PROXY STATEMENT
==============================================================================
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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
PRICELLULAR CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5)Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
==============================================================================
PriCellular Corporation
45 Rockefeller Center
New York, New York 10020
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------------------------
The 1997 Annual Meeting of the stockholders of PriCellular
Corporation will be held at the offices of Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York on Wednesday, May 14, 1997, at 10:00 a.m.
for the following purposes:
1. To elect directors.
2. To consider and vote upon a proposed amendment to the Company's
Amended and Restated Certificate of Incorporation, approved and
declared advisable by the Company's Board of Directors, which
would increase the authorized number of shares of the Company's
Class B Common Stock, par value $.01 per share, from 20,000,000 to
50,000,000 shares and thereby increase the authorized number of
shares of all classes of the Company's stock, par value $.01 per
share, from 130,000,000 to 160,000,000 shares.
3. To transact such other business as may properly come before the
meeting and any and all adjournments or postponements thereof.
The Board of Directors has fixed the close of business on April
8, 1997, as the record date for the determination of the stockholders entitled
to notice of and to vote at the meeting and at any adjournment or postponement
thereof.
Stockholders are invited to attend the meeting. Whether or not
you expect to attend, WE URGE YOU TO SIGN, DATE AND PROMPTLY RETURN THE
ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PREPAID ENVELOPE. If you attend
the meeting, you may vote your shares in person, which will revoke any
previously executed proxy.
If your shares are held of record by a broker, bank or other
nominee and you wish to attend the meeting, you must obtain a letter from the
broker, bank or other nominee confirming your beneficial ownership of the
shares and bring it to the meeting. In order to vote your shares at the
meeting, you must obtain from the record holder a proxy issued in your name.
Regardless of how many shares you own, your vote is very
important. Please SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD TODAY.
By Order of the Board of Directors
Kim I. Pressman
Secretary
New York, New York
April 15, 1997
PriCellular Corporation
45 Rockefeller Center
New York, New York 10020
-----------------
PROXY STATEMENT
-----------------
Introduction
This proxy statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of PriCellular
Corporation, a Delaware corporation (the "Company"), for the 1997 Annual
Meeting of the stockholders of the Company on May 14, 1997. The Notice of
Annual Meeting, this proxy statement and the accompanying proxy are first
being mailed on or about April 15, 1997 to stockholders of record as of the
close of business on April 8, 1997. You can ensure that your shares are voted
at the meeting by signing, dating and promptly returning the enclosed proxy in
the envelope provided. Sending in a signed proxy will not affect your right to
attend the meeting and vote in person. You may revoke your proxy at any time
before it is voted by notifying the Company's Transfer Agent, Harris Trust
Company of New York, 77 Water Street, New York, NY 10005 in writing, or by
executing a subsequent proxy, which revokes your previously executed proxy.
The Company's principal executive offices are located at 45
Rockefeller Center, New York, New York 10020.
Voting of Proxies
Proxies will be voted as specified by the stockholders. Where
specific choices are not indicated, proxies will be voted for proposal 1.
Under the Delaware General Corporation Law and the Company's Amended and
Restated Certificate of Incorporation, (x) a plurality of the votes of the
outstanding shares of the Company's Class A Common Stock, Class B Common Stock
and Series A Cumulative Convertible Preferred Stock (the "Voting Shares"),
voting together as a single class, entitled to vote and present, in person or
by properly executed proxy, will be required to elect a nominated director and
(y) the affirmative vote of the holders of at least a majority of the votes of
(i) the outstanding shares of the Company's Class A Common Stock and Class B
Common Stock, voting together as a single class, and (ii) the outstanding
Voting Shares, voting together as a single class, will be required to approve
the proposed amendment to the Company's Amended and Restated Certificate of
Incorporation which would increase the authorized number of shares of Class B
Common Stock from 20,000,000 to 50,000,000 shares and of all classes of stock
from 130,000,000 to 160,000,000 shares.
On April 8, 1997, the record date for the 1997 Annual Meeting,
there were outstanding and entitled to vote 19,235,654 shares of Class A
Common Stock of the Company, entitled to one vote per share, 19,170,736 shares
of Class B Common Stock of the Company, entitled to ten votes per share, and
96,000 shares of Series A Cumulative Convertible Preferred Stock, entitled to
111.26 votes per share (based on the number of shares of Class A Common Stock
into which it is convertible).
Stockholders will not be entitled to appraisal rights in
connection with any of the matters to be voted on at the Annual Meeting.
1. Election of Directors
At the meeting, five directors are to be elected to serve until
their successors have been elected and qualified. Information regarding such
nominees for reelection is set forth below.
The accompanying proxy will be voted for the reelection of the
Board's nominees unless contrary instructions are given. If any Board nominee
is unable to serve, which is not anticipated, the persons named as proxies
intend to vote for the other Board nominees and, unless the number of nominees
is reduced by the Board of Directors, for such other person or persons as the
Board of Directors may designate.
Nominees
Robert Price has been a Director, President and Assistant
Treasurer of the Company since 1990. Robert Price concurrently serves as and
has been a director and the Chief Executive Officer and President of Price
Communications ("Price Communications") since 1979. In 1992 Price
Communications filed for protection from creditors pursuant to Chapter 11 of
the United States Bankruptcy Code. Price Communications' Amended Plan of
Reorganization was confirmed on June 11, 1992 and became effective on December
30, 1992. Robert Price, an attorney, is a former General Partner of Lazard
Freres & Co. He has served as an Assistant United States Attorney, practiced
law in New York and served as Deputy Mayor of New York City. After leaving
public office, Robert Price became Executive Vice President of The Dreyfus
Corporation and an Investment Officer of The Dreyfus Fund. In 1972 he joined
Lazard Freres & Co. Robert Price has served as a Director of Holly Sugar
Corporation, Atlantic States Industries, The Dreyfus Corporation, Graphic
Scanning Corp. and Lane Bryant, Inc., and is currently a member of The Council
on Foreign Relations. Robert Price serves as the Representative of The
Majority Leader and President Pro Tem of the New York Senate and on the Board
of Directors of the Municipal Assistance Corporation for the City of New York.
Robert Price also has been appointed by Governor George Pataki of New York to
a seven year term as a Member of the Board of Trustees of the City University
of New York. Robert Price is also a Director and President of TLM Corporation.
Robert Price was elected to the Company's Board of Directors as a nominee of
the Price family pursuant to a stockholders agreement among the principal
stockholders of the Company (the "Stockholders Agreement"). Robert Price is
the father of Steven Price.
Kim I. Pressman has been a Director, Vice President and
Secretary of the Company since 1990. Ms. Pressman also served as the Treasurer
of the Company from 1990 until December 1994. Ms. Pressman is a certified
public accountant and is a graduate of Indiana University and holds an M.B.A.
from New York University. Since 1990, she has served as Executive Vice
President of Price Communications and is currently also a Director. Prior to
joining Price Communications in 1984, Ms. Pressman was employed for three
years by Peat, Marwick, Mitchell & Co., a national certified public accounting
firm, and for more than three years thereafter was Supervisor, Accounting
Policies for International Paper Company and then Manager, Accounting
Operations for Corinthian Broadcasting Division of Dun & Bradstreet Company, a
large group owner of broadcasting stations. Ms. Pressman is the Chairman and a
Vice President and Treasurer of TLM Corporation. Ms. Pressman was elected to
the Company's Board of Directors as a nominee of the Price family pursuant to
the Stockholders Agreement.
Steven Price has been the Chief Operating Officer and Senior
Vice President of the Company since March 1997 and a Director of the Company
since September 1996. From December 1994 to March 1997 he was a Senior Vice
President, Corporate Development of the Company. Prior thereto, he was
Director of Business Development of the Company since April 1993. From 1990 to
1993, Mr. Price was an attorney with Davis Polk & Wardwell. Prior thereto, Mr.
Price was appointed by President Bush to serve in the U.S. State Department as
Special Assistant to the Chief U.S. Nuclear Arms Negotiator and worked in the
mergers and acquisitions department of Goldman, Sachs & Co. Mr. Price
graduated magna cum laude from Brown University, where he was elected to Phi
Beta Kappa, and has a J.D. degree from Columbia University. Steven Price is
Vice President and Secretary of TLM Corporation and is the son of Robert Price.
Brion B. Applegate has been a Director of the Company since
June 1994. He is a founder and general partner of Spectrum, a venture capital
fund specializing in communications and telecommunications investments. Prior
thereto, he was a general partner of funds managed by Burr, Egan, Deleage &
Co. Mr. Applegate serves on the board of several private communications
entities. Mr. Applegate originally was elected to the Company's Board of
Directors as Spectrum's nominee pursuant to the Stockholders Agreement.
Scott M. Sperling has been a Director of the Company since
February 1996. Mr. Sperling is a Managing Director of the Thomas H. Lee
Company and a General Partner of its affiliated Equity Funds. Prior to this
position, he served for ten years as the Managing Partner of the Aeneas Group
Inc., the affiliate of the Harvard Management Company, responsible for all
private capital market investments, including venture capital, company buyouts
and real estate. From 1981-1984, Mr. Sperling was a Senior Consultant with the
Boston Consulting Group, Inc. He holds an M.B.A. from Harvard Business School
and a B.S. from Purdue University. He is a Director of Beacon Properties,
Inc., Softkey International, KAI Inc., Livent, Inc. and several private
companies. Mr. Sperling is also a member of the corporation for the Brigham
and Womens Hospital and Medical Center and is the director of several
charitable organizations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE REELECTION OF DIRECTORS,
WHICH IS DESIGNATED AS PROPOSAL NO. 1 ON THE ENCLOSED PROXY CARD.
Committees of the Board -- Board Meetings
The Board of Directors held nine meetings, the Audit Committee
held no meetings, the Compensation and Stock Option Committee held three
meetings and the Executive Committee held nine meetings in 1996. All of the
Directors attended at least 75% of the meetings of the Board and the
respective Committees of the Board of which they are members.
The Board of Directors has the following standing committees:
Audit Committee
The Audit Committee recommends the annual engagement of
auditors, with whom the Audit Committee will review the scope of audit and
non-audit assignments, related fees, the accounting principles used in
financial reporting, internal financial auditing procedures and the adequacy
of internal control procedures. The Company anticipates that additional
directors will be appointed to the Audit Committee as soon as practicable to
ensure that a majority of the Audit Committee members are independent
directors.
Ms. Pressman serves as a member of the Audit Committee. The
Company anticipates that additional directors will be appointed to the Audit
Committee as needed to ensure that a majority of the Audit Committee members
are independent directors.
Compensation and Stock Option Committee
The Compensation and Stock Option Committee reviews and
approves the remuneration arrangements for the officers and directors of the
Company and reviews and recommends new executive compensation or stock plans
in which the officers and/or directors are eligible to participate, including
the granting of stock options.
Mr. Applegate serves on the Compensation and Stock Option
Committee. The Company anticipates that additional directors will be
appointed to the Compensation and Stock Option Committee as needed to
ensure that a majority of the Compensation and Stock Option Committee
members are independent directors.
Executive Committee
The by-laws of the Company provide for the establishment of an
Executive Committee, which the Board of Directors has established. The by-laws
provide that the Executive Committee shall consist of four members, one of
which shall be designated by each of the Price family, AT&T Wireless Services,
Inc. ("AT&T Wireless/McCaw"), Aeneas Venture Corporation ("Harvard Private
Capital") and Thomas H. Lee Equity Fund III, L.P. (the "THL Equity Fund")
except during any period in which there is a significant overlap between the
PCS licensed areas directly or indirectly owned, operated or controlled by, or
attributed to AT&T Wireless/McCaw, or any affiliate of either and the cellular
geographic service areas directly or indirectly owned, operated or controlled
by, or attributed to, the Company or any affiliate thereof, in which case it
shall consist of three members, one of which shall be designated by each of
the Price family, Harvard Private Capital and THL Equity Fund.
The affirmative vote of the Executive Committee of the Company
with no members voting against will be required to designate any class or
series of Preferred Stock or incur any indebtedness other than trade
indebtedness incurred in the ordinary course of the Company's business and
other than indebtedness not in excess of $1,000,000. The right of AT&T
Wireless/McCaw and the THL Equity Fund to nominate a member to the Executive
Committee shall terminate (a) with respect to AT&T Wireless/McCaw on the
earlier to occur of (i) April 28, 2001 or (ii) such time as the number of
fully diluted shares held by AT&T Wireless/McCaw is less than 7% of the total
number of fully diluted shares then outstanding and (c) with respect to THL
Equity Fund at such time as the number of fully diluted shares held by THL
Equity Fund and the other purchasers of shares of Class Cumulative Convertible
Preferred Stock, par value $.01 per share, of the Company is less than
4,375,000 (without giving effect to certain reductions to the conversion value
provided in the certificate of designation to such shares and subject to
appropriate adjustment for subdivision, combination, consolidation or
reclassification of such shares into a greater or lesser number of shares).
The right of Harvard Private Capital to nominate a director and member of the
Executive Committee has terminated and Harvard Private Capital's nominee has
resigned.
The members of the Executive Committee are Messrs. Robert Price
and Sperling.
Compensation of Directors
Directors of the Company are not paid fees.
Executive Officers
The following table sets forth certain information with respect
to the executive officers of the Company.
Name Age Office
- --------------------- --- -----------------------------------------------
Robert Price......... 64 Director, President and Assistant Treasurer
Stuart B. Rosenstein. 36 Senior Vice President, Chief Financial Officer,
Treasurer and Assistant Secretary
Kim I. Pressman...... 40 Director, Vice President and Secretary
Steven Price......... 35 Director, Chief Operating Officer and Senior
Vice President
Stuart B. Rosenstein has been a Senior Vice President since
September 1996 and Chief Financial Officer and Assistant Secretary of the
Company since December 1993. Mr. Rosenstein has also served as Treasurer of
the Company since December 1994. From 1990 to December 1993, he was the
Company's Controller and from 1990 to September 1996, he was a Vice President.
Prior to that time, Mr. Rosenstein, a certified public accountant, was a
senior manager with the accounting firm of Ernst & Young. Mr. Rosenstein has a
B.S. degree from SUNY at Buffalo, where he graduated magna cum laude.
Stock Ownership of Certain Beneficial Owners and Management
The following table provides certain information regarding the
beneficial ownership of the Company's Common Stock as of February 28, 1997 by
(i) each of the Company's directors and officers listed in the summary
compensation table incorporated by reference herein, (ii) all directors and
officers as a group and (iii) each person known to the Company to be the
beneficial owner of 5% or more of any class of the Company's voting securities.
<TABLE>
<CAPTION>
Beneficial Ownership of
Class A and B Common Stock(1)
--------------------------------------------
Percentage of Percentage of
Combined Combined
Name of Beneficial Owner Shares Classes Voting
- ------------------------ --------- ------------- -------------
<S> <C> <C> <C>
Directors and Officers
Robert Price(2)............................................ 7,109,545 17.4% 23.2
Stuart B. Rosenstein(3).................................... 233,005 0.6 0.1
Kim I. Pressman(4)......................................... 77,735 0.2 0.1
Steven Price(5)............................................ 4,037,138 10.4 17.8
Brion B. Applegate(6)...................................... 3,318,046 8.5 10.3
Scott M. Sperling(7)....................................... 6,635,671 14.7 3.0
All directors and officers as a group (6 persons).......... 20,420,282 41.8 45.5
Other 5% Stockholders
AT&T Wireless Services, Inc.(8) 6,537,544 17.0 19.8
(formerly McCaw)
5400 Carillon Point
Kirkland, WA 98033
Aeneas Venture Corporation(9) 4,051,220 10.5 19.2
(an affiliate of Harvard Private Capital Group, Inc.)
600 Atlantic Avenue, 26th Floor
Boston, MA 02210
The Thomas H. Lee Company(10) 6,635,671 14.7 3.0
75 State Street
Boston, MA 02109
Putnam Investments, Inc.(11) 5,355,114 12.6 2.5
One Post Office Square
Boston, MA 02109
Eileen Farbman(12) 4,594,574 12.0 21.7
c/o Suite 3200
45 Rockefeller Plaza
NY, NY 10020
Janus Capital Corp.(13) 3,449,619 9.0 1.6
100 Fillmore Street
Denver, CO 80206
Spectrum Equity Investors, L.P.(14) 3,318,046 8.5 10.3
121 High Street, 26th Floor
Boston, MA 02110
The Public School Employes' Retirement System(15) 3,317,836 8.0 1.5
5 North 5th Street, Box 125
Harrisburg, PA 17108
Price Communications Corporation(16) 3,618,860 9.0 8.7
Suite 3200
45 Rockefeller Plaza
NY, NY 10020
Leo Farbman(17) 1,523,436 4.0 7.2
c/o Suite 3200
45 Rockefeller Plaza
NY, NY 10020
Alexandra Farbman(18) 1,523,436 4.0 7.2
c/o Suite 3200
45 Rockefeller Plaza
NY, NY 10020
College Retirement Equities Fund(19) 2,090,250 5.4 1.0
730 Third Avenue
NY, NY 10017
<FN>
- ------------
(1) As used in this table, "beneficial ownership" means the sole or
shared power to vote or direct the voting or to dispose or direct the
disposition of any security. A person is deemed as of any date to
have "beneficial ownership" of any security that such person has a
right to acquire within 60 days after such date. Any security that
any person named above has the right to acquire within 60 days is
deemed to be outstanding for purposes of calculating the ownership
percentage of such person, but is not deemed to be outstanding for
purposes of calculating the ownership percentage of any other person.
(2) Consists of 425,781 shares of Class B Common Stock owned directly by
Robert Price, 1,317,858 shares of Class B Common Stock and 14,000
shares of Class A Common Stock held by Robert Price and Eileen
Farbman, as joint tenants (see also footnote 12), 990,858 shares of
Class B Common Stock held by Robert Price and Steven Price, as joint
tenants (see also footnote 5), options to purchase 742,188 shares of
Class A Common Stock granted pursuant to the Company's 1994 Stock
Option Plan that are currently exercisable, 1,799,250 shares of Class
A Common Stock held by Price Communications and warrants to purchase
1,819,610 shares of Class B Common Stock held by Price Communications
that are currently exercisable (see also footnote 16).
(3) Consists of 3,906 shares of Class B Common Stock owned directly by
Mr. Rosenstein, 4,178 shares of Class A Common Stock owned directly
by Mr. Rosenstein, 5,078 shares of Class A Common Stock held by Mr.
Rosenstein as custodian for his daughter, 195 shares of Class A
Common Stock held by Mr. Rosenstein as custodian for his son and
options to purchase 202,148 shares of Class A Common Stock granted
pursuant to the Company's 1994 Stock Option Plan that are currently
exercisable. Includes 17,500 options to purchase shares of Class A
Common Stock held in custody for his children that are currently
exercisable. Does not include options to purchase 141,406 shares of
Class A Common Stock granted pursuant to the Company's 1994 Stock
Option Plan that are not exercisable within 60 days.
(4) Consists of 3,906 shares of Class B Common Stock owned directly by
Ms. Pressman and options to purchase 48,829 shares of Class A Common
Stock granted pursuant to the Company's 1994 Stock Option Plan that
are currently exercisable. Does not include options to purchase
53,125 shares of Class A Common Stock granted pursuant to the
Company's 1994 Stock Option Plan that are not exercisable within 60
days. Includes 25,000 options to purchase shares of Class A Common
Stock held in custody for her children that are currently exercisable.
(5) Consists of 2,685,109 shares of Class B Common Stock owned directly
by Steven Price, 990,858 shares of Class B Common Stock held by
Robert Price and Steven Price, as joint tenants (see also footnote
2), 5,038 shares of Class A Common Stock owned directly by Steven
Price and options to purchase 202,148 shares of Class A Common Stock
granted pursuant to the Company's 1994 Stock Option Plan that are
currently exercisable. Includes 103,985 options to purchase shares of
Class A Common Stock and 50,000 shares of Class B Common Stock
held in custody for his daughter. Does not include options to
purchase 97,656 shares of Class A Common Stock granted pursuant to
the Company's 1994 Stock Option Plan that are not exercisable
within 60 days. Steven Price is the son of Robert Price.
(6) All of such shares are owned by Spectrum and attributed to Brion B.
Applegate, a General Partner of Spectrum, pursuant to the definition
of beneficial ownership provided in footnote 1.
(7) All of such shares are owned by The Thomas H. Lee Company and
attributed to Scott M. Sperling, a Managing Director of The Thomas H.
Lee Company, pursuant to the definition of beneficial ownership
provided in footnote 1.
(8) Consists of 3,925,781 shares of Class B Common Stock and 2,611,763
shares of Class A Common Stock.
(9) Consists of 3,994,945 shares of Class B Common Stock currently
outstanding and warrants to purchase 56,275 shares of Class B Common
Stock that are currently exercisable. The per share price at which
shares may be purchased pursuant to the warrants is $4.75 subject to
adjustment.
(10) Consists of 6,675,865 shares of Class A Common Stock currently
issuable (subject to adjustments) upon conversion of 54,728 shares of
the Company's Series A Cumulative Convertible Preferred Stock (the
"Convertible Preferred Stock") held by Thomas H. Lee Equity Fund III
L.P. and 5,272 shares of Convertible Preferred Stock held by THL-CCI
Investors Limited Partnership.
(11) Consists of 4,208,629 shares of Class A Common Stock issuable upon
conversion of the Company's outstanding 10 3/4% Senior Subordinated
Convertible Discount Notes due 2004 and 1,146,485 shares of Class A
Common Stock. Information with respect to the shares of Class A
Common Stock held is based on a Schedule 13G dated February 8, 1995,
which reflects the collective beneficial ownership of Marsh &
McLennan Companies, Inc., Putnam Investments, Inc. and its two wholly
owned registered investment advisers (Putnam Investment Management,
Inc. and The Putnam Advisory Company, Inc.) and the Putnam New
Opportunities Fund (the "Fund") (collectively, the "Putnam
Entities"). According to the Schedule 13G, none of the Putnam
Entities have the sole power to vote or dispose of any such shares of
Class A Common Stock nor (except the Fund with respect to 506,250 of
such shares) the shared power to vote any of such shares and all of
the Putnam Entities have the shared power to dispose of such shares.
(12) Consists of 214,843 shares of Class B Common Stock and 1,000 shares
of Class A Common Stock owned directly by Ms. Farbman, 1,317,859
shares of Class B Common Stock and 14,000 shares of Class A Common
Stock held by Robert Price and Eileen Farbman, as joint tenants (see
also footnote 2), 761,718 shares of Class B Common Stock held by
Eileen Farbman and Leo Farbman, as joint tenants, 761,718 shares of
Class B Common Stock held by Eileen Farbman and Alexandra Farbman, as
joint tenants and 761,718 shares of Class B Common Stock held by
Eileen Farbman as custodian for Leo Farbman UGTMA until age 21 and
761,718 shares of Class B Common Stock held by Eileen Farbman as
custodian for Alexandra Farbman UGTMA until age 21 (see also
footnotes 17 and 18). Eileen Farbman is the daughter of Robert Price.
(13) Consists of 3,449,619 shares of Class A Common Stock.
(14) Consists of 2,055,988 shares of Class B Common Stock, 598,491 shares
of Class A Common Stock currently outstanding and 621,500 shares of
Class A Common Stock currently issuable upon conversion of 6,000
shares of the Convertible Preferred Stock.
(15) Consists of 3,317,836 shares of Class A Common Stock currently
issuable upon conversion of 30,000 shares of the Convertible
Preferred Stock.
(16) Consists of 1,799,250 shares of Class A Common Stock currently
outstanding and 1,819,610 shares of Class B Common Stock issuable
pursuant to warrants that are currently exercisable. See also
footnote 2. The per share price at which shares may be purchased
pursuant to the warrants is $5.01 subject to adjustment.
(17) Consists of 761,718 shares of Class B Common Stock held by Eileen
Farbman and Leo Farbman, as joint tenants and 761,718 shares of Class
B Common Stock held by Eileen Farbman as custodian for Leo Farbman
UGTMA until age 21 (see also footnote 12). Leo Farbman is the son of
Eileen Farbman and grandson of Robert Price.
(18) Consists of 761,718 shares of Class B Common Stock held by Eileen
Farbman and Alexandra Farbman, as joint tenants and 761,718 shares of
Class B Common Stock held by Eileen Farbman as custodian for
Alexandra Farbman UGTMA until age 21 (see also footnote 12).
Alexandra Farbman is the daughter of Eileen Farbman and granddaughter
of Robert Price.
(19) Consists of 2,090,250 shares of Class A Common Stock.
</TABLE>
Certain Relationships and Related Transactions
McCaw Registration Rights
AT&T/McCaw is a principal stockholder of the Company, owning
3,925,781 shares of Class B Common Stock and 2,611,763 shares of Class A
Common Stock. As of February 9, 1996, the Company has agreed, and [Harvard
Private Capital], Spectrum, THL Equity Fund, THL-CCI Investors Limited
Partnership ("THL-CCI"), The Public School Employes' Retirement System
("PSERS") and Dominion Cellular, Inc. ("Dominion") consented, to provide McCaw
with certain registration rights (the "McCaw Registration Rights"). The McCaw
Registration Rights are substantially the same as the Registration Rights
(described below), except that McCaw will be entitled to one demand
registration and participation rights in registrations proposed to be effected
by the Company.
Other Registration Rights
On February 9, 1996, the Company, Spectrum, THL Equity Fund,
THL-CCI, PSERS and Dominion entered into an Amended and Restated Registration
Rights Agreement (the "Registration Rights"), which superseded and canceled
the Amended and Restated Registration Rights Agreement dated as of December
28, 1995 among the same parties. The agreement provides, subject to certain
limitations, that Spectrum will have the right to one demand registration,
Harvard Private Capital will have the right to two demand registrations, THL
Equity Fund (together with THL-CCI) will have the right to two demand
registrations and PSERS will have the right to two demand registrations. The
minimum amount of securities that must be registered pursuant to these demand
rights is, for each of Harvard, THL and PSERS, 20% of the Harvard registrable
securities, the THL registrable securities and the PSERS registrable
securities (or a lesser amount of shares whose aggregate offering price is
expected to be at least $10 million), respectively, or, for Spectrum, 40% of
the Spectrum registrable securities. In each demand registration, holders of
registrable securities other than the holders initiating the registration may
include their securities in such registration, subject to certain notice
requirements. The Registration Rights further provide, subject to certain
limitations, that in the event the Company proposes to register any of its
equity securities in connection with a public offering, the Company will use
its best efforts to have such registration cover all of the registrable
securities, subject to certain notice requirements.
Compensation of Executive Officers
The following table sets forth the compensation earned in 1994,
1995, and 1996 by the Company's chief executive officer and each other
executive officer whose total annual salary and bonus exceeded $100,000 for
the year ended December 31, 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Number of
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus(1) Options(2) Compensation
- ------------------------------------------ ---- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Robert Price, President................... 1996 $325,000 $325,000 0 $0
1995 237,500 210,000 180,664 0
1994 0 0 708,008 0
Stuart B. Rosenstein, Vice President,
Chief Financial Officer................... 1996 $201,218 $135,000 43,750 $0
1995 160,000 105,000 153,320 0
1994 136,750 45,150 146,484 0
Steven Price, Chief Operating Officer
and Senior Vice President................. 1996 $195,609 $135,000 0 $0
1995 160,000 105,000 153,320 0
1994 136,750 20,150 146,484 0
</TABLE>
Option/SAR Grants in Last Fiscal Year
Individual Grants
<TABLE>
<CAPTION>
Percent of
Total
Number of Options/ Potential Realizable
Securities SARs Value at
Underlying Granted to Assumed Annual
Options/ Employees Exercise or Rates of Stock
SARs in Fiscal Base Price Expiration Price Appreciation
Name Granted(#) 1996 ($/Share) Date For Option Term
- ------------------------ ---------- ---------- ----------- ---------- ------------------------
5% 10%
-------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert Price............ 0 0% -- -- -- --
Steven Price............ 43,750(3) 13% $10.80 9/10/06 $297,063 $752,938
Stuart B. Rosenstein.... 0 0% -- -- -- --
<FN>
_______________
(1) Bonuses for 1995 were paid in April 1996 and bonuses for 1996 were
paid in February 1997.
(2) The stock options have been restated to give effect to all stock
splits.
(3) All of such options were granted in September 1996 and such options
vest 1/3 per year until fully vested in September 1999. Such options
have stock-for-stock exercise and tax withholding features, which
allow the holder, in lieu of paying cash for the exercise price and
any tax withholding, to have the Company commensurately reduce the
number of shares to which he would otherwise be entitled upon
exercise of such options.
</TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of
Securities
Underlying Value of
Unexercised Unexercised
Options/SARs In-the-Money
Shares at December 31, Options/SARs
Acquired 1996 at December 31, 1996
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
- ------------------------- ----------- -------- --------------- --------------------
<S> <C> <C> <C> <C>
Robert Price............. 0 0 854,492/0 $6,515,868/$0
Stuart B. Rosenstein..... 0 0 202,148/141,406 $1,521,295/$697,616
Steven Price............. 0 0 202,148/97,656 $1,521,295/$666,991
</TABLE>
Compensation Committee Interlocks and Insider Participation
During all of 1996, the Compensation Committee was comprised of
Mr. Applegate.
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 "1934 Act"), requires the Company's executive officers and
Directors, and beneficial owners of more than 10% of the Class A Common Stock
of the Company, to file initial reports of ownership and reports of changes in
ownership with the SEC. Executive officers and Directors are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
Directors, the Company noted that no individual who, at any time during 1996,
was a Director, officer or beneficial owner of more than 10% of the Class A
Common Stock of the Company failed to file the reports required by Section
16(a) of the 1934 Act on a timely basis, except that (i) Stuart Rosenstein filed
a Form 4 in November 1996, that was not timely filed, reporting two
purchases and (ii) Price Communications filed a Form 4 during April 1997,
that was not timely filed, reporting seven purchases during 1996.
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
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 the Securities Act of 1933 or the
1934 Act, except to the extent that the Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed
under such acts.
The Compensation Committee of the Board of Directors is
responsible for administering the executive compensation plans and programs of
the Company and for making recommendations to the Board of Directors regarding
the compensation of and benefits provided to the Chief Executive Officer and
the other executive officers. Each member of the Committee, whose names are
set forth below this report, is an independent director of the Company.
Compensation Policies
In establishing compensation and benefit levels for executive
officers, the Committee seeks to (1) attract and retain individuals of
superior ability and managerial talent (2) motivate executive officers to
increase Company performance primarily for the benefit of its stockholders but
also for the benefit of its customers and other constituencies and (3) reward
executives for superior individual contributions to the achievement of the
Company's business objectives. To these ends, the Company's executive
compensation package consists of salary, variable annual cash compensation and
stock-based long-term incentive awards.
Salary levels generally are determined based on the Committee's
subjective assessment of prevailing levels among the Company's competitors. At
higher levels, however, individual and Company performance will be given
greater weight, along with competitive considerations.
Annual bonuses are determined based on the Company's
performance during the previous year, focusing particularly on growth in
"pops", penetration and cash flow (measured by earnings before interest,
taxes, depreciation and amortization ("EBITDA"). The Committee has discretion
also to consider individual performance in determining annual bonuses.
Stock-based incentives, at the present time consisting of stock
options granted at 100% of the stock's fair market value on the grant date,
constitute the long-term portion of the Company's executive compensation
package. Stock options provide an incentive for executives to increase the
Company's stock price and therefore, the return to the Company's stockholders.
The number and timing of stock option grants is decided by the Committee based
on its subjective assessment, with the advice of independent consultants, of
prevailing levels of similar compensation among the Company's competitors.
Compensation of the Chief Executive Officer
Effective July 1, 1995, the Committee recommended, and the
Board approved, increasing Robert Price's base annual salary from $100,000 to
$325,000. The Committee's recommendation as to base salary in this regard was
based primarily on, and the Committee credited Mr. Price with, (i) the
Company's successful acquisition of certain cellular systems in 1995, (ii)
improvements in the results of operations of such systems since the Company's
acquisition thereof, (iii) the Company's pending acquisitions, (iv) the
Company's successful completion of certain financings during 1995 and (v)
successful completion of certain financings during 1995 by the Company's
wholly owned subsidiary, PriCellular Wireless Corporation. In addition, in
April 1996, based on the foregoing accomplishments, the Committee
recommended, and the Board approved, a bonus of $210,000 based on Mr.
Price's performance during 1995.
During 1996, Mr. Price made similar contributions to the
Company. Accordingly, the Committee recommended, and the Board approved,
maintaining Mr. Price's annual salary at $325,000, and the payment of a bonus
of $325,000 based on Mr. Price's performance during 1996.
BRION B. APPLEGATE
STOCK PRICE PERFORMANCE GRAPH
The Stock Price Performance Graph below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the 1934 Act, except to the extent the Company specifically incorporates
this information by reference, and shall not otherwise be deemed filed
under such Acts.
The graph below compares cumulative total returns of the
Company, the S&P 500 Index and a peer group consisting of six publicly traded
cellular telephone companies (described below). The stock price performance
shown on the graph below is not necessarily indicative of future price
performance.
[GRAPH]
12/22/94 12/30/94 12/29/95 12/31/96
-------- -------- -------- --------
PriCellular Corporation 100.00 102.63 171.05
S&P 500 Index 100.00 99.91 137.45
Peer Group Index 100.00 102.99 98.48
Note: Assumes $100 invested on 12/22/94 in PriCellular Corporation shares of
Class A Common Stock, the S&P 500 Index and the Peer Group Index. The Peer
Group Index was prepared by Standard & Poor's Compustat specifically for the
Company and consists of AirTouch Communications, Inc., United States Cellular
Corporation, Centennial Cellular Corp., Vanguard Cellular Systems, Inc.,
Rogers Cantel Mobile Communications Inc. and Cellular Communications of Puerto
Rico, Inc.
2. Increase in Number of Authorized Shares of Class B Common Stock
At the meeting, the stockholders will be asked to approve an
amendment to the Company's Amended and Restated Certificate of Incorporation
to increase the number of authorized shares of Class B Common Stock from
20,000,000 to 50,000,000. Currently, there are 19,170,736 shares of Class B
Common Stock outstanding.
The Board has determined that it is advisable to increase the
authorized number of shares of Class B Common Stock in order to ensure that
the Company has an adequate number of authorized and unissued shares of Class
B Common Stock for issuance in connection with the exercise of outstanding
warrants and in connection with stock splits. The availability of additional
shares for issuance, without the delay and expense of obtaining the approval
of stockholders at a special meeting, will afford the Company greater
flexibility.
The Company currently has no plans to issue any additional
shares of Class B Common Stock other than shares that may be issued in
connection with (i) the exercise of outstanding warrants and (ii) future stock
splits. If approved, the increased number of authorized shares of Class B
Common Stock will be available from time to time for such purposes and
consideration as the Board of Directors may approve and no further vote of
stockholders of the Company will be required, except under the rules of any
national securities exchange on which shares of the Company are at the time
listed.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO
THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF CLASS B COMMON STOCK, WHICH IS DESIGNATED
AS PROPOSAL NO. 2 ON THE ENCLOSED PROXY CARD.
Solicitation of Proxies
The cost of soliciting proxies for the 1997 Annual Meeting will
be borne by the Company. In addition to solicitation by mail, solicitations
may also be made by personal interview, fax and telephone. Arrangements will
be made with brokerage houses and other custodians, nominees and fiduciaries
to send proxies and proxy material to their principals, and the Company will
reimburse them for expenses in so doing. Consistent with the Company's
confidential voting procedure, directors, officers and other regular employees
of the Company, as yet undesignated, may also request the return of proxies by
telephone or fax, or in person.
Annual Report
The Annual Report of the Company for the year ended December
31, 1996 is expected to be mailed to all stockholders on or about April 15,
1997.
Stockholder Proposals
In general, stockholder proposals intended to be presented at
an Annual Meeting, including proposals for the nomination of directors, must
be received by the Company at least 120 days in advance of the day and month
of the last proxy statement mailed out for any annual meeting to be considered
for the 1998 Annual Meeting. The requirements for submitting such proposals
are set forth in the Company's Bylaws.
Stockholder proposals intended to be considered for inclusion
in the proxy statement for presentation at the 1998 Annual Meeting must be
received by the Company by December 16, 1997.
Other Matters
The Board of Directors does not know of any matter other than
those described in this proxy statement that will be presented for action at
the meeting. If other matters properly come before the meeting, the persons
named as proxies intend to vote the shares they represent in accordance with
their judgment.
PROXY PROXY
PRICELLULAR CORPORATION
Proxy Solicited by Board of Directors
for the Annual Meeting of Stockholders on May 14, 1997
The undersigned stockholder of PRICELLULAR CORPORATION hereby appoints
Robert Price and Kim I. Pressman, and each of them, the attorneys and proxies
of the undersigned, with full power of substitution, to vote on behalf of the
undersigned all the shares of Class A Common Stock, Class B Common Stock or
Series A Cumulative Convertible Preferred Stock of PRICELLULAR CORPORATION
which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of the Company, to be held at the offices of Davis Polk &
Wardwell, 450 Lexington Avenue, New York, New York on Wednesday, May 14, 1997,
at 10:00 a.m. and at all adjournments thereof, hereby revoking any proxy
heretofore given with respect to such Class A Common Stock.
IMPORTANT - This Proxy must be signed and dated on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTION TO THE CONTRARY IS INDICATED, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER
USING DARK INK ONLY
1. Election of Directors:
Nominees: Robert Price, Kim I. Pressman, Steven Price, Brion B. Applegate
and Scott M. Sperling
For Withheld For All Except
[ ] [ ] [ ]
For all except nominees written in below
- -------------------------------------------------------
2 Approval of the amendment to the Company's Amended and Restated
Certification of Incorporation to increase the number of authorized
shares of Class B Common Stock, par value $.01 per share, from
20,000,000 to 50,000,000 shares.
For Against Abstain
[ ] [ ] [ ]
3. In their discretion, the proxies are authorized to transact such other
business as may properly come before the meeting and any and all
adjournments thereof.
IMPORTANT: Please sign your name or names exactly as shown hereon and date
your proxy in the blank space provided below. For joint accounts, each joint
owner must sign. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized officer.
PLEASE SIGN HERE AND RETURN PROMPTLY
____________________________________
Signature
____________________________________
Signature
Dated:___________________, 1997
