<PAGE> 1
As filed with the Securities and Exchange Commission on June 28, 2000
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NUMBER: 0-23102
-------
Powertel, Inc. 401(K) Profit Sharing Plan
Powertel, Inc.
1239 D.G.Skinner Drive, West Point, GA 31833
(Full Title and Address of Plan)
(Name of Issuer of Securities held Pursuant to Plan
and Address of its Principal Executive Office)
A-1
<PAGE> 2
POWERTEL, INC. 401(K) PROFIT SHARING PLAN
Financial Statements and Schedules
as of December 31, 1999 and 1998
Together With Auditors' Report
<PAGE> 3
POWERTEL, INC. 401(K) PROFIT SHARING PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1999 AND 1998
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits--December 31, 1999
and 1998
Statement of Changes in Net Assets Available for Plan Benefits for the
Year Ended December 31, 1999
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Schedule H, Line 4i--Schedule of Assets Held for
Investment Purposes--December 31, 1999
Schedule II: Schedule G, Part III--Schedule of Nonexempt
Transactions for the Year Ended December 31, 1999
<PAGE> 4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Powertel, Inc. 401(k) Profit Sharing Plan
Administrative Committee:
We have audited the accompanying statements of net assets available for plan
benefits of the POWERTEL, INC. 401(K) PROFIT SHARING PLAN as of December 31,
1999 and 1998 and the related statement of changes in net assets available for
plan benefits for the year ended December 31, 1999. These financial statements
and the schedules referred to below are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits as of December
31, 1999 and 1998 and the changes in its net assets available for plan benefits
for the year ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and nonexempt transactions are presented for purposes of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of Labor
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. The supplemental schedules have been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
/s/Arthur Andersen LLP
----------------------
Arthur Andersen LLP
Atlanta, Georgia
June 20, 2000
<PAGE> 5
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this Annual Report to be signed on its behalf by the undersigned
hereunto duly authorized on this 28th day of June 2000.
Powertel, Inc. 401(K) Profit Sharing Plan
By: Powertel, Inc.
By: /s/ Fred G. Aston, Jr.
-----------------------------
Fred G. Aston, Jr., Chief Financial Officer and Vice President
<PAGE> 6
POWERTEL, INC. 401(K) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- ----------
<S> <C> <C>
INVESTMENTS $24,137,003 $7,014,077
CASH 15,502 17,712
----------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $24,152,505 $7,031,789
=========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 7
POWERTEL, INC. 401(K) PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
ADDITIONS:
Contributions:
Participants $ 2,676,459
Employer 2,074,338
------------
Total contributions 4,750,797
------------
Investment income:
Net appreciation in fair value of investments 13,749,681
Interest and dividends 456,989
------------
Total investment income 14,206,670
------------
Other 153,128
------------
Total additions 19,110,595
------------
DEDUCTIONS:
Benefits (1,749,045)
Other (240,834)
------------
Total deductions (1,989,879)
------------
NET INCREASE 17,120,716
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 7,031,789
------------
End of year $ 24,152,505
============
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE> 8
POWERTEL, INC. 401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1999 AND 1998
1. PLAN DESCRIPTION
The following description of the Powertel, Inc. 401(k) Profit Sharing
Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the plan document for a more complete
description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan established by Powertel, Inc.
(the "Company" or the "Employer"), effective February 1, 1995, under
the provisions of Section 401(a) of the Internal Revenue Code (the
"IRC"), which includes a qualified cash or deferred arrangement as
described in Section 401(k) of the IRC. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA"), as amended.
The Charles Schwab Trust Company (the "Trustee") serves as Trustee for
the Plan. The Plan is administered by the Powertel, Inc. 401(k) Profit
Sharing Plan Administrative Committee, which is appointed by the board
of directors of the Company.
In May 1999, the Company sold certain cellular properties in Georgia
and Alabama ("InterCel"). As of the closing date of the sale, the
participants employed by InterCel were not permitted to make additional
contributions to the Plan, and furthermore, certain of these
participants were required to receive distributions from the Plan in
accordance with the plan document.
Effective January 1, 1999, the Company adopted Statement of Position
("SOP") 99-3, "Accounting for and Reporting of Certain Defined
Contribution Plan Investments and Other Disclosure Matters." SOP 99-3
establishes new disclosure requirements for defined contribution plans.
ELIGIBILITY
All full-time employees, as defined by the Plan, are eligible to
participate in the Plan. Employees who are not considered full-time are
eligible to participate in the Plan upon completion of one year of
service, as defined by the Plan. Participation commences on the first
day of the next plan quarter following the employee's initial service
date for eligible employees.
CONTRIBUTIONS
Participants may elect to contribute, in 1% increments, up to 10% of
their compensation, as defined by the Plan, subject to certain
limitations under the IRC. Participants may elect to change their
contribution rates once a quarter. Participants may also elect to roll
over or transfer contributions from another eligible tax-qualified
401(k)/profit-sharing plan or from an individual retirement account.
The Employer's contribution to the Plan equals (1) a matching
contribution of the employee's voluntary contribution plus (2) a
profit-sharing contribution determined at the discretion of the board
of directors. The matching contribution was equal to 50% of the first
2% of the employee's voluntary contributions for the year ended
December 31, 1999. The Employer also elected to make profit-sharing
contributions of
<PAGE> 9
-2-
2.5% of eligible compensation, as defined by the Plan, to all eligible
participants for the year ended December 31, 1999.
PARTICIPANT ACCOUNTS
Individual accounts are maintained for each of the Plan's participants
to reflect the participant's contributions and related employer
matching and profit-sharing contributions as well as the participant's
share of the Plan's income. Allocations of income and losses by fund
are based on the proportion that each participant's account balance in
the fund bears to the total of all participants' account balances in
the fund as of the date of the allocations. Allocations of income and
losses to participant accounts are made on a daily basis.
VESTING
Participants are fully vested in their contributions, employer matching
contributions, and earnings thereon. Profit-sharing contributions vest
over a five-year period, as follows:
<TABLE>
<CAPTION>
VESTED
PERCENTAGE
----------
<S> <C>
Years of service:
Less than one 0%
One 20
Two 40
Three 60
Four 80
Five or more 100
</TABLE>
The Plan also provides that participants become 100% vested when they
become totally disabled, in the event of death, or upon reaching the
age of 65.
FORFEITED ACCOUNTS
Any terminated, nonvested accounts are deemed to be forfeitures. The
Employer, at its discretion, may elect to utilize forfeited accounts to
reduce future employer contributions or to pay reasonable
administrative expenses of the Plan. Accordingly, the Employer utilized
$124,012 and $171,580 of such accounts to pay administrative costs of
the Plan and reduce employer contributions, respectively, during the
1999 plan year. At December 31, 1999, the Employer had $185,565 in
forfeited accounts available for the uses described above.
DISTRIBUTION OF BENEFITS
Upon discontinuation of service due to termination of employment,
retirement, death, or disability, a participant or his/her beneficiary
may elect to receive an amount equal to the value of the participant's
vested interest in his/her account. The form of payment is a lump-sum
cash distribution.
INVESTMENT OPTIONS
Participants may direct the investment of their account balances and
any related earnings thereon into the following investment options
offered by the Plan:
SCHWAB RETIREMENT MONEY FUND. The assets of this option are
invested in a money market fund that is held in the Trustee's
name. The primary objective of this fund is capital preservation
through investment in high-quality, United States
dollar-denominated money
<PAGE> 10
-3-
market securities, including United States government securities
and repurchase agreements.
STRONG GOVERNMENT SECURITIES FUND. The assets of this option are
primarily shares of a mutual fund which are held in the Trustee's
name. The mutual fund is managed by Strong Capital Management and
primarily invests in United States government securities with the
objective of achieving current income.
FOUNDERS BALANCED FUND. The assets of this option are primarily
shares of a mutual fund which are held in the Trustee's name. The
mutual fund is managed by Founders Asset Management LLC and
primarily seeks current income and capital appreciation through
investment in common stocks of established companies, convertible
securities, and preferred stocks.
JANUS FUND. The assets of this option are primarily shares of a
mutual fund that are held in the Trustee's name. The mutual fund
is managed by Janus Capital Corporation and primarily invests in
common stock of companies with larger market capitalization with
the objective of achieving long-term capital growth while
preserving capital.
JANUS OVERSEAS FUND. (New in 1999.) The assets of this option are
primarily shares of a mutual fund that are held in the Trustee's
name. The mutual fund is managed by Janus Capital Corporation and
normally invests at least 65% of its total assets in securities
of issuers from at least five different countries, excluding the
United States. The fund may also invest in foreign debt
securities and no more than 35% of its net assets in
high-yield/high-risk portfolios. The fund's objective is
long-term growth of capital.
VANGUARD INDEX 500 FUND. The assets of this option are primarily
shares of a mutual fund which are held in the Trustee's name. The
mutual fund is managed by Vanguard Core Management Group and
primarily seeks investment results that correspond with the price
and yield performance of the Standard & Poor's 500 Index.
AMERICAN CENTURY ULTRA INVESTORS FUND. The assets of this option
are primarily shares of a mutual fund which are held in the
Trustee's name. The mutual fund is managed by American Century
Investment Management, Inc. and primarily invests in common
stocks that are considered better-than-average prospects for
appreciation with the objective of seeking capital growth.
AMERICAN CENTURY EQUITY GROWTH FUND. (New in 1999.) The assets of
this option are primarily shares of a mutual fund which are held
in the Trustee's name. The mutual fund is managed by American
Century Investment Management, Inc. and primarily invests in
stocks that management believes will have higher overall return
potential than the Standard & Poor's 500. The fund typically
invests in larger-sized companies, although it may own stock in
smaller companies, with capital appreciation as its investment
objective.
POWERTEL, INC. COMMON STOCK FUND. The assets of this option are
primarily shares of the Company's common stock which are held in
the Trustee's name. The Company owns and operates various
wireless telecommunications properties in the southeastern United
States.
During the year, the Plan discontinued offering the Neuberger & Berman
Guardian Fund and the Warburg Pincus International Equity Fund.
Participant balances in these accounts were transferred into similar
funds offering the same investment objectives and risk/return
preferences.
The stated objectives of these funds are not necessarily indicators of
actual performance.
<PAGE> 11
-4-
LOANS TO PARTICIPANTS
A participant may borrow the lesser of $50,000 or 50% of his/her vested
account balance, with a minimum loan amount of $1,000. Loans are
payable through payroll deductions over periods ranging up to five
years. The interest rate is determined quarterly by the plan
administrator based on prevailing market conditions and is fixed over
the life of the note.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA, as amended.
In the event of plan termination, participants will become fully vested
in their account balances.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements are prepared on the accrual basis
of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan's management to use
estimates and assumptions that affect the accompanying financial
statements and disclosures. Actual results could differ from these
estimates.
INVESTMENT VALUATION
Marketable securities are stated at fair value. Securities traded on a
national securities exchange are valued at the last reported sales
price on the last business day of the year.
INCOME RECOGNITION
Investment transactions are recorded on the settlement date. Realized
gains and losses on the sale of investments and changes in the
unrealized (depreciation) appreciation of investments are recorded as
net (depreciation) appreciation in fair value of investments in the
accompanying statement of changes in net assets available for plan
benefits. Interest income is recorded as earned on the accrual basis,
and dividend income is recorded on the ex-dividend date. Interest and
dividend income are recorded as interest and dividend income in the
accompanying statement of changes in net assets available for plan
benefits.
ADMINISTRATIVE EXPENSES
All costs and expenses incurred in connection with the general
administration of the Plan and the related trust, to the extent not
paid by the Company, shall be paid pro rata from the net assets of the
Plan. During the year ended December 31, 1999, all general
administrative costs of the Plan and the related trust, with the
exception of variable asset charges imputed on certain plan assets,
were paid by the Employer. As discussed in Note 1, the Employer elected
to pay certain administrative expenses with the proceeds of forfeited
accounts.
<PAGE> 12
-5-
3. INVESTMENTS
The fair values of investments that represent 5% or more of total plan
assets as of December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
Schwab Retirement Money Fund $ 3,436,724 $ 917,549
Strong Government Securities Fund 701,845 343,235
Neuberger & Berman Guardian Fund N/A 492,677
Janus Fund 2,459,392 1,122,113
Vanguard Index 500 Fund 1,277,716 534,250
American Century: Twentieth Century Ultra Investors Fund 1,846,305 1,136,272
Powertel, Inc. common stock 12,741,301 2,137,599
</TABLE>
The following table summarizes the net appreciation from investments as
of December 31, 1999:
<TABLE>
<S> <C>
Common stock $12,411,338
Mutual funds 1,338,343
-----------
Net appreciation $13,749,681
===========
</TABLE>
4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated November 30, 1999 that the Plan, as amended and restated
on January 1, 1998, was designed in accordance with applicable sections
of the IRC as of that date. Therefore, the plan administrator believes
that the Plan is qualified and the related trust is tax-exempt as of
the financial statement dates.
5. NONEXEMPT TRANSACTIONS
For the year ended December 31, 1999, the Company failed on one
occasion to remit participant contributions to the Plan within the 15
business day limit required by the Department of Labor, representing a
nonexempt loan of funds to the Company from the Plan (identified in
Schedule II). The Company is currently in the process of calculating
the interest on the contributions owed to the Plan.
<PAGE> 13
SCHEDULE I
POWERTEL, INC. 401(K) PROFIT SHARING PLAN
SCHEDULE H, LINE 4I--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
IDENTITY OF ISSUER, BORROWER, CURRENT
LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
-------------------------------------------- ------------------------------------------------- -----------
<S> <C> <C>
* CHARLES SCHWAB INVESTMENT MANAGEMENT, INC. Schwab Retirement Money Fund; 3,436,725 shares $ 3,436,722
STRONG FUNDS Strong Government Securities Fund; 69,627 shares 701,845
FOUNDERS FUNDS Founders Balanced Fund; 6,762 shares 70,797
JANUS CAPITAL Janus Fund; 55,832 units 2,459,392
Janus Overseas Fund; 14,139 shares 525,959
THE VANGUARD GROUP Vanguard Index 500 Fund; 9,442 shares 1,277,719
AMERICAN CENTURY MUTUAL FUNDS, INC. Twentieth Century Ultra Investors Fund; 40,330 shares 1,846,305
American Century Equity Growth Fund; 33,240 shares 871,878
* POWERTEL, INC. Powertel, Inc. common stock; 126,937 shares 12,741,301
* PLAN PARTICIPANTS Participant loans with interest rates from 9.25% to
9.947% and maturities from March 1998 through
October 2003 205,085
-----------
$24,137,003
===========
</TABLE>
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
<PAGE> 14
SCHEDULE II
POWERTEL, INC. 401(K) PROFIT SHARING PLAN
SCHEDULE G, PART III--SCHEDULE OF NONEXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
CURRENT VALUE
IDENTITY OF ISSUER OR PARTY INVOLVED RELATIONSHIP TO PLAN DESCRIPTION OF TRANSACTION OF ASSET
------------------------------------ -------------------- -------------------------------------------- -------------
<S> <C> <C> <C>
* POWERTEL, INC. Plan sponsor Deemed loan to the Company dated April, 1999 $7,542
</TABLE>
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
