As filed with the Securities and Exchange Commission on August 25, 1995
Registration No. 33-61009
Securities and Exchange Commission
Washington, D.C. 20549
---------------
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
Telephone and Data Systems, Inc.
(Exact name of Registrant as specified in its charter)
Iowa 6749 36-2669023
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification
Number)
30 North LaSalle Street, Suite 4000
Chicago, Illinois 60602
(312) 630-1900
(Address, including Zip Code, and telephone
number, including area code, of registrant's principal
executive offices)
--------------------
With copies to:
LeRoy T. Carlson, Chairman David J. Boyd
Telephone and Data Systems, Inc. Sidley & Austin
30 North LaSalle Street, Suite 4000 One First National Plaza
Chicago, Illinois 60602 Chicago, Illinois 60603
(312) 630-1900 (312) 853-7444
(Names, addresses, including Zip Codes, and telephone
numbers, including area codes, of agents for service)
--------------------
Approximate date of commencement of proposed sale to the public:
Upon the Effective Date of the merger of TDS-Camden Acquisition Corp. with and
into Camden Telephone Company, Inc., as set forth in Section 1.2 of the
Agreement and Plan of Merger, as amended, included as Annex A to the Proxy
Statement-Prospectus forming a part of this Registration Statement.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box: ___
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
TELEPHONE AND DATA SYSTEMS
Cross-Reference Sheet
Item Number and Caption Location in
Prospectus
A. Information About the Transaction
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus........Cover Page
2. Inside Front and Outside Back Cover Pages
of Prospectus.................................Available Information;
Documents Incorporated by
Reference; Table of
Contents
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information.................Summary; General
Information
4. Terms of the Transaction......................Summary; General
Information; The Merger;
Description of Camden
Shares; Description of
TDS Securities;
Comparative Rights of TDS
Shareholders and Camden
Shareholders
5. Pro Forma Financial Information...............Summary-Selected
Financial Information
6. Material Contacts with the Company Being
Acquired......................................The Merger
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to be Underwriters............................ *
8. Interests of Named Experts and Counsel........Legal Matters; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................... *
B. Information About the Registrant
10. Information with Respect to S-3 Registrants...Business of TDS
11. Incorporation of Certain Information by
Reference.....................................Documents Incorporated by
Reference
12. Information with Respect to S-2 or S-3
Registrants................................... *
13. Incorporation of Certain Information by
Reference..................................... *
14. Information with Respect to Registrants
Other Than S-3 or S-2 Registrants............. *
C. Information About the Company Being Acquired
15. Information with Respect to S-3 Companies..... *
16. Information with Respect to S-2 or S-3
Companies..................................... *
17. Information with Respect to Companies Other
Than S-2 or S-3 Companies.....................Summary -Selected
Financial Information;
Information with Respect
to Camden; Camden
Management's Discussion
and Analysis of Financial
Condition and Results of
Operations; Financial
Statements of Camden
D. Voting and Management Information
18. Information If Proxies, Consents or
Authorizations Are to be Solicited............General Information; The
Merger - Rights of
Dissenting Camden
Shareholders; The Merger-
Interests of Certain
Persons in the Merger;
Information with Respect
to Camden-Directors and
Executive Officers, and -
Compensation of Directors
19. Information If Proxies, Consents or
Authorizations Are Not to be Solicited
or in an Exchange Offer...................... *
---------------
* Not applicable or answer negative
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
170 West Main Street
Camden, Indiana 46917-0066
Dear Shareholder:
You are invited to attend a special meeting of shareholders of
Camden Telephone Company, Inc. ("Camden"), at 1:30 p.m. on Friday, October 6,
1995 at St. Peter's Lutheran Church, corner of Church and Cumberland Streets,
Camden, Indiana 46917.
At the special meeting, holders of Common Shares, without par
value, of Camden will be asked to consider and approve an Agreement and Plan of
Merger, as amended, among Telephone and Data Systems, Inc. ("TDS"), TDS-Camden
Acquisition Corp. ("Sub") and Camden (the "Merger Agreement"), and the Merger of
Sub with and into Camden (the "Merger"). If approved, the Merger is expected to
occur on or about October 13, 1995 if all regulatory approvals have been
received by such date or as soon as practicable thereafter following the receipt
of all required regulatory approvals. In the Merger, Camden will become a
wholly-owned subsidiary of TDS and the Camden shares held by the shareholders
will be converted into common shares of TDS, as described in the accompanying
Proxy Statement-Prospectus.
Your Board of Directors believes that the Merger is in the best
interests of all Camden shareholders and unanimously recommends that you vote
your shares for the Merger. The terms of the Merger, as well as other important
information, are contained in the enclosed Proxy Statement-Prospectus. Also
being delivered herewith in connection with the offer by TDS is the TDS Annual
Report on Form 10-K and the TDS Annual Report to Shareholders for the year ended
December 31, 1994, the TDS Notice of Annual Meeting and Proxy Statement for the
1995 Annual Meeting of Shareholders and the TDS Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, 1995 and June 30, 1995. You are urged to
read the Proxy Statement- Prospectus and the accompanying documents carefully.
Approval of the Merger requires an affirmative vote of the holders
of a majority (51%) of the outstanding Camden Shares entitled to vote on the
proposal. CONSEQUENTLY, THE EFFECT OF FAILING TO VOTE ANY CAMDEN SHARES AT OUR
SPECIAL MEETING OF SHAREHOLDERS WILL BE THE SAME AS A NEGATIVE VOTE WITH RESPECT
TO THE MERGER. ACCORDINGLY, WHETHER OR NOT YOU PLAN TO ATTEND OUR SPECIAL
SHAREHOLDERS MEETING, WE REQUEST THAT YOU PLEASE COMPLETE, SIGN, DATE AND RETURN
THE ENCLOSED PROXY AS SOON AS POSSIBLE IN THE ENCLOSED PREPAID ENVELOPE. PLEASE
DO NOT SEND IN ANY CERTIFICATES FOR YOUR SHARES AT THIS TIME. If, after voting
your shares through the mail, you decide you would rather vote them in person,
you may do so at the meeting. We thank you for your prompt attention to this
matter and appreciate your support.
Very truly yours,
James R. Sullivan,
President
___________, 1995
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
Notice of Special Meeting of Shareholders to be Held on October 6, 1995
To the Shareholders of
Camden Telephone Company, Inc.:
A special meeting of the shareholders of Camden Telephone Company,
Inc., an Indiana corporation ("Camden"), will be held on Friday, October 6, 1995
at 1:30 p.m. at St. Peter's Lutheran Church, corner of Church and Cumberland
Streets, Camden, Indiana, for the following purposes:
1. To consider and vote upon approval of an Agreement and Plan of
Merger, as amended, among Telephone and Data Systems, Inc. ("TDS"), TDS-Camden
Acquisition Corp. ("Sub") and Camden (the "Merger Agreement") providing for the
merger (the "Merger") of Sub with and into Camden pursuant to which Camden will
become a wholly-owned subsidiary of TDS. In the Merger, the Camden Shares held
by the shareholders will be converted into Common Shares of TDS, as described in
the accompanying Proxy Statement-Prospectus.
2. To transact such other business as may properly come before the
meeting and any adjournment or adjournments thereof.
The Board of Directors of Camden has fixed the close of business on
August 22, 1995 as the record date for the Special Meeting. Only shareholders of
record at such date will be entitled to notice of and to vote at the Special
Meeting and any adjournment or adjournments thereof.
Approval of the Merger Agreement will require the affirmative vote
of a majority (51%) of the issued and outstanding Camden Shares. Consequently,
the effect of failing to vote any Camden Share at the Special Meeting will be
the same as a negative vote with respect to the Merger. On August 22, 1995,
there were 280 shares of Common Stock outstanding.
A copy of the provisions of Indiana law that establishes the right
of shareholders to dissent from approval of the Merger Agreement, and the
procedures required to exercise such rights, and obtain court determined
appraised value for their shares is also enclosed as Annex B to the accompanying
Proxy Statement-Prospectus.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT
PROMPTLY BUT NOT LATER THAN SEPTEMBER 29, 1995 IN THE ENCLOSED ENVELOPE WHETHER
OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING. IF, AFTER VOTING YOUR SHARES
THROUGH THE MAIL, YOU DECIDE YOU WOULD RATHER VOTE THEM IN PERSON, YOU MAY DO SO
AT THE MEETING.
By order of the Board of Directors
JoAnn Johnson,
Secretary - Treasurer
___________, 1995
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 25, 1995
CAMDEN TELEPHONE COMPANY, INC. TELEPHONE AND DATA SYSTEMS, INC.
170 West Main Street 30 North LaSalle, 40th Floor
Camden, Indiana 46917-0066 Chicago, Illinois 60602
PROXY STATEMENT-PROSPECTUS
For the Special Meeting of Shareholders of Camden Telephone Company, Inc.
to be held October 6, 1995
---------------
Telephone and Data Systems, Inc. ("TDS") has filed a
Registration Statement on Form S-4 with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended, covering its
Common Shares, par value $1.00 per share (the "TDS Common Shares"), to be issued
in connection with the proposed merger (the "Merger") described in this
Prospectus. Also being delivered herewith are TDS' Annual Report to the
Commission on Form 10-K for the year ended December 31, 1994, the TDS Annual
Report to Shareholders for the year ended December 31, 1994, the TDS Notice of
Annual Meeting and Proxy Statement for the 1995 Annual Meeting of Shareholders
and TDS' Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
1995 and June 30, 1995. This Prospectus of TDS also constitutes the Proxy
Statement of Camden Telephone Company, Inc. ("Camden") to be used in soliciting
proxies of Camden shareholders for a Special Meeting of Shareholders to be held
on October 6, 1995, including any adjournments thereof, to consider and vote
upon the Merger of a wholly-owned subsidiary of TDS into Camden pursuant to
which Camden will become a wholly-owned subsidiary of TDS.
This Proxy Statement-Prospectus is first being sent to
shareholders of Camden on or about ___________, 1995.
THE TELEPHONE AND DATA SYSTEMS, INC. COMMON SHARES TO BE ISSUED IN THE
MERGER HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
No person has been authorized to give any information or to make
any representations, other than those contained in this Proxy
Statement-Prospectus in connection with the offer contained herein, and if given
or made, such information or representations must not be relied upon as having
been authorized by TDS or Camden. This Proxy Statement-Prospectus does not
constitute an offer of any securities other than the securities to which it
relates to any person to whom it is unlawful to make such offer or solicitation
in any state or other jurisdiction. Neither the delivery of this Proxy
Statement-Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information contained herein is correct as of
any time subsequent to the date hereof.
The date of this Proxy Statement-Prospectus is ____________ 1995.
<PAGE>
AVAILABLE INFORMATION
TDS is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; New York Regional
Office, Seven World Trade Center, New York, New York 10048; and Chicago Regional
Office, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can be obtained from the Pubic Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. TDS's
Common Shares are listed on the American Stock Exchange, and reports, proxy
statements and other information concerning TDS may be inspected at the office
of the American Stock Exchange, Inc., 86 Trinity Place, New York, New York
10006. This Proxy Statement-Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the SEC. The Registration Statement
and any amendments thereto, including exhibits filed as a part thereof, are
available for inspection and copying as set forth above.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by TDS with the
Commission under the Exchange Act are incorporated herein by reference: (a)
Annual Report on Form 10-K for the year ended December 31, 1994, (b) Notice of
Annual Meeting of Shareholders and Proxy Statement dated April 14, 1995; (c)
Current Reports on Form 8-K dated March 15, 1995 and May 19, 1995; (d) Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1995 and June 30, 1995 and
(e) Report on Form 8-A/A-2, dated December 20, 1994, which includes a
description of TDS' Common Shares.
All documents filed by TDS pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Proxy Statement-Prospectus
and prior to the date of the Special Meeting of Shareholders of Camden, and any
and all adjournments thereof, shall be deemed to be incorporated by reference in
this Proxy Statement-Prospectus and to be a part hereof from the date of filing
of such documents. Any statements contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained herein (or in any other
subsequently filed document which also is incorporated by reference herein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed to constitute a part hereof except as so modified or
superseded. All information appearing in this Proxy Statement-Prospectus is
qualified in its entirety by the information and financial statements (including
notes thereto) appearing in the documents incorporated herein by reference.
THIS PROXY STATEMENT-PROSPECTUS INCORPORATES DOCUMENTS BY
REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS
(OTHER THAN EXHIBITS THERETO) ARE AVAILABLE WITHOUT CHARGE, UPON WRITTEN OR ORAL
REQUEST BY ANY PERSON TO WHOM THIS PROXY STATEMENT-PROSPECTUS HAS BEEN
DELIVERED, FROM INVESTOR RELATIONS, TELEPHONE AND DATA SYSTEMS, INC., 30 NORTH
LASALLE STREET, 40TH FLOOR, CHICAGO, ILLINOIS 60602 (TELEPHONE 312-630-1900). IN
ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE
BEFORE SEPTEMBER 28, 1995.
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<PAGE>
TABLE OF CONTENTS
Page
Available Information........................................................2
Documents Incorporated by Reference..........................................2
Summary......................................................................5
Summary Selected Financial Information.......................................9
General Information.........................................................11
The Merger..................................................................12
Merger Consideration.................................................12
Price Range of TDS Common Shares ....................................13
Background of the Merger.............................................13
Camden's Reasons for the Merger; Recommendation of Camden's
Board of Directors.................................................14
TDS's Reasons for the Merger.........................................15
Effective Date of the Merger.........................................15
Vote Required .......................................................15
Conversion of Shares in the Merger...................................15
Exchange of Certificates.............................................15
Fractional Shares....................................................15
Representations and Warranties.......................................16
Business of Camden Pending Completion of the Merger..................16
Conditions...........................................................17
Amendment; Termination...............................................18
Operation of Camden Following the Merger;
Interests of Certain Persons in the Merger.........................18
Indemnification......................................................19
Registration and Listing.............................................19
Certain Federal Income Tax Consequences..............................19
Accounting Treatment.................................................20
Regulatory Approvals.................................................20
Dissenters' Rights...................................................20
Business of TDS.............................................................21
Information with Respect to Camden..........................................22
Business of Camden...................................................22
Property of Camden...................................................23
Legal Proceedings of Camden..........................................23
Changes in and Disagreements with Accountants of Camden..............23
Authorized and Outstanding Securities of Camden......................24
Market for Shares and Dividends......................................24
Security Ownership of Certain Beneficial Owners......................24
Security Ownership of Directors, Executive Officers
and Management Employees..........................................24
Directors, Executive Officers and Management Employees...............25
Compensation of Directors, Executive Officers and
Management Employees...............................................25
Benefit Plans........................................................25
Certain Relationships and Related Transactions.......................26
Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................................26
Description of Camden Shares................................................29
Description of TDS Securities...............................................29
Voting Trust.........................................................30
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<PAGE>
Page
Preferred Stock......................................................30
Voting Rights........................................................30
Dividend Rights and Restrictions.....................................30
Conversion Rights....................................................31
Other Rights.........................................................31
General..............................................................31
Comparative Rights of TDS Shareholders and Camden Shareholders..............31
Preferred Stock......................................................32
Limitation of Director Liability.....................................32
Legal Matters...............................................................32
Experts.....................................................................32
TDS. . ..............................................................32
Camden...............................................................32
Index to Camden Financial Statements........................................F-1
Annex A - Agreement and Plan of Merger (including the First Supplemental
Agreement and Second Supplemental Agreement thereto)
Annex B - The Indiana Business Corporation Law - Sections 23-1-44-1 to
23-1-44-20
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<PAGE>
SUMMARY
The following is a summary of certain information contained elsewhere
in this Proxy Statement- Prospectus or in documents delivered herewith. Certain
capitalized terms are defined elsewhere in this Proxy Statement-Prospectus.
Reference is made to, and this Summary is qualified in its entirety by, the more
detailed information contained in this Proxy Statement-Prospectus, the Annexes
hereto and the documents delivered herewith.
Telephone and Data Systems, Inc.
Telephone and Data Systems, Inc., an Iowa corporation ("TDS"), is a
diversified telecommunications service company with cellular telephone, local
telephone and radio paging operations. The principal executive office of TDS is
located at 30 North LaSalle Street, 40th Floor, Chicago, Illinois 60602, and its
telephone number is: (312) 630-1900. See "Business of TDS."
Camden Telephone Company, Inc.
Camden Telephone Company, Inc., an Indiana corporation ("Camden"), is
engaged in the business of providing telephone service to customers in Carrol
and Cass Counties, Indiana. The principal executive office of Camden is located
at 170 West Main Street, Camden, Indiana 46917-0066 and its telephone number is:
(219) 686-2111. See "Information with Respect to Camden-Business of Camden."
Merger Agreement
On April 27, 1995, TDS, TDS-Camden Acquisition Corp., an Indiana
corporation and wholly-owned subsidiary of TDS ("Sub"), and Camden signed an
Agreement and Plan of Merger (the "Original Merger Agreement") providing for the
merger of Sub into Camden as a result of which Camden would become a
wholly-owned subsidiary of TDS (the "Merger"). On June 29, 1995 and August 10,
1995 TDS, Sub and Camden entered into a First Supplemental Agreement and a
Second Supplemental Agreement, respectively, amending the Original Merger
Agreement in certain respects. The Original Merger Agreement, as so amended, is
herein referred to as the "Merger Agreement."
Date, Time and Place of Camden Shareholders' Meeting
Camden's Special Meeting of Shareholders to consider and vote upon
approval of the Merger Agreement is to be held on October 6, 1995 at 1:30 p.m.,
at St. Peter's Lutheran Church, corner of Church and Cumberland Streets, Camden,
Indiana (the "Camden Meeting").
Record Date
Only holders of record of Common Shares of Camden, without par value
("Camden Shares"), at the close of business on August 22, 1995 (the "Camden
Record Date"), are entitled to vote at the Camden Meeting. At the close of
business on that date there were 280 Camden Shares outstanding.
Purpose of the Camden Meeting
1. To consider and vote upon a proposal to approve the Merger
Agreement and the transactions contemplated thereby; and
2. To transact any other business that may properly come before the
Camden Meeting.
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<PAGE>
Vote Required
The affirmative vote of the holders of a majority (51%) of the
outstanding Camden Shares entitled to vote at the Camden Meeting is required to
approve the Merger Agreement. Directors, officers and management employees of
Camden beneficially owned 35 Camden Shares on the Camden Record Date
(approximately 12.5% of the Camden Shares then outstanding). See "Information
With Respect to Camden-Security Ownership of Directors, Executive Officers and
Management Employees."
PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY USING THE
ENCLOSED ENVELOPE TO MAKE SURE YOUR VOTE IS REPRESENTED AT THE CAMDEN MEETING.
The Merger; Merger Consideration
Upon consummation of the Merger, Sub will be merged with and into
Camden and Camden will become a wholly-owned subsidiary of TDS. In the Merger,
each Camden Share issued and outstanding immediately prior to the Merger (other
than shares held by any shareholder who shall have perfected his or her right to
dissent under the Indiana Business Corporation Law ("IBCL")) will be converted
into that number of Common Shares, $1.00 par value, of TDS (the "TDS Common
Shares") determined by dividing $20,000 by the Average Closing Price (defined
below) of the TDS Common Shares, provided that if the Average Closing Price of
the TDS Common Shares is equal to or greater than $39.125, then each Camden
Share shall be converted into 511.4286 TDS Common Shares and if the Average
Closing Price is less than $36.00, TDS may, but shall not be required to,
terminate the Merger Agreement and not complete the Merger.
The term "Average Closing Price" means the arithmetical average of
the closing prices for TDS Common Shares as reported in the American Stock
Exchange Composite Transaction section of The Wall Street Journal for the five
trading days ending on the third trading day prior to the effective date of the
Merger (the "Effective Date").
If the Average Closing Price is $32 or more, and if the shareholders
of Camden have duly approved the Merger at the Camden Meeting, then the Merger
may be consummated without any further action or approval by the shareholders of
Camden. However, the Merger Agreement also provides that if the application of
the formula described above would result in each Camden Share being converted
into more than 625 TDS Common Shares (which would result if the Average Closing
Price was less than $32), the Merger will not be consummated without the
affirmative vote the holders of at least a majority of the outstanding Camden
Shares. Such a vote, if necessary, would be sought at an additional meeting of
the shareholders of Camden to which would be held after the Camden Meeting now
scheduled for October 6, 1995, as described herein. No such additional meeting
will be called or held unless the Average Closing Price is less than $32 and TDS
nevertheless desires to consummate the Merger. If the Average Closing Price is
$32 or more, and if the shareholders of Camden have approved the Merger at the
Camden Meeting, the Merger may be consummated without any further vote of the
shareholders of Camden.
The total number of TDS Common Shares calculated in accordance with
the foregoing and issued in connection with the Merger is sometimes referred to
herein as the "Aggregate Merger Consideration." The number of TDS Common Shares
into which each Camden Share is converted is referred to as the "Merger
Consideration."
The closing price per TDS Common Share on August 21, 1995 was
$40.625. As a result, on such date the value of the Merger Consideration was
$20,777 per Camden Share. The value of the Merger Consideration may be higher or
lower on the Effective Date. The table set forth under the caption "The Merger -
Merger Consideration" indicates the number of TDS Common Shares to be received
for each Camden Share at different Average Closing Prices for TDS Common Shares.
See "The Merger - Price Range of TDS Common Shares" for historical information
concerning the selling prices of the TDS Common Shares on the American Stock
Exchange.
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<PAGE>
TDS will issue only whole TDS Common Shares in connection with the
Merger. Each holder of Camden Shares who otherwise would be entitled to receive
a fractional TDS Common Share will receive in lieu thereof an amount of cash
(without interest) determined by multiplying the closing sale price of a TDS
Common Share on the American Stock Exchange on the effective date of the Merger
(the "Effective Date"), by the fractional share interest to which such holder
would otherwise be entitled.
The Merger Agreement also provides that, if the Merger Agreement is
duly approved by the Camden Shareholders at the special meeting, Camden shall be
entitled to pay a dividend equal to $800 per Camden Share immediately prior to
the Effective Date of the Merger.
Recommendation of Camden's Board of Directors
The Board of Directors of Camden believes that the Merger is in the
best interests of Camden and its shareholders. The Board of Camden unanimously
recommends that the shareholders of Camden approve the Merger Agreement. The
Board's recommendation is based upon factors discussed in this Proxy
Statement-Prospectus. See "The Merger - Camden Reasons for the Merger;
Recommendation of Camden's Board of Directors" and "-Operation of Camden
Following the Merger; Interests of Certain Persons in the Merger", and
"Information with Respect to Camden-Security Ownership of Directors, Executive
Officers and Management Employees".
Effective Date of the Merger
If the Merger Agreement is approved at the Camden Meeting, the Merger
is expected to become effective on or about October 13, 1995 or as soon as
practicable thereafter following the receipt of all required regulatory
approvals.
Exchange of Certificates
If the Merger Agreement is approved, Camden shareholders will receive
instructions for exchanging certificates representing Camden Shares for
certificates representing TDS Common Shares. Shareholders should not surrender
their certificates until they receive such instructions.
Conditions to the Merger; Termination
The consummation of the Merger is conditioned upon the fulfillment of
certain conditions set forth in the Merger Agreement, including the regulatory
approvals discussed below. See "The Merger - Conditions." The Merger Agreement
may be terminated by mutual consent of the Boards of Directors of TDS and
Camden, by either TDS or Camden if certain conditions have not been satisfied or
in certain other situations. See "The Merger - Conditions" and "- Amendment;
Termination."
Regulatory Approvals
The Merger is subject to approval by the Indiana Utility Regulatory
Commission ("IURC"). Also, the transfer of certain licenses pursuant to the
Merger is subject to the approval of the Federal Communications Commission. See
"The Merger - Regulatory Approvals."
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<PAGE>
Federal Income Tax Consequences
The Merger is intended to qualify as a tax-free reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
Whether the transaction does qualify for tax-free treatment by Camden
shareholders will depend in part on circumstances occurring after the Merger.
For a discussion of the possible federal income tax consequences of the Merger,
see "The Merger - Certain Federal Income Tax Consequences." Camden shareholders
are urged to consult their own tax advisors.
Dissenters' Rights of Appraisal
Under the IBCL, Camden shareholders will be entitled to dissent from
the Merger and, if the Merger is consummated, obtain cash in an amount equal to
the fair value of their Camden Shares which may be more or less than the amount
to be received under the Merger. Specific procedures are required to be followed
in order to exercise such rights. See "The Merger - Dissenters' Rights." The
Merger Agreement provides that if the holders of more than 15 Camden Shares
exercise such rights, TDS and Sub shall have the right to refuse to consummate
the Merger and terminate the Merger Agreement.
-8-
<PAGE>
SUMMARY SELECTED FINANCIAL INFORMATION
The following tables present summary historical financial
information for TDS and Camden. This information is based upon the consolidated
financial statements of TDS and the financial statements of Camden incorporated
by reference or appearing elsewhere in this Proxy Statement-Prospectus and
should be read in conjunction therewith and the notes thereto.
<TABLE>
<CAPTION>
Six Months Ended
June 30, (Unaudited) Year Ended December 31,
------------------------- -----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
(Numbers represent thousands except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
TDS Historical:
Operating Revenues................... $442,066 $332,387 $730,810 $557,795 $432,740 $340,160 $286,743
Net income from continuing operations
(before extraordinary items and
cumulative effect of change
in accounting principle) 45,773 24,544 60,544 33,896 38,520 21,113 27,208
Extraordinary item .............. --- --- --- --- --- ---
Cumulative effect of a change in
accounting principle(1) --- (723) (723) --- (6,866) (5,035) ---
Net income available to TDS Common
Shares 44,800 22,684 58,012 31,510 28,648 14,390 26,047
Earnings per TDS Common Share:
Net income from continuing operations
(before extraordinary items and
cumulative effect of change in
accounting principle) .77 .44 1.07 .67 .91 .59 .86
Extraordinary item.................... --- --- --- --- (.02) --- ---
Cumulative effect of a change in
accounting principle --- (.01) (.01) --- (.17) (.15) ---
Net Income ........................... .77 .43 1.06 .67 .72 .44 .86
Cash dividends per TDS Common Share .19 .18 .36 .34 .32 .30 .28
Total assets.................. 3,346,110 2,456,499 2,790,127 2,259,182 1,696,486 1,368,145 940,289
Long-term debt and redeemable
preferred stock............. 907,565 554,236 587,165 564,933 454,852 424,739 277,031
Book value per TDS Common Share $28.10 $26.00 $26.85 $24.15 $21.27 $18.42 $14.17
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30, (Unaudited) Year Ended December 31,
------------------------- ---------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
(Numbers represent thousands except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Camden Historical:
Operating Revenues................... $ 601 $ 554 $1,221 $1,084 $1,045 $ 956 $ 859
Net income .......................... 234 215 449 350 368 275 235
Net income per Camden Share 837 767 1,605 1,249 1,314 982 838
Cash dividends per Camden Share 800 700 700 650 600 500 500
Total assets......................... 2,887 2,896 2,922 3,165 3,417 3,273 3,150
Long-term debt....................... 377 684 432 1,025 1,394 1,457 1,517
Book value per Camden Share $ 6,758 $ 5,882 $ 6,696 $ 5,816 $ 5,217 $ 4,503 $ 4,022
</TABLE>
Six Months Ended Year Ended
TDS and Camden June 30, 1995 December 31, 1994
PRO FORMA COMBINED(2): (Unaudited) (3) (Unaudited) (3)
---------------------- -------------------- -----------------
Net income before cumulative effect
of change in accounting principle
per TDS Common Share: $ .78 $ 1.07
Pro Forma
Camden Share equivalent 398.91 574.23
Net income per TDS Common Share: .78 1.06
Pro Forma
Camden Share equivalent 398.91 542.11
Cash dividends per TDS Common Share: .19 .36
Pro Forma
Camden Share equivalent 97.17 184.11
Book value per TDS Common Share: 28.13 26.87
Pro Forma
Camden Share equivalent $ 14,386.00 $ 13,742.00
---------------
(1) Effective January 1, 1994, TDS adopted Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment Benefits"
("SFAS 112"). The cumulative effect of the change on years prior to 1994
has been reflected in 1994 net income. Prior years, financial information
has not been restated.
Effective January 1, 1993, TDS adopted SFAS 109, "Accounting for Income
Taxes." The cumulative effect of the change on years prior to 1993 did not
have a material effect on net income or earnings per share. Prior years'
financial information has not been restated.
-9-
<PAGE>
Effective January 1, 1992, TDS adopted SFAS 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." The cumulative effect of the
change on years prior to 1992 has been reflected in 1992 net income. Prior
years' financial information has not been restated.
Effective January 1, 1991, TDS changed its method of accounting for sales
commission from capitalizing and amortizing these costs to expensing as
incurred. In addition, two of TDS's equity-method investees made a similar
change. The cumulative effect of TDS's and the Investees' change on all
prior years has been reflected in 1991 results of operations. Prior years'
financial information has not been restated.
(2) The pro forma combined financial information for TDS and Camden has
been prepared based on the purchase method of accounting assuming
511.4286 TDS Common Shares are issued for each Camden Share. The pro
forma combined information reflects TDS's acquisition of 100% of the
Camden Common Shares, the elimination of the Camden equity based on the
purchase method of accounting and the allocation of the purchase price
to excess cost over the book value. Excess cost is assumed to be
amortized over 40 years.
(3) Pro forma financial information for the six months ended June 30, 1995
represents the combined results of TDS and Camden for the six months
ended June 30, 1995. Pro forma financial information for the year ended
December 31, 1994 represents the combined results of TDS and Camden for
the twelve months ended December 31, 1994.
-10-
<PAGE>
GENERAL INFORMATION
This Proxy Statement-Prospectus is furnished in connection with
the solicitation by the Board of Directors of Camden Telephone Company, Inc., an
Indiana corporation ("Camden"), of proxies to be voted at a special meeting of
the shareholders of Camden (the "Camden Meeting") which will be held on October
6, 1995.
The purpose of the Camden Meeting is to consider and vote upon a
proposal to approve the Agreement and Plan of Merger, dated as of April 27,
1995, as amended by the First Supplemental Agreement dated as of June 29, 1995
and the Second Supplemental Agreement dated as of August 10, 1995 (the "Merger
Agreement"), among Telephone and Data Systems, Inc., an Iowa corporation
("TDS"), TDS-Camden Acquisition Corp., an Indiana corporation and a wholly-owned
subsidiary of TDS ("Sub"), and Camden, providing for the merger (the "Merger")
of Sub into Camden as a result of which Camden will become a wholly-owned
subsidiary of TDS.
The Board of Directors of Camden has unanimously approved the
Merger Agreement. The Board of Directors of TDS has approved the issuance of
Common Shares, $1.00 par value ("TDS Common Shares"), in the Merger, and TDS,
the sole shareholder of Sub, has approved the Merger and the Merger Agreement. A
copy of the Merger Agreement is attached as Annex A to this Proxy
Statement-Prospectus and is incorporated herein by reference.
The close of business on August 22, 1995 (the "Camden Record
Date") has been fixed as the record date for determination of the holders of
Common Shares without par value, of Camden ("Camden Shares") entitled to notice
of, and to vote at, the Camden Meeting. As of the Camden Record Date, there were
280 Camden Shares outstanding. The holders of record on the Camden Record Date
of Camden Shares are entitled to one vote per share on each matter submitted to
a vote at the Camden Meeting. The affirmative vote of the holders of a majority
(51%) of the outstanding Camden shares is required for approval of the Merger
Agreement.
All properly executed proxies not revoked will be voted at the
Camden Meeting in accordance with the instructions contained therein. Proxies
containing no instructions regarding proposals specified in the form of proxy
will be voted in favor of the proposal. If any other matters are brought before
the Camden Meeting and submitted to a vote, all proxies will be voted in
accordance with the judgment of the persons voting the proxies. A shareholder
who has executed and returned a proxy may revoke it at any time before it is
voted, but only by executing and returning a proxy bearing a later date, by
giving written notice of revocation to the Secretary of Camden or by attending
the Camden Meeting and voting in person.
If a quorum is not obtained, the Camden Meeting may be adjourned
by affirmative vote of a majority of the shareholders present, represented in
person and by proxy, for the purpose of obtaining additional proxies or votes in
favor of the proposal. At any subsequent reconvening of the Camden Meeting, all
proxies will be voted in the same manner as such proxies would have been voted
at the original meeting (except for any proxies which have theretofore
effectively been revoked or withdrawn).
Representatives of Kehlenbrink, Lawrence & Pauckner, Camden's
independent certified public accountants, are expected to be present at the
Camden Meeting, will have the opportunity to make a statement if they desire to
do so, and will be available to respond to appropriate questions.
This solicitation is being made on behalf of the Board of
Directors of Camden. The cost of solicitation of proxies from shareholders of
Camden will be paid by Camden. In addition to the solicitation of proxies by use
of mail, the directors, officers or other agents of Camden may solicit proxies
personally or by telephone or other telecommunications media.
TDS's principal executive office is located at 30 North LaSalle
Street, 40th Floor, Chicago, Illinois 60602, and its telephone number is: (312)
630-1900. Camden's principal executive office is located at 170 West Main
Street, Camden, Indiana 46917-0066, and its telephone number is: (219) 686-2111.
-11-
<PAGE>
TDS holds a 49% interest, and Camden holds the remaining 51%
interest, in Camden Cellular Telephone Company. Camden Cellular Telephone
Company is the general partner in Indiana RSA No. 4 Limited Partnership which is
the licensee (the "Licensee") for the Indiana RSA No. 4 FCC cellular wireline
authorization. TDS and Camden also hold limited partnership interests in the
Licensee in the amounts of 13.795% and 13.775%, respectively.
All information contained herein relating to TDS and to Camden
has been furnished by their respective managements.
The mailing of this Proxy Statement-Prospectus to shareholders
of Camden is expected to commence on or about ___________, 1995.
THE MERGER
Set forth below is a brief description of the material features
of the Merger. Such description does not purport to be complete and is qualified
in its entirety by reference to the Merger Agreement, which is attached as Annex
A to this Proxy Statement-Prospectus and is incorporated by reference herein.
Merger Consideration
TDS, Sub and Camden have entered into the Merger Agreement,
which contemplates that Sub will be merged into Camden, with Camden surviving
the Merger as an Indiana corporation and becoming a wholly-owned subsidiary of
TDS, and that each outstanding Camden Share (other than Dissenting Shares as
described herein) will be converted on the Effective Date into that number of
fully paid and nonassessable TDS Common Shares determined by dividing $20,000 by
the Average Closing Price of the TDS Common Shares, provided that if the Average
Closing Price of the TDS Common Shares is equal to or greater than $39.125, then
each Camden Share shall be converted into 511.4286 TDS Common Shares and if the
Average Closing Price is less than $36.00, TDS may, but shall not be required
to, terminate the Merger Agreement and not complete the Merger.
The following table illustrates the application of the formula
described above:
Each Camden Share would be
converted into the following
If the Average Closing Price is Number of TDS Common Shares
$32.00 625.0000
$33.00 606.0606
$34.00 588.2353
$35.00 571.4286
$36.00 555.5556
$36.50 547.9452
$37.00 540.5405
$37.50 533.3333
$38.00 526.3158
$38.50 519.4805
$39.00 512.8205
$39.125 (or more) 511.4286
If TDS elects to complete the Merger at a time when the Average
Closing Price is less than $36.00, the number of TDS Shares will be determined
in accordance with the formula set forth above. See "The Merger - Conversion of
Shares in the Merger."
The term "Average Closing Price" means the arithmetical average
of the closing prices for TDS Common Shares as reported in the American Stock
Exchange Composite Transaction section of The Wall
-12-
<PAGE>
Street Journal for the five trading days ended on the third trading day prior to
the Effective Date of the Merger.
If the Average Closing Price is $32 or more, and if the
shareholders of Camden have duly approved the Merger at the Camden Meeting, then
the Merger may be consummated without any further action or approval by the
shareholders of Camden. However, the Merger Agreement also provides that if the
application of the formula described above would result in each Camden Share
being converted into more than 625 TDS Common Shares (which would result if the
Average Closing Price was less than $32), the Merger will not be consummated
without the affirmative vote of the holders of at least a majority of the
outstanding Camden Shares. Such a vote, if necessary, would be sought at an
additional meeting of the shareholders of Camden to which would be held after
the Camden Meeting now scheduled for October 6, 1995, as described herein. No
such additional meeting will be called or held unless the Average Closing Price
is less than $32 and TDS nevertheless desires to consummate the Merger. If the
Average Closing Price is $32 or more, and if the shareholders of Camden have
approved the Merger at the Camden Meeting, the Merger may be consummated without
any further vote of the shareholders of Camden.
Price Range of TDS Common Shares
The high and low sales prices of the TDS Common Shares on the
American Stock Exchange, as reported by the Dow Jones News Service, were as
follows:
TDS Common Shares
Calendar Period High Low
1993
First Quarter............................. 40.50 33.25
Second Quarter............................ 45.50 37.38
Third Quarter............................. 53.88 43.38
Fourth Quarter............................ 57.00 46.00
1994
First Quarter............................. 51.50 36.75
Second Quarter............................ 42.88 36.00
Third Quarter............................. 47.63 35.50
Fourth Quarter............................ 49.88 39.50
1995
First Quarter............................. 46.38 36.13
Second Quarter............................ 39.38 36.00
Third Quarter (through August 21, 1995)... 41.75 36.38
Background of the Merger
In consecutive meetings during September, October, and November
1994, the Board of Directors of Camden met and reviewed Camden's future as a
small company in an increasingly competitive and technologically changing
telephone business. With the telephone industry rapidly facing an early end to
the local-exchange monopoly franchise, the Camden Board decided to explore a
possible sale of the company.
At the December 7, 1994 Camden Board of Directors meeting, TDS
presented a written proposal to the Camden Board for a merger of Camden with and
into TDS through an exchange of shares. The Camden Board discussed the proposal
with the TDS representatives and recommended numerous changes.
On January 27, 1995 TDS delivered to Camden a Letter Agreement
(the "Letter Agreement") setting forth the material terms pursuant to which TDS
offered to acquire Camden by means of a merger.
-13-
<PAGE>
At the February 24, 1994 Camden Board of Directors meeting, the
Camden Board reviewed an evaluation of potential telephone industry buyers for
Camden that had prepared by Icore, a management consulting firm to the telephone
industry, located in Emmaus, Pennsylvania. The evaluation was favorable to TDS
as a potential purchaser. The Camden Board also met with a representative of
McDonald & Company, a national investment banking firm headquartered in
Cleveland, Ohio and commissioned it to conduct a market evaluation for sale of
Camden.
On Monday, March 6, 1995, the Camden Board, along with Dick N.
Bishop, Camden's counsel, reviewed McDonald & Company's following conclusions:
concurrence with the Icore evaluation of TDS, recommendation against seeking
additional bids for Camden and recommendation of further negotiations with TDS.
On March 6, 1995 the Camden Board met with the TDS and,
following further negotiations, a Letter Agreement was executed which provided
for a merger in which each Camden Share would be converted into 511.4286 TDS
Common Shares. On April 27, 1995 the Board of Directors of Camden approved the
Merger Agreement, and on April 27, 1995, TDS, Sub and Camden executed the
Original Merger Agreement which provided for an $800 per share dividend to be
paid to each Camden Shareholder in addition to the conversion of each Camden
Share into 511.4286 TDS Common Shares.
On the date of the Letter Agreement, the closing price of the
TDS Common Shares on the American Stock Exchange was $44.25 per share. On April
27, 1995, the closing price had declined to $36.750. Such decline followed an
announcement by TDS that one of its wholly-owned subsidiaries was the
successful bidder in eight broad band Personal Communications Services ("PCS")
licenses at an auction conducted by the FCC. TDS currently estimates that
construction, development and introduction of PCS networks and services in its
new markets may involve expenditures of $680 million to $750 million between now
and the year 2000. TDS has already paid approximately $289 million for the eight
licenses. TDS is considering a variety of financing options for these projected
expenditures. No assurance can be given as to the effects of this project or the
results of operations of TDS or the future market price of its Common Stock.
On June 29, 1995, TDS, Sub and Camden executed and delivered the
First Supplemental Agreement to the Original Merger Agreement which, as
described above, provides for the conversion of each Camden Share into a
variable number of TDS Common Shares depending on the Average Closing Price of
the TDS Common Shares. See "- Merger Consideration" above.
On August 10, 1995, TDS, Sub and Camden executed and delivered
the Second Supplemental Agreement to the Original Merger Agreement. The Second
Supplemental Agreement provides that if the Average Closing Price is less than
$32, the Merger will not be consummated without the affirmative vote of the
holders of at least a majority of the outstanding Camden Shares.
See "The Merger - Merger Consideration."
Camden's Reasons for the Merger; Recommendation of Camden's Board of Directors
THE BOARD OF DIRECTORS OF CAMDEN BELIEVES THAT THE MERGER IS IN
THE BEST INTERESTS OF CAMDEN AND ITS SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS TO
ITS SHAREHOLDERS THAT THEY VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY.
In reaching such determination, the Camden Board of Directors
considered, among other things, the Board's knowledge of the management,
business, operations, properties, assets, earnings and prospects of the business
of Camden and of the environment in which it operates, the background of TDS and
its plans regarding the operation of Camden, the lack of liquidity and
restrictions of the Camden Shares, the liquidity and value of the TDS Common
Shares, and the fact that the Merger would allow Camden shareholders to acquire
an equity interest in a larger, more diversified company whose shares are
publicly traded. In addition, the Camden Board of Directors considered the
Aggregate Merger Consideration to Camden Shareholders as well as the $800 per
Camden Share dividend permitted to be declared by the Merger Agreement and
payable to Camden shareholders upon the Effective Date of the Merger to be of
primary significance.
-14-
<PAGE>
TDS's Reasons for the Merger
TDS is acquiring Camden as part of its overall strategy of
acquiring independent telephone companies. TDS believes that the Merger will
enable TDS to expand its capabilities, provide it with the opportunity to serve
additional customers in Indiana, and position it to meet emerging trends within
the telephone industry.
Effective Date of the Merger
If the Merger Agreement is approved by the requisite vote of the
Camden shareholders, and the other conditions to the Merger are satisfied or
waived, the Merger will become effective upon the filing of Articles of Merger
together with the Plan of Merger with the Secretary of State of the State of
Indiana. It is presently contemplated that the Effective Date will occur on or
about October 13, 1995 if all required regulatory approvals are received by such
date or as soon as practicable thereafter following the receipt of all required
regulatory approvals.
Vote Required
Approval of the Merger Agreement requires the affirmative vote
of the holders of a majority (51%) of the outstanding Camden Shares. Each holder
of Camden Shares as of the Camden Record Date is entitled to one vote for each
Camden Share held. On the Camden Record Date, there were 280 Camden Shares
outstanding.
Approval of the Merger Agreement by TDS's shareholders is not
required. The Board of Directors of Sub and TDS, as the sole shareholder of Sub,
have approved the Merger and the Merger Agreement.
Conversion of Shares in the Merger
At the Effective Date, each Camden Share issued and outstanding
immediately prior thereto (other than Camden Shares held by any shareholder who
shall have perfected his or her right to dissent under the IBCL) will be
automatically converted into the right to receive the Merger Consideration, as
further described in "The Merger - Merger Consideration."
Exchange of Certificates
Harris Trust and Savings Bank, Chicago, Illinois, as exchange
agent (the "Exchange Agent"), will provide transmittal forms to the Camden
shareholders to be used in forwarding their certificates for Camden Shares for
surrender and exchange for certificates representing the number of TDS Common
Shares into which their Camden Shares were converted in the Merger and cash for
fractional TDS Common Shares to which such holders otherwise would be entitled.
Until such surrender, certificates representing Camden Shares will be deemed to
represent the number of TDS Common Shares into which such Camden Shares were
converted in the Merger, except that the holders of Camden certificates will not
be entitled to receive dividends or any other distributions from TDS until such
certificates are so surrendered. When such certificates are surrendered, the
holders of TDS certificates issued in the Merger will be paid, without interest,
any dividends or other distributions which may have become payable with respect
to such TDS Common Shares since the Effective Date.
Fractional Shares
No certificates representing fractional shares will be issued by
TDS in respect of TDS Common Shares issued pursuant to the Merger and no TDS
dividend, stock split or interest will relate to any fractional share. No
fractional share interests will entitle the owner thereof to vote or to any
rights of a shareholder of TDS. In lieu of any such fractional shares, each
holder of Camden Shares who otherwise would be entitled to receive fractional
TDS Common Shares in the Merger will receive an amount of cash (without
interest) determined by multiplying (i) the closing sale price of a TDS Common
Share on the American Stock Exchange on the Effective Date, or if the TDS Common
Shares are not traded on such day, such closing sale price on
-15-
<PAGE>
the next preceding day on which such stock was traded on the American Stock
Exchange, by (ii) the fractional share interest to which such holder would
otherwise be entitled.
Representations and Warranties
The Merger Agreement contains various representations and
warranties of the parties thereto. These include representations and warranties:
by Camden as to (i) its organization and capital structure, (ii) its
subsidiaries and investments, (iii) its authority to execute and perform the
Merger Agreement and the lack of conflicts with any other obligation of Camden,
(iv) its financial statements, (v) the absence of certain changes or events
since December 31, 1994, (vi) the availability of its assets and the legality of
their use, (vii) title to property, (viii) undisclosed liabilities, (ix) no
defaults or litigation, except as disclosed, (x) tax liabilities, (xi) patents,
trade names, trademarks and other rights, (xii) real estate, (xiii) contracts,
(xiv) employee agreements and employee relations, (xv) employee benefit plans,
(xvi) permits, (xvii) insurance, (xviii) environmental conditions, (xix) bank
accounts and powers of attorney, (xx) accounts receivable, (xxi) inventories,
(xxii) the accuracy of information provided by Camden for this Proxy
Statement-Prospectus, (xxiii) no obligation to any finder and (xxiv) the lack of
omissions in any disclosures to TDS; by TDS and Sub as to (i) their organization
and capital structure and (ii) their authority to execute and perform the Merger
Agreement and that such execution and performance will not conflict with other
obligations of TDS or Sub; and by TDS as to (i) its Registration Statement and
Prospectus; (ii) the accuracy of information supplied by TDS and Sub for the
Proxy Statement-Prospectus, (iii) the TDS Common Shares and (iv) no obligation
to any finder.
Business of Camden Pending Completion of the Merger
Camden has agreed that, among other things, prior to
consummation of the Merger, unless TDS agrees otherwise, it will (i) refrain
from taking any action which would render any representation or warranty
contained in the Merger Agreement inaccurate in any material respect as of the
Effective Date; (ii) use its best efforts to maintain its business in accordance
with past practices and sound business judgment and to preserve the goodwill of
the suppliers, employees, customers and others having business relations with
it; and (iii) not make any material change in the business or the operations of
Camden, except as described below declare or pay any dividends in cash on the
issued and outstanding capital stock of Camden or make any other distribution of
any kind in respect thereof, purchase or redeem any of the capital stock of
Camden, issue, sell or otherwise distribute any treasury shares or any stock of
Camden to effect any stock split or reclassification of any shares of its
capital stock or grant or commit to grant any option, warrant or other right to
subscribe for or purchase or otherwise acquire any shares of its capital stock
or securities convertible or exchangeable for such shares, effect any amendments
to the Articles of Incorporation or By-laws of Camden, except pursuant to the
Merger Agreement, authorize any director, or authorize or permit any officer or
employee or any attorney, accountant or other representative retained by Camden,
to solicit or encourage any inquiries or the making of any proposal which it is
reasonably expected may lead to any takeover proposal, or enter into or amend
any agreements with or for the benefit of officers, directors or employees of
Camden, amend any employee benefit plan or grant any increases in compensation
except as permitted by the Merger Agreement.
The Merger Agreement provides that if the Camden Special Meeting
is held and the shareholders of Camden duly approve and authorize the Merger,
Camden shall have the right to declare and pay a cash dividend on each Camden
Share equal to $224,000 divided by the total number of Camden Shares outstanding
on the date of payment. There are presently outstanding 280 Camden Shares.
Assuming that that number of Camden Shares is outstanding on the date of such
dividend, the dividend would be equal to $800 per Camden Share.
Camden has also agreed to afford to the officers, employees and
authorized representatives of TDS complete access to the offices, properties,
customers, suppliers, employees and business and financial records of Camden to
the extent TDS shall deem necessary or desirable, and to furnish to TDS or its
authorized representatives such additional information concerning the
operations, properties and business of Camden as shall be reasonably requested,
including all such information as shall be necessary to enable TDS to determine
whether the conditions set forth in the Merger Agreement have been satisfied.
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<PAGE>
Conditions
The respective obligations of TDS, Sub and Camden to effect the
Merger are subject to the satisfaction of certain conditions, including, among
others:
(i) the approval by Camden shareholders of the Merger
Agreement;
(ii) the parties shall have received all governmental
and regulatory approvals and actions necessary to consummate the transactions
contemplated by the Merger Agreement, which are either required to be obtained
prior to the Effective Date by applicable law or regulation or are necessary to
prevent a material adverse change in the assets, liabilities, business,
properties, profits, prospects or condition of Camden;
(iii) no stop order suspending the effectiveness of the
Registration Statement of which this Proxy Statement-Prospectus is a part shall
have been entered by the Commission; and
(iv) the TDS Common Shares to be issued pursuant to the
Merger Agreement shall have been approved for listing upon notice of issuance by
the American Stock Exchange.
In addition, the obligations of TDS and Sub to effect the Merger
are subject to the conditions that:
(i) there shall have been no material breach by Camden
in the performance of any of its covenants and agreements in the Merger
Agreement; each of the representations and warranties of Camden contained in the
Merger Agreement shall be true and correct in all material respects on the
Effective Date as though made on the Effective Date except as affected by
transactions contemplated by the Merger Agreement; and there shall have been
delivered to TDS and Sub a certificate to such effect, dated the Effective Date,
signed on behalf of Camden by its President or one of its Vice Presidents;
(ii) between the date of the Merger Agreement and the
Effective Date, there shall have been (a) no material adverse change in the
assets, liabilities, business, properties, profits, prospects or conditions of
Camden; (b) no material adverse federal or state legislative or regulatory
change affecting the products, services or business of Camden; and (c) no
material damage to the properties and assets of Camden by fire, flood, casualty,
act of God or the public enemy or other cause, regardless of insurance coverage
for such damage; and there shall have been delivered to TDS and Sub a
certificate or certificates to such effect, dated the Effective Date, signed on
behalf of Camden by its President or its Vice President;
(iii) TDS and Sub shall have received from counsel for
Camden, an opinion, dated the Effective Date, in form and substance satisfactory
to TDS and its counsel, to the effect set forth as an exhibit to the Merger
Agreement;
(iv) No action, suit, investigation or proceeding shall
have been instituted or threatened to restrain or prohibit or challenge the
legality or validity of the Merger;
(v) Camden shall have received consents in form and
substance reasonably satisfactory to TDS, to the transactions contemplated by
the Merger Agreement from all appropriate governmental authorities and from the
other parties to all contracts, leases, agreements and permits to which Camden
is a party or by which it is affected and which require such consent prior to
the Effective Date or are necessary to prevent a material adverse change in the
assets, liabilities, business, properties, profits, prospects or condition of
Camden;
(vi) TDS and Sub shall have received comfort letters
from Camden's independent public accountants dated the date this Proxy
Statement-Prospectus was mailed and the Effective Date and addressed to TDS and
Sub, in each case in form and substance reasonably acceptable to TDS and Sub,
covering such matters reasonably requested by them and customarily requested in
transactions of this type; and
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(vii) The holders of not more than 15 Camden Shares
shall have filed the written notice to demand payment contemplated by Section
23-1-44-11 of the IBCL and not voted in favor of the Merger at the Camden
Special Meeting.
The obligations of Camden to effect the Merger are subject to
the conditions that: (i) there shall have been no material breach by TDS or Sub
in their performance of any of their respective covenants and agreements in the
Merger Agreement; each of the representations and warranties of TDS and Sub
contained or referred to in the Merger Agreement shall be true and correct in
all material respects on the Effective Date as though made on the Effective Date
except as affected by transactions contemplated by the Merger Agreement; and
there shall have been delivered to Camden a certificate or certificates to such
effect, dated the Effective Date, signed on behalf of TDS by its President or
one of its Vice Presidents; (ii) Camden shall have received from counsel for TDS
and Sub an opinion, dated the Effective Date, in form and substance satisfactory
to Camden and its counsel to the effect set forth as an exhibit to the Merger
Agreement; (iii) TDS and Sub shall have taken all corporate action necessary to
approve the transactions contemplated by the Merger Agreement and there shall
have been furnished to Camden certified copies of resolutions adopted by the
Boards of Directors of TDS and Sub and by the sole shareholder of Sub, in form
and substance satisfactory to counsel for Camden, in connection with such
transactions.
Amendment; Termination
If the Average Closing Price of the TDS Common Shares is less
than $36, TDS may, but shall not be required to, terminate the Merger Agreement
without incurring any liability to Camden or Camden's shareholders. In addition,
the Merger Agreement may be terminated at any time prior to the Effective Date,
whether before or after approval of the Merger Agreement, by mutual consent of
the Boards of Directors of TDS and Camden, by TDS or Camden if a federal or
state court or agency permanently restrains, enjoins or otherwise prohibits the
Merger by a final and non-appealable order, by TDS or Camden upon any material
breach by the other party of certain of the covenants in the Merger Agreement,
or by TDS or Camden if the shareholders of Camden do not approve the Merger at
the Camden Meeting.
In the event of such termination, all further obligations of the
parties under the Merger Agreement shall terminate without any liability on the
part of any party, except with respect to the treatment of all confidential
information furnished by each party and the payment of certain expenses and
except that nothing in the Merger Agreement shall relieve any party from
liability for its breach of the Merger Agreement.
Operation of Camden Following the Merger; Interests of Certain Persons in the
Merger
TDS has agreed that after the Effective Date it will continue to
operate Camden as an independent local telephone company maintaining the present
Board of Directors, management and employees and the existing business office in
Camden Indiana for at least ten years after the Effective Date (with the
exception of Mr. Jack Ford, as described below). The existing Camden directors,
officers and employees will receive annual compensation, bonuses and benefits no
less than they receive from Camden on the Effective Date. In addition, TDS has
agreed to cause Camden to continue to provide, at Camden's expense, existing
medical benefits for three of the senior directors of Camden and their spouses,
throughout their respective lifetimes.
TDS has also agreed to cause to enter into employment agreements
with Mr. Jack Ford, General Manager of Camden; Mr. J. Robert McCain, Assistant
Manager of Camden; Ms. Brenda Elizelda, Public Affairs/Subscriber Relations
Representative of Camden; and Ms. Pamela Brown, Service Order Coordinator. Mr.
Ford's agreement provides for a term of five years from the Effective Date; the
agreements for Mr. McCain, Ms. Elizelda and Ms. Brown provide for ten year
terms. Generally, these agreements provide for salaries at an annual rate
determined by industry standards for comparable positions. Generally, the
agreements permit the employee to elect to continue to participate in the Camden
employee benefit plans in existence on the Effective Date or to elect to be
covered by benefit plans offered by TDS.
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Indemnification
The Merger Agreement provides for indemnification obligations of
Camden Shareholders and TDS in certain circumstances.
By their approval of the Merger Agreement and their receipt of
the Merger Consideration, the Camden Shareholders jointly and severally have
agreed to indemnify, hold harmless and defend TDS and each
of its officers, directors, employees, affiliates, subsidiaries, successors and
assigns (the "TDS Indemnitees"), against any claim, demand, loss, expense,
obligation or liability, including interest, penalties and reasonable attorneys'
fees (collectively, "Losses") incurred by any TDS Indemnitee relating to,
resulting from or arising out of (a) any breach by Camden or the Camden
Shareholders in the performance of their respective obligations under the Merger
Agreement, (b) the inaccuracy of any of the representations or warranties made
by Camden in the Merger Agreement, in any exhibit or schedule thereto, or in any
other instrument delivered in accordance with the provisions thereof, or (c) any
action, suit, proceeding, assessment or judgment incident to any of the
foregoing.
TDS has agreed to indemnify, hold harmless and defend the Camden
Shareholders, and each of Camden's officers, directors, employees affiliates,
subsidiaries, successors and assigns (the "Camden Indemnitees"), against all
Losses incurred by any of them relating to, resulting from or arising out of (a)
any breach by the TDS or Sub in the performance of their respective obligations
under the Merger Agreement, (b) the inaccuracy of any of the representations
made by TDS or Sub in the Merger Agreement, in any schedule or exhibit thereto,
or in any instrument executed or delivered in accordance with the provisions
thereof, or (c) any action, suit, proceeding, assessment or judgment incident to
any of the foregoing.
Registration and Listing
TDS has registered the TDS Common Shares issuable upon
conversion of the Camden Shares in the Merger pursuant to a filing with the
Commission of a Registration Statement on Form S-4 with respect to, and will
take any actions necessary under the state blue sky or securities laws in
connection with, the issuance of such shares. TDS will use its best efforts to
cause such shares to be approved for listing on the American Stock Exchange,
upon official notice of issuance, at or prior to the Effective Date.
Certain Federal Income Tax Consequences
The following discussion summarizes certain federal income tax
considerations involved in the exchange of Camden Shares for TDS Common Shares
in the Merger. The Merger will constitute either a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code") or a taxable exchange of shares. Accordingly, the following
discussion addresses the tax consequences of the Merger in both circumstances.
Tax-Free Reorganization. If the Merger qualifies as a tax-free
reorganization within the meaning of section 368(a) of the Code, no gain or loss
will be recognized by a holder of Camden Shares upon the exchange of Camden
Shares solely for TDS Common Shares. The aggregate basis of the TDS Common
Shares received in the Merger by a holder of Camden Shares (including any
fractional TDS Common Share for which cash is received) will be the same as the
aggregate basis of Camden Shares surrendered in exchange therefor. The holding
period of the TDS Common Shares received in the Merger by a holder of Camden
Shares (including any fractional TDS Common Share for which cash is received)
will include the holding period of Camden Shares surrendered in exchange
therefor, provided that the holder held Camden Shares as capital assets as of
the Effective Date. A holder of Camden Shares who receives cash in lieu of a
fractional TDS Common Share will be treated as if the holder received the
fractional TDS Common Share and then received cash from TDS in redemption
thereof. The holder will recognize gain or loss equal to the difference between
the amount of cash received and the tax basis allocable to the fractional TDS
Common Share. This gain or loss will be capital gain or loss provided that the
holder held his TDS Common Shares as capital assets as of the Effective Date,
and will be long-term capital gain or loss if the holding period of the TDS
Common Shares, as of the Effective Date, is more than one year.
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Taxable Exchange of Shares. If the Merger constitutes a taxable
exchange of shares, each holder of Camden Shares will recognize gain or loss
equal to the difference between the fair market value of the TDS Common Shares
and/or cash, if applicable, received in the Merger and the holder's basis in the
Camden Shares surrendered in exchange therefor. This gain or loss will be
capital gain or loss provided that the holder held his Camden Shares as capital
assets as of the Effective Date, and will be long-term capital gain or loss if
the holding period of Camden Shares, as of the Effective Date, is more than one
year.
Continuity of Interest Test. Although there are a number of
requirements that must be satisfied in order for the Merger to qualify as a
tax-free reorganization, one significant issue regarding whether the Merger
qualifies as tax-free relates to the continuity of interest test. In order for
this test to be satisfied, the holders of Camden Shares must retain after the
Merger a sufficient continuing interest in Camden through ownership of TDS
Common Shares. Under the interpretation of the continuity of interest test used
by the IRS for the purpose of issuing advance rulings, the test will not be
satisfied unless the holders of Camden Shares prior to the Effective Date
retain, in the aggregate, TDS Common Shares with a value, as of the Effective
Date, equal to at least 50% of the value of all of the Camden Shares as of the
same date. Sales or other dispositions of TDS Common Shares that are part of a
plan of reorganization will be considered in determining whether the continuity
of interest test is met. If the sales or other dispositions of TDS Common Shares
are sufficient to prevent the continuity of interest test from being satisfied,
the Merger will constitute a taxable transaction, with the results described
above.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
HEREIN FOR INFORMATIONAL PURPOSES ONLY AND IS BASED UPON CURRENT LAW AND
INTERPRETATIONS THEREOF. BECAUSE THE TAX CIRCUMSTANCES OF EACH HOLDER OF CAMDEN
SHARES MAY DIFFER, EACH HOLDER OF CAMDEN SHARES IS URGED TO CONSULT HIS OR HER
OWN TAX ADVISOR CONCERNING THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO THE
HOLDER, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND OTHER TAX
LAWS.
Accounting Treatment
The Merger will be accounted for under the purchase method for
accounting and financial reporting purposes.
Regulatory Approvals
The Merger must be approved by the IURC which regulates
providers of telephone service in Indiana. The transfer of control of certain
microwave radio licenses held by Camden to TDS pursuant to the Merger requires
the approval of the Federal Communications Commission. As of June 23, 1995, the
Federal Communications Commission had accepted for filing TDS's application for
this transfer of control.
TDS and Camden are aware of no other governmental or regulatory
approvals required for consummation of the Merger, other than compliance with
applicable securities and "blue sky" laws of Indiana.
Dissenters' Rights
Any holder of record of Camden Shares who follows the procedures
specified in Sections 23-1-44-1 through 23-1-44-20 of the IBCL (the "Appraisal
Provisions") is entitled to receive the "fair value" of such shares in lieu of
the Merger Consideration that such shareholder would otherwise be entitled to
receive pursuant to the Merger Agreement. Reference is made to the Appraisal
Provisions, copies of which are attached to this Proxy Statement-Prospectus as
Annex B, for a complete statement of the appraisal rights of dissenting
shareholders. The following information is qualified in its entirety by
reference to the Appraisal Provisions.
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If a holder of record of Camden Shares elects to exercise such
shareholder's right to an appraisal under the Appraisal Provisions, such
shareholder must satisfy ALL of the following conditions:
(i) such shareholder must deliver a written notice of intent to
demand the fair value of such shareholder's Camden Shares to Camden
prior to the vote with respect to the Merger Agreement;
(ii) such shareholder must not vote in favor of or consent in
writing to the proposal to approve the Merger Agreement. A failure to
vote will satisfy this condition, but voting in favor of or delivering a
proxy in favor of the proposal to approve the Merger Agreement or an
unmarked proxy will constitute a waiver or such shareholder's right to
appraisal and will nullify any written demand for appraisal; and
(iii) not less than 30 nor more than 60 days after receipt of
the notice of procedure for dissenting shareholders from Camden (which
Camden must send to all dissenting shareholders who properly file notice
of intent to assert dissenters' rights) such shareholder must demand
payment of the fair value of his or her Camden Shares (the "Initial
Demand"), certify whether he or she acquired their Camden Shares before
the date the Merger was first announced to the Camden Shareholders and
deposit their Camden Shares with Camden.
Under the Appraisal Provisions, record holders of Camden Shares
are entitled to appraisal rights as described above, and the procedures to
perfect such rights must be carried out by and in the name of such holders of
record. Persons who are beneficial but not record owners of Camden Shares and
who wish to exercise appraisal rights with respect to the Merger must submit to
Camden, at the time of or before the assertion of the right, a written consent
of the record holders of their shares.
After the Effective Date Camden shall remit to each dissenting
shareholder who has complied with the conditions set forth above an amount which
Camden estimates to be the fair value of the Camden Shares held by each
dissenting shareholder. Along with the remittance, Camden shall also send: (i) a
year end balance sheet and statements of income and changes in shareholders'
equity for any fiscal year of Camden ending 16 months or less before the
Effective Date, together with the latest available interim financial statements;
(ii) an estimate by Camden of the fair value of Camden Shares; and (iii) a
statement of the dissenting shareholder's right to demand an additional payment,
as described below. If a dissenting shareholder believes that the fair value of
Camden Shares is greater than the amount remitted by Camden, then, within 30
days after Camden mails the remittance, the dissenting shareholder may give
written notice to Camden of such shareholder's own estimate of the fair value of
Camden Shares, and demand payment of the difference (the "Supplemental Demand").
Within 60 days after receiving the Supplemental Demand, Camden shall either: (i)
pay the dissenting shareholder the amount demanded (or such other amount agreed
to by such shareholder), or (ii) file a petition requesting that the Indiana
state court located in County of Carroll (the "Court") determine the fair value
of the Camden Shares.
The Court may appoint one or more persons as appraisers to
receive evidence and recommend a decision on the question of fair value. Fair
value means the value of Camden Shares immediately before the effectuation of
the Merger, excluding appreciation or depreciation in anticipation of the
Merger, unless such exclusion would be inequitable. Dissenters will be entitled
to judgment for any amount by which the fair value of their shares, plus
interest, is found to exceed the amount previously remitted. Fair value may be
found by the Court to be more, less or the same as the amount offered by Camden
or the amount the shareholder would have received had he or she not dissented
from the Merger.
BUSINESS OF TDS
TDS is a diversified telecommunications service company with
cellular telephone, local telephone and radio paging operations. At June 30,
1995, TDS served approximately 1.7 million customer units in 37 states,
including 550,000 cellular telephones, 416,000 telephone access lines and
738,600 pagers. For the twelve months ended June 30, 1995, cellular operations
provided 48% of TDS' consolidated revenues; telephone operations provided 40%;
and paging operations provided 12%. TDS' business development strategy is to
expand its existing operations through internal growth and acquisitions and to
explore and develop other telecommunications businesses that management believes
will utilize TDS' expertise in customer-based telecommunications services.
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TDS conducts substantially all of its cellular operations
through its 80.9%-owned subsidiary, United States Cellular Corporation (American
Stock Exchange symbol "USM"), which is engaged through subsidiaries and joint
ventures primarily in the development and operation of an the acquisition of
interests in cellular markets. As of June 30, 1995 USM owns, operates, invests
in and has the right to acquire interests in cellular telephone systems
representing approximately 24.8 million population equivalents in 208 markets in
36 states. USM owns a controlling interest in and manages cellular systems
serving 137 markets ("consolidated markets").
TDS conducts substantially all of its telephone operations
through its wholly owned subsidiary, TDS Telecommunications Corporation ("TDS
Telecom"). As of June 30, 1995 TDS Telecom operates 100
telephone companies serving 416,000 access lines in 29 states. TDS Telecom is
expanding through the selective acquisition of local exchange telephone
companies serving rural and suburban areas and by offering additional lines of
telecommunications products and services to existing customers.
TDS conducts substantially all of its radio paging operations
through its 82.4%-owned subsidiary, American Paging, Inc. (American Stock
Exchange symbol "APP"). APP offers radio paging and related services through its
subsidiaries. As of June 30, 1995 APP provides service to 738,600 paging units
through 36 sales and service operating centers in 14 states and the District of
Columbia. APP's service areas cover a total population of approximately 75
million.
TDS was incorporated in Iowa in 1968. TDS' executive offices are
located at 30 North LaSalle Street, Chicago, Illinois 60602. Its telephone
number is 312-630-1900.
INFORMATION WITH RESPECT TO CAMDEN
Business of Camden
Camden Telephone Company, Inc. ("Camden") is an Indiana
corporation organized in 1958 for the purpose of constructing, maintaining and
operating a telephone plant and equipment to provide telephone service to
subscribers within its prescribed service area in the State of Indiana. Camden
currently has four full-time employees. The principal office of Camden is
located at 170 W. Main Street, Camden, Indiana, and its telephone number is
219-686-2111.
Camden provides telephone service to approximately 1600 single
party line customers located in a 150 square mile area surrounding the Town of
Camden in the Counties of Carroll and Cass, Indiana. No statistics are available
as to the population of Camden's service area which is restricted to the
certificates of public convenience and necessity issued by the IURC. The IURC
will allow expansion of the service area by application process, but only in the
event an area has been abandoned or is not served by another telephone company.
Digital switching, recording, equal access and a full array of
custom-calling features are provided to Camden customers using a single
Northern-Telecom DMS-10 digital central office switch installed in 1982.
Camden currently has contracts with long distance telephone
carriers for the transmission of long distance service by Camden to its
customers. Camden does not share in the proceeds of toll charges for long
distance service. Camden charges the subscriber a toll set by the long distance
carrier and remits all of the payment to the carrier. Camden is compensated for
the toll services it provides through access charges to the carriers based on
rates established by the Federal Communications Commission for interstate calls
and by the IURC for Camden's intrastate calls. See "Management's Discussion and
Analysis of Financial Condition and Statement of Operations."
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Camden's contracts with its long distance carriers remain in
effect unless cancelled by either party. If any of these contracts are
cancelled, other long distance carriers are available to provide long distance
service. In the unlikely event of a cancellation of any long distance contract,
no adverse impact upon Camden is anticipated.
Future growth and attendant increased revenues of Camden depend
principally on the future development of the area which it serves. Future growth
and increased indebtedness may also result from upgrades in service and
additional services made possible by advances in technology. See "Management's
Discussion and Analysis of Financial Condition and Statement of Operations."
Camden's policy is to upgrade its plant and equipment as
required and to furnish to its customers technological advancements which are
economical. For example, Camden converted its exchange to digital switching
technology in 1982 and is currently replacing copper transmission cable with
fiber optic cable, which is easier to maintain.
Management believes that the current plant and equipment in use
by Camden are considered modern by accepted telephone industry standards.
Camden's current plant has the capacity to handle 2,500 access lines. As of
December 31, 1994, Camden had 1,598 access lines leaving a growth potential of
902 access lines or an increase of 56% over its current level of service. With
the current level of its plant and equipment, Camden can reasonably expect to
meet its needs for future customer growth.
No material changes in the operation of the business of Camden
are expected from the date of the financial statements of Camden included in
this Proxy-Statement Prospectus.
Property of Camden
Camden operates three telephone exchanges at its headquarters in
Camden, Indiana. The property of Camden consists principally of tangible
property, including telephone lines, central office equipment, telephone
instruments, land and buildings related to telephone operations and motor
vehicles and equipment. Telephone lines include buried cable, aerial cable,
poles and wire. Central office equipment consists of switching equipment,
carrier equipment and related facilities. Telephone instruments and related
equipment are located on the subscribers' premises and include private branch
exchanges. Included in land and buildings is a 2,800 square foot office building
at 170 W. Main Street in Camden, Indiana owned by Camden and maintained as its
headquarters.
The plant and equipment of Camden are maintained in good
operating condition and are suitable and adequate for Camden's operations.
Camden does not lease a significant amount of plant or equipment. Camden
telephone lines are located either on private or public property by virtue of
easements or other arrangements.
In addition to its tangible property, Camden owns a 51% interest
in Camden Cellular Telephone Company. Camden Cellular Telephone Company is the
general partner in Indiana RSA No. 4 Limited Partnership (the "Partnership")
which is the Licensee for the Indiana RSA No. 4 FCC cellular wireline
authorization. Camden also owns a 13.775% limited partnership interest in the
Partnership.
Legal Proceedings of Camden
Camden does not have any material pending or threatened
litigation.
Changes in and Disagreements with Accountants of Camden
There have been no changes in or disagreements with the
independent accountants of Camden during the two most recent fiscal years or any
subsequent interim period.
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Authorized and Outstanding Securities of Camden
The only class of securities of Camden authorized by the
Articles of Incorporation of Camden consists of 560 shares of Capital Stock,
Common, without par value. Camden shareholders do not have the right to vote
their shares cumulatively for the election of directors or other purposes and do
not have preemptive rights to purchase additional securities. On the record date
set for the special meeting there were 280 shares of common stock of Camden
outstanding held by 68 record holders.
Market for Shares and Dividends
There is no public or established private market for Camden
common stock. Camden paid dividends of $800 and $700 per share of common stock,
an aggregate of $224,000 and $196,000, on March 10, 1995 and April 5, 1994,
respectively. Future dividends will be subject to the discretion of the Board of
Directors of Camden and will depend on, among other things, future earnings, the
operating and financial condition, capital requirements and general business
conditions.
Security Ownership of Certain Beneficial Owners
The following table sets forth as of the record date for this
meeting information regarding the persons who beneficially own more than 5% of
the Camden Shares (being the only class of voting securities of Camden), except
for directors, executive officers and management employees of Camden.
Number of Camden Percent of
Name and Address Shares Beneficially Owned Ownership
---------------- ------------------------- -----------
Hanna Appleton 15 5.36%
P.O. Box 123
Camden, IN 46917
Thomas J. Tesh 15 5.36%
Box 86
Caliente, NV 89008
Security Ownership of Directors, Executive Officers and Management Employees
The following table sets forth as of the record date for this
meeting the beneficial ownership of the directors, officers and management
employees of Camden.
Number of
Camden Shares
Position(s) Beneficially Percent
Name and Office(s) Owned of Ownership
----- ------------- -------------- ----------
James Sullivan President and Director 5 1.78%
J. Robert McCain Vice President, Assistant
General Manager and Director 15 5.36%
Joann Johnson Secretary, Treasurer
and Director 5 1.78%
Lloyd Yerkes Director 5 1.78%
Joe B. Sullivan Director 5 1.78%
Jack Ford General Manager 0 0%
- -----
All directors, officers and
management employees,
as a group (a total of 6) 35 12.50%
No director, officer or management employee of Camden owns more
than 5.36% of its outstanding voting shares.
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Directors, Executive Officers and Management Employees
The directors, officers and management employees of Camden, the
positions and offices, the ages of such persons, and their term of office as of
the Camden Record Date are set forth below:
Date First Date Date First
Elected As Term Appointed as
Name: Age Director Expires Officer or Manager
----- ---------- ------- -----------------
James Sullivan 56 4/1986 4/1997 1995
J. Robert McCain 47 4/1986 4/1996 1971
Joann Johnson 70 12/1994 4/1998 1995
Lloyd Yerkes 79 4/1958 4/1996 1985
Joe B. Sullivan 76 5/1967 4/1997 --
Jack Ford 60 -- -- 1977
James Sullivan - President and Director
Graduated from Indiana College of Mortuary Science in 1958. Employed by
Fisher's Funeral Home, Logansport, Indiana from 1958 to 1960. Served in United
States Coast Guard from 1960 to 1964. Owner of Sullivan Funeral Home, Inc.,
Camden, Indiana from 1964 to 1988. Employed by Hildebrand Industries,
Batesville, Indiana from 1988 to present. Received a Bachelor Degree in Business
Management in 1994.
J. Robert McCain - Vice President, Assistant General Manager and Director
Served in the U.S. Army from 1968 - 1971. Employed by Camden Telephone
Company, Inc. from 1971 to present.
JoAnn Johnson - Secretary, Treasurer and Director
Co-Owner of E.E. Johnson Plumbing Contractors Co., Camden, Indiana from
1946 to 1985. Currently retired.
Lloyd Yerkes - Director
President of Yerkes Trucking Company, Inc., Camden, Indiana from 1948 to
1988. Currently retired.
Joe B. Sullivan - Director
Co-owner of Yeager & Sullivan, Inc. from 1952 to 1977. Currently
retired.
Jack Ford - General Manager
Served in the U.S. Army from 1953 to 1956. Employed by Western Electric
Corporation, Los Angeles, California from 1956 to 1959. Employed by I.T.T.
Corporation as Senior Customer Service Engineer, Milan, Tennessee from 1959 to
1977. Employed by Camden Telephone Company, Inc. Camden, Indiana as General
Manager from 1977 to present.
Compensation of Directors, Officers and Management Employees
The following table sets forth the cash compensation paid by
Camden for the fiscal year ended December 31, 1994, to James Sullivan, Camden's
Chief Executive Officer.
Name Cash Compensation Paid
----- ----------------------
James Sullivan $4,400
Benefit Plans
The Camden Telephone Company VIP Qualified Plan and Trust (the
"Qualified Plan") is a defined contribution plan designed to provide retirement
benefits for eligible employees of Camden. Under the Qualified Plan, Camden
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makes annual contributions based upon actuarial assumptions and a formula
designed to fund a target pension benefit for each participant commencing
generally upon the participant's attainment of retirement age. Individual
accounts are maintained for all participants in the Qualified Plan. A
participant's retirement benefit is based solely on amounts contributed to his
account, as well as any income, expenses, gains and losses attributable to his
account, plus his allocated share of forfeitures of other participants'
accounts.
Certain Relationships and Related Transactions
Camden has no material business relationships with, did not
engage in any material transactions with and had no material indebtedness due
from, any of its directors and officers or any member of their families or their
affiliates.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion is presented to assist in assessing the
changes in financial condition and performance of Camden Telephone Company, Inc.
("Camden") over the three most recent fiscal years and the six month periods
ended June 30, 1995 and 1994. The following information should be read in
conjunction with the financial statements and related notes and other detailed
information regarding Camden included elsewhere in this Proxy
Statement-Prospectus.
Camden is a supplier of telephone services to subscribers within
its prescribed service area. Its income is derived from subscriber fees charged
to its customers and from access charges imposed pursuant to contracts with
long-distance ("interexchange") telephone carriers. Both the fees charged to
Camden's customers for its services and the access charges to interexchange
carriers are based upon rates established by the Indiana Utility Regulatory
Commission ("IURC") for intrastate services and the Federal Communications
Commission ("FCC") for interstate services. Generally, these fees are a function
of a prescribed return on Camden's investment in plant and equipment and its
cost of services provided to its subscribers.
The audited financial statements for the years ended December
31, 1994, 1993, and 1992, and the unaudited financial statements for the periods
ended June 30, 1995 and 1994, included in this Proxy Statement-Prospectus are
stated to comply with the financial reporting requirements mandated by generally
accepted accounting principles reflecting practices appropriate to the telephone
industry. Camden uses a fiscal year ending December 31.
Net income totaled $449,372, $349,614 and $367,832 for the three
fiscal years ended 1994, 1993 and 1992, respectively, reflecting an increase of
28.5% in 1994 and an decrease of 5.0% in 1993. Net income totaled $234,421 and
$214,627 for the six month periods ended June 30, 1995 and 1994, respectively.
See the analysis set forth in "Operating Revenues," "Operating Expenses" and
"Other Items" listed below.
Earnings per share were $1,605 in 1994, $1,249 in 1993 and
$1,314 in 1992 based upon 280 shares outstanding in each year. Earnings per
share for the six month periods ended June 30, 1995 and 1994 were $837 and $767,
respectively, based upon 280 shares outstanding in each period.
OPERATING REVENUES
In the years ended December 31, 1994, 1993, and 1992, operating
revenues totaled $1,220,607, $1,084,179 and $1,044,977, respectively. This
equates to increases of 12.6% in 1994 and 3.8% in 1993. Operating revenues for
the six month periods ended June 30, 1995 and 1994 totaled $600,503 and
$554,106, respectively, reflecting an increase of 8.4%.
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Local network service revenues are derived from providing local
telephone exchange service within Camden's franchise area. Local network service
revenues increased $5,534 (2.2%) and $6,945 (2.8%) in 1994 and 1993,
respectively.
Network access service revenues result from charges assessed to
interexchange network to transmit long-distance communications ("toll calls").
Such revenues are based upon the allocation of operating expenses and telephone
plant investment to interstate and intrastate jurisdictions under cost
separation procedures established by the FCC. Revenues are designed to cover
expenses and provide a rate of return on plant investment. Charges to
interexchange carriers for interstate network usage are based on tariffs filed
with the FCC by the National Exchange Carriers Association ("NECA"), a service
organization formed after the AT&T divestiture for the purpose of administering
collection and distribution of revenues between its member local exchange
carriers and the interexchange carriers. Charges to interexchange carriers for
intrastate network usage are based on tariffs established by state regulatory
agencies. The interstate portion of these revenues is initially received based
on estimates of expenses, plant investment and rates of return for the
settlement period (usually a calendar year). The intrastate portion of these
revenues is received based on approved tariffs and is influenced by changes in
traffic levels as measured by minutes of use.
Network access service revenues increased $118,759 (16.8%) in
1994 and $44,628 (6.8%) in 1993. The increase in 1994 resulted primarily from an
increase in message volume. The increase in 1993 was mainly due to a switched
access rate increase.
Billing and collection revenues increased $8,154 (7.8%) in 1994
and decreased $1,373 (1.3%) in 1993. The increase in 1994 was due to an increase
in message volume.
Local network services revenues increased $5,659 (4.6%) in the
six months ended June 30, 1995. Network access revenues increased $36,682
(10.1%). Network access revenues for the six month period ending June 30, 1994,
were reduced by $13,541 for charges related to prior period excess earnings. The
remaining network access increase of $23,141 is due mainly to an increase in
message volume. Billing and collection revenues increased by $4,198 (7.7%) for
the six months ended June 30, 1995.
The operating revenue of Camden will not be impacted if the
pending Merger with Sub is not consummated.
OPERATING EXPENSES
Operating expenses totaled $584,072, $577,996 and $552,276 for
the years ended 1994, 1993 and 1992, respectively. This equates to increases of
1.1% in 1994 and 4.7% in 1993. Operating expenses for the six month periods
ended June 30, 1995 and 1994 totaled $312,856 and $250,316, respectively. This
25.0% increase resulted primarily from additional plant repairs, additional wage
expense, expenditures on meetings, and a consultant report for management.
Plant specific operations expenses increased $1,561 (1.5%) in
1994 and $11,501 (12.0%) in 1993. The 12.0% increase in 1993 related mainly to
increased repair costs of central office switching and transmission facilities.
Plant nonspecific operations expenses did not change in 1994 and
increased $1,860 (3.5%) in 1993.
Depreciation and amortization decreased $18,593 (11.9%) in 1994
and increased $3,145 (2.1%) in 1993. The 11.9% decrease in 1994 was primarily
due to reduced depreciation from assets that were fully depreciated.
-27-
<PAGE>
Customer operations expense increased $9,050 (11.8%) in 1994 and
$5,236 (7.3%) in 1993. The 11.8% increase in 1994 was mainly due to an increase
in the cost of call completion services and labor costs to provide customer
service while the 7.3% increase in 1993 was primarily due to the increased costs
of customer service.
Corporate operations expense increased $14,092 (7.7%) in 1994
and $3,978 (2.2%) in 1993. The 7.7% increase in 1994 was primarily due to the
costs of billing additional interexchange carriers.
Operating taxes consist of federal and state income taxes as
well as property taxes. Total operating taxes increased $56,320 (29.9%) in 1994
and $18,281 (10.8%) in 1993. The 29.9% increase in 1994 was primarily
attributable to the $63,155 (58.3%) increase in federal income taxes related to
the increase in operating income. The 1993 increase was attributable mainly to
the adjustment of deferred taxes when the Company adopted FASB Statement 109,
"Accounting for Income Taxes".
The operating expenses of Camden will not be impacted if the
pending merger with Sub is not consummated.
OTHER ITEMS
Interest income totaled $46,370, $59,200 and $74,124 in 1994,
1993 and 1992, respectively, resulting in decreases of 21.7% in 1994 and 20.1%
in 1993. Interest income has steadily decreased over the past two years
primarily because of decreases in interest rates after reinvestment of funds.
Partnership income was $69,566, $62,678 and $89,680 in 1994,
1993 and 1992, respectively, an increase of 11.0% in 1994 and a decrease of
30.1% in 1993. Partnership income for the six month periods ended June 30, 1995
and 1994 totaled $68,875 and $30,994, respectively, reflecting an increase of
122%. Partnership income is recognized when it is distributed by the
partnership. Partnership distributions vary according to the cash needs of the
partnership. These distributions do not necessarily correspond to income at the
partnership level.
Federal and state income taxes - nonoperating generally reflect
the changes in the level of pretax nonoperating income.
Interest expense totaled $33,699, $59,604 and $67,854 in 1994,
1993 and 1992, respectively, resulting in decreases of 43.5% in 1994 and 12.2%
in 1993. This reduction in interest expense relates to the reduction in
long-term debt in each of the years.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents, temporary investments and government
securities were $1,063,264, $1,266,310 and $927,068 as of December 31, 1994,
1993 and 1992, respectively. This represents a 14.7% increase from December 31,
1992 to December 31, 1994.
Cash flows from operating activities were $663,381 in 1994,
$478,004 in 1993 and $514,804 in 1992. The 38.8% increase in cash flows from
operating activities in 1994 primarily results from the increase in net income
and accounts payable offset by the reduction in depreciation and deferred income
taxes. The 7.1% decrease in 1993 was primarily due to the reduction in net
income and the change in working capital.
Cash flows from investing activities were $356,063 in 1994 and
$49,881 in 1993. Cash flows used in investing activities was $90,166 in 1992.
The increase in 1994 was due primarily from the maturity of U.S. Government
securities offset by the purchase of plant and equipment and municipal bonds.
The increase in 1993 reflects the excess of proceeds from the maturity of
temporary cash investments and U.S. Government securities over the purchases of
these investments and other investments.
-28-
<PAGE>
Cash flows used in financing activities were $788,655 in 1994,
$550,562 in 1993 and $230,980 in 1992. The primary reasons for the increases in
each year relate to the changes in principal payments on long term debt and
dividend payments.
In 1995 capital expenditures are expected to be approximately
$125,000. The money is to be used for an upgrade of central office equipment and
repair of outside plant cable. It is expected that internally generated funds
will be used to finance these improvements.
It is expected that internally generated funds will be adequate
to meet current and future operating needs of Camden. However, while cash flows
generated from operations are expected to be sufficient to meet the future
operating needs of Camden, future capital expenditures may require additional
borrowing. The specific means of obtaining the financing and its resulting
impact on the financial position and earnings capacity of Camden have not been
determined.
Inflation and changing prices did not have a material effect on
Camden's financial position or earnings during the three years ended December
31, 1994.
Management of Camden believes that its liquidity and capital
operating resources are presently adequate for its anticipated needs and will
not be materially impacted if the pending merger with Sub is not consummated.
Material Changes in Financial Condition from December 31, 1994 to June 30, 1995
Subsequent to the original issuance of Camden's financial
statements for the year ended December 31, 1994, Camden discovered that in 1994
excess billings to interexchange carriers had caused
1994 revenues to be overstated by $125,260. The adjustment to revenues reduced
reported net income and shareholders' equity by $76,267.
There have been no other material changes in the financial
condition of Camden from December 31, 1994 to June 30, 1995 nor are any material
changes anticipated for the remainder of 1995.
DESCRIPTION OF CAMDEN SHARES
The only class of capital stock of Camden authorized by the
Articles of Incorporation of Camden, as amended, consists of Camden Shares. The
Articles of Incorporation of Camden authorized 560 Camden Shares without par
value. There were 280 Camden Shares issued and outstanding on the Camden Record
Date.
Holders of Camden Shares are entitled to one vote for each
Camden Share held on all matters submitted to a vote of shareholders. Pursuant
to the Articles of Incorporation of Camden, in the election of directors,
shareholders are not permitted to cumulate their votes. All issued and
outstanding Camden Shares are fully paid and non-assessable.
Pursuant to Section 23-1-28-3 of the IBCL, the Board of
Directors of Camden may not make a distribution to its shareholders if, after
giving effect to such distribution (a) Camden would not be able to pay its debts
as they become due in the ordinary course of business or (b) its total assets
would be less than its total liabilities.
Upon liquidation of Camden, the holders of Camden Shares are
entitled to share ratably in the distribution of all assets remaining after
provision for the creditors of Camden.
DESCRIPTION OF TDS SECURITIES
The authorized capital stock of TDS consists of 100,000,000 TDS
Common Shares, $1.00 par value, 25,000,000 Series A Common Shares, $1.00 par
value ("Series A Common Shares"), and 5,000,000 shares of Preferred Stock,
-29-
<PAGE>
without par value ("Preferred Stock"). As of June 30, 1995, 50,898,032 TDS
Common Shares (excluding 484,012 Common Shares held by a subsidiary of TDS),
6,879,661 TDS Series A Common Shares and 453,452 TDS Preferred Shares were
outstanding and 31,431 TDS Common Shares were issuable in connection with
acquisitions.
Voting Trust
Over 90% of TDS's outstanding Series A Common Shares are held in
a voting trust which expires on June 30, 2009. The voting trust was created to
facilitate the long-standing relationships among the trustees' certificate
holders. By virtue of the number of shares held by them, the voting trustees
have the power to elect 75% of the Directors. The trustees of the voting trust
are LeRoy T. Carlson, Jr., a director and the President of TDS, Walter C.D.
Carlson, a director of TDS, Letitia G.
Carlson, Melanie J. Heald and Donald C. Nebergall, a director of TDS.
Preferred Stock
The Board of Directors of TDS is authorized by the Articles of
Incorporation of TDS to issue Preferred Stock from time to time in series and to
establish as to each series the designation and number of shares to be issued,
the dividend rate, the redemption price and terms, if any, the amount payable
upon voluntary or involuntary dissolution of TDS, sinking fund provisions, if
any, voting rights, if any, and the terms of conversion into TDS Common Shares,
if provided for. As of June 30, 1995, an aggregate of 453,452 shares of
Preferred Stock of TDS were outstanding, all of which were issued in connection
with acquisitions.
Voting Rights
With respect to the election of directors, the holders of TDS
Common Shares, and the holders of Preferred Stock issued before October 31, 1981
(an aggregate of 11,476 shares), voting as a class, are entitled to elect 25% of
the Board of Directors of TDS, rounded up to the nearest whole number. The
holders of Series A Common Shares, and the holders of Preferred Stock issued
after October 31, 1981 (an aggregate of 441,976 shares), voting as a class, are
entitled to elect the remaining members of the Board of Directors of TDS.
Furthermore, the Articles of Incorporation provide for the Board of Directors to
be divided into three classes. Each class is elected for a three-year term. The
Board of Directors currently consists of eleven directors. Accordingly, the
holders of TDS Common Shares, and the holders of Preferred Stock issued before
October 31, 1981, are entitled to elect three directors.
The holders of TDS Common Shares and the outstanding Preferred
Stock are entitled to one vote per share and the holders of Series A Common
Shares are entitled to ten votes per share. The holders of TDS Common Shares,
Series A Common Shares and Preferred Stock vote as a single class, except with
respect to the election of directors as discussed above and with respect to
certain amendments to the Articles of Incorporation (e.g., amendments
prejudicial to the holders of a class), as to which the Iowa Business
Corporation Act grants class voting rights.
If the number of Series A Common Shares issued and outstanding
at any time falls below 500,000 (because of the conversion of Series A Common
Shares or otherwise), the holders of Series A Common Shares would lose the right
to vote as a separate class (with the holders of Preferred Stock issued after
October 31, 1981) in the election of approximately 75% of the directors, and
thereafter the holders of Series A Common Shares (with ten votes per share)
would vote with the holders of TDS Common Shares and Preferred Stock as a single
class in the election of directors. Management of TDS believes it is unlikely
that the number of outstanding Series A Common Shares will fall below 500,000,
because more than 6,000,000 Series A Common Shares are held in the voting trust
described above, and the trustees of the voting trust have indicated that they
have no present intention of converting Series A Common Shares into TDS Common
Shares. However, if the number of outstanding Series A Common Shares falls below
500,000 with the consequences described above, then the TDS Common Shares listed
on the American Stock Exchange may be delisted because the holders of such
shares would not have the right, voting as a separate class, to elect
approximately 25% of the Board of Directors.
-30-
<PAGE>
Dividend Rights and Restrictions
Subject to the satisfaction of all Preferred Stock dividend
preference and redemption provisions, holders of TDS Common Shares are entitled
to receive such dividends as may be declared from time to time by the Board of
Directors. Unless the same, or greater, dividends, on a per share basis, are
declared and paid at the same time on the TDS Common Shares, no dividends may be
declared or paid on the Series A Common Shares. As of June 30, 1995, the annual
preferred dividend requirements on all outstanding Preferred Stock aggregated
$2,536,000.
In the case of stock dividends, the Board of Directors is
authorized to permit both the holders of TDS Common Shares and Series A Common
Shares to elect to receive cash in lieu of stock.
Under TDS's loan agreements, at December 31, 1994, all of TDS's
consolidated retained earnings were available for the payment of dividends on
TDS Common Shares and Series A Common Shares.
Conversion Rights
The TDS Common Shares have no conversion rights. The Series A
Common Shares are convertible, on a share-for-share basis, into TDS Common
Shares. An aggregate of 287,886 shares of Preferred Stock were convertible into
992,257 TDS Common Shares as of June 30, 1995.
Other Rights
The TDS Common Shares and Series A Common Shares have no
redemption or sinking fund provisions. An aggregate of 158,086 shares of
Preferred Stock at June 30, 1995 had mandatory redemption features. An aggregate
of 295,366 shares of Preferred Stock were redeemable at the option of TDS as of
June 30, 1995.
Upon liquidation, holders of TDS Common Shares and Series A
Common Shares are entitled to receive a pro rata share of all assets available
to shareholders after payment to holders of the shares of Preferred Stock of
$100 per share (or, in the aggregate, $45,355,660 as of June 30, 1995), plus a
sum equal to the amount of all accumulated and unpaid dividends thereon at the
dividend rate fixed for each series of Cumulative Preferred Stock by the Board
of Directors. At June 30, 1995, there were no unpaid or accumulated dividends
payable on the shares of Preferred Stock.
The holders of Series A Common Shares have a preemptive right to
purchase any additional Series A Common Shares sold for cash, including treasury
shares. Holders of TDS Common Shares and Preferred Stock have no preemptive
rights.
General
All issued and outstanding TDS Common Shares and Series A Common
Shares and shares of Preferred Stock are fully paid and nonassessable, and all
TDS Common Shares offered hereby will be fully paid and nonassessable when
issued.
The Transfer Agent and Registrar for the TDS Common Shares and
Series A Common Shares is Harris Trust and Savings Bank, Chicago, Illinois. TDS
transfers its Preferred Stock on its own books.
TDS has and will continue to distribute annual reports to its
shareholders which will contain its audited financial statements.
COMPARATIVE RIGHTS OF TDS SHAREHOLDERS AND CAMDEN SHAREHOLDERS
If the Merger is consummated, shareholders of Camden, an Indiana
corporation, will become shareholders of TDS, an Iowa corporation, and their
rights will be governed by the Iowa Business Corporation Act instead of the
IBCL, and by the Articles of Incorporation of TDS instead of the Articles of
-31-
<PAGE>
Incorporation of Camden, which differ in many respects. In addition to the
matters described above under "Description of Camden Shares" and "Description of
TDS Securities," there are other differences between the rights of shareholders
in TDS, and those of shareholders in Camden, certain of which are described
below:
Preferred Stock
No dividends may be paid on the TDS Common Shares until all
dividends due on Preferred Stock have been paid. In addition, the rights of
holders of TDS Common Shares upon liquidation of TDS are subordinate to the
rights of preferred shareholders. Camden has no shares of capital stock with any
dividend, liquidation or other preference.
Limitation of Director Liability
As permitted by Iowa law, the Articles of Incorporation of TDS
includes a provision limiting or eliminating under certain circumstances
directors' liability for monetary damages for breach of the duty of care. There
is no similar provision in the Articles of Incorporation of Camden.
The above does not present an exhaustive listing of all such
differences and certain differences may exist which may be of significance to
particular shareholders. Any such shareholder should refer to the respective
Articles of Incorporation and state corporation statutes, which are available in
the offices of Camden.
LEGAL MATTERS
The validity of the TDS Common Shares offered hereby will be
passed upon for TDS by Sidley & Austin, Chicago, Illinois. Walter C.D. Carlson,
Michael G. Hron and William S. DeCarlo, a Director, Secretary and Assistant
Secretary, respectively, of TDS, are members of that law firm. Mr. Carlson is
also a trustee of a voting trust which controls TDS.
EXPERTS
TDS
The audited consolidated financial statements and schedules of
TDS incorporated by reference in this Proxy Statement-Prospectus have been
audited by Arthur Andersen LLP., independent public accountants, as indicated in
their reports incorporated by reference herein. The combined financial
statements of the Los Angeles SMSA Limited Partnership, the
Nashville/Clarksville MSA Limited Partnership and the Baton Rouge MSA Limited
Partnership incorporated by reference in this Proxy Statement-Prospectus have
been reviewed for compilation by Arthur Andersen LLP., as indicated in their
report incorporated by reference herein. Reference is made to this report which
includes an explanatory paragraph with respect to uncertainties discussed in
Note 7 of the Notes to Unaudited Combined Financial Statements. The reports of
other independent accountants on the underlying financial statements which have
been combined are incorporated by reference herein. The financial statements and
schedules referred to above have been incorporated by reference in reliance upon
the authority of such firms as experts in accounting and auditing in giving said
reports.
Camden
The balance sheets of Camden Telephone Company, Inc. as of
December 31, 1994 and 1993 and the statements of income, changes in
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1994 have been audited by Kehlenbrink, Lawrence & Pauckner,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of such firm as
experts in accounting and auditing.
-32-
<PAGE>
INDEX TO CAMDEN FINANCIAL STATEMENTS
Interim Unaudited Statements:
Balance Sheets as of June 30, 1995 and December 31, 1994..................F-2
Statements of Income for the six month periods ended
June 30, 1995 and 1994.........................................F-4
Statements of Changes in Shareholders' Equity for the six
month periods ended June 30, 1995 and 1994.....................F-5
Statements of Cash Flows for the six month periods ended
June 30, 1995 and 1994.........................................F-6
Notes to Financial Statements.............................................F-7
Annual Audited Statements:
Independent Auditor's Report..............................................F-8
Balance Sheets as of December 31, 1994 and 1993...........................F-9
Statements of Income for the years ended December 31, 1994,
1993 and 1992 ................................................F-10
Statements of Changes in Shareholders' Equity for
the years ended December 31, 1994, 1993 and 1992..............F-12
Statements of Cash Flows for the years ended
December 31, 1994, 1993 and 1992..............................F-13
Notes to Financial Statements............................................F-14
F-1
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
BALANCE SHEETS
(UNAUDITED)
ASSETS June 30, December 31,
1995 1994
----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 946,348 $ 849,552
Temporary cash investments - at cost --- 213,712
Telecommunications accounts receivable 83,467 127,643
Income tax refund 92,181 ---
Interest receivable 3,854 7,164
Material and supplies 12,551 12,155
Prepayments 7,090 6,024
Deferred income tax 3,757 3,757
----- -----
Total current assets $ 1,149,248 $ 1,220,007
--------- ---------
NONCURRENT ASSETS
Leased equipment, net of accumulated
depreciation of $28,843 and $26,130
respectively $ 12,776 $ 15,914
Investments, at cost 261,837 200,000
Investments, at fair value --- 48,880
Other investments 286,348 286,348
Unamortized debt issuance expense 72 101
--------- ---------
$ 561,033 $ 551,243
--------- ---------
TELECOMMUNICATIONS PLANT
Telecommunications plant in service $ 2,813,917 $ 2,899,377
Less - Accumulated depreciation 1,637,212 1,748,242
--------- ---------
$ 1,176,705 $ 1,151,135
--------- ---------
Total Assets $ 2,886,986 $ 2,922,385
========= =========
See selected information following these
financial statements.
F-2
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
BALANCE SHEETS
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY June 30, December 31,
1995 1994
CURRENT LIABILITIES ------------ ------------
Current maturities on long-term debt -
REA notes $ 109,684 $ 112,009
Accounts payable 229,388 136,628
Customer deposits 2,300 2,200
Income tax payable --- 81,498
Other accrued taxes 22,957 22,929
Other current liabilities 11,492 14,549
--------- ---------
Total current liabilities $ 375,821 $ 369,813
--------- ---------
LONG-TERM DEBT
REA Notes $ 266,816 $ 320,395
--------- ---------
DEFERRED CREDITS
Unamortized investment tax credits $ 80,790 $ 85,940
Deferred income taxes 271,364 271,364
--------- ---------
$ 352,154 $ 357,304
--------- ---------
STOCKHOLDERS' EQUITY
Capital stock, common, without par
value; 560 shares authorized, 280
shares issued and outstanding $ 38,016 $ 38,016
Retained earnings 1,854,179 1,843,758
Net unrealized loss on marketable
securities --- (6,901)
--------- ---------
$ 1,892,195 $ 1,874,873
--------- ---------
Total Liabilities and
Stockholders' Equity $ 2,886,986 $ 2,922,385
========= =========
See selected information following these
financial statements.
F-3
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
STATEMENTS OF INCOME
(UNAUDITED)
For The Six Months Ended
June 30, June 30,
1995 1994
------------ ------------
OPERATING REVENUES
Local network services $ 129,665 $ 124,006
Network access services 400,026 363,344
Billing and collection revenues 58,654 54,456
Miscellaneous revenues 12,158 11,343
Uncollectible revenues --- 957
-------------- --------------
Total operating revenues $ 600,503 $ 554,106
-------------- --------------
OPERATING EXPENSES
Plant specific operations $ 63,493 $ 45,741
Plant nonspecific operations 29,531 24,453
Depreciation and amortization 66,911 61,577
Customer operations 45,578 37,702
Corporate operations 107,343 80,843
-------------- --------------
Total operating expenses $ 312,856 $ 250,316
-------------- --------------
OPERATING TAXES
Federal income tax $ 76,874 $ 78,661
State income taxes 18,951 21,177
Property taxes 12,480 10,560
-------------- --------------
Total operating taxes $ 108,305 $ 110,398
-------------- --------------
Net operating income $ 179,342 $ 193,392
OTHER INCOME AND DEDUCTIONS
Interest income 23,382 24,076
Nonregulated income 13,452 14,750
Partnership income 68,875 30,994
Federal and state income taxes -
Nonoperating (41,346) (27,309)
-------------- --------------
Income before interest expense $ 243,705 $ 235,903
-------------- --------------
INTEREST AND RELATED ITEMS
Interest on long term debt $ 9,256 $ 21,248
Other interest 28 28
-------------- --------------
Total interest and related items $ 9,284 $ 21,276
-------------- --------------
NET INCOME $ 234,421 $ 214,627
============== ==============
See selected information following these
financial statements.
F-4
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
Net Unrealized
Common Loss On Retained
Stock Marketable Securities Earnings
------------ --------------------- --------
Balance, December 31, 1993 $ 38,016 $ -0- $ 1,590,386
Net income 214,627
Dividends paid (196,000)
Balance, June 30, 1994 $ 38,016 $ -0- $ 1,609,013
=========== =========== ===========
Balance, December 31, 1994 $ 38,016 $ (6,901) $ 1,843,758
Net income 234,421
Dividends paid, $800 per share (224,000)
Decrease in unrealized loss
on marketable securities 6,901
----------- ---------- ----------
Balance, June 30, 1995 $ 38,016 $ -0- $ 1,854,179
=========== =========== ===========
See selected information following these
financial statements.
F-5
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For The Six Months Ended
June 30, June 30,
1995 1994
----------- ----------
OPERATING ACTIVITIES
Net income $ 234,421 $ 214,627
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 70,720 65,750
Investment tax credits (5,150) (5,191)
Changes in operating assets and liabilities:
Accounts receivable 44,176 (46,636)
Other current assets (90,333) (1,162)
Accounts payable 92,760 95,729
Other current liabilities (84,427) (36,747)
-------- --------
NET CASH PROVIDED FROM
OPERATING ACTIVITIES $ 262,167 $ 286,370
----------- ---------
INVESTING ACTIVITIES
Additions to plant and equipment,
net of salvage $ (93,123) $ (6,394)
Maturity of U.S. Government securities --- 447,547
Purchase of municipal bonds --- (200,000)
Purchase of municipal bond fund (6,056) (49,650)
Maturity of Certificates of Deposit 213,712 ---
---------- ---------
NET CASH PROVIDED FROM
INVESTING ACTIVITIES $ 114,533 $ 191,503
----------- ---------
FINANCING ACTIVITIES
Principal payments on long term debt $ (55,904) (341,523)
Dividends paid (224,000) (196,000)
---------- --------
NET CASH USED IN FINANCING ACTIVITIES $ (279,904) $ (537,523)
---------- ----------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS $ 96,796 $ (59,650)
---------- ----------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD $ 849,552 $ 618,763
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 946,348 $ 559,113
========== ==========
See selected information following these
financial statements.
F-6
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
SELECTED INFORMATION-SUBSTANTIALLY ALL
DISCLOSURES REQUIRED BY GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES ARE NOT INCLUDED
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and Article 10 of Regulation S-X. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of the management of Camden
Telephone Company, Inc. (the Company), all adjustments considered necessary for
a fair presentation have been included. Operating results for the six month
period ended June 30, 1995, are not necessarily indicative of the results that
may be expected for the year ended December 31, 1995. For further information,
refer to the annual December 31, 1994, financial statements and notes thereto.
NOTE 2 - PROPOSED MERGER
On April 27, 1995, the Board of Directors of Camden Telephone Company, Inc. met
and approved a merger agreement ("Merger Agreement") with Telephone and Data
Systems, Inc. ("TDS") and TDS-Camden Acquisition Corp., a wholly owned
subsidiary of TDS ("Sub"). The Merger Agreement, executed on April 27, 1995, by
TDS, Sub and Camden Telephone Company, Inc., was amended by both the First
Supplemental Agreement dated June 29, 1995 and the Second Supplemental Agreement
dated August 10, 1995. An affirmative vote of the holders of a majority of the
outstanding shares of the Company's stock is required to approve the Merger
Agreement, as amended. In addition, the merger is subject to approval by the
Indiana Utility Regulatory Commission and the Federal Communications Commission.
The Merger Agreement, as amended, includes certain other closing conditions
precedent to consummation of the transaction.
F-7
<PAGE>
To the Board of Directors
Camden Telephone Company, Inc.
Independent Auditor's Report
We have audited the accompanying balance sheets of Camden Telephone Company,
Inc. as of December 31, 1994 and 1993, and the related statements of income,
changes in shareholders' equity, and cash flows for the three years in the
period ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
and the Governmental Auditing Standards, issued by the Comptroller General of
the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Camden Telephone Company, Inc.
as of December 31, 1994 and 1993, and the results of its operations and its cash
flows for the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles.
As discussed in Footnote 10, the financial statements have been restated to
adjust for excess billings previously included in the 1994 financial report.
KEHLENBRINK, LAWRENCE & PAUCKNER
Indianapolis, Indiana
January 11, 1995
F-8
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
BALANCE SHEETS
ASSETS December 31, December 31,
1994 1993
------------ -------------
CURRENT ASSETS
Cash and cash equivalents - Notes 1 and 2 $ 849,552 $ 618,763
Temporary cash investments - at cost 213,712 200,000
U.S. Government securities - Note 3 --- 447,547
Telecommunications accounts receivable -
Note 2 127,643 92,702
Interest receivable 7,164 13,435
Material and supplies - Note 1 12,155 7,296
Prepayments 6,024 5,666
Deferred income tax 3,757 3,459
---------- ----------
Total current assets $ 1,220,007 $ 1,388,868
---------- ----------
NONCURRENT ASSETS
Leased equipment, net of accumulated
depreciation of $26,130 and $27,916,
respectively - Note 1 $ 15,914 $ 20,725
Bank certificates of deposit, at cost --- 205,828
Investments, at cost - Note 3 200,000 ---
Investments, at fair value - Note 3 48,880 ---
Other investments - Notes 1 and 4 286,348 286,348
Unamortized debt issuance expense 101 157
Deferred retirements - Note 1 --- 3,823
---------- ----------
$ 551,243 $ 516,881
---------- ----------
TELECOMMUNICATIONS PLANT - Notes 1 and 6
Telecommunications plant in service $ 2,899,377 $ 2,895,341
Less - Accumulated depreciation 1,748,242 1,635,626
---------- ----------
$ 1,151,135 $ 1,259,715
---------- ----------
Total Assets $ 2,922,385 $ 3,165,464
========== ==========
The accompanying notes are in integral part of these
financial statements.
F-9
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY December 31, December 31,
1994 1993
------------- ------------
CURRENT LIABILITIES
Current maturities on long-term debt -
REA notes - Note 5 $ 112,009 $ 83,500
Accounts payable 136,628 17,142
Customer deposits 2,200 2,700
Income tax payable - Note 9 81,498 39,733
Other accrued taxes 22,929 21,101
Other current liabilities 14,549 18,934
---------- ----------
Total current liabilities $ 369,813 $ 183,110
---------- ----------
LONG-TERM DEBT
REA Notes - Note 5 $ 320,395 $ 941,559
---------- ----------
DEFERRED CREDITS
Unamortized investment tax credits -
Note 1 $ 85,940 $ 96,322
Deferred income taxes - Notes 1 and 9 271,364 316,071
---------- ----------
$ 357,304 $ 412,393
---------- ----------
STOCKHOLDERS' EQUITY - Note 8
Capital stock, common, without par
value; 560 shares authorized, 280
shares issued and outstanding $ 38,016 $ 38,016
Retained earnings 1,843,758 1,590,386
Net unrealized loss on marketable
securities - Note 3 (6,901) ---
---------- ----------
$ 1,874,873 $ 1,628,402
---------- ----------
Total Liabilities and
Stockholders' Equity $ 2,922,385 $ 3,165,464
========== ==========
The accompanying notes are in integral part of these
financial statements.
F-10
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
STATEMENTS OF INCOME
For The Years Ended
December 31, December 31, December 31,
1994 1993 1992
----------- ----------- -----------
OPERATING REVENUES - NOTE 1
Local network service $ 259,712 $ 254,178 $ 247,233
Network access services 824,484 705,725 661,097
Billing and collection revenues 113,174 105,020 106,393
Miscellaneous revenues 22,316 21,129 28,415
Uncollectible revenues 921 (1,873) 1,839
---------- ---------- ----------
Total operating revenues $ 1,220,607 $ 1,084,179 $ 1,044,977
========== ========== ==========
OPERATING EXPENSES
Plant specific operations $ 108,977 $ 107,416 $ 95,915
Plant nonspecific operations 54,524 54,558 52,698
Depreciation and amortization 137,475 156,068 152,923
Customer operations 85,932 76,882 71,646
Corporate operations 197,164 183,072 179,094
---------- ---------- ----------
Total operating expenses $ 584,072 $ 577,996 $ 552,276
---------- ---------- ----------
OPERATING TAXES - NOTES 1 and 9
Federal income tax $ 171,423 $ 108,268 $ 113,092
State income taxes 48,138 60,678 33,726
Property taxes 24,987 19,282 23,129
---------- ---------- ----------
Total operating taxes $ 244,548 $ 188,228 $ 169,947
---------- ---------- ----------
Net operating income $ 391,987 $ 317,955 $ 322,754
OTHER INCOME AND DEDUCTIONS
Interest income 46,370 59,200 74,124
Nonregulated income 27,444 28,012 21,674
Partnership income - Note 4 69,566 62,678 89,680
Federal and state income taxes -
Nonoperating - Note 9 (52,296) (58,627) (72,546)
---------- ---------- ----------
Income before interest
expense $ 483,071 $ 409,218 $ 435,686
---------- ---------- ----------
INTEREST AND RELATED ITEMS
Interest on long term
debt - Note 5 $ 33,642 $ 59,547 $ 67,797
Other interest 57 57 57
---------- ---------- ----------
Total interest and
related items $ 33,699 $ 59,604 $ 67,854
---------- ---------- ----------
NET INCOME $ 449,372 $ 349,614 $ 367,832
========== ========== ==========
EARNINGS PER SHARE $ 1,604.90 $ 1,248.62 $ 1,313.69
========== ========== ==========
The accompanying notes are in integral part of these
financial statements.
F-11
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Net Unrealized
Loss On
Common Marketable Retained
Stock Securities Earnings
--------- -------------- -----------
Balance, December 31, 1991 $ 38,016 $ -0- $ 1,222,940
Net Income 367,832
Dividends paid (168,000)
-------- ---------- ----------
Balance, December 31, 1992 $ 38,016 $ -0- $ 1,422,772
Net income 349,614
Dividends paid - $650 per share (182,000)
-------- ---------- ----------
Balance, December 31, 1993 $ 38,016 $ -0- $ 1,590,386
Net income 449,372
Dividends paid, $700 per share (196,000)
Cumulative effect of accounting
change, net unrealized loss on
marketable securities - Note 3 (6,901)
-------- ---------- ----------
Balance, December 31, 1994 $ 38,016 $ (6,901) $ 1,843,758
======== ========== ==========
The accompanying notes are in integral part of these
financial statements.
F-12
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
STATEMENTS OF CASH FLOWS
For The Years Ended
December 31, December 31, December 31,
1994 1993 1992
------------ ------------ -----------
OPERATING ACTIVITIES
Net income $ 449,372 $ 349,614 $367,832
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 145,089 164,418 161,583
Deferred income taxes (45,005) (11,935) (3,397)
Investment tax credits (10,382) (10,467) (10,607)
Changes in operating assets
and liabilities:
Accounts receivable (34,941) 13,660 (21,685)
Other current assets 1,054 543 3,628
Accounts payable 119,486 9,972 (8,408)
Other current liabilities 38,708 (37,801) 25,858
---------- ---------- ----------
NET CASH PROVIDED FROM
OPERATING ACTIVITIES $ 663,381 $ 478,004 $ 514,804
---------- ---------- ----------
INVESTING ACTIVITIES
Additions to plant and equipment,
net of salvage $ (27,819) $ (30,483) $ (22,454)
Purchase of temporary cash investments (7,884) (7,337) (312,697)
Maturity of temporary cash investments 200,000 84,976 279,070
Purchase of U.S. Government securities -- (797,275) --
Maturity of U.S. Government securities 447,547 800,000 251,615
Purchase of municipal bonds (200,000) -- --
Purchase of municipal bond fund (55,781) -- --
Investment in limited partnership -- -- (275,500)
Investment in Camden Cellular Telephone
Company, Inc. -- -- (10,200)
---------- ---------- ----------
NET CASH PROVIDED FROM
INVESTING ACTIVITIES $ 356,063 $ 49,881 $ (90,166)
---------- ---------- ----------
FINANCING ACTIVITIES
Principal payments on long term debt $ (592,655) $ (368,562) $ (62,980)
Dividends paid (196,000) (182,000) (168,000)
---------- ---------- ----------
NET CASH USED IN
FINANCING ACTIVITIES $ (788,655) $ (550,562) $ (230,980)
---------- ---------- ----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ 230,789 $ (22,677) $ 193,658
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 618,763 641,440 447,782
---------- ---------- ----------
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 849,552 $ 618,763 $ 641,440
========== ========== ==========
The accompanying notes are in integral part of these
financial statements.
F-13
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the Company conform to generally accepted accounting
principles and reflect practices appropriate to the telephone industry. The
accounting records of the Company are maintained in accordance with the uniform
system of accounts prescribed by the Federal Communications Commission.
Telephone plant is stated at original cost and includes expenditures for items
which substantially increase the useful lives of the property, buildings and
equipment. Renewals and betterments of units of property are charged to
telephone plant in service. The original cost of depreciable property retired,
together with removal cost less any salvage realized is charged to accumulated
depreciation. No gain or loss is recognized in connection with ordinary
retirements of depreciable property. Maintenance, repairs and minor renewals are
expensed as incurred.
Depreciation on telephone plant for financial statement purposes is computed by
the use of the straight-line method which is estimated to allocate the cost of
depreciable plant equally over its estimated service life. The annual composite
rate was 4.6% in 1994, 5.1% in 1993 and 5.2% in 1992. For income tax purposes,
depreciation is computed by the use of accelerated methods.
Deferred taxes are provided on temporary differences arising from assets and
liabilities whose bases are different for financial reporting and income tax
purposes, primarily due to depreciable assets, property taxes and recognition of
partnership income.
Investment tax credits are deferred and amortized over the estimated average
useful lives of the telephone plant.
All local and access revenues are recognized in the period in which they are
earned regardless of the period in which they are billed.
Materials and supplies are valued at cost.
Investments which are not readily marketable are valued at cost.
Debt issuance expense is being amortized over the life of the respective debt
issue on a straight-line basis.
F-14
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Retirements of telephone plant which have not reached its estimated service life
have been deferred for financial reporting purposes and are being amortized over
a five year period. For income tax purposes, the plant was expensed in the year
retired.
For purpose of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents. Income taxes and interest paid were $285,479 and $38,467 in
1994, $228,840 and $62,560 in 1993 and $204,337 and $68,142 in 1992,
respectively.
Earnings per share have been calculated by dividing net income by the weighted
average number of shares outstanding during each year. The weighted average
shares outstanding were 280 for all years.
NOTE 2 - CONCENTRATIONS OF CREDIT RISK
The Company's business activity consists of providing local telephone service to
customers residing in north central Indiana and connecting various long distance
telephone carriers to said customers. Receivables from long distance carriers as
of December 31, 1994 and 1993 were unsecured and totaled $118,782 and $70,930,
respectively.
The Company maintains cash balances at several banks. Accounts at each
institution are insured by the Federal Deposit Insurance Corporation up to
$100,000. The Company's bank deposits are $568,791 in excess of the amount
insured.
NOTE 3 - INVESTMENTS IN MARKETABLE SECURITIES
In 1994, the Company adopted the provisions of SFAS 115 - Accounting for Certain
Investments in Debt and Equity Securities. Under the provisions of SFAS 115, all
securities classified as available-for-sale are reported at fair value. The
unrealized gain or loss on these securities is reported as a separate component
of stockholders' equity. Investments which are expected to be held until
maturity are reported at cost. A summary of the investments follows:
Fair Unrealized
Value Cost Gain(Loss)
----------- ----------- ----------
Investments held to maturity - 1994
Municipal bonds maturing 1-5 years $ 193,556 $ 200,000 $ (6,444)
=========== ============ ==========
Investments held to maturity - 1993
U.S. Government obligations maturing
within 1 year $ 447,872 $ 447,547 $ 325
=========== ============ ==========
Investments available for sale - 1994
Municipal bond fund $ 48,880 $ 55,781 $ (6,901)
=========== ============ ==========
Stockholders' equity for 1994 includes an unrealized holding loss on
available-for-sale securities of $6,901.
F-15
<PAGE>
NOTE 4 - INDIANA RSA NUMBER 4 LIMITED PARTNERSHIP
The Company has a 13.775% ownership interest as a limited partner in the Indiana
RSA Number 4 Limited Partnership. The Company owns a 51% interest in Camden
Cellular Telephone Company, Inc. which owns 1% of the partnership. The financial
transactions of the subsidiary have not been consolidated in this financial
statement due to the immaterial effect they would have on the financial
statements.
The partnership provides cellular service to a rural area with several smaller
cities in northern Indiana. At December 31, 1994, the Company had made $275,638
in capital contributions to the partnership and paid a total of $10,710 for
Camden Cellular Telephone Company, Inc. stock. The fair market value of the
partnership interest may differ significantly from the carrying value, however,
a reasonable estimate of fair market value could not be made without incurring
excessive costs. Partnership income is recognized when it is distributed by the
partnership.
NOTE 5 - ASSETS PLEDGED AND LONG TERM DEBT
Long-term debt consists of mortgage notes payable to the United States of
America, pursuant to the Rural Electrification Act of 1936, and are secured by
all assets of the company. The terms of the mortgage notes are as follows:
1994 1993
---------- ----------
2% mortgage notes, payable in quarterly
installments of $6,702, including
principal and interest, through maturity.
Notes mature at various dates from
1995 through 1997. $ 52,621 $ 78,060
5% mortgage notes, payable in quarterly
installments of $26,079, including
principal and interest, through maturity.
Notes mature in 1999 379,783 946,999
------- -------
$ 432,404 $ 1,025,059
Less current maturities 112,009 83,500
------- ------
$ 320,395 $ 941,559
======= =======
Maturities on long-term debt for years subsequent to December 31, 1994 are as
follows:
1995 112,009
1996 107,359
1997 107,322
1998 99,907
1999 5,807
F-16
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 6 - TELEPHONE PLANT IN SERVICE
The major classes of property are detailed below:
1994 1993
----------- -----------
Land $ 5,691 $ 5,691
Buildings 180,217 180,216
Telephone plant 2,527,158 2,515,433
Furniture and office equipment 66,113 66,113
Vehicles and other work equipment 120,198 127,888
---------- ---------
Total telephone plant
in service $2,899,377 $2,895,341
========== ==========
Depreciation for the years ended December 31, 1994, 1993 and 1992 was $133,651,
$148,421, and $153,879 respectively.
NOTE 7 - PENSION
The Company sponsors a defined contribution pension plan that covers all
employees. The plan is a target benefit plan. Contributions to the plan are
designed to provide a certain benefit at normal retirement age. The amount of
retirement expense for the years ended December 31, 1994, 1993, and 1992 was
$14,313, $14,178, and $12,098, respectively.
NOTE 8 - CAPITAL STOCK AND RETAINED EARNINGS
The long-term debt agreements contain restrictions regarding the payment of
dividends or redemption of capital stock. The restrictions are related in
general to the Company's adjusted net worth and assets (as defined). At December
31, 1993 the Company qualified as to adjusted net worth and assets; therefore a
dividend of $700 per share totaling $196,000 was approved and paid during 1994.
NOTE 9 - INCOME TAXES
During 1993, the Company adopted FASB Statement 109, "Accounting for Income
Taxes", which changed the criteria for measuring the provision for income taxes
and recognizing deferred tax assets and liabilities on the balance sheet. The
change did not have a material effect on net income, but had the effect of
increasing state income tax expense and decreasing federal tax expense for 1993.
The Company's net deferred tax asset and liability consists of:
1994 1993
------------ -----------
Current
Deferred tax asset $ 3,757 $ 3,459
========== ==========
Noncurrent
Deferred tax asset $ 58,205 $ 19,960
Deferred tax liabilities (329,569) (336,031)
---------- ----------
Net deferred tax liability $ (271,364) $ (316,071)
========== ==========
F-17
<PAGE>
CAMDEN TELEPHONE COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
The components of income tax expense from operations were as follows:
1994 1993 1992
-------------------- ------------------- -------------------
Federal State Federal State Federal State
Current $ 259,965 $ 67,279 $ 200,033 $ 49,943 $ 184,730 $ 48,637
Deferred (36,222) (8,783) (34,282) 22,347 (2,855) (542)
Deferred ITC (10,382) -- (10,468) -- (10,606) --
--------- -------- --------- -------- --------- --------
TOTAL $ 213,361 $ 58,496 $ 155,283 $ 72,290 $ 171,269 $ 48,095
========= ========= ========= ======== ========= ========
NOTE 9 - INCOME TAXES - CONTINUED
The effective income tax rate differs from the federal statutory rate of 34% due
to the following factors:
1994 1993 1992
------- ------- ------
Statuary federal income tax rate 34.0% 34.0% 34.0%
State income taxes net of federal
tax benefit 5.4 8.3 5.4
Amortization of investment credit (1.4) (1.8) (1.8)
Other differences (.3) (1.1) (.2)
---- ---- ----
Effective tax rate 37.7% 39.4% 37.4%
==== ==== ====
NOTE 10 - SUBSEQUENT CHANGES TO FINANCIAL STATEMENTS
Subsequent to the original issuance of the financial statements, the company
discovered that in 1994 excess billings to interexchange carriers had caused
revenues to be overstated by $125,260. The adjustment to revenues reduced
reported net income and shareholders' equity by $76,267.
F-18
<PAGE>
<PAGE>
ANNEX A
AGREEMENT AND PLAN OF MERGER
Dated as of April 27, 1995
By and Among
Telephone and Data Systems, Inc.,
TDS - Camden Acquisition Corp.
and
Camden Telephone Company, Inc.
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. THE MERGER.................................................. 1
1.1 The Merger.................................................. 1
1.2 Effective Date of the Merger................................ 2
1.3 Articles of Incorporation; By-laws; Directors and
Officers.................................................. 2
1.4 Conversion of Shares........................................ 2
1.5 TDS to Make Certificates Available.......................... 3
1.6 Dividends; Transfer Taxes................................... 3
1.7 Dissenting Shares........................................... 4
1.8 Non-Dilution................................................ 4
1.9 Closing of Camden Transfer Books............................ 4
1.10 Closing..................................................... 5
1.11 No Fractional Securities.................................... 5
SECTION 2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF CAMDEN........ 5
2.1 Organization and Capital Structure of Camden................ 5
2.2 Subsidiaries and Investments................................ 6
2.3 Authority; No Conflict...................................... 6
2.4 Financial Statements........................................ 7
2.5 Absence of Certain Changes or Events Since Balance
Sheet Date ............................................... 7
2.6 Availability of Assets and Legality of Use.................. 8
2.7 Title to Property........................................... 8
2.8 Undisclosed Liabilities..................................... 8
2.9 No Default or Litigation.................................... 8
2.10 Patents, Trade Names, Trademarks and Other Rights........... 9
2.11 Real Estate................................................. 10
2.12 Contracts................................................... 10
2.13 Employee Agreements; Employee Relations..................... 11
2.14 Taxes....................................................... 13
2.15 Employee Benefit Plans...................................... 13
2.16 Permits..................................................... 14
2.17 Insurance................................................... 14
2.18 Environmental Conditions.................................... 14
2.19 Bank Accounts; Powers of Attorney........................... 15
2.20 Accounts Receivable......................................... 15
2.21 Inventories................................................. 15
2.22 Information in Proxy Statement.............................. 15
2.23 Exchange Act; Investment Company Act........................ 16
2.24 No Finder................................................... 16
2.25 No Omissions................................................ 16
SECTION 3. REPRESENTATIONS AND WARRANTIES OF TDS....................... 16
3.1 Organization and Capital Structure of TDS................... 16
3.2 Authority; No Conflict...................................... 17
3.3 Financial Statements........................................ 17
3.4 TDS Registration Statement and Prospectus................... 18
-i-
<PAGE>
Page
3.5 Information in Proxy Statement.............................. 18
3.6 TDS Common Shares........................................... 19
3.7 No Finder................................................... 19
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SUB....................... 19
4.1 Organization and Capital Structure of Sub................... 19
4.2 Authority................................................... 19
SECTION 5. ACTION PRIOR TO EFFECTIVE DATE.............................. 20
5.1 Regulatory Approvals........................................ 20
5.2 Investigation of Business of Camden by TDS.................. 20
5.3 Preserve Accuracy of Representations and
Warranties............................................... 21
5.4 Maintain Business of Camden as a Going Concern.............. 21
5.5 No Material Change in the Business of Camden................ 21
5.6 Necessary Consents and Governmental Approvals............... 22
5.7 No Public Announcement...................................... 22
5.8 Camden Shareholders' Meeting................................ 22
5.9 The Merger Registration Statement........................... 23
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF TDS AND SUB.......... 23
6.1 No Misrepresentation or Breach of Covenants and
Warranties................................................ 23
6.2 No Changes or Destruction of Property....................... 23
6.3 Opinion of Counsel for Camden............................... 23
6.4 No Restraint or Litigation.................................. 23
6.5 Necessary Governmental Approvals............................ 24
6.6 Necessary Consents.......................................... 24
6.7 Approval by Camden Shareholders............................. 24
6.8 No Stop Orders.............................................. 24
6.9 Listing of TDS Common Shares................................ 24
6.10 Approval by TDS Board of Directors.......................... 24
6.11 Dissenting Shares........................................... 24
6.12 Comfort Letter.............................................. 24
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF CAMDEN................ 25
7.1 No Misrepresentation or Breach of Covenants and
Warranties................................................ 25
7.2 Opinions of Counsel for TDS and Sub......................... 25
7.3 Corporate Action............................................ 25
7.4 No Restraint or Litigation.................................. 25
7.5 Necessary Governmental Approvals............................ 25
7.6 Approval by Camden Shareholders............................. 26
7.7 No Stop Orders.............................................. 26
7.8 Listing of TDS Common Shares................................ 26
SECTION 8. OPERATION OF CAMDEN FOLLOWING THE MERGER.................... 26
8.1 Operation of Camden; Officers and Directors of
Camden.................................................... 26
-ii-
<PAGE>
Page
SECTION 9. INDEMNIFICATION............................................. 27
9.1 By the Camden Shareholders to TDS........................... 27
9.2 By TDS to the Camden Shareholders........................... 27
SECTION 10. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS...... 28
SECTION 11. TAXES...................................................... 28
11.1 Liability For Certain Taxes................................ 28
11.2 Tax Returns................................................ 28
11.3 Assistance and Cooperation................................. 28
11.4 Adjustment to Merger Consideration......................... 29
11.5 Survival of Obligations.................................... 29
11.6 Definitions................................................ 29
SECTION 12. NOTICES.................................................... 30
SECTION 13. CONFIDENTIAL NATURE OF INFORMATION......................... 30
SECTION 14. TERMINATION AND ABANDONMENT................................ 30
SECTION 15. OTHER PROVISIONS........................................... 31
15.1 Expenses................................................... 31
15.2 Governing Law.............................................. 31
15.3 Partial Invalidity......................................... 31
15.4 Successors and Assigns; Parties in Interest................ 31
15.5 Execution in Counterparts.................................. 31
15.6 Titles and Headings........................................ 31
15.7 Schedules and Exhibits..................................... 31
15.8 Entire Agreement; Amendments and Waivers................... 32
EXHIBITS
Exhibit A - Plan of Merger
Exhibit B - Form of Opinion of Counsel to Camden
Exhibit C - Form of Opinion of Counsel to TDS
Exhibit D - Form of Opinion of Special Indiana Counsel to TDS and Sub
Exhibit E-1 - Consulting Agreement with Jack Ford
Exhibit E-2 - Employment Agreement with Jack Ford
Exhibit E-3 - Employment Agreement with J. Robert McCain
Exhibit E-4 - Employment Agreement with Brenda Elizelda
Exhibit E-5 - Employment Agreement with Pamela Brown
-iii-
<PAGE>
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made
and entered into as of this 27th day of April, 1995 by and among Telephone and
Data Systems, Inc., an Iowa corporation ("TDS"), TDS-Camden Acquisition Corp.,
an Indiana corporation and indirect, wholly-owned subsidiary of TDS ("Sub"), and
Camden Telephone Company, Inc., an Indiana corporation ("Camden") (Sub and
Camden being sometimes referred to hereinafter together as the "Constituent
Corporations").
WHEREAS, TDS and Camden, through its Board of Directors, have
entered into a Letter Agreement dated January 27, 1995 (executed by Camden on
March 6, 1995) providing for the acquisition of Camden by TDS by means of the
merger of Sub with and into Camden (the "Merger");
WHEREAS, the Board of Directors of each of TDS, Sub and Camden
have approved the Merger of Camden and Sub upon the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, TDS and Camden intend that the Merger constitute a
reorganization under Sections 368(a)(1)(A) and 368(a)(2)(E) of the Internal
Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the
agreements, representations and warranties hereinafter set forth, TDS, Sub and
Camden hereby agree as follows:
SECTION 1. THE MERGER
1.1 The Merger. On the Effective Date, Sub shall be merged
with and into Camden and the separate existence of Sub shall thereupon cease.
The name of Camden, as the surviving corporation in the Merger (the "Surviving
Corporation"), shall by virtue of the Merger remain "Camden Telephone Company,
Inc." The Merger shall have the effect set forth in Section 23-1-40 of the
Indiana Business Corporation Law; the Surviving Corporation shall possess all
assets and property of every description, and every interest in the assets and
property, wherever located, and the rights, privileges, immunities, powers,
franchises, and authority, of a public as well as of a private nature, of each
of the Constituent Corporations, and all obligations belonging to or due to each
of the Constituent Corporations, all of which shall be vested in the Surviving
Corporation without further act or deed; title to any real estate or any
interest in the real estate vested in either Constituent Corporation shall not
revert or in any way be impaired by reason of the Merger; the Surviving
Corporation shall thenceforth be liable for all the pre-existing obligations of
each Constituent Corporation, including liability to dissenting shareholders.
The parties intend the Merger to qualify as a
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reorganization pursuant to Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code.
1.2 Effective Date of the Merger. As soon as is practicable
after the satisfaction or waiver of the conditions hereinafter set forth, the
parties hereto will cause the Merger to become effective by filing, with the
Secretary of State of the State of Indiana, Articles of Merger, including the
Plan of Merger substantially in the form of Exhibit A hereto, as required by,
and executed in accordance with, Section 24- 1-40 of the Indiana Business
Corporation Law. When used in this Agreement, the term "Effective Date" shall
mean the date and time at which such Articles of Merger are so filed.
1.3 Articles of Incorporation; By-laws; Directors and
Officers. The Articles of Incorporation of Camden, as amended, shall be the
Articles of Incorporation of the Surviving Corporation after the Effective Date
unless and until amended in accordance with its terms and as provided by law.
The By-laws of Camden as in effect on the Effective Date shall be the By-laws of
the Surviving Corporation unless and until amended in accordance with its terms
or the Articles of Incorporation of the Surviving Corporation and as provided by
the Indiana Business Corporation Law. The initial Board of Directors of the
Surviving Corporation shall consist of the directors of Camden immediately prior
to the Effective Date, who shall serve until their respective successors are
duly elected and qualified. The officers of Camden immediately prior to the
Effective Date shall be the initial officers of the Surviving Corporation until
their respective successors are duly elected and qualified.
1.4 Conversion of Shares. As of the Effective Date, by virtue
of the Merger and without any action on the part of any of TDS, Sub, Camden, the
Surviving Corporation or any holder of any of the following securities:
(a) Each share of Camden common stock, without par value,
(each, a "Camden Share") held in the treasury of Camden shall be cancelled;
(b) Each issued and outstanding share of capital stock of Sub
shall be converted into 100 validly issued, fully paid and nonassessable shares
of common stock, without par value, of the Surviving Corporation; and
(c) Subject to Section 1.11, each Camden Share issued and
outstanding immediately prior to the Effective Date (other than Dissenting
Shares (as defined in Section 1.7)) shall be converted into the right to
receive, from Sub, the number of Common Shares, par value $1.00 per share, of
TDS (the "TDS Common Shares") equal to the quotient obtained by dividing One
Hundred Forty-Three Thousand, Two Hundred (143,200) TDS Common Shares (such
number of TDS Common Shares is herein referred to as the "Aggregate Merger
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Consideration") by the total number of Camden Shares issued and outstanding
immediately prior to the Effective Date. (The number of TDS Common Shares into
which each Camden Share is converted is hereinafter referred to as the "Merger
Consideration.")
1.5 TDS to Make Certificates Available. As soon as practicable
after the Effective Date, TDS shall make available, and, subject to Sections 1.6
and 1.11, each holder of a certificate which prior to the Effective Date
represented Camden Shares will be entitled to receive, following surrender to
TDS of one or more such certificates for cancellation, certificates representing
the number of TDS Common Shares into which such Camden Shares were converted in
the Merger. TDS Common Shares into which Camden Shares shall be converted in the
Merger shall be deemed to have been issued at the Effective Date, and
certificates which prior to the Effective Date represented Camden Shares shall,
at and after the Effective Date, be deemed to represent only the right to
receive, upon surrender of such certificates, the certificates contemplated by
the preceding sentence.
1.6 Dividends; Transfer Taxes. No dividends or other
distributions that are declared after the Effective Date on TDS Common Shares or
are payable to the holders of record thereof after the Effective Date will be
paid to persons entitled by reason of the Merger to receive certificates
representing TDS Common Shares until such persons surrender their certificates
which prior to the Effective Date represented Camden Shares. Upon such
surrender, there shall be paid to the person in whose name the certificates
representing such TDS Common Shares shall be issued, any dividends or other
distributions which shall have become payable with respect to such TDS Common
Shares between the Effective Date and the time of such surrender. In no event
shall the person entitled to receive
such dividends or other distributions be entitled to receive interest on such
dividends or other distributions. If any cash or certificate representing TDS
Common Shares is to be paid to or issued in a name other than that in which the
certificate surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and that the person
requesting such exchange shall pay to TDS any transfer or other Taxes required
by reason of the issuance of the certificate for such TDS Common Shares in a
name other than that of the registered holder of the certificate surrendered, or
shall establish to the satisfaction of TDS that any such Tax has been paid or is
not applicable. Notwithstanding the foregoing, neither TDS nor any party hereto
shall be liable to a holder of Camden Shares for any TDS Common Shares or
dividends or other distributions thereon delivered to a public official pursuant
to applicable escheat or unclaimed property laws. No fees or other charges shall
be assessed or imposed by TDS or any person acting for or on behalf of TDS, upon
holders of Camden Shares who surrender such shares for exchange in connection
with this Agreement.
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1.7 Dissenting Shares. The provisions of Sections 1.4 through
1.6 inclusive shall not apply to Camden Shares (the "Dissenting Shares") held by
Camden Shareholders who do not vote such Camden Shares in favor of the approval
and adoption of this Agreement and the Merger and who deliver a written notice
to Camden in the manner required by Section 23-1-44 of the Indiana Business
Corporation Law, stating the intention to demand payment of the fair value of
such Camden Shares if the Merger is effected, and if such holders of Camden
Shares take all other action required in the manner provided in Section 23- 1-44
of the Indiana Business Corporation Law. Such holders shall be entitled to
payment for such Camden Shares in accordance with the provisions of Section
23-1-44 of the Indiana Business Corporation Law if applicable.
1.8 Non-Dilution. In the event that, at any time after the
date hereof and prior to the Effective Date, TDS shall effect (a) a dividend
upon TDS Common Shares payable in TDS Common Shares or in the common stock,
preferred stock or other securities of TDS or any affiliated corporation, (b) a
split or combination of outstanding TDS Common Shares into a greater or smaller
number of TDS Common Shares, or (c) any reorganization or reclassification of
TDS Common Shares, or any liquidation, or any consolidation or merger with
another corporation, or the sale of all or substantially all of its assets to
another person (collectively, any "Organic Change"), in such a way that holders
of outstanding TDS Common Shares shall be entitled to receive (either directly,
or upon subsequent liquidation) cash, stock, securities, or other property with
respect to or in exchange for such TDS Common Shares, then, as a condition of
such dividend, split, combination, or Organic Change, lawful and adequate
provisions shall be made whereby the Camden shareholders immediately prior to
the Effective Date, other than holders of Dissenting Shares ("Camden
Shareholders") shall be entitled, under the same terms otherwise applicable to
their receipt of the TDS Common Shares in the Merger, to become entitled to
receive on the Effective Date, in lieu of or in addition to the TDS Common
Shares to which such Camden Shareholders are entitled immediately prior to such
dividend, split, combination or Organic Change, such cash, stock, securities, or
other property which Camden Shareholders would have owned or been entitled to
receive if the Camden Shareholders had owned the TDS Common Shares, immediately
prior to the happening of such event or the record date therefor, and in any
such case appropriate provisions shall also be made with respect to Camden
Shareholders' rights and interests to the end that the provisions of this
Section 1.8 shall thereafter be applicable in relation to any stock, securities,
or other property thereafter payable or deliverable to Camden Shareholders
pursuant to the earlier application of the provisions of this Section 1.8.
1.9 Closing of Camden Transfer Books. Upon the Effective Date,
the stock transfer books of Camden shall be closed and no transfer of Camden
Shares shall thereafter be made. If, after the Effective Date, certificates
which prior to the Effective
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Date represented Camden Shares are presented to the Surviving Corporation,
they shall be cancelled and exchanged for certificates representing TDS Common
Shares as provided in this Section 1.
1.10 Closing. The closing of the transactions contemplated by
this Agreement shall take place at the offices of Camden, at 10:00 a.m., local
time, on a date selected by TDS which is no later than 10 business days after
the last to occur of (i) the IURC Approval (as such term is defined in Section
5.1) or (ii) the holders of the Camden Shares shall have duly approved the
Merger as contemplated by Section 6.7 or at such other time and place as TDS and
Camden shall agree.
1.11 No Fractional Securities. No certificates or scrip
representing fractional shares of TDS Common Shares shall be issued upon the
surrender for exchange of certificates which prior to the Effective Date
represented Camden Shares pursuant to this Section 1 and no TDS dividend or
other distribution, stock split or interest shall relate to any fractional
security, and such fractional interests shall not entitle the owner thereof to
vote or to any rights of a security holder of TDS. In lieu of any such
fractional securities, each holder of a Camden Share who would otherwise have
been entitled to a fraction of a TDS Common Share upon surrender of stock
certificates for exchange pursuant to this Section 1 will be paid cash upon such
surrender in an amount equal to such fraction times the closing sale price of a
TDS Common Share on the American Stock Exchange on the Effective Date, or if the
TDS Common Shares are not traded on such day, such closing sale price on the
next preceding day on which such stock was traded on the American Stock
Exchange.
SECTION 2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF CAMDEN.
As an inducement to TDS and Sub to enter into this Agreement
and to consummate the transactions contemplated hereby, Camden represents and
warrants to TDS, Sub and their respective successors and assigns, and agrees as
follows:
2.1 Organization and Capital Structure of Camden. Camden is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Indiana, which is the only jurisdiction in which the ownership
or leasing of its properties or the conduct of its business requires it to be
qualified to do business, and no other jurisdiction has demanded, requested or
otherwise indicated that Camden is required so to qualify; and Camden has full
power and authority to own or lease and operate its properties and to carry on
its business as now conducted. Camden serves not less than 1,606 telephone
access lines.
The authorized capital of Camden consists of 560 shares of
capital stock, Common, without par value, of which 280 shares
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have been issued and are outstanding and none of which are held in Camden's
treasury. Except for this Agreement, Camden is not a party to or bound by any
agreements, arrangements, options, warrants, calls, rights or commitments of any
character relating to the issuance, sale, purchase or redemption of any shares
of capital stock of Camden. No holder of Camden Shares has any preemptive,
stock purchase or other rights to acquire Camden Shares. All of the outstanding
Camden Shares are validly issued, fully paid and non-assessable.
True and correct copies of Camden's Articles of Incorporation
and all amendments thereto and of its By-laws as amended to date have been
delivered to TDS.
2.2 Subsidiaries and Investments. Camden holds a 13.775%
interest as a limited partner in the Indiana RSA Number 4 Limited Partnership
("Indiana RSA Partnership") which holds the FCC Cellular license for Indiana RSA
#4. Camden owns a 51% interest in Camden Cellular Telephone Company, Inc., an
Indiana corporation ("Camden Cellular"), which owns 1% of the Indiana RSA
Partnership. Except for such interests and except as set forth in Schedule 2.2
Camden does not own, of record or beneficially, any outstanding securities or
other interest in any corporation, partnership, joint venture or other entity.
2.3 Authority; No Conflict. Camden has full power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Camden of this
Agreement and the transactions contemplated hereby have been duly authorized by
its Board of Directors and, except for the approval by the shareholders of
Camden as provided in Section 5.8, do not require further authorization or
consent by Camden or its board of directors or shareholders. This Agreement is
the legal, valid and binding agreement of Camden enforceable in accordance with
its terms. Camden shall furnish TDS with certified copies of the resolutions
adopted by the Board of Directors of Camden in connection with the transactions
contemplated hereby.
Neither the execution or delivery of this Agreement by Camden
nor consummation of the transactions contemplated hereby or compliance with or
fulfillment of the terms and provisions hereof or of any other agreement or
instrument contemplated hereby will (a) conflict with, result in a breach of the
terms, conditions or provisions of, or constitute a default, an event of default
or an event creating rights of termination or cancellation under, the Articles
of Incorporation or the By-laws of Camden, as amended, any instrument,
agreement, mortgage, judgment, order, award, decree or other restriction to
which Camden or Camden Cellular, is a party or to which any of their respective
properties is subject or by which Camden or Camden Cellular, is bound or any
statute, other law or regulatory provision affecting Camden or Camden Cellular,
or (b) require the approval, consent or authorization of, or the making of
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any declaration, filing or registration with, any third party or any foreign,
federal, state or local court, governmental authority or regulatory body, except
as required by the Indiana Business Corporation Law, by the regulations of the
Indiana Utility Regulatory Commission (the "IURC"), by the regulations of the
Federal Communications Commission ("FCC") and as may be required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act").
2.4 Financial Statements. The balance sheet of Camden at each
of December 31, 1993 and 1994 and the related statements of income, changes in
shareholders' equity and of cash flows for each of the fiscal years then ended,
accompanied by the report of Kehlenbrink, Lawrence & Pauckner certified public
accountants, have been prepared in accordance with generally accepted accounting
principles consistently applied and present fairly the financial position of
Camden as of the date of such balance sheets and the results of its operations
and cash flows for the fiscal periods then ended. True and correct copies of
such financial statements are included in Schedule 2.4.
2.5 Absence of Certain Changes or Events Since Balance Sheet
Date. Since December 31, 1994 there has been:
(a) no increase in the indebtedness for borrowed money
incurred by Camden and no incurrence of any other obligation or liability (fixed
or contingent) except for obligations incurred in the ordinary course of
business consistent with past practice;
(b) no material adverse change in the assets, liabilities,
properties, business, profits, prospects or condition of Camden and no
occurrence of any fact or existence of any condition (or the contemplation or
threat of either thereof) which might reasonably be expected to cause such a
change in the future;
(c) no damage, destruction, loss or claim to or against any
property or assets of Camden, whether or not covered by insurance, which
materially adversely affects the assets, liabilities, properties, business,
profits, prospects or condition of Camden;
(d) no sale, transfer or other disposition by Camden or
mortgage or pledge of, or imposition of any lien, charge or encumbrance on, any
of its properties or assets, other than transactions (including the sale of
capital assets) in the ordinary course of business consistent with past
practice;
(e) no contribution to the capital of Camden, no dividend or
other distribution or payment in respect of, and no subdivision, consolidation
or other recapitalization of, the capital stock of Camden and no declaration or
authorization of any of the foregoing (except for a regular annual dividend of
$800 per
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share ($224,000 in the aggregate) declared on March 6, 1995 on the
issued and outstanding Camden Shares payable March 15, 1995); and
(f) no proceeding with respect to the merger, consolidation,
liquidation or reorganization of Camden, except pursuant to this Agreement.
2.6 Availability of Assets and Legality of Use. The assets
owned or leased by Camden constitute all of the assets which are being used in
the business of Camden; such assets constitute all of the assets necessary to
continue the operations of Camden; and such assets are in good and serviceable
condition (normal wear and tear excepted) and suitable for the uses for which
they are intended. Such assets and their use conform in all material respects to
all applicable building, zoning, fire, environmental, health, safety and other
laws or ordinances or regulations in effect on the date hereof (including,
without limitation, all laws and regulations in respect of the protection of the
environment and the regulation of the disposal of hazardous waste and hazardous
products), and no notice of any violation of any such law, ordinance or
regulation has been received by Camden.
2.7 Title to Property. Camden has good and marketable title to
all of its assets reflected in the financial statements of Camden referred to in
Section 2.4 and all of the assets thereafter acquired by it, except to the
extent that such assets have been disposed of for fair value in the ordinary
course of its business consistent with past practice or as permitted by the
express terms of this Agreement, subject to no mortgage, lien, security interest
or other encumbrance or adverse interest of any kind except (a) as set forth in
Schedule 2.7 or (b) any lien for current Taxes which are not yet due and
payable.
2.8 Undisclosed Liabilities. Camden is not subject to any
liability (including, without limitation, all asserted and unasserted claims
arising from events occurring on or prior to the date hereof, whether known or
unknown to Camden), absolute or contingent, which is not shown or which is
materially in excess of amounts shown or reserved for in the balance sheet as of
December 31, 1994 or referred to in the notes thereto, or otherwise disclosed in
this Agreement, other than liabilities which are of the same
nature as those set forth in such balance sheet and notes and reasonably
incurred after December 31, 1994 in the ordinary course of business consistent
with past practice and other liabilities expressly permitted by this Agreement.
2.9 No Default or Litigation. Except as described in Schedule
2.9 hereto:
(a) Camden is not in default or violation under any agreement,
lease or other instrument to which it is a party, or under any law, regulation,
writ, injunction, order or decree of any court or any foreign, federal, state,
local or other governmental
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department, commission, board, bureau, agency or instrumentality (including,
without limitation, applicable laws, rules and regulations relating to
environmental protection, anti-trust, civil rights, health and occupational
health and safety matters);
(b) there are no actions at law, suits in equity or claims
pending or threatened against or affecting Camden or its business or properties,
nor is there any reasonable basis therefor;
(c) there are no governmental proceedings or investigations
(including, without limitation, proceedings or investigations before or by the
Environmental Protection Agency ("EPA") or any state or local agency responsible
for similar regulation) pending or threatened against or affecting Camden or its
business or properties, nor is there any reasonable basis therefor; and
(d) no action, suit or proceeding has been instituted or
threatened to restrain or prohibit or otherwise challenge the legality or
validity of the transactions contemplated hereby.
2.10 Patents, Trade Names, Trademarks and Other Rights.
(a) Except as disclosed on Schedule 2.10, Camden does not own
or control, or have any right, license or interest in, any United States or
foreign patent or patent application or any United States, state or foreign
trade name, trademark or servicemark registration or application or any United
States, foreign or state copyright registration. Schedule 2.10 hereto contains a
list and description of: (i) all unregistered trade names, trademarks and,
servicemarks (A) owned or controlled by Camden or (B) under which Camden holds
any right, license or interest, (ii) all agreements, commitments, contracts,
understandings, licenses, assignments and indemnities relating or pertaining to
such registrations to which Camden is a party showing in each case the parties
and the material terms; (iii) all licenses or agreements pertaining to know-how,
trade secrets, inventions, disclosures or uses of ideas and intellectual
property to which Camden is a party, showing in each case the parties and the
material terms; and (iv) all registered assumed or fictitious names under which
Camden is conducting business.
(b) Except as disclosed in Schedule 2.10, Camden owns or has
the perpetual royalty free right to use all patents, trademarks, servicemarks,
copyrights, trade names, improvements, processes, formulae, trade secrets,
know-how and proprietary or confidential information used in conducting its
business. No infringement of any patent, patent right, trademark, servicemark,
trade name, brand name or copyright or registration thereof has occurred or
resulted in any way from the operation of the business of Camden. No claim or
threat of any such infringement has been made or implied in respect of any of
the foregoing, and no proceedings are pending or threatened against Camden which
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challenge the validity or ownership of any trademark, trade name or servicemark
or the ownership of any other right or property described in Schedule 2.10, and
Camden knows of no infringing use of any of the same by others. Camden has no
notice of, or knowledge of any basis for, a claim against Camden that any of its
operations, activities, products, equipment, machinery or processes infringes
the patents, trademarks, servicemarks, trade names, copyrights or other property
rights of others.
2.11 Real Estate. Schedule 2.11 contains a list of (a) each
lease or agreement under which Camden is lessee of, or holds or operates, any
real estate owned by any third party, and (b) each parcel of real estate owned
by Camden and each contract or agreement for the purchase, sale, or lease of
real estate. Except as disclosed in such Schedule, each of the leases and
agreements described therein (i) is in good standing and in full force and
effect and is the valid and binding obligation of Camden and the other parties
thereto in accordance with its respective terms and (ii) will continue in effect
after the Effective Date without the consent, approval or act of, or the making
of any filing with, any other party. Except as disclosed in Schedule 2.11,
Camden is not in default in any material respect under any of such leases or
agreements and Camden has not received any notice of default thereunder which
has not been cured. To the knowledge of Camden, no other party to any such lease
or agreement is in material default thereunder. Except as described in such
Schedule, Camden has the right to quiet enjoyment of all such real property
described in such Schedule for the full term of each such lease or similar
agreement relating thereto, including any related renewal option, and the
leasehold or other interest of Camden in such real property is not subject or
subordinate to any security interest, lien, claim, pledge, mortgage, encumbrance
or charge of any kind except for liens for Taxes not yet due and payable and, in
the case of real estate owned by Camden, except for such easements,
restrictions, defects in title, covenants and similar charges as do not render
title to the property unmarketable or uninsurable or detract from or interfere
in any material respect with the existing use of the property subject thereto.
True and correct copies of all leases or agreements identified in Schedule 2.11
have heretofore been delivered to TDS.
2.12 Contracts. Except as set forth in Schedule 2.12, Camden
is not a party to:
(a) any contract for the lease or sublease of personal
property from or to any third party which provides for annual rentals in excess
of $5,000, or any group of contracts for the lease or sublease of similar kinds
of personal property from or to third parties which provides in the aggregate
for annual rentals in excess of $5,000;
(b) any contract for the purchase or sale of raw materials,
commodities, merchandise, supplies, other materials or
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personal property or for the furnishing or receipt of services which calls for
performance over a period of more than ninety (90) days and involves more than
the sum of $5,000;
(c) any distributor, dealer, manufacturer's representative,
sales, agency, advertising or other contract which is not terminable by Camden
without penalty on notice of thirty (30) days or less;
(d) any guarantee of the obligations of customers, suppliers,
officers, directors, employees or others;
(e) any loan or other indebtedness for borrowed money,
including, without limitation, loans owing to either the Rural Electrification
Administration or the Rural Telephone Bank; or
(f) any other contract, whether or not made in the ordinary
course of business, which is material to the business or assets of Camden.
True and correct copies of all contracts and agreements
identified in Schedule 2.12 have heretofore been delivered to TDS. No purchase
commitment by Camden is in excess of its ordinary
business requirements or at a price in excess of fair market price at the date
thereof. Except as set forth in Schedule 2.12, (i) none of the contracts or
agreements listed in Schedule 2.12 will expire or be terminated or be subject to
any modification of terms or conditions upon the consummation of the
transactions contemplated hereby; (ii) Camden is neither in default in any
material respect under the terms of any such contract or agreement nor in
default in the payment of any principal of or interest on any indebtedness for
borrowed money, and no event has occurred which, with the passage of time or
giving of notice, or both, would constitute such a default by Camden; and (iii)
no other party to any such contract or agreement is in default in any material
respect thereunder, and no such event has occurred with respect to such party.
None of such contracts or agreements contains terms unduly burdensome to Camden
or is harmful to its business.
2.13 Employee Agreements; Employee Relations.
(a) Except as disclosed on Schedule 2.13(a), there are no
plans, contracts and arrangements, oral or written, including, but not limited
to, union contracts and employee severance plans, whereunder Camden has any
obligations to its officers, directors, employees or agents or whereunder any of
such persons owes money or any obligation to Camden. Except as disclosed in
Schedule 2.13(a), Camden is not a party to any (i) agreement with any director,
officer or employee of Camden (A) the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a transaction
involving Camden of the nature of any of the transactions contemplated by this
Agreement, (B) providing any term of employment or compensation guarantee, or
(C) providing
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severance benefits or other benefits (which are conditioned upon a
change of control) after the termination of employment of such employee
regardless of the reason for such termination of employment or (ii) agreement or
plan, including, without limitation, any incentive or bonus plan, stock option
plan, stock appreciation rights plan or stock purchase plan, any of the benefits
of which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement.
(b) Schedule 2.13(b) lists (i) the names and positions of each
of the officers, directors and employees of Camden, and (ii) the base salary
level as of the date hereof. From the date hereof, through the Effective Date,
there will be no increase in the compensation payable to any of such officers,
directors or employees, except for budgeted increases set forth in such
Schedule.
(c) There are (i) no situations in which Camden is involved
with the personal interests of any officer, director or shareholder of Camden
which may be generally characterized as a "conflict of interest," including, but
not limited to, direct or indirect interests in the business of competitors,
suppliers or customers of Camden, and (ii) no situations with respect to Camden
which involved or involves (A) the use of any corporate funds or unlawful
contributions, gifts or entertainment or other unlawful expenses related to
political activity, (B) the making of any direct or indirect unlawful payments
to government officials or others from corporate funds or the establishment or
maintenance of any unlawful or unrecorded funds, (C) the violation of any of the
provisions of The Foreign Corrupt Practices Act of 1977, or any rules or
regulations promulgated thereunder, (D) the receipt of any illegal discounts or
rebates or any other violation of the antitrust laws, or (E) any investigation
by the IURC, the Securities and Exchange Commission ("SEC") or any other
foreign, federal, state, county or local government agency or authority.
(d) Camden has not engaged in any unfair labor practice,
unlawful employment practice or unlawful discriminatory practice in the conduct
of its business and Camden has complied in all material
respects with all applicable laws, rules and regulations relating to wages,
hours and collective bargaining and has withheld all amounts required by
agreement to be withheld from the wages or salaries of employees; and Camden has
not had notice of any claim that Camden has engaged in any such practice or has
failed to so comply and withhold. The relations of Camden with its employees are
satisfactory from an operational point of view. Camden is not a party to or
adversely affected by or threatened with any dispute or controversy with a union
or with respect to unionization or collective bargaining, whether involving
Camden or any supplier.
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(e) Camden employs fewer than 50 employees.
2.14 Taxes.
(a) Except as set forth on Schedule 2.14 attached hereto, (i)
Camden has filed on or before the date hereof (or will timely file) all Tax
Returns required to be filed on or before the Effective Date; (ii) all such Tax
Returns are complete and accurate and disclose all Taxes required to be paid by
Camden for the periods covered thereby and all Taxes shown to be due on such Tax
Returns have been timely paid; (iii) all Taxes (whether or not shown on any Tax
Return) owed by Camden and required to be paid on or before the Effective Date
have been (or will be) timely paid or, in the case of Taxes which Camden is
presently contesting in good faith, Camden has established an adequate reserve
for such Taxes on the financial statements described in Section 2.4; (iv) Camden
has not waived or been requested to waive any statute of limitations in respect
of Taxes; (v) the Tax Returns referred to in clause (i) have been examined by
the Internal Revenue Service or the appropriate state, local or foreign taxing
authority or the period for assessment of the Taxes in respect of which such Tax
Returns were required to be filed has expired; (vi) there is no action, suit,
investigation, audit, claim or assessment pending or proposed or threatened with
respect to Taxes of Camden and, to the best of Camden's knowledge, no basis
exists therefor; (vii) all deficiencies asserted or assessments made as a result
of any examination of the Tax Returns referred to in clause (i) have been paid
in full; (viii) there are no liens for Taxes upon the assets of Camden except
liens relating to current Taxes not yet due; (ix) Camden has never made an
election under Section 1362 of the Code to be treated as an "S corporation"; and
(x) Camden has never been a member of an "affiliated group" (as defined in
Section 1504(a) of the Code without regard to the limitations contained in
Section 1504(b) of the Code) and has never filed Tax Returns on a combined,
consolidated or unitary basis with any entity.
(b) Capitalized terms have the meanings set forth in Section
11.6.
2.15 Employee Benefit Plans.
(a) Schedule 2.15 sets forth a list of all deferred
compensation plans, all supplemental death, disability, and retirement plans,
all medical reimbursement plans, all employee welfare benefit plans (within the
meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), all pension plans (within the meaning of Section 3(2) of
ERISA), all severance plans, all bonus plans and all other employee benefit
plans of any kind or character, whether written or oral, maintained by Camden
("Employee Benefit Plans"). None of such Employee Benefit Plans is (i) a
multi-employer plan (as defined in Section 414(f) of the Code or Section 4001(a)
of ERISA), or (ii) a plan with respect to which more than one employer makes
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contributions within the meaning of Sections 4063 and 4064 of ERISA. Camden has
delivered to TDS true and correct copies of all written plans and descriptions
of all oral plans listed on Schedule 2.15.
(b) With respect to such Employee Benefit Plans: (i) all
contributions required for each Employee Benefit Plan for the plan year most
recently ended and for all prior years have been made or reserved for; (ii)
Camden is in compliance in all material respects with the applicable provisions
of ERISA, including applicable ERISA reporting and disclosure requirements, and
applicable rules and regulations promulgated under ERISA, (iii) there is no
accumulated funding deficiency or any additional funding requirement for any
Employee Benefit Plan for any period ending before the Effective Date; (iv) none
of the Employee Benefit Plans, any fiduciary thereof nor Camden has engaged in
transactions which might subject any of the plans, any fiduciary thereof or
Camden, or any party dealing with them, to any tax or penalty imposed by the
Code or ERISA; (v) no Employee Benefit Plan has been completely or partially
terminated; and (vi) no reportable event, as such term is defined in Section
4043(b) of ERISA, has occurred with respect to any of such plans which are
subject to Section 4043(b) of ERISA, other than those which might arise solely
as a result of the transactions contemplated by this Agreement.
2.16 Permits. Camden possesses all franchises, permits,
licenses, certificates, approvals and other authorizations necessary to own or
lease and operate its properties and to conduct its business as now conducted,
all of which are hereinafter collectively called the "Permits." All Permits are
listed in Schedule 2.16.
All Permits are in full force and effect and will continue in
effect after the Effective Date without the consent, approval or act of, or the
making of any filing with, any governmental body, regulatory commission or other
party, subject to the receipt of certain governmental and regulatory approvals
as set forth in Section 6.5 hereof. Camden is not in default under the terms of
any such Permit and has not received notice of any default thereunder; and no
other party to any such Permit is in default thereunder.
2.17 Insurance. Schedule 2.17 sets forth a list and brief
description (including nature of coverage, limits, deductibles and premiums with
respect to each type of coverage) of all policies of insurance maintained, owned
or held by Camden on the date hereof. Camden has complied with each of such
insurance policies and has not failed to give any notice or present any claim
thereunder in a due and timely manner.
2.18 Environmental Conditions. Camden has no liability under,
and has not violated, any federal, state and local environmental or health and
safety-related laws, regulations, rules
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and ordinances applicable to its facilities and operations, or of any condition
with respect to the environment, whether or not yet discovered, which could or
does result in any liability, loss, cost, damages, fees or expenses to or
against Camden, Sub or TDS. Camden has not generated, manufactured, refined,
transported, treated, stored, handled, disposed, transferred, produced or
processed, and has no knowledge of the actual or potential releasing, spilling,
leaking or discharging of, at or in the vicinity of the properties of Camden,
any pollutant, toxic substance, hazardous waste, hazardous material, hazardous
substance, solid waste or oil as defined in or pursuant to the Resource
Conservation and Recovery Act, as amended, the Comprehensive Environmental
Response, Compensation, and Liability Act, as amended, the Federal Clean Water
Act, as amended, or any other federal, state or local environmental law,
regulation, ordinance or rule.
2.19 Bank Accounts; Powers of Attorney. Schedule 2.19 contains
a correct and complete list of all (a) accounts or deposits of Camden with banks
or other financial institutions, (b) safe deposit boxes of Camden, (c) persons
authorized to sign or otherwise act with respect thereto as of the date hereof,
and (d) powers of attorney for Camden. No change in such accounts or deposits,
safe deposit boxes or persons authorized to sign will be made prior to the
Effective Date other than changes in the ordinary course of business consistent
with past practice.
2.20 Accounts Receivable. All accounts receivable of Camden
have arisen from bona fide transactions in the ordinary course of its business.
All accounts receivable reflected in the balance sheet dated December 31, 1994
are good and collectible in the ordinary course of business at the aggregate
recorded amounts thereof, net of any applicable allowance for doubtful accounts
reflected in the balance sheet dated December 31, 1994.
2.21 Inventories. The inventories of Camden (a) are reflected
in the balance sheet dated December 31, 1994 in accordance with generally
accepted accounting principles, (b) are reflected in the books and records of
Camden at the lower of cost or market value and (c) are not known by Camden to
be obsolete and are in good, merchantable and useable condition.
2.22 Information in Proxy Statement. None of the information
to be supplied by Camden for inclusion in the proxy statement to be distributed
to shareholders of Camden in connection with the meeting of shareholders of
Camden to vote upon the approval and adoption of this Agreement and the Merger
(the "Proxy Statement") or any amendment or supplement thereto, will, at the
time of the mailing of the Proxy Statement and any amendments or supplements
thereto, and at the time of the meeting of shareholders of Camden to vote upon
this Agreement, the Merger and related transactions, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or
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necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading or necessary to
correct any material statement in any earlier communication (including the Proxy
Statement or any amendment or supplement thereto) to shareholders of Camden with
respect to the Merger. If at any time prior to the Effective Date any event with
respect to Camden, its officers and directors should occur which is or should be
described in an amendment of, or a supplement to, the Proxy Statement, such
event shall be so described and disseminated to the shareholders of Camden. The
Proxy Statement will comply (with respect to Camden) in all material respects
with the provisions of the Securities Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules and regulations promulgated
thereunder, as though Camden were subject to the Exchange Act and such rules and
regulations.
2.23 Exchange Act; Investment Company Act. Camden is not an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended. No securities of Camden are required to be registered under
Section 12 of the Exchange Act.
2.24 No Finder. Neither Camden nor any party acting on behalf
of Camden has paid or become obligated to pay any fee or commission to any
broker, finder or intermediary for or on account of the transactions
contemplated hereby.
2.25 No Omissions. None of the representations or warranties
of Camden contained herein, none of the information contained in the Schedules
referred to in this Section 2, and none of the other information or documents
furnished to TDS or its representatives by Camden in connection with this
Agreement, is false or misleading in any material respect or omits to state a
fact herein or therein necessary to make the statements herein or therein not
misleading in any material respect. There is no fact which adversely affects or
in the future might reasonably be expected to adversely affect the business,
profits or financial condition of Camden, in any material respect, which has not
been set forth or referred to in this Agreement or in the Schedules hereto.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF TDS.
As an inducement to Camden to enter into this Agreement and to
consummate the transactions contemplated herein, TDS hereby represents and
warrants to Camden and agrees as follows:
3.1 Organization and Capital Structure of TDS. TDS is a
corporation duly organized and validly existing under the laws of the State of
Iowa. TDS is duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of its properties owned
or held under lease or the nature of its activities makes such qualification
necessary, except
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where the failure to be so qualified will not, individually or
in the aggregate, have a material adverse effect on TDS and its subsidiaries,
taken as a whole, or except where the failure to so qualify would not have a
material adverse effect on the transactions contemplated by this Agreement.
TDS has authorized capital consisting of 100,000,000 TDS
Common Shares; 25,000,000 Series A Common Shares, $1.00 par value; and 5,000,000
shares of Preferred Stock, no par value. As of February 28, 1995, a total of
50,147,231 TDS Common Shares, 6,876,432 Series A Common Shares and 548,100
shares of Preferred Stock were issued and outstanding, all of which are validly
issued, fully paid and non-assessable and do not have any preemptive rights
except as disclosed in the Prospectus (as hereinafter defined). The TDS Common
Shares are listed on the American Stock Exchange.
3.2 Authority; No Conflict. TDS has full power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. Subject to the approval of this Agreement by the Board of Directors of
TDS, the execution, delivery and performance by TDS of this Agreement and the
transactions contemplated hereby will have been duly authorized by all necessary
corporate action and will not require any further authorization or consent by
TDS or its shareholders. This Agreement is, and each other agreement or
instrument of TDS contemplated hereby will be, the legal, valid and binding
agreement of TDS enforceable in accordance with its respective terms.
Neither the execution and delivery of this Agreement by TDS
nor the consummation of the transactions contemplated hereby or compliance with
or fulfillment of the terms and provisions hereof or of any other agreement or
instrument contemplated hereby will (a) conflict with, result in a breach of the
terms, conditions or provisions of, or constitute a default, an event of default
or any event creating rights of termination or cancellation under, the Articles
of Incorporation or the By-laws of TDS, as amended, or any subsidiary of TDS,
any instrument, agreement, mortgage, judgment, order, award, decree or other
restriction to which TDS or any of its subsidiaries is a party or any of their
respective properties is subject or by which any of them is bound or any
statute, other law or regulatory provisions affecting any of them, or (b)
require the approval, consent or authorization of, or the making of any
declaration, filing or registration with, any third party or any federal, state
or local court, governmental authority or regulatory body, except as provided by
the Indiana Business Corporation Law, the regulations of the IURC, the
regulations of the FCC, the HSR Act, the Securities Act of 1933, as amended (the
"Securities Act"), the Exchange Act and the securities, blue sky or takeover
laws of applicable states.
3.3 Financial Statements. The consolidated balance sheets of
TDS and its subsidiaries at December 31, 1994 and 1993 and the related
consolidated statements of income, of shareholders'
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equity and of cash flows for each of the three years ended December 31, 1994,
together with appropriate notes to such financial statements, all accompanied by
the report thereon of Arthur Andersen & Co., independent certified public
accountants, incorporated by reference in the TDS Registration Statement (as
hereinafter defined), have been prepared in accordance with generally accepted
accounting principles consistently applied except as noted therein and present
fairly the consolidated financial position of TDS and its subsidiaries as at the
date of such balance sheets and the consolidated results of their operations and
changes in their shareholders' equity and financial position for the fiscal
periods then ended.
3.4 TDS Registration Statement and Prospectus.
(a) TDS has filed a registration statement ("TDS Registration
Statement") on Form S-4 (Registration No. 33-68988) with respect to the TDS
Common Shares to be delivered in connection with acquisitions by TDS. Such TDS
Registration Statement has been declared effective by the SEC and no stop order
suspending the effectiveness of such TDS Registration Statement has been entered
by the SEC. The Prospectus dated September 24, 1993 (the "Prospectus"),
accurately reflects the matters contained or incorporated by reference therein
as of the date thereof.
(b) TDS has delivered to Camden true and correct copies of the
Prospectus, the TDS Form 10-K and Annual Report to shareholders for the year
ended December 31, 1994, the TDS Form 8-K dated March 15 1995, and the TDS
Notice of Annual Meeting and Proxy Statement dated April 14, 1995. The TDS
Common Stock to be delivered to holders of Camden Shares in the Merger will be
shares registered on a TDS registration statement on Form S-4 (the "Merger
Registration Statement") which shall include the Proxy Statement and which TDS
agrees to file promptly under the Securities Act and use its best efforts to
cause to become effective in a timely manner thereafter.
3.5 Information in Proxy Statement. None of the information to
be supplied by TDS or Sub for inclusion in the Proxy Statement, or any amendment
or supplement thereto, will, at the time of the mailing of the Proxy Statement
and any amendments or supplements thereto, and at the time of such meeting of
shareholders of Camden, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading or necessary to correct any material statement in any
earlier communication (including the Proxy Statement or any amendment or
supplement thereto) to shareholders of Camden with respect to the Merger. If at
any time prior to the Effective Date any event with respect to TDS, its officers
and directors or any of its subsidiaries (including Sub) shall occur which is
required to
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be described in an amendment of, or a supplement to, the Proxy
Statement, such event shall be so described, such amendment or supplement shall
be promptly filed with the SEC, if required, and as required by law,
disseminated to the shareholders of Camden. The Proxy Statement and any
amendment or supplement thereto will comply (with respect to TDS and TDS Sub) as
to form in all material respects with the provisions of the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder, as though
Camden were subject to the Exchange Act and such rules and regulations.
3.6 TDS Common Shares. The TDS Common Shares to be issued in
connection with the Merger, when issued and delivered in accordance with the
terms hereof, will be (a) validly issued, fully paid and non-assessable and (b)
listed for trading on the American Stock Exchange.
3.7 No Finder. Neither TDS nor any party acting on its behalf
has paid or become obligated to pay any fee or any commission to any broker,
finder or intermediary for or on account of the transactions contemplated
herein.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SUB.
As an inducement to Camden to enter into this Agreement and to
consummate the transactions contemplated herein, TDS and Sub hereby jointly and
severally represent and warrant to Camden and agree as follows:
4.1 Organization and Capital Structure of Sub. Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Indiana. Sub has not engaged in any business since it was
incorporated, except as contemplated by this Agreement.
The authorized capital of Sub consists of 1,000 common shares,
without par value, of which 100 have been issued and are outstanding. All of the
outstanding common shares of Sub are validly issued, fully paid and
nonassessable and are owned by TDS free and clear of all liens, claims and
encumbrances.
4.2 Authority. Sub has full power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement by Sub have been duly
authorized by the Board of Directors of Sub and TDS as its sole shareholder and
do not require any further authorization or consent by Sub or TDS as its sole
shareholder. This Agreement is the legal, valid and binding agreement of Sub
enforceable in accordance with its terms.
Neither the execution and delivery of this Agreement by Sub
nor consummation of the transactions contemplated hereby or
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compliance with or fulfillment of the terms and provisions hereof or of any
other agreement or instrument contemplated hereby will (a) conflict with, result
in a breach of the terms, conditions or provisions of, or constitute a default,
an event of default or an event creating rights of termination or cancellation
under, the Articles of Incorporation or the By-laws of Sub, any instrument,
agreement, mortgage, judgment, order, award, decree or other restriction to
which Sub is a party or any of its properties is subject or by which it is bound
or any statute, other law or regulatory provision affecting it, or (b) require
the approval, consent or authorization of, or the making of any declaration,
filing or registration with, any third party or any federal, state or local
court, governmental authority or regulatory body, except as provided by the
Indiana Business Corporation Law, the regulations of the IURC, the regulations
of the FCC, the Securities Act, the Exchange Act and the securities, blue sky
or takeover laws of applicable states.
SECTION 5. ACTION PRIOR TO EFFECTIVE DATE.
The parties covenant to take, or to refrain from taking, as
appropriate, the following action between the date hereof and the Effective
Date:
5.1 Regulatory Approvals. TDS and Camden shall jointly file
and vigorously prosecute all documents and take all action which may be
necessary to obtain the authorization, approval or consent of the IURC (the
"IURC Approval") and any other applicable regulatory authority to the
transactions contemplated by this Agreement, including, if necessary, any
filings required under the HSR Act. TDS and Camden will cooperate in providing
the IURC and any other applicable regulatory authority with any additional
information requested by the IURC and any other applicable regulatory authority.
Each of TDS and Camden agree to make such amendments and modifications to this
Agreement as may be required to obtain the approval of the IURC and any
other applicable regulatory authority, provided that such changes are permitted
by Section 13.8.
5.2 Investigation of Business of Camden by TDS. Camden shall
afford to the officers, employees and authorized representatives of TDS
(including, without limitation, independent public accountants and attorneys)
complete access during normal business hours to the offices, properties,
customers, suppliers, employees and business and financial records (including
computer files, retrieval programs and similar documentation) of Camden to the
extent TDS shall deem necessary or desirable, and shall furnish to TDS or its
authorized representatives such additional information concerning the
operations, properties and business of Camden as shall be reasonably requested,
including all such information as shall be necessary to enable TDS or its
authorized representatives to verify the accuracy of the representations
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and warranties contained in Section 2, to verify the accuracy of the financial
statements referred to in Section 2.4 and to determine whether the conditions
set forth in Section 6 have been satisfied. TDS agrees that such investigation
shall be conducted in such manner as not to interfere unreasonably with the
operation of the business of Camden.
5.3 Preserve Accuracy of Representations and Warranties. Each
of the parties hereto shall refrain from taking any action which would render
any representation or warranty contained herein inaccurate in any material
respect as of the Effective Date. Camden shall notify TDS promptly of any event
which renders or would render any representation or warranty of Camden contained
herein to be inaccurate in any material respect at any time on or prior to the
Effective Date or which would have been listed in the Schedules hereto if such
event had taken place prior to the date hereof. TDS shall notify Camden promptly
of any event which renders or would render any representation of warranty of TDS
or Sub contained herein to be inaccurate in any material respect at any time on
or prior to the Effective Date.
5.4 Maintain Business of Camden as a Going Concern. Camden
shall use its best efforts to maintain its businesses in accordance with past
practices and sound business judgment and to preserve the goodwill of the
suppliers, employees, customers and others having business relations with it.
5.5 No Material Change in the Business of Camden. Without the
written approval of TDS, except as otherwise permitted by this Agreement, Camden
shall not:
(a) make any material change in the business or operations of
Camden;
(b) declare or pay any dividends in cash on the issued and
outstanding capital stock of Camden or make any other distribution of any kind
in respect thereof (provided that, in the event that Camden calls a meeting of
its shareholders in accordance with Section 5.8 and at such meeting the
shareholders of Camden duly approve and adopt this Agreement and the Merger,
Camden shall have the right, prior to the Effective Date, to declare and pay a
dividend on each Camden Share equal to $224,000 divided by the total number of
Camden Shares outstanding on the date of payment thereof);
(c) purchase or redeem any of the capital stock of Camden;
(d) issue, sell or otherwise distribute any treasury shares or
any stock of Camden or effect any stock split or reclassification of any shares
of its capital stock or grant or commit to grant any option, warrant or other
right to subscribe for
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or purchase or otherwise acquire any shares of its
capital stock or security convertible or exchangeable for such shares;
(e) effect any amendment to the Articles of Incorporation or
By-laws of Camden, except pursuant to this Agreement;
(f) authorize any director, or authorize or permit any officer
or employee or any attorney, accountant or other representative retained by
Camden, to solicit or encourage any inquiries or the making of any proposal
which it reasonably expects may lead to any takeover proposal. As used in this
paragraph, "takeover proposal" shall mean any proposal for a merger, tender
offer or other business combination involving Camden or for the acquisition of a
substantial equity interest in it or a substantial portion of the assets of
Camden other than as contemplated by this Agreement. Camden will promptly
communicate to TDS if it receives an inquiry or proposal and will promptly
communicate the terms of any such inquiry or proposal in respect of a takeover
proposal. Camden will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore in
respect of any takeover proposals; or
(g) enter into or amend any agreements with or for the benefit
of any of the officers, directors or employees of Camden, amend any employee
benefit plan or arrangement or grant any increases in the compensation or
benefits of the officers, directors and employees of Camden, except as permitted
by Section 2.13(b) or as specifically contemplated in the Schedules hereto.
5.6 Necessary Consents and Governmental Approvals. Camden
shall use its best efforts promptly to obtain all consents from parties to
contracts, licenses, leases and other agreements of Camden, and all consents or
permits from governmental authorities, which are required by the terms thereof,
this Agreement or otherwise for the due and punctual consummation of the
transactions contemplated by this Agreement.
5.7 No Public Announcement. Neither TDS nor Camden shall,
without the approval of the other party, make any press release or other public
announcement concerning the transactions contemplated by this Agreement except
as and to the extent that any party shall be so obligated by law, in which case
the other parties shall be advised and the parties shall use their best efforts
to cause a mutually agreeable release or announcement to be issued.
5.8 Camden Shareholders' Meeting.
Camden shall promptly call, in accordance with the Indiana
Business Corporation Law and its Articles of Incorporation and By-laws, a
meeting of its shareholders for the purpose of voting upon the approval and
adoption of this Agreement and the Merger and shall use its best efforts to
obtain shareholder
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approval of this Agreement and the Merger. Such meeting shall
be held as soon as practicable but not earlier than 20 business days after the
Proxy Statement is sent to Camden shareholders.
5.9 The Merger Registration Statement. TDS shall also file
with the Commission the Merger Registration Statement on Form S-4 with respect
to the TDS Common Shares to be issued in connection with the Merger. TDS shall
use its best efforts to cause such Registration Statement to become effective in
a timely manner. TDS shall also take any action required to be taken under any
applicable state securities, blue sky or takeover laws in connection with the
issuance of the TDS Common Shares pursuant to the Merger. Camden shall furnish
TDS all information concerning Camden and the Camden shareholders and take such
other action as TDS may reasonably request in connection with the Merger
Registration Statement.
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF TDS AND SUB.
The obligations of TDS and Sub to effect the Merger shall, at
the option of TDS, be subject to the satisfaction, on or prior to the Effective
Date, of the following conditions:
6.1 No Misrepresentation or Breach of Covenants and
Warranties. There shall have been no material breach by Camden in the
performance of any of its covenants and agreements herein; each of the
representations and warranties of Camden contained herein shall be true and
correct in all material respects on the Effective Date as though made on the
Effective Date except as affected by transactions contemplated by this
Agreement; and there shall have been delivered to TDS and Sub a certificate to
such effect, dated the Effective Date, signed on behalf of Camden by its
President or one of its Vice Presidents.
6.2 No Changes or Destruction of Property. Between the date
hereof and the Effective Date, there shall have been (a) no material adverse
change in the assets, liabilities, business, properties, profits, prospects or
condition of Camden; (b) no material adverse federal or state legislative or
regulatory change affecting the products, services or business of Camden; and
(c) no material damage to the properties and assets of Camden by fire, flood,
casualty, act of God or public enemy or other cause, regardless of insurance
coverage for such damage; and there shall have been delivered to TDS and Sub a
certificate or certificates to such effect, dated the Effective Date, signed on
behalf of Camden by its President or one of its Vice Presidents.
6.3 Opinion of Counsel for Camden. TDS and Sub shall have
received from Bishop, Bishop & Bishop of Flora, Indiana, counsel for Camden, an
opinion, dated the Effective Date, in form and substance reasonably satisfactory
to TDS and its counsel, substantially to the effect set forth in Exhibit B.
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6.4 No Restraint or Litigation. No action, suit, investigation
or proceeding shall have been instituted or threatened to restrain or prohibit
or otherwise challenge the legality or validity of the transactions contemplated
hereby.
6.5 Necessary Governmental Approvals. If necessary, the
waiting period under the HSR Act shall have expired or been terminated, and the
parties shall have received the approval of the IURC and all other governmental
and regulatory approvals and actions necessary to consummate the transactions
contemplated hereby, which are either required to be obtained prior to the
Effective Date by applicable law or regulation or are necessary to prevent a
material adverse change in the assets, liabilities, business, properties,
profits, prospects or condition of Camden.
6.6 Necessary Consents. Camden shall have received consents,
in form and substance reasonably satisfactory to TDS, to the transactions
contemplated hereby from all appropriate governmental authorities and from the
other parties to all contracts, leases, agreements and permits to which Camden
is a party or by which it is affected and which require such consent prior to
the Effective Date or are necessary to prevent a material adverse change in the
assets, liabilities, business, properties, profits, prospects or condition of
Camden.
6.7 Approval by Camden Shareholders. This Agreement, the
Merger and the other transactions contemplated hereby shall have been approved
by the requisite vote of the holders of outstanding Camden Shares at a meeting
duly called and held, and there shall have been delivered to TDS
and Sub a certificate, dated the Effective Date, signed on behalf of Camden by
its Secretary or an Assistant Secretary to such effect and to which is attached
the resolution or resolutions approved by such Camden Shares and a list of the
shareholders of record of Camden on the Effective Date, including holders of any
Dissenting Shares.
6.8 No Stop Orders. No stop order suspending the effectiveness
of the TDS Registration Statement or the Merger Registration Statement shall
have been entered by the SEC.
6.9 Listing of TDS Common Shares. The TDS Common Shares to be
issued in connection with the Merger shall continue to be approved for listing
upon notice of issuance by the American Stock Exchange.
6.10 Approval by TDS Board of Directors. This Agreement and
the transactions contemplated hereby shall have been approved by the Board of
Directors of TDS.
6.11 Dissenting Shares. There shall be not more than 15
Dissenting Shares.
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6.12 Comfort Letter. TDS and Sub shall have received a comfort
letter from Kehlenbrink, Lawrence & Pauckner, certified public accountants,
dated the date of mailing the Proxy Statement and the Effective Date and
addressed to TDS and Sub, in each case in form and substance reasonably
acceptable to TDS and Sub, covering such matters reasonably requested by them.
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF CAMDEN.
The obligations of Camden to effect the Merger shall, at the
option of Camden, be subject to the satisfaction, on or prior to the Effective
Date, of the following conditions:
7.1 No Misrepresentation or Breach of Covenants and
Warranties. There shall have been no material breach by TDS or Sub in the
performance of any of their respective covenants and agreements herein; each of
the representations and warranties of TDS and Sub contained or referred to in
this Agreement shall be true and correct in all material respects on the
Effective Date as though made on the Effective Date except as affected by
transactions contemplated by this Agreement; and there shall have been delivered
to Camden a certificate or certificates to such effect, dated the Effective
Date, signed on behalf of TDS by its President or one of its vice presidents.
7.2 Opinions of Counsel for TDS and Sub. Camden shall have
received opinions, dated the Effective Date, in form and substance reasonably
satisfactory to Camden and its counsel, from (i) Sidley & Austin, counsel for
TDS and Sub, to the effect set forth in Exhibit C, and (ii) from Barnes &
Thornburg, special Indiana counsel for TDS and Sub, substantially to the effect
set forth in Exhibit D.
7.3 Corporate Action. TDS and Sub shall have taken all
corporate action necessary to approve the transactions contemplated by this
Agreement, and there shall have been furnished to Camden certified copies of
resolutions adopted by the Board of Directors of TDS and of Sub and by the sole
shareholder of Sub, in form and substance reasonably satisfactory to counsel for
Camden, in connection with such transactions. The Consulting Agreement and each
of the Employment Agreements attached as Exhibits to this Agreement (the
"Employment Agreements") shall have been duly executed and delivered by the
parties thereto.
7.4 No Restraint or Litigation. No action, suit, investigation
or proceeding shall have been instituted or threatened to restrain or prohibit
or otherwise challenge the legality or validity of the transactions contemplated
hereby.
7.5 Necessary Governmental Approvals. If necessary, the
waiting period under the HSR Act shall have expired or been terminated, and the
parties shall have received the approval of the
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IURC and all other governmental and regulatory approvals and actions necessary
to consummate the transactions contemplated hereby which are required to be
obtained prior to the Effective Date by applicable law or regulation or are
necessary to prevent a material adverse change in the assets, liabilities,
business, properties, profits, prospects or condition of Camden.
7.6 Approval by Camden Shareholders. This Agreement, the
Merger and the other transactions contemplated hereby shall have been approved
by the requisite vote of the holders of outstanding Camden Shares.
7.7 No Stop Orders. No stop order suspending the effectiveness
of the TDS Registration Statement or the Merger Registration Statement shall
have been entered by the Commission.
7.8 Listing of TDS Common Shares. The TDS Common Shares to be
issued in connection with the Merger shall continue to be approved for listing
upon notice of issuance by the American Stock Exchange.
SECTION 8. OPERATION OF CAMDEN FOLLOWING THE MERGER
8.1 Operation of Camden; Officers and Directors of Camden. (a)
After the Effective Date, TDS intends to continue to operate Camden as an
independent local telephone company with its Board of Directors, Management and
employees existing on the date hereof, provided that TDS shall have the right to
nominate and elect one member of the Camden Board. TDS shall also keep the
present business office open at Camden for at least ten years following the
Effective Date. So long as such Camden directors continue to serve as directors,
they will receive annual compensation at a level no less than the annual
compensation and bonus now payable to such directors. Subject to the Employment
Agreements, annual compensation of Camden's officers and employees on the date
hereof will be maintained at no less than the compensation now payable to such
officers and employees. During such ten-year period, Camden's President and Vice
President may, at their discretion, attend the Annual Convention and spring and
fall District Meetings of the Indiana Telephone Association and the USTA Annual
Convention, accompanied by their spouses, with all expenses to be paid by
Camden.
(b) The Board of Directors of Camden may continue, in its
reasonable discretion, to utilize the services of those local banks, accountants
and attorneys currently utilized by Camden. The Camden Board of Directors shall,
in its discretion, have the right to continue to make community service
donations to local school, library, Little League and similar community
institutions, activities and services at levels equal to those paid by Camden in
the past.
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(c) During such ten-year period each director of Camden shall
continue to receive a Christmas bonus of $500.
(d) TDS shall cause Camden to continue to provide, at Camden's
expense, existing medical benefits for Camden Directors Lloyd Yerkes and Joe P.
Sullivan and their respective wives with Blue Cross and Blue Shield of Indiana
and for Jo Ann Johnson with Pipe Traders Industry Health & Welfare Plan, Terre
Haute, Indiana, throughout their respective lifetimes.
(e) Subject to the foregoing provisions of this Section 8 and
to the Employment Agreements, TDS shall have the right, no later than ten years
following the Effective Date, to convert all Camden employees on the date hereof
then employed by Camden to TDS wage and salary scales (but compensation of any
such employee shall not be reduced from what he/she is actually earning at the
time of such conversion) and to TDS standard benefit plans, including, but not
limited to, pension, medical, dental and insurance benefits.
(f) All new employees hired by Camden after the date hereof
shall come under TDS wage and salary scales and participate only in TDS standard
employee benefit plans.
SECTION 9. INDEMNIFICATION
9.1 By the Camden Shareholders to TDS. By their approval of
this Merger Agreement and their receipt of the Merger Consideration, the Camden
Shareholders, jointly and severally, agree to indemnify, hold harmless and
defend TDS and each of its officers, directors, employees, affiliates,
subsidiaries, successors and assigns (the "TDS Indemnitees"), against any claim,
demand, loss, expense, obligation or liability, including interest, penalties
and reasonable attorneys' fees (collectively, "Losses") incurred by any TDS
Indemnitee ("TDS Losses") relating to, resulting from or arising out of (a) any
breach by Camden or any Camden Shareholder in the performance of their
respective obligations under this Agreement, (b) the inaccuracy of any of the
representations or warranties made by Camden or any Camden Shareholder in this
Agreement, in any exhibit or schedule hereto, or in any other instrument
delivered in accordance with the provisions hereof, or (c) any action, suit,
proceeding, assessment or judgment incident to any of the foregoing.
9.2 By TDS to the Camden Shareholders. TDS agrees to
indemnify, hold harmless and defend the Camden Shareholders, and each of
Camden's officers, directors, employees, affiliates, subsidiaries, successors
and assigns (the "Camden Indemnitees"), against all Losses incurred by any of
them ("Camden Shareholder Losses") relating to, resulting from or arising out of
(a) any breach by TDS or Sub in the performance of their respective obligations
under this Agreement, (b) the inaccuracy of any of the representations made by
TDS or Sub in this Agreement, in any
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schedule or exhibit hereto, or in any instrument executed or delivered in
accordance with the provisions hereof, or (c) any action, suit, proceeding,
assessment or judgment incident to any of the foregoing.
SECTION 10. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements contained in this Agreement shall
survive the Merger until terminated by any applicable statute of limitations,
except for the representations, warranties and agreements contained in Sections
2.14, 2.17 and 10, which shall survive the Effective Date and never expire.
SECTION 11. TAXES.
11.1 Liability for Certain Taxes. The Camden Shareholders will
pay, and will indemnify TDS and Camden against, any real property transfer or
gains tax, stamp tax, stock transfer tax, or other similar tax imposed on the
transfer of the Camden Shares pursuant to this Agreement, together with any
penalties or interest with respect to such taxes.
11.2 Tax Returns. (a) Camden shall file or cause to be filed
when due all Tax Returns with respect to Taxes that are required to be filed by
or with respect to Camden for taxable years or periods ending on or before the
Effective Date and shall remit any Taxes due in respect of such Tax Returns, and
TDS shall file or cause to be filed when due all Tax Returns with respect to
Taxes that are required to be filed by or with respect to Camden for taxable
years or periods ending after the Effective Date and shall remit any Taxes due
in respect of such Tax Returns. All Tax Returns which Camden is required to file
or cause to be filed in accordance with this Section 10.2(a) shall be prepared
and filed in a manner consistent with past practice and, on such Tax Returns, no
position shall be taken or method adopted that is inconsistent with positions
taken or methods used in preparing and filing similar Tax Returns in prior
periods.
(b) Camden will promptly deliver or cause to be delivered to
TDS true and complete copies of: (A) all income Tax Returns of Camden requested
by TDS; (B) any other Tax Returns requested by TDS, as may be relevant to Camden
or its assets or operations; and (C) any workpapers or other supporting data
requested by TDS relating to income Taxes reflected in the financial statements
described in Section 2.4, relating to Tax Returns made available pursuant to (A)
or (B), or relating to Tax Returns not yet filed, in each case, however, only to
the extent in the possession of Camden.
11.3 Assistance and Cooperation. After the Closing Date, each
of the Camden Shareholders and TDS shall:
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(i) assist (and cause their respective affiliates to assist)
the other party in preparing any Tax Returns which such other party is
responsible for preparing and filing in accordance with Section 11.2;
(ii) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of Camden;
(iii) make available to the other and to any taxing authority
as reasonably requested all information, records, and documents
relating to Taxes of Camden;
(iv) provide timely notice to the other in writing of any
pending or threatened Tax audits or assessments of Camden for taxable
periods for which the other may have a liability under this Section 10;
and
(v) furnish the other with copies of all correspondence
received from any taxing authority in connection with any Tax audit or
information request with respect to any such taxable period.
11.4 Adjustment to Merger Consideration. Any payment by TDS,
Camden or the Camden Shareholders under this Section 11 will be an adjustment to
the Aggregate Merger Consideration.
11.5 Survival of Obligations. Notwithstanding anything to the
contrary, the obligations of the parties set forth in this Section 11 shall be
unconditional and absolute and shall remain in effect without limitation as to
time.
11.6 Definitions. As used in this Agreement, the following
terms shall have the following meanings:
"Tax" (and, with correlative meaning, "Taxes" and "Taxable")
shall mean any federal, state, local or foreign income, gross receipts, windfall
profits, severance, property, production, sales, use, license, excise,
franchise, employment, payroll, withholding, alternative or add-on minimum, ad
valorem, transfer, excise, stamp, or environmental tax, or any other tax,
custom, duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, addition to tax or additional
amount imposed by any governmental authority.
"Tax Return" shall mean any return, report or similar
statement required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim for
refund, amended return and declaration of estimated Tax.
"Tax Sharing Arrangement" shall mean any written or unwritten
agreement or arrangement for the allocation or payment
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of Tax liabilities or payment for Tax benefits with respect to a combined,
consolidated or unitary Tax Return which Tax Return includes Camden.
SECTION 12. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be given by hand or by registered mail,
return receipt requested, addressed, if to TDS or Sub, to: Telephone and Data
Systems, Inc., 30 North LaSalle Street, Suite 400, 60602, Attention: Mr. LeRoy
T. Carlson, Chairman, with a copy to Sidley & Austin, One First National Plaza,
Chicago, Illinois 60603, Attention: David J. Boyd, Esq., or, if to Camden, to:
Camden Telephone Company, Inc., 170 West Main Street, Camden, Indiana
46917-0066, Attention: Mr. Jack Ford, with a copy to: Dick N. Bishop, Esq.,
Bishop, Bishop & Bishop, 19 South Center Street, Flora, Indiana 46929. Any party
hereto may specify a different address for such purpose by notice to the
parties.
SECTION 13. CONFIDENTIAL NATURE OF INFORMATION. Each party agrees that, except
for the furnishing of the Proxy Statement to shareholders of Camden and as
otherwise required by law, it will treat in strict confidence all documents,
materials and other information which it has obtained regarding the parties
during the course of the negotiations leading to the consummation of the
transactions provided for herein, and the preparation of this Agreement. Each
party hereto agrees that, except for the furnishing of the Proxy Statement to
shareholders of Camden and as otherwise required by law, it will not release or
cause or permit to be released this Agreement or any part thereof or any copy of
the foregoing without the express written consent of the other parties hereto.
SECTION 14. TERMINATION AND ABANDONMENT. Anything contained in this Agreement to
the contrary notwithstanding, this Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Date:
(a) by mutual consent of TDS, Sub and Camden;
(b) by TDS, Sub or Camden if a United States federal or state
court of competent jurisdiction or United States federal or state governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action permanently restraining or enjoining
or otherwise prohibiting the transactions contemplated by this Agreement and
such order, decree, ruling or other action shall have become final and
nonappealable; or
(c) as otherwise set forth herein.
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In the event that this Agreement shall be terminated and the
Merger abandoned pursuant to this Section 14, all further obligations of the
parties under this Agreement (other than Sections 11, 13 and 15) shall terminate
without further liability of any party to the others, provided that nothing
herein shall relieve any party from liability for any breach of this Agreement.
SECTION 15. OTHER PROVISIONS.
15.1 Expenses. Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and to
its performance and compliance with all agreements and conditions contained
herein on its part to be performed or complied with.
15.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana, without regard to
the principles of conflict of laws.
15.3 Partial Invalidity. In case any one or more of the
provisions contained herein shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision or provisions had never been contained herein.
15.4 Successors and Assigns; Parties in Interest. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their successors and assigns. TDS shall have the right to assign its rights
to a direct or indirect wholly-owned subsidiary, but any such assignment shall
not change the obligations of TDS as provided herein. Nothing in this Agreement,
expressed or implied, is intended or shall be construed to confer upon any
person, other than the parties and successors and assigns permitted by this
Section 15.4, any right, remedy or claim under or by reason of this Agreement.
15.5 Execution in Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be considered an original
counterpart, and shall become a binding agreement when TDS, Sub and Camden shall
have each executed and delivered one counterpart.
15.6 Titles and Headings. Titles and headings to Sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
15.7 Schedules and Exhibits. The Schedules and Exhibits
referred to in this Agreement shall be construed with and are an
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integral part of this Agreement to the same extent as if the same had been set
forth verbatim herein.
15.8 Entire Agreement; Amendments and Waivers. This Agreement,
including the Schedules and Exhibits, contains the entire understanding of the
parties hereto with regard to the subject matter contained herein and supersedes
all prior agreements and understandings, whether written or oral. The parties
hereto, by mutual agreement in writing, may amend, modify and supplement this
Agreement at any time before or after the approval of this Agreement by the
holders of Camden shares to the extent permitted by applicable law. No waiver of
any breach of this Agreement shall be held to constitute a waiver of any other
or subsequent breach.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
CAMDEN TELEPHONE COMPANY, INC.
-------------------------------
Name: James R. Sullivan
Title: President
TELEPHONE AND DATA SYSTEMS, INC.
-------------------------------
Name: LeRoy T. Carlson
Title: Chairman
TDS-CAMDEN ACQUISITION CORP.
-------------------------------
Name: George L. Dienes
Title: Vice President
SIGNATURE PAGE OF THE AGREEMENT AND PLAN OF MERGER BY AND AMONG
CAMDEN TELEPHONE COMPANY, INC., TELEPHONE AND
DATA SYSTEMS, INC. AND TDS-CAMDEN ACQUISITION CORP.
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<PAGE>
EXHIBIT A
PLAN OF MERGER
This PLAN OF MERGER, dated as of _________, 1995 is made by
and between Camden Telephone Company, Inc., a corporation organized and existing
under and by virtue of the laws of the State of Indiana (herein called "Camden"
or the "Surviving Corporation"), and TDS-Camden Acquisition Corp., a corporation
organized and existing under and by virtue of the laws of the State of Indiana
(herein called "Sub"). (Camden and TDS are hereinafter sometimes called the
"Constituent Corporations").
W I T N E S S E T H:
WHEREAS, the board of directors of each of the Constituent
Corporations, in consideration of the mutual agreements of each Constituent
Corporation set forth herein, do deem it advisable and generally to the
advantage and welfare of the Constituent Corporations and their respective
shareholders that Sub be merged with and into Camden;
WHEREAS, Camden, Sub and Telephone and Data Systems, Inc., an
Iowa corporation ("TDS"), have entered into an Agreement and Plan of Merger,
(the "Merger Agreement"), providing for the merger (the "Merger") of Sub with
and into Camden;
WHEREAS, Camden has authorized capital stock consisting of 560
shares of common stock, without par value (the "Camden Shares");
WHEREAS, Sub has authorized capital stock of 1,000 shares of
common stock, without par value, of which 100 shares are now issued and
outstanding;
WHEREAS, Sub is a wholly-owned subsidiary of TDS, and TDS has
determined to issue its Common Shares, par value one dollar ($1.00) per share
(the "TDS Common Shares"), in order to consummate the Merger of Sub with and
into Camden, as provided in the Merger Agreement (the "Merger Consideration");
and
WHEREAS, Section 23-1-40 of the Indiana Business Corporation
Law, as amended, authorizes the merger of corporations organized under the
Indiana Business Corporation Law.
NOW, THEREFORE, the Constituent Corporations have agreed and
do hereby agree as follows:
1. The Merger. On the Effective Date, Sub shall be merged into
Camden and the separate existence of Sub shall thereupon cease, and the name of
Camden, as the surviving
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corporation in the Merger (the "Surviving
Corporation"), shall by virtue of the Merger remain "Camden Telephone Company,
Inc." Upon the Effective Date of the Merger, the Surviving Corporation shall be
possessed of all assets and property of every description, and every interest
therein, wherever located, and the rights, privileges, immunities, powers,
franchises and authority of a public as well as of a private nature, of each of
the Constituent Corporations, and all obligations belonging to or due to each of
the Constituent Corporations, shall be vested in the Surviving Corporation
without further act or deed. Title to any real estate or any interest therein
vested in any Constituent Corporation shall not revert or in any way be
impaired by reason of the Merger; that whenever a conveyance, assignment,
transfer, deed or other instrument or act is necessary to vest property or
rights in the Surviving Corporation, the officers of the Constituent
Corporations shall execute, acknowledge and deliver such instruments and do such
acts.
The Surviving Corporation shall be liable for all the
obligations of each Constituent Corporation. All the rights of creditors of each
Constituent Corporation are preserved unimpaired, and all liens upon the
property of any Constituent Corporation are preserved unimpaired, on only the
property affected by such liens immediately prior to the Effective Date of the
Merger.
2. Effective Date of the Merger. The Merger will become
effective upon the filing with the Secretary of State of the State of Indiana
this Plan of Merger together with Articles of Merger as required by the Indiana
Business Corporation Law. When used in this Plan of Merger, the term "Effective
Date" shall mean the date and time at which this Plan of Merger is so filed.
3. Articles of Incorporation; By-Laws; Directors and Officers.
The Articles of Incorporation of Camden as amended shall be the Articles of
Incorporation of the Surviving Corporation after the Effective Date unless and
until amended in accordance with its terms and as provided by law. The By-Laws
of Camden as in effect on the Effective Date shall be the By-Laws of the
Surviving Corporation unless and until amended in accordance with its terms or
the Articles of Incorporation of the Surviving Corporation and as provided by
law. The initial Board of Directors of the Surviving Corporation shall consist
of the directors of Sub immediately prior to the Effective Date, who shall serve
until their respective successors are duly elected and qualified. The officers
of Sub immediately prior to the Effective Date shall be the initial officers of
the Surviving Corporation until their respective successors are duly elected and
qualified.
4. Conversion of Shares. As of the Effective Date, by virtue
of the Merger and without any action on the part of Sub, Camden, the Surviving
Corporation or any holder of any of the following securities:
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(a) Any Camden Shares which are held in the treasury of Camden
shall be cancelled;
(b) All issued and outstanding shares of capital stock of Sub
shall be converted into 100 validly issued, fully paid and nonassessable common
shares, without par value, of the Surviving Corporation; and
(c) The Camden Shares issued and outstanding immediately prior
to the Effective Date (other than Camden Shares to be cancelled pursuant to
Section 4(a) and Dissenting Shares (as defined in Section 5)) shall be converted
into the Merger Consideration.
5. Dissenting Shares. The provisions of Section 4 shall not
apply to Camden Shares (the "Dissenting Shares") held by Camden Shareholders who
do not vote such Camden Shares in favor of the approval and adoption of this
Agreement and the Merger and who deliver a written notice to Camden in the
manner required by Section 23-1-44 of the Indiana Business Corporation Law,
stating the intention to demand payment of the fair value of such Camden Shares
if the Merger is effected, and if such holders of Camden Shares take all other
action required in the manner provided in Section 23-1-44 of the Indiana
Business Corporation Law. Such holders shall be entitled to payment for such
Camden Shares in accordance with the provisions of Section 23-1-44 of the
Indiana Business Corporation Law, if applicable.
6. Terms and Conditions. The obligations of each Constituent
Corporation under this Plan of Merger are subject to the satisfaction or waiver
of the terms and conditions of the Merger Agreement prior to the Effective Time
of the Merger.
7. Termination and Abandonment. Anything contained in this
Plan of Merger to the contrary notwithstanding, this Plan of Merger may be
terminated and the Merger abandoned at any time prior to the Effective Date if
the Merger Agreement is terminated.
8. Amendments. The parties hereto, by mutual agreement in
writing, may amend, modify and supplement this Plan of Merger at any time before
or after the approval of this Plan of Merger by the holders of Camden Shares to
the extent permitted by applicable law.
9. Governing Law. This Plan of Merger shall be governed by and
construed in accordance with the laws of the State of Indiana, without regard to
the principles of conflict of laws.
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IN WITNESS WHEREOF, the parties to this Plan of Merger have
caused this Plan of Merger to be executed on the day and year first above
written.
Attest: TDS-CAMDEN ACQUISITION CORP.
------------------------- By:--------------------------
Stephen P. Fitzell George L. Dienes
Secretary President
Attest: CAMDEN TELEPHONE COMPANY, INC.
------------------------- By:--------------------------
Jo Ann Johnson James R. Sullivan
Treasurer/Secretary President
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EXHIBIT B
[Opinion of Bishop, Bishop & Bishop]
___________, 1995
Telephone and Data Systems, Inc.
Suite 4000
30 North LaSalle Street
Chicago, Illinois 60602
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger dated as of
________, 1995 (the "Agreement") by and among Camden Telephone Company, Inc., an
Indiana corporation ("Camden"), Telephone and Data Systems, Inc., an Iowa
corporation ("TDS"), and TDS-Camden Acquisition Corp., an Indiana corporation
and wholly-owned subsidiary of TDS ("Sub"), providing for (i) the merger of Sub
with and into Camden (the "Merger") and (ii) the conversion of each issued and
outstanding share of common stock, without par value, of Camden into the right
to receive Common Shares, par value $1.00 per share, of TDS, as set forth in the
Agreement. Unless otherwise defined herein, capitalized terms have the meanings
specified in the Agreement.
We have acted as counsel to Camden in connection with the
preparation, execution and delivery of the Agreement and the consummation of the
transactions contemplated thereby. For the purpose of rendering the opinions set
forth herein, we have relied, as to various questions of fact material to such
opinions, upon the representations made in the Agreement and upon certificates
of officers of Camden. We have also examined originals, or copies of originals
certified to our satisfaction, of such agreements, documents, certificates and
other statements of governmental officials and other instruments, have examined
such questions of law and, subject to the limitations set forth herein, 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
<PAGE>
Telephone and Data Systems, Inc.
________, 1995
Page 2
all natural persons and the conformity with the original documents of any copies
thereof submitted to us for our examination.
Based upon the foregoing, subject to the exceptions,
qualifications and limitations set forth hereafter, we are of the opinion that:
1. Camden is a corporation duly organized, validly existing
and in good standing under the laws of the State of Indiana, and has corporate
power and authority to execute and deliver the Agreement, to consummate the
transactions contemplated thereby (including the execution and delivery of the
Plan of Merger and Articles of Merger) and to perform its obligations
thereunder.
2. The execution, delivery and performance of the Agreement by
Camden has been duly authorized by all necessary corporate action of Camden.
Assuming due authorization, execution and delivery by the other parties thereto,
the Agreement is a legal, valid and binding agreement of Camden, enforceable
against Camden in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws of general applicability relating to
or affecting the enforcement of creditors' rights and by the effect of general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
3. The authorized capital of Camden consists of 560 shares of
common stock, without par value, of which 280 shares are issued and outstanding.
Except for the Merger Agreement, there are no agreements, arrangements, options,
warrants, calls, rights or commitments of any character relating to the
issuance, sale, purchase or redemption of any shares of capital stock of Camden.
All of the outstanding Camden Shares are duly authorized, validly issued, fully
paid and nonassessable and were not issued in violation of any pre-emptive of
other rights.
4. The IURC Approval has been obtained and has become final.
Assuming all other necessary consents contemplated by the Agreement have been
obtained, the execution and delivery of the Agreement by Camden do not and will
not result in a breach of the terms, conditions or provisions of, or constitute
a default, an event of default or any event creating rights of termination or
cancellation under (i) the articles of incorporation or by-laws of Camden or
(ii) to our knowledge, any material agreement, indenture, note, mortgage, lease,
license, franchise, permit, judgment, decree, order, statute, rule or regulation
to which Camden is a
<PAGE>
Telephone and Data Systems, Inc.
________, 1995
Page 3
party, by which it is bound, or to which any of its properties are subject.
5. To our knowledge, no consent, authorization, order or
approval of or filing or registration with any administrative agency,
governmental authority or other person or entity is required for the valid
execution, delivery or performance of the Agreement by Camden, except for the
IURC Approval, which has been obtained and has become final.
6. To our knowledge, there is no investigation, claim, action,
suit or other proceeding pending or threatened against Camden which questions
the legality or propriety of the transactions contemplated by the Agreement.
7. On the date of mailing to Camden shareholders and on the
date of the Camden shareholders meeting, the Proxy Statement (other than the
financial statements, financial data, statistical data and supporting schedules
included therein, and any information with respect to or supplied by TDS or Sub,
as to which we express no opinion) complied as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
SEC thereunder, as though Camden were subject to such Act and such rules and
regulations.
In the course of the preparation of the Proxy Statement we
have considered the information set forth therein in light of the matters
required to be set forth therein, and we have participated in conferences with
officers and representatives of Camden, during the course of which the contents
of the Proxy Statement and related matters were discussed. We have not
independently checked the accuracy or completeness of, or otherwise verified,
and accordingly are not passing upon, and do not assume responsibility for, the
accuracy, completeness or fairness of the statements contained in the Proxy
Statement; and we have relied as to materiality, to a large extent, upon the
judgment of officers and representatives of Camden. However, as a result of such
consideration and participation, nothing has come to our attention which causes
us to believe that the Proxy Statement (other than the financial statements,
financial data, statistical data and supporting schedules included therein, and
any information with respect to or supplied by TDS or Sub, as to which we
express no belief), on the date of mailing to Camden shareholders or on the date
of the Camden shareholders' meeting, included any untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
<PAGE>
Telephone and Data Systems, Inc.
________, 1995
Page 4
Any opinion or statement herein which is expressed to be "to
our knowledge" or is otherwise qualified by words of like import means that the
lawyers currently practicing law with this Firm who have had an active
involvement in negotiating the Agreement have no current conscious awareness of
facts or information contrary to such opinion or statement. Except as otherwise
expressly stated in this letter, no independent investigation with respect to
such facts or information has been undertaken by or on behalf of such lawyers.
This opinion is limited to laws of the State of Indiana. We
are furnishing this opinion to you solely for your benefit in connection with
the above-described transactions; accordingly, it is not to be used, circulated,
quoted, filed with any governmental authority or other regulatory agency or
otherwise referred to or utilized for any other purpose without our prior
written consent. We assume no obligation to update or supplement this opinion to
reflect any facts or circumstances which may hereafter come to our attention
with respect to the opinions expressed above, including any changes in
applicable law which may hereafter occur.
Very truly yours,
<PAGE>
EXHIBIT C
[Opinion of Sidley & Austin]
___________, 1995
The Stockholders of
Camden Telephone Company, Inc.
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger dated as of
________, 1995 (the "Agreement") by and among Camden Telephone Company, Inc., an
Indiana corporation ("Camden"), Telephone and Data Systems, Inc., an Iowa
corporation ("TDS"), and TDS-Camden Acquisition Corp., an Indiana corporation
and a wholly-owned subsidiary of TDS ("Sub"), providing for (i) the merger of
Sub with and into Camden (the "Merger") and (ii) the conversion of each issued
and outstanding share of common stock, without par value, of Camden into the
right to receive Common Shares, par value $1.00 per share, of TDS, as set forth
in the Agreement. Unless otherwise defined herein, capitalized terms have the
meanings specified in the Agreement.
We have acted as counsel to TDS in connection with the
preparation, execution and delivery of the Agreement and the consummation of the
transactions contemplated thereby. For the purpose of rendering the opinions set
forth herein, we have relied, as to various questions of fact material to such
opinions, upon the representations made in the Agreement and upon certificates
of officers of TDS. We have also examined originals, or copies of originals
certified to our satisfaction, of such agreements, documents, certificates and
other statements of governmental officials and other instruments, have examined
such questions of law and, subject to the limitations set forth herein, 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.
<PAGE>
Stockholders of
Camden Telephone Company, Inc.
________, 1995
Page 2
Based upon the foregoing, subject to the exceptions,
qualifications and limitations set forth hereafter, we are of the opinion that:
1. TDS is a corporation duly incorporated and validly existing
under the laws of the State of Iowa, and has corporate power and authority to
execute and deliver the Agreement, to consummate the transactions contemplated
thereby and to perform its obligations thereunder.
2. The execution, delivery and performance of the Agreement by
TDS have been duly authorized by all necessary corporate action of TDS.
3. The TDS Common Shares being issued on the date hereof in
connection with the Agreement, when certificates therefor have been duly
executed, countersigned and registered and delivered against payment of the
agreed consideration therefor, will be duly authorized and validly issued Common
Shares of TDS which are fully paid and nonassessable, and the issuance of such
TDS Common Shares pursuant to the Agreement and the Merger have been registered
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), and, subject to notice of official issuance,
will be listed for trading on the American Stock Exchange.
4. Assuming the IURC Approval and all other necessary consents
contemplated by the Agreement have been obtained, the execution and delivery of
the Agreement by TDS do not and will not result in a breach of the terms,
conditions or provisions of, or constitute a default, an event of default or any
event creating rights of termination or cancellation under (i) the articles of
incorporation or by-laws of TDS or (ii) to our knowledge, any material
agreement, indenture, note, mortgage, lease, license, franchise, permit,
judgment, decree, order, statute, rule or regulation to which TDS is a party, by
which TDS is bound, or to which any of its properties is subject.
5. To our knowledge, no consent, authorization, order or
approval of or filing or registration with any administrative agency,
governmental authority or other person or entity is required for the valid
execution, delivery or performance of the Agreement by TDS, except for those
duly obtained or waived as contemplated by the Agreement on or prior to the date
hereof.
6. To our knowledge, there is no investigation, claim, action,
suit or other proceeding pending or threatened against TDS
<PAGE>
Stockholders of
Camden Telephone Company, Inc.
________, 1995
Page 3
which questions the legality or propriety of the transactions contemplated by
the Agreement.
7. On the date of mailing to holders of Camden Shares and on
the date of the Camden shareholders' meeting, the Proxy Statement (other than
the financial statements, financial data, statistical data and supporting
schedules included therein, and any information with respect to or supplied by
Camden, as to which we express no opinion) complied as to form in all material
respects with the requirements of the Securities Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and the rules and regulations of
the SEC thereunder.
In the course of the preparation of the Proxy Statement we
have considered the information set forth therein in light of the matters
required to be set forth therein, and we have participated in conferences with
officers and representatives of TDS and Sub, during the course of which the
contents of the Prospectus and related matters were discussed. We have not
independently checked the accuracy or completeness of, or otherwise verified,
and accordingly are not passing upon, and do not assume responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Prospectus; and we have relied as to materiality, to a large extent, upon the
judgment of officers and representatives of TDS and Sub. However, as a result of
such consideration and participation, nothing has come to our attention which
causes us to believe that the Morser Registration Statement or the Prospectus
(other than the financial statements, financial data, statistical data and
supporting schedules included therein, and any information with respect to or
supplied by Camden, as to which we express no belief), on the date of mailing to
Camden shareholders or on the date of the Camden shareholders' meeting, included
any untrue statement of a material fact relating to TDS or Sub or omitted to
state a material fact relating to TDS or Sub necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Any opinion or statement herein which is expressed to be "to
our knowledge" or is otherwise qualified by words of like import means that the
lawyers currently practicing law with this Firm who have had an active
involvement in negotiating the Agreement have no current conscious awareness of
facts or information contrary to such opinion or statement. Except as otherwise
expressly stated in this letter, no independent investigation with respect to
such facts or information has been undertaken by or on behalf of such lawyers.
<PAGE>
Stockholders of
Camden Telephone Company, Inc.
________, 1995
Page 4
Except as expressly stated in the next sentence, this opinion
is limited to the Securities Act. Insofar as the opinions expressed in
paragraphs 1, 2, 3 and 4 above relate to matters governed by the laws of the
State of Iowa, we have not made an independent examination of such laws, but
have relied exclusively, with your consent, as to such laws, upon the attached
opinion of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell & O'Brien, P.C.,
of Des Moines, Iowa, subject to all the qualifications, exceptions and
limitations stated therein.
TDS is controlled by a voting trust. Walter C.D. Carlson, a
trustee and a beneficiary of such voting trust and a director of TDS, Michael G.
Hron, the Secretary of TDS, Sub and certain other TDS subsidiaries, Stephen P.
Fitzell, the Secretary of certain TDS subsidiaries, and Sherry S. Treston, the
Assistant Secretary of certain TDS subsidiaries, are partners of this Firm.
We are furnishing this opinion to you solely for your benefit
in connection with the above-described transactions; accordingly, it is not to
be used, circulated, quoted, filed with any governmental authority or other
regulatory agency or otherwise referred to or utilized for any other purpose
without our prior written consent. We assume no obligation to update or
supplement this opinion to reflect any facts or circumstances which may
hereafter come to our attention with respect to the opinions expressed above,
including any changes in applicable law which may hereafter occur.
Very truly yours,
Sidley & Austin
<PAGE>
EXHIBIT D
[Opinion of Special Indiana Counsel to TDS and Sub]
___________, 1995
The Stockholders of
Camden Telephone Company, Inc.
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger dated as of
________, 1995 (the "Agreement") by and among Camden Telephone Company, Inc., an
Indiana corporation ("Camden"), Telephone and Data Systems, Inc., an Iowa
corporation ("TDS"), and TDS-Camden Acquisition Corp., an Indiana corporation
and wholly-owned subsidiary of TDS ("Sub"), providing for (i) the merger of Sub
with and into Camden (the "Merger") and (ii) the conversion of each issued and
outstanding share of common stock, without par value, of Camden into the right
to receive Common Shares, par value $1.00 per share, of TDS, as set forth in the
Agreement. Unless otherwise defined herein, capitalized terms have the meanings
specified in the Agreement.
We have acted as special Indiana counsel to TDS and Sub in
connection with the preparation, execution and delivery of the Agreement and the
consummation of the transactions contemplated thereby. For the purpose of
rendering the opinions set forth herein, we have relied, as to various questions
of fact material to such opinions, upon the representations made in the
Agreement and upon certificates of officers of TDS and Sub. We have also
examined originals, or copies of originals certified to our satisfaction, of
such agreements, documents, certificates and other statements of governmental
officials and other instruments, have examined such questions of law and,
subject to the limitations set forth herein, 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.
<PAGE>
Stockholders of
Camden Telephone Company, Inc.
________, 1995
Page 2
Based upon the foregoing, subject to the exceptions,
qualifications and limitations set forth hereafter, we are of the opinion that:
1. Sub is a corporation duly organized, validly existing and
in good standing under the laws of the State of Indiana, and has corporate power
and authority to execute and deliver the Agreement, to consummate the
transactions contemplated thereby (including the execution and delivery of the
Plan of Merger and Articles of Merger) and to perform its obligations
thereunder.
2. The execution, delivery and performance of the Agreement by
Sub has been duly authorized by all necessary corporate action of Sub. Assuming
due authorization, execution and delivery by the other parties thereto, the
Agreement is a legal, valid and binding agreement of TDS and Sub, enforceable
against TDS and Sub in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws of general applicability relating to
or affecting the enforcement of creditors' rights and by the effect of general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
3. The IURC Approval has been obtained and has become final.
Assuming all other necessary consents contemplated by the Agreement have been
obtained, the execution and delivery of the Agreement by TDS and Sub do not and
will not result in a breach of the terms, conditions or provisions of, or
constitute a default, an event of default or any event creating rights of
termination or cancellation under (i) the articles of incorporation or by-laws
of Sub or (ii) to our knowledge, any material agreement, indenture, note,
mortgage, lease, license, franchise, permit, judgment, decree, order, statute,
rule or regulation to which TDS or Sub is a party, by which either of them is
bound, or to which any of their respective properties is subject.
4. To our knowledge, no consent, authorization, order or
approval of or filing or registration with any administrative agency,
governmental authority or other person or entity is required for the valid
execution, delivery or performance of the Agreement by TDS and Sub, except for
the IURC Approval, which has been obtained and has become final.
5. To our knowledge, there is no investigation, claim, action,
suit or other proceeding pending or threatened against TDS
<PAGE>
Stockholders of
Camden Telephone Company, Inc.
________, 1995
Page 3
or Sub which questions the legality or propriety of the transactions
contemplated by the Agreement.
Any opinion or statement herein which is expressed to be "to
our knowledge" or is otherwise qualified by words of like import means that the
lawyers currently practicing law with this Firm who have had an active
involvement in negotiating the Agreement have no current conscious awareness of
facts or information contrary to such opinion or statement. Except as otherwise
expressly stated in this letter, no independent investigation with respect to
such facts or information has been undertaken by or on behalf of such lawyers.
This opinion is limited to the laws of the State of Indiana.
We are furnishing this opinion to you solely for your benefit in connection with
the above-described transactions; accordingly, it is not to be used, circulated,
quoted, filed with any governmental authority or other regulatory agency or
otherwise referred to or utilized for any other purpose without our prior
written consent. We assume no obligation to update or supplement this opinion to
reflect any facts or circumstances which may hereafter come to our attention
with respect to the opinions expressed above, including any changes in
applicable law which may hereafter occur.
Very truly yours,
<PAGE>
EXHIBIT E-1
CONSULTING AGREEMENT
CONSULTING AGREEMENT made as of ___________, 1995, by and
between CAMDEN TELEPHONE COMPANY, INC., an Indiana corporation (the "Company"),
and Jack Ford ("Consultant").
WHEREAS, pursuant to that certain Agreement and Plan of
Merger, dated as of __________, 1995, by and among Telephone and Data Systems,
Inc. ("TDS"), TDS-Camden Acquisition Corp. ("Sub") and the Company, TDS has on
the date hereof acquired all of the outstanding capital stock of the Company
pursuant to a merger of Sub with and into the Company;
WHEREAS, the Consultant has entered into an Employment
Agreement dated as of the date hereof (the "Employment Agreement") pursuant to
which he will serve as General Manager of the Company for a term ending on the
earlier of (a) ___________, 2000 or (b) the date on which Consultant elects to
retire from the Company pursuant to Section 6(b) of the Employment Agreement
(the "Employment Termination Date");
WHEREAS, the Consultant has considerable knowledge and
experience regarding the business, affairs, customers and operations of the
Company (the "Business"); and
WHEREAS, in consideration of such knowledge and experience,
the Company desires to provide for the services of Consultant under the terms
and conditions as hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing and the
mutual promises and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Engagement. The Company agrees to engage Consultant and
Consultant agrees to provide consulting services to the Company in accordance
with the terms and conditions hereinafter contained.
2. Term. Consultant shall provide consulting services to the
Company for the term of five (5) years commencing on the Employment Termination
Date (the "Term").
3. Duties. Consultant shall undertake to provide consulting
and advisory services for and on behalf of, and in the manner and to the extent
reasonably requested by, the Company or TDS. Such consulting services shall
include (i) being accessible, via phone or in person, to answer operational
questions relating to Camden, (ii) overseeing special projects, such as
community service
<PAGE>
or awareness projects of a short duration and with at least 30 days advance
notice, (iii) representation of the Company and TDS at Indiana Telephone
Association meetings and on any committee thereof
which the Company's board recommends, and, (iv) with appropriate advance notice,
assisting TDS Development Team members in their acquisition efforts with respect
to other independent telephone companies in Indiana. Such services shall be
performed in the geographic areas in which Consultant has heretofore performed
services for the Company, and Consultant shall not be required to accept
assignments elsewhere without his consent.
Consultant shall at all times during the Term be an
independent contractor, rather than a co-venturer, agent, employee or
representative of the Company. The Company hereby acknowledges and agrees that
Consultant may render consulting, employment or other services to other
businesses during the Term, subject to the condition that such services shall
not be detrimental to the interests of the Company or TDS. During the Term
hereunder, Consultant shall take no action which would jeopardize or impair in
any way the Business or the interests of the Company or TDS.
4. Expense. Consultant's actual and reasonable expenses
incurred upon the specific request of the Company in connection with the duties
and responsibilities under this Agreement shall be paid for by the Company upon
presentment of vouchers covering such expenses in accordance with standard TDS
policies.
5. Compensation.
(a) The Company shall pay to Consultant during the Term
hereunder a retainer at an annual rate equal to 40% of the base annual salary
being paid to him on the Employment Termination Date pursuant to the Employment
Agreement.
(b) The compensation payable pursuant to paragraph (a) of this
Section shall be deemed to accrue ratably during the calendar year and shall be
paid monthly.
(c) Except as provided in the Employment Agreement with
respect to benefits payable to Mr. Ford as a retired employee of a TDS
subsidiary, Consultant shall not be entitled to any employee benefits hereunder,
including, but not limited to, medical, dental or life insurance, pension,
vacation, disability, sick pay or any other benefits under plans or policies
maintained from time to time by the Company or TDS.
6. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Company and any successor to the
Company, and any such successor shall be deemed substituted for the Company
under the provisions of this Agreement. For the purposes of the Agreement, the
term "successor" shall mean
-2-
<PAGE>
any person, firm, corporation or other business
equity which at any time, whether by merger, purchase, liquidation or otherwise,
shall acquire all or substantially all of the assets or business of the Company.
The Consultant's obligations hereunder are hereby expressly declared to be
nonassignable and nontransferable.
7. Notices. Any notice given or required hereunder may be
served by personal delivery or by leaving the same at or by sending the same by
first-class post addressed to:
(a) in the case of the Company, at its principal executive
office at the time being;
(b) in the case of the Consultant, at the Consultant's address
on the records of the Company; or
(c) in the case of either party, such other address as shall
have been notified in writing to the other party for the purposes of service
hereunder.
8. Termination of Existing Terms of Service. Except for the
Employment Agreement and as otherwise provided herein, this Agreement is in
substitution for all previous contracts or arrangements, including terms of
employment (express or implied) between the Company and the Consultant, which
shall be deemed to have been terminated by mutual consent as of the date of this
Agreement.
9. Amendment. No modification, amendment or waiver of any of
the provisions of this Agreement shall be effective unless in writing
specifically referring hereto and signed by both parties.
10. Entire Agreement. This instrument constitutes the entire
agreement of the parties hereto with respect to the Consultant's duties and
obligations and compensation therefor.
11. No Waiver. The failure to enforce at any time any of the
provisions of this Agreement or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed as a wavier
of such provisions or to affect either the validity of this Agreement, or any
party hereof, or the right of either party thereafter to enforce each and every
such provision in accordance with the terms of this Agreement.
12. Governing Law. All questions pertaining to the validity,
construction, execution, and performance of this Agreement shall be construed in
accordance with and governed by the laws of the State of Indiana.
13. Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the
-3-
<PAGE>
other provisions of this Agreement and shall be construed in all respects as
if such invalid or unenforceable provisions were omitted. While provisions of
this Agreement are considered by the parties to be fair and reasonable in all
the circumstances, it is agreed that if any of such provisions shall be
adjudged to be void or ineffective for whatever reason, but would be adjudged
to be valid and effective if part of the wording thereof were deleted or the
periods thereof reduced or the area thereof reduced in scope, the said
restrictions shall apply with such modifications as may be necessary to make
them valid and effective.
14. Counterparts. This Agreement may be executed in any number
of counterparts and all such counterparts signed in the aggregate by all parties
hereto shall constitute a single original instrument.
IN WITNESS WHEREOF, the parties hereof have caused this
instrument to be duly executed as of the day and year first above written.
COMPANY: CAMDEN TELEPHONE COMPANY, INC.
By:---------------------------
Name:
Title:
CONSULTANT: ------------------------------
Name: Jack Ford
SIGNATURE PAGE TO
CONSULTING AGREEMENT
JACK FORD
<PAGE>
EXHIBIT E-2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of ___________, 1995, by and
between CAMDEN TELEPHONE COMPANY, INC., an Indiana corporation (the "Company"),
and Jack Ford ("Employee").
WHEREAS, pursuant to that certain Agreement and Plan of
Merger, dated as of __________, 1995, by and among Telephone and Data Systems,
Inc. ("TDS"), TDS-Camden Acquisition Corp. ("Sub") and the Company, TDS has on
the date hereof acquired all of the outstanding capital stock of the Company
pursuant to a merger of Sub with and into the Company;
WHEREAS, the Employee has been employed as General Manager of
the Company for __ years and accordingly has considerable knowledge and
experience regarding the business, affairs, customers and operations of the
Company (the "Business"); and
WHEREAS, in consideration of such knowledge and experience,
the Company desires to provide for the employment of Employee under the terms
and conditions as hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing and the
mutual promises and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Employment. The Company agrees to employ Employee and
Employee agrees to accept employment with the Company in accordance with the
terms and conditions hereinafter contained.
2. Term. Subject to the right of the Company under Section
6(a) to terminate Employee's employment and to Employee's rights under Section
6(b), Employee shall serve the Company for the term of five (5) years commencing
on the date of this Agreement (the "Term") and thereafter at the will of each of
the Company and the Employee until such employment is terminated by either
party.
3. Duties. Employee shall continue to serve as General Manager
of the Company with substantially the same duties and responsibilities as he
currently has and shall have such other responsibilities and shall perform such
other duties as shall be mutually established by the Company and the Employee
from time to time (the "Duties"). During employment hereunder, Employee shall
devote full time to the business and affairs of the Company to perform such
Duties, and shall take no action, or fail to take any action, which would
jeopardize or impair in any way the Business
<PAGE>
and shall use such Employee's best efforts to advance the best interests of the
Company and TDS at all times.
4. Place of Performance. Except as mutually agreed by Employee
and the Company, Employee shall perform the Duties hereunder at the offices of
the Company but may be required to travel and render services in different
locations from time to time, on a temporary basis only, in the performance of
such Duties.
5. Compensation and Benefits.
(a)(i) During the period from the date of this Agreement until
December 31, 1995, the Company shall pay to Employee a salary at an annual rate
equal to the annual rate being paid by the Company to Employee on the date
hereof.
(ii) During each calendar year during the Term after December
31, 1995, the Company shall pay to Employee a salary at an annual rate equal to
the average compensation (as reported in the annual National Telephone Company
Association ("NTCA") survey) paid by reporting NTCA member companies located in
the Northeast Region to their General Managers (NTCA Table No. 6) during the
prior year.
(b) The salary payable pursuant to paragraph (a) of this
Section shall be deemed to accrue ratably during the calendar year and shall be
paid according to the normal payroll periods of the Company. In the event
Employee's employment is terminated pursuant to Section 6, payment shall be made
for the portion of the payroll period during which Employee was employed on a
pro rata basis.
(c) Subject to Section 6(b), the salary arrangements pursuant
to paragraph (a) of this Section shall terminate upon the retirement,
termination, death or permanent disability of Employee and no further payment
thereof shall be made.
(d) The Employee shall be entitled to elect either (i) to
continue to participate in the 100% Company paid group medical, dental,
long-term disability and term insurance plans provided by Lincoln National Life
Insurance Company to employees of the Company on the date hereof or (ii) to be
covered by the group medical, dental, disability and life insurance plans
maintained from time to time by TDS and available to employees of TDS' other
telephone company subsidiaries, subject to all other eligibility requirements
applicable to TDS employees generally. Any election by Employee to be covered by
such TDS plans shall be final and Employee shall thereafter have no right to
elect or reelect to be covered by the Company plans referred to in (i) above.
(e) Employee shall be entitled to continue to participate in
the Company's pension benefit plan (the "Existing Camden Plan") unless such
participation or the continuation of the
-2-
<PAGE>
Existing Camden Plan after the date
hereof has the effect of terminating the tax-qualified status (under Section
401(a) of the Internal Revenue Code) of the Existing Camden Plan or the TDS Plan
(as defined below). In such event (i) Employee's participation in the Existing
Camden Plan shall be terminated and Employee shall participate in the then
current TDS pension plan applicable to employees of TDS' other telephone company
subsidiaries (the "TDS Plan"); and (ii) TDS shall, if necessary, supplement the
benefits available to Employee upon his retirement from the Company to the
extent necessary to make the aggregate retirement benefits payable to Employee
at least equal to those payable under the Existing Camden Plan. Upon retirement,
Employee shall be entitled to participate in the TDS then existing retirement
medical and insurance benefits, subject to clause (g) below.
(f) Employee shall be entitled to participate in TDS' 401(k)
Tax-Deferred Savings Plan and Trust and TDS' Employee Stock Purchase Plan.
(g) For the purposes of clauses (d), (e) and (f) above, and
participation by Employee in the TDS employee or retiree benefit plans mentioned
therein, (i) Employee's participation shall be subject to all eligibility
standards applicable to such plans applicable to all employees of TDS and its
affiliates and (ii) Employee shall be credited with his prior years of service
with Camden to the extent permitted by such plans and standards.
(h) During the Term, the Employee will be entitled to receive
the customary $500 Christmas bonus paid by the Company in the past.
(i) During the Term, the Employee shall be entitled to
receive, at the cost of the Company, local exchange telephone service so long as
Employee lives within the Camden exchange area.
(j) During the Term, Employee shall be entitled to the number
of vacation days and holiday periods as are in accordance with applicable TDS
policy for employees of its other telephone company subsidiaries.
(k) During the Term, the Company's vehicle replacement
program, as it exists on the date hereof, shall be applicable to Employee.
(l) Employee shall be entitled to reimbursement for business
travel and professional education related expenses in accordance with TDS's
standard company policy.
6. Termination. (a) Without prejudice to any other rights it
may have, the Company shall have the right by notice in writing given to
Employee to terminate this Agreement and the Employee's employment hereunder if:
-3-
<PAGE>
(i) Employee shall be guilty of gross negligence in connection
with the Duties hereunder;
(ii) Employee fails to satisfactorily perform the Duties
hereunder or to comply with reasonable directions or regulations of the Company
or TDS, or Employee fails to observe and perform the terms and provisions of
this Agreement; or
(iii) Employee shall be convicted of a crime involving
dishonesty or moral turpitude.
(b) At anytime after the first anniversary of the execution of
this Agreement, Employee shall have the right to retire from the Company and
receive (on the date of such retirement) a single lump sum severance benefit
equal to the product obtained by multiplying (x) his average annual compensation
during the five calendar years immediately preceding his retirement date, by (y)
the lesser of (i) the number of years remaining in the Term, or (ii) 2.99. The
foregoing severance payment shall be in lieu of and in full satisfaction of all
of the Company's remaining obligations under this Agreement except for the
payment of applicable pension and retiree medical and insurance benefits.
7. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Company and any successor to the
Company, and any such successor shall be deemed substituted for the Company
under the provisions of this Agreement. For the purposes of the Agreement, the
term "successor" shall mean any person, firm, corporation or other business
equity which at any time, whether by merger, purchase, liquidation or otherwise,
shall acquire all or substantially all of the assets or business of the Company.
The Employee's obligations hereunder are hereby expressly declared to be
nonassignable and nontransferable.
8. Notices. Any notice given or required hereunder may be
served by personal delivery or by leaving the same at or by sending the same by
first-class post addressed to:
(a) in the case of the Company, at its principal executive
office at the time being;
(b) in the case of the Employee, at the Employee's address on
the records of the Company; or
(c) in the case of either party, such other address as shall
have been notified in writing to the other party for the purposes of service
hereunder.
9. Termination of Existing Terms of Service. Except as
otherwise provided herein, this Agreement is in substitution for all previous
contracts or terms of employment (express or implied)
-4-
<PAGE>
between the Company and the Employee, which shall be deemed to have been
terminated by mutual consent as of the date of this Agreement.
10. Amendment. No modification, amendment or waiver of any of
the provisions of this Agreement shall be effective unless in writing
specifically referring hereto and signed by both parties.
11. Entire Agreement. This instrument constitutes the entire
agreement of the parties hereto with respect to the Employee's duties and
obligations and compensation therefor.
12. No Waiver. The failure to enforce at any time any of the
provisions of this Agreement or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed as a wavier
of such provisions or to affect either the validity of this Agreement, or any
party hereof, or the right of either party thereafter to enforce each and every
such provision in accordance with the terms of this Agreement.
13. Governing Law. All questions pertaining to the validity,
construction, execution, and performance of this Agreement shall be construed in
accordance with and governed by the laws of the State of Indiana.
14. Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions of
this Agreement and shall be construed in all respects as if such invalid or
unenforceable provisions were omitted. While provisions of this Agreement are
considered by the parties to be fair and reasonable in all the circumstances, it
is agreed that if any of such provisions shall be adjudged to be void or
ineffective for whatever reason, but would be adjudged to be valid and effective
if part of the wording thereof were deleted or the periods thereof reduced or
the area thereof reduced in scope, the said restrictions shall apply with such
modifications as may be necessary to make them valid and effective.
15. Counterparts. This Agreement may be executed in any number
of counterparts and all such counterparts signed in the aggregate by all parties
hereto shall constitute a single original instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereof have caused this
instrument to be duly executed as of the day and year first above written.
COMPANY: CAMDEN TELEPHONE COMPANY, INC.
By:---------------------------
Name:
Title:
EMPLOYEE: ------------------------------
Name: Jack Ford
SIGNATURE PAGE TO
EMPLOYMENT AGREEMENT
JACK FORD
<PAGE>
EXHIBIT E-3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of ___________, 1995, by and
between CAMDEN TELEPHONE COMPANY, INC., an Indiana corporation (the "Company"),
and Robert McCain ("Employee").
WHEREAS, pursuant to that certain Agreement and Plan of
Merger, dated as of __________, 1995, by and among Telephone and Data Systems,
Inc. ("TDS"), TDS-Camden Acquisition Corp. ("Sub") and the Company, TDS has on
the date hereof acquired all of the outstanding capital stock of the Company
pursuant to a merger of Sub with and into the Company;
WHEREAS, the Employee has considerable knowledge and
experience regarding the business, affairs, customers and operations of the
Company (the "Business"); and
WHEREAS, in consideration of such knowledge and experience,
the Company desires to provide for the employment of Employee under the terms
and conditions as hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing and the
mutual promises and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Employment. The Company agrees to employ Employee and
Employee agrees to accept employment with the Company in accordance with the
terms and conditions hereinafter contained.
2. Term. Subject to the right of the Company under Section 6
to terminate Employee's employment, Employee shall serve the Company for the
term of ten (10) years commencing on the date of this Agreement (the "Term") and
thereafter at the will of each of the Company and the Employee until such
employment is terminated by either party. If Employee completes the full
ten-year Term hereunder, and suitable employment opportunities then no longer
exist at the Company, Employee shall be offered employment opportunities at
other TDS companies.
3. Duties. Employee shall continue to serve as Assistant
Manager of the Company with substantially the same duties and responsibilities
as he currently has and shall have such other responsibilities and shall perform
such other duties as shall be mutually established by the Company and the
Employee from time to time (the "Duties"). During employment hereunder, Employee
shall devote full time to the business and affairs of the Company to perform
such Duties, and shall take no action, or fail to take any action, which would
jeopardize or impair in any way the Business
<PAGE>
and shall use such Employee's best efforts to advance the best interests of
the Company and TDS at all times.
4. Place of Performance. Except as mutually agreed by Employee
and the Company, Employee shall perform the Duties hereunder at the offices of
the Company but may be required to travel and render services in different
locations from time to time, on a temporary basis only, in the performance of
such Duties.
5. Compensation and Benefits.
(a)(i) During the period from the date of this Agreement until
December 31, 1995, the Company shall pay to Employee a salary at an annual rate
equal to the annual rate being paid by the Company to Employee on the date
hereof.
(ii) During each calendar year during the Term after December
31, 1995, the Company shall pay to Employee a salary at an annual rate equal to
the average compensation (as reported in the annual National Telephone Company
Association ("NTCA") survey) paid by reporting NTCA member companies located in
the Northeast Region to their Assistant Managers (NTCA Table No. 15) during the
prior year; provided that, if Employee is promoted to a new position within
Camden during the Term, Employee's salary thereafter shall be the average
compensation so reported on the NTCA Table which corresponds to such new
position.
(b) The salary payable pursuant to paragraph (a) of this
Section shall be deemed to accrue ratably during the calendar year and shall be
paid according to the normal payroll periods of the Company. In the event
Employee's employment is terminated pursuant to Section 6, payment shall be made
for the portion of the payroll period during which Employee was employed on a
pro rata basis.
(c) The salary arrangements pursuant to paragraph (a) of this
Section shall terminate upon the termination, death or permanent disability of
Employee and no further payment thereof shall be made.
(d) The Employee shall be entitled to elect either (i) to
continue to participate in the 100% Company paid medical, dental, long-term
disability and group term insurance plans provided by Lincoln National Life
Insurance Company to employees of the Company on the date hereof or (ii) to be
covered by the group medical, dental, disability and life insurance plans
maintained from time to time by TDS and available to employees of TDS' other
telephone company subsidiaries, subject to all other eligibility requirements
applicable to TDS employees generally. Any election by Employee to be covered by
such TDS plans shall be final and Employee shall thereafter have no right to
elect or reelect to be covered by the Company plans referred to in (i) above.
-2-
<PAGE>
(e) Reference is made to the Employment Agreement dated the
date hereof between Mr. Jack Ford and the Company (the "Ford Agreement"). For so
long as Mr. Ford continues to be the General Manager of the Company pursuant to
the Ford Agreement (but not after the 10th anniversary of this Agreement),
Employee shall be entitled to continue to participate in the Company's pension
benefit plan (the "Existing Camden Plan") unless such participation or the
continuation of the Existing Camden Plan after the date hereof has the effect of
terminating the tax-qualified status (under Section 401(a) of the Internal
Revenue Code) of the Existing Camden Plan or the TDS Plan (as such term is
defined below). In such event (i) Employee's participation in the Existing
Camden Plan shall be terminated and Employee shall participate in the then
current TDS pension plan applicable to employees of TDS' other telephone company
subsidiaries (the "TDS Plan"); and (ii), if Employee should retire from the
Company on or prior to the date (the "Ford Termination Date") on which Jack
Ford is no longer employed by the Company pursuant to the Ford Agreement, TDS
shall, if necessary, supplement the benefits available to Employee upon such
retirement from the Company to the extent necessary to make the aggregate
retirement benefits payable to Employee at least equal to those payable under
the Existing Camden Plan. From and after the Ford Termination Date, Employee
shall participate in the TDS Plan and TDS shall have no obligation to supplement
the benefits provided thereunder. Upon retirement, Employee shall be entitled
to participate in the then existing TDS retirement medical and insurance benefit
programs, subject to clause (g) below.
(f) Employee shall be entitled to participate in TDS' 401(k)
Tax-Deferred Savings Plan and Trust and TDS' Employee Stock Purchase Plan.
(g) For the purposes of clauses (d), (e) and (f) above, and
participation by Employee in the TDS employee or retiree benefit plans mentioned
therein, (i) Employee's participation shall be subject to all eligibility
standards applicable to such plans applicable to all employees of TDS and its
affiliates and (ii) Employee shall be credited with his prior years of service
with Camden to the extent permitted by such plans and standards.
(h) During the Term, the Employee will be entitled to receive
the customary $500 Christmas bonus paid by the Company in the past.
(i) During the Term, the Employee shall be entitled to
receive, at the cost of the Company, local exchange telephone service so long as
Employee lives within the Camden exchange area.
(j) During the Term, Employee shall be entitled to the number
of vacation days and holiday periods as are in accordance with applicable TDS
policy for employees of its other telephone company subsidiaries.
-3-
<PAGE>
(k) For the first five years of the Term, the Company's
vehicle replacement program, as it exists on the date hereof, shall remain in
effect if applicable to Employee.
(l) Employee shall be entitled to reimbursement for business
travel and professional education related expenses in accordance with TDS's
standard company policy.
6. Termination. Without prejudice to any other rights it may
have, the Company shall have the right by notice in writing given to Employee to
terminate this Agreement and the Employee's employment hereunder if:
(a) Employee shall be guilty of gross negligence in connection
with the Duties hereunder;
(b) Employee fails to satisfactorily perform the Duties
hereunder or to comply with reasonable directions or regulations of the Company
or TDS, or Employee fails to observe and perform the terms and provisions of
this Agreement; or
(c) Employee shall be convicted of a crime involving
dishonesty or moral turpitude.
7. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Company and any successor to the
Company, and any such successor shall be deemed substituted for the Company
under the provisions of this Agreement. For the purposes of the Agreement, the
term "successor" shall mean any person, firm, corporation or other business
equity which at any time, whether by merger, purchase, liquidation or otherwise,
shall acquire all or substantially all of the assets or business of the Company.
The Employee's obligations hereunder are hereby expressly declared to be
nonassignable and nontransferable.
8. Notices. Any notice given or required hereunder may be
served by personal delivery or by leaving the same at or by sending the same by
first-class post addressed to:
(a) in the case of the Company, at its principal executive
office at the time being;
(b) in the case of the Employee, at the Employee's address on
the records of the Company; or
(c) in the case of either party, such other address as shall
have been notified in writing to the other party for the purposes of service
hereunder.
9. Termination of Existing Terms of Service. Except as
otherwise provided herein, this Agreement is in substitution for all previous
contracts or terms of employment (express or implied)
-4-
<PAGE>
between the Company and the Employee, which shall be deemed to have been
terminated by mutual consent as of the date of this Agreement.
10. Amendment. No modification, amendment or waiver of any of
the provisions of this Agreement shall be effective unless in writing
specifically referring hereto and signed by both parties.
11. Entire Agreement. This instrument constitutes the entire
agreement of the parties hereto with respect to the Employee's duties and
obligations and compensation therefor.
12. No Waiver. The failure to enforce at any time any of the
provisions of this Agreement or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed as a wavier
of such provisions or to affect either the validity of this Agreement, or any
party hereof, or the right of either party thereafter to enforce each and every
such provision in accordance with the terms of this Agreement.
13. Governing Law. All questions pertaining to the validity,
construction, execution, and performance of this Agreement shall be construed in
accordance with and governed by the laws of the State of Indiana.
14. Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions of
this Agreement and shall be construed in all respects as if such invalid or
unenforceable provisions were omitted. While provisions of this Agreement are
considered by the parties to be fair and reasonable in all the circumstances, it
is agreed that if any of such provisions shall be adjudged to be void or
ineffective for whatever reason, but would be adjudged to be valid and effective
if part of the wording thereof were deleted or the periods thereof reduced or
the area thereof reduced in scope, the said restrictions shall apply with such
modifications as may be necessary to make them valid and effective.
15. Counterparts. This Agreement may be executed in any number
of counterparts and all such counterparts signed in the aggregate by all parties
hereto shall constitute a single original instrument.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereof have caused this
instrument to be duly executed as of the day and year first above written.
COMPANY: CAMDEN TELEPHONE COMPANY, INC.
By:--------------------------
Name:
Title:
EMPLOYEE:
Name: Robert McCain
SIGNATURE PAGE TO
EMPLOYMENT AGREEMENT
ROBERT MCCAIN
<PAGE>
EXHIBIT E-4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of ___________, 1995, by and
between CAMDEN TELEPHONE COMPANY, INC., an Indiana corporation (the "Company"),
and Brenda Elizalde ("Employee").
WHEREAS, pursuant to that certain Agreement and Plan of
Merger, dated as of __________, 1995, by and among Telephone and Data Systems,
Inc. ("TDS"), TDS-Camden Acquisition Corp. ("Sub") and the Company, TDS has on
the date hereof acquired all of the outstanding capital stock of the Company
pursuant to a merger of Sub with and into the Company;
WHEREAS, the Employee has considerable knowledge and
experience regarding the business, affairs, customers and operations of the
Company (the "Business"); and
WHEREAS, in consideration of such knowledge and experience,
the Company desires to provide for the employment of Employee under the terms
and conditions as hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing and the
mutual promises and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Employment. The Company agrees to employ Employee and
Employee agrees to accept employment with the Company in accordance with the
terms and conditions hereinafter contained.
2. Term. Subject to the right of the Company under Section 6
to terminate Employee's employment, Employee shall serve the Company for the
term of ten (10) years commencing on the date of this Agreement (the "Term") and
thereafter at the will of each of the Company and the Employee until such
employment is terminated by either party. If Employee completes the full
ten-year Term hereunder and suitable employment opportunities then no longer
exist at the Company, Employee shall be offered employment opportunities at
other TDS companies.
3. Duties. Employee shall continue to serve as Public
Affairs/Subscriber Relations Representative of the Company with substantially
the same duties and responsibilities as she currently has and shall have such
other responsibilities and shall perform such other duties as shall be mutually
established by the Company and the Employee from time to time (the "Duties").
During employment hereunder, Employee shall devote full time to the business and
affairs of the Company to perform such Duties, and shall take no action, or fail
to take any action, which would
<PAGE>
jeopardize or impair in any way the Business and shall use such Employee's best
efforts to advance the best interests of the Company and TDS at all times.
4. Place of Performance. Except as mutually agreed by Employee
and the Company, Employee shall perform the Duties hereunder at the offices of
the Company but may be required to travel and render services in different
locations from time to time, on a temporary basis only, in the performance of
such Duties.
5. Compensation and Benefits.
(a)(i) During the period from the date of this Agreement until
December 31, 1995, the Company shall pay to Employee a salary at an annual rate
equal to the annual rate being paid by the Company to Employee on the date
hereof.
(ii) During each calendar year during the Term after December
31, 1995, the Company shall pay to Employee a salary at an annual rate equal to
the average compensation (as reported in the annual National Telephone Company
Association ("NTCA") survey) paid by reporting NTCA member companies located in
the Northeast Region to their Public Affairs/Subscriber Relations Representative
(NTCA Table No. 32) during the prior year; provided that, if Employee is
promoted to a new position within Camden during the Term, Employee's salary
thereafter shall be the average compensation so reported on the NTCA Table which
corresponds to such new position.
(b) The salary payable pursuant to paragraph (a) of this
Section shall be deemed to accrue ratably during the calendar year and shall be
paid according to the normal payroll periods of the Company. In the event
Employee's employment is terminated pursuant to Section 6, payment shall be made
for the portion of the payroll period during which Employee was employed on a
pro rata basis.
(c) The salary arrangements pursuant to paragraph (a) of this
Section shall terminate upon the termination, death or permanent disability of
Employee and no further payment thereof shall be made.
(d) The Employee shall be entitled to elect either (i) to
continue to participate in the 100% Company paid medical, dental, long-term
disability and group term insurance plans provided by Lincoln National Life
Insurance Company to employees of the Company on the date hereof or (ii) to be
covered by the group medical, dental, disability and life insurance plans
maintained from time to time by TDS and available to employees of TDS' other
telephone company subsidiaries, subject to all other eligibility requirements
applicable to TDS employees generally. Any election by Employee to be covered by
such TDS plans shall be final and
-2-
<PAGE>
Employee shall thereafter have no right to elect or reelect to be covered by the
Company plans referred to in (i) above.
(e) Reference is made to the Employment Agreement dated the
date hereof between Mr. Jack Ford and the Company (the "Ford Agreement"). For so
long as Mr. Ford continues to be the General Manager of the Company pursuant to
the Ford Agreement (but not after the 10th anniversary of this Agreement),
Employee shall be entitled to continue to participate in the Company's pension
benefit plan (the "Existing Camden Plan") unless such participation or the
continuation of the Existing Camden Plan after the date hereof has the effect of
terminating the tax-qualified status (under Section 401(a) of the Internal
Revenue Code) of the Existing Camden Plan or the TDS Plan (as such term is
defined below). In such event (i) Employee's participation in the Existing
Camden Plan shall be terminated and Employee shall participate in the then
current TDS pension plan applicable to employees of TDS' other telephone company
subsidiaries (the "TDS Plan"); and (ii), if Employee should retire from the
Company on or prior to the date (the "Ford Termination Date") on which Jack Ford
is no longer employed by the Company pursuant to the Ford Agreement, TDS shall,
if necessary, supplement the benefits available to Employee upon such retirement
from the Company to the extent necessary to make the aggregate retirement
benefits payable to Employee at least equal to those payable under the Existing
Camden Plan. From and after the Ford Termination Date, Employee shall
participate in the TDS Plan and TDS shall have no obligation to supplement the
benefits provided thereunder. Upon retirement, Employee shall be entitled to
participate in the then existing TDS retirement medical and insurance benefit
programs, subject to clause (g) below.
(f) Employee shall be entitled to participate in TDS' 401(k)
Tax-Deferred Savings Plan and Trust and TDS' Employee Stock Purchase Plan.
(g) For the purposes of clauses (d), (e) and (f) above, and
participation by Employee in the TDS employee or retiree benefit plans mentioned
therein, (i) Employee's participation shall be subject to all eligibility
standards applicable to such plans applicable to all employees of TDS and its
affiliates and (ii) Employee shall be credited with his prior years of service
with Camden to the extent permitted by such plans and standards.
(h) During the Term, the Employee will be entitled to receive
the customary $500 Christmas bonus paid by the Company in the past.
(i) During the Term, the Employee shall be entitled to
receive, at the cost of the Company, local exchange telephone service so long as
Employee lives within the Camden exchange area.
-3-
<PAGE>
(j) During the Term, Employee shall be entitled to the number
of vacation days and holiday periods as are in accordance with applicable TDS
policy for employees of its other telephone company subsidiaries.
(k) For the first five years of the Term, the Company's
vehicle replacement program, as it exists on the date hereof, shall remain in
effect if applicable to Employee.
(l) Employee shall be entitled to reimbursement for business
travel and professional education related expenses in accordance with TDS's
standard company policy.
6. Termination. Without prejudice to any other rights it may
have, the Company shall have the right by notice in writing given to Employee to
terminate this Agreement and the Employee's employment hereunder if:
(a) Employee shall be guilty of gross negligence in connection
with the Duties hereunder;
(b) Employee fails to satisfactorily perform the Duties
hereunder or to comply with reasonable directions or regulations of the Company
or TDS, or Employee fails to observe and perform the terms and provisions of
this Agreement; or
(c) Employee shall be convicted of a crime involving
dishonesty or moral turpitude.
7. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Company and any successor to the
Company, and any such successor shall be deemed substituted for the Company
under the provisions of this Agreement. For the purposes of the Agreement, the
term "successor" shall mean any person, firm, corporation or other business
equity which at any time, whether by merger, purchase, liquidation or otherwise,
shall acquire all or substantially all of the assets or business of the Company.
The Employee's obligations hereunder are hereby expressly declared to be
nonassignable and nontransferable.
8. Notices. Any notice given or required hereunder may be
served by personal delivery or by leaving the same at or by sending the same by
first-class post addressed to:
(a) in the case of the Company, at its principal executive
office at the time being;
(b) in the case of the Employee, at the Employee's address on
the records of the Company; or
-4-
<PAGE>
(c) in the case of either party, such other address as shall
have been notified in writing to the other party for the purposes of service
hereunder.
9. Termination of Existing Terms of Service. Except as
otherwise provided herein, this Agreement is in substitution for all previous
contracts or terms of employment (express or implied) between the Company and
the Employee, which shall be deemed to have been terminated by mutual consent as
of the date of this Agreement.
10. Amendment. No modification, amendment or waiver of any of
the provisions of this Agreement shall be effective unless in writing
specifically referring hereto and signed by both parties.
11. Entire Agreement. This instrument constitutes the entire
agreement of the parties hereto with respect to the Employee's duties and
obligations and compensation therefor.
12. No Waiver. The failure to enforce at any time any of the
provisions of this Agreement or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed as a wavier
of such provisions or to affect either the validity of this Agreement, or any
party hereof, or the right of either party thereafter to enforce each and every
such provision in accordance with the terms of this Agreement.
13. Governing Law. All questions pertaining to the validity,
construction, execution, and performance of this Agreement shall be construed in
accordance with and governed by the laws of the State of Indiana.
14. Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions of
this Agreement and shall be construed in all respects as if such invalid or
unenforceable provisions were omitted. While provisions of this Agreement are
considered by the parties to be fair and reasonable in all the circumstances, it
is agreed that if any of such provisions shall be adjudged to be void or
ineffective for whatever reason, but would be adjudged to be valid and effective
if part of the wording thereof were deleted or the periods thereof reduced or
the area thereof reduced in scope, the said restrictions shall apply with such
modifications as may be necessary to make them valid and effective.
15. Counterparts. This Agreement may be executed in any number
of counterparts and all such counterparts signed in the aggregate by all parties
hereto shall constitute a single original instrument.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereof have caused this
instrument to be duly executed as of the day and year first above written.
COMPANY: CAMDEN TELEPHONE COMPANY, INC.
By:__________________________
Name:
Title:
EMPLOYEE: _____________________________
Name: Brenda Elizalde
SIGNATURE PAGE TO
EMPLOYMENT AGREEMENT
BRENDA ELIZALDE
<PAGE>
EXHIBIT E-5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of ___________, 1995, by and
between CAMDEN TELEPHONE COMPANY, INC., an Indiana corporation (the "Company"),
and Pamela Brown ("Employee").
WHEREAS, pursuant to that certain Agreement and Plan of
Merger, dated as of __________, 1995, by and among Telephone and Data Systems,
Inc. ("TDS"), TDS-Camden Acquisition Corp. ("Sub") and the Company, TDS has on
the date hereof acquired all of the outstanding capital stock of the Company
pursuant to a merger of Sub with and into the Company;
WHEREAS, the Employee has considerable knowledge and
experience regarding the business, affairs, customers and operations of the
Company (the "Business"); and
WHEREAS, in consideration of such knowledge and experience,
the Company desires to provide for the employment of Employee under the terms
and conditions as hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing and the
mutual promises and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. Employment. The Company agrees to employ Employee and
Employee agrees to accept employment with the Company in accordance with the
terms and conditions hereinafter contained.
2. Term. Subject to the right of the Company under Section 6
to terminate Employee's employment, Employee shall serve the Company for the
term of ten (10) years commencing on the date of this Agreement (the "Term") and
thereafter at the will of each of the Company and the Employee until such
employment is terminated by either party. If Employee completes the full
ten-year Term hereunder and suitable employment opportunities then no longer
exist at the Company, Employee shall be offered employment opportunities at
other TDS companies.
3. Duties. Employee shall continue to serve as Service Order
Coordinator of the Company with substantially the same duties and
responsibilities as she currently has and shall have such other responsibilities
and shall perform such other duties as shall be mutually established by the
Company and the Employee from time to time (the "Duties"). During employment
hereunder, Employee shall devote full time to the business and affairs of the
Company to perform such Duties, and shall take no action, or fail to take any
action, which would jeopardize or impair in any way the Business
<PAGE>
and shall use such Employee's best efforts to advance the best interests of the
Company and TDS at all times.
4. Place of Performance. Except as mutually agreed by Employee
and the Company, Employee shall perform the Duties hereunder at the offices of
the Company but may be required to travel and render services in different
locations from time to time, on a temporary basis only, in the performance of
such Duties.
5. Compensation and Benefits.
(a)(i) During the period from the date of this Agreement until
December 31, 1995, the Company shall pay to Employee a salary at an annual rate
equal to the annual rate being paid by the Company to Employee on the date
hereof.
(ii) During each calendar year during the Term after December
31, 1995, the Company shall pay to Employee a salary at an annual rate equal to
the average compensation (as reported in the annual National Telephone Company
Association ("NTCA") survey) paid by reporting NTCA member companies located in
the Northeast Region to their Service Order Coordinator (NTCA Table No. 34)
during the prior year; provided that, if Employee is promoted to a new position
within Camden during the Term, Employee's salary thereafter shall be the average
compensation so reported on the NTCA Table which corresponds to such new
position.
(b) The salary payable pursuant to paragraph (a) of this
Section shall be deemed to accrue ratably during the calendar year and shall be
paid according to the normal payroll periods of the Company. In the event
Employee's employment is terminated pursuant to Section 6, payment shall be made
for the portion of the payroll period during which Employee was employed on a
pro rata basis.
(c) The salary arrangements pursuant to paragraph (a) of this
Section shall terminate upon the termination, death or permanent disability of
Employee and no further payment thereof shall be made.
(d) The Employee shall be entitled to elect either (i) to
continue to participate in the 100% Company paid medical, dental, long-term
disability and group term insurance plans provided by Lincoln National Life
Insurance Company to employees of the Company on the date hereof or (ii) to be
covered by the group medical, dental, disability and life insurance plans
maintained from time to time by TDS and available to employees of TDS' other
telephone company subsidiaries, subject to all other eligibility requirements
applicable to TDS employees generally. Any election by Employee to be covered by
such TDS plans shall be final and Employee shall thereafter have no right to
elect or reelect to be covered by the Company plans referred to in (i) above.
-2-
<PAGE>
(e) Reference is made to the Employment Agreement dated the
date hereof between Mr. Jack Ford and the Company (the "Ford Agreement"). For so
long as Mr. Ford continues to be the General Manager of the Company pursuant to
the Ford Agreement (but not after the 10th anniversary of this Agreement),
Employee shall be entitled to continue to participate in the Company's pension
benefit plan (the "Existing Camden Plan") unless such participation or the
continuation of the Existing Camden Plan after the date hereof has the effect of
terminating the tax-qualified status (under Section 401(a) of the Internal
Revenue Code) of the Existing Camden Plan or the TDS Plan (as such term is
defined below). In such event (i) Employee's participation in the Existing
Camden Plan shall be terminated and Employee shall participate in the then
current TDS pension plan applicable to employees of TDS' other telephone company
subsidiaries (the "TDS Plan"); and (ii), if Employee should retire from the
Company on or prior to the date (the "Ford Termination Date") on which Jack Ford
is no longer employed by the Company pursuant to the Ford Agreement, TDS shall,
if necessary, supplement the benefits available to Employee upon such retirement
from the Company to the extent necessary to make the aggregate retirement
benefits payable to Employee at least equal to those payable under the Existing
Camden Plan. From and after the Ford Termination Date, Employee shall
participate in the TDS Plan and TDS shall have no obligation to supplement the
benefits provided thereunder. Upon retirement, Employee shall be entitled to
participate in the then existing TDS retirement medical and insurance benefit
programs, subject to clause (g) below.
(f) Employee shall be entitled to participate in TDS' 401(k)
Tax-Deferred Savings Plan and Trust and TDS' Employee Stock Purchase Plan.
(g) For the purposes of clauses (d), (e) and (f) above, and
participation by Employee in the TDS employee or retiree benefit plans mentioned
therein, (i) Employee's participation shall be subject to all eligibility
standards applicable to such plans applicable to all employees of TDS and its
affiliates and (ii) Employee shall be credited with his prior years of service
with Camden to the extent permitted by such plans and standards.
(h) During the Term, the Employee will be entitled to receive
the customary $500 Christmas bonus paid by the Company in the past.
(i) During the Term, the Employee shall be entitled to
receive, at the cost of the Company, local exchange telephone service so long as
Employee lives within the Camden exchange area.
(j) During the Term, Employee shall be entitled to the number
of vacation days and holiday periods as are in accordance with applicable TDS
policy for employees of its other telephone company subsidiaries.
-3-
<PAGE>
(k) For the first five years of the Term, the Company's
vehicle replacement program, as it exists on the date hereof, shall remain in
effect if applicable to Employee.
(l) Employee shall be entitled to reimbursement for business
travel and professional education related expenses in accordance with TDS's
standard company policy.
6. Termination. Without prejudice to any other rights it may
have, the Company shall have the right by notice in writing given to Employee to
terminate this Agreement and the Employee's employment hereunder if:
(a) Employee shall be guilty of gross negligence in connection
with the Duties hereunder;
(b) Employee fails to satisfactorily perform the Duties
hereunder or to comply with reasonable directions or regulations of the Company
or TDS, or Employee fails to observe and perform the terms and provisions of
this Agreement; or
(c) Employee shall be convicted of a crime involving
dishonesty or moral turpitude.
7. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Company and any successor to the
Company, and any such successor shall be deemed substituted for the Company
under the provisions of this Agreement. For the purposes of the Agreement, the
term "successor" shall mean any person, firm, corporation or other business
equity which at any time, whether by merger, purchase, liquidation or otherwise,
shall acquire all or substantially all of the assets or business of the Company.
The Employee's obligations hereunder are hereby expressly declared to be
nonassignable and nontransferable.
8. Notices. Any notice given or required hereunder may be
served by personal delivery or by leaving the same at or by sending the same by
first-class post addressed to:
(a) in the case of the Company, at its principal executive
office at the time being;
(b) in the case of the Employee, at the Employee's address on
the records of the Company; or
(c) in the case of either party, such other address as shall
have been notified in writing to the other party for the purposes of service
hereunder.
9. Termination of Existing Terms of Service. Except as
otherwise provided herein, this Agreement is in substitution for all previous
contracts or terms of employment (express or implied)
-4-
<PAGE>
between the Company and the Employee, which shall be deemed to have been
terminated by mutual consent as of the date of this Agreement.
10. Amendment. No modification, amendment or waiver of any of
the provisions of this Agreement shall be effective unless in writing
specifically referring hereto and signed by both parties.
11. Entire Agreement. This instrument constitutes the entire
agreement of the parties hereto with respect to the Employee's duties and
obligations and compensation therefor.
12. No Waiver. The failure to enforce at any time any of the
provisions of this Agreement or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed as a wavier
of such provisions or to affect either the validity of this Agreement, or any
party hereof, or the right of either party thereafter to enforce each and every
such provision in accordance with the terms of this Agreement.
13. Governing Law. All questions pertaining to the validity,
construction, execution, and performance of this Agreement shall be construed in
accordance with and governed by the laws of the State of Indiana.
14. Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions of
this Agreement and shall be construed in all respects as if such invalid or
unenforceable provisions were omitted. While provisions of this Agreement are
considered by the parties to be fair and reasonable in all the circumstances, it
is agreed that if any of such provisions shall be adjudged to be void or
ineffective for whatever reason, but would be adjudged to be valid and effective
if part of the wording thereof were deleted or the periods thereof reduced or
the area thereof reduced in scope, the said restrictions shall apply with such
modifications as may be necessary to make them valid and effective.
15. Counterparts. This Agreement may be executed in any number
of counterparts and all such counterparts signed in the aggregate by all parties
hereto shall constitute a single original instrument.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereof have caused this
instrument to be duly executed as of the day and year first above written.
COMPANY: CAMDEN TELEPHONE COMPANY, INC.
By:--------------------------
Name:
Title:
EMPLOYEE: _____________________________
Name: Pamela Brown
SIGNATURE PAGE TO
EMPLOYMENT AGREEMENT
PAMELA BROWN
<PAGE>
FIRST SUPPLEMENTAL AGREEMENT
The First Supplemental Agreement is made and entered into this
29th day of June, 1995 by and among Telephone and Data Systems, Inc., an Iowa
corporation ("TDS"), TDS-Camden Acquisition Corp., an Indiana corporation and
indirect, wholly-owned subsidiary of TDS ("SUB"), and Camden Telephone Company,
Inc., an Indiana corporation ("Camden").
W I T N E S S E T H
WHEREAS, the parties hereto have entered into the Agreement
and Plan of Merger dated as of April 27, 1995 (the "Merger Agreement") providing
for the acquisition of Camden by TDS by means of the merger of Sub with and into
Camden (the "Merger");
WHEREAS, the parties hereto desire to amend and supplement the
Merger Agreement to reflect their understanding regarding the conversion of
shares which will take place by virtue of the Merger; and
WHEREAS, the terms used in the First Supplemental Agreement
which are defined in the Merger Agreement shall have the respective meanings set
forth in the Merger Agreement, unless otherwise defined herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto hereby agree as
follows:
1. Section 1.4(c) of the Merger Agreement is hereby amended
and restated in its entirety to read as follows:
"(c) Subject to Section 1.11, each Camden Share issued and
outstanding immediately prior to the Effective Date (other than Dissenting
Shares (as defined in Section 1.7)) shall be converted into the right to
receive, from Sub, the number of Common Shares, par value $1.00 per share, of
TDS (the "TDS Common Shares") equal to the quotient obtained by dividing $20,000
by the Average Closing Price of the TDS Common Shares; provided that (i) if the
Average Closing Price of the TDS Common Shares is equal to or greater than
$39.125, then each Camden Share issued and outstanding immediately prior to the
Effective Date shall be converted into the right to receive 511.4286 TDS Common
Shares and (ii), if the Average Closing Price of the TDS Common Shares is less
than $36, TDS may, but shall not be required to, terminate this Agreement
without incurring any liability to Camden or its shareholders.
-1-
<PAGE>
The number of TDS Common Shares calculated in accordance with
the foregoing multiplied by 280 is hereinafter referred to as the "Aggregate
Merger Consideration." The number of TDS Common Shares into which each Camden
Share is converted is hereinafter defined as the "Merger Consideration."
For purposes of this Agreement, the term "Average Closing
Price" means the arithmetical average of the closing price for TDS Common Shares
as reported in the American Stock Exchange Composite Transactions section of The
Wall Street Journal for the five trading days ending on the third trading day
prior to the Effective Date.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this First Supplemental
Agreement as of the date and year first above written.
CAMDEN TELEPHONE COMPANY, INC.
--------------------------------
Name: James R. Sullivan
Title: President
TELEPHONE AND DATA SYSTEMS, INC.
---------------------------------
Name: LeRoy T. Carlson
Title: Chairman
TDS-CAMDEN ACQUISITION CORP.
--------------------------------
Name: George L. Dienes
Title: Vice President
SIGNATURE PAGE OF THE FIRST SUPPLEMENTAL AGREEMENT
TO THE AGREEMENT AND PLAN OF MERGER BY AND AMONG
CAMDEN TELEPHONE COMPANY, INC., TELEPHONE AND
DATA SYSTEMS, INC. AND TDS-CAMDEN ACQUISITION CORP.
<PAGE>
SECOND SUPPLEMENTAL AGREEMENT
This Second Supplemental Agreement is made and entered into
this 10th day of August, 1995 by and among Telephone and Data Systems, Inc., an
Iowa corporation ("TDS"), TDS-Camden Acquisition Corp., an Indiana corporation
and indirect, wholly-owned subsidiary of TDS ("SUB"), and Camden Telephone
Company, Inc., an Indiana corporation ("Camden").
W I T N E S S E T H
WHEREAS, the parties hereto have entered into the Agreement
and Plan of Merger dated as of April 27, 1995 (the "Original Merger Agreement")
providing for the acquisition of Camden by TDS by means of the merger of Sub
with and into Camden (the "Merger");
WHEREAS, the parties hereto entered into a First Supplemental
Agreement dated as of June 29, 1995 (the "First Supplemental Agreement")
amending the Original Merger Agreement in certain respects;
WHEREAS, the parties hereto desire to further amend and
supplement the Original Merger Agreement as hereinafter provided; and
WHEREAS, the terms used in this Second Supplemental Agreement
which are defined in the Original Merger Agreement shall have the respective
meanings set forth in the Original Merger Agreement, unless otherwise defined
herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto hereby agree as
follows:
1. The parties agree that if, at any time between the date on
which the meeting of Camden Shareholders called by Camden in accordance with
Section 5.8 of the Original Merger Agreement is held and the Effective Date, the
application of the formula included in Section 14(c) of the Original Merger
Agreement (as supplemented by the First Supplemental Agreement) would result in
each outstanding Camden Share being converted into more than 625 TDS Common
Shares, the Merger will not be consummated unless (a) Camden shall promptly
call, in accordance with the Indiana Business Corporation Law and Camden's
Articles of Incorporation and By-laws, a second meeting of the Camden
Shareholders (the "Second Meeting") and (b) at the Second Meeting the holders of
not less than a majority of the Camden Shares shall again vote in favor of and
to approve the Merger.
2. In the event that the Camden shall call the Second Meeting
as provided in Section 1 of this Second Supplemental Agreement, then,
<PAGE>
(a) The "Proxy Statement" referred to in Sections 2.22 and 3.5
of the Original Merger Agreement shall be deemed to include the proxy statement
distributed to the Camden Shareholders in connection with the Second Meeting.
(b) The term "Meeting" as used in Section 6.7 of the Original
Merger Agreement shall mean the Second Meeting.
(c) Sections 6.7 and 7.6 of the Original Merger Agreement
shall be satisfied by an affirmative vote in favor of the Merger by the holders
of not less than a majority of the outstanding Camden Shares at the Second
Meeting.
(d) The term "Merger Registration Statement" as used in
Sections 3.4(b) and 5.9 of the Original Merger Agreement shall mean a TDS
Registration Statement on Form S-4 which includes the Proxy Statement to be used
in connection with the Second Meeting.
3. Except as expressly provided in this Second Supplemental
Agreement, the terms, conditions and provisions of the Original Merger Agreement
(as supplemented by the First Supplemental Agreement) shall remain in full force
and effect.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Second Supplemental
Agreement as of the date and year first above written.
CAMDEN TELEPHONE COMPANY, INC.
------------------------------
Name: James R. Sullivan
Title: President
TELEPHONE AND DATA SYSTEMS, INC.
------------------------------
Name: LeRoy T. Carlson
Title: Chairman
TDS-CAMDEN ACQUISITION CORP.
------------------------------
Name: George L. Dienes
Title: Vice President
SIGNATURE PAGE OF THE SECOND SUPPLEMENTAL AGREEMENT
TO THE AGREEMENT AND PLAN OF MERGER BY AND AMONG
CAMDEN TELEPHONE COMPANY, INC., TELEPHONE AND
DATA SYSTEMS, INC. AND TDS-CAMDEN ACQUISITION CORP.
<PAGE>
ANNEX B
INDIANA Business Corporation Law
CHAPTER 44
DISSENTERS' RIGHTS
(Added by P.L. 149-1986, L. '86, eff. 4-1-86.)
23-1-44-1 ["CORPORATION"]. - As used in this chapter, "corporation" means the
issuer of the shares held by a dissenter before the corporate action, or the
surviving or acquiring corporation by merger or share exchange of that issuer.
23-1-44-2 ["DISSENTER"]. - As used in this chapter, "dissenter" means a
shareholder who is entitled to dissent from corporate action under section 8 of
this chapter and who exercises that right when and in the manner required by
sections 10 through 18 of this chapter.
23-1-44-3 ["FAIR VALUE"]. - As used in this chapter, "fair value", with
respect to a dissenter's shares, means the value of the shares immediately
before the effectuation of the corporate action to which the dissenter objects,
excluding any appreciation or depreciation in anticipation of the corporate
action unless exclusion would be inequitable.
23-1-44-4 ["INTEREST"]. - As used in this chapter, "interest" means interest
from the effective date of the corporate action until the date of payment, at
the average rate currently paid by the corporation on its principal bank loans
or, if none, at a rate that is fair and equitable under all the circumstances.
23-1-44-5 ["RECORD SHAREHOLDER"]. - As used in this chapter, "record
shareholder" means the person in whose name shares are registered in the records
of a corporation or the beneficial owner of shares to the extent that treatment
as a record shareholder is provided under a recognition procedure or a
disclosure procedure established under IC 23-1-30-4.
23-1-44-6 ["BENEFICIAL SHAREHOLDER"]. - As used in this chapter, "beneficial
shareholder" means the person who is a beneficial owner of shares held by a
nominee as the record shareholder.
23-1-44-7 ["SHAREHOLDER"]. - As used in this chapter, "shareholder" means the
record shareholder or the beneficial shareholder.
23-1-44-8 ["WHEN SHAREHOLDER MAY DISSENT]. -(a) A shareholder is entitled to
dissent from, and obtain payment of the fair value of the shareholder's shares
in the event of, any of the following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a party if: (A)
shareholder approval is required for the merger by IC 23-1- 40-3 or the articles
of incorporation; and (B) the shareholder is entitled to vote on the merger. (2)
Consummation of a plan of share exchange to which the corporation is a party as
the corporation whose shares will be acquired, if the shareholder is entitled to
vote on the plan. (3) Consummation of a sale or exchange of all, or
substantially all, of the property of the corporation other than in the usual
and regular course of business, if the shareholder is entitled to vote on the
sale or exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all or
substantially all of the net proceeds of the sale will be distributed to the
shareholders within one (1) year after the date of sale. (4) The approval of a
control share acquisition under IC 23-1- 42. (5) Any corporate action taken
pursuant to a shareholder vote to the extent the articles of incorporation,
bylaws, or a resolution of the board of directors provides that voting or
nonvoting shareholders are entitled to dissent and obtain payment for their
shares.
(b) This section does not apply to the holders of shares of any class or series
if, on the date fixed to determine the shareholders entitled to receive notice
of and vote at the meeting of shareholders at which the merger, plan of share
exchange, or sale or exchange of property is to be acted on, the shares of that
class or series were:
<PAGE>
(1) registered on a United States securities exchange registered
under the Exchange Act (as defined in IC 23-1-43-9); or
(2) traded on the National Association of Securities Dealers,
Inc. Automated Quotations System Over-the-Counter Markets --
National Market Issues or a similar market.
(c) A shareholder:
(1) who is entitled to dissent and obtain payment for the
shareholder's shares under this chapter; or
(2) who would be so entitled to dissent and obtain payment but
for the provisions of subsection (b);
may not challenge the corporate action creating (or that, but for the provisions
of subsection (b), would have created) the shareholder's entitlement. (Last
amended by P.L. 107-1987, L. '87, eff. 5-1-87.)
-----
P.L. 107-1987, L. '87, eff. 5-1-87, added matter in italic.
.1 Determination of stock value. - In determining value of corporate
stock for purposes of consolidation, every fact which has tendency to indicate
value should be taken into consideration - value of shares must be determined
from value of assets, tangible and intangible; stock market value may be of
assistance but is not criterion; book value may or may not give assistance,
depending upon method by which books are kept; statement of assets and
liabilities based upon appraisals is of more value than statement based upon
arbitrary figures; good will value should be given consideration. Dissenting
stockholders are not given advantage of an increase in value expected to result
from merger, nor should they be charged with expense of bringing about merger.
Republic Finance Co v Fenstermaker, 6 NE2d 541 (1937).
Court fixing appraised value of stock owned by those dissenting from
merger must use fair market value as standard, not book value or liquidating
value; also, dissenters are entitled to interest only from date of judgment
determining value, not from date of merger itself. General Grain, Inc v
Goodrich, 221 NE2d 696 (Ct App 1966).
Dissenting stockholders' shares in consolidated corporation were valued
by looking at (1) corporation as a viable, going concern; (2) shares' value
prior to merger; and (3) shares' fair market value. Pearlman v Permonite Mfg Co,
568 FSupp 222 (ND Ind 1983).
District court properly valued dissenting stockholders' shares, at
price lower than offered in corporation's own appraisal, which had been rejected
by stockholders as too low. Pearlman v Permonite Mfg Co, 734 F2d 1283 (7th Cir
1984).
.2 Remedy of dissenters. - Dissenting stockholders' remedies are
available in courts of incorporating state only. McGhee v General Finance Corp,
84 FSupp 24 (WD Va 1949); Sheridan v American Motors Corp, 132 FSupp 121 (ED Pa
1955).
Dissenting stockholder loses right to payment for his shares when he
registers objection by telegram but fails to make written demand for payment.
Shaffer v General Grain, Inc, 182 NE2d 461 (Ct App 1962).
Stockholder dissenting from merger must give notice and demand for
payment of his shares to his own corporation rather than to surviving
corporation; but this requirement is met when that notice is served on resident
agent who is same for both corporations. Apartment Properties, Inc v Luley, 247
NE2d 71 (1969).
.3 Right to interest. - Stockholders dissenting from merger are
entitled to interest only from date of judgment determining value, not from date
of merger itself. General Grain, Inc v Goodrich, 221 NE2d 696 (Ct App 1966).
.4 Standing. - Shareholders of a failing bank who had filed suit
alleging fraud and breach of fiduciary duty lost standing to sue when bank was
acquired on cash-for-shares basis; any remedy would have involved a statutory
demand for fair valuation of their shares. United States Fidelity and Guaranty v
Griffin, 541 NE2d 553 (Ct App 1989).
<PAGE>
23-1-44-9 [DISSENTERS' RIGHTS WITH RESPECT TO FEWER THAN ALL SHARES REGISTERED
IN SHAREHOLDER'S NAME]. - (a) A record shareholder may assert dissenters' rights
as to fewer than all the shares registered in the shareholder's name only if the
shareholder dissents with respect to all shares beneficially owned by any one
(1) person and notifies the corporation in writing of the name and address of
each person on whose behalf the shareholder asserts dissenters' rights. The
rights of a partial dissenter under this subsection are determined as if the
shares as to which the shareholder dissents and the shareholder's other shares
were registered in the names of different shareholders.
(b) A beneficial shareholder may assert dissenters' rights
as to shares on the shareholder's behalf only if:
(1) the beneficial shareholder submits to the corporation the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights; and
(2) the beneficial shareholder does so with respect to all the
beneficial shareholder's shares or those shares over which the beneficial
shareholder has power to direct the vote.
23-1-44-10 [NOTICE OF PROPOSED ACTION CREATING DISSENTERS' RIGHTS]. - (a) If
proposed corporate action creating dissenters' rights under section 8 of this
chapter is submitted to a vote at a shareholders' meeting, the meeting notice
must state that shareholders are or may be entitled to assert dissenters' rights
under this chapter.1
(b) If corporate action creating dissenters' rights under section 8 of
this chapter is taken without a vote of shareholders, the corporation shall
notify in writing all shareholders entitled to assert dissenters' rights that
the action was taken and send them the dissenters' notice described in section
12 of this chapter. (Last amended by H.B. 1756, L.
'87, eff. 5-1-87.)
-----
H.B. 1756, L. '87, eff. 5-1-87, added matter in italic and
deleted 1"and be accompanied by a copy of this chapter".
23-1-44-11 [NOTICE OF SHAREHOLDER'S INTENT TO ASSERT DISSENTERS' RIGHTS]. -
(a) If proposed corporate action creating dissenters' rights under section 8 of
this chapter is submitted to a vote at a shareholders' meeting, a shareholder
who wishes to assert dissenters' rights:
(1) must deliver to the corporation before the vote is taken written
notice of the shareholder's intent to demand payment for the shareholder's
shares if the proposed action is effectuated; and
(2) must not vote the shareholder's shares in favor of the
proposed action.
(b) A shareholder who does not satisfy the requirements of
subsection (a) is not entitled to payment for the shareholder's
shares under this chapter.
23-1-44-12 [DISSENTERS' NOTICE]. - (a) If proposed corporate action creating
dissenters' rights under section 8 of this chapter is authorized at a
shareholders' meeting, the corporation shall deliver a written dissenters'
notice to all shareholders who satisfied the requirements of section 11 of this
chapter.
(b) The dissenters' notice must be sent no later than ten (10) days
after approval by the shareholders, or if corporate action is taken without
approval by the shareholders, then ten (10) days after the corporate action was
taken. The dissenters' notice must:
(1) state where the payment demand must be sent and where
and when certificates for certificated shares must be deposited;
(2) inform holders of uncertificated shares to what extent
transfer of the shares will be restricted after the payment
demand is received;
(3) supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the proposed
corporate action and requires that the person asserting dissenters' rights
certify whether or not the person acquired beneficial ownership of the shares
before that date;
(4) set a date by which the corporation must receive the payment
demand, which date may not be fewer than thirty (30) nor more than sixty (60)
days after the date the subsection (a) notice is delivered; and
(5) be accompanied by a copy of this chapter.
<PAGE>
23-1-44-13 [DEMAND]. - (a) A shareholder sent a dissenters' notice described in
IC 23-1-42-11 or in section 12 of this chapter must demand payment, certify
whether the shareholder acquired beneficial ownership of the shares before the
date required to be set forth in the dissenters' notice under section 12(b)(3)
of this chapter, and deposit the shareholder's certificates in accordance with
the terms of the notice.
(b) The shareholder who demands payment and deposits the shareholder's
shares under subsection (a) retains all other rights of a shareholder until
these rights are cancelled or modified by the taking of the proposed corporate
action.
(c) A shareholder who does not demand payment or deposit the
shareholder's share certificates where required, each by the date set in the
dissenters' notice, is not entitled to payment for the shareholder's shares
under this chapter and is considered, for purposes of this article, to have
voted the shareholder's shares in favor or the proposed corporate action.
23-1-44-14 [TRANSFER OF UNCERTIFICATED SHARES]. - (a) The corporation may
restrict the transfer of uncertificated shares from the date the demand for
their payment is received until the proposed corporate action is taken or the
restrictions released under section 16 of this chapter.
(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are cancelled or modified by the taking of the proposed corporate action.
23-1-44-15 [PAYMENT OF FAIR VALUE]. - (a) Except as provided in section
17 of this chapter, as soon as the proposed corporate action is taken, or, if
the transaction did not need shareholder approval and has been completed, upon
receipt of a payment demand, the corporation shall pay each dissenter who
complied with section 13 of this chapter the amount the corporation estimates to
be the fair value of the dissenter's shares.
(b) The payment must be accompanied by:
(1) the corporation's balance sheet as of the end of a
fiscal year ending not more than sixteen (16) months before the date of payment,
an income statement for that year, a statement of changes in shareholders'
equity for that year, and the latest available interim financial statements, if
any;
(2) a statement of the corporation's estimate of the fair
value of the shares; and
(3) a statement of the dissenter's right to demand payment
under section 18 of this chapter.1 (Last amended by H.B. 1756, L.
'87, eff. 5-1-87.)
-----
H.B. 1756, L. '87, eff. 5-1-87, added matter in italic and
deleted 1 "; and (4) a copy of this chapter".
23-1-44-16 [RETURN OF DEPOSITED CERTIFICATES-RELEASE OF TRANSFER
RESTRICTIONS]. - (a) If the corporation does not take the proposed action within
sixty (60) days after the date set for demanding payment and depositing share
certificates, the corporation shall return the deposited certificates and
release the transfer restrictions imposed on uncertificated shares.
(b) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under section 12 of this chapter and repeat the payment
demand procedure.
23-1-44-17 [WITHHOLDING PAYMENT]. - (a) A corporation may elect to withhold
payment required by section 15 of this chapter from a dissenter unless the
dissenter was the beneficial owner of the shares before the date set forth in
the dissenters' notice as the date of the first announcement to news media or to
the shareholders of the terms of the proposed corporate action.
(b) To the extent the corporation elects to withhold payment under
subsection (a), after taking the proposed corporate action, it shall estimate
the fair value of the shares and shall pay this amount to each dissenter who
agrees to accept it in full satisfaction of the dissenter's demand. The
corporation shall send with its offer a statement of its estimate of the fair
value of the shares and a statement of the dissenters' right to demand payment
under section 18 of this chapter.
23-1-44-18 [DISSENTERS' ESTIMATE]. - (a) A dissenter may notify the
corporation in writing of the dissenter's own estimate of the fair value of the
dissenter's shares and demand payment of the dissenter's estimate (less any
payment under section 15 of this chapter), or reject the corporation's offer
under section 17 of this chapter and demand payment of the fair value of the
dissenter's shares, if:
<PAGE>
(1) the dissenter believes that the amount paid under section 15 of
this chapter or offered under section 17 of this chapter is less than the fair
value of the dissenter's shares;
(2) the corporation fails to make payment under section 15 of this
chapter within sixty (60) days after the date set for demanding payment; or
(3) the corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty (60) days after the date set for
demanding payment.
(b) A dissenter waives the right to demand payment under this section
unless the dissenter notifies the corporation of the dissenter's demand in
writing under subsection (a) within thirty (30) days after the corporation made
or offered payment for the dissenter's shares.
23-1-44-19 [APPRAISAL PROCEEDING]. - (a) If a demand for payment under IC
23-1-42-11 or under section 18 of this chapter remains unsettled, the
corporation shall commence a proceeding within sixty (60) days after receiving
the payment demand and petition the court to determine the fair value of the
shares. If the corporation does not commence the proceeding within the sixty
(60) day period, it shall pay each dissenter whose demand remains unsettled the
amount demanded.
(b) The corporation shall commence the proceeding in the circuit or
superior court of the county where a corporation's principal office (or, if none
in Indiana, its registered office) is located. If the corporation is a foreign
corporation without a registered office in Indiana, it shall commence the
proceeding in the county in Indiana where the registered office of the domestic
corporation merged with or whose shares were acquired by the foreign corporation
was located.
(c) The corporation shall make all dissenters (whether or not residents
of this state) whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) is plenary and exclusive. The court may appoint one (1) or
more persons as appraisers to receive evidence and recommend decision on the
question of fair value. The appraisers have the powers described in the order
appointing them or in any amendment to it. The dissenters are entitled to the
same discovery rights as parties in other civil proceedings.
(e) Each dissenter made a party to the proceeding is
entitled to judgment:
(1) for the amount, if any, by which the court finds the
fair value of the dissenter's shares, plus interest, exceeds the
amount paid by the corporation; or
(2) for the fair value, plus accrued interest, of the dissenter's
after-acquired shares for which the corporation elected to withhold payment
under section 17 of this chapter.
23-1-44-20 [DETERMINATION OF COSTS OF APPRAISAL PROCEEDING]. -
(a) The court in an appraisal proceeding commenced under
section 19 of this chapter shall determine all costs of the proceeding,
including the reasonable compensation and expenses of appraisers appointed by
the court. The court shall assess the costs against such parties and in such
amounts as the court finds equitable.
(b) The court may also asses the fees and expenses of counsel and
experts for the respective parties, in amounts the court finds equitable:
(1) against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the
requirements of sections 10 through 18 of this chapter; or
(2) against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this chapter.
(c) If the court finds that the services of counsel for any dissenter
were of substantial benefit to other dissenters similarly situated and that the
fees for those services should not be assessed against the corporation, the
court may award to these counsel reasonable fees to be paid out of the amounts
awarded the dissenters who were benefited.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Section 4 of the Iowa Business Corporation Act, as amended,
provides for indemnification of directors and officers in a variety of
circumstances, which may include liabilities under the Securities Act of 1933.
Article VI-A of TDS's By-laws provides for indemnification of TDS's directors
and officers (and those serving in such capacity with another corporation at the
request of TDS) in the circumstances, and to the extent, covered by insurance.
TDS has directors' and officers' liability insurance which
provides, subject to certain policy limits, deductible amounts and exclusions,
coverage for all persons who have been, or may in the future be, directors and
officers of TDS, against amounts which such persons must pay resulting from the
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 21. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibit
No. Description of Document
2(i) Agreement and Plan of Merger dated as of April
27, 1995 by and among TDS, TDS-Camden Acquisition
Corp. and Camden Telephone Company, Inc.,
including the First Supplemental Agreement dated
as of June 29, 1995 and the Second Supplemental
Agreement dated as of August 10, 1995 thereto,
(included as Annex to the Proxy Statement -
Prospectus, except for exhibits and schedules
which will be supplied supplementally to the
Commission upon request).
3(i) Articles of Incorporation, as amended, are hereby
incorporated by reference to an exhibit to TDS's
Report on Form 8-A/A-2 dated December 20, 1994.
3(ii) By-laws, as amended, are hereby
incorporated by reference to an exhibit to TDS's
Report on Form 8-A/A-2 dated December 20, 1994.
4(i) Specimen copy of certificate representing TDS
Common Shares is hereby incorporated by reference
to an exhibit to TDS's Report on form 8-A/A-2
dated December 20, 1994.
5 Opinion of Sidley and Austin.*
23.1 Consent of independent public accountants.
23.2 Consent of independent accounts.
23.3 Consent of Kehlebrink, Lawrence & Paukner
23.4 Consent of Sidley & Austin (included in Exhibit 5).
99 Form of Proxy.
-----------
* Previously filed
II-1
<PAGE>
(b) Schedules
Report of Independent Public Accountants on Financial Statement Schedules**
Schedule I Condensed Financial Information of Registrant -
Balance Sheets as of December 31, 1994 and 1993
and Statements of Income and Statements of Cash
Flows for each of the Three Years in the Period
Ended December 31, 1994.**
Schedule II Valuation and Qualifying Accounts for each of the
Three Years in the Period Ended December 31, 1994.**
All other schedules are omitted because they are not applicable or
not required or because the required information is shown in the financial
statements or notes thereto.
--------
**Incorporated herein by reference to TDS's Annual Report on Form 10-K for the
Year Ended December 31, 1994.
ll-2
<PAGE>
Item 22. Undertakings
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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 thereof.
The undersigned registrant hereby undertakes as follows: prior to any
public offering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
The registrant undertakes that every prospectus (i) that is filed
pursuant to the immediately preceding paragraph or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act and is used in
connection with the offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, 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 bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described pursuant to Item 20
above, the registrant has been advised that in the opinion of the Securities and
Exchange 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 registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted against the registrant by such director or
officer in connection with the securities being registered, the registrant 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.
The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company is being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
ll-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois on the 25th day of August,
1995.
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ LeRoy T. Carlson, Chairman
-------------------------------------
LeRoy T. Carlson, Chairman
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment to the Registration Statement has been signed below by
the following persons on the 25th day of August, 1995 in the capacities
indicated.
Signature Title
<PAGE>
/s/ LeRoy T. Carlson Chairman and Director
--------------------------
LeRoy T. Carlson
/s/ LeRoy T. Carlson, Jr. President and Director (chief
-------------------------- executive officer)
LeRoy T. Carlson, Jr.
/s/ Murray L. Swanson Executive Vice President -
-------------------------- Finance and Director
Murray L. Swanson (chief financial officer)
/s/ Rudolph E. Hornacek Director
--------------------------
Rudolph E. Hornacek
/s/ James Barr III Director
--------------------------
James Barr III
/s/ Lester O. Johnson Director
--------------------------
Lester O. Johnson
/s/ Donald C. Nebergall Director
--------------------------
Donald C. Nebergall
/s/ Herbert S. Wander Director
--------------------------
Herbert S. Wander
/s/ Walter C.D. Carlson Director
--------------------------
Walter C.D. Carlson
/s/ Donald R. Brown Director
--------------------------
Donald R. Brown
/s/ Robert J. Collins Director
--------------------------
Robert J. Collins
/s/ Gregory J. Wilkinson Controller (principal
-------------------------- accounting officer)
Gregory J. Wilkinson
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description of Documents Page
2(i) Agreement and Plan of Merger dated as of April 27,
1995 by and among TDS, TDS-Camden Acquisition Corp.
and Camden Telephone Company, Inc., including the
First Supplemental Agreement dated as of June 29,
1995 and the Second Supplemental Agreement dated
as of August 10, 1995 thereto (included as Annex
to the Proxy Statement-Prospectus, except for
exhibits and schedules which will be supplied
supplementally to the Commission upon request).
3(i) Articles of Incorporation, as amended, are
hereby incorporated by reference to an exhibit to
TDS's Report on Form 8-A/A-2 dated December 20, 1994.
3(ii) By-laws, as amended, are hereby incorporated by
reference to an exhibit to TDS's Report on Form
8-A/A-2 dated December 20, 1994.
4(i) Specimen copy of certificate representing
TDS Common Shares in hereby incorporated by
reference to an exhibit to TDS's Report on Form
8-A/A-2 dated December 20, 1994.
5 Opinion of Sidley and Austin.*
23.1 Consent of independent public accountants.
23.2 Consent of independent accounts.
23.3 Consent of Kehlebrink, Lawrence & Paukner.
23.4 Consent of Sidley & Austin (included in Exhibit 5).
99 Form of Proxy.
----------------
* Previously filed.
II-5
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Amendment No. 1 to Form S-4 Registration
Statement of Telephone and Data Systems, Inc. of our report dated February 7,
1995 (except with respect to the matters discussed in Note 12 and Note 14, as to
which the date is March 14, 1995), on the consolidated financial statements of
Telephone and Data Systems, Inc. and Subsidiaries, incorporated by reference in
the Telephone and Data Systems, Inc. Form 10-K for the year ended December 31,
1994, to the incorporation by reference in this Amendment No. 1 to Form S-4
Registration Statement of our report dated February 7, 1995 (except with respect
to the matters discussed in Note 12 and Note 14, as to which the date is March
14, 1995), on the financial statement schedules of Telephone and Data Systems,
Inc., included in the Telephone and Data Systems, Inc. Form 10-K for the year
ended December 31, 1994, and to the incorporation by reference in this Amendment
No. 1 to Form S-4 Registration Statement of our compilation report dated
February 17, 1995, 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 Telephone and Data Systems,
Inc. Form 10-K for the year ended December 31, 1994. We also consent to all
references to our Firm included in this Amendment No. 1 to Form S-4 Registration
Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
August 25, 1995
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Amendment No. 1 to Form S-4 Registration Statement of Telephone and Data
Systems, Inc. of our report, which includes explanatory paragraphs relating to
contingencies, dated February 17, 1995, on our audits of the financial
statements of the Los Angeles SMSA Limited Partnership as of December 31, 1994
and 1993 and for each of the three years in the period ended December 31, 1994,
included in the Telephone and Data Systems, Inc. Annual Report on Form 10-K for
the year ended December 31, 1994; such financial statements were not included
separately in such Form 10-K.
COOPERS & LYBRAND L.L.P.
Newport Beach, California
August 25, 1995
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Amendment No. 1 to Form S-4 Registration Statement of Telephone and Data
Systems, Inc. of our reports dated February 10, 1995, February 11, 1994 and
February 11, 1993, on our audits of the financial statements of the
Nashville/Clarksville MSA Limited Partnership as of December 31, 1994, 1993 and
1992 and for the years ended December 31, 1994, 1993 and 1992, included in the
Telephone and Data Systems, Inc. Annual Report on Form 10-K for the year ended
December 31, 1994; such financial statements were not included separately in
such Form 10-K.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
August 25, 1995
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Amendment No. 1 to Form S-4 Registration Statement of Telephone and Data
Systems, Inc. of our reports dated February 10, 1995, February 11, 1994 and
February 11, 1993, on our audits of the financial statements of
the Baton Rouge MSA Limited Partnership as of December 31, 1994, 1993 and 1992
and for the years ended December 31, 1994, 1993 and 1992, included in the
Telephone and Data Systems, Inc. Annual Report on Form 10-K for the year ended
December 31, 1994; such financial statements were not included separately in
such Form 10-K.
COOPERS & LYBRAND L.L.P.
Atlanta, Georgia
August 25, 1995
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion in the Proxy Statement of
Camden Telephone Company, Inc. and Prospectus of Telephone and Data Systems,
Inc., included in this Form S-4 Registration Statement of Telephone and Data
Systems, Inc., of our report dated January 11, 1995, on our audits of the
financial statements of Camden Telephone Company, Inc., as of
December 31, 1994 and 1993 and for the years ended December 31, 1994, 1993 and
1992. We also consent to all references to our Firm included in this Form S-4
Registration Statement.
KEHLENBRINK, LAWRENCE & PAUCKNER
Indianapolis, Indiana
August 25, 1995
<PAGE>
EXHIBIT 99
PROXY
CAMDEN TELEPHONE COMPANY, INC.
170 West Main Street
Camden, Indiana 46917-0066
This Proxy is Solicited on Behalf of the Board of Directors.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY USING THE ENCLOSED ENVELOPE.
The undersigned hereby appoints James Sullivan and JoAnn Johnson
and either of them as Proxies, each with the power to appoint his or her
substitute, and hereby authorizes them or either of them to represent and to
vote all the shares of capital stock, Common, no par value, of Camden Telephone
Company, Inc., held on record by the undersigned on August 22, 1995, at the
special meeting of shareholders to be held on October 6, 1995, and any
adjournment or adjournments thereof, as described below on the following
Proposals and also, as such proxies may in their discretion determine, upon all
other matters of business as may properly come before such meeting and any
adjournment or adjournments thereof.
PROPOSAL 1. The approval and adoption of the Agreement and Plan of
Merger dated as of April 27, 1995, as amended by the First Supplemental
Agreement dated as of June 29, 1995, and the Second Supplemental Agreement dated
as of August 10, 1995, by and among Telephone and Data Systems, Inc. ("TDS"),
TDS-Camden Acquisition Corp. ("Sub") and Camden Telephone Company, Inc.
("Camden"), providing for the merger of Sub with and into Camden, as set forth
in the accompanying Proxy Statement-Prospectus.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
PROPOSAL 2. The adjournment or adjournments of the special meeting
of shareholders if a quorum is not obtained.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned. If no direction is made, this proxy will be
voted FOR the Proposal 1 and Proposal 2.
Please sign exactly as your name appears on your Camden stock certificate. When
shares are held by joint tenants, both should sign. When signing as attorney, as
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign the partnership name by
authorized person.
Date:____________________, 1995 ________________________________________
Signature
----------------------------------------
Signature(s), if held jointly
<PAGE>
