VOTING AGREEMENT
VOTING AGREEMENT (the "Agreement"), dated as of December 22,
1998, between the undersigned stockholder ("Stockholder") of Vanguard
Cellular Systems, Inc., a North Carolina corporation (the "Company"), and
AT&T Corp., a New York corporation ("Parent").
WHEREAS, prior to the execution and delivery of this Agreement,
the Company and Parent have entered into an Agreement and Plan of Merger
dated as of October 2, 1998 (the "Merger Agreement"), providing for the
merger of the Company with and into a wholly-owned subsidiary of Parent (the
"Merger") pursuant to the terms and conditions thereof; and
WHEREAS, as an inducement and a condition to Parent entering into
the Merger Agreement, various stockholders of the Company signed voting
agreements with Parent, which agreements restrict the transfer of the Class A
Common Stock, par value $0.01 per share, of the Company (the "Common Stock")
owned by such stockholders; and
WHEREAS, in accordance with such restrictions it is necessary for
Stockholder to sign this Agreement to receive certain shares of the Common
Stock;
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Representations of Stockholder. Stockholder represents
that:
(a) such Stockholder is or may become the beneficial owner of
the number of shares of Common Stock set forth opposite such Stockholder's
name on Exhibit A (such Stockholder's "Shares");
(b) except as may be denoted in Exhibit A, as of the date
hereof such Stockholder does not beneficially own (as such term is defined in
the Securities Exchange Act of 1934, as amended (the "1934 Act")) or own of
record any shares of Common Stock other than such Stockholder's Shares, but
excluding any shares of Common Stock which such Stockholder has the right to
obtain upon the exercise of stock options outstanding on the date hereof;
(c) such Stockholder has the right, power and authority to
execute and deliver this Agreement and to perform such Stockholder's
obligations under this Agreement, and this Agreement has been duly executed
and delivered by such Stockholder and constitutes a valid and legally binding
agreement of such Stockholder, enforceable in accordance with its terms; and
such execution, delivery and performance by such Stockholder of this
Agreement will not (i) conflict with, require a consent, waiver or approval
under, or result in a breach of or default under, any of the terms of any
contract, commitment or other obligation (written or oral) to which such
Stockholder is a party or by which such Stockholder is bound; (ii) violate
any order, writ, injunction, decree or statute, or any rule or regulation,
applicable to Stockholder or any of the properties or assets of Stockholder;
or (iii) result in the creation of, or impose any obligation
on such Stockholder to create, any Lien (as defined in the Merger Agreement),
charge or other encumbrance of any nature whatsoever upon the Shares, other than
in favor of Parent; and
(d) there are no named beneficiaries of the Xxxxxx-Xxxxxx
Foundation.
The representations and warranties contained herein shall be made
as of the date hereof and as of each date from the date hereof through and
including the date that the Merger is consummated or this Agreement is
terminated in accordance with its terms.
2. Agreement to Vote Shares. Stockholder shall be present (in
person or by proxy) at and vote his Shares and any New Shares (as defined in
Section 4 hereof), and shall cause any holder of record of his Shares or New
Shares to be present and vote, (a) in favor of adoption and approval of the
Merger Agreement and the Merger (and each other action and transaction
contemplated by the Merger Agreement or by this Agreement) and (b) against
any Acquisition Proposal (as defined in the Merger Agreement) other than the
Merger (or any other Acquisition Proposal of Parent) and against any proposed
action or transaction that would prevent or intentionally delay consummation
of the Merger (or other Acquisition Proposal of Parent) or is otherwise
inconsistent therewith at every meeting of the stockholders of the Company at
which any such matters are considered and at every adjournment thereof (and,
if applicable, in connection with any request or solicitation of written
consents of stockholders). Any such vote shall be cast, or consent shall be
given, in accordance with such procedures relating thereto as shall ensure
that it is duly counted for purposes of determining that a quorum is present
and for purposes of recording the results of such vote or consent.
Stockholder shall deliver to Parent upon request a proxy substantially in the
form attached hereto as Exhibit B, which proxy shall be coupled with an
interest and irrevocable to the extent permitted under North Carolina law,
with the total number of such Stockholder's Shares and any New Shares
correctly indicated thereon. Stockholder hereby revokes any and all previous
proxies granted with respect to his Shares. Stockholder shall also use his
reasonable best efforts to take, or cause to be taken, all action, and do, or
cause to be done, all things necessary or advisable in order to consummate
and make effective the transactions contemplated by this Agreement.
3. No Voting Trusts. After the date hereof, Stockholder
agrees that he will not, nor will he permit any entity under his control to,
deposit any Shares in a voting trust or subject any Shares to any Lien or
agreement, arrangement or understanding with respect to the voting of such
Shares other than agreements entered into with Parent.
4. Additional Purchases. Stockholder agrees that in the event
(a) of any stock dividend, stock split, recapitalization, reclassification,
combination or exchange of shares of stock of the Company on, of or affecting
the Shares of such Stockholder, (b) such Stockholder purchases or otherwise
acquires beneficial ownership of any shares of Common Stock after the
execution of this Agreement (including by exercise of options), or (c) such
Stockholder acquires the right to vote or share in the voting of any shares
of Common Stock other than the Shares (collectively, "New Shares"), such
Stockholder shall deliver promptly to Parent upon request an irrevocable
proxy substantially in the form attached hereto as Exhibit B with respect to
such New
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Shares. Stockholder also agrees that any New Shares acquired or purchased by him
shall be subject to the terms of this Agreement and shall constitute Shares to
the same extent as if they were owned by such Stockholder on the date hereof.
5. Option Shares.
(a) Subject to the terms and conditions set forth herein,
Stockholder hereby grants to Parent an irrevocable option (the "Option") to
purchase, in whole or in part, such Stockholder's Shares and such
Stockholder's New Shares at a purchase price equal to the Per Share Cash
Amount (as defined in the Merger Agreement) per share; provided, however,
that if the Per Share Cash Amount under the Merger Agreement or any amendment
thereto is ever increased or if Parent shall otherwise offer to the
Stockholders of the Company an increased consideration for all of their
shares (the "Greater Consideration"), then the purchase price per share under
the Option shall be increased to equal such new Per Share Cash Amount or
Greater Consideration; and provided further that if Parent has exercised the
Option within 12 months prior to such increase in the Per Share Cash Amount
or Greater Consideration, then Parent shall pay to each Stockholder an amount
equal to the product of the number of shares previously purchased from such
Stockholder pursuant to the Option and the amount of increase between the old
Per Share Cash Amount and the new Per Share Cash Amount or Greater
Consideration, as applicable.
(b) Parent may exercise the Option, in whole or in part, at any
time and from time to time, after the first to occur of (i) any event as a
result of which Parent shall be entitled to receive a termination fee
pursuant to Section 7.2(e) of the Merger Agreement in the amount of $52.5
million pursuant to part (1) or part (2) of such Section or in the amount of
$22.5 million pursuant to part (3) of such Section or (ii) the breach by any
Stockholder of Section 2 of this Agreement (the first of such events to
occur, a "Purchase Event"); provided, however, that except as provided in the
last sentence of this Section 5(b), the Option shall terminate and be of no
further force and effect upon the earliest to occur of (A) the Effective Time
(as defined in the Merger Agreement), (B) 12 months and one day after the
occurrence of a termination of the Merger Agreement in accordance with
Section 7.1 (d), (e), (f) or (g), (C) a termination of the Merger Agreement
in accordance with Section 7.1(a), (b), (c) or (h) of the Merger Agreement
and (D) 18 months after the Outside Date as defined in Section 7.1(e) of the
Merger Agreement. Notwithstanding the termination of the Option, Parent
shall be entitled to exercise the Option or receive the Cash Payment Amount
if it has given written notice of its intent to exercise the Option or
receive the Cash Payment Amount in accordance with the terms hereof prior to
the termination of the Option and the termination of the Option shall not
affect any rights hereunder which by their terms do not terminate or expire
prior to or as of such termination.
(c) In the event that Parent wishes to exercise the Option, it
shall send to such Stockholder a written notice (the date of which being
herein referred to as the "Notice Date") to that effect which notice also
specifies the total number of shares Parent will purchase pursuant to such
exercise, and a date not earlier than three business days nor later than 15
business days from the Notice Date for the closing of such purchase (the
"Option Closing Date"); provided, however, that (i) if the closing of the
purchase and sale pursuant to the Option (the "Option
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Closing") cannot be consummated by reason of any applicable judgment, decree,
order, law or regulation (including, without limitation, the rules and
regulations of the FCC), the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated and (ii) without limiting the
foregoing, if prior notification to or approval of any Governmental Entity (as
defined in the Merger Agreement) is required in connection with such purchase or
any other transaction contemplated hereby, Parent and such Stockholder shall
promptly file the required notice or application for approval and shall
cooperate in the expeditious filing of such notice or application, and, in the
case of any prior notification or approval required in connection with such
purchase, the period of time that otherwise would run pursuant to this sentence
shall run instead from the date on which, as the case may be, (A) any required
notification period has expired or been terminated or (B) any required approval
has been obtained, and in either event, any requisite waiting period has expired
or been terminated. The place of the Option Closing shall be at the offices of
Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, and the
time of the Option Closing shall be 10:00 a.m. (Eastern Time) on the Option
Closing Date.
(d) At the Option Closing, Parent (or its designee) shall pay
to each Stockholder an amount equal to the product of (x) the Per Share Cash
Amount or Greater Consideration, as applicable, and (y) the number of shares
being purchased from such Stockholder pursuant to the exercise of the
Option. Such payment shall be in immediately available funds by wire
transfer to a bank account designated in writing by such Stockholder.
(e) At the Option Closing, simultaneously with the delivery of
the amount specified in Section 5(d), each Stockholder shall deliver to
Parent (or its designee) a certificate or certificates representing its
shares to be purchased at the Option Closing, which shares shall be free and
clear of all Liens, claims, charges and encumbrances of any kind whatsoever,
except for such encumbrances or proxies in favor of Parent arising hereunder,
and a new Option evidencing the rights of the Parent (or its designee) to
purchase the balance of such Stockholder's shares purchasable hereunder.
6. Cash Election.
(a) In lieu of exercising the Option, by notice, Parent may
require such Stockholder to make a cash payment to Parent in the amount (the
"Cash Payment Amount") equal to the amount by which (A) the Market Price (as
defined below) exceeds (B) the Per Share Cash Amount, multiplied by the sum
of (i) the number of such Stockholder's Shares and (ii) the number of such
Stockholder's New Shares. Upon receipt of such notice, the Stockholder shall
be permitted to sell a sufficient number of Shares to pay the Cash Payment
Amount, if Stockholder shall, within five business days of such notice, sell
such Shares, provided that Stockholder shall use reasonable best efforts to
achieve good execution and shall consult with Parent with respect to the
manner of disposition. The term "Market Price" shall mean the closing price
(as measured by the last completed trade) for shares of Common Stock on the
date of Parent's election, or if Stockholder elects to sell Shares to pay the
Cash Payment Amount and has complied with the
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proviso to the immediately preceding sentence, the average price per Share
actually realized in such sale.
(b) Parent may exercise its right to require such Stockholder
to pay the Cash Payment Amount pursuant to this Section by surrendering for such
purpose to such Stockholder, at the Company's principal office, a copy of this
Agreement, accompanied by a written notice or notices stating that Parent elects
to require such Stockholder to pay the Cash Payment Amount in accordance with
the provisions of this Section. Within five(or, in the case of a sale of Shares
under (a) above to fund the Cash Payment Amount, eight) business days after the
surrender of the Option and the receipt of such notice or notices relating
thereto, such Stockholder shall deliver or cause to be delivered to Parent the
Cash Payment Amount by wire to the account designated by Parent in immediately
available funds.
(c) If Stockholder at any time after delivery of a notice of
election by Parent to take the Cash Payment Amount pursuant to this Section
is prohibited under applicable law or regulation from selling Shares in order
to deliver to Parent the Cash Payment Amount in full, and Stockholder is
required to sell Shares to fund the Cash Payment Amount, then (i) such
Stockholder hereby undertakes to use such Stockholder's reasonable best
efforts, to the extent within the control of such Stockholder, to obtain all
required regulatory and legal approvals and to file any required notices, in
each case as promptly as practicable in order to accomplish such sales and
(ii) if Stockholder is unable to effect sales within four days after the
receipt of notice, such Stockholder shall be permitted to pay the Cash
Payment Amount to Parent in Shares valued at the Market Price.
7. No Encumbrances.
(a) Except as expressly contemplated by this Agreement,
Stockholder's Shares and the certificates representing such Shares are now,
and at all times during the term hereof will be, held by such Stockholder, or
by a nominee or custodian for the benefit of such Stockholder, free and clear
of all liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever (other than to the extent set forth on Schedule 1 to this
Agreement), except for any such encumbrances or proxies arising hereunder.
(b) Notwithstanding the foregoing, any Stockholder which has
received a notice of election by Parent (or its designee) to receive the Cash
Payment Amount shall be permitted, between receipt of such notice and the
time on which the Cash Payment Amount is due to be paid, to sell such number
of Shares as may be necessary to satisfy such obligation, as described in
Section 6(a) above.
(c) Any transfer by Stockholder of its Shares to Parent
pursuant to the Option shall pass to and unconditionally vest in Parent good
and valid title to such Stockholder's Shares and New Shares, free and clear
of all claims, liens, restrictions, security interests, pledges, limitations
and encumbrances whatsoever.
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8. Acquisition Proposals. Stockholder agrees that such
Stockholder (i) shall not, directly or indirectly, initiate, solicit, encourage
or otherwise facilitate any inquiries or the making of any Acquisition Proposal
and (ii) has terminated any discussions or negotiations with, and the provision
of information or data to, any Person (other than Parent) respecting an
Acquisition Proposal. Such Stockholder further agrees that he shall not,
directly or indirectly, provide any confidential information or data to any
Person (as defined in the Merger Agreement) relating to or in contemplation of
an Acquisition Proposal or engage in any negotiations or discussions relating to
or in contemplation of an Acquisition Proposal. Such Stockholder will notify
Parent immediately if any inquiries, proposals or offers respecting an
Acquisition Proposal are received by, any such information or data is requested
from, or any such discussions or negotiations are sought to be initiated or
continued with, such Stockholder indicating, in connection with such notice, the
name of such Person and the material terms and conditions of any proposals or
offers, and shall keep Parent apprised with respect to the status and terms
thereof.
9. Appraisal Rights. Stockholder agrees not to exercise any
rights (including, without limitation, under Article 13 of the North Carolina
Business Corporation Act) to demand appraisal of any Common Stock which may
arise with respect to the Merger.
10. Affiliates Letter. Stockholder shall execute and deliver
on a timely basis an Affiliate Letter (as defined in the Merger Agreement).
11. Reliance by Parent. Stockholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance
upon Stockholder's execution and delivery of this Agreement.
12. Specific Performance. Each party hereto severally
acknowledges that it will be impossible to measure in money the damage to the
other parties if the party hereto fails to comply with any of the obligations
imposed by this Agreement, that every such obligation is material and that,
in the event of any such failure, the other parties will not have an adequate
remedy at law or damages. Accordingly, each party hereto severally agrees
that injunctive relief or other equitable remedy, in addition to remedies at
law or damages, is the appropriate remedy for any such failure and will not
oppose the granting of such relief on the basis that any other party has an
adequate remedy at law. Each party hereto severally agrees that it will not
seek, and agrees to waive any requirement for, the securing or posting of a
bond in connection with any other party's seeking or obtaining such equitable
relief.
13. Heirs, Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and assigns and shall not be assignable without
the written consent of all other parties hereto other than any assignment in
whole or in part by Parent.
14. Entire Agreement. This Agreement supersedes all prior
agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and contains the entire agreement among the parties
with respect to the subject matter hereof. This Agreement may not be
amended, supplemented or modified, and no provisions hereof may be modified
or
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waived, except by an instrument in writing signed by all the parties hereto. No
waiver of any provisions hereof by any party shall be deemed a waiver of any
other provisions hereof by any such party, nor shall any such waiver be deemed a
continuing waiver of any provision hereof by such party.
15. Miscellaneous.
(a) Expenses. Each of the parties hereto shall bear and pay
all costs and expenses incurred by it or on its behalf in connection with the
negotiation of this Agreement, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(b) Amendment. This Agreement may not be amended, except by an
instrument in writing signed on behalf of each of the parties.
(c) This Agreement shall be deemed a contract made under, and
for all purposes shall be construed in accordance with, the internal laws of
the State of New York without regard to principles of conflicts of law,
except for those provisions relating to the voting and the proxy which shall
be governed by North Carolina law.
(d) Severability. If any provision of this Agreement or the
application of such provision to any person or circumstances shall be held
invalid by a court of competent jurisdiction, the remainder of the provision
held invalid and the application of such provision to persons or
circumstances, other than the party as to which it is held invalid, shall not
be affected.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
(f) Termination. This Agreement shall terminate upon
termination of the Option.
(g) Headings. All Section headings herein are for convenience
of reference only and are not part of this Agreement and no construction or
reference shall be derived therefrom.
(h) Notices. All notices, requests, claims, demands, and other
communications under this Agreement must be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed), or sent by
overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
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(i) if to Parent, to
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Silk; and
(ii) if to the Stockholder, to such Stockholder c/o
The Xxxxxx-Xxxxxx Foundation
c/o Piedmont Financial Company
X.X. Xxx 00000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
with a copy to:
Xxxxxx & Xxxxxxx
53rd at Third Avenue, Suite 1000
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxx
and to:
Vanguard Cellular Systems, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx
(i) Further Assurances. In the event of any exercise of the
Option or election to take the Cash Payment Amount, each of the Company,
Parent and Stockholder shall execute
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and deliver all other documents and instruments and take all other action that
may be reasonably necessary in order to consummate the transactions contemplated
by such exercise.
(j) Stockholder shall cause certificates for the Shares and New
Shares to have typed or printed thereon a restrictive legend which shall read
substantially as follows (if and to the extent true and necessary in light of
legal and factual circumstances existing at such time):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN PROVISIONS AS SET FORTH IN THE
VOTING AGREEMENT, DATED AS OF DECEMBER 22, 1998, A
COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF
VANGUARD CELLULAR SYSTEMS, INC. AT ITS PRINCIPAL
EXECUTIVE OFFICES, WHICH CONTAINS RESTRICTIONS ON THE
VOTING AND TRANSFER THEREOF."
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first written above.
AT&T CORP.
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: General Attorney and
Assistant Secretary
The Xxxxxx-Xxxxxx Foundation
By: /s/ X. Xxxxxxxxxx Xxxxxx, Jr.
Name: X. Xxxxxxxxxx Xxxxxx, Jr.
Title: President
EXHIBIT A
STOCKHOLDER
Number of
Shares of Type of
Name Common Stock Ownership
----- ------------ ---------
The Xxxxxx-Xxxxxx The greater of 11,852 Beneficial
Foundation shares or number of
shares having a value
of $300,000.
EXHIBIT B
FORM OF PROXY
The undersigned stockholder, for consideration received, hereby
appoints [PARENT DESIGNEES] and each of them as my proxies, with full power
of substitution in each of them, to cast on behalf of the undersigned all
votes entitled to be cast by the holder of the shares of Class A Common
Stock, par value $0.01 per share, of Vanguard Cellular Systems, Inc., a North
Carolina corporation (the "Company"), owned by the undersigned at the Special
Meeting of Stockholders of the Company to be held [DATE, TIME AND PLACE] and
at any adjournment thereof (i) "FOR" approval and adoption of the Agreement
and Plan of Merger, dated as of October 2, 1998, between the Company and AT&T
Corp., a New York corporation ("Parent"), providing for the merger (the
"Merger") of the Company with and into a wholly-owned subsidiary of Parent,
and the Merger and (ii) "AGAINST" any proposal or offer with respect to a
merger, reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving,
or any purchase of any substantial portion of the assets of, or any equity
securities of, or any transaction that would involve the transfer or
potential transfer of control of, the Company other than the Merger and any
proposed action or transaction that would prevent or intentionally delay
consummation of the Merger or is otherwise inconsistent therewith. This
proxy is coupled with an interest and is irrevocable until such time as the
Voting Agreement, dated as of December 22, 1998, between a certain
stockholder of the Company, the undersigned, and Parent terminates in
accordance with its terms.
Dated _____________________, 1998
________________________________
(Signature of Stockholder)
VOTING AGREEMENT
VOTING AGREEMENT (the "Agreement"), dated as of December 22, 1998,
between the undersigned stockholder ("Stockholder") of Vanguard Cellular
Systems, Inc., a North Carolina corporation (the "Company"), and AT&T Corp., a
New York corporation ("Parent").
WHEREAS, prior to the execution and delivery of this Agreement, the
Company and Parent have entered into an Agreement and Plan of Merger dated as of
October 2, 1998 (the "Merger Agreement"), providing for the merger of the
Company with and into a wholly-owned subsidiary of Parent (the "Merger")
pursuant to the terms and conditions thereof; and
WHEREAS, as an inducement and a condition to Parent entering into
the Merger Agreement, various stockholders of the Company signed voting
agreements with Parent, which agreements restrict the transfer of the Class A
Common Stock, par value $0.01 per share, of the Company (the "Common Stock")
owned by such stockholders; and
WHEREAS, in accordance with such restrictions it is necessary for
Stockholder to sign this Agreement to receive certain shares of the Common
Stock;
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Representations of Stockholder. Stockholder represents
that:
(a) such Stockholder is or may become the beneficial owner of the
number of shares of Common Stock set forth opposite such Stockholder's name on
Exhibit A (such Stockholder's "Shares");
(b) except as may be denoted in Exhibit A, as of the date hereof
such Stockholder does not beneficially own (as such term is defined in the
Securities Exchange Act of 1934, as amended (the "1934 Act")) or own of record
any shares of Common Stock other than such Stockholder's Shares, but excluding
any shares of Common Stock which such Stockholder has the right to obtain upon
the exercise of stock options outstanding on the date hereof;
(c) such Stockholder has the right, power and authority to execute
and deliver this Agreement and to perform such Stockholder's obligations under
this Agreement, and this Agreement has been duly executed and delivered by such
Stockholder and constitutes a valid and legally binding agreement of such
Stockholder, enforceable in accordance with its terms; and such execution,
delivery and performance by such Stockholder of this Agreement will not (i)
conflict with, require a consent, waiver or approval under, or result in a
breach of or default under, any of the terms of any contract, commitment or
other obligation (written or oral) to which such Stockholder is a party or by
which such Stockholder is bound; (ii) violate any order, writ, injunction,
decree or statute, or any rule or regulation, applicable to Stockholder or any
of the properties or assets of Stockholder; or (iii) result in the creation of,
or impose any obligation
on such Stockholder to create, any Lien (as defined in the Merger Agreement),
charge or other encumbrance of any nature whatsoever upon the Shares, other than
in favor of Parent; and
(d) there are no named beneficiaries of the Leeolou Family
Foundation.
The representations and warranties contained herein shall be made as
of the date hereof and as of each date from the date hereof through and
including the date that the Merger is consummated or this Agreement is
terminated in accordance with its terms.
2. Agreement to Vote Shares. Stockholder shall be present (in
person or by proxy) at and vote his Shares and any New Shares (as defined in
Section 4 hereof), and shall cause any holder of record of his Shares or New
Shares to be present and vote, (a) in favor of adoption and approval of the
Merger Agreement and the Merger (and each other action and transaction
contemplated by the Merger Agreement or by this Agreement) and (b) against any
Acquisition Proposal (as defined in the Merger Agreement) other than the Merger
(or any other Acquisition Proposal of Parent) and against any proposed action or
transaction that would prevent or intentionally delay consummation of the Merger
(or other Acquisition Proposal of Parent) or is otherwise inconsistent therewith
at every meeting of the stockholders of the Company at which any such matters
are considered and at every adjournment thereof (and, if applicable, in
connection with any request or solicitation of written consents of stock-
holders). Any such vote shall be cast, or consent shall be given, in accordance
with such procedures relating thereto as shall ensure that it is duly counted
for purposes of determining that a quorum is present and for purposes of
recording the results of such vote or consent. Stockholder shall deliver to
Parent upon request a proxy substantially in the form attached hereto as Exhibit
B, which proxy shall be coupled with an interest and irrevocable to the extent
permitted under North Carolina law, with the total number of such Stockholder's
Shares and any New Shares correctly indicated thereon. Stockholder hereby
revokes any and all previous proxies granted with respect to his Shares.
Stockholder shall also use his reasonable best efforts to take, or cause to be
taken, all action, and do, or cause to be done, all things necessary or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement.
3. No Voting Trusts. After the date hereof, Stockholder agrees
that he will not, nor will he permit any entity under his control to, deposit
any Shares in a voting trust or subject any Shares to any Lien or agreement,
arrangement or understanding with respect to the voting of such Shares other
than agreements entered into with Parent.
4. Additional Purchases. Stockholder agrees that in the event (a)
of any stock dividend, stock split, recapitalization, reclassification,
combination or exchange of shares of stock of the Company on, of or affecting
the Shares of such Stockholder, (b) such Stockholder purchases or otherwise
acquires beneficial ownership of any shares of Common Stock after the execution
of this Agreement (including by exercise of options), or (c) such Stockholder
acquires the right to vote or share in the voting of any shares of Common Stock
other than the Shares (collectively, "New Shares"), such Stockholder shall
deliver promptly to Parent upon request an irrevocable proxy substantially in
the form attached hereto as Exhibit B with respect to such New
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Shares. Stockholder also agrees that any New Shares acquired or purchased by him
shall be subject to the terms of this Agreement and shall constitute Shares to
the same extent as if they were owned by such Stockholder on the date hereof.
5. Option Shares.
(a) Subject to the terms and conditions set forth herein,
Stockholder hereby grants to Parent an irrevocable option (the "Option") to
purchase, in whole or in part, such Stockholder's Shares and such Stockholder's
New Shares at a purchase price equal to the Per Share Cash Amount (as defined in
the Merger Agreement) per share; provided, however, that if the Per Share Cash
Amount under the Merger Agreement or any amendment thereto is ever increased or
if Parent shall otherwise offer to the Stockholders of the Company an increased
consideration for all of their shares (the "Greater Consideration"), then the
purchase price per share under the Option shall be increased to equal such new
Per Share Cash Amount or Greater Consideration; and provided further that if
Parent has exercised the Option within 12 months prior to such increase in the
Per Share Cash Amount or Greater Consideration, then Parent shall pay to each
Stockholder an amount equal to the product of the number of shares previously
purchased from such Stockholder pursuant to the Option and the amount of
increase between the old Per Share Cash Amount and the new Per Share Cash Amount
or Greater Consideration, as applicable.
(b) Parent may exercise the Option, in whole or in part, at any
time and from time to time, after the first to occur of (i) any event as a
result of which Parent shall be entitled to receive a termination fee pursuant
to Section 7.2(e) of the Merger Agreement in the amount of $52.5 million
pursuant to part (1) or part (2) of such Section or in the amount of $22.5
million pursuant to part (3) of such Section or (ii) the breach by any
Stockholder of Section 2 of this Agreement (the first of such events to occur, a
"Purchase Event"); provided, however, that except as provided in the last
sentence of this Section 5(b), the Option shall terminate and be of no further
force and effect upon the earliest to occur of (A) the Effective Time (as
defined in the Merger Agreement), (B) 12 months and one day after the occurrence
of a termination of the Merger Agreement in accordance with Section 7.1 (d),
(e), (f) or (g), (C) a termination of the Merger Agreement in accordance with
Section 7.1(a), (b), (c) or (h) of the Merger Agreement and (D) 18 months after
the Outside Date as defined in Section 7.1(e) of the Merger Agreement.
Notwithstanding the termination of the Option, Parent shall be entitled to
exercise the Option or receive the Cash Payment Amount if it has given written
notice of its intent to exercise the Option or receive the Cash Payment Amount
in accordance with the terms hereof prior to the termination of the Option and
the termination of the Option shall not affect any rights hereunder which by
their terms do not terminate or expire prior to or as of such termination.
(c) In the event that Parent wishes to exercise the Option, it
shall send to such Stockholder a written notice (the date of which being herein
referred to as the "Notice Date") to that effect which notice also specifies the
total number of shares Parent will purchase pursuant to such exercise, and a
date not earlier than three business days nor later than 15 business days from
the Notice Date for the closing of such purchase (the "Option Closing Date");
provided, however, that (i) if the closing of the purchase and sale pursuant to
the Option (the "Option
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Closing") cannot be consummated by reason of any applicable judgment, decree,
order, law or regulation (including, without limitation, the rules and
regulations of the FCC), the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated and (ii) without limiting the
foregoing, if prior notification to or approval of any Governmental Entity (as
defined in the Merger Agreement) is required in connection with such purchase or
any other transaction contemplated hereby, Parent and such Stockholder shall
promptly file the required notice or application for approval and shall
cooperate in the expeditious filing of such notice or application, and, in the
case of any prior notification or approval required in connection with such
purchase, the period of time that otherwise would run pursuant to this sentence
shall run instead from the date on which, as the case may be, (A) any required
notification period has expired or been terminated or (B) any required approval
has been obtained, and in either event, any requisite waiting period has expired
or been terminated. The place of the Option Closing shall be at the offices of
Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, and the
time of the Option Closing shall be 10:00 a.m. (Eastern Time) on the Option
Closing Date.
(d) At the Option Closing, Parent (or its designee) shall pay to
each Stockholder an amount equal to the product of (x) the Per Share Cash Amount
or Greater Consideration, as applicable, and (y) the number of shares being
purchased from such Stockholder pursuant to the exercise of the Option. Such
payment shall be in immediately available funds by wire transfer to a bank
account designated in writing by such Stockholder.
(e) At the Option Closing, simultaneously with the delivery of the
amount specified in Section 5(d), each Stockholder shall deliver to Parent (or
its designee) a certificate or certificates representing its shares to be
purchased at the Option Closing, which shares shall be free and clear of all
Liens, claims, charges and encumbrances of any kind whatsoever, except for such
encumbrances or proxies in favor of Parent arising hereunder, and a new Option
evidencing the rights of the Parent (or its designee) to purchase the balance of
such Stockholder's shares purchasable hereunder.
6. Cash Election.
(a) In lieu of exercising the Option, by notice, Parent may
require such Stockholder to make a cash payment to Parent in the amount (the
"Cash Payment Amount") equal to the amount by which (A) the Market Price (as
defined below) exceeds (B) the Per Share Cash Amount, multiplied by the sum of
(i) the number of such Stockholder's Shares and (ii) the number of such
Stockholder's New Shares. Upon receipt of such notice, the Stockholder shall be
permitted to sell a sufficient number of Shares to pay the Cash Payment Amount,
if Stockholder shall, within five business days of such notice, sell such
Shares, provided that Stockholder shall use reasonable best efforts to achieve
good execution and shall consult with Parent with respect to the manner of
disposition. The term "Market Price" shall mean the closing price (as measured
by the last completed trade) for shares of Common Stock on the date of Parent's
election, or if Stockholder elects to sell Shares to pay the Cash Payment Amount
and has complied with the
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proviso to the immediately preceding sentence, the average price per Share
actually realized in such sale.
(b) Parent may exercise its right to require such Stockholder to
pay the Cash Payment Amount pursuant to this Section by surrendering for such
purpose to such Stockholder, at the Company's principal office, a copy of this
Agreement, accompanied by a written notice or notices stating that Parent elects
to require such Stockholder to pay the Cash Payment Amount in accordance with
the provisions of this Section. Within five (or, in the case of a sale of Shares
under (a) above to fund the Cash Payment Amount, eight) business days after the
surrender of the Option and the receipt of such notice or notices relating
thereto, such Stockholder shall deliver or cause to be delivered to Parent the
Cash Payment Amount by wire to the account designated by Parent in immediately
available funds.
(c) If Stockholder at any time after delivery of a notice of
election by Parent to take the Cash Payment Amount pursuant to this Section is
prohibited under applicable law or regulation from selling Shares in order to
deliver to Parent the Cash Payment Amount in full, and Stockholder is required
to sell Shares to fund the Cash Payment Amount, then (i) such Stockholder hereby
undertakes to use such Stockholder's reasonable best efforts, to the extent
within the control of such Stockholder, to obtain all required regulatory and
legal approvals and to file any required notices, in each case as promptly as
practicable in order to accomplish such sales and (ii) if Stockholder is unable
to effect sales within four days after the receipt of notice, such Stockholder
shall be permitted to pay the Cash Payment Amount to Parent in Shares valued at
the Market Price.
7. No Encumbrances.
(a) Except as expressly contemplated by this Agreement,
Stockholder's Shares and the certificates representing such Shares are now, and
at all times during the term hereof will be, held by such Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free and clear of all
liens, claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever (other than
to the extent set forth on Schedule 1 to this Agreement), except for any such
encumbrances or proxies arising hereunder.
(b) Notwithstanding the foregoing, any Stockholder which has
received a notice of election by Parent (or its designee) to receive the Cash
Payment Amount shall be permitted, between receipt of such notice and the time
on which the Cash Payment Amount is due to be paid, to sell such number of
Shares as may be necessary to satisfy such obligation, as described in Section
6(a) above.
(c) Any transfer by Stockholder of its Shares to Parent pursuant to
the Option shall pass to and unconditionally vest in Parent good and valid title
to such Stockholder's Shares and New Shares, free and clear of all claims,
liens, restrictions, security interests, pledges, limitations and encumbrances
whatsoever.
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8. Acquisition Proposals. Stockholder agrees that such Stock-
holder (i) shall not, directly or indirectly, initiate, solicit, encourage or
otherwise facilitate any inquiries or the making of any Acquisition Proposal and
(ii) has terminated any discussions or negotiations with, and the provision of
information or data to, any Person (other than Parent) respecting an Acquisition
Proposal. Such Stockholder further agrees that he shall not, directly or
indirectly, provide any confidential information or data to any Person (as
defined in the Merger Agreement) relating to or in contemplation of an
Acquisition Proposal or engage in any negotiations or discussions relating to or
in contemplation of an Acquisition Proposal. Such Stockholder will notify Parent
immediately if any inquiries, proposals or offers respecting an Acquisition
Proposal are received by, any such information or data is requested from, or any
such discussions or negotiations are sought to be initiated or continued with,
such Stockholder indicating, in connection with such notice, the name of such
Person and the material terms and conditions of any proposals or offers, and
shall keep Parent apprised with respect to the status and terms thereof.
9. Appraisal Rights. Stockholder agrees not to exercise any
rights (including, without limitation, under Article 13 of the North Carolina
Business Corporation Act) to demand appraisal of any Common Stock which may
arise with respect to the Merger.
10. Affiliates Letter. Stockholder shall execute and deliver on a
timely basis an Affiliate Letter (as defined in the Merger Agreement).
11. Reliance by Parent. Stockholder understands and acknowledges
that Parent is entering into the Merger Agreement in reliance upon Stockholder's
execution and delivery of this Agreement.
12. Specific Performance. Each party hereto severally acknowledges
that it will be impossible to measure in money the damage to the other parties
if the party hereto fails to comply with any of the obligations imposed by this
Agreement, that every such obligation is material and that, in the event of any
such failure, the other parties will not have an adequate remedy at law or
damages. Accordingly, each party hereto severally agrees that injunctive relief
or other equitable remedy, in addition to remedies at law or damages, is the
appropriate remedy for any such failure and will not oppose the granting of such
relief on the basis that any other party has an adequate remedy at law. Each
party hereto severally agrees that it will not seek, and agrees to waive any
requirement for, the securing or posting of a bond in connection with any other
party's seeking or obtaining such equitable relief.
13. Heirs, Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
successors and assigns and shall not be assignable without the written consent
of all other parties hereto other than any assignment in whole or in part by
Parent.
14. Entire Agreement. This Agreement supersedes all prior
agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and contains the entire agreement among the parties with
respect to the subject matter hereof. This Agreement may not be amended,
supplemented or modified, and no provisions hereof may be modified or
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waived, except by an instrument in writing signed by all the parties hereto. No
waiver of any provisions hereof by any party shall be deemed a waiver of any
other provisions hereof by any such party, nor shall any such waiver be deemed a
continuing waiver of any provision hereof by such party.
15. Miscellaneous.
(a) Expenses. Each of the parties hereto shall bear and pay all
costs and expenses incurred by it or on its behalf in connection with the
negotiation of this Agreement, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
(b) Amendment. This Agreement may not be amended, except by an
instrument in writing signed on behalf of each of the parties.
(c) This Agreement shall be deemed a contract made under, and for
all purposes shall be construed in accordance with, the internal laws of the
State of New York without regard to principles of conflicts of law, except for
those provisions relating to the voting and the proxy which shall be governed by
North Carolina law.
(d) Severability. If any provision of this Agreement or the
application of such provision to any person or circumstances shall be held
invalid by a court of competent jurisdiction, the remainder of the provision
held invalid and the application of such provision to persons or circumstances,
other than the party as to which it is held invalid, shall not be affected.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
(f) Termination. This Agreement shall terminate upon termination
of the Option.
(g) Headings. All Section headings herein are for convenience of
reference only and are not part of this Agreement and no construction or
reference shall be derived therefrom.
(h) Notices. All notices, requests, claims, demands, and other
communications under this Agreement must be in writing and shall be deemed given
if delivered personally, telecopied (which is confirmed), or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
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(i) if to Parent, to
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Silk; and
(ii) if to the Stockholder, to such Stockholder c/o
Leeolou Family Foundation
c/o Xx. Xxxxxxx X. Xxxxxxx
0000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
with a copy to:
Xxxxxx & Xxxxxxx
53rd at Third Avenue, Suite 1000
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxx
and to:
Vanguard Cellular Systems, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx
(i) Further Assurances. In the event of any exercise of the Option
or election to take the Cash Payment Amount, each of the Company, Parent and
Stockholder shall execute
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and deliver all other documents and instruments and take all other action that
may be reasonably necessary in order to consummate the transactions contemplated
by such exercise.
(j) Stockholder shall cause certificates for the Shares and New
Shares to have typed or printed thereon a restrictive legend which shall read
substantially as follows (if and to the extent true and necessary in light of
legal and factual circumstances existing at such time):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN PROVISIONS AS SET FORTH IN THE VOTING AGREEMENT, DATED AS OF
DECEMBER 22, 1998, A COPY OF WHICH MAY BE OBTAINED FROM THE
SECRETARY OF VANGUARD CELLULAR SYSTEMS, INC. AT ITS PRINCIPAL
EXECUTIVE OFFICES, WHICH CONTAINS RESTRICTIONS ON THE VOTING AND
TRANSFER THEREOF."
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
AT&T CORP.
By: /s/ Xxxxxx Xxxx
--------------------------------------
Name: Xxxxxx Xxxx
Title: General Attorney and
Assistant Secretary
Leeolou Family Foundation
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
EXHIBIT A
STOCKHOLDER
Number of
Shares of Type of
Name Common Stock Ownership
---- ------------ ---------
Leeolou Family
Foundation 80,800 Beneficial
EXHIBIT B
FORM OF PROXY
The undersigned stockholder, for consideration received, hereby
appoints [PARENT DESIGNEES] and each of them as my proxies, with full power of
substitution in each of them, to cast on behalf of the undersigned all votes
entitled to be cast by the holder of the shares of Class A Common Stock, par
value $0.01 per share, of Vanguard Cellular Systems, Inc., a North Carolina
corporation (the "Company"), owned by the undersigned at the Special Meeting of
Stockholders of the Company to be held [DATE, TIME AND PLACE] and at any
adjournment thereof (i) "FOR" approval and adoption of the Agreement and Plan of
Merger, dated as of October 2, 1998, between the Company and AT&T Corp., a New
York corporation ("Parent"), providing for the merger (the "Merger") of the
Company with and into a wholly-owned subsidiary of Parent, and the Merger and
(ii) "AGAINST" any proposal or offer with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving, or any purchase of
any substantial portion of the assets of, or any equity securities of, or any
transaction that would involve the transfer or potential transfer of control of,
the Company other than the Merger and any proposed action or transaction that
would prevent or intentionally delay consummation of the Merger or is otherwise
inconsistent therewith. This proxy is coupled with an interest and is
irrevocable until such time as the Voting Agreement, dated as of December 22,
1998, between a certain stockholder of the Company, the undersigned, and Parent
terminates in accordance with its terms.
Dated _____________________, 1998
--------------------------------
(Signature of Stockholder)
VOTING AGREEMENT
VOTING AGREEMENT (the "Agreement"), dated as of December 22, 1998,
between the undersigned stockholder ("Stockholder") of Vanguard Cellular
Systems, Inc., a North Carolina corporation (the "Company"), and AT&T Corp., a
New York corporation ("Parent").
WHEREAS, prior to the execution and delivery of this Agreement, the
Company and Parent have entered into an Agreement and Plan of Merger dated as of
October 2, 1998 (the "Merger Agreement"), providing for the merger of the
Company with and into a wholly-owned subsidiary of Parent (the "Merger")
pursuant to the terms and conditions thereof; and
WHEREAS, as an inducement and a condition to Parent entering into
the Merger Agreement, various stockholders of the Company signed voting
agreements with Parent, which agreements restrict the transfer of the Class A
Common Stock, par value $0.01 per share, of the Company (the "Common Stock")
owned by such stockholders; and
WHEREAS, in accordance with such restrictions it is necessary for
Stockholder to sign this Agreement to receive certain shares of the Common
Stock;
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Representations of Stockholder. Stockholder represents
that:
(a) such Stockholder is or may become the beneficial owner of the
number of shares of Common Stock set forth opposite such Stockholder's name on
Exhibit A (such Stockholder's "Shares");
(b) except as may be denoted in Exhibit A, as of the date hereof
such Stockholder does not beneficially own (as such term is defined in the
Securities Exchange Act of 1934, as amended (the "1934 Act")) or own of record
any shares of Common Stock other than such Stockholder's Shares, but excluding
any shares of Common Stock which such Stockholder has the right to obtain upon
the exercise of stock options outstanding on the date hereof;
(c) such Stockholder has the right, power and authority to execute
and deliver this Agreement and to perform such Stockholder's obligations under
this Agreement, and this Agreement has been duly executed and delivered by such
Stockholder and constitutes a valid and legally binding agreement of such
Stockholder, enforceable in accordance with its terms; and such execution,
delivery and performance by such Stockholder of this Agreement will not (i)
conflict with, require a consent, waiver or approval under, or result in a
breach of or default under, any of the terms of any contract, commitment or
other obligation (written or oral) to which such Stockholder is a party or by
which such Stockholder is bound; (ii) violate any order, writ, injunction,
decree or statute, or any rule or regulation, applicable to Stockholder or any
of the properties or assets of Stockholder; or (iii) result in the creation of,
or impose any obligation
on such Stockholder to create, any Lien (as defined in the Merger Agreement),
charge or other encumbrance of any nature whatsoever upon the Shares, other than
in favor of Parent; and
(d) there are no named beneficiaries of the Xxxxxxx Family
Foundation.
The representations and warranties contained herein shall be made as
of the date hereof and as of each date from the date hereof through and
including the date that the Merger is consummated or this Agreement is
terminated in accordance with its terms.
2. Agreement to Vote Shares. Stockholder shall be present (in
person or by proxy) at and vote his Shares and any New Shares (as defined in
Section 4 hereof), and shall cause any holder of record of his Shares or New
Shares to be present and vote, (a) in favor of adoption and approval of the
Merger Agreement and the Merger (and each other action and transaction
contemplated by the Merger Agreement or by this Agreement) and (b) against any
Acquisition Proposal (as defined in the Merger Agreement) other than the Merger
(or any other Acquisition Proposal of Parent) and against any proposed action or
transaction that would prevent or intentionally delay consummation of the Merger
(or other Acquisition Proposal of Parent) or is otherwise inconsistent therewith
at every meeting of the stockholders of the Company at which any such matters
are considered and at every adjournment thereof (and, if applicable, in
connection with any request or solicitation of written consents of
stockholders). Any such vote shall be cast, or consent shall be given, in
accordance with such procedures relating thereto as shall ensure that it is duly
counted for purposes of determining that a quorum is present and for purposes of
recording the results of such vote or consent. Stockholder shall deliver to
Parent upon request a proxy substantially in the form attached hereto as Exhibit
B, which proxy shall be coupled with an interest and irrevocable to the extent
permitted under North Carolina law, with the total number of such Stockholder's
Shares and any New Shares correctly indicated thereon. Stockholder hereby
revokes any and all previous proxies granted with respect to his Shares.
Stockholder shall also use his reasonable best efforts to take, or cause to be
taken, all action, and do, or cause to be done, all things necessary or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement.
3. No Voting Trusts. After the date hereof, Stockholder agrees
that he will not, nor will he permit any entity under his control to, deposit
any Shares in a voting trust or subject any Shares to any Lien or agreement,
arrangement or understanding with respect to the voting of such Shares other
than agreements entered into with Parent.
4. Additional Purchases. Stockholder agrees that in the event (a)
of any stock dividend, stock split, recapitalization, reclassification,
combination or exchange of shares of stock of the Company on, of or affecting
the Shares of such Stockholder, (b) such Stockholder purchases or otherwise
acquires beneficial ownership of any shares of Common Stock after the execution
of this Agreement (including by exercise of options), or (c) such Stockholder
acquires the right to vote or share in the voting of any shares of Common Stock
other than the Shares (collectively, "New Shares"), such Stockholder shall
deliver promptly to Parent upon request an irrevocable proxy substantially in
the form attached hereto as Exhibit B with respect to such New
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Shares. Stockholder also agrees that any New Shares acquired or purchased by him
shall be subject to the terms of this Agreement and shall constitute Shares to
the same extent as if they were owned by such Stockholder on the date hereof.
5. Option Shares.
(a) Subject to the terms and conditions set forth herein,
Stockholder hereby grants to Parent an irrevocable option (the "Option") to
purchase, in whole or in part, such Stockholder's Shares and such Stockholder's
New Shares at a purchase price equal to the Per Share Cash Amount (as defined in
the Merger Agreement) per share; provided, however, that if the Per Share Cash
Amount under the Merger Agreement or any amendment thereto is ever increased or
if Parent shall otherwise offer to the Stockholders of the Company an increased
consideration for all of their shares (the "Greater Consideration"), then the
purchase price per share under the Option shall be increased to equal such new
Per Share Cash Amount or Greater Consideration; and provided further that if
Parent has exercised the Option within 12 months prior to such increase in the
Per Share Cash Amount or Greater Consideration, then Parent shall pay to each
Stockholder an amount equal to the product of the number of shares previously
purchased from such Stockholder pursuant to the Option and the amount of
increase between the old Per Share Cash Amount and the new Per Share Cash Amount
or Greater Consideration, as applicable.
(b) Parent may exercise the Option, in whole or in part, at any
time and from time to time, after the first to occur of (i) any event as a
result of which Parent shall be entitled to receive a termination fee pursuant
to Section 7.2(e) of the Merger Agreement in the amount of $52.5 million
pursuant to part (1) or part (2) of such Section or in the amount of $22.5
million pursuant to part (3) of such Section or (ii) the breach by any
Stockholder of Section 2 of this Agreement (the first of such events to occur, a
"Purchase Event"); provided, however, that except as provided in the last
sentence of this Section 5(b), the Option shall terminate and be of no further
force and effect upon the earliest to occur of (A) the Effective Time (as
defined in the Merger Agreement), (B) 12 months and one day after the occurrence
of a termination of the Merger Agreement in accordance with Section 7.1 (d),
(e), (f) or (g), (C) a termination of the Merger Agreement in accordance with
Section 7.1(a), (b), (c) or (h) of the Merger Agreement and (D) 18 months after
the Outside Date as defined in Section 7.1(e) of the Merger Agreement.
Notwithstanding the termination of the Option, Parent shall be entitled to
exercise the Option or receive the Cash Payment Amount if it has given written
notice of its intent to exercise the Option or receive the Cash Payment Amount
in accordance with the terms hereof prior to the termination of the Option and
the termination of the Option shall not affect any rights hereunder which by
their terms do not terminate or expire prior to or as of such termination.
(c) In the event that Parent wishes to exercise the Option, it
shall send to such Stockholder a written notice (the date of which being herein
referred to as the "Notice Date") to that effect which notice also specifies the
total number of shares Parent will purchase pursuant to such exercise, and a
date not earlier than three business days nor later than 15 business days from
the Notice Date for the closing of such purchase (the "Option Closing Date");
provided, however, that (i) if the closing of the purchase and sale pursuant to
the Option (the "Option
-3-
Closing") cannot be consummated by reason of any applicable judgment, decree,
order, law or regulation (including, without limitation, the rules and
regulations of the FCC), the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated and (ii) without limiting the
foregoing, if prior notification to or approval of any Governmental Entity (as
defined in the Merger Agreement) is required in connection with such purchase or
any other transaction contemplated hereby, Parent and such Stockholder shall
promptly file the required notice or application for approval and shall
cooperate in the expeditious filing of such notice or application, and, in the
case of any prior notification or approval required in connection with such
purchase, the period of time that otherwise would run pursuant to this sentence
shall run instead from the date on which, as the case may be, (A) any required
notification period has expired or been terminated or (B) any required approval
has been obtained, and in either event, any requisite waiting period has expired
or been terminated. The place of the Option Closing shall be at the offices of
Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, and the
time of the Option Closing shall be 10:00 a.m. (Eastern Time) on the Option
Closing Date.
(d) At the Option Closing, Parent (or its designee) shall pay to
each Stockholder an amount equal to the product of (x) the Per Share Cash Amount
or Greater Consideration, as applicable, and (y) the number of shares being
purchased from such Stockholder pursuant to the exercise of the Option. Such
payment shall be in immediately available funds by wire transfer to a bank
account designated in writing by such Stockholder.
(e) At the Option Closing, simultaneously with the delivery of the
amount specified in Section 5(d), each Stockholder shall deliver to Parent (or
its designee) a certificate or certificates representing its shares to be
purchased at the Option Closing, which shares shall be free and clear of all
Liens, claims, charges and encumbrances of any kind whatsoever, except for such
encumbrances or proxies in favor of Parent arising hereunder, and a new Option
evidencing the rights of the Parent (or its designee) to purchase the balance of
such Stockholder's shares purchasable hereunder.
6. Cash Election.
(a) In lieu of exercising the Option, by notice, Parent may
require such Stockholder to make a cash payment to Parent in the amount (the
"Cash Payment Amount") equal to the amount by which (A) the Market Price (as
defined below) exceeds (B) the Per Share Cash Amount, multiplied by the sum of
(i) the number of such Stockholder's Shares and (ii) the number of such
Stockholder's New Shares. Upon receipt of such notice, the Stockholder shall be
permitted to sell a sufficient number of Shares to pay the Cash Payment Amount,
if Stockholder shall, within five business days of such notice, sell such
Shares, provided that Stockholder shall use reasonable best efforts to achieve
good execution and shall consult with Parent with respect to the manner of
disposition. The term "Market Price" shall mean the closing price (as measured
by the last completed trade) for shares of Common Stock on the date of Parent's
election, or if Stockholder elects to sell Shares to pay the Cash Payment Amount
and has complied with the
-4-
proviso to the immediately preceding sentence, the average price per Share
actually realized in such sale.
(b) Parent may exercise its right to require such Stockholder to
pay the Cash Payment Amount pursuant to this Section by surrendering for such
purpose to such Stockholder, at the Company's principal office, a copy of this
Agreement, accompanied by a written notice or notices stating that Parent elects
to require such Stockholder to pay the Cash Payment Amount in accordance with
the provisions of this Section. Within five (or, in the case of a sale of Shares
under (a) above to fund the Cash Payment Amount, eight) business days after the
surrender of the Option and the receipt of such notice or notices relating
thereto, such Stockholder shall deliver or cause to be delivered to Parent the
Cash Payment Amount by wire to the account designated by Parent in immediately
available funds.
(c) If Stockholder at any time after delivery of a notice of
election by Parent to take the Cash Payment Amount pursuant to this Section is
prohibited under applicable law or regulation from selling Shares in order to
deliver to Parent the Cash Payment Amount in full, and Stockholder is required
to sell Shares to fund the Cash Payment Amount, then (i) such Stockholder hereby
undertakes to use such Stockholder's reasonable best efforts, to the extent
within the control of such Stockholder, to obtain all required regulatory and
legal approvals and to file any required notices, in each case as promptly as
practicable in order to accomplish such sales and (ii) if Stockholder is unable
to effect sales within four days after the receipt of notice, such Stockholder
shall be permitted to pay the Cash Payment Amount to Parent in Shares valued at
the Market Price.
7. No Encumbrances.
(a) Except as expressly contemplated by this Agreement,
Stockholder's Shares and the certificates representing such Shares are now, and
at all times during the term hereof will be, held by such Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free and clear of all
liens, claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever (other than
to the extent set forth on Schedule 1 to this Agreement), except for any such
encumbrances or proxies arising hereunder.
(b) Notwithstanding the foregoing, any Stockholder which has
received a notice of election by Parent (or its designee) to receive the Cash
Payment Amount shall be permitted, between receipt of such notice and the time
on which the Cash Payment Amount is due to be paid, to sell such number of
Shares as may be necessary to satisfy such obligation, as described in Section
6(a) above.
(c) Any transfer by Stockholder of its Shares to Parent pursuant
to the Option shall pass to and unconditionally vest in Parent good and valid
title to such Stockholder's Shares and New Shares, free and clear of all claims,
liens, restrictions, security interests, pledges, limitations and encumbrances
whatsoever.
-5-
8. Acquisition Proposals. Stockholder agrees that such Stock-
holder (i) shall not, directly or indirectly, initiate, solicit, encourage or
otherwise facilitate any inquiries or the making of any Acquisition Proposal and
(ii) has terminated any discussions or negotiations with, and the provision of
information or data to, any Person (other than Parent) respecting an Acquisition
Proposal. Such Stockholder further agrees that he shall not, directly or
indirectly, provide any confidential information or data to any Person (as
defined in the Merger Agreement) relating to or in contemplation of an
Acquisition Proposal or engage in any negotiations or discussions relating to or
in contemplation of an Acquisition Proposal. Such Stockholder will notify Parent
immediately if any inquiries, proposals or offers respecting an Acquisition
Proposal are received by, any such information or data is requested from, or any
such discussions or negotiations are sought to be initiated or continued with,
such Stockholder indicating, in connection with such notice, the name of such
Person and the material terms and conditions of any proposals or offers, and
shall keep Parent apprised with respect to the status and terms thereof.
9. Appraisal Rights. Stockholder agrees not to exercise any
rights (including, without limitation, under Article 13 of the North Carolina
Business Corporation Act) to demand appraisal of any Common Stock which may
arise with respect to the Merger.
10. Affiliates Letter. Stockholder shall execute and deliver on a
timely basis an Affiliate Letter (as defined in the Merger Agreement).
11. Reliance by Parent. Stockholder understands and acknowledges
that Parent is entering into the Merger Agreement in reliance upon Stockholder's
execution and delivery of this Agreement.
12. Specific Performance. Each party hereto severally acknowledges
that it will be impossible to measure in money the damage to the other parties
if the party hereto fails to comply with any of the obligations imposed by this
Agreement, that every such obligation is material and that, in the event of any
such failure, the other parties will not have an adequate remedy at law or
damages. Accordingly, each party hereto severally agrees that injunctive relief
or other equitable remedy, in addition to remedies at law or damages, is the
appropriate remedy for any such failure and will not oppose the granting of such
relief on the basis that any other party has an adequate remedy at law. Each
party hereto severally agrees that it will not seek, and agrees to waive any
requirement for, the securing or posting of a bond in connection with any other
party's seeking or obtaining such equitable relief.
13. Heirs, Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
successors and assigns and shall not be assignable without the written consent
of all other parties hereto other than any assignment in whole or in part by
Parent.
14. Entire Agreement. This Agreement supersedes all prior
agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and contains the entire agreement among the parties with
respect to the subject matter hereof. This Agreement may not be amended,
supplemented or modified, and no provisions hereof may be modified or
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waived, except by an instrument in writing signed by all the parties hereto. No
waiver of any provisions hereof by any party shall be deemed a waiver of any
other provisions hereof by any such party, nor shall any such waiver be deemed a
continuing waiver of any provision hereof by such party.
15. Miscellaneous.
(a) Expenses. Each of the parties hereto shall bear and pay all
costs and expenses incurred by it or on its behalf in connection with the
negotiation of this Agreement, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
(b) Amendment. This Agreement may not be amended, except by an
instrument in writing signed on behalf of each of the parties.
(c) This Agreement shall be deemed a contract made under, and for
all purposes shall be construed in accordance with, the internal laws of the
State of New York without regard to principles of conflicts of law, except for
those provisions relating to the voting and the proxy which shall be governed by
North Carolina law.
(d) Severability. If any provision of this Agreement or the
application of such provision to any person or circumstances shall be held
invalid by a court of competent jurisdiction, the remainder of the provision
held invalid and the application of such provision to persons or circumstances,
other than the party as to which it is held invalid, shall not be affected.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
(f) Termination. This Agreement shall terminate upon termination
of the Option.
(g) Headings. All Section headings herein are for convenience of
reference only and are not part of this Agreement and no construction or
reference shall be derived therefrom.
(h) Notices. All notices, requests, claims, demands, and other
communications under this Agreement must be in writing and shall be deemed given
if delivered personally, telecopied (which is confirmed), or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
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(i) if to Parent, to
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Silk; and
(ii) if to the Stockholder, to such Stockholder c/o
Griffin Family Foundation
c/o Xx. Xxxxxx X. Xxxxxxx
000 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
with a copy to:
Xxxxxx & Xxxxxxx
53rd at Third Avenue, Suite 1000
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxx
and to:
Vanguard Cellular Systems, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx
(i) Further Assurances. In the event of any exercise of the Option
or election to take the Cash Payment Amount, each of the Company, Parent and
Stockholder shall execute
-8-
and deliver all other documents and instruments and take all other action that
may be reasonably necessary in order to consummate the transactions contemplated
by such exercise.
(j) Stockholder shall cause certificates for the Shares and New
Shares to have typed or printed thereon a restrictive legend which shall read
substantially as follows (if and to the extent true and necessary in light of
legal and factual circumstances existing at such time):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN PROVISIONS AS SET FORTH IN THE VOTING AGREEMENT, DATED AS OF
DECEMBER 22, 1998, A COPY OF WHICH MAY BE OBTAINED FROM THE
SECRETARY OF VANGUARD CELLULAR SYSTEMS, INC. AT ITS PRINCIPAL
EXECUTIVE OFFICES, WHICH CONTAINS RESTRICTIONS ON THE VOTING AND
TRANSFER THEREOF."
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
AT&T CORP.
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: General Attorney and
Assistant Secretary
Xxxxxxx Family Foundation
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
EXHIBIT A
STOCKHOLDER
Number of
Shares of Type of
Name Common Stock Ownership
---- ------------ ---------
Xxxxxxx Family 40,000 Beneficial
Foundation
EXHIBIT B
FORM OF PROXY
The undersigned stockholder, for consideration received, hereby
appoints [PARENT DESIGNEES] and each of them as my proxies, with full power of
substitution in each of them, to cast on behalf of the undersigned all votes
entitled to be cast by the holder of the shares of Class A Common Stock, par
value $0.01 per share, of Vanguard Cellular Systems, Inc., a North Carolina
corporation (the "Company"), owned by the undersigned at the Special Meeting of
Stockholders of the Company to be held [DATE, TIME AND PLACE] and at any
adjournment thereof (i) "FOR" approval and adoption of the Agreement and Plan of
Merger, dated as of October 2, 1998, between the Company and AT&T Corp., a New
York corporation ("Parent"), providing for the merger (the "Merger") of the
Company with and into a wholly-owned subsidiary of Parent, and the Merger and
(ii) "AGAINST" any proposal or offer with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving, or any purchase of
any substantial portion of the assets of, or any equity securities of, or any
transaction that would involve the transfer or potential transfer of control of,
the Company other than the Merger and any proposed action or transaction that
would prevent or intentionally delay consummation of the Merger or is otherwise
inconsistent therewith. This proxy is coupled with an interest and is
irrevocable until such time as the Voting Agreement, dated as of December 22,
1998, between a certain stockholder of the Company, the undersigned, and Parent
terminates in accordance with its terms.
Dated _____________________, 1998
--------------------------------
(Signature of Stockholder)
VOTING AGREEMENT
VOTING AGREEMENT (the "Agreement"), dated as of December 22,
1998, between the undersigned stockholder ("Stockholder") of Vanguard
Cellular Systems, Inc., a North Carolina corporation (the "Company"), and
AT&T Corp., a New York corporation ("Parent").
WHEREAS, prior to the execution and delivery of this Agreement,
the Company and Parent have entered into an Agreement and Plan of Merger
dated as of October 2, 1998 (the "Merger Agreement"), providing for the
merger of the Company with and into a wholly-owned subsidiary of Parent (the
"Merger") pursuant to the terms and conditions thereof; and
WHEREAS, as an inducement and a condition to Parent entering into
the Merger Agreement, various stockholders of the Company signed voting
agreements with Parent, which agreements restrict the transfer of the Class A
Common Stock, par value $0.01 per share, of the Company (the "Common Stock")
owned by such stockholders; and
WHEREAS, in accordance with such restrictions it is necessary for
Stockholder to sign this Agreement to receive certain shares of the Common
Stock;
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Representations of Stockholder. Stockholder represents
that:
(a) such Stockholder is or may become the beneficial owner of
the number of shares of Common Stock set forth opposite such Stockholder's
name on Exhibit A (such Stockholder's "Shares");
(b) except as may be denoted in Exhibit A, as of the date
hereof such Stockholder does not beneficially own (as such term is defined in
the Securities Exchange Act of 1934, as amended (the "1934 Act")) or own of
record any shares of Common Stock other than such Stockholder's Shares, but
excluding any shares of Common Stock which such Stockholder has the right to
obtain upon the exercise of stock options outstanding on the date hereof;
(c) such Stockholder has the right, power and authority to
execute and deliver this Agreement and to perform such Stockholder's
obligations under this Agreement, and this Agreement has been duly executed
and delivered by such Stockholder and constitutes a valid and legally binding
agreement of such Stockholder, enforceable in accordance with its terms; and
such execution, delivery and performance by such Stockholder of this
Agreement will not (i) conflict with, require a consent, waiver or approval
under, or result in a breach of or default under, any of the terms of any
contract, commitment or other obligation (written or oral) to which such
Stockholder is a party or by which such Stockholder is bound; (ii) violate
any order, writ, injunction, decree or statute, or any rule or regulation,
applicable to Stockholder or any of the properties or assets of Stockholder;
or (iii) result in the creation of, or impose any obligation
on such Stockholder to create, any Lien (as defined in the Merger Agreement),
charge or other encumbrance of any nature whatsoever upon the Shares, other than
in favor of Parent; and
(d) X. Xxxxxxxxxx Xxxxxx, Jr. and The Xxxxxx-Xxxxxx Foundation are
the sole beneficiaries of the Xxxxxxxx Xxxxxxxxxx Xxxxxx, Xx. Charitable
Remainder Unitrust.
The representations and warranties contained herein shall be made
as of the date hereof and as of each date from the date hereof through and
including the date that the Merger is consummated or this Agreement is
terminated in accordance with its terms.
2. Agreement to Vote Shares. Stockholder shall be present (in
person or by proxy) at and vote his Shares and any New Shares (as defined in
Section 4 hereof), and shall cause any holder of record of his Shares or New
Shares to be present and vote, (a) in favor of adoption and approval of the
Merger Agreement and the Merger (and each other action and transaction
contemplated by the Merger Agreement or by this Agreement) and (b) against
any Acquisition Proposal (as defined in the Merger Agreement) other than the
Merger (or any other Acquisition Proposal of Parent) and against any proposed
action or transaction that would prevent or intentionally delay consummation
of the Merger (or other Acquisition Proposal of Parent) or is otherwise
inconsistent therewith at every meeting of the stockholders of the Company at
which any such matters are considered and at every adjournment thereof (and,
if applicable, in connection with any request or solicitation of written
consents of stockholders). Any such vote shall be cast, or consent shall be
given, in accordance with such procedures relating thereto as shall ensure
that it is duly counted for purposes of determining that a quorum is present
and for purposes of recording the results of such vote or consent.
Stockholder shall deliver to Parent upon request a proxy substantially in the
form attached hereto as Exhibit B, which proxy shall be coupled with an
interest and irrevocable to the extent permitted under North Carolina law,
with the total number of such Stockholder's Shares and any New Shares
correctly indicated thereon. Stockholder hereby revokes any and all previous
proxies granted with respect to his Shares. Stockholder shall also use his
reasonable best efforts to take, or cause to be taken, all action, and do, or
cause to be done, all things necessary or advisable in order to consummate
and make effective the transactions contemplated by this Agreement.
3. No Voting Trusts. After the date hereof, Stockholder
agrees that he will not, nor will he permit any entity under his control to,
deposit any Shares in a voting trust or subject any Shares to any Lien or
agreement, arrangement or understanding with respect to the voting of such
Shares other than agreements entered into with Parent.
4. Additional Purchases. Stockholder agrees that in the event
(a) of any stock dividend, stock split, recapitalization, reclassification,
combination or exchange of shares of stock of the Company on, of or affecting
the Shares of such Stockholder, (b) such Stockholder purchases or otherwise
acquires beneficial ownership of any shares of Common Stock after the
execution of this Agreement (including by exercise of options), or (c) such
Stockholder acquires the right to vote or share in the voting of any shares
of Common Stock other than the Shares
-2-
(collectively, "New Shares"), such Stockholder shall deliver promptly to Parent
upon request an irrevocable proxy substantially in the form attached hereto as
Exhibit B with respect to such New Shares. Stockholder also agrees that any New
Shares acquired or purchased by him shall be subject to the terms of this
Agreement and shall constitute Shares to the same extent as if they were owned
by such Stockholder on the date hereof.
5. Option Shares.
(a) Subject to the terms and conditions set forth herein,
Stockholder hereby grants to Parent an irrevocable option (the "Option") to
purchase, in whole or in part, such Stockholder's Shares and such
Stockholder's New Shares at a purchase price equal to the Per Share Cash
Amount (as defined in the Merger Agreement) per share; provided, however,
that if the Per Share Cash Amount under the Merger Agreement or any amendment
thereto is ever increased or if Parent shall otherwise offer to the
Stockholders of the Company an increased consideration for all of their
shares (the "Greater Consideration"), then the purchase price per share under
the Option shall be increased to equal such new Per Share Cash Amount or
Greater Consideration; and provided further that if Parent has exercised the
Option within 12 months prior to such increase in the Per Share Cash Amount
or Greater Consideration, then Parent shall pay to each Stockholder an amount
equal to the product of the number of shares previously purchased from such
Stockholder pursuant to the Option and the amount of increase between the old
Per Share Cash Amount and the new Per Share Cash Amount or Greater
Consideration, as applicable.
(b) Parent may exercise the Option, in whole or in part, at any
time and from time to time, after the first to occur of (i) any event as a
result of which Parent shall be entitled to receive a termination fee
pursuant to Section 7.2(e) of the Merger Agreement in the amount of $52.5
million pursuant to part (1) or part (2) of such Section or in the amount of
$22.5 million pursuant to part (3) of such Section or (ii) the breach by any
Stockholder of Section 2 of this Agreement (the first of such events to
occur, a "Purchase Event"); provided, however, that except as provided in the
last sentence of this Section 5(b), the Option shall terminate and be of no
further force and effect upon the earliest to occur of (A) the Effective Time
(as defined in the Merger Agreement), (B) 12 months and one day after the
occurrence of a termination of the Merger Agreement in accordance with
Section 7.1 (d), (e), (f) or (g), (C) a termination of the Merger Agreement
in accordance with Section 7.1(a), (b), (c) or (h) of the Merger Agreement
and (D) 18 months after the Outside Date as defined in Section 7.1(e) of the
Merger Agreement. Notwithstanding the termination of the Option, Parent
shall be entitled to exercise the Option or receive the Cash Payment Amount
if it has given written notice of its intent to exercise the Option or
receive the Cash Payment Amount in accordance with the terms hereof prior to
the termination of the Option and the termination of the Option shall not
affect any rights hereunder which by their terms do not terminate or expire
prior to or as of such termination.
(c) In the event that Parent wishes to exercise the Option, it
shall send to such Stockholder a written notice (the date of which being
herein referred to as the "Notice Date") to that effect which notice also
specifies the total number of shares Parent will purchase pursuant to such
exercise, and a date not earlier than three business days nor later than 15
business days from
-3-
the Notice Date for the closing of such purchase (the "Option Closing Date");
provided, however, that (i) if the closing of the purchase and sale pursuant to
the Option (the "Option Closing") cannot be consummated by reason of any
applicable judgment, decree, order, law or regulation (including, without
limitation, the rules and regulations of the FCC), the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which such restriction on consummation has expired or been terminated and (ii)
without limiting the foregoing, if prior notification to or approval of any
Governmental Entity (as defined in the Merger Agreement) is required in
connection with such purchase or any other transaction contemplated hereby,
Parent and such Stockholder shall promptly file the required notice or
application for approval and shall cooperate in the expeditious filing of such
notice or application, and, in the case of any prior notification or approval
required in connection with such purchase, the period of time that otherwise
would run pursuant to this sentence shall run instead from the date on which, as
the case may be, (A) any required notification period has expired or been
terminated or (B) any required approval has been obtained, and in either event,
any requisite waiting period has expired or been terminated. The place of the
Option Closing shall be at the offices of Wachtell, Lipton, Xxxxx & Xxxx, 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, and the time of the Option Closing shall
be 10:00 a.m. (Eastern Time) on the Option Closing Date.
(d) At the Option Closing, Parent (or its designee) shall pay
to each Stockholder an amount equal to the product of (x) the Per Share Cash
Amount or Greater Consideration, as applicable, and (y) the number of shares
being purchased from such Stockholder pursuant to the exercise of the
Option. Such payment shall be in immediately available funds by wire
transfer to a bank account designated in writing by such Stockholder.
(e) At the Option Closing, simultaneously with the delivery of
the amount specified in Section 5(d), each Stockholder shall deliver to
Parent (or its designee) a certificate or certificates representing its
shares to be purchased at the Option Closing, which shares shall be free and
clear of all Liens, claims, charges and encumbrances of any kind whatsoever,
except for such encumbrances or proxies in favor of Parent arising hereunder,
and a new Option evidencing the rights of the Parent (or its designee) to
purchase the balance of such Stockholder's shares purchasable hereunder.
6. Cash Election.
(a) In lieu of exercising the Option, by notice, Parent may
require such Stockholder to make a cash payment to Parent in the amount (the
"Cash Payment Amount") equal to the amount by which (A) the Market Price (as
defined below) exceeds (B) the Per Share Cash Amount, multiplied by the sum
of (i) the number of such Stockholder's Shares and (ii) the number of such
Stockholder's New Shares. Upon receipt of such notice, the Stockholder shall
be permitted to sell a sufficient number of Shares to pay the Cash Payment
Amount, if Stockholder shall, within five business days of such notice, sell
such Shares, provided that Stockholder shall use reasonable best efforts to
achieve good execution and shall consult with Parent with respect to the
manner of disposition. The term "Market Price" shall mean the closing price
(as measured by the last completed trade) for shares of Common Stock on the
date of Parent's election, or if
-4-
Stockholder elects to sell Shares to pay the Cash Payment Amount and has
complied with the proviso to the immediately preceding sentence, the average
price per Share actually realized in such sale.
(b) Parent may exercise its right to require such Stockholder to
pay the Cash Payment Amount pursuant to this Section by surrendering for such
purpose to such Stockholder, at the Company's principal office, a copy of this
Agreement, accompanied by a written notice or notices stating that Parent elects
to require such Stockholder to pay the Cash Payment Amount in accordance with
the provisions of this Section. Within five (or, in the case of a sale of Shares
under (a) above to fund the Cash Payment Amount, eight) business days after the
surrender of the Option and the receipt of such notice or notices relating
thereto, such Stockholder shall deliver or cause to be delivered to Parent the
Cash Payment Amount by wire to the account designated by Parent in immediately
available funds.
(c) If Stockholder at any time after delivery of a notice of
election by Parent to take the Cash Payment Amount pursuant to this Section is
prohibited under applicable law or regulation from selling Shares in order to
deliver to Parent the Cash Payment Amount in full, and Stockholder is required
to sell Shares to fund the Cash Payment Amount, then (i) such Stockholder hereby
undertakes to use such Stockholder's reasonable best efforts, to the extent
within the control of such Stockholder, to obtain all required regulatory and
legal approvals and to file any required notices, in each case as promptly as
practicable in order to accomplish such sales and (ii) if Stockholder is unable
to effect sales within four days after the receipt of notice, such Stockholder
shall be permitted to pay the Cash Payment Amount to Parent in Shares valued at
the Market Price.
7. No Encumbrances.
(a) Except as expressly contemplated by this Agreement,
Stockholder's Shares and the certificates representing such Shares are now,
and at all times during the term hereof will be, held by such Stockholder, or
by a nominee or custodian for the benefit of such Stockholder, free and clear
of all liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever (other than to the extent set forth on Schedule 1 to this
Agreement), except for any such encumbrances or proxies arising hereunder.
(b) Notwithstanding the foregoing, any Stockholder which has
received a notice of election by Parent (or its designee) to receive the Cash
Payment Amount shall be permitted, between receipt of such notice and the
time on which the Cash Payment Amount is due to be paid, to sell such number
of Shares as may be necessary to satisfy such obligation, as described in
Section 6(a) above.
(c) Any transfer by Stockholder of its Shares to Parent
pursuant to the Option shall pass to and unconditionally vest in Parent good
and valid title to such Stockholder's Shares and New Shares, free and clear
of all claims, liens, restrictions, security interests, pledges, limitations
and encumbrances whatsoever.
-5-
8. Acquisition Proposals. Stockholder agrees that such
Stockholder (i) shall not, directly or indirectly, initiate, solicit, encourage
or otherwise facilitate any inquiries or the making of any Acquisition Proposal
and (ii) has terminated any discussions or negotiations with, and the provision
of information or data to, any Person (other than Parent) respecting an
Acquisition Proposal. Such Stockholder further agrees that he shall not,
directly or indirectly, provide any confidential information or data to any
Person (as defined in the Merger Agreement) relating to or in contemplation of
an Acquisition Proposal or engage in any negotiations or discussions relating to
or in contemplation of an Acquisition Proposal. Such Stockholder will notify
Parent immediately if any inquiries, proposals or offers respecting an
Acquisition Proposal are received by, any such information or data is requested
from, or any such discussions or negotiations are sought to be initiated or
continued with, such Stockholder indicating, in connection with such notice, the
name of such Person and the material terms and conditions of any proposals or
offers, and shall keep Parent apprised with respect to the status and terms
thereof.
9. Appraisal Rights. Stockholder agrees not to exercise any
rights (including, without limitation, under Article 13 of the North Carolina
Business Corporation Act) to demand appraisal of any Common Stock which may
arise with respect to the Merger.
10. Affiliates Letter. Stockholder shall execute and deliver
on a timely basis an Affiliate Letter (as defined in the Merger Agreement).
11. Reliance by Parent. Stockholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance
upon Stockholder's execution and delivery of this Agreement.
12. Specific Performance. Each party hereto severally
acknowledges that it will be impossible to measure in money the damage to the
other parties if the party hereto fails to comply with any of the obligations
imposed by this Agreement, that every such obligation is material and that,
in the event of any such failure, the other parties will not have an adequate
remedy at law or damages. Accordingly, each party hereto severally agrees
that injunctive relief or other equitable remedy, in addition to remedies at
law or damages, is the appropriate remedy for any such failure and will not
oppose the granting of such relief on the basis that any other party has an
adequate remedy at law. Each party hereto severally agrees that it will not
seek, and agrees to waive any requirement for, the securing or posting of a
bond in connection with any other party's seeking or obtaining such equitable
relief.
13. Heirs, Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and assigns and shall not be assignable without
the written consent of all other parties hereto other than any assignment in
whole or in part by Parent.
14. Entire Agreement. This Agreement supersedes all prior
agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and contains the entire agreement among the parties
with respect to the subject matter hereof. This Agreement may not be
amended, supplemented or modified, and no provisions hereof may be modified
or
-6-
waived, except by an instrument in writing signed by all the parties
hereto. No waiver of any provisions hereof by any party shall be deemed a
waiver of any other provisions hereof by any such party, nor shall any such
waiver be deemed a continuing waiver of any provision hereof by such party.
15. Miscellaneous.
(a) Expenses. Each of the parties hereto shall bear and pay
all costs and expenses incurred by it or on its behalf in connection with the
negotiation of this Agreement, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(b) Amendment. This Agreement may not be amended, except by an
instrument in writing signed on behalf of each of the parties.
(c) This Agreement shall be deemed a contract made under, and
for all purposes shall be construed in accordance with, the internal laws of
the State of New York without regard to principles of conflicts of law,
except for those provisions relating to the voting and the proxy which shall
be governed by North Carolina law.
(d) Severability. If any provision of this Agreement or the
application of such provision to any person or circumstances shall be held
invalid by a court of competent jurisdiction, the remainder of the provision
held invalid and the application of such provision to persons or
circumstances, other than the party as to which it is held invalid, shall not
be affected.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
(f) Termination. This Agreement shall terminate upon
termination of the Option.
(g) Headings. All Section headings herein are for convenience
of reference only and are not part of this Agreement and no construction or
reference shall be derived therefrom.
(h) Notices. All notices, requests, claims, demands, and other
communications under this Agreement must be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed), or sent by
overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
-7-
(i) if to Parent, to
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Silk; and
(ii) if to the Stockholder, to such Stockholder c/o
Xxxxxxxx Xxxxxxxxxx Xxxxxx, Xx. Charitable Remainder
Unitrust
c/o Piedmont Financial Company
X.X. Xxx 00000
Xxxxxxxxxx, X.X. 00000
with a copy to:
Xxxxxx & Xxxxxxx
53rd at Third Avenue, Suite 1000
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxx
and to:
Vanguard Cellular Systems, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx
(i) Further Assurances. In the event of any exercise of the
Option or election to take the Cash Payment Amount, each of the Company,
Parent and Stockholder shall execute
-8-
and deliver all other documents and instruments and take all other action that
may be reasonably necessary in order to consummate the transactions contemplated
by such exercise.
(j) Stockholder shall cause certificates for the Shares and New
Shares to have typed or printed thereon a restrictive legend which shall read
substantially as follows (if and to the extent true and necessary in light of
legal and factual circumstances existing at such time):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN PROVISIONS AS SET FORTH IN THE
VOTING AGREEMENT, DATED AS OF DECEMBER 22, 1998, A
COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF
VANGUARD CELLULAR SYSTEMS, INC. AT ITS PRINCIPAL
EXECUTIVE OFFICES, WHICH CONTAINS RESTRICTIONS ON THE
VOTING AND TRANSFER THEREOF."
-9-
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first written above.
AT&T CORP.
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: General Attorney and
Assistant Secretary
Xxxxxxxx Xxxxxxxxxx Xxxxxx, Xx.
Charitable Remainder Unitrust
By: /s/ X. Xxxxxxxxxx Xxxxxx, Jr.
Name: X. Xxxxxxxxxx Xxxxxx, Jr.
Title: Trustee
I, X. Xxxxxxxxxx Xxxxxx, Jr., as beneficiary of the Xxxxxxxx
Xxxxxxxxxx Xxxxxx, Xx. Charitable Remainder Unitrust, consent to the signing
of this Agreement by Stockholder.
/s/ X. Xxxxxxxxxx Xxxxxx, Jr.
Name: X. Xxxxxxxxxx Xxxxxx, Jr.
I, The Xxxxxx-Xxxxxx Foundation, as beneficiary of the Xxxxxxxx
Xxxxxxxxxx Xxxxxx, Xx. Charitable Remainder Unitrust, consent to the signing
of this Agreement by Stockholder.
/s/ X. Xxxxxxxxxx Xxxxxx, Jr.
Name: X. Xxxxxxxxxx Xxxxxx, Jr.
President
The Xxxxxx-Xxxxxx Foundation
EXHIBIT A
STOCKHOLDER
Number of
Shares of Type of
Name Common Stock Ownership
---- ------------ ---------
Xxxxxxxx Xxxxxxxxxx Greater of 249,894 Beneficial
Xxxxxx, Jr. Charitable shares of number of
Remainder Unitrust shares having a value
of $6,300,000
EXHIBIT B
FORM OF PROXY
The undersigned stockholder, for consideration received, hereby
appoints [PARENT DESIGNEES] and each of them as my proxies, with full power
of substitution in each of them, to cast on behalf of the undersigned all
votes entitled to be cast by the holder of the shares of Class A Common
Stock, par value $0.01 per share, of Vanguard Cellular Systems, Inc., a North
Carolina corporation (the "Company"), owned by the undersigned at the Special
Meeting of Stockholders of the Company to be held [DATE, TIME AND PLACE] and
at any adjournment thereof (i) "FOR" approval and adoption of the Agreement
and Plan of Merger, dated as of October 2, 1998, between the Company and AT&T
Corp., a New York corporation ("Parent"), providing for the merger (the
"Merger") of the Company with and into a wholly-owned subsidiary of Parent,
and the Merger and (ii) "AGAINST" any proposal or offer with respect to a
merger, reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving,
or any purchase of any substantial portion of the assets of, or any equity
securities of, or any transaction that would involve the transfer or
potential transfer of control of, the Company other than the Merger and any
proposed action or transaction that would prevent or intentionally delay
consummation of the Merger or is otherwise inconsistent therewith. This
proxy is coupled with an interest and is irrevocable until such time as the
Voting Agreement, dated as of December 22, 1998, between a certain
stockholder of the Company, the undersigned, and Parent terminates in
accordance with its terms.
Dated _____________________, 1998
________________________________
(Signature of Stockholder)
VOTING AGREEMENT
VOTING AGREEMENT (the "Agreement"), dated as of December 22,
1998, between the undersigned stockholder ("Stockholder") of Vanguard
Cellular Systems, Inc., a North Carolina corporation (the "Company"), and
AT&T Corp., a New York corporation ("Parent").
WHEREAS, prior to the execution and delivery of this Agreement,
the Company and Parent have entered into an Agreement and Plan of Merger
dated as of October 2, 1998 (the "Merger Agreement"), providing for the
merger of the Company with and into a wholly-owned subsidiary of Parent (the
"Merger") pursuant to the terms and conditions thereof; and
WHEREAS, as an inducement and a condition to Parent entering into
the Merger Agreement, various stockholders of the Company signed voting
agreements with Parent, which agreements restrict the transfer of the Class A
Common Stock, par value $0.01 per share, of the Company (the "Common Stock")
owned by such stockholders; and
WHEREAS, in accordance with such restrictions it is necessary for
Stockholder to sign this Agreement to receive certain shares of the Common
Stock;
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Representations of Stockholder. Stockholder represents
that:
(a) such Stockholder is or may become the beneficial owner of
the number of shares of Common Stock set forth opposite such Stockholder's
name on Exhibit A (such Stockholder's "Shares");
(b) except as may be denoted in Exhibit A, as of the date
hereof such Stockholder does not beneficially own (as such term is defined in
the Securities Exchange Act of 1934, as amended (the "1934 Act")) or own of
record any shares of Common Stock other than such Stockholder's Shares, but
excluding any shares of Common Stock which such Stockholder has the right to
obtain upon the exercise of stock options outstanding on the date hereof;
(c) such Stockholder has the right, power and authority to
execute and deliver this Agreement and to perform such Stockholder's
obligations under this Agreement, and this Agreement has been duly executed
and delivered by such Stockholder and constitutes a valid and legally binding
agreement of such Stockholder, enforceable in accordance with its terms; and
such execution, delivery and performance by such Stockholder of this
Agreement will not (i) conflict with, require a consent, waiver or approval
under, or result in a breach of or default under, any of the terms of any
contract, commitment or other obligation (written or oral) to which such
Stockholder is a party or by which such Stockholder is bound; (ii) violate
any order, writ, injunction, decree or statute, or any rule or regulation,
applicable to Stockholder or any of the properties or assets of Stockholder;
or (iii) result in the creation of, or impose any obligation
on such Stockholder to create, any Lien (as defined in the Merger Agreement),
charge or other encumbrance of any nature whatsoever upon the Shares, other than
in favor of Parent; and
(d) Xxxxxxx X. Xxxxxxx and Xxxx X. Xxxxxxx are the sole
beneficiaries of The Xxxxxxx X. and Xxxx X. Xxxxxxx 1998 Charitable Remainder
Unitrust.
The representations and warranties contained herein shall be made
as of the date hereof and as of each date from the date hereof through and
including the date that the Merger is consummated or this Agreement is
terminated in accordance with its terms.
2. Agreement to Vote Shares. Stockholder shall be present (in
person or by proxy) at and vote his Shares and any New Shares (as defined in
Section 4 hereof), and shall cause any holder of record of his Shares or New
Shares to be present and vote, (a) in favor of adoption and approval of the
Merger Agreement and the Merger (and each other action and transaction
contemplated by the Merger Agreement or by this Agreement) and (b) against
any Acquisition Proposal (as defined in the Merger Agreement) other than the
Merger (or any other Acquisition Proposal of Parent) and against any proposed
action or transaction that would prevent or intentionally delay consummation
of the Merger (or other Acquisition Proposal of Parent) or is otherwise
inconsistent therewith at every meeting of the stockholders of the Company at
which any such matters are considered and at every adjournment thereof (and,
if applicable, in connection with any request or solicitation of written
consents of stockholders). Any such vote shall be cast, or consent shall be
given, in accordance with such procedures relating thereto as shall ensure
that it is duly counted for purposes of determining that a quorum is present
and for purposes of recording the results of such vote or consent.
Stockholder shall deliver to Parent upon request a proxy substantially in the
form attached hereto as Exhibit B, which proxy shall be coupled with an
interest and irrevocable to the extent permitted under North Carolina law,
with the total number of such Stockholder's Shares and any New Shares
correctly indicated thereon. Stockholder hereby revokes any and all previous
proxies granted with respect to his Shares. Stockholder shall also use his
reasonable best efforts to take, or cause to be taken, all action, and do, or
cause to be done, all things necessary or advisable in order to consummate
and make effective the transactions contemplated by this Agreement.
3. No Voting Trusts. After the date hereof, Stockholder
agrees that he will not, nor will he permit any entity under his control to,
deposit any Shares in a voting trust or subject any Shares to any Lien or
agreement, arrangement or understanding with respect to the voting of such
Shares other than agreements entered into with Parent.
4. Additional Purchases. Stockholder agrees that in the event
(a) of any stock dividend, stock split, recapitalization, reclassification,
combination or exchange of shares of stock of the Company on, of or affecting
the Shares of such Stockholder, (b) such Stockholder purchases or otherwise
acquires beneficial ownership of any shares of Common Stock after the
execution of this Agreement (including by exercise of options), or (c) such
Stockholder acquires the right to vote or share in the voting of any shares
of Common Stock other than the Shares
-2-
(collectively, "New Shares"), such Stockholder shall deliver promptly to Parent
upon request an irrevocable proxy substantially in the form attached hereto as
Exhibit B with respect to such New Shares. Stockholder also agrees that any New
Shares acquired or purchased by him shall be subject to the terms of this
Agreement and shall constitute Shares to the same extent as if they were owned
by such Stockholder on the date hereof.
5. Option Shares.
(a) Subject to the terms and conditions set forth herein,
Stockholder hereby grants to Parent an irrevocable option (the "Option") to
purchase, in whole or in part, such Stockholder's Shares and such
Stockholder's New Shares at a purchase price equal to the Per Share Cash
Amount (as defined in the Merger Agreement) per share; provided, however,
that if the Per Share Cash Amount under the Merger Agreement or any amendment
thereto is ever increased or if Parent shall otherwise offer to the
Stockholders of the Company an increased consideration for all of their
shares (the "Greater Consideration"), then the purchase price per share under
the Option shall be increased to equal such new Per Share Cash Amount or
Greater Consideration; and provided further that if Parent has exercised the
Option within 12 months prior to such increase in the Per Share Cash Amount
or Greater Consideration, then Parent shall pay to each Stockholder an amount
equal to the product of the number of shares previously purchased from such
Stockholder pursuant to the Option and the amount of increase between the old
Per Share Cash Amount and the new Per Share Cash Amount or Greater
Consideration, as applicable.
(b) Parent may exercise the Option, in whole or in part, at any
time and from time to time, after the first to occur of (i) any event as a
result of which Parent shall be entitled to receive a termination fee
pursuant to Section 7.2(e) of the Merger Agreement in the amount of $52.5
million pursuant to part (1) or part (2) of such Section or in the amount of
$22.5 million pursuant to part (3) of such Section or (ii) the breach by any
Stockholder of Section 2 of this Agreement (the first of such events to
occur, a "Purchase Event"); provided, however, that except as provided in the
last sentence of this Section 5(b), the Option shall terminate and be of no
further force and effect upon the earliest to occur of (A) the Effective Time
(as defined in the Merger Agreement), (B) 12 months and one day after the
occurrence of a termination of the Merger Agreement in accordance with
Section 7.1 (d), (e), (f) or (g), (C) a termination of the Merger Agreement
in accordance with Section 7.1(a), (b), (c) or (h) of the Merger Agreement
and (D) 18 months after the Outside Date as defined in Section 7.1(e) of the
Merger Agreement. Notwithstanding the termination of the Option, Parent
shall be entitled to exercise the Option or receive the Cash Payment Amount
if it has given written notice of its intent to exercise the Option or
receive the Cash Payment Amount in accordance with the terms hereof prior to
the termination of the Option and the termination of the Option shall not
affect any rights hereunder which by their terms do not terminate or expire
prior to or as of such termination.
(c) In the event that Parent wishes to exercise the Option, it
shall send to such Stockholder a written notice (the date of which being
herein referred to as the "Notice Date") to that effect which notice also
specifies the total number of shares Parent will purchase pursuant to such
exercise, and a date not earlier than three business days nor later than 15
business days from
-3-
the Notice Date for the closing of such purchase (the "Option Closing Date");
provided, however, that (i) if the closing of the purchase and sale pursuant to
the Option (the "Option Closing") cannot be consummated by reason of any
applicable judgment, decree, order, law or regulation (including, without
limitation, the rules and regulations of the FCC), the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which such restriction on consummation has expired or been terminated and (ii)
without limiting the foregoing, if prior notification to or approval of any
Governmental Entity (as defined in the Merger Agreement) is required in
connection with such purchase or any other transaction contemplated hereby,
Parent and such Stockholder shall promptly file the required notice or
application for approval and shall cooperate in the expeditious filing of such
notice or application, and, in the case of any prior notification or approval
required in connection with such purchase, the period of time that otherwise
would run pursuant to this sentence shall run instead from the date on which, as
the case may be, (A) any required notification period has expired or been
terminated or (B) any required approval has been obtained, and in either event,
any requisite waiting period has expired or been terminated. The place of the
Option Closing shall be at the offices of Wachtell, Lipton, Xxxxx & Xxxx, 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, and the time of the Option Closing shall
be 10:00 a.m. (Eastern Time) on the Option Closing Date.
(d) At the Option Closing, Parent (or its designee) shall pay
to each Stockholder an amount equal to the product of (x) the Per Share Cash
Amount or Greater Consideration, as applicable, and (y) the number of shares
being purchased from such Stockholder pursuant to the exercise of the
Option. Such payment shall be in immediately available funds by wire
transfer to a bank account designated in writing by such Stockholder.
(e) At the Option Closing, simultaneously with the delivery of
the amount specified in Section 5(d), each Stockholder shall deliver to
Parent (or its designee) a certificate or certificates representing its
shares to be purchased at the Option Closing, which shares shall be free and
clear of all Liens, claims, charges and encumbrances of any kind whatsoever,
except for such encumbrances or proxies in favor of Parent arising hereunder,
and a new Option evidencing the rights of the Parent (or its designee) to
purchase the balance of such Stockholder's shares purchasable hereunder.
6. Cash Election.
(a) In lieu of exercising the Option, by notice, Parent may
require such Stockholder to make a cash payment to Parent in the amount (the
"Cash Payment Amount") equal to the amount by which (A) the Market Price (as
defined below) exceeds (B) the Per Share Cash Amount, multiplied by the sum
of (i) the number of such Stockholder's Shares and (ii) the number of such
Stockholder's New Shares. Upon receipt of such notice, the Stockholder shall
be permitted to sell a sufficient number of Shares to pay the Cash Payment
Amount, if Stockholder shall, within five business days of such notice, sell
such Shares, provided that Stockholder shall use reasonable best efforts to
achieve good execution and shall consult with Parent with respect to the
manner of disposition. The term "Market Price" shall mean the closing price
(as measured by the last completed trade) for shares of Common Stock on the
date of Parent's election, or if
-4-
Stockholder elects to sell Shares to pay the Cash Payment Amount and has
complied with the proviso to the immediately preceding sentence, the average
price per Share actually realized in such sale.
(b) Parent may exercise its right to require such Stockholder
to pay the Cash Payment Amount pursuant to this Section by surrendering for
such purpose to such Stockholder, at the Company's principal office, a copy
of this Agreement, accompanied by a written notice or notices stating that
Parent elects to require such Stockholder to pay the Cash Payment Amount in
accordance with the provisions of this Section. Within five (or, in the case
of a sale of Shares under (a) above to fund the Cash Payment Amount, eight)
business days after the surrender of the Option and the receipt of such
notice or notices relating thereto, such Stockholder shall deliver or cause
to be delivered to Parent the Cash Payment Amount by wire to the account
designated by Parent in immediately available funds.
(c) If Stockholder at any time after delivery of a notice of
election by Parent to take the Cash Payment Amount pursuant to this Section
is prohibited under applicable law or regulation from selling Shares in order
to deliver to Parent the Cash Payment Amount in full, and Stockholder is
required to sell Shares to fund the Cash Payment Amount, then (i) such
Stockholder hereby undertakes to use such Stockholder's reasonable best
efforts, to the extent within the control of such Stockholder, to obtain all
required regulatory and legal approvals and to file any required notices, in
each case as promptly as practicable in order to accomplish such sales and
(ii) if Stockholder is unable to effect sales within four days after the
receipt of notice, such Stockholder shall be permitted to pay the Cash
Payment Amount to Parent in Shares valued at the Market Price.
7. No Encumbrances.
(a) Except as expressly contemplated by this Agreement,
Stockholder's Shares and the certificates representing such Shares are now,
and at all times during the term hereof will be, held by such Stockholder, or
by a nominee or custodian for the benefit of such Stockholder, free and clear
of all liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever (other than to the extent set forth on Schedule 1 to this
Agreement), except for any such encumbrances or proxies arising hereunder.
(b) Notwithstanding the foregoing, any Stockholder which has
received a notice of election by Parent (or its designee) to receive the Cash
Payment Amount shall be permitted, between receipt of such notice and the
time on which the Cash Payment Amount is due to be paid, to sell such number
of Shares as may be necessary to satisfy such obligation, as described in
Section 6(a) above.
(c) Any transfer by Stockholder of its Shares to Parent
pursuant to the Option shall pass to and unconditionally vest in Parent good
and valid title to such Stockholder's Shares and New Shares, free and clear
of all claims, liens, restrictions, security interests, pledges, limitations
and encumbrances whatsoever.
-5-
8. Acquisition Proposals. Stockholder agrees that such
Stockholder (i) shall not, directly or indirectly, initiate, solicit,
encourage or otherwise facilitate any inquiries or the making of any
Acquisition Proposal and (ii) has terminated any discussions or negotiations
with, and the provision of information or data to, any Person (other than
Parent) respecting an Acquisition Proposal. Such Stockholder further agrees
that he shall not, directly or indirectly, provide any confidential
information or data to any Person (as defined in the Merger Agreement)
relating to or in contemplation of an Acquisition Proposal or engage in any
negotiations or discussions relating to or in contemplation of an Acquisition
Proposal. Such Stockholder will notify Parent immediately if any inquiries,
proposals or offers respecting an Acquisition Proposal are received by, any
such information or data is requested from, or any such discussions or
negotiations are sought to be initiated or continued with, such Stockholder
indicating, in connection with such notice, the name of such Person and the
material terms and conditions of any proposals or offers, and shall keep
Parent apprised with respect to the status and terms thereof.
9. Appraisal Rights. Stockholder agrees not to exercise any
rights (including, without limitation, under Article 13 of the North Carolina
Business Corporation Act) to demand appraisal of any Common Stock which may
arise with respect to the Merger.
10. Affiliates Letter. Stockholder shall execute and deliver
on a timely basis an Affiliate Letter (as defined in the Merger Agreement).
11. Reliance by Parent. Stockholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance
upon Stockholder's execution and delivery of this Agreement.
12. Specific Performance. Each party hereto severally
acknowledges that it will be impossible to measure in money the damage to the
other parties if the party hereto fails to comply with any of the obligations
imposed by this Agreement, that every such obligation is material and that,
in the event of any such failure, the other parties will not have an adequate
remedy at law or damages. Accordingly, each party hereto severally agrees
that injunctive relief or other equitable remedy, in addition to remedies at
law or damages, is the appropriate remedy for any such failure and will not
oppose the granting of such relief on the basis that any other party has an
adequate remedy at law. Each party hereto severally agrees that it will not
seek, and agrees to waive any requirement for, the securing or posting of a
bond in connection with any other party's seeking or obtaining such equitable
relief.
13. Heirs, Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and assigns and shall not be assignable without
the written consent of all other parties hereto other than any assignment in
whole or in part by Parent.
14. Entire Agreement. This Agreement supersedes all prior
agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and contains the entire agreement among the parties
with respect to the subject matter hereof. This Agreement may not be
amended, supplemented or modified, and no provisions hereof may be modified
or
-6-
waived, except by an instrument in writing signed by all the parties hereto. No
waiver of any provisions hereof by any party shall be deemed a waiver of any
other provisions hereof by any such party, nor shall any such waiver be deemed a
continuing waiver of any provision hereof by such party.
15. Miscellaneous.
(a) Expenses. Each of the parties hereto shall bear and pay
all costs and expenses incurred by it or on its behalf in connection with the
negotiation of this Agreement, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(b) Amendment. This Agreement may not be amended, except by an
instrument in writing signed on behalf of each of the parties.
(c) This Agreement shall be deemed a contract made under, and
for all purposes shall be construed in accordance with, the internal laws of
the State of New York without regard to principles of conflicts of law,
except for those provisions relating to the voting and the proxy which shall
be governed by North Carolina law.
(d) Severability. If any provision of this Agreement or the
application of such provision to any person or circumstances shall be held
invalid by a court of competent jurisdiction, the remainder of the provision
held invalid and the application of such provision to persons or
circumstances, other than the party as to which it is held invalid, shall not
be affected.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
(f) Termination. This Agreement shall terminate upon
termination of the Option.
(g) Headings. All Section headings herein are for convenience
of reference only and are not part of this Agreement and no construction or
reference shall be derived therefrom.
(h) Notices. All notices, requests, claims, demands, and other
communications under this Agreement must be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed), or sent by
overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
-7-
(i) if to Parent, to
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Silk; and
(ii) if to the Stockholder, to such Stockholder c/o
The Xxxxxxx X. and Xxxx X. Xxxxxxx 1998
Charitable Remainder Unitrust
c/o North Carolina Trust Company
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Ms. Xxx Xxxxxx (Fax 000-000-0000)
with a copy to:
Xxxxxx & Xxxxxxx
53rd at Third Avenue, Suite 1000
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxx
and to:
Vanguard Cellular Systems, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx
(i) Further Assurances. In the event of any exercise of the
Option or election to take the Cash Payment Amount, each of the Company,
Parent and Stockholder shall execute
-8-
and deliver all other documents and instruments and take all other action that
may be reasonably necessary in order to consummate the transactions contemplated
by such exercise.
(j) Stockholder shall cause certificates for the Shares and New
Shares to have typed or printed thereon a restrictive legend which shall read
substantially as follows (if and to the extent true and necessary in light of
legal and factual circumstances existing at such time):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN PROVISIONS AS SET FORTH IN THE
VOTING AGREEMENT, DATED AS OF DECEMBER 22, 1998, A
COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF
VANGUARD CELLULAR SYSTEMS, INC. AT ITS PRINCIPAL
EXECUTIVE OFFICES, WHICH CONTAINS RESTRICTIONS ON THE
VOTING AND TRANSFER THEREOF."
-9-
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first written above.
AT&T CORP.
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: General Attorney and
Assistant Secretary
The Xxxxxxx X. and Xxxx X. Xxxxxxx 1998
Charitable Remainder Unitrust, North
Carolina Trust Company, Trustee
By: /s/ D. Xxxxxxx Xxxxxx
Name: D. Xxxxxxx Xxxxxx
Title: Senior Vice President
I, Xxxxxxx X. Xxxxxxx, as beneficiary of The Xxxxxxx X. and Xxxx
X. Xxxxxxx 1998 Charitable Remainder Unitrust, consent to the signing of this
Agreement by Stockholder.
/s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
I, Xxxx X. Xxxxxxx, as beneficiary of The Xxxxxxx X. and Xxxx X.
Xxxxxxx 1998 Charitable Remainder Unitrust, consent to the signing of this
Agreement by Stockholder.
/s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
EXHIBIT A
STOCKHOLDER
Number of
Shares of Type of
Name Common Stock Ownership
---- ------------ ---------
The Xxxxxxx X. and Xxxx 202,500 Beneficial
D. Leeolou 1998
Charitable Remainder
Unitrust
EXHIBIT B
FORM OF PROXY
The undersigned stockholder, for consideration received, hereby
appoints [PARENT DESIGNEES] and each of them as my proxies, with full power
of substitution in each of them, to cast on behalf of the undersigned all
votes entitled to be cast by the holder of the shares of Class A Common
Stock, par value $0.01 per share, of Vanguard Cellular Systems, Inc., a North
Carolina corporation (the "Company"), owned by the undersigned at the Special
Meeting of Stockholders of the Company to be held [DATE, TIME AND PLACE] and
at any adjournment thereof (i) "FOR" approval and adoption of the Agreement
and Plan of Merger, dated as of October 2, 1998, between the Company and AT&T
Corp., a New York corporation ("Parent"), providing for the merger (the
"Merger") of the Company with and into a wholly-owned subsidiary of Parent,
and the Merger and (ii) "AGAINST" any proposal or offer with respect to a
merger, reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving,
or any purchase of any substantial portion of the assets of, or any equity
securities of, or any transaction that would involve the transfer or
potential transfer of control of, the Company other than the Merger and any
proposed action or transaction that would prevent or intentionally delay
consummation of the Merger or is otherwise inconsistent therewith. This
proxy is coupled with an interest and is irrevocable until such time as the
Voting Agreement, dated as of December 22, 1998, between a certain
stockholder of the Company, the undersigned, and Parent terminates in
accordance with its terms.
Dated _____________________, 1998
________________________________
(Signature of Stockholder)
VOTING AGREEMENT
VOTING AGREEMENT (the "Agreement"), dated as of December 22,
1998, between the undersigned stockholder ("Stockholder") of Vanguard
Cellular Systems, Inc., a North Carolina corporation (the "Company"), and
AT&T Corp., a New York corporation ("Parent").
WHEREAS, prior to the execution and delivery of this Agreement,
the Company and Parent have entered into an Agreement and Plan of Merger
dated as of October 2, 1998 (the "Merger Agreement"), providing for the
merger of the Company with and into a wholly-owned subsidiary of Parent (the
"Merger") pursuant to the terms and conditions thereof; and
WHEREAS, as an inducement and a condition to Parent entering into
the Merger Agreement, various stockholders of the Company signed voting
agreements with Parent, which agreements restrict the transfer of the Class A
Common Stock, par value $0.01 per share, of the Company (the "Common Stock")
owned by such stockholders; and
WHEREAS, in accordance with such restrictions it is necessary for
Stockholder to sign this Agreement to receive certain shares of the Common
Stock;
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Representations of Stockholder. Stockholder represents
that:
(a) such Stockholder is or may become the beneficial owner of
the number of shares of Common Stock set forth opposite such Stockholder's
name on Exhibit A (such Stockholder's "Shares");
(b) except as may be denoted in Exhibit A, as of the date
hereof such Stockholder does not beneficially own (as such term is defined in
the Securities Exchange Act of 1934, as amended (the "1934 Act")) or own of
record any shares of Common Stock other than such Stockholder's Shares, but
excluding any shares of Common Stock which such Stockholder has the right to
obtain upon the exercise of stock options outstanding on the date hereof;
(c) such Stockholder has the right, power and authority to
execute and deliver this Agreement and to perform such Stockholder's
obligations under this Agreement, and this Agreement has been duly executed
and delivered by such Stockholder and constitutes a valid and legally binding
agreement of such Stockholder, enforceable in accordance with its terms; and
such execution, delivery and performance by such Stockholder of this
Agreement will not (i) conflict with, require a consent, waiver or approval
under, or result in a breach of or default under, any of the terms of any
contract, commitment or other obligation (written or oral) to which such
Stockholder is a party or by which such Stockholder is bound; (ii) violate
any order, writ, injunction, decree or statute, or any rule or regulation,
applicable to Stockholder or any of the properties or assets of Stockholder;
or (iii) result in the creation of, or impose any obligation
on such Stockholder to create, any Lien (as defined in the Merger Agreement),
charge or other encumbrance of any nature whatsoever upon the Shares, other than
in favor of Parent; and
(d) Xxxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxxx are the sole
beneficiaries of the The Xxxxxx X. Xxxxxxx 1998 Charitable Remainder Unitrust.
The representations and warranties contained herein shall be made
as of the date hereof and as of each date from the date hereof through and
including the date that the Merger is consummated or this Agreement is
terminated in accordance with its terms.
2. Agreement to Vote Shares. Stockholder shall be present (in
person or by proxy) at and vote his Shares and any New Shares (as defined in
Section 4 hereof), and shall cause any holder of record of his Shares or New
Shares to be present and vote, (a) in favor of adoption and approval of the
Merger Agreement and the Merger (and each other action and transaction
contemplated by the Merger Agreement or by this Agreement) and (b) against
any Acquisition Proposal (as defined in the Merger Agreement) other than the
Merger (or any other Acquisition Proposal of Parent) and against any proposed
action or transaction that would prevent or intentionally delay consummation
of the Merger (or other Acquisition Proposal of Parent) or is otherwise
inconsistent therewith at every meeting of the stockholders of the Company at
which any such matters are considered and at every adjournment thereof (and,
if applicable, in connection with any request or solicitation of written
consents of stockholders). Any such vote shall be cast, or consent shall be
given, in accordance with such procedures relating thereto as shall ensure
that it is duly counted for purposes of determining that a quorum is present
and for purposes of recording the results of such vote or consent.
Stockholder shall deliver to Parent upon request a proxy substantially in the
form attached hereto as Exhibit B, which proxy shall be coupled with an
interest and irrevocable to the extent permitted under North Carolina law,
with the total number of such Stockholder's Shares and any New Shares
correctly indicated thereon. Stockholder hereby revokes any and all previous
proxies granted with respect to his Shares. Stockholder shall also use his
reasonable best efforts to take, or cause to be taken, all action, and do, or
cause to be done, all things necessary or advisable in order to consummate
and make effective the transactions contemplated by this Agreement.
3. No Voting Trusts. After the date hereof, Stockholder
agrees that he will not, nor will he permit any entity under his control to,
deposit any Shares in a voting trust or subject any Shares to any Lien or
agreement, arrangement or understanding with respect to the voting of such
Shares other than agreements entered into with Parent.
4. Additional Purchases. Stockholder agrees that in the event
(a) of any stock dividend, stock split, recapitalization, reclassification,
combination or exchange of shares of stock of the Company on, of or affecting
the Shares of such Stockholder, (b) such Stockholder purchases or otherwise
acquires beneficial ownership of any shares of Common Stock after the
execution of this Agreement (including by exercise of options), or (c) such
Stockholder acquires the right to vote or share in the voting of any shares
of Common Stock other than the Shares
-2-
(collectively, "New Shares"), such Stockholder shall deliver promptly to Parent
upon request an irrevocable proxy substantially in the form attached hereto as
Exhibit B with respect to such New Shares. Stockholder also agrees that any New
Shares acquired or purchased by him shall be subject to the terms of this
Agreement and shall constitute Shares to the same extent as if they were owned
by such Stockholder on the date hereof.
5. Option Shares.
(a) Subject to the terms and conditions set forth herein,
Stockholder hereby grants to Parent an irrevocable option (the "Option") to
purchase, in whole or in part, such Stockholder's Shares and such
Stockholder's New Shares at a purchase price equal to the Per Share Cash
Amount (as defined in the Merger Agreement) per share; provided, however,
that if the Per Share Cash Amount under the Merger Agreement or any amendment
thereto is ever increased or if Parent shall otherwise offer to the
Stockholders of the Company an increased consideration for all of their
shares (the "Greater Consideration"), then the purchase price per share under
the Option shall be increased to equal such new Per Share Cash Amount or
Greater Consideration; and provided further that if Parent has exercised the
Option within 12 months prior to such increase in the Per Share Cash Amount
or Greater Consideration, then Parent shall pay to each Stockholder an amount
equal to the product of the number of shares previously purchased from such
Stockholder pursuant to the Option and the amount of increase between the old
Per Share Cash Amount and the new Per Share Cash Amount or Greater
Consideration, as applicable.
(b) Parent may exercise the Option, in whole or in part, at any
time and from time to time, after the first to occur of (i) any event as a
result of which Parent shall be entitled to receive a termination fee
pursuant to Section 7.2(e) of the Merger Agreement in the amount of $52.5
million pursuant to part (1) or part (2) of such Section or in the amount of
$22.5 million pursuant to part (3) of such Section or (ii) the breach by any
Stockholder of Section 2 of this Agreement (the first of such events to
occur, a "Purchase Event"); provided, however, that except as provided in the
last sentence of this Section 5(b), the Option shall terminate and be of no
further force and effect upon the earliest to occur of (A) the Effective Time
(as defined in the Merger Agreement), (B) 12 months and one day after the
occurrence of a termination of the Merger Agreement in accordance with
Section 7.1 (d), (e), (f) or (g), (C) a termination of the Merger Agreement
in accordance with Section 7.1(a), (b), (c) or (h) of the Merger Agreement
and (D) 18 months after the Outside Date as defined in Section 7.1(e) of the
Merger Agreement. Notwithstanding the termination of the Option, Parent
shall be entitled to exercise the Option or receive the Cash Payment Amount
if it has given written notice of its intent to exercise the Option or
receive the Cash Payment Amount in accordance with the terms hereof prior to
the termination of the Option and the termination of the Option shall not
affect any rights hereunder which by their terms do not terminate or expire
prior to or as of such termination.
(c) In the event that Parent wishes to exercise the Option, it
shall send to such Stockholder a written notice (the date of which being
herein referred to as the "Notice Date") to that effect which notice also
specifies the total number of shares Parent will purchase pursuant to such
exercise, and a date not earlier than three business days nor later than 15
business days from
-3-
the Notice Date for the closing of such purchase (the "Option Closing Date");
provided, however, that (i) if the closing of the purchase and sale pursuant to
the Option (the "Option Closing") cannot be consummated by reason of any
applicable judgment, decree, order, law or regulation (including, without
limitation, the rules and regulations of the FCC), the period of time that
otherwise would run pursuant to this sentence shall run instead from the date on
which such restriction on consummation has expired or been terminated and (ii)
without limiting the foregoing, if prior notification to or approval of any
Governmental Entity (as defined in the Merger Agreement) is required in
connection with such purchase or any other transaction contemplated hereby,
Parent and such Stockholder shall promptly file the required notice or
application for approval and shall cooperate in the expeditious filing of such
notice or application, and, in the case of any prior notification or approval
required in connection with such purchase, the period of time that otherwise
would run pursuant to this sentence shall run instead from the date on which, as
the case may be, (A) any required notification period has expired or been
terminated or (B) any required approval has been obtained, and in either event,
any requisite waiting period has expired or been terminated. The place of the
Option Closing shall be at the offices of Wachtell, Lipton, Xxxxx & Xxxx, 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, and the time of the Option Closing shall
be 10:00 a.m. (Eastern Time) on the Option Closing Date.
(d) At the Option Closing, Parent (or its designee) shall pay
to each Stockholder an amount equal to the product of (x) the Per Share Cash
Amount or Greater Consideration, as applicable, and (y) the number of shares
being purchased from such Stockholder pursuant to the exercise of the
Option. Such payment shall be in immediately available funds by wire
transfer to a bank account designated in writing by such Stockholder.
(e) At the Option Closing, simultaneously with the delivery of
the amount specified in Section 5(d), each Stockholder shall deliver to
Parent (or its designee) a certificate or certificates representing its
shares to be purchased at the Option Closing, which shares shall be free and
clear of all Liens, claims, charges and encumbrances of any kind whatsoever,
except for such encumbrances or proxies in favor of Parent arising hereunder,
and a new Option evidencing the rights of the Parent (or its designee) to
purchase the balance of such Stockholder's shares purchasable hereunder.
6. Cash Election.
(a) In lieu of exercising the Option, by notice, Parent may
require such Stockholder to make a cash payment to Parent in the amount (the
"Cash Payment Amount") equal to the amount by which (A) the Market Price (as
defined below) exceeds (B) the Per Share Cash Amount, multiplied by the sum
of (i) the number of such Stockholder's Shares and (ii) the number of such
Stockholder's New Shares. Upon receipt of such notice, the Stockholder shall
be permitted to sell a sufficient number of Shares to pay the Cash Payment
Amount, if Stockholder shall, within five business days of such notice, sell
such Shares, provided that Stockholder shall use reasonable best efforts to
achieve good execution and shall consult with Parent with respect to the
manner of disposition. The term "Market Price" shall mean the closing price
(as measured by the last completed trade) for shares of Common Stock on the
date of Parent's election, or if
-4-
Stockholder elects to sell Shares to pay the Cash Payment Amount and has
complied with the proviso to the immediately preceding sentence, the average
price per Share actually realized in such sale.
(b) Parent may exercise its right to require such Stockholder
to pay the Cash Payment Amount pursuant to this Section by surrendering for
such purpose to such Stockholder, at the Company's principal office, a copy
of this Agreement, accompanied by a written notice or notices stating that
Parent elects to require such Stockholder to pay the Cash Payment Amount in
accordance with the provisions of this Section. Within five (or, in the case
of a sale of Shares under (a) above to fund the Cash Payment Amount, eight)
business days after the surrender of the Option and the receipt of such
notice or notices relating thereto, such Stockholder shall deliver or cause
to be delivered to Parent the Cash Payment Amount by wire to the account
designated by Parent in immediately available funds.
(c) If Stockholder at any time after delivery of a notice of
election by Parent to take the Cash Payment Amount pursuant to this Section
is prohibited under applicable law or regulation from selling Shares in order
to deliver to Parent the Cash Payment Amount in full, and Stockholder is
required to sell Shares to fund the Cash Payment Amount, then (i) such
Stockholder hereby undertakes to use such Stockholder's reasonable best
efforts, to the extent within the control of such Stockholder, to obtain all
required regulatory and legal approvals and to file any required notices, in
each case as promptly as practicable in order to accomplish such sales and
(ii) if Stockholder is unable to effect sales within four days after the
receipt of notice, such Stockholder shall be permitted to pay the Cash
Payment Amount to Parent in Shares valued at the Market Price.
7. No Encumbrances.
(a) Except as expressly contemplated by this Agreement,
Stockholder's Shares and the certificates representing such Shares are now,
and at all times during the term hereof will be, held by such Stockholder, or
by a nominee or custodian for the benefit of such Stockholder, free and clear
of all liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever (other than to the extent set forth on Schedule 1 to this
Agreement), except for any such encumbrances or proxies arising hereunder.
(b) Notwithstanding the foregoing, any Stockholder which has
received a notice of election by Parent (or its designee) to receive the Cash
Payment Amount shall be permitted, between receipt of such notice and the
time on which the Cash Payment Amount is due to be paid, to sell such number
of Shares as may be necessary to satisfy such obligation, as described in
Section 6(a) above.
(c) Any transfer by Stockholder of its Shares to Parent
pursuant to the Option shall pass to and unconditionally vest in Parent good
and valid title to such Stockholder's Shares and New Shares, free and clear
of all claims, liens, restrictions, security interests, pledges, limitations
and encumbrances whatsoever.
-5-
8. Acquisition Proposals. Stockholder agrees that such
Stockholder (i) shall not, directly or indirectly, initiate, solicit,
encourage or otherwise facilitate any inquiries or the making of any
Acquisition Proposal and (ii) has terminated any discussions or negotiations
with, and the provision of information or data to, any Person (other than
Parent) respecting an Acquisition Proposal. Such Stockholder further agrees
that he shall not, directly or indirectly, provide any confidential
information or data to any Person (as defined in the Merger Agreement)
relating to or in contemplation of an Acquisition Proposal or engage in any
negotiations or discussions relating to or in contemplation of an Acquisition
Proposal. Such Stockholder will notify Parent immediately if any inquiries,
proposals or offers respecting an Acquisition Proposal are received by, any
such information or data is requested from, or any such discussions or
negotiations are sought to be initiated or continued with, such Stockholder
indicating, in connection with such notice, the name of such Person and the
material terms and conditions of any proposals or offers, and shall keep
Parent apprised with respect to the status and terms thereof.
9. Appraisal Rights. Stockholder agrees not to exercise any
rights (including, without limitation, under Article 13 of the North Carolina
Business Corporation Act) to demand appraisal of any Common Stock which may
arise with respect to the Merger.
10. Affiliates Letter. Stockholder shall execute and deliver
on a timely basis an Affiliate Letter (as defined in the Merger Agreement).
11. Reliance by Parent. Stockholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance
upon Stockholder's execution and delivery of this Agreement.
12. Specific Performance. Each party hereto severally
acknowledges that it will be impossible to measure in money the damage to the
other parties if the party hereto fails to comply with any of the obligations
imposed by this Agreement, that every such obligation is material and that,
in the event of any such failure, the other parties will not have an adequate
remedy at law or damages. Accordingly, each party hereto severally agrees
that injunctive relief or other equitable remedy, in addition to remedies at
law or damages, is the appropriate remedy for any such failure and will not
oppose the granting of such relief on the basis that any other party has an
adequate remedy at law. Each party hereto severally agrees that it will not
seek, and agrees to waive any requirement for, the securing or posting of a
bond in connection with any other party's seeking or obtaining such equitable
relief.
13. Heirs, Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and assigns and shall not be assignable without
the written consent of all other parties hereto other than any assignment in
whole or in part by Parent.
14. Entire Agreement. This Agreement supersedes all prior
agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and contains the entire agreement among the parties
with respect to the subject matter hereof. This Agreement may not be
amended, supplemented or modified, and no provisions hereof may be modified or
-6-
waived, except by an instrument in writing signed by all the parties hereto. No
waiver of any provisions hereof by any party shall be deemed a waiver of any
other provisions hereof by any such party, nor shall any such waiver be deemed a
continuing waiver of any provision hereof by such party.
15. Miscellaneous.
(a) Expenses. Each of the parties hereto shall bear and pay
all costs and expenses incurred by it or on its behalf in connection with the
negotiation of this Agreement, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(b) Amendment. This Agreement may not be amended, except by an
instrument in writing signed on behalf of each of the parties.
(c) This Agreement shall be deemed a contract made under, and
for all purposes shall be construed in accordance with, the internal laws of
the State of New York without regard to principles of conflicts of law,
except for those provisions relating to the voting and the proxy which shall
be governed by North Carolina law.
(d) Severability. If any provision of this Agreement or the
application of such provision to any person or circumstances shall be held
invalid by a court of competent jurisdiction, the remainder of the provision
held invalid and the application of such provision to persons or
circumstances, other than the party as to which it is held invalid, shall not
be affected.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
(f) Termination. This Agreement shall terminate upon
termination of the Option.
(g) Headings. All Section headings herein are for convenience
of reference only and are not part of this Agreement and no construction or
reference shall be derived therefrom.
(h) Notices. All notices, requests, claims, demands, and other
communications under this Agreement must be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed), or sent by
overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
-7-
(i) if to Parent, to
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Silk; and
(ii) if to the Stockholder, to such Stockholder x/x
Xxx Xxxxxx X. Xxxxxxx 0000 Charitable Remainder
Unitrust
c/o North Carolina Trust Company
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Ms. Xxx Xxxxxx (Fax 000-000-0000)
with a copy to:
Xxxxxx & Xxxxxxx
53rd at Third Avenue, Suite 1000
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxx
and to:
Vanguard Cellular Systems, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx
(i) Further Assurances. In the event of any exercise of the
Option or election to take the Cash Payment Amount, each of the Company,
Parent and Stockholder shall execute
-8-
and deliver all other documents and instruments and take all other action that
may be reasonably necessary in order to consummate the transactions contemplated
by such exercise.
(j) Stockholder shall cause certificates for the Shares and New
Shares to have typed or printed thereon a restrictive legend which shall read
substantially as follows (if and to the extent true and necessary in light of
legal and factual circumstances existing at such time):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN PROVISIONS AS SET FORTH IN THE
VOTING AGREEMENT, DATED AS OF DECEMBER 22, 1998, A
COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF
VANGUARD CELLULAR SYSTEMS, INC. AT ITS PRINCIPAL
EXECUTIVE OFFICES, WHICH CONTAINS RESTRICTIONS ON THE
VOTING AND TRANSFER THEREOF."
-9-
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first written above.
AT&T CORP.
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: General Attorney and
Assistant Secretary
The Xxxxxx X. Xxxxxxx 1998 Charitable
Remainder Unitrust
North Carolina Trust Company, Trustee
By: /s/ D. Xxxxxxx Xxxxxx
Name: D. Xxxxxxx Xxxxxx
Title: Senior Vice President
I, Xxxxxx X. Xxxxxxx, as beneficiary of The Xxxxxx X. Xxxxxxx
1998 Charitable Remainder Unitrust, consent to the signing of this Agreement
by Stockholder.
/s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
I, Xxxxxxxx X. Xxxxxxx, as beneficiary of The Xxxxxx X. Xxxxxxx
1998 Charitable Remainder Unitrust, consent to the signing of this Agreement
by Stockholder.
/s/ Xxxxxxxx X. Xxxxxxx
Name: Xxxxxxxx X. Xxxxxxx
EXHIBIT A
STOCKHOLDER
Number of
Shares of Type of
Name Common Stock Ownership
---- ------------ ---------
The Xxxxxx X. Xxxxxxx
1998 Charitable
Remainder Unitrust 200,000 Beneficial
EXHIBIT B
FORM OF PROXY
The undersigned stockholder, for consideration received, hereby
appoints [PARENT DESIGNEES] and each of them as my proxies, with full power
of substitution in each of them, to cast on behalf of the undersigned all
votes entitled to be cast by the holder of the shares of Class A Common
Stock, par value $0.01 per share, of Vanguard Cellular Systems, Inc., a North
Carolina corporation (the "Company"), owned by the undersigned at the Special
Meeting of Stockholders of the Company to be held [DATE, TIME AND PLACE] and
at any adjournment thereof (i) "FOR" approval and adoption of the Agreement
and Plan of Merger, dated as of October 2, 1998, between the Company and AT&T
Corp., a New York corporation ("Parent"), providing for the merger (the
"Merger") of the Company with and into a wholly-owned subsidiary of Parent,
and the Merger and (ii) "AGAINST" any proposal or offer with respect to a
merger, reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving,
or any purchase of any substantial portion of the assets of, or any equity
securities of, or any transaction that would involve the transfer or
potential transfer of control of, the Company other than the Merger and any
proposed action or transaction that would prevent or intentionally delay
consummation of the Merger or is otherwise inconsistent therewith. This
proxy is coupled with an interest and is irrevocable until such time as the
Voting Agreement, dated as of December 22, 1998, between a certain
stockholder of the Company, the undersigned, and Parent terminates in
accordance with its terms.
Dated _____________________, 1998
________________________________
(Signature of Stockholder)
