As filed with the Securities and Exchange Commission on November 27, 1996
Registration No. 333-
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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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UNITED STATES CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 62-1147325
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
8410 West Bryn Mawr, Suite 700
Chicago, Illinois 60631
(Address of Principal Executive Offices) (Zip Code)
United States Cellular Corporation
1997 Employee Stock Purchase Plan
(Full title of the plan)
H. Donald Nelson
President
United States Cellular Corporation
8410 West Bryn Mawr, Suite 700
Chicago, Illinois 60631
(Name and address of agent for service)
(773) 399-8900
(Telephone number, including
area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
Proposes Maximum Proposed Amount of
Title of Securities Amount to be Offering Price Maximum Registration
to be Registered Registered Per Share(1) Aggregate Fee
Offering Price
Common Shares,
$ 1.00 par value 130,000 shares(2) $ 28.625 $ 3,721,250 $ 1,128
================== ================== ========= ============ =========
(1) 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 American Stock
Exchange on November 22, 1996.
(2) 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.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant 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
"Securities Act") and the Note to Part I of Form S-8.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have heretofore been filed by
United States Cellular Corporation (the "Company" or the "Registrant"), with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated by
reference herein and shall be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30 and September 30, 1996;
3. The Company's Current Reports on Form 8-K, dated January 10 and
June 21, 1996;
4. The description of the Common Shares, par value $1.00 per share
("Common Shares"), of the Company contained in the Company's
Amendment No. 2 on Form 8, dated December 28, 1992, to the Company's
Report on Form 8-A; and
5. All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year ended 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 Exchange 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.
Item 4. Description of Securities.
See Item 3.
Item 5. Interests of Named Experts and Counsel.
The legality of the Common Shares offered hereby is being
passed upon for the Company by Sidley & Austin, One First National Plaza,
Chicago, Illinois 60603. The Company is controlled by Telephone and Data
Systems, Inc. ("TDS") and TDS is controlled by a voting trust. Walter C.D.
Carlson, a trustee and beneficiary of the voting trust and a director of TDS,
the Company and certain other subsidiaries of TDS, Michael G. Hron, the
Secretary of TDS and certain subsidiaries of TDS, William S. DeCarlo, the
Assistant Secretary of TDS and certain subsidiaries of TDS, Stephen P. Fitzell,
the Secretary of the Company and certain other subsidiaries of TDS, and Sherry
S. Treston, the Assistant Secretary of the Company and certain other
subsidiaries of TDS, are partners of Sidley & Austin.
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<PAGE>
Item 6. Indemnification of Directors and Officers.
The Company's Restated Certificate of Incorporation contains a
provision providing that no director or officer of the Company shall be
personally liable to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director or officer except for breach of the
director's or officer's duty of loyalty to the Company or its stockholders, acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, unlawful payment of dividends, unlawful stock
redemptions or repurchases and transactions from which the director or officer
derived an improper personal benefit.
Section 145 of the General Corporation Law of Delaware permits
indemnification of directors, officers and employees of a corporation under
certain conditions and subject to certain limitations. Article XI of the
Company's Restated Certificate of Incorporation, as amended, contains provisions
for the indemnification of directors, officers and employees of the Company
within the limitations permitted by Section 145.
Section 145 of the General Corporation Law of Delaware
contains provisions permitting (and, in some situations, requiring) Delaware
corporations such as the Company to provide indemnification to their officers
and directors for losses and litigation expense incurred in connection with,
among other things, their service to the corporation in those capacities. Among
other things, these provisions provide that the Company is required to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including any action by or in the
right of the Company) (a "Proceeding") by reason of the fact that he is or was a
director, officer or employee of the Company, or is or was serving at the
request of the Company as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise (including
service with respect to any employee benefit plan) against expenses (including
attorney's fees), judgments, fines, ERISA excise taxes, penalties and amounts
paid in settlement actually and reasonably incurred by him in connection with
such Proceeding to the fullest extent permitted by the Delaware General
Corporation Law, as the same exists or may be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than such law permitted the Company to
provide prior to such amendment). These provisions also provide for the advance
payment of fees and expenses reasonably incurred by the director or officer in
defense of any such Proceeding, subject to reimbursement by the director or
officer if it is ultimately determined that such officer or director is not
entitled to be indemnified by the Company.
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.
Item 7. Exemption from Registration Claimed.
Not Applicable.
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:
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<PAGE>
(a) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(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 the
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 end 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
Exchange Act that are incorporated by reference in
the Registration Statement.
2. That, for the purpose of determining any liability
under the Securities 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 Securities Act, each filing of the
Company's Annual Report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the
Exchange 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.
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<PAGE>
5. That, insofar as indemnification for liabilities
arising under the Securities 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
indemnification is against public policy as expressed
in the Securities 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 Securities
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 27th day of
November, 1996.
UNITED STATES CELLULAR CORPORATION
By: /s/ H. Donald Nelson
--------------------------
H. Donald Nelson
President
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 27th day of November, 1996.
/s/ LeRoy T. Carlson, Jr. Chairman and Director
- --------------------------
LeRoy T. Carlson, Jr.
/s/ H. Donald Nelson President (Principal Executive
- -------------------------- Officer) and Director
H. Donald Nelson
/s/ LeRoy T. Carlson Director
- --------------------------
LeRoy T. Carlson
/s/ Murray L. Swanson Director
- --------------------------
Murray L. Swanson
Director
- --------------------------
Paul-Henri Denuit
/s/ Allan Z. Loren Director
- --------------------------
Allan Z. Loren
/s/ Walter C.D. Carlson Director
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Walter C.D. Carlson
/s/ Kenneth R. Meyers Vice President-Finance and Treasurer
- -------------------------- (Principal Financial Officer)
Kenneth R. Meyers
/s/ Phillip A. Lorenzini Controller (Principal Accounting
- -------------------------- Officer)
Phillip A. Lorenzini
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<PAGE>
EXHIBIT INDEX
The following documents are filed herewith or incorporated
herein by reference.
Exhibit
No. Description
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4.1 Restated Certificate of Incorporation, as amended, of the
Company (Incorporated herein by reference to Exhibit 2(a) to
Amendment No. 2 on Form 8 dated December 28, 1992 to the
Company's Report on Form 8-A).
4.2 Restated Bylaws, as amended, of the Company (Incorporated
herein by reference to Exhibit 2(b) to Amendment No. 2 on Form
8 dated December 28, 1992 to the Company's Report on Form
8-A).
5 Opinion of Sidley & Austin.
23.1 Consent of Independent Public Accountants.
23.2 Consents of Independent Accountants.
23.3 Consent of Sidley & Austin (contained in Exhibit 5 hereto).
99.1 United States Cellular Corporation 1997 Employee Stock
Purchase Plan.
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<PAGE>
EXHIBIT 5
SIDLEY & AUSTIN
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60603
November 27, 1996
United States Cellular Corporation
Suite 700
8410 West Bryn Mawr Avenue
Chicago, Illinois 60631
Re: United States Cellular Corporation
Registration Statement on Form S-8
Gentlemen:
We are counsel to United States Cellular Corporation, 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 offer and sale of 130,000 common shares, par value $1.00 per
share (the "Shares"), of the Company pursuant to the United States Cellular
Corporation 1997 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 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 sold
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 purchaser thereof against payment 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 sale of the Shares.
<PAGE>
United States Cellular Corporation
November 27, 1996
Page 2
This opinion is limited to the Securities Act and the Delaware
General Corporation Law.
The Company is controlled by Telephone and Data Systems, Inc.
("TDS") and TDS is controlled by a voting trust. Walter C.D. Carlson, a trustee
and beneficiary of the voting trust and a director of TDS, the Company and
certain other subsidiaries of TDS, Michael G. Hron, the Secretary of TDS and
certain subsidiaries of TDS, William S. DeCarlo, the Assistant Secretary of TDS
and certain subsidiaries of TDS, Stephen P. Fitzell, the Secretary of the
Company and certain other subsidiaries of TDS, and Sherry S. Treston, the
Assistant Secretary of the Company and certain other 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.
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 United
States Cellular Corporation of our reports dated February 6, 1996, on the
consolidated financial statements and financial statement schedules of United
States Cellular Corporation and Subidiaries, included or incorporated by
by reference in the United States Cellular Corporation Form 10-K for the year
ended December 31, 1995, and to the incorporation by reference in this Form S-8
Registration Statement of our compilation report dated February 9, 1996,
on the combined financial statements of the Los Angeles SMSA Limited
Partnership, the Nashville/Clarksville MSA Limited Partnership and the Baton
Rouge MSA Limited Partnership, included in the United States Cellular
Corporation Form 10-K for the year ended December 31, 1995. We also consent to
all references to our Firm included in this Form S-8 Registration Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 26, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated January 25, 1996,
relating to the financial statements of Los Angeles SMSA Limited Partership,
appearing on page 32 of the United States Cellular Corporation Annual Report on
Form 10-K for the year ended December 31, 1995.
PRICE WATERHOUSE LLP
San Francisco, California
November 26, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Form S-8 Registration Statement of United States Cellular Corporation of our
report dated February 17, 1995, of our audits of the financial statements of the
Los Angeles SMSA Limited Partnership as of December 31, 1994, and for each of
the two years in the period ended December 31, 1994, included in the United
States Cellular Corporation Annual Report on Form 10-K for the year ended
December 31, 1995; such financial statements were not included separately in
such Form 10-K.
COOPERS & LYBRAND L.L.P.
Newport Beach, California
November 22, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Form S-8 Registration Statement of United States Cellular Corporation of our
report dated February 9, 1996, February 10, 1995 and February 11, 1994,
respectively, on our audits of the financial statements of the
Nashville/Clarksville MSA Partnership as of December 31, 1995, 1994 and
1993 and for the years ended December 31, 1995, 1994 and 1993, included in the
United States Cellular Corporation Annual Report on Form 10-K for the year ended
December 31, 1995; such financial statements were not included separately in
such Form 10-K.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
November 26, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Form S-8 Registration Statement of United States Cellular Corporation of our
report dated February 9, 1996, February 10, 1995 and February 11, 1994,
respectively, on our audits of the financial statements of the Baton Rouge MSA
Partnership as of December 31, 1995, 1994 and 1993 and for the years
ended December 31, 1995, 1994 and 1993, included in the United States Cellular
Corporation Annual Report on Form 10-K for the year ended December 31, 1995;
such financial statements were not included separately in such Form 10-K.
COOPERS & LYBRAND, L.L.P.
Atlanta, Georgia
November 26, 1996
<PAGE>
EXHIBIT 99.1
UNITED STATES CELLULAR CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. ESTABLISHMENT; PURPOSE; SCOPE.
United States Cellular Corporation hereby establishes the
United States Cellular Corporation 1997 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 United States Cellular Corporation,
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 under such plan pursuant
to section 401(a)(17) of the Code.
(g) "Controlled Group" means the Company and its
Subsidiaries.
(h) "Effective Date" means January 1, 1997.
(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.
<PAGE>
(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 January 1, 1997, and each
subsequent April 1, July 1, October 1 and January 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
a Participant as of the date he terminates employment with all Employers and
Affiliates, for whatever reason.
(m) "Plan" means the United States Cellular Corporation
1997 Employee Stock Purchase Plan herein set forth, and any amendment or
supplement thereto.
(n) "Purchase Date" means June 30, 1997, December 31,
1997, June 30, 1998 or December 31, 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 American Stock
Exchange on such date, or if such date is not a trading day, 85 percent
of the closing price of a Common Share on the American Stock Exchange 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.
(r) "Termination Date" means the earliest of (i) December
31, 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 1997 Employee Stock
Purchase Plan Committee (hereinafter referred to as the "Committee"), the
members of which shall be individuals selected by the Board who do not satisfy
the eligibility requirements of Section 4 hereunder. The Committee shall be
comprised of LeRoy T. Carlson, Jr. and Murray L. Swanson. 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.
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<PAGE>
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 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
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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.
(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 the
Participant's retirement, the balance of the Participant's Employee Stock
Purchase Account shall be refunded to the Participant as soon as
administratively practicable following such termination of employment; provided,
however, that if the date of such termination of employment occurs during the
three-month period ending on the next Purchase Date, the balance of the
Participant's Employee Stock Purchase Account shall be applied to purchase
Common Shares for the Participant as of the Purchase Date next occurring after
the Participant's retirement, unless the Participant 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 the 15th day (or such shorter period
prescribed by the Committee) prior to the Purchase Date next occurring after the
Participant's retirement.
(d) Upon termination of employment because of the
Participant's 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
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's 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
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after the Participant's death and (ii) the 90th day after the Participant's
death, or such other period as established by the Committee.
(e) 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, retirement as described in
subsection (c) of this Section, or death as described in subsection (d) 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.
(f) 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.
(g) 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 American Stock Exchange on the
Effective Date (or if such date is not a business day, the first day preceding
such date that is a business day). 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.
(h) 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 130,000 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.
(i) 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.
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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 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, or discontinues participation
in this Plan on account of the Participant's termination of employment. 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.
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(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 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.
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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.
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.
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.
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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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