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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
(Name of Subject Company)
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
150918 10 0
(CUSIP Number of Class of Securities)
Richard J. Lubasch, Esq.
Senior Vice President, General Counsel and Secretary
Cellular Communications International, Inc.
110 East 59(th) Street
New York, NY 10022
(212) 906-8440
(Name, address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement).
With Copies to:
Thomas H. Kennedy, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Cellular Communications International,
Inc., a Delaware corporation (the "Company"), and the address of the principal
executive offices of the Company is 110 East 59(th) Street, New York, New York
10022. The title of the class of equity securities to which this Statement
relates is the Common Stock, par value $.01 per share, of the Company (the
"Shares"), including the Preferred Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement (the "Rights Agreement") dated as of November
8, 1990, between the Company and Continental Stock Transfer & Trust Company, as
Rights Agent.
ITEM 2. TENDER OFFER OF THE PURCHASER.
This Statement relates to the tender offer by a Delaware corporation,
Kensington Acquisition Sub, Inc. (the "Purchaser") disclosed in a Tender Offer
Statement on Schedule 14D-1 dated December 17, 1998 (the "Schedule 14D-1"), to
purchase all of the outstanding Shares, together with the associated Rights, at
$65.75 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated December 17, 1998 (the
"Offer to Purchase"), and the related Letter of Transmittal (which together
constitute the "Offer").
Purchaser was formed solely to effect the Offer and is owned as to 50% of
its outstanding stock by Olivetti S.p.A., a limited liability company organized
under the laws of Italy ("Olivetti"), and as to 50% of its outstanding capital
stock by Mannesmann AG, a limited liability company organized under the laws of
Germany ("Mannesmann"). Both Olivetti and Mannesmann are party to the joint
venture OliMan Holding B.V. (the "Parent").
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of December 11, 1998 (the "Merger Agreement"), between Purchaser and the
Company. The Merger Agreement provides, among other things, for the making of
the Offer by the Purchaser and further provides that, upon the terms and subject
to the conditions contained in the Merger Agreement, the Purchaser will merge
with and into the Company (the "Merger," and together with the Offer, the
"Transaction") as soon as practicable after the consummation of the Offer.
Following consummation of the Merger (the "Effective Time"), the Company will
continue as the surviving corporation (the "Surviving Corporation"). In the
Merger, each Share issued and outstanding immediately prior to the Effective
Time (other than Shares owned by the Purchaser or any subsidiary of the
Purchaser or held in the treasury of the Company, all of which will be
cancelled, and other than Shares held by stockholders who perfect appraisal
rights under Delaware law) will be converted into the right to receive the per
Share consideration in the Offer, without interest (the "Merger Consideration").
A copy of the Merger Agreement is attached hereto as Exhibit 1 and incorporated
herein by reference.
As a condition and inducement to Purchaser entering into the Merger
Agreement, concurrently with the execution and delivery of the Merger Agreement,
Purchaser and the Company have entered into an Option Agreement, dated as of
December 11, 1998 (the "Option Agreement"), pursuant to which, among other
things, the Company has granted Purchaser an irrevocable option to purchase up
to 4,338,133 newly issued Shares at $65.75 per share (the "Company Option"). The
Company Option only can be exercised under certain circumstances described
herein. See "Arrangements with the Purchaser or its Affiliates-- OPTION
AGREEMENT."
As a condition and inducement to Purchaser entering into the Merger
Agreement, concurrently with the execution and delivery of the Merger Agreement,
Purchaser has entered into a Stockholders Agreement, dated as of December 11,
1998 (the "Stockholders Agreement"), with the Company and certain stockholders
of the Company who beneficially own 2,360,241 Shares in the aggregate, including
Shares issuable upon the exercise of Options. Pursuant to the Stockholders
Agreement, such stockholders have agreed, among other things, to tender validly
pursuant to the Offer all Shares owned by them, representing approximately 4.8%
of the outstanding Shares (approximately 11.7%, assuming exercise of all Options
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beneficially owned by them). See "Arrangements with the Purchaser or its
Affiliates--Stockholders Agreement."
As a condition and inducement to Purchaser entering into the Merger
Agreement, concurrently with the execution and delivery of the Merger Agreement,
Olivetti, Mannesmann and the Company have entered into a Guarantee, dated as of
December 11, 1998 (the "Guarantee"), pursuant to which, among other things,
Olivetti and Mannesmann have agreed jointly and severally to guarantee
unconditionally and irrevocably, for the benefit of the Company, the performance
of certain obligations of Purchaser pursuant to the Merger Agreement including
its obligation to purchase Shares. Olivetti and Mannesmann have represented in
the Guarantee that they have funds available to them sufficient to purchase, or
cause to be purchased, the Shares in accordance with the terms of the Merger
Agreement.
The Offer to Purchase states that the principal executive offices of the
Purchaser are located at
c/o Olivetti S.p.A., Via Jervis 77, 10015 Ivrea, Turin, Italy and c/o Mannesmann
AG, Mannesmannufer 2, 40213 Dusseldorf, Germany. The telephone numbers of
Purchaser at such locations are 39-125-52-0000 and 49-211-820-2400,
respectively.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and business address of the Company, which is the person filing
this Statement, are set forth in Item 1 above.
(b)(1) Certain contracts, agreements, arrangements and understandings
between the Company or its affiliates and certain of its executive officers,
directors or affiliates are described under the headings "Executive
Compensation" and "Election of Directors--Compensation of Directors" at pages 4
to 12 of the Company's Proxy Statement dated June 30, 1998 for its 1998 Annual
Meeting of Stockholders (the "1998 Proxy Statement"). Copies of such pages are
filed as Exhibit 2 hereto and are incorporated herein by reference.
ARRANGEMENTS WITH THE PURCHASER OR ITS AFFILIATES
MERGER AGREEMENT.
The following is a summary of certain portions of the Merger Agreement and
is qualified in its entirety by reference to the Merger Agreement, a copy of
which has been filed with the Commission as an exhibit to the Schedule 14D-9.
The Merger Agreement may be examined and copies may be obtained at the places
and in the manner set forth in the Offer to Purchase.
THE OFFER. The Merger Agreement provides that Purchaser will commence the
Offer and that, upon the terms and subject to the prior satisfaction or waiver
of the conditions of the Offer (except the Minimum Condition which cannot be
waived), Purchaser will purchase all Shares validly tendered pursuant to the
Offer. The Merger Agreement provides that, without the written consent of the
Company, Purchaser will not (i) decrease the Offer Price or change the form of
consideration payable in the Offer, (ii) decrease the number of Shares sought in
the Offer, (iii) amend or waive satisfaction of the Minimum Condition, or (iv)
impose additional conditions of the Offer or amend any other term of the Offer
in any manner adverse to the holders of Shares, except that if on the initial
scheduled Expiration Date all conditions to the Offer shall not have been
satisfied or waived, Purchaser may, from time to time, in its sole discretion,
extend the Expiration Date (any such extension to be for ten (10) business days
or less); PROVIDED, HOWEVER, that the Expiration Date of the Offer may not be
extended beyond May 15, 1999. The Merger Agreement provides that if, immediately
prior to the Expiration Date, as it may be extended, the Shares tendered and not
withdrawn pursuant to the Offer equal less than 90% of the outstanding Shares,
Purchaser may extend the Offer for a period not to exceed fifteen (15) business
days, notwithstanding that all conditions to the Offer are satisfied as of such
Expiration Date; PROVIDED, HOWEVER, that during any such
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extension of the Offer, Purchaser irrevocably waives all of the conditions to
the Offer as set forth in Section 14 of the Offer to Purchase (other than the
Minimum Condition).
THE MERGER. Following the consummation of the Offer, the Merger Agreement
provides that, subject to the terms and conditions thereof, at the Effective
Time Purchaser shall be merged with and into the Company and, as a result of the
Merger, the separate corporate existence of Purchaser shall cease and the
Company shall continue as the surviving corporation (sometimes referred to as
the "Surviving Corporation").
The respective obligations of Purchaser, on the one hand, and the Company,
on the other hand, to effect the Merger are subject to the satisfaction on or
prior to the Closing Date (as defined in the Merger Agreement) of each of the
following conditions, unless such failure of any such conditions is a result of
a breach of either party's material obligations under the Merger Agreement: (i)
Purchaser shall have made, or caused to be made, the Offer and shall have
purchased, or caused to be purchased, Shares pursuant to the Offer, (ii) the
Merger and the Merger Agreement shall have been approved and adopted by the
requisite vote of the stockholders of the Company, if required by Delaware law,
and (iii) no statute, rule, regulation, judgment, writ, decree, order or
injunction shall have been enacted, promulgated, entered or enforced by any
governmental authority which has the effect of making illegal or directly or
indirectly restraining, prohibiting or restricting the consummation of the
Merger.
At the Effective Time of the Merger (i) each issued and outstanding Share
(other than Shares that are owned by the Company or any of its subsidiaries, any
Shares owned by Purchaser or any of its subsidiaries or any Shares which are
held by stockholders who properly perfect their dissenters rights under the
DGCL) will be canceled and converted into the right to receive the Offer Price
paid pursuant to the Offer, without interest, upon the surrender of the
certificate formerly representing such Share in accordance with the Merger
Agreement and (ii) each issued and outstanding share of the common stock, par
value $.01 per share, of Purchaser will be converted into one share of common
stock, par value $.01 per share, of the Surviving Corporation and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation.
THE COMPANY'S BOARD OF DIRECTORS. The Merger Agreement provides that
promptly upon the purchase by Purchaser of any Shares pursuant to the Offer,
Purchaser shall be entitled to designate such number of directors, rounded up to
the next whole number, on the Company Board as will give Purchaser
representation on the Company Board equal to at least that number of directors
which equals the product of the total number of directors on the Company Board
(giving effect to the directors appointed or elected by Purchaser pursuant to
the Merger Agreement and including directors serving as officers of the Company)
multiplied by the percentage that the aggregate number of Shares beneficially
owned by Purchaser or any of its affiliates (including Shares that are accepted
for payment pursuant to the Offer, but excluding Shares held by the Company and
excluding beneficial ownership by virtue of the Option Agreement (as defined
below)) bears to the number of Shares outstanding. The Company will, upon
request by Purchaser, promptly increase the size of the Company Board or use its
best efforts to secure the resignations of such number of its incumbent
directors as is necessary to enable Purchaser's designees to be elected to the
Company Board, provided that (i) in the event that Purchaser's designees are
appointed or elected to the Company Board, until the Effective Time the Company
Board will have at least one director who is a director as of the date of the
execution of the Merger Agreement and who is neither an officer of the Company
nor a designee, stockholder, affiliate or associate (within the meaning of
Federal securities laws) of Purchaser (one or more of such directors, the
"Independent Directors") and (ii) if no Independent Directors remain, the other
directors will designate one person to fill one of the vacancies who is neither
an officer of the Company nor a designee, stockholder, affiliate or associate of
Purchaser, such person so designated being deemed an Independent Director. The
Company's obligation to appoint Purchaser's designees to the Company Board is
subject to compliance with Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder.
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STOCKHOLDERS' MEETING. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, duly call, give
notice of, convene and hold a special meeting of its stockholders as promptly as
practicable following the acceptance for payment and purchase of Shares by
Purchaser pursuant to the Offer for the purpose of considering and taking action
upon the approval of the Merger and the adoption of the Merger Agreement. The
Merger Agreement provides that the Company will, if required by applicable law
in order to consummate the Merger, prepare and file with the Commission a
preliminary and definitive proxy or information statement (the "Proxy
Statement") relating to the Merger and the Merger Agreement and use its best
efforts (i) to obtain and furnish the information required to be included by the
Commission in the Proxy Statement and, after consultation with Purchaser, to
respond promptly to any comments made by the Commission with respect to the
preliminary Proxy Statement and cause the definitive Proxy Statement to be
mailed to its stockholders, provided that no amendment or supplement to the
Proxy Statement will be made by the Company without consultation with Purchaser
and its counsel and (ii) to obtain the necessary approvals of the Merger and the
Merger Agreement by its stockholders. If Purchaser acquires at least a majority
of the outstanding Shares in the Offer, Purchaser will have sufficient voting
power to approve the Merger, even if no other stockholder votes in favor of the
Merger. The Company has agreed to include in the Proxy Statement the
recommendation of the Company Board that stockholders of the Company vote in
favor of the approval of the Merger and the adoption of the Merger Agreement
unless the Company Board, after consultation with outside legal counsel to the
Company, determines that to do so would likely breach the fiduciary duties of
the Company Board under applicable law.
The Merger Agreement provides that in the event that Purchaser or any
subsidiary of Purchaser acquires at least 90% of the outstanding Shares pursuant
to the Offer or otherwise, Purchaser and the Company will, at the request of
Purchaser and subject to the terms of the Merger Agreement, take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of stockholders of the
Company, in accordance with Delaware law.
OPTIONS. Pursuant to the Merger Agreement, at the Effective Time, the
Company will take all actions necessary to provide that, each then outstanding
option to purchase shares of Common Stock (the "Options") granted under any of
the Company's stock option plans (the "Option Plans"), whether or not then
exercisable or vested (the vesting of all options will accelerate following the
purchase of 30% or more of the Shares, pursuant to the Company's benefit plans),
shall be canceled and in consideration therefor will receive an amount in cash
equal to the product of (A) the difference between the Offer Price and the per
share exercise price of such Option and (B) the number of Shares subject to such
Option (such amount, the "Option Price"). The Company will obtain all necessary
consents or releases from holders of the Options to effect the foregoing. Upon
receipt of the Option Price, the Option will be canceled. The surrender of an
Option to the Company will be deemed a release of any and all rights a holder
had or may have had in respect of such Option. Except as may be otherwise agreed
to by Purchaser and the Company and to the extent permitted by the Option Plans,
the Company (i) shall cause the Option Plans to terminate as of the Effective
Time and shall provide for the payment of any benefit due under such Option
Plans in cash, (ii) shall cause the provisions in any other plan, program or
arrangement, which currently provides or previously provided for the issuance or
grant by the Company of any interest in respect of the capital stock of the
Company, or for payments based on the value of the capital stock of the Company
to terminate as of the Effective Time and shall provide for the payment of any
benefit due under such plans in cash; (iii) shall take all actions necessary to
ensure that following the Effective Time no holder of Options or any participant
in the Option Plans or any other stock plan shall have any right thereunder to
acquire any equity securities of the Company, the Surviving Corporation or any
subsidiary thereof, and to terminate all such plans. As promptly as practicable
following the consummation of the Merger, Purchaser has agreed to provide the
Company with the funds necessary to satisfy such obligations regarding the
Options under the Merger Agreement.
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INTERIM OPERATIONS; COVENANTS. The Company covenants and agrees that, (i)
except as expressly contemplated by the Merger Agreement, the Option Agreement
or the Stockholders Agreement, (ii) as disclosed pursuant to the Merger
Agreement, or (iii) as agreed in writing by Purchaser, after the date of the
Merger Agreement, and prior to the time the directors of Purchaser have been
elected to and shall constitute a majority of the Company Board:
(a) the business of the Company shall be conducted only in the ordinary
and usual course and, to the extent consistent therewith, the Company shall
use its best reasonable efforts to preserve its business organization intact
and maintain its existing relations with customers, suppliers, employees,
creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon
exercise of Options or other rights to purchase shares of Common Stock
pursuant to the Option Plans outstanding on the date of the Merger Agreement
or upon exercise of outstanding Warrants or conversion of Voting Debt,
issue, sell, transfer or pledge or agree to sell, transfer or pledge any
treasury stock of the Company beneficially owned by it, (ii) amend the
Certificate of Incorporation or Bylaws or similar organizational documents;
or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or
other distribution payable in cash, stock or property with respect to its
capital stock; (ii) issue, sell, pledge, dispose of or encumber any
additional shares of, or securities convertible into or exchangeable for, or
options, warrants, calls, commitments or rights of any kind to acquire, any
shares of capital stock of any class of the Company, other than shares of
Common Stock reserved for issuance on the date of the Merger Agreement
pursuant to the exercise of Options, Warrants or conversion of Voting Debt
outstanding on the date thereof; (iii) transfer, lease, license, sell,
mortgage, pledge, dispose of, or encumber any assets other than in the
ordinary and usual course of business and consistent with past practice, or
incur or modify any indebtedness or other liability, other than in the
ordinary and usual course of business and consistent with past practice; or
(iv) redeem, purchase or otherwise acquire directly or indirectly any of its
capital stock;
(d) the Company shall not: (i) grant any increase in the compensation
payable or to become payable by the Company to any of its executive
officers, (ii) (A) adopt any new, or (B) amend or otherwise increase, or
accelerate the payment or vesting of the amounts payable or to become
payable under, any existing bonus, incentive compensation, deferred
compensation, severance, profit sharing, stock option, stock purchase,
insurance, pension, retirement or other employee benefit plan, agreement or
arrangement or (iii) enter into any employment or severance agreement with
or, except in accordance with the existing written policies of the Company,
grant any severance or termination pay to any officer, director or employee
of the Company;
(e) the Company shall not modify, amend or terminate any of its material
contracts or waive, release or assign any material rights or claims, except
in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a
beneficiary or a loss payable payee to be canceled or terminated without
notice to Purchaser, except in the ordinary course of business and
consistent with past practice;
(g) the Company shall not: (i) incur or assume any long-term debt, or,
except in the ordinary course of business, incur or assume any short-term
indebtedness in amounts not consistent with past practice; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other
person, except in the ordinary course of business and consistent with past
practice; (iii) other than ordinary course expense advances, make any loans,
advances or capital contributions to, or investments in, any other person;
or (iv) enter into
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any material commitment or transaction (including, but not limited to, any
borrowing, capital expenditure or purchase, sale or lease of assets or real
estate);
(h) the Company shall not: (i) change any of the accounting methods used
by it unless required by United States generally accepted accounting
principles ("GAAP") or (ii) other than related to a valid "qualified
electing fund" election pursuant to Section 1295 of the Code with respect to
all stock which it owns, or is considered to own, in any corporation which
meets the definition of "passive foreign investment company" set forth in
Section 1297 of the Code, make any material tax election, change any
material tax election already made, adopt any material tax accounting
method, change any material tax accounting method unless required by GAAP,
enter into any closing agreement, settle any material tax claim or
assessment or consent to any material tax claim or assessment or any waiver
of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction
of any such claims, liabilities or obligations, in the ordinary course of
business and consistent with past practice, or claims, liabilities or
obligations reflected or reserved against in, or contemplated by, the
consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company (other than the
Merger);
(k) the Company shall not take, or agree to commit to take, any action
that would, or is reasonably likely to, result in any of the conditions to
the Merger set forth in the Merger Agreement not being satisfied, or would
make any representation or warranty of the Company contained therein
inaccurate in any respect at, or as of any time prior to, the Effective
Time, or that would materially impair the ability of the Company to
consummate the Merger in accordance with the terms of the Merger Agreement
or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or
otherwise modify the Rights Agreement prior to the consummation of the Offer
unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment
or arrangement to do any of the foregoing, or to authorize, recommend,
propose or announce an intention to do any of the foregoing.
DEBT TENDER OFFER. Pursuant to the Merger Agreement, upon the request of
Purchaser, the Company will commence an offer to purchase (accompanied by a
related solicitation of consents (the "Consents") regarding certain covenant
amendments (the "Proposed Amendments")) all of the Company's outstanding 9 1/2%
Senior Discount Notes due 2005 (the "Senior Notes") on such customary terms and
conditions as are acceptable to Purchaser and reasonably satisfactory to the
Company Board (the "Debt Offer to Purchase"). The Debt Offer to Purchase will be
conditioned upon, among other things: (i) the receipt of Consents from the
holders of the Notes of at least a majority of the aggregate outstanding
principal amount of Notes, excluding Notes owned by the Company and certain
affiliates, and the execution by the Company of an indenture supplemental to the
indenture pursuant to which the Notes were issued effecting the Proposed
Amendments; (ii) the valid tender of at least a majority of the outstanding
principal amount of the Notes as of the expiration date of the Debt Offer to
Purchase; (iii) the consummation of the Offer; and (iv) other customary
conditions for transactions similar to the Debt Offer to Purchase. The Purchaser
has agreed to reimburse the Company for any and all expenses and fees incurred
by the Company in connection with the Debt Offer to Purchase if the Debt Offer
to Purchase is commenced, but terminated without consummation and such failure
to consummate is not the result of the Company's breach.
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NO SOLICITATION. Pursuant to the Merger Agreement, the Company has agreed
that it will not (and will use its best efforts to ensure that its officers,
directors, employees, investment bankers, attorneys, accountants and other
agents do not), directly or indirectly, (i) initiate, solicit or encourage, or
take any action to facilitate (including by the furnishing of information) the
making of, any offer or proposal which constitutes or is reasonably likely to
lead to any Takeover Proposal (as hereinafter defined), (ii) enter into any
agreement with respect to any Takeover Proposal, or (iii) in the event of an
unsolicited Takeover Proposal for the Company engage in negotiations or
discussion with, or provide information or data to, any person (other than
Purchaser, any of its affiliates or representatives and except for information
which has been previously publicly disseminated by the Company) relating to any
Takeover Proposal, except that the Merger Agreement does not prohibit the
Company or the Company Board (i) taking and disclosing to the Company's
stockholders a position with respect to a tender or exchange offer by a third
party pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act, or
(ii) making such disclosure to the Company's stockholders as, the good faith
judgment of the Company Board after receiving advice from outside counsel, the
Company deems necessary to comply with its fiduciary duties to the Company's
stockholders under applicable law. The Company has further agreed to notify
Purchaser within 24 hours if any proposals, inquiries or expressions of interest
are received by, any information is requested from, or any negotiations or
discussions are sought to be initiated or continued with the Company or its
representatives, in connection with any Takeover Proposal or possibility or
considering thereof, indicating the name of such person and the terms and
conditions of any proposals or offers and to keep the Purchaser informed of the
status and terms of such occurrences.
A "Takeover Proposal" means any tender or exchange offer involving the
Company, any proposal for a merger, consolidation or other business combination
involving the Company, any proposal or offer to acquire in any manner a
substantial equity interest in, or a significant portion of the business or
assets of, the Company (other than immaterial or insubstantial assets or
inventory in the ordinary course of business or assets held for sale), any
proposal or offer with respect to any recapitalization or restructuring with
respect to the Company or any proposal or offer with respect to any other
transaction similar to any of the foregoing with respect to the Company other
than pursuant to the transactions effected pursuant to the Merger Agreement.
Notwithstanding the foregoing, prior to the acceptance of Shares pursuant to
the Offer, the Company may furnish information concerning its business,
properties or assets to any person pursuant to appropriate confidentiality
agreements, and may negotiate and participate in discussions and negotiations
with such person concerning a Takeover Proposal (provided that the Company shall
not agree to any exclusive right to negotiate with the Company) if (a) such
entity or group has on an unsolicited basis submitted a bona fide written
proposal to the Company relating to any such transaction that provides for
consideration which the Company Board determines in good faith, after receiving
advice from a nationally recognized investment banking firm, is more favorable
to the Company and its stockholders than the Offer and the Merger (taking into
account all relevant factors) and which is not conditioned upon obtaining
additional financing not fully committed at such time or, in the view of a
nationally recognized investment banking firm, is reasonably likely to be
obtained under then existing market conditions, and (b) in the opinion of the
Company Board, after receiving advice from outside legal counsel to the Company,
the failure to provide such information or access or to engage in such
discussions or negotiations would likely cause the Company Board to breach its
fiduciary duties to the Company's stockholders under applicable law (a Takeover
Proposal which satisfies clauses (a) and (b), a "Superior Proposal"). The
Company must then provide Purchaser any nonpublic information regarding the
Company provided to the other party which was not previously provided to
Purchaser. If the Company, after consultation with outside legal counsel,
believes that a breach of fiduciary duties to the Company's stockholders would
likely occur, the Company Board may (subject to this and the following
sentences) inform the Company's stockholders that it no longer believes that the
Offer and the Merger is advisable and no longer recommends approval (a
"Subsequent Determination"), but only at a time that is after the fifth business
day following Purchaser's receipt of written notice advising Purchaser that the
Company Board has received a Superior Proposal
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specifying the material terms and conditions of such Superior Proposal (and
including a copy thereof with all accompanying documentation), identifying the
person making such Superior Proposal and stating that it intends to make a
Subsequent Determination. Notwithstanding the foregoing, prior to and including
such fifth day the Company may make such public disclosure that is in its view
required under the Federal securities laws, as evidenced by an opinion from
outside counsel to the Company, a copy of which shall be provided to Purchaser
prior to such disclosure. After providing such notice, the Company shall provide
a reasonable opportunity to Purchaser to make such adjustments in the terms and
conditions of the Merger Agreement and/or of the Option Agreement as would
enable the Company to proceed with its recommendation of the Offer. At any time
after five business days following notification to Purchaser of the Company's
intent to terminate the Merger Agreement pursuant to its terms, the Company
Board may terminate the Merger Agreement and enter into an agreement with
respect to a Superior Proposal, provided that the Company shall, concurrently
with entering into such agreement, pay or cause to be paid to Purchaser the
Termination Fee (as defined below). Except as permitted under the terms of the
Merger Agreement, neither the Company Board nor any committee thereof may, (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Purchaser, the approval or recommendation by the Company Board or any such
committee of the Offer, the Merger Agreement or the Merger, (ii) approve or
recommend, or propose to approve or recommend to Purchaser, any Takeover
Proposal or (iii) enter into any agreement with respect to any Takeover
Proposal. Notwithstanding any other provision of the Merger Agreement, the
Company shall submit the Merger Agreement to its stockholders whether or not the
Company Board makes a Subsequent Determination.
INDEMNIFICATION AND INSURANCE. The Company shall, to the fullest extent
permitted under Delaware law and regardless of whether the Merger becomes
effective, indemnify, defend and hold harmless, and after the Effective Time,
Purchaser and the Surviving Corporation shall jointly and severally, to the
fullest extent permitted under Delaware law, indemnify, defend and hold
harmless, the present and former officers, directors, employees and agents of
the Company (the "Indemnified Parties") against any costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, including without limitation, liabilities
arising out of the Merger. The Merger Agreement also provides that the Surviving
Corporation will maintain or obtain directors' and officers' liability insurance
("D&O Insurance") for a period of not less than three years after the Effective
Time, provided, however, that if the aggregate annual premiums for such D&O
Insurance at any time exceeds 150% of the per annum rate of premium currently
paid by the Company for such insurance as in effect on the date of the Merger
Agreement, then Purchaser will cause the Company (or the Surviving Corporation
if after the Effective Time) to provide the maximum coverage then available at
an annual premium equal to 150% of such rate.
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Purchaser with
respect to, among other things, its organization, capitalization, authority
relative to the Merger, financial statements, public filings, conduct of
business, litigation, employee benefit plans, brokers' fees, compliance with
laws, tax matters, intellectual property, employment matters, environmental
matters, real property, material contracts, potential conflicts of interest,
insurance, vote required to approve the Merger Agreement, undisclosed
liabilities, information in the Proxy Statement.
TERMINATION; FEES. The Merger Agreement may be terminated and the
transactions contemplated therein may be abandoned at any time before the
Effective Time, whether before or after stockholder approval: (i) by mutual
written consent of the Boards of Directors of Purchaser and the Company; (ii) by
Purchaser if the Offer expires or is terminated without any Shares being
purchased thereunder by Purchaser as a result of the occurrence of any of the
events set forth in Annex I of the Merger Agreement; (iii) by either Purchaser
or the Company if a court of competent jurisdiction or governmental, regulatory
or administrative agency or commission shall have issued an order, decree or
ruling or taken any other action (which order, decree or ruling the parties
thereto shall use their best efforts to lift) permanently
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restraining, enjoining or otherwise prohibiting the transactions contemplated by
the Merger Agreement; (iv) by Purchaser if, without any material breach by
Purchaser of its obligations under the Merger Agreement, the purchase of Shares
pursuant to the Offer shall not have occurred on or before May 15, 1999; (v) by
the Company if, without any material breach by the Company of its obligations
under the Merger Agreement, the purchase of Shares pursuant to the Offer shall
not have occurred on or before May 15, 1999; (vi) by the Company (a) if there is
a material breach of any of Purchaser's representations, warranties or covenants
under the Merger Agreement which cannot be or has not been cured within ten days
of the receipt of written notice thereof, or (b) to allow the Company to enter
into an agreement in accordance with the Merger Agreement with respect to a
Superior Proposal which the Company Board has determined is more favorable to
the Company's stockholders than the transactions contemplated by the Merger
Agreement, provided that the Company has complied with the provisions of the
Merger Agreement; (vii) by Purchaser if, prior to the purchase of Shares
pursuant to the Offer, the Company shall have breached any representation,
warranty or covenant or other agreement contained in the Merger Agreement, which
breach (a) would give rise to the failure of a condition set forth in paragraph
(e) or (f) of Section 14 and (b) cannot be or has not been cured within ten days
of the receipt of written notice thereof; (viii) by Purchaser, at any time prior
to the purchase of Shares pursuant to the Offer, if (a) the Company Board shall
withdraw, modify, or change its recommendation or approval in respect of the
Merger Agreement or the Offer in a manner adverse to Purchaser, (b) the Company
Board shall have recommended any proposal other than by Purchaser in respect of
a Takeover Proposal, (c) the Company shall have exercised a right with respect
to a Takeover Proposal and shall, directly or through its representatives,
continue discussions with any third party concerning a Takeover Proposal for
more than ten business days after the date of receipt of such Takeover Proposal,
(d) a Takeover Proposal that is publicly disclosed shall have been commenced or
communicated to the Company which contains a proposal as to price (without
regard to whether such proposal specifies a specific price or a range of
potential prices) and the Company shall not have rejected such proposal within
twenty business days of its receipt or, if sooner, the date its existence first
becomes publicly disclosed, or (e) any person or group (as defined in Section
13(d)(3) of the Exchange Act) other than Purchaser or any of its subsidiaries or
affiliates shall have become the beneficial owner of more than 15% of the
outstanding Common Stock (either on a primary or a fully diluted basis), except
that this provision will not apply to any person that owns more than 15% of the
outstanding Shares on the date of the Merger Agreement; or (ix) by Purchaser, if
the Company or its representatives shall have materially breached the provisions
of the Merger Agreement relating to Takeover Proposals.
In accordance with the Merger Agreement, if (a) Purchaser shall have
terminated the Merger Agreement pursuant to clause (viii) or (ix) of the
preceding paragraph; (b) Purchaser shall have terminated the Merger Agreement
pursuant to clause (vii) of the preceding paragraph and following the date of
the Merger Agreement but before such termination there shall have been a
Takeover Proposal Interest, and within two years of any such termination the
Company shall have entered into a definitive agreement with respect to a
Takeover Proposal or a Takeover Proposal with respect to the Company shall have
been consummated; or (c) the Company shall have terminated the Merger Agreement
pursuant to clause (vi)(b) of the preceding paragraph, then in any such case the
Company shall pay simultaneously with such termination if pursuant to clause
(vi)(b) and promptly, but in no event later than two business days after the
date of such termination or event if pursuant to clause (viii), clause (ix) or
clause (vii), to Purchaser a termination fee (the "Termination Fee") of $43
million, which amount shall be payable by wire transfer to such account as
Purchaser may designate in writing to the Company.
OPTION AGREEMENT.
The following is a summary of certain portions of the Option Agreement and
is qualified in its entirety by reference to the Option Agreement, a copy of
which has been filed with the Commission as an exhibit to the Schedule 14D-9.
The Option Agreement may be examined and copies may be obtained at the places
and in the manner set forth in the Offer to Purchase.
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As a condition and inducement to Purchaser's entering into the Merger
Agreement, concurrently with the execution and delivery of the Merger Agreement,
Purchaser and the Company have entered into the Option Agreement, pursuant to
which, among another things, the Company has granted Purchaser an irrevocable
option to purchase up to 4,338,133 newly-issued Shares (the "Company Option") at
a purchase price per Share of $65.75 (the "Exercise Price"), provided, however,
that in no event shall the number of Shares for which the Company Option is
exercisable exceed 19.9% of the Company's issued and outstanding shares of
Company Common Stock. The Option Agreement will terminate, and the Company
Option will expire, on the earliest of (i) the Effective Time and (ii) to the
extent that Purchaser has given no notice of its intention to exercise all or
any part of the Company Option, six (6) months after any termination of the
Merger Agreement pursuant to Section 8.1(b), (f)(ii), (g), (h) or (i) thereof
and at the time of termination of the Merger Agreement pursuant to Section
8.1(a), (c), (d), (e) or (f)(i) thereof.
Purchaser (or its designee) may exercise the Company Option, in whole or in
part, if on or after the date hereof: (a) any corporation, partnership,
individual, trust, unincorporated association, or other entity or "person" (as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), other than Purchaser or any of its affiliates (a "Third
Party"): (i) commences or announces an intention to commence a tender offer or
exchange offer for any shares of Company Common Stock, the consummation of which
would result in beneficial ownership by such Third Party (together with all such
Third Party's affiliates and associates) of 15% or more of the then outstanding
voting equity of the Company (either on a primary or a fully diluted basis); or
(ii) acquires beneficial ownership of shares of Company Common Stock which, when
aggregated with any Shares already owned by such Third Party, its affiliates and
associates, would result in the aggregate beneficial ownership by such Third
Party, its affiliates and associates of 15% or more of the then outstanding
voting equity of the Company (either on a primary or a fully diluted basis);
provided, however, that "Third Party" for purposes of this clause (ii) shall not
include any corporation, partnership, person, other entity or group which
beneficially owns more than 15% of the outstanding voting equity of the Company
(either on a primary or a fully diluted basis) as of the date hereof and that
does not, after the date hereof, increase such ownership percentage by more than
an additional 1% of the outstanding voting equity of the Company (either on a
primary or a fully diluted basis); or (b) any of the events described in
Sections 8.1(g) (so long as following the date the Option Agreement but prior to
any termination there shall have been a proposal, inquiry or expression of
interest in connection with a Takeover Proposal), 8.1(h) or 8.1(i) of the Merger
Agreement that would allow Purchaser to terminate the Merger Agreement has
occurred (but without the necessity of Purchaser having terminated the Merger
Agreement).
In the event of any change in the Shares or in the number of outstanding
Shares by reason of a stock dividend, split-up, recapitalization, combination,
exchange of shares or similar transaction or any other change in the corporate
or capital structure of the Company (including, without limitation, the
declaration or payment of an extraordinary dividend of cash, securities or other
property), the type and number of the Shares to be issued by the Company upon
exercise of the Company Option shall be adjusted appropriately, and proper
provision shall be made in the agreements governing such transaction, so that
Purchaser shall receive upon exercise of the Company Option the number and class
of shares or other securities or property that Purchaser would have received in
respect to the Shares if the Company Option had been exercised immediately prior
to such event, or the record date therefor, as applicable, and the holder of
such Shares had elected to the fullest extent it would have been permitted to
elect, to receive such securities, cash or other property. In the event that the
Company shall enter into an agreement (i) to consolidate with or merge into any
person, other than Purchaser or one of its subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or merger, (ii) to
permit any person, other than Purchaser or one of its subsidiaries, to merge
into the Company and the Company shall be the continuing or surviving
corporation, but, in connection with such merger, the then outstanding Shares
shall be changed into or exchanged for stock or other securities of the Company
or any other person or cash or any other property, or then outstanding Shares
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the surviving corporation or (iii) to sell or otherwise
transfer
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all or substantially all of its assets to any person, other than Purchaser or
one of its subsidiaries, then, and in each such case, proper provision shall be
made in the agreements governing such transaction so that Purchaser shall
receive upon exercise of the Company Option the number and class of shares or
other securities or property that Purchaser would have received in respect of
the Shares if the Company Option had been exercised immediately prior to such
transaction, or the record date therefor, as applicable, and the holder of such
Shares had elected to the fullest extent it would have been permitted to elect,
to receive such securities, cash or other property. Such rights of Purchaser
shall be in addition to, and shall in no way limit, its rights against the
Company for any breach of the Merger Agreement.
At any time that Purchaser is entitled to exercise the Company Option,
Purchaser may elect, in its sole discretion, to sell the Company Option to the
Company in lieu of exercising the Company Option. The Company shall be required
to purchase the Company Option from Purchaser on the third business day after
Purchaser gives the Company written notice of such election for a cash price
(payable by certified or official bank check in same day funds to Purchaser or
its designee) equal to the product of the number of Shares then covered by the
Option multiplied by the excess over the Exercise Price of the greater of (x)
the closing price of a share of Company Common Stock on the Nasdaq National
Market on the last trading day prior to the date of such notice and (y) the
highest price per share of Company Common Stock paid or proposed to be paid to
any holder thereof by any person in any Takeover Proposal.
Notwithstanding any other provision of the Option Agreement, in no event
shall Purchaser's Total Profit (as defined below) exceed $14 million and, if it
otherwise would exceed such amount, Purchaser, at its sole election, shall
either (a) reduce the number of Shares subject to the Company Option, (b)
deliver to the Company for cancellation Shares previously purchased by
Purchaser, (c) pay cash to the Company, or (d) any combination thereof, so that
Purchaser's actually realized Total Profit shall not exceed $14 million after
taking into account the foregoing actions. As used herein, the term "Total
Profit" means the aggregate amount (before taxes) of the following: (i) (x) the
net cash amounts received by Purchaser pursuant to the sale of Shares (or any
other securities into which such Shares are converted or exchanged) to any
unaffiliated party, less (y) Purchaser's purchase price of such Shares, and (ii)
any Notional Total Profit (as defined below). As used herein, the term "Notional
Total Profit" with respect to the total number of Shares as to which Purchaser
could propose to exercise the Option shall be the Total Profit determined as of
the date of such proposal assuming that the Company Option were fully exercised
on such date for such number of Shares and assuming that such Shares, together
with all other Shares held by Purchaser and its affiliates as of such date, were
sold for cash at the closing market price for the Company Common Stock as of the
close of business on the preceding trading day (less customary brokerage
commissions).
STOCKHOLDERS AGREEMENT.
The following is a summary of certain portions of the Stockholders Agreement
and is qualified in its entirety by reference to the Stockholders Agreement, a
copy of which has been filed with the Commission as an exhibit to the Schedule
14D-9. The Stockholders Agreement may be examined and copies may be obtained at
the places and in the manner set forth in the Offer to Purchase.
As a condition and inducement to Purchaser entering into the Merger
Agreement, concurrently with the execution and delivery of the Merger Agreement,
Purchaser has entered into the Stockholders Agreement with the Company and
certain stockholders of the Company who beneficially own approximately 2.36
million Shares in the aggregate, including Shares issuable upon the exercise of
Options. Pursuant to the Stockholders Agreement, such stockholders have agreed
that if requested by Purchaser to exercise all Options granted to such
stockholder under the Option Plans and if certain conditions listed in the
Stockholders Agreement are satisfied, they will exercise such Options. The
conditions to such exercise include that such exercise and tender will result in
a tender of over 90% of the outstanding Shares. In connection with any such
exercise, the Purchaser has agreed to indemnify such stockholders against
expenses and taxes incurred which would not be incurred if the Option were
treated pursuant to the
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Merger Agreement. In addition, stockholders party to the Stockholders' Agreement
may exercise options pursuant to a "cashless exercise" or similar provision.
In addition, such stockholders have agreed that, no later than the tenth
business day after the commencement of the Offer, they will validly tender
pursuant to the Offer all Shares owned by them, representing approximately 4.8%
of the outstanding Shares (approximately 11.7% assuming exercise of all Options
beneficially owned by them), as well as any Shares acquired by them after the
date of the Stockholders Agreement.
In addition, the stockholders subject to the Stockholders Agreement have
agreed that, at any meeting of the Company's stockholders, or in connection with
any written consent of the Company's stockholders, they will vote (i) in favor
of the Merger, the execution and delivery by the Company of the Merger Agreement
and the approval and adoption of the Merger and the terms thereof and each of
the other actions contemplated by the Merger Agreement and the Stockholders
Agreement; (ii) against any action or agreement that would (a) result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or of such stockholder under
the Stockholders Agreement or (b) impede, interfere with, delay, postpone or
adversely affect the Merger or the transactions contemplated thereby or by the
Stockholders Agreement; and (iii) except as otherwise agreed to in writing in
advance by Purchaser, against the following actions (other than the Merger and
the transactions contemplated by the Merger Agreement and the Stockholders
Agreement): (a) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or any of its
subsidiaries; (b) any sale, lease or transfer of a material amount of the assets
or business of the Company or its subsidiaries, or any reorganization,
restructuring, recapitalization, special dividend, dissolution, liquidation or
winding up of the Company or its subsidiaries; (c) any change in the present
capitalization of the Company, including any proposal to sell any equity
interest in the Company or any of its subsidiaries or any amendment of the
Certificate of Incorporation or Bylaws; (d) any change in the majority of the
Company Board; (e) any other change in the Company's corporate structure or
business; and (f) any other action which is intended or could reasonably be
expected to impede, interfere with, delay, postpone, discourage or affect the
Merger, the transactions contemplated by the Merger Agreement or the Stockholder
Agreement or the contemplated economic benefits of any of the foregoing. Each
stockholder subject to the Stockholders Agreement has granted to and appoints
Purchaser such stockholder's proxy and attorney-in-fact to vote the shares owned
by such stockholder in favor of the Merger, the execution and delivery by the
Company of the Merger Agreement and the approval and adoption of the Merger and
the terms thereof and each of the other actions contemplated by the Merger
Agreement and the Stockholders Agreement.
The stockholders subject to the Stockholders Agreement have agreed that
until the earlier of the Effective Time and the termination of the Merger
Agreement, they will not, directly or indirectly, (i) transfer any or all Shares
owned by them, (ii) except with respect to Purchaser, grant any proxies or
powers of attorney, deposit any Shares owned by them into a voting trust or
enter into a voting agreement, understanding or arrangement with respect to such
Shares, or (iii) take any action that would make any representation or warranty
of such stockholder contained herein untrue or incorrect or would result in a
breach by such stockholder of its obligations under the Stockholders Agreement
or a breach by the Company of its obligations under the Merger Agreement.
However, stockholders subject to the Stockholders Agreement may transfer Shares
to an affiliate of such stockholder, any member of such stockholder's immediate
family, a trust for the benefit of family members of such stockholders, or any
charitable organizations (as defined in Section 501(c)(3) of the Code). In
addition, other than as required in his capacity as a director or officer of the
Company under applicable laws and fiduciary duties, each such stockholder and
its affiliates have agreed not, to (i) directly or indirectly solicit, initiate
or encourage a Takeover Proposal, (ii) enter into, maintain or continue
discussions or negotiations with any party (other than Purchaser) in furtherance
of a Takeover Proposal or (iii) agree to or endorse any Takeover Proposal.
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GUARANTEE.
The following is a summary of certain portions of the Guarantee and is
qualified in its entirety by reference to the Guarantee, a copy of which has
been filed with the Commission as an exhibit to the Schedule 14D-9. The
Guarantee may be examined and copies may be obtained at the places and in the
manner set forth in the Offer to Purchase.
As a condition and inducement to the Company entering into the Merger
Agreement, concurrently with the execution and delivery of the Merger Agreement,
Olivetti, Mannesmann and the Company have entered into the Guarantee, pursuant
to which, among other things, Olivetti and Mannesmann have agreed jointly and
severally to guarantee unconditionally and irrevocably, for the benefit of the
Company, the performance of certain obligations of Purchaser pursuant to the
Merger Agreement. Olivetti and Mannesmann have represented in the Guarantee that
they have funds available to them sufficient to purchase, or cause to be
purchased, the Shares and Options in accordance with the terms of the Merger
Agreement, and to pay, or cause to be paid, all amounts due (or which will, as a
result of the transactions contemplated by the Merger Agreement, become due) in
respect of the Debt Tender any Offer. The Guarantee terminates upon consummation
of the purchase by Purchaser or any of its affiliates of any Shares pursuant to
the Offer.
CONFIDENTIALITY AGREEMENT.
The following is a summary of certain portions of the Confidentiality
Agreement, dated December 1, 1998, among Olivetti, Mannesmann and the Company
(the Confidentiality Agreement") and is qualified in its entirety by reference
to the Confidentiality Agreement, a copy of which has been filed with the
Commission as an exhibit to the Schedule 14D-9. The Confidentiality Agreement
may be examined and copies may be obtained at the places and in the manner set
forth in the Offer to Purchase.
As a condition to being furnished information concerning the Company
("Evaluation Material") by or on behalf of the Company, Olivetti and Mannesmann
have agreed, among other things, that they will keep such Evaluation Material
confidential and will use it solely for evaluating the Offer and the Merger.
"Evaluation Material" does not include information which (i) is already in the
possession of Mannesmann or Olivetti, provided that such information in not
known by them to be subject to another confidentiality agreement with or other
obligation of secrecy to the Company or another party, (ii) becomes generally
available to the public other than as a result of a disclosure by Mannesmann or
Olivetti or their respective directors, officers, employees, agents or advisors,
or (iii) becomes available to Olivetti or Mannesmann on a non-confidential basis
from a source other than the Company or its advisers, provided that such source
is not known to be bound by a confidentiality agreement with or other obligation
of secrecy to the Company or another party.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) Recommendation of the Board of Directors.
THE BOARD OF DIRECTORS HAS APPROVED THE MERGER AGREEMENT, OPTION AGREEMENT,
STOCKHOLDERS' AGREEMENT AND GUARANTEE (THE "TRANSACTION AGREEMENTS"), AND THE
TRANSACTIONS CONTEMPLATED THEREBY AND DETERMINED THAT EACH OF THE OFFER AND THE
MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY. THE BOARD OF DIRECTORS RECOMMENDS THAT ALL HOLDERS OF SHARES ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
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(b) Background; Reasons for the Recommendation.
BACKGROUND.
Management of the Company, Olivetti and Mannesmann have been acquainted with
one another for a number of years and have had, from time to time, discussions
concerning the respective businesses and strategies of their companies.
In 1988, the Company's former parent, Cellular Communications, Inc. ("CCI"),
began seeking joint venture opportunities to pursue wireless communications
businesses outside of the United States. In 1990, the Company became one of the
organizers and a party to Omnitel-Sistemi Radiocellulari Italiani S.p.A.,
("OSR"), an Italian joint venture corporation, with Ing. C. Olivetti & C.,
S.p.A., Bell Atlantic International Inc. ("Bell Atlantic"), Shearson Lehman
Hutton Eurocell, Inc. and Swedish Telecom International AB ("Swedish Telecom"),
which each executed the original joint venture agreement forming OSR, (as
amended, the "OSR Joint Venture Agreement").
In connection with CCI entering into an agreement with AirTouch
Communications, Inc. in 1990, the Capital Stock of the Company was distributed
to the shareholders of CCI in 1991. Since that time, the Company has been an
independent, publicly traded entity.
In February, 1994, OSR entered into an agreement with Pronto Italia S.p.A.
("Pronto") to form Omnitel Pronto Italia S.p.A. ("Omnitel") as their combined
applicant for the second Global System for Mobile Communications ("GSM") license
in Italy. GSM is the digital technology for cellular telephone systems that most
European countries have agreed to adopt as a common standard. In March 1994, the
Italian Government announced that Omnitel was selected by the Italian Government
as the licensee of Italy's second GSM cellular telephone license (the
"License").
Currently, the Company holds a 14.667% interest in OSR, which holds a 70%
interest in and directs the management of Omnitel. The Company through its
14.667% interest in OSR, holds an approximate 10.267% interest in Omnitel. The
other current joint ventures in OSR are OliMan Holding B.V. ("OliMan"), a joint
venture currently owned 62.5% by Ing. C. Olivetti & C., S.p.A. ("Olivetti") and
37.5% by Mannesmann A.G.("Mannesmann"), Bell Atlantic International, Inc. ("Bell
Atlantic") and an affiliate of Lehman Brothers (collectively, the "OSR Corporate
Partners"). Pronto, which holds a 30% interest in Omnitel, consists of AirTouch
Communications, Inc., Mannesmann and several smaller partners (together with the
OSR Corporate Partners, the "Corporate Partners").
Although in prior years, the Company pursued opportunities in countries
other than Italy, the value of the Company's interest in OSR, and thus indirect
interest in Omnitel, has come to represent substantially all of the value of the
Company.
Recognizing the Company is a minority, indirect shareholder in Omnitel, and
that it could not control Omnitel's cash flows and, in particular, Omnitel's
payment of dividends, and cognizant of the contractual terms of the OSR Joint
Venture Agreement, the Company has always been alert to opportunities to
maximize the value of its OSR investment. In that connection, the Company has
from time to time conducted discussions with other participants in the OSR and
Pronto consortia seeking to elicit any interest they might have in a
transaction. These discussions have occurred over a period of years and as
recently as the past several months, but had not resulted in any proposal or
offer to purchase the Company or its interest in OSR. In addition, entities
outside of the OSR and Pronto Consortia had not contacted the Company regarding
any interest in its holdings in OSR.
Commencing in early 1995, management of the Company and Olivetti held
discussions concerning a strategic business combination between the two
companies. The discussions terminated in the summer of 1995.
In the first half of 1998, the Company had discussions with Telia
International A.B. ("Telia") (formerly Swedish Telecom), including discussions
about a potential transaction between Telia and the Company in
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which the Company would acquire Telia's OSR stake for either Company stock or a
combination of Company stock, debt and cash. These discussions were part of a
series of various meetings for different purposes that the Company had with
Telia over a period of five years. Despite these recent meetings, Telia
ultimately entered into a transaction in which it sold its interest in OSR to
OliMan, which was announced on April 14, 1998.
In February, 1997, senior executives of the Company met with senior
executives of Mannesmann, and had a broad based discussion regarding their
respective interests in European telecommunications. A similar such discussion
occurred in January, 1998, including executives of Olivetti as well as
Mannesmann.
In April, 1998, Dr. Kurt Kinzius, Managing Director of Mannesmann Eurokom
GmbH, met with William B. Ginsberg, the President and CEO of the Company, and
discussed a potential transaction between the Company and OliMan, which sought
to increase its stake in Omnitel.
On July 6, Dr. Kinzius telephoned Mr. Ginsberg to arrange for a meeting. A
meeting took place on July 10 among Mr. Ginsberg, Dr. Kinzius and Evan Newmark
of Goldman Sachs & Co., acting on behalf of OliMan, in connection with a
possible transaction with the Company. At that meeting, various structures for a
transaction were considered and, at the conclusion of this meeting, the
attendees agreed to evaluate various alternatives for structuring a transaction.
On August 11, 1998, there was another meeting between the Company and OliMan
in London, England. The parties discussed various proposals for structuring a
transaction, but no satisfactory result could be reached.
On August 24, 1998, senior executives of the Company had a meeting with
senior executives of Bell Atlantic to discuss a possible transaction involving
the Company. This meeting was one of a series of meetings between senior
executives of the two companies in which possible transactions were discussed,
over the course of the past five years. However, shortly after the meeting, Bell
Atlantic's representatives communicated that they were not interested in
pursuing any transaction with the Company.
From time to time, senior executives of AirTouch Communications, Inc. have
had informal discussions concerning the Company's interest in OSR and possible
transactions with the Company. These discussions did not result in any
transaction.
At a November meeting of OSR and Omnitel in Milan, Italy, representatives of
OliMan, including Dr. Kinzius and Marco De Benedetti, an executive officer of
Olivetti responsible for telecom strategies, approached Mr. Ginsberg to meet
again about a possible transaction involving the Company.
On November 30, 1998, representatives of Olivetti, Mannesmann and Goldman,
Sachs & Co. met with representatives of the Company and Wasserstein Perella.
Detailed negotiations then ensued between representatives of Olivetti and
Mannesmann, including Goldman, Sachs & Co. and legal counsel, Willkie Farr &
Gallagher and Dorsey & Whitney, and representatives of the Company, including
Wasserstein Perella and Skadden, Arps, Slate, Meagher & Flom LLP.
Simultaneously, representatives of Olivetti and Mannesmann conducted their due
diligence investigations of the Company. The negotiations culminated in
agreement on the terms of the Merger Agreement, Stockholders' Agreement, Option
Agreement and Guarantee.
REASONS FOR THE TRANSACTION; FACTORS CONSIDERED BY THE BOARD. The Board of
Directors and the Company's senior management have reviewed Omnitel's strategic
position in the Italian cellular telephone industry, the near and longer term
prospects for that industry, the consolidation trends within that industry and
the strategic alternatives available to the Company, all with a view to
maximizing shareholder value. In conducting its review, the Board of Directors
considered the Company's indirect, minority interest in Omnitel, the
relationship among the other parties that have interests in Omnitel, the
consequences of various transaction structures and the terms of the OSR Joint
Venture Agreement and the License. The Company also considered Omnitel's results
of operations for the fiscal year ended December 31, 1997 as well as for the
fiscal quarter ended September 30, 1998. The Board of Directors also considered
the recent
16
<PAGE>
trading prices of the Company's Common Stock. In light of the Board's review of
Omnitel's competitive position, recent operating results, the Company's stock
price, anticipated trends in the industry in which Omnitel competes, structural
considerations and the price per Share being offered by Purchaser, the Board of
Directors determined that it would be in the best interest of the Company's
shareholders to approve the Transaction Agreements. In approving the Transaction
Agreements and the transactions contemplated thereby and recommending that all
holders of Shares of the Company's Common Stock tender their Shares pursuant to
the Offer, the Board of Directors considered a number of factors including:
(i) the terms of the Merger Agreement, the Stockholders Agreement
executed by certain stockholders in connection therewith, including
provisions allowing the Stockholders' Shares to be voted in favor of a
competing offer if the Merger Agreement were terminated by the Company in
accordance with its terms to allow the Company to enter into an agreement
with any such competing bidder, the Option Agreement and the Guarantee;
(ii) the trading price of shares of the Company's Common Stock, and the
expected trading prices for the foreseeable future;
(iii) the contractual terms of the OSR Joint Venture Agreement and of
the License; the fact that the Company's interest in OSR is a minority with
only an indirect interest in Omnitel and limited governance rights;
(iv) Omnitel's competitive position and current business and regulatory
trends in the Italian cellular telephone industry and the European cellular
telephone industry, including Omnitel's rapid growth in the past and the
Company's view of Omnitel's future;
(v) a range of other possible buyers of the Company that are not
currently affiliated with either OSR or Pronto, ultimately concluding that
it was unlikely that any such buyer would be forthcoming given the existing
configuration of Omnitel;
(vi) Wasserstein Perella's opinion that the consideration to be received
by the stockholders of the Company, other than stockholders who are
affiliates of the Company, pursuant to the Merger Agreement is fair to such
stockholders from a financial point of view, as well as a presentation by
Wasserstein Perella of various financial analyses relating to the Merger,
including among other things a review of the Company's historical, financial
and stock market performance; a review of selected stock trading data for
selected companies that have European cellular telephone operations; and a
number of discounted cash flow analyses at various discount rates and
terminal values based on Omnitel's projections for its future performance;
The full text of the Wasserstein Perella fairness opinion is attached
hereto as Exhibit 8. The Wasserstein Perella opinion is addressed to the
Board of Directors of the Company and does not address the merits of the
underlying decision of the Company to engage in the transactions
contemplated by the Merger Agreement and does not constitute a
recommendation to any holder of Shares as to how such holder should respond
to the Offer. The summary of the Wasserstein Perella opinion set forth in
this statement on Schedule 14D-9 is qualified in its entirety by reference
to full text of the Wasserstein Perella opinion attached hereto attached as
Exhibit 8; Holders of shares are urged to read the Wasserstein Perella
opinion in its entirety;
(vii) the Company's understanding of the Mannesmann, Olivetti and Bell
Atlantic relationship, which the Company believes would effectively reduce
competition among them for an acquisition of the Company;
(viii) the tax impact of a sale of the Company's interest in Omnitel as
compared with a sale of the Company pursuant to the structure contemplated
by the Merger Agreement; and
(ix) the fact that Olivetti and Mannesmann have executed a Guarantee
regarding the financial obligations of the Purchaser under the Merger
Agreement including its ability to purchase the Shares pursuant to the Offer
and the Merger.
17
<PAGE>
The Board of Directors did not assign relative weight to the above factors
or determine that any factor was of particular importance. Rather, the Board of
Directors viewed its position and recommendations as being based on the totality
of the information presented to and considered by it.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Wasserstein Perella & Co., Inc. ("Wasserstein Perella") was retained,
pursuant to the terms of a letter agreement, dated December 4, 1998 (the
"Wasserstein Letter Agreement"), as financial advisor to the Company in
connection with any proposed business combination involving the Company and
another party, including a merger of the Company, the acquisition of 50% or more
of the Company's outstanding capital stock, the acquisition of all or a
substantial portion of the assets of the Company or similar transactions (a
"Business Combination"). Pursuant to the terms of the Wasserstein Letter
Agreement, the Company has agreed to pay Wasserstein, a fee of $2.0 million,
upon the execution of a definitive agreement to effect a Wasserstein
Transaction. Pursuant to the terms of the Wasserstein Letter Agreement, a
transaction fee equal to $8.0 million is payable to Wasserstein, contingent upon
the consummation of any Wasserstein Transaction and to be paid by the Company on
the closing date thereof; it being understood and agreed that if more than 50%
of the outstanding voting securities of the Company on a fully diluted basis are
acquired (the "First Step") and the Acquiror (as defined in the Wasserstein
Letter Agreement) proposes to acquire any additional voting securities or assets
or businesses of the Company in a subsequent transaction, the Wasserstein
Transaction shall be deemed to have been consummated and the closing date to
have occurred upon consummation of the First Step. The Company has also agreed
to pay Wasserstein additional fees in such amounts as will be customary given
the nature of the services provided, including reimbursement on a monthly basis
for Wasserstein's travel and other reasonable out-of-pocket expenses (including
fees, disbursements and other charges of counsel to be retained by Wasserstein
and of other consultants and advisors retained with the Company's consent) as
well as any sales or similar taxes.
Wasserstein provided to the Company an opinion to the effect that the
consideration proposed to be paid in the Transaction is fair to the Company's
stockholders from a financial point of view. Wasserstein has, in the past,
provided financial advisory and financing services to the Company and has
received fees for the rendering of such services. In the ordinary course of
business, Wasserstein may actively trade the securities of the Company for its
account and for the accounts of its customers and, accordingly, may at any time
hold a long or short position in such securities.
The Company also retained Donaldson, Lufkin & Jenrette ("DLJ"), pursuant to
the terms of a letter agreement, dated December 4, 1998 (the "DLJ Letter
Agreement"), as financial advisor to the Company in connection with a Business
Combination to the Parent. Pursuant to the terms of the DLJ Letter Agreement,
DLJ undertook to study and evaluate the Company and its business prospects,
identify and analyze the financial alternatives available to the Company,
develop the strategy and tactics to be used in evaluating these alternatives in
the market, provide analysis and advice in connection with a Business
Combination, as directed by the Company, assist in the negotiation of a
definitive agreement with the Parent and provide such other financial advisory
services as the Company may request and agree upon in writing with DLJ.
As compensation for the services provided by DLJ, the Company has agreed to
pay DLJ a fee of $100,000 upon execution of a definitive agreement to effect a
DLJ Transaction. Additional cash compensation in an amount equal to $1,500,000
payable in cash will be payable to DLJ at consummation of a Business Combination
which will be deemed to have occurred upon (i) the acquisition by another person
of a majority of the Company calculated on a fully-diluted basis; (b) a merger
or consolidation of the Company or an affiliate of the Company with another
person; (c) the acquisition by another person of assets of the Company
representing a majority of the Company's book value; or (d) in the case of any
other Business Combination, the consummation thereof. The Company also agreed to
reimburse DLJ promptly for all out-of-pocket expenses (including reasonable fees
and expenses of counsel) incurred by DLJ in connection with its engagement,
whether of not a Business Combination is consummated. In addition, if at
18
<PAGE>
any time prior to 12 months after the termination of DLJ's engagement with the
Company a transaction other than the DLJ Transaction is consummated, for which,
under the DLJ Letter Agreement, DLJ is entitled to compensation, DLJ and the
Company will in good faith mutually agree upon acceptable compensation for DLJ,
taking into account, among other things, the results obtained and the custom and
practice of investment bankers of international standing acting in similar
transactions.
Except as disclosed herein, neither the Company nor any person acting on its
behalf currently intends to employ, retain or compensate any other person to
make solicitations or recommendations to security holders on its behalf
concerning the Offer or the Merger.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) SHARE TRANSACTIONS LAST 60 DAYS. Except as set forth below, no
transactions in the Shares have been effected during the past 60 days by the
Company or, to the best of the Company's knowledge, by any executive officer,
director, affiliate or subsidiary of the Company.
On October 27, and October 30, 1998, Alan J. Patricof, member of the Board
of Directors, sold 5,000 Shares at $60.75 and 1,000 Shares at $62.375
respectively.
(b) INTENT TO TENDER. To the best of the Company's knowledge, to the extent
permitted by applicable securities laws, rules or regulations, each executive
officer, director and affiliate of the Company currently intends to tender all
Shares over which he or she has sole dispositive power to the Purchaser. In
addition, all of the Company's directors and officers have signed the
Stockholders Agreement, thus obligating themselves to tender their Shares,
subject to the terms of such agreement and applicable law.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY SUBJECT COMPANY.
(a) CERTAIN NEGOTIATIONS. Except as set forth in this Schedule 14D-9, the
Company is not engaged in any negotiation in response to the Offer which relates
to or would result in (i) an extraordinary transaction, such as a merger or
reorganization, involving the Company; (ii) a purchase, sale or transfer of a
material amount of assets by the Company; (iii) a tender offer for or other
acquisition of securities by or of the Company; or (iv) any material change in
the present capitalization or dividend policy of the Company.
(b) CERTAIN TRANSACTIONS. There are presently no transactions, board
resolutions, agreements in principle or signed contracts in response to the
Offer, other than as described in or incorporated by reference into Item 3(b),
which relate to or would result in one or more of the matters referred to in
Item 7(a)(1), (2), (3) or (4).
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
(a) DGCL 203
Section 203 of the DGCL purports to regulate certain business combinations
of a corporation organized under Delaware law, such as the Company, with a
stockholder beneficially owning 15% or more of the outstanding voting stock of
such corporation (an "Interested Stockholder"). Section 203 provides, in
relevant part, that the corporation shall not engage in any business combination
for a period of three years following the date such stockholder first becomes an
Interested Stockholder unless (i) prior to the date the stockholder first
becomes an Interested Stockholder, the board of directors of the corporation
approved either the business combination or the transaction which resulted in
the stockholder becoming an Interested Stockholder, (ii) upon becoming an
Interested Stockholder, the Interested Stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, or (iii) on or subsequent to the date the stockholder becomes an
Interested Stockholder, the business combination is approved by the board of
directors and authorized at an annual or special meeting of stockholders by the
affirmative vote of at least two-thirds of the outstanding voting stock which is
not owned by the Interested Stockholder. The Company's Board of Directors has
approved the Merger
19
<PAGE>
Agreement and the transactions contemplated thereby, including the Offer and the
Merger, and, therefore, Section 203 of the DGCL is inapplicable to the Offer and
the Merger.
(b) Information Statement
The Information Statement attached as Annex A hereto is being furnished in
connection with the possible designation by the Purchaser, pursuant to the
Merger Agreement, of certain persons to be appointed to the Board of Directors
of the Company other than at a meeting of the Company's stockholders.
(c) Change in Control Provisions in Notes
Upon the occurrence of a Change of Control (as defined in the Notes),
holders of the Company's 6% Convertible Subordinated Notes Due 2005 (the
"Convertible Notes") and holders of the Company's 9 1/2 Senior Discount Notes
due 2005 (the "Senior Notes" and together with the Convertible Notes, the
"Notes") will have the right to require the Company to repurchase all or any
part (equal to $1,000 or EURO 1,000 or an integral multiple thereof,
respectively) of such holder's Convertible Notes or Senior Notes, respectively,
at a purchase price equal to 101% of the principal amount thereof, plus accrued
and unpaid interest (the "Repurchase Rights").
Holders of the Convertible Notes may also exercise their right to convert
their Convertible Notes into Common Stock and participate in the Offer or
receive cash upon the Merger in lieu of pursuing their Repurchase Rights.
Holders may also continue to hold their Convertible Notes after the Merger.
Holders of the Senior Notes may also continue to hold their Senior Notes after
the Merger.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO.
- -----------
<S> <C>
Exhibit 1. Agreement and Plan of Merger, Option Agreement, Stockholders' Agreement and Guarantee, dated as of
December 11, 1998, by and among the Purchaser and the Company.
Exhibit 2. Pages 4 through 12 of the Proxy Statement, dated June 30, 1998, relating to the Company's 1998 Annual
Meeting of Stockholders.
Exhibit 3. Confidentiality Agreement between the Purchaser and the Company, dated December 1, 1998.
Exhibit 4. Engagement Letter dated December 4, 1998 between the Company and Wasserstein Perella.
Exhibit 5. Engagement Letter dated December 4, 1998 between the Company and DLJ.
Exhibit 6. Press Release issued jointly by the Purchaser and the Company, dated December 11, 1998.
Exhibit 7. Letter to Stockholders of the Company, dated December 17, 1998.*
Exhibit 8. Opinion of Wasserstein Perella, dated December 11, 1998.*
</TABLE>
- ------------------------
* Included with Schedule 14D-9 mailed to stockholders.
20
<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.
Dated: December 17, 1998
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
<TABLE>
<S> <C>
/s/ RICHARD J. LUBASCH
------------------------------------------
Name: Richard J. Lubasch
Title: Senior Vice-President, General
By Counsel
</TABLE>
21
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO.
- -----------
<S> <C>
Exhibit 1. Agreement and Plan of Merger, Option Agreement, Stockholders' Agreement and Guarantee, dated as of
December 11, 1998, by and among the Purchaser and the Company.
Exhibit 2. Pages 4 through 12 of the Proxy Statement, dated June 30, 1998, relating to the Company's 1998 Annual
Meeting of Stockholders.
Exhibit 3. Confidentiality Agreement between the Purchaser and the Company, dated December 1, 1998.
Exhibit 4. Engagement Letter dated December 4, 1998 between the Company and Wasserstein Perella.
Exhibit 5. Engagement Letter dated December 4, 1998 between the Company and DLJ.
Exhibit 6. Press Release issued jointly by the Purchaser and the Company, dated December 11, 1998.
Exhibit 7. Letter to Stockholders of the Company, dated December 17, 1998.*
Exhibit 8. Opinion of Wasserstein Perella, dated December 11, 1998.*
</TABLE>
- ------------------------
* Included with Schedule 14D-9 mailed to stockholders.
22
<PAGE>
ANNEX A
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
110 EAST 59(TH) STREET
NEW YORK, NEW YORK 10022
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER
This Information Statement is being mailed on or about December 17, 1998 as
a part of Cellular Communications International, Inc.'s (the "Company")
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
to the holders of record of shares of Common Stock, par value $.01 per share, of
the Company (the "Shares") at the close of business on or about December 17,
1998. You are receiving this Information Statement in connection with the
possible election of persons designated by the Purchaser (as defined below) to a
majority of the seats on the Board of Directors of the Company.
On December 11, 1998 Kensington Acquisition Sub, Inc., a Delaware
corporation (the "Purchaser") and the Company entered into an Agreement and Plan
of Merger (the "Merger Agreement") in accordance with the terms and subject to
the conditions of which (i) Purchaser will commence a tender offer (the "Offer")
for all outstanding Shares at a price of $65.75 per Share net to the seller in
cash, and (ii) the Purchaser will be merged with and into the Company (the
"Merger"). The Purchaser was formed in connection with the Merger Agreement and
is owned 50% by Olivetti S.p.A. and 50% by Mannesmann AG. As a result of the
Offer and the Merger, the Company will continue as the surviving corporation
(the "Surviving Corporation").
The Merger Agreement provides that promptly upon the purchase of Shares
pursuant to the Offer, the Purchaser shall be entitled to designate such number
of directors on the Board of Directors of the Company as will give the Purchaser
representation on the Board of Directors equal to the product of (i) the number
of directors on the Board of Directors and (ii) the percentage that the
aggregate number of Shares purchased by the Purchaser or any affiliate bears to
the number of Shares outstanding. See "Board of Directors and Executive
Officers--RIGHT TO DESIGNATE DIRECTORS; THE PURCHASER DESIGNEES."
You are urged to read this Information Statement carefully. You are not,
however, required to take any action. Capitalized terms used herein and not
otherwise defined herein shall have the meaning set forth in the Schedule 14D-9.
Pursuant to the Merger Agreement, the Purchaser commenced the Offer on
December 17, 1998. The Offer is scheduled to expire at 12:00 midnight, New York
City time, on January 15, 1999 unless the Offer is extended.
The information contained in this Information Statement concerning the
Purchaser has been furnished to the Company by the Purchaser, and the Company
assumes no responsibility for the accuracy or completeness of such information.
23
<PAGE>
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
GENERAL
The Shares are the only class of voting securities of the Company
outstanding. Each Share has one vote. As of November 30, 1998, there were
16,715,306 Shares outstanding.
RIGHT TO DESIGNATE DIRECTORS
The Merger Agreement provides that, subject to compliance with applicable
law, promptly upon the purchase of Shares pursuant to the Offer, the Purchaser
shall be entitled to designate such number of directors (the "Purchaser
Designees") on the Board of Directors of the Company as will give the Purchaser
representation on the Board of Directors equal to the product of (i) the number
of directors on the Board of Directors (giving effect to the directors appointed
or elected pursuant to the Offer and including current directors serving as
officers of the Company) and (ii) the percentage that the aggregate number of
Shares purchased by the Purchaser or any affiliate (including such Shares as are
accepted for payment pursuant to the Offer, but excluding Shares held by the
Company and excluding Shares beneficially owned by the Purchaser by virtue of
the Option Agreement) bears to the number of Shares outstanding. At such times,
the Company will also cause each committee of the Board of Directors to include
Persons designated by the Purchaser constituting at least the same percentage of
each such committee or board as the designees are of the Board of Directors. The
Company will increase the size of the Board of Directors or exercise its best
efforts to cause the resignations of such number of incumbent directors as is
necessary to enable the Purchaser's designees to be elected to the Board of
Directors; provided, however, that, until the Effective Time, the Board of
Directors will have at least one director who is neither an officer of the
Company nor a designee, stockholder, affiliate or associate of the Purchaser
(one or more of such directors, the "Independent Directors"). The Merger
Agreement further provides that, after the acceptance of payment of Shares
pursuant to the Offer and prior to the Effective Time, the affirmative vote of a
majority of the Independent Directors is required to (i) amend or terminate the
Merger Agreement on behalf of the Company, (ii) exercise or waive any of the
Company's rights or remedies under the Merger Agreement or (iii) take any other
action by the Company in connection with the Merger Agreement required to be
taken by the Board of Directors.
BOARD OF DIRECTORS OF THE COMPANY
The Board of Directors currently consists of five persons. J. Barclay Knapp
resigned from the Board of Directors on June 3, 1998. Biographical information
concerning each of the Company's current directors and executive officers is
presented on the following.
Sidney R. Knafel, 68, a director from and prior to the July 1991
distribution by Cellular Communications, Inc. ("CCI") to its stockholders of the
Common Stock of the Company (the "Distribution"), has been Managing Partner of
SRK Management Company, a private investment concern, since 1981. In addition,
Mr. Knafel is Chairman of Insight Communications, Inc. and BioReliance
Corporation. Mr. Knafel is also a director of General American Investors
Company, Inc., IGENE Biotechnology, Inc., NTL Incorporated ("NTL"), Cellular
Communications of Puerto Rico, Inc. ("CCPR"), CoreComm Limited ("CoreComm") and
some privately owned companies.
Del Mintz, 71, a director of the Company from and prior to the Distribution,
is President of Cleveland Mobile TeleTrak, Inc. and Cleveland Mobile Radio
Sales, Inc. and Ohio Mobile TeleTrak, Inc., companies providing telephone
answering and radio communications services to Cleveland and Columbus,
respectively. Mr. Mintz has held similar positions with the predecessor of these
companies since 1967. Mr. Mintz is President of several other companies, and was
President and a principal stockholder of Cleveland Mobile Cellular Telephone,
Inc. before such company was acquired by merger with CCI's predecessor in 1985.
Mr. Mintz is also a director of NTL, CCPR, CoreComm and several privately owned
companies.
24
<PAGE>
William B. Ginsberg, 54, has been President, Chief Executive Officer and a
director of the Company from and prior to the Distribution. In April 1994, Mr.
Ginsberg was appointed as Chairman of the Company. Mr. Ginsberg had also been
President, Chief Executive Officer and a director of CCI since its founding in
1981 until its merger in 1996 into a subsidiary of AirTouch Communications, Inc.
(the "CCI Merger").
Alan J. Patricof, 64, a director from and prior to the Distribution, is
Co-Chairman of Patricof & Co. Ventures, Inc., a venture capital firm he founded
in 1969. Mr. Patricof also serves as a director of NTL, CCPR, CoreComm and other
privately owned companies.
Warren Potash, 67, has been a director from and prior to the Distribution.
Mr. Potash retired in 1991 as President and Chief Executive Officer of the Radio
Advertising Bureau, a trade association, a position he held since 1989. Prior to
that time and beginning in 1986, he was President of New Age Communications,
Inc., a communications consultancy firm. Until his retirement in 1986, Mr.
Potash was a Vice President of Capital Cities/ABC Broadcasting, Inc., a position
he held since 1970. Mr. Potash is also a director of NTL, CCPR and CoreComm.
EXECUTIVE OFFICERS OF THE COMPANY
Richard J. Lubasch, 52, has been the Company's Vice President--General
Counsel and Secretary from and prior to the Distribution. In April 1994, Mr.
Lubasch was appointed Senior Vice President and Treasurer of the Company. Mr.
Lubasch was Vice President--General Counsel and Secretary of CCI from July 1987
until the CCI Merger. Mr. Lubasch is Senior Vice President--General Counsel and
Secretary of NTL,CCPR and CoreComm.
Gregg Gorelick, 40, has been the Company's Vice President- Controller from
and prior to the Distribution. From 1981 to 1986 he was employed by Ernst &
Whinney (now known as Ernst & Young LLP). Mr. Gorelick is a certified public
accountant and was Vice President- Controller of CCI from 1986 until the CCI
Merger. Mr. Gorelick holds that position at NTL, CCPR and CoreComm.
Stanton N. Williams, 37, has been the Company's Vice President and Chief
Financial Officer since March 1995. He had been the Director of Corporate
Development for the Company from and prior to the Distribution, a title he
currently holds at NTL and held at CCI, until the CCI Merger, and at CCPR until
he was appointed Vice-President--Chief Financial Officer in 1997. Prior to
joining CCI in 1989, Mr. Williams was employed by Arthur Andersen & Co's
consulting division.
25
<PAGE>
MEETINGS OF THE BOARD
The Board met seven times during calendar year 1997. All current members of
the Board attended at least 88% of the combined total of the meetings of the
Board and its committees on which they served.
COMMITTEES OF THE BOARD
The Board has two standing committees: the Compensation and Option Committee
and the Audit Committee.
The Compensation and Option Committee is composed of Messrs. Knafel and
Mintz. The Compensation and Option Committee reviews and makes recommendations
regarding annual compensation for Company officers. During calendar 1997, the
Compensation and Option Committee held two meetings.
The Audit Committee is composed of Messrs. Mintz, Patricof and Potash. The
Audit Committee oversees the Company's financial reporting process on behalf of
the Company's Board of Directors. During calendar 1997, the Audit Committee held
one meeting.
26
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock, as of December 1, by (i) each executive officer
and director of the Company, (ii) all directors and executive officers as a
group and (iii) stockholders holding 5% or more of the Company's Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
--------------------------------------------------------
<S> <C> <C> <C> <C>
PRESENTLY
EXECUTIVE OFFICERS, DIRECTORS AND COMPANY EXERCISABLE
PRINCIPAL STOCKHOLDERS STOCK OPTIONS(1) TOTAL PRESENT(2)
- --------------------------------------------------------- ----------- -------------- ---------- ---------------
William B. Ginsberg...................................... 302,996 740,974 1,043,970 5.98%
Richard J. Lubasch....................................... 20,937 137,986 158,923 *
Stanton N. Williams...................................... 18,574 144,000 162,574 *
Gregg Gorelick........................................... 2,406 64,403 66,809 *
Del Mintz................................................ 326,015 55,033 381,048 2.27
Sidney R. Knafel......................................... 122,340 55,033 177,373 1.06
Alan J. Patricof......................................... 13,126 55,033 68,159 *
Warren Potash............................................ 94 55,033 55,127 *
All directors and officers as a group (8 in number)...... 806,488 1,307,495 2,113,983 11.73
FMR Corp.(3)............................................. 2,231,890
82 Devonshire Street
Boston, MA 02109
Fidelity International Limited(3)
Pembroke Hall
42 Crow Lane
Hamilton, Bermuda
Massachusetts Financial Services Company(4).............. 1,871,113
500 Boylston Street
Boston, MA 02116
President and Fellows of Harvard University(5)........... 905,325
600 Atlantic Avenue
Boston, MA 02210
T. Rowe Price Associates, Inc.(6)........................ 855,300
100 East Pratt Street
Baltimore, MD 21202
HBK Investments L.P.(7).................................. 804,000
HBK Finance L.P.(7)
777 Main Street, Suite 2750
Fort Worth, TX 76102
</TABLE>
- ------------------------
* Represents less than one percent.
(1) Includes shares of Common Stock purchasable upon the exercise of options
which are exercisable or become so in the next 60 days ("Presently
Exercisable Options").
(2) Includes Common Stock and Presently Exercisable Options.
(3) Based solely upon Form 13-D, Amendment No. 4, filed with the Securities and
Exchange Commission ("SEC") on October 9, 1998, by FMR Corp. and Form 13-D,
Amendment No. 4, filed with the SEC on October 9, 1998, by Fidelity
International Limited. FMR Corp. and Fidelity International Limited have
each filed a Form 13-D in which they have aggregated their holdings on a
voluntary basis, although each has stated its view that the two entities are
not acting as a "group" for purposes of Section 13(d) under the Securities
Exchange Act of 1934, as amended, and that they are not otherwise required
to attribute to each other the beneficial ownership of securities
beneficially owned by the other.
(4) Based solely upon a Form 13-G, Amendment No. 2, filed with the SEC on
February 13, 1998, by Massachusetts Financial Services Company.
(5) Based solely upon a Form 13-G, filed with the SEC on February 13, 1998, by
President and Fellows of Harvard College.
(6) Based solely upon a Form 13-G, filed with the SEC on February 6, 1998, by T.
Rowe Price Associates, Inc.
(7) Based solely upon a Form 13-D, Amendment No. 4, filed with the SEC on March
23, 1998, by HBK Investments L.P. and HBK Finance L.P.
27
<PAGE>
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following Summary Compensation Table summarizes the compensation
received by the Company's Chief Executive Officer and the Company's other four
most highly compensated executive officers for the three years ended December
31, 1997.
SUMMARY COMPENSATION TABLE*
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS--
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#)(1) COMPENSATION (2)(#)
- ---------------------------------------------------- --------- ----------- ---------- -------------- -------------------------
<S> <C> <C> <C> <C> <C>
ANNUAL COMPENSATION (1)
-----------------------
William B. Ginsberg................................. 1997 $ 18,000 $ 120,000 90,000 --
Chairman, President and Chief..................... 1996 $ 18,000 $ 130,000 75,000 --
Executive Officer................................. 1995 $ 18,000 $ 100,000 112,500 --
J. Barclay Knapp.................................... 1997 $ 18,000 -- -- --
Executive Vice President and...................... 1996 $ 18,000 -- -- --
Chief Operating Officer........................... 1995 $ 18,000 -- 7,500 --
Richard J. Lubasch.................................. 1997 $ 12,000 $ 40,000 30,000 --
Senior Vice President--General Counsel,........... 1996 $ 12,000 $ 50,000 22,500 --
Treasurer and Secretary 1995 $ 12,000 $ 55,000 22,500 --
Stanton N. Williams (2)............................. 1997 $ 12,000 $ 40,000 30,000 --
Vice President-................................... 1996 $ 12,000 $ 50,000 30,000 --
Chief Financial Officer........................... 1995 $ 12,000 $ 55,000 45,000 --
Gregg Gorelick...................................... 1997 $ 9,000 $ 10,000 7,500 --
Vice President--Controller........................ 1996 $ 9,000 $ 20,000 7,500 --
1995 $ 9,000 $ 25,000 3,750 --
</TABLE>
- ------------------------
* CCI provided management, financial, legal and technical services to the
Company until the CCI Merger. Amounts charged to the Company by CCI
consisted of salaries and indirect costs allocated to the Company. For the
years ended December 31, 1996 and 1995, CCI charged the Company $232,000 and
$896,000, respectively. In August 1996, upon the CCI Merger, NTL commenced
providing management, financial, legal and technical services to the
Company. Amounts charged to the Company consist of salaries and indirect
costs allocated to the Company. In 1997 and 1996, NTL charged the Company
$871,000 and $351,000, respectively. It is not practicable to determine the
amounts of these expenses that would have been incurred had the Company
operated as an unaffiliated entity. However, in the opinion of management of
the Company, the allocation method is reasonable. The named executives had
received salaries from CCI and now receive salaries from NTL and spend
portions of their time providing executive management to the Company.
(1) After giving retroactive effect to the 3-for-2 stock split by way of stock
dividend, paid on April 14, 1998.
(2) Mr. Williams was appointed Vice President and Chief Financial Officer in
March 1995.
28
<PAGE>
STOCK OPTIONS
The following table provides information on stock option grants made during
1997 to the Named Executives and the potential realizable values of the options,
based upon certain assumptions.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
NUMBER OF % OF TOTAL EXERCISE OPTION TERM (2)
SECURITIES OPTIONS GRANTED PRICE ----------------------
UNDERLYING OPTIONS TO EMPLOYEES IN ($/SHARES) OR EXPIRATION 5%($) 10%($)
NAME GRANTED (#)(1) FISCAL YEAR BASE PRICE DATE $30.41 $48.42
- --------------------------------- ------------------- ----------------- ------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INDIVIDUAL GRANTS
--------------------------------------
William B. Ginsberg.............. 90,000 53.10% $ 18.67 03/10/07 1,056,600 2,677,800
J. Barclay Knapp................. -- -- -- -- -- --
Richard J. Lubasch............... 30,000 17.70 18.67 03/10/07 352,200 892,600
Stanton N. Williams.............. 30,000 17.70 18.67 03/10/07 352,200 892,600
Gregg Gorelick................... 7,500 4.42 18.67 03/10/07 88,050 223,150
</TABLE>
- ------------------------
(1) All options were granted on March 11, 1997 at an exercise price equal to the
closing price of the Common Stock on the Nasdaq Stock Market's National
Market ("NM") on such date after giving retroactive effect to the 3-for-2
stock split by way of stock dividend, paid on April 14, 1998; 20% were
exercisable upon issuance, 20% became exercisable on January 1, 1998 and an
additional 20% will become exercisable on each of January 1, 1999, 2000 and
2001. Upon a change of control of the Company all unvested options become
fully vested and exercisable.
(2) The amounts shown in these columns are the potential realizable value of
options granted at assumed rates of stock price appreciation (5% and 10%)
specified by the SEC, and have not been discounted to reflect the present
value of such amounts. The assumed rates of stock price appreciation are not
intended to forecast the future appreciation of the Common Stock.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY OPTIONS
VALUE OPTIONS AT FY-END (#) AT FY-END ($)*
SHARES ACQUIRED REALIZED EXERCISABLE (E)/ EXERCISABLE (E)/
NAME ON EXERCISE (#) ($) UNEXERCISABLE(U) UNEXERCISABLE(U)
- ------------------------------------- --------------- ----------- --------------------- --------------------
<S> <C> <C> <C> <C>
567,423(E) 12,867,447(E)
William B. Ginsberg.................. -- -- 195,750(U) 2,116,950(U)
264,779(E) 7,239,230(E)
J. Barclay Knapp..................... -- -- 18,750(U) 318,910(U)
94,535(E) 2,083,872(E)
Richard J. Lubasch................... -- -- 48,750(U) 495,630(U)
81,000(E) 979,080(E)
Stanton N. Williams.................. 34,877 569,958 69,000(U) 698,520(U)
53,378(E) 1,454,066(E)
Gregg Gorelick....................... 2,250 33,818 13,125(U) 142,565(U)
</TABLE>
- ------------------------
* Based on the closing price on the NM on December 31, 1997 of $31.17, after
giving retroactive effect to the 3-for-2 stock split by way of stock
dividend, paid on April 14, 1998.
29
<PAGE>
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS
In furtherance of the Company's incentive-oriented compensation goals set
forth above, cash compensation (annual base salary and bonus) is generally set
below levels paid by comparable sized telecommunications companies and is
supplemented by equity-based option grants. In 1997, Messrs. Ginsberg, Lubasch,
Williams and Gorelick received bonuses of $120,000, $40,000, $40,000, and
$10,000, respectively. This level of emphasis on bonuses reflects the
Committee's view that a meaningful percentage of compensation should be
performance based and the Committee intends to continue to determine bonuses in
this light.
COMPENSATION AND OPTION COMMITTEES' REPORT ON EXECUTIVE COMPENSATION
The Compensation and Option Committees (the "Committees") are responsible
for setting the Company's compensation policy, determining its executive officer
compensation program and administering the Company's Stock Option Plan. The
following is the Committees' report to the Board of Directors on executive
compensation for 1997.
POLICY
The Compensation and Option Committee of the Board of Directors (the
"Committee") has the responsibility for the design and implementation of the
Company's executive compensation program. The Committee is composed entirely of
independent non-employee directors.
The Company's executive compensation program is designed to be closely
linked to corporate performance and return to shareholders. To this end, the
Company has developed an overall compensation strategy and specific compensation
plans that tie a very significant portion of an executive's aggregate
compensation to the appreciation in the Company's stock price. In addition,
executive bonuses are linked to the achievement of operational goals and
therefore relate to shareholder return. The overall objective of this strategy
is to attract and retain the best possible executive talent, to motivate these
executives to achieve the goals inherent in the Company's business strategy and
to link executive and shareholder interests through equity-based compensation,
thereby seeking to enhance the Company's profitability and shareholder value.
The Committee also realizes that for Messrs. Ginsberg, Knapp, Lubasch,
Williams and Gorelick, the cash portion of their compensation is small in light
of their compensation from NTL (which is reimbursed to NTL by the Company based
on a reasonable estimate of the time these executives spent on Company activity
in the relevant period). The Committee believes that for such executives
stock-based compensation becomes even more significant.
Each year the Committee conducts a review of the Company's executive
compensation program to determine the appropriate level and forms of
compensation. Such review permits an annual evaluation of the link between the
Company's performance and its executive compensation.
In assessing compensation levels for the named executives, the Committee
recognizes the fact that such executives have participated in the development of
the Company (and its predecessors) from its earliest stages, and have produced
consistent significant long-term value for stockholders of the Company (and its
predecessors) over such period. In determining the annual compensation for the
Chief Executive Officer, the Company uses the same named criteria as it does for
the other named executives.
BASE SALARY AND BONUS
In furtherance of the Company's incentive-oriented compensation goals set
forth above, cash compensation (annual base salary and bonus) is generally set
below levels paid by comparable sized telecommunications companies and is
supplemented by equity-based option grants. In 1997, Messrs. Ginsberg, Lubasch,
30
<PAGE>
Williams and Gorelick received bonuses of $120,000, $40,000, $40,000, and
$10,000, respectively. This level of emphasis on bonuses reflects the
Committee's view that a meaningful percentage of compensation should be
performance based and the Committee intends to continue to determine bonuses in
this light.
STOCK OPTIONS
Under the Company's stock option plan, stock options were granted to certain
Company executive officers during 1997. Information with respect to such option
grants to the named executives is set forth in the "Option Grants Table."
Stock options are designed to align the interest of executives with those of
the stockholders. The options generally are granted at an exercise price equal
to the market price of the Common Stock on the date of grant and vest over a
period of five years. Accordingly, the executives are provided additional
incentive to create shareholder value over the long term since the full benefit
of the options cannot be realized unless stock price appreciation occurs over a
number of years.
In determining individual option grants, the Committee takes into
consideration the number of options previously granted to that individual, the
amount of time and effort dedicated to the Company during the preceding year and
expected commitment to the Company on a forward-looking basis. The Committee
also strives to provide each option recipient with an appropriate incentive to
increase shareholder value, taking into consideration their cash compensation
levels.
In 1995, 1996 and 1997, after giving retroactive effect to the 3-for-2 stock
split by way of stock dividend, paid on April 14, 1998, Mr. Ginsberg received
options to purchase 112,500 shares of Common Stock at an exercise price of
$27.83, 75,000 shares of Common Stock at an exercise price of $22.17 and 90,000
shares of Common Stock at an exercise price of $18.67, respectively (the fair
market value of the Common Stock on the dates of grant). Mr. Ginsberg now owns
359,746 shares of the Company's Common Stock and holds options to purchase an
additional 763,173 shares. The Committee believes that the equity interest in
the Company held by the named executive officers, including Mr. Ginsberg,
represents a significant incentive to increase overall shareholder value.
COMPENSATION DEDUCTION CAP POLICY
In 1994, the Company's stockholders approved an amendment to the Company's
stock option plan to, among other things, bring the plan into compliance with
the rules regarding non-deductibility of compensation in excess of $1 million
under sec.162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
Any compensation realized from the exercise of such stock options granted at
fair market value as of the date of grant thus would generally be exempt from
the deduction limitations under sec.162(m) of the Code. Other annual
compensation, such as salary and bonus, is not expected to exceed $1 million per
executive.
The Compensation and Option Committee consists of Sidney R. Knafel and Del
Mintz
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of the issued and
outstanding Shares, to file with the SEC and the NASDAQ initial reports of
ownership and reports of changes in beneficial ownership of Common Stock and
other equity securities of the Company, officers, directors and greater than 10%
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to the
officers, directors and greater than 10% beneficial owners were complied with
during 1997.
31
<PAGE>
CERTAIN TRANSACTIONS IN SHARES OF COMMON STOCK OF THE COMPANY
EFFECTIVE DURING PAST 60 DAYS
SHARE TRANSACTIONS LAST 60 DAYS. Except as set forth below, no transactions
in the Shares have been effected during the past 60 days by the Company or, to
the best of the Company's knowledge, by any executive officer, director,
affiliate or subsidiary of the Company.
On October 27, and October 30, 1998, Alan J. Patricof, member of the Board
of Directors, sold 5,000 Shares at $60.75 and 1,000 Shares at $62.375
respectively.
32
<PAGE>
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
and
KENSINGTON ACQUISITION SUB, INC.
AGREEMENT AND PLAN OF MERGER
Dated as of December 11, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
ARTICLE I. THE TENDER OFFER
<S> <C> <C>
SECTION 1.1. The Offer .........................................................................................2
SECTION 1.2. Company Action.....................................................................................4
SECTION 1.3. Directors .........................................................................................6
ARTICLE II. THE MERGER
SECTION 2.1. The Merger ........................................................................................8
SECTION 2.2. Effective Time.....................................................................................8
SECTION 2.3. Closing ...........................................................................................8
SECTION 2.4. Effect of the Merger...............................................................................8
SECTION 2.5. Subsequent Actions.................................................................................8
SECTION 2.6. Certificate of Incorporation; By-Laws; Directors and Officers......................................9
SECTION 2.7. Stockholders' Meeting..............................................................................9
SECTION 2.8. Merger Without Meeting of Stockholders............................................................10
SECTION 2.9. Conversion of Securities..........................................................................10
SECTION 2.10. Dissenting Shares.................................................................................11
SECTION 2.11. Surrender of Shares; Stock Transfer Books.........................................................12
SECTION 2.12. Stock Plans ......................................................................................13
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 3.1. Corporate Organization............................................................................14
SECTION 3.2. Authority Relative to this Agreement..............................................................15
SECTION 3.3. No Conflict; Required Filings and Consents........................................................15
SECTION 3.4. Financing Arrangements............................................................................16
SECTION 3.5. No Prior Activities...............................................................................16
SECTION 3.6. Brokers ..........................................................................................16
SECTION 3.7. Proxy Statement...................................................................................16
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.1. Organization and Qualification; Subsidiaries......................................................17
SECTION 4.2. Capitalization....................................................................................17
SECTION 4.3. Authority Relative to this Agreement; Company Action..............................................18
SECTION 4.4. No Conflict; Required Filings and Consents........................................................19
SECTION 4.5. SEC Filings; Financial Statements.................................................................20
SECTION 4.6. Undisclosed Liabilities...........................................................................21
SECTION 4.7. Absence of Certain Changes or Events..............................................................21
SECTION 4.8. Litigation .......................................................................................21
SECTION 4.9. Employee Benefit Plans............................................................................22
SECTION 4.10. Proxy Statement...................................................................................24
SECTION 4.11. Brokers ..........................................................................................24
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 4.12. Conduct of Business...............................................................................24
SECTION 4.13. Compliance with Law...............................................................................25
SECTION 4.14. Taxes ............................................................................................26
SECTION 4.15. Intellectual Property.............................................................................28
SECTION 4.16. Employment Matters................................................................................30
SECTION 4.17. Vote Required.....................................................................................31
SECTION 4.18. Environmental Matters.............................................................................31
SECTION 4.19. Real Property.....................................................................................32
SECTION 4.20. Title and Condition of Properties.................................................................32
SECTION 4.21. Contracts ........................................................................................33
SECTION 4.22. Potential Conflicts of Interest...................................................................33
SECTION 4.23. Insurance ........................................................................................33
SECTION 4.24. Opinion of Financial Advisor......................................................................34
SECTION 4.25. Investment Company................................................................................34
SECTION 4.26. Full Disclosure...................................................................................34
ARTICLE V. CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1. Acquisition Proposals.............................................................................34
SECTION 5.2. Conduct of Business by the Company Pending the Merger.............................................35
SECTION 5.3. No Solicitation; Board Recommendation.............................................................37
ARTICLE VI. ADDITIONAL AGREEMENTS
SECTION 6.1. Proxy Statement...................................................................................39
SECTION 6.2. Meeting of Stockholders of the Company............................................................39
SECTION 6.3. Additional Agreements.............................................................................40
SECTION 6.4. Notification of Certain Matters...................................................................40
SECTION 6.5. Access to Information.............................................................................40
SECTION 6.6. Public Announcements..............................................................................41
SECTION 6.7. Best Efforts; Cooperation.........................................................................41
SECTION 6.8. Agreement to Defend and Indemnify.................................................................41
SECTION 6.9. Debt Offer .......................................................................................43
SECTION 6.10. Qualified Electing Fund Documentation.............................................................44
SECTION 6.11. Omnitel Agreement..................................................................................44
ARTICLE VII. CONDITIONS OF MERGER
SECTION 7.1. Offer ............................................................................................45
SECTION 7.2. Stockholder Approval..............................................................................45
SECTION 7.3. No Challenge......................................................................................45
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination ......................................................................................45
SECTION 8.2. Effect of Termination.............................................................................47
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE IX. GENERAL PROVISIONS
SECTION 9.1. Non-Survival of Representations, Warranties and Agreements........................................48
SECTION 9.2. Notices ..........................................................................................48
SECTION 9.3. Expenses .........................................................................................49
SECTION 9.4. Certain Definitions...............................................................................49
SECTION 9.5. Headings .........................................................................................50
SECTION 9.6. Severability......................................................................................50
SECTION 9.7. Entire Agreement; No Third-Party Beneficiaries....................................................50
SECTION 9.8. Assignment .......................................................................................50
SECTION 9.9. Governing Law.....................................................................................51
SECTION 9.10. Amendment ........................................................................................51
SECTION 9.11. Waiver ...........................................................................................51
SECTION 9.12. Counterparts......................................................................................51
ANNEX I Conditions to the Offer
Exhibit A Option Agreement
Exhibit B Stockholders Agreement
SCHEDULES
Schedule 4.1 Equity Interests
Schedule 4.2 Capitalization
Schedule 4.4 No Conflict; Required Filings and Consents
Schedule 4.6 Liabilities
Schedule 4.7 Conduct of Business; Certain Changes or Events
Schedule 4.8 Litigation
Schedule 4.9 Employment Plans
Schedule 4.12 Licenses and Permits
Schedule 4.13 Compliance with Law
Schedule 4.14 Net Operating Loss and Credit
Schedule 4.15 Intellectual Property
Schedule 4.18 Environmental Matters
Schedule 4.21 Contracts
Schedule 4.22 Potential Conflicts of Interest
Schedule 5.2 Conduct of Business
Schedule 6.8 D & O Insurance
Schedule 6.9 Debt Offer
</TABLE>
iii
<PAGE>
Table of Definitions
<TABLE>
<S> <C>
Affiliate......................................................9.4(a)
Agreement....................................................Recitals
Appointment Date..................................................5.2
Audit.........................................................4.14(o)
Balance Sheet.................................................4.14(f)
Board of Directors...........................................Recitals
Certificates..................................................2.11(b)
CCPR..........................................................4.15(a)
Closing...........................................................2.3
Closing Date......................................................2.3
Code...........................................................4.9(a)
Company......................................................Recitals
Company Agreement.............................................4.12(a)
Company Common Stock.........................................Recitals
Company Preferred Stock..........................................4.2?
Computer Software.............................................4.15(a)
Confidentiality Agreement......................................6.5(b)
Control........................................................9.4(b)
Corecomm......................................................4.15(a)
Debt Documents....................................................6.9
Debt Offer........................................................6.9
Delaware Law.................................................Recitals
Disclosure Schedule........................................Article IV
Dissenting Shares.............................................2.10(a)
Distribution Date..........................................1.2(a)(ii)
Effective Time....................................................2.2
Employee Benefit Plans.........................................4.9(a)
Environmental Laws............................................4.18(a)
ERISA..........................................................4.9(a)
ERISA Affiliate................................................4.9(a)
Exchange Act...................................................1.1(a)
Exchange Agent................................................2.11(a)
Expiration Date................................................1.1(b)
Financial Statements...........................................4.5(b)
GAAP...........................................................4.5(b)
Governmental Authority.........................................3.3(b)
HSR Act........................................................3.3(b)
Indemnified Parties............................................6.8(a)
Independent Directors..........................................1.3(a)
Intellectual Property.........................................4.15(b)
Licenses and Permits..........................................4.12(b)
Lien...........................................................9.4(c)
Mannesmann.......................................................4.10
Material Adverse Effect...........................................4.1
Merger.......................................................Recitals
Merger Consideration...........................................2.9(a)
Minimum Condition.............................................Annex 1
Multiemployer Plan.............................................4.9(a)
NTL...........................................................4.15(a)
Offer........................................................Recitals
Offer Documents................................................1.1(c)
Offer Price..................................................Recitals
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Offer to Purchase..............................................1.1(c)
Olivetti.........................................................4.10
Omnitel..........................................................4.12
Option Agreement.............................................Recitals
Option Plans..................................................2.12(a)
Option Price..................................................2.12(a)
Options.......................................................2.12(a)
Other Stock Plan..............................................2.12(b)
PBGC...........................................................4.9(e)
Pension Plans..................................................4.9(a)
Person.........................................................9.4(d)
PFIC..........................................................4.14(g)
Proxy Statement............................................2.7(a)(ii)
Purchaser....................................................Recitals
Purchaser Information.............................................3.7
Purchaser Representatives......................................6.5(b)
QEF Election..................................................4.14(g)
Rights.......................................................Recitals
Rights Agreement.............................................Recitals
Schedule 14D-1.................................................1.1(c)
Schedule 14D-9.................................................1.2(b)
SEC............................................................1.1(b)
SEC Reports....................................................4.5(a)
Securities Act.................................................4.5(a)
Senior Notes......................................................6.9
Shares.......................................................Recitals
Special Meeting.............................................2.7(a)(i)
Stockholders Agreement.......................................Recitals
Subsequent Determination.......................................5.3(b)
Subsidiary........................................................4.1
Superior Proposal..............................................5.3(b)
Surviving Corporation.............................................2.1
Takeover Proposal.................................................5.1
Takeover Proposal Interest........................................5.1
Tax Authority.................................................4.14(o)
Tax Return....................................................4.14(p)
Taxes.........................................................4.14(o)
Termination Fee................................................8.2(b)
Treasury Regulations..........................................4.14(m)
Voting Debt.......................................................4.2
Warrants..........................................................4.2
Wasserstein Perella.......................................1.2(a)(iii)
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 11, 1998
(the "Agreement"), between Cellular Communications International, Inc., a
Delaware corporation (the "Company"), and Kensington Acquisition Sub, Inc., a
Delaware corporation (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Boards of Directors of each of the Company and
the Purchaser have determined that it is in the best interests of their
respective stockholders for the Purchaser to acquire the Company upon the terms
and subject to the conditions set forth herein; and
WHEREAS, in furtherance thereof, it is proposed that the
Purchaser will make a cash tender offer (the "Offer") to acquire all shares (the
"Shares") of the issued and outstanding common stock, par value $.01 per share,
of the Company ("Company Common Stock"), including the associated Preferred
Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of December 19, 1990, between the Company and Continental Stock
Transfer Trust Company (the "Rights Agreement"), for $65.75 per Share (the
"Offer Price"), or such higher price as may be paid in the Offer, in each case
net to the seller in cash;
WHEREAS, also in furtherance of such acquisition, the Boards
of Directors of the Company and the Purchaser have each approved the merger (the
"Merger") of the Purchaser with and into the Company following the Offer in
accordance with the General Corporation Law of the State of Delaware ("Delaware
Law") and upon the terms and subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company (the "Board of
Directors") has unanimously approved this Agreement and has resolved to
recommend acceptance of the Offer and the Merger to the holders of the Shares;
WHEREAS, as a condition and inducement to the Purchaser to
enter into this Agreement and to incur the obligations set forth herein,
concurrently with the execution and delivery of this Agreement, the Purchaser
and the Company are entering into an Option Agreement in the form of Exhibit A
hereto (the "Option Agreement"), pursuant to which, among other things, the
Company has granted the Purchaser an option to purchase certain newly-issued
shares of Company Common Stock subject to certain conditions; and
WHEREAS, as a condition and inducement to the Purchaser to
enter into this Agreement, the Board of Directors has approved the terms of a
Stockholders Agreement in the form of Exhibit B hereto (the "Stockholders
Agreement") to be entered
<PAGE>
into by the Purchaser, the Company, and the directors, officers and certain
stockholders of the Company concurrently with the execution of this Agreement,
pursuant to which each such Person (as defined below) has agreed to vote its
Shares for approval of the Merger and this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements herein contained,
and intending to be legally bound hereby, the Company and the Purchaser hereby
agree as follows:
ARTICLE I.
THE TENDER OFFER
SECTION 1.1. The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Section 8.1 hereof and none of the events set
forth in Annex I hereto shall have occurred and be existing, the Purchaser or a
direct or indirect subsidiary thereof shall commence (within the meaning of Rule
14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"),) the Offer as promptly as practicable, but in no event later than five
business days following the execution of this Agreement. The obligation of the
Purchaser to accept for payment any Shares tendered shall be subject to the
satisfaction of only those conditions set forth in Annex I. The Purchaser
expressly reserves the right to waive any such condition or to increase the
Offer Price. The Offer Price shall be net to the seller in cash. The Company
agrees that no Shares held by the Company will be tendered pursuant to the
Offer.
(b) Without the prior written consent of the Company, the
Purchaser shall not (i) decrease the Offer Price or change the form of
consideration payable in the Offer, (ii) decrease the number of Shares sought,
(iii) amend or waive satisfaction of the Minimum Condition (as defined in Annex
I) or (iv) impose additional conditions to the Offer or amend any other term of
the Offer in any manner adverse to the holders of Shares; provided however, that
if on the initial scheduled expiration date of the Offer (the "Expiration Date")
which shall be twenty (20) business days after the date the Offer is commenced,
all conditions to the Offer shall not have been satisfied or waived, the
Purchaser may, from time to time, in its sole discretion, extend the expiration
date (any such extension to be for ten (10) business days or less); provided,
however, that the expiration date of the Offer may not be extended beyond May
15, 1999. The Purchaser shall, on the terms and subject to the prior
satisfaction or waiver of the conditions of the Offer, accept for payment and
purchase, as soon as practicable after the expiration of the Offer, all Shares
validly tendered and not withdrawn prior to the expiration of the Offer;
provided, however, that the Purchaser may (i) extend the Expiration Date
(including as it may be extended) for up to ten
2
<PAGE>
(10) business days in connection with an increase in the consideration to be
paid pursuant to the Offer so as to comply with applicable rules and regulations
of the Securities and Exchange Commission (the "SEC"), and (ii) if, immediately
prior to the Expiration Date (as it may be extended), the Shares tendered and
not withdrawn pursuant to the Offer equal less than 90% of the outstanding
Shares, the Purchaser may extend the Offer for a period not to exceed fifteen
(15) business days, notwithstanding that all conditions to the Offer are
satisfied as of such Expiration Date; provided, however, that during any such
extension of the Offer, the Purchaser irrevocably waives all of the conditions
to the Offer set forth in Annex I (other than the Minimum Condition (as defined
in Annex I)). It is agreed that the conditions to the Offer set forth in Annex I
are for the benefit of the Purchaser and may be asserted by the Purchaser
regardless of the circumstances giving rise to any such condition or, except
with respect to the Minimum Condition, may be waived by the Purchaser, in whole
or in part at any time and from time to time, in its sole discretion.
(c) The Offer shall be made by means of an offer to purchase
(the "Offer to Purchase") having only the conditions set forth in Annex I
hereto. On the date the Offer is commenced, the Purchaser shall file with the
SEC a Tender Offer Statement on Schedule 14D-1 (together with all amendments and
supplements thereto, and including the exhibits thereto, the "Schedule 14D-1").
The Schedule 14D-1 will contain (including as an exhibit) or incorporate by
reference the Offer to Purchase and forms of the related letter of transmittal
and summary advertisement (which documents, together with any supplements or
amendments thereto, and any other SEC schedule or form which is filed in
connection with the Offer and related transactions, are referred to collectively
herein as the "Offer Documents"). The Offer Documents will comply in all
material respects with the provisions of applicable Federal securities laws and,
on the date filed with the SEC and on the date first published, mailed or given
to the Company's stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Purchaser with respect to information furnished by
the Company to the Purchaser, in writing, expressly for inclusion in the Offer
Documents. The information supplied by the Company to the Purchaser, in writing,
expressly for inclusion in the Schedule 14D-1 will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(d) The Purchaser agrees to take all steps necessary to cause
the Schedule 14D-1 to be filed with the SEC and the Offer Documents to be
disseminated to holders of Shares, in each
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case as and to the extent required by applicable Federal securities laws. The
Company and its counsel shall be given a reasonable opportunity to review and
comment on any Offer Documents before they are filed with the SEC. Each of the
Purchaser and the Company agrees promptly (i) to correct any information
provided by it for use in the Schedule 14D-1 or the Offer Documents if and to
the extent that such information shall have become false or misleading in any
material respect and (ii) to supplement the information provided by it
specifically for use in the Schedule 14D-1 or the Offer Documents to include any
information that shall become necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
Purchaser further agrees to take all steps necessary to cause the Schedule 14D-1
as so corrected to be filed with the SEC and to be disseminated to the Company's
stockholders, in each case as and to the extent required by applicable Federal
securities laws. In addition, the Purchaser agrees to provide the Company and
its counsel with any comments, whether written or oral, that the Purchaser or
its counsel may receive from time to time from the SEC or its staff with respect
to the Schedule 14D-1 promptly after the receipt of such comments.
(e) The Purchaser shall have available on a timely basis the
funds necessary to accept for payment, and pay for, any Shares that the
Purchaser becomes obligated to pay for pursuant to the Offer or pursuant to
Article II hereof.
SECTION 1.2. Company Action.
(a) The Company hereby approves of and consents to the Offer
and represents and warrants that:
(i) the Board of Directors, at a meeting duly called and held
on December 10, 1998, at which a majority of the Directors were
present: duly and unanimously approved and adopted this Agreement, the
Option Agreement, the Stockholders Agreement and the transactions
contemplated hereby and thereby, including the Offer and the Merger,
resolved to recommend that the stockholders of the Company accept the
Offer, tender their Shares pursuant to the Offer and approve this
Agreement and the transactions contemplated hereby, including the
Merger; and determined that this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, are fair to
and in the best interests of the holders of Shares; provided, however,
that prior to the purchase by the Purchaser of Shares pursuant to the
Offer, the Company may modify, withdraw or change such recommendation
to the extent that the Board of Directors determines, after
consultation with outside legal counsel to the Company, that the
failure to so withdraw, modify or change such recommendation would
likely breach the fiduciary duties of the Board of Directors under
applicable laws;
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(ii) with respect to the Rights Agreement, the Company has
duly amended the Rights Agreement to provide that (A) neither this
Agreement nor any of the transactions contemplated hereby, including
the Offer and the Merger, will result in the occurrence of a
"Distribution Date" (as such term is defined in the Rights Agreement)
or otherwise cause the Rights to become exercisable by the holders
thereof, and (B) the Rights shall automatically on and as of the
Effective Time (as defined below) be void and of no further force or
effect; and
(iii) Wasserstein Perella & Co., Inc. ("Wasserstein Perella")
has delivered to the Board of Directors its written opinion that as of
the date hereof the consideration to be received by the stockholders of
the Company pursuant to each of the Offer and the Merger is fair to the
stockholders of the Company from a financial point of view. The Company
has been authorized by Wasserstein Perella to permit the inclusion of
such fairness opinion (or a reference thereto) in the Offer Documents
and in the Schedule 14D-9 referred to below. The Company hereby
consents to the inclusion in the Offer Documents of the recommendations
of the Board of Directors described in this Section 1.2(a).
(b) The Company shall file with the SEC, no later than the
fifth business day following the public announcement of this Agreement, a Tender
Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
and all amendments or supplements thereto, and including the exhibits thereto,
the "Schedule 14D-9"). The Schedule 14D-9 will comply in all material respects
with the provisions of all applicable law, including Federal securities law and,
on the date filed with the SEC and on the date first published, sent or given to
the Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by the Company with respect to information furnished by the Purchaser, in
writing, expressly for inclusion in the Schedule 14D-9. The Company further
agrees to take all steps necessary to cause the Schedule 14D-9 to be filed with
the SEC and to be disseminated to holders of the Shares, in each case as and to
the extent required by applicable Federal securities laws. The Company shall
mail, or cause to be mailed, such Schedule 14D-9 to the stockholders of the
Company at the same time the Offer Documents are first mailed to the
stockholders of the Company together with such Offer Documents. The Schedule
14D-9 and the Offer Documents shall contain the recommendations of the Board of
Directors described in Section 1.2(a) hereof. The Company agrees promptly to
correct the Schedule 14D-9 if and to the extent that it shall have become false
or misleading in any material respect (and the Purchaser, with respect to
written information supplied
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by it specifically for use in the Schedule 14D-9, shall promptly notify the
Company of any required corrections of such information and cooperate with the
Company with respect to correcting such information) and to supplement the
information contained in the Schedule 14D-9 to include any information that
shall become necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company further
agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected
to be filed with the SEC and to be disseminated to the stockholders of the
Company, in each case as and to the extent required by applicable law, including
Federal securities laws. The Purchaser and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 before it is
filed with the SEC. In addition, the Company agrees to provide the Purchaser and
its counsel with any comments, whether written or oral, that the Company or its
counsel may receive from time to time from the SEC or its staff with respect to
the Schedule 14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company, promptly upon
execution of this Agreement, shall furnish or cause to be furnished to the
Purchaser mailing labels containing the names and addresses of all record
holders of Shares, non-objecting beneficial owner lists and security position
listings of Shares held in stock depositories, each as of a recent date, and
shall promptly furnish the Purchaser with such additional information
(including, but not limited to, updated lists and computer files containing the
names of stockholders and their addresses, mailing labels and security position
listings) and such other information and assistance as the Purchaser or its
agents may reasonably request for the purpose of communicating the Offer to the
record and beneficial holders of Shares.
SECTION 1.3. Directors.
(a) Promptly upon the purchase by the Purchaser of any Shares
pursuant to the Offer, and from time to time thereafter as Shares are acquired
by the Purchaser, the Purchaser shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors as
will give the Purchaser, subject to compliance with Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder, representation on the Board
of Directors equal to at least that number of directors which equals the product
of the total number of directors on the Board of Directors (giving effect to the
directors appointed or elected pursuant to this sentence and including current
directors serving as officers of the Company) multiplied by the percentage that
the aggregate number of Shares beneficially owned by the Purchaser or any
affiliate of the Purchaser (including for purposes of this Section 1.3 such
Shares as are accepted for payment pursuant to the Offer, but excluding Shares
held by the Company and excluding Shares beneficially owned by the Purchaser by
virtue of the Option Agreement) bears
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to the number of Shares outstanding. At such times, the Company will also cause
each committee of the Board of Directors to include Persons designated by the
Purchaser constituting at least the same percentage of each such committee or
board as the Purchaser's designees are of the Board of Directors. The Company
shall, upon request by the Purchaser, promptly increase the size of the Board of
Directors or exercise its best efforts to secure the resignations of such number
of incumbent directors as is necessary to enable the Purchaser's designees to be
elected to the Board of Directors in accordance with the terms of this Section
1.3 and shall cause the Purchaser's designees to be so elected; provided,
however, that, in the event that the Purchaser's designees are appointed or
elected to the Board of Directors, until the Effective Time (as defined below)
the Board of Directors shall have at least one director who is a director on the
date hereof and who is neither an officer of the Company nor a designee,
stockholder, affiliate or associate (within the meaning of the Federal
securities laws) of the Purchaser (one or more of such directors, the
"Independent Directors"); provided, further, that if no Independent Directors
remain, the other directors shall designate one Person to fill one of the
vacancies who shall not be either an officer of the Company or a designee,
stockholder, affiliate or associate of the Purchaser, and such Person shall be
deemed to be an Independent Director for purposes of this Agreement.
(b) Subject to applicable law, the Company shall promptly take
all action necessary pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder in order to fulfill its obligations under this
Section 1.3 and shall include in the Schedule 14D-9 mailed to stockholders
promptly after the commencement of the Offer (or an amendment thereof or an
information statement pursuant to Rule 14f-1 if the Purchaser has not
theretofore designated directors) such information with respect to the Company
and its officers and directors as is required under Section 14(f) and Rule 14f-1
in order to fulfill its obligations under this Section 1.3. The Purchaser will
supply the Company and be solely responsible for any information with respect to
itself and its nominees, officers, directors and affiliates required by Section
14(f) and Rule 14f-1. Notwithstanding anything in this Agreement to the
contrary, in the event that the Purchaser's designees are elected to the Board
of Directors, after the acceptance for payment and purchase of Shares pursuant
to the Offer and prior to the Effective Time, the affirmative vote of a majority
of the Independent Directors shall be required to (i) amend or terminate this
Agreement on behalf of the Company, (ii) exercise or waive any of the Company's
rights or remedies hereunder, (iii) extend the time for performance of the
Purchaser's obligations hereunder or (iv) take any other action by the Company
in connection with this Agreement required to be taken by the Board of
Directors.
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ARTICLE II.
THE MERGER
SECTION 2.1. The Merger. At the Effective Time and subject to
and upon the terms and conditions of this Agreement and Delaware Law, the
Purchaser shall be merged with and into the Company, the separate corporate
existence of the Purchaser shall cease and the Company shall continue as the
surviving corporation. The Company as the surviving corporation after the Merger
hereinafter sometimes is referred to as the "Surviving Corporation."
SECTION 2.2. Effective Time. The parties hereto shall cause a
Certificate of Merger to be executed and filed on the Closing Date (as defined
below) (or on such other date as the Purchaser and the Company may agree) with
the Secretary of State of the State of Delaware, in such form as required by,
and executed in accordance with the relevant provisions of, Delaware Law. The
Merger shall become effective on the date on which the Certificate of Merger is
duly filed with the Secretary of State of the State of Delaware or such time as
is agreed upon by the parties and specified in the Certificate of Merger, and
such time is hereinafter referred to as the "Effective Time."
SECTION 2.3. Closing. The closing of the Merger (the
"Closing") shall take place at 10:00 a.m. on a date to be specified by the
parties, which shall be no later than the third business day after satisfaction
or waiver of all of the conditions set forth in Article VII hereof (the "Closing
Date"), at the offices of Willkie Farr & Gallagher, 787 Seventh Avenue, New
York, New York, unless another date or place is agreed to in writing by the
parties hereto.
SECTION 2.4. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and
franchises of the Company and the Purchaser shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and the
Purchaser shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 2.5. Subsequent Actions. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, businesses, properties or assets of either of the Company or the
Purchaser acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger or otherwise to
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carry out this Agreement, the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver, in the name and on
behalf of either the Company or the Purchaser, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of such corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, businesses, properties or assets in the
Surviving Corporation or otherwise to carry out this Agreement.
SECTION 2.6. Certificate of Incorporation; By-Laws; Directors
and Officers.
(a) Unless otherwise determined by the Purchaser before the
Effective Time, at the Effective Time the Certificate of Incorporation of the
Purchaser, as in effect immediately before the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation.
(b) The By-Laws of the Purchaser, as in effect immediately
before the Effective Time, shall be the By-Laws of the Surviving Corporation
until thereafter amended as provided by law, the Certificate of Incorporation of
the Surviving Corporation and such By-Laws.
(c) The directors of the Purchaser immediately before the
Effective Time will be the initial directors of the Surviving Corporation, and
the officers of the Company immediately before the Effective Time will be the
initial officers of the Surviving Corporation, in each case until their
successors are elected or appointed and qualified. If, at the Effective Time, a
vacancy shall exist on the Board of Directors or in any office of the Surviving
Corporation, such vacancy may thereafter be filled in the manner provided by
law.
SECTION 2.7. Stockholders' Meeting.
(a) If required by applicable law in order to consummate the
Merger, the Company, acting through its Board of Directors, shall, in accordance
with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") as promptly as
practicable following the acceptance for payment and purchase of Shares
by the Purchaser pursuant to the Offer for the purpose of considering
and taking action upon the approval of the Merger and the adoption of
this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and use
its best efforts (x) to obtain and
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furnish the information required to be included by the SEC in the Proxy
Statement (as defined below) and, after consultation with the
Purchaser, to respond promptly to any comments made by the SEC with
respect to the preliminary proxy or information statement and cause a
definitive proxy or information statement, including any amendment or
supplement thereto (the "Proxy Statement"), to be mailed to its
stockholders, provided that no amendment or supplement to the Proxy
Statement will be made by the Company without consultation with the
Purchaser and its counsel and (y) to obtain the necessary approvals of
the Merger and this Agreement by its stockholders; and
(iii) notwithstanding the provisions of Section 2.7(a)(ii)(y),
unless the Board of Directors, after consultation with outside legal
counsel to the Company, determines that to do so would likely breach
the fiduciary duties of the Board of Directors under applicable law,
include in the Proxy Statement the recommendation of the Board of
Directors that stockholders of the Company vote in favor of the
approval of the Merger and the adoption of this Agreement.
(b) The Purchaser shall vote, or cause to be voted, all of the
Shares then owned by it or any of its subsidiaries and affiliates in favor of
the approval of the Merger and the adoption of this Agreement.
SECTION 2.8. Merger Without Meeting of Stockholders.
Notwithstanding Section 2.7 hereof, in the event that the Purchaser or any
subsidiary of the Purchaser shall acquire at least 90% of the outstanding
Shares, pursuant to the Offer or otherwise, the parties hereto shall, at the
request of the Purchaser and subject to Article VII hereof, take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of stockholders of the
Company, in accordance with Section 253 of Delaware Law.
SECTION 2.9. Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of the Purchaser, the
Company or the holder of any of the following securities:
(a) Each Share issued and outstanding immediately before the
Effective Time (other than any Shares to be cancelled pursuant to Section 2.9(b)
and any Dissenting Shares (as defined in Section 2.10(a)) shall be cancelled and
extinguished and be converted into the right to receive the Offer Price in cash
payable to the holder thereof, without interest (the "Merger Consideration"),
upon surrender of the certificate formerly representing such Share in the manner
provided in Section 2.11 hereof. All such Shares, when so converted, shall no
longer be outstanding and shall automatically be cancelled and retired and
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shall cease to exist, and each holder of a certificate representing any such
Shares shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration therefor upon the surrender of such certificate
in accordance with Section 2.11 hereof, without interest.
(b) Each Share held in the treasury of the Company and each
Share owned by the Purchaser or any direct or indirect wholly owned subsidiary
of the Purchaser immediately before the Effective Time shall be cancelled and
extinguished and no payment or other consideration shall be made with respect
thereto.
(c) Each share of common stock, par value $.01 per share, of
the Purchaser issued and outstanding immediately before the Effective Time shall
thereafter represent one validly issued, fully paid and nonassessable share of
common stock, par value $.01 per share, of the Surviving Corporation.
SECTION 2.10. Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, any Shares held by a holder who has demanded and perfected his demand
for appraisal of his Shares in accordance with Delaware Law (including but not
limited to Section 262 thereof) and as of the Effective Time has neither
effectively withdrawn nor lost his right to such appraisal ("Dissenting
Shares"), shall not be converted into or represent the right to receive the
Merger Consideration pursuant to Section 2.9, but the holder thereof shall be
entitled to only such rights as are granted by Delaware Law.
(b) Notwithstanding the provisions of Section 2.7(a), if any
holder of Shares who demands appraisal of his Shares under Delaware Law shall
effectively withdraw or lose (through failure to perfect or otherwise) his right
to appraisal, then as of the Effective Time or the occurrence of such event,
whichever later occurs, such holder's Shares shall automatically be converted
into and represent only the right to receive the Merger Consideration as
provided in Section 2.9(a), without interest thereon, upon surrender of the
certificate or certificates representing such Shares pursuant to Section 2.11
hereof.
(c) The Company shall give the Purchaser (i) prompt notice of
any written demands for appraisal or payment of the fair value of any Shares,
withdrawals of such demands, and any other instruments served pursuant to
Delaware Law received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under
Delaware Law. The Company shall not voluntarily make any payment with respect to
any demands for appraisal and shall not, except with the prior written consent
of the Purchaser, settle or offer to settle any such demands.
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SECTION 2.11. Surrender of Shares; Stock Transfer Books.
(a) Before the Effective Time, the Purchaser shall designate a
bank or trust company reasonably acceptable to the Company to act as agent for
the holders of Shares in connection with the Merger (the "Exchange Agent") to
receive the funds necessary to make the payments contemplated by Section 2.9. At
the Effective Time, the Purchaser shall deposit, or cause to be deposited, in
trust with the Exchange Agent for the benefit of holders of Shares the aggregate
consideration to which such holders shall be entitled at the Effective Time
pursuant to Section 2.9.
(b) Each holder of certificates representing any Shares
cancelled upon the Merger, which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates") whose Shares were converted
pursuant to Section 2.9(a), may thereafter surrender such Certificate or
Certificates to the Exchange Agent, as agent for such holder, to effect the
surrender of such Certificate or Certificates on such holder's behalf for a
period ending one year after the Effective Time. The Purchaser agrees that
promptly after the Effective Time it shall cause the distribution to holders of
record of Shares as of the Effective Time of appropriate materials to facilitate
such surrender. Upon the surrender of Certificates, the Purchaser shall cause
the Exchange Agent to pay the holder of such Certificates in exchange therefor
cash in an amount equal to the Merger Consideration multiplied by the number of
Shares represented by such Certificate. Until so surrendered, each Certificate
(other than Certificates representing Dissenting Shares and Certificates
representing Shares held by the Purchaser or any direct or indirect wholly owned
subsidiary of the Purchaser or in the treasury of the Company) shall represent
solely the right to receive the aggregate Merger Consideration relating thereto.
(c) If payment of the Merger Consideration in respect of
cancelled Shares is to be made to a Person other than the Person in whose name a
surrendered Certificate or instrument is registered, it shall be a condition to
such payment that the Certificate or instrument so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the Person
requesting such payment shall have paid any transfer and other taxes required by
reason of such payment in a name other than that of the registered holder of the
Certificate or instrument surrendered or shall have established to the
satisfaction of the Purchaser or the Exchange Agent that such tax either has
been paid or is not applicable.
(d) At the Effective Time, the stock transfer books of the
Company shall be closed and there shall not be any further registration of
transfers of Shares or any shares of capital stock thereafter on the records of
the Company. From and after
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the Effective Time, the holders of certificates evidencing ownership of the
Shares outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares, except as otherwise provided for herein
or by applicable law. If, after the Effective Time, Certificates are presented
to the Surviving Corporation, they shall be cancelled and exchanged for the
Merger Consideration as provided in this Article II. No interest shall accrue or
be paid on any cash payable upon the surrender of a Certificate or Certificates
which immediately before the Effective Time represented outstanding Shares.
(e) Promptly following the date which is one year after the
Effective Time, the Surviving Corporation shall be entitled to require the
Exchange Agent to deliver to it any cash (including any interest received with
respect thereto), Certificates and other documents in its possession relating to
the transactions contemplated hereby, which had been made available to the
Exchange Agent and which have not been disbursed to holders of Certificates, and
thereafter such holders shall be entitled to look to the Surviving Corporation
(subject to abandoned property, escheat or similar laws) only as general
creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates, without any interest thereon. Notwithstanding
the foregoing, neither the Surviving Corporation nor the Exchange Agent shall be
liable to any holder of a Certificate for Merger Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(f) The Merger Consideration paid in the Merger shall be net
to the holder of Shares in cash, subject to reduction only for any applicable
Federal backup withholding or, as set forth in Section 2.8(c), stock transfer
taxes payable by such holder.
SECTION 2.12. Stock Plans.
(a) The Company shall take all actions necessary to provide
that, at the Effective Time, (i) each then outstanding option to purchase shares
of Company Common Stock (the "Options") granted under any of the Company's stock
option plans referred to in Section 4.2 hereof, each as amended (collectively,
the "Option Plans"), whether or not then exercisable or vested, shall be
cancelled and (ii) in consideration of such cancellation, such holders of
Options shall receive for each Share subject to such Option an amount (subject
to any applicable withholding tax) in cash equal to the product of (A) the
excess, if any, of the Offer Price over the per share exercise price of such
Option and (B) the number of Shares subject to such Option (such amount being
herein referred to as the "Option Price"); provided, however, that the Company
shall obtain all necessary consents or releases from holders of Options to
effect the foregoing. Upon receipt of the Option Price, the Option shall be
cancelled. The surrender of an Option to the Company shall be deemed a release
of any and
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all rights the holder had or may have had in respect of such Option. As promptly
as practicable following the consummation of the Merger, the Purchaser shall
provide the Company with the funds necessary to satisfy its obligations under
this Section 2.12(a).
(b) Except as provided herein or as otherwise agreed to by the
parties and to the extent permitted by the Option Plans, (i) the Company shall
cause the Option Plans to terminate as of the Effective Time and shall provide
for the payment of any benefit due under such Option Plans in cash; (ii) the
Company shall cause the provisions in any other plan, program or arrangement,
which currently provides or previously provided for the issuance or grant by the
Company of any interest in respect of the capital stock of the Company, or for
payments based on the value of the capital stock of the Company (each such other
plan being referred to as an "Other Stock Plan") to terminate as of the
Effective Time and shall provide for the payment of any benefit due under such
plans in cash; and (iii) the Company shall take all action necessary to ensure
that following the Effective Time no holder of Options or any participant in the
Option Plans or in any Other Stock Plan shall have any right thereunder to
acquire any equity securities of the Company, the Surviving Corporation or any
subsidiary thereof, and to terminate all such plans. The Purchaser shall assure
that the Company has the funds necessary to meet its obligations under this
Section 2.12(b).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as
follows:
SECTION 3.1. Corporate Organization. The Purchaser is a
corporation duly organized under the laws of the State of Delaware. The
Purchaser has the requisite corporate power and authority and any necessary
governmental approvals to own, operate or lease the properties that it purports
to own, operate or lease and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing and in good
standing or to have such power, authority, and governmental approvals would not
have, individually or in the aggregate, a material adverse effect on the
Purchaser or on the ability of the Purchaser to consummate any of the
transactions contemplated by this Agreement or to perform its obligations under
this Agreement.
SECTION 3.2. Authority Relative to this Agreement. The
execution and delivery of this Agreement by the Purchaser and the consummation
by the Purchaser of the Merger and the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of the
Purchaser and no other proceeding is necessary for the execution and
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delivery of this Agreement by the Purchaser, the performance by the Purchaser of
its obligations hereunder and the consummation by the Purchaser of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Purchaser and, assuming due and valid authorization, execution
and delivery hereof by the Company, constitutes a legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms.
SECTION 3.3. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the
Purchaser do not, and the performance of this Agreement by the Purchaser will
not, (i) conflict with or violate any law, regulation, court order, judgment or
decree applicable to the Purchaser or by which any of its property is bound or
affected, (ii) violate or conflict with the Certificate of Incorporation or
By-Laws of the Purchaser, or (iii) result in a violation or breach of or
constitute a default under (with or without due notice or lapse of time, or
both), or give to others any rights of termination or cancellation of, or result
in the creation of a Lien on any of the property or assets of the Purchaser
pursuant to, any contract, instrument, permit, license or franchise to which the
Purchaser is a party or by which the Purchaser or any of its property is bound
or affected.
(b) Except for applicable requirements, if any, of the
Exchange Act, the pre-merger notification requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and filing and
recordation of appropriate merger documents as required by Delaware Law, the
Purchaser is not required to submit any notice, report or other filing with any
court, arbitrable tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency, domestic or foreign (a
"Governmental Authority"), in connection with the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby. No waiver, consent, approval or authorization of any
Governmental Authority is required to be obtained or made by the Purchaser in
connection with its execution, delivery or performance of this Agreement.
SECTION 3.4. Financing Arrangements. At the Expiration Date,
the Purchaser will have funds available to it sufficient to purchase the Shares
in accordance with the terms of this Agreement.
SECTION 3.5. No Prior Activities. Except for obligations or
liabilities incurred in connection with its incorporation or organization or the
negotiation and consummation of this Agreement and the transactions contemplated
hereby, the Purchaser has not incurred any obligations or liabilities, and has
not engaged in any business or activities of any type or kind
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whatsoever, or entered into any agreements or arrangements with any Person or
entity.
SECTION 3.6. Brokers. Except as to Goldman, Sachs & Co., no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by and on behalf of the Purchaser.
SECTION 3.7. Proxy Statement. None of the information supplied
by the Purchaser, the stockholders of the Purchaser or their respective
officers, directors, representatives, agents or employees (the "Purchaser
Information"), in writing, expressly for inclusion in the Proxy Statement, if
any, or in any amendments thereof or supplements thereto, will, on the date the
Proxy Statement is mailed to stockholders and at the time of the meeting of
stockholders, if any, to be held in connection with the Merger, contain any
untrue statement of a material fact or contain or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, the Purchaser does not make any
representation or warranty with respect to any information that has been
supplied by the Company or its accountants, counsel or other authorized
representatives for use in any of the foregoing documents.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule delivered to
the Purchaser prior to the execution of this Agreement (the "Disclosure
Schedule"), the Company hereby represents and warrants to the Purchaser as
follows:
SECTION 4.1. Organization and Qualification; Subsidiaries. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite corporate power
and authority and any necessary governmental approvals to own, operate or lease
the properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, and is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, operated or leased or the nature of its
activities makes such qualification necessary, except for such failure which,
when taken together with all other such failures, would not have a Material
Adverse Effect (as defined below). Except as disclosed on Schedule 4.1 of the
Disclosure Schedule, the Company does not own any Subsidiaries and does not
otherwise have an equity interest in any other Person. The Subsidiaries listed
on Schedule 4.1 do not have any assets, obligations or liabilities of any type
or kind and will be dissolved prior to
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December 31, 1998. The term "Subsidiary" means any corporation or other legal
entity of which the Company (either alone or through or together with any other
Subsidiary) owns, directly or indirectly, more than 50% of the capital stock or
other equity interests the holders of which are generally entitled to vote for
the election of the board of directors or other governing body of such
corporation or other legal entity. The term "Material Adverse Effect" means any
change in or effect on the business of the Company that is not a result of the
business operations of Omnitel (as defined below) or of general changes in the
economy or the industries in which the Company operates or results from
regulatory changes generally applicable to cellular operators in Europe or Italy
(including, without limitation, the issuance of a fourth Italian cellular
license or rules with respect to interconnections or pricing for incoming calls)
or a result of this Agreement that is or could reasonably be expected to be
materially adverse to (x) the business, operations, properties (including
intangible properties), condition (financial or otherwise), results of
operations, assets, liabilities, regulatory status or prospects of the Company
or (y) the ability of the Company to consummate any transactions contemplated by
this Agreement or the Option Agreement or to perform its obligations under this
Agreement or the Option Agreement.
SECTION 4.2. Capitalization. The authorized capital stock of
the Company consists of 75,000,000 shares of Company Common Stock and 2,500,000
shares of Preferred Stock, $.01 par value per share ("Company Preferred Stock"),
1,000,000 shares of which have been designated "Series A Preferred Stock". As of
November 30, 1998, (i) 16,715,306 shares of Company Common Stock and no shares
of Company Preferred Stock were issued and outstanding, (ii) 2,274,140 shares of
Company Common Stock were reserved for issuance in connection with the exercise
of outstanding options under the Option Plans, (iii) 651,091 shares of Company
Common Stock were reserved for issuance in connection with the exercise of
currently outstanding warrants ("Warrants") and (iv) 2,159,129 shares of Company
Common Stock were reserved for issuance in connection with the conversion of
currently outstanding Voting Debt (as defined below). All of the issued and
outstanding shares of the Company's capital stock are, and all Shares which may
be issued pursuant to the exercise or conversion of outstanding Options,
Warrants and Voting Debt will be, when issued in accordance with the respective
terms thereof, duly authorized, validly issued, fully paid and nonassessable and
free of preemptive or similar rights. Except as disclosed on Schedule 4.2 of the
Disclosure Schedule, there are no bonds, debentures, notes or other indebtedness
having general voting rights (or convertible into securities having such rights)
("Voting Debt") of the Company issued and outstanding. There are no voting
trusts or other agreements or understandings to which the Company is a party
with respect to the voting of the capital stock of the Company. Except as
disclosed on Schedule 4.2 of the Disclosure Schedule, as of the date hereof
there are no, and as of the Expiration Date there will be no, other options,
warrants,
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puts, calls, preemptive rights, subscriptions or other rights, agreements,
arrangements or commitments of any character relating to the issued, unissued or
treasury shares of the capital stock or any other interest in the ownership or
earnings of the Company or other security of the Company obligating the Company
to issue or sell any shares of capital stock or Voting Debt of, or other equity
interests in, the Company. Except as disclosed on Schedule 4.2 of the Disclosure
Schedule, there are no outstanding contractual obligations of the Company or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or to provide funds to or make any investment (in
the form of a loan, capital contribution or otherwise) in any other entity.
SECTION 4.3. Authority Relative to this Agreement; Company
Action.
(a) The Company has the necessary corporate power and
authority to enter into this Agreement, the Option Agreement and the
Stockholders Agreement and, subject to obtaining any necessary stockholder
approval of the Merger, to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement by the Company and the consummation
by the Company of the transactions contemplated by this Agreement, the Option
Agreement and the Stockholders Agreement have been duly authorized by all
necessary corporate action on the part of the Company, subject to the approval,
if necessary, of the Merger by the Company's stockholders in accordance with
Delaware Law. Each of this Agreement, the Option Agreement and the Stockholders
Agreement has been duly executed and delivered by the Company and, assuming due
and valid authorization, execution and delivery hereof and thereof by the other
parties hereto and thereto, each of this Agreement and the Stockholders
Agreement constitutes a legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms.
(b) The Company has taken all action which may be necessary
under the Rights Agreement, so that (i) the execution of this Agreement, the
Option Agreement and the Stockholders Agreement and any amendments hereto and
thereto by the parties hereto and thereto and the consummation of the
transactions contemplated hereby and thereby shall not cause (A) the Purchaser
to become an Acquiring Person (as defined in the Rights Agreement) or (B) a
Distribution Date, a Stock Acquisition Date or a Triggering Event (as such terms
are defined in the Rights Agreement) to occur, irrespective of the number of
Shares acquired pursuant to the Offer or exercise of the option granted under
the Option Agreement, and (ii) the Rights (as defined in the Rights Agreement)
shall expire upon the acceptance of Shares for payment pursuant to the Offer.
(c) The Board of Directors has approved this Agreement, the
Option Agreement, the Stockholders Agreement and the transactions contemplated
hereby and thereby (including but
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not limited to the Offer, the Merger and the matters provided for in the Option
Agreement) so as to render inapplicable hereto and thereto the limitation on
business combinations contained in (i) Section 203 of Delaware Law (or any
similar provision) and (ii) Article Ninth of the Restated Certificate of
Incorporation of the Company. As a result, the only vote of holders of any class
or series of the capital stock of the Company required to adopt this Agreement
and the transactions contemplated hereby, including the Merger, is the
affirmative vote of a majority of the outstanding Shares, and if Section 253 of
Delaware Law is applicable to the Merger, no such vote will be required. Neither
Section 203 of Delaware Law nor any other state takeover or control share
statute or similar statute or regulation applies or purports to apply to the
Offer, the Merger or any of the transactions contemplated hereby or thereby.
SECTION 4.4. No Conflict; Required Filings and Consents.
(a) Except as disclosed on Schedule 4.4 of the Disclosure
Schedule, to the Company's knowledge, the execution and delivery of this
Agreement, the Option Agreement and the Stockholders Agreement by the Company do
not, and the performance of this Agreement, the Option Agreement and the
Stockholders Agreement by the Company will not, (i) conflict with or violate any
law, order, writ, injunction, decree, statute, rule or regulation, court order
or judgment applicable to the Company or by which its property is bound or
affected, (ii) violate or conflict with the Restated Certificate of
Incorporation or By-Laws of the Company, or (iii) result in a violation or
breach of, constitute a default under (with or without due notice or lapse of
time or both), give to others any rights of termination or cancellation of, or
result in the creation of a Lien on any of the properties or assets of the
Company pursuant to, any contract, instrument, permit, license or franchise to
which the Company is a party or by which the Company or its property is bound or
affected, excluding from the foregoing clauses (i) and (iii) such violations,
breaches or defaults which, in the aggregate, would not have a Material Adverse
Effect. For purposes of this Agreement, "to the knowledge of the Company" or "to
the Company's knowledge" shall be limited to the knowledge of a current director
or officer of the Company.
(b) Except for applicable requirements of the Exchange Act,
the pre-merger notification requirements of the HSR Act, and the filing and
recordation of appropriate merger or other documents as required by Delaware
Law, or "blue sky" laws of various states, the Company is not required to submit
any notice, report, permit, authorization or other filing with any Governmental
Authority in connection with the execution, delivery or performance of this
Agreement. No waiver, consent, approval or authorization of any Governmental
Authority is required to be obtained or made by the Company in connection with
its execution,
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delivery or performance of this Agreement, the Option Agreement or the
Stockholders Agreement.
SECTION 4.5. SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports and documents
required to be filed with the SEC since January 1, 1997 (as such documents have
been amended since the time of their filing, collectively, the "SEC Reports").
As of their respective dates, or, if amended, as of the date of the last such
amendment, the SEC Reports, including without limitation, any financial
statements or schedules included therein (i) complied in all material respects
with the applicable requirements of the Exchange Act and the Securities Act of
1933, as amended (the "Securities Act"), as the case may be, and the applicable
rules and regulations of the SEC promulgated thereunder, and (ii) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The Company has heretofore furnished or made available to the
Purchaser a complete and correct copy of any amendments or modifications which
have not yet been filed with the SEC to executed agreements, documents or other
instruments which previously had been filed by the Company with the SEC pursuant
to the Securities Act or the Exchange Act.
(b) The consolidated financial statements of the Company
contained in the SEC Reports (the "Financial Statements") have been prepared
from, and are in accordance with the books and records of the Company, comply in
all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and fairly presented
the consolidated financial position of the Company and the consolidated results
of operation, cash flows and changes in financial position of the Company as of
and for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments.
SECTION 4.6. Undisclosed Liabilities.
(a) Except (a) as disclosed in the Financial Statements and
(b) for liabilities and obligations (i) incurred in the ordinary course of
business and consistent with past practice since September 30, 1998, (ii)
pursuant to the terms of this Agreement, or (iii) as disclosed on Schedule 4.6
of the Disclosure Schedule, the Company has no material liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, that
would be required by GAAP to be reflected in, reserved against or otherwise
described in the balance sheet of
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the Company included in the Financial Statements (including the notes thereto)
or which would have a Material Adverse Effect.
SECTION 4.7. Absence of Certain Changes or Events.
Since December 31, 1997, except as disclosed on Schedule 4.7
of the Disclosure Schedule or in the SEC Reports filed prior to the date
hereof, the Company has conducted its business only in the ordinary and usual
course in accordance with past practice, and:
(a) there have not occurred any events or changes (including
the incurrence of any liabilities of any nature, whether or not accrued,
contingent or otherwise) that have had, or are reasonably likely in the future
to have, individually or in the aggregate, a Material Adverse Effect; and
(b) the Company has not taken any action which would have been
prohibited under Section 5.2 hereof.
SECTION 4.8. Litigation. Except as disclosed in the SEC
Reports filed prior to the date hereof, or as disclosed on Schedule 4.8 of the
Disclosure Schedule, there are no claims, actions, suits, proceedings
(including, without limitation, arbitration proceedings) or other alternative
dispute resolution proceedings, or investigations pending or, to the knowledge
of the Company, threatened against the Company, or any properties or rights of
the Company, before any Governmental Authority that, either individually or in
the aggregate, would be reasonably likely to have a Material Adverse Effect or
prevent or delay the consummation of the Offer or the Merger. As of the date
hereof, the Company is not subject to any outstanding court order, judgment,
injunction or decree.
SECTION 4.9. Employee Benefit Plans.
(a) Schedule 4.9(a) of the Disclosure Schedule sets forth: (i)
all "employee benefit plans", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and all other
material employee benefit arrangements or payroll practices, including, without
limitation, any such arrangements or payroll practices providing severance pay,
sick leave, vacation pay, salary continuation for disability, retirement
benefits, deferred compensation, bonus pay, incentive pay, stock options,
hospitalization insurance, medical insurance, life insurance, scholarships or
tuition reimbursements, maintained by the Company or to which the Company is
obligated to contribute thereunder for current or former employees or directors
of the Company (the "Employee Benefit Plans"). Neither the Company nor any trade
or business (whether or not incorporated) which is or has ever been under
control or treated as a single employer with the Company under Section 414(b),
(c), (m), or (o) of the Internal Revenue Code of 1986, as amended (the "Code")
("ERISA Affiliate") has ever maintained,
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contributed to or been obligated to contribute to an "employee pension plan", as
defined in Section 3(2) of ERISA.
(b) All contributions (including all employer contributions
and employee salary reduction contributions) required to have been made under
any of the Employee Benefit Plans or by law to any funds or trusts established
thereunder or in connection therewith have been made by the due date thereof
(including any valid extension), and all contributions for any period ending on
or before the Effective Time which are not yet due will have been paid or
accrued on or prior to the Effective Time.
(c) True, correct and complete copies of the following
documents, with respect to each of the Employee Benefit Plans and Pension Plans,
have been delivered or made available to the Purchaser by the Company: (i) all
plans and related trust documents, and amendments thereto; (ii) the most recent
Forms 5500; (iii) the last Internal Revenue Service determination letter; (iv)
summary plan descriptions; (v) the most recent actuarial report relating to the
Employee Benefit Plans and the Pension Plans; and (vi) written descriptions of
all non-written agreements relating to the Employee Benefit Plans.
(d) There are no pending actions, claims or lawsuits which
have been asserted or instituted against the Employee Benefit Plans, the assets
of any of the trusts under such plans or the plan sponsor or the plan
administrator, or against any fiduciary of the Employee Benefit Plans with
respect to the operation of such plans (other than routine benefit claims), nor
does the Company have knowledge of facts which could form a valid basis for any
such claim or lawsuit.
(e) The Employee Benefit Plans have been maintained, in all
material respects, in accordance with their terms and with all provisions of
ERISA and the Code (including rules and regulations thereunder) and other
applicable federal and state laws and regulations, and neither the Company, any
Subsidiary of the Company nor any "party in interest" or "disqualified Person"
with respect to the Employee Benefit Plans has engaged in a "prohibited
transaction" within the meaning of Section 406 of ERISA or 4975 of the Code. No
fiduciary to any Employee Benefit Plan has any current liability for breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any Employee Benefit Plan.
(f) None of the Employee Benefit Plans provide retiree life or
retiree health benefits except as may be required under Section 4980B of the
Code or Section 601 of ERISA and at the expense of the participant or the
participant's beneficiary. The Company and the ERISA Affiliates have at all
times complied with the notice and health care continuation requirements of
Section 4980B of the Code and Sections 601 through 608 of ERISA.
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(g) Except as disclosed on Schedule 4.9(g) of the Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any employee or director (current, former or retired) of
the Company, (ii) increase any benefits otherwise payable under any Employee
Benefit Plan, (iii) result in the acceleration of the time of payment or vesting
of any benefits under any Employee Benefit Plan or (iv) constitute a "change in
control" or similar event under any Employee Benefit Plan. Except as disclosed
on Schedule 4.9(g) of the Disclosure Schedule, no payment under any Employee
Benefit Plan will fail to be deductible by reason of Section 280G of the Code.
(h) Except as disclosed on Schedule 4.9(h) of the Disclosure
Schedule, no stock or other security issued by the Company or any Affiliate of
the Company forms or has formed a material part of the assets of any Employee
Benefit Plan.
(i) There has been no "mass layoff" or "plant closing" as
defined by the Worker Adjustment and Retraining Notification Act or any similar
state or local "plant closing" law with respect to the current or former
employees of the Company.
SECTION 4.10. Proxy Statement. The Proxy Statement, if any (or
any amendment thereof or supplement thereto), to be sent to the stockholders of
the Company in connection with the Special Meeting or the information statement,
if any, to be sent to such stockholders, as appropriate, will comply in all
material respects with the applicable requirements of the Exchange Act and the
rules and regulations thereunder. The Proxy Statement will not, at the time the
Proxy Statement is mailed to stockholders and at the time of the Special
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the meeting of the
Company's stockholders held for approval of the Merger which has become false or
misleading, except that no representation or warranty is being made by the
Company with respect to any information expressly concerning the Purchaser,
Mannesmann AG ("Mannesmann") or Olivetti S.p.A. ("Olivetti"), which has been
supplied by such entities or which the Purchaser has had a prior opportunity to
review.
SECTION 4.11. Brokers. Except as to Wasserstein Perella and
Donaldson Lufkin & Jenrette Securities Corporation ("DLJ"), no broker, finder or
investment banker or other financial advisor is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. The Company has heretofore furnished
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to the Purchaser true and complete information concerning the financial
arrangements between the Company and Wasserstein Perella and DLJ pursuant to
which such firms would be entitled to any payment as a result of the
transactions contemplated by this Agreement.
SECTION 4.12. Conduct of Business; Licenses and Permits.
(a) Except as disclosed in the SEC Reports filed prior to the
date hereof, the business of the Company (which shall be deemed to exclude the
operations of Omnitel Sistemi Radiocellulari Italiani S.p.A. and Omnitel Pronto
Italia S.p.A. (collectively, "Omnitel")) is not being conducted in default or
violation of (with or without due notice or lapse of time or both) any term,
condition or provision of (i) its Restated Certificate of Incorporation or
By-Laws, or (ii) any note, bond, mortgage, indenture, contract, agreement, lease
or other instrument or agreement of any kind to which the Company is a party or
by which the Company or any of its properties or assets may be bound (each, a
"Company Agreement"), or (iii) any Federal, state, local or foreign statute,
law, ordinance, rule, regulation, judgment, decree, order, concession, grant,
franchise, permit or license or other governmental authorization or approval
applicable to the Company, and no notice, charge, claim, action or assertion has
been received by the Company or has been filed, commenced or, to the Company's
knowledge, threatened against the Company alleging any such violation except,
with respect to the foregoing clauses (ii) and (iii), defaults or violations
that would not, individually or in the aggregate, have a Material Adverse
Effect. To the Company's knowledge, no other party to any Company Agreement is
in default or violation in respect thereof, and no event has occurred which,
with due notice or lapse of time or both, would constitute such a default or
violation. The Company has delivered to the Purchaser or its representatives
true and complete originals or copies of all the Company Agreements.
(b) Schedule 4.12 of the Disclosure Schedule sets forth a true
and complete list of all licenses, permits, franchises, authorizations and
approvals issued or granted to the Company by any Governmental Authority (the
"Licenses and Permits"), and all pending applications therefor. Such list
contains a summary description of each such item and, where applicable,
specifies the date issued, granted or applied for, the expiration date and the
current status thereof. Each License and Permit has been duly obtained, is valid
and in full force and effect, and is not subject to any pending or, to the
Company's knowledge, threatened administrative or judicial proceeding to revoke,
cancel, suspend or declare such License and Permit invalid in any respect. To
the Company's knowledge, the Licenses and Permits are sufficient and adequate in
all material respects to permit the continued lawful conduct of the Company's
business (which shall be deemed to exclude the operations of Omnitel) in
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the manner now conducted and as proposed to be conducted, and none of the
operations of the Company are being conducted in a manner that violates in any
material respect any of the terms or conditions under which any License and
Permit was granted. Except as disclosed on Schedule 4.12 of the Disclosure
Schedule, no such License and Permit will be affected by, or terminate or lapse
by reason of, the transactions contemplated by this Agreement.
SECTION 4.13. Compliance with Law. Except as disclosed on
Schedule 4.8 (as applicable) and Schedule 4.13 of the Disclosure Schedule, the
operations of the Company (which shall be deemed to exclude the operations of
Omnitel) have been conducted in accordance with all applicable laws,
regulations, orders and other requirements of all Governmental Authorities
having jurisdiction over the Company and its assets, properties and operations.
Except as disclosed on Schedule 4.8 (as applicable) and Schedule 4.13 of the
Disclosure Schedule, the Company has not received notice of any violation of any
such law, regulation, order or other legal requirement, and is not in default
with respect to any order, writ, judgment, award, injunction or decree of any
Governmental Authority. The Company has no knowledge of any proposed change in
any such laws, rules or regulations (other than laws of general applicability)
that would materially and adversely affect the transactions contemplated by this
Agreement or would have a Material Adverse Effect. To the Company's knowledge,
neither the Company nor any director, officer, agent, employee or other Person
associated with or acting on behalf of the Company has: used any funds for any
unlawful contribution, gift, entertainment or other unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
SECTION 4.14. Taxes. Except as disclosed on Schedule 4.14 of
the Disclosure Schedule:
(a) Except as would not, either individually or in the
aggregate, have a Material Adverse Effect: (i) the Company has timely filed with
the appropriate Tax Authority (as defined below) all Tax Returns (as defined
below) required to be filed by or with respect to the Company, and such Tax
Returns are true, correct and complete in all material respects; (ii) all Taxes
(as defined below) due and payable by the Company with respect to the taxable
years or other taxable periods ending on or prior to the Effective Time have
been, or on or prior to the Effective Time will be, paid or adequately disclosed
and fully provided for; (iii) no Audits (as defined below) are pending or, to
the Company's knowledge, threatened with regard to any Taxes or Tax Returns of
the Company, and there are no outstanding deficiencies
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or assessments asserted or proposed; (iv) no issue has been raised by any Taxing
Authority in any Audit of the Company that if raised with respect to any other
period not so audited could be expected to result in a proposed deficiency of
any period not so audited; (v) there are no outstanding agreements, consents or
waivers extending the statutory period of limitations applicable to the
assessment of any Taxes or deficiencies against the Company, and the Company is
not a party to any agreement providing for the allocation or sharing of Taxes;
(vi) no powers of attorney with respect to Taxes of the Company have been
executed that will be outstanding as of the Effective Time; (vii) there are no
Liens for Taxes upon any of the assets of the Company, except for Liens for
Taxes not yet due and payable for which adequate reserves have been established
on the Company's balance sheet at September 30, 1998 included in the Company's
Quarterly Report on Form 10-Q filed with the SEC prior to the date hereof (the
"Balance Sheet") in accordance with GAAP and (viii) the Company has complied in
all respects with all applicable laws, rules and regulations relating to the
payment and withholding of Taxes (including, without limitation, withholding of
Taxes pursuant to Sections 1441 and 1442 of the Code or similar provisions under
any foreign laws) and has, within the time and in the manner prescribed by law,
withheld and paid over to the proper Tax Authorities all amounts required to be
so withheld and paid over under applicable laws.
(b) The Company has not filed a consent to the application of
Section 341(f) of the Code.
(c) The Company is not and has not been a United States real
property holding company (as defined in Section 897(c)(2) of the Code) during
the applicable period specified in Section 897(c)(1)(ii) of the Code.
(d) No indebtedness of the Company is "corporate acquisition
indebtedness" within the meaning of Section 279(b) of the Code.
(e) The Company has not entered into any agreements that would
result in the disallowance of any tax deductions pursuant to Section 280G of the
Code.
(f) Subject to the Purchaser's consent under Section 6.10 of
this Agreement, the Company has made or will by the Effective Time make, a valid
"qualified electing fund" election ("QEF Election"), pursuant to Section 1295 of
the Code with respect to all stock which it owns, or is considered to own, in
any corporation which meets the definition of "passive foreign investment
company" ("PFIC") set forth in Section 1297 of the Code. Such QEF Election or
elections are, or will be, effective for all periods in which the Company is
considered to own the stock to which the election relates. Any PFIC is, or will
be, a qualified electing fund with respect to the Company for all taxable years
that the Company has held the PFIC stock.
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(g) The Company has not made any change in accounting methods
or received a ruling from any taxing authority, other than with respect to a
PFIC, likely to have a material adverse effect on the Company.
(h) The deductibility of compensation paid by the Company will
not be limited by Section 162(m) of the Code.
(i) All transactions that could give rise to an understatement
of the federal income tax liability of the Company within the meaning of Section
6662(d) of the Code are adequately disclosed on Tax Returns in accordance with
Section 6662(d)(2)(B) of the Code and the taxpayer reasonably believed that the
tax treatment of such item was more likely than not to be the proper treatment.
(j) No excess loss accounts or deferred intercompany gains as
defined in the consolidated return regulations promulgated under the Code exist
with respect to the Company.
(k) For purposes of this Agreement, "Taxes" means any Federal,
state, local and foreign taxes, and other assessments of a similar nature
(whether imposed directly or through withholding), including any interest,
additions to tax, or penalties applicable thereto, imposed by any Tax Authority;
"Tax Authority" means the Internal Revenue Service and any other domestic or
foreign Governmental Authority responsible for the administration of any Taxes;
and "Audit" means any audit, assessment or other examination relating to Taxes
by any Tax Authority or any judicial or administrative proceedings relating to
Taxes.
(l) For purposes of this Agreement, "Tax Return" means any
return, report, information return or other document (including any related or
supporting information and, where applicable, profit and loss accounts and
balance sheets) with respect to Taxes.
SECTION 4.15. Intellectual Property. Schedule 4.15 of the
Disclosure Schedule contains a true and complete list of all (i) patents and
patent applications, (ii) trademark and service mark registrations and
applications, (iii) Computer Software (as defined below), (iv) copyright
registrations and applications, (v) material unregistered trademarks, service
marks and copyrights, and (vi) Internet domain names used or held for use in
connection with the business of the Company, together with all licenses related
to the foregoing.
(a) For purposes of this Agreement, "Computer Software" means
(i) any and all computer programs and applications consisting of sets of
statements and instructions to be used directly or indirectly in computer
software or firmware whether in source code or object code form, (ii) databases
and compilations, including without limitation any and all data and
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collections of data, whether machine readable or otherwise, (iii) all versions
of the foregoing including, without limitation, all screen displays and designs
thereof, and all component modules of source code or object code or natural
language code therefor, and whether recorded on papers, magnetic media or other
electronic or non-electronic device, (iv) all descriptions, flowcharts and other
work product used to design, plan, organize and develop any of the foregoing,
(v) all documentation including, without limitation, all technical and user
manuals and training materials relating to the foregoing, and all Internet
domain names and content contained on all World Wide Web sites of the Company or
any Subsidiary; provided, however, that "Computer Software" shall not include
(x) "shrink-wrap" or other similar off-the-shelf software generally available or
(y) software provided to, or used to provide services to the Company by NTL
Incorporated ("NTL"), Corecomm Limited ("Corecomm") or Cellular Communications
of Puerto Rico, Inc. ("CCPR").
(b) Except as disclosed on Schedule 4.15 of the Disclosure
Schedule, the Company is the sole and exclusive owner of all patents, patent
applications, patent rights, copyrights, trademarks, trademark rights, trade
names, trade name rights, service marks, service mark rights and all goodwill of
the business associated therewith, trade secrets, registrations for and
applications for registration of trademarks, service marks and copyrights,
technology and know-how, Computer Software other than off-the-shelf
applications, and other confidential or proprietary rights and information and
all technical and user manuals and documentation made or used in connection with
any of the foregoing, used or held for use anywhere in the world in connection
with the business of the Company (which shall be deemed to exclude the
operations of Omnitel) as currently conducted (collectively, the "Intellectual
Property"), free and clear of all Liens. The Liens disclosed on Schedule 4.15 of
the Disclosure Schedule do not materially detract from the value of the
Intellectual Property subject thereto and do not materially impair the
operations of the Company.
(c) Except disclosed on Schedule 4.15 of the Disclosure
Schedule, all grants, registrations and applications for Intellectual Property
that are used in the business of the Company as currently conducted (i) are
valid, subsisting, in proper form and enforceable, and have been duly
maintained, including the submission of all necessary filings and fees in
accordance with the legal and administrative requirements of the appropriate
jurisdictions, and (ii) have not lapsed, expired or been abandoned, and no
application or registration therefor is the subject of any legal or governmental
proceeding before any governmental, registration or other authority in any
jurisdiction.
(d) The Company owns or has the valid right to use all of the
material Intellectual Property used by it or held for use by it in connection
with its business (which shall be deemed to
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exclude the operations of Omnitel). To the Company's knowledge, there are no
conflicts with or infringements of any Intellectual Property by any third party.
The business of the Company (which shall be deemed to exclude the operations of
Omnitel) as currently conducted does not conflict with or infringe in any way on
any proprietary right of any third party. There is no claim, suit, action or
proceeding pending or, to the Company's knowledge, threatened against the
Company (i) alleging any such conflict or infringement with any third party's
proprietary rights, or (ii) challenging the ownership, use, validity or
enforceability of the Intellectual Property.
(e) The Computer Software used by the Company in the conduct
of its business (which shall be deemed to exclude the operations of Omnitel) was
either: (i) developed by employees of the Company within the scope of their
employment; (ii) developed on behalf of the Company by a third party, and all
ownership rights therein have been assigned or otherwise transferred to or
vested in the Company, pursuant to written agreements; or (iii) as disclosed on
Schedule 4.15 of the Disclosure Schedule, licensed or acquired from a third
party pursuant to a written license, assignment, or other contract which is in
full force and effect and of which the Company is not in material breach. Except
as disclosed on Schedule 4.15 of the Disclosure Schedule, (x) no third party has
had access to any of the source codes for any of the Computer Software described
in clause (i) or (ii) hereof and (y) no act has been done or omitted to be done
by the Company to impair or dedicate to the public or entitle any Governmental
Authority to hold abandoned any of such Computer Software.
(f) Except as disclosed on Schedule 4.15 of the Disclosure
Schedule, all consents, filings, and authorizations by or with Governmental
Authorities or third parties necessary with respect to the consummation of the
transactions contemplated by this Agreement as they may affect the Intellectual
Property have been obtained.
(g) The Company has not entered into any material consent,
indemnification, forbearance to sue, settlement agreement or cross-licensing
arrangement with any Person relating to the Intellectual Property or the
intellectual property of any third party other than as may be contained in the
license agreements disclosed on Schedule 4.15 of the Disclosure Schedule.
(h) Except as disclosed on Schedule 4.15 of the Disclosure
Schedule, the Company is not, nor will it be as a result of the execution and
delivery of this Agreement or the performance of its obligations under this
Agreement, in breach of any license, sublicense or other agreement relating to
the Intellectual Property.
(i) No former or present employees, officers or directors of
the Company hold any right, title or interest,
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directly or indirectly, in whole or in part, in or to any Intellectual Property.
SECTION 4.16. Employment Matters. No employee of the Company
has entered into a Company Agreement and the employment of all employees of the
Company may be terminated at will. The Company has not experienced any strikes,
collective labor grievances, other collective bargaining disputes or claims of
unfair labor practices in the last five years. To the Company's knowledge, there
is no organizational effort presently being made or threatened by or on behalf
of any labor union with respect to employees of the Company.
SECTION 4.17. Vote Required. The affirmative vote of the
holders of a majority of the outstanding shares of Company Common Stock is the
only vote of the holders of any class or series of the Company's capital stock
which may be necessary to approve this Agreement and the transactions
contemplated hereby, including the Merger.
SECTION 4.18. Environmental Matters.
(a) Except as disclosed on Schedule 4.18(a) of the Disclosure
Schedule: (i) the Company is and has been in compliance with all applicable
laws, statutes, rules, regulations, common law, ordinances, decrees, orders,
judgments, permits, licenses, registration and other governmental authorizations
or approvals or other legal or regulatory requirements relating to pollution or
the protection of human health, natural resources or the environment
("Environmental Laws"), and there are no outstanding allegations by any Person
that the Company is not or has not been in compliance with any Environmental
Laws, and (ii) the Company currently holds all permits, licenses, registrations
and other governmental authorizations or approvals (including without limitation
exemptions, waivers, and the like) and financial assurances required under any
Environmental Laws for the Company to operate its business.
(b) Except as disclosed on Schedule 4.18(b) of the Disclosure
Schedule, (i) there is no asbestos or asbestos-containing materials in or on any
real property, buildings, structures or components thereof currently owned,
leased or operated by the Company, and (ii) there are and have been no
underground or aboveground storage tanks (whether or not required to be
registered under any applicable law), dumps, landfills, lagoons, surface
impoundments, sumps, injection wells or other disposal or storage sites or
locations in or on any property currently owned, leased or operated by the
Company.
(c) Except as disclosed on Schedule 4.18(c) of the Disclosure
Schedule, (i) the Company has not received (x) any communication from any Person
stating or alleging that the Company is or may be liable under any Environmental
Law
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(including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, and any foreign or state
analog thereto) with respect to any actual or alleged environmental
contamination, (y) any request for information under any Environmental Law from
any Governmental Authority or any other Person with respect to any actual or
alleged environmental contamination or (z) notice of any actual or alleged
violation of Environmental Law, (ii) none of the Company, any Governmental
Authority or any other Person is conducting or has conducted (or is proposing or
threatening to conduct) any environmental remediation or investigation which
could result in a material liability of the Company under any Environmental Law
or otherwise require disclosure in any SEC Report, and (iii) the Company is not
subject to any judicial or administrative proceeding alleging a violation or
liability under any Environmental Law.
(d) Except as disclosed on Schedule 4.18(d) of the Disclosure
Schedule, to the Company's knowledge, (i) no party to any Company Agreement and
no other Person whose ability, in whole or in part, may be attributable to or
asserted against the Company, has received any notice, claim, demand or request
for information from any Governmental Authority or any other Person with respect
to any actual or potential liability under any Environmental Law, and (ii) no
event has occurred with respect to the Company or such parties which, with due
notice or the lapse of time or both, would give rise to any liability to the
Company under any Environmental Law.
SECTION 4.19. Real Property. The Company occupies space in New
York and London pursuant to an agreement with NTL. As of the date hereof, the
Company does not own or lease, have an option to purchase or lease or have any
interest in any real property.
SECTION 4.20. Title and Condition of Properties. The
Company owns good and marketable title, free and clear of all Liens, to all
of the personal property and assets shown on the Balance Sheet or acquired
after September 30, 1998, except for (a) assets which have been disposed of
to nonaffiliated third parties since September 30, 1998 in the ordinary
course of business, (b) Liens reflected in the Balance Sheet, (c) Liens or
imperfections of title which are not, individually or in the aggregate,
material in character, amount or extent and which do not materially detract
from the value or materially interfere with the present or presently
contemplated use of the assets subject thereto or affected thereby, and (d)
Liens for current Taxes not yet due and payable. All of the machinery,
equipment and other tangible personal property and assets owned or used by
the Company are in good condition and repair, except for ordinary wear and
tear not caused by neglect, and are usable in the ordinary course of
business, except for any matter otherwise covered by this sentence which does
not have, individually or in the aggregate, a Material Adverse Effect. The
personal property
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and assets reflected on the Balance Sheet or acquired after September 30,
1998, the rights under the Company Agreements and the Intellectual Property
owned or used by the Company under valid licenses, collectively include all
assets necessary to provide, produce, sell and license the services and
products currently provided, produced, sold and licensed by the Company and
to conduct the business of the Company as presently conducted or as currently
contemplated to be conducted.
SECTION 4.21. Contracts. Each Company Agreement is legally
valid and binding and in full force and effect, except where failure to be
legally valid and binding and in full force and effect would not have a Material
Adverse Effect. Schedule 4.21 of the Disclosure Schedule sets forth a true and
complete list of (i) all material Company Agreements entered into by the Company
since December 31, 1997 and all amendments to any Company Agreements included as
an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 and (ii) all non-competition agreements imposing restrictions
on the ability of the Company to conduct business in any jurisdiction or
territory.
SECTION 4.22. Potential Conflicts of Interest. Except as
disclosed on Schedule 4.22 of the Disclosure Schedule or in the SEC Reports
filed prior to the date hereof, since December 31, 1997, there have been no
transactions, agreements, arrangements or understandings between the Company and
its affiliates that would be required to be disclosed under Item 404 of
Regulation S-K under the Securities Act. Except as disclosed on Schedule 4.22 of
the Disclosure Schedule, no officer of the Company owns, directly or indirectly,
any interest in (excepting not more than 1% stock holdings for investment
purposes in securities of publicly held and traded companies) or is an officer,
director, employee or consultant of any Person which is a competitor, lessor,
lessee, customer or supplier of the Company; and no officer or director of the
Company (i) owns, directly or indirectly, in whole or in part, any Intellectual
Property which the Company is using or the use of which is necessary for the
business of the Company; (ii) has any claim, charge, action or cause of action
against the Company, except for claims for accrued vacation pay and accrued
benefits under the Employee Plans; (iii) has made, on behalf of the Company, any
payment or commitment to pay any commission, fee or other amount to, or to
purchase or obtain or otherwise contract to purchase or obtain any goods or
services from, any other Person of which any officer or director of the Company,
or, to the Company's knowledge, a relative of any of the foregoing, is a partner
or stockholder (except stock holdings solely for investment purposes in
securities of publicly held and traded companies); or (iv) owes any money to the
Company.
SECTION 4.23. Insurance. The Company has policies of insurance
and bonds of the type and in amounts customarily carried by Persons conducting
businesses or owning assets similar
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to those of the Company. There is no material claim pending under any of such
policies or bonds as to which coverage has been questioned, denied or disputed
by the underwriters of such policies or bonds. All premiums due and payable
under all such policies and bonds have been paid by the Company and the Company
is otherwise in compliance in all material respects with the terms of such
policies and bonds. The Company has no knowledge of any threatened termination
of, or material premium increase with respect to, any of such policies.
SECTION 4.24. Opinion of Financial Advisor. The Company has
received an opinion from Wasserstein Perella, financial advisor to the Company,
to the effect that the consideration to be received in the Offer and the Merger
by the holders of the Shares is fair to such holders from a financial point of
view, a copy of which opinion has been delivered to the Purchaser.
SECTION 4.25. Investment Company. The Company is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.26. Full Disclosure. The Company has not knowingly
failed to disclose to the Purchaser any facts material to the Company's
business, results of operations, assets, liabilities, financial condition or
prospects (in each case excluding those relating to Omnitel). No representation
or warranty by the Company in this Agreement and no statement by the Company in
any document referred to herein (including the Schedules and Exhibits hereto),
contains any untrue statement of a material fact or omits to state any material
fact necessary, in order to make the statement made herein or therein, in light
of the circumstances under which they were made, not misleading.
ARTICLE V.
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1. Acquisition Proposals. The Company will notify
the Purchaser immediately, but in any event within 24 hours, if any proposals,
inquiries or expressions of interest are received by, any information is
requested from, or any negotiations or discussions are sought to be initiated or
continued with the Company or its representatives, in each case in connection
with any Takeover Proposal (as defined below) or the possibility or
consideration of making a Takeover Proposal ("Takeover Proposal Interest")
indicating, in connection with such notice, the name of the Person indicating
such Takeover Proposal Interest and the terms and conditions of any proposals or
offers. The Company agrees that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any Takeover Proposal Interest. The Company
agrees that it will take the necessary steps promptly to inform the Persons
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referred to in the first sentence hereof of the obligations undertaken in this
Section 5.1. The Company agrees that it shall keep the Purchaser informed, on a
current basis, of the status and terms of any Takeover Proposal Interest. As
used in this Agreement, "Takeover Proposal" shall mean any tender or exchange
offer involving the Company, any proposal for a merger, consolidation or other
business combination involving the Company, any proposal or offer to acquire in
any manner a significant equity interest in, or a significant portion of the
business or assets of, the Company (other than immaterial or insubstantial
assets or inventory in the ordinary course of business or assets held for sale),
any proposal or offer with respect to any recapitalization or restructuring with
respect to the Company or any proposal or offer with respect to any other
transaction similar to any of the foregoing with respect to the Company other
than pursuant to the transactions to be effected pursuant to this Agreement.
SECTION 5.2. Conduct of Business by the Company Pending the
Merger. The Company covenants and agrees that, (i) except as expressly
contemplated by this Agreement, the Option Agreement or the Stockholders
Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or
(iii) as agreed in writing by the Purchaser, after the date hereof, and prior to
the time the directors of the Purchaser have been elected to and shall
constitute a majority of the Board of Directors pursuant to Section 1.3 (the
"Appointment Date"):
(a) the business of the Company shall be conducted only in the
ordinary and usual course and, to the extent consistent therewith, the Company
shall use its best reasonable efforts to preserve its business organization
intact and maintain its existing relations with customers, suppliers, employees,
creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except
upon exercise of stock options or other rights to purchase shares of Company
Common Stock pursuant to the Option Plans outstanding on the date hereof or upon
exercise of outstanding Warrants or conversion of Voting Debt, issue, sell,
transfer or pledge or agree to sell, transfer or pledge any treasury stock of
the Company beneficially owned by it, (ii) amend its Restated Certificate of
Incorporation or Bylaws or similar organizational documents; or (iii) split,
combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any
dividend or other distribution payable in cash, stock or property with respect
to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any
additional shares of, or securities convertible into or exchangeable for, or
options, warrants, calls, commitments or rights of any kind to acquire, any
shares of capital stock of any class of the Company, other than shares of
Company Common Stock reserved for issuance on the
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date hereof pursuant to the exercise of Options or Warrants or conversion of
Voting Debt outstanding on the date hereof; (iii) transfer, lease, license,
sell, mortgage, pledge, dispose of, or encumber any assets other than in the
ordinary and usual course of business and consistent with past practice, or
incur or modify any indebtedness or other liability, other than in the ordinary
and usual course of business and consistent with past practice; or (iv) redeem,
purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the
compensation payable or to become payable by the Company to any of its executive
officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or
accelerate the payment or vesting of the amounts payable or to become payable
under, any existing bonus, incentive compensation, deferred compensation,
severance, profit sharing, stock option, stock purchase, insurance, pension,
retirement or other employee benefit plan, agreement or arrangement; or (iii)
enter into any employment or severance agreement with or, except in accordance
with the existing written policies of the Company, grant any severance or
termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of
its material contracts or waive, release or assign any material rights or
claims, except in the ordinary course of business and consistent with past
practice;
(f) the Company shall not permit any insurance policy naming
it as a beneficiary or a loss payable payee to be cancelled or terminated
without notice to the Purchaser, except in the ordinary course of business and
consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term
debt, or, except in the ordinary course of business, incur or assume any
short-term indebtedness in amounts not consistent with past practice; (ii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other Person,
except in the ordinary course of business and consistent with past practice;
(iii) other than ordinary course expense advances, make any loans, advances or
capital contributions to, or investments in, any other Person; or (iv) enter
into any material commitment or transaction (including, but not limited to, any
borrowing, capital expenditure or purchase, sale or lease of assets or real
estate);
(h) the Company shall not (i) change any of the accounting
methods used by it unless required by GAAP; or (ii) other than related to a QEF
Election, make any material Tax election, change any material Tax election
already made, adopt any material Tax accounting method, change any material Tax
accounting method unless required by GAAP, enter into any closing
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agreement, settle any material Tax claim or assessment or consent to any
material Tax claim or assessment or any waiver of the statute of limitations for
any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction of
any such claims, liabilities or obligations, in the ordinary course of business
and consistent with past practice, or claims, liabilities or obligations
reflected or reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take,
any action that would, or is reasonably likely to, result in any of the
conditions to the Merger set forth in Article VII not being satisfied, or would
make many representation or warranty of the Company contained herein inaccurate
in any respect at, or as of any time prior to, the Effective Time, or that would
materially impair the ability of the Company to consummate the Merger in
accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate,
amend or otherwise modify the Rights Agreement prior to the consummation of the
Offer unless required to do so by order of a court of competent jurisdiction;
and
(m) the Company shall not enter into an agreement, contract,
commitment or arrangement to do any of the foregoing, or to authorize,
recommend, propose or announce an intention to do any of the foregoing.
SECTION 5.3. No Solicitation; Board Recommendation.
(a) The Company will not, and will use its best efforts to
ensure that its officers, directors, employees, investment bankers, attorneys,
accountants and other agents do not, directly or indirectly: (i) initiate,
solicit or encourage, or take any action to facilitate (including by the
furnishing of information) the making of, any offer or proposal which
constitutes or is reasonably likely to lead to any Takeover Proposal, (ii) enter
into any agreement with respect to any Takeover Proposal, or (iii) in the event
of an unsolicited Takeover Proposal for the Company engage in negotiations or
discussions with, or provide any information or data to, any Person (other than
the Purchaser, any of its affiliates or representatives and except for
information which has been
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previously publicly disseminated by the Company) relating to any Takeover
Proposal; provided however, that nothing contained in this Section 5.3 or any
other provision hereof shall prohibit the Company or the Board of Directors from
(i) taking and disclosing to the Company's stockholders a position with respect
to a tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act or (ii) making such disclosure to the
Company's stockholders as, in the good faith judgment of the Board of Directors
after receiving advice from outside counsel, the Company deems necessary to
comply with its fiduciary duties to the Company's stockholders under applicable
law.
(b) Notwithstanding the foregoing, prior to the acceptance of
Shares pursuant to the Offer, the Company may furnish information concerning its
business, properties or assets to any Person pursuant to appropriate
confidentiality agreements, and may negotiate and participate in discussions and
negotiations with such Person concerning a Takeover Proposal (provided that the
Company shall not agree to any exclusive right to negotiate with the Company) if
(x) such entity or group has on an unsolicited basis submitted a bona fide
written proposal to the Company relating to any such transaction that provides
for consideration which the Board of Directors determines in good faith, after
receiving advice from a nationally recognized investment banking firm, is more
favorable to the Company and its stockholders than the Offer and the Merger
(taking into account all relevant factors) and which is not conditioned upon
obtaining additional financing not fully committed at such time or, in the view
of a nationally recognized investment banking firm, is reasonably likely to be
obtained under then existing market conditions, and (y) in the opinion of the
Board of Directors, after receiving advice from outside legal counsel to the
Company, the failure to provide such information or access or to engage in such
discussions or negotiations would likely cause the Board of Directors to breach
its fiduciary duties to the Company's stockholders under applicable law (a
Takeover Proposal which satisfies clauses (x) and (y) being referred to herein
as a "Superior Proposal"). The Company shall promptly provide to the Purchaser
any nonpublic information regarding the Company provided to any other party
which was not previously provided to the Purchaser. If the Company, after
consultation with outside legal counsel, believes that a breach of its fiduciary
duties to the Company's stockholders would likely occur, the Board of Directors
may (subject to this and the following sentences) inform the Company's
stockholders that it no longer believes that the Offer and the Merger is
advisable and no longer recommends approval (a "Subsequent Determination"), but
only at a time that is after the fifth business day following the Purchaser's
receipt of written notice advising the Purchaser that the Board of Directors has
received a Superior Proposal specifying the material terms and conditions of
such Superior Proposal (and including a copy thereof with all accompanying
documentation), identifying the Person making such Superior Proposal and stating
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that it intends to make a Subsequent Determination. Notwithstanding anything
herein to the contrary, prior to and including such fifth day the Company may
make such public disclosure that is in its view required under the Federal
securities laws, as evidenced by an opinion from outside counsel to the Company,
a copy of which shall be provided to Purchaser prior to such disclosure. After
providing such notice, the Company shall provide a reasonable opportunity to the
Purchaser to make such adjustments in the terms and conditions of this Agreement
and/or of the Option Agreement as would enable the Company to proceed with its
recommendation to its stockholders without a Subsequent Determination. At any
time after five business days following notification to the Purchaser of the
Company's intent to do so and if the Company has otherwise complied with the
terms of this Section 5.3(b), the Board of Directors may terminate this
Agreement pursuant to clause (ii) of Section 8.1(f) and enter into an agreement
with respect to a Superior Proposal; provided that the Company shall,
concurrently with entering into such agreement, pay or cause to be paid to the
Purchaser the Termination Fee (as defined in Section 8.2(b) hereof).
Notwithstanding any other provision of this Agreement, the Company shall submit
this Agreement to its stockholders, whether or not the Board of Directors makes
a Subsequent Determination.
(c) Except as set forth in Section 5.3(b), neither the Board
of Directors nor any committee thereof shall (i) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to the Purchaser, the approval or
recommendation by the Board of Directors or any such committee of the Offer,
this Agreement or the Merger, (ii) approve or recommend, or propose to approve
or recommend, any Takeover Proposal or (iii) enter into any agreement with
respect to any Takeover Proposal.
ARTICLE VI.
ADDITIONAL AGREEMENTS
SECTION 6.1. Proxy Statement. If required by the Exchange Act,
as promptly as practicable after the consummation of the Offer, the Company
shall prepare and file with the SEC, and shall use all reasonable efforts to
have cleared by the SEC, and promptly thereafter shall mail to stockholders, the
Proxy Statement. Except as set forth in Section 5.3(b), the Proxy Statement
shall contain the recommendation of the Board of Directors in favor of the
Merger.
SECTION 6.2. Meeting of Stockholders of the Company. At the
Special Meeting, if any, the Company shall use its best efforts to solicit from
stockholders of the Company proxies in favor of the Merger. The Purchaser agrees
that it shall vote, or cause to be voted, in favor of the Merger all Shares
directly or indirectly beneficially owned by it.
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SECTION 6.3. Additional Agreements. Subject to the terms and
conditions herein provided, the Company and the Purchaser will each comply in
all material respects with all applicable laws and with all applicable rules and
regulations of any Governmental Authority to achieve the satisfaction of the
Minimum Condition and all conditions set forth in Annex I hereto and Article VII
hereof, and to consummate and make effective the Merger and the other
transactions contemplated hereby. Each of the parties hereto agrees to use all
reasonable efforts to obtain in a timely manner all necessary waivers, consents
and approvals and to effect all necessary registrations and filings, and to use
all reasonable efforts to take, or cause to be taken, all other actions and to
do, or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of the Company and the Purchaser
shall use all reasonable efforts to take, or cause to be taken, all such
necessary actions.
SECTION 6.4. Notification of Certain Matters. The Company
shall give prompt notice to the Purchaser and the Purchaser shall give prompt
notice to the Company, of (a) the occurrence, or nonoccurrence, of any event
whose occurrence, or nonoccurrence, would be likely to cause either (i) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (ii) any condition set forth in Annex I hereto to be
unsatisfied in any material respect at any time from the date hereof to the date
the Purchaser purchases Shares pursuant to the Offer and (b) any material
failure of the Company or the Purchaser, as the case may be, or any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 6.4
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 6.5. Access to Information.
(a) From the date hereof to the Effective Time, the Company
shall, and shall cause its officers, directors, employees, auditors and agents
to, afford the officers, employees and agents of the Purchaser reasonable access
at all reasonable times to its officers, employees, agents, properties, offices
and other facilities and to all books and records, and shall furnish the
Purchaser with all financial, operating and other data and information as the
Purchaser, through its officers, employees or agents, may reasonably request.
(b) Unless otherwise required by law and until the Appointment
Date, the Purchaser agrees that it shall, and shall
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cause its affiliates and each of their respective officers, directors,
employees, financial advisors and agents (the "Purchaser Representatives"), to
hold in strict confidence all data and information obtained by them from the
Company (unless such information is or becomes publicly available without the
fault of any of the Purchaser Representatives or public disclosure of such
information is required by law in the opinion of counsel to the Purchaser) and
shall ensure that the Purchaser Representatives do not disclose such information
to others without the prior written consent of the Company. Notwithstanding
anything herein to the contrary, the terms of the Confidentiality Agreement,
dated December 1, 1998 (the "Confidentiality Agreement") executed by the
stockholders of Purchaser shall remain in full force and effect.
(c) In the event of the termination of this Agreement, the
Purchaser shall, and shall cause its affiliates to, return (without maintaining
any electronic, digital, magnetic or optical representation thereof) promptly
every document furnished to them by the Company or any of its representatives in
connection with the transactions contemplated hereby and any copies (without
maintaining any electronic, digital, magnetic or optical representation thereof)
thereof which may have been made, and shall cause the Purchaser Representatives
to whom such documents were furnished promptly to return such documents and any
copies thereof any of them may have made, other than documents filed with the
SEC or otherwise publicly available.
SECTION 6.6. Public Announcements. The Purchaser and the
Company shall consult with each other before issuing any press release or
otherwise making any public statements with respect to the Offer or the Merger
and shall not issue any such press release or make any such public statement
before such consultation, except as may be required by law.
SECTION 6.7. Best Efforts; Cooperation. Upon the terms and
subject to the conditions hereof, each of the parties hereto agrees to use its
reasonable best efforts to take or cause to be taken all actions and to do or
cause to be done all things necessary, proper or advisable to consummate the
transactions contemplated by this Agreement and shall use its reasonable best
efforts to obtain all necessary waivers, consents and approvals, and to effect
all necessary filings under the Exchange Act and the HSR Act. The parties hereto
shall cooperate in responding to inquiries from, and making presentations to,
regulatory authorities.
SECTION 6.8. Agreement to Defend and Indemnify.
(a) It is understood and agreed that the Company shall, to the
fullest extent permitted under Delaware Law and regardless of whether the Merger
becomes effective, indemnify, defend and hold harmless, and after the Effective
Time, the Purchaser and the Surviving Corporation shall jointly and
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severally, to the fullest extent permitted under Delaware Law, indemnify, defend
and hold harmless the present and former officers, directors, employees and
agents of the Company ("Indemnified Parties") against any costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation, including without limitation
liabilities arising out of this transaction, under the Exchange Act in
connection with the Offer or the Merger, and in the event of any such claim,
action, suit, proceeding or investigation (whether arising before or after the
Effective Time), (i) the Company or the Surviving Corporation shall pay the
reasonable fees and expenses of counsel selected by the Indemnified Parties,
which counsel shall be reasonably satisfactory to the Company or the Surviving
Corporation, promptly as statements therefor are received, and (ii) the Company
and the Surviving Corporation will cooperate in the defense of any such matter;
provided, however, that neither the Company nor the Surviving Corporation shall
be liable for any settlement effected without its prior written consent (which
consent shall not be unreasonably withheld); and further, provided, that neither
the Company nor the Surviving Corporation shall be obliged pursuant to this
Section 6.8 to pay the fees and disbursements of more than one counsel for all
Indemnified Parties in any single action except to the extent that, in the
opinion of counsel for the Indemnified Parties, two or more of such Indemnified
Parties have conflicting interests in the outcome of such action. For three
years after the Effective Time, the Surviving Corporation shall be required to
maintain or obtain officers' and directors' liability insurance covering the
Indemnified Parties who are currently covered by the Company's officers and
directors liability insurance policy with respect to matters existing or
occurring at or prior to the Effective Time on terms not less favorable than
those in effect on the date hereof in terms of coverage and amounts; provided,
however, that if the aggregate annual premiums for such insurance at any time
during such period shall exceed 150% of the per annum rate of premium currently
paid by the Company for such insurance on the date of this Agreement, which
amount is disclosed on Schedule 6.8 of the Disclosure Schedule, then the
Purchaser shall cause the Company (or the Surviving Corporation if after the
Effective Time) to, and the Company (or the Surviving Corporation if after the
Effective Time) shall, provide the maximum coverage that shall then be available
at an annual premium equal to 150% of such rate. This Section 6.8 shall survive
the consummation of the Merger. The Purchaser shall cause the Surviving
Corporation to reimburse all expenses, including reasonable attorney's fees and
expenses, incurred by any Person to enforce the obligations of the Purchaser and
the Surviving Corporation under this Section 6.8. Notwithstanding Section 9.7
hereof, this Section 6.8 is intended to be for the benefit of and to grant third
party rights to Indemnified Parties whether or not parties to this Agreement,
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and each of the Indemnified Parties shall be entitled to enforce the covenants
contained herein.
(b) If the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any Person, then and in each such case, proper provision shall be made so
that the successors and assigns of the Surviving Corporation assume the
obligations set forth in this Section 6.8.
SECTION 6.9. Debt Offer.
(a) The Company shall, within 10 days of receiving any request
by the Purchaser to do so, commence an offer to purchase (accompanied by a
related solicitation of consents regarding covenant amendments) all of the
Company's outstanding 9 1/2% Senior Discount Notes due 2005 (the "Senior Notes")
on such customary terms and conditions as are acceptable to the Purchaser and
reasonably satisfactory to the Board of Directors (the "Debt Offer"). The
Company shall waive any of the conditions to the Debt Offer and make any other
changes in the terms and conditions of the Debt Offer as may be requested by the
Purchaser and as are reasonably satisfactory to the Board of Directors, and the
Company shall not, without the Purchaser's prior written consent, waive any
material condition to the Debt Offer, make any changes to the terms and
conditions of the Debt Offer set forth in Schedule 6.9 hereto or make any other
material changes in the terms and conditions of the Debt Offer. The Company
covenants and agrees that, subject to the terms and conditions of this
Agreement, including but not limited to the conditions in the Debt Offer, it
will accept for payment and pay for the Senior Notes as soon as reasonably
practicable after such conditions to the Debt Offer are satisfied and it is
permitted to do so under applicable law, provided that the Company shall use
reasonable best efforts to coordinate the timing of any such purchase with the
Purchaser in order to obtain the greatest participation in the Debt Offer.
(b) Promptly following the date of this Agreement, the Company
and the Purchaser shall prepare an offer to purchase for the Senior Notes and
forms of the related letters of transmittal and summary advertisement, as well
as all other information and exhibits (collectively, the "Debt Documents"). All
mailings of the Debt Documents to the holders of the Senior Notes in connection
with the Debt Offer shall be subject to the prior review, comment and approval
of the Purchaser (which approval shall not be unreasonably withheld or delayed).
The Company will use its reasonable best efforts to cause the Debt Documents to
be mailed to the holders of the Senior Notes as promptly as practicable
following receipt of the request from the Purchaser under paragraph (a) above to
do so. The Company agrees promptly
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to correct any information in the Debt Documents that shall be or have become
false or misleading in any material respect.
(c) The Purchaser shall provide to the Company all funds
necessary to consummate the Debt Offer on terms reasonably satisfactory to the
Board of Directors. No term or condition of such funding shall prevent or
restrict the consummation of the Merger.
(d) In the event that the Debt Offer is commenced but is
terminated without consummation, and such failure to consummate is not the
result of the Company's breach, the Purchaser will reimburse the Company for any
and all expenses and fees incurred by the Company in connection with the Debt
Offer.
SECTION 6.10. Qualified Electing Fund Documentation. The
Company has prepared, or caused to be prepared, and has submitted for review to
the Purchaser on or prior to the date hereof, Internal Revenue Service Form 8621
and such amended United States Federal income Tax Returns (and other
documentation), as required for the Company to make a retroactive "Qualified
Electing Fund" election, pursuant to Treasury Regulations Section 1.1295-3T(f),
effective for the Company's entire holding period, with respect to the Company's
interest in Omnitel. Such documentation shall be prepared in such manner as
would fully satisfy the requirements of Treasury Regulations Section
1.1295-3T(g) and the private letter ruling received by the Company dated
November 18, 1998. Such documentation shall not be filed with the Internal
Revenue Service without the Purchaser's prior written consent, which consent
shall not be unreasonably withheld or delayed. The Purchaser will take all
actions necessary to file such Forms 862i and such amended Tax Returns, and
shall cooperate with the Company in connection therewith.
SECTION 6.11. Omnitel Agreement. Notwithstanding anything
herein to the contrary, (i) it shall not constitute a failure of any condition
to the Merger set forth in Article VII of this Agreement nor to the Offer set
forth in Annex I of this Agreement, which conditions are for the benefit of the
Purchaser, if, and (ii) the Purchaser agrees that it will not terminate or seek
to terminate or otherwise impair its performance of this Agreement in any manner
as a result of, in either case, any claim, action, suit, proceeding (including,
without limitation, arbitration proceeding) or other alternative dispute
resolution proceeding or investigation is commenced or threatened against the
Company, the Purchaser, Mannesmann, Olivetti or Oliman Holding B.V. arising out
of, or relating to, the Joint Venture Agreement, dated as of May 3, 1990, among
Ing. C. Olivetti & C., S.p.A., Bell Atlantic International, Inc., CCI
Partnership, Inc., Shearson Lehman Hutton Eurocell Italy, Inc. and Swedish
Telecomm International AB, as amended November 24, 1993 and February 23, 1994,
and in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated
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hereby, other than any of the foregoing brought by or on behalf of the Company.
ARTICLE VII.
CONDITIONS OF MERGER
The respective obligations of each party to effect the
Merger shall be subject to the following conditions, provided that the
obligation of each party shall not be relieved by the failure of any such
conditions if such failure of any such conditions is the proximate result of
any breach by such party of any of its material obligations under this
Agreement.
SECTION 7.1. Offer. The Purchaser shall have made, or caused
to be made, the Offer and shall have purchased, or caused to be purchased, the
Shares pursuant to the Offer; provided, however, that this condition shall be
deemed to have been satisfied with respect to the obligation of the Purchaser to
effect the Merger if the Purchaser fails to accept for payment or pay for Shares
pursuant to the Offer in violation of the terms of the Offer or of this
Agreement.
SECTION 7.2. Stockholder Approval. The Merger and this
Agreement shall have been approved and adopted by the requisite vote of the
stockholders of the Company, if required by Delaware Law.
SECTION 7.3. No Challenge. No statute, rule, regulation,
judgment, writ, decree, order or injunction shall have been promulgated,
enacted, entered or enforced, and no other action shall have been taken, by any
government or governmental, administrative or regulatory authority or by any
court of competent jurisdiction, that in any of the foregoing cases has the
effect of making illegal or directly or indirectly restraining, prohibiting or
restricting the consummation of the Merger.
ARTICLE VIII.
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and
the transactions contemplated herein may be abandoned at any time before the
Effective Time, whether before or after stockholder approval:
(a) By mutual written consent of the Boards of Directors of
the Purchaser and the Company; or
(b) By the Purchaser if the Offer shall have expired or been
terminated without any Shares being purchased thereunder
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by the Purchaser as a result of the occurrence of any of the events set forth in
Annex I; or
(c) By either the Purchaser or the Company if a court of
competent jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued an order, decree or ruling or taken any other
action (which order, decree or ruling the parties hereto shall use their best
efforts to lift), in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement; or
(d) By the Purchaser if, without any material breach by the
Purchaser of its obligations under this Agreement, the purchase of Shares
pursuant to the Offer shall not have occurred on or before May 15, 1999; or
(e) By the Company if, without any material breach by the
Company of its obligations under this Agreement, the purchase of Shares pursuant
to the Offer shall not have occurred on or before May 15, 1999; or
(f) By the Company (i) if there shall be a material breach of
any of the Purchaser's representations, warranties or covenants hereunder, which
breach cannot be or has not been cured within ten days of the receipt of written
notice thereof, or (ii) to allow the Company to enter into an agreement in
accordance with Section 5.3(b) with respect to a Superior Proposal which the
Board of Directors has determined is more favorable to the stockholders of the
Company than the transactions contemplated hereby; provided that it has complied
with all provisions thereof, including the notice provision therein, and that it
makes simultaneous payment of the Termination Fee, plus any amounts then due as
a reimbursement of expenses; or
(g) By the Purchaser if, prior to the purchase of Shares
pursuant to the Offer the Company shall have breached any representation,
warranty or covenant or other agreement contained in this Agreement, which
breach (i) would give rise to the failure of a condition set forth in paragraph
(e) or (f) of Annex I hereto and (ii) cannot be or has not been cured within ten
days of the receipt of written notice thereof; or
(h) By the Purchaser, at any time prior to the purchase of the
Shares pursuant to the Offer, if (i) the Board of Directors shall withdraw,
modify, or change its recommendation or approval in respect of this Agreement or
the Offer in a manner adverse to the Purchaser, (ii) the Board of Directors
shall have recommended any proposal other than by the Purchaser in respect of a
Takeover Proposal, (iii) the Company shall have exercised a right with respect
to a Takeover Proposal referenced in Section 5.3(b) and shall, directly or
through its representatives, continue discussions with any third party
concerning a Takeover Proposal for more than ten business days after the date of
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receipt of such Takeover Proposal, (iv) a Takeover Proposal that is publicly
disclosed shall have been commenced or communicated to the Company which
contains a proposal as to price (without regard to whether such proposal
specifies a specific price or a range of potential prices) and the Company shall
not have rejected such proposal within twenty (20) business days of its receipt
or, if sooner, the date its existence first becomes publicly disclosed, or (v)
any Person or group (as defined in Section 13(d)(3) of the Exchange Act) other
than the Purchaser or any of its Subsidiaries or affiliates shall have become
the beneficial owner of more than 15% of the outstanding Company Common Stock
(either on a primary or a fully diluted basis); provided, however, that this
provision shall not apply to any Person that owns more than 15% of the
outstanding Shares on the date hereof; or
(i) by the Purchaser, if the Company or its representatives
shall have materially breached the provisions of Section 5.1 or Section 5.3
hereof.
SECTION 8.2. Effect of Termination.
(a) In the event of termination of this Agreement as provided
in Section 8.1 hereof, written notice thereof shall forthwith be given to the
other party specifying the provision hereof pursuant to which such termination
is made, and this Agreement shall forthwith become null and void and there shall
be no liability on the part of the Purchaser or the Company, except (i) as set
forth in Sections 6.5 and 9.3 hereof and (ii) nothing herein shall relieve any
party from liability for any breach of this Agreement.
(b) If (i) the Purchaser shall have terminated this Agreement
pursuant to Section 8.1(h) or Section 8.1(i), (ii) the Purchaser shall have
terminated this Agreement pursuant to Section 8.1(g), following the date hereof
but prior to such termination there shall have been a Takeover Proposal
Interest, and within two years of any such termination the Company shall have
entered into a definitive agreement with respect to a Takeover Proposal or a
Takeover Proposal with respect to the Company shall have been consummated or
(iii) the Company shall have terminated this Agreement pursuant to Section
8.1(f)(ii), then in any such case the Company shall pay simultaneously with such
termination if pursuant to Section 8.1(f)(ii) and promptly, but in no event
later than two business days after the date of such termination or event if
pursuant to Section 8.1(h), 8.1(i) or 8.1(g), to the Purchaser a termination fee
(the "Termination Fee") of $43 million, which amount shall be payable by wire
transfer to such account as the Purchaser may designate in writing to the
Company.
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ARTICLE IX.
GENERAL PROVISIONS
SECTION 9.1. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement or
in any schedule, instrument or other document delivered pursuant to this
Agreement shall terminate at the Effective Time or the termination of this
Agreement pursuant to Section 8.1, as the case may be, except that the
agreements set forth in Article II and Section 6.8 shall survive the Effective
Time indefinitely and those set forth in Sections 6.5(b), 6.5(c), 8.2 and 9.3
shall survive termination indefinitely.
SECTION 9.2. Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been duly given or made (i) as of the date delivered or sent by facsimile if
delivered personally or by facsimile, (ii) on the first business day following
dispatch by an internationally recognized overnight courier service to a
domestic addressee, (iii) on the third business day following dispatch by an
internationally recognized overnight courier service to a international
addressee and (iv) on the tenth business day after deposit with a national mail
service, if mailed by registered or certified mail (postage prepaid, return
receipt requested), in each case to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice, except
that notices of changes of address shall be effective upon receipt):
(a) if to the Purchaser
Mannesmann AG
Am Wallgraben 125
D-70565 Stuttgart
Germany
Attention: Dr. Kurt J. Kinzius
Facsimile: 49-711-990-2201
and
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Olivetti S.p.A.
Via Lorenteggio 257
20152 Milan
Italy
Attention: Marco De Benedetti
Facsimile: 39-2-4836-6700
With a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6009
Attention: Neil Novikoff, Esq.
Facsimile: (212) 728-8111
(b) if to the Company:
Cellular Communications International, Inc.
110 East 59th Street
New York, New York 10022
Attention: Richard J. Lubasch, Esq.
Facsimile: (212) 906-8497
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Thomas H. Kennedy, Esq.
Facsimile: (212) 735-2000
SECTION 9.3. Expenses. Except as expressly set forth in
Section 8.2(b), all fees, costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such fees, costs and expenses.
SECTION 9.4. Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned Person. For avoidance of
doubt, NTL, CCPR and Corecomm shall not be considered affiliates of the Company;
(b) "control" (including the terms "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of stock, as trustee or executor, by contract or
credit arrangement or otherwise; and
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(c) "Lien" means any mortgage, pledge, hypothecation,
assignment for security purposes, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including without limitation any conditional sale or other
title retention agreement and any financing lease having substantially the same
economic effect as any of the foregoing); provided, however, that liens for
Taxes not yet due and payable but for which adequate reserves have been
established and other statutory liens shall not be Liens for the purposes of
this Agreement.
(d) "Person" means an individual, corporation, partnership,
limited liability company, association, trust or any unincorporated
organization.
SECTION 9.5. Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 9.6. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the maximum extent possible.
SECTION 9.7. Entire Agreement; No Third-Party Beneficiaries.
This Agreement, the Option Agreement and the Stockholders Agreement constitute
the entire agreement and supersede any and all other prior agreements and
undertakings, both written and oral, between the parties with respect to the
subject matter hereof and, except as otherwise expressly provided herein, this
Agreement is not intended to confer upon any other Person any rights or remedies
hereunder.
SECTION 9.8. Assignment. This Agreement shall not be assigned
by operation of law or otherwise, except that the Purchaser may assign all or
any of its rights hereunder to any affiliate of the Purchaser provided that no
such assignment shall relieve the Purchaser of its obligations hereunder.
SECTION 9.9. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed entirely within that
State.
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SECTION 9.10. Amendment. This Agreement may be amended by the
parties hereto by action taken by the Purchaser and by action taken by or on
behalf of the Board of Directors at any time before the Effective Time;
provided, however, that, after approval, if any, of the Merger by the
stockholders of the Company, no amendment may be made which would reduce the
amount or change the type of consideration into which each Share will be
converted upon consummation of the Merger. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
SECTION 9.11. Waiver. At any time before the Effective Time,
either party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only as against such party and only if
set forth in an instrument in writing signed by such party.
SECTION 9.12. Counterparts. This Agreement may be executed in
two or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Purchaser and the Company have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
CELLULAR COMMUNICATIONS
INTERNATIONAL, INC.
By: /s/ William Ginsberg
---------------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of
Directors, President,
Chief Executive Officer
KENSINGTON ACQUISITION SUB, INC.
By: /s/ Marco De Benedetti
---------------------------------------
Name: Marco De Benedetti
Title: Co-President and
Co-Secretary
By: /s/ Kurt Kinzius
---------------------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and
Co-Secretary
<PAGE>
ANNEX I
Conditions to the Offer. Notwithstanding any other provision
of the Offer, the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) promulgated under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and (subject to any such rules or
regulations) may delay the acceptance for payment of any tendered Shares and
(except as provided in this Agreement) amend or terminate the Offer as to any
Shares not then paid for if (i) the condition that there shall be validly
tendered and not withdrawn prior to the expiration of the Offer a number of
Shares which represents at least a majority of the total number of shares of
Company Common Stock then outstanding on a fully diluted basis (after giving
effect to the conversion or exercise of all outstanding options, warrants and
other rights and securities exercisable or convertible into shares of Company
Common Stock) shall not have been satisfied (the "Minimum Condition"); (ii) any
applicable waiting period under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer; or (iii) at any time after the
date of this Agreement and before the time of acceptance of payment for any such
Shares (whether or not any Shares have theretofore been accepted for payment or
paid for pursuant to the Offer), any of the following conditions exists:
(a) there shall be threatened or pending in effect an
injunction or other order, decree, judgment or ruling by a court of
competent jurisdiction or by a governmental, regulatory or
administrative agency or commission of competent jurisdiction or a
statute, rule, regulation, executive order or other action shall have
been promulgated, enacted, taken or threatened by a Governmental
Authority or a governmental, regulatory or administrative agency or
commission of competent jurisdiction which in any such case (i)
restrains or prohibits the making or consummation of the Offer or the
consummation of the Merger, (ii) prohibits or restricts the ownership
or operation by the Purchaser (or any of its affiliates or
subsidiaries) of any portion of its or the Company's business or assets
which is material to the business of all such entities taken as a
whole, or compels the Purchaser (or any of its affiliates or
subsidiaries) to dispose of or hold separate any portion of its or the
Company's business or assets which is material to the business of all
such entities taken as a whole, (iii) imposes material limitations on
the ability of the Purchaser effectively to acquire or to hold or to
exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by the Purchaser on
all matters properly presented to the stockholders of the Company, (iv)
imposes any material limitations on the ability of the Purchaser or any
of its affiliates or
<PAGE>
subsidiaries effectively to control in any material respect the
business and operations of the Company; or
(b) this Agreement shall have been terminated by the Company
or the Purchaser in accordance with its terms; or
(c) there shall have occurred (i) any general suspension of,
or limitation on prices for, trading in securities on any national
securities exchange or the over-the-counter market for a period in
excess of 24 hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not
related to market conditions), (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory), (iii) a commencement of a
war, armed hostilities or other international or national calamity
directly or indirectly involving the United States (with the exception
of any such occurrence involving Iraq), (iv) any limitation (whether or
not mandatory) by any United States Governmental Authority on the
extension of credit generally by banks, (v) a change in general
financial, bank or capital market conditions which materially and
adversely affects the ability of financial institutions in the United
States to extend credit or syndicate loans to investment grade
securities or (vi) in the case of any of the foregoing existing at the
time of the execution of this Agreement, a material acceleration or
worsening thereof; or
(d) (i) the Board of Directors or any committee thereof shall
have withdrawn or modified in a manner adverse to the Purchaser its
approval or recommendation of the Offer, the Merger or this Agreement,
or approved or recommended any Takeover Proposal, or (ii) the Company
shall have entered into any agreement with respect to any Superior
Proposal in accordance with Section 5.3(b) of this Agreement; or
(e) the representations and warranties of the Company set
forth in this Agreement shall not be true and correct in all material
respects, in each case (i) as of the date referred to in any
representation or warranty which addresses matters as of a particular
date, or (ii) as to all other representations and warranties as of the
date of this Agreement and as of the scheduled expiration of the Offer;
or
(f) the Company shall have failed to perform in all material
respects any obligation or to comply with any agreement or covenant to
be performed or complied with by it under this Agreement; or
(g) the Purchaser shall have failed to receive a certificate
executed by the President or a Vice President of
<PAGE>
the Company, dated as of the scheduled expiration of the Offer, to the
effect that the conditions set forth in paragraphs (e) and (f) of this
Annex I have not occurred; or
(h) there shall have occurred any change (or any development
that, insofar as reasonably can be foreseen, is reasonably likely to
result in any change) that constitutes a Material Adverse Effect; or
(i) any Person acquires beneficial ownership (as defined in
Rule 13d-3 promulgated under the Exchange Act), of at least 15% of the
outstanding Company Common Stock.
The foregoing conditions (other than the Minimum Condition)
are for the sole benefit of the Purchaser and may be asserted by the Purchaser
regardless of the circumstances (including any action or inaction by the
Purchaser) giving rise to any such conditions and may be waived by the Purchaser
in whole or in part at any time and from time to time, in each case, in the
exercise of the good faith judgment of the Purchaser and subject to the terms of
this Agreement. The failure by the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time.
<PAGE>
OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of December 11, 1998 (this
"Agreement"), between Kensington Acquisition Sub, Inc., a Delaware corporation
("Purchaser"), and Cellular Communications International, Inc., a Delaware
corporation (the "Company").
WHEREAS, Purchaser and the Company, concurrently with the
execution and delivery of this Agreement, have entered into an Agreement and
Plan of Merger, dated as of the date hereof (the "Merger Agreement"), providing
for, among other things, the merger of Purchaser with and into the Company (the
"Merger"); and
WHEREAS, as a condition to the willingness of Purchaser to
enter into the Merger Agreement, Purchaser has required that the Company agree,
and in order to induce Purchaser to enter into the Merger Agreement the Company
has agreed, to grant Purchaser the Option (as defined below) upon the terms and
subject to the conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and the
mutual promises, representations, warranties, covenants and agreements contained
herein and in the Merger Agreement, the parties hereto, intending to be legally
bound hereby, agree as follows:
ARTICLE I
THE OPTION
SECTION 1.1 Grant of Option. The Company hereby grants to
Purchaser an irrevocable option (the "Option") to purchase up to 4,338,133
newly-issued shares ("Shares") of the Common Stock, par value $.01 per share
("Company Common Stock"), of the Company at a purchase price per share of $65.75
(the "Exercise Price"), in the manner set forth in Sections 1.2 and 1.3 of this
Agreement; provided, however, that in no event shall the number of Shares for
which the Option is exercisable exceed 19.9% of the Company's issued and
outstanding shares of Company Common Stock. The number of Shares that may be
received upon the exercise of the Option and the Exercise Price are subject to
adjustment as herein set forth. This Agreement shall terminate, and the Option
hereby granted shall expire, on the earliest of (i) the Effective Time (as
defined in the Merger Agreement) and (ii) to the extent that no Option Notice
(as defined below) has theretofore been given by Purchaser, six (6) months after
any termination of the Merger Agreement pursuant to Section 8.1(b), (f)(ii),
(g), (h) or (i) thereof and at the time of termination of the Merger Agreement
pursuant to Section 8.1(a), (c), (d), (e) or (f)(i).
<PAGE>
hereunder in accordance with the terms of this Agreement (other than such time
as Purchaser is in material breach of its obligations under the Merger
Agreement), Purchaser (or its designee) may exercise the Option, in whole or in
part, if on or after the date hereof:
(a) any corporation, partnership, individual, trust,
unincorporated association, or other entity or "person" (as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"),) other than Purchaser or any of its "affiliates" (as defined in the
Exchange Act) (a "Third Party"), shall have:
(i) commenced or announced an intention to
commence a tender offer or exchange offer for any shares of Company
Common Stock, the consummation of which would result in "beneficial
ownership" (as defined under the Exchange Act) by such Third Party
(together with all such Third Party's affiliates and "associates" (as
such term is defined in the Exchange Act)) of 15% or more of the then
outstanding voting equity of the Company (either on a primary or a
fully diluted basis); or
(ii) acquired beneficial ownership of shares of
Company Common Stock which, when aggregated with any shares of Company
Common Stock already owned by such Third Party, its affiliates and
associates, would result in the aggregate beneficial ownership by such
Third Party, its affiliates and associates of 15% or more of the then
outstanding voting equity of the Company (either on a primary or a
fully diluted basis); provided, however, that "Third Party" for
purposes of this clause (ii) shall not include any corporation,
partnership, person, other entity or group which beneficially owns more
than 15% of the outstanding voting equity of the Company (either on a
primary or a fully diluted basis) as of the date hereof and that does
not, after the date hereof, increase such ownership percentage by more
than an additional 1% of the outstanding voting equity of the Company
(either on a primary or a fully diluted basis); or
(b) any of the events described in Section 8.1(g)
(so long as following the date hereof but prior to any termination
there shall have been a Takeover Proposal Interest (as defined in the
Merger Agreement)), 8.1(h) or 8.1(i) of the Merger Agreement that would
allow Purchaser to terminate the Merger Agreement has occurred (but
without the necessity of Purchaser having terminated the Merger
Agreement).
In the event that Purchaser wishes to exercise all or any part
of the Option, Purchaser shall give written notice (the "Option Notice," with
the date of the Option Notice being hereinafter called the "Notice Date") to the
Company specifying
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<PAGE>
the number of Shares it will purchase and a place and date (not earlier than
three (3) nor later than twenty (20) business days from the Notice Date) for
closing such purchase (a "Closing"). Purchaser's obligation to purchase Shares
upon any exercise of the Option is subject (at its election) to the conditions
that (i) no preliminary or permanent injunction or other order against the
purchase, issuance or delivery of the Shares issued by any federal, state or
foreign court of competent jurisdiction shall be in effect (and no action or
proceeding shall have been commenced or threatened for purposes of obtaining
such an injunction or order), (ii) any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
shall have expired and (iii) there shall have been no material breach of the
representations, warranties, covenants or agreements of the Company contained in
this Agreement or the Merger Agreement; provided, however, that any failure by
Purchaser to purchase Shares upon exercise of the Option at any Closing as a
result of the nonsatisfaction of any of such conditions shall not affect or
prejudice Purchaser's right to purchase such Shares upon the subsequent
satisfaction of such conditions. Upon request by Purchaser, the Company will
promptly take all action required to effect all necessary filings by the Company
under the HSR Act.
SECTION 1.3 Purchase of Shares. At any Closing, (i) the
Company will deliver to Purchaser the certificate or certificates representing
the number of Shares being purchased in proper form for transfer upon exercise
of the Option in the denominations designated by Purchaser in the Option Notice,
and, if the Option has been exercised in part, a new Option evidencing the
rights of Purchaser to purchase the balance of the Shares subject thereto, and
(ii) Purchaser shall pay the aggregate purchase price for the Shares to be
purchased by delivery to the Company of a certified or bank cashier's check
payable in New York Clearing House funds to the order of the Company in the
amount of the Exercise Price times the number of Shares to be purchased.
SECTION 1.4 Adjustments Upon Share Issuances, Changes in
Capitalization, etc. (a) In the event of any change in Company Common Stock or
in the number of outstanding shares of Company Common Stock by reason of a stock
dividend, split-up, recapitalization, combination, exchange of shares or similar
transaction or any other change in the corporate or capital structure of the
Company (including, without limitation, the declaration or payment of an
extraordinary dividend of cash, securities or other property), the type and
number of the Shares to be issued by the Company upon exercise of the Option
shall be adjusted appropriately, and proper provision shall be made in the
agreements governing such transaction, so that Purchaser shall receive upon
exercise of the Option the number and class of shares or other securities or
property that Purchaser would have received in respect to the Company Common
Stock if the Option had
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<PAGE>
been exercised immediately prior to such event, or the record date therefor,
as applicable, and the holder of such Company Common Stock had elected to the
fullest extent it would have been permitted to elect, to receive such
securities, cash or other property.
(b) In the event that the Company shall enter into an
agreement (i) to consolidate with or merge into any person, other than
Purchaser or one of its subsidiaries, and shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) to permit any
person, other than Purchaser or one of its subsidiaries, to merge into the
Company and the Company shall be the continuing or surviving corporation,
but, in connection with such merger, the then outstanding shares of Company
Common Stock shall be changed into or exchanged for stock or other securities
of the Company or any other person or cash or any other property, or then
outstanding shares of Company Common Stock shall after such merger represent
less than 50% of the outstanding shares and share equivalents of the
surviving corporation or (iii) to sell or otherwise transfer all or
substantially all of its assets to any person, other than Purchaser or one of
its subsidiaries, then, and in each such case, proper provision shall be made
in the agreements governing such transaction so that Purchaser shall receive
upon exercise of the Option the number and class of shares or other
securities or property that Purchaser would have received in respect of
Company Common Stock if the Option had been exercised immediately prior to
such transaction, or the record date therefor, as applicable, and the holder
of such Company Common Stock had elected to the fullest extent it would have
been permitted to elect, to receive such securities, cash or other property.
(c) The rights of Purchaser under this Section 1.4 shall be
in addition to, and shall in no way limit, its rights against the Company for
any breach of the Merger Agreement.
(d) The provisions of this Agreement shall apply with
appropriate adjustments to any securities for which the Option becomes
exercisable pursuant to this Section 1.4.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser as
follows:
SECTION 2.1 Authority Relative to this Agreement. The Company
is a corporation duly organized and validly existing under the laws of the State
of Delaware. The Company has all necessary power and authority (corporate and
otherwise) to execute and deliver this Agreement, to perform its obligations
4
<PAGE>
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company, and no other corporate proceeding on the part
of the Company is necessary to authorize this Agreement or for the Company to
consummate such transactions. This Agreement has been duly and validly executed
and delivered by the Company.
SECTION 2.2 No Conflict; Required Filings and Consents. The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Restated Certificate of Incorporation or Bylaws of the Company, (ii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to the Company or by which the Company is bound or affected, (iii)
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance of any kind on any of the Shares pursuant
to, any agreement, contract, indenture, notice or instrument to which the
Company is a party or by which the Company is bound or affected, or (iv) except
for applicable requirements, if any, of the HSR Act, the Exchange Act and the
Securities Act of 1933, as amended (the "Securities Act"), require any filing by
the Company with, or any permit, authorization, consent or approval of, any
governmental or regulatory authority, domestic or foreign.
SECTION 2.3 Option Shares. The Company has taken all necessary
corporate action to authorize and reserve for issuance upon exercise of the
Option a total of 4,338,133 Shares, and the Shares, when issued and delivered by
the Company to Purchaser (or its designee) upon exercise of the Option will be
duly authorized, validly issued, fully paid and nonassessable shares of Company
Common Stock, and will be free and clear of any security interests, liens,
claims, pledges, charges or encumbrances of any kind.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company as
follows:
SECTION 3.1 Authority Relative to this Agreement. Purchaser is
a corporation duly organized and validly existing under the laws of the State of
Delaware. Purchaser has all necessary power and authority (corporate and
otherwise) to execute and deliver this Agreement, to perform its obligations
5
<PAGE>
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation by Purchaser of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of Purchaser, and no other corporate proceeding on the part of
Purchaser is necessary to authorize this Agreement or for Purchaser to
consummate such transactions. This Agreement has been duly executed and
delivered by Purchaser and, assuming its due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms.
SECTION 3.2 No Conflict, Required Filing and Consents. The
execution and delivery of this Agreement by Purchaser do not, and the
performance of this Agreement by Purchaser will not, (i) conflict with or
violate the organizational documents of Purchaser, (ii) conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to Purchaser or
by which Purchaser is bound or affected, (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, contract, indenture,
note or instrument to which Purchaser is a party or by which it is bound or
affected or (iv) except for applicable requirements, if any, of the HSR Act, the
Exchange Act and the Securities Act, require any filing by Purchaser with, or
any permit, authorization, consent or approval of, any governmental or
regulatory authority, domestic or foreign, except in the case of each of the
foregoing clauses (i) through (iv) for any such conflicts, violations, breaches,
defaults, failures to file or obtain the consent or approval of, or other
occurrences that would not cause or create a material risk of non-performance or
delayed performance by Purchaser of its obligations under this Agreement.
SECTION 3.3 Investment Intent. The purchase of Shares pursuant
to this Agreement is for the account of Purchaser for the purpose of investment
and not with a view to or for sale in connection with any distribution thereof
within the meaning of the Securities Act and the rules and regulations
promulgated thereunder.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.1 Registration Rights; Listing of Shares. (a) Upon
the written request of Purchaser, the Company agrees to effect up to two
registrations under the Securities Act and any applicable state securities laws
covering any part or all of the Option (provided that only Shares will be
distributed to the public) and any part or all of the Shares purchased under
this
6
<PAGE>
Agreement, which registration shall be continued in effect for 90 days, unless,
in the written opinion of counsel to the Company, addressed to Purchaser and
reasonably satisfactory in form and substance to counsel for Purchaser, such
registration is not required for the sale and distribution of such Shares in the
manner contemplated by Purchaser. The registration effected under this paragraph
shall be effected at the Company's expense except for any underwriting
commissions. If Shares are offered in a firm commitment underwriting, the
Company will provide reasonable and customary indemnification to the
underwriters. In the event of any demand for registration pursuant to this
paragraph, the Company may delay the filing of the registration statement for a
period of up to 90 days if, in the good faith judgment of the Board of Directors
of the Company, such delay is necessary in order to avoid interference with a
planned material transaction involving the Company. In the event the Company
effects a registration of Company Common Stock for its own account or for any
other stockholder of the Company (other than on Form S-4 or Form S-8 or any
successor or similar form), it shall allow Purchaser to participate in such
registration; provided, however, that if the managing underwriters in such
offering advise the Company in writing that in their opinion the number of
shares of Company Common Stock requested to be included in such registration
exceeds the number which can be sold in such offering, the Company will include
the securities requested to be included therein pro rata among the holders
requesting to be included.
(b) The Company shall, at its expense, use its best efforts to
cause the Shares to be approved for listing on the Nasdaq National Market (the
"NNM") subject to notice of issuance, as promptly as practicable following the
date of this Agreement, and will provide prompt notice to the NNM of the
issuance of each Share pursuant to any exercise of the Option.
SECTION 4.2 Right to Sell Option. At any time that Purchaser
is entitled to exercise the Option pursuant to Section 1.2 hereof, Purchaser may
elect, in its sole discretion, to sell the Option to the Company in lieu of
exercising the Option. The Company shall be required to purchase the Option from
Purchaser on the third business day after the Purchaser gives the Company
written notice of such election for a cash price (payable by certified or
official bank check in same day funds to Purchaser or its designee) equal to the
product of the number of Shares then covered by the Option multiplied by the
excess over the Exercise Price of the greater of (x) the closing price of a
share of Company Common Stock on the NNM on the last trading day prior to the
date of such notice and (y) the highest price per share of Company Common Stock
paid or proposed to be paid to any holder thereof by any person in any Takeover
Proposal (as defined in the Merger Agreement). The Company shall give Purchaser
prompt written notice of the occurrence of any event set forth in Section 1.2
hereof and of any agreements or proposals relating to
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<PAGE>
such an event, but the failure to give any such notice shall not limit
Purchaser's right to require the Company to purchase the Option pursuant to this
Section 4.2.
SECTION 4.3 Limitation on Profit. (a) Notwithstanding any
other provision of this Agreement, in no event shall Purchaser's Total Profit
(as defined below) exceed $14 million and, if it otherwise would exceed such
amount, Purchaser, at its sole election, shall either (a) reduce the number of
shares of Company Common Stock subject to the Option, (b) deliver to the Company
for cancellation Shares previously purchased by Purchaser, (c) pay cash to the
Company, or (d) any combination thereof, so that Purchaser's actually realized
Total Profit shall not exceed $14 million after taking into account the
foregoing actions.
(b) As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (i) (x) the net cash amounts
received by Purchaser pursuant to the sale of Shares (or any other securities
into which such Shares are converted or exchanged) to any unaffiliated party,
less (y) Purchaser's purchase price of such Shares, and (ii) any Notional Total
Profit (as defined below).
(c) As used herein, the term "Notional Total Profit" with
respect to the total number of Shares as to which Purchaser could propose to
exercise the Option shall be the Total Profit determined as of the date of such
proposal assuming that the Option were fully exercised on such date for such
number of Shares and assuming that such Shares, together with all other Shares
held by Purchaser and its affiliates as of such date, were sold for cash at the
closing market price for the Company Common Stock as of the close of business on
the preceding trading day (less customary brokerage commissions).
SECTION 4.4 Transfer of Shares; Restrictive Legend. Purchaser
agrees not to transfer or otherwise dispose of the Shares, or any interest
therein, without first providing to the Company an opinion of counsel for
Purchaser, reasonably satisfactory in form and substance to counsel for the
Company, to the effect that such transfer or disposition will not violate the
Securities Act or any applicable state law governing the offer and sale of
securities, and the rules and regulations thereunder. Purchaser further agrees
to the placement on the certificate(s) representing the Shares of the following
legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE."
provided that upon provision to the Company of any opinion of counsel for
Purchaser, reasonably satisfactory in form and
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<PAGE>
substance to counsel for the Company, to the effect that such legend is no
longer required under the provisions of the Securities Act or applicable state
securities laws, the Company shall promptly cause new unlegended certificates
representing such Shares to be issued to Purchaser against surrender of such
legended certificates.
SECTION 4.5 Best Efforts. Subject to the terms and conditions
of this Agreement, Purchaser and the Company shall each use its best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
Each party shall promptly consult with the other and provide any necessary
information and material with respect to all filings made by such party with any
governmental or regulatory authority in connection with this Agreement or the
transactions contemplated hereby.
SECTION 4.6 Further Assurances. The Company shall perform such
further acts and execute such further documents and instruments as may
reasonably be required to vest in Purchaser the power to carry out the
provisions of this Agreement. If Purchaser shall exercise the Option, or any
portion thereof, in accordance with the terms of this Agreement, the Company
shall, without additional consideration, execute and deliver all such further
documents and instruments and take all such further action as Purchaser may
reasonably request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
SECTION 4.7 Survival. All of the representations, warranties
and covenants contained herein shall survive a Closing and shall be deemed to
have been made as of the date hereof and as of the date of each Closing.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Specific Performance. The parties hereto agree
that if any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached, irreparable damage would
occur, no adequate remedy at law would exist and damages would be difficult to
determine, and that the parties shall be entitled to specific performance of the
terms hereof, without any requirement for securing or posting any bond, in
addition to any other remedy at law or equity.
SECTION 5.2 Entire Agreement. This Agreement constitutes the
entire agreement of the parties hereto with
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respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
SECTION 5.3 Amendment; Assignment. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto and
specifically referencing this Agreement. No party to this Agreement may assign
any of its rights or obligations under this Agreement without the prior written
consent of the other party hereto, except that the rights and obligations of
Purchaser hereunder may, upon written notice to the Company prior to or promptly
following such action, be assigned by Purchaser to any of its corporate
affiliates, but no such transfer shall relieve Purchaser of its obligations
hereunder if such transferee does not perform such obligations.
SECTION 5.4 Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any
provisions hereof or thereof shall not affect the validity and enforceability of
the other provisions hereof. If any provision of this Agreement, or the
application thereof, to any person or entity or any circumstances is invalid or
unenforceable, (i) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid and unenforceable provision and (ii) the
remainder of this Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
SECTION 5.5 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware without
giving effect to the provisions thereof relating to conflicts of law.
SECTION 5.6 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
each of which together shall constitute one and the same document.
SECTION 5.7 Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been duly given or made (i) as of the date delivered or sent by facsimile if
delivered personally or by facsimile, (ii) on the first business day following
dispatch by an internationally recognized overnight courier service to a
domestic addressee, (iii) on the third business day following dispatch by an
internationally recognized overnight courier service to a international
addressee and (iv) on the tenth business day after deposit with a national mail
service, if mailed by registered or certified mail (postage prepaid, return
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receipt requested), in each case to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice, except
that notices of changes of address shall be effective upon receipt):
(a) if to the Company, to
Cellular Communications International, Inc.
110 East 59th Street
New York, New York 10022
Attn: Richard Lubasch, Esq.
Fax: (212) 906-8497
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Thomas H. Kennedy, Esq.
Fax: (212) 735-2000
(b) if to Purchaser, to
Mannesmann AG
Am Wallgraben 125
D-70565 Stuttgart
Germany
Attn: Dr. Kurt J. Kinzius
Fax: 49-711-990-2201
and
Olivetti S.p.A.
Via Lorenteggio 257
20152 Milan
Italy
Attn: Marco De Benedetti
Fax: 39-2-4836-6700
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Attn: Neil Novikoff, Esq.
Fax: (212) 728-8111
SECTION 5.8 Binding Effect. The terms of this Agreement shall
inure to the benefit of and be binding upon by the successors and assigns of the
parties hereto. Nothing expressed or referred to in this Agreement is intended
or shall be construed to give any person other than the parties to this
Agreement, or their respective successors or assigns, any legal
11
<PAGE>
or equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
12
<PAGE>
IN WITNESS WHEREOF, each of the Company and Purchaser have
caused this Agreement to be executed on its behalf by its officers thereunto
duly authorized, all as of the date first above written.
CELLULAR COMMUNICATIONS
INTERNATIONAL, INC.
By: /s/ William Ginsberg
-----------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of
Director, President,
Chief Executive Officer
KENSINGTON ACQUISITION SUB, INC.
By: /s/ Marco De Benedetti
-----------------------------
Name: Marco De Benedetti
Title: Co-President and
Co-Secretary
By: /s/ K. Kinzius
-----------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and
Co-Secretary
<PAGE>
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of December 11,
1998, by and among Cellular Communications International, Inc., a Delaware
corporation (the "Company"), Kensington Acquisition Sub, Inc., a Delaware
corporation ("Purchaser"), and the persons listed on Schedule 1 hereto (the
"Stockholders").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company and Purchaser have entered into an Agreement and Plan of
Merger, dated as of the date hereof (as such agreement may hereafter be amended
from time to time, the "Merger Agreement"), pursuant to which, among other
things, Purchaser will make a tender offer (the "Offer") for all outstanding
shares of common stock, par value $.01 per share ("Shares"), of the Company at a
price of $65.75 per Share (the "Offer Price"), net to the seller in cash, to be
followed by a merger of Purchaser with and into the Company, and each issued and
outstanding Share, except as set forth in the Merger Agreement, will be
converted into the right to receive the Offer Price;
WHEREAS, the Stockholders are the Beneficial Owners (as defined
below) and owners of record, and have the sole right to vote and dispose of,
Shares as indicated on Schedule 1 hereto (with respect to such Stockholder,
together with any other Shares acquired by such Stockholder after the date
hereof and during the term of the Agreement, collectively the "Owned Shares");
and
WHEREAS, as an inducement and a condition to its entering into the
Merger Agreement and incurring the obligations set forth therein, Purchaser has
required that the Stockholders enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, representations, warranties, covenants and agreements contained herein
and in the Merger Agreement, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Certain Definitions. Capitalized terms not defined herein have
the respective meanings ascribed to them in the Merger Agreement. In addition,
for purposes of this Agreement:
"Affiliate" means, with respect to any specified Person, any Person
that directly, or indirectly through one or
<PAGE>
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified.
"Beneficially Own", "Beneficial Owner" or "Beneficial Ownership"
with respect to any securities means having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Exchange Act),
including pursuant to any agreement, arrangement or understanding, whether or
not in writing. Without duplicative counting of the same securities by the same
holder, securities Beneficially Owned by a Person shall include securities
Beneficially Owned by all Affiliates of such Person and all other Persons with
whom such Person would constitute a "group" within the meaning of Section 13(d)
of the Exchange Act and the rules promulgated thereunder.
"Person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Representative" means, with respect to any Person, as applicable,
such Person's officers, directors, employees, agents and representatives
(including any investment banker, financial advisor, agent, representative or
expert retained by or acting on behalf of such Person or its Subsidiaries).
"Transfer" means, with respect to a security, the sale, transfer,
pledge, hypothecation, encumbrance, assignment or disposition of such security
or the Beneficial Ownership thereof, the offer to make such a sale, transfer or
other disposition, and each option, agreement, arrangement or understanding,
whether or not in writing, to effect any of the foregoing. As a verb, "Transfer"
shall have a correlative meaning.
2. Agreement to Tender; Voting of Owned Shares; Proxy. (a) If
requested by the Purchaser, the Company shall take all actions necessary to
provide that, prior to the Expiration Date, all Options granted to Stockholders
under the Option Plans are vested and exercisable. Each Stockholder hereby
agrees, if requested by the Purchaser, to exercise (on the Expiration Date but
not earlier than 5 p.m. on such date) all Options granted to such Stockholder
under the Option Plans, which exercise may be conditional upon the satisfaction
of the following: the receipt of a notice from the Purchaser that, as of 5 p.m.
on such day, it expects satisfaction of all conditions in the Offer; the
delivery of an irrevocable notice by the Purchaser to the Depositary of its
acceptance for payment of the tenders of the Shares pursuant to the Offer and a
calculation showing that such exercise and tender will, giving effect to all
Shares tendered as of 5 p.m. on such day, result in a tender of over 9O% of the
outstanding Shares in the Offer. In connection with such exercise, the Purchaser
will indemnify the Stockholder against any and all costs, expenses and taxes
incurred by such Stockholder which would not be incurred by such Stockholder if
the Options were treated pursuant to Section 2.12(a) of the Merger Agreement.
2
<PAGE>
During the period commencing on the date hereof and continuing until the earlier
to occur of (i) the Effective Time and (ii) the termination of the Merger
Agreement in accordance with its terms (such period being referred to as the
"Voting Period"), each Stockholder (x) hereby agrees to validly tender (or cause
the record owner of such Shares to validly tender) and sell (and not withdraw)
pursuant to the Offer not later than the tenth business day after commencement
of the Offer all of the Owned Shares; and (y) at any meeting (whether annual or
special, and whether or not an adjourned or postponed meeting) of the Company's
stockholders, however called, or in connection with any written consent of the
Company's stockholders, subject to the absence of a preliminary or permanent
injunction or other final order by any United States federal, state or foreign
court barring such action, shall vote (or cause to be voted) all of its Owned
Shares:
a. in favor of the Merger, the execution and delivery by the Company
of the Merger Agreement and the approval and adoption of the Merger and
the terms thereof and each of the other actions contemplated by the Merger
Agreement and this Agreement and any actions required in furtherance
thereof and hereof;
b. against any action or agreement that would (A) result in a breach
of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or of such Stockholder
under this Agreement or (B) impede, interfere with, delay, postpone, or
adversely affect the Merger or the transactions contemplated thereby or
hereby; and
c. except as otherwise agreed to in writing in advance by Purchaser,
against the following actions (other than the Merger and the transactions
contemplated by the Merger Agreement and this Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or
other business combination, involving the Company or any of its
Subsidiaries; (B) any sale, lease or transfer of a material amount of the
assets or business of the Company or its Subsidiaries, or any
reorganization, restructuring, recapitalization, special dividend,
dissolution, liquidation or winding up of the Company or its Subsidiaries;
(C) any change in the present capitalization of the Company, including any
proposal to sell any equity interest in the Company or any of its
Subsidiaries or any amendment of the Restated Certificate of Incorporation
or Bylaws of the Company; (D) any change in the majority of the Board of
Directors; (E) any other change in the Company's corporate structure or
business; and (F) any other action which is intended or could reasonably
be expected to impede, interfere with, delay, postpone, discourage or
affect the Merger, the transactions contemplated by the Merger Agreement
or this Agreement or the contemplated economic benefits of any of the
foregoing. No Stockholder shall
3
<PAGE>
enter into any agreement, arrangement or understanding with any Person the
effect of which would be inconsistent with or violative of the provisions
and agreement contained in this Section 2(a).
(b) IRREVOCABLE PROXY. EACH STOCKHOLDER HEREBY GRANTS TO, AND
APPOINTS PURCHASER, DR. KURT J. KINZIUS AND MARCO DE BENEDETTI, IN THEIR
RESPECTIVE CAPACITIES AS OFFICERS OF PURCHASER, AND ANY INDIVIDUAL WHO SHALL
HEREAFTER SUCCEED TO ANY SUCH OFFICE OF THE PURCHASER, AND ANY OTHER DESIGNEE OF
PURCHASER, EACH OF THEM INDIVIDUALLY, SUCH STOCKHOLDER'S IRREVOCABLE (UNTIL THE
END OF THE VOTING PERIOD) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF
SUBSTITUTION) TO VOTE THE OWNED SHARES OF THE STOCKHOLDER AS INDICATED IN
SECTION 2(a) ABOVE. THE STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL
THE END OF THE VOTING PERIOD) AND COUPLED WITH AN INTEREST AND SHALL TAKE SUCH
FURTHER ACTIONS AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE OWNED SHARES.
3. (a) Restrictions on Transfer, Other Proxies. No Stockholder
shall, until the expiration of the Voting Period, directly or indirectly: (i)
Transfer to any Person any or all Owned Shares; (ii) except as provided in
Section 2(b), grant any proxies or powers of attorney, deposit any Owned Shares
into a voting trust or enter into a voting agreement, understanding or
arrangement with respect to such Owned Shares; or (iii) take any action that
would make any representation or warranty of such Stockholder contained herein
untrue or incorrect or would result in a breach by such Stockholder of its
obligations under this Agreement or a breach by the Company of its obligations
under the Merger Agreement. Notwithstanding the foregoing, the Stockholder may
transfer Shares to (x) an Affiliate of the Stockholder, (y) any member of the
immediate family of the Stockholder or trusts for the benefit of family members
of the Stockholder or (z) any organizations qualifying under Section 501(c) (3)
of the Internal Revenue Code of 1986, as amended, in each case under clauses
(x), (y) and (z), that agrees to be bound by this Agreement.
(b) Notwithstanding anything herein to the contrary, the Stockholder
may exercise Options pursuant to a "cashless exercise" or similar provision,
such that the number of Shares actually received may be less than the number of
Shares set forth on Schedule 1.
(c) Each Stockholder hereby agrees, during the Voting Period, to
place the following legend on any and all certificates representing any Owned
Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER PURSUANT TO THAT CERTAIN
STOCKHOLDERS AGREEMENT,
4
<PAGE>
DATED AS OF DECEMBER 11, 1998, BY AND AMONG THE
STOCKHOLDERS OF CELLULAR COMMUNICATIONS
INTERNATIONAL, INC. PARTY THERETO, CELLULAR
COMMUNICATIONS INTERNATIONAL, INC. AND KENSINGTON
ACQUISITION SUB, INC. AND ANY TRANSFER OF SUCH SHARES
IN VIOLATION OF THE TERMS OF SUCH AGREEMENT SHALL BE
NULL AND VOID AND OF NO EFFECT WHATSOEVER.
4. No Solicitation. (a) Other than as required in his capacity as
director of the Company (or as an officer of the Company acting at the direction
of the Board of Directors of the Company) under applicable law and fiduciary
duties, in which case his actions shall be restricted solely by the terms of the
Merger Agreement, each Stockholder and its Affiliates shall not, and shall
instruct their respective officers, directors, employees, agents or other
Representatives not to,
(i) directly or indirectly solicit, initiate, or encourage
(including by way of furnishing nonpublic information or assistance), or
take any other action to facilitate, any inquiries or proposals from any
Person that constitute, or may reasonably be expected to lead to, a
Takeover Proposal,
(ii) enter into, maintain, or continue discussions or negotiations
with any party (other than Purchaser) in furtherance of such inquiries or
to obtain a Takeover Proposal, and shall use their best efforts to cause
any such party in possession of confidential information about the Company
that was furnished by or on behalf of the Stockholder to return or destroy
all such information in the possession of any such party (other than the
Company) or in the possession of any Representative of any such party,
(iii) agree to or endorse any Takeover Proposal, or
(iv) authorize or permit the Stockholder's or any of its Affiliates'
Representatives to take any such action.
(b) During the Voting Period, other than as required in his capacity
as director of the Company (or as an officer of the Company acting at the
direction of the Board of Directors of the Company) under applicable law and
fiduciary duties, in which case his actions shall be restricted solely by the
terms of the Merger Agreement, each Stockholder shall not, and shall cause its
Affiliates not to, directly or indirectly, make any public comment, statement or
communication, or take any action that would otherwise require any public
disclosure by such Stockholder, the Company, Purchaser or any other Person,
concerning the Merger and the other transactions contemplated by the Merger
Agreement and this Agreement except for any disclosure (i) concerning the status
of the Stockholder as a party to this Agreement, the terms hereof, and its
Beneficial Ownership of
5
<PAGE>
Shares required pursuant to Section 13(d) of the Exchange Act or (ii) required
in the Proxy Statement (as defined in the Merger Agreement).
5. Proprietary Information. Except as required by law, no
Stockholder and no Representative of any Stockholder shall, at any time,
directly or indirectly, make use of or divulge or otherwise disclose to any
Person other than Purchaser, any trade secret, confidential information or other
proprietary information or data (including any financial data, mailing lists,
customer lists or employee data or records) concerning the business or policies
of the Company or its Subsidiaries that such Stockholder or any of its
Representatives may have learned as a stockholder, employee, officer or director
of the Company or any of its Subsidiaries.
6. Representations and Warranties of the Stockholder. Each
Stockholder hereby severally represents, warrants and covenants to Purchaser as
follows:
(a) Due Authorization, Etc. Such Stockholder has all necessary power
and authority to enter into and perform this Agreement and its obligations
hereunder, and no other proceedings or actions on the part of such Stockholder
are necessary to authorize the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby. Such
Stockholder currently has good, valid and marketable title to the Owned Shares,
free and clear of all security interests, liens, claims, charges, encumbrances,
equities and options of any nature whatsoever, and with no restriction on the
voting rights pertaining thereto. The Stockholder further warrants that there
are no outstanding options, warrants or rights to purchase or acquire, or
agreements relating to, any of the Owned Shares.
(b) Enforceability. This Agreement constitutes a valid and binding
agreement of such Stockholder, enforceable against such Stockholder in
accordance with its terms. Neither the execution and delivery of this Agreement
by such Stockholder nor the consummation by such Stockholder of the transactions
contemplated hereby shall conflict with or constitute a violation of or default
under any contract, commitment, agreement, arrangement or restriction of any
kind to which such Stockholder is a party or by which such Stockholder is bound.
(c) Voting Rights. Except as provided in Section 2(b) hereof, such
Stockholder has sole power to vote and to dispose of the Owned Shares, and sole
power to issue instructions with respect to the Owned Shares to the extent
appropriate in respect of the matters set forth in this Agreement, sole power to
demand appraisal rights and sole power to agree to all of the matters set forth
in this Agreement, in each case with respect to all of the Owned Shares, with no
limitations, qualifications, or
6
<PAGE>
restrictions on such rights, subject to applicable securities laws and the terms
of this Agreement.
(d) No Filings. Except for filings, authorizations, consents and
approvals as may be required under, and other applicable requirements of, the
HSR Act and the Exchange Act, (i) no filing with, and no permit, authorization,
consent or approval of, any state or federal governmental body or authority is
necessary for the execution of this Agreement by such Stockholder and the
consummation by such Stockholder of the transactions contemplated hereby and
(ii) none of the execution and delivery of this Agreement by such Stockholder,
the consummation by such Stockholder of the transactions contemplated hereby or
compliance by such Stockholder with any of the provisions hereof shall (A)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, loan agreement, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which such Stockholder is a
party or by which such Stockholder or any of its properties or assets (including
the Owned Shares) may be bound, or (B) violate any order, writ, injunction,
decree, judgment, statute, rule or regulation applicable to such Stockholder or
any of its properties or assets.
(e) Such Stockholder understands and acknowledges that Purchaser is
entering into the Merger Agreement, and is incurring the obligations set forth
therein, in reliance upon the Stockholder's execution and delivery of this
Agreement.
7. Representations and Warranties of Purchaser. Purchaser hereby
represents, warrants and covenants to each Stockholder as follows:
(a) Due Authorization, Etc. Purchaser has all necessary corporate
power and authority to enter into and perform this Agreement and its obligations
hereunder, and no other proceedings or actions on the part of Purchaser are
necessary to authorize the execution, delivery or performance of this Agreement
or the consummation of the transactions contemplated hereby.
(b) Enforceability. This Agreement constitutes a valid and binding
agreement of Purchaser, enforceable against Purchaser in accordance with its
terms. Neither the execution and delivery of this Agreement by Purchaser nor the
consummation by Purchaser of the transactions contemplated hereby shall conflict
with or constitute a violation of or default under any contract, commitment,
agreement, arrangement or restriction of any kind to which Purchaser is a party
or by which Purchaser is bound.
7
<PAGE>
(c) No Filings. Except for filings, authorizations, consents and
approvals as may be required under, and other applicable requirements of, the
HSR Act and the Exchange Act, (i) no filing with, and no permit, authorization,
consent or approval of, any state or federal public body or authority is
necessary for the execution of this Agreement by Purchaser and the consummation
by Purchaser of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by Purchaser, the consummation by
Purchaser of the transactions contemplated hereby or compliance by Purchaser
with any of the provisions hereof shall (A) conflict with or result in any
breach of the organizational documents of Purchaser, or (B) result in a
violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, loan agreement, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which Purchaser is a party or by which
Purchaser or any of its properties or assets may be bound, or violate any order,
writ, injunction, decree, judgment, statute, rule or regulation applicable to
Purchaser or any of its properties or assets.
8. Certain Covenants.
(a) No Sale. No Stockholder shall sell, transfer, assign, pledge,
hypothecate or otherwise dispose of or limit its right to vote in any manner any
of the Owned Shares which are the subject matter of this Agreement except
pursuant to the terms hereof.
(b) Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further lawful action as may
be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
9. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of New York or in any New York State court located in the
Borough of Manhattan, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto (a)
consents to submit itself (without making such submission exclusive) to the
personal jurisdiction of any federal court located in the State of New York or
any New York State
8
<PAGE>
court in the event any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement and (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court.
10. Miscellaneous.
(a) Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or delegated, in
whole or in part, by operation of law or otherwise, by any of the parties hereto
without the prior written consent of the other parties, except that Purchaser
may assign its rights and obligations, in whole or in part, to any of its
Affiliates, but no such assignment shall relieve Purchaser of its obligations
hereunder if such assignee does not perform such obligations. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
(b) Amendments. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made (i) as of the date delivered or sent by facsimile if delivered
personally or by facsimile, (ii) on the first business day following dispatch by
an internationally recognized overnight courier service to a domestic addressee,
(iii) on the third business day following dispatch by an internationally
recognized overnight courier service to a international addressee and (iv) on
the tenth business day after deposit with a national mail service, if mailed by
registered or certified mail (postage prepaid, return receipt requested), in
each case to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):
(i) if to the Company, to
Cellular Communications International, Inc.
110 East 59th Street
New York, New York 10022
Attn: Richard Lubasch, Esq.
Fax: (212) 906-8497
9
<PAGE>
with a copy to:
Skadden, Arps, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Thomas H. Kennedy, Esq.
Fax: (212) 735-2000
(ii) if to purchaser, to
Mannesmann AG
Am Wallgraben 125
D-70565 Stuttgart
Germany
Attn: Dr. Kurt J. Kinzius
Fax: 49-711-990-2201
and
Olivetti S.p.A.
Via Lorenteggio 257
20152 Milan
Italy
Attn: Marco De Benedetti
Fax: 39-2-4836-6700
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Attn: Neil Novikoff, Esq.
Fax: (212) 728-8111
(iii) if to a Stockholder, as set forth on Schedule 1 hereto.
(d) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF
LAWS THEREOF.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
(f) Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or
10
<PAGE>
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
(g) Entire Agreement; No Third-Party Beneficiaries. This Agreement,
the Option Agreement and the Merger Agreement (together with the other documents
and instruments referred to in the Option Agreement, the Merger Agreement and
the exhibits and disclosure schedules thereto) (a) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter of this
Agreement, and (b) are not intended to confer upon any person other than the
parties hereto any rights or remedies.
11
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties hereto on the date first above written.
KENSINGTON ACQUISITION SUB, INC.
By: /s/ Marco De Benedetti
-----------------------------------
Name: Marco De Benedetti
Title: Co-President and
Co-Secretary
By:
-----------------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and
Co-Secretary
CELLULAR COMMUNICATIONS
INTERNATIONAL, INC.
By:
-----------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of
Directors, President,
Chief Executive Officer
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties hereto on the date first above written.
KENSINGTON ACQUISITION SUB, INC.
By:
-----------------------------------
Name: Marco De Benedetti
Title: Co-President and
Co-Secretary
By: /s/ Kurt Kinzius
-----------------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and
Co-Secretary
CELLULAR COMMUNICATIONS
INTERNATIONAL, INC.
By:
-----------------------------------
Name:
Title:
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties hereto on the date first above written.
KENSINGTON ACQUISITION SUB, INC.
By:
-----------------------------------
Name: Marco De Benedetti
Title: Co-President and
Co-Secretary
By:
-----------------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and
Co-Secretary
CELLULAR COMMUNICATIONS
INTERNATIONAL, INC.
By: /s/ William B. Ginsberg
-----------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of
Directors, President,
Chief Executive Officer
<PAGE>
/s/ William B. Ginsberg
-----------------------------------
Name: William B. Ginsberg
-----------------------------------
Name: Richard J. Lubasch
-----------------------------------
Name: Stanton N. Williams
-----------------------------------
Name: Gregg Gorelick
-----------------------------------
Name: Del Mintz
-----------------------------------
Name: Sidney R. Knafel
-----------------------------------
Name: Alan J. Patricof
-----------------------------------
Name: Warren Potash
<PAGE>
-----------------------------------
Name: William B. Ginsberg
/s/ Richard J. Lubasch
-----------------------------------
Name: Richard J. Lubasch
-----------------------------------
Name: Stanton N. Williams
-----------------------------------
Name: Gregg Gorelick
-----------------------------------
Name: Del Mintz
-----------------------------------
Name: Sidney R. Knafel
-----------------------------------
Name: Alan J. Patricof
-----------------------------------
Name: Warren Potash
<PAGE>
-----------------------------------
Name: William B. Ginsberg
-----------------------------------
Name: Richard J. Lubasch
/s/ Stanton N. Williams
-----------------------------------
Name: Stanton N. Williams
-----------------------------------
Name: Gregg Gorelick
-----------------------------------
Name: Del Mintz
-----------------------------------
Name: Sidney R. Knafel
-----------------------------------
Name: Alan J. Patricof
-----------------------------------
Name: Warren Potash
<PAGE>
-----------------------------------
Name: William B. Ginsberg
-----------------------------------
Name: Richard J. Lubasch
-----------------------------------
Name: Stanton N. Williams
/s/ Gregg Gorelick
-----------------------------------
Name: Gregg Gorelick
-----------------------------------
Name: Del Mintz
-----------------------------------
Name: Sidney R. Knafel
-----------------------------------
Name: Alan J. Patricof
-----------------------------------
Name: Warren Potash
<PAGE>
-----------------------------------
Name: William B. Ginsberg
-----------------------------------
Name: Richard J. Lubasch
-----------------------------------
Name: Stanton N. Williams
-----------------------------------
Name: Gregg Gorelick
/s/ Del Mintz
-----------------------------------
Name: Del Mintz
-----------------------------------
Name: Sidney R. Knafel
-----------------------------------
Name: Alan J. Patricof
-----------------------------------
Name: Warren Potash
<PAGE>
-----------------------------------
Name: William B. Ginsberg
-----------------------------------
Name: Richard J. Lubasch
-----------------------------------
Name: Stanton N. Williams
-----------------------------------
Name: Gregg Gorelick
-----------------------------------
Name: Del Mintz
/s/ Sidney R. Knafel
-----------------------------------
Name: Sidney R. Knafel
-----------------------------------
Name: Alan J. Patricof
-----------------------------------
Name: Warren Potash
<PAGE>
-----------------------------------
Name: William B. Ginsberg
-----------------------------------
Name: Richard J. Lubasch
-----------------------------------
Name: Stanton N. Williams
-----------------------------------
Name: Gregg Gorelick
-----------------------------------
Name: Del Mintz
-----------------------------------
Name: Sidney R. Knafel
/s/ Alan J. Patricof
-----------------------------------
Name: Alan J. Patricof
-----------------------------------
Name: Warren Potash
<PAGE>
-----------------------------------
Name: William B. Ginsberg
-----------------------------------
Name: Richard J. Lubasch
-----------------------------------
Name: Stanton N. Williams
-----------------------------------
Name: Gregg Gorelick
-----------------------------------
Name: Del Mintz
-----------------------------------
Name: Sidney R. Knafel
-----------------------------------
Name: Alan J. Patricof
/s/ Warren Potash
-----------------------------------
Name: Warren Potash
<PAGE>
GUARANTEE
GUARANTEE, dated as of December 11, 1998, by and among Cellular
Communications International, Inc., a Delaware corporation (the "Company"), and
Olivetti S.p.A., a limited liability company organized under the laws of Italy
("Olivetti"), and Mannesmann AG, a limited liability company organized under the
laws of Germany ("Mannesmann", and together with Olivetti, the ("Guarantors").
WHEREAS, Kensington Acquisition Sub, Inc., a Delaware corporation (the
"Purchaser), is wholly-owned jointly by the Guarantors; and
WHEREAS, the Company and the Purchaser have entered into an Agreement
and Plan of Merger (the "Merger Agreement") of even date herewith; and
WHEREAS, upon the terms and subject to the conditions set forth in the
Merger Agreement, the Purchaser will make a cash tender offer (the "Offer") to
acquire all shares of the issued and outstanding common stock, $.01 par value,
of the Company (the "Company Common Stock"), including the associated Preferred
Stock Purchase Rights issued pursuant to the Rights Agreement, dated as of
December 19, 1990, between the Company and Continental Stock Transfer Trust
Company, for $65.75 per share or such higher price as may be paid in the Offer,
in each case net to the seller in cash; and
WHEREAS, as an inducement to the Company to enter into the Merger
Agreement, the Guarantors have agreed to enter into this agreement;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company and the Guarantors hereby agree as follows:
1. The Guarantors hereby unconditionally and irrevocably jointly and
severally guarantee, as primary obligors and not merely as sureties, for the
benefit of the Company the performance of the following obligations of the
Purchaser pursuant to the Merger Agreement: (i) Section 1.1(e), (ii) the last
sentence of Section 2.12(b), (iii) Section 6.9 and (iv) any liability relating
to the representations set forth in Section 3.4.
2. The Guarantors covenant that this Guarantee will not be discharged
except by complete performance of the obligations contained in this Guarantee.
This Guarantee shall not be affected by, and shall remain in full force and
effect, notwithstanding any bankruptcy, insolvency, liquidation, or
reorganization of the Purchaser or either Guarantor. This
<PAGE>
Guarantee shall not be affected by any claim, action, suit, proceeding
(including, without limitation, arbitration proceedings) or other alternative
dispute resolution proceeding or investigation that is commenced or threatened
against the Company, the Purchaser, Mannesmann, Olivetti or OliMan Holding B.V.
arising out of, or relating to, the Omnitel Agreement (as defined below) and in
connection with the execution and delivery of the Merger Agreement and the
consummation of the transactions contemplated thereby, other than any of the
foregoing brought by or on behalf of the Company.
3. The Guarantors agree to pay, on demand, and to save the Company
harmless against liability for, any and all costs and expenses (including
reasonable fees and disbursements of counsel) incurred or expended by the
Company in connection with the enforcement of or preservation of any rights
under this Guarantee.
4. Olivetti hereby represents, warrants and covenants to the Company as
follows:
a. Olivetti is a limited liability company duly organized and
validly existing under the laws of Italy. Olivetti has the necessary power and
authority to own and operate its properties and assets and to carry on its
business as currently conducted.
b. Olivetti has all requisite legal power and authority to
enter into this Guarantee. Olivetti has all requisite legal power and authority
to carry out and perform its obligations under the terms of this Guarantee. This
Guarantee constitutes the valid and binding obligation of Olivetti, enforceable
against it in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium, reorganization or other laws or equitable
principles relating to or affecting creditors' rights generally.
c. All corporate action on the part of Olivetti necessary to
authorize the execution, delivery and performance of this Guarantee has been
taken.
5. Mannesmann hereby represents, warrants and covenants to the Company
as follows:
a. Mannesmann is a limited liability company duly organized
and validly existing under the laws of Germany. Mannesmann has the necessary
power and authority to own and operate its properties and assets and to carry on
its business as currently conducted.
b. Mannesmann has all requisite legal power and authority to
enter into this Guarantee. Mannesmann has all requisite legal power and
authority to carry out and perform its obligations under the terms of this
Guarantee. This Guarantee
2
<PAGE>
constitutes the valid and binding obligation of Mannesmann, enforceable against
it in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium, reorganization or other laws or equitable
principles relating to or affecting creditors' rights generally.
c. All corporate action on the part of Mannesmann necessary to
authorize the execution, delivery and performance of this Guarantee has been
taken.
6. Each Guarantor hereby represents and warrants to the Company that to
such Guarantor's knowledge, the execution and delivery of this Guarantee by such
Guarantor do not, and the performance of this Guarantee by such Guarantor and
the consummation of the transactions contemplated by the Merger Agreement will
not result in a breach of or constitute a default under (with or without due
notice of lapse of time or both) any contract or instrument to which the
Guarantor or OliMan Holding, B.V. is a party (including the Joint Venture
Agreement (the "Omnitel Agreement"), dated as of May 3, 1990, among Ing. C.
Olivetti & C., S.p.A., Bell Atlantic International, Inc., CCI Partnership, Inc.,
Shearson Lehman Hutton Eurocell Italy, Inc., and Swedish Telecom International
AB, as amended November 24, 1993 and February 23, 1994) as is or could
reasonably be expected to be materially adverse to the ability of such Guarantor
to perform its obligations under this Guarantee or to the consummation of the
transactions contemplated by the Merger Agreement. For purposes of this
Guarantee, "to such Guarantor's knowledge" shall be limited to the knowledge of
a current director or officer of such Guarantor.
7. Each Guarantor agrees that any legal suit, action or proceeding
brought by the Company with respect to the transactions contemplated by the
Merger Agreement may be instituted in any state or federal court in The City of
New York, State of New York, waives to the fullest extent permitted by law any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding and irrevocably submits to the non-exclusive
jurisdiction of any such court in any such suit, action or proceeding. Nothing
in this paragraph shall affect the right of a Guarantor, the Purchaser or any of
their respective affiliates to serve process in any manner permitted by law or
limit the right of a Guarantor, the Purchaser or any of their respective
affiliates to bring proceedings against the Company in the courts of any
jurisdiction or jurisdictions.
8. This Guarantee shall be deemed to be a contract under the laws of
the State of New York and shall for all purposes be governed by and construed in
accordance with the laws of such State.
9. This Guarantee shall terminate and be of no further force or effect
upon the consummation of the purchase by
3
<PAGE>
the Purchaser or any of its affiliates of any Shares pursuant to the Offer.
4
<PAGE>
IN WITNESS WHEREOF, each of the Company and each Guarantor have caused
this Guarantee to be executed on its behalf by its officers thereunto duly
authorized, all as on the date first above written.
CELLULAR COMMUNICATIONS
INTERNATIONAL, INC.
By: /s/ William Ginsberg
-----------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board
of Directors, President
Chief Executive Officer
MANNESMANN AG
By: /s/ K. Kinzius
-----------------------------------
Name: Dr. Kurt Kinzius
Title:
OLIVETTI S.p.A.
By: /s/ Roberto Colaninno
-----------------------------------
Name: Roberto Colaninno
Title: Chief Executive Officer
By: /s/ Antonio Tesone
-----------------------------------
Name: Antonio Tesone
Title: Chairman
<PAGE>
Exhibit 99.2
SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock, as of April 10, 1998, after giving
retroactive effect to the 3-for-2 stock split by way of stock dividend, paid
on April 14, 1998, by (i) each executive officer and director of the Company,
(ii) all directors and executive officers as a group (iii) stockholders
holding 5% or more of the Company's Common Stock.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
----------------------------------------------------
Presently
Company Exercisable
Executive Officers, Directors and Principal Stockholders Stock Options(1) Total Percent(2)
- -------------------------------------------------------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C>
William B. Ginsberg..................................... 359,746 656,673 1,016,419 5.92%
J. Barclay Knapp........................................ 139,734 282,028 421,762 2.51
Richard J. Lubasch(4)................................... 43,124 111,784 154,908 *
Stanton N. Williams..................................... 36,450 111,000 147,450 *
Gregg Gorelick.......................................... 2,406 58,252 60,658 *
Del Mintz(5)............................................ 369,674 52,782 422,456 2.55
Sidney R. Knafel(6)..................................... 258,151 52,782 310,933 1.88
Alan J. Patriocof(7).................................... 19,395 52,782 72,177 *
Warren Potash........................................... 94 52,782 52,876 *
All directors and officers as a group (9 in number)..... 1,228,774 1,430,865 2,659,639 14.82
Massachusetts Principal Services Company(8)............. 1,871,113 ** ** 11.33
500 Boylston Street
Boston, MA 02116
HBK Investments L.P.(9)................................. 1,057,800 ** ** 6.41
HBK Finance L.P.(10)
777 Main Street, Suite 2750
Fort Worth, TX 76102
President and Fellows of Harvard College(10)............ 905,325 ** ** 5.48
600 Atlantic Avenue
Boston, MA 02210
T. Rowe Price Associates, Inc.(11)...................... 855,300 ** ** 5.18
100 E. Pratt Street
Baltimore, MD 21202
</TABLE>
- ------------------------
* Represents less than one percent.
(1) Includes shares of Common Stock purchasable upon the exercise of options
which are exercisable or become so in the next 60 days ("Presently
Exercisable Options").
(2) Includes Common Stock and Presently Exercisable Options.
(3) Includes 21,750 shares of Common Stock owned by Mr. Ginsberg's wife, as
to which shares Mr. Ginsberg disclaims beneficial ownership.
(4) Includes 187 shares of Common Stock owned by Mr. Lubasch as custodian for
his child, as to which shares Mr. Lubasch disclaims beneficial ownership.
(5) Includes 20,740 shares of Common Stock owned by Mr. Mintz's children or
by
<PAGE>
Mr. Mintz's children as trustees for their children, 43 shares owned by
Mr. Mintz's wife and 22,876 shares which were purchased by CBDM, Inc., a
subchapter "S" Corporation that is owned by the children and grandchildren
of Mr. Mintz. Mr. Mintz acts in an advisory capacity to the shareholders of
CBDM, Inc. Mr. Mintz disclaims beneficial ownership of all of the shares
referenced in this note.
(6) Includes 80,311 shares of Common Stock owned by a trust account for the
benefit of a child of Mr. Knafel, as to which shares Mr. Knafel disclaims
beneficial ownership. An additional 80,311 shares are owned by an adult
child of Mr. Knafel, as to which shares Mr. Knafel disclaims beneficial
ownership.
(footnotes continued on following page)
2
<PAGE>
(7) Includes 117 shares of Common Stock owned by Mr. Patricof's wife, 454
shares owned by, or in trust for the benefit of, Mr. Petricof's
children as to which Mr. Patricof disclaims beneficial ownership.
(8) Based solely upon a Form 13-G, Amendment No. 2, dated February 13,
1998, filed by Massachusetts Financial Services Company.
(9) Based solely upon a Form 13-D, dated March 2, 1998, filed by HBK
Investments L.P. and HBK Finance L.P.
(10) Based solely upon a Form 13-G, dated February 12, 1998, filed by
President and Fellows of Harvard College.
(11) Based solely upon a Form 13-G, dated February 12, 1998, filed by T.
Rowe Price Associates, Inc.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires that the Company's directors and executive officers,
and persons who own more than ten percent of a registered class of the Company's
equity securities file with the SEC, and with each exchange on which the Common
Stock trades, initial reports of ownership and reports of changes in ownership
of Common Stock and other equity securities of the Company. Officers, directors
and greater than ten percent shareholders are required by the SEC's regulations
to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no
other reports were required during the fiscal year ended December 31, 1997,
all Section 16(a) filing requirements applicable to its officers, directors
and greater than ten percent beneficial owners were complied with.
ELECTION OF DIRECTORS
(ITEM 1)
ELECTION OF DIRECTORS
Pursuant to the Company's Restated Certificate of Incorporation,
which provides for a classified Board of Directors, the Board of Directors
consists of three classes of directors with overlapping three year terms. One
class of directors is to be elected each year with terms expiring on the
third succeeding annual meeting after such election. The terms of two
directors expire this year. Accordingly, at the meeting, two directors will
be elected to serve for a three year term and until their successors shall
have been elected and qualified. Unless otherwise indicated on any proxy, the
proxy holders intend to vote the shares it represents for the nominees whose
biographical sketches appear in the section immediately following. Both of
the nominees are now serving as directors of the Company and were previously
elected by the Company's stockholders. As the result of the resignations of
one director in each of April 1994 and June 1997, there are two vacancies on
the Board of Directors, and there is no intention to fill these vacancies at
this time.
The election to the Board of Directors of each of the nominees
identified in this Proxy Statement will require the affirmative vote of the
holders of a plurality of the shares of Common Stock present in person or
represented by proxy at the annual meeting and entitled to vote. In tabulating
the vote, abstentions and broker non-votes will be disregarded and have no
effect on the outcome of the vote.
3
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
ELECTION TO THE BOARD OF DIRECTORS OF EACH OF THE NOMINEES IDENTIFIED FOR
REELECTION.
The votes applicable to the shares represented by proxies in the
accompanying form will be cast in favor of the two nominees below. While it is
not anticipated that any of the nominees will be unable to serve, if any should
be usable to serve, the proxy holders reserve the right to substitute any other
person.
The nominees and continuing directors of the Company were elected by
the Company's stockholders in 1995, 1996, and 1997, as applicable. The
continuing directors will serve for the terms indicated and until their
successors are duly elected and qualified.
PRESENT DIRECTORS WHO ARE NOMINEES FOR REELECTION
<TABLE>
<CAPTION>
POSITION
NAME AGE (PROPOSED TERM AS DIRECTOR)
- ---- --- ---------------------------
<S> <C> <C>
Sidney R. Knafel ............................. 67 Director (2001)
Del Mintz .................................... 70 Director (2001)
</TABLE>
CONTINUING DIRECTORS WHOSE TERMS ARE NOT EXPIRING
<TABLE>
<CAPTION>
POSITION
NAME AGE TERM AS DIRECTOR
- ---- --- ----------------
<S> <C> <C>
William H. Ginsberg ......................... 54 Director, President and Chief
Executive officer (1999)
J. Barclay Knapp ............................ 41 Director, Executive Vice President,
and Chief Operating Officer (1999)
Alan J. Patricof ............................ 63 Director (2000)
Warren Potash ............................... 66 Director (2000)
</TABLE>
Additional information as of April 14, 1998 regarding the two nominees
for election as directors and the continuing directors and information regarding
executive officers of the Company is as follows:
NOMINEES
Sidney R. Knafel, a director from and prior to the July 1991
distribution by Cellular Communications, Inc. ("CCI") to its stockholders of the
Common Stock of the Company (the "Distribution"), has been Managing Partner of
SRK Management Company, a private investment concern, since 1981. In addition,
Mr. Knafel is Chairman of Insight Communications, Inc. And BioReliance
Corporation. Mr. Knafel is also a director of General American Investors
Company, Inc., IGENE Biotechnology, Inc., NTL Incorporated ("NTL"), CoreComm
Incorporated ("CoreComm") and some privately owned companies.
Del Mintz, a director of the Company from and prior to the
Distribution, is President of Cleveland Mobile TeleTrak, Inc. and Cleveland
Mobile Radio Sales, Inc. and Ohio Mobile TeleTrak, Inc., companies providing
telephone answering and radio communications services to Cleveland and
Columbus, respectively. Mr. Mintz has held similar positions with the
predecessors of these companies since 1967. Mr. Mintz is President of several
other companies, and was President and a principal stockholder of Cleveland
Mobile Cellular Telephone, Inc. before such company was acquired by merger
with CCI's predecessor in 1985. Mr. Mintz is also a director of NTL, CoreComm
and several privately owned companies.
CONTINUING DIRECTORS
William B. Ginsberg, has been President, Chief Executive Officer and
a director of the Company from and prior to the Distribution. In April 1994,
Mr. Ginsberg was appointed as Chairman of the Company. Mr. Ginsberg had also
been President, Chief Executive Officer and a director of CCI since its
founding in 1981 until its merger in 1996 into a subsidiary of AirTouch
Communications Inc. (the "CCI Merger").
4
<PAGE>
J. Barclay Knapp, has been Executive vice President, Chief Operating
Officer and a director of the Company form and prior to the Distribution. Mr.
Knapp was also Chief Financial Officer of the company until March 1995. Mr.
Knapp was a director and Executive Vice President, Chief Operating Officer
and Chief Financial Officer of CCI until the OCI Merger. In addition, Mr.
Knapp is a director, President, Chief Financial Officer and Chief Executive
Officer of NTL and a director, President and Chief Executive Officer of
CoreComm.
Alan J. Patricof, a director from and prior to the Distribution, is
Chairman of Patricof & Co. Ventures, Inc., a venture capital firm he founded in
1969. Mr. Patricof Also serves as a director of NTL, CoreComm and other
privately owned companies.
Warren Potash, has been a director form and prior to the Distribution.
Mr. Potash retired in 1991 as President and Chief Executive Officer of the
Radio Advertising Bureau, a trade association, a position held since 1989.
Prior to that time and beginning in 1986, he was President of New Age
Communications, Inc., a communications consultancy firm. Until his retirement
in 1986, Mr. Potash was a Vice President of Capital Cities/ABC Broadcasting,
Inc., a position he held since 1970. Mr. Potash is also a director of NTL and
CoreComm.
EXECUTIVE OFFICERS OTHER THAT DIRECTORS
Richard J. Lubasch, 51, has been the Company's Vice President-General
Counsel and Secretary from and prior to the Distribution. In April 1994, Mr.
Lubasch was appointed Senior Vice President and Treasurer of the Company. Mr.
Labasch was Vice President-General Counsel and Secretary of OCI from July 1987
until the CCI Merger. Mr. Lubasch is Senior Vice President-General Counsel and
Secretary of NTL and CoreComm.
Gregg Gorelick, 39, has been the Company's Vice President-Controller from
and prior to the Distribution. From 1981 to 1986 he was employed by Ernst &
Whinney (now known as Ernst & Young LLP). Mr. Gorelick is a certified public
accountant and was Vice President-Controller of CCI from 1986 until the CCI
Merger. Mr. Gorelick holds that position at NTL and CoreComm.
Stanton N. Williams, 36, has been the Company's Vice President and Chief
Financial Officer since March 1995. He had been the Director of Corporate
Development for the Company from and prior to the Distribution, a title he
currently holds at NTL and held a CCI, until the CCI Merges, and at CoreComm
until he was appointed Vice-President-Chief Financial Offices in 1997. Prior to
joining CCI in 1989, Mr. Williams was employed by Arthur Andersen & Co's
consulting division.
Executive officers of the Company are elected annually by the Board of
Directors and serve until their successors are duly elected and qualified.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
During calendar 1997, seven meetings (including regularly scheduled
and special meetings) of the Board of Directors were held. Messrs. Knafel
and Mintz serve as members of the Board of Director's compensation and
option committee and Messrs. Mintz, Patricof and Potash serve as members of
the Board of Director's audit committee. The compensation and option
committee reviews and makes recommendations regarding annual compensation
for Company officers and the audit committee oversees the Company's
financial reporting process on behalf of the Company's Board of Directors.
During calendar 1997, the compensation and option committee held two
meetings and the audit committee held one meeting. No director during
calendar 1997 attended fewer than 88% of the meetings of the Board of
Directors and committee meetings of which he was a member. There are no
other committees of the Board of Directors. Directors are reimbursed for
out-of-pocket expenses incurred in attending meetings of the Board of
Directors and the committees. In addition, as of December 31, 1997, Messrs.
Knafel, Mintz. Patricof and Potash have each been granted options to
purchase an aggregate of 66,282 shares of Common Stock at a weighted
average price of $12.20 per share, after giving retroactive effect to the
3-for-2 stock split by way of stock dividend, paid on April 14, 1998,
Directors are paid fee of $250 for each Board Meeting and committee meeting
that they attend.
5
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
POLICY
The Compensation and Option Committee of the Board of Directors (the
"Committee") has the responsibility for the design and implementations of the
Company's executive compensation program. The Committee is composed entirely
of independent non-employee directors.
The Company's executive compensation program is designed to be closely
linked to corporate performance and return to shareholders. To this end, the
Company has developed an overall compensation strategy and specific
compensation plans that tie a very significant portion of an executive's
aggregate compensation to the appreciation in the Company's stock price. In
addition, executive bonuses are linked to the achievement of operational
goals and therefore relate to shareholders return. The overall objective of
this strategy is to attract and retain the best possible executive talent, to
motivate these executives to achieve the goals inherent in the Company's
business strategy and to link executive and shareholder interests through
equity-based compensation, thereby seeking to enhance the Company's
profitability and shareholder value.
The Committee also recognizes that for Messrs. Ginsberg, Knapp, Lubesch,
Williams and Gorelick, the cash portion of their compensation is small in
light of their compensation from NTL (which is reimbursed to NTL by the
Company based on a reasonable estimate of the time these executives spent on
Company activity in the relevant period). The Committee believes that for
such executives stock-based compensation becomes even more significant.
Each year the Committee conducts a review of the Company's executive
compensation program to determine the appropriate level and forms of
compensation. Such review permits an annual evaluation of the link between
the Company's performance and its executive compensation.
In assessing compensation levels for the named executives, the Committee
recognizes the fact that such executives have participated in the development
of the Company (and its predecessors) from its earliest stages, and have
produced consistent significant long-term value for stockholders of the
Company (and its predecessors) over such period. In determining the annual
compensation for the Chief Executive Officer, the committee uses the same
criteria as it does for the other named executives.
BASE SALARY AND BONUS
In furtherance of the Company's incentive-oriented compensation goals
set forth above, cash compensation (annual base salary and bonus) is
generally set below levels paid by comparable sized telecommunications
companies and is supplemented by equity-based option grants. With respect to
1997, the annual salary for each of the named executive officers remained the
same as in 1996. In 1997, Messrs. Ginsberg, Lubasch, Williams and Gorelick
received bonuses of $120,000, $40,000, $40,000 and $10,000, respectively.
This level of emphasis on bonus reflects the Committee's view that meaningful
percentage of compensation should be performance based and the Committee
intends to continue to determine bonuses in this light.
STOCK OPTIONS
Under the Company's stock option plan, stock options were granted to
certain Company executive officer during 1997. Information with respect to
such option grants to the named executives is set forth in the "Option Grants
Table."
Stock options are designed to align the interest of executives with
those of the stockholders. The options generally are granted at an exercise
price equal to the market price of the Common Stock on the date of grand and
vest over a period of five years. Accordingly, the executives are provided
additional incentive to create shareholders value over the long term since the
full benefits of the options cannot be realized unless stock price
appreciation occurs over a number of years.
6
<PAGE>
In determinging individual option grants, the Committee takes into
considerations the number of options previously granted to that individual,
the amount of time and effort dedicated to the Company during the preceding
year and expected commitment to the Company on a forward-looking basis. The
Committee also strives to provide each option recipient with an appropriate
incentive to increase shareholder value, taking into consideration their cash
compensation levels.
In 1995, 1996 and 1997, after giving retroactive effect to the 3-for-2
stock split by way of stock dividend, paid on April 14, 1998, Mr. Ginsberg
received options to purchase 112,500 shares of Common Stock at an exercise
price of $27.83, 75,000 shares of Common Stock at an exercise price of $22.17
and 90,000 shares of Common Stock at an exercise price of $18.67,
respectively, (the fair market value of the Common Stock on the dates of
grant). Mr. Ginsberg now owns 359,746 shares of the Company's Common Stock
and holds options to purchase an additional 763,173 shares. The Committee
believes that the equity interest in the Company held by the named executive
officers, including Mr. Ginsberg, represents a significant incentive to
increase overall shareholder value.
COMPENSATION DEDUCTION CAP POLICY
In 1994, the Company's stockholders approved an amendment to the
Company's stock option plan, among other things, bring the plan into
compliance with the rules regarding non-deductibility of compensation in
excess of $1 million under sec. 162(m) of the Internal Revenue Code of 1986,
as amended (the "Code"). Any compensation realized from the exercise of such
stock options granted at fair market value as of the date of grant thus would
generally be exempt from the deduction limitations under sec.162(m) of the
Code. Other annual compensation, such as salary and bonus, is not expected to
exceed $1 million per exeuctive.
THE COMPENSATION AND OPTION COMMITTEE
Sidney R. Knafel
Del Mintz
7
<PAGE>
GENERAL
The following table discloses compensation received by the Company's
Chief Executive Officer and the four other most highly paid executive
officers for the three years ended December 31, 1997.
SUMMARY COMPENSATION TABLE*
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION COMMON ALL
-------------------------------- STOCK OTHER
SALARY BONUS UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS($)(1) ($)
--------------------------- ---- ------- ------- ---------------- -------------
<S> <C> <C> <C> <C> <C>
William B. Ginsberg.................................. 1997 18,000 120,000 90,000 --
Chairman, President and 1996 18,000 130,000 75,000 --
Chief Executive Officer 1995 18,000 100,000 112,500 --
J. Barclay Knapp..................................... 1997 18,000 -- -- --
Executive Vice President and 1996 18,000 -- -- --
Chief Operating Officer 1995 18,000 -- 7,500 --
Richard J. Lubasch................................... 1997 12,000 40,000 30,000 --
Senior Vice President..General 1996 12,000 50,000 22,500 --
Counsel, Treasurer and Secretary 1995 12,000 55,000 22,500 --
Stanton N. Williams(2)............................... 1997 12,000 40,000 30,000 --
Vice President 1996 12,000 50,000 30,500 --
Chief Financial Officer............................ 1995 12,000 55,000 45,000 --
Gregg Gorelick....................................... 1997 9,000 10,000 7,500 --
Vice President -- Controller 1996 9,000 20,000 7,500 --
1995 9,000 25,000 3,750 --
</TABLE>
- --------------------------------------------
* OCI provided management, financial, legal and technical services to the
Company until the OCI Merger. Amounts charged to the Company by OCI
consisted of salaries and indirect costs allocated to the Company. For
the years ended December 31, 1996 and 1995, OCI charged the Company
$232,000 and $896,000, respectively. In August 1996, upon the OCI Merger,
NTL commenced providing management, financial, legal and technical
services to the Company. Amounts charged to the Company consist of
salaries and indirect costs allocated to the Company. In 1997 and 1996,
NTL charged the Company $871,000 and $351,000, respectively. It is not
practicable to determine the amounts of these expenses that would have
been incurred had the Company operated as an unaffiliated entity.
However, in the opinion of management of the Company, the allocation
method is reasonable. The named executives had received salaries from OCI
and now receive salaries from NTL and spend portions of their time
providing executive management to the Company.
(1) After giving retroactive effect to the 3-for-2 stock split by way of
stock dividend, paid on April 14, 1998.
(2) Mr. Williams was appointed Vice President and Chief Financial Officer in
March 1995.
8
<PAGE>
OPTION GRANTS TABLE
The following table provides information on stock option grants during
1997 to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATE OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM(2)
OPTIONS EMPLOYEES OR BASE ------------------------
GRANTED IN FISCAL PRICE EXPIRATION 5%($) 10%($)
(#)(1) YEAR ($/SHARE) DATE $30.41 $48.42
---------- ----------- --------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
William B. Ginsberg ............... 90,000 53.10% 18.67 03/10/07 1,056,600 2,677,800
J. Barclay Knapp .................. -- -- -- -- -- --
Richard J. Lubasch ................ 30,000 17.70 18.67 03/10/07 352,200 892,600
Stanton N. Williams ............... 30,000 17.70 18.67 03/10/07 352,200 892,600
Gregg Gorelick .................... 7,500 4.42 18.67 03/10/07 88,050 223,150
</TABLE>
- -------------
(1) All options were granted on March 11, 1997 at an exercise price equal to
the closing price of the Common Stock on The Nasdaq Stock Market's
National Market ("NNM") on such date after giving retroactive effect to
the 3-for-2 stock split by way of stock dividend, paid on April 14, 1998;
20% were exercisable upon issuance, 20% became exercisable on January 1,
1998 and an additional 20% will become exercisable on each of January 1,
1999, 2000 and 2001. Upon a change of control of the Company all
unvested options become fully vested and exercisable.
(2) The amounts shown in these columns are the potential realizable value of
options granted at assumed rates of stock price appreciation (5% and 10%)
specified by the SEC, and have not been discounted to reflect the present
value of such amounts. The assumed rates of stock price appreciation are
not intended to forecast the future appreciation of the Common Stock.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table provides information on stock option exercises
during 1997 by the named executive officers and the value at December 31,
1997 of unexercised in-the-money options held by each of the named executive
officers after giving retroactive effect to the 3-for-2 stock split by way of
stock dividend, paid on April 14, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR-END AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION> NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED IN-THE-
SHARES UNEXERCISED OPTIONS MONEY OPTIONS AT
ACQUIRED ON AT FY-END (#) FY-END ($)*
EXERCISE VALUE EXERCISABLE(E)/ EXERCISABLE(E)/
NAME (#) REALIZED ($) UNEXERCISABLE(U) UNEXERCISABLE(U)
---- ----------- ------------ -------------------- --------------------
<S> <C> <C> <C> <C>
William B. Ginsberg .......... -- -- 567,423(E) 12,867,447(E)
195,750(U) 2,116,950(U)
J. Barclay Knapp ............. -- -- 264,779(E) 7,239,230(E)
18,750(U) 318,910(U)
Richard J. Lubasch ........... -- -- 94,535(E) 2,083,872(E)
48,750(U) 495,630(U)
Stanton N. Williams .......... 34,877 569,958 81,000(E) 979,080(E)
69,000(U) 698,520(U)
Gregg Gorelick ............... 2,250 33,818 53,378(E) 1,454,066(E)
13,125(U) 142,565(U)
</TABLE>
- --------------
* Based on the closing price on the NNM on December 31, 1997 of $31.17, after
giving retroactive effect to the 3-for-2 stock split by way of stock dividend,
paid on April 14, 1998.
9
<PAGE>
PERFORMANCE GRAPH
The following graph sets forth the Company's cumulative shareholder return
from December 31, 1992 through December 31, 1997 as well as The Nasdaq Stock
Market (U.S.) Index and the Center for Research in Security Prices ("CRSP")
Index of Nasdaq Telecommunications Stocks during such time period.
<TABLE>
<CAPTION>
'Cellular NASDAQ NASDAQ Stock
Measurement Period Communications Telecommunications Market (U.S.)
(Fiscal Year Covered) International, Inc.' Stocks Index
<S> <C> <C> <C>
12/31/92 100.00 100.00 100.00
12/31/93 344.58 154.19 114.80
12/30/94 1033.75 128.69 112.21
12/29/95 1015.92 168.51 158.70
12/31/96 689.16 172.29 195.19
12/31/97 1110.98 254.48 239.53
</TABLE>
- -------------
Note: Stock price performance shown above for the Common Stock is historical and
not necessarily indicative of future price performance.
10
<PAGE>
Exhibit 99.3
December 1, 1998
Mannesmann AG
Olivetti S.p.A.
c/o Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York
Attention: Steven A. Seidman
PRIVILEGED AND CONFIDENTIAL
Gentlemen:
In connection with your consideration of a possible
transaction with Cellular Communications of International, Inc. (the "Company"),
you have requested information concerning the Company. As a condition to your
being furnished such information, you agree to treat any information concerning
the Company (whether prepared by the Company, its advisors or otherwise) which
is furnished to you by or on behalf of the Company (herein collectively referred
to as the "Evaluation Material") in accordance with the provisions of this
letter and to take or abstain from taking certain other actions herein set
forth. The term "Evaluation Material" does not include information which (i) is
already in your possession, provided that such information is not known by you
to be subject to another confidentiality agreement with or other obligation of
secrecy to the Company or another party, or (ii) becomes generally available to
the public other than as a result of a disclosure by you or your directors,
officers, employees, agents or advisors, or (iii) becomes available to you on a
non-confidential basis from a source other than the Company or its advisors,
provided that such source is not known by you to be bound by a confidentiality
agreement with or other obligation of secrecy to the Company or another party.
You hereby agree that the Evaluation Material will be used
solely for the purpose of evaluating a possible transaction between the Company
and you, and that such information will be kept confidential by you and your
advisors; provided, however, that (i) any of such information may be disclosed
to your directors,
<PAGE>
December 1, 1998
Page 2
officers, employees, affiliates, agents, counsel, accountants, advisors or
representatives ("Representatives"), to the extent necessary to permit such
Representatives to assist you in evaluating a possible transaction between the
Company and you, provided, however, that you shall require each such
Representative to be bound by the terms of this Agreement to the same extent as
if they were parties hereto, and (ii) disclosure of such information may be made
to which the Company consents in writing. You shall be responsible for any
breach of this letter agreement by you or any of your Representatives.
In the event that you or anyone to whom you transmit any
Evaluation Material are requested or required to disclose any Evaluation
Material by legal process or in connection with any legal proceedings, you agree
that you will provide prompt written notice of such request or requirement to
the Company so that the Company may take whatever steps it deems appropriate
concerning disclosure of this information, including requesting entry of
appropriate protective orders and/or waiving compliance with the provisions of
this agreement. In the event that no such protective order or other remedy is
obtained, or that the Company waives compliance with the terms of this
agreement, you and your advisors will furnish only that portion of the
information which, upon advice of counsel, is required to be provided and will
exercise your best efforts, at the Company's expense, to obtain reliable
assurance that the Evaluation Material will be afforded confidential treatment.
In addition, without the prior written consent of the Company,
you will not, and will direct such directors, officers, employees and
representatives not to, disclose to any person either the fact that discussions
or negotiations are taking place concerning a possible transaction between the
Company and you or any of the terms, conditions or other facts with respect to
any such possible transaction, including the status thereof.
Although the Company has endeavored to include in the
Evaluation Material information known to it which it believes to be relevant for
the purpose of your investigation, you understand that neither the Company nor
any of its representatives or advisors have made or make any representation or
warranty as to the accuracy or completeness of the Evaluation Material. You
agree that neither the Company nor its representatives or advisors shall have
any liability to you or any of your representatives or advisors resulting from
the use of the Evaluation Material.
<PAGE>
December 1, 1998
Page 3
You agree that, for a period of one year from the date of this
letter, you and your affiliates will not solicit for employment any employee of
the Company with whom you have had contact or who became known to you or your
affiliates in connection with your consideration of the transaction; provided,
however, that the foregoing provision will not prevent you or your affiliates
from employing any such person who contacts you on his or her own initiative or
in response to a general advertisement without any personal solicitation by or
encouragement from you.
In the event that you do not proceed with the transaction
which is the subject of this letter within a reasonable time, you shall promptly
redeliver to the Company all written Evaluation Material and any other written
material containing or reflecting any information in the Evaluation Material
(whether prepared by the Company, its advisors or otherwise) and will not retain
any copies, extracts or other reproductions in whole or in part of such written
material or any electronic or digital media incorporating such material
("Electronic Media"). All documents, memoranda, notes and other writings
whatsoever or any electronic media prepared by you or your advisors based on the
information in the Evaluation Material shall be destroyed or completely removed
from your computer systems and such destruction or removal shall be certified in
writing to the Company by an authorized officer supervising such destruction.
You agree that unless and until a definitive agreement between
the Company and you with respect to any transaction referred to in the first
paragraph of this letter has been executed and delivered, neither the Company
nor you will be under any legal obligation of any kind whatsoever with respect
to such a transaction by virtue of this or any written or oral expression with
respect to such a transaction by any of its directors, officers, employees,
agents or any other representatives or its advisors or representatives thereof
except, in the case of this letter, for the matters specifically agreed to
herein. The agreement set forth in this paragraph may be modified or waived only
by a separate writing by the Company and you expressly so modifying or waiving
such agreement.
<PAGE>
December 1, 1998
Page 4
This letter shall be governed by, and construed in accordance
with, the laws of the State of New York.
Very truly yours,
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
By:
--------------------------------
Name: Jeffrey G. Wyman
Title: Assistant General Counsel
Accepted and Agreed to:
Mannesmann AG
By:
--------------------------------
Date:
Olivetti S.p.A.
By:
--------------------------------
Date:
<PAGE>
Exhibit 99.4
December 4, 1998
Cellular Communications International, Inc.
110 East 59th Street
New York, NY 10022
Attention: Mr. William Ginsberg, Chairman, President and CEO
Dear Bill:
This letter confirms our understanding that Cellular Communications
International, Inc. (the "Company") has engaged Wasserstein Perella & Co., Inc.
("WP&Co.") as its financial advisor with respect to a possible merger,
consolidation or business combination with, or sale of the Company or a
significant portion of its equity securities, assets or businesses (a
"Transaction") to OliMan Holding B.V., a joint venture currently owned by
Olivetti S.p.A. and by Mannesmann AG ("OliMan") or an entity formed by or at the
direction of OliMan. If appropriate in connection with performing its services
for the Company hereunder, WP&Co. may utilize the services of one or more of its
affiliates, including Wasserstein Perella Securities, Inc., in which case
references herein to WP&Co. shall include such affiliates.
1. WP&Co., in its capacity as financial advisor to the Company, will
perform the following financial advisory services:
(A) Study and evaluate the Company and its business prospects.
(B) Identify and analyze the financial alternatives available to
the Company.
(C) Develop the strategy and tactics to be used in evaluating
these alternatives in the market.
<PAGE>
(D) Provide analysis and advice in connection with a Transaction.
(E) As directed by the Company, assist in the negotiation of a
definitive agreement with OliMan.
(F) If requested by the Company, WP&Co. will provide, in
accordance with its customary practice, an opinion (the
"Opinion") to the Board of Directors of the Company, with
respect to the adequacy or fairness, from a financial point of
view, of the consideration to be received in a Transaction, it
being understood that the Opinion shall be in such form as
WP&Co. shall determine and WP&Co. may qualify the Opinion in
such manner as WP&Co. believes appropriate. The Opinion shall
not address the Company's underlying business decision to
effect a Transaction. Notwithstanding anything to the contrary
contained elsewhere herein, the Company may reproduce the
Opinion in full in any filings required to be made by the
Company with the Securities and Exchange Commission pursuant
to the Securities Act of 1933 or the Securities Exchange Act
of 1934 in connection with the Transaction and in materials
delivered to the stockholders of the Company which are part of
such filings (the "Statement"). In such event, the Company may
include references to the Opinion and to WP&Co. (in each case
in such form as WP&Co. shall approve) in the Statement.
(G) Provide such other financial advisory services as may from
time to time be specifically agreed upon in writing by WP&Co.
and the Company.
In rendering its services to the Company hereunder, WP&Co. is not
assuming any responsibility for the Company's underlying business decision to
effect any Transaction.
The Company shall make available to WP&Co. all information concerning
the business, assets, operations and financial condition of the Company that
WP&Co. reasonably requests in connection with the services to be performed for
the Company hereunder, and shall provide WP&Co. with reasonable access to the
Company's officers, directors, employees, independent accountants and other
advisors and agents as WP&Co. shall deem appropriate. The Company represents
that all information
<PAGE>
furnished by it or on its behalf to WP&Co. will be accurate and complete in all
material respects.
2. WP&Co.'s compensation for services rendered under this engagement
will include the following cash fees:
(A) A fee of $2.0 million, which fee shall be paid promptly
following the earlier to occur of: (i) if the Company shall
have requested that WP&Co. provide an Opinion, the date upon
which WP&Co. advises the Company that it is prepared to render
the Opinion, and (ii) execution of an agreement in principle
or a definitive agreement to effect a Transaction. This amount
will be credited against any transaction fee payable to WP&Co.
pursuant to subparagraph 2(B) below.
(B) In connection with any Transaction, a transaction fee equal to
$8.0 million. Compensation, if any, which is payable to WP&Co.
pursuant to this subparagraph 2(B) shall be contingent upon
the consummation of the Transaction and paid by the Company on
the closing date thereof; it being understood and agreed that
if more than 50% of the outstanding voting securities of the
Company on a fully diluted basis are acquired (the "First
Step") and the Acquiror (as hereinafter defined) proposes to
acquire any additional voting securities or assets or
businesses of the Company in a subsequent transaction, the
Transaction shall be deemed to have been consummated and the
closing date to have occurred upon consummation of the First
Step.
(C) In the event that WP&Co. agrees to provide additional services
to the Company (other than the services specifically described
above), then the Company shall pay additional fees to WP&Co.
in such amounts as shall be customary given the nature of the
services provided, and such services shall be provided upon
such other terms as the Company and WP&Co. shall mutually
agree in writing.
(D) In addition to any fees payable by the Company to WP&Co.
hereunder, the Company shall, whether or not a Transaction
shall be proposed or consummated, reimburse WP&Co. on a
monthly basis for its travel and other reasonable
out-of-pocket expenses (including all fees, disbursements and
other charges of counsel to be retained by WP&Co., and of
other consultants and advisors retained by WP&Co.
<PAGE>
with the Company's consent) incurred in connection with, or
arising out of WP&Co.'s activities under or contemplated by,
this engagement. The Company shall also reimburse WP&Co., at
such times as WP&Co. shall request, for any sales, use or
similar taxes (including additions to such taxes, if any)
arising in connection with any matter referred to or
contemplated by this engagement. Such reimbursements shall be
made promptly upon submission by WP&Co. of statements
therefor.
3. The Company recognizes and confirms that, in advising the Company
and in completing its engagement hereunder, WP&Co. will be using and relying on
publicly available information and on data, material, and other information
furnished to WP&Co. by the Company and other parties. It is understood that in
performing under this engagement WP&Co. may assume and rely upon the accuracy
and completeness of, and is not assuming any responsibility for independent
verification of, such publicly available information and the other information
so furnished.
4. The Company and WP&Co. have entered into a separate letter
agreement, dated the date hereof and attached hereto, providing for
indemnification by the Company of WP&Co. and certain related persons. Such
indemnification agreement is an integral part of this agreement and the terms
thereof are incorporated by reference herein. As stated therein, such
indemnification agreement shall survive any termination or completion of
WP&Co.'s engagement hereunder.
5. WP&Co. has been retained under this agreement as an independent
contractor with no fiduciary or agency relationship to the Company or to any
other party. The advice (oral or written) rendered by WP&Co. pursuant to this
agreement is intended solely for the benefit and use of the Board of Directors
of the Company in considering the matters to which this agreement relates, and
the Company agrees that such advice may not be relied upon by any other person,
used for any other purpose or, except as provided in subparagraph 1(F) hereof,
reproduced, disseminated, quoted or referred to at any time, in any manner or
for any purpose, nor shall any public references to WP&Co. be made by the
Company, without the prior written consent of WP&Co.
6. This agreement and WP&Co.'s engagement hereunder may be terminated
by either the Company or WP&Co. at any time upon thirty days' prior written
notice thereof to the other party; provided, however, that (a) termination of
WP&Co.'s engagement hereunder shall not affect the Company's continuing
obliga-
<PAGE>
tion to indemnify WP&Co. and certain related persons as provided in the separate
letter agreement referred to above, and its continuing obligations and
agreements under paragraph 5 hereof, (b) notwithstanding any such termination,
WP&Co. shall be entitled to (i) the full fees paid or payable to it as provided
for in subparagraph 2(A) hereof, and (ii) the full transaction fee in the amount
and at the time provided for in subparagraph 2(B) hereof in the event that (x)
at any time prior to the expiration of one year following such termination an
agreement in principle or definitive agreement to effect a Transaction is
entered into, and (y) concurrently therewith or at any time thereafter such
Transaction is consummated; and (c) termination of WP&Co.'s engagement hereunder
shall not affect the Company's obligation to reimburse the expenses accruing
prior to such termination to the extent provided for herein.
7. The Company agrees that WP&Co. shall have the right to place
advertisements in financial and other newspapers and journals at its own expense
describing its services to the Company hereunder, provided that WP&Co. will
submit a copy of any such advertisement to the Company for its approval, which
approval shall not be unreasonably withheld or delayed.
8. This agreement shall be deemed made in New York. This agreement and
all controversies arising from or relating to performance under this agreement
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to such state's rules concerning conflicts of
laws. The Company hereby irrevocably consents to personal jurisdiction in any
court of the State of New York or any Federal court sitting in the Southern
District of New York for the purposes of any suit, action or other proceeding
arising out of this agreement or any of the agreements or transactions
contemplated hereby, which is brought by or against the Company, hereby waives
any objection to venue with respect thereto, and hereby agrees that all claims
in respect of any such suit, action or proceeding shall be heard and determined
in any such court. The Company hereby irrevocably consents to the service of
process of any of the aforementioned courts in any such suit, action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Company at its address set forth above, such service to
become effective ten (10) days after such mailing. ANY RIGHT TO TRIAL BY JURY
WITH RESPECT TO ANY CLAIM OR ACTION ARISING OUT OF THIS AGREEMENT OR CONDUCT IN
CONNECTION WITH THIS ENGAGEMENT IS HEREBY WAIVED.
<PAGE>
9. This agreement may be executed in counterparts, each of which
together shall be considered a single document. This agreement shall be binding
upon WP&Co. and the Company and their respective successors and assigns. This
agreement is not intended to confer any rights upon any shareholder, creditor,
owner, partner of the Company, or any other person not a party hereto other than
the indemnified persons referenced in the indemnification agreement referred to
above.
10. It is understood and agreed that WP&Co. and its affiliates may from
time to time make a market in, have a long or short position in, buy and sell or
otherwise effect transactions for customer accounts and for their own accounts
in the securities of, or perform investment banking or other services for, the
Company and other entities which are or may be the subject of the engagement
contemplated by this agreement.
11. (A) The Company has advised WP&Co. that it intends to retain
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") regarding a possible
Transaction.
(B) The Company acknowledges and agrees that in performing
services for the Company, (i) the obligations of each of WP&Co. and DLJ shall
under all circumstances be deemed to be several and not joint; (ii) WP&Co. and
DLJ are not employees or agents of one another, neither shall have any liability
to the Company arising from the acts of omissions of the other, and neither
shall have any authority to bind the other vis-a-vis any third party; and (iii)
the rights of the indemnified persons and the obligations of the Company under
the separate letter agreement referred to in paragraph 4 hereof shall be
determined without reference to the rights of the indemnified persons and the
obligations of the Company under any engagement letter with DLJ.
12. Any payments to be made to WP&Co. hereunder and under the related
indemnification agreement referred to above shall be in U.S. dollars and shall
be free of all withholding, stamp and other taxes and of all other governmental
charges of any nature whatsoever.
<PAGE>
We are pleased to accept this engagement and look forward to working
with the Company. Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us the enclosed duplicate of this
letter, which shall thereupon constitute a binding agreement between WP&Co. and
the Company.
Very truly yours,
WASSERSTEIN PERELLA &CO., INC.
By:
---------------------------------
Name: Joseph T. Yurcik
Title: Managing Director
ACCEPTED AND AGREED TO:
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
By:
------------------------------------------
Name: William Ginsberg
Title: Chairman, President and CEO
<PAGE>
December 4, 1998
Wasserstein Perella & Co., Inc.
31 West 52nd Street
New York, NY 10019
Gentlemen:
In connection with your engagement as our financial advisor pursuant to
a separate agreement between you and us, we hereby agree to indemnify and hold
harmless Wasserstein Perella & Co., Inc. ("WP&Co.") and its affiliates, their
respective directors, officers, agents, employees and controlling persons, and
each of their respective successors and assigns (collectively, the "Indemnified
persons"), to the full extent lawful, from and against all losses, claims,
damages, liabilities and expenses incurred by them which (A) are related to or
arise out of (i) actions or alleged actions taken or omitted to be taken
(including any untrue statements made or any statements omitted to be made) by
us or (ii) actions or alleged actions taken or omitted to be taken by an
indemnified person with our consent or in conformity with our actions or
omissions or (B) are otherwise related to or arise out of WP&Co.'s activities
under WP&Co.'s engagement. We will not be responsible, however, for any losses,
claims, damages, liabilities or expenses pursuant to clauses A(ii) and (B) of
the preceding sentence which are finally judicially determined to have resulted
primarily from the gross negligence or willful misconduct of the person seeking
indemnification hereunder. We also agree that no indemnified person shall have
any liability to us for or in connection with such engagement or any
transactions or conduct in connection therewith except for losses, claims,
damages, liabilities or expenses incurred by us which are finally judicially
determined to have resulted primarily from the gross negligence, willful
misconduct or bad faith of such indemnified person; provided, however, that in
no event shall be indemnified persons' aggregate liability to us exceed the fees
WP&Co. actually receives from us pursuant to its engagement referred to above,
unless there is a final judicial determination of willful misconduct or bad
faith specified in this sentence.
After receipt by an indemnified person of notice of any complaint or
the commencement of any action or proceeding with respect to which
indemnification is being sought hereunder, such person will notify us in writing
of such complaint or of the commencement of such action or proceeding, but
failure so to notify us will relieve us from any liability which we may have
hereunder only if, and to the extent
<PAGE>
that such failure results in the forfeiture by us of substantial rights and
defenses, and will not in any event relieve us from any other obligation or
liability that we may have to any indemnified person otherwise than under this
letter agreement. If we so elect or are requested by such indemnified person, we
will assume the defense of such action or proceeding, including the employment
of counsel reasonably satisfactory to WP&Co. and the payment of the fees and
disbursements of such counsel. In the event, however, such indemnified person
shall have been advised by counsel that having common counsel would present a
conflict of interest or if the defendants in, or targets of, any such action or
proceeding include both an indemnified person and us, and such indemnified
person shall have been advised by counsel that there may be legal defenses
available to it or other indemnified persons that are different from or in
addition to those available to us, or if we fail to assume the defense of the
action or proceeding or to employ counsel reasonably satisfactory to such
indemnified person, in either case in a timely manner, then such indemnified
person may employ separate counsel to represent or defend it in any such action
or proceeding and we will pay the fees and disbursements of such counsel;
provided, however, that we will not be required to pay the fees and
disbursements of more than one separate counsel (in addition to local counsel)
for all indemnified persons in any jurisdiction in any single action or
proceeding. In any action or proceeding the defense of which we assume, the
indemnified person will have the right to participate in such litigation and to
retain its own counsel at such indemnified person's own expense. We further
agree that we will not, without the prior written consent of WP&Co., settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not WP&Co. or any other
indemnified person is an actual or potential party to such claim, action, suit
or proceeding) unless such settlement, compromise or consent includes an
unconditional release of WP&Co. and each other indemnified person hereunder from
all liability arising out of such claim, action, suit, or proceeding.
We agree that if any indemnification sought by an indemnified person
pursuant to this letter agreement is held by a court to be unavailable for any
reason other than as specified in the second sentence of this first paragraph of
this letter agreement, then (whether or not WP&Co. is the indemnified person),
we and WP&Co. will contribute to the losses, claims, damages, liabilities and
expenses for which such indemnification is held unavailable (i) in such
<PAGE>
proportion as is appropriate to reflect the relative benefits to us, on the one
hand, and WP&Co., on the other hand, in connection with WP&Co.'s engagement
referred to above, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i), but also the relative
fault of us, on the one hand, and WP&Co., on the other hand, as well as any
other relevant equitable considerations; provided, however, that in any event
the aggregate contribution of all indemnified persons, including WP&Co., to all
losses, claims, damages, liabilities and expenses with respect to which
contribution is available hereunder will not exceed the amount of fees actually
received by WP&Co. from us pursuant to WP&Co.'s engagement referred to above. It
is hereby agreed that for purposes of this paragraph, the relative benefits to
us, on the one hand, and WP&Co., on the other hand, with respect to WP&Co.'s
engagement shall be deemed to be in the same proportion as (i) the total value
paid or proposed to be paid or received by us or our stockholders, as the case
may be, pursuant to the transaction, whether or not consummated, for which
WP&Co. is engaged to render financial advisory services, bears to (ii) the fee
paid or proposed to be paid to WP&Co. in connection with such engagement. It is
agreed that it would not be just and equitable if contribution pursuant to this
paragraph were determined by pro rata allocation or by any other method which
does not take into account the considerations referred to in this paragraph.
We further agree that we will promptly reimburse WP&Co. and any other
indemnified person hereunder for all expenses (including fees and disbursements
of counsel) as they are incurred by WP&Co. or such other indemnified person in
connection with investigating, preparing for or defending, or providing evidence
in, any pending or threatened action, claim, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or not
WP&Co. or any other indemnified person is a party) and in enforcing this
agreement.
Our indemnity, contribution, reimbursement and other obligations under
this letter agreement shall be in addition to any liability that we may
otherwise have, at common law or otherwise, and shall be binding on our
successors and assigns.
Solely for purposes of enforcing this letter agreement, we hereby
consent to personal jurisdiction, service and venue in any court in which any
claim or proceeding which is subject to, or which may give rise to a claim for
indemnification or contribution under, this letter agreement is brought against
WP&Co. or any other indemnified person.
This letter agreement shall be deemed made in New York. This letter
agreement and all controversies arising from or relating to performance under
this letter agreement shall be governed by and construed in accordance with the
laws of
<PAGE>
the State of New York, without giving effect to such state's rules concerning
conflicts of laws. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR
ACTION ARISING OUT OF THIS LETTER AGREEMENT OR ANY ENGAGEMENT OF WP&CO. IS
HEREBY WAIVED.
The provisions of this letter agreement shall apply to the
above-mentioned engagement, activities relating to the engagement occurring
prior to the date hereof, and any subsequent modification of or amendment to
such engagement, and shall remain in full force and effect following the
completion or termination of WP&Co.'s engagement.
Very truly yours,
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
By:
---------------------------------------------
Name: William B. Ginsberg
Title: Chairman, President and CEO
Accepted:
WASSERSTEIN PERELLA & CO., INC.
By:
--------------------------------
Name: Joseph T. Yurcik
Title: Managing Director
<PAGE>
Exhibit 99.5
December 4, 1998
PRIVATE AND CONFIDENTIAL
Cellular Communications International, Inc.
110 East 59th Street
26th Floor
New York, NY 10022
Attention: William Ginsberg
Chairman, Chief Executive Officer and President
Gentlemen:
This letter agreement (the "Agreement") confirms our understanding that
Cellular Communications International, Inc. (the "Company") has engaged
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") to act as its
financial advisor with respect to the sale, merger, consolidation or any other
business combination, in one or a series of transactions, involving all or a
substantial amount of the business, securities or assets of the Company (each, a
"Transaction") to OliMan Holding B.V., a joint venture currently formed by or at
the direction of OliMan. We understand the company has also engaged Wasserstein
Perella & Co., Inc. to act as financial advisor with respect to a Transaction
under a separate engagement letter dated December 4, 1998.
As discussed, we propose to undertake certain services on your behalf,
to the extent requested by you, which shall consist of following: (i) study and
evaluate the Company and its business prospects, (ii) identify and analyze the
financial alternatives available to the Company, (iii) develop the strategy and
tactics to be used in evaluating these alternatives in the market, (iv) provide
analysis and advice in connection with a Transaction, as directed by the
Company, assist in the negotiation of a definitive agreement with OliMan and (v)
provide such other financial advisory services as may from time to time be
specifically agreed upon in writing by DLJ.
<PAGE>
Cellular Communications International, Inc.
December 4, 1998
Page 2
As compensation for the services to be provided by DLJ hereunder, the
Company agrees (i) to pay to DLJ (a) a fee of $100,000 payable promptly upon
execution of an agreement in principle or a definitive agreement to effect a
Transaction and (b) additional cash compensation as set forth below and (ii)
upon request by DLJ from time to time, to reimburse DLJ promptly for all
out-of-pocket expenses (including the reasonable fees and expenses of counsel)
incurred by DLJ in connection with its engagement hereunder, whether or not a
Transaction is consummated. As DLJ will be acting on your behalf, the Company
agrees to the indemnification and other obligations set forth in Schedule I
attached hereto, which Schedule is an integral part hereof.
The additional cash compensation referred to in clause (i)(b) above
shall be in an amount equal to $1,500,000 payable in cash at consummation of a
Transaction.
For purposes of this Agreement, a Transaction shall be deemed to have
been consummated upon the earliest of any of the following events to occur: (a)
the acquisition by another person of a majority of the Company calculated on a
fully-diluted basis; (b) a merger or consolidation of the Company or an
affiliate of the Company with another person; (c) the acquisition by another
person of assets of the Company representing a majority of the Company's book
value; or (d) in the case of any other Transaction, the consummation thereof.
The Company shall make available to DLJ all financial and other
information concerning its business and operations that DLJ reasonably requests
as well as any other information relating to any Transaction prepared by the
Company or any of its other advisors. In performing its services hereunder DLJ
shall be entitled to rely without investigation upon all information that is
available from public sources as well as all other information supplied to it by
or on behalf of the Company or its advisors or an acquiror or potential acquiror
or its advisors and shall not in any respect be responsible for the accuracy or
completeness of, or have any obligation to verify, the same or to conduct any
appraisal of assets or liabilities. To the extent consistent with legal
requirements, all information given to DLJ by the Company, unless publicly
available or otherwise available to DLJ without restriction or breach of any
confidentiality agreement, will be held by DLJ in confidence and will not be
disclosed to anyone other than DLJ's agents and advisors without the Company's
prior approval or used for any purpose other than those referred to in this
Agreement.
<PAGE>
Cellular Communications International, Inc.
December 4, 1998
Page 3
Any advice, written or oral, provided by DLJ pursuant to this Agreement
will be treated by the Company as confidential, will be solely for the
information and assistance of the Company in connection with its consideration
of the Transaction and will not be reproduced, summarized, described or referred
to, or furnished to any other party or used for any other purpose, except in
each case with our prior written consent.
In order to coordinate our efforts with respect to a possible
Transaction satisfactory to the Company, during the period of our engagement
hereunder neither the Company nor any representative thereof (other than DLJ)
will initiate discussions regarding a Transaction except through DLJ or
Wasserstein Perella & Co., Inc. (the "Advisors"). In the event the Company or
its management receives an inquiry regarding a Transaction, it will promptly
advise the Advisors of such inquiry in order that we may evaluate such
prospective purchaser and its interest and assist the Company in any resulting
negotiations.
This Agreement may be terminated by either the Company or DLJ upon
receipt of written notice to that effect by the other party. Upon any
termination or expiration of this Agreement, DLJ will be entitled to prompt
payment of all fees accrued prior to such termination or expiration and
reimbursement of all out-of-pocket expenses as described above. The indemnity
and other provisions contained in Schedule I will also remain operative and in
full force and effect regardless of any termination or expiration of this
Agreement.
In addition, if at any time prior to 12 months after the termination
DLJ will be entitled to payment in full of the compensation described in the
fourth paragraph of this Agreement. It is understood that if the Company
completes a transaction in lieu of any Transaction, either during the term of
this Agreement or at any time prior to 12 months after termination by the
Company of this Agreement, for which DLJ is entitled to compensation pursuant to
this Agreement (including, but not limited to, a recapitalization or a partial
or complete liquidation), DLJ and the Company will in good faith mutually agree
upon acceptable compensation for DLJ taking into account, among other things,
the results obtained and the custom and practice of investment bankers of
international standing acting in similar transactions.
<PAGE>
Cellular Communications International, Inc.
December 4, 1998
Page 4
The Company further agrees that it will not enter into any transaction
referred to in either of the two preceding paragraphs unless, prior to or
simultaneously with such transaction, adequate provision is made with respect to
the payment of compensation to DLJ as contemplated by such paragraphs.
Please note that DLJ is a full services securities firm engaged in
securities trading and brokerage activities, as well as providing investment
banking and financial advisory services. In the ordinary course of our trading
and brokerage activities, DLJ or its affiliates may at any time hold long or
short positions, and may trade or otherwise effect transactions, for our own
account or on the accounts of customers, in debt or equity securities or bank or
other senior debt of the Company or other entities that may be involved in the
Transaction. We recognize our responsibility for compliance with Federal laws in
connection with any such activities.
The Company acknowledges and agrees that DLJ has been retained solely
to provide the advice or services set forth in this Agreement. DLJ shall act as
an independent contractor, and any duties of DLJ arising out of its engagement
hereunder shall be owed solely to the Company.
This Agreement shall be binding upon and inure to the benefit of the
Company. DLJ, each Indemnified Person (as defined in Schedule I) and their
respective successors and assigns.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.
The Company irrevocably and unconditionally submits to the exclusive
jurisdiction of any State or Federal court sitting in New York City over any
suit, action or proceeding arising out of or relating to this letter (including
Schedule I). The Company hereby agrees that service of any process, summons,
notice or document by U.S. registered mail addressed to the Company shall be
effective service of process for any action, suit or proceeding brought in any
such court. The Company irrevocably and unconditionally waives any objection to
the laying of venue of any such suit,
<PAGE>
Cellular Communications International, Inc.
December 4, 1998
Page 5
action or proceeding brought in any such court and any claim that any such suit,
action or proceeding brought in such a court has been brought in an inconvenient
forum. The Company agrees that a final judgment in any such suit, action or
proceeding brought in any such court shall be conclusive and binding upon the
Company and may be enforced in any other courts to whose jurisdiction the
Company is or may be subject, by suit upon such judgment. The prevailing party
in any suit, action or proceeding arising out of or relating to this Agreement
shall be entitled to recover from the non-prevailing party all of the attorney
fees and other expenses the prevailing party may incur in such suit, action or
proceeding and in any subsequent suit to enforce a judgment.
If any term, provision, covenant or restriction contained in this
Agreement, including Schedule I, is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
After reviewing this Agreement, please confirm that the foregoing is in
accordance with your understanding by signing and returning to me the duplicate
of this letter attached hereto, whereupon it shall be our binding Agreement.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
---------------------------------
Michael J. Connelly
Managing Director
Accepted and agreed to
this ____ day of December, 1998
Cellular Communications International, Inc.
By:
-----------------------------------------------------
William Ginsberg
Chairman, Chief Executive Officer and President
<PAGE>
SCHEDULE I
This Schedule I is a part of and is Incorporated into that certain
letter agreement (together, the "Agreement"), dated December 4, 1998 by and
between Cellular Communications International, Inc. (the "Company") and
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ").
The Company agrees to indemnify and hold harmless DLJ and its
affiliates, and the respective directors, officers, agents and employees of DLJ
and its affiliates (DLJ and each such entity or person, an "Indemnified Person")
from and against any losses, claims, damages, judgments, assessments, costs and
other liabilities (collectively "Liabilities"), and will reimburse each
Indemnified Person for all fees and expenses (including the reasonable fees and
expenses of counsel) (collectively, "Expenses") as they are incurred in
investigating, preparing, pursuing or defending any claim, action, proceeding or
investigation, whether or not in connection with pending or threatened
litigation or arbitration and whether or not any Indemnified Person is a party
(collectively, "Actions"), arising out of or in connection with advice or
services rendered or to be rendered by any Indemnified Person pursuant to this
Agreement, the transactions contemplated hereby or any Indemnified Person's
actions or inactions in connection with any such advice, services or
transactions; provided that the Company will not be responsible for any
Liabilities or Expenses of any Indemnified Person that are determined by a
judgment of a court of competent jurisdiction which is no longer subject to
appeal or further review to have resulted solely from such Indemnified Person's
gross negligence or willful misconduct in connection with any of the advice,
actions, inactions or services referred to above. The Company also agrees to
reimburse each Indemnified Person for all Expenses as they are incurred in
connection with enforcing such Indemnified Person's rights under this Agreement
(including, without limitation, its rights under this Schedule I).
Upon receipt by an Indemnified Person of actual notice of an Action
against such Indemnified Person with respect to which indemnity may be sought
under this Agreement, such Indemnified Person shall promptly notify the Company
in writing; provided that failure so to notify the Company shall not relieve the
Company from any liability which the Company may have on account of this
indemnity or otherwise, except to the extent the Company shall have been
materially prejudiced by such failure. The Company shall, if requested by DLJ,
assume the defense of any such Action including the employment of counsel
reasonably satisfactory to DLJ. Any Indemnified Person shall have the right to
employ separate counsel in any such Action and participate in the defense
thereof, but the fees and expenses of such
<PAGE>
counsel shall be at the expense of such Indemnified Person, unless: (i) the
Company has failed promptly to assume the defense and employ counsel or (ii) the
named parties to any such Action (including any impleaded parties) include such
Indemnified Person and the Company, and such Indemnified Person shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or in addition to those available to the Company;
provided that the Company shall not in such event be responsible hereunder for
the fees and expenses of more than one firm of separate counsel in connection
with any Action in the same jurisdiction, in addition to any local counsel. The
Company shall not be liable for any settlement of any Action effected without
its written consent. In addition, the Company will not, without prior written
consent of DLJ, settle, compromise or consent to the entry of any judgment in or
otherwise seek to terminate any pending or threatened Action in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Person is a party thereto) unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Person from all Liabilities arising out of such Action.
In the event that the foregoing indemnity is unavailable to an
Indemnified Person other than in accordance with this Agreement, the Company
shall contribute to the Liabilities and Expenses paid or payable by such
Indemnified Person in such proportion as is appropriate to reflect (i) the
relative benefits to the Company and its shareholders, on the one hand, and to
DLJ, on the other hand, of the matters contemplated by this Agreement or (ii) if
the allocation provided by the immediately preceding clause is not permitted by
the applicable law, not only such relative benefits but also the relative fault
of the Company, on the one hand, and DLJ, on the other hand, in connection with
the matters as to which such Liabilities or Expenses relate, as well as any
other relevant equitable considerations; provided that in no event shall the
Company contribute less than the amount necessary to ensure that all Indemnified
Persons, in the aggregate, are not liable for any Liabilities and Expenses in
excess of the amount of fees actually received by DLJ pursuant to this
Agreement. For purposes of this paragraph, the relative benefits to the Company
and its shareholders, on the one hand, and DLJ, on the other hand, of the
matters contemplated by this Agreement shall be deemed to be in the same
proportion as (a) the total value paid or contemplated to be paid or received or
contemplated to be received by the Company or the Company's shareholders, as the
case may be, in the transaction or transactions that are within the scope of
this Agreement, whether or not any such transaction is consummated, bears to (b)
the fees paid or contemplated to be paid to DLJ under this Agreement.
<PAGE>
The Company also agrees that no Indemnified Person shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with advice or services rendered or to be rendered
by any Indemnified Person pursuant to this Agreement, the transactions
contemplated hereby or any Indemnified Person's actions or inactions in
connection with any such advice, services or transactions except for Liabilities
(and related Expenses) of the Company that are determined by a judgment of a
court of competent jurisdiction which is no longer subject to appeal or further
review to have resulted solely from such Indemnified Person's gross negligence
or willful misconduct in connection with any such advice, actions, inactions or
services.
The reimbursement, indemnity and contribution obligations of the
Company set forth herein shall apply to any modification of this Agreement and
shall remain in full force and effect regardless of any termination of, or the
completion of any Indemnified Person's services under or in connection with,
this Agreement.
<PAGE>
NEWS RELEASE:
FOR IMMEDIATE RELEASE:
OLIVETTI S.p.A. AND MANNESMANN AG ANNOUNCE PLANS TO ACQUIRE
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
New York, New York, December 11, 1998 -- Cellular Communications International,
Inc. (NNM: CCIL), Olivetti S.p.A. and Mannesmann AG announced today that they
have signed a definitive merger agreement for Olivetti and Mannesmann to acquire
through a newly formed entity (Kensington Acquisition Sub, Inc.) all the
outstanding common stock of CCIL.
Under the agreement, Olivetti and Mannesmann will commence, on or before
December 18, 1998, a US$65.75 per share cash tender offer for all the
outstanding shares of common stock of CCIL. Following the consummation of the
tender offer, Olivetti and Mannesmann will acquire through a merger all shares
not purchased in the tender offer at the same price. This would result in an
aggregate equity purchase price on a fully diluted basis of approximately US$1.4
billion.
The Board of Directors of each of the companies has approved the tender offer
and the related transactions. Goldman, Sachs & Co. advised Olivetti and
Mannesmann on the transaction. CCIL's Board has determined that the terms of the
tender offer and merger are fair to, and in the best interests of, CCIL and its
stockholders, and has recommended that all stockholders accept the offer. The
Board of Directors of CCIL has received an opinion from its financial advisor,
Wasserstein Perella & Co., Inc., to the effect that the consideration proposed
to be paid in the transaction is fair to CCIL's stockholders from a financial
point of view.
The tender offer will be conditioned upon, among other things, the tender of a
number of shares which represents a majority of the outstanding shares of common
stock on a fully diluted basis. The tender offer will not be subject to a
financing contingency.
William Ginsberg, chief executive officer of CCIL, stated, "Over ten years ago,
we created CCIL in order to leverage our U.S. cellular experience and knowledge
by means of pursuing analogous opportunities in other countries. We were
instrumental in the creation and subsequent development of Omnitel-Pronto Italia
S.p.A., which has evolved into one of the largest and most rapidly growing
cellular operations in the world. During this time, the market value of CCIL has
grown from under $50 million at the time CCIL became a separate public company
in 1991 to approximately $1.4 billion on a fully diluted basis at the $65.75 per
share price announced today."
<PAGE>
"We are pleased to enter into this transaction with Olivetti and Mannesmann and
to recommend it to stockholders. We also recognize and appreciate the efforts of
the many people who have contributed to CCIL's success."
CCIL's primary asset is an approximate 14.667% interest in Omnitel Sistemi
Radiocellulari Italiani S.p.A. (OSR), a strategic joint venture which holds a
70% interest in Omnitel-Pronto Italia S.p.A. (Omnitel). Omnitel is Italy's
second leading mobile operator with over 5.5 million subscribers.
In the autumn of 1997, Olivetti and Mannesmann formed a joint venture, Oliman
Holding B.V., to cooperate in the area of telecommunications in Italy with the
objective to expand their leading position as a private competitor in the
Italian telecommunications market. Olivetti currently holds a 62.5% interest in
Oliman and Mannesmann holds a 37.5% interest. Mannesmann will raise its stake in
Oliman to 49.9% by February 1999. Oliman currently holds an indirect 40%
interest in Omnitel and a 100% stake in the fixed line operator Infostrada. With
this acquisition, Oliman will further strengthen its majority position in
Omnitel. CCIL currently holds an indirect stake of approximately 10.3% in
Omnitel.
Mannesmann operates in Telecommunications, Engineering, Automotive and Tubes &
Trading and generated sales of around DM 39 billion in 1997. The Group is one of
the leading alternative telecommunication operators in the recently liberalized
European market.
The Olivetti Group is a leading international player operating through
subsidiaries and affiliates in the telecommunications and information technology
sectors. In telecommunications, Olivetti operates both in the wireless and
wireline markets through Omnitel and Infostrada, respectively. In the
Information Technology sector, Olivetti wholly owns Olivetti Lexikon, which
specializes in I.T. products for the office and the consumer markets. It also
has a 18.5% ownership in Wang Global, a United States publicly traded company.
Conference Call: A telephone conference call will be held at 2:00 p.m.. New York
time today to discuss this transaction. Persons wishing to participate in this
call can do so by calling the following numbers:
U.S. callers: (800) 865-4460
International callers: (973) 321-1100
The callers should ask for the "Cellular Communications International" call upon
dialing.
A digital replay will be available for one week at the following numbers:
2
<PAGE>
U.S. callers: (888) 371-8504
International callers: (402) 220-1435
Contact information:
At CCIL: Richard J. Lubasch, Senior Vice President-General Counsel, (212)
906-8470.
At Mannesmann: Ms. Magdalena Moll, telephone 49-211-820-2161, facsimile
49-211-820-2384.
At Olivetti: Mr. Vittorio Meloni, telephone 39-01-2552-2639, facsimile
39-01-2552-3884.
3
<PAGE>
[LOGO]
December 17, 1998
Dear Stockholder:
I am pleased to inform you that on December 11, 1998, Cellular
Communications International, Inc. (the "Company") entered into an Agreement and
Plan of Merger (the "Merger Agreement") with Kensington Acquisition Sub, Inc.
(the "Purchaser"), which was formed in connection with the Merger Agreement and
is owned 50% by Olivetti S.p.A. and 50% by Mannesmann AG. Pursuant to the Merger
Agreement, the Purchaser today commenced a tender offer (the "Offer") to
purchase all outstanding shares of the Company's common stock, including the
associated preferred stock purchase rights issued pursuant to a rights agreement
dated November 8, 1990 (together, the "Shares"), for $65.75 per share in cash,
without interest, subject to the terms and conditions in the Offer to Purchase
and the related Letter of Transmittal that are included in the Purchaser's
offering materials. Under the Merger Agreement, the Offer will be followed by a
merger (the "Merger") of the Purchaser with and into the Company, and all Shares
not purchased in the Offer (other than Shares held by the Purchaser and its
affiliates, by dissenting stockholders or by the Company) will be converted into
the right to receive $65.75 per share in cash in the Merger.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER, THE MERGER AND
THE MERGER AGREEMENT AND HAS DETERMINED THAT THE TERMS OF EACH ARE FAIR TO, AND
IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS. ACCORDINGLY, THE
BOARD RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN
THE OFFER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors, including, among other things, the opinion
of Wasserstein Perella & Co., Inc., the Company's financial advisor, that, as of
the date of such opinion, the consideration to be received by the Company's
stockholders pursuant to the Offer and the Merger is fair, from a financial
point of view, to such stockholders.
Attached is a copy of the Schedule 14D-9 filed by the Company with the
Securities and Exchange Commission. The Schedule 14D-9 describes the reasons for
your Board of Directors' recommendation and contains other important information
relating to the Offer. Also enclosed is the Offer to Purchase, dated December
17, 1998, of the Purchaser, together with related materials, including a Letter
of Transmittal to be used for tendering your shares. These documents set forth
the terms and conditions of the Offer and the Merger and provide instructions on
how to tender your shares. We urge you to read Schedule 14D-9 and the enclosed
materials carefully.
Sincerely,
/s/ William B. Ginsberg
Wiliam B. Ginsberg
PRESIDENT, CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
<PAGE>
[WASSERSTEIN PERELLA & CO LOGO]
EXHIBIT 99.8
December 11, 1998
Board of Directors
Cellular Communications International, Inc.
110 East 59th Street
New York, NY 10019
Gentlemen:
You have asked us to advise you with respect to the fairness, from a
financial point of view, to the holders of the common stock, par value $0.01 per
share (the "Shares"), of Cellular Communications International, Inc. (the "the
Company") of the consideration to be received by such holders (other than
Purchaser, such term as defined herein, and its affiliates) pursuant to the
terms of the Agreement and Plan of Merger, dated as of December 11, 1998 (the
"Merger Agreement"), among the Company and Kensington Acquisition Sub, Inc.
("Purchaser"), a Delaware corporation wholly-owned jointly by Mannesmann AG
("Mannesmann") and Olivetti S.p.A. ("Olivetti", and together with Mannesmann,
the "Guarantors"). The Merger Agreement provides for, among other things, a cash
tender offer by Purchaser to acquire all of the outstanding Shares at a price of
$65.75 per Share (the "Tender Offer"), and for a subsequent merger of Purchaser
with and into the Company pursuant to which each remaining outstanding Share not
purchased in the Tender Offer (other than any Shares held in the treasury of the
Company, any shares owned by Purchaser, its subsidiaries or affiliates, or
Shares held by a holder who has demanded and perfected his demand for appraisal
of his Shares in accordance with Delaware law) will be converted into the right
to receive $65.75 in cash (the "Merger" and, together with the Tender Offer, the
"Transaction"). The terms and conditions of the Transaction are set forth in
more detail in the Merger Agreement. Pursuant to a Guarantee, dated December 11,
1998 (the "Guarantee") among the Company, Mannesmann and Olivetti, the
Guarantors have guaranteed the certain obligations of the Purchaser pursuant to
the Merger Agreement.
In connection with rendering our opinion, we have reviewed the Merger
Agreement. We have also reviewed and analyzed certain publicly available
business and financial information relating to the Company for recent years and
interim periods to date, as well as certain internal financial and operating
information, including financial forecasts, analyses and projections prepared by
or on behalf of the Company and provided to us for purposes of our analysis, and
we have met with management of the Company to review and discuss such
information and, among other matters, the Company's business, operations,
assets, financial condition and future prospects.
We have reviewed and considered certain financial and stock market data
relating to the Company, and we have compared that data with similar data for
certain other companies, the securities of which are publicly traded, that we
believe may be relevant or comparable in certain respects to the Company or one
or more of its businesses or assets, and we have reviewed and considered terms
and conditions of certain recent acquisitions and business combination
transactions in the cellular telecommunications industry specifically, and in
other industries generally, that we believe to be relevant to our inquiry. We
have also performed such other financial studies, analyses, and investigations
and reviewed such other information, including certain terms and conditions of
the agreements relevant to the Company's investment in Omnitel-Sistemi
Radiocellulari Italiani S.p.A., as we considered appropriate for purposes of
this opinion.
In our review and analysis and in formulating our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other
information provided to or discussed with us or publicly available, and we have
not assumed any responsibility for independent verification of any of such
information. We have also assumed and relied upon the reasonableness and
accuracy of the financial projections, forecasts and analyses provided to us,
and we have assumed that such projections, forecasts and analyses were
reasonably prepared in good faith and on bases reflecting the best currently
available
<PAGE>
Board of Directors
December 11, 1998
Page 2
judgments and estimates of the Company's management. We express no opinion with
respect to such projections, forecasts and analyses or the assumptions upon
which they are based. In addition, we have not reviewed any of the books and
records of the Company, or assumed any responsibility for conducting a physical
inspection of the properties or facilities of the Company, or for making or
obtaining an independent valuation or appraisal of the assets or liabilities of
the Company, and no such independent valuation or appraisal was provided to us.
We also have assumed that the transactions described in the Merger Agreement
will be consummated without waiver or modification of any of the material terms
or conditions contained therein by any party thereto. Our opinion is necessarily
based on economic and market conditions and other circumstances as they exist
and can be evaluated by us as of the date hereof.
It should be noted that in the context of our current engagement by the
Company, we were not authorized to and did not solicit third party indications
of interest in acquiring all or any part of the Company, or investigate any
alternative transactions that may be available to the Company.
In the ordinary course of our business, we may actively trade the debt and
equity securities of the Company for our own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities.
We have acted as financial advisor to the Company in connection with the
Transaction and will receive a fee for our service, a significant portion of
which is contingent upon the consummation of the Transaction. We will also
receive a fee for rendering this opinion. In addition, we and our affiliates
have provided investment banking services to the Company from time to time and
have received customary compensation for such services. We acted as co-manager
of the Company's offerings of EURO 235 million (face value) of 9.5% Senior
Discount Notes due 2005 and $75 million of 6% Convertible Subordinated Notes due
2005.
Our opinion addresses only the fairness from a financial point of view to
the shareholders of the Company of the consideration to be received by such
shareholders pursuant to the Transaction, and we do not express any views on any
other terms of the Transaction. Specifically, our opinion does not address the
Company's underlying business decision to effect the transactions contemplated
by the Merger Agreement.
It is understood that this letter is for the benefit and use of the Board of
Directors of the Company in its consideration of the Transaction, and except for
inclusion in its entirety in any proxy statement required to be circulated to
shareholders of the Company relating to the Merger or tender offer
recommendation statement on Schedule 14D-9 from the Company to holders of Shares
relating to the Transaction, may not be quoted, referred to or reproduced at any
time or in any manner without our prior written consent. This opinion does not
constitute a recommendation to any shareholder with respect to whether such
holder should tender Shares pursuant to the Tender Offer or as to how such
holder should vote with respect to the Merger, and should not be relied upon by
any shareholder as such.
Based upon and subject to the foregoing, including the various assumptions
and limitations set forth herein, it is our opinion that as of the date hereof,
the $65.75 per Share cash consideration to be received by the shareholders of
the Company (other than Purchaser and its affiliates) pursuant to the Tender
Offer and the Merger is fair to such shareholders from a financial point of
view.
Very truly yours,
/s/ Wasserstein Perella & Co., Inc.
Wasserstein Perella & Co., Inc.
