<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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(4) Date Filed:
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<PAGE> 2
[METROCALL LOGO]
April 3, 2000
Dear Stockholder:
On behalf of the Board of Directors and employees of Metrocall, Inc., I
cordially invite you to attend the 2000 Annual Meeting of the Stockholders of
Metrocall, Inc. We will hold the Annual Meeting on Wednesday, May 3, 2000 at
9:00 a.m. eastern daylight savings time at The Ritz Carlton Hotel, located at
1250 South Hayes Street, Arlington, Virginia 22202.
Enclosed with this letter is a Notice of the Annual Meeting, a Proxy
Statement, a proxy card, and a return envelope. Both the Notice of the Annual
Meeting and the Proxy Statement provide details of the business that we will
conduct at the Annual Meeting and other information about Metrocall, Inc.
Whether or not you plan to attend the Annual Meeting, please sign, date and
promptly return the proxy card in the enclosed prepaid return envelope or vote
your shares electronically through the Internet or the telephone. Your shares
will be voted at the Annual Meeting in accordance with your proxy instructions.
Of course, if you attend the Annual Meeting you may vote in person. If you plan
to attend the meeting, please mark the appropriate box either on the enclosed
proxy card or while voting using the Internet or the telephone.
Sincerely,
/s/ RICHARD M. JOHNSTON
Richard M. Johnston
Chairman of the Board
YOUR VOTE IS IMPORTANT.
Please Sign, Date and Return Your Proxy Card Before the Annual Meeting
Or Vote Your Shares Electronically through the Internet or the Telephone.
If you have any questions about voting your shares, please contact Paul Liberty,
Vice President, Investor Relations, at (703) 660-6677 extension 6260 or
[email protected].
<PAGE> 3
METROCALL, INC.
6677 RICHMOND HIGHWAY
ALEXANDRIA, VIRGINIA 22306
(703) 660-6677
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DATE: WEDNESDAY, MAY 3, 2000
TIME: 9:00 A.M. EASTERN DAYLIGHT SAVINGS TIME
LOCATION: RITZ CARLTON, PENTAGON CITY
1250 SOUTH HAYES STREET
ARLINGTON, VIRGINIA 22202
Dear Stockholders:
At the 2000 Annual Meeting of the Stockholders, you and the other
stockholders will be able to vote on the following proposals, together with any
other business that may properly come before the Annual Meeting.
1. Election of four directors.
2. Amendment of Metrocall's 1996 Stock Option Plan to increase the
number of shares of common stock reserved for issuance under the
plan.
3. Amendment of Metrocall's Employee Stock Purchase Plan to increase the
number of shares of common stock reserved for issuance under the
plan.
4. Ratification of the Board's selection of Arthur Andersen LLP as
Metrocall's independent public accountants for the fiscal year ending
December 31, 2000.
Only stockholders of record at the close of business on March 15, 2000 will
be able to vote their shares at the Annual Meeting.
By Order of the Board of Directors
/s/ RICHARD M. JOHNSTON
Richard M. Johnston
Chairman of the Board
Alexandria, Virginia,
April 3, 2000
YOUR VOTE AT THE ANNUAL MEETING IS IMPORTANT.
PLEASE INDICATE YOUR VOTE ON THE ENCLOSED PROXY AND RETURN IT IN THE
ENCLOSED ENVELOPE OR VOTE YOUR SHARES ELECTRONICALLY THROUGH THE INTERNET OR THE
TELEPHONE AS SOON AS POSSIBLE, EVEN IF YOU PLAN TO ATTEND THE MEETING. IF YOU
VOTE YOUR SHARES USING THE INTERNET OR BY TELEPHONE, YOU DO NOT HAVE TO RETURN
YOUR PROXY CARD.
IF YOU ATTEND THE MEETING, YOU WILL BE ABLE TO WITHDRAW YOUR PROXY AND VOTE
IN PERSON.
IF YOU HAVE QUESTIONS ABOUT VOTING YOUR SHARES, PLEASE CONTACT PAUL
LIBERTY, VICE PRESIDENT, INVESTOR RELATIONS, AT (703) 660-6677 EXTENSION 6260 OR
AT [email protected].
<PAGE> 4
[METROCALL LOGO]
April 3, 2000
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 3, 2000
This Proxy Statement provides information that you should read before you
vote on the proposals that will be presented to you at the 2000 Annual Meeting
of the Stockholders of Metrocall, Inc. ("Metrocall"). The Annual Meeting will be
held on Wednesday, May 3, 2000, at 9:00 a.m. eastern daylight savings time at
The Ritz Carlton Hotel, located at 1250 Hayes Street, Alexandria, Virginia
22202.
This Proxy Statement provides information about the Annual Meeting, the
proposals on which you will be asked to vote at the Annual Meeting and other
relevant information.
On April 3, 2000, we began mailing information to people who, according to
our records, owned shares of Metrocall's common stock at the close of business
on March 15, 2000.
FORWARD-LOOKING STATEMENTS
This Proxy Statement contains forward-looking statements that involve risks
and uncertainties. When used in this Proxy Statement, the words "believe,"
"intend," "may," "will" and "expect" and similar expressions as they relate to
Metrocall or Metrocall's management are intended to identify such
forward-looking statements. Metrocall undertakes no obligation to revise these
forward-looking statements to reflect any future events or circumstances.
Metrocall's actual results, performance or achievements could differ materially
from the results expressed in or implied by these forward-looking statements.
Factors that could cause or contribute to such differences include, among
others, those discussed under the heading "Risk Factors" included within
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Metrocall's Annual Report on Form 10-K for the year ended
December 31, 1999, which is incorporated by reference into this Proxy Statement.
<PAGE> 5
CONTENTS
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
INFORMATION ABOUT THE 2000 ANNUAL
MEETING AND VOTING............. 1
PROPOSALS........................ 4
1. Election of Directors.... 4
2. Amendment of 1996 Stock
Option Plan.............. 8
3. Amendment of Employee
Stock Purchase Plan...... 11
4. Ratification of Arthur
Andersen LLP as
Independent Public
Accountants.............. 13
STOCK OWNERSHIP.................. 14
</TABLE>
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
EXECUTIVE OFFICERS............... 16
EXECUTIVE COMPENSATION........... 17
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS................... 21
OTHER INFORMATION................ 23
APPENDIX A: 1996 STOCK OPTION
PLAN........................... A-1
APPENDIX B: EMPLOYEE STOCK
PURCHASE PLAN.................. B-1
</TABLE>
i
<PAGE> 6
INFORMATION ABOUT THE 2000 ANNUAL MEETING AND VOTING
The Board of Directors is soliciting your proxy to encourage your
participation in the voting at the Annual Meeting and to obtain your support on
each of the proposals. You are invited to attend the Annual Meeting and vote
your shares directly. If you do not attend the Annual Meeting, you may vote by
proxy, which allows you to direct another person to vote your shares at the
Annual Meeting on your behalf.
THE ANNUAL MEETING
Metrocall will hold the Annual Meeting on Wednesday, May 3, 2000, at 9:00
a.m. eastern daylight savings time at The Ritz Carlton Hotel, located at 1250
Hayes Street, Arlington, Virginia 22202.
THIS PROXY SOLICITATION
This solicitation contains two parts: the proxy card and this Proxy
Statement. The proxy card is the means by which you authorize another person to
vote your shares in accordance with your instructions. This Proxy Statement
provides you with information on the proposals and other matters that you may
find useful in determining how to vote. On April 3, 2000, Metrocall began
mailing this Proxy Statement to all people who, according to our stockholder
records, owned shares of Metrocall's common stock at the close of business on
March 15, 2000.
Metrocall will pay for soliciting these proxies. Metrocall's directors,
officers and employees may solicit proxies in person or by telephone, mail,
facsimile or otherwise but they will not receive additional compensation for
their services. Metrocall has also retained Corporate Investor Communications,
Inc. to assist in distributing proxy solicitation materials and soliciting
proxies at a cost of approximately $6,500, plus reasonable out-of-pocket
expenses. Metrocall will also reimburse brokers and other nominees for their
reasonable out-of-pocket expenses for forwarding proxy materials to beneficial
owners of stock held by record by them.
HOW TO VOTE YOUR SHARES
You have one vote for each share of Metrocall's common stock that you owned
of record at the close of business on March 15, 2000. The number of shares you
own and may vote at the Annual Meeting is listed on the enclosed proxy card. You
may vote your shares at the Annual Meeting in person or by proxy. To vote in
person, you must attend the Annual Meeting and obtain and submit a ballot.
Metrocall will have ballots for voting in person available at the Annual
Meeting. To vote by proxy, you must complete and return the enclosed proxy card
or you may vote your shares electronically through the Internet or by telephone
following the instructions on the proxy card. By completing and returning the
proxy card, or by voting using the Internet or the telephone you will direct the
persons designated on the proxy card (those persons are known as "proxies") to
vote your shares at the Annual Meeting in accordance with your instructions.
Ronald V. Aprahamian and Harry L. Brock, Jr. will serve as proxies for the
Annual Meeting.
If you decide to vote by proxy, your proxy card will be valid only if you
sign, date and return the proxy card or vote your shares using the Internet or
by telephone before the Annual Meeting. IF YOU COMPLETE ALL OF THE PROXY CARD
EXCEPT THE VOTING INSTRUCTIONS, THE DESIGNATED PROXIES WILL VOTE YOUR SHARES FOR
EACH OF THE FOUR PROPOSALS. If any nominee for election to the Board is unable
to serve as director, which is not anticipated, or if any other matters properly
come before the meeting, the designated proxies will vote your shares in
accordance with their best judgment.
HOW TO REVOKE YOUR PROXY
You may revoke your proxy at any time before it is voted by any of the
following means:
- Notifying Metrocall's assistant secretary in writing that you wish to
revoke your proxy.
- Submitting a proxy dated later than your original proxy.
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- Attending the Annual Meeting and voting. Your attendance at the Annual
Meeting will not by itself revoke a proxy. You must obtain a ballot and
vote your shares to revoke the proxy.
VOTE REQUIRED FOR APPROVAL
<TABLE>
<CAPTION>
<S> <C>
Proposal 1: Election of Four Directors The four nominees who receive the most votes
will be elected. If you indicate "withhold
authority to vote" for a particular nominee on
your proxy card, your vote will not count
either for or against the nominee. If you hold
your shares with a broker and do not instruct
your broker how to vote, your broker has
authority to vote on this proposal in favor of
the Board's nominees.
Proposal 2: Amendment of 1996 Stock Option Proposal 2 requires that the votes cast for
Plan the proposal exceed the votes cast against the
proposal. If you abstain from voting, it will
have no effect on the outcome. Broker
non-votes have no effect on the outcome. (A
broker non-vote can occur if you hold your
shares with a broker and are asked to instruct
your broker how to vote your shares. If you do
not instruct your broker how to vote, your
broker will not be able to vote for or against
a proposal. If your broker returns a proxy
card for your shares without any voting
instructions, your shares will be counted as
"broker non-vote" shares.)
Proposal 3: Amendment of Employee Stock Proposal 3 requires that the votes cast for
Purchase Plan the proposal exceed the votes cast against the
proposal. If you abstain from voting, it will
have no effect on the outcome. Broker
non-votes have no effect on the outcome.
Proposal 4: Ratification of Selection of Proposal 4 requires that the votes cast for
Independent Public Accountants the proposal exceed the votes cast against the
proposal. If you abstain from voting, it will
have no effect on the outcome. If you hold
your shares with a broker and do not instruct
your broker how to vote, your broker has
authority to vote in favor of this proposal.
</TABLE>
Proxies that are executed but unmarked will be voted FOR all proposals set
forth in this Proxy Statement.
Quorum. On the record date for the Annual Meeting (March 15, 2000),
43,652,258 shares of Metrocall's common stock were issued and outstanding.
Metrocall's Bylaws require that a "quorum" be present at the Annual Meeting to
transact business. A quorum will be present if a majority of Metrocall's common
stock, or 21,826,130 shares, is represented at the Annual Meeting, in person or
by proxy. If a quorum is not present, a vote cannot occur. Abstentions and
broker non-votes will be counted in determining whether a quorum is present at
the Annual Meeting.
WHERE TO FIND VOTING RESULTS
Metrocall will publish the voting results in its Form 10-Q for the second
quarter 2000,
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<PAGE> 8
which we will file with the Securities and Exchange Commission (SEC) in August
2000.
ADDITIONAL INFORMATION
Metrocall's Annual Report to Stockholders for the fiscal year ended
December 31, 1999, including consolidated financial statements, is being mailed
to all stockholders entitled to vote at the Annual Meeting together with this
Proxy Statement. The Annual Report does not constitute a part of the proxy
solicitation material. The Annual Report tells you how to get additional
information about Metrocall.
On March 10, 2000, Metrocall filed its Annual Report on Form 10-K with the
SEC. Stockholders may obtain a copy free of charge by writing to:
Metrocall, Inc.
Attn: Investor Relations
6677 Richmond Highway
Alexandria, Virginia 22306
-------------------------
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS AND FOR APPROVAL OF ALL
PROPOSALS SET FORTH IN THIS PROXY STATEMENT.
-------------------------
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<PAGE> 9
PROPOSALS
We will present the following four proposals at the Annual Meeting. We do
not intend to bring before the Annual Meeting any matters other than the four
proposals. We do not know of any matters other than those set forth in this
Proxy Statement that 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 proxy will vote in accordance with their best judgment on
such matters.
Any proposal intended to be presented by any stockholder for action at the
2001 Annual Meeting of the Stockholders must be received at Metrocall's
principal executive offices no later than November 30, 2000.
1. ELECTION OF DIRECTORS
The Board of Directors has nominated four directors to serve as directors
for three-year terms beginning at this Annual Meeting and expiring at the 2003
Annual Meeting of the Stockholders. Those nominees are:
William L. Collins, III
Edward E. Jungerman
Francis A. Martin, III
Harold S. ("Pete") Wills
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 as nominees. The nominees have consented to serve as directors,
and the Board believes that the nominees will serve if elected as directors.
However, if any of the persons nominated by the Board is unable to serve for any
reason (which is not anticipated), the Board may designate a substitute nominee
or nominees. In that event, the proxies will be voted for the election of such
substitute nominee or nominees. The Board may also decide to leave the Board
seat or seats open until a suitable candidate or candidates are located, or it
may decide to reduce the size of the Board. Proxies for the Annual Meeting may
not be voted for more than four nominees.
BOARD OF DIRECTORS
Metrocall's Bylaws provide that Metrocall shall have at least three and no
more than 14 directors, unless certain events have occurred and are continuing
that give the holders of Metrocall's Series A Convertible Preferred Stock the
power to elect additional directors. Pursuant to the Board's authority to adjust
the number of directors, the Board increased the number of directors from 11 to
13 effective on March 17, 2000. The holders of Metrocall's Series A Convertible
Preferred Stock are entitled to designate two of the 13 directors.
Under Metrocall's Restated Certificate of Incorporation, the 13 directors
are divided into three classes: Class I -- four directors; Class II -- three
directors; and Class III -- four directors. 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 III
directors are up for election at the Annual Meeting. The nominees Messrs.
Collins, Jungerman, Martin and Wills are currently Class III directors.
NOMINEES AND CONTINUING DIRECTORS
The following table sets forth the names of the nominees for election as
directors and the directors who will continue to serve after the Annual Meeting.
The table also sets forth each such person's age at March 15, 2000, the period
during which he has served as a director, the expiration of his term, and the
positions he currently holds with Metrocall.
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<PAGE> 10
<TABLE>
<CAPTION>
DIRECTOR EXPIRATION POSITIONS HELD
NOMINEES AGE SINCE OF TERM WITH METROCALL
-------- --- -------- ---------- --------------
CLASS III DIRECTORS:
- --------------------
<S> <C> <C> <C> <C>
William L. Collins, III 49 1994 2000 President, Chief Executive
Officer, Director and
Vice Chairman of the
Board
Edward E. Jungerman 57 1997 2000 Director
Francis A. Martin, III 56 1994 2000 Director
Harold S. ("Pete") Wills 57 2000 2000 Director
CONTINUING DIRECTORS
- --------------------------
CLASS I DIRECTORS:
- --------------------------
Harry L. Brock, Jr. 64 1982 2002 Director
Richard M. Johnston 65 1994 2002 Chairman of the Board
Jackie R. Kimzey 47 1997 2002 Director
George P. Stamas 49 2000 2002 Director
CLASS II DIRECTORS:
- --------------------------
Ronald V. Aprahamian 53 1995 2001 Director
Max D. Hopper 65 1997 2001 Director
Michael Levitt 41 2000 2001 Director
SERIES A PREFERRED STOCK
- --------------------------
DESIGNATED DIRECTORS:
- --------------------------
Michael Greene 38 1997 2002 Director
Royce R. Yudkoff 44 1997 2002 Director
</TABLE>
We set forth below certain biographical information regarding the directors
of Metrocall.
NOMINEES -- CLASS III
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. and of Inciscent, Inc. From 1977 to
1988, Mr. Collins was President of C&C, Inc., a national communications
marketing company.
Edward E. Jungerman has been a director of Metrocall since December 1997.
Mr. Jungerman was a director of ProNet Inc. 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.
Francis A. Martin, III has been a director 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. Mr.
Martin serves on the board of directors of Inciscent, Inc.
Harold S. ("Pete") Wills has been director of Metrocall since March 2000.
Mr. Wills has been President of PSINet Inc., since September 1998 and a Director
and Chief Operating Officer of PSINet since April 1996. He was Executive Vice
President of PSINet from April 1996 to September 1998. Mr. Wills
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<PAGE> 11
served as Chief Operating Officer of Hospitality Information Networks, Inc. from
July 1995 through January 1996. Mr. Wills was elected to the Board of Directors
pursuant to the terms of PSINet's stock purchase agreement with Metrocall.
CONTINUING DIRECTORS -- CLASS I
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 also serves on the board of directors of
TVL Corporation.
Richard M. Johnston has served as Metrocall's Chairman of the Board since
January 1996, and has been a member of the Board since August 1995. Since 1970,
Mr. Johnston has been Vice President-Investments of The Hillman Company. Mr.
Johnston also serves on the board of directors of The Hillman Company and
Superconductor Technologies, Inc.
Jackie R. Kimzey has been a director of Metrocall since December 1997. Mr.
Kimzey was a founder and director of ProNet Inc. 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. Since 1999, Mr.
Kimzey has also been a partner with Sevin Rosen Funds. Mr. Kimzey was also Chief
Executive Officer of AirGate Wireless L.L.C.
George P. Stamas has been a director of Metrocall since March 2000. Mr.
Stamas has served as Vice Chairman of DeutscheBanc Alex. Brown since January
2000. From March 1996 until December 31, 1999, Mr. Stamas was a partner with the
law firm of Wilmer, Cutler & Pickering and now serves as a consultant to Wilmer,
Cutler & Pickering. Mr. Stamas is also counsel to and a limited partner of the
Baltimore Orioles baseball team. From 1983 until March 1996, Mr. Stamas was a
partner at Piper & Marbury L.L.P. Mr. Stamas also serves on the board of
directors of Aether Systems, Inc., FTI Consulting, Inc., Luminant Worldwide
Corporation and Inciscent, Inc. Mr. Stamas was elected to the Board of Directors
pursuant to the terms of Aether's stock purchase agreement with Metrocall.
CONTINUING DIRECTORS -- CLASS II
Ronald V. Aprahamian is a private investor and has been a member of
Metrocall's Board 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 health care computer software
services firm from January 1988 to October 1996.
Max D. Hopper has been a director of Metrocall since December 1997. Mr.
Hopper was a director of ProNet from May 1997 until ProNet's merger with
Metrocall in December 1997. Since 1995, Mr. Hopper has been the Principal and
Chief Executive Officer 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 Accrue Software, Inc., Gartner Group, Inc., USDATA Corporation,
Worldtalk Corporation, Payless Cashways, Inc., Exodus Communications Inc. and
United Stationers Inc.
Michael Levitt has been a director of Metrocall since March 2000. Mr.
Levitt has been a partner of Hicks, Muse, Tate & Furst, Incorporated since 1996.
From 1993 through 1995, Mr. Levitt was a managing director and deputy head of
investment banking with Smith Barney Inc. Mr. Levitt serves as a director of
AMFM, Inc., Awards.com, El Sitio, Inc. G.H. Mumm/Perrier/Jouet, Grupo MVS, S.A.
de C.V., Ibero-American Media Partners II ltd., Inciscent, Inc., International
Home Foods, Inc., PeopleLink.com, RealPulse.com, Regal
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<PAGE> 12
Cinemas, Inc. RCN Corporation, Rythms NetConnections, Inc., STC Broadcasting,
Inc. and StreetZebra.com. Mr. Levitt was elected to the Board of Directors
pursuant to the terms of Hicks Muse's stock purchase agreement with Metrocall.
CONTINUING DIRECTORS -- SERIES A PREFERRED STOCK DESIGNEES
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. Mr. Greene has worked in Union Bank's private
equity and leveraged finance businesses since he joined it 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, an
international management consulting firm where he had significant responsibility
for Bain's media practice. Mr. Yudkoff serves on the board of directors of
Muzak, Pinnacle Holdings, Inc. and several other private companies.
MEETINGS AND COMMITTEES
During 1999, the Board of Directors held four regular and four special
meetings and took action by written consent two times in lieu of additional
meetings. Every director attended at least 75% of the aggregate of (1) the total
number of Board meetings and (2) total number of the meetings of committees on
which the director served.
Nominating Committee. Nominations for director are made by the Board of
Directors. The Board of Directors has appointed a Nominating/Corporate
Governance Committee to make recommendations to the Board regarding Board
structure and membership. At December 31, 1999, Messrs. Yudkoff (chair), Brock,
Johnston and Kimzey were members of this committee. During 1999, this committee
held two meetings.
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. 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
2001 Annual Meeting, that date is November 30, 2000.
Audit Committee. The Board of Directors 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's response
to that letter, if deemed necessary. At December 31, 1999, Messrs. Aprahamian
(chair) Greene and Jungerman were members of the Audit Committee. During 1999,
the Audit Committee held four meetings.
Compensation Committee. The Board of Directors has appointed a
Compensation Committee to consider compensation matters. At December 31, 1999,
Messrs. Martin (chair) and Greene were members of the Compensation Committee.
During 1999, the Compensation Committee held three meetings. On February 2,
2000, the Board of Directors appointed Mr. Yudkoff to this committee.
Strategy Committee. The Board of Directors has appointed a Strategy
Committee to consider actions that would further Metrocall's business strategy.
At December 31, 1999, Messrs. Hopper (chair), Aprahamian, Collins, Jungerman and
Kimzey were members of this committee. During 1999, this committee held three
meetings.
DIRECTOR COMPENSATION
Directors who are full-time officers of Metrocall receive no additional
compensation for serving on the Board or its committees.
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<PAGE> 13
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 special
board or committee meeting attended (other than a committee meeting that occurs
on the same days as an otherwise schedule board meeting). 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, provides for
formula grants of stock options to directors who have never been officers or
employees of Metrocall and allows the Board to make discretionary grants to any
director. Under the plan, every eligible director who begins services on the
Board receives an initial option to purchase 10,000 shares of Metrocall's common
stock. Each eligible director also receives an additional option to purchase
1,000 shares of Metrocall's common stock on each anniversary of the initial
option, provided that the director continues to be an eligible director on each
anniversary date. These options become fully exercisable six months after the
date of grant. The exercise price for options granted to directors is the fair
market value of Metrocall's common stock on the date the option is granted.
During 1999, each nonemployee director received formula options to purchase
1,000 shares of Metrocall's common stock at prices ranging from $2.75 per share
to $5.63 per share. Each director who was not a full-time officer received
discretionary grants to purchase 10,000 shares of Metrocall's common stock at
$5.13 per share except for the Chairman, Mr. Johnston, who received
discretionary grants to purchase 25,000 shares of Metrocall's common stock at
$5.13 per share.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF MESSRS.
COLLINS, JUNGERMAN, MARTIN, AND WILLS AS DIRECTORS.
2. AMENDMENT OF 1996 STOCK OPTION PLAN
Metrocall is asking you to approve an amendment to the 1996 Stock Option
Plan that will increase the number of shares of Metrocall's common stock
Metrocall can issue from 8,016,000 to 10,516,000. The Board believes that this
increase is warranted in order to provide sufficient options to incentivize
employees as Metrocall grows and competes with other technology companies for
qualified personnel. After the increase, the authorized number of options will
represent 13% of Metrocall's outstanding shares, which are approximately 80.3
million after Metrocall's recent issuances of common stock. The amendment is
effective at and contingent upon stockholder approval.
What follows is a summary of the 1996 Stock Option Plan as it will be if
the stockholders approve the amendment. We intend for this to be a fair and
complete summary of the plan, but we are also attaching as Appendix A the full
text of the plan, which governs.
SUMMARY OF THE PLAN
Purpose and Scope. Metrocall has used and intends to use the plan to
recruit, reward, and retain employees and directors. Under the plan, the Board's
Compensation Committee (or the Board) may grant options for up to 10,516,000
shares.
Plan Administration. The plan authorizes the Compensation Committee to
administer the plan, unless the Board chooses to do so. (The term
"Administrator" will cover whichever body is administering the plan.) The
Administrator's authority includes granting options to purchase shares,
determining which options are incentive stock options (ISOs) and which are
nonqualified stock options (NQSOs), determining the exercise price of the
options granted, and exercising broad discretion to set or amend other terms.
Only the Board can set or change option terms for outside directors.
Participants. The Administrator may grant options to employees and
directors, a total of approximately 3,700 persons as of March 15, 2000. (We will
refer to persons who receive options as "optionees.") The Administrator may also
grant options or other awards to replace
8
<PAGE> 14
awards granted outside the plan, including situations where Metrocall has
acquired or merged with another entity.
Options. The Administrator can grant options (the right to purchase shares
at a fixed price for up to a fixed length of time). Those options can be either
NQSOs or ISOs. The primary difference between the two forms is that stricter tax
rules and limits apply to ISOs.
ISO Limits. Four limits apply to ISOs under the plan. The first is that
ISO treatment is limited based on when the options first become
exercisable -- only the first $100,000 in common stock (valued as of the date of
grant) that becomes exercisable under an individual's ISOs in a given year will
receive ISO tax treatment. The second limitation is that the option price must
at least equal 100% of the fair market value of the shares on the date of grant
of the option. The third limitation is that the option price for stockholders
holding 10% or more of the outstanding shares of the common stock must at least
equal 110% of the fair market value of the common stock. The fourth limitation,
under the amended plan's terms, is that ISOs can cover no more than 3,000,000
shares.
Individual Limit. Under the plan, the Administrator cannot grant NQSOs or
ISOs for more than 1,000,000 shares in any calendar year to any individual.
Counting against this number would be any options or shares granted in a year
that expire or that the Administrator replaces within the same year. The
Administrator has no expectation of granting options for 1,000,000 shares in any
year.
Exercise Price. The Administrator normally sets the exercise price for all
options (the price someone must pay for a share of common beneficial interest)
at the market price when granted or, if contingent on shareholder approval, when
approved. The plan permits the exercise price to be as low as par value for
NQSOs. Metrocall does not receive separate consideration for the granting of
options, other than the services the optionees provide.
Option Exercise and Transfer Restrictions. Employee optionees who have
received their options from Metrocall (and not as replacement options) generally
can only exercise an option while employed by Metrocall. (Longer terms typically
apply to options granted in replacement of options issued by companies merged
into or acquired by Metrocall.) An optionee cannot transfer his options other
than to someone after death.
Director Options. The plan provides for an automatic grant of an NQSO for
10,000 shares when an eligible director first joins the Board and for further
grants of NQSOs for 1,000 shares on each anniversary of the initial option.
These formula options become exercisable six months after grant and remain in
effect until the tenth anniversary of their date of grant. The plan gives the
Board the authority to make discretionary grants of options to directors, and
those can be under different terms than the formula options.
Option Expiration. Options will terminate no later than ten years after
their date of grant. However, options intended to be ISOs under the plan will
expire no later than five years after the date of grant if the optionee owns (or
is treated as owning) more than 10% of the outstanding shares. The Administrator
may not grant options under the plan after April 5, 2006.
Effects of Certain Changes of Control. The plan provides that option
exercisability will accelerate and restrictions will lapse to the extent option
agreements or employment agreements so provide. In certain circumstances, either
an acquirer must assume or replace the options or the optionees will have some
period of time before certain specified transactions occur to exercise options
(including options not yet exercisable) after which time the plan and options
will terminate. These circumstances generally include Metrocall's dissolution or
liquidation, its merger into another corporation, sale of substantially all its
assets, or another transaction in which a person or entity acquires 80% of the
voting power of the combined classes of Metrocall's stock.
Amendments and Termination. The Board may at any time suspend, terminate,
modify or amend the plan but must receive stockholder approval to the extent
required to preserve ISO treatment. No suspension, termi-
9
<PAGE> 15
nation, modification or amendment of the plan may adversely affect any option
previously granted, unless the optionee consents.
TAX CONSEQUENCES
Nonqualified Stock Options. An optionee will not be taxed when he receives
an NQSO. When he exercises an NQSO, he will generally owe taxes on ordinary
income on the difference between the value of the shares he receives and the
price he pays, with the "spread" treated like additional salary for an employee.
He may then owe taxes again if and when he sells the shares. That tax would be
on the difference between the price he received for the share and his "basis,"
which is the sum of the price he originally paid plus the value of the shares on
which he originally paid income taxes. Depending upon how long he held the
shares before selling, he may be eligible for favorable tax rates for certain
kinds of capital gains. In addition, Metrocall will receive an income tax
deduction for any amounts of "ordinary income" to him.
Incentive Stock Options. An optionee will not be taxed when he receives an
ISO and will not be taxed when he exercises the ISO, unless he is subject to the
alternative minimum tax (AMT). If he holds the shares purchased upon exercise of
the ISO (ISO Shares) for more than one year after the date he exercised the
option and for more than two years after the option grant date, he generally
will realize long-term capital gain or loss (rather than ordinary income or
loss) when he sells or otherwise disposes of the ISO Shares. This gain or loss
will equal the difference between the amount realized upon such disposition and
the amount paid for the ISO Shares.
If the optionee sells the ISO Shares in a "disqualifying disposition" (that
is, within one year from the date he exercises the ISO or within two years from
the date of the ISO grant), he generally will recognize ordinary compensation
income equal to the lesser of (1) the fair market value of the shares on the
date of exercise minus the price he paid or (2) the amount he realized on the
sale. For a gift or another disqualifying disposition where a loss, if
sustained, would not usually be recognized, he will recognize ordinary income
equal to the fair market value of the shares on the date of exercise minus the
price he paid. Any amount realized on a disqualifying disposition that exceeds
the amount treated as ordinary compensation income (or any loss realized) will
be a long-term or a short-term capital gain (or loss), depending, under current
law, on whether he held the shares for at least 12 months. Metrocall can
generally take a tax deduction on a disqualifying disposition corresponding to
the ordinary compensation income he recognizes but cannot deduct the amount of
the capital gains.
Alternative Minimum Tax. The difference between the exercise price and the
fair market value of the ISO Shares on the date of exercise is an adjustment to
income for purposes of the AMT. The AMT (imposed to the extent it exceeds the
taxpayer's regular tax) is a certain percentage of an individual taxpayer's
alternative minimum taxable income that is lower than the regular tax rates but
covers more income. Taxpayers determine their alternative minimum taxable income
by adjusting regular taxable income for certain items, increasing that income by
certain tax preference items, and reducing this amount by the applicable
exemption amount. If a disqualifying disposition of the ISO Shares occurs in the
same calendar year as exercise of the ISO, there is no AMT adjustment with
respect to those ISO Shares. Also, upon a sale of ISO Shares that is not a
disqualifying disposition, alternative minimum taxable income is reduced when he
sells by the excess of the fair market value of the ISO Shares at exercise over
the amount paid for the ISO Shares.
Potential Limitation on Company Deductions. Code Section 162(m) denies a
deduction to any publicly held corporation for compensation it pays to certain
employees in a taxable year to the extent that compensation exceeds $1 million
for a covered employee. The tax rules disregard certain kinds of compensation,
including qualified "performance-based compensation," for purposes of the
deduction limitation. Compensation attributable to share options will qualify as
performance-based compensation, provided that: (1) the plan
10
<PAGE> 16
contains a per-employee limitation on the number of shares for which options may
be granted during a specified period; (2) the stockholders approve that
per-employee limitation; (3) the option is granted by a compensation committee
with voting members comprised solely of "outside directors"; and (4) either the
exercise price of the option is at least equal to the fair market value of the
shares on the date of grant, or the option is granted (or exercisable) only upon
the achievement (as certified by the compensation committee) of an objective
performance goal established by the compensation committee while the outcome is
substantially uncertain. Metrocall intends and expects the option grants to be
exempt from Section 162(m) as performance-based.
This is a summary of the general principles of current federal income tax
law applicable to the purchase of shares under the amended plan. While we
believe that the description accurately summarizes existing provisions of the
Internal Revenue Code of 1986, as amended, and its legislative history and
regulations, and the applicable administrative and judicial interpretations,
these statements are only summaries, and the rules in question are quite
detailed and complicated. Moreover, legislative, administrative, regulatory or
judicial changes or interpretations may occur that would modify such statements.
Individual financial situations may vary, and state and local tax consequences
may be significant. Therefore, no one should act based on this description
without consulting his own tax advisors concerning the tax consequences of
purchasing shares under the Plan and the disposing of those shares. In addition,
different rules may apply if the optionee is subject to foreign tax laws or pays
the exercise price using shares he already owns.
NEW PLAN BENEFITS
Other than the formula grants to non-employee directors, the Administrator
makes grants under the plan in its discretion. Consequently, we cannot fully
determine the amount or dollar value at this time, other than to note that the
Administrator has not granted options contingent on approval of the plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT OF THE
1996 STOCK OPTION PLAN.
3. AMENDMENT OF EMPLOYEE STOCK PURCHASE PLAN
Metrocall is asking you to approve an amendment to the Employee Stock
Purchase Plan that will increase the number of shares of Metrocall's common
stock Metrocall can issue from 1,000,000 to 2,000,000. The amendment is
effective and contingent upon stockholder approval.
What follows is a summary of the Employee Stock Purchase Plan as it will be
if the stockholders approve the amendment. We intend for this to be a fair and
complete summary of the plan, but we are also attaching as Appendix B the full
text of the plan, which governs.
SUMMARY OF THE PLAN
Purpose and Scope. The ESPP offers eligible employees the opportunity to
purchase shares of Metrocall common stock through after-tax payroll withholding.
The ESPP is intended to permit employees to acquire an equity interest in
Metrocall, which thereby will create a stronger incentive to expend maximum
effort for the growth and success of Metrocall and its subsidiaries. Funds
received by Metrocall under the ESPP may be used for any general corporate
purpose.
Eligibility. All common law employees of Metrocall and certain
subsidiaries (including part-time and seasonal employees other than employees
who are employed by Metrocall for less than one month at the beginning of the
Payroll Deduction Period) and holders of more than 5% of the common stock of
Metrocall and its subsidiaries, either directly or by attribution are eligible
to participate in the ESPP. As of March 15, 2000, there were approximately 3,700
employees currently eligible to participate in the ESPP.
Shares Available Under the ESPP. As amended, subject to stockholder
approval, the ESPP authorizes the issuance of up to 2,000,000 shares of
Metrocall common stock from authorized but unissued shares or from
11
<PAGE> 17
stock owned by Metrocall, including stock purchased on the market. The number of
shares issuable under the ESPP will be adjusted for stock dividends, stock
splits, reclassifications and other changes affecting the Metrocall common
stock. Because the ESPP permits participants to choose their own level of
participation, subject to overall tax and program limits, the specific amounts
to be granted to particular persons cannot be determined in advance.
Administration. The ESPP is administered by the Compensation Committee of
the Metrocall Board of Directors (the "Compensation Committee"). The
Compensation Committee has the authority and discretion to specify the terms and
conditions of options granted to employees (within the limitations of the ESPP)
and to otherwise interpret and construe the terms of the ESPP and any agreements
governing options granted under the ESPP. Under the ESPP, the Compensation
Committee (or the Metrocall Board of Directors) can lengthen or shorten the
Payroll Deduction Periods, increase the purchase price for shares, or make other
administrative adjustments. The ESPP also specifically provides for
indemnification of the Compensation Committee, other directors, and agents for
actions taken with respect to the ESPP.
OPTIONS GRANTED UNDER THE ESPP
General. Pursuant to the ESPP, employees have the option to purchase
shares. All options granted under the ESPP will be evidenced by participation
agreements. The Committee has broad discretion to determine the timing, amount,
exercisability, and other terms and conditions of options granted to employees.
No options granted or funds accumulated under the ESPP are assignable or
transferable, other than by will or in accordance with the laws of descent and
distribution. Payroll Deduction Periods for the ESPP are semi-annual.
Election to Participate. Employees must elect before the beginning of a
given Payroll Deduction Period to participate.
Exercise Price. The exercise price for options under the ESPP will be
equal to the lesser of 85% of the fair market value on the first day of the
Payroll Deduction Period and 85% of the fair market value on the last day of the
Payroll Deduction Period or such higher price as the Compensation Committee sets
before a Payroll Deduction Period begins. No participant can purchase more than
$25,000 worth of Metrocall common stock in all Payroll Deduction Periods ending
during the same calendar year. The closing price of a share of Metrocall common
stock, as reported on March 15, 2000 was $12.375.
Exercise. Options granted under the ESPP to employees will be
automatically exercised as of the last day of the Payroll Deduction Period,
unless the participant has requested withdrawal of his payroll contributions at
least thirty days earlier. The number of shares to be purchased will be
determined by dividing the dollars accumulated through payroll withholding by
the exercise price and rounding down to the nearest whole number of shares.
Termination of Service. If an employee's employment ends for any reason,
including death, the employee's account will be distributed, and the employee
will immediately cease to participate in the ESPP.
Stockholder Approval. In general, stockholder approval is only required
for changes to the extent necessary to preserve the ESPP's status as a plan
under Section 423 of the Code.
AMENDMENT OR TERMINATION OF THE ESPP
Subject to the foregoing, the Board of Directors may amend or terminate the
ESPP at any time and from time to time. Absent extension by the Board with
stockholder approval, the ESPP will terminate no later than December 31, 2007.
TAX CONSEQUENCES
The following summarizes certain federal income tax consequences of
participation in the ESPP. It does not cover employment taxes except as
specific, nor does it cover other federal, state, local, or foreign tax
consequences, if any.
Rights granted under the ESPP are intended to qualify for the favorable
federal income tax treatment provided by an employee
12
<PAGE> 18
stock purchase plan that qualifies under Section 423 of the Code.
A participant's withheld compensation will be post-tax. In other words, the
participant will be taxed on amounts withheld for the purchase of shares of
Metrocall common stock as if he had instead received his full salary or wages.
Other than this, no income will be taxable to a participant until disposition of
the shares acquired, and the method of taxation will depend upon how long the
shares were held before disposition.
If the purchased shares of common stock are disposed of more than two years
after the beginning of the applicable Payroll Deduction Period (July 1 or
January 1) and more than one year after the exercise date or if the participant
dies at any time while holding the stock, then the lesser of (a) the excess of
the fair market value of the stock at the time of such disposition or death over
the purchase price or (b) 15% of fair market value of the stock as of the
beginning of the applicable offering period will be treated as ordinary income.
Any further gain or any loss will be taxed as a long-term capital gain or loss.
Net long-term capital gains for individuals are currently subject to a maximum
marginal federal income tax rate that is less than the maximum marginal rate for
ordinary income.
If the participant sells or disposes of the stock before the expiration of
either of the holding periods described above (a "disqualifying disposition"),
then the excess of the fair market value of the stock on the exercise date over
the exercise price will be treated as ordinary income at the time of such
disposition. Metrocall may, in the future, be required to withhold income taxes
relating to such ordinary income from other payments made to the participant.
The balance of any gain on a sale will be treated as capital gain. Even if the
stock is sold for less than its fair market value on the exercise date, the same
amount of ordinary income is attributed to the participant, and a capital loss
is recognized equal to the difference between the sales price and the fair
market value of the stock on the exercise date. Any capital gain or loss will be
long- or short-term depending on whether the stock has been held for more than
one year.
There are no federal income tax consequences to Metrocall by reason of the
grant or exercise of rights under the Plan. Metrocall will, in general, be
entitled to a deduction to the extent amounts are taxed as ordinary income to a
participant by reason of a disqualifying disposition of the purchased shares of
stock, but will not be entitled to a deduction in respect of the ordinary income
realized by a participant upon a later disposition, or realized upon death.
Metrocall's deduction may be limited under Code Section 162(m) and may be
subject to disallowance for failure to report the optionee's income (which could
arise if an optionee does not notify Metrocall of the sale of stock in a
disqualifying disposition).
NEW PLAN BENEFITS
Benefits to be awarded under the ESPP to employees vary depending upon the
elections of the participants as to their level of participation. No
non-employee directors are eligible to participate. No additional benefits have
been granted under the ESPP that are conditioned upon approval of the ESPP
Amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO THE
EMPLOYEE STOCK PURCHASE PLAN.
4. RATIFICATION OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR
FISCAL YEAR 2000
Arthur Andersen has served as our independent public accountants since
1993. Metrocall would like to continue its relationship with Arthur Andersen. We
expect representatives of Arthur Andersen to be present at the Annual Meeting to
answer your questions and make a statement if they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
ARTHUR ANDERSEN LLP AS METROCALL'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 2000.
13
<PAGE> 19
STOCK OWNERSHIP
There were 43,652,258 shares of Metrocall's common stock issued and
outstanding on March 15, 2000. The following table sets forth certain
information, as of March 15, 2000, regarding beneficial ownership of Metrocall's
common stock by (1) each director and executive officer of Metrocall, (2) all
directors and executive officers of Metrocall as a group and (3) each person who
is known to Metrocall to own more than 5% of Metrocall's common stock. Because
the record date is March 15, 2000, the following table does not reflect the
36.66 million shares of Metrocall common stock issued on March 17, 2000. Holders
of these shares will not be entitled to vote at the Annual Meeting.
Under the rules of the SEC a beneficial owner of Metrocall's common stock
is a person who directly or indirectly has or shares voting power or investment
power with respect to the shares of common stock. Voting power is the power to
direct the vote of the shares. Investment power is the power to dispose of or
direct the disposition of the shares. Beneficial ownership of the shares also
includes those shares as to which voting power or investment power may be
acquired within 60 days.
The information on beneficial ownership in the table and the footnotes 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 OUTSTANDING
---- ---------------- ------------
<S> <C> <C>
Richard M. Johnston, Chairman of the Board and
Director............................................... 129,305(a) *
William L. Collins, III, President, Chief Executive
Officer, Vice Chairman of the Board and Director....... 1,074,933(b) 2.4%
Vincent D. Kelly, Chief Financial Officer, Treasurer and
Executive Vice President............................... 481,588(c) 1.1%
Steven D. Jacoby, Chief Operating Officer and Executive
Vice President......................................... 382,079(d) *
Ronald V. Aprahamian, Director........................... 95,000(e) *
Harry L. Brock, Jr., Director............................ 2,725,710(f) 6.2%
Michael Greene, Director................................. 51,280(g) *
Max D. Hopper, Director.................................. 49,000(h) *
Edward E. Jungerman, Director............................ 52,150(i) *
Jackie R. Kimzey, Director............................... 260,315(j) *
Francis A. Martin, III, Director......................... 92,000(k) *
Royce R. Yudkoff, Director............................... 49,061(l) *
All directors and executive officers as a group (12
persons)............................................... 5,442,421(m) 11.9%
Wellington Management Company, LLP....................... 2,419,542(n) 5.5%
75 State Street Boston, Massachusetts 02109
Paul Tudor Jones, II..................................... 2,373,820(o) 5.4%
600 Steamboat Road Greenwich, Connecticut 06830
</TABLE>
14
<PAGE> 20
- -------------------------
<TABLE>
<S> <C>
* Less than 1%.
(a) Includes 129,000 shares of Metrocall's common stock issuable
upon the exercise of options granted under Metrocall's stock
option plans.
(b) Includes 19,396 shares owned of record by USA
Telecommunications, Inc. ("USA Tel"); 305 shares owned by
William L. Collins, Jr.; and 711,846 shares issuable upon
the exercise of options.
(c) Includes 406,588 shares issuable upon the exercise of
options granted under Metrocall's stock option plans.
(d) Includes 988 shares owned of record by USA Tel and 309,477
shares issuable upon the exercise of options.
(e) Includes 40,000 shares of Metrocall's common stock issuable
upon exercise of options granted under Metrocall's stock
option plans.
(f) Includes 147,510 shares issuable upon exercise of options
granted under Metrocall's stock option plans.
(g) Includes 14,280 shares held by UBS Capital LLC, of which Mr.
Greene is a Managing Director and 37,000 shares of
Metrocall's common stock issuable upon exercise of options
granted under Metrocall's stock options plans.
(h) Includes 40,000 shares of Metrocall's common stock issuable
upon exercise of options granted under Metrocall's stock
option plans.
(i) Includes 51,250 shares of Metrocall's common stock issuable
upon exercise of options granted under Metrocall's stock
option plans.
(j) Includes 251,500 shares of Metrocall's common stock issuable
upon exercise of options granted under Metrocall's stock
option plans and 7,920 shares owned of record by certain
members of Mr. Kimzey's family.
(k) Includes 42,000 shares of Metrocall's common stock issuable
upon exercise of options granted under Metrocall's stock
option plans.
(l) Includes 37,000 shares of Metrocall's common stock issuable
upon exercise of options granted under Metrocall's stock
option plans.
(m) Includes an aggregate of 3,212,171 shares of Metrocall's
common stock issuable upon the exercise of options granted
under Metrocall's stock option plans; and 2,203,171 shares
through beneficial ownership
(n) Wellington Management Company, LLP, in its capacity as
investment adviser, may be deemed to beneficially own
2,419,542 shares of Metrocall, which shares are held of
record by clients of Wellington Management Company, LLP.
Includes 1,559,042 shares as to which Wellington Management
Company, LLP has shared power to vote or to direct the vote,
and 2,419,549 shares as to which it has shared power to
dispose or direct the disposition.
(o) The shares of Metrocall common stock reported herein as
beneficially owned are owned directly by Tudor BVI (590,870
shares), Tudor Proprietary Trading, L.L.C. (TPT) (151,910
shares), The Altar Rock Fund (5,710 shares), The Raptor
Global Portfolio Ltd. (Raptor Portfolio) (1,471,480 shares)
and The Upper Mill Capital Appreciation Fund, Ltd. (Upper
Mill) (153,810 shares). Each reporting person named has
shared power to vote or to direct the vote and shared power
to dispose or direct the disposition of their respective
shares. Tudor Investment Corporation (TIC) is the sole
general partner of The Altar Rock Fund and provides
investment advisory services to Raptor Portfolio, Tudor BVI
and Upper Mill. TIC may be deemed to beneficially own the
shares of common stock owned by each of such reporting
persons. TIC expressly disclaims such beneficial ownership.
Mr. Jones is the controlling shareholders of TIC and the
indirect controlling equity holder of TPT, Mr. Jones may be
deemed to beneficially own the shares of common stock deemed
beneficially owned by TIC and TPT. Mr. Jones expressly
disclaims such beneficial ownership.
</TABLE>
15
<PAGE> 21
EXECUTIVE OFFICERS
Executive officers of Metrocall serve at the pleasure of the Board of
Directors, subject to the provisions of their employment agreements. This table
sets forth the names of the executive officers of Metrocall, their ages as of
March 15, 2000, and their positions with Metrocall.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- ---------------------------------------------
<S> <C> <C>
William L. Collins, III............ 49 President and Chief Executive Officer
Vincent D. Kelly................... 40 Chief Financial Officer, Treasurer, and
Executive Vice President
Steven D. Jacoby................... 42 Chief Operating Officer and Executive Vice
President
</TABLE>
We set forth below certain biographical information concerning the
individuals listed above.
William L. Collins, III has been President and Chief Executive Officer of
Metrocall since January 1996. He 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. and Inciscent, Inc. From 1977 to
1988, Mr. Collins was President of C&C, Inc., 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. He 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 serves as Treasurer and Secretary of Inciscent, Inc. 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.
16
<PAGE> 22
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of all compensation during the
last three fiscal years for (1) Metrocall's Chief Executive Officer, and (2) the
executive officers of Metrocall whose aggregate annual salary and bonus exceeded
$100,000 for the year ended December 31, 1999 (the "named executive officers").
<TABLE>
<CAPTION>
FOR THE LONG TERM
YEAR COMPENSATION
NAME AND ENDED -------------- ALL OTHER
PRINCIPAL POSITION DECEMBER 31 SALARY BONUS(a) OPTIONS COMPENSATION
- ------------------------------------------ ------------- -------- -------- -------------- --------------
<S> <C> <C> <C> <C> <C>
William L. Collins, III................... 1999 $500,000 $425,000 150,000 $51,292(b)(d)
President and Chief Executive Officer 1998 496,159 425,000 500,000 36,442(b)
1997 372,690 337,500 200,000(c) 35,000(b)
Vincent D. Kelly.......................... 1999 $375,000 $325,000 100,000 $ 3,200(d)
Chief Financial Officer, 1998 322,692 325,000 150,000 2,500(d)
Treasurer and Executive Vice President 1997 249,230 225,000 256,588(c) 688(d)
Steven D. Jacoby.......................... 1999 $375,000 $325,000 100,000 $ 3,200(d)
Chief Operating Officer 1998 322,692 325,000 150,000 1,512(d)
and Executive Vice President 1997 249,230 225,000 150,000(c) 688(d)
</TABLE>
- -------------------------
(a) Includes bonuses earned in the year indicated, whether paid in the year
indicated or the following year.
(b) Payments by Metrocall for life insurance premiums pursuant to Mr. Collins'
employment contract.
(c) 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.
(d) Allocation of employer contribution under the Metrocall, Inc. Savings and
Retirement Plan.
OPTION GRANTS IN 1999
The following table sets forth information concerning grants of stock
options to the named executive officers during the fiscal year ended December
31, 1999.
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF POTENTIAL REALIZABLE
SHARES VALUE AT ASSUMED
NUMBER UNDERLYING ANNUAL RATES OF
OF SHARES OPTIONS STOCK PRICE 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...... 150,000 8.6% $3.219 5/5/09 $303,662 $769,539
Vincent D. Kelly............. 100,000 5.7% 3.219 5/5/09 202,441 513,026
Steven D. Jacoby............. 100,000 5.7% 3.219 5/5/09 202,441 513,026
</TABLE>
- -------------------------
(a) Options granted to Messrs. Collins, Kelly, and Jacoby become exercisable on
May 5, 2001 two years from the date of grant.
AGGREGATE OPTION EXERCISES IN 1999 AND OPTION YEAR-END VALUE
No options were exercised in 1999. The following table sets forth the
fiscal year-end value of all unexercised options held by the named executive
officers.
17
<PAGE> 23
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1999 DECEMBER 31, 1999
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------------------- -------------------------
<S> <C> <C>
William L. Collins, III........... 711,846/375,000 $ 7,670/--
Vincent D. Kelly.................. 406,588/250,000 --/--
Steven D. Jacoby.................. 309,477/250,000 $ 6,136/--
</TABLE>
EMPLOYMENT ARRANGEMENTS
Messrs. Collins, Kelly and Jacoby are parties to employment contracts that,
as extended, provide for terms of employment through December 31, 2002 (with
automatic extensions). Under these agreements, as amended effective January 1,
1999, Messrs. Collins, Kelly and Jacoby have salaries of $500,000, $375,000, and
$375,000 respectively.
Termination of Employment. Each of Messrs. Collins', Kelly's and Jacoby's
contracts provides for certain payments 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. In such event, 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 each contract include the termination of
any of the other executives for reasons other than cause, death, or disability.
Change of Control. Messrs. Collins, Kelly and Jacoby also are parties to
separate change of control agreements which, as extended, run through December
31, 2002 (with automatic extensions). Changes of control are defined as (1) any
action required to be reported under Item 6(e) of Schedule 14A as a "change of
control" (generally a 50% change in share ownership but other changes may also
qualify); (2) any person's acquiring more than 25% of the voting power of
Metrocall voting stock without the Board's prior approval; (3) changes in Board
membership such that during any two consecutive years, Board members at the
beginning constitute less than a majority of the Board of Directors 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); (4) a merger or
reorganization in which Metrocall does not survive or in which the outstanding
shares of Metrocall are converted into other shares or securities (except
through a reincorporation or creation of a holding company); (5) a more than 50%
turnover of voting power in a merger, reorganization, or similar transaction
approved by stockholders, unless 75% of the Board of Directors carries over to
the new entity; or (6) 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 "Termination of Employment"), paid health coverage for up
to 18 months, and certain other benefits. Payment would be grossed up, as
necessary, to provide that the executive receives
18
<PAGE> 24
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).
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 in the face of high demand for a management
team with experience in consolidating the paging and wireless messaging industry
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
messaging devices in service, on an annual basis, and, on a longer term basis,
growth in stockholder value as measured by stock price. (The Compensation
Committee put a diminished emphasis on short-term improvements in stock price,
given the continuing struggles of many of Metrocall's competitors and the
apparent disfavor of the industry with market analysts.) The Compensation
Committee also considered the more subjective factor of the management team's
success in acquiring and integrating industry players. In establishing
appropriate levels for base salary, the Compensation Committee considered base
salary levels of senior executives at other public paging and wireless messaging
companies, particularly in the peer group described in the performance graph set
forth in this Proxy Statement on page ("Peer Group") and the particular
officer's overall contributions to Metrocall during the past year and previous
years. 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. The
Compensation Committee also reviewed and considered compensation surveys from
Towers Perrin and the HayGroup. The total compensation package was designed to
be near the 75th percentile for comparable companies.
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 1999 were based on the Compensation Committee's
overall qualitative evaluation of the performance and accomplishments of the
executive officers for the year. Messrs. Collins', Kelly's and Jacoby's bonuses
were based on their overall contribution to Metrocall and a general assessment
of Metrocall's performance for the year, together with the factors described
below under Chief Executive Officer's Compensation.
Stock Option Grants. The Compensation Committee believes that stock
options are necessary to focus each executive's attention on Metrocall'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 Metrocall. 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 1999, the
Compensation Committee approved awards of options covering 100,000 shares each
for Messrs. Kelly and Jacoby, to be exercisable beginning on May 5, 2001.
Chief Executive Officer's Compensation. In setting Mr. Collins'
compensation for 1999 and awarding bonuses with respect to that year, the
Compensation Committee considered the following factors: growth in revenues,
cash flow and subscribers; successful integration of the
19
<PAGE> 25
acquisition of the Advanced Messaging Division of AT&T Wireless Services, Inc.,
which was acquired in 1998, and development and implementation of strategic
initiatives in the advanced wireless technologies area. It considered each of
those to be substantially positive developments for Metrocall's long-term
success. It also decided that additional stock-based incentives, in the form of
options, were appropriate both to bring Mr. Collins' long-term compensation
closer to that of others in the industry and to continue to tie substantial
parts of his compensation to Metrocall's future stock price appreciation. To
that end, the Compensation Committee granted an option covering 150,000 shares
in 1999 to be exercisable beginning on May 5, 2001. The Board subsequently
approved all aspects of Mr. Collins' compensation.
Compensation Deduction Limit. The Securities and Exchange Commission
requires that this report comment on Metrocall's policy with respect to a
special rule under the tax laws, Section 162(m) of the Internal Revenue Code.
That section can limit the deductibility on a corporation's federal income tax
return of compensation of $1 million to any of the named officers. A company can
deduct compensation (including from exercising options) outside that limit if it
pays the compensation under a plan that its shareholders approve and that is
performance-related and non-discretionary. Option exercises are typically
deductible under such a plan if granted with exercise prices at or above the
market price when granted. The Committee's policy with respect to this section
is to make every reasonable effort to ensure that compensation complies with
Section 162(m), while simultaneously providing Company executives with the
proper incentives to remain with and increase the prospects of Metrocall. Given
the way we administer the option plan, we think it is unlikely that Metrocall
will lose a deduction under this section for options. Metrocall did not pay any
compensation with respect to 1999 that would be outside the limits of Section
162(m).
Francis A. Martin, III, Chairman
Michael Greene
20
<PAGE> 26
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Metrocall leases certain of its office space in Alexandria, Virginia from
Beacon Communications Associates, L.L.C., a Virginia limited liability company
that engages in real estate investment and leasing. The lease terminates in July
2010. Metrocall paid rent for the premises during 1999 on a monthly basis in the
annual amount of $229,000. Metrocall expects the annual rent for 2000 to be
approximately $229,000. Beacon Communications is owned by Harry L. Brock, Jr.,
his wife Suzanne S. Brock, a former director of Metrocall, and other members of
their family.
Metrocall also leases an antenna site from Beacon Communications. The lease
terminates in November 2010. Metrocall paid rent for the site during 1999 on a
monthly basis in the annual amount of $50,000. Metrocall expects the annual rent
for 2000 to be approximately $50,000.
Metrocall leases its Harrisburg, Pennsylvania office space from 227
Associates, a Virginia general partnership that engages in real estate
investment and leasing. Metrocall is a general partner and has a 10% interest in
227 Associates. Mr. Brock and Ms. Brock are general partners of 227 Associates,
holding 10% and 60% interests, respectively. Metrocall paid rent for the
premises during 1999 on a monthly basis in the annual amount of approximately
$37,000. Metrocall expects the annual rent for 2000 to be approximately $37,000.
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
1999, Metrocall paid rent on a monthly basis in the annual amounts of
approximately $131,000 to 314 Associates and approximately $54,000 to Franklin
Associates. During 2000, Metrocall expects that its rent to 314 Associates and
Franklin Associates will be approximately $131,000 and $54,000, 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 entered into a Tax Indemnification Agreement with,
among others, Messrs. Brock and Kelly and Ms. Brock (the "Subchapter S
stockholders"), which agreement relates 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 reallocation of income and deductions between the
period during which Metrocall was treated as an S Corporation 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 taxable year
subsequent to the initial public 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 taxable year in which Metrocall was an S Corporation to a
taxable year subsequent to the consummation of the initial public 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
21
<PAGE> 27
tax purposes. As of March 15, 2000, no indemnification obligations have arisen
under the Tax Indemnification Agreement with respect to any of the parties
thereto.
Mr. William L. Collins, III, President, Chief Executive Officer, Director,
and Vice Chairman of the Board of Directors of Metrocall, is a general partner
in three real estate partnerships that leased commercial office space to
Metrocall in Alexandria, Virginia during 1999. Mr. Steven D. Jacoby, Chief
Operating Officer and Executive Vice President, is a general partner in one of
those three real estate 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, 1999. Metrocall expects that the annual rent for the
remaining lease in 2000 will amount to approximately $14,000.
ProNet (and Metrocall as successor-in-interest) entered into an Incentive
Compensation Agreement dated July 7, 1997 with Impulse Telecommunications
Corporation regarding the development of certain messaging services. Mr.
Jungerman is the President of Impulse Telecommunications Corporation. Maximum
compensation under the Incentive Compensation Arrangement is $350,000. In
addition, during 1998, Metrocall has entered into a consulting services
agreement with Impulse Telecommunications Corporation under which costs of
services approximated $180,000 1999 and is expected to be approximately $60,000
in 2000.
Metrocall made payments of approximately $260,000 and $365,000 during 1999
to Ray D. Russenberger and Elliott H. Singer, respectively under their
Consulting, No Conflict and Nondisclosure Agreement. Mr. Russenberger was a
director of Metrocall until May 1999 and Mr. Singer was a director of Metrocall
until his resignation in October 1999.
Mr. George P. Stamas, who become a member of the Board in March 2000, was a
partner with the law firm of Wilmer, Cutler & Pickering through December 1999
and currently a consultant to that firm. Metrocall has retained and will
continue to receive representation from Wilmer, Cutler & Pickering on various
corporate matters in 2000. Metrocall has paid fees to this law firm during 1999
in an amount that did not exceed five percent of this law firm's gross revenues
for the firm's last full fiscal year.
Metrocall has agreed to provide services in an amount of $15 million to
Inciscent, Inc. in return for Metrocall's ownership interest in Inciscent. Some
members of Metrocall's Board of Directors have relationships with entities that
have agreed to provide services or cash to Inciscent. Metrocall believes all
transactions between Inciscent and Metrocall and between Inciscent and those
entities of which some of Metrocall's directors are directors or officers are on
terms that are no less favorable than arms-length.
22
<PAGE> 28
OTHER INFORMATION
COMPANY PERFORMANCE
We set forth below a graph that compares the cumulative total stockholder
return on the common stock of Metrocall with the cumulative total return on (1)
the Nasdaq Market Index and (2) a Peer Group Index. The Peer Group Index is
comprised of the following publicly traded companies that engage in the paging
and wireless messaging line of business: Arch Communication Group, Inc. (APGR),
Paging Network, Inc. (PAGE) and Weblink Wireless, Inc. (WLNK), formerly known as
PageMart Wireless, Inc. The Peer Group Index previously included ProNet Inc.
(PNET) and Page America Group, Inc. (PGG). Metrocall acquired ProNet on December
30, 1997. Page America was removed from listing on the AMEX in May 1996.
Accordingly, no quotations for those companies are available.
The graph plots the growth in value of an initial $100 investment on
December 31, 1994 through December 31, 1999, assuming the reinvestment of
dividends. Measurement points are on December 31, 1994, December 31, 1995,
December 31, 1996, December 31, 1997, December 31, 1998 and December 31, 1999.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
OF METROCALL, NASDAQ MARKET AND PEER GROUP
<TABLE>
<CAPTION>
METROCALL, INC. PEER GROUP NASDAQ MARKET INDEX
--------------- ---------- -------------------
<S> <C> <C> <C>
12/30/1994 $ 100.00 $ 100.00 $ 100.00
12/29/1995 112.50 142.83 129.71
12/31/1996 29.50 86.92 161.18
12/31/1997 29.04 66.59 197.16
12/31/1998 25.74 32.64 278.08
12/31/1999 9.93 33.01 490.46
</TABLE>
As of March 15, 2000 an initial $100 investment made in Metrocall on
December 31, 1994 would have had a value of $72.88. Metrocall has also
outperformed the other companies in its peer group since the beginning of 2000.
23
<PAGE> 29
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on our records and other information, we believe that our directors
and officers reported all transactions in Metrocall's common stock and options
on a timely basis during the fiscal year ended December 31, 1999.
PROPOSALS FOR THE 2001 ANNUAL MEETING OF THE STOCKHOLDERS
Metrocall expects that its 2001 Annual Meeting of Stockholders will be held
in May 2001. If you want to include a proposal in the proxy statement for
Metrocall's 2000 Annual Meeting, send the proposal to:
Metrocall, Inc.
Attn: Secretary
6677 Richmond Highway
Alexandria, Virginia 22306
Proposals must be received on or before November 30, 2000, to be included
in next year's proxy statement. Please note that proposals must comply with all
of the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as
amended, as well as the requirements of Metrocall's Restated Certificate of
Incorporation and Bylaws. Under Rule 14a-4 of the Securities Exchange Act of
1934, as amended, Metrocall will be able to use proxies given to it for next
year's meeting to vote for or against any stockholder proposal that is submitted
other than pursuant to Rule 14a-8 at Metrocall's discretion, unless the proposal
is submitted to Metrocall on or before November 30, 2000.
By Order of the Board of Directors
/s/ RICHARD M. JOHNSTON
Richard M. Johnston
Chairman of the Board
Alexandria, Virginia
April 3, 2000
24
<PAGE> 30
APPENDIX A: 1996 STOCK OPTION PLAN
AS AMENDED, EFFECTIVE MARCH 15, 2000
METROCALL, INC., a Delaware corporation (the "Corporation"), sets forth
herein the terms of the 1996 Stock Option Plan (the "Plan") as follows:
1. PURPOSE
The Plan is intended to advance the interests of the Corporation by
providing eligible employees and outside directors ("Eligible Directors") of the
Corporation, its predecessors, and its affiliates an opportunity to acquire or
increase their proprietary interest in the Corporation, which thereby will
create a stronger incentive to expend maximum effort for the growth and success
of the Corporation and its subsidiaries. Options granted under the Plan (the
"Options") to employees may be nonqualified stock options ("NQSOs") or may be
"incentive stock options" ("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended from time to time (the "Code"), or the
corresponding provision of any subsequently enacted tax statute. Options granted
to Eligible Directors must be NQSOs.
2. ADMINISTRATION
2.1 COMMITTEE
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Corporation (the "Board"). The
Board may remove members, add members, and fill vacancies on the Committee from
time to time, all in accordance with the Certificate of Incorporation and Bylaws
of the Corporation and applicable law. The Board may also act under the Plan as
though it were the Committee.
2.2 ACTION BY COMMITTEE
The Committee shall have such powers and authorities related to the
administration of the Plan as are consistent with the Certificate of
Incorporation and Bylaws of the Corporation and applicable law. The Committee
shall have the full power and authority to take all actions and to make all
determinations required or permitted under the Plan and any Option granted
hereunder. The Committee shall have the full power and authority to take all
other actions and determination not inconsistent with the specific terms and
provisions of the Plan that the Committee deems to be necessary or appropriate
to the administration of the Plan. The Committee's powers shall include, but not
be limited to, the power to amend, waive, or extend any provision or limitation
of any Option. All such actions and determinations shall be by the affirmative
vote of a majority of the members of the Committee present at a meeting or by
unanimous consent of the Committee executed in writing in accordance with the
Certificate of Incorporation and Bylaws of the Corporation and applicable law.
The interpretation and construction by the Committee of any provision of the
Plan or any Option granted hereunder shall be final and conclusive.
Notwithstanding the foregoing, the Committee shall have no discretion over
the amount, price or timing of options granted to Eligible Directors.
2.3. NO LIABILITY
No member of the Board or of the Committee shall be liable for any action
or determination made, or any failure to take or make an action or
determination, in good faith with respect to the Plan.
2.4. APPLICABILITY OF RULE 16b-3
Those provisions of the Plan that make express reference to Rule 16b-3
shall apply only to persons who are required to file reports under Section 16(a)
of the Exchange Act.
3. STOCK AND OTHER RIGHTS
The stock that may be issued pursuant to Options shall be shares of common
stock of the Corporation (the "Stock"), which shares may be treasury shares or
authorized but unissued shares. The number of shares of Stock that may be issued
under the Plan shall not exceed in the
A-1
<PAGE> 31
aggregate 8,016,000 shares of Stock, which number of shares is subject to
adjustment as provided in Section 12 and which number shall increase to
10,516,000 if the stockholders approve the increase and shall be reduced by any
shares previously issued under the Plan or then outstanding under Options. If
any Option expires, terminates or is terminated for any reason prior to exercise
in full, the shares of Stock that were subject to the unexercised portion of
such Option shall be available immediately for future grants of Options under
the Plan (but will be counted against that calendar year's limit for a given
individual).
No additional options will be granted under either the Metrocall, Inc.
Amended and Restated 1993 Stock Option Plan or the Metrocall, Inc. Directors
Stock Option Plan (together, the "Predecessor Plans"). However, any shares of
Stock that were available for grants under the Predecessor Plans as of the date
of such approval but had not been the subject of options granted under the
Predecessor Plans shall be available for grants under this Plan, provided,
however, that such shares shall not be available for the grant of Options
intended to qualify as Incentive Stock Options.
The maximum number of shares that may be granted under Options for a single
individual in a calendar year may not exceed 1,000,000. (The individual maximum
applies only to Options first made under this Plan and not to Options made in
substitution of a prior employer's options or other incentives, except as Code
Section 162(m) otherwise requires.)
The aggregate number of shares of Stock that may be issued under incentive
stock options may not exceed 3,000,000, and their authorization for use with
ISOs does not prevent their use instead with NQSOs.
4. ELIGIBILITY
Options may be granted under the Plan to any employee or director of the
Corporation or any Subsidiary (including any such employee who is an officer or
director of the Corporation or any Subsidiary) and as the Committee shall
determine and designate from time to time prior to expiration or termination of
the Plan. (Individuals who have been granted Options are referred to as
"Optionees.") An individual may hold more than one Option, subject to such
restrictions as are provided herein.
The Administrator may also grant Options in substitution for options or
other equity interests held by individuals who become Employees of the Company
or of an Eligible Subsidiary as a result of the Company's acquiring or merging
with the individual's employer or acquiring its assets or to persons who were
employees or directors of the previous employer and received an option in that
capacity even if they do not become Employees. In addition, the Administrator
may provide for the Plan's assumption of options granted outside the Plan to
persons who would have been eligible under the terms of the Plan to receive a
grant. If necessary to conform the Options to the interests for which they are
substitutes, the Administrator may grant substitute Options under terms and
conditions that vary from those the Plan otherwise requires.
5. EFFECTIVE DATE AND TERM
5.1. EFFECTIVE DATE
The Plan became effective as of April 5, 1996 (the "Effective Date") and
was approved by the stockholders on May 1, 1996. The Board approved amendments
to the Plan on February 5, 1997, December 17, 1997, February 4, 1998, February
3, 1999, and March 15, 2000.
5.2. TERM
The Plan shall terminate ten years after the Effective Date unless
previously terminated under Section 11.
6. EMPLOYEE STOCK OPTIONS
6.1 GRANT OF OPTIONS
Subject to the terms and conditions of the Plan, the Committee may, at any
time and from time to time prior to the termination of the Plan, grant to such
eligible persons as the Committee may determine, Options to purchase such number
of shares of Stock on such terms
A-2
<PAGE> 32
and conditions as the Committee may determine, including any terms or conditions
that may be necessary to qualify such Options as Incentive Stock Options under
Code Section 422. The date as of which the Committee approves the grant of an
Option shall be considered the date on which such Option is granted. Neither the
employee nor any person entitled to exercise any rights hereunder shall have any
of the rights of a stockholder with respect to the shares of Stock subject to an
Option except to the extent that the certificates for such shares have been
issued upon the exercise of the Option.
6.2 LIMITATION ON INCENTIVE STOCK OPTIONS
An Option granted to an employee shall constitute an Incentive Stock Option
only to the extent that the aggregate fair market value (determined at the time
the Option is granted) of the Stock with respect to which Incentive Stock
Options are exercisable for the first time by the Optionee during any calendar
year (under the Plan and all other plans of the Corporation and its parent and
subsidiary corporations, within the meaning of the Code Section 422(d)), does
not exceed $100,000. This limitation shall be applied by taking Options into
account in the order in which such Options were granted.
6.3 OPTION AGREEMENTS
All Options granted to employees pursuant to the Plan shall be evidenced by
written agreements in such form or forms as the Committee shall from time to
time determine. Option agreements may be amended by the Committee from time to
time and need not contain uniform provisions.
6.4 OPTION PRICE
The purchase price of each share of Stock subject to an Option issued under
Section 6 shall be fixed by the Committee. In the case of an Option not intended
to constitute an Incentive Stock Option, the option price shall be not less than
the par value of the Stock covered by the Option. In the case of an Option that
is intended to be an Incentive Stock Option, the option price shall be not less
than the greater of par value of the Shares or 100% of the Fair Market Value (as
defined below) of a share of Stock covered by the Option on the date the Option
is granted; provided, however, that in the event the employee would otherwise be
ineligible to receive an Incentive Stock Option by reason of the provisions of
Code Sections 422(b)(6) and 424(d) (relating to more-than-10%-stock-owners), the
option price of an Option that is intended to be an Incentive Stock Option shall
be not less than the greater of par value or 110% of the Fair Market Value of a
share of Stock covered by the Option at the time such Option is granted.
Fair Market Value of Stock for purposes of this Plan shall mean, in the
event that the Stock is listed on an established national or regional stock
exchange, is admitted to quotation on the National Association of Security
Dealers Automated Quotation System, or is publicly traded on an established
securities market, the closing price of the Stock on such exchange or system or
in such market (the highest such closing price if there is more than one such
exchange or market on the date the Option is granted) or, if there is no such
closing price, then the mean between the highest bid and lowest asked price or
between the high and low prices on such date, or, if no sale of stock has been
made on such day, on the preceding day on which any such sale shall have been
made.
6.5 TERM
Each Option granted to an employee under the Plan shall terminate and all
rights to purchase Stock thereunder shall cease upon the expiration of ten years
from the date such Option is granted, or on such prior date as may be fixed by
the Committee and stated in the option agreement relating to such Option;
provided, however, that in the event the employee would otherwise be ineligible
to receive an Incentive Stock Option by reason of the provisions of Code
Sections 422(b)(6) and 424(d)(relating to more-than-10%-stock-owners), an Option
granted to such employee that is intended to be an Incentive Stock Option shall
in no event be exercisable after the
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expiration of five years from the date it is granted.
6.6 EXERCISE BY OPTIONEE
Only the employee receiving an Option (or, in the event of the Optionee's
legal incapacity or incompetency, the employee's guardian or legal
representative, and in the case of the employee's death, the employee's estate)
may exercise the Option.
6.7 OPTION PERIOD AND LIMITATIONS ON EXERCISE
Each Option granted under the Plan to an employee shall be exercisable in
whole or in part at any time and from time to time over a period commencing on
or after the date of grant of the Option and ending upon expiration or
termination of the Option, as the Committee shall determine and set forth in the
option agreement. Without limiting the foregoing, the Committee, subject to the
terms and conditions of the Plan, may in its sole discretion provide that the
Option granted to an employee may not be exercised in whole or in part for any
period or periods of time during which such Option is outstanding as the
Committee shall determine and set forth in the option agreement. Any such
limitation on the exercise of an Option may be rescinded, modified or waived by
the Committee, in its sole discretion, at any time and from time to time after
the date of grant of such Option.
6.8 METHOD OF EXERCISE
An Option that is exercisable by an employee hereunder may be exercised by
delivery to the Corporation on any business day, at its principal office
addressed to the attention of the Corporate Secretary, of written notice of
exercise. Such notice shall specify the number of shares for which the Option is
being exercised and shall be accompanied by payment in full of the option price
of the shares for which the Option is being exercised. Payment in full of the
Option price need not accompany the written notice of exercise provided the
notice directs that the stock certificates for the shares issued upon the
exercise be delivered to a licensed broker acceptable to the Corporation as the
agent for the individual exercising the option and at the time the stock
certificates are delivered to the broker, the broker will tender to the
Corporation cash or cash equivalents acceptable to the Corporation equal to the
exercise price.
Payment of the option price for the shares of Stock purchased pursuant to
the exercise of an Option by an employee shall be made, as determined by the
Committee and set forth in the option agreement, as follows:
(a) in cash or by certified check payable to the order of the
Corporation;
(b) through the tender to the Corporation of shares of Stock, which
must have been held by the individual exercising the option for at least
six months at the time of surrender and which shall be valued, for purposes
of determining the extent to which the option price has been paid, at their
Fair Market Value on the date of exercise; or
(c) by a combination of the foregoing methods or any other method that
the Committee may allow.
The Committee may, in the option agreement and after due consideration of
the effect on the Corporation's financial statements, provide that the Optionee
can direct the Corporation to withhold shares of Stock otherwise issuable
pursuant to exercise of an Option equal in value to the option price or any
portion thereof.
Notwithstanding the preceding, the Committee may, in its discretion, impose
and set forth in the option agreement such limitations or prohibitions on the
methods of exercise as the Committee deems appropriate. Promptly after the
exercise of an Option and the payment in full of the option price of the shares
of Stock covered thereby, the individual exercising the Option shall be entitled
to the issuance of a Stock certificate or certificates evidencing such
individual's ownership of such shares. A separate Stock certificate or
certificates shall be issued for any shares purchased pursuant to the exercise
of an Option that is an Incentive Stock
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Option, which certificate or certificates shall not include any shares that were
purchased pursuant to the exercise of an Option that is not an Incentive Stock
Option. An individual holding or exercising an Option shall have none of the
rights of a stockholder until the shares of Stock covered thereby are fully paid
and issued to such individual and, except as provided in Section 12, no
adjustment shall be made for dividends or other rights for which the record date
is prior to the date of such issuance.
6.9 WITHHOLDING
The Corporation shall have the right to withhold, or require an individual
exercising an Option to remit to the Corporation, an amount sufficient to
satisfy any applicable federal, state or local withholding tax requirements
imposed with respect to the exercise of Options. To the extent permissible under
applicable tax, securities and other laws, the option agreement may permit
satisfaction of a tax withholding requirement by withholding shares of Stock
issued as a result of the exercise of an Option.
7. DIRECTOR STOCK OPTIONS
7.1 GRANT OF FORMULA OPTIONS
On the Effective Date, an Eligible Director then serving on the Board shall
be granted a Formula Option to purchase 10,000 shares of Stock. Thereafter, each
Eligible Director whose Commencement of Service is after the Effective Date
shall be granted a Formula Option to purchase 10,000 shares of Stock on the date
of such Commencement of Service. "Commencement of Service" means the date of
commencement of the Eligible Director's first term as an Eligible Director,
which shall be the earlier of (a) the date of the first meeting of the Board
attended by the Eligible Director as a member of the Board, including the
meeting at which such Eligible Director was first appointed as a member of the
Board, if attended by such Eligible Director, or (b) the date of the first
action by written consent joined by the Eligible Director. Each Eligible
Director shall be granted an additional Formula Option to purchase 1,000 shares
of Stock on each anniversary of the date on which he or she was granted the
initial Formula Option pursuant to this Section 7.1, provided the Eligible
Director continues to qualify as such on that anniversary date.
7.2 DISCRETIONARY GRANTS TO DIRECTORS
Subject to the terms and conditions of the Plan, the Board may, at any time
and from time to time, grant to such Eligible Directors as the Board may
determine, Options, in addition to the Formula Options, to purchase such number
of shares of Stock on such terms and conditions as the Board may determine. The
date as of which the Board approves the grant of an Option shall be considered
the date on which such Option is granted. Neither the director nor any person
entitled to exercise any rights hereunder shall have any of the rights of a
stockholder with respect to the shares of Stock subject to an Option except to
the extent that the certificates for such shares have been issued upon the
exercise of the Option.
7.3 EXERCISE PRICE
The exercise price of each Option granted to an Eligible Director shall be
the Fair Market Value of the Stock subject to the Option on the date the Option
is granted, except as the Board otherwise specifies.
7.4 VESTING
Formula Options granted to Eligible Directors shall be fully vested and
exercisable six months after the date of grant. The Board may specify the same
or a different vesting schedule for other Options granted to Eligible Directors.
7.5 EXERCISE OF OPTION
Subject to Section 7.4 hereof, an Eligible Director may, at any time,
exercise an Option with respect to all or any part of the shares of Stock then
subject to such Option by giving the Corporation written notice of exercise,
specifying the number of shares as to which the Option is being exercised. Such
notice shall be addressed to the Corporate Secretary at the Corporation's
principal office, and shall be effective when actually received (by personal
delivery, fax or other delivery) by the Corporate Secretary. Such notice shall
be accompanied by
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an amount equal to the option price of such shares, in the form of any one or
combination of the following: cash or cash equivalents, or shares of Stock
valued at Fair market Value in accordance with the Plan. Shares of Stock
acquired by the Eligible Director through exercise of an Option may be
surrendered in payment of the Option price of Options; provided however, that
any Stock surrendered in payment must have been held by the Eligible Director
for more than six months at the time of surrender. Payment in full of the Option
price need not accompany the written notice of exercise provided the notice
directs that the Stock certificate or certificates for the shares for which the
Option is exercised be delivered to a licensed broker acceptable to the
Corporation as the agent for the individual exercising the Option and, at the
time such Stock certificate or certificates are delivered, the broker tenders to
the Corporation cash (or cash equivalents acceptable to the Corporation) equal
to the Option price.
7.6 TERM OF OPTION
Options granted to Eligible Directors shall terminate and all rights to
purchase shares thereunder shall cease upon the expiration of ten years from the
date such Option is granted. Termination of the Optionee's status as an Eligible
Director shall not cause a Formula Option to terminate, but the Board may
designate termination as a director as a grounds for forfeiture of other Options
granted to Eligible Directors.
All options granted to Directors pursuant to Section 7 shall be evidenced
by uniform, written agreements setting forth the terms specified in this Section
7. The Board, but not the Committee, may amend the terms of any such agreements
relating to the amount, price or timing of the awards granted to Eligible
Directors.
8. TRANSFERABILITY OF OPTIONS
No Option shall be assignable or transferable by the Optionee to whom it is
granted, other than by will or the laws of descent and distribution.
9. USE OF PROCEEDS
The proceeds received by the Corporation from the sale of Stock pursuant to
Options shall constitute general funds of the Corporation.
10. REQUIREMENTS OF LAW
10.1 GENERAL
The Corporation shall not be required to sell or issue any shares of Stock
under any Option if the sale or issuance of such shares would constitute a
violation by the individual exercising the Option or by the Corporation of any
provision of any law or regulation of any governmental authority, including,
without limitation, any federal or state securities laws or regulations. If at
any time the Corporation shall determine, in its discretion, that the listing,
registration or qualification of any shares subject to the Option upon any
securities exchange or under any state or federal law, or the consent of any
government regulatory body, is necessary or desirable as a condition of, or in
connection with, the issuance or purchase of shares, the Option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Corporation, and any delay caused thereby shall in no way
affect the date of termination of the Option. Specifically in connection with
the Securities Act of 1933, as amended (the "Securities Act"), upon exercise of
any Option, unless a registration statement under the Securities Act is in
effect with respect to the shares of Stock covered by such Option, the
Corporation shall not be required to sell or issue such shares unless the
Corporation has received evidence satisfactory to the Corporation that the
Optionee may acquire such shares pursuant to an exemption from registration
under the Securities Act. Any determination in this connection by the Committee
shall be final and conclusive. The Corporation may, but shall in no event be
obligated to, register any securities covered hereby pursuant to the Securities
Act. The Corporation shall not be obligated to take any affirmative action in
order to cause the exercise of an Option or the issuance of shares pursuant
thereto to comply
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with any law or regulation of any governmental authority. As to any jurisdiction
that expressly imposes the requirement that an Option shall not be exercisable
unless and until the shares of Stock covered by such Option are registered or
are subject to an available exemption from registration, the exercise of such
Option (under circumstances in which the laws of such jurisdiction apply) shall
be deemed conditioned upon the effectiveness of such registration or the
availability of such an exemption.
10.2 RULE 16b-3
The Plan is intended to qualify for the exemption provided by Rule 16b-3
under the Exchange Act. To the extent any provision of the Plan or action by the
Committee does not comply with the requirements of Rule 16b-3, it shall be
deemed inoperative, to the extent permitted by law and deemed advisable by the
Committee, and shall not affect the validity of the Plan. In the event Rule
16b-3 is revised or replaced, the Board may exercise discretion to modify the
Plan in any respect necessary to satisfy the requirements of the revised
exemption or its replacement.
11. AMENDMENT AND TERMINATION
The Board may, at any time and from time to time, amend, suspend or
terminate the Plan as to any shares of Stock as to which Options have not been
granted; provided, however, that no amendment by the Board with respect to ISOs
shall be made without stockholder approval when required to comply with Section
422 of the Code. The Corporation also may retain the right in an option
agreement to cause a forfeiture of the shares or gain realized by an Optionee on
account of the Optionee taking actions in "competition with the Corporation," as
defined in the applicable option agreement. Furthermore, the Corporation may, in
the option agreement, retain the right to annul the grant of an Option if the
holder of such grant was an employee of the Corporation or a Subsidiary and is
terminated "for cause," as described in the applicable option agreement. Except
as permitted under Sections 10 or 12, no amendment, suspension or termination of
the Plan or option agreement shall, without the consent of the Optionee, alter
or impair rights or obligations under any Option previously granted under the
Plan.
12. EFFECT OF CHANGES IN CAPITALIZATION
12.1 CHANGES IN STOCK
If the number of outstanding shares of Stock is increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Corporation by reason of any recapitalization,
reclassification, stock split-up, combination of shares, exchange of shares,
stock dividend or other distribution payable in capital stock, or other increase
or decrease in such shares effected without receipt of consideration by the
Corporation, occurring after the Effective Date of the Plan, a proportionate and
appropriate adjustment shall be made by the Corporation in the number and kind
of shares for which Options are outstanding, so that the proportionate interest
of the Optionee immediately following such event shall, to the extent
practicable, be the same as immediately prior to such event. Any such adjustment
in outstanding Options shall not change the aggregate Option Price payable with
respect to shares subject to the unexercised portion of the Option outstanding
but shall include a corresponding proportionate adjustment in the Option Price
per share. Appropriate adjustment shall also be made to the number of shares of
stock subject to options to be granted under Section 7.1 after such adjustment.
12.2 REORGANIZATION WITH CORPORATION SURVIVING
Subject to Section 12.3, if the Corporation is the surviving corporation in
any reorganization, merger or consolidation of the Corporation with one or more
other entities, any Option previously granted pursuant to the Plan shall pertain
to and apply to the securities to which a holder of the number of shares of
Stock subject to such Option would have been entitled immediately following such
reorganization, merger or consolidation, with a corresponding proportionate
adjustment of the option price per share so that the aggregate option price
thereafter
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shall be the same as the aggregate option price of the shares remaining subject
to the Option immediately prior to such reorganization, merger or consolidation.
12.3 OTHER REORGANIZATIONS; SALE OF ASSETS OR STOCK
Upon the dissolution or liquidation of the Corporation, or upon a merger,
consolidation or reorganization of the Corporation with one or more other
corporations in which the Corporation is not the surviving corporation, or upon
a sale of substantially all of the assets of the Corporation to another
corporation, or upon any transaction (including, without limitation, a merger or
reorganization in which the Corporation is the surviving corporation) approved
by the Board that results in any person or entity (other than persons who are
holders of stock of the Corporation at the time the Plan is approved by the
Stockholders and other than an affiliate of the Corporation as defined in Rule
144(a)(1) under the Securities Act) owning 80 percent or more of the combined
voting power of all classes of stock of the Corporation, the Plan and all
Options outstanding hereunder shall terminate, except to the extent provision is
made in connection with such transaction for the continuation of the Plan and/or
the assumption of the Options theretofore granted, or for the substitution for
such Options of new options covering the stock of a successor corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to the number and
kinds of shares and exercise prices, in which event the Plan and Options
theretofore granted shall continue in the manner and under the terms so
provided. In the event of any such termination of the Plan, each Optionee shall
have the right (subject to the general limitations on exercise set forth in the
option agreement relating to such Option), immediately prior to the occurrence
of such termination and during such period occurring prior to such termination
as the Committee in its sole discretion shall designate, to exercise such Option
in whole or in part, whether or not such Option was otherwise exercisable at the
time such termination occurs, but subject to any additional limitations that the
Committee may, in its sole discretion, include in any option agreement. The
Committee shall send written notice of an event that will result in such a
termination to all Optionees not later than the time at which the Corporation
gives notice thereof to its stockholders.
12.4 ADJUSTMENTS
Adjustments under this Section 12 relating to stock or securities of the
Corporation shall be made by the Committee, whose determination in that respect
shall be final and conclusive. No fractional shares of Stock or units of other
securities shall be issued pursuant to any such adjustment, and any fractions
resulting from any such adjustment shall be eliminated in each case by rounding
downward to the nearest whole share or unit.
12.5 NO LIMITATIONS ON CORPORATION
The grant of an Option or pursuant to the Plan shall not affect or limit in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve or liquidate, or to sell or
transfer all or any part of its business or assets.
13. DISCLAIMER OF RIGHTS
No provision in the Plan or any option agreement entered into pursuant to
the Plan shall be construed to confer upon any individual the right to remain in
the service of the Corporation or any Subsidiary, or to interfere in any way
with the right and authority of the Corporation or any Subsidiary either to
increase or decrease the compensation of any individual at any time, or to
terminate any employment or other relationship between any individual and the
Corporation or any Subsidiary. The obligation of the Corporation to pay any
benefits pursuant to the Plan shall be interpreted as a contractual obligation
to pay only those amounts described herein, in the manner and under the
conditions prescribed herein. The Plan shall in no way be interpreted to require
the Corporation to transfer any amounts to a third party trustee or otherwise
hold any amounts in trust or escrow for payment to any
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participant or beneficiary under the terms of the Plan.
14. NONEXCLUSIVITY
Neither the adoption of the Plan nor the submission of the Plan to the
stockholders of the Corporation for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or individuals) as the Board in its discretion determines desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan.
15. INDEMNIFICATION
To the extent permitted by applicable law, the Committee shall be
indemnified and held harmless by the Corporation against and from any and all
loss, cost, liability or expense that may be imposed upon or reasonably incurred
by the Committee in connection with or resulting from any claim, action, suit or
proceeding to which the Committee may be a party or in which the Committee may
be involved by reason of any action taken or failure to act under the Plan, and
against and from any and all amounts paid by the Committee (with the
Corporation's written approval) in the settlement thereof, or paid by the
Committee in satisfaction of a judgment in any such action, suit or proceeding
except a judgment in favor of the Corporation; subject, however, to the
conditions that upon the institution of any claim, action, suit or proceeding
against the Committee, the Committee shall give the Corporation an opportunity
in writing, at its own expense, to handle and defend the same before the
Committee undertakes to handle and defend it on the Committee's own behalf. The
foregoing right of indemnification shall not be exclusive of any other right to
which such persons may be entitled as a matter of law or otherwise, or any power
the Corporation may have to indemnify the Committee or hold the Committee
harmless.
The Committee and each officer and employee of the Corporation shall be
fully justified in reasonably relying or acting upon any information furnished
in connection with the administration of the Plan by the Corporation or any
employee of the Corporation. In no event shall any persons who are or were
members of the Committee, or an officer or employee of the Corporation, be
liable for any determination made or other action taken or any omission to act
in reliance upon any such information, or for any action (including furnishing
of information) taken or any failure to act, if in good faith.
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APPENDIX B: AMENDED EMPLOYEE STOCK PURCHASE PLAN
AS OF FEBRUARY 2, 2000
PURPOSE The Metrocall, Inc. Amended Employee Stock Purchase
Plan (the "ESPP" or the "Amended Plan") provides
employees of Metrocall, Inc. (the "Company") and
selected Company Subsidiaries with an opportunity to
become owners of the Company through the purchase of
shares of the Company's common stock (the "Common
Stock"). The Company intends this Plan, as amended,
to continue to qualify as an employee stock purchase
plan under Section 423 of the Internal Revenue Code
of 1986, as amended (the "Code"), and its terms
should be construed accordingly. The Amended Plan is
effective as of February 2, 2000.
ELIGIBILITY An Employee whom the Company or an Eligible
Subsidiary has employed for at least one full month
as of the first day of a Payroll Deduction Period is
eligible to participate in the ESPP for that Payroll
Deduction Period; provided, however, that an
Employee may not make a purchase under the ESPP if
such purchase would result in the Employee's owning
Common Stock possessing 5% or more of the total
combined voting power or value of the Company's
outstanding stock. For purposes of determining an
individual's amount of stock ownership, any options
to acquire shares of Company Common Stock are
counted as shares of stock, and the attribution
rules of Section 424(d) of the Code apply.
Employee means any person employed as a common law
employee of the Company or an Eligible Subsidiary.
Employee excludes anyone who, with respect to any
particular period of time, was not treated initially
on the payroll records as a common law employee.
ADMINISTRATOR The Compensation Committee of the Board of Directors
of the Company, or such other committee as the Board
designates (the "Committee"), will administer the
ESPP. The Committee is vested with full authority
and discretion to make, administer, and interpret
such rules and regulations as it deems necessary to
administer the ESPP (including rules and regulations
deemed necessary in order to comply with the
requirements of Section 423 of the Code). Any
determination or action of the Committee in
connection with the administration or interpretation
of the ESPP shall be
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final and binding upon each Employee, Participant
and all persons claiming under or through any
Employee or Participant.
Without shareholder consent and without regard to
whether the actions might adversely affect
Participants, the Committee (or the Board) may
change the Payroll Deduction Periods,
limit or increase the frequency and/or number
of changes in the amounts withheld during a
Payroll Deduction Period,
establish the exchange ratio applicable to
amounts withheld in a currency other than U.S.
dollars,
permit payroll withholding in excess of the
amount the Participant designated to adjust
for delays or mistakes in the Company's
processing of properly completed withholding
elections,
establish reasonable waiting and adjustment
periods and/or accounting and crediting
procedures to ensure that amounts applied
toward the purchase of Common Stock for each
Participant properly correspond with amounts
withheld from the Participant's Compensation,
delegate its functions (other than those with
respect to setting Payroll Deduction Periods
or determining the price of stock and the
number of shares to be offered under the Plan)
to officers or employees of the Company; and
establish such other limitations or procedures
as it determines in its sole discretion
advisable and consistent with the Plan.
The Committee may also increase the price provided
in Step 2 under GRANTING OF OPTIONS (by decreasing
the discount and/or by designating that the price is
determined as of either the beginning or the ending
date of a Payroll Deduction Period rather than as of
the lower of both) for Payroll Deduction Periods
beginning after committee action.
PAYROLL
DEDUCTION PERIOD Payroll Deduction Periods are successive six month
periods beginning January 1 and July 1, and the
first such period under the Amended Plan will begin
on January 1, 1998.
PARTICIPATION An eligible Employee may become a "Participant" for
a Payroll Deduction Period by completing an
authorization
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notice and delivering it to the Committee through
the Company's Human Resources Department within a
reasonable period of time before the first day of
such Payroll Deduction Period. The Committee will
send to each new Employee who satisfies the rules in
ELIGIBILITY above a notice advising the Employee of
his right to participate in the ESPP for the
following Payroll Deduction Period. All Participants
receiving options under the ESPP will have the same
rights and privileges.
METHOD OF
PAYMENT A Participant may contribute to the ESPP through
payroll deductions, as follows:
The Participant must elect on an authorization
notice to have deductions made from his Compensation
for each payroll period during the Payroll Deduction
Period at a rate of at least 1% but not more than
15% of his Compensation. Compensation under the Plan
means an Employee's regular compensation, including
overtime, bonuses, and commissions, from the Company
or an Eligible Subsidiary paid during a Payroll
Deduction Period.
All payroll deductions will be credited to the
Participant's account under the ESPP and will accrue
interest at a rate and in a manner designated by the
Committee. Any such interest will be credited to the
Participant's account and used to increase the
amount available for purchases.
Payroll deductions will begin on the first payday
coinciding with or following the first day of each
Payroll Deduction Period and will end with the last
payday preceding or coinciding with the end of that
Payroll Deduction Period, unless the Participant
sooner withdraws as authorized under WITHDRAWALS
below.
A Participant may not alter the rate of payroll
deductions during the Payroll Deduction Period.
The Company may use the consideration it receives
for general corporate purposes.
GRANTING OF
OPTIONS On the first day of each Payroll Deduction Period, a
Participant will receive options to purchase a
number of shares of Common Stock with funds withheld
from his Compensation. Such number of shares will be
determined at
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the end of the Payroll Deduction Period according to
the following procedure:
Step 1 -- Determine the amount the Company
withheld from Compensation since the beginning
of the Payroll Deduction Period;
Step 2 -- Determine the "Purchase Price" to be
the amount that represents 85% of the lower of
Fair Market Value of a share of Common Stock
on the (I) first day of the Payroll Deduction
Period, or (II) the last day of the Payroll
Deduction Period; and
Step 3 -- Divide the amount determined in Step
1 by the amount determined in Step 2.
FAIR MARKET VALUE The Fair Market Value of a share of Common Stock for
purposes of the Plan as of each date described in
Step 2 will be determined as follows:
if the Common Stock is traded on a national
securities exchange, the closing price on that
date;
if the Common Stock is not traded on any such
exchange, the closing sale price as reported
by the National Association of Securities
Dealers, Inc. Automated Quotation System
("Nasdaq") for such date;
if no such closing sale price information is
available, the average of the closing bid and
asked prices as reported by Nasdaq for such
date;
if there are no such closing bid and asked
prices, the average of the closing bid and
asked prices as reported by any other
commercial service for such date; or
if there is no established market for the
Common Stock, the value as determined in good
faith by the Committee.
For January 1 and any other date described in Step 2
that is not a trading day, the Fair Market Value of
a share of Common Stock for such date shall be
determined by using the closing sale price or the
average of the closing bid and asked prices, as
appropriate, for the immediately preceding trading
day.
No Participant shall receive options:
if, immediately after the grant, that
Participant would own shares, or hold
outstanding options to purchase shares, or
both, possessing 5% or more of the total
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combined voting power or value of all classes
of shares of the Company or any Subsidiaries;
or
that permit the Participant to purchase shares
under all employee stock purchase plans of the
Company and any Subsidiary with a Fair Market
Value (determined at the time the options are
granted) that exceeds $25,000 in any calendar
year.
EXERCISE OF
OPTION Unless a Participant effects a timely withdrawal
pursuant to the WITHDRAWAL paragraph below, his
option for the purchase of shares of Common Stock
during a Payroll Deduction Period will be
automatically exercised as of the last day of the
Payroll Deduction Period for the purchase of the
maximum number of shares (including fractional
shares) that the sum of the payroll deductions
credited to the Participant's account during such
Payroll Deduction Period can purchase pursuant to
the formula specified in GRANTING OF OPTIONS.
DELIVERY OF
COMMON STOCK As soon as administratively feasible after the
options are used to purchase Common Stock, the
Company will deliver to each Participant or, in the
alternative, to an agent or custodian that the
Committee designates, the shares of Common Stock the
Participant purchased upon the exercise of the
option. If delivered to an agent or custodian, the
agent or custodian may hold the shares in nominee
name and may commingle shares held in its custody in
a single account or stock certificate without
identification as to individual Participants. If
shares are delivered to a custodian, the Participant
may elect at any time thereafter to take possession
of the shares or to have the Committee deliver the
shares to any brokerage firm. The Committee may, in
its discretion, establish a program for cashless
sales of Common Stock received under the ESPP.
SUBSEQUENT
OFFERINGS A Participant will be deemed to have elected to
participate in each subsequent Payroll Deduction
Period following his initial election to participate
in the ESPP, unless the Participant files a written
withdrawal notice with the Human Resources
Department at least ten days before the beginning of
the Payroll Deduction Period as of which the
Participant desires to withdraw from the ESPP.
WITHDRAWAL FROM
THE PLAN A Participant may withdraw all, but not less than
all, payroll deductions credited to his account for
a Payroll Deduction Period before the end of such
Payroll Deduction Period by delivering a written
notice to the Human Resources Depart-
B-5
<PAGE> 44
ment on behalf of the Committee at least thirty days
before the end of such Payroll Deduction Period. A
Participant who for any reason, including
retirement, termination of employment, or death,
ceases to be an Employee before the last day of any
Payroll Deduction Period will be deemed to have
withdrawn from the ESPP as of the date of such
cessation.
Upon the withdrawal of a Participant from the ESPP,
his outstanding options under the ESPP will
immediately terminate.
If a Participant withdraws from the ESPP for any
reason, the Company will pay to the Participant all
payroll deductions credited to his account or, in
the event of death, to the persons designated as
provided in DESIGNATION OF BENEFICIARY, as soon as
administratively feasible after the date of such
withdrawal and no further deductions will be made
from the Participant's Compensation.
A Participant who has elected to withdraw from the
ESPP may resume participation in the same manner and
pursuant to the same rules as any Employee making an
initial election to participate in the ESPP, i.e.,
he may elect to participate in the next following
Payroll Deduction Period so long as he files the
authorization form by the deadline for that Payroll
Deduction Period. Any Participant who is subject to
Section 16 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and who withdraws
from the ESPP for any reason will only be permitted
to resume participation in a manner that will permit
transactions under the ESPP to continue to be exempt
within the meaning of Rule 16b-3, as issued under
the Exchange Act.
STOCK SUBJECT TO
PLAN The shares of Common Stock that the Company will
sell to Participants under the ESPP will be shares
of authorized but unissued Common Stock or shares
held as treasury stock. The maximum number of shares
made available for sale under the ESPP will be
1,000,000 and which number will increase to
2,000,000 if the stockholders approve the increase
at the 2000 Annual Meeting of Stockholders (subject
to the provisions in ADJUSTMENTS UPON CHANGES IN
CAPITAL STOCK). If the total number of shares for
which options are to be exercised in a Payroll
Deduction Period exceeds the number of shares then
available under the ESPP, the Company will make, so
far as is practicable, a pro rata allocation of the
shares available.
B-6
<PAGE> 45
A Participant will have no interest in shares
covered by his option until the Participant
exercises the option.
Shares that a Participant purchases under the ESPP
will be registered in the name of the Participant
or, at the Participant's election, in street name.
REPORTS Individual accounts will be maintained for each
Participant. Statements of account will be given to
Participants at least annually, and those statements
will set forth the amount of payroll deductions, the
exercise price, interest credited, the number of
shares purchased, and the remaining cash balance, if
any.
ADJUSTMENTS
UPON CHANGES IN
CAPITAL STOCK Subject to any required action by the Company (which
it shall promptly take) or its stockholders, and
subject to the provisions of applicable corporate
law, if, during a Payroll Deduction Period,
the outstanding shares of Common Stock
increase or decrease or change into or are
exchanged for a different number or kind of
security by reason of any recapitalization,
reclassification, stock split, reverse stock
split, combination of shares, exchange of
shares, stock dividend, or other distribution
payable in capital stock, or
some other increase or decrease in such Common
Stock occurs without the Company's receiving
consideration,
the Committee will make a proportionate and
appropriate adjustment in the number of shares of
Common Stock underlying the options, so that the
proportionate interest of the Participant
immediately following such event will, to the extent
practicable, be the same as immediately before such
event. Any such adjustment to the options will not
change the total price with respect to shares of
Common Stock underlying the Participant's election
but will include a corresponding proportionate
adjustment in the price of the Common Stock, to the
extent consistent with Section 424 of the Code.
The Committee will make a commensurate change to the
maximum number and kind of shares provided in the
STOCK SUBJECT TO PLAN section.
Any issue by the Company of any class of preferred
stock, or securities convertible into shares of
common or preferred stock of any class, will not
affect, and no adjustment by reason thereof will be
made with respect to, the number of
B-7
<PAGE> 46
shares of Common Stock subject to any options or the
price to be paid for stock except as this
ADJUSTMENTS section specifically provides. The grant
of an option under the Plan will not affect in any
way the right or power of the Company to make
adjustments, reclassifications, reorganizations or
changes of its capital or business structure, or to
merge or to consolidate, or to dissolve, liquidate,
sell, or transfer all or any part of its business or
assets.
Substantial Corporate
Change Upon a Substantial Corporate Change, the Plan and
the offering will terminate unless provision is made
in writing in connection with such transaction for
the assumption or continuation of outstanding
elections, or
the substitution for such options or grants of
any options covering the stock or securities
of a successor employer corporation, or a
parent or subsidiary of such successor, with
appropriate adjustments as to the number and
kind of shares of stock and prices, in which
event the options will continue in the manner
and under the terms so provided.
If an option would otherwise terminate pursuant to
the preceding sentence, the optionee will have the
right, at such time before the consummation of the
transaction causing such termination as the Board
reasonably designates, to exercise any unexercised
portions of the option. However, the Board may
determine that allowing such exercise before the end
of the Payroll Deduction Period will not occur if
the election would render unavailable "pooling of
interest" accounting for any reorganization, merger,
or consolidation of the Company.
A Substantial Corporate Change means the
dissolution or liquidation of the Company,
merger, consolidation, or reorganization of
the Company with one or more corporations in
which the Company is not the surviving
corporation,
the sale of substantially all of the assets of
the Company to another corporation, or
any transaction (including a merger or
reorganization in which the Company survives)
approved by the Board that results in any
person or entity (other than any affiliate of
the Company as defined in Rule 144(a)(1)
B-8
<PAGE> 47
under the Securities Act) owning 100% of the
combined voting power of all classes of stock of
the Company.
DESIGNATION OF
BENEFICIARY A Participant may file with the Committee a written
designation of a beneficiary who is to receive any
payroll deductions credited to the Participant's
account under the ESPP or any shares of Common
Stock owed to the Participant under the ESPP if the
Participant dies. A Participant may change a
beneficiary at any time by filing a notice in
writing with the Human Resources Department on
behalf of the Committee.
Upon the death of a Participant and upon receipt by
the Committee of proof of the identity and existence
of the Participant's designated beneficiary, the
Company shall deliver such cash or shares, or both,
to the beneficiary. If a Participant dies and is not
survived by a beneficiary that the Participant
designated in accordance with the immediate
preceding paragraph, the Company will deliver such
cash or shares, or both, to the personal
representative of the estate of the deceased
Participant. If, to the knowledge of the Committee,
no personal representative has been appointed within
90 days following the date of the Participant's
death, the Committee, in its discretion, may direct
the Company to deliver such cash or shares, or both,
to the surviving spouse of the deceased Participant,
or to any one or more dependents or relatives of the
deceased Participant, or if no spouse, dependent or
relative is known to the Committee, then to such
other person as the Committee may designate.
No designated beneficiary may acquire any interest
in such cash or shares before the death of the
Participant.
SUBSIDIARY
EMPLOYEES Employees of Company Subsidiaries will be entitled
to participate in the ESPP, except as otherwise
designated by the Board of Directors or the
Committee.
Eligible Subsidiary means each of the Company's
Subsidiaries, except as the Board otherwise
specifies. Subsidiary means any corporation (other
than the Company) in an unbroken chain of
corporations beginning with the Company if, at the
time an option is granted to a Participant under the
ESPP, each of the corporations (other than the last
corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting
power of all classes of stock in one of the other
corporations in such chain.
B-9
<PAGE> 48
TRANSFERS,
ASSIGNMENTS, AND
PLEDGES A Participant may not assign, pledge, or otherwise
dispose of payroll deductions credited to the
Participant's account or any rights to exercise an
option or to receive shares of Common Stock under
the ESPP other than by will or the laws of descent
and distribution or pursuant to a qualified domestic
relations order, as defined in the Employee
Retirement Income Security Act. Any other attempted
assignment, pledge or other disposition will be
without effect, except that the Company may treat
such act as an election to withdraw under the
WITHDRAWAL section.
AMENDMENT OR
TERMINATION OF
PLAN The Board of Directors of the Company or the
Committee may at any time terminate or amend the
ESPP. Any amendment of the ESPP that (i) materially
increases the benefits to Participants, (ii)
materially increases the number of securities that
may be issued under the ESPP, or (iii) materially
modifies the eligibility requirements for
participation in the ESPP must be approved by the
shareholders of the Company to take effect. The
Company shall refund to each Participant the amount
of payroll deductions credited to his account as of
the date of termination as soon as administratively
feasible following the effective date of the
termination.
NOTICES All notices or other communications by a Participant
to the Committee or the Company shall be deemed to
have been duly given when the Human Resources
Department or the Secretary of the Company receives
them or when any other person the Company designates
receives the notice or other communication in the
form the Company specifies.
GENERAL ASSETS Any amounts the Company invests or otherwise sets
aside or segregates to satisfy its obligations under
this ESPP will be solely the Company's property
(except as otherwise required by Federal or state
wage laws), and the optionee's claim against the
Company under the ESPP, if any, will be only as a
general creditor. The optionee will have no right,
title, or interest whatever in or to any investments
that the Company may make to aid it in meeting its
obligations under the ESPP. Nothing contained in the
ESPP, and no action taken pursuant to its
provisions, will create or be construed to create an
implied or constructive trust of any kind or a
fiduciary relationship between the Company and any
Employee, Participant, former Employee, former
Participant, or any beneficiary.
B-10
<PAGE> 49
PRIVILEGES OF
STOCK OWNERSHIP No participant and no beneficiary or other person
claiming under or through such Participant will have
any right, title, or interest in or to any shares of
Common Stock allocated or reserved under the Plan
except as to such shares of Common Stock, if any,
that have been issued to such Participant.
TAX WITHHOLDING To the extent that a Participant realizes ordinary
income in connection with a sale or other transfer
of any shares of Common Stock purchased under the
Plan or the crediting of interest to an account, the
Company may withhold amounts needed to cover such
taxes from any payments otherwise due to the
Participant. Any Participant who sells or otherwise
transfers shares purchased under the Plan within two
years after the beginning of the Payroll Deduction
Period in which he purchased the shares must, within
30 days of such transfer, notify the Company's
Payroll Department in writing of such transfer.
LIMITATIONS ON
LIABILITY Notwithstanding any other provisions of the ESPP, no
individual acting as a director, employee, or agent
of the Company shall be liable to any Employee,
Participant, former Employer, former Participant,
or any spouse or beneficiary for any claim, loss,
liability, or expense incurred in connection with
the ESPP, nor shall such individual be personally
liable because of any contract or other instrument
he executes in such other capacity. The Company
will indemnify and hold harmless each director,
employee, or agent of the Company to whom any duty
or power relating to the administration or
interpretation of the ESPP has been or will be
delegated, against any cost or expense (including
attorneys' fees) or liability (including any sum
paid in settlement of a claim with the Metrocall
Board's approval) arising out of any act or
omission to act concerning this ESPP unless arising
out of such person's own fraud or bad faith.
NO EMPLOYMENT
CONTRACT Nothing contained in this Plan constitutes an
employment contract between the Company or an
Eligible Subsidiary and any Employee. The ESPP does
not give an Employee any right to be retained in the
Company's employ, nor does it enlarge or diminish
the Company's right to terminate the Employee's
employment.
DURATION OF ESPP Unless the Metrocall Board extends the Plan's term,
no Payroll Deduction Period will begin after
December 31, 2007.
B-11
<PAGE> 50
APPLICABLE LAW The laws of the Commonwealth of Virginia (other than
its choice of law provisions) govern the ESPP and
its interpretation.
LEGAL COMPLIANCE The Company will not issue any shares of Common
Stock under the Plan until the issuance satisfies
all applicable requirements imposed by Federal and
state securities and other laws, rules, and
regulations, and by any applicable regulatory
agencies or stock exchanges. To that end, the
Company may require the optionee to take any
reasonable action to comply with such requirements
before issuing such shares. No provision in the Plan
or action taken under it authorizes any action that
Federal or state laws otherwise prohibit.
The Plan is intended to conform to the extent
necessary with all provisions of the Securities Act
of 1933 ("Securities Act") and the Securities
Exchange Act of 1934 and all regulations and rules
the Securities and Exchange Commission issues under
those laws, including specifically Rule 16b-3.
Notwithstanding anything in the Plan to the
contrary, the Committee and the Board must
administer the Plan, and Participants may purchase
Common Stock, only in a way that conforms to such
laws, rules, and regulations. To the extent
permitted by applicable law, the Plan and any offers
will be deemed amended to the extent necessary to
conform to such laws, rules, and regulations.
APPROVAL OF
SHAREHOLDERS The ESPP must be submitted to the shareholders of
the Company for their approval within 12 months
after the Board of Directors of the Company adopts
the ESPP. The adoption of the ESPP is conditioned
upon the approval of the shareholders of the
Company, and failure to receive their approval will
render the ESPP and any outstanding options
thereunder void and of no effect.
B-12
<PAGE> 51
/X/ PLEASE MARK YOUR
VOTE AS IN THIS
EXAMPLE
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL PROPOSALS
- ----------------------------------------------------------------------------------------------------------
<S> <C>
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. Amendment of the / / / / / /
Directors Metrocall 1996 Stock
(see reverse) Option Plan
For, except vote withheld from the 3. Amendment of the / / / / / /
following nominee(s) Employee Stock
Purchase Plan
- ------------------------
I plan to / /
attend the
Annual Meeting
FOR AGAINST ABSTAIN
4. Ratification of the appointment by the Board of Directors of
Arthur Andersen LLP as independent public accountants of
Metrocall, Inc. for the fiscal year ending December 31, 2000 / / / / / /
5. In its discretion, the Proxy Committee is to vote such other
business as may properly come before the meeting or any
adjournments or postponements thereof, to the extent permitted
by law / / / / / /
Please sign exactly as name appears on this card. If shares
are held jointly, each holder may sign but only one signature
is required. When signing as attorney, executor, administrator,
trustee or guardian, please give your title as such.
- -----------------------------------------------------------------
- -----------------------------------------------------------------
SIGNATURE(S) DATE
- ----------------------------------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
</TABLE>
Dear Shareholder:
Metrocall encourages you to take advantage of new and convenient ways by which
you can vote your shares. You can vote your shares electronically through the
Internet or the telephone. This eliminates the need to return the proxy card.
To vote your shares electronically, you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
this box must be used to access the system.
1. To vote over the Internet
- - Log on the Internet and go to the web site http://www.eproxyvote.com/mcll.
2. To vote over the telephone:
- - On a touch-tone telephone, call 1-888-PRX-VOTE (1-877-779-8683) 24 hours a
day, 7 days a week; outside the U.S. call 1-201-536-8073.
Your electronic vote authorizes the named proxies in the same manner as if
you marked, signed, dated and returned the proxy card.
IF YOU CHOOSE TO VOTE YOUR SHARES ELECTRONICALLY, THERE IS NO NEED FOR YOU TO
MAIL BACK YOUR PROXY CARD.
IF YOU CHOOSE TO VOTE BY MAIL, PLEASE MARK, SIGN AND DATE YOUR CARD AND RETURN
YOUR PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
<PAGE> 52
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS OF
METROCALL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ronald V. Aprahamian and Harry L. Brock,
Jr., who comprise the Proxy Committee, and each of them singly, with full power
of substitution to act as the lawful agent and proxy for the undersigned and to
vote all shares of common stock of Metrocall, Inc. that the undersigned is
entitled to vote and holds of record on March 15, 2000 at the Annual Meeting of
Stockholders of Metrocall, Inc. to be held at The Ritz-Carlton Hotel, located at
1250 South Hayes Street, Arlington, Virginia 22202, on May 3, 2000, at 9:00
a.m., local time, and at any adjournments thereof, on all matters coming before
the Annual Meeting.
You are encouraged to specify your choices by marking the appropriate
boxes on the reverse side but you need not mark any boxes if you wish to vote in
accordance with the recommendations of the Board of Directors. The Proxy
Committee cannot vote your shares unless you sign and return this card. You may
revoke this proxy at any time before it is voted by delivering to the Assistant
Secretary of the Company 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.
This proxy when properly executed will be voted in the manner you have
directed. If you do not specify any directions, this proxy will be voted for
proposals 1, 2, 3 and 4 and in accordance with the Proxy Committee's discretion
on such other matters that may properly come before the meeting to the extent
permitted by law.
The undersigned acknowledges receipt from Metrocall, Inc. prior to the
execution of this proxy of a Notice of the Annual Meeting of Stockholders and
of a Proxy Statement dated April 3, 2000 relating to the meeting.
ELECTION OF DIRECTORS. The nominees to serve as directors for three-year terms
are:
01-William L. Collins, III, 02-Edward E. Jungerman, 03-Francis A. Martin, III,
04-Harold S. ("Pete") Wills
(TO BE SIGNED ON REVERSE SIDE)
- FOLD AND DETACH HERE -
