SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________________to______________________
Commission File Number 0-28262
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AERIAL COMMUNICATIONS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 39-1706857
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8410 West Bryn Mawr, Suite 1100, Chicago, Illinois 60631
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (773) 399-4200
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 31, 1997
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Common Shares, $1 par value 31,553,291 Shares
Series A Common Shares, $1 par value 40,000,000 Shares
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AERIAL COMMUNICATIONS, INC.
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2ND QUARTER REPORT ON FORM 10-Q
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INDEX
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Page No.
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Part I. Financial Information
Management's Discussion and Analysis of
Results of Operations and Financial Condition 2-7
Consolidated Statements of Operations -
Three Months and Six Months Ended June 30,
1997 and 1996 8
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1997 and 1996 9
Consolidated Balance Sheets -
June 30, 1997 and December 31, 1996 10
Notes to Consolidated Financial Statements 11-13
Part II. Other Information 14-16
Signatures 17
<PAGE>
PART I. FINANCIAL INFORMATION
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AERIAL COMMUNICATIONS, INC.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
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AND FINANCIAL CONDITION
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RESULTS OF OPERATIONS
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Aerial Communications, Inc. (the "Company" - NASDAQ symbol: AERL), an
82.6%-owned subsidiary of Telephone and Data Systems, Inc. ("TDS"), was formed
to acquire Personal Communications Services ("PCS") licenses from the Federal
Communications Commission ("FCC"), construct PCS networks in its Major Trading
Areas ("MTAs") and offer wireless PCS communications services in these areas.
Since its acquisition of PCS licenses in the FCC broadband Block A and Block B
PCS auction, which concluded in March of 1995, the Company has been devoting its
efforts to recruiting an experienced management team, developing and executing a
business plan, raising capital and designing and constructing a PCS network in
each of its MTAs (Minneapolis, Tampa-St.Petersburg-Orlando, Houston,
Pittsburgh, Kansas City and Columbus).
The Company's focus in 1997 has been the preparation of each of its markets for
initial service launch and the development of its PCS business. The Columbus MTA
launched service on March 27, 1997. The Company's five remaining MTAs launched
service during the second quarter of 1997. Across all six markets, the Company
launched service with approximately 600 cell sites in service. Although cell
site zoning moratoria have been challenging, especially in the Orlando/Orange
County, Florida area, the Company anticipates completion of all phases of its
build-out in 1997 with more than 1,000 cell sites planned to be in service.
The Company is currently capitalizing, as work in process, expenditures for the
design, construction and testing of the Company's PCS networks as well as the
cost to relocate dedicated private microwave links currently operating in the
Company's spectrum. Costs associated with developing information systems are
also capitalized. The Company capitalizes interest on such PCS network and
information system expenditures where appropriate. When the assets are placed in
service, the Company transfers the assets to the appropriate property and
equipment category.
Six Months Ended 6/30/97 Compared to Six Months Ended 6/30/96
Operating Revenues
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Operating revenues totaled $7.1 million for the six months ended June 30, 1997,
reflecting the launch of service in all six markets.
Service revenue primarily consists of charges for access, airtime and
value-added services provided to the Company's retail customers who use the
network operated by the Company, and charges for long-distance calls made on the
Company's systems. Service revenue totaled $1.2 million in the first half of
1997. The Company has acquired 28,000 net new customers since the debut of PCS
service. In late March 1997 the Company began offering PCS service in Columbus,
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Ohio and during the second quarter the Company began offering service in
Houston, Minneapolis, Kansas City, Pittsburgh and Tampa.
Equipment sales revenue was $5.9 million in the first half of 1997. Equipment
revenue represents the sale of handsets and related accessories to retailers,
independent agents, and end user customers. The Company does not manufacture any
of the network equipment, handsets, or accessories used or anticipated to be
used in its operations.
Operating Expenses
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Operating expenses were $80.4 million in the first half of 1997, up $66.9
million from the first half of 1996, reflecting the Company's expanded level of
business activity due to the launch of service across all markets.
System operations expense was $4.0 million in the first half of 1997, reflecting
the costs of operating the Company's network in connection with the launch of
service in all markets. Significant costs include cell site rent and maintenance
expenses, landline interconnection charges and salaries and benefits of
engineering and maintenance employees.
Marketing and selling expense totaled $14.9 million in the first half of 1997,
primarily reflecting the Company's aggressive advertising campaign that
accompanied the launch of service. Marketing and selling expenses primarily
consist of the cost of print, television and radio advertising, salaries and
benefits for sales and marketing personnel and sales commissions.
Customer service expense totaled $1.8 million in the first half of 1997,
reflecting customer service activity at the Company's National Operations Center
in connection with the launch of its six markets.
Cost of equipment sold totaled $15.0 million in the first half of 1997,
reflecting the launch of service in all six markets.
General and administrative expense increased $23.7 million in the first half of
1997 compared to the first half of 1996. The increase is attributable to
expenses associated with the growth of the Company's management and operating
teams required to launch and maintain continuing operations and the resulting
increases in salaries, employee benefits, and overhead expenses. The Company had
1,090 employees at June 30, 1997, compared to approximately 150 employees at
June 30, 1996.
Development costs increased $1.6 million in the first half of 1997 compared to
the first half of 1996. The increase in development costs is primarily due to
increased pre-launch consulting and legal expenses incurred in the development
and implementation of the Company's business and marketing plans.
Other
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Investment losses were $1.1 million in the first half of 1997. Investment losses
represent the Company's 49% share of the 1997 losses of the Wireless Alliance,
LLC., a joint venture associated with the Company's Minneapolis MTA and designed
to extend the PCS footprint to areas that were not in the Company's initial
build-out.
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Interest income-affiliate totaled $95,000 in the first half of 1997 as compared
to $1.8 million in the first half of 1996. Interest income-affiliate represents
interest income earned on the proceeds of the Company's April 1996 Initial
Public Offering ("IPO") invested in the TDS cash management program pending use
in PCS network development and construction. Proceeds from the IPO were fully
utilized by the end of January 1997.
Interest income-other increased $1.9 million in the first half of 1997, due to
interest income earned on the excess proceeds from the Company's November 1996
sale of Series A Zero Coupon Notes pending use in PCS network development and
construction.
Interest expense-affiliate increased $1.3 million in the first half of 1997,
primarily due to the average outstanding balance of borrowings under the
Revolving Credit Agreement (See Note 8 - Revolving Credit Agreement) being
greater in 1997. Interest expense-affiliate in 1997 represents interest on
amounts borrowed under the Revolving Credit Agreement with TDS and the TDS 3%
guarantee fees associated with the Series A Zero Coupon Notes, less interest
capitalized of $2.6 million. The 1996 amount also represents interest on amounts
borrowed under the Revolving Credit Agreement, less interest capitalized of $0.4
million.
Interest expense-other totaled $1.1 million in 1997 and relates to the Series A
Zero Coupon Notes issued in November 1996, less interest capitalized. The
Company capitalized interest expense of $3.0 million related to the Series A
Zero Coupon Notes in 1997.
Income tax expense increased $0.8 million in 1997, primarily due to an increase
in the estimated valuation allowance associated with deferred tax assets
generated by net operating losses.
For federal income tax purposes, the Company is included in the TDS consolidated
tax return. The Company and TDS entered into a tax allocation agreement which
became effective January 1, 1996, pursuant to which the Company calculates its
losses and credits as if it were a separate affiliated group and will carry
forward its losses and credits to reduce future tax liabilities. For financial
reporting purposes, the Company computes its federal income taxes as if it were
not a member of the TDS consolidated group but filed a separate return.
The weighted average Common and Series A Common Shares increased by
approximately 7.8 million due to 12,250,000 Common Shares issued on April 25,
1996, in connection with the Company's IPO.
Three Months Ended 6/30/97 Compared to Three Months Ended 6/30/96
Operating Revenues
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Operating revenues totaled $7.1 million for the three months ended June 30,
1997. Service revenue was $1.2 million and Equipment sales revenue was $5.9
million for the second quarter of 1997, for reasons generally the same as the
first half of 1997.
Operating Expenses
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Operating expenses were $58.8 million in the second quarter of 1997, up $51.0
million over the second quarter of 1996. With the exception of Development
costs, the increase is for reasons generally the same as the first half of 1997.
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Development costs decreased $1.5 million in the second quarter of 1997 compared
to the second quarter of 1996, primarily as a result of the Company ceasing to
be a development stage company with the launch of service in its six markets.
Other
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Investment losses were $0.6 million in the second quarter of 1997, for reasons
generally the same as the first half of 1997.
Interest income-affiliate was $1.5 million in the second quarter of 1996,
representing interest earned on the IPO proceeds invested in TDS's cash
management program. The proceeds were invested pending use in PCS network
development and construction. The IPO proceeds were fully utilized by the end of
January 1997.
Interest income-other increased $0.8 million in the second quarter of 1997, for
reasons generally the same as the first half of 1997.
Interest expense-affiliate increased $1.9 million in the second quarter of 1997,
for reasons generally the same as the first half of 1997. The Company
capitalized interest of $1.9 million related to the Revolving Credit Agreement
and TDS 3% guarantee fees in the second quarter of 1997.
Interest expense-other was $0.7 million in the second quarter of 1997, for
reasons generally the same as the first half of 1997. The Company capitalized
interest of $1.4 million related to the Series A Zero Coupon Notes in the second
quarter of 1997.
Income tax expense increased $0.4 million in the second quarter of 1997, for
reasons generally the same as the first half of 1997.
The weighted average Common and Series A Common Shares increased by
approximately 3.4 million due to 12,250,000 Common Shares issued on April 25,
1996, in connection with the Company's IPO.
LIQUIDITY AND CAPITAL RESOURCES
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The costs of development, construction, start-up and post-launch activities of
the Company will require substantial capital. From inception through June 30,
1997, the Company had expended $304.4 million for its licenses, including
capitalized interest, $487.3 million for all other capital expenditures and
incurred cumulative net losses of $123.7 million. The Company expects to incur
significant operating losses and generate negative cash flow from operating
activities during the next several years as it continues to build its customer
base.
Cash flows used by operating activities were $86.1 million during 1997 compared
to $3.8 million in 1996. Cash used in 1997 resulted from the $77.8 million net
loss for the period and a launch-related increase in handset and accessories
inventory of $9.7 million, offset by $1.4 million in net other activity. Cash
used in 1996 resulted primarily from a net loss of $13.9 million for the period
and a $2.5 million reduction in affiliated accounts payable, offset by an
increase in income tax refund receivable-affiliate of $12.5 million.
Cash flows from financing activities totaled $213.0 million in 1997 compared to
$163.9 million in 1996. Cash provided in 1997 was due primarily to $210.2
million in borrowings under the Revolving Credit Agreement (See Note 8-Revolving
Credit Agreement). In 1996 the Company received from TDS $28.8 million
representing the balance due in connection with TDS's $289.2 million
contribution to the equity capital of the Company in 1995. Also in 1996, the
Company received
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proceeds of $195.3 million from its IPO and used a portion of the proceeds to
repay the then outstanding balance under the Revolving Credit Agreement with
TDS.
Cash flows used in investing activities totaled $158.4 million in 1997 compared
to $23.0 million in 1996. Cash used in 1997 resulted primarily from $157.7
million in additions to property and equipment, primarily launch-related network
and information system assets. Cash requirements in 1996 also consisted
primarily of additions to property and equipment (primarily computer equipment,
office equipment, and leasehold improvements).
While start-up and post-launch activities may be impacted by many factors, the
Company anticipates that the continuing development of its PCS networks and
services will require substantial capital over the next several years. For 1997
the Company estimates that the aggregate funds required for construction
expenditures (including microwave relocation) will total approximately $345
million. The Company plans to have completed all phases of its network build-
out by the end of 1997. The Company estimates requiring $255 million for working
capital requirements to fund operations in 1997.
The Company expects 1997 capital expenditures and expenditures for start-up and
development activities to be financed using a variety of sources, including but
not limited to, additional borrowings under the TDS Revolving Credit Agreement,
vendor financing and minority equity interests in its MTAs.
In March 1996, the Company selected Nokia Telecommunications, Inc. ("Nokia") as
its sole supplier of digital radio channel and switching infrastructure
equipment during the initial build-out of its PCS networks. Nokia has agreed to
provide up to $200 million in financing for the equipment through a Credit
Agreement with the Company dated June 19, 1996 ("Credit Agreement"). At the
Company's option it may issue, in tranches, 10-year unsecured zero coupon
promissory notes in accordance with the provisions of the Credit Agreement, the
proceeds of which are to be paid to Nokia in satisfaction of borrowings by the
Company under the Credit Agreement.
On November 4, 1996, the Company issued $226.2 million in aggregate principal
amount at maturity of Series A Zero Coupon Notes ("Notes") due in 2006. The
issue price of the Notes was $100 million and there is no periodic payment of
interest. The proceeds of the sale of the Notes were paid to Nokia in
satisfaction of all outstanding obligations and future obligations of the
Company up to $100 million under the Credit Agreement. The per annum yield to
maturity on the Notes is 8.34% (computed on a semi-annual bond equivalent
basis). The Notes will rank in the same priority with all other unsecured and
unsubordinated indebtedness of the Company. The Notes and the obligations under
the Credit Agreement are fully and unconditionally guaranteed by TDS at an
annual fee rate of 3%. The Notes are subject to optional redemption by the
Company on and after November 1, 2001, at a purchase price equal to the issue
price plus accrued interest through the date of redemption.
In April 1996, the Company sold 12,250,000 of its Common Shares, approximately
17.2% of total outstanding shares of common stock, at a price of $17 per share
in an initial public offering. The net proceeds from the offering, after
underwriters fees, were $195.3 million. A portion of the net proceeds was
applied to the repayment of the $64.1 million then outstanding indebtedness
(including accrued interest) to TDS under the Revolving Credit Agreement.
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The Company has secured from TDS a $175 million increase in the amount it may
borrow under the Revolving Credit Agreement to $425 million, subject to the
approval of the TDS Board of Directors and the Company's Board of Directors (See
Note 8 - Revolving Credit Agreement). The Company believes that its capital
resources will be sufficient to fund its complete network build-out and cover
operating losses through the end of the year. In addition to the Revolving
Credit Agreement with TDS, other sources of capital may include additional
vendor financing as well as private equity and debt financing by the Company or
its subsidiaries. If sufficient funding is not made available to the Company on
terms and prices acceptable to the Company, the Company would have to reduce its
operating activities, which could have a material adverse impact on the
Company's financial condition and results of future operations.
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 SAFE HARBOR CAUTIONARY
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STATEMENT
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This Form 10-Q contains "forward-looking" statements, as defined in the Private
Securities Litigation Reform Act of 1995, that are based on current
expectations, estimates and projections. Statements that are not historical
facts, including statements about the Company's beliefs and expectations are
forward-looking statements. These statements contain potential risks and
uncertainties and therefore, actual results may differ materially. The Company
undertakes no obligation to update publicly any forward-looking statements
whether as a result of new information, future events or otherwise.
Important factors that may affect these projections or expectations include, but
are not limited to: changes in the overall economy; changes in competition in
the Company's markets; advances in telecommunications technology; changes in the
telecommunications regulatory environment; pending and future litigation;
availability of future financing; and unanticipated changes in growth in PCS
customers, penetration rates, churn rates and the mix of products and services
offered in the Company's markets. Readers should evaluate any statements in
light of these important factors.
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AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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Unaudited
---------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- -------------------
1997 1996 1997 1996
---------- --------- --------- ---------
(Dollars in thousands,
except per share amounts)
OPERATING REVENUES
Service $ 1,182 $ -- $ 1,182 $ --
Equipment sales 5,961 -- 5,961 --
---------- --------- --------- --------
Total Operating Revenues 7,143 -- 7,143 --
OPERATING EXPENSES
System operations 4,042 -- 4,042 --
Marketing and selling 14,890 -- 14,890 --
Customer service 1,750 -- 1,750 --
Cost of equipment sold 14,972 -- 14,972 --
General and administrative 16,553 5,565 33,080 9,357
Depreciation 5,161 -- 5,161 --
Amortization of intangibles 722 -- 722 --
Development costs 686 2,196 5,773 4,150
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Total Operating Expenses 58,776 7,761 80,390 13,507
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OPERATING (LOSS) (51,633) (7,761) (73,247) (13,507)
INVESTMENT AND OTHER INCOME
Investment (losses) (583) -- (1,052) --
Interest income-affiliate -- 1,459 95 1,757
Interest income-other 810 -- 1,932 35
Gain on sale of PCS license -- 189 -- 189
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Total Investment
and Other Income 227 1,648 975 1,981
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(LOSS) BEFORE INTEREST
AND INCOME TAXES (51,406) (6,113) (72,272) (11,526)
INTEREST EXPENSE
Interest expense-affiliate 2,286 364 2,920 1,669
Interest expense-other 696 -- 1,098 --
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Total Interest Expense 2,982 364 4,018 1,669
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(LOSS) BEFORE INCOME TAXES (54,388) (6,477) (76,290) (13,195)
Income tax expense 1,087 729 1,525 682
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NET (LOSS) $ (55,475) $ (7,206) $ (77,815) $(13,877)
========== ========= ========= ========
WEIGHTED AVERAGE COMMON AND
SERIES A COMMON SHARES (000s) 71,499 68,105 71,442 63,596
(LOSS) PER COMMON AND SERIES A
COMMON SHARE $ (0.78) $ (0.11) $ (1.09) $ (0.22)
========== ========= ========= ========
The accompanying notes to consolidated financial statements are an
integral part of these statements.
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AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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Unaudited
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Six Months Ended
June 30,
------------------------
1997 1996
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(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $ (77,815) $ (13,877)
Add (Deduct) adjustments to reconcile net (loss)
to net cash (used) by operating activities:
Depreciation and amortization 5,883 476
Noncash interest expense 4,061 --
Investment losses 1,052 --
Gain on sale of PCS license -- (189)
Change in accounts receivable (5,138) --
Change in inventory (9,743) --
Change in income tax refund receivable-affiliate -- 12,502
Change in accounts payable-affiliates 1,472 (2,538)
Change in accounts payable-other (7,395) 310
Change in deferred tax liability-net 1,526 825
Change in other assets and liabilities (49) (1,310)
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(86,146) (3,801)
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CASH FLOWS FROM FINANCING ACTIVITIES
Change in note receivable-affiliate -- 28,836
Change in note receivable-other 1,925 --
Change in Revolving Credit Agreement-TDS 210,201 (60,238)
Issuance of common stock 914 195,265
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213,040 163,863
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CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (157,702) (23,691)
Proceeds from sale of PCS license -- 350
Change in temporary cash and other investments (654) 305
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(158,356) (23,036)
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NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (31,462) 137,026
CASH AND CASH EQUIVALENTS-
Beginning of period 35,284 261
---------- ----------
End of period $ 3,822 $ 137,287
========== ==========
The accompanying notes to consolidated
financial statements are an integral part
of these statements.
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AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(Unaudited)
June 30, 1997 December 31, 1996
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(Dollars in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents:
General funds $ 3,822 $ 869
Affiliated cash equivalents -- 34,415
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3,822 35,284
Temporary cash investments 532 315
Accounts receivable 5,138 --
Interest receivable-affiliate -- 243
Interest receivable-other 130 508
Note receivable -- 1,925
Inventory 9,743 --
Other 5,603 556
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24,968 38,831
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PROPERTY AND EQUIPMENT
Property and equipment-net of accumulated
depreciation of $8,618 and $1,981,
respectively 445,245 18,592
Work in process 33,397 233,831
Prepaid network infrastructure costs 7,684 70,300
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486,326 322,723
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INVESTMENTS
Investment in PCS licenses-net of accumulated
amortization of $719 in 1997 297,182 304,354
Other 6,166 6,771
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303,348 311,125
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DEFERRED COSTS 180 148
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TOTAL ASSETS $ 814,822 $ 672,827
============ ================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
Affiliates $ 1,961 $ 489
Other 103,443 93,360
Microwave relocation costs payable 12,116 17,046
Contribution payable -- 6,453
Other 4,915 1,978
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122,435 119,326
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REVOLVING CREDIT AGREEMENT-TDS 210,201 --
------------ ----------------
LONG-TERM DEBT 107,804 103,743
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DEFERRED TAX LIABILITY-NET 13,499 11,973
------------ ----------------
COMMON SHAREHOLDERS' EQUITY
Common Shares, par value $1 per share 31,517 31,359
Series A Common Shares,
par value $1 per share 40,000 40,000
Additional paid-in capital 413,055 412,299
Retained deficit (123,689) (45,873)
------------ ----------------
360,883 437,785
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 814,822 $ 672,827
============ ================
The accompanying notes to consolidated financial statements are an
integral part of these statements.
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AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in the financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is
suggested that these consolidated financial statements be read in
conjunction with the consolidated financial statements and the notes
thereto included in the Company's annual report on Form 10-K.
The accompanying unaudited consolidated financial statements contain
all adjustments (consisting of only normal recurring items) necessary
to present fairly the financial position as of June 30, 1997, and
December 31, 1996, the results of operations for the six and three
months ended June 30, 1997 and 1996, and the cash flows for the six
months ended June 30, 1997 and 1996. The results of operations for the
six and three months ended June 30, 1997 and 1996, are not necessarily
indicative of the results to be expected for the full year.
2. Revenue Recognition. Revenues from operations consist of charges to
customers for monthly access, airtime, value-added services and long-
distance charges. Revenues are recognized as the services are rendered.
Unbilled revenues, resulting from PCS services provided from
the billing cycle date to the end of each month, are estimated and
recorded.
Revenues from operations also consist of equipment sales to national
retailers, independent agents, and end user customers. Revenues from
equipment sales are recognized upon the shipment of goods to national
retailers and independent agents and upon delivery to end user
customers.
Net cost of $4.6 million related to initially supplying handsets to the
Company's third party distributors has been deferred and included in
other current assets until customer activation.
3. Depreciation and Amortization. Depreciation is provided based upon the
straight-line method over the estimated useful lives of the respective
assets, generally ten years for network assets and five years for
information system assets and office equipment. Leasehold improvements
are amortized over ten years or the lease term, whichever is shorter.
PCS licenses are amortized straight-line over forty years.
Depreciation of network assets and amortization of the related PCS
license commences the month a market launches service provided the
launch occurs on or before the fifteenth day of that month.
Depreciation and amortization commences in the following month for
those markets that launch after the fifteenth day of the month.
4. Net (Loss) per Common and Series A Common Share for the six months and
the second quarter ended June 30, 1997 and 1996, was computed based on
the weighted average number of Common and Series A Common Shares
outstanding during the period adjusted, as applicable, to give
retroactive effect to the recapitalization in conjunction with the
Company's 1996 initial public offering, as if this transaction had
occurred at January 1, 1996.
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AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings Per Share" in March
1997 which will become effective in December 1997. SFAS No. 128 had no
pro forma effect on earnings per share for the six and three months
ended June 30, 1997 and 1996.
5. Supplemental Cash Flow Information. In the first half of 1997, a net
$12.5 million in additions to work in process were financed through
accounts payable-other and microwave relocation costs payable. An
additional $62.6 million in additions to work in process were financed
through a decrease in prepaid network infrastructure costs.
During the six months ended June 30, 1997, the Company incurred
interest charges totaling $9.6 million. The interest charges were
comprised of $4.0 million relating to the Revolving Credit Agreement
(See Note 8-Revolving Credit Agreement), $1.5 million for TDS guarantee
fees on its Long-term debt (Series A Zero Coupon Notes) and $4.1
million in accrued interest on the Series A Zero Coupon Notes. Of these
amounts, the Company capitalized $5.6 million relating to its work in
process expenditures. The remaining $4.0 million was charged to
expense. The Company converted $1.5 million in accrued TDS guarantee
fees to debt under the Revolving Credit Agreement in 1997.
During the six months ended June 30, 1996, the Company incurred
interest charges of $2.1 million related to the Revolving Credit
Agreement. Of this amount, the Company capitalized $0.4 million
relating to the development of its PCS network. The remaining $1.7
million was charged to expense. The Company also converted $3.0 million
of accrued interest to debt under the Revolving Credit Agreement in
1996.
6. Reclassification. Certain amounts reported in the first six months
and the second quarter of 1996 have been reclassified to conform to the
1997 presentation.
7. Development Stage Company. Effective with the second quarter of 1997,
the Company ceased to be a development stage company and presents its
1997 results of operations, cash flows and financial position in a
manner similar to established operating enterprises within the
industry.
8. Revolving Credit Agreement. The Company entered into a Revolving Credit
Agreement with TDS on August 1, 1995, under which all of the
outstanding obligations of the Company to TDS are incorporated. The
Company has secured from TDS a $175 million increase in the amount
it may borrow under the Revolving Credit Agreement to $425 million,
subject to the approval of the TDS Board of Directors and the Company's
Board of Directors. Pursuant to the Revolving Credit Agreement the
Company may borrow at an interest rate equal to 1.5% above
prime rate until the principal becomes due, and pay on demand an
interest rate equal to 3.5% above such prime rate on any overdue
principal or overdue installment of interest. The advances made under
the Revolving Credit Agreement are unsecured. Interest on the balance
due under the Revolving Credit Agreement is payable quarterly and no
principal is payable until maturity, which is December 31, 1998. The
terms of the Revolving Credit Agreement also include, among others,
restrictions on incurring certain additional indebtedness and on paying
-12-
<PAGE>
AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
dividends. The total amount advanced to the Company under the Revolving
Credit Agreement as of June 30, 1997, was $210.2 million.
9. Commitments. At June 30, 1997, the Company had orders totaling
approximately $47.2 million with Nokia Telecommunications, Inc. and
certain tower vendors for infrastructure equipment as part of the
Company's build-out of its PCS networks.
-13-
<PAGE>
AERIAL COMMUNICATIONS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
--------------------------
Item 4. Submission of Matters to a Vote of Security-Holders.
At the Annual Meeting of Shareholders of Aerial Communications, Inc.,
held on May 12, 1997, the following number of votes were cast for the matters
indicated:
1. Election of one Class I director of the Company by the holders of
Common Shares:
Broker
Nominee For Withhold Non-Vote
------- --- -------- --------
John D. Foster 28,832,097 28,917 -0-
2. Election of three Class I directors of the Company by the holder of
Series A Common Shares:
Broker
Nominee For Withhold Non-Vote
------- --- -------- --------
LeRoy T. Carlson, Jr. 600,000,000 -0- -0-
Rudolph E. Hornacek 600,000,000 -0- -0-
Donald W. Warkentin 600,000,000 -0- -0-
3. Election of one Class II director of the Company by the holders of
Common Shares:
Broker
Nominee For Withhold Non-Vote
------- --- -------- --------
James Barr III 28,831,972 29,042 -0-
4. Election of two Class II directors of the Company by the holder of
Series A Common Shares:
Broker
Nominee For Withhold Non-Vote
------- --- -------- --------
Walter C.D. Carlson 600,000,000 -0- -0-
J. Clarke Smith 600,000,000 -0- -0-
5. Election of one Class III director of the Company by the holders of
Common Shares:
Broker
Nominee For Withhold Non-Vote
------- --- -------- --------
Thomas W. Wilson, Jr 28,832,197 28,917 -0-
6. Election of two Class III directors of the Company by the holder of
Series A Common Shares:
Broker
Nominee For Withhold Non-Vote
------- --- -------- --------
LeRoy T. Carlson 600,000,000 -0- -0-
Murray L. Swanson 600,000,000 -0- -0-
-14-
<PAGE>
Item 4. Submission of Matters to a Vote of Security-Holders (Continued)
7. The proposal to approve the Company's 1996 Employee Stock Purchase
Plan:
Broker
For Against Abstain Non-Vote
--- ------ ------- --------
Series A
Common Shares 600,000,000 -0- -0- -0-
Common Shares 24,817,600 32,751 17,039 3,993,624
-------------- ------ ------ ---------
Total 624,817,600 32,751 17,039 3,993,624
8. The proposal to approve the Company's 1996 Long-term Incentive Plan:
Broker
For Against Abstain Non-Vote
--- ------- ------- ----------
Series A
Common Shares 600,000,000 -0- -0- -0-
Common Shares 24,530,682 305,972 30,735 3,993,624
----------- ------- ------ ---------
Total 624,530,682 305,972 30,735 3,993,624
9. The proposal to approve an amendment to the Restated Certificate of
Incorporation of the Company by the holder of Series A Common Shares:
Broker
For Against Abstain Non-Vote
--- --------- ------- ----------
Series A
Common Shares 600,000,000 -0- -0- -0-
10. The proposal to ratify the selection of Arthur Andersen LLP as the
Company's Independent Public Accountants for the year ended December
31, 1997:
Broker
For Against Abstain Non-Vote
--- ------- ------- --------
Series A
Common Shares 600,000,000 -0- -0- -0-
Common Shares 28,834,232 5,437 21,325 -0-
------------- ----- ------ ---
Total 628,834,232 5,437 21,325 -0-
-15-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 3.1 - Restated Certificate of Incorporation as amended.
Exhibit 3.2 - Restated Bylaws as amended.
Exhibit 11 - Computation of earnings per common share.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K filed during the quarter ended June 30, 1997.
No Reports on Form 8-K were filed during the quarter ended June 30,
1997.
-16-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AERIAL COMMUNICATIONS, INC.
---------------------------
(Registrant)
Date August 8, 1997 /s/ DONALD W. WARKENTIN
-------------------- -------------------------------
Donald W. Warkentin
President
(Chief Executive Officer)
Date August 8, 1997 /s/ J. CLARKE SMITH
--------------------- ----------------------------
J. Clarke Smith
Vice President-Finance and Administration
(Chief Financial Officer)
Date August 8, 1997 /s/ B. SCOTT DAILEY
--------------------- ---------------------------
B. Scott Dailey
Controller
(Principal Accounting Officer)
-17-
<PAGE>
Exhibit 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
AMERICAN PORTABLE TELECOM, INC.
AMERICAN PORTABLE TELECOM, INC., a corporation organized and
existing under the laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is AMERICAN PORTABLE TELECOM,
INC. The original Certificate of Incorporation of the corporation was filed with
the Secretary of State on July 23, 1991. The name of the corporation set forth
in such original Certificate of Incorporation was AMERICAN PORTABLE
TELECOMMUNICATIONS, INC.
2. On January 18, 1996 a Certificate of Amendment was filed
amending the corporation's Certificate of Incorporation to change its name to
AMERICAN PORTABLE TELECOM, INC.
3. This Restated Certificate of Incorporation restates and
integrates and further amends the Certificate of Incorporation of this
corporation by revising such document in its entirety.
4. This text of the Certificate of Incorporation as amended or
supplemented heretofore is further amended hereby to read as herein set forth in
full:
ARTICLE I
---------
The name of the corporation is
AMERICAN PORTABLE TELECOM, INC.
ARTICLE II
----------
The address of its registered office in the State of Delaware
is 1013 Centre Road, in the City of Wilmington, New Castle County, Delaware
19805. The name of its registered agent at such address is Corporation Service
Company.
<PAGE>
ARTICLE III
-----------
The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware; provided, however,
that the corporation, without the written consent of TDS, shall not, directly or
indirectly (through a subsidiary of the corporation or any other person or
otherwise) for its own account or that of another, own, invest or otherwise have
an interest in, lease, operate or manage any business other than a business
engaged solely in the construction of, the ownership of interests in and/or the
management and operation of personal communications systems. As used herein the
term "personal communication systems" shall mean wireless telecommunications
systems licensed by the Federal Communications Commission which utilize radio
frequencies within the following bands:
1850-1865/1930-1945MHZ
1870-1885/1950-1965MHZ
1895-1910/1975-1990MHZ
1865-1870/1945-1950MHZ
1885-1890/1965-1970MHZ
1890-1895/1970-1975MHZ
ARTICLE IV
----------
Capitalization
--------------
(a) Authorized Shares. The total number of shares of all
classes of stock which the corporation shall have authority to issue is one
hundred ninety million (190,000,000) shares, consisting of sixty million
(60,000,000) Common Shares with a par value of $1.00 per share; sixty million
(60,000,000) Series A Common Shares with a par value of $1.00 per share; sixty
million (60,000,000) Series B Common Shares with a par value of $1.00 per share;
and ten million (10,000,000) shares of Preferred Stock with a par value of $1.00
per share.
(b) Common Shares, Series A Common Shares and Series B Common
Shares. (1) The powers, preferences and rights of the Common Shares, Series A
Common Shares and Series B Common Shares, and the qualifications, limitations or
restrictions thereof, shall be in all respects identical, except as expressly
provided in this Restated Certificate of Incorporation, as amended, or as
otherwise required by law.
(2) At each annual or special meeting of stockholders, each
holder of Common Shares shall be entitled to one (1) vote in person or
by proxy for each Common Share standing in such holder's name on the
stock transfer records of the corporation in connection with all
actions submitted to a vote of stockholders, each holder of Series A
Common Shares shall be entitled to fifteen (15) votes for each Series A
Common Share standing in such holder's name, and holders of Series B
Common Shares shall not vote on any matter, except
- 2 -
<PAGE>
as expressly provided in this Restated Certificate of Incorporation, as
amended, or as otherwise required by the Delaware General Corporation
Law.
(3) The number of authorized Common Shares and Series B Common
Shares may be increased or decreased (but not below the number of such
shares then outstanding in such class, respectively) by the affirmative
vote of a majority of the Series A Common Shares by the holders
thereof.
(c) Dividends. Dividends may be declared and paid to the
holders of the Common Shares, Series A Common Shares and Series B Common Shares
in cash, property, or other securities of the corporation out of any net profits
or net assets of the corporation legally available therefor. If and when
dividends on the Common Shares, Series A Common Shares and Series B Common
Shares are declared by the board of directors, whether payable in cash, in
property or in shares of stock of the corporation, the holders of Common Shares,
Series A Common Shares and Series B Common Shares shall be entitled to share
equally, on a per share basis, in such dividends; provided, however, that if at
any time a dividend or other distribution is to be paid in capital stock of the
corporation on capital stock of the corporation, such dividend or other
distribution shall be paid to all holders of common stock of the corporation and
may only be paid as follows:
(1) Common Shares may be paid to holders of Common Shares and
proportionately to holders of Series A Common Shares and Series B
Common Shares;
(2) Common Shares may be paid to holders of Common Shares at
the same time that Series A Common Shares are paid proportionately to
holders of Series A Common Shares and Series B Common Shares are paid
proportionately to holders of Series B Common Shares;
(3) Series A Common Shares may be paid to holders of Series A
Common Shares and proportionately to holders of Common Shares and
Series B Common Shares; or
(4) Series B Common Shares may be paid to holders of Series B
Common Shares and proportionately to holders of Common Shares and
Series A Common Shares;
and in the case of any such dividend or other distribution the board of
directors may permit the holders of any class of common stock to elect to
receive cash in lieu of stock.
(d) Stock Splits, Subdivisions and Combinations. If the
corporation shall in any manner split, subdivide or combine the outstanding
shares of any class of common stock, the outstanding shares of each other class
of common stock shall be proportionately split, subdivided or combined in the
same manner and on the same basis.
(e) Liquidation. The holders of Common Shares, Series A Common
Shares and Series B Common Shares shall be entitled to receive the same amount
or distribution per share upon the liquidation, dissolution or winding up of the
affairs of the corporation. A consolidation, merger or reorganization of the
corporation with any other corporation or corporations, or a sale of all or
- 3 -
<PAGE>
substantially all of the assets of the corporation, shall not be considered a
liquidation, dissolution or winding up of the corporation within the meaning of
these provisions.
(f) Distributions of Subsidiaries. Notwithstanding the
provisions of subsections (c) and (e) of Article IV, if the corporation at any
time distributes to the holders of common stock of the corporation the stock of
a Subsidiary (as hereinafter defined) having two or more classes of common stock
outstanding that have relative rights, preferences and limitations vis-a-vis
each other that, in the judgment of the board of directors, are similar in all
material respects to the relative rights, preferences and limitations of two or
more classes of common stock of the corporation vis-a-vis each other (except for
any variations in rights, preferences and limitations that are (1) necessary to
enable a class of common stock of the Subsidiary to be traded on an exchange or
through the National Association of Securities Dealers, Inc. Automated Quotation
System (the "NASDAQ System"); (2) due to differences in the laws of the states
of incorporation of the corporation and the Subsidiary; or (3) equally
applicable to two or more classes of common stock of the Subsidiary), then each
class of common stock of the Subsidiary shall be distributed to the extent
practicable to the holders of the corresponding class of common stock of the
corporation, provided that the same number of shares on a per share basis shall
be distributed with respect to shares of each applicable class of common stock
of the corporation.
(g) Pre-emptive Rights. No holder of stock of the corporation
shall have any pre-emptive right to subscribe for or acquire any unissued or
treasury stock or other securities of the corporation, whether such stock or
securities be hereby or hereafter authorized, except as may be specifically
granted pursuant to a contract with the corporation approved by the board of
directors and except that holders of Series A Common Shares shall have a
pre-emptive right to acquire unissued or treasury Series A Common Shares or
securities convertible into or exchangeable for, or carrying a right to
subscribe to or acquire, Series A Common Shares; provided, however, that no
pre-emptive right shall exist to acquire any Series A Common Shares sold
otherwise than for cash. The pre-emptive right of each holder of Series A Common
Shares may be exercised in full, or in part to the extent determined by each
holder, and in no event shall the exercise of such right be conditioned on
subscribing for or acquiring any minimum amount or proportion of stock or other
securities.
(h) Conversion of Series A Common Shares. Each outstanding
Series A Common Share shall be convertible into one Common Share. Series A
Common Shares so converted shall not be reissued. Any such conversion shall be
effected by the presentation and surrender of the certificates representing the
Series A Common Shares to be converted, at the office of the corporation or at
such other place as may from time to time be designated by the corporation, in
such form and accompanied by all transfer taxes (or proof of payment thereof),
if any, as shall be required for such transfer, and upon such surrender, the
holder of such shares shall be entitled to receive in exchange therefor
certificates for fully paid and nonassessable Common Shares of the corporation
at the rate aforesaid, and such holder shall be registered as the holder of such
Common Shares.
(i) Mandatory Redemption. Notwithstanding any other provision
of this Restated Certificate of Incorporation to the contrary, any outstanding
shares of stock of the corporation shall be subject to redemption by the
corporation, by action of the board of directors, if in the judgment of the
board of directors such action should be taken, pursuant to ss. 151(b) of Title
8 of the Delaware
- 4 -
<PAGE>
Code or any other applicable provision of law, to the extent necessary to
prevent the loss or secure the reinstatement of any license or franchise from
any governmental agency held by the corporation or any of its Subsidiaries to
conduct any portion of the business of the corporation or any of its
Subsidiaries, which license or franchise is conditioned upon some or all of the
holders of the corporation's stock possessing prescribed qualifications. The
terms and conditions of such redemption shall be as follows:
(1) the redemption price of the shares to be redeemed pursuant
to this subsection (i) shall be equal to the lesser of (A) the Fair
Market Value (as hereinafter defined) of such shares or (B) if such
shares were purchased by a Disqualified Holder (as hereinafter defined)
within one year of the Redemption Date (as hereinafter defined), such
Disqualified Holder's purchase price for such shares;
(2) the redemption price of such shares may be paid in cash,
Redemption Securities (as hereinafter defined) or any combination
thereof;
(3) if less than all the shares held by Disqualified Holders
are to be redeemed, the shares to be redeemed shall be selected in such
manner as shall be determined by the board of directors, which may
include selection first of the most recently purchased shares thereof,
selection by lot or selection in any other manner determined by the
board of directors;
(4) at least 30 days' written notice of the Redemption Date
shall be given to the record holders of the shares selected to be
redeemed (unless waived in writing by any such holder), provided that
the Redemption Date may be the date on which written notice shall be
given to record holders if the cash or Redemption Securities necessary
to effect the redemption shall have been deposited in trust for the
benefit of such record holders and subject to immediate withdrawal by
them upon surrender of the stock certificates for their shares to be
redeemed;
(5) from and after the Redemption Date, any and all rights of
whatever nature, which may be held by the owners of shares selected for
redemption (including without limitation any rights to vote or
participate in dividends declared on stock of the same class or series
as such shares), shall cease and terminate and they shall thenceforth
be entitled only to receive the cash or Redemption Securities payable
upon redemption; and
(6) such other terms and conditions as the board of directors
shall determine.
(j) Minority Protection Offers. (1) If, after the Effective
Time (as hereinafter defined), any person or group acquires beneficial ownership
of 10% or more of the then issued and outstanding Common Shares (other than upon
original issuance by the corporation, by operation of law, by will or the laws
of descent and distribution, by gift or by foreclosure of a bona fide loan), and
such person or group (a "Related Person") does not own an equal or greater
percentage of the Series B Common Shares acquired after the record date for the
first issuance of Series B Common Shares (the "Distribution Date"), such person
or group shall, within a 90-day period beginning the day after becoming a
Related Person, make a public tender offer in compliance with all applicable
laws and
- 5 -
<PAGE>
regulations to acquire Series B Common Shares as provided in this subsection (j)
of Article IV (a "Minority Protection Offer").
(2) In each Minority Protection Offer, the Related Person
shall make a public tender offer to acquire that number of Series B
Common Shares determined by (A) multiplying the percentage of
outstanding Common Shares beneficially owned on the date such person or
group became a Related Person and acquired after the Effective Time by
such Related Person by the total number of Series B Common Shares
outstanding on such date, and (B) subtracting therefrom the total
number of Series B Common Shares beneficially owned on such date and
acquired after the Distribution Date by such Related Person (including
shares acquired on such date at or prior to the time such person or
group became a Related Person). The Related Person shall acquire all of
such shares validly tendered; provided, however, that if the number of
Series B Common Shares tendered to the Related Person exceeds the
number of shares required to be acquired pursuant to the formula set
forth in this clause (2), the number of Common Shares acquired from
each tendering holder shall be pro rata in proportion to the total
number of Series B Common Shares tendered by all tendering holders.
(3) The offer price for any Series B Common Shares required to
be purchased by the Related Person pursuant to this provision shall be
the greater of (A) the highest price per share paid by the Related
Person for any Common Share in the six-month period ending on the date
such person or group became a Related Person, or (B) the highest
reported sales price of a Common Share or Series B Common Share on the
NASDAQ System (or such securities exchange or other quotation system as
is then the principal trading market for such shares) on the date such
person or group became a Related Person or, in case no such sale takes
place, the Closing Price (as hereinafter defined) on the prior trading
day. For purposes of clause (4) below, the applicable date for the
calculations required by the preceding sentence shall be the date on
which the Related Person becomes required to engage in a Minority
Protection Offer. In the event that the Related Person has acquired
Common Shares in the six-month period ending on the date such person or
group becomes a Related Person for consideration other than cash, the
value of such consideration per Common Share shall be as determined in
good faith by the board of directors.
(4) A Minority Protection Offer shall also be required to be
effected by any Related Person that acquires beneficial ownership of
the next higher integral multiple of 5% (e.g. 15%, 20%, 25%, etc.) of
the outstanding Common Shares after the Effective Time (other than upon
issuance or sale by the corporation, by operation of law, by will or
the laws of descent and distribution, by gift, or by foreclosure of a
bona fide loan) if such Related Person does not then own an equal or
greater percentage of the Series B Common Shares acquired after the
Distribution Date. Such Related Person shall be required to make a
public tender offer to acquire that number of Series B Common Shares
prescribed by the formula set forth in clause (2) above, and shall
acquire all shares validly tendered or a pro rata portion thereof, as
specified in said clause (2), at a price determined pursuant to clause
(3) above.
- 6 -
<PAGE>
(5) If any Related Person fails to make an offer required by
this subsection (j) of Article IV, or to purchase shares validly
tendered and not withdrawn (after proration, if any), such Related
Person shall not be entitled to vote any Common Shares beneficially
owned by such Related Person and acquired by such Related Person after
the Effective Time unless and until such requirements are complied with
or unless and until all Common Shares causing such offer requirement to
be effective are no longer beneficially owned by such Related Person.
(6) The Minority Protection Offer requirement shall not apply
to any increase in percentage ownership of Common Shares resulting
solely from a change in the total number of Common Shares outstanding,
provided that any acquisition after such change which results in any
person or group owning 10% or more of the Common Shares, excluding, in
the case of the numerator but not of the denominator of the calculation
of such percentage, Common Shares held by such Related Person
immediately after the Effective Time, shall be subject to any Minority
Protection Offer requirement that would be imposed with respect to a
Related Person pursuant to this subsection (j) of Article IV.
(7) All calculations with respect to percentage ownership of
issued and outstanding Common Shares or Series B Common Shares shall be
based upon the numbers of issued and outstanding shares reported by the
corporation on the last filed of (A) the corporation's most recent
annual report on Form 10-K, (B) its most recent Quarterly Report on
Form 10-Q, or (C) if any, its most recent Current Report on Form 8-K.
(8) For purposes of this subsection (j) of Article IV, the
term "person" means a natural person, company, government, or political
subdivision, agency or instrumentality of a government, or other
entity, "beneficial ownership" shall be determined pursuant to Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), or any successor regulation and the formation or
existence of a "group" shall be determined pursuant to Rule 13d-5(b)
under the 1934 Act or any successor regulation.
(9) In the event of a merger or consolidation of the
corporation with or into another entity (whether or not the corporation
is the surviving entity), the holders of Series B Common Shares shall
be entitled to receive the same per share consideration as the per
share consideration, if any, received by any holders of the Common
Shares in such merger or consolidation.
(k) Power to Sell Stock. The board of directors shall have the
power to issue and sell all or any part of any class of stock herein or
hereafter authorized to such person, firm, association or corporation, and for
such consideration as the board of directors shall from time to time, in its
discretion, determine, whether or not greater consideration could be received
upon the issue or sale of the same number of shares of another class, and as
otherwise permitted by law.
(l) Power to Repurchase Stock. The board of directors
shall have the power to purchase shares of any class of stock herein or
hereafter authorized from such person, firm, association or corporation, and for
such consideration as the board of directors shall from time to
- 7 -
<PAGE>
time, in its discretion, determine, whether or not less consideration could be
paid upon the purchase of the same number of shares of another class, and as
otherwise permitted by law.
(m) Preferred Stock. The board of directors is expressly
authorized to adopt, from time to time, a resolution or resolutions providing
for the issue of one or more series of Preferred Stock, with such voting powers,
full or limited, or no voting powers, and with such designations, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, in addition to and not
inconsistent with those specifically set forth in this Restated Certificate of
Incorporation and as shall be stated and expressed in the resolution or
resolutions adopted by the board of directors; provided, however, that no shares
of any series of Preferred Stock shall be issued for consideration of less than
$100 per share, have more than one (1) vote per share with respect to any
matter, or have separate class-voting rights with respect to the election of
directors or any other matter. In no event shall Preferred Stock of any series
be split or divided in any manner, nor shall any dividends or other
distributions payable in stock of the corporation of any class or series be paid
or payable on Preferred Stock.
(n) Effective Time. Effective as of the filing of this
Restated Certificate of Incorporation with the Secretary of State of the State
of Delaware pursuant to ss. 103 of Title 8 of the Delaware Code (the "Effective
Time"), the 1,000 shares of common stock, par value $1.00 per share, of the
corporation, representing all the issued and outstanding capital stock of the
corporation ("Outstanding Common Stock") shall, without any action on the part
of the holder thereof, be converted into 19,086,000 Common Shares and 40,000,000
Series A Common Shares, all of which shall be fully paid and nonassessable. Upon
the surrender of certificates representing shares of Outstanding Common Stock,
the corporation or any agent of the corporation appointed for such purpose shall
issue in exchange therefor one or more certificates representing the shares into
which the shares of Outstanding Common Stock have been converted in accordance
with the foregoing.
ARTICLE V
---------
Any and all right, title, interest and claim in or to any
dividends declared by the corporation, whether in cash, stock or otherwise,
which are unclaimed by the stockholder entitled thereto for a period of six
years after the close of business on the payment date, shall be and be deemed to
be extinguished and abandoned; and such unclaimed dividends in the possession of
the corporation, its transfer agents or other agents or depositaries shall at
such time become the absolute property of the corporation, free and clear of any
and all claims of any persons whatsoever.
ARTICLE VI
----------
Directors
---------
(a) Number; Classes; Changes. The number of directors of
the corporation shall be fixed by or pursuant to the bylaws of the corporation,
but shall not be less than three, and, commencing with the 1996 annual meeting
of stockholders, the directors shall be divided into three
- 8 -
<PAGE>
classes, which shall be as nearly equal in number as possible; the term of
office of those of the first class to expire at the annual meeting next ensuing;
of the second class one year thereafter; of the third class two years
thereafter; and at each annual election held after such classification and
election, directors shall be chosen for a full three-year term to succeed those
whose terms expire. If the number of directors fixed by or pursuant to the
bylaws of the corporation is changed at any time, any newly created
directorships or any decrease in directorships shall be so apportioned among the
classes by the board of directors so as to make all classes as nearly equal in
number as possible; provided, however, that no decrease in the number of
directors shall shorten the term of any incumbent director.
(b) Voting in Elections. With respect to the election of
directors, the holders of Common Shares, voting as a class, shall be entitled to
elect at each annual meeting that number of directors which (together with all
directors whose terms do not expire at the time of such election and who were
previously elected by such holders) constitutes 25% of the number of directors
of the corporation fixed by or pursuant to the bylaws of the corporation
(rounded up to the nearest whole number). After the holders of Common Shares
have voted with respect to the election of directors, the holders of (A)
Preferred Stock entitled to vote thereon, and (B) Series A Common Shares, both
voting together as one class, shall be entitled to elect at each annual meeting
that number of directors which (together with all directors whose terms do not
expire at the time of such election and who were previously elected by such
holders) constitutes 75% of the number of directors fixed by or pursuant to the
bylaws of the corporation (rounded down to the nearest whole number); provided,
however, that in the event the number of issued and outstanding Series A Common
Shares at the time of an annual meeting is less than 500,000, then the holders
of Common Shares shall be entitled to vote with the holders of Series A Common
Shares and Preferred Stock entitled to vote thereon for the directors such
holders are entitled to elect at such meeting, in which case the holders of
Common Shares, Series A Common Shares, and Preferred Stock entitled to vote
thereon, shall vote together without regard to class.
(c) Vacancies. Vacancies and newly created directorships of
the Preferred Stock and Series A Common Shares shall be filled by the holders of
such classes. Vacancies and newly created directorships of the Common Shares
shall be filled by the holders of such class, if a vacancy or newly created
directorship is to be filled at an annual meeting of stockholders, or by a
majority of the directors then in office, if the vacancy or newly created
directorship is to be filled between annual meetings of stockholders. Vacancies
and newly created directorships with respect to directors elected by the holders
of Common Shares, Series A Common Shares, and Preferred Stock entitled to vote
thereon, voting together without regard to class, shall be filled by the holders
of such classes, if a vacancy or newly created directorship is to be filled at
an annual meeting of stockholders, or by a majority of the directors then in
office, if the vacancy or newly created directorship is to be filled between
annual meetings of stockholders. A director chosen by a majority of the
directors then in office to fill a vacancy or a newly created directorship shall
cease to hold office at the next annual meeting of stockholders held thereafter,
whether the term of office of the class for which the director was chosen
expires at that meeting or not. In all other cases, directors chosen to fill
vacancies and newly created directorships shall hold office until the next
election of the class for which such directors shall have been chosen, and until
their successors shall be elected and qualified.
- 9 -
<PAGE>
(d) Ballots. Election of directors need not be by
written ballot unless the bylaws of the corporation so provide.
ARTICLE VII
-----------
In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized to make, alter, amend
or repeal the bylaws of the corporation.
ARTICLE VIII
------------
No opportunity, transaction, agreement or other arrangement to
which TDS, or any other person in which TDS has or acquires a financial
interest, is or shall become a party, shall be the property or a corporate
opportunity of the corporation or its Subsidiaries, unless (a) not less than
500,000 Series A Common Shares are outstanding, and (b) such opportunity,
transaction, agreement or other arrangement relates solely to the construction
of, the ownership of interests in and/or the management and operation of
personal communications systems. The existence or presence of the conditions set
forth in the immediately preceding sentence shall not be deemed to entitle the
corporation conclusively to the benefit of such opportunity, transaction,
agreement or other arrangement.
ARTICLE IX
----------
A director of the corporation shall not in the absence of
fraud be disqualified by his office from dealing or contracting with the
corporation either as a vendor, purchaser or otherwise, nor in the absence of
fraud shall a director of the corporation be liable to account to the
corporation for any profit realized by him from or through any transaction or
contract of the corporation by reason of the fact that he, or any firm of which
he is a member, or any corporation of which he is an officer, director or
stockholder, was interested in such transaction or contract if such transaction
or contract has been authorized, approved or ratified in the manner provided in
the General Corporation Law of Delaware for authorization, approval or
ratification of transactions or contracts between the corporation and one or
more of its directors or officers, or between the corporation and any other
corporation, partnership, association or other organization in which one or more
of its directors or officers are directors or officers, or have a financial
interest.
ARTICLE X
---------
For purposes of this Restated Certificate of Incorporation:
"Disqualified Holder" shall mean any holder of shares of stock of
the corporation whose holding of such stock, either individually or
when taken together with the holding of shares of stock of the
corporation by any other holders, may result, in the judgment of the
board of directors, in the loss of, or the failure to secure the
reinstatement of, any license or franchise
- 10 -
<PAGE>
from any governmental agency held by the corporation or any of its
Subsidiaries to conduct any portion of the business of the corporation
or any of its Subsidiaries.
"Fair Market Value" of a share of the corporation's stock of
any class or series shall mean the average Closing Price for such a
share for each of the 20 most recent days on which shares of stock of
such class or series shall have been traded preceding the day on which
notice of redemption shall be given pursuant to subsection (i)(4) of
Article IV; provided, however, that if shares of stock of such class or
series are not traded on any securities exchange or on the NASDAQ
System, "Fair Market Value" shall be determined by the board of
directors in good faith. "Closing Price" on any day means the last
reported sales price or, in case no such sale takes place, the average
of the reported closing bid and asked prices on the principal United
States securities exchange registered under the 1934 Act on which such
stock is listed, or, if such stock is not listed on any such exchange,
the highest closing sales price or bid quotation for such stock on the
NASDAQ System or any system then in use, or if no such prices or
quotations are available, the fair market value on the day in question
as determined by the board of directors in good faith.
"personal communication systems" shall have the meaning
specified in Article III.
A "person" shall mean an individual, a corporation, a
partnership, a joint venture, a trust or unincorporated organization, a
joint stock company or similar organization, a government or any
political subdivision thereof, or any other legal entity.
"Redemption Date" shall mean the date fixed by the board of
directors for the redemption of shares of stock of the corporation
pursuant to subsection (i) of Article IV.
"Redemption Securities" shall mean any debt or equity
securities (other than Series A Common Shares or securities convertible
into or exchangeable for, or carrying a right to subscribe to or
acquire, Series A Common Shares) of the corporation, any of its
Subsidiaries or any other corporation, or any combination thereof,
having such terms and conditions as shall be approved by the board of
directors and which, together with any cash to be paid as part of the
redemption price, in the opinion of any nationally recognized
investment banking firm selected by the board of directors (which may
be a firm which provides other investment banking, brokerage or other
services to the corporation), has a value, at the time notice of
redemption is given pursuant to subsection (i)(4) of Article IV, at
least equal to the price required to be paid pursuant to subsection
(i)(1) of Article IV (assuming, in the case of Redemption Securities to
be publicly traded, such Redemption Securities were fully distributed
and subject only to normal trading activity).
"Subsidiary", with respect to a specified person, shall mean
any person whose accounts are included in the consolidated financial
statements of the specified person and its Subsidiaries prepared in
accordance with generally accepted accounting principles at the time.
"TDS" means Telephone and Data Systems, Inc., an Iowa
corporation, and any successor by merger, consolidation or otherwise to
such corporation.
- 11 -
<PAGE>
ARTICLE XI
----------
(a) Limitation on Liability. A director or officer of the
corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director or
officer, except for liability (1) for any breach of the director's or officer's
duty of loyalty to the corporation or its stockholders, (2) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (3) under ss. 174 of Title 8 of the Delaware Code, or (4) for
any transaction from which the director or officer is found by a court of law to
have derived an improper personal benefit.
(b) Indemnification. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the corporation to the fullest extent
authorized by the General Corporation Law of Delaware, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader indemnification
rights than said law permitted the corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure to the benefit of
his or her heirs, executors and administrators; provided, however, that, except
as provided in subsection (c) of this Article XI, the corporation shall
indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the board of directors. The right to
indemnification conferred in this Article XI shall be a contract right and shall
include the right to be paid by the corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the General Corporation Law of Delaware requires, the payment
of such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Article XI or otherwise.
The corporation may, by action of its board of directors, provide
indemnification to other employees or agents of the corporation with the same
scope and effect as the foregoing indemnification of directors and officers.
- 12 -
<PAGE>
(c) Claims for Indemnification. If a claim under subsection
(b) of this Article XI is not paid in full by the corporation within 30 days
after a written claim has been received by the corporation, the claimant may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the claimant shall
be entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the corporation) that the claimant has not met the standards of
conduct which make it permissible under the General Corporation Law of Delaware
for the corporation to indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the corporation. Neither the failure
of the corporation (including stockholders) to have made a determination prior
to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable standard of
conduct set forth in the General Corporation Law of Delaware, nor an actual
determination by the corporation (including its board of directors, independent
legal counsel, or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
(d) Non-Exclusivity. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article XI shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of this Restated Certificate of Incorporation, bylaw, agreement, vote
of stockholders or disinterested directors or otherwise.
(e) Insurance. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against the expense,
liability or loss under the General Corporation Law of Delaware.
ARTICLE XII
-----------
In accordance with Section 203(b)(3) of the General
Corporation Law of the State of Delaware (the "GCL") the corporation expressly
elects not to be governed by Section 203 of the GCL.
ARTICLE XIII
------------
The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation, in
the manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
* * * * *
- 13 -
<PAGE>
This Restated Certificate of Incorporation was duly adopted by
unanimous written consent of the stockholders in accordance with the applicable
provisions of Sections 228, 242 and 245 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, said AMERICAN PORTABLE TELECOM, INC. has
caused this Certificate to be signed by Donald W. Warkentin, its President and
attested by Michael G. Hron, its Secretary, this 19th day of April, 1996.
AMERICAN PORTABLE TELECOM, INC.
By: /s/ Donald W. Warkentin
---------------------------
Donald W. Warkentin
President
ATTEST:
By: /s/ Michael G. Hron
----------------------
Michael G. Hron
Secretary
- 14 -
<PAGE>
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
OAK PARK COMMUNICATIONS, INC.
INTO
AMERICAN PORTABLE TELECOM, INC.
American Portable Telecom, Inc., a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY:
FIRST: That this Corporation was incorporated on the 23rd
day of July, 1991, pursuant to the General Corporation Law of the State of
Delaware. The name of the corporation set forth in the original Certificate of
Incorporation of the Corporation was "American Portable Telecommunications,
Inc."
SECOND: That a Certificate of Amendment to the Certificate of
Incorporation was filed on January 18, 1996, amending the name of the
corporation to "American Portable Telecom, Inc."
THIRD: That a Restated Certificate of Incorporation of the
Corporation was filed on April 19, 1996, which amended and restated the
Certificate of Incorporation, as amended, of the Corporation.
<PAGE>
FOURTH: That this Corporation owns all of the outstanding
shares of the capital stock of Oak Park Communications, Inc., a Delaware
corporation ("Oak Park"), which was incorporated on the 20th day of September,
1996.
FIFTH: That the merger of Oak Park with and into this
Corporation pursuant to Section 253 of the General Corporation Law of the State
of Delaware was approved by the adoption of the following resolutions of the
Board of Directors of this Corporation by a unanimous written consent dated as
of November 12, 1996, and which resolutions have not been amended, modified or
rescinded and remain in full force and effect on the date hereof:
RESOLVED, that the Board of Directors of the Corporation,
hereby declares it advisable and in the best interests of the Corporation to
change the name of the Corporation to "Aerial Communications, Inc.";
FURTHER RESOLVED, that, in order to effect the change in the
name of the Corporation pursuant to Section 253 of the General Corporation Law
of the State of Delaware, the proper officers of the Corporation be, and they
are hereby, authorized and directed to cause Oak Park Communications, Inc. a
Delaware corporation and wholly-owned subsidiary of the Corporation
("Subsidiary"), to be merged with and into the Corporation;
FURTHER RESOLVED, that the Corporation shall assume all of the
obligations of Subsidiary pursuant to said Section 253 and that all of the
outstanding shares of capital stock of Subsidiary be, and they are hereby,
cancelled and retired and no shares of the capital stock of the Corporation,
cash or other consideration shall be issued in exchange therefor;
FURTHER RESOLVED, that the merger of Subsidiary with and into
the Corporation shall become effective upon the filing with the Secretary of
State of the State of Delaware, in accordance with Section 103 of the General
Corporation Law of the State of Delaware, of a Certificate of Ownership and
Merger pursuant to said Section 253;
FURTHER RESOLVED, that the proper officers of the Corporation
be, and they are hereby, authorized and directed to execute a Certificate of
Ownership and Merger setting forth the resolutions to merge Subsidiary with and
into the Corporation, to cause the same to be filed with the Secretary of State
of the State of Delaware and a certified copy thereof to be recorded in the
office of the Recorder of Deeds of the appropriate county in the State of
Delaware and to do all acts
- 2 -
<PAGE>
and things whatsoever, whether within or without the State of Delaware, which
may be in any way necessary or proper to effect the merger;
FURTHER RESOLVED, that upon the effectiveness of the merger of
Subsidiary with and into the Corporation, the name of the Corporation shall be
"Aerial Communications, Inc." and the first article of the Restated Certificate
of Incorporation of Corporation, as amended and in effect immediately prior to
the time the Certificate of Ownership and Merger is filed with the Secretary of
State of the State of Delaware, shall be amended to read after such time as
follows:
"ARTICLE I
The name of the corporation is:
AERIAL COMMUNICATIONS, INC."
FURTHER RESOLVED, that anything herein or elsewhere to the
contrary notwithstanding, the merger of Subsidiary with and into the Corporation
may be abandoned by the Board of Directors of the Corporation at any time prior
to the date of filing of the Certificate of Ownership and Merger with the
Secretary of State of the State of Delaware;
FURTHER RESOLVED, that upon the effectiveness of the merger of
Subsidiary with and into the Corporation, the proper officers of the Corporation
be, and they are hereby, authorized and directed to cause, if necessary or
appropriate, the Certificate of Ownership and Merger and any required
supplementary or other documents to be filed with the Secretary of State of each
state in which the Corporation is qualified to do business as a foreign
corporation as evidence of the change of the Corporation's name;
FURTHER RESOLVED, that upon the effectiveness of the merger of
Subsidiary with and into the Corporation, the proper officers of the Corporation
be, and they are hereby, authorized and directed to cause, if necessary or
appropriate, the Certificate of Ownership and Merger to be recorded in the
United States Patent and Trademark Office and in any appropriate foreign
registry office of patents and trademarks, as evidence of the change of the
Corporation's name;
FURTHER RESOLVED, that in the event that the purposes of the
above resolutions of the Board of Directors cannot be accomplished as planned
for any reason whatsoever, the officers of this Corporation are authorized and
directed to take all such actions as they may deem necessary or advisable in
order to accomplish such purposes to the extent practicable (including, without
limitation, adjustment of the specific wording (but not the sense or purpose) of
the foregoing resolutions, if necessary, to comply with applicable state filing
requirements); provided, that the essential purposes achieved remain the same as
those approved and adopted by this Board by the foregoing resolutions; and
FURTHER RESOLVED, that the officers of the Corporation be, and
they are hereby, authorized and directed to execute and deliver, on behalf of
the Corporation, such other
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<PAGE>
documents, instruments and certificates and to take such other actions as each
such officer, in his or her sole discretion, deems necessary or appropriate to
carry out the full intent and purposes of the foregoing resolutions.
SIXTH: This merger shall be effective upon filing with the
Secretary of State of the State of Delaware.
* * * * *
- 4 -
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this
Certificate of Ownership and Merger to be signed by its Chairman and attested by
its Secretary this 12th day of November, 1996.
AMERICAN PORTABLE TELECOM, INC.
By: /s/ LeRoy T. Carlson, Jr.
------------------------------
LeRoy T. Carlson, Jr.
Chairman
ATTEST:
By: /s/ Michael G. Hron
--------------------
Michael G. Hron
Secretary
- 5 -
<PAGE>
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF INCORPORATION
OF
AERIAL COMMUNICATIONS, INC.
f/k/a AMERICAN PORTABLE TELECOM, INC.
The undersigned officers, LeRoy T. Carlson, Jr. and Michael G.
Hron, Chairman and Secretary, respectively, of AERIAL COMMUNICATIONS, INC.,
f/k/a AMERICAN PORTABLE TELECOM, INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
DO HEREBY CERTIFY THAT:
1. This Corporation was incorporated on the 23rd day of
July, 1991, pursuant to the General Corporation Law of the State of Delaware.
2. A Restated Certificate of Incorporation of the Corporation
was filed on April 19, 1996, which amended and restated the Certificate of
Incorporation, as amended, of the Corporation.
3. This Certificate of Correction is being filed for the
purpose of changing the reference to "1996" in the first sentence of paragraph
(a) of Article VI of the Restated Certificate of Incorporation referred to in 2
above to refer to "1997." Such change is being made to reflect the intended
year, which was not properly reflected in the Restated Certificate of
Incorporation due to a clerical error.
<PAGE>
IN WITNESS WHEREOF, we have hereunto subscribed our names this
12th day of November, 1996.
AERIAL COMMUNICATIONS, INC.
By: /s/ LeRoy T. Carlson, Jr.
----------------------------
LeRoy T. Carlson, Jr.
Chairman
Attest:
/s/ Michael G. Hron
- --------------------
Michael G. Hron
Secretary
- 2 -
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
AERIAL COMMUNICATIONS, INC.
* * * * *
AERIAL COMMUNICATIONS, INC., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
FIRST: That the board of directors by a unanimous vote at a
meeting adopted a resolution declaring advisable and approving an amendment to
the Restated Certificate of Incorporation of the corporation, as amended, a copy
of which amendment is attached hereto as Exhibit A.
SECOND: That the aforesaid amendment was duly approved
and adopted by the requisite vote of the stockholders of the
corporation in accordance with the applicable provisions of ss.242 of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Aerial Communications, Inc. has caused
this certificate to be signed by its chairman, and attested by its secretary,
this 12th day of May, 1997.
AERIAL COMMUNICATIONS, INC.
By: /s/ LeRoy T. Carlson, Jr.
---------------------------
LeRoy T. Carlson, Jr.
Chairman
ATTEST:
By: /s/ Michael G. Hron
--------------------
Michael G. Hron
Secretary
<PAGE>
EXHIBIT A
AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
AERIAL COMMUNICATIONS, INC.
Paragraph (a) of Article VI of the Restated Certificate of
Incorporation of the Corporation, as amended, is hereby amended and restated in
its entirety as follows:
"(a) Authorized Shares. The total number of shares of all classes of
stock which the corporation shall have authority to issue is two
hundred thirty million (230,000,000) shares, consisting of one hundred
million (100,000,000) Common Shares, with a par value of $1.00 per
share; sixty million (60,000,000) Series A Common Shares, with a par
value of $1.00 per share; sixty million (60,000,000) Series B Common
Shares, with a par value of $1.00 per share; and ten million
(10,000,000) shares of Preferred Stock, with a par value of $1.00 per
share."
<PAGE>
Exhibit 3.2
AERIAL COMMUNICATIONS, INC.
RESTATED BYLAWS*
(As Amended as of February 25, 1997)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be
in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation may also have
offices at such other places both within and without the State of Delaware as
the board of directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meeting. All meetings of the stockholders
for the election of directors shall be held at such place either within or
without the State of Delaware as shall be designated from time to time by the
board of directors and stated in the notice of the meeting. Meetings of
stockholders for any other purpose may be held at such time and place, within or
without the State of Delaware, as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Time of Annual Meeting and Vote Required to Elect
Directors. Annual meetings of stockholders shall be held on the first Monday in
May, commencing in 1997, if not a legal holiday, and if a legal holiday, then on
the next secular day following, at 10:00 A.M., or at such other date and time as
shall be designated from time to time by the board of directors and stated in
the notice of the meeting, at which the stockholders shall elect by a plurality
vote directors to succeed those whose terms expire, and transact such other
business as may properly be brought before the meeting.
- --------
* Marked to show Amendments as of Februrary 25, 1997.
<PAGE>
Section 3. Notice of Annual Meeting. Written notice of the
annual meeting stating the place, date and hour of the meeting shall be given to
each stockholder entitled to vote at such meeting not less than ten nor more
than sixty days before the date of the meeting.
Section 4. Voting List. The officer who has charge of the
stock ledger of the corporation shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, at the corporation's principal business
address during ordinary business hours, for a period of at least ten days prior
to the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 5. Special Meetings. Special meetings of the
stockholders, for any purpose or purposes, unless otherwise prescribed by
statute or by the certificate of incorporation, may be called by the president
and shall be called by the president or secretary at the request in writing of a
majority of the board of directors, or at the request in writing of holders of a
majority of the votes of the stock issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the proposed meeting.
Section 6. Notice of Special Meetings. Written notice of a
special meeting, stating the place, date and hour of the meeting and the purpose
or purposes for which the meeting is called, shall be given not less than ten
nor more than sixty days before the date of the meeting to each stockholder
entitled to vote at such meeting.
Section 7. Business to be Transacted at Special Meetings.
Business transacted at any special meeting of stockholders shall be limited to
the purposes stated in the notice.
Section 8. Quorum and Adjournments. The holders of a majority
of the votes of the stock issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall constitute a quorum at all
meetings of the stockholders for the transaction of business except as otherwise
provided by statute or by the certificate of incorporation, and
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<PAGE>
except where a separate vote by a class or classes is required, in which case
the holders of a majority of the votes of the stock of such class or classes,
present in person or represented by a proxy, shall constitute a quorum entitled
to take action with respect to that vote on that matter. If, however, such
quorum shall not be present or represented at any meeting of the stockholders,
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
Section 9. Vote Required. When a quorum is present at any
meeting, the vote of the holders of a majority of the votes of the stock having
voting power present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which by express
provision of statute, the certificate of incorporation, or the bylaws, a
different vote is required, in which case such express provision shall govern
and control the decision or such question.
Section 10. Voting. Each stockholder shall at every meeting of
stockholders be entitled to vote in person or by proxy the shares of capital
stock having voting power held by such stockholder, but no proxy shall be voted
after three years from its date, unless the proxy provides for a longer period.
Section 11. Informal Action. Any action required to be taken
at any annual or special meeting of stockholders of the corporation, or any
action which may be taken at any annual or special meeting of such stockholders,
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
Section 12. Introduction of Business at a Meeting of
Stockholders. At an annual or special meeting of stockholders, only such
business shall be conducted, and only such proposals
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<PAGE>
shall be acted upon, as shall have been properly brought before an annual or
special meeting of stockholders. To be properly brought before an annual or
special meeting of stockholders, business must be (1) in the case of a special
meeting, specified in the notice of the special meeting (or any supplement
thereto) given by or at the direction of the board of directors, or (2) in the
case of an annual meeting, properly brought before an annual meeting by a
stockholder. For business to be properly brought before an annual meeting of
stockholders by a stockholder, the stockholder must have given timely notice
thereof in writing to the President or Secretary of the corporation. To be
timely, a stockholder's notice must be received at the principal executive
offices of the corporation not less than twenty days nor more than fifty days
prior to the date of the annual meeting, provided, however, that if less than
thirty days' notice or prior public disclosure of the date of the annual meeting
is made or given to stockholders, notice by the stockholder to be timely must be
received not later than the close of business on the tenth day following the
earlier of (1) the day on which such notice of the date of the meeting was
mailed or (2) the day on which such public disclosure was made.
A stockholder's notice shall set forth as to each matter the
stockholder proposes to bring before an annual meeting of stockholders (1) a
brief description of the business desired to be brought before the annual
meeting, (2) the name and address, as they appear on the corporation's books, of
the stockholder proposing such business and any other stockholders known by such
stockholder to be supporting such proposal, (3) the class and number of shares
of the corporation which are beneficially owned by such stockholder on the date
of such stockholder's notice and by any other stockholders known by such
stockholder to be supporting such proposal on the date of such stockholder's
notice and (4) any material interest of the stockholder in such proposal.
Notwithstanding anything in the bylaws to the contrary, no
business shall be conducted at a meeting of stockholders except in accordance
with the procedure set forth in this Section 12. The chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting that the
business was not properly brought before the meeting in accordance with the
procedures described by the bylaws, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be considered.
Section 13. Nomination of Directors. Only persons
nominated in accordance with the procedures set forth in this section shall be
eligible for election as directors. Nominations of persons for election to the
board may be made at a meeting of stockholders (1) by or at the direction of the
board of directors, or (2) by any stockholders of the corporation entitled to
vote for
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the election of directors at such meeting who complies with the notice
procedures set forth in this Section 13. Such nominations, other than those made
by or at the direction of the board of directors, shall be made pursuant to
timely notice in writing to the President or Secretary of the corporation. To be
timely, a stockholder's notice must be received at the principal executive
offices of the corporation not less than twenty days nor more than fifty days
prior to the date of a meeting, provided, however, that if fewer than thirty
days notice or prior public disclosure of the date of the meeting is given or
made to stockholders, notice by the stockholder to be timely must be so
delivered or received not later than the close of business on the tenth day
following the earlier of (1) the day on which such notice of the date of such
meeting was mailed or (2) the day on which such public disclosure was made.
A stockholder's notice shall set forth (1) as to each person
whom the stockholder proposes to nominate for election or reelection as a
director (a) the name, age, business address and residence address of such
person, (b) the principal occupation or employment of such person, (c) the class
and number of shares of the corporation which are beneficially owned by such
person on the date of such stockholder's notice and (d) any other information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(including without limitation such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected); and
(2) as to the stockholder giving the notice (a) the name and address, as they
appear on the corporation's books, of such stockholder and any other
stockholders known by such stockholder to be supporting such nominees and (b)
the class and number of shares of the corporation which are beneficially owned
by such stockholder on the date of such stockholder's notice and by any other
stockholders known by such stockholder to be supporting such nominees on the
date of such stockholder's notice.
No person shall be eligible for election as a director of the
corporation unless nominated in accordance with procedures set forth in this
section. The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
procedures prescribed by the bylaws, and if he should so determine, he shall so
declare to the meeting and the defective nomination shall be disregarded.
This Section 13 shall not apply to the election of a director
to a directorship which may be filled by the board of directors under the
Delaware General Corporation Law.
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<PAGE>
ARTICLE III
DIRECTORS
Section 1. Number, Classification and Term of Office. The
number of directors which shall constitute the whole board shall not be less
than three nor more than eleven. Within the limits above specified, the number
of directors shall be determined by resolution of the board of directors or by
the stockholders at the annual meeting. Commencing with the 1997 annual meeting
of stockholders, the directors shall be divided into three classes: Class I,
Class II and Class III. Such classes shall be as nearly equal in number as
possible. The term of office of the initial Class I directors shall expire at
the annual meeting of stockholders in 1998; the term of office of the initial
Class II directors shall expire at the annual meeting of stockholders in 1999;
and the term of office of the initial Class III directors shall expire at the
annual meeting of stockholders in 2000, or thereafter when their respective
successors in each case are elected and qualified. At each annual election held
after the 1997 annual meeting of stockholders the directors chosen to succeed
those whose terms then expire shall be identified as being of the same class as
the directors they succeed and shall be elected for a term expiring at the third
succeeding annual meeting or thereafter when their respective successors in each
case are elected and qualified. Any director elected to a particular class by
the stockholders or directors shall be eligible, upon resignation, to be elected
to a different class.
Section 2. General Powers. The business of the corporation
shall be managed by its board of directors, which may exercise all such powers
of the corporation and do all such lawful acts and things as are not by statute,
by the certificate of incorporation or by the bylaws directed or required to be
exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 3. Place of Meetings. The board of directors of the
corporation may hold meetings, both regular and special, either within or
without the State of Delaware.
Section 4. Regular Meetings. A regular meeting of the board of
directors shall be held without other notice than this bylaw, immediately after,
and at the same place as, the annual meeting of stockholders. The board of
directors may provide, by resolution, the time and place, either within or
without the State of Delaware, for the holding of additional regular meetings
without other notice than such resolution.
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Section 5. Special Meetings. Special meetings of the board of
directors may be called by the president on two days notice to each director,
either personally or by mail or by telegram; special meetings shall be called by
the president or secretary in like manner and on like notice on the written
request of two directors.
Section 6. Quorum. At all meetings of the board of directors,
a majority of directors then in office shall constitute a quorum for the
transaction of business and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the board of
directors, except as may be otherwise specifically provided by statute or by the
certificate of incorporation. If a quorum shall not be present at any meeting of
the board of directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 7. Informal Action. Unless otherwise restricted by the
certificate of incorporation or these bylaws, any action required to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
Section 8. Resignations. Any director of the corporation may
resign at any time by giving written notice to the board of directors, the
president, or the secretary of the corporation. Such resignation shall take
effect at the time specified therein; and, unless tendered to take effect upon
acceptance thereof, the acceptance of such resignation shall not be necessary to
make it effective.
Section 9. Presumption of Assent. A director of the
corporation who is present at a meeting of the board of directors at which
action on any corporate matter is taken shall be conclusively presumed to have
assented to the action taken unless his dissent shall be entered in the minutes
of the meeting or unless he shall file his written dissent to such action with
the person acting as the secretary of the meeting before the adjournment thereof
or shall forward such dissent by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
COMMITTEES OF DIRECTORS
Section 10. Appointment and Powers. The board of
directors may, by resolution passed by a majority of the whole
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board, designate one or more committees, each committee to consist of one or
more directors of the corporation. The board may designate one or more directors
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether the member or
members constitute a quorum, may unanimously appoint another member of the board
of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, shall have and may exercise all the powers
and authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the certificate of incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
bylaws of the corporation; and, unless the resolution so provides, no such
committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the board of directors.
Section 11. Minutes. Each committee shall keep regular minutes
of its meetings and report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 12. Compensation. The board of directors shall have
the authority to fix the compensation of directors. The directors may be paid
their expenses, if any, of attendance at each meeting of the board of directors
and may be paid a fixed sum for attendance at each meeting of the board of
directors or a stated salary as director. No such payments shall preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be allowed
like compensation for attending committee meetings.
ARTICLE IV
NOTICES
Section 1. Notice. Whenever, under the provisions of
statute or of the certificate of incorporation or of these bylaws,
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<PAGE>
notice is required to be given to any director or stockholder, it shall not be
construed to mean personal notice, but such notice may be given in writing, by
mail, addressed to such director or stockholder, at the stockholder's address as
it appears on the records of the corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may also be given by
telegram, telex or similar device.
Section 2. Waiver. Whenever any notice is required to be given
under the provisions of statute or of the certificate of incorporation or of
these bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. Number and Qualifications. The officers of the
corporation shall be chosen by the board of directors and shall be a chairman,
president, one or more vice-presidents, a secretary and a treasurer. The board
of directors may also choose one or more assistant secretaries and assistant
treasurers. Any number of offices may be held by the same person, unless the
certificate of incorporation or these bylaws otherwise provide.
Section 2. Election. The board of directors at its first
meeting after each annual meeting of stockholders shall choose a chairman,
president, one or more vice-presidents, a secretary and a treasurer.
Section 3. Other Officers and Agents. The board of directors
may appoint such other officers and agents as it shall deem necessary who shall
hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the board.
Section 4. Salaries. The salaries of all officers and agents
of the corporation shall be fixed by the board of directors or by the chairman,
provided that the chairman shall not fix any salary for himself or herself as an
officer or agent of the corporation.
Section 5. Term of Office. The officers of the corporation
shall hold office until their successors are chosen and qualify. Any officer
elected or appointed by the board of directors may be removed at any time by the
affirmative vote of a
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majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
THE CHAIRMAN
Section 6. Chairman. The chairman shall preside at all
meetings of the shareholders and of the board of directors and shall see that
orders and resolutions of the board of directors are carried into effect. He may
sign bonds, mortgages, certificates for shares and all other contracts and
documents whether or not under the seal of the corporation except in cases where
the signing and execution thereof shall be expressly delegated by law, by the
board of directors or by these bylaws to some other officer or agent of the
corporation. In the absence of the president (including a vacancy in such
office) or in the event of his inability or refusal to act, which inability
shall be determined by the chairman, the chairman shall perform the duties of
the principal executive officer and, when so acting, shall have all the powers
of the President.
THE PRESIDENT
Section 7. The President. The president shall be the principal
executive officer of the corporation and shall in general supervise and control
all of the business and affairs of the corporation, subject to the general
powers of the board of directors. In the absence of the chairman, he shall
preside at all meetings of the shareholders and of the board of directors. He
may sign bonds, mortgages, certificates for shares and all other contracts and
documents whether or not under seal of the corporation except in cases where the
signing and execution thereof shall be expressly delegated by the board of
directors or by these bylaws to some other officer or agent of the corporation.
In general, he shall perform all duties incident to the office of president and
such other duties as may be prescribed by the board of directors from time to
time. He shall have general powers of supervision and shall be the final arbiter
of all differences between officers of the corporation and his decision as to
any matter affecting the corporation shall be final and binding as between the
officers of the corporation subject only to the chairman and the board of
directors.
THE VICE-PRESIDENT
Section 8. The Vice-President. In the absence of the chairman
or the president or in the event of the chairman's or the president's inability
or refusal to act, the vice-president (or in the event there be more than one
vice-president, the vice-presidents in the order designated, or in the absence
of any
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designation then in the order of their election) shall perform the duties of the
president, and when so acting shall have all the powers of and be subject to all
the restrictions upon the president. The vice-president shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The Secretary. The secretary shall attend all
meetings of the board of directors and all meetings of the stockholders and
record all the proceedings of the meetings of the corporation and of the board
of directors in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give, or cause to be given,
notice of all meetings of the stockholders and special meetings of the board of
directors, and shall perform such other duties as may be prescribed by the board
of directors or president, under whose supervision the secretary shall be. The
secretary shall have custody of the corporate seal of the corporation and the
secretary, or an assistant secretary, shall have authority to affix the same to
any instrument requiring it and, when so affixed, it may be attested by the
secretary's signature or by the signature of such assistant secretary. The board
of directors may give general authority to any other officer to affix the seal
of the corporation and to attest the affixing by the secretary's signature.
Section 10. The Assistant Secretary. The assistant secretary
or, if there be more than one, the assistant secretaries in the order determined
by the board of directors (or if there be no such determination, then in the
order of their election), shall, in the absence of the secretary or in the event
of the secretary's inability or refusal to act, perform the duties and exercise
the powers of the secretary and shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURER
Section 11. The Treasurer. The treasurer shall have custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the board of
directors.
The treasurer shall disburse the funds of the corporation as
may be ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the
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board of directors, at its regular meetings, or when the board of directors so
requires, an account of all transactions as treasurer and of the financial
condition of the corporation.
If required by the board of directors, the treasurer shall
give the corporation a bond (which shall be renewed every six years) in such sum
and with such surety or sureties as shall be satisfactory to the board of
directors for the faithful performance of the duties of the office and for the
restoration to the corporation, in case of the treasurer's death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in the treasurer's possession or under the
treasurer's control belonging to the corporation.
Section 12. The Assistant Treasurer. The assistant treasurer
or, if there shall be more than one, the assistant treasurers in the order
determined by the board of directors (or if there be no such determination, then
in the order of their election), shall, in the absence of the treasurer or in
the event of the treasurer's inability or refusal to act, perform the duties and
exercise the powers of the treasurer and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Form of Certificates. Every holder of stock in the
corporation shall be entitled to have a certificate, signed by, or in the name
of the corporation by, the chairman, president or a vice-president and the
treasurer or an assistant treasurer or the secretary or an assistant secretary
of the corporation, certifying the number of shares owned by the stockholder in
the corporation. If the corporation shall be authorized to issue more than one
class of stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in ss. 202 of Title 8 of the Delaware Code, in lieu of the
foregoing requirements, there may be set forth on the face or back of the
certificate which the corporation shall issue to represent such class or series
of stock, a statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences and relative,
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participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
Section 2. Facsimile Signatures. Where a certificate is
countersigned (1) by a transfer agent other than the corporation or its
employee, or (2) by a registrar other than the corporation or its employee, any
other signature on the certificate may be facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person were an officer, transfer
agent or registrar at the date of issue.
Section 3. Lost Certificates. The board of directors may
direct that a new certificate or certificates be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen or destroyed upon the making of an affidavit of that fact
by the person claiming the certificate of stock to be lost, stolen or destroyed.
When authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 4. Transfer of Stock. Upon surrender to the
corporation or the transfer agent of the corporation of a certificate for shares
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the corporation, within a
reasonable period of time, to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Section 5. Registered Stockholders. The corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
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ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation.
Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 2. Checks. All checks or demands for money and notes
of the corporation shall be signed by such officer or officers or such other
person or persons as the board of directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the board of directors.
Section 4. Seal. The corporate seal shall have inscribed
thereon the name of the corporation and the words "Corporate Seal, Delaware."
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
ARTICLE VIII
AMENDMENTS
These bylaws may be altered, amended or repealed or new bylaws
may be adopted by the board of directors or by the stockholders at any regular
meeting of the board of directors or of the stockholders or at any special
meeting of the board of directors or of the stockholders, if in the case of such
special meeting of the stockholders notice of such alteration, amendment, repeal
or adoption of new bylaws is contained in the notice of such special meeting.
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<PAGE>
Exhibit 11
Aerial Communications, Inc. and Subsidiaries
Computation of Earnings Per Common Share
(in thousands, except per share amounts)
Three Months Ended June 30, 1997 1996
- --------------------------------------------------------------------------------
Primary Earnings
Net (Loss) $ (55,475) $ (7,206)
========= =========
Primary Shares
Weighted average number of Common and Series A
Common Shares Outstanding* 71,499 68,105
========= =========
Primary Earnings per Common Share
Net (Loss) $ (0.78) $ (0.11)
========= =========
Six Months Ended June 30, 1997 1996
- --------------------------------------------------------------------------------
Primary Earnings
Net (Loss) $ (77,815) $ (13,877)
========= =========
Primary Shares
Weighted average number of Common and Series A
Common Shares Outstanding* 71,442 63,596
========= =========
Primary Earnings per Common Share
Net (Loss) $ (1.09) $ (0.22)
========= =========
* Weighted average number of Common and Series A Common Shares Outstanding was
calculated based on the number of shares outstanding during the period
adjusted to give retroactive effect to the recapitalization in conjunction
with the Company's initial public offering, as if this transaction had
occurred at January 1, 1996.
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF AERIAL COMMUNICATIONS, INC. AS OF
JUNE 30, 1997, AND FOR THE SIX MONTHS THEN ENDED, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> $ 3,822
<SECURITIES> 1,054
<RECEIVABLES> 5,138
<ALLOWANCES> 0
<INVENTORY> 9,743
<CURRENT-ASSETS> 24,968
<PP&E> 487,260
<DEPRECIATION> 8,618
<TOTAL-ASSETS> 814,822
<CURRENT-LIABILITIES> 122,435
<BONDS> 107,804
0
0
<COMMON> 71,517
<OTHER-SE> 289,366
<TOTAL-LIABILITY-AND-EQUITY> 814,822
<SALES> 5,961
<TOTAL-REVENUES> 7,143
<CGS> 14,972
<TOTAL-COSTS> 80,390
<OTHER-EXPENSES> (975)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,018
<INCOME-PRETAX> (76,290)
<INCOME-TAX> 1,525
<INCOME-CONTINUING> (77,815)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (77,815)
<EPS-PRIMARY> (1.09)
<EPS-DILUTED> (1.09)
</TABLE>
