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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 32)*
CELLULAR COMMUNICATIONS, INC.
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(NAME OF ISSUER)
Series A Common Stock, par value $.01 per share
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(TITLE OF CLASS OF SECURITIES)
Kristina Veaco, Esq. Nathaniel M. Cartmell III, Esq.
AirTouch Communications 15091710 Pillsbury Madison & Sutro
425 Market Street -------------- P.O. Box 7880
San Francisco, CA 94105 (CUSIP NUMBER) San Francisco, CA 94120-7880
(415) 658-2088 (415) 983-1570
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS)
March 31 & April 4, 1994
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13-d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 22 pages
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SCHEDULE 13D
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CUSIP NO. 15091710
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AIRTOUCH COMMUNICATIONS
94-2995122
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [_]
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
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SOLE VOTING POWER
7
NUMBER OF 2,981,100
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
-0-
OWNED BY
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EACH SOLE DISPOSITIVE POWER
9
REPORTING 2,981,100
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0-
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,981,100
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [_]
12
N/A
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
34.5%
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TYPE OF REPORTING PERSON*
14
CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 22 pages
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Pursuant to Rule 13d-2(c) under the Securities Exchange Act of 1934, the
following restates the entire text of the Statement on Schedule 13D filed on
February 18, 1992, by PacTel Corporation (which changed its name, effective
March 10, 1994, to AirTouch Communications), as amended from time to time
thereafter, including such amendments as are necessary to reflect the events
requiring the filing of this Amendment No. 32.
Item 1. SECURITY AND ISSUER.
The class of equity securities to which this Statement relates is the
Series A Common Stock, $.01 par value (the "Series A Common Stock"), of Cellular
Communications, Inc., a Delaware corporation (the "Issuer"). The Issuer's
principal executive offices are located at 150 East 58th Street, New York, NY
10155.
Item 2. IDENTITY AND BACKGROUND.
This Statement is being filed by AirTouch Communications (formerly PacTel
Corporation), a California corporation ("AirTouch"), whose principal business is
the provision of wireless telecommunications services. AirTouch's principal
executive offices are located at 425 Market Street, San Francisco, CA 94105.
The names, business addresses, and present principal occupations/titles of
each executive officer and director of AirTouch are set forth in Appendix A
hereto, which is incorporated herein by reference. Each such person is a United
States citizen.
During the last five years neither AirTouch nor, to the best of its
knowledge, any of its executive officers or directors, has been convicted in any
criminal proceeding (excluding traffic violations or similar misdemeanors) or
has been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations
Page 3 of 22 Pages
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of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The amount of funds used to purchase the shares of Series A Common Stock
reported as beneficially owned in Item 5 hereof was approximately $103,515,700,
the source of which was working capital.
Item 4. PURPOSE OF TRANSACTION.
The Merger Agreement. AirTouch, Cellular Communications, Inc., a
predecessor of the Issuer ("Old CCI"), CCI Newco, Inc., a predecessor of the
Issuer ("New CCI"), and CCI Newco Sub, Inc. ("Newco Sub") are parties to an
Amended and Restated Agreement and Plan of Merger and Joint Venture
Organization, dated as of December 14, 1990 (the "Merger Agreement"), which is
attached hereto as Exhibit 1 and incorporated herein by reference.
In brief, the Merger Agreement provides for (i) the combination of certain
cellular telephone systems in Ohio and Michigan of Old CCI and AirTouch in a
joint venture (the "Joint Venture"), (ii) an initial investment by AirTouch in
the Issuer and a mechanism whereby AirTouch may (and under certain circumstances
is obligated to) acquire additional interests in the Issuer and (iii) an
appraisal process (the "Appraisal Process"), commencing (unless deferred) on
August 1, 1996, pursuant to which AirTouch may acquire the Issuer, including its
interest in (a) the Joint Venture or (b) the Joint Venture and any other venture
entered into by the Issuer and AirTouch (the "Second Venture") (in either case,
together with such other assets of the Issuer as it and AirTouch may agree
upon), by causing the Issuer to redeem (the "Redemption") each share of its
Redeemable Participating Convertible Preferred Stock, par value $.01 per share
(the "Redeemable Participating Preferred Stock"), and Series A Common Stock
(together with the Redeemable Participating Preferred Stock, the "Redeemable
Stock") not owned by AirTouch at a price reflecting the appraised private market
value of such assets of the Issuer, less certain adjustments to be determined.
In order to facilitate the transactions called for in the Merger Agreement,
Old CCI was merged with and into Newco Sub, a wholly-owned subsidiary of New
CCI, on August 1, 1991 (the "Closing"). After the Closing, New CCI, which by
virtue of the merger had become the publicly-traded company, changed its name to
Cellular Communications, Inc.
Formation of the Joint Venture. At the Closing, the Issuer contributed its
cellular telephone systems, located primarily in the state of Ohio, and AirTouch
contributed its cellular telephone systems in Ohio and Michigan, to the Joint
Venture, which is owned equally by the Issuer and AirTouch
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(subject to certain preferred payment adjustments). The Joint Venture was
organized and is operated in accordance with the terms of the New Par
Partnership Agreement, dated as of August 1, 1991, which is attached hereto as
Exhibit 2 and incorporated herein by reference. The Joint Venture is controlled
by a four-person partnership committee, with two members appointed by each of
the Issuer and AirTouch.
Initial Equity Purchases by AirTouch. At the Closing, AirTouch purchased
2,206,410 shares of the Issuer's Class A Preferred Stock, par value $.01 per
share (the "Class A Preferred Stock") and 25,641 shares of the Issuer's Series C
Common Stock, par value $.01 per share (the "Series C Common Stock") for a
purchase price of approximately $87,050,000. Such shares represent
approximately 5.3% of the Issuer's outstanding capital stock. Neither the Class
A Preferred Stock nor the Series C Common Stock is registered pursuant to
section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
Voting Rights of the Class A Preferred. Each share of Class A Preferred
Stock is entitled to the full voting rights and powers of the Series A Common
Stock and the Series C Common Stock (together, the "Common Stock") on an as-
converted basis. In addition, the Class A Preferred Stock has certain special
rights, described below, to elect directors of the Issuer. In no event,
however, will such special voting rights entitle AirTouch to elect a majority
of the Issuer's directors.
Subject to the limitations described below, AirTouch is entitled to elect
one director for each of the following criteria that is satisfied at such time:
(i) The number of shares of Common Stock beneficially owned by
AirTouch, assuming conversion of all then outstanding shares of preferred
stock of the Issuer then owned by AirTouch at the then applicable
conversion rate(s), represents at least 10 percent of the total number of
Fully Diluted Shares (defined below) then outstanding.
(ii)(a) The number of shares of Common Stock beneficially owned by
AirTouch, assuming conversion of all then outstanding shares of preferred
stock of the Issuer owned by AirTouch at the then applicable conversion
rate(s), represents at least 30 percent of the total number of Fully
Diluted Shares then outstanding or (b) the value of the Issuer's assets on
a consolidated basis, excluding its interest in the Joint Venture, exceeds
20 percent of the total value of its assets on a consolidated basis
(including, for this purpose, its interest in the Joint Venture).
(iii) George S. Blumenthal will have ceased to be a director or to
devote a substantial portion of his
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working time to the business and affairs of the Issuer (other than as a
result of a temporary disability lasting not in excess of six months).
(iv) J. Barclay Knapp will have ceased to be a director or to devote
a substantial portion of his working time to the business and affairs of
the Issuer (other than as a result of a temporary disability lasting not in
excess of six months).
"Fully Diluted Shares" is defined in the Merger Agreement to mean at any date
the sum of all shares of Common Stock then outstanding and all shares of Common
Stock issuable upon the exercise of all rights, options and warrants to acquire,
and upon the conversion or exchange of all outstanding securities convertible
into or exchangeable for, shares of Common Stock, whether such rights, options,
warrants or securities are outstanding or are issuable upon the exercise of
outstanding rights, options or warrants or upon the conversion or exchange of
outstanding securities, but excluding before the occurrence of a Triggering
Event (as defined in the rights agreement attached hereto as Exhibit 4) any
shares of Redeemable Stock issuable upon the exchange of rights issued pursuant
to such rights agreement.
If at any time the right to elect a director pursuant to (i) or (ii) above
arises and AirTouch elects to exercise such right, the number of directors
constituting the Board of the Issuer will automatically be increased if
necessary to permit AirTouch to exercise such right. The Issuer has the option
of deciding whether any directors added pursuant to (iii) or (iv) above will
fill vacancies or newly created directorships. The Restated Certificate of
Incorporation of the Issuer (the "Restated Charter"), which is attached hereto
as Exhibit 3 and incorporated herein by reference, provides that,
notwithstanding the foregoing, AirTouch shall not have the right to elect more
than two directors prior to the MRO (defined below).
Additional Purchases by AirTouch; Restrictions on Certain Acquisitions.
AirTouch has agreed not to acquire prior to the Redemption (or, in the event the
Redemption does not occur, the third anniversary of the date when AirTouch can
no longer cause the Redemption (the "Third Anniversary")) beneficial ownership
of shares of Redeemable Participating Preferred Stock or Common Stock pursuant
to open-market purchases or otherwise (other than in connection with the MRO or
the Appraisal Process, each as described below) if, as a result of such
acquisition, AirTouch and its affiliates would beneficially own, alone or as a
group: (i) until August 1, 1992, more than 20 percent, (ii) until October 27,
1995, more than 27.5 percent, and (iii) thereafter, more than 49 percent, of the
Fully Diluted Shares on the date of such acquisition. If (a) the MRO is fully
subscribed, (b) AirTouch exercises in full its option to purchase shares of
Series C Common Stock in connection with the MRO or (c) the Issuer commences an
open-market purchase program or otherwise reduces its outstanding
Page 6 of 22 Pages
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capital stock, AirTouch may own in excess of 49 percent of the Fully Diluted
Shares. However, as described below, AirTouch will until the Redemption (or, in
the event the Redemption does not occur, the Third Anniversary) be limited in
its ability to vote the Redeemable Participating Preferred Stock and the Common
Stock it owns.
Right to Exchange. Pursuant to the Merger Agreement, AirTouch and any
affiliate thereof has the right to request that the Issuer, and the Issuer upon
such request shall take all action necessary to, exchange all or any portion of
the shares of Redeemable Stock owned by them for an equal number of shares of
Series C Common Stock.
Permitted Acquisitions in the Event of Certain Third Party Acquisitions or
Proposals. Notwithstanding the restrictions described above, the Merger
Agreement provides that upon the earlier of (i) the date any person other than
AirTouch or any of its affiliates or associates (an "Acquiring Person") acquires
beneficial ownership of 15 percent or more of the Common Stock or (ii) the
commencement of a tender offer or exchange offer by any person (other than
AirTouch or the Issuer or any of its wholly owned subsidiaries) for which
necessary financing is committed (or, in the good faith judgment of AirTouch, is
reasonably capable of being financed) if upon consummation thereof such person
would beneficially own more than 50 percent of the shares of the Redeemable
Participating Preferred Stock and Common Stock (taken as a whole) then
outstanding, AirTouch and its affiliates may acquire in the aggregate up to 51
percent of the Fully Diluted Shares. In the event of a third party tender offer
or exchange offer described above, AirTouch may immediately commence a competing
tender offer or exchange offer but may not purchase shares pursuant to such
offer until such third party is, in AirTouch's reasonable judgment, legally
capable of purchasing shares pursuant to such third party offer.
Preemptive Rights. The Merger Agreement further provides that until
the date AirTouch loses the right to cause the redemption (the "Back End
Termination Date"), AirTouch will (except in connection with certain specified
transactions) have preemptive rights with respect to any issuance of shares of
Series A Common Stock, Redeemable Participating Preferred Stock or securities
convertible or exchangeable into, or exercisable for, Series A Common Stock.
Antitrust Regulation. Certain acquisition transactions may not be
consummated until certain information has been filed with the Federal Trade
Commission and the Department of Justice (the "Agencies") pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), and certain waiting period requirements thereunder have
been satisfied. AirTouch and the Issuer may be required to file with
the Agencies such information under the HSR Act if the acquisition of
additional voting securities by AirTouch would result in
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AirTouch's holding 25 percent or more of the outstanding voting securities of
the Issuer.
Rights Agreement. The Issuer has adopted a rights agreement, which is
attached hereto as Exhibit 4 and incorporated herein by reference, that would be
triggered upon the acquisition by an Acquiring Person of beneficial ownership of
15 percent or more of the outstanding Redeemable Participating Preferred Stock
and Common Stock (taken as a whole). The Rights Agreement would provide to
stockholders of the Issuer (other than the Acquiring Person) rights to purchase
at a discount shares of the Issuer's Series D Junior Participating Preferred
Stock, par value $1.00 per share. Such rights are not redeemable prior to the
end of the Appraisal Process unless the Rights Agreement is amended to provide
otherwise with the concurrence of AirTouch and the approval of holders of a
majority of the shares of Redeemable Participating Preferred Stock and Common
Stock (other than AirTouch), voting together as a single class.
Certain Standstill Agreements of AirTouch; Voting. Pursuant to the
Merger Agreement, until the Redemption (or in the event the Redemption does not
occur, the Third Anniversary), except as otherwise contemplated by the Merger
Agreement, AirTouch and its affiliates will not (i) acquire any securities or
properties of the Issuer or any of its successors or subsidiaries; (ii) solicit
proxies or consents or become a "participant" in a "solicitation" (as such terms
are defined in Regulation 14A of the Exchange Act) with respect to securities of
the Issuer or any of its successors or subsidiaries or initiate any stockholder
proposal with respect to the Issuer or any of its successors or subsidiaries;
(iii) take any action for the purpose of convening a stockholders' meeting of
the Issuer or any of its successors or subsidiaries; (iv) make any proposal or
public announcement relating to a tender or exchange offer for securities of the
Issuer or any of its successors or subsidiaries or a merger, business
combination, sale of assets, liquidation or other extraordinary corporate
transaction relating to the Issuer and any of its successors or its
subsidiaries; (v) form or participate in a "group" (within the meaning of
Section 13(d)(3) of the Exchange Act) for the purpose of acquiring, holding,
voting or disposing of securities of Issuer or any of its successors or
subsidiaries or taking any other actions restricted under clauses (i) through
(iv) above; (vi) enter into any discussions or understandings with any third
party with respect to any of the foregoing; (vii) disclose any intention, plan
or arrangement inconsistent with the foregoing; or (viii) advise, assist or
encourage any other person in connection with the foregoing; provided, however,
that the foregoing is not deemed to apply to (a) any director of the Issuer
nominated or appointed by AirTouch acting in his or her capacity as such or (b)
the activities of the Joint Venture or the Second Venture or of AirTouch in
connection with the management of the Joint Venture or the Second Venture.
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Pursuant to the Merger Agreement, until the Redemption (or, in the event
the Redemption does not occur, the Third Anniversary), AirTouch will vote the
Redeemable Participating Preferred Stock and Common Stock owned by it in the
same proportion as the shares of Redeemable Participating Preferred Stock and
Common Stock, excluding Redeemable Participating Preferred Stock and Common
Stock held by any Acquiring Person; provided, however, that with respect to the
election of directors, it may vote at its option for directors nominated by the
Board of the Issuer. Notwithstanding the preceding sentence, until the Back End
Termination Date, with respect to any matter submitted to a stockholder vote
that relates to and is inconsistent with, among other things, the MRO, the
Appraisal Process, AirTouch's permitted acquisitions of additional shares of the
Issuer's capital stock, or the restrictions agreed to by the Issuer with respect
to certain of its activities, AirTouch may vote against such matter, but may not
vote to reduce its obligations with respect thereto.
In the event that within one year after the Back End Termination Date,
a third party makes a tender offer for capital stock of the Issuer, AirTouch
will cause to be tendered therein all shares of Redeemable Participating
Preferred Stock and Common Stock owned by it in the same proportion as shares of
Redeemable Participating Preferred Stock and Common Stock (other than AirTouch),
except that AirTouch may also cause such shares of Redeemable Participating
Preferred Stock and Common Stock to be withdrawn at any time that such other
stockholders have a right to withdraw such shares, in the same proportion as
shares of Redeemable Participating Preferred Stock and Common Stock (taken as a
whole) withdrawn by such stockholders.
Registration Rights. Pursuant to the Merger Agreement, the Issuer has
agreed that after the expiration of certain time periods (not to exceed two
years) following the Back End Termination Date (the exact time to be determined
in accordance with the Merger Agreement) and upon the request of AirTouch and
subject to certain conditions, to file a registration statement (the "Post-
Closing Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act") as to the number of shares of Common Stock then held by
AirTouch or its affiliates specified in such request (the "Registered Shares").
The Issuer is not required to file more than three Post-Closing Registration
Statements that become effective and remain effective for a period (up to three
months) sufficient to complete the distribution of the Registered Shares. The
Merger Agreement further requires the Issuer to supplement or amend any Post-
Closing Registration Statement as required by (i) the registration form
utilized by the Issuer for such registration, (ii) the Securities Act or the
rules or regulations thereunder or (iii) AirTouch (or any underwriter for
AirTouch) with respect to the Registered Shares. The Issuer shall bear the
expenses of such registrations, except for filing fees and certain expenses of
AirTouch.
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The MRO. At the close of business on October 27, 1995 (the "MRO
Date"), the Issuer will offer to redeem (the "MRO") up to 10.04 million shares,
as adjusted (the "MRO Amount"), of the Redeemable Stock (with priority to be
given to the Redeemable Participating Preferred Stock) at $60 per share, as
adjusted (the "Mandatory Redemption Price"). In connection with the MRO,
AirTouch is obligated to purchase for the Mandatory Redemption Price a number of
newly issued shares of Series C Common Stock equal to the number of shares of
Redeemable Stock redeemed by the Issuer in the MRO or repurchased by the Issuer
in connection with the arrangements described below regarding certain Option
Shares (defined below). Pursuant to the Restated Charter and the Merger
Agreement, to the extent that any date or time period provided for in such
documents in connection with the MRO and related transactions involving
securities of the Issuer does not comply with Rule 13e-4 under the Exchange Act
(or any applicable successor regulation) ("Rule 13e-4"), such date or time
period shall be deemed to be the earliest practicable date or minimum
practicable time period that complies with Rule 13e-4.
AirTouch Purchase Right. In connection with the MRO, AirTouch has the
right (but is not obligated) to purchase for the Mandatory Redemption Price up
to 10.04 million of newly issued shares of Series C Common Stock (less the
number of shares of Redeemable Stock actually redeemed in the MRO).
Treatment of Certain Employee Replacement Options and Option Shares. In
connection with the MRO, the Issuer is obligated, to the extent requested by the
holders thereof, to cancel certain options held by directors, officers and
employees of the Issuer ("Employee Replacement Options") and repurchase certain
shares of Redeemable Participating Preferred Stock or Series A Common Stock (the
"Option Shares") (together covering in the aggregate approximately 2.4 million
shares of the Redeemable Stock) issued upon exercise of such options. Each
Employee Replacement Option will be canceled in exchange for a payment of the
Mandatory Redemption Price less the applicable exercise price for each share
subject to such option, and each Option Share will be repurchased for the
Mandatory Redemption Price. Unless the beneficiary of this payment provides a
notice to the Issuer by December 1, 1994 requesting that the repurchase date be
the MRO Date, the repurchase date will be January 4, 1996. AirTouch is obligated
to purchase from the Issuer, for an amount equal to the aggregate consideration
paid by the Issuer upon cancelation of such employee options, an option or
options exercisable for that number of shares of Series C Common Stock equal to
the number of shares subject to the canceled Employee Replacement Options. The
exercise price per share of the AirTouch options will be the weighted average
exercise price per share of the corresponding canceled options. Pursuant to the
Merger Agreement and certain amendments to individual stock option agreements
and stock option plans made prior to the Closing, to the extent that any date or
time period provided for in such documents relating to the cancelation of the
Employee Replacement Options in connection with the
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MRO does not comply with Rule 13e-4, such date or time period shall be deemed to
be the earliest practicable date or minimum practicable time period that
complies with Rule 13e-4. Under presently existing Exchange Act regulations,
cancelation of the Employee Replacement Options can occur no earlier than 10
business days (as defined in Rule 13e-4) following the date the Redeemable Stock
is actually redeemed in the MRO.
Appraisal Process. The Appraisal Process will commence on August 1,
1996 (unless deferred for six months by the Issuer). Pursuant to the Appraisal
Process, AirTouch has the right, by causing the Redemption, to acquire the
Issuer, including its interest in (i) the Joint Venture or (ii) the Joint
Venture and the Second Venture (together in either case with such other
businesses or assets of the Issuer as AirTouch and the Issuer may agree upon
(the "Other Assets")), at a price reflecting the appraised private market value
of such acquired interests determined in accordance with the Merger Agreement.
AirTouch will finance the Redemption by providing to the Issuer any necessary
funds. The price to be paid in the Redemption will be subject to reduction for
certain adjustments.
In the event that any Other Assets are retained, the Redemption price
per share will be increased by an amount based upon the appraised private market
value of such Other Assets retained. Any Other Assets not mutually agreed to be
retained will be sold. The net proceeds from such sale remaining after
reduction for the Issuer's costs, expenses, appropriate escrows and taxes
relating to the sale will be distributed to the Issuer's stockholders.
AirTouch has the opportunity to evaluate up to three different
appraisal values during the Appraisal Process prior to determining whether to
cause a Redemption. In the event AirTouch rejects the first two appraisals and
thereafter elects to cause a Redemption in the third appraisal, the Redemption
price will be increased by two percent. The final appraisal may commence
between five and six and one-half years following the Closing.
AirTouch Make Whole Obligation. In the event that AirTouch does not
exercise its right to cause the Redemption, the Issuer is obligated to promptly
commence a process to sell itself (and, under certain circumstances, AirTouch's
interest in the Joint Venture). In the alternative, the Issuer has the right to
purchase AirTouch's interest in the Issuer (or the Issuer and the Joint Venture,
as the case may be) at a price based upon their appraised values determined in
accordance with the Merger Agreement. The Issuer may not exercise such right
to purchase, or elect not to accept certain bids resulting from the sales
process described below, if the effect in either case would be to release
AirTouch from its Make Whole Obligation (defined below), without the approval of
the holders (other than AirTouch) of a majority of the outstanding shares of
Common Stock and Redeemable Participating Preferred Stock voting together as a
class.
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If the Issuer or its interest in the Joint Venture (or, if the Joint
Venture has been dissolved, the Joint Venture assets) is sold pursuant to a
Qualifying Third Party Sale (i.e., a sale within certain specified time periods
not to exceed two years) for a Third Party Price Per Share less than the Gross
Make Whole Price Per Share (an amount which is based upon the appraised private
market value of the Issuer's interest in the Joint Venture), AirTouch is
obligated to pay to each stockholder of the Issuer other than AirTouch (the
"Make Whole Obligation") a specified percentage of such shortfall (which
percentage decreases at specified thresholds as such shortfall increases). The
Make Whole Obligation will be reduced by a Total Per Share Adjustment. In the
event the Total Per Share Adjustment exceeds the Make Whole Obligation, the
Issuer is obligated to pay to AirTouch an amount (the "AirTouch Payment") equal
to the aggregate of such excess amounts (increased to compensate AirTouch for
the portion of any such payment indirectly borne by it as a stockholder of the
Issuer). The AirTouch Payment would be made by the Issuer to AirTouch
subsequent to the sale of the Issuer and the receipt of the proceeds therefrom
by the stockholders of the Issuer or the sale of the Issuer's interest in the
Joint Venture (or, if the Joint Venture has been dissolved, the Joint Venture
assets) and the receipt of the proceeds therefrom by the Issuer. If a third
party sale is not consummated upon certain conditions and within certain
specified time periods, the Make Whole Obligation will terminate.
Certain Required Asset Sales; Other Adjustments. In the event that
AirTouch does not cause the Redemption, the Issuer is obligated, no later than
one year after AirTouch loses its right to cause the Redemption, to sell
promptly all of its assets (other than its interest in the Joint Venture). Such
a sale may be in conjunction with a Qualifying Third Party Sale. In connection
with a sale of the Issuer (or its interest in the Joint Venture) other than a
Qualifying Third Party Sale, the Issuer is obligated to pay AirTouch (the "Other
Sale Payment") an amount equal to the aggregate Total Per Share Adjustment
(increased to compensate AirTouch for the portion of any such payment indirectly
borne by it as a stockholder of the Issuer). Such payment obligation continues
regardless of when such a sale is made, whether the Make Whole Obligation has
expired or whether AirTouch has ceased to hold an ownership interest in the
Issuer or the Joint Venture. The Other Sale Payment would be made by the Issuer
subsequent to the sale of the Issuer and the receipt of the proceeds therefrom
by the Issuer's stockholders or the sale of the Issuer's interest in the Joint
Venture (or, if the Joint Venture has been dissolved, the Joint Venture assets)
and the receipt of the proceeds therefrom by the Issuer.
On December 11, 1992, Pacific Telesis Group ("Telesis") and AirTouch
entered into a Termination Agreement (the "Termination Agreement") with the
Issuer and Old CCI. The Termination Agreement, including all exhibits thereto,
is attached hereto as Exhibit 5 and is incorporated herein by reference. The
Page 12 of 22 Pages
<PAGE>
following discussion is qualified in its entirety by reference to the
Termination Agreement and such exhibits.
The Termination Agreement provides, among other things, (i) for the
termination (effective upon the satisfaction of certain conditions) of all of
Telesis' obligations under a letter of responsibility dated as of December 14,
1990 (executed and delivered December 21, 1990) that Telesis entered into in
connection with the Merger Agreement and (ii) for substitute credit assurance
for AirTouch's obligations to the Issuer in connection with the MRO, the Make
Whole Obligation and the obligation described in the following sentence. Under
the Termination Agreement, AirTouch and the Issuer have agreed that AirTouch in
certain instances will have an additional make whole obligation should AirTouch
determine not to exercise its right to cause the Redemption and a Qualifying
Third Party Sale is consummated at a price less than AirTouch would have been
required to pay.
In addition, under the Termination Agreement, AirTouch has the right
to exchange each share of the Issuer's Class A Preferred Stock that it currently
owns for one share of the Issuer's Class A Preference Stock, $1 par value per
share (the "Class A Preference Stock"), to be authorized and issued pursuant to
Section 7 of the Termination Agreement. Such right will be exercisable at any
time after the filing by the Issuer with the Delaware Secretary of State of a
certificate of designation, in the form attached as Exhibit C to the Termination
Agreement (the "Certificate of Designation"), designating the powers, rights and
preferences of the Class A Preferred Stock, which will be substantially similar
to those of the Class A Preferred Stock. The Class A Preference Stock will not
be registered pursuant to section 12 of the Exchange Act.
AirTouch has also agreed, subject to certain conditions, to waive
certain provisions of the Merger Agreement and the Restated Charter to permit
the Issuer to own, operate, manage or maintain a wireless communications
business solely in Puerto Rico (a "PRCo"). In the event that, prior to the
issuance to AirTouch of shares of Class A Preference Stock, the Issuer issues
any PRCo Acquisition Shares (as defined in the Certificate of Designation), the
Issuer has agreed under the Termination Agreement that, to the extent AirTouch
would not be entitled, if the PRCo Acquisition Shares were included in the
calculation of Fully Diluted Shares, to elect the number of directors that it
would be entitled to elect as a holder of Class A Preferred Shares if such PRCo
Acquisition Shares were not included in Fully Diluted Shares (the director or
directors so affected being referred to as the "Affected Directors"), it will
(a) cause its directors to exercise all authority under applicable law to
appoint to its board persons designated by AirTouch equal in number to the
number of Affected Directors and (b) use its best efforts to secure the election
of AirTouch's designees at each annual meeting of the Issuer's stockholders.
Similarly, the provisions in the Certificate of
Page 13 of 22 Pages
<PAGE>
Designation relating to special rights of holders of Class A Preference Stock to
elect directors based on percentage ownership of the Issuer's capital stock
exclude PRCo Acquisition Shares from the calculation of Fully Diluted Shares.
The descriptions of the transactions contemplated by, and the
provisions of, the Merger Agreement and the other agreements or documents
referred to in this Item 4 are qualified in their entirety by reference to such
agreements or documents, which are attached as exhibits hereto and incorporated
herein by reference. For a fuller description of the matters discussed in this
Item 4, reference is made to the complete Proxy Statement/ Prospectus of the
Issuer relating to the transactions contemplated by the Merger Agreement, which
was filed with the Securities and Exchange Commission on December 28, 1990
(SEC File No. 0-14882).
* * *
AirTouch's purpose in acquiring the shares of Series A Common Stock
reported as beneficially owned in Item 5 of this Statement is to take advantage
of its right to acquire Series A Common Stock in the open market or otherwise in
accordance with the provisions of the Merger Agreement, prior to the maturation
of any rights or obligations to acquire or make payments in respect to
Redeemable Stock pursuant to the MRO or the Appraisal Process. As previously
discussed, additional purchases of Series A Common Stock will, upon the
attainment of specified ownership thresholds, entitle AirTouch to elect a second
director to the Issuer's board.
Subject to the factors discussed below, AirTouch expects that it may
purchase from time to time additional shares of Series A Common Stock, through
the open market, in privately negotiated transactions or otherwise. Any such
purchases may be discontinued at any time, possibly for extended periods of
time, and once discontinued may thereafter recommence. The amount and timing
of any such additional purchases will depend upon AirTouch's evaluation of the
market for the Series A Common Stock, the Issuer's business, prospects and
financial condition, other investment opportunities available to AirTouch,
prospects for AirTouch's own business, general economic conditions, money and
stock market conditions and other developments as well as AirTouch's rights and
obligations under the Merger Agreement. Depending on the same factors, AirTouch
may decide to sell all or part of the shares, although it has no current
intention to do so.
Except as set forth in this Item 4, neither AirTouch nor, to the best of
its knowledge, any of its executive officers or directors, has any plans or
proposals with respect to the Issuer (although each reserves the right to
develop such plans or proposals, subject to AirTouch's obligations under the
Merger Agreement) that relate to or would result in any of the actions specified
in clauses (a) through (j) of Item 4 of Schedule 13D.
* * *
Pages 14 of 22 Pages
<PAGE>
On September 17, 1992, AirTouch executed a written consent electing its
President and Chief Executive Officer, C. L. Cox, to the board of directors of
the Issuer effective as of September 28, 1992. In doing so, AirTouch exercised
its right under the Restated Charter, as sole holder of Class A Preferred Stock,
to elect one director upon attaining beneficial ownership of Common Stock
representing at least 10% of the total number of Fully Diluted Shares then
outstanding. The Restated Charter provides that the size of the board of
directors of the Issuer will increase automatically to permit the election of
Mr. Cox.
On September 16, 1993, AirTouch exchanged its shares of the Issuer's
Class A Preferred Stock for an equal number of shares of the Issuer's Class A
Preference Stock. Such exchange was effected pursuant to AirTouch's rights
under the Termination Agreement. In connection with the exchange, and pursuant
to its rights under the Certificate of Designation, AirTouch executed a written
consent electing Mr. Cox to the board of directors of the Issuer effective on
September 16, 1993.
On March 30, 1994, in satisfaction of certain provisions of the Termination
Agreement, AirTouch provided to the Issuer the substitute credit assurance
called for by the Termination Agreement, consisting of (i) an irrevocable letter
of credit for the benefit of the Issuer in the amount of $600 million and (ii) a
pledge to the Issuer of all but 30,000 of the outstanding Class A Preference
Stock and all of the Common Stock then owned by AirTouch and any such shares
acquired thereafter up to an number of shares so pledged that represents 15% of
the Fully Diluted Shares then outstanding. Concurrent with the satisfaction of
the conditions set forth in the Termination Agreement, Telesis' obligations
under its December 14, 1990 letter of responsibility terminated.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of April 4, 1994, AirTouch owned 2,981,100 shares of Series A
Common Stock. According to the Issuer's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993, the number of shares of Series A Common
Stock outstanding as of March 21, 1994 was 8,643,260. Based on such
information, the 2,981,100 shares of Series A Common Stock beneficially owned by
AirTouch represent approximately 34.5% of the class. See the Note below. Such
shares represent approximately 7.0% of the Issuer's outstanding capital stock.
Neither AirTouch nor, to the best of its knowledge, any executive officer or
director of AirTouch, beneficially owns any shares of Series A Common Stock.
In addition to the shares of Series A Common Stock as to which
beneficial ownership is being reported herein, AirTouch owns shares of other
classes of securities of the Issuer, which classes are not registered under
section 12 of the Exchange Act. See Item 4 of this Statement.
Note: Pursuant to the Restated Charter, a change in beneficial
ownership after January 28, 1992 of shares of Redeemable Participating Preferred
Stock results in the automatic conversion, as of immediately prior to such
change, of such shares into shares of Series A Common Stock. As a result,
although the number of shares of Series A Common Stock outstanding is likely to
increase automatically over time, the amounts of such increases are neither
predictable nor presently ascertainable by AirTouch, since changes in beneficial
ownership can occur other than through trades (whether public or private) or
other changes in record ownership. Similarly, absent purchases of Series A
Common Stock by AirTouch that offset such automatic increases, AirTouch's
percentage beneficial ownership of shares of Series A Common Stock
Page 15 of 22 Pages
<PAGE>
is likely to decrease, although the exact amounts of such decreases cannot be
predicted.
(b) AirTouch has the sole power to vote or to direct the vote and the
sole power to dispose of, or to direct the disposition of, the Shares.
(c) On February 7, 1992, AirTouch purchased 275,000 shares of Series A
Common Stock in an over-the-counter transaction at a price per share
of $35-1/8. Since then, AirTouch has purchased an aggregate of 2,706,100
shares of Series A Common Stock in over-the-counter and privately
negotiated transactions at the following prices per share:
<TABLE>
<CAPTION>
Price per share (excluding
Date Number of Shares brokerage commissions)
- ---- ---------------- --------------------------
<S> <C> <C>
February 28, 1992 8,000 $ 32.875
1,000 $ 33.00
2,000 $ 33.25
2,000 $ 33.50
45,000 $ 33.4375
March 3, 1992 12,000 $ 34.25
40,000 $ 34.375
March 4, 1992 5,000 $ 35.00
March 5, 1992 5,000 $ 35.00
5,000 $ 35.125
10,000 $ 35.25
March 6, 1992 33,000 $ 35.125
March 11, 1992 100,000 $ 35.875
March 12, 1992 25,000 $ 35.875
March 13, 1992 20,000 $ 35.875
March 17, 1992 20,000 $ 35.875
March 19, 1992 8,000 $ 35.875
March 20, 1992 40,000 $ 35.50
March 23, 1992 15,000 $ 35.375
45,000 $ 35.25
March 24, 1992 25,000 $ 35.25
15,000 $ 35.125
March 25, 1992 30,000 $ 35.25
</TABLE>
Page 16 of 22 Pages
<PAGE>
<TABLE>
<S> <C> <C>
March 26, 1992 8,000 $ 35.25
March 30, 1992 10,000 $ 35.25
April 2, 1992 20,000 $ 35.375
April 7, 1992 63,000 $ 35.25
April 10, 1992 15,000 $ 34.875
35,000 $ 35.00
April 13, 1992 5,000 $ 34.875
April 14, 1992 40,000 $ 34.875
April 15, 1992 25,000 $ 34.75
April 20, 1992 10,000 $ 34.75
April 29, 1992 9,000 $ 34.00
April 30, 1992 10,000 $ 34.50
May 7, 1992 5,000 $ 35.125
May 8, 1992 37,000 $ 34.875
May 11, 1992 10,000 $ 35.00
May 12, 1992 50,000 $ 35.375
May 14, 1992 35,000 $ 35.375
May 15, 1992 30,000 $ 35.25
May 19, 1992 15,000 $ 35.25
May 20, 1992 60,000 $ 35.375
May 22, 1992 24,000 $ 35.375
May 26, 1992 25,000 $ 35.375
May 28, 1992 300,000 $ 34.875
10,000 $ 35.25
May 29, 1992 10,000 $ 34.875
June 1, 1992 10,000 $ 34.875
June 4, 1992 100,000 $ 34.625
100,000 $ 34.50
</TABLE>
Page 17 of 22 Pages
<PAGE>
<TABLE>
<S> <C> <C>
June 9, 1992 125,000 $ 34.00
June 10, 1992 50,000 $ 33.625
June 12, 1992 3,500 $ 33.00
June 17, 1992 23,000 $ 33.00
June 18, 1992 5,000 $ 33.00
June 19, 1992 10,000 $ 33.1875
4,000 $ 33.00
June 22, 1992 85,000 $ 33.0625
62,900 $ 33.00
June 25, 1992 5,000 $ 33.25
June 26, 1992 31,000 $ 33.4375
July 1, 1992 19,000 $ 33.3125
5,000 $ 33.25
July 7, 1992 10,700 $ 34.0625
12,000 $ 33.875
July 8, 1992 100,000 $ 34.0625
July 13, 1992 5,000 $ 34.00
July 14, 1992 40,000 $ 34.00
July 17, 1992 5,000 $ 34.00
July 20, 1992 10,000 $ 34.00
July 21, 1992 30,000 $ 34.125
12,000 $ 34.00
July 22, 1992 50,000 $ 34.00
July 24, 1992 10,000 $ 34.00
July 27, 1992 10,000 $ 34.00
July 28, 1992 10,000 $ 34.00
July 29, 1992 49,000 $ 34.50
August 12, 1992 10,000 $ 36.0625
20,000 $ 36.00
January 29, 1993 6,000 $ 31.875
</TABLE>
Page 18 of 22 Pages
<PAGE>
<TABLE>
<S> <C> <C>
February 1, 1993 9,000 $ 31.96
4,000 $ 32.50
February 2, 1993 2,200 $ 33.00
14,000 $ 33.125
5,600 $ 33.50
7,000 $ 33.75
February 5, 1993 10,000 $ 34.25
February 8, 1993 17,000 $ 34.375
February 9, 1993 23,000 $ 34.3125
February 12, 1993 20,000 $ 34.875
March 3, 1993 14,000 $ 34.8125
March 5, 1993 11,000 $ 34.75
January 19, 1994 10,000 $ 44.078
January 24, 1994 5,000 $ 44.25
January 26, 1994 2,500 $ 44.50
February 4, 1994 10,000 $ 44.50
February 8, 1994 3,700 $ 44.50
February 16, 1994 2,000 $ 44.75
March 14, 1994 5,000 $ 44.75
March 31, 1994 119,000 $ 44.50
April 4, 1994 12,000 $ 44.50
</TABLE>
(d) No person other than AirTouch has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
Shares.
(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
See Item 4 above.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Amended and Restated Agreement and Plan of Merger and Joint
Venture Organization by and among AirTouch, Old CCI, New CCI and Newco Sub,
dated as of December 14, 1990.*
2. New Par Partnership Agreement, dated as of August 1, 1991.*
3. Restated Certificate of Incorporation of the Issuer, filed with
the Secretary of State of the State of Delaware on August 1, 1991.*
4. Rights Agreement, dated as of July 31, 1991, between New CCI,
AirTouch, and Continental Stock Transfer & Trust Company.*
5. Termination Agreement, dated as of December 11, 1992, by and
among Telesis, AirTouch, the Issuer and Old CCI (including all exhibits).*
* Previously filed.
Page 19 of 22 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
AIRTOUCH COMMUNICATIONS
By: /s/ C. L. Cox
------------------------------
C. L. Cox
President and
Chief Operating Officer
Dated: April 6, 1994
Page 20 of 22 Pages
<PAGE>
Appendix A
AIRTOUCH COMMUNICATIONS
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Present Principal
Name Business Address Occupation/Title
- ---- ---------------- -----------------
<S> <C> <C>
Sam Ginn AirTouch Communications Chairman and Chief
425 Market Street Executive Officer
San Francisco, CA 94105
C. Lee Cox AirTouch Communications President and Chief
425 Market Street Operating Officer
San Francisco, CA 94105
Lydell L. Christensen AirTouch Communications Executive Vice
425 Market Street President and Chief
San Francisco, CA 94105 Financial Officer
Margaret G. Gill AirTouch Communications Senior Vice
425 Market Street President, Legal and
San Francisco, CA 94105 External Affairs and
Secretary
Arun Sarin AirTouch Communications Senior Vice
425 Market Street President, Corporate
San Francisco, CA 94105 Strategy/Development
and Human Resources
F. Craig Farrill AirTouch Communications Vice President,
2999 Oak Road Technology, Planning
Walnut Creek, CA 94596 and Development
Mohan S. Gyani AirTouch Communications Vice President,
425 Market Street Finance and
San Francisco, CA 94105 Treasurer
George F. Schmitt AirTouch International Vice President,
2999 Oak Road International
Walnut Creek, CA 94596 Operations
Susan G. Swenson Bay Area Cellular Telephone Vice President
Company
651 Gateway Boulevard
South San Francisco, CA 94080
Paul H. White AirTouch Communications General Counsel
2999 Oak Road
Walnut Creek, CA 94596
Charlie E. Jackson AirTouch Paging President and Chief
12221 Merit Drive Executive Officer,
Dallas, TX 75251 AirTouch Paging
John R. Lister PacTel Teletrac President and Co-
9800 La Cienega Blvd. Chief Executive
Inglewood, CA 90301 Officer, PacTel
Teletrac
Jan K. Neels AirTouch International President and Chief
2999 Oak Road Executive Officer,
Walnut Creek, CA 94596 AirTouch
International
</TABLE>
Page 21 of 22 Pages
<PAGE>
AIRTOUCH COMMUNICATIONS
DIRECTORS
<TABLE>
<CAPTION>
Present Principal
Name Business Address Occupation/Title
- ---- ---------------- ----------------
<S> <C> <C>
Sam Ginn AirTouch Communications Chairman and Chief
425 Market Street Executive Officer
San Francisco, CA 94105
C. Lee Cox AirTouch Communications President and Chief
425 Market Street Operating Officer
San Francisco, CA 94105
Carol A. Bartz Autodesk, Inc. Chairman, President
2320 Marinship Way and Chief Executive
Sausalito, CA 94965 Officer
Donald G. Fisher The Gap, Inc. Chairman and Chief
One Harrison Street Executive Officer
San Francisco, CA 94105
James R. Harvey Transamerica Corporation Chairman
600 Montgomery Street
San Francisco, CA 94111
Paul Hazen Wells Fargo and Company President and Chief
420 Montgomery Street Operating Officer
San Francisco, CA 94163
Arthur Rock Arthur Rock & Co. Principal
One Maritime Plaza, Suite 1220
San Francisco, CA 94111
Charles R. Schwab Charles Schwab & Co. Chairman
101 Montgomery Street, 28th
Floor
San Francisco, CA 94104
George P. Shultz The Hoover Institution Professor and
Stanford University Distinguished Fellow
Palo Alto, CA 94305
</TABLE>
Page 22 of 22 Pages
