As filed with the Securities and Exchange Commission on August 15, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933
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AMERICAN PORTABLE TELECOM, INC.
(Exact name of registrant as specified in its charter)
Delaware 39-1706857
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
8410 West Bryn Mawr Avenue, Suite 1100
Chicago, Illinois 60631
(Address of Principal Executive Offices) (Zip Code)
American Portable Telecom, Inc.
Employee Stock Purchase Plan
(Full title of the plan)
LeRoy T. Carlson, Jr.
Chairman
American Portable Telecom, Inc.
c/o Telephone and Data Systems, Inc.
30 North LaSalle Street, Suite 4000
Chicago, Illinois 60602
(Name and address of agent for service)
(312) 630-1900
(Telephone number, including
area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
Securities Amount Maximum Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered (1) Per Share Offering Price Fee
- ------------- -------------- -------------- -------------- -------------
Common Shares,
$1.00 par value 200,000 Shares $10.25(2) $2,050,000 $706.90
=============== ============== ============== ============== =============
(1) In addition, this Registration Statement also covers an indeterminate
amount of additional securities which may be issued under the
above-referenced Plan pursuant to the anti-dilution provisions of such
Plan and, if interests in the above-referenced Plan are deemed to
constitute separate securities, pursuant to Rule 416(c) under the
Securities Act of 1933, this registration statement shall also cover an
indeterminate amount of interests to be offered or sold pursuant to the
above-referenced Plan.
(2) Estimated for the Common Shares solely for the purpose of calculating
the registration fee on the basis of the average of the high and low
prices of the Common Shares of the Company on the Nasdaq National
Market on August 12, 1996, pursuant to Rule 457(h)(1) under the
Securities Act of 1933.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registration Information and Employee Plan Annual Information.*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance
with Rule 428 under the Securities Act of 1933, as amended (the "1933
Act") and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have heretofore been filed by American
Portable Telecom, Inc. (the "Company" or the "Registrant"), with the Securities
and Exchange Commission (the "Commission") pursuant to the Securities Act of
1933, as amended (the "1933 Act"), and the Securities Exchange Act of 1934, as
amended (the "1934 Act"), are incorporated by reference herein and shall be
deemed to be a part hereof:
1. The Company's Prospectus dated April 25, 1996, as filed with
the Commission on April 26, 1996, pursuant to Rule 424(b)(4)
under the 1933 Act, which is part of the Company's
Registration Statement on Form S-1, as amended (Registration
No. 333-1514).
2. The description of the Common Shares, par value $1.00 per
share ("Common Shares"), of the Company contained in the
Company's Registration Statement on Form 8-A, as filed with
the Commission on April 19, 1996.
3. The Company's Quarterly Report on Form 10-Q for the quarters
ended March 31 and June 30, 1996.
4. The Company's Current Report on Form 8-K, as filed with the
Commission dated June 4, 1996.
5. All other reports filed by the Company pursuant to Section
13(a) and 15(d) of the 1934 Act since December 31, 1995.
All documents, subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the
filing of a post-effective amendment to this Registration Statement which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and made a part hereof from their
respective dates of filing (such documents, and the documents enumerated above,
being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
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Item 4. Description of Securities.
See Item 3.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters relating to the securities registered hereby will
be addressed by Sidley & Austin, One First National Plaza, Chicago, Illinois
60603. The Company is controlled by Telephone and Data Systems, Inc. ("TDS")
which is controlled by a voting trust. Walter C.D. Carlson, a trustee and
beneficiary of such voting trust and a director of TDS, the Company and certain
other subsidiaries of TDS, Michael G. Hron, the Secretary of TDS, the Company
and certain other subsidiaries of TDS, William S. DeCarlo, the Assistant
Secretary of TDS, the Company and certain other subsidiaries of TDS, Stephen P.
Fitzell, the Secretary of certain subsidiaries of TDS, and Sherry S. Treston,
the Assistant Secretary of certain subsidiaries of TDS, are partners of Sidley &
Austin.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("DGCL") empowers a
Delaware corporation to indemnify any persons who are, or are threatened to be
made, parties to any threatened, pending or completed legal action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of such corporation), by reason of the fact that
such person was an officer or director of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith in a
manner he reasonably believed to be in or not opposed to the corporation's best
interests, and, for criminal proceedings, had no reasonable cause to believe his
conduct was illegal. A Delaware corporation may indemnify officers and directors
in an action by or in the right of the corporation under the same conditions,
except that no indemnification is permitted without judicial approval if the
officer or director is adjudged to be liable to the corporation in the
performance of his duty. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred. Article XI of the Company's Restated
Certificate of Incorporation provides for the indemnification of directors,
officers and employees of the Company within the limitations of Section 145.
In accordance with Section 102(b)(7) of the DGCL, the Company's
Restated Certificate of Incorporation provides that directors shall not be
personally liable for monetary damages for breaches of their fiduciary duty as
directors except for (i) breaches of their duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or knowing violations of law, (iii) certain transactions
under Section 174 of the DGCL (unlawful payment of dividends or unlawful stock
purchases or redemptions) or (iv) transactions from which a director derives an
improper personal benefit. The effect of the provision is to eliminate the
personal liability of directors for monetary damages for actions involving a
breach of their fiduciary duty of care, including any actions involving gross
negligence.
The Company has directors' and officers' liability insurance which
provides, subject to certain policy limits, deductible amounts and exclusions,
coverage for all persons who have been, are or may in the future be, directors
or officers of the Company, against amounts which such persons must pay
resulting from claims against them by reason of their being such directors or
officers during the policy period for certain breaches of duty, omissions or
other acts done or wrongfully attempted or alleged. Such policies provide
coverage to certain situations where the Company cannot directly provide
indemnification under DGCL.
Item 7. Exemption from Registration Claimed.
Not Applicable.
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<PAGE>
Item 8. Exhibits.
The exhibits accompanying this Registration Statement are listed on the
accompanying Exhibit Index. The Plan is not intended to be qualified under
Section 401(a) of the Internal Revenue Code.
Item 9. Undertakings.
The Company hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(a) To include any prospectus required by Section
10(a)(3) of the 1933;
(b) 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 fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high and of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective registration statement;
(c) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
provided, however, that paragraphs 1.(a) and 1.(b) 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 Company pursuant to Section 13
or Section 15(d) of the 1934 Act that are incorporated by
reference in the Registration Statement.
2. That, for the purpose of determining any liability under the
1933 Act, 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 Common Shares being registered hereby
which remain unsold at the termination of the offering.
4. That, for the purposes of determining any liability under the
1933 Act, each filing of the Company's Annual Report pursuant
to Section 13(a) or Section 15(d) of the 1934 Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the 1934 Act) 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 hereof.
5. That, insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Commission such
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indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company 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 Company
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 1933 Act and will be governed by the final adjudication of
such issue.
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<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 Chicago, State of Illinois, on the 15th day of
August, 1996.
AMERICAN PORTABLE TELECOM, INC.
By: /s/ Donald W. Warkentin
-------------------------
Donald W. Warkentin
President
POWER OF ATTORNEY AND SIGNATURES
The undersigned officers and directors of American Portable
Telecom, Inc. hereby severally constitute and appoint LeRoy T. Carlson, Jr. and
Donald W. Warkentin, and each of them, our true and lawful attorneys-in-fact and
agents, with full power of substitution, to sign for us in our names in the
capacities indicated below, all amendments to this registration statement, and
generally to do all things in our names and on our behalf in such capacities to
enable American Portable Telecom, Inc. to comply with the provisions of the
Securities Act of 1933, as amended, and all requirements of the Securities and
Exchange Commission in connection with this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on the 15 day of August, 1996.
/s/ Donald W. Warkentin President and Chief Executive Officer
- ---------------------------- (Principal Executive Officer) and Director
Donald W. Warkentin
/s/ J. Clarke Smith Vice President-Finance and Administration and
- ---------------------------- Chief Financial Officer (Principal Financial
J. Clarke Smith and Accounting Officer), Treasurer and
Director
/s/ LeRoy T. Carlson, Jr. Chairman and Director
- ----------------------------
LeRoy T. Carlson, Jr.
/s/ LeRoy T. Carlson Director
- ----------------------------
LeRoy T. Carlson
/s/ Murray L. Swanson Director
- ----------------------------
Murray L. Swanson
/s/ Rudolph E. Hornacek Director
- ----------------------------
Rudolph E. Hornacek
/s/ James Barr III Director
- ----------------------------
James Barr III
/s/ Walter C.D. Carlson Director
- ----------------------------
Walter C.D. Carlson
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<PAGE>
EXHIBIT INDEX
The following documents are filed herewith or incorporated
herein by reference.
Exhibit
No. Description
4.1 Restated Certificate of Incorporation of the Company, as
amended, is hereby incorporated herein by reference to Exhibit
3(i) to the Company's Registration Statement on Form S-1
(Registration No. 333-1514)
4.2 Bylaws of the Company is hereby incorporated herein by
reference to Exhibit 3(ii) to the Company's Registration
Statement on Form S-1 (Registration No. 333-1514)
5 Opinion of Counsel
23.1 Consent of Independent Public Accountants
23.2 Consent of Counsel (contained in Exhibit 5)
24 Powers of Attorney (included on signature page)
99.1 American Portable Telecom, Inc. Employee Stock Purchase Plan
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EXHIBIT 5
SIDLEY & AUSTIN
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60603
(312) 853-7000
August 15, 1996
American Portable Telecom, Inc.
Suite 1100
8410 West Bryn Mawr Avenue
Chicago, Illinois 60631
Re: American Portable Telecom, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
We are counsel to American Portable Telecom, Inc., a Delaware
corporation (the "Company"), and have represented the Company in connection with
the Registration Statement on Form S-8 (the "Registration Statement") being
filed by the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
issuance and delivery of 200,000 common shares, par value $1.00 per share (the
"Shares"), of the Company pursuant to the American Portable Telecom, Inc.
Employee Stock Purchase Plan (the "Plan").
In rendering this opinion, we have examined and relied upon a
copy of the Plan and the Registration Statement, including the related
Prospectus dated the date hereof. We have also examined and relied upon
originals, or copies of originals certified to our satisfaction, of such
agreements, documents, certificates and other statements of governmental
officials and other instruments, and have examined such questions of law and
have satisfied ourselves as to such matters of fact, as we have considered
relevant and necessary as a basis for this opinion. We have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures, the legal capacity of all natural persons and the conformity
with the original documents of any copies thereof submitted to us for our
examination.
Based on the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing
under the laws of the State of Delaware; and
2. Each Share will be legally issued, fully paid and
nonassessable when (i) the Registration Statement shall have become effective
under the Securities Act; (ii) such Share shall have been duly issued and
delivered in the manner contemplated by the Plan; and (iii) a certificate
representing such Share shall have been duly executed, countersigned and
registered and duly delivered to the person entitled thereto against receipt of
the agreed consideration therefor (not less than the par value thereof) in
accordance with the Plan.
We do not find it necessary for the purposes of this opinion
to cover, and accordingly we express no opinion as to, the application of the
securities or "Blue Sky" laws of the various states to the issuance and delivery
of the Shares.
The Company is controlled by Telephone and Data Systems, Inc.
("TDS"), which is controlled by a voting trust. Walter C.D. Carlson, a trustee
and beneficiary of such voting trust and a director of TDS, the
Company and certain other subsidiaries of TDS, Michael G. Hron, the Secretary of
TDS, the Company and certain other subsidiaries of TDS, William S. DeCarlo, the
Assistant Secretary of TDS, the Company and certain other subsidiaries
<PAGE>
American Portable Telecom
August 15, 1996
Page 2
of TDS, Stephen P. Fitzell, the Secretary of certain subsidiaries of TDS, and
Sherry S. Treston, the Assistant Secretary of certain subsidiaries of TDS, are
partners of this Firm.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to all references to our Firm in or made a
part of the Registration Statement, including the related Prospectus dated the
date hereof.
Very truly yours,
SIDLEY & AUSTIN
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-8 Registration Statement of American
Portable Telecom, Inc. of our report dated February 20, 1996 (except with
respect to Note 2.(i), as to which the date is June 4, 1996), on the
consolidated financial statements of American Portable Telecom, Inc. and
Subsidiaries for the year ended December 31, 1995, included in the American
Portable Telecom, Inc. Current Report on Form 8-K dated June 4, 1996, and to all
references to our Firm included in this Form S-8 Registration Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
August 14, 1996
<PAGE>
AMERICAN PORTABLE TELECOM, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. ESTABLISHMENT; PURPOSE; SCOPE.
American Portable Telecom, Inc. hereby establishes the
American Portable Telecom, Inc. 1996 Employee Stock Purchase Plan to encourage
and facilitate the purchase of Common Shares of the Company by eligible
employees. The Plan is intended to provide a further incentive for eligible
employees to promote the best interests of the Controlled Group and an
additional opportunity to participate in its economic progress. It is the
intention of the Company to have the Plan qualify as an "employee stock purchase
plan" within the meaning of section 423 of the Internal Revenue Code of 1986, as
amended (the "Code"), and provisions of the Plan shall be construed in a manner
consistent with the Code.
SECTION 2. DEFINITIONS; CONSTRUCTION.
As used in this Plan, as of any time of reference, and unless
the context otherwise requires:
(a) "Affiliate" means any trade or business entity which is a
member of the same controlled group (as described in section 414(b) and (c) of
the Code) with Telephone and Data Systems, Inc. ("TDS"), any organization that
is a member of an affiliated service group (as described in section 414(m) of
the Code) with TDS or such a trade or business, or any other entity required to
be aggregated with TDS pursuant to final regulations under section 414(o) of the
Code.
(b) "Benefits Representative" means the Benefits Department of
TDS located in Middleton, Wisconsin, or such other person or persons designated
by the Committee to assist the Committee with the administration of the Plan.
(c) "Board" means the Board of Directors of the Company as
from time to time constituted.
(d) "Common Shares" means the common shares of the Company,
par value $1.00 per share.
(e) "Company" means American Portable Telecom, Inc., a
Delaware corporation, and any successor thereto.
(f) "Compensation" means an employee's "Compensation" as
defined in Section 4.2(a) of the Telephone and Data Systems, Inc. Tax-Deferred
Savings Plan, as amended from time to time, determined without regard to the
limitation on compensation which is taken into account
<PAGE>
under such plan pursuant to section 401(a)(17) of the Code and, if applicable,
the family aggregation rules of section 414(q)(6) of the Code.
(g) "Controlled Group" means the Company and its Subsidiaries.
(h) "Effective Date" means October 1, 1996.
(i) "Employee Stock Purchase Account" means the account
established pursuant to Section 5(c) of the Plan to hold a Participant's payroll
deduction contributions.
(j) "Employer" means the Company and any corporation that is a
member of the Controlled Group that adopts the Plan as of the effective date,
with the prior approval of the Company, and each corporation which subsequently
becomes a member of the Controlled Group and adopts the Plan, with the prior
approval of the Committee.
(k) "Entry Date" means October 1, 1996, and each subsequent
January 1, April 1, July 1 and October 1.
(l) "Participant" means any employee of an Employer who meets
the eligibility requirements of Section 4, and has elected to participate in the
Plan as described in such Section. An individual shall cease to be an
Participant as of the date he terminates employment with all Employers and
Affiliates, for whatever reason.
(m) "Plan" means the American Portable Telecom, Inc. 1996
Employee Stock Purchase Plan herein set forth, and any amendment or supplement
thereto.
(n) "Purchase Date" means March 31, 1997, September 30, 1997,
March 31, 1998 or September 30, 1998, as the case may be.
(o) "Purchase Period" means a semi-annual period ending on a
Purchase Date.
(p) "Purchase Price" means, with respect to a Purchase Date,
85 percent of the closing price of a Common Share on the Nasdaq National
Market on such date, or if such date is not a trading day, 85 percent of the
closing price of a Common Share on the Nasdaq National Market on the next
preceding trading day; provided that if such price includes a fraction of a
cent, the Purchase Price shall be rounded up to the next whole cent.
(q) "Subsidiary" means, with respect to an entity, a
corporation (other than the entity) in an unbroken chain of corporations
beginning with the entity if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
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(r) "Termination Date" means the earliest of (i) September 30,
1998, (ii) such earlier date on which the Board terminates the Plan and (iii)
the Purchase Date on which all shares available for issuance under the Plan
shall have been purchased by Participants under the Plan.
The masculine gender, when appearing in this Plan, shall be deemed to include
the feminine gender unless the context clearly indicates to the contrary. The
words "hereof," "herein," and "hereunder," and other similar compounds of the
word "here," shall mean and refer to the entire Plan and not to any particular
provision or section of this document.
SECTION 3. ADMINISTRATION.
This Plan shall be administered by the 1996 Employee Stock
Purchase Plan Committee (hereinafter referred to as the "Committee"), the
members of which shall be three individuals selected by the Board who do not
satisfy the eligibility requirements of Section 4 hereunder. Pursuant to
resolution approved by the Board, as of the adoption date, the Committee shall
be comprised of LeRoy T. Carlson, Jr., Herbert S. Wander and Donald C.
Nebergall. Subject to the express provisions hereof, the Committee shall have
complete authority to interpret this Plan, to prescribe, amend and rescind rules
and regulations relating to it and to make all other determinations necessary or
advisable for the administration of this Plan. The Committee's determinations on
the matters referred to in this paragraph shall be conclusive. No member of the
Committee shall be personally liable for any decision or determination made in
good faith under the Plan.
SECTION 4. ELIGIBILITY AND PARTICIPATION.
(a) Any employee of an Employer shall be eligible to
participate in the Plan as of the first Entry Date following such employee's
satisfaction of the eligibility service requirement, or, if later, the first
Entry Date following the date on which the employee's Employer adopted the Plan.
For purposes of this subsection, an Employee shall have satisfied the
eligibility service requirement if he has completed at least three months of
continuous service with an Employer. For the sole purpose of calculating length
of service under the Plan, employees shall be credited with service for an
Employer, an Affiliate and any other member of the Controlled Group (even though
such service may have been performed prior to the Company's acquisition of such
member or prior to the time such Affiliate became an Affiliate). No eligibility
provision hereof shall permit or deny participation in the Plan in a manner
contrary to the applicable requirements of the Code and the regulations
promulgated thereunder.
(b) At least 15 days (or such other period as may be
prescribed by the Committee) prior to the first Entry Date as of which an
employee is eligible to participate in the Plan as described in subsection (a)
of this Section, the employee shall execute and deliver to the Benefits
Representative an application on the prescribed form specifying his chosen rate
of payroll deduction contributions described in Section 5. Such application
shall authorize his Employer to
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<PAGE>
reduce the employee's Compensation by the amount of any such payroll deduction
contributions. The application shall also evidence the employee's acceptance of
and agreement to all provisions of this Plan. An employee who fails timely to
file an application described in this subsection shall not be eligible to
commence participation in the Plan as of any subsequent Entry Date.
(c) If a Participant is transferred from one Employer to
another Employer, such transfer shall not terminate the Participant's
participation in the Plan. Such transferred employee may continue to make
payroll deduction contributions under the Plan provided such Participant
completes such forms as the Committee may require, if any, in the time and
manner prescribed by the Committee.
(d) If an individual terminates employment with all Employers
and Affiliates so as to discontinue participation in the Plan, and such
individual is subsequently reemployed by an Employer, such individual shall be
required to satisfy the eligibility service requirement described in subsection
(a) of this Section as if he were a new employee.
(e) Notwithstanding anything herein to the contrary, no
employee shall be entitled to participate in the Plan if such employee,
immediately after the grant of an option would own shares (including shares
which may be purchased under the Plan) possessing five percent or more of the
total combined voting power or value of all classes of stock of the Company, any
of its Subsidiaries, TDS or any of TDS' Subsidiaries actually issued and
outstanding immediately after such grant. For purposes of the foregoing
sentence, the rules of stock attribution set forth in section 424(d) of the Code
shall apply in determining share ownership. In addition, no member of the
Committee shall be eligible to participate in the Plan.
SECTION 5. PARTICIPANT CONTRIBUTIONS.
(a) Each Participant may elect, in the manner described in
Section 4, to make payroll deduction contributions under the Plan in an amount
equal to a whole percentage not less than 1 and not more than 15 percent of such
Participant's Compensation for each payroll period, beginning with the first pay
date which occurs on or after the Entry Date as of which such Participant
commences participation in the Plan.
(b) At least 15 days (or such other period as may be
prescribed by the Committee) prior to any Entry Date, a Participant shall have
the right to elect to decrease his designated rate of payroll deductions under
the Plan by executing and delivering to the Benefits Representative an
application on the prescribed form specifying his chosen rate of payroll
deduction contributions. An election by a Participant to decrease his designated
rate of payroll deductions to 0% of his Compensation shall be deemed an election
to abandon his right to purchase Common Shares under the Plan, as described in
Section 8. A Participant shall not have the right to elect to increase his
designated rate of payroll deductions under the Plan.
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(c) All payroll deductions in the possession of the Company
shall be segregated from the general funds of the Company. The Committee shall
cause to be established a separate Employee Stock Purchase Account on behalf of
each Participant to hold his payroll deduction contributions made under the
Plan. Such accounts shall be solely for accounting purposes, and there shall be
no segregation of assets among the separate accounts. Such accounts shall not be
credited with interest or other investment earnings. Each Employee Stock
Purchase Account shall be restricted to the uses provided herein until such time
as the Company issues certificates to Participants purchasing Common Shares
under the Plan.
SECTION 6. PURCHASE OF COMMON SHARES.
(a) Subject to a Participant's right of abandonment described
in Section 8 of the Plan, the balance of each Participant's Employee Stock
Purchase Account shall be applied on each Purchase Date to purchase the number
of whole Common Shares determined by dividing the balance of such Participant's
Employee Stock Purchase Account as of such date by the Purchase Price. The
Participant's Employee Stock Purchase Account shall be debited accordingly. No
fractional shares shall be issued under the Plan. Any balances remaining in
Participants' accounts attributable to fractional shares shall remain credited
to such accounts so that such remaining balances shall be available to purchase
shares on the next Purchase Date; provided that such amounts shall be refunded
to Participants upon termination of the Plan.
(b) If the employment of an individual who is a Participant in
the Plan is transferred to an Affiliate that is not an Employer, then the
Participant's payroll deductions shall be suspended and the balance of the
Participant's Employee Stock Purchase Account shall be applied to purchase
Common Shares on the Purchase Date next occurring after the effective date of
such transfer, except to the extent the individual abandons his election to
purchase Common Shares as described in Section 8. Upon the Participant's
transfer from such Affiliate back to an Employer, the Participant's payroll
deduction contributions shall resume in accordance with the most recent election
made by the Participant pursuant to Section 5, provided such Participant
completes such forms as the Committee may require, if any, in the time and
manner prescribed by the Committee.
(c) Upon termination of employment because of retirement or
death, the balance of the Participant's Employee Stock Purchase Account, after
crediting such account with payroll deductions for any Compensation due and
owing, shall be applied to purchase Common Shares for the Participant (or, in
the case of the Participant's death, the beneficiary designated by the
Participant in accordance with procedures prescribed by the Committee, or if no
such beneficiary designation is in effect with respect to such Participant, the
Participant's estate) as of the Purchase Date next occurring after the
Participant's death, unless the Participant (or, in the case of the
Participant's death, his designated beneficiary or estate, as the case may be)
elects, in the manner prescribed by the Committee, to abandon all or a portion
of such purchase of Common Shares on or before the earlier of (i) the 15th day
(or such shorter period prescribed by the Committee) prior to the Purchase Date
next occurring after the Participant's death or retirement and (ii) the 90th
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day after the Participant's death or retirement, or such other period as
established by the Committee.
(d) Notwithstanding any provision of this Plan to the
contrary, if the number of shares to be purchased by a Participant on any
Purchase Date is less than ten, the Participant shall not be permitted to
purchase any Common Shares as of such Purchase Date. The balance remaining in
such Participant's Employee Stock Purchase Account shall be treated in the same
manner as account balances attributable to fractional shares, as described in
subsection (a) of this Section.
(e) Notwithstanding any provision of this Plan to the
contrary, a Participant shall in no event be permitted to purchase in any
calendar year more than the number of shares determined by dividing $25,000 by
the closing price of a Common Share on the Nasdaq National Market on the
Effective Date. Any portion of the balance of a Participant's Employee Stock
Purchase Account in excess of the amount necessary to purchase shares on a
Purchase Date in excess of the foregoing limitation shall be treated in the same
manner as account balances attributable to fractional shares, as described in
subsection (a) of this Section. The maximum share limitation prescribed by this
Section shall be subject to adjustment as described in Section 11.
(f) Upon termination of employment with all Employers for any
reason other than as a result of a transfer of employment to an Affiliate as
described in subsection (b) of this Section or retirement or death as described
in subsection (c) of this Section, the Participant's participation in the Plan
shall cease and the entire balance of the Participant's Employee Stock Purchase
Account shall be refunded to him as soon as administratively practicable.
(g) Notwithstanding any provision of the Plan to the contrary,
the maximum number of shares which shall be available for purchase under the
Plan shall be 200,000 Common Shares, subject to adjustment as provided in
Section 11. The Common Shares to be sold under this Plan may, at the election of
the Company, be treasury shares, shares originally issued for such purpose or
shares purchased by the Company. In the event the amount of shares to be
purchased on behalf of all Participants collectively exceeds the shares
available for purchase under the Plan, the number of Common Shares to be
purchased by each Participant under this Section shall be reduced in the manner
prescribed by this subsection, or such other method which the Committee
determines to be equitable, in its sole discretion. The Committee shall
determine the deferral percentage (referred to herein as the "maximum deferral
percentage") permissible for Participants under which the amount of shares to be
purchased on behalf of all Participants collectively equals the shares available
for purchase under the Plan. Such maximum deferral percentage need not be
expressed as a whole percentage. The payroll deduction contributions made by
each Participant whose elected deferral percentage described in Section 5(a) is
higher than such maximum deferral percentage shall be reduced so that each such
Participant's deferral percentage equals such maximum deferral percentage, and
each such Participant's excess payroll deduction contributions shall be refunded
to such Participant as soon as administratively practicable.
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(h) Notwithstanding any provision contained herein to the
contrary, no Participant shall be granted an option to purchase shares under the
Plan that permits the Participant to purchase shares in any calendar year under
the Plan and other employee stock purchase plans (within the meaning of section
423 of the Code) of the Company, its Subsidiaries, TDS and TDS' Subsidiaries
with an aggregate fair market value (determined at the time such option is
granted) in excess of $25,000, all determined in the manner provided by section
423(b)(8) of the Code. Any portion of the balance of a Participant's Employee
Stock Purchase Account that is not applied to purchase Common Shares due to the
application of this subsection shall be treated in the same manner as amounts
attributable to fractional shares, as described in subsection (a) of this
Section.
SECTION 7. ISSUANCE OF CERTIFICATES.
As soon as administratively practicable after each Purchase
Date, the Company shall purchase or issue Common Shares, in its sole discretion,
and each Participant shall be issued a certificate representing the Common
Shares purchased by him under the Plan on such date. Shares to be delivered to a
Participant under the Plan shall be registered in the name of the Participant
or, if the Participant so directs by written notice to the Benefits
Representative prior to the issuance thereof, in the names of the Participant
and one other person as the Participant may designate, as joint tenants with
right of survivorship. Such a joint tenancy designation shall not apply to
shares purchased after a Participant's death by the Participant's beneficiary or
estate, as the case may be.
SECTION 8. PARTICIPANT'S RIGHT TO ABANDON PURCHASE OF SHARES.
At any time during a Purchase Period, but in no event later
than 15 days (or such shorter period prescribed by the Committee) prior to a
Purchase Date, a Participant may elect to abandon his election to purchase
Common Shares under the Plan. Such abandonment election shall be made on forms
prescribed by the Committee and delivered to the Benefits Representative. Upon a
Participant's election to abandon pursuant to this Section, the amount credited
to the Participant's Employee Stock Purchase Plan Account shall be refunded to
the Participant as soon as is administratively practicable, and such
Participant's participation in the Plan shall be terminated.
SECTION 9. SUSPENSION ON ACCOUNT OF EMPLOYEE'S HARDSHIP WITHDRAWAL.
If a Participant makes a hardship withdrawal from the
Telephone and Data Systems, Inc. Tax-Deferred Savings Plan or any other plan
with a cash or deferred arrangement qualified under section 401(k) of the Code
which plan is sponsored, or participated in, by any Employer, such Participant
shall be suspended from making payroll deductions under this Plan for a period
of twelve months from the date of such withdrawal. The balance of such
Participant's Employee Stock Purchase Account shall be applied to purchase
Common Shares on the Purchase Date next
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occurring after the effective date of such withdrawal, except to the extent the
Participant abandons his election to purchase Common Shares as described in
Section 8. After the expiration of such twelve month period, the Participant's
payroll deduction contributions shall automatically resume in accordance with
the most recent election made by the Participant pursuant to Section 5, unless
he has abandoned his election to purchase Common Shares as described in Section
8.
SECTION 10. RIGHTS NOT TRANSFERABLE.
The right to purchase Common Shares under this Plan shall not
be transferable by any Participant other than by will or the laws of descent and
distribution, and must be exercisable, during his lifetime, only by the
Participant.
SECTION 11. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
(a) The existence of the Plan shall not affect in any way the
right or power of the Company or its shareholders to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior preference stock
that affects the Common Shares or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
(b) If, during the term of the Plan, the Company shall effect
(i) a distribution or payment of a dividend on its Common Shares in shares of
the Company, (ii) a subdivision of its outstanding Common Shares by a stock
split or otherwise, (iii) a combination of the outstanding Common Shares into a
smaller number of shares by a reverse stock split or otherwise, or (iv) an
issuance by reclassification or other reorganization of its Common Shares (other
than by merger or consolidation) of any shares of the Company, then each
Participant shall be entitled to receive upon the purchase of shares pursuant to
this Plan such shares of the Company which the Participant would have owned or
would have been entitled to receive after the happening of such event had the
Participant purchased Common Shares pursuant to the Plan immediately prior to
the happening of such event. If any other event shall occur that, in the
judgment of the Board, necessitates adjusting the Offering Price, the number of
Common Shares offered or other terms of the Plan, the Board shall take any
action that in its judgment shall be necessary to preserve each Participant's
rights substantially proportionate to the rights existing prior to such event.
To the extent that any event or action pursuant to this paragraph shall entitle
Participants to purchase additional Common Shares or other shares of the
Company, the shares available under this Plan shall be deemed to include such
additional Common Shares or such other shares of the Company.
(c) In the event of a merger of one or more corporations into
the Company, or a consolidation of the Company and one or more corporations in
which the Company shall be the surviving corporation, each Participant in the
Plan shall, at no additional cost, be entitled, upon
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his payment for all or part of the Common Shares purchasable by him under the
Plan, to receive (subject to any required action by shareholders) in lieu of the
number of Common Shares which he was entitled to purchase, the number and class
of shares of stock or other securities to which such holder would have been
entitled pursuant to the terms of the agreement of merger or consolidation if,
immediately prior to such merger or consolidation, such holder had been the
holder of record of the number of Common Shares equal to the number of shares
paid for by the Participant.
(d) If the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the surviving
corporation, or if the Company sells or otherwise disposes of substantially all
its assets to another corporation during the term of the Plan: (i) subject to
the provisions of clause (ii) below, after the effective date of such merger,
consolidation or sale, as the case may be, each holder of a right to purchase
shall be entitled to receive, upon his payment for all or part of the Common
Shares purchasable by him under the Plan and receive in lieu of Common Shares,
shares of such stock or other securities as the holders of Common Shares
received pursuant to the terms of the merger, consolidation or sale; and (ii)
all outstanding rights to purchase may be cancelled by the Board as of the
effective date of any such merger, consolidation or sale, provided that (i)
notice of such cancellation shall be given to each Participant and (ii) each
such Participant shall have the right to purchase, during a 30-day period
preceding the effective date of such merger, consolidation or sale, all or any
part of the shares allocated to him under the terms of the Plan.
(e) Except as hereinbefore expressly provided, the issue by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, for cash or property, or for labor or services
either upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of Common
Shares then available for purchase under the Plan.
SECTION 12. SHAREHOLDER APPROVAL.
The Plan is subject to the approval of a majority of the votes
cast on the matter by the shareholders of the Company within twelve months
before or after its adoption by the Board.
SECTION 13. RIGHTS OF A SHAREHOLDER.
No Participant shall have rights or privileges of a
shareholder of the Company with respect to shares purchasable under this Plan
unless and until the Participant shall become the holder of record of one or
more Common Shares.
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SECTION 14. NO REPURCHASE OF COMMON SHARES BY COMPANY.
The Company is not obligated to repurchase any Common Shares
acquired under the Plan.
SECTION 15. AMENDMENT OF THE PLAN.
The Board may at any time, and from time to time, amend the
Plan in any respect, except that, without the approval of the shareholders of
the Company, no amendment may be made that changes the number of shares to be
reserved under the Plan (other than as provided in Section 11), or that would
otherwise require shareholder approval.
SECTION 16. TERMINATION OF THE PLAN.
While it is intended that the Plan remain in effect for the
term of the Plan, the Board may terminate the Plan at any time in its
discretion. Upon termination of the Plan, the Committee shall terminate payroll
deductions and shall apply the balance of each Participant's Employee Stock
Purchase Account to purchase Common Shares as described in Section 6 as if such
termination date were a Purchase Date under the Plan. Notwithstanding the
foregoing, upon termination of the Plan, a Participant may elect, in the time
and manner prescribed by the Committee, to abandon his right to purchase all or
a portion of the Common Shares purchasable by him. As soon as administratively
practicable after the termination of the Plan, the Committee shall refund to the
Participant any amount in his Employee Stock Purchase Plan Account which has not
been applied to purchase Common Shares, or, in the case of a Participant who
elects to abandon his right to purchase Common Shares, the entire balance of
such account or the applicable portion thereof.
Notwithstanding any provision in the Plan to the contrary, the
Plan shall automatically terminate as of the Purchase Date on which all shares
available for issuance under the Plan shall have been purchased by Participants
under the Plan.
SECTION 17. COMPLIANCE WITH STATUTES AND REGULATIONS.
The sale and delivery of Common Shares under the Plan shall be
in compliance with relevant statutes and regulations of governmental
authorities, including state securities laws and regulations, and with the
regulations of applicable stock exchanges.
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SECTION 18. GOVERNING LAW.
This Plan and all determinations made hereunder and action
taken pursuant hereto shall be governed by the laws of the State of Delaware and
construed in accordance therewith.
SECTION 19. COMPANY AS AGENT FOR THE EMPLOYERS.
Each Employer, by adopting the Plan, appoints the Company and
the Board as its agents to exercise on its behalf all of the powers and
authorities hereby conferred upon the Company and the Board by the terms of the
Plan, including, but not by way of limitation, the power to amend and terminate
the Plan. The authority of the Company and the Board to act as such agents shall
continue for as long as necessary to carry out the purposes of the Plan.
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