As filed with the Securities and Exchange Commission on May 8, 1996
Registration No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CELLULAR COMMUNICATIONS OF PUERTO RICO, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3517074
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
110 East 59th Street
New York New York 10022
(212) 355-3466
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
RICHARD J. LUBASCH, ESQ.
Senior Vice President, General Counsel and Secretary
Cellular Communications of Puerto Rico, Inc.
110 East 59th Street
New York New York 10022
(212) 906-8470
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies of all communications to:
THOMAS H. KENNEDY, ESQ.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
(212) 735-2526
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time following the date this Registration Statement is declared
effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]_______________
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
- --------------------------------------- ---------- ----------------- ----------------- -------------
Common Stock, $.01 par value (in- 820,404 $27.125(2) $22,253,459.00(2) $7,673.61(2)
cluding Series A Junior Participating shares
Preferred Stock Purchase Rights) (1)
(1) Prior to the occurrence of certain events, the Series A Junior
Participating Preferred Stock Purchase Rights will not be evidenced
separately from shares of Common Stock.
(2) Estimated pursuant to Rule 457(c) of the Securities Act of 1933 solely for
the purpose of computing the amount of the registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, MAY 8, 1996
PROSPECTUS
- ----------
820,404 SHARES
CELLULAR COMMUNICATIONS OF PUERTO RICO, INC.
COMMON STOCK
-----------
This Prospectus relates to the sale by Henry Zachs, Judith Zachs, Newton
Brenner, Christopher Jenkins, Waring Partridge, David Abel, Estate of Danny
Arnold, Estate of Robert Austin, The Ed and Natalie Friendly Trust, Nathan
Golden, Jeffrey Gordon, Eugene Goodwin, Rabbi Leon Kahane, Frank Kilpatrik,
Lawrence Family Trust, Perry Leff, Donald Meaders, George Newhart, Kenneth
Newmark, Susan Newmark, Pierce O'Donnell, Don Rickles, Barbara Rickles, Ronald
Rizzo, Anne Roberts, Larry Scharf, Bart Sokolow, Ronald Shlensky, Anthony
Thompson and Tayemi Thompson, (all of the foregoing parties are hereinafter
referred to as the "Selling Stockholders" ) of a maximum 820,404 shares of
Common Stock, par value $.01 per share (the "Common Stock"), of Cellular
Communications of Puerto Rico, Inc., a Delaware corporation (the "Company") (and
associated Series A Junior Participating Preferred Stock Purchase Rights (the
"Rights")). Such Common Stock was originally issued by the Company as
consideration in certain acquisition transactions. See "RECENT DEVELOPMENTS."
The Company will not receive any proceeds from the sale of the shares of Common
Stock offered by this Prospectus. See "SELLING STOCKHOLDERS" and "PLAN OF
DISTRIBUTION."
The Common Stock is quoted on the National Association of Securities
Dealers Automated Quotations/National Market System ("Nasdaq National Market")
under the symbol CCPR. On May 7, 1996 the last reported sale price of the
Common Stock on the Nasdaq National Market was $26.75 per share. Prospective
purchasers of the Common Stock are urged to obtain current information as to
market prices of the Common Stock.
-----------
SEE "RISK FACTORS" ON PAGES 4 THROUGH 7 FOR CERTAIN FACTORS RELEVANT TO AN
INVESTMENT IN THE COMMON STOCK OFFERED HEREBY.
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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.
THE DATE OF THIS PROSPECTUS IS MAY __, 1996
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, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following Regional Offices of the Commission: Chicago Regional Office,
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and New York Regional Office, 7 World Trade Center, 13th Floor,
New York, New York 10048. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports, proxy statements and
other information can also be inspected at the offices of the Nasdaq National
Market, Reports Section, 1735 K Street, N.W., Washington, D.C., 20006 on which
certain securities of the Company are listed and traded.
The Company has filed with the Commission a Registration Statement on
Form S-3 (which together with all amendments and exhibits is referred to herein
as the "Registration Statement"). This Prospectus does not contain all
information set forth in the Registration Statement and the exhibits and
schedules filed thereunder, 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 which may be inspected
and copied in the manner and at the sources described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are hereby incorporated by reference herein:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (File No. 0-19869).
2. The Company's Current Report on Form 8-K, dated April 23, 1996
(File No. 0-19869).
3. The description of the Common Stock which is contained in the
registration statements filed by the Company to register such securities under
Section 12 of the Securities Act of 1933, as amended (the "Securities Act"),
including any amendments or reports filed for the purpose of updating such
description (File No. 0-19869).
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the shares of Common Stock hereunder
shall be deemed to be incorporated by reference herein and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated 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 other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein
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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 HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON
TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE INTO THE DOCUMENTS THAT THIS PROSPECTUS
INCORPORATES). WRITTEN OR ORAL REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO
RICHARD J. LUBASCH, SECRETARY, CELLULAR COMMUNICATIONS OF PUERTO RICO, INC., 110
EAST 59TH STREET, NEW YORK, NEW YORK 10022, TELEPHONE (212) 906-8470.
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RISK FACTORS
Ownership of the Common Stock offered hereby involves certain risks.
Prospective owners of the Common Stock, prior to engaging in any transaction
which would result in the ownership thereby of the Common Stock, should
carefully consider the following factors, in addition to all other information
contained in this Prospectus or incorporated herein by reference.
COMPETITION
Federal Communications Commission ("FCC") regulations provide that two
licensees will be authorized to provide cellular service in each cellular
service area. In the Commonwealth of Puerto Rico, the Company's wholly or
majority-owned subsidiaries, or other affiliates, face significant competition
from the Puerto Rico Telephone Company ("PRTC"), the other licensee for such
service area and which is also the sole landline telephone service provider in
Puerto Rico. PRTC is owned by the government of the Commonwealth of Puerto
Rico. PRTC is significantly larger and better capitalized than the Company and
enjoyed more than a five-year head start in fully marketing its cellular
telephone service. The Company believes that PRTC presently provides service to
approximately 61% of the subscribers to cellular telephone service in the
Commonwealth of Puerto Rico. In the U.S. Virgin Islands, the Company and its
wholly or majority owned subsidiaries, or other affiliates, face significant
competition from VitelCellular, Inc. ("VitelCellular"). VitelCellular is an
affiliate of Virgin Islands Telephone Company, which is the provider of landline
telephone service in the U.S. Virgin Islands and is also the other licensee in
each U.S. Virgin Islands cellular service area. The Company believes that
VitelCellular is significantly larger and better capitalized than the Company.
The Company believes that VitelCellular currently provides service to
approximately 45% of the subscribers of cellular service on the U.S. Virgin
Islands. Furthermore, the Company's cellular and paging operations are
dependent upon interconnection with these local landline telephone service
providers for the origination and termination of calls that constitute a large
proportion of the Company's mobile service operations. The Telecommunications
Act of 1996 contains certain provisions regarding such interconnection; however,
it is still premature to predict the effect of such legislation on the Company's
business.
Significant competition can also be expected from the other cellular
licensee in each other service area in which the Company's wholly or majority-
owned subsidiaries, or other affiliates, now, or in the future, might compete.
Alternative communications technologies now existing, in the process of
development, or to be developed in the future may also provide competition.
These include, without limitation, landline telephone service, conventional
mobile radio systems, specialized mobile radio systems, paging services,
microcell-based cordless telephones, mobile satellite services and personal
communications services ("PCS"). The FCC has recently awarded PCS licenses for
Puerto Rico and the U.S. Virgin Islands to AT&T and Centennial Cellular Corp.
("Centennial"). AT&T is the largest telecommunications company in the United
States; Centennial is an experienced cellular service provider in the U.S.
mainland and has affiliates that offer cable television services and fiber-
optic based telecommunications services in Puerto Rico. Both AT&T and
Centennial are expected to provide strong competition in the mobile
telecommunications market in Puerto Rico. The FCC will award four additional
PCS authorizations through competitive bidding in each area where the Company
provides cellular service. The Company is eligible to bid for and acquire at
least one of these authorizations in each such area. PCS is expected to utilize
digital technology which may provide better sound quality and ancillary
functions not currently available in the Company's system.
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Accordingly, PCS will provide significant competition to the Company's cellular
and paging operations and may render current cellular technology obsolete.
FRAUD
The cellular industry continues to be subject to fraudulent activity.
Cloning, which is one form of fraud, refers to the use of scanners and other
electronic devices to illegally obtain telephone numbers and electronic serial
numbers during cellular transmission. These stolen telephone and serial number
combinations can be programmed into a cellular phone and used to obtain
fraudulent access to cellular networks. Roaming fraud occurs when a phone
programmed with a number stolen from the Company's customer is used to place a
fraudulent call from another carrier's market, resulting in a roaming fee
charged to the Company that cannot be collected from the customer. The Company
continues to work to reduce the negative impacts of fraud through investment in
new technologies and the deployment of other measures. In its own markets, the
Company has had significant success in detecting and reducing fraudulent usage
of numbers stolen from the Company's customers. The cost of cellular fraud
could have a significant impact on the Company's operating results for the
foreseeable future.
REGULATORY UNCERTAINTIES
The licensing, construction, operation, acquisition and sale of
cellular telephone systems are regulated at the federal level by the FCC and, to
some extent, the Federal Aviation Administration ("FAA"). In addition, certain
aspects of cellular telephone operations are or may be subject to public utility
regulation at the state, commonwealth or local level. Future changes in the
laws and regulations governing such aspects of cellular telephone operations,
either at the federal, state, commonwealth or local level, may have a material
adverse impact on the cellular telephone operations of the Company.
FLUCTUATIONS IN THE VALUE OF WIRELESS LICENSES; RENEWAL OF FCC LICENSES
A substantial portion of the Company's assets consists of interests in
entities holding cellular licenses, the value of which will depend upon the
success of the operations of such entities and the growth and future direction
of the cellular industry generally. Values of licenses also have been affected
by fluctuations in the level of supply and demand for such licenses. In
addition, the infrequency with which licenses are traded or sold may increase
the difficulty of establishing values for the Company's license interests. Any
transfer of control of an entity holding a domestic license is subject to prior
FCC approval. Where licenses are held by partnerships, transfers of ownership
interests in such entities are often subject to contractual restrictions.
In addition, investment returns from acquisitions of interests in
existing entities holding wireless licenses or from licenses acquired through
auctions may be lower than those resulting from the Company's early license
awards because of the substantial purchase prices required to acquire such
interests. Also, under current FCC regulations, each license is subject to
renewal. Because it is possible that there will be competition for the licenses
upon the expiration of their initial ten-year terms, there can be no assurance
that any such license will be renewed in favor of the Company.
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LACK OF GEOGRAPHIC DIVERSIFICATION
The Company's business as of the date of this Prospectus is confined
to the operation of cellular telephone and paging systems in the Commonwealth of
Puerto Rico and the U.S. Virgin Islands. As such, it is highly dependent on
trends in the use of cellular telephone and paging services and is subject to
economic, social, political and governmental conditions in the Commonwealth of
Puerto Rico and in the U.S. Virgin Islands.
RADIO FREQUENCY EMISSIONS CONCERNS
Media reports have suggested that certain radio frequency ("RF")
emissions from portable cellular telephones might be linked to cancer. The
Company has collected and reviewed relevant scientific information and, based on
such information, is not aware of any credible evidence linking the usage of
portable cellular telephones with cancer. The FCC currently has a rulemaking
proceeding pending to update the guidelines and methods it uses for evaluating
RF emissions in radio equipment, including cellular telephones. While the
proposal would impose more restrictive standards on RF emissions from low-power
devices such as portable cellular telephones, it is anticipated that all
cellular telephones currently marketed and in use will comply with those
standards. The Telecommunications Act of 1996 requires that the FCC complete
action in that rulemaking proceeding within 180 days after February 7, 1996.
Additional concerns have been expressed about the safety of emissions from
cellular facilities which transmit calls to customers' telephone handsets. The
Company's facilities are licensed by the FCC and comply with the exposure levels
set by the FCC. The Telecommunications Act of 1996 provides that state and
local governments may not regulate the placement, construction or modification
of personal wireless service facilities on the basis of the environmental
effects of RF emissions as long as such facilities comply with the FCC's
regulations concerning such emissions. However, local authorities still have
jurisdiction over zoning and permitting of such facilities.
DIVIDEND POLICY
The Company has never paid cash dividends on the Common Stock and does
not anticipate paying any cash dividends in the foreseeable future. The Company
anticipates that it will retain earnings, if any, for use in the operation and
expansion of its business and does not anticipate paying any cash dividends in
the foreseeable future. Additionally, the terms of a $200,000,000 revolving
credit facility into which the Company and one of its subsidiaries have entered
contains provisions that restrict the payment of cash dividends on the Common
Stock.
HOLDING COMPANY STRUCTURE
As a holding company, the Company is ultimately dependent upon cash
distributions from the entities in which it owns interests to fund operations
and to pay the principal and interest on the Company's indebtedness. While there
are presently no material contractual restrictions on the ability of the
Company's operating entities to make payments or other distributions to the
Company, there can be no assurances that such restrictions will not exist at any
time in the future.
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CONFLICTS OF INTEREST
Certain directors and/or officers of Cellular Communications, Inc.
("CCI") are also directors and/or officers of the Company. When such persons
act in their capacity as directors and/or officers of the Company, they have a
fiduciary duty to the Company and its stockholders, which includes a duty of
loyalty to the Company and its stockholders. If a conflict of interest were to
emerge between CCI and the Company, however, there would be no assurance that
the interests of the Company would be fully protected in such instance or that
any such conflict would necessarily be resolved in favor of the Company.
CERTAIN ANTI-TAKEOVER PROVISIONS
Certain provisions of the Company's Restated Certificate of
Incorporation (the "Restated Certificate of Incorporation") and the Company's
By-laws (the "By-laws") as well as the Rights Agreement (as hereinafter
defined), and certain instruments of indebtedness of the Company, as well as
Section 203 of the Delaware General Corporation Law which prohibits certain
persons from engaging in business combinations with the Company, may be
considered to have anti-takeover effects and may delay, defer or prevent a
change in the control of the Company that might otherwise be beneficial to the
Company's stockholders. The foregoing may also adversely affect prevailing
market prices for the Common Stock. See "PURPOSES AND EFFECTS OF CERTAIN
PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION, BYLAWS AND THE RIGHTS
AGREEMENT."
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THE COMPANY
The Company is a Delaware corporation which was originally organized
under the name EC Acquisition, Inc. on May 18, 1988. The Company, through
wholly and majority-owned entities, or other affiliates, holds licenses from the
FCC to own and operate cellular telephone and paging systems and conduct other
related operations. The only markets served by the entities in which the
Company has an interest are in the Commonwealth of Puerto Rico and the U.S.
Virgin Islands. Prior to February 28, 1992, the Company was a wholly-owned
subsidiary of CCI.
The Company's principal executive offices are located at 110 East 59th
Street, New York, New York 10022 and its telephone number at such address is
(212) 906-8470.
RECENT DEVELOPMENTS
On December 26, 1995 the Company and CCPR Services, Inc. ("CCPR"), a wholly
owned subsidiary of the Company, entered into an Agreement and Plan of
Reorganization (the "HMZ Reorganization Agreement") with HMZ San Juan Inc., a
Connecticut corporation ("HMZ"), and Henry Zachs, Newton Brenner and Christopher
Jenkins, all of the stockholders of HMZ (collectively, the "HMZ Stockholders").
The HMZ Reorganization Agreement provides, among other things, for the purchase
by CCPR of a 2.6627% interest in San Juan Cellular Telephone Company, a general
partnership ("San Juan Cellular"), subject to certain regulatory approvals.
Pursuant to the HMZ Reorganization Agreement, on February 7, 1996, the Company
issued 350,000 shares of Common Stock and the associated Rights to HMZ in
exchange for such interest in San Juan Cellular. San Juan Cellular provides,
pursuant to authorization by the FCC, cellular radio and related communications
services in Puerto Rico. HMZ subsequently distributed the 350,000 shares of
Common Stock and the associated Rights to the HMZ Stockholders and to Judith
Zachs.
On December 26, 1995, the Company and CCPR entered into an Agreement and
Plan of Reorganization (the "NTC Reorganization Agreement") with National
Telephone Company, a Delaware corporation ("NTC"), and Waring Partridge, the
sole stockholder of NTC (the "Sole Stockholder"). The NTC Reorganization
Agreement provides, among other things, for the purchase by CCPR of a 2.6627%
interest in San Juan Cellular, subject to certain regulatory approvals.
Pursuant to the NTC Reorganization Agreement, on February 7, 1996, the Company
issued 350,000 shares of Common Stock and the associated Rights to NTC in
exchange for such interest in San Juan Cellular. NTC subsequently distributed
the 350,000 shares of Common Stock and the associated Rights to the Sole
Stockholder.
.
On December 26, 1995 the Company and CCPR entered into an Agreement (the
"PCT Reorganization Agreement" and, collectively with the HMZ Reorganization
Agreement and the NTC Reorganization Agreement, the "Reorganization Agreements")
with Pacific Cellular Telephone Systems, a California limited partnership
("PCT") and David Abel, Estate of Danny Arnold, Estate of Robert Austin, The Ed
and Natalie Friendly Trust, Nathan Golden, Jeffrey Gordon, Eugene Goodwin, Rabbi
Leon Kahane, Frank Kilpatrik, Lawrence Family Trust, Perry Leff, Donald Meaders,
George Newhart, Kenneth Newmark, Susan Newmark, Pierce O'Donnell, Don Rickles,
Barbara Rickles, Ronald Rizzo, Anne Roberts, Larry Scharf, Bart Sokolow, Ronald
Shlensky, Anthony Thompson and Tayemi Thompson, the foregoing being all of the
limited and general partners of PCT (collectively, the "Partners"). The PCT
Reorganization Agreement provides, among other things, for the purchase by CCPR
of a .902% interest in San Juan Cellular, subject to certain regulatory
approvals. Pursuant to the PCT Reorganization Agreement, on February 8, 1996,
the Company issued 120,404 shares of Common Stock and the associated Rights to
PCT in exchange for such interest in San Juan Cellular. PCT subsequently
distributed the 120,404 shares of Common Stock and the associated Rights to the
Partners.
As a result of the consummation of the transactions contemplated by each of
the Reorganization Agreements, the Company has a 100% interest in San Juan
Cellular.
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SELLING STOCKHOLDERS
All of the shares of Common Stock offered hereby are being sold by the
Selling Stockholders. As of the date of this Prospectus, the Selling
Stockholders beneficially owned all of the shares of Common Stock offered hereby
and other than the shares of Common Stock offered hereby, the Selling
Stockholders, other than Judith Zachs and Henry Zachs, did not own any other
shares of Common Stock or any other shares of the capital stock of the Company.
As of the date of this Prospectus, Judith Zachs owned an additional 625 shares
of Common Stock of the Company and Henry Zachs owned an additional 3,000 shares
of Common Stock of the Company. Immediately after the sale of all of the shares
of Common Stock offered hereby, the Selling Stockholders, other than Judith
Zachs and Henry Zachs, will not own any other shares of Common Stock or any
other shares of the capital stock of the Company (assuming the Selling
Stockholders do not acquire any other such shares after the date of this
Prospectus). Immediately after the sale of all of the shares of Common Stock
offered hereby, Judith Zachs will own 625 shares of Common Stock of the Company
and Henry Zachs will own 3,000 shares of Common Stock of the Company. Pursuant
to the Reorganization Agreements, the Company acquired an aggregate interest of
6.146% in San Juan Cellular and, in connection therewith, the Company issued the
shares of Common Stock offered hereby.
Pursuant to the registration rights provisions of the Reorganization
Agreements, the Company has, among other things, filed with the Commission the
Registration Statement of which this Prospectus is a part, and has agreed to use
all reasonable efforts to cause such Registration Statement to become effective
as soon as reasonably practicable. Additionally, pursuant to such provisions,
the Selling Stockholders have agreed that if a Selling Stockholder is deemed to
be an affiliate of the Company, then that Selling Stockholder will furnish all
information and take such other actions as may reasonably be requested by the
Company to assist the Company in fulfilling the obligations of the Company
referred to in the previous sentence. The Company will not receive any cash
proceeds or other amounts from the sale of the shares of Common Stock offered
hereby.
To the best knowledge of the Company, none of the Selling Stockholders
nor any of their respective affiliates are, or have in the past three years
been, a director or officer of the Company or any of the Company's affiliates.
Except for the transactions contemplated pursuant to this Prospectus or the
Reorganization Agreements, to the best knowledge of the Company, there is not,
and there has not in the past three years been, any material relationship
between the Company and its affiliates, on the one hand, and any of the Selling
Stockholders, on the other.
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby may be sold from time to
time in one or more transactions to purchasers either directly by the Selling
Stockholders, through agents designated by the Selling Stockholders or through
brokers, dealers or underwriters to be designated by the Selling Stockholders,
at such prices (whether at fixed offering prices, prevailing market prices,
varying prices determined at the time of sale or otherwise) and on such terms as
may be determined by the Selling Stockholders at the time of sale; additionally,
such sales may be made on the Nasdaq National Market or in the over-the-counter
market or otherwise. Such agents, brokers, dealers or underwriters will likely
receive commissions or discounts from the Selling Stockholders in customary and
ordinary amounts to be negotiated immediately prior to the sale. The Selling
Stockholders and any agents, dealers or underwriters that participate with the
Selling Stockholders in the distribution of the shares of Common Stock offered
hereby may be deemed to be "underwriters" within the meaning of the Securities
Act and any commissions received by them and any profit on the resale of the
shares of Common Stock purchased by them may be deemed underwriting commissions
or discounts under the Securities Act. To the extent required under the
Securities Act, the aggregate amount of shares of Common Stock being offered and
the terms of the offering, the names of any such agents, brokers,
9
dealers or underwriters and any applicable commission with respect to a
particular offer will be set forth in an accompanying Prospectus supplement.
The aggregate proceeds to the Selling Stockholders from the sale of the shares
of Common Stock offered hereby will be the selling price of the shares of Common
Stock sold less the aggregate commissions and discounts thereon, if any, and
other expenses of issuance and distribution. None of the proceeds from the sale
of the shares of Common Stock offered hereby will be received by the Company.
USE OF PROCEEDS
The Company will not receive any of the net proceeds from the sale of
shares of Common Stock offered hereby.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The authorized capital stock of the Company consists of 32,500,000
shares, of which 2,500,000 are shares of Preferred Stock, par value $.01 per
share (the "Preferred Stock"), and 30,000,000 are shares of Common Stock. No
shares of Preferred Stock are issued and outstanding, although 80,000 shares of
Series A Junior Participating Preferred Stock have been designated and reserved
for issuance in connection with the exercise, upon certain events, of the Rights
in accordance with the Rights Agreement (as hereinafter defined). For a
description of the Rights and the Series A Junior Participating Preferred Stock,
see "PURPOSES AND EFFECTS OF CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF
INCORPORATION, THE BY-LAWS AND THE RIGHTS AGREEMENT--Stockholder Rights Plan."
The following description is qualified in all respects by reference to the
Restated Certificate of Incorporation and the By-laws, which are incorporated by
reference herein and copies of which may be obtained as described under
"AVAILABLE INFORMATION."
COMMON STOCK
All shares of Common Stock (1) participate equally in dividends
payable to holders of Common Stock when and as declared by the Company's Board
of Directors and in net assets available for distribution to holders of Common
Stock on liquidation or dissolution (subject to any prior rights of any class of
Preferred Stock which may be issued by the Company in the future), (2) have one
vote per share on all matters submitted to a vote of the Company's stockholders
and (3) do not have cumulative voting rights in the election of directors. All
issued and outstanding shares of the Common Stock are fully paid and
nonassessable. The shares of Common Stock are neither redeemable nor
convertible, and the holders thereof have no preemptive or subscription rights
to purchase any securities of the Company. Upon any liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary, the remaining net
assets, if any, of the Company shall be distributed pro rata to the holders of
the Common Stock.
The Restated Certificate of Incorporation, the By-laws and the Rights
Agreement contain certain provisions that are intended to enhance the likelihood
of continuity and stability in the composition of the Company's Board of
Directors and which may have the effect of delaying,
10
deferring or preventing a future takeover or change in control of the Company
unless such takeover or change of control is approved by the Company's Board of
Directors. Such provisions may also render the removal of the current Board of
Directors and of management more difficult. See "PURPOSES AND EFFECTS OF
CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION, THE BY-LAWS AND
THE RIGHTS AGREEMENT."
PREFERRED STOCK
The Board of Directors is authorized to provide for the issuance of
shares of Preferred Stock in one or more series, and to fix for each such series
such voting powers, full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as are stated in a
Certificate of Designation adopted by the Board of Directors providing for the
issue of such series and as are permitted by the Delaware General Corporation
Law (the "DGCL").
TRANSFER AGENT
Continental Stock Transfer & Trust Company is the transfer agent and
registrar for the Company's Common Stock.
PURPOSES AND EFFECTS OF CERTAIN
PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION,
THE BY-LAWS AND THE RIGHTS AGREEMENT
GENERAL
Certain provisions contained in the Restated Certificate of
Incorporation, the By-laws and the Rights Agreement, dated as of January 24,
1992, between the Company and Continental Stock Transfer & Trust Company (the
"Rights Agreement"), could make the acquisition of control of the Company by
means of a tender offer, open market purchases, a proxy contest, or otherwise,
more difficult. Set forth below is a description of such provisions contained
in the Restated Certificate of Incorporation, the By-laws and the Rights
Agreement. Such description is intended as a summary only and is qualified in
its entirety by reference to the Restated Certificate of Incorporation, the By-
laws and the Rights Agreement, which are incorporated by reference herein and
copies of which may be obtained as described under "AVAILABLE INFORMATION".
CLASSIFIED BOARD OF DIRECTORS
The Restated Certificate of Incorporation and the By-laws provide that
the Board of Directors be divided into three classes of directors, with the
classes to be as nearly equal in number as possible. One class of directors is
elected each year for a three-year term. The Company believes that including a
classified board provision in the Restated Certificate of Incorporation is
advantageous to the Company and its stockholders because it enhances the
likelihood of continuity and stability in the composition of the Board of
Directors and in the policies formulated by the Board of Directors. The Company
believes that this, in turn, permits the board to represent more effectively the
interests of all stockholders.
11
With a classified Board of Directors, it will generally take a
majority stockholder two annual meetings of stockholders to elect a majority of
the Board of Directors. As a result, the classified board may discourage proxy
contests for the election of directors or purchases of a substantial block of
stock because its provisions could operate to prevent obtaining control of the
board in a relatively short period of time. The classification provisions could
also have the effect of discouraging a third party from making a tender offer or
otherwise attempting to obtain control of the Company, even though such an
attempt might be beneficial to the Company and its stockholders. In addition,
because under the Restated Certificate of Incorporation directors may be removed
only for cause, a classified board would delay stockholders who do not agree
with the policies of the Board of Directors from replacing a majority of the
Board of Directors for two years, unless they can demonstrate the directors
should be removed for cause and obtain the requisite vote.
NUMBER OF DIRECTORS; REMOVAL; FILLING VACANCIES
The Restated Certificate of Incorporation and the By-laws provide that
the number of directors be fixed from time to time exclusively by the Board of
Directors, but consist of not more than fifteen nor less than three directors.
In addition, the Restated Certificate of Incorporation and the By-laws provide
that, subject to any rights of holders of any shares of Preferred Stock, if any,
a majority of the Board of Directors then in office may fill any vacancies on
the Board of Directors. Accordingly, the Board of Directors could temporarily
prevent any stockholder from obtaining majority representation on the board by
enlarging the size of the board and filling the new directorships with its own
nominees.
Under the DGCL and the Restated Certificate of Incorporation, a
director serving on a classified board may be removed by the stockholders only
for cause. Moreover, the Restated Certificate of Incorporation provides that
directors may be removed only by the affirmative vote of holders of at least a
majority of the voting power of all the then outstanding shares of stock
entitled to vote generally in the election of directors (the "Voting Stock"),
voting together as a single class.
NO STOCKHOLDER ACTION BY WRITTEN CONSENT; SPECIAL MEETINGS
The Restated Certificate of Incorporation provides that stockholder
action can be taken only at an annual or special meeting of stockholders and
prohibits stockholder action by written consent in lieu of a meeting. The
Restated Certificate of Incorporation and the By-laws provide that, subject to
the rights of holders of any series of Preferred Stock, special meetings of
stockholders can be called only by the Board of Directors, the Chairman of the
Board of Directors or the President. Stockholders are not permitted to call a
special meeting or to require that the Board of Directors call a special meeting
of stockholders. Moreover, the business permitted to be conducted at any
special meeting of stockholders is limited to the purpose or purposes specified
in the written notice of such meeting.
The provisions of the Restated Certificate of Incorporation
prohibiting stockholder action by written consent may have the effect of
delaying consideration of a stockholder proposal until the next annual meeting
unless a special meeting is called by the Board of Directors, the Chairman of
the Board of Directors or the President. These provisions would also prevent
the holders of a majority of the voting power of the Voting Stock from using the
written consent procedure to take stockholder action and from taking action by
consent without giving all the stockholders of the Company entitled to vote on a
proposed action the opportunity to participate in determining such proposed
action. Moreover, a stockholder could not force stockholder consideration of a
proposal over the opposition
12
of the Board of Directors, the Chairman of the Board of Directors or the
President by calling a special meeting of stockholders prior to the time the
Board of Directors, the Chairman of the Board of Directors or the President
believes such consideration to be appropriate.
ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS AND STOCKHOLDER PROPOSALS
The By-laws establish an advance notice procedure with regard to the
nomination, other than by or at the direction of the Board of Directors, of
candidates for election as directors (the "Nomination Procedure") and with
regard to business to be brought before an annual or special meeting of
stockholders of the Company (the "Business Procedure").
The Nomination Procedure provides that, subject to the rights of
holders of any series of Preferred Stock, if any, only persons who are nominated
by, or at the direction of, the Board of Directors or by a stockholder who has
given timely written notice to the Secretary prior to the meeting at which
directors are to be elected, will be eligible for election as directors of the
Company. The Business Procedure provides that at an annual or special meeting
only such business may be conducted as has been specified in the notice of
meeting, brought before the meeting by or at the direction of the Board of
Directors or by a stockholder who has given timely written notice to the
Secretary of such stockholder's intention to bring such business before the
meeting. Under the Nomination Procedure or the Business Procedure, to be
timely, notice must be received by the Company not less than 75 days nor more
than 90 days prior to the annual or special meeting of stockholders, provided,
however, that in the event that less than 90 days' notice or prior public
disclosure of the meeting date is given or made to stockholders, notice by the
stockholder to be timely must be received not later than the fifteenth day
following the day on which such notice of the date of the meeting was mailed or
such public disclosure was made, whichever first occurs.
Under the Nomination Procedure, a stockholder's notice to the Company
proposing to nominate a person for election as a director must contain certain
information (i) about each proposed nominee, including, without limitation, (a)
the name, age, business address and residence address of the nominee, (b) the
principal occupation or employment of the nominee, (c) the class, series and
number of shares of capital stock of the Company which are beneficially owned by
the nominee, and (d) any other information relating to the nominee that is
required to be disclosed in solicitations of proxies for election of directors
pursuant to the Rules and Regulations of the Commission under the Exchange Act
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as director if elected) and (ii) about the
stockholder proposing to nominate such person, including, without limitation,
the name and record address of the stockholder and the class, series and number
of shares of capital stock of the Company which are beneficially owned by the
stockholder. The Company may require any proposed nominee to furnish such other
information as may reasonably be required by the Company to determine the
eligibility of such proposed nominee to serve as a director of the Company.
Under the Business Procedure, a stockholder's notice relating to the conduct of
business other than the nomination of directors at an annual meeting must
contain certain information about such business and about the proposing
stockholder including, without limitation, a brief description of the business
desired to be brought before the meeting, the name and record address of the
proposing stockholder, the class, series and number of shares of capital stock
of the Company owned by the proposing stockholder and a description of any
material interest of the stockholder in such business. If the officer presiding
at a meeting determines that a person was not nominated in accordance with the
Nomination Procedure, such person will not be eligible for election as a
director and such nomination shall be disregarded. If such presiding officer
determines that
13
business was not properly brought before such meeting in accordance with the
Business Procedure, such business will not be transacted at such meeting.
By requiring advance notice of nominations by stockholders, the
Nomination Procedure will afford the Board of Directors a meaningful opportunity
to consider the qualifications of the proposed nominees and, to the extent
deemed necessary or desirable by the Board of Directors, to inform stockholders
about such qualification. By requiring advance notice of proposed business, the
Business Procedure will provide a more orderly procedure for conducting annual
meetings of stockholders and, to the extent deemed necessary or desirable by the
Board of Directors, will provide the Board of Directors with a meaningful
opportunity to inform stockholders, prior to such meetings, of any business
proposed to be conducted at such meetings, together with any recommendation of
the Board of Directors' position as to action to be taken with respect to such
business, so as to enable stockholders better to determine whether they desire
to attend such a meeting or grant a proxy to the Board of Directors as to the
disposition of any such business. Although the Restated Certificate of
Incorporation and the By-laws do not give the Board of Directors any power to
approve or disapprove stockholder nominations for the election of directors or
proposals for action, they may have the affect of precluding a contest for the
election of directors or the consideration of stockholder proposals if the
proper procedures are not followed, and of discouraging or deterring a third
party from conducting a solicitation of proxies to elect its own slate of
directors or to approve its proposal without regard to whether consideration of
such nominees or proposals might be harmful or beneficial to the Company and its
stockholders.
PREFERRED STOCK
The Restated Certificate of Incorporation authorizes the Board of
Directors to issue one or more series of Preferred Stock and to determine, with
respect to any series of Preferred Stock, the powers, designations, preferences,
optional or other rights, if any, and the qualifications, limitations or
restrictions thereof.
The Company believes that the ability of the Board of Directors to
issue one or more series of Preferred Stock will provide increased flexibility
in structuring possible future financings and acquisitions, and in meeting other
corporate needs which might arise. The authorized shares of Preferred Stock, as
well as shares of Common Stock, will be available for issuance without further
action by the Company's stockholders, unless such action is required by
applicable law or the rules of any stock exchange on which the Company's
securities may be listed or applicable rules of any self-regulatory
organization. If the approval of the Company's stockholders is not required for
the issuance of shares of Preferred Stock or Common Stock, the Board of
Directors does not intend to seek stockholder approval. The Board of Directors
will make any determination to issue such shares based on its judgment as to the
best interests of the Company and its stockholders. The Board of Directors, in
so acting, could issue Preferred Stock having terms that could discourage an
acquisition attempt or other transaction that some or a majority of the
stockholders might believe to be in their best interests or in which
stockholders might receive a premium for their stock over the then current
market price of such stock. The Company has no present plan to issue any shares
of the Preferred Stock, although 80,000 shares of Series A Junior Preferred
Stock have been designated and reserved for future issuance pursuant to the
Rights Agreement.
14
AMENDMENT OF THE BY-LAWS AND CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF
INCORPORATION
Under the DGCL, the stockholders have the right to adopt, amend or
repeal the by-laws of a corporation. In addition, if the certificate of
incorporation so provides, the by-laws may be amended by the board of directors.
The By-laws provide that they may be amended by the Board of Directors or
stockholders, provided that if the amendment is to be adopted by the
stockholders, the affirmative vote of the holders of at least 66 2/3 percent of
the Voting Stock, voting together as a single class, is required. Other
provisions set forth in the Restated Certificate of Incorporation relate to the
election and the term of directors, the prohibition of stockholder action
without a meeting, calling a stockholders' meeting, the elimination of personal
liability of directors and the amendment of the By-laws only by the affirmative
vote of the holders of at least 66 2/3 percent of the Voting Stock, voting
together as a single class.
ANTI-TAKEOVER STATUTE
Section 203 of the DGCL prohibits certain transactions between a
Delaware corporation and an "interested stockholder," which is defined therein
as a person who, together with any affiliates and/or associates of such person,
beneficially owns, directly or indirectly, 15 percent or more of the outstanding
voting shares of a Delaware corporation. This provision prohibits certain
business combinations (defined broadly to include mergers, consolidations, sales
or other dispositions of assets having an aggregate value in excess of 10
percent of the consolidated assets of the corporation, and certain transactions
that would increase the interested stockholder's proportionate share ownership
in the corporation) between an interested stockholder and a corporation for a
period of three years after the date the interested stockholder acquired its
stock unless (i) the business combination is approved by the corporation's Board
of Directors prior to the date the interested stockholder acquired shares, (ii)
the interested stockholder acquired at least 85 percent of the voting stock of
the corporation in the transaction in which it became an interested stockholder
or (iii) the business combination is approved by a majority of the board of
directors and by the affirmative vote of 66 2/3 percent of the votes entitled to
be cast by disinterested stockholders at an annual or special meeting. The
Restated Certificate of Incorporation and By-laws do not exclude the Company
from the restrictions imposed under Section 203 of the DGCL.
STOCKHOLDER RIGHTS PLAN
The following description of the Rights Agreement is qualified in its
entirety by reference to the Rights Agreement, which has been incorporated by
reference herein and a copy of which may be obtained as described under
"AVAILABLE INFORMATION."
At a meeting held on January 23, 1992 the Board of Directors adopted
the Rights Agreement. The Rights Agreement provides that one Right will be
issued with each share of the Common Stock issued (whether originally issued or
from the Company's treasury) on or after the date of the Distribution and prior
to the Rights Distribution Date (as hereinafter defined). The Rights are not
exercisable until the Rights Distribution Date and will expire at the close of
business on February 28, 2002 unless previously redeemed by the Company as
described below. When exercisable, each Right entitles the owner to purchase
from the Company one-hundredth of a share of Series A Junior Participating
Preferred Stock at a purchase price of $100.
15
Except as described below, the Rights will be evidenced by all the
Common Stock certificates and will be transferred with the Common Stock
certificates, and no separate Rights certificates will be distributed. The
Rights will separate from the Common Stock and a "Rights Distribution Date" will
occur upon the earlier of (i) 10 days following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 15 percent
or more of the outstanding shares of the Common Stock (the "Stock Acquisition
Date") and (ii) 10 business days following the commencement of a tender offer or
exchange offer that would result in a person or group becoming an Acquiring
Person.
After the Rights Distribution Date, Rights certificates will be mailed
to holders of record of the Common Stock as of the Rights Distribution Date and
thereafter the separate Rights certificates alone will represent the Rights.
The Series A Junior Participating Preferred Stock issuable upon
exercise of the Rights will be entitled to a minimum preferential quarterly
dividend payment of $.01 per share and will be entitled to an aggregate dividend
of 100 times the dividend, if any, declared per share of Common Stock. In the
event of liquidation, the holders of the Series A Junior Participating Preferred
Stock will be entitled to a minimum preferential liquidation payment of $1 per
share and will be entitled to an aggregate payment of 100 times the payment made
per share of the Common Stock. Each share of Series A Junior Participating
Preferred Stock will have 100 votes and will vote together with the Common
Stock. In the event of any merger, consolidation or other transaction in which
shares of the Common Stock are changed or exchanged, each share of Series A
Junior Participating Preferred Stock will be entitled to receive 100 times the
amount received per share of the Common Stock. These rights are protected by
customary antidilution provisions. Because of the nature of the Series A Junior
Participating Preferred Stock's dividend, liquidation and voting rights, the
value of a share of Series A Junior Participating Preferred Stock purchasable
upon exercise of each Right should approximate the value of one share of the
Common Stock.
In the event that a person becomes an Acquiring Person (except
pursuant to a tender offer or an exchange offer for all outstanding shares of
the Common Stock at a price and on terms determined by at least a majority of
the members of the Board of Directors who are not officers of the Company and
who are not representatives, nominees, affiliates or associates of an Acquiring
Person, to be (i) at a price which is fair to the Company stockholders and (ii)
otherwise in the best interests of the Company and its stockholders (a
"Qualifying Offer")), each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price, the
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the exercise price of the
Right. Notwithstanding any of the foregoing, following occurrence of any such
event, all Rights that are or (under certain circumstances specified in the
Rights Agreement) were beneficially owned by any Acquiring Person (or certain
related parties) will be null and void. However, Rights are not exercisable
following the occurrence of the event set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving entity or the Common Stock
is changed or exchanged (other than a merger which follows a Qualifying Offer
and satisfies certain other requirements) or (ii) 50 percent or more of the
Company's assets or earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon the exercise
16
thereof at the then current exercise price common stock of the acquiring company
having a value equal to two times the exercise price of the Right.
At any time until 10 days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of the Rights will be to receive the $.01 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for the Common Stock (or other consideration) or for common stock of
the acquiring company as set forth above.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors prior to the Rights Distribution Date. After the Rights
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board of Directors in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person) or to shorten or lengthen any time period under the Rights
Agreement, provided that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
The Rights have certain anti-takeover effects as they will cause
substantial dilution to a person or group that acquires a substantial interest
in the Company without the prior approval of the Board of Directors. Among the
effects is that the Rights could discourage a takeover attempt that might
otherwise allow the holders of Common Stock to sell such Common Stock at a
premium to the then current market price or which might otherwise be beneficial
to stockholders.
LEGAL MATTERS
The validity of the shares of Common Stock and the associated Rights
offered hereby will be passed upon for the Company by Richard J. Lubasch, Senior
Vice President, General Counsel and Secretary of the Company. Mr. Lubasch owns
shares of the Company's capital stock and options to acquire additional shares
of the Company's capital stock.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report (Form l0-K) 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.
17
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
-----------
TABLE OF CONTENTS
Page
- ------------------------------------------------
Available Information........................... 2
Incorporation of Certain Documents by
Reference..................................... 2
Risk Factors.................................... 4
The Company..................................... 7
Recent Developments............................. 8
Selling Stockholders............................ 9
Plan of Distribution............................ 9
Use of Proceeds................................. 10
Description of Capital Stock.................... 10
Purposes and Effects of Certain Provisions of
the Restated Certificate of Incorporation, the
By-laws and the Rights Agreement............... 11
Legal Matters................................... 17
Experts......................................... 17
- --------------------------------------------------------------------------------
820,404 SHARES
CELLULAR COMMUNICATIONS OF
PUERTO RICO, INC.
COMMON STOCK
___________________
PROSPECTUS
___________________
May __, 1996
==================================================================
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
-------------------------------------------
Securities and Exchange Commission filing fee $ 7,673.61
Exchange Listing Fees $ 16,500.00*
Legal fees and expenses $ 20,000.00
Accounting Fees and Expenses $ 5,000.00
Miscellaneous $ 10,000.00*
-----------
Total $ 59,173.61
===========
_____________
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") grants each corporation organized thereunder, such as the
Registrant, the power to indemnify its directors and officers against
liabilities for certain of their acts. Article VIII of the Registrant's By-laws
provides for indemnification of directors and officers of the Registrant to the
full extent permitted by the DGCL.
Section 102(b) (7) of the DGCL permits a provision in the certificate
of incorporation of each corporation organized thereunder, such as the
Registrant, eliminating or limiting, with certain exceptions, the personal
liability of a director to the corporation or its stockholders for monetary
damages for certain breaches of fiduciary duty as a director. Article TENTH of
the Registrant's Restated Certificate of Incorporation eliminates the personal
liability of directors to the full extent permitted by the DGCL.
The foregoing statements are subject to the detailed provisions of
Sections 145 and 102(b) (7) of the DGCL and Article TENTH of the Registrant's
Restated Certificate of Incorporation and Article VIII of the Registrant's By-
laws.
ITEM 16. EXHIBITS
--------
2.1 Agreement and Plan of Reorganization, dated December 26, 1995, by
and among Registrant and its successors and assigns, HMZ San Juan Inc., a
Connecticut corporation, and its successors and assigns, Henry Zachs,
Newton Brenner, Christopher Jenkins, and CCPR Services, Inc., a Delaware
corporation, and its successors and assigns
2.2 Agreement and Plan of Reorganization, dated December 26, 1995, by
and among Registrant and its successors and assigns, National Telephone
Company, a Delaware corporation, and its successors and assigns, Waring
Partridge, and CCPR Services, Inc., a Delaware corporation, and its
successors and assigns
2.3 Agreement, dated December 26, 1995, by and among Registrant and its
successors and assigns, Pacific Cellular Telephone Systems, a California
limited partnership, and its successors and assigns, David Abel, Estate of
Danny Arnold, Estate of Robert Austin, The Ed and Natalie Friendly Trust,
Nathan Golden, Jeffrey Gordon, Eugene Goodwin, Rabbi Leon Kahane, Frank
Kilpatrick, Lawrence Family Trust, Perry Leff, Donald Meaders, George
Newhart, Kenneth Newmark, Susan Newmark, Pierce O'Donnell, Don Rickles,
Barbara Rickles, Ronald Rizzo, Anne Roberts, Larry Scharf, Bart Sokolow,
Ronald Shlensky, Anthony Thompson, Tayemi Thompson and CCPR Services, Inc.,
a Delaware corporation, and its successors and assigns
3.1 Registrant's Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to Registrant's Registration Statement on Form S-
1, File No. 33-44420)
3.2 Registrant's By-Laws (incorporated by reference to Exhibit 3.2 to
Registrant's Registration Statement on Form S-1, File No. 33-44420)
3.3 Certificate of Designation with respect to Series A Junior Participating
Preferred Stock of the Registrant (incorporated by reference to Exhibit 4.1
to Registrant's Registration Statement on Form S-1, File No. 33-44420)
4.1 Specimen of Common Stock Certificate (incorporated by reference to Exhibit
4.1, to Registrant's Annual Report on Form 10-K for the year ended December
31, 1991, File No. 0-19869)
4.2 Rights Agreement, dated as of January 24, 1992, by and between Registrant
and Continental Stock Transfer & Trust Company, as Rights Agent
(incorporated by reference to Exhibit 4.2 to Registrant's Registration
Statement on Form S-1, File No. 33-44420)
5.1 Opinion of Richard J. Lubasch, Esq., General Counsel to Registrant,
regarding the legality of the shares being registered hereby
23.1 Consent of Ernst & Young, LLP, independent auditors to the Registrant
23.2 Consent of Richard J. Lubasch, Esq., General Counsel to Registrant
(included in Exhibit 5.1)
24.1 Powers of Attorney (included on signature page)
ITEM 17. UNDERTAKINGS
------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-2
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF NEW YORK, STATE OF NEW YORK, ON MAY 8, 1996.
CELLULAR COMMUNICATIONS OF
PUERTO RICO, INC.
(Registrant)
By: /s/ Richard J. Lubasch
---------------------------------
Richard J. Lubasch
Senior Vice President, General
Counsel and Secretary
POWER OF ATTORNEY
We, the undersigned directors and officers of Cellular Communications
of Puerto Rico, Inc. and each of us, do hereby constitute and appoint George S.
Blumenthal and Richard J. Lubasch our true and lawful attorneys-in-fact and
agents, with power of substitution, to do any and all acts and things in our
name and behalf in our capacities as directors and officers and to execute any
and all instruments for us and in our names in the capacities indicated above,
which said attorneys-in-fact and agents may deem necessary or advisable to
enable said corporation to comply with the Securities Act of 1933, as amended,
and any rules, regulations, and requirements of the Securities and Exchange
Commission in connection with this Registration Statement, including
specifically, but without limitation, power and authority to sign for us or any
of us in our names in the capacities indicated below, and any and all amendments
(including post-effective amendments) hereto, and we do hereby ratify and
confirm all that the said attorneys-in-fact and agents, or their substitute or
substitutes, shall do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
Name Title Date
- ---------------------- ------------------------------ --------------------
/s/ George S. Blumenthal Chief Executive Officer, May 8, 1996
- ------------------------ Treasurer and Director
George S. Blumenthal (Principal Executive Officer)
/s/ J. Barclay Knapp President and Director May 8, 1996
- ------------------------ (Principal Operating and
J. Barclay Knapp Financial Officer)
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/s/ Gregg Gorelick Vice President - Con- May 8, 1996
- ----------------------- troller (Principal
Gregg Gorelick Accounting Officer)
/s/ Sidney R. Knafel Director May 8, 1996
- -----------------------
Sidney R. Knafel
/s/ Ted H. McCourtney Director May 8, 1996
- -----------------------
Ted H. McCourtney
/s/ Del Mintz Director May 8, 1996
- -----------------------
Del Mintz
/s/ Alan J. Patricof Director May 8, 1996
- -----------------------
Alan J. Patricof
/s/ Warran Potash Director May 8, 1996
- -----------------------
Warren Potash
II-5
EXHIBIT INDEX
Exhibit Description Page No.
- ------- ----------- --------
2.1 Agreement and Plan of Reorganization, dated December 26, 1995, by
and among Registrant and its successors and assigns, HMZ San Juan Inc., a
Connecticut corporation, and its successors and assigns, Henry Zachs,
Newton Brenner, Christopher Jenkins, and CCPR Services, Inc., a Delaware
corporation, and its successors and assigns
2.2 Agreement and Plan of Reorganization, dated December 26, 1995, by
and among Registrant and its successors and assigns, National Telephone
Company, a Delaware corporation, and its successors and assigns, Waring
Partridge, and CCPR Services, Inc., a Delaware corporation, and its
successors and assigns
2.3 Agreement, dated December 26, 1995, by and among Registrant and its
successors and assigns, Pacific Cellular Telephone Systems, a California
limited partnership, and its successors and assigns, David Abel, Estate
of Danny Arnold, Estate of Robert Austin, The Ed and Natalie Friendly
Trust, Nathan Golden, Jeffrey Gordon, Eugene Goodwin, Rabbi Leon Kahane,
Frank Kilpatrick, Lawrence Family Trust, Perry Leff, Donald Meaders,
George Newhart, Kenneth Newmark, Susan Newmark, Pierce O'Donnell, Don
Rickles, Barbara Rickles, Ronald Rizzo, Anne Roberts, Larry Scharf, Bart
Sokolow, Ronald Shlensky, Anthony Thompson, Tayemi Thompson and CCPR
Services, Inc., a Delaware corporation, and its successors and assigns
3.1 Registrant's Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to Registrant's Registration Statement on Form
S-1, File No. 33-44420)
3.2 Registrant's By-Laws (incorporated by reference to Exhibit 3.2 to
Registrant's Registration Statement on Form S-1, File No. 33-44420)
3.3 Certificate of Designation with respect to Series A Junior Participating
Preferred Stock of the Registrant (incorporated by reference to Exhibit
4.1 to Registrant's Registration Statement on Form S-1, File No. 33-
44420)
4.1 Specimen of Common Stock Certificate (incorporated by reference to Exhibit
4.1, to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1991, File No. 0-19869)
4.2 Rights Agreement, dated as of January 24, 1992, by and between Registrant
and Continental Stock Transfer & Trust Company, as Rights Agent
(incorporated by reference to Exhibit 4.2 to Registrant's Registration
Statement on Form S-1, File No. 33-44420)
5.1 Opinion of Richard J. Lubasch, Esq., General Counsel to Registrant,
regarding the legality of the shares being registered hereby
23.1 Consent of Ernst & Young, LLP, independent auditors to the Registrant
23.2 Consent of Richard J. Lubasch, Esq., General Counsel to Registrant
(included in Exhibit 5.1)
24.1 Powers of Attorney (included on signature page)
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