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.
1996 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
(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 100,000 shares $14.3125 $1,431,250 $433.72*
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 100,000
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 1996 Stock Option Plan for Non-Employee Directors (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.
2
<PAGE>
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
3
<PAGE>
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
4
<PAGE>
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.
5
<PAGE>
(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
6
<PAGE>
(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-
7
<PAGE>
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.
8
<PAGE>
(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.
9
<PAGE>
(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
10
<PAGE>
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.
11
<PAGE>
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
12
<PAGE>
/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
13
<PAGE>
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
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.
14
<PAGE>
*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) 1996 Stock Option Plan for Non-Employee Directors of the
Registrant.
* Incorporated by reference to the statement or report indicated.
15
<PAGE>
Exhibit 5
September 2, 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 100,000 shares of Common Stock (the "Shares")
issuable pursuant to the Registrant's 1996 Stock Option Plan for Non-Employee
Directors (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,
/s/ Schell Bray Aycock Abel & Livingston P.L.L.C.
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. (1996 Stock Option Plan for Non-
Employee Directors) 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. (1996 Stock Option Plan for Non-
Employee Directors) 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
VANGUARD CELLULAR SYSTEMS, INC.
1996 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE
This 1996 Stock Option Plan for Non-Employee Directors (the "Plan") is
intended to encourage directors of Vanguard Cellular Systems, Inc. (the
"Company") who are not employees to remain directors and to provide
incentives to them that are linked directly to increases in
shareholder value and will therefore inure to the benefit of all
shareholders of the Company. Options granted pursuant to the Plan will be
nonqualified options for income tax purposes and are not intended to qualify
as Incentive Stock Options under Section 422A of the Internal Revenue
Code of 1986, as amended.
2. ADMINISTRATION
The Plan shall be administered by the Board of Directors of the Company.
Subject to the provisions of the Plan, the Board of Directors shall have
plenary authority to interpret the Plan and to prescribe, amend and rescind
rules and regulations relating to it. The interpretation and construction
by the Board of Directors of any provision of the Plan or any option granted
under it shall be final and conclusive. No member of the Board of Directors
shall be liable for any action or determination made in good faith with
respect to the Plan or any option granted under it.
The Board may in its discretion designate or appoint a committee to
administer the Plan and shall have the right to remove members from, or add
members to, the Committee. Vacancies on the Committee, howsoever caused,
shall be filled by the Board of Directors. Such Committee shall select one
of its members as Chairman and shall hold meetings at such times and places as
it may determine. Acts by a majority of the members of the Committee at a
meeting at which a quorum is present, or acts reduced to or approved in
writing by all of the members of the Committee, shall be the valid acts of
the Committee. Subject to the provisions of the Plan, such
Committee's authority shall be limited to those powers granted to it by the
Board. Any function referenced herein as to be performed by the Committee
shall mean the Board if a Committee has not been designated.
3. SHARES SUBJECT TO PLAN
Shares of the Company's Class A Common Stock, par value $.01 per share
("Common Stock"), will be subject to options granted under the Plan. Shares
deliverable under the Plan will be shares of the Company's authorized but
unissued Common Stock. Shares deliverable upon exercise of options granted
under the Plan will be issued or transferred on the date that payment
in full for such option shares is made. The aggregate number of shares that
may be purchased upon the exercise of options granted under the Plan shall
not exceed 100,000 shares of Common Stock, subject to adjustment as provided
in Section 5(g). In the event that any outstanding option under the Plan for
any reason expires or is terminated, the shares of Common Stock allocable to
the unexercised portion of such option may again be subject to an option
under the Plan.
4. ELIGIBILITY
Each Eligible Director shall receive options in accordance with the
provisions of Section 5. An Eligible Director is defined as a director who
at the time of the grant is not an employee of the Company or its subsidiaries.
5. TERMS AND CONDITIONS OF OPTIONS
Stock options granted under the Plan shall be evidenced by agreements in
such form as the Board of Directors may from time to time approve, which
agreements shall comply with and be subject to the following terms and
conditions:
(a) Date of Grant; Number of Shares
Each Eligible Director shall be granted an option to purchase 2,000
shares of Common Stock on the fifth business day after each Annual Meeting of
Shareholders of the Company during the term of the Plan, beginning with the
Annual Meeting of Shareholders to be held in May, 1996 (the "1996 Annual
Meeting"); provided, however, that such options shall not be granted unless
the Plan is approved at the 1996 Annual Meeting by the affirmative vote of
the holders of a majority of the outstanding Common Stock.
(b) Option Price
Each option shall state the option price, which shall be l00% of the
fair market value of the Common Stock on the date the option is granted. Fair
market value means, as of a given date, the closing sales price per share of
the Company's Common Stock, as reported on the national securities exchange
on which the Common Stock is principally traded on the day preceding the day
(or the most recent trading day preceding the day) on which the stock is to
be valued. For purposes of this section, the term "national securities
exchange" shall include the National Association of Securities Dealers Automated
Quotation System. If at the time the determination of fair market value is made
the Common Stock is not admitted to trading on a national securities exchange
for which sales prices are regularly reported, fair market value shall be
determined by the Board on the basis of such factors as it deems appropriate.
(c) Exercise of Options
Subject to and except as provided in the other provisions of this
Section 5, each option shall be exercisable in whole or in part at any time
from the date of grant until the date that is ten years from the date the
option is granted. The right to exercise shall be cumulative. No option
may be exercised for a fraction of a share.
Options granted under the Plan may be exercised by the optionee's
delivery to the General Counsel of the Company of written notice of exercise,
which notice shall specify the number of shares to be purchased. The date of
actual receipt by the Company of such notice and of full payment for the
shares shall be deemed the date of exercise of the option.
If the optionee makes full payment for option shares in cash or by
check, such full payment shall accompany the notice of exercise of the
option. If the optionee makes payment for option shares, in whole or in
part, by delivery of Common Stock, as provided in Section 5(d), the optionee
shall deliver with the notice of exercise the duly endorsed
certificates evidencing such delivered shares. If any portion of the
payment for option shares is made in Common Stock, those shares shall be
valued at their fair market value as of the date of delivery and determined
as set forth in Section 5(b). No optionee shall be entitled to issuance of
a certificate evidencing option shares until payment in full for
such shares has been made as provided in this Section 5(c).
(d) Medium of Payment
The option price may be paid in cash or by check or, in whole or in
part, by delivery to the Company of duly endorsed certificates evidencing
shares of Common Stock.
(e) Transferability
Options granted under the Plan shall not be transferable by the
optionee otherwise than by will or under the laws of descent and
distribution. During the optionee's lifetime, his options shall be
exercisable only by him.
(f) Termination of Optionee as Director; Death of Optionee
Subject to the provisions of this Section 5(f) with respect to an
optionee's death, options granted under the Plan may be exercised only
while the optionee is a director of the Company, except that the optionee
may exercise his options prior to their expiration, in whole or in part, for
a period of three months after he ceases to be a director. Except
as so exercised, such options shall expire at the end of such three-month
period.
In the event of the death of an optionee while a director of the
Company and before the date of expiration of his option, his personal
representatives, or any person or persons who shall have acquired his
options by bequest or inheritance from the optionee, shall have
the right to exercise the optionee's option prior to its expiration, in
whole or in part, for a period of one year from and after the optionee's
death. Except as so exercised, such options shall expire at the end of such
one-year period.
(g) Merger, Consolidation or Sale of Assets; Recapitalization
In the event of a consolidation or a merger in which the Company is
not the surviving corporation, or any other merger in which the shareholders
of the Company exchange their stock for stock of another corporation, or in
the event of complete liquidation of the Company, or in the case of a tender
offer for 50% or more of the combined voting power of the Company's
outstanding securities, then: (i) if the consideration to be received for
Common Stock in any such transaction is cash, the Optionee shall be entitled
to receive from the Company at the time the transaction is consummated cash
in an amount equal to the difference between the exercise price of the
aggregate number of shares then subject to the option and not yet purchased
by the Optionee and the price of such number of shares of Common Stock of the
Company in the consolidation, merger, liquidation, or tender offer (such
difference to be determined by the Board of Directors as of the effective
date of the transaction); or (ii) if the consideration to be received for
Common Stock in any such transaction is other than cash, the Optionee shall
be entitled to receive a replacement option on the same terms and
conditions as the option except that there shall be substituted for the
Common Stock the consideration that would have been received by the Optionee
as a result of such transaction had the option been exercised immediately
prior to the consummation of such transaction.
If the shares of Common Stock of the Company are increased, decreased,
changed into or exchanged for a different number or kind of shares or securities
through a consolidation, merger, other reorganization, recapitalization,
reclassification, stock dividend, stock split or reverse stock split in
which the Company is the surviving corporation, an appropriate and
proportionate adjustment shall be made in the maximum number and kind of
shares as to which options may be granted under this Plan. A
corresponding adjustment changing the number or kind of shares allocated
to unexercised options, or portions thereof, which shall have been granted
prior to any such change shall likewise be made. Any such adjustment in
outstanding options shall be made without change in the aggregate purchase
price applicable to the unexercised portion of any such
option, but with a corresponding adjustment in the price for each share
or other unit of any security covered by the option. In making any
adjustment pursuant to this paragraph, any fractional shares shall be
disregarded.
The grant of an option under the Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure.
(h) Rights as a Shareholder
An optionee or a permitted transferee of an option shall have no
rights as a shareholder with respect to any shares issuable or deliverable
pursuant to this Plan until the date of the issuance of a stock certificate
to him for such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date
is prior to the date such stock certificate is issued, except as provided
in Section 5(g) above.
(i) Compliance with Securities Laws
The options granted under the Plan and the shares issuable pursuant
to the Plan may, at the option of the Company, be registered under applicable
federal and state securities laws, but the Company shall have no obligation
to undertake such registrations and may, in lieu thereof, issue options and
shares hereunder only pursuant to applicable exemptions from such
registrations. In the event that no such registrations are undertaken,
options will be granted only to persons who qualify to receive such options,
and the underlying shares upon exercise thereof, in accordance with the
exemptions from registration on which the Company relies. In connection
with the granting of any option or the issuance of any shares, the Board of
Directors may require appropriate representations from the optionee and
take such other action as the Board of Directors deems necessary to assure
compliance with such exemptions from registration, including
but not limited to placing restrictive legends on certificates evidencing
such shares.
Notwithstanding any other provision of the Plan, no shares will be issued
pursuant to this Plan unless said shares have been registered under all
applicable federal and state securities laws or unless, in the opinion of
counsel satisfactory to the Company, exemptions from such registrations are
available.
(j) Compliance with Section 16(b)
It is the intent of the Company that the Plan and any option granted
hereunder satisfy and be interpreted in a manner that satisfies the applicable
requirements of Rule 16b-3 of the Securities Exchange Commission promulgated
pursuant to Section 16(b) of the Securities Exchange Act of 1934, so that
optionees will be entitled to the benefits of Rule 16b-3 or other exemptive
rules under Section 16 and will not be subjected to liability thereunder.
Accordingly, any options granted under the Plan shall be subject to the
conditions that any Common Stock acquired pursuant to the Plan must be held
at least six months from the date the option is granted. If any provision
of the Plan or any option would otherwise conflict with the intent expressed
herein, that provision, to the extent possible, shall be interpreted and
deemed amended so as to avoid such conflict. To the extent of any remaining
irreconcilable conflict with such intent, such provision shall be
deemed void.
(k) Other Provisions
The option agreements authorized under the Plan shall contain such
other provisions not inconsistent with the Plan as the Board of Directors
ay in its discretion deem advisable from time to time, including, without
limitation, conditions precedent to the exercise of the option covered by
any agreement.
6. EFFECTIVE DATE AND TERM OF PLAN
No option shall be granted pursuant to the Plan on or after the tenth
anniversary of the date of the adoption of the Plan by the Board of
Directors. The Plan shall become effective on the date it is approved by
the Board of Directors; provided, however, that the Plan shall immediately
terminate and no options shall be granted hereunder unless the Plan is also
approved at the Annual Meeting of Shareholders to be held in May, 1996 by a
majority of the outstanding shares of Common Stock.
7. TERMINATION, AMENDMENT OF PLAN
The Board may at any time terminate, amend or revise the terms of the Plan;
provided that no amendment or revision shall, without the approval of the
Company's shareholders, (i) increase the maximum aggregate number of shares
that may be sold or distributed pursuant to options granted under this Plan,
except as permitted under Section 5(g); (ii) change the minimum purchase
price for shares of stock that may be received by exercise of options under
the Plan; (iii) increase the maximum duration established under the Plan for
any option; (iv) permit the granting of an option to anyone other than as
specified in Section 5; and provided further that, to the extent
prohibited by Rule 16b-3 promulgated by the Securities and Exchange
Commission under the Securities Act of 1934, no amendment or revision
shall be made more than once every six months, other than to comply with
the Internal Revenue Code or rules thereunder, to the provisions of the
Plan relating to amount, price and timing of options under the Plan. No
amendment, revision or termination of the Plan shall, without the consent
of the optionee, in any manner adversely affect any options theretofore
granted under the Plan.
8. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock
pursuant to options granted under the Plan will be used for general
corporate purposes.
9. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the optionee to
exercise such option.
10. WITHHOLDING FOR TAXES
No optionee shall be entitled to issuance of a stock certificate
evidencing shares purchased by him upon exercise of an option until he
has paid, or made arrangements for payment, to the Company of an amount
equal to the income and other taxes (if any) that the Company is required
to withhold from the optionee as a result of his exercise of the option.
