<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 31, 1996.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
METROCALL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 4812 54-1215634
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
------------------------
6677 RICHMOND HIGHWAY
ALEXANDRIA, VIRGINIA 22306
(703) 660-6677
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
WILLIAM L. COLLINS, III
CHIEF EXECUTIVE OFFICER
METROCALL, INC.
6677 RICHMOND HIGHWAY
ALEXANDRIA, VIRGINIA 22306
(703) 660-6677
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
With a copy to:
GEORGE P. STAMAS, ESQ.
WILMER, CUTLER & PICKERING
2445 M STREET, N.W.
WASHINGTON, D.C. 20037
(202) 663-6000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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, 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,
please check the following box. [ ]
------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share... 2,915,254 $4.188(1) $12,209,084 $3,700
======================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
registration fee, based upon the average of the high and low prices per
share of Metrocall, Inc. common stock, par value $.01 per share, on December
27, 1996, as reported on the Nasdaq Stock Market's National Market.
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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<PAGE> 2
PROSPECTUS
METROCALL, INC.
2,915,254 SHARES COMMON STOCK
------------------------
This Prospectus relates to the resale of up to an aggregate of 2,915,254
shares of common stock, $.01 par value per share (the "Common Stock") of
Metrocall, Inc. ("Metrocall" or the "Company"). The Shares are issuable upon
exercise of an aggregate of 159,600 warrants (the "Warrants") issued to
SunAmerica, Inc. ("SunAmerica"), John Hancock Mutual Life Insurance Company
("Hancock") and UBS Capital LLC ("UBS," and with SunAmerica and Hancock, the
"Selling Stockholders"). Each Warrant is exercisable for 18.266 shares of the
Company's Common Stock, at an exercise price of $7.40 per share of Common Stock.
The shares may be sold from time to time after exercise of the Warrants by the
Selling Stockholders in privately negotiated transactions, in brokers'
transactions, to market makers or in block placements, at market prices
prevailing at the time of sale or at prices otherwise negotiated. See "Selling
Stockholders" and "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
shares being sold by the Selling Stockholders, but will receive proceeds of
$7.40 per share upon exercise of Warrants by Selling Stockholders. The Company
has agreed to bear the expenses incurred in connection with the registration of
the shares offered by this Prospectus. The Selling Stockholders will pay or
assume brokerage commissions or similar charges incurred in the sale of the
shares offered by this Prospectus.
The Company's Common Stock is traded on the Nasdaq National Market ("NNM")
under the symbol "MCLL." On December 27, 1996, the last reported sale price of
the Common Stock was $4.125 per share, as reported by the NNM.
------------------------
THE SECURITIES TO BE ISSUED PURSUANT TO THIS PROSPECTUS HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
SEE "RISK FACTORS," BEGINNING ON PAGE 4, FOR INFORMATION THAT SHOULD BE
CONSIDERED REGARDING THE SECURITIES OFFERED HEREBY.
------------------------
The date of this Prospectus is December , 1996.
<PAGE> 3
AVAILABLE INFORMATION
Metrocall is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information may be inspected and copied at the offices of
the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and the Regional Offices of the Commission in Chicago, Illinois at
Northwestern Atrium Center, 500 W. Madison, Suite 1400, Chicago, Illinois 60661
and in New York, New York at 7 World Trade Center, Suite 1300, New York, New
York 10048. Such information may also be accessed on the internet at
http://www.sec.gov. Copies of such materials may be obtained from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.
Metrocall has filed with the Commission a registration statement (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), on Form S-3 with respect to the securities offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits thereto, certain parts of which are
omitted in accordance with the rules of the Commission. Statements made in this
Prospectus as to the contents of any contract, agreement, or other document
referred to are not necessarily complete; with respect to each such contract,
agreement, or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved, and each such statement shall be qualified in its entirety by such
reference. The Registration Statement and any amendments thereto, including
exhibits filed as part thereof, are available for inspection and copying at the
Commission's offices as described above.
------------------------
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Metrocall incorporates herein by reference the following documents filed by
it with the Commission (File No. 0-21924) pursuant to the Exchange Act: (i) its
Annual Report on Form 10-K for the year ended December 31, 1995; (ii) its
Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 1996, as amended; (iii) the financial statements of Parkway
Paging, Inc. and Satellite Paging and Message Network contained in its Current
Report on Form 8-K filed on September 13, 1996 and amended on October 1, 1996;
(iv) its Current Report on Form 8-K filed on November 7, 1996; (v) its Current
Report on Form 8-K filed on November 15, 1996; and (vi) its Current Report on
Form 8-K filed on November 21, 1996.
All documents filed by Metrocall pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the shares offered by this Prospectus shall
be deemed to be incorporated by reference in this Prospectus and to be part
hereof from the date of filing of such documents. All information appearing in
this Prospectus is qualified in its entirety by the information and financial
statements (including notes thereto) appearing in the documents incorporated by
reference herein.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be modified or superseded, for purposes
of this Prospectus, to the extent that a statement contained herein or in any
subsequently filed document that is deemed to be incorporated herein modifies or
supersedes any such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE THAT ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. METROCALL HEREBY UNDERTAKES TO PROVIDE WITHOUT
CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF THIS
PROSPECTUS HAS BEEN DELIVERED, ON WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY AND ALL OF THE DOCUMENTS REFERRED TO ABOVE THAT HAVE BEEN OR MAY BE
INCORPORATED INTO THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO SUCH
DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO
SUCH DOCUMENTS). DOCUMENTS ARE AVAILABLE UPON REQUEST FROM METROCALL, INC., 6677
RICHMOND HIGHWAY, ALEXANDRIA, VIRGINIA 22306, ATTENTION: SHIRLEY B. WHITE,
ASSISTANT SECRETARY, TELEPHONE NUMBER 703-660-6677.
2
<PAGE> 4
THE COMPANY
Metrocall had 1,405,933 pagers in service at September 30, 1996, providing
local, regional and nationwide paging and other wireless messaging services.
Metrocall currently operates regional and nationwide paging networks throughout
the United States and has historically concentrated its selling efforts in six
operating regions: (i) the Northeast (Massachusetts through Delaware); (ii) the
Mid-Atlantic (Maryland and the Washington, D.C. metropolitan area); (iii) the
Southeast (Virginia and Florida); (iv) the Southwest (primarily Texas) and (v)
the West (California, Nevada and Arizona). Through the Metrocall Nationwide
Wireless Network, Metrocall can provide paging services in all 50 states and
approximately 1,000 U.S. cities which include the top 100 Standard Metropolitan
Statistical Areas.
On November 15, 1996, A+ Network, Inc. merged into Metrocall adding
approximately 660,000 subscribers. In addition, Metrocall has an agreement to
acquire the assets of Page America Group, Inc. ("Page America"), which has an
estimated 220,000 subscribers. On a combined basis (pro forma for acquisition of
the Page America assets), Metrocall would service a total subscriber base
consisting of approximately 2.3 million units in service, and would constitute
the fifth largest paging company in the United States. Metrocall was organized
as a Delaware corporation in October 1982. Metrocall Common Stock is traded on
the Nasdaq National Market under the symbol "MCLL." Metrocall's principal
executive offices are located at 6677 Richmond Highway, Alexandria, Virginia
22306 and its telephone number is (703) 660-6677.
3
<PAGE> 5
RISK FACTORS
In evaluating an investment in the Common Stock, prospective purchasers
should carefully consider the following factors as well as the other matters
discussed in this Prospectus.
SUBSTANTIAL INDEBTEDNESS
As of November 30, 1996, Metrocall had incurred approximately $327 million
in indebtedness consisting of bank loans, senior subordinated notes, mortgage
indebtedness and capital leases, and expects to incur additional indebtedness as
a result of its pending acquisition of the assets of Page America (the "Page
America Acquisition"). See "Recent Developments -- Recent and Pending
Transactions". Metrocall has a credit facility (the "New Credit Facility") in
the principal amount of $350 million (of which $169.9 million was drawn as of
November 30, 1996 and is included in the incurred indebtedness described above)
subject to the limitations described below, and intends to use funds available
under this facility to fund the Page America Acquisition. The Company also has
issued and outstanding $39.9 million stated value of Series A Convertible
Preferred Stock (the "Series A Preferred Stock") the terms of which will require
the Company to pay dividends, in cash or additional shares of Series A Preferred
Stock, at the rate of 14% per year. Metrocall is required to redeem all
outstanding shares of Series A Preferred Stock (including dividend shares) in
November 2008 unless the holders have previously converted such shares to Common
Stock. The Company also expects to incur additional indebtedness (in the form of
draws on the New Credit Facility or otherwise) to meet working capital needs, in
connection with future acquisitions, or for other purposes. However, the ability
to incur additional indebtedness (including draws on the New Credit Facility) is
subject to certain limitations in the agreements relating to existing
indebtedness and the terms of the Series A Preferred Stock. As a result of these
limitations, as of December 27, 1996 Metrocall was only able to incur
approximately $20 million of additional indebtedness based on its pro forma
operating results through September 30, 1996. Moreover, the ability of the
Company to meet its debt service and other obligations (including compliance
with financial covenants) will be dependent upon the future performance of the
Company and its cash flows from operations, which will be subject to financial,
business and other factors, certain of which are beyond its control, such as
prevailing economic conditions. No assurance can be given that, in the event the
Company were to require additional financing, such additional financing would be
available on terms permitted by agreements relating to existing indebtedness or
otherwise satisfactory to the Company.
CHALLENGES OF BUSINESS INTEGRATION
Metrocall has implemented a strategy of acquiring other paging companies
and has recently completed a number of such acquisitions. The process of
integrating acquired businesses into the Company's operations may result in
unforeseen difficulties and may require a disproportionate amount of
management's attention and the Company's resources.
No assurance can be given that additional suitable acquisition candidates
can be identified, financed and purchased on acceptable terms, or that future
acquisitions, if completed, will be successful. Metrocall also intends to
continue to pursue internal growth through expansion of its paging operations.
The Company's continued internal growth will depend, in part, upon its ability
to attract and retain skilled employees, and the ability of the Company's
officers and key employees to manage successfully rapid growth and to implement
appropriate management information systems and controls. If the Company were
unable to attract and retain skilled employees, manage successfully rapid growth
and/or implement appropriate systems and controls, the Company's operations
could be adversely affected.
The paging industry has recently undergone significant consolidation as
various participants have sought to accomplish growth strategies similar to
those of Metrocall. Metrocall is not currently engaged in any negotiations with
respect to a business combination involving the acquisition of Metrocall and
intends to continue to pursue its own business strategy. Unsolicited proposals
to acquire the Company could cause a distraction of management of the Company
and impede the Company's ability to accomplish its strategic goals and
objectives and could cause significant volatility in the price of the Common
Stock.
4
<PAGE> 6
POSSIBLE IMPACT OF COMPETITION AND TECHNOLOGICAL CHANGE
The Company faces competition from other paging companies in all markets in
which it operates. The wireless communications industry is a highly competitive
industry, with price being the primary means of differentiation among providers
of numeric messaging services (which account for a substantial majority of the
Company's current revenues). Companies in the industry also compete on the basis
of coverage area, enhanced services, transmission quality, system reliability
and customer service. Certain of the Company's competitors, which include
regional and national paging companies, possess greater financial, technical,
marketing and other resources than the Company. In addition, other entities
offering wireless two-way communications technology, including cellular
telephone and specialized mobile radio services, also compete with the paging
services the Company provides. There can be no assurance that additional
competitors will not enter markets served by the Company or that the Company
will be able to compete successfully. In this regard, certain long distance
carriers have begun to market paging services jointly with other
telecommunications services.
The wireless communications industry is characterized by rapid
technological change. Future technological advances in the wireless
communications industry could create new services or products competitive with
the paging and wireless messaging services provided or to be developed by the
Company. Recent and proposed regulatory changes by the FCC are aimed at
encouraging such new services and products.
In particular, in 1994, the FCC began auctioning licenses for new personal
communications services ("PCS"). The FCC's rules also provide for the private
use of PCS spectrum on an unlicensed basis. PCS will involve a network of small,
low-powered transceivers placed throughout a neighborhood, business complex,
community or metropolitan area to provide customers with mobile voice and data
communications. There are two types of PCS, narrowband and broadband. Narrowband
PCS is expected to provide enhanced or advanced paging and messaging
capabilities, such as "acknowledgment paging" or "talk-back" paging. Broadband
PCS is expected to provide new types of communications devices that will include
multi-functional portable phones and imaging devices, which may also have paging
and messaging capabilities. PCS systems may compete directly and indirectly with
Metrocall.
Moreover, changes in technology could lower the cost of competitive
services and products to a level where the Company's services and products would
become less competitive or to where the Company would be required to reduce the
prices of its services and products. There can be no assurance that the Company
will be able to develop or introduce new services and products to remain
competitive or that the Company will not be adversely affected in the event of
such technological developments.
Technological change also may affect the value of the pagers owned by the
Company and leased to its subscribers. If the Company's subscribers requested
more technologically advanced pagers, the Company could incur additional
inventory costs and capital expenditures if it were required to replace pagers
leased to its subscribers within a short period of time.
HISTORY OF NET LOSSES
Metrocall sustained net losses of $2.2 million, $2.4 million and $20.1
million for the years ended December 31, 1993, 1994 and 1995, respectively, and
a loss of $33.0 million for the nine months ended September 30, 1996. No
assurance can be given that losses can be reversed in the future. In addition,
at September 30, 1996, Metrocall's accumulated deficit was $79.9 million and
Metrocall had a deficit in working capital of $12.7 million. Metrocall's
business requires substantial funds for capital expenditures and acquisitions
that result in significant depreciation and amortization charges. Additionally,
substantial levels of borrowing, which will result in significant interest
expense, are expected to be outstanding in the foreseeable future. Accordingly,
net losses are expected to continue to be incurred in the future. There can be
no assurance that the Company will be able to operate profitably at any time in
the future.
5
<PAGE> 7
SUBSCRIBER TURNOVER
The results of operations of paging service providers, such as Metrocall,
can be significantly affected by subscriber cancellations and by subscribers who
switch their service to other carriers. In order to realize net growth in
subscribers, disconnected subscribers must be replaced and new subscribers must
be added. The sales and marketing costs associated with attracting new
subscribers are substantial relative to the costs of providing service to
existing customers. Because Metrocall's business is characterized by high fixed
costs, disconnections directly and adversely affect operating cash flow. An
increase in its subscriber cancellation rate may adversely affect the Company's
results of operations.
POTENTIAL FOR CHANGE IN REGULATORY ENVIRONMENT
The Company's paging operations are subject to regulation by the FCC and,
to a lesser extent, by various state regulatory agencies. There can be no
assurance that those agencies will not adopt regulations or take actions that
would have a material adverse effect on the business of the Company. Changes in
regulation of the Company's paging business or the allocation of radio spectrum
for services that compete with the Company's business could adversely affect the
Company's results of operations. For example, the FCC is currently engaged in a
rule making proceeding whereby it proposes to issue paging licenses on a
wide-area basis by competitive bidding (i.e., auctions). Although Metrocall
believes that the proposed rule changes may simplify the Company's regulatory
compliance burdens, particularly regarding adding or relocating transmitter
sites, those rule changes may also increase the Company's costs of obtaining
paging licenses.
NO ANTICIPATED STOCKHOLDER DISTRIBUTIONS
It is not anticipated that the Company will pay cash dividends in the
foreseeable future. Certain covenants in the Company's bank credit agreement
limit the payment of dividends on preferred stock, and the bank credit agreement
and the terms of the Series A Preferred Stock prohibit the payment of dividends
on common stock.
RELIANCE ON KEY PERSONNEL
Metrocall is dependent upon the efforts and abilities of a number of its
current key management, sales, support and technical personnel. The success of
the Company will depend to a large extent upon its ability to retain and
continue to attract key employees. The loss of certain of these employees or the
Company's inability to retain or attract key employees in the future could have
an adverse effect upon the Company's operations.
POSSIBLE VOLATILITY OF STOCK PRICE; SHARES ELIGIBLE FOR FUTURE SALE
Since the Metrocall Common Stock became publicly traded in July 1993, the
closing price has ranged from a low of $3.81 per share to a high of $29 per
share. On December 27, 1996, the closing price of Metrocall Common Stock was
$4.125, which was less than the book value per share on September 30, 1996 of
approximately $8.24. The market price of the Metrocall Common Stock may be
volatile due to, among other things, technological innovations affecting the
paging industry, the Company's acquisition strategy and the shares being
registered pursuant to this and other registration statements. In addition,
Metrocall currently has effective registration statements with respect to
approximately 8.7 million shares of Metrocall Common Stock held by certain
stockholders of Metrocall in addition to the 2,915,254 shares registered by the
registration statement of which this Prospectus is a part. Metrocall also
expects to issue additional shares of Metrocall Common Stock in connection with
the Page America Acquisition, with the amount of such shares depending on
purchase price adjustments under the acquisition agreement and the market price
of Metrocall Common Stock at the time of the purchase. Based on third quarter
results of Page America and assuming a price of $5 per share for Metrocall
Common Stock, the number of additional shares would be approximately 1.3 million
shares. There can be no assurance that any action taken by holders of these
shares or other stockholders would not have an adverse effect on the market
price of the Metrocall Common Stock.
6
<PAGE> 8
CONCENTRATION OF OWNERSHIP
The Company's executive officers, directors and their affiliates together
beneficially own 36.9% of the outstanding shares of Metrocall Common Stock. As a
result, such persons, if they act together, may have the ability to
substantially influence the Company's direction and to determine the outcome of
corporate actions requiring stockholder approval. In addition, the Selling
Stockholders, as holders of Preferred Shares, together have the ability to
appoint two directors. This concentration of ownership may have the effect of
delaying or preventing a change of control of the Company.
ANTI-TAKEOVER AND OTHER PROVISIONS
The Company's Amended and Restated Certificate of Incorporation, as amended
(the "Certificate of Incorporation"), and Fourth Amended and Restated Bylaws
(the "Bylaws") include provisions that could operate to delay, defer or prevent
a change of control in the event of certain transactions such as a tender offer,
merger, or sale or transfer of substantially all of the Company's assets. These
provisions are expected to discourage certain types of coercive takeover
practices and inadequate takeover bids and to encourage persons seeking to
acquire control of the Company first to negotiate with the Board of Directors of
the Company. In addition, the New Credit Facility, an indenture relating to
notes issued by Metrocall and the terms of the Series A Preferred Stock each
include certain covenants limiting the ability of the Company to engage in
certain mergers and consolidations or transactions involving a change of control
of the Company.
The Certificate of Incorporation authorizes the Board of Directors, when
considering a tender offer, merger or acquisition proposal, to take into account
factors in addition to potential economic benefits to stockholders. In addition,
the Certificate of Incorporation will generally prohibit the Company from
purchasing any shares of the Company's capital stock from any person, entity or
group that beneficially owns five percent or more of the Company's capital stock
at a price exceeding the average closing price for the 20 business days prior to
the purchase date, unless a majority of the Company's disinterested stockholders
approve the transaction, or as may be necessary to protect the Company's
regulatory licenses.
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law, as amended ("Section 203"). Under Section 203, a
resident domestic corporation may not engage in a business combination with a
person who owns (or within three years prior, did own) 15% or more of the
corporation's outstanding voting stock (an "interested stockholder") for a
period of three years after the date such person became an interested
stockholder, unless (i) prior to such date the board of directors approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder, (ii) upon consummation of the
transaction which resulted in such person becoming an interested stockholder,
the interested stockholder owned at least 85% of the corporation's voting stock
outstanding at the time the transaction commenced, or (iii) on or subsequent to
such date the business combination is approved by the board of directors and
authorized by the affirmative vote of holders of at least two-thirds of the
outstanding voting stock which is not owned by the interested stockholder.
FORWARD-LOOKING STATEMENTS
This Prospectus (including documents incorporated by reference) contains
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Discussions containing such
forward-looking statements may be found in the material set forth in
Management's Discussion and Analysis of Financial Condition and Results of
Operations in the documents incorporated by reference as well as within the
Prospectus and documents incorporated by reference generally. In addition, when
used in this Prospectus and documents incorporated by reference, the words
"believes," "anticipates," "expects" and similar expressions are intended to
identify forward-looking statements. Such statements are subject to a number of
risks and uncertainties. Actual results in the future could differ materially
from those described in the forward-looking statements as a result of the risk
factors set forth above and the matters set forth in the Prospectus and
documents incorporated by reference generally. Metrocall undertakes no
obligation to publicly release the result of any revisions to these
forward-looking statements that may be made to reflect any future events or
circumstances.
7
<PAGE> 9
RECENT DEVELOPMENTS
RECENT AND PENDING TRANSACTIONS
Reflected below is a summary of transactions by Metrocall that were
recently completed or are currently subject to binding agreements. Consummation
of the pending transaction is subject to a number of conditions including, but
not limited to, receipt of all necessary regulatory approvals and there can be
no assurance that the pending acquisition will be completed or, if completed,
that it will be completed on the terms described below.
A+ Network, Inc.
On May 16, 1996, Metrocall entered into an Agreement and Plan of Merger
(the "Merger Agreement") with A+ Network. Pursuant to the terms of the Merger
Agreement, Metrocall purchased 2,140,526 shares of A+ Network Common Stock
pursuant to a tender offer dated May 22, 1996 to the holders of such shares and
Metrocall purchased 2,210,217 additional shares of A+ Network Common Stock for
certain shareholders of A+ Network pursuant to a Shareholders' Option and Sale
Agreement dated May 16, 1996 among Metrocall and certain shareholders of A+
Network named therein. The 4,350,743 shares were acquired for an aggregate
consideration of $91.8 million. On November 15, 1996, A+ Network was merged with
and into Metrocall (the "A+ Network Merger"). Each share of common stock, par
value $.01 per share, of A+ Network outstanding immediately prior to
consummation of the A+ Network Merger (other than shares of such common stock
held by Metrocall or any of its subsidiaries, which were canceled) was converted
into the right to receive: (i) 1.17877 shares of Metrocall Common Stock, (ii)
the same number of Variable Common Rights ("VCRs"), plus (iii) cash in respect
of fractional shares of Metrocall Common Stock and VCRs, if any. Each VCR
entitles the holder to receive the amount, not to exceed $5.00 per VCR (unless
increased as described below), by which the market value of the Metrocall Common
Stock determined as of November 15, 1997, the first anniversary of the effective
time (the "Effective Time") of the A+ Network Merger (the "Maturity Date"), is
less than the "Target Price" of $21.10 per share, adjusted downward, but not
upward, based on changes in an index composed of average closing bid prices of
three other companies in the paging industry. If Metrocall extends the Maturity
Date by one year (the "Extended Maturity Date"), the Target Price will increase
to $25.10, adjusted as previously described, and the maximum amount which the
holder may receive will be $7.00 per VCR. The market value of Metrocall Common
Stock for this purpose will be the median of the averages of the last bid price
for the Metrocall Common Stock on each trading day during each 20 trading-day
period within the 60 trading days prior to the Maturity Date. In addition, if
the last bid price of the Metrocall Common Stock exceeds $21.10 on each day
during any period of 50 consecutive calendar days after the Effective Time and
before the Maturity Date, or, if the Maturity Date is extended, $25.10 on each
day during any period of 50 consecutive calendar days after the Maturity Date
and before the Extended Maturity Date, then the right to receive payments under
the VCRs will terminate. Any amounts payable under the VCRs will be paid in
cash, Metrocall Common Stock or shares of preferred stock of Metrocall having
economic and other rights substantially equivalent to the rights of holders of
shares of Metrocall Common Stock, as determined by Metrocall. Approximately 8.6
million shares of Metrocall Common Stock were issued in the A+ Network Merger,
and additional shares may be issued if Metrocall elects to make any payments
required under the VCRs in the form of shares of Metrocall Common Stock.
Page America Group, Inc.
On April 22, 1996, Metrocall signed a definitive acquisition agreement (the
"Page America Agreement") with Page America Group, Inc. of Hackensack, New
Jersey ("Page America"). Under the terms of the Page America Agreement,
Metrocall would acquire substantially all of the assets of Page America in
exchange for $55 million in cash and up to 1.3 million shares of Metrocall
Common Stock, subject to adjustment. Based primarily on the operating results of
Page America since execution of the Page America Agreement, Metrocall is seeking
to renegotiate with Page America the terms of the acquisition, and has
determined that it may not proceed with the acquisition if acceptable terms for
the acquisition are not reached.
8
<PAGE> 10
ISSUANCE OF PREFERRED STOCK AND WARRANTS
On November 15, 1996, concurrent with the completion of the A+ Network
Merger, Metrocall issued 159,600 units for aggregate consideration of $39.9
million. Each unit consists of one share of Series A Preferred Stock and one
Warrant to purchase 18.266 shares of Metrocall Common Stock at an exercise price
of $7.40 per share. Of the 159,600 units issued, 50,000 units were issued to
each of SunAmerica and Hancock, and 59,600 units were issued to UBS. The terms
of the Series A Preferred Stock and the Warrants are set forth under
"Description of Capital Stock."
PURCHASE OF A+ NETWORK NOTES
Pursuant to a tender offer that was completed on November 15, 1996,
Metrocall purchased $122.5 million principal amount of A+ Network's 11 7/8%
Senior Subordinated Notes due 2005 (the "Notes). Pursuant to consents solicited
from holders of Notes prior to the A+ Network Merger, the terms of the Notes
were amended to remove substantially all of the covenants thereunder. The
consideration for purchase of the Notes and related consents was $124.2 million
and was paid from the proceeds of borrowing under Metrocall's $350 million
credit facility. Metrocall has assumed the obligations under the $2.5 million of
Notes that remain outstanding. The American Stock Exchange, on which the Notes
were traded, has suspended trading of the Notes and will delist and deregister
them effective January 7, 1997.
9
<PAGE> 11
MANAGEMENT
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------- ---- --------------------------------------------------
<S> <C> <C>
Richard M. Johnston.............. 61 Chairman of the Board (term expires in 1999)
William L. Collins, III.......... 46 President, Chief Executive Officer and Director
(term expires in 1997)
Harry L. Brock, Jr............... 61 Director (term expires in 1999)
Ronald V. Aprahamian............. 50 Director (term expires in 1998)(a)(b)
Suzanne S. Brock................. 58 Director (term expires in 1997)
Francis A. Martin, III........... 53 Director (term expires in 1997)(a)(b)
Elliott H. Singer................ 56 Director (term expires in 1998)
Ray D. Russenberger.............. 42 Director (term expires in 1999)
Ryal R. Poppa.................... 63 Director (term expires in 1998)
Steven D. Jacoby................. 39 Chief Operating Officer and Vice President
Vincent D. Kelly................. 37 Chief Financial Officer, Treasurer and Vice
President
</TABLE>
- ---------------
(a) Member of Audit Committee.
(b) Member of Compensation Committee.
In addition, the holders of Series A Preferred Stock have the right to
designate two directors of Metrocall (each with terms expiring in 1999). As of
the date of this Prospectus, these directors have not been identified. See
"Description of Capital Stock."
Set forth below is certain biographical information regarding the directors
and executive officers of the Company upon completion of the A+ Network Merger.
Ronald V. Aprahamian has been a member of the Board of Directors of
Metrocall since May 1995. Mr. Aprahamian serves as a Consulting Director for the
Riggs National Bank of Washington, D.C., and serves on the board of directors of
Sunrise Assisted Living, Inc. Mr. Aprahamian was Chairman and Chief Executive
Officer of The Compucare Company, a healthcare computer software services firm,
from January 1988 to October 1996. Mr. Aprahamian's son, Tom Aprahamian, is Vice
President of Financial Operations of Metrocall and receives an annual salary of
approximately $85,000.
Harry L. Brock, Jr. founded Metrocall and has served as Chairman of the
Board (through January 1996) and President (through August 1995) and a director
of Metrocall since 1982, and its predecessor companies since 1965. Mr. Brock was
a founding partner of Cellular One of Washington, one of the first operating
cellular systems. Mr. Brock is the husband of Suzanne S. Brock.
Richard M. Johnston has served as Chairman of the Board of Directors of
Metrocall since January 1996, and has been a member of the Board of Directors
since September 1994. Mr. Johnston has since 1970 been Vice President for
Investments of The Hillman Company, an investment firm which is a greater than
5% beneficial owner of Metrocall's Common Stock.
Suzanne S. Brock has been a director of Metrocall since 1982 and was
Secretary (through May 1996) and Treasurer (through August 1995) of Metrocall.
Ms. Brock was employed by Metrocall and its predecessor companies from 1965
through May 1996. Ms. Brock is the wife of Harry L. Brock, Jr.
William L. Collins III has been President and Chief Executive Officer of
Metrocall since January 1996 and has served as Director and Vice Chairman of the
Board since September 1994. From 1988 to 1994, Mr. Collins was the Chairman of
the Board, Chief Executive Officer, President and a director of FirstPAGE USA,
Inc. and its predecessor companies. Mr. Collins serves as Chairman of the Board
of Directors of USA Telecommunications, Inc. From 1977 to 1988, Mr. Collins was
President of C&C, Inc. ("C&C"), a national communications marketing and
management company.
10
<PAGE> 12
Francis A. Martin III has been a member of the Board of Directors of
Metrocall since November 1994. Mr. Martin is a principal of U.S. Media Group and
Chairman of the Board, President and Chief Executive officer of U.S. Media
Holdings, Inc., having previously served as President and Chief Executive
Officer of Chronicle Broadcasting Company, a publicly-held television
broadcasting company.
Ray D. Russenberger has been a director of Metrocall since November 1996.
Mr. Russenberger was Vice Chairman of A+ Network from October 24, 1995 through
the A+ Network Merger in November 1996, and previously served as Chairman of the
Board and Chief Executive Officer of Network Paging Corporation ("Network")
(which was merged with A+ Communications, Inc. in 1995 forming A+ Network, Inc.)
since December 1988. From 1985 to 1990, he founded and was President of Network,
a paging company he sold to Mobile Communications Corporation of America, a
wholly-owned subsidiary of BellSouth Corporation in 1990.
Elliott H. Singer has been a director of Metrocall since November 1996. Mr.
Singer was Chairman of the Board of A+ Network from A+ Network's formation in
1985 through the A+ Network Merger in November 1996 and also served as Chief
Executive Officer of A+ Network from 1985 to January 15, 1996. Mr. Singer was
the owner and chief executive officer of A+ Network's predecessor entities,
through which he had been engaged in the telemessaging service business since
1974 and in the paging business since 1983.
Ryal R. Poppa is a private investor and has been a member of the Board of
Directors of Metrocall since November 1996. Mr. Poppa served as Chairman of the
Board, President and Chief Executive Officer of Storage Technology Corporation,
an international company that manufactures, markets and services information
storage and retrieval services for high performance computers, from January 1985
through June 1996. Mr. Poppa serves on the board of directors of Semitool, Inc.
and Carrier Access, Inc.
Steven D. Jacoby has been Chief Operating Officer and Vice President of
Metrocall since September 1994. Mr. Jacoby joined Metrocall from FirstPAGE USA,
Inc. where he served as Chief Operating Officer, Vice President and Secretary
since 1988. Mr. Jacoby was a director of Metrocall from September 1994 through
November 1996.
Vincent D. Kelly has been the Chief Financial Officer and Vice President of
Metrocall since January 1989. Mr. Kelly has also served as Treasurer since
August 1995. Mr. Kelly also served dual roles as Chief Operating Officer and
Chief Financial Officer from February 1993 through August 31, 1994, when
Metrocall acquired FirstPAGE USA, Inc. Mr. Kelly was a director of Metrocall
from 1990 through November 1996. Prior to joining Metrocall, Mr. Kelly was an
accountant with Bruner, Kane & McCarthy, Ltd., certified public accountants.
Certain stockholders of Metrocall holding approximately 40.3% of the issued
and outstanding shares of Metrocall Common Stock were (prior to the A+ Network
Merger) parties to a voting agreement (the "Voting Agreement") pursuant to which
the stockholders agreed to vote for up to seven persons designated by various of
the stockholders to serve as directors of Metrocall. The terms of the Voting
Agreement expired effective as of the Effective Time of the A+ Network Merger,
except that certain parties have agreed to vote in favor of the reelection of
Ms. Brock when her term expires at the next Metrocall annual meeting. Messrs.
Singer and Russenberger have separately agreed to vote shares of Metrocall
Common Stock they hold at the next Metrocall annual meeting in favor of the
reelection of Ms. Brock.
Mr. Collins, Mr. Jacoby, and Mr. Kelly entered into new employment
contracts approved by the Compensation Committee and dated May 15, 1996. The new
contracts did not change the salary or benefits of any of those officers, except
that Metrocall will now be responsible for certain life insurance premiums
incurred by Mr. Collins. The term of employment for each of the officers was
extended to December 31, 1999 from December 31, 1996 (for Mr. Collins), August
31, 1998 (for Mr. Jacoby), and June 1, 1999 (for Mr. Kelly). In addition, Mr.
Collins' contract now includes a provision (similar to that in Messrs. Jacoby's
and Kelly's contracts) for automatic one-year extensions on anniversaries of May
15.
Each of Messrs. Collins', Jacoby's and Kelly's contracts provides that, if
the executive's employment is terminated without cause, if the executive
terminates the contract for good reason, or if the executive's employment is
terminated by reason of death or disability, Metrocall will pay the executive or
his estate the
11
<PAGE> 13
full base salary and benefits (in connection with termination without cause or
resignation for good reason) that would otherwise have been paid to the
executive during the remaining term of the agreement. Terminations without cause
or resignations for good reason would also require Metrocall to pay the
executive, at his election, the difference between the fair market value of
stock subject to options (including those otherwise unexercisable) and the price
he would have had to pay to exercise the options. If the executive voluntarily
terminates employment (other than for good reason), Metrocall will pay the
executive one year's base salary and benefits under the contract. The reasons
for resignation for good reason under the revised contracts include the
termination of any of the others for reasons other than cause, death, or
disability.
Messrs. Collins, Jacoby, and Kelly entered into separate change of control
agreements approved by the Compensation Committee as of May 15, 1996 to run
through December 31, 1999 (with automatic extensions). Changes of control are
defined as: (i) any action required to be reported pursuant to Item 6(e) of
Schedule 14A as a "change of control" (generally a 50% change in share ownership
but other changes may also qualify), (ii) any person's acquiring more than 25%
of the voting power of Metrocall voting stock, unless with the prior approval of
the Board, (iii) changes in Board membership such that during any two
consecutive years, Board members at the beginning constitute less than a
majority of the Board at the end (including as Board members at the beginning of
the period any directors added during the period with approval of two-thirds of
the Board), (iv) a merger or reorganization in which Metrocall does not survive
or in which the outstanding shares of Metrocall are converted into other shares
or securities (except through a reincorporation or setting up a holding
company); (v) a more than 50% turnover of voting power in a merger,
reorganization, or other similar transaction approved by stockholders, unless
75% of the Board carries over to the new entity; or (vi) any other event the
Board determines constitutes a change of control. A change of control is also
deemed to occur if the executive is removed at the request of a third party who
has taken steps to effect a change of control or the termination was otherwise
caused by a change of control. Under the change of control agreements,
executives would be entitled to payment of three times the sum of their salary
and most recent bonus within 30 days after termination of employment after a
change of control (other than termination for death, disability, or cause),
together with a payment of the option spread (as described above under
terminations of employment), paid health coverage for up to 18 months, and
certain other benefits. Payments would be grossed up, as necessary, to provide
that the executive receives his payments net of any excise taxes and any taxes
on the excise payment (but the executive would remain responsible for any income
taxes on the payment).
Messrs. Collins, Jacoby, Kelly, Brock and Johnston hold options to acquire
100,000, 100,000, 206,588, 122,510 and 52,000 shares of Metrocall Common Stock,
respectively. On September 18, 1996, the Compensation Committee of the Metrocall
Board of Directors changed the exercise price of all non-qualified options
outstanding to all current employees of Metrocall as of that date to equal
$7.9375 per share, the closing price of Metrocall Common Stock on that date. As
a result, the exercise price on all of the foregoing options (other than 2,000
options held by Mr. Johnston) was reduced to $7.9375 per share. Prior to this
action: Mr. Collins' options were exercisable until January 16, 2006 for a price
of $19.125; Mr. Jacoby's options were exercisable until July 26, 2005 for a
price of $20.25 (50,000 shares), until January 16, 2006 for a price of $19.125
(25,000 shares) and until February 7, 2006 for a price of $20.25 (25,000
shares); Mr. Kelly's options were exercisable until November 8, 2003 for a price
of $19.50 (72,000 shares), until May 23, 2004 for a price of $13.00 (34,588
shares), until July 26, 2005 for a price of $20.25 (50,000 shares), until
January 16, 2006 for a price of $19.125 (25,000 shares) and until February 7,
2006 for a price of $20.25 (25,000 shares); Mr. Brock's options were exercisable
until November 8, 2003 for a price of $19.50 (76,000 shares), until May 23, 2004
for a price of $13.00 (36,510 shares) and until July 26, 2005 for a price of
$20.25 (10,000 shares); and Mr. Johnston's options were exercisable until
January 16, 2004 for a price of $19.125.
12
<PAGE> 14
PRO FORMA CONDENSED COMBINED FINANCIAL DATA
(UNAUDITED)
The following unaudited pro forma condensed combined balance sheet under
the heading "Pro Forma Metrocall" gives effect to the acquisition of the equity
interest in A+ Network (to the extent not held at September 30, 1996) for
approximately 8,556,000 shares of Metrocall Common Stock at $5.25 per share, an
equal number of VCRs which have no current value, direct acquisition costs of
approximately $8.2 million and the assumption of $125 million of A+ Network debt
as if the acquisition had occurred on September 30, 1996. The pro forma
condensed combined balance sheet under the heading "Pro Forma Combined Company"
gives effect to (a) the issuance of $39.9 million liquidation value of Series A
Convertible Redeemable Preferred Stock consummated prior to the acquisition of
A+ Network and (b) the refinancing of A+ Network's $125 million of long-term
debt for approximately $127.47 million. The unaudited pro forma condensed
combined balance sheet under the heading "Pro Forma Combined Company and Page
America" also gives effect to the acquisition of substantially all the assets of
Page America for cash of approximately $55.0 million, approximately 792,000
shares of Metrocall Common Stock and expected direct acquisition costs of
approximately $1.2 million as if the acquisition had occurred on September 30,
1996. The Page America acquisition is subject to adjustment based upon its
financial performance prior to closing and the Company is in the process of
renegotiating the terms on which it would acquire the assets of Page America.
See "Recent Developments -- Recent and Pending Transactions." In the
accompanying pro forma statements, these adjustments are estimated based upon
financial performance for the nine month period ended September 30, 1996.
Accordingly, the actual cash and stock consideration to be issued by Metrocall
could differ.
The unaudited pro forma condensed combined statements of operations for the
nine month period ended September 30, 1996 and for the year ended December 31,
1995 give effect to (a) under the heading "Pro Forma Metrocall," the
acquisitions of Parkway Paging, Inc. ("Parkway") and Satellite Paging and
Message Network ("Satellite") and the A+ Network Merger and the merger of
Network Paging Corporation into A+ Communications, Inc. on October 24, 1995,
together with the issuance of $39.9 million of Series A Convertible Redeemable
Preferred Stock and the refinancing of A+ Network's long-term debt as described
above and (b) under the heading "Pro Forma Combined Company and Page America,"
the pending acquisition of Page America as if it had occurred on January 1,
1995.
Each of the recent and pending acquisitions will be accounted for by the
purchase method of accounting. The purchase prices have been allocated on a
preliminary basis to the assets to be acquired based upon the estimated value of
such assets. The final allocation of intangible assets will be based upon
appraised values.
This information should be read in conjunction with the notes included
herein and the financial statements of Parkway and Satellite, incorporated
herein by reference. The unaudited pro forma condensed combined financial data
do not purport to represent what Metrocall's results of operations or financial
position actually would have been had such transactions and events occurred on
the dates specified, or to project Metrocall's results of operations or
financial position for any future period or date. The pro forma adjustments are
based upon available information and certain adjustments that management of
Metrocall believes are reasonable. In the opinion of management of Metrocall,
all adjustments have been made that are necessary to present the unaudited pro
forma condensed combined data.
13
<PAGE> 15
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(in Thousands)
<TABLE>
<CAPTION>
PREFERRED
HISTORICAL STOCK
--------------------- PRO PRO ISSUANCE PRO FORMA
A+ FORMA FORMA AND DEBT COMBINED
METROCALL NETWORK ADJUSTMENTS METROCALL REFINANCING(F) COMPANY
--------- -------- ----------- --------- -------------- ---------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Current assets:
Cash, cash equivalents and short term
investments.......................... $ 10,243 $ 19,877 $ -- $ 30,120 $ -- $ 30,120
Accounts receivable, net............... 11,090 12,008 -- 23,098 -- 23,098
Inventory.............................. -- 10,961 (10,961)(A) -- -- --
Prepaid expenses and other current
assets............................... 1,985 3,134 -- 5,119 -- 5,119
-------- -------- ---------- -------- ----------- --------
Total current assets................. 23,318 45,980 (10,961) 58,337 -- 58,337
Furniture and equipment, net............. 105,449 63,212 10,961(A) 179,622 -- 179,622
Intangibles, net......................... 257,533 100,939 91,131(B) 449,603 -- 449,603
Equity investments....................... 24,823 -- (24,548)(B) 275 -- 275
Other assets............................. 1,380 -- -- 1,380 -- 1,380
-------- -------- ---------- -------- ----------- --------
Total assets..................... $412,503 $210,131 $ 66,583 $689,217 $ -- $689,217
======== ======== ========== ======== =========== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C> <C> <C>
Current liabilities:
Current maturities of long-term
obligations.......................... $ 276 $ -- $ -- $ 276 $ -- $ 276
Accounts payable and accrued
expenses............................. 19,234 15,924 8,184(C) 43,342 (13,400) 29,942
Obligation under tender offer.......... -- -- -- -- -- --
Deferred revenues and subscriber
deposits............................. 3,008 7,163 -- 10,171 -- 10,171
Other current liabilities.............. 13,482 -- -- 13,482 -- 13,482
-------- -------- ---------- -------- ----------- --------
Total current liabilities............ 36,000 23,087 8,184 67,271 (13,400) 53,871
Capital lease obligation................. 3,747 -- -- 3,747 -- 3,747
Long-term obligations.................... 217,900 124,849 -- 342,749 (22,530) 320,219
Deferred income taxes.................... 21,993 818 72,643(D) 95,454 -- 95,454
Minority interest........................ 500 -- -- 500 -- 500
-------- -------- ---------- -------- ----------- --------
Total liabilities.................... 280,140 148,754 80,827 509,721 (35,930) 473,791
Redeemable preferred stock............... -- -- -- -- 38,400 38,400
Total stockholders' equity............... 132,363 61,377 (14,244)(E) 179,496 (2,470) 177,026
-------- -------- ---------- -------- ----------- --------
Total liabilities, redeemable preferred
stock and stockholders' equity......... $412,503 $210,131 $ 66,583 $689,217 $ -- $689,217
======== ======== ========== ======== =========== ========
<CAPTION>
COMBINED
COMPANY
HISTORICAL PRO AND
PAGE FORMA PAGE
AMERICA ADJUSTMENTS AMERICA
---------- ----------- --------
ASSETS
<S> <C> <C> <C>
Current assets:
Cash, cash equivalents and short term
investments.......................... $ -- $ (20,000)(G) $10,120
Accounts receivable, net............... 1,008 -- 24,106
Inventory.............................. -- -- --
Prepaid expenses and other current
assets............................... 670 -- 5,789
--------- ---------- -------
Total current assets................. 1,678 (20,000) 40,015
Furniture and equipment, net............. 6,424 -- 186,046
Intangibles, net......................... 32,800 24,441(B) 506,844
Equity investments....................... -- -- 275
Other assets............................. 488 -- 1,868
--------- ---------- -------
Total assets..................... $ 41,390 $ 4,441 $735,048
========= ========== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C>
Current liabilities:
Current maturities of long-term
obligations.......................... $ -- $ -- $ 276
Accounts payable and accrued
expenses............................. 3,853 1,179(C) 34,974
Obligation under tender offer.......... -- -- --
Deferred revenues and subscriber
deposits............................. 1,840 -- 12,011
Other current liabilities.............. -- -- 13,482
--------- ---------- -------
Total current liabilities............ 5,693 1,179 60,743
Capital lease obligation................. -- -- 3,747
Long-term obligations.................... -- 35,000(G) 355,219
Deferred income taxes.................... -- -- 95,454
Minority interest........................ -- -- 500
--------- ---------- -------
Total liabilities.................... 5,693 36,179 515,663
Redeemable preferred stock............... -- -- 38,400
Total stockholders' equity............... 35,697 (31,738)(E) 180,985
--------- ---------- -------
Total liabilities, redeemable preferred
stock and stockholders' equity......... $ 41,390 $ 4,441 $735,048
========= ========== ========
</TABLE>
See accompanying notes to this unaudited statement.
14
<PAGE> 16
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
HISTORICAL
--------------------------------- PRO FORMA A+ PRO FORMA PRO FORMA
METROCALL PARKWAY SATELLITE NETWORK(H) ADJUSTMENTS METROCALL
--------- ------- --------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Service, rent & maintenance revenue...... $ 92,160 $7,403 $10,723 $ 77,698 $ -- $187,984
Product sales............................ 18,699 2,344 1,369 8,345 -- 30,757
-------- ------ -------- ----------- ---------- --------
Total revenues................... 110,859 9,747 12,092 86,043 -- 218,741
Net book value of products sold.......... (15,527) (2,262) (1,557) (11,944) -- (31,290)
-------- ------ -------- ----------- ---------- --------
95,332 7,485 10,535 74,099 -- 187,451
Service, rent & maintenance expense...... 27,258 2,330 3,918 16,758 -- 50,264
Selling, marketing, general and
administrative......................... 40,303 3,655 4,281 45,872 (930)(I) 93,181
Depreciation & amortization.............. 31,504 1,153 1,064 25,052 17,563 (J) 76,336
Other.................................... 2,050 -- 404 -- -- 2,454
-------- ------ -------- ----------- ---------- --------
Total operating expenses......... 101,115 7,138 9,667 87,682 16,633 222,235
-------- ------ -------- ----------- ---------- --------
(Loss) income from operations............ (5,783) 347 868 (13,583) (16,633) (34,784)
Interest expense, net.................... (10,522) (477) (740) (14,589) (3,971)(K) (30,299)
-------- ------ -------- ----------- ---------- --------
Net (loss) income before taxes... (16,305) (130) 128 (28,172) (20,604) (65,083)
Benefit (provision) for taxes............ 595 43 -- -- 3,742 (L) 4,380
-------- ------ -------- ----------- ---------- --------
Net (loss) income before
extraordinary item............. (15,710) (87) 128 (28,172) (16,862) (60,703)
Extraordinary item....................... (4,392) -- 5,928 (607) -- 929
-------- ------ -------- ----------- ---------- --------
Net (loss) income................ (20,102) (87) 6,056 (28,779) (16,862) (59,774)
Preferred dividends...................... -- -- -- -- (5,586)(M) (5,586)
-------- ------ -------- ----------- ---------- --------
Loss attributable to common
stockholders........................... $(20,102) $ (87) $ 6,056 $ (28,779) $ (22,448) $(65,360)
======== ====== ======= =========== ========== ========
Net loss from continuing operations
attributable to common stockholders.... $ (1.35) $ (3.04)
Extraordinary item, net of income tax
benefit................................ (0.37) 0.04
-------- --------
Net loss per share attributable to common
stockholders........................... $ (1.72) $ (3.00)
======== ========
Shares used in computing net loss per
share.................................. 11,668 21,772
======== ========
<CAPTION>
COMBINED
HISTORICAL COMPANY
PAGE PRO FORMA AND PAGE
AMERICA ADJUSTMENTS AMERICA
---------- ----------- --------
<S> <C> <C> <C>
Service, rent & maintenance revenue...... $ 22,387 -- $210,371
Product sales............................ 2,330 -- 33,087
--------- --------- --------
Total revenues................... 24,717 -- 243,458
Net book value of products sold.......... (1,481) -- (32,771)
--------- --------- --------
23,236 -- 210,687
Service, rent & maintenance expense...... 5,538 -- 55,802
Selling, marketing, general and
administrative......................... 12,359 -- 105,540
Depreciation & amortization.............. 6,747 $ 3,244 (J) 86,327
Other.................................... -- -- 2,454
--------- --------- --------
Total operating expenses......... 24,644 3,244 250,123
--------- --------- --------
(Loss) income from operations............ (1,408) (3,244) (39,436)
Interest expense, net.................... (137) (3,063)(K) (33,499)
--------- --------- --------
Net (loss) income before taxes... (1,545) (6,307) (72,935)
Benefit (provision) for taxes............ -- -- 4,380
--------- --------- --------
Net (loss) income before
extraordinary item............. (1,545) (6,307) (68,555)
Extraordinary item....................... -- -- 929
--------- --------- --------
Net (loss) income................ (1,545) (6,307) (67,626)
Preferred dividends...................... -- -- (5,586)
--------- --------- --------
Loss attributable to common
stockholders........................... $ (1,545) $(6,307) $(73,212)
========= ========= ========
Net loss from continuing operations
attributable to common stockholders.... $ (3.28)
Extraordinary item, net of income tax
benefit................................ 0.04
--------
Net loss per share attributable to common
stockholders........................... $ (3.24)
========
Shares used in computing net loss per
share.................................. 22,564
========
</TABLE>
See accompanying notes to this unaudited statement.
15
<PAGE> 17
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
PRO
HISTORICAL FORMA PRO
--------------------------------------- A+ FORMA PRO FORMA
METROCALL PARKWAY(N) SATELLITE(N) NETWORK(H) ADJUSTMENTS METROCALL
--------- ---------- ------------ ------------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Service, rent & maintenance
revenue......................... $ 79,453 $ 5,302 $ 6,564 $ 67,313 $ -- $158,632
Product sales..................... 19,155 860 801 4,554 -- 25,370
-------- --------- ---------- ---------- ---------- --------
Total revenues............ 98,608 6,162 7,365 71,867 -- 184,002
Net book value of products sold... (15,546) (934) (805) (6,451) -- (23,736)
-------- --------- ---------- ---------- ---------- --------
83,062 5,228 6,560 65,416 -- 160,266
Service, rent & maintenance
expense......................... 26,297 1,417 2,418 14,338 -- 44,470
Selling, marketing, general and
administrative.................. 36,361 2,305 2,449 36,531 (560)(I) 77,086
Depreciation & amortization....... 40,385 586 447 20,628 12,163 (J) 74,209
Other............................. -- -- 12 396 -- 408
-------- --------- ---------- ---------- ---------- --------
Total operating
expenses................ 103,043 4,308 5,326 71,893 11,603 196,173
-------- --------- ---------- ---------- ---------- --------
(Loss) income from operations..... (19,981) 920 1,234 (6,477) (11,603) (35,907)
Interest expenses, net............ (10,836) (274) (713) (10,093) 267 (K) (21,649)
Minority interest in loss of
investments..................... (2,422) -- -- -- 2,211 (O) (211)
-------- --------- ---------- ---------- ---------- --------
Net (loss) income before
taxes....................... (33,239) 646 521 (16,570) (9,125) (57,767)
Benefit (provision) for taxes..... 279 (229) -- -- 4,821 (L) 4,871
-------- --------- ---------- ---------- ---------- --------
Net (loss) income............. (32,960) 417 521 (16,570) (4,304) (52,896)
Preferred Dividends............... -- -- -- -- (4,190)(M) (4,190)
-------- --------- ---------- ---------- ---------- --------
Net loss attributable to common
stockholders.................... $(32,960) $ 417 $ 521 $(16,570) $ (8,494) $(57,086)
======== ========= ========== ========== ========== ========
Net loss per share attributable to
common stockholders............. $ (2.23) $ (2.44)
======== ========
Shares used in computing net loss
per share....................... 14,806 23,363
======== ========
<CAPTION>
COMBINED
COMPANY
HISTORICAL PRO AND
PAGE FORMA PAGE
AMERICA ADJUSTMENTS AMERICA
---------- ----------- --------
<S> <C> <C> <C>
Service, rent & maintenance
revenue......................... $ 15,644 $ -- $174,276
Product sales..................... 1,498 -- 26,868
--------- --------- --------
Total revenues............ 17,142 -- 201,144
Net book value of products sold... (1,062) -- (24,798)
--------- --------- --------
16,080 -- 176,346
Service, rent & maintenance
expense......................... 4,064 -- 48,534
Selling, marketing, general and
administrative.................. 8,008 -- 85,094
Depreciation & amortization....... 3,988 3,840 (J) 82,037
Other............................. -- 408
--------- --------- --------
Total operating
expenses................ 16,060 3,840 216,073
--------- --------- --------
(Loss) income from operations..... 20 (3,840) (39,727)
Interest expenses, net............ 121 (2,297)(K) (23,825)
Minority interest in loss of
investments..................... -- -- (211)
--------- --------- --------
Net (loss) income before
taxes....................... 141 (6,137) (63,763)
Benefit (provision) for taxes..... -- -- 4,871
--------- --------- --------
Net (loss) income............. 141 (6,137) (58,892)
Preferred Dividends............... -- -- (4,190)
--------- --------- --------
Net loss attributable to common
stockholders.................... $ 141 $(6,137) $(63,082)
========= ========= ========
Net loss per share attributable to
common stockholders............. $ (2.61)
========
Shares used in computing net loss
per share....................... 24,154
========
</TABLE>
See accompanying notes to this unaudited statement.
16
<PAGE> 18
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
The pro forma condensed combined financial statements assume a per share
price of $5.00 for the Company Common Stock to be issued in connection with the
Page America acquisition ("Acquisition"). The purchase price ultimately will be
based upon the trading price of Company Common Stock on the closing date of the
acquisition. The purchase price and allocations of all acquisitions are subject
to change, which may be material, based upon a variety of factors including
actual share price at closing of acquisition, financial performance prior to
closing of the company to be acquired, and asset appraisals.
(A) Reflects the reclassification of pagers held for resale or future
rental, from inventory to furniture and equipment to conform accounting
practices to those of Metrocall.
(B) Reflects fair values assigned to intangible assets acquired which
consist of the following (in thousands):
<TABLE>
<CAPTION>
PAGE
A+ AMERICA
--------- --------
<S> <C> <C>
FCC Licenses................................................... $ 122,191 $ 30,338
Subscriber Lists............................................... 54,511 26,093
Non-Compete Agreements......................................... 1,950 --
Goodwill....................................................... 73,461 --
Less: Historical Investment by Metrocall....................... (60,043) --
Less: Historical Intangibles................................... (100,939) (32,800)
--------- --------
$ 91,131 $ 24,441
========= ========
</TABLE>
On June 30, 1996, the Company purchased approximately 40% of the
outstanding common stock of A+ Network for approximately $91.8 million plus
direct acquisition costs which were reflected on the Company's balance sheet as
equity investment in A+ Network of $26.8 million and goodwill of $65.0 million.
During the third quarter the Company recognized a loss of $2.2 million related
to its investment in A+ Network under the equity method of accounting. This loss
reduced the equity investment to approximately $24.5 million as of September 30,
1996.
(C) Reflects estimated accruals for direct acquisition costs together with
estimated accruals for costs of closing acquired duplicate facilities, estimated
severance for planned terminations of acquired employees and share registration
rights.
(D) The merger with A+ Network is structured as a tax free reorganization.
The deferred income tax liability represents the tax effect on the difference
between the amounts allocated to assets acquired and their tax basis.
(E) Reflects the shares of Metrocall Common Stock and VCRs expected to be
issued for these acquisitions, less historical equity amounts. The accompanying
statements also include the expected issuance of approximately 450,000 shares of
Metrocall Common Stock for pending acquisitions of A+ Network. Historical
financial statements for these A+ Network acquisitions have not been included in
the accompanying pro forma statements as they are not significant. The
accompanying statements do not reflect the exchange of approximately 468,000
options as part of the A+ Network acquisition.
(F) Reflects application of proceeds from $39.9 million private placement
of convertible redeemable preferred stock by the Company prior to closing the A+
Network merger less related costs of $1.5 million. Of the $38.4 million in net
proceeds related to this placement, $25.0 million is used to reduce long-term
obligations while $13.4 million is used to reduce accounts payable and accrued
expenses. Also reflects the purchase of $125.0 million of notes (the "Notes")
issued by A+ Network for $127.47 million ($126.22 million offer consideration
and payment for consents to modify indenture and $1.25 million of estimated
accrued interest, fees and expenses related to refinancing the A+ Notes) with
debt under the New Credit Facility.
17
<PAGE> 19
(G) Reflects cash payment of $55.0 million for Page America of which $35.0
million is assumed to be financed as long-term debt.
(H) On October 24, 1995, A+ Network acquired Network Paging Corp.
("Network") in a merger (the "A+/Network Merger") for approximately $12.0
million in cash, common stock valued at $50.8 million and incurred related
expenses of approximately $3.1 million. At the same time, A+ Communications sold
$125.0 million of the A+ Notes. The acquisition was accounted for using the
purchase method. The following gives effect to the acquisition by A+
Communications and the sale of the A+ Notes as if they had occurred on January
1, 1995.
<TABLE>
<CAPTION>
HISTORICAL
----------------------- PRO FORMA PRO FORMA
A+NETWORK NETWORK(1) ADJUSTMENTS A+ NETWORK
---------- ---------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Service, rent and maintenance revenue....... $ 53,308 $ 24,390 $ -- $ 77,698
Product sales............................... 4,024 4,321 -- 8,345
--------- --------- ---------- ----------
Total revenues...................... 57,332 28,711 -- 86,043
Net book value of products sold............. 7,878 4,066 -- 11,944
--------- --------- ---------- ----------
49,454 24,645 -- 74,099
Service, rent and maintenance expenses...... 11,584 5,533 (359)(2) 16,758
Selling, general and administrative......... 32,503 19,424 (38)(2) 45,872
(1,498)(2)
147 (3)
(4,666)(4)
Depreciation and amortization............... 14,835 3,026 7,191 (5) 25,052
Reorganization.............................. 669 -- (669)(6) --
--------- --------- ---------- ----------
Total operating expenses............ 59,591 27,983 108 87,682
--------- --------- ---------- ----------
Loss from operations........................ (10,137) (3,338) (108) (13,583)
Interest expense, net....................... (3,708) (760) (10,121)(7) (14,589)
--------- --------- ---------- ----------
Loss before income taxes and
extraordinary item........................ (13,845) (4,098) (10,229) (28,172)
Income taxes................................ -- (707) 707 (8) --
--------- --------- ---------- ---------
Loss before extraordinary item.............. (13,845) (4,805) (9,522) (28,172)
Extraordinary item.......................... (607) -- -- (607)
--------- --------- ---------- ---------
Net loss.................................... $(14,452) $ (4,805) $ (9,522) $ (28,779)
========= ========= ========== =========
</TABLE>
-----------------------
(1) Historical Network financial statements are presented for the period
from January 1, 1995 through October 24, 1995.
(2) Adjustment to eliminate specific operating and nonrecurring expenses
that would not have been incurred had the A+/Network Merger occurred
on January 1, 1995. Such savings are specifically identified as
follows (in thousands):
<TABLE>
<S> <C>
Reduction in long distance telephone charges.................... $ 267
Redundant paging terminals and related telephone expenses....... 92
Redundant yellow page advertising expense....................... 38
Salary costs of personnel not to be retained by A+/Network based
on analysis of A+/Network staffing requirements............... 1,498
------
Total................................................... $1,895
======
</TABLE>
(3) Adjustment to provide for changes in compensation of certain
executive officers pertaining to employment contracts entered into
at the time the A+/Network Merger closed.
(4) Adjustment to eliminate compensation costs that would not have been
incurred had the A+/Network Merger occurred on January 1, 1995.
(5) To record amortization expense related to intangibles for the period
from January 1, 1995 to October 24, 1995 net of $304,000 in
historical amortization expense for intangibles recorded by Network
before the A+/Network Merger.
(6) To give effect to elimination of the non-recurring reorganization
expenses incurred by A+ Network as a result of the A+/Network Merger.
(7) Reflects interest expense on the A+ Notes at 11 7/8% (plus
amortization of debt issuance costs of approximately $4.6 million and
discount of $907,500) net of interest expense ($5,270,000) applicable
to all existing long-term debt which was repaid with the proceeds
from the sale of the A+ Notes.
(8) Adjustment to reverse the income tax provision applicable to
Network, as its taxable income would be offset by A+ Network's net
operating losses for income tax purposes had the A+/Network Merger
occurred on January 1, 1995.
(I) Reflects the elimination of certain executive salaries for Parkway and
Satellite executives terminated upon completion of the respective acquisitions
in July and August of 1996.
18
<PAGE> 20
(J) Reflects incremental depreciation and amortization based upon the
preliminary allocation of depreciable and amortizable assets and assumed useful
lives of 5 years for subscriber lists, 25 years for FCC licenses and 15 years
for goodwill. The $1.9 million assigned to non-compete agreements in conjunction
with the A+ Network merger will be amortized over 3 years.
(K) Represents the estimated incremental interest at a rate of 8.00% that
would have been incurred assuming all acquisitions were completed on January 1,
1995.
Also reflects the estimated incremental savings from the refinancing of
$125.0 million of A+ Notes at a rate of 11.875% for $127.47 million ($126.22
million offer consideration and payment for consents to modify indenture and
$1.25 million estimated accrued interest, fees and expenses related to
refinancing) with debt under the New Credit Facility at a rate of 8.00% that
would have occurred assuming the refinancing was completed on January 1, 1995.
(L) Represents the tax benefit resulting from the amortization of acquired
intangibles for A+ Network and Parkway assuming an effective tax rate of 40%.
(M) Represents dividend payment on $39.9 million private placement of
Series A Convertible Redeemable Preferred Stock bearing interest at 14% per
annum.
(N) Historical statements for Parkway and Satellite in 1996 are through
July 16 and August 30, respectively, which are the dates the acquisitions with
the Company were completed. Subsequent to completion of the acquisitions all
financial reporting data is included in historic Metrocall data.
(O) Represents elimination of Metrocall's portion of A+ Network's net loss
(40%) as accounted for under the equity method.
19
<PAGE> 21
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 33,500,000 shares
of Metrocall Common Stock and 1,000,000 shares of preferred stock, par value
$0.01 per share (the "Metrocall Preferred Stock"), of which 810,000 shares have
been designated as Series A Preferred Stock. The Board of Directors of Metrocall
has approved, and shareholders of Metrocall are expected to vote in May 1997 on,
an amendment to the Metrocall Certificate of Incorporation (the "Metrocall
Certificate"), increasing the number of authorized shares of Metrocall Common
Stock to 50,000,000 shares. Stockholders of Metrocall beneficially owning
5,727,577 shares (or approximately 23.2% of the issued and outstanding shares of
Metrocall Common Stock) have agreed to vote in favor of the amendment. As of
December 27, 1996, there were 24,478,295 shares of Metrocall Common Stock and
159,600 shares of Series A Preferred Stock outstanding. In addition, warrants to
purchase 2,915,254 shares of Metrocall Common Stock were issued and outstanding
on November 30, 1996.
COMMON STOCK
The holders of Metrocall Common Stock are entitled to one vote for each
share held of record on all matters submitted to a vote of holders of Common
Stock. Holders of Metrocall Common Stock have no cumulative voting rights and,
except as described below, no preemptive, subscription, redemption, sinking fund
or conversion rights. Subject to preferences that may be applicable to any then
outstanding Metrocall Preferred Stock, holders of Metrocall Common Stock are
entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available therefor. In the event of a
liquidation, dissolution or winding up of Metrocall, holders of the Metrocall
Common Stock will be entitled to share ratably in all interests remaining after
payment of liabilities and the liquidation preference of any then outstanding
Metrocall Preferred Stock.
The Metrocall Certificate authorizes its Board of Directors to issue, from
time to time and without further stockholder action, one or more series of
Metrocall Preferred Stock, and to fix the relative rights and preferences of the
shares, including voting powers, dividend rights, liquidation preferences,
redemption rights and conversion privileges. As of the date of this Prospectus,
the Board of Directors has authorized the Series A Preferred Stock. Because of
its broad discretion with respect to the creation and issuance of additional
shares of Metrocall Preferred Stock without stockholder approval, Metrocall's
Board of Directors could adversely affect the voting power of the holders of
Metrocall Common Stock and, by issuing shares of Metrocall Preferred Stock with
certain voting, conversion and/or redemption rights, could discourage any
attempt to obtain control of Metrocall.
Under the Communications Act of 1934, as amended (the "Communications
Act"), not more than 20% of Metrocall's capital stock may be owned of record by
other than United States citizens or entities. The Metrocall Certificate
authorizes its Board of Directors to redeem any of Metrocall's outstanding
capital stock to the extent necessary to prevent the loss or secure the
reinstatement of any license or franchise from any governmental agency. Such
stock may be redeemed as the lesser of (i) fair market value or (ii) such
holder's purchase price (if the stock was purchased within one year of such
redemption). Other than redemption where necessary to protect Metrocall's
regulatory licenses, there are no redemption or sinking fund provisions
applicable to the Metrocall Common Stock.
The Metrocall Certificate provides that all actions taken by Metrocall
stockholders must be taken at an annual or special meeting of stockholders or by
unanimous written consent. The Metrocall By-laws provide that special meetings
of the stockholders may be called only by a majority of the members of the Board
of Directors, the Chairman or the holders of not less than 35% of the voting
stock of Metrocall. Stockholders are required to comply with certain advance
notice provisions with respect to any nominations of candidates for election to
Metrocall's Board of Directors or other proposals submitted for stockholder
vote. The Metrocall Certificate and the Metrocall By-laws contain certain
provisions requiring the affirmative vote of the holders of at least two-thirds
of the Metrocall Common Stock to amend certain provisions of the Metrocall
Certificate and the Metrocall By-laws.
20
<PAGE> 22
The Metrocall Certificate provides for the division of the members of the
board of directors elected by holders of Metrocall Common Stock into three
classes of directors serving staggered three-year terms. The authorized number
of directors may be changed only by resolution of the Board of Directors, and
directors may not be removed without cause.
Provisions of the Metrocall Certificate and the Metrocall By-laws could
operate to delay, defer or prevent a change of control in the event of certain
transactions such as a tender offer, merger or sale or transfer of substantially
all of Metrocall's assets. These provisions, as described below, are expected to
discourage certain types of coercive takeover practices and inadequate takeover
bids and to encourage persons seeking to acquire control of Metrocall first to
negotiate with Metrocall. Metrocall believes that the benefits of increased
protection of Metrocall's potential ability to negotiate with the proponent of
an unfriendly or unsolicited proposal to acquire or restructure Metrocall
outweigh the disadvantages of discouraging such proposals because, among other
things, negotiating with respect to such proposals could result in an
improvement of their terms.
Metrocall is subject to the provisions of Section 203 of the Delaware
General Corporation Law. Under Section 203, a resident domestic corporation may
not engage in a business combination with an interested stockholder for a period
of three years after the date such person became an interested stockholder,
unless (i) prior to such date the board of directors approved either the
business combination or the transaction which resulted in the stockholder
becoming an interested stockholder, (ii) upon consummation of the transaction
which resulted in the stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the corporation's voting stock
outstanding at the time the transaction commenced (excluding for purposes of
determining the number of shares outstanding those shares owned by (x) persons
who are directors and officers and (y) employee stock plans, in certain
instances), or (iii) on or subsequent to such date the business combination is
approved by the board of directors and authorized by the affirmative vote of at
least two-thirds of the outstanding voting stock which is not owned by the
interested stockholder. Section 203 defines the term "business combination" to
encompass a wide variety of transactions with or caused by an interested
stockholder in which the interested stockholder receives or could receive a
benefit on other than a pro rata basis with other stockholders, including
certain mergers, consolidations, asset sales, transfers and other transactions
resulting in a beneficial interest to the interested stockholder. "Interested
stockholder" means a person who owns (or within three years prior, did own) 15%
or more of the corporation's outstanding voting stock, and the affiliates and
associates of such person.
The Metrocall Certificate authorizes its Board of Directors, when
considering a tender offer, merger or acquisition proposal, to take into account
factors in addition to potential economic benefits to stockholders, including,
but not limited to, (i) a comparison of the proposed consideration to be
received by the stockholders in relation to the then current market price of the
capital stock, the estimated current value of Metrocall in a freely negotiated
transaction and the estimated future value of Metrocall as an independent
entity, and (ii) the impact of such a transaction on the subscribers, suppliers
and employees of Metrocall, and its effect on the communities in which Metrocall
operates.
The Metrocall Certificate prohibits Metrocall from purchasing any shares of
Metrocall's capital stock from any person, entity or group that beneficially
owns five percent or more of Metrocall's capital stock at a price exceeding the
average closing price for the 20 business days prior to the purchase date,
unless a majority of Metrocall's disinterested stockholders approve the
transaction, or as may be necessary to protect Metrocall's regulatory licenses.
This restriction on purchases by Metrocall does not apply to any offer to
purchase shares of a class of Metrocall's stock which is made on the same terms
and conditions to all holders of that class of stock, to any purchase of stock
owned by such a five-percent stockholder occurring more than two years after
such stockholder's last acquisition of Metrocall's stock, to any purchase of
Metrocall's stock in accordance with the terms of any stock option or employee
benefit plan or to any purchase at prevailing market prices pursuant to a stock
purchase program.
21
<PAGE> 23
SERIES A PREFERRED STOCK
On November 15, 1996, Metrocall issued 159,600 shares of Series A Preferred
Stock. The following summary of the designations, rights and preferences of the
Series A Preferred Stock sets forth the material terms of the Series A Preferred
Stock, but is not a complete description of its terms. This summary is qualified
in its entirety by reference to the Certificate of Designation, Number, Powers,
Preferences and Relative, Participating, Optional and Other Rights (the
"Certificate of Designation") of the Series A Preferred Stock which is filed as
an exhibit to documents incorporated herein by reference. See "Incorporation of
Certain Information by Reference."
Each share of Series A Preferred Stock has a stated value of $250 per
share. Each share has a liquidation preference over shares of Metrocall Common
Stock equal to the stated value plus accrued and unpaid dividends to the date of
liquidation. The Series A Preferred Stock carries a dividend of 14% of the
stated value per year, payable semi-annually in cash or in additional shares of
Series A Preferred Stock, at Metrocall's option. Upon the occurrence of a
"Triggering Event" and so long as the Triggering Event continues, the dividend
rate increases to 16% per year. A "Triggering Event" is defined in the
Certificate of Designation to include (i) a failure to redeem the Series A
Preferred Stock as required, (ii) a failure to pay dividends on the Series A
Preferred Stock on a scheduled dividend payment date, (iii) completion of a
transaction that requires approval of holders of Series A Preferred Stock
without obtaining such approval, (iv) the failure of the stockholders of
Metrocall to approve an increase in the number of authorized shares of Metrocall
Common Stock to 50,000,000 on or prior to June 1, 1997, (v) the failure to
convert shares of Series A Preferred Stock into shares of Metrocall Common Stock
as required pursuant to the Certificate of Designation, to issue shares of
Metrocall Common Stock upon exercise of the Warrants (as defined below), or to
adjust the number of shares of Metrocall Common Stock issuable upon exercise of
Warrants as required by the terms of the Warrants, (vi) the failure to comply
with the terms of a registration rights agreement with the initial holders of
the Series A Preferred Stock relating to registration of the Series A Preferred
Stock and shares of Metrocall Common Stock issuable upon exercise of the
Warrants or conversion of the Series A Preferred Stock, (vii) Metrocall issuing
or incurring indebtedness or equity securities senior with respect to payment of
dividends or distributions on liquidation or redemption to the Series A
Preferred Stock in violation of limitations set forth in the Certificate of
Designation, (viii) default on the payment of indebtedness of Metrocall in an
amount of $5,000,000 or more, and (ix) certain bankruptcy related events. As
long as a Triggering Event described in clause (iv) is continuing, dividends
must be paid in cash to the extent permitted by the terms of agreements relating
to Metrocall's debt.
Holders of Series A Preferred Stock have the right, beginning on November
15, 2001, to convert their Series A Preferred Stock (including shares issued as
dividends) into shares of Metrocall Common Stock based on the market price of
Metrocall Common Stock at the time of conversion (or may, at the option of
holders, be converted sooner upon a change of control of Metrocall, as defined
in the Certificate of Designation). The Series A Preferred Stock must be
redeemed on November 15, 2008 for an amount equal to the stated value plus
accrued and unpaid dividends.
The Series A Preferred Stock may also be redeemed by Metrocall in whole or
in part (subject to certain minimums) beginning November 15, 1999. Prior to
then, the Series A Preferred Stock may be redeemed by Metrocall in whole in
connection with a sale of the Company (as described in the Certificate of
Designation) unless the holders have exercised their rights to convert to
Metrocall Common Stock in connection with the transaction. The redemption price
prior to November 15, 2001, is equal to the stated value of the shares of Series
A Preferred Stock, plus accrued and unpaid dividends and a redemption premium.
The redemption premium to be received by a holder for its shares would be
calculated as the excess, if any, of the amount that would provide a specified
internal rate of return on the holder's purchase price of $250 per unit for the
shares of Series A Preferred Stock and Warrants it initially acquired, over (i)
the stated value of shares received as dividends in respect of the shares
originally issued (including dividends on such dividends) plus (ii) the excess
of the then-current market price of Metrocall Common Stock over the exercise
price of the shares of Metrocall Common Stock represented by the Warrants issued
in conjunction with the shares originally issued. The applicable internal rates
of return are 20% for redemptions on and after November 15, 2000 and before
November 15, 2001; 25% for redemptions on and after November 15, 1999 and before
November 15, 2000;
22
<PAGE> 24
and 30% for redemptions before November 15, 1999, except that, for redemptions
prior to November 15, 1997, the redemption premium will be calculated so that
the holders receive a rate of return of 30% as though the shares were held
through November 15, 1997 without including the excess of the market price of
the Common Stock over the exercise price under the Warrants in calculating the
redemption premium. After November 15, 2001, the Series A Preferred Stock may be
redeemed for the stated value of $250 per share plus accrued and unpaid
dividends, without premium. Metrocall may not exercise its redemption right
between November 15, 2001, and January 15, 2002 or with respect to any shares as
to which the holders have delivered a notice of conversion into Metrocall Common
Stock.
Holders of the Series A Preferred Stock have the right to elect two
directors of Metrocall. One such director is to be chosen by UBS (or subsequent
holders of a majority of shares initially purchased by UBS) and the other is to
be chosen by SunAmerica and Hancock (or subsequent holders of a majority of
shares initially purchased by SunAmerica and Hancock). If a Triggering Event has
occurred and is continuing, holders of Series A Preferred Stock shall have the
right to elect an additional number of directors so that such directors shall
constitute no less than 40% of the members of the Board of Directors. Metrocall
also is required to obtain approval of holders of not less than 75% of the
issued and outstanding Series A Preferred Stock before undertaking: (i) any
change in the Metrocall Certificate and By-laws that adversely affects the
rights of holders of the Series A Preferred Stock, (ii) a liquidation, winding
up or dissolution of Metrocall or the purchase of shares of capital stock of
Metrocall from holders of over 5% of the issued and outstanding voting
securities of Metrocall, (iii) any payment of dividends on or redemption of
Metrocall Common Stock, or (iv) issuance of any additional shares of Series A
Preferred Stock (except in payment of dividends) or any shares of capital stock
having preferences on liquidation or dividends that are equal to the preferences
on Series A Preferred Stock. Metrocall is also required to obtain approval of
holders of not less than a majority of the issued and outstanding Series A
Preferred Stock before undertaking: (i) any acquisition involving consideration
having a value equal to or greater than 50% of the market capitalization of
Metrocall at the time of such acquisition, or (ii) any sale of Metrocall unless
Metrocall redeems the Series A Preferred Stock as described above.
The Company has agreed to register under the Securities Act of 1933 the
resale of shares that may be obtained upon conversion of Series A Preferred
Stock. The obligation to register does not arise until the shares may be
converted, and the Company is required to use its best efforts to maintain the
effectiveness of the registration until such time as all the shares of Common
Stock acquired upon conversion of the Series A Preferred Stock either have been
transferred pursuant to the registration or are eligible to be sold pursuant to
Rule 144 under the Securities Act of 1933 without regard to any restrictions
pursuant to Rule 144(k).
WARRANTS
In connection with the issuance of the Series A Preferred Stock, Metrocall
issued on November 15, 1996, warrants (the "Warrants") to purchase Metrocall
Common Stock. Each Warrant represents the right of the holder to purchase 18.266
shares of Metrocall Common Stock, representing an aggregate of 2,915,254 shares.
The exercise price per share is $7.40. The Warrants contain certain provisions
for adjustment in the exercise price in the event that, in a private
transaction, Metrocall issues Common Stock for a price that is less than 80% of
the then-current exercise price, or options, warrants, or other securities
convertible into or exchangeable for Common Stock with an exercise price which
is less than the then-current exercise price of the Warrants. In addition, the
Warrants contain certain customary anti-dilution provisions requiring adjustment
in the exercise price and the number of shares for which the warrants are
exercisable in certain circumstances. The Warrants expire November 15, 2001.
The Company has agreed to register under the Securities Act of 1933 the
resale of shares that may be obtained upon exercise of the Warrants. The shares
are registered pursuant to the registration statement of which this Prospectus
is a part and the Company is obligated to use its best efforts to maintain the
effectiveness of the registration statement until such time as all the shares of
Common Stock acquired upon the exercise of the Warrants either have been
transferred pursuant to the registration statement or are eligible to be sold
pursuant to Rule 144 under the Securities Act of 1933 without regard to any
restrictions pursuant to Rule 144(k).
23
<PAGE> 25
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
shares offered by this Prospectus, though it will receive $7.40 per share upon
exercise of the Warrants by the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of shares of Metrocall Common Stock by the Selling Stockholders as of
December 27, 1996 and the number of shares which may be offered for the account
of the Selling Stockholders or their transferees or distributees from time to
time. As of the date of this Prospectus, all of the shares beneficially owned by
the Selling Stockholders are issuable to the Selling Stockholders upon exercise
of Warrants. Each Warrant represents the right of the holder to purchase 18.266
shares of Metrocall Common Stock, representing an aggregate of 2,915,254 shares.
The exercise price per share is $7.40. The Warrants contain certain provisions
for adjustment in the exercise price in the event that, in a private
transaction, Metrocall issues Common Stock for a price that is less than 80% of
the then-current exercise price, or options, warrants, or other securities
convertible into or exchangeable for Common Stock with an exercise price which
is less than the then-current exercise price of the Warrants. In addition, the
Warrants contain certain customary anti-dilution provisions requiring adjustment
in the exercise price and the number of shares for which the warrants are
exercisable in certain circumstances. The Warrants expire November 15, 2001.
Because the Selling Stockholders may sell all or any part of their shares
pursuant to this Prospectus, no estimate can be given as to the number of shares
that will be held by the Selling Stockholders upon termination of this offering.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES NUMBER OF SHARES PERCENT OWNED
BENEFICIALLY OWNED WHICH MAY BE SOLD OWNED AFTER AFTER
SELLING STOCKHOLDERS PRIOR TO OFFERING IN THIS OFFERING THE OFFERING THE OFFERING(1)
- -------------------------------- ------------------ ----------------- ---------------- ---------------
<S> <C> <C> <C> <C>
John Hancock Mutual Life
Insurance Company (2)......... 913,300 913,300 0 0
SunAmerica, Inc. (3)............ 913,300 913,300 0 0
UBS Capital LLC (4)............. 1,544,019 1,088,654 455,365 1.7%
</TABLE>
- ---------------
(1) Assumes all Warrants have been exercised.
(2) Does not include shares of Metrocall Common Stock that Hancock will be
entitled to receive upon conversion of 50,000 shares of Series A Preferred
Stock held by it. The shares of Series A Preferred Stock are not currently
convertible into shares of Metrocall Common Stock, but will become
convertible into shares of Metrocall Common Stock on the terms set forth
under "Description of Capital Stock -- Series A Preferred Stock."
(3) Does not include shares of Metrocall Common Stock that SunAmerica will be
entitled to receive upon conversion of 50,000 shares of Series A Preferred
Stock held by it. The shares of Series A Preferred Stock are not currently
convertible into shares of Metrocall Common Stock, but will become
convertible into shares of Metrocall Common Stock on the terms set forth
under "Description of Capital Stock -- Series A Preferred Stock."
(4) Does not include shares of Metrocall Common Stock that UBS will be entitled
to receive upon conversion of 59,600 shares of Series A Preferred Stock held
by it. The shares of Series A Preferred Stock are not currently convertible
into shares of Metrocall Common Stock, but will become convertible into
shares of Metrocall Common Stock on the terms set forth under "Description
of Capital Stock -- Series A Preferred Stock."
PLAN OF DISTRIBUTION
The shares offered hereby may be sold by the Selling Stockholders or by
their respective pledgees, donees, transferees or other successors in interest.
Such sales may be made at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, or at negotiated prices. The shares may be sold by one or more of the
following: (a) one or more block trades in which a broker or dealer so engaged
will attempt to sell all or a portion of the shares held by the Selling
Stockholders as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchase by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus; (c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and (d) privately negotiated transactions between
the Selling Stockholders and purchasers without a broker-dealer. The Selling
Stockholders may effect such transactions by selling shares to or through
broker-dealers, and such broker-dealers will receive compensation in negotiated
amounts in the form of discounts, concessions, commissions or fees from the
Selling Stockholders and/or the purchasers of the shares for whom such
broker-dealers may act as agent or to whom they sell as principal, or both
(which
24
<PAGE> 26
compensation to a particular broker-dealer might be in excess of customary
commissions). Such brokers or dealers or other participating brokers or dealers
and the Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, in connection with such sales. In
addition, any securities covered by this Prospectus that qualify for sale
pursuant to Rule 144 might be sold under Rule 144 rather than pursuant to this
Prospectus.
The Company shall use its best efforts to maintain the effectiveness of
this Registration Statement until such time as all shares offered hereby either
have been transferred pursuant to this Registration Statement or are eligible to
be sold pursuant to Rule 144 under the Securities Act of 1933 without regard to
any restrictions pursuant to Rule 144(k).
LEGAL MATTERS
The legality of issuance of the shares will be passed upon for the Company
by Wilmer, Cutler & Pickering, Washington, D.C.
EXPERTS
The audited consolidated financial statements of the Company and the
combined financial statements of O.R. Estman, Inc. and Dana Paging, Inc. (dba
Satellite Paging and Message Network, respectively) incorporated by reference in
this Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
giving said reports.
The audited financial statements of Parkway Paging, Inc. as of December 31,
1995 and 1994 and for each of the three years ended December 31, 1995
incorporated by reference in this Prospectus have been audited by Hutton,
Patterson & Company, independent auditors, as indicated in their reports with
respect thereto, and are incorporated herein in reliance upon the authority of
said firm as experts in auditing and accounting.
25
<PAGE> 27
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY THE SHARES OF COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH THE OFFER
OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING THE OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL CREATE ANY IMPLICATION THAT INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THIS DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information.................. 2
Incorporation of Certain Information by
Reference............................ 2
The Company............................ 3
Risk Factors........................... 4
Recent Developments.................... 8
Management............................. 10
Pro Forma Condensed Combined Financial
Data................................. 13
Description of Capital Stock........... 20
Use of Proceeds........................ 24
Selling Stockholders................... 24
Plan of Distribution................... 24
Legal Matters.......................... 25
Experts................................ 25
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2,915,254 SHARES
METROCALL, INC.
COMMON STOCK
--------------------
PROSPECTUS
--------------------
December , 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 28
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses (other than underwriting discounts and commissions)
payable in connection with the sale of the Common Stock offered hereby are as
follows:
<TABLE>
<S> <C>
SEC Registration................................................... $ 3,700
Nasdaq Listing Fee................................................. 17,500
Legal Fees and Expenses............................................ 5,000
Accounting Fees and Expenses....................................... 5,000
Printing Fees and Expenses......................................... 5,000
Miscellaneous...................................................... 3,800
-------
Total......................................................... $40,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporate Law ("DGCL") empowers a
Delaware corporation to indemnify any person who was or is, or is threatened to
be made, a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation) by reason of the fact that
such person is or was a director, officer, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, such person had no reasonable cause to believe his conduct was
unlawful. A Delaware corporation may indemnify such persons against expenses
(including attorneys' fees) in actions brought by or in the right of the
corporation to procure a judgment in its favor under the same conditions, except
that no indemnification is permitted in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the corporation
unless and to the extent the Court of Chancery of the State of Delaware or the
court in which such action or suit was brought shall determine upon application
that, in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the Court of Chancery or
other such court shall deem proper. To the extent such person has been
successful on the merits or otherwise in defense of any action referred to
above, or in defense of any claim, issue or matter therein, the corporation must
indemnify such person against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith. The indemnification
and advancement of expenses provided for in, or granted pursuant to, Section 145
is not exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 145 also provides that a corporation may maintain insurance against
liabilities for which indemnification is not expressly provided by the statute.
Section 6 of the Metrocall Amended and Restated Certificate of
Incorporation provides for indemnification of the directors, officers, employees
and agents of Metrocall to the full extent currently permitted by the DGCL.
In addition, the Metrocall Amended and Restated Certificate of
Incorporation, as permitted by Section 102(b) of the DGCL, limits directors'
liability to Metrocall and its stockholders by eliminating liability in damages
for breach of fiduciary duty. Section 5.5 of the Metrocall Amended and Restated
Certificate of Incorporation provides that neither Metrocall nor its
stockholders may recover damages from Metrocall directors for breach of their
fiduciary duties in the performance of their duties as directors of
II-1
<PAGE> 29
Metrocall. As limited by Section 102(b), this provision cannot, however, have
the effect of indemnifying any director of Metrocall in the case of liability
(i) for a breach of the director's duty of loyalty, (ii) for acts of omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) for unlawful payments of dividends or unlawful stock repurchases
or redemptions as provided in Section 174 of the DGCL or (iv) for any
transactions for which the director derived an improper personal benefit.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<S> <C> <C>
4.1 Specimen Certificate representing the Metrocall, Inc. Common Stock.(a)
5.1 Opinion of Wilmer, Cutler & Pickering as to the legality of the securities
being registered.
23.1 Consent of Wilmer, Cutler & Pickering (included in Exhibit 5).
23.2 Consent of Arthur Andersen LLP, as independent public accountants for
Metrocall, Inc.
23.3 Consent of Arthur Andersen LLP, as independent public accountants for O.R.
Estman, Inc. and Dana Paging, Inc. dba Satellite Paging.
23.4 Consent of Hutton, Patterson & Company, as independent public accountants
for Parkway Paging, Inc.
24 Power of Attorney (included in signature pages of this Registration
Statement).
</TABLE>
- ---------------
(a) Incorporated by reference to Metrocall's Registration Statement on Form
S-1, as amended (File No. 33-63886), filed with the Commission on July 12,
1993.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) 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 and 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 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) 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 (c)(1)(i) and (c)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
II-2
<PAGE> 30
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions set forth in Item 15 or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
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, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 31
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THE REGISTRANT HAS DULY
CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ALEXANDRIA, COMMONWEALTH
OF VIRGINIA, ON DECEMBER 31, 1996.
METROCALL, INC.
By: /S/ VINCENT D. KELLY
------------------------------------
Name: Vincent D. Kelly
Title: Vice President and CFO
POWER OF ATTORNEY
We, the undersigned officers and directors of Metrocall, Inc., hereby
severally constitute and appoint William L. Collins III and Vincent D. Kelly,
and each of them singly, to sign for us and in our names in the capacities
indicated below, the Registration Statement filed herewith and any and all
amendments to said Registration Statement (including post-effective amendments),
and generally to do all such things in our names and in our capacities as
officers and directors to enable Metrocall, Inc. to comply with the provisions
of the Securities Act of 1933, and all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they may
be signed by our said attorneys, or any of them, to said Registration Statement
and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ----------------------------------- ----------------------------------- ------------------
<C> <C> <S>
/s/ WILLIAM L. COLLINS, III President, Chief Executive Officer December 31, 1996
- ----------------------------------- and
WILLIAM L. COLLINS, III Director (Principal Executive
Officer)
/s/ VINCENT D. KELLY Vice President, Chief Financial December 31, 1996
- ----------------------------------- Officer
VINCENT D. KELLY (Principal Financial
and Accounting Officer)
/s/ RICHARD M. JOHNSTON Chairman of the Board December 31, 1996
- -----------------------------------
RICHARD M. JOHNSTON
/s/ RONALD V. APRAHAMIAN Director December 31, 1996
- -----------------------------------
RONALD V. APRAHAMIAN
/s/ HARRY L. BROCK, JR. Director December 20, 1996
- -----------------------------------
HARRY L. BROCK, JR.
/s/ SUZANNE S. BROCK Director December 21, 1996
- -----------------------------------
SUZANNE S. BROCK
/s/ FRANCIS A. MARTIN, III Director December 31, 1996
- -----------------------------------
FRANCIS A. MARTIN, III
/s/ RYAL R. POPPA Director December 31, 1996
- -----------------------------------
RYAL R. POPPA
/s/ RAY D. RUSSENBERGER Director December 31, 1996
- -----------------------------------
RAY D. RUSSENBERGER
/s/ ELLIOTT H. SINGER Director December 31, 1996
- -----------------------------------
ELLIOTT H. SINGER
</TABLE>
II-4
<PAGE> 32
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- -------------------------------------------------------------------------- --------
<C> <S> <C>
4.1 Specimen Certificate representing the Metrocall, Inc. Common Stock.(a)....
5.1 Opinion of Wilmer, Cutler & Pickering as to the legality of the securities
being registered..........................................................
23.1 Consent of Wilmer, Cutler & Pickering (included in Exhibit 5).............
23.2 Consent of Arthur Andersen LLP, as independent public accountants for
Metrocall, Inc............................................................
23.3 Consent of Arthur Andersen LLP, as independent public accountants for O.R.
Estman, Inc. and Dana Paging, Inc. dba Satellite Paging...................
23.4 Consent of Hutton, Patterson & Company, as independent public accountants
for Parkway Paging, Inc...................................................
24 Power of Attorney (included in signature pages of this Registration
Statement)................................................................
</TABLE>
- ---------------
(a) Incorporated by reference to Metrocall's Registration Statement on Form
S-1, as amended (File No. 33-63886), filed with the Commission on July 12,
1993.
II-5
<PAGE> 1
EXHIBIT 5.1
[WILMER, CUTLER & PICKERING LETTERHEAD]
December 31, 1996
Metrocall, Inc.
6677 Richmond Highway
Alexandria, Virginia 22306
Re: Metrocall, Inc. Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Metrocall, Inc., a Delaware
corporation (the "Company"), in connection with a Registration Statement (the
"Registration Statement") on Form S-3 initially filed with the Securities and
Exchange Commission (the "Commission") on December 30, 1996 under the Securities
Act of 1993. The Registration Statement relates to the resale of the shares of
common stock of the Company, par value $0.01 per share (the "Shares"), issuable
upon exercise of certain warrants (the "Warrants"), the terms of which are set
forth in a warrant agreement (the "Warrant Agreement") dated as of November 15,
1996. For the purposes of this opinion, we have examined and relied upon such
documents, records, certificates and other instruments as we have deemed
necessary.
Based solely upon the foregoing, and upon our examination of
such questions of law and statutes as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that (i) the Shares have
been lawfully and duly authorized; and (ii) upon exercise of the Warrants
pursuant to the terms of the Warrant Agreement, the Shares will have been
validly issued and fully paid and nonassessable.
<PAGE> 2
Metrocall, Inc.
December 31, 1996
Page Two
We are members of the bar of the State of Maryland and the
District of Columbia and do not hold ourselves out as being experts in the law
of any other state. This opinion is limited to the laws of the United States
and the General Corporation Law of Delaware. Although we do not hold ourselves
out as being experts in the laws of Delaware, we have made an investigation of
such laws to the extent necessary to render our opinion. Our opinion is
rendered only with respect to the laws and the rules, regulations and orders
thereunder that are currently in effect.
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion. This opinion has been
prepared solely for your use in connection with the filing of the Registration
Statement on December 31, 1996, and should not be quoted in whole or in part or
otherwise be referred to, nor otherwise be filed with or furnished to any
governmental agency or other person or entity, without our express prior written
consent.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the use of our name therein under the caption
"Legal Matters."
Sincerely,
WILMER, CUTLER & PICKERING
By: /s/ THOMAS W. WHITE
--------------------------
Thomas W. White, a partner
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 8, 1996
(except with respect to the matters discussed in Note 13 as to which the date
is February 28, 1996) included in Metrocall, Inc.'s Form 10-K for the year
ended December 31, 1995 and to all references to our Firm included in or made a
part of this registration statement filed on Form S-3.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Washington, D.C.
December 27, 1996
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated April 24, 1996 on
the combined financial statements of O.R. Estman, Inc. and Dana Paging, Inc.
included in Metrocall, Inc.'s Form 8-K/A of Metrocall, Inc. filed October 1,
1996 and to all references to our Firm included in or made a part of this
registration statement filed on Form S-3.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Roseland, New Jersey
December 27, 1996
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Metrocall, Inc. of our report dated February 13, 1996,
except to NOTE M for which the date is September 30, 1996, relating to the
financial statements of Parkway Paging, Inc. which is appearing in the current
Report on Form 8-K/A of Metrocall, Inc. filed October 1, 1996. We also consent
to the references to us under the heading "Experts" in such Statement.
/s/ HUTTON, PATTERSON & COMPANY
HUTTON, PATTERSON & COMPANY
Dallas, Texas
December 30, 1996
