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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 20, 1999
Registration No. 33-96218
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 3 TO FORM S-1
ON FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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POWERTEL, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 58-1944750
(State or Other (I.R.S. Employer
Jurisdiction of Identification
Incorporation or Number)
Organization)
1233 O.G. SKINNER DRIVE
WEST POINT, GEORGIA 31833
(706) 645-2000
(706) 645-9523 (FACSIMILE)
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
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ALLEN E. SMITH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
POWERTEL, INC.
1233 O.G. SKINNER DRIVE
WEST POINT, GEORGIA 31833
(706) 645-2000
(706) 645-9523 (FACSIMILE)
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
----------------------------
Copy to:
James Walker IV, Esq.
Terresa R. Tarpley, Esq.
Nelson Mullins Riley & Scarborough, L.L.P.
First Union Plaza, Suite 1400
999 Peachtree Street, N.E.
Atlanta, Georgia 30309
(404) 817-6000
(404) 817-6050 (facsimile)
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective and from time to
time as determined by market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ___________________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ___________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell securities, and we are not soliciting offers to buy these securities, in
any state where the offer or sale is not permitted.
Subject to Completion, dated September 20, 1999
PROSPECTUS
1,224,557 Shares
POWERTEL, INC.
Common Stock
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This prospectus relates to the possible issuance by us from time to
time of up to 1,224,557 shares of our common stock to the holders of our
currently outstanding warrants to purchase shares of common stock upon the
exercise thereof by such holders and in accordance with a warrant agreement
relating to the warrants between us and Bankers Trust Company, as warrant agent.
We offered and sold the warrants to the public pursuant to a prospectus dated
February 1, 1996 as part of an offering of 35,747 units, each unit consisting of
ten 12% Senior Discount Notes due 2006 and 32 warrants to purchase shares of our
common stock. Each warrant entitles the holder to purchase 1.07 shares of common
stock at a price of $16.9546 per share, subject to adjustment as provided in the
warrant agreement. Subject to the effectiveness of the registration statement of
which this prospectus is a part, the warrants may be exercised at any time prior
to the close of business on February 1, 2006.
Our common stock is quoted on the Nasdaq National Market under the
symbol "PTEL." On September 17, 1999, the last reported sales price of our
common stock was $46.44 per share.
Our principal executive offices are located at 1233 O.G. Skinner Drive,
West Point, Georgia 31833, and our telephone number is (706) 645-2000.
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YOU SHOULD CONSIDER CAREFULLY THE "RISK FACTORS"
BEGINNING ON PAGE 4 BEFORE PURCHASING
ANY OF THE COMMON STOCK OFFERED HEREBY.
---------------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS
HAVE NOT APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
September 20, 1999
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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM
THAT CONTAINED IN THIS PROSPECTUS. THE INFORMATION CONTAINED IN THIS PROSPECTUS
IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF
DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF THE SHARES.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Where You Can Find More Information............................... 3
Information Incorporated by Reference............................. 3
Forward-Looking Information....................................... 4
Risk Factors...................................................... 4
Use of Proceeds................................................... 10
Powertel.......................................................... 10
Plan of Distribution.............................................. 20
Legal Matters..................................................... 20
Experts........................................................... 20
</TABLE>
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WHERE YOU CAN FIND MORE INFORMATION
Powertel files annual, quarterly and special reports, proxy statements,
and other information with the Securities and Exchange Commission. You may read
and copy any document we file with the SEC at the following SEC public reference
rooms: 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and 7 World
Trade Center, Suite 1300, New York, New York 10048. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public at the SEC's web site at
http://www.sec.gov.
Our common stock is quoted on The Nasdaq National Market under the
symbol "PTEL," and our SEC filings can also be read at the following Nasdaq
address: Nasdaq Operations, 1735 K Street, N.W., Washington, D.C. 20006.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus. However, information in this
prospectus supersedes information incorporated by reference that we filed with
the SEC prior to the date of this prospectus. We incorporate by reference the
documents listed below:
1. our Annual Report on Form 10-K for the fiscal year ended
December 31, 1998;
2. our Quarterly Report on Form 10-Q for the quarter ended March
31, 1999;
3. our Quarterly Report on Form 10-Q for the quarter ended June
30, 1999;
4. our Current Report on Form 8-K filed on June 16, 1999 relating
to the sale of certain tower assets by us and our
subsidiaries;
5. our Current Report on Form 8-K filed on May 17, 1999 relating
to the sale of our cellular assets; and
6. the description of our common stock contained in our
registration statement on Form 8-A, declared effective by the
SEC on December 20, 1993, including any amendment or report
filed for the purpose of updating this information.
This prospectus is accompanied by a copy of our Form 10-K for the
fiscal year ended December 31, 1998 and a copy of our Form 10-Q for the quarter
ended June 30, 1999. If you need an additional copy of these documents, or if
you would like to receive a copy of any of the other documents referenced above,
you may request copies, at no cost, by writing or telephoning us at the
following address: Vice President/General Counsel, Powertel, Inc., 1233 O.G.
Skinner Drive, West Point, GA 31833; telephone number (706) 645-2000.
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FORWARD-LOOKING INFORMATION
This prospectus, including the information incorporated by reference,
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We
intend these forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements in these sections. All statements
regarding our expected financial position and operating results, our business
strategy and financing plans and similar matters are forward-looking statements.
These statements can sometimes be identified by our use of forward-looking words
such as "believe," "may," "will," "anticipate," "estimate," "continue,"
"expect," "could," "should," "would" or "intend." Our actual results could
differ materially from those anticipated by these forward-looking statements as
a result of the factors described under "Risk Factors" and other information
contained in this prospectus and our other SEC filings. In particular, please
review the sections captioned "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our annual report on Form 10-K for the
year ended December 31, 1998 and our quarterly reports on Form 10-Q for the
quarters ended March 31, 1999 and June 30, 1999, which reports are incorporated
by reference. You should also review similar sections contained in any
subsequently filed Exchange Act reports. In connection with forward-looking
statements which appear in these disclosures, you should carefully consider the
factors described in this prospectus under "Risk Factors."
RISK FACTORS
You should carefully consider the risks and uncertainties described
below before making an investment decision. Our business, financial condition
and operating results could be adversely affected by any of the following
factors, in which event the trading price of our common stock could decline, and
you could lose part or all of your investment.
WE NEED SIGNIFICANT CAPITAL TO FUND OUR OPERATIONS AND EXPAND OUR BUSINESS
We require significant amounts of capital to fund our operations and
expand our personal communications services ("PCS") business. We currently
estimate that our capital expenditures will total approximately $150 million in
1999, primarily relating to:
o the continued expansion of our PCS network;
o maintenance of our network service quality and billing system
functionality; and
o completion of customer service enhancement projects.
Although we are unable to predict the amount of expenditures that we will make
beyond 1999, we may need to raise additional capital to fund and expand our
business operations. We also will need to raise additional capital if we decide
to acquire additional licenses or businesses. We may attempt to raise additional
capital through public or private debt or equity financings, vendor financings
or other means. However, we cannot guarantee that additional financing will be
available to us or, if available, that we will be able to obtain it on terms
acceptable to us, favorable to our stockholders and within the limitations
contained in our indentures, credit facility and any future financing
arrangements. If we fail to obtain additional financing, we could experience
delays in some or all of our development and expansion plans
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and expenditures, which could limit our ability to meet our debt service
obligations and could materially adversely affect our business, financial
condition and operating results.
IF WE CONTINUE TO EXPERIENCE OPERATING LOSSES AND NEGATIVE CASH FLOW FROM
OPERATIONS, WE MAY BE UNABLE TO MEET OUR WORKING CAPITAL REQUIREMENTS AND DEBT
SERVICE OBLIGATIONS
We have experienced significant operating losses and negative cash
flows from operating activities in recent years. We expect to continue to incur
significant operating losses and to generate negative cash flows from operating
activities in the future while we continue to construct our PCS system and build
our customer base. Our ability to satisfy our debt repayment obligations and
covenants depends upon our future performance, which is subject to a number of
factors, many of which are beyond our control. We cannot guarantee that we will
generate sufficient cash flow from our operating activities to meet our debt
service and working capital requirements, and we may need to refinance our
indebtedness. However, our ability to refinance our indebtedness will depend on,
among other things, our financial condition, the state of the public and private
debt and equity markets, the restrictions in the instruments governing our
indebtedness and other factors, some of which may be beyond our control. In
addition, if we do not generate sufficient cash flow to meet our debt service
requirements or if we fail to comply with the covenants governing our
indebtedness, we may need additional financing in order to service or extinguish
our indebtedness. We may not be able to obtain financing or refinancing on terms
that are acceptable to us or favorable to us or our stockholders. In the absence
of available financing or refinancing, we could be forced to dispose of assets
in order to make up for any shortfall in the payments due on our indebtedness
under circumstances that might not be favorable to realizing the highest price
for those assets. A substantial portion of our assets consists of intangible
assets, principally licenses granted by the Federal Communications Commission.
The value of our licenses depends upon a variety of factors, including the
success of our PCS business and the wireless telecommunications industry in
general. In addition, transfers of interests in licenses are subject to FCC
approval. As a result, we cannot guarantee that we would be able to sell our
assets quickly enough, or for sufficient amounts, to enable us to meet our debt
service or working capital requirements.
BECAUSE WE ARE SUBJECT TO COVENANTS, WE HAVE A LIMITED ABILITY TO ENGAGE IN SOME
TYPES OF TRANSACTIONS
Our indentures and our credit facility subject us to covenants, and any
additional financing agreements that we enter into in the future may also
subject us to covenants. The covenants in our indentures and our credit facility
affect, and in some cases significantly limit or prohibit, our ability to:
o incur additional indebtedness and/or create liens;
o make prepayments of certain indebtedness;
o make investments;
o engage in transactions with stockholders and affiliates;
o issue capital stock;
o sell assets; and
o engage in mergers and consolidations.
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If we do not comply with the covenants in our indentures and our credit
facility, our obligations to repay the debt outstanding under those documents
may be accelerated. In addition, covenants contained in our credit facility
require us to maintain financial ratios and to achieve targeted performance
levels. We cannot guarantee that we will be able to maintain these financial
ratios or to achieve these targeted performance levels. Our failure to maintain
these ratios or to achieve these targeted performance levels would constitute
events of default under the credit facility, even if we are still able to meet
our debt service obligations. An event of default under the credit facility
would allow the lenders to accelerate the maturity of that indebtedness. This
could cause a significant portion of our other indebtedness, including notes
outstanding under our indentures, to become immediately due and payable.
VARIOUS FACTORS OUTSIDE OF OUR CONTROL MAY AFFECT OUR OPERATING RESULTS AND
CAUSE POTENTIAL FLUCTUATIONS IN OUR QUARTERLY RESULTS
Our future success depends on a number of factors, many of which are
beyond our control. In particular, our revenue depends on our ability to attract
and keep subscribers. Most of our subscribers may discontinue their service any
time for any reason. Our operating results, cash flows and liquidity may
fluctuate significantly in the future due to factors beyond our control, which
include:
o how quickly we are able to acquire new subscribers;
o how expensive it will be to acquire new subscribers;
o how much money we have to spend to improve our business and
expand our operations;
o how quickly we are able to develop new products and services
that our subscribers require and accept;
o how our prices compare to those of our competitors; and
o other general economic factors.
It is possible that in some future period, our operating results and/or
our growth rate will be below what public market analysts and investors expect.
If that happens, the market price of our common stock could decline materially.
THE LACK OF NATIONAL GSM COVERAGE MAY HINDER OUR GROWTH
Although FCC technical standards for analog cellular systems assure
nationwide compatibility between all cellular carriers and handsets, the FCC has
not adopted a nationwide technology standard for PCS operations. Accordingly,
each PCS licensee is free to select among several competing, and currently
incompatible, technologies. We use the Global System for Mobile Communications
("GSM") technical standard in our markets. For our subscribers to roam in other
markets, either at least one PCS licensee in the other market must use the GSM
standard, or subscribers must use dual-mode handsets compatible with a cellular
system in the other market. Dual-mode handsets are more expensive than
single-mode handsets. The comparatively higher cost, or the potential lack of
consumer acceptance of these handsets, may prevent us from retaining current
subscribers or attracting new subscribers.
Our principal PCS competitors use standards other than GSM. As a
result, our subscribers may not be able to conveniently use PCS services while
roaming in some areas outside our markets.
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Sprint PCS and PrimeCo use PCS systems based on the Code Division Multiple
Access ("CDMA") standard. CDMA providers, including competitors in several of
our markets, own licenses covering approximately 100% of the U.S. population.
AT&T Wireless uses a PCS system based on the Time Division Multiple Access
("TDMA") standard. TDMA providers own licenses covering over 96% of the U.S.
population. We and other PCS licensees who use GSM systems own licenses covering
markets which represent over 98% of the U.S. population. However, certain major
metropolitan areas, such as New Orleans, are not served by GSM providers because
licenses covering those areas were not awarded to a GSM provider in the recent
FCC reauctions of licenses. In addition, we cannot guarantee that PCS licensees
who use GSM systems will successfully build out their markets, or that those who
currently use GSM will continue to use GSM. There may also be delays in
deploying GSM systems in other markets due to the financial constraints of
certain GSM service providers. Accordingly, GSM systems may cover less of the
U.S. population than competing standards, and we may have difficulty competing
successfully with providers offering a larger coverage footprint or more
extensive roaming capabilities.
There is also a continuing debate as to whether a single international
standard should be adopted for the next generation of PCS technology worldwide.
The outcome of the debate could have a significant impact on us if a non-GSM
standard is chosen as the single worldwide standard for next generation PCS
communications.
SIGNIFICANT COMPETITION IN THE MARKETPLACE MAY HINDER OUR GROWTH
Competition for wireless subscribers is based principally on the
services and features offered, system quality, customer service, system
coverage, system capacity and price. We currently compete with multiple
providers of PCS, cellular and other wireless services. In each market in which
we operate, the FCC initially granted six PCS licenses and two cellular
licenses. Under current FCC rules, PCS licenses may be combined or further
subdivided among any number of providers, subject to certain FCC rules.
Competition in our markets is intense. Our principal wireless services
competitors include BellSouth Mobility, GTE Wireless, AT&T Wireless and Sprint
PCS. Many of these competitors have substantially greater financial, technical,
marketing, sales and distribution resources than we have, and several operate in
multiple segments of the industry. Several of our competitors, through joint
ventures and affiliation arrangements, operate or plan to operate nationwide
wireless systems throughout the continental United States.
We also compete with paging, dispatch and continental mobile telephone
companies, resellers, and landline telephone service providers. In addition,
specialized mobile radio licensees, including Nextel, operate digital mobile
communications systems using existing specialized mobile radio frequencies in
many cities throughout the United States, including some of our markets. These
systems, referred to as enhanced specialized mobile radio, compete with our
systems. Given rapid advances in the wireless communications industry, we cannot
guarantee that new technologies will not evolve that will compete with our
products and services. We expect some competitors to market other services, such
as cable television access or landline local exchange or interexchange services,
with their wireless telecommunications service offerings.
Competition in our industry is intense and is a cause of subscriber
attrition. We may need to reduce our prices in order to meet reductions in rates
by others. Reductions in our prices could adversely affect us by reducing the
revenue we receive from our customers. If we are unable or unwilling to reduce
our prices, or do not respond quickly to competitive developments, we could lose
customers to our competitors. We cannot guarantee that we will continue to
compete successfully in this environment or that technologies and products that
are more commercially effective than ours will not be developed.
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WE ARE SUBJECT TO LITIGATION WHICH COULD ADVERSELY AFFECT OUR BUSINESS
We are subject from time to time to legal proceedings that arise out of
our business operations, including service, billing and collection matters.
Although the actual damages sought in these legal proceedings are generally
small, some of these legal proceedings may seek punitive damages and/or attempt
to be certified as class actions. While we do not expect these legal proceedings
to have a material adverse effect on our business, financial condition and
operating results, we cannot guarantee that the resolution of any or all of them
will not have a material adverse effect.
THE ZONING APPROVALS THAT WE OFTEN NEED TO ERECT A TOWER STRUCTURE MAY HINDER
OUR BUILDOUT PLANS
State and local authorities generally have broad power to establish
regulations concerning the use of land in their jurisdictions. These regulations
may restrict or prohibit the construction of antenna towers in particular
locations and, consequently, may limit the number of antenna sites available to
us. We have experienced, and may experience in the future, difficulty in
obtaining zoning approvals for tower and antenna sites. These difficulties may
delay, or in some cases prevent, our construction of towers and placement of
antennae. We cannot guarantee that the application of zoning and other land use
regulations by state and local authorities will not have a material adverse
effect on our future buildout.
Under the 1996 Telecommunications Act, states may not restrict cell
siting or modification based upon the environmental effects of radio frequency
emissions if those emissions meet the standards which the FCC imposed in 1996.
However, state and local governmental authorities continue to impose regulations
that expressly prohibit the construction of additional tower sites, including
several governmental authorities in our markets. In some cases, judicial or
other proceedings are pending to challenge a local government's authority in
this area. However, it is possible that local governmental authorities may
continue to adopt policies or moratoria on construction of new towers or
facilities which will delay or prevent the construction of portions of our PCS
system.
RADIO FREQUENCY EMISSIONS AND THE USE OF MOBILE TELEPHONES MAY POSE HEALTH OR
SAFETY CONCERNS
Media reports and university and industry studies have suggested that
radio frequency emissions from wireless handsets may be linked to various
adverse health consequences, including cancer and injuries from automobile
accidents, and may interfere with various electronic medical devices, including
hearing aids and pacemakers. Concerns over radio frequency emissions may
discourage the use of wireless handsets or could lead to governmental regulation
that could adversely affect our business. Several jurisdictions have proposed
legislation which would prohibit or restrict the use and/or possession of a
mobile telephone while driving an automobile. If this legislation is adopted in
a substantial number of markets, it may have an adverse effect on our business.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATION, ANY CHANGE IN WHICH COULD
AFFECT OUR BUILDOUT PLANS OR FINANCIAL PERFORMANCE
The licensing, construction, operation, acquisition and sale of
wireless systems is regulated by the FCC. Changes in the regulation of these
activities, including the issuance of new licenses, could adversely affect our
operations. In addition, we cannot guarantee that our licenses will be renewed.
All PCS licenses are granted for a 10-year period. At the end of this period the
licensee must apply for renewal. Licenses may be revoked by the FCC at any time
for cause and renewal of our licenses is also subject to satisfaction of the
FCC's build-out requirements.
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We must obtain a number of authorizations and permits from federal,
state and local governments. Some of our operating costs are also affected by
governmental actions that are beyond our control. We cannot guarantee that we
will be able to obtain and retain all necessary governmental authorizations and
permits. Our failure to do so could negatively affect our existing operations
and delay or prohibit proposed operations.
Many aspects of the wireless communications industry are subject to
federal and state regulations that are constantly evolving. These regulations
apply to matters such as technical interconnection requirements, access to 911
service and universal service obligations. Regulations also apply to
interference between various types of wireless systems and between wireless
devices and other devices, including medical devices. We may be required to
modify our business plans or operations in response to new and evolving
regulations. We cannot guarantee that we will be able to do so in a cost
effective manner, or at all.
THE MAJORITY OF OUR COMMON STOCK IS HELD BY FOUR INVESTORS, AND THEY EXERCISE
SIGNIFICANT INFLUENCE OVER US
As of September 17, 1999, based upon publicly-available filings, we
believe that ITC Holding Company, Inc. beneficially owned approximately 27.2%,
SCANA Communications, Inc. beneficially owned approximately 17.0%, The Huff
Alternative Income Fund, L.P. beneficially owned approximately 13.2% and
Ericsson Inc. beneficially owned approximately 14.3% of our outstanding common
stock. Ericsson Inc., which owns all of our outstanding Series A Convertible
Preferred Stock, has agreed to sell all of this preferred stock to Sonera Ltd.
Assuming the consummation of this transaction, Sonera will beneficially own
approximately 14.3% of our outstanding common stock, and Ericsson will not own
any. These beneficial ownership percentages include shares of our common stock
currently owned directly or indirectly by a person and shares of common stock
that such person has the right to acquire within 60 days after September 17,
1999 because of that person's ownership of our preferred stock that is
convertible during such period. If these persons acted together, they would have
sufficient voting power to control the outcome of corporate actions submitted to
our stockholders for approval and to control our management and affairs,
including the election of our board of directors and some types of change of
control transactions.
WE ARE SUBJECT TO PROVISIONS THAT MAY PREVENT A THIRD-PARTY FROM EFFECTING A
CHANGE OF CONTROL
Even if our stockholders would benefit from a change of control,
provisions in our certificate of incorporation, our bylaws, the Delaware
Corporation Law and the agreements governing our debt could delay or impede the
removal of incumbent directors or discourage a third-party from attempting to
acquire control of us. For example:
o We have a staggered board of directors.
o Our certificate of incorporation authorizes the board of
directors to issue shares of preferred stock, in one or more
series, and to determine the terms, conditions, rights,
privileges and preferences of this preferred stock without
further stockholder approval.
o We are governed by Section 203 of the Delaware Corporation
Law, which prohibits us from engaging in some mergers,
consolidations, sales or other transactions with any person
who owns more than a particular percentage of our stock for a
period of three years after the date of the transaction in
which the person acquired that percentage of our stock, unless
specified conditions are met.
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o Our indebtedness may also become due and payable upon a change
in control.
Any of these provisions could have the effect of delaying, deferring, or
preventing a change of control.
OUR OPERATIONS MAY BE HARMED IF OUR OR OUR VENDORS' COMPUTER PROGRAMS DO NOT
FUNCTION PROPERLY IN THE YEAR 2000
Most of the world's computer hardware and software have historically
used only two digits to identify the year in a date, often meaning that the
computer will fail to distinguish dates in the 21st century from dates in the
20th century. As a result, various problems may arise from the improper
processing of dates and date-sensitive calculations by computers and other
machinery as the year 2000 is approached and reached. We are currently
remediating our critical systems to address the year 2000 issue. Critical
systems are those whose failure poses a risk of disruption to our ability to
provide PCS services, collect revenues, meet safety standards or comply with
legal requirements. We expect to incur internal staff costs as well as
consulting and other expenses related to infrastructure and facilities
enhancements necessary to prepare the systems for the year 2000. We cannot
guarantee that the remediation of our critical systems will be complete by the
year 2000. Much of our technology, including technology associated with our
critical systems, is purchased from third parties, and our network is
interconnected with the networks of many third parties. We are dependent on
those third parties to assess the impact of the Year 2000 issue on the
technology and services they supply and to take any necessary corrective action.
Our plan includes obtaining letters from all third parties to determine whether
they have adequately assessed the problem and taken corrective action. We cannot
guarantee that these third parties will have taken the necessary corrective
action before the year 2000.
USE OF PROCEEDS
The net proceeds from any issuance of common stock upon exercise of the
warrants are expected to be used to partially finance the development,
construction and operating costs associated with our personal communications
system.
POWERTEL
Unless otherwise indicated, all population data set forth herein is
based on the 1998 Paul Kagan Associates, Inc. Cellular/PCS POP Book, and all
industry data set forth herein is based upon information compiled by the
Cellular Telecommunications Industry Association and/or Paul Kagan Associates,
Inc.
We provide PCS services in the southeastern United States under the
name "Powertel." Our licenses encompass a territory of approximately 246,000
contiguous square miles with a population of approximately 24.4 million people.
We hold licenses to serve the Major Trading Areas ("MTAs") of Atlanta, Georgia;
Jacksonville, Florida; Memphis, Tennessee/Jackson, Mississippi; and Birmingham,
Alabama, as well as 13 Basic Trading Areas ("BTAs") in Kentucky and Tennessee.
We hold 30 MHz of spectrum in our MTA markets, and we hold 20 MHz of spectrum in
all of our BTA markets except for the Knoxville, Tennessee BTA, where we hold a
license for 10 MHz of spectrum. We have one of the largest contiguous licensed
PCS footprints in the southeastern United States.
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We introduced our services in October 1996 in Jacksonville, Florida and
Montgomery, Alabama, and we have, to date, launched our services in a total of
34 markets in the Southeast. In most of these markets, we were the first to
offer PCS services commercially. As of June 30, 1999, we had approximately
292,000 postpaid subscribers and 90,000 prepaid subscribers.
On April 30, 1999, we sold substantially all of our cellular assets in
western Georgia and eastern Alabama to Public Service Cellular, Inc. for $89
million in cash. On June 2, 1999, we sold 619 of our communications towers to a
subsidiary of Crown Castle International Corp. for an aggregate of $262 million
in cash. In connection with this sale, we agreed to lease space on these towers
for a period of ten years, with three five year renewal periods that we may
exercise at our option. Following the closing of the tower sale, we entered into
a binding letter agreement with Crown Castle that provides for Crown Castle to
purchase up to 31 additional tower sites on or before December 31, 1999 for
approximately $13 million and for Crown Castle to provide us with build-to-suit
tower construction services through December 31, 2000.
THE WIRELESS TELECOMMUNICATIONS INDUSTRY
Since 1983, the demand for wireless telecommunications services has
grown dramatically as cellular, paging and other emerging wireless
communications services have become widely available and increasingly
affordable. Service revenues for the wireless telephone industry reached
approximately $29.6 billion for the year ending June 30, 1998, as compared to
approximately $364.3 million for the year ending June 30, 1985. The number of
wireless telephone subscribers nationwide has grown from approximately 680,000
in 1986 to more than 77 million at the end of July 1999.
Analog cellular services are the most widely deployed two-way wireless
services available today. However, analog cellular systems transmit voice and
data signals by means of one continuous electronic signal that varies in
amplitude or frequency over a single radio channel. In contrast, digital
systems, including the systems used to provide PCS, transmit signals as a stream
of digits that is compressed before transmission, enabling a single radio
channel to carry multiple simultaneous signal transmissions. This increased
capacity, along with other enhancements in digital protocols, allows
digital-based wireless technologies to offer new and enhanced services,
including greater call privacy and single number (or "find me") service, and
more robust data transmission features, including "mobile office" applications
(including facsimile and e-mail).
Although PCS and cellular networks use similar technologies and
hardware, they are incompatible because they operate on different frequencies
and utilize different signaling protocols. We began marketing dual-mode handsets
capable of receiving and transmitting over both analog cellular and GSM-based
PCS networks in December 1998. Our dual-mode service offering allows for
automatic delivery of calls over analog cellular systems to our PCS subscribers
roaming in areas where GSM-based PCS service is not available and where we have
a roaming agreement with the analog cellular provider.
PCS systems in the United States operate under one of three digital
transmission protocols - GSM, CDMA or TDMA. These protocols are incompatible
with each other. Our network uses GSM, which is the leading digital wireless
technology in the world with over 170 million subscribers worldwide. We are also
a member of the GSM Alliance L.L.C., a consortium of 17 PCS carriers which offer
PCS service using the GSM protocol in over 3,400 cities and towns throughout the
United States. Through the GSM Alliance, we allow our customers to roam in most
major metropolitan areas in the United States and Canada. GSM Alliance members
include us, Aerial, Airadigm, BellSouth Mobility DCS, the GSM subsidiary of
BellSouth Corporation, Conestoga Wireless, Cook Inlet PCS, DIGIPH PCS, Iowa
Wireless Services, Microcell Connexions, NPI Wireless, Omnipoint, Pacific Bell
Mobile Services, VoiceStream
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<PAGE> 13
and Wireless 2000 PCS, among others. We offer a single roaming rate to our
customers when roaming on any GSM network throughout the United States and
Canada and have recently launched our new 50-State Rate(sm) allowing our
customers to roam on any U.S. GSM network at no extra charge.
While various incompatible PCS protocols have emerged because of the
absence of a required universal digital signaling protocol, there is an ongoing
debate focused on determining the next generation of worldwide wireless
standards. Controversy exists over whether world standards organizations, such
as the European Telecommunications Standards Institute ("ETSI") and the
International Telecommunications Union, should dictate a single standard for
third generation ("3G") wireless services. The leading protocols under
consideration include W-CDMA, which is a GSM-based version of next generation
wideband CDMA technology supported by the GSM Alliance, and CDMA2000, which is a
CDMA-based 3G technology supported by certain U.S. manufacturers. This debate
has become highly visible in international politics. ETSI, which has advocated
W-CDMA as the European 3G standard, is being challenged by other standards
bodies and the United States as being isolationist and precluding non-European
manufacturers from a significant marketplace in the future. The GSM Alliance is
actively lobbying for the adoption of multiple standards for 3G wireless, much
like the co-existing standards for second generation wireless today. However,
these international standards debates could have a significant impact upon the
future of GSM carriers in the event that a standard or family of standards are
adopted that have limited backwards compatibility with our existing GSM
networks.
OUR OPERATIONS
Markets
Our licenses cover approximately 246,000 contiguous square miles in
portions of the following 12 states: Alabama; Arkansas; Florida; Georgia;
Illinois; Indiana; Kentucky; Louisiana; Mississippi; Missouri; South Carolina;
and Tennessee. Our markets include approximately 24.4 million people. We
currently provide PCS services in the 34 markets where we have completed our
initial buildout. Generally, our "initial buildout" of a licensed territory
includes the construction of cell sites:
(a) in metropolitan areas with a population greater than 100,000
people;
(b) in smaller cities that, due to location or demographics, we
consider to be strategically important; and
(c) along the major highway corridors connecting these areas.
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<PAGE> 14
We have completed the initial buildout of our PCS system in the
following cities:
<TABLE>
<CAPTION>
GEORGIA TENNESSEE ALABAMA
------- --------- -------
<S> <C> <C>
Athens Chattanooga Anniston
Atlanta Jackson Auburn-Opelika
Augusta Memphis Birmingham
Brunswick Nashville Decatur
Columbus Dothan
LaGrange Florence
Macon MISSISSIPPI Gadsen
Savannah ----------- Huntsville
West Point Jackson Montgomery
Tupelo Tuscaloosa
FLORIDA SOUTH CAROLINA KENTUCKY
------- -------------- --------
Gainesville Aiken Louisville
Jacksonville Hilton Head Lexington
Panama City
St. Augustine
Tallahassee
</TABLE>
We also offer service along the major highway corridors connecting all of our
markets. Based on customer demand and competitive factors, we intend to continue
the buildout of our PCS system to enhance and expand our coverage. As of June
30, 1999, we had approximately 382,000 subscribers.
Strategy
Our strategy is to:
o continue to build out a high-quality PCS system;
o offer a broad range of services, including enhanced services;
o expand our subscriber base by providing wireless services of
the highest quality, functionality and value;
o expand our regional market presence by managing and
affiliating with other PCS licensees, as well as potentially
acquiring additional strategic PCS licenses and other PCS
providers; and
o provide our customers with the ability to receive service in
areas outside of our service area, including internationally,
by entering into additional roaming agreements.
We intend to achieve significant market penetration by aggressively marketing
competitively-priced PCS services, including enhanced services not currently
provided by analog or digital cellular operators, and by providing superior
customer service. We intend to remain a low-cost provider of PCS services by
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<PAGE> 15
generating economies of scale through our operation in contiguous market areas
and our focus on customer acquisition and retention.
Services
Our service offerings consist primarily of wireline enhancement
products in which PCS supplements a customer's landline communications. We
currently offer a full range of wireless telecommunications services, including
enhanced features and services not generally provided by analog or digital
cellular operators which include:
o secure communications;
o sophisticated call management incorporating features including
caller I.D. and call forwarding;
o enhanced battery life; and
o a short message service which allows subscribers to send and
receive alphanumeric and text messages on their handsets.
In addition, we have expanded our current offerings of wireless
telecommunications services to include international roaming and some data and
information services. In the future, we intend to offer single number service,
alternative line service, wireless e-mail, home zone billing, additional
information services delivered to the handset, virtual private network services
and fixed wireless services that could serve as the customer's primary mode of
telecommunication.
Our customers who subscribe to a calling plan with a $50 or higher
monthly access fee may call anywhere in the U.S. with no additional long
distance charges. Regular airtime rates apply. In July 1999, we launched our new
50-State Rate plans which offer our customers flat-rate pricing for local,
long-distance and roaming calls on any GSM network in the U.S. We also offer
dual-mode services for an additional charge of $5 per month. We provide our
prepaid services through an advanced intelligent network platform that allows
real-time declination of a customer's account. Prepaid customers are not
required to apply for credit and may purchase prepaid vouchers to increase their
"account balance" at any time. We change our service offerings and pricing from
time to time.
Roaming
Our subscribers may roam outside their "local" markets anywhere within
our PCS coverage area without being assessed daily access fees or increased
airtime usage rates. Some of our roaming partners own licenses in MTAs and BTAs
that are contiguous to our PCS markets, which increases the size of the
contiguous geographic area where our customers can use their handsets. We
provide GSM roaming services outside of our service area at a single roaming
rate which is lower than rates traditionally offered by most cellular providers.
We have also recently introduced our new 50-State Rate plans, which offer
flat-rate prices across the U.S. on any GSM network. GSM service is currently
available in more than 3,400 cities and towns in the United States. We have also
entered into roaming agreements with international GSM providers, primarily
through our membership in the GSM Alliance, which allow subscribers to roam
internationally through the use of subscriber identity module cards.
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<PAGE> 16
System Buildout
Although we have completed the initial buildout of our PCS system, we
continue to build out our existing markets for increased coverage and capacity
needs, and we are also building out some secondary cities within our licensed
footprint. Generally, we select sites on the basis of their coverage of targeted
customers, the cost to construct the site and on frequency propagation
characteristics. In many cases, we must obtain zoning approval prior to
constructing a site. For new sites, our experience indicates that the site
acquisition process can take three to twelve months. Once we acquire a site and
obtain the requisite governmental approval, preparation of the site, including
grounding, ventilation and air conditioning, equipment installation, testing and
optimization, generally requires an additional two to four months.
Customer Service
We recognize that superior customer service is vital to minimizing
customer churn and to the long-term success of our business. We try to ensure
that our PCS customers are fully introduced to our service offerings, that they
understand how to use their handset and its features and that they receive
prompt and reliable service from our customer service representatives. We
provide subscribers with toll-free access to our customer service
representatives 24 hours a day, seven days a week. In addition, subscribers can
reach a customer service representative from their handsets (with no airtime
charge) by dialing 611. We have recently completed the consolidation of our
inbound customer service organization into a new call center located in
Jacksonville, Florida in order to enable us to serve our customers more
efficiently.
Sales, Marketing and Distribution
We market our services primarily through:
o our direct sales force;
o retail stores and kiosks which we operate;
o a network of independent agents, each of which has a retail
store presence;
o mass merchandisers, such as Radio Shack, Office Depot and
Circuit City; and
o a limited amount of direct mail advertising.
In addition to traditional distribution channels, we market our PCS services
through the Internet, including through our Web site which includes an on-line
retail store where potential customers may apply for service and purchase
handsets and accessories. We support our marketing activities with local and
regional radio, television and print advertising.
Our direct and retail store sales force currently consists of
approximately 645 employees. We train our sales employees to understand our
products and services, so that they can provide extensive information to
prospective customers. We generally link sales commissions to subscriber revenue
and subscriber retention.
We also negotiate volume discounts from manufacturers of handsets and
pass a substantial portion of the discount on and further subsidize the cost of
these handsets to our subscribers, sales
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<PAGE> 17
agents and distributors. Although we subsidize a portion of most handset
purchases, even after this subsidy, our handsets are generally more expensive to
subscribers than cellular handsets. We offer over-the-air activation whereby a
customer can initiate service by purchasing a handset from any of our
distribution channels and pressing any key on the handset to reach Powertel
customer service. During this call, the customer service representative can
obtain all necessary customer information and conduct a credit scoring
assessment or, if the customer has chosen the prepaid plan, the customer service
representative can activate the customer immediately. At this time, we do not
require our PCS customers to sign long-term service contracts.
In marketing our services, we emphasize the enhanced features and
favorable pricing of our services. We also promote the improved call security of
our PCS system, which we believe encourages users to make confidential calls
that they might not otherwise make on an analog cellular telephone. We also
expect that the services offered by PCS operators will eventually be capable of
replacing some traditional landline telephone services. The potential for
increased PCS penetration of the landline market was enhanced by the 1996
Telecommunications Act, which requires local exchange carriers to interconnect
with other telecommunications providers such as us at just and reasonable rates
that are based on costs of providing the interconnection.
DISPOSITION OF OUR CELLULAR ASSETS
On April 30, 1999, we and our wholly-owned subsidiaries, ICEL, Inc. and
InterCel Licenses, Inc., sold and assigned to Public Service Cellular, Inc.
substantially all of our assets and rights relating to our cellular business in
eastern Alabama and western Georgia, including FCC licenses to provide cellular
and microwave service in this area. Through this transaction, we sold all of our
cellular telephone operations. The cash purchase price for the assets was
$89,000,000. Public Service Cellular paid $82,770,000 in cash and paid
$6,230,000 into escrow. The amount paid into escrow will be held to satisfy
claims that may be made under the indemnity and purchase price adjustment
provisions of the asset purchase agreement and will be released from escrow as
set forth in the asset purchase agreement. We recorded a gain of $79.3 million
on the sale.
DISPOSITION OF SOME OF OUR TOWER ASSETS
On June 2, 1999, we, together with some of our wholly-owned
subsidiaries, sold and transferred to Crown Castle 619 of our towers, related
assets and liabilities. At the closing, Crown Castle paid us approximately $262
million in cash, which equals approximately $423,077 per site. We also gave
Crown Castle a $383,000 credit against the aggregate purchase price as
consideration for Crown Castle's acceptance of towers with site leases which may
require revenue received from us or our affiliates to be shared with the site
lessors.
Also on June 2, 1999, pursuant to master site agreements, we and
certain of our subsidiaries agreed to pay Crown Castle monthly rent of $1,800
per tower for the continued use of the space that we or our affiliates occupied
on the towers prior to the closing. Monthly payments under the individual site
leases are subject to increase based on an agreed upon schedule and if and when
we or our affiliates add equipment to a site. In any event, the monthly rent,
including additional rents related to the addition of equipment, will be
increased on each fifth anniversary of each site lease up to an amount that is
115% of the rent paid during the preceding five year period. The term of each
site lease is ten years. We have the right to extend any site lease for up to
three additional five year periods. Each site lease will automatically renew for
an option term unless we or our affiliates notify Crown Castle of our intent not
to renew at least 180 days prior to the end of the then current term. We
recorded a gain of $47.9 million in 1999 on the sale, and we will amortize a
deferred gain of $85.5 million over the 10-year lease term.
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<PAGE> 18
Following the closing of this sale, we and Crown Castle entered into a
binding letter agreement that contemplates, subject to certain conditions, Crown
Castle purchasing an additional 31 sites from us. We expect this sale to close
on or before December 2, 1999, for a total purchase price of approximately $13
million. The letter agreement also contemplates a build-to-suit tower
construction contract between us and Crown Castle for 40 tower sites through
December 31, 2000.
COMPETITION; OTHER TELECOMMUNICATIONS TECHNOLOGIES
Competition in the wireless communications business is intense, and we
expect it to continue to increase as a result of the entrance of new competitors
and the development of new technologies, products and services. Each of the
markets in which we compete is or will be served by multiple other wireless
service providers, including cellular, PCS and other wireless operators and
resellers.
We compete directly with several other PCS providers, including
BellSouth Mobility, GTE Wireless, Sprint PCS and AT&T Wireless, in our PCS
markets. The FCC continues to auction additional licenses for wireless services,
which may allow more new competitors to enter the marketplace. We expect that
existing wireless service providers in our PCS markets will continue to upgrade
their systems. Some of these providers have been operational for a number of
years and have significantly greater financial and technical resources than
those available to us. Our wireless competitors include AT&T Wireless, AirTouch,
BellSouth Mobility, GTE Mobilnet, Alltel and Price Communications Wireless. Two
of our PCS competitors, AT&T Wireless and Sprint PCS, claim a national digital
network which some customers may view as an advantage. We, however, continue to
believe that the majority of wireless consumers are still primarily interested
in regional service, and that relatively few consumers use a national roaming
feature.
Continuing technological advances in telecommunications, and FCC
policies encouraging the development of new spectrum-based technologies, make it
impossible to predict the extent of future competition. The 1996
Telecommunications Act alters regulatory and industry barriers which for years
deterred easy competition within and between telecommunications markets. The
amended statute and related FCC rulemakings are expected to continue to open new
avenues for competitive offerings of wireless, wireline and hybrid services.
Since the introduction of PCS and ESMR, the two-way wireless services
industry has experienced a downward trend in market prices. We anticipate that
this trend will continue in the future due to increased competition. We compete
to attract and retain customers principally on the basis of our service
offerings and pricing, our customer service and our large contiguous footprint.
Our ability to compete successfully will also depend, in part, on our ability to
anticipate and respond to various competitive factors affecting the industry,
including new services that may be introduced, changes in consumer preferences,
demographic trends, economic conditions and discount pricing strategies by
competitors, which could adversely affect our operating margins.
Beginning March 23, 1999, the FCC re-auctioned additional PCS licenses
(including licenses reserved for small businesses) which, for various reasons,
had been returned to the FCC. These licenses were for varying amounts of
spectrum, ranging from 10 MHz to 30 MHz. While we did not participate directly
in this auction, we provided certain financing, subject to restrictions, to a
qualified small business, Eliska Wireless, Inc., that acquired licenses for 15
MHz of spectrum in each of the Knoxville, Tennessee BTA and the
Kingsport/Johnson City/Bristol, Tennessee BTA.
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REGULATION OF WIRELESS TELECOMMUNICATIONS SYSTEMS
The FCC regulates the licensing, construction, operation and
acquisition of wireless telecommunications systems in the United States pursuant
to the Communications Act of 1934, as amended, and the rules, regulations and
policies promulgated by the FCC. Additional regulatory authority over PCS
providers is granted to the FCC by the Budget Act and the 1996
Telecommunications Act.
Under the Communications Act, the FCC is authorized to establish
regulations governing the interconnection of PCS systems with wireline and other
wireless carriers, allocate channels and frequencies, grant or deny license
renewals and applications for transfer of control or assignment of PCS licenses,
monitor the foreign ownership of PCS licenses, and impose fines and forfeitures
for any violations of FCC regulations. The 1996 Telecommunications Act and
ongoing FCC rulemakings have led to new regulations concerning interconnection
of networks. The 1996 Telecommunications Act also permits the FCC to lift
regulations where they are no longer necessary in the public interest.
Licensing of PCS. The FCC has divided the United States and its
possessions and territories into PCS markets made up of 493 BTAs and 51 MTAs.
Each MTA consists of at least two BTAs. Numerous licensees may compete in each
PCS service area. The FCC has allocated 120 MHz of radio spectrum in the 2 GHz
band for licensed broadband PCS services. The FCC divided the 120 MHz of
spectrum into six individual blocks, each of which is allocated to serve either
MTAs or BTAs. Under the FCC's rules, a broadband PCS licensee may own
combinations of licenses (e.g., one MTA (30 MHz) and one BTA (10 MHz)) with
total aggregate spectrum of up to 45 MHz in a single geographic area. All PCS
licenses are granted for a 10-year period, at the end of which they must be
renewed. Licenses may be revoked at any time for cause, including failure to
meet certain buildout requirements imposed by the FCC on all PCS licensees.
Other FCC Requirements. The FCC also imposes requirements on our
operations with respect to interconnection to other telecommunications, the
provision of 911 and enhanced 911 services, mandatory contributions to the FCC's
universal service fund, obligations to allow resale of our services, and other
technical and reporting matters.
Other Federal Regulations. Wireless systems are subject to Federal
Aviation Administration regulations relating to the location, lighting and
construction of wireless transmitter towers and antennas and may be subject to
regulation under the National Environmental Policy Act and the environmental
regulations of the FCC. We use common carrier point-to-point microwave and
traditional landline facilities to connect our cell sites and to link them to
our main switching offices. These facilities are separately licensed by the FCC
and are subject to regulation as to technical parameters and service.
State and Local Regulation. In 1993, Congress amended the
Communications Act to preempt state or local regulation of the entry of, or the
rates charged by, any commercial or private mobile radio service provider.
Notwithstanding this preemption, a state may petition the FCC for authority to
begin regulating or to continue regulating CMRS rates. Petitioners must
demonstrate that existing market conditions cannot protect consumers from
unreasonable and unjust rates or that the service is a replacement for
traditional wireline telephone service for a substantial portion of the wireline
service within the state. So far, the states in which we currently provide or
plan to provide service (Alabama, Arkansas, Florida, Georgia, Illinois, Indiana,
Kentucky, Louisiana, Mississippi, Missouri, South Carolina and Tennessee) either
have not sought to regulate these matters or, in the case of Louisiana, have had
their petition to regulate denied by the FCC.
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States are not, however, prohibited from regulating other terms and
conditions of CMRS, such as service quality, billing procedures and consumer
protection standards. In addition, the siting and construction of transmitter
towers, antennas and equipment shelters are often subject to state or local
zoning, land use and other regulations.
EMPLOYEES AND AGENTS
As of June 30, 1999, we had approximately 1,700 employees. We
anticipate that the continued development of our PCS system will require us to
continue to hire a substantial number of new employees. None of our employees is
represented by a labor organization, and we consider our employee relations to
be good.
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PLAN OF DISTRIBUTION
We may from time to time issue up to 1,224,557 shares of common stock,
subject to adjustment, to the holders of the warrants upon exercise thereof by
such holders and in accordance with the warrant agreement. We will issue the
common stock directly or through agents to the holders of the warrants.
LEGAL MATTERS
The validity of the shares of common stock offered hereby has been
passed upon for us by Nelson Mullins Riley & Scarborough, L.L.P., Atlanta,
Georgia.
EXPERTS
The consolidated financial statements of Powertel, Inc. as of December
31, 1998 and 1997 and for each of the years in the three-year period ended
December 31, 1998 have been audited by Arthur Andersen LLP, independent
certified public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon such reports and upon the
authority of said firm as experts in accounting and auditing.
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POWERTEL, INC.
<PAGE> 23
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by
Powertel in connection with the sale of the common stock being registered. All
amounts are estimates except the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee ................... $ 69,655
NASD filing fee ........................ 15,500
Blue sky fees and expenses ............. 17,500
Printing expenses ...................... 262,500
Legal fees and expenses ................ 325,000
Accounting fees and expenses ........... 112,500
Miscellaneous expenses ................. 19,311
---------
Total ............................ $ 821,966
=========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Powertel's Third Restated Certificate of Incorporation, as amended,
contains provisions that provide that no director of Powertel shall be liable
for breach of fiduciary duty as a director except for (i) any breach of the
director's duty of loyalty to Powertel or its stockholders; (ii) acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of the law; (iii) liability under Section 174 of the Delaware
Corporation Law; or (iv) any transaction from which the director derived an
improper personal benefit. Powertel's Certificate of Incorporation contains
provisions that further provide for the indemnification of directors and
officers to the fullest extent permitted by the Delaware Corporation Law. Under
Powertel's Amended and Restated Bylaws, Powertel is required to advance
expenses incurred by an officer or director in defending any such action if the
director or officer undertakes to repay such amount if it is determined that
the director or officer is not entitled to indemnification.
Powertel's Certificate of Incorporation also provides that, except as
expressly prohibited by law, Powertel shall indemnify its directors, officers,
employees and agents and its former directors, officers, employees and agents
and those who serve, at Powertel's request, in such capacities with another
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
the defense of any action, suit, or proceeding in which they or any of them
were or are made parties or are threatened to be made parties by reason of
their serving or having served in such capacity. Powertel's Certificate of
Incorporation provides, however, that such person must have acted in good faith
and in a manner such person reasonably believed to be in (or not opposed to)
the best interests of Powertel and, in the case of a criminal action, such
person must have had no reasonable cause to believe his or her conduct was
unlawful. In addition, Powertel's Certificate of Incorporation does not permit
indemnification in an action or suit by or in the right of Powertel, where such
person has been adjudged liable to Powertel, unless, and only to the extent
that, a court determines that such person fairly and reasonably is entitled to
indemnity for costs the court deems proper in light of liability adjudication.
Indemnity is mandatory to the extent a claim, issue or matter has been
successfully defended. In addition, Powertel has entered into indemnity
agreements with all of its directors and officers pursuant to which Powertel
has agreed to indemnify the directors and officers as permitted by the Delaware
Corporation Law and has obtained directors and officers liability insurance.
II-1
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
- ------ -------------------
<S> <C> <C>
2(a) * Asset Purchase Agreement dated December 23, 1996 by and
among Rural Cellular Corporation, Unity Cellular Systems,
Inc., InterCel Licenses, Inc. and InterCel, Inc. (Filed as
Exhibit 99.1 to the Company's Form 8-K dated December 23,
1996 and incorporated herein by reference.)
2(b) * Closing Memorandum dated May 1, 1997 by and between Rural
Cellular Corporation, MRCC, Inc., Unity Cellular Systems,
Inc., InterCel Licenses, Inc. and InterCel, Inc. (Filed as
Exhibit 2.2 to the Company's Form 8-K dated May 12, 1997 and
incorporated herein by reference.)
2(c) * Asset Purchase Agreement dated January 5, 1999 by and among
Public Service Cellular, Inc., Powertel, Inc., ICEL, Inc. and
InterCel Licenses, Inc. (Filed as Exhibit 99.1 to the
Company's Form 8-K dated January 5, 1999 and incorporated
herein by reference.)
2(d) * Closing Memorandum dated April 30, 1999 by and between
Public Service Cellular, Inc., Powertel, Inc., ICEL, Inc. and
InterCel Licenses, Inc. (Filed as Exhibit 2.2 to the
Company's Form 8-K dated April 30, 1999 and incorporated
herein by reference.)
2(e) * Asset Purchase Agreement dated March 15, 1999 by and among
Crown Castle International Corp., CCP Inc., Powertel Atlanta
Towers, LLC, Powertel Birmingham Towers, LLC, Powertel
Jacksonville Towers, LLC, Powertel Kentucky Towers, LLC,
Powertel Memphis Towers, LLC and Powertel, Inc. (Filed as
Exhibit 2(d) to Powertel's Annual Report on Form 10-K for the
year ended December 31, 1998 (the "1998 10-K") and
incorporated herein by reference.)
2(f) * Escrow Agreement dated March 15, 1999 by and among Crown
Castle International Corp., CCP Inc., Powertel Atlanta
Towers, LLC, Powertel Birmingham Towers, LLC, Powertel
Jacksonville Towers, LLC, Powertel Kentucky Towers, LLC,
Powertel Memphis Towers, LLC, Powertel, Inc. and SunTrust
Bank. (Filed as Exhibit 2(e) to the 1998 10-K and
incorporated herein by reference.)
4(a) * Indenture dated as of February 7, 1996 between InterCel,
Inc. and Bankers Trust Company, as Trustee, relating to the
12% Senior Discount Notes Due 2006 of InterCel, Inc. (Filed
as Exhibit 4(a) to Registration Statement on Form S-1, File
No. 33-96218 ("February 1996 Form S-1"), and incorporated
herein by reference.)
4(b) * Warrant Agreement dated as of February 7, 1996 between
InterCel, Inc. and Bankers Trust Company, as Warrant Agent.
(Filed as Exhibit 4(b) to the February 1996 Form S-1, and
incorporated herein by reference.)
4(c) * Form of Indenture (including form of Note) between
InterCel, Inc. and Bankers Trust Company, as Trustee,
relating to the 12% Senior Discount Notes Due 2006 of
InterCel, Inc. (Filed as Exhibit 4(c) to Registration
Statement on Form S-1, File No. 333-2748 (the "April 1996
Form S-1"), and incorporated herein by reference.)
</TABLE>
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<PAGE> 25
<TABLE>
<S> <C> <C>
4(d) * Indenture (including form of Note) dated June 10, 1997
between InterCel, Inc. and Bankers Trust Company, as Trustee,
relating to the 11-1/8% Senior Notes Due 2007 of InterCel,
Inc. (Filed as Exhibit 4(h) to Registration Statement on Form
S-4, File No. 333-31399 (the "1997 Form S-4"), and
incorporated herein by reference.)
4(e) * Collateral Pledge and Security Agreement dated June 10,
1997 between InterCel, Inc. and Bankers Trust Company, as
Trustee. (Filed as Exhibit 4(j) to the 1997 Form S-4, and
incorporated herein by reference.)
4(f) * Certificate of Designations, Powers, Preferences and Relative
Participating or Other Rights, and the Qualifications,
Limitations or Restrictions Thereof, of Series A Convertible
Preferred Stock of InterCel, Inc. (Filed as Exhibit 10(tt) to
the Company's Form 10-Q filed for the quarter ended September
30, 1996 (the "1996 Third Quarter 10-Q"), and incorporated
herein by reference.)
4(g) * Certificate of Designations, Powers, Preferences and Relative,
Participating or Other Rights, and the Qualifications,
Limitations or Restrictions Thereof, of Series B Convertible
Preferred Stock of InterCel, Inc. (Filed as Exhibit 10(uu) to
the 1996 Third Quarter 10-Q, and incorporated herein by
reference.)
4(h) * Certificate of Amendment to the Certificate of
Designations, Powers, Preferences and Relative, Participating
or Other Rights, and the Qualifications, Limitations or
Restrictions Thereof, of Series B Convertible Preferred Stock
of InterCel, Inc. (Filed as Exhibit 4(k) to the 1997 Form
S-4, and incorporated herein by reference.)
4(i) * Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series C Convertible Preferred Stock of InterCel, Inc. (Filed
as Exhibit 4(f) to the Company's Form 10-K filed for the year
ended December 31, 1996 (the "1996 Form 10-K"), and
incorporated herein by reference.)
4(j) * Amended Certificate of Designations, Powers, Preferences
and Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series C Convertible Preferred Stock of InterCel, Inc. (Filed
as Exhibit 4(l) to the 1997 Form S-4, and incorporated herein
by reference.)
4(k) * Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series D Convertible Preferred Stock of InterCel, Inc. (Filed
as Exhibit 4(g) to the 1996 Form 10-K, and incorporated
herein by reference.)
4(l) * Amended Certificate of Designations, Powers, Preferences
and Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series D Convertible Preferred Stock of InterCel, Inc. (Filed
as Exhibit 4(m) to the 1997 Form S-4, and incorporated herein
by reference.)
4(m) * Certificate of Designations, Powers, Preferences and Relative
, Participating or Other Rights, and the Qualifications,
Limitations or Restrictions Thereof, of Series E 6.5%
Cumulative Convertible Preferred Stock of Powertel, Inc.
(Filed as Exhibit 4(a) to the Company's Form 10-Q filed for
the quarter ended June 30, 1998 (the "1998 Second Quarter
10-Q"), and incorporated herein by reference.)
</TABLE>
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<PAGE> 26
<TABLE>
<S> <C> <C>
4(n) * Certificate of Designations, Powers, Preferences and
Relative, Participating or Other Rights, and the
Qualifications, Limitations or Restrictions Thereof, of
Series F 6.5% Cumulative Convertible Preferred Stock of
Powertel, Inc. (Filed as Exhibit 4(b) to the 1998 Second
Quarter 10-Q, and incorporated herein by reference.)
4(o) * First Supplemental Indenture dated as of June 16, 1998 to the
following Indentures: Indenture dated as of February 7, 1996
for the 12% Senior Discount Notes Due 2006; Indenture dated
as of April 19, 1996 for the 12% Senior Discount Notes Due
2006; Indenture dated as of June 10, 1997 for the 11 1/8%
Senior Notes Due 2007. (Filed as Exhibit 4(c) to the 1998
Second Quarter 10-Q, and incorporated herein by reference.)
5(a) Opinion of Nelson Mullins Riley & Scarborough, L.L.P.
10(a) * Software License Agreement between InterCel, Inc. and
Systematics Telecommunications Services, Inc. dated July 24,
1992. (Filed as Exhibit 10(aa) to the Company's Form 10-KSB
filed for the year ended December 31, 1992, and incorporated
herein by reference.)
10(b) * Directors and Officers Insurance and Company Reimbursement
Policy. (Filed as Exhibit 10(ii) to Registration Statement on
Form S-1, File No. 33-72734 (the "1993 Form S-1"), and
incorporated herein by reference.)
10(c) * Form of Indemnity Agreement. (Filed as Exhibit 10(jj) to the
1993 Form S-1, and incorporated herein by reference.)
10(d) * InterCel, Inc. 1995 Employee Restricted Stock Plan (as
amended on November 17, 1995). (Filed as Exhibit 10(e) to the
February 1996 Form S-1, and incorporated herein by
reference.)
10(e) * InterCel, Inc. Amended and Restated 1991 Stock Option Plan.
(Filed as Appendix C to the Company's Definitive Proxy
Statement for the 1999 Annual Meeting of Stockholders, and
incorporated herein by reference.)
10(f) * InterCel, Inc. Amended Nonemployee Stock Option Plan.
(Filed as Exhibit 10(q) to the Company's Form 10-K filed for
the year ended December 31, 1994 (the "1994 Form 10-K"), and
incorporated herein by reference.)
10(g) * Directed Employee Benefit Trust Agreement between The
Charles Schwab Trust Company and InterCel, Inc. (Filed as
Exhibit 10(jjjj) to the 1994 Form 10-K, and incorporated
herein by reference.)
10(h) * Second Amendment to InterCel, Inc. Pension Plan dated as of
August 2, 1996. (Filed as Exhibit 10(ss) to the 1996 Third
Quarter 10-Q, and incorporated herein by reference.)
10(i) * InterCel, Inc. 401(k) Profit Sharing Plan. (Filed as Exhibit
10(j) to the February 1996 Form S-1, and incorporated herein
by reference.)
10(j) * Defined Benefit Pension Plan and Trust Adoption Agreement
(Unity Telephone Company) dated as of January 15, 1984.
(Filed as Exhibit 10(ss) to the 1993 Form S-1, and
incorporated herein by reference.)
</TABLE>
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<PAGE> 27
<TABLE>
<S> <C> <C>
10(k) * Defined Benefit Pension Plan (Unity Telephone Company).
(Filed as Exhibit 10(tt) to the 1993 Form S-1, and
incorporated herein by reference.)
10(l) * Amendment to Unity Telephone Pension Plan dated June 29, 1992.
(Filed as Exhibit 10(uu) to the 1993 Form S-1, and
incorporated herein by reference.)
10(m) * ITC Holding Company Inc. Employees Pension Plan and Trust
(as amended on December 15, 1994). (Filed as Exhibit 10(zz)
to the February 1996 Form S-1, and incorporated herein by
reference.)
10(n) * DMS-MTX Cellular Supply Agreement dated March 29, 1995
between InterCel, Inc. and Northern Telecom Inc. (Filed as
Exhibit 10(pp) to the February 1996 Form S-1, and
incorporated herein by reference.)
10(o) * Amendment No. 1 to DMS-MTX Cellular Supply Agreement between
InterCel, Inc. and Northern Telecom Inc. dated August 9,
1995. (Filed as Exhibit 10(qq) to the February 1996 Form S-1,
and incorporated herein by reference.)
10(p) * Information and Network Products and Services Agreement
dated June 16, 1994 between InterCel, Inc. and GTE
Telecommunications Service Incorporated. (Filed as Exhibit
10(uu) to the February 1996 Form S-1, and incorporated herein
by reference.)
10(q) * Credit Agreement dated as of March 4, 1996 among InterCel
PCS Services, Inc., as Borrower, Ericsson Inc., as Initial
Lender, and Ericsson Inc. as Agent. (Filed as Exhibit 10(nn)
to the April 1996 Form S-1, and incorporated herein by
reference.)
10(r) * Amendment No. 1 to the Credit Agreement by and among
Powertel, Inc., as Borrower, Ericsson Inc., as Initial
Lender, and Ericsson Inc., as Agent, dated as of October 31,
1996. (Filed as Exhibit 10(ww) to the 1996 Third Quarter 10-Q
and incorporated herein by reference.)
10(s) * Amendment No. 2 to the Credit Agreement by and among
Powertel, Inc., as Borrower, Ericsson Project Finance A.B.,
as Lender, and Ericsson Inc., as Agent, dated as of March 31,
1997. (Filed as Exhibit 10(e) to the 1997 Form S-4, and
incorporated herein by reference.)
10(t) * Amendment No. 3 to the Credit Agreement by and among
Powertel PCS, Inc., as Borrower, Goldman Sachs Credit
Partners L.P., as Lender, and Ericsson Inc., as Agent, dated
as of June 26, 1997. (Filed as Exhibit 10(f) to the 1997 Form
S-4, and incorporated herein by reference.)
10(u) * Amendment No. 4 to the Credit Agreement by and among
Powertel PCS, Inc., as Borrower, Goldman Sachs Credit
Partners L.P., as Lender, and Ericsson Inc., as Agent, dated
as of November 18, 1997. (Filed as Exhibit 10(u) to the
Company's Form 10-K for the year ended December 31, 1997 (the
"1997 Form 10-K") and incorporated herein by reference.)
10(v) * Amendment No. 5 to the Credit Agreement by and among
Powertel PCS, Inc., as Borrower, Goldman Sachs Credit
Partners L.P., as Lender, and Ericsson Inc., as Agent,
</TABLE>
II-5
<PAGE> 28
<TABLE>
<S> <C> <C>
dated as of December 23, 1997. (Filed as Exhibit 10(v) to the
1997 Form 10-K, and incorporated herein by reference.)
10(w) * Acquisition Agreement dated as of March 4, 1996 between
InterCel PCS Services, Inc. and Ericsson Inc. (Filed as
Exhibit 10(rr) to the April 1996 Form S-1, and incorporated
herein by reference.)
10(x) * Amendment No. 1 to the Acquisition Agreement for Ericsson
CMS 40 Personal Communications Systems dated as of September
2, 1997 between Powertel PCS, Inc. and Ericsson Inc. (Filed
as Exhibit 10(j) to the Company's Form 10-Q filed for the
quarter ended September 30, 1997, and incorporated herein by
reference.)
10(y) * License Agreement between LHS Communications, Inc. and
Powertel, Inc. dated August 2, 1996. (Filed as Exhibit 10(vv)
to the 1996 Third Quarter 10-Q, and incorporated herein by
reference.)
10(z) * Agreement between BellSouth Telecommunications, Inc. and
InterCel, Inc. effective as of April 1, 1997. (Filed as
Exhibit 10(pp) to the Company's Form 10-Q filed for the
quarter ended March 31, 1997 (the "1997 First Quarter 10-Q"),
and incorporated herein by reference.)
10(aa) * Agreement between BellSouth Telecommunications, Inc. and Powertel,
Inc. effective as of April 1, 1997. (Filed as Exhibit 10(qq)
to the 1997 First Quarter 10-Q, and incorporated herein by
reference.)
10(bb) * Stock Purchase Agreement dated as of March 14, 1997 between
InterCel, Inc. and SCANA Communications, Inc. (Filed as
Exhibit 10(pp) to the 1996 Form 10-K, and incorporated herein
by reference.)
10(cc) * Escrow Agreement dated as of March 14, 1997 between
InterCel, Inc., SCANA Communications, Inc. and Bankers Trust
Company, as Escrow Agent. (Filed as Exhibit 10(qq) to the
1996 Form 10-K, and incorporated herein by reference.)
10(dd) * Stock Purchase Agreement dated as of March 14, 1997 between
InterCel, Inc. and The Huff Alternative Income Fund, L.P.
(Filed as Exhibit 10(rr) to the 1996 Form 10-K, and
incorporated herein by reference.)
10(ee) * Escrow Agreement dated as of March 14, 1997 between
InterCel, Inc., The Huff Alternative Income Fund, L.P. and
Bankers Trust Company, as Escrow Agent. (Filed as Exhibit
10(ss) to the 1996 Form 10-K, and incorporated herein by
reference.)
10(ff) * Termination of Stock Purchase Agreement dated as of April
30, 1997 between InterCel, Inc. and The Huff Alternative
Income Fund, L.P. (Filed as Exhibit 10(nn) to the 1997 First
Quarter 10-Q, and incorporated herein by reference.)
10(gg) * Termination of Stock Purchase Agreement dated as of April
30, 1997 between InterCel, Inc. and SCANA Communications,
Inc. (Filed as Exhibit 10(oo) to the 1997 First Quarter 10-Q,
and incorporated herein by reference.)
</TABLE>
II-6
<PAGE> 29
<TABLE>
<S> <C> <C>
10(hh) * Stock Purchase Agreement dated as of May 23, 1997 between
InterCel, Inc. and SCANA Communications, Inc. (Filed as
Exhibit 10(c) to the 1997 Form S-4, and incorporated herein
by reference.)
10(ii) * Escrow Agreement dated as of June 5, 1997 between InterCel,
Inc., SCANA Communications, Inc. and Bankers Trust Company,
as Escrow Agent. (Filed as Exhibit 10(d) to the 1997 Form
S-4, and incorporated herein by reference.)
10(jj) * Stock Purchase Agreement dated as of May 23, 1997 between
InterCel, Inc. and The Huff Alternative Income Fund, L.P.
(Filed as Exhibit 10(a) to the 1997 Form S-4, and
incorporated herein by reference.)
10(kk) * Escrow Agreement dated as of June 5, 1997 between InterCel,
Inc., The Huff Alternative Income Fund, L.P. and Bankers
Trust Company, as Escrow Agent. (Filed as Exhibit 10(b) to
the 1997 Form S-4, and incorporated herein by reference.)
10(ll) * First Amendment to Interconnection Agreement between InterCel, Inc.
and BellSouth Telecommunications, Inc. effective as of April
1, 1997. (Filed as Exhibit 10(ll) to the 1997 Form 10-K, and
incorporated herein by reference.)
10(mm) * First Amendment to Interconnection Agreement between Powertel,
Inc. and BellSouth Telecommunications, Inc. effective as of
April 1, 1997. (Filed as Exhibit 10(mm) to the 1997 Form
10-K, and incorporated herein by reference.)
10(nn) * Powertel 401(k) Profit Sharing Plan (as amended and
restated effective January 1, 1997, and as renamed effective
July 1, 1997). (Filed as Exhibit 10(nn) to the 1997 Form
10-K, and incorporated herein by reference.)
10(oo) * Stock Purchase Agreement dated June 22, 1998, by and
between Powertel, Inc. and SCANA Communications, Inc. (Filed
as Exhibit 10(a) to the 1998 Second Quarter 10-Q, and
incorporated herein by reference.)
10(pp) * Stock Purchase Agreement dated June 22, 1998, by and
between Powertel, Inc. and ITC Wireless, Inc. (Filed as
Exhibit 10(b) to the 1998 Second Quarter 10-Q, and
incorporated herein by reference.)
10(qq) * Amended and Restated Credit Agreement dated as of February
6, 1998, among Powertel PCS, Inc., the Banks and Other
Financial Institutions Listed on the Signature Pages thereof,
Ericsson Inc., as Agent, and National Westminster Bank PLC,
as Administrative Agent for the Lenders. (Filed as Exhibit
(10(a) to the Company's Form 10-Q filed for the quarter ended
March 31, 1998, and incorporated herein by reference.) +
10(rr) * Letter Agreement dated April 22, 1998 by and among Powertel
PCS, Inc., Ericsson Inc., National Westminster Bank plc., GE
Capital and the lenders consenting thereto relating to the
Credit Facility. (Filed as Exhibit 10(c) to the 1998 Second
Quarter 10-Q, and incorporated herein by reference.)
13(a) Powertel, Inc. Annual Report on Form 10-K for the year ended
December 31, 1998. (Filed on March 29, 1999 and incorporated
herein by reference.)
13(b) Powertel, Inc. Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999. (Filed on August 12, 1999 and
incorporated herein by reference.)
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of Nelson Mullins Riley & Scarborough, L.L.P. (included
in Exhibit 5(a)).
</TABLE>
II-7
<PAGE> 30
<TABLE>
<S> <C>
24 Powers of Attorney for the following individuals: Campbell B.
Lanier, III; Allen E. Smith; Fred G. Astor, Jr.; Donald W.
Burton; Maurice P. O'Connor; William H. Scott, III; and
Donald W. Weber. (Filed as Exhibit 24(c) to Post-Effective
Amendment No. 1 to Form S-1, File No. 33-96218, filed on
August 7, 1996, and incorporated herein by reference.)
</TABLE>
- --------------------
* Previously filed.
+ Confidential treatment has been granted for certain confidential
portions of this exhibit pursuant to Rule 24(b)(2) under the Exchange
Act. In accordance with Rule 24(b)(2), these confidential portions have
been omitted from this exhibit and filed separately with the
Commission.
ITEM 17. UNDERTAKINGS.
We hereby undertake:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)
(3) of the Securities Act;
(b) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(c) to include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a) and (b) above do not apply if this
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained
in the periodic reports filed by us pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
We hereby undertake that, for the purpose of determining any liability
under the Securities Act, each filing of our annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act, (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
II-8
<PAGE> 31
Exchange Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise, we have been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by us of expenses incurred or paid by our director, officer, or
controlling person in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-9
<PAGE> 32
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Powertel,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of West Point, State of Georgia, on this 20th day of
September, 1999.
POWERTEL, INC.
By: /s/ Allen E. Smith
---------------------------------
Allen E. Smith
President/Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities listed below and on the 20th day of September, 1999.
<TABLE>
<CAPTION>
Signatures Title
- ---------- -----
<S> <C>
* Chairman of the Board of Directors
- -----------------------------------------------------
Campbell B. Lanier, III
Chief Executive Officer, President
and Director
/s/ Allen E. Smith (Principal Executive Officer)
- -----------------------------------------------------
Allen E. Smith
Chief Financial Officer and
Executive Vice President
(Principal Financial and
* Accounting Officer)
- -----------------------------------------------------
Fred G. Astor, Jr.
* Director
- -----------------------------------------------------
Donald W. Burton
* Director
- -----------------------------------------------------
O. Gene Gabbard
Director
- -----------------------------------------------------
Ann Milligan
</TABLE>
II-10
<PAGE> 33
* Director
- -----------------------------------------------------
Maurice P. O'Connor
* Director
- -----------------------------------------------------
William H. Scott, III
Director
- -----------------------------------------------------
William B. Timmerman
* Director
- -----------------------------------------------------
Donald W. Weber
*By /s/ Allen E. Smith
------------------------------------------------
Allen E. Smith
Attorney-in-Fact
II-11
<PAGE> 1
Exhibit 5(a)
[LETTERHEAD OF NELSON MULLINS RILEY & SCARBOROUGH, LLP]
September 20, 1999
Board of Directors
Powertel, Inc.
1233 O.G. Skinner Drive
West Point, Georgia 31833
Re: Registration Statement on Form S-2
Ladies and Gentlemen:
This firm has acted as counsel to Powertel, Inc., a Delaware
corporation (the "Company"), in connection with its registration, pursuant to a
registration statement on Form S-1, Registration No. 33-96218, as amended by
Post-effective Amendment No. 1 to Form S-1 on Form S-3 filed on August 7, 1996,
as further amended by Post-effective Amendment No. 2 to Form S-1 on Form S-2
filed on September 13, 1999 and as further amended by Post-Effective Amendment
No. 3 to Form S-1 on Form S-2 filed on September 20, 1999, with the Securities
and Exchange Commission (the "Registration Statement"), for issuance of up to
1,224,557 shares of the Company's common stock, par value $0.01 per share (the
"Shares"), by the Company to holders of the Company's outstanding warrants upon
exercise thereof. This opinion letter is furnished to you at your request to
enable you to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17
C.F.R. Section 229.601(b)(5), in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. A copy of the Registration Statement and amendments thereto.
2. An executed copy of the Warrant Agreement dated February 1,
1996 between the Company and Bankers Trust Company.
3. The Third Restated Certificate of Incorporation of the
Company, as amended, as certified by the Secretary of the
Company on the date hereof as then being complete, accurate
and in effect.
4. The Amended and Restated Bylaws of the Company, as certified
by the Secretary of the Company on the date hereof as then
being complete, accurate and in effect.
<PAGE> 2
5. Resolutions of the Board of Directors of the Company adopted
on August 23, 1995, November 17, 1995 and January 26, 1996, as
certified by the Secretary of the Company as then being
complete, accurate and then in effect.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
authenticity, accuracy and completeness of all documents submitted to us, and
the conformity with the original documents of all documents submitted to us as
certified, telecopied, photostatic, or reproduced copies. We have also assumed
the accuracy, completeness and authenticity of the foregoing certifications of
public officials, governmental agencies and departments, and corporate
officials. This opinion letter is given, and all statements herein are made, in
the context of the foregoing.
This opinion letter is based as to matters of law solely on the General
Corporation Law of the State of Delaware. We express no opinion herein as to any
other laws, statutes, regulations or ordinances.
Based upon, subject to and limited by the foregoing, we are of the
opinion that the Shares, when issued upon exercise of the warrants, will be
validly issued, fully paid and non-assessable under the General Corporation Law
of the State of Delaware.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared solely for your use in connection with the filing of the Registration
Statement and should not be quoted in whole or in part or otherwise be referred
to, or filed with or furnished to any governmental agency or other person or
entity, without the prior written consent of this firm.
We hereby consent to the filing of this opinion letter as Exhibit 5(a)
to the Registration Statement and to the reference to this firm under the
caption "Legal Matters" in the prospectus constituting a part of the
Registration Statement. In giving this consent, we do not hereby admit that we
are an "expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
NELSON MULLINS RILEY & SCARBOROUGH, L.L.P.
/s/ Nelson Mullins Riley & Scarborough, L.L.P.
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our reports dated February 5, 1999 included in
Powertel, Inc.'s Annual Report on Form 10-K for the year ending December 31,
1998 into this Registration Statement.
/s/ Arthur Andersen LLP
Atlanta, Georgia
September 20, 1999
