EXECUTION COPY
ANNEX B
VOTING AGREEMENT
VOTING AGREEMENT (the "Agreement"), dated as of October 2,
1998, between the undersigned stockholder ("Stockholder") of
Vanguard Cellular Systems, Inc., a North Carolina corporation
(the "Company"), and AT&T Corp., a New York corporation
("Parent").
WHEREAS, concurrently with the execution and
delivery of this Agreement, the Company and Parent have
entered into an Agreement and Plan of Merger dated as of
October 2, 1998 (the "Merger Agreement"), providing for the
merger of the Company with and into a wholly-owned subsidiary
of Parent (the "Merger") pursuant to the terms and conditions
thereof; and
WHEREAS, as an inducement and a condition to
Parent entering into the Merger Agreement, pursuant to which
Stockholder will receive the consideration provided for in the
Merger Agreement in exchange for each share of Class A Common
Stock, par value $0.01 per share, of the Company (the "Common
Stock") owned by him, Stockholder has agreed to enter into
this Agreement;
NOW, THEREFORE, for good and valuable
consideration, the receipt, sufficiency and adequacy of which
is hereby acknowledged, the parties hereto agree as follows:
1.Representations of Stockholder. Stockholder represents that
such Stockholder:
(a) is the beneficial owner of that number of
shares of Common Stock set forth opposite
such Stockholder's name on Exhibit A (such
Stockholder's "Shares");
(b) except as may be denoted in Exhibit A, does not
beneficially own (as such term is defined in
the Securities Exchange Act of 1934, as
amended (the "1934 Act")) or own of record
any shares of Common Stock other than such
Stockholder's Shares, but excluding any
shares of Common Stock which such
Stockholder has the right to obtain upon the
exercise of stock options outstanding on the
date hereof; and
(c) has the right, power and authority to execute
and deliver this Agreement and to perform
such Stockholder's obligations under this
Agreement, and this Agreement has been duly
executed and delivered by such Stockholder
and constitutes a valid and legally binding
agreement of such Stockholder, enforceable
in accordance with its terms; and such
execution, delivery and performance by such
Stockholder of this Agreement will not (i)
conflict with, require a consent, waiver or
approval under, or result in a breach of or
default under, any of the terms of any
contract, commitment or other obligation
(written or oral) to which such Stockholder
is a party or by which such Stockholder is
bound; (ii) violate any order, writ,
injunction, decree or statute, or any rule
or regulation, applicable to Stockholder or
any of the properties or assets of
Stockholder; or (iii) result in the creation
of, or impose any obligation on such
Stockholder to create,
any Lien (as defined
in the Merger Agreement), charge or other
encumbrance of any nature whatsoever upon
the Shares, other than in favor of Parent.
The representations and warranties contained herein shall be made as
of the date hereof and as of each date from the date hereof through and
including the date that the Merger is consummated or this Agreement is
terminated in accordance with its terms.
2. Agreement to Vote Shares. Stockholder shall be present (in
person or by proxy) at and vote his Shares and any
New Shares (as defined in Section 4 hereof), and
shall cause any holder of record of his Shares or New
Shares to be present and vote, (a) in favor of
adoption and approval of the Merger Agreement and the
Merger (and each other action and transaction
contemplated by the Merger Agreement or by this
Agreement) and (b) against any Acquisition Proposal
(as defined in the Merger Agreement) other than the
Merger (or any other Acquisition Proposal of Parent)
and against any proposed action or transaction that
would prevent or intentionally delay consummation of
the Merger (or other Acquisition Proposal of Parent)
or is otherwise inconsistent therewith at every
meeting of the stockholders of the Company at which
any such matters are considered and at every
adjournment thereof (and, if applicable, in
connection with any request or solicitation of
written consents of stockholders). Any such vote
shall be cast, or consent shall be given, in
accordance with such procedures relating thereto as
shall ensure that it is duly counted for purposes of
determining that a quorum is present and for purposes
of recording the results of such vote or consent.
Stockholder shall deliver to Parent upon request a
proxy substantially in the form attached hereto as
Exhibit B, which proxy shall be coupled with an
interest and irrevocable to the extent permitted
under North Carolina law, with the total number of
such Stockholder's Shares and any New Shares
correctly indicated thereon. Stockholder hereby
revokes any and all previous proxies granted with
respect to his Shares. Stockholder shall also use his
reasonable best efforts to take, or cause to be
taken, all action, and do, or cause to be done, all
things necessary or advisable in order to consummate
and make effective the transactions contemplated by
this Agreement.
3. No Voting Trusts. After the date hereof, Stockholder
agrees that he will not, nor will he permit any
entity under his control to, deposit any Shares in a
voting trust or subject any Shares to any Lien
(except, if any Shares were as of September 25, 1998
in margin accounts, to the extent of the collateral
required by the related loan as noted on Exhibit A
hereto) or agreement, arrangement or understanding
with respect to the voting of such Shares other than
agreements entered into with Parent.
4. Additional Purchases. Stockholder agrees that in the event
(a) of any stock dividend, stock split,
recapitalization, reclassification, combination or
exchange of shares of stock of the Company on, of or
affecting the Shares of such Stockholder, (b) such
Stockholder purchases or otherwise acquires
beneficial ownership of any shares of Common Stock
after the execution of this Agreement (including by
exercise of options), or (c) such Stockholder
acquires the right to vote or share in the voting of
any shares of Common Stock other than the Shares
(collectively, "New Shares"), such Stockholder shall
deliver promptly to Parent upon request an
irrevocable proxy substantially in the form attached
hereto as Exhibit B with respect to such New Shares.
Stockholder also agrees that any New Shares acquired
or purchased by him shall be
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subject to the terms of
this Agreement and shall constitute Shares to the
same extent as if they were owned by such Stockholder
on the date hereof.
5. Option Shares.
(a) Subject to the terms and conditions set forth herein,
Stockholder hereby grants to Parent an irrevocable
option (the "Option") to purchase, in whole or in
part, such Stockholder's Shares and such
Stockholder's New Shares at a purchase price equal to
the Per Share Cash Amount (as defined in the Merger
Agreement) per share; provided, however, that if the
Per Share Cash Amount under the Merger Agreement or
any amendment thereto is ever increased or if Parent
shall otherwise offer to the Stockholders of the
Company an increased consideration for all of their
shares (the "Greater Consideration"), then the
purchase price per share under the Option shall be
increased to equal such new Per Share Cash Amount or
Greater Consideration; and provided further that if
Parent has exercised the Option within 12 months
prior to such increase in the Per Share Cash Amount
or Greater Consideration, then Parent shall pay to
each Stockholder an amount equal to the product of
the number of shares previously purchased from such
Stockholder pursuant to the Option and the amount of
increase between the old Per Share Cash Amount and
the new Per Share Cash Amount or Greater
Consideration, as applicable.
(b) Parent may exercise the Option, in whole or in part, at any
time and from time to time, after the first to occur
of (i) any event as a result of which Parent shall be
entitled to receive a termination fee pursuant to
Section 7.2(e) of the Merger Agreement in the amount
of $52.5 million pursuant to part (1) or part (2) of
such Section or in the amount of $22.5 million
pursuant to part (3) of such Section or (ii) the
breach by any Stockholder of Section 2 of this
Agreement (the first of such events to occur, a
"Purchase Event"); provided, however, that except as
provided in the last sentence of this Section 5(b),
the Option shall terminate and be of no further force
and effect upon the earliest to occur of (A) the
Effective Time (as defined in the Merger Agreement),
(B) 12 months and one day after the occurrence of a
termination of the Merger Agreement in accordance
with Section 7.1 (d), (e), (f) or (g), (C) a
termination of the Merger Agreement in accordance
with Section 7.1(a), (b), (c) or (h) of the Merger
Agreement and (D) 18 months after the Outside Date as
defined in Section 7.1(e) of the Merger Agreement.
Notwithstanding the termination of the Option, Parent
shall be entitled to exercise the Option or receive
the Cash Payment Amount if it has given written
notice of its intent to exercise the Option or
receive the Cash Payment Amount in accordance with
the terms hereof prior to the termination of the
Option and the termination of the Option shall not
affect any rights hereunder which by their terms do
not terminate or expire prior to or as of such
termination.
(c) In the event that Parent wishes to exercise the Option,
it shall send to such Stockholder a written notice
(the date of which being herein referred to as the
"Notice Date") to that effect which notice also
specifies the total number of shares Parent will
purchase pursuant to such exercise, and a date not
earlier than three business days nor later than 15
business days from the Notice Date for the closing of
such purchase (the "Option Closing Date"); provided,
however, that (i) if the closing of the purchase and
sale pursuant to the Option (the "Option Closing")
cannot be consummated by reason of any applicable
judgment, decree, order, law or
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regulation
(including, without limitation, the rules and
regulations of the FCC), the period of time that
otherwise would run pursuant to this sentence shall
run instead from the date on which such restriction
on consummation has expired or been terminated and
(ii) without limiting the foregoing, if prior
notification to or approval of any Governmental
Entity (as defined in the Merger Agreement) is
required in connection with such purchase or any
other transaction contemplated hereby, Parent and
such Stockholder shall promptly file the required
notice or application for approval and shall
cooperate in the expeditious filing of such notice or
application, and, in the case of any prior
notification or approval required in connection with
such purchase, the period of time that otherwise
would run pursuant to this sentence shall run instead
from the date on which, as the case may be, (A) any
required notification period has expired or been
terminated or (B) any required approval has been
obtained, and in either event, any requisite waiting
period has expired or been terminated. The place of
the Option Closing shall be at the offices of
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, and the time of the Option
Closing shall be 10:00 a.m. (Eastern Time) on the
Option Closing Date.
(d) At the Option Closing, Parent (or its designee) shall
pay to each Stockholder an amount equal to the
product of (x) the Per Share Cash Amount or Greater
Consideration, as applicable, and (y) the number of
shares being purchased from such Stockholder pursuant
to the exercise of the Option. Such payment shall be
in immediately available funds by wire transfer to a
bank account designated in writing by such
Stockholder.
(e) At the Option Closing, simultaneously with the delivery
of the amount specified in Section 5(d), each
Stockholder shall deliver to Parent (or its designee)
a certificate or certificates representing its shares
to be purchased at the Option Closing, which shares
shall be free and clear of all Liens, claims, charges
and encumbrances of any kind whatsoever, except for
such encumbrances or proxies in favor of Parent
arising hereunder, and a new Option evidencing the
rights of the Parent (or its designee) to purchase
the balance of such Stockholder's shares purchasable
hereunder.
6. Cash Election.
(a) In lieu of exercising the Option, by notice, Parent may
require such Stockholder to make a cash payment to
Parent in the amount (the "Cash Payment Amount")
equal to the amount by which (A) the Market Price (as
defined below) exceeds (B) the Per Share Cash Amount,
multiplied by the sum of (i) the number of such
Stockholder's Shares and (ii) the number of such
Stockholder's New Shares. Upon receipt of such
notice, the Stockholder shall be permitted to sell a
sufficient number of Shares to pay the Cash Payment
Amount, if Stockholder shall, within five business
days of such notice, sell such Shares, provided that
Stockholder shall use reasonable best efforts to
achieve good execution and shall consult with Parent
with respect to the manner of disposition. The term
"Market Price" shall mean the closing price (as
measured by the last completed trade) for shares of
Common Stock on the date of Parent's election, or if
Stockholder elects to sell Shares to pay the Cash
Payment Amount and has complied with the proviso to
the immediately preceding sentence, the average price
per Share actually realized in such sale.
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(b) Parent may exercise its right to require such Stockholder to
pay the Cash Payment Amount pursuant to this Section
by surrendering for such purpose to such Stockholder,
at the Company's principal office, a copy of this
Agreement, accompanied by a written notice or notices
stating that Parent elects to require such
Stockholder to pay the Cash Payment Amount in
accordance with the provisions of this Section.
Within five (or, in the case of a sale of Shares
under (a) above to fund the Cash Payment Amount,
eight) business days after the surrender of the
Option and the receipt of such notice or notices
relating thereto, such Stockholder shall deliver or
cause to be delivered to Parent the Cash Payment
Amount by wire to the account designated by Parent in
immediately available funds.
(c) If Stockholder at any time after delivery of a notice of
election by Parent to take the Cash Payment Amount
pursuant to this Section is prohibited under
applicable law or regulation from selling Shares in
order to deliver to Parent the Cash Payment Amount in
full, and Stockholder is required to sell Shares to
fund the Cash Payment Amount, then (i) such
Stockholder hereby undertakes to use such
Stockholder's reasonable best efforts, to the extent
within the control of such Stockholder, to obtain all
required regulatory and legal approvals and to file
any required notices, in each case as promptly as
practicable in order to accomplish such sales and
(ii) if Stockholder is unable to effect sales within
four days after the receipt of notice, such
Stockholder shall be permitted to pay the Cash
Payment Amount to Parent in Shares valued at the
Market Price.
7. No Encumbrances.
(a) Except as expressly contemplated by this Agreement,
Stockholder's Shares and the certificates
representing such Shares are now, and at all times
during the term hereof will be, held by such
Stockholder, or by a nominee or custodian for the
benefit of such Stockholder, free and clear of all
liens, claims, security interests, proxies, voting
trusts or agreements, understandings or arrangements
or any other encumbrances whatsoever (other than to
the extent set forth on Schedule 1 to this
Agreement), except for any such encumbrances or
proxies arising hereunder.
(b) Notwithstanding the foregoing:
(i) Stockholder shall be permitted to sell (or pledge to the
Company in support of a loan) such portion of New Shares
(but may not sell any New Shares to the Company or its
Subsidiaries) solely to pay the exercise price of any
employee stock options and tax liabilities in respect of an
exercise of employee stock options; provided that Parent
shall have a right of first refusal to purchase such New
Shares at the lower of $23 per share or the Market Price;
and provided further that, if any such New Shares are sold
or pledged for an amount in excess of $23 per share and the
Option becomes exercisable, such Stockholder shall remit
such excess over $23 per share directly to Parent if Parent
ever exercises the Option; and provided further that any
such New Shares shall be sold (or pledged) subject to the
irrevocable proxy referred to in paragraph 2.
(ii) Any Stockholder which has received a notice of election by
Parent (or its designee) to receive the Cash Payment Amount
shall be permitted, between receipt
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of such notice and the
time on which the Cash Payment Amount is due to be paid, to
sell such number of Shares as may be necessary to satisfy
such obligation, as described in Section 6(a) above.
(iii)In the event that the Merger Agreement is terminated
pursuant to Section 7.1(d) or 7.1(g) (based upon a breach
not due to the willful breach of any representation or
warranty or the willful breach of any covenant by the
Company), any Stockholder shall be permitted to sell up to
20% of such Stockholder's Shares held as of the date hereof
if reasonably necessary to provide liquidity to such
Stockholder if at such time no Acquisition Proposal shall be
pending or could reasonably expected to become pending prior
to expiration of the Option and there shall have been no
willful breach of the Merger Agreement or the Stock Option
Agreement by the Company or this Agreement by such
Stockholder; provided that Parent shall have a right of
first refusal to purchase such Shares at the lower of $23
per share or the Market Price on the date that such
Stockholder notifies Parent of his intention to sell; and
provided further that, if any such Shares are sold or
pledged for an amount in excess of $23 per share and the
Option becomes exercisable, such Stockholder shall remit
such excess over $23 per share directly to Parent if Parent
ever exercises the Option; and provided further that any
such New Shares shall be sold (or pledged) subject to the
irrevocable proxy referred to in paragraph 2.
(c) Any transfer by Stockholder of its Shares to Parent
pursuant to the Option shall pass to and
unconditionally vest in Parent good and valid title
to such Stockholder's Shares and New Shares, free and
clear of all claims, liens, restrictions, security
interests, pledges, limitations and encumbrances
whatsoever.
8. Acquisition Proposals. Stockholder agrees that such
Stockholder (i) shall not, directly or indirectly,
initiate, solicit, encourage or otherwise facilitate
any inquiries or the making of any Acquisition
Proposal and (ii) has terminated any discussions or
negotiations with, and the provision of information
or data to, any Person (other than Parent) respecting
an Acquisition Proposal. Such Stockholder further
agrees that he shall not, directly or indirectly,
provide any confidential information or data to any
Person (as defined in the Merger Agreement) relating
to or in contemplation of an Acquisition Proposal or
engage in any negotiations or discussions relating to
or in contemplation of an Acquisition Proposal. Such
Stockholder will notify Parent immediately if any
inquiries, proposals or offers respecting an
Acquisition Proposal are received by, any such
information or data is requested from, or any such
discussions or negotiations are sought to be
initiated or continued with, such Stockholder
indicating, in connection with such notice, the name
of such Person and the material terms and conditions
of any proposals or offers, and shall keep Parent
apprised with respect to the status and terms
thereof.
9. Appraisal Rights. Stockholder agrees not to exercise any
rights (including, without limitation, under Article
13 of the North Carolina Business Corporation Act) to
demand appraisal of any Common Stock which may arise
with respect to the Merger.
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10. Affiliates Letter. Stockholder shall execute and deliver
on a timely basis an Affiliate Letter (as defined in the
Merger Agreement).
11. Relianceby Parent. Stockholder understands and acknowledges
that Parent is entering into the Merger Agreement in
reliance upon Stockholder's execution and delivery of
this Agreement.
12. Action in Stockholder Capacity Only. Stockholder makes no
agreement or understanding hereunder as a director or
officer of the Company. Stockholder signs this
Agreement solely in his capacity as a beneficial
owner of the Shares, and nothing herein shall limit
or effect any actions taken in Stockholder's capacity
as an officer or director of the Company.
13. Specific Performance. Each party hereto severally
acknowledges that it will be impossible to measure in
money the damage to the other parties if the party
hereto fails to comply with any of the obligations
imposed by this Agreement, that every such obligation
is material and that, in the event of any such
failure, the other parties will not have an adequate
remedy at law or damages. Accordingly, each party
hereto severally agrees that injunctive relief or
other equitable remedy, in addition to remedies at
law or damages, is the appropriate remedy for any
such failure and will not oppose the granting of such
relief on the basis that any other party has an
adequate remedy at law. Each party hereto severally
agrees that it will not seek, and agrees to waive any
requirement for, the securing or posting of a bond in
connection with any other party's seeking or
obtaining such equitable relief.
14. Heirs, Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties
hereto and their respective heirs, successors and
assigns and shall not be assignable without the
written consent of all other parties hereto other
than any assignment in whole or in part by Parent.
15. Entire Agreement. This Agreement supersedes all prior
agreements, written or oral, among the parties hereto
with respect to the subject matter hereof and
contains the entire agreement among the parties with
respect to the subject matter hereof. This Agreement
may not be amended, supplemented or modified, and no
provisions hereof may be modified or waived, except
by an instrument in writing signed by all the parties
hereto. No waiver of any provisions hereof by any
party shall be deemed a waiver of any other
provisions hereof by any such party, nor shall any
such waiver be deemed a continuing waiver of any
provision hereof by such party.
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16. Miscellaneous.
(a)Expenses. Each of the parties hereto shall bear and
pay all costs and expenses incurred by it or
on its behalf in connection with the
negotiation of this Agreement, including
fees and expenses of its own financial
consultants, investment bankers, accountants
and counsel.
(b)Amendment. This Agreement may not be amended,
except by an instrument in writing signed
on behalf of each of the parties.
(c)This Agreement shall be deemed a contract made
under, and for all purposes shall be
construed in accordance with, the internal
laws of the State of New York without regard
to principles of conflicts of law, except
for those provisions relating to the voting
and the proxy which shall be governed by
North Carolina law.
(d)Severability. If any provision of this Agreement or
the application of such provision to any
person or circumstances shall be held
invalid by a court of competent
jurisdiction, the remainder of the provision
held invalid and the application of such
provision to persons or circumstances, other
than the party as to which it is held
invalid, shall not be affected.
(e)Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be
deemed to be an original but all of which
together shall constitute one and the same
instrument.
(f)Termination. This Agreement shall terminate upon
termination of the Option.
(g) Headings. All Section headings herein are for
convenience of reference only and are not
part of this Agreement and no construction
or reference shall be derived therefrom.
(h) Notices.All notices, requests, claims, demands, and
other communications under this Agreement
must be in writing and shall be deemed given
if delivered personally, telecopied (which
is confirmed), or sent by overnight courier
(providing proof of delivery) to the parties
at the following addresses (or at such other
address for a party as shall be specified by
like notice):
(i) if to Parent, to
AT&T Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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with copies to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Silk; and
(ii) if to the Stockholder, to such Stockholder c/o
Vanguard Cellular Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
53rd at Third Avenue, Suite 1000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇.
(i)Further Assurances. In the event of any exercise of
the Option or election to take the Cash
Payment Amount, each of the Company, Parent
and Stockholder shall execute and deliver
all other documents and instruments and take
all other action that may be reasonably
necessary in order to consummate the
transactions contemplated by such exercise.
(j) Stockholder shall cause certificates for the Shares
and New Shares to have typed or printed
thereon a restrictive legend which shall
read substantially as follows (if and to the
extent true and necessary in light of legal
and factual circumstances existing at such
time):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN PROVISIONS AS SET FORTH IN THE VOTING AGREEMENT, DATED
AS OF OCTOBER 2, 1998, A COPY OF WHICH MAY BE OBTAINED FROM
THE SECRETARY OF VANGUARD CELLULAR SYSTEMS, INC. AT ITS
PRINCIPAL EXECUTIVE OFFICES, WHICH CONTAINS RESTRICTIONS ON
THE VOTING AND TRANSFER THEREOF. "
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
AT&T CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Assistant Secretary
Confirmed and accepted as of the date first written above.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EXHIBIT A
STOCKHOLDER
Name Number of Shares of Common Stock Type of Ownership
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,047,931 (1) Beneficial
(1) Includes 140,850 shares in a margin account at ▇▇▇▇▇▇▇ Securities,
Inc., with 0 shares securing a loan of $0 as of the date hereof.
EXHIBIT B
FORM OF PROXY
The undersigned stockholder, for consideration received,
hereby appoints [PARENT DESIGNEES] and each of them as my
proxies, with full power of substitution in each of them, to
cast on behalf of the undersigned all votes entitled to be
cast by the holder of the shares of Class A Common Stock, par
value $0.01 per share, of Vanguard Cellular Systems, Inc., a
North Carolina corporation (the "Company"), owned by the
undersigned at the Special Meeting of Stockholders of the
Company to be held [DATE, TIME AND PLACE] and at any
adjournment thereof (i) "FOR" approval and adoption of the
Agreement and Plan of Merger, dated as of October 2, 1998,
between the Company and AT&T Corp., a New York corporation
("Parent"), providing for the merger (the "Merger") of the
Company with and into a wholly-owned subsidiary of Parent, and
the Merger and (ii) "AGAINST" against any proposal or offer
with respect to a merger, reorganization, share exchange,
consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving, or
any purchase of any substantial portion of the assets of, or
any equity securities of, or any transaction that would
involve the transfer or potential transfer of control of, the
Company other than the Merger and any proposed action or
transaction that would prevent or intentionally delay
consummation of the Merger or is otherwise inconsistent
therewith. This proxy is coupled with an interest and is
irrevocable until such time as the Voting Agreement, dated as
of October 2, 1998, between a certain stockholder of the
Company, the undersigned, and Parent terminates in accordance
with its terms.
Dated _____________________, 1998
--------------------------------
(Signature of Stockholder)