<PAGE> 1
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 [ ] Confidential, for Use of the Commission
[X] Definitive proxy statement 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.
(2) Form, Schedule or Registration Statement no.: N.A.
(3) Filing party: N.A.
(4) Date filed: N.A.
<PAGE> 2
WESTERN WIRELESS LOGO
BELLEVUE, WASHINGTON
APRIL 18, 2000
Dear Shareholders:
You are cordially invited to attend the Western Wireless Corporation Annual
Meeting of Shareholders on Thursday, May 18, 2000 at 9:00 a.m. (Pacific Time) at
The Museum of History and Industry, 2700 24th Avenue East, Seattle, Washington.
Directions to The Museum of History and Industry are provided on the back cover
of 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 Corporation's operations and respond to any questions you may
have.
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING OF SHAREHOLDERS, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED. PLEASE
SIGN, DATE, AND RETURN 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 REVOKE THE
PROXY AND VOTE YOUR SHARES IN PERSON.
Very truly yours,
/s/ JOHN W. STANTON
John W. Stanton
Chairman and
Chief Executive Officer
<PAGE> 3
WESTERN WIRELESS CORPORATION
3650 131ST AVENUE SE
BELLEVUE, WA 98006
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 18, 2000
To the Shareholders:
The Annual Meeting of Shareholders of Western Wireless Corporation (the
"Company") will be held at The Museum of History and Industry, 2700 24th Avenue
East, Seattle, Washington, on Thursday, May 18, 2000 at 9:00 a.m. (Pacific Time)
for the following purposes:
1. To elect six directors to serve until the Annual Meeting of Shareholders
for 2001 and until their respective successors are elected and
qualified;
2. To ratify the selection of Arthur Andersen LLP as the Company's
independent auditors for 2000; and
3. 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 4, 2000 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, 1999.
By Order of the Board of Directors
/s/ ALAN R. BENDER
Alan R. Bender
Secretary
Bellevue, Washington
April 18, 2000
YOUR VOTE IS VERY IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS, IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED. PLEASE SIGN, DATE, AND RETURN 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 REVOKE THE PROXY AND VOTE YOUR SHARES IN
PERSON.
<PAGE> 4
WESTERN WIRELESS CORPORATION
3650 131ST AVENUE SE
BELLEVUE, WA 98006
------------------------
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
MAY 18, 2000
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 (the "Annual Meeting") to be held at 9:00
a.m. (Pacific Time) on Thursday, May 18, 2000 at The Museum of History and
Industry, 2700 24th Avenue East, Seattle, Washington, and at any adjournment
thereof. Directions to The Museum of History and Industry are provided on the
back cover 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, for 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 and the
inspector of elections for the Annual Meeting.
This Proxy Statement and the enclosed proxy card are first being mailed on
or about April 18, 2000 to the Company's shareholders of record on April 4, 2000
(the "Record Date").
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 mail, proxies may be solicited by directors, officers, and other
employees of the Company, without additional remuneration, in person, or by
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
<PAGE> 5
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 the close of business on the Record Date, the Company had 70,725,400
shares of Class A Common Stock and 7,086,564 shares of Class B Common Stock
outstanding, and there were no outstanding shares of any other class of stock.
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 the Record Date 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 4, 2000, 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 nominee for director of the
Company; and (iv) all directors, officers and key employees 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.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(2) PERCENTAGE BENEFICIALLY OWNED
---------------------------------- --------------------------------------
TOTAL A B TOTAL OUTSTANDING
NAME AND ADDRESS(1) A SHARES B SHARES SHARES SHARES SHARES SHARES VOTES
------------------- --------- --------- ---------- ------ ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Janus Capital Corporation(3)... 7,318,250 0 7,318,250 10.35% 0 9.41% 5.17%
AMVESCAP PLC et al.(4)......... 4,889,830 0 4,889,830 6.91% 0 6.28% 3.45%
T. Rowe Price Associates,
Inc.(5)...................... 4,387,100 0 4,387,100 6.20% 0 5.64% 3.10%
Goldman Sachs & Co., Inc. and
related investors(6)(7)...... 3,892,359 0 3,892,359 5.50% 0 5.00% 2.75%
John W. Stanton(7)(8).......... 101,889 6,050,693 6,152,046 * 85.38% 7.90% 42.81%
Theresa E. Gillespie(7)(8)..... 101,889 6,050,693 6,152,046 * 85.38% 7.90% 42.81%
Mikal J. Thomsen(9)............ 386,028 295,442 681,470 * 4.17% * 2.36%
Donald Guthrie(10)............. 321,252 90,117 411,369 * 1.27% * *
Alan R. Bender(11)............. 186,725 22,813 209,538 * * * *
John L. Bunce, Jr.(7)(12)...... 206,929 0 206,929 * 0 * *
Mitchell R. Cohen(7)(13)....... 23,907 0 23,907 * 0 * *
Daniel J. Evans(14)............ 4,623 0 4,623 * 0 * *
Jonathan M. Nelson(7)(15)...... 220,276 0 220,276 * 0 * *
Terence M. O'Toole(6)(7)....... 3,892,359 0 3,892,359 5.50% 0 5.00% 2.75%
All directors, executive
officers and key employees as
a group
(14 persons)(16)............. 5,458,476 6,308,281 11,766,757 7.62% 89.02% 14.95% 48.41%
</TABLE>
- ---------------
* Less than 1%
(1) The address of Goldman Sachs & Co., Inc. ("Goldman Sachs") is 85 Broad
Street, 19th Floor, New York, New York 10004. The address of T. Rowe Price
Associates, Inc. ("Price Associates") is 100 East Pratt Street, Baltimore,
Maryland 21202. The addresses of AMVESCAP PLC et al. are 1315 Peachtree
Street, N.E., Atlanta, Georgia 30309 and 11 Devonshire Square, London, EC2M
4YR, England. The address of Janus Capital Corporation ("Janus Capital") is
100 Fillmore Street, Denver, Colorado 80206. The address of the Company's
directors and executive officers is 3650 131st Avenue SE, Bellevue,
Washington, 98006.
(2) Computed in accordance with Rule 13d-3(d)(1) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(3) As reported in the Schedule 13G filed by Janus Capital on February 11,
2000, Janus Capital is a registered investment adviser which furnishes
investment advice to several investment companies and individual and
institutional clients. Janus Capital may be deemed to be the beneficial
owner of the
2
<PAGE> 6
shares, however, it does not have the right to receive any dividends from,
or the proceeds from the sale of, the shares and disclaims any ownership
associated with such rights.
(4) As reported in their Schedule 13G filed on February 4, 2000, these shares
may be deemed to be beneficially owned by each of AMVESCAP PLC, AVZ, Inc.;
AIM Management Group Inc.; AMVESCAP Group Services, Inc.; INVESCO, Inc.;
INVESCO North American Holdings, Inc.; INVESCO Capital Management, Inc.;
INVESCO Funds Group, Inc.; INVESCO Management & Research, Inc.; INVESCO
Realty Advisers, Inc.; and INVESCO (NY) Asset Management, Inc. (the
"AMVESCAP Group"). The AMVESCAP Group share voting and/or dispositive power
of these shares, and hold these shares on behalf of other persons who have
the right to receive and/or the power to direct the receipt of dividends
from, or the proceeds from the sale of such shares.
(5) As reported in the Schedule 13G filed by Price Associates on February 14,
2000, these shares are owned by various individual and institutional
investors to which Price Associates serves as investment adviser with power
to direct investments and/or sole power to vote the securities. Price
Associates is deemed to be a beneficial owner of such shares; however,
Price Associates expressly disclaims beneficial ownership of such shares.
(6) Excludes (i) shares of Class A Common Stock (less than 1% of the total
number of outstanding shares of Class A Common Stock) owned by Goldman
Sachs which were acquired in connection with its ordinary course of
business trading activities and/or which may be deemed to be beneficially
owned by the Goldman Sachs 1999 Exchange Place Fund, L.P. (the "Exchange
Fund"); and (ii) shares of Class A Common Stock (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 exercises voting
or investment authority, or both. Goldman Sachs disclaims beneficial
ownership of the shares held in the Exchange Fund and the Managed Accounts.
Includes options held by Mr. O'Toole to purchase 786 shares of Class A
Common Stock exercisable on or before June 18, 2000; does not include
unexercisable options. Options granted to Mr. O'Toole are held for the
benefit of Goldman Sachs. Mr. O'Toole, a Managing Director of Goldman
Sachs, disclaims beneficial ownership of shares which may be deemed to be
beneficially owned by Goldman Sachs.
(7) 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
(defined below) and Providence Media Partners, L.P. ("Providence"), one
person designated by Goldman Sachs, two persons designated by Hellman &
Friedman Capital Partners II, L.P. ("Hellman & Friedman") and one person
selected by a majority of such designated persons, subject to the ownership
requirements set forth therein.
(8) 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) 1,274,519 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) 58,333 shares of Class A Common Stock and 3,025,668 shares of Class B
Common Stock held by Mr. Stanton and Ms. Gillespie, as tenants in common,
(iv) 64,437 shares of Class B Common Stock held of record by The Stanton
Family Trust, and (v) options held by Mr. Stanton and Ms. Gillespie to
purchase 786 and 42,770 shares of Class A Common Stock, respectively,
exercisable on or before June 18, 2000; does not include unexercisable
options. 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 by PN Cellular, SCC and The Stanton Family
Trust (the "Stanton Entities").
(9) Mr. Thomsen jointly holds voting and investment power with respect to all
of such shares with 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. Also includes options held by Mr. Thomsen to purchase 359,028
shares of Class A Common Stock exercisable on or before June 18, 2000; does
not include unexercisable options. Although this table counts all options
as
3
<PAGE> 7
exercisable into Class A Common Stock only, 217,794 of the options held by
Mr. Thomsen are in fact exercisable into either Class A Common Stock or
Class B Common Stock at Mr. Thomsen's discretion.
(10) Includes options held by Mr. Guthrie to purchase 258,407 shares of Class A
Common Stock exercisable on or before June 18, 2000; does not include
unexercisable options. Although this table counts all options as
exercisable into Class A Common Stock only, 176,860 of the options held by
Mr. Guthrie are in fact exercisable into either Class A Common Stock or
Class B Common Stock at Mr. Guthrie's discretion.
(11) Includes options held by Mr. Bender to purchase 141,451 shares of Class A
Common Stock exercisable on or before June 18, 2000; does not include
unexercisable options. Although this table counts all options as
exercisable into Class A Common Stock only, 94,042 of the options held by
Mr. Bender are in fact exercisable into either Class A Common Stock or
Class B Common Stock at Mr. Bender's discretion. Also includes 2,790 shares
of Class B Common Stock held by Mr. Bender's wife, and 2,704 shares of
Class A Common Stock held by a family trust.
(12) Includes options held by Mr. Bunce to purchase 786 shares of Class A Common
Stock exercisable on or before June 18, 2000; does not include
unexercisable options. Options granted to Mr. Bunce prior to December 31,
1999 are held for the benefit of Hellman & Friedman.
(13) Includes options held by Mr. Cohen to purchase 786 shares of Class A Common
Stock exercisable on or before June 18, 2000; does not include
unexercisable options. Options granted to Mr. Cohen prior to December 31,
1999 are held for the benefit of Hellman & Friedman.
(14) Includes options held by Mr. Evans to purchase 4,623 shares of Class A
Common Stock exercisable on or before June 18, 2000; does not include
unexercisable options.
(15) Includes options held by Mr. Nelson to purchase 786 shares of Class A
Common Stock exercisable on or before June 18, 2000; does not include
unexercisable options. Options granted to Mr. Nelson are held for the
benefit of Providence Media Services, Inc.
(16) Includes options held by directors, executive officers and key employees to
purchase 914,647 shares of Class A Common Stock exercisable on or before
June 18, 2000; does not include unexercisable options. Although this table
counts all options as exercisable into Class A Common Stock only, 586,434
of the options held by directors, executive officers and key employees are
in fact exercisable into either Class A Common Stock or Class B Common
Stock at the respective holder's discretion.
1. ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION
As of April 18, 2000, 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 next Annual Meeting of Shareholders and until their respective successors
are elected and qualified. Unless otherwise directed, the persons named in the
proxy intend to cast all proxies in favor of Messrs. Stanton, Bunce, Cohen,
Evans, Nelson, and 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, 44, has been a director, Chief Executive Officer and
Chairman 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
4
<PAGE> 8
Cellular") from 1986 to 1994, and as a director of LIN Broadcasting Corporation
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 Cellular, serving
as Vice-Chairman of the Board of McCaw Cellular from 1988 to September 1991 and
as Chief Operating Officer of McCaw Cellular from 1985 to 1988. Mr. Stanton is
also a member of the Board of Directors of Advanced Digital Information
Corporation and Columbia Sportswear, Inc. In addition, Mr. Stanton is a trustee
of Whitman College, a private college.
JOHN L. BUNCE, JR., 41, has been a director of the Company and one of its
predecessors since 1992. He was also a director of VoiceStream from February
1998 to February 2000. Mr. Bunce is a Managing Director of Hellman & Friedman, a
private investment firm, having joined Hellman & Friedman as an associate in
1988. Mr. Bunce is also a director of National Information Consortium and
Digitas.
MITCHELL R. COHEN, 36, has been a director of the Company and one of its
predecessors since 1992. He has also been a director of VoiceStream since
February 1998. Mr. Cohen is a Managing Director of Hellman & Friedman, having
joined Hellman & Friedman as an associate in July 1989. From 1986 to 1989, Mr.
Cohen was employed by Shearson Lehman Hutton, Inc. Mr. Cohen is also a director
of Advanstar, Inc.
DANIEL J. EVANS, 74, has been a director of the Company since 1997. He has
also been a director 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. Mr. Evans also serves as a director of Flow
International Corporation, Puget Sound Energy, and Tera Computer Company, and
serves on the Board of Regents of the University of Washington.
JONATHAN M. NELSON, 43, has been a director of the Company since it was
formed in 1994. He has also been a director of VoiceStream since February 1998.
Mr. Nelson has been President and Chief Executive Officer of Providence Equity
Partners Inc., an 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., an investment advisor, and a
managing general partner of Providence Ventures L.P., which is the general
partner of the general partner of Providence Media Partners L.P., 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 also a director of AT&T Canada.
TERENCE M. O'TOOLE, 41, has been a director of the Company since it was
formed in 1994. He has also been a director of VoiceStream since February 1998.
Mr. O'Toole joined Goldman Sachs in 1983 and became a Vice President in 1987, a
general partner in 1992, and a Managing Director in 1996. Mr. O'Toole is also a
director of AMF Bowling, Inc.
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 1999, 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 1999, 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
5
<PAGE> 9
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 1999, 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 1999, 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.
During 1999, the Executive Committee did not meet, the Compensation
Committee met three times, the Audit Committee met one time, the Nominating
Committee met one time, and the entire Board of Directors met five 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.
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION
The following table summarizes the compensation for services rendered
during 1999, 1998, and 1997 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 SECURITIES
NAME AND FISCAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS(1)(4) OPTIONS(2)(5) COMPENSATION($)(3)
------------------ ------ --------- --------- ------------ ------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
John W. Stanton(6) 1999 295,000 1,000,000 660,000 1,069 464,593
Chairman and Chief 1998 193,542 400,000 521,250 1,000 367,974
Executive Officer 1997 187,083 300,000 416,250 0 292,000
Donald Guthrie(6) 1999 212,865 180,000 330,000 64,155 234,796
Vice Chairman 1998 165,667 150,000 260,625 60,000 186,487
1997 157,083 115,000 208,125 0 147,125
Mikal J. Thomsen 1999 225,006 263,096 330,000 128,310 234,796
President and Chief 1998 155,667 160,000 260,625 60,000 186,487
Operating Officer 1997 147,081 110,000 208,125 0 147,125
Alan R. Bender(6) 1999 169,060 170,000 220,000 42,770 158,197
Executive Vice President 1998 145,321 110,000 173,750 40,000 125,992
and Secretary 1997 137,091 100,000 138,750 0 98,800
Theresa E. Gillespie 1999 169,919 170,386 220,000 85,540 158,197
Executive Vice President 1998 145,321 110,000 173,750 40,000 125,992
1997 137,091 100,000 138,750 0 98,800
</TABLE>
- ---------------
(1) The Company granted 30,000 shares to Mr. Stanton, 15,000 shares to each of
Messrs. Thomsen and Guthrie, and 10,000 shares to each of Mr. Bender and Ms.
Gillespie of Class A Common Stock on January 3, 1999, 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 3, 1999,
and the price at which the Executive Restricted Stock Plan shares were
granted. The shares of the Company are restricted until predetermined
performance goals are met, including achieving a predetermined level of
subscribers, and achieving a predetermined level of cash flow. Dividends
will be paid on Executive Restricted Stock Plan shares to the extent paid on
any other shares of stock of the same class.
6
<PAGE> 10
(2) On May 3, 1999, the Company distributed its 80.1% ownership of VoiceStream
to its shareholders on a 1 for 1 basis: for each share of the Company that
shareholders owned at the record date for the spin-off of VoiceStream, they
received a share of VoiceStream Common Stock (the "VoiceStream Spin-off").
With the exception of the 1999 option grant, the number of options granted
in each year has not been adjusted to reflect the cancellation and
reissuance of the initial grants on May 21, 1999 at an adjusted strike price
and amount to account for the VoiceStream Spin-off (see Option Repricings
table below).
(3) The Company made payments to cover the taxes related to the grant of
Executive Restricted Stock Plan shares and paid matching contributions to
the Company's 401(k) Profit Sharing Plan and Trust.
(4) On May 3, 1999, in connection with the VoiceStream Spin-off, Named Executive
Officers received shares of VoiceStream Common Stock in an amount equal to
the shares of restricted stock of the Company that had been granted prior to
May 3, 1999. These VoiceStream shares are subject to the Company's Executive
Restricted Stock Plan, and are restricted until the same predetermined
performance goals are met (see note 1 above).
(5) On May 3, 1999, in connection with the VoiceStream Spin-off, optionees of
the Company, including the Named Executive Officers, received options to
purchase shares of VoiceStream Common Stock in an amount equal to the number
of outstanding vested options each had on May 3, 1999.
(6) Mr. Stanton, and until May 3, 2002 Messrs. Guthrie and Bender, will divide
their time and responsibilities between the Company and VoiceStream, and
their compensation will be shared appropriately. The bonus for 1999 for each
of Messrs. Stanton, Guthrie and Bender is the aggregate bonus paid by both
the Company and VoiceStream, with 40% of such bonus paid by the Company and
60% paid by VoiceStream.
GRANTS OF STOCK OPTIONS
The following table summaries options granted during 1999 to each of the
Named Executive Officers, as reissued in May 1999 at an adjusted exercise price
and amount to account for the VoiceStream Spin-off:
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS POTENTIAL REALIZABLE VALUE AT
SECURITIES GRANTED TO ASSUMED ANNUAL RATES OF
UNDERLYING EMPLOYEES, STOCK PRICE APPRECIATION FOR
OPTIONS OFFICERS AND EXERCISE OR OPTION TERM(3)
GRANTED DIRECTORS IN BASE PRICE EXPIRATION ------------------------------
NAME (#)(1)(2) FISCAL YEAR(2) ($/SHARES) DATE 5%($) 10%($)
---- ---------- -------------- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
John W. Stanton...... 1,069 0.13% 9.946 Jan. 1, 2009 105,594 174,441
Donald Guthrie....... 64,155 7.58% 9.946 Jan. 1, 2009 2,047,816 3,563,127
Mikal J. Thomsen..... 128,310 15.16% 9.946 Jan. 1, 2009 4,095,632 7,126,255
Alan R. Bender....... 42,770 5.05% 9.946 Jan. 1, 2009 1,365,210 2,375,418
Theresa E.
Gillespie.......... 85,540 10.11% 9.946 Jan. 1, 2009 2,730,421 4,750,837
</TABLE>
- ---------------
(1) These options have terms of ten years from January 1, 1999, 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) Excludes options initially granted prior to January 1, 1999, and reissued in
May 1999 at an adjusted exercise price and amount to account for the
VoiceStream Spin-off (see Option Repricings table below).
(3) 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. Excludes options to
purchase VoiceStream common stock received as a result of the VoiceStream
Spin-off. 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.
7
<PAGE> 11
EXERCISES OF STOCK OPTIONS
The following table provides information on option exercises in 1999 by the
Named Executive Officers and the value of such officers' unexercised options on
December 31, 1999. This table excludes exercises of options to purchase
VoiceStream common stock received in connection with the VoiceStream Spin-off.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT FISCAL YEAR-END MONEY OPTIONS AT FISCAL
SHARES (#) YEAR-END ($)
ACQUIRED ON VALUE --------------------------- -----------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
John W. Stanton........... 0 0 250 1,871 14,656 107,736
Donald Guthrie............ 15,345 303,641 226,329 128,310 14,239,159 7,432,726
Mikal J. Thomsen.......... 50,000 2,396,285 294,872 256,620 18,094,271 14,865,550
Alan R. Bender............ 155,670 5,363,259 120,065 85,540 7,345,046 4,955,149
Theresa E. Gillespie...... 226,227 11,074,587 0 149,695 0 8,620,101
</TABLE>
OPTION REPRICINGS
The following table provides information on reissuances in 1999 of options
held by the Named Executive Officers at an adjusted exercise price and/or amount
to account for the VoiceStream Spin-off. Those who held vested options to
purchase Western Wireless Common Stock at the time of the VoiceStream Spin-off
also received an equal number of vested options to purchase VoiceStream common
stock which are governed by the VoiceStream 1999 Management Incentive Stock
Option Plan. The combined exercise prices for such new options to purchase
VoiceStream common stock and new options to purchase Western Wireless Common
Stock following the VoiceStream Spin-off were equal to the exercise prices of
the initial, cancelled, underlying options to purchase Western Wireless Common
Stock prior to the VoiceStream Spin-off. All reissued stock options were granted
in a manner that ensured that employees, including the Named Executive Officers,
maintained the value of their options, subject to normal fluctuations in the
price of both the Company's and VoiceStream's stock, after the VoiceStream
Spin-off. This reissuance did not accelerate any benefits to option holders.
<TABLE>
<CAPTION>
MARKET
NUMBER OF PRICE OF EXERCISE NUMBER OF
SECURITIES STOCK AT PRICE AT SECURITIES
UNDERLYING TIME OF TIME OF UNDERLYING NEW EXPIRATION DATE
OPTIONS REISSUANCE REISSUANCE OPTIONS AS EXERCISE OF ORIGINAL
NAME DATE REISSUED ($) ($) REISSUED PRICE ($) OPTION TERM
---- ---- ---------- ---------- ---------- ---------- --------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
John W. Stanton May 21, 1999 1,000 26.1875 17.375 1,052 8.125 January 1, 2008
Donald Guthrie May 21, 1999 93,000 26.1875 11.290 94,610 5.279 July 29, 2005
85,250 26.1875 1.130 85,250 0.528 February 6, 2006
45,430 26.1875 13.725 47,508 6.418 December 31, 2006
60,000 26.1875 17.375 63,116 8.125 January 1, 2008
60,000 26.1875 21.270 64,155 9.946 January 1, 2009
Mikal J. Thomsen May 21, 1999 108,500 26.1875 9.680 108,500 4.527 December 31, 2004
124,000 26.1875 11.290 159,294 5.279 July 29, 2005
60,000 26.1875 13.725 94,155 6.418 December 31, 2006
60,000 26.1875 17.375 111,233 8.125 January 1, 2008
60,000 26.1875 21.270 128,310 9.946 January 1, 2009
Alan R. Bender May 21, 1999 46,500 26.1875 4.030 46,500 1.884 January 1, 2004
65,100 26.1875 9.680 65,100 4.527 December 31, 2004
77,500 26.1875 11.290 78,842 5.279 July 29, 2005
25,430 26.1875 13.725 26,815 6.418 December 31, 2006
40,000 26.1875 17.375 42,078 8.125 January 1, 2008
40,000 26.1875 21.270 42,770 9.946 January 1, 2009
</TABLE>
8
<PAGE> 12
<TABLE>
<CAPTION>
MARKET
NUMBER OF PRICE OF EXERCISE NUMBER OF
SECURITIES STOCK AT PRICE AT SECURITIES
UNDERLYING TIME OF TIME OF UNDERLYING NEW EXPIRATION DATE
OPTIONS REISSUANCE REISSUANCE OPTIONS AS EXERCISE OF ORIGINAL
NAME DATE REISSUED ($) ($) REISSUED PRICE ($) OPTION TERM
---- ---- ---------- ---------- ---------- ---------- --------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Theresa E. Gillespie May 21, 1999 86,800 26.1875 9.680 86,800 4.527 December 31, 2004
100,750 26.1875 11.290 129,427 5.279 July 29, 2005
40,000 26.1875 17.375 74,155 8.125 January 1, 2008
40,000 26.1875 21.270 85,540 9.946 January 1, 2009
</TABLE>
COMPENSATION OF DIRECTORS
Each director of the Company received 1,069 stock options for serving on
the Board of Directors. These options have terms of ten years from the date of
grant, December 31, 1999, and become exercisable as to 25% of the shares on
January 1, 2000, 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 Mr. O'Toole are held for the benefit of Goldman Sachs,
and options granted to Mr. Nelson are held for the benefit of Providence Media
Services, Inc. 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.
EMPLOYMENT AGREEMENTS
Mr. Stanton and, until May 3, 2002, Messrs. Guthrie and Bender, will divide
their time and responsibilities between the Company and VoiceStream pursuant to
their existing employment agreements with the Company. Their employment
agreements and the employment agreements between the Company and each of Mr.
Thomsen and Ms. Gillespie provide for annual base salaries which currently are
$295,000, $215,000, $170,000, $225,000 and $170,000, respectively, and provide
each executive officer an opportunity to earn an annual bonus, as determined by
the respective board of directors, targeted at 100%, 70%, 60%, 70% and 60%,
respectively, of annual base compensation. It is expected that the Company will
pay, and VoiceStream will reimburse the Company, for all executive compensation
for Messrs. Stanton, Guthrie and Bender which is attributable to time spent and
services rendered to VoiceStream.
The foregoing employment agreements also provide that the contracting
employee may be terminated by the Company at any time, with or without cause (as
such term is defined in the employment agreements); however, 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. Among
other things, an executive officer's death or permanent disability will be
deemed an involuntary termination for other than cause. In addition, each
employment 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
9
<PAGE> 13
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 1999, 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.
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.
- ---------------
* 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"),
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> 14
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.'
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 reflect
grants made to the Named Executive Officers in the calendar year 1999. 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. Mr.
Stanton's compensation between May 3, 1999 and yearend was shared between the
Company and VoiceStream. In 1999, Mr. Stanton earned a total base salary of
$295,000, of which 50% was paid by the Company, and 50% was paid by VoiceStream.
Mr. Stanton's bonus was determined on the basis of the Company's operating
results versus established goals and other objectives. During 1999, under Mr.
Stanton's leadership, the Company successfully achieved the following key goals
and objectives. Mr. Stanton organized a process of separating the Company into
two public companies. The Company grew its business at a rate above industry
averages and exceeded Board of Directors' target levels for operating cash flow.
The Company completed acquisitions increasing its licensed population by
approximately 20% at a low cost of acquisition. 'In its international
subsidiary, the Company won and purchased additional international licenses and
made significant progress building and operating its systems in these
countries'. 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 a total annual bonus of $1,000,000 has been earned, of
which $400,000 was paid by the Company, and $600,000 was paid by VoiceStream.
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
option grants to all Board members of 1,000 shares in 1998 and 1,069 shares in
1999.
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> 15
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> 16
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,
1999, 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 graph has been adjusted to reflect the VoiceStream Spin-off
completed on May 3, 1999, as if the VoiceStream shares were sold on May 4, 1999,
at its closing price of $25.188, and reinvested in the Company at its closing
price of $22.00; VoiceStream is publicly traded on the NASDAQ National Market
under the symbol VSTR. The graph set forth below was prepared by the Company.
<TABLE>
<CAPTION>
NASDAQ NASDAQ TELECOM WWCA
------ -------------- ----
<S> <C> <C> <C>
5/96 100.00 100.00 100.00
6/96 95.30 97.29 87.24
9/96 98.67 92.63 69.39
12/96 103.83 93.39 56.63
3/97 98.25 87.30 51.02
6/97 115.98 107.57 64.80
9/97 135.57 125.21 76.53
12/97 126.29 132.62 70.92
3/98 147.63 167.95 93.88
6/98 152.38 178.60 81.38
9/98 136.22 157.24 72.96
12/98 176.34 216.67 89.80
3/99 197.95 267.44 147.96
6/99 216.03 283.36 236.38
9/99 220.85 270.25 392.60
10/99 238.57 320.75 462.91
11/99 268.30 355.08 512.70
12/99 327.26 439.21 584.38
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Goldman Sachs 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 Goldman Sachs' market making activities, including
certain legal, printing and accounting fees. Mr. O'Toole is a Managing Director
of Goldman Sachs.
Effective January 1, 1999, the Company, WWC Holding Co., Inc. ("Holding
Co."), Western Wireless International Corporation ("WWI"), and Bradley Horwitz,
the Executive Vice President-International of the Company, entered into an
amendment of a subscription and put and call agreement with respect to shares of
common stock of WWI whereby Mr. Horwitz's interest in WWI decreased from 10% to
4.04% in consideration of the Company's investment in WWI of an additional $29
million in 1996 and 1997. Holding Co. continues to own the balance of the
outstanding capital stock of WWI. Any funds provided by the Company to WWI on or
subsequent to January 1, 1998, shall be considered revolving debt loaned by the
Company to WWI at an interest rate of 10.5% per annum.
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 $950 million credit facility, indentures
13
<PAGE> 17
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 EXCHANGE ACT
Section 16(a) of 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 and Forms
5"). 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, 1999,
except that Goldman Sachs and Mr. O'Toole, a director of the Company and a
Managing Director of Goldman Sachs, were late in reporting the acquisition by
Goldman Sachs of 800 shares of Class A Common Stock in September 1999 in
connection with its ordinary course of business trading activities.
2. RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors will request that the shareholders ratify its
selection of Arthur Andersen LLP to serve as the Company's independent auditors,
to examine the consolidated financial statements of the Company for the year
ending December 31, 2000. Arthur Andersen LLP examined the consolidated
financial statements of the Company for the year ended December 31, 1999.
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, 2000. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF ARTHUR
ANDERSEN LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
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.
SHAREHOLDER PROPOSALS
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 at 3650 131st
Avenue SE, Bellevue, Washington 98006, Attention: Corporate Secretary, no later
than December 20, 2000.
14
<PAGE> 18
REPORT AVAILABLE
A copy of the Company's Annual Report on Form 10-K, without exhibits, will
be furnished without charge to shareholders upon request to:
Investor Relations
Western Wireless Corporation
3650 131st Avenue SE
Bellevue, Washington 98006
(425) 586-8700
WESTERN WIRELESS CORPORATION
By Order of the Board of Directors
/s/ ALAN R. BENDER
Alan R. Bender
Secretary
Bellevue, Washington
April 18, 2000
15
<PAGE> 19
DIRECTIONS TO THE
ANNUAL MEETING OF SHAREHOLDERS OF
WESTERN WIRELESS CORPORATION
AT
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 signal 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 signal light onto Lake Washington Boulevard
Turn right onto 24th Avenue East and into the Museum parking lot
16
<PAGE> 20
[FRONT]
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS
WESTERN WIRELESS CORPORATION
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 Shareholders of the Company to be held at The
Museum of History and Industry, 2700 24th Avenue East, Seattle, Washington, on
Thursday, May 18, 2000 at 9:00 a.m. (Pacific Time) and at any adjournments
thereof.
1. FOR Election of directors: John W. Stanton, John L. Bunce, Jr., Mitchell L.
Cohen, Daniel J. Evans, Jonathan M. Nelson, Terence M. O'Toole.
WITHHOLD AUTHORITY To Vote for the following Directors: ____________________
2. [ ] FOR [ ] AGAINST [ ] ABSTAIN Proposal to ratify the selection of
Arthur Andersen LLP as the Company's independent auditors for 2000.
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE> 21
[REVERSE]
This proxy when properly signed will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3.
----------------------------------------
Signature
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Signature, if held jointly
Dated: , 2000
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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.
