EXHIBIT 99.1
INCORPORATED PORTIONS OF
ITEMS AS EXPECTED TO BE INCLUDED IN THE
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT OF
TELEPHONE AND DATA SYSTEMS, INC.
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes. Each
year, one class is elected to serve for three years. At the Annual Meeting of
Shareholders in 1994, three Class I directors will be elected for a term of
three years or until their successors are elected and qualified. The nominees
for election as Class I directors are identified in the tables below. The
Company has no knowledge that any of the nominees will refuse or be unable to
serve, but if any of the nominees becomes unavailable for election, the holders
of the proxies reserve the right to substitute another person of their choice as
nominee when voting at the Annual Meeting.
NOMINEES
CLASS I DIRECTORS-TERMS TO EXPIRE IN 1997
The following persons, if elected at the Annual Meeting of
Shareholders in 1994, will serve as Class I directors for three years or until
their successors are elected and qualified:
NOMINEE FOR ELECTION BY HOLDERS OF
COMMON SHARES AND HOLDERS OF PREFERRED SHARES
(SERIES A, B, D, G, H AND N)
Position with TDS Served as
Name Age and Principal Occupation Director since
---- --- ------------------------ --------------
Donald R. Brown 63 Director of the Company and 1979
Senior Vice President -
Southeast Region of TDS
Telecommunications Corporation
NOMINEES FOR ELECTION BY HOLDERS OF SERIES A
COMMON SHARES AND HOLDERS OF PREFERRED SHARES
(SERIES O, S, U, V, W, X, BB, DD, EE, GG, HH, II, JJ,
KK, LL, MM, NN, OO, PP, QQ AND RR)
Position with TDS Served as
Name Age and Principal Occupation Director since
---- --- ------------------------ --------------
Robert J. Collins 58 Director of the Company and 1974
Vice President - Northeast
Region of TDS Telecommunications
Corporation
Rudolph E. Hornacek 66 Vice President-Engineering and 1968
Director of the Company
Donald R. Brown was a Vice President of the Company between 1974 and
1990, and was the Wisconsin Region Manager between 1979 and 1992. Robert J.
Collins was a Vice President of the Company between 1971 and 1990, and between
1974 and 1990 was the Northeast Region Manager. In 1990, Messrs. Brown and
Collins resigned as Vice Presidents of the Company and were appointed as Vice
Presidents of TDS Telecommunications Corporation ("TDS Telecom"), a subsidiary
of the Company which operates local telephone companies. In 1992, Mr. Brown was
appointed Senior Vice President - Southeast Region.
Rudolph E. Hornacek has been Vice President-Engineering of the Company
for more than five years.
All of the nominees are current Class I directors. Mr. Brown was
elected by the holders of Common Shares and holders of Preferred Shares issued
before October 31, 1981. Messrs. Collins and Hornacek were elected by the
holders of Series A Common Shares and the holders of Preferred Shares issued
after October 31, 1981.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES.
OTHER DIRECTORS
CLASS II DIRECTORS-TERMS EXPIRE IN 1995
The following persons were elected at the Annual Meeting of
Shareholders on May 15, 1992, to serve as Class II directors for three years or
until their successors are elected and qualified:
Position with TDS Served as
Name Age and Principal Occupation Director since
---- --- ------------------------ --------------
James Barr III 54 Director of the Company and 1990
President of TDS Telecommunications
Corporation
LeRoy T. Carlson, Jr. 47 President and Director of the 1968
Company (chief executive officer)
Donald C. Nebergall 65 Director and Consultant to the Company 1977
and other companies
Murray L. Swanson 52 Executive Vice President-Finance and 1983
Director of the Company
(chief financial officer)
James Barr III was appointed President and chief executive officer of
TDS Telecom in 1990. Prior to that, Mr. Barr served as a Sales Vice President
for American Telephone and Telegraph Company from 1985 through 1989. Mr. Barr
is also a director of American Paging, Inc. (AMEX Symbol "APP"), a subsidiary of
the company which provides radio paging services.
LeRoy T. Carlson, Jr., has been the President and chief executive
officer for more than five years. Mr. Carlson is also Chairman and a director
of APP and United States Cellular Corporation (AMEX symbol "USM"), a subsidiary
of the Company which operates and invests in cellular telephone
-2-
companies and properties. Mr. Carlson is the son of LeRoy T. Carlson and the
brother of Walter C.D. Carlson.
Donald C. Nebergall served as the Vice President of The Chapman
Company, a registered investment advisory company located in Cedar Rapids, Iowa,
from 1986 to 1988. Prior to that, he was the Chairman of Brenton Bank & Trust
Company, Cedar Rapids, Iowa, from 1982 to 1986, and was its President from 1972
to 1982. He has been a consultant to the Company and other companies since
1988.
Murray L. Swanson has been Executive Vice President-Finance and chief
financial officer for more than five years. Mr. Swanson is also a director of
USM and APP.
Mr. Barr was elected by the holders of Common Shares and Preferred
Shares issued before October 31, 1981. Messrs. Carlson, Nebergall and Swanson
were elected by the holders of Series A Common Shares and Preferred Shares
issued after October 31, 1981.
CLASS III DIRECTORS-TERMS EXPIRE IN 1996
The following persons, were elected at the Annual Meeting of
Shareholders on May 14, 1993, to serve as Class III directors for three years or
until their successors are elected and qualified:
Position with TDS Served as
Name Age and Principal Occupation Director since
---- --- ------------------------ --------------
Lester O. Johnson 81 Director of the Company, 1968
Architect in private practice
LeRoy T. Carlson 77 Chairman and Director of the Company 1968
Walter C.D. Carlson 40 Director of the Company, 1981
Partner, Sidley & Austin,
Chicago, Illinois
Herbert S. Wander 59 Director of the Company, 1968
Partner, Katten, Muchin & Zavis,
Chicago, Illinois
All of the Class III Directors have had the principal occupations
indicated for more than five years. LeRoy T. Carlson is the father of Walter
C.D. Carlson and LeRoy T. Carlson, Jr. Messrs. LeRoy T. Carlson and Walter C.D.
Carlson are also directors of USM.
Mr. Johnson was elected by the holders of Common Shares and the
holders of Preferred Shares issued before October 31, 1981. Messrs. L. Carlson,
W. Carlson and Wander were elected by the holders of Series A Common Shares and
holders of Preferred Shares issued after October 31, 1981.
COMMITTEES AND MEETINGS
The Board of Directors of the Company held six meetings during 1993.
All of the directors attended at least 75% of the meetings of the Board of
Directors.
The Board of Directors does not have formal nominating or compensation
committees.
-3-
The Audit Committee of the Board of Directors, among other things,
determines audit policies, reviews external and internal audit reports and
reviews recommendations made by the Company's internal auditing staff and
independent public accountants. The members of the Audit Committee are: Donald
C. Nebergall (Chairman), Walter C.D. Carlson, Lester O. Johnson and Herbert S.
Wander. The committee met three times during 1993. All committee members
attended at least 75% of the meetings of the Audit Committee.
EXECUTIVE OFFICERS
In addition to the executive officers identified in the tables
regarding the election of directors, set forth below is a table identifying
current officers of the Company and its subsidiaries who may be deemed to be
executive officers of the Company for disclosure purposes under the rules of the
Securities and Exchange Commission.
Name Age Position
- ---- --- --------
H. Donald Nelson . . . . . . . . 60 President of United States Cellular
Corporation
John R. Schaaf . . . . . . . . . 48 President of American Paging, Inc.
George L. Dienes . . . . . . . . 63 Vice President - Corporate Development
C. Theodore Herbert. . . . . . . 58 Vice President - Human Resources
Ronald D. Webster. . . . . . . . 44 Vice President and Treasurer
Gregory J. Wilkinson . . . . . . 43 Vice President and Controller
Michael G. Hron. . . . . . . . . 49 Secretary
H. Donald Nelson is a director of and has served as the President and
chief executive officer of USM for more than five years.
John R. Schaaf was appointed President of APP in 1991. Prior to that,
Mr. Schaaf was Vice President-Operations of APP for more than five years.
George L. Dienes has been Vice President - Corporate Development for
more than five years.
C. Theodore Herbert has been Vice President - Human Resources of the
Company for more than five years.
Ronald D. Webster was appointed a Vice President of the Company in
1993. He has been the Treasurer of the Company for more than five years.
Gregory J. Wilkinson was appointed a Vice President of the Company in
1993. He has been the Controller of the Company for more than five years.
Michael G. Hron has been the Secretary of the Company for more than
five years. He has been a partner at the law firm of Sidley & Austin since
1989. Prior to that time he was a member of the law firm of Pope, Ballard,
Shepard & Fowle, Ltd. for more than five years.
All of TDS's executive officers devote substantially all of their time
to the Company or its subsidiaries, except for Michael G. Hron who is a
practicing attorney.
-4-
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid by TDS during
1993 to the chief executive officer of TDS and the four most highly compensated
executive officers of the Company and its subsidiaries.
SUMMARY COMPENSATION TABLE
Annual Compensation(1) Long Term Compensation Awards
------------------------ --------------------------------------------------------
Securities Underlying All Other
Name and Principal Position Year Salary(2) Bonus(3) Options/SARs(4) Compensation(5)
- --------------------------- ---- --------- -------- --------------- ---------------
LeRoy T. Carlson 1993 $265,000 $45,000 -- $23,875
Chairman 1992 $245,000 $60,000 -- $28,218
1991 $225,000 $50,000 -- N/A
LeRoy T. Carlson, Jr. 1993 $316,000 $56,250 -- $15,461
President 1992 $290,000 $75,000 -- $12,072
(chief executive officer) 1991 $265,000 $60,000 -- N/A
Murray L. Swanson 1993 $207,000 $42,750 -- $28,553
Executive Vice President-Finance 1992 $207,000 $45,600 -- $21,967
(chief financial officer) 1991 $191,000 $57,000 -- N/A
James Barr III (6) 1993 $227,500 $42,656 -- $24,704
President of TDS 1992 $202,500 $55,200 -- $17,804
Telecommunications Corporation 1991 $180,000 $49,500 -- N/A
H. Donald Nelson (7) 1993 $206,375 $35,360 600 $4,714
President of United States 1992 $191,375 $62,500 600 $3,072
Cellular Corporation 1991 $176,167 $58,000 7,624 N/A
<FN>
(1) Does not include the discount amount under any dividend reinvestment plan or any employee stock purchase plan since such plans
are generally available to all eligible shareholders or salaried employees, respectively. Does not include the value of any
perquisites, which are less than $50,000 and less than 10% of the aggregate of the salary and bonus for each named executive
officer.
(2) Represents the dollar value of base salary (cash and non-cash) earned by the named executive officer during the fiscal year
identified, except for Murray L. Swanson, whose 1993 annual salary has not yet been determined. When it is determined, it will
be retroactive to the beginning of 1993.
(3) Represents the dollar value of bonus (cash and non-cash) earned by the named executive officer for 1992 and 1991. The bonuses
for 1993 have not yet been determined. However, an advance payment was authorized to all named executive officers of up to 75%
of the actual bonus for 1992 (or the actual bonus for 1991 in the case of Murray L. Swanson, since his 1992 actual bonus had
not yet been finally determined). See "Executive Officer Compensation Report."
(4) Represents the number of TDS Common Shares subject to stock options ("Options") and/or stock appreciation rights ("SARs")
awarded during the fiscal year identified, except for H. Donald Nelson, in which case the amount represents the number of USM
shares subject to Options and/or SARs awarded during the fiscal year identified. Unless otherwise indicated by footnote, the
awards represent Options without tandem SARs.
(5) Pursuant to transition rules, only 1993 and 1992 amounts are reported in this column. Includes contributions by the Company
for the benefit of the named executive officer under the Employees' Pension Trust ("EPT"), including earnings accrued under a
related supplemental benefit agreement, the TDS Tax-Deferred Savings Plan ("TDSP"), the dollar value of any insurance premiums
paid during the covered fiscal year with respect to term life insurance for the benefit of the named executive ("Life
Insurance"), and all other compensation, as indicated below:
LeRoy T. Carlson LeRoy T. Carlson, Jr. Murray L. Swanson James Barr III H. Donald Nelson
EPT $ 8,071 $ 13,320 $ 24,535 $ 22,577 $ --
TDSP 532 977 899 600 1,542
Life Insurance 15,272 1,164 3,119 1,527 3,172
-------- --------- --------- ---------- --------
$ 23,875 $ 15,461 $ 28,553 $ 24,704 $ 4,714
-------- --------- --------- ---------- --------
-------- --------- --------- ---------- --------
-5-
(6) The Summary Compensation Table does not include the reimbursement of moving
expenses incurred by James Barr III, at the request of the Company, in the
amount of $30,290 in 1991.
(7) All of Mr. Nelson's compensation is paid by USM and is approved by the
Chairman of the Board of Directors of USM.
GENERAL INFORMATION REGARDING OPTIONS AND SARS
The following tables show, as to the executive officers who are named
in the Summary Compensation Table, information regarding Options and/or SARs.
The number of shares subject to the Options and/or SARs and the exercise prices
have been adjusted for stock splits in 1988.
INDIVIDUAL OPTION/SAR GRANTS IN 1993
Potential
Realizable Value at
Number of Assumed Annual Rates
Securities of Stock Price
Underlying % of Total Appreciation for
Options/ Options/SARs Option Term(5)
SARs Granted to Exercise Market Expiration ------------------------
Name Granted(1) Employees(2) Price(3) Price(4) Date 0% 5% 10%
---- ---------- ------------ -------- -------- ----------- ------- ------- -------
H. Donald Nelson...... 600 9.3% $15.67 $21.25 11/1/97 $ 3,350 $ 6,675 $10,650
- ------------
<FN>
(1) Represents number of USM shares underlying Options/SARs which were
awarded for H. Donald Nelson during the fiscal year. No Options or
SARs were awarded in 1993 to any of the other executive officers named
in the Summary Compensation Table. On February 1, 1991, H. Donald
Nelson received an award of Options for USM shares which could vary,
based on performance, between 80% and 120% of the targeted amount of
9,000 shares. Therefore, options for 7,200 shares or 80% of the
targeted amount were deemed to be awarded on the grant date. The
minimum amount scheduled to become exercisable is 1,200 USM shares in
each year on February 1, 1992 through February 1, 1997. Each year
during such period an additional number of USM shares, up to an
additional 600 shares, may be awarded based on performance for the
prior year. The amount over 1,200 shares per year which is awarded
based on performance is shown above as a grant in that year. Since
the maximum of options for 1,800 shares was awarded in 1993, 600
shares are shown as a grant in that year.
(2) Represents the percent of total USM shares underlying Options/SARS
awarded to all USM employees during the fiscal year.
(3) Represents the exercise price of the Options which is equal to the
average market price of Common Shares for the 20 consecutive trading
days ending on the grant date of February 1, 1991.
(4) Represents the fair market value of USM Common Shares on the award
date, based on the closing price on the American Stock Exchange.
(5) Represents the potential realizable value of each grant of Options,
assuming that the market price of USM Common Shares appreciates in
value from the award date to the end of the Option term at the
indicated annualized rates.
AGGREGATED OPTION/SAR EXERCISES IN 1993, AND DECEMBER 31, 1993 OPTION/SAR VALUE
1993 As of December 31, 1993
---------------------------- ------------------------------------------------------------
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-
UNEXERCISED OPTIONS/SARS (3) THE-MONEY OPTIONS/SARS(4)
SHARES ACQUIRED VALUE ------------------------------- ---------------------------
NAME ON EXERCISE(1) REALIZED(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ------------- ------------- ----------- -------------
LeRoy T. Carlson Options 13,500(5) $310,703 -0- -0- $-0- $-0-
LeRoy T. Carlson, Jr. Options 38,250(6) $1,337,730 25,500 63,750 $939,101 $2,347,753
Murray L. Swanson Options 3,375(7) $107,587 -0- 13,500 $-0- $582,221
James Barr III Options -- -- 6,000 14,000 $68,625 $160,125
H. Donald Nelson Options -- -- 3,424 5,400 $64,688 $102,020
SARs -- -- 12,000 24,000 234,750 469,500
------ ------ ----------- -----------
Total for H. Donald Nelson -- -- 15,424 29,400 $ 299,438 $ 571,520
------ ------ ----------- -----------
------ ------ ----------- -----------
<FN>
(1) Represents the number of TDS Common Shares received upon exercise or, if no
shares were received, the number of TDS Common Shares with respect to which
the Options or SARs were exercised, except for H. Donald Nelson, in which
case the information is presented with respect to USM shares.
-6-
(2) Represents the aggregate dollar value realized upon exercise, based on the
difference between the exercise price and the average of the high and low
price of the shares on the date of exercise as reported in the American
Stock Exchange ("AMEX") Composite Transactions by THE WALL STREET JOURNAL.
(3) Represents number of TDS Common Shares subject to Options and/or SARs,
except for H. Donald Nelson, in which case the information is presented
with respect to USM shares.
(4) Represents the aggregate dollar value of in-the-money, unexercised Options
and SARs held at the end of the fiscal year, based on the difference
between the exercise price and $51.4375, the average of the high and low
price of TDS Common Shares or, with respect to H. Donald Nelson, $34.5625,
the average of the high and low price of USM Common Shares, on December 31,
1993, as reported in the AMEX Composite Transactions by THE WALL STREET
JOURNAL.
(5) Options for a total of 13,500 Common Shares were exercised. A total of
5,387 Common Shares received upon exercise were used to pay the exercise
price and 2,801 Common Shares were used to pay withholding taxes.
(6) Options for a total of 38,250 Common Shares were exercised. A total of
11,727 Common Shares received upon exercise were used to pay the exercise
price and 9,040 Common Shares were used to pay withholding taxes.
(7) Options for a total of 3,375 Common Shares were exercised. A total of 724
Common Shares received upon exercise were used to pay the exercise price
and 651 Common Shares were used to pay withholding taxes.
SUPPLEMENTAL BENEFIT AGREEMENTS
The Telephone and Data Systems, Inc. Employees' Pension Trust
(the "Pension Plan") is a defined contribution plan designed to provide
retirement benefits for eligible employees of the Company and certain of
its affiliates which adopt the Pension Plan. Annual employer contributions
based upon actuarial assumptions are made under a formula designed to fund
a target pension benefit for each participant commencing generally upon the
participant's attainment of retirement age. The amounts of the annual
contributions are included above in the Summary Compensation Table under
"All Other Compensation."
In 1980, TDS entered into a nonqualified supplemental benefit
agreement with LeRoy T. Carlson which, as amended, requires TDS to pay a
supplemental retirement benefit to Mr. Carlson, in the amount of $47,567
plus interest at a rate equal to 1/4% under the prime rate for the period
from May 15, 1981 (the date of Mr. Carlson's 65th birthday) to May 31,
1991, in five annual installments beginning June 1, 2001, plus interest at
9 1/2% compounded semi-annually from June 1, 1991. The agreement was
entered into because certain amendments made to the Pension Plan in 1974
had the effect of reducing the amount of retirement benefits which
Mr. Carlson would receive under the Pension Plan. The payments to be made
under the agreement, together with the retirement benefits under the
Pension Plan, were designed to permit Mr. Carlson to receive approximately
the same retirement benefits he would have received if the Pension Plan had
not been amended. All of the interest accrued under this agreement is
included above in the Summary Compensation Table under "All Other
Compensation" and identified in footnote 5 thereto as contributions under
the Employees' Pension Trust (EPT).
In 1988, USM entered into a nonqualified supplemental benefit
agreement with H. Donald Nelson which requires USM to pay a supplemental
retirement benefit to Mr. Nelson. The agreement was entered into because
Mr. Nelson's employment with TDS was terminated upon the completion of the
initial public offering of USM Common Shares in May 1988 and, as a result,
he was no longer eligible to participate in the Pension Plan. Under the
supplemental benefit agreement, USM is obligated to pay Mr. Nelson an
amount equal to the difference between the retirement benefit he will
receive from the Pension Plan and that which he would have received had he
continued to work for TDS. USM will pay any such benefit at the same time
as Mr. Nelson receives payments from the Pension Plan. At the time of Mr.
Nelson's withdrawal from the TDS Pension Plan, he had 5 years of credited
service. If he had continued as an active participant, he would have
received credit for 16 years of service upon retirement at age 65. If Mr.
Nelson had continued to be employed by TDS, and had remained employed
through age 65, he would have been eligible to receive an estimated annual
benefit upon retirement of approximately $50,000 under the TDS Pension
Plan. Currently, Mr. Nelson's annual benefit under the TDS Pension Plan is
expected to be approximately $15,000. Accordingly, Mr. Nelson
-7-
is expected to receive an estimated annual benefit of approximately $35,000
under the supplemental benefit agreement. Such estimates are based on Mr.
Nelson's base salary, which is included in the cash compensation table
above, and calculations of certain projections to age 65. The actual
benefits payable to Mr. Nelson upon retirement will be based upon the facts
that exist at the time and will be determined actuarially pursuant to the
TDS Pension Plan. Since the nature of this agreement is a defined benefit
arrangement, no amounts related thereto are included above in the Summary
Compensation Table.
SALARY CONTINUATION AGREEMENT
The Company has entered into an agreement with LeRoy T. Carlson
whereby it will employ Mr. Carlson until he elects to retire. Mr. Carlson
is to be paid at least $60,000 per annum until his retirement. The
agreement also provides that upon his retirement, Mr. Carlson will be
retained by the Company as a part-time consultant (for not more than 60
hours in any month) until his death or disability. Upon his retirement,
Mr. Carlson will receive $75,000 per annum as a consultant, plus increments
beginning in 1985 equal to the greater of three percent of his consulting
fee or two-thirds of the percentage increase in the consumer price index
for the Chicago metropolitan area. If Mr. Carlson becomes disabled before
retiring, the Company can elect to discontinue his employment and retain
him in accordance with the consulting arrangement described above. Upon
Mr. Carlson's death (unless his death follows his voluntary termination of
his employment or the consulting arrangement), his widow will receive until
her death an amount equal to that which Mr. Carlson would have received as
a consultant. The Company may terminate payments under the agreement if
Mr. Carlson becomes the owner of more than 21% of the stock, or becomes an
officer, director, employee or paid agent of any competitor of the Company
within the continental United States. No amounts were accrued or payable
under this agreement in 1993, 1992 or 1991, and no amounts related thereto
are included above in the Summary Compensation Table.
COMPENSATION OF DIRECTORS
In 1993, each of Walter C.D. Carlson, Lester O. Johnson, Donald C.
Nebergall and Herbert S. Wander earned $18,000 as director's fees and
$1,500 for services on the audit committee, and Lester O. Johnson was
reimbursed $959 for expenses incurred in attending meetings. In addition
to the life insurance reported for the named executive officers reported in
the Summary Compensation Table above, the Company paid directors' life
insurance premiums in 1993 on behalf of each of the following directors in
the indicated amounts: Donald R. Brown ($1,888); Walter C.D. Carlson
($159); Robert J. Collins ($483); Rudolph E. Hornacek ($2,198); Lester O.
Johnson ($10,640); Donald C. Nebergall ($869); and Herbert S. Wander
($801). Donald C. Nebergall also received $149,323 in reimbursement of
certain expenses and for consulting services provided to the Company in
1993.
DIRECTOR INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS
LeRoy T. Carlson, Chairman of TDS, and LeRoy T. Carlson, Jr.,
President (chief executive officer) of TDS, are members of the Board of
Directors of TDS and of USM, and LeRoy T. Carlson, Jr., is a member of the
Board of Directors of APP. LeRoy T. Carlson, Jr., Chairman of USM and APP,
makes the executive officer compensation decisions for USM and APP. LeRoy
T. Carlson and LeRoy T. Carlson, Jr. also serve as directors and officers
of numerous direct or indirect subsidiaries of the Company and USM.
ISSUANCE OF TDS SHARES ON BEHALF OF USM.
The Company issues TDS securities in connection with the acquisition
of cellular interests on behalf of USM. At the time such acquisitions are
closed, the acquired cellular interests are generally transferred to USM,
which reimburses TDS by issuing USM securities to TDS or by increasing the
balance due to TDS under a revolving credit agreement between TDS and USM
(the "Revolving Credit Agreement"). The fair market value of the USM
securities issued to TDS in
-8-
connection with these transactions is calculated in the same manner and
over the same time period as the fair market value of the TDS securities
issued to the sellers in such acquisitions. During 1993, USM issued 5.5
million USM Common Shares to TDS and became indebted to TDS for an
additional $101.5 million under the Revolving Credit Agreement, to
reimburse TDS for 6.1 million TDS Common Shares issued in such
transactions.
In addition to the shares described in the preceding paragraph,
additional securities of TDS and USM were authorized for issuance in
connection with acquisitions of cellular interests that were pending at
December 31, 1993. In connection with these acquisitions, TDS expects to
issue in 1994 or later years approximately 2.4 million TDS Common Shares,
for which USM will reimburse TDS by issuing approximately 3.7 million USM
Common Shares and increasing the amount of debt under the Revolving Credit
Agreement in an amount estimated to be approximately $400,000.
OTHER RELATIONSHIPS AND RELATED TRANSACTIONS.
Walter C.D. Carlson, a director of the Company, and Michael G. Hron,
Secretary of the Company, are partners of Sidley & Austin, the principal
law firm of the Company.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, at March 7, 1994, the number of Common
Shares and Series A Common Shares beneficially owned, and the percentage of
the outstanding shares of each such class so owned by each director and
nominee for director of the Company, and by all directors and executive
officers as a group.
Name of Percent
Individual or Number of Amount and Nature of Percent of Voting
Persons in Group Title of Class Beneficial Ownership(1) of Class Power
- ----------------------- -------------- ----------------------- --------- ----------
LeRoy T. Carlson, Jr.,
Walter C.D. Carlson,
Letitia G. Carlson,
Donald C. Nebergall and
Melanie J. Heald(2) Series A Common Shares 6,238,555 90.7% 54.3%
LeRoy T. Carlson, Jr.,
C. Theodore Herbert,
Ronald D. Webster and
Michael G. Hron(3) Common Shares 945 * *
Series A Common Shares 146,576 2.1% 1.3%
LeRoy T. Carlson, Jr.,
C. Theodore Herbert,
Ronald D. Webster and
Michael G. Hron(4) Common Shares 22,252 * *
LeRoy T. Carlson(5) Common Shares 38,610 * *
Series A Common Shares 50,398 * *
LeRoy T. Carlson, Jr.(6)(12) Common Shares 42,332 * *
Murray L. Swanson(7)(12) Common Shares 23,293 * *
Series A Common Shares 2,427 * *
James Barr III(12) Common Shares 9,645 * *
H. Donald Nelson(7) Common Shares 4,888 * *
Series A Common Shares 5,101 * *
-9-
Rudolph E. Hornacek(8) Common Shares 12,156 * *
Series A Common Shares 2,348 * *
Lester O. Johnson(9) Common Shares 2,391 * *
Series A Common Shares 90,262 1.3 *
Donald C. Nebergall(10) Common Shares 7,684 * *
Walter C.D. Carlson(11) Common Shares 66 * *
Donald R. Brown(12) Common Shares 15,061 * *
Series A Common Shares 4,551 * *
Robert J. Collins(12) Common Shares 6,619 * *
Series A Common Shares 498 * *
Other executive officers Common Shares 80,531 * *
(6 persons)(12) Series A Common Shares 702 * *
All directors and executive officers Common Shares 266,473 * *
as a group (18 persons)(12) Series A Common Shares 6,541,418 95.1% 56.9%
<FN>
________________
* Less than 1%.
1. The nature of beneficial ownership for shares in this column is sole voting
and investment power, except as otherwise set forth in these footnotes.
2. The shares listed are held by the persons named as trustees under a voting
trust which expires June 30, 2009, created to facilitate long-standing
relationships among the trustees' certificate holders. Under the terms of
the voting trust, the trustees hold and vote the Series A Common Shares
held in the trust. If the voting trust were terminated, the following
persons would each be deemed to own beneficially more than 5% of the
outstanding Series A Common Shares: Margaret D. Carlson (wife of LeRoy T.
Carlson), LeRoy T. Carlson, Jr., Walter C.D. Carlson, Prudence E. Carlson,
Letitia G. Carlson (children of LeRoy T. Carlson and Margaret D. Carlson)
and Donald C. Nebergall, as trustee under certain trusts for the benefit of
the heirs of LeRoy T. and Margaret D. Carlson and an educational
institution. In addition, Margaret D. Carlson owns 50,398 Series A Common
Shares directly and Prudence E. Carlson owns 194,148 Series A Common Shares
directly.
3. Voting and investment control is shared by the persons named as trustees of
the Telephone and Data Systems, Inc. Employees' Pension Trust I.
4. Voting and investment control is shared by the persons named as trustees of
the Telephone and Data Systems, Inc. Tax-Deferred Savings Trust. Does not
include 165,245 shares as to which the voting and investment power is
passed through to plan participants.
5. Does not include 278,647 Series A Common Shares (4.0% of class) held for
the benefit of LeRoy T. Carlson in the voting trust described in footnote
(2). Beneficial ownership is disclaimed as to 635,767 Series A Common
Shares held for the benefit of his wife in such voting trust and as to
50,398 Series A Common Shares shown in the table which are held directly by
his wife (an aggregate of 10.0% of class).
6. Does not include 1,064,593 Series A Common Shares (15.5% of class) held in
the voting trust described in footnote (2), of which 1,038,214 shares are
held for the benefit of LeRoy T. Carlson, Jr. Beneficial ownership is
disclaimed with respect to an aggregate of 26,379 Series A Common Shares
held for the benefit of his wife, his children and others in such voting
trust.
7. Includes shares held by and/or in joint tenancy with spouse or children.
8. Includes 675 Series A Common Shares held as custodian for his children.
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9. Does not include 244,622 Series A Common Shares (3.6% of class) held for
the benefit of Lester O. Johnson and his wife in the voting trust described
in footnote (2).
10. Includes 7,379 Common Shares held as trustee under a trust for the benefit
of an educational institution and the heirs of LeRoy T. and Margaret D.
Carlson. Does not include 998,805 Series A Common Shares (14.5% of class)
held as trustee under trusts for the benefit of the heirs of LeRoy T. and
Margaret D. Carlson and an educational institution, or 30 Series A Common
Shares held for the benefit of Donald C. Nebergall, which are included in
the voting trust described in footnote (2).
11. Does not include 1,064,430 Series A Common Shares (15.5% of class) held in
the voting trust described in footnote (2), of which 1,039,774 shares are
held for the benefit of Walter C.D. Carlson. Beneficial ownership is
disclaimed with respect to an aggregate of 24,656 Series A Common Shares
held for the benefit of his wife and children in such voting trust.
12. Includes the following number of Common Shares that may be purchased
pursuant to stock options and/or stock appreciation rights which are
currently exercisable or exercisable within 60 days: Mr. Swanson, 3,375
shares; Mr. LeRoy T. Carlson, Jr., 38,250 shares; Mr. Barr, 8,000 shares;
Mr. Hornacek, 8,000 shares; Mr. Brown, 7,827 shares; Mr. Collins, 1,310
shares; and all other executive officers, 48,287 shares.
PRINCIPAL SHAREHOLDERS
In addition to persons listed in the preceding table and the footnotes
thereto, the following table sets forth, as of March 7, 1994, information
regarding each person who beneficially owns more than 5% of any class of voting
securities of TDS. The nature of beneficial ownership in this table is sole
voting and investment power except as otherwise set forth in footnotes thereto.
Shares of Percent Percent
Shareholder's TDS Class of TDS of Voting
Name and Address Title of Class Owned Class Power
---------------- -------------- --------- -------- ---------
Eagle Asset Management Inc. Common Shares 3,255,980(1) 7.1% 2.8%
880 Carillon Parkway
St. Petersburg, Florida 33733
Putnam Investments, Inc., ET AL. Common Shares 2,478,405(2) 5.4% 2.2%
One Post Office Square
Boston, Massachusetts 02109
Goldman Sachs & Co. Preferred Shares 50,860 11.7% *
85 Broad Street
New York, New York 10004
Roland G. and Bette B. Nehring Preferred Shares 23,030 5.3% *
5253 North Dromedary Road
Phoenix, Arizona 85018
Regional Operations Group Inc. Preferred Shares 24,297 5.6% *
312 South 3rd Street
Minneapolis, Minnesota 55440
<FN>
_______________________
* Less than 1%.
(1) Based on the most recent Schedule 13G (Amendment No. 3) filed with the
Securities and Exchange Commission ("SEC"). In such Schedule 13G filing,
Eagle Asset Management, Inc. has reported sole investment power and sole
voting power with respect to all such shares.
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(2) Based on a Schedule 13G filed with the SEC. The Schedule 13G reports that
Putnam Investments, Inc. and The Putnam Advisory Company, Inc. share voting
power with respect to 241,257 Common Shares, that Putnam Investments, Inc.
and Putnam Investment Management, Inc. share dispositive power with respect
to 2,128,285 Common Shares, and that Putnam Investments, Inc. and The
Putnam Advisory Company, Inc. share dispositive power with respect to
350,120 Common Shares. The Schedule 13G reports that Marsh & McLennon
Companies, Inc. is the direct or indirect parent corporation of each of
such entities.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Executive Compensation - Director Interlocks and Insider
Participation in Compensation Decisions."
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