Execution Original
PROMISSORY NOTE
(ISO Exercise Price Loans or Tax Loans -- Executive Vice Presidents' Version)
$__________ _______________, 1999
FOR VALUE RECEIVED, the undersigned ___________________, an individual
residing at _________________________________ (the "Maker"), hereby promises to
pay to Vanguard Cellular Systems, Inc., a North Carolina corporation, or its
successors and assigns (the "Holder"), the principal sum of
________________________ DOLLARS ($__________) on or prior to: (i) if the
proposed merger of the Holder into Winston, Inc. (the "Merger") pursuant to that
certain Agreement and Plan of Merger dated as of October 2, 1998, as amended
(the "Merger Agreement"), among AT&T Corp., Winston, Inc. and the Holder shall
have been consummated, the earlier of (x) 6 months and 1 day following the
Effective Time (as defined in the Merger Agreement) or (y) October 3, 1999, or
(ii) if the Merger shall not have been consummated, the fifth anniversary of the
date hereof (or if such fifth anniversary is not a business day, the next
succeeding business day). Interest shall be payable on each anniversary of the
date hereof (or if such anniversary is not a business day, the next succeeding
business day) until repayment in full of this Note, and on any stated or
accelerated maturity of this Note, on the unpaid principal balance from the date
of this Note through the payment in full thereof, at a rate of 5.845% per annum,
compounded quarterly. All payments hereunder shall be made to the Holder in cash
or other immediately available funds, or by check or money order payable to the
Holder at Greensboro, North Carolina, or at such other location as the Holder
may specify by notice to the Maker.
The proceeds of the loan hereunder shall be used solely either to pay
the exercise price of incentive stock options to purchase Class A Common Stock,
par value $0.01 per share, of the Holder (the "Common Stock") held by the Maker
or to pay (which payment shall be made by the Company) certain income tax
obligations in connection with the exercise of nonqualified options to purchase
Common Stock held by the Maker.
This Note may be prepaid in part or in full at any time without premium
or penalty and shall be mandatorily prepayable from and to the extent of certain
payments otherwise payable to the Maker in connection with the Merger, as more
fully set forth in: (i) Section 2 of that certain Pledge Agreement of even date
herewith (the "Pledge Agreement") by Maker in favor of the Holder and (ii) that
certain Agreement re Netting of Payments dated ________________ (the "Netting
Agreement") between the Maker and the Holder.
This Note is secured by the Pledge Agreement, by any past or future
pledge agreement entered into in connection with loans by the Holder to the
Maker relating to option exercises and related tax payments (collectively, the
"Pledge Agreements") and by the securities and other collateral pledged
thereunder. This Note is entitled to the benefits of the Pledge Agreements and
the Netting Agreement.
Upon (a) any failure by the Holder to receive any payment of interest
within 10 days of when due or principal within 5 days of maturity or any
accelerated maturity or (b) any personal bankruptcy filing by or against the
Maker or (c) any representation or warranty of the Maker in the Pledge
Agreements proving false in any material respect on the date as of which it was
made or (d) any other violation of the Maker's agreements contained in the
Pledge Agreements or the Netting Agreement, the Holder: (i) may proceed to
protect and enforce its rights hereunder by suit in equity, action at law and/or
other appropriate proceeding, (ii) may, by notice in writing to the Maker (or
his estate, if deceased), declare all or any part of the unpaid balance of this
Note to be immediately due and payable, whereupon such unpaid balance or part
thereof shall become so due and payable without presentation, protest or further
demand or notice of any kind, all of which are hereby waived (provided that, in
the event of the Maker's bankruptcy, the unpaid balance of this Note shall
automatically become due and payable), (iii) may proceed to enforce payment of
this Note in such manner as the Holder may elect, including realization upon any
and all rights in the security granted pursuant to the Pledge Agreements and the
Netting Agreement and (iv) may offset and apply toward the payment of this Note
any indebtedness from the Holder to the Maker, regardless of the adequacy of any
security for this Note.
If this Note is referred to an attorney for collection, the Maker
agrees to pay the Holder's reasonable attorneys' fees and expenses (which fees
shall be determined in accordance with the normal hourly rates of such attorneys
and not as a percentage of the indebtedness hereunder) in addition to all other
sums owed hereon.
The Maker waives to the extent not prohibited by applicable law (i) all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest and notices of dishonor, (ii) any requirement of diligence or
promptness on the part of the Holder in the enforcement of its rights under this
Note, (iii) all notices of every kind which may be required to be given by any
statute or rule of law, (iv) any valuation, stay, appraisement or redemption
laws and (v) any defense or setoff or right of setoff of any kind (other than
indefeasible payment in full) which he may now of hereafter have with respect to
his liability under this Note.
No course of dealing between the Maker and the Holder shall operate as
a waiver of any of the Holder's rights under this Note. No delay or omission on
the part of the Holder in exercising any right under this Note shall operate as
a waiver of such right or any other right hereunder. No amendment or waiver
shall be binding unless in writing and signed by the Holder.
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This Note shall be governed by and construed in accordance with the
laws (other than the conflict of laws provisions) of the State of North
Carolina.
IN WITNESS WHEREOF, the undersigned has executed this instrument of
indebtedness effective the day and year first above written.
Name of Maker: _____________________
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