-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O9BgzttS7oc+p4V7TeSVdOaiVcSv243Buju4xA+bCQcqDdPPikowge3RzIdVySBF nXRsnulKpeCYPX//AfD4Ow== 0001051512-98-000015.txt : 19980701 0001051512-98-000015.hdr.sgml : 19980701 ACCESSION NUMBER: 0001051512-98-000015 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980630 EFFECTIVENESS DATE: 19980630 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEPHONE & DATA SYSTEMS INC /DE/ CENTRAL INDEX KEY: 0001051512 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 362669023 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-58121 FILM NUMBER: 98658115 BUSINESS ADDRESS: STREET 1: 30 NORTH LASALLE STREET STREET 2: 8401 GREENWAY BLVD CITY: CHICAGO STATE: IL ZIP: 60602 BUSINESS PHONE: 3126301900 MAIL ADDRESS: STREET 1: 30 NORTH LASALLE STREET STREET 2: 8401 GREENWAY BLVD CITY: CHICAGO STATE: IL ZIP: 60602 S-8 1 FORM S-8 As filed with the Securities and Exchange Commission on June 30, 1998 Registration No. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 _______________ TELEPHONE AND DATA SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 36-2669023 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 30 North LaSalle Street, Suite 4000 Chicago, Illinois 60602 (Address of Principal Executive Offices) (Zip Code) Telephone and Data Systems, Inc. 1998 Long-Term Incentive Plan Restated and Amended Stock Option Agreement, dated June 26, 1992 (Full title of the plan) LeRoy T. Carlson Chairman Telephone and Data Systems, Inc. 30 North LaSalle Street, Suite 4000 Chicago, Illinois 60602 (Name and address of agent for service) (312) 630-1900 (Telephone number, including area code, of agent for service) _______________ CALCULATION OF REGISTRATION FEE ====================================================================================================================
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of to be Registered Registered Offering Price Per Share Aggregate Offering Price Registration Fee - -------------------------------------------------------------------------------------------------------------------- Common Shares 2,054,000 shares $39.25 (1) $80,619,500 (1) $23,783 ==================================================================================================================== (1) Estimated for the Common Shares solely for the purpose of calculating the registration fee pursuant to Rule 457(h)(1) on the basis of the average of the high and low prices of $39.75 and $38.75, respectively, of such shares on the American Stock Exchange on June 26, 1998. ====================================================================================================================
EXPLANATORY NOTE This Registration Statement is being filed to register 2,000,000 Common Shares, par value $.01 per share ("Common Shares") of the Company, pursuant to the Company's 1998 Long-Term Incentive Plan. In addition, this Registration Statement is being filed to register 54,000 Common Shares for issuance pursuant to the Restated and Amended Stock Option Agreement dated June 26, 1992, between the Company and George L. Dienes. This registration statement also registers an indeterminate number of securities which may be issuable pursuant to stock splits, stock dividends or similar transactions. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Item 1. Plan Information.* ---------------- Item 2. Registration Information and Employee Plan Annual Information.* ------------------------------------------------------------- * Information required by Part I to be contained in the Section 10(a) prospectus is omitted from the Registration Statement in accordance with Rule 428 under the 1933 Act and the Note to Part I of Form S-8. I-2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. --------------------------------------- The following documents which have heretofore been filed by the Company with the Securities and Exchange Commission (the "Commission") pursuant to the 1934 Act, are incorporated by reference herein and shall be deemed to be a part hereof: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1997; 2. The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998; 3. The Company's Current Reports on Form 8-K, dated January 28, February 10, March 24, April 17, April 21, April 27, May 22, June 1 and June 12, 1998; 4. The description of the Company's capital stock contained in the Company's Report on Form 8-A/A-3, dated May 22, 1998; and 5. The Notice of Special Meeting and Proxy Statement of TDS Iowa and Prospectus of TDS Delaware, dated March 24, 1998, which is part of the Registrant's Registration Statement on Form S-4 (Registration No.333-42535). All documents, subsequently filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and made a part hereof from their respective dates of filing (such documents, and the documents enumerated above, being hereinafter referred to as "Incorporated Documents"). Any statement contained in an Incorporated Document shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed Incorporated Document modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. Description of Securities. ------------------------- See Item 3. Item 5. Interests of Named Experts and Counsel. -------------------------------------- Certain legal matters relating to the securities registered hereby will be addressed by Sidley & Austin, One First National Plaza, Chicago, Illinois 60603. The Company is controlled by a voting trust. Walter C.D. Carlson, a trustee and beneficiary of the voting trust and a director of the Company and certain subsidiaries of the Company, Michael G. Hron, the Secretary of the Company and certain subsidiaries of the Company, William S. DeCarlo, the Assistant Secretary of the Company and certain subsidiaries of the Company, Stephen P. Fitzell, the Secretary of certain subsidiaries of the Company, and Sherry S. Treston, the Assistant Secretary of certain subsidiaries of the Company, are partners of Sidley & Austin. Item 6. Indemnification of Directors and Officers. ----------------------------------------- The Company's Restated Certificate of Incorporation contains a provision providing that no director or officer of the Company shall be personally liable to the Company or its stockholders for monetary damages for breach II-1 of fiduciary duty as a director or officer except for breach of the director's or officer's duty of loyalty to the Company or its stockholders, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, unlawful payment of dividends, unlawful stock redemptions or repurchases and transactions from which the director or officer derived an improper personal benefit. The Restated Certificate of Incorporation also provides that the Company shall indemnify directors and officers of the Company, its consolidated subsidiaries and certain other related entities generally in the same manner and to the extent permitted by the Delaware General Corporation Law, as more specifically provided in the Restated Bylaws of the Company. The Restated Bylaws provide for indemnification and permit the advancement of expenses by the Company generally in the same manner and to the extent permitted by the Delaware General Corporation Law, subject to compliance with certain requirements and procedures specified in the Restated Bylaws. In general, the Restated Bylaws require that any person seeking indemnification must provide the Company with sufficient documentation as described in the Restated Bylaws and, if an undertaking to return advances is required, to deliver an undertaking in the form prescribed by the Company and provide security for such undertaking if considered necessary by the Company. In addition, the Restated Bylaws specify that, except to the extent required by law, the Company does not intend to provide indemnification to persons under certain circumstances, such as where the person was not acting the interests of the Company or was otherwise involved in a crime or tort against the Company. Under the Delaware General Corporation Law, directors and officers, as well as other employees or persons, may be indemnified against judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation - a "derivative action"), and against expenses (including attorney's fees) in any action (including a derivative action), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. However, in the case of a derivative action, a person cannot be indemnified for expenses in respect of any matter as to which the person is adjudged to be liable to the corporation unless and to the extent a court determines that such person is fairly and reasonably entitled to indemnity for such expenses. Delaware law also provides that, to the extent a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action or matter, the corporation must indemnify such party against expenses (including attorneys' fees) actually and reasonably incurred by such party in connection therewith. Expenses incurred by a director or officer in defending any action may be paid by a Delaware corporation in advance of the final disposition of the action upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it is ultimately determined that such party is not entitled to be indemnified by the corporation. The Delaware General Corporation Law provides that the indemnification and advancement of expenses provided thereby are not exclusive of any other rights granted by bylaws, agreements or otherwise, and provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person, whether or not the corporation would have the power to indemnify such person under Delaware law. The Company has directors' and officers' liability insurance which provides, subject to certain policy limits, deductible amounts and exclusions, coverage for all persons who have been, are or may in the future be, directors or officers of the Company, against amounts which such persons must pay resulting from claims against them by reason of their being such directors or officers during the policy period for certain breaches of duty, omissions or other acts done or wrongfully attempted or alleged. Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, II-2 submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. Item 7. Exemption from Registration Claimed. ----------------------------------- Not Applicable. Item 8. Exhibits. -------- The exhibits accompanying this Registration Statement are listed on the accompanying Exhibit Index. The Plan is not intended to be qualified under Section 401(a) of the Internal Revenue Code. Item 9. Undertakings. ------------ The Company hereby undertakes: 1. to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (a) to include any prospectus required by Section 10(a)(3) of the 1933 Act; (b) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (c) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs 1.(a) and 1. (b) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference in the registration statement. 2. that, for the purpose of determining any liability under the 1933 Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 3. to remove from registration by means of a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the offering. 4. that, for the purposes of determining any liability under the 1933 Act, each filing of the Company's Annual Report pursuant to Section 13(a) or Section 15(d) of the 1934 Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the 1934 Act) that is incorporated by reference in the registration statement shall be deemed to II-3 be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering hereof. 5. that, insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement or Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on the 30th day of June, 1998. TELEPHONE AND DATA SYSTEMS, INC. By: /s/ LeRoy T. Carlson --------------------------------- LeRoy T. Carlson, Chairman POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints LeRoy T. Carlson and LeRoy T. Carlson, Jr., and each of them individually, as his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and to take such actions in, and file with the appropriate applications, statements, consents and other documents as may be necessary or expedient to register securities of the Registrant for sale, granting unto said attorney-in-fact and agent full power and authority to do so and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all the said attorney-in-fact and agent or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof and the registrant hereby confers like authority on its behalf. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement or Amendment has been signed below by the following persons in the capacities and on the 30th day of June, 1998. Signature Title --------- ----- /s/LeRoy T. Carlson - ---------------------------------- Chairman and Director LeRoy T. Carlson /s/LeRoy T. Carlson, Jr. - ---------------------------------- President and Director LeRoy T. Carlson, Jr. (chief executive officer) /s/Murray L. Swanson - ---------------------------------- Executive Vice President- Finance and Murray L. Swanson Director (principal financial officer) /s/James Barr III - ---------------------------------- Director James Barr III /s/Rudolph E. Hornacek - ---------------------------------- Director Rudolph E. Hornacek /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/Letitia C.G. Carlson - --------------------------------- Director Letitia C.G. Carlson /s/Donald R. Brown - --------------------------------- Director Donald R. Brown - --------------------------------- Director George W. Off /s/Martin L. Solomon - --------------------------------- Director Martin L. Solomon /s/Gregory J. Wilkinson - --------------------------------- Vice President and Controller (principal Gregory J. Wilkinson accounting officer) EXHIBIT INDEX The following documents are filed herewith or incorporated herein by reference. Exhibit No. Description - ------- ----------- 4.1 Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Registrant's Registration Statement on Form 8-A/A-3) 4.2 Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form 8-A/A-3) 5 Opinion of Counsel 23.1 Consent of Independent Public Accountants 23.2 Consent of Counsel (contained in Exhibit 5) 24 Powers of Attorney (included on Signature Page) 99.1 1998 Long-Term Incentive Plan (incorporated herein by reference to Exhibit D to the Registrant's Proxy Statement/Prospectus, dated March 24, 1998, which is part of the Registrant's Registration Statement on Form S-4 (Registration No. 333-42535)) 99.2 Restated and Amended Stock Option Agreement, dated June 26, 1992, between George L. Dienes and the Registrant (the "Agreement") 99.3 Amendment and adjustment of the Agreement (incorporated herein by reference to Proposal 2 in the Registrant's Proxy Statement/Prospectus, dated March 24, 1998, which is part of the Registrant's Registration Statement on Form S-4 (Registration No. 333-42535)). EX-5 2 EXHIBIT 5 EXHIBIT 5 SIDLEY & AUSTIN ONE FIRST NATIONAL PLAZA CHICAGO, ILLINOIS 60603 (312) 853-7000 June 30, 1998 Telephone and Data Systems, Inc. Suite 4000 30 North LaSalle Street Chicago, Illinois 60602 Re: Telephone and Data Systems, Inc. Registration Statement on Form S-8 ---------------------------------- Gentlemen: We are counsel to Telephone and Data Systems, Inc., a Delaware corporation (the "Company"), and have represented the Company in connection with the Form S-8 Registration Statement (the "Registration Statement") being filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the offer and sale of 2,054,000 Common Shares, par value $.01 per share (the "Shares"), of the Company pursuant to the Telephone and Data Systems, Inc. 1998 Long-Term Incentive Plan, as amended (the "Plan"), and the Restated and Amended Stock Option Agreement, dated June 26, 1992, between the Company and George L. Dienes, as amended (the "Agreement"). In rendering this opinion, we have examined and relied upon copies of the Plan, the Agreement and the Registration Statement and Prospectus related to the Plan and the Agreement. We have also examined and relied upon originals, or copies of originals certified to our satisfaction, of such agreements, documents, certificates and other statements of governmental officials and other instruments, and examined such questions of law and have satisfied ourselves as to such matters of fact, as we have considered relevant and necessary as a basis for this opinion. We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of all natural persons and the conformity with the original documents of any copies thereof submitted to us for our examination. Based on the foregoing, we are of the opinion that: 1. The Company is duly incorporated and validly existing under the laws of the State of Delaware. 2. Each Share will be legally issued, fully paid and nonassessable when: (i) the Registration Statement shall have become effective under the Securities Act; (ii) such Share shall have been duly issued and sold in the manner contemplated by the Plan or Agreement, as the case may be; and (iii) a certificate representing such Share shall have been duly executed, countersigned and registered and duly delivered to the purchaser thereof against payment Telephone and Data Systems, Inc. June 30, 1998 Page 2 of the agreed consideration therefor (not less than the par value thereof) in accordance with the terms of the Plan or the Agreement, as the case may be. This opinion is limited to the General Corporation Law of the State of Delaware and to the Securities Act. We do not find it necessary for the purposes of this opinion to cover, and accordingly we express no opinion as to, the application of the securities or "Blue Sky" laws of the various states to the sale of the Shares. The Company is controlled by a voting trust. Walter C.D. Carlson, a trustee and beneficiary of the voting trust and a director of the Company and certain subsidiaries of the Company, Michael G. Hron, the Secretary of the Company and certain subsidiaries of the Company, William S. DeCarlo, the Assistant Secretary of the Company and certain subsidiaries of the Company, Stephen P. Fitzell, the Secretary of certain subsidiaries of the Company, and Sherry S. Treston, the Assistant Secretary of certain subsidiaries of the Company, are partners of this Firm. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to all references to our Firm in or made a part of the Registration Statement or any related Prospectus. Very truly yours, SIDLEY & AUSTIN EX-23 3 EXHIBIT 23.1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Form S-8 Registration Statement of Telephone and Data Systems, Inc. of our report dated January 28, 1998 (except with respect to the matters discussed in Note 5, "American Paging Merger"; and in Note 16, as to which the date is February 18, 1998) 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, 1997 and to the incorporation by reference in this Form S-8 Registration Statement of our report dated January 28, 1998, (except with respect to the matters discussed in Note 5, "American Paging Merger"; and in Note 16, as to which the date is February 18, 1998) 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, 1997. We also consent to the incorporation by reference of our reports dated January 28, 1998 on the financial statements of the United States Cellular Group, the TDS Telecommunications Group and the TDS Group for the year ended December 31, 1997, our report dated January 28, 1998 (except with respect to the matters discussed in Note 10, as to which the date is February 5, 1998) on the financial statements of the Aerial Communications Group and our report dated January 28, 1998 (except with respect to the matters discussed in Note 5, "American Paging Merger"; and in Note 16, as to which the date is February 18, 1998) on the consolidated financial statements of Telephone and Data Systems, Inc. and Subsidiaries for the year ended December 31, 1997, included in the Telephone and Data Systems, Inc. Proxy Statement/Prospectus on Form S-4, as amended. We also consent to all references to our Firm included in this Registration Statement. ARTHUR ANDERSEN LLP Chicago, Illinois June 30, 1998 EX-99 4 EXHIBIT 99.2 EXHIBIT 99.2 RESTATED AND AMENDED STOCK OPTION AGREEMENT ---------------------- THIS AGREEMENT, is made as of the 26th day of June, 1992, between TELEPHONE AND DATA SYSTEMS, INC., an Iowa corporation (the "Company"), and GEORGE L. DIENES (the "Executive"). WHEREAS, the Company and Executive are concurrently herewith entering into an Employment Agreement dated the date hereof (the "Employment Agreement"); WHEREAS, the Executive and the Company previously entered into a Stock Option Agreement dated January 14, 1985 (the "Prior Stock Option Agreement); WHEREAS, the Executive and the Company entered into a letter agreement dated January 7, 1992 (the "Termination Agreement"), pursuant to which the Prior Stock Option Agreement was suspended as of December 31, 1991, except for the continuation of certain rights of the Executive thereunder as provided by the Termination Agreement; and WHEREAS, the Company has agreed to re-hire the executive and reinstate the rights that the Executive enjoy under the Prior Stock Option Agreement, as if his rights thereunder had not been suspended; NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises set forth below, it is hereby agreed as follows: 1. The Executive acknowledges that by his execution and delivery of this Agreement any rights he received under the Prior Stock Option Agreement, including any rights governed by Section 1(b) of Termination Agreement are hereby amended and restated in their entirety. 2. Subject to all of the terms and conditions set forth herein, the Company hereby grants to the Executive an option (the "Option") to purchase all or any part of a total of 54,000 Common Shares, par value $1.00 per share, of the Company, at a price of $4.15 per share. 3. The Option may be exercised on and after the dates, and in the amounts, set forth in the following table:
Date # of Shares ---- ----------- January 14, 1992 26,239.50 January 14, 1993 through January 14, 1996 3,748.50 annually January 14, 1997 3,766.50 January 14, 1998 2,999.25 January 14, 1999 2,999.25 January 14, 2000 3,001.50 ----------- For a total of 54,000.00 ===========
The Executive may exercise the Option with respect to less than all of the Common Shares to which he is entitled in any particular year. Any shares subject to the Option which are not purchased in the year they first become available may be purchased in subsequent years in addition to the shares available in that particular year. The Option shall lapse with respect to all shares on January 15, 2001, or as provided in Section 5. 4. The Option may be exercised by the Executive by delivering at least fifteen (15) day's advance written notice to the Company's principal office of the Executive's intent to exercise the Option on a date specified in such notice with respect to a specified number of shares, and by making full payment of the amount due on account of such exercise on or before such exercise date. 5. The Option is not transferable, otherwise than by will or by the laws of descent and distribution and may be exercised during the life of the Executive only by him. In the event of the death of the Executive while still acting as an officer of the Company pursuant to the Employment Agreement, this Option shall be exercisable, for a period of three (3) months after the date of the Executive's death and only to the extent the Executive could have exercised it on the date of his death, by the person to whom the Option is transferred by will or by the applicable laws of descent and distribution. Additionally, this Option shall be exercisable, for a period of three (3) months after the date of termination of the Employment Agreement and only to the extent the Executive could have exercised it on the date of his termination. 6. Neither the executive nor any assignee of any portion of the Option shall have any right as a shareholder of the Company with respect to the shares subject to the Option until the date of issuance of a stock certificate or stock certificates upon the exercise of the Option. 7. Upon the exercise of the Option for less than all of the shares covered hereby, the Executive shall deliver this instrument to the Company, so that it may be marked to indicate the extent to which the Option has been exercised, after which the Company shall return it to the Executive. 8. (a) If, during the term of the Option, the Company shall effect any increase in the number of its Outstanding Common Shares through a stock dividend or split-up, or effect any decrease in the number of its outstanding Common Shares through a reverse stock split or other combination of such shares, then, at the time such change becomes effective, the number of Common Shares then subject to the Option shall be proportionately increased, in the case of a stock dividend or a stock split, or proportionately decreased, in the case of a reverse stock split or other combination, and the purchase price of each share subject to the Option shall be appropriately adjusted. (b) If, during the term of the Option, the Company is merged into or consolidated with another corporation under circumstances where the Company is not the surviving corporation, or if the Company sells or otherwise disposes of substantially all of its assets, or if the Company is a party to a reorganization as a result of which the Company becomes the wholly-owned subsidiary of another corporation, then, at the time such merger, consolidation, sale or reorganization becomes effective, the holder of the Option shall be entitled, upon exercise of the Option, to receive, in lieu of Common Shares, shares of such stock or other consideration as the holders of Common Shares received pursuant to the terms of such merger, consolidation, sale or reorganization. 9. The Company shall not be required to sell or issue any shares under the Option if the issuance of such shares would constitute a violation by the holder of the Option or the Company of any provisions of any law or any regulation of any governmental authority. Specifically, in connection with the Securities Act of 1933, as now in effect or hereafter amended (the "Act"), upon the exercise of the Option, unless a registration statement under the Act is in effect with respect to the shares to be purchased pursuant to such exercise, the Company shall not be required to issue such shares unless the Company has received evidence satisfactory to it to the effect that the holder of the Option is not acquiring such shares with a view to the distribution thereof in violation of the Act, and unless the certificate which is issued to represent such shares bears the following legend: The shares of stock represented by this certificate have not been registered under the Securities Act of 1993 or under the securities act of any state and may not be sold or transferred except upon such registration or upon receipt by the Company of an opinion of counsel satisfactory to the Company, that registration is not required for such sale or transfer. 10. This Agreement shall be construed and enforced according to the laws of the State of Illinois, and shall be binding upon the Company and its successors and assigns and upon the Executive and his heirs, assigns, executors and administrators. During the Executive's lifetime, the parties hereto may amend, modify or rescind this Agreement by written instrument and without the consent of any other person. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. TELEPHONE AND DATA SYSTEMS, INC. /s/ LeRoy T. Carlson -------------------------------- By Its Duly Authorized Officer EXECUTIVE /s/ George L. Dienes -------------------------------- George L. Dienes SIGNATURE PAGE OF STOCK OPTION AGREEMENT FOR GEORGE L. DIENES -----END PRIVACY-ENHANCED MESSAGE-----