EXHIBIT 99.1
UNITED STATES CELLULAR CORPORATION
KEY MANAGEMENT RESTRICTED STOCK PLAN
ARTICLE I
PURPOSES
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The purposes of the Key Management Restricted Stock Plan (the
"Plan") of United States Cellular Corporation, a Delaware corporation (the
"Company"), are to align the interests of the Company's stockholders and certain
management employees who are critical to the Company's long-term success by
increasing the proprietary interest of such employees in the Company's growth
and success and to advance the interests of the Company by attracting and
retaining other qualified individuals with similar skills.
ARTICLE II
DEFINITIONS
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For purposes of the Plan, the following capitalized terms
shall have the meanings set forth in this Article.
2.1 "Affiliate" shall mean TDS 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 TDS or by the Company.
2.2 "Agreement" shall mean a written agreement evidencing an award
hereunder between the Company and a recipient of an award.
2.3 "Board" shall mean the Board of Directors of the Company.
2.4 "Common Stock" shall mean the class of shares of the Company
designated as "Common Shares" in the Articles of Incorporation of the Company.
2.5 "Disability" shall mean a total physical disability which, in the
Committee's judgment, prevents an Eligible Employee from performing
substantially such Eligible Employee's employment duties and responsibilities
for a continuous period of at least six months.
2.6 "Eligible Employee" shall mean an individual who is an employee of
the Company or any Affiliate on the date a Restricted Stock Award is to be
granted and who was a Management Employee for at least one full month during the
Performance Year with respect to which the Restricted Stock Award is to be
granted.
2.7 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.8 "Fair Market Value" of a share of Stock subject to a Restricted
Stock Award shall mean the closing sale price of the share of Stock on the
principal national stock exchange on which the Stock is traded on July 1 (or the
first trading day thereafter if July 1 is not a trading day) of the year
following the Performance Year with respect to which the Restricted Stock Award
is granted; provided, however, that the Fair Market Value of a share of Stock
granted with respect to the 1995 Performance Year shall be determined on June 7,
1996.
2.9 "Management Employee" shall mean an employee of the Company who is
an Area General Manager, Market General Manager, Market Manager, Sales Manager,
Retail Sales Manager or Agent Manager.
2.10 "Performance Year" shall mean 1995, 1996 or 1997, as the context
requires.
2.11 "Restricted Stock" shall mean shares of Stock that are subject to
a Restriction Period.
2.12 "Restricted Stock Award" shall mean an award of Restricted Stock
under the Plan.
2.13 "Restriction Period" shall mean the period designated by the
Committee during which the Restricted Stock subject to a Restricted Stock Award
may not be sold, transferred, assigned, pledged, hypothecated or otherwise
encumbered or disposed of, except as provided in the Plan or the Agreement
relating to such Restricted Stock Award.
2.14 "Stock" shall mean Common Stock and any other equity security
which (i) is designated by the Board to be available for awards under the Plan
or (ii) becomes available for awards under the Plan by reason of a conversion,
stock split, stock dividend, recapitalization, reclassification, reorganization,
merger, consolidation, combination, exchange of shares, spin-off or other
similar change in capitalization or event or any distribution to holders of
shares of Common Stock.
2.15 "Tax Date" shall have the meaning set forth in Section 5.6.
2.16 "TDS" shall mean Telephone and Data Systems, Inc., an Iowa
corporation.
ARTICLE III
ADMINISTRATION
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The Plan shall be administered by the President of Telephone
and Data Systems, Inc. (the "Committee"). Subject to the terms of the Plan and
the Schedule attached hereto, the Committee shall determine the number of shares
of Restricted Stock subject to each Restricted Stock Award. The Committee shall
interpret the Plan and establish rules and regulations for the administration of
the Plan and may impose, incidental to the grant of a Restricted Stock Award,
conditions with respect to the award, including conditions with respect to
competitive employment or other activities. All determinations, interpretations,
rules and regulations made by the Committee shall be conclusive and binding on
all parties.
The Committee may delegate some or all of its power and
authority hereunder to other officers of the Company as the Committee deems
appropriate.
No member of the Board or the Committee, and no officer to
whom the Committee delegates any of its power and authority hereunder, shall be
liable for any act, omission, interpretation, construction or determination made
in connection with the Plan in good faith, and the members of the Board and the
Committee and such other officers shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including attorneys' fees) arising therefrom to the full extent permitted by
law and under any directors' or officers' liability insurance that may be in
effect from time to time.
ARTICLE IV
RESTRICTED STOCK AWARDS
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4.1 Selection of Eligible Employees for Awards and Number of
Shares Subject to Awards. (a) In General. As soon as practicable after the end
of each Performance Year, the Committee, with the assistance and recommendation
of the Senior Vice President of Operations and the Vice President of Human
Resources of the Company, shall assess the performance of the Eligible Employees
for such Performance Year and may grant a Restricted Stock Award to each such
Eligible Employee whose performance for such Performance Year was assessed by
the Committee as "MR," "ER" or "FE," as described in the Schedule attached
hereto; provided, however, that no more than 80% of the Eligible Employees may
be granted a Restricted Stock Award for any Performance Year. In the event that
the performances of over 80% of the Eligible Employees are assessed as MR, ER or
FE, the Committee, in its sole discretion, shall determine which of such
Eligible Employees shall be granted a Restricted Stock Award. The Restricted
Stock Award granted to each such Eligible Employee shall be with respect to that
number of whole shares of Stock with
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an aggregate Fair Market Value equal to a certain percentage of the Eligible
Employee's base salary on January 1 of the year immediately succeeding the
Performance Year, with such percentage based upon such Eligible Employee's
assessed level of performance during the Performance Year. The Schedule attached
hereto sets forth the applicable percentage of base salary for each performance
level for each Performance Year. If the percentage of an Eligible Employee's
base salary upon which his or her Restricted Stock Award is based would result
in any fractional share being subject to a Restricted Stock Award, the
number of shares subject to the award shall be rounded to the next highest
number of shares.
(b) Proration of Awards. If an Eligible Employee was a
Management Employee during only a portion of a Performance Year, the number of
shares of Restricted Stock subject to his or her award for such Performance Year
shall be determined by multiplying the number of shares of Restricted Stock
which would have been subject to his or her award if the Eligible Employee had
been a Management Employee for all of the Performance Year by a fraction, the
numerator of which is the number of calendar months of such Performance Year in
which such Eligible Employee was a Management Employee and the denominator of
which is twelve.
4.2 Terms of Restricted Stock Awards. (a) In General.
Restricted Stock Awards shall be subject to the following terms and conditions
and shall contain such additional terms and conditions, not inconsistent with
the terms of the Plan, as the Committee shall deem advisable.
(b) Share Certificates. During the Restriction Period, a
certificate representing a Restricted Stock Award shall be registered in the
name of the Eligible Employee who was granted the award and shall bear a legend,
in addition to any legend which may be required pursuant to Section 5.7,
indicating that the ownership of the shares of Stock represented by such
certificate is subject to the restrictions, terms and conditions of the Plan and
the Agreement relating to the Restricted Stock Award. All such certificates
shall be deposited with the Company, together with stock powers or other
instruments of assignment, each endorsed in blank, which would permit transfer
to the Company of the shares of Stock subject to the Restricted Stock Award in
the event such award is forfeited. Subject to the Company's right to require
payment of any taxes in accordance with Section 5.6, the certificate evidencing
ownership of the requisite number of shares of Stock shall be delivered to the
Eligible Employee upon termination of the Restriction Period.
(c) Rights with Respect to Restricted Stock Awards. Unless
otherwise set forth in this Plan or determined by the Committee at the time a
Restricted Stock Award is granted, and subject to the terms and conditions of a
Restricted Stock Award, the holder of such an award shall have all rights as a
stockholder of the Company, including, but not limited to, voting rights, the
right to receive dividends and the right to participate in any capital
adjustment of the Company; provided, however, that any dividend or other
distribution with respect to shares of Common Stock subject to a Restriction
Period shall be deposited with the Company and shall be subject to the same
restrictions as the shares of Stock with respect to which such dividend or other
distribution was made, unless the Restricted Stock Award provides otherwise.
(d) Termination of Restriction Period. Except as otherwise
provided in this Section 4.2, the termination of the Restriction Period with
respect to a Restricted Stock Award shall occur on the earliest of: (i) July 1,
1998 for those Restricted Stock Awards granted in 1996 and July 1, 1999 for
those Restricted Stock Awards granted in 1997 and 1998, and (ii) the date the
Eligible Employee who was granted such award terminates employment with the
Company or an Affiliate.
(e) Cancellation of Award Upon Certain Terminations of
Employment. Notwithstanding Section 4.2(d), if an Eligible Employee's employment
terminates for reasons other than Disability, retirement on or after age 65 or
death, the Restricted Stock Award shall be forfeited and canceled by the
Company.
(f) Forfeiture of Award Upon Competition with Company or Any
Affiliate or Misappropriation of Confidential Information. Notwithstanding any
other provision in the Plan, any Restricted Stock subject to a Restricted Stock
Award and granted to an Eligible Employee hereunder shall be immediately
forfeited on or after any date on which such Eligible Employee (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
Committee in its sole discretion.
For purposes of the preceding sentence, an Eligible Employee
shall be treated as entering into competition with the Company or an Affiliate
if such Eligible 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 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
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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.
An Eligible Employee shall be treated as misappropriating
confidential information of the Company or an Affiliate if such Eligible
Employee (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 information then in the Eligible
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.
(g) Change in Control. Notwithstanding any other provision in
the Plan, the Restriction Period shall terminate immediately upon either (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 Section 4.2(g), 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 (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 4.2(g), 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 June 7, 1996, constitute the Board
(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 June 7, 1996, and 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
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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 an
Affiliate, (x) the corporation resulting from such Corporate
Transaction, (y) the Exempted Persons, and (z) 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.
ARTICLE V
GENERAL PROVISIONS
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5.1 Effective Date and Term of Plan. The Plan shall be
effective as of June 7, 1996. The Plan shall terminate in 1998 after the
Restricted Stock Awards for the 1997 Performance Year have been determined and
granted, unless the Plan is terminated earlier by the Board. Termination of the
Plan shall not affect the terms or conditions of any Restricted Stock Award
granted prior to the Plan's termination.
5.2 Shares Available. Subject to adjustment as provided in
Section 5.8 of the Plan, 25,000 shares of Common Stock initially shall be
available under the Plan, and at any other time the number of shares available
under the Plan shall be such number, reduced by the sum of the aggregate number
of shares of Common Stock which are issued pursuant to outstanding Restricted
Stock Awards. To the extent that a Restricted Stock Award is forfeited, the
shares of Stock subject to such forfeited award shall again be available under
the Plan. Shares of Stock to be delivered under the Plan shall be made available
from authorized and unissued shares of Stock, or authorized and issued shares of
Stock reacquired and held as treasury shares or otherwise or a combination
thereof.
5.3 Amendments. The Board may amend the Plan as it shall deem
advisable. No amendment may impair the rights of a holder of an outstanding
Restricted Stock Award without the consent of such holder.
5.4 Agreement. Each award under the Plan shall be evidenced by
an Agreement setting forth the terms and conditions applicable to such award. No
award shall be valid until an Agreement is executed by the Company and the
recipient of such award. Upon execution by each party and delivery of the
Agreement to the Company, such award shall be effective as of the effective date
set forth in the Agreement.
5.5 Non-Transferability. No share of Restricted Stock subject
to a Restricted Stock Award may 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. Upon
any attempt by an Eligible Employee granted a Restricted Stock Award to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any
share of Restricted Stock, the Restricted Stock Award and all rights thereunder
shall immediately become null and void.
5.6 Tax Withholding. The Company shall have the right to
require, prior to the issuance or delivery of any shares of Stock or the payment
of any cash pursuant to a Restricted Stock Award made hereunder, payment by the
holder of such award of any federal, state, local or other taxes which may be
required to be withheld or paid in connection with such award ("Required Tax
Payments"). As determined by the Committee at the time an award is granted, an
Agreement may provide that (i) the Company shall withhold whole shares of Stock
which would otherwise be delivered to a holder, having
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an aggregate fair market value determined as of the date the obligation to
withhold or pay taxes arises in connection with an award (the "Tax Date") equal
to the Required Tax Payments, or shall withhold an amount of cash which would
otherwise be payable to a holder, in the amount necessary to make the Required
Tax Payments, or (ii) the holder may satisfy his or her obligation to pay an
amount equal to the Required Tax Payments in any of the following forms: (A) a
cash payment to the Company, (B) delivery to the Company of previously owned
whole shares of Stock for which the holder has good title, free and clear of all
liens and encumbrances, (C) authorization to the Company to withhold whole
shares of Stock which would otherwise be delivered or to withhold an amount of
cash which would otherwise be payable to a holder, provided that the fair market
value of shares of Stock withheld or the amount of cash withheld is equal to the
Required Tax Payments, (D) a cash payment by a broker-dealer acceptable to the
Company through whom the Eligible Employee has sold the shares of Stock with
respect to which the Required Tax Payments have arisen, or (E) any combination
of (A), (B) and (C); further provided, however, that the Company shall have sole
discretion to disapprove of an election pursuant to any of clauses (B)(E). An
Agreement may provide for shares of Stock to be delivered or withheld having an
aggregate fair market value in excess of the minimum amount required to be
withheld. Any fraction of a share of Stock which would be required to satisfy
such an obligation shall be disregarded and the remaining amount due shall be
paid in cash by the holder.
5.7 Restrictions on Shares. Each Restricted Stock Award made
hereunder shall be subject to the requirement that if at any time the Company
determines that the listing, registration or qualification of the shares of
Stock subject to such award upon any securities exchange or under any law, 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 delivery
of shares thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Stock delivered
pursuant to any Restricted Stock Award made hereunder bear a legend indicating
that the sale, transfer or other disposition thereof by the holder is prohibited
except in compliance with the Securities Act of 1933, as amended, and the rules
and regulations thereunder.
5.8 Adjustment. In the event of any conversion, 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 securities available under the Plan, and
the number and class of securities subject to each outstanding Restricted Stock
Award, shall be appropriately adjusted by the Committee. If any other event
shall occur which in the judgment of the Board would warrant an adjustment to
the number and class of securities available under the Plan, or the number and
class of securities subject to each outstanding Restricted Stock Award, then
such adjustment shall be authorized by the Board and made by the Committee upon
such terms and conditions as the Committee may deem equitable and appropriate.
To the extent that any adjustment under this Section 5.8 entitles an Eligible
Employee to receive any additional shares of Stock or other securities, the
shares of Stock available under the Plan shall be deemed to include such
additional shares of Stock or other securities. If any such adjustment would
result in a fractional security being available under the Plan, such fractional
security shall be disregarded. If any such adjustment would result in a
fractional security being subject to an outstanding Restricted Stock Award, the
Company shall pay the holder of such award, in connection with the vesting of
such award, 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 vesting date over (B) the purchase price, if any,
of such security. Any determination made by the Committee under this Section 5.8
shall be final, binding and conclusive on all holders of Restricted Stock Awards
granted under the Plan.
5.9 No Right of Participation or Employment. No person shall
have any right to participate in the Plan. Neither the Plan nor any award made
hereunder shall confer upon any person any right to continued employment by the
Company or any Affiliate or affect in any manner the right of the Company or any
Affiliate to terminate the employment of any person at any time without
liability hereunder.
5.10 Rights as Stockholder. No person shall have any right as
a stockholder of the Company with respect to any shares of Common Stock or other
equity security of the Company which is subject to an award hereunder unless and
until such person becomes a stockholder of record with respect to such shares of
Common Stock or equity security.
5.11 Governing Law. The Plan, each award hereunder and the
related Agreement, and all determinations made and actions taken pursuant
thereto, to the extent not otherwise governed by the Code or the laws of the
United States,
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shall be governed by the laws of the State of Delaware and construed in
accordance therewith without giving effect to principles of conflicts of laws.
5.12 Severability. If a provision of the Plan shall be held
illegal or invalid, the illegality shall not affect the remaining parts of the
Plan and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included in the Plan.
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SCHEDULE
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Performance Levels and Salary Percentages
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Performance
Year FM PM MR ER FE
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1995 0% 0% 15%-22% 22.5%-29% 30%
1996 0% 0% 15%-22% 22.5%-29% 30%
1997 0% 0% 15%-22% 22.5%-29% 30%
- - --------------------------------------------------------------------------------
3 Year Total 0% 0% 45%-66% 67.5%-87% 90%
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Description of Performance Levels
- - ---------------------------------
FE Far exceeds job requirements. Superior results on a sustained basis.
- - -- Rarely equaled.
ER Exceeds job requirements on a consistent basis. Makes contributions
- - -- beyond job demands.
MR Meets job requirements in a fully satisfactory manner.
- - --
PM Partially meets job requirements and needs to improve. Action plan
- - -- should be established for improvement.
FM Fails to meet job requirements. Problem areas must be monitored and
- - -- documented.