TELEPHONE & DATA SYSTEMS INC /DE/
424B3, 2000-11-29
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
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                                                 Registration Number 033-8857-99
                                                     Filed Pursuant to 424(b)(3)


PROSPECTUS


                        TELEPHONE AND DATA SYSTEMS, INC.
                              SERIES A COMMON SHARE
                      AUTOMATIC DIVIDEND REINVESTMENT PLAN
                             Series A Common Shares
                                ($0.01 Par Value)


         The Series A Common Share  Automatic  Dividend  Reinvestment  Plan,  as
amended,  which we refer to in this  Prospectus  as the "Plan" is  sponsored  by
Telephone and Data Systems,  Inc., "TDS", a Delaware  corporation and relates to
its  Series A Common  Shares, par  value  $.01  per  share.  The  Plan  provides
eligible holders, as defined in the Plan, of TDS's Series A Common Shares with a
systematic, economic and convenient method of investing cash dividends from such
shares in newly issued Series A Common Shares  without  payment of any brokerage
commission  or  service  charge  and at a 5%  discount  from  market  value,  as
determined  below.  This  Prospectus  relates to 337,500  Series A Common Shares
covered by the Registration Statement of which this Prospectus is a part.

          As a Participant in the Plan you may:

               1.  have cash  dividends  on all of your  Series A Common  Shares
          automatically reinvested, or

               2.  have cash  dividends on less than all of your Series A Common
          Shares   automatically   invested  while  continuing  to  receive  the
          remainder of your cash dividends.

         The price for the  Series A Common  Shares  purchased  with  reinvested
dividends  will be 95% of the average  daily high and low sales prices for TDS's
Common  Shares on the American  Stock  Exchange,  as reported in The Wall Street
Journal,  for a period of ten consecutive trading days ending on the trading day
immediately  preceding  the day on which the  purchase is made.  The  investment
dates for reinvested dividends will be the dividend payment dates.


                             ---------------------------


         Neither the Securities and Exchange Commission nor any state securities
commission has approved or  disapproved  of these  securities or has passed upon
the accuracy or adequacy of this Prospectus.  Any representation to the contrary
is a criminal offense.


                             ---------------------------


                 The date of this Prospectus is November 29, 2000





<PAGE>

                                TABLE OF CONTENTS


                                                                            Page

         Summary of the Plan............................................       3
         Telephone and Data Systems, Inc................................       4
         Use of Proceeds................................................       4
         Series A Common Share Automatic Dividend Reinvestment Plan.....       4
         Purpose........................................................       4
         Advantages.....................................................       4
         Administration.................................................       4
         Participation..................................................       5
         Costs..........................................................       6
         Purchases......................................................       7
         Reports to Participants........................................       7
         Dividends......................................................       8
         Certificates for Shares........................................       8
         Safekeeping of Shares..........................................       9
         Withdrawal.....................................................       9
         Other Information..............................................       9
         Termination by TDS.............................................      12
         Legal Matters..................................................      12
         Experts........................................................      12
         Where You Can Find More Information............................      12


Private  Securities  Litigation  Reform  Act  of  1995  Safe  Harbor  Cautionary
Statement

This  Prospectus  and the documents  incorporated  by reference  herein  contain
statements  that  are  not  based  on  historical  fact,   including  the  words
"believes,"  "anticipates,"  "intends,"  "expects,"  and  similar  words.  These
statements  constitute  "forward-looking"  statements  within the meaning of the
Private  Securities   Litigation  Reform  Act  of  1995.  Such   forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may  cause  the  actual  results,  events or  developments  to be  significantly
different from any future results,  events or developments  expressed or implied
by such forward-looking statements. Such factors include:

*        general  economic and business  conditions,  both nationally and in the
         regions in which TDS operates,

*        technology changes,

*        competition,

*        changes in the telecommunications regulatory environment,

*        pending and future litigation,

*        acquisitions/divestitures of properties and or licenses,

*        changes in customer  growth  rates,  penetration  rates,  churn  rates,
         roaming  rates and the mix of  products  and  services  offered  in our
         markets, and

*        other factors described or incorporated in this Prospectus.


Investors  are  encouraged to consider  these and other risks and  uncertainties
that are discussed in documents  filed by TDS with the  Securities  and Exchange
Commission.

                                       2
<PAGE>

                               SUMMARY OF THE PLAN


*        PARTICIPATION:  TDS  record  shareholders  who own at least  one  whole
         Series A Common  Share  can  participate  in the Plan by  submitting  a
         completed  Authorization Form. You may obtain  Authorization Forms from
         TDS Investor Relations at (312) 630-1900.  If your shares are held in a
         brokerage  account,  you may participate by having your broker register
         the Series A Common Shares in the Plan.  No action is  required if  you
         are already participating in the Plan.

*        REINVESTMENT OF DIVIDENDS:  You can reinvest your cash dividends on all
         or a portion of your  Series A Common  Shares  toward the  purchase  of
         additional Series A Common shares of TDS stock without paying fees.

*        PRICE FOR SHARES:  The price for the Series A Common  Shares  purchased
         with reinvested dividends will be 95% of the average daily high and low
         sales prices for TDS's Common Shares on the American Stock Exchange, as
         reported in The Wall Street  Journal,  for a period of ten  consecutive
         trading days ending on the trading day immediately preceding the day on
         which the purchase is made.

*        INVESTMENT DATES: The Investment Dates for reinvested dividends will be
         the dividend payment dates.

*        SAFEKEEPING  OF  CERTIFICATES:  You  can  transfer  to  the  Agent  for
         safekeeping  your TDS  stock  certificates  representing  the  Series A
         Common Shares on which you are having  dividends  reinvested  under the
         Plan. There is no charge for this service. A certificate for any number
         of whole  shares  credited to an account  will be sent to you,  free of
         charge, upon written request.

*        WITHDRAWAL FROM THE PLAN: You may withdraw from the Plan at any time by
         notifying the Agent in writing.  A  certificate  for the whole Series A
         Common Shares  credited to your account,  along with a cash payment for
         any  fractional  share,  will be issued to you.  Dividends  paid  after
         withdrawal  from the Plan will be paid in cash directly to you,  unless
         you elect to rejoin the Plan by submitting a new Authorization Form.

*        TRACKING  YOUR  INVESTMENT:  You will  receive a statement of your Plan
         account with respect to each month in which a transaction  takes place.
         These  statements  provide  details of the  transactions  and the share
         balance in your program account.






                                        3

<PAGE>



                        TELEPHONE AND DATA SYSTEMS, INC.

         TDS is a diversified  telecommunications  service company that provides
high-quality  telecommunications  services to more than three  million  wireless
telephone and wireline telephone customers.  TDS's business development strategy
is to expand its existing operations through internal growth and acquisitions.


                                 USE OF PROCEEDS

         The number of Series A Common  Shares  that will be sold under the Plan
and the prices at which such shares will be sold cannot now be  determined.  The
net  proceeds  from  the  sale of such  shares  will be used by TDS for  general
corporate  purposes of TDS. Until the proceeds are used for these purposes,  TDS
may deposit them in interest-bearing  accounts or invest them in certificates of
deposit, United States Government securities or prime commercial paper.


           SERIES A COMMON SHARE AUTOMATIC DIVIDEND REINVESTMENT PLAN

         The following is a question and answer  statement of the  provisions of
TDS's Series A Common Share Automatic Dividend Reinvestment Plan, which we refer
to as the "Plan". Questions and Answers 1 through 31 both explain and constitute
the Plan.


                                     PURPOSE

1.       What Is The Purpose Of The Plan?

         The purpose of the Plan is to provide eligible  holders,  as defined in
the Answer to Question  4, of TDS's  Series A Common  Shares with a  systematic,
economic and  convenient  method of investing cash dividends from such shares in
newly  issued  Series A Common  Shares of TDS without  payment of any  brokerage
commission  or service  charge,  and at a 5%  discount  from  market  value,  as
determined below.  Since the additional Series A Common Shares will be purchased
directly from TDS, the Plan will provide TDS with additional capital funds.


                                   ADVANTAGES

2.       What Are The Advantages Of The Plan?

         You may purchase  Series A Common Shares of TDS with cash  dividends on
all or less than all of TDS's Series A Common  Shares  registered  in your name.
The price of Series A Common Shares purchased with cash dividends will be 95% of
market value as set forth in the Answer to Question 13.

         No commission or service charge is paid by  participants  in connection
with purchases  under the Plan.  Full  investment of funds is possible under the
Plan because the Plan permits fractions of shares, as well as full shares, to be
credited to participants'  accounts.  In addition,  dividends in respect of such
fractions,  as  well  as  in  respect  of  full  shares,  will  be  credited  to
participants'  accounts and reinvested in TDS's Series A Common Shares under the
Plan.  The  safekeeping  of Series A Common Shares  credited to a  participant's
account is assured  since  certificates  for such  shares are not issued  unless
requested  by the  participant.  Regular  statements  of  account  will  provide
simplified record keeping.


                                 ADMINISTRATION

3.       Who Administers The Plan?

         Computershare  Investor  Services acts as an Agent for  participants in
the Plan.  The Agent keeps a continuing  record of each  participant's  account,
sends periodic  statements of account to each  participant  with respect to each
month in which a transaction  takes place and performs other duties  relating to
the  Plan.  Series A Common  Shares  of TDS  purchased  under  the Plan  will be
registered  in the  name  of the  Agent  or  its  nominee,  as  Agent  for  each
participant  in the Plan, and will be credited to the accounts of the respective
participants.  Should the Agent  resign,  another bank will be asked to serve as
the Agent.  All  communications  regarding  the Plan should be sent to the Agent
addressed as follows:


                                       4
<PAGE>
                  Telephone and Data Systems, Inc.
                  Series A Common Share Automatic Dividend Reinvestment Plan
                  c/o Computershare Investor Services
                  P.O. Box A3309
                  Chicago, Illinois 60690-3309
                  Telephone: 877/337-1575

         Agent also acts as dividend  disbursing  and  transfer  agent for TDS's
Series A Common Shares.


                                  PARTICIPATION

4.       Who Is Eligible To Participate?

         Holders  of  record of at least  one  whole  Series A Common  Share are
eligible to participate in the Plan. Beneficial owners of Series A Common Shares
which  currently are  registered in names other than their own, for example,  in
the name of a broker or bank nominee,  who wish to  participate in the Plan must
either make  appropriate  arrangements for their nominee to do so or must become
security owners of record of Series A Common Shares.

         All holders of record of at least one whole  Series A Common  Share are
eligible to  participate  in the Plan,  unless  they are  citizens of a state or
foreign  jurisdiction  in  which  it would  be  unlawful  for TDS to allow  such
participation.  TDS is not aware of any  jurisdiction in which the making of the
offer is not in compliance  with valid  applicable  law. If TDS becomes aware of
any  jurisdiction  in which the making of the offer  would not be in  compliance
with valid  applicable law, TDS will make a good faith effort to comply with any
such law. If, after such good faith effort, TDS cannot comply with any such law,
the  offer  will  not be  made  to  holders  of  shares  residing  in  any  such
jurisdiction.  In those  jurisdictions whose securities or blue sky laws require
the offer to be made by a  licensed  broker or  dealer,  the offer  shall not be
deemed to be made  unless it is made on behalf of TDS by one or more  registered
brokers or dealers which are licensed  under the laws of such  jurisdiction,  as
may be designated by TDS.


5.       How Does A Series A Common Shareholder Participate?

         A holder  of  Series A Common  Shares  may join the Plan at any time by
signing an "Authorization  Form" and returning it to the Agent. An Authorization
Form and postage paid envelope may be obtained by written  request  addressed to
the Agent at the above address or by writing or calling TDS as follows:

                  Telephone and Data Systems, Inc.
                  Series A Common Shares Automatic Dividend Reinvestment Plan
                  30 North LaSalle Street, Ste. 4000, Chicago, IL  60602
                  Attn: Investor Relations Coordinator - telephone: 312/630-1900


6.       When Does A Series A Common Shareholder's Participation Start?

Series A Common Shareholders

         If an Authorization  Form directing  dividend  reinvestment is received
from a Series A Common  Shareholder  by the Agent on or before the last business
day of the month  preceding  the next  dividend  payment,  that dividend will be
applied  to the  purchase  of Series A Common  Shares  under  the  Plan.  If the
Authorization Form directing dividend  reinvestment is received after that date,
dividend  reinvestment  will  begin  with  the  next  succeeding  payment.  Cash
dividends  on the Series A Common  Shares are  ordinarily  paid in March,  June,
September and December.

         For  example,  if TDS's Board of Directors  establishes  June 30 as the
payment  date  for a  Series  A Common  Share  cash  dividend,  then in order to
reinvest the  dividends  payable on June 30 in new Series A Common  Shares under
the Plan, a Series A Common Shareholder's Authorization Form must be received by
the Agent no later than the last business day in May. If the Authorization  Form
is received after the last business day in May, the dividends payable on June 30
will be paid in cash and the Common Shareholder's participation in the Plan will
commence with the next Series A Common Share cash dividend payment date.



                                       5
<PAGE>

7.       If I am Currently Enrolled in the Plan,  Do I Need To Take Any  Action,
         Or Will My Participation In The Plan Continue?

         A Series A Common  Shareholder enrolled in the plan will continue to be
enrolled in the Plan in  accordance  with the  participation  option  previously
chosen under the Plan,  provided he or she is a holder of record of at least one
whole Series A Common Share.

         If an eligible shareholder currently enrolled in the Plan does not wish
to  participate  in the Plan,  he or she  should  withdraw  from the Plan in the
manner  described in the Answers to Questions 20 and 21. If a holder of Series A
Common Shares wishes to change the nature of his or her participation, he or she
should return an Authorization Form as described herein. If a holder of Series A
Common  Shares  enrolled  in the Plan does not wish to  withdraw  or change  the
nature of his or her participation,  he or she will be continued in the Plan and
the cash  dividends  on those  Series A Common  Shares  owned of  record by that
shareholder  and  designated  for  reinvestment  under  the Plan will be used to
purchase Series A Common Shares under the Plan at the 5% discount.


8.       What Does The Authorization Form Provide?

         The Authorization Form provides for the purchase of new Series A Common
Shares through the following investment options offered under the Plan:

         Full  Reinvestment  - Cash  dividends  Series A Common  Shares  held of
         record by a holder of Series A Common Shares will be invested at 95% of
         market value - see the Answer to Question 13.

         Partial  Reinvestment  - Cash  dividends on less than all of the shares
         held of record by a holder of Series A Common  Shares  will be invested
         at 95% of  market  value  -see  the  Answer  to  Question  13-  and the
         shareholder  will  continue  to  receive  cash  dividends  on the other
         shares.

         Cash dividends on Series A Common Shares credited to the  participant's
account  under  the  Plan,   including   fractional  shares,  are  automatically
reinvested to purchase  additional Series A Common Shares no matter which option
is chosen. The Authorization Form also serves to appoint Computershare  Investor
Services as Agent for the participant.

         If a holder of Series A Common  Shares has more than one stock  account
pursuant to which he or she is eligible to  participate  in the Plan, a separate
Authorization  Form is required for each account that he or she wishes  included
in the Plan.


9.       Is Partial Participation Possible Under The Plan?

         Yes. An eligible  shareholder who desires the dividends on only some of
his or her  full  Series A  Common  Shares  to be  invested  under  the Plan may
indicate such number of shares upon the applicable  Authorization  Form(s) under
"Partial Dividend Reinvestment."


10.      May A  Participant  Change  His Or Her  Method Of  Participation  After
         Enrollment?

         Yes. If a shareholder elects to participate through the reinvestment of
dividends  but later  decides to change the  number  Series A Common  Shares for
which dividends are being reinvested,  a new Authorization  Form may be executed
and returned to the Agent.


                                      COSTS

11.      Are There Any Expenses To  Participants  In Connection  With  Purchases
         Under The Plan?

         No.  Participants  will  incur no costs.  There are no  brokerage  fees
because  Series A Common  Shares are  purchased  directly from TDS. All costs of
administration of the Plan will be paid by TDS.

                                       6
<PAGE>

                                    PURCHASES

12.      When Are The Investment Dates?

         The  Investment  Dates for Series A Common Shares  purchased  under the
Plan with cash dividends on Series A Common Shares are the cash dividend payment
dates.  TDS usually pays cash  dividends on its Series A Common Shares in March,
June, September and December.


13.      How Will The Purchase Price Of Series A Common Shares Be Determined?

         No market  exists for the  Series A Common  Shares.  Therefore,  TDS is
assuming for  purposes  hereof that each Series A Common Share has a fair market
value equal to one of TDS's Common Shares because the Series A Common Shares are
presently  convertible into Common Shares on a one-for-one  basis.  Accordingly,
the price of Series A Common Shares  purchased  with  reinvested  cash dividends
will be 95% of the  average  daily high and low sales  prices  for TDS's  Common
Shares on the American Stock  Exchange,  as reported in The Wall Street Journal,
for a  period  of  ten  consecutive  trading  days  ending  on the  trading  day
immediately  preceding the Investment Date. If there is no trading in the Common
Shares reported on the American Stock Exchange for a substantial  amount of time
during any such trading period, the purchase price per share shall be determined
by TDS on the basis of such market quotations as it shall deem  appropriate.  No
Series A Common  Shares  will be sold by TDS at less  than the par value of such
shares.


14.      How Many Series A Common Shares Will Be Purchased For Participants?

         The number of Series A Common  Shares to be purchased on an  Investment
Date will be determined by the amount of each participant's dividends, including
dividends on Series A Common Shares purchased under the Plan, and the applicable
price of TDS's Common  Shares.  Each  participant's  account in the Plan will be
credited with the number of Series A Common Shares,  including fractional shares
computed to four  decimal  places,  equal to the amount of the  dividends  being
invested divided by 95% of the applicable purchase price.


                             REPORTS TO PARTICIPANTS

15.      What Reports Will Be Sent To Participants In The Plan?

         Each  participant  in the Plan will  receive a statement  of his or her
account with  respect to each month in which a  transaction  takes place.  These
statements  are a  participant's  continuing  record  of the  cost of his or her
purchases.  Participants should retain these statements for income tax purposes.
Each statement will set forth the following information when applicable:

         a.       The total number of Series A Common  Shares  registered in the
name of the participant which is participating in the Plan.

         b.       The total  number of Series A Common  Shares  which  have been
accumulated  under the Plan by the Participant but for which  certificates  have
not been issued - See Answer to Question 17.

         c.       The  following  information  for each  transaction  during the
month and all transactions to date during the current year:

                  1.       the amount of dividends invested;

                  2.       the price per share for each transaction;

                  3.       the number of shares purchased; and

                  4.       certain tax information.

         In addition,  each  participant  will receive copies of  communications
sent to every other holder of TDS's Series A Common Shares, including the Annual
Report to  Shareholders,  Notice of Annual  Meeting  of  Shareholders  and Proxy
Statement, and IRS information on Form 1099 for reporting dividend income.

                                      7
<PAGE>

                                    DIVIDENDS

16.      Will Participants Be Credited With Dividends On Fractions Of Shares?

         Yes.  Participants  will be  credited  with  the  amount  of  dividends
attributable  to fractions of shares in their accounts  under  the Plan and such
dividends will be reinvested.


                             CERTIFICATES FOR SHARES

17.      Will Certificates Be Issued For Series A Common  Shares Purchased Under
         The Plan?

         Normally, certificates for TDS's Series A Common Shares purchased under
the Plan  will not be  issued  to  participants.  The  number of Series A Common
Shares credited to a participant's  account under the Plan will be shown on each
statement  of  account  mailed to the  participant.  This  convenience  protects
against loss, theft, or destruction of stock certificates.

         Certificates for any number of whole Series A Common Shares credited to
an  account  under the Plan  will be  issued  upon the  written  request  of the
participant  to the Agent and issuance of such  certificates  will not terminate
participation  in the Plan.  Any  remaining  full shares and fraction of a share
will continue to be credited to the participant's Plan account.

         Dividends  on Plan  Series  A Common  Shares  for  which a  participant
requests and receives a certificate  will be reinvested in TDS's Series A Common
Shares  at the 5%  discount  under  the  Plan and the  Series  A  Common  Shares
purchased   therewith  will  be  credited  to  the  Participant's  Plan  if  the
participant  continues to own these Series A Common  Shares and has elected full
dividend  reinvestment  of Series A Common Shares on his or her current Series A
Common Share Authorization Form. A participant who continues to own the Series A
Common  Shares in question  and desires to have the  dividends  on these  shares
reinvested  in TDS's  Series A Common  Shares but who does not have an  existing
Authorization  Form for  Series A Common  Shares  or has  elected  only  partial
reinvestment  of his or her  Series  A Common  Share  dividends  on the  current
Authorization  Form will have to execute a new Authorization  Form and return it
to the Agent as set forth in the Answer to Question 10. Otherwise,  dividends on
these  Series A Common  Shares will not be  reinvested  in TDS's Series A Common
Shares at the 5% discount  as they were when they were held for the  participant
in the Plan.  Rather,  the  dividends on the Series A Common  Shares in question
will be paid to the Shareholder in cash.

         Series A Common Shares  credited to the account of a participant  under
the Plan may not be pledged as collateral otherwise  transferred.  A participant
who wishes to pledge or transfer such shares must request that  certificates for
such shares be issued in his or her name.

         Certificates  for fractional  Series A Common Shares will not be issued
under any circumstances.

         An institution that is required by law to maintain physical  possession
of  certificates  may request a special  arrangement  regarding  the issuance of
certificates  for Series A Common Shares  purchased under the Plan. This request
should be sent to the Agent -see Answer to Question 3.


18.      In Whose Name Will Certificates Be Issued?

         Accounts   under  the  Plan  are  maintained  in  the  names  in  which
certificates  of the  participants  were registered at the time they entered the
Plan.  Consequently,  certificates  for whole shares  issued upon the request of
participants will be similarly registered.

                                      8
<PAGE>

                              SAFEKEEPING OF SHARES

19.      May  Participants  Transfer Series A Common Shares Which Are Designated
         For Participation In The Plan To The Agent For Safekeeping?

         Yes.   Participants   may   transfer  to  the  Agent  for   safekeeping
certificates representing Series A Common Shares registered in their name. These
shares will be credited to the participants'  accounts under the Plan along with
shares  purchased for them under the Plan.  There is no charge for this service.
The  stock  certificates  should  be sent  by  registered mail,  return  receipt
requested  and  properly  insured,  to  the  Agent.  Certificates  should not be
endorsed.

         Dividends will be reinvested in shares  represented by the certificates
transferred to the Agent.


                                   WITHDRAWAL

20.      When May A Participant Withdraw From The Plan?

         A  participant  may withdraw from the Plan at any time by notifying the
Agent in writing. If the notice of termination is received by the Agent prior to
the fifth  business day  preceding  the record date for the next Series A Common
Share cash dividend, the amount of that dividend will be paid to the withdrawing
participant.  If the notice of  termination is received by the Agent on or after
the fifth  business day  preceding  the record date for the next Series A Common
Share  cash  dividend,  the next  dividend  will be  reinvested  and  subsequent
dividends will be paid in cash.

         Dividends  paid  after  withdrawal  from the Plan  will be paid in cash
directly to the  shareholder  unless he or she elects to rejoin the Plan,  which
the shareholder may do as set forth in the Answer to Question 22.


21.      What Happens When A Participant  Withdraws From The Plan Or The Plan Is
         Terminated?

         When  a  participant  withdraws  from  the  Plan,  or  ceases  to  be a
shareholder  of  record,  or  ceases  to be an  eligible  shareholder,  or  upon
termination  of the Plan by TDS,  a  certificate  for the whole  Series A Common
Shares  credited to his or her account  under the Plan will be issued and a cash
payment will be made for any fractional  share.  This cash payment will be based
on the closing price of TDS's Common Shares on the American Stock Exchange as of
the date the written  request for  withdrawal  is received,  or the  participant
ceases  to be a  shareholder  of  record,  or the  participant  ceases  to be an
eligible shareholder, or the Plan is terminated,  whichever is applicable, or if
no  trading  occurs on such date,  the next day on which the  Common  Shares are
traded.


                                OTHER INFORMATION

22.      When May A Shareholder Rejoin The Plan?

         Generally,  a shareholder may rejoin the Plan at any time,  provided he
or she is an eligible  shareholder,  by  submitting  a new  Authorization  Form.
However, TDS reserves the right to reject any Authorization Form from a previous
participant  on the  grounds of  repeated  joinings  and  withdrawals  from Plan
participation.  Such reservation is intended to minimize administrative expenses
and to encourage use of the Plan as a long-term investment service.


23.      What  Happens If A  Participant  Sells Or  Transfers  All Of His Or Her
         Series A Common Shares?

         If a  participant  ceases to be a shareholder  of record  holding of at
least one  whole  Series A Common  Share,  a cash  payment  will be made for any
fractional share remaining in the Plan.  Thereafter,  the shareholder may rejoin
the Plan as set forth in the Answer to  Question 22 if he or she is or becomes a
holder of at least one whole Series A Common Share.

                                       9
<PAGE>

24.      What Happens When A Participant Who Is Reinvesting  Dividends On All Or
         Less  Than All Of The  Shares  Registered  In His Or Her Name  Sells Or
         Transfers A Portion Of Such Shares?

         If a participant who is reinvesting  dividends on all or only a portion
of Series A Common Shares registered in his or her name disposes of a portion of
such shares,  TDS will  continue to reinvest  dividends on the  remainder of the
Series A Common  Shares  registered in the  participant's  name up to the number
indicated  on the  participant's  Authorization  Form as the  number of Series A
Common Shares for which dividends are to be reinvested, provided the participant
continues to hold at least one whole Series A Common  Share.  For example,  if a
participant authorized TDS to reinvest dividends on 50 Series A Common Shares of
a total of 100 Series A Common Shares  registered  in his or her name,  and then
disposes of 25 Series A Common Shares,  TDS would continue to reinvest dividends
on 50 of the remaining 75 shares.


25.      Does Participation In The Plan Involve Risk?

         The Plan  itself creates no risk. The risk to  participants is the same
as with any other investment in  TDS's  Series A Common  Shares.  It  should  be
recognized  that since  investment  prices are  determined  as an average of the
daily high and low sales prices for a period of ten consecutive trading dates on
which TDS's Common  Shares are traded,  see Answer to Question 13, a participant
loses any advantage  otherwise available from being able to select the timing of
his or her  investment.  PARTICIPANTS  MUST  RECOGNIZE  THAT NEITHER TDS NOR THE
AGENT CAN  ASSURE A PROFIT OR  PROTECT  AGAINST A LOSS ON THE  SHARES  PURCHASED
UNDER THE PLAN.

         SHAREHOLDERS  ARE  REFERRED  TO THE  RISK  FACTORS  DESCRIBED  IN TDS'S
PROSPECTUS  DATED  SEPTEMBER  26,  2000  WHICH IS A PART OF  TDS'S  REGISTRATION
STATEMENT ON FORM S-4,  REGISTRATION  NO.  033-64293,  WHICH IS  INCORPORATED BY
REFERENCE HEREIN.


26.      What Happens If TDS Issues A Stock Dividend,  Declares A Stock Split Or
         Has A Rights Offering?

         Any Series A Common Shares  distributed  by TDS as a stock  dividend on
shares  credited  to a  participant's  Plan  account,  or upon any split of such
shares,  will be credited to the  participant's  Plan account.  Stock  dividends
distributed  on Series A Common  Shares in shares of any other  class of capital
stock  will be  mailed  directly  to the  shareholder  in the same  manner as to
shareholders not participating in the Plan. However, if a dividend  reinvestment
plan or bookkeeping  entry facility is established  for the shares of such other
capital stock  distributed as a dividend,  the  participant  will  automatically
become a participant of such dividend  reinvestment  plan or  bookkeeping  entry
facility and the shares distributed to such participant will instead be credited
to the participant's account. In a rights offering, a participant's  entitlement
will be based upon his or her total holdings,  including  shares credited to the
participant's account under the Plan. Rights certificates will be issued for the
number of whole  Series A Common  Shares  only,  however,  and rights based on a
fraction of a Series A Common Share held in a participant's Plan account will be
sold for the participant's account and the net proceeds will be forwarded to the
participant.


27.      How Will A Participant's Shares Be Voted At Shareholders' Meetings?

         All Series A Common Shares held in the Plan for a  participant  will be
voted as the  participant  directs on a proxy or voting  instruction  form which
will be furnished to the  participant.  If the  participant  does not return the
proxy or form to the  Agent,  the  Agent  will not vote the  participant's  Plan
shares.


28.      What Are The Federal Income Tax  Consequences Of  Participation  In The
         Plan?

         The  following  discussion  sets forth the general  Federal  income tax
consequences  for  participants  in the Plan.  However,  the  discussion  is not
intended to be an exhaustive  treatment of such tax  consequences.  For example,
the discussion does not address the treatment of stock  dividends,  stock splits
or a rights  offering  to  participants  in the Plan.  It also does not  address
differences  in tax treatment with respect to  participants  who do not hold the
Common Shares as capital assets. Because the tax laws are complex and constantly
changing, participants are urged to consult their own tax advisors regarding the
tax  consequences  of  participating  in the Plan,  including the effects of any
applicable  state,  local or foreign tax laws,  and for rules  regarding the tax
basis in special  cases such as the death of a  participant  or a gift of Common
Shares held under the Plan and for other tax  consequences.  Future  legislative
changes or changes in administrative or judicial interpretation,  some or all of
which may be  retroactive,  could  significantly  alter the  Federal  income tax
treatment discussed herein.

                                       10
<PAGE>

         In  general,  participants  in the Plan  who  elect  to  reinvest  cash
dividends will be treated, for Federal income tax purposes,  as having received,
on the  dividend  payment  date, a  distribution  in an amount equal to the fair
market value on the dividend  payment date of the Common Shares  purchased  with
reinvested dividends, rather than a distribution in the amount of cash otherwise
payable to the participant.  Participants  should not be treated as receiving an
additional   distribution   based   upon  their  pro  rata  share  of  the  Plan
administration  costs paid by TDS;  however,  there can be no assurance that the
IRS will  agree with this  position.  TDS has no  present  plans to seek  formal
advice from the IRS on this issue.

         Generally,  the distribution described above - the fair market value of
the Common  Shares  purchased  with  reinvested  dividends  - will be taxable to
participants  as  ordinary  dividend  income to the  extent of TDS's  current or
accumulated earnings and profits for Federal income tax purposes.  The amount of
the  distribution  in  excess  of  such  earnings  and  profits  will  reduce  a
participant's  tax  basis in the  Common  Shares  with  respect  to  which  such
distribution was received, and, to the extent in excess of such basis, result in
capital  gain.  Certain  corporate  participants  may be entitled to a dividends
received  deduction with respect to amounts treated as ordinary dividend income.
Corporate  participants  should consult their own tax advisors  regarding  their
eligibility for and the extent of such deduction.

         Tax  information  will be shown on the  statements  of account  sent to
participants which participants should retain for tax purposes. These statements
are important for  computing the tax basis of Common Shares  acquired  under the
Plan. The Form 1099 which each  participant  will receive  annually will include
the income which is deemed to result from the receipt of the Common Shares under
the Plan.

         As a general  rule,  the tax basis of shares or any fraction of a share
purchased  with  reinvested  dividends  will equal the fair market value of such
shares or fractional share as reported to participants on their statements.

         A participant  should not be treated as having  received a distribution
from TDS as the result of making an optional  cash payment  under the Plan.  The
tax  basis of  shares or any  fraction  thereof  purchased  with  optional  cash
payments will be the amount of such cash payment.

         The holding period for Common Shares or a fraction  thereof received as
a result of reinvestment  of dividends  under the Plan or through  optional cash
payments will begin on the day following the purchase date.

         Participants  will  generally not realize any taxable  income when they
receive  certificates  for whole Common Shares  credited to their accounts under
the Plan,  either  upon their  request  for  certificates  for  certain of those
shares,  upon  ceasing  to be a  shareholder  of record,  upon  ceasing to be an
eligible  shareholder,  or upon  withdrawal  from or  termination  of the  Plan.
However,  a participant  may realize a gain or loss when Common Shares  acquired
under the Plan are subsequently sold. In addition, participants may realize gain
or loss when they receive a cash  adjustment for fractional  shares  credited to
their  accounts upon  withdrawal  from or termination of the Plan. The amount of
such  gain  or  loss  will  be the  difference  between  the  amount  which  the
participant  receives for his or her shares or fractional  share, and his or her
tax basis therefor (with special rules applying to determine the basis allocable
to shares that are not specifically  identified when the Participant  sells less
than all of his or her shares). Such gain or loss will generally be capital gain
or loss,  and will be long-term  capital gain or loss if the holding  period for
such shares or fractional  shares  exceeds one year. The excess of net long-term
capital gains over net  short-term  capital losses is taxed at a lower rate than
ordinary income for certain taxpayers.  The distinction  between capital gain or
loss and ordinary  income and loss is also relevant for purposes of, among other
things,  limitations on the  deductibility  of capital  losses.  Any loss may be
disallowed  under the "wash sale" rules to the extent the shares disposed of are
replaced,  through the Plan or otherwise  during the 61-day period  beginning 30
days before and ending 30 days after the date of disposition.


29.      What Provision Is Made For  Shareholders,  Foreign And Domestic,  Whose
         Dividends Are Subject To Income Tax Withholding?

         In the case of foreign  shareholders  who elect to have their dividends
reinvested  and  whose  dividends  are  subject  to  United  States  income  tax
withholding,  the Agent will  invest in TDS's  Series A Common  Shares an amount
equal to the  dividends  of such  foreign  participants  less the  amount of tax
required to be withheld.

                                       11
<PAGE>

         Under  certain  circumstances,  TDS may be required to  backup-withhold
income tax on the dividends of participating  domestic  shareholders,  including
those domestic  shareholders who do not accurately report their dividend income,
fail to provide TDS with their taxpayer  identification number, provide TDS with
an  incorrect  taxpayer  identification  number  or fail to  provide  TDS with a
certificate  setting forth that they are not subject to backup  withholding.  If
this should occur, 31% of the dividend  income,  or such other percentage as may
be required from time to time, will be withheld.

         The statements of account sent to participants will indicate the amount
of any income tax withheld.  TDS cannot refund  amounts  withheld.  Participants
subject  to  withholding  should  contact  their  tax  advisors  or the  IRS for
additional information.


30.      What Are The  Responsibilities Of The Shareholders' Agent And TDS Under
         The Plan?

         In  performing  their duties under the Plan,  the Agent and TDS will at
all times act in the best interests of the participants.  However, they will not
be liable for any act performed in good faith, or for any good faith omission to
act,  including,  without  limitation,  any claims of  liability  arising out of
failure to terminate a participant's account upon such participant's death prior
to receipt of notice in writing of such death.

         Although the Plan  contemplates  the continuation of quarterly Series A
Common  Share  dividend  payments,  the payment of future  Series A Common Share
dividends will depend upon future earnings,  the amount available for payment of
dividends by TDS, the financial condition of TDS and other factors.

                               TERMINATION BY TDS

31.      May The Plan Be Changed Or Discontinued?

         TDS reserves the right to suspend,  modify or terminate the Plan at any
time. All participants  will receive notice of such suspension,  modification or
termination.


                                  LEGAL MATTERS

         Certain  legal  matters  relating  to the  securities  offered  by this
Prospectus have been passed upon for TDS by Sidley & Austin, Chicago,  Illinois.
TDS is  controlled  by a voting  trust.  Walter  C.D.  Carlson,  a  trustee  and
beneficiary of the voting trust and a director of TDS and U.S. Cellular, Michael
G. Hron, the General Counsel and an Assistant Secretary of TDS and U.S. Cellular
and the Secretary or Assistant Secretary of certain subsidiaries of TDS, William
S. DeCarlo, an Assistant  Secretary of TDS and certain  subsidiaries of TDS, and
Stephen P. Fitzell, an Assistant  Secretary of certain  subsidiaries of TDS, are
partners of Sidley & Austin.


                                     EXPERTS

         The audited  consolidated  financial  statements  and  schedules of TDS
incorporated  by  reference  in this  Prospectus  have  been  audited  by Arthur
Andersen  LLP,  independent  public  accountants,  as indicated in their reports
incorporated  by  reference  herein.  The  financial  statements  and  schedules
referred to above have been  incorporated  by  reference  in  reliance  upon the
authority  of such firms as experts in  accounting  and  auditing in giving said
reports.


                       WHERE YOU CAN FIND MORE INFORMATION

         TDS files  reports,  proxy  statements and other  information  with the
Securities  and  Exchange  Commission  ("SEC").  You may  inspect  and copy such
reports,  proxy  statements  and  other  information  at  the  public  reference
facilities  maintained  by the SEC at Room  1024,  Judiciary  Plaza,  450  Fifth
Street, N.W., Washington,  D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information. Such materials also may be accessed electronically by means
of the SEC's web site at http://www.sec.gov.

                                       12
<PAGE>

         TDS filed a Registration Statement related to the offering described in
this Prospectus.  As allowed by SEC rules,  this Prospectus does not contain all
of the information  which you can find in the  Registration  Statement.  You are
referred to the  Registration  Statement  and the  Exhibits  thereto for further
information.   This  document  is  qualified  in  its  entirely  by  such  other
information.

         The SEC allows us to "incorporate by reference"  information  into this
Prospectus,  which means that we can disclose  important  information  to you by
referring you to another document filed separately with the SEC. The information
incorporated  by reference is deemed to be part of this  Prospectus,  except for
any information superseded by information in this Prospectus.

         This Prospectus incorporates by reference the documents set forth below
that have been previously filed with the SEC. These documents  contain important
information about TDS's business and finances.

1.       TDS's Annual Report on Form 10-K for the year ended December 31, 1999;

2.       TDS's  Quarterly  Reports on Form 10-Q for the quarters ended March 31,
         June 30, and September 30, 2000;

3.       TDS's  Current  Report on  Form 8-K reporting events on May 4, November
         20, and November 24, 2000; and

4.       TDS's  Report on Form  8-A/A-3  dated May 22,  1998,  which  includes a
         description of TDS's capital stock.

5.       TDS's Prospectus dated September 26, 2000.


         This Prospectus also  incorporates  by reference  additional  documents
that may be filed by TDS with the SEC  between the date of this  Prospectus  and
the date our offering is completed.

         You may  obtain  copies of such  documents  which are  incorporated  by
reference  in  this  Prospectus,  other  than  exhibits  thereto  which  are not
specifically  incorporated by reference herein,  without charge, upon written or
oral request to Investor  Relations,  Telephone  and Data  Systems,  Inc., 30 N.
LaSalle Street,  Suite 4000,  Chicago,  IL 60602,  (312)  630-1900.  In order to
ensure timely  delivery of documents,  any request  therefor  should be made not
later than five business days prior to making an investment decision.

         You should rely only on the information contained in or incorporated by
reference in this Prospectus.  We have not authorized anyone to provide you with
information  that is different  from what is contained in this  Prospectus.  You
should not assume that the  information  contained in the Prospectus is accurate
as of any date other than the date of such  Prospectus,  and neither the mailing
of the Prospectus to shareholders  nor the issuance of any securities  hereunder
shall create any implication to the contrary.  This Prospectus does not offer to
buy or sell any securities in any jurisdiction where it is unlawful to do so.








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