SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
VANGUARD CELLULAR SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
North Carolina 56-1549590
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2002 Pisgah Church Road, Suite 300
Greensboro, North Carolina 27455
(Address of Principal Executive Offices) (Zip Code)
VANGUARD CELLULAR SYSTEMS, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
RICHARD C. ROWLENSON, GENERAL COUNSEL
Vanguard Cellular Systems, Inc.
2002 Pisgah Church Road, Suite 300
Greensboro, North Carolina 27455
(Name and address of agent for service)
(910) 282-3690
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Proposed Proposed
Title of Maximum Maximum
Securities Offering Aggregate
to be Amount to be Price Offering Amount of
registered Registered Per Share* Price* Registration Fee
Class A 500,000 shares $14.3125 $7,156,250 $2,168.56*
Common Stock,
par value
$.01 per
share
</TABLE>
*Pursuant to Rule 457(h), the average of the high and low
price of the Class A Common Stock as reported on NASDAQ's
National Market System on July 28, 1997 has been used to
calculate the amount of the registration fee.
Approximate date of sale to the public: Upon
effectiveness of this Registration Statement.
<PAGE>
This Registration Statement on Form S-8 covers 500,000
shares of the Class A Common Stock, par value $.01 per share,
(the "Common Stock") of Vanguard Cellular Systems, Inc. (the
"Registrant") issuable upon purchase of Common Stock under the
Registrant's 1997 Employee Stock Purchase Plan (the "Plan").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant is subject to the informational requirements
of the Securities Exchange Act of 1934 (the "Exchange Act"), and
in accordance therewith files reports and other information with
the Securities and Exchange Commission. The following documents
have previously been filed by the Registrant with the Commission
and are incorporated herein by reference as of their respective
dates:
(a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as amended on Form 10-K/A dated April 15,
1997 and on Form 10-K/A dated June 30, 1997,
(b) Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997,
(c) The description of the Common Stock of the Registrant
set forth under the heading "Description of Registrant's
Securities to be Registered" in the Registrant's Amendment
No. 3 to Registration Statement on Form 8-A/A filed on
July 29, 1997 with the Securities and Exchange Commission.
All documents that are hereafter filed by the Registrant
pursuant to Sections 13, 14 and 15(d) of the Exchange Act, prior
to the filing of a post-effective amendment which indicates that
all shares of the Common Stock issuable pursuant to the Plan have
been issued or which deregisters any shares then remaining
unissued, shall be deemed to be incorporated herein by reference
and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
Not Applicable.
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Item 5. Interests of Named Experts and Counsel.
Legal matters in connection with the securities registered
hereunder are being passed upon for the Registrant by Schell Bray
Aycock Abel & Livingston P.L.L.C., Renaissance Plaza,
230 North Elm Street, Suite 1500, Greensboro, North Carolina 27401.
Doris R. Bray, a partner in the above-referenced law firm, is a
director of the Registrant.
Item 6. Indemnification of Directors and Officers.
Article VIII of the Registrant's Bylaws provides:
"ARTICLE VIII.
Indemnification
1. Extent. In addition to the indemnification otherwise
provided by law, the corporation shall indemnify and hold
harmless its directors and Indemnified Officers (as hereinafter
defined) against liability and expenses in any proceeding,
including reasonable attorneys' fees, arising out of their status
as directors or officers or their activities in any of such
capacities or in any capacity in which any of them is or was
serving, at the corporation's request, in another corporation,
partnership, joint venture, trust or other enterprise, and the
corporation shall indemnify and hold harmless those directors and
officers who are deemed to be fiduciaries of the corporation's
present and future employee pension and welfare benefit plans as
defined under the Employee Retirement Income Security Act of 1974
("ERISA fiduciaries") against liability and expenses in any
proceeding, including reasonable attorneys' fees, arising out of
their status or activities as ERISA fiduciaries; provided,
however, that the corporation shall not indemnify a director or
Indemnified Officer against liability or litigation expense that
he may incur on account of his activities that at the time taken
were known or reasonably should have been known by him to be
clearly in conflict with the best interests of the corporation,
and the corporation shall not indemnify an ERISA fiduciary
against any liability or litigation expense that he may incur on
account of his activities that at the time taken were known or
reasonably should have been known by him to be clearly in
conflict with the best interests of the employee benefit plan to
which the activities relate. The corporation shall also
indemnify the director, Indemnified Officer, and ERISA fiduciary
for reasonable costs, expenses and attorneys' fees in connection
with the enforcement of rights to indemnification granted herein,
if it is determined in accordance with Section 2 of this Article
that the director, Indemnified Officer and ERISA fiduciary is
entitled to indemnification hereunder.
2. Determination. Any indemnification under Section 1 of
this Article shall be paid by the corporation in any specific
case only after a determination that the director, Indemnified
Officer or ERISA fiduciary did not act in a manner, at the time
the activities were taken, that was known or reasonably should
have been known by him to be clearly in conflict with the best
interests of the corporation, or the employee benefit plan to
which the activities relate, as the case may be. Such
determination shall be made (a) by the affirmative vote of a
majority (but not less than two) of directors who are or were not
parties to such action, suit or proceeding or against whom any
such claim is asserted ("disinterested directors") even though
less than a quorum, or (b) if a majority (but not less than two)
of disinterested directors so direct, by independent legal
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counsel in a written opinion, or (c) if there are less than two
disinterested directors, by the affirmative vote of all of the
directors, or (d) by the vote of a majority of all of the voting
shares other than those owned or controlled by directors or
officers who were parties to such action, suit or proceeding or
against whom such claim is asserted, or by a unanimous vote of
all of the voting shares, or (e) by a court of competent
jurisdiction.
3. Advanced Expenses. Expenses incurred by a director,
Indemnified Officer or ERISA fiduciary in defending a civil or
criminal claim, action, suit or proceeding may, upon approval of
a majority (but not less than two) of the disinterested
directors, even though less than a quorum, or, if there are less
than two disinterested directors, upon unanimous approval of the
Board of Directors, be paid by the corporation in advance of the
final disposition of such claim, action, suit or proceeding upon
receipt of an undertaking by or on behalf of the director,
Indemnified Officer or ERISA fiduciary to repay such amount
unless it shall ultimately be determined that he is entitled to
be indemnified against such expenses by the corporation.
4. Corporation. For purposes of this Article, references
to directors or officers of the "corporation" shall be deemed to
include directors, officers and ERISA fiduciary of Vanguard
Cellular Systems, Inc., its subsidiaries, and all constituent
corporations absorbed into Vanguard Cellular Systems, Inc. or any
of its subsidiaries by a consolidation or merger.
5. Indemnified Officer. For purposes of this Article,
"Indemnified Officer" shall mean all officers of the corporation
who are elected by the Board of Directors.
6. Reliance and Consideration. Any director, Indemnified
Officer or ERISA fiduciary who at any time after the adoption of
this Bylaw serves or has served in any of the aforesaid
capacities for or on behalf of the corporation shall be deemed to
be doing or to have done so in reliance upon, and as
consideration for, the right of indemnification provided herein.
Such right shall inure to the benefit of the legal
representatives of any such person and shall not be exclusive of
any other rights to which such person may be entitled apart from
the provision of this Bylaw. No amendment, modification or
repeal of this Article VIII shall adversely affect the right of
any director, Indemnified Officer or ERISA fiduciary to
indemnification hereunder with respect to any activities
occurring prior to the time of such amendment, modification or
repeal.
7. Insurance. The corporation may purchase and maintain
insurance on behalf of its directors, officers, employees and
agents and those persons who were serving at the request of the
corporation as a director, officer, partner, trustee, employee,
or agent of, or in some other capacity in, another corporation,
partnership, joint venture, trust, employee benefit plan, or
other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the
power to indemnify him against such liability under the
provisions of this Article or otherwise. Any full or partial
payment made by an insurance company under any insurance policy
covering any director, officer, employee or agent made to or on
behalf of a person entitled to indemnification under this Article
shall relieve the corporation of its liability for
indemnification provided for in
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this Article or otherwise to the extent of such payment, and no
insurer shall have a right of subrogation against the corporation
with respect to such payment."
The North Carolina General Statutes contain provisions
prescribing the extent to which directors and officers shall or
may be indemnified. These statutory provisions are set forth
below:
CH. 55 N.C. BUSINESS CORPORATION ACT
Part 5. Indemnification.
Section 55-8-50. Policy Statement and Definitions.
(a) It is the public policy of this State to enable
corporations organized under this Chapter to attract and maintain
responsible, qualified directors, officers, employees and agents,
and, to that end, to permit corporations organized under this
Chapter to allocate the risk of personal liability of directors,
officers, employees and agents through indemnification and
insurance as authorized, in this Part.
(b) Definitions in this Part:
(1) "Corporation" includes any domestic or foreign
predecessor entity of a corporation in a merger or other
transaction in which the predecessor's existence ceased upon
consummation of the transaction.
(2) "Director"means an individual who is or was a
director of a corporation or an individual who, while a
director of a corporation, is or was serving at the
corporation's request as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise. A director is considered
to be serving an employee benefit plan at the corporation's
request if his duties to the corporation also impose duties
on, or otherwise involve services by, him to the plan or
to participants in or beneficiaries of the plan.
"Director" includes, unless the context requires otherwise,
the estate or personal representative of a director.
(3) "Expenses" means expenses of every kind incurred
in defending a proceeding, including counsel fees.
(4) "Liability" means the obligation to pay a
judgment, settlement, penalty, fine (including an excise tax
assessed with respect to an employee benefit plan). or
reasonable expenses incurred with respect to a proceeding.
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(5) "Official capacity" means: (i) when used with
respect to a director, the office of director in a corpora-
tion; and (ii) when used with respect to an individual other
than a director, as contemplated in G.S. 55-8-56, the office
in a corporation held by the officer or the employment or
agency relationship undertaken by the employee or agent on
behalf of the corporation. "Official capacity" does not
include service for another foreign or domestic corporation
or any partnership, joint venture, trust, employee benefit
plan, or other enterprise.
(6) "Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent in a
proceeding.
(7) "Proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative and whether
formal or informal.
Section 55-8-51. Authority to Indemnify.
(a) Except as provided in subsection (d), a corporation may
indemnify an individual made a party to a proceeding because he
is or was a director against liability incurred in the proceeding
if:
(1) He conducted himself in good faith; and
(2) He reasonably believed (i) in the case of conduct
in his official capacity with the corporation, that his
conduct was in its best interests; and (ii) in all other cases,
that his conduct was at least not opposed to its best interests; and
(3) In the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
(b) A director's conduct with respect to an employee
benefit plan for a purpose he reasonably believed to be in the
interests of the participants in and beneficiaries of the plan is
conduct that satisfies the requirement of subsection (a)(2)(ii).
(c) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of no contest or its
equivalent is not, of itself, determinative that the director did
not meet the standard of conduct described in this section.
(d) A corporation may not indemnify a director under this
section:
(1) In connection with a proceeding by or in the
right of the corporation in which the director was adjudged
liable to the corporation; or
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(2) In connection with any other proceeding
charging improper personal benefit to him, whether or not
involving action in his official capacity, in which he was
adjudged liable on the basis that personal benefit was
improperly received by him.
(e) Indemnification permitted under this section in
connection with a proceeding by or in the right of the corpo-
ration that is concluded without a final adjudication on the
issue of liability is limited to reasonable expenses incurred in
connection with the proceeding.
(f) The authorization, approval or favorable
recommendation by the board of directors of a corporation of
indemnification, as permitted by this section, shall not be
deemed an act or corporate transaction in which a director has a
conflict of interest, and no such indemnification shall be void
or voidable on such ground.
Section 55-8-52. Mandatory Indemnification.
Unless limited by its articles of incorporation, a
corporation shall indemnify a director who was wholly successful,
on the merits or otherwise, in the defense of any proceeding to
which he was a party because he is or was a director of the
corporation against reasonable expenses incurred by him in
connection with the proceeding.
Section 55-8-53. Advance For Expenses.
Expenses incurred by a director in defending a
proceeding may be paid by the corporation in advance of the final
disposition of such proceeding as authorized by the board of
directors in the specific case or as authorized or required under
any provision in the articles of incorporation or bylaws or by
any applicable resolution or contract upon receipt of an
undertaking by or on behalf of the director to repay such amount
unless it shall ultimately be determined that he is entitled to
be indemnified by the corporation against such expenses.
Section 55-8-54. Court-ordered indemnification.
Unless a corporation's articles of incorporation
provide otherwise, a director of the corporation who is a party
to a proceeding may apply for indemnification to the court
conducting the proceeding or to another court of competent
jurisdiction. On receipt of an application, the court after
giving any notice the court considers necessary may order
indemnification if it determines:
(1) The director is entitled to mandatory
indemnification under G.S. 55-8-52, in which case the court shall
also order the corporation to pay the director's reasonable
expenses incurred to obtain court-ordered indemnification; or
(2) The director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances,
whether or not he met the standard of conduct set forth in G.S.
55-8-
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51 or was adjudged liable as described in G.S. 55-8-51(d),
but if he was adjudged so liable his indemnification is limited
to reasonable expenses incurred.
Section 55-8-55. Determination and Authorization of Indemnification.
(a) A corporation may not indemnify a director under
G.S. 55-8-51 unless authorized in the specific case after a
determination has been made that indemnification of the director
is permissible in the circumstances because he has met the
standard of conduct set forth in G.S. 55-8-51.
(b) The determination shall be made:
(1) By the board of directors by majority vote of a
quorum consisting of directors not at the time parties
to the proceeding;
(2) If a quorum cannot be obtained under subdivision
(1), by majority vote of a committee duly designated by
the board of directors (in which designation directors
who are parties may participate), consisting solely of
two or more directors not at the time parties to the
proceeding;
(3) By special legal counsel (i) selected by the board
of directors or its committee in the manner prescribed
in subdivision (1) or (2); or (ii) if a quorum of the board
of directors cannot be obtained under subdivision (1)
and a committee cannot be designated under subdivision
(2), selected by majority vote of the full board of
directors (in which selection directors who are parties
may participate); or
(4) By the shareholders, but shares owned by or voted
under the control of directors who are at the time
parties to the proceeding may not be voted on the
determination.
(c) Authorization of indemnification and evaluation as
to reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible, except
that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under
subsection (b)(3) to select counsel.
Section 55-8-56. Indemnification Of Officers, Employees, and Agents.
Unless a corporation's articles of incorporation
provide otherwise:
(1) An officer of the corporation is entitled to
mandatory indemnification under G.S. 55-8-52, and is entitled to
apply for court-ordered indemnification under G.S. 55-8-54, in
each case to the same extent as a director.
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(2) The corporation may indemnify and advance expenses
under this Part to an officer, employee, or agent of the
corporation to the same extent as to a director; and
(3) A corporation may also indemnify and advance
expenses to an officer, employee, or agent who is not a director
to the extent, consistent with public policy, that may be
provided by its articles of incorporation, bylaws, general or
specific action of its board of directors, or contract.
Section 55-8-57. Additional Indemnification and Insurance.
(a) In addition to and separate and apart from the
indemnification provided for in G.S. 55-8-51, 55-8-52, 55-8-54,
55-8-55 and 55-8-56, a corporation may in its articles of
incorporation or bylaws or by contract or resolution indemnify or
agree to indemnify any one or more of its directors, officers,
employees, or agents against liability and expenses in any
proceeding (including without limitation a proceeding brought by
or on behalf of the corporation itself) arising out of their
status as such or their activities in any of the foregoing
capacities; provided, however, that a corporation may not
indemnify or agree to indemnify a person against liability or
expenses he may incur account of his activities which were at the
time taken known or believed by him to be clearly in conflict
with the b interests of the corporation. A corporation may
likewise and to the same extent indemnify or agree to indemnify a
person who, at the request of the corporation, is or was serving
as a director, officer, partner, trustee, employee, agent of
another foreign or domestic corporation, partnership, joint
venture, trust or other enterprise or as a trust or administrator
under an employee benefit plan. Any provision in any articles of
incorporation, bylaw, contract, resolution permitted under this
section may include provisions for recovery from the corporation
of reasonable costs, expenses, and attorneys' fees in connection
with the enforcement of rights to indemnification granted therein
and may further include provisions establishing reasonable
procedures for determining and enforcing the rights granted
therein.
(b) The authorization, adoption, approval, or
favorable recommendation by the board of directors of a public
corporation of any provision in any articles of incorporation,
bylaw, contract or resolution, as permitted in this section,
shall not be deemed an act or corporate transaction in which a
director has a conflict of interest, and no such articles of
incorporation or bylaw provision or contract or resolution shall
be void or voidable on such grounds. The authorization,
adoption, approval, or favorable recommendation by the board of
directors of a nonpublic corporation of any provision in any
articles of incorporation, bylaw, contract or resolution, as
permitted in this section which occurred prior to July 1, 1990,
shall not be deemed an act or corporate transaction in which a
director has a conflict of interest, and no such articles of
incorporation, bylaw provision, contract or resolution shall be
void voidable on such grounds. Except as permitted in G.S. 55-8-31,
no such bylaw, contract, or resolution not adopted,
authorized, approved or ratified by shareholders shall be
effective as to claims made or liabilities asserted again any
director prior to its adoption, authorization, or approval by the
board of directors.
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(c) A corporation may purchase and maintain insurance
on behalf of an individual who is or was a director, officer,
employee or agent of the corporation, or who, while a director,
officer, employee, or agent of the corporation, is or was serving
at the request of the corporation as a director, officer,
partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise, against liability asserted
against or incurred by him in that capacity or arising from his
status as a direct officer, employee, or agent, whether or not
the corporation would have power to indemnify him against the
same liability under any provision of this Chapter.
Section 55-8-58. Application of Part.
(a) If articles of incorporation limit indemnification
or advance for expenses, indemnification and advance for expenses
are valid only to the extent consistent with the articles.
(b) This Part does not limit a corporation's power to
pay or reimburse expenses incurred by a director in connection
with his appearance as a witness in a proceeding at a time when
he has not been made a name defendant or respondent to the
proceeding.
(c) This Part shall not affect rights or liabilities
arising out of acts or omissions occurring before July 1, 1990.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits
The Exhibits to this Form S-8 are listed in the
accompanying Index to Exhibits.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a
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fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change in such
information in the Registration Statement.
Provided, however, that paragraphs (1)(i) and
(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the Registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for the
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Greensboro, State of North Carolina, on August 29,
1997.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ Haynes G. Griffin
Haynes G. Griffin, Chairman of the Board
and Co-Chief Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Haynes G. Griffin Chairman of the Board, August 29, 1997
Haynes G. Griffin Co-Chief Executive Officer
and Director
/s/ Stephen R. Leeolou President, Co-Chief August 29, 1997
Stephen R. Leeolou Executive Officer and Director
/s/ L. Richardson Preyer, Jr. Executive Vice President, August 29, 1997
L. Richardson Preyer, Jr. Treasurer and Director
/s/ Stephen L. Holcombe Executive Vice President and August 29, 1997
Stephen L. Holcombe Chief Financial Officer (Chief
Accounting Officer)
/s/ Doris R. Bray Director August 29, 1997
Doris R. Bray
/s/ Stuart S. Richardson Director August 29, 1997
Stuart S. Richardson
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/s/ Robert A. Silverberg Director August 29, 1997
Robert A. Silverberg
/s/ F. Cooper Brantley Director August 29, 1997
F. Cooper Brantley
/s/ L. Richardson Preyer, Sr. Director August 29, 1997
L. Richardson Preyer, Sr.
/s/ Robert M. DeMichele Director August 29, 1997
Robert M. DeMichele
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EXHIBITS
Index to Exhibits
Exhibit
No. Description
*3(a) Articles of Incorporation of the Registrant, as
amended through July 25, 1995, filed as Exhibit 1
to the Registrant's Form 8-A/A dated July 25, 1995.
*3(b) Bylaws of the Registrant (compilation as of July
25, 1995), filed as Exhibit 2 to the Registrant's
Form 8-A/A dated July 25, 1995.
*4(a) Specimen Common Stock Certificate filed as Exhibit
4(a) to the Registrant's Registration Statement on
Form S-1 (No. 33-18067).
*4(b)(1) Second Amended and Restated Loan Agreement between the
Vanguard Cellular Operating Corp. and various lenders led by
The Bank of New York and The Toronto-Dominion Bank as agents,
dated as April 10, 1996, filed as Exhibit 4(d)(1) to the
Registrant's Form 10-Q/A dated March 31, 1996.
*4(b)(2) VCOC Security Agreement between Vanguard Cellular Operating
Corp. and various lenders led by The Bank of New York and The
Toronto-Dominion Bank, as Secured Party, dated as of
April 10, 1996, filed as Exhibit 4(d)(2) to the
Registrant's Form 10-Q/A dated March 31, 1996.
*4(b)(3) Second Amended and Restated Master Subsidiary Security
Agreement between the Registrant and various
lenders led by The Bank of New York and The
Toronto-Dominion Bank, as Secured Party, dated as of
April 10, 1996, filed as Exhibit 4(d)(3) to the
Registrant's Form 10-Q/A dated March 31, 1996.
*4(b)(4) Assignment, Bill of Sale and Assumption Agreement by
and between Registrant and Vanguard Cellular Financial
Corp., dated as of April 10, 1996, filed as Exhibit
4(d)(4) to the Registrant's Form 10-Q/A dated March 31,
1996.
*4(b)(5) First Amendment to Second Amended and Restated Loan Agreement
between Vanguard Cellular Operating Corp. and various lenders
led by The Bank of New York and The Toronto-Dominion Bank, as agents,
dated as of July 31, 1996, filed
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as Exhibit 4(d)(5) to the Registrant's Form 10-Q dated September
30, 1996 and confirmed electronically as Exhibit 4(d)(5) to the
Registrant's Form 10-Q/A dated September 30, 1996.
*4(b)(6) Second Amendment to Second Amended and Restated Loan Agreement
between Vanguard Cellular Operating Corp. and various lenders
led by The Bank of New York and The Toronto-Dominion Bank, as agents,
dated as of October 9, 1996, filed as Exhibit 4(d)(6) to the
Registrant's Form 10-Q dated September 30, 1996 and confirmed
electronically as Exhibit 4(d)(6) to the Registrant's Form 10-Q/A
dated September 30, 1996.
*4(b)(7) Third Amendment to Second Amended and Restated Loan Agreement
between Vanguard Cellular Operating Corp. and various lenders
led by The Bank of New York and The Toronto-Dominion Bank, as
agents, dated as of March 31, 1997, filed as Exhibit 4(b)(7) to
the Registrant's Form 10-Q dated March 31, 1997.
*4(c)(1) Indenture dated as of April 1, 1996 between Registrant
and The Bank of New York as Trustee, filed as Exhibit
4(e)(1) to the Registrant's Form 10-Q/A dated March 31,
1996.
*4(c)(2) First Supplemental Indenture, dated as of April 1, 1996
between Registrant and The Bank of New York as Trustee,
filed as Exhibit 4(e)(2) to the Registrant's Form 10-Q/A
dated March 31, 1996.
5 Opinion of Schell Bray Aycock Abel & Livingston
P.L.L.C.
23(a) Consent of Arthur Andersen LLP
23(b) Consent of Prasetio, Utomo & Co.
23(c) Consent of KPMG Peat Marwick
23(d) Consent of KPMG Peat Marwick, LLP
23(e) The consent of Schell Bray Aycock Abel & Livingston P.L.L.C.
is contained in its opinion filed as Exhibit 5.
99(a) 1997 Employee Stock Purchase Plan of the
Registrant, as amended by the Registrant's Board
of Directors on July 23, 1997.
* Incorporated by reference to the statement or report indicated.
15
<PAGE>
Exhibit 5
August 29, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Vanguard Cellular Systems, Inc.
Registration Statement on Form S-8
Gentlemen:
We have represented Vanguard Cellular Systems, Inc. (the
"Registrant"), a North Carolina corporation, in connection with
the registration of 500,000 shares of Common Stock (the "Shares")
issuable pursuant to the Registrant's 1997 Employee Stock Plan
(the "Plan").
In connection with this Plan, we have examined the
Registrant's Charter and Bylaws, as amended, the Registration
Statement on Form S-8 with respect to such shares, the Plan and
such corporate records of the Registrant and questions of law as
we have deemed relevant for the purpose of this opinion. Based
upon such review, we are of the opinion that:
1. All necessary corporate action has been taken to
authorize the issuance of the Shares pursuant to the
Plan.
2. When duly issued in accordance with the Plan as
contemplated by the Registration Statement, the Shares
will be validly issued, fully paid and nonassessable
shares of Common Stock of the Registrant.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement. This consent is not to be
construed as an admission that we are a person whose consent is
required to be filed with the Registration Statement under the
provisions of the Securities Act of 1933, as amended.
Very truly yours,
SCHELL BRAY AYCOCK ABEL & LIVINGSTON P.L.L.C.
<PAGE>
Exhibit 23(a)
Consent of Independent Public Accountants
To Vanguard Cellular Systems, Inc.:
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated November 18,
1996, February 26, 1997 and March 17, 1997 included in Vanguard Cellular
Systems, Inc.'s Form 10-K for the year ended December 31, 1996 and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Greensboro, North Carolina,
August 29, 1997
Exhibit 23.b
Consent of Independent Public Accountants
To Vanguard Cellular Systems, Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated March 24, 1997
included in Vanguard Cellular Systems, Inc.'s Form 10-K for the year ended
December 31, 1996 and to all references to our Firm included in this
registration statement.
PRASETIO, UTOMO & CO.
/s/ Prasetio, Utomo & Co.
Jakarta, Indonesia
August 29, 1997
Exhibit 23(c)
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Vanguard Cellular Systems, Inc.
We consent to incorporation by reference in the registration statement on
Form S-8 of Vanguard Cellular Systems, Inc. (1997 Employee Stock Purchase Plan)
of our report dated April 17, 1997, relating to the consolidated balance sheets
of Syarikat Telefon Wireless (M) Sdn Bhd and subsidiary as of December 31, 1995
and 1996, and the related consolidated profit and loss accounts, statements of
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1996, which report appears in the December 31,
1996 annual report on Form 10-K/A of Vanguard Cellular Systems, Inc.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Kuala Lumpur
August 29, 1997
Exhibit 23(d)
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Vanguard Cellular Systems, Inc.
We consent to incorporation by reference in the registration statement on
Form S-8 of Vanguard Cellular Systems, Inc. (1997 Employee Stock Purchase
Plan) of our report dated April 17, 1997, relating to the consolidated
balance sheets of International Wireless Communications Holdings,
Inc. and subsidiary as of December 31, 1995 and 1996, and the related
consolidated statements of operations, stockholders' equity (deficit),
and cash flows for each of the years in the three-year period ended
December 31, 1996, which report appears in the December 31, 1996 annual
report on Form 10-K/A of Vanguard Cellular Systems, Inc.
/s/ KPMG Peat Marwick, LLP
San Jose, California
August 29, 1997
Exhibit 99
Composite as of July 23, 1997
VANGUARD CELLULAR SYSTEMS, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. This 1997 Employee Stock Purchase Plan (the "Plan") is
intended to encourage eligible employees of Vanguard Cellular Systems, Inc.
(the "Company") and its corporate subsidiaries, as defined in Section 15 below
(individually, a "Subsidiary" and collectively, "Subsidiaries"), to acquire
or increase a proprietary interest in the Company and
thereby to provide an incentive for such employees to continue their
employment with the Company and to contribute to the success of the Company.
It is further intended that options issued pursuant to this Plan shall
constitute options issued under an "employee stock purchase
plan" within the meaning of Section 423 of the Internal Revenue Code of 1986,
as amended (the "Code"), and, accordingly, this Plan and the options granted
hereunder shall be construed and interpreted to comply with the requirements
of that section and of the regulations issued thereunder.
2. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company as constituted from time to
time (the "Committee") of not less than two "Non-Employee" directors of the
Company within the meaning of Rule 16b-3 of the Securities and Exchange
Commission. The interpretation and construction by the Committee of the Plan
or of any option or subscription agreement hereunder shall be final. No
member of the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any option or subscription
agreement hereunder. The Board of Directors may elect to administer the Plan
in lieu of the Committee.
3. Eligibility. All employees of the Company and the Subsidiaries who,
on the first day of an Offering Period, as hereinafter defined in Section 4,
are employed by the Company or a Subsidiary and have been continuously
employed by the Company or a Subsidiary (or a predecessor of the Company or
a Subsidiary) for at least the three-month period ending on the day
immediately preceding the first day of an Offering Period, as
hereinafter defined in Section 4, shall be eligible to participate hereunder
("Eligible Employees"), except that employees whose customary employment is
20 hours or less per week shall not be eligible. However, no Eligible Employee
may be granted an option if such employee, immediately after the option is
granted, owns stock possessing 5% or more of the total combined voting power
or value of all classes of stock of the Company or of its "parent
corporation" or "subsidiary corporation," as those terms are defined in
Sections 424(e) and 424(f) of the Code. For purposes of determining stock
ownership under the preceding sentence, the rules of Section 424(d) of the
Code shall apply, and stock which an employee may purchase under outstanding
options shall be treated as stock owned by the employee. All
Eligible Employees shall have the same rights and privileges with respect to
their options, except as to the number of shares covered thereby. In no event
shall options be granted to persons other than Eligible Employees.
4. Shares Subject to Plan; Offering Periods.
(a) The aggregate number of shares that may be issued pursuant to options
granted under the Plan shall be an aggregate of 500,000 shares of Class A
Common Stock of the Company, par value $.01 per share, (the "Common Stock")
subject to adjustment as provided in Section 13. The Committee shall
determine the aggregate number of shares that will be offered by the
Company to the employees in each Offering Period (as defined below);
provided that the aggregate number of shares offered in any Offering Period,
when added to the shares issued in previous Offering Periods pursuant to the
Plan, shall not exceed the aggregate number of shares described in this
Section 4(a).
(b) Except as discussed below for the first year the Plan is in effect,
there will be four offering periods (each an "Offering Period") each calendar
year. There will be only one Offering Period in calendar 1997, beginning on
October 1, 1997 and ending on December 31, 1997. Thereafter, in each year
that the Plan is in effect: the first Offering Period will begin on
January 1 and end on March 31; the second Offering Period will begin on
April 1 and end on June 30; the third Offering Period will begin on July 1 and
end on September 30; and the fourth Offering Period will begin on October 1
and end on December 31.
5. Participation. Eligible Employees become participants in the Plan by
execution and delivery of a subscription agreement provided by the Committee,
no later than thirty (30) days prior to the first day of an Offering Period.
6. Payroll Deductions.
(a) In order to purchase Common Stock an Eligible Employee must
indicate in the subscription agreement the contribution percentage he or she
wishes to authorize the Company to deduct at regular payroll intervals, in
integral percentage amounts ranging from 1% to 25% of such employee's
Eligible Pay (as defined below) for the applicable payroll period, with a
minimum deduction of $5.00 per payday, during each Offering Period. The
subscription agreement will include authorization for the Company to make
payroll deductions from the Eligible Employee's Eligible Pay. For purposes
of this Plan, "Eligible Pay" shall mean, for each Eligible Employee, the
sum of (i) his or her current salary or wage rate as in effect from
time to time plus (ii) any commissions paid to the Eligible Employee during the
applicable payroll period.
(b) In order to comply with the Federal tax laws, an Eligible
Employee may not be granted options under the Plan or any other Code Section
423 employee stock purchase plan of the Company if such option permits an
Eligible Employee's rights to purchase stock under all "employee stock
purchase plans" of the Company and its parent and subsidiary corporations to
accrue at a rate that exceeds $25,000 of fair market value of such stock
(determined at the time such option is granted) in any calendar year in which
such option is outstanding at any time, all as determined pursuant to
Section 423(b)(8) of the Code. The $25,000.00 limit is determined according
to the Fair Market Value (as defined below) of the Common Stock on
the first day (grant date) of the Offering Period.
(c) The amounts deducted shall be credited to the Eligible
Employee's account under the Plan, but no actual separate account will be
established by the Company to hold such amounts. The deducted amounts may be
commingled with the general assets of the Company and may be used for its
general corporate purposes.
(d) Payroll deductions begin on the first payday of each Offering
Period, and end on the last payday of each Offering Period. Eligible Employees
may participate in the Plan and purchase Common Stock only by means of payroll
deductions, except as provided in Section 11(a).
(e) So long as an Eligible Employee remains an employee of the
Company, payroll deductions will continue at the rate in effect from Offering
Period to Offering Period, unless at least thirty (30) days prior to the
first day of the next succeeding Offering Period the Eligible
Employee elects a different rate by filing a new subscription agreement
with the Committee or terminates his participation in the Plan pursuant
to Section 9(a).
7. Purchase Price.
(a) On the first day of each Offering Period, an Eligible Employee is
deemed to have been granted an option to purchase on the last day of the
Offering Period as many full shares of Common Stock as such Eligible
Employee will be able to purchase with the payroll deductions credited to
such Eligible Employee's account during such period.
(b) The price at which each option to purchase Common Stock may be
exercised is the percentage of the Fair Market Value of the Common Stock on
the last day of an Offering Period (but not below 85%) established by the
Committee at least 30 days before the first day of the Offering Period.
The Fair Market Value of the Common Stock shall mean the average of the
high and low prices therefor in the over-the-counter market on the last
trading day of an Offering Period as reported by the National Association
of Securities Dealers, Inc.
(c) The number of shares purchasable by each Eligible Employee per
Offering Period will be the number of whole shares obtained by dividing the
amount collected from the Eligible Employee (through payroll deductions
during that Offering Period) by the purchase price in effect for that
Offering Period.
8. Exercise of Options.
(a) Unless an Eligible Employee earlier terminates his participation in
the Plan pursuant to Section 9(a), each outstanding option will be exercised
automatically on the last day of an Offering Period (the "Exercise Date").
The exercise of the option is to be effected by applying the amount credited
to each Eligible Employee's account as of the Exercise Date to the purchase
on the Exercise Date of whole shares of Common Stock at the purchase price
in effect for the Offering Period.
(b) Fractional shares will not be issued under the Plan, and any amount
remaining in the Eligible Employee's account after such application will be
held for the purchase of Common Stock in the next Offering Period.
(c) If the number of shares for which options are exercised exceeds the
number of shares available in any Offering Period under the Plan, the shares
available for sale will be allocated by the Committee pro rata among the
Eligible Employees in such Offering Period in proportion to the relative
amounts in their accounts on the Exercise Date. Any amounts not
thereby applied to the purchase of Common Stock under the Plan will be
refunded to the Eligible Employees after the end of the Offering Period.
9. Withdrawal and Termination of Options.
(a) An Eligible Employee may withdraw from the Plan by providing
written notice to the Committee at any time prior to the Exercise Date of the
current Offering Period. Such notice shall be on a form (the "Withdrawal
Form") provided by the Committee for that purpose. The Withdrawal Form will
permit such an Eligible Employee to make the following election:
(i) The Eligible Employee may elect to terminate immediately his or her
outstanding options, and such withdrawal will become effective on the day
the Committee receives the Eligible Employee's Withdrawal Form, at which
time all outstanding options will be terminated and all accumulated
payroll deductions will be refunded; or
(ii) The Eligible Employee may elect to continue his or her
participation in the Plan through the end of the current Offering
Period, and thus exercise such employee's outstanding options on
the following Exercise Date, but terminate his or her
participation in the Plan for subsequent Offering Periods.
Payroll deductions for such an Eligible Employee will continue
until the end of the current Offering Period. After
the Exercise Date, no further options will be granted to the
Eligible Employee, and no further payroll deductions will be made.
Any amount remaining in the Eligible Employee's account will be
refunded.
(b) Any Eligible Employee who withdraws from the Plan pursuant to
Section 9(a) will not be eligible to rejoin the Plan for the Offering Period
underway at the time of withdrawal, and will have to re-enroll in the Plan
by executing and filing a new subscription agreement should such individual
wish to resume participation in a subsequent Offering
Period; provided, however, that such Eligible Employee may not re-enroll
in the Plan earlier than 90 days from the effective date of such withdrawal.
(c) The Committee may, at its option, treat any attempt to borrow by an
Eligible Employee on the security of his or her accumulated payroll deductions
as an election under Section 9(a)(i) hereof to withdraw such deductions.
10. Termination of Employment. If an Eligible Employee ceases to be
employed by the Company or a Subsidiary for any reason other than death
before the Exercise Date for an Offering Period, he shall be entitled to
only the prompt payment, in cash, of an amount equal
to the total of the payroll deductions pursuant to his subscription agreement.
11. Disability or Death of an Eligible Employee.
(a) Subject to Section 10, if an Eligible Employee has any period of
authorized disability leave during an Offering Period, such employee shall
be entitled to elect, within 30 days of the commencement of such leave or by
the Exercise Date, whichever is earlier, (i) to receive the prompt payment,
in cash, of an amount equal to the total of the payroll deductions
pursuant to the employee's subscription agreement, or (ii) to receive
the number of whole shares that can be purchased on the Exercise Date with
the total of the payroll deductions pursuant to the employee's subscription
agreement, or (iii) to make cash payments to the Company on a normal payday
equal to the amount of the normal payroll deduction had the
disability leave not occurred and have his option exercised on the
Exercise Date. The right of an Eligible Employee on approved disability
leave to continue participating in the Plan shall
terminate if such leave of absence exceeds the longer of (x) 90 days or
(y) expiration of the period during which the Eligible Employee's right to
re-employment by the Company is guaranteed by statute or contract. If the
Eligible Employee does not make a timely election to
exercise one of the foregoing rights, he shall be deemed to have elected
the right provided in clause (i).
(b) If an Eligible Employee dies before the Exercise Date of an
Offering Period, while in the employ of the Company or a Subsidiary, his
personal representative shall be entitled to elect, before the Exercise
Date of the current Offering Period, (i) to receive the
prompt payment, in cash, of an amount equal to the total of the payroll
deductions pursuant to the deceased employee's subscription agreement, or
(ii) to receive the number of whole shares
on the Exercise Date that can be purchased with the total of the payroll
deductions pursuant to the deceased employee's subscription agreement at
the time of his death. The personal representative shall have no rights
as a shareholder with respect to any option shares of the
deceased employee until the date on or as of which such shares are issued.
If the personal representative does not make a timely election to exercise
one of the foregoing rights, he shall be deemed to have elected the right
provided in clause (i).
12. Nonassignability. The rights of an Eligible Employee under this
Plan, and under any option or subscription agreement granted or entered
into pursuant to the terms of this Plan, shall not be transferable by such
employee otherwise than by will or the laws of descent
and distribution and, during the lifetime of the employee, such rights shall
be exercisable only by him.
13. Recapitalization. Subject to any required action by the
shareholders of the Company, the maximum number of shares of Common Stock
that may be issued pursuant to options granted under the Plan, the number
of shares of Common Stock covered by each option and subscription agreement,
and the price per share thereof shall be proportionately
adjusted for any increase or decrease in the number of issued shares of
Common Stock of the Company resulting from a subdivision or consolidation
of shares or the payment of a stock dividend (but only on the Common Stock)
or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Company.
Such adjustments shall be made by the Board of Directors, whose
determination in that respect shall be final, binding
and conclusive, provided that no adjustment shall be made that causes
the Plan to fail to continue to qualify as an "employee stock purchase
plan" within the meaning of Section 423 of the Code.
Subject to any required action by the shareholders of the Company, if the
Company shall be the surviving corporation in any merger or consolidation,
each outstanding option shall pertain to and apply to the securities or
other property to which any holder of the number of shares of Common Stock
covered by the option would have been entitled upon effectiveness
of such merger or consolidation. A dissolution or liquidation of the
Company or a merger or consolidation in which the Company is not the
surviving corporation shall cause each outstanding option and subscription
agreement to terminate, provided that, in such event, each
subscribing employee shall have the right immediately prior to such
dissolution or liquidation or merger or consolidation in which the
Company is not the surviving corporation to elect (i)
to receive the prompt payment, in cash, of an amount equal to the total
of the payroll deductions pursuant to his subscription agreement, or (ii)
to receive the number of whole shares of Common Stock that can be purchased
under the option with the total of the payroll
deductions pursuant to his subscription agreement as of that date.
If an Eligible Employee does not make a timely election to exercise
one of the foregoing rights prior to such
dissolution, liquidation, merger or consolidation, he shall be deemed
to have elected the right provided in clause (i).
Except as hereinabove expressly provided in this Section 13, Eligible
Employees shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class or the payment of any dividend (ordinary or
extraordinary and whether in cash, securities or other property) or any
increase or decrease in the number of shares of stock of any class or by
reason of any dissolution, liquidation, merger or consolidation or spin-off
of assets or stock of another corporation, and any issue by the Company of
shares of stock of any class, or securities convertible into shares of stock
of any class, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or option price of
shares of Common Stock subject to this Plan or any option or subscription
agreement hereunder.
The provisions of this Plan shall not affect in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or other
changes in its capital or business structure or to merge or consolidate or
dissolve or to sell or transfer all or any part of its business or assets.
14. Employment Rights. Neither the adoption of this Plan nor the
granting of any option or execution of any subscription agreement hereunder
shall be deemed to confer upon any employee of the Company or a Subsidiary
the right to continued employment or to interfere in any way with the right
of the Company or a Subsidiary to terminate the employment of an employee
at any time.
15. Subsidiary. For purposes of this Plan, Subsidiary shall mean any
corporation more than 50% of the total combined voting power of all classes
of stock of which is owned, directly or indirectly, by the Company on the
day immediately preceding the first day of any Offering Period.
16. Amendment. This Plan may be amended by the Board of Directors of
the Company in any way that shall not adversely affect the rights of employees
under subscription agreements theretofore entered into pursuant to the Plan,
but, without shareholder approval, no such amendment shall change the number
of shares of Common Stock subject to the Plan. Furthermore, the Plan may
not be amended in any manner that will cause it to fail to continue
to qualify as an "employee stock purchase plan" within the meaning of
Section 423 of the Code.
17. Shareholder Approval. This Plan is subject to approval of the
shareholders of the Company by a majority of the votes cast at a duly held
shareholders' meeting at which a quorum is present, either in person or by
proxy.
18. Effective Date, Suspension and Termination of Plan. The Plan shall
become effective when (i) the Plan has been adopted by the Board of Directors
and approved by the shareholders of the Company and (ii) a registration
statement under the Securities Act of 1933,
as amended, has become effective with respect to the shares to be purchased
under the Plan. The Plan shall terminate upon the termination of the Plan
by the Board of Directors of the Company or when no more shares remain to be
purchased under the Plan, whichever occurs first, but no such termination
shall adversely affect the rights of any Eligible Employee
(without his consent) under any option theretofore granted.
Upon the termination of the Plan, all unexercised options theretofore
granted pursuant hereto and all authorized payroll deductions hereunder
shall remain in full force and be carried out and effected, and upon the
exercise or termination of such options, as the case may be, the then
remaining credit balances in the respective employee's Plan accounts
shall be returned to the employees for whom such Plan accounts were
established. The Plan shall be suspended and become inoperative with
respect to shares not theretofore optioned under the Plan (but not with
respect to any uncompleted offerings) during any period in which no
registration statement or amendment thereto under the Securities Act of
1933, as amended, is in effect with respect to the shares so
remaining to be purchased under the Plan.
