
/s/ Robert Price
By:_____________________________________
Robert Price,
President
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