<PAGE>
FILED PURSUANT TO
RULE 424(b)(2)
FILE NO: 333-16245
PROSPECTUS
MOBILE TELECOMMUNICATION TECHNOLOGIES CORP.
30,000 SHARES OF SERIES A 7.5% CUMULATIVE CONVERTIBLE ACCRUING PAY-IN-KIND
PREFERRED STOCK
12,500 SHARES OF SERIES B 7.5% CUMULATIVE CONVERTIBLE ACCRUING PAY-IN-KIND
PREFERRED STOCK
15,000 SHARES OF SERIES C 7.5% CUMULATIVE CONVERTIBLE ACCRUING PAY-IN-KIND
PREFERRED STOCK
3,187,797 SHARES OF COMMON STOCK
This Prospectus relates to (a) 30,000 shares of Series A 7.5% Cumulative
Convertible Accruing Pay-In-Kind Preferred Stock, par value $.01 per share (the
"Series A Preferred Stock"), of Mobile Telecommunication Technologies Corp., a
Delaware corporation ("Mtel" or the "Company"), (b) 12,500 shares of Series B
7.5% Cumulative Convertible Accruing Pay-In-Kind Preferred Stock (the "Series B
Preferred Stock") of the Company, and (c) 15,000 shares of Series C 7.5%
Cumulative Convertible Accruing Pay-In-Kind Preferred Stock (the "Series C
Preferred Stock", and together with the Series A Preferred Stock and Series B
Preferred Stock, the "PIK Preferred Stock") of the Company, which, in each case,
may be offered and sold from time to time by and for the account of certain
stockholders of the Company (the "Selling Stockholders"). See "Selling
Stockholders". This Prospectus also relates to 3,187,797 shares of common
stock, par value $.01 per share (the "Common Stock") of the Company which are
issuable upon conversion of the PIK Preferred Stock by Selling Stockholders or
to persons who acquire shares of PIK Preferred Stock. The shares of Common
Stock and PIK Preferred Stock are collectively referred to herein as the
"Offered Shares".
The Common Stock is quoted on the Nasdaq National Market ("Nasdaq National
Market") under the symbol "MTEL." Application will be made to have all of the
shares of Common Stock issuable upon conversion of the PIK Preferred Stock
approved for quotation on the Nasdaq National Market. There is currently no
trading market for the PIK Preferred Stock. On July 11, 1997, the last reported
sale price of the Common Stock on the Nasdaq National Market was $13 3/4 per
share.
The Selling Stockholders may sell the Offered Shares directly, through
agents, underwriters or dealers as designated from time to time, on the Nasdaq
National Market or such other national securities exchange or automated
interdealer quotation system on which shares of Common Stock are then listed,
through negotiated transactions or through a combination of such methods or
otherwise including distributions from time to time by a Selling Stockholder to
its partners (or stockholders). The Selling Stockholders may sell their Offered
Shares on terms to be determined at the time of sale at market prices prevailing
at the time of the sale or at negotiated prices. See "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of any of the
Offered Shares by the Selling Stockholders.
The Company has agreed to pay substantially all the expenses incurred by the
Selling Stockholders and the Company incident to the registration of the Offered
Shares (the "Offering") and to indemnify the Selling Stockholders and certain
agents, brokers and underwriters against certain liabilities under the
Securities Act of 1933, as amended (the "Securities Act").
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE OFFERED SHARES OFFERED
HEREBY.
___________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
___________
The date of this Prospectus is July 15, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The Registration
Statement (with exhibits), as well as such reports, proxy statements and other
information filed by the Company with the Commission, may be inspected and
copied at the public reference facilities maintained by the Commission at its
principal offices at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington D.C. 20549, and at the following Regional Offices of the Commission:
7 World Trade Center, 13th Floor, New York, New York, 10048; and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
may be obtained from the Public Reference Section of the Commission at 450 Fifth
Street. N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. The
Commission also maintains a Web site that contains reports, proxy and
information statements and other information at http://www.sec.gov. The Common
Stock is listed on The Nasdaq National Market and such reports, proxy and
information statements and other information concerning the Company can be
inspected and copied at The Nasdaq National Market, 1735 K Street, N.W.,
Washington, D.C. 20006-1506.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act with respect to the
securities offered by this Prospectus. This Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company and this offering, reference is
made to the Registration Statement, including the exhibits filed therewith,
which may be inspected without charge at the Commission's principal office at
450 Fifth Street, N.W., Washington, DC 20549. Copies of the Registration
Statement may be obtained from the Commission at its principal office upon
payment of prescribed fees. Statements contained in this Prospectus as to the
contents of any contract or other document are not necessarily complete and,
where the contract or other document has been filed as an exhibit to the
Registration Statement, each such statement is qualified in all respects by
reference to the applicable document filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates by reference into this Prospectus the documents
listed below:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1996 (the "Form 10-K"); and
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997; and
(3) The amended description of the Common Stock contained in the Company's
Form 8 Amendment to the Registration Statement on Form 10 under the Exchange
Act, filed with the Commission on April 4, 1989, as amended by any amendment or
report filed for the purpose of amending such description.
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All subsequent annual, quarterly and other reports filed by the Registrant
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of the offering of Common Stock or PIK Preferred Stock hereunder
shall be deemed to be incorporated by reference into this Prospectus.
The Company hereby undertakes to provide, without charge, to each person to
whom a copy of this Prospectus has been delivered, upon the written request of
any such person, a copy of any and all of the documents or other information
that have been or may be incorporated herein by reference, other than exhibits
to such documents, unless such exhibits are specifically incorporated herein by
reference. Requests for such documents should be directed to Leonard G. Kriss,
Esq., Senior Vice President, General Counsel and Secretary of the Company, at
the Company's principal executive offices at 200 South Lamar Street, Mtel
Centre, South Building, Jackson, Mississippi 39201, telephone (601) 944-1300.
All information appearing in this Prospectus or in any document
incorporated herein by reference is not necessarily complete, is qualified in
its entirety by the information and financial statements (including notes
thereto) appearing in the documents incorporated by reference herein and should
be read together with such information and documents.
Any statements contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that is also incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE COMPANY
The Company is a leading provider of nationwide and international messaging
services to mobile professionals. Mtel's principal operations include one-way
messaging services in the United States, advanced messaging services on
narrowband personal communication services ("Narrowband PCS") network and
international one-way messaging services. The Company, through its wholly-owned
subsidiary, SkyTel Corp. ("SkyTel"), provides one-way messaging services in the
United States by means of SkyTel's ground-based transmitter system, leased
satellite facilities and proprietary messaging technology and software utilizing
two dedicated channels on the 931 MHz frequency (collectively, the "931 MHz
Frequencies") licensed by the Federal Communications Commission ("FCC").
In September 1995, the Company launched commercial operation of the first
nationwide wireless messaging network in the United States that utilizes
frequencies licensed by the FCC for Narrowband PCS. This network utilizes a
proprietary system architecture designed and developed by the Company and offers
various communications services, including acknowledgment messaging, wireless
two-way messaging and information services. See "Risk Factors."
The Company's executive offices are located at: 200 South Lamar Street,
Mtel Centre, South Building, Jackson, Mississippi 39201 and its telephone number
is (601) 944-1300.
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RISK FACTORS
An investment in the shares of Common Stock or PIK Preferred Stock offered
hereby involves a high degree of risk. In addition to the information contained
elsewhere in this Prospectus, prospective purchasers should carefully consider
the following risk factors concerning the Company and its business in evaluating
an investment in the Common Stock or PIK Preferred Stock offered hereby.
HISTORY OF LOSSES
The Company incurred net losses of approximately $171.8 million and $52.0
million for the years ended December 31, 1996 and 1995, respectively, and
approximately $21.4 million for the three-month period ended March 31, 1997,
primarily as a result of developmental expenses, depreciation and amortization
and marketing costs related to SkyTel's nationwide messaging operations and the
Company's continuing international development efforts. Additionally,
substantial capital expenditures were required during 1995 and 1996 related to
the construction and development of the Narrowband PCS network, the purchase of
messaging units required to support significant growth in SkyTel one-way units
in service and the development of international activities. Management expects
the Company to incur operating losses during the remainder of 1997 as a result
of continuing start-up losses related to Narrowband PCS and continuing losses
associated with its international operations, many of which are also in the
early stages of development.
NEW TECHNOLOGY AND EXPANSION
The Company has invested approximately $377.6 million in assets and
spectrum related to the Narrowband PCS network at December 31, 1996, and the
Company expects to incur significant capital expenditures to continue the
development and expansion of the network and to procure messaging units for its
subscriber base. Management believes that the Company's investment in the assets
of Narrowband PCS will be recovered through future operating cash flows of
Narrowband PCS. The ability of Narrowband PCS to generate sufficient levels of
operating cash flow is dependent on the addition of a significant number of
units in service, market acceptance of the product and the availability of
sufficient capital resources to continue the development of the network and the
funding of its operating losses. Management's estimates of the cash flows
generated by Narrowband PCS and the capital resources needed and available to
complete its development could change, and such change could differ materially
from the estimates used to evaluate the Company's ability to realize its
investment.
UNCERTAINTY OF MARKET ACCEPTANCE OF NARROWBAND PCS
As is the case with the development and introduction of any new technology,
customer acceptance of the technology may be slow and commercially acceptable
performance levels may not be achieved on a consistent basis until a period of
stabilization and optimization has been completed. The Company believes that
the performance of the Narrowband PCS network following commercial launch in
September 1995 did not meet the Company's high standards for reliability and
performance, and that system performance has affected the level of customer
acceptance of Narrowband PCS services. The Company continued its efforts during
1996 to optimize and improve the reliability and performance of the narrowband
PCS network, and has worked extensively with Motorola, Inc. to improve
components of the infrastructure equipment which the Company believes has
enhanced network performance. During 1996, the Company also expanded the
coverage of the Narrowband PCS network in major metropolitan areas to meet
customer
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needs, and plans to continue to expand network coverage during 1997. The
Company believes that improved network performance, reliability and coverage,
together with new product offerings and more effective distribution, will result
in increasing levels of units in service on the Narrowband PCS network during
1997. However, the Company's ability to achieve adequate levels of net unit
additions on the Narrowband PCS network will depend upon the success of the
direct, reseller and other distribution channels, the commercial acceptability
of the advanced messaging services available on the Narrowband PCS network and
the competitive environment, including pricing, for competing services.
ADDITIONAL CAPITAL REQUIREMENTS
The Company's business plan calls for substantial growth in its SkyTel one-
way and Narrowband PCS subscriber bases and for continued development and
expansion of the Narrowband PCS network. This growth requires the availability
of significant capital resources to fund capital expenditures for network
expansion and messaging unit additions. Growth in the subscriber bases of both
one-way messaging and Narrowband PCS will also be required in order for the
Company to achieve consolidated operating profitability and positive operating
cash flows. If such subscriber growth is not achieved or adequate capital
resources are not available, the Company may not be able to complete its
business plan or remain in compliance with its borrowing agreements.
On March 27, 1997, SkyTel and the bank group completed an amendment (the
"Amendment") to its bank credit facility (the "Amended Credit Facility"). The
Amended Credit Facility limits the amount of borrowing available thereunder to
$175 million, increasing to $190 million upon receipt of confirmation by the
bank group that the Company is in compliance with all covenants described in the
Credit Agreement as of June 30, 1997 and increasing to $200 million upon receipt
of confirmation of such compliance as of September 30, 1997. Additional
availability thereafter will be subject to the approval of the Company's 1998
business plan by the banks holding at least 66 2/3% of the total outstanding
borrowings under this facility. The Company's borrowing availability will
remain at $200 million until December 31, 1998 at which time borrowing
availability will decrease to $175 million if the bank group has not approved
additional availability in accordance with the preceding sentence.
Borrowings under the Amended Credit Facility bear interest at the option of
SkyTel at (i) the alternate base rate (as defined in the Amended Credit
Facility) plus 2.0% or (ii) the London Interbank Offering Rate ("LIBOR") plus
3.0% through December 31, 1997. Borrowings thereafter bear interest at the
option of SkyTel at the alternate base rate plus an additional margin of 1.0% to
2.0% or the LIBOR plus an additional margin of 2.0% to 3.0%, in each case with
the applicable margin being based upon the ratio of the Company's consolidated
total debt to the annualized cash flow of SkyTel for the two preceding
quarters.
The Amendment also amended certain financial and operating covenants
contained in the original bank loan agreement to align these covenants with the
Company's 1997 business plan which was approved by the bank group. For example,
the Amendment requires the Company to comply with a ratio of total sources of
funds on a consolidated basis (which is defined as the sum of consolidated cash
flows, unrestricted cash and cash equivalents, unused availability under the
Amended Credit Facility, any net reduction in consolidated net working capital
and the net cash proceeds received from permitted asset sales or the issuance of
equity securities or subordinated debt permitted under the Amended Credit
Facility) to total uses of funds on a consolidated basis (which is defined as
the sum of consolidated capital expenditures, interest expense, net principal
repayments, cash taxes actually paid and any other cash expense) on a
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quarterly basis commencing with the quarter ending March 31, 1997. If the
Company fails to comply with this covenant for any quarterly period, the Company
will have the opportunity to correct such failure by consummating certain sales
of non-strategic assets or capital markets transactions within 90 days following
the end of such period.
During the first quarter of 1997, SkyTel repaid $5.0 million of outstanding
borrowings under its Amended Credit Facility, resulting in a balance of $130.5
million in borrowings outstanding under the Amended Credit Facility as of March
31, 1997. Letters of credit in the amount of $13.0 million had been issued
under the Amended Credit Facility as of March 31, 1997, and the credit
available under the facility has been reduced by a corresponding amount. As of
March 31, 1997, the Company had borrowing availability under the Amended Credit
Facility of approximately $31.5 million.
POTENTIAL ADVERSE EFFECTS OF COMPETITION
The Company experiences competition in its SkyTel one-way messaging
services and its Narrowband PCS network markets. Such competitors include
MobileMedia, Motorola, Paging Network, Inc. ("PageNet"), Airtouch, Inc., AT&T
Wireless Services, Inc. ("AT&T") and certain Bell operating companies. Certain
of SkyTel's competitors in the United States such as AT&T, Motorola and PageNet
possess substantially greater financial resources than the Company and could
have a substantial competitive impact on SkyTel. The Company also expects to
experience competition from companies providing wireless messaging services
based on technology that is different from Narrowband PCS technology including:
(i) broadband PCS; (ii) the existing two-way data networks operated by Ardis and
RAM; (iii) specialized mobile radio services ("SMR") such as Nextel
Communications Corporation's ESMR network; (iv) cellular and paging carriers;
and (v) cellular digital packet data ("CDPD"), a protocol to send data over
existing analog cellular networks. Continuing technological advances in the
communications industry and regulatory and legislative developments make it
impossible to predict the extent of future competition in the businesses in
which the Company operates. Such technological advances and regulatory and
legislative developments may, for example, make available other alternatives to
the services provided by the Company, thereby creating additional sources of
competition.
REGULATORY UNCERTAINTY
SkyTel's one-way and two-way messaging operations in the United States, as
well as most of the Company's other domestic businesses, are subject to
regulation by the FCC under the Communications Act of 1934, as amended. The
Company's international subsidiaries and joint ventures also generally require
governmental authorizations in each country to provide local, nationwide and
international messaging services, and the Company may be required in certain
countries to obtain governmental approvals prior to making an investment in a
subsidiary or joint venture. Changes in the regulation of or the enactment of
legislation affecting the Company's domestic or international operations or the
allocation of spectrum for services that compete with such businesses could
adversely affect the Company's results of operations.
RISKS ASSOCIATED WITH HOLDING COMPANY STRUCTURE
The Company serves primarily as a holding company for its operating
subsidiaries. Because the operations of the Company are conducted primarily
through its subsidiaries, the Company's cash flow and its ability to service
debt, including the Company's 13 1/2% Senior Notes due 2002 (the "Senior
Notes"),
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are dependent upon the cash flow of its subsidiaries and the payment of funds by
those subsidiaries in the form of loans, dividends or otherwise.
SkyTel's bank credit facility restricts the ability of SkyTel and the
Company's other subsidiaries to pay dividends or make other distributions to the
Company. In addition, the ability of the Company's subsidiaries to make such
payments will be subject to applicable state law as well as the laws of foreign
jurisdictions.
UNCERTAINTY WITH RESPECT TO PAYMENT OF DIVIDENDS
The Company has never paid dividends on the Common Stock and the Company
does not intend to pay any such dividends in the foreseeable future.
USE OF PROCEEDS
All of the shares of Common Stock and PIK Preferred Stock being offered
hereby are being offered by the Selling Stockholders. The Company will not
receive any proceeds from the sale of Common Stock or PIK Preferred Stock by
such Selling Stockholders.
DIVIDEND POLICY
The Company has not paid any dividends on its Common Stock. The payment of
dividends, if any, in the future is within the discretion of the Board of
Directors and will depend on the Company's earnings, its capital requirements
and financial condition. It is the current intention of the Board of Directors
to retain all earnings, if any, for use in the Company's business operations,
and accordingly, the Board of Directors does not expect to declare or pay any
dividends in the foreseeable future. With respect to the Preferred Stock, the
holders of the Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock are each entitled to receive dividends, subject to certain
limitations, out of funds legally available therefor at an annual rate of 7.5%
(or $75 per share of Series A Preferred Stock), accruable quarterly as of each
March 15, June 15, September 15 and December 15. The Company will have the
option, however, to pay dividends on the Series A Preferred Stock in the form of
additional shares of Series A Preferred Stock through the later of the fifth
anniversary of the date of issuance or until cash dividends are permitted under
the Company's Amended Credit Facility and the indenture relating to the Senior
Notes. Dividends on the Series A Preferred Stock will be cumulative and will
accrue from the date of original issue. The Company will have the option to
determine the timing of the actual declarations and payment of such
dividends.
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SELLING STOCKHOLDERS
The following table sets forth certain information as of the date of this
Prospectus, including, the names of the Selling Stockholders, the number of
shares of Common Stock and Preferred Stock beneficially owned by such
stockholders and the number of Offered Shares offered by each stockholder. The
PIK Preferred Stock was acquired by the Selling Stockholders directly from the
Company in a series of private placements during the first and second quarters
of 1996. Because the Selling Stockholders may sell all or part of their shares
of Common Stock or Preferred Stock offered hereby, no estimate can be given as
to the number of shares of Common Stock or Preferred Stock that will be held by
any Selling Stockholder upon termination of any offering made hereby.
<TABLE>
<CAPTION>
SHARES TO BE
REGISTERED
NAME OF SELLING SHARES BENEFICIALLY OWNED PRIOR HEREBY IN
STOCKHOLDER SECURITY TO OFFERING /(1)(2)/ OFFERING/ (1)(2)/
- ------------------ ------------------ -------------------------------- -----------------
NUMBER PERCENT/(3)/
------------------ --------------
<S> <C> <C> <C> <C>
Microsoft Corporation Series A Preferred 25,000 83.0% 25,000
Common Stock 3,151,032/(4)/ 5.79% 1,396,648
Kleiner, Perkins, Caufield Series A Preferred 4,875 16.25% 4,875
& Byers VII, L.P.
Common Stock 272,347 * 272,346
KPCB Information Series A Preferred 125 * 125
Sciences Zaibatsu
Fund II Common Stock 6,983 * 6,983
Chase Securities Inc. Series B Preferred 10,000 80.0% 10,000
Series C Preferred 7,000 46.67% 7,000
Common Stock 934,580 1.72% 934,580
High Point Keller Series B Preferred 2,500 20.0% 2,500
Limited Partnership
Common Stock 312,138/(5)/ * 137,438
The Oppenheimer Series C Preferred 5,000 33.33% 500
Bond Fund For Growth
Common Stock 409,431/(6)/ * 274,877
</TABLE>
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<TABLE>
<CAPTION>
SHARES TO BE
REGISTERED
NAME OF SELLING SHARES BENEFICIALLY OWNED PRIOR HEREBY IN
STOCKHOLDER SECURITY TO OFFERING /(1)(2)/ OFFERING/ (1)(2)/
- ------------------ ------------------ -------------------------------- -----------------
NUMBER PERCENT/(3)/
------------------ --------------
<S> <C> <C> <C> <C>
John N. Palmer Series C Preferred 1,500 10.0% 1,500
Common Stock 1,913,122/(7)/ 3.51% 82,463
Jai P. Bhagat Series C Preferred 500 3.33% 500
Common Stock 487,326/(8)/ * 27,488
OMC Realty Corporation Series C Preferred 500 3.33% 500
Profit Sharing Plan and
Trust/(9)/ Common Stock 265,700/(10)/ * 27,488
St. Dominic Health Series C Preferred 500 3.33% 500
Services, Inc.
Common Stock 27,488 * 27,488
---------
Total Series A Preferred 30,000
Series B Preferred 12,500
Series C Preferred 15,000
Common Stock 7,780,147
=========
</TABLE>
- -------------
* Less than 1%.
/1/ May be increased to include shares of PIK Preferred Stock acquired as
dividends. See "Description of Capital Stock."
/2/ May be increased to include shares of Common Stock acquired through
conversion of PIK Preferred Stock. See "Description of Capital Stock."
/3/ Applicable percentage of ownership is based on 54,457,855 shares of Common
Stock outstanding on April 30, 1997.
/4/ Includes 1,396,648 shares of Common Stock issuable upon conversion of the
Series A Preferred. Gregory B. Maffei, the Treasurer of the Microsoft
Corporation, was elected a Director of the Company in May 1995. Mr. Maffei
beneficially owns 5,000 shares of Common Stock and 50,000 shares of Common
Stock obtainable upon exercise of options.
/5/ Includes (a) 137,438 shares of Common Stock issuable upon conversion of the
Series B Preferred, (b) 32,000 shares of Common Stock owned by R.B. Keller
and (c) 84,700 options to acquire shares of Common Stock owned by Richard
B. Keller II.
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/6/ Includes (a) 274,876 shares of Common Stock issuable upon conversion of the
Series C Preferred Stock and (b) 134,554 shares of Common Stock issuable
upon conversion of the $2.25 Cumulative Convertible Exchangeable Preferred
Stock.
/7/ Includes (a) 82,463 shares of Common Stock issuable upon conversion of the
Series C Preferred and (b) 1,275,000 shares of Common Stock obtainable as
of March 1, 1996 or within 60 days thereof by Mr. Palmer exercisable of
options.
/8/ Includes (a) 27,488 shares of Common Stock issuable upon conversion of the
Series C Preferred and (b) 398,338 shares of Common Stock obtainable as of
March 1, 1996 or within 60 days thereof by Mr. Bhagat upon exercise of
options.
/9/ Shares are held by R. Faser Triplett M.D. and Don Q. Mitchell, M.D. in
their capacity as acting trustees of OMC Realty Corporation Profit Sharing
Plan and Trust. Dr. Triplett has been a director of the Company since May
of 1989. 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.
/10/ Includes (a) 27,488 shares of Common Stock issuable to OMC Realty
Corporation Profit Sharing Plan and Trust upon conversion of the Series C
Preferred, (b) 107,600 shares owned by Mr. Triplett in his individual
capacity, (c) 70,000 shares of Common Stock obtainable by Dr. Triplett in
his individual capacity upon exercise of options, (d) 11,448 shares of
Common Stock owned by Dr. Triplett's children, (e) 24,132 shares of Common
Stock owned by the Mississippi Allergy Clinic, P.A. Trust and (f) 900
shares of Common Stock held by Dr. Triplett's wife. The OMC Realty
Corporation Profit Sharing Plan and Trust disclaims beneficial ownership of
the Common Shares owned by Dr. Triplett, his wife and children and the
other trusts in which Dr. Triplett acts as trustee.
- -------------------------
Except for John N. Palmer and Jai P. Bhagat, none of the Selling
Stockholders has held any position, office or material relationship with the
Company or any of its affiliates within the past three years. Mr. Palmer has
served as Chairman of the Board of Directors since October 1988 and he also
served as Chief Executive Officer of the Company from October 1988 until May
1995. Mr. Palmer also served as acting Chief Executive Officer from January 1996
until August 1996.
Jai P. Bhagat served as Vice Chairman of the Company since May 1995 and
Executive Vice President since 1988. In March 1995, Mr. Bhagat 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
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$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 basis in connection with the
relocation of his residence in January 1994. Mr. Bhagat repaid this loan in
full in April 1996.
Gregory B. Maffei is the Treasurer of the Microsoft Corporation, one of the
Selling Stockholders.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED STOCK
The Restated Certificate of Incorporation authorizes the issuance of
100,000,000 shares, consisting of 75,000,000 shares of Common Stock and
25,000,000 shares of preferred stock, par value $.01 per share (the "Preferred
Stock"), of the Company, of which 54,457,855 shares of Common Stock and
3,807,500 shares of Preferred Stock were issued and outstanding as of April 30,
1997. The Board of Directors of the Company is authorized to provide for the
issuance of Preferred Stock from time to time in one or more series, and by
filing a certificate (a "Preferred Stock Designation") pursuant to the General
Corporation Law of the State of Delaware (the "DGCL"), to establish from time to
time the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations and restrictions thereof. The Common Stock
is subject to the express terms of the Preferred Stock and any series
thereof.
COMMON STOCK
The holders of the Common Stock are entitled to one vote per share on all
matters voted on by stockholders, including elections of directors, and, except
as otherwise required by law or provided in any resolution adopted by the
Company Board of Directors with respect to any series of the Preferred Stock,
the holders of such shares exclusively possess all voting power. The Restated
Certificate of Incorporation does not provide for cumulative voting in the
election of directors. Subject to any preferential rights of any outstanding
series of the Preferred Stock, the holders of the Common Stock are entitled to
such dividends as may be declared from time to time by the Board of Directors
from funds available therefor, and upon liquidation are entitled to receive pro
rata all assets of the Company available for distribution to such holders. All
shares of the Common Stock when issued are fully paid and nonassessable and the
holders thereof do not have preemptive rights. As of April 30, 1997, 54,457,855
shares of the Common Stock were issued and outstanding.
PREFERRED STOCK
The Restated Certificate of Incorporation of the Company authorizes the
Board of Directors to establish from time to time the number of shares to be
included in each such series, and to fix the designation, powers, preferences
and rights of the shares of each such series and the qualifications, limitations
and restrictions of the Preferred Stock as the Board, in its sole discretion,
may determine without further vote or action by the stockholders. The rights,
preferences, privileges, and restrictions or qualifications of different series
of Preferred Stock may differ with respect to dividend rates, amounts payable on
liquidation, voting rights, conversion rights, redemption provisions, sinking
fund provisions, and other matters. The issuance of Preferred Stock could
decrease the amount of earnings and assets
11
<PAGE>
available for distribution to holders of Common Stock or could adversely affect
the rights and powers, including voting rights, of holders of Common Stock.
The existence of the Preferred Stock, and the power of the Board of
Directors of the Company to set its terms and issue a series of Preferred Stock
at any time without stockholder approval, could have certain anti-takeover
effects. These effects include that of making the Company a less attractive
target for a "hostile" takeover bid or rendering more difficult or discouraging
the making of a merger proposal, assumption of control through the acquisition
of a large block of Common Stock or removal of incumbent management, even if
such actions could be beneficial to the stockholders of the Company.
The description set forth below of the terms and conditions of the Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock are only
meant to be summaries and are qualified in their entirety by reference to the
Certificates of Rights and Preferences of the Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock, respectively, each of which were
filed as exhibits to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, as filed with the Commission on May 15, 1996.
Series A 7.5% Cumulative Convertible Accruing Pay-In-Kind Preferred Stock.
30,000 shares of Series A 7.5% Cumulative Convertible Accruing Pay-In-Kind
Preferred Stock (the "Series A Preferred Stock") have been authorized, of which
30,000 shares have been issued and are outstanding, as of the date of this
Prospectus, in connection with a private placement.
The holders of the Series A Preferred Stock are entitled, subject to
certain limitations, to receive dividends out of funds legally available
therefor at an annual rate of 7.5% (or $75 per share of Series A Preferred
Stock), accruable quarterly as of each March 15, June 15, September 15 and
December 15. The Company will have the option, however, to pay dividends on the
Series A Preferred Stock in the form of additional shares of Series A Preferred
Stock through the later of the fifth anniversary of the date of issuance or
until cash dividends are permitted under the Company's Amended Credit Facility
and the indenture relating to the Senior Notes. Dividends on the Series A
Preferred Stock will be cumulative and will accrue from the date of original
issue. The Company will have the option to determine the timing of the actual
declarations and payment of such dividends.
The Series A Preferred Stock ranks junior in right of payment to the
Company's outstanding $2.25 Cumulative Convertible Exchangeable Preferred Stock
(the "$2.25 Preferred Stock") and any other series of Preferred Stock
established by the Board of Directors which provide that such securities shall
rank senior to Series A Preferred Stock and pari passu to the Series B Preferred
Stock and Series C Preferred Stock. In the event of any liquidation,
dissolution or winding up of the Company, holders of Series A Preferred Stock
will be entitled to receive, following payment in full to the holders of the
$2.25 Preferred Stock of all amounts to which such holders are entitled, a
liquidation preference in the amount of $1,000 per share of Series A Preferred
Stock, plus accrued and unpaid dividends, before any payment is made or assets
are distributed to holders of the Common Stock or any other class of stock of
the Company ranking junior to the Series A Preferred Stock as to rights upon
liquidation, dissolution or winding up of the Company.
Except as required by law or with respect to the creation or amendment of
senior classes of Preferred Stock, holders of Series A Preferred Stock will not
have voting rights unless quarterly dividends on the Company's $2.25 Preferred
Stock are in arrears for two consecutive quarters, in which case, the
12
<PAGE>
number of directors of the Company will be increased by one and the holders of
Series A Preferred Stock along with the Series B Preferred Stock and Series C
Preferred Stock and any other classes of stock which ranks on parity with the
Series A Preferred Stock, voting separately as a class, will be entitled to
elect one director until the dividend arrearage has been paid. In the event
quarterly dividends on the Company's $2.25 Preferred Stock are in arrears for
four consecutive quarters, the number of directors of the Company will be
increased again by one, and the holders of Series A Preferred Stock, along with
the Series B Preferred Stock and Series C Preferred Stock and any other classes
of stock which ranks on parity with the Series A Preferred Stock, will be
entitled to elect an additional director. The Company is not subject to a
sinking fund provision with respect to the Series A Preferred Stock.
Each share of Series A Preferred Stock is convertible at any time at the
option of the holder into 55.87 shares of Common Stock of the Company (an
effective conversion price of $17.90 per share of Common Stock), subject to
adjustment upon the occurrence of certain events. The Company may redeem the
Series A Preferred Stock, in whole or in part, (a) after April 1, 1997, if the
average trading price of the Common Stock for any 20 business day period equals
or exceeds 175% of the conversion price, or (b) after April 1, 1998, in each
case, at $1,000 per share, plus accrued and unpaid dividends. The Company is
obligated to redeem 25% of the originally issued Series A Preferred Stock on
April 1, in each of the years 2003 through 2005, at $1,000 per share, plus
accrued and unpaid dividends, which, at the Company's option, may be paid in
either cash or in shares of Common Stock. The Company is obligated, to the
extent permitted by the Amended Credit Facility and the indenture relating to
the Senior Notes, to redeem all remaining shares of Series A Preferred Stock on
April 1, 2006 at $1,000 per share, plus accrued and unpaid dividends. In the
event of a change in control, the Series A Preferred Stock is redeemable at the
holder's option at $1,000 per share, plus accrued and unpaid dividends.
As of the date of this Prospectus, no shares of Common Stock have been
issued by the Company upon conversion of shares of Series A Preferred Stock.
Series B 7.5% Cumulative Accruing Pay-In-Kind Preferred Stock.
130,000 shares of Series B 7.5% Cumulative Convertible Accruing Pay-In-Kind
Preferred Stock (the "Series B Preferred Stock") have been authorized, of which
12,500 shares have been issued and are, as of the date of this Prospectus,
outstanding. The terms and conditions of the Series B Preferred Stock are
identical to the terms and conditions of the Series A Preferred Stock, except as
follows: (i) each share of Series B Preferred Stock is convertible at any time
at the option of the holder into 54.98 shares of Common Stock of the Company (an
effective conversion price of $18.19 per share of Common Stock), subject to
adjustment upon the occurrence of certain events; (ii) the Company may redeem
the Series B Preferred Stock, in whole or in part, (a) after April 17, 1997, if
the average trading price of the Common Stock for any 20 business day period
equals or exceeds 175% of the conversion price, or (b) after April 17, 1998, in
each case, at $1,000 per share plus accrued and unpaid dividends; (iii) the
Company is obligated to redeem 25% of the originally issued Series B Preferred
Stock on April 17, in each of the years 2003 through 2005, at $1,000 per share,
plus accrued and unpaid dividends, which, at the Company's option, may be paid
in either cash or in shares of Common Stock; and (iv) the Company is obligated,
to the extent permitted by the Amended Credit Facility and the indenture related
to the Senior Notes, to redeem to all remaining shares of Series B Preferred
Stock on April 1, 2006 at $1,000 per share, plus accrued and unpaid
dividends.
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<PAGE>
As of the date of this Prospectus, no shares of Common Stock have been
issued by the Company upon conversion of shares of Series B Preferred Stock.
Series C 7.5% Cumulative Accruing Pay-In-Kind Preferred Stock.
130,000 shares of Series C 7.5% Cumulative Convertible Accruing Pay-In-Kind
Preferred Stock (the "Series C Preferred Stock") have been authorized, of which
15,000 shares have been issued and, as of the date of this Prospectus, are
outstanding. The terms and conditions of the Series C Preferred Stock are
identical to the terms and conditions of the Series A Preferred Stock, except as
follows: (i) each share of Series C Preferred Stock is convertible at any time
at the option of the holder into 54.98 shares of Common Stock of the Company (an
effective conversion price of $18.19 per share of Common Stock), subject to
adjustment upon the occurrence of certain events; (ii) the Company may redeem
the Series C Preferred Stock, in whole or in part, (a) after May 7, 1997, if the
average trading price of the Common Stock for any 20 business day period equals
or exceeds 175% of the conversion price, or (b) after May 7, 1998, in each case,
at $1,000 per share plus accrued and unpaid dividends; (iii) the Company is
obligated to redeem 25% of the originally issued Series A Preferred Stock on May
7, 1996 in each of the years 2003 through 2005, at $1,000 per share, plus
accrued and unpaid dividends, which, at the Company's option, may be paid in
either cash or in shares of Common Stock; and (iv) the Company is obligated, to
the extent permitted by the Amended Credit Facility and the indenture related to
the Senior Notes, to redeem all remaining shares of Series C Preferred Stock on
April 1, 2006 at $1,000 per share, plus accrued and unpaid dividends.
As of the date of this Prospectus, no shares of Common Stock have been
issued by the Company upon conversion of shares of Series C Preferred Stock.
TRANSFER AGENT AND REGISTRAR
ChaseMellon Shareholder Services L.L.C. is the transfer agent and registrar
for the Common Stock and PIK Preferred Stock.
PLAN OF DISTRIBUTION
The Offered Shares are being registered by the Company at the request of
the Selling Stockholders.
Pursuant to this Prospectus, the Offered Shares may be sold by the Selling
Stockholder directly, though agents, underwriters or dealers as designated from
time to time while the Registration Statement to which this Prospectus relates
is effective, on the Nasdaq National Market or such other national securities
exchange or automated interdealer quotation system on which shares of Common
Stock are then listed, through negotiated transactions or through a combination
of such methods or otherwise including distributions from time to time by a
Selling Stockholder to its partners (or stockholders). The Selling Stockholders
may sell their Offered Shares on terms to be determined at the time of sale at
market prices prevailing at the time of sale or at negotiated prices.
Although none of the Selling Stockholders has advised the Company of the
manner in which it currently intends to sell the Offered Shares pursuant to this
Prospectus, the Selling Stockholders may choose to sell all or a portion of such
Offered Shares from time to time in any manner described herein.
14
<PAGE>
The methods by which the Offered Shares may be sold by the Selling Stockholder
include: (i) through brokers, acting as principal or agent, in transactions
(which may involve block transactions) on the Nasdaq National Market or such
other national securities exchange or interdealer quotation system on which the
Offered Shares are then listed, at market prices obtainable at the time of sale,
at prices related to such prevailing market prices, at negotiated prices or at
fixed prices; (ii) to underwriters who will acquire Offered Shares for their own
account and resell them in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale (any public offering price and any discount or concessions
allowed or reallowed or paid to dealers may be changed from time to time); (iii)
directly by the Selling Stockholders or through brokers or agents in private
sales at negotiated prices; or (iv) by any other legally available means. In
addition, any Offered Shares covered by this Prospectus that qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than pursuant to this Prospectus.
Offers to purchase Offered Shares may also be solicited by agents
designated by the Selling Stockholders from time to time. Underwriters or other
agents participating in an offering made pursuant to this Prospectus (as amended
or supplemented from time to time) may receive underwriting discounts and
commissions under the Securities Act, and discounts or concessions may be
allowed or reallowed or paid to dealers, and brokers or agents participating in
such transactions may receive brokerage or agent's commissions or fees.
There is currently no established trading market for the PIK Preferred
Shares, and it is uncertain whether there will be a trading market for the PIK
Preferred Shares. It is not presently anticipated that the PIK Preferred Shares
will be listed for trading on the Nasdaq National Market or otherwise.
At the time a particular offering of any Offered Shares is made hereunder,
to the extent required by law, a Prospectus Supplement will be distributed which
will set forth the number of Offered Shares being offered and the terms of the
offering, including the purchase price or public offering price, the name or
names of any underwriters, dealers or agents, the purchase price paid by any
underwriter for any Offered Shares purchased from the Selling Stockholders, any
discounts, commissions and other items constituting compensation from the
Selling Stockholders and any discounts, commissions or concessions allowed or
paid to dealers.
In order to comply with the securities laws of certain jurisdictions, the
Offered Shares offered hereby will be offered and sold hereunder in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain jurisdictions the Offered Shares offered hereby may not be
offered or sold hereunder unless the Offered Shares have been registered or
qualified for sale in such jurisdictions or an exemption from registration or
qualification is available and complied with.
The Company has been advised that, as of the date hereof, the Selling
Stockholders have made no arrangement with any broker for the sale of their
Common Stock. The Selling Stockholders and any underwriters, brokers or dealers
involved in the sale of the Common Stock hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any compensation received by them and any profit on any resale of the Common
Stock as principals may be deemed to be underwriting discounts and commissions
under the Securities Act.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Common Stock offered hereby may not
simultaneously engage in market making activities with respect to the Common
Stock for a period of two business days prior to the commencement of such
distribution. In addition, and without limiting the foregoing, the Registering
Stockholders will be
15
<PAGE>
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-6 and 10b-7,
which may limit the timing of purchases and sales by the Selling Stockholders.
The foregoing may limit the marketability of the shares of Common Stock and the
ability of any underwriter, broker, dealer or agent to engage in market making
activities.
The Company will pay substantially all the expenses incurred by the Selling
Stockholders and the Company incident to the Offering, but excluding any
underwriting discounts, fees and commissions.
In addition, pursuant to the Amended and Restated Registration Rights
Agreement, by and among the Company and the Selling Stockholders (the
"Registration Rights Agreement"), the Company has agreed to indemnify the
Selling Stockholders, their officers, directors and agents and each person who
controls such Selling Stockholder (and each underwriter and selling broker)
against certain liabilities, including liabilities under the Securities Act,
which may be incurred in connection with the sale of the Common Stock and PIK
Preferred Stock under this Prospectus. In addition, the Selling Stockholders
have agreed to indemnify the Company against certain liabilities. The
Registration Rights Agreement also provides for rights of contribution if such
indemnification is not available.
The Company has informed the Selling Stockholders of the need for delivery
of copies of this Prospectus under certain circumstances.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets for the Company's ratio of earnings to
combined fixed charges and preferred stock dividends for the periods indicated.
<TABLE>
<CAPTION>
Three Months
Ended Fiscal Years Ended December 31,
March 31, 1997 1996 1995 1994 1993 1992
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings as Combined (1) (1) (1) (1) (1) (1)
Fixed Charges and Preferred
Stock Dividends
</TABLE>
The ratio of earnings to combined fixed charges and preferred stock dividends
is calculated by dividing earnings before income taxes plus fixed charges by the
sum of (a) fixed charges which consist of interest expense, amortization of
financing costs and the portion of rental expense which is deemed to be
representative of the interest component of rental expense and (b) preferred
stock dividends.
(1) Earnings did not cover fixed charges by $23,393,000, $184,889,000,
$87,606,000 and $33,231,000 for the three months ended March 31, 1996 and
the years ended December 31, 1996, 1995 and 1994, respectively. The ratio
of earnings to fixed charges and preferred stock dividends for the years
ended December 31, 1993 and 1992 was 1.88 and 1.14, respectively.
16
<PAGE>
LEGAL MATTERS
The validity of the Common Stock and PIK Preferred Stock offered hereby
will be passed upon for the Company by Leonard Kriss, Esq., Senior Vice
President, General Counsel and Secretary of the Company.
EXPERTS
The consolidated financial statements of the Company at December 31, 1996
and 1995 and for each of the three years in the period ended December 31, 1996
incorporated by reference in this Prospectus and Registration Statement have
been audited by Arthur Andersen LLP, independent public accountants, and are
incorporated by reference herein in reliance upon their report thereon given
upon the authority of such firm as experts in accounting and auditing.
17
<PAGE>
<TABLE>
<S> <C>
No dealer, salesperson or other person has been
authorized to give any information or to make
any representations other than those contained in
this Prospectus or any related Prospectus Supple-
ment in connection with the offer contained
herein, and, if given or made, such information Mobile Telecommunication
or representations must not be relied upon as Technologies Corp.
having been authorized. Neither this Prospectus
nor any related Prospectus Supplement consti-
tutes an offer of any securities other than those
to which it relates or an offer to sell, or a solici-
tation of an offer to buy, those to which it re-
lates in any jurisdiction to any person to whom it 3,187,797 shares of Common Stock
is unlawful to make such offer in such jurisdic-
tion. Neither the delivery of this Prospectus nor 30,000 shares of Series A 7.5% Cumulative
any related Prospectus Supplement at any time Convertible
shall imply that the information herein or therein Accruing Pay-In-Kind Preferred Stock
is correct as of any time subsequent to its date.
----------------- 12,500 Shares of Series B 7.5% Cumulative
Convertible
TABLE OF CONTENTS Accruing Pay-In-Kind Preferred Stock
Page 15,000 Shares of Series C 7.5% Cumulative
---- Convertible
Accruing Pay-In-Kind Preferred Stock
Available Information................................ 2 ____________
Incorporation of Certain Documents PROSPECTUS
by Reference.................................... 2 ____________
The Company.......................................... 3
Risk Factors......................................... 4
Use of Proceeds...................................... 7
Dividend Policy...................................... 7
Selling Stockholders................................. 8
Description of Capital Stock........................ 11
Plan of Distribution................................ 14
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends................... 16
Legal Matters....................................... 17
Experts............................................. 17
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</TABLE>
