EXHIBIT 99.1
UNITED STATES CELLULAR CORPORATION
STOCK BONUS AND RESTRICTED STOCK AWARD AGREEMENT
United States Cellular Corporation, a Delaware corporation
(the "Company"), hereby grants to ______________ (the "Employee") as of
[_______], 1996 (the "Grant Date") (i) ________ shares of the class of shares
designated as "Common Shares" in the Company's Articles of Incorporation
("Common Stock") (the "Stock Bonus"), and (ii) a restricted stock award of
______ shares of the Company's Common Stock (the "Award"), upon and subject to
the restrictions, terms and conditions set forth below.
1. Stock Bonus and Award Subject to Acceptance of Agreement.
The Stock Bonus and the Award shall become null and void
unless the Employee (a) shall accept this Agreement by executing it in the space
provided below and returning it to the Company's Vice President of Human
Resources and (b) shall execute one or more irrevocable stock powers to
facilitate the transfer to the Company (or its assignee or nominee) of all or a
portion of the shares subject to the Award, if shares are forfeited either
pursuant to Paragraph 4 hereof or if required under applicable laws or
regulations, and return such stock power or powers to the Company's Vice
President of Human Resources. As soon as practicable after the conditions set
forth in clauses (a) and (b) of the previous sentence are satisfied, the Company
shall cause to be issued in the Employee's name a stock certificate or
certificates
-1-
representing the total number of shares of Common Stock subject to the Stock
Bonus and a stock certificate or certificates representing the total number of
shares of Common Stock subject to the Award.
2. Custody and Delivery of Shares.
The Company shall deliver, subject to Paragraph 5.3, the
certificate or certificates representing the shares of Common Stock granted
under the Stock Bonus as soon as administratively practicable after this
Agreement has been executed and returned to the Company in accordance with
Paragraph 1. The Company shall hold the certificate or certificates representing
the shares of Common Stock subject to the Award (the "Award Shares") until the
restrictions on such shares have terminated and the Company shall thereupon,
subject to Paragraph 5.3, deliver the certificate or certificates for such
shares to the Employee. The Company shall pay all original issue or transfer
taxes and all fees and expenses incident to such delivery, except as otherwise
provided in Paragraph 5.3.
3. Rights as a Stockholder.
The Employee shall have the right to vote the Award Shares
(and Common Stock distributions thereon), unless and until such shares are
forfeited pursuant to Paragraph 4 hereof or if required under applicable laws or
regulations. Any dividends or other distributions (including, without
limitation, a cash dividend, a stock dividend or stock split) with respect to
Award Shares shall be delivered to the Company and shall be subject to the same
restrictions as the Award Shares. If any dividend or other distribution is in
the form of Common Stock, the Employee shall execute one or more irrevocable
stock powers similar to the stock powers executed with respect to the Award
Shares and return such stock power and powers to the Company's Vice President of
Human Resources. Such dividends and other distributions made with respect to
Award Shares shall be accumulated in a separate account for the Employee. As
soon
-2-
as practicable after any Award Shares are no longer subject to forfeiture, (i)
any cash dividends held in such separate account in respect of such shares shall
be paid to the Employee in cash without interest and (ii) any other
distributions made in respect of such shares shall be delivered to the Employee
in kind without interest.
4. Restriction Period and Forfeiture. (a) In General. Except
as otherwise provided in this Paragraph 4, the restrictions on 50% of the Award
Shares shall terminate when the Company achieves the 1.5 million customer level
and the restrictions on the other 50% of the Award Shares shall terminate when
the Company achieves the 2.0 million customer level, provided that with respect
to each such 50% the Employee is employed by the Company or any other
corporation which owns directly or indirectly at least 50% of the outstanding
stock of the Company (or the combined voting power of such outstanding stock) or
a corporation at least 50% of whose outstanding stock or the combined voting
power of such outstanding stock is owned directly or indirectly by the Company
(an "Affiliate") on the date the relevant customer level is achieved. For
purposes of the Award, only customers in markets managed by the Company shall be
included in determining the Company's customer level.
(b) Retirement, Disability or Death. If the Employee's
employment by the Company or an Affiliate terminates by reason of (i) retirement
on or after age 65, (ii) a total physical disability which, in the judgment of
the Chairman, prevents the Employee from performing such Employee's employment
duties for a continuous period of at least six months ("Disability") or (iii)
death prior to termination of restrictions on all the Award Shares in accordance
with subsection (a) above, the restrictions shall terminate upon the Employee's
termination of employment.
-3-
(c) Other Termination of Employment. If the Employee's
employment by the Company or an Affiliate terminates for any reason other than
retirement on or after age 65, Disability or death prior to termination of
restrictions on all the Award Shares in accordance with subsection (a) above,
the Award Shares subject to the restrictions on the date of the Employee's
termination of employment shall be forfeited and shall be canceled by the
Company. In the event that the Employee shall forfeit any Award Shares, the
Employee shall, within 10 days of the date of the Company's written request,
return this Agreement to the Company for cancellation. Notwithstanding the prior
sentence, such shares nonetheless shall be forfeited and canceled by the
Company.
(d) Competition or Misappropriation of Confidential
Information. If prior to the delivery of the certificates representing the
shares subject to the Stock Bonus or any Award Shares in accordance with
Paragraph 2 above, the Employee either (i) enters into competition with the
Company or an Affiliate or (ii) misappropriates confidential information of the
Company or an Affiliate, as determined by the Chairman in his sole discretion,
then all rights with respect to the Common Shares evidenced by such certificate
or certificates shall be immediately forfeited and shall be canceled by the
Company. For purposes of the preceding sentence, the Employee shall be treated
as entering into competition with the Company or an Affiliate if the Employee
(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 (A) 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 Employee shall be
treated as misappropriating confidential information of the Company or an
Affiliate if the Employee (i) uses confidential information (as described below)
for the
-4-
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 information then in the Employee'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.
(e) Change in Control. Any restrictions on Award Shares shall
immediately terminate upon the occurrence of (i) a "Change in Control," as
defined below, 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.
For purposes of this Paragraph 4(e), a 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
-5-
(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
Paragraph 4(e), 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");
(2) individuals who, as of the date hereof, constitute the
Board of Directors of the Company (the "Incumbent Board") cease for any
reason to constitute at least a majority of such Incumbent Board;
provided that any individual who becomes a director of the Company
after such date, 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,
-6-
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 related trust) sponsored
or maintained by the Company or 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
-7-
(4) approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of the Company.
5. Additional Terms and Conditions of Stock Bonus and Award.
5.1. Nontransferability of Award. During the restriction
period described in Section 4(a), the shares of Common Stock subject to such
restrictions may not be transferred by the Employee other than by will, the laws
of descent and distribution or to the Employee's beneficiary or beneficiaries as
designated on the form attached hereto. Except as permitted by the foregoing,
during the restriction period described in Section 4(a), the shares of Common
Stock subject to such restrictions may not be sold, transferred, assigned,
pledged, hypothecated, encumbered or otherwise disposed of (whether by operation
of law or otherwise) or be subject to execution, attachment or similar process.
Any such attempted sale, transfer, assignment, pledge, hypothecation or
encumbrance, or other disposition of such shares shall be null and void.
5.2. Investment Representation. The Employee hereby represents
and covenants that (a) any share of Common Stock acquired as part of the Stock
Bonus or upon the vesting of the Award will be acquired for investment and not
with a view to the distribution thereof within the meaning of the Securities Act
of 1933, as amended (the "Securities Act"), unless such acquisition has been
registered under the Securities Act and any applicable state securities law; (b)
any subsequent sale of any such shares shall be made either pursuant to an
effective registration statement under the Securities Act and any applicable
state securities laws, or pursuant to an exemption from registration under the
Securities Act and such state securities laws; and (c) if requested by the
Company, the Employee shall submit a written statement, in form satisfactory to
the Company, to the effect that such representation (x) is true and correct as
of the date
-8-
of acquisition of any shares hereunder or (y) is true and correct as of the date
of any sale of any such shares, as applicable. As a further condition precedent
to the delivery to the Employee of any shares granted pursuant to the Stock
Bonus or the Award, the Employee shall comply with all regulations and
requirements of any regulatory authority having control of or supervision over
the issuance of the shares and, in connection therewith, shall execute any
documents which the Board of Directors of the Company or any committee
authorized by the Board of Directors of the Company shall in its sole discretion
deem necessary or advisable.
5.3. Tax Withholding. (a) As a condition precedent to any
delivery to the Employee of any shares of Common Stock granted pursuant to
either the Stock Bonus or the Award, the Employee shall, upon request by the
Company, pay to the Company 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 shares. If the Employee 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 Employee.
(b) The Employee 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 Paragraph 5.3(a), (2) delivery to the Company
of previously owned whole shares of Common Stock (for which the Employee has
good title, free and clear of all liens and encumbrances) having a fair market
value determined as of the date the obligation to withhold or pay taxes first
arises in connection with the Stock Bonus or the Award (the "Tax Date") which is
equal to the Required Tax Payments, (3) authorizing the Company to withhold from
the shares of Common Stock which would otherwise be delivered to the
-9-
Employee pursuant to the Stock Bonus or the Award a number of whole shares of
Common Stock having a fair market value determined as of the Tax Date which is
equal to the Required Tax Payments, (4) a cash payment by a broker-dealer
acceptable to the Company through whom the Employee has sold the shares with
respect to which the Required Tax Payments have arisen or (5) any combination of
(1), (2) and (3). The Company shall have sole discretion to disapprove of an
election pursuant to any of clauses (2)-(5). Whole shares of Common Stock to be
so delivered or withheld may not have an aggregate fair market value in excess
of the minimum amount of the Required Tax Payments. Any fraction of a share of
Common Stock which would be required to pay the Required Tax Payments in full
shall be disregarded and the remaining amount due shall be paid in cash by the
Employee.
5.4. 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 number and class of shares of Common Stock subject to any
restrictions at the time of such event shall be appropriately adjusted by the
Company. The decision of the Company regarding the amount and timing of any
adjustment pursuant to this Paragraph 5.4 shall be final, binding and
conclusive.
5.5. Compliance with Applicable Law. The Stock Bonus and the
Award are subject to the condition that if the listing, registration or
qualification of the shares of Common Stock subject to the Stock Bonus or the
Award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or, in the case of any Award Shares, the taking of any
other action is necessary or desirable as a condition of, or in connection with,
the termination of the restrictions on such shares or delivery of such shares
may not be delivered, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained, free of
any conditions not
-10-
acceptable to the Company. The Company agrees to make every reasonable effort to
effect or obtain any such listing, registration, qualification, consent or
approval.
5.6. Stock Bonus and Award Confer No Rights to Continued
Employment. In no event shall the granting of the Stock Bonus or the Award or
their acceptance by the Employee give or be deemed to give the Employee any
right to continued employment by the Company or by any Affiliate.
5.7. Decisions of Chairman. The Chairman shall have the right
to resolve all questions which may arise in connection with this Agreement. Any
interpretation, determination or other action made or taken by the Chairman
regarding this Agreement shall be final, binding and conclusive.
6. Miscellaneous Provisions.
6.1. Successors. This Agreement 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 Employee, acquire any rights
hereunder.
6.2. Notices. All notices, requests or other communications
provided for in this Agreement shall be made in writing either (a) by actual
delivery to the party entitled thereto, or (b) by mailing through the United
States postal service to the last known address of the party entitled thereto,
via certified or registered mail, postage prepaid and return receipt requested
or 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, and 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.
-11-
6.3. Governing Law. This Agreement and all determinations made
and actions taken pursuant thereto, to the extent not governed by the laws of
the United States, shall be governed by, and interpreted in accordance with, the
internal laws of the State of Delaware, without regard to conflicts of laws
principles.
6.4. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and both of which
together shall constitute one and the same instrument.
UNITED STATES CELLULAR CORPORATION
By:_______________________________
H. Donald Nelson
Chief Executive Officer
Accepted this____ day of
_________________, 199_.
________________________
Employee
-12-
UNITED STATES CELLULAR CORPORATION
STOCK BONUS AND RESTRICTED STOCK AWARD AGREEMENT
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