<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[_] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
MOBILE TELECOMMUNICATION TECHNOLOGIES CORP.
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange ActRule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
MOBILE TELECOMMUNICATION TECHNOLOGIES CORP.
-----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 30, 1996
-----------------------------
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of Mobile
Telecommunication Technologies Corp., a Delaware corporation (the "Company"),
will be held at the Capital Club, 125 South Congress Street, Capital Towers
Building, 19th Floor, Jackson, Mississippi 39201 on May 30, 1996 at 3:00 P.M.,
Central Daylight Savings Time, for the following purposes:
(1) To elect two Directors to serve for a three-year term expiring at the 1999
Annual Meeting of Stockholders;
(2) To consider and take action upon a proposal to amend the Company's
Restated Certificate of Incorporation to increase the number of authorized
shares of common stock, par value $.01 per share ("Common Stock"), from 75
million shares to 100 million shares; and
(3) To consider and take action upon any other matters that may properly come
before the 1996 Annual Meeting or any adjournment thereof.
Any action may be taken on any matters presented at the 1996 Annual Meeting on
the date specified above or on any date or dates to which said meeting may be
adjourned. Only holders of record of the Company's Common Stock as of the close
of business on April 22, 1996 are entitled to notice of and to vote at the 1996
Annual Meeting or any adjournment thereof. Stockholders who do not attend the
meeting in person are urged to mark, date, sign and return the enclosed proxy
card in the return envelope to which no postage need be affixed.
By Order of the Board of Directors
/s/ Leonard G. Kriss
--------------------------
Leonard G. Kriss
Secretary
Jackson, Mississippi
April 30, 1996
IF YOU CANNOT BE PRESENT IN PERSON, PLEASE MARK, DATE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY.
<PAGE>
MOBILE TELECOMMUNICATION TECHNOLOGIES CORP.
200 SOUTH LAMAR STREET
MTEL CENTRE, SOUTH BUILDING
JACKSON, MISSISSIPPI 39201
-----------------------------
PROXY STATEMENT
-----------------------------
The enclosed proxy is solicited by the Board of Directors of Mobile
Telecommunication Technologies Corp. (the "Company") in connection with the 1996
Annual Meeting of Stockholders to be held at the Capital Club, 125 South
Congress Street, Capital Towers Building, 19th Floor, Jackson, Mississippi 39201
on May 30, 1996 at 3:00 P.M., Central Daylight Savings Time, or any adjournment
thereof. This Proxy Statement and the enclosed proxy card were first sent or
given to stockholders of the Company on or about April 30, 1996.
Holders of record of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), as of the close of business on April 26, 1996 will be entitled
to vote at the 1996 Annual Meeting or any adjournment thereof, and each holder
of record of Common Stock on such date will be entitled to one vote for each
share held. As of April 22, 1996, there were __________ shares of the Company's
Common Stock outstanding.
Shares of Common Stock cannot be voted at the 1996 Annual Meeting unless the
beneficial owner is present or represented by proxy. Any stockholder giving a
proxy may revoke it at any time before it is voted by giving written notice of
revocation to the Company, c/o Leonard G. Kriss, Senior Vice President, General
Counsel and Secretary, at the address shown above, or by executing and
delivering prior to the 1996 Annual Meeting a proxy bearing a later date. Any
stockholder who attends the 1996 Annual Meeting may revoke the proxy by voting
his or her shares of Common Stock in person.
All properly executed proxies, unless previously revoked, will be voted at the
1996 Annual Meeting or any adjournment thereof in accordance with the directions
given. With respect to the election of two Directors to serve until the 1999
Annual Meeting, stockholders of the Company voting by proxy may vote in favor of
both nominees, may withhold their vote for both nominees or may withhold their
vote as to either nominee. With respect to the proposal to amend the Company's
Restated Certificate of Incorportion to increase the number of authorized shares
of Common Stock, stockholders may vote in favor or against such proposal or may
abstain from voting with respect to such proposal. If no specific instructions
are given, shares of Common Stock represented by a properly executed proxy will
be voted FOR the election of both nominees for election as Directors, FOR the
proposal to amend the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock and in the discretion
of the persons named therein as proxies on all other matters that may be brought
before the 1996 Annual Meeting or any adjournment thereof.
A majority of the outstanding shares of Common Stock must be represented in
person or by proxy at the 1996 Annual Meeting in order to constitute a quorum
for the transaction of business. Abstentions and non-votes will be counted for
purposes of determining the existence of a quorum at the 1996 Annual Meeting.
The two nominees for election as Directors will be elected by the affirmative
vote of a plurality of the shares of Common Stock present in person or by proxy
and actually voting at the 1996 Annual Meeting. The affirmative vote of a
majority of the shares of Common Stock issued and outstanding as of the record
date for the 1996 Annual Meeting is required for the adoption of the proposal to
amend the Company's Restated Certificate of Incorporation to increase the number
of authorized shares of Common Stock. Abstentions and non-votes will have no
effect on the outcome of the voting to elect the Directors. However, abstentions
and non-votes will have the effect of a vote against the proposal described
above. A non-vote may occur when a nominee holding shares of Common Stock for a
beneficial owner does not vote on a proposal because such nominee does not have
discretionary voting power and has not received instructions from the beneficial
owner.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 1, 1996 certain information with
respect to all stockholders known by the Company to be the beneficial owners of
more than 5% of the Company's Common Stock, the only class of voting securities
outstanding, as well as information with respect to the Company's Common Stock
owned beneficially by each Director of the Company, each Executive Officer named
in the Summary Compensation Table on page 8, and by all Directors and Executive
Officers of the Company as a group. Certain information set forth in the table
is based upon information contained in filings made by such beneficial owners
with the Securities and Exchange Commission (the "Commission").
<TABLE>
<CAPTION>
Name and Address of Amount of Beneficial Approximate
Beneficial Owner Ownership(1) Percent of Class
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
T. Rowe Price Associates, Inc........................ 5,138,117/(2)/ 9.4%
100 E. Pratt Street
Baltimore, MD 21202
John N. Palmer....................................... 1,830,659/(3)/ 3.38%
Haley Barbour........................................ 51,690/(4)/ *
Thomas G. Barksdale.................................. 83,000/(5)/ *
Jai P. Bhagat........................................ 459,838/(6)/ *
Gregory B. Maffei.................................... 5,000 *
R. Faser Triplett.................................... 214,080/(7)/ *
E. Lee Walker........................................ 35,000/(8)/ *
John E. Welsh III.................................... 350,435/(9)/ *
Leonard G. Kriss..................................... 70,000/(10)/ *
M. Bernard Puckett................................... 550,000/(11)/ *
J. Robert Fugate..................................... 165,984/(12)/ *
All Directors and Executive Officers of the Company
as a Group (15 persons)............................. 3,306,135/(13)/ 6.17%
- -------------------------------------------------------------------------------------------------
</TABLE>
* Less than 1%
(1) Under the rules of the Commission, a person is deemed to be a beneficial
owner of a security if such person has or shares the power to vote or direct
the voting of such security or the power to dispose or direct the
disposition of such security. A person is also deemed to be a beneficial
owner of a security if that person has the right to acquire beneficial
ownership within 60 days. Accordingly, more than one person may be deemed
to be a beneficial owner of the same securities. Unless otherwise indicated
by footnote, the named individuals have sole voting and investment power
with respect to the shares of Common Stock beneficially owned.
(2) Includes 541,217 shares of Common Stock issuable upon the conversion of the
Company's $2.25 Cumulative Convertible Exchangeable Preferred Stock, 188,100
shares of Common Stock as to which T. Rowe Price Associates, Inc. has sole
voting power and 4,596,900 shares of Common Stock as to which T. Rowe Price
Associates, Inc. has sole dispositive power. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), T. Rowe Price Associates, Inc. is deemed to be a beneficial
owner of such securities; however, T. Rowe Price Associates, Inc. expressly
disclaims that it is, in fact, the beneficial owner of such securities. The
foregoing information is derived from Amendment No. 1 to a Schedule 13G
dated February 12, 1996 and filed with the Commission on February 13, 1996.
-2-
<PAGE>
(3) Includes 1,275,000 shares of Common Stock obtainable as of March 1, 1996 or
within 60 days thereof by Mr. Palmer upon the exercise of options.
(4) Includes 50,000 shares of Common Stock obtainable as of March 1, 1996 or
within 60 days thereof by Mr. Barbour upon the exercise of options. Also
includes 650 shares of Common Stock held by Mr. Barbour as a custodian for
his children, 100 shares of Common Stock held by Mr. Barbour's wife as to
which Mr. Barbour may be deemed to share voting and dispositive power and
940 shares of Common Stock held by the Barbour & Rodgers Profit Sharing
Trust of which Mr. Barbour is a beneficiary.
(5) Includes 80,000 shares of Common Stock obtainable as of March 1, 1996 or
within 60 days thereof by Mr. Barksdale upon the exercise of options.
(6) Includes 398,338 shares of Common Stock obtainable as of March 1, 1996 or
within 60 days thereof by Mr. Bhagat upon the exercise of options.
(7) Includes 70,000 shares of Common Stock obtainable as of March 1, 1996 or
within 60 days thereof by Dr. Triplett upon the exercise of options. Also
includes 11,448 shares of Common Stock owned by Dr. Triplett's children,
24,132 shares of Common Stock owned by the Mississippi Allergy Clinic, P.A.
Trust and 900 shares of Common Stock held by Dr. Triplett's wife, as to
which Dr. Triplett may be deemed to share voting and dispositive power.
(8) Represents 35,000 shares of Common Stock obtainable as of March 1, 1996 or
within 60 days thereof by Mr. Walker upon the exercise of options.
(9) Includes 435 shares of Common Stock held for Mr. Welsh in the Company's
Section 401(k) Employee Retirement Plan and Trust (the "401(k) Plan") and
350,000 shares of Common Stock obtainable as of March 1, 1996 or within 60
days thereof by Mr. Welsh upon the exercise of options.
(10) Represents 70,000 shares of Common Stock obtainable as of March 1, 1996 or
within 60 days thereof by Mr. Kriss upon the exercise of options.
(11) Represents 550,000 shares of Common Stock obtainable as of March 1, 1996 or
within 60 days thereof by Mr. Puckett upon the exercise of options.
(12) Includes 984 shares of Common Stock held for Mr. Fugate in the Company's
401(k) Plan and 165,000 shares of Common Stock obtainable as of March 1,
1996 or within 60 days thereof by Mr. Fugate upon the exercise of options.
(13) Includes 2,491,253 shares of Common Stock obtainable as of March 1, 1996 or
within 60 days thereof by all current Directors and Executive Officers of
the Company upon the exercise of options. Excludes all shares of Common
Stock beneficially owned by Messrs. Fugate and Puckett who, as of March 1,
1996, were no longer Executive Officers of the Company.
Section 16(a) of the Exchange Act requires the Company's Directors, Executive
Officers and persons who beneficially own more than 10% of the Company's Common
Stock to file with the Commission initial reports of beneficial ownership and
reports of changes in beneficial ownership of such Common Stock. Directors,
Executive Officers and greater than 10% beneficial owners are required by
Commission rules to furnish the Company with copies of all such reports. To the
Company's knowledge, based solely upon a review of the copies of such reports
furnished to the Company and written representations from the Company's
Directors and Executive Officers that no other reports were required, all
Section 16(a) filing requirements applicable to the Company's Directors and
Executive Officers were complied with during the year ended December 31, 1995,
except that Thomas R. Ferguson (Treasurer--2 reports); Masood Garahi (Vice
President Technology--1 report), Elizabeth V. McCullouch (Vice President,
Controller and Assistant Secretary--1 report), and Elizabeth D. Conklyn (Former
Senior Vice President - Human Resources and Organization--1 report)
inadvertently failed to timely file certain reports of changes in beneficial
ownership with respect to the grant of stock options in 1995 pursuant to the
Amended 1990 Plan (as defined below).
-3-
<PAGE>
-4-
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any previous filings
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made by the Company under the Securities Act of 1933, as amended, or the
- ------------------------------------------------------------------------
Exchange Act that might incorporate future filings, including this Proxy
- ------------------------------------------------------------------------
Statement, in whole or in part, the following report and the performance graph
- ------------------------------------------------------------------------------
on page 15 shall not be incorporated by reference into any of such filings.
- ---------------------------------------------------------------------------
The Compensation Committee of the Board of Directors of the Company has
furnished the following report on executive compensation.
OVERVIEW AND OBJECTIVES. The Company's executive compensation program is
administered by the Compensation Committee of the Board of Directors which is
comprised of Mr. Walker and Dr. Triplett, each of whom is a non-employee
Director of the Company. The Compensation Committee has been delegated the
authority by the Board of Directors to make determinations regarding the
compensation of the Company's Executive Officers and to review the compensation
paid to other management personnel. The Compensation Committee has also been
delegated responsibility for administering the Company's 1988 and 1990 Executive
Incentive Plans, as well as the Company's Short-Term Management Incentive Plan
and Long-Term Management Incentive Plan. In discharging its responsibilities
generally and in administering the Company's incentive plans in particular, the
Compensation Committee's overall objectives are to (i) attract and retain the
best possible executive talent, (ii) motivate executives to achieve the
Company's performance goals and strategic objectives and (iii) link management
and stockholder interests through appropriate equity based plans.
COMPENSATION STRUCTURE GENERALLY. The key elements of the Company's executive
compensation program have historically consisted of base salary, annual cash
bonus and stock options. Base salaries were initially determined, and have been
modified, primarily by evaluating the responsibilities of the position held by,
and the experience of, each Executive Officer. The annual base salaries of
certain of the Company's Executive Officers (including those named in the
Summary Compensation Table on page 8) are the subject of employment agreements.
These employment agreements provide for annual cost of living adjustments, in
some cases after fixed increases during the initial years of such employment
agreements. In 1995, the Compensation Committee determined to provide a 14% and
10% increase in the base salary of Messrs. Fugate and Kriss in light of the cost
of living adjustment in that year (which would have been approximately 4.0%). In
1995, the Compensation Committee also amended the employment agreements of
Messrs. Bhagat and Welsh to increase their base salaries in view of the
increased responsibilities of their positions with the Company. See "Employment
Agreements."
Prior to 1993, annual cash bonuses were awarded by the Compensation Committee
as a supplement to base salary based on the Compensation Committee's subjective
assessment of Company and individual performance. Commencing in 1993, annual
cash bonuses, if earned, have generally been awarded to Executive Officers of
the Company and other management personnel of the Company and its subsidiaries
under the Company's Short-Term Management Incentive Plan (the "STIP"). From
time to time, the Compensation Committee may also authorize cash bonuses outside
of the STIP, including cash bonuses for new management personnel and management
personnel who are not selected by the Compensation Committee for participation
in the STIP.
The Compensation Committee believes that equity ownership acquired through
stock-based compensation arrangements is an appropriate method of aligning the
interests of management with the interests of the Company's stockholders. As a
result, stock options have been awarded by the Compensation Committee to a wide
range of personnel in the Company, including Executive Officers, as a means of
attracting and retaining such personnel, rewarding achievement and providing an
incentive for future performance. The 1988 and 1990 Executive Incentive Plans
have been the primary vehicles for awarding stock options. In order to
facilitate the continuation of the Compensation Committee's policy, the 1990
Executive Incentive Plan was amended by the Board of Directors of
-5-
<PAGE>
the Company in March 1995 (the "Amended 1990 Plan") to increase the number of
shares of Common Stock available for awards thereunder from four million to six
million shares and was subsequently approved by the stockholders of the Company
at the 1995 Annual Meeting.
In December 1992, the Board of Directors adopted the Long-Term Management
Incentive Plan (the "LTIP"), which was subsequently approved by the Company's
stockholders at the 1993 Annual Meeting. The LTIP seeks to enhance corporate
performance and, ultimately, stockholder value, by linking compensation for
certain senior management personnel participating in the LTIP to specific
performance criteria. During 1994, as explained in more detail below, the
Compensation Committee undertook a review of the LTIP to determine whether the
LTIP as originally implemented provided the optimum linkage between executive
performance and the enhancement of stockholder value. As a result of this
review, the Compensation Committee revised the performance criteria and adjusted
the stated amount of awards under the LTIP. See "Long-Term Management Incentive
Plan."
The Compensation Committee is mindful of the requirements of section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"), which limits the
deductibility of certain executive compensation in excess of $1 million, but is
also cognizant of the need to have the freedom to exercise its judgment and
discretion based on the facts and circumstances then existing so that
compensation decisions are in the best interests of the Company and are fair to
the affected executives. Since some types of compensation payments and their
deductibility depend upon the timing of action by the executive (such as the
exercise of stock options) and because interpretations of and changes in the tax
laws as well as other factors beyond the Compensation Committee's control may
also affect the deductibility of compensation, in certain instances a portion of
the compensation paid by the Company may not meet the deductibility requirements
of section 162(m).
SHORT-TERM MANAGEMENT INCENTIVE PLAN. The STIP provides for the payment of
annual cash bonuses to Executive Officers of the Company and other management
personnel of the Company and its subsidiaries selected for participation by the
Compensation Committee, based upon the achievement of specific corporate
performance criteria. However, any specific corporate performance criteria not
achieved at a 90% level of achievement or better is disregarded for purposes of
calculating any award under the STIP for an Executive Officer. The Compensation
Committee is also authorized to establish personal performance objectives for
each participant in the STIP, as well as criteria based on the performance of a
discrete business unit for which the participant has responsibility. The pre-
defined corporate performance criteria generally applicable to Executive
Officers under the STIP, upon which 90% of the annual award under the STIP for
1995 was based and which were generally weighted equally, included units in
service, revenues, operating cash flow and net loss per share. In 1995, 10% of
the annual award under the STIP for an Executive Officer was based upon the
achievement of personal performance objectives. The STIP provides for
threshold, target and maximum award levels, with the actual bonus entitlement
generally being based on the overall blended level of achievement of all
applicable performance criteria. In 1995, the pre-defined corporate performance
criteria were not achieved at the threshold level although the Compensation
Committee determined that each of the Executive Officers who participated in the
STIP during 1995 met their respective personal performance objectives at the
target level. Accordingly, the award under the STIP for each of the Executive
Officers for 1995 was equal to approximately 5% of such Executive Officer's base
salary for 1995. See "Summary of Cash and Certain Other Compensation."
LONG-TERM MANAGEMENT INCENTIVE PLAN. The Compensation Committee determined
during 1994 to retain Towers Perrin, a nationally recognized compensation
consulting firm, to assist the Compensation Committee in conducting a review of
the Company's LTIP. Given the rapidly changing nature of the Company's
business, the Compensation Committee perceived that the existing program of
long-term performance awards tied to pre-defined corporate performance criteria
based on the Company's operating results did not provide the optimum linkage
between executive performance and the enhancement of stockholder value. The
Compensation Committee also took into account trends in long-term compensation
in the Company's own industry and others that have resulted in greater emphasis
on total return to stockholders as a principal factor in determining long-term
compensation. Accordingly, the Compensation Committee implemented revised
performance criteria under the LTIP for both the 1993-1995 and 1994-1996
performance cycles and such revised performance criteria will apply to the 1995-
1997 and subsequent performance cycles. The new criteria are based on the
change in the market price of the Company's
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<PAGE>
Common Stock relative to changes in the market prices of the common stocks of
approximately 36 companies in a telecommunications industry index selected by
SIC code. Awards under the LTIP will be earned if the Company's total return to
stockholders over each three-year performance cycle meets or exceeds certain
levels of the total return to stockholders for the companies in the group. The
Compensation Committee believes that the use of the revised performance criteria
will more effectively align the interests of senior management with those of the
Company's stockholders, and will enhance stockholder value by better focusing
senior management on long-term strategic objectives.
In addition, based on an analysis of compensation data provided by Towers
Perrin with respect to other companies in the telecommunications industry and
certain other factors, the Compensation Committee determined to adjust the
stated amounts of awards under the LTIP for both the 1993-1995 and 1994-1996
performance cycles. As originally implemented, the stated amount of awards
under the LTIP at the threshold, target and maximum levels were calculated by
multiplying the participant's average annual base salary (excluding bonuses)
over the three year performance cycle by 62.5%, 125% and 187.5%, respectively.
The Compensation Committee has adjusted the stated amounts of the awards under
the LTIP for both the 1993-1995 and 1994-1996 performance cycles so that the
stated amounts at the threshold, target and maximum levels will now be
calculated by multiplying such participant's average annual base salary
(excluding bonuses) over the performance cycle by 25%, 50% and 100%,
respectively. These percentages will also be used to determine the stated
amounts of awards for the 1995-1997 and subsequent performance cycles. The
awards, if earned, will be payable in cash, shares of Common Stock or options to
purchase Common Stock, or any combination thereof, as the Compensation
Committee, in its discretion, determines at the end of each performance cycle.
For the 1993-1995 performance cycle, the Company achieved the established
criteria discussed above at the 44.28% level. The Compensation Committee has not
determined whether such awards will be paid or, if paid, the manner in which
such awards will be paid. See "Long-Term Incentive Plan" on page 11.
CHIEF EXECUTIVE OFFICER COMPENSATION. Mr. Palmer, Chairman of the Board of
the Company, served as the Company's Chief Executive Officer until May 25, 1995,
at which time Mr. Puckett was elected as Chief Executive Officer by the Board of
Directors of the Company. Mr. Puckett resigned from his positions as a Director,
President and Chief Executive Officer of the Company effective as of January 4,
1996 and Mr. Palmer resumed his role as acting Chief Executive Officer as of
such date. Messrs. Palmer and Puckett received a base salary of $550,021 and
$450,016, respectively, in 1995 pursuant to the terms of their employment
agreements which were effective as of April 4, 1989 and January 11, 1994,
respectively. Mr. Palmer's employment agreement provided for a base salary of
$338,000 and $400,000 during the first and second years of the employment term,
and provides for a base salary of $450,000 for each year thereafter, subject to
an annual cost of living adjustment. Mr. Puckett's employment agreement provided
for a base salary of $400,000 and $450,000 during the first and second years of
the employment term. In 1994, the Compensation Committee determined to provide
for a 5% increase in the annual base salary of Mr. Palmer (as well as the other
Executive Officers of the Company) in lieu of the cost of living adjustment
(which would have been approximately 3%) provided for in Mr. Palmer's employment
agreement and, in 1995, the Compensation Committee amended Mr. Palmer's
employment agreement to provide for a base salary of $550,000. In addition, Mr.
Palmer and Mr. Puckett participated in the STIP and the LTIP on the same general
terms as other Executive Officers of the Company which, as discussed above, are
performance based compensation plans. See "Short-Term Management Incentive Plan"
and "Long-Term Management Incentive Plan" above and "Employment Agreements."
CONCLUSION. The Compensation Committee believes that the policies articulated
above, including the STIP, the LTIP and the Amended 1990 Plan, will continue to
ensure that the interests of the Company's Executive Officers, managers and
other key employees are tied to the interests of the Company's stockholders.
Respectfully submitted,
E. Lee Walker
R. Faser Triplett
-7-
<PAGE>
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth, for the years ended December 31, 1995, 1994,
and 1993, the cash compensation paid by the Company and its subsidiaries, as
well as certain other compensation paid or accrued for those years, to each of
the individuals who served as Chief Executive Officer during 1995 and the four
most highly compensated other Executive Officers of the Company who were
Executive Officers as of December 31, 1995, in all capacities in which they
serve.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
------------------------------- ------------------------- ---------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Annual Restricted Other
Compen Stock Securities LTIP Compen-
Name and Salary Bonus sation Award(s) Underlying Payouts sation
Principal Position Year ($)(1) ($)(2) ($)(3) ($) Options (#) ($)(4) ($)(5)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John N. Palmer(6)........ 1995 $550,021 $ 27,501 $ - - 100,000 $243,515 $34,853
Chairman of the Board 1994 490,238 24,512 - - - - 35,252
and acting Chief 1993 472,500 265,781 - - - - 34,708
Executive Officer
M. Bernard Puckett(7).... 1995 450,016 22,501 - - - 199,239 3,049
Formerly President and 1994 389,488 19,474 - - 550,000 - 2,268
Chief Executive Officer 1993 - - - - - - -
Jai P. Bhagat............ 1995 350,013 17,501 - - - 154,964 17,119
Executive Vice President 1994 290,636 14,532 - - 155,000 - 17,124
1993 262,500 147,656 - - - - 2,324
John E. Welsh III........ 1995 350,013 17,501 - - 50,000 154,964 2,013
Vice Chairman and Acting 1994 300,000 45,000(9) - - 200,000 - 240
Chief Financial Officer 1993 252,000 141,876 - - - - -
J. Robert Fugate(8)...... 1995 270,010 13,501 - - 50,000 119,544 1,579
Formerly Senior Vice 1994 245,118 37,256(9) - - - - 1,579
President-Finance 1993 236,250 132,891 - - - - 1,579
Leonard G. Kriss......... 1995 260,010 13,001 - - 50,000 115,116 2,262
Senior Vice President, 1994 233,445 36,813(9) - - - - 2,262
General Counsel and 1993 206,257 112,500 - - 100,000 - 2,262
Secretary
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) See "Employment Agreements" below.
(2) The pre-defined corporate performance criteria applicable to certain
Executive Officers of the Company under the STIP were not achieved in 1994
and 1995. Accordingly, awards paid under the STIP for the years ended
December 31, 1994 and 1995 were based on the achievement of personal
performance objectives and were equal to 5% of 1994 and 1995 base salary,
respectively. See "Compensation Committee Report on Executive Compensation."
(3) The amount of "Other Annual Compensation" for 1995, 1994 and 1993 for each
of the Executive Officers named in the table did not meet the threshold
reporting requirements under the rules of the Commission.
(4) The amounts reflected in "LTIP Payouts" represent the stated value of awards
that have been earned under the LTIP in respect of the 1993-1995 performance
cycle based on achievement of the established criteria at the 44.28% level.
The Compensation Committee has not determined whether such awards will be
paid or, if paid, the manner in which such awards will be paid.
-8-
<PAGE>
(5) "All Other Compensation" includes the Company's contribution in the amount
of $240 on behalf of each Executive Officer to the 401(k) Plan, premiums
paid by the Company on behalf of such Executive Officers for life insurance
and, in the case of Mr. Bhagat, approximately $14,800 which represents
interest imputed to Mr. Bhagat with respect to a $400,000 unsecured,
interest-free loan made by the Company to Mr. Bhagat in connection with the
relocation of his residence in January 1994. Mr. Bhagat repaid the subject
loan in full in April 1996. See "Certain Transactions."
(6) Mr. Palmer served as Chief Executive Officer of the Company until Mr.
Puckett was elected as Chief Executive Officer by the Board of Directors of
the Company on May 25, 1995. Mr. Puckett resigned from his positions as a
Director, President and Chief Executive Officer of the Company as of
January 4, 1996, and Mr. Palmer resumed his role as acting Chief Executive
Officer immediately thereafter.
(7) Mr. Puckett resigned as a Director, President and Chief Executive Officer of
the Company as of January 4, 1996.
(8) Mr. Fugate resigned as Senior Vice President - Finance and Chief Financial
Officer of the Company as of February 22, 1996.
(9) Includes cash awards of $30,000, $25,000 and $25,000 paid to Messrs. Welsh,
Fugate and Kriss, respectively, which represent special discretionary awards
granted to employees of the Company deemed to have made a significant
contribution to the success of the Company.
-9-
<PAGE>
STOCK OPTIONS
The following table sets forth certain information with respect to stock
options granted during the year ended December 31, 1995 under the Company's
Amended 1990 Plan to the Executive Officers of the Company named in the Summary
Compensation Table on page 8.
<TABLE>
<CAPTION>
Option Grants in 1995
(a) (b) (c) (d) (e) (f)
Number of Securities % of Total Options Exercise or Grant Date
Underlying Options Granted to Base Expiration Present
Name Granted (#)(1) Employees in 1995 Price ($/sh) Date Value (2)(3)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John N. Palmer...... 100,000 14.10% $23.125 5/25/05 $1,664,000
M. Bernard Puckett.. 0 N/A N/A N/A N/A
Jai P. Bhagat....... 0 N/A N/A N/A N/A
John E. Welsh III... 50,000 7.05% 23.125 5/25/05 832,000
J. Robert Fugate.... 50,000 7.05% 23.125 5/25/05 832,000
Leonard G. Kriss.... 50,000 7.05% 23.125 5/25/05 832,000
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The stock options reflected in this table vest as to 33 1/3% of the shares
of Common Stock covered thereby on the first anniversary of the date of
grant, with an additional 33 1/3% of such options vesting eighteen months
and twenty-four months after the date of grant. The exercise price of all
of such stock options reflected in this table is equal to the fair market
value of the Common Stock on the date of grant. See "Change in Control
Arrangements" for a description of the vesting provisions of stock options
granted under the Amended 1990 Plan in the event of a change in control.
(2) The actual value, if any, that an Executive Officer may ultimately realize
will depend on the excess of the stock price over the exercise price on the
date the stock option is exercised. Therefore, there can be no assurance
that the value realized by an Executive Officer upon actual exercise of the
stock options granted in 1995 will be at or near the Grant Date Present
Value indicated in the table.
(3) As required by the Commission's rules regarding the disclosure of executive
compensation, the Company has used the Black-Scholes option pricing model to
determine the Grant Date Present Value. The Company does not advocate or
necessarily agree that the Black-Scholes option pricing model can determine
with reasonable accuracy the value of such stock options. To the extent
that the Grant Date Present Value of the stock options determined in
accordance with the Black-Scholes option pricing model is achieved, the
stockholders of the Company will also have benefitted from an increased
stock price.
-10-
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information with respect to stock
options exercised during the year ended December 31, 1995 by the Executive
Officers of the Company named in the Summary Compensation Table on page 8, as
well as unexercised stock options held by such Executive Officers as of December
31, 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at FY-End (#) at FY-End ($)(2)
Acquired Value ------------------------- -------------------------
Name on Exercise (#) Realized ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John N. Palmer...... - $ - 1,275,000 100,000 $22,543,750 $ 0
M. Bernard Puckett.. - - 366,630 183,370 1,099,890 550,110
Jai P. Bhagat....... - - 346,666 103,334 4,798,750 0
John E. Welsh III... - - 216,660 183,340 1,710,383 683,368
J. Robert Fugate.... 60,000 1,413,625 165,000 50,000 2,094,375 0
Leonard G. Kriss.... 30,000 498,750 70,000 50,000 551,250 0
</TABLE>
- ------
(1) The amounts set forth in this column represent the difference between the
market price of the Common Stock on the date of exercise and the exercise
price.
(2) The amounts set forth in this column represent the difference between the
market price of the Common Stock as of December 29, 1995 ($21.375 per
share) and the exercise price of in-the-money stock options.
LONG-TERM INCENTIVE PLAN
The following table sets forth information concerning awards granted during
the year ended December 31, 1995 under the Company's LTIP to the Executive
Officers of the Company named in the Summary Compensation Table on page 8. The
actual payout of any awards reflected in the table below is conditioned upon the
achievement of certain performance criteria over the three-year performance
cycle commencing January 1, 1995 and concluding December 31, 1997. See
"Compensation Committee Report on Executive Compensation--Long-Term Management
Incentive Plan" on page 6.
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
Estimated Future Payouts(2)
---------------------------------
(a) (b) (c) (d) (e) (f)
Number of Performance
Shares, or Other
Units Period Until
or Other Maturation Threshold Target Maximum
Name Rights (#) or Payout ($ or #) ($ or #) ($ or #)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John N. Palmer........ - (3) 1995-97 $137,505 $275,011 $550,021
M. Bernard Puckett(4). - (3) 1995-97 N/A N/A N/A
Jai P. Bhagat......... - (3) 1995-97 87,503 175,007 350,013
John E. Welsh III..... - (3) 1995-97 87,503 175,007 350,013
J. Robert Fugate(4)... - (3) 1995-97 N/A N/A N/A
Leonard G. Kriss...... - (3) 1995-97 65,002 130,005 260,010
- --------------
</TABLE>
(1) See the Summary Compensation Table on page 8 for information regarding the
payment of awards under the LTIP for the 1993-1995 performance cycle.
(2) The stated amount of awards under the LTIP (the "Stated Amount") at the
threshold, target and maximum levels are calculated by multiplying 25%, 50%
and 100%, respectively, by the participant's average annual cash
compensation, excluding bonuses, over the performance cycle. For purposes
of this table, it has been assumed that average annual cash compensation for
each Executive Officer named in the table equals cash compensation,
excluding bonuses, payable to such Executive Officer in the last fiscal
year. Awards under the LTIP for the 1995-1997 performance cycle will be
earned if (a) the Company's total return to stockholders ("TRS") over the
performance cycle exceeds the rate of return on a three-year United States
Treasury Bill over the performance cycle, assuming such United States
Treasury Bill had been purchased on the first day of the performance cycle
and (b) the Company's TRS meets or exceeds certain levels of the TRS of
approximately 36 companies included in the telecommunications industry group
("TII Group") that includes all companies (other than the Company) listed in
SIC #4812 (Radio Telephone Communications). The target amount will be
earned if the Company's TRS during the 1995-1997 performance cycle falls
within the 75th percentile of the TRS for the same period of the TII Group.
The threshold and maximum amounts will be earned if the Company's TRS for
such performance cycle falls within the 50th and 90th percentiles of the TRS
of the TII Group for the same period, respectively. Awards will be
interpolated to reflect the incremental attainment of performance criteria
between the threshold, target and maximum levels. These award levels may be
modified, under certain circumstances, as the Compensation Committee deems
appropriate and advisable. See also "Change in Control Arrangements."
(3) If earned, awards will be payable at the end of the 1995-1997 performance
cycle in cash, in shares of Common Stock and/or in the form of stock
options, as determined by the Compensation Committee. The cash and Common
Stock components of an award, if any, will be paid in three equal annual
installments beginning no later than April 15 of the year following the end
of the performance cycle. The stock option component of an award, if any,
will be deemed granted as of April 15 of the year following the end of the
performance cycle for which the award is made and will vest as to 100% of
the shares of Common Stock covered thereby one year after the date of grant.
The Common Stock component of an award will vest in full when paid. If
applicable, the number of shares of Common Stock subject to options
constituting the stock option component of an award shall be determined by
dividing that percentage of the Stated Amount of such award payable in
options, as determined by the Compensation Committee, by the average closing
price of the Common Stock for the last 45 trading days of the last calendar
year (the "Average Closing Price") in the performance cycle for which the
award is made. The exercise price of such options shall be the Average
Closing Price. Accordingly, such options can only be profitably exercised
to the extent the market price of the Common Stock subsequent to the vesting
of the options exceeds the Average Closing Price. If applicable, the number
of shares of Common Stock constituting the Common Stock component of an
award shall be determined by dividing that percentage of the Stated Amount
of the award payable in shares of Common Stock by the Average Closing Price.
(4) Messrs. Puckett and Fugate have resigned from their positions as Executive
Officers of the Company and are no longer eligible to participate in the
LTIP.
COMPENSATION OF DIRECTORS
Directors who are officers of the Company receive no additional compensation
for serving on the Board. Directors who are not officers of the Company receive
an annual fee of $10,000 and an additional fee of $600 for each Board and
committee meeting attended. Mr. E. Lee Walker and Dr. R. Faser Triplett were
each granted options to purchase 70,000 shares of Common Stock at an exercise
price of $2.25 per share and $5.25 per share, respectively, at the time of their
initial election as Directors in 1988 and 1989, respectively. In addition,
Messrs. Haley Barbour and John E. Welsh III were each granted options to
purchase 50,000 shares of Common Stock at an exercise price of $9.50 per share
in connection with their initial election to the Board of Directors in
-11-
<PAGE>
September 1992. Mr. Thomas G. Barksdale, a Director of the Company, holds
options to purchase 95,000 shares of the Company's Common Stock having an
exercise price of $2.25 per share that were granted in 1988 to Mr. Barksdale in
connection with his employment by the Company. Mr. Barksdale's options were
continued in effect pursuant to a severance agreement entered into at the time
of his resignation as an officer in December 1989.
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Mr. Palmer as of April
4, 1989 providing for his employment as Chairman of the Board and Chief
Executive Officer of the Company for a seven-year term. Mr. Palmer's employment
agreement provides for a one-year automatic extension of the term at the end of
each year during the term unless the Company or Mr. Palmer elects not to have
the term so extended. Upon the appointment of Mr. Puckett as Chief Executive
Officer, Mr. Palmer's employment agreement was amended to provide for his
continued employment as Chairman of the Board. Mr. Palmer was appointed acting
Chief Executive Officer upon Mr. Puckett's resignation on January 4, 1996. See
"Chief Executive Officer Compensation" for additional information regarding Mr.
Palmer's employment agreement.
The Company also entered into an employment agreement with Mr. Puckett as of
January 11, 1994 which provided for Mr. Puckett's employment as President and
Chief Operating Officer of the Company for a five-year term. The employment
agreement provided for a one-year automatic extension of the term at the end of
each year during the term unless the Company or Mr. Puckett elected not to have
the term so extended. The agreement with Mr. Puckett provided for an annual
salary of $400,000 in the first year of the employment term, provided for an
annual salary of $450,000 in the second year of the employment term and for an
annual salary of $500,000 in each year thereafter. Mr. Puckett resigned from his
positions as a Director, President and Chief Executive Officer of the Company on
January 4, 1996. Following his resignation, Mr. Puckett's employment agreement
was amended to ensure his continued availability to the Company through December
31, 1996, during which period Mr. Puckett shall continue to receive his base
salary. In addition, and in lieu of participating in any of the Company's
incentive plans during 1996, Mr. Puckett's amended employment agreement provides
for a one-time payment on January 1, 1997 in an amount equal to $1,000,000, less
50% of the excess of: (i) the sum of the fair market value per share of Common
Stock on the date of exercise of his stock options, less the sum of the related
per share option exercise prices; over (ii) $2,000,000.
In addition, the Company has entered an employment agreement with Mr. Bhagat,
which was entered into as of April 4, 1989, which provides for Mr. Bhagat's
employment as Executive Vice President of the Company for a five-year term and
provides for a one-year automatic extension of the term at the end of each year
during the term unless the Company or Mr. Bhagat elects not to have the term so
extended. The Company also entered into employment agreements with Messrs. John
E. Welsh III and Leonard G. Kriss that are for two-year terms and provide for a
one-year automatic extension of the terms at the end of each year during the
terms unless the Company or such Executive Officer elects not to have the term
so extended. Mr. Fugate resigned from his position as Senior Vice President-
Finance on February 22, 1996.
These employment agreements provide for annual cost of living adjustments, in
some cases after fixed increases during the initial years of such employment
agreements. Such agreements also provide that the Board of Directors may
authorize increases in such Executive Officers' salaries in lieu of the annual
cost of living increase. See "Compensation of Directors and Executive
Officers--Compensation Committee Report on Executive Compensation" on page 5
for additional information regarding Executive Officer salary adjustments. In
the event of an Executive Officer's disability during the term of the agreement,
monthly payments of approximately 60% of such Executive Officer's monthly salary
(up to a maximum of $6,000) will be made to such Executive Officer for the
longer of 42 months or the duration of such disability. These disability
payments are funded by insurance with respect to all Executive Officers except
Mr. Palmer whose disability payments are the direct obligation of the Company.
-12-
<PAGE>
CHANGE IN CONTROL ARRANGEMENTS
The Amended 1990 Plan provides that all outstanding stock options granted
thereunder will automatically become vested and exercisable in full (i) upon a
filing pursuant to any federal or state law in connection with any tender offer
for shares of the Company (other than a tender offer by the Company), (ii) upon
the signing of any agreement for the merger or consolidation of the Company with
another corporation or for the sale of all or substantially all of the assets of
the Company, (iii) upon adoption of any resolution of reorganization or
dissolution of the Company by the stockholders, (iv) upon the occurrence of any
other event or series of events, which tender offer, merger, consolidation,
sale, reorganization, dissolution or other event or series of events, in the
opinion of the Board of Directors, will, or is likely to, if carried out, result
in a change of control of the Company, or (v) if during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Directors of the Company cease for any reason to constitute a majority
thereof (unless the election, or the nomination for election by the Company's
stockholders, of each Director of the Company first elected during such period
was approved by a vote of at least two-thirds of the Directors then still in
office who were Directors of the Company at the beginning of any such period).
In the event of a change in control of the Company, as defined in the LTIP, all
proposed awards and any unvested or unpaid portion of an award under the LTIP
that has been earned shall become vested, and the entire award shall be payable,
as of the date of such event. For purposes of the LTIP, a change in control
shall be deemed to have occurred if (i) any person becomes the beneficial owner
of securities of the Company representing 30% or more of the outstanding voting
power of the Company's then outstanding securities, (ii) during any period of
two years, at least a majority of the Board of Directors ceases to consist of
individuals who served continuously on the Board since the beginning of such
period, unless the election or nomination for election of each Director during
such period was approved by a vote of at least two-thirds of the Directors then
still in office who were Directors at the beginning of such period, (iii) the
stockholders of the Company approve a merger of the Company, other than (x) a
merger in which voting securities of the Company would continue to represent
more than 80% of the voting power of the surviving entity or (y) a merger to
effect a recapitalization of the Company in which no person acquires more than
30% of the voting power of the Company's then outstanding securities, or (iv)
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Mr. Walker
and Dr. Triplett, neither of whom serves as an officer or employee of the
Company or any of its subsidiaries. Dr. Triplett is an officer, director and a
majority owner of a corporation that provides travel related services to the
Company and to which the Company paid approximately $3.6 million in 1995. A
substantial portion of this amount represents reimbursement to this corporation
for payments made to third-party vendors. See "Compensation of Directors" for
information concerning options granted to Dr. Triplett and Mr. Walker.
CERTAIN TRANSACTIONS
In March 1995, Mr. Jai P. Bhagat, Vice Chairman, Executive Vice President and
a Director of the Company, sold his 40% equity interest in, and Mr. Bhagat and
his wife resigned as directors and officers of, a company located in Jackson,
Mississippi that provides pager repair and maintenance services to a subsidiary
of the Company. Through the period January 1995 through March 1995, the
Company's subsidiary paid Mr. Bhagat's former company an aggregate of
approximately $527,003 for such services. In addition, during the same period,
Mr. Bhagat's former company purchased obsolete equipment from the Company for an
aggregate consideration of approximately $256,000. In 1994, the Company also
loaned Mr. Bhagat $400,000 on an unsecured interest-free
-13-
<PAGE>
basis in connection with the relocation of his residence in January 1994. Mr.
Bhagat repaid this loan in full in April 1996.
In 1995, pursuant to an agreement with the Company entered into in the fourth
quarter of 1994, Mr. Thomas G. Barksdale, a Director of the Company, provided
certain consultancy services to the Company on a project specific basis for an
annual fee of $75,000.
In 1995, the Company loaned Mr. Robert T. Pike, Senior Vice President of Human
Resources of the Company, $99,000 on an unsecured interest-free basis in
connection with the relocation of his residence in December 1995. Mr. Pike
repaid this loan in full in March 1996.
-14-
<PAGE>
STOCKHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Common Stock of the Company during the period from December 31, 1990, to
December 31, 1995, with (i) the cumulative total stockholder return of companies
comprising the Nasdaq Stock Market Index and (ii) the total stockholder return
of a peer group of companies, weighted by market capitalization as of the
beginning of the period. This peer group consists of Dial Page, Inc., Nextel
Communications, Inc., Paging Network, Inc., Rogers Cantel Mobile Communications
Inc. and Vodafone Group, plc. The graph assumes $100 invested on December 31,
1990, as well as the reinvestment of any dividends. The comparisons in this
table are required by the Commission and, therefore, are not intended to
forecast or be indicative of possible future performance of the Company's Common
Stock.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG MOBILE TELECOMMUNICATION TECHNOLOGIES CORP.,
NASDAQ STOCK MARKET-U.S. & FOREIGN INDEX AND PEER GROUP INDEX
Measurement period NASDAQ PEER GROUP
(Fiscal year Covered) MTEL INDEX INDEX
- --------------------- ----- ------ ----------
Measurement PT -
12/90 $100.00 $100.00 $100.00
FYE 12/91 $154.00 $160.00 $150.00
FYE 12/92 $206.00 $185.00 $141.00
FYE 12/93 $359.00 $214.00 $210.00
FYE 12/94 $289.00 $207.00 $207.00
FYE 12/95 $317.00 $288.00 $223.00
-15-
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company held five meetings during 1995. The
Audit Committee of the Board of Directors, which is comprised of Messrs.
Barbour, Barksdale and Maffei, held four meetings during 1995. The principal
functions of the Audit Committee include the review of the results of the annual
audit with the Company's independent public accountants and the review of the
adequacy of the Company's internal accounting controls and practices. The Audit
Committee also makes a recommendation to the Board of Directors concerning the
selection of the independent public accountants to be retained by the Company.
The Compensation Committee held four meetings in 1995. The Compensation
Committee has been delegated certain authority by the Board of Directors with
respect to matters relating to the Company's 1988 Executive Incentive Plan and
the Amended 1990 Plan, as well as the Short-Term and Long-Term Management
Incentive Plans, and is responsible for determining the compensation for the
Executive Officers of the Company. The Company's Board of Directors does not
have a standing committee on nominations. Each director attended at least
seventy-five percent (75%) of the meetings of the board of directors and the
committees on which such director serves.
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation and Bylaws provide that
the Board of Directors of the Company shall be divided into three classes of
Directors, excluding those Directors who may be elected by the holders of any
class or series of stock having preference over the Common Stock as to dividends
or upon liquidation. The Company's Board of Directors is currently comprised of
eight Directors, two classes consisting of three Directors each and one class
consisting of two Directors. Each Director is elected for a three-year term,
with one class of Directors being elected at each annual meeting of
stockholders.
All holders of Common Stock of the Company are entitled to participate in the
election of Directors at each annual meeting. Except as otherwise required by
law or established by the Board of Directors with respect to the holders of any
class or series of preferred stock, the holders of Common Stock exclusively
possess such voting power.
Set forth below is information concerning the nominees for Directors to be
elected at the 1996 Annual Meeting for a three-year term expiring at the 1999
Annual Meeting, as well as certain information concerning the Directors whose
terms extend beyond the 1996 Annual Meeting. If any nominee for election as a
Director at the 1996 Annual Meeting for any reason should become unavailable for
election, or if a vacancy should occur before the election (which events are not
anticipated), it is intended that the shares of Common Stock represented by the
proxies will be voted for such other person as the Board of Directors of the
Company shall designate.
DIRECTORS TO BE ELECTED AT THE 1996 ANNUAL MEETING
Thomas G. Barksdale, age 58, is a private investor and has served as a
Director of the Company since October 1988. Mr. Barksdale served as President
and Chief Operating Officer of the Company from December 1988 to December 1989.
E. Lee Walker, age 53, is a private investor and has served as a Director of
the Company since October 1988. From June 1986 to March 1990, Mr. Walker served
as President and Chief Operating Officer of Dell Computer Corp., a computer
manufacturer located in Austin, Texas. Mr. Walker also serves as a director of
The Continuum Company, Inc.
-16-
<PAGE>
DIRECTORS WHOSE TERMS EXTEND BEYOND THE 1996 ANNUAL MEETING
Haley Barbour, age 48, was elected a Director of the Company in September
1992. Mr. Barbour is currently the Chairman of the Republican National
Committee and has been an attorney in Washington, D.C. and Yazoo City,
Mississippi for approximately twenty years. Mr. Barbour also serves as a
director of Deposit Guaranty National Bank. Mr. Barbour's term as a Director of
the Company expires at the 1998 Annual Meeting.
Jai P. Bhagat, age 49, has served as Vice Chairman of the Company since May
1995 and as Executive Vice President and a Director since October 1988. Mr.
Bhagat has also served as President and Chief Executive Officer of Destineer
Corp. since May 1994 and as President and Chief Executive Officer of SkyTel
since May 1995. Mr. Bhagat is a past Chairman and currently serves on the
Executive Committee of the Board of Directors of the Personal Communications
Industry Association, a national association representing the mobile
telecommunications industry, and also serves as a director of American Mobile
Satellite Corporation and Wireless Access, Inc. Mr. Bhagat's term as a Director
of the Company expires at the 1998 Annual Meeting.
R. Faser Triplett, M.D., age 63, has been a Director of the Company since May
1989. Dr. Triplett has been a practicing physician in Jackson, Mississippi
since 1966. Mr. Triplett's term as a Director of the Company expires at the
1998 Annual Meeting.
Gregory B. Maffei, age 35, was elected a Director of the Company in May 1995.
Mr. Maffei has served as Treasurer of Microsoft Corporation since April 1994 and
is currently a director of Citrix Systems. Mr. Maffei also served as a director
and Executive Vice President and Chief Financial Officer of Pay 'N Pak Stores,
Inc. from January 1991 to August 1992. Pay 'N Pak Stores, Inc. filed a
petition for reorganization under Chapter 11 of the United States Bankruptcy
Code on September 21, 1991.
John N. Palmer, age 61, has served as the Chairman of the Board of Directors
of the Company since October 1988, acting Chief Executive Officer of the Company
since January 4, 1996 and Chief Executive Officer of the Company from October
1988 to May 1995. Mr. Palmer previously served as Chairman of the Board,
President and Chief Executive Officer of Mobile Communications Corporation of
America ("MCCA") from 1973 to April 1989. Mr. Palmer is also a director of
Entergy Corporation, East Group Properties and Deposit Guaranty Corporation,
and also serves as a director and member of the Executive Committee of Deposit
Guaranty National Bank. Mr. Palmer's term as a Director of the Company expires
at the 1997 Annual Meeting.
John E. Welsh III, age 45, has served as Vice Chairman of the Company since
May 1995, acting Chief Financial Officer of the Company since February 1996,
Managing Director of the Company since December 1992 and as a Director of the
Company since September 1992. Mr. Welsh was a principal in Seaport Capital,
Inc., a financial advisory and merchant banking firm, from January 1992 to
December 31, 1994. From 1983 through December 1991, Mr. Welsh was a Managing
Director of the investment banking group of Prudential Securities, Inc. Mr.
Welsh also serves as a director of York International Corporation. Mr. Welsh's
term as a Director of the Company expires at the 1997 Annual Meeting.
-17-
<PAGE>
PROPOSAL TO AMEND THE RESTATED
CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors of the Company has adopted a resolution unanimously
approving and recommending to the Company's stockholders for their approval an
amendment to the current Restated Certificate of Incorporation of the Company
(the "Certificate") increasing the number of authorized shares of Common Stock
of the Company from 75,000,000 to 100,000,000 shares.
The Certificate provides that the Company is authorized to issue up to
75,000,000 shares of Common Stock. As of March 31, 1996, approximately
54,138,197 shares of Common Stock were issued and outstanding and 4,162,500,
150,200 and 1,675,978 additional shares of Common Stock were reserved for
issuance upon conversion of the Company's outstanding $2.25 Cumulative
Convertible Exchangeable Preferred Stock, 6.75% Convertible Subordinated
Debentures due 2002 and 7.5% Accruing Convertible PIK Preferred Stock (the "PIK
Preferred"), respectively. In addition, approximately 6,784,000 shares of Common
Stock are estimated to be reserved for issuance in connection with the Company's
equity based incentive plans. Accordingly, approximately 8,089,125 authorized
but unissued and unreserved shares of Common Stock are available for general use
by the Company on an unrestricted basis.
The Company is involved in discussions with other prospective investors
regarding the purchase of an additional $20.0 million to $30.0 million of PIK
Preferred. In addition, under the terms of the Company's PIK Preferred, the
Company is permitted to pay dividends accruing thereon in the form of additional
shares of PIK Preferred which, by their terms, are convertible into shares of
Common Stock. Since certain of the Company's borrowing arrangements presently
prohibit the payment of cash dividends, the Company will be required to pay such
dividends by issuing additional shares of PIK Preferred and, upon any such
issuance, the Company will be required to reserve authorized but unissued shares
of Common Stock to permit conversion of such PIK Preferred shares in accordance
with their terms, thereby further reducing the number of the available shares of
Common Stock.
The proposed amendment to the Certificate would increase the number of
authorized shares of Common Stock by 25,000,000 shares. The additional shares of
Common Stock for which authorization is sought, if and when issued, would have
the same rights and privileges as the shares of Common Stock now outstanding. No
change would be made to any outstanding preferred stock of the Company
including, but not limited to, the Series C Junior Participating Preferred
Stock, the $2.25 Cumulative Convertible Exchangeable Preferred Stock and the PIK
Preferred.
The Board of Directors recommends the increase in the authorized Common Stock
to enable the Company to have additional shares available for issuance in
connection with future acquisitions, public or private financings involving the
sale of Common Stock or securities convertible into Common Stock, employee
benefit plans and other purposes. If the proposal to amend the Certificate to
increase the number of authorized shares of Common Stock is approved at the 1996
Annual Meeting, the Board of Directors will have greater flexibility to issue
additional shares Common Stock without the expense and delay of a stockholders'
meeting unless stockholder approval is otherwise required. Except as described
above, the Company has no current plans, agreements or arrangements for the
issuance of additional shares of Common Stock, other than the issuance of shares
of Common Stock upon conversion of outstanding convertible securities, upon the
exercise of outstanding stock options and awards under employee benefit plans.
The Board of Directors has the authority to authorize the issuance of
additional shares of Common Stock without stockholder approval unless such
approval is otherwise required by applicable law or Nasdaq National Market or
stock exchange rules. The issuance of additional shares of Common Stock
could, under certain circumstances, render more difficult or discourage an
attempt by a third party to obtain control of the Company. For example, the
issuance of shares of Common Stock in a public or private sale, merger, or
similar transaction would increase the number of the Company's outstanding
shares, thereby diluting the interest of a party seeking to acquire control of
the Company and increasing the cost of such transaction.
In addition, the Certificate as currently in effect allows the Company to
issue one or more series of preferred stock having such voting rights,
conversion features and other characteristics as the Board of Directors deems
appropriate. Consequently, the Company could issue an additional series of
preferred stock that could be converted into Common Stock and have a further
dilutive effect on the interest of the party seeking to acquire control of the
Company or that has rights and characteristics that may otherwise defeat or
discourage an attempt by a third party to obtain control of the Company.
Management currently knows of no intent or plan on the part of any person or
entity to gain control of the Company.
Issuances of additional shares of Common Stock, depending upon the timing and
circumstances, could dilute earnings per share and decrease the book value per
share of shares theretofore outstanding and each stockholder's percentage
ownership of the Company may be proportionately reduced.
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<PAGE>
The affirmative vote of the holders of at least a majority of the issued and
outstanding shares of Common Stock is needed for the approval of this proposal.
Abstentions and broker non-votes will have the same effect as a vote against the
proposal.
The Board of Directors recommends a vote FOR the proposal to amend the
Certificate to increase the number of authorized shares of Common Stock.
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<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP served as the auditors of the Company for the year ended
December 31, 1995, and is currently serving in such capacity for the year ending
December 31, 1996. Representatives of the firm of Arthur Andersen LLP are
expected to be present at the 1996 Annual Meeting with the opportunity to make a
statement if they desire to do so and to be available to respond to appropriate
questions.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Stockholders who wish to submit a proposal for consideration at the 1997
Annual Meeting should submit the proposal in writing to the Company at the
address set forth on page 1 of this Proxy Statement. A proponent of a proposal
is required to have been a record or beneficial owner of at least 1% or $1,000
in market value of Common Stock of the Company for a period of at least one year
and must continue to own such securities through the date on which the 1997
Annual Meeting is held. The Company has the right to request documentary
support (as provided in Rule 14a-8 promulgated by the Commission pursuant to the
Exchange Act) of the proponent's ownership claim within 14 calendar days after
receipt of the proposal, and the proponent shall furnish appropriate
documentation within 21 days after receiving such request. Proposals must be
received by the Company on or before December 31, 1996 for inclusion in next
year's proxy materials. Stockholders who submit proposals must, in all other
respects, comply with Rule 14a-8 under the Exchange Act.
MISCELLANEOUS
The Board of Directors does not intend to present and knows of no other person
who intends to present any matter of business at the 1996 Annual Meeting other
than as set forth in the accompanying Notice of Annual Meeting of Stockholders.
However, if other matters properly come before the meeting, it is the intention
of the persons named on the enclosed proxy card to vote in accordance with their
best judgment.
The Company will bear the costs of preparing and mailing the Proxy Statement,
proxy card and other material that may be sent to stockholders in connection
with this solicitation. In addition to solicitations by mail, officers and
other employees of the Company may solicit proxies personally or by telephone or
telegram. The Company has retained Beacon Hill Partners, Inc. to assist in the
solicitation of proxies in connection with the 1996 Annual Meeting. The Company
has agreed to pay Beacon Hill Partners, Inc. a fee of $3,000 plus reasonable
out-of-pocket expenses for such services.
By Order of the Board of Directors
/s/ Leonard G. Kriss
------------------------------
Leonard G. Kriss
Secretary
Jackson, Mississippi
April 30, 1996
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<PAGE>
MOBILE TELECOMMUNICATION TECHNOLOGIES CORP.
Annual Meeting of Stockholders--May 30, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert T. Pike and Leonard G. Kriss and each
of them as Proxies and authorizes them to represent and vote all the shares of
Common Stock of Mobile Telecommunication Technologies Corp. (the "Company") that
the undersigned may be entitled to vote at the Annual Meeting of Stockholders to
be held on May 30, 1996 and at any adjournment thereof (i) as designated below
for the election of the Directors and the proposed amendment to the Company's
Restated Certificate of Incorporation and (ii) at the discretion of said Proxies
on such other matters as may properly come before such Annual Meeting.
IF PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS SPECIFIED, OR IF NOT
SPECIFIED, WILL BE VOTED FOR THE NOMINEES IN ITEM 1 AND FOR THE PROPOSAL
--- ---
DESCRIBED IN ITEM 2.
(Continued and to be signed on the reverse side)
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<PAGE>
X
----
Please mark
your votes
like this
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF THE DIRECTORS SET FORTH BELOW
AND FOR THE AMENDMENT DESCRIBED IN ITEM 2 BELOW.
1. Election of Thomas G. Barksdale and E. Lee Walker as Directors.
[ ] [ ] [ ]
FOR WITHHOLD AUTHORITY WITHHOLD AUTHORITY
all nominees to vote for all nominees to vote for the following
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(To withhold authority for any nominee, write the individual's name in the space
above.)
2. Amendment of Restated Certificate of Incorporation to increase the number of
shares of Common Stock the Company is authorized to issue from 75 million to
100 million.
[ ] [ ] [ ]
FOR AGAINST ABSTAIN
Please mark, date and sign exactly as the name appears herein and return this
proxy card in the enclosed envelope. Persons signing as executors,
administrators, trustees, etc. should so indicate. If joint account, each joint
owner should sign. In the case of a corporation or partnership, the full name of
the organization should be used and the signature should be that of a duly
authorized officer or partner.
Signature(s) Date May , 1996
--------------------------------- --------------------
(If held jointly, each joint owner should sign.)
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