Document:

Exhibit 10.1

 

UNITED STATES
CELLULAR CORPORATION

 

GUIDELINES FOR THE
DETERMINATION OF ANNUAL BONUS

FOR PRESIDENT AND
CHIEF EXECUTIVE OFFICER

(Effective for
Performance Years Commencing

On or After January 1,
2008)

 

I.      PURPOSE

 

·                        To provide incentive for the President and Chief
Executive Officer (the “President”) of United States Cellular Corporation (the “Company”)
to extend his best efforts toward achieving superior results with respect to
Company performance;

 

·                        To reward the President in relation to his success in
meeting and exceeding performance targets and otherwise contributing to the
success of the Company; and

 

·                        To help the Company retain the President, a talented
leader in a position of critical importance to the success of the Company.

 

II.    BONUS AMOUNT

 

The Chairman of the
Company (the “Chairman”) in his sole discretion determines whether an annual
bonus will be payable to the President for a performance year and, if so, the
amount of such bonus.  Factors that may
be considered by the Chairman in making such determination include the
following:

 

·                        the level of achievement of the Company, on a
short-term and long-term basis, measured against performance objectives and
compared with that of peer companies;

 

·                        the President’s individual performance, on a
short-term and long-term basis, with respect to his leadership of the Company,
the development and maintenance of effective working relationships across the
enterprise, his stated personal objectives and his other duties and
responsibilities;

 

·                        the total cash compensation paid to chief executive
officers of peer companies, including those which are divisions or subsidiaries
of parent companies; and

 

·                        other factors that the Chairman in the exercise of his
judgment and discretion determines relevant.

 

No single factor shall be
determinative and no factor shall be applied mechanically to calculate any
portion of the President’s bonus.  The
entire amount of the bonus is discretionary. 
The President shall have no right or expectation with respect to any bonus
until the Chairman has determined whether a bonus will be paid for a
performance year, and any such bonus is not earned or vested until the date the
bonus is paid.

 

III.   BONUS PAYMENT

 

Any bonus awarded with
respect to a performance year shall be paid during the period commencing on the
January 1 immediately following the performance year and ending on the March 15
immediately following the performance year. 
Notwithstanding the foregoing, in the event that payment by such March 15th
is administratively impracticable and such impracticability was unforeseeable
(in each case, such that the payment continues to qualify as a “short-term
deferral” within the meaning of section 409A of the Internal Revenue Code),
payment will be made as soon as administratively practicable after such March 15th,
but in no 

 

 

event later than the December 31
immediately following the performance year. 
Payment will be in the form of a lump sum.

 

Notwithstanding any
provision of these guidelines to the contrary, the President does not have a
legally binding right to a bonus unless and until the bonus amount, if any, is
paid.

 

IV.   AMENDMENT AUTHORITY

 

The Chairman reserves the
right to amend the guidelines set forth herein at any time for any reason.

 

APPROVED by the CHAIRMAN
of UNITED STATES CELLULAR CORPORATION on this                     
day of                                     ,
2008.

 

 

	
   

  	
   

  
	
   

  	
  LeRoy T.
  Carlson, Jr.

  

 

2Exhibit 10.1

 

CORPORATE OFFICER

 

TELEPHONE AND DATA
SYSTEMS, INC.

2004 LONG-TERM
INCENTIVE PLAN

<<YEAR>>
STOCK OPTION AWARD AGREEMENT

 

Telephone and Data Systems, Inc., a Delaware
corporation (the “Company”), hereby grants to <<NAME>>
(the “Optionee”), as of <<DATE>> (the
“Option Date”), pursuant to the provisions of the Telephone and Data Systems, Inc.
2004 Long-Term Incentive Plan (As Amended and Restated) (the “Plan”), a
Non-Qualified Stock Option (the “Option”) to purchase from the Company <<NUMBER>> shares of Special Common Stock at the
price of $<<PRICE>> 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.

 

1.1.      Exercise
of Option.  (a)  In general.  Except as otherwise provided in this
Award Agreement, the Option shall become exercisable (i) on the first
annual anniversary of the Option Date with respect to one-third of the number
of shares of Special Common Stock subject to the Option on the Option Date; (ii) on
the second annual anniversary of the Option Date with respect to an additional
one-third of the number of shares of Special Common Stock subject to the Option
on the Option Date; and (iii) on the third annual anniversary of the
Option Date with respect to the remaining one-third of the number of shares of
Special Common Stock subject to the Option on the Option Date.  Except as otherwise provided in this Award
Agreement, in no event may the Option be exercised, in whole or in part, after <<TENTH ANNIVERSARY OF OPTION DATE>> (the
“Expiration Date”).

 

 

(b)  Disability.  If the Optionee ceases to be employed by or
of service to the Employers and Affiliates 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 or service, 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 service or until the Expiration Date, whichever period is
shorter.  If the Optionee shall die
within such exercise period, the Option shall be exercisable by the beneficiary
or beneficiaries duly designated by the Optionee, 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 exercise period and
(ii) the 180 day anniversary of the Optionee’s death.

 

(c)  Special Retirement.  If the Optionee ceases to be employed by or
of service to the Employers and Affiliates by reason of Special Retirement (as
defined below), the Option immediately shall become exercisable in full if (i) the
Optionee has attained age 66 as of the effective date of the Optionee’s Special
Retirement and (ii) the effective date of the Optionee’s Special
Retirement occurs on or after January 1, <<CALENDAR
YEAR COMMENCING AFTER OPTION DATE>>.  If the Optionee ceases to be employed by or
of service to the Employers and Affiliates by reason of Special Retirement and
either (i) the Optionee has not attained age 66 as of the effective date
of the Optionee’s Special Retirement or (ii) the effective date of the
Optionee’s Special Retirement occurs before January 1, <<CALENDAR YEAR COMMENCING AFTER OPTION DATE>>,
the Option shall be exercisable only to the extent it is exercisable on the
effective date of the Optionee’s Special Retirement.  The Option, to the extent then exercisable,
may be exercised 

 

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by the Optionee (or the
Optionee’s Legal Representative) for a period of 12 months after the effective
date of the Optionee’s Special Retirement or until the Expiration Date, whichever
period is shorter.  If the Optionee shall
die within such exercise period, the Option shall be exercisable by the
beneficiary or beneficiaries duly designated by the Optionee, 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
exercise period and (ii) the 180 day anniversary of the Optionee’s
death.  For purposes of this Award
Agreement, “Special Retirement” shall mean an Optionee’s termination of
employment or service with the Employers and Affiliates on or after the later
of (i) the Optionee’s attainment of age 62 and (ii) the Optionee’s
Early Retirement Date or Normal Retirement Date, as such terms are defined in
the Telephone and Data Systems, Inc. Pension Plan.

 

(d)  Retirement.  If the Optionee ceases to be employed by or
of service to the Employers and Affiliates by reason of Retirement (as defined
below), the Option immediately shall become exercisable in full if (i) the
Optionee has attained age 66 as of the effective date of the Optionee’s
Retirement and (ii) the effective date of the Optionee’s Retirement occurs
on or after January 1, <<CALENDAR YEAR
COMMENCING AFTER OPTION DATE>>.  If the Optionee ceases to be employed by or
of service to the Employers and Affiliates by reason of Retirement and either (i) the
Optionee has not attained age 66 as of the effective date of the Optionee’s
Retirement or (ii) the effective date of the Optionee’s Retirement occurs
before January 1, <<CALENDAR YEAR
COMMENCING AFTER OPTION DATE>>, the Option shall be
exercisable only to the extent it is exercisable on the effective date of the
Optionee’s Retirement.  The Option, to
the extent then exercisable, may be exercised by the Optionee (or the Optionee’s
Legal Representative) for a period of 90 days 

 

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after the effective date
of the Optionee’s Retirement or until the Expiration Date, whichever period is
shorter.  If the Optionee shall die
within such exercise period, the Option shall be exercisable by the beneficiary
or beneficiaries duly designated by the Optionee, 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 180 day anniversary of the Optionee’s death.  For purposes of this Award Agreement,
“Retirement” shall mean an Optionee’s termination of employment or service with
the Employers and Affiliates on or after the Optionee’s attainment of age 65
that does not satisfy the definition of “Special Retirement” set forth in Section 1.1(c).

 

(e)  Resignation with Prior Consent of the
Board.  If the Optionee ceases to be
employed by or of service to the Employers and Affiliates by reason of the
Optionee’s resignation of employment or service at any age with the prior
consent of the board of directors of such Optionee’s Employer (as evidenced in
the Employer’s minute book), the Option shall be exercisable only to the extent
it is exercisable on the effective date of the Optionee’s resignation, and
after such date may be exercised by the Optionee (or the Optionee’s Legal
Representative) for a period of 90 days after such effective date or until the
Expiration Date, whichever period is shorter. 
If the Optionee shall die within such exercise period, the Option shall
be exercisable by the beneficiary or beneficiaries duly designated by the
Optionee, 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 180 day anniversary of
the Optionee’s death.

 

(f)  Death.  If the Optionee ceases to be employed by or
of service to the Employers and Affiliates by reason of death, the Option shall
be exercisable only to the extent it is exercisable on the date of death, and
may be exercised by the beneficiary or beneficiaries duly designated by the
Optionee for a period ending on the 180 day anniversary 

 

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of the Optionee’s death.

 

(g)  Other Termination of Employment or
Service.  If the Optionee ceases to
be employed by or of service to the Employers and Affiliates for any reason
other than Disability, Special Retirement, Retirement, resignation of
employment or service with the prior consent of the board of directors of the
Optionee’s Employer (as evidenced in the Employer’s minute book) 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 or service, and 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 service or until the Expiration Date, whichever period is
shorter.  If the Optionee shall die within
such exercise period, the Option shall be exercisable only to the extent it is
exercisable on the date of death and may be exercised by the beneficiary or
beneficiaries duly designated by the Optionee for a period ending on the 180
day anniversary of the Optionee’s death. 
Notwithstanding any provision in this Award Agreement to the contrary,
if the Optionee ceases to be employed by or of service to the Employers and
Affiliates on account of the Optionee’s negligence, willful misconduct,
competition with an Employer or other Affiliate or misappropriation of
confidential information of an Employer or other Affiliate, the Option shall
terminate on the date the Optionee’s employment or service with the Employers
and Affiliates terminates, unless such Option terminates earlier pursuant to Section 1.2.

 

(h)  Expiration of Option During Blackout
Period.  If the Option shall expire
under any of subsections (a) through (g) of this Section 1.1
during a period when the Optionee and family members or other persons living in
the household of such persons are prohibited from trading in securities of the
Company pursuant to the Telephone and Data 

 

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Systems, Inc. Policy
Regarding Insider Trading and Confidentiality (or any successor policy thereto)
(a “Blackout Period”), the period during which the Option is exercisable shall
be extended to the date that is 30 days after the date of the termination of
the Blackout Period.

 

(i)  Expiration of Option During Suspension
Period.  If the Option shall expire
under any of subsections (a) through (g) of this Section 1.1
during a period when the exercise of the Option would violate applicable
securities laws (a “Suspension Period”), the period during which the Option is
exercisable shall be extended to the date that is 30 days after the date of the
termination of the Suspension Period.

 

1.2.            Termination of Option and
Forfeiture of Option Gain Upon Competition or Misappropriation of Confidential
Information.  Notwithstanding any
other provision herein, the Option granted pursuant to this Award Agreement
shall not be exercisable on or after any date on which the Optionee enters into
competition with an Employer or other Affiliate, or misappropriates
confidential information of an Employer or other Affiliate, as determined by the
Company in its sole discretion.  As of
the date of such competition or misappropriation, the Option granted pursuant
to this Award Agreement automatically shall terminate and thereby be forfeited
to the extent it has not been exercised. 
In the event of such competition or misappropriation, the Optionee shall
pay the Company, within five business days of receipt by the Optionee of a
written demand therefor, an amount in cash determined by multiplying the number
of shares of Stock purchased pursuant to each exercise of the Option within the
six months immediately preceding such competition or misappropriation (without
reduction for any shares of Stock delivered by the Optionee or withheld by the
Company pursuant to Section 1.3 or Section 2.4) by the difference
between (i) the Fair Market Value of a share of Stock on the date of such
exercise and (ii) the purchase 

 

6

 

price per share of Stock
set forth in the first paragraph of this Award Agreement.  The Optionee acknowledges and agrees that the Option, by encouraging
stock ownership and thereby increasing an employee’s proprietary interest in
the Company’s success, is intended as an incentive to participating employees
to remain in the employ of an Employer or other Affiliate.  The Optionee acknowledges and agrees that
this Section 1.2 is therefore fair and reasonable, and not a penalty.

 

For purposes of the preceding paragraph, the Optionee
shall be treated as entering into competition with an Employer or other
Affiliate if the Optionee (i) directly or indirectly, individually or in
conjunction with any person, firm or corporation, has contact with any customer
of an Employer or other Affiliate or with any prospective customer which has
been contacted or solicited by or on behalf of an Employer or other 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 an Employer or other Affiliate, (ii) directly or indirectly, individually or in conjunction with
any person, firm or corporation, becomes employed in the business or engages in
the business of providing wireless, telephone or broadband products or services
in any geographic territory in which an Employer or other Affiliate offers such
products or services or has plans to do so within the next twelve months or (iii) otherwise
competes with an Employer or other Affiliate in any manner or otherwise engages
in the business of an Employer or other Affiliate.

 

The Optionee shall be treated as misappropriating
confidential information of an Employer or other Affiliate if the Optionee (i) uses
confidential information (as described below) for the benefit of anyone other
than an Employer or such Affiliate, as the case may be, or discloses the
confidential information to anyone not authorized by an Employer or such 

 

7

 

Affiliate, as the case
may be, to receive such information, (ii) upon termination of employment
or service, makes any summaries of, takes any notes with respect to, or
memorizes any confidential information or takes any confidential information or
reproductions thereof from the facilities of an Employer or other Affiliate, or
(iii) upon termination of employment or service or upon the request of an
Employer or other Affiliate, fails to return all confidential 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 an Employer or other Affiliate.

 

1.3.            Method of Exercise.  The Option may be exercised by the holder of
the Option (1) by giving written notice to the Vice President-Human
Resources of the Company specifying the number of whole shares of Stock to be
purchased and by accompanying such notice with payment therefor in full (unless
another arrangement for such payment which is satisfactory to the Company has
been made) and (2) by executing such documents and taking any other
actions as the Company may reasonably request. 
Payment made be made either (i) in cash, (ii) in previously
owned whole shares of Stock (which the holder has 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) by authorizing the Company to withhold whole shares of
Stock which otherwise would be delivered having a Fair Market Value, determined
as of the date of exercise, equal to the aggregate purchase price payable by
reason of such exercise, (iv) to the extent legally 

 

8

 

permissible, in cash by a
broker-dealer acceptable to the Company to whom the holder has submitted an
irrevocable notice of exercise or (v) by a combination of (i), (ii) and
(iii).  If payment of the purchase price
is made pursuant to clause (ii) or (iii) of the second sentence of
this Section 1.3, then any fraction of a share of Stock which would be
required to pay such purchase price 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 full purchase price
therefor has been paid (or arrangement has been made for such payment to the
Company’s satisfaction).

 

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 Agreement 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 Agreement to the
Company, either (i) mark the Award Agreement 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 Agreement in
form and substance.  If the holder does
not return this Award Agreement to the Company, cancellation of the Option, to
the extent it is expired, exercised, cancelled or forfeited, shall nonetheless
be effective.

 

2.             Additional Terms
and Conditions of Option.

 

2.1.            Option Subject to Acceptance.  The Option shall become null and void unless
the Optionee shall accept this Award Agreement. 
The Optionee shall be deemed to have accepted this Award Agreement
unless the Optionee returns this Award Agreement to the Vice President-Human
Resources of the Company within thirty (30) days of the 

 

9

 

Optionee’s receipt of
this Award Agreement, accompanied by a written statement that the Optionee does
not accept this Award Agreement.

 

2.2.            Nontransferability of Option.  The Option may not be transferred by the
Optionee other than (i) to a beneficiary upon the Optionee’s death (as
designated on the form attached hereto or under the terms of the Plan), (ii) pursuant
to a court order entered in connection with a dissolution of marriage or child
support or (iii) by gift to 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 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.

 

By accepting the Option, the Optionee agrees that if
all beneficiaries designated on a beneficiary designation form predecease the
Optionee or, in the case of corporations, partnerships, trusts or other
entities which are designated beneficiaries, are terminated, dissolved, become
insolvent or are adjudicated bankrupt prior to the date of the Optionee’s
death, or if the Optionee fails to designate a beneficiary on a beneficiary
designation form, then the Optionee hereby designates the following persons in
the order set forth herein as the Optionee’s beneficiary or beneficiaries:  (i) the Optionee’s spouse, if living, or
if none, (ii) the Optionee’s then living descendants, per stirpes, or if
none, (iii) the Optionee’s estate.

 

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 

 

10

 

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 issuance or delivery of shares of Stock upon 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 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, (2) delivery to the Company of whole shares of Stock, the Fair
Market Value of which shall be 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) to
the extent legally permissible, 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).  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 

 

11

 

remaining amount due
shall be paid in cash by the holder.  The Optionee agrees that if by the pay period
that immediately follows the date that the Option is exercised, no cash payment
attributable to any such fractional share shall have been received by the
Company, then the Optionee hereby authorizes the Company to deduct such cash
payment from any amount payable by the Company or any Affiliate to the
Optionee, including without limitation any amount payable to the Optionee as
salary or wages.  The Optionee agrees
that this authorization may be reauthorized via electronic means determined by
the Company.  The Optionee may revoke
this authorization by written notice to the Company prior to any such
deduction.  No share of Stock
shall be delivered until the Required Tax Payments have been satisfied in full
(or arrangement has been made for such payment to the Company’s satisfaction).

 

2.5.            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,
exchange of shares, liquidation or other similar change in capitalization or
event, or any distribution to holders of Stock other than a regular cash
dividend, the number and class of shares of Stock subject to the Option and the
purchase price per share shall be appropriately and equitably adjusted by the
Committee, such adjustment to be made without an increase in the aggregate
purchase price.  Such adjustment shall be
made in compliance with the requirements of Section 409A of the Code
applicable to stock rights, including without limitation the requirements of
Treasury Regulation §1.409A-1(b)(5)(v)(D), and shall be final, binding and
conclusive.  If 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 

 

12

 

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 the Option.

 

2.6.            Change in Control.  (a)  Notwithstanding any other provision
of this Award Agreement or any provision of the Plan, in the event of a Change
in Control, the Option 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 subject to the Option, the number and class of shares into which each
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 the Option shall be
appropriately adjusted by the Committee (whose determination shall be final,
binding and conclusive), 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 the Option prior to the Change in Control.  Any substitution pursuant to this Section 2.6(a) shall
be made in compliance with the requirements of Section 409A of the Code
applicable to stock rights, including without limitation the requirements of
Treasury Regulation §1.409A-1(b)(5)(v)(D).

 

(b)           For purposes of the Plan and this
Award Agreement, “Change in Control” shall mean:

 

(1)           the acquisition by any 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 

 

13

 

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, 2035,
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 February 27,
2004, constituted 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 after February 27,
2004, 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 

 

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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 solicitation by a Person other than the Board
for the purpose of opposing a solicitation by any other Person with respect to
the election or removal of directors 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)           consummation 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 50% 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 

 

15

 

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 issuance
or delivery of shares hereunder, such shares will not be issued or 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
agrees to use reasonable efforts to effect or obtain any such listing,
registration, qualification, consent, approval or other action.

 

2.8.            Delivery of Certificates.  Upon the exercise of the Option, in whole or
in part, the Company shall, subject to Section 2.4, 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 original issue or transfer taxes and all fees
and expenses incident to such delivery, except as otherwise provided in Section 2.4.

 

16

 

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 holder becomes a
stockholder of record with respect to such delivered shares.

 

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 or Service.  In
no event shall the granting of the Option or the acceptance of this Award
Agreement and the Option by the Optionee give or be deemed to give the Optionee
any right to continued employment by or service with any Employer or any
subsidiary or affiliate of an Employer.

 

3.2.            Decisions of Committee.  The Committee or its delegate 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 or its delegate
regarding the Plan or this Award Agreement shall be final, binding and
conclusive.

 

3.3.            Award Agreement Subject to the
Plan.  This Award Agreement is
subject to the provisions of the Plan, as it may be amended from time to time,
and shall be interpreted in accordance therewith.  The Optionee hereby acknowledges receipt of a
copy of the Plan.

 

17

 

3.4.            Successors.  This Award 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 acquire any rights hereunder in accordance with
this Award Agreement or the Plan.

 

3.5.            Notices.  All notices, requests or other communications
provided for in this Award Agreement 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, (c) by
telecopy with confirmation of receipt or (d) by electronic mail, utilizing
notice of undelivered electronic mail features. 
The notice, request or other communication shall be deemed to be
received (a) in the case of delivery, on the date of its actual receipt by
the party entitled thereto, (b) in the case of mailing by certified or
registered mail, five days following the date of such mailing, (c) in the
case of telecopy, on the date of confirmation of receipt or (d) in the
case of electronic mail, on the date of mailing, but only if a notice of
undelivered electronic mail is not received.

 

3.6.            Governing Law.  The Option, this Award Agreement, and all
determinations made and actions taken pursuant thereto and hereto, to the
extent otherwise not governed by the Code or 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.

 

18

 

3.7.            Counterparts.  This Award Agreement 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.

 

 

	
   

  	
  TELEPHONE AND DATA
  SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  <<NAME>>

  
	
   

  	
   

  	
  <<TITLE>>

  

 

Accepted this ______ day of

____________________, 20___.

___________________________

Optionee

 

19

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