<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
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PageMart Wireless, Inc.
- --------------------------------------------------------------------------------
(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)(l) 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:
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1
<PAGE> 2
PageMart Logo
3333 LEE PARKWAY, SUITE 100
DALLAS, TEXAS 75219
February 16, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders to
be held at 9:00 a.m., local time, April 8, 1998, in the Board Room on the 9th
floor of the Company's offices at 3333 Lee Parkway, Dallas, Texas 75219. The
formal Notice of Annual Meeting of Stockholders and Proxy Statement are
attached. I hope that you will be able to attend and participate in the meeting,
at which time I will have the opportunity to review the business and operations
of PageMart Wireless, Inc.
The matters to be acted upon by our stockholders are set forth in the
Notice of Annual Meeting of Stockholders. It is important that your shares be
represented and voted at the meeting. Accordingly, after reading the attached
Proxy Statement, please sign, date and return the enclosed proxy card. Your vote
is important regardless of the number of shares you own.
Sincerely yours,
/s/ JOHN D. BELETIC
John D. Beletic
Chairman and Chief Executive Officer
<PAGE> 3
PageMart Logo
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 8, 1998
February 16, 1998
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of PageMart
Wireless, Inc., a Delaware corporation (the "Company"), will be held in the
Board Room on the 9th floor of the Company's offices at 3333 Lee Parkway,
Dallas, Texas 75219 on April 8, 1998, at 9:00 a.m., local time, for the
following purposes:
1. To elect a Board of Directors consisting of seven members.
2. To ratify the appointment of Arthur Andersen LLP as the independent
auditors of the Company to serve as such at the pleasure of the
Board of Directors.
3. To consider and vote upon any other matter that may be properly
brought before the meeting.
Only stockholders of record, as shown by the transfer books of the Company,
at the close of business on February 13, 1998 are entitled to notice of and to
vote at the Annual Meeting.
A list of stockholders entitled to vote at the Annual Meeting will be
available for examination by any stockholder for any proper purpose during
normal business hours at the offices of the Company for a period of at least ten
(10) days preceding the Annual Meeting.
The Board of Directors recommends that you vote FOR the Board's nominees
for director and the approval of the appointment of the independent auditors.
By Order of the Board of Directors,
/s/ FREDERICK G. ANDERSON
Frederick G. Anderson
Vice President, General Counsel and
Secretary
PLEASE FILL IN, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE
PROVIDED AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU MAY DO SO
IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT.
<PAGE> 4
[PAGEMART LOGO]
PROXY STATEMENT
DATED FEBRUARY 16, 1998
ANNUAL MEETING OF STOCKHOLDERS
APRIL 8, 1998
The accompanying proxy is solicited by the Board of Directors (the "Board")
of PageMart Wireless, Inc. (the "Company") to be voted at the Annual Meeting of
Stockholders to be held April 8, 1998 (the "Annual Meeting"), and any
adjournments thereof. When such proxy is properly executed and returned, the
shares it represents will be voted at the meeting as directed. If no
specification is indicated, the shares will be voted in accordance with the
recommendation of the Board with respect to each matter submitted to the
Company's stockholders for approval. Abstentions will not be voted, but will be
counted for determining the presence of a quorum. Broker non-votes will not be
counted for any purpose. Any stockholder giving a proxy has the power to revoke
it prior to its exercise by notice of revocation to the Company in writing, by
voting in person at the Annual Meeting or by execution of a subsequent proxy;
provided, however, that such action must be taken in sufficient time to permit
the necessary examination and tabulation of the subsequent proxy or revocation
before the vote is taken.
The shares entitled to vote at the meeting consist of shares of Class A
Convertible Common Stock of the Company (the "Common Stock"), with each share
entitling the holder of record to one vote. At the close of business on February
13, 1998, the record date for the Annual Meeting, there were outstanding
34,172,443 shares of Common Stock. This Proxy Statement and the accompanying
form of proxy are first being sent to stockholders on or about February 20,
1998.
In addition to the use of the mails, solicitation may be made by employees
of the Company by telephone, mailgram, facsimile, telegraph, cable and personal
interview. The Company shall bear all expense for the solicitation of proxies
and has not retained a solicitation firm.
PROPOSAL ONE: ELECTION OF DIRECTORS
NOMINEES AND DIRECTORS
Seven members of the Board will be elected at the Annual Meeting. Directors
elected at the Annual Meeting will serve until the next Annual Meeting or until
their successors are elected and qualified. The seven nominees receiving the
greatest number of votes cast by the holders of the Common Stock entitled to
vote at the meeting will be elected directors of the Company (assuming a quorum
is present). The Company has no reason to believe that any nominee of the Board
will be unable to serve if elected. A vote FOR the nominees includes
discretionary authority to vote for a substitute nominee named by the Board if
any of the nominees becomes unable or unwilling to serve.
The following persons have been nominated by the Board for election to the
Board of Directors:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
John D. Beletic........................ 46 Chairman and Chief Executive Officer
Robert H. Niehaus...................... 42 Director
Guy L. de Chazal(1).................... 50 Director
Arthur Patterson(1).................... 54 Director
Alejandro Perez Elizondo(2)............ 48 Director
Leigh J. Abramson(1)(2)................ 29 Director
Pamela D.A. Reeve(1)(2)................ 48 Director
</TABLE>
- ---------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
<PAGE> 5
John D. Beletic, Chairman and Chief Executive Officer. Mr. Beletic joined
the Company as President and Director in March 1992. Mr. Beletic became Chief
Executive Officer of the Company in February 1994 and Chairman of the Company's
Board of Directors in August 1994. In November 1997, Mr. Beletic became the
Chairman and Chief Executive Officer when N. Ross Buckenham assumed the position
of President. Prior to joining the Company, Mr. Beletic spent a year in venture
capital, and he served for five years as President and Chief Executive Officer
of The Tigon Corporation ("Tigon"), a leading voice mail service provider. Tigon
was acquired by Ameritech Development Corporation, a wholly-owned subsidiary of
American Information Technologies Corporation in 1988. Before joining Tigon, Mr.
Beletic was Senior Vice President of Operations and Chief Financial Officer for
five years with VMX, Inc. ("VMX"), a manufacturer of voice mail systems. Mr.
Beletic earned his bachelor's degree in finance from Cincinnati's Xavier
University and his master's degree in business administration from the Harvard
Business School. Mr. Beletic currently serves as a director of Digital Sound
Corporation. Within the paging industry, Mr. Beletic currently serves as a
director of PCIA, the industry trade association, and President of the Paging
Leadership Association.
Robert H. Niehaus, Director. Mr. Niehaus has been a Director of the Company
since February 1998. He has been a Managing Director of Morgan Stanley & Co.
Incorporated ("Morgan Stanley") since 1990. He serves as a director of numerous
companies including American Italian Pasta Company, Silgan Holdings, Inc., Fort
James Corporation, Waterford Wedgwood UK, plc (of which he is Chairman) and
several private companies. He is a Managing Director and a director of the
general partner of The Morgan Stanley Leveraged Equity Fund II, L.P. ("MSLEF
II") and of the managing general partner of the general partner of Morgan
Stanley Capital Partners III, L.P. ("MSCP III"). Mr. Niehaus was designated by
MSLEF II pursuant to the Amended and Restated Stockholders Agreement among the
Company and certain stockholders of the Company dated as of May 10, 1996, as
amended (the "Stockholders Agreement"). See "Certain Relationships and Related
Transactions -- Election of Directors."
Guy L. de Chazal, Director. Mr. de Chazal has been a Director of the
Company since June 1989. Mr. de Chazal is President and a director of the
managing general partner of the general partner of Morgan Stanley Venture
Capital Fund, L.P. ("MSVCF") and Morgan Stanley Venture Capital Fund II, L.P.
("MSVCF II") and is a Managing Director of Morgan Stanley. Mr. de Chazal is also
a director of several private companies. Mr. de Chazal was designated by MSVCF
pursuant to the Stockholders Agreement. See "Certain Relationships and Related
Transactions -- Election of Directors."
Arthur Patterson, Director. Mr. Patterson has been a Director of the
Company since June 1989 and a Managing Partner of Accel Partners, a venture
capital company, since 1984. Mr. Patterson is also a director of VIASOFT and the
G.T. Global Group of Investment Companies as well as several private software
and telecommunications companies. Mr. Patterson was designated by Accel Partners
pursuant to the Stockholders Agreement. See "Certain Relationships and Related
Transactions -- Election of Directors."
Alejandro Perez Elizondo, Director. Mr. Perez has been a Director of the
Company since August 1994. Since 1987, Mr. Perez has been associated with
Pulsar, a diversified Mexican company with interests in the insurance,
agriculture, telecommunications, finance and other industries, and is currently
Vice President of Diversification of Pulsar Internacional, S.A. de C.V. Mr.
Perez is also a director of Ionica L3 Ltd. (a public telephone services company
located in U.K.), Novaweb Technologies, Inc. (a California modem manufacturing
company), Encanto Networks Inc. (a California internet company), Fomento
Empresarial Regiomontano, S.A. de C.V. (a Mexico-based holding company with
investments in telecommunications companies), and Merkafon (a Mexico-based
communications engineering company).
Leigh J. Abramson, Director. Mr. Abramson has been a Director of the
Company since August 1994. He is currently a Vice President of Morgan Stanley
and an officer of the general partner of MSLEF II and of the general partner of
the general partner of MSCP III. Mr. Abramson has been with Morgan Stanley since
1990, first in the Corporate Finance Division and, since 1992, in the Merchant
Banking Division. Mr. Abramson is also a Director of Silgan Holdings and
Jefferson Smurfit Corporation. Mr. Abramson was designated by MSCP III pursuant
to the Stockholders Agreement. See "Certain Relationships and Related
Transactions -- Election of Directors."
2
<PAGE> 6
Pamela D. A. Reeve, Director. Ms. Reeve was elected Director of the Company
in April 1996. Ms. Reeve is currently President, Chief Executive Officer and
Director of Lightbridge, Inc. ("Lightbridge") and has been with Lightbridge
since 1989. Lightbridge develops and manages software used by wireless
telecommunications companies across the United States to support sales and
marketing applications. Prior to joining Lightbridge, Ms. Reeve spent eleven
years at The Boston Consulting Group, with senior operating responsibility for
the firm's Boston office. Prior to joining The Boston Consulting Group, Ms.
Reeve worked with the National Endowment for the Humanities managing educational
projects and with real estate development and manufacturing firms, primarily in
operations and marketing. Ms. Reeve is also a director of Natural Microsystems,
Inc.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Company's Board of Directors held four meetings in 1997. All of the
directors attended 75% or more of the total number of meetings of the Board and
committees of the Board on which they served, except Mr. Perez, who attended
two-thirds of such meetings.
The Audit Committee of the Board recommends the firm to be employed as the
Company's independent public accountants and reviews the scope of the audit and
audit fees. In addition, the Audit Committee consults with the independent
auditors with regard to the plan of audit, the audit report and the management
letter, and confers with the independent auditors with regard to the adequacy of
internal accounting controls, as appropriate, out of the presence of management.
The members of the Audit committee are Messrs. Abramson and Perez and Ms. Reeve.
The Audit Committee held two meetings in 1997.
The Compensation Committee of the Board is charged with reviewing executive
compensation and administering the Company's Stock Option Plan (as defined
herein). During 1997, its members were Messrs. de Chazal and Patterson and Mr.
Frank Sica. Mr. Sica resigned as a director and member of the Compensation
Committee in February 1998. Ms. Reeve and Mr. Abramson were elected members of
the Committee effective January 31, 1998. Members of the Compensation Committee
held four meetings in 1997.
The Board of the Company does not have a nominating committee.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of Common Stock as of January 31, 1998 (i) by each person known by the
Company to own beneficially more than 5% of the outstanding Common Stock, (ii)
by each director of the Company, (iii) by the chief executive officer and each
of the four most highly compensated officers other than the chief executive
officer (the "Named Executive Officers"), and (iv) by all executive officers and
directors of the Company as a group. Except as otherwise indicated, each named
person has voting and investment power over the listed shares, exercised solely
by the named person or shared with a spouse.
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
CLASS A CLASS A
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK
------------------------------------ ------------ ------------
<S> <C> <C>
The Morgan Stanley Leveraged Equity Fund II, L.P.(1)........ 8,476,518 24.8%
1221 Avenue of the Americas
New York, NY 10020
Morgan Stanley Capital Partners III, L.P.(1)................ 5,072,672 14.9%
1221 Avenue of the Americas
New York, NY 10020
Morgan Stanley Venture Capital Fund, L.P.(2)................ 2,154,071 6.3%
1221 Avenue of the Americas
New York, NY 10020
Other Morgan Stanley-sponsored limited partnerships(3)...... 842,719 2.5%
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
CLASS A CLASS A
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK
------------------------------------ ------------ ------------
<S> <C> <C>
Mellon Bank, N.A., as Trustee for First Plaza Group
Trust(4).................................................. 3,214,286 9.4%
One Mellon Plaza
Pittsburgh, PA 15258
Accel Telecom L.P.(5)....................................... 1,542,300 4.5%
One Embarcadero Center, Ste. 3820
San Francisco, CA 94111
Accel III L.P.(5)........................................... 1,416,200 4.1%
One Embarcadero Center, Ste. 3820
San Francisco, CA 94111
Accel Investors' 89 L.P.(5)................................. 91,500 *
One Embarcadero Center, Ste. 3820
San Francisco, CA 94111
Pulsar...................................................... 2,142,857 6.3%
Av. Roble, No. 300. Mezzanine
Edificio Torre Alta
Garza Garcia, N.L
Mexico C.P. 66265
Directors and Named Executive Officers:
John D. Beletic(6)........................................ 651,072 1.9%
N. Ross Buckenham(7)...................................... 43,849 *
Douglas S. Glen(8)........................................ 110,415 *
Sandra D. Neal(9)......................................... 101,263 *
Paul L. Turner(10)........................................ 67,327 *
Robert H. Niehaus(1)(3)................................... 13,811,298 40.4%
Guy L. de Chazal(2)(3).................................... 2,734,682 8.0%
Arthur Patterson(5)(11)................................... 3,050,000 8.9%
Alejandro Perez Elizondo.................................. -- *
Leigh J. Abramson(1)(3)................................... 13,811,298 40.4%
Pamela D.A. Reeve(12)..................................... 16,666 *
All directors and executive officers as a group(13)....... 21,143,821 60.1%
</TABLE>
- ---------------
* Denotes less than 1%.
(1) Each of these entities is an investment partnership for which Robert H.
Niehaus, a Director of the Company, is a director of the entity controlling
such partnership. Each of these entities is also an investment partnership
for which Leigh J. Abramson is an officer of the entity controlling such
partnership. Robert H. Niehaus and Leigh S. Abramson each disclaim
beneficial ownership of such shares. The general partner of MSLEF II and
the managing general partners of the respective general partners of MSCP
III and each of the investment partnerships referred to in footnotes (2)
and (3) below are each wholly-owned subsidiaries of Morgan Stanley, Dean
Witter, Discover & Co. ("MSDWD & Co.").
(2) This entity is an investment partnership for which Guy L. de Chazal, a
Director of the Company, is a director of the entity controlling such
partnership and a general partner of the general partner of such
partnership. Guy L. de Chazal disclaims beneficial ownership of such
shares.
(3) Includes 372,662 shares owned by MSVCF II, 172,569 shares owned by Morgan
Stanley Capital Investors, L.P. ("MSCI"), 107,123 shares owned by Morgan
Stanley Venture Investors, L.P. ("MSVI"), 100,826 shares owned by Morgan
Stanley Venture Capital Fund II, C.V. ("MSVC II") and 89,539 shares owned
by MSCP III 892 Investors, L.P. ("MSCP 892"). Each of MSCI and MSCP 892 is
an investment partnership for which the relationships described in footnote
(1) above are applicable and Robert H. Niehaus and Leigh J. Abramson each
disclaim beneficial ownership of shares held by such entities. Each of
MSVCF II, MSVI and MSVC II is an investment partnership for which the
relationships described in footnote (2) above are applicable and Guy L. de
Chazal disclaims beneficial ownership of shares held by such entities.
(4) Mellon Bank, N.A. ("Mellon"), acts as the trustee for First Plaza Group
Trust ("First Plaza"), a trust under and for the benefit of certain
employee benefit plans of General Motors Corporation ("GM") and its
subsidiaries. These shares may be deemed to be owned beneficially by
General Motors Investment Management Corporation ("GMIMCo"), a wholly-owned
subsidiary of GM.
4
<PAGE> 8
GMIMCo's principal business is providing investment advice and investment
management services with respect to the assets of certain employee benefit
plans of GM and its subsidiaries and with respect to the assets of certain
direct and indirect subsidiaries of GM and associated entities. GMIMCo's
business address is 767 Fifth Avenue, New York, New York. GMIMCo is serving
as First Plaza's investment manager with respect to these shares and in
that capacity it has the sole power to direct the trustee as to the voting
and disposition of these shares. Because of Mellon's limited role,
beneficial ownership of the shares by Mellon is disclaimed.
(5) Each of these entities is an investment partnership for which Arthur
Patterson, a director of the Company, is a general partner.
(6) Includes 347,200 shares of Common Stock issued pursuant to the Stock Option
Plan and the Company's Stock Issuance Plan (both as defined herein).
Includes 291,669 stock options which are exercisable within the 60-day
period commencing February 1, 1998 pursuant to the Stock Option Plan.
(7) Includes 43,666 stock options which are exercisable within the 60-day
period commencing February 1, 1998 pursuant to the Stock Option Plan.
(8) Includes 60,415 stock options which are exercisable within the 60-day
period commencing February 1, 1998 pursuant to the Stock Option Plan.
(9) Includes 88,415 stock options which are exercisable within the 60-day
period commencing February 1, 1998 pursuant to the Stock Option Plan.
(10) Includes 65,498 stock options which are exercisable within the 60-day
period commencing February 1, 1998 pursuant to the Stock Option Plan.
(11) Includes shares of Common Stock held by the entities described in Note 5 in
which Arthur Patterson, a Director of the Company, may be deemed to have
beneficial ownership. Mr. Patterson disclaims beneficial ownership of such
shares except to the extent of his pecuniary interest therein.
(12) Includes 16,666 stock options which are exercisable within the 60-day
period commencing February 1, 1998 pursuant to the 1996 Nonqualified Stock
Option Plan for Non-Employee Directors.
(13) Includes 1,011,779 stock options which are exercisable within the 60-day
period commencing February 1, 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transactions
The Company was organized in 1989 by Roger D. Linquist, MSVCF, Accel
Telecom L.P., Accel Partners L.P. and Frances W. Hopkins. Through the
acquisition of preferred stock in 1991 and 1993, and the subsequent conversion
of such preferred stock into voting Common Stock (together with any shares of
non-voting common stock, "Capital Stock"), MSLEF II became the owner of a
majority of the voting power in the Company. The general partner of MSLEF II and
the managing general partner of the general partner of MSVCF are both
wholly-owned subsidiaries of MSDWD & Co. Three of the Directors of the Company
are employees of Morgan Stanley & Co. Incorporated (a wholly-owned subsidiary of
MSDWD & Co.), which acted as placement agent for the offering of the 11 1/4%
Senior Subordinated Discount Notes due 2008 issued by the Company on January 28,
1998, and received compensation from the Company in the amount of $8.1 million
for acting in such capacity. In addition, Morgan Stanley & Co. Incorporated
acted as dealer manager and solicitation agent for the Company's solicitation of
consents to the amendment of the indenture relating to its 15% Senior Discount
Notes due 2005 and the offer to purchase the outstanding 12 1/4% Senior
Subordinated Discount Notes due 2003 of PageMart, Inc.
As of January 31, 1998, John D. Beletic, Chairman and Chief Executive
Officer of the Company, was indebted to the Company in the amount of $309,000
under five promissory notes. The first promissory note (the "First Note") was
issued in January 1994 for $97,800 in connection with a stock option exercise by
Mr. Beletic and bears interest at the rate of 3.55% per annum. Interest on the
outstanding balance is due annually beginning on January 28, 1995. The
outstanding principal balance on the First Note is due on January 28, 1999. The
second promissory note (the "Second Note") was issued in November 1994 and bears
interest at the rate of 7% per annum. At January 31, 1998, $125,000 was
outstanding under the Second Note, which Mr. Beletic repaid in full on February
1, 1998. The third promissory note (the "Third Note") was issued in May 1995 for
$21,000 in connection with the purchase of Common Stock by Mr. Beletic and bears
interest at the rate of 6.9% per annum. Interest on the outstanding principal is
due annually beginning on May 11, 1996. The outstanding principal balance on the
Third Note is due on May 11, 1999. The fourth promissory note (the "Fourth
Note") was issued in September 1997 for $16,300 in connection with a stock
5
<PAGE> 9
option exercise by Mr. Beletic and bears interest at the rate of 5.81% per
annum. Interest on the outstanding balance is due annually beginning on
September 22, 1998. The outstanding principal balance on the Fourth Note is due
September 22, 2000. The fifth promissory note (the "Fifth Note") was issued in
January 1998 for $48,900 in connection with a stock option exercise by Mr.
Beletic and bears interest at the rate of 5.7% per annum. Interest on the
outstanding balance is due annually beginning on January 14, 1999. The
outstanding principal balance on the Fifth Note is due on January 14, 2001. The
First Note, the Third Note, the Fourth Note and the Fifth Note are all secured
by the Common Stock owned by Mr. Beletic.
As of January 31, 1998, Douglas H. Kramp, Executive Vice President,
Strategic Business Units of the Company, was indebted to the Company in the
amount of $65,998 under two promissory notes. The first promissory note (the
"First Kramp Note") was issued in May 1995 for $56,000 in connection with the
purchase of Common Stock by Mr. Kramp and bears interest at the rate of 6.9% per
annum. Interest on the outstanding principal is due annually beginning on May
11, 1996. The outstanding principal balance on the First Kramp Note is due on
May 11, 1999. The second promissory note (the "Second Kramp Note") was issued in
December 1995 for $9,998 in connection with a stock option exercise by Mr. Kramp
and bears interest at the rate of 5.83% per annum. Interest on the outstanding
principal is due annually beginning on December 29, 1996. The outstanding
principal balance on the Second Kramp Note is due on December 29, 1999. The
First Kramp Note and the Second Kramp Note are both secured by the Common Stock
owned by Mr. Kramp.
As of January 31, 1998, G. Clay Myers, Vice President, Finance and Chief
Financial Officer of the Company, was indebted to the Company in the amount of
$132,800 under four promissory notes. The first promissory note (the "First
Myers Note") was issued in February 1994 for $48,900 in connection with a stock
option exercise by Mr. Myers and bears interest at the rate of 3.55% per annum.
Interest on the outstanding principal is due annually beginning on February 4,
1995. The outstanding principal balance on the First Myers Note is due on
February 4, 1999. The second promissory note (the "Second Myers Note") was
issued in May 1995 for $35,000 in connection with the purchase of Common Stock
by Mr. Myers and bears interest at the rate of 6.9% per annum. Interest on the
outstanding principal is due annually beginning on May 11, 1996. The outstanding
principal balance on the Second Myers Note is due on May 11, 1999. The third
promissory note (the "Third Myers Note") was issued in October 1997 for $16,300
in connection with a stock option exercise by Mr. Myers and bears interest at
the rate of 5.84% per annum. Interest on the outstanding principal is due
annually beginning on October 31,1998. The outstanding principal balance on the
Third Myers Note is due on October 31, 2000. The fourth promissory note (the
"Fourth Myers Note") was issued in January 1998 for $32,600 in connection with a
stock option exercise by Mr. Myers and bears interest at the rate of 5.7% per
annum. Interest on the outstanding principal is due annually beginning on
January 14, 1999. The outstanding principal balance on the Fourth Myers Note is
due on January 14, 2001. The First Myers Note, the Second Myers Note, the Third
Myers Note and the Fourth Myers Note are all secured by the Common Stock owned
by Mr. Myers.
On September 12, 1997, in connection with his promotion to the position of
President of the Company, the Company entered into an agreement with Ross
Buckenham providing for (i) payment to Mr. Buckenham of one half of his annual
base salary upon termination of his employment for any reason other than death,
disability, voluntary termination by Mr. Buckenham or termination for cause by
the Company, and (ii) payment to Mr. Buckenham of $100,000 to compensate him for
the expenses of moving his principal residence if his employment terminates for
any reason other than voluntary termination or termination for cause.
Election of Directors
Pursuant to the Amended and Restated Stockholders Agreement among the
Company and certain stockholders dated as of May 10, 1996, as amended (the
"Stockholders Agreement"), the Morgan Stanley Shareholders have the right to
designate and have elected one-half of the members of the Board for so long as
the total number of shares of Capital Stock of the Company owned by the Morgan
Stanley Shareholders constitutes at least 50% of the outstanding Capital Stock
of the Company. If such ownership falls below 50%, the number of directors that
the Morgan Stanley Shareholders will have the right to designate and have
6
<PAGE> 10
elected will be reduced to the number of directors which constitutes a
percentage representation on the Board equal to the Morgan Stanley Shareholders'
aggregate percentage ownership of the outstanding Capital Stock of the Company.
The rights of each of MSLEF II, MSCP III, MSVCF and MSVCF II to designate and
have elected one member of the Board of Directors terminates once the total
number of shares of Capital Stock of the Company owned by such investor falls
below 7.5%. However, each such stockholder will continue to have such rights if
its ownership of Capital Stock exceeds 2% and such stockholder has determined
that the continued possession of such rights is necessary or desirable in order
for such stockholder to qualify as a "venture capital operating company" within
the meaning of Department of Labor Regulation
Section 2510.3-101. MSVCF has made such a determination and continues,
therefore, to have the right to designate and have elected one director.
Accel Telecom L.P., Accel III, L.P. and Accel Investors 89, L.P.
(collectively, "Accel") together have the right to designate one director for
election to the Board of Directors so long as Accel owns at least 7.5% of the
outstanding Capital Stock of the Company.
The Morgan Stanley Shareholders, Accel, Pulsar, BT Investment Partners,
Inc., Toronto Dominion Capital Group, Ltd. and John D. Beletic have agreed to
vote all of their shares for all such designees.
So long as J.P. Morgan Capital Corporation owns no less than 4% of the
Capital Stock of the Company, the Company will permit a representative of such
holder to attend as an observer all meetings of the Board and all committees
thereof. Such representative is entitled to receive all written materials and
other information given to directors in connection with such meetings.
So long as the Morgan Stanley Shareholders hold securities representing at
least 10% of the outstanding Capital Stock, the Company is required to maintain
compensation and audit committees of its Board, each consisting of up to four
directors, of which the Morgan Stanley Shareholders are entitled to designate up
to two directors on each such committee. Accel and those members of the Board
who are not designated by the Morgan Stanley Shareholders are each entitled to
designate one director on each such committee.
Registration Rights
The Stockholders Agreement provides that the parties thereto (collectively,
the "Holders"), collectively have the right to "demand" an unlimited number of
registrations. Pursuant to these "demand" rights, Holders of Capital Stock (the
"Registrable Securities") may request in writing that the Company file a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), covering the registration of a number of shares equal to at
least three million shares of Capital Stock or a lesser number if such number
represents a majority of the Registrable Securities then outstanding. The
Company is obligated within ten days of the receipt thereof to give written
notice of such request to all Holders and to use its best efforts to effect as
soon as practicable the registration under the Securities Act of all Registrable
Securities that the Holders request to be registered within 20 days of such
notice by the Company. Unless the Holders of a majority of the Registrable
Securities to be registered shall consent in writing, no other party (including
the Company) will be permitted to offer securities under such demand
registration. Pulsar may also request that the Company file a registration under
the Securities Act covering the registration of all of the Registrable
Securities Pulsar owns. Pulsar may make no more than two such requests. The
Company is not obligated to effect more than one demand registration in any
six-month period.
In the event the managing underwriter advises the Holders that the size of
the offering is such that the success of the offering would be materially and
adversely affected by inclusion of all Registrable Securities requested to be
included, then the number of shares of Registrable Securities to be included in
the underwriting will be reduced on a pro rata basis, provided that the Company
will first reduce entirely all securities other than Registrable Securities to
be included in such underwriting.
The Stockholders Agreement also provides that, if the Company proposes to
register any of its stock or other securities under the Securities Act in
connection with the public offering of such securities solely for cash, the
Company shall, at such time, promptly (but in no event less than 30 days before
the filing date) give each Holder written notice of such registration, and such
notice shall offer the Holders the opportunity to
7
<PAGE> 11
register such number of shares of Registrable Securities as such Holder may
request. Subject to certain restrictions, upon the written request of each
Holder given within 20 days after delivery of such notice by the Company, the
Company shall cause to be registered under the Securities Act all of the
Registrable Securities that each such Holder has requested to be registered.
If the underwriters determine that the total amount of securities requested
to be included in any such offering would materially and adversely affect the
success of such offering, the Company will be required to include in the
offering, in addition to any shares to be registered by the Company, only that
number of such Registrable Securities that the underwriters determine in their
sole discretion would not affect the success of such offering.
The registration rights provisions of the Stockholders Agreement terminate
four years after the Company's initial public offering (which occurred on June
13, 1996).
Restrictions on Transfer
Under the Stockholders Agreement, if MSLEF II, MSCI, MSCP 892 and MSCP III
(collectively, the "MS Merchant Banking Funds") propose to transfer (other than
in a sale to the public) shares which, taken together with any prior transfers
by the MS Merchant Banking Funds, represent more than 10% of the shares owned by
them on the date of the Stockholders Agreement, the Holders have a right to
require the transferee to purchase their shares on a pro rata basis.
The Stockholders Agreement also provides for certain restrictions on the
transfer of shares of Capital Stock by holders thereof subject to Regulation Y
of the Board of Governors of the Federal Reserve System.
Restrictions on Amendment of Certificate of Incorporation
The Company will not amend the Company's Amended and Restated Certificate
of Incorporation or
By-laws to eliminate the right of stockholders of the Company to take action
upon written consent of the holders of a majority of the outstanding shares of
Common Stock without a meeting, without prior notice and without a vote as
provided in the Company's Bylaws, so long as the MS Merchant Banking Funds hold
at least 7.5% of the Company's Capital Stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Security Exchange Act of 1934 requires the Company's
executive officers and directors and persons who own more than ten percent of a
registered class of the Company's equity securities (collectively, the
"reporting persons") to file reports of ownership and changes in ownership with
the Securities and Exchange Commission and to furnish the Company with copies of
these reports. Based on the Company's review of the copies of these reports
received by it, and written representations received from reporting persons, the
Company believes that all filings required to be made by the reporting persons
during the year ended December 31, 1997 were made on a timely basis.
8
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth compensation information for the Named
Executive Officers for services rendered in the fiscal years ending December 31,
1997, 1996 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL ------------
COMPENSATION(1) SECURITIES
-------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(2) COMPENSATION(3)
--------------------------- ---- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
John D. Beletic.................. 1997 $279,171 $358,599 300,000 $15,743
Chairman and 1996 250,000 56,814 100,000 12,414
Chief Executive Officer 1995 200,000 150,000 100,000 10,755
N. Ross Buckenham................ 1997 183,024 63,261 160,000 10,468
President 1996 108,945 15,672 120,000 6,565
1995 -- -- -- --
Douglas S. Glen.................. 1997 155,000 75,039 75,000 10,154
Executive Vice President, 1996 118,000 33,337 25,000 7,933
Strategic Alliance Business Unit 1995 110,846 29,150 10,000 7,713
and President, Carrier Services
Division
Sandra D. Neal................... 1997 155,000 77,418 45,000 6,899
Executive Vice President, 1996 130,000 19,845 15,000 6,662
Strategic Projects 1995 115,000 39,675 50,000 7,569
Paul L. Turner................... 1997 155,000 59,130 75,000 5,784
Vice President, Customer Service 1996 110,000 17,116 25,000 4,534
1995 90,000 26,775 40,000 4,532
</TABLE>
- ---------------
(1) The amount of cash compensation does not include the value of personal
benefits or securities, property or other non-cash compensation paid or
distributed other than pursuant to a plan, which, with respect to any Named
Executive Officer, was less than the lesser of $50,000 and 10% of the cash
compensation received by such Officer.
(2) Denominated in shares of Common Stock.
(3) All other compensation for 1997 is made up of the following:
<TABLE>
<CAPTION>
MR. BELETIC MR. BUCKENHAM MR. GLEN MS. NEAL MR. TURNER
----------- ----------------- -------- -------- ----------
1997
- ------------------------------------
<S> <C> <C> <C> <C> <C>
Below prime rate loan............... $4,521 $ -- $ -- $ -- $ --
Life and accident insurance......... 741 478 364 353 353
Long-term disability insurance...... 1,415 924 724 766 699
Health insurance.................... 9,066 9,066 9,066 5,780 4,732
------ ------ ------ ----- -----
Total other
compensation............ 15,743 10,468 10,154 6,899 5,784
====== ====== ====== ===== =====
</TABLE>
9
<PAGE> 13
STOCK OPTIONS
The following table sets forth grants of stock options, during fiscal year
1997, to each Named Executive Officer.
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENTAGE POTENTIAL REALIZATION VALUE
NUMBER OF OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ----------------------------
GRANTED(1) FISCAL 1997 SHARE DATE 5% 10%
---------- ------------ --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
John D. Beletic......... 100,000(3) 4.00% $ 7.00 11/15/2005 $ 149,535 $ 532,562
200,000 8.00% 10.00 11/13/2007 1,257,781 3,187,480
N. Ross Buckenham....... 70,000(3) 2.80% 7.00 01/15/2006 134,407 459,073
20,000 0.80% 7.00 05/20/2007 47,322 158,279
70,000 2.80% 10.00 11/13/2007 440,222 1,115,617
Douglas S. Glen......... 10,000(3) 0.40% 7.00 11/15/2005 14,953 53,256
25,000 1.00% 7.00 05/20/2007 59,152 197,849
40,000 1.60% 10.00 11/13/2007 251,556 637,495
Sandra D. Neal.......... 40,000(3) 1.60% 7.00 11/15/2005 59,813 213,024
5,000 0.20% 10.00 11/13/2007 31,443 79,686
Paul L. Turner.......... 40,000(3) 1.60% 7.00 03/01/2004 43,632 168,204
30,000(3) 1.20% 7.00 11/15/2005 44,859 159,768
5,000 0.20% 10.00 11/13/2007 31,443 79,686
</TABLE>
- ---------------
(1) Denominated in shares of Common Stock. Each option vests with respect to (i)
20% of the option shares one year after the date of grant, and (ii) the
balance of the option shares in equal successive monthly installments over
each of the next 48 months of service.
(2) The assigned rates of growth were selected by the Securities and Exchange
Commission for illustrative purposes only and are not intended to predict or
forecast future stock prices.
(3) Options originally granted in prior years and repriced. See "Ten-Year
Option/SAR Repricing" table below.
The following table sets forth stock options exercised during fiscal year
1997 and the fiscal year-end value of unexercised options for each Named
Executive Officer.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
SHARES DECEMBER 31, 1997(1) AT DECEMBER 31, 1997(2)
ACQUIRED VALUE ------------------------------ ------------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- -------- ----------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
John D. Beletic........... 5,000 $29,950 281,668 383,332 $821,824 $239,646
N. Ross Buckenham......... -- -- 37,666 172,334 37,019 104,228
Douglas S. Glen........... 4,000 32,680 56,165 103,835 168,328 69,741
Sandra D. Neal............ 5,000 43,125 89,498 55,502 309,617 59,501
Paul L. Turner............ -- -- 59,748 60,252 54,308 55,686
</TABLE>
- ---------------
(1) Denominated in shares of Common Stock.
(2) The fair market value at December 31, 1997 was $7.875 per share.
The following table sets forth information concerning the repricing of
stock options held by the Named Executive Officers during the last 10 years.
10
<PAGE> 14
TEN-YEAR OPTION/SAR REPRICING
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF
SECURITIES ORIGINAL
UNDERLYING MARKET PRICE EXERCISE OPTION TERM
OPTIONS/ OF STOCK AT PRICE AT REMAINING AT
SARS TIME OF TIME OF NEW DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME/POSITION DATE AMENDED AMENDMENT AMENDMENT PRICE (1) AMENDMENT
------------- ------- ----------- ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
John D. Beletic................... 5/20/97 100,000 $5.75 $10.00 $7.00 102 months
N. Ross Buckenham................. 5/20/97 70,000 $5.75 $10.00 $7.00 104 months
Douglas S. Glen................... 5/20/97 10,000 $5.75 $10.00 $7.00 102 months
Sandra D. Neal.................... 5/20/97 40,000 $5.75 $10.00 $7.00 102 months
Paul L. Turner.................... 5/20/97 40,000 $5.75 $ 8.00 $7.00 82 months
5/20/97 30,000 $5.75 $10.00 $7.00 102 months
</TABLE>
- ---------------
(1) Replacement grants were issued at above market prices. Vesting terms were
not amended at the time of repricing.
DIRECTORS' COMPENSATION
Pamela Reeve receives $1,000 per quarter for her services as a director. No
other directors of the Company currently receive compensation for their services
in such capacity. All directors who are not employees of the Company or any of
its affiliates and who own 1% or less of the Company's Common Stock participate
in the Company's 1996 Nonqualified Stock Option Plan for Non-Employee Directors,
pursuant to which each such director is granted an option covering 25,000 shares
of Common Stock upon being elected to the Board, with an exercise price equal to
the fair market value of such stock on the date of grant. On the third
anniversary of the grant, each eligible director still serving on the Board will
be granted another option covering 25,000 shares at the fair market value on the
date of such grant. Each option vests in equal quarterly installments over a
three year period and has a maximum term of 10 years. Currently only Ms. Reeve
is eligible to participate in the Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, the Compensation Committee consisted of Frank V. Sica, Guy L.
de Chazal and Arthur Patterson, none of whom have ever been an officer or
employee of the Company or any of its subsidiaries. No executive officer of the
Company serves on the compensation committee of another corporation, an
executive officer of which serves as a Director of the Company or on the
Company's Compensation Committee. No executive officer of the Company serves as
a director of another corporation, an executive officer of which serves as a
member of the Company's Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee
The Compensation Committee of the Board, which consists of four
non-employee directors, is responsible for overseeing all stock option plans,
setting the compensation for the Chief Executive Officer ("CEO") and other
executive officers, reviewing and approving the Company's compensation policies
and providing guidelines for determining the annual compensation of other
management personnel.
Compensation Philosophy
The goals of the Compensation Committee with respect to executive
compensation are to: (1) establish a competitive compensation program to
attract, retain and motivate employees in those positions that most directly
affect the Company's overall performance and (2) encourage coordinated and
sustained effort toward enhancing the Company's performance and maximizing the
Company's value to its shareholders. This focus is
11
<PAGE> 15
maintained through a program of competitive base salaries, a bonus program based
on successfully achieving predetermined financial performance goals and a heavy
emphasis on executive equity ownership.
Base Salaries
The Compensation Committee reviews and approves salaries for the CEO and
the other officers on an annual basis. The Compensation Committee also provides
guidelines to set the base salary of other management personnel. In making
recommendations to the CEO, the Compensation Committee may consider information
derived from reports of public companies in the paging industry and
telecommunications industry and/or national surveys of compensation data.
Ultimately, however, the salaries are based on a subjective analysis of each
officer's performance during the prior year, as well as an evaluation of the
individual executive's expected future performance. In ratifying salary
decisions, the Compensation Commit tee exercises its discretion and judgment
with no specific formula being applied to determine salary levels.
Annual Incentive Bonus
Each executive officer has an opportunity to earn an annual bonus based
upon Company performance. Annual incentive bonus opportunities for executive
officers are based on the Compensation Committee's belief that a significant
portion of the annual compensation of each executive officer should be
contingent upon Company performance. To carry out this philosophy, the Company
implemented the 1997 Management Annual Variable Compensation Plan (the
"Incentive Plan"). The Incentive Plan is a pay-for-performance plan intended to
motivate and award executive officers (as well as other officers and managers)
by directly linking cash bonuses to specific aggressive Company performance
targets. Prior to a calendar year, the Compensation Committee sets the incentive
bonus target at a stated percentage of an executive officer's base salary. The
bonus amounts earned are determined as of the end of each calendar year. The
percentage bonus is calculated by determining the level of the Company's
accomplishment of certain performance criteria established in order to align
participants' perspectives with that of shareholders and enhance shareholder
value.
The Compensation Committee has the discretion to modify the bonus amounts
paid to all participants in the Incentive Plan regardless of the performance
level achieved if certain extraordinary unforeseen events occur during the year.
The Compensation Committee has exercised its discretion to modify the bonus
amounts only once in prior years and did not exercise its discretion to modify
the bonus amounts under the Incentive Plan in 1997.
Certain of the executive officers of the Company (other than the CEO), as
well as certain managers, also have the opportunity to participate in the
Company's Management by Objective ("MBO") bonus program. Participants in the MBO
program are provided a cash bonus based upon the percentage of definitive
performance objectives completed during each calendar quarter. The participant's
potential MBO bonus is a percentage of such participant's annual base salary,
paid quarterly based upon the participant's completion of his/her objectives.
For 1997, MBO bonuses ranged from 5% to 10% of executive officers' annual base
salaries. The MBO bonus program is intended to provide officers with an
incentive to focus on short-term performance goals that enhance the operating
efficiency of the Company and enhance shareholder value.
Stock Options/Equity Ownership
The Compensation Committee believes that the grant of stock options will
motivate executives to create long-term growth in shareholder value. Pursuant to
the Company's Fifth Amended and Restated 1991 Stock Option Plan (the "Stock
Option Plan"), options are granted at the discretion of the Compensation
Committee, usually annually. The number of option shares covered by such grants
are determined based upon assessment of the individual's performance. The
Compensation Committee considers the recommendation of and relies on information
provided by the CEO in determining the number of option shares to be granted to
the non-CEO executive officers. The Compensation Committee believes that the
periodic grant of time-vested stock options provides an incentive that focuses
the executives' attention on managing the business as owners of an equity stake
in the Company. It further motivates executives to maximize long-term growth and
12
<PAGE> 16
profitability because value is created in the options only as the Company's
stock price increases after the option is granted.
In May 1997 the Compensation Committee reviewed certain options previously
granted to employees of the Company and the market price of the Company's common
stock during the past year. The Committee recognized that options issued by the
Company are utilized as compensation and to provide incentives to improve
Company performance and thereby positively influence the market price for
Company's common stock for the benefit of all shareholders. The Committee
determined that the market price had declined despite the Company's significant
accomplishments, that certain options previously granted under the Stock Option
Plan were at exercise prices in excess of the current market prices of the
Company's common stock, and that these outstanding stock options, if left in
place, would not achieve the underlying objectives.
Accordingly, on May 20, 1997 (the "Grant Date"), replacement stock options
were granted to replace certain previously issued stock options under such plan.
The replacement options did not involve the grant of any additional shares. The
replacement options were granted at an exercise price of $7.00 per share, while
the closing price of the common stock on the Nasdaq exchange was $5.75 on the
Grant Date. No other option repricing or exchange has occurred in the past ten
years.
CEO Compensation
The Compensation Committee believes that, as with the other executive
officers, the CEO's compensation should, in large part, be tied directly to the
performance of the Company and that the CEO should share in the same risks and
rewards as do the Company's shareholders. Accordingly, the compensation of the
CEO is comprised of base salary, annual incentive bonus pursuant to the
Incentive Plan and long-term incentives through stock options. In setting Mr.
Beletic's compensation, the Compensation Committee analyzes subjective measures
of performance during the prior fiscal year as well as expected future
performance. Mr. Beletic's projected total compensation, based upon target
levels of Company performance was, the Compensation Committee believes,
comparable to the compensation paid to other CEOs of similar companies in the
paging industry.
Deductibility of Executive Compensation
The Omnibus Budget Reconciliation Act of 1993 provides that
non-performance-based compensation paid to any Named Executive Officer in excess
of one million dollars will not be deductible for federal income tax purposes.
The Compensation Committee intends to grant deductible awards subject to the
needs of the Company.
Respectfully submitted,
Compensation Committee:
Guy L. de Chazal
Arthur Patterson
Pamela D.A. Reeve
Leigh J. Abramson
13
<PAGE> 17
PERFORMANCE GRAPH
The rules of the Securities and Exchange Commission ("SEC") require each
public company to include a performance graph comparing the cumulative total
shareholder return on such company's common stock for the five preceding fiscal
years, or such shorter period as the registrant's class of securities has been
registered with the SEC, with the cumulative total returns of a broad equity
market index (such as Nasdaq National Market -- U.S. Companies Index) and a peer
group or similar index. The Company's Common Stock began trading on the Nasdaq
National Market System under the symbol PMWI on June 14, 1996. Accordingly, the
performance graph included in this Proxy Statement shows the period from June
14, 1996 through December 31, 1997.
The following chart graphs the performance of the cumulative total return
to shareholders (stock price appreciation plus dividends) between June 14, 1996
and December 31, 1997 in comparison to returns of the Nasdaq National
Market -- U.S. Companies Price Index and a peer group index. The peer group
index was constructed specifically for the Company and includes the following
wireless messaging companies: American Paging, Inc., Arch Communications Group,
Inc., Metrocall, Inc., Mobile Telecommunications Technologies Corp., Paging
Network, Inc. and ProNet, Inc. In calculating the peer group index, the returns
of each company in the group have been weighted according to such company's
market capitalization at the beginning of the period. MobilMedia Communications,
Inc., which was included in the 1996 peer group index, has been excluded from
the peer group index presented herein due to the delisting of the company's
stock in June 1997.
CUMULATIVE TOTAL RETURNS*
<TABLE>
<CAPTION>
NASDAQ
NATIONAL
MARKET - U.S.
MEASUREMENT PERIOD PAGEMART COMPANIES
(FISCAL YEAR COVERED) WIRELESS, INC. PEER GOUP INDEX
<S> <C> <C> <C>
6/14/96 100 100 100
9/30/96 82.80 78.85 101.23
12/31/96 56.99 55.84 106.20
3/31/97 51.61 33.22 100.49
6/30/97 73.12 43.49 118.91
9/30/97 93.55 58.25 139.03
12/31/97 67.74 55.47 130.39
</TABLE>
* Cumulative total return assumes reinvestment of dividends. Assumes $100
invested on June 14, 1996 in the Company's Common Stock, Peer Group and Nasdaq
National Market -- U.S. Companies Index.
14
<PAGE> 18
PROPOSAL TWO:
PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN LLP
AS INDEPENDENT AUDITORS OF THE COMPANY
The Board has appointed Arthur Andersen LLP, independent public
accountants, as the Auditors of the Company, to serve at the pleasure of the
Board for 1998. A member of that firm will be present at the Annual Meeting with
the opportunity to make a statement and respond to appropriate questions by
shareholders.
The shareholders of the Company are asked to consider and act upon the
matter of ratifying the appointment of Arthur Andersen LLP.
Approval of the independent auditors requires the affirmative vote of a
majority of the total voting power represented by outstanding shares of Common
Stock present or represented at the Annual Meeting and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ARTHUR
ANDERSEN LLP AS INDEPENDENT AUDITORS OF THE COMPANY.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any proposals of stockholders which are intended to be presented at the
next Annual Meeting of Stockholders, but which are not received by the Secretary
of the Company at the principal executive offices of the Company on or before
November 18, 1998, may be omitted by the Company from the Proxy Statement and
form of proxy relating to that meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
Annual Meeting. However, if other matters should come before the meeting, it is
the intention of each of the persons named in the proxy to vote in accordance
with his judgment on such matters.
ANNUAL REPORTS
The Company's 1997 Annual Report to Stockholders, which contains the
Company's Annual Report on Form 10-K (without exhibits) and its consolidated
financial statements for the year ended December 31, 1997, accompanies this
proxy statement. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997 will also be made available (without exhibits), free of
charge, to interested stockholders upon written request to the Vice President,
Investor Relations of the Company, at 3333 Lee Parkway, Suite 100, Dallas, TX
75219.
By Order of the Board of Directors,
/s/ JOHN D. BELETIC
John D. Beletic
Chairman and Chief Executive Officer
15
<PAGE> 19
PAGEMART WIRELESS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Frederick G. Anderson and G. Clay Myers, and
each of them, Proxies with power of substitution, and hereby authorizes them to
represent and to vote, as designated below, all of the shares of Common Stock of
PageMart Wireless, Inc. (the "Company") held of record by the undersigned on
February 13, 1998, at the Annual Meeting of Stockholders to be held in Dallas,
Texas on Wednesday, April 8, 1998, at 9:00 a.m., local time, and at all
adjournments thereof, with all powers the undersigned would possess if
personally present. In their discretion, the Proxies are authorized to vote upon
such other business that may properly come before the meeting.
1. Election of Directors
Nominees: Leigh Abramson, John D. Beletic, Guy L. de Chazal, Robert
H. Niehaus, Alejandro Perez Elizondo, Arthur Patterson, Pamela D.A. Reeve
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY [ ] FOR all nominees,
except as noted below
----------------------
Nominee Exceptions
2. Proposal to ratify the appointment of Arthur Andersen LLP as independent
auditors of the Company for the fiscal year ending December 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 20
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE THIS PROXY WILL
BE VOTED "FOR" ITEMS 1 AND 2.
-----------------------------------------
Signature
-----------------------------------------
Signature if held jointly
Dated: ___________________________, 1998
Please sign exactly as name appears herein. When shares are held by Joint
Tenants, both should sign, and for signing as attorney, as executor, as
administrator, trustee or guardian, please give full title as such. If held by a
corporation, please sign in the full corporate name by the president or other
authorized officer. If held by a partnership, please sign in the partnership
name by an authorized person.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY PROMPTLY USING
THE ENCLOSED ENVELOPE.
