<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 4, 1997.
REGISTRATION NO. 333-
================================================================================
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>
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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. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<S> <C> <C> <C> <C>
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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
- ----------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.01 per share... 494,279 $4 1/4(1) $2,100,686 $637
======================================================================================================================
</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 April 1,
1997, 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
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 4, 1997
PROSPECTUS
METROCALL, INC.
494,279 SHARES COMMON STOCK
------------------------
This Prospectus relates to the resale of up to an aggregate of 494,279
shares of common stock, $.01 par value per share (the "Shares") of Metrocall,
Inc. ("Metrocall" or the "Company"). Of the 494,279 shares, 311,213 shares,
108,924 shares, 37,071 shares and 37,071 shares were issued to Leroy Faith, Sr.,
Eddie Ray Faith, Donald Dewayne Faith, and Leroy Faith, Jr., respectively (the
"Selling Stockholders"), in connection with the merger of Radio and
Communications Consultants, Inc. ("RCC") and Advanced Cellular Telephone, Inc.
("ACT") with and into the Company. The Shares may be sold from time to time 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. The Company has agreed to bear
the expenses incurred in connection with the registration of the Shares. The
Selling Stockholders will pay or assume brokerage commissions or similar charges
incurred in the sale of the Shares.
The Company's Common Stock is traded on the Nasdaq National Market ("NNM")
under the symbol "MCLL." On April 3, 1997, the last reported sale price of the
Common Stock was $4.375 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 , 1997.
<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, 1996; (ii) the
financial statements of Parkway Paging, Inc., O.R. Estman, Inc. and Dana Paging,
Inc., A+ Network, Inc. and Network Paging Corporation contained in its Current
Report on Form 8-K filed on September 13, 1996 and amended on October 1, 1996;
(iii) its Current Report on Form 8-K filed on January 27, 1997, and (iv) its
Current Report on Form 8-K filed on February 24, 1997.
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.
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<PAGE> 4
THE COMPANY
Metrocall is the fifth largest paging company in the United States, based
on 2,142,357 pagers in service at December 31, 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 concentrated its selling in 32 markets and five operating regions: (i)
the Northeast (Massachusetts through Delaware); (ii) the Mid-Atlantic (Maryland
and the Washington, D.C. metropolitan area); (iii) the Southeast (including
Virginia, the Carolinas, Georgia, Florida, Alabama, Louisiana, Mississippi and
Tennessee); (iv) the Southwest (primarily Texas); and (v) the West (California,
Nevada and Arizona). Through the Metrocall Nationwide Wireless Network,
Metrocall provides paging service to over 1,000 U.S. cities representing 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. 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.
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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.
INDEBTEDNESS OF METROCALL
At March 31, 1997, Metrocall had outstanding approximately $327.8 million
in indebtedness consisting of bank loans, senior subordinated notes, mortgage
indebtedness and capital leases, and expects to incur additional indebtedness of
approximately $25 million plus transactional fees in connection with the pending
acquisition of Page America (the "Page America Acquisition"). Metrocall has a
credit facility (the "Metrocall Credit Facility") in the principal amount of
$350 million (of which $179.9 million was drawn as of March 31, 1997 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 cash portion of the Page America purchase price, estimated
to be $25.0 million plus transaction fees and expenses. Metrocall expects to
incur additional indebtedness (in the form of draws under the Metrocall's senior
secured credit facility) to meet working capital needs and other purposes.
Metrocall also has issued and outstanding $39.9 million stated value of the
Series A Preferred Stock, the terms of which will require Metrocall 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. As part of the
consideration for the Page America Acquisition, Metrocall agreed to issue 1,500
shares of Series B Preferred Stock. Each share of Series B Preferred Stock will
have a stated value of $10,000 per share. The Series B Preferred Stock will
carry a dividend of 14% of the stated value per share, payable semi-annually in
cash or in additional shares of Series B Preferred Stock, at Metrocall's option.
The Series B Preferred Stock must be redeemed on the twelfth anniversary of the
issuance for an amount equal to the stated value, plus accrued and unpaid
dividends. Metrocall also expects to incur additional indebtedness (in the form
of draws on the Metrocall Credit Facility or otherwise) to meet working capital
needs or for other purposes. However, the ability to incur additional
indebtedness (including draws on the Metrocall 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
March 31, 1997 Metrocall was able to incur approximately $46.5 million of
additional indebtedness based on its pro forma operating results through
December 31, 1996 (without giving effect to the acquisition of Page America).
This substantial indebtedness, along with the net losses and working capital
deficits sustained by the Company in recent periods, will have consequences for
Metrocall, including the following: (i) the ability of Metrocall to obtain
additional financing for working capital, capital expenditures, debt service
requirements or other purposes may be impaired; (ii) a substantial portion of
Metrocall's cash flow from operations will be required to be dedicated to the
payment of Metrocall's interest expense; (iii) indebtedness under the Metrocall
Credit Facility bears interest at floating rates, which will cause Metrocall to
be vulnerable to increases in interest rates; (iv) Metrocall may be more highly
leveraged than companies with which it competes, which may place it at a
competitive disadvantage; and (v) Metrocall may be more vulnerable in the event
of a downturn in its business or in general economic conditions. Moreover, the
ability of Metrocall to meet its debt service and other obligations (including
compliance with financial covenants) will be dependent upon the future
performance of Metrocall 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 Metrocall were to require additional financing, such
additional financing would be available on terms permitted by agreements
relating to existing indebtedness or otherwise satisfactory to Metrocall.
CHALLENGES OF BUSINESS INTEGRATION
Acquisitions Metrocall has recently completed will require integration of
each company's development, administrative, finance, sales and marketing
organizations, as well as the integration of each company's communication
technologies and the coordination of their sales efforts. Further, each
company's customers will need to be reassured that their paging services will
continue uninterrupted. The diversion of management attention and any
difficulties encountered in the transition process could have an adverse impact
on the
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revenue and operating results of Metrocall. Additionally, attempts to achieve
economies of scale through cost cutting and lay-offs of existing personnel may,
at least in the short term, have an adverse impact upon Metrocall.
Metrocall believes that a key benefit to be realized from its acquisitions
will be the integration of paging service coverage, which will allow Metrocall
to provide paging services in new markets. There can be no assurance, however,
that Metrocall will be able to integrate such paging service coverage
successfully. If Metrocall is not successful in integrating such paging service
coverage, the business of Metrocall will be adversely affected.
No assurance can be given that additional suitable acquisitions 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.
Metrocall's continued internal growth will depend, in part, upon its ability to
attract and retain skilled employees, and the ability of Metrocall's officers
and key employees to manage successfully rapid growth and to implement
appropriate management information systems and controls. If Metrocall were
unable to attract and retain skilled employees, manage successfully rapid growth
and/or implement appropriate systems and controls, Metrocall's operations could
be adversely affected.
The paging industry has recently undergone significant consolidation as
various participants sought to accomplish growth similar to that 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
Metrocall could cause a distraction of management of Metrocall and impede
Metrocall's ability to accomplish its strategic goals and objectives and could
cause significant volatility in the price of the Metrocall Common Stock.
POSSIBLE IMPACT OF COMPETITION AND TECHNOLOGICAL CHANGE
Metrocall 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 the substantial majority of the
Company's revenues. Companies in the industry also compete on the basis of
coverage area, enhanced services, transmission quality, system reliability and
customer service. Certain of Metrocall's competitors possess greater financial,
technical, marketing and other resources than Metrocall. In addition, other
entities offering wireless two-way communications technology, including cellular
telephone, specialized mobile radio services and personal communication
services, compete with the paging services provided by Metrocall. There can be
no assurance that additional competitors will not enter markets served by
Metrocall or that Metrocall will be able to compete successfully. In this
regard, certain long distance carriers have announced their intention 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
Metrocall. 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. Several PCS
systems are currently operational. Additionally, other existing or prospective
radio services have potential to compete with Metrocall. For example, the FCC
has authorized non-geostationary mobile satellite service systems in several
frequency bands, and has initiated proceedings to consider making additional
licenses in some of those bands available. Licensees of those satellite services
(some of whom have already launched satellites) are permitted to offer signaling
and other mobile services that could compete with terrestrial paging
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companies. A recent FCC decision will allow land mobile licensees in the 220-222
MHz band to offer commercial paging services. The FCC has also initiated a rule
making proceeding proposing to allow Multiple Address Systems, a fixed microwave
service in various 900 MHz frequency bands, to offer mobile services. Any of
these services may compete directly or indirectly with Metrocall.
Moreover, changes in technology could lower the cost of competitive
services and products to a level where Metrocall's services and products would
become less competitive or to where Metrocall would be required to reduce the
prices of its services and products. There can be no assurance that Metrocall
will be able to develop or introduce new services and products to remain
competitive or that Metrocall will not be adversely affected in the event of
such technological developments.
Technological change also may affect the value of the pagers owned by
Metrocall and leased to its subscribers. If Metrocall's subscribers requested
more technologically advanced pagers, Metrocall could incur additional capital
expenditures if it were required to replace pagers leased to its subscribers.
HISTORY OF NET LOSSES
Metrocall sustained net losses of $2.4 million, $20.1 million and $49.1
million for the years ended December 31, 1994, 1995 and 1996, respectively. No
assurance can be given that losses can be reversed in the future. In addition,
at December 31, 1996, Metrocall's accumulated deficit was $96.8 million and
Metrocall had a deficit in working capital of $7.3 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 Metrocall will be able to operate profitably at any time in the future.
LITIGATION
In April 1996, Metrocall entered into an agreement to purchase certain of
the assets of Source One Wireless, Inc. ("Source One") and placed $1 million
cash in escrow. On June 26, 1996, Metrocall advised Source One that Source One
had failed to meet certain conditions to completion of the transaction and
terminated the agreement. On September 20, 1996, Source One filed an action in
the Circuit Court of Cook County, Illinois claiming that Metrocall had breached
the agreement and seeking specific performance of the purchase agreement or
unspecified damages in excess of $80 million. Metrocall intends to vigorously
defend the claims in this action and believes it has meritorious defenses to
this action.
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 Metrocall's results of
operations. An increase in its subscriber cancellation rate may adversely affect
Metrocall's results of operations.
POTENTIAL FOR CHANGE IN REGULATORY ENVIRONMENT
Metrocall'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 Metrocall. Changes in regulation of
Metrocall's paging business or the allocation of radio spectrum for services
that compete with Metrocall's business could adversely affect Metrocall'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. Although Metrocall believes that the proposed rule
changes may simplify Metrocall's regulatory compliance burdens,
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particularly regarding adding or relocating transmitter sites, those rule
changes may also increase Metrocall's costs of obtaining paging licenses.
RELIANCE ON KEY PERSONNEL
Metrocall is dependent on the efforts and abilities of a number of its
current key management, sales, support and technical personnel, including
William L. Collins, III, Steven D. Jacoby and Vincent D. Kelly. The success of
Metrocall will depend to a large extent on its ability to retain and continue to
attract key employees. The loss of certain of these employees or Metrocall's
inability to retain or attract key employees in the future could have an adverse
effect on Metrocall's operations.
NO ANTICIPATED STOCKHOLDER DISTRIBUTIONS
It is not anticipated that Metrocall will pay cash dividends in the
foreseeable future. Certain covenants of the Metrocall Credit Facility limit the
payment of cash dividends on preferred stock, and the Metrocall Credit Facility
and the terms of the Series A Preferred Stock prohibit the payment of cash
dividends on common stock. See "Description of Capital Stock."
POSSIBLE VOLATILITY OF STOCK PRICE; SHARES ELIGIBLE FOR FUTURE SALE
The market price of Metrocall Common Stock is subject to fluctuation. 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
March 31, 1997, the closing price of Metrocall Common Stock was $4.125, which
was less than the book value per share on December 31, 1996 of approximately
$6.78. The market price of Metrocall Common Stock may be volatile due to, among
other things, technological innovations affecting the paging industry,
Metrocall's acquisition strategy and the shares being registered pursuant to
this and other registration statements. Metrocall currently has effective
registration statements with respect to approximately 8.0 million shares of
Metrocall Common Stock held by certain stockholders of Metrocall and with
respect to 2,915,254 shares of Metrocall Common Stock which will be issued upon
the exercise of warrants held by the holders of Metrocall's Series A Preferred
Stock. Metrocall is also expected to issue approximately 4.4 million shares in
connection with the acquisition of Page America, but the amount issued will be
more if the market price of Metrocall Common Stock is less than $4.125 and less
if the market price is greater. In addition, Metrocall is obligated in certain
circumstances to register the shares of Metrocall Common Stock acquired by
certain affiliates of A+ Network, Inc. in the Company's merger with A+ Network.
Furthermore, in connection with that merger, Metrocall also issued indexed
variable common rights ("VCRs") which, in certain circumstances, could require
Metrocall to issue additional shares of Metrocall Common Stock. 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.
CONCENTRATION OF OWNERSHIP
Metrocall's executive officers, directors and their affiliates together
beneficially own 36.4% of the outstanding shares of Metrocall Common Stock. As a
result, such persons, if they act together, may have the ability to
substantially influence Metrocall's direction and to determine the outcome of
corporate actions requiring stockholder approval. In addition, the three holders
of Metrocall's Series A Preferred Stock have the right to appoint a total of two
members of Metrocall's Board of Directors, one of which has been selected as of
March 31, 1997. This concentration of ownership may have the effect of delaying
or preventing a change of control of Metrocall.
ANTI-TAKEOVER AND OTHER PROVISIONS
The Metrocall Certificate and Metrocall's Fifth Amended and Restated
By-laws (the "Metrocall By-laws") 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
Metrocall's assets. These provisions are expected to discourage certain types of
coercive takeover practices and inadequate
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takeover bids and to encourage persons seeking to acquire control of Metrocall
first to negotiate with the Board of Directors of Metrocall. In addition, the
Metrocall 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 Metrocall to engage in certain mergers and
consolidations or transactions involving a change of control of Metrocall.
The Metrocall Certificate 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 Metrocall Certificate generally prohibits Metrocall from purchasing any
shares of Metrocall's stock from any person, entity or group that beneficially
owns five percent or more of Metrocall's 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.
Metrocall is subject to the provisions of Section 203 of the Delaware
General Corporation Law ("DGCL"), 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.
INTANGIBLE ASSETS
Intangible assets, net of accumulated amortization, increased from
approximately $129.1 million in 1995 to approximately $452.6 million in 1996
primarily as a result of Metrocall's 1996 acquisitions of Parkway, Satellite,
Message Network and A+ Network. At December 31, 1996, Metrocall's total assets
of approximately $651.5 million included net intangible assets of approximately
$452.6 million. Intangible assets include state certificates and FCC licenses,
customer lists, debt financing costs, goodwill and certain other intangibles.
Metrocall will record, for financial reporting purposes, additional intangible
assets in connection with its acquisition of the assets of Page America in 1997.
Long-lived assets and identifiable intangibles to be held and used are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount should be addressed. Impairment is measured by comparing the
book value to the estimated undiscounted future cash flows expected to result
from use of the assets and their eventual disposition. Metrocall's estimates of
anticipated gross revenues, the remaining estimated lives of tangible and
intangible assets, or both, could be reduced significantly in the future due to
changes in technology, regulation, available financing and competitive pressures
in any of Metrocall's individual markets. As a result, the carrying amount of
long-lived assets and intangible assets including goodwill could be reduced
materially in the future.
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 under "Risk
Factors" as well as within this Prospectus generally. In addition, when used in
this Prospectus, 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
this Prospectus generally. Metrocall does not undertake any 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.
8
<PAGE> 10
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 60,000,000 shares. Persons who will be able to vote 9,385,204 shares
(or approximately 37.5% of the issued and outstanding shares of Metrocall Common
Stock) have agreed to vote in favor of the amendment. As of February 28, 1997,
there were 25,050,617 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 March
31, 1997.
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 Metrocall
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 and the
Series B 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.
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
9
<PAGE> 11
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.
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
10
<PAGE> 12
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. "Triggering Events" include, among other things,
(i) 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, (ii) 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, (iii) default on the
payment of indebtedness of Metrocall in an amount of $5,000,000 or more. As long
as a Triggering Event described in clause (i) 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 Metrocall (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; 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
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<PAGE> 13
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.
SERIES B PREFERRED STOCK
In connection with the acquisition of Page America, Metrocall has agreed to
issue to Page America 1,500 shares of Series B Preferred Stock and additional
shares under certain circumstances. The following summary of the designations,
rights and preferences of the Series B Preferred Stock sets forth the material
terms of the Series B Preferred Stock Metrocall has agreed to issue, but is not
a complete description of its terms. This summary is qualified in its entirety
by reference to the Form of the Certificate of Designation, Number, Powers,
Preferences and Relative, Participating, Optional and Other Rights (the "Series
B Certificate of Designation") of the Series B Preferred Stock, which is an
exhibit to the registration statement of which this Proxy Statement/Prospectus
is a part, and which is incorporated herein by reference.
Each share of Series B Preferred Stock has a Stated Value of $10,000 per
share. Each share has a liquidation preference equal to its Stated Value, which
is junior to the Series A Preferred Stock but senior to shares of Metrocall
Common Stock. The Series B Preferred Stock carries a dividend of 14% of the
Stated Value per year, payable semi-annually in cash or in additional shares of
Series B Preferred Stock, at Metrocall's option. If the stockholders of
Metrocall do not approve the conversion provisions discussed below, the dividend
rate will increase to 17% on July 1, 1997, 18% on October 1, 1997, 19% on
January 1, 1998 and 20% on April 1, 1998, but will revert to 14% at such time as
such stockholder approval is obtained.
Subject to approval of the conversion rights by the holders of Common Stock
of Metrocall, beginning on each of September 1, 1997, December 1, 1997, March 1,
1998 and June 1, 1998, the holders of Series B Preferred Stock have the right to
convert up to 25% of the number of Series B Preferred Stock initially issued
(plus shares of Series B Preferred Stock issued as dividends on such shares, and
as dividends on such dividends) into that number of shares of Common Stock equal
to the Stated Value divided by the average of the closing price of the Metrocall
Common Stock for the 10 trading days prior to each conversion date. The
conversion price will be subject to adjustment based on stock splits, stock
dividends, issuance of securities below current market price and other events.
The Series B Preferred Stock must be redeemed on the twelfth anniversary of
the initial issuance for an amount equal to the Stated Value, plus accrued and
unpaid dividends. The Series B Preferred Stock may also be redeemed by Metrocall
in whole or in part at any time for an amount equal to the Stated Value of the
shares to be redeemed plus accrued and unpaid dividends. If Metrocall elects to
redeem Series B Preferred Stock, the holders thereof will have the right to
convert any Series B Preferred Stock which was then convertible into Metrocall
Common Stock within 15 business days after receipt of notice of redemption.
Metrocall is required to obtain the approval of holders of a majority of
the issued and outstanding Series B Preferred Stock before undertaking: (i) any
changes in the Metrocall Certificate and By-Laws that adversely affects the
rights of the holders of Series B Preferred Stock; and (ii) any changes in the
Series B Certificate of Designation. The Series B Preferred Stock also contains
restrictions on the ability of Metrocall to incur any debt or issue securities
(other than the Series A Preferred Stock) which are senior to the Series B
Preferred Stock.
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<PAGE> 14
WARRANTS
In connection with the issuance of the Series A Preferred Stock, Metrocall
issued on November 15, 1996, Warrants to purchase Metrocall Common Stock. Each
Warrant represents the right of the holder to purchase 18.266 shares of
Metrocall Common Stock, or an aggregate of 2.915 million shares. The exercise
price per share is $7.40. The Warrants contain certain provisions for adjustment
in the exercise price in the event Metrocall sells common stock or rights to
purchase common stock in private transactions for less than 125% of the then
current market price and other customary anti-dilution provisions. The Warrants
expire November 15, 2001. Metrocall has registered under the Securities Act of
1933 the resale of shares that may be obtained upon exercise of the Warrants.
INDEXED VARIABLE COMMON RIGHTS ("VCRS")
In connection with the merger of A+ Network, Inc. into Metrocall, Metrocall
issued approximately 8.1 million indexed variable common rights ("VCRs") to the
shareholders of A+ Network. Each VCR represents the right to receive payment of
up to $5 in Metrocall stock or cash, at Metrocall's option, if the trading price
of Metrocall shares at November 15, 1997, is less than a target price initially
set at $21.10. The target price will be indexed downward, but not above, the
initial target price of $21.10, based on changes in the average trading prices
of Arch Communications Group, Inc., MobileMedia Communications, Inc., and
ProNet, Inc. since the announcement of the A+ Network Merger. If changes in the
index cause the target price to fall below a floor price of $16.10 (which is not
indexed), the VCR payment will be zero regardless of the price at which
Metrocall shares are trading. As of January 31, 1997, the target price was below
$16.10, and no payment on the VCRs would be made if they had expired on that
date. Metrocall has the right to extend the maturity date of the VCRs for an
additional year, in which event the target price and the amount of the potential
VCR payment would increase.
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<PAGE> 15
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of Shares by the Selling Stockholders as of April 4, 1997 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. 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
BENEFICIALLY OWNED WHICH MAY BE SOLD
SELLING STOCKHOLDERS PRIOR TO OFFERING IN THIS OFFERING
- ------------------------------------------------------ ------------------ -----------------
<S> <C> <C>
Leroy Faith, Sr. ..................................... 311,213(1) 311,213(1)
Eddie Ray Faith....................................... 108,924 108,924
Donald Dewayne Faith.................................. 37,071 37,071
Leroy Faith, Jr. ..................................... 37,071 37,071
</TABLE>
- ---------------
(1) Includes an aggregate of 49,428 Shares which are held in escrow pursuant to
the terms of an Escrow Agreement dated as of December 31, 1996 among
Metrocall, the Selling Stockholders, RCC and ACT (the "Escrow Agreement").
Such Shares may not be released from escrow and sold hereunder except in
compliance with all terms and conditions of the Escrow Agreement. The Escrow
Agreement terminates February 5, 1998.
PLAN OF DISTRIBUTION
The Shares offered hereby 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 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 are
eligible to be sold without registration pursuant to Rule 144 under the
Securities Act of 1933. Pursuant to an agreement between the Selling
Stockholders and the Company, the Selling Stockholders may not sell more Shares
pursuant to this Prospectus during any period than they would be permitted to
sell pursuant to the volume limitations set forth in Rule 144.
LEGAL MATTERS
The legality of issuance of the shares will be passed upon for the Company
by Wilmer, Cutler & Pickering, Washington, D.C.
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<PAGE> 16
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.
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<PAGE> 17
======================================================
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
Description of Capital Stock........... 9
Use of Proceeds........................ 14
Selling Stockholders................... 14
Plan of Distribution................... 14
Legal Matters.......................... 14
Experts................................ 15
</TABLE>
======================================================
======================================================
494,279 SHARES
METROCALL, INC.
COMMON STOCK
--------------------
PROSPECTUS
--------------------
April , 1997
======================================================
<PAGE> 18
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................................................... $ 637
Nasdaq Listing Fee................................................. 9,886
Legal Fees and Expenses............................................ 5,000
Accounting Fees and Expenses....................................... 5,000
Printing Fees and Expenses......................................... 5,000
Miscellaneous...................................................... 2,477
-------
Total......................................................... $28,000
</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> 19
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>
2.1 Agreement and Plan of Merger dated as of April 26, 1996, by and between A+
Network, Inc., Radio and Communications Consultants, Inc., Advanced Cellular
Telephone, Inc., Leroy Faith, Sr., Eddie Ray Faith, Donald Dewayne Faith and
Leroy Faith, Jr.(a)
2.2 Amendment to Agreement and Plan of Merger dated as of December 31, 1996, by
and between Metrocall, Inc., Metrocall of Shreveport, Inc., Radio and
Communications Consultants, Inc., Advance Cellular Telephone, Inc., Leroy
Faith, Sr., Eddie Ray Faith, Donald Dewayne Faith and Leroy Faith, Jr.(b)
4.1 Specimen Certificate representing the Metrocall, Inc. Common Stock.(c)
4.2+ Form of Certificate of Designation, Number, Power, Preferences and Relative,
Participating, Optional and Other Rights.
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.
23.5+ Consent of Deloitte & Touche LLP, as independent public accountants for A+
Network, Inc.
23.6+ Consent of Price Waterhouse LLP, as independent public accountants for
Network Paging Corporation.
24 Power of Attorney (included in signature pages of this Registration
Statement).
</TABLE>
- ---------------
+ Exhibit to be filed by amendment.
(a) Incorporated by reference to Metrocall's Registration Statement on Form
S-4, as amended (File No. 333-6919), filed with the Commission on June 26,
1996.
(b) Incorporated by reference to Metrocall's Current Report on Form 8-K (File
No. 000-21924) filed with the Commission on February 24, 1997.
(c) 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:
II-2
<PAGE> 20
(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.
(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> 21
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 APRIL 4, 1997.
METROCALL, INC.
By: /S/ VINCENT D. KELLY
------------------------------------
Name: Vincent D. Kelly
Title: Executive 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
- -------------------------------------- -------------------------------------- ---------------
<S> <C> <C>
/s/ WILLIAM L. COLLINS, III President, Chief Executive Officer and April 4, 1997
- -------------------------------------- Director (Principal Executive Officer)
WILLIAM L. COLLINS, III
/s/ VINCENT D. KELLY Executive Vice President, Chief April 4, 1997
- -------------------------------------- Financial Officer (Principal Financial
VINCENT D. KELLY and Accounting Officer)
/s/ RICHARD M. JOHNSTON Chairman of the Board April 4, 1997
- --------------------------------------
RICHARD M. JOHNSTON
/s/ RONALD V. APRAHAMIAN Director April 4, 1997
- --------------------------------------
RONALD V. APRAHAMIAN
/s/ HARRY L. BROCK, JR. Director April 4, 1997
- --------------------------------------
HARRY L. BROCK, JR.
/s/ SUZANNE S. BROCK Director April 4, 1997
- --------------------------------------
SUZANNE S. BROCK
/s/ FRANCIS A. MARTIN, III Director April 4, 1997
- --------------------------------------
FRANCIS A. MARTIN, III
/s/ RYAL R. POPPA Director April 4, 1997
- --------------------------------------
RYAL R. POPPA
/s/ RAY D. RUSSENBERGER Director April 4, 1997
- --------------------------------------
RAY D. RUSSENBERGER
/s/ ELLIOTT H. SINGER Director April 4, 1997
- --------------------------------------
ELLIOTT H. SINGER
/s/ MICHAEL GREENE Director April 4, 1997
- --------------------------------------
MICHAEL GREENE
</TABLE>
II-4
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- -------------------------------------------------------------------------- --------
<C> <S> <C>
2.1 Agreement and Plan of Merger dated as of April 26, 1996, by and between A+
Network, Inc., Radio and Communications Consultants, Inc., Advanced
Cellular Telephone, Inc., Leroy Faith, Sr., Eddie Ray Faith, Donald
Dewayne Faith and Leroy Faith, Jr.(a).....................................
2.2 Amendment to Agreement and Plan of Merger dated as of December 31, 1996,
by and between Metrocall, Inc., Metrocall of Shreveport, Inc., Radio and
Communications Consultants, Inc., Advanced Cellular Telephone, Inc., Leroy
Faith, Sr., Eddie Ray Faith, Donald Dewayne Faith, Leroy Faith, Jr. and
Daniel R. Lozier.(b)......................................................
4.1 Specimen Certificate representing the Metrocall, Inc. Common Stock.(c)....
4.2+ Form of Certificate of Designation, Number, Power, Preferences and
Relative, Participating, Optional and Other Rights of Metrocall, Inc.
Series B Junior Convertible Preferred Stock. .............................
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...................................................
23.5+ Consent of Deloitte & Touche LLP, as independent public accountants for A+
Network, Inc..............................................................
23.6+ Consent of Price Waterhouse LLP, as independent public accountants for
Network Paging Corporation................................................
24 Power of Attorney (included in signature pages of this Registration
Statement)................................................................
</TABLE>
- ---------------
+ Exhibit to be filed by amendment.
(a) Incorporated by reference to Metrocall's Registration Statement on Form
S-4, as amended (File No. 333-6919), filed with the Commission on June 26,
1996.
(b) Incorporated by reference to Metrocall's Current Report on Form 8-K (File
No. 000-21924) filed with the Commission on February 24, 1997.
(c) 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 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 13,
1997 included in Metrocall, Inc.'s Form 10-K for the year ended December 31,
1996 and to all references to our Firm included in or made a part of this
registration statement filed on Form S-3.
ARTHUR ANDERSEN LLP
Washington, D.C.
April 3, 1997
<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 filed on October 1, 1996, 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.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
April 3, 1997
<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 filed on October 1, 1996, of Metrocall, Inc. We also
consent to the references to us under the heading "Experts" in such Prospectus.
Hutton, Patterson & Company
Dallas, Texas
April 4, 1997
