SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14 (a) OF THE SECURITIES EXCHANGE
ACT OF 1934
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for use of the
Commission only (as permitted
By Rule 14a-6(e) (2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-12
ALAMOSA 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:
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(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
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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:
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[ALAMOSA PERSONAL COMMUNICATIONS SERVICE LOGO OMITTED]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 2003
AT 10:00 A.M. LOCAL TIME
To our Stockholders:
Notice is hereby given that the 2003 annual meeting of stockholders of
ALAMOSA HOLDINGS, INC., a Delaware corporation ("Alamosa"), will be held at The
Lubbock Country Club, 3400 Mesa Road, Lubbock, Texas, on May 29, 2003, at 10:00
a.m., local time, for the following purposes:
1. To elect four directors to serve on our board of directors for a term
of three years;
2. To approve an amendment to our Amended and Restated Employee Stock
Purchase Plan to authorize for issuance an additional 2,500,000 shares
of common stock;
3. To ratify the appointment of PricewaterhouseCoopers LLP as our
independent auditors for the year ending December 31, 2003; and
4. To transact such other business as may properly be brought before the
meeting.
These items of business are described in detail in the attached proxy
statement. Only stockholders of record at the close of business on April 14,
2003, the record date, are entitled to notice of, and to vote at, the annual
meeting and any adjournment or postponement of the annual meeting. A list of
stockholders entitled to vote at the annual meeting will be available for
examination by the stockholders of Alamosa, for any purpose germane to the
annual meeting, during ordinary business hours beginning 10 days prior to the
date of the meeting, at Alamosa's executive offices at 5225 S. Loop 289,
Lubbock, Texas.
Your vote is important. Please read the proxy statement and the voting
instructions on the enclosed proxy. Then, whether or not you plan to attend the
annual meeting in person, and no matter how many shares you own, please sign,
date and promptly return the enclosed proxy in the enclosed envelope, which
requires no additional postage if mailed in the United States. If you are a
stockholder of record, you may also authorize the individuals named on the
enclosed proxy to vote your shares by calling a specially designated toll-free
telephone number or via the Internet at www.eproxy.com/almo. Specific
instructions for telephone or Internet voting are set forth on the enclosed
proxy. These telephone and Internet voting procedures are designed to
authenticate your vote and to confirm that your voting instructions are
followed. If you are a holder of record, you may also cast your vote in person
at the annual meeting.
By Order of the Board of Directors,
/S/ Kendall W. Cowan
Kendall W. Cowan
Chief Financial Officer and Secretary
Lubbock, Texas
April 22, 2003
ALAMOSA HOLDINGS, INC.
5225 S. LOOP 289
LUBBOCK, TEXAS 79424
(806) 722-1100
-------------------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 2003
WHY DID YOU SEND ME THIS PROXY STATEMENT?
The board of directors of Alamosa Holdings, Inc. ("Alamosa") seeks your
proxy for use in voting at our 2003 annual meeting of stockholders or at any
postponements or adjournments of the annual meeting. Our annual meeting will be
held at The Lubbock Country Club, 3400 Mesa Road, Lubbock, Texas, on Thursday,
May 29, 2003, at 10:00 a.m., local time. We will begin mailing this proxy
statement, the attached notice of annual meeting and the accompanying proxy on
or about April 29, 2003 to all holders of our common stock, par value $0.01,
entitled to vote at the annual meeting. Along with this proxy statement, we are
also sending our Annual Report on Form 10-K for the fiscal year ended December
31, 2002.
WHAT AM I VOTING ON?
At the annual meeting, stockholders will act upon:
(1) The election of four directors to serve on our board of directors for
a term of three years;
(2) Approval of an amendment to our Amended and Restated Employee Stock
Purchase Plan to authorize for issuance an additional 2,500,000 shares
of common stock; and
(3) Ratification of the appointment of PricewaterhouseCoopers LLP as our
independent auditors for the year ending December 31, 2003.
WHO CAN VOTE AT THE MEETING?
Only holders of record of our common stock at the close of business on
April 14, 2003, the record date, will receive notice of, and be entitled to
vote at, our annual meeting. At the close of business on the record date,
94,590,963 shares of our common stock were outstanding and entitled to vote.
The common stock is our only class of outstanding voting securities.
WHAT CONSTITUTES A QUORUM?
If a majority of the shares of our common stock issued and outstanding on
the record date and entitled to vote, are present at the meeting, either in
person or by proxy, we will have a quorum to transact business. Broker
non-votes, if any, will be counted as shares present for purposes of
determining the presence of a quorum.
WHAT ARE THE VOTING RIGHTS OF THE HOLDERS OF ALAMOSA'S COMMON STOCK?
In deciding all matters, a holder of common stock on the record date will
be entitled to cast one vote for each share of common stock registered in that
holder's name, on each matter to be voted upon at the annual meeting.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
ELECTION OF DIRECTORS: Election of the director nominees named in Proposal
No. 1 requires the affirmative vote of a plurality of the shares of our common
stock voted at our annual meeting. Votes may be cast in favor of or withheld
with respect to all of the director nominees, or any of them. Abstentions and
broker non-votes, if any, will not be counted as having been voted and will
have no effect on the outcome of the vote on the election of directors.
Stockholders may not cumulate votes in the election of directors.
APPROVAL OF AMENDMENT TO ALAMOSA'S AMENDED AND RESTATED EMPLOYEE STOCK
PURCHASE PLAN: Approval of the amendment to our Amended and Restated Employee
Stock Purchase Plan, as specified in Proposal No. 2, requires the affirmative
vote of at least a majority of the outstanding shares of our common stock
entitled to vote on the proposal who are present at the annual meeting, in
person or by proxy. Abstentions will have the same effect as a vote against
this proposal. Broker non-votes, if any, will have no effect on the vote for
this proposal.
RATIFICATION OF INDEPENDENT ACCOUNTANTS: Ratification of the selection of
PricewaterhouseCoopers LLP as our independent accountants for fiscal year 2003,
as specified in Proposal No. 3, requires the affirmative vote of at least a
majority of the outstanding shares of our common stock entitled to vote on the
proposal who are present at the annual meeting, in person or by proxy. If this
selection is not ratified by our stockholders, our board of directors may
reconsider its selection. Abstentions will have the same effect as a vote
against this proposal. Broker non-votes, if any, will have no effect on the
vote for this proposal.
WHO CONDUCTS THE PROXY SOLICITATION?
Alamosa is soliciting the proxies and will bear the entire cost of this
solicitation, including the preparation, assembly, printing and mailing of this
proxy statement and any additional materials furnished to our stockholders.
Copies of solicitation material will be furnished to brokerage houses,
fiduciaries and custodians holding shares in their names that are beneficially
owned by others so that they may forward this solicitation material to these
beneficial owners. In addition, if asked, we will reimburse these persons for
their reasonable expenses in forwarding the solicitation material to the
beneficial owners. The original solicitation of proxies by mail may be
supplemented by telephone, telegram, telecopy, Internet and personal
solicitation by our directors, officers or other regular employees.
HOW DO I VOTE?
Stockholders of record can choose one of the following three ways to vote:
(1) By mail: Please complete, sign, date and return the proxy in the
enclosed pre-paid envelope.
(2) By telephone: Call the phone number on your proxy and follow the
instructions.
(3) Via the Internet: Access http://www.eproxy.com/almo and follow the
instructions.
By casting your vote in any of the three ways listed above, you are authorizing
the individuals listed on the proxy to vote your shares in accordance with your
instructions.
If you hold our common stock in "street name," only your broker or bank
can vote your shares. If you want to vote in person at our annual meeting and
you hold our common stock in street name, you must obtain a proxy from your
broker and bring that proxy to our annual meeting.
HOW DO I VOTE USING THE PROXY CARD?
If the enclosed proxy is properly signed and returned, the shares
represented by the proxy will be voted at the annual meeting according to the
instructions as indicated on your proxy. If the proxy does not specify how your
shares are to be voted, your shares represented by the proxy will be voted:
(1) FOR the election of the nominees proposed by the board,
(2) FOR the approval of the amendment to our Amended and Restated Employee
Stock Purchase Plan, and
(3) FOR the ratification of the selection of PricewaterhouseCoopers LLP as
our independent accountants for the fiscal year ending December 31,
2003.
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CAN I CHANGE MY VOTE?
You may revoke your proxy by doing any of the following:
(1) Send a written notice of revocation to our Corporate Secretary, dated
later than the proxy you want to revoke, before the vote is taken at
the annual meeting.
(2) Execute a later dated proxy (including a proxy by telephone or via the
Internet) before the vote is taken at the annual meeting.
(3) Vote in person at the annual meeting (your attendance at the annual
meeting, in and of itself, will not revoke the earlier proxy).
Any written notice of revocation, or later dated proxy, should be delivered to:
Alamosa Holdings, Inc., 5225 S. Loop 289, Lubbock, Texas 79424, Attention:
Kendall W. Cowan, Corporate Secretary.
ABOUT ALAMOSA AND CERTAIN OF ITS SUBSIDIARIES
Alamosa PCS Holdings, Inc. completed its initial public offering of common
stock on February 2, 2000. On December 14, 2000, Alamosa PCS Holdings, Inc.
formed a new holding company pursuant to Section 251(g) of the Delaware General
Corporation Law (the "Holding Company Formation"). In that transaction, each
share of Alamosa PCS Holdings, Inc. was converted into one share of the new
holding company, and the former public company, which was renamed Alamosa
(Delaware), Inc. (referred to herein as "Alamosa (Delaware)"), became a wholly
owned subsidiary of the new holding company, which was renamed Alamosa PCS
Holdings, Inc. (referred to herein as "Alamosa PCS Holdings"). On February 14,
2001, Alamosa became the new public holding company of Alamosa PCS Holdings and
its subsidiaries pursuant to a reorganization transaction in which a wholly
owned subsidiary of Alamosa was merged with and into Alamosa PCS Holdings (the
"Reorganization"). As a result of the Reorganization, Alamosa PCS Holdings
became a wholly owned subsidiary of Alamosa, and each share of Alamosa PCS
Holdings common stock was converted into one share of Alamosa common stock.
References in this Proxy Statement to the "Company" refer to, and all
disclosure contained herein with respect to director and executive
compensation, stock price performance and other matters reflects information
for: (i) Alamosa, for all periods after completion of the Reorganization,
during which time it was the public holding company, (ii) Alamosa PCS Holdings,
for the period after the Holding Company Formation but prior to the
Reorganization, during which time it was the public holding company, and (iii)
Alamosa (Delaware) (formerly Alamosa PCS Holdings, Inc.), for the period prior
to the Holding Company Formation, during which time it was the public holding
company.
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ELECTION OF DIRECTORS OF ALAMOSA
(PROPOSAL 1)
Pursuant to our Amended and Restated Certificate of Incorporation, our
board of directors consists of three classes of directors with overlapping
three year terms. One class of directors is elected each year with the term of
each such class expiring on the third succeeding annual meeting after its
election. Our Amended and Restated Certificate of Incorporation also states
that there must be at least three directors, with the exact number to be set
from time to time by our board of directors. Our board of directors currently
has fixed the number of directors at eleven, and the board of directors
currently consists of three Class I directors, four Class II directors and four
Class III directors. At this year's annual meeting, the term of our four Class
III directors will expire. Our other directors will remain in office for the
remainder of their respective terms, as indicated below. Unless otherwise
indicated on any proxy, the proxy holders intend to vote the shares represented
by each properly executed proxy for each of the four nominees standing for
reelection as set forth below. If a proxy is executed in such a manner as to
withhold authority to vote for one or more nominees for director, such
instructions will be followed by the persons named as proxies. While it is not
anticipated that any of the nominees will be unable to serve, if any should be
unable to serve, the proxy holders reserve the right to substitute any other
person.
Election of the four director nominees requires the affirmative vote of a
plurality of the shares of our common stock voted at the annual meeting.
Abstentions and broker non-votes, if any, will not be counted as having been
voted and will have no effect on the outcome of the vote on the election of
directors.
Our bylaws and the bylaws of Alamosa PCS Holdings, our direct wholly-owned
subsidiary, contain a provision (together, the "Pass-Through Voting
Provisions") which together have the effect of requiring that the shares of
common stock of Alamosa (Delaware) that are owned by Alamosa PCS Holdings may
only be voted by Alamosa PCS Holdings in proportion to the vote of, or as
directed by the vote of, the stockholders of Alamosa. As a result of the
Pass-Through Voting Provisions, Alamosa PCS Holdings, as the sole stockholder
of Alamosa (Delaware), may only vote its shares of Alamosa (Delaware) stock on
the election of directors of Alamosa (Delaware) in proportion to, or as
directed by, a vote of the stockholders of Alamosa. The Alamosa (Delaware)
board of directors is classified in the same manner as, and consists of the
same eleven persons as those serving on, the Alamosa Holdings board of
directors. Your vote with respect to the election of four nominees to serve on
the board of directors of Alamosa will also constitute a vote to direct Alamosa
PCS Holdings with respect to its vote for the election of the same four
nominees to serve on the Board of Directors of Alamosa (Delaware).
The following table sets forth information concerning our directors as of
the date of this proxy statement.
CURRENT DIRECTORS WHO ARE NOMINEES FOR REELECTION
-------------------------------------------------
NAME AGE NEW TERM WILL EXPIRE AT ANNUAL MEETING IN
---- --- -----------------------------------------
Scotty Hart 52 2006
Dr. Allen T. McInnes 65 2006
Michael V. Roberts 54 2006
David E. Sharbutt 53 2006
CONTINUING DIRECTORS WHOSE TERMS ARE NOT EXPIRING
-------------------------------------------------
NAME CLASS AGE TERM EXPIRES AT ANNUAL MEETING IN
---- ----- --- ---------------------------------
Ray M. Clapp, Jr. I 43 2004
John F. Otto, Jr. I 54 2004
Jimmy R. White I 63 2004
Kendall W. Cowan II 48 2005
Schuyler B. Marshall II 57 2005
Thomas F. Riley, Jr. II 57 2005
Steven C. Roberts II 51 2005
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NOMINEES.
DAVID E. SHARBUTT. Mr. Sharbutt has been our Chairman and a director since
the Company was founded in July 1998 and was named Chief Executive Officer in
October 1999. Mr. Sharbutt was formerly the President and Chief Executive
Officer of Hicks & Ragland Engineering Co., an engineering consulting company,
now known as CHR Solutions. Mr. Sharbutt was employed by CHR Solutions as a
Senior Consultant from October 1999 until November 2000. He was employed by CHR
Solutions from 1977 through 1999, where he worked with independent telephone
companies in developing strategic, engineering and implementation plans for
various types of telecommunications services. Before he joined CHR Solutions,
Mr. Sharbutt was employed with Southwestern Bell.
SCOTTY HART. Mr. Hart has served as a director since the Company was
founded in July 1998. He has also served since April 1995 as General Manager of
South Plains Telephone Cooperative, Inc. ("South Plains Telephone
Cooperative"), a wireline and wireless telecommunications company, and
previously as Assistant Manager of South Plains Telephone Cooperative. Mr. Hart
is currently Vice President of SPPL, Inc., Chairman of the General Partners
Committee for Caprock Cellular Limited Partnership and past Chairman for Texas
RSA3 Limited Partnership, all affiliates of South Plains Telephone Cooperative.
He is also General Manager of SPACE Mgt., Ltd., a wholly-owned subsidiary of
South Plains Telephone Cooperative, and Secretary of Alamo Cellular, Inc., a
non-public holding company with interests in a wireless telecommunications
service provider and an affiliate of SPACE Mgt., Ltd. In addition, he is the
general partner and a limited partner of Lubbock HLH, Ltd. He was President of
Alamo IV LLC until its dissolution in November 1999. Mr. Hart has served as a
director of Texas Statewide Telephone Cooperative, Inc., a non-public company.
DR. ALLEN T. MCINNES. Dr. McInnes has served as a director since
February, 2003. Dr. McInnes became Dean of the Rawls College of Business at
Texas Tech University in September 2001. From April 1996 to January 2000, he
was CEO and President of Tetra Technologies, a medium-sized New York Stock
Exchange oil field service and chemical company. He is currently a director of
Tetra Technologies. He also currently serves as chairman of TGC Industries, a
small geophysical company. Prior to Tetra, Dr. McInnes served as Executive Vice
President and member of the Board of Tenneco, a multi-industry company with
over $15 billion in sales. Some of his other board experience includes service
on the Board of the American Graduate School for International Management -
Thunderbird, the Advisory Council of the business school at the University of
Texas and various local civic and national trade organizations.
MICHAEL V. ROBERTS. Mr. Roberts has served as a director since his
appointment to our board of directors on February 14, 2001 in connection with
the completion of our acquisition of Roberts Wireless Communications, L.L.C.
("Roberts Wireless"), of which Mr. Roberts formerly was a 50% owner. Mr.
Roberts is co-founder of Roberts Broadcasting Company, which owns several
television stations in medium-sized markets in the United States and has served
as that company's Chairman and Chief Executive Officer since its founding in
1989. Mr. Roberts is also the founder of companies involved in commercial real
estate development, construction management, corporate management consulting
and communications towers.
CONTINUING DIRECTORS.
RAY M. CLAPP, JR. Mr. Clapp has served as a director since the Company
was founded in July 1998. He is currently an independent private investor. From
1995 to April 2002, Mr. Clapp served as Managing Director, Acquisitions and
Investments for The Rosewood Corporation, a diversified investment company and
the primary holding company for Caroline Hunt Trust Estate. From 1989 to 1995
he held various officer level positions with The Rosewood Corporation and its
subsidiaries. Prior to his employment with The Rosewood Corporation, Mr. Clapp
was a consultant with Booz, Allen & Hamilton, a management consulting firm.
KENDALL W. COWAN. Mr. Cowan has served as a director since April, 2003.
He has been our Chief Financial Officer since December 1999. From October 1993
to December 1999, he was a partner in the public accounting firm of Robinson
Burdette Martin & Cowan, L.L.P. and from January 1986 to September 1993, he was
a partner in the Lubbock and Dallas offices of Coopers & Lybrand. He provided
consulting and accounting services to a wide range of clients at both firms
including public companies. He
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is a Certified Public Accountant and a member of both the American Institute of
Certified Public Accountants and the Texas Society of Certified Public
Accountants. Mr. Cowan is also a director of several private companies.
SCHUYLER B. MARSHALL. Mr. Marshall has served as a director since
November 1999. He has served as President of The Rosewood Corporation since
January 1999. From 1997 through 1998, he served as Senior Vice President and
General Counsel, and Executive Director of The Rosewood Corporation, and as
director and president of various of its subsidiaries. He currently serves as a
member of the advisory board of Rosewood Capital IV, L.P., a San Francisco
based venture capital fund that focuses on e-commerce, telecommunications and
other consumer oriented investments. Prior to his employment with The Rosewood
Corporation, Mr. Marshall was a senior shareholder with Thompson & Knight,
P.C., in Dallas, where he practiced law since 1970.
JOHN F. OTTO, JR. Mr. Otto has served as a director since February, 2003.
He served as a Managing Director for Global Telecommunications at Salomon Smith
Barney, a member of Citigroup, Inc., before becoming an independent consultant
in 2003. As Managing Director, Mr. Otto led Salomon's efforts in directing
initial financing and ongoing financial service support for telecommunication
companies in various life stages of their business. Prior to joining Salomon
Smith Barney in 1997, Mr. Otto served as Senior Managing Director and Head of
the Media Group for Bear Stearns & Co., Inc. He began his career on Wall Street
with Merrill Lynch & Co. where he also served as a Managing Director. Mr.
Otto's board experience includes service on Canal Industries (forest products,
real estate), Wall Street Council of Boston College and several local civic &
charitable group boards.
THOMAS F. RILEY, JR. Mr. Riley, a licensed Certified Public Accountant
has served as a director since his appointment to our Board of Directors on
March 30, 2001 in connection with the completion of our acquisition of
Southwest PCS Holdings, Inc. ("Southwest PCS"). Mr. Riley has served as
Executive Vice President and Chief Operating Officer of Chickasaw Holding Co.,
a telecommunications company, since January 1997, and has served on the
Chickasaw Holding Co. board since that time. From July 1999 to March 2001, Mr.
Riley served as President and Chief Executive Officer of Southwest PCS. Before
he joined Chickasaw Holding Co., Mr. Riley was associated with Dobson
Communications Corp. from 1970 through 1996, first as external auditor and
consultant, then Chief Financial Officer from 1986 through 1995 and then as
President of Dobson Telephone Co. in 1996.
STEVEN C. ROBERTS. Mr. Roberts has served as a director since his
appointment to our board of directors on February 14, 2001 in connection with
the completion of our acquisition of Roberts Wireless, of which Mr. Roberts
formerly was a 50% owner. Mr. Roberts is co-founder of Roberts Broadcasting
Company and has served as that company's President and Chief Operating officer
since its founding. Mr. Roberts is the founder of companies involved in
commercial real estate development and communications towers. He is currently a
director of Falcon Products Inc. and served on the board of Southside
Bancshares Corp. until it was acquired by Allegiant Bancorp Inc.
JIMMY R. WHITE. Mr. White has served as a director since the Company was
founded in July 1998. He has served as the General Manager of XIT Rural
Telephone Cooperative, Inc. and its subsidiaries, XIT Telecommunication &
Technology, Inc., XIT Cellular, and XIT Fiber, Inc., all wireline and wireless
telecommunications services providers, since 1975. He was also the Treasurer of
Alamo IV LLC until its dissolution in November 1999. Mr. White currently serves
as the President of Alamo Cellular, Inc. He also currently serves as a director
of Texas Telephone Association, a non-public company, Forte of Colorado, a
general partnership, and Rural Independent Competitive Alliance, a non-public
company.
Messrs. Michael V. Roberts and Steven C. Roberts are brothers. There is no
family relationship among any other of our directors or executive officers.
During fiscal year 2002, our board of directors met on eight occasions and
acted by written consent on two occasions. Each of the directors attended at
least 75% of the aggregate of (i) the total number of meetings of our board of
directors and (ii) the total number of meetings held by any committee of the
board upon which such director served.
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COMPENSATION OF DIRECTORS.
Our non-employee directors receive compensation consisting of cash, stock
and stock options in respect of their board service. Each non-employee director
receives an annual retainer of $20,000 and directors who chair a committee
receive an additional $12,000 retainer ($15,000 for the chair of the Audit
Committee). Annual retainers are paid in quarterly installments. Non-employee
directors also receive $1,000 for each board of directors meeting and committee
meeting they attend. For each year of service, our non-employee directors also
receive 6,000 shares of our common stock and 9,000 stock options. Each of these
awards are granted in arrears. In addition, upon joining our board of directors
a non-employee director will also receive a one-time grant of 15,000 shares of
stock. We also provide our directors with the opportunity to receive additional
stock option grants in lieu of any cash compensation otherwise payable to them
with respect to any quarter. For this purpose, stock options will have a value
equal to 60% of the average closing price of our common stock over the twenty
business days preceding the date of grant. All stock options that we grant to
our non-employee directors are granted with an exercise price equal to the per
share closing price on the date of grant.
COMMITTEES OF OUR BOARD OF DIRECTORS.
Our board of directors has established four standing committees:
o Audit Committee;
o Governance & Nominating Committee;
o Finance Committee; and
o Compensation Committee.
AUDIT COMMITTEE. The Audit Committee functions pursuant to a written
charter, which was adopted by our board of directors. The Audit Committee has
such powers as are set forth in the charter and such other powers as may be
assigned to it by our board of directors from time to time. It is currently
charged with, among other things, recommending to our board of directors the
engagement or discharge of independent public accountants, reviewing the plan
and results of the auditing engagement with our independent auditors and
officers, reviewing with our officers the scope and nature of our internal
accounting controls and reporting to our board of directors on the Audit
Committee's activities, conclusions and recommendations. The current members of
the Audit Committee are Messrs. McInnes, Clapp and White, all of whom are
deemed independent pursuant to the requirements of The New York Stock Exchange.
Mr. Tom M. Phelps was a member of the Audit Committee until his resignation
from our board of directors in February, 2003. The formal report of our audit
committee can be found on page 27 of this proxy statement. During fiscal year
2002, the Audit Committee met on fifteen occasions and acted by written consent
on one occasion.
GOVERNANCE & NOMINATING COMMITTEE. The Governance & Nominating Committee
is responsible for:
o carrying out the purposes of our Interested Transactions Policy,
including the formulation and publication of a written policy and the
adoption of disclosure requirements governing any actual or perceived
conflicts of interest and the disclosure of conflicts of interest for
transactions and relationships that may involve potential conflicts of
interest for any of our officers, directors, principal stockholders
and/or affiliates;
o taking such action and act as may be deemed necessary by the committee
in order for us to come into and be in compliance with the
Sarbanes-Oxley Act of 2002 and any rules enacted thereunder, as well
as and any other corporate governance rules applicable to us;
o seeking out possible candidates for our board of directors;
o reviewing the slate of directors to be elected by our stockholders;
o reviewing the qualifications for candidates for corporate officers and
recommending the officers for approval by our board of directors;
o evaluating the performance of current directors; and
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o considering candidates proposed by stockholders for nomination.
A stockholder who wishes to nominate a director at a meeting of
stockholders must comply with the advance notice requirements set out in our
Bylaws.
The Governance & Nominating Committee was formed in February, 2003, by
combining our Governance, Business Practices and Nominating committees. The
current members of the Governance & Nominating Committee are Messrs. Marshall,
McInnes, Otto and Riley.
Before February, 2003, the members of the Business Practices Committee
were Messrs. Marshall, Phelps and White; the members of the Nominating
Committee were Messrs. Sharbutt, Clapp, Hart, Hyde, Marshall, Riley, Phelps,
Michael V. Roberts, Steven C. Roberts and White; and the members of the
Governance Committee were Messrs. Marshall, Riley and White. During fiscal year
2002, the Governance Committee met on three occasions; the Nominating Committee
met on one occasion; and the Business Practices Committee met on one occasion.
FINANCE COMMITTEE. The Finance Committee is responsible for providing
budget oversight and dealing with capital structure issues. The current
members of the Finance Committee are Messrs. Clapp, Riley, Michael V. Roberts,
Steven C. Roberts and Otto. During fiscal year 2002, the Finance Committee met
on eight occasions.
COMPENSATION COMMITTEE. The Compensation Committee is responsible for
reviewing and approving all compensation arrangements for our officers, as well
as reviewing and approving the terms of any stock option grants or other awards
under our long-term incentive plan and reviewing and approving the terms of any
future stock option plans. The current members of the Compensation Committee
are Messrs. Marshall, Hart and Clapp. The formal report of our compensation
committee can be found on page 22 of this proxy statement. During the fiscal
year 2002, the Compensation Committee met on eleven occasions. Our former Stock
Option Committee met on three occasions during the fiscal year 2002 before it
merged into the Compensation Committee in April, 2002.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF EACH OF THE FOUR NOMINEES.
8
APPROVAL OF AMENDMENT TO OUR AMENDED AND RESTATED EMPLOYEE
STOCK PURCHASE PLAN
(PROPOSAL 2)
EMPLOYEE STOCK PURCHASE PLAN OVERVIEW.
Our Amended and Restated Employee Stock Purchase Plan ("ESPP") is intended
to provide our eligible employees with an opportunity to purchase shares of our
common stock through payroll deductions. The ESPP is intended to comply with
the requirements of Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"), and to assure the participants of the tax advantages
provided thereby (described below in the section entitled "Federal Income Tax
Treatment"). We believe that our ability to provide our employees with the
opportunity to purchase our common stock through the ESPP is an important
factor in attracting, retaining and motivating our employees.
PROPOSED AMENDMENT.
To ensure that we will be able to provide our employees with a stock
purchase opportunity under the ESPP on August 31, 2003, the next stock purchase
date under the ESPP, our board of directors unanimously adopted an amendment to
the ESPP on March 31, 2003, subject to approval by our stockholders, to
increase the number of shares of our common stock authorized for issuance under
the ESPP by 2,500,000 shares, from 1,000,000 shares to 3,500,000 shares. We are
seeking stockholder approval of this amendment.
As of March 1, 2003, no shares of our common stock remained available for
issuance under the ESPP for the next purchase date on August 31, 2003. Although
the board of directors is authorized to increase the number of shares under the
ESPP by up to 200,000 shares each year, the next increase may not take place
prior to January 1, 2004. Accordingly, stockholder approval is being sought to
allow us to continue operation of the ESPP for the current purchase period and
to allow us to meet our future expected needs under the ESPP.
DESCRIPTION OF THE ESPP.
The following summary of the material features of the ESPP does not
purport to be complete and is qualified in its entirety by reference to the
specific language of the ESPP. A copy of the ESPP is available to any of our
stockholders upon written request.
SHARES AVAILABLE. The board of directors originally authorized a total of
600,000 shares of our common stock for issuance under the ESPP, plus an
additional number of shares to be added on the first day of the year beginning
in 2002 and continuing until 2011, equal to the lesser of (i) 200,000 or (ii) a
lesser amount determined by the board, in any case, subject to adjustment by
the board in the event of a recapitalization, stock split, stock dividend or
similar corporate transaction. The board of directors authorized an additional
200,000 shares in each of 2002 and 2003.
ELIGIBILITY. All our full-time employees and employees of each of our
subsidiaries who have at least six months of service are eligible to
participate in the ESPP, except that an employee will not be eligible to
participate if he or she owns five percent or more of our common stock or the
common stock of any Alamosa subsidiary. As of the date of this proxy statement,
approximately 600 employees were eligible to participate in the ESPP.
STOCK PURCHASES. Under the ESPP, each eligible employee is permitted to
purchase shares of our common stock through regular payroll deductions and/or
cash payments in an aggregate amount equal to 1% to 10% of the employee's
compensation for each payroll period. The fair market value of the shares of
our common stock which may be purchased by any employee under this or any other
plan that is intended to comply with Section 423 of the Code during any
calendar year may not exceed $25,000.
The ESPP provides for a series of consecutive, overlapping offering
periods that generally will be 24 months long. Successive six-month purchase
periods run during each offering period. Offering periods generally commence on
March 1 and September 1 of each year during the term of the ESPP, and purchase
periods run from March 1 to August 31 and from September 1 to February 28, or
in a leap year, to February 29.
9
During each offering period, participating employees are able to purchase
shares of common stock with payroll deductions at a purchase price equal to 85%
of the fair market value of the common stock at either the beginning of each
offering period or the end of each purchase period within the offering period,
whichever price is lower.
To the extent permitted by applicable laws, regulations, or stock exchange
rules, if the fair market value of the shares at the end of any purchase period
is lower than the fair market value of the shares on the date the related
offering period began, then all participants in that offering period are
automatically withdrawn from the offering period immediately after the exercise
of their option on the date the purchase period ends. The participants are then
automatically re-enrolled in the immediately following offering period when
that offering period begins.
The options granted to a participant under the ESPP are not transferable
otherwise than by will or the laws of descent and distribution, and are
exercisable, during the participant's lifetime, only by the participant.
CHANGE OF CONTROL. Unless otherwise determined by the board of directors,
if a change of control occurs during the term of the ESPP any offering period
then in effect will terminate. Generally, a change of control will occur for
purposes of the ESPP if (i) stockholders approve any plan or proposal for the
liquidation or dissolution of Alamosa, (ii) continuing directors (other than
those approved) cease to constitute a majority of the board or directors, (iii)
certain mergers, consolidations and share exchanges occur, or (iv) there is a
sale of substantially all of Alamosa's assets.
AMENDMENT, TERMINATION OF PLAN. Our board of directors may from time to
time amend or terminate the ESPP; provided, that no such amendment or
termination may adversely affect the rights of any participant without the
consent of such participant and, to the extent required by Section 423 of the
Code or any other law, regulation or stock exchange rule, no such amendment
will be effective without the approval of stockholders entitled to vote
thereon. Additionally, our board of directors may make such amendments as it
deems necessary to comply with applicable laws, rules and regulations.
NEW PLAN BENEFITS. Since the amount of benefits to be received by each
participant in the ESPP is determined by his or her elections, the amount of
future benefits to be allocated to any individual or group of individuals under
the plan in any particular year is not determinable.
STOCK ISSUANCES. The table below shows, as to each of our executive
officers named in the Summary Compensation Table and the various indicated
groups, the number of shares of common stock purchased under the ESPP from the
date of inception of the ESPP to February 28, 2003, the most recent purchase
date under the ESPP.
NAME NUMBER OF SHARES PURCHASED
---- --------------------------
David E. Sharbutt 41,612
Kendall W. Cowan 39,727
Loyd I. Rinehart 26,815
Anthony M. Sabatino 5,876
Margaret Z. Couch 160
All non-employee directors as a group (9 persons) 0
All executive officers as a group (6 persons) 114,190
All employees, including all current officers who
are not executive officers as a group (347 persons) 885,732
FEDERAL INCOME TAX TREATMENT. The following discussion is a brief summary
of certain relevant income tax effects applicable to awards under the ESPP.
This summary is not intended to be exhaustive or to constitute tax advice, and,
among other things, does not describe state, local or foreign income and other
tax consequences. Reference should be made to the Code and the regulations and
interpretations thereunder for a complete statement of all relevant federal tax
consequences. Accordingly, a participant should consult a tax adviser with
respect to the tax aspects of transactions under the employee stock purchase
plan. For purposes of this discussion, the right to purchase shares under the
ESPP is described as an option.
10
The ESPP is intended to qualify as an employee stock purchase plan under
Section 423 of the Code. Assuming such qualification, a participant will not
recognize any taxable income as a result of participating in the ESPP,
exercising options granted pursuant to the ESPP or receiving shares purchased
pursuant to such options. A participant may, however, be required to recognize
taxable income as described below.
If a participant disposes of any share purchased pursuant to the ESPP
after the later to occur of (i) two years from the grant date for the related
option and (ii) one year after the exercise date for the related option (such
disposition, a "Qualifying Transfer"), or if he or she dies (whenever
occurring) while owning any share purchased under the ESPP, the participant
generally will recognize compensation income, for the taxable year in which
such disposition or death occurs, in an amount equal to the lesser of (i) the
excess of the market value of the disposed share at the time of such
disposition over its purchase price, and (ii) 15% of the market value of the
disposed share on the grant date for the option to which such disposed share
relates. In the case of a Qualifying Transfer, (a) the basis of the disposed
share will be increased by an amount equal to the amount of compensation income
so recognized, and (b) the participant will recognize a capital gain or loss,
as the case may be, equal to the difference between the amount realized from
the disposition of the shares and the basis for such shares.
If the participant disposes of any share other than by a Qualifying
Transfer, the participant generally will recognize compensation income in an
amount equal to the excess of the market value of the disposed share on the
date of disposition over its purchase price. In such event, we will be entitled
to a tax deduction equal to the amount of compensation income recognized by the
participant. Otherwise, we will not be entitled to any tax deduction with
respect to the grant or exercise of options under the ESPP or the subsequent
sale by participants of shares purchased pursuant to the ESPP. A transfer by
the estate of the participant of shares purchased by the participant under the
employee stock purchase plan has the same federal income tax effects on us as a
Qualifying Transfer.
VOTE REQUIRED FOR ADOPTION OF AMENDMENT TO THE ESPP.
Approval of the adoption of the amendment to the ESPP requires the
affirmative votes of at least a majority of the outstanding shares of our
common stock entitled to vote on the proposal who are present at the annual
meeting, in person or by proxy. Should stockholder approval for the amendment
not be obtained, then, if our board of directors approves additional shares for
issuance under the ESPP, no purchases of our common stock will be made under
the ESPP until February 29, 2004, the first purchase date that follows the date
upon which the board may approve up to 200,000 additional shares for issuance
under the ESPP.
Abstentions will have the same effect as a vote against the proposal to
approve the adoption of the ESPP, but "broker non-votes", if any, will have no
effect on such proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE "FOR" THE AMENDMENT TO THE ESPP.
11
RATIFICATION OF AUDITORS
(PROPOSAL 3)
At the recommendation of the Audit Committee, our board of directors has
selected PricewaterhouseCoopers LLP to serve as auditors of Alamosa for its
fiscal year ending December 31, 2003. Although stockholder ratification of our
board of directors' action in this respect is not required, the board of
directors considers it desirable for stockholders to pass upon the selection of
auditors and, if the stockholders do not ratify the selection, may reconsider
its selection. Ratification of the appointment of independent auditors of
Alamosa requires the affirmative vote of at least a majority of the outstanding
shares of our common stock entitled to vote on the proposal who are present at
the annual meeting, in person or by proxy. With respect to the ratification of
the appointment of auditors of Alamosa, abstentions from voting will have the
same effect as voting against such matter and "broker non-votes," if any, will
be disregarded and have no effect on the outcome of the vote.
Representatives of PricewaterhouseCoopers LLP are expected to be present
at the annual meeting, will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions from
stockholders.
We have been informed by PricewaterhouseCoopers LLP that neither the firm
nor any of its members or their associates has any direct financial interest or
material indirect financial interest in us or any of our affiliates.
During Alamosa's fiscal year ended December 31, 2002, Alamosa was billed
the following aggregate fees by PricewaterhouseCoopers LLP:
AUDIT FEES. The aggregate fees billed by PricewaterhouseCoopers LLP to
Alamosa for professional services rendered for the audit of Alamosa's annual
financial statements for Alamosa's fiscal year ended December 31, 2002,
included in Alamosa's Annual Report on Form 10-K and the reviews of the
financial statements included in Alamosa's Forms 10-Q for that fiscal year was
$501,800.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. The
aggregate fees billed by PricewaterhouseCoopers LLP to Alamosa for its fiscal
year ended December 31, 2002 for the professional services described in
Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X (financial information
systems design and implementation services) was $252,282.
ALL OTHER FEES. The aggregate fees billed by PricewaterhouseCoopers LLP to
Alamosa for professional services rendered to Alamosa for its fiscal year ended
December 31, 2002, other than the Audit Fees and Financial Information Systems
Design and Implementation Fees described in the preceding two paragraphs, was
$828,043. The principal non-audit services provided by PricewaterhouseCoopers
LLP during fiscal 2002 were (i) assistance with SEC registration statements,
(ii) fees related to the audits of the Company's benefit plans and (iii) tax
and accounting consulting services. The Audit Committee of our board of
directors has concluded that the provision of these non-audit services is
compatible with maintaining PricewaterhouseCoopers LLP's independence.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT
ACCOUNTANTS.
12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information as of April 14, 2003
(except as otherwise indicated) with respect to the number of shares of our
common stock beneficially owned by each person who is known to us to be the
beneficial owner of more than 5% of our common stock, the number of shares of
our common stock beneficially owned by each of our executive officers,
directors and nominees for director, and the number of shares of our common
stock beneficially owned by all our current executive officers and directors as
a group. Except as otherwise indicated, each such stockholder has sole voting
and investment power with respect to the shares beneficially owned by such
stockholder.
NUMBER OF SHARES
BENEFICIALLY PERCENTAGE
NAME AND ADDRESS (1) OWNED (2) OF OWNERSHIP (2)
------------------- ---------------- ---------------
5% STOCKHOLDERS:
Caroline Hunt Trust Estate ....................... 8,176,366 (3) 8.65%
100 Crescent Court, Suite 1700
Dallas, TX 75201
South Plains Telephone Cooperative, Inc. ......... 8,594,732 (4) 9.09%
2425 Marshall Street
Lubbock, TX 79415
Budagher Family, LLC. ............................ 6,437,735 (5) 6.81%
3702 Holland Avenue
Dallas, TX 75219
Taylor Telephone Cooperative, Inc. ............... 5,075,700 (6) 5.37%
9796 N. Interstate 20
Merkel, TX 79536
Mellon Financial Corporation, et al .............. 5,651,213 (7) 5.98%
One Mellon Center
Pittsburgh, PA 15258
DIRECTORS AND EXECUTIVE OFFICERS:
David E. Sharbutt ................................ 2,340,068 (8)(18) 2.43%
Ray M. Clapp, Jr. ................................ 70,934 (9) *
Kendall W. Cowan ................................. 1,231,482 (10)(18) 1.29%
Scotty Hart ...................................... 67,773 (11) *
Schuyler B. Marshall ............................. 261,498 (12) *
Loyd I. Rinehart ................................. 294,959 (13)(18) *
Michael V. Roberts ............................... 4,879,737 (14) 5.16%
Steven C. Roberts ................................ 5,168,983 (15) 5.46%
Anthony Sabatino ................................. 266,933 (16)(18) *
Jimmy R. White ................................... 56,773 (17) *
Margaret Z. Couch ................................ 243,413 (18)(19) *
13
NUMBER OF SHARES
BENEFICIALLY PERCENTAGE
NAME AND ADDRESS (1) OWNED (2) OF OWNERSHIP (2)
------------------- ---------------- ---------------
Thomas F. Riley, Jr. ......................... 231,674 (20) *
Allen T. McInnes ............................. 15,000 *
Steven A. Richardson ......................... 172,000 (21) *
John F. Otto, Jr ............................. 44,545 (22) *
All Directors and Executive Officers ......... 15,345,772 15.61%
----------
* Less than one percent.
(1) Except as otherwise indicated in the footnotes below, the address for
each executive officer and director is 5225 S. Loop 289, Lubbock, Texas
79424.
(2) Percentage of ownership is based on 94,590,563 shares of common stock
outstanding as of April 14, 2003. Beneficial ownership is determined in
accordance with Rule 13d-3 of the Securities Exchange Act of 1934 (the
"Exchange Act"). A person is deemed to be the beneficial owner of any
shares of common stock if that person has or shares voting power or
investment power with respect to that common stock, or has the right to
acquire beneficial ownership at any time within 60 days of April 2, 2003.
As used herein, voting power is the power to vote or direct the voting of
shares and investment power is the power to dispose or direct the
disposition of shares.
(3) Includes: (a) 7,017,506 shares owned by the Caroline Hunt Trust Estate
("CHTE"), (b) 603,974 shares owned by Rosewood Financial, Inc. ("Rosewood
Financial"), an indirect wholly owned subsidiary of CHTE, and (c) 554,886
shares owned by Fortress Venture Capital II, L.P. ("Fortress"), whose
sole general partner is Rosewood Management Corporation ("Rosewood
Management"), an indirect wholly owned subsidiary of CHTE. CHTE has sole
voting and dispositive power with respect to the shares owned by CHTE.
CHTE, Rosewood Financial and The Rosewood Corporation, a wholly owned
subsidiary of CHTE ("Rosewood Corporation"), share voting and dispositive
power with respect to the shares owned by Rosewood Financial by reason of
their parent-subsidiary relationship only. Fortress and Rosewood
Management share voting and dispositive power with respect to the shares
owned by Fortress. CHTE, Rosewood Corporation and Rosewood Financial
disclaim beneficial ownership of any shares held by Rosewood Management
or Fortress, and Rosewood Management and Fortress disclaim beneficial
ownership of any shares held by CHTE, Rosewood Corporation or Rosewood
Financial. The address for Rosewood Corporation, Rosewood Financial,
Rosewood Management and Fortress is the same as the address for CHTE.
(4) These shares are owned by SPACE Mgt, Ltd ("SPACE"), a wholly-owned
subsidiary of South Plains Telephone Cooperative, Inc. South Plains
Telephone Cooperative and SPACE share voting and investment power for
these shares, as a result of their parent-subsidiary relationship. The
address for SPACE is the same as the address for South Plains Telephone
Cooperative.
(5) These shares are owned by Budagher Family, LLC ("Budagher LLC"), Michael
R. Budagher and certain related parties. Mr. Budagher and his spouse and
children own 100% of the membership interests of Budagher LLC. Mr.
Budagher and Budagher LLC share voting and dispositive power of the
shares owned by Budagher Family, LLC as a result of such relationship.
Includes 50,759 shares issuable pursuant to options exercisable by Mr.
Budagher within 60 days. The address of Mr. Budagher is the same as the
address for Budagher LLC.
(6) These shares are owned by Taylor Telecommunications, Inc., a wholly-owned
subsidiary of Taylor Telephone Cooperative, Inc.. Taylor Telephone
Cooperative and Taylor Telecommunications share voting and investment
power for these shares, as a result of their parent-subsidiary
relationship. The address for Taylor Telecommunications is the same as
the address for Taylor Telephone Cooperative.
14
(7) Based on a Schedule 13G filed on January 21, 2003 by Mellon Financial
Corporation ("Mellon"). As reported in the Schedule 13G, Mellon possesses
sole voting power with respect to 3,933,748 shares and possesses shared
voting power with respect to 712,870 shares. As reported in the Schedule
13G, Mellon possesses sole dispositive power with respect to 5,651,213
shares. These holdings include the shares held by certain subsidiaries of
Mellon.
(8) Includes 339,499 shares held individually by Mr. Sharbutt, 48,824 shares
held in Mr. Sharbutt's 401(k) plan account, 200 shares beneficially owned
by Mr. Sharbutt's children, 250,000 shares of restricted stock, and
1,695,000 shares issuable pursuant to options exercisable within 60 days.
Excludes 625,423 shares beneficially owned by Five S, Ltd. Mr. Sharbutt
is a limited partner of Five S, Ltd. and President of Sharbutt Inc., the
general partner of Five S Ltd., and may be considered a beneficial owner
of the shares owned by Five S, Ltd. Mr. Sharbutt disclaims beneficial
ownership of these shares, except to the extent of his pecuniary interest
therein.
(9) Includes 175 shares held individually by Mr. Clapp and 70,759 shares
issuable pursuant to options exercisable within 60 days.
(10) Includes 89,727 shares held individually by Mr. Cowan, 150,000 shares of
restricted stock and 985,000 shares issuable pursuant to options
exercisable within 60 days.
(11) Includes 1,000 shares held individually by Mr. Hart, 66,473 shares
issuable pursuant to options exercisable within 60 days and 300 shares
held by Lubbock HLH, Ltd. Mr. Hart controls Lubbock HLH, Ltd. and is a
beneficial owner of the shares held by Lubbock HLH, Ltd. Excludes
8,594,732 shares held by SPACE, as to which Mr. Hart disclaims beneficial
ownership. Mr. Hart is the General Manager of South Plains Telephone
Cooperative and SPACE, a wholly-owned subsidiary of South Plains
Telephone Cooperative. Mr. Hart's address is the same as the address for
South Plains Telephone Cooperative.
(12) Includes 110,000 shares held individually by Mr. Marshall, 500 shares
held indirectly in an IRA account for Mr. Marshall and 150,998 shares
issuable pursuant to options exercisable within 60 days. Excludes
8,176,366 shares held by Caroline Hunt Trust Estate, as to which Mr.
Marshall disclaims beneficial ownership. Mr. Marshall is the President of
Rosewood Financial, Inc. and The Rosewood Corporation, both of which are
wholly-owned subsidiaries of Caroline Hunt Trust Estate. Additionally,
Mr. Marshall is a director of various Caroline Hunt Trust Estate
subsidiaries. The address for Mr. Marshall is the same as the address for
Caroline Hunt Trust Estate.
(13) Includes 26,815 shares held individually by Mr. Rinehart, 164,000 shares
issuable pursuant to options exercisable within 60 days and 100,000
shares of restricted stock.
(14) Includes 4,830,400 shares held individually by Mr. Roberts, 48,212 shares
issuable pursuant to options exercisable within 60 days, 1,000 shares
held by Mr. Roberts and his wife together and 125 shares owned by Roberts
Broadcasting Company. Mr. Roberts shares voting and investment power with
respect to the 1,000 shares held together with his wife and the shares
owned by Roberts Broadcasting Company. Mr. Roberts is the Chairman, Chief
Executive Officer and principal stockholder of Roberts Broadcasting
Company.
(15) Includes 4,959,900 shares held individually by Mr. Roberts, 57,958 shares
issuable pursuant to options exercisable within 60 days, 100,000 shares
held by Mr. Roberts and his wife together, 1,000 shares held by Mr.
Roberts' wife, 125 shares owned by Roberts Broadcasting Company and
50,000 shares owned by SCD Investments, LLC. Mr. Roberts is the President
and Chief Operating Officer and principal stockholder of Roberts
Broadcasting Company. Mr. Roberts is also the sole member of SCD
Investments, LLC and may be considered the beneficial owner of such
shares. Mr. Roberts shares voting and investment power with respect to
the 100,000 shares held by Mr. Roberts and his wife together, the 1,000
shares held by Mr. Roberts' wife and the shares owned by Roberts
Broadcasting Company. Excludes 35,400 shares Mr. Roberts' wife holds in
custodial account for their minor children, as to which shares Mr.
Roberts disclaims beneficial ownership.
15
(16) Includes 17,876 shares held individually by Mr. Sabatino, 100,000 shares
of restricted stock and 133,500 shares issuable pursuant to options
exercisable within 60 days.
(17) Includes 1,014 shares held individually by Mr. White and 55,759 shares
issuable pursuant to options exercisable within 60 days. Mr. White's
address is Highway 87 North, Dalhart, TX 79022.
(18) Includes shares held by Reliance Trust as Trustee under the Alamosa
401(k) Savings Plan, as follows: Mr. Cowan, 6,755 shares; Mr. Rinehart,
4,144 shares; Mr. Sabatino, 15,557 shares; Ms. Couch, 4,997 shares; Mr.
Sharbutt, 6,545 shares.
(19) Includes 2,160 shares held individually by Ms. Couch, 100,000 shares of
restricted stock and 136,256 shares issuable pursuant to options
exercisable within 60 days.
(20) Includes 166,500 shares held individually by Mr. Riley and 65,174 shares
issuable pursuant to options exercisable within 60 days. Excludes 666,666
shares held by Chickasaw Holding Company and 3,233,030 shares held by
Southwest PCS, L.L.C., as to which Mr. Riley disclaims beneficial
ownership. Mr. Riley is an officer and director of Chickasaw Holding
Company, and an officer of Southwest PCS, L.L.C. Chickasaw Holding
Company is the managing member of Southwest PCS, L.L.C.
(21) Includes 100,000 shares of restricted stock held by Mr. Richardson and
72,000 shares issuable pursuant to options exercisable within 60 days.
(22) Includes 29,545 shares issuable pursuant to options exercisable within
60 days.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the Exchange Act requires our directors and executive
officers and persons who own more than 10% of a registered class of equity
securities to file with the Securities and Exchange Commission ("SEC"), and
with each exchange on which our common stock trades, initial reports of
ownership and reports of changes in ownership of common stock. Officers,
directors and greater than 10% beneficial owners are required by the SEC's
regulations to furnish us with copies of all Section 16 (a) forms they file.
Based solely on review of the copies of such reports furnished to us, we
believe that during 2002 our officers, directors and greater than 10%
beneficial owners complied with all applicable Section 16(a) filing
requirements, except as follows. On September 30, 2002, we granted options to
Messrs. Hart, Riley, Michael Roberts and Steven Roberts. A Form 4 reporting
these grants was not filed until November 19, 2002 for Messrs. Michael and
Steven Roberts, and not until November 7, 2002, for Messrs. Hart and Riley. On
October 1, 2002, each of the executive officers named in the Summary
Compensation Table was granted shares of restricted stock. Forms 4 reporting
these grants were not filed until October 22, 2002.
16
EXECUTIVE OFFICERS AND EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS.
The following table sets forth information concerning our executive
officers as of the date of this proxy statement. Our executive officers are
elected annually by our board of directors and serve until their successors are
duly elected and qualified.
NAME AGE TITLE
---- ---- -----
David E. Sharbutt 53 Chairman of the Board of Directors and
Chief Executive Officer
Kendall W. Cowan 48 Chief Financial Officer and Secretary
Steven A. Richardson 47 Chief Operating Officer
Loyd I. Rinehart 48 Senior Vice President of Corporate
Finance
Anthony Sabatino 40 Chief Technology Officer and Senior
Vice President of Engineering and
Network Operations
Margaret Z. Couch 51 Chief Marketing Officer
Set forth below is a brief description of the present and past business
experience of each of the persons who serves as an executive officer of the
Company who is not also serving as a director.
STEVEN A. RICHARDSON. Mr. Richardson has been our Chief Operating Officer
since December 2002. From 2000 to 2001, he served as President of the Central
Region for Cingular Wireless, directing the sales efforts for a five-state
area. From 1999 to 2000 he served as President and General Manager for
Southwestern Bell Wireless, Cingular Wireless' predecessor, with profit and
loss responsibility for the Dallas/Fort Worth area. From 1997 to 1999, he
served as Vice President and General Manager for Pacific Bell Wireless with
profit and loss responsibility for San Diego and Las Vegas.
LOYD I. RINEHART. Mr. Rinehart became our Senior Vice President of
Corporate Finance in June 2000. From June 1998 to June 2000, Mr. Rinehart
served as Chief Financial Officer of Affordable Residential Communities, the
fourth largest owner of manufactured housing land-lease communities and one of
the three largest independent retailers of manufactured homes. From June 1995
to June 1998, Mr. Rinehart served as Executive Vice President of Plains Capital
Corporation, a bank holding company based in Lubbock, Texas. He was responsible
for all non-Lubbock banking operations, including due diligence, modeling, the
purchase or the establishment of additional locations and ultimately
management. Prior to his employment with Plains Capital Corporation, Mr.
Rinehart served as Chief Financial Officer of First Nationwide, a $15 billion
thrift, and its predecessor financial institutions. Mr. Rinehart is a Certified
Public Accountant.
ANTHONY SABATINO. Mr. Sabatino became our Chief Technology Officer and
Senior Vice President of Engineering and Network Operations in July 2000. From
1995 to July 2000, he was the National Radio Frequency (RF) Engineering
Director for Sprint PCS and was an initial member of the Sprint PCS corporate
launch team. Mr. Sabatino developed all National RF Engineering Standards. He
also acted as design lead for a Sprint PCS new RF Interference Analysis Tool.
Mr. Sabatino is a director and President of the PCIA Cost Sharing Clearinghouse
and a member of the University of Kansas Advisory Committee representing
electrical engineering.
MARGARET Z. COUCH. Ms. Couch has been our Chief Marketing Officer since
May 2001, but she has been with the Company since 1999 in various capacities.
From February to May 2001 she was Senior Vice President, South Central Region
and from January 2000 to January 2001 she was General Manager and Vice
President for the Great Plains and Northwest Regions. In January 1999, she
started as General Manager for the West Texas Region. In 1987, Ms. Couch
founded Performance Associates, Inc., a human resources and sales training
consulting firm and in 1996 she founded CK BusinesSense, Inc., which expanded
the services provided by Performance Associates to include management
consulting and assisting organizations in generating greater profitability. Ms.
Couch has more than twenty years of
17
management and leadership experience as a management consultant and trainer.
She has worked with a vast array of clients, including communications,
manufacturing, health care and financial companies as well as government,
education and non-profit entities.
SUMMARY COMPENSATION TABLE.
The following table sets forth the compensation received by the Chief
Executive Officer of the Company and other executive officers of the Company
who were serving in such capacities on December 31, 2002 (the "Named Executive
Officers") with respect to the Company's 2002 fiscal year.
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------------------- --------------------------------------------------
NUMBER OF
RESTRICTED SECURITIES
STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARD(S) (1) OPTIONS COMPENSATION
----------------------------- --------------- ----------- ----------- -------------- ------------ ------------------
David E. Sharbutt 2002 $315,138 $232,776 $75,000 750,000 $33,994 (2)
Chief Executive Officer 2001 $220,833 $213,421 $21,154
2000 (3) $175,000 $146,024 $20,434
Kendall W. Cowan 2002 $220,723 $174,821 $45,000 350,000 $35,129 (2)
Chief Financial Officer 2001 $172,917 $150,067 $19,879
2000 (3) $150,000 $100,163 $19,889
Anthony Sabatino 2002 $189,510 $141,521 $30,000 200,000 $10,237 (2)
Chief Technology 2001 $157,500 $129,973 $ 3,055
Officer and SVP of
Engineering and
Network Operations
Margaret Z. Couch 2002 $172,788 $142,881 $30,000 200,000 $ 9,045 (2)
Chief Marketing Officer 2001 $131,344 $143,697 24,250 $ 5,704
Loyd I. Rinehart 2002 $166,040 $193,843 $30,000 200,000 $16,219 (2)
SVP of Corporate 2001 $150,000 $ 76,501 $10,182
Finance 2000 $ 87,500 $ 23,908 100,000
----------
(1) Messrs. Sharbutt, Cowan, Rinehart and Sabatino were granted 250,000,
150,000, 100,000 and 100,000 shares of restricted stock in October of
2002, respectively. Ms. Couch was also granted 100,000 shares of
restricted stock in October of 2002. 50% of these shares will vest in
October of 2003 and 25% vest in October of 2004 and 2005. The value of
the restricted stock holdings of each Named Executive Officer as of
December 31, 2002 is equal to the number of shares they were granted in
2002 multiplied by $0.52, the per share closing price of our common stock
on December 31, 2002. These shares of restricted stock are entitled to
receive any dividends that we may pay.
(2) The amounts reflected in the All Other Compensation column represent the
following payments and benefits: Mr. Sharbutt $20,625 for Company-paid
life insurance premiums and $13,369 for Company contributions to the
Company 401(k) plan; Mr. Cowan $22,790 for Company-paid life insurance
and $12,339 for Company contributions to the Company 401(k) plan; Mr.
Sabatino $10,237 for Company contributions to the Company 401(k) plan;
Ms. Couch $9,045 for Company contributions to the Company 401(k) plan;
and Mr. Rinehart, $16,219 for Company contributions to the Company 401(k)
plan.
(3) The amounts shown as salary for Messrs. Sharbutt and Cowan for Year 2000
have been corrected. In the 2001 annual proxy statement both Mr.
Sharbutt's and Mr. Cowan's salaries were overstated as a result of the
inclusion of certain perquisites, in the amount of $29,166 and $12,500,
respectively.
18
STOCK OPTION GRANTS IN LAST FISCAL YEAR.
The table below provides information regarding stock options granted to
the Named Executive Officers in fiscal year 2002 and hypothetical gains for the
options through the end of their respective ten year terms. In accordance with
applicable requirements of the SEC, we have assumed annualized growth rates of
the market price of our common stock over the exercise price of the option of
5% and 10%, running from the date the option was granted to the end of the
option term. Actual gains, if any, depend on the future performance of our
common stock and overall conditions and the information in this table should
not be construed as an estimate of future stock price growth. We did not grant
any stock appreciation rights in fiscal year 2002.
PERCENTAGE OF
NUMBER OF TOTAL OPTIONS POTENTIAL REALIZABLE
SECURITIES GRANTED TO VALUE AT ASSUMED
UNDERLYING EMPLOYEES IN EXERCISE ANNUAL RATES OF STOCK
OPTIONS FISCAL YEAR PRICE PER PRICE APPRECIATION FOR
NAME GRANTED (1) 2002 SHARE EXPIRATION DATE OPTION TERM
---- ----------- -------------- --------- --------------- ----------------------
5% 10%
David E. Sharbutt 750,000 29.41% $ 0.376 09/30/2012 $177,348 $449,435
Kendall W. Cowan 350,000 13.72% $ 0.376 09/30/2012 $ 82,763 $209,737
Anthony Sabatino 200,000 7.84% $ 0.376 09/30/2012 $ 47,293 $119,849
Margaret Z. Couch 200,000 7.84% $ 0.376 09/30/2012 $ 47,293 $119,849
Loyd I. Rinehart 200,000 7.84% $ 0.376 09/30/2012 $ 47,293 $119,849
----------
(1) All stock options granted in 2002 to the Named Executive Officers vest at
the rate of 4% per month from the date of grant.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES.
The following table provides summary information regarding option
exercises in 2002 by the Named Executive Officers and the value of such
unexercised options at December 31, 2002.
VALUE OF UNEXERCISED
NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY OPTIONS
UNEXERCISED OPTIONS AT FISCAL AT FISCAL YEAR-END
SHARES ACQUIRED VALUE YEAR-END (EXERCISABLE / (EXERCISABLE /
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE) UNEXERCISABLE) (1)
---- --------------- ----------- ------------------------------- -------------------
David E. Sharbutt 0 0 1,515,000/690,000 $8,640/$99,360
Kendall W. Cowan 0 0 901,000/904,000 $4,032/$46,368
Loyd I. Rinehart 0 0 82,667/217,333 $2,304/$26,496
Anthony Sabatino 0 0 85,500/250,500 $3,040/$34,958
Margaret Z. Couch 0 0 72,248/232,002 $2,304/$26,496
----------
(1) The values in this column are based upon the per share closing price of
our common stock on December 31, 2002 of $0.52.
EMPLOYMENT AGREEMENTS.
DAVID E. SHARBUTT AND KENDALL W. COWAN. Alamosa is a party to employment
agreements, effective October 1, 2002, with each of Messrs. Sharbutt and Cowan.
Mr. Sharbutt's agreement has a five-year term and entitles him to receive an
annual base salary of $425,000. Mr. Sharbutt's agreement also provides that so
long as he serves on the Alamosa board of directors he will serve as Chairman
of the board. Mr. Cowan's agreement has a three-year term and entitles him to
receive an annual base salary of $290,000. Messrs. Sharbutt and Cowan are
eligible to receive an annual performance-based bonus with an initial target of
$225,000 and $140,000, respectively. The executives are entitled to participate
in any long-term incentive plans Alamosa establishes, including Alamosa's
Amended and Restated 1999 Long Term Incentive Plan ("LTIP"). The agreement
provides for immediate grants of stock options and restricted stock pursuant to
the LTIP. Mr. Sharbutt received 750,000 options and 250,000 shares of
restricted stock
19
and Mr. Cowan received 350,000 options and 150,000 shares of restricted stock.
The options granted vest and become exercisable at a rate of 4% each month
following October 1, 2002. Half the restricted stock vests on the first
anniversary of the grant date and 25% vests on each of the second and third
anniversaries of the grant date.
In addition, the agreements also provide for annual option grants,
contingent upon continued employment. Mr. Sharbutt will receive options
according to the following schedule: 250,000 in 2003; 200,000 in 2004; 150,000
in 2005 and 100,000 in 2006. Mr. Cowan will receive an option grant according
to the following schedule: 150,000 in 2003; 125,000 in 2004 and 100,000 in
2005. The grants made for 2003 will be made on October 1, 2003 and will be
fully vested and exercisable upon grant. For each subsequent annual grant, half
the annual options will be granted in January and half in July, and the options
will be exercisable six months following the grant date.
The agreements entitle the executives to $5,000,000 in term life insurance
coverage, reimbursement for reasonable business expenses, a car allowance,
reimbursement for approved club dues, and financial planning services up to
$10,000 per annum. The executives may participate in such incentive,
retirement, life, medical, disability and other benefit plans as may be
available to Alamosa's other executives with comparable responsibilities,
subject to the terms of those programs.
Upon termination of employment by Alamosa without cause or by the
executive for good reason, within thirty days after the date of termination,
Alamosa will provide the terminated executive a lump-sum severance payment
equal to the sum of: (i) one year's base salary; (ii) the higher of (x) the
executive's target bonus or (y) the average annual bonus the executive earned
over the two preceding years (the "Bonus"); and (iii) a pro-rated bonus for the
year of termination. If such termination occurs within twelve months following
a change in control, the terminated executive is instead entitled to three
times his base salary and Bonus, plus a pro-rata bonus for the year of
termination. In either case, the terminated executive will also receive
continuing welfare and fringe benefits for one year and all restricted stock
and options granted to the executive under the agreement will become vested and
exercisable. Further, each executive is entitled to receive a gross-up payment
to make him whole if he becomes subject to the excise tax imposed under Section
4999 of the Code on excess parachute payments; provided, however, that no
gross-up payment will be made to the executive and the amount paid to the
executive will be reduced if a reduction of 15% or less to the payments and
benefits that the executive would receive on termination would not subject him
to the excise tax imposed under Section 4999 of the Code. If a reduction is
imposed, the reduction will be the minimum amount required so that the
executive will not be subject to the excise tax on excess parachute payments.
The agreements contain non-compete and non-solicitation provisions
effective for two years following termination of employment without cause or
for good reason within one year following a change in control or one year
following termination of employment in any other circumstances. Generally, a
change of control will occur for purposes of the agreements (and for the
agreements described below) if (i) any person acquires 25% or more of the
beneficial ownership of Alamosa, (ii) continuing directors (other than those
approved) cease to constitute a majority of the board or directors, (iii)
certain mergers or consolidations occur, (iv) stockholders approve any plan or
proposal for the liquidation or dissolution of Alamosa or (v) there is a sale
of substantially all of Alamosa's assets.
ANTHONY SABATINO, STEVEN A. RICHARDSON, LOYD I. RINEHART AND MARGARET Z.
COUCH. Alamosa entered into employment agreements with Mr. Anthony Sabatino,
Mr. Loyd I. Rinehart and Ms. Margaret Z. Couch on October 1, 2002 and Mr.
Steven A. Richardson on December 1, 2002. These agreements have three year
terms. Mr. Sabatino is entitled to receive an annual base salary of $210,000
with a target annual bonus of $110,000; Mr. Rinehart is entitled to receive an
annual base salary of $165,000 with a target annual bonus of $95,000; Ms. Couch
is entitled to receive an annual base salary of $180,000 with a target annual
bonus of $80,000; and Mr. Richardson is entitled to receive an annual base
salary of $250,000 with a target annual bonus of $150,000. The executives are
entitled to participate in any long-term incentive plans Alamosa establishes,
including the LTIP. The agreements provided for immediate grants of stock
options and restricted stock pursuant to the LTIP. Mr. Sabatino, Mr. Rinehart
and Ms. Couch each received 200,000 options and 100,000 shares of restricted
stock. Mr. Richardson received 300,000 options and 100,000 shares of restricted
stock. The options granted vest and become exercisable at a rate of 4%
20
each month following October 1, 2002. Half the restricted stock vests on the
first anniversary of the grant date and 25% vests on each of the second and
third anniversaries of the grant date.
In addition, the agreements also provide for annual option grants. Mr.
Sabatino, Mr. Rinehart and Ms. Couch will receive options according to the
following schedule: 70,000 in 2003; 60,000 in 2004 and 50,000 in 2005. Mr.
Richardson will receive options according to the following schedule: 150,000 in
2003; 125,000 in 2004 and 100,000 in 2005. The grants for 2003 will be made on
October 1, 2003 and will be fully vested and exercisable upon grant. For each
subsequent annual grant, half the annual options will be granted in January and
half in July, and the options will be exercisable six months following the
grant date.
The agreements entitle the executives to reimbursement for reasonable
business expenses and a car allowance. They may participate in such incentive,
retirement, life, medical, disability and other benefit plans as may be
available to Alamosa's other executives with comparable responsibilities,
subject to the terms of those programs.
Upon termination of employment by Alamosa without cause or by the
executive for good reason, within thirty days of the date of termination,
Alamosa will provide the terminated executive a lump-sum severance payment
equal to: (i) one year's base salary; (ii) the higher of (x) the executive's
target bonus or (y) the average annual bonus the executive earned over the two
preceding years (the "Bonus"); and (iii) a pro-rated bonus for the year of
termination. If such termination occurs within twelve months following a change
in control, the executive is instead entitled to receive two times base salary
and Bonus, plus a pro-rata bonus for the year of termination. In either case,
the terminated executive will also receive continuing welfare and fringe
benefits for one year and all restricted stock and options granted to the
executive under the agreement would become vested and exercisable.
Payments to Mr. Sabatino, Mr. Rinehart and Ms. Couch will be reduced so
that no amount will be subject to the excise tax imposed under section 4999 of
the Code if each such executive's after-tax position would be improved as a
result of such reduction. Mr. Richardson is entitled to a gross-up payment on
the same terms as are applicable to Messrs. Sharbutt and Cowan.
The agreements contain non-compete and non-solicitation provisions for two
years following termination of employment without cause or for good reason
within one year following a change of control or one year following termination
of employment in any other circumstances.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
The Compensation Committee is responsible for reviewing and approving all
compensation arrangements for our officers, as well as reviewing and approving
the terms of any stock option grants or other awards under our long-term
incentive plan and reviewing and approving the terms of any future stock plans.
During the fiscal year 2002, the Compensation Committee met on eleven
occasions.
In April, 2002, our board of directors merged the former Stock Option
Committee into the Compensation Committee. Before April, the members of the
Compensation Committee were Messrs. Hyde, Marshall and Phelps. Each of these
individuals and Mr. Riley were members of the Stock Option Committee. Mr. Riley
did not continue to serve on the Compensation Committee after the merger with
the Stock Option Committee.
During fiscal year 2002, the Compensation Committee consisted of Messrs.
Hyde, Marshall and Phelps. The current members of the Compensation Committee
are Messrs. Marshall, Hart and Clapp. Messrs. Hyde and Phelps resigned from the
Board of Directors of the Company effective February, 2003 and were members of
the Compensation Committee until such time. The Compensation Committee is
responsible for reviewing and approving all compensation arrangements for the
Company's officers.
In connection with the Company's distribution and sales of Sprint PCS
wireless communications equipment, on December 28, 1998, the Company entered
into a long-term agreement to lease space for a retail store in Lubbock, Texas
with Lubbock HLH, Ltd., principally owned by Mr. Hart. This lease has a term of
15 years and provides for monthly payments aggregating to approximately
$110,000 a year, subject to adjustment based on the Consumer Price Index on the
first day of the sixth lease year and on the first day of the eleventh lease
year. During fiscal year 2002, approximately $110,000 was paid under
21
this lease. In addition to rental, we paid approximately $20,000 to Lubbock HLM
for taxes and other expenses related to the leased property.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION.
Company compensation policies are designed to tie overall bonus
compensation to Company performance and individual performance. Incentive
bonuses for the executive officers include bonus targets based on key objective
quarterly milestones in the Company's business plan and annual budget. During
2002, bonus compensation for executive officers was dependent on both internal
Company objectives, external objectives (peer comparison) and departmental and
individual objectives. However, the Chief Executive Officer's bonus was
dependent solely on internal Company objectives.
Company internal objectives in 2002 were attainment of EBITDA targets, net
subscriber additions and achievement of a desired efficiency ratio, all as
contained in the Company's 2002 business plan and budget. Efficiency ratio is a
measure of how effectively the Company uses its capital by measuring the cost
of maintaining the network on a per subscriber basis. These measures are
calculated quarterly and bonuses based on these internal objectives are paid
quarterly.
In the case of the Chief Financial Officer, Chief Marketing Officer, Chief
Technology Officer and Senior Vice President of Corporate Finance, the internal
bonus was weighted 75% on these three company objectives, 10% on certain
departmental objectives, and 15% on individual objectives. The Company
establishes departmental and individual objectives within the executives'
spheres of responsibility that have the greatest effect on the Company's
successful attainment of its annual business plan and budget.
In addition to the above bonus criteria, during 2002, the Company compared
how it was performing on key success measures relative to the performance of
similar companies in the PCS industry. The Peer bonus was introduced to ensure
that our metrics measured up well against our peers in the industry. The Peer
bonus was initially payable on a quarterly basis. However, beginning with the
3rd quarter of 2002, we decided to pay the Peer bonus on an annual basis. The
categories rated in the peer comparison included gross customer additions, net
customer additions, customer churn, average revenue per user, cash cost per
user, cost per gross customer addition, blocked calls, and dropped calls.
Using the 1st quarter of 2002 as an example of how the internal Company
objective bonus system worked: the Chief Executive Officer had an award target
of $20,000. For 1st quarter, net-subscriber additions were 135% of target;
EBITDA was 235% of target; and, the efficiency ratio was 111% of target. The
combination of these factors resulted in a 1st quarter bonus for the Chief
Executive Officer of $38,000. Utilizing these factors as well as organizational
objectives and individual objectives for the other executive officers, the
Chief Financial Officer received a total 1st quarter bonus of $26,538, the
Chief Marketing Officer received a total 1st quarter bonus of $26,641, the
Chief Technology Officer received a total 1st quarter bonus of $25,063 and the
Senior Vice President-Finance received a total 1st quarter bonus of $12,063.
In addition, Alamosa's performance against its Peer companies resulted in
1st quarter Peer bonus payments as follows: $27,500 was paid to the Chief
Executive; $18,906 was paid to the Chief Financial Officer; $21,484 was paid to
the Chief Marketing Officer; $17,817 was paid to the Chief Technology Officer;
and $8,594 was paid to the Sr. Vice-President of Finance.
The committee has elected to utilize purely objective and quantitative
measures for the purpose of quarterly and annual bonuses, as the above
discussion illustrates. The committee is also concerned with performance that
may be considered subjective or not subject to measurement. As such, the
committee may also make a subjective evaluation of executive performance that
may affect salary adjustments and other components of compensation.
For 2003, the committee has determined that the bonus compensation
structure should focus on EBITDA and net subscriber additions, with bonuses
payable on an annual and quarterly basis based on the achievement of EBITDA and
net subscriber addition targets. The bonus opportunity will be split equally
between quarterly and annual goals.
In 2002, the committee engaged a nationally-recognized compensation
consulting firm to study the Company's executive compensation practices to
ensure that overall compensation was both competitive
22
and designed to suit Company objectives. Upon consideration of the reports
prepared by the compensation consultant, the committee increased the base
salaries of each of our executive officers to make them competitive in the PCS
industry and decided that, in addition to stock options, it would issue
restricted stock to address retention concerns as a result of the depressed
stock prices that have affected the PCS industry generally and the stock
options we have issued. In addition, upon the advice of the compensation
consultant, each executive was assigned a target annual bonus (payable
quarterly or annually in the committee's discretion). No annual or quarterly
bonus will be payable unless the committee determines that at least 75% of the
applicable performance goals have been achieved.
The federal income tax law limits the deductibility of certain
compensation paid to the chief executive officer and the four most highly
compensated executives (the "covered employees") in excess of the statutory
maximum of $1 million per covered employee. The committee's general policy is
to structure the compensation paid to the covered employees so as to maximize
the deductibility of such compensation for federal income tax purposes;
however, the committee retains the flexibility, where necessary to promote the
incentive and retention goals described above, to pay compensation which may
not be deductible.
2002 COMPENSATION COMMITTEE:
Tom M. Phelps* Schuyler B. Marshall
Thomas B. Hyde*
* Resigned from our board of directors in February, 2003.
PERFORMANCE GRAPH.
The common stock of the Company began trading on The Nasdaq National
Market (the "Nasdaq") on February 3, 2000. On December 6, 2001, the Company
transferred its listing from The Nasdaq National Market to The New York Stock
Exchange ("NYSE"), where it traded until April 16, 2003. The Company's common
stock currently trades on the OTC Bulletin Board under the symbol "ALMO." The
following performance graph compares the cumulative total stockholder total
return on the common stock of the Company from February 3, 2000 through December
31, 2002 against the cumulative total return of (a) The Nasdaq Stock Market
(U.S. Companies) Index, (b) The Nasdaq Stock Market Telecommunications Index,
(c) NYSE (U.S. Companies) Index and (d) a peer group selected by the Company for
the same period. The peer group consists of the following three companies
(which, together with the Company, represent all of the Sprint PCS Network
Partners whose common stock was publicly traded over the relevant measurement
period): Airgate PCS, Inc., UbiquiTel Inc. and US Unwired Inc.
The graph assumes that $100.00 was invested in our common stock and in
each index on February 3, 2000. The total return for the common stock and the
indices used assumes the reinvestment of dividends, even though dividends have
not been declared on our common stock. The comparisons in the graph below are
based upon historical data and are not indicative of, nor intended to forecast,
future performance of Alamosa's common stock.
23
TOTAL CUMULATIVE RETURN GRAPH (02/03/2000 - 12/31/2002)
[GRAPHIC OMITTED]
SPRINT PCS
NASDAQ NASDAQ NYSE AFFILIATE
DATE ALAMOSA (1) COMPOSITE TELECOM COMPOSITE INDEX
------------ ------------- ----------- ------------ ----------- -----------
02/03/2000 $100.00 $100.00 $100.00 $100.00 $100.00
03/31/2000 222.06 108.59 106.15 102.23 142.57
06/30/2000 122.79 94.19 83.87 102.66 102.27
09/29/2000 95.22 87.22 70.31 102.01 86.75
12/29/2000 47.06 58.67 44.64 100.10 72.97
03/30/2001 62.13 43.70 31.60 90.86 73.90
06/29/2001 95.88 51.32 30.02 95.44 103.01
09/28/2001 81.47 35.59 19.56 83.22 78.13
12/31/2001 70.18 46.32 22.79 91.68 101.15
03/28/2002 29.59 43.82 16.74 93.53 30.65
06/28/2002 8.29 34.75 9.97 82.37 8.31
09/30/2002 1.35 27.83 8.52 69.31 2.06
12/31/2002 3.06 31.71 10.48 72.77 1.65
----------
(1) Prior to February 3, 2000 there was no public market for the Company's
common stock.
24
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AGREEMENTS WITH MESSRS. MICHAEL V. ROBERTS AND STEVEN C. ROBERTS
On February 14, 2001, the Company completed its acquisition of Roberts
Wireless. Messrs. Michael V. Roberts and Steven C. Roberts, who are directors
of the Company, were the sole owners of Roberts Wireless. Pursuant to the terms
of the merger agreement with Roberts Wireless, upon closing of the transaction,
each of Messrs. Michael V. Roberts and Steven C. Roberts was entitled to
receive 6,750,000 shares of our common stock and approximately $2.0 million in
cash as consideration in respect of his ownership interests in Roberts
Wireless. The terms of the merger agreement, including the consideration
payable to Messrs. Michael V. Roberts and Steven C. Roberts, were determined on
the basis of arm's length negotiations between the Company and Messrs. Michael
V. Roberts and Steven C. Roberts. Messrs. Michael V. Roberts and Steven C.
Roberts were appointed to our board of directors upon completion of the Roberts
Wireless acquisition.
In connection with the acquisition of Roberts Wireless, we entered into a
number of arrangements with Messrs. Michael V. Roberts and Steven C. Roberts
and certain companies affiliated with them as described in more detail below.
o JOINT VENTURE DEVELOPMENT AGREEMENT. On October 30, 2000, the
Company and Messrs. Michael V. Roberts and Steven C. Roberts
entered into a joint venture development agreement. Pursuant to the
agreement, if either Mr. Michael V. Roberts or Mr. Steven C.
Roberts (each a "Project Member") undertakes an international
telecommunications business venture (a "Project") and desires for
the Company to be involved in that Project, then before the Project
Member enters into a letter of intent or binding agreement of any
nature with another person regarding the Project, written notice
must be given to the Company and the Company has 60 days to notify
the Project Member of its desire to participate in the Project.
During such 60 day period, the Company has the exclusive right to
elect to participate in the Project. Promptly after the Company
gives a notice of participation, the Company and the Project Member
shall form a project entity and shall execute an agreement setting
forth the terms, covenants, conditions and provisions for the
purpose, ownership, management, financing and operating of the
Project. Unless the Project Member and the Company agree to a
different arrangement, the Company will have a 50% interest in each
project entity and the Company will have full managerial control of
each project entity. Except as described above, neither the Project
Members nor the Company is obligated to bring to the other any
opportunity to participate in a Project or any activity, domestic
or international.
o CONSULTING AGREEMENTS. On January 29, 2001, the Company entered
into five-year consulting agreements with each of Messrs. Michael
V. Roberts and Steven C. Roberts. The consulting agreements provide
each of them with an annual compensation of $125,000, which is paid
monthly.
o RIGHT OF FIRST NEGOTIATION AGREEMENT. On February 14, 2001, the
Company and Roberts Tower entered into a right of first negotiation
agreement which grants Roberts Tower a right to negotiate tower
leases on a "build-to-suit" basis within the Company's present and
future territory. During the term of the agreement, whenever the
Company or one of its subsidiaries is required to "build to suit"
communications towers within the present or future territories in
which it operates, the Company must notify Roberts Tower and
Roberts Tower will have the exclusive right for a period of 30 days
to negotiate with the Company to provide such towers. After such 30
day period, if the Company has not reached an agreement with
Roberts Tower, the Company may obtain such tower sites from other
third parties. The term of this agreement is five years.
o RESALE AGREEMENT. On February 14, 2001, the Company and Messrs.
Michael V. Roberts and Steven C. Roberts entered into a resale
agreement which permits Messrs. Michael V. Roberts and Steven C.
Roberts to buy air time at a discount for resale on a basis no less
favorable than any other similar agreement to which the Company may
be a party. Messrs.
25
Michael V. Roberts and Steven C. Roberts may resell such airtime
anywhere where such resales are permitted under applicable law.
Any arrangement between the Company and Messrs. Michael V.
Roberts and Steven C. Roberts for resales and use of air time
will be subject to all required approvals of Sprint, Sprint
Spectrum and Sprint PCS and/or any other applicable Sprint
entities.
o MASTER LEASE AGREEMENT. On February 14, 2001, Roberts Wireless and
Roberts Tower entered into a master lease agreement which provides
for the lease from Roberts Tower by Roberts Wireless of certain
buildings, towers, tanks and/or improvements thereon for the
purpose of installing, operating and maintaining communications
facilities and services thereon. The initial term of the master
lease agreement expires in February 2006, and Roberts Wireless has
the right to extend the initial term of the lease for four
additional terms of five years each. The agreement provides for
monthly payments aggregating to approximately $16,800 per site per
year, subject to an annual adjustment of 4% per annum. Roberts
subsequently assigned all of its right, title and interest in the
master lease agreement to its wholly owned subsidiary, Alamosa
Missouri Properties, LLC (formerly Roberts Wireless Properties,
L.L.C). During the years ended December 31, 2002 and 2001,
approximately $2,688,000 and $2,264,000 respectively, in rental
expense was recorded under this agreement.
o OTHER PAYMENTS. In addition to the specific agreements discussed
above, we paid approximately $346,000 and $361,000 in 2002 and
2001, respectively, to Roberts Tower for other items including the
lease of retail space and switching facility space.
OTHER RELATED PARTY TRANSACTIONS
In connection with the Company's distribution and sales of Sprint PCS
wireless communications equipment, on December 28, 1998, the Company entered
into a long-term agreement to lease space for a retail store in Lubbock, Texas
with Lubbock HLH, Ltd., principally owned by Mr. Hart, who is one of the
Company's directors and the general manager of SPACE, one of the Company's
stockholders. This lease has a term of 15 years and provides for monthly
payments aggregating to approximately $110,000 a year, subject to adjustment
based on the Consumer Price Index on the first day of the sixth lease year and
on the first day of the eleventh lease year. During fiscal year 2002,
approximately $110,000 was paid under this lease. In addition to rental, we
paid approximately $20,000 to Lubbock HLH for taxes and other expenses related
to the leased property.
We entered into a telecommunications service agreement with Tech Telephone
Company Limited Partnership ("TechTel") to install and provide
telecommunications lines between Sprint PCS and our Lubbock-based operations
and between our Lubbock-based operations and other markets. TechTel is a
limited partnership whose general partner is an entity controlled by Mr.
Sharbutt, our President and CEO. The original term of the agreement is three
years, but the agreement automatically renews upon expiration for additional
successive 30-day terms by either party. We have also entered into a
distribution agreement with TechTel, authorizing it to become a third party
distributor of Sprint PCS products and services for us in Lubbock, Texas. The
total amount paid for these contracts was approximately $1,157,000, $1,315,000
and $1,707,000 during the years ended December 31, 2002, 2001 and 2000,
respectively. TechTel was sold to an unrelated third party in October 2002.
Mr. Otto was an investment banker at Citigroup, which received
professional fees from us for our IPO, high-yield debt offerings and merger and
acquisition activities, and which maintains lending and investment banking
relationships with us.
26
EQUITY COMPENSATION PLAN INFORMATION
The following table presents information about our equity compensation
plans as of December 31, 2002:
NUMBER OF SECURITIES NUMBER OF SECURITIES
TO BE ISSUED UPON WEIGHTED-AVERAGE REMAINING AVAILABLE
EXERCISE OF EXERCISE PRICE OF FOR FUTURE ISSUANCE
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, UNDER EQUITY
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS COMPENSATION PLANS
------------- -------------------- -------------------- --------------------
Equity compensation plans approved by
security holders:
Amended and Restated 1999 Long-Term
Incentive Plan (1) 7,868,495 $11.12 6,176,559
Amended and Restated Employee Stock
Purchase Plan (2) -- N/A (3) 174,103 (4)
Equity compensation plans not approved
by security holders -- -- --
--------- ------ ---------
Total 7,868,495 $11.12 6,350,662
========= ====== =========
----------
(1) The Amended and Restated Long-Term Incentive Plan provides for an
automatic increase of up to 800,000 in the number of shares reserved for
issuance under the plan on the last day of each calendar year during the
term of the plan. The automatic increase was approved by stockholders in
2001 and continues during the term of the plan.
(2) The Amended and Restated Employee Stock Purchase Plan provides for an
automatic increase of up to 200,000 in the number of shares reserved for
issuance under the plan on the first day of each calendar year during the
term of the plan.
(3) The exercise price of options granted under the Amended and Restated
Employee Stock Purchase Plan is the lesser of 85% of the stock price at
the start or end of the applicable offering period under the plan.
(4) On February 28, 2003, the most recent purchase date under the Amended and
Restated Employee Stock Purchase Plan, the remaining 174,103 shares were
purchased at a per share price of $0.34.
AUDIT COMMITTEE REPORT
The current members of the Audit Committee are Messrs. Clapp, McInnes and
White.
The Audit Committee has reviewed and discussed our audited financial
statements for the fiscal year ended December 31, 2002 with management and has
received the written disclosures and the letter from PricewaterhouseCoopers
LLP, our independent auditors, required by Independent Standards Board Standard
No. 1 (Independent Discussions with Audit Committees). The Audit Committee has
also discussed with PricewaterhouseCoopers LLP our audited financial statements
for the fiscal year ended December 31, 2002, including among other things the
quality of our accounting principles, the methodologies and accounting
principles applied to significant transactions, the underlying processes and
estimates used by management in its financial statements and the basis for the
auditor's conclusions regarding the reasonableness of those estimates, and the
auditor's independence, as well as the other matters required by Statement on
Auditing Standards No. 61 of the Auditing Standards Board of the American
Institute of Certified Public Accountants.
Based on these discussions with PricewaterhouseCoopers LLP and the results
of the audit of our financial statements, the Audit Committee members
recommended unanimously to our board of directors that the audited financial
statements be included in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2002, for filing with the Securities and Exchange
Commission.
THE AUDIT COMMITTEE:
Ray M. Clapp, Jr. Allen T. McInnes
Jimmy R. White
27
SUBMISSION OF STOCKHOLDER PROPOSALS FOR 2004
Stockholder proposals intended for inclusion in the next year's proxy
statement pursuant to Rule 14a-8 under the Exchange Act must be directed to the
Corporate Secretary, Alamosa Holdings, Inc., at 5225 S. Loop 289, Lubbock,
Texas 79424, and must be received by December 24, 2003. Our Bylaws require that
proposals of stockholders made outside of Rule 14a-8 under the Exchange Act
must be submitted, in accordance with the requirements of the Bylaws, not later
than March 15, 2004 and not earlier than February 14, 2004.
ANNUAL REPORT ON FORM 10-K
A copy of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2002 is being mailed concurrently with this proxy statement to all
stockholders entitled to notice of and to vote at the annual meeting. Our
Annual Report on Form 10-K is not incorporated into this proxy statement and
shall not be deemed to be solicitation material. Alamosa hereby undertakes to
provide to any recipient of this proxy statement, upon his or her request and
payment of a fee of $0.25 per page to reimburse Alamosa for its expenses in
connection therewith, a copy of any of the exhibits to our Annual Report on
Form 10-K. Requests for such copies should be directed in writing to Jon D.
Drake, Director of Investor Relations, Alamosa Holdings, Inc., 5225 S. Loop
289, Suite 119, Lubbock, Texas 79424.
OTHER MATTERS
Our board of directors knows of no other matters to be presented at the
meeting. If any other matters come before the meeting, it is the intention of
the proxy holders to vote on such matters in accordance with their best
judgment.
---------------------
By Order of the Board of Directors,
/s/ Kendall W. Cowan
Kendall W. Cowan
Chief Financial Officer and Secretary
April 22, 2003
Lubbock, Texas
28
AMENDED AND RESTATED
ALAMOSA HOLDINGS, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The Alamosa Holdings, Inc. Employee Stock Purchase Plan was
established for the benefit of employees of Alamosa Holdings, Inc., a Delaware
corporation (the "Company"), and its Designated Subsidiaries. The Alamosa
Holdings, Inc. Employee Stock Purchase Plan was amended and restated effective
(the "Plan"). The Plan is intended to provide the employees of an
Employer with an opportunity to purchase common shares, par value $.01, of the
Company (the "Shares"). It is the intention of the Company that the Plan qualify
as an "employee stock purchase plan" within the meaning of Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"), and the provisions of
the Plan shall be construed in a manner consistent with the requirements of such
Section of the Code.
2. Definitions.
a. "Board" shall mean the Board of Directors of the Company.
b. "Change in Capitalization" shall mean any increase, reduction, or
change or exchange of Shares for a different number or kind of shares or other
securities of the Company by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, share dividend, share split or reverse
share split, combination or exchange of shares, repurchase of Shares, change in
corporate structure or otherwise.
c. "Change of Control" means any of the following: (i) Continuing
Directors cease to constitute at least fifty percent (50%) of the members of the
Board; (ii) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; (iii) any consolidation, merger or
share exchange of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which Company Shares would be converted
into cash, securities or other property; or (iv) any sale, lease, exchange or
other transfer (excluding transfer by way of pledge or hypothecation) in one
transaction or a series of related transactions, of all or substantially all of
the assets of the Company; provided, however, that a transaction described in
clause (iii) or (iv) shall not constitute a Change in Control hereunder if after
such transaction (I) Continuing Directors constitute at least fifty percent
(50%) of the members of the Board of Directors of the continuing, surviving or
acquiring entity, as the case may be or, if such entity has a parent entity
directly or indirectly holding at least a majority of the
voting power of the voting securities of the continuing, surviving or acquiring
entity, Continuing Directors constitute at least fifty percent (50%) of the
members of the Board of Directors of the entity that is the ultimate parent of
the continuing, surviving or acquiring entity, and (II) the continuing,
surviving or acquiring entity (or the ultimate parent of such continuing,
surviving or acquiring entity) assumes all outstanding Stock Options under this
Plan; provided, further, that a transaction described in clause (iv) shall not
constitute a Change in Control hereunder if such transaction occurs upon or as a
result of a default by the Company or any of its affiliates under (a) any credit
agreement or related agreement among the Company or any of its affiliates or
successors and Nortel Networks Inc. or any other lender, whether or not such
credit agreement or related agreement exists on the date of this Plan, or (b)
any management agreement or related agreement among the Company any or any of
its affiliates or successors and Sprint Spectrum, LP, SprintCom, Inc.,
WirelessCo, LP, Sprint Communications Company, LP or any of their affiliates or
successors, whether or not such management agreement or related agreement exists
on the date of this Plan. "Continuing Directors" means Board members who (x) at
the date of this Plan were directors or (y) become directors after the date of
this Plan and whose election or nomination for election by the Company's
stockholders was approved by a vote of a majority of the directors then in
office who were directors at the date of this Plan or whose election or
nomination for election was previously so approved.
d. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
e. "Committee" shall mean the Compensation Committee or any other
committee of members of the Board appointed by the Board to administer the Plan
and to perform the functions set forth herein.
f. "Company" shall mean Alamosa Holdings, Inc., a corporation organized
under the laws of the State of Delaware, or any successor corporation.
g. "Compensation" shall mean any earnings reportable as W-2 wages for
Federal income tax withholding purposes and any elective contributions made by
the Participant's Employer on the Participant's behalf to the Alamosa PCS
Contributions Savings Plan (or any successor plan thereto).
h. "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of
2
absence agreed to in writing by the Employee's Employer, if such leave is for a
continuous period of not more than one year or re-employment upon the expiration
of such leave is guaranteed by contract or statute.
i. "Designated Subsidiaries" shall mean the subsidiaries of the Company
which have been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan, which may include corporations which
become subsidiaries of the Company after the adoption of the Plan.
j. "Employee" shall mean any person, including an officer, who as of an
Offering Date has been regularly employed on a full-time basis by the Company, a
wholly owned Subsidiary of the Company or a Designated Subsidiary of the Company
for at least six months; provided, however, that an Employee shall not include
any individual whose customary period of employment is for five months or less
in any calendar year.
k. "Employer" shall mean, as to any particular Employee, the corporation
which employs such Employee, whether it is the Company, a wholly owned
Subsidiary of the Company or a Designated Subsidiary of the Company.
l. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
m. "Exercise Date" shall mean the last business day of each Purchase
Period, except as the Committee may otherwise provide.
n. "Fair Market Value" per Share as of a particular date shall mean (i)
the closing sales price per Share on such date, as reported by the Composite
Transactions reporting system or if not so reported, as reported by the New York
Stock Exchange or (ii) in the event the Shares are not traded on such date, the
closing price per Share, as so reported in the immediately preceding date on
which trading occurred, or if not so reported, as reported by any national
securities exchange on which the Shares are listed.
o. "Offering Date" shall mean the first Trading Day of each Offering
Period of the Plan. The Offering Date of an Offering Period is the grant date
for the options offered in such Offering Period.
p. "Offering Period" shall mean a period as described in Section 4
hereof.
3
q. "Parent" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of
granting an option, each of the corporations other than the Company owns shares
possessing 50% or more of the total combined voting power of all classes of
shares in one of the other corporations in such chain.
r. "Participant" shall mean an Employee who participates in the Plan.
s. "Plan" shall mean the Alamosa Holdings, Inc. Employee Stock Purchase
Plan, as amended from time to time.
t. "Plan Year" shall mean the calendar year.
u. "Purchase Period" shall mean each approximately six-month period,
within an Offering Period, commencing on the Trading Day next following the last
previous Exercise Date in such Offering Period and ending with the next Exercise
Date in such Offering Period, except that the first Purchase Period of any
Offering Period shall commence on the first Trading Day of such Offering Period
and end with the next Exercise Date. The first Purchase Period of the first
Offering Period under the Plan shall commence on April 2, 2001 and shall end on
August 31, 2001.
v. "Shares" shall mean shares of the common stock, par value $.01 per
share, of the Company.
w. "Subsidiary" shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
granting an option, each of the corporations other than the last corporation in
the unbroken chain owns shares possessing fifty percent (50%) or more of the
total combined voting power of all classes of shares in one of the other
corporations in such chain.
x. "Trading Day" shall mean a day on which national stock exchanges and
the NASDAQ system are open for trading.
y. "Year of Service" shall mean each successive period of twelve
consecutive months (from an Employee's original employment date) during which
the Employee's hours of employment are 1,000 hours or more.
4
3. Eligibility.
a. Subject to the requirements of Section 3.b. hereof, any person who is
an Employee as of an Offering Date shall be eligible to participate in the Plan
and be granted an option for the Offering Period commencing on such Offering
Date.
b. Notwithstanding any provisions of the Plan to the contrary, no
Employee shall be granted an option under the Plan if, immediately after the
grant, (i) such Employee (or any other person whose shares would be attributed
to such Employee pursuant to Section 424(d) of the Code) would own shares and/or
hold outstanding options to purchase shares possessing five percent (5%) or more
of the total combined voting power or value of all classes of shares of the
Company or of any Subsidiary or Parent of the Company, or (ii) such Employee's
right to purchase shares under all employee stock purchase plans (as described
in Section 423 of the Code) of the Company and any Subsidiary or Parent of the
Company would accrue at a rate which exceeds twenty-five thousand dollars
($25,000) of Fair Market Value of such shares (determined at the time such
option is granted) for any calendar year in which such option would be
outstanding at any time. Any amounts received from an Employee which cannot be
used to purchase Shares as a result of this limitation will be returned as soon
as possible to the Employee without interest.
4. Offering Periods. The Plan shall be implemented by a series of
consecutive, overlapping Offering Periods. The first such Offering Period shall
commence on the first Trading Day on or following April 1, 2001 and end on the
last Trading Day on or before February 28, 2003. Unless otherwise determined by
the Committee, each subsequent Offering Period shall have a duration of two
years, commencing on the first Trading Day on or after March 1 and September 1
of each year. The Plan shall continue until terminated in accordance with
Section 19 hereof. Subject to Section 19 hereof, the Committee shall have the
power to change the duration and/or the frequency of Offering Periods and/or
Purchase Periods with respect to future offerings and shall use its best efforts
to notify Employees of any such change at least 15 days prior to the scheduled
beginning of the first Offering Period to be affected. In no event shall any
option granted hereunder be exercisable more than 27 months from its date of
grant.
To the extent permitted by any applicable laws, regulations, or stock
exchange rules, if the Fair Market Value of the Shares on any Exercise Date in
an Offering Period is lower than the Fair Market Value of the Shares on the
Offering Date of such Offering Period, then all Participants in such Offering
Period shall be automatically withdrawn from such Offering Period immediately
after the exercise
5
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period as of the first day thereof.
5. Grant of Option; Participation; Price.
a. On each Offering Date the Company shall commence an offering by
granting each eligible Employee an option to purchase Shares, subject to the
limitations set forth in Sections 3b and 11 hereof. Each option so granted shall
be exercisable for the number of Shares described in Section 8 hereof and shall
be exercisable only on the Exercise Date.
b. Each eligible Employee may elect to become a Participant in the Plan
with respect to an Offering Period by filing a subscription agreement with his
or her Employer authorizing payroll deductions in accordance with Section 6
hereof and filing it with the Company or the Employer in accordance with the
form's instructions at least ten business days prior to the applicable Offering
Date, unless a later time for filing the subscription agreement is set by the
Committee for all Employees with respect to a given offering. Such authorization
will remain in effect for subsequent Offering Periods, until modified or
terminated by the Participant by giving written notice to his or her Employer
prior to the next occurring Exercise Date. Additionally, a Participant may
participate to a greater extent by authorizing reinvestment of dividends on the
Shares held in his or her account (by giving written notice to the Company) or,
if authorized by the Committee for all Participants, by making cash payments to
be credited to his or her account under the Plan in accordance with Section 6
hereof.
c. The option price per Share subject to an offering shall be 85% of the
Fair Market Value of a Share on (i) the Offering Date or (ii) the Exercise Date,
whichever is lower.
6
6. Payroll Deductions and Cash Payments
a. Subject to Section 5b hereof, a Participant may, in accordance
with rules and procedures adopted by the Committee, authorize a payroll
deduction of any whole percentage from one percent to ten percent of such
Participant's Compensation each pay period (the permissible range within such
percentages to be determined by the Committee from time to time). A Participant
may increase or decrease such payroll deduction (including a cessation of
payroll deductions) at any time but not more frequently than once each Purchase
Period, by filing a new authorization form with his or her Employer. All payroll
deductions made by a Participant shall be credited to such Participant's account
under the Plan.
b. Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3b hereof, a Participant's
payroll deductions may be decreased to 0% at any time during a Purchase Period.
Payroll deductions shall recommence at the rate provided in such Participant's
subscription agreement as in effect at the beginning of the first Purchase
Period scheduled to end in the following calendar year.
c. A Participant may withdraw from the Plan as provided in Section 9,
which will terminate his or her payroll deductions for the Purchase Period in
which such withdrawal occurs. A Participant may increase or decrease the rate
(0-10%) of his or her payroll deductions during an Offering Period by completing
and filing with the Employer a new subscription agreement authorizing a change
in payroll deduction rate. The Committee may, in its discretion, limit the
number of rate changes by a Participant during an Offering Period. A change in
rate shall be effective as of the next payroll period following the date of
filing of the new subscription agreement.
7. Exercise of Option.
a. Unless a Participant withdraws from the Plan as provided in Section 9
hereof, or unless the Committee otherwise provides, such Participant's election
to purchase Shares shall be exercised automatically on the Exercise Date, and
the maximum number of Shares (excluding any fractional Share) subject to such
option will be purchased for such Participant at the applicable option price
with (i) the accumulated payroll deductions, (ii) cash dividends paid on Shares
which have been credited to the Participant's account under the Plan pursuant to
Section 10
7
hereof, and (iii) any additional cash payments made by the Participant and
credited to the Participant's account under the Plan in accordance with Section
6 hereof.
b. Any cash balance remaining in a Participant's account after an
Exercise Date will be carried forward to the Participant's account for the
purchase of Shares on the next Exercise Date if the Participant has elected to
continue to participate in the Plan. Otherwise the Participant will receive a
cash payment equal to the cash balance of his or her account.
c. The Shares purchased upon exercise of an option hereunder shall be
credited to the Participant's account under the Plan as of the Exercise Date and
shall be deemed to be transferred to the Participant on such date (except that
no Shares purchased during the first Offering Period hereunder shall be credited
to the Participant's account until payment of the aggregate option price has
been completed within the Offering Period). Except as otherwise provided herein,
the Participant shall have all rights of a shareholder with respect to such
Shares upon their being credited to the Participant's account.
8. Delivery of Shares.
a. As promptly as practicable after receipt by the Company of a written
request for withdrawal of Shares from any Participant, the Company shall arrange
the delivery to such Participant of a share certificate representing the Shares
in the Participant's account which the Participant requests to withdraw. Subject
to Section 8b hereof, withdrawals may be made no more frequently than once each
Offering Period. Shares received upon share dividends or share splits shall be
treated as having been purchased on the Exercise Date of the Shares to which
they relate.
b. Notwithstanding anything in Section 8a hereof to the contrary, Shares
may be withdrawn by a Participant more than once during an Offering Period under
the following circumstances: (i) within 60 days following a Change in Control of
the Company or (ii) upon the approval of the Committee, in its sole discretion.
9. Withdrawal; Termination of Employment.
a. A Participant may withdraw at any time all, but not less than all,
cash amounts in his or her account under the Plan that have not been used to
purchase Shares (including, without limitation, the payroll deductions, cash
dividends and cash payments credited to such Participant's account) by giving
8
written notice to the Company prior to the next occurring Exercise Date. All
such payroll deductions, cash dividends and cash payments credited to such
Participant's account shall be paid to such Participant promptly after receipt
of such Participant's notice of withdrawal and such Participant's option for the
Offering Period in which the withdrawal occurs shall be automatically
terminated. No further payroll deductions for the purchase of Shares will be
made for such Participant during such Offering Period, and any additional cash
dividends during the Offering Period shall be distributed to the Participant.
b. Upon termination of a Participant's Continuous Status as an Employee
during the Offering Period for any reason, including voluntary termination,
retirement or death, the payroll deductions, cash dividends and cash payments
credited to such Participant's account that have not been used to purchase
Shares (and, as to the first Offering Period, any such amounts credited to the
account for partial payment for Shares as to which payment has not been
completed) shall be returned (and any future cash dividends shall be
distributed) to such Participant or, in the case of such Participant's death, to
the person or persons entitled thereto under Section 13 hereof, and such
Participant's option will be automatically terminated.
c. A Participant's withdrawal from an Offering Period will not have any
effect upon such Participant's eligibility to participate in a succeeding
Offering Period or in any similar plan which may hereafter be adopted by the
Company.
10. Dividends and Interest.
a. Cash dividends paid on Shares held in a Participant's account shall
be credited to such Participant's account and used in addition to payroll
deductions (and cash contributions, if any) to purchase Shares on the Exercise
Date. Dividends paid in Shares or share splits of the Shares shall be credited
to the accounts of Participants. Dividends paid in property other than cash or
Shares shall be distributed to Participants as soon as practicable.
b. No interest shall accrue on or be payable with respect to any cash
amount credited to a Participant under the Plan.
11. Shares.
a. Subject to adjustment as provided in Section 17 hereof, the maximum
number of Shares which shall be reserved for sale under the Plan shall be
3,500,000 Shares, plus an annual increase to be added on the first day of the
Company's fiscal year beginning in 2004 equal to the lesser of (i) 200,000
Shares or (ii) such lesser amount determined by the Committee. Such Shares shall
be either authorized and unissued Shares or Shares which have been reacquired by
the Company. If the total number of Shares which would otherwise be subject to
options granted pursuant to Section 5a hereof on an Offering Date exceeds the
number of Shares then available under the Plan (after deduction of all Shares
for which options have been exercised or are then outstanding), the Committee
shall make a pro rata allocation of the Shares remaining available for option
grant in as uniform a manner as shall be practicable and as it shall determine
to be equitable. In such event, the Committee shall give written notice to each
Participant of such reduction of the number of option Shares affected thereby
and shall similarly reduce the rate of payroll deductions, if necessary.
b. Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant or, at the election of the
9
Participant, in the name of the Participant and another person as joint tenants
with rights of survivorship.
12. Administration. The Plan shall be administered by the Committee, and the
Committee may select administrator(s) to whom its duties and responsibilities
hereunder may be delegated. The Committee shall have full power and authority,
subject to the provisions of the Plan, to promulgate such rules and regulations
as it deems necessary for the proper administration of the Plan, to interpret
the provisions and supervise the administration of the Plan, and to take all
action in connection therewith or in relation thereto as it deems necessary or
advisable. Any decision reduced to writing and signed by a majority of the
members of the Committee shall be fully effective as if it had been made at a
meeting duly held. Except as otherwise provided by the Committee, each Employer
shall be charged with all expenses incurred in the administration of the Plan
with respect to such Employer's Employees. No member of the Committee shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to the Plan, and all members of the Committee shall be fully
indemnified by the Company with respect to any such action, determination or
interpretation. All decisions, determinations and interpretations of the
Committee shall be final and binding on all persons, including the Company, the
Participant (or any person claiming any rights under the Plan from or through
any Participant) and any shareholder.
13. Designation of Beneficiary.
10
a. A Participant may file with the Company, on forms supplied by the
Company, a written designation of a beneficiary who is to receive any Shares and
cash remaining in such Participant's account under the Plan in the event of the
Participant's death.
b. Such designation of beneficiary may be changed by the Participant at
any time by written notice to the Company, on forms supplied by the Company. In
the event of the death of a Participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
Participant's death, the Company shall deliver such Shares and/or cash to the
executor or administrator of the estate of the Participant or, if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such Shares and/or cash to the
spouse or to any one or more dependents or relatives of the Participant in
accordance with the applicable laws of descent and distribution, or if no
spouse, dependent or relative is known to the Company, then to such other person
as the Company may designate.
14. Transferability. Neither payroll deductions, dividends, dividend
reinvestments or cash payments credited to a Participant's account nor any
rights with regard to the exercise of an option or to receive Shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way
by the Participant (other than by will, the laws of descent and distribution or
as provided in Section 13 hereof). Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with Section 9
hereof.
15. Use of Funds. All payroll deductions, dividends, reinvested dividends
and additional cash payments received or held by the Company under the Plan may
be used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such funds.
16. Reports. Individual accounts will be maintained for each Participant in
the Plan. Statements of account will be given to Participants as soon as
practicable following each Offering Period, which statements will set forth the
amounts of payroll deductions, dividends, dividend reinvestments and additional
cash payments, the per Share purchase price, the number of Shares purchased, the
aggregate Shares in the Participant's account and the remaining cash balance, if
any.
17. Effect of Certain Changes. In the event of a Change in Capitalization or
the distribution of an extraordinary dividend, the Committee shall conclusively
determine the appropriate equitable adjustments, if any, to be made
11
under the Plan, including without limitation adjustments to the number of Shares
which have been authorized for issuance under the Plan but have not yet been
placed under option, as well as the price per Share covered by each option under
the Plan which has not yet been exercised. In the event of a Change in Control
of the Company, Offering Periods shall terminate unless otherwise provided by
the Committee.
18. Term of Plan. Subject to the Board's right to discontinue the Plan (and
thereby end its Term) pursuant to Section 19 hereof, the Term of the Plan (and
its last Offering Period) shall end on the tenth anniversary of the commencement
of the first Offering Period. Upon any discontinuance of the Plan, unless the
Committee shall determine otherwise, any assets remaining in the Participants'
accounts under the Plan shall be delivered to the respective Participant (or the
Participant's legal representative) as soon as practicable.
19. Amendment to and Discontinuance of Plan. The Board may at any time
amend, suspend or discontinue the Plan. Except as provided in Section 17 hereof,
no such suspension or discontinuance may adversely affect options previously
granted and no amendment may make any change in any option theretofore granted
which adversely affects the rights of any Participant which accrued prior to the
date of effectiveness of such amendment without the consent of such Participant.
No amendment shall be effective unless it receives the requisite approval of the
shareholders of the Company if such shareholder approval of such amendment is
required to comply with Rule 16b-3 under the Exchange Act or Section 423 of the
Code or to comply with any other applicable law, regulation or stock exchange
rule.
20. Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
21. Regulations and Other Approvals; Governing Law.
a. This Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of Delaware
without giving effect to the choice of law principles thereof, except to the
extent that such law is preempted by federal law.
b. The obligation of the Company to sell or deliver Shares with respect
to options granted under the Plan shall be subject to all applicable laws,
12
rules and regulations, including all applicable federal and state securities
laws, and the obtaining of all such approvals by governmental agencies as may be
deemed necessary or appropriate by the Committee.
c. To the extent applicable hereto, the Plan is intended to comply with
Rule 16b-3 under the Exchange Act, and the Committee shall interpret and
administer the provisions of the Plan in a manner consistent therewith. Any
provisions inconsistent with such Rule shall be inoperative and shall not affect
the validity of the Plan.
22. Withholding of Taxes. If the Participant makes a disposition, within the
meaning of Section 424(c) of the Code and regulations promulgated thereunder, of
any Share or Shares issued to such Participant pursuant to such Participant's
exercise of an option, and such disposition occurs within the two-year period
commencing on the day after the Offering Date or within the one-year period
commencing on the day after the Exercise Date, such Participant shall, within
ten (10) days of such disposition, notify the Company thereof and thereafter
immediately deliver to the Company any amount of Federal, state or local income
taxes and other amounts which the Company informs the Participant the Company is
required to withhold.
23. Effective Date. The Plan shall be effective as of April 1, 2001, subject
to the approval of the Plan by the shareholders of the Company within 12 months
before or after the date the Plan is adopted.
13
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, THIS
PROXY WILL BE VOTED "FOR" EACH OF PROPOSALS 1, 2 AND 3 AND IN THE DISCRETION OF
THE PROXIES ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW.
1. Election of directors.
01 Scotty Hart
02 Dr. Allen T. McInnes
03 Michael V. Roberts
04 David E. Sharbutt
FOR all WITHHOLD
nominees listed AUTHORITY
(except as indicated)* for all nominees listed
|_| |_|
* INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE THROUGH THAT INDIVIDUAL'S NAME.
2. Approval of an amendment to our Amended and Restated Employee Stock
Purchase Plan to authorize for issuance an additional 2,500,000 shares of
common stock.
FOR AGAINST ABSTAIN
|_| |_| |_|
3. Ratification of the selection of PricewaterhouseCoopers LLP as our
independent accountants for the 2003 fiscal year.
FOR AGAINST ABSTAIN
|_| |_| |_|
4. The proxies are authorized to vote in their discretion upon all such other
matters as may properly come before the Annual Meeting.
The undersigned hereby acknowledges receipt of the Company's Annual Report for
the fiscal year ended December 31, 2002 and the accompanying Notice of Annual
Meeting and Proxy Statement and hereby revokes any proxy or proxies heretofore
given with respect to the matters set forth above.
Dated:____________________________________________________________________, 2003
________________________________________________________________________________
Signature
________________________________________________________________________________
Signature if held jointly
Please sign exactly as your name appears on this Proxy. If shares are registered
in more than one name, the signatures of all such persons are required. A
corporation should sign in its full corporate name by a duly authorized officer,
stating such officer's title. Trustees, guardians, executors and administrators
should sign in their official capacity giving their full title as such. A
partnership should sign in the partnership name by an authorized person, stating
such person's title and relationship to the partnership.
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^ FOLD AND DETACH HERE ^
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 11PM Eastern Time
the day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
------------------------------------ ------------------------------------ ---------------------
Internet Telephone Mail
http://www.eproxy.com/almo 1-800-435-6710
Use the Internet to vote your proxy. Use any touch-tone telephone to Mark, sign and date
Have your proxy card in hand when vote your proxy. Have your proxy your proxy card
you access the web site. You will be OR card in hand when you call. You will OR and
prompted to enter your control be prompted to enter your control return it in the
number, located in the box below, to number, located in the box below, enclosed postage-paid
create and submit an electronic and then follow the directions envelope.
ballot. given.
------------------------------------ ------------------------------------ ---------------------
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ALAMOSA HOLDINGS, INC.
The undersigned shareholder(s) of Alamosa Holdings, Inc., a Delaware
corporation (the "Company"), hereby appoints Loyd I. Rinehart and Jon D. Drake
and each of them, attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of common stock, par value $.01 per
share, of the Company which the undersigned is entitled to vote at the Annual
Meeting of Shareholders of the Company, to be held at the Lubbock Country Club,
3400 Mesa Road, Lubbock, Texas, on May 29, 2003 and at any and all adjournments,
postponements, continuations or reschedulings thereof (the "Annual Meeting"),
with all the powers the undersigned would possess if personally present at the
Annual Meeting, as directed on the reverse side.
(Continued and to be marked, dated and signed, on the other side)
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^ FOLD AND DETACH HERE ^
You can now access your Alamosa Holdings, Inc. account online.
Access your Alamosa Holdings, Inc. shareholder account online via Investor
ServiceDirect(R) (ISD).
Mellon Investor Services LLC, agent for Alamosa Holdings, Inc., now makes it
easy and convenient to get current information on your shareholder account.
After a simple, and secure process of establishing a Personal Identification
Number (PIN), you are ready to log in and access your account to:
o View account status
o View certificate history
o View book-entry information
o Make address changes
o Obtain a duplicate 1099 tax form
o Establish/change your PIN
Visit us on the web at http://www.melloninvestor.com
and follow the instructions shown on this page.
Step 1: FIRST TIME USERS - Establish a PIN
You must first establish a Personal Identification Number (PIN) online by
following the directions provided in the upper right portion of the web screen
as follows. You will also need your Social Security Number (SSN) or Investor ID
available to establish a PIN.
The confidentiality of your personal information is protected using secure
socket layer (SSL) technology.
o SSN or Investor ID
o PIN
-------------
o Then click on the Establish PIN button
-------------
Please be sure to remember your PIN, or maintain it in a secure place for future
reference.
Step 2: Log in for Account Access
You are now ready to log in. To access your account please enter your:
o SSN or Investor ID
o PIN
------
o Then click on the Submit button
------
If you have more than one account, you will now be asked to select the
appropriate account.
Step 3: Account Status Screen
You are now ready to access your account information. Click on the appropriate
button to view or initiate transactions.
o Certificate History
o Book-Entry Information
o Issue Certificate
o Address Change
o Duplicate 1099
For Technical Assistance Call 1-877-978-7778 between
9am-7pm Monday-Friday Eastern Time