<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
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<S> <C>
Check the appropriate box:
[X] Preliminary proxy statement [ ] Confidential, for use of the Commission Only
[ ] Definitive proxy statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
POWERTEL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO]
POWERTEL, INC.
1233 O.G. SKINNER DRIVE
WEST POINT, GEORGIA 31833
(706) 645-2000
April , 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Annual Meeting") of Powertel, Inc. ("Powertel" or the "Company") to be
held on Thursday, May 21, 1998 at 10:00 a.m. local time at The Cotton Duck, 6101
20th Avenue, Valley, Alabama 36854. As described in the enclosed Proxy
Statement, at the Annual Meeting the stockholders of Powertel will be asked: (i)
to consider and vote upon a proposed amendment to the Third Restated Certificate
of Incorporation to increase the number of authorized shares of Common Stock
from 55,000,000 shares to 100,000,000 shares; (ii) to elect three directors to
serve on the Company's Board of Directors, each for a three-year term; (iii) to
ratify the appointment of Arthur Andersen LLP as independent public accountants
of the Company for the year ending December 31, 1998; and (iv) to transact such
other business as may properly come before the Annual Meeting or any
adjournments thereof.
The Board of Directors has approved the matters being submitted by the
Company for stockholder approval at the Annual Meeting and recommends that
stockholders vote: (i) FOR the approval and adoption of the proposed amendment
to the Third Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 55,000,000 shares to 100,000,000 shares;
(ii) FOR the election of the three nominees of the Board of Directors as
directors, each for a three-year term; and (iii) FOR the ratification of the
appointment of Arthur Andersen LLP as independent public accountants of the
Company for the year ending December 31, 1998.
Included with the Proxy Statement is a copy of the Company's Annual
Report to Stockholders. We encourage you to read the Annual Report. It includes
the Company's audited financial statements for the year ended December 31, 1997
as well as information on the Company's operations, markets, products and
services.
We urge you to review carefully the enclosed materials and to return
your proxy promptly. Whether or not you plan to attend the Annual Meeting,
please sign and promptly return your proxy card in the enclosed postage paid
envelope. If you attend the meeting, you may vote in person if you wish, even
though you have previously returned your proxy.
Sincerely,
---------------------------------------
Allen E. Smith
Chief Executive Officer
<PAGE> 3
POWERTEL, INC.
1233 O.G. SKINNER DRIVE
WEST POINT, GEORGIA 31833
(706) 645-2000
-------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 1998
-------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of Powertel, Inc. ("Powertel" or the "Company") will be held
on Thursday, May 21, 1998 at 10:00 a.m. local time at The Cotton Duck, 6101 20th
Avenue, Valley, Alabama 36854, for the following purposes:
1. to consider and vote upon the proposed amendment to the
Company's Third Restated Certificate of Incorporation to increase the
number of authorized shares of Common Stock from 55,000,000 shares to
100,000,000 shares (Proposal 1);
2. to elect three directors to serve on the Company's Board
of Directors, each for a three-year term (Proposal 2);
3. to ratify the appointment of Arthur Andersen LLP as
independent public accountants of the Company for the year ending
December 31, 1998 (Proposal 3); and
4. to transact such other business as may properly come
before the Annual Meeting or any adjournments thereof.
Pursuant to the Restated By-laws, the Board of Directors of the Company
has fixed the close of business on Wednesday, April 1, 1998 as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. Only record holders of the Common Stock of the Company at the
close of business on that date are entitled to notice of and to vote at the
Annual Meeting or any adjournments thereof.
By Order of the Board of Directors
---------------------------------------
Allen E. Smith
Chief Executive Officer
April , 1998
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE. YOU MAY, IF YOU
WISH, REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE TIME IT IS VOTED.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
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Page
----
<S> <C>
SUMMARY ..................................................................... 2
INTRODUCTION ................................................................ 4
ANNUAL MEETING .............................................................. 4
Outstanding Shares and Voting Rights ............................... 4
Record Date ............................................... 4
Quorum .................................................... 4
Voting Rights and Related Matters ......................... 4
Dissenters' Rights ........................................ 4
Proxies ............................................................ 5
AMENDMENT TO THIRD RESTATED CERTIFICATE OF INCORPORATION .................... 6
Text of Amendment 6................................................. 6
Reasons for and Possible Effects of the Proposed Amendment ......... 6
Anti-Takeover Effect of Proposed Amendment ......................... 6
Required Vote and Related Matters .................................. 7
ELECTION OF DIRECTORS ....................................................... 8
Information as to Nominees, Other Directors and Executive Officers . 8
Director Nominees .................................................. 9
Other Directors and Executive Officers ............................. 10
Committees of the Board of Directors and Nominations by
Stockholders...................................................... 12
Certain Relationships and Related Transactions ..................... 12
ITC Holding ............................................... 12
Other Transactions ........................................ 13
Compliance with Section 16(a) of the Exchange Act .................. 14
EXECUTIVE COMPENSATION ...................................................... 15
Option Grants ...................................................... 16
Option Exercises and Holdings ...................................... 16
Benefit Plans ...................................................... 16
Restricted Stock Plan ..................................... 16
Employee Stock Option Plan ................................ 17
401(k) Plan ............................................... 17
Compensation of the Company's Directors ............................ 18
Director Fees and Related Matters ......................... 18
Nonemployee Stock Option Plan ............................. 18
Compensation Committee Interlocks and Insider Participation ........ 18
Compensation/Stock Option Committee Report on Executive Compensation 19
Base Salary ............................................... 19
Management Incentive Compensation Plan .................... 19
Long-term Incentive Compensation .......................... 20
Other ..................................................... 20
1997 Compensation of Chief Executive Officer .............. 20
Pay Deductibility Limit ................................... 21
Comparative Company Performance .................................... 21
Beneficial Ownership of Capital Stock .............................. 22
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS ............... 24
Required Vote and Related Matters .................................. 24
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS ................................ 25
VOTING PROCEDURES ........................................................... 25
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE ........................... 25
AVAILABLE INFORMATION ....................................................... 25
OTHER MATTERS ............................................................... 26
</TABLE>
<PAGE> 5
POWERTEL, INC.
1233 O.G. SKINNER DRIVE
WEST POINT, GEORGIA 31833
(706) 645-2000
--------------------------------------------------
PROXY STATEMENT FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 1998
--------------------------------------------------
This Proxy Statement is being furnished to the stockholders of
Powertel, Inc., a Delaware corporation ("Powertel" or the "Company"), in
connection with the solicitation of proxies by the Board of Directors of
Powertel (the "Board of Directors" or the "Board") for use at the Annual Meeting
of Stockholders (the "Annual Meeting") of Powertel to be held at 10:00 a.m.
local time, on Thursday, May 21, 1998 at The Cotton Duck, 6101 20th Avenue,
Valley, Alabama 36854, and at any adjournments thereof. This Proxy Statement and
the accompanying form of proxy are first being mailed to the stockholders of the
Company on or about April , 1998.
At the Annual Meeting, stockholders will be asked: (i) to consider and
vote upon a proposed amendment to the Third Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock from
55,000,000 shares to 100,000,000 shares; (ii) to elect three directors to serve
on the Company's Board of Directors, each for a three-year term; (iii) to ratify
the appointment of Arthur Andersen LLP as independent public accountants of the
Company for the year ending December 31, 1998; and (iv) to transact such other
business as may properly come before the Annual Meeting or any adjournments
thereof.
------------------------
IN DETERMINING WHETHER TO APPROVE THE PROPOSALS SET FORTH IN THIS PROXY
STATEMENT, STOCKHOLDERS SHOULD CAREFULLY CONSIDER ALL OF THE INFORMATION
INCLUDED IN THIS PROXY STATEMENT.
------------------------
THE DATE OF THIS PROXY STATEMENT IS APRIL , 1998.
<PAGE> 6
SUMMARY
The following is a summary of certain information contained in this
Proxy Statement. Reference is made to, and this Summary is qualified in its
entirety by, the more detailed information contained in this Proxy Statement.
Stockholders are urged to review carefully the entire Proxy Statement, including
the documents incorporated by reference herein.
<TABLE>
<S> <C>
Date, Time, Place of
Meeting and Matters to be
Presented for Action.......................... The Annual Meeting of Stockholders of Powertel will be held on Thursday, May
21, 1998 at 10:00 a.m. local time at The Cotton Duck, 6101 20th Avenue,
Valley, Alabama 36854.
At the Annual Meeting, and at any adjournments thereof, stockholders will be
asked: (i) to consider and vote upon a proposed amendment to the Third
Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 55,000,000 shares to 100,000,000
shares (Proposal 1, see page 6); (ii) to elect three directors to serve
on the Company's Board of Directors, each for a three-year term
(Proposal 2, see page 8); (iii) to ratify the appointment of Arthur
Andersen LLP as independent public accountants of the Company for the
year ending December 31, 1998 (Proposal 3, see page 24); and (iv) to
transact such other business as may properly come before the Annual
Meeting or any adjournments thereof. See "Introduction" and "Annual
Meeting."
Record Date...................................... Only stockholders of record at the close of business on Wednesday, April 1,
1998 (the "Record Date") are entitled to notice of and to vote at the
Annual Meeting or any adjournment thereof. See "Annual Meeting--
Outstanding Shares and Voting Rights--Record Date."
Quorum........................................... The holders of a majority of the stock issued and outstanding and entitled to
vote, present in person or represented by proxy, shall constitute a
quorum. See "Annual Meeting--Outstanding Shares and Voting
Rights--Quorum."
Voting Rights and Related
Matters....................................... Each stockholder is entitled to one vote per share with respect to all matters,
including the election of directors. The affirmative vote of a
majority of the outstanding shares of Common Stock entitled to vote
thereon is required to approve the amendment to the Third Restated
Certificate of Incorporation to increase the number of authorized
shares of Common Stock. Directors will be elected by a plurality of the
votes cast by the shares entitled to vote. The affirmative vote of a
majority of the total votes cast is required to ratify the appointment
of Arthur Andersen LLP as independent public accountants of the Company
for the year ending December 31, 1998. See "Annual Meeting--Outstanding
Shares and Voting Rights--Voting Rights and Related Matters."
</TABLE>
2
<PAGE> 7
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Dissenters' Rights........................... Stockholders have no dissenters' rights in connection with the approval of
any of the matters to be presented at the Annual Meeting. See
"Annual Meeting--Outstanding Shares and Voting Rights--Dissenters'
Rights."
Revocability of Proxies...................... A Powertel stockholder giving a proxy in the form accompanying this Proxy
Statement has the power to revoke the proxy prior to its exercise.
A proxy may be revoked by: (i) delivering a written notice of
revocation to the Secretary of the Company prior to the Annual
Meeting; (ii) delivering to the Company a duly executed proxy
bearing a later date; or (iii) attending the Annual Meeting and
voting in person. See "Annual Meeting--Proxies."
Board Recommendations........................ The Board has approved and recommends the approval by the stockholders of:
(i) the proposed amendment to the Third Restated Certificate of
Incorporation to increase the number of authorized shares of Common
Stock from 55,000,000 shares to 100,000,000 shares; (ii) the election
of three directors to serve on the Company's Board of Directors;
and (iii) the ratification of the appointment of Arthur Andersen
LLP as the Company's independent public accountants for the year ending
December 31, 1998.
</TABLE>
3
<PAGE> 8
INTRODUCTION
This Proxy Statement is being furnished to the stockholders of Powertel
in connection with the solicitation of proxies for use at the Annual Meeting of
Stockholders to be held on Thursday, May 21, 1998 at 10:00 a.m. local time at
The Cotton Duck, 6101 20th Avenue, Valley, Alabama 36854.
At the Annual Meeting, stockholders will be asked: (i) to consider and
vote upon a proposed amendment to the Third Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock from
55,000,000 shares to 100,000,000 shares (Proposal 1); (ii) to elect three
directors to serve on the Company's Board of Directors, each for a three-year
term (Proposal 2); (iii) to ratify the appointment of Arthur Andersen LLP as
independent public accountants of the Company for the year ending December 31,
1998 (Proposal 3); and (iv) to transact such other business as may properly come
before the Annual Meeting or any adjournments thereof.
Except for procedural matters incident to the conduct of the Annual
Meeting, the Company does not know of any matters other than those described in
the Notice of Annual Meeting that are to come before the Annual Meeting. If any
other matters are properly brought before the Annual Meeting, the persons named
in the accompanying proxy will vote the shares represented by such proxies on
such matters as determined by a majority of the Board of Directors.
ANNUAL MEETING
OUTSTANDING SHARES AND VOTING RIGHTS
Record Date. Only stockholders of record at the close of business on
Wednesday, April 1, 1998 are entitled to notice of and to vote at the Annual
Meeting or any adjournments thereof. At the close of business on the Record
Date, the Company had outstanding shares of Common Stock held of
record by approximately persons.
Quorum. The Restated By-laws provide that the holders of a majority of
the stock issued and outstanding and entitled to vote, present in person or
represented by proxy, shall constitute a quorum. Abstentions and broker
non-votes will be treated as shares that are present, or represented, and
entitled to vote for purposes of determining the presence of a quorum at the
Annual Meeting.
Voting Rights and Related Matters. Each stockholder is entitled to one
vote per share with respect to all matters, including the election of directors.
There is no cumulative voting of shares. Stockholders' votes will be tabulated
by the persons appointed by the Chairman of the Annual Meeting to act as
inspectors of election for the Annual Meeting. The affirmative vote of a
majority of the outstanding shares of Common Stock entitled to vote thereon is
required to approve the amendment to the Third Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock.
Directors will be elected by a plurality of the votes cast by the shares
entitled to vote. The affirmative vote of a majority of the total votes cast is
required to ratify the appointment of Arthur Andersen LLP as independent public
accountants of the Company for the year ending December 31, 1998. Abstentions
are considered shares present and entitled to vote under the Delaware General
Corporation Law (the "Delaware Law") and, therefore, will have the same effect
as a negative vote with respect to the proposal to amend the Third Restated
Certificate of Incorporation to increase the number of authorized shares. Broker
non-votes will have the same effect as a negative vote with respect to the
proposal to amend the Third Restated Certificate of Incorporation.
Dissenters' Rights. Stockholders are not entitled under the Delaware
Law to appraisal rights in connection with the approval of any of the matters to
be presented at the Annual Meeting.
4
<PAGE> 9
PROXIES
The presence of a stockholder at the Annual Meeting will not
automatically revoke such stockholder's proxy. However, a stockholder giving a
proxy in the form accompanying this Proxy Statement has the power to revoke the
proxy prior to its exercise by: (i) delivering prior to the Annual Meeting a
written notice of revocation bearing a later date to Lorena G. Turner, Assistant
Secretary, Powertel, Inc., 1233 O.G. Skinner Drive, West Point, Georgia 31833;
(ii) delivering to the Company a duly executed proxy bearing a later date; or
(iii) attending the Annual Meeting and voting in person. The shares represented
by each properly executed proxy not subsequently revoked will be voted at the
Annual Meeting in accordance with the instructions contained therein. IF NO
SPECIFICATION IS MADE, THE PROXY WILL BE VOTED: (I) FOR PROPOSAL 1 TO APPROVE
AND ADOPT THE PROPOSED AMENDMENT TO THE THIRD RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM
55,000,000 SHARES TO 100,000,000 SHARES; (II) FOR PROPOSAL 2 TO ELECT THE THREE
NOMINEES OF THE BOARD OF DIRECTORS AS DIRECTORS, EACH FOR A THREE-YEAR TERM; AND
(III) FOR PROPOSAL 3 TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR THE YEAR ENDING DECEMBER 31,
1998.
The cost of soliciting proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone or facsimile transmission by officers, directors and employees of the
Company, who will not be compensated specifically for such solicitation
activities. Arrangements also will be made with brokerage houses and other
custodians, nominees and fiduciaries for forwarding solicitation materials to
the beneficial owners of shares held of record by such persons, and the Company
will reimburse such persons for their reasonable expenses incurred in that
connection.
HOLDERS OF SHARES OF COMMON STOCK ARE REQUESTED TO COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY TO THE COMPANY IN THE POSTAGE
PAID ENVELOPE THAT HAS BEEN PROVIDED.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL
OF THE PROPOSALS SET FORTH IN THIS PROXY STATEMENT.
5
<PAGE> 10
AMENDMENT TO THIRD RESTATED CERTIFICATE OF INCORPORATION
(PROPOSAL 1)
The Company's Board of Directors has approved and recommends the
adoption by stockholders of the following amendment to Section 5.1 of the Third
Restated Certificate of Incorporation, which amendment would increase the number
of authorized shares of Common Stock from 55,000,000 shares to 100,000,000
shares.
TEXT OF AMENDMENT
"The Third Restated Certificate of Incorporation of the Corporation
hereby is amended by deleting Section 5.1 thereof in its entirety, and inserting
in lieu thereof the following:
5.1 AUTHORIZED SHARES. The aggregate number of shares of stock
which the Corporation shall have the authority to issue is 101,000,000.
1,000,000 of such shares shall be Preferred Stock, having a par value
of $.01 per share ("Preferred Stock"). 100,000,000 of such shares shall
be Common Stock, all of one class, having a par value of $.01 per share
("Common Stock")."
The Third Restated Certificate of Incorporation, as presently in
effect, provides that the aggregate number of shares of stock which the Company
shall have authority to issue is 56,000,000 shares, consisting of 55,000,000
shares of Common Stock and 1,000,000 shares of Preferred Stock. On April 1,
1998, there were issued and outstanding shares of Common Stock,
including shares outstanding under the Company's 1995 Employee
Restricted Stock Plan. The following shares of Preferred Stock have been issued:
100,000 shares of Series A Convertible Preferred Stock; 100,000 shares of Series
B Convertible Preferred Stock; 50,000 shares of Series C Convertible Preferred
Stock; and 50,000 shares of Series D Convertible Preferred Stock (collectively,
the "Outstanding Convertible Preferred Stock"). Thus, as of April 1, 1998,
shares of Common Stock and 700,000 shares of Preferred Stock remained
available for issuance without further action by the Company's stockholders.
REASONS FOR AND POSSIBLE EFFECTS OF THE PROPOSED AMENDMENT
The Board of Directors believes that the proposed increase in the
authorized shares of Common Stock is desirable to enhance the Company's
flexibility in connection with possible future actions, such as stock splits,
stock dividends, financings, mergers, acquisitions and other general corporate
purposes. Having such authorized capital stock available for issuance in the
future would give the Company greater flexibility and would allow additional
shares of Common Stock to be issued without the expense and delay of a special
meeting of stockholders. Elimination of the delay occasioned by the necessity of
obtaining stockholder approval may better enable the Company to engage in
financing transactions and acquisitions which take full advantage of changing
market conditions. There are no present agreements, arrangements or
understandings concerning the issuance of such shares.
The proposed shares of Common Stock for which authorization is sought
would be part of the existing class of such stock and would increase the number
of shares of Common Stock available for issuance by the Company, but would have
no effect upon the terms of the Common Stock or the rights of the holders of
such stock. If and when issued, the proposed additional authorized shares of
Common Stock would have the same rights and privileges as the shares of Common
Stock presently outstanding. Holders of Common Stock will not have preemptive
rights to purchase additional shares of Common Stock.
ANTI-TAKEOVER EFFECT OF PROPOSED AMENDMENT
The existence of the additional authorized shares of Common Stock could
have the effect of discouraging an attempt by any person or entity, through the
acquisition of a substantial number of shares of Common Stock, to acquire
control of the Company with a view to imposing a merger, sale of all or any part
of the Company's assets or a similar transaction. Although the Board of
Directors has no present intention of doing so, it could issue shares of Common
Stock or Preferred Stock in a public or private sale to purchasers who might
agree with the Board of
6
<PAGE> 11
Directors in opposing an attempt to change control of the Company. Thus, the
issuance of the additional shares of Common Stock could be used to dilute the
stock ownership of a takeover bidder. In addition, the Board of Directors may
issue, without stockholder action, Common Stock, or warrants or other rights to
acquire such stock, with terms designed to protect against certain takeovers,
including partial takeovers and front-end loaded, two-step takeovers and
freeze-outs and to control stockholder acquisitions, should the Board of
Directors consider the action of such entity or person not to be in the best
interests of the Company and its stockholders. To the extent that potential
takeovers are thereby discouraged, stockholders may not have the opportunity to
dispose of all or a part of their stock at a price that may be higher than that
prevailing in the market. However, it also is possible that making shares of
authorized, but unissued, Common Stock and Preferred Stock available for
issuance may have the effect of increasing the price offered to the Company's
stockholders in a tender or exchange offer.
The proposed amendment to the Third Restated Certificate of
Incorporation is not intended as an anti-takeover measure and is not part of a
plan by the Board of Directors to adopt a series of anti-takeover measures. The
Company's Board of Directors does not presently intend to propose any measures
designed to discourage any unfair or unnegotiated takeovers but reserves the
right to propose and adopt such measures if the Board of Directors determines
that such measures are in the best interests of the Company and its
stockholders.
REQUIRED VOTE AND RELATED MATTERS
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote thereon is required to approve the amendment to the Third
Restated Certificate of Incorporation to increase the Company's number of
authorized shares of Common Stock from 55,000,000 shares to 100,000,000 shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 1.
7
<PAGE> 12
ELECTION OF DIRECTORS
(PROPOSAL 2)
Pursuant to the Third Restated Certificate of Incorporation, the Board
of Directors shall consist of not fewer than three nor more than 15 directors,
divided into three classes, as nearly equal in number as possible, with the
number of directors determined within such limits by resolution of the Board of
Directors. The term of office of only one class of directors expires in each
year, and their successors are elected for terms of three years and until their
successors are elected and qualified. The directors elected at the Annual
Meeting will hold office for a term of three years and until their successors
are elected and qualified.
At the Annual Meeting, three directors will be elected, each for a
three-year term. Unless otherwise specified on the proxy, it is the intention of
the persons named in the proxy to vote the shares represented by each properly
executed proxy for the election as directors of the persons named below as
nominees. All nominees are now directors of the Company. The Board of Directors
believes that the nominees will stand for election and will serve if elected as
directors. If, however, any person nominated by the Board fails to stand for
election or is unable to accept election, the proxies will be voted for the
election of such other person as the Board of Directors may recommend. Directors
will be elected by a plurality of the votes cast by the shares of Common Stock
entitled to vote in the election at the Annual Meeting. There are no cumulative
voting rights in the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
BOARD'S NOMINEES FOR ELECTION AS DIRECTORS OF THE COMPANY.
INFORMATION AS TO NOMINEES, OTHER DIRECTORS AND EXECUTIVE OFFICERS
The director nominees, other directors and executive officers of the
Company and their ages and terms of office (in the case of directors) as of
March 23, 1998 are as follows:
<TABLE>
<CAPTION>
TERM AS
DIRECTOR
DIRECTOR NOMINEES AGE POSITION(S) WITH COMPANY EXPIRES
----------------- --- ------------------------ --------
<S> <C> <C> <C>
Campbell B. Lanier, III................... 47 Chairman of the Board of Directors 1998
Allen E. Smith............................ 48 President, Chief Executive Officer and Director 1998
Lawrence M. Gressette, Jr................. 66 Director 1998
<CAPTION>
OTHER DIRECTORS TERM AS
AND EXECUTIVE DIRECTOR
OFFICERS AGE POSITION(S) WITH COMPANY EXPIRES
--------------- --- ------------------------ ---------
<S> <C> <C> <C>
Fred G. Astor, Jr......................... 46 Executive Vice President and Chief Financial Officer --
Rodney D. Dir............................. 40 Executive Vice President-- PCS --
Nicholas J. Jebbia........................ 50 Executive Vice President-- PCS --
George R. Johnson......................... 56 Executive Vice President-- PCS --
Walter R. Pettiss......................... 64 Executive Vice President-- PCS --
Michael P. Tatom.......................... 45 Executive Vice President-- PCS --
Donald W. Burton.......................... 54 Director 1999
Bert G. Clifford.......................... 78 Director 1999
O. Gene Gabbard........................... 57 Director 2000
Maurice P. O'Connor....................... 47 Director 1999
William B. Scott, III..................... 50 Director and Secretary 2000
William B. Timmerman...................... 51 Director 2000
Donald W. Weber........................... 61 Director 2000
</TABLE>
8
<PAGE> 13
Certain of the executive officers and directors listed above hold or
have held positions in several corporations related to the Company, including
ITC Holding Company, Inc. ("ITC Holding"), SCANA Corporation ("SCANA") and
various subsidiaries of ITC Holding. In addition, certain officers and directors
have ownership interests in ITC Holding and SCANA. The Company has adopted a
policy requiring that any material transactions between the Company and persons
or entities affiliated with officers, directors or principal stockholders of the
Company be on terms no less favorable to the Company than reasonably could have
been obtained in arms' length transactions with independent third parties. Any
other matters involving potential conflicts of interest are to be resolved on a
case-by-case basis. See "-- Certain Relationships and Related Transactions."
Officers of the Company are appointed at the Board's first meeting
after each annual meeting of stockholders. Officers hold office for a term of
one year and until their successors are chosen and qualify or until their
earlier resignation or removal.
DIRECTOR NOMINEES
CAMPBELL B. LANIER, III has served as Chairman of the Board of
Directors of the Company since its inception in April 1991 and was Chief
Executive Officer of the Company from its inception to September 1993. Mr.
Lanier serves as Chairman of the Board and Chief Executive Officer of ITC
Holding and has served as a director of ITC Holding (or its predecessor
companies) since that company's inception in 1985. In addition, Mr. Lanier
served as a director and President of Interstate Cellular, Inc. since its
inception in 1989 until its dissolution in June 1995, and he also is an officer
and director of several ITC Holding subsidiaries. Since 1997, Mr. Lanier has
been a director of Innotrac Corporation ("Innotrac"), which provides customized,
technology-based marketing support services, and Chairman of the Board and a
director of ITC DeltaCom, Inc. ("ITC DeltaCom"), which provides retail and
wholesale telecommunications services. Since 1995, he has been a director of K&G
Mens Centers, Inc. ("K&G Mens Centers"), an operator of retail mens clothing
stores, and a director of KNOLOGY Holdings, Inc. ("KNOLOGY"), a broadband
communications services company. Since 1994, he has been a director of
MindSpring Enterprises, Inc. ("MindSpring"), an Internet access provider. Since
1990, he has been a director of National Vision Associates, Ltd., a full service
optical retailer, and Vice Chairman of the Board of AvData Systems, Inc.
("AvData"), a company providing satellite data transmission services. He served
as Chairman of the Board of AvData from 1988 to 1990. From 1984 to 1989, Mr.
Lanier served as Chairman of the Board of Async Corporation ("Async"), a company
providing voice message services. Mr. Lanier also served as Vice President --
Industry Relations of Telecom*USA, Inc. ("Telecom") from 1984 to 1988 and as
Senior Vice President Industry Relations from January 1989 until Telecom's
merger with MCI Communications Corporation ("MCI") in August 1990. From 1984 to
1985, he served as Chief Executive Officer of SouthernNet, Inc. ("SouthernNet")
and from 1985 to 1986 he was Vice Chairman of the Board of SouthernNet. Since
1988, Mr. Lanier has also been a special limited partner in the South Atlantic
Venture Fund II, Limited Partnership and South Atlantic Venture Fund III,
Limited Partnership, of which South Atlantic Venture Partners II, Limited
Partnership and South Atlantic Venture Partners III, Limited Partnership,
respectively, are the general partners and of each of which Donald W. Burton,
who is a Director of the Company, is the managing general partner. Mr. Lanier
also has served as a Managing Director of South Atlantic Private Equity Fund IV,
Limited Partnership since 1997.
ALLEN E. SMITH has been Chief Executive Officer of the Company since
September 1993, has been the President and a Director of the Company since
January 1991, and was Chief Operating Officer of the Company from January 1991
to September 1993, when he became Chief Executive Officer. Mr. Smith has been a
Vice President of ITC Holding since January 1991. From 1988 to 1990, Mr. Smith
held several executive positions with Telecom, including Senior Vice President
- -- Customer Services, Senior Vice President -- Administration and Senior Vice
President -- Human Resources and Administration. During 1988, Mr. Smith was Vice
President -- Telemarketing and Training at SouthernNet. From 1987 to 1988, Mr.
Smith was the Vice President of Marketing of Southland Communications
Corporation ("Southland"), a telecommunications company. During 1986, Mr. Smith
was the Executive Vice President and General Manager of Southland Cellular,
Inc., a subsidiary of Southland, where he managed the Pensacola, Florida
metropolitan service area, as well as voice and digital paging services.
LAWRENCE M. GRESSETTE, JR. was appointed a Director of the Company in
1995. From 1990 to 1997, he served as Chairman, President and Chief Executive
Officer of SCANA, a diversified utility company. Since April
9
<PAGE> 14
1997, Mr. Gressette has served as a director and as Chairman of the Executive
Committee of the Board of Directors of SCANA. He also is a director of Wachovia
Corporation, a bank holding company, and The Liberty Corporation, a holding
company of Liberty Life Insurance Co. and Cosmos Broadcasting Corp.
OTHER DIRECTORS AND EXECUTIVE OFFICERS
Fred G. Astor, Jr. has been Chief Financial Officer of the Company
since May 1991, served as Treasurer of the Company from May 1991 until May 1995,
and was Vice President of the Company from May 1991 until May 1995, when he was
named Executive Vice President. Mr. Astor worked for Contel Credit Corporation,
a finance subsidiary which was acquired by General Electric Capital Corporation
from 1976 to 1989 in various financial capacities. From 1983 to 1987, he served
as the Assistant Corporate Controller in charge of financial reporting, and from
1987 until late 1989, he served as Vice President -- Finance for Contel
Corporation, a telecommunications company which merged with GTE Corporation in
March 1991 ("Contel"). In January 1990, he joined Telecom as its Vice President
- -- Finance/Southern Division, and he served in that capacity until Telecom's
merger with MCI was consummated. In November 1990, Mr. Astor accepted a position
with ProAir Services, L.P. as Vice President -- Finance. He served as that
company's Chief Financial Officer until accepting his current position with the
Company.
RODNEY D. DIR joined the Company in August 1996 as Executive Vice
President and General Manager for the Atlanta, Georgia major trading area
("MTA"). From 1995 to 1996, Mr. Dir served as Area General Manager for GTE
Mobilnet Incorporated ("GTE Mobilnet") in California. He joined GTE Telephone
Operations in 1984 serving in various finance, accounting and regulatory
positions. In 1989, he joined GTE Mobilnet's cellular division. Before joining
GTE Telephone Operations, Mr. Dir worked with Kiesling and Associates, a
certified public accounting firm, providing accounting and management services
to telecommunications clients.
NICHOLAS J. JEBBIA joined the Company in January 1996 as Executive Vice
President and General Manager for the Memphis, Tennessee/Jackson, Mississippi
MTA. From 1990 to 1995, Mr. Jebbia served as Vice President and General Manager
of New Ventures for National Data Corporation. From 1983 to 1990, he was Vice
President of Service with United Telecommunications. Prior to 1983, he served in
various management positions with Ohio Bell Telephone.
GEORGE R. JOHNSON joined the Company as a Vice President -- PCS in May
1995 and was named Executive Vice President and General Manager for the
Birmingham, Alabama MTA in August 1995. From 1990 to 1995, he served as a
Product Manager for BellSouth Telecommunications, Inc. From 1989 to 1990, he was
National Sales Manager for BellSouth Products, Inc., a consumer telephone
products company.
WALTER R. PETTISS joined the Company as a Vice President -- PCS in
April 1995 and was named Executive Vice President and General Manager for the
Jacksonville, Florida MTA in August 1995. From 1992 to 1994, Mr. Pettiss served
as Chief Operating Officer of WJB-TV, L.P., a provider of wireless cable
television service, and its successor corporation, Wireless Broadcasting System
of America, Inc. Since 1991, he has served as a director of Electronic Power
Technology, Inc. ("EPT"). In 1995, he became Chairman of the Board of Directors
of EPT. In December 1995, EPT filed for protection of its assets under Chapter 7
of the U.S. Bankruptcy Code. From 1990 to 1992, he served as Chief Operating
Officer of WJB-Video, L.P., a Blockbuster Video franchisee. From 1987 through
1989, he was a Senior Vice President of SouthernNet.
MICHAEL P. TATOM joined the Company in February 1995 as Director of
Sales. Since May 1995, he has served as Vice President and General Manager of
the Company's southern cellular division and, in March 1997, was named Executive
Vice President and General Manager for certain of the Company's to-be-acquired
PCS properties in Kentucky and Tennessee. From 1990 to 1995, Mr. Tatom served as
a Branch Manager and General Manager of the Small Business Division of AT&T
Corp.
DONALD W. BURTON was appointed a Director of the Company in 1995. He
has served as the Managing General Partner of the South Atlantic Venture Funds
since 1983. He has served as the General Partner of The Burton Partnership,
Limited Partnership since 1979. Mr. Burton serves as a Director of MTL Inc., a
bulk
10
<PAGE> 15
transportation service company, K&G Mens Centers, ITC DeltaCom, the Heritage
Group of Mutual Funds and several private companies. He is also a director of
the National Venture Capital Association.
BERT G. CLIFFORD was appointed Vice Chairman of the Board of Directors
of the Company on March 28, 1994 concurrent with the Company's acquisition of
Unity Cellular Systems, Inc. ("Unicel"). Mr. Clifford has been the Chairman of
the Board and President of Unity Telephone Company since 1963. In connection
with the Company's acquisition of Unicel, Mr. Clifford retired from his
positions as the Chairman of the Board of Directors, President and Chief
Executive Officer of Unicel, which positions he had held since Unicel's
inception in 1987. Mr. Clifford is the father-in-law of Maurice P. O'Connor, who
is also a Director of the Company.
O. GENE GABBARD has been a Director of the Company since February 1992.
He has worked independently as an entrepreneur and consultant since February
1993. Mr. Gabbard currently serves as a director of ITC Holding, MindSpring,
ITC DeltaCom and two telecommunications technology companies, Dynatech
Corporation and Adtran, Inc. From August 1990 through January 1993, he served as
Executive Vice President and Chief Financial Officer of MCI. He served in
various senior executive capacities, including Chairman of the Board, President
and Chief Executive Officer of Telecom from December 1988 until Telecom's merger
with MCI in August 1990. From July 1984 to December 1988, he was Chairman and/or
President of SouthernNet.
MAURICE P. O'CONNOR has been a Director of the Company since March 1994
and served until May 1997 as a Vice President of the Company, with general
responsibility for the operations of Unicel, a former subsidiary of the Company
that provided cellular telephone service in the State of Maine. In 1997, the
Company sold substantially all of its assets in the State of Maine to MRCC, Inc.
("MRCC"), a subsidiary of Rural Cellular Corporation. Mr. O'Connor currently
serves as Vice President and General Manager of MRCC. He also serves as a
director of Unitel, Inc., a local exchange carrier in the State of Maine. Mr.
O'Connor served as General Manager of Unicel from 1991 until March 1994 and had
been employed by Unicel in other management capacities since 1989. From 1984
until joining Unicel in 1989, Mr. O'Connor was President and General Manager of
New England Landscape & Irrigation Company in Palmer, Massachusetts. From 1977
to 1984, he was the President of Cypress Landscaping & Construction in Houston,
Texas. Mr. O'Connor is the son-in-law of Bert G. Clifford, who is also a
Director of the Company.
WILLIAM H. SCOTT, III served as Vice Chairman of the Board of Directors
of the Company from its inception in April 1991 until February 7, 1996 and was
reappointed as a Director and Secretary on March 21, 1996. Mr. Scott has served
as President of ITC Holding (or its predecessor company) since December 1991 and
has been a director of ITC Holding (or its predecessor company) since May 1989.
He served as a director and Executive Vice President of Interstate Cellular from
May 1989 until its dissolution in June 1995, and he also is an officer and
director of several other ITC Holding subsidiaries. Mr. Scott has served on the
Boards of Directors of AvData since 1988, of MindSpring since 1994, of KNOLOGY
since 1995 and of ITC DeltaCom and Innotrac since 1997. Since 1997, Mr. Scott
also has served as a director of IQI, Inc., a company which provides
telemarketing services. From 1985 to 1989, Mr. Scott was an officer and director
of Async. Between 1984 and 1988, Mr. Scott held several offices with
SouthernNet, including Chief Operating Officer, Chief Financial Officer and Vice
President -- Administration. He was a director of that company from 1984 to
1987.
WILLIAM B. TIMMERMAN was appointed a Director of the Company in 1995.
Since 1978, he has served in a variety of management positions at SCANA,
including President, Senior Vice President, Executive Vice President and Chief
Financial Officer. Subsequent to the retirement of Lawrence M. Gressette, Jr.,
Mr. Timmerman has served as Chairman, Chief Executive Officer and President of
SCANA and as Chairman and Chief Executive Officer of each of SCANA's
subsidiaries.
DONALD W. WEBER has been a Director of the Company since December 1991.
Mr. Weber also is a director of ITC Holding. He is also a director of Healthdyne
Information Enterprise and Pegasus Communications Corporation, both of which are
public companies. From 1981 until his retirement in October 1991, Mr. Weber held
various executive positions, including President and Chief Executive Officer at
Contel. Mr. Weber was a director of Contel from 1985 until 1991 and was a
director of Contel Cellular, Inc., a cellular telephone company, from 1981 until
1991.
11
<PAGE> 16
COMMITTEES OF THE BOARD OF DIRECTORS AND NOMINATIONS BY STOCKHOLDERS
The Audit Committee of the Board of Directors reviews, with the
Company's independent public accountants, the annual financial statements of the
Company prior to publication, reviews the work of such independent public
accountants and makes annual recommendations to the Board of Directors for the
appointment of independent public accountants for the ensuing year. The Audit
Committee also reviews the effectiveness of the financial and accounting
functions, organization, operations and management of the Company. During the
year ended December 31, 1997, the Audit Committee was composed of Donald W.
Burton, William Timmerman and Donald W. Weber and held one meeting.
The Compensation/Stock Option Committee reviews and recommends to the
Board of Directors the compensation and benefits of all officers of the Company
and administers the issuance of stock options to the Company's officers,
employees, consultants and advisors. The Compensation/Stock Option Committee
also reviews general policy matters relating to compensation and benefits of
employees of the Company. During the year ended December 31, 1997, the
Compensation/Stock Option Committee was composed of O. Gene Gabbard, Lawrence M.
Gressette, Jr., Donald W. Weber and William H. Scott, III and held five
meetings.
The Company does not have a standing nominating committee. The Board of
Directors nominates candidates to stand for election as directors. The Third
Restated Certificate of Incorporation permits stockholders to make nominations
for directors but only if such nominations are made pursuant to timely notice in
writing to the Secretary of the Company. To be timely, notice of stockholder
nominations for directors must be delivered in writing to the Secretary of the
Company no later than 90 days prior to the meeting of stockholders at which such
directors are to be elected, together with the identity of the nominator and the
number of shares of Common Stock owned, directly or indirectly, by the
nominator.
During the year ended December 31, 1997, the Board of Directors of the
Company held four meetings. Lawrence M. Gressette, Jr. attended 50% or more of
the aggregate of all board meetings and 80% of the aggregate of all meetings
of committees of which he was a member. All other directors of the Company
attended 75% or more of the aggregate of all board meetings and all meetings of
committees of which they were members.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has adopted a policy requiring that any material
transactions between the Company and persons or entities affiliated with
officers, directors or principal stockholders of the Company be on terms no less
favorable to the Company than reasonably could have been obtained in arms'
length transactions with independent third parties. The following is a summary
of certain transactions and relationships among the Company and its associated
entities, and among the directors, executive officers and stockholders of the
Company and its associated entities.
ITC Holding . As of December 31, 1997, ITC Holding owned approximately
27.3% of the outstanding Common Stock of the Company. ITC Holding, through
certain of its subsidiaries, from time to time provides the Company with various
services, consisting principally of administrative and staff services, technical
services and access services (switch technicians and maintenance),
interconnection and facilities for the Company's switching office. The amount
paid by the Company to ITC Holding and its subsidiaries during the fiscal year
ended December 31, 1997 for such services was $706,000. The Company will
periodically have outstanding affiliated receivables and payables related to
timing of payments for such administrative services.
On January 1, 1995, the Company, ITC Holding, InterServ Services
Corporation, a former subsidiary of ITC Holding, and other parties entered into
a Georgia general partnership, pursuant to which the partners owned and operated
a multi-engine plane. The Company owned a 0.175% interest in this partnership.
In October, 1997, the Company was a co-purchaser of this plane from the
partnership, along with ITC Service Company, Inc., a wholly-owned subsidiary of
ITC Holding, ITC DeltaCom and KNOLOGY. This group of companies also purchased a
second jet-engine aircraft in November, 1997. The Company paid $92,000 during
the fiscal year ended December 31, 1997 for its interest in and use of these
aircraft.
12
<PAGE> 17
The Company utilizes fiber optic facilities of ITC DeltaCom for
backhaul and transport of its personal communications service ("PCS") and
cellular service operations. In addition, the Company entered into a co-location
agreement with ITC DeltaCom for the lease of space to allow the Company to
co-locate certain of its network equipment with facilities of ITC DeltaCom.
ITC DeltaCom also provides the Company with long-distance services, which the
Company then re-sells to its customers, and with operator and directory
assistance services branded with the "Powertel" name. The Company paid
$4,176,000 to ITC DeltaCom during the fiscal year ended December 31, 1997.
The Company utilizes certain telemarketing and other services of IQI,
Inc. ("IQI"), a tele-services company into which a former subsidiary of ITC
Holding, InterServ, Inc., merged. ITC Holding holds a 14% interest in IQI, and
William H. Scott, III sits on its Board of Directors. The Company paid IQI
$272,000 during the fiscal year ended December 31, 1997.
Certain officers and directors of the Company hold or have held
positions in ITC Holding and various subsidiaries of ITC Holding. See "--
Information as to Nominees, Other Directors and Executive Officers," "--
Director Nominees" and "-- Other Directors and Executive Officers." In addition,
certain Company officers and directors have ownership interests in ITC Holding.
Other Transactions . As of December 31, 1997, SCANA owned approximately
16.7% of the outstanding Common Stock of the Company. In addition, Messrs.
Gressette and Timmerman are directors of the Company and are directors and
executive officers of SCANA. SCANA, through SCANA Communications, Inc., owns all
of the Series B Convertible Preferred Stock and Series D Convertible Preferred
Stock of the Company. In addition, a subsidiary of SCANA, ProSolutions
("ProSolutions"), installed alternate power sources for the Company. The Company
paid $4,076,000 to ProSolutions during the fiscal year ended December 31, 1997.
As of December 31, 1997, The Huff Alternative Income Fund, L.P.
("Huff") owned approximately 7.8% of the outstanding Common Stock of the
Company. In addition, Huff owns all of the Series C Preferred Stock of the
Company.
The Company purchases certain equipment and services related to the
buildout of its PCS System from Ericsson Inc. ("Ericsson") and certain of
Ericsson's subsidiaries. Ericsson owns all of the Series A Convertible Preferred
Stock of the Company. The Company's total purchases for equipment and services
from Ericsson were $110.4 million in 1997. In addition, Ericsson, along with
other lenders, provides the Company with financing for such purchases under a
$265.0 million credit agreement.
The Company sells cellular and PCS telephones and provides cellular and
PCS services to certain of its affiliates and their employees.
The Company has entered into a master site lease agreement and
construction management agreement with TowerCom, Inc. ("TowerCom"), a company
that is 45% owned by South Atlantic Venture Fund III, Limited Partnership of
which Donald W. Burton is the managing general partner. Under the terms of these
agreements, TowerCom funds the construction of certain new tower facilities
where the Company performs construction management services for such
construction projects. Subsequent to construction, the Company leases tower
space at such facilities. The Company has built and leased 32 sites pursuant to
this agreement to date. The Company paid $102,000 to TowerCom during the fiscal
year ended December 31, 1997.
Since November 1991, the Company has leased a building located in
Lanett, Alabama from Riverside Corporation, in which the mother and sisters of
William H. Scott, III hold a majority ownership interest. The lease was
originally for a five-year term, with options to renew for three successive
five-year terms. The lease for the Lanett space was renewed in October 1996, and
the current lease term expires in October 2001. ITC Holding subleased the
building from the Company during the period from November 1991 to April 1992.
The total amount payable during the term of the renewal lease is $55,000
(approximately $3.23 per square foot per year). Beginning on January 10, 1998,
the Company entered into a long-term lease with KNOLOGY for 10,000 square feet
of office
13
<PAGE> 18
space in West Point, Georgia. The monthly rental for the initial
10-year term of the lease is $10,000 (approximately $1.00 per square foot per
month).
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors and persons who beneficially own more than 10% of a
registered class of the Company's equity securities to file reports of
securities ownership and changes in such ownership with the Securities and
Exchange Commission (the "SEC" or the "Commission") and the Nasdaq National
Market. Officers, directors and greater than 10% beneficial owners also are
required by rules promulgated by the SEC to furnish the Company with copies of
all Section 16(a) forms they file. Based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, the Company believes that, during fiscal 1997, it
executive officers, directors and greater than 10% beneficial owners complied
with all applicable Section 16(a) filing requirements.
14
<PAGE> 19
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the cash
and non-cash compensation during the fiscal years 1997, 1996 and 1995 earned by
or awarded to the Chief Executive Officer and to the other most highly
compensated executive officers of the Company whose combined salary and bonus
exceeded $100,000 during the fiscal year ended December 31, 1997 (the "Named
Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
AWARDS
-----------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
--------------------- STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR SALARY BONUS AWARDS OPTIONS COMPENSATION
- ---------------------------- ---- -------- -------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Allen E. Smith 1997 $196,119 $227,449 $ -- $58,243 $93,642(a)
President and Chief Executive 1996 188,519 92,790 -- 35,310 82,505(b)
Officer 1995 132,714 93,759 15,000(c)) 41,174 5,424(d)
Fred G. Astor, Jr 1997 134,647 104,885 -- 33,040 88,607(e)
Executive Vice President and 1996 132,080 57,889 -- 15,916 81,865(f)
Chief Financial Officer 1995 104,269 57,430 15,000(c) 34,030 5,424(d)
Rodney D. Dir 1997 125,890 104,102 5,362(g) 9,259 10,379(h)
Executive Vice President-- PCS 1996 38,949(i) 16,223 -- 20,000 67,715(j)
Nicholas J. Jebbia 1997 128,919 55,237 1,989(g) 32,280 10,784(h)
Executive Vice President-- PCS 1996 128,148(k) 56,557 -- -- 22,016(l)
1995 -- -- -- 20,000 --
George R. Johnson 1997 126,370 43,317 864(g) 31,970 11,678(h)
Executive Vice President-- PCS 1996 125,449 56,015 -- 11,976 12,893(m)
1995 62,118(n) -- -- 20,000 1,062(d)
</TABLE>
- -------------------------
(a) Represents: (i) tax gross-ups for 1995 restricted stock awards; (ii) auto
allowance; (iii) personal use of the Company aircraft; (iv) imputed income
for life insurance benefits; and (v) matching contributions made by the
Company to the 401(k) Plan.
(b) Represents: (i) tax gross-ups for 1995 restricted stock awards; (ii) auto
allowance; (iii) country club dues; (iv) imputed income for life insurance
benefits; and (v) matching contributions made by the Company to the 401(k)
Plan.
(c) On April 24, 1995, the Compensation Committee awarded Messrs. Smith and
Astor 15,000 shares each of restricted Common Stock in accordance with the
provisions of the 1995 Employee Restricted Stock Plan. Restricted stock
awards vest in three equal installments on the first, second and third
anniversaries of the date of grant. The market value of the Company's
Common Stock on the date of award was $14.125 per share.
(d) Represents matching contributions made by the Company to the 401(k) Plan on
behalf of each of the Named Executive Officers.
(e) Represents: (i) tax gross-ups for 1995 restricted stock awards; (ii) auto
allowance; (iii) imputed income for life insurance benefits; and (iv)
matching contributions made by the Company to the 401(k) Plan.
(f) Represents: (i) tax gross-ups for 1995 restricted stock awards; (ii) auto
allowance; (iii) imputed income for life insurance benefits; and (iv)
matching contributions made by the Company to the 401(k) Plan.
(g) On July 30, 1997, the Board of the Directors of the Company awarded a total
of 86,207 shares of restricted Common Stock to several individual
employees. Restricted stock awards vest in three equal installments on the
first, second and third anniversaries of the date of grant. The market
value of the Company's Common Stock on the date of award was $16.125 per
share.
(h) Represents: (i) auto allowance; (ii) imputed income for life insurance
benefits; and (iii) matching contributions made by the Company to the
401(k) Plan.
(i) Mr. Dir joined the Company in August 1996 as an executive officer.
(j) Represents: (i) auto allowance; (ii) imputed income for life insurance
benefits; (iii) matching contributions made by the Company to the 401(k)
Plan; and (iv) moving expenses.
(k) Mr. Jebbia joined the Company in January 1996 as an executive officer;
however, his options were granted in December 1995.
(l) Represents: (i) moving expenses; (ii) auto allowance; (iii) imputed income
for life insurance benefits; and (iv) matching contributions made by the
Company to the 401(k) Plan.
(m) Represents: (i) auto allowance; (ii) imputed income for life insurance
benefits; and (iii) matching contributions made by the Company to the
401(k) Plan.
(n) Mr. Johnson joined the Company in May 1995 and became an executive officer
in August 1995.
15
<PAGE> 20
OPTION GRANTS
The following table sets forth information with respect to grants of
stock options to each of the Named Executive Officers during the year ended
December 31, 1997.
OPTION GRANTS DURING 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(A) POTENTIAL REALIZABLE
---------------------------------------------------------------- VALUE
PERCENT OF AT ASSUMED ANNUAL
NUMBER OF TOTAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(B)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION -----------------------
NAME GRANTED FISCAL YEAR PRICE GRANT DATE DATE 5% 10%
- ---- ---------- ------------ --------- ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Allen E. Smith............ 58,243 9.4% $12.375 2/4/97 2/4/07 $453,280 $1,148,701
Fred G. Astor, Jr......... 33,040 5.3 12.375 2/4/97 2/4/07 257,136 651,633
Rodney R. Dir ............ 9,259 1.5 12.375 2/4/97 2/4/07 72,059 182,611
Nicholas J. Jebbia ....... 32,280 5.2 12.375 2/4/97 2/4/07 251,221 636,644
George R. Johnson ........ 31,970 5.1 12.375 2/4/97 2/4/07 248,809 630,530
</TABLE>
- -------------------------
(a) All option grants were made at 100% of the fair market value of the Common
Stock on the date of grant. Options will become exercisable as follows: (i)
50% of the options will become exercisable on the second anniversary of the
date of grant; (ii) an additional 25% of the options will become
exercisable on the third anniversary of the date of grant; and (iii) the
remaining 25% of the options will become exercisable on the fourth
anniversary of the date of grant.
(b) Based on exercise price.
OPTION EXERCISES AND HOLDINGS
During the year ended December 31, 1997, no stock options were
exercised by the Named Executive Officers. The following table sets forth
information with respect to each of the Named Executive Officers concerning the
value of all unexercised options held by such individuals at December 31, 1997.
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL AT
YEAR-END FISCAL YEAR-END
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(A)
- ---- ------------------------- ----------------------------
<S> <C> <C>
Allen E. Smith ......................................... 133,035/92,442 $1,128,634/313,270
Fred G. Astor, Jr........................................ 90,780/55,756 815,421/179,066
Rodney R. Dir ........................................... 0/29,259 0/40,508
Nicholas J. Jebbia ...................................... 10,000/42,280 7,500/148,725
George R. Johnson ....................................... 15,988/47,958 32,747/172,616
</TABLE>
- -------------------------
(a)Represents the difference between the exercise price per share and the market
value of the Common Stock at December 31, 1997.
BENEFIT PLANS
Restricted Stock Plan . Under the Company's 1995 Employee Restricted
Stock Plan adopted by the Board of Directors on April 24, 1995 and approved by
stockholders on December 20, 1995 (the "Restricted Stock Plan"), 200,000 shares
of authorized but unissued Common Stock (approximately 8.0% of the outstanding
shares of Common Stock at December 31, 1997) are reserved for issuance, 121,207
shares of which were issued and
16
<PAGE> 21
outstanding as of December 31, 1997. The Restricted Stock Plan is administered
by the Compensation/Stock Option Committee. The purpose of the Restricted Stock
Plan is to further the growth and success of the Company by enabling selected
employees of the Company to acquire shares of Common Stock of the Company,
thereby increasing their personal interest in such growth and success and to
provide a means of rewarding outstanding performance by such persons. Recipients
of restricted stock awards generally have the rights and privileges of a
stockholder of the Company, including the right to vote and receive dividends,
except that the recipient may not sell, transfer or otherwise dispose of shares
covered by the award until a specified time period, set by the
Compensation/Stock Option Committee, has lapsed. Restricted stock awards vest in
three equal installments on the first, second and third anniversaries of the
date of grant.
Employee Stock Option Plan . Under the Company's 1991 Employee Stock
Option Plan (the "Employee Plan"), 3,000,000 shares of Common Stock have been
authorized for issuance upon exercise of options. All employees of the Company
and its subsidiaries are eligible to receive options under the Employee Plan.
The Employee Plan is administered by the Compensation/Stock Option Committee.
The purpose of the Employee Plan is to further the growth and success of the
Company by enabling selected employees of the Company to acquire shares of
Common Stock of the Company, thereby increasing their personal interest in such
growth and success and to provide a means of rewarding outstanding performance
by such persons. Options granted under the Employee Plan are intended to qualify
as "incentive stock options" under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). Options generally become exercisable as to 50%
two years after the date of grant, as to an additional 25% three years after the
date of grant, and as to the remaining 25% four years after the date of grant.
As of December 31, 1997, 2,176,628 options granted pursuant to the Employee Plan
were outstanding.
401(k) Plan . On February 1, 1995, the Company established a savings
plan (the "401(k) Plan") qualified under Section 401(k) of the Code for the
benefit of all full-time employees. A participant in the 401(k) Plan may
contribute up to 10% of his or her compensation on a pre-tax basis under the
401(k) Plan. Also, under the 401(k) Plan, the Company makes matching
contributions for each participant equal to one-half of the first 2% of annual
compensation contributed by each participant. In addition, the Company may make,
in its discretion, certain additional contributions that generally will be
allocated to participants in proportion to compensation. The Company made
$826,608 in contributions to the 401(k) Plan during 1997.
Contributions made by, or on behalf of, a participant, and interest,
earnings, gains or losses on such amounts, are credited to accounts maintained
for the participant under the 401(k) Plan. A participant under the 401(k) Plan
is fully vested in his or her pre-tax, matching and rollover contributions
accounts. Vesting in a participant's discretionary profit sharing contribution
account is based upon his or her years of service with the Company. A
participant is initially 20% vested after the completion of one year of service
with the Company. The participant's vested percentage increases by 20% for each
subsequent year of service with the Company, so that the participant is 100%
vested after the completion of five years of service. In addition, a participant
becomes fully vested in his or her accounts upon retirement due to permanent
disability, attainment of age 65 or death. Finally, the 401(k) Plan provides
that the Board of Directors may at any time declare the 401(k) Plan partially or
completely terminated, in which event the accounts of each participant with
respect to whom the 401(k) Plan is terminated will become fully vested. In the
event of a termination, partial termination or a complete discontinuance of
contributions, the accounts of each affected participant will become fully
vested.
17
<PAGE> 22
COMPENSATION OF THE COMPANY'S DIRECTORS
Director Fees and Related Matters . Prior to January 17, 1994,
directors of the Company (other than those who were considered employees of the
Company and received salaries for their services as such) did not receive cash
compensation for their services on the Board of Directors. Pursuant to a policy
instituted by the Company on January 17, 1994, the Company now compensates
nonemployee directors $750 for each Board meeting attended in person, $200 for
each Board meeting attended by telephone conference and $200 for each Board
committee meeting attended (whether in person or by telephone conference). In
addition, the Company reimburses nonemployee directors for out-of-pocket travel
expenditures relating to their service on the Board. The Company provides to
each of its directors (and to all of its employees) a free telephone and a
monthly airtime allowance; the users are responsible for payment of all
additional airtime charges and long distance and roaming charges they incur.
For the year ended December 31, 1997, Messrs. Clifford, Lanier and
Scott received additional compensation in consideration of their performance of
certain advisory and administrative services for the Company in the amount of
approximately $30,000, $40,000 and $30,000, respectively. Additionally, Messrs.
Lanier and Scott participate in the 401(k) Plan under which they received profit
sharing and matching contributions totaling approximately $1,600 and $1,200,
respectively, in 1997. Such individuals will be paid similar compensation for
the year ending December 31, 1998 in consideration of their performance of such
services for the Company.
Nonemployee Stock Option Plan . Under the Company's Nonemployee Stock
Option Plan (the "Nonemployee Plan"), 400,000 shares of Common Stock are
authorized for issuance upon exercise of options. All nonemployee directors of
the Company, and all employees of affiliates of the Company, are eligible to
receive options under the Nonemployee Plan. Options were granted to each
nonemployee director upon his or her election or appointment as a director and
are exercisable at the fair market value of the Common Stock (as determined by
the Board) on the date of grant.
On March 28, 1994, the Nonemployee Plan was amended to provide that
options to purchase 10,000 shares of Common Stock (at an exercise price equal to
the fair market value of the Common Stock on the date of grant) would be granted
pursuant thereto to nonemployee directors upon their initial election or
appointment to the Board. The Nonemployee Plan, as so amended, does not provide
for discretionary option grants. Options generally become exercisable as to 50%
two years after the date of grant, as to an additional 25% three years after the
date of grant, and as to the remaining 25% four years after the date of grant.
As of December 31, 1997, 193,650 options granted pursuant to the Nonemployee
Plan were outstanding.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, Messrs. Gabbard, Gressette, Weber and Scott constituted
the Compensation/Stock Option Committee. Messrs. Gabbard, Weber and Scott are
directors of ITC Holding, which as of February 1, 1998 held approximately 27.3%
of the outstanding Common Stock of the Company. See "Election of Directors
(Proposal 2) -- Certain Relationships and Related Transactions -- ITC Holding."
Mr. Gressette is a director of SCANA, which as of February 1, 1998 held
approximately 16.7% of the outstanding Common Stock of the Company. See
"Election of Directors (Proposal 2) -- Certain Relationships and Related
Transactions -- Other Transactions."
18
<PAGE> 23
COMPENSATION/STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the
Company's previous or future filings under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, that might
incorporate this Proxy Statement or future filings with the Commission, in whole
or in part, the following report and the Stock Performance Chart which follows
shall not be deemed to be incorporated by reference into any such filing.
The Company's compensation program is based on two major principles.
First, the Company strives to provide competitive levels of compensation -- at
performance levels that meet or exceed stated objectives -- in order to attract,
motivate and retain skilled and experienced executives. Second, the compensation
program is structured to create a common interest between the Company's
executives and the Company's stockholders by linking a significant portion of
each executive's compensation directly to increases in stockholder value.
The executive compensation program is designed to reward performance
that directly contributes to the Company's short-term and long-term success.
Accordingly, the Company generally provides both short-term and long-term
incentive compensation that varies based on Company and/or business unit
performance.
The three major components of the compensation program are base salary,
annual cash incentives and long-term incentives (stock options and restricted
stock awards). The Company's philosophy is: (i) to pay to its executives base
salaries that generally alone (without the other compensation elements) provide
compensation equal to total compensation in the bottom quartile of the range of
total compensation generally paid to executives by comparable companies; (ii) to
provide cash incentive awards that, if fully earned, raise the executives' total
cash compensation (base salary plus cash awards) to the middle of the range of
total compensation generally paid to executives by comparable companies; and
(iii) to provide long-term incentives in the form of stock options and
restricted stock awards that, if fully earned, raise the executives total
compensation (cash and equity) to the 75th percentile of the range of total
compensation generally paid to executives by comparable companies. The Company
analyzes the range of compensation provided by comparable companies based on
information provided by publicly traded wireless telecommunications companies
and on survey data provided by Hay Management Consultants, an internationally
recognized independent consulting firm.
Base Salary . Salary levels are based on the level of compensation
generally paid to executives by comparable companies, as described above, and on
each individual executive's responsibilities with the Company and his
performance in that role. Consequently, executives with higher levels of
sustained performance over time and/or executives assuming greater
responsibilities will be paid correspondingly higher salaries. Salaries for
executives are reviewed annually with respect to a number of factors, including
individual performance, Company and (where appropriate) business unit results
(including revenue, net income or loss, and cash flow), and general levels of
salary increases in comparable companies.
Management Incentive Compensation Plan . The Company's Management
Incentive Compensation Plan (the "Incentive Plan") provides competitive cash
compensation opportunities for Incentive Plan participants based on Company
and/or business unit performance. Incentive cash awards are paid annually if
performance objectives are achieved.
The Compensation/Stock Option Committee develops, and the Board of
Directors reviews and approves, the criteria and financial targets established
for Incentive Plan participants each year. For 1997, the Incentive Plan included
targets for: (i) total revenues; (ii) operating income; (iii) cost per net add;
(iv) ending subscribers; and (v) capital expenditures. Each factor was weighted
equally.
Annual cash incentive bonus opportunities vary by individual position
and are expressed as an annual cash objective and as a percentage of total
compensation mix. The amount a particular executive may earn is dependent on the
individual's position, responsibility and ability to influence the Company's
financial success. No bonus is payable if the Company does not achieve at least
70% of the Incentive Plan's targets, and bonus payments are capped at
achievement of 300% of the Incentive Plan's targets.
19
<PAGE> 24
Long-term Incentive Compensation . The Company's long-term incentive
compensation, reflected in the Employee Plan and the Restricted Stock Plan, is
designed to focus executive efforts on the long-term goals of the Company,
including the important goal of maximizing total return to the Company's
stockholders.
The Company believes that stock options align the interests of
employees with those of stockholders by providing value to employees through
stock price appreciation. Stock option grants are made by the Compensation/Stock
Option Committee. The Company generally grants options with an exercise price
equal to the fair market value of the Common Stock on the date of the option
grant. Option grants and the number of shares reserved for issuance under the
Employee Plan are established by analysis of practices at comparable companies.
The number of options actually granted to a particular participant is based on
the Company's financial success and the individual's position and level of
responsibility within the Company.
Under the Company's Restricted Stock Plan the Company may issue to
eligible employees shares of the Company's Common Stock that are subject to
certain restrictions, non-transferable during the restriction period and subject
to forfeiture if the employee leaves the Company during the restriction period.
The Compensation/Stock Option Committee establishes a period of time or
performance goals that apply to restricted shares issued with respect to each
award pursuant to the Restricted Stock Plan. Performance goals can be based on
one or more business criteria that apply to the individual recipient, a business
unit (where appropriate) or the Company. Performance goals generally will be
based on stock price, sales, earnings per share, earnings before taxes or return
on net assets. Performance goals may include positive results, maintaining the
status quo or limiting economic losses.
Other. In addition to the compensation paid to executive officers as
described above, executive officers receive, along with and on the same terms as
other employees, certain benefits pursuant to the Company's 401(k) Plan. See "--
Benefit Plans."
1997 Compensation of Chief Executive Officer . As previously described,
the Compensation/Stock Option Committee considers several factors in developing
an executive compensation package. For the Chief Executive Officer, these
factors generally include compensation practices of comparable companies,
individual performance, experience, achievement of strategic goals, and the
Company's financial and operational results. Specific actions taken by the
Compensation/Stock Option Committee regarding Mr. Smith's compensation for 1997
are summarized below.
Base Salary. The Chief Executive Officer's 1997 base salary
was $196,119, an increase of 4% over his 1996 base salary. Mr. Smith's
salary increase reflects the Company's growth in revenues, net income,
cash flow and stockholder value. Effective November 1, 1997, the
Compensation/Stock Option Committee increased Mr. Smith's annual base
salary to $250,000 per year, an increase of 25% over his previous base
salary.
Annual Incentive. In addition, Mr. Smith received an annual
cash incentive award for 1997 of $227,449. This award was based on
results for the year, which exceeded the performance benchmarks
established by the Compensation/Stock Option Committee and the Board
of Directors. Mr. Smith's 1997 incentive targets were exceeded by an
average of 0.9%. The Company believes that Mr. Smith's total 1997 cash
(salary plus incentive) compensation was below the average total cash
compensation paid to chief executives by comparable companies.
Long-term Incentive. Mr. Smith is eligible to participate in
the Employee Plan and Restricted Stock Plan. During 1997, Mr. Smith was
granted options to purchase 58,243 shares of Common Stock at an
exercise price of $12.375 (the fair market value of the Common Stock on
the date of option grant). Such options become exercisable with respect
to: (i) 50% of the shares issuable thereunder on the second anniversary
of the date of grant; (ii) an additional 25% of the shares issuable
thereunder on the third anniversary of the date of grant; and (iii) the
remaining 25% of the shares issuable hereunder on the fourth
anniversary of the date of grant.
20
<PAGE> 25
Pay Deductibility Limit. Under a 1993 amendment to the Code
and proposed federal tax regulations, public companies are prohibited from
receiving a tax deduction for compensation in excess of $1 million paid to the
Chief Executive Officer or any of the four other most highly compensated
executive officers for any fiscal year. The prohibition does not apply to
certain performance based compensation. The Company takes into consideration
this compensation deductibility limit in structuring its compensation programs
and in determining executive compensation. At this time, the Company's
applicable executive officer compensation does not exceed $1 million, and the
Company does not expect that it is likely to be affected by these
nondeductibility rules in the near future.
COMPENSATION/STOCK OPTION COMMITTEE
O. Gene Gabbard
Lawrence M. Gressette, Jr.
William B. Timmerman
William H. Scott, III
COMPARATIVE COMPANY PERFORMANCE
The graph shown below is a line-graph presentation comparing the
Company's cumulative stockholder return on an indexed basis based on an
investment of $100 on December 31, 1993 with the CRSP Index for Nasdaq
Telecommunications Stocks and the CRSP Index for the Nasdaq National Market
(U.S. Companies).
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN
<TABLE>
<CAPTION>
CRSP INDEX
CRSP NASDAQ FOR NASDAQ
MEASUREMENT PERIOD STOCK MARKET TELECOMMUNICATIONS
(FISCAL YEAR COVERED) (U.S. COMPANIES) STOCKS POWERTEL, INC.
--------------------- ---------------- ------------------ --------------
<S> <C> <C> <C>
12/31/93 100.00 100.00 100.00
12/31/94 97.75 83.46 131.82
12/31/95 138.24 109.28 206.06
12/31/96 170.02 111.66 148.48
12/31/97 208.54 165.45 203.03
</TABLE>
NOTES:
A. The lines represent annual index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighed daily, using the market capitalization on the
previous trading day.
C. If the fiscal year end is not a trading day, the preceding trading day is
used.
D. The index level for all series was set to 100.00 on December 31, 1993.
E. The Company's Common Stock began trading on the Nasdaq Stock Market on
February 7, 1994.
[PERFORMANCE GRAPH TO BE INSERTED]
21
<PAGE> 26
BENEFICIAL OWNERSHIP OF CAPITAL STOCK
The following table provides information, as of March 23, 1998
concerning beneficial ownership of Common Stock by: (i) each person or entity
known by the Company to beneficially own more than 5% of the outstanding Common
Stock; (ii) each director of the Company; (iii) each Named Executive Officer;
and (iv) all directors and executive officers of the Company as a group. The
information in the table is based on information from the named persons
regarding ownership of Common Stock. Unless otherwise indicated, each of the
stockholders has sole voting and investment power with respect to the shares
shown as beneficially owned by them.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE OF COMMON
BENEFICIAL STOCK
NAME AND ADDRESS(A) OF BENEFICIAL OWNER OWNERSHIP(B) OUTSTANDING
- --------------------------------------- ------------ -----------
<S> <C> <C>
ITC Holding Company, Inc.(c) ...................................... 7,337,811 27.3%
SCANA Communications, Inc.(d) ..................................... 4,494,892 16.7
W.R. Huff(e) ...................................................... 2,129,350 8.0
The Huff Alternative Income Fund, L.P.(f) ......................... 2,078,100 7.8
Fred G. Astor, Jr.(g)(h) .......................................... 117,021 *
Donald W. Burton(g)(i) ............................................ 1,588,727 5.9
Bert G. Clifford(g)(j) ............................................ 1,192,136 4.5
Rodney D. Dir ..................................................... 5,362 *
O. Gene Gabbard(g)(k) ............................................. 196,191 *
Lawrence M. Gressette, Jr ......................................... -- --
Nicholas J. Jebbia(g) ............................................. 14,489 *
George R. Johnson(g) .............................................. 21,852 *
Campbell B. Lanier, III(g)(k)(l) .................................. 236,491 *
Maurice P. O'Connor(g)(m) ......................................... 84,915 *
William H. Scott, III(g)(o) ....................................... 62,300 *
Allen E. Smith(g) ................................................. 165,885 *
William B. Timmerman .............................................. -- --
Donald W. Weber(g) ................................................ 22,000 *
All executive officers and directors as a group (16 persons)(g)-(o) 3,553,855 13.0
</TABLE>
- ----------
* Less than one percent.
(a) The addresses of the beneficial owners of more than 5% of the Common Stock
are as follows: ITC Holding -- 1239 O.G. Skinner Drive, West Point, Georgia
31833; SCANA Communications, Inc. -- 440 Knox Abbott Drive, Suite 240,
Cayce, South Carolina 29033; Mr. Huff and The Huff Alternative Income Fund,
L.P. -- 67 Park Place, Morristown, New Jersey 07960; and Mr. Burton -- 614
West Bay Street, Suite 200, Tampa, Florida 33606.
(b) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner, for purposes of this table, of any shares of
Common Stock if such person has or shares voting power or investment power
with respect to such security, or has the right to acquire beneficial
ownership at any time within 60 days from March 23, 1998. As used herein,
"voting power" is the power to vote or direct the voting of shares and
"investment power" is the power to dispose or direct the disposition of
shares.
(c) ITC Holding has pledged all of its stock in the Company to certain lenders
in connection with a credit facility.
(d) Does not include: (i) 4,545,450 shares of Common Stock issuable upon
conversion of the Series B Convertible Preferred Stock; and (ii) 1,764,706
shares of Common Stock issuable upon conversion of the Series D Convertible
Preferred Stock.
22
<PAGE> 27
(e) Includes 2,078,100 shares held by The Huff Alternative Income Fund, L.P.
and 51,250 shares held by Mr. Huff in his personal account. Mr. Huff is
president of Paladin Court Co., Inc., the general manager of WRH Partners,
LLC, which is the general partner of The Huff Alternative Income Fund, L.P.
Mr. Huff disclaims beneficial ownership of the shares held by The Huff
Alternative Income Fund, L.P.
(f) Does not include 1,764,706 shares of Common Stock issuable upon conversion
of the Series C Convertible Preferred Stock.
(g) Includes the following shares that the named individuals have the right to
purchase within 60 days from March 23, 1998 pursuant to options:
<TABLE>
<S> <C>
Fred G. Astor, Jr. 92,621
Donald W. Burton 5,000
Bert G. Clifford 11,100
O. Gene Gabbard 20,000
Nicholas J. Jebbia 10,000
George R. Johnson 20,988
Campbell B. Lanier, III 10,000
Maurice P. O'Connor 78,940
William H. Scott, III 40,000
Allen E. Smith 139,285
Donald W. Weber 20,000
------
Total 467,301
=======
</TABLE>
(h) Includes 1,000 shares and 300 shares held of record by Mr. Astor's wife and
minor sons, respectively. Mr. Astor disclaims beneficial ownership of such
shares.
(i) Includes 464,417 shares held of record by The Burton Partnership, Limited
Partnership, of which Mr. Burton is the sole general partner; 654,893
shares held of record by South Atlantic Venture Fund II, Limited
Partnership, of which South Atlantic Venture Partners II, Limited
Partnership is the sole general partner, of which Mr. Burton is the
managing general partner; and 464,417 shares held of record by South
Atlantic Venture Fund III, Limited Partnership, of which South Atlantic
Venture Partners III, Limited Partnership is the sole general partner, of
which Mr. Burton is the managing general partner.
(j) Includes 542,176 shares held of record by Coral B. Clifford, Mr. Clifford's
wife.
(k) Includes 176,191 shares held of record by The Charitable Remainder
Education Trust III, of which Messrs. Gabbard and Lanier are trustees.
Messrs. Gabbard and Lanier disclaim beneficial ownership of these shares.
(l) Includes 2,200 shares held of record by Jane Lanier, Mr. Lanier's wife, and
500 shares held by Mr. Lanier as custodian for his son. Mr. Lanier
disclaims beneficial ownership of such shares.
(m) Includes 105 shares held by Mr. O'Connor as trustee for his son and 100
shares held by Mr. O'Connor's wife as trustee for his daughter.
(n) Includes warrants to purchase 128 shares which are exercisable immediately.
(o) Includes 500 shares held of record by Martha Scott, Mr. Scott's wife,
individually, 3,600 shares held by Martha Scott as trustee, and 100 shares
held of record by Mr. Scott's minor daughter. Mr. Scott disclaims
beneficial ownership of such shares.
23
<PAGE> 28
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 3)
The Board of Directors has appointed the firm of Arthur Andersen LLP to
continue as independent public accountants for the Company for the year ending
December 31, 1998, subject to ratification of such appointment by the
stockholders. Arthur Andersen LLP has served as the Company's independent public
accountants since 1991. Unless otherwise indicated, properly executed proxies
will be voted in favor of ratifying the appointment of Arthur Andersen LLP,
independent certified public accountants, to audit the books and accounts of the
Company for the year ending December 31, 1998. No determination has been made as
to what action the Board of Directors would take if the stockholders do not
ratify the appointment.
Representatives of Arthur Andersen LLP will be present at the Annual
Meeting. They will be given an opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions.
REQUIRED VOTE AND RELATED MATTERS
The approval by a majority of the total votes cast on the proposal is
required to approve the proposal to ratify the selection of Arthur Andersen LLP
as independent public accountants for the fiscal year ending December 31, 1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 3.
24
<PAGE> 29
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
The Company provides all stockholders with the opportunity, under
certain circumstances, to participate in the governance of the Company by
submitting proposals that they believe merit consideration at the next Annual
Meeting of Stockholders, which currently is expected to be held in May 1999. To
enable management to analyze and respond adequately to proposals and to prepare
appropriate proposals for presentation in the Company's Proxy Statement for the
next Annual Meeting of Stockholders, any such proposal should be submitted to
the Company no later than January 20, 1999, to the attention of its Secretary,
at its principal place of business in West Point, Georgia. Stockholders may also
submit the names of individuals who they wish to be considered by the Board of
Directors as nominees for directors.
VOTING PROCEDURES
Stockholders' votes will be tabulated by the persons appointed by the
chairman of the Annual Meeting to act as inspectors of election for the Annual
meeting. All shares represented and entitled to vote on a proposal, whether
voted for or against the proposal, or abstaining from voting, will be counted as
present and entitled to vote on the proposal. Accordingly, an abstention from
voting on the proposal by a stockholder present in person or represented by
proxy at the Annual Meeting will have the same legal effect as a vote against
the matter, even though the stockholder may interpret an abstention differently.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company hereby incorporates by reference into this Proxy Statement
the following sections of the Company's annual report on Form 10-K for the year
ended December 31, 1997: (i) Management's Discussion and Analysis set forth at
pages 22 through 31 thereof; (ii) Consolidated Financial Statements set forth at
pages F-3 through F-6 thereof; (iii) Notes to Consolidated Financial Statements
set forth at pages F-7 through F-21 thereof; and (iv) Report of Independent
Auditors set forth at page F-2 thereof.
The Company will provide without charge to each person to whom a copy
of this Proxy Statement is delivered, on the written or oral request of such
person and by first class mail or other equally prompt means within one business
day of receipt of such request, a copy of any and all of the documents referred
to above which have been incorporated by reference in this Proxy Statement. Such
written or oral request should be directed to Fred G. Astor, Jr., Executive Vice
President and Chief Financial Officer, Powertel, Inc., 1233 O.G. Skinner Drive,
West Point, Georgia 31833; (706) 645-2000.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Exchange Act and, in accordance therewith, is required to file reports, proxy
statements and other information with the Commission. Such reports, proxy
statements and other information can be inspected and copied at the Public
Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World
Trade Center, Suite 1300, New York, New York 10048. Copies of the reports, proxy
statements and other information can be obtained from the Public Reference
Section of the Commission, Washington. D.C. 20549, at prescribed rates. The
Commission maintains a World Wide Web site on the internet at http://www.sec.gov
that contains reports, proxies, information statements, and registration
statements and other information filed with the Commission through the EDGAR
system. The Common Stock of the Company is traded on the Nasdaq National Market
(Symbol: PTEL), and such reports, proxy statements and other information
concerning the Company also can be inspected at the offices of Nasdaq
Operations, 1735 K Street, N.W., Washington, D.C. 20006.
25
<PAGE> 30
A copy of the Annual Report to Stockholders for the fiscal year ended
December 31, 1997 accompanies this Proxy Statement. THE COMPANY HAS FILED AN
ANNUAL REPORT ON FORM 10-K FOR ITS 1997 FISCAL YEAR WITH THE COMMISSION.
STOCKHOLDERS MAY OBTAIN, FREE OF CHARGE, A COPY OF THE ANNUAL REPORT ON FORM
10-K BY WRITING TO OR TELEPHONING FRED G. ASTOR, JR., EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER, POWERTEL, INC., 1233 O.G. SKINNER DRIVE, WEST
POINT, GEORGIA 31833; (706) 645-2000.
OTHER MATTERS
The Board of Directors does not know of any other matters to be
presented for action by the stockholders at the Annual Meeting. If, however, any
other matters not now known are properly brought before the Annual Meeting, the
persons named in the accompanying proxy will vote such proxy on such matters as
determined by a majority of the Board of Directors.
By Order of the Board of Directors
---------------------------------------
Allen E. Smith
Chief Executive Officer
West Point, Georgia
Dated: April , 1998
26
<PAGE> 31
APPENDIX
[Preliminary Copy]
PROXY SOLICITED FOR ANNUAL MEETING
OF STOCKHOLDERS OF
POWERTEL, INC.
TO BE HELD MAY 21, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby constitutes and appoints ALLEN E. SMITH and FRED
G. ASTOR, JR. and each of them his true and lawful agents and proxies with full
power of substitution in each, to represent and vote, as indicated below, all of
the shares of Common Stock of Powertel, Inc. ("Powertel") that the undersigned
would be entitled to vote at the 1998 Annual Meeting of Stockholders of Powertel
to be held on May 21, 1998 at The Cotton Duck, 6101 20th Avenue, Valley, Alabama
36854 at 10:00 a.m. local time, and at any adjournment, upon the matters
described in the accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement for the Annual Meeting of Stockholders, receipt of which is
acknowledged, and upon any other business that may properly come before the
meeting or any adjournment. Said proxies are directed to vote on the matters
described in the Notice of Annual Meeting of Stockholders and Proxy Statement
for the Annual Meeting of Stockholders as follows, and otherwise in their
discretion upon such other business as may properly come before the meeting or
any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED: (I) FOR PROPOSAL 1 TO APPROVE AND ADOPT THE PROPOSED
AMENDMENT TO THE THIRD RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 55,000,000 SHARES TO
100,000,000 SHARES; (II) FOR PROPOSAL 2 TO ELECT THE THREE NOMINEES OF THE BOARD
OF DIRECTORS AS DIRECTORS, EACH FOR A THREE-YEAR TERM; (III) FOR PROPOSAL 3 TO
RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS
OF THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 1998; AND (IV) AS THE PROXY
HOLDER MAY DETERMINE IN HIS DISCRETION WITH REGARD TO ANY OTHER MATTER PROPERLY
BROUGHT BEFORE THE ANNUAL MEETING.
PLEASE MARK, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
1. PROPOSAL to approve and adopt the proposed amendment to the Third Restated
Certificate of Incorporation to increase the number of authorized shares of
Common Stock from 55,000,000 shares to 100,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 32
2. ELECTION OF DIRECTORS:
CAMPBELL B. LANIER, III
ALLEN E. SMITH
LAWRENCE M. GRESSETTE, JR.
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY to
listed (except as vote for all nominees
marked to the contrary)
(INSTRUCTION: To withhold authority to vote for any individual
nominee(s), write that nominee's name(s) in the space provided below.)
3. PROPOSAL to ratify the appointment of Arthur Andersen LLP as independent
public accountants of the Company for the year ending December 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. IN THEIR DISCRETION, to act upon such other business as may properly come
before the meeting or any adjournment thereof.
Dated: , 1998
-------------------------------------
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Signature of Stockholder(s)
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Signature of Stockholder(s)
Please sign exactly as name or names appear
hereon. Where more than one owner is shown on a
stock certificate, each owner should sign.
Persons signing in a fiduciary or representative
capacity shall give full title. If a corporation,
please sign in full corporate name by authorized
officer. If a partnership, please sign in
partnership name by authorized person.
