<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 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
Page Mart 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)(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:
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(4) Date Filed:
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<PAGE> 2
<TABLE>
<S> <C> <C>
[PAGEMART WIRELESS LOGO]
3333 LEE PARKWAY, SUITE 100 March 30, 1999
DALLAS, TEXAS 75219
</TABLE>
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders to
be held at 9:00AM, local time, on May 12, 1999, 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 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,
[JOHN D. BELETIC SIGNATURE]
John D. Beletic
Chairman and Chief Executive Officer
<PAGE> 3
[PAGEMART WIRELESS LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 12, 1999
March 30, 1999
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 May 12, 1999 at 9:00AM, local time, for the following
purposes:
1. To elect a Board of Directors consisting of eight members.
2. To consider and vote upon a proposal to amend the Company's Fifth
Amended and Restated 1991 Stock Option Plan.
3. 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.
4. 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 March 17, 1999 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: (i) the Board's
nominees for director, and (ii) the approval of the proposal to amend the stock
option plan and (iii) the appointment of the independent auditors.
By Order of the Board of Directors,
[FREDERICK G. ANDERSON SIGNATURE]
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 Wireless Logo]
PROXY STATEMENT
DATED MARCH 30, 1999
ANNUAL MEETING OF STOCKHOLDERS
MAY 12, 1999
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 May 12, 1999 (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 March
17, 1999, the record date for the Annual Meeting, there were outstanding
34,558,012 shares of Common Stock. This Proxy Statement and the accompanying
form of proxy are first being sent to stockholders on or about April 6, 1999.
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
Eight members of the Board will be elected at the Annual Meeting. Directors
elected at the Annual Meeting will serve until the next annual meeting of
stockholders or until their successors are elected and qualified. The eight
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.
<PAGE> 5
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........................... 47 Chairman and Chief Executive Officer
Leigh J. Abramson(1)(2)................... 30 Director
Guy L. de Chazal(1)....................... 51 Director
Steven B. Dodge........................... 53 Director
Michael C. Hoffman........................ 37 Director
Arthur Patterson(1)....................... 55 Director
Alejandro Perez Elizondo(2)............... 49 Director
Pamela D.A. Reeve(1)(2)................... 49 Director
</TABLE>
- ---------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
John D. Beletic, Chairman and Chief Executive Officer. Mr. Beletic joined
the Company as President and a director in March 1992. Mr. Beletic also became
Chief Executive Officer of the Company in February 1994 and Chairman of the
Company's Board in August 1994. In November 1997, Mr. Beletic continued as the
Chairman and Chief Executive Officer with N. Ross Buckenham assuming 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., a manufacturer of
voice mail systems. Mr. Beletic earned his bachelor's degree in finance from
Cincinnati's Xavier University and his MBA from the Harvard Business School. Mr.
Beletic currently serves as a director of PulsePoint Communications and Triton
PCS Holdings, Inc. Within the paging industry, Mr. Beletic currently serves as a
director of the Personal Communications Industry Association, the industry trade
association, and President of the Paging Leadership Association.
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 &
Co. Incorporated ("Morgan Stanley") and of Morgan Stanley Dean Witter Capital
Partners. Mr. Abramson has been with Morgan Stanley since 1990, first in the
Corporate Finance Division and, since 1992, in the Private Equity Division. Mr.
Abramson is also a Director of Silgan Holdings. Mr. Abramson was designated by
Morgan Stanley Capital Partners III, L.P. ("MSCP III") 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 a Managing Director of Morgan Stanley
and is President and a general partner of Morgan Stanley Dean Witter Venture
Partners. Mr. de Chazal joined Morgan Stanley in 1984. Mr. de Chazal is also a
director of several private companies. Mr. de Chazal was designated by Morgan
Stanley Venture Capital Fund, L.P.("MSVCF") pursuant to the Stockholders
Agreement. See "Certain Relationships and Related Transactions -- Election of
Directors."
Steven B. Dodge, Director. Mr. Dodge has been a Director of the Company
since November 1998. Mr. Dodge is Chairman and Chief Executive Officer of
American Tower Corporation ("ATC"), a leading independent owner and operator of
wireless communications towers in the United States. Prior to joining ATC, Mr.
Dodge founded and was the Chairman of the Board, President and CEO of American
Radio Systems Corporation ("ARS"), an independent owner and operator of radio
stations, a position he occupied from ARS' founding in November, 1993 until its
merger with CBS Corporation. In addition, Mr. Dodge founded Atlantic Radio, L.P.
in 1988, which was one of the predecessor entities of ARS. Prior to forming
Atlantic Radio, L.P., Mr. Dodge founded and served as Chairman and CEO of
American Cablesystems
2
<PAGE> 6
Corporation, a cable television company. Currently, Mr. Dodge is also a Director
of Sensitech, Inc. and Jobson Publishing, L.L.C.
Michael C. Hoffman, Director. Mr. Hoffman has been a Director of the
Company since March 1999. Mr. Hoffman is a Managing Director of Morgan Stanley
and of Morgan Stanley Dean Witter Capital Partners. Mr. Hoffman joined Morgan
Stanley in 1986. Mr. Hoffman was designated by The Morgan Stanley Leveraged
Equity Fund II, L.P. ("MSLEF II") 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 Unify,
Portal Software and the AIM Funds 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 the 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). Mr. Perez was designated by Pulsar pursuant
to the Stockholders Agreement.
Pamela D. A. Reeve, Director. Ms. Reeve has been a Director of the Company
since April 1996. Ms. Reeve is 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 1998. 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 Ms. Reeve who attended five
Board and committee 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 one meeting in 1998.
The Compensation Committee of the Board is charged with reviewing executive
compensation and administering the Company's Stock Option Plan (as defined
herein). During 1998, its members were initially 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. The Compensation Committee
held four meetings in 1998.
The Board does not have a nominating committee.
3
<PAGE> 7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of Class A Common Stock as of January 31, 1999, (i) by each person
known by the Company to own beneficially more than 5% of the outstanding Class A
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............ 8,476,518 24.5%
1221 Avenue of the Americas,
New York, NY 10020
Morgan Stanley Capital Partners III, L.P.................... 5,072,672 14.7%
1221 Avenue of the Americas,
New York, NY 10020
Morgan Stanley Venture Capital Fund, L.P.................... 2,154,071 6.2%
1221 Avenue of the Americas,
New York, NY 10020
Other Morgan Stanley-sponsored limited partnerships......... 842,719 2.4%
Mellon Bank, N.A., as Trustee for First Plaza Group
Trust(1).................................................. 3,214,286 9.3%
One Mellon Plaza,
Pittsburgh, PA 15258
Accel Telecom L.P.(2)....................................... 1,542,300 4.5%
One Embarcadero Center, Ste. 3820,
San Francisco, CA 94111
Accel III L.P.(2)........................................... 1,416,200 4.1%
One Embarcadero Center, Ste. 3820,
San Francisco, CA 94111
Accel Investors' 89 L.P.(2)................................. 91,500 *
One Embarcadero Center, Ste. 3820,
San Francisco, CA 94111
Pulsar...................................................... 2,142,857 6.2%
Av. Roble, No. 300 Mezzanine, Edificio Torre Alta
Garza Garcia, N.L., Mexico C.P. 66265
Directors and Named Executive Officers:
John D. Beletic(3).......................................... 767,738 2.2%
N. Ross Buckenham(4)........................................ 94,541 *
Douglas H. Kramp(5)......................................... 149,927 *
Frederick G. Anderson(6).................................... 20,333 *
G. Clay Myers(7)............................................ 136,440 *
Leigh J. Abramson........................................... -- *
Guy L. de Chazal............................................ -- *
Steven B. Dodge(8).......................................... 2,083 *
Michael C. Hoffman.......................................... -- *
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
SHARES OF PERCENT OF
CLASS A CLASS A
NAME AND ADDRESS OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK
------------------------------------ ------------ ------------
<S> <C> <C>
Arthur Patterson(2)(9)...................................... 3,050,000 8.8%
Alejandro Perez Elizondo.................................... -- *
Pamela D.A. Reeve(10)....................................... 25,000 *
All directors and executive officers as a group(11)......... 21,526,926 59.9%
</TABLE>
- ---------------
* Denotes less than 1%
(1) 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. 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.
(2) Each of these entities is an investment partnership for which Arthur
Patterson, a director of the Company, is a general partner.
(3) 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 408,335 stock options which are exercisable within the 60-day
period commencing January 31, 1999, pursuant to the Stock Option Plan.
(4) Includes 93,665 stock options which are exercisable within the 60-day
period commencing January 31, 1999, pursuant to the Stock Option Plan.
(5) Includes 115,513 stock options which are exercisable within the 60-day
period commencing January 31, 1999, pursuant to the Stock Option Plan.
(6) Includes 20,333 stock options which are exercisable within the 60-day
period commencing January 31, 1999, pursuant to the Stock Option Plan.
(7) Includes 101,833 stock options which are exercisable within the 60-day
period commencing January 31, 1999, pursuant to the Stock Option Plan.
(8) Includes 2,083 stock options which are exercisable within the 60-day period
commencing January 31, 1999, pursuant to the 1996 Nonqualified Stock Option
Plan for Non-Employee Directors.
(9) 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.
(10) Includes 25,000 stock options which are exercisable within the 60-day
period commencing January 31, 1999, pursuant to the 1996 Nonqualified Stock
Option Plan for Non-Employee Directors.
(11) Includes 1,410,154 stock options which are exercisable within the 60-day
period commencing January 31, 1999.
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
5
<PAGE> 9
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, 1999, John D. Beletic, Chairman and Chief Executive
Officer of the Company, was indebted to the Company in the amount of $184,000
under four 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 4.57% 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, 2002. The
second promissory note (the "Second 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
Second Note is due on May 11, 1999. The third promissory note (the "Third Note")
was issued in September 1997 for $16,300 in connection with a stock 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 Third Note is due September 22,
2000. The fourth promissory note (the "Fourth 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 Fourth Note is due on January 14, 2001. The First Note, the Second Note, the
Third Note and the Fourth Note are all secured by the Common Stock owned by Mr.
Beletic.
As of January 31, 1999, 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, 1999, 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 4.62% 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, 2002. 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
6
<PAGE> 10
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 N. 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
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
7
<PAGE> 11
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 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 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.
8
<PAGE> 12
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, 1998, were made on a timely basis.
EXECUTIVE COMPENSATION
The following table sets forth compensation information for the Named
Executive Officers for services rendered in the fiscal years ending December 31,
1998, 1997, and 1996.
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,.................... 1998 $323,616 $454,480 400,000(4) $16,110
Chairman and Chief Executive Officer 1997 279,171 358,599 300,000 15,743
1996 250,000 56,814 100,000 12,414
N. Ross Buckenham,.................. 1998 210,000 139,536 100,000 82,079(5)
President 1997 167,692 63,261 160,000 25,800
1996 108,945 15,672 120,000 6,565
Douglas H. Kramp,................... 1998 200,000 99,002 30,000 11,820
Executive Vice President, Strategic 1997 161,058 38,812 110,000 11,859
Business Units 1996 120,000 26,076 25,000 9,419
G. Clay Myers,...................... 1998 170,539 73,128 75,000 13,781
Vice President, Finance, Chief 1997 140,000 61,368 55,000 12,153
Financial Officer and Treasurer 1996 110,000 16,968 20,000 9,592
Frederick G. Anderson,.............. 1998 173,231 64,851 80,000 10,610
Vice President General Counsel and 1997 55,577 22,388 70,000 2,796
Secretary 1996 -- -- -- --
</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 1998 is made up of the following:
<TABLE>
<CAPTION>
MR. BELETIC MR. BUCKENHAM MR. KRAMP MR. MYERS MR. ANDERSON
----------- ------------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
1998
- ----------------------------------
Below prime rate loan............. $ 4,725 $ -- $ 1,468 $ 3,244 $ --
Life and accident insurance....... 481 311 296 250 256
Long-term disability insurance.... 1,321 863 811 704 771
Health insurance.................. 9,583 9,301 9,245 9,583 9,583
Moving allowance.................. -- 71,604 -- -- --
Total other
compensation.......... 16,110 82,079 11,820 13,781 10,610
</TABLE>
(4) 300,000 of such shares are represented by an option which is exercisable at
a price of $9.06 per share and which does not vest until the third
anniversary of the date of grant, at which time such option becomes 100%
vested.
(5) Includes $71,604 for payment or reimbursement of expenses related to moving
Mr. Buckenham's residence to Dallas, Texas.
9
<PAGE> 13
STOCK OPTIONS
The following table sets forth grants of stock options, during fiscal year
1998, 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 1998 SHARE DATE 5% 10%
---------- ------------ --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
John D. Beletic......... 100,000 4.34% $6.05 11/04/2008 $ 379,973 $ 963,408
300,000(3) 13.03% 9.06 05/21/2008 1,709,325 4,331,785
N. Ross Buckenham....... 100,000 4.34% 6.05 11/04/2008 379,973 963,408
Douglas H. Kramp........ 30,000 1.30% 6.05 11/04/2008 113,991 289,021
G. Clay Myers........... 25,000 1.09% 6.05 11/04/2008 94,993 240,851
50,000 2.17% 9.06 05/21/2008 284,886 721,963
Frederick G. Anderson... 25,000 1.09% 6.05 11/04/2008 94,993 240,851
55,000 2.39% 9.06 05/21/2008 313,375 794,160
</TABLE>
- ---------------
(1) Denominated in shares of Common Stock. Unless otherwise noted, 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) Option does not vest until the third anniversary of the date of grant, at
which time it becomes 100% vested.
The following table sets forth stock options exercised during fiscal year
1998 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 UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT DECEMBER 31, 1998(1) DECEMBER 31, 1998(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John D. Beletic.......... 15,000 $57,975 383,335 666,665 $345,374 $ --
N. Ross Buckenham........ -- -- 83,165 226,835 -- --
Douglas H. Kramp......... -- -- 107,095 119,838 67,450 187
G. Clay Myers............ 10,000 38,650 95,583 124,417 46,050 --
Frederick G. Anderson.... -- -- 16,833 133,167 -- --
</TABLE>
- ---------------
(1) Denominated in shares of Common Stock.
(2) The fair market value at December 31, 1998 was $5 9/16 per share.
DIRECTORS' COMPENSATION
Pamela Reeve and Steven Dodge each receive $10,000 annually for their
services as directors. 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
10
<PAGE> 14
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 and Mr. Dodge are eligible to
participate in the Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of members of the Compensation Committee during 1998 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 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 executive officers on an annual basis. The Compensation Committee also
provides guidelines to set the base salary of other management personnel. The
Compensation Committee considers the recommendation of and relies on information
provided by the CEO in determining the salaries of the non-CEO officers. The
Compensation Committee may also 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 Committee 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 1998 Management Annual Variable Compensation Plan (the
"Incentive Plan"). The Incentive Plan is a pay-for-performance plan intended to
motivate and reward 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
11
<PAGE> 15
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 1998.
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 1998, MBO bonuses were 5% 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. 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 profitability
because value is created in the options only as the Company's stock price
increases after the option is granted.
CEO Compensation
The Compensation Committee believes that, as with the other executive
officers, the CEOs 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. The Compensation Committee believes Mr. Beletic's projected total
compensation, based upon target levels of Company performance, was comparable to
the compensation paid to other CEOs of similar companies in the paging industry.
12
<PAGE> 16
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:
Leigh J. Abramson
Guy L. de Chazal
Arthur Patterson
Pamela D.A. Reeve
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, 1998.
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, 1998 in comparison to returns of the Nasdaq National
Market -- U.S. Companies Index and a peer group index. The peer group index was
constructed specifically for the Company and includes the following wireless
messaging companies: Arch Communications Group, Inc., Metrocall, Inc., SkyTel
Communications, Inc. and Paging Network, 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. ProNet,
Inc. and American Paging, Inc. were included in the 1997 peer group index and
have been excluded from the peer group presented herein due to their mergers
with Metrocall, Inc. and Telephone and Data Systems, Inc., respectively.
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
12/31/96 56.99 58.14 106.20
6/30/97 73.12 44.54 118.73
12/31/97 67.74 56.88 130.16
6/30/98 77.96 80.82 156.70
12/31/98 47.85 58.70 182.97
</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 AMEND THE COMPANY'S FIFTH
AMENDED AND RESTATED 1991 STOCK OPTION PLAN
The Board of Directors and stockholders of the Company previously approved
the Fifth Amended and Restated 1991 Stock Option Plan (the "Stock Option Plan").
On January 28, 1999, the Board unanimously adopted, subject to stockholder
approval, an amendment to the Stock Option Plan to increase the maximum number
of authorized shares of the Company's Common Stock which may be issued under the
Stock Option Plan.
The Board of Directors is recommending that the number of shares available
for issuance under the Stock Option Plan be increased by 2,000,000 shares of
Common Stock to a total of 9,500,000 shares of Common Stock to permit the
Company to continue to use the stock options as a means to attract, retain and
motivate qualified employees and provide them with the ability to acquire an
equity interest in the Company. As of February 28, 1999, options to acquire
7,038,835 shares were outstanding to employees under the Stock Option Plan, and
461,165 shares were available for the grant of options.
No determination has been made as to who will be granted options to acquire
the additional shares of Common Stock to be made available under the Stock
Option Plan, and such shares will be reserved for future grants.
STOCK OPTION PLAN
The Stock Option Plan authorizes grants to eligible participants of options
to purchase shares of Common Stock. Eligible participants include key employees
(including officers and directors) of the Company, its parent or subsidiaries.
Options granted under the Stock Option Plan may be either non-qualified options
("NSOs") or options qualifying as incentive stock options ("ISOs") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"). The following
summary of the material terms of the Stock Option Plan does not purport to be
complete, and is qualified in its entirety by the terms of the Stock Option
Plan, a copy of which is filed with the SEC as an exhibit to the Company's
Annual Report on Form 10-K and is available, free of charge, upon request to the
Vice President, Finance of the Company at 3333 Lee Parkway, Suite 100, Dallas,
Texas 75219.
PURPOSE
The purpose of the Stock Option Plan is to provide eligible individuals who
are responsible for the management, growth and financial success of the company
with the opportunity to acquire a proprietary interest in the Company and to
attract and retain competent management.
ADMINISTRATION
The Stock Option Plan is administered by the Compensation Committee of the
Board, which has full power and authority, subject to the terms of the Stock
Option Plan, to establish rules relating to, and to construe and interpret, the
Plan.
NUMBER OF AUTHORIZED SHARES
Stock issuable under the Stock Option Plan includes shares of authorized
but unissued or reacquired Common Stock. The number of shares for which options
may be granted under the Stock Option Plan may not exceed 7,500,000 shares.
Shares underlying any options that are not exercised prior to expiration,
termination or cancellation are available for subsequent option grants under the
Stock Option Plan.
OPTION PRICES
The option exercise price per share will be set by the Compensation
Committee, but in no event may the option price per share be less than 85% (with
respect to NSOs) or 100% (with respect to ISOs) of the fair market value of a
share of Common Stock on the grant date. If the individual to whom an ISO is
granted is at
15
<PAGE> 19
the time the holder of more than 10% of the total combined voting power of all
classes of stock of the Company or of its parent or subsidiaries (a "Significant
Stockholder"), then the option price per share may not be less than 110% of the
fair market value of the Common Stock on the grant date.
The exercise price may be paid in cash, shares of Common Stock or, if
approved by the Compensation Committee, through a cashless exercise program or
in installments or by borrowing the necessary funds from the Company.
TERM; VESTING; SURRENDER
Options are exercisable over such period as may be determined by the
Compensation Committee, but no option may remain exercisable more than ten years
from the grant date, and no ISO granted to a Significant Stockholder may remain
exercisable more than five years from the grant date. During such period,
options vest and become exercisable at such times and for such number of shares
as may be determined by the Compensation Committee.
In the event of a "corporate transaction", as defined in the Stock Option
Plan, each option outstanding under the Stock Option Plan will automatically
become fully exercisable immediately prior to the effective date of such
corporate transaction. Upon a "change in control", as defined in the Stock
Option Plan, option holders who are subject to Section 16 of the Exchange Act
have the right to exchange options held more than six months for cash in an
amount equal to the difference between the exercise price and the "acquisition
price" as defined in the Stock Option Plan.
TERMINATION OF EMPLOYMENT
If a participant ceases to perform services for the Company for any reason
other than for cause, as defined in the Stock Option Plan, while holding one or
more outstanding options under the Stock Option Plan, then each such option will
remain exercisable for the period of time specified by the Compensation
Committee in the option agreement or as otherwise extended by the Compensation
Committee, but in no event beyond the expiration date of such option. In the
event a participant is terminated for cause, all outstanding options of such
participant automatically terminate on the participant's termination date.
NONTRANSFERABILITY
NSOs and ISOs are not transferable except by will or the laws of descent
and distribution.
TERM OF STOCK OPTION PLAN
Unless earlier terminated by the Board, the Stock Option Plan will
terminate on the earlier of August 19, 2001 or the issuance or cancellation of
all shares of Common Stock issuable thereunder.
AMENDMENT AND TERMINATION
The Board may suspend, amend, modify or terminate the Stock Option Plan;
provided, however, that the Company's stockholders shall be required to approve
any amendment that would: (i) materially increase the aggregate number of shares
of Common Stock issuable under the Stock Option Plan; (ii) change the minimum
option price; (iii) increase the maximum term of options; (iv) remove the
administration of the Stock Option Plan from the Compensation Committee; (v)
materially increase the benefits accruing to participants under the Stock Option
Plan; or (vi) materially modify the requirements for eligibility to participate
in the Stock Option Plan.
Approval of the amendment of the Stock Option Plan requires the affirmative
vote of a majority of the total voting powers 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 APPROVAL OF THE AMENDMENT OF
THE STOCK OPTION PLAN.
16
<PAGE> 20
PROPOSAL THREE:
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 1999. 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 2000 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
December 6, 1999, 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 1998 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, 1998, accompanies this
proxy statement. The Company's Annual Report on Form 10-K for the year ended
December 31, 1998 will also be made available (without exhibits), free of
charge, to interested stockholders upon written request to the Vice President,
Finance of the Company, at 3333 Lee Parkway, Suite 100, Dallas, TX 75219.
By Order of the Board of Directors,
[JOHN D. BELETIC SIGNATURE]
John D. Beletic
Chairman and Chief Executive Officer
17
<PAGE> 21
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 March 17, 1999, at the Annual Meeting of Stockholders to be held
in Dallas, Texas on Wednesday, May 12, 1999, 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, Steven B.
Dodge, Michael C. Hoffman, 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 amend the Company's Fifth Amended and Restated 1991 Stock Option
Plan.
[ ] FOR [ ] AGAINST [ ]ABSTAIN
3. Proposal to ratify the appointment of Arthur Andersen LLP as independent
auditors of the Company for the fiscal year ending December 31, 1999.
[ ] FOR [ ] AGAINST [ ]ABSTAIN
<PAGE> 22
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 1,2 AND 3.
--------------------------------
Signature
--------------------------------
Signature if held jointly
Dated: , 1999
---------------------
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.
