<PAGE> 1
FILED PURSUANT TO RULE 424(b)(2) and (3)
Registration Number 33-62787
PROSPECTUS SUPPLEMENT
(To Prospectus dated July 2, 1996)
$250,000,000
LOGO
7% Notes due 2003
---------------------------
The 7% Notes due 2003 (the "Notes") of AirTouch Communications, Inc.
("AirTouch" or the "Company") will be limited to $250,000,000 aggregate
principal amount. The Notes will mature on October 1, 2003. Interest on the
Notes will be payable semi-annually on April 1 and October 1 of each year,
commencing April 1, 1997.
The Notes will be redeemable in whole or in part, at the option of the
Company at any time, at a redemption price equal to the greater of (i) 100% of
their principal amount or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the date of
redemption on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the treasury yield (as defined herein) plus 10 basis points,
plus accrued interest to the date of redemption. The Notes will not be subject
to any sinking fund.
The Notes will be represented by one or more Global Notes registered in the
name of a nominee of The Depository Trust Company, as Depositary. Beneficial
interests in the Global Notes will be shown on, and transfers thereof will be
effected only through, records maintained by the Depositary and its
participants. Except as described herein or in the accompanying Prospectus,
Notes in certificated form will not be issued. The Notes will trade in the
Depositary's Same-Day Funds Settlement System, and secondary market trading
activity in the Notes will therefore settle in immediately available funds. See
"Description of the Notes -- Book Entry System" and "-- Same-Day Settlement and
Payment" herein.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
Price to Underwriting Proceeds to
Public(1) Discount(2) Company(1)(3)
- ------------------------------------------------------------------------------------------------------
Per Note................................ 99.895% .625% 99.270%
- ------------------------------------------------------------------------------------------------------
Total................................... $249,737,500 $1,562,500 $248,175,000
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from October 1, 1996, to date of delivery.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including certain liabilities under the Securities Act of 1933,
as amended.
(3) Before deducting expenses payable by the Company estimated at $175,000.
---------------------------
The Notes offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriters and
to certain further conditions. It is expected that delivery of the Notes will be
made through the facilities of The Depository Trust Company on or about October
7, 1996.
---------------------------
LEHMAN BROTHERS
MERRILL LYNCH & CO.
J.P. MORGAN & CO.
SALOMON BROTHERS INC
October 2, 1996
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT. When used
in this Prospectus Supplement and in the Prospectus, including the documents
incorporated therein by reference, the words "estimate," "project," "intend,"
"expect" and similar expressions are intended to identify forward-looking
statements regarding events and financial trends which may affect the Company's
future operating results and financial position. Such statements are subject to
risks and uncertainties that could cause the Company's actual results and
financial position to differ materially. Such factors are described in detail in
"Business -- Investment Considerations" in the Company's Annual Report on Form
10-K for the year ended December 31, 1995, as amended, and in the Company's
Quarterly Reports on Form 10-Q, each of which is incorporated by reference
herein. Readers are cautioned not to place undue reliance on these
forward-looking statements. The Company undertakes no obligation to publicly
release the result of any revisions to these forward-looking statements to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
USE OF PROCEEDS
The Company intends to apply the proceeds from the sale of the Notes to
retire commercial paper, which bore interest rates averaging 5.54% at September
30, 1996, and had maturities ranging from between one and 30 days. The
commercial paper was issued to meet the Company's general corporate requirements
and its cash obligations in connection with its acquisition of Cellular
Communications, Inc. as described below under "Recent Developments."
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges of the Company for the six months
ended June 30, 1996 is 5.7. For the purpose of calculating this ratio, earnings
consist of income before cumulative effect of accounting change and income taxes
and fixed charges included in pre-tax income, adjusted for minority interests in
the income of certain consolidated wireless systems and equity in net losses and
distributed net income of certain less-than-fifty-percent owned unconsolidated
wireless systems. Fixed charges include interest on indebtedness and the portion
of rental expense representative of the interest factor.
RECENT DEVELOPMENTS
On August 16, 1996, the Company completed its acquisition of the remaining
approximately 60% of the outstanding stock of Cellular Communications, Inc.
("CCI") that it did not already own (the "Merger"). Prior to the Merger, the
Company and CCI were partners in New Par, an equally-owned partnership formed in
1991 to own and operate cellular properties in Michigan and Ohio. In connection
with the formation of New Par, the Company and CCI entered into an agreement
(the "1991 Merger Agreement") under which the Company had the right to acquire
CCI in a multi-step transaction. Over time, AirTouch acquired slightly less than
40 percent of the capital stock of CCI. On April 4, 1996, the Company and CCI
entered into a new merger agreement (the "1996 Merger Agreement") pursuant to
which the Company would acquire the remaining outstanding stock of CCI that it
did not already own in an alternative transaction to that set forth in the 1991
Merger Agreement, and on August 16, 1996, the Company completed its acquisition
of CCI pursuant to the 1996 Merger Agreement.
As consideration for the Merger, the Company paid approximately $393.24
million in cash and issued approximately 17.24 million shares of 6.00% Class B
Mandatorily Convertible Preferred Stock, Series 1996 and approximately 11.07
million shares of 4.25% Class C Convertible Preferred Stock, Series 1996 to the
<PAGE> 3
holders of CCI stock. The Class B Preferred Stock and the Class C Preferred
Stock trade on the New York Stock Exchange under the symbols ATI-Pr-B and
ATI-Pr-C, respectively.
In connection with the Merger, AirTouch Cellular, Inc., a wholly-owned
subsidiary of the Company ("Cellular"), assumed all of the obligations of CCI
under the Indenture dated as of January 27, 1992 (the "Zero Coupon Indenture")
between CCI and The Chase Manhattan Bank (formerly known as Chemical Bank)
relating to CCI's $217,000,000 Zero Coupon Convertible Subordinated Notes Due
1999 (the "Zero Coupon Notes"). Pursuant to the Zero Coupon Indenture, holders
of the Zero Coupon Notes have the right to require Cellular to purchase such
notes as of the date that is 35 business days after the closing of the Merger,
or October 7, 1996, for an amount equal to the Issue Price plus Accrued Original
Discount (as defined in the Zero Coupon Indenture) through October 7, 1996. As
of October 7, 1996, the aggregate Issue Price plus Accrued Original Discount on
all Zero Coupon Notes will be $176,501,290. For further discussion of the
Company's acquisition of CCI, see the Company's Registration Statement on Form
S-4 (Reg. No. 333-03107).
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered by
this Prospectus Supplement supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of the Debt
Securities under "Description of the Debt Securities" in the accompanying
Prospectus. Capitalized terms not defined herein have the meanings ascribed to
them in the accompanying Prospectus.
GENERAL
The Notes are being issued under an Indenture dated as of July 16, 1996, as
amended by the First Supplemental Indenture dated as of July 16, 1996 and a
Third Supplemental Indenture to be dated as of October 7, 1996 (such indenture
as so supplemented and amended in accordance with its terms being herein
referred to as the "Indenture"), each being between the Company, as issuer, and
First National Bank of Chicago, as trustee (the "Trustee"). The Indenture is
subject to and governed by the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Provisions of the Indenture are more fully described in
this Prospectus Supplement and under "Description of the Debt Securities"
commencing on page 11 of the accompanying Prospectus. The following summary of
the Notes is qualified in its entirety by reference to the Indenture, the Notes
and the Trust Indenture Act.
The Indenture does not contain any covenants specifically designed to
protect registered owners of the Notes against a reduction in the
creditworthiness of the Company in the event of a highly leveraged transaction.
The Notes will be originally issued in fully registered book-entry form and will
be represented by one or more Global Notes registered in the name of The
Depository Trust Company, as Depositary, or its nominee. See "-- Book-Entry
System." Upon any exchange under the provisions of the Indenture of the Global
Notes for Notes in definitive form, such definitive Notes shall be issued in
authorized denominations of $1,000 or any integral multiples thereof.
The Notes will be limited to $250,000,000 aggregate principal amount and
will mature on October 1, 2003. The Notes will bear interest at the rate of 7%
per annum. Interest on the Notes will accrue from October 1, 1996, and will be
payable on each April 1 and October 1 commencing April 1, 1997. Interest on each
Note will be computed on the basis of a 360-day year of twelve 30-day months.
Payments of interest and principal on the Notes will be made in United States
Dollars to the persons in whose name the Notes are registered at the close of
business on the date which is fifteen days prior to the relevant payment date.
OPTIONAL REDEMPTION
The Notes will be redeemable in whole or in part, at the option of the
Company at any time, at a redemption price equal to the greater of (i) 100% of
their principal amount or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the date of
redemption on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Yield plus 10 basis points, plus accrued interest
to the date of redemption.
S-2
<PAGE> 4
"Treasury Yield" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means, the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining terms of such Notes that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, Reference
Treasury Dealer Quotation for such redemption date.
"Independent Investment Banker" means Lehman Brothers or, if such firm is
unwilling or unable to select the Comparable Treasury Issue, an independent
investment banking institution of national standing appointed by the Company and
acceptable to the Trustee.
"Reference Treasury Dealer Quotation" means, with respect to the Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
"Reference Treasury Dealer" means Lehman Brothers and its successor;
provided however, that if it shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute therefor another Primary Treasury Dealer.
Holders of Notes to be redeemed will receive notice thereof by first-class
mail at least 30 and not more than 60 days prior to the date fixed for
redemption.
If fewer than all the Notes are to be redeemed, selection of Notes for
redemption will be made by the Trustee in any manner the Trustee deems fair and
appropriate and that complies with applicable legal and securities exchange
requirements.
Unless the Company defaults in payment of the redemption price, from and
after the redemption date, the Notes or portions thereof called for redemption
will cease to bear interest, and the holders thereof will have no right in
respect of such Notes except the right to receive the redemption price thereof.
BOOK-ENTRY SYSTEM
The Notes will be issued in the form of one or more fully registered Global
Debt Securities (each, a "Global Note") which will be deposited with, or on
behalf of, The Depository Trust Company ("DTC") and registered in the name of a
nominee of DTC. Except as hereinafter set forth, the Notes will be available for
purchase in book-entry form only. The term "Depositary" as used in this
Prospectus Supplement refers to DTC or any successor depositary.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the laws of the State of New York, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC was created to hold securities of persons who have accounts with DTC
("Participants") and to facilitate the clearance and settlement of securities
transactions among Participants in such securities through electronic book-entry
changes in accounts of such Participants.
S-3
<PAGE> 5
Participants include securities brokers and dealers (including the
Underwriters), banks and trust companies, clearing corporations and certain
other organizations, some of which (and/or their representatives) own DTC.
Access to DTC's book-entry system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("indirect
participants"). Persons who are not Participants may beneficially own securities
held by the Depositary only through Participants or indirect participants.
DTC also advises that pursuant to procedures established by it, upon the
issuance by the Company of the Notes represented by the Global Notes, DTC or its
nominee will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Notes represented by such Global Notes to
the accounts of Participants. The accounts to be credited shall be designated by
the Underwriters. Ownership of beneficial interests in Notes represented by the
Global Notes will be limited to Participants or persons that hold interests
through Participants. Ownership of such beneficial interests in Notes will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the Depositary (with respect to interests of Participants
in the Depositary), or by Participants in the Depositary or persons that may
hold interests through such Participants (with respect to persons other than
Participants in the Depositary).
So long as the Depositary or its nominee is the registered owner of a
Global Note, the Depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented thereby for all
purposes under the Indenture and the Notes. Except as hereinafter provided,
owners of beneficial interests in the Global Notes will not be entitled to have
the Notes represented by a Global Note registered in their names, will not
receive or be entitled to receive physical delivery of such Notes in definitive
form and will not be considered the owners or holders thereof under the
Indenture. Unless and until a Global Note is exchanged in whole or in part for
individual certificates evidencing the Notes represented thereby, such Global
Note may not be transferred except as a whole by the Depositary to a nominee of
the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any nominee of the Depositary
to a successor Depositary or any nominee of such successor Depositary.
Payments of principal of and interest on the Notes represented by a Global
Note will be made by the Company through the Trustee to the Depositary or its
nominee, as the case may be, as the registered owner of the Notes. The Company
has been advised that DTC or its nominee, upon receipt of any payment of
principal or interest in respect of the Notes will credit immediately the
accounts of the related Participants with payment in amounts proportionate to
their respective beneficial interest in the Global Notes as shown on the records
of DTC. The Company expects that payments by a Participant to owners of
beneficial interests in the Global Notes will be governed by standing customer
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such Participants.
The Company will recognize DTC or its nominee as the sole registered owner
of the Notes for all purposes, including notices and consents. Conveyance of
notices and other communications by DTC to Participants, by Participants to the
indirect participants, and by Participants and the indirect participants to
beneficial owners will be governed by arrangements among them, subject to any
statutory and regulatory requirements as may be in effect from time to time.
The Depositary has advised the Company that it will take any action
permitted to be taken by a holder of Notes only at the direction of one or more
Participants to whose accounts interests in the Global Notes are credited and
only in respect of such portion of the aggregate principal amount of Notes as to
which such Participant or participants has or have given such direction.
So long as the Notes are outstanding in the form of Global Notes,
registered in the name of DTC or its nominee Cede & Co., (a) all payments of
interest on and principal of the Notes shall be delivered only to DTC or Cede &
Co., (b) all notices delivered by the Company or the Trustee pursuant to the
Indenture shall be delivered only to DTC or Cede & Co. and (c) all rights of the
registered owners of Notes under the Indenture, including, without limitation,
voting rights, rights to approve, waive or consent, and rights to transfer and
exchange Notes, shall be rights of DTC or Cede & Co. THE BENEFICIAL OWNERS OF
THE NOTES MUST RELY ON THE PARTICIPANTS OR INDIRECT PARTICIPANTS FOR
S-4
<PAGE> 6
TIMELY PAYMENTS AND NOTICES AND FOR OTHERWISE MAKING AVAILABLE TO THE BENEFICIAL
OWNER RIGHTS OF A REGISTERED OWNER. NO ASSURANCE CAN BE PROVIDED THAT IN THE
EVENT OF BANKRUPTCY OR INSOLVENCY OF DTC, A PARTICIPANT OR AN INDIRECT
PARTICIPANT THROUGH WHICH A BENEFICIAL OWNER HOLDS INTERESTS IN THE NOTES,
PAYMENT WILL BE MADE BY DTC, SUCH PARTICIPANT OR SUCH INDIRECT PARTICIPANT ON A
TIMELY BASIS.
THE COMPANY AND THE TRUSTEE WILL NOT HAVE ANY RESPONSIBILITY, OBLIGATION OR
LIABILITY TO ANY PARTICIPANTS, TO ANY INDIRECT PARTICIPANT OR TO ANY BENEFICIAL
OWNER WITH RESPECT TO (1) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, CEDE &
CO., ANY PARTICIPANT OR ANY INDIRECT PARTICIPANT, (2) THE PAYMENT BY DTC OR ANY
PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL
OF OR INTEREST ON THE NOTES, (3) ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE
GIVEN TO REGISTERED OWNERS OF NOTES UNDER THE INDENTURE OR (4) ANY CONSENT GIVEN
OR OTHER ACTION TAKEN BY DTC AS THE REGISTERED OWNER OF THE NOTES, OR BY
PARTICIPANTS AS ASSIGNEES OF DTC AS THE REGISTERED OWNER OF EACH ISSUE OF NOTES.
THE RULES APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND THE PROCEDURES OF DTC TO BE FOLLOWED IN DEALING WITH
PARTICIPANTS AND INDIRECT PARTICIPANTS ARE ON FILE WITH DTC. NONE OF THE
COMPANY, THE TRUSTEE OR ANY PAYING AGENT WILL HAVE ANY RESPONSIBILITY FOR THE
PERFORMANCE BY THE DEPOSITARY, PARTICIPANTS OR INDIRECT PARTICIPANTS OF THEIR
RESPECTIVE OBLIGATIONS UNDER THE RULES AND PROCEDURES GOVERNING THEIR
OPERATIONS.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
If the Depositary is at any time unwilling or unable to continue as
Depositary and a successor Depositary is not appointed by the Company within 90
days, the Company will issue individual Notes in definitive form in exchange for
the Global Notes. In addition, if an Event of Default with respect to the Notes
shall have occurred and be continuing, the Company may at any time and at its
sole discretion determine not to have the Notes in the form of Global Notes, and
in such event, will issue individual Notes in definitive form in exchange for
the Global Notes. In any of the foregoing instances, the Company will issue
Notes in definitive form equal in aggregate principal amount to the Global
Notes, in such names and in such principal amounts as the Depositary shall
direct. Notes so issued in definitive form will be issued as fully registered
Notes in denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest on Global Notes will be
made by the Company in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, while the
Notes are registered in the name of the Depositary or its nominee, the Notes
will trade in the Depositary's Same-Day Funds Settlement System, and secondary
market trading activity in the Notes will therefore be required by the
Depositary to settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
LEGAL OPINIONS
Certain matters relating to the legality of the Notes offered hereby will
be passed on for the Company by Pillsbury Madison & Sutro LLP and for the
Underwriters by Cleary, Gottlieb, Steen & Hamilton.
S-5
<PAGE> 7
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
dated October 2, 1996 (the "Underwriting Agreement"), between the Company and
Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J. P.
Morgan Securities Inc. and Salomon Brothers Inc, as representatives of the
several Underwriters (the "Representatives"), the Company has agreed to sell to
each of the Underwriters named below, and each of such Underwriters has
severally agreed to purchase, the principal amount of Notes set forth opposite
its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
------------------------------------------------------------------- ----------------
<S> <C>
Lehman Brothers Inc. .............................................. $ 50,500,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated................. 50,000,000
J.P. Morgan Securities Inc. ....................................... 50,000,000
Salomon Brothers Inc............................................... 50,000,000
BA Securities, Inc. ............................................... 16,500,000
Chase Securities Inc. ............................................. 16,500,000
Citicorp Securities, Inc. ......................................... 16,500,000
------------
Total.................................................... $250,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions. The nature of the Underwriters'
obligations are such that the Underwriters are obligated to purchase all of the
Notes if any are purchased.
The Underwriters propose initially to offer the Notes directly to the
public at the public offering price set forth on the cover page of this
Prospectus Supplement and, through the Representatives, to certain dealers at
such price less a concession not in excess of .375% of the principal amount. The
Underwriters may allow and such dealers may reallow a discount not in excess of
.25% of the principal amount of the Notes to certain other dealers. After the
initial offering, the offering price and the other selling terms may be changed
by the Representatives.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Representatives that they intend to make a
market in the Notes, but that they are not obligated to do so and may
discontinue such market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Notes.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, and
to contribute to payments the Underwriters may be required to make in respect
thereof.
Certain of the Underwriters and/or certain of their affiliates perform
investment banking and/or commercial banking services for, and/or engage in
general financing and banking transactions with, the Company and certain of its
affiliates from time to time in the ordinary course of their business and may
provide such services and engage in such transactions with the Company and its
affiliates in the future.
S-6
<PAGE> 8
PROSPECTUS
$2,000,000,000
AIRTOUCH COMMUNICATIONS, INC.
COMMON STOCK, PREFERRED STOCK, DEPOSITARY SHARES, DEBT SECURITIES,
COMMON STOCK WARRANTS, PREFERRED STOCK WARRANTS, THIRD PARTY WARRANTS,
DEBT WARRANTS, STOCK PURCHASE CONTRACTS, AND STOCK PURCHASE UNITS
ATI FINANCING I
ATI FINANCING II
PREFERRED SECURITIES, GUARANTEED TO THE EXTENT SET FORTH
HEREIN BY AIRTOUCH COMMUNICATIONS, INC.
AirTouch Communications, Inc. (the "Company" or "AirTouch"), a Delaware
corporation, directly or through agents, dealers or underwriters designated from
time to time, or counterparties with whom the Company may enter into hedging
transactions (the "Counterparties"), may sell from time to time up to
$2,000,000,000 (or, if applicable, the equivalent thereof in other currencies)
in the aggregate, subject to the limitations set forth below, of (a) shares of
common stock, $0.01 par value per share, of the Company ("Common Stock"), (b)
shares of preferred stock, $0.01 par value per share, of the Company ("Preferred
Stock"), in one or more series, (c) depositary shares of the Company
("Depositary Shares"), (d) unsecured senior or subordinated debt securities of
the Company ("Debt Securities"), (e) options, warrants and other rights to
purchase shares of Common Stock ("Common Stock Warrants") or shares of Preferred
Stock ("Preferred Stock Warrants"), (f) options, warrants and other rights to
purchase shares of capital stock or debt of another corporation or other entity
("Third Party Warrants"), (g) options, warrants and other rights to purchase
Debt Securities ("Debt Warrants"), (h) stock purchase contracts ("Stock Purchase
Contracts") to purchase Common Stock or Preferred Stock or (i) stock purchase
units ("Stock Purchase Units") each representing ownership of a Stock Purchase
Contract and Preferred Stock, Debt Securities, debt obligations of third
parties, including the United States of America or agencies or instrumentalities
thereof ("U.S. Obligations") or Preferred Securities (as defined below),
securing the holder's obligation to purchase Common Stock or Preferred Stock
under the Stock Purchase Contract, or any combination of the foregoing, either
individually or as units consisting of one or more of the foregoing, each on
terms to be determined at the time of sale.
ATI Financing I and ATI Financing II, each of which is a statutory business
trust formed under the laws of the State of Delaware (each an "ATI Trust") and
the Common Securities of which will be wholly-owned by the Company at the time
of issuance of Preferred Securities, may offer preferred securities representing
undivided beneficial interests in the assets of the respective ATI Trust
("Preferred Securities"). The payment of periodic cash distributions with
respect to Preferred Securities of each of the ATI Trusts out of moneys held by
each of the ATI Trusts, and payments on liquidation, redemption or otherwise
with respect to such Preferred Securities, will be guaranteed by the Company to
the extent described herein (each a "Guarantee"). See "Description of the
Guarantees." The Company's obligations under the Guarantees are subordinate and
junior in right of payment to all other liabilities of the Company and rank pari
passu with the most senior Preferred Stock, if any, issued from time to time by
the Company. In the event an ATI Trust issues Preferred Securities or Common
Securities (as defined herein), the proceeds to such ATI Trust from such
offering will be invested in subordinated Debt Securities, which will be issued
and sold in one or more series by the Company to such ATI Trust or the trustee
of such trust. The subordinated Debt Securities purchased by an ATI Trust may be
subsequently distributed pro rata to holders of Preferred Securities or Common
Securities in connection with the dissolution of such ATI Trust upon the
occurrence of certain events as may be described in an accompanying Prospectus
Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
ADDITIONAL INFORMATION REGARDING THE SECURITIES IS SET FORTH ON THE INSIDE
FRONT COVER.
FOR A DISCUSSION OF CERTAIN RISKS ASSOCIATED WITH AN INVESTMENT IN THE
SECURITIES, SEE "GENERAL DESCRIPTION OF SECURITIES AND RISK FACTORS" ON PAGE 6.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
The date of this Prospectus is July 2, 1996
<PAGE> 9
The Common Stock, Preferred Stock, Depositary Shares, Debt Securities,
Common Stock Warrants, Preferred Stock Warrants, Third Party Warrants, Debt
Warrants, Stock Purchase Contracts, Stock Purchase Units, Preferred Securities
and Guarantees are collectively referred to herein as the "Securities."
The Company, either ATI Trust or Counterparties may sell the Securities to
or through underwriters, dealers or agents or directly to purchasers. See "Plan
of Distribution." The Company and each ATI Trust reserve the sole right to
accept and, together with their respective agents from time to time, to reject
in whole or in part any proposed purchase of Securities to be made directly or
through agents. The accompanying Prospectus Supplement sets forth, among other
things, the names of any underwriters, dealers or agents involved in the sale of
the Securities in respect of which this Prospectus is being delivered, and any
applicable fee, commission or discount arrangements with them.
------------------------
All specific terms of the offering and sale of Securities, including the
initial public offering price, aggregate amount, listing on any securities
exchange or quotation system, risk factors and the agents, dealers or
underwriters, if any, to be utilized in connection with the sale of the
Securities, will be set forth in an accompanying Prospectus Supplement
("Prospectus Supplement"). With respect to the Preferred Stock, the related
Prospectus Supplement will set forth, among other things, the specific
designation, rights, preferences, privileges and restrictions thereof, including
dividend rate or rates (or method of ascertaining the same), dividend payment
dates, voting rights, liquidation preference, and any conversion, exchange,
redemption or sinking fund provisions. With respect to the Debt Securities, the
related Prospectus Supplement will set forth, among other things, the specific
designation, rights and restrictions, including whether they are senior or
subordinated, the currencies or currency units in which they are denominated,
the aggregate principal amount, the maturity, rate (or method of ascertaining
the same) and time of payment of interest, and any conversion, exchange,
redemption or sinking fund provisions. With respect to the Common Stock
Warrants, Preferred Stock Warrants, Third Party Warrants and Debt Warrants, the
related Prospectus Supplement will contain, among other things, a description of
the Common Stock, Preferred Stock, capital stock or debt of such third party and
Debt Securities, respectively, for which each warrant will be exercisable and
the exercise price, duration, detachability, call provisions and other principal
terms of such Warrants. With respect to the Stock Purchase Contracts, the
related Prospectus Supplement will set forth, among other things, the
designation and number of shares of Common Stock or Preferred Stock issuable
thereunder, the purchase price of the Common Stock or Preferred Stock, the date
or dates on which the Common Stock or Preferred Stock is required to be
purchased by the holders of the Stock Purchase Contracts, any periodic payments
required to be made by the Company to the holders of the Stock Purchase
Contracts or visa versa, and the terms of the offering and sale thereof. In the
case of Stock Purchase Units, the related Prospectus Supplement will set forth,
among other things, the specific terms of the Stock Purchase Contracts and any
Preferred Stock, Debt Securities or debt obligations of third parties or
Preferred Securities securing the holder's obligation to purchase the Preferred
Stock or Common Stock under the Stock Purchase Contracts, and the terms of the
offering and sale thereof. With respect to the Preferred Securities, the related
Prospectus Supplement will set forth, among other things, the specific
designation, rights, preferences, privileges and restrictions thereof, including
dividend rate or rates (or method of ascertaining the same), dividend payment
dates, voting rights, liquidation preference, and any conversion, exchange,
redemption or sinking fund provisions, the terms upon which the proceeds of the
sale of the Preferred Securities will be used to purchase a specific series of
subordinated Debt Securities of the Company and the terms upon which the
obligations of the ATI Trust to make periodic cash distributions on the
Preferred Securities or make payments upon liquidation or dissolution of the ATI
Trust or upon redemption of the Preferred Securities, to the extent funds are
available therefor, shall be unconditionally guaranteed by AirTouch.
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON ANY STOCK EXCHANGE ON WHICH THE
SECURITIES ARE LISTED, IN THE OVER-THE-COUNTER MARKET, OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE> 10
INDEX OF TERMS
<TABLE>
<CAPTION>
PAGE ON
WHICH TERM
TERM IS DEFINED
- ---------------------------------------------
<S> <C>
Acquiring Party.................... 7
AirTouch........................... 1
ATI Trust.......................... 1
ATI Trustees....................... 5
Certificate of Incorporation....... 6
Code............................... 28
Commission......................... 3
Common Securities.................. 5
Common Securities Guarantees....... 25
Common Stock....................... 1
Common Stock Warrants.............. 1
Company............................ 1
Counterparties..................... 1
Debt Depositary.................... 12
Debt Securities.................... 1
Debt Warrants...................... 1
Debt Warrant Agent................. 22
Debt Warrant Agreement............. 22
Declaration........................ 5
Delaware Trustee................... 6
Deposit Agreement.................. 9
Depositary......................... 9
Depositary Receipts................ 9
Depositary Shares.................. 1
ERISA.............................. 28
Exchange Act....................... 3
Global Debt Securities............. 12
Guarantee.......................... 1
Guarantee Payments................. 25
Guarantee Trustee.................. 24
Indentures......................... 11
Mandatory Debt Securities.......... 13
Permitted Offer.................... 7
Preferred Securities............... 1
<CAPTION>
PAGE ON
WHICH TERM
TERM IS DEFINED
- ---------------------------------------------
<S> <C>
Preferred Stock.................... 1
Preferred Stock Warrants........... 1
Prospectus Supplement.............. 2
Property Trustee................... 6
Redemption Price................... 8
Registration Statement............. 4
Regular Trustees................... 5
Rights............................. 7
Rights Plan........................ 7
Securities......................... 2
Securities Act..................... 4
Senior Debt Securities............. 11
Senior Indenture................... 11
Sponsor............................ 5
Stock Purchase Contracts........... 1
Stock Purchase Units............... 1
Stock Warrants..................... 20
Stock Warrant Agent................ 20
Stock Warrant Agreement............ 20
Stock Warrant Provisions........... 20
Subordinated Debt Securities....... 11
Subordinated Indenture............. 11
Subscription Right................. 7
Third Party Company................ 12
Third Party Registration
Statement........................ 12
Third Party Securities............. 12
Third Party Warrant Agent.......... 21
Third Party Warrant Agreement...... 21
Third Party Warrants............... 1
Trust Indenture Act................ 5
Trust Securities................... 5
U.S. Dollar, Dollar, U.S. $, $..... 3
U.S. Obligations................... 1
Voluntary Debt Securities.......... 13
</TABLE>
------------------------
References herein to "U.S. dollar," "dollar," "U.S.$" or "$" are to the
lawful currency of the United States of America.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
concerning AirTouch Communications, Inc. can be inspected and copied at the
public reference facilities maintained by the Commission at its offices at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, as
well as the Regional Offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can be obtained at
prescribed rates from the Public Reference Section
3
<PAGE> 11
of the Commission at its principal office at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549. Such reports, proxy statements and other
information can also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005 and at the offices of the
Pacific Stock Exchange, Inc., 301 Pine Street, San Francisco, California 94104.
The Company and the ATI Trusts have filed with the Commission a
registration statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is hereby made to the
Registration Statement.
No separate financial statements of the ATI Trusts have been included
herein. The Company does not consider that such financial statements would be
material to holders of the Securities because: (i) the Company, a reporting
company under the Exchange Act, owns, directly or indirectly, all of the voting
securities of each ATI Trust, (ii) neither ATI Trust has any independent
operations but exists for the sole purpose of issuing securities representing
undivided beneficial interests in the assets of the ATI Trusts and investing the
proceeds thereof in subordinated Debt Securities, and (iii) the obligations of
each ATI Trust to make periodic cash payments on Preferred Securities and
payments upon liquidation or dissolution of such ATI Trust or upon redemption of
the Preferred Securities, to the extent funds are available therefor, are
unconditionally guaranteed by the Company. See "Description of the Guarantees,"
"Description of the Preferred Securities" and "Description of the Debt
Securities -- Subordinated Debt Securities."
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company pursuant
to the Exchange Act are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1995, June 30, 1995, and September 30, 1995;
(c) the Company's Current Report on Form 8-K, date of Report: June 30,
1995;
(d) the Company's Current Report on Form 8-K, date of Report: September 20,
1995;
(e) the Company's Current Report on Form 8-K, date of Report: October 10,
1995;
(f) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as amended by Form 10-K/A-1 filed June 21, 1996 and
by Form 10-K/A-2 filed June 28, 1996;
(g) the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996;
(h) the Company's Current Report on Form 8-K, date of Report: January 17,
1996;
(i) the Company's Current Report on Form 8-K, date of Report: April 5,
1996;
(j) the Company's Current Report on Form 8-K, date of Report: April 25,
1996;
(k) the Company's Current Report on Form 8-K, date of Report: May 14, 1996;
and
(l) the Company's Current Report on Form 8-K, date of Report: July 2, 1996.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the effective date of the
Registration Statement shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein
4
<PAGE> 12
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
the Prospectus has been delivered, and who makes a written or oral request, a
copy of any and all of the information that has been incorporated by reference
in the Prospectus or any Prospectus Supplement, excluding exhibits. Requests
should be directed to: Investor Relations, AirTouch Communications, Inc., One
California Street, San Francisco, California 94111, telephone number: (415)
658-2000.
AIRTOUCH COMMUNICATIONS, INC.
AirTouch Communications, Inc. is one of the world's leading wireless
telecommunications companies, with significant cellular interests in the United
States, Western Europe and Asia. In the United States, the Company controls or
shares control over cellular systems in ten of the thirty largest markets,
including Los Angeles, San Francisco, San Diego, Detroit and Atlanta.
Internationally, the Company holds significant ownership interests, with board
representation and substantial operating influence, in national cellular systems
operating in Germany, Japan, Portugal, Sweden, Belgium, Italy, Spain and South
Korea, in a regional system in Madras, India, and in systems under construction
in Poland and in Madhya Pradesh, India. The Company is also one of the leading
providers of paging services in the United States.
The Company's executive offices are located at One California Street, San
Francisco, California, 94111, telephone number (415) 658-2000.
THE ATI TRUSTS
Each of ATI Financing I and ATI Financing II is a statutory business trust
formed under Delaware law pursuant to (i) a separate declaration of trust
executed by the Company, as sponsor for such trust (the "Sponsor"), and the ATI
Trustees (as defined herein) of such trust and (ii) the filing of a certificate
of trust with the Secretary of State of the State of Delaware on September 19,
1995. The declarations will be amended and restated in their entirety (each as
so amended and restated a "Declaration") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus is a part and
will be qualified as Indentures under the Trust Indenture Act of 1939. Each ATI
Trust exists for the exclusive purposes of (i) issuing the Preferred Securities
and common securities representing undivided beneficial interests in the assets
of the Trust (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities"), (ii) investing the proceeds received by the
ATI Trust from the sale of the Trust Securities in subordinated Debt Securities
and (iii) engaging in only those other activities necessary or incidental
thereto. All of the Common Securities will be directly or indirectly owned by
the Company. The Common Securities will rank pari passu, and payments will be
made thereon pro rata, with the Preferred Securities, except that, upon an event
of default under a Declaration, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. The Company will directly or indirectly acquire Common
Securities in an aggregate liquidation amount equal to 3% of the total capital
of each ATI Trust. Each ATI Trust has a term of approximately 55 years but may
terminate earlier, as provided in each Declaration. Each ATI Trust's business
and affairs will be conducted by the trustees (the "ATI Trustees") appointed by
the Company as the direct or indirect holder of all the Common Securities. The
holder of the Common Securities of an ATI Trust will be entitled to appoint,
remove or replace any of, or increase or reduce the number of, the ATI Trustees
therefor. The duties and obligations of the ATI Trustees shall be governed by
the Declaration of such ATI Trust. A majority of the ATI Trustees of each ATI
Trust will be persons who are employees or officers of or who are affiliated
with the Company (the "Regular Trustees"). In certain limited circumstances set
forth in a Prospectus Supplement, the holders of a majority of the Preferred
Securities will be entitled to appoint one additional Regular Trustee who need
not be an employee or officer of or otherwise affiliated with ATI. One ATI
Trustee of each ATI Trust will be a financial institution that is not affiliated
with the Company and has combined capital and surplus of not less than
$100,000,000, which shall act as property trustee and as indenture trustee for
the purposes of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture
5
<PAGE> 13
Act"), pursuant to the terms set forth in a Prospectus Supplement (the "Property
Trustee"). In addition, unless the Property Trustee maintains a principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable law, one ATI Trustee of each ATI Trust will have a principal place of
business or reside in the State of Delaware (the "Delaware Trustee"). The
Company will pay all fees and expenses related to the ATI Trusts and the
offering of the Trust Securities.
The office of the Delaware Trustee for each AirTouch Trust is The Bank of
New York (Delaware), White Clay Center, Route 273, Newark, Delaware. The address
for each ATI Trust is c/o the Company, the Sponsor of each Trust, at One
California Street, San Francisco, California 94111.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the net
proceeds from the sale of Securities offered hereby will be used for general
corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to combined fixed
charges on a historical basis from continuing operations of the Company for the
periods indicated. For the purpose of calculating this ratio, earnings consist
of income before cumulative effect of accounting change and income taxes and
fixed charges included in pre-tax income, adjusted for minority interests in
income of certain consolidated wireless systems and equity in net losses and
distributed net income of certain less-than-fifty-percent-owned unconsolidated
wireless systems. Fixed charges include interest on indebtedness and the portion
of rental expense representative of the interest factor.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
THREE MONTHS ENDED ------------------------------------
MARCH 31, 1996 1995 1994 1993 1992 1991
- ------------------- --- ---- --- --- ---
<S> <C> <C> <C> <C> <C>
5.3 7.2 10.4 6.0 2.4 3.4
</TABLE>
GENERAL DESCRIPTION OF SECURITIES AND RISK FACTORS
The Company may offer under this Prospectus shares of Common Stock or
Preferred Stock, Debt Securities, Common Stock Warrants, Preferred Stock
Warrants, Third Party Warrants, Debt Warrants, Stock Purchase Contracts or Stock
Purchase Units or any combination of the foregoing, either individually or as
units consisting of one or more Securities. Each ATI Trust may offer under this
Prospectus Preferred Securities. The aggregate offering price of Securities
offered by the Company or any ATI Trust under this Prospectus will not exceed
$2,000,000,000 (or the equivalent thereof in other currencies). CERTAIN OF THE
SECURITIES TO BE OFFERED HEREBY THEMSELVES INVOLVE A HIGH DEGREE OF RISK. SUCH
RISKS WILL BE SET FORTH IN THE PROSPECTUS SUPPLEMENT RELATING TO SUCH SECURITY.
IN ADDITION, CERTAIN RISK FACTORS RELATING TO THE COMPANY'S BUSINESS ARE SET
FORTH IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE PERIOD ENDED DECEMBER
31, 1995, BEGINNING ON PAGE 4 UNDER THE HEADING "INVESTMENT CONSIDERATIONS."
DESCRIPTION OF THE COMMON STOCK
GENERAL
Under the Company's Certificate of Incorporation (the "Certificate of
Incorporation"), the Company is authorized to issue up to 1.1 billion shares of
Common Stock. The Common Stock is not redeemable, does not have any conversion
rights and is not subject to call. Holders of shares of Common Stock have no
preemptive rights to maintain their percentage of ownership in future offerings
or sales of stock of the Company. Holders of shares of Common Stock have one
vote per share in all elections of directors and on all other matters submitted
to a vote of stockholders of the Company. The holders of Common Stock are
entitled to receive dividends, if any, as and when declared from time to time by
the Board of Directors of the Company out of funds legally available therefor.
Upon liquidation, dissolution or winding up of the affairs of the Company, the
6
<PAGE> 14
holders of Common Stock will be entitled to participate equally and ratably, in
proportion to the number of shares held, in the net assets of the Company
available for distribution to holders of Common Stock. The shares of Common
Stock currently outstanding are fully paid and nonassessable.
CERTAIN CERTIFICATE OF INCORPORATION PROVISIONS
Certain provisions in the Company's Certificate of Incorporation and
By-laws may have the effect of delaying, deferring or preventing a change in
control of the Company. These provisions require that the Company's Board of
Directors be divided into three classes that are elected for staggered
three-year terms; provide that stockholders may act only at annual or special
meetings and may not act by written consent; do not permit stockholders to
cumulate votes in the election of directors; authorize the directors of the
Company to determine the size of the Board of Directors; require a vote of
66 2/3% of the shares outstanding for the amendment of any of the foregoing
provisions; require that stockholder nominations for directors be made to the
Nominating Committee of the Company prior to a meeting of stockholders or
pursuant to timely notice; provide that special meetings of stockholders may be
called only by certain officers of the Company or by the Board of Directors; and
authorize the Board of Directors to establish one or more series of Preferred
Stock, without any further stockholder approval, having rights, preferences,
privileges and limitations that could impede or discourage the acquisition of
control of the Company.
RIGHTS AGREEMENT
The Company's Board of Directors has adopted a shareholder rights plan (the
"Rights Plan") that provides for the distribution of rights ("Rights") to
holders of outstanding shares of Common Stock. Except as set forth below, each
Right, when exercisable, entitles the holder thereof to purchase from the
Company one one-hundredth of a share of Series A Preferred Stock at a price of
$80 per share, subject to adjustment. The Rights do not have voting rights.
Initially, the Rights are attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will not separate from the Common Stock and will not
be exercisable until the earlier of either (i) a public announcement that a
person or group of affiliated or associated persons has acquired, or obtained
the right to acquire, beneficial ownership of securities representing 10% or
more of the Common Stock of the Company (an "Acquiring Party") or (ii) 10 days
following the commencement of (or a public announcement of an intention to make)
a tender offer or exchange offer which would result in any person or group of
affiliated persons becoming an Acquiring Party. The Rights will expire on the
earliest of (x) September 19, 2004, (y) consummation of a merger transaction
with a person or group acquiring Common Stock pursuant to a Permitted Offer
(defined below), or (z) redemption by the Company, as described below.
In the event that a person has become an Acquiring Party, proper provision
will be made so that each holder of a Right (other than an Acquiring Party) will
thereafter have the right (the "Subscription Right") for a 60-day period to
receive, upon the exercise of the Right by the holder at the then current
exercise price, that number of shares of Common Stock of the Company (or of
Series A Preferred Stock or other common stock equivalents if all Common Stock
has been issued) which would have a market value at the time of such transaction
of two times the exercise price for each Right. This provision of the Rights
Plan does not apply, however, to a tender offer or exchange offer for all
outstanding shares of the Company's Common Stock at a price and on terms
determined by at least a majority of the disinterested members of the Board of
Directors to be in the best interests of the Company and its shareholders (a
"Permitted Offer").
If, after a public announcement has been made that a person has become an
Acquiring Party, either (i) the Company is involved in a merger or other
business combination (other than with a person who acquired shares pursuant to a
Permitted Offer) or (ii) 50% or more of the Company's assets are sold in one or
a series of transactions, proper provision will be made so that each holder of a
Right (other than an Acquiring Party) will thereafter have the right to receive,
upon the exercise of the Right by the holder at the then current exercise price,
that number of shares of Common Stock of the Company or of the acquiring company
7
<PAGE> 15
(whichever remains as the surviving corporation under the terms of the merger or
consolidation) which would have a market value at the time of such transaction
of two times the exercise price for each Right.
The Board of Directors, at its option, may at any time after a person
becomes an Acquiring Party (but not after the acquisition by such person of 50%
or more of the outstanding Common Stock) exchange on behalf of the Company all
or part of the then outstanding and exercisable Rights for shares of Common
Stock (or Common Stock equivalents), at an exchange ratio of one share of Common
Stock or equivalent for each Right.
At any time prior to the earlier to occur of either (i) a person becoming
an Acquiring Party or (ii) the expiration of the Rights, the Company may redeem
the Rights in whole, but not in part, at a price of $0.01 per Right (the
"Redemption Price"). After a person becomes an Acquiring Party, the Company may
also redeem the Rights in whole, but not in part, at the Redemption Price (x) if
such redemption is incidental to a merger or other business combination
transaction or series of transactions involving the Company but not involving an
Acquiring Party or certain other related parties or (y) following an event
giving rise to, and the expiration of the 60-day exercise period for, the
Subscription Right if and for as long as any Acquiring Party owns less than 10%
of the Company's voting securities.
The Rights Plan may have the effect of delaying, deferring or preventing a
change in control of the Company without further action of the stockholders and
therefore could have a depressive effect on the price of the Common Stock.
LISTING
The Common Stock is listed on the New York Stock Exchange and the Pacific
Stock Exchange under the symbol "ATI."
DESCRIPTION OF THE PREFERRED STOCK
Under the Certificate of Incorporation, the Board of Directors of the
Company may direct the issuance of up to 50 million shares of Preferred Stock in
one or more series and with rights, preferences, privileges and restrictions,
including dividend rights, voting rights, conversion rights, terms of redemption
and liquidation preferences, that may be fixed or designated by the Board of
Directors pursuant to a certificate of designation without any further vote or
action by the Company's stockholders. The issuance of Preferred Stock may have
the effect of delaying, deferring or preventing a change in control of the
Company. Preferred Stock, upon issuance against full payment of the purchase
price therefor, will be fully paid and nonassessable. The specific terms of a
particular series of Preferred Stock will be described in the Prospectus
Supplement relating to that series. The description of Preferred Stock set forth
below and the description of the terms of a particular series of Preferred Stock
set forth in the related Prospectus Supplement do not purport to be complete and
are qualified in their entirety by reference to the certificate of designation
relating to that series. The related Prospectus Supplement will contain a
description of certain United States Federal income tax consequences relating to
the purchase and ownership of the series of Preferred Stock described in such
Prospectus Supplement.
The rights, preferences, privileges and restrictions of the Preferred Stock
of each series will be fixed by the certificate of designation relating to such
series. A Prospectus Supplement relating to each series will specify the terms
of the Preferred Stock as follows:
(a) The maximum number of shares to constitute the series and the
distinctive designation thereof;
(b) The annual dividend rate, if any, on shares of the series, whether
such rate is fixed or variable or both, the date or dates from which
dividends will begin to accrue or accumulate and whether dividends will be
cumulative;
(c) The price at and the terms and conditions on which the shares of
the series may be redeemed, including the time during which shares of the
series may be redeemed and any accumulated dividends thereon that the
holders of shares of the series shall be entitled to receive upon the
redemption thereof;
8
<PAGE> 16
(d) The liquidation preference, if any, and any accumulated dividends
thereon, that the holders of shares of the series shall be entitled to
receive upon the liquidation, dissolution or winding up of the affairs of
the Company;
(e) Whether or not the shares of the series will be subject to
operation of a retirement or sinking fund, and, if so, the extent and
manner in which any such fund shall be applied to the purchase or
redemption of the shares of the series for retirement or for other
corporate purposes, and the terms and provisions relating to the operation
of such fund;
(f) The terms and conditions, if any, on which the shares of the
series shall be convertible into, or exchangeable for, shares of any other
class or classes of capital stock of the Company or a third party or any
series of any other class or classes, or of any other series of the same
class, including the price or prices or the rate or rates of conversion or
exchange and the method, if any, of adjusting the same;
(g) The voting rights, if any, on the shares of the series; and
(h) Any or all other preferences and relative, participating,
operational or other special rights or qualifications, limitations or
restrictions thereof.
As described under "Depositary Shares," the Company may, at its option,
elect to offer Depositary Shares evidenced by depositary receipts ("Depositary
Receipts"), each representing a fractional interest (to be specified in the
Prospectus Supplement relating to the particular series of the Preferred Stock)
in a share of the particular series of the Preferred Stock issued and deposited
with a Depositary (as defined below).
DESCRIPTION OF THE DEPOSITARY SHARES
The description set forth below and in the related Prospectus Supplement of
certain provisions of the Deposit Agreement (as defined below) and of the
Depositary Shares and Depositary Receipts does not purport to be complete and is
subject to and qualified in its entirety by reference to the forms of Deposit
Agreement and Depositary Receipts relating to each series of the Preferred Stock
which have been or will be filed with the Commission in connection with the
offering of fractional interests in such series of the Preferred Stock.
GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
Depositary to the public of receipts for Depositary Shares, each of which will
represent a fractional interest as set forth in the Prospectus Supplement
relating to a particular series of the Preferred Stock.
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $100,000,000 (the "Depositary"). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the name and
address of the Depositary. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Share will be entitled, in proportion to the applicable
fractional interest in a share of Preferred Stock underlying such Depositary
Shares, to all the rights and preferences of the Preferred Stock underlying such
Depositary Shares (including dividend, voting, redemption, conversion and
liquidation rights). The Depositary Shares will be evidenced by Depositary
Receipts issued pursuant to the Deposit Agreement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
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Upon surrender of Depositary Receipts at the office of the Depositary and
upon payment of the charges provided in the Deposit Agreement and subject to the
terms thereof, a holder of Depositary Shares is entitled to have the Depositary
deliver to such holder the whole shares of Preferred Stock underlying the
Depositary Shares evidenced by the surrendered Depositary Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever the Company redeems shares of Preferred Stock
held by the Depositary, the Depositary will redeem as of the same redemption
date the number of Depositary Shares relating to shares of Preferred Stock so
redeemed. If less than all of the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and the
Company will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Shares relating to such
Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However,
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any amendment which materially and adversely alters the rights of the existing
holders of Depositary Shares will not be effective unless such amendment has
been approved by the record holders of at least a majority of the Depositary
Shares then outstanding. A Deposit Agreement may be terminated by the Company or
the Depositary only if (i) all outstanding Depositary Shares relating thereto
have been redeemed or (ii) there has been a final distribution in respect of the
Preferred Stock of the relevant series in connection with any liquidation,
dissolution or winding up of the Company and such distribution has been
distributed to the holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay transfer and other taxes and governmental charges and such other
charges as are expressly provided in the Deposit Agreement to be for their
accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control from performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time with notice remove the
Depositary, any such resignation or removal to take effect upon the appointment
of a successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 90 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $100,000,000.
DESCRIPTION OF THE DEBT SECURITIES
GENERAL
The Company may offer under this Prospectus Senior Debt Securities (as
defined below) or Subordinated Debt Securities (as defined below) or any
combination of the foregoing. The Debt Securities will represent unsecured
general obligations of the Company, and will either (i) rank prior to all
subordinated indebtedness of the Company and pari passu with all other unsecured
indebtedness of the Company (the "Senior Debt Securities") or (ii) be
subordinate in right of payment to certain other debt obligations of the Company
(the "Subordinated Debt Securities"). The Senior Debt Securities and the
Subordinated Debt Securities may be issued under indentures substantially in the
forms filed as exhibits to the Registration Statement. In this Prospectus, the
indenture relating to Senior Debt Securities, including any supplements or
amendments thereto, is referred to as the "Senior Indenture," the indenture
relating to Subordinated Debt Securities, including any supplements or
amendments thereto, is referred to as the "Subordinated Indenture," and the
Senior Indenture and the Subordinated Indenture are collectively referred to as
"Indentures." None of the Indentures will limit the amount of Debt Securities
that may be issued thereunder, and each Indenture
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will provide that Debt Securities may be issued thereunder up to an aggregate
principal amount authorized from time to time by the Company and may be payable
in any currency or currency unit designated by the Company or in amounts
determined by reference to an index. The following summary of certain provisions
in the Indentures pursuant to which Debt Securities are issued or in the Debt
Security, as the case may be, does not purport to be complete. Such summaries
make use of certain terms defined in the Indentures and are qualified in their
entirety by reference to the applicable form of Indenture or Debt Security,
respectively, filed as an exhibit to the Registration Statement.
Reference is made to the applicable Prospectus Supplement for any series of
Debt Securities for the following terms: (1) the designation of such series of
Debt Securities, (2) the aggregate principal amount of such series of Debt
Securities, (3) the stated maturity or maturities for payment of principal of
such series of Debt Securities and any sinking fund or analogous provisions, (4)
the rate or rates at which such series of Debt Securities shall bear interest or
the method of calculating such rate or rates of interest and the interest
payment dates for such series of Debt Securities, (5) the currencies, currency
unit or index in or according to which principal of and interest and any premium
on such series of Debt Securities shall be payable (if other than United States
Dollars), (6) the redemption date or dates, if any, and the redemption price or
prices and other applicable redemption provisions for such series of Debt
Securities, (7) whether such series of Debt Securities shall be issued as one or
more global debt securities ("Global Debt Securities"), and, if so, the identity
of the Depositary (the "Debt Depositary") for such Global Debt Security or Debt
Securities, (8) if not issued as one or more Global Debt Securities, the
denominations in which such series of Debt Securities shall be issuable (if
other than denominations of $1,000 and any integral multiple thereof), (9) the
date from which interest on such series of Debt Securities shall accrue, (10)
the basis upon which interest on such series of Debt Securities shall be
computed (if other than on the basis of a 360-day year of twelve 30-day months),
(11) if other than the principal amount thereof, the portion of the principal
amount of such series of Debt Securities which shall be payable upon declaration
of acceleration of the maturity thereof pursuant to the Indenture, (12) if other
than the Trustee, the person or persons who shall be registrar for such series
of Debt Securities, (13) the Record Date, (14) the identity of the Trustee, (15)
any covenants of the Company with respect to a series of Debt Securities, (16)
whether the Debt Securities are convertible into or exchangeable for Securities,
or securities of the Company or Third Party Securities (as herein defined), and
the terms of such conversion or exchange, (17) whether the Debt Securities will
be issued at an Original Issue Discount and a description of such discount, and
(18) any other term or provision relating to such series of Debt Securities
which is not inconsistent with the provisions of the Indenture.
Except as described in this Prospectus or the accompanying Prospectus
Supplement, the Indentures do not contain any covenants specifically designed to
protect holders of the Debt Securities against a reduction in the
creditworthiness of the Company in the event of a highly leveraged transaction
or to prohibit other transactions which may adversely affect holders of the Debt
Securities.
In the event Debt Securities of any series are to be offered that are
convertible into or exchangeable for securities of third parties ("Third Party
Securities"), the Prospectus Supplement will identify the Third Party
Securities, the Company of such Third Party Securities (the "Third Party
Company"), all documents filed by the Third Party Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act since the end of such Third Party
Company's last completed fiscal year for which a Form 10-K annual report has
been filed and the document or documents filed under the Exchange Act which
contain a description of the Third Party Securities being sold or, if no such
document or documents exist, the Prospectus Supplement will include a
description of the Third Party Securities being sold. Third Party Securities
will only be securities of third parties that are eligible to use Form S-3 (or
any successor form) for primary offerings under the rules and regulations of the
Commission or securities that are registered under Section 12 of the Exchange
Act. To the extent the Securities Act requires registration of the Third Party
Securities by the Third Party Company, such as where the Third Party Company is
an affiliate of the Company, in connection with the issuance, conversion and/or
exchange of such Debt Securities, the Company will cause the Third Party Company
to file a third party registration statement ("Third Party Registration
Statement") under the Securities Act. Where the conversion and/or exchange of
the Debt Securities would require an effective Third Party Registration
Statement at the time of such exchange or conversion, the exchange or conversion
will be subject to the
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effectiveness of such registration statement. For example, Debt Securities that
are convertible into or exchangeable for Third Party Securities may be
convertible or exchangeable by their terms at the election of the Company or
mandatorily at the expiration of a specified period or at other times under
specified circumstances ("Mandatory Debt Securities") or may be convertible or
exchangeable by their terms at the election of the Debt Holder at any time
during a specified period or periods or on a specified date or dates ("Voluntary
Debt Securities"). In the case of both Mandatory Debt Securities and Voluntary
Debt Securities, if the Company is an affiliate of the Third Party Company, the
Third Party Securities into which they may be converted or for which they may be
exchanged will be the subject of a registration statement filed under the
Securities Act by the Third Party Company prior to any offer of such Mandatory
or Voluntary Debt Securities, and a Third Party Registration Statement with
respect to such Third Party Securities will have been declared effective prior
to any sale of such Mandatory or Voluntary Debt securities, except in the case
of Voluntary Debt Securities that are not immediately exercisable or
convertible, in which case, such a Third Party Registration Statement would have
to be effective, absent an exemption, when the Debt Holder elects to convert
such Voluntary Debt Securities into or exchange them for Third Party Securities.
EVENTS OF DEFAULT
The Indentures define an "Event of Default" with respect to any particular
series of the Debt Securities as being any one of the following events: (1)
default in the payment of interest on any Debt Security of such series and the
continuance of such default for a period of 30 days, or, in the case of the
Subordinated Debt Indenture, for a period of 90 days, or (2) default in the
payment of all or any part of the principal of or any premium on any Debt
Security of such series when due whether at maturity, by proceedings for
redemption, by declaration or otherwise, or (3) default in the satisfaction of
any sinking fund payment obligation relating to such series of Debt Securities,
when due and payable, or (4) failure on the part of the Company to observe or
perform in any material respect any other agreements or covenants contained in
the Debt Securities of such series, the Indenture or any supplemental indenture
relating thereto, specifically contained for the benefit of the Holders of the
Debt Securities of such series, and continuance of the default for a period of
90 days after notice has been given to the Company by the Trustee, or to the
Company and the Trustee by the Holders of not less than 25% in principal amount
of the Debt Securities of such series and all other series so benefited (all
series voting as one class) at the time outstanding under the Indenture, or (5)
certain events of bankruptcy, insolvency or reorganization involving the
Company. An Event of Default with respect to a series of Debt Securities will
not necessarily constitute an Event of Default with respect to any other series
of Debt Securities. Except as may be described in the accompanying Prospectus
Supplement, the Indentures do not contain any Events of Default other than those
referred to herein.
If an Event of Default occurs with respect to the Debt Securities of any
one or more particular series and is continuing, the Trustee, by notice to the
Company, or the Holders of not less than 25% in principal amount of the
outstanding Debt Securities of each such series, by notice in writing to the
Company and to the Trustee, may declare the principal amount (or, if the Debt
Securities of any such series are original issue discount Debt Securities, such
portion of the principal amount as may be specified in the terms of such series)
of all the Debt Securities of such series, together with any accrued interest,
to be immediately due and payable.
The foregoing provisions, however, are subject to the condition that if, at
any time after the principal amount of the Debt Securities of any one or more
series (or of all the Debt Securities, as the case may be) shall have been so
declared due and payable, and before any judgment or decree for the payment of
moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay any
matured installments of interest upon all the Debt Securities of such series (or
upon all the Debt Securities, as the case may be) and the principal of any and
all Debt Securities of such series (or of any and all the Debt Securities, as
the case may be) which shall have become due otherwise than by declaration (with
interest on overdue installments of interest to the extent permitted by law and
on such principal at the rate or rates of interest borne by, or prescribed
therefor in, the Debt Securities of such series to the date of such payment or
deposit) and the amounts payable to the Trustee under the Indenture and any and
all defaults under the Indenture with respect to Debt Securities of such series
(or all Debt Securities, as the case may be), other than the non-payment of
principal of and any accrued interest on Debt
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Securities of such series (or any Debt Securities, as the case may be) which
shall have become due by declaration shall have been cured, remedied or waived
as provided in the Indenture, then and in every such case the Holders of a
majority in principal amount of the Debt Securities of such series (or of all
the Debt Securities, as the case may be) then outstanding (such series or all
series voting as one class if more than one series are so entitled) by written
notice to the Company and to the Trustee, may rescind and annul such declaration
and its consequences; but no such rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair any right consequent
thereon.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal or any premium or interest on the Debt Securities of the series to
which the default relates or to enforce the performance of any provision of such
series of Debt Securities or the Indenture.
The Holders of a majority in principal amount of the outstanding Debt
Securities of any series may waive any past Event of Default with respect of
such series and its consequences, except a continuing default in the payment of
the principal of or any redemption premium or interest on such Debt Securities
or in the satisfaction of any sinking fund obligation relating to such series of
Debt Securities or in respect of a covenant or provision of the Indenture which
cannot be modified or amended without the consent of the Holder of each Debt
Security so affected.
MODIFICATIONS OF THE INDENTURE
Each of the Indentures provides that the Company and the Trustee may enter
into a supplemental indenture to amend the Indenture or the Debt Securities
without the consent of any Debt Security holder: (1) to cure any ambiguity,
defect or inconsistency; (2) to permit a successor to assume the Company's
obligations under the Indenture as permitted by the Indenture; (3) to eliminate
or change any provision of the Indenture if such does not adversely affect the
rights of any outstanding Debt Securityholder; (4) to provide for the issuance
and establish the terms and conditions of Debt Securities of any series; (5) to
add to the covenants of the Company further covenants, restrictions or
conditions for the protection of the Holders of all or any particular series of
Debt Securities and to make the occurrence, or the occurrence and continuance,
of a default in any such additional covenants, restrictions or conditions an
Event of Default permitting the enforcement of all or any of the several
remedies provided in the Indenture; or (6) to appoint, at the request of the
Trustee, a successor Trustee for a particular series of Debt Securities to act
as such pursuant to the provisions of the Indenture.
Each of the Indentures and the rights and obligations of the Company and of
the Holders of the Debt Securities may be modified or amended at any time with
the consent of the Holders of not less than a majority in aggregate principal
amount of all series of the Debt Securities at the time outstanding under such
Indenture and affected by such modification or amendment (voting as one class);
provided, however, that without the consent of the holder of the Debt Securities
affected, no such modification or amendment shall, among other things, change
the fixed maturity or redemption date thereof, reduce the rate of interest
thereon or alter the method of determining such rate of interest, extend the
time of payment of interest, reduce the principal amount thereof, reduce any
premium payable upon the redemption thereof, or change the coin or currency in
which any Debt Securities or the interest thereon are payable or impair the
right to institute suit for the enforcement of any such payment, or reduce the
percentage of the Holders of such Debt Securities whose consent is required for
any such modification or amendment or change the time of payment or reduce the
amount of any minimum sinking account or fund payment or modify any provisions
of the Indenture relating to the amendment thereof or the creation of a
supplemental indenture (unless the change increases the rights of the Holders).
DEFEASANCE AND DISCHARGE
All liability of the Company in respect to any outstanding Debt Securities
shall cease, terminate and be completely discharged if the Company shall (a)
deposit with the Trustee, in trust, at or before maturity, lawful money or
direct obligations of the United States of America (or in the case of Debt
Securities denominated in
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a currency other than U.S. Dollars, of the government that issued such
currency), or obligations the principal of and interest on which are guaranteed
by the United States of America (or in the case of Debt Securities denominated
in a currency other than U.S. Dollars, guaranteed by the government that issued
such currency), in such amounts and maturing at such times that the proceeds of
such obligations to be received upon the respective maturities and interest
payment dates will provide funds sufficient to pay the principal of and interest
and any premium to maturity or to the redemption date, as the case may be, with
respect to such Debt Securities, and (b) deliver to the Trustee an opinion of
counsel to the effect that the Holders of such Debt Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such discharge. All obligations of the Company to comply with certain covenants
applicable to any outstanding Debt Securities, including those described under
"Senior Debt Securities" below, shall cease if the Company shall deposit with
the Trustee, in trust, at or before maturity, lawful money or direct obligations
of the United States of America (or in the case of Debt Securities denominated
in a currency other than U.S. Dollars, of the government that issued such
currency), or obligations the principal of and interest on which are guaranteed
by the United States of America (or in the case of Debt Securities denominated
in a currency other than U.S. Dollars, by the government that issued such
currency), in such amounts and maturing at such times that the proceeds of such
obligations to be received upon the respective maturities and interest payment
dates will provide funds sufficient to pay the principal of and interest and any
premium to maturity or to the redemption date, as the case may be, with respect
to such Debt Securities.
CONCERNING THE TRUSTEE
The Trustee for the Senior Debt Securities and the Trustee for the
Subordinated Debt Securities will be identified in the relevant Prospectus
Supplement. In certain instances, the Company or the Holders of a majority of
the then outstanding principal amount of the Debt Securities issued under an
Indenture may remove the Trustee and appoint a successor Trustee. The Trustee
may become the owner or pledgee of any of the Debt Securities with the same
rights, subject to certain conflict of interest restrictions, it would have if
it were not the Trustee. The Trustee and any successor trustee must be a
corporation organized and doing business as a commercial bank or trust company
under the laws of the United States or of any state thereof or of the District
of Columbia, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $100,000,000 and subject to
examination by federal or state or District of Columbia authority. From time to
time and subject to applicable law relating to conflicts of interest, the
Trustee may also serve as Trustee under other indentures relating to Debt
Securities issued by the Company or affiliated companies and may engage in
commercial transactions with the Company and affiliated companies.
SENIOR DEBT SECURITIES
The Senior Debt Securities will be unsecured and will rank equally with all
other unsecured and unsubordinated indebtedness for borrowed money of the
Company.
The following covenants will apply to Senior Debt Securities issued under
the Senior Indenture unless otherwise provided in the Prospectus Supplement for
such Senior Debt Securities:
Restrictions on Indebtedness of Restricted Subsidiaries
Under the terms of the Senior Indenture, the Company may not permit any
Restricted Subsidiary to create, assume, incur or guarantee any Indebtedness
other than the following: (i) Indebtedness of a Restricted Subsidiary incurred
after the date of the Senior Indenture, provided that immediately after the
incurrence of such Indebtedness the aggregate amount of Indebtedness incurred
and outstanding pursuant to this exception (i) and not otherwise permitted
pursuant to the Senior Indenture does not exceed 5% of Consolidated Net Tangible
Assets; (ii) Indebtedness of any entity (other than a PCS Entity) existing at
the time such entity becomes a Restricted Subsidiary, such entity is merged into
or consolidated with the Company or a Restricted Subsidiary, or the Company or a
Restricted Subsidiary acquires all or substantially all of the assets of such
entity, provided that immediately after the incurrence of such Indebtedness the
aggregate amount of Indebtedness incurred and outstanding pursuant to this
exception (ii) and not otherwise permitted pursuant to the Senior Indenture does
not exceed 5% of Consolidated Net Tangible Assets; (iii) Indebtedness pursuant
to capital leases (including any Japanese leveraged lease or similar
cross-border lease transaction), provided that immediately after the incurrence
of such Indebtedness, the aggregate amount of Indebtedness incurred and
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outstanding pursuant to this exception (iii) and not otherwise permitted
pursuant to the Senior Indenture does not exceed 10% of Consolidated Net
Tangible Assets; (iv) Indebtedness owed to the Company or any Subsidiary of the
Company or to any partner or stockholder having at least a 10% ownership
interest in such Restricted Subsidiary; (v) Indebtedness of any Restricted
Subsidiary existing on the date of the Senior Indenture or owing pursuant to the
Zero Coupon Convertible Subordinated Notes due 1999 originally issued by
Cellular Communications, Inc.; (vi) Indebtedness of any PCS Entity existing at
the time such PCS Entity becomes a Restricted Subsidiary, such PCS Entity is
merged into or consolidated with the Company or a Restricted Subsidiary, or the
Company or a Restricted Subsidiary acquires all or substantially all of the
assets of such PCS Entity; or (vii) Indebtedness of any Restricted Subsidiary
constituting any replacement, extension or renewal of any Indebtedness incurred
pursuant to exceptions (i) through (vi) above (to the extent such Indebtedness
is not increased).
Restrictions on Liens
Under the terms of the Senior Indenture, the Company will not, and will not
permit any Restricted Subsidiary to, incur any Indebtedness secured by a Lien on
any shares of stock, indebtedness or other obligations of a Subsidiary or any
Principal Property of the Company or a Restricted Subsidiary (such stock,
indebtedness and Principal Property being collectively referred to as
"Property"), unless the Company secures or causes such Restricted Subsidiary to
secure the outstanding Senior Debt Securities (together with, if the Company
shall so determine, any other Indebtedness of the Company or such Restricted
Subsidiary then existing or thereafter created ranking equally with the Senior
Debt Securities, including guarantees of indebtedness of others) equally and
ratably with (or prior to) such Indebtedness, so long as such Indebtedness shall
be so secured, provided such restrictions shall not apply in the case of
Indebtedness secured by: (i) Liens on Property existing at the time of
acquisition thereof or to secure the payment of all or any part of the purchase
price thereof or to secure any Indebtedness incurred prior to, at the time of or
within 180 days after the acquisition of such Property for the purpose of
financing all or any part of the purchase price thereof; (ii) Liens securing
Indebtedness owing by a Restricted Subsidiary to the Company or any Subsidiary
of the Company; (iii) Liens on Property of any entity, or on the stock,
indebtedness or other obligations of such entity, existing at the time (a) such
entity becomes a Restricted Subsidiary, (b) such entity is merged into or
consolidated with the Company or a Restricted Subsidiary or (c) the Company or a
Restricted Subsidiary acquires all or substantially all of the assets of such
entity; provided that no such Lien extends to any other Property and provided
that such Indebtedness is otherwise permitted pursuant to the Senior Indenture;
(iv) Liens on Property to secure any Indebtedness incurred to provide funds for
all or any part of the cost of development of or improvements to such Property;
(v) any Lien on Property to secure Indebtedness or other indebtedness incurred
in connection with any financing undertaken in accordance with Section 103 of
the Internal Revenue Code of 1986, as amended, or any replacement law; (vi)
Liens on the property of the Company or any of its Subsidiaries securing (a)
nondelinquent performance of bids or contracts (other than for borrowed money,
obtaining of advances or credit or the securing of debt), (b) contingent
obligations on surety and appeal bonds, and (c) other nondelinquent obligations
of a like nature; in each case, incurred in the ordinary course of business;
(vii) Liens securing obligations in respect of capital leases on assets subject
to such leases (including any Japanese leveraged lease or similar cross-border
lease transaction), provided that such Indebtedness is otherwise permitted
pursuant to the Senior Indenture; and provided further that (a) any such Lien
attaches to such property within 180 days after the acquisition thereof and (b)
such Lien attaches solely to the property so acquired; (viii) Liens arising
solely by virtue of any statutory or common law provision relating to banker's
liens, rights of set-off or similar rights and remedies as to deposit account or
other funds, provided that such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the Federal
Reserve Board and such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution; (ix) Liens on
personal property, other than shares of stock or Indebtedness of any Restricted
Subsidiary, to secure loans maturing not more than one year from the date of the
creation thereof; (x) Liens on the stock, indebtedness or other obligations of
any International Subsidiary, provided that such Liens do not secure
Indebtedness of the Company or of any Restricted Subsidiary other than
Indebtedness of the type described in clause (v) of the definition of
Indebtedness; and (xi) any renewal, extension, or replacement (in whole or in
part) of any Lien permitted pursuant to exceptions (i) through (x)
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above or of any Indebtedness secured thereby, provided that such extension,
renewal or replacement Lien shall be limited to all or any part of the same
Property that secured the Lien extended, renewed or replaced (plus improvements
on such Property). Notwithstanding the foregoing restrictions, the Company may,
and may permit any Restricted Subsidiary to, issue, assume or guarantee
Indebtedness secured by Liens on Property which are not otherwise excepted
without equally and ratably securing the Senior Debt Securities, provided that
the sum of all such Indebtedness then being issued, assumed or guaranteed does
not exceed 10% of the Consolidated Net Tangible Assets prior to the time such
Indebtedness was issued, assumed or guaranteed.
Restrictions on Sale and Leaseback Transactions
Under the terms of the Senior Indenture, the Company will not, and will not
permit any Restricted Subsidiary to, enter into any arrangement (except for
temporary leases for a term of not more than three years, or except for sale or
transfer and leaseback transactions involving the acquisition or improvement of
Principal Properties provided that the amount of consideration received at the
time of sale or transfer by the Company or such Restricted Subsidiary for the
property so sold or transferred shall be applied as described in subsection (ii)
below) with any bank, insurance company or other lender or investor, or to which
any such lender or investor is party, providing for the leasing to the Company
or any Restricted Subsidiary of any Principal Property which has been or is to
be sold or transferred by the Company or any Restricted Subsidiary to such
lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such property unless
either (i) the Company or any Restricted Subsidiary could create Indebtedness
secured by a Lien under the provisions related to restrictions on Liens on the
property to be leased without equally and ratably securing the Senior Debt
Securities, or (ii) the Company within the 12 months preceding such sale or
transfer or the 12 months following such sale or transfer, regardless of whether
such sale or transfer may have been made by the Company or by a Restricted
Subsidiary, has applied or applies an amount equal to the greater of (a) the net
proceeds of the sale of the property leased pursuant to such arrangement or (b)
the fair value of the property so leased at the time of entering into such
arrangement (1) to the voluntary retirement of Indebtedness of the Company or of
a Restricted Subsidiary or Indebtedness of a Subsidiary guaranteed by the
Company which debt matures by its terms more than one year after the date on
which it was originally incurred (collectively herein called "funded debt");
provided that there shall be credited against the amount required by subsection
(ii) to be applied to the retirement of funded debt an amount equal to (x) the
principal amount of any Senior Debt Securities delivered within the 12 months
preceding such sale or transfer or the 12 months following such sale or transfer
to the Trustee for voluntary retirement and cancellation, plus (y) the principal
amount of funded debt, other than Senior Debt Securities, voluntarily retired by
the Company within 12 months before or after such sale; or (2) to the
acquisition, development or improvement of a Principal Property or Principal
Properties.
Corporate Existence of the Company; Consolidation, Merger, Sale or Transfer
Under the Senior Indenture, so long as any of the Senior Debt Securities
are outstanding, the Company will maintain its corporate existence, will not
dissolve, sell or otherwise dispose of all or substantially all of its assets
and will not consolidate with or merge into another entity or permit one or more
other entities to consolidate with or merge into it; provided that the Company
may, without violating the Senior Indenture, consolidate with or merge into
another entity or permit one or more other entities to consolidate with or merge
into it, or sell or otherwise transfer to another entity all or substantially
all of its assets as an entirety and thereafter dissolve, if the surviving,
resulting or transferee entity, as the case may be, (i) shall be incorporated
and existing under the laws of one of the States of the United States of
America, (ii) assumes, if such entity is not the Company, all of the obligations
of the Company under the Senior Indenture and (iii) is not, after such
transaction, otherwise in default under any provision of the Senior Indenture.
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Definitions.
The following terms have the meanings set forth below when used in this
Prospectus Supplement.
"Attributable Debt" means, when used in connection with a sale and
leaseback transaction, at any date as of which the amount thereof is to be
determined, the lesser of (i) the fair value of the property subject to the
transaction (as determined by the Board of Directors) or (ii) the present value
of rent for the remaining term of the lease. Rent shall be discounted to present
value at the actual percentage rate inherent in such lease as determined in good
faith by the Company, compounded semiannually. Rent is the lesser of (1) rent
for the remaining term of the lease assuming it is not terminated or (2) rent
from the date of determination until the first possible termination date plus
the termination payment then due, if any. The remaining term of a lease includes
any period for which the lease has been extended. Rent does not include (a)
amounts for maintenance, repairs, insurance, taxes, assessments and similar
charges or (b) contingent rent, such as that based on sales. Rent may be reduced
by rent that any sublessee must pay from the date of determination for all or
part of the same property.
"Consolidated Net Tangible Assets" means the consolidated total assets of
the Company and its subsidiaries as reflected in the Company's most recent
balance sheet prepared in accordance with generally accepted accounting
principles, less (i) current liabilities (excluding current maturities of
long-term debt and obligations under capital leases) and (ii) goodwill,
trademarks, patents, and minority interests of others.
"Domestic Cellular Joint Venture" means the partnership or other joint
venture to be formed by the Company and U S WEST, Inc., or their Subsidiaries,
pursuant to the Amended and Restated Joint Venture Organization Agreement dated
September 30, 1995, as amended from time to time, for the purposes of owning and
operating certain of the parties' assets used in the provision of Domestic
Cellular Service.
"Domestic Cellular Service" means the provision of wireless telephony
service on the 800 MHz bands in the United States.
"Indebtedness" means, with respect to any Person, the aggregate amount of,
without duplication: (i) all obligations for borrowed money; (ii) all
obligations evidenced by debentures, notes or other similar instruments; (iii)
all obligations to pay the deferred purchase price of property or services,
except trade accounts payable, accrued commissions and other similar accrued
current liabilities in respect of such obligations, in any case not overdue,
arising in the ordinary course of business; (iv) all obligations of such Person
under any lease (or other agreement conveying the right to use) of property by a
Person as lessee or guarantor which would, in conformity with generally accepted
accounting principles, be required to be accounted for as a capital lease on the
balance sheet of that Person; (v) all obligations or liabilities of others
secured by a Lien on any asset owned by such Person or Persons whether or not
such obligation or liability is assumed (the amount of such Indebtedness being
deemed to be the lesser of the value of such property or assets or the amount of
the Indebtedness so secured); (vi) all reimbursement obligations of such Person
or Persons in respect of any letters of credit or bankers' acceptances related
to Indebtedness of such Person or another Person; (vii) all Attributable Debt;
(viii) Redeemable Stock and (ix) all guarantees of Indebtedness of other
Persons. The term "Indebtedness" shall not include any obligations of a Person
under a Swap Contract.
"International Subsidiary" means any subsidiary of the Company not engaged
in the provision of Domestic Cellular Service and the principal business of
which is conducted, or the principal assets of which are located, outside of the
United States.
"Lien" means any lien, mortgage, pledge, security interest, charge, or
encumbrance of any kind (including any conditional sale or other title retention
agreement or any lease in the nature thereof) and any agreement to give or
refrain from giving any lien, mortgage, pledge, security interest, charge, or
other encumbrance of any kind.
"PCS Entity" means any Person primarily engaged in the business of personal
communications services, defined as radio communications operating in the
"broadband PCS" bands, namely the 1850-1890 MHz, 1930-1970 MHz, 2130-2150 MHz,
and 2180-2200 MHz bands, including Persons who primarily provide support
services or equipment for personal communications services.
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"Principal Property" means land, land improvements, buildings and
associated equipment or property owned or leased pursuant to a capital lease and
used by the Company or a Restricted Subsidiary primarily for providing Domestic
Cellular Service and located within the United States of America and having a
book value in excess of 2% of Consolidated Net Tangible Assets, as of the date
of such determination, but not including any such property financed through the
issuance of tax exempt governmental obligations, or any such property that has
been determined by resolution of the Board of Directors of the Company not to be
of material importance to the respective businesses conducted by the Company and
its Restricted Subsidiaries.
"Redeemable Stock" means, with respect to any Person, any stock that by its
terms matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise.
"Restricted Subsidiary" means (i) any Subsidiary of the Company which (a)
has substantially all of its property in the United States, (b) is primarily
engaged in the business of providing Domestic Cellular Service and (c) is in
existence on the date of the Senior Indenture, or is designated by the Board of
Directors of the Company after such date as a Restricted Subsidiary, and (ii)
the Domestic Cellular Joint Venture and its Subsidiaries.
"Subsidiary" of any specified Person means (i) a corporation, at least a
majority of the outstanding securities of which having ordinary voting power
(other than securities having such power only by reason of the happening of a
contingency) is at such time owned by such Person or by one or more Subsidiaries
of such Person; or (ii) a partnership, joint venture, association, or other
business entity, if in accordance with generally accepted accounting principles
such entity is consolidated with such Person for financial statement purposes.
"Swap Contract" means any agreement relating to any transaction that is a
rate swap, basis swap, forward rate transaction, commodity option, equity or
equity index swap or option, bond, note or bill option, interest rate option,
forward transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing, provided that such Swap Contract was entered into for the purpose of
managing risks associated with liabilities, commitments or assets of the Company
or any Subsidiary and not for speculation.
SUBORDINATED DEBT SECURITIES
Subordinated Debt Securities may be issued from time to time in one or more
series under the Subordinated Debt Indenture. The Subordinated Debt Securities
will be subordinated and junior in right of payment to certain other
indebtedness of the Company to the extent set forth in the applicable Prospectus
Supplement.
In the event the Subordinated Debt Securities are issued to an ATI Trust or
a trustee of such trust in connection with the issuance of Trust Securities by
such ATI Trust, such Subordinated Debt Securities subsequently may be
distributed pro rata to the Holders of such Trust Securities in connection with
the dissolution of such ATI Trust upon the occurrence of certain events
described in the Prospectus Supplement relating to such Trust Securities. Only
one series of Subordinated Debt Securities will be issued to an ATI Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such ATI Trust.
Unless otherwise provided in the applicable Prospectus Supplement, if
Subordinated Debt Securities are issued to an ATI Trust or a trustee of such
trust in connection with the issuance of Trust Securities by such ATI Trust and
(i) there shall have occurred an event that would constitute an Event of
Default, (ii) the Company shall be in default with respect to its payment of any
obligations under the related Preferred Securities Guarantee or Common
Securities Guarantee or (iii) the Company shall have given notice of its
election to defer payments of interest on such Subordinated Debt Securities by
extending the interest payment period as provided in the Indenture and such
period, or any extension thereof, shall be continuing, then (a) the Company
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase or make a liquidation payment with respect to, any of
its capital stock, and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any Debt
Securities which rank junior to such Subordinated Debt Securities; provided that
the foregoing restriction does
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not apply to any stock dividends paid by the Company where the dividend stock is
of the same class as that of the stock held by the Holders receiving the
dividend.
DESCRIPTION OF THE WARRANTS TO PURCHASE COMMON OR PREFERRED STOCK
The following statements with respect to the Common Stock Warrants and
Preferred Stock Warrants (collectively, the "Stock Warrants") are summaries of,
and subject to, the detailed provisions of a warrant agreement ("Stock Warrant
Agreement") to be entered into by the Company and a warrant agent to be selected
at the time of issue (the "Stock Warrant Agent"), which Stock Warrant Agreement
may include or incorporate by reference standard warrant provisions
substantially in the form of the Standard Stock Warrant Provisions (the "Stock
Warrant Provisions") filed as an exhibit to the Registration Statement or other
provisions set forth in the Stock Warrant Agreement which will be filed as an
exhibit to or incorporated by reference in the Registration Statement.
GENERAL
The Stock Warrants may be issued under the Stock Warrant Agreement
independently or together with any Securities offered by any Prospectus
Supplement and may be attached to or separate from such Securities. If Stock
Warrants are offered, the related Prospectus Supplement will describe the terms
of the Stock Warrants, including without limitation the following: (i) the
offering price, if any; (ii) the designation and terms of the Common or
Preferred Stock purchasable upon exercise of the Stock Warrants; (iii) the
number of shares of Common or Preferred Stock purchasable upon exercise of one
Stock Warrant and the initial price at which such shares may be purchased upon
exercise; (iv) the date on which the right to exercise the Stock Warrants shall
commence, the date on which such right shall expire and whether the Company has
the ability to extend the exercise period; (v) Federal income tax consequences;
(vi) call provisions, if any; (vii) the currency, currencies or currency units
in which the offering price, if any, and exercise price are payable; (viii) the
antidilution provisions of the Stock Warrants; and (ix) any other terms of the
Stock Warrants. The shares of Common or Preferred Stock issuable upon exercise
of the Stock Warrants will, when issued in accordance with the Stock Warrant
Agreement, be fully paid and nonassessable. If the Company maintains the ability
to reduce the exercise price of any Stock Warrant and such right is triggered,
the Company will comply with the federal securities laws, including Rule 13e-4
under the Exchange Act, to the extent applicable.
EXERCISE OF STOCK WARRANTS
Stock Warrants may be exercised in the manner set forth in the Prospectus.
Duly exercised Stock Warrants will be delivered by the Stock Warrant Agent to
the transfer agent for the Common Stock or the Preferred Stock, as the case may
be. Upon receipt thereof, the transfer agent shall deliver or cause to be
delivered, to or upon the written order of the exercising warrantholder, the
number of shares of Common Stock or Preferred Stock purchased. If fewer than all
of the Stock Warrants held by a warrantholder are exercised, the Stock Warrant
Agent shall deliver to the exercising warrantholder a new Stock Warrant
representing the unexercised Stock Warrants.
ANTIDILUTION PROVISIONS
The exercise price payable and the number of shares of Common or Preferred
Stock purchasable upon the exercise of each Stock Warrant will be subject to
adjustment in certain events, including the issuance of a stock dividend to
holders of Common or Preferred Stock, respectively, or a combination,
subdivision or reclassification of Common or Preferred Stock, respectively. In
lieu of adjusting the number of shares of Common or Preferred Stock purchasable
upon exercise of each Stock Warrant, the Company may elect to adjust the number
of Stock Warrants. No adjustment in the number of shares purchasable upon
exercise of the Stock Warrants will be required until cumulative adjustments
require an adjustment of at least 1% thereof. The Company may, at its option,
reduce the exercise price at any time. No fractional shares will be issued upon
exercise of Stock Warrants, but the Company will pay the cash value of any
fractional shares otherwise issuable. Notwithstanding the foregoing, in case of
any consolidation, merger, or sale or conveyance of the
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property of the Company as an entirety or substantially as an entirety, the
holder of each outstanding Stock Warrant shall have the right upon the exercise
thereof to the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common or Preferred Stock into which such Stock Warrants were exercisable
immediately prior thereto.
NO RIGHTS AS STOCKHOLDERS
Holders of Stock Warrants will not be entitled, by virtue of being such
holders, to vote, to consent, to receive dividends, to receive notice as
stockholders with respect to any meeting of stockholders for the election of
directors of the Company or any other matter, or to exercise any rights
whatsoever as stockholders of the Company.
DESCRIPTION OF THE THIRD PARTY WARRANTS
The following statements with respect to the Third Party Warrants are
summaries of, and subject to, the detailed provisions of a warrant agreement
(the "Third Party Warrant Agreement") to be entered into by the Company and a
warrant agent to be selected at the time of issue (the "Third Party Warrant
Agent"), which Third Party Warrant Agreement may include or incorporate by
reference standard warrant provisions substantially in the form of the Standard
Stock Warrant Provisions or the provisions set forth in the form of Debt
Securities Warrant Agreement filed as an exhibit to the Registration Statement
or other provisions set forth in the Third Party Warrant Agreement which will be
filed as an exhibit to or incorporated by reference in the Registration
Statement.
GENERAL
The Third Party Warrants may be issued under the Third Party Warrant
Agreement independently or together with any Securities offered by any
Prospectus Supplement and may be attached to or separate from such Securities.
If Third Party Warrants are offered, the related Prospectus Supplement will
describe the terms of the warrants, including without limitation the following:
(i) the offering price, if any; (ii) the designation, aggregate principal amount
and terms of the Third Party Securities purchasable upon exercise of the
warrants; (iii) if applicable, the designation and terms of the Third Party
Securities with which the Third Party Warrants are issued and the number of
Third Party Warrants issued with each such Third Party Security; (iv) if
applicable, the date on and after which the Third Party Warrants and the related
Third Party Securities will be separately transferable; (v) the number or
principal amount of Third Party Securities purchasable upon exercise of one
Third Party Warrant and the price at which such number or principal amount of
Third Party Securities may be purchased upon exercise; (vi) the date on which
the right to exercise the Third Party Warrants shall commence, the date on which
such right shall expire and whether the Company has the ability to extend the
exercise period; (vii) Federal income tax consequences; (viii) whether the Third
Party Warrants will be issued in registered or bearer form; (ix) the currency,
currencies or currency units in which the offering price, if any, and exercise
price are payable; (x) the antidilution provisions of the Third Party Warrants;
and (xi) any other terms of the Third Party Warrants. If the Company maintains
the ability to reduce the exercise price of any Third Party Warrant and such
right is triggered, the Company will comply with the federal securities laws,
including Rule 13e-4 under the Exchange Act, to the extent applicable.
The Prospectus Supplement will identify the Third Party Securities, the
Third Party Company, all documents filed by the Third Party Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act since the end of such
Third Party Company's last completed fiscal year for which a Form 10-K annual
report has been filed and the document or documents filed under the Exchange Act
which contain a description of the Third Party Securities being sold or, if no
such document or documents exist, the Prospectus Supplement will include a
description of the Third Party Securities being sold. Third Party Warrants may
be offered only with respect to Third Party Securities of Third Party Companies
that are eligible to use Form S-3 (or any successor form) for primary offerings
under the rules and regulations of the Commission and Third Party Securities
that are registered under Section 12 of the Exchange Act. To the extent the
Securities Act requires registration of the Third Party Securities by the Third
Party Company, such as where the Third Party is an affiliate of the Company, in
connection with the issuance and/or exercise of Third Party Warrants, the
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Company will cause the Third Party Company to file a Third Party Registration
Statement under the Securities Act. Where the exercise of Third Party Warrants
would require the Third Party to have an effective Third Party Registration
Statement at the time of exercise, the exercise will be subject to the
effectiveness of such registration statement.
For example, if the Company is an affiliate of the Third Party Company, the
Third Party Securities that can be acquired upon exercise of the Third Party
Warrants will be the subject of a registration statement filed under the
Securities Act by the Third Party Company prior to any offer of such Third Party
Warrants, and a Third Party Registration Statement will have been declared
effective prior to any sale of Third Party Warrants, except in the case of Third
Party Warrants which are not immediately exercisable, in which case, such a
registration statement would have to be effective, absent an exemption, when the
holder of any Third Party Warrants elects to exercise them to acquire Third
Party Securities.
Third Party Warrants may be exchanged for new Third Party Warrants of
different denominations and may (if in registered form) be presented for
registration of transfer at the corporate trust office of the Third Party
Warrant Agent, which will be listed in the related Prospectus Supplement, or at
such other office as may be set forth therein. Warrantholders do not have any of
the rights of holders of Third Party Securities (except as may be otherwise set
forth in the Prospectus Supplement).
EXERCISE OF THIRD PARTY WARRANTS
Third Party Warrants may be exercised in the manner set forth in the
Prospectus Supplement. Upon the exercise of Third Party Warrants, the Third
Party Warrant Agent will, as soon as practicable, deliver the Third Party
Securities in authorized denominations in accordance with the instructions of
the exercising warrantholder and at the sole cost and risk of such holder. If
less than all of the Third Party Warrants held by a warrantholder are exercised,
a new Third Party Warrant will be issued for the remaining amount of Third Party
Warrants.
DESCRIPTION OF THE WARRANTS TO PURCHASE DEBT SECURITIES
The following statements with respect to the Debt Warrants are summaries
of, and subject to, the detailed provisions of a warrant agreement (the "Debt
Warrant Agreement") to be entered into by the Company and a warrant agent to be
selected at the time of issue (the "Debt Warrant Agent"), which Debt Warrant
Agreement may include or incorporate by reference standard warrant provisions
substantially in the form of the Standard Debt Securities Warrant Provisions
(the "Debt Warrant Provisions") filed as an exhibit to the Registration
Statement or other provisions set forth in the Debt Warrant Agreement which will
be filed as an exhibit to or incorporated by reference in the Registration
Statement.
GENERAL
The Debt Warrants may be issued under the Debt Warrant Agreement
independently or together with any Debt Securities offered by any Prospectus
Supplement and may be attached to or separate from such Debt Securities. If Debt
Warrants are offered, the related Prospectus Supplement will describe the terms
of the Debt Warrants, including without limitation the following: (i) offering
price, if any; (ii) designation, aggregate principal amount and terms of the
Debt Securities purchasable upon exercise of the Debt Warrants; (iii) the
principal amount of Debt Securities purchasable upon exercise of the Debt
Warrants and the price at which such principal amount of Debt Securities may be
purchased upon exercise; (iv) the date or dates on which the right to exercise
the Debt Warrants shall commence, the date on which such right shall expire and
whether the Company has the ability to extend the exercise period; (v) Federal
income tax consequences, if any; (vi) the currency, currencies or currency units
in which the offering price, if any, and exercise price are payable; and (vii)
any other terms of the Debt Warrants.
Debt Warrants may be exchanged for new Debt Warrants of different
denominations and may be presented for registration of transfer at the corporate
trust office of the Debt Warrant Agent, which will be listed in the related
Prospectus Supplement, or at such other office as may be set forth therein.
Warrantholders
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do not have any of the rights of holders of Debt Securities and are not entitled
to payments of principal of and interest, if any, on the Debt Securities.
EXERCISE OF DEBT WARRANTS
Debt Warrants may be exercised in the manner set forth in the Prospectus
Supplement. Upon the exercise of Debt Warrants, the Debt Warrant Agent will, as
soon as practicable, deliver the Debt Securities in authorized denominations in
accordance with the instructions of the exercising warrantholder and at the sole
cost and risk of such holder.
DESCRIPTION OF THE STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, which are contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock or Preferred Stock at a
future date or dates. The price per share of Common Stock or Preferred Stock may
be fixed at the time the Stock Purchase Contracts are issued or may be
determined by reference to a specific formula set forth in the Stock Purchase
Contracts. Any such formula may include anti-dilution provisions to adjust the
number of shares issuable pursuant to Stock Purchase Contracts upon certain
events. The Stock Purchase Contracts may be issued separately or as a part of
Stock Purchase Units each representing ownership of a Stock Purchase Contract
and Debt Securities, Preferred Securities or debt obligations of third parties,
including U. S. Obligations, securing the holders' obligations to purchase the
Common Stock or the Preferred Stock under the Purchase Contracts.
In the case of Stock Purchase Units that include debt obligations of third
parties, unless a holder of Stock Purchase Units settles its obligations under
the Stock Purchase Contracts early through the delivery of consideration to the
Company or its agent in the manner discussed below, the principal of such debt
obligations, when paid at maturity, will automatically be applied to satisfy the
holder's obligation to purchase Common Stock or Preferred Stock under the Stock
Purchase Contracts.
In the case of Stock Purchase Units that include Debt Securities or
Preferred Securities, in the absence of any such early settlement or the
election by a holder to pay the consideration specified in the Stock Purchase
Contracts prior to the stated settlement date, the Debt Securities or Preferred
Securities will automatically be presented to the applicable ATI Trust for
redemption at 100% of face or liquidation value and the ATI Trust will present
Subordinated Debt Securities in an equal principal amount to the Company for
redemption at 100% of principal amount. Amounts received in respect of such
redemption will automatically be transferred to AirTouch and applied to satisfy
in full the holder's obligation to purchase Common Stock or Preferred Stock
under the Stock Purchase Contracts. The Stock Purchase Contracts may require the
Company to make periodic payments to the holders of the Stock Purchase Units or
visa versa, and such payments may be unsecured or prefunded on some basis. The
Stock Purchase Contracts may require holders to secure their obligations
thereunder in a specified manner.
Holders of Stock Purchase Units may be entitled to settle the underlying
Stock Purchase Contracts prior to the stated settlement date by surrendering the
certificate evidencing the Stock Purchase Units, accompanied by the payment due,
in such form and calculated pursuant to such formula as may be prescribed in the
Stock Purchase Contracts and described in the applicable Prospectus Supplement.
Upon early settlement, the holder would receive the number of shares of Common
Stock or Preferred Stock deliverable under such Stock Purchase Contracts,
subject to adjustment in certain cases. Holders of Stock Purchase Units may be
entitled to exchange their Stock Purchase Units together with appropriate
collateral, for separate Stock Purchase Contracts and Preferred Securities, Debt
Securities or debt obligations. In the event of either such early settlement or
exchange, the Preferred Securities, Debt Securities or debt obligations that
were pledged as security for the obligation of the holder to perform under the
Stock Purchase Contracts would be transferred to the holder free and clear of
the Company's security interest therein.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units.
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DESCRIPTION OF THE PREFERRED SECURITIES
Each ATI Trust may issue only one series of Preferred Securities having
terms described in the Prospectus Supplement relating thereto. The Declaration
of each ATI Trust authorizes the Regular Trustees of each ATI Trust to issue on
behalf of such ATI Trust one series of Preferred Securities. The Declaration
will be qualified as an indenture under the Trust Indenture Act. The Preferred
Securities will have such terms, including distributions, redemption, voting,
liquidation rights and such other preferred, deferred or other special rights or
such restrictions, as shall be set forth in the Declaration or made part of the
Declaration by the Trust Indenture Act. Reference is made to any Prospectus
Supplement relating to the Preferred Securities for specific terms including (i)
the distinctive designation of such Preferred Securities, (ii) the number of
Preferred Securities issued, (iii) the annual distribution rate (or method of
determining such rate) for Preferred Securities and the date or dates upon which
such distributions shall be payable (provided, however, that distributions on
such Preferred Securities shall be payable on a quarterly basis to holders of
such Preferred Securities as of a record date in each quarter during which such
Preferred Securities are outstanding), (iv) whether distributions on Preferred
Securities shall be cumulative, and, in the case of Preferred Securities having
such cumulative distribution rights, the date or dates or method of determining
the date or dates from which distributions on Preferred Securities shall be
cumulative, (v) the amount or amounts which shall be paid out of the assets of
such trust to the holders of Preferred Securities upon voluntary or involuntary
dissolution, winding-up or termination of such ATI Trust, (vi) the obligation,
if any, of such ATI Trust to purchase or redeem Preferred Securities and the
price or prices at which, the period or periods within which and the terms and
conditions upon which Preferred Securities issued by such ATI Trust shall be
purchased or redeemed, in whole or in part, pursuant to such obligation, (vii)
the voting rights, if any, of Preferred Securities issued by such ATI Trust in
addition to those required by law, including the number of votes per Preferred
Security and any requirement for the approval by the holders of Preferred
Securities, or of Preferred Securities issued by both ATI Trusts as a condition
to specified action or amendments to the Declaration of such ATI Trust, (viii)
whether the Preferred Securities will be issued in the form of one or more
global securities, and (ix) any other relevant rights, preferences, privileges,
limitations or restrictions of Preferred Securities issued by such ATI Trust
consistent with the Declaration of such trust or with applicable law. All
Preferred Securities offered hereby will be guaranteed by the Company to the
extent set forth below under "Description of the Guarantees." Certain United
States federal income tax considerations applicable to any offering of Preferred
Securities will be described in the Prospectus Supplement relating thereto.
In connection with the issuance of Preferred Securities, each ATI Trust
will issue one series of Common Securities. The Declaration of each ATI Trust
authorizes the Regular Trustees to issue on behalf of such ATI Trust one series
of Common Securities having such terms including distributions, redemption,
voting, liquidation rights or such restrictions as shall be set forth therein.
The terms of the Common Securities issued by an ATI Trust will be substantially
identical to the terms of the Preferred Securities issued by such trust and the
Common Securities will rank pari passu, and payments will be made theron pro
rata, with the Preferred Securities except that, upon the occurrence and during
the continuation of an event of default under the Declaration, the rights of the
holders of the Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise will be subordinated to the
rights of the holders of the Preferred Securities. Except in certain limited
circumstances the Common Securities will also carry the right to vote and to
appoint, remove or replace any of the ATI Trustees. All of the Common Securities
will be directly or indirectly owned by the Company.
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees that
will be executed and delivered by the Company for the benefit of the Holders,
from time to time, of Preferred Securities. Each Preferred Securities Guarantee
Agreement under which Guarantees are issued will be qualified as an indenture
under the Trust Indenture Act. The trustee under each Guarantee (the "Guarantee
Trustee") will be identified in the relevant Prospectus Supplement, and will be
a financial institution not affiliated with the Company that has a combined
capital and surplus of not less than $100,000,000. The terms of each Guarantee
will be those set forth in such Guarantee and those made part of such Guarantee
by the Trust Indenture Act.
24
<PAGE> 32
The summary does not purport to be complete. Such summary makes use of certain
terms defined in the Preferred Securities Guarantee Agreement and is subject in
all respects to the provisions of, and is qualified in its entirety by reference
to, the form of Guarantee, which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and the Trust Indenture Act.
Each Guarantee will be held by the Guarantee Trustee for the benefit of the
holders of the Preferred Securities of the applicable ATI Trust.
GENERAL
Pursuant to each Guarantee, the Company will unconditionally agree, to the
extent set forth herein, to pay in full to the holders of the Preferred
Securities issued by each ATI Trust, the Guarantee Payments (as defined herein)
(except to the extent paid by such ATI Trust), as and when due, regardless of
any defense, right of set-off or counterclaim which such ATI Trust may have or
assert. The following payments with respect to Preferred Securities issued by
each ATI Trust (the "Guarantee Payments"), to the extent not paid by such ATI
Trust, will be subject to the Guarantee (without duplication): (i) any accrued
and unpaid distributions that are required to be paid on such Preferred
Securities, but if and only to the extent that in each case the Company has made
a payment to the related Property Trustee of interest or principal on the
Subordinated Debt Securities held in such ATI Trust as trust assets, (ii) the
redemption price, including all accrued and unpaid distributions (the
"Redemption Price"), but if and only to the extent that in each case the Company
has made a payment to the related Property Trustee of interest or principal on
the Subordinated Debt Securities held in such ATI Trust as trust assets with
respect to any Preferred Securities called for redemption by such ATI Trust and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
such ATI Trust (other than in connection with the distribution of Subordinated
Debt Securities to the holders of Preferred Securities or the redemption of all
of the Preferred Securities), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid distributions on such Preferred Securities to
the date of payment to the extent such ATI Trust has funds available therefor or
(b) the amount of assets of such ATI Trust remaining available for distribution
to holders of such Preferred Securities in liquidation of such ATI Trust. The
Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of Preferred
Securities or by causing the applicable ATI Trust to pay such amounts to such
holders.
Each Guarantee will be a guarantee with respect to the Preferred Securities
issued by the applicable ATI Trust from the time of issuance of such Preferred
Securities but will not apply to any payment of distributions except to the
extent the Company has made a payment to the related Property Trustee of
interest or principal on the Subordinated Debt Securities held in such ATI Trust
as trust assets. If the Company does not make interest payments on the
Subordinated Debt Securities purchased by an ATI Trust, such ATI Trust will not
pay distributions on the Preferred Securities issued by such ATI Trust and will
not have funds available therefor and such payment obligation will therefore not
be guaranteed by the Company under the Guarantees. See "Description of the
Preferred Securities; "Description of Debt Securities -- Subordinated Debt
Securities."
The Company's obligations under the Declaration for each ATI Trust, the
Preferred Securities Guarantee issued with respect to Preferred Securities
issued by that ATI Trust, the Subordinated Debt Securities purchased by that
Trust and the related Subordinated Indenture in the aggregate will provide a
full and unconditional guarantee on a subordinated basis by the Company of
payments due on the Preferred Securities issued by that ATI Trust.
The Company has also agreed to unconditionally guarantee the obligations of
the ATI Trusts with respect to the Common Securities (the "Common Securities
Guarantees") to the same extent as the Guarantees, except that, upon an event of
default under the Subordinated Indenture, holders of Preferred Securities under
the Guarantees shall have priority over holders of Common Securities under the
Common Securities Guarantee with respect to distributions and payments on
liquidation, redemption or otherwise.
25
<PAGE> 33
CERTAIN COVENANTS OF THE COMPANY
In each Guarantee, the Company will covenant that, so long as any Preferred
Securities issued by the applicable ATI Trust remain outstanding, if there shall
have occurred any event that would constitute an event of default under such
Guarantee or the Declaration of such ATI Trust, then (a) the Company shall not
declare or pay any dividend on, or make any distribution with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company which rank junior to such Subordinated Debt
Securities. However, each Guarantee will except from the foregoing any stock
dividends paid by the Company, or any of its subsidiaries, where the dividend
stock is of the same class as that on which the dividend is being paid.
MODIFICATION OF THE GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required),
each Guarantee may be amended only with the prior approval of the holders of not
less than a majority in liquidation amount of the outstanding Preferred
Securities issued by the applicable ATI Trust. The manner of obtaining any such
approval of holders of such Preferred Securities will be set forth in an
accompanying Prospectus Supplement. All guarantees and agreements contained in a
Guarantee shall bind the successors, assignees, receivers, trustees and
representatives of AirTouch and shall inure to the benefit of the holders of the
Preferred Securities of the applicable ATI Trust then outstanding.
EVENTS OF DEFAULT
An Event of Default under the Guarantee will occur upon the failure of the
Company to perform any of its payments or other obligations thereunder. The
holders of a majority in liquidation amount of the Preferred Securities to which
a Guarantee relates have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
If the Guarantee Trustee fails to enforce such Guarantee, any holder of
Preferred Securities relating to such Guarantee may, after a period of 30 days
has elapsed from such holder's written request to the Guarantee Trustee to
enforce the Guarantee, institute a legal proceeding directly against the Company
to enforce the Guarantee Trustee's rights under such Guarantee without first
instituting a legal proceeding against the relevant ATI Trust, the Guarantee
Trustee or any other person or entity.
The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under each of the Guarantees and as to any default in such performance and an
officer's certificate as to the Company's compliance with all conditions under
each of the Guarantees.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate as to the Preferred Securities issued by the
applicable ATI Trust upon full payment of all distributions relating to the
Preferred Securities or the Redemption Price of all Preferred Securities of such
Trust, upon distribution of the subordinated Debt Securities held by such ATI
Trust to the holders of the Preferred Securities of such ATI Trust or upon full
payment of the amounts payable in accordance with the Declaration of such ATI
Trust upon liquidation of such ATI Trust. Each Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Preferred Securities issued by the applicable ATI Trust must restore payment
of any sums paid under such Preferred Securities or such Guarantee.
26
<PAGE> 34
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Company and
will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Company and with any guarantee
now or hereafter entered into by the Company in respect of any preferred or
preference stock of any affiliate of the Company and (iii) senior to the
Company's Common Stock. The terms of the Preferred Securities provide that each
holder of Preferred Securities issued by such ATI Trust by acceptance thereof
agrees to the subordination provisions and other terms of the applicable
Guarantee.
The Guarantee Trustee shall enforce the Preferred Securities Guarantee on
behalf of the Holders of the Preferred Securities issued by the applicable ATI
Trust. The holders of not less than a majority in aggregate liquidation amount
of the Preferred Securities issued by the applicable ATI Trust have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of the related Preferred Securities Guarantee, including
the giving of directions of the Guarantee Trustee. If the Guarantee Trustee
fails to enforce such Preferred Securities Guarantee, any Holder of Preferred
Securities issued by the applicable ATI Trust may institute a legal proceeding
directly against the Company, as Guarantor, to enforce its rights under such
Preferred Securities Guarantee, without first instituting a legal proceeding
against the applicable ATI Trust or any other person or entity.
Each Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the guarantor to enforce its rights under a Guarantee without instituting a
legal proceeding against any other person or entity).
PLAN OF DISTRIBUTION
The Company or any ATI Trust may, from time to time, sell Securities (1)
through underwriters or dealers, (2) directly to one or more purchasers, or (3)
through agents. A Prospectus Supplement will set forth the terms of the offering
of the Securities offered thereby, including the name or names of any
underwriters, the purchase price of the Securities, and the proceeds to the
Company or any ATI Trust from the sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial public offering
price, any discounts or concessions allowed or reallowed or paid to dealers, and
any securities exchange or market on which the Securities may be listed. Only
underwriters so named in such Prospectus Supplement are deemed to be
underwriters in connection with the Securities offered thereby.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the Securities will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all the Securities of the series offered by the Prospectus Supplement if any of
the Securities are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
Securities may also be sold directly by the Company or an ATI Trust or
through agents designated by the Company or any ATI Trust from time to time. Any
agent involved in the offering and sale of Securities in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Company or an ATI Trust to such agent will be set forth in the Prospectus
Supplement. Unless otherwise indicated in the related Prospectus Supplement, any
such agent will be acting on a best-efforts basis for the period of its
appointment.
Securities offered other than Common Stock may be a new issue of securities
with no established trading market. Any underwriters to whom such Securities are
sold by the Company or an ATI Trust for public offering and sale may make a
market in such Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of or the trading markets for any such
Securities.
27
<PAGE> 35
Agents and underwriters may be entitled under agreements entered into with
the Company or an ATI Trust to indemnification by the Company or such trust
against certain civil liabilities, including liabilities under the Securities
Act of 1933, as amended, or to contribution with respect to payments which the
agents or underwriters may be required to make in respect thereof. Agents and
underwriters may engage in transactions with, or perform services for, the
Company or any ATI Trust in the ordinary course of business.
In connection with distributions of shares of Common Stock or otherwise,
the Company may enter into hedging transactions with Counterparties in
connection with which such Counterparties may sell shares of Common Stock
registered hereunder in the course of hedging through short sales the positions
they assume with the Company. Such Counterparties may offer Common Stock (1)
through underwriters or dealers, (2) directly to one or more purchasers, or (3)
through agents, and may effect sales in one or more transactions on the NYSE or
in negotiated transactions or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at other negotiated prices. The Company will not receive any of
the proceeds from the sale of Common Stock by Counterparties. A Counterparty may
be deemed to be an "underwriter" within the meaning of the Securities Act, and
any commission received by it and any profit on the resale of the Common Stock
purchased by it may be deemed to be underwriting commissions or discounts under
the Securities Act. The Company may agree to bear all expenses of registration
of any Common Stock offered by Counterparties and may indemnify such
Counterparties against certain civil liabilities, including certain liabilities
under the Securities Act.
ERISA AND TAX CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain restrictions on investments by employee benefit plans that are
subject to ERISA. The Internal Revenue Code of 1986, as amended (the "Code"),
imposes additional restrictions on investments by tax-exempt retirement plans,
individual retirement accounts, and similar entities. The Code also provides
that certain types of income received by organizations that generally are exempt
from federal income tax will nevertheless be subject to taxation. Retirement
plans, tax-exempt organizations and similar entities should consult their tax
and legal advisors and the applicable Prospectus Supplement before acquiring
Securities.
LEGAL MATTERS
The legality of the Securities (other than the Preferred Securities)
offered hereby will be passed upon by Pillsbury Madison & Sutro LLP, San
Francisco, California, counsel for the Company. The legality of the Preferred
Securities will be passed upon by Morris, Nichols, Arsht & Tunnell, Wilmington,
Delaware. Certain legal matters will be passed upon for the underwriters by
Cleary, Gottlieb, Steen & Hamilton, New York, New York, except as otherwise set
forth in the Prospectus Supplement.
EXPERTS
The consolidated financial statements of the Company and subsidiaries as of
December 31, 1995, incorporated in this Prospectus by reference to AirTouch's
Annual Report on Form 10-K, as amended by Form 10-K/A No. 1, for the year ended
December 31, 1995, have been so incorporated in reliance upon the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
With respect to the unaudited consolidated financial information of
AirTouch for the three-month period ended March 31, 1996, incorporated by
reference herein, Price Waterhouse LLP reported that they have applied limited
procedures in accordance with professional standards for review of such
information. However, their separate report dated May 10, 1996 incorporated by
reference herein states that they did not audit and they do not express an
opinion on that unaudited consolidated financial information. Price Waterhouse
LLP has not carried out any significant or additional audit tests beyond those
which would have been necessary if their report had not been included.
Accordingly, the degree of reliance on their report on such information should
be restricted in light of the limited nature of the review procedures applied.
Price Waterhouse LLP is not subject to the liability provisions of section 11 of
the Securities Act for their report on the unaudited consolidated financial
information because that report is not a "report" or "part" of the Registration
28
<PAGE> 36
Statement prepared or certified by Price Waterhouse LLP within the meaning of
sections 7 and 11 of the Securities Act.
The consolidated financial statements of the Company and subsidiaries for
the two-year period ended December 31, 1994, incorporated by reference from the
AirTouch Communications, Inc. Annual Report on Form 10-K, as amended by Form
10-K/A No. 1, for the year ended December 31, 1995 have been incorporated herein
in reliance upon the report of Coopers & Lybrand L.L.P., independent
accountants, given on the authority of said firm as experts in accounting and
auditing.
With respect to the unaudited consolidated financial information of
AirTouch for the three-month period ended March 31, 1995, incorporated by
reference herein, Coopers & Lybrand L.L.P. reported that they have applied
limited procedures in accordance with professional standards for review of such
information. However, their separate report dated May 11, 1995 incorporated by
reference herein, states that they did not audit and they do not express an
opinion on that unaudited consolidated financial information. Coopers & Lybrand
L.L.P. has not carried out any significant or additional audit tests beyond
those which would have been necessary if their report had not been included.
Accordingly, the degree of reliance on their report on such information should
be restricted in light of the limited nature of the review procedures applied.
Coopers & Lybrand L.L.P. is not subject to the liability provisions of section
11 of the Securities Act for their report on the unaudited consolidated
financial information because that report is not a "report" or "part" of the
Registration Statement prepared or certified by Coopers & Lybrand L.L.P. within
the meaning of sections 7 and 11 of the Securities Act.
The financial statements and schedule of CMT Partners for the years ended
December 31, 1995 and 1994, and for the period from inception (September 1,
1993) to December 31, 1993, incorporated by reference from AirTouch
Communications, Inc.'s Annual Report on Form 10-K, as amended on Form 10-K/A No.
1, for the year ended December 31, 1995, have been audited by Coopers & Lybrand
L.L.P., independent accountants, as set forth in their report. In that report,
the firm states that with respect to Kansas Combined Cellular, a division of CMT
Partners, its opinion is based on the report of other independent public
accountants, namely Arthur Andersen LLP. The financial statements and schedule
of CMT Partners referred to above have been included herein in reliance upon the
authority of those firms as experts in giving said reports.
The consolidated financial statements and schedule of Cellular
Communications, Inc. incorporated by reference in AirTouch Communications,
Inc.'s Annual Report (Form 10-K, as amended by Form 10-K/A No. 1) for the year
ended December 31, 1995, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon incorporated by reference therein
and incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements of New Par (A Partnership) as of
December 31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995 included in AirTouch Communications, Inc.'s Annual Report
(Form 10-K, as amended by Form 10-K/A No. 1) for the year ended December 31,
1995, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
The financial statements of Mannesmann Mobilfunk GmbH as of December 31,
1995 and 1994, and for each of the years in the three-year period ended December
31, 1995 included in AirTouch's Annual Report on Form 10-K, as amended on Form
10-K/A No. 1, have been incorporated by reference herein in reliance upon the
report of KPMG Deutsche Treuhand-Gesellschaft, independent auditors,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
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<PAGE> 37
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY AGENT OR UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO PURCHASE ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
---------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Use of Proceeds............................. S-1
Ratio of Earnings to Fixed Charges.......... S-1
Recent Developments......................... S-1
Description of the Notes.................... S-2
Legal Opinions.............................. S-5
Underwriting................................ S-6
PROSPECTUS
Index of Terms.............................. 3
Available Information....................... 3
Incorporation of Certain Documents by
Reference................................. 4
AirTouch Communications, Inc................ 5
The ATI Trusts.............................. 5
Use of Proceeds............................. 6
Ratio of Earnings to Fixed Charges.......... 6
General Description of Securities and
Risk Factors.............................. 6
Plan of Distribution........................ 27
ERISA and Tax Considerations................ 28
Legal Matters............................... 28
Experts..................................... 28
</TABLE>
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$250,000,000
LOGO
7% NOTES DUE 2003
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PROSPECTUS SUPPLEMENT
October 2, 1996
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LEHMAN BROTHERS
MERRILL LYNCH & CO.
J.P. MORGAN & CO.
SALOMON BROTHERS INC
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