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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
Amendment No. 2
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, 1998 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
Boston Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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. |_|
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 2, 1999 ($10.25 as reported in the Wall Street Journal): approximately
162.0 million.
The number of shares outstanding of the Company's common stock as of March 2,
1999 was 27,096,846
DOCUMENTS INCORPORATED BY REFERENCE:
None.
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<PAGE>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information with respect to the
directors and executive officers of the Company and certain executive officers
of PCW:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
NAME AGE OFFICE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Robert Price....................... 66 Director, President, Chief Executive
Officer and Treasurer
Kim I. Pressman.................... 42 Executive Vice President, Chief Financial
Officer, Secretary and Assistant Treasurer
George H. Cadgene.................. 80 Director
Robert F. Ellsworth................ 72 Director
Dennis W. Stone.................... 40 President of PCW
Michael N. Bruno................... 30 Executive Vice President of PCW
- ----------------------------------------------------------------------------------------------
</TABLE>
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.
Robert Price has served concurrently as a Director and the Chief Executive
Officer and President of the Company since 1979, has served as Treasurer of the
Company since 1990, and has been a Director of Price Communications Wireless
Holdings, Inc. ("Holdings") and PCW since 1997. Mr. Price was a Director of
PriCellular Corporation ("PriCellular") from 1990 until it was acquired by
American Cellular Corporation in June 1998. Mr. Price was the President and
Assistant Treasurer of PriCellular from 1990 until May 1997 and served as
Chairman of PriCellular from May 1997 until June 1998. 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.
Kim I. Pressman, a certified public accountant, is a graduate of Indiana
University and holds an M.B.A. from New York University. Ms. Pressman was
elected Chief Financial Officer in May 1998. Before assuming her other present
offices 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. Until June 1998, she served as a Director, Vice
President and Secretary of PriCellular for more than the past five years.
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
<PAGE>
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.
Dennis Stone has been employed by Price Communications Wireless since
August, 1998 First as Vice President and General Manager of the Company's
Columbus, GA MSA. He was promoted to President in November, 1998. Prior to that,
he was employed by PriCellular Corporation since July, 1991, most recently as
Regional General Manager in that Company's New York cluster. During his tenure
with PriCellular, Dennis has held increasingly responsible positions as General
Manager of the New York and Alabama properties. Mr. Stone will reside in
Atlanta, Georgia with his wife and daughter. He attended the University of Texas
at Tyler.
Michael Bruno joined Price Communications Wireless in September, 1998 as
Corporate Consultant and was promoted to Executive Vice President in November,
1998. Previously, he was employed by PriCellular Corporation as Vice President
and General Manager of certain Ohio and New York properties from 1995 to 1998.
From 1993 to 1995, he was a Sales Manager for Sterling Cellular Corporation in
its Ohio-9 RSA. He attended the State Univeristy of New York at Albany where he
received a Bachelor of Science degree in Business Administration.
ITEM 11. EXECUTIVE COMPENSATION
DIRECTORS COMPENSATION
Directors are compensated for their reasonable travel and related expenses
in attending in-person Board of Directors or committee meetings, and directors
who are not officers or employees of the Company receive fees of $25,000 per
annum, and also received a bonus of $15,000 for services during 1998 and 1997
due to the significant demands made on such directors during the year.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning the
compensation paid to the executive officers of the Company for the three years
ended December 31, 1998 and compensation paid to the named executive officers of
PCW for the period from and after its acquisition of Palmer on October 6, 1997.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
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SECURITIES
NAME AND UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS(3) COMPENSATION
<S> <C> <C> <C> <C> <C>
Robert Price,
Chief Executive Officer and Treasurer 1998 $375,000 $500,000 (1) 0
1997 $375,000 $500,000 (1) 244,140
1996 $349,900 $564,300 0
Kim I. Pressman 1998 $197,000 $50,000 (1) 17,500
Vice President, Chief Financial Officer 1997 $90,900 $0 244,140 $155,000 (4)
and Secretary 1996 $125,000 $150,000 42,969 --
--
William Ryan, Chairman - PCW (2) 1998 $134,616 $0 0 $918,453 (4)
1997 $119,178 $0 488,282 --
M. Wayne Wisehart, President and 1998 $281,877 $0 0 $1,656,343 (4)
Chief Executive Officer of PCW (2) 1997 $71,507 $0 0 --
</TABLE>
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(1) Paid in Common Stock of the Company.
(2) 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.
<PAGE>
(3) 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,
April 30, 1998, and January 23, 1999, and a two-for-one stock split
payable August 31, 1998.
(4) Consists primarily of amounts paid under former employment agreement.
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, 1998 to
executive officers of the Company and the named executive officers of PCW.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF POTENTIAL REALIZED VALUE
SECURITIES % OF TOTAL AT ASSUMED ANNUAL RATES
UNDERLYING OPTIONS GRANTED OF STOCK PRICE
OPTIONS GRANTED TO EMPLOYEES IN EXERCISE APPRECIATION FOR
NAME (1)(2) FISCAL YEAR PRICE (2) EXPIRATION DATE OPTION TERM (3)
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5% 10%
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<S> <C> <C> <C> <C> <C> <C>
Kim I. Pressman 17,500 25.9% $5.20 05/08 57,225 145,075
</TABLE>
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(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 highest price per
share of the Company's Common Stock paid in any transaction related to a
change in control of the Company 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. (No material change in
the foregoing "change in control" provisions will be effected by the
proposed amendments to the LTIP described under Proposal 2 below.)
(2) Number of options and exercise price give effect to a two-for-one stock
split and a five-for-four stock split, in the form of stock dividends,
paid on August 31, 1998 and January 25, 1999, respectively.
(3) In order to realize these potential values, the closing price of the
Company's Common Stock on May 4, 2008 would have to be $8.47 and $13.49
per share, respectively.
The following table reflects the number of stock options held by the
executive officers of the Company and the named executive officers of PCW on
December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-MONEY OPTION
SHARES VALUE AT FISCAL YEAR END(1) AT FISCAL YEAR END
ACQUIRED ON REALIZED -------------------------------------------------------------------------
NAME EXERCISE (1) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert Price 244,141 $2,050,784 -
Kim I. Pressman 239,260 244,141 17,500 $2,050,784 9,765
</TABLE>
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(1) Numbers of shares gives effect to five-for-four stock splits, in the form
of stock dividends, paid on April 1, 1998, April 30, 1998, January 25,
1999 and a two-for-one stock split paid on August 31, 1998.
<PAGE>
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. Prices' 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).
ITEM 12. SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock and Preferred Stock as of
March 31, 1999 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 as a group:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
NAME OF NUMBER OF
BENEFICIAL OWNER CLASS OF STOCK SHARES(1)(4) PERCENTAGE OF CLASS
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert Price......... Common Stock 6,180,051 (5) 21.6%
Series A Preferred
Stock (2) 728,133 100%
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George H. Cadgene.... Common Stock 10,780 (3)
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Robert F. Ellsworth.. Common Stock 5,125 (3)
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Kim I. Pressman...... Common Stock 445,281 1.6%
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Dennis W. Stone Common Stock 1,375 (3)
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Michael N. Bruno..... Common Stock 2,000 (3)
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All directors and execu-
tive officers and named
executive officers of
PCW as a group (6
persons)............. Common Stock 6,644,612 23.2%
Series A Preferred
Stock 728,133 100%
Dimensional Fund
Advisors, Inc........ Common Stock 1,695,144 6.3%
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</TABLE>
(1) Under the applicable rules of the Securities and Exchange Commission (the
"SEC"), 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
Preferred Stock gives effect to five-for-four stock splits of the
Company's Common Stock, in the form of stock dividends payable on December
23, 1997, April 1, 1998, April 30, 1998 and January 25, 1999 and a
two-for-one stock split on August 31, 1998.
(2) Each share of Series A Preferred Stock votes with the Common Stock on the
basis of 4.9 votes for each vote cast by a share of the Common Stock.
(3) Less than 1%.
(4) Does not include the five-for-four stock split payable May 4, 1999 to
holders of record on April 21, 1999 and does not include approximately 2
million warrants which are convertible into 2 million shares of the
Company's common stock. The warrants were issued in connection with the
13 1/2% Senior Secured Discount Notes issued in August 1997. The warrants
expire on August 2007.
(5) Adjusted to reflect 1,698,193 shares of the company's common stock
issuable upon conversion on March 31 of 3,555,337 shares (stock split
affected) of the Company's Series A Preferred Stock.
(6) Based on 13-G filing on February 12, 1999.
<PAGE>
ITEM 13. RELATED PARTY TRANSACTIONS
On May 21, 1997, the Board of Directors of the Company authorized the sale
to Mr. Price of 364,066 shares of the Company's Series B Preferred Stock. The
purpose of such shares was to provide Mr. Price with incentive to maximize
shareholder value by permitting him to receive value from such shares if, among
other things, the trading price of the Company's Common Stock during any ten
consecutive trading days exceeded $15.00 per share (the equivalent of $7.68 per
share after giving effect to the aforesaid stock splits). The trading price of
the Company's Common Stock on May 21, 1997 was $9.375 per share (the equivalent
of $4.80 per share after giving effect to such stock splits). On June 11, 1998,
Mr. Price notified the Company that he was considering the exercise of his right
to have redeemed by the Company such shares of Series B Preferred Stock. The
trading price of such Common Stock on June 11, 1998 was $12. Under the
provisions of the Series B Preferred Stock as originally approved by the Board
of Directors, Mr. Price would have received a cash payment of $5.0 million in
respect of such redemption. In order to avoid a significant cash payment to Mr.
Price at a time when the Company had substantial indebtedness, Mr. Price and the
Board agreed that in place of such cash payment the Company would issue 411,423
shares of its Common Stock to Mr. Price in exchange for his shares of Series B
Preferred Stock, valuing such shares of Common Stock at $12.16 for such purpose
(the average trading price of such Common Stock during the ten consecutive
trading days ended June 23, 1998).
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
By: /s/ Robert Price
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Robert Price, President
