FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 17, 1998
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TELEPHONE AND DATA SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Iowa 1-8251 36-2669023
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
30 North LaSalle Street, Chicago, Illinois 60602
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 630-1900
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On April 17, 1998, Telephone and Data Systems, Inc. (the "Company" or
"TDS") announced that the Board of Directors of the Company determined to take
certain action at the TDS 1998 Annual Meeting of Shareholders, assuming
shareholders approve the previously announced Tracking Stock Proposal at the
Special Meeting to be held on April 27, 1998. TDS intends to submit a proposal
to shareholders at the TDS 1998 Annual Meeting to consider certain amendments to
the proposed charter of the new TDS Delaware corporation, which the Board of
Directors believes would improve the corporate governance provisions of the
Tracking Stock Proposal.
This Current Report on Form 8-K is being filed for the purpose of
filing the news release issued by the Company relating to such announcement as
an exhibit.
Item 7. Financial Statements and Exhibits
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Exhibits
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The exhibits accompanying this report are listed in the accompanying
Exhibit Index.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
Telephone and Data Systems, Inc.
(Registrant)
Date: April 20, 1998
By: /s/ Gregory J. Wilkinson
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Gregory J. Wilkinson
Vice President and Controller
(principal accounting officer)
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
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99 News Release dated April 17, 1998
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Exhibit 99
Contact: Mark A. Steinkrauss
Vice President - Corporate Relations
(312) 630-1900
[email protected]
FOR RELEASE: IMMEDIATE
TDS BOARD APPROVES AMENDMENTS TO PROPOSED DELAWARE CHARTER
TO IMPROVE CORPORATE GOVERNANCE FEATURES
April 17, 1998, Chicago, Illinois - Telephone and Data Systems, Inc. (AMEX:
TDS), announced today that the Board of Directors of the Company determined to
take certain action at the TDS 1998 Annual Meeting of Shareholders, assuming
shareholders approve the previously announced Tracking Stock Proposal at the
Special Meeting to be held on April 27, 1998. TDS intends to submit a proposal
to shareholders at TDS 1998 Annual Meeting, currently expected to occur in July
1998, to consider certain amendments to the proposed charter of the new TDS
Delaware corporation, which the Board of Directors believes would improve the
corporate governance provisions of the Tracking Stock Proposal in three key
respects.
1. The TDS Delaware charter would be amended to require a class vote by
the holders of a majority of each of the Common Shares and Series A
Common Shares in connection with a merger or consolidation of TDS.
2. The TDS Delaware charter would be amended to require a class vote by
the holders of a majority of the Common Shares to increase the
authorized number of Common Shares, and to require a class vote by the
holders of a majority of the Series A Common Shares to increase the
authorized number of Series A Common Shares.
3. The TDS Delaware charter would be amended to provide that TDS would
be subject to the provisions of Section 203 of the Delaware General
Corporation Law.
LeRoy T. Carlson, Jr. (Ted), TDS's President and CEO, said, "Although the
Company has received support for the Tracking Stock Proposal from TDS
shareholders, the TDS Board of Directors made these changes based on the
objections of certain shareholders to the terms of the Tracking Stock Proposal.
These changes will have the effect of retaining certain corporate governance
protections which the holders of Common Shares and Series A Common Shares
currently have under Iowa law. The Board's intention to take this action at the
1998 Annual Meeting of Shareholders allows a prompt, separate vote on these
corporate governance provisions, while enabling TDS to promptly complete the
reincorporation into Delaware and to proceed with the public offering of the TDS
Telecom tracking stock. We believe that delays inherent in revising the existing
proxy materials to
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include these changes as part of the Tracking Stock Proposal would delay the
advantages of the reincorporation and the TDS Telecom public offering and create
unnecessary uncertainty."
TDS indicated that the trustees of the TDS voting trust intend to vote in favor
of the proposed amendments.
The TDS Tracking Stock Proposal, which TDS shareholders are considering on April
27, is designed to unlock the value of TDS's business units by creating three
new classes of tracking stock that are intended to separately reflect the
performance of United States Cellular Corporation (AMEX: USM), Aerial
Communications, Inc. (NASDAQ: AERL), and TDS Telecommunications, Inc., TDS's
cellular, PCS and landline telephone businesses, respectively, and changing the
state of incorporation of TDS from Iowa to Delaware.
Mr. Carlson continued, "The Tracking Stock Proposal is intended to result in
greater market recognition of the value of TDS and its three principal business
groups, thereby enhancing shareholder value over the long term. The tracking
stocks are expected to provide TDS with greater flexibility in raising capital
and making acquisitions, while preserving the benefits of being part of a
consolidated enterprise. The plan will also give TDS shareholders the
opportunity to invest in any one or more of our businesses, depending on their
investment objectives. These three businesses, with their different cycles of
development, may offer different investors the investment characteristics they
desire. Investors and analysts value each of these businesses separately, and
now our shareholders will also have the opportunity to decide which of these
investments to retain."
Mr. Carlson added, "The Tracking Stock Proposal is also intended to allow TDS to
benefit from Delaware's well-developed corporate laws and substantial body of
case law, which will provide a greater measure of predictability with respect to
corporate legal affairs, and will offer clearer guidance with respect to legal
issues that may arise as a result of the existence of separate classes of
tracking stock."
TDS indicated that if the Tracking Stock Proposal is approved at the Special
Meeting on April 27, the reincorporation is expected to occur as soon as
practicable thereafter, subject to the receipt of all regulatory approvals,
which are anticipated by mid to late May 1998.
TDS also announced that a special committee of the board of directors of Aerial
has determined to recommend that the Aerial board reject the previously
announced proposal from TDS to acquire all of the Aerial Common Shares that it
does not own in exchange for shares of tracking stock of TDS which would track
the performance of TDS's equity interest in Aerial. The Aerial special committee
has advised TDS that it would be prepared to consider a revised proposal which
"contains increased protections designed to preserve Aerial's inherent value for
its public stockholders and also embodies an increased equity interest in the
Aerial Group tracking stock for the Aerial public stockholders."
Mr. Carlson stated "Although TDS is disappointed with the rejection of its
initial offer, TDS intends to make a revised proposal to the Aerial special
committee and to continue to seek an agreement to acquire the Aerial Common
Shares that it does not own on mutually
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acceptable terms."
TDS further indicated that, although the special committee of the board of
directors of U.S. Cellular has not yet held substantive negotiations with TDS
and is continuing to conduct due diligence, it has expressed significant
reservations with respect to the TDS offer to acquire all of the U.S. Cellular
Common Shares that TDS does not own in exchange for shares of tracking stock of
TDS which would track the performance of TDS's equity interest in U.S. Cellular.
Mr. Carlson stated, "The acquisition of the publicly-held shares of Aerial and
U.S. Cellular, while desirable, are not necessary components of the Tracking
Stock Proposal. TDS believes that the Tracking Stock Proposal will provide
substantial benefits to the TDS shareholders even if TDS is unable to reach
mutually acceptable agreements with the Aerial or U.S. Cellular special
committees. Although TDS intends to continue to try to reach an agreement with
the Aerial and U.S. Cellular special committees on terms that would be mutually
acceptable, if TDS cannot reach an agreement with either of the Aerial or U.S.
Cellular special committees, TDS may distribute shares of tracking stock
representing approximately 75% of its interest in Aerial or U.S. Cellular to TDS
shareholders. Nevertheless, the Company will not proceed with any action unless
the TDS Board determines that such action would be in the best interests of the
TDS shareholders."
TDS is a Chicago-based telecommunications company with cellular telephone, local
telephone and PCS operations. TDS strives to build value for its shareholders by
providing excellent communications services in attractive, closely related
segments of the telecommunications industry.
Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary
Statement: This announcement contains "forward-looking" statements, as defined
in the Private Securities Litigation Reform Act of 1995, that are based on
current expectations, estimates and projections. Statements that are not
historical facts, including statements about the Company's beliefs and
expectations, are forward-looking statements. These statements contain potential
risks and uncertainties and, therefore, actual results may differ materially.
The Company undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
Important factors that may affect these projections or expectations include, but
are not limited to: changes in the overall economy; changes in competition in
markets in which the Company operates; advances in telecommunications
technology; changes in the telecommunications regulatory environment; pending
and future litigation; availability of future financing; start-up of PCS
operations; and unanticipated changes in growth in cellular customers,
penetration rates, churn rates and the mix of products and services offered in
the Company's markets. Readers should evaluate any statements in light of these
important factors.
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