<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 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] 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
(POWERTEL LOGO)
POWERTEL, INC.
1233 O.G. SKINNER DRIVE
WEST POINT, GEORGIA 31833
(706) 645-2000
May 1, 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,
/s/ Allen D. Smith
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 a 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
/s/ Allen D. Smith
Allen E. Smith
Chief Executive Officer
West Point, Georgia
May 1, 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>
<CAPTION>
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................................................... 4
AMENDMENT TO THIRD RESTATED CERTIFICATE OF INCORPORATION.... 6
Text of Amendment......................................... 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................... 17
Director Fees and Related Matters...................... 17
Nonemployee Stock Option Plan.......................... 18
Compensation Committee Interlocks and Insider
Participation.......................................... 18
Compensation/Stock Option Committee Report on Executive
Compensation........................................... 18
Base Salary............................................ 19
Management Incentive Compensation Plan................. 19
Long-term Incentive Compensation....................... 19
Other.................................................. 20
1997 Compensation of Chief Executive Officer........... 20
Pay Deductibility Limit................................ 20
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................ 24
VOTING PROCEDURES........................................... 24
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE........... 24
AVAILABLE INFORMATION....................................... 25
OTHER MATTERS............................................... 25
</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 May
1, 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 MAY 1, 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.
Date, Time and 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."
2
<PAGE> 7
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 Assistant 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.
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 in their discretion.
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 26,945,863 shares of Common Stock held of
record by approximately 474 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 Delaware Law to
appraisal rights in connection with the approval of any of the matters to be
presented at the Annual Meeting.
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
4
<PAGE> 9
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 the 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 26,945,863 issued and outstanding shares of Common Stock, including 121,207
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, 28,054,137 shares of
Common Stock (including shares of Common Stock reserved for issuance upon the
conversion of the Outstanding Convertible Preferred Stock and other convertible
securities of the Company) 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 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
6
<PAGE> 11
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 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
DIRECTOR NOMINEES AGE POSITION(S) WITH COMPANY TO EXPIRE
- ----------------- --- ------------------------ ---------
<S> <C> <C> <C>
Campbell B. Lanier, III............... 47 Chairman of the Board of Directors 2001
Allen E. Smith........................ 48 President, Chief Executive Officer and 2001
Director
Lawrence M. Gressette, Jr............. 66 Director 2001
</TABLE>
<TABLE>
<CAPTION>
OTHER DIRECTORS
AND EXECUTIVE TERM
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>
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
8
<PAGE> 13
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 1997, Mr. Gressette has
served as a director and as Chairman of the Executive Committee of the Board
9
<PAGE> 14
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 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
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.
10
<PAGE> 15
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 May 1, 1998, 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 resells 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 May 1, 1998, 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 May 1, 1998, 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 $78.0 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 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).
13
<PAGE> 18
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 93,759 211,725(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 57,430 211,725(c) 34,030 5,424(d)
Rodney D. Dir................... 1997 125,890 104,102 86,409(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 32,053(g) 32,280 10,784(h)
Executive 1996 128,148(k) 56,557 -- -- 22,016(l)
Vice President -- PCS 1995 -- -- -- 20,000 --
George R. Johnson............... 1997 126,370 43,317 13,923(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 (as defined below).
(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.
(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 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 became an executive officer of the Company in January 1996;
however, his options were granted in December 1995.
15
<PAGE> 20
(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.
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>
POTENTIAL REALIZED
INDIVIDUAL GRANTS(A) VALUE AT ASSUMED
--------------------------------------------------------------------------- ANNUAL RATES OF
NUMBER OF PERCENT STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO 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 February 4, 1997 February 4, 2007 $453,280 $1,148,701
Fred G. Astor, Jr.......... 33,040 5.3 12.375 February 4, 1997 February 4, 2007 257,136 651,633
Rodney R. Dir.............. 9,259 1.5 12.375 February 4, 1997 February 4, 2007 72,059 182,611
Nicholas J. Jebbia......... 32,280 5.2 12.375 February 4, 1997 February 4, 2007 251,221 636,644
George R. Johnson.......... 31,970 5.1 12.375 February 4, 1997 February 4, 2007 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 VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE 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
16
<PAGE> 21
Stock Plan"), 200,000 shares of authorized but unissued Common Stock
(approximately 0.7% of the outstanding shares of Common Stock at December 31,
1997) are reserved for issuance, 121,207 shares of which were issued and
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.
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
17
<PAGE> 22
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 May 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 May 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."
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.
18
<PAGE> 23
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.
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
19
<PAGE> 24
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 thereunder on the fourth anniversary of the date of grant.
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.
Donald W. Weber
William H. Scott, III
20
<PAGE> 25
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 the Nasdaq Stock Market (U.S.
Companies) and the CRSP Index for Nasdaq Telecommunications Stocks.
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN
<TABLE>
<CAPTION>
CRSP INDEX FOR
CRSP NASDAQ 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.
21
<PAGE> 26
BENEFICIAL OWNERSHIP OF CAPITAL STOCK
The following table provides information, as of May 1, 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 NATURE OF PERCENT OF COMMON
NAME AND ADDRESS(A) OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(B) STOCK 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)(n)............................ 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)-(n)............................ 3,577,098 13.1
</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 Securities Exchange Act of 1934, as
amended (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 May 1, 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.
(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
22
<PAGE> 27
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 May 1, 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............................................. 447,934
=======
</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 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.
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 of Financial
Condition and Results of Operations set forth at pages 23 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 Public Accountants 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
24
<PAGE> 29
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.
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
/s/ Allen D. Smith
Allen E. Smith
Chief Executive Officer
West Point, Georgia
Dated: May 1, 1998
25
<PAGE> 30
APPENDIX
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
2. ELECTION OF DIRECTORS: CAMPBELL B. LANIER, III
ALLEN E. SMITH
LAWRENCE M. GRESSETTE, JR.
<TABLE>
<S> <C> <C> <C>
[ ] FOR all nominees listed (except as marked to the [ ] WITHHOLD AUTHORITY to vote for all nominees
contrary)
</TABLE>
(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
--------------------------
--------------------------------------
Signature of Stockholder(s)
--------------------------------------
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.
PLEASE MARK, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
