<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Confidential, for Use of the Commission Only, (as permitted by Rule
14a-6(e)(2))
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
WESTERN WIRELESS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
WESTERN WIRELESS CORPORATION
- --------------------------------------------------------------------------------
(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: 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: 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.
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(2) Form, Schedule or Registration Statement no.: N.A.
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(3) Filing party: N.A.
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(4) Date filed: N.A.
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<PAGE>
[LOGO]
Seattle, Washington
April 20, 1999
Dear Shareholders:
You are cordially invited to attend the Western Wireless Corporation Annual
Meeting of Shareholders to be held on Thursday, May 20, 1999, at 9:00 a.m.
(Pacific daylight time) at The Museum of History and Industry, 2700 24(th)
Avenue East, Seattle, Washington 98112. Directions to The Museum of History and
Industry are included with this Notice of Annual Meeting and Proxy Statement.
The matters to be acted upon are described in the accompanying Notice of
Annual Meeting and Proxy Statement. At the meeting, we will also report on
Western Wireless' operations and respond to questions you may have.
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND, IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED. PLEASE SIGN, DATE, AND MAIL THE
ENCLOSED PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE PREPAID ENVELOPE
IN ORDER TO ENSURE THAT YOUR VOTE IS COUNTED. IF YOU ATTEND THE MEETING, YOU
WILL, OF COURSE, HAVE THE RIGHT TO VOTE YOUR SHARES IN PERSON.
Very truly yours,
[SIGNATURE]
John W. Stanton
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
<PAGE>
WESTERN WIRELESS CORPORATION
3650 131(ST) AVENUE SE
BELLEVUE, WA 98006
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1999
To the Shareholders:
The Annual Meeting of the Shareholders of Western Wireless Corporation, a
Washington corporation, will be held at The Museum of History and Industry, 2700
24(th) Avenue East, Seattle, Washington 98112, on Thursday, May 20, 1999, at
9:00 a.m. (Pacific daylight time) for the following purposes:
1. To elect six directors to serve until the Annual Meeting of Shareholders
for 2000 and until their respective successors are elected and qualified;
2. To approve the amendment of the 1994 Management Incentive Stock Option
Plan;
3. To ratify the selection of Arthur Andersen LLP as the Company's
independent auditors for 1999; and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on April 9, 1999 will
be entitled to notice of, and to vote at, the Annual Meeting and any
adjournments thereof.
The Company's Proxy Statement is submitted herewith. Financial and other
information concerning the Company is contained in the enclosed Annual Report
for the year ended December 31, 1998.
By Order of the Board of Directors
[LOGO]
Alan R. Bender
SECRETARY
Bellevue, Washington
April 20, 1999
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO DATE AND SIGN
THE ENCLOSED PROXY CARD AND RETURN IT AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
STAMPED AND ADDRESSED ENVELOPE IN ORDER THAT THE PRESENCE OF A QUORUM MAY BE
ASSURED. THE GIVING OF SUCH PROXY DOES NOT AFFECT YOUR RIGHT TO REVOKE IT LATER
OR VOTE YOUR SHARES IN PERSON IN THE EVENT THAT YOU SHOULD ATTEND THE MEETING.
<PAGE>
WESTERN WIRELESS CORPORATION
3650 131(ST) AVENUE SE
BELLEVUE, WA 98006
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1999
This Proxy Statement is furnished by the Board of Directors of Western
Wireless Corporation, a Washington corporation (the "Company" or "Western
Wireless"), to the holders of Class A Common Stock, no par value per share, of
the Company (the "Class A Common Stock"), and to the holders of Class B Common
Stock, no par value per share, of the Company (the "Class B Common Stock," and,
together with the Class A Common Stock, the "Common Stock"), in connection with
the solicitation of proxies by the Board of Directors for use at the Annual
Meeting of Shareholders of the Company for 1999 (the "Annual Meeting"), to be
held at 9:00 a.m. (Pacific daylight time) on Thursday, May 20, 1999, at The
Museum of History and Industry, 2700 24(th) Avenue East, Seattle, Washington
98112, and at any adjournment thereof. Directions to The Museum of History and
Industry are provided at the end of this Proxy Statement.
A proxy delivered pursuant to this solicitation is revocable at the option
of the person giving the same at any time before it is exercised. A proxy may be
revoked, prior to its exercise, by executing and delivering a later dated proxy
card to the Secretary of the Company prior to the Annual Meeting, delivering
written notice of revocation of the proxy to the Secretary of the Company prior
to the Annual Meeting, or attending and voting at the Annual Meeting. Attendance
at the Annual Meeting, in and of itself, will not constitute a revocation of a
proxy. Unless previously revoked, the shares represented by the enclosed proxy
will be voted in accordance with the shareholder's directions if the proxy is
duly executed and returned prior to the Annual Meeting. If no directions are
specified, the shares will be voted for the election of the directors
recommended by the Board of Directors, the approval of the amendment of the 1994
Management Incentive Stock Option Plan to increase the number of shares issuable
under the Plan, the ratification of the selection by the Board of Directors of
the Company's independent auditors, and, at the discretion of the named proxies,
on other matters properly brought before the Annual Meeting.
The presence in person or by proxy of holders of record of a majority of the
total number of votes attributable to all shares of Common Stock outstanding and
entitled to vote is required to constitute a quorum for the transaction of
business at the Annual Meeting. Under Washington law and the Company's Bylaws,
if a quorum is present, a nominee for election to a position on the Board of
Directors will be elected as a Director if the votes cast for the nominee exceed
the votes cast against the nominee and exceed the votes cast for any other
nominee for that position. Abstentions and "broker non-votes" (shares held by a
broker or nominee as to which a broker or nominee indicates on the proxy that it
does not have the authority, either express or discretionary, to vote on a
particular matter) are counted for purposes of determining the presence or
absence of a quorum for the transaction of business at the Annual Meeting. For
the election of directors, an abstention from voting and broker non-votes will
have the legal effect of neither a vote for nor against the nominee. For all
other matters, an abstention from voting and broker non-votes, since they are
not affirmative votes, will have the same practical effect as a vote against the
respective matters. Proxies and ballots will be received and tabulated by
ChaseMellon Shareholder Services, L.L.C., the Company's transfer agent.
This Proxy Statement and the enclosed proxy card are first being mailed to
shareholders on or about April 20, 1999.
The expense of preparing, printing, and mailing this Proxy Statement and the
proxies solicited hereby will be borne by the Company. In addition to the use of
the mails, proxies may be solicited by directors, officers, and other employees
of the Company, without additional remuneration, in person, or by
1
<PAGE>
telephone, telegraph or facsimile transmission. The Company will also request
brokerage firms, banks, nominees, custodians, and fiduciaries to forward proxy
materials to the beneficial owners of shares of Common Stock as of the record
date and will provide reimbursement for the cost of forwarding the proxy
materials in accordance with customary practice. Your cooperation in promptly
signing and returning the enclosed proxy card will help to avoid additional
expense.
At April 7, 1999 the Company had outstanding 42,979,783 shares of Class A
Common Stock and 33,551,476 shares of Class B Common Stock, and there were no
shares of any other class of stock outstanding. Each share of Class A Common
Stock entitles the holder thereof to one vote, and each share of Class B Common
Stock entitles the holder thereof to ten votes. Only shareholders of record at
the close of business on April 9, 1999, will be entitled to notice of, and to
vote at, the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 7, 1999, certain information
regarding beneficial ownership of the Company's Common Stock by (i) each person
who is known by the Company to own beneficially 5% or more of either class of
Common Stock; (ii) each Named Executive Officer (as defined under "Executive
Compensation" below); (iii) each director and nominees for director of the
Company; and (iv) all directors and officers as a group. Unless otherwise
indicated, all persons listed have sole voting power and investment power with
respect to such shares, subject to community property laws, where applicable,
and the information contained in the notes to the table. The Company has been
provided such information by its directors, nominees for directors, and
executive officers.
<TABLE>
<CAPTION>
PERCENTAGE
BENEFICIALLY OWNED
SHARES BENEFICIALLY OWNED(1) -------------------------------
-------------------------------------- B
NAME AND ADDRESS A SHARES B SHARES TOTAL A SHARES SHARES TOTAL
- -------------------------------------------------- ---------- ------------ ------------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Hellman & Friedman(2)(5)(11)...................... 500 12,298,997 12,299,497 * 36.66% 16.07%
One Maritime Plaza, 12th Floor
San Francisco, CA 94111
The Goldman Sachs Group, L.P...................... 250 9,799,029 9,799,279 * 29.21% 12.80%
and related investors (3)(5)(11)
85 Broad Street, 19th Floor
New York, NY 10004
John W. Stanton (4)(5)(6)......................... 347,612 6,207,799 6,555,411 * 18.50% 8.55%
3650 131(st) Avenue SE, Suite 400
Bellevue, WA 98006
Theresa E. Gillespie (4)(5)(6).................... 347,612 6,207,799 6,555,411 * 18.50% 8.55%
3650 131(st) Avenue SE, Suite 400
Bellevue, WA 98006
Hutchison Telecommunications Holdings (USA)
Limited......................................... 3,888,888 0 3,888,888 9.05% 0% 5.08%
22(nd) Floor, Hutchison House
10 Harcourt Road
Hong Kong
Providence Media Partners L.P.(5)(11)............. 250 3,338,768 3,339,018 * 9.95% 4.36%
c/o Providence Ventures, Inc.
900 Fleet Center
50 Kennedy Plaza
Providence, RI 02903
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
BENEFICIALLY OWNED
SHARES BENEFICIALLY OWNED(1) -------------------------------
-------------------------------------- B
NAME AND ADDRESS A SHARES B SHARES TOTAL A SHARES SHARES TOTAL
- -------------------------------------------------- ---------- ------------ ------------ --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Franklin Resources, Inc........................... 2,207,910 0 2,207,910 5.13% 0% 2.89%
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, CA 94403-7777
Donald Guthrie(6)................................. 258,275 90,117 348,392 * * *
Robert R. Stapleton(6)............................ 568,575 10,187 578,762 1.31% * *
Mikal J. Thomsen(6)(7)............................ 278,500 295,442 573,942 * * *
Alan R. Bender(6)................................. 229,725 23,517 253,242 * * *
Cregg B. Baumbaugh(6)............................. 226,625 18,290 244,915 * * *
John L. Bunce, Jr.(8)(11)......................... 500 12,298,997 12,299,497 * 36.66% 16.07%
Mitchell R. Cohen(8)(11).......................... 500 12,298,997 12,299,497 * 36.66% 16.07%
Daniel J. Evans(6)................................ 2,750 0 2,750 * 0% *
Jonathan M. Nelson(9)(11)......................... 28,903 3,338,768 3,367,671 * 9.95% 4.40%
Terence M. O'Toole(10)(11)........................ 250 9,799,029 9,799,279 * 29.21% 12.80%
All directors and executive officers as a group
(13 persons)(6)(11)............................. 1,962,625 31,909,662 33,872,287 4.41% 95.12% 43.41%
</TABLE>
- ------------------------
* Less than 1% of the outstanding shares of Common Stock.
(1) Computed in accordance with Rule 13d-3(d)(1) of the Exchange Act.
(2) Consists of shares held by Hellman & Friedman Capital Partners II, L.P.
("HFCP"), H&F Orchard Partners, L.P. ("HFOP") and H&F International
Partners, L.P. ("HFIP"), which are in turn beneficially owned by their
respective general partners and Warren Hellman, individually and as a
trustee of The Hellman Family Revocable Trust dated December 17, 1984 (the
"Hellman Trust," and, with HFCP, HFOP and HFIP, the "Hellman Entities").
HFCP owns of record 11,108,169 shares of Class B Common Stock, HFOP owns of
record 993,648 shares of Class B Common Stock and HFIP owns of record
197,180 shares of Class B Common Stock. HFCP, HFOP and HFIP are California
limited partnerships, the sole general partners of which are entities
indirectly controlled by the Hellman Trust. The principal business of each
of such partnerships is to make strategic investments in a variety of
special situations, including restructurings, recapitalizations and buyouts.
Mr. Hellman is a trustee of the Hellman Trust. Mr. Hellman is a citizen of
the United States. Mr. Hellman, individually and as a trustee of the trust,
shares voting and investment power with respect to the shares of Common
Stock held by the Hellman Entities.
(3) Consists of (i) 8,986,738 shares of Class B Common Stock held of record by
GS Capital Partners, L.P. ("GS Capital"), (ii) 470,401 shares of Class B
Common Stock held of record by Stone Street Fund 1992, L.P. ("Stone
Street"), (iii) 273,069 shares of Class B Common Stock held of record by
Bridge Street Fund 1992, L.P. ("Bridge Street") and (iv) 68,821 shares of
Class B Common Stock held of record by The Goldman Sachs Group, L.P. ("GS
Group," and, with GS Capital, Stone Street, Bridge Street and Goldman, Sachs
& Co., the "Goldman Sachs Entities"). Each of GS Capital, Stone Street and
Bridge Street is an investment limited partnership, the general partner, the
managing general partner or the managing partner of which is an affiliate of
GS Group. GS Group disclaims beneficial ownership of shares held by such
investment partnerships to the extent partnership interests in such
partnerships are held by persons other than GS Group and its affiliates.
Each of such investment
3
<PAGE>
partnerships shares voting and investment power with certain of its
respective affiliates. The amounts in the table do not include (i) shares of
Class A Common Stock (or less than 1% of the total number of outstanding
shares of Class A Common Stock) owned by Goldman, Sachs & Co. which were
acquired in the ordinary course of market-making transactions or (ii) shares
of Class A Common Stock (or less than 1% of the total number of outstanding
shares of Class A Common stock) held in managed accounts (the "Managed
Accounts") for which Goldman, Sachs & Co. exercises voting or investment
authority, or both. GS Group disclaims beneficial ownership of the shares
held in the Managed Accounts.
(4) Includes (i) 1,686,069 shares of Class B Common Stock held of record by PN
Cellular, Inc. ("PN Cellular"), which is substantially owned and controlled
by Mr. Stanton and Ms. Gillespie, (ii) 1,274,520 shares of Class B Common
Stock held of record by Stanton Communications Corporation ("SCC"), which is
substantially owned and controlled by Mr. Stanton and Ms. Gillespie, (iii)
65,000 shares of Class A Common Stock and 3,087,774 shares of Class B Common
Stock held by Mr. Stanton and Ms. Gillespie, as tenants in common, (iv)
5,000 shares of Class A Common stock and 159,437 shares of Class B Common
Stock held of record by The Stanton Family Trust; and (v) 90,000 shares and
15,000 shares of Class A Common Stock held by record by each of Mr. Stanton
and Ms. Gillespie, respectively, pursuant to the Company's 1997 Executive
Restricted Stock Plan. Mr. Stanton and Ms. Gillespie are married and share
voting and investment power with respect to the shares jointly owned by
them, as well as the shares held of record of PN Cellular, SCC and The
Stanton Family Trust. Mr. Stanton, Ms. Gillespie, PN Cellular, SCC and The
Stanton Family Trust are referred to collectively as the "Stanton Entities."
(5) Parties or affiliates of parties to the Shareholders Agreement, which
provides that the parties thereto will vote their shares of Common Stock in
favor of the election as directors of the Company the Chief Executive
Officer of the Company, one person designated by the Stanton Entities and
Providence Media Partners L.P. ("Providence"), one person designated by the
Goldman Sachs Entities, two persons designated by the Hellman Entities and
one person selected by a majority of such designated persons, subject to the
ownership requirements set forth therein. See "Certain Relationships and
Related Transactions."
(6) Includes aggregate exercisable options, within 60 days of April 7, 1999, to
purchase Class A Common Stock; does not include unexercisable options. May
include stock jointly or separately owned with or by spouse.
(7) Mr. Thomsen jointly holds voting and investment power with respect to all of
such shares with Lynn C. Thomsen, his wife, except for shares issued or
issuable upon the exercise of stock options. Includes 172,484 shares of
Class B Common Stock beneficially owned by Mr. Thomsen through his ownership
of approximately 10.2% of PN Cellular. Mr. Thomsen does not have voting
control over such shares.
(8) Mr. Bunce and Mr. Cohen may each be deemed to be the owner of the 12,299,497
shares of Class B Common Stock owned by the Hellman Entities as they are
officers of the corporate general partners of the Hellman Entities. Each of
Mr. Bunce and Mr. Cohen disclaim beneficial ownership of shares held by the
Hellman Entities to the extent interests in such entities are held by
persons other than such individual.
(9) Mr. Nelson may be deemed to be the owner of the 3,338,768 shares of Class B
Common Stock owned by Providence, as he is a managing general partner of
Providence Ventures, L.P., the general partner of the general partner of
Providence. Mr. Nelson disclaims beneficial ownership of shares held by
Providence to the extent interests in Providence are held by persons other
than Mr. Nelson.
(10) Mr. O'Toole, who is a Managing Director of Goldman, Sachs, & Co., disclaims
beneficial ownership of shares which may be deemed to be beneficially owned
by the Goldman Sachs Entities.
(11) Includes aggregate exercisable options, within 60 days of April 7, 1999, to
purchase Class A Common Stock; does not include unexercisable options.
Options granted to Messrs. Bunce and Cohen are held for the benefit of HFCP;
options granted to Mr. Nelson are held for the benefit of Providence; and
options granted to Mr. O'Toole are held for the benefit of GS Group.
4
<PAGE>
1. ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION
As of April 20, 1999, the Company's Board of Directors consisted of six
members. At each annual meeting, directors are to be elected to serve for a term
of one year and until their respective successors have been elected and
qualified. The terms of office of the Company's current directors are scheduled
to expire at the Annual Meeting.
At the Annual Meeting, shareholders will elect six directors to serve until
the Annual Meeting and until his successor is elected and qualified. Unless
otherwise directed, the persons named in the proxy intend to cast all proxies in
favor of Mr. John W. Stanton, Mr. John L. Bunce, Jr., Mr. Mitchell R. Cohen, Mr.
Daniel J. Evans, Mr. Jonathan M. Nelson, and Mr. Terence M. O'Toole to serve as
directors of the Company. In the event that Mr. Stanton, Mr. Bunce, Mr. Cohen,
Mr. Evans, Mr. Nelson, or Mr. O'Toole should become unavailable for election to
the Board of Directors for any reason, the persons named in the proxy have
discretionary authority to vote the proxies for the election of other nominees
to be designated to fill each such vacancy by the Board of Directors of the
Company.
INFORMATION ABOUT THE NOMINEES
JOHN W. STANTON, 43, has been a director, Chairman of the Board and Chief
Executive Officer of the Company and its predecessors since 1992. Mr. Stanton
has also been a director of VoiceStream Wireless Corporation ("VoiceStream")
since February 1998, and has been its Chief Executive Officer and Chairman since
it was formed in 1994. Mr. Stanton served as a director of McCaw Cellular
Communications, Inc. ("McCaw") from 1986 to 1994, and as a director of LIN
Broadcasting Corporation ("LIN Broadcasting") from 1990 to 1994, during which
time it was a publicly traded company. From 1983 to 1991, Mr. Stanton served in
various capacities with McCaw, serving as Vice-Chairman of the Board of McCaw
from 1988 to September 1991 and as Chief Operating Officer of McCaw from 1985 to
1988. Mr. Stanton is also a member of the Board of Directors of Advanced Digital
Information Corporation, Columbia Sportswear, Inc. and SmarTone (Hong Kong). In
addition, Mr. Stanton is a trustee of Whitman College, a private college. Mr.
Stanton is currently Chairman of the Cellular Telecommunications Industry
Association.
JOHN L. BUNCE, JR., 40, has been a director of the Company and one of its
predecessors since 1992, and of VoiceStream since February 1998. Mr. Bunce is a
Managing Director of Hellman & Friedman L.L.C. ("Hellman & Friedman"), a private
investment firm, having joined the firm in 1988. Mr. Bunce currently is a
director of MobileMedia Corporation, Bronner Slosberg Humphrey, Inc., Falcon
Communications L.P., and National Information Consortium.
MITCHELL R. COHEN, 35, has been a director of the Company and one of its
predecessors since 1992, and of VoiceStream since February 1998. Mr. Cohen is a
Managing Director of Hellman & Friedman, having joined the firm in July 1989.
From 1986 to 1989, Mr. Cohen was employed by Shearson Lehman Hutton, Inc. Mr.
Cohen currently is a director of MobileMedia Corporation and Advanstar, Inc.
DANIEL J. EVANS, 73, has been a director of the Company since 1997 and of
VoiceStream since February 1998. Mr. Evans is the Chairman of Daniel J. Evans
Associates, a consulting firm. From 1965 through 1977, Mr. Evans was Governor of
the State of Washington. In 1983 he was appointed and then elected to the United
States Senate to fill the seat of the late Senator Henry M. Jackson. He serves
as a director of Flow International Corporation, Puget Sound Energy, Tera
Computer Company, and serves on the Board of Regents of the University of
Washington.
JONATHAN M. NELSON, 42, has been a director of the Company since it was
formed in 1994 and of VoiceStream since February 1998. Mr. Nelson has been
President and Chief Executive Officer of Providence Equity Partners Inc.
(investment advisor) since its inception in 1995 and is a Member of Providence
Equity Partners L.L.C. which is the general partner of Providence Equity
Partners L.P. and Providence Equity Partners II L.P. He is also Co-Chairman of
Providence Ventures Inc. (investment advisor) and a managing general partner of
Providence Ventures, L.P. which is the general partner of the
5
<PAGE>
general partner of Providence (a venture capital fund). Since 1986, Mr. Nelson
has been a Managing Director of Narragansett Capital, Inc., a private management
company for three separate equity investment funds. Mr. Nelson is currently a
director of MetroNet Communications Corporation.
TERENCE M. O'TOOLE, 40, has been a director of the Company since it was
formed in 1994 and of VoiceStream since February 1998. Mr. O'Toole joined
Goldman, Sachs & Co. in 1983 and became a Vice President in April 1988, a
general partner in November 1992, and a Managing Director in 1996. He is
currently a director of AMF Bowling, Inc. and Amscan Holdings, Inc., as well as
several privately held companies.
COMMITTEES
The Company's Board of Directors has standing Executive, Compensation,
Nominating and Audit Committees. The members of each Committee and the functions
performed thereby are described below:
EXECUTIVE COMMITTEE. During 1998, the Executive Committee was comprised of
Messrs. Stanton, Bunce and O'Toole. The Executive Committee, during the
intervals between meetings of the Board of Directors, may exercise the powers of
the Board of Directors except with respect to a limited number of matters, which
include amending the Articles of Incorporation or the Bylaws of the Company,
adopting an agreement of merger or consolidation for the Company and
recommending to the shareholders of the Company a merger of the Company, the
sale of all or substantially all of the assets of the Company or the dissolution
of the Company.
COMPENSATION COMMITTEE. During 1998, the Compensation Committee was
comprised of Messrs. Cohen, Evans and Nelson. The Compensation Committee reviews
current remuneration of the directors and of the executive officers of the
Company and makes recommendations to the Board of Directors regarding
appropriate periodic adjustment of such amounts. The Compensation Committee also
makes all determinations concerning the Company's grants of stock options and
restricted stock offers and awards to officers and employees of the Company who
are eligible for such options under each of the Company's 1994 Management
Incentive Stock Option Plan and its 1997 Executive Restricted Stock Plan.
NOMINATING COMMITTEE. During 1998, the Nominating Committee was comprised
of Messrs. O'Toole and Bunce. The Nominating Committee reviews nominations and
makes recommendations to the Board of Directors on Board of Director
appointments.
AUDIT COMMITTEE. During 1998, the Audit Committee was comprised of Messrs.
Cohen and Nelson. The Audit Committee reviews the planned scope of the services
of the Company's independent auditors; reviews financial statements and the
auditors' opinion letter; recommends the independent auditors for the following
fiscal year; reviews the recommendations of the independent auditors relating to
accounting, internal controls, and other matters; and reviews internal controls
and accounting procedures with the Company's financial staff.
PRICING COMMITTEE. During 1998, the Pricing Committee was comprised of
Messrs. Stanton, Cohen and O'Toole. The Pricing Committee established the price
of the shares offered in the secondary offering in April 1998.
During 1998, the Executive Committee did not meet, the Compensation
Committee met three times, the Nominating Committee met one time, the Audit
Committee met one time, the Pricing Committee met one time, and the entire Board
of Directors met four times. Each director attended at least 75 percent of all
Board meetings and meetings of Committees on which they served during the
periods they served.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION
The following table summarizes the compensation for services rendered during
1998, 1997 and 1996 for the Company's Chief Executive Officer and its next four
most highly compensated executive officers (collectively referred to herein as
the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
----------------------------------------------
ANNUAL COMPENSATION RESTRICTED
------------------------- STOCK ALL OTHER
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY($) BONUS($) AWARDS(1) OPTIONS COMPENSATION($)(2)
- ------------------------------------- ------------- ---------- ---------- --------------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C>
John W. Stanton...................... 1998 $ 193,542 $ 400,000 $ 521,250 1,000 $ 367,974
Chairman and Chief Executive 1997 187,083 300,000 416,250 0 292,000
Officer 1996 180,000 270,000 0 0 4,500
Robert R. Stapleton.................. 1998 165,667 200,000 260,625 75,000 186,487
President 1997 157,083 125,000 208,125 0 147,125
1996 150,000 120,000 0 75,000 4,500
Donald Guthrie....................... 1998 165,667 150,000 260,625 60,000 186,487
Vice Chairman and Chief Financial 1997 157,083 115,000 208,125 0 147,125
Officer 1996 150,000 80,000 0 145,250 563
Mikal J. Thomsen..................... 1998 155,667 160,000 260,625 60,000 186,487
Chief Operating Officer 1997 147,081 110,000 208,125 0 147,125
1996 140,000 90,000 0 60,000 4,500
Alan R. Bender,...................... 1998 145,321 110,000 173,750 40,000 125,992
Sr. Vice President, General 1997 137,091 100,000 138,750 0 98,800
Counsel, and Secretary 1996 130,000 96,000 0 40,000 4,500
Cregg B. Baumbaugh................... 1998 145,321 110,000 173,750 40,000 125,992
Sr. Vice President/ Corporate 1997 137,091 100,000 138,750 0 98,800
Development 1996 130,000 96,000 0 40,000 4,500
</TABLE>
- ------------------------
(1) The Company granted 30,000 shares to Mr. Stanton, 15,000 shares to each of
Messrs. Stapleton, Thomsen and Guthrie, and 10,000 shares to each of Messrs.
Baumbaugh and Bender of Class A Common Stock on January 1, 1998, pursuant to
the Executive Restricted Stock Plan. The Company recorded deferred
compensation based upon the market value of the Class A Common stock at
January 1, 1998, and the price at which the Executive Restricted Stock Plan
shares were granted. The shares are restricted until predetermined
performance goals are met, including achieving a predetermined level of
subscribers, and achieving a predetermined level of cash flow.
(2) The Company made payments to cover the taxes related to the grant of
restricted shares and paid matching contributions to the Company's 401(k)
Profit Sharing Plan and Trust.
7
<PAGE>
GRANTS OF STOCK OPTIONS
The following table summarizes the Options granted during 1998 to each of
the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK PRICE
OPTIONS APPRECIATION FOR OPTION
GRANTED TO EXERCISE OR TERM (2)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ------------------------
NAME GRANTED (#)(1) FISCAL YEAR ($/SHARES) DATE 5%($) 10%($)
- ----------------------------------- --------------- ------------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
John W. Stanton.................... 1,000 0.10% $ 17.3750 Jan. 1, 2008 $ 10,927 $ 27,691
Robert R. Stapleton................ 75,000 7.56% $ 17.3750 Jan. 1, 2008 819,528 2,076,846
Donald Guthrie..................... 60,000 6.05% $ 17.3750 Jan. 1, 2008 655,623 1,661,477
Mikal J. Thomsen................... 60,000 6.05% $ 17.3750 Jan. 1, 2008 655,623 1,661,477
Alan R. Bender..................... 40,000 4.03% $ 17.3750 Jan. 1, 2008 437,082 1,107,651
Cregg B. Baumbaugh................. 40,000 4.03% $ 17.3750 Jan. 1, 2008 437,082 1,107,651
</TABLE>
- ------------------------
(1) These options have terms of ten years from the date of grant, January 1,
1998, and become exercisable as to 25% of the shares on the first
anniversary and an additional 25% every year thereafter until such options
are fully exercisable, provided that such officer remains continuously
employed by the Company.
(2) Potential realizable value is based on an assumption that the stock price of
the Common Stock appreciates at the annual rate shown (compounded annually)
from the date of grant until the end of the option term. These numbers are
calculated based on the requirements of the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
performance.
EXERCISES OF STOCK OPTIONS
The following table provides information on option exercises in 1998 by the
Named Executive Officers and the value of such officers' unexercised options on
December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY
SHARES FISCAL YEAR-END (#) OPTIONS AT FISCAL YEAR-END ($)
ACQUIRED ON VALUE -------------------------- ------------------------------
NAME EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------ ------------- ---------- ----------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
John W. Stanton..................... 0 0 0 1,000 0 $ 4,625.00
Robert R. Stapleton................. 79,800 1,409,997 504,825 147,375 7,360,340.25 1,030,698.75
Donald Guthrie...................... 0 0 185,775 113,250 2,790,637.50 774,757.50
Mikal J. Thomsen.................... 0 0 231,500 121,000 2,581,000.00 857,760.00
Alan R. Bender...................... 1,900 30,343 234,325 79,375 3,227,117.75 558,006.25
Cregg B. Baumbaugh.................. 34,500 533,590 186,625 79,375 2,387,463.75 558,006.25
</TABLE>
COMPENSATION OF DIRECTORS
Each director of the Company received 1,000 stock options for serving on the
Board of Directors. These options have terms of ten years from the date of
grant, January 1, 1998, and become exercisable as to 25% of the shares on the
first anniversary and an additional 25% every year thereafter until such options
are fully exercisable, provided that such director remains continuously on the
Board. Options granted to Messrs. Bunce and Cohen are held for the benefit of
HFCP; options granted to Mr. Nelson are held for the benefit of Providence; and
options granted to Mr. O'Toole are held for the benefit of GS Group. Directors
are also reimbursed for their out-of-pocket expenses incurred in connection with
attendance at meetings of, and other activities relating to serving on, the
Board and any committees thereof. Mr. Evans is further compensated $6,000 per
quarter and $1,500 for each Board meeting he attends.
8
<PAGE>
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of Messrs.
Stanton, Guthrie, Stapleton, Thomsen, Bender and Baumbaugh, pursuant to which
such persons employment by the Company may be terminated by the Company at any
time, with or without cause (as such term is defined in the agreements). The
agreements provide for initial annual base compensation of $180,000, $150,000,
$150,000, $140,000, $130,000 and $130,000, respectively (which such annual base
compensation has been subsequently adjusted by the Board of Directors to
$195,000, $168,000, $168,000, $158,000, $147,500 and $147,500, respectively),
and provide each executive officer an opportunity to earn an annual bonus, as
determined by the Board of Directors of the Company, targeted at 100%, 70%, 70%,
60%, 60% and 60%, respectively, of such person's base compensation. Each such
agreement provides, that, in the event of an involuntary termination (as defined
therein) for other than cause (1) such executive officer will be entitled to
receive a severance payment in an amount equal to any accrued but unpaid
existing annual targeted incentive bonus through the date of termination, 12
months of such executive's then base compensation, and an amount equal to 12
months of such executive's existing annual targeted incentive bonus, (2) the
Company will, at its expense, make all specified insurance payment benefits on
behalf of such executive officer and his or her dependents for 12 months
following such involuntary termination and (3) with respect to any stock options
previously granted to each executive officer which remain unvested at the time
of involuntary termination, there shall be immediate vesting of that portion of
each such grant of any unvested stock options equal to the product of the total
number of such unvested options under such grant multiplied by a fraction, the
numerator of which is the sum of the number of days from the date on which the
last vesting of options under such grant occurred to and including the date of
termination plus 365, and the denominator of which is the number of days
remaining from the date on which the last vesting of options under such grant
occurred to and including the date on which the final vesting under such grant
would have occurred absent the termination. Mr. Stapleton's agreement provides
for an immediate vesting of all options upon his involuntary termination for
other than cause. Among other things, an executive officer's death or permanent
disability will be deemed an involuntary termination for other than cause. In
addition, each agreement provides for full vesting of all stock options granted
upon a change of control (as such term is defined in the stock option agreements
with the executive officer) of the Company.
Pursuant to each such employment agreement, the Company has entered into an
indemnification agreement with such executive officer pursuant to which the
Company will agree to indemnify the executive officer against certain
liabilities arising by reason of the executive officer's affiliation with the
Company. Pursuant to the terms of each employment agreement, each executive
officer agrees that during such executive officer's employment with the Company
and for one year following the termination of such executive officer's
employment with the Company for any reason, such executive officer will not
engage in a business which is substantially the same as or similar to the
business of the Company and which competes within the applicable commercial
mobile radio services markets serviced by the Company. Mr. Stanton's agreement
provides that such prohibition shall not preclude Mr. Stanton's investment in
other companies engaged in the wireless communications business or his ability
to serve as a director of other companies engaged in the wireless communications
business, in each case subject to his fiduciary duties as a director of the
Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board was formed in July 1994.
None of the members was at any time during 1998, or at any other time, an
officer or employee of the Company. No member of the Compensation Committee of
the Company serves as a member of the board of directors or compensation
committee of any entity that has one or more executive officers serving as a
member of the Company's Board of Directors or Compensation Committee.
9
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION(*)
The Compensation Committee is responsible for setting policy and the
oversight of executive compensation. The Compensation Committee believes that
the actions of each executive officer has the potential to affect the short-term
and long-term performance of the Company. Consequently, the Compensation
Committee places considerable importance on its task of designing and overseeing
the executive compensation program. The Compensation Committee annually reviews
the compensation programs of peer and competing companies to assess the
competitiveness of its compensation.
PHILOSOPHY AND OBJECTIVES FOR EXECUTIVE COMPENSATION. The purpose of the
Company's executive compensation program is to: (i) increase shareholder value,
(ii) improve the overall performance of the Company and (iii) attract, motivate,
reward and retain key executives.
The Compensation Committee believes that the Company's executive
compensation should reflect each executive officer's qualifications, experience,
role and performance achievements and the Company's performance achievements. In
determining compensation levels, the Compensation Committee focuses on the
competitive environment of the wireless and telecommunications industry group,
considering compensation practices, organization and performance of other
companies. The Compensation Committee also considers general industry trends in
the geographic markets that are relevant to its operations. Total cash
compensation (base salary plus annual cash incentives) and total direct
compensation (base salary plus annual cash incentives plus the expected value of
long-term incentives) should directly reflect the level of performance achieved
by the Company and its executives. Within this overall philosophy, the
Compensation Committee's specific objectives are to: (i) offer compensation
which is competitive with other well-managed wireless and telecommunications
companies and reward superior performance with enhanced levels of compensation;
and (ii) provide variable compensation awards that are based on the Company's
overall performance relative to corporate objectives, taking into account
individual contributions, teamwork and performance levels that help create value
for shareholders.
COMPONENTS OF EXECUTIVE COMPENSATION. The three primary components of
executive compensation are: (i) base salary, (ii) cash bonuses and (iii)
long-term incentive awards.
BASE SALARY. Executive officers' base salaries are set at levels which
reflect their specific job responsibilities, experience, qualifications, and job
performance in the context of the competitive marketplace. Marketplace levels of
compensation are determined using compensation surveys which reflect the
relevant segments of the market and include some of the companies which are
included in the Company's peer group as reflected in the Performance Graph, and
other companies which, while not in the peer group, are deemed appropriate
comparisons for compensation purposes. Base salaries are reviewed each year,
with consideration for adjustments being based on a combination of each
executive officer's ongoing role, his or her job performance and marketplace
competitiveness.
CASH BONUSES. Awards under the bonus plan are based on the achievement of
quality, growth and operating cash flow targets and specific objective
performance goals. These goals are set for a one-year period. Performance goals
are set to represent a range of performance, with the level of associated
incentive award varying with different levels of performance achievement. The
Chief Executive Officer recommends bonuses to the Compensation Committee for
executive officers other than himself. Awards earned under the plan are
contingent upon employment with the Company through the end of the year, except
for payments made in the event of death, retirement, disability, or in the event
of a change in control. Bonus payments are presented in the Summary of
Compensation Table under the heading "Bonus."
- ------------------------
* The report of the Compensation Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under either the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended (together, the
Acts(2)), except to the extent that the Company specifically incorporates
such report by reference; and further, such report shall not otherwise by
deemed filed under the Acts.
10
<PAGE>
LONG-TERM INCENTIVE COMPENSATION. Long-term incentives are provided in the
stock options granted under the Management Incentive Stock Option Plan and
restricted stock granted under the Executive Restricted Stock Plan. The
restricted stock grants listed in the Summary of Compensation Table above
reflect grants made to the Named Executive Officers made in the calendar year
1998. Those grants were based on the recommendations of the Chief Executive
Officer (other than with respect to himself).
CHIEF EXECUTIVE OFFICER COMPENSATION. The executive compensation policy
described above is applied in setting the Chief Executive Officer's
compensation. Mr. Stanton participated in the same base salary and cash bonus
compensation plans available to the Company's other executive officers. In 1998,
Mr. Stanton earned a base salary of $193,542. Mr. Stanton's bonus was determined
on the basis of the Company's operating results versus established goals and
other objectives. During 1998, under Mr. Stanton's leadership, the Company
successfully achieved the following key goals and objectives. The Company grew
its cellular business at a rate above industry averages and achieved Board of
Directors' target levels for operating cash flow. The Company expanded
operations in its VoiceStream personal communications systems ("PCS") systems,
and grew its PCS subscriber base at a level above industry averages and in
excess of Board of Directors' target levels. The Company completed a strategic
alliance with a subsidiary of Hutchison Whampoa and completed a $1 billion debt
financing for its VoiceStream PCS subsidiary. In addition, the Company won
international licenses through its international subsidiary. Mr. Stanton
organized a proposal, that has now been approved, to separate the Company into
two public companies. Finally, Mr. Stanton reorganized the management team to
better align its operations with the strategic opportunities of its cellular and
PCS businesses and retained all of the Company's key executives. The
Compensation Committee determined that an annual bonus of $400,000 has been
earned. Mr. Stanton is a large shareholder of the Company and has, to date,
declined to participate in the Company's Management Incentive Stock Option Plan
except for a option grant of 1,000 shares granted to all Board members. In 1998
the Company continued the Executive Restricted Stock Plan with specific
performance based milestones as the basis for earning grants of the Company's
shares. Mr. Stanton received a grant of 30,000 shares of restricted stock in
1998. Under the program one third of the shares vest based on each of three
milestones associated with certain targets related to growth and financial
performance. The Company also pays taxes for all participants in that plan
related to the grant at the time of the award, which payment is reflected in the
Summary of Compensation Table above.
POLICY ON DEDUCTIBILITY OF COMPENSATION. Section 162(m) of the Internal
Revenue Code of 1986, as amended, limits the tax deductibility by a company of
compensation in excess of $1 million paid to any of its five most highly
compensated executive officers. However, performance-based compensation that has
been approved by stockholders is excluded from the $1 million limit if, among
other requirements, the compensation is payable only upon attainment of
pre-established, objective performance goals and the board committee that
establishes such goals consists only of "outside directors" as defined for
purposes of Section 162(m). All of the members of the Compensation Committee
qualify as "outside directors." The Compensation Committee intends to maximize
the extent of tax deductibility of executive compensation under the provisions
of Section 162(m) so long as doing so is compatible with its determinations as
to the most appropriate methods and approaches for the design and delivery of
compensation to the Company's executive officers.
11
<PAGE>
SUMMARY. The Compensation Committee believes that the mix of conservative
market-based salaries, significant variable cash incentives for both long-term
and short-term performance and the potential for equity ownership in the Company
represents a balance that will motivate the executive management team to
continue to produce strong results. The Committee further believes this program
strikes an appropriate balance between the interests and needs of the Company in
operating its business and appropriate rewards based on enhancement of
shareholder value.
Respectfully submitted,
COMPENSATION COMMITTEE
Mitchell R. Cohen
Daniel J. Evans
Jonathan M. Nelson
12
<PAGE>
PERFORMANCE GRAPH
The following graph depicts the Company's Class A Common Stock price
performance from May 22, 1996 (the date on which quotations for the Class A
Common Stock first appeared on the NASDAQ National Market) through December 31,
1998, relative to the performance of the NASDAQ and the NASDAQ TELECOM. All
indices shown in the graph have been reset to a base of 100 as of May 22, 1996,
and assume an investment of $100 on that date and the reinvestment of dividends,
if any, paid since that date. The Company has not paid cash dividends on its
Common Stock. The chart set forth below was prepared by the Company.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NASDAQ NASDAQ TELECOM WWCA
<S> <C> <C> <C>
22-May-96 $100.00 $100.00 $100.00
May-96 $99.68 $100.13 $104.26
Jun-96 $95.00 $97.41 $90.96
Jul-96 $86.63 $86.44 $66.49
Aug-96 $91.51 $90.40 $74.47
Sep-96 $98.36 $93.68 $72.34
Oct-96 $97.93 $90.21 $70.21
Nov-96 $103.63 $91.19 $59.37
Dec-96 $103.50 $93.51 $59.04
Jan-97 $110.62 $94.87 $63.83
Feb-97 $104.94 $93.93 $60.11
Mar-97 $97.94 $87.41 $53.19
Apr-97 $101.07 $90.29 $43.62
May-97 $112.26 $100.41 $56.91
Jun-97 $115.61 $107.71 $67.55
Jul-97 $127.77 $114.73 $64.10
Aug-97 $127.75 $110.57 $64.10
Sep-97 $135.14 $125.37 $79.79
Oct-97 $127.76 $127.59 $76.06
Nov-97 $128.31 $128.06 $79.26
Dec-97 $125.89 $132.78 $73.94
Jan-98 $129.82 $141.04 $85.37
Feb-98 $141.94 $154.38 $80.32
Mar-98 $147.16 $168.16 $97.87
Apr-98 $149.79 $165.83 $82.98
May-98 $142.61 $163.93 $78.72
Jun-98 $151.90 $178.83 $84.84
Jul-98 $150.11 $185.63 $88.57
Aug-98 $120.19 $141.42 $66.49
Sep-98 $135.79 $157.44 $76.06
Oct-98 $142.01 $172.52 $86.17
Nov-98 $156.29 $183.89 $77.13
Dec-98 $175.78 $216.94 $93.62
</TABLE>
<TABLE>
<CAPTION>
5/22/96 12/31/98
----------- -----------
<S> <C> <C>
Western Wireless Corporation....................................... $ 23.50 $ 22.00
NADAQ TELECOM...................................................... 230.900 500.910
NASDAQ............................................................. 1247.38 2192.69
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Hellman Entities, the Stanton Entities, the Goldman Sachs Entities and
Providence are parties to a Shareholders Agreement, which, with respect to
election of directors of the Company, provides that each of the Hellman
Entities, the Stanton Entities, the Goldman Sachs Entities and Providence shall
vote their shares of Common Stock to elect a Board of Directors which will
include (but not necessarily be limited to) the following six members: (i) the
Chief Executive Officer of the Company, (ii) so long as the Hellman Entities
beneficially own at least (A) 15% of the total voting power (as defined in the
Shareholders Agreement) of the Company, two persons designated by the Hellman
Entities or (B) 7 1/2% of the total voting power of the Company, one person
designated by the Hellman Entities, (iii) so long as the Goldman Sachs Entities
beneficially own at least 7 1/2% of the total voting power of the Company, one
person designated by the Goldman Sachs Entities, (iv) so long as the Stanton
Entities and Providence collectively beneficially own at least 7 1/2% of the
total voting power of the Company, one person designated by majority
13
<PAGE>
vote of the Stanton Entities and Providence (such designee being in addition to
Mr. Stanton if he is then serving on the Board of Directors by reason of being
the Chief Executive Officer of the Company); the Stanton Entities agreed that so
long as Mr. Stanton is serving as Chief Executive and Providence owns at least
75% of the shares of Common Stock it beneficially owns at the date of execution
of the Shareholders Agreement, the Stanton Entities shall vote their shares of
Common Stock for one member of the Board of Directors designated by Providence;
and (v) one member of the Board of Directors of the Company selected by a
majority of the persons selected as described above. The Shareholders Agreement
further provides that so long as the Hellman Entities hold shares of Common
Stock having voting power (as defined in the Shareholders Agreement) in excess
of 49.9% of the total voting power, then for so long as the Hellman Entities
hold shares of Common Stock having voting power in excess of the aforesaid
percentage, it shall abstain from voting that number of shares of Common Stock,
which gives it more votes than the aforesaid percentage. Such agreement has a
term of 10 years. The Goldman Sachs Entities are also limited in their voting
power to provisions of the Company's Articles of Incorporation.
An affiliate of the Goldman Sachs Entities is a member of the syndicate of
lenders pursuant to a credit facility providing VoiceStream, an 80.1% subsidiary
of the Company (the "Subsidiary"), $1 billion of credit (the "Credit Facility"),
and has committed to lend to the Subsidiary up to the aggregate principal amount
of $8.5 million.
An affiliate of the Goldman Sachs Entities served as a consultant in the
investment of $248 million by an affiliate of Hutchison Telecommunications
Limited through the private placement of 2,484 shares of common stock of
VoiceStream in February 1998, and the Company paid customary fees for services
therefor.
An affiliate of the Goldman Sachs Entities has agreed to reimburse the
Company for certain expenses incurred by the Company in connection with the
preparation and maintenance of a current prospectus as part of the Goldman Sachs
Entities' market making activities, including certain legal, printing and
accounting fees.
The Company believes that the foregoing transactions were on terms as fair
to the Company as those which would have been available in arm's-length
negotiations. The Credit Facility, another $950 million credit facility provided
to the Company, indentures pursuant to which the Company has issued subordinated
debt, and the Washington Business Corporation Act contain provisions which limit
the terms on which the Company may enter into transactions with its affiliates.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than 10% of the Common Stock, to file with the Securities
and Exchange Commission (the "SEC") initial reports of beneficial ownership
("Forms 3") and reports of changes in beneficial ownership of Common Stock and
other equity securities of the Company ("Forms 4"). Officers, directors, and
greater than 10% shareholders of the Company are required by SEC regulations to
furnish to the Company copies of all Section 16(a) reports that they file. To
the Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, all Section 16(a) filing requirements applicable to its officers,
directors, and greater than 10% beneficial owners were complied with for the
year ended December 31, 1998.
2. APPROVAL OF AMENDMENT TO 1994 MANAGEMENT INCENTIVE STOCK OPTION PLAN
Subject to shareholder approval, the Board of Directors has approved an
amendment to paragraph 3 of the 1994 Management Incentive Stock Option Plan (the
"Plan") to increase the maximum aggregate number of shares issuable under the
Plan to 7,600,000 shares of Common Stock of the Company, subject to (i)
adjustment pursuant to Section 8 thereof, or (ii) amendment thereof approved by
the shareholders of
14
<PAGE>
the Company (the "Amendment"). The Board of Directors will request that the
shareholders approve the Amendment to the Plan. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT TO THE PLAN.
3. RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors will request that the shareholders ratify its
selection of Arthur Andersen LLP, independent auditors, to examine the
consolidated financial statements of Western Wireless for the year ending
December 31, 1999. Arthur Andersen LLP examined the consolidated financial
statements of the Company for the year ended December 31, 1998. Representatives
of Arthur Andersen LLP will be present at the Annual Meeting to make a statement
if they desire to do so and respond to questions by shareholders. The
affirmative vote of a majority of the total number of votes attributable to all
shares represented at the meeting is required for the ratification of the
Board's selection of Arthur Andersen LLP as the Company's independent auditors
for the fiscal year ending December 31, 1999. THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR THE RATIFICATION OF THE SELECTION OF ARTHUR ANDERSEN LLP AS
INDEPENDENT AUDITORS OF THE COMPANY.
Shareholder proposals to be presented at the Company's next Annual Meeting
of Shareholders and included in the Company's Proxy Statement relating to such
meeting must be received by the Company at its executive offices no later than
December 24, 1999.
OTHER BUSINESS
It is not intended by the Board of Directors to bring any other business
before the meeting, and so far as is known to the Board, no matters are to be
brought before the meeting except as specified in the notice of the meeting.
However, as to any other business which may properly come before the meeting, it
is intended that proxies, in the form enclosed, will be voted in respect
thereof, in accordance with the judgment of the persons voting such proxies.
WESTERN WIRELESS
By Order of the Board of Directors
[SIGNATURE]
Alan R. Bender
SECRETARY
Bellevue, Washington
April 20, 1999
15
<PAGE>
REPORT AVAILABLE
A copy of the Company's annual report on Form 10-K, as filed with the
Securities and Exchange Commission, will be furnished without charge to
shareholders upon request to:
Investor Relations
Western Wireless Corporation
3650 131(st) Avenue SE
Bellevue, Washington 98006
(425) 586-8700
<PAGE>
[LOGO] DIRECTIONS TO
THE MUSEUM OF HISTORY AND INDUSTRY
2700 24TH AVENUE EAST
SEATTLE, WASHINGTON 98112
(206) 324-1126
FROM SEA-TAC AIRPORT, DOWNTOWN SEATTLE HOTELS AND CONVENTION CENTER
TAKE INTERSTATE 5 NORTH
Take the Bellevue-Kirkland/state Route 520 exit (168-B)
Stay in the far right lane.
Take the Montlake Boulevard exit.
After the stop light, go straight 1 block to 24th Avenue East.
Turn left onto 24th Avenue East and into the Museum Parking lot.
FROM BELLEVUE AND THE EASTSIDE, HOTELS AND CONVENTION CENTER
TAKE WEST-BOUND STATE ROUTE 520
Take the Lake Washington Boulevard exit.
This exit winds over State Route 520.
Turn right at the stop sign onto Lake Washington Boulevard.
Turn right onto 24th Avenue East and into the Museum Parking lot.
VISITOR INFORMATION: Open weeksdays from 11:00 am to 5:00 pm, and weekends from
10:00 am to 5:00 pm. The Montlake Bus Station is just one block from the
museum. Call Metro Rider at 553-3000 for more information.
CAB SERVICE:
Yellow Cab: 622-6500
Orange Cab: 522-8800
<PAGE>
- --------------------------------------------------------------------------------
WESTERN WIRELESS CORPORATION
PROXY
FOR ANNUAL MEETING OF THE SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John W. Stanton and Alan R. Bender
(collectively, the "Proxies"), and each of them, with full power of
substitution, as proxies to vote the shares which the undersigned is entitled
to vote at the Annual Meeting of the Company to be held at The Museum of
History and Industry, 2700 24th Avenue East, Seattle, Washington 98112, on
May 20, 1999, at 9:00 a.m. (Pacific daylight time) and at any adjournments
thereof.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE>
- --------------------------------------------------------------------------------
Please mark
your votes as /X/
indicated in
this example
FOR all
nominees WITHHOLD AUTHORITY To Vote
named below: for all nominees named below:
1. John W. Stanton, / / / /
John L. Bunce, Jr.,
Mitchell L. Cohen,
Daniel J. Evans,
Jonathan M. Nelson,
Terence M. O'Toole.
FOR AGAINST ABSTAIN
2. Proposal to amend 1994 Management Incentive Stock / / / / / /
Option Plan to increase the number of shares
issuable under the Plan.
3. Proposal to ratify the selection of Arthur / / / / / /
Andersen LLP as the Company's independent
auditors for 1999.
4. In their discretion, the Proxies are authorized / / / / / /
to vote upon such other business as may properly
come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
SPECIFIED BY THE UNDERSIGNED. EXCEPT AS OTHERWISE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS OF ALL
NOMINEES NAMED ABOVE, FOR THE APPROVAL TO AMEND THE 1994
MANAGEMENT INCENTIVE STOCK OPTION PLAN, AND FOR RATIFICATION
OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
IMPORTANT - PLEASE SIGN AND RETURN PROMPTLY. When shares are
held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please
give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by an authorized
person.
Signature_____________________________________________
Signature, if held jointly____________________________ Dated:_________, 1999
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