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.