<PAGE>
SCHEDULE 14A PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
File No. 0-24992
[X] Filed by the Registrant
[ ] Filed by a party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
TELETOUCH COMMUNICATIONS, INC.
(Name of Registrant As Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies: N/A
2) Aggregate number of securities to which transaction applies: N/A
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined): N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total fee paid: N/A
[ ] 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: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
<PAGE>
TELETOUCH COMMUNICATIONS, INC.
110 N. COLLEGE, SUITE 200
TYLER, TEXAS 75702
October 8, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Teletouch Communications, Inc. on November 11, 1998. The Annual Meeting will
begin at 9:00 a.m. local time at the Four Seasons Hotel, Fairfield Room, 1300
Lamar, in Houston, Texas.
Information regarding each of the matters to be voted upon at the Annual Meeting
is contained in the attached Proxy Statement. We urge you to read the Proxy
Statement carefully. The Proxy Statement is being mailed to all stockholders on
or about October 8, 1998.
Because it is important that your shares be voted at the Annual Meeting, whether
or not you plan to attend in person, we urge you to complete, date, and sign the
enclosed proxy card and return it as promptly as possible in the accompanying
envelope. If you are a stockholder of record and do attend the meeting and wish
to vote your shares in person, even after returning your proxy, you still may do
so.
We look forward to seeing you in Houston on November 11, 1998.
Very truly yours,
Robert M. McMurrey
Chairman of the Board
<PAGE>
TELETOUCH COMMUNICATIONS, INC.
110 N. COLLEGE, SUITE 200
TYLER, TEXAS 75702
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 11, 1998
----------------------------------------
TO THE STOCKHOLDERS OF TELETOUCH COMMUNICATIONS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Teletouch
Communications, Inc., a Delaware corporation (the "Company"), will be held on
November 11, 1998, at the Four Seasons Hotel, Fairfield Room, 1300 Lamar,
Houston, Texas, at 9:00 a.m. local time, and thereafter as it may from time to
time be adjourned, for the purposes stated below:
1. To elect three Class I directors to serve for three years and until their
successors have been duly elected and shall qualify;
2. To ratify the selection of Ernst & Young LLP as the Company's independent
accountants; and
3. To transact such other business as may properly come before the meeting.
All stockholders are cordially invited to attend the Annual Meeting. Only
those stockholders of record at the close of business on October 1, 1998 are
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof. The stock transfer books will not be closed.
Stockholders should note that the Company's By-Laws provide that no
proposals or nominations of directors by stockholders shall be presented for
vote at an Annual Meeting of Stockholders unless notice complying with the
requirements in the By-Laws is provided to the Board of Directors or the
Company's Secretary no later than the close of business on the fifth day
following the day on which notice of the meeting is first given to stockholders.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE DATE AND SIGN THE
ENCLOSED FORM OF PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE TO
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, 2 BROADWAY, NEW YORK, NY 10004.
October 8, 1998 TELETOUCH COMMUNICATIONS, INC.
Susie F. Smith, Secretary
<PAGE>
TELETOUCH COMMUNICATIONS, INC.
PROXY STATEMENT
Dated October 8, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Teletouch Communications, Inc., a Delaware
corporation (the "Company"), for use at the annual meeting of the Company's
stockholders to be held at the Four Seasons Hotel, Fairfield Room, 1300 Lamar,
Houston, Texas, on November 11, 1998, at 9:00 a.m., and at any adjournments
thereof (the "Annual Meeting"). The principal executive offices of the Company
are located at 110 N. College, Suite 200, Tyler, Texas 75702 and its telephone
number is (903) 595-8800.
The Annual Meeting has been called to consider and take action on the
following proposals: (i) to elect three Class I directors to serve for three
years and until their successors have been duly elected and shall qualify; (ii)
to ratify the selection of Ernst & Young LLP as the Company's independent
accountants; and (iii) to transact such other business as may properly come
before the Annual Meeting.
The Company's Board of Directors has taken unanimous affirmative action
with respect to each of the foregoing proposals and recommends that the
stockholders vote in favor of each of the proposals. All of the holders of
record of common stock, $.001 par value (the "Common Stock"), of the Company at
the close of business on October 1, 1998 (the "Record Date") will be entitled to
vote at the Annual Meeting. The stock transfer books will not be closed.
In June 1998 the Company effected a two-for-three reverse split of its
Common Stock. Unless otherwise indicated, all figures in this Proxy Statement
relating to shares, options, share or option prices, etc., have been calculated
or adjusted to give effect to the reverse split.
The Notice of Meeting, this Proxy Statement, the enclosed Proxy and the
Company's Annual Report to Stockholders for the year ended May 31, 1998 are
being mailed to stockholders on or about October 8, 1998. The Company will,
upon written request of any stockholder, furnish without charge a copy of its
Annual Report on Form 10-K for the year ended May 31, 1998, as filed with the
Securities and Exchange Commission, without exhibits. Please address all such
requests to the Company, 1000 Louisiana, Suite 600, Houston, Texas 77002,
Attention: Corporate Secretary. Exhibits will be provided upon written request
and payment of an appropriate processing fee.
VOTING REQUIREMENTS
As of the Record Date, there were outstanding 4,235,611 shares of the
Common Stock. Only holders of shares of Common Stock of record as of the close
of business on the Record Date will be entitled to vote at the Annual Meeting,
such holders being entitled to one vote on all matters presented at the Annual
Meeting for each share held of record. The presence in person or by proxy of
holders of record of at least one-third of the shares of Common Stock
outstanding as of the Record Date is required for a quorum to transact business
at the Annual Meeting. If a quorum should not be present, the Annual Meeting
may be adjourned until a quorum is obtained. The nominees to be elected as
Class I Directors named in Proposal 1 must receive a plurality of the eligible
votes cast at the Annual Meeting with respect to Proposal 1. The approval of
all other matters to be considered at the Annual Meeting requires the
affirmative vote of at least
<PAGE>
a majority of the outstanding shares of Common Stock entitled to vote thereon,
present in person or by proxy. Abstentions and broker non-votes will be counted
only for the purpose of determining the existence of a quorum. Holders of the
15,000 shares of Series A 14% Cumulative Preferred Stock and 87,286 shares of
Series B Preferred Stock which are issued and outstanding are entitled to notice
of all meetings of stockholders at the same time and in the same manner as
notice is given to all stockholders entitled to vote at any such meeting;
however, such shares of Preferred Stock shall not be counted for purposes of
calculating the quorum nor are such shares of Preferred Stock entitled to vote
on any matter proposed herein.
As of the Record Date, all of the present directors and executive officers
of the Company, as a group of eight persons, owned beneficially 76% of the total
voting securities of the Company. To the knowledge of management, as of the
Record Date, the only executive officers, directors or nominees for director who
owned beneficially five percent or more of the Company's outstanding shares are
Messrs. McMurrey, Wedner and Van Pelt. See "Voting Securities and Principal
Holders Thereof."
Proxies given by stockholders of record for use at the Annual Meeting may
be revoked at any time prior to the exercise of the powers conferred. In
addition to revocation in any other manner permitted by law, stockholders of
record giving a proxy may revoke the proxy by an instrument in writing, executed
by the stockholder or his attorney authorized in writing or, if the stockholder
is a corporation, under its corporate seal, by an officer or attorney thereof
duly authorized, and deposited either at the corporate headquarters of the
Company at any time up to and including the last business day preceding the day
of the Annual Meeting, or any adjournment thereof, at which the proxy is to be
used, or with the chairman of such Annual Meeting on the day of the Annual
Meeting or adjournment thereof, and upon either of such deposits the proxy is
revoked.
ALL PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES SPECIFIED
ON SUCH PROXIES. PROXIES WILL BE VOTED IN FAVOR OF A PROPOSAL IF NO CONTRARY
SPECIFICATION IS MADE. ALL VALID PROXIES OBTAINED WILL BE VOTED AT THE
DISCRETION OF THE BOARD OF DIRECTORS WITH RESPECT TO ANY OTHER BUSINESS THAT MAY
COME BEFORE THE ANNUAL MEETING.
The cost of soliciting proxies in the accompanying form will be borne by
the Company. The Company may reimburse brokerage firms and others for their
expenses in forwarding proxy materials to the beneficial owners and soliciting
them to execute the proxies.
The Company's Annual Report for the fiscal year ended May 31, 1998,
including audited financial statements, will accompany the mailing to
stockholders of this Proxy Statement.
DISSENTERS' RIGHTS OF APPRAISAL
The Board of Directors does not propose any action for which the laws of
the State of Delaware, the Certificate of Incorporation or the By-Laws of the
Company provide a right of a stockholder to dissent and obtain appraisal of or
payment for such stockholder's shares.
INTEREST OF OFFICERS AND DIRECTORS
IN MATTERS TO BE ACTED UPON
Certain officers or directors of the Company have a substantial interest in
one of the matters to be acted upon at the Annual Meeting: Class I directors
have been nominated for re-election to the office of director for a term of
three years.
2
<PAGE>
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
Only holders of record of the outstanding 4,235,611 shares of Common Stock
as of the close of business on the Record Date will be entitled to vote at the
Annual Meeting. Each share of Common Stock is entitled to one vote. The
following table sets forth certain information as of the Record Date with
respect to: (1) each executive officer, director and the director nominees; (2)
all executive officers and directors of the Company as a group; and (3) all
persons known by the Company to be the beneficial owners of five percent or more
of the Company's Common Stock.
<TABLE>
<CAPTION>
Percentage of Outstanding
Name and Address Number of Shares Shares of Common Stock
of Beneficial Owner (1) Beneficially Owned Beneficially Owned
- ----------------------------------------- --------------------- -----------------------------
<S> <C> <C>
Robert M. McMurrey (2)(3)(4) 1,276,666 29.6%
110 N. College, Suite 200
Tyler, TX 75702
J. Richard Carlson (2)(5) 91,719 2.1%
110 N. College, Suite 200
Tyler, TX 75702
Clifford E. McFarland (3)(6) 12,666 *
McFarland, Grossman & Company
9821 Katy Freeway, Suite 500
Houston, TX 77024
Charles C. Green III (3)(7) 6,666 *
Castle Tower Holding Corporation
510 Bering, Suite 310
Houston, TX 77057
Continental Illinois Venture Corporation (8) 5,846,055 62.4%
231 South La Salle Street
Chicago, IL 60697
Marcus D. Wedner (3)(9) 5,852,721 62.4%
Continental Illinois Venture Corporation
231 South La Salle Street
Chicago, IL 60697
Thomas E. Van Pelt, Jr. (3)(9) 5,846,055 62.4%
Continental Illinois Venture Corporation
231 South La Salle Street
Chicago, IL 60697
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Percentage of Outstanding
Name and Address Number of Shares Shares of Common Stock
of Beneficial Owner (1) Beneficially Owned Beneficially Owned
- ----------------------------------------- --------------------- -----------------------------
<S> <C> <C>
Thomas E. Gage (3)(10) 50,000 1.2%
Marconi Pacific, LLC
7910 Woodmont Avenue, Suite 540
Bethesda, MD 20814
Thomas R. McLemore (2)(11) 5,279 *
110 N. College, Suite 200
Tyler, TX 75702
CIVC Partners I (12) 511,763 11.3%
c/o Continental Illinois Venture Corporation
231 South La Salle Street
Chicago, IL 60697
GM Holdings, L.L.C. (13) 701,526 15.5%
201 Fourth Avenue North, 11th Floor
Nashville, TN 37219
G. David Higginbotham (14) 313,333 7.3%
3122 Oleander St.
Tyler, TX 75707
All Executive Officers & Directors as a 7,295,717 76.0%
Group (8 Persons) (15)
</TABLE>
- ---------------
* Denotes less than one percent.
(1) Unless otherwise noted, the Company believes that all of such shares are
owned of record by each individual named as beneficial owner and that such
individual has sole voting and dispositive power with respect to the shares
of Common Stock owned by each of them. Such person's percentage ownership
is determined by assuming that the options or convertible securities that
are held by such person, and which are exercisable within 60 days from the
date hereof, have been exercised or converted, as the case may be.
(2) Executive Officer.
(3) Director.
(4) Mr. McMurrey is the sole owner of the outstanding stock of Rainbow
Resources, which is the direct owner of 1,200,000 of such shares. Includes
76,666 shares underlying the currently exercisable portion of options
issued to Mr. McMurrey. By virtue of Mr. McMurrey's ownership of Rainbow
Resources, he may be deemed to be a "parent" of the Company pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(5) Includes 88,219 shares underlying the currently exercisable portion of a
stock option granted to Mr. Carlson.
(6) Includes 6,666 shares underlying a stock option granted to Mr. McFarland.
(7) Represents shares underlying a stock option granted to Mr. Green.
(8) Includes 2,660,840 shares of Common Stock underlying a warrant issued to
Continental Illinois Venture Corporation ("CIVC") and 1,945,038 shares of
Common Stock underlying warrants to purchase 324,173 shares of non-voting
Series B Preferred Stock (each share of Series B Preferred Stock is
convertible into six shares of Common Stock). Also includes 716,461 shares
of Common Stock issued, and 523,716 shares of Common Stock issuable, to
parties related to and not related to CIVC for which CIVC holds the voting
rights. CIVC may be deemed to be the beneficial owner of such additional
shares pursuant to the rules of attribution
4
<PAGE>
of beneficial ownership set forth in Rule 13d-3 under the Exchange Act.
CIVC disclaims beneficial ownership of such 716,461 and 523,716 shares of
Common Stock. Does not include liquidation value of $11,818,000 (or 11,818
shares) of non-voting Series A Preferred Stock issued to CIVC. CIVC may be
deemed to be a "parent" of the Company pursuant to the Exchange Act. See
"Certain Transactions."
(9) Includes for Mr. Wedner 6,666 shares of Common Stock underlying stock
options. The remaining holdings represent shares of Common Stock issued or
underlying currently exercisable warrants or convertible preferred shares
issued to CIVC, of which Messrs. Wedner and Van Pelt are Managing
Directors, and to certain related parties of CIVC (including CIVC Partners
I, of which Messrs. Wedner and Van Pelt are general partners) and others.
Because they hold voting control over (i) the Company's securities owned by
CIVC and (ii) the Company's securities covered by proxies granted by others
to CIVC, each of Messrs. Wedner and Van Pelt may be deemed to be the
beneficial owner of such shares pursuant to the rules of attribution of
beneficial ownership set forth in Rule 13d-3 under the Exchange Act. See
"Certain Transactions."
(10) Represents shares underlying warrants granted to Marconi Pacific, LLC, of
which Mr. Gage is Chairman.
(11) Represents shares underlying the currently exercisable portion of an option
issued to Mr. McLemore.
(12) Includes 216,114 shares of Common Stock which may be acquired upon
conversion of 36,019 shares of non-voting Series B Preferred Stock. All of
such shares are also included in the figure reported for CIVC in this
table, because CIVC holds the voting power, but not the dispositive power,
for such shares. See Footnote 8. Does not include liquidation value of
$1,313,000 (or 1,313 shares) of Series A Preferred Stock issued to CIVC
Partners I. Each of Messrs. Wedner and Perry is a general partner of CIVC
Partners I and each has voting and dispositive control over the securities
of the Company held by CIVC Partners I.
(13) Includes 296,250 shares of Common Stock which may be acquired upon
conversion of 49,375 shares of non-voting Series B Preferred Stock. All of
such shares are also included in the figure reported for CIVC in this table
because CIVC holds the voting power, but not the dispositive power, for
such shares. See Footnote 8. Does not include liquidation value of
$1,800,000 (or 1,800 shares) of Series A Preferred Stock issued to GM
Holdings, L.L.C.
(14) Includes 43,333 shares underlying the currently exercisable portion of
options granted to Mr. Higginbotham.
(15) Includes 1,925,961 shares of Common Stock issued and outstanding and
5,369,756 shares of Common Stock underlying exercisable warrants, options
and convertible preferred shares.
DIRECTORS AND EXECUTIVE OFFICERS
The names of all directors and executive officers of the Company as of the
date hereof are as follows:
<TABLE>
<CAPTION>
NAME YEARS WITH THE COMPANY POSITION WITH THE COMPANY
- --------------------------------- -------------------------------- -------------------------------------------------------
<S> <C> <C>
Robert M. McMurrey 14 Chairman of the Board of Directors and Chief
Executive Officer
J. Richard Carlson 1 President, Chief Operating Officer
Clifford E. McFarland 3 Director
Charles C. Green III 3 Director
Marcus D. Wedner 3 Director
Thomas E. Van Pelt, Jr. 1 Director
Thomas E. Gage 1 Director
Thomas R. McLemore 1 Executive Vice President, Chief Financial Officer
and Assistant Secretary
</TABLE>
Biographical information with respect to the present executive officers and
Directors of the Company, including the nominees for Director, is set forth
below.
Robert M. McMurrey has been Chief Executive Officer and a director of the
Company since 1984. He is also the President and Chief Executive Officer and
director of Rainbow Resources, of which he is the sole stockholder. Through
Rainbow Resources, Mr. McMurrey acquired a controlling interest in the Company
in 1984. Also in 1984, Mr. McMurrey formed a corporation known as Jecca Towers
to own and
5
<PAGE>
operate telecommunications towers and SMR operations. Mr. McMurrey was active in
the oil and gas industry for over 30 years. Mr. McMurrey received a B.S. Degree
in Petroleum Engineering from the University of Texas in 1971. Mr. McMurrey is
52 years old and has been nominated for re-election as a Class I director.
J. Richard Carlson was appointed President and Chief Operating Officer of
the Company in August 1997. From January to August 1997 he owned and operated
Diamond Wireless Group, Inc., a consulting firm in Alexandria, Virginia. He was
Vice President of Marketing for IDB Mobile Communications, a provider of mobile
satellite services, from August 1995 to December 1996, and Vice President of
Marketing and Operations for Coastel Communications, an offshore cellular
telephone service provider, from January 1992 to July 1995. Mr. Carlson is 36
years old.
Clifford E. McFarland has been a director of the Company since May 1995 and
in 1991 co-founded and has been the President and a Managing Director of
McFarland, Grossman & Company ("MGC"), an investment bank in Houston, Texas.
MGC has from time to time rendered investment banking services to the Company.
See "Compensation of Directors and Executive Officers--Consulting and Other
Arrangements." From 1988 to 1994, Mr. McFarland was Secretary and a director of
Amerinet Corporation ("Amerinet"), a non-reporting, public company marketing
affinity credit cards. Amerinet ceased operations on March 15, 1990 and was
inactive thereafter. Amerinet made filings in bankruptcy court in early 1995 in
order to reorganize for a merger with a private company. Mr. McFarland is 42
years old and has been nominated for re-election as a Class I director.
Charles C. Green III has been a director of the Company since May 1995. In
September 1997 he became Executive Vice President and Chief Financial Officer of
Castle Tower Holding Corporation, a telecommunications holding company. During
1997 he was Executive Vice President, Chief Financial Officer and a director of
Bellweather Exploration Company, an independent oil and gas company in Houston.
He was Vice Chairman and Chief Investment Officer of Torch Energy Advisors
Incorporated ("Torch"), a Houston-based manager of oil and gas investments for
domestic and foreign institutional investors, from 1995 to 1996. He was
President of Torch from 1994 to 1995 and Executive Vice President from 1992 to
1994. Mr. Green is 52 years old and has been designated as a Class III
director.
Marcus D. Wedner has been a director of the Company since August 1995 and
has been a Managing Director of CIVC, a venture capital investor, since 1992,
prior to which he was a Vice President of CIVC from 1990. Mr. Wedner is also a
director of TransWestern Communications Company, Inc., the holding company of an
independent publisher of yellow pages directories. Mr. Wedner is 35 years old
and has been designated as a Class II director.
Thomas E. Van Pelt, Jr. has been a director of the Company since March
1998. Since late 1994 he has been a Managing Director of CIVC, and from 1990
through 1994 he was Vice President of Continental Bank. Mr. Van Pelt is 34 years
old and has been designated as a Class III director.
Thomas E. Gage has been a director of the Company since March 1998. Since
1996 he has been Chairman and owner of Marconi Pacific LLC of Bethesda,
Maryland, a consulting firm. Marconi Pacific LLC provides consulting services
to the Company. From 1991 to 1996 Mr. Gage was associated with Gemini
Consulting in Morristown, New Jersey. See "Compensation of Directors and
Executive Officers--Consulting and Other Arrangements." Mr. Gage is 47 years
old and has been nominated for re-election as a Class I director.
Thomas R. McLemore joined the Company as Controller and interim Chief
Financial Officer in January 1997, was appointed Vice President of Finance in
March 1997, and Executive Vice President and Chief Financial Officer in June
1997. Before joining the Company, he operated his own independent
6
<PAGE>
consulting company, Management Consulting Services, from 1993 to 1997. Mr.
McLemore was a founder and Chief Financial Officer of Mid-Valley Waste Systems,
Inc., a solid waste removal company in Sacramento, California, from 1990 to
1993. Mr. McLemore is a certified public accountant and is 47 years old.
All officers of the Company are elected to serve in such capacities until
the next annual meeting of the Board of Directors of the Company and until their
successors are duly elected and qualified.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership of equity securities of the Company with the Securities and Exchange
Commission (the "Commission") and the American Stock Exchange. Officers,
directors and greater than ten percent stockholders are required by Commission
regulation to furnish the Company with copies of all Section 16(a) forms that
they file.
Based solely upon a review of Forms 3, Forms 4 and Forms 5 furnished to the
Company pursuant to the Exchange Act during its most recent fiscal year, the
Company believes that all such forms required to be filed pursuant to Section
16(a) of the Exchange Act were timely filed, as necessary, by the officers,
directors and securityholders required to file the same during the fiscal year
ended May 31, 1998, except as follows: Mr. Carlson and Mr. Gage each failed to
timely file a Form 3, and Mr. Carlson failed to timely file three Forms 4. Such
filings have been made subsequent to the fiscal year end.
THE BOARD OF DIRECTORS
The Company's Certificate of Incorporation provides that the number of
directors of the Company shall be set forth in the By-Laws, which number may be
increased or decreased pursuant to the By-Laws. In accordance with the By-Laws,
the number of directors may not be fewer than three and no more than twelve.
Pursuant to the Company's By-Laws, the Board of Directors has established that
the Board of Directors shall consist of six members.
The current directors are designated in each class as follows: Class I -
Robert M. McMurrey, Clifford E. McFarland and Thomas E. Gage; Class II - Marcus
D. Wedner; and Class III - Charles C. Green III and Thomas E. Van Pelt, Jr.
Class I directors are expected to stand for re-election at the upcoming Annual
Meeting of Stockholders; Class II directors are expected to stand for re-
election at the Annual Meeting of Stockholders one year subsequent to the Annual
Meeting; and Class III directors are expected to stand for re-election at the
Annual Meeting of Stockholders two years subsequent to the Annual Meeting. Each
member of the Board of Directors then elected will serve for a term of three
years or until a successor has been elected and qualified. The Class I
directors, Robert M. McMurrey, Clifford E. McFarland and Thomas E. Gage, will
stand for re-election at the Annual Meeting to serve for three years and until
their successors are duly elected and qualified. Messrs. Wedner and Van Pelt
serve on the Board of Directors as the designees of CIVC.
The Board of Directors met five times during the fiscal year ended May 31,
1998. Mr. Green was the only incumbent director who attended fewer than 75% of
the aggregate of all of the meetings of the Board and the Committees on which he
served.
There are no material proceedings to which any director, officer or
affiliate of the Company, any owner of record or beneficially of more than five
percent of any class of voting securities of the Company,
7
<PAGE>
or securityholder is a party adverse to the Company or any of its subsidiaries
or has a material interest adverse to the Company or any of its subsidiaries.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established three standing committees, namely,
an Audit Committee, a Compensation Committee and an Executive Committee. The
Board of Directors does not have a standing nominating committee or any
committee serving a similar function.
Audit Committee. The duties and responsibilities of the Audit Committee
are to recommend the selection of the independent public accountants for the
Company to the Board of Directors, to review the scope and cost of the audit, to
review the performance and procedures of the auditors, to review the final
report of the independent auditors, to be available for consultation to the
independent auditors, to review with the Company's Chief Financial Officer and
independent auditors corporate accounting practices and policies and financial
controls, and to perform all other such duties as the Board of Directors may
from time to time designate. The members of the Audit Committee are Thomas E.
Van Pelt, Jr., Clifford E. McFarland and Thomas E. Gage. During the fiscal year
ended May 31, 1998, the Audit Committee held one meeting; all members were
present.
Compensation Committee. The duties and responsibilities of the
Compensation Committee are to review periodically the compensation of executive
officers and other key employees, to make recommendations as to bonuses and
salaries, and to perform all other such duties as the Board of Directors may
from time to time designate. The members of the Compensation Committee are
Charles C. Green III and Marcus D. Wedner. During the fiscal year ended May 31,
1998, the Compensation Committee held one meeting; all members were present.
Executive Committee. The duties and responsibilities of the Executive
Committee are to exercise the powers and authority of the Board of Directors in
the management of the business and affairs of the Company, to the extent not
assigned to other committees of the Board of Directors and to the extent
permitted by Delaware law and the By-Laws of the Company. The members of the
Executive Committee are Robert M. McMurrey and Marcus D. Wedner. During the
fiscal year ended May 31, 1998, the Executive Committee held no meetings.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the aggregate cash compensation paid to the
Company's Chief Executive Officer and each other officer receiving compensation
in excess of $100,000 for services rendered to the Company during the fiscal
years ended May 31, 1998, 1997 and 1996. The figures set forth in the following
tables relating to stock and stock options are adjusted to give effect to the
Company's reverse stock split, which occurred after the end of the 1998 fiscal
year.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------------------------------------------------------------
Restricted Securities
Name and Other Annual Stock Underlying
Principal Position Year Salary ($) Bonus ($) (1) Compensation ($) Awards ($)(2) Option/SARs (#)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert M. McMurrey 1998 175,000 50,000 --- --- ---
Chairman and CEO 1997 175,000 12,000 --- --- ---
1996 157,346 35,000 --- --- 16,666
- ------------------------------------------------------------------------------------------------------------------------
J. Richard Carlson (3) 1998 145,833 80,000 --- --- 333,333
President and COO 1997 --- --- --- --- ---
1996 --- --- --- --- ---
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------------------------------------------------------------
Restricted Securities
Name and Other Annual Stock Underlying
Principal Position Year Salary ($) Bonus ($) (1) Compensation ($) Awards ($)(2) Option/SARs (#)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
G. David Higginbotham 1998 165,000 --- --- --- ---
(4) 1997 165,000 8,000 --- --- ---
1996 147,346 33,000 --- --- 16,666
- -----------------------------------------------------------------------------------------------------------------------
Thomas R. McLemore 1998 91,250 9,000 --- --- ---
Executive Vice 1997 33,750 --- --- --- 16,666
President and CFO (5) 1996 --- --- --- --- ---
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
_______________
(1) Bonuses shown were paid in the fiscal year following the year in which
services were provided.
(2) The number and value of the aggregate restricted stock beneficial holdings
for the named executives at the end of the last fiscal year, based on the
closing bid price of the Common Stock on May 29, 1998, were as follows
(without giving effect to the consideration paid for the securities held):
Mr. McMurrey: 1,200,000 shares, with a value of $5,625,000; Mr. Carlson:
2,800 shares, with a value of $13,125; Mr. Higginbotham: 300,000 shares,
with a value of $1,406,250; Mr. McLemore: none.
(3) Mr. Carlson became an employee of the Company during fiscal year 1998;
consequently the fiscal 1998 salary figure is for an abbreviated period.
His annual salary rate is $175,000.
(4) Mr. Higginbotham served as President through August 3, 1997, at which time
he became Senior Vice President of Network Operations and MIS. As of May
31, 1998, he ceased to be an officer of the Company.
(5) Mr. McLemore became an employee of the Company during fiscal year 1997;
consequently the fiscal 1997 salary figure is for an abbreviated period.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information with respect to options
granted during the fiscal year ended May 31, 1998 to Messrs. McMurrey, Carlson,
Higginbotham and McLemore, and as set forth above in the Summary Compensation
Table.
<TABLE>
<CAPTION>
Number of Securities Percent of Total
Underlying Options/SARs Granted to Exercise or Base Expiration
Name Options/SARs Granted (#) Employees in Fiscal Year Price ($/Sh) Date
- ------------------- ------------------------ ------------------------ ---------------- ----------
<S> <C> <C> <C> <C>
Robert M. McMurrey 0 n/a n/a n/a
J. Richard Carlson 333,333 89.3% $2.715 8/4/07
G. David Higginbotham 0 n/a n/a n/a
Thomas R. McLemore 0 n/a n/a n/a
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth certain information with respect to: (i)
options exercised during the fiscal year ended May 31, 1998 by Messrs. McMurrey,
Carlson, Higginbotham and McLemore, as set forth above in the Summary
Compensation Table, and (ii) unexercised options held by such persons at the end
of the fiscal year ended May 31, 1998.
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised in the Money
Unexercised Options/SARs Options/SARs at the Fiscal Year
Shares at Fiscal Year End (#) Ended May 31, 1998 ($)
Acquired On Value ---------------------------------------------------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisabable Unexercisable
- -------------------------- ------------- ------------ ----------------- ------------- -------------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert M. McMurrey 0 0 73,332 10,000 0 0
J. Richard Carlson 0 0 0 333,333 0 136,667
G. David Higginbotham 0 0 40,000 10,000 0 0
Thomas R. McLemore 0 0 3,607 13,059 2,478 8,972
</TABLE>
9
<PAGE>
EMPLOYMENT AGREEMENTS
In August 1995, the Company entered into an employment agreement with Mr.
McMurrey, Chairman of the Board and Chief Executive Officer. Pursuant to the
agreement, Mr. McMurrey is employed at a base salary of $175,000 per annum for
the three years ending August 1998, and is entitled to bonuses based on a
performance formula. Mr. McMurray's employment agreement has been extended for
an additional one year period, according to its terms. In July 1997, the Company
entered into an employment agreement with J. Richard Carlson, President and
Chief Operating Officer. Pursuant to the agreement, Mr. Carlson is employed at a
base salary of $175,000 per annum for the first two years ending August 4, 1999,
and is entitled to bonuses based on a performance formula.
The employment agreements permit the Company to terminate the employment of
the employee for "cause" or for any other reason, provided that in the latter
case the Company is obligated to continue the employee's base salary (at twice
the then current rate) for 12 months. The agreements require that Messrs.
McMurrey and Carlson devote substantially all of their business time to the
Company. Pursuant to the agreements, the Company issued to Mr. McMurrey
options to purchase 16,666 shares of Common Stock, which are exercisable at a
price of $6.00 per share and which vest ratably over five years (provided that
the vesting of such options shall accelerate upon any sale of the Company).
Similarly, the Company issued to Mr. Carlson options to purchase 333,333 shares
of Common Stock, exercisable at $2.715 per share and which vest ratably over
five years. The agreements also contain confidentiality and non-competition
provisions. In addition, the agreements provide for death benefits and
disability benefits and provide for the payment by the Company of any expenses
of the employee incurred in any successful proceeding to enforce provisions of
his employment agreement.
CONSULTING AND OTHER ARRANGEMENTS
In August 1995, the Company entered into an employment agreement with G.
David Higginbotham, then President and Chief Operating Officer of the Company.
In July 1997 the Company and Mr. Higginbotham amended Mr. Higginbotham's
agreement such that Mr. Higginbotham became the Senior Vice President of Network
Operations and MIS of the Company. Subsequently, as of June 1, 1998, the
Company and Mr. Higginbotham mutually terminated Mr. Higginbotham's employment
arrangement and entered into a Consulting Agreement, providing that Mr.
Higginbotham will provide at least thirty hours per week of executive management
consulting services to the Company for an initial period through May 31, 1999
("Initial Term"), for compensation during the Initial Term of $150,000 per
annum. The Consulting Agreement also provides for a twelve month subsequent
consulting period, with compensation to be made on an hourly basis at a rate to
be negotiated by the Company and Mr. Higginbotham prior to the expiration of the
Initial Term. Mr. Higginbotham retains his privileges to health benefits as
previously provided by the Company under his employment agreement.
In April 1997, the Company entered into a Consulting Agreement with Marconi
Pacific, LLC ("Marconi Pacific"), pursuant to which Marconi Pacific provided
consulting services to the Company. Marconi Pacific was paid an aggregate of
$303,000 under the Consulting Agreement through the fiscal year ended May 31,
1998. The Company's consulting arrangement with Marconi Pacific continues
informally on an as-needed basis. Thomas E. Gage, a director of the Company, is
the Chairman of Marconi Pacific.
On August 5, 1994, the Company entered into a financial advisory agreement
with McFarland, Grossman & Company ("MGC"). Clifford E. McFarland is President
and a Managing Director of MGC, and became a director of the Company in May
1995. Pursuant to the terms of the agreement with MGC, MGC acted as a financial
advisor to assist the Company with certain acquisitions and assisted in
arranging a secured credit facility. For such services through February 1995,
MGC was issued 13,333 shares of
10
<PAGE>
Common Stock and was paid an aggregate of $720,000 ($500,000 in cash and
$220,000 by promissory note, which note has been paid in full). MGC received
additional indirect compensation from the Company through MGC's arrangement with
Newman and Associates, Inc. ("Newman"), the private placement agent in the
August 1995 private placement to the CIVC Investors. MGC provided full and part
time senior level investment banking professionals to Newman during the period
from February 1995 through August 3, 1995. MGC's gross fees received from Newman
for such services were $500,000. As of the date hereof, the Company has no
standing agreement for services from MGC.
STOCK OPTION PLAN
Under the Teletouch Communications, Inc. 1994 Stock Option and Appreciation
Rights Plan (the "Stock Option Plan"), directors of the Company who are not also
employees may participate in the Stock Option Plan only to the extent of grants
of Non-Qualified Options on a non-discretionary basis pursuant to a formula set
forth in the Stock Option Plan to the effect that on the date of election to the
Board, each non-employee director shall receive a Non-Qualified Option to
purchase 6,666 shares of Common Stock at an exercise price equal to the fair
market value per share of the Common Stock on that date. Each such option shall
vest and become exercisable one year from the date of grant thereof. Messrs.
Green, McFarland, Wedner, Van Pelt and Gage were each granted such an option
upon their joining the Board of Directors. In addition, the Board of Directors
has adopted a policy providing that each non-employee, non-affiliate director
shall receive a non-discretionary Non-Qualified Option pursuant to the Stock
Option Plan to purchase 666 shares of Common Stock effective as of June 1,
1998 and subsequently on the first business day of January each year beginning
in January 1999. Such option will be exercisable at a price equal to the
closing market price on the date of grant, and will vest in full one year from
the date of grant. Messrs. Green, McFarland and Gage were each granted such an
option to purchase 666 shares effective June 1, 1998.
REMUNERATION OF DIRECTORS
As stated in the previous paragraph, all non-employee directors are
entitled to receive a one-time grant of options to purchase 6,666 shares of
Common Stock upon election as a director; and all non-employee non-affiliate
directors are entitled to receive a grant of options to purchase 666 shares of
Common Stock on the first business day of each calendar year. All directors are
entitled to reimbursement of reasonable travel and lodging expenses related to
attending meetings of the Board of Directors.
In July 1998 the Company instituted a policy directing that every non-
employee, non-affiliate director of the Company would be paid $500 for
attendance at meetings of the Board of Directors ($100 for telephonic
attendance). Such amount is in addition to reimbursement to such directors for
out-of-pocket expenses related to meeting attendance.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Charles C. Green III and
Marcus D. Wedner. Neither is an officer or employee of the Company; Mr. Wedner
is a Managing Director of CIVC. See "Certain Transactions" and "Voting
Securities and Principal Holders Thereof."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Committee administers the compensation program for operating officers
of the Company and bases its decisions on both individual performance and the
financial results achieved by the Company. While the Committee consults with the
Chairman of the Board and the Chief Operating Officer on certain matters, all
compensation decisions are made by the Committee without such officers'
participation.
The principal elements of the compensation program for executive officers
are base salary, performance-based annual bonuses and stock options. The goals
of the program are to give the executive officers incentives to work toward the
improved financial performance of the Company and to reward them for their
contributions to the Company's success. For a summary of fiscal 1998
compensation, see the Summary Compensation Table under the heading "Compensation
of Directors and Executive Officers" above.
Base Salaries. The Committee has based its decisions on salaries for the
Company's executive officers, including its Chairman, Chief Operating Officer
and Chief Financial Officer, on a number of factors, both objective and
subjective. Objective factors considered include increases in the cost of
living, the Company's overall historical performance, and comparable industry
data, although no specific formulas based on such factors have been used to
determine salaries. Salary decisions are based primarily on the Committee's
subjective analysis of the factors contributing to the Company's long-term
success and of the executives' individual contributions to such success.
Bonuses. The Company rewards its executive officers with annual bonuses
based upon the performance of the Company and each executive. Bonuses are
generally paid if the Company meets or surpasses certain annual cash flow
objectives, including consideration of EBITDA (earnings before interest, taxes,
depreciation and amortization). The financial objectives for the Company and
the performance standards for executives are generally established by the
Committee. For fiscal 1998, the Company paid bonuses to (i) Mr. McMurrey,
$50,000; (ii) Mr. Carlson, $80,000; and (iii) Mr. McLemore, $9,000.
Stock Options. The Committee views stock options as its primary long term
compensation vehicle for the Company's executive officers. Stock options
generally are granted at the prevailing market price on the date of grant and
will have value only if the Company's stock price increases. Options granted
under the Company's 1994 Stock Option Plan generally vest in annual increments
over five years beginning one year after the date of the grant. Grants of stock
options generally are based upon the performance of the Company, the level of
the executive's position within the Company and an evaluation of the executive's
past and expected future performance. The Committee grants stock options
periodically, but not necessarily on an annual basis. During fiscal 1998, Mr.
Carlson was the only named executive officer granted options, comprising 333,333
options granted as part of the compensation package included in his employment
agreement.
Chief Executive Officer. The salary established in fiscal 1998 for Mr.
McMurrey, the Chairman and Chief Executive Officer of the Company, was based on
the factors and analysis described. Specific factors considered by the
Committee include the Chairman's current responsibilities with the Company and
the Company's executive bonus structure described above.
By the members of the Compensation Committee:
Marcus D. Wedner
Charles C. Green III
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total shareholder
return since the Common Stock became publicly traded on December 21, 1994 with
that of the American Stock Exchange and a peer group index. The graph assumes
an initial investment of $100.00 and the reinvestment of dividends (where
applicable). The issuers comprising the peer group are Arch Communications
Group, Inc., Metrocall, Inc., PageMart Wireless, Inc., Paging Network, Inc.,
Paging Partners Corporation, Preferred Networks, Inc. and Skytel Communications,
Inc. Since the time period reflected in the performance graph began and ended
prior to the Company's June 1998 reverse stock split, no adjustments for the
stock split were necessary in calculating the performance information for the
Company. The Company has never paid a dividend on its Common Stock.
Comparison of Cumulative Total Return* Among Teletouch Communications, Inc.,
the AMEX Market Value Index and a Peer Group
<TABLE>
<CAPTION>
12/21/94 5/31/95 5/31/96 5/31/97 5/31/98
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Teletouch Communications, Inc. $ 100 $ 81 $ 131 $ 38 $ 78
Peer Group $ 100 $ 99 $ 116 $ 50 $ 83
AMEX Market Value $ 100 $ 113 $ 141 $ 143 $ 171
</TABLE>
* $100 invested on 12/21/94 in Common Stock or on 11/30/94 in Index, including
reinvestment of dividends (where applicable). Fiscal year ending May 31.
CERTAIN TRANSACTIONS
On August 3, 1995 the Company completed a private placement of debt and
equity securities with CIVC, an affiliate of Bank of America, under which CIVC,
certain related parties and other parties (together, the "CIVC Investors")
provided the Company with $25 million in financing in connection with
acquisitions which occurred in 1995. In connection with such financing, the
Company designated 15,000 shares of its authorized preferred stock as "Series A
14% Cumulative Preferred Stock" and 411,459 shares as "Series B Preferred
Stock." The CIVC Investors purchased $15 million in initial liquidation value
(or 15,000 shares) of Series A Preferred Stock and $10 million of 14% Junior
Subordinated Notes due in 2003 (the "Subordinated Notes"). Dividends on the
Series A Preferred Stock and interest on the Subordinated Notes will each accrue
at the rate of 14% per annum. The following table sets
11
<PAGE>
forth the respective portions of the total $25,000,000 investment made by the
CIVC Investors, and the securities issued to each:
<TABLE>
<CAPTION>
Liquidation Principal
Value of Amount of Warrants to
Series A Subordinated Warrants to Purchase Series
Total Preferred Promissory Purchase Common B Preferred
Investor Investment Stock Note Stock Stock
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CIVC $19,696,600 $11,818,000 $ 7,878,600 2,660,840 324,173
CIVC Partners I 2,188,400 1,313,000 875,400 295,649 36,019
GM Holdings LLC 3,000,000 1,800,000 1,200,000 405,276 49,375
Other Investors 115,000 69,000 46,000 15,536 1,892
--------------------------------------------------------------------------------
Total $25,000,000 $15,000,000 $10,000,000 3,377,300 411,459
</TABLE>
Each share of Series A Preferred Stock has a liquidation value of $1,000.
Each share of Series B Preferred Stock became convertible into six shares of
Common Stock on August 3, 1997. Each of the CIVC Investors besides CIVC has
granted to CIVC an irrevocable proxy to vote such shares of Common Stock
underlying the Common Stock warrants each CIVC Investor acquired. Pursuant to
such arrangement, CIVC may be deemed to be the beneficial owner of all the
shares of Common Stock underlying the 3,377,300 warrants issued in the CIVC
transaction. The CIVC Investors have the right, after August 3, 1997, to
require that their securities be registered for public sale. CIVC has the right
to designate up to four of seven members of the Company's Board of Directors.
In respect of this right, on August 3, 1995, the Board was enlarged, and Marcus
D. Wedner and Christopher Perry, Managing Directors of CIVC, were designated by
CIVC to fill the two newly-created Board seats. They were elected to the Board
immediately after the completion of the transactions. In 1998 Mr. Perry resigned
from the Company's Board of Directors and Mr. Van Pelt was elected, and serves
as CIVC's designee. The Company had no relationship with CIVC prior to entering
into such transactions and entered into such transactions following arms-length
negotiations.
CIVC may be deemed to be a "parent" of the Company under the Exchange Act
by virtue of the exercisable and convertible securities of the Company either
registered in CIVC's name or for which CIVC holds irrevocable proxies. Further,
Robert McMurrey, the Company's Chairman and CEO, may also be deemed to be a
"parent" of the Company. Mr. McMurrey is the sole owner of Rainbow Resources,
which is the registered owner of approximately 27% of the Company's outstanding
Common Stock. For additional information relating to the percentage of voting
control and other basis of control by CIVC and Mr. McMurrey/Rainbow Resources,
see "Voting Securities and Principal Holders Thereof," the table therein and the
footnotes thereto.
For a discussion of employment and other agreements with certain of the
Company's executive officers and directors, see "Compensation of Directors and
Executive Officers--Employment Agreements" and "Compensation of Directors and
Executive Officers--Consulting and Other Arrangements."
PROPOSAL 1
TO ELECT THREE CLASS I DIRECTORS TO SERVE FOR THREE YEARS AND
UNTIL THEIR SUCCESSORS HAVE BEEN DULY ELECTED AND SHALL QUALIFY
The Board of Directors has concluded that the re-election of the Class I
directors is in the best interests of the Company and recommends stockholder
approval of the re-election of Robert M. McMurrey, Clifford E. McFarland and
Thomas E. Gage for three-year terms and until their successors have been duly
elected and shall qualify. The remaining three directors will continue to serve
in their positions for the remainder of their terms. Biographical information
concerning Messrs. McMurrey, McFarland and Gage and the Company's other
directors can be found under "Directors and Executive Officers."
12
<PAGE>
Unless otherwise instructed or unless authority to vote is withheld, the
enclosed proxy will be voted for the election of Messrs. McMurrey, McFarland and
Gage, the nominees listed herein. Although the Board of Directors of the
Company does not contemplate that such nominees will be unable to serve, if such
a situation arises prior to the Annual Meeting, the persons named in the
enclosed proxy will vote for the election of such other persons as may be
nominated by the Board of Directors.
The Board of Directors unanimously recommends a vote FOR the election of
Messrs. McMurrey, McFarland and Gage, the nominees listed above.
PROPOSAL 2
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP
AS INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee,
concluded that the continued engagement of Ernst & Young LLP as the Company's
independent public accountants was in the best interests of the Company.
Representatives of Ernst & Young LLP will be present at the Annual Meeting and
will have the opportunity to make a statement if they desire to do so. Such
representatives are expected to be available to respond to appropriate
questions.
The Board of Directors unanimously recommends a vote FOR the ratification
of the selection of Ernst & Young LLP as independent public accountants for the
Company.
OTHER PROPOSED ACTION
The Board of Directors does not intend to bring any other matters before
the Annual Meeting, nor does the Board of Directors know of any matters which
other persons intend to bring before the Annual Meeting. If, however, other
matters not mentioned in this Proxy Statement properly come before the Annual
Meeting, the persons named in the accompanying form of Proxy will vote thereon
in accordance with the recommendation of the Board of Directors.
Stockholders should note that the Company's By-Laws provide that no
proposals or nominations of directors by stockholders shall be presented for
vote at an annual meeting of stockholders unless notice complying with the
requirements in the By-Laws is provided to the Board of Directors or the
Company's Secretary no later than the close of business on the fifth day
following the day on which notice of the Annual Meeting is first given to
stockholders.
STOCKHOLDER PROPOSALS AND SUBMISSIONS
If any stockholder wishes to present a proposal for inclusion in the proxy
materials to be solicited by the Company's Board of Directors with respect to
the next annual meeting of stockholders, that proposal must be presented to the
Company's management prior to June 17, 1999.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, PLEASE SIGN
AND RETURN THE ENCLOSED PROXY PROMPTLY. YOUR VOTE IS IMPORTANT. IF YOU ARE A
STOCKHOLDER OF RECORD AND ATTEND THE ANNUAL MEETING AND WISH TO VOTE IN PERSON,
YOU MAY WITHDRAW YOUR PROXY AT ANY TIME PRIOR TO THE VOTE.
TELETOUCH COMMUNICATIONS, INC.
Susie F. Smith, Secretary
13
<PAGE>
TELETOUCH COMMUNICATIONS, INC. PROXY
ANNUAL MEETING OF STOCKHOLDERS OF
TELETOUCH COMMUNICATIONS, INC.
ON NOVEMBER 11, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert M. McMurrey, Clifford E. McFarland,
Charles C. Green III, Thomas E. Gage, Thomas E. Van Pelt, Jr. and Marcus D.
Wedner, and each or any of them proxies, with power of substitution, to vote all
shares of the undersigned at the Annual Meeting of Stockholders to be held on
November 11, 1998 at 9:00 a.m. at the Four Seasons Hotel, Fairfield Room, 1300
Lamar, Houston, Texas or at any adjournment thereof, upon the matters set forth
in the Proxy Statement for such meeting, and in their discretion, on such other
business as may properly come before the meeting.
1. TO ELECT THREE CLASS I DIRECTORS TO SERVE FOR THREE YEARS AND UNTIL THEIR
SUCCESSORS HAVE BEEN DULY ELECTED AND SHALL QUALIFY.
[_] FOR THE NOMINEES LISTED BELOW [_] WITHHOLD AUTHORITY
to vote for the nominees listed below
(INSTRUCTION: To withhold authority to vote for the nominee strike a line
through the nominee's name below:)
Robert M. McMurrey
Clifford E. McFarland
Thomas E. Gage
2. TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS.
[_] FOR [_] AGAINST [_] ABSTAIN
Dated: ___________________, 1998
--------------------------------------
Signature
--------------------------------------
Signature if held jointly
NOTE: When shares are held by joint tenants, both should sign. Persons signing
as Executor, Administrator, Trustee, etc. should so indicate. Please sign
exactly as the name appears on the proxy.
IF NO CONTRARY SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2.
PLEASE MARK, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
