SCHEDULE 14A
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 Under Rule 14a-12.
Triton PCS Holdings, Inc.
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(Name of Registrant as Specified in its Charter)
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(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 value of transaction:
(5) Total fee paid:
[_] Fee previously paid 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:
[Triton Logo]
To the Stockholders of Triton PCS Holdings, Inc.
You are cordially invited to attend the Annual Meeting of Stockholders
of Triton PCS Holdings, Inc. to be held at Triton's Corporate Headquarters, 1100
Cassatt Road, Berwyn, Pennsylvania 19312, on Wednesday, May 9, 2001, at 2:00
p.m., local time.
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement explain the matters to be voted on at the meeting.
Please read the enclosed Notice of Annual Meeting and Proxy Statement
so you will be informed about the business to come before the meeting. Your
vote is important, regardless of the number of shares you own. On behalf of the
Board of Directors, I urge you to mark, sign and return the enclosed proxy card,
even if you plan to attend the Annual Meeting.
Sincerely,
/s/ Michael E. Kalogris
Michael E. Kalogris
Chairman and Chief Executive Officer
Berwyn, Pennsylvania
April 2, 2001
TRITON PCS HOLDINGS, INC.
1100 Cassatt Road
BERWYN, PENNSYLVANIA 19312
(610) 651-5900
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 9, 2001
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To the Stockholders of Triton PCS Holdings, Inc.:
The Annual Meeting of the holders of Class A common stock of Triton
PCS Holdings, Inc. ("Triton") will be held at Triton's Corporate Headquarters,
1100 Cassatt Road, Berwyn, Pennsylvania 19312, on Wednesday, May 9, 2001, at
2:00 p.m., local time, for the following purposes:
1. To elect two Class II directors;
2. To ratify the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as Triton's independent auditors;
and
3. To amend Triton's 1999 Stock and Incentive Plan.
The Board of Directors has fixed March 26, 2001 as the record date for
the Annual Meeting with respect to this solicitation. Only holders of record of
Class A common stock at the close of business on that date are entitled to
notice of and to vote at the Annual Meeting or any adjournments thereof as set
forth in the Proxy Statement.
This Proxy Statement, the proxy card and Triton's Annual Report to
Stockholders are being mailed on or about April 2, 2001.
By Order of the Board of Directors,
/s/ David D. Clark
David D. Clark
Corporate Secretary
Berwyn, Pennsylvania
April 2, 2001
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YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN
PERSON, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
POSTAGE PAID ENVELOPE AS PROMPTLY AS POSSIBLE. AS SPECIFIED IN THE ENCLOSED
PROXY STATEMENT, A STOCKHOLDER MAY REVOKE A PROXY AT ANY TIME PRIOR TO ITS USE.
TRITON PCS HOLDINGS, INC.
1100 Cassatt Road
BERWYN, PENNSYLVANIA 19312
(610) 651-5900
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PROXY STATEMENT
2001 Annual Meeting of Stockholders
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Solicitation of Proxies
The Board of Directors of Triton PCS Holdings, Inc. ("Triton") is
furnishing this Proxy Statement to solicit proxies for use at Triton's 2001
Annual Meeting of Stockholders, to be held on Wednesday, May 9, 2001, at 2:00
p.m., local time, at Triton's Corporate Headquarters, 1100 Cassatt Road, Berwyn,
Pennsylvania 19312, and at any adjournment of the meeting. Each valid proxy
received in time will be voted at the meeting according to the choices
specified, if any. A proxy may be revoked at any time before the proxy is voted
as outlined below.
This Proxy Statement and the enclosed proxy card are being first sent
for delivery to stockholders of Triton on or about April 2, 2001. Triton will
pay the cost of solicitation of proxies, including the reimbursement to banks
and brokers for reasonable expenses for sending proxy materials to their
principals.
The shares of Class A common stock represented by valid proxies Triton
receives in time for the Annual Meeting will be voted as specified in such
proxies. Valid proxies include all properly executed written proxy cards not
later revoked. Voting your proxy by mail will not limit your right to vote at
the Annual Meeting if you later decide to attend in person. Executed but
unvoted proxies will be voted:
(1) FOR the election of the Board of Directors' nominees for
Class II directors;
(2) FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as Triton's independent auditors;
and
(3) FOR the amendment of Triton's 1999 Stock and Incentive Plan.
If any other matters properly come before the Annual Meeting, the
persons named on the proxies will, unless the stockholder otherwise specifies in
the proxy, vote upon such matters in accordance with their best judgment.
Voting Securities
Triton's one outstanding class of voting securities is its Class A
common stock, par value $0.01 per share. As of March 26, 2001, there were
outstanding 57,752,370 shares of Class A common stock. Only holders of record
of shares of Class A common stock at the close of business on March 26, 2001,
which the Board of Directors has fixed as the record date, are entitled to vote
at the Annual Meeting.
Each share of Class A common stock is entitled to one vote. The
presence in person or by proxy of holders of record of a majority of the shares
entitled to vote generally will constitute a quorum for the transaction of
business at the Annual Meeting. The affirmative vote of a majority of the votes
entitled to be cast by the issued and outstanding Class A common stock present
at the Annual Meeting in person or by proxy, and entitled to vote, is required
for the election of Class II directors, the ratification of the appointment of
independent auditors and the amendment of Triton's 1999 Stock and Incentive
Plan.
Stockholders may cast their votes in favor of the election of Class II
directors, the ratification of the appointment of the auditors or the amendment
of Triton's 1999 Stock and Incentive Plan or may withhold authority
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to vote for one or more director nominees, withhold authority to vote for
auditors or withhold authority to vote for the amendment of Triton's 1999 Stock
and Incentive Plan. Stockholders withholding authority will be deemed present at
the Annual Meeting for the purpose of determining whether a quorum has been
constituted, but votes withheld will have no effect on the outcome of the vote.
Broker non-votes are not considered shares entitled to vote on the applicable
proposal and are not included in determining whether such proposal is approved.
A broker non-vote occurs when a nominee of a beneficial owner with the power to
vote on at least one matter does not vote on another matter because the nominee
does not have the discretionary voting power and has not received instructions
from the beneficial owner with respect to such matter. Accordingly, broker non-
votes have no effect on the outcome of a vote on the applicable proposal.
Voting by Proxy
Any proxy duly given pursuant to this solicitation may be revoked by
the stockholder at any time prior to the voting of the proxy (i) by written
notice to the Corporate Secretary of Triton at Triton's principal executive
offices, 1100 Cassatt Road, Berwyn, Pennsylvania 19312, (ii) by a later-dated
proxy signed and returned by mail before the Annual Meeting or (iii) by
attending the Annual Meeting and voting in person. Attendance at the Annual
Meeting will not in and of itself constitute a revocation of a proxy.
ELECTION OF CLASS II DIRECTORS
(Proposal No. 1)
The Board of Directors presently consists of seven members. Triton's
Second Restated Certificate of Incorporation provides that the Board of
Directors will be divided into three classes, as nearly equal in number as
possible. Each director will serve a three-year term, and one class will be
elected at each year's annual meeting of stockholders. The term of the Class I
directors will expire at the 2003 Annual Meeting, the term of the Class II
directors will expire at the 2001 Annual Meeting, and the term of the Class III
directors will expire at the 2002 Annual Meeting, with the members of each class
to hold office until their successors are elected and qualified. At each annual
meeting of stockholders, the successors to the class of directors whose term
expires at that annual meeting will be elected to hold office for a term
expiring at the annual meeting of stockholders held in the third year following
the year of their election and until their successors are elected and qualified.
Because the term of the Class II directors expires this year, the
stockholders will vote upon the election of two Class II directors at the Annual
Meeting. The Board of Directors has nominated John D. Beletic and William W.
Hague for Class II directors. Mr. Hague was selected as a Class II director
nominee by AT&T Wireless PCS LLC pursuant to Triton's Second Restated
Certificate of Incorporation.
Unless otherwise directed in the proxy, the persons named in the
enclosed proxy, or the persons' substitute, will vote the proxy for the election
of the persons nominated by the Board of Directors below as Class II directors
for a three-year term and until their respective successors are elected and
qualified. The Board of Directors knows of no reason why any nominee for
director would be unable to serve as director. If, at the time of the Annual
Meeting, any of the nominees is unable or unwilling to serve as a director of
Triton, the persons named in the proxy intend to vote for such substitutes as
may be nominated by the Board of Directors.
Name Age Position
----------------------------------------------------- ------ --------
Nominees for Election to Serve as Directors
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Until the 2004 Annual Meeting
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John D. Beletic...................................... 49 Director
William W. Hague..................................... 45 Director
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Present Directors Elected to Serve Until
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the 2002 Annual Meeting
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Michael E. Kalogris.................................. 51 Chairman of the Board of Directors and Chief
Executive Officer
Steven R. Skinner.................................... 58 President, Chief Operating Officer and Director
John W. Watkins...................................... 39 Director
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Present Directors Elected to Serve Until
-----------------------------------------------------
the 2003 Annual Meeting
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Scott I. Anderson.................................... 42 Director
Arnold L. Chavkin.................................... 49 Director
John D. Beletic has served as a Director of Triton since February 1998.
Mr. Beletic currently serves as Chairman and Chief Executive Officer of WebLink
Wireless, Inc., which he joined in March 1992. He also serves as a director of
Tessco Technologies Inc., iPass Inc. and the Personal Communication Industry
Association.
William W. Hague was appointed as a Director of Triton on April 28, 2000 by
AT&T Wireless PCS LLC and previously served as a Director of Triton from
February 1998 through January 1999. Mr. Hague serves as the Senior Vice
President, Corporate Development, Mergers and Acquisitions at AT&T Wireless
Services, Inc., which he joined in 1995. Prior to joining AT&T Wireless and
beginning in 1992, he acted as Director of Legal Affairs and Human Resources at
Western Wireless, Inc.
Michael E. Kalogris has served as Chairman of the Board of Directors and as
Chief Executive Officer of Triton since its inception. Mr. Kalogris was
previously the Chairman of Triton Cellular Partners, L.P., which specialized in
acquiring and operating rural cellular properties. The assets of Triton
Cellular Partners, L.P. were sold in 2000 for approximately $1.24 billion.
Prior to Triton Cellular Partners, L.P., Mr. Kalogris was President and Chief
Executive Officer of Horizon Cellular Group, which he joined on October 1, 1991.
Under Mr. Kalogris's leadership, Horizon Cellular Group became the fifth-largest
independent cellular company in the United States, specializing in suburban
markets and small cities encompassing approximately 3.2 million potential
customers and was sold for approximately $575.0 million. Prior to joining
Horizon Cellular Group, Mr. Kalogris served as President and Chief Executive
Officer of Metrophone, a cellular carrier in Philadelphia, the nation's fourth-
largest market. Mr. Kalogris is a member of the board of directors of the
Cellular Telecommunications Industry Association and serves on its Executive
Committee and Public Policy Council. He is also a member of the advisory board
of Waller Capital Media Partners and the board of directors of Paoli Hospital.
Steven R. Skinner has served as President and Chief Operating Officer and
as a Director of Triton since its inception. Mr. Skinner previously served as
the Vice President of Operations and Chief Operating Officer of Horizon Cellular
Group beginning in January of 1994. From March 1992 through December 1993, Mr.
Skinner served as Vice President of Acquisitions for Horizon Cellular Group.
From January 1991 to March 1992, he served as a consultant in the area of
cellular acquisitions to Norwest Venture Capital Management, Inc. and others.
From August 1987 to January 1991, he served as President and General Manager of
Houston Cellular Telephone Company. Prior to joining Houston Cellular, he
served as a General Manager of Cybertel, Inc., a non-wireline carrier serving
St. Louis. Mr. Skinner was a member of the advisory board of Triton Cellular
Partners, L.P. and has also been active in the National CellularOne Group, most
recently acting as Chairman of the Advisory Committee.
John W. Watkins has served as a Director of Triton since February 1998.
Mr. Watkins serves as a director of Affinity Internet, Advanced TelCom Group,
Kelmscott Communications and Western Integrated Networks. Mr. Watkins manages
private equity investment activities in the communications industries. He is a
Managing General Partner of Telegraph Hill Communications Partners, L.P.
Previously, Mr. Watkins was a Managing Director and an officer of J.P. Morgan
Capital Corporation.
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Scott I. Anderson has served as a Director of Triton since February
1998. He is currently a member of the board of directors of TeleCorp PCS,
Wireless Facilities, Inc. and Telephia, Inc. and a principal of Cedar Grove
Partners, LLC and Cedar Grove Investments. Mr. Anderson was previously Senior
Vice President for Acquisitions and Development at AT&T Wireless Services, Inc.,
formerly McCaw Cellular Communications, Inc., which he joined in 1986, and a
director of Horizon Cellular Group.
Arnold L. Chavkin has served as a Director of Triton since February
1998. Mr. Chavkin was previously a member of the advisory board of Triton
Cellular Partners, L.P. and is currently a director of American Tower
Corporation, Encore Acquisition Partners, Inc., Crown Media Holdings, R&B Falcon
Corporation, Carrizo Oil and Gas, TIW (Asia), HDFC Bank in India and Better
Minerals & Aggregates Co. He also serves on the Advisory Investment Boards of
Richina Group, the Indian Private Equity Fund and the Asia Development Partners
Fund. Mr. Chavkin has been a General Partner of J.P. Morgan Partners (formerly
Chase Capital Partners) since January 1992. Prior to joining Chase Capital
Partners, he was a member of Chemical Bank's merchant banking group and a
generalist in its corporate finance group specializing in mergers and
acquisitions and private placements for the energy industry.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES.
Security Ownership of Management and Certain Beneficial Owners
The following table sets forth, as of March 26, 2001, the number of
shares of Class A common stock beneficially owned by (i) each current director,
(ii) each current executive officer, (iii) all current directors and executives
officers as a group and (iv) each of Triton's stockholders who, based on
Triton's records, was known to Triton to be the beneficial owner, as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, of more than 5% of the
Class A common stock.
Percentage of Voting
Number of Voting Shares Shares Beneficially
Name and Address of Beneficial Owner (1) Beneficially Owned Owned
-------------------------------------------------------------- -------------------------- ---------------------
Michael E. Kalogris........................................... 2,990,750 (7) 5.18%
Steven R. Skinner............................................. 1,806,558 (8) 3.13
David D. Clark................................................ 349,541 (9) *
Stephen J. McNulty............................................ 199,050(10) *
Daniel E. Hopkins............................................. 91,473(11) *
William A. Robinson........................................... 69,723(12) *
Glen Robinson................................................. 128,473(13) *
Scott I. Anderson............................................. 45,643(14) *
John D. Beletic............................................... 56,343(15) *
Arnold L. Chavkin (2)......................................... ___ ___
William W. Hague (3).......................................... ___ ___
John W. Watkins............................................... ___ ___
J.P. Morgan Partners (23A SBIC), LLC (2) (4).................. 11,409,614 19.76
J.P. Morgan SBIC LLC (4)...................................... 1,821,585(16) 3.15
Desai Capital Management Incorporated (5)..................... 11,067,439(17) 19.16
First Union Affordable Housing Community
Development Corporation (6).............................. 3,793,561(18) 6.57
AT&T Wireless PCS LLC (3)..................................... 12,504,720(19) 17.80
All directors and executive officers as a group (12 persons).. 5,737,554 9.93%
__________
* Represents less than 1%.
(1) Unless otherwise indicated, the address of each person listed in this table
is c/o Triton Management Company, 1100 Cassatt Road, Berwyn, Pennsylvania
19312.
(2) Mr. Chavkin is a vice president of CB Capital Investors, Inc. and a general
partner of J.P. Morgan Partners. Mr. Chavkin disclaims beneficial
ownership of any shares held by such entity, except to the extent of his
pecuniary interest therein. Effective January 1, 2000, (i) J.P. Morgan
Partners (23A SBIC), LLC (formerly know as CB Capital Investors, LLC)
became the successor to CB Capital Investors, L.P., (ii) CB Capital
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Investors, Inc. became the managing member of J.P. Morgan Partners (23A
SBIC), LLC and (iii) J.P. Morgan Partners (formerly Chase Capital Partners)
became the manager, by delegation, of J.P. Morgan Partners (23A SBIC), LLC
pursuant to an advisory agreement with CB Capital Investors, Inc. The
address of CB Capital Investors, LLC is c/o J.P. Morgan Partners, 380
Madison Avenue, New York, New York 10017.
(3) Mr. Hague is Senior Vice President, Corporate Development, Mergers and
Acquisitions at AT&T Wireless Services, Inc., an affiliate of AT&T Wireless
PCS LLC. Mr. Hague disclaims beneficial ownership of any shares held by
such entity. The address of AT&T Wireless Services and AT&T Wireless PCS
LLC is 7277 164th Avenue, N.E., Redmond, Washington 98052.
(4) J.P. Morgan SBIC LLC is the successor to J.P. Morgan Investment
Corporation. J.P. Morgan Partners (23A SBIC), LLC, J.P. Morgan SBIC LLC
and Sixty Wall Street SBIC Fund, L.P. are subsidiaries of J.P. Morgan Chase
& Co., which is the successor of the merger of The Chase Manhattan
Corporation and J.P. Morgan & Co. Incorporated completed on December 31,
2000.
(5) The address of Desai Capital Management Incorporated is 540 Madison Avenue,
New York, New York 10022.
(6) The address of First Union Affordable Housing Community Development
Corporation is One First Union Center, 301 S. College Street, 12th Floor,
Charlotte, North Carolina 28288.
(7) Includes 546,084 shares of Class A common stock held by Mr. Kalogris as
trustee under an amended and restated common stock trust agreement for
management employees and independent directors, dated June 26, 1998, under
which Triton will distribute Class A common stock to management employees
and independent directors. 854,718 of the 2,444,666 shares of Class A
common stock directly held by Mr. Kalogris are subject to forfeiture in
accordance with Mr. Kalogris' employment agreement. 279 shares of Class A
common stock held by Mr. Kalogris were purchased under Triton's Employee
Stock Purchase Plan.
(8) 641,038 of the 1,806,558 shares of Class A common stock are subject to
forfeiture according to the terms of Mr. Skinner's employment agreement.
(9) 204,216 of the 349,541 shares of Class A common stock are subject to
forfeiture according to the terms of letter agreements, dated as of
February 4, 1998 and August 9, 1999, between Triton and Mr. Clark.
(10) 142,563 of the 199,050 shares of Class A common stock are subject to
forfeiture according to the terms of letter agreements, dated as of January
11, 1999, August 9, 1999 and August 15, 2000, between Triton and Mr.
McNulty. 279 shares of Class A common stock held by Mr. McNulty were
purchased under Triton's Employee Stock Purchase Plan.
(11) 55,000 of the 91,473 shares of Class A common stock are subject to
forfeiture according to the terms of letter agreements, dated as of July
15, 1999 and November 9, 2000, between Triton and Mr. Hopkins.
(12) 61,250 of the 69,723 shares of Class A commons stock are subject to
forfeiture according to the terms of letter agreements, dated as of June
30, 1999 and August 15, 2000, between Triton and Mr. W. Robinson.
(13) Includes 53,473 shares of Class A common stock held directly by Mr. G.
Robinson's spouse. Mr. G. Robinson disclaims beneficial ownership of any
shares held by his spouse. 75,000 of the 128,473 shares of Class A common
stock are subject to forfeiture according to the terms of a letter
agreement, dated as of May 23, 2000, between Triton and Mr. G. Robinson.
(14) Mr. Anderson is a principal of Cedar Grove Partners, LLC. He disclaims
beneficial interest of the 23,000 shares of Class A common stock owned
directly by Cedar Grove Partners, LLC, except to the extent of his
pecuniary interest therein.
(15) Includes 800 shares of Class A common stock held directly by Mr. Beletic's
daughter. Mr. Beletic disclaims beneficial ownership of any shares held by
his daughter.
(16) Includes 86,620 shares of Class A common stock held by Sixty Wall Street
SBIC Fund, L.P., an affiliate of J.P. Morgan SBIC LLC and J.P. Morgan
Partners (23A SBIC), LLC. The address for Sixty Wall Street SBIC is 60
Wall Street, New York, New York 10260. J.P. Morgan SBIC LLC also owns
8,210,827 shares of Class B non-voting common stock.
(17) Consists of 5,951,372 shares of Class A common stock held by Private Equity
Investors III, L.P. and 5,116,067 shares of Class A common stock held by
Equity-Linked Investors-II, each an affiliate of Desai Capital Management.
The address for Private Equity Investors III and Equity-Linked Investors-II
is 540 Madison Avenue, 38th Floor, New York, New York 10022.
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(18) Includes 475,351 shares held by certain affiliates of First Union
Affordable Housing Community Development Corporation.
(19) Consists of 543,683.47 shares of Series D preferred stock convertible into
12,504,720 shares of Class A common stock. Shares of Series D preferred
stock are convertible into an equivalent number of shares of Series C
preferred stock at any time, and shares of Series C preferred stock are
convertible into shares of Class A common stock or Class B non-voting
common stock at any time.
Board of Directors
The Board of Directors met five times in 2000.
Audit Committee of the Board of Directors
General
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The Audit Committee met four times in 2000. The current members of the
Audit Committee are Mr. Anderson, as chairman, Mr. Chavkin and Mr. Hague. The
Audit Committee satisfies the current rules of the National Association of
Securities Dealers regarding the independence of Audit Committee members.
Triton is evaluating the composition of the Audit Committee under the new
independence standards of the NASD that become mandatory as of June 14, 2001.
Each member of the Audit Committee is an outside director, and two of the
members of the Audit Committee are independent directors under the new NASD
rules.
The functions of the Audit Committee include recommending to the Board of
Directors the appointment of Triton's independent accountants; reviewing with
the independent accountants and Triton's internal auditors their annual audit
plans; reviewing management's plans for engaging the independent accountants to
perform management advisory services; discussing with management, the
independent accountants and the internal auditors the adequacy of Triton's
internal controls and financial reporting process; monitoring significant
accounting and reporting issues; and monitoring compliance with Triton's
policies relating to ethics and conflicts of interest. Both the independent
accountants and the internal auditors have unrestricted access to the Audit
Committee, including the opportunity to meet with the Audit Committee alone.
Audit Committee Report
-----------------------
The Audit Committee operates under a written charter adopted by the Triton
Board of Directors. The written charter has been attached as Appendix A to this
Proxy Statement. The Audit Committee recommends to the Board of Directors,
subject to stockholder ratification, the selection of Triton's independent
accountants.
Management is responsible for Triton's internal controls and the financial
reporting process. The independent accountants are responsible for performing
an independent audit of Triton's consolidated financial statements in accordance
with generally accepted auditing standards and to issue a report thereon. The
Audit Committee's responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has reviewed and discussed the
consolidated financial statements with management and the independent
accountants. The Audit Committee discussed with the independent accountants
matters required to be discussed by Statement of Auditing Standards No. 61, as
amended (Communication with Audit Committees).
Triton's independent accountants also provided to the Audit Committee the
written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committee), and the Audit
Committee discussed with the independent accountants the firm's independence.
Based upon the Audit Committee's review and discussions with management and
the independent accountants, the Audit Committee recommended that the Board of
Directors include the audited consolidated financial statements in Triton's
Annual Report on Form 10-K for the year ended December 31, 2000 filed with the
Securities and Exchange Commission.
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The Audit Committee has considered whether the provision by
PricewaterhouseCoopers LLP of non-audit services to Triton is compatible with
maintaining the independence of PricewaterhouseCoopers LLP.
Scott I. Anderson
Arnold L. Chavkin
William W. Hague
Audit Fees
----------
The aggregate fees billed for professional services rendered for the audit
of Triton's annual financial statements for 2000 and the reviews of the
financial statements included in Triton's quarterly reports on Form 10-Q for
2000 were $115,000.
Financial Information Systems Design and Implementation Fees
------------------------------------------------------------
The aggregate fees billed for financial information systems design and
implementation rendered by PricewaterhouseCoopers LLP for 2000 were $44,000.
All Other Fees
--------------
The aggregate fees billed by PricewaterhouseCoopers LLP for services other
than those described above under "Audit Fees" and "Financial Information Systems
Design and Implementation Fees" for 2000 were $231,000.
Compensation Committee of the Board of Directors
General
-------
The Compensation Committee met twice in 2000. The current members of the
Compensation Committee are Mr. Beletic, as chairman, Mr. Chavkin and Mr.
Watkins.
The functions of the Compensation Committee include overseeing the
administration of Triton's compensation policies and practices; establishing and
administering the compensation plans of members of senior management and
authorizing any adjustments thereto; administering Triton's Stock and Incentive
Plan and authorizing all awards granted thereunder; administering Triton's
Employee Stock Purchase Plan; and reporting annually to the stockholders of
Triton on matters concerning the compensation of executives of Triton.
Compensation Committee Report on Executive Compensation
-------------------------------------------------------
The Compensation Committee consists of three non-employee directors. The
Compensation Committee regularly reviews Triton's executive compensation
policies and practices and establishes the salaries of executive officers.
Executive Compensation Policy. The Compensation Committee's executive
compensation policy is founded on principles that guide Triton in establishing
all its compensation programs. Triton designs compensation programs to attract,
retain and motivate highly talented individuals at all levels of the
organization. In addition, the programs are designed to be cost-effective and
to treat all employees fairly. To that end, all programs, including those for
executive officers, share these characteristics:
. Compensation is based on the level of job responsibility, individual
performance and Triton's performance. Members of senior management
have a greater portion of their pay based on Triton's performance
than other employees.
. Compensation also reflects the value of the job in the marketplace. To
retain its highly skilled work force, Triton strives to remain
competitive with the pay of other highly respected employers who
compete with Triton for talent.
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. To align the interests of employees with those of stockholders, Triton
provides employees at all levels of the organization the opportunity
for equity ownership through various Triton programs. In addition,
executive officers and other key employees have the opportunity to
build more substantial equity ownership through Triton's stock plans.
. Compensation programs are developed and administered to foster the
long-term focus required for success in the wireless communications
industry.
The Compensation Committee believes that Triton's executive compensation
program reflects the principles described above and provides executives strong
incentives to maximize Triton's performance and therefore enhance shareholder
value. The program consists of both annual and long-term components. The
Compensation Committee believes that the executive compensation program should
be considered as a whole in order to properly assess whether it is attaining its
objectives.
In establishing total compensation, the Compensation Committee considers
various measures of Triton's historical and projected performance, including
revenues, operating results, new market launches, meeting network build-out
schedules and cost budgets and implementation of information technology
services. These data form the basis for the Compensation Committee's assessment
of the overall performance and prospects of Triton that underpin the
Compensation Committee's judgment in establishing total compensation ranges. In
evaluating these factors the Compensation Committee assigns them relative
weighted values.
Triton also retains independent compensation and benefits consultants to
assist in evaluating executive compensation programs. The use of independent
consultants provides additional assurance that Triton's programs are reasonable
and appropriate to Triton's objectives.
Components to Executive Compensation.
. Annual Cash Compensation. Annual cash compensation for 2000 consisted
------------------------
of two components: base salary and a cash bonus. Base salaries and cash
bonuses are determined with reference to Triton and individual
performance for the previous year, internal relativity and market
conditions, including pay at the wireless communications companies of
like size and stature to Triton and general inflationary trends.
Assessment of individual performance includes considerations of a
person's impact on financial performance as well as judgment,
creativity, effectiveness in developing subordinates and a diverse
organization, and contributions to improvement in the quality of
Triton's products, services and operations. As noted above, Triton uses
the data from companies of like size and stature as well as other market
data to test for reasonableness and competitiveness of base salaries but
also exercises subjective judgment in view of Triton's compensation
objectives.
. Long-Term Incentive Compensation. Long-term incentive awards
--------------------------------
typically are granted to provide executive officers with a
competitive long-term incentive opportunity and an identity of
interest with Triton. Long-term incentives generally will be provided
under Triton's Stock and Incentive Plan, which is administered by the
Compensation Committee. Triton's Stock and Incentive Plan affords the
Compensation Committee the flexibility of offering long-term
incentive awards in the form of incentive stock options, nonqualified
stock options and restricted stock. The intent of such awards is to
provide the recipient with an incentive to perform at levels that
will result in better performance by Triton and enhanced stock value.
To date, no stock options have been awarded under Triton's Stock and
Incentive Plan.
Chief Executive Officer Compensation. The executive compensation policy
described above was applied in establishing the 2000 compensation for Mr.
Kalogris, with the basic compensation levels as determined pursuant to an
employment agreement between Mr. Kalogris and Triton, dated February 4, 1998, as
amended. Mr. Kalogris participated in the same executive compensation plans
available to Triton's other executive officers.
-8-
In 2000, Mr. Kalogris had a base salary of $391,757. On the basis of
Triton's performance versus established goals and Mr. Kalogris's individual
performance, the Board of Directors determined that an annual cash bonus of
$385,000 had been earned in 2000.
Tax Deductibility Considerations. Section 162(m) of the Internal Revenue
Code limits the deductibility of compensation in excess of $1 million paid to
the executive officers named in this proxy statement, unless certain
requirements are met. It is the present intention of the Compensation Committee
to preserve the deductibility of compensation under Section 162(m) to the extent
the Compensation Committee believes that doing so would be consistent with the
best interests of stockholders. As such, long-term incentive compensation
awards, particularly stock option awards, generally are designed to meet the
requirements for deductibility under Section 162(m).
John D. Beletic
Arnold L. Chavkin
John W. Watkins
Compensation of Directors
The members of the board of directors receive compensation of $10,000
per year, plus $1,000 for each meeting they attend in person and $500 for each
meeting they attend via conference call. Independent and management directors
may also receive shares of Class A common stock that may, from time to time, be
awarded to them under Triton's Stock and Incentive Plan.
Executive Officers
The executive officers of Triton who are not directors are set forth
below. Executive officers of Triton are elected by the Board of Directors at
the meeting of the Board of Directors held immediately following the annual
meeting of stockholders to hold office until the next succeeding meeting of the
Board of Directors held immediately following the annual meeting of
stockholders. In the event of the failure to elect executive officers at the
annual meeting of the Board of Directors, executive officers may be elected at
any regular or special meeting of the Board of Directors. Each executive holds
office until his or her successor has been elected and qualified, or until his
or her earlier death, resignation or removal.
David D. Clark, 36, has served as Executive Vice President, Chief Financial
Officer and Secretary of Triton since its inception. Mr. Clark served as Chief
Financial Officer of Triton Cellular Partners, L.P. from inception through April
2000. Before joining Triton, he was a Managing Director at Furman Selz L.L.C.
specializing in communications finance, which he joined in February 1996. Prior
to joining Furman Selz, Mr. Clark spent over ten years at Citibank N.A. and
Citicorp Securities Inc. as a lending officer and a high yield finance
specialist.
Stephen J. McNulty, 47, has served as Senior Vice President of Sales and
Marketing of Triton and President of SunCom since January 2001 and as President
and General Manager of Triton's Mid-Atlantic region from July 1998 through
December 2000. Before joining Triton, he was Vice President Central/West
Operations with United States Cellular in Chicago, Illinois. Mr. McNulty
previously served as Vice President of Marketing for ALLTEL Communications from
February 1994 to May 1997.
Daniel E. Hopkins, 36, has served as Senior Vice President of Finance and
Treasurer of Triton since July 1998. Mr. Hopkins served as Treasurer for Triton
Cellular Partners, L.P., from July 1998 through April 2000. From May 1994 until
joining Triton, he was a Vice President at PNC Bank, where he focused primarily
on the financing of telecommunications ventures. Mr. Hopkins has over ten years
of banking experience, primarily in the areas of Communications Finance and
Acquisitions/Leveraged Finance.
Glen Robinson, 42, has served as Senior Vice President of Technology of
Triton since January 2001 and as Senior Vice President of Engineering and
Information Technology from April 2000 through December 2000. Before joining
Triton, Mr. Robinson served as Chief Technology Officer of Triton Cellular
Partners, L.P. from July 1998 through March 2000 and served as Director or
Technical Operations for AT&T Wireless' Philadelphia OCS
-9-
and Pittsburgh Cellular Markets from September 1994 through June 1998. Mr.
Robinson has over twenty years of progressive telecommunications experience,
primarily in the area of engineering.
William A. Robinson, 34, has served as Senior Vice President of Operations
of Triton since January 2001 and as Vice President and Controller from March
1998 through December 2000. Before joining Triton, Mr. Robinson served as
Director, Financial Reporting for Freedom Chemical Company from June 1997
through March 1998 and Director, Financial Analysis, Planning & Budgeting for
Centeon L.L.C. from December 1995 through June 1997.
Executive Compensation
Summary Compensation Table
Annual Compensation
---------------------------
Restricted Stock All Other
Name Principal Position Year Salary Bonus Awards (1) Compensation (2)
----------------------- ------------------------------ ------- -------- -------- -------------------- -----------------------
Michael E. Kalogris Chairman of the Board of 2000 $391,757 $385,000 __ $ 2,376
Directors and Chief Executive 1999 $373,967 $350,000 $ 792,942 $ 5,204
Officer 1998 $350,000 $350,000 $11,959,963 $ 102
Steven R. Skinner President, Chief Operating 2000 $274,519 $275,000 __ $ 5,364
Officer and Director 1999 $267,236 $250,000 $ 594,707 $ 5,204
1998 $225,000 $225,000 $ 8,969,973 $ 2,102
David D. Clark Executive Vice President, 2000 $220,038 $220,000 __ $ 5,364
Chief Financial Officer and 1999 $208,231 $200,000 $ 2,957,471 $ 5,204
Secretary 1998 $190,000 $190,000 $ 3,334,260 $ 2,081
Stephen J. McNulty Senior Vice President of 2000 $182,795 $176,000 $ 3,316,931 $37,270
Sales and Marketing and 1999 $168,554 $176,000 $ 2,166,243 $ 5,204
President of SunCom 1998 $ 79,800 $100,000 __ $11,939
Glen Robinson Senior Vice President of 2000(3) $ 96,923 $ 78,750 $ 3,483,000 $ 114
Technology
__________
(1) Consists of 1,348,011, 361,742 and 146,424 restricted shares of Triton's
Class A common stock awarded during 1998, 1999 and 2000, respectively, that
vest over a five-year period commencing on the date of grant with an
aggregate value of $45,748,123, $12,276,619 and $4,969,265, respectively,
based upon the closing sales price of the Class A common stock on December
31, 2000. A significant portion of these shares remain subject to
forfeiture at December 31, 2000. See "Security Ownership of Management and
Certain Beneficial Owners." Mr. Kalogris' and Mr. Skinner's awards vest as
follows: 10% vested as of February 4, 1998, 5% vested during 1999 in
connection with the completion of Phase I of Triton's network build-out and
17% vest per year for five years beginning February 4, 1999. A portion of
Mr. Clark's and Mr. McNulty's awards vest as follows: 20% per year for
five years beginning February 4, 1999, and the balance of their awards vest
as follows: 20% per year for five years beginning August 9, 2000.
Notwithstanding the vesting schedules set forth above, all restricted
shares vest in specified circumstances constituting a change of control.
(2) Reflects matching contributions to the Triton PCS Holdings, Inc. 401(k)
plan made on behalf of the named executive officers above during 2000, and
insurance premiums paid by Triton during the same period for term life
insurance secured for the benefit of Triton's executive officers, as
follows: Mr. Kalogris $7,262 and $420, respectively; Mr. Skinner $12,450
and $420, respectively; Mr. Clark $12,229 and $420, respectively; Mr.
McNulty $11,850 and $420, respectively; and Mr. Robinson $0 and $114,
respectively. It also reflects payment of relocation expenses incurred by
Mr. McNulty during 1998 and 2000 in the amount of $10,237 and $31,906,
respectively.
(3) Reflects compensation earned by Mr. Robinson from date of hire, April 1,
2000, through December 31, 2000.
-10-
Several executive officers were issued shares of restricted stock in
connection with the consummation of Triton's joint venture with AT&T Wireless,
the Norfolk acquisition, the Myrtle Beach acquisition and the license exchange
with AT&T Wireless. In addition, several executive officers were issued
restricted stock under the amended and restated common stock trust agreement for
management employees and independent directors dated June 26, 1998. 546,084
shares, or .95% of Triton's total outstanding Class A common stock, is currently
held in trust under this common stock trust agreement of which Michael E.
Kalogris is the trustee. The trustee is required to distribute stock from the
trust to management employees and independent directors as directed in writing
by executive management with the authorization of the Compensation Committee of
the Board of Directors. Triton's Compensation Committee determines at its
discretion which persons shall receive awards and the amount of such stock
awards. Triton's Stock and Incentive Plan governs the shares and letter
agreements previously issued and to be issued from the trust established
pursuant to the common stock trust agreement.
Employment Agreements
Michael E. Kalogris. On February 4, 1998, Triton entered into an
employment agreement with Michael E. Kalogris, Chairman of Triton's Board of
Directors and Chief Executive Officer. Mr. Kalogris' employment agreement has a
term of five years unless the agreement is terminated earlier by either Mr.
Kalogris or Triton. Mr. Kalogris may terminate his employment agreement:
. at any time at his sole discretion upon 30 days' prior written notice;
and
. immediately, upon written notice for good reason, which includes:
(a) if there is a change of control, as defined in the employment
agreement;
(b) if Mr. Kalogris is demoted, removed or not re-elected as Chairman of
Triton's Board of Directors. However, so long as Mr. Kalogris remains
a member of Triton's Board of Directors and Triton's Chief Executive
Officer, it is not considered good reason if Mr. Kalogris is no
longer Chairman of Triton's Board of Directors;
(c) there is a material diminishment of Mr. Kalogris' responsibilities,
duties or status and that diminishment is not rescinded within 30
days after receiving written notice of the diminishment;
(d) Triton fails to pay or provide benefits to Mr. Kalogris when due and
does not cure that failure within 10 days of receiving written notice
of that failure;
(e) Triton relocates its principal offices more than 30 miles from
Malvern, Pennsylvania without the consent of Mr. Kalogris; or
(f) Triton purports to terminate Mr. Kalogris for cause for any reason
other than those permitted as for cause reasons under the employment
agreement.
Triton may terminate Mr. Kalogris' employment agreement:
. at any time, upon written notice, without cause at Triton's sole
discretion;
. for cause; or
. upon the death or disability of Mr. Kalogris.
If Mr. Kalogris terminates the employment agreement for good reason other
than due to a change of control, or Triton terminates the employment agreement
without cause, Mr. Kalogris is entitled to receive the following severance
benefits:
. $1.0 million;
-11-
. up to an additional $0.5 million if he is unable to secure employment in
a senior executive capacity by the second anniversary of the date of
termination;
. the vesting of some of his unvested shares as follows:
(a) if the termination occurs between February 4, 2001 and February 3,
2002, 25% of the unvested shares will vest; and
(b) if the termination occurs after such period, none of the unvested
shares will vest.
Triton will also allow Mr. Kalogris to participate in all health, dental,
disability and other benefit plans maintained by Triton for a period of two
years following the date of termination of the employment agreement.
If Mr. Kalogris' employment is terminated on or after the initial five-
year term of the employment agreement or due to Triton's failure to renew the
agreement, Triton will pay him a severance benefit in the amount of his base
salary at that time. Mr. Kalogris' employment agreement provides for an initial
annual base salary of $350,000, subject to annual increases at the discretion of
the Compensation Committee of the Board of Directors, and an annual bonus in an
amount up to 100% of his base salary based on Triton's performance. Mr.
Kalogris is also entitled to acquire shares of Triton's Class A common stock
under a stock purchase plan that may be created under the terms of the
employment agreement and is required to invest 30% of any amounts he receives on
account of an annual bonus in excess of 50% of his base salary toward the
purchase of such shares.
In the event of any change of control, regardless of whether Mr. Kalogris
terminates the employment agreement, all of his previously unvested shares will
vest immediately.
Steven R. Skinner. On February 4, 1998, Triton entered into an
employment agreement with Steven R. Skinner, Triton's President and Chief
Operating Officer. The employment agreement has a term of five years unless
terminated earlier by either Mr. Skinner or Triton. Mr. Skinner may terminate
his employment agreement:
. at any time at his sole discretion upon 30 days' prior written notice;
and
. immediately, upon written notice for good reason, which includes:
(a) if there is a change of control, as defined in the employment
agreement;
(b) if Mr. Skinner is demoted;
(c) there is a material diminishment of Mr. Skinner's responsibilities,
duties or status and that diminishment is not rescinded within 30
days after receiving written notice of the diminishment;
(d) Triton fails to pay or provide benefits to Mr. Skinner when due and
does not cure that failure within 10 days of receiving written notice
of that failure;
(e) Triton relocates its principal offices more than 30 miles from
Malvern, Pennsylvania without the consent of Mr. Skinner; or
(f) Triton purports to terminate Mr. Skinner for cause for any reason
other than those permitted as for cause reasons under the employment
agreement.
Triton may terminate the employment agreement:
. at any time, upon written notice, at Triton's sole discretion;
. for cause; or
. upon the death or disability of Mr. Skinner.
-12-
If Mr. Skinner terminates the employment agreement for good reason other
than due to a change of control, or Triton terminates the employment agreement
without cause, Mr. Skinner is entitled to receive the following severance
benefits:
. $675,000;
. up to an additional $337,500 if he is unable to secure employment in a
senior executive capacity by the second anniversary date of the
termination of the agreement;
. the vesting of some of his unvested shares as follows:
(a) if the termination occurs between February 4, 2001 and February 3,
2002, 25% of the unvested shares will vest; and
(b) if the termination occurs after such period, none of the unvested
shares will vest.
Triton will also allow Mr. Skinner to participate in all health, dental,
disability and other benefit plans maintained by Triton for a period of two
years following the date of termination of the agreement.
If Mr. Skinner's employment is terminated on or after the initial five-year
term of the employment agreement or due to Triton's failure to renew the
employment agreement, Triton will pay Mr. Skinner a severance benefit in the
amount of his base salary at that time. Mr. Skinner's employment agreement
provides for an initial annual base salary of $225,000, subject to annual
increases at the discretion of the Compensation Committee of the Board of
Directors, and an annual bonus in an amount up to 100% of his base salary based
on Triton's performance. Mr. Skinner is also entitled to acquire shares of
Triton's Class A common stock under a stock purchase plan that may be created
under the terms of the employment agreement and is required to invest 30% of any
amounts he receives on account of an annual bonus in excess of 50% of his base
salary toward the purchase of such shares.
In the event of any change of control, regardless of whether Mr. Skinner
terminates the employment agreement, all of his previously unvested shares will
vest immediately.
Performance Graph
TRITON PCS HOLDINGS, INC.
10/27/99 12/99 12/00
-------- ------ -----
Triton PCS Holdings, Inc. $ 100 $ 253 $189
Nasdaq Stock Market $ 100 $ 145 $ 87
Nasdaq Telecommunications $ 100 $ 133 $ 57
* $100 INVESTED ON 10/27/99 IN STOCK OR INDEX--
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
-13-
Compensation Committee Interlocks and Insider Participation
The members of Triton's Compensation Committee include Mr. Chavkin, who is
a general partner of J.P. Morgan Partners (formerly Chase Capital Partners) and
Mr. Watkins, who was a managing director and officer of J.P. Morgan Capital
Corporation during 2000. See "Certain Relationships and Related Transactions"
for a description of various transactions between affiliates of these entities
and Triton.
Certain Relationships and Related Transactions
Triton is a party to the following agreements with management and its
principal stockholders.
The Stockholders' Agreement
----------------------------
General. Triton has entered into an amended and restated stockholders'
agreement, dated as of October 27, 1999, with AT&T Wireless PCS, its initial
institutional investors, which Triton refers to as the cash equity investors,
and certain of Triton's current and former executive officers. Additional
management stockholders and the independent directors have also agreed to be
bound by the provisions of the stockholders' agreement in connection with the
issuance to them of Triton's capital stock. The agreement covers matters in
connection with Triton's management and operations and the sale, transfer or
other disposition of Triton's capital stock.
Board of Directors. A board of directors divided into three classes and
consisting of seven persons governs Triton. Actions of the board of directors
require the affirmative vote of a majority of the entire board, although some
transactions require a higher vote. The stockholders who are party to Triton's
stockholders' agreement, other than J. P. Morgan SBIC LLC, have agreed that they
will vote their shares together to elect as two of Triton's seven directors the
nominees selected by Triton's cash equity investors and, so long as AT&T
Wireless PCS has the right to nominate a director under Triton's certificate of
incorporation, to elect AT&T Wireless PCS's nominee.
Representatives of AT&T Wireless PCS and several cash equity investors also
have the right to attend each meeting of the board of directors as observers,
provided that they continue to own a certain amount of Triton's capital stock.
A majority of disinterested directors must approve any transactions between
Triton and its stockholders, except for transactions under the stockholders',
license, roaming and resale agreements described in this section and arm's-
length agreements with AT&T Wireless and its affiliates.
Restrictions on Transfer; Rights of First Offer. The stockholders'
agreement imposes restrictions with respect to the sale, transfer or other
disposition of Triton's capital stock held under the terms of the agreement.
Stockholders holding shares of common stock may only transfer their shares of
common stock after complying with rights of first offer and first negotiation
granted to specified parties to the stockholders' agreement. Additionally,
holders of common stock and Series D preferred stock may transfer those shares
at any time to an affiliated successor or an equity investor affiliate, and the
cash equity investors may transfer or otherwise dispose of any of those shares
held by them to any other cash equity investor.
AT&T Wireless PCS may not transfer or dispose of any of its shares of
Series D preferred stock at any time other than to an affiliated successor. In
addition, each stockholder who is a party to the stockholders' agreement has
agreed, subject to some exceptions, not to transfer or otherwise dispose of any
shares of Triton's capital stock to any of the three largest carriers of
telecommunications services that as of February 4, 1998 constituted
interexchange services, other than AT&T Wireless PCS and other specified
wireless carriers.
Registration Rights. The stockholders' agreement grants certain demand
and piggyback registration rights to the stockholders. The following
stockholders may, subject to the restrictions on transfer described above, cause
an underwritten demand registration, subject to customary proportionate cutback
and blackout restrictions, so long as registration is reasonably expected to
result in aggregate gross proceeds of at least $10.0 million to such
stockholder:
-14-
. AT&T Wireless PCS;
. any stockholder or group of stockholders beneficially owning shares of
Series C preferred stock or common stock, if the sale of the shares to
be registered is reasonably expected to result in aggregate gross
proceeds of at least $25.0 million; or
. certain management stockholders beneficially owning at least 50.1% of
the shares of common stock then beneficially owned by all such
management stockholders together.
In addition to the demand registration rights, any stockholder may, subject
to the restrictions on transfer described above, piggyback on a registration by
Triton, other than registrations on Forms S-4 or S-8 of the Securities Act,
subject to customary proportionate cutback restrictions. The demand and
piggyback registration rights and obligations survive until February 4, 2018.
Rights of Inclusion. In the event of a proposed sale by any stockholder
to any person other than an affiliated successor that would constitute 25% or
more of the aggregate outstanding Series C preferred stock and common stock on a
fully-diluted basis, excluding the Series A preferred stock, the other
stockholders have the right to participate in any such proposed sale by
exercising such right within 30 days after receipt of a notice informing them of
such proposed sale. The purchaser may either purchase all stock offered by all
stockholders electing to participate in such sale, or the purchaser may purchase
stock from stockholders electing to participate in such sale on a pro-rata basis
up to the aggregate dollar amount offered by the purchaser to the initial
selling stockholder.
In an investors' agreement, the cash equity investors have agreed that cash
equity investors holding 66 2/3% or more of Triton's Class A common stock and
Class B non-voting common stock held by the cash equity investors, in the
aggregate, who propose to sell their shares of common stock may require the
other cash equity investors to also participate in any such sale. As a result,
such cash equity investors may have the effective right to sell control of
Triton.
Exclusivity. The stockholders have agreed that during the term of the
stockholders' agreement, none of the stockholders nor their respective
affiliates will provide or resell, or act as the agent for any person offering,
within the territory defined in the stockholders' agreement, wireless mobility
telecommunications services initiated or terminated using time division multiple
access technology and frequencies licensed by the FCC. However, AT&T Wireless
PCS and its affiliates may:
. resell or act as agent for Triton;
. provide or resell wireless telecommunications services to or from
specific locations; and
. resell wireless telecommunications services for another person in any
area where Triton has not yet placed a system into commercial service.
AT&T Wireless PCS must provide Triton with prior written notice of its
intention to engage in resales for another person, and only dual band/dual mode
phones may be used in connection with the resale activities. Additionally, with
respect to the markets listed on the roaming agreement, Triton and AT&T Wireless
have agreed to cause their respective affiliates in their home carrier
capacities to program and direct the programming of customer equipment so that
the other party, in its capacity as the serving carrier, is the preferred
roaming provider in such markets. Each party also agrees to refrain from
inducing any of its customers to change programming.
Build-Out. Triton is required to:
. ensure compatibility of its personal communications services systems
with the majority of systems in the southeastern region of the United
States;
. satisfy the FCC construction requirements in the territory defined in
the stockholders' agreement;
. offer various core service features with respect to its systems;
-15-
. cause its systems to comply with AT&T Wireless's time division multiple
access quality standards; and
. refrain from providing or reselling interexchange services, other than
interexchange services under its FCC licenses or that Triton procures
from AT&T Wireless.
If Triton materially breaches any of the foregoing operational obligations
or if AT&T Wireless PCS or its affiliates discontinues the use of time division
multiple access digital technology and adopts a new technology standard in a
majority of its U.S. markets and Triton declines to adopt the new technology,
AT&T Wireless PCS may terminate its exclusivity obligations.
Certain Transactions. In the event of a merger, consolidation, asset
acquisition or disposition or other business combination involving AT&T and an
entity that:
. derives from telecommunications businesses annual revenues in excess of
$5.0 billion;
. derives less than one-third of its aggregate revenues from the provision
of wireless telecommunications; and
. owns FCC licenses to offer and does offer wireless mobility
telecommunications services serving more than 25% of the potential
customers within the territory defined in the stockholders' agreement,
AT&T Wireless will have the right, upon written notice, to terminate
substantially all of its exclusivity obligations described above in a portion of
the territory in which the other party owns an FCC license to offer commercial
mobile radio service. However, upon such a termination, Triton has the right to
cause AT&T Wireless PCS to exchange into shares of Series B preferred stock:
. all of the shares of its Series A preferred stock;
. all of the shares of its Series D preferred stock, its Series C
preferred stock or any common stock it may have received upon conversion
of its Series D preferred stock into any one of them.
In the event that AT&T is required in any such transaction to dispose of
any of its personal communications services systems in the Charlotte, North
Carolina, Atlanta, Georgia, Baltimore, Maryland/Washington, D.C. or Richmond,
Virginia basic trading areas, Triton has certain marketing rights. AT&T has
agreed, for a period of 180 days, to jointly market with any of its applicable
markets any of Triton's personal communications services systems that are
located within the major trading areas that include the applicable AT&T basic
trading areas. Triton's right is exercisable at any time within the period
commencing with the date of the announcement by AT&T of any such transaction and
terminating on the later of six months after consummation of the transaction and
the date by which AT&T is required under applicable law to dispose of any such
system.
Without the prior written consent of AT&T Wireless PCS, Triton and its
subsidiaries may not effect any sale of substantially all the assets or
liquidation, merger or consolidation of Triton or any of its subsidiaries or
engage in any business other than permitted businesses. There are limited
exceptions to this provision.
Acquisition of Cellular Licenses. Triton may acquire cellular licenses
that the board of directors has determined are demonstrably superior
alternatives to construction of a personal communications services system in the
applicable area within the territory, provided that:
. a majority of the cellular potential customers are within the territory
defined in the stockholders' agreement;
. AT&T and its affiliates do not own commercial mobile radio service
licenses in the area; and
-16-
. Triton's ownership of the cellular license will not cause AT&T or any
affiliate to be in breach of any law or contract.
Equipment, Discounts and Roaming. At Triton's request, AT&T Wireless PCS
will use all commercially reasonable efforts to assist Triton in obtaining
discounts from any vendor with whom Triton is negotiating for the purchase of
any infrastructure equipment or billing services and to enable Triton to become
a party to the roaming agreements between AT&T Wireless PCS and its affiliates
which operate other cellular and personal communications services systems so
long as AT&T Wireless PCS, in its sole discretion, does not determine such
activities to be adverse to its interests.
Resale Agreements. At AT&T Wireless PCS's request, Triton will enter into
resale agreements relating to the territory defined in the stockholders'
agreement. The rates, terms and conditions of service that Triton provides
shall be at least as favorable to AT&T Wireless PCS, taken as a whole, as the
rates, terms and conditions provided by Triton to other customers.
Subsidiaries. All of Triton's subsidiaries must be direct or indirect
wholly-owned subsidiaries.
Amendments. Amendments to the stockholders' agreement require the consent
of the following stockholders:
. a majority of the shares of each class of capital stock held by the
parties to the stockholders' agreement, including AT&T Wireless PCS;
. two-thirds of the common stock beneficially owned by the cash equity
investors; and
. 60.1% of the common stock beneficially owned by the management
stockholders.
However, in the event any party to the stockholders' agreement ceases to own any
shares of capital stock, the party ceases to be a party to the stockholders'
agreement and his or her corresponding rights and obligations terminate.
Termination. The stockholders' agreement terminates upon the earliest to
occur of:
. the written consent of each party to the agreement;
. February 4, 2009; and
. one stockholder beneficially owning all of the shares of common stock.
However, certain provisions of the agreement expire on February 4, 2008, and
some consent rights of AT&T Wireless PCS expire if it fails to own a specified
amount of capital stock.
License Agreement
------------------
Under the terms of a network membership license agreement, dated as of
February 4, 1998, between AT&T and Triton, AT&T has granted Triton a royalty-
free, non-exclusive, limited right and license to use various licensed marks
solely in connection with specified licensed activities, as described below.
The licensed marks include the logo containing the AT&T and globe design and the
expression Member, AT&T Wireless Services Network. The licensed activities
include:
. the provision to end-users and resellers, solely within the territory
specified in the agreement, of communications services on frequencies
licensed to Triton for commercial mobile and radio service provided in
accordance with the AT&T agreements; and
. marketing and offering the licensed services within the territory.
-17-
The license agreement also grants Triton the right and license to use the
licensed marks on permitted mobile phones.
AT&T has agreed not to grant to any other person a right or license to
provide or resell, or act as agent for any person offering, the communications
services Triton is offering within the territory under the licensed marks except
to:
. any person who resells, or acts as Triton's agent for, licensed services
provided by Triton, or
. any person who provides or resells wireless communications services to
or from specific locations such as buildings or office complexes, even
if the applicable subscriber equipment being used is capable of routine
movement within a limited area and even if such subscriber equipment may
be capable of obtaining other telecommunications services beyond that
limited area and handing-off between the service to the specific
location and those other telecommunications services.
In all other instances, except as described above, AT&T reserves for itself the
right to use the licensed marks in connection with its provision of services,
whether within or without the territory.
The license agreement contains numerous restrictions with respect to
Triton's use and modification of any of the licensed marks. Triton is obligated
to use commercially reasonable efforts to cause all licensed services that use
the licensed marks to be of comparable quality to the licensed services AT&T
markets and provides in areas comparable to Triton's licensed territory, taking
into account the relative stage of development of the areas and other factors.
The license agreement also sets forth specific testing procedures to determine
compliance with these standards and affords Triton a grace period to cure any
instances of alleged noncompliance. Following the cure period, Triton must
cease using the licensed marks until Triton is in compliance.
Triton may not assign or sublicense any of its rights under the license
agreement. However, the license agreement may be, and has been, assigned to
Triton's lenders under Triton's credit facility. After the expiration of any
applicable grace and cure periods under the credit facility, Triton's lenders
may enforce Triton's rights under the license agreement and assign the license
agreement to any person with AT&T's consent.
The license agreement has a five-year term, expiring February 4, 2003,
which renews for an additional five-year period if neither party terminates the
agreement. The license agreement may be terminated at any time in the event of
Triton's significant breach, including Triton's misuse of any licensed marks,
Triton's license or assignment of any of the rights in the license agreement,
Triton's failure to maintain AT&T's quality standards or if Triton experiences a
change of control. After the initial five-year term, in the event AT&T Wireless
PCS converts any shares of Series A preferred stock into common stock in
connection with the stockholders' agreement, the license agreement terminates on
the later of two years from the date of such conversion and the then existing
expiration date of the license agreement. After the initial five-year term,
AT&T may also terminate the license agreement upon the occurrence of specified
transactions. See "--The Stockholders' Agreement--Certain Transactions."
Roaming Agreement
------------------
Under an intercarrier roamer service agreement, dated as of February 4,
1998, between AT&T Wireless, on behalf of its affiliates, and Triton, AT&T
Wireless and Triton agreed to provide wireless mobility radiotelephone service
for registered customers of the other party's customers when they are out of
their home carrier's geographic area and in the geographic area where the
serving carrier, itself or through affiliates, holds a license or permit to
construct and operate a wireless mobility radio-telephone system and station.
Each home carrier whose customers receive service from a serving carrier shall
pay the serving carrier 100% of the wireless service charges and 100% of the
pass-through charges, such as toll or other charges. The roaming rate charges
to AT&T Wireless for its customers roaming onto Triton's network will decline
over the next several years. In addition, on or after September 1, 2005, the
parties may renegotiate the rate from time to time.
-18-
The roaming agreement has a term of 20 years expiring February 4, 2018,
unless a party terminates earlier due to:
. the other party's uncured breach of any term of the roaming agreement;
. the other party's voluntary liquidation or dissolution; or
. the FCC's revocation or denial of the other party's license or permit to
provide commercial mobile radio service.
Neither party may assign or transfer the roaming agreement or any of its
rights under the agreement except to an assignee of all or part of its license
or permit to provide commercial mobile radio service, provided that the assignee
expressly assumes all or the applicable part of the assigning party's
obligations under the agreement.
Resale Agreement
-----------------
Under the terms of the stockholders' agreement, Triton is required at AT&T
Wireless PCS's request to enter into a resale agreement in an agreed-upon form.
Under the resale agreement, AT&T Wireless will be granted the right to purchase
and resell on a nonexclusive basis access to and usage of Triton's services in
the territory. AT&T Wireless will pay Triton the charges, including usage and
roaming charges, associated with services it requests under the agreement.
Triton will retain the continuing right to market and sell its services to
customers and potential customers.
The resale agreement will have a term of 10 years and will renew
automatically for successive one-year periods unless either party elects to
terminate the agreement. Following the eleventh anniversary of the agreement,
either party may terminate with 90 days' prior written notice. Furthermore,
AT&T Wireless may terminate the agreement at any time for any reason on 180-
days' written notice.
Under the terms of the stockholders' agreement, Triton has agreed that the
rates, terms and conditions of service, taken as a whole, that it provides to
AT&T Wireless under the resale agreement shall be at least as favorable as, or
if permitted by applicable law, superior to, the rates, terms and conditions of
service, taken as a whole, to any other customer. Triton will design the rate
plan it will offer under the resale agreement to result in a discounted average
actual rate per minute of use AT&T Wireless pays for service at least 25% below
the weighted average actual rate per minute that Triton bills its customers
generally for access and air time.
Neither party may assign or transfer the resale agreement or any of its
rights thereunder without the other party's prior written consent, which will
not be unreasonably withheld, except:
. to an affiliate of that party at the time of the agreement's execution;
. by Triton to any of its operating subsidiaries; and
. to the transferee of a party's stock or substantially all of the party's
assets, provided that all FCC and other necessary approvals have been
received.
Other Agreements with AT&T Wireless PCS
---------------------------------------
Triton and AT&T Wireless PCS, from time to time, provide certain other
services to each other, including referring each other to national accounts,
providing development and engineering services related to network build-out and
providing marketing assistance for certain services. Such services are provided
at agreed rates, which are generally based upon market rates.
Other Related Party Transactions
---------------------------------
J.P. Morgan Partners (23A SBIC), LLC, J.P. Morgan SBIC LLC and Sixty Wall
Street SBIC Fund, L.P., which together own approximately 22.91% of Triton's
Class A common stock, are subsidiaries of J.P. Morgan Chase
-19-
& Co. In addition, J.P. Morgan SBIC LLC owns 8,210,827 shares of Triton's Class
B non-voting common stock. J.P. Morgan Chase & Co. is the successor of the
merger of The Chase Manhattan Corporation and J.P. Morgan & Co. completed on
December 31, 2000. Arnold L. Chavkin, a director of Triton, is an officer of
J.P. Morgan Partners (23A SBIC), LLC, and John W. Watkins, also a director of
Triton, was an officer of J.P. Morgan SBIC LLC during 2000.
Affiliates of J.P. Morgan Chase & Co. have performed various financial
advisory, investment banking and commercial banking services from time to time
for Triton and its affiliates, including acting as an initial purchaser for the
offering of Triton PCS, Inc.'s 9 3/8% senior subordinated notes due in 2011 and
participating as a lender and agent under Triton's credit facility.
An affiliate of First Union Affordable Housing Community Development
Corporation, which beneficially owns approximately 6.57% of Triton's capital
stock, served as an underwriter and received underwriter fees in connection with
Triton's equity offering completed in February 2001.
Under an agreement between Triton Cellular, Inc., an entity affiliated with
Triton through management overlap and shared lease facilities, and Triton,
allocations for management services rendered by some of Triton's management
employees on behalf of Triton Cellular and allocations for shared lease
facilities are charged to Triton Cellular. Those allocations totaled $196,000
during 2000. We no longer perform these services in 2001.
On February 3, 1998, Triton PCS, Inc. entered into a credit agreement to
establish a $425.0 million senior secured bank credit facility. The agreement
was amended and restated on September 22, 1999 and on September 14, 2000. The
amount of credit available to Triton PCS under the facility has been increased
to $750.0 million. An affiliate of First Union Affordable Housing Community
Development Corporation, which beneficially owns approximately 6.57% of Triton's
Class A common stock, serves as lender under the credit facility, and an
affiliate of J.P. Morgan Chase & Co., which beneficially owns approximately
22.91% of Triton's Class A common stock, serves as lender and agent under the
credit facility. Each of the lenders and agent under the credit facility has
received and will continue to receive customary fees and expenses in connection
with the credit facility. For the year ended December 31, 2000, an affiliate of
First Union Affordable Housing Community Development Corporation received
approximately $882,347 in its capacity as lender under such facility, and an
affiliate of J.P. Morgan Chase & Co. received approximately $1,759,558 in its
capacity as lender and agent under such facility.
Triton has entered into letter agreements with several of its management
employees and with Triton's independent directors. Under the letter agreements,
these individuals were issued shares of Triton's Class A common stock that
generally vest at 20% per year over a five-year period.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Triton's
executive officers and directors and persons who own more than 10% of Triton's
Class A common stock to file reports of ownership and changes in ownership of
Triton's Class A common stock with the Securities and Exchange Commission.
Based solely on a review of copies of such reports and written representations
from the reporting persons, Triton believes that from January 2000 through the
date of this Proxy Statement, its executive officers, directors and greater than
10% stockholders filed on a timely basis all reports due under Section 16(a) of
the Exchange Act, except that Mr. Hague filed his initial report of beneficial
ownership on Form 3 late.
Selection of Independent Auditors
(Proposal No. 2)
The Board of Directors has selected the firm of PricewaterhouseCoopers LLP as
Triton's independent auditors for the year ending December 31, 2001. Effective
July 16, 1999, Triton engaged PricewaterhouseCoopers LLP as its independent
accountants. KPMG LLP had been Triton's independent accountants prior to July
16, 1999. The decision to change independent accounts was approved by Triton's
Board of Directors. During the period of coverage from March 6, 1997, the date
of inception, through December 31, 1997, the year ended December 31, 1998 and
the subsequent interim period through July 16, 1999, there were no disagreements
with KPMG regarding any
-20-
matters with respect to accounting principles or practices, financial statement
disclosure or audit scope or procedure, which disagreements, if not resolved to
the satisfaction of the former accountants, would have caused KPMG to make
reference to the subject matter of the disagreement in connection with its
report. KPMG's report on Triton's financial statements did not contain an
adverse opinion or disclaimer of opinion or qualifications or modifications as
to uncertainty, audit scope or accounting principles. Prior to July 16, 1999,
Triton had not consulted with PricewaterhouseCoopers LLP on any items which
involved Triton's accounting principles or the form of an audit opinion to be
issued on Triton's financial statements.
Ratification of the appointment of PricewaterhouseCoopers LLP shall be
effective upon receiving the affirmative vote of the holders of a majority of
the voting power of Triton's Class A common stock present or represented by
proxy and entitled to vote at the Annual Meeting.
A representative of PricewaterhouseCoopers LLP will be present at the Annual
Meeting, will be offered the opportunity to make a statement if the
representative so desires and will be available to respond to appropriate
questions. In the event the appointment is not ratified, the Board of Directors
will consider the appointment of other independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT AUDITORS.
ADOPTION OF AMENDMENTS TO THE TRITON PCS HOLDINGS, INC.
1999 STOCK AND INCENTIVE PLAN
(Proposal No. 3)
The Board of Directors has amended the Triton PCS Holdings, Inc. 1999 Stock
and Incentive Plan to increase the number of shares of Triton's Class A common
stock reserved for issuance under the Stock and Incentive Plan. This amendment
is subject to the approval of the stockholders of Triton at the Annual Meeting.
Plan Administration
The purpose of the Stock and Incentive Plan is to align the interests of
employees with those of stockholders by providing incentives to certain
employees of Triton in the form of equity-based compensation. The Stock and
Incentive Plan is administered by the Compensation Committee of the Board of
Directors. Awards under the Stock and Incentive Plan may be made to employees
and directors. The Compensation Committee has sole discretion, subject to the
limitations under the Stock and Incentive Plan, to determine the individuals to
whom awards will be made, the amounts and types of awards to be made, and the
terms, conditions and limitations applicable to each award.
Types and Number of Awards Under the Plan
As previously approved, the Stock and Incentive Plan permits awards
relating to up to 3,454,494 shares of Class A common stock of Triton. The Board
of Directors has approved, subject to the approval of the stockholders, an
additional 1,500,000 shares of Triton's Class A common stock to be reserved for
issuance under the Stock and Incentive Plan. This would provide for a total
share authorization of 4,954,494 shares. No individual may be granted more than
1,000,000 shares in any given year.
All of the share totals described above will be adjusted by the
Compensation Committee in its discretion to reflect any change in the number of
shares of Class A common stock due to any stock dividend, stock split,
combination, recapitalization, merger, spin-off, or similar corporate
transaction.
Restricted Stock
The Compensation Committee may authorize awards of restricted stock.
Restricted stock awards are ordinarily made for no consideration other than
services rendered or to be rendered, unless determined otherwise by the
Compensation Committee. Restricted stock is common stock that is non-
transferable and subject to other
-21-
restrictions determined by the Compensation Committee for a specified period.
Unless the Compensation Committee determines otherwise, or specifies otherwise
in an award agreement, if the employee terminates employment during the
restricted period, then the restricted stock will be forfeited.
Options
While options are authorized under the Stock and Incentive Plan, to date,
the Compensation Committee has not made any stock option awards. The exercise
price of any stock option awarded under the Stock and Incentive Plan will be
determined by the Compensation Committee. Employees may exercise an option by
making payment in any manner specified by the Compensation Committee.
Stock options will become exercisable when they have vested. Vesting
schedules will be established at the discretion of the Compensation Committee
and will be set forth in an agreement or notice of award. No stock option may be
exercised more than 10 years after the date of grant.
Federal Income Tax Consequences of Options
The grant of a stock option under the Stock and Incentive Plan will not
have any immediate effect on the federal income tax liability of Triton or the
employee. If the Compensation Committee grants an employee a non-qualified
stock option, then the employee will recognize ordinary income at the time he or
she exercises the option in an amount equal to the difference between the fair
market value of the common stock and the exercise price, and Triton will receive
a deduction for the same amount.
If the Compensation Committee grants an incentive stock option, the
employee generally will not recognize any taxable income at the time he or she
exercises the incentive stock option, but will recognize income at the time he
or she sells the common stock acquired by exercise of the incentive stock
option. Upon sale of the common stock acquired upon exercise of the incentive
stock option, the employee will recognize income equal to the difference between
the exercise price and the amount received upon sale, and such income generally
will be eligible for capital gain treatment. Triton generally is not entitled
to an income tax deduction in connection with an incentive stock option.
However, if the employee sells the common stock either within two years of the
date of the grant, or within one year of the date of the exercise of the
incentive stock option, then the option is treated for federal income tax
purposes as if it were a non-qualified stock option; the income recognized by
the employee will not be eligible for capital gain treatment and Triton will be
entitled to a federal income tax deduction equal to the amount of income
recognized by the employee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
Other Matters
Management does not know of any other matters to be considered at the Annual
Meeting. If any other matters properly come before the meeting, persons named
in the accompanying form of proxy intend to vote thereon in accordance with
their best judgment, and the discretionary authority to do so is included in the
Proxy.
Annual Report On Form 10-K
Triton will provide upon request and without charge to each stockholder
receiving this Proxy Statement a copy of Triton's Annual Report on Form 10-K for
the fiscal year ended December 31, 2000, including the financial statements and
financial statement schedule information included therein, as filed with the
Securities and Exchange Commission on March 16, 2001.
Submission of Stockholder Proposals
The Second Amended and Restated Bylaws of Triton generally require notice of
(i) any proposal to be presented by any stockholder or (ii) the name of any
person to be nominated by any stockholder for election as a director of Triton
at a meeting of the stockholders to be delivered to or mailed and received by
the Corporate Secretary of Triton at Triton's principal executive offices.
Notice must be received by the Corporate Secretary not
-22-
less than 60 or more than 90 days prior to the date of the annual meeting.
Accordingly, failure by a stockholder to act in compliance with the notice
provisions will mean that the stockholder will not be able to nominate directors
or propose new business.
Any stockholders who intend to present proposals at the 2002 Annual Meeting of
Stockholders, and who wish to have such proposals included in Triton's Proxy
Statement for the 2002 Annual Meeting, must ensure that such proposals are
received by the Corporate Secretary of Triton not later than December 9, 2001.
Such proposals must meet the requirements set forth in the rules and regulations
of the Securities and Exchange Commission in order to be eligible for inclusion
in Triton's 2002 proxy materials.
By Order of the Board of Directors,
/s/ David D. Clark
David D. Clark
Corporate Secretary
Berwyn, Pennsylvania
April 2, 2001
-23-
Appendix A
----------
Charter of the Audit Committee of the Board of Directors
--------------------------------------------------------------------------------
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports provided by the Company to the public; the Company's
systems of internal controls regarding finance, accounting and legal
compliance that management and the Board have established; and the
Company's auditing, accounting and financial reporting processes generally.
Consistent with this function, the Audit Committee should encourage
continuous improvement of, and should foster adherence to, the Company's
policies, procedures and practices at all levels. The Audit Committee's
primary duties and responsibilities are to:
Serve as an independent and objective party to monitor the Company's
financial reporting process and internal control system.
Review and appraise the audit effort of the Company's independent
accountants.
Provide an open avenue of communication among the independent
accountants, financial and senior management, and the Board of
Directors.
The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors, each of
whom shall be independent directors, as determined by the Board that are
free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her judgment as a member of the
Committee. All members of the Committee shall be able to read and
understand fundamental financial statements, including a balance sheet,
income statement and cash flow statement, and at least one member shall
have had past employment experience in finance or accounting, requisite
professional certification in accounting, or other comparable experience or
background.
The members of the Committee shall be elected by the Board at any annual,
regular or special organizational meeting of the Board and shall serve on
the Committee until they resign or their successors shall be duly elected
and qualified. Unless a Chair is elected by the full Board, the members of
the Committee may designate a Chair by majority vote of the full Committee
membership.
III. MEETINGS
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. As part of its job to foster open communication,
the Committee should meet at least annually with management, the manager of
the internal auditing department, and the independent accountants, in
separate executive sessions, to discuss privately the Company's performance
and practices. In addition, the Committee or at least its Chairperson
should meet with the independent accountants and management quarterly to
review the Company's interim financial statements.
-1-
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
(1) Annually review and reassess the adequacy of this Charter and make
recommendations to the Board, as conditions dictate, to update this
Charter.
(2) Annually review and approve the selection of the firm of certified
public accountants to be employed by the Company as its independent
auditors for the ensuing year. The Committee and the Board have the
ultimate authority and responsibility to select, evaluate and, where
appropriate, replace the outside auditor. The independent accountants
are ultimately accountable to the Committee and the entire Board for
such accountant's audit of the financial statements of the Company.
On an annual basis, the Committee should review and discuss with the
accountants all significant relationships the accountants have with
the Company to determine the accountants' independence with respect to
the Company.
(3) Oversee independence of the accountants by:
. receiving from the accountants, on a periodic basis, a formal
written statement delineating all relationships between the
accountants and the Company consistent with Independence Standards
Board Standard 1;
. reviewing, and actively discussing with the Board, if necessary,
and the accountants, on a periodic basis, any disclosed
relationships or services between the accountants and the Company
or any other disclosed relationships or services that may impact
the objectivity and independence of the accountants; and
. recommending, if necessary, that the Board take certain action to
satisfy itself of the auditor's independence with respect to the
Company.
(4) Annually review the engagement of the independent auditors, including
the scope, extent and procedures of the audit and other services
provided, and the compensation to be paid therefor.
(5) Review and approve all professional services provided to the Company
by its independent auditors and any of its affiliates and consider the
possible effect of such services on the independence of such auditors.
(6) Request the independent auditors to provide an annual (and from time
to time as necessary if specific issues arise) overview of key
industry accounting and financial reporting issues/practices that are
material to the Company and discuss with such auditors the Company's
practices in those areas.
(7) Discuss with management and the independent auditors any changes to
the accounting and reporting principles and practices applied by the
Company in preparing its financial statements. Discuss any material
regulatory, litigation or tax matters that may impact financial
statements.
(8) Review with the senior management of the Company and the independent
auditors information as reported in the Company's financial statements
and supplemental disclosures to the SEC. Such information should
include: (a) the Company's balance sheet, income statement, and
statement of cash flows for each interim period, including a
discussion with the independent accountants of the matters to be
discussed by Statement of Auditing Standards No. 61, as amended (SAS
No. 61), and (b) upon completion of their audit, the annual financial
statements , including a discussion with the independent accountants
of the matters required to be discussed by SAS No. 61.
-2-
(9) Discuss company performance and practices with independent auditors,
outside the presence of management, at least annually.
(10) Review with independent auditors the cooperation they received during
their audit examination, including their access to all requested
records, data and information. Elicit the comments of management
regarding the responsiveness of the independent auditors to the
Company's needs.
(11) Consult with the independent auditors and discuss with senior
management of the Company the scope and quality of internal accounting
and financial reporting controls in effect.
(12) Investigate, review and report to the Board of Directors the propriety
and ethical implications of any transactions, as reported or disclosed
to the Committee by the independent auditors, employees, officers,
members of the Board of Directors or otherwise, between (a) the
Company and (b) any employee, officer or member of the Board of
Directors of the Company, or any affiliates of the foregoing.
(13) Periodically review and assess the Company's internal audit function,
including but not limited to personnel involved, practices and
procedures, reporting structure and any material issues or concerns
identified by internal audit processes. At least annually, outside
the presence of management, discuss with the Company's highest-ranking
internal auditor the responsiveness of management and the independent
auditors to any material issues or concerns identified by internal
audits.
(14) Annually review with management and the Company's legal and/or tax
advisors, as appropriate, the Company's system and processes for
monitoring compliance with laws and regulations.
(15) Ensure that a code of conduct is formalized in writing, and that a
process exists to notify all employees about such code.
(16) Periodically obtain updates from management, general counsel and
internal audit regarding compliance with the Company's code of
conduct.
(17) Report to the Board of Directors from time to time, or whenever it
shall be called upon to do so.
-3-
DETACH HERE
PROXY
TRITON PCS HOLDINGS, INC.
1100 Cassatt Road
Berwyn, PA 19312
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Triton PCS Holdings, Inc., a Delaware corporation
(the "Company"), hereby appoints David D. Clark, Scott I. Anderson and Arnold L.
Chavkin, or any of them, with full power of substitution in each of them, to
cast on behalf of the undersigned all votes that the undersigned is entitled to
cast at the Annual Meeting of Stockholders of the Company to be held on
Wednesday, May 9, 2001, at 2:00 p.m., local time, and any adjournment or
postponement thereof, and otherwise to represent the undersigned at the meeting
with all powers possessed by the undersigned if personally present at the
meeting. The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and of the accompanying Proxy Statement and revokes any
proxy heretofore given with respect to such meeting.
The votes entitled to be cast by the undersigned will be cast as instructed on
the reverse side. If this proxy is executed but no instruction is given, the
votes entitled to be cast by the undersigned will be cast "FOR" each of the
nominees for Class II Director and Independent Auditors, respectively, and "FOR"
the amendment of the 1999 Stock and Incentive Plan, as described in the Proxy
Statement and in the discretion of the proxy holder on any other matter that may
properly come before the meeting or any adjournment or postponement thereof.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
DETACH HERE
| X| Please mark
votes as in
this example
1. ELECTION OF TWO CLASS II DIRECTORS
Nominees:
(01) John D. Beletic (02) William W. Hague
FOR WITHHELD
ALL FROM ALL
NOMINEES | | | | NOMINEES
| |
--------------------------------------
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. RATIFICATION OF INDEPENDENT | | | | | |
AUDITORS
Nominee:
PricewaterhouseCoopers LLP
3. AMENDMENT OF TRITON'S 1999 STOCK | | | | | |
AND INCENTIVE PLAN
Any other matters which may properly come before the meeting or any adjournment
or postponement thereof in the discretion of the Proxy Holder.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING | |
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT | |
Note: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee, guardian or officer,
please give full title under signature.
Signature: Date: Signature: Date:
TRITON PCS HOLDINGS, INC.
1999 STOCK AND INCENTIVE PLAN
(adopted May 26, 1999, to be effective as of May 1, 1999)
1. PURPOSE
The purpose of this Triton PCS Holdings, Inc. 1999 Stock and Incentive Plan
(as may be amended from time to time, the "Plan") is to provide a means through
which Triton PCS Holdings, Inc., a Delaware corporation ("Triton"), and its
subsidiaries (collectively, the "Company") may attract able individuals to enter
the employ of the Company or become Independent Directors (as hereinafter
defined) of Triton and to provide a means whereby those individuals upon whom
the responsibilities of the successful administration and management of the
Company rest, and whose present and potential contributions to the welfare of
the Company are of importance, may acquire and maintain stock ownership, thereby
strengthening their concern for the welfare of the Company and their desire to
remain in its employ or as Independent Directors. A further purpose of the Plan
is to provide such individuals with additional incentive and reward
opportunities designed to enhance the profitable growth of the Company. So that
the maximum incentive can be provided, the Plan provides for granting Incentive
Stock Options, Non-Qualified Options and Restricted Stock Awards, or any
combination of the foregoing, as is best suited to the circumstances of the
particular individual.
This Plan is also intended to serve as an amendment and restatement of the
Independent Director Stock Award Plan (the "Directors' Plan") previously adopted
by Triton effective as of February 4, 1998. Any award issued under the
Directors' Plan shall continue in force and effect under the terms of this Plan
and the terms of any letter agreement previously issued under the Directors'
Plan to any participant in that plan. Additionally, this Plan governs the shares
and letter agreements previously issued and to be issued from the trust
established pursuant to the Amended and Restated Common Stock Trust Agreement
for Management Employees and Independent Directors dated as of June 26, 1998
(the "Trust").
2. DEFINITIONS
The following definitions shall be applicable throughout the Plan:
(a) "Award" means, individually or collectively, any Option or Restricted
Stock Award.
(b) "Board" means the Board of Directors of Triton.
(c) "Change of Control" means any transaction or event, or series of
transactions or events, whether voluntary or involuntary, that results in,
or as a
1
consequence of which, any of the following events shall occur: (A) any Person
(as defined in Triton's Stockholders' Agreement) that was not an owner of shares
of capital stock of Triton on the date of execution of the Stockholders'
Agreement shall acquire, directly or indirectly, Beneficial Ownership (as
defined in Rule 13d-3 of the 1934 Act) of more than 50% of the voting stock of
Triton except in connection with any initial public offering of Triton's equity
securities, (B) any sale of all or substantially all of the assets of Triton, or
(C) a proxy contest for the election of directors of Triton results in the
individuals constituting the Board immediately prior to the initiation of such
proxy contest ceasing to constitute a majority of the Board upon the conclusion
of such proxy contest.
(d) "Code" means the Internal Revenue Code of 1986, as amended from time to
time. Reference in the Plan to any section of the Code shall be deemed to
include any amendments or successor provisions to such section and any rules or
regulations promulgated under such section.
(e) "Committee" means the Compensation Committee of the Board or, if no
such committee shall exist, any members of the Board who are selected by the
Board to constitute the Committee.
(f) "Common Shares" means the issued and outstanding shares of Common
Stock.
(g) "Common Stock" means the Common Stock, par value $0.01 per share, of
Triton.
(h) "Company" has the meaning set forth in Section 1.
(i) "Employee" means any individual in an employment relationship with the
Company or any parent or subsidiary corporation (as defined in section 424 of
the Code) of the Company.
(j) "Fair Market Value" means the market price of the Common Shares,
determined by the Committee as follows:
(i) If the Common Shares were traded over-the-counter on the date in
question but were not classified as a national market issue, then
the Fair Market Value shall be equal to the closing bid price
quoted by the NASDAQ system for such date;
(ii) If the Common Shares were traded over-the-counter on the date in
question and were classified as a national market issue, then the
Fair Market Value shall be equal to the last-transaction price
quoted by the NASDAQ system for such date;
2
(iii) If the Common Shares were traded on a stock exchange on the date
in question, then the Fair Market Value shall be equal to the
closing price reported by the applicable composite transactions
report for such date; and
(iv) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith
on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on prices reported in the Eastern Edition of the Wall Street Journal.
Such determination shall be conclusive and binding on all Persons.
(k) "Grant Document" means any Option Agreement or Restricted Stock
Agreement.
(l) "Holder" means an Employee or Independent Director who has been granted
an Option or a Restricted Stock Award.
(m) "Incentive Stock Option" means an incentive stock option within the
meaning of section 422(b) of the Code.
(n) "Independent Director" means an individual elected to the Board by the
stockholders of Triton in accordance with Section 3.1(a)(ii) of Triton's
Stockholders' Agreement.
(o) "Immediate Family" means, with respect to a Holder, the Holder's
spouse, children or grandchildren (including adopted children, stepchildren and
grandchildren).
(p) "1934 Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereby.
(q) "Non-Qualified Option" means an Option that is not an Incentive Stock
Option.
(r) "Option" means an Award under Section 7 and includes both Non-Qualified
Options and Incentive Stock Options to purchase Common Stock.
(s) "Option Agreement" means a written agreement between Triton and a
Holder with respect to an Option.
(t) "Plan" has the meaning set forth in Section 1.
3
(u) "Restricted Stock Agreement" means a written agreement between Triton
and a Holder with respect to a Restricted Stock Award.
(v) "Restricted Stock Award" means an Award granted under Section 8.
(w) "Rule 16b-3" means Securities and Exchange Commission Rule 16b-3
promulgated under the 1934 Act, as such may be amended from time to time, and
any successor rule, regulation, or statute fulfilling the same or similar
function.
(x) "Triton" has the meaning set froth in Section 1.
(y) "Triton's Stockholders' Agreement" means the Stockholders' Agreement
dated as of February 4, 1998 between Triton and the stockholders of Triton named
therein, as the same may be amended, modified or supplemented from time to time.
3. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective as of May 1, 1999, following adoption by
the Board, provided the Plan is approved by the stockholders of Triton within
twelve months thereafter. Notwithstanding any provision in the Plan or in any
Grant Document under the Plan, no Option shall be exercisable and no Award shall
vest prior to such stockholder approval. No further Awards may be granted under
the Plan after ten years after the date the Plan becomes effective. The Plan
shall remain in effect (at least for the purpose of governing outstanding
Awards) until the last to occur of the following: all Option Awards granted
under the Plan have been exercised or expired by reason of lapse of time, all
restrictions imposed upon Restricted Stock Awards have been eliminated or the
Restricted Stock Awards have been forfeited.
4. ADMINISTRATION
(a) Composition of Committee. The Plan shall be administered by the
Committee. Except as may be otherwise provided in the resolution creating such
Committee, at all meetings of any Committee the presence of members (or
alternate members) constituting a majority of the total authorized membership of
such Committee shall constitute a quorum for the transaction of business. The
act of a majority of the members present at any meeting at which a quorum is
present shall be the act of such Committee. Any action required or permitted to
be taken at any meeting of any such Committee may be taken without a meeting, if
all members of such Committee shall consent to such action in writing and such
writing or writings are filed with the minutes of the proceedings of the
Committee.
(b) Powers. Except as may be otherwise provided in the resolution creating
such Committee, and subject to the express provisions of the Plan, the Committee
shall have authority, in its discretion, to determine which Employees or
Independent Directors
4
shall receive an Award, the time or times when such Award shall be made, whether
an Incentive Stock Option or Non-Qualified Option shall be granted and the
number of shares to be subject to each Option and Restricted Stock Award. In
making such determinations, the Committee shall take into account the nature of
the services rendered by the respective Employees or Independent Directors,
their present and potential contribution to the Company's success, and such
other factors as the Committee shall deem relevant. Notwithstanding the
foregoing, any member of the Committee that is an Independent Director shall
abstain from making any determinations set forth above with respect to Awards to
such Independent Director.
(c) Additional Powers. Except as may be otherwise provided in the
resolution creating such Committee, the Committee shall have such additional
powers as are delegated to it by the other provisions of the Plan or as may from
time to time be delegated to such Committee by the Board, including the power to
construe the Plan and the respective Grant Documents thereunder, to prescribe
rules and regulations relating to the Plan and to determine the terms,
restrictions, and provisions of the Grant Document for each Award, including
such terms, restrictions, and provisions. The Committee shall designate Options
to qualify as Incentive Stock Options, ensure that the grants of Awards are
exempt under Rule 16b-3 if applicable, and make all other determinations
necessary or advisable for administering the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any Grant Document relating to an Award in the manner and to the extent it shall
deem expedient to carry it into effect. The Committee may delegate to officers
of the Company the responsibility of performing ministerial acts in furtherance
of the Plan's purposes. The determinations of the Committee on the matters
referred to in this Section 4 shall be conclusive.
5. GRANT OF OPTIONS AND RESTRICTED STOCK AWARDS SUBJECT TO THE PLAN
The Committee may from time to time grant Awards to one or more Employees
or Independent Directors determined by it to be eligible for participation in
the Plan in accordance with the provisions of Section 6. Subject to adjustment
as provided in Section 9, the aggregate number of Common Shares that may be
issued under the Plan shall not exceed 3,454,494, consisting of 1,518,690 shares
of Common Stock issued and to be issued from the Trust and 1,935,804 additional
shares of Common Stock. Subject to adjustment as provided in Section 9, the
aggregate number of Common Shares that may be issued under the Plan to any
individual Employee shall be 100,000. Shares shall be deemed to have been issued
under the Plan only to the extent actually issued and delivered pursuant to an
Award. To the extent that an Award lapses, the rights of its Holder terminate,
an Award is paid in cash or is settled in a manner such that all or some of the
Common Shares covered by the Award are not issued, any Common Shares subject to
such Award shall again be available for the grant of an Award.
5
6. ELIGIBILITY
Awards may be granted only to individuals who, at the time of grant, are
Employees or Independent Directors; provided, however, that Awards of Incentive
Stock Options may be granted only to individuals who, at the time of such grant,
are Employees. Awards may not be granted to any individual who immediately after
such grant would become an owner, directly or indirectly, of more than 10% of
the total combined voting power of all classes of capital stock of Triton. An
Award may be granted on more than one occasion to the same individual, and such
Award may include an Incentive Stock Option, Non-Qualified Option, Restricted
Stock Award, or any combination thereof.
7. STOCK OPTIONS
(a) Option Period. The term of each Option shall be as specified by the
Committee at the date of grant but shall not exceed ten years.
(b) Limitations on Exercise of Option. An Option shall be exercisable in
whole or in such installments and at such times as determined by the Committee.
(c) Option Agreement. Each Option shall be evidenced by an Option Agreement
in such form and containing such provisions not inconsistent with the provisions
of the Plan as the Committee from time to time shall approve, including, without
limitation, provisions to qualify as an Incentive Stock Option under section 422
of the Code. An Option Agreement may provide for the payment of the option
price, in whole or in part, by the delivery of a number of Common Shares (plus
cash if necessary) having a Fair Market Value equal to such option price. Each
Option Agreement shall provide that the Option may not be exercised earlier than
six months from the date of grant and shall specify the effect of termination of
employment on the exercisability of the Option. Such Option Agreement may also
include, without limitation, provisions relating to (i) subject to the
provisions hereof permitting accelerated vesting on a Change of Control, vesting
of Awards, (ii) tax matters (including provisions covering any applicable
employee wage withholding requirements and requiring additional "gross-up"
payments to Holders to meet any excise taxes or other additional income tax
liability imposed as a result of a Change of Control payment resulting from the
operation of the Plan or of such Option Agreement), and (iii) any other matters
not inconsistent with the terms and provisions of this Plan that the Committee
shall in its sole discretion determine. The terms and conditions of the
respective Option Agreements need not be identical.
(d) Option Price and Payment. The price at which a Common Share may be
purchased upon exercise of an Option shall be determined by the Committee. The
Option or portion thereof may be exercised by delivery of an irrevocable notice
of exercise to Triton. The purchase price of the Option or portion thereof shall
be paid in full in the manner prescribed by the Committee.
6
(e) Stockholder Rights and Privileges. The Holder of an Option shall be
entitled to all the privileges and rights of a stockholder only with respect to
such Common Shares that have been purchased under the Option, for which
certificates for Common Shares that have been registered in the Holder's name,
and as to which the Option Agreement for the respective Option requires no
further restrictions.
(f) Special Limitations on Incentive Stock Options. With respect to
Incentive Stock Options, (i) an Option may be granted only to an individual who
is an Employee at the time the Option is granted, (ii) the exercise price of any
such Option may not be less than the Fair Market Value of a Common Share at the
date such Option is granted, (iii) the value of Common Shares for which such
Options are exercisable for the first time in any one calendar year cannot
exceed $100,000 based on the Fair Market Value of the Common Shares at the date
of grant according to section 422(d)(1) of the Code (or such other individual
limit as may be in effect under the Code on the date of grant), and (iv) no such
Option shall be transferable or assignable otherwise than by will or the laws of
descent and distribution.
(g) Reload Options. The Committee (concurrently with the grant of an Option
or subsequent to such grant) may, in its sole discretion, provide in an Option
Agreement respecting an Option that, if the Holder pays the costs associated
with exercising such Option in Common Shares, upon the date of such payment a
new Option shall be granted under this Plan or under another available plan. The
number of Common Shares subject to such new Option shall be equal to the number
of Common Shares tendered in payment. The new option shall not be exercisable
after the original term of the exercised Option.
8. RESTRICTED STOCK AWARDS
(a) Restriction Period. In general, the period of time during which a
Restricted Stock Award is subject to restrictions (the "Restriction Period")
will be five years from the date of grant, and, in any such event, the
Restricted Stock Award will vest during the Restriction Period according to the
following schedule: 20% on the first anniversary of the grant, 20% on the second
anniversary of the grant, 20% on the third anniversary of the grant, 20% on the
fourth anniversary of the grant, and 20% on the fifth anniversary of the grant.
Notwithstanding the foregoing, the Committee may establish another Restriction
Period or other method of vesting applicable to any such Award. Each Restricted
Stock Award may have a different Restriction Period, in the discretion of the
Committee. Once established, the Restriction Period applicable to a particular
Restricted Stock Award shall not be changed except as permitted by Section 8(c)
or Section 9.
(b) Forfeiture Restrictions to be Established by the Committee. Common
Shares that are the subject of a Restricted Stock Award shall be subject to
restrictions on disposition by the Holder and an obligation of the Holder to
forfeit and surrender the
7
shares to Triton under certain circumstances (the "Forfeiture Restrictions").
The Forfeiture Restrictions shall be determined by the Committee in its sole
discretion, and, without limiting the generality of the foregoing, the Committee
may provide that the Forfeiture Restrictions shall lapse upon (i) the attainment
of one or more performance measures established by the Committee; (ii) the
Holder's continued employment with the Company or continued service as an
Independent Director for a specified period of time; (iii) the occurrence of any
event or the satisfaction of any other condition specified by the Committee in
its sole discretion, or (iv) a combination of any of the foregoing. The
performance measures may be subject to adjustment for specified significant
extraordinary items or events, and may be absolute, relative to one or more
other companies, or relative to one or more indexes, and may be contingent upon
future performance of the Company or any subsidiary, division, or department
thereof by or in which the Holder is employed during the performance period.
Each Restricted Stock Award may have different Forfeiture Restrictions, in the
discretion of the Committee.
(a) Other Terms and Conditions. Common Shares awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered in
the name of the Holder of such Restricted Stock Award. The Holder shall have the
right to receive dividends during the Restriction Period, to vote the Common
Shares subject thereto, and to enjoy all other stockholder rights, except that
(i) the Holder shall not be entitled to delivery of the stock certificate(s)
until the Restriction Period shall have expired, (ii) Triton shall retain
custody of the stock certificate(s) during the Restriction Period, (iii) the
Holder may not sell, transfer, pledge, exchange, hypothecate, or otherwise
dispose of the stock during the Restriction Period, and (iv) a breach of the
terms and conditions established by the Committee pursuant to the Restricted
Stock Award shall cause a forfeiture of the Restricted Stock Award. At the time
of such Award, the Committee may, in its sole discretion, prescribe additional
terms, conditions, or restrictions relating to Restricted Stock Awards,
including, but not limited to, rules pertaining to the termination of employment
or service as a Independent Director (by retirement, disability, death, or
otherwise) or a Holder prior to expiration of the Restriction Period. Such
additional terms, conditions, or restrictions shall be set forth in a Restricted
Stock Agreement made in conjunction with the Award. Such Restricted Stock
Agreement may also include, without limitation, provisions relating to (i)
subject to the provisions hereof permitting accelerated vesting on a Change of
Control, vesting of Awards, (ii) tax matters (including provisions (x) covering
any applicable employee wage withholding requirement, (y) prohibiting an
election by the Holder under section 83(b) of the Code and (z) requiring
additional "gross-up" payments to Holders to meet any excise taxes or other
additional income tax liability imposed as a result of a Change of Control
payment resulting from the operation of the Plan or of such Restricted Stock
Agreement), and (iii) any other matters not inconsistent with the terms and
provisions of this Plan that the Committee shall in its sole discretion
determine. The terms and conditions of the respective Restricted Stock
Agreements need not be identical.
8
(b) Payment for Restricted Stock. A Holder shall not be required to make
any payment for Common Stock received pursuant to a Restricted Stock Award,
except to the extent otherwise required by law or the Committee.
(c) Agreements. At the time any Award is made under this Section 8, Triton
and the Holder shall enter into a Restricted Stock Agreement setting forth each
of the matters contemplated hereby and such other matters as the Committee may
determine to be appropriate. The terms and provisions of the respective
Restricted Stock Agreements need not be identical.
9. ANTI-DILUTION; CHANGE OF CONTROL
(a) Anti-Dilution. Subject to any required action by Triton's stockholders,
upon the occurrence of any event that affects the Common Shares in such a way
that an adjustment of outstanding Awards is appropriate in order to prevent the
dilution or enlargement of rights under the Awards (including, without
limitation, any extraordinary dividend or other distribution (whether in cash or
in kind), recapitalization, stock split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event), the Committee shall make appropriate
equitable adjustments, which may include, without limitation, adjustments to any
or all of the number and kind of shares of stock (or other securities) which may
thereafter be issued in connection with such outstanding Awards and adjustments
to any exercise price specified in the outstanding Awards and shall also make
appropriate equitable adjustments to the number and kind of shares of stock (or
other securities) authorized by or to be granted under the Plan. Further, the
Committee, in its sole discretion, may make appropriate equitable adjustments,
including, without limitation, those described in the immediately preceding
sentence, in any other circumstances under which the Committee deems such
adjustments to be desirable. Any adjustment made to an Incentive Stock Option
hereunder, with respect to either (i) the number or price of Common Shares
subject to Incentive Stock Options or (ii) the aggregate number of Common Shares
that may be issued pursuant to Incentive Stock Options shall be made in a manner
that will permit such Option to continue to constitute an Incentive Stock Option
within the meaning of section 422 of the Code.
(b) Change of Control. In the event of a Change of Control, the Committee,
in its discretion, may determine that any, all or none of the outstanding Awards
shall immediately vest or become exercisable or satisfiable, as applicable. The
Committee, in its discretion, may also determine that upon the occurrence of a
Change of Control, any, all or none of the Awards outstanding hereunder shall
terminate within a specified number of days after notice to the Holder, and upon
any such termination such Holder shall receive, with respect to each Common
Share subject to such Award, cash in an amount equal to the excess of (i) the
higher of (x) the Fair Market Value of such Common Share immediately prior to
the occurrence of such Change of Control or (y) the value of the consideration
to be received in connection with such Change of Control for
9
one Common Share over (ii) the exercise price per share, if applicable, of
Common Stock set forth in such Award. The provisions contained in the preceding
sentence shall be inapplicable to an Award granted within six months before the
occurrence of a Change of Control if the Holder of such Award is subject to the
reporting requirements of Section 16(a) of the 1934 Act, if applicable. If the
consideration offered to stockholders of Triton in any transaction described in
this Section consists of anything other than cash, the Committee shall determine
the fair cash equivalent of the portion of the consideration offered which is
other than cash. The provisions contained in this Section shall not terminate
any rights of the Holder to further payments pursuant to any other agreement
with Triton following a Change of Control.
10. AMENDMENT AND TERMINATION OF THE PLAN
The Board may amend the Plan at any time and the Committee may amend any
Award (and its related Grant Document) at any time, except as otherwise
specifically provided in such Grant Document; provided that no change in any
Award theretofore granted may be made that would impair the rights of the Holder
of any Award under the Plan without the consent of the Holder, and provided,
further, that the Board may not, without approval of the stockholders, amend the
Plan (a) to increase the maximum aggregate number of Common Shares that may be
issued under the Plan or (b) to change the class of individuals eligible to
receive Awards under the Plan. Subject to Section 3, the Board, in its
discretion, may terminate the Plan at any time.
11. EFFECT OF THE PLAN
(a) No Right to an Award. Neither the adoption of the Plan nor any action
of the Board or of the Committee shall be deemed to give an Employee or
Independent Director any right to an Award except as may be evidenced by a
written instrument from Triton reflecting a grant by Triton of an Award and
setting forth the terms and conditions thereof. The Plan shall be unfunded. The
Company shall not be required to establish any special or separate fund or to
make any other segregation of funds or assets to assure the payment of any
Award.
(b) No Employment/Membership Rights Conferred. Nothing contained in the
Plan shall (i) confer upon any Employee any right with respect to continuation
of employment with the Company or interfere in any way with the right of the
Company to terminate his or her employment at any time (subject to the terms of
any written employment agreement with Employee) or (ii) confer upon any
Independent Director any right with respect to continuation of membership on the
Board.
(c) Other Laws; Withholding. Triton shall not be obligated to issue any
Common Shares until there has been compliance with such laws and regulations as
Triton may deem applicable. Fractional shares of Common Stock may be awarded.
The Company shall have the right to deduct in connection with all Awards any
taxes required
10
by law to be withheld and to require any payments required to enable it to
satisfy its withholding obligations.
(d) Severability. Any provision of this Plan prohibited by the law of any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition without invalidating the remaining provisions hereof.
(e) No Restriction on Corporate Action. Except as expressly set forth in
Section 10, nothing contained in the Plan shall be construed to prevent the
Company from taking any corporate action that is deemed by the Company to be
appropriate or in its best interests, whether or not such action would have an
adverse effect on the Plan or any Award made under the Plan. No Employee,
Independent Director, beneficiary, or other Person shall have any claim against
the Company as a result of any such action.
(f) Restrictions on Transfer. An Award (other than an Incentive Stock
Option, which shall be subject to the transfer restrictions set forth in Section
7(f)) shall not be transferable or assignable otherwise than (i) by will or the
laws of descent and distribution, (ii) with respect to Awards of Non-Qualified
Options, if such transfer is permitted in the sole discretion of the Committee,
by transfer by a Holder to a member of the Holder's Immediate Family, to a trust
solely for the benefit of the Holder and the Holder's Immediate Family, or to a
partnership or limited liability company whose only partners or stockholders are
the Holder and members of the Holder's Immediate Family, or (iii) with the
consent of the Committee.
(g) Governing Law. This Plan shall be construed in accordance with the laws
of the State of Delaware.
[END OF PLAN]
11
AMENDMENT NUMBER ONE
TO THE
TRITON PCS HOLDINGS, INC.
1999 STOCK AND INCENTIVE PLAN
Pursuant to the power of the Board of Directors of Triton PCS Holdings,
Inc. (the "Company") to amend the 1999 Stock and Incentive Plan (the "Plan"),
the Plan hereby is amended as follows:
1.
Section 5 of the Plan is amended to increase the maximum aggregate number
of shares of the Company which may be issued under the Plan by replacing
"3,454,494" with "4,954,494," where the former appears in the section, and by
replacing "1,935,804 additional shares of Common Stock" with "3,435,804
additional shares of Common Stock," where the former appears in the section.
2.
Section 5 of the Plan is further amended to increase the maximum aggregate
number of shares of Company Stock that may be issued under the Plan to any
individual employee by replacing "100,000" with "1,000,000," where the former
appears in the section.
3.
The effective date of this Amendment Number One is the date the Amendment
was adopted by the Board of Directors of the Company at a duly convened
telephonic meeting of the Board of Directors on the 16th day of March, 2001;
subject, however, to the approval of the Amendment by the shareholders of the
Company within twelve months before or after such date.
IN WITNESS WHEREOF, the duly authorized representative of the Board of
Directors of Triton PCS Holdings, Inc. has executed this Amendment Number One
effective as set forth above.
Triton PCS Holdings, Inc.
By: /s/ Laura Porter
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Title: Vice President of Human Resources
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