UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 4
STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP
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
[ ] Check this box if no longer subject of Section 16. Form 4 or Form 5
obligations may continue. See Instruction 1(b).
(Print or Type Responses)
================================================================================
1. Name and Address of Reporting Person*
AT&T Corp.
- --------------------------------------------------------------------------------
(Last) (First) (Middle)
32 Avenue of the Americas
- --------------------------------------------------------------------------------
(Street)
New York New York 10013-2412
- --------------------------------------------------------------------------------
(City) (State) (Zip)
================================================================================
2. Issuer Name and Ticker or Trading Symbol
Vanguard Cellular Systems, Inc. (Symbol: VCELA)
================================================================================
3. IRS or Identification Number of Reporting Person, if an entity (Voluntary)
13-4924710
================================================================================
4. Statement for Month/Year
December 1998
================================================================================
5. If Amendment, Date of Original (Month/Year)
================================================================================
6. Relationship of Reporting Person to Issuer
(Check all applicable)
[ ] Director [ x ] 10% Owner
[ ] Officer (give title below) [ ] Other (specify below)
================================================================================
7. Individual or Joint/Group Filing (Check Applicable Line)
[x ] Form filed by one Reporting Person
[ ] Form filed by more than one Reporting Person
================================================================================
Table I -- Non-Derivative Securities Acquired, Disposed of,
or Beneficially Owned
================================================================================
<TABLE>
<CAPTION>
6.
4. 5. Owner-
Securities Acquired (A) or Amount of ship
3. Disposed of (D) Securities Form: 7.
Transaction (Instr. 3, 4 and 5) Beneficially Direct Nature of
2. Code ------------------------------- Owned at End (D) or Indirect
1. Transaction (Instr. 8) (A) of Month Indirect Beneficial
Title of Security Date ------------ Amount or Price (Instr. 3 (I) Ownership
(Instr. 3) (mm/dd/yy) Code V (D) and 4) (Instr.4) (Instr. 4)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
</TABLE>
* If the form is filed by more than one Reporting Person, see Instruction
4(b)(v).
Reminder: Report on a separate line for each class of securities beneficially
owned directly or indirectly.
(Print or Type Response)
<PAGE>
FORM 4 (continued)
Table II -- Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
================================================================================
<TABLE>
<CAPTION>
10.
9. Owner-
Number ship
of Form
2. Deriv- of
Conver- 5. 7. ative Deriv- 11.
sion Number of Title and Amount Secur- ative Nature
of Derivative 6. of Underlying 8. ities Secur- of
Exer- 4. Securities Date Securities Price Bene- ity: In-
cise 3. Trans- Acquired (A) Exercisable and (Instr. 3 and 4) of ficially Direct direct
Price Trans- action or Disposed Expiration Date ---------------- Deriv- Owned (D) or Bene-
1. of action Code of(D) (Month/Day/Year) Amount ative at End In- ficial
Title of Deriv- Date (Instr. (Instr. 3, ---------------- or Secur- of direct Owner-
Derivative ative (Month/ 8) 4 and 5) Date Expira- Number ity Month (I) ship
Security Secur- Day/ --------------------- Exer- tion of (Instr. (Instr. (Instr. (Instr.
(Instr. 3) ity Year) Code V (A) (D) cisable Date Title Shares 5) 4) 4) 4)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Option generally
(contingent $23.00 per 12/28/98 1,580,045 (see (see (see (see (see 13,914,281
right to buy) share (see J attached) attached) attached) attached) attached) D
(see attached) attached)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
</TABLE>
Explanation of Responses:
- --------------------------------------------- -----------------------
**Signature of Reporting Person Date
** Intentional misstatements or omissions of facts constitute Federal
Criminal Violations.
See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed.
If space provided is insufficient, see Instruction 6 for procedures.
<PAGE>
FORM 4 CONTINUATION SHEET
EXPLANATION OF RESPONSE
This Statement of Changes in Beneficial Ownership on Form 4 (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 "Original Merger Agreement"), dated as of October 2, 1998, which
was amended by Amendment No. 1 thereto, dated as of November 4, 1998, and
further amended and restated by the Amended and Restated Agreement and Plan of
Merger (the "Merger Agreement"), dated as of October 2, 1998, providing for,
among other things, the merger of Vanguard with and into Merger Sub (the
"Merger"). In connection with the Original Merger Agreement, AT&T and Vanguard
entered into an Option Agreement (the "Vanguard Option Agreement"), 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
Original 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.
On December 22, 1998, AT&T consented under the Merger Agreement to the
transfers of 784,782 shares of Vanguard Common Stock, which shares are subject
to the Voting Agreements, by Haynes G. Griffin, Stephen R. Leeolou and L.
Richardson Preyer, Jr. to The Haynes G. Griffin 1998 Charitable Remainder
Unitrust, the Griffin Family Foundation, The Stephen R. and Mary D. Leeolou 1998
Charitable Remainder Unitrust, the Leeolou Family Foundation, the Lunsford
Richardson Preyer, Jr. Charitable Remainder Unitrust and the Preyer-Jacobs
Foundation (the "Charitable Trust and Family Foundation Stockholders"). In
connection therewith, the Charitable Trust and Family Foundation Stockholders
entered into voting agreements (the "Charitable Trust and Family Foundation
Voting Agreements") on terms substantially the same as the Voting Agreements,
including granting to AT&T an option to purchase transferred shares under the
applicable Charitable Trust and Family Foundation Voting Agreement (such
options to purchase, collectively, the "Charitable Trust and Family Foundation
Stockholders' Options").
On December 28, 1998, AT&T consented under the Merger Agreement, in a
Letter Agreement between Vanguard and AT&T (the "Executive Loan Letter
Agreement"), to the lending by Vanguard to certain of its executive officers
(the "Executive Loan Program") of funds for such executive officers to finance
the exercise of stock options to purchase up to an aggregate of 4,398,795 shares
of Vanguard Common Stock (1,580,045 of which are held by executive officers not
parties to Voting Agreements) and to satisfy certain related tax obligations,
provided that any such loan will be secured by the shares of Vanguard Common
Stock purchased thereby and by certain other payments to be made to such
executive officers in connection with the Merger. In connection with such
borrowing, such officers not parties to Voting Agreements will be required to
agree (i) to vote the shares of Vanguard Common Stock acquired in connection
therewith in favor of approval of the Merger Agreement and against any
Acquisition Proposal from any person other than AT&T and (ii) not to sell,
transfer, dispose of, encumber or otherwise convey any interest in such shares
prior to March 31, 1999. Such officers who are parties to Voting Agreements will
continue to be subject to such Voting Agreements.
Except in certain limited circumstances, AT&T may not exercise the
Vanguard Option, the Stockholders' Options or the Charitable Trust and Family
Foundation Stockholders' Options until a termination of the Merger Agreement
pursuant to certain of the termination provisions contained therein.
Prior to the Vanguard Option, the Stockholders' Options and the
Charitable Trust and Family Foundation 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
3 of 5
<PAGE>
shares of Vanguard Common Stock subject to the Vanguard Option, the
Stockholders' Options and the Charitable Trust and Family Foundation
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, the Voting
Agreements, the Executive Loan Letter Agreement (and the Executive Loan Program)
and the Charitable Trust and Family Foundation 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 October 13,
1998, as amended by Amendment No. 1 thereto filed on November 9, 1998, and as
further amended by Amendment No. 2 thereto filed on January 4, 1999.
4 of 5
<PAGE>
SIGNATURES OF REPORTING PERSONS
Dated: January 8, 1999.
AT&T CORP.
By: /s/ Robert S. Feit
---------------------------
Name: Robert S. Feit
Title:Authorized Signatory
5 of 5
