U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 3
INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES
Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Section 17(a) of the Public Utility Holding Company Act of 1935 or
Section 30(f) of the Investment Company Act of 1940
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1. Name and Address of Reporting Person
AT&T Corp.
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(Last) (First) (Middle)
32 Avenue of the Americas
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(Street)
New York New York 10013-2412
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(City) (State) (Zip)
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2. Date of Event Requiring Statement (Month/Day/Year)
October 2, 1998
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3. IRS Identification Number of Reporting Person (if an entity)
13-4924710
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4. Issuer Name and Ticker or Trading Symbol
Vanguard Cellular Systems, Inc. (Symbol: VCELA)
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5. Relationship of Reporting Person to Issuer
(Check all applicable)
[ ] Director [ X ] 10% Owner
[ ] Officer (give title below) [ ] Other (specify below)
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6. If Amendment, Date of Original (Month/Day/Year)
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7. Individual or Joint/Group Filing (Check applicable line)
[ X ] Form Filed by One Reporting Person
[ ] Form Filed by More than One Reporting Person
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Table I -- Non-Derivative Securities Beneficially Owned
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3. Ownership Form:
2. Amount of Securities Direct (D) or
1. Title of Security Beneficially Owned Indirect (I) 4. Nature of Indirect Beneficial Ownership
(Instr. 4) (Instr. 4) (Instr. 5) (Instr.5)
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<S> <C> <C> <C>
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Reminder: Report on a separate line for each class of securities beneficially
owned directly or indirectly.
(Print or Type Responses)
Page 1 of 4
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FORM 3 (Continued)
Table II -- Derivative Securities Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
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5. Owner-
3. Title and Amount of Securities ship
Underlying Derivative Security Form of
2. Date Exercisable (Instr. 4) Derivative
and Expiration Date --------------------------------- 4. Conver- Security:
(Month/Day/Year) Amount sion or Direct 6. Nature of
---------------------- or Exercise (D) or Indirect
Date Expira- Number Price of Indirect Beneficial
1. Title of Derivative Exer- tion of Derivative (I) Ownership
Security (Instr. 4) cisable Date Title Shares Security (Instr.5) (Instr. 5)
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<S> <C> <C> <C> <C> <C> <C> <C>
Option (contingent (see (see Common Stock 12,334,236 generally D
right to buy)(see attached) attached) $23.00 per
attached) share (see
attached)
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</TABLE>
Explanation of Responses:
(See attached) (See attached)
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Signature of Reporting Person Date
Page 2 of 4
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FORM 3 CONTINUATION SHEET
EXPLANATION OF RESPONSE
This Initial Statement of Beneficial Ownership on Form 3 (this "Form") is
filed by AT&T Corp., a New York corporation ("AT&T"). On October 2, 1998, AT&T,
Winston, Inc., a wholly owned subsidiary of AT&T ("Merger Sub"), and Vanguard
Cellular Systems, Inc. ("Vanguard") entered into an Agreement and Plan of Merger
(the "Merger Agreement") providing for, among other things, the merger of
Vanguard with and into Merger Sub (the "Merger"). In connection with the Merger
Agreement, AT&T and Vanguard entered into an Option Agreement (the "Vanguard
Option Agreement"), dated as of October 2, 1998, under which Vanguard granted
AT&T an option (the "Vanguard Option") to purchase up to 7,319,000 shares of
Common Stock, par value $.01 per share, of Vanguard ("Vanguard Common Stock"),
representing 19.9% of the issued and outstanding Vanguard Common Stock, at an
exercise price of $23.00 per share, subject to certain customary anti-dilution
adjustments. Also in connection with the Merger Agreement, AT&T entered into
Voting Agreements (the "Voting Agreements"), dated as of October 2, 1998, with
L. Richardson Preyer, Jr., Haynes G. Griffin, Stephen R. Leeolou, Piedmont
Associates Limited, Stuart S. Richardson, and the Smith Richardson Foundation,
respectively (collectively, the "Vanguard Stockholders") under which each of the
Vanguard Stockholders granted AT&T an option (collectively, the "Stockholders'
Options") to purchase such Vanguard Stockholder's shares (collectively,
5,015,236 shares) of Vanguard Common Stock at an exercise price, generally, of
$23.00 per share.
Except in certain limited circumstances, AT&T may not exercise either the
Vanguard Option or the Stockholders Option until a termination of the Merger
Agreement pursuant to certain of the termination provisions contained therein.
Prior to the Vanguard Option and the Stockholders' Options becoming
exercisable and being exercised, AT&T expressly disclaims beneficial ownership
of the shares of Vanguard Common Stock which are purchasable by AT&T thereunder.
Neither the filing of this Form nor any of its contents shall be deemed to
constitute an admission that AT&T is the beneficial owner of the shares of
Vanguard Common Stock subject to the Vanguard Option and the Stockholders'
Options for purposes of Section 13(d) or 16 of the Securities Exchange Act of
1934, as amended, or for any other purpose and such beneficial ownership is
expressly disclaimed.
The foregoing summaries of the Vanguard Option Agreement and the Voting
Agreements are qualified in their entirety by reference to such agreements,
which have been filed as exhibits to AT&T's Schedule 13D filed with respect to
Vanguard on the date hereof.
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SIGNATURES OF REPORTING PERSONS
Dated: October 13, 1998.
AT&T CORP.
By: /s/ Robert S. Feit
Name: Robert S. Feit
Title: Authorized Signatory
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