As Filed with the Securities and Exchange Commission on November 26, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
Under the
SECURITIES ACT OF 1933
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AMERICAN PAGING, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3109408
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1300 Godward Street, N.E., Suite 3100
Minneapolis, Minnesota 55413
(Address of Principal Executive Offices) (Zip Code)
American Paging, Inc.
1997 Employee Stock Purchase Plan
(Full title of the plan)
LeRoy T. Carlson, Jr.
Chairman
American Paging, Inc.
1300 Godward Street, N.E., Suite 3100
Minneapolis, Minnesota 55413
(Name and address of agent for service)
(612) 623-3100
(Telephone number, including
area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price Fee
- --------------- ---------- ------------ ------------ ------------
Common Shares, 100,000
$1.00 par value shares(2) $5.8750 $587,500 $179
=============== ========== ============ ============ ============
(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
21, 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.
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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.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have heretofore been filed by American
Paging, Inc. (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 description of the Common Shares, par value $1.00 per share
("Common Shares"), of the Company contained in the Company's Report on
Form 8-A, as filed with the Commission on February 1, 1994; and
4. All other reports filed pursuant to Sections 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.
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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 and certain subsidiaries
of TDS, Michael G. Hron, the Secretary of the Company, TDS and certain other
subsidiaries of TDS, William S. DeCarlo, the Assistant Secretary of TDS and
certain subsidiaries of TDS, Stephen P. Fitzell, the Secretary of certain
subsidiaries of TDS, and Sherry S. Treston, the Assistant Secretary of certain
subsidiaries of TDS, are partners of Sidley & Austin.
Item 6. Indemnification of Directors and Officers.
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.
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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:
(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;
(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. 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;
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
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be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
hereof.
5. That, insofar as indemnification for liabilities arising under
the 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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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 26th day of
November, 1996.
AMERICAN PAGING, INC.
By: /s/ Terrence T. Sullivan
Terrence T. Sullivan
President and Chief Executive Officer
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 26th day of November, 1996.
/s/ LeRoy T. Carlson, Jr. Chairman and Director
- ---------------------------
LeRoy T. Carlson, Jr.
/s/ Terrence T. Sullivan President and Chief Executive Officer
- --------------------------- (Principal Executive Officer) and
Terrence T. Sullivan Director
/s/ Murray L. Swanson Director
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Murray L. Swanson
/s/ James Barr III Director
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James Barr III
/s/ Debora M. de Hoyos Director
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Debora M. de Hoyos
/s/ Edwin L. Russell Director
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Edwin L. Russell
/s/ Jean Burhardt Keffeler Director
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Jean Burhardt Keffeler
/s/ Michelle M. Haupt Controller (Principal Accounting Officer)
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Michelle M. Haupt
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EXHIBIT INDEX
The following documents are filed herewith or incorporated herein by
reference.
Exhibit
No. Description
- ------- -----------
4.1 Restated Certificate of Incorporation, as amended, of the Company is
hereby incorporated herein by reference to Exhibit 3(i) to the
Company's Registration Statement on Form S-1 (Registration No.
33-72702)
4.2 Restated Bylaws, as amended, of the Company are hereby incorporated
herein by reference to Exhibit 3(ii) to the Company's Registration
Statement on Form S-1 (Registration No. 33- 72702)
5 Opinion of Sidley & Austin
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Sidley & Austin (contained in Exhibit 5 hereto)
99.1 American Paging, Inc. 1997 Employee Stock Purchase Plan
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EXHIBIT 5
SIDLEY & AUSTIN
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60603
November 26, 1996
American Paging, Inc.
Suite 3100
1300 Godward Street, N.E.
Minneapolis, Minnesota 55413
Re: American Paging, Inc. Registration Statement on Form S-8
Gentlemen:
We are counsel to American Paging, Inc., a Delaware corporation (the
"Company"), and have represented the Company in connection with the Registration
Statement on Form S-8 (the "Registration Statement") being filed by the Company
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the offer and sale of 100,000
Common Shares, par value $1.00 per share (the "Shares"), of the Company pursuant
to the American Paging, Inc. 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
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.
This opinion is limited to the Securities Act and the Delaware General
Corporation Law.
<PAGE>
American Paging, Inc.
November 26, 1996
Page 2
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 and certain subsidiaries
of TDS, Michael G. Hron, the Secretary of TDS, the Company and certain other
subsidiaries of TDS, William S. DeCarlo, the Assistant Secretary of TDS and
certain subsidiaries of TDS, Stephen P. Fitzell, the Secretary of certain
subsidiaries of TDS, and Sherry S. Treston, the Assistant Secretary of certain
subsidiaries of TDS, are partners of 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
EXHIBIT 23.1
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-8 Registration Statement of American Paging, Inc. of
our reports on the consolidated financial statements and schedule of American
Paging, Inc. and Subsidiaries dated February 6, 1996, included in the 1995
Annual Report on Form 10-K of American Paging, Inc. We also consent to all
references to our Firm included in this Form S-8 Registration Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 25, 1996
EXHIBIT 99.1
AMERICAN PAGING, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. ESTABLISHMENT; PURPOSE; SCOPE.
American Paging, Inc. hereby establishes the American Paging, Inc. 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 American Paging, Inc., a Delaware corporation, and any
successor thereto.
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(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.
(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 American Paging, Inc. 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.
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(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.
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.
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(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
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executing and delivering to the Benefits Representative an application on the
prescribed form specifying his chosen rate of payroll deduction contributions.
An election by a Participant to decrease his designated rate of payroll
deductions to 0% of his Compensation shall be deemed an election to abandon his
right to purchase Common Shares under the Plan, as described in Section 8. A
Participant shall not have the right to elect to increase his designated rate of
payroll deductions under the Plan.
(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.
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(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 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
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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
100,000 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.
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
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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.
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SECTION 11. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
(a) The existence of the Plan shall not affect in any way the right or
power of the Company or its shareholders to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock that affects the
Common Shares or the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
(b) If, during the term of the Plan, the Company shall effect (i) a
distribution or payment of a dividend on its Common Shares in shares of the
Company, (ii) a subdivision of its outstanding Common Shares by a stock split or
otherwise, (iii) a combination of the outstanding Common Shares into a smaller
number of shares by a reverse stock split or otherwise, or (iv) an issuance by
reclassification or other reorganization of its Common Shares (other than by
merger or consolidation) of any shares of the Company, then each Participant
shall be entitled to receive upon the purchase of shares pursuant to this Plan
such shares of the Company which the Participant would have owned or would have
been entitled to receive after the happening of such event had the Participant
purchased Common Shares pursuant to the Plan immediately prior to the happening
of such event. If any other event shall occur that, in the judgment of the
Board, necessitates adjusting the Offering Price, the number of Common Shares
offered or other terms of the Plan, the Board shall take any action that in its
judgment shall be necessary to preserve each Participant's rights substantially
proportionate to the rights existing prior to such event. To the extent that any
event or action pursuant to this paragraph shall entitle Participants to
purchase additional Common Shares or other shares of the Company, the shares
available under this Plan shall be deemed to include such additional Common
Shares or such other shares of the Company.
(c) In the event of a merger of one or more corporations into the Company,
or a consolidation of the Company and one or more corporations in which the
Company shall be the surviving corporation, each Participant in the Plan shall,
at no additional cost, be entitled, upon 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
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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 canceled by the Board as of the effective date of any such
merger, consolidation or sale, provided that (i) notice of such cancellation
shall be given to each Participant and (ii) each such Participant shall have the
right to purchase, during a 30-day period preceding the effective date of such
merger, consolidation or sale, all or any part of the shares allocated to him
under the terms of the Plan.
(e) Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of Common Shares then available for
purchase under the Plan.
SECTION 12. SHAREHOLDER APPROVAL.
The Plan is subject to the approval of a majority of the votes cast on the
matter by the shareholders of the Company within twelve months before or after
its adoption by the Board.
SECTION 13. RIGHTS OF A SHAREHOLDER.
No Participant shall have rights or privileges of a shareholder of the
Company with respect to shares purchasable under this Plan unless and until the
Participant shall become the holder of record of one or more Common Shares.
SECTION 14. NO REPURCHASE OF COMMON SHARES BY COMPANY.
The Company is not obligated to repurchase any Common Shares acquired under
the Plan.
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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.
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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