SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
I. SCHEDULE 14A INFORMATION
A. 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:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
| | Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
American Mobile Satellite Corporation
(Name of Registrant as Specified in Its Charter)
Randy S. Segal
(Name of Person(s) Filing Proxy Statement)
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 O-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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American Mobile Satellite Corporation
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
American Mobile Satellite Corporation to be held at 9:00 a.m. on Tuesday, May
23, 2000 at the Sheraton Reston Hotel, 11810 Sunrise Valley Drive, Reston,
Virginia (703/620-9000).
The formal notice of annual meeting and proxy statement are attached to this
letter. This material contains information concerning the business to be
conducted at the meeting and the nominees for election as directors.
Even if you are unable to attend the meeting in person, it is important that
your shares be represented. Therefore, I urge you to complete, date, sign and
return the enclosed proxy card at your earliest convenience. If you choose to
attend the annual meeting, you may, of course, revoke your proxy and cast your
votes personally at the meeting.
Sincerely,
/s/Gary M. Parsons
Chairman of the Board
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[GRAPHIC OMITTED]
American Mobile Satellite Corporation
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of American Mobile Satellite Corporation:
The annual meeting of stockholders of American Mobile Satellite Corporation
("American Mobile" or the "Company") will be held at the Sheraton Reston Hotel,
11810 Sunrise Valley Drive, Reston, Virginia, on Tuesday, May 23, 2000, at 9:00
a.m., for the following purposes:
1. To elect six directors;
2. To consider and act upon a proposal to amend the Company's Restated
Certificate of Incorporation to remove the Certificate of Incorporation's
requirement of a minimum Board size;
3. To consider and act upon a proposal to amend the Company's Restated
Certificate of Incorporation to change the requirement for amending the
Certificate of Incorporation from two-thirds of the outstanding common stock to
a majority of the outstanding common stock;
4. To consider and act upon a proposal to amend and restate the Company's 1989
Employee Stock Option Plan as the "American Mobile Satellite Corporation Stock
Award Plan," in order to increase the number of authorized shares available
under such plan to 7,300,000, and to amend certain other provisions of such
plan;
5. To consider and act upon a proposal to amend the Company's Employee Stock
Purchase Plan to increase the number of authorized shares available under the
Employee Stock Purchase Plan from 300,000 to 600,000;
6. To consider and act upon a proposal to ratify the appointment of Arthur
Andersen LLP as independent accountants for American Mobile for the year 2000;
and
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7. To transact such other business as may be properly brought before the meeting
or any adjournments thereof.
Only holders of record of American Mobile's common stock at the close of
business on March 31, 2000 will be entitled to vote at the meeting. A list of
such stockholders will be available at the Company's headquarters, 10802
Parkridge Boulevard, Reston, Virginia 20191 for examination during normal
business hours by any stockholder for any purpose germane to the meeting for a
period of ten days prior to the meeting.
Stockholders who do not expect to attend the meeting in person are asked to
date, sign and complete the enclosed proxy and return it without delay in the
enclosed envelope, which requires no postage if mailed in the United States.
By order of the Board of Directors,
Randy S. Segal
Senior Vice President and Secretary
Reston, Virginia
April 19, 2000
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[GRAPHIC OMITTED]
American Mobile Satellite Corporation
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
The accompanying proxy is solicited on behalf of the Board of Directors of
American Mobile Satellite Corporation ("American Mobile" or the "Company") for
use at the annual meeting of stockholders to be held on May 23, 2000, and any
postponement or adjournments thereof. The annual meeting will be held at the
Sheraton Reston Hotel, 11810 Sunrise Valley Drive, Reston, Virginia, and will
commence at 9:00 a.m. Any stockholder giving a proxy may revoke it at any time
before it is exercised at the meeting by delivering to the Secretary of American
Mobile a written instrument of revocation or a duly executed proxy bearing a
later date. This proxy statement and the accompanying form of proxy are being
first sent to stockholders on or about April 19, 2000.
The only class of securities of American Mobile entitled to vote at the 2000
annual meeting is its common stock, of which 49,455,775 shares were outstanding
on March 31, 2000. Only stockholders of record at the close of business on March
31, 2000 will be entitled to vote at the annual meeting. The presence at the
annual meeting of the holders of a majority of the issued and outstanding shares
of common stock entitled to vote, either in person or represented by properly
executed proxies, is necessary to constitute a quorum for the transaction of
business at the meeting. If there are not sufficient shares represented in
person or by proxy at the meeting to constitute a quorum, the meeting may be
postponed or adjourned in order to permit further solicitation of proxies by the
Company. Proxies given pursuant to this solicitation and not revoked will be
voted at any postponement or adjournment of the annual meeting in the manner
described elsewhere in this proxy statement.
1
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Each stockholder has one vote for each share of common stock held. In Proposal
1, the election of directors, each stockholder is entitled to cumulate his or
her votes. Under cumulative voting, each stockholder is allowed that number of
votes equal to the number of director positions to be filled (six) multiplied by
the number of shares of common stock owned. The stockholder may distribute those
votes among one or more, or all, of the nominees as the stockholder desires.
However, as described below, the accompanying proxy reserves to the persons
named therein the right to distribute the votes represented by such proxy in
their discretion in order to maximize the likelihood of electing the full slate
of directors. Under cumulative voting, directors are elected by a plurality of
votes cast. A withheld vote on any nominee will not affect the voting results.
Proposals 2 and 3, which seek approval of certain amendments to the Company's
Certificate of Incorporation, will require the affirmative vote of two-thirds of
the shares of common stock issued and outstanding on the record date.
Abstentions with respect to such proposals will have the same effect as a vote
against such proposals.
Each of Proposals 4, 5, and 6 will require the affirmative vote of the holders
of a majority of the shares present in person or represented by proxy at the
annual meeting. Abstentions will be treated as votes present and entitled to
vote and thus will have the effect of a vote against these proposals.
Brokers who hold shares in street name for beneficial owners do not have the
authority to vote on certain matters for which they have not received
instructions from beneficial owners. Broker non-votes (arising from the lack of
instructions from beneficial owners) will not be included in the vote totals on
Proposals 2 or 3, and thus will affect the outcome of the vote on those
Proposals. Broker non-votes will not affect the outcome of the vote on Proposal
4, Proposal 5 or Proposal 6. Broker non-votes will be counted in determining the
existence of a quorum.
The cost of soliciting proxies in the form enclosed herewith will be borne by
the Company. The Company has engaged Georgeson Shareholder Communications, Inc.,
to assist in the distribution of proxy materials and the solicitation of proxies
at a cost of approximately $8,500 plus out of pocket expenses. In addition, the
Company, through its directors, officers and regular employees, may also solicit
proxies personally or by telephone. The Company also will request persons, firms
and corporations holding common stock in their names or in the names of their
nominees, which are beneficially owned by others, to send proxy materials to and
obtain proxies from the beneficial owners, and the Company will reimburse the
holders for their reasonable out-of-pocket expenses in so doing.
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1. ELECTION OF DIRECTORS
It is intended that the persons named in the proxy will, unless otherwise
instructed, vote for the election of the six nominees listed below to serve as
directors until the next annual meeting of stockholders and until their
respective successors are elected and qualified. If for any reason any nominee
should not be available for election or able to serve as a director, the
accompanying proxy may be voted for the election of a substitute nominee
designated by the Board of Directors and will be voted for the election of the
other nominees named therein. In any event, management reserves the right in its
discretion to distribute the total votes represented by the proxies unevenly or
among less than all of the persons named (or their substitutes), as permitted by
cumulative voting, in order to maximize the likelihood of electing the full
slate of directors.
The Board currently comprises six members, with one vacancy. Because there are
only six nominees for election as directors at the annual meeting, the present
vacancy remains. While the Board continues to explore the possibility of
increasing its size by adding one or more directors, it has determined that the
current size and composition of the Board is appropriate. Also, as described
below under Proposal 2, "Amendment to the Company's Restated Certificate of
Incorporation to Remove the Requirement of a Minimum Board Size," stockholders
are being asked at the annual meeting to approve an amendment to the Company's
Restated Certificate of Incorporation to remove the Certificate of
Incorporation's existing requirement that the Board comprise at least seven (7)
members. If stockholders approve such Proposal 2, the present vacancy would be
eliminated, effective as of the date of the annual meeting. If stockholders do
not approve Proposal 2, then the present vacancy would remain until such time as
an additional director is added to the Board.
Nominees
Information with respect to the business experience and affiliations of the
nominees to the Board of Directors is set forth below. The information set forth
below and elsewhere in this proxy statement concerning the nominees and their
security holdings has been furnished by them to American Mobile.
Gary M. Parsons, 49. American Mobile's Chairman of the Board of Directors
since March 1998, Mr. Parsons has been an American Mobile director, and formerly
Chief Executive Officer and President of American Mobile, since July 1996. Mr.
Parsons also serves as the Chairman of the Board of Directors of XM Satellite
Radio Holdings Inc. ("XM Radio"). Mr. Parsons joined American Mobile from MCI
Communications Corporation ("MCI") where he served in a variety of executive
roles from 1990 to 1996, including most recently as Executive Vice President of
MCI Communications, and as Chief Executive Officer of MCI's subsidiary MCImetro,
Inc. From 1984 to 1990, Mr. Parsons was one of the principals of Telecom*USA,
which was acquired by MCI.
3
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Douglas I. Brandon, 41. An American Mobile director since January 1998, Mr.
Brandon is Vice President -- External Affairs & Law, AT&T Wireless Services,
Inc. ("AT&T Wireless"). Prior to joining AT&T Wireless in 1993, Mr. Brandon was
associated with the law firm of Davis Polk & Wardwell beginning in 1986. Prior
to Davis Polk, Mr. Brandon clerked for the Honorable William H. Timbers of the
United States Court of Appeals for the Second Circuit.
Billy J. Parrott, 65. An American Mobile director since May 1988, Mr.
Parrott is President and Chief Executive Officer of Antifire, Inc., a
manufacturer of non-toxic fire retardants. Mr. Parrott is also the founder and
co-founder of several telecommunications companies, including Private Networks,
Inc., a builder and operator of telecommunications and broadcast properties, and
Roanoke Valley Cellular Telephone Company, a cellular communications company.
Mr. Parrott is owner of a production company where he functions as a writer,
producer, director and marketing consultant to Fortune 500 companies.
Walter V. Purnell, Jr., 54. An American Mobile director and the Company's
Chief Executive Officer since January 1999, Mr. Purnell also serves as the
President, a position he has held since March 1998. Previously, Mr. Purnell was
President and Chief Executive Officer of ARDIS since September 1995. Before
that, Mr. Purnell had served as the chief financial officer of ARDIS since its
founding in 1990. Before 1990, Mr. Purnell held a broad range of senior
executive positions with IBM over 23 years, with financial responsibility over
significant telecommunications and other business divisions, both domestically
and internationally.
Andrew A. Quartner, 46. An American Mobile director since May 1988, Mr.
Quartner also serves as corporate counsel at Nextlink Communications, Inc. and
Vice Chairman of CellPort Labs, Inc. Prior to 1997, Mr. Quartner was Senior Vice
President, Law, of AT&T Wireless, which he joined in November 1985. Prior to
joining AT&T Wireless, Mr. Quartner was associated with the law firm of
Debevoise & Plimpton in New York.
Jack A. Shaw, 61. An American Mobile director and formerly Chairman of the
Board of Directors of American Mobile since July 1996, Mr. Shaw is Senior
Executive Vice President of Hughes Electronics Corporation ("Hughes
Electronics"). Mr. Shaw is a member of the Hughes Electronics Executive
Committee. Mr. Shaw also serves as a Director of XM Radio. Prior to Mr. Shaw's
current position, Mr. Shaw was Chairman and Chief Executive Officer of Hughes
Network Systems ("HNS") and Executive Vice President of Hughes Electronics.
Previously, Mr. Shaw held senior management positions with companies including
ITT Space Communications, Inc., Digital Communications Corporation and M/A-Com,
which was acquired by Hughes in 1987.
The Board of Directors recommends that stockholders vote FOR the election of the
six persons nominated to serve as Directors.
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Board Committees, Meetings and Compensation
The Board of Directors has an Audit Committee which currently consists of
Messrs. Parrott and Quartner. The Audit Committee is responsible for reviewing
the Company's internal auditing procedures and accounting controls and will
consider the selection and independence of the Company's outside auditors. The
Audit Committee met three times during 1999.
The Board of Directors has a Nominating Committee which makes nominations for
the Board of Directors and the Committees of the Board. The current members of
the Nominating Committee are Messrs. Parrott, Parsons and Shaw. The Nominating
Committee met once during 1999. The Nominating Committee will consider
stockholder proposals of persons to be nominated for election to the Board made
in accordance with the Company's Bylaws. See "Proposals for the Company's Annual
Meeting in 2001," below.
The Board of Directors has a Compensation and Stock Option Committee which is
responsible for administering American Mobile's 1989 Employee Stock Option Plan
(the "Option Plan"), reviewing certain of American Mobile's compensation
programs and making recommendations to the Board of Directors with respect to
compensation. The current members of the Compensation and Stock Option Committee
are Messrs. Brandon, Parrott, Parsons, Purnell, Quartner, and Shaw. As described
elsewhere in this proxy statement, stockholders are being asked to approve the
amendment and restatement of the Option Plan. The Compensation and Stock Option
Committee will continue to administer the Option Plan. The Compensation and
Stock Option Committee met once during 1999 and took action by unanimous written
consent twice during 1999.
See "Compensation and Stock Option Committee Report."
The Board of Directors also has an Executive Committee which meets as needed and
generally has full authority to act on behalf of the Board of Directors unless
otherwise prohibited by Delaware law. See "Agreements Among Stockholders." The
current members of the Executive Committee are Messrs. Brandon, Parrott,
Parsons, Purnell, Quartner and Shaw. The Executive Committee did not meet during
1999.
The Board of Directors has an Independent Committee which is responsible for
reviewing possible transactions in which one or more of the Directors may have
an interest. The current members are Messrs. Brandon, Parrott and Quartner. The
Independent Committee met twice during 1999.
The Board of Directors met 11 times during 1999. All director nominees except
Mr. Quartner attended 75% or more of all Board meetings and meetings of
committees of which they were members during 1999.
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Each non-employee member of the Board of Directors is entitled to receive an
annual retainer of $19,000, and each member of the committees of the Board is
entitled to receive additional amounts as follows: Executive Committee, $3,500
per year; Audit Committee, $2,500 per year; Independent Committee, $2,500 per
year; Nominating Committee, $2,000 per year; and Compensation and Stock Option
Committee, $2,000 per year. Directors have the right to elect to retain or
forego these amounts, or to have them donated to a charity of their choice.
Messrs. Parrott and Quartner elected to have such amounts paid to them directly.
All other directors elected to forego receipt of retainer and committee fees.
Each non-employee member of the Board of Directors (an "Eligible Director") is
entitled to receive options exercisable for the Company's common stock as
provided in the Company's 1999 Stock Option Plan for Non-Employee Directors
("Director Plan"). Pursuant to the Director Plan, each Eligible Director (other
than directors electing not to receive such options) receives an initial option
to purchase 5,000 shares of common stock, and automatically receives annually an
option to purchase 2,500 shares of common stock at an exercise price equal to
the fair market value of the common stock on the date of grant. Each option
expires on the earlier of (i) ten years from the date of grant or (ii) seven
months after a director's termination of service as a director.
Eligible Directors are also eligible to receive discretionary stock option
grants under the Director Plan. In 1999, the Board of Directors made
discretionary stock option grants to two directors, in recognition of those
directors' long-time service on behalf of the Board of Directors and the
Company, and also in recognition of assistance provided by such directors on
special projects. During 1999, Mr. Quartner received discretionary grants of
options to purchase 10,000 shares of Common Stock at $4.61 and 20,000 shares of
Common Stock, at an exercise price of $8.84 per share, and Mr. Parrott received
discretionary options to purchase 20,000 shares of Common stock, at an exercise
price of $8.84 per share.
As described elsewhere in this proxy statement, stockholders are being asked to
approve the amendment and restatement of the Option Plan. Under the Option Plan,
as proposed for amendment, Eligible Directors would be eligible for
discretionary option grants. Future grants of stock options to Eligible
Directors will be made under the Option Plan. See "Proposal 4. Amendment and
Restatement of the 1989 Employee Stock Option Plan as the American Mobile
Satellite Corporation Stock Award Plan."
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Security Ownership of Certain Beneficial Owners and Management
The following table and the accompanying notes set forth certain information
concerning the beneficial ownership of American Mobile's common stock at March
31, 2000 (except where otherwise indicated), by (i) each person who is known by
American Mobile to own beneficially more than five percent of American Mobile's
common stock, (ii) each director, (iii) each Executive Officer named in the
Summary Compensation Table (see "Executive Compensation," below) and (iv) all
directors and Executive Officers as a group. Except as otherwise indicated, each
person listed in the table has informed American Mobile that such person has (i)
sole voting and investment power with respect to such person's shares of common
stock and (ii) record and beneficial ownership with respect to such person's
shares of common stock.
<TABLE>
<CAPTION>
Name of Beneficial Owner(1) Number of
Shares % of Class
Beneficial Owners of More than 5%
<S> <C> <C>
AT&T Wireless Services, Inc.(2) 3,001,145 6.07%
1150 Connecticut Avenue, N.W.
Washington, DC 20036
Baron Capital, Inc.(3) 6,150,881 12.23%
767 Fifth Avenue, 24th Floor
New York, NY 10153
Hughes Communications Satellite Services, Inc.(4) 11,661,796 21.42%
Building S66/D468
Post Office Box 92424
Los Angeles, CA 90009
Motorola, Inc. 2,470,532 4.99%
1303 East Algonquin Road
Schaumberg, IL 60196
Noah A. Samara, Trustee 4,094,244 8.28%
XM Ventures
c/o WorldSpace, Inc.
2400 N Street, NW
Washington, DC 20037
Directors and Executive Officers
Douglas I. Brandon ........................................ 5,000 *
Robert L. Goldsmith(5)(9) ................................ 159,869 *
Billy J. Parrott(6)(7) .................................... 33,600 *
Gary M. Parsons(5)(9) .................................... 638,582 1.29%
Walter V. Purnell, Jr.(5)(9)(10) ......................... 173,958 *
Andrew A. Quartner(6)(8) ............................ 41,000 *
Jack A. Shaw(6)............................................ 6,000 *
Randy S. Segal(5) (9)...................................... 177,159 *
W. Bartlett Snell(9)....................................... 55,100 *
All Directors and Executive Officers as a
group (9 persons)(5)(9) ................................... 1,290,268 2.55%
</TABLE>
* Less than 1%
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(1)Certain holders of common stock, including each of the
beneficial owners of more than 5% of the common stock ("5%
Stockholders") listed in the table are parties to a stockholders'
agreement dated December 1, 1993 (the "Stockholders' Agreement"). The
5% Stockholders who are parties to the Stockholders' Agreement may be
deemed to constitute a group having beneficial ownership of all common
stock held by members of such group. See "Agreements Among
Stockholders." Each such 5% Stockholder disclaims beneficial ownership
as to shares of common stock held by other 5% Stockholders.
(2)Through its subsidiaries, Transit Communications, Inc.
(681,818 shares), Satellite Communications Investments Corporation
(1,113,135 shares) and Space Technologies Investments, Inc.
(1,206,192). Transit Communications, Inc. is indirectly 80%-owned by
LIN Broadcasting Corporation, which is an indirect subsidiary of AT&T
Wireless. Satellite Communications Investments Corporation and Space
Technologies Investments, Inc. are direct or indirect subsidiaries of
AT&T Wireless.
(3)Includes 828,281 shares of common stock issuable upon exercise
of warrants issued in connection with the guarantees of the bank
financings.
(4)Hughes Communications Satellite Services, Inc. ("HCSSI") is an
indirect wholly-owned subsidiary of Hughes, which is a wholly-owned
subsidiary of General Motors Corporation. Includes 25,486 shares of
common stock issuable upon exercise of warrants issued to HCSSI on
January 19, 1996, in connection with a prior interim financing
facility guarantee and 4,969,688 shares of common stock issuable upon
exercise warrants issued in connection with the bank financings.
(5)Includes shares owned through the Company's matching 401(k)
Plan and/or Employee Stock Purchase Plan.
(6)Includes shares issuable upon the exercise of options granted
under the Director Plan which options are vested and exercisable
within sixty days after March 31, 2000, subject to compliance with
applicable securities laws.
(7)Includes 7,500 shares owned by Private Networks, Inc., a
company in which Mr. Parrott owns a one-third equity interest. Mr.
Parrott disclaims beneficial ownership as to all such shares of common
stock.
(8)Includes 1,050 shares owned by trusts for the benefit of each
of Mr. Quartner's three children, of which Mr. Quartner is trustee,
and 100 shares owned by Mr. Quartner's wife. Mr. Quartner disclaims
beneficial ownership as to all such shares of common stock.
(9)Includes shares issuable upon the exercise of options granted
under the Option Plan which options are vested and exercisable within
sixty days after March 31, 2000, subject to compliance with applicable
securities laws. Also includes shares of restricted stock awarded
under the Option Plan, which are subject to a number of conditions of
forfeiture.
(10)Includes 200 shares owned by Mr. Purnell's wife, as to which
Mr. Purnell disclaims beneficial ownership.
8
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Agreements Among Stockholders
Motorola Agreement
In connection with the acquisition of ARDIS from Motorola by the Company on
March 31, 1998 (the "ARDIS Acquisition"), and pursuant to the Stock Purchase
Agreement dated as of December 31, 1997, as amended March 31, 1998, American
Mobile, Motorola and certain of American Mobile's principal stockholders (Hughes
and AT&T Wireless) (the "Participating Stockholders") agreed to certain
registration rights with respect to American Mobile's common stock. Pursuant to
the terms of the Participation Rights Agreement entered into on December 31,
1997 (the "Participation Rights Agreement"), Motorola is entitled to certain
demand and participation ("piggyback") registration rights with respect to the
shares of common stock issued to Motorola as part of the ARDIS Acquisition.
Motorola or its transferees are entitled to two demand registrations with
respect to its shares of American Mobile's common stock, subject to certain
registration priorities and postponement rights of American Mobile. In addition,
Motorola is entitled to piggyback registration in connection with any
registration of securities by American Mobile (whether or not for its own
account) on a form which may be used for registration of the common stock held
by Motorola. Under the Participation Rights Agreement, Motorola's piggyback
registration rights have certain priorities for sale over those of other parties
(including the Participating Stockholders). Motorola's priority rights, however,
do not extend to a primary registration on behalf of American Mobile. Motorola
has registered all of its shares of American Mobile common stock on a shelf
registration statement filed by American Mobile and declared effective by the
SEC on March 31, 1999.
XM Ventures Agreements
The Company is obligated to register for resale the shares of its Common Stock
acquired by XM Ventures pursuant to an Exchange Agreement, dated July 7, 1999
(the "Exchange Agreement") by and among the Company, XM Radio and WorldSpace,
Inc. ("WorldSpace"). This resale registration statement was filed by the Company
and declared effective by the SEC on August 12, 1999.
XM Ventures also has "piggyback" registration rights with respect to its
American Mobile stock, when the Company proposes to register any of its
securities in an underwritten public offering. The piggyback registration rights
granted to XM Ventures are subject and subordinate to the registration rights
under all of the Company's other existing registration rights agreements with
other parties.
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In addition, beginning on the later of July 7, 2001 or the exercise or
expiration of all demand registration rights under all of the Company's other
existing registration rights agreements with other parties, but in no event
later than July 7, 2002, XM Ventures is entitled to two underwritten demand
registrations on customary terms and procedures. These demand registrations are
subject to the right of the Company's Board of Directors to delay any such
registration for up to 90 days upon its good faith determination that such
registration is not in the Company's best interests at that time.
XM Ventures has agreed to certain restrictions on the transfer of shares of
Common Stock received pursuant to the Exchange Agreement. Of the approximately 4
million shares of Common Stock originally issued to and still held by XM
Ventures, approximately 3.4 million shares are subject to contractual
restrictions on XM Ventures' ability to sell or otherwise transfer such shares.
Of these shares, approximately 1.7 million shares may be sold by XM Ventures
after April 7, 2000, and the remainder may be sold by XM Ventures after July 7,
2000.
There are also restrictions under the Exchange Agreement on XM Ventures' ability
under certain circumstances to transfer its shares of American Mobile common
stock to WorldSpace or any affiliate of WorldSpace, or to non-U.S. persons or
entities in which non-U.S. persons have a significant interest.
Stockholders' Agreement
American Mobile and each holder of shares of Common Stock who acquired such
shares prior to the Company's initial public offering are parties to a
Stockholders' Agreement, amended and restated as of December 1, 1993 (the
"Stockholders' Agreement"). The remaining parties to the Stockholders'
Agreement, AT&T Wireless and Hughes, hold approximately 26.93% of the
outstanding Common Stock on a fully diluted basis. The Stockholders' Agreement
includes provisions relating to certain corporate governance matters, as well as
the voting and transferability of shares of Common Stock held by the parties to
such agreement, and provisions intended to ensure compliance with applicable
laws and FCC regulations. While the Stockholders' Agreement technically remains
in effect, its practical effect has been reduced, or eliminated, as a result of
the changing nature of the Company's stockholder base and the increasing portion
of the outstanding shares of Common Stock held by the public.
10
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Executive Officers
Executive Officers of American Mobile are elected by, and serve at the
discretion of, the Board of Directors. As part of their responsibilities,
Executive Officers also currently serve as officers of the subsidiaries of
American Mobile, including AMSC Acquisition Company, Inc. ("AMSC Acquisition
Company"), AMSC Subsidiary, AMSC Subsidiary Corporation of Virginia, AMSC ARDIS,
Inc., AMSC ARDIS Acquisition, Inc. and ARDIS Company. Executive Officers receive
no additional compensation for these services. Information with respect to the
age, business experience and the affiliations of the Executive Officers of
American Mobile is set forth below.
Gary M. Parsons, Chairman of the Board of Directors, joined the Company in
July 1996. See "Nominees" for information regarding Mr. Parson's age, business
experience and affiliations.
Walter V. Purnell, Jr., Chief Executive Officer and President, joined the
Company in March 1998. See "Nominees" for information regarding Mr. Purnell's
age, business experience and affiliations.
Robert L. Goldsmith, 56. American Mobile's former Executive Vice President
and Chief Operating Officer. Prior to joining American Mobile in February 1997,
Mr. Goldsmith was the Senior Vice President of Sales and Marketing and General
Manager of the Commercial Services Division for Qwest Communications Company
("Qwest"). Prior to joining Qwest in 1995, Mr. Goldsmith was with MCI for nine
years in various executive sales and marketing positions. Mr. Goldsmith
terminated his employment with the Company effective March 24, 2000.
Dennis W. Matheson, 39. American Mobile's Senior Vice President and Chief
Technology Officer since March 2000. From 1993 to March 2000, Mr. Matheson held
other technical positions with American Mobile, most recently as Vice President
of Engineering and Advanced Technology. Before joining American Mobile, Mr.
Matheson was Senior Manager of Systems Architecture for Bell Northern Research,
a subsidiary of Northern Telecom. Prior to that, he held various positions with
Northern Telecom and Bell Northern Research within the design and product
management organizations, and before that he held various engineering positions
with Texas Instruments.
Randy S. Segal, 44. American Mobile's Senior Vice President, General
Counsel and Secretary since October 1992. Ms. Segal also serves as a Director of
XM Radio. From October 1983 to October 1992, Ms. Segal was associated with the
law firm of Debevoise & Plimpton in New York, New York. Prior to joining
Debevoise, Ms. Segal clerked for the Honorable Jerre S. Williams of the United
States Court of Appeals for the Fifth Circuit, and for the Honorable Edmund L.
Palmieri for the United States District Court for the Southern District of New
York.
11
<PAGE>
W. Bartlett Snell, 48. American Mobile's Senior Vice President and Chief
Financial Officer since March 1999. Mr. Snell was formerly the Senior Vice
President and Chief Financial Officer at Orbcomm Global, L.P. ("Orbcomm"), which
he joined in 1996. Prior to joining Orbcomm, Mr. Snell spent 16 years at IBM in
a variety of leadership positions in diverse business areas.
Compensation and Stock Option Committee Report
Introduction
The Company's compensation policy for 1999 was established by the Compensation
and Stock Option Committee consisting of Messrs. Brandon, Parrott, Parsons,
Purnell, Quartner, and Shaw. In accordance with this policy, which is discussed
in greater detail below, the Compensation and Stock Option Committee set the
base salaries of, and awarded cash bonuses, and stock options to, American
Mobile's Executive Officers for 1999.
American Mobile's Compensation Policy. American Mobile's compensation policy is
designed to (i) attract and retain a talented and highly motivated executive
corps, (ii) reward those executives for attaining personal, departmental and
company-wide goals and (iii) align the interests of those executives with the
interests of the Company's stockholders. Each of these objectives is addressed
to a greater or lesser extent by each of the three components of the executive's
compensation - base salary, annual bonus and equity based awards (restricted
stock awards and stock options).
In determining the base salaries of Executive Officers for 1999, the
Compensation and Stock Option Committee continued its evaluation, begun in 1998,
of the consistency of base and bonus compensation for executive and senior
management. Salary increases were based on a consideration of maintaining
comparable base salaries, within the context of recognizing the level of
individual performance during 1999.
Annual Bonus. American Mobile's Executive Officers are eligible for
discretionary annual bonuses. Performance objectives are set annually for each
executive, with relative values set for attaining each objective. At year end,
the Chief Executive Officer of the Company assesses each executive's success in
obtaining his or her performance objectives, and makes an appropriate
recommendation to the Compensation and Stock Option Committee regarding such
executive's annual bonus. Such recommendations are generally based, in part, on
quantitative factors relating to attainment of corporate objectives and, in
part, on more qualitative factors relating to individual performance.
12
<PAGE>
Equity Based Awards. The number and type of equity based awards granted to each
executive is determined by the Compensation and Stock Option Committee in its
discretion. In making its determination, the Compensation and Stock Option
Committee considers the executive's position at the Company, his or her
individual performance and other factors, including an analysis of the estimated
amount potentially realizable from the award.
In January 2000, the Committee approved the grant of stock options to senior
management to continue to align the interests of management with those of the
stockholders, and to incentivize and retain those executives. A significant
portion of these option grants to key employees include certain
performance-based provisions. Specifically, the Committee identified
approximately 33 key employees whose performance was deemed to most directly
impact the Company's ability to accomplish its Year 2000 corporate performance
objectives, including the subscribers, revenues and EBITDA (the "Performance
Options"). These Performance Options do not vest until the seventh (7th) year
following grant, unless the specified corporate performance objectives are met
in which case the options could vest one year after grant. The Performance
Options also include individual performance objectives to be met to achieve full
accelerated vesting of the Performance Options.
The Committee determined the number of regular options and Performance Options
to grant to these specified key employees as follows: The level of grants which
traditionally would have been made to each employee were halved, and that "half
grant" was made in the form of regular, three-year vesting, options. The
Committee then granted to the specified employees special Performance Grants
that require full achievement of corporate objectives for any option vesting
prior to seven years after grant. The Committee increased the remaining, "half
grant" to the employees by threefold in the Performance Grant, to provide a
strong incentive to the employees for full achievement of corporate goals.
The Committee believes that achievement of the corporate objectives bring
significant benefit to the stockholders, and that the performance options are
well- designed to target and assist in achieving those objectives.
Compensation of the Chief Executive Officer. The foregoing principles and
policies were applied in determining the compensation of Mr. Purnell, Chief
Executive Officer during 1999. During fiscal 1999, Mr. Purnell received a base
salary of $259,462 and a bonus of $86,625. In January 2000, the Compensation and
Stock Option Committee also awarded Mr. Purnell options to purchase a total of
200,000 shares of the Company's common stock, 150,000 of which were Performance
Options.
13
<PAGE>
Tax Deductibility of Executive Compensation. The Internal Revenue Code of 1986,
as amended (the "Code"), limits the federal income tax deductibility of
compensation paid to the Company's chief executive officer and to each of the
other four most highly compensated Executive Officers. The Company may deduct
such compensation only to the extent that during any fiscal year the
compensation does not exceed $1 million or meets certain specified conditions
(such as stockholder approval). Based on the Company's current compensation
plans and policies and recently released regulations interpreting the Code, the
Company and the Compensation and Stock Option Committee believe that, for the
near future, there is little risk that the Company will lose any significant tax
deduction for executive compensation. The Compensation and Stock Option
Committee intends to monitor this issue, and will consider modifications of the
Company's compensation policies as conditions warrant and to the extent
necessary to serve the best interests of the Company.
Douglas I. Brandon Billy J. Parrott Gary M. Parsons
Walter V. Purnell, Jr. Andrew A. Quartner Jack A. Shaw
Compensation and Stock Option Committee Interlocks and Insider Participation
During the fiscal year ended December 31, 1999, the Compensation and Stock
Option Committee of American Mobile's Board of Directors consisted of Messrs.
Brandon, Parrott, Parsons, Purnell, Quartner and Shaw. During 1999, the Company
and certain of its subsidiaries entered into contracts and other transactions
with certain affiliates of Hughes. All of these contracts and transactions were
approved by American Mobile's Board of Directors or Executive Committee, and the
Company believes that the contracts and transactions were made on terms
substantially as favorable to the Company as could have been obtained from
unaffiliated third parties. The following is a description of such contracts and
transactions.
In 1997, the Company reached an agreement with Hughes Aircraft, the manufacturer
of the Company's satellite (the "Satellite"), to reduce by 27.5% the amount of
certain performance payments owed by the Company to Hughes Aircraft under its
Satellite construction contract and to defer all payments otherwise due until
January 1998, based on certain satellite performance considerations. Thereafter,
certain additional contractual payment issues were raised by the Company. At
present, discussions are underway between the companies regarding such payments.
14
<PAGE>
Hughes Network Systems Limited ("HNS"), the manufacturer of the Company's land
earth stations (each an "LES") has provided AMSC Subsidiary software maintenance
services in support of the operation of the LESs at an annual rate of $1,000,000
for the twelve month period commencing December 1, 1999.
The Company has entered into a reseller agreement with Hughes Space &
Communications Company, through its Hughes Government Services ("HGS") business
unit, whereby American Mobile will sell the Company's services to HGS for resale
by HGS to federal government subscribers at rates to be established by HGS. Like
the Company's other government resellers, HGS will set rates and prices for
services and equipment, respectively and will be responsible for billing and
collecting amounts due from its customers. For 1999, the total amount of sales
to HGS were $24,637.
In connection with the ARDIS Acquisition, the Company, AMSC Acquisition Company
and its subsidiaries entered into agreements with Morgan Guaranty Trust Company
of New York, Toronto Dominion Bank, and certain other lenders (collectively, the
"Banks") to provide for two facilities: (i) the Revolving Credit Facility, a
$100 million unsecured five-year reducing revolving credit facility and (ii) the
Term Loan Facility, a $100 million five-year, term loan facility with up to
three additional one-year extensions subject to the Banks' approval
(collectively, the "Bank Financing"). The Term Loan Facility is secured by the
assets of the Company, principally its stockholdings in XM Radio and AMSC
Acquisition Company, which was formed in connection with the ARDIS Acquisition.
The Bank Financing is severally guaranteed by Hughes, Singapore
Telecommunications, Ltd. and Baron Capital Partners, L.P. (collectively, the
"Bank Facility Guarantors"). The principal amount of the Term Loan Facility has
been reduced to $41.0 million as of March 31, 2000.
In exchange for the additional risks undertaken by the Bank Facility Guarantors
in connection with the Bank Financing, American Mobile agreed, pursuant to a
Guaranty Issuance Agreement dated March 31, 1998 (the "GIA"), to compensate the
Bank Facility Guarantors, principally in the form of 1 million additional
warrants and repricing of 5.5 million warrants previously issued (together, the
"Guarantee Warrants"). As originally issued, the Guarantee Warrants had an
exercise price of $12.51. Further, in connection with the guarantees, American
Mobile agreed to reimburse the Bank Facility Guarantors in the event that the
Bank Facility Guarantors were required to make payment under the Revolving
Credit Facility guarantees and, in connection with this reimbursement
commitment, has provided the Bank Facility Guarantors a junior security interest
with respect to the assets of the Company, principally its stockholdings in XM
Radio and AMSC Acquisition Company.
15
<PAGE>
The Bank Facility Guarantors also obtained certain demand and piggy-back
registration rights with regard to the unregistered shares of the Company's
common stock held by them or issuable upon exercise of the Guarantee Warrants.
Pursuant to the terms of the Amended and Restated Registration Rights Agreement
among the Bank Facility Guarantors and the Company (the "Registration Rights
Agreement"), the Company agreed to (i) extend the expiration date for demand
registration rights with respect to the Bank Facility Guarantors' existing
warrants, (ii) provide registration rights for the warrants issued pursuant to
the GIA, and (iii) provide registration rights for other restricted securities
held by the Bank Facility Guarantors. Under the Registration Rights Agreement
the Bank Facility Guarantors are entitled to up to three demand registrations
with respect to their shares of American Mobile's common stock, subject to
certain registration priorities and postponement rights of American Mobile. In
addition the Bank Facility Guarantors are entitled to piggyback registration in
connection with any registration of securities by American Mobile (whether or
not for its own account), subject to certain Motorola priorities for sale under
the Participation Rights Agreement.
On March 22, 1999, American Mobile and the Bank Facility Guarantors agreed to
amend the Registration Rights Agreement to (1) extend the expiration date for
exercise of the demand registration rights granted thereunder to March 31, 2007,
(2) clarify that the rights provided in the Registration Rights Agreement are
assignable by the Bank Facility Guarantors provided that the prospective
assignee agrees to become a party to that agreement, and (3) provide one
additional demand registration right that may be exercised only by Hughes or its
assignee.
On March 29, 1999, the Bank Facility Guarantors agreed to eliminate certain
covenants contained in the GIA relating to the Company's Earnings Before
Interest, Depreciation, Amortization and Taxes ("EBITDA") and service revenue.
In exchange for this waiver, the Company agreed to amend the exercise price of
the Guarantee Warrants from $12.51 per share to $7.50 per share.
As a result of the automatic application of certain adjustment provisions
following the issuance of 7.0 million shares of common stock in the Company's
public offering in August 1999, the exercise price of the Guarantee Warrants was
further reduced to $7.36 per share, and the Guarantee Warrants became
exercisable for an additional 129,246 shares.
16
<PAGE>
Performance Graph
The graph set forth below shows the cumulative total return to holders of the
Company's common stock from December 31, 1994 through December 31, 1999,
computed by dividing (1) the difference between the closing price per share at
the beginning of such period and the last trading day of each month during such
period (the Company did not declare or pay dividends on its common stock during
such period) by (2) the closing share price at the beginning of such period, and
compares such return to the performance during such period of the Center for
Research in Security Prices ("CRSP") Total Return Index for The Nasdaq Stock
Market (U.S. Companies) ("Nasdaq U.S.") and the CRSP Nasdaq Telecommunications
Stock Index ("Nasdaq Telecom"). The Nasdaq U.S. index comprises all domestic
common shares traded on the Nasdaq National Market and the Nasdaq SmallCap
Market, and the Nasdaq Telecom index comprises all such domestic common shares
of companies falling under Standard Industrial Classification Code 48. These
indices are prepared for Nasdaq by the CRSP at the University of Chicago. The
graph assumes $100 invested on December 31, 1994 in the Company's common stock
(at $20.50 per share), the Nasdaq U.S. index and the Nasdaq Telecom index.
COMPARISON OF SIXTY MONTHS CUMULATIVE TOTAL RETURN
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Dec. '94 Dec. '95 Dec. '96 Dec. '97 Dec. '98 Dec. '99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
American Mobile 100.000 103.395 81.199 37.358 38.338 69.004
Nasdaq US 100.000 99.597 127.981 155.959 233.293 358.852
Nasdaq Telecom 100.000 112.867 100.077 139.079 211.116 369.233
</TABLE>
17
<PAGE>
Executive Compensation
The following tables set forth (a) the compensation paid or accrued by the
Company to the Company's chief executive officer and its four other most highly
compensated Executive Officers receiving over $100,000 per year (such officers,
the "Named Executive Officers") for services rendered during the fiscal years
ended December 31, 1999, 1998 and 1997 and (b) certain information relating to
options granted to such individuals.
Summary Compensation Table
<TABLE>
<CAPTION>
All Other
Annual Compensation Long-Term Compensation Compensation
----------------------------------------------------------------- --------------
Securities
Name and Other Annual Restricted Stock Underlying
Principal Position Year Salary Bonus Compensation(1) Awards(2) $ Options/SARs(3)
- ------------------ ---- ------ ----- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gary M. Parsons(4) 1999 $209,200 $168,438 $396 -
Chairman of the Board 1998 $349,596 $158,000 $10,122 $985,555 100,000 -
1997 $317,692 $87,500 $10,122 100,000 -
Robert L. Goldsmith(5) 1999 $243,624 $83,435 $1,062 60,000 -
Former Executive Vice 1998 $219,456 $76,406 $10,950 $665,250 -
President and Chief 1997 $189,807 - $9,581 100,000 -
Operating Officer
Walter V. Purnell, Jr.(6) 1999 $275,600 $86,625 $639 100,000 $101,912(7)
President and Chief 1998 $172,258 - $7,200 $709,600 80,000 $81,780(8)
Executive Officer
Randy S. Segal 1999 $223,698 $68,847 $243 50,000 -
Senior Vice President, 1998 $204,216 $66,850 $9,904 $532,200 - -
General Counsel and 1997 $191,000 $52,716 $9,888 25,000 -
W. Bartlett Snell(9) 1999 $172,615 - $306 $188,800 40,000 -
Vice President, Chief
Financial Officer
</TABLE>
(1) For fiscal years 1997, 1998 and 1999, dollar amount includes group term life
insurance premiums. For fiscal year 1997, dollar amount includes the personal
use of a company car and/or a car allowance.
(2)As of December 31, 1999, the dollar value of restricted stock held by each of
Messrs. Goldsmith, Parsons, Purnell and Snell and Ms. Segal was $1,037,500,
$2,305,553, $1,660,000, $830,000 and $830,000 respectively. The restricted stock
vests equally over three years and is subject to certain performance conditions
that may be waived by the Board of Directors.
(3)The numbers reflect grants of options to purchase shares of common stock
under the Option Plan. The Company has not granted stock appreciation rights
("SARs").
(4)Mr. Parsons was Chief Executive Officer and Chairman of the Board, and Mr.
Purnell was President, during 1998. The principal positions indicated above were
effective January 1, 1999.
(5)Messrs. Goldsmith and Snell joined the Company in February 1997 and March
1999, respectively.
(6)Mr. Purnell joined the Company in April 1998 upon the ARDIS Acquisition.
(7)Relates to relocation expenses.
(8)Relates to executive retirement plan pay-out.
18
<PAGE>
The following table sets forth each grant of stock options made during fiscal
year 1999 to each of the Named Executive Officers.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Individual Grants Value at Assumed
Annual Rates of
Number of % of Total Stock Price
Securities Options/SARs Appreciation for
Underlying Granted to Exercise or Option Term(3)
Options/SARs Employees/ Base Price
Name Granted(1)(2) Fiscal Year ($/Share) Expiration Date 5% 10%
---- ------------- ----------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert L. Goldsmith ............ 60,000 5.9449% $5.18 Jan. 28, 2009 $195,460 $495,335
Gary M. Parsons ................ 50,000 4.9541% $5.18 Jan. 28, 2009 $162,884 $412,779
Walter V. Purnell, Jr. ......... 100,000 9.9082% $5.18 Jan. 28, 2009 $325,767 $825,559
Randy S. Segal ......... 50,000 4.9541% $5.18 Jan. 28, 2009 $162,884 $412,779
W. Bartlett Snell ........ 40,000 3.9633% $4.72 Mar. 16, 2009 $118,735 $300,899
</TABLE>
(1)Does not include options granted on January 27, 2000, with respect to fiscal
year 1999. The numbers reflect the grant of options to purchase shares of common
stock under the Option Plan. The Company has not granted SARs.
(2)The options become exercisable in three annual installments, vesting at the
rate of 33 1/3 % per year for three years.
(3)Based on actual option term and annual compounding. The actual value a Named
Executive Officer may realize will depend upon the excess of the price of the
common stock over the exercise price on the date the option is exercised.
Accordingly, there is no assurance that the value ultimately realized by a Named
Executive Officer, if any, will be at or near the values indicated.
The following table sets forth, for each of the Named Executive Officers, the
value of unexercised options at fiscal year-end:
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values (1)
Number of Securities Underlying Value of Unexercised
Unexercised Options at Fiscal in-the-Money Options/SARs
Year-End(#) at Fiscal Year-End($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C>
Gary M. Parsons.................... 399,334/150,666 $3,545,048/$1,840,452
Walter V. Purnell, Jr.............. 26,667/153,333 $316,804/$2,190,596
Robert L. Goldsmith................ 66,000/94,000 $544,500/$1,214,700
Randy S. Segal .................... 115,432/58,500 $946,633/$845,990
W. Bartlett Snell.................. 0/40,000 $0/$641,200
(1) The Company has not granted SARs.
</TABLE>
19
<PAGE>
2.AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION TO REMOVE THE REQUIREMENT OF A MINIMUM BOARD
SIZE
On March 23, 2000, the Board of Directors approved an amendment to the Company's
Restated Certificate of Incorporation to remove the Certificate of
Incorporation's requirement of a minimum size for the Board of Directors.
Instead of specifying a minimum Board size, the Restated Certificate of
Incorporation, as amended by the proposed amendment, would provide that the
Board shall have such number of directors as may from time to time fixed by, or
in the manner provided in, the Company's Bylaws.
The Board of Directors concluded that the charter provision mandating a specific
minimum number of directors no longer serves a useful purpose, in light of the
Company's history and its current stockholder base. In its early life, both as a
privately held company and as a public company, the Company's outstanding shares
of Common Stock were closely held by a small number of stockholders. Over time,
the Company's stockholder base has broadened and diversified significantly.
Certain of the Company's historically significant stockholders have reduced
their equity positions, and the portion of the Company's outstanding stock held
by persons other than its original principal stockholders has increased. Also,
during this period certain of the Company's original principal stockholders have
either ceased to appoint representatives on the Company's Board of Directors, or
reduced their representation significantly. For these reasons, the Board
concluded that there is no longer a need to retain the minimum Board size
requirement in the Company's Certificate of Incorporation.
Also, with the fluctuation in the size of the Board in recent years, the Board
believes it would be prudent to remove the minimum Board size requirement in
order to avoid the need to amend the Certificate of Incorporation repeatedly in
future periods to reduce the Board size. In addition, the Board believes that
the minimum Board size provision is not customary for well established public
companies, and, accordingly, deems it advisable and appropriate to remove such
provision.
If this amendment is approved, the text of the first sentence of the second
paragraph of Article FIFTH of the Company's Restated Certificate of
Incorporation will be amended to read as follows:
The number of directors shall be such number as from time to time shall
be fixed by, or in the manner provided in, the Bylaws of the Corporation;
provided, that no decrease in the number of directors shall have the effect of
shortening the term of any incumbent director.
20
<PAGE>
Recommendation and Vote Required
The affirmative vote of the holders of two-thirds of the outstanding shares of
common stock is required to authorize the proposed amendment to the Restated
Certificate of Incorporation.
The Board of Directors Recommends a Vote FOR Proposal 2.
3.AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION TO CHANGE THE REQUIREMENT FOR AMENDING THE
CERTIFICATE OF INCORPORATION FROM TWO-THIRDS OF THE
OUTSTANDING STOCK TO A MAJORITY OF THE OUTSTANDING STOCK
On March 23, 2000, the Board of Directors approved an amendment to the Company's
Restated Certificate of Incorporation to change the requirement for amending the
Certificate of Incorporation from a vote of two-thirds of the outstanding common
stock to a majority of the outstanding common stock.
The Board of Directors concluded that the charter provision regarding amendments
of the charter no longer serves its original purpose. In its early life, both as
a privately held company and as a public company, the Company's outstanding
shares of Common Stock were closely held by a small number of stockholders. Over
time, the Company's stockholder base has broadened and diversified
significantly. Certain of the Company's historically significant stockholders
have reduced their equity positions, and the portion of the Company's
outstanding stock held by persons other than its original principal stockholders
has increased, and currently exceeds 50% of the Company's outstanding common
stock. For these reasons, the Board concluded that there is no longer a need to
retain the two-thirds vote requirement for amendments to the Certificate of
Incorporation.
In addition, the Board determined that the present two-thirds requirement for
charter amendments is not typical or customary for public companies incorporated
in Delaware. The Board believes that a two-thirds vote requirement could present
unnecessary and/or unintended obstacles to achieving stockholder approval of
charter amendments that may be in the best interests of the Company and its
stockholders.
If this amendment is approved, the text of the second sentence of Article
ELEVENTH of the Company's Restated Certificate of Incorporation will be amended
to read as follows:
21
<PAGE>
This Certificate may not be amended, modified, rendered
ineffective or repealed except by the vote of the holders of a
majority of the issued and outstanding shares of Common Stock.
Recommendation and Vote Required
The affirmative vote of the holders of two-thirds of the outstanding shares of
common stock is required to authorize the proposed amendment to the Restated
Certificate of Incorporation.
The Board of Directors Recommends a Vote FOR Proposal 3.
4.AMENDMENT AND RESTATEMENT OF THE 1989 EMPLOYEE STOCK OPTION
PLAN AS THE AMERICAN MOBILE SATELLITE CORPORATION STOCK
AWARD PLAN
General
The Board of Directors has approved and recommends to the stockholders a
proposal to amend and restate the Option Plan as the "American Mobile Satellite
Corporation Stock Award Plan," with such amended and restated Plan to
incorporate the following amendments: (i) an increase in the number of
authorized shares available for issuance under the Option Plan to 7,300,000;
(ii) broadening the eligibility criteria to add non-employee directors and
consultants as eligible participants under the Option Plan; (iii) expanding the
circumstances, consistent with current law and applicable federal securities
regulations, under which options may be transferred by the option holder, if the
Board or Compensation and Stock Option Committee chooses to permit such
transfers in an optionee's stock option agreement; (iv) clarifying that the
Company is authorized to make a variety of stock-based awards other than stock
options under the Option Plan; (v) extending the termination date of the Option
Plan to January 27, 2010; and (vi) certain other amendments of a conforming
and/or technical nature intended to ensure that the Option Plan is consistent
with current laws and regulations applicable to such plans.
The foregoing amendments incorporated in the Option Plan are summarized below,
and the complete text of the Option Plan is included in this Proxy Statement as
Annex A. The summary of the amendments is not intended to be a complete
description of the amendments, and the summary is qualified in its entirety by
the actual text of the Option Plan to which reference is made.
The amendments included within Proposal 4 and described below will not be
effective
22
<PAGE>
unless and until stockholder approval is obtained.
Summary of the Proposed Amendments and Reasons for the Amendments
This section summarizes the proposed amendments to the Option Plan, and also
describes the Board's reasons for adopting such amendments.
23
<PAGE>
1. Increase in Number of Authorized Shares Under Option Plan. The Board has
approved an increase in the number of shares of common stock authorized for
issuance under the Option Plan from 5,500,000 to 7,300,000
As of March 31, 2000, option grants and restricted stock awards for 4,455,604
shares were granted and outstanding, and 994,771 options had been exercised. In
the absence of an amendment to increase the number of shares authorized under
the plan, there would be only 155,410 shares remaining available for grant under
the plan. If Proposal 4 is adopted, there will be 1,955,410 shares of common
stock available for grant under the Option Plan.
The Company uses stock option grants as an integral part of its compensation
program for executives and employees. By doing so, the Company believes it links
compensation throughout the organization to the Company's performance. The Board
believes that this program has been an important factor in the Company's
attracting and retaining employees of outstanding ability and promoting the
identification of such employees' interests with those of the Company's
stockholders. For these reasons, the Board believes that it is appropriate to
continue such practice in the future through the use of stock options. The
Company has granted options under the Option Plan at a faster rate than it
originally expected to do when shareholders last approved an increase in the
number of authorized shares in 1998, primarily because of the Company's
continued growth and the significant increase in Company employees following the
acquisition of ARDIS in March 1998. In addition, as described above under
"Compensation and Stock Option Committee Report," the Board has made grants of
Performance Options to key employees, in addition to traditional option grants.
The Board believes that additional shares of common stock should be made
available under the Option Plan to facilitate the continued use of stock
options, as well as other stock-based awards, as part of the Company's overall
incentive compensation program.
2. Adding Non-Employee Directors and Consultants as Eligible Participants. The
Board has approved an amendment to broaden the eligibility criteria in the
Option Plan to permit awards to be made to non-employee directors and
consultants, as well as employees.
Currently, non-employee directors of the Company are eligible to receive options
pursuant to the terms of the Director Plan. As of March 31, 2000, option grants
for 95,000 shares were granted and outstanding under the Director Plan, and no
options had been exercised. In the absence of the amendments included within
Proposal 4, there would be only 5,000 shares remaining available for grant under
the Director Plan.
The Company originally adopted the Director Plan as a separate plan to ensure
that options granted to non-employee directors satisfied certain requirements
under Section 16 of the Securities Exchange Act of 1934, as amended (the
24
<PAGE>
"Exchange Act"), and the rules and regulations thereunder (the "Section 16
Rules"). In light of recent amendments to the Section 16 Rules, the Company has
determined that it is no longer required to maintain a separate plan with
respect to option grants for non-employee directors. The Company believes that
it can satisfy compliance with the Section 16 Rules and other applicable laws,
rules and regulations by making grants of stock options to non-employee
directors under the terms of a single plan governing awards to employees and
non-employee directors, the Option Plan. The Company intends to use the
remaining authorized shares under the Director Plan, and then begin using
available shares under the Option Plan, in making future awards of stock options
to non-employee directors. The Company believes that its continued grant of
options to non-employee directors will help to promote ownership by such
non-employee directors of a greater proprietary interest in the Company, thereby
aligning such directors' interests more closely with those of the Company's
stockholders. The Company also believes that its ability to grant stock options
to non-employee directors will assist it in attracting, and retaining, highly
qualified individuals to serve as non-employee directors.
The Board also believes that it is appropriate to broaden the eligibility
criteria under the Option Plan to permit consultants engaged in efforts on the
Company's behalf to be eligible to receive awards of stock options or other
stock-based awards, if the Board or Compensation and Stock Option Committee
deems it appropriate and in the best interests of the Company. The Board
believes that the flexibility to make such awards will assist the Company in
attracting and retaining non-employee consultants, and in motivating such
consultants to perform to the best of their abilities.
3. Expansion of Permitted Transfers of Stock Options. The Board has approved an
amendment to expand the circumstances, consistent with current law and
applicable federal securities regulations, under which options may be
transferred by the option holder, if the Board or Compensation and Stock Option
Committee elects to permit such transfers in optionees' individual stock option
agreements. Specifically, under the amendments approved by the Board, options
could be transferred, in transactions not for value, to specified "family
members" (as defined in the Option Plan), provided that the individual's option
agreement permits such transfers.
25
<PAGE>
Currently, the Option Plan permits the transfer of options only upon death or
pursuant to a qualified domestic relations order. The expanded circumstances
under which options may be transferred is intended to facilitate individuals'
estate planning. The Board adopted these changes so that the Company can, in its
discretion, elect to permit such transfers for specific option grants. The
expansion of circumstances in which options may be transferred is consistent
with recent changes in securities laws and related rules and regulations, and
the Board believes that it is appropriate for the Option Plan to be consistent
with such current laws, rules and regulations, in order to allow the Company the
maximum flexibility in administering the Option Plan.
4. Clarification of Permitted Types of Awards Under Plan. The Board has approved
certain amendments of language to clarify that the Company may make a variety of
stock-based awards to eligible participants under the Option Plan, in addition
to stock options. Specifically, the Board has added language clarifying that
participants may be awarded restricted stock, stock appreciation rights, phantom
shares, or other similar stock-based awards, in addition to grants of stock
options. The Board believes that these amendments merely clarify the Option
Plan's existing terms, which permit the award of "Bonus Stock." To date, the
only types of stock-based awards that have been made other than stock options
are awards of restricted stock. However, the Board believes that it is prudent
to clarify that the Company has the flexibility to design a variety of similar
stock-based award programs, in its discretion, in order to accomplish the
Company's objective of ensuring that its stock-based incentive compensation
programs adequately incentivize its employees.
5. Extension of Termination Date to January 27, 2010. The Board has approved an
amendment extending the termination date of the Option Plan to January 27, 2010,
which is ten years from the date the Board adopted such amendment. The Board
believes that it is prudent and appropriate to extend the Option Plan's
termination date for ten years, to January 27, 2010, to avoid interruptions or
complications that might arise in 2003, the current termination date, in the
absence of shareholder approval to extend the Plan's termination date at that
time.
Summary of the Option Plan
Set forth below is a summary of the principal terms of the Option Plan, as
proposed for amendment. The complete text of the Option Plan is included as
Annex A. The summary set forth below is not intended to be a complete
description of the Option Plan, and the summary is qualified in its entirety by
the actual text of the Option Plan to which reference is made.
26
<PAGE>
Unless sooner terminated by the Board, the Option Plan will expire on January
27, 2010. Such termination will not affect the validity of any option grant or
stock award outstanding on the date of termination.
27
<PAGE>
The Option Plan is administered by a committee comprised of at least two
non-employee directors of the Company, or, alternatively, may be administered by
the Board. Subject to the terms and conditions of the Option Plan, such
committee, or the Board, has the authority to select the persons to whom grants
of options or other stock-based awards are to be made, to designate the number
of shares of Common Stock to be covered by such grants or awards, and to make
all other determinations and take all other actions necessary or advisable for
the administration of the Option Plan.
Subject to the terms and conditions of the Option Plan, the committee
administering the Option Plan, or the Board, may modify, extend or renew
outstanding options, or accept the surrender of outstanding options granted
under the Option Plan or under any other stock option plan of the Company and
authorize the granting of new options pursuant to the Option Plan in
substitution therefor. The substituted options may specify a lower exercise
price than the surrendered options, a longer term than the surrendered options
or have any other provisions that are authorized by the Option Plan.
The Option Plan may be amended by the Board, subject to stockholder approval if
such approval is then required by applicable law.
Stock options and other stock-based awards may be granted or awarded to
employees of the Company, consultants, and non-employee directors. A participant
may receive more than one option or award provided that no participant may be
granted options or other stock-based awards under the Option Plan covering more
than 50% of the shares of Common Stock reserved for issuance under the Option
Plan as set forth above.
Stock options granted under the Option Plan will have exercise prices not less
than the greater of the fair market value of the optioned stock at the date of
grant or the par value of the optioned stock. Generally, options granted under
the Option Plan shall not be exercisable until the expiration of six months from
the date of grant or have a term greater than ten years after the date of grant.
Without limiting the discretion of the administering committee or Board of
Directors as to the terms of stock options granted in accordance with the
provisions of the Option Plan, options granted under the Option Plan generally
become exercisable as to 331/3% of the stock covered thereby on each of the
first three anniversaries of the date of grant, generally terminate ten years
after the date of grant, and generally have an exercise price equal to the fair
market value of the optioned stock at the date of grant. The committee
administering the Option Plan may in its discretion provide that options granted
under the Option Plan expire at specified times following, or become exercisable
in full upon, the occurrence of certain events, including a change of control,
death, disability or retirement.
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<PAGE>
The Option Plan permits the payment of the option exercise price to be made in
cash (which may include an assignment of the right to receive the cash proceeds
from the sale of Common Stock subject to the option pursuant to a "cashless
exercise" procedure) or by delivery of shares of Common Stock valued at their
fair market value on the date of exercise, or by a combination of both cash and
Common Stock. The Option Plan also provides, unless otherwise set forth in an
option agreement, for satisfaction of an optionee's or grantee's tax liabilities
arising in connection with the Option Plan through retention by the Company of
shares of Common Stock issuable upon the exercise of a nonstatutory stock option
or pursuant to another stock-based award or through delivery of shares of Common
Stock to the Company subject to the terms and conditions set forth in the Option
Plan and under such other terms and conditions as set forth in an option
agreement.
Unless provided otherwise in an option agreement, in the case of transfers to
certain family members of the optionee, options granted under the Option Plan
shall not be transferable otherwise than by will, by the laws of descent and
distribution or pursuant to a qualified domestic relations order (as defined in
the Internal Revenue Code), and may be exercised during the optionee's lifetime
only by the optionee or, in the event of the optionee's legal disability, by the
optionee's legal representative.
Stock-based awards other than options may also be awarded under the Option Plan.
A stock-based award consists of shares of Common Stock that may be issued from
time to time under such conditions (if any) that the committee administering the
Option Plan, or the Board, may prescribe. Such conditions might include such
matters as continued employment with the Company for a specified period of time
or achievement of certain performance goals.
Certain Federal Income Tax Matters
An optionee will not recognize income on the grant of a nonstatutory stock
option, but generally will recognize ordinary income on the exercise of a
nonstatutory stock option. The amount of income recognized on the exercise of a
nonstatutory stock option generally will be equal to the excess, if any, of the
fair market value of the shares at the time of exercise over the aggregate
exercise price paid for the shares, regardless of whether the exercise price is
paid in cash or in shares. The Company generally will be entitled to a deduction
in the amount of ordinary income so recognized, subject to satisfying certain
income tax reporting requirements.
29
<PAGE>
A grantee who receives a stock-based award that is not subject to restrictions
generally will recognize ordinary income with respect to the shares on the date
of grant. If the shares of stock are subject to a substantial risk of forfeiture
on the date of grant, the grantee is not required to include the value of such
shares in ordinary income until the shares become no longer subject to a
substantial risk of forfeiture, unless the grantee elects to be taxed on receipt
of the shares. In either case, the amount of such income generally will be equal
to the fair market value of the shares at the time the income is recognized. The
Company generally will be entitled to a deduction in the amount of ordinary
income so recognized, subject to satisfying certain income tax reporting
requirements.
The rules governing the tax treatment of options and stock-based awards, and an
optionee's or grantee's receipt of shares in connection with such grants or
awards, are quite technical, so that the above description of tax consequences
is necessarily general in nature and does not purport to be complete. Moreover,
statutory provisions are, of course, subject to change, as are their
interpretations, and their application may vary in individual circumstances.
Finally, the tax consequences under applicable state law may not be the same as
under the federal income tax laws.
Section 162(m) of the Internal Revenue Code
The Board of Directors and the members of its Compensation and Stock Option
Committee believe that, as a matter of general policy, the Company's incentive
compensation plans should be structured to facilitate compliance with Section
162(m) of the Internal Revenue Code ("Section 162(m)"). Section 162(m) generally
disallows a public company's tax deduction in excess of $1 million for
compensation to its chief executive officer and the four other most highly
compensated executive officers, subject to an exception for performance-based
compensation. Options granted under a shareholder-approved plan such as the
Option Plan generally qualify for the performance-based exception to Section
162(m). However, the Board and the Compensation and Stock Option Committee also
believe that the Compensation and Stock Option Committee should reserve the
right to establish other incentive compensation arrangements for otherwise
covered executive officers that may not comply with Section 162(m) if it
determines, in its sole discretion, that to do so would be in the best interests
of the Company and its stockholders
Vote Required
The affirmative vote of a majority of the shares of common stock present in
person or represented by proxy and entitled to vote at the annual meeting is
required to approve the amendments incorporated within the Option Plan.
30
<PAGE>
The Board of Directors unanimously recommends that stockholders vote FOR
approval of Proposal 4.
5.AMENDMENT OF
EMPLOYEE STOCK PURCHASE PLAN
TO INCREASE NUMBER OF AUTHORIZED SHARES
General
On January 27, 2000, the Board of Directors approved an amendment to the
Company's Employee Stock Purchase Plan (the "Purchase Plan") to increase the
number of shares of Common Stock authorized for issuance under such plan from
300,000 to 600,000.
The Board concluded that this increase in the number of shares available for
issuance under the Purchase Plan was necessary in order to have a sufficient
number of shares available for issuance to employees who participate in the
Purchase Plan. This increase is necessary for several reasons. First, the
Purchase Plan has not been increased since it was first adopted in 1993. Second,
the number of people employed by the Company has grown significantly since the
Purchase Plan was first adopted, especially as a result of the acquisition of
ARDIS in 1998. This has resulted in a greater number of Purchase Plan
participants. In addition, during 1998 and 1999 the Company's relatively low
stock price resulted in a greater number of shares being issued pursuant to the
Purchase Plan than in prior periods. For all these reasons, the Board believes
it is appropriate to increase the number of shares available under the Purchase
Plan. The Board considers the Purchase Plan, like the Option Plan, to be an
important attraction for prospective employees and a valued benefit of existing
employees.
Summary of the Purchase Plan
The Purchase Plan is designed to encourage employee ownership of the Company by
offering eligible employees an opportunity to purchase Common Stock at a
discount through payroll deductions.
The minimum amount that employees can contribute under the Purchase Plan is 1%
of their "eligible compensation", but no less than $5.00 per pay period. The
maximum amount they can contribute is $21,250 per calendar year. Employees may
elect to deduct either a percentage of their bi-weekly pay, or a fixed dollar
amount. "Eligible compensation" is base pay, overtime, bonuses, and commissions.
The price used to buy stock is equal to 85% of the lesser of the fair market
value on the first day and the last day of each purchase period under the
Purchase Plan.
31
<PAGE>
If there is an insufficient number of unsold shares in any purchase period that
may be made available for purchase under the Purchase Plan to permit exercise of
all rights deemed exercised by participating employees, an adjustment will be
made, and the number of shares purchasable by all participants will be reduced
proportionately. Any funds then remaining in participants' accounts will be
refunded to participants.
In any calendar year, no employee may purchase shares of American Mobile stock
having an aggregate fair market value over $25,000, determined, as to shares
purchased during each purchase period in such calendar year, as of the first day
of such purchase period. The Board of Directors may modify the Purchase Plan in
any respect, but must obtain the approval of a majority of the votes cast at a
duly held meeting of American Mobile's stockholders for any modification that
(i) changes the requirements as to the eligibility for participation in the
Purchase Plan; (ii) increases the maximum number of shares subject to purchase
under the Purchase Plan, unless such increase results from a change in
capitalization, or (iii) materially increases the benefits accruing to Purchase
Plan participants. After giving effect to the proposed amendment, 600,000 shares
of common stock shall be authorized to be issued under the Purchase Plan.
Certain Federal Income Tax Matters
The Purchase Plan is intended to qualify as an "employee stock purchase plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. Amounts
withheld from pay under the Purchase Plan will be taxable income to employees in
the year in which the amounts otherwise would have been received, but employees
will not be required to recognize additional income for federal income tax
purposes either at the time such employee is deemed to have been granted a right
to purchase common stock (on the first day of a purchase period) or when the
right to purchase common stock is exercised (on the last day of a purchase
period).
If an employee holds the common stock purchased under the Purchase Plan for at
least two years after the first day of the purchase period in which the stock
was purchased (the "Grant Date"), when the employee disposes of the common
stock, he or she will recognize as ordinary income an amount equal to the lesser
of (a) 15% of the fair market value of the common stock on the Grant Date or (b)
the excess of the fair market value of the common stock on the date of
disposition over the price paid for the stock. If an employee disposes of the
common stock within two years after the Grant Date, he or she will recognize
ordinary income equal to the fair market value of the common stock on the last
day of the purchase period in which the stock was acquired (the "Purchase Date")
less the amount paid for the common stock.
32
<PAGE>
Upon an employee's disposition of the common stock acquired under the Purchase
Plan, any gain realized in excess of the amount reported as ordinary income will
be reportable by the employee as a capital gain, and any loss will be reportable
as a capital loss. Amounts required to be reported as ordinary income on the
disposition of the common stock may be added to the purchase price in
determining any remaining capital gain or loss. American Mobile will not receive
any deduction for federal income tax purposes with respect to common stock
purchased under the Purchase Plan and held for the two year holding period. With
respect to stock purchased under the Purchase Plan and held less than two years,
American Mobile would be entitled to a deduction in an amount equal to the
amount that is considered ordinary income. Otherwise, the Purchase Plan has no
tax effect on American Mobile.
Recommendation and Vote Required
The affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy and entitled to vote at the annual meeting is
required to approve the amendment to the Employee Stock Purchase Plan.
The Board of Directors Recommends a Vote FOR Proposal 5.
6.RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
On the recommendation of the Audit Committee, the Board of Directors has
appointed Arthur Andersen LLP as independent accountants for the Company for the
year 2000, subject to ratification by the stockholders at the annual meeting.
Arthur Andersen LLP have been the independent accountants for the Company since
1988. A representative of Arthur Andersen LLP will be present at the annual
meeting of stockholders with the opportunity to make a statement if he or she so
desires and to respond to appropriate questions.
The Board of Directors unanimously recommends a vote FOR ratification of the
appointment of Arthur Andersen LLP as independent accountants for the Company
for the year 2000.
32
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's directors, its
executive officers, and any persons holding more than ten percent of the
Company's common stock are required to report their ownership of the Company's
common stock and any changes in that ownership to the Securities and Exchange
Commission (the "SEC") and the National Association of Securities Dealers, Inc.
Specific due dates for these reports have been established by the Securities and
Exchange Commission and the Company is required to report in this proxy
statement any failure to file by these dates. No person associated with the
Company who was required to file under these rules failed to file any such
required report in 1999. XM Ventures was late in filing on Form 4 the sale of
95,000 shares of American Mobile common stock. In making this statement, the
Company has relied on the written representations of its directors and officers
and copies of the reports that have been filed with the SEC.
OTHER MATTERS
The Board of Directors is not aware of any other matters to be presented at the
annual meeting. If any other matter proper for action at the meeting should be
presented, the holders of the accompanying proxy will vote the shares
represented by the proxy on such matter in accordance with their best judgment.
If any matter not proper for action at the meeting should be presented, the
holders of the proxy will vote against consideration thereof or action thereon.
All shares represented by the accompanying proxy, if the proxy is duly executed
and received by the Company at or prior to the meeting, will be voted at the
meeting in accordance with any instructions specified on such proxy and, where
no instruction is specified, as indicated on such proxy.
PROPOSALS FOR THE COMPANY'S ANNUAL MEETING IN 2001
The Company will review for inclusion in next year's proxy statement stockholder
proposals received by December 21, 2000. Proposals should be sent to the
Secretary of the Company, 10802 Parkridge Boulevard, Reston, Virginia
20191-5416. In order to be included in the proxy statement for next year's
annual meeting, such proposals must comply with all of the requirements of Rule
14a-8 under the Securities Exchange Act of 1934 (the "Exchange Act").
33
<PAGE>
A stockholder who wishes to submit a proposal for inclusion in next year's proxy
statement, outside the processes of Rule 14a-8 under the Exchange Act, must, in
accordance with Article II, Section 13 of the Company's By-Laws, file a written
notice with the Secretary of the Company which conforms to the requirements of
the By-Laws. If the Board of Directors or a designated committee or officer who
will preside at the stockholders meeting determines that the information
provided in such notice does not satisfy the informational requirements of the
By-Laws or is otherwise not in accordance with law, the stockholder will be
notified promptly of such deficiency and be given an opportunity to cure the
deficiency within the time period prescribed in the By-Laws. Such notice of a
stockholder proposal must be delivered not less than 60 days nor more than 120
days prior to the date of the annual meeting to be held in 2001 (unless such
notice relates to a special meeting or the annual meeting is called to be held
before the date specified in the By-Laws, in which case the stockholder proposal
must be delivered no later than the close of business on the tenth day following
the date on which notice of the meeting is publicly announced). Any stockholder
proposal that is not submitted in accordance with the foregoing procedures will
not be considered to be properly brought before the 2001 annual meeting, and, if
presented at the meeting, the Company will be able to use proxies given to it
for such meeting to vote for or against any such proposal at the Company's sole
discretion.
1999 ANNUAL REPORT
American Mobile's Annual Report to Stockholders for the year ended December 31,
1999, including financial statements ("Annual Report"), is being furnished
concurrently with this Proxy Statement to persons who were stockholders of
record as of March 31, 2000, the record date for the Annual Meeting.
By order of the Board of Directors,
Randy S. Segal
Senior Vice President and Secretary
Reston, Virginia
April 19, 2000
34
<PAGE>
ANNEX A
[GRAPHIC OMITTED]
AMERICAN MOBILE SATELLITE CORPORATION
STOCK AWARD PLAN
As Amended and Restated To Be Effective May 23, 2000
1. Definitions
In this Plan, except where the context otherwise indicates, the
following definitions apply:
A. "Agreement" means a written agreement implementing a grant of an
Optionor a Stock-Based Award.
B. "Board" means the Board of Directors of the Corporation.
C. "Code" means the Internal Revenue Code of 1986, as amended.
D. "Committee" means a committee of, and designated from time to
time by resolution of, the Board, which shall consist of no
fewer than two members of the Board, none of whom shall be an
officer or other salaried employee of the Company or any
affiliate of the Company.
E. "Common Stock" means the common stock, par value $.01 per share,
of the Corporation.
F. "Consultant" means an individual or entity who is in a
consulting relationship with the Corporation or any Subsidiary
of the Corporation.
G. "Corporation" means AMERICAN MOBILE SATELLITE CORPORATION.
H. "Date of Exercise" means the date on which the Corporation
receives notice of the exercise of an Option in accordance
with the terms of Article 7.
I. "Date of Grant" means the date as of which an Option is
granted or a Stock- Based Award is authorized by the action of
the Committee, or such later date as may be specified in the
authorization.
J. "Employee" means any person determined by the Committee to be an
employee of the Corporation or of a Subsidiary.
<PAGE>
K. "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder.
L. "Fair Market Value" of a Share means the amount equal to the
average of the highand low prices of a Share on the applicable
date as reported by the consolidated tape of the National
Association of Securities Dealers Automated Quotation (or on
such other recognized quotation system on which the trading
prices of the Common Stock are quoted on the applicable date),
or, if no Share transactions are reported on such tape (or such
other system) on the applicable date, the high and low prices
of a Share on the immediately preceding date on which Share
transactions were so reported, or as determined pursuant
to a reasonable method adopted by the Committee in good
faith for such purpose.
M. "Grantee" means a Participant to whom a Stock-Based Award has
been granted.
N. "Insider" means an Optionee or Grantee who is subject to the
reporting requirements under Section 16(a) of the Exchange
Act.
O. "Non-Employee Director" means a member of the Board who is not
an employee of the Corporation.
P. "Option" means an option to purchase Shares granted under the
Plan in accordance with the terms of Article 6.
Q. "Option Period" means the period during which an Option may be
exercised.
R. "Option Price" means the price per Share at which an Option
may be exercised. The Option Price shall not be less than the
greater of the Fair Market Value per Share determined as of
the Date of Grant or the par value of the Common Stock.
S. "Optionee" means a Participant to whom an Option has been
granted.
T. "Participant" means any Employee, Consultant, or Non-Employee
Director participating under the Plan.
U. "Plan" means this AMERICAN MOBILE SATELLITE CORPORATION Stock
Award Plan, as the same shall be amended, revised, or terminated
from time to time.
V. "Reload Option" means a new Option granted to an Optionee upon
the surrender of Shares to pay the Option Price of a previously
granted Option. The Option Price for any Reload Option shall
<PAGE>
not be less than the greater of the Fair Market Value of a
Share on the date that Shares are surrendered in payment of the
Option Price in accordance with Section 3.A(d) or the par value
of the Common Stock. Other terms of the Reload Option shall
be the same as the terms contained in the Optionee's Agreement
relating to the Option being exercised.
W. "Share" means a share of Common Stock.
X. "Stock-Based Award" means any award, other than the grant of an
Option, to a Participant of any stock-based instrument in
accordance with Article 9 of the Plan, including, but not
limited to, the award of restricted stock, unrestricted stock,
stock appreciation rights, and phantom shares.
Y. "Subsidiary" means a corporation at least 50% of the total
combined voting power of all classes of stock of which is owned
by the Corporation either directly or through one or more
Subsidiaries.
Z. "Withholding Tax Liabilities" means the Corporation's federal,
state and any local income tax and payroll withholding tax
obligations arising in connection with the exercise of an
Option or the grant of a Stock-Based Award (or issuance of
underlying Shares) under the Plan. Withholding Tax Liabilities
does not include the Corporation's share of any payroll taxes.
2. Purpose
The Plan is intended to promote the success and enhance the value of the
Corporation by linking the personal interests of Participants to those of the
Corporation's shareholders by providing the Participants with an incentive for
outstanding performance. The Plan is further intended to assist the Corporation
in its ability to motivate, and retain the services of, Participants upon whose
judgment, interest and special effort the successful conduct of its operations
is largely dependent.
3. Administration
The Plan shall be administered by the Committee, but may also be
administered by the Board. In addition to any other powers granted to the
Committee, it shall have the following powers, subject to the express provisions
of the Plan:
A. subject to the provisions of this Plan, to determine
in its discretion the Participants to whom Options
shall be granted and to whom Stock-Based Awards shall
be made, the number of Shares to be subject to each
Option or Stock-Based Award, and the terms upon which
Options may be acquired and exercised and the terms
and conditions of Stock-Based Awards;
<PAGE>
B. to determine all other terms and provisions of each
Agreement, which need not be identical;
C. without limiting the generality of the foregoing, to
provide in its discretion in an Agreement:
a. for an agreement by the Optionee or Grantee
to render services to the Corporation upon such
terms and conditions as may be specified in the
Agreement, provided that the Committee shall not
have the power to commit the Corporation to employ
or otherwise retain any Optionee or Grantee;
b. for restrictions on the transfer, sale or other
disposition of Shares issued to the Optionee upon
the exercise of an Option or for other
restrictions permitted by Article 9 with respect
to Stock-Based Awards;
c. for an agreement by the Optionee or Grantee to
resell to the Corporation, under specified
conditions, Shares issued upon the exercise of
an Option or awarded pursuant to a Stock-Based
Award;
d. for the right of the Optionee to surrender to the
Corporation an Option (or a portion thereof)
that has become exercisable and receive upon such
surrender, without any payment to the Corporation
or a Subsidiary (other than amounts necessary to
satisfy Withholding Tax Liabilities with respect
to the Option) that number of Shares (equal to
the highest whole number of Shares) having an
aggregate Fair Market Value as of the date of
surrender equal to that number of Shares subject
to the Option (or portion thereof) being
surrendered multiplied by an amount equal to the
excess of (i) the Fair Market Value of a Share on
the date of surrender over (ii) the Option Price,
plus an amount of cash equal to the Fair
Market Value of any fractional Share to which the
Optionee might be entitled; any such surrender
shall be treated as the exercise of the Option (or
portion thereof); and
e. for the automatic issuance of a Reload Option
covering a number of Shares equal to the number of
any Shares used to pay the Option Price;
D. to construe and interpret the Agreements and the Plan;
<PAGE>
E. to require, whether or not provided for in the
pertinent Agreement, of any person exercising an
Option or acquiring Shares pursuant to a Stock-Based
Award, at the time of such exercise or acquisition,
the making of any representations or agreements which
the Committee may deem necessary or advisable in order
to comply with the securities laws or the United States
or of any state; and
F. to make all other determinations and take all other
actions necessary or advisable for the administration
of the Plan.
Any determinations or actions made or taken by the Committee pursuant to
this Article shall, subject to the express provisions of this Plan, be binding
and final.
4. Eligibility
Options and Stock-Based Awards may be granted only to (i) Employees, (ii)
Consultants, and (iii) Non-Employee Directors. Subject to the limitations of
Section 5.A, a Participant who has been granted an Option or Stock-Based Award
may be granted additional Options or Stock-Based Awards.
5. Stock Subject to the Plan
A. Subject to adjustment as provided in Article 11, an
aggregate of 7,300,000 authorized and unissued Shares,
reissued treasury Shares, or Shares otherwise acquired by
the Corporation, may be issued under the Plan upon the
exercise of Options or pursuant to Stock-Based Awards,
provided, however, that no Employee may be granted Options
and Stock-Based Awards covering more than 50% of the number
of Shares issuable under the Plan.
B. If an Option expires or terminates for any reason without
having been fully exercised, or if Stock-Based Awards (or
Shares underlying such awards) are forfeited, the
unpurchased Shares which had been subject to the Option at
the time of its expiration or termination, or the forfeited
Stock-Based Awards (or Shares underlying such awards), shall
become available for the grant of other Options or for the
award of additional Stock-Based Awards, provided, that in
the case of forfeited Shares and to the extent necessary to
satisfy the provisions of Rule 16b-3 under the Exchange Act,
the Grantee has received no dividends prior to forfeiture
with respect to such Shares.
6. Options
A. Subject to the provisions of this Plan, the Committee is
hereby authorized to grant Options to Participants.
<PAGE>
B. All Agreements granting Options shall contain a statement
that the Option is intended to be a nonstatutory stock
option and not an incentive stock option as defined in
section 422 of the Code.
C. The Option Period shall be determined by the Committee and
specifically set forth in the Agreement, provided, however,
that an Option shall not be exercisable before six months
from the Date of Grant (except that this limitation need not
apply in the event of the death of the Optionee within the
six-month period) and no Option shall be exercisable after
ten years after the Date of Grant.
D. By accepting the grant of an Option under the Plan, each
Optionee agrees, for the Optionee and his or her successors,
that the Option may not be exercised at any time that the
Corporation does not have in effect a registration statement
under the Securities Act of 1933, as amended, relating to
the offer of Common Stock to the Optionee under the Plan,
unless the Corporation agrees to permit such exercise, and
that, upon the issuance of any Shares upon the exercise of
the Option, the Optionee will, upon the request of the
Corporation, agree in writing that he or she is acquiring
such Shares for investment only and not with a view to
resale, and that he or she will not sell, pledge or
otherwise dispose of such Shares so issued unless and until
(i) the Corporation is furnished with an opinion of counsel
to the effect that registration of such Shares pursuant to
the Securities Act of 1933, as amended, is not required by
that Act and the rules and regulations thereunder; (ii) the
staff of the Securities and Exchange Commission has issued a
"no-action" letter with respect to such disposition; or
(iii) such registration or notification as is, in the
opinion of counsel for the Corporation, required for the
lawful disposition of such Shares has been filed by the
Corporation and has become effective; provided, however,
that the Corporation shall not be obligated to file any such
registration or notification. The Option shall further agree
that the Company may place a legend embodying such
restriction on the certificates evidencing such shares.
E. All other terms of Options granted under the Plan shall be
determined by the Committee in its sole discretion, as
exercised consistently with the terms of the Plan, and
specifically set forth in the Optionee's agreement. Any
terms of Options determined by the Committee that vary from
the express terms set forth in the Plan also shall be
specifically set forth in the Optionee's Agreement.
7. Exercise
A. An Option may, subject to the provisions of the Agreement
under which it was granted, be exercised in whole or in part
by the delivery to the Corporation of written notice of the
exercise, in such form as the Committee may prescribe,
accompanied by full payment of the Option Price for the
Shares with respect to which the Option is exercised in
accordance with Section 7.B, and by satisfaction by the
Optionee of Withholding Tax Liabilities in accordance with
Article 10.
<PAGE>
B. The Option Price may be paid in the form of (i) cash, which
may include an assignment of the right to receive cash
proceeds of the sale of Common Stock subject to the Option
pursuant to a "cashless exercise" of the Option through a
transaction with a broker, (ii) duly endorsed certificates
representing Shares (other than Shares that are subject to a
substantial risk of forfeiture) having a Fair Market Value
on the Date of Exercise aggregating not more than the
portion of the Option Price being paid by delivery of such
Shares (which Shares, if acquired from the Corporation,
shall have been held for at least six months), or (iii) a
combination of cash and Shares as provided in Sections
7.B(i) and (ii).
C. To the extent required to comply with Treasury
Regulationss.1.401(k)-1(d)(2)(iv)(B)(4), or any amendment or
successor thereto, an Optionee's "elective and employee
contributions" (within the meaning of such Treasury
Regulation) under the Plan shall be suspended for a period
of twelve months following such Optionee's receipt of a
hardship distribution made in reliance on such Treasury
Regulation from any plan containing a cash or deferred
arrangement under Section 401(k) of the Code maintained by
the Corporation or a related party within the provisions of
subsections (b), (c), (m) or (o) of Section 414 of the Code.
8. Nontransferability
A. Except to the extent provided in Section 8.B below, Options
granted under the Plan shall not be transferable otherwise
than (a) by will or the laws of descent and distribution, or
(b) pursuant to a qualified domestic relations order as
defined in Section 414(p) of the Code or Title I of the
Employee Retirement Income Security Act or the rules
thereunder, and an Option may be exercised, during the
Optionee's lifetime, only by the Optionee or, in the case of
the Optionee's legal disability, by the Optionee's legal
representative.
B. If authorized in the applicable Agreement, an Optionee may
transfer, not for value, all or part of an Option to any
Family Member (as defined in this Section 8.B). For the
purpose of this Section 8.B, a "not for value" transfer is a
transfer which is (i) a gift, (ii) a transfer under a
domestic relations order in settlement of marital property
rights; or (iii) a transfer to an entity in which more than
fifty percent of the voting interests are owned by Family
<PAGE>
Members (or the Optionee) in exchange for an interest in
that entity. Following a transfer under this Section 8.B),
any such Option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to
transfer. Subsequent transfers of transferred Options are
prohibited except to Family Members of the original Optionee
in accordance with this Section 8.B or by will or the laws
of descent and distribution. The events of termination of
employment or other relationship shall continue to be
applied with respect to the original Optionee, following
which the Option shall be exercisable by the transferee only
to the extent, and for the periods specified with respect to
the original Optionee. For purposes of Section 8.B, "Family
Member" means a person who is a spouse, child, stepchild,
grandchild, parent, stepparent, grandparent, sibling, niece,
nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, of the Optionee, any person sharing
the Optionee's household (other than a tenant or employee),
a trust in which these persons have more than fifty percent
of the beneficial interest, a foundation in which these
persons (or the Optionee) control the management of assets,
and any other entity in which these persons (or the
Optionee) own more than fifty percent of the voting
interests.
9. Stock-Based Awards
A. Subject to the provisions of this Plan, the Committee is
hereby authorized to make Stock- Based Awards to
Participants.
B. Shares underlying Stock-Based Awards shall be issued at such
times, subject to achievement of such performance or other
goals and on such other terms and conditions as the
Committee shall deem appropriate.
10. Satisfaction of Withholding Tax Liabilities
Each Optionee or Grantee must provide the Corporation with the means to
satisfy the Corporation's Withholding Tax Liabilities, with respect to any
income recognized by the Optionee or Grantee as a result of the exercise of an
Option or award of a Stock-Based Award (or the underlying Shares). Unless
otherwise determined by the Committee and specifically set forth in the
Optionee's or Grantee's Agreement, an Option or Grantee may satisfy Withholding
Tax Liabilities by (i) delivering cash to the Corporation, (ii) electing to have
the Corporation retain Shares otherwise issuable on the exercise of the Option
or pursuant to the award of a Stock-Based Award (other than Shares that are
subject to a substantial risk of forfeiture), (iii) delivering shares (other
than Shares that are subject to a substantial risk of forfeiture) to the
Corporation, or (iv) electing to satisfy Withholding Tax Liabilities through a
combination of clauses (i), (ii) or (iii) of this Article 10. Satisfaction of
Withholding Tax Liabilities also shall be accomplished under such additional
<PAGE>
reasonable terms and conditions as the Committee deems appropriate. Unless
otherwise determined by the Committee and specifically set forth in the
Optionee's or Grantee's Agreement, in the case of an Insider who elects to
satisfy Withholding Tax Liabilities by having the Corporation retain Shares
otherwise issuable on the exercise of an Option or pursuant to a Stock-Based
Award, the Insider shall have the right to so satisfy Withholding Tax
Liabilities through (a) an irrevocable election made at least six months in
advance of the date on which the Withholding Tax Liabilities arise, and (b) if
the Withholding Tax Liabilities arise during the ten business day period
beginning on the third business day following the public release of the
Corporation's quarterly or annual earnings ("Window Period"), an irrevocable
election made during such Window Period.
11. Capital Adjustments
The number and class of Shares subject to each outstanding Option or Stock-
Based Award, the Option Price and the aggregate number and class of Shares for
which grants or awards thereafter may be made shall be equitably adjusted by the
Committee to reflect such events as stock dividends, stock splits, extraordinary
cash dividends, adoption of stock rights plans, split-ups, split-offs,
spin-offs, liquidations, combinations or exchange of shares, recapitalizations,
mergers, consolidations, reorganizations or any similar transaction of or by the
Corporation.
12. Termination or Amendment
The Board shall have the power to terminate the Plan and to amend it in any
respect, provided that, after the Plan has been approved by the shareholders of
the Company, the Board may not, without the approval of the shareholders of the
Company if such approval is then required by applicable law, amend the Plan so
as to increase materially the number of Shares that may be issued under the Plan
(except as provided in Article 11), to modify materially the requirements as to
eligibility for participation in the Plan, or to increase materially the
benefits accruing to participants under the Plan. No termination or amendment of
the Plan shall, without his or her consent, adversely affect the rights or
obligations of any Optionee or Grantee.
13. Modification, Extension and Renewal of Options and Bonus Stock
Subject to the terms and conditions and within the limitations of the Plan,
the Committee may modify, extend or renew outstanding Options, or accept the
surrender of outstanding Options (to the extent not theretofore exercised)
granted under the Plan or under any other plan of the Corporation, or a company
or similar entity acquired by the Corporation or a Subsidiary, and authorize the
<PAGE>
granting of new Options (to the extent not theretofore exercised), pursuant to
the Plan in substitution therefor and the substituted Options may specify a
lower exercise price than the surrendered Options, a longer term than the
surrendered Options or have any other provisions that are authorized by the
Plan. Subject to the terms and conditions and within the limitations of the
Plan, the Committee may modify the terms of any outstanding Agreement providing
for a Stock-Based Award. Notwithstanding the foregoing, however, no modification
of an Option granted under the Plan, or a Stock-Based Award, shall, without the
consent of the Optionee or Grantee, alter or impair any of the Optionee's or
Grantee's right or obligations.
14. Effectiveness of the Plan
The Plan and any amendments requiring shareholder approval pursuant to
Article 12 are subject to approval by vote of the shareholders of the
Corporation within 12 months after their adoption by the Board. Subject to that
approval, the Plan and any amendments are effective on the date on which they
are adopted by the Board. Options and Stock- Based Awards may be granted or
awarded prior to shareholder approval of the Plan or amendments requiring
shareholder approval, but each such Option grant or Stock-Based Award shall be
subject to the approval of the Plan or amendments by the shareholders. Except to
the extent required to satisfy the requirements of Rule 16b-3 under the Exchange
Act, the date on which any Option granted or Stock-Based Award awarded prior to
shareholder approval of the Plan or amendment requiring shareholder approval
shall be the Date of Grant for all purposes as if the Option or Stock-Based
Award had not been subject to shareholder approval. No Option may be exercised
prior to such shareholder approval, and any Stock-Based Award awarded shall be
forfeited if such shareholder approval is not obtained.
15. Term of the Plan
Unless sooner terminated by the Board pursuant to Article 12, the Plan
shall terminate on May 22, 2010, and no Options or Stock-Based Awards may be
granted after termination. The termination shall not affect the validity of any
Options or Stock-Based Awards outstanding on the date of termination.
<PAGE>
16. Indemnification of Committee
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and reasonably incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option or Stock-Based
Award granted or awarded hereunder, and against all amounts reasonably paid by
them in settlement thereof or paid by them in satisfaction or judgment in any
such action, suit or proceeding, if such members acted in good faith and in a
manner which they believed to be in, and not opposed to, the best interests of
the Corporation.
17. General Provisions
A. The establishment of the Plan shall not confer upon any
Employee or Consultant any legal or equitable right against
the Corporation, any Subsidiary or the Committee, except as
expressly provided in the Plan.
B. The Plan does not constitute inducement or consideration for
the employment of any Employee or the retention of any
Consultant, nor is it a contract between the Corporation or
a Subsidiary and any Employee or Consultant. Participation
in the Plan shall not give an Employee or Consultant any
right to be retained in the service of the Corporation or
Subsidiary.
C. The Corporation and its Subsidiaries may assume options,
warrants, or rights to purchase stock issued or granted by
other corporations whose stock or assets shall be acquired
by the Corporation or a Subsidiary, or which shall be merged
into or consolidated with the Corporation or a Subsidiary.
Neither the adoption of this Plan, nor its submission to the
shareholders, shall be taken to impose any limitations on
the powers of the Corporation or its affiliates to issue,
grant, or assume options, warrants, rights, or bonus stock,
otherwise than under this Plan, or to adopt other stock
option or stock-based award plans or to impose any
requirement of shareholder approval upon the same.
D. The interests of any Participant under the Plan are not
subject to the claims of creditors and may not, in any way,
be assigned, alienated or encumbered except as provided in
Article 8.
E. The Plan and each Agreement shall be governed, construed and
administered in accordance with the laws of the State of
Delaware.
<PAGE>
F. The adoption of the Plan, the grant and exercise of Options
and the award of Stock-Based Awards shall be subject to
receipt of all required regulatory approvals, including
without limitation any required approvals of the Federal
Communications Commission.
G. Should any provision of the Plan that is intended to comply
with the provisions of Rule 16b-3 under the Exchange Act at
the date of the adoption of the Plan by the Board not be
necessary for such compliance, or become no longer necessary
for such compliance, such provision of the Plan shall have
no force or effect under the Plan as of the date that such
provision is not required for purpose of satisfying the
provisions of Rule 16b-3 under the Exchange Act.
<PAGE>
This Proxy is Solicited By The Board of Directors of the Company
AMERICAN MOBILE SATELLITE CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
May 23,2000
The undersigned hereby constitutes and appoints Gary M. Parsons and Walter V.
Purnell, Jr., and each of them, true and lawful agents and proxies ("Proxies"),
with full power of substitution and revocation in each, to attend the Annual
Meeting of Stockholders of American Mobile Satellite Corporation to be held at
9:00 a.m. on Tuesday, May 23, 2000 at the Sheraton Reston Hotel, 11810 Sunrise
Valley Drive, Reston, Virginia, and any adjournments thereof, and thereat to
vote all shares of Common Stock which the undersigned would be entitled to vote
if personally present (i) as designated upon the matters set forth on the
reverse side, and (ii) in their discretion, upon the approval of minutes of
prior meetings of the stockholders and such other business as may properly come
before the meeting.
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If directed by the undersigned to vote for the
nominees, or if no direction is made, the votes represented by this proxy will
be voted FOR the six nominees listed below in such proportions as determined by
the Proxies in their discretion so as to maximize the likelihood of electing all
such nominees; provided, however, that (i) if directed by the undersigned to
withhold votes from one or more nominees, the votes represented by this proxy
will be voted FOR the remaining nominees as set forth above, and (ii) if, prior
to the election, any such nominee shall become unavailable for election or
unable to serve, the Proxies may vote for such other persons as may be
nominated. If no direction is made, this proxy will be voted FOR Proposals 2
through 6 on the reverse side. The undersigned hereby revokes any proxy or
proxies heretofore given to vote such shares at said meeting or any adjournments
thereof.
Election of Directors, Nominees:
Douglas I. Brandon, Billy J. Parrott, Gary M. Parsons, Walter V. Purnell, Jr.,
Andrew A. Quartner, and Jack A. Shaw
(change of address/comments)
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
(If you have written in the above space, please mark the corresponding box on
the reverse side of this card.)
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE.
<PAGE>
(REVERSE SIDE)
1. Election of Directors
|_| For All Nominees |_| Withheld From All Nominees
|_| For, except vote withheld from the following nominee(s):
----------------------------------------------------
2. Amend Company's Restated Certificate of Incorporation to remove
requirement of a minimum Board size:
For |_| Against |_| Abstain |_|
3. Amend Company's Restated Certificate of Incorporation to change
requirement for amending Certificate of Incorporation from two-thirds
of the outstanding common stock to a majority of the outstanding
common stock:
For |_| Against |_| Abstain |_|
4. Amend and Restate Company's 1989 Employee Stock Option Plan as the
"American Mobile Satellite Corporation Stock Award Plan" to increase
authorized shares available to 7,300,000:
For |_| Against |_| Abstain |_|
5. Amend Company's Employee Stock Purchase Plan to increase the number of
authorized shares available to 600,000:
For |_| Against |_| Abstain |_|
6. Ratify the appointment of Arthur Andersen LLP as independent accountants
for American Mobile for the year 2000:
For |_| Against |_| Abstain |_|
|_| Change of address/comments on reverse side.
INSTRUCTIONS:
1. Please sign exactly as name is printed hereon.
2. If shares are held jointly, each holder should sign.
3. If signing as executor or trustee or in similar fiduciary capacity, please
give full title as such.
4. If a corporation, please sign full corporate name by President or other
authorized officer.
5. If a partnership, please sign partners name by authorized person.
SIGNATURE(S) DATE
