UNITED STATES CELLULAR CORPORATION
1994 LONG-TERM INCENTIVE PLAN
1995 PERFORMANCE STOCK OPTION AWARD
United States Cellular Corporation, a Delaware
corporation (the "Company"), hereby grants to
___________________________ (the "Optionee"), as of
_______________, 1995 (the "Option Date"), pursuant to the
provisions of the United States Cellular Corporation 1994 Long-
Term Incentive Plan (the "Plan"), a Non-Qualified Stock Option
(the "Option") to purchase from the Company _______ shares of
Common Stock at the price of $____ per share upon and subject to
the terms and conditions set forth below. Capitalized terms not
defined herein shall have the meanings specified in the Plan.
1. Time and Manner of Exercise of Option.
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1.1. Exercise of Option. (a) Term. The Option
shall become exercisable on December 15, 1995 and shall be
exercisable until November 9, 2004 (the "Expiration Date").
(b) Disability. If the Optionee's employment by the
Company terminates by reason of Disability, the Option shall be
exercisable only to the extent it is exercisable on the effective
date of the Optionee's termination of employment and after such
date may be exercised by the Optionee (or the Optionee's Legal
Representative) for a period of 12 months after the effective
date of the Optionee's termination of employment or until the
Expiration Date, whichever period is shorter. If the Optionee
shall die within such period, the Option shall be exercisable by
the beneficiary or beneficiaries duly designated by the Optionee
or, if none, the executor or administrator of the
Optionee's estate or, if none, the person to whom the Optionee's
rights hereunder shall pass by will or by applicable laws of
descent and distribution, to the same extent the Option was
exercisable by the Optionee on the date of the Optionee's death,
for a period ending on the later of (i) the last day of such
period and (ii) 90 days after the date of the Optionee's death.
(c) Retirement or Resignation with Prior Consent of
the Board. If the Optionee's employment by the Company
terminates by reason of the Optionee's retirement after
attainment of age 65 or by reason of the Optionee's resignation
of employment at any age with the prior consent of the Board (as
evidenced in the Company's minute book), the Option shall be
exercisable only to the extent it is exercisable on the effective
date of the Optionee's termination of employment and after such
date may be exercised by the Optionee (or the Optionee's Legal
Representative) for a period of 90 days after the effective date
of the Optionee's retirement or resignation, as the case may be,
or until the Expiration Date, whichever period is shorter. If
the Optionee shall die within such period, the Option shall be
exercisable by the beneficiary or beneficiaries duly designated
by the Optionee or, if none, the executor or administrator of the
Optionee's estate or, if none, the person to whom the Optionee's
rights hereunder shall pass by will or by applicable laws of
descent and distribution, to the same extent the Option was
exercisable by the Optionee on the date of the Optionee's death,
for a period ending 180 days after the effective date of the
Optionee's retirement or resignation.
(d) Transfer to Affiliate. If an Optionee's
employment by the Company terminates by reason of the Optionee's
transfer of employment to an Affiliate, then the Optionee's
employment with such Affiliate shall be deemed to be employment
with the Company solely for the purpose of determining the
exercisability of the Option, except that the Option shall be
exercisable only to the extent it is exercisable at the time of
such transfer.
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(e) Death. If the Optionee's employment by the
Company terminates by reason of death, the Option shall be
exercisable only to the extent it is exercisable on the date of
death and after the date of death may be exercised by the
beneficiary or beneficiaries duly designated by the Optionee or,
if none, the executor or administrator of the Optionee's estate
or, if none, the person to whom the Optionee's rights hereunder
shall pass by will or by applicable laws of descent and
distribution for a period of 180 days after the date of death or
until the Expiration Date, whichever period is shorter.
(f) Other Termination of Employment. If the
Optionee's employment by the Company terminates for any reason
other than Disability, retirement after attainment of age 65,
resignation of employment with the prior consent of the Board (as
evidenced in the Company's minute book), a transfer to an
Affiliate or death, the Option shall be exercisable only to the
extent it is exercisable on the effective date of the Optionee's
termination of employment and after such date may be exercised by
the Optionee (or the Optionee's Legal Representative) for a
period of 30 days after the effective date of the Optionee's
termination of employment or until the Expiration Date, whichever
period is shorter. If the Optionee shall die within such period,
the Option shall be exercisable only to the extent it is
exercisable on the date of death and after the date of death may
be exercised by the beneficiary or beneficiaries duly designated
by the Optionee or, if none, the executor or administrator of the
Optionee's estate or, if none, the person to whom the Optionee's
rights hereunder shall pass by will or by applicable laws of
descent and distribution for a period of 120 days after the date
of death or until the Expiration Date, whichever period is
shorter. Notwithstanding the first sentence of this subsection
(f), if the Optionee ceases to be employed by the Company on
account of the Optionee's negligence, willful misconduct,
competition with the Company or an Affiliate or misappropriation
of confidential information of the Company or an Affiliate, the
Option shall terminate on the date the Optionee's employment with
the Company terminates, unless such Option terminates earlier
pursuant to Section 1.2.
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1.2 Forfeiture of Option Upon Competition with Company
or Any Affiliate or Misappropriation of Confidential Information.
Notwithstanding any other provision herein, the Option granted
pursuant to this Award shall not be exercisable on or after any
date on which the Optionee (a) enters into competition with the
Company or an Affiliate, or (b) misappropriates confidential
information of the Company or an Affiliate, as determined by the
Committee or the Company in its sole discretion, and, accordingly,
shall be terminated and thereby forfeited to the extent it has not
been exercised as of such date.
For purposes of the preceding sentence, the Optionee
shall be treated as entering into competition with the Company or
an Affiliate if the Optionee (i) directly or indirectly,
individually or in conjunction with any person, firm or
corporation, has contact with any customer of the Company or an
Affiliate or any prospective customer which has been contacted or
solicited by or on behalf of the Company or an Affiliate for the
purpose of soliciting or selling to such customer or
prospective customer any product or service, except to the extent
such contact is made on behalf of the Company or an Affiliate, or
(ii) otherwise competes with the Company or an Affiliate in any
manner or otherwise engages in the business of the Company or an
Affiliate.
The Optionee shall be treated as misappropriating
confidential information of the Company or an Affiliate if the
Optionee (i) uses confidential information (as described below)
for the benefit of anyone other than the Company or such
Affiliate, as the case may be, or discloses the confidential
information to anyone not authorized by the Company or such
Affiliate, as the case may be, to receive such information, (ii)
upon termination of employment, makes any summaries of, takes any
notes with respect to, or memorizes any information or takes any
confidential information or reproductions thereof from the
facilities of the Company or an Affiliate, or (iii) upon
termination of employment or upon the request of the Company or
an Affiliate, fails to return all confidential
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information then in the Optionee's possession. "Confidential
information" shall mean any confidential and proprietary
drawings, reports, sales and training manuals, customer lists,
computer programs, and other material embodying trade secrets or
confidential technical, business, or financial information of the
Company or an Affiliate.
1.3. Method of Exercise. Subject to the limitations
set forth in this Award, the Option may be exercised by the
holder of the Option (1) by giving written notice to the Chief
Financial Officer of the Company at least 15 days prior to the
exercise date specified in such notice, which notice shall
specify the number of whole shares of Stock to be purchased and
shall be accompanied by payment therefor in full (unless another
arrangement for such payment which is satisfactory to the Company
has been made) either (i) in cash, (ii) in previously owned whole
shares of Stock (which the holder has held (or the holder and
Optionee have held) for at least six months prior to the delivery
of such shares of Stock or which the holder purchased on the open
market and for which the holder has good title free and clear of
all liens and encumbrances) having a Fair Market Value,
determined as of the date of exercise, equal to the aggregate
purchase price payable by reason of such exercise, (iii) in cash
by a broker-dealer acceptable to the Company to whom the holder
has submitted an irrevocable notice of exercise, (iv) by
authorizing the Company to withhold whole shares of Stock which
would otherwise be delivered upon exercise of the Option having a
Fair Market Value, determined as of the date of exercise, equal
to the aggregate purchase price payable by reason of such
exercise, or (v) a combination of (i), (ii) and (iv), and (2) by
executing such documents as the Company may reasonably request.
The Committee shall have sole discretion to disapprove of an
election pursuant to any of clauses (ii) - (iv), and if Optionee
is subject to section 16 of the Exchange Act, the Company may
require that the method of making such payment be in compliance
with section 16 of the Exchange Act and the rules and regulations
thereunder. Any fraction of a share of Stock which would be
required to pay such purchase price shall be disregarded and the
remaining
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amount due shall be paid in cash by the holder. No share of
Stock shall be delivered until the full purchase price therefor
has been paid.
1.4. Full or Partial Cancellation of Option. In the event
that rights to purchase all or a portion of the shares of Stock
subject to the Option expire or are exercised, cancelled or
forfeited, the holder shall promptly return this Award to the
Company. If the holder continues to have rights to purchase
shares hereunder, the Company shall, within 10 days of the
holder's delivery of this Award to the Company, either (i) mark
the Award to indicate the extent to which the Option has expired
or been exercised, cancelled or forfeited or (ii) issue to the
holder a substitute option agreement applicable to such rights,
which agreement shall otherwise be substantially similar to this
Award in form and substance. If the holder does not return this
Award to the Company, cancellation of the Option, to the extent
it is expired, cancelled or forfeited shall nonetheless be
effective.
2. Additional Terms and Conditions of Option.
2.1. Option Subject to Acceptance of Award. The
Option shall become null and void unless the Optionee shall
accept the Award by executing it in the space provided at the end
hereof and returning it to the Company.
2.2. Transferability of Option. The Option may not
be transferred by the Optionee other than (i) by will or the laws
of descent and distribution, (ii) pursuant to a beneficiary
designation effective on the Optionee's death, or (iii) to a
Permitted Transferee. During the Optionee's lifetime the Option
is exercisable only by the Optionee (or the Optionee's Legal
Representative) or a Permitted Transferee. Except as permitted
by the foregoing, the Option may not be sold, transferred,
assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or
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otherwise) or be subject to execution, attachment or similar
process. Upon any attempt to so sell, transfer, assign, pledge,
hypothecate, encumber or otherwise dispose of the Option, the
Option and all rights hereunder shall immediately become null and
void.
2.3. Agreement by Optionee. As a condition
precedent to any exercise of the Option, the holder shall comply
with all regulations and requirements of any regulatory authority
having control of or supervision over the issuance or delivery of
shares of Stock and, in connection therewith, shall execute any
documents which the Committee shall in its sole discretion deem
necessary or advisable.
2.4. Withholding Taxes. (a) As a condition
precedent to any exercise of the Option, the holder shall, upon
request by the Company, pay to the Company in addition to the
purchase price of the shares of Stock, such amount of cash as the
Company may be required, under all applicable federal, state,
local or other laws or regulations, to withhold and pay over as
income or other withholding taxes (the "Required Tax Payments")
with respect to such exercise of the Option. If the holder shall
fail to advance the Required Tax Payments after request by the
Company, the Company may, in its discretion, deduct any Required
Tax Payments from any amount then or thereafter payable by the
Company to the holder.
(b) The holder may elect to satisfy his or her
obligation to advance the Required Tax Payments by any of the
following means: (1) a cash payment to the Company pursuant to
Section 2.4(a), (2) delivery to the Company of previously owned
whole shares of Stock (which the holder has held (or the holder
and the Optionee have held) for at least six months prior to the
delivery of such shares of stock or which the holder purchased on
the open market and for which the holder has good title, free and
clear of all liens and encumbrances) the Fair Market Value of
which shall be
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determined as of the date the obligation to withhold or pay taxes
first arises in connection with the Option (the "Tax Date"), (3)
authorizing the Company to withhold whole shares of Stock which
would otherwise be delivered to the holder upon exercise of the
Option the Fair Market Value of which shall be determined as of
the Tax Date, (4) a cash payment by a broker-dealer acceptable to
the Company to whom the holder has submitted an irrevocable
notice of exercise or (5) any combination of (1), (2) and (3).
The Committee shall have sole discretion to disapprove of an
election pursuant to any of clauses (2)-(5), and if the Optionee
is subject to Section 16 of the Exchange Act, the Company may
require that the method of satisfying such obligation be in
compliance with section 16 of the Exchange Act and the rules and
regulations thereunder. Shares of Stock to be delivered or
withheld may not have a Fair Market Value in excess of the
minimum amount of the Required Tax Payments. Any fraction of a
Share of Stock which would be required to satisfy any such
obligation shall be disregarded and the remaining amount due
shall be paid in cash by the holder. No share of Stock shall be
delivered until the Required Tax Payments have been satisfied in
full.
2.5. Adjustment. In the event of any stock split,
stock dividend, recapitalization, reclassification,
reorganization, merger, consolidation, spin-off, combination of
shares in a reverse stock split or other similar event, the
holder of the Option shall be entitled to receive upon the
exercise of the Option, at a price determined by the Committee in
its sole discretion, such shares of Stock and other securities to
which the holder would be entitled had the holder exercised the
Option prior to the occurrence of such event. If any other event
shall occur which in the judgment of the Board would warrant an
adjustment to the number or designation of the class or classes
of securities subject to the Option or the purchase price of a
share of Stock subject to the Option, such adjustments shall be
authorized by the Board and made by the Committee upon such terms
and conditions as it may deem equitable and appropriate. To the
extent that any such event or action taken under this Section 2.5
shall entitle the holder of the Option to purchase additional
shares of Stock, the shares of
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Stock subject to the Option shall be deemed to include such
additional shares of Stock. If any such adjustment would result
in a fractional security being subject to the Option, the Company
shall pay the holder in connection with the first exercise of the
Option occurring after such adjustment, an amount in cash
determined by multiplying (i) the fraction of such security
(rounded to the nearest hundredth) by (ii) the excess, if any, of
(A) the Fair Market Value on the exercise date over (B) the
purchase price of a share of such security. Any determination
made by the Committee under this Section 2.5 shall be final,
binding and conclusive.
2.6. Change in Control. (a) Notwithstanding any
other provision of the Plan or any provision of any Award, in the
event of (i) a Change in Control or (ii) a "change in control"
within the meaning of the Telephone and Data Systems, Inc. 1994
Long-Term Incentive Plan at a time when TDS owns directly or
indirectly at least 50% of either the outstanding stock of the
Company or the combined voting power of such stock, all
outstanding options shall become immediately exercisable in full.
In the event of a Change in Control pursuant to Section (b)(3)
below, there may be substituted for each share of Stock available
under the Plan, whether or not then subject to an outstanding
option, the number and class of shares into which each
outstanding share of such Stock shall be converted pursuant to
such Change in Control. In the event of such a substitution, the
purchase price per share of stock then subject to an outstanding
option under the Plan shall be appropriately adjusted by the
Committee, but in no event shall the aggregate purchase price for
such shares be greater than the aggregate purchase price for the
shares of Stock subject to such option prior to the Change in
Control.
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(b) For purposes of the Plan, "Change in Control" shall
mean:
(1) the acquisition by any individual, entity or group
(a "Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act, of
beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 25% or more of the
combined voting power of the then outstanding securities of
the Company entitled to vote generally on matters (without
regard to the election of directors) (the "Outstanding
Voting Securities"), excluding, however, the following: (i)
any acquisition directly from the Company or an Affiliate
(excluding any acquisition resulting from the exercise of an
exercise, conversion or exchange privilege, unless the
security being so exercised, converted or exchanged was
acquired directly from the Company or an Affiliate), (ii)
any acquisition by the Company or an Affiliate, (iii) any
acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or an Affiliate, (iv)
any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of
subsection (3) of this Section 2.6(b), or (v) any
acquisition by the following persons: (A) LeRoy T. Carlson
or his spouse, (B) any child of LeRoy T. Carlson or the
spouse of any such child, (C) any grandchild of LeRoy T.
Carlson, including any child adopted by any child of LeRoy
T. Carlson, or the spouse of any such grandchild, (D) the
estate of any of the persons described in clauses (A)-(C),
(E) any trust or similar arrangement (including any
acquisition on behalf of such trust or similar arrangement
by the trustees or similar persons) provided that all of the
current beneficiaries of such trust or similar arrangement
are persons described in clauses (A)-(C) or their lineal
descendants, or (F) the voting trust which expires on June
30, 2009, or any successor to such voting trust, including
the trustees of such voting trust on behalf of such voting
trust, (all such persons, collectively, the "Exempted
Persons");
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(2) individuals who, as of November 9, 1994, constitute
the Board of Directors (the "Incumbent Board") cease for any
reason to constitute at least a majority of such Board; provided
that any individual who becomes a director of the Company
subsequent to November 9, 1994, whose election, or nomination for
election by the Company's stockholders, was approved by the vote
of at least a majority of the directors then comprising the
Incumbent Board shall be deemed a member of the Incumbent Board;
and provided further, that any individual who was initially
elected as a director of the Company as a result of an actual or
threatened election contest, as such terms are used in Rule 14a-
11 of Regulation 14A promulgated under the Exchange Act, or any
other actual or threatened solicitation of proxies or consents by
or on behalf of any Person other than the Board shall not be
deemed a member of the Incumbent Board;
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a "Corporate Transaction"), excluding, however, a
Corporate Transaction pursuant to which (i) all or
substantially all of the individuals or entities who are the
beneficial owners of the Outstanding Voting Securities
immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 51% of
the combined voting power of the outstanding securities of
the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a
result of such transaction owns, either directly or
indirectly, the Company or all or substantially all of the
Company's assets) which are entitled to vote generally on
matters (without regard to the election of directors), in
substantially the same proportions relative to each other as
the shares of Outstanding Voting Securities are owned
immediately prior to such Corporate Transaction, (ii) no
Person (other than the following Persons: (v) the Company
or an Affiliate, (w) any employee benefit plan (or
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related trust) sponsored or maintained by the Company or an
Affiliate, (x) the corporation resulting from such Corporate
Transaction, (y) the Exempted Persons, (z) and any Person which
beneficially owned, immediately prior to such Corporate
Transaction, directly or indirectly, 25% or more of the
Outstanding Voting Securities) will beneficially own, directly or
indirectly, 25% or more of the combined voting power of the
outstanding securities of such corporation entitled to vote
generally on matters (without regard to the election of
directors) and (iii) individuals who were members of the
Incumbent Board will constitute at least a majority of the
members of the board of directors of the corporation resulting
from such Corporate Transaction; or
(4) approval by the stockholders of the Company of a
plan of complete liquidation or dissolution of the Company.
2.7. Compliance with Applicable Law. The Option is
subject to the condition that if the listing, registration or
qualification of the shares of Stock subject to the Option upon
any securities exchange or under any law, or the consent or
approval of any governmental body, or the taking of any other
action is necessary or desirable as a condition of, or in
connection with, the purchase or delivery of shares hereunder,
the Option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained, free of any conditions not
acceptable to the Company. The Company agrees to use reasonable
efforts to effect or obtain any such listing, registration,
qualification, consent or approval.
2.8. Delivery of Certificates. Upon the exercise of
the Option, in whole or in part, the Company shall deliver or
cause to be delivered one or more certificates representing the
number of shares of Stock purchased against full payment
therefor. The Company shall pay all
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original issue or transfer taxes and all fees and expenses
incident to such delivery, except as otherwise provided in
Section 2.4.
2.9. Option Confers No Rights as Stockholder. The
holder of the Option shall not be entitled to any privileges of
ownership with respect to shares of Stock subject to the Option
unless and until such shares are purchased and delivered upon an
exercise of the Option and the Optionee becomes a stockholder of
record with respect to such delivered shares. The holder shall
not be considered a stockholder of the Company with respect to
any shares not so purchased and delivered.
2.10. Company to Reserve Shares. The Company
shall at all times prior to the expiration or termination of the
Option reserve and keep available, either in its treasury or out
of its authorized but unissued shares of Stock, the full number
of shares subject to the Option from time to time.
3. Miscellaneous Provisions.
3.1. Option Confers No Rights to Continued Employment.
In no event shall the granting of the Option or the acceptance of
this Award and the Option by the Optionee give or be deemed to
give the Optionee any right to continued employment by the
Company or any subsidiary or affiliate.
3.2. Decisions of Committee. The Committee shall
have the right to resolve all questions which may arise in
connection with the Option or its exercise. Any interpretation,
determination or other action made or taken by the Committee
regarding the Plan or this Award shall be final, binding and
conclusive.
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3.3. Award Subject to the Plan. This Award is
subject to the provisions of the Plan, and shall be interpreted
in accordance therewith. The Optionee hereby acknowledges
receipt of a copy of the Plan.
3.4. Successors. The Award shall be binding upon and
inure to the benefit of any successor or successors of the
Company and any person or persons who shall, upon the death of
the Optionee, acquire any rights hereunder in accordance with
this Award or the Plan.
3.5. Notices. All notices, requests or other
communications provided for in the Award shall be made in writing
either (a) by actual delivery to the party entitled thereto, (b)
by mailing in the United States mails to the last known address
of the party entitled thereto, via certified or registered mail,
postage prepaid and return receipt requested, or (c) by telecopy
with confirmation of receipt. The notice shall be deemed to be
received in case of delivery, on the date of its actual receipt
by the party entitled thereto, in case of mailing by certified or
registered mail, five days following the date of such mailing,
and in the case of telecopy, on the date of confirmation of
receipt.
3.6. Governing Law. The Option, this Award, and all
determinations made and actions taken pursuant hereto and
thereto, to the extent not governed by the laws of the United
States, shall be governed by the laws of the State of Delaware
and construed in accordance therewith without regard to
principles of conflicts of laws.
3.7. Counterparts. This Award may be executed in
counterparts each of which shall be deemed an original and both
of which together shall constitute one and the same instrument.
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United States Cellular Corporation
By:________________________________
H. Donald Nelson
Chief Executive Officer
Accepted this ____ day of
_________________, 1995.
____________________________
Name:
UNITED STATES CELLULAR CORPORATION
1994 LONG-TERM INCENTIVE PLAN
1995 PERFORMANCE STOCK OPTION AWARD
BENEFICIARY DESIGNATION FORM
----------------------------
You may designate a primary beneficiary and a secondary
beneficiary. You can name more than one person as a primary or
secondary beneficiary. For example, you may wish to name your
spouse as primary beneficiary and your children as secondary
beneficiaries. Your secondary beneficiary(ies) will receive
nothing if any of your primary beneficiaries survive you. All
primary beneficiaries will share equally unless you indicate
otherwise. The same rule applies for secondary beneficiaries.
Designate Your Beneficiary(ies):
Primary Beneficiary(ies) (give name, address and
relationship to you):
___________________________________________________
___________________________________________________
___________________________________________________
Secondary Beneficiary(ies) (give name, address and
relationship to you): _____________________________
___________________________________________________
___________________________________________________
I certify that my designation of beneficiary set forth
above is my free act and deed.
______________________________ ______________________________
Name Signature
(please print)
______________________________
Date
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