<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Metrocall, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[METROCALL LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 6, 1998
To the Stockholders of Metrocall, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders (the
"Annual Meeting") of Metrocall, Inc. ("Metrocall") will be held at the
Ritz-Carlton, Pentagon City located at 1250 South Hayes Street, Arlington,
Virginia on May 6, 1998, at 9:00 a.m., Eastern Daylight Savings Time, to
consider and act upon the following proposals:
1. To elect four directors, each for a three-year term (Proposal One);
2. To ratify the appointment by the Board of Directors of the firm of
Arthur Andersen LLP as independent public accountants of Metrocall for the
fiscal year ending December 31, 1998 (Proposal Two);
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Pursuant to Metrocall's Bylaws, the Board of Directors has fixed the close
of business on March 13, 1998, as the record date for the Annual Meeting. Only
holders of record of Metrocall Common Stock at the close of business on that
date will be entitled to notice of and to vote at the Annual Meeting or any
adjournments or postponements thereof.
By Order of the Board of Directors
/s/ RICHARD M. JOHNSTON
Richard M. Johnston
Chairman of the Board
Alexandria, Virginia,
April 16, 1998
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE DATE, SIGN
AND COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 3
METROCALL, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF METROCALL STOCKHOLDERS
TO BE HELD ON MAY 6, 1998
INTRODUCTORY STATEMENT
This Proxy Statement is being furnished to the stockholders of Metrocall,
Inc., a Delaware corporation ("Metrocall" or the "Company"), as part of the
solicitation of proxies by its board of directors (the "Board of Directors" or
the "Board") from holders of the outstanding shares of Metrocall common stock,
par value $.01 per share ("Common Stock" or "Metrocall Common Stock"), for use
at the Annual Meeting of Stockholders of Metrocall to be held on May 6, 1998,
and at any adjournments thereof ("Annual Meeting") at the Ritz-Carlton, Pentagon
City, 1250 South Hayes Street, Arlington, Virginia at 9:00 a.m., Eastern
Daylight Savings Time. At the Annual Meeting, stockholders will be asked to
elect four members of the Board of Directors (Proposal One); ratify the
appointment by the Board of Directors of Arthur Andersen LLP as independent
public accountants for the fiscal year ending December 31, 1998 (Proposal Two);
and to transact such other business as may properly come before the meeting or
any adjournments thereof. This Proxy Statement, together with the enclosed proxy
card, is first being mailed to stockholders of Metrocall on or about April 17,
1998.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
Each outstanding share of Common Stock is entitled to one vote on all
matters as to which a vote is taken at the Annual Meeting. The close of business
on March 13, 1998, has been fixed by the Board of Directors of Metrocall as the
record date (the "Record Date") for determination of stockholders entitled to
vote at the Annual Meeting. The number of shares of Common Stock outstanding on
the Record Date was 39,455,364. The presence, in person or by proxy, of at least
a majority of the shares of Common Stock outstanding on the Record Date
(19,727,683 shares) is necessary to constitute a quorum at the Annual Meeting.
Abstentions and broker non-votes will be treated as shares that are present and
entitled to vote for purposes of determining a quorum. Directors are elected
(Proposal One) by a plurality of the votes of shares present (in person or by
proxy) and entitled to vote. Proposal Two (Ratification of Independent Public
Accountants) will be approved if the votes cast in favor of the proposal exceed
the votes cast in opposition to the proposal. Abstentions and broker non-votes
with regard to Proposals One and Two will have no effect on the outcome.
All proxies in the enclosed form of proxy that are properly executed and
returned to Metrocall prior to commencement of voting at the Annual Meeting will
be voted at the Annual Meeting or any adjournments or postponements thereof in
accordance with the instructions thereon. Executed but unmarked proxies will be
voted FOR all proposals set forth in this Proxy Statement. Any proxy may be
revoked by any stockholder who attends the Annual Meeting and gives notice of
his or her intention to vote in person without compliance with any other
formalities. In addition, any Metrocall stockholder may revoke a proxy at any
time before it is voted by executing and delivering a subsequent proxy or by
delivering a written notice to the Secretary of Metrocall stating that the proxy
is revoked. At the Annual Meeting, stockholder votes will be tabulated by
persons appointed by the Board of Directors to act as inspectors of election.
The Board of Directors does not know of any matters other than those set
forth herein which may come before the Annual Meeting. If any other matters are
properly presented at the Annual Meeting for action, it is intended that the
persons named in the applicable form of proxy will vote in accordance with their
best judgment on such matters.
The expense of printing this Proxy Statement and the proxies solicited
hereby will be paid by Metrocall. In addition to the use of the mails, proxies
may be solicited by officers and directors and regular employees of Metrocall,
without additional remuneration, by personal interviews, telephone, telegraph or
otherwise. Metrocall may also request brokerage firms, nominees, custodians and
fiduciaries to forward proxy materials to beneficial owners of shares of
Metrocall Common Stock and will provide reimbursement for the cost of forwarding
the material in accordance with customary charges. Metrocall has retained
Corporate Investor Communications, Inc., at an estimated cost of $6,000, plus
reimbursement of expenses, to assist in its solicitation of proxies from
brokers, nominees, institutions and individuals.
---------------------
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF
ALL PROPOSALS SET FORTH IN THIS PROXY STATEMENT.
---------------------
<PAGE> 4
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of March 13, 1998,
regarding beneficial ownership of Common Stock by (i) each person who is known
to Metrocall to own more than 5% of Common Stock, (ii) each director and
executive officer of Metrocall and (iii) all directors and executive officers as
a group. The information on beneficial ownership in the table and the footnotes
thereto is based upon Metrocall's records and the most recent Schedule 13D or
13G filed by each such person or entity. Unless otherwise indicated, each person
has sole voting power and sole investment power with respect to the shares
shown.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
BENEFICIALLY COMMON STOCK
NAME OWNED(a) OUTSTANDING
---- ---------------- ------------
<S> <C> <C>
Richard M. Johnston, Chairman of the Board and
Director 54,305(b) *
William L. Collins, III, President, Chief Executive
Officer, Vice Chairman of the Board and Director 471,503(c) 1.2%
Vincent D. Kelly, Chief Financial Officer, Treasurer
and Executive Vice President 281,588(d) *
Steven D. Jacoby, Chief Operating Officer
and Executive Vice President 182,079(e) *
Ronald V. Aprahamian, Director 88,000(f) *
Harry L. Brock, Jr., Director 3,672,710(g) 9.3%
Suzanne S. Brock, Director 205,000(h) *
Michael Greene, Director 2,074,019(i) 5.1%
Max D. Hopper, Director 18,000(j) *
Edward E. Jungerman, Director 21,150(k) *
Jackie R. Kimzey, Director 315,165(l) *
Francis A. Martin, III, Director 70,000(m) *
Ryal R. Poppa, Director 26,000(n) *
Ray D. Russenberger, Director 2,166,107(o) 5.5%
Elliott H. Singer, Director 1,022,215(p) 2.6%
Royce R. Yudkoff, Director 27,061(q) *
All directors and executive officers as a group (16
persons) 10,694,902(r) 25.7%
Page America Group, Inc.
125 State Street, Suite 100
Hackensack, NJ 07601 5,423,621(s) 13.2%
UBS Capital LLC 2,074,019(t) 5.1%
299 Park Avenue
New York, NY 10171
</TABLE>
- ---------------
* Less than 1%.
(a) Under the rules of the Securities and Exchange Commission (the
"Commission"), a person who directly or indirectly has or shares voting
power or investment power with respect to a security is considered a
beneficial owner of the security. Voting power is the power to vote or
direct the voting of shares, and investment power is the power to dispose of
or direct the disposition of shares. Shares as to which voting power or
investment power may be acquired within 60 days are also considered as
beneficially owned under the Commission's rules.
(b) Includes 54,000 shares of Common Stock issuable upon the exercise of
options granted under the Company's stock option plans.
(c) Includes 19,396 shares owned of record by USA Telecommunications, Inc.
("USATel"); 305 shares owned by William L. Collins, Jr.; and 111,846 shares
issuable upon the exercise of options.
(d) Includes 206,588 shares issuable upon the exercise of options granted under
the Company's stock option plans.
2
<PAGE> 5
(e) Includes 988 shares owned of record by USATel; and 109,477 shares issuable
upon the exercise of options.
(f) Includes 18,000 shares of Common Stock issuable upon exercise of options
granted under the Company's stock option plans.
(g) Excludes 200,000 shares of Common Stock held of record by Suzanne S. Brock,
Mr. Brock's wife, of which Mr. Brock disclaims beneficial ownership.
Includes 127,510 shares issuable upon exercise of options granted under the
Company's stock option plans.
(h) Excludes 3,545,200 shares of Common Stock held of record by Harry L.
Brock, Jr., Ms. Brock's husband, of which Ms. Brock disclaims beneficial
ownership. Includes 5,000 shares issuable upon exercise of options granted
under the Company's stock option plans.
(i) Includes 970,365 shares held by UBS Capital LLC, of which Mr. Greene is a
Managing Director. Also includes 1,088,654 shares of Common Stock that may
be acquired upon exercise of warrants held by UBS Capital LLC and 15,000
shares of Common Stock issuable upon exercise of options granted under the
Company's stock options plans.
(j) Includes 9,000 shares of Common Stock issuable upon exercise of options
granted under the Company's stock option plans.
(k) Includes 20,250 shares of Common Stock issuable upon exercise of options
granted under the Company's stock option plans.
(l) Includes 220,500 shares of Common Stock issuable upon exercise of options
granted under the Company's stock option plans and 54,900 shares owned of
record by certain members of Mr. Kimzey's family.
(m) Includes 20,000 shares of Common Stock issuable upon exercise of options
granted under the Company's stock option plans.
(n) Includes 16,000 shares of Common Stock issuable upon exercise of options
granted under the Company's stock option plans.
(o) Includes 15,000 shares of Common Stock issuable upon exercise of options
granted under the Company's stock option plans.
(p) Includes 156,452 shares of Common Stock issuable upon exercise of options
granted under the Company's stock options plans.
(q) Includes 15,000 shares of Common Stock issuable upon exercise of options
granted under the Company's stock option plans.
(r) Includes an aggregate of 1,119,623 shares of Common Stock issuable upon the
exercise of options granted under the Company's stock option plans;
1,088,654 shares issuable upon exercise of warrants held by UBS Capital
LLC; and 1,045,954 shares through beneficial ownership.
(s) Includes 3,633,556 shares of Common Stock issued in the Company's
acquisition of substantially all the assets of Page America Group, Inc.
("Page America") in July 1997. Also, includes 1,790,065 shares of Common
Stock issuable upon conversion of certain Series B Junior Convertible
Preferred Stock ("Series B Preferred") with a stated value of approximately
$11.3 million. Excludes shares of Common Stock which may be issued for
Series B Preferred which are not currently convertible with a stated value
of $3.7 million. The holders of Series B Preferred have the right to
convert up to 25% of the number of Series B Preferred shares originally
issued (plus dividends, and dividends on such dividends) into shares of
Common Stock at the current market value, as defined, on September 1, 1997,
December 1, 1997, March 1, 1998 and June 1, 1998.
3
<PAGE> 6
(t) Includes 1,088,654 shares of Common Stock that may be acquired upon
exercise of warrants and 15,000 shares of Common Stock issuable upon
exercise of options granted under the Company's stock option plans.
ELECTION OF DIRECTORS
(PROPOSAL ONE)
The Bylaws of Metrocall provide that the number of directors shall not be
fewer than three nor more than 14, unless certain events have occurred and are
continuing that give the holders of the Company's Series A Convertible Preferred
Stock ("Series A Preferred") the power to elect additional directors. The Board
of Directors by resolution has established the number of directors to be 14. Two
of the directors are designated by the holders of the Series A Preferred. Under
the Company's Amended and Restated Certificate of Incorporation, as amended, the
twelve directors elected by the Common Stock are divided into three classes that
are to be as nearly equal in number as possible. The term of office of only one
class of directors expires in each year, and their successors are elected for
terms of three years and until new successors are elected and qualified. The
class of directors whose term of office expires this year has four members. At
the Annual Meeting, four directors will be elected to the Board of Directors,
each for a three-year term, to fill those seats on the Board.
It is the intention of the persons named in the proxy to vote the shares
represented by each properly executed proxy for the election as directors of the
persons named below as nominees. The Board of Directors believes that the
nominees will stand for election and will serve if elected as directors.
However, if any of the persons nominated by the Board of Directors fails to
stand for election or will be unable to accept election, the proxies will be
voted for the election of such other person or persons as the Board of Directors
may recommend.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth the names of the Board of Directors'
nominees for election as directors and those directors who will continue to
serve after the Annual Meeting. Also set forth is certain other information,
with respect to each such person's age at March 13, 1998, principal occupation
or employment during the past five years, the periods during which he or she has
served as a director and positions currently held with Metrocall.
<TABLE>
<CAPTION>
DIRECTOR EXPIRATION POSITIONS HELD
NOMINEES FOR A THREE-YEAR TERM AGE SINCE OF TERM WITH METROCALL
- ------------------------------ --- -------- ---------- --------------
<S> <C> <C> <C> <C>
Ronald V. Aprahamian 51 1995 1998 Director
Ryal R. Poppa 64 1996 1998 Director
Elliott H. Singer 57 1996 1998 Director
Max D. Hopper 63 1997 1998 Director
CONTINUING DIRECTORS
Harry L. Brock, Jr. 62 1982 1999 Director
Richard M. Johnston 63 1994 1999 Chairman of the Board
Ray D. Russenberger 43 1996 1999 Director
Jackie R. Kimzey 45 1997 1999 Director
Michael Greene 36 1997 1999 Director
Royce R. Yudkoff 42 1997 1999 Director
Suzanne S. Brock 59 1982 2000 Director
William L. Collins, III 47 1994 2000 President, Chief Executive
Officer, Director and
Vice Chairman of the
Board
Francis A. Martin, III 54 1994 2000 Director
Edward E. Jungerman 55 1997 2000 Director
</TABLE>
4
<PAGE> 7
The holders of Series A Preferred have the right to designate two directors
of Metrocall. Michael Greene and Royce R. Yudkoff have been designated by such
holders.
Set forth below is certain biographical information regarding the directors
of the Company.
NOMINEES FOR A THREE-YEAR TERM
Ronald V. Aprahamian is a private investor and has been a member of the
Board of Directors of Metrocall since May 1995. Mr. Aprahamian 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. During 1997, Mr.
Aprahamian's son, Thomas J. Aprahamian, was Vice President of Financial
Reporting of Metrocall and received an annual salary of approximately $93,000.
Ryal R. Poppa is a private investor and has been a director 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 Carrier Access, Inc.
and is Chairman of the Board of Redcape, Inc.
Elliott H. Singer has been a director of Metrocall since November 1996. Mr.
Singer was Chairman of the Board of A+ Communications, Inc. from its formation
in 1985 and was chairman of A+ Network Inc. ("A+ Network") from October 1995
until its merger with Metrocall 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.
Max D. Hopper has been a director of Metrocall since December 1997. Mr.
Hopper was a director of ProNet Inc. ("ProNet") from May 1997 until ProNet's
merger with Metrocall in December 1997. Since 1995, Mr. Hopper has been the
President of Max D. Hopper Associates, a consulting firm that specializes in
creating benefits for the strategic use of advanced information technologies.
Prior to 1995, Mr. Hopper spent 20 years in several positions with AMR
Corporation, American Airlines' parent company. Mr. Hopper is also a director
for Gartner Group, Inc., Scopus Technology, Inc., USDATA Corporation, VTEL
Corporation, Worldtalk Corporation and Payless Cashways, Inc. Mr. Hopper was
elected to the Board of Directors pursuant to Metrocall's merger agreement with
ProNet.
CONTINUING DIRECTORS
Harry L. Brock, Jr. founded Metrocall and served as Chairman of the Board
(through January 1996) and President (through August 1995). Mr. Brock has been 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. Since 1970, Mr. Johnston has been Vice
President-Investments of The Hillman Company and a director of Hillman Company
since 1994. Mr. Johnston serves on the board of directors of Novoste
Corporation.
Ray D. Russenberger has been a director of Metrocall since November 1996.
Mr. Russenberger was Vice Chairman of A+ Network, Inc. ("A+ Network") from
October 1995 through the merger of A+ Network into Metrocall in November 1996.
He served as Chairman of the Board and Chief Executive Officer of Network Paging
Corporation ("Network") (which was merged with A+ Communications, Inc. in 1995
to form A+ Network) since December 1988. From 1985 to 1990, he founded and was
President of Network Paging Corporation, a paging company sold to Mobile
Communications Corporation of America, a wholly-owned subsidiary of BellSouth
Corporation, in 1990. Mr. Russenberger was elected to the Board of Directors
pursuant to the Company's merger agreement with A+ Network. Mr. Russenberger
serves on the board of directors of First American Bank of Pensacola and is
President of Marina Management.
5
<PAGE> 8
Jackie R. Kimzey has been a director of Metrocall since December 1997. Mr.
Kimzey was a founder and director of ProNet from 1983. He was Chairman of the
Board of ProNet from March 1990 and its Chief Executive Officer from May 1983
until the merger of ProNet with Metrocall in December 1997. Mr. Kimzey served as
President of ProNet from May 1983 until May 1991. Mr. Kimzey was elected to the
Board of Directors pursuant to Metrocall's merger agreement with ProNet.
Michael Greene has been a director of Metrocall since January 1997. He is a
Managing Director of UBS Capital LLC, which is the private equity subsidiary of
the Union Bank of Switzerland ("UBS"). Mr. Greene has worked in UBS' private
equity and leveraged finance businesses since he joined UBS in 1990. Mr. Greene
serves on the board of directors of CBP Resources Inc.
Royce R. Yudkoff has been a director of Metrocall since April 1997. Mr.
Yudkoff is the Managing Partner of ABRY Partners, Inc., a private equity
investment firm which invests in the communications and media industries. Prior
to co-founding ABRY in 1988, Mr. Yudkoff was a partner at Bain & Company
("Bain"), an international management consulting firm where he had significant
responsibility for Bain's media practice. Mr. Yudkoff serves on the board of
directors of Sullivan Broadcasting Company, Pinnacle Towers and several other
private companies.
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 company.
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 Media Holdings,
Inc. Mr. Martin previously served as President and Chief Executive Officer of
Chronicle Broadcasting Company, a publicly-held television broadcasting company.
Edward E. Jungerman has been a director of Metrocall since December 1997.
Mr. Jungerman was a director of ProNet from May 1992 until the merger of ProNet
with Metrocall in December 1997. He has been President of Impulse
Telecommunications Corporation, a strategic telecommunications consulting firm,
since 1986. Mr. Jungerman has over 25 years experience in the telecommunications
field, including senior executive positions at Northern Telecom, Inc. and
private, start-up ventures in the specialized advanced telecommunications
services field. Mr. Jungerman was elected to the Board of Directors pursuant to
Metrocall's merger agreement with ProNet.
CORPORATE GOVERNANCE AND OTHER MATTERS
The Board of Directors of the Company acts as nominating committee for
selecting nominees for election as directors. Metrocall's Bylaws permit
stockholders eligible to vote for the election of directors at the Annual
Meeting to make nominations for directors but only if such nominations are made
pursuant to timely notice in writing to the Secretary of Metrocall. The Bylaws
also permit stockholders to propose other business to be brought before an
annual meeting, provided that such proposals are made pursuant to timely notice
in writing to the Secretary of Metrocall. To be timely, notice must be received
at the principal executive offices of Metrocall no later than the date
designated for receipt of stockholder proposals in a prior public disclosure
made by Metrocall. For the 1999 Annual Meeting, such proposals must be received
by Metrocall no later than the date specified in this Proxy Statement for
stockholder proposals, which is November 30, 1998.
The Board of Directors of Metrocall has appointed an Audit Committee to
review the scope of the independent annual audit, the independent public
accountants' letter to the Board of Directors concerning the effectiveness of
Metrocall's internal financial and accounting controls and the Board of
Directors' response to
6
<PAGE> 9
that letter, if deemed necessary. Compensation matters are considered by the
Compensation Committee of Metrocall. At March 13, 1998, Ms. Brock and Messrs.
Poppa, Aprahamian, Russenberger and Hopper were members of the Audit Committee
and Messrs. Martin, Greene, Singer, Yudkoff and Jungerman were members of the
Compensation Committee. The Audit and Compensation Committees each held 2 and 5
meetings, respectively, during 1997.
During the fiscal year ended December 31, 1997, Metrocall held four regular
and 7 special meetings of the Board of Directors. No directors attended fewer
than 75% of the meetings of the Board of Directors and the committees of the
Board on which each director served.
COMPENSATION OF DIRECTORS
Directors who are full-time officers of Metrocall receive no additional
compensation for serving on the Board of Directors or its committees. Directors
who are not full-time officers of Metrocall receive an annual fee of $15,000,
plus $2,000 for each regular board meeting attended and $1,000 for each special
board or committee meeting attended (other than a committee meeting that occurs
on the same day as an otherwise scheduled board meeting). Pursuant to a special
agreement, Mr. Johnston receives compensation of $30,000 per year, in addition
to $5,000 for each Board meeting attended and $1,000 for each committee or
special meeting attended. Directors are reimbursed for travel costs and other
out-of-pocket expenses incurred in attending meetings.
The Metrocall, Inc. 1996 Stock Option Plan, as amended, (the "1996 Plan")
provides for formula grants of stock options to directors who have never been
officers or employees of the Company ("Eligible Directors"). Pursuant to the
Plan, all Eligible Directors on April 5, 1996 were granted an initial option to
purchase 10,000 shares of Common Stock. Every Eligible Director who commences
service thereafter will be granted an initial option to purchase 10,000 shares
of Common Stock at the time such Eligible Director commences service on the
Board of Directors. Subsequently, each Eligible Director who received an initial
grant of an option will receive an additional option to purchase 1,000 shares of
Common Stock on each anniversary of the initial option, provided that the
director continues to be an Eligible Director on each anniversary date. Options
granted to Eligible Directors will become fully vested six months after the date
of grant. The exercise price for options granted to Eligible Directors will be
the fair market value of the Common Stock on the date the option is granted or
the date of initial shareholder approval of the Plan, if later. During 1997,
nonemployee directors were granted options to purchase 138,000 shares of Common
Stock at prices ranging from $4.50 per share to $6.4375 per share.
At its meeting on February 4, 1997, the Board of Directors approved a
repricing of all outstanding director stock options to $6.00 per share (other
than those with a lower exercise price).
EXECUTIVE OFFICERS
Executive officers of Metrocall serve at the pleasure of the Board of
Directors, subject to the provisions of their employment agreements.
The executive officers of Metrocall, their ages as of March 13, 1998, and
their position(s) with Metrocall are set forth below.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
William L. Collins III............... 47 President and Chief Executive Officer
Vincent D. Kelly..................... 38 Chief Financial Officer, Treasurer, and
Executive Vice President
Steven D. Jacoby..................... 40 Chief Operating Officer and Executive Vice
President
</TABLE>
Set forth below is certain biographical information concerning individuals
listed in the above table.
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,
7
<PAGE> 10
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.
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, and was appointed Executive Vice President in February 1997. Mr.
Kelly served as Chief Operating Officer and Chief Financial Officer of Metrocall
from February 1993 through August 31, 1994, when Metrocall acquired FirstPAGE
USA, Inc. Mr. Kelly was a director of Metrocall from 1990 until November 1996.
Mr. Kelly is a certified public accountant.
Steven D. Jacoby has been Chief Operating Officer and Vice President of
Metrocall since September 1994. Mr. Jacoby was appointed Executive Vice
President in February 1997. Mr. Jacoby joined Metrocall from FirstPAGE USA, Inc.
where he had served as Chief Operating Officer, Vice President and Secretary
since 1988. Mr. Jacoby was a director of Metrocall from September 1994 until
November 1996.
8
<PAGE> 11
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of all compensation during the
last three fiscal years for Metrocall's chief executive officer and each of
Metrocall's executive officers whose aggregate annual salary and bonus exceeded
$100,000 for the year ended December 31, 1997 and certain former officers of
Metrocall (the "named executive officers").
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
FOR THE ------------------------------------ LONG TERM
YEAR OTHER COMPENSATION
NAME AND ENDED ANNUAL -------------- ALL OTHER
PRINCIPAL POSITION DECEMBER 31 SALARY BONUS COMPENSATION OPTIONS COMPENSATION
- -------------------------- ------------- -------- -------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
William L. CollinsIII(a).. 1997 $372,690 $300,000 $ 200,000(d) $ 35,000(f)
President, Chief 1996 288,696 75,000 -- 100,000 35,000(f)
Executive Officer 1995 68,365 54,640 68,364(c) -- --
(effective January
1996), Director and
Vice Chairman of the
Board
Vincent D. Kelly.......... 1997 249,230 212,500 -- 256,588(d) 688(g)
Chief Financial Officer, 1996 224,711 100,000 -- 206,588(e) 2,375(g)
Treasurer and 1995 209,807 72,860 -- 50,000 1,656(g)
Executive Vice
President
Steven D. Jacoby(b)....... 1997 249,230 212,500 -- 150,000(d) 688(g)
Chief Operating Officer 1996 224,711 100,000 -- 100,000(e) 1,425(g)
and Executive Vice 1995 209,807 72,860 -- 50,000 1,099(g)
President
Harry L. Brock, Jr. ...... 1997 140,362 -- -- 127,510(d) --
Former Chairman of the 1996 206,175 -- -- 122,510(e) --
Board and President 1995 273,450 109,280 -- 10,000 --
</TABLE>
- ---------------
(a) Mr. Collins became employed by the Company effective August 31, 1994, as a
result of the merger between the Company and FirstPAGE USA, Inc. (the
"FirstPAGE Merger"). Mr. Collins became Chief Executive Officer in January
1996.
(b) Mr. Jacoby became employed by the Company effective August 31, 1994, as a
result of the FirstPAGE Merger.
(c) Payments under a non-competition agreement entered into with the Company on
August 31, 1994.
(d) Includes options granted in previous years that were repriced during 1997 as
follows: Mr. Collins, 100,000 options; Mr. Kelly, 206,588 options; Mr.
Jacoby, 100,000 options; Mr. Brock, 122,510 options.
(e) Includes options granted in previous years that were repriced during 1996 as
follows: Mr. Kelly, 156,588 options; Mr. Jacoby, 50,000 options; Mr. Brock,
122,510 options.
(f) Payments by the Company for life insurance premiums pursuant to Mr. Collins'
employment contract.
(g) Allocation of employer contribution under the Metrocall, Inc. Savings and
Retirement Plan (the "Savings Plan").
9
<PAGE> 12
OPTION GRANTS IN 1997
The following table sets forth information concerning grants of stock
options, during the fiscal year ended December 31, 1997 to each of the named
executive officers.
<TABLE>
<CAPTION>
% OF TOTAL POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SHARES ANNUAL RATES OF
NUMBER UNDERLYING STOCK PRICE
OF SHARES OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME GRANTED(a) FISCAL YEAR (%) ($/SH) DATE 5% ($) 10% ($)
---- ---------- ---------------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
William L. Collins, III..... 100,000 14.6% $6.00 2/4/07 377,337 956,245
Vincent D. Kelly............ 50,000 7.3 6.00 2/4/07 188,668 478,123
Steven D. Jacoby............ 50,000 7.3 6.00 2/4/07 188,668 478,123
Harry L. Brock, Jr. ........ 5,000 0.7 6.00 2/4/07 18,867 47,812
</TABLE>
- ---------------
(a) Options granted to Messrs. Collins, Kelly and Jacoby become exercisable on
February 4, 1999, two years from the date of grant.
AGGREGATE OPTION EXERCISES IN 1997 AND OPTION YEAR-END VALUE
The following table sets forth the fiscal year-end value of all unexercised
options held by named executive officers. No named executive officer exercised
any stock options during the fiscal year.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1997 DECEMBER 31, 1997
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
William L. Collins III................... 11,846/200,000 $46,299/$--
Vincent D. Kelly......................... 156,588/100,000 --/--
Steven D. Jacoby......................... 59,477/100,000 36,984/--
Harry L. Brock, Jr. ..................... 127,510/-- --/--
</TABLE>
10
<PAGE> 13
REPRICING OF OPTIONS
The following table sets forth information concerning the repricing of
options granted to named executive officers during the period ended December 31,
1997.
TEN-YEAR OPTIONS/SAR REPRICING
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET EXERCISE OPTION
UNDERLYING PRICE OF PRICE AT TERM
REPRICED OR STOCK AT TIME OF REMAINING
AMENDED TIME OF REPRICING OR NEW AT TIME OF
OPTIONS REPRICING AMENDMENT EXERCISE REPRICING OR
NAME DATE (#) ($) ($) PRICE ($) AMENDMENT
---- ------- ----------- --------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
William L. Collins, III................... 2/4/97 100,000 $ 6.00 $ 7.9375 $ 6.00 107 months
President, Chief Executive Officer and
Vice
Chairman of the Board 9/18/96 100,000 $ 7.9375 $19.125 $ 7.9375 112 months
Vincent D. Kelly.......................... 2/4/97 72,000 $ 6.00 $ 7.9375 $ 6.00 81 months
Chief Financial Officer, Treasurer and 34,588 $ 6.00 $ 7.9375 $ 6.00 87 months
Executive Vice President 50,000 $ 6.00 $ 7.9375 $ 6.00 101 months
25,000 $ 6.00 $ 7.9375 $ 6.00 107 months
25,000 $ 6.00 $ 7.9375 $ 6.00 108 months
9/18/96 72,000 $ 7.9375 $19.50 $ 7.9375 86 months
34,588 $ 7.9375 $13.00 $ 7.9375 92 months
50,000 $ 7.9375 $19.125 $ 7.9375 106 months
25,000 $ 7.9375 $19.125 $ 7.9375 112 months
25,000 $ 7.9375 $20.25 $ 7.9375 113 months
1/16/96 50,000 $19.125 $20.25 $19.125 114 months
Steven D. Jacoby.......................... 2/4/97 50,000 $ 6.00 $ 7.9375 $ 6.00 101 months
Chief Operating Officer, and Executive 25,000 $ 6.00 $ 7.9375 $ 6.00 107 months
Vice President 25,000 $ 6.00 $ 7.9375 $ 6.00 108 months
9/18/96 50,000 $ 7.9375 $19.125 $ 7.9375 106 months
25,000 $ 7.9375 $19.125 $ 7.9375 112 months
25,000 $ 7.9375 $20.25 $ 7.9375 113 months
1/16/96 50,000 $19.125 $20.25 $19.125 114 months
Harry L. Brock, Jr........................ 2/4/97 76,000 $ 6.00 $ 7.9375 $ 6.00 81 months
Former Chairman of the Board and 36,510 $ 6.00 $ 7.9375 $ 6.00 87 months
President 10,000 $ 6.00 $ 7.9375 $ 6.00 101 months
9/18/96 76,000 $ 7.9375 $19.50 $ 7.9375 86 months
36,510 $ 7.9375 $13.00 $ 7.9375 92 months
10,000 $ 7.9375 $20.25 $ 7.9375 106 months
</TABLE>
For a discussion of the decision by the Compensation Committee to reprice
the options, see "Compensation Committee Report on Executive Compensation"
below.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
Mr. Collins' employment is governed by a three-year contract dated May 15,
1996, whereby Mr. Collins agreed to serve as President, Chief Executive Officer,
Director and Vice Chairman of the Board of Directors. The May 15, 1996 contract
provided for an annual base salary of $300,000 plus certain life insurance
premiums incurred by Mr. Collins. Effective January 1, 1997, the May 15, 1996
contract was amended to increase Mr. Collins' annual base salary from $300,000
to $375,000 plus a targeted bonus equal to fifty percent of Mr. Collins' annual
base salary. The contract provides for automatic one-year extensions on
anniversaries of May 15.
11
<PAGE> 14
Mr. Kelly's employment is governed by a three-year contract dated May 15,
1996, whereby Mr. Kelly agreed to serve as Chief Financial Officer and
Treasurer. The May 15, 1996 contract provided for an annual base salary of
$225,000. Effective January 1, 1997, the May 15, 1996 contract was amended to
increase Mr. Kelly's annual base salary from $225,000 to $250,000 plus a
targeted bonus equal to fifty percent of Mr. Kelly's annual base salary. The
contract provides for automatic one-year extensions on anniversaries of May 15.
Mr. Jacoby's employment is governed by a three-year contract dated May 15,
1996, whereby Mr. Jacoby agreed to serve as Chief Operating Officer. The May 15,
1996 contract provided for an annual base salary of $225,000. Effective January
1, 1997, the May 15, 1996 contract was amended to increase Mr. Jacoby's annual
base salary from $225,000 to $250,000 plus a targeted bonus equal to fifty
percent of Mr. Jacoby's annual base salary. The contract provides for automatic
one-year extensions on anniversaries of May 15.
The contract provisions regarding termination of employment are described
below.
Termination of Employment Contract Provisions for Messrs. Collins, Jacoby
and Kelly. 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 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.
Change of Control Agreements for Messrs. Collins, Jacoby and Kelly. 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). Each such contract has been
automatically extended through December 31, 2001. 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) 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
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).
12
<PAGE> 15
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive Compensation Philosophy. Metrocall's philosophy regarding
executive compensation is to offer competitive and fair compensation that will
attract and retain key executives, and to reward executives and hold them
accountable for Metrocall's overall performance. Particular factors that the
Compensation Committee believes important in assessing performance are growth in
revenues, cash flow, number of pagers in service, on an annual basis, and, on a
longer term basis, growth in stockholder value as measured by stock price. In
establishing appropriate levels for base salary, the Compensation Committee
considered base salary levels of senior executives at other public paging and
other wireless companies, particularly in the peer group described in the
performance graph below ("Peer Group") and the particular officer's overall
contributions to Metrocall during the past year and previously. Annual
performance bonuses are based upon the Compensation Committee's evaluation of
the executive's performance in achieving corporate objectives during the
preceding fiscal year. Option grants are designed to reward an executive officer
for his or her overall contribution to Metrocall and to serve as an incentive to
achieve Metrocall's goal of increasing stockholder value.
Base Salary. In determining the appropriate level of base salaries, the
Compensation Committee considers responsibility, prior experience and
accomplishments and the relative importance of the position in achieving Company
objectives. The Compensation Committee also sets base salaries at levels
necessary to retain key employees. For this purpose, the Compensation Committee
considers base salary levels paid by companies in the Peer Group and salary
levels paid by other companies competing for executive talent.
Bonuses. Bonuses for 1997 were based on the Compensation Committee's
overall qualitative evaluation of the performance and accomplishments of the
executive officers for the year. Among the factors considered were the Company's
growth in revenues, cash flow and subscribers; successful completion of the
Company's second offering of senior subordinated notes; delivery of the merger
agreement between the Company and ProNet to the Board of Directors and the
successful integration during 1997 of acquisitions completed in 1996. Messrs.
Collins, Jacoby and Kelly's bonuses were based on their overall contribution to
the Company and a general assessment of the Company's performance for the year.
Stock Option Grants. The Compensation Committee believes that stock options
are necessary to focus each executive's attention on the Company's goal of
increasing stockholder value as reflected in the stock price. In determining the
level of option grants, the Compensation Committee considers the executive's
level of stock ownership and position in the Company. The Compensation Committee
has determined that the overall level of stock options for the year is
consistent with the practice of companies in the Peer Group. During 1997, the
Compensation Committee approved awards of 100,000 options to Mr. Collins, and
awards of 50,000 options each to Messrs. Jacoby and Kelly.
Stock Option Repricing. In February 1997, the Compensation Committee
approved a repricing of substantially all outstanding options granted to each of
Messrs. Collins, Jacoby and Kelly. The repricing reduced the exercise price from
$7.9375 per share to $6.00 per share. The Committee approved this action as part
of the compensation package designed to ensure their retention and continued
performance.
Submitted by the Compensation Committee of Metrocall as of February 4, 1998
<TABLE>
<S> <C>
Francis A. Martin, III Michael Greene
Elliott H. Singer Royce R. Yudkoff
</TABLE>
Edward E. Jungerman
METROCALL PERFORMANCE
The following table sets forth comparative information regarding
Metrocall's cumulative stockholder return on the Common Stock since July 1993,
when the Common Stock first became publicly traded. Total stockholder return is
measured by dividing total dividends (assuming dividend reinvestment) plus share
price
13
<PAGE> 16
change for a period by the share price at the beginning of the measurement
period. Metrocall's cumulative stockholder return based on an investment of $100
on July 16, 1993 through December 31, 1997, is compared to the cumulative total
return of the NASDAQ Market Index and an index comprised of publicly traded
paging companies (the "Peer Group Index") during that same period. The Peer
Group Index is based on the cumulative total stockholder return of publicly
traded companies which solely engage in the paging line of business, and which
were already publicly traded as of July 1993. These companies are Arch
Communications Group, Inc. (APGR), Paging Network Inc. (PAGE) and ProNet Inc.
(PNET). The returns of each component issuer of the Peer Group Index has been
weighted according to the respective issuer's stock market capitalization at the
beginning of each period for which a return is indicated. Page America Group,
Inc. (PGG) was previously included in the Peer Group. It was removed from
listing on the AMEX in May 1996, and accordingly no quotations are available.
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, PEER GROUP AND BROAD MARKET
<TABLE>
<CAPTION>
MEASUREMENT PERIOD METROCALL NASDAQ
(FISCAL YEAR COVERED) INC. PEER GROUP MARKET
<S> <C> <C> <C>
7/16/93 100.00 100.00 100.00
9/30/93 133.96 121.32 105.02
12/31/93 132.08 135.76 105.26
3/31/94 135.85 104.91 106.96
6/30/94 98.11 123.91 106.05
9/30/94 129.25 132.83 111.70
12/30/94 128.30 152.74 109.46
3/31/95 126.42 152.90 112.69
6/30/95 137.74 158.26 123.28
9/29/95 209.43 219.09 137.36
12/29/95 144.34 220.96 136.26
3/29/96 156.60 224.05 142.55
6/28/96 83.96 209.50 153.12
9/30/96 48.11 172.77 157.34
12/31/96 37.85 130.65 164.74
3/31/97 31.13 131.79 156.36
6/30/97 33.96 71.77 184.98
9/30/97 55.66 102.04 215.68
12/31/97 37.26 85.25 202.08
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RELATED PARTY TRANSACTIONS
Metrocall leases its office space in Alexandria, Virginia from Beacon
Communications Associates, Ltd. ("Beacon Communications"), a Virginia limited
partnership that engages in real estate investment and leasing, and in which
Metrocall is a general partner and has a 20% interest. Mr. Brock and Ms. Brock
are limited partners of Beacon Communications, holding 20% and 30% interests,
respectively. Their children, David H. Brock and Lisa S. Brock, are also limited
partners of Beacon Communications, holding 10% each. The lease terminates in
July 2010. Metrocall paid rent for the premises during 1997 on a monthly basis
in the annual amount of $229,000. The annual rent for 1998 is expected to be
approximately $229,000.
Metrocall also leases an antenna site from Beacon Communications. The lease
terminates in November 2010. Metrocall paid rent for the site during 1997 on a
monthly basis in the annual amount of $61,000. The annual rent for the site is
expected to be approximately $61,000 in 1998.
14
<PAGE> 17
Beacon Communications financed the construction of the Alexandria, Virginia
office building with an Industrial Revenue Bond in the principal amount of
$1,800,000 issued by the Fairfax County, Virginia Economic Development
Authority, dated December 20, 1983 (the "IRB"). Mr. Brock and Ms. Brock have
guaranteed, in their individual capacities, payment of the final $400,000 due on
the IRB. On December 31, 1997, the principal amount outstanding on the IRB was
approximately $572,000.
Metrocall leases its Harrisburg, Pennsylvania office space from 227
Associates, a Virginia general partnership that engages in real estate
investment and leasing, in which Metrocall is a general partner and has a 10%
interest. Mr. Brock and Ms. Brock are general partners of 227 Associates,
holding 10% and 60% interests, respectively. Metrocall paid rent for the
premises during 1997 on a monthly basis in the annual amount of $35,000. The
annual rent for the premises is expected to be approximately $35,000 in 1998.
Franklin Associates and 314 Associates are Virginia general partnerships
owned and controlled by the Brock family that license to Metrocall radio station
equipment and tower use for some of Metrocall's operations in Virginia. During
1998, Metrocall paid rent on a monthly basis in the annual amounts of
approximately $135,000 to 314 Associates and approximately $52,000 to Franklin
Associates. During 1998, Metrocall expects that its rent to 314 Associates and
Franklin Associates will be approximately $146,000 and $46,000, respectively.
Metrocall believes that its agreements with Beacon Communications, 227
Associates, 314 Associates and Franklin Associates are on terms that are no less
favorable to Metrocall than could be obtained from an unaffiliated party in an
arms-length transaction.
In July 1993, Metrocall and Messrs. Brock, Kidd and Kelly and Ms. Brock
(the "Subchapter S stockholders") entered into a Tax Indemnification Agreement
relating to their respective income tax liabilities in connection with
Metrocall's earlier status as an S Corporation. Because Metrocall became subject
to corporate income taxation after Metrocall's initial public offering (the
"Offering"), the reallocation of income and deductions between the period during
which Metrocall was treated as an S Company and the period during which
Metrocall became subject to corporate income taxation may have increased the
taxable income of one party while decreasing that of another party. Accordingly,
the Tax Indemnification Agreement was intended to assure that taxes are borne by
Metrocall on the one hand and the Subchapter S stockholders on the other hand
only to the extent that such parties are required to report the related income
for tax purposes. Subject to certain limitations, the Tax Indemnification
Agreement generally provides that the Subchapter S stockholders will be
indemnified by Metrocall with respect to Federal and state income taxes (plus
interest and penalties) shifted from a Metrocall taxable year subsequent to the
Offering to a taxable year in which Metrocall was an S Corporation. In addition,
Metrocall will be indemnified by the Subchapter S stockholders, subject to
certain limitations, with respect to federal and state income taxes (plus
interest and penalties) that arise from a termination of S Corporation status
prior to the date of such termination or which are shifted from S Corporation
taxable year to a Metrocall taxable year subsequent to the consummation of the
Offering. Any payment made by Metrocall to the Subchapter S stockholders
pursuant to the Tax Indemnification Agreement likely will be considered by the
Internal Revenue Service or the applicable state taxing authorities to be
nondeductible by Metrocall for income tax purposes. As of March 1, 1998, no
indemnification obligations have arisen under the Tax Indemnification Agreement
with respect to any of the parties thereto.
Mr. William Collins, President, Chief Executive Officer, Director, and Vice
Chairman of the Board of Directors of Metrocall and former Chairman of the Board
of Directors, President and Chief Executive Officer of FirstPAGE, is a general
partner in three real estate partnerships that leased commercial office space to
Metrocall in Alexandria, Virginia during 1997. Mr. Steven D. Jacoby, Chief
Operating Officer, is a general partner in one of such partnerships. The lease
payments to entities with whom Messrs. Collins and Jacoby are affiliated
amounted to approximately $14,000 for the year ended December 31, 1997. The
annual rent for the remaining lease in 1998 is expected to amount to
approximately $14,000.
At December 31, 1997, USA Telecommunications, Inc. ("USATel") had not
reimbursed the Company approximately $69,000 representing USATel employees'
insurance claims paid on behalf of USATel by Metrocall. Mr. Collins is Chairman
of the Board of Directors of USATel in addition to his positions as
15
<PAGE> 18
President, Chief Executive Officer, Director and Vice Chairman of the Board of
Directors of Metrocall. The amount due from USATel was fully reserved for
financial reporting purposes at December 31, 1997.
The Company leases its regional office in Pensacola, Florida and warehouse
space from a company owned by Ray D. Russenberger, a member of the Board of
Directors and the former Vice Chairman of A+ Network, Inc. During 1997,
Metrocall paid rent on a monthly basis of approximately $43,700. The leases
expire on dates ranging from May 31, 1998 to December 31, 1998. The annual rent
for the premises is expected to be approximately $241,000 in 1998.
ProNet Inc. (and Metrocall as successor-in-interest) entered into an
Incentive Compensation Agreement dated July 7, 1997 with Impulse Technologies
Corporation regarding the development of certain messaging services. Mr.
Jungerman is the President of Impulse Technologies Corporation. Maximum
compensation under the Incentive Compensation Arrangement is $350,000.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL TWO)
The Board of Directors of Metrocall has appointed the firm of Arthur
Andersen LLP to continue as independent public accountants for Metrocall for the
fiscal year ending December 31, 1998, subject to ratification of such
appointment by the stockholders. Arthur Andersen LLP has acted as the
independent public accountants of Metrocall since 1993. Unless otherwise
indicated, properly executed proxies will be voted in favor of ratifying the
appointment of Arthur Andersen LLP, independent public accountants, to audit the
books and accounts of Metrocall for the fiscal year ending December 31, 1998. No
determination has been made as to what action the Board of Directors would take
if the stockholders do not ratify the appointment.
Representatives of Arthur Andersen LLP will be present at the Annual
Meeting. They will be given the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
The Board of Directors recommends that you vote FOR the ratification of the
appointment of Arthur Andersen LLP as independent public accountants for the
fiscal year ending December 31, 1998.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of Metrocall
does not know of any other matters to be presented for action by the
stockholders at the Annual Meeting. If, however, any other matters not now known
are properly brought before the Annual Meeting, the proxy holders will vote upon
the same according to their discretion and best judgment.
16
<PAGE> 19
STOCKHOLDER PROPOSALS
Any proposal intended to be presented by any stockholder for action at the
1999 Annual Meeting of Stockholders of Metrocall must be received by the
Secretary of Metrocall at 6677 Richmond Highway, Alexandria, Virginia 22306 not
later than November 30, 1998, in order for the proposal to be considered for
inclusion in Metrocall's proxy statement and proxy relating to the 1999 Annual
Meeting.
By Order of the Board of Directors
LOGO
Richard M. Johnston
Chairman of the Board
Alexandria, Virginia,
April 16, 1998
A COPY OF THE METROCALL ANNUAL REPORT TO STOCKHOLDERS FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1996 ACCOMPANIES THIS PROXY STATEMENT. METROCALL HAS FILED AN
ANNUAL REPORT FOR ITS FISCAL YEAR ENDED DECEMBER 31, 1997 ON FORM 10-K WITH THE
COMMISSION. STOCKHOLDERS MAY OBTAIN, FREE OF CHARGE, A COPY OF THE FORM 10-K BY
WRITING TO INVESTOR RELATIONS, METROCALL, INC., 6677 RICHMOND HIGHWAY,
ALEXANDRIA, VIRGINIA 22306.
17
<PAGE> 20
METROCALL, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder hereby constitutes and appoints the Proxy Committee
comprised of Harry L. Brock, Jr. and Jackie R. Kimzey the true and lawful
agent and proxy with full power of substitution, to represent the undersigned at
the Annual Meeting of Stockholders of Metrocall, Inc. to be held at the
Ritz-Carlton, Pentagon City, 1250 South Hayes Street, Arlington, Virginia on May
6, 1998, at 9:00 a.m., local time, and at any adjournments thereof, on all
matters coming before said meeting.
Election of Directors each for a three-year term, Nominees:
Ronald V. Aprahamian, Ryal R. Poppa, Elliott H. Singer, Max D. Hopper
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS RECOMMENDATIONS. THE PROXY COMMITTEE CANNOT VOTE
YOUR SHARE(S) UNLESS YOU SIGN AND RETURN THIS CARD.
The undersigned shareholder may revoke this proxy at any time before it is voted
by delivering to the Secretary of Metrocall either a written revocation of the
proxy or a duly executed proxy bearing a later date, or by appearing at the
Annual Meeting and voting in person.
------------
SEE REVERSE
SIDE
------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/\ FOLD AND DETACH HERE /\
METROCALL, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 6, 1998
9:00 A.M.
RITZ-CARLTON, PENTAGON CITY
1250 SOUTH HAYES STREET
ARLINGTON, VIRGINIA
- --------------------------------------------------------------------------------
<PAGE> 21
[X]PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE HELD VOTED FOR EACH
PROPOSAL.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL PROPOSALS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Ratification of the [ ] [ ] [ ] 3. In its discretion, the Proxy Committee is
Directors appointment by the authorized to vote such other business as may
(See reverse) Board of Directors of properly come before the meeting or any
For, except vote withheld from Arthur Andersen LLP as adjournments or postponements thereof.
the following nominee(s): independent public
accountants of Metrocall I plan to attend the Annual Meeting [ ]
- ----------------------------- for the fiscal year ending
December 31, 1998
- --------------------------------------------------------------------------------
---------------------------------------------------
NOTE: Please sign exactly as name appears hereon.
Only one signature is required in the case of
jointly owned stock. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such.
----------------------------------------------
----------------------------------------------
SIGNATURE(S) DATE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
</TABLE>
/\ FOLD AND DETACH HERE /\
Admission Ticket
Metrocall, Inc.
Annual Meeting
of
Stockholders
Wednesday, May 6, 1998
9:00 a.m.
Ritz-Carlton, Pentagon City
1250 South Hayes Street
Arlington, Virginia
