Document:

Exhibit

EXHIBIT 10.13
EXTRA SPACE STORAGE INC.
2015 INCENTIVE AWARD PLAN 
 
PERFORMANCE STOCK UNIT AWARD GRANT NOTICE AND 
PERFORMANCE STOCK UNIT AWARD AGREEMENT
Extra Space Storage Inc., a Maryland corporation (the “Company”), pursuant to its 2015 Incentive Award Plan (as amended from time to time, the “Plan”), hereby grants to the individual listed below (“Participant”), an award of performance-based restricted stock units (“Performance Stock Units” or “PSUs”) with respect to the number of shares of the Company’s Common Stock (the “Shares”) set forth below.  Each PSU is hereby granted in tandem with a corresponding dividend equivalent (the “Dividend Equivalents”).  This award for Performance Stock Units and Dividend Equivalents (this “PSU Award”) is subject to all of the terms and conditions set forth in this Performance Stock Unit Award Grant Notice (the “Grant Notice”) and in the Performance Stock Unit Award Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan, each of which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Agreement.
	
			
	Participant:
	   
	 

	Grant Date:
	   
	 

	Target Number of PSUs:
	   
	 

	Maximum Number of PSUs:
	   
	 

	Distribution Schedule:
	Subject to the terms of the Performance Stock Unit Agreement, the PSUs and the Dividend Equivalents shall be distributable as they vest pursuant to the Vesting Schedule in accordance with Section 1.1(c) of the Agreement.

	Vesting Schedule:
	Subject to the terms of the Agreement, the PSUs and the Dividend Equivalents shall vest as set forth on Exhibit B to this Grant Notice.

	 
	 
	 

By his or her signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and this Grant Notice.  Participant has reviewed the Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Agreement and the Plan. Participant has been provided with a copy or electronic access to a copy of the prospectus for the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.  
	
					
	EXTRA SPACE STORAGE INC.
	 
	PARTICIPANT

	By:
	     
	 
	By:
	   

	Print Name:
	     
	 
	Print
	 

	Title:
	     
	 
	Name:
	 

EXHIBIT A
 
TO PERFORMANCE STOCK UNIT AWARD GRANT NOTICE 
 
PERFORMANCE STOCK UNIT AWARD AGREEMENT
Pursuant to the Grant Notice to which this Agreement is attached, the Company has granted to Participant the number of PSUs indicated in the Grant Notice and their corresponding Dividend Equivalents. The PSU Award is subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.
ARTICLE I. 
AWARD; VESTING; DISTRIBUTION
1.1    Terms of Performance Stock Units and Dividend Equivalents.  
(a)    Award.  
(i)    In consideration of Participant’s past and/or continued employment with or service to the Company or any Affiliate and for other good and valuable consideration, the Company hereby grants to Participant the right to receive the number of PSUs set forth in the Grant Notice and their corresponding Dividend Equivalents, subject to all of the terms and conditions set forth in this Agreement, the Grant Notice and the Plan.  Prior to actual issuance of any Shares, the PSUs, the Dividend Equivalents and the PSU Award represent an unsecured obligation of the Company, payable only from the general assets of the Company.
(ii)    The Company hereby grants to Participant, with respect to each PSU, a Dividend Equivalent for ordinary cash dividends paid to substantially all holders of outstanding Shares with a record date after the Grant Date and prior to the date the applicable PSU is settled, forfeited or otherwise expires.  Each Dividend Equivalent entitles Participant to receive the equivalent value of any such ordinary cash dividends paid on a single Share.  The Company will establish a separate Dividend Equivalent bookkeeping account (a “Dividend Equivalent Account”) for each Dividend Equivalent and credit the Dividend Equivalent Account (without interest) on the applicable dividend payment date with the amount of any such cash paid.
(b)    Vesting.  The PSUs subject to the PSU Award shall vest in accordance with the Vesting Schedule set forth in Exhibit B to the Grant Notice.  Unless and until the PSUs have vested in accordance with the Vesting Schedule set forth in the Grant Notice, Participant will have no right to any distribution with respect to such PSUs.  In the event of Participant’s Termination of Service prior to the vesting of all of the PSUs, any unvested PSUs will terminate automatically without any further action by the Company and be forfeited without further notice and at no cost to the Company.  Dividend Equivalents (including any Dividend Equivalent Account balance) will vest or be forfeited, as applicable, upon the vesting or forfeiture of the PSU with respect to which the Dividend Equivalent (including the Dividend Equivalent Account) relates.
(c)    Distribution. 

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(i)    Subject to the terms and provisions of the Plan and this Agreement, within ten (10) days following the vesting date of the PSUs as specified in the Vesting Schedule set forth in Exhibit B to the Grant Notice, (A) shares of Common Stock shall be distributed to Participant (or in the event of Participant’s death, to his or her estate) with respect to such Participant’s PSUs vesting on such date and (B) cash shall be distributed to Participant (or in the event of Participant’s death, to his or her estate) with respect to any related Dividend Equivalents (including any Dividend Equivalent Account balance); provided, however, that, in the event the vesting date is the date of a Change in Control, the PSUs and any related Dividend Equivalents (including any Dividend Equivalent Account balance) shall be settled immediately prior to such Change in Control.  
(ii)    All distributions of the PSUs shall be made by the Company in the form of whole shares of Common Stock.  All distributions in respect of the Dividend Equivalents (including any Dividend Equivalent Account balance) will be paid in cash. In lieu of any fractional share of Common Stock, the Company shall make a cash payment to Participant equal to the Fair Market Value of such fractional share on the date the PSUs are settled pursuant to this Section 1.1.
(iii)    Neither the time nor form of distribution of Common Stock with respect to the PSUs and the Dividend Equivalents may be changed, except as may be permitted by the Administrator in accordance with the Plan and Section 409A of the Code and the Treasury Regulations thereunder.
1.2    Tax Withholding.  Notwithstanding anything to the contrary in this Agreement: 
(a)    The Company and its Affiliates have the authority to deduct or withhold from other compensation payable to Participant, or to require Participant to remit to the Company or the applicable Affiliate, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the Participant’s portion of any FICA obligation) required by Applicable Law to be withheld with respect to any taxable event arising from the vesting of the PSUs or the Dividend Equivalents or the receipt of the Shares or cash upon settlement of the PSUs or the Dividend Equivalents.  Participant may, at his or her election, satisfy the tax withholding obligation in one or more of the forms specified below, subject to Section 10.2 of the Plan: 

(i)     by cash or check made payable to the Company or the Affiliate with respect to which the withholding obligation arises; 

(ii)     by the deduction of such amount from amounts payable in settlement of the Dividend Equivalents or other compensation payable to Participant; 

(iii)     with the consent of the Administrator, by requesting that the Company withhold a net number of vested Shares otherwise issuable pursuant to the PSUs having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Affiliates based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;

(iv)     with the consent of the Administrator, by tendering vested shares of Common Stock owned by Participant having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Affiliates based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes; 

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(v)     through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to the Shares issuable pursuant to the PSUs then vesting and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company or the Affiliate with respect to which the withholding obligation arises in satisfaction of such withholding taxes; provided that payment of such proceeds is then made to the Company or the applicable Affiliate at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or 

(vi)     in any combination of the foregoing.

(b)     In the event Participant fails to provide timely payment of all sums required pursuant to Section 1.2(a), the Company shall have the right, but not the obligation, to satisfy all or any portion of Participant’s required payment obligation pursuant to Section 1.2(a)(iii) above. The Company shall not be obligated to deliver any stock certificate representing Shares issuable with respect to the PSUs or to pay cash in respect of the Dividend Equivalents to Participant or Participant’s legal representative unless and until Participant or Participant’s legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the grant of the PSUs and the Dividend Equivalents, the distribution of the Shares or cash issuable with respect thereto, or any other taxable event related to the PSUs or the Dividend Equivalents, provided that no payment shall be delayed under this Section 1.2(b) if such delay will result in the imposition of taxes or penalties under Section 409A of the Code.

(c)    In the event any tax withholding obligation arising in connection with the PSU Award will be satisfied under Section 1.2(a)(iii) above, then, unless Participant is subject to Section 16 of the Exchange Act at the time the tax withholding obligation arises (in which case the approval of the Committee shall be required for any election by the Company pursuant to this Section 1.2(c)), the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on Participant’s behalf a whole number of shares from those Shares that are then issuable upon settlement of the PSUs as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the tax withholding obligation and to remit the proceeds of such sale to the Company or the Affiliate with respect to which the withholding obligation arises.  Participant’s acceptance of this PSU Award constitutes Participant’s instruction and authorization to the Company and such brokerage firm to complete the transactions described in this Section 1.2(c).  The Company may refuse to issue any Shares to Participant until the foregoing tax withholding obligations are satisfied.

(d)    Participant is ultimately liable and responsible for all taxes owed in connection with the PSU Award, regardless of any action the Company or any Affiliate takes with respect to any tax withholding obligations that arise in connection with the PSU Award.  Neither the Company nor any Affiliate makes any representation or undertaking regarding the treatment of any tax withholding in connection with the PSU Award.  The Company and its Affiliates do not commit and are under no obligation to structure the PSU Award to reduce or eliminate Participant’s tax liability.

1.3    Conditions to Issuance of Shares.  The Company shall not be required to issue or deliver any Shares issuable upon the vesting of the PSUs prior to the fulfillment of all of the following conditions:  
(a)     the admission of the Shares to listing on all stock exchanges on which such Shares are then listed; 

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(b)     the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the U.S. Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its sole and absolute discretion, deem necessary and advisable; 
(c)     the obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable; 
(d)    the lapse of any such reasonable period of time following the date the PSUs vest as the Administrator may from time to time establish for reasons of administrative convenience, subject to Section 409A of the Code and the Treasury Regulations and other guidance issued thereunder; and 
(e)     the receipt by the Company of full payment of any applicable withholding tax in any manner permitted under Section 1.2 above.  
1.4    Forfeiture and Claw-Back Provisions.  Participant hereby agrees that the Administrator may provide that the PSU Award shall terminate and any PSUs and Dividend Equivalents (including any Dividend Equivalent Account) shall be forfeited, if Participant at any time prior to the settlement of the PSU Award engages in any activity which is inimical, contrary or harmful to the interests of the Company, as determined by the Administrator, including, without limitation, any violation of any written Company policy, or Participant’s employment is terminated for Cause.  In addition, Participant hereby acknowledges and agrees that the PSU Award is subject to the provisions of Section 10.5 of the Plan.
1.5    Other Restrictions.  Participant hereby acknowledges and agrees that the PSU Award is subject to the provisions of Section 12.8 of the Plan.
ARTICLE II.    
OTHER PROVISIONS
2.1    Administration.  The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules.  All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested persons.  To the extent allowable pursuant to Applicable Law, no member of the Administrator will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement. 
2.2    PSU Award and Interests Not Transferable.  This PSU Award and the rights and privileges conferred hereby, including the PSUs and the Dividend Equivalents awarded hereunder, shall not be liable for the debts, contracts or engagements of Participant or his or her successors in interest nor shall they be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect.
2.3    Rights as Stockholder.  Neither Participant nor any person claiming under or through Participant shall have any of the rights or privileges of a stockholder of the Company in respect of any Shares issuable hereunder unless and until certificates representing such Shares (which may be in book-entry form) 

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shall have been issued and recorded on the books and records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account).   No adjustment will be made for a dividend or other right for which the record date is prior to the date of such issuance, recordation and delivery, except as provided in Article 12 of the Plan. After such issuance, recordation and delivery, Participant shall have all the rights of a stockholder of the Company, including with respect to the right to vote the Shares and the right to receive any cash or share dividends or other distributions paid to or made with respect to the Shares. 
2.4    Adjustments.  Participant acknowledges that the PSU Award, including the vesting of the PSU Award and the number of Shares subject to the PSU Award, is subject to adjustment in the discretion of the Administrator upon the occurrence of certain events as provided in this Agreement and Article 12 of the Plan.
2.5    Not a Contract of Employment or other Service Relationship.  Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of the Company or any of its Affiliates.  Participant understands and agrees that this PSU Award does not alter the at-will nature of his or her employment relationship with the Company and is not a promise of continued employment for the vesting period of the PSU Award or any portion of it.
2.6    Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the PSUs and the Dividend Equivalents are granted and may be settled, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, the Plan, the Grant Notice and this Agreement shall be deemed amended to the extent necessary to conform to Applicable Law.
2.7    Amendment, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator, provided, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall impair any rights or obligations under this Agreement in any material way without the prior written consent of Participant.
2.8    Notices.  Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company’s principal office, and any notice to be given to Participant shall be addressed to Participant (or if Participant is then deceased, to Participant’s estate) at Participant’s last address reflected on the Company’s records. By a notice given pursuant to this Section 2.8, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email (if to Participant) or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.
2.9    Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
2.10    Section 409A.  

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(a)    Notwithstanding any other provision of the Plan, this Agreement or the Grant Notice, the Plan, this Agreement and the Grant Notice shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Grant Date, “Section 409A”).  The Administrator may, in its discretion, adopt such amendments to the Plan, this Agreement or the Grant Notice or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate to comply with the requirements of Section 409A.  
(b)    This Agreement is not intended to provide for any deferral of compensation subject to Section 409A of the Code, and, accordingly, the Shares and cash issuable pursuant to the PSUs and the Dividend Equivalents hereunder shall be distributed to Participant no later than the later of:  (i) the fifteenth (15th) day of the third month following Participant’s first taxable year in which such PSUs and Dividend Equivalents are no longer subject to a substantial risk of forfeiture, and (ii) the fifteenth (15th) day of the third month following first taxable year of the Company in which such PSUs and Dividend Equivalents are no longer subject to substantial risk of forfeiture, as determined in accordance with Section 409A and any Treasury Regulations and other guidance issued thereunder. 
(c)    For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payment that Participant may be eligible to receive under this Agreement shall be treated as a separate and distinct payment. 
2.11    Tax Representations.  Participant has reviewed with Participant’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by the Grant Notice and this Agreement.  Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Participant understands that Participant (and not the Company) shall be responsible for Participant’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. 
2.12    Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
2.13    Governing Law; Severability.  The laws of the State of Maryland shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.
2.14    Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the PSUs, the Dividend Equivalents, the Plan and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
2.15    Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.  

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2.16    Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the PSUs and the Dividend Equivalents, and rights no greater than the right to receive the Common Stock as a general unsecured creditor.
2.17    Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.
2.18    Paperless Administration.  By accepting this PSU Award, Participant hereby agrees to receive documentation related to the PSU Award by electronic delivery, such as a system using an internet website or interactive voice response, maintained by the Company or a third party designated by the Company.
2.19    Broker-Assisted Sales.  In the event of any broker-assisted sale of shares of Common Stock in connection with the payment of withholding taxes as provided in Section 1.2(a)(iii) or (v): (a) any shares of Common Stock to be sold through a broker-assisted sale will be sold on the day the tax withholding obligation or arises, or as soon thereafter as practicable; (b) such shares of Common Stock may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (c) Participant will be responsible for all broker’s fees and other costs of sale, and Participant agrees to indemnify and hold the Company and its Affiliates harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the proceeds of such sale exceed the applicable tax withholding obligation or exercise price, the Company agrees to pay such excess in cash to Participant as soon as reasonably practicable; (e) Participant acknowledges that the Company or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable tax withholding obligation or exercise price; and (f) in the event the proceeds of such sale are insufficient to satisfy the applicable tax withholding obligation, Participant agrees to pay immediately upon demand to the Company or its Affiliates with respect to which the withholding obligation arises, an amount sufficient to satisfy any remaining portion of the Company’s or the applicable Affiliate’s withholding obligation.
2.20    No Right to Continued Service.  PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE PSU AWARD PURSUANT TO SECTION 1.1 HEREOF IS EARNED ONLY BY CONTINUING SERVICE TO THE COMPANY AND ITS AFFILIATES AS AN “AT WILL” EMPLOYEE OR CONSULTANT OF THE COMPANY OR ONE OF ITS AFFILIATES OR A DIRECTOR OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED OR ACQUIRING SHARES HEREUNDER).  PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE, CONSULTANT OR DIRECTOR FOR SUCH PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH THE COMPANY’S OR ANY OF ITS AFFILIATES’ RIGHT TO TERMINATE PARTICIPANT’S EMPLOYMENT OR SERVICE TO THE COMPANY OR SUCH AFFILIATE AT ANY TIME, WITH OR WITHOUT CAUSE.

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EXHIBIT B
TO PERFORMANCE STOCK UNIT AWARD GRANT NOTICE
VESTING SCHEDULE
Capitalized terms used in this Exhibit B and not defined in Section 3 below shall have the meanings given them in the Agreement to which this Exhibit B is attached.
1.Performance Vesting. The PSUs shall vest based on the Company’s Relative TSR Ranking (as defined below) and Core FFO (as defined below) for the Performance Period (as defined below).  Subject to Section 1(c) below, Participant must remain continuously employed with or providing services to the Company or its Affiliates from the Grant Date until the Measurement Date, in order to be eligible to vest in the PSUs pursuant to this Section 1.
(a)    Vesting in the Event the Measurement Date is December 31, ________.  In the event the Measurement Date is December 31, _______, such number of PSUs shall vest on the Certification Date as is determined as follows:
(i)    Relative TSR Ranking.  Such number of PSUs shall vest on the Certification Date based on the Company’s Relative TSR Ranking for the TSR Performance Period as is determined by multiplying (i) fifty percent (50%) by (ii) the Target Number of PSUs set forth in the Grant Notice, by (iii) the TSR Performance Multiplier (as determined below) as of the Measurement Date (rounded to the nearest whole PSU).  The “TSR Performance Multiplier” means, for the Performance Period, the performance multiplier determined pursuant to the chart below based on the Company’s Relative TSR Ranking relative to the Peer Companies in the MSCI US REIT Index for the Performance Period.  If the Company achieves a Relative TSR Ranking that falls between the following levels, the Performance Multiplier will be determined by linear interpolation between the applicable levels.
	
		
	

Relative TSR Ranking Relative to the MSCI US REIT Index for the Performance Period

	

TSR Performance Multiplier

	At or above the 75th Percentile 
	200%

	Below the 75th Percentile and above the 50th Percentile 
	Determined by linear interpolation

	At the 50th Percentile 
	100%

	Below the 50th Percentile and above the 25th Percentile 
	Determined by linear interpolation

	At the 25th Percentile 
	50%

	Below the 25th Percentile 
	0%

(ii)    Core FFO.  Such number of PSUs shall vest on the Certification Date based on the Company’s Core FFO for the FFO Performance Period as is determined by multiplying (i) fifty (50%) by (ii) the Target Number of PSUs set forth in the Grant Notice, by (iii) the Core FFO Performance Multiplier (as determined below) as of the Measurement Date (rounded to the nearest whole PSU). The “Core FFO Performance Multiplier” means, for the FFO Performance Period, the performance multiplier determined pursuant to the chart below based on the aggregate sum of the Company’s Core FFO as determined on each of the three FFO Performance Periods.  If the Company achieves Core FFO that falls between the following levels, the Performance Multiplier will be determined by linear interpolation between the applicable levels.

B-1

	
		
	

Aggregate Core FFO for each of the Performance Periods

	

Core FFO Performance Multiplier

	At or above $___
	200%

	Above $__ and below $__
	Determined by linear interpolation

	At $___
	100%

	Above $___ and below $___
	Determined by linear interpolation

	At or below $___
	0%

 (b)    Vesting in the Event the Measurement Date is the Date of a Change in Control.  Notwithstanding the foregoing, in the event the Measurement Date is the date of a Change in Control, such number of PSUs shall vest on the Measurement Date as is equal the greater of (i) the Target Number of PSUs set forth in the Grant Notice, or (ii) the number of PSUs that would vest pursuant to the provisions of Section 1(a) above as a result of the application of the provisions of such section to the shortened Performance Period ending on the date of such Change in Control, as determined by the Administrator and certified in writing as of the date of such Change in Control; provided, however, that, in determining the Core FFO Performance Multiplier for the Performance Period, the Company’s Core FFO for the Performance Period shall be measured against prorated Core FFO objectives determined by multiplying the Core FFO targets set forth in Section 1(a)(ii) above by a fraction (not to exceed one) (A) the numerator of which shall be equal to the number of days elapsed from the first day of the Performance Period until the date of the Change in Control, and (b) the denominator of which shall be three-hundred sixty-five (365).

(c)    Effect of Termination Due to Death or Disability Prior to Measurement Date.  In the event of Participant’s Termination of Service as a result of Participant’s death or Disability prior to the Measurement Date, on the date of Participant’s Termination of Service, Participant shall vest in such number of PSUs as is equal to (i) the Target Number of PSUs set forth in the Grant Notice, multiplied by (ii) a fraction (not to exceed one) (A) the numerator of which shall be equal to the number of days elapsed from the first day of the Performance Period until the date of Participant’s Termination of Service, and (b) the denominator of which shall be three-hundred sixty-five (365); provided, however, that the Administrator shall have the discretion to allow 100% of the Target Number of PSUs set forth in the Grant Notice to vest on the date of Participant’s Termination of Service.
(d)    Maximum PSUs.  In no event will more than the Maximum Number of PSUs set forth in the Grant Notice vest pursuant to this Exhibit B.
2.Forfeiture.  Any portion of the PSUs which do not vest as a result of the Company’s Relative TSR Ranking and/or Core FFO for the Performance Period being below the threshold for vesting set forth above shall automatically and without further action be cancelled and forfeited by Participant, and Participant shall have no further right or interest in or with respect to such PSUs or any related Dividend Equivalents.  In addition, subject to Section 1(c), in the event that Participant experiences a Termination of Service for any reason (other than as a result of Participant’s Disability or death) prior to the Measurement Date, then the PSUs and any related Dividend Equivalents shall automatically and without further action be cancelled and forfeited by Participant, and Participant shall have no further right or interest in or with respect to such PSUs or any related Dividend Equivalents. 

B-2

3.    Definitions.  For purposes of this Exhibit B, the following terms shall have the meanings given below:
a. “Beginning Market Value” means the Market Value based on the last trading day prior to the beginning of the Performance Period.

(a)“Certification Date” means, in the event the Measurement Date is December 31, ___, the date on which the Administrator certifies the TSR Performance Multiplier and Core FFO Performance Multiplier for the Performance Period, which certification shall occur no later than March 1, ___; provided, however, that in the event of a Change in Control after December 31, ____, the Certification Date shall occur no later than the date of such Change in Control. 
a.    “Core FFO” means the Company’s funds from operations as adjusted to exclude revenues and expenses not core to the Company’s operations, costs associated with acquisitions and non-cash interest, as calculated in accordance with the standards established by the National Association of Real Estate Investment Trusts and in a manner generally consistent with the Core FFO calculations set forth in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and/or any supplemental information filed in connection therewith.
b.    “Disability” shall mean the absence of Participant from Participant’s duties with the Company on a full-time basis for ninety (90) consecutive days or on a total of one hundred eighty (180) days in any twelve (12) month period, in either case as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company and reasonably acceptable to Participant or Participant’s legal representative.
c.     “Ending Market Value” means the Market Value based on the last trading day of the Performance Period; provided, however, that in the event that the Measurement Date is the date of a Change in Control, the Ending Market Value of the Common Stock shall mean the price per share of Common Stock paid by the acquiror in the Change in Control.
d.    “FFO Performance Period” means each of (i) January 1, ___ through December 31, ____, (ii) January 1, ____ through December 31, ______ and (iii) January 1, ______ through December 31, ____.
e.     “Market Value” means the closing price per share of Common Stock (or per share of common stock of a Peer Company, as applicable) for the date of determination as reported by the NYSE or such other authoritative source as the Administrator may determine.  
f.    “Measurement Date” means the first to occur of (a) December 31, ___, or (b) the date on which a Change in Control occurs.  

g.    “Peer Companies” means, for the MSCI US REIT Index for a Performance Period, the companies included in the MSCI US REIT Index on both the first day of the applicable Performance Period and the last day of the applicable Performance Period.

h.    “Relative TSR Ranking” means the Company’s TSR relative to the TSRs of the Peer Companies in the MSCI US REIT Index for the Performance Period.  The Company’s Relative TSR Ranking will be determined by ranking the Company and the Peer Companies in the MSCI US REIT Index from highest to lowest according to their respective TSRs for the Performance Period.  After this ranking, 

B-3

the percentile performance of the Company relative to the Peer Companies in the MSCI US REIT Index will be determined as follows:

P = 1 – ((R-1)/(N-1))
Where:     “P” represents the Company’s percentile performance, which will be rounded, if necessary, to the nearest whole percentile by application of regular rounding.
“N” represents the number of Peer Companies in the MSCI US REIT Index, plus the Company.
“R” represents the Company’s ranking among the Peer Companies in the MSCI US REIT Index.
(b)“Performance Period” means the TSR Performance Period and the FFO Performance Period.
a.    “TSR” means, with respect to the Performance Period, the total value delivered to stockholders of the Company (or of a Peer Company, as applicable), as measured by the change in the price of the Common Stock of the Company (or common stock of a Peer Company, as applicable) over such Performance Period (positive or negative) from the Beginning Market Value for such Performance Period to the Ending Market Value for such Performance Period, plus dividends paid over the Performance Period assuming dividends are reinvested based on the price of the Common Stock of the Company (or common stock of a Peer Company, as applicable) on the last trading day of the month during which the ex-dividend date occurs.  Additionally, as set forth in, and pursuant to, Section 2.4 of the Agreement, appropriate adjustments to the TSR of the Company (or of a Peer Company, as applicable) shall be made to take into account all stock dividends, stock splits, reverse stock splits and the other events set forth in Section 2.4 of the Agreement that occur prior to the Measurement Date.

(c)“TSR Performance Period” means the period beginning on January 1, ______  and ending on the Measurement Date.

B-4Exhibit

Exhibit 4.12

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
As of December 31, 2019, Telephone and Data Systems, Inc. has five classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): (1) our Common Stock; (2) our 6.625% Senior Notes due 2045; (3) our 6.875% Senior Notes due 2059; (4) our 7.000% Senior Notes due 2060; and (5) our 5.875% Senior Notes due 2061.
Description of Common Stock
The following description of our Common Stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Restated Certificate of Incorporation (the “Certificate of Incorporation”) and our Restated Bylaws, as amended (the “Bylaws”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.12 is a part. We encourage you to read our Certificate of Incorporation, our Bylaws and the applicable provisions of Delaware General Corporation Law, as amended, for additional information.
Authorized Capital Shares
Our authorized capital shares consist of 265,000,000 shares of common stock, $0.01 par value per share (“Common Stock”), 25,000,000 shares of series A common stock, $0.01 par value per share (“Series A Stock”), 4,720,599 shares of undesignated stock, $0.01 par value per share (“Undesignated Stock”) and 279,401 shares of series preferred stock, $0.01 par value per share (“Preferred Stock”). The outstanding shares of our Common Stock are fully paid and nonassessable.
Voting Rights
In the election of directors, holders of Common Stock have one vote per share and vote in the election of 25% of the total number of directors for the TDS Board of Directors rounded up to the next whole number. The holders of Series A Stock elect the remaining directors.
In matters other than the election of directors, the per share voting power of the Common Stock varies and is calculated in accordance with Section B.9. of Article IV of the Certificate of Incorporation.  In matters other than the election of directors, the per share voting power of the Series Stock is ten votes per share.
In addition, the TDS Voting Trust controls a majority of the voting power of TDS in matters other than the election of certain directors. In general, only the affirmative vote of the TDS Voting Trust will be required to amend the TDS Restated Certificate of Incorporation, approve the sale of substantially all of the assets of TDS, approve the dissolution of TDS or approve any other matter required to be voted on by shareholders, except as required under the TDS Restated Certificate of Incorporation or the Delaware General Corporation Law. Certain matters on which shareholders would vote could involve a divergence or the appearance of a divergence of the interests between the holders of classes of common stock. Holders of Common Stock would not have a class vote in such matters except as required by law. 
The merger or consolidation of TDS requires the approval of a majority of the voting power of Common Stock and Series A Stock, each voting separately as a class.
In matter other than the election of directors, the aggregate voting percentage of Series A Stock cannot increase above approximately 56.7% and the percentage could decrease because of the conversion of Series A Stock to Common Stock.
Our Common Stock does not have cumulative voting rights.
Dividend Rights
Subject to the rights of holders of outstanding shares of Preferred Stock or Undesignated Stock, if any, the holders of Common Stock are entitled to receive dividends, if any, as may be declared from time to time by the Board of Directors in its discretion out of funds legally available for the payment of dividends.
Liquidation Rights
Subject to any preferential rights of outstanding shares of Preferred Stock or Undesignated Stock, if any, holders of Common Stock and Series A Stock will share ratably in all assets legally available for distribution to our stockholders in the event of dissolution.

Other Rights and Preferences
Our Common Stock has no sinking fund provisions or preemptive, conversion or exchange rights. 
Our Common Stock may be subject to redemption if, in the judgment of the Board such action is necessary to prevent the loss or secure the reinstatement of any license of franchise from any governmental agency held by TDS or any of its subsidiaries.  The redemption price is the fair market value of such Common Stock as calculated in accordance with Section B.11. of Article IV of the Certificate of Incorporation.
Holders of Common Stock may act by written consent if shares representing not less than 90% of the voting power of the shares that would be necessary to authorize or take such action at a meeting at which all shares of capital stock of TDS entitled to vote thereon were present and voted. 
Limitations on Rights of Holders of Common Stock - Preferred Stock and Undesignated Stock
The rights of holders of Common Stock may be materially limited or qualified by the rights of holders of Preferred Stock and Undesignated Stock that we may issue in the future. 
The Board may, without further shareholder action, authorize the issuance of up to 4,720,599 of Undesignated Stock into common or preferred shares, in one or more classes or series, and to fix the designations, relative rights, preferences and limitations, including the dividend rate, redemption and sinking fund provisions, liquidation preferences, conversion rights and voting rights of each class or series.
Anti-Takeover Effects of Certain Provisions of Delaware Law
We are subject to the provisions of Section 203 of the Delaware General Corporation Law (“Delaware Section 203”). In general, the law prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date the person became an interested stockholder, unless:
		
	•
	prior to such date, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

		
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	upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding certain shares described in Delaware Section 203); or

		
	•
	on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the “interested stockholder.”

Under Delaware Section 203, “Business combination” includes mergers, consolidations, asset sales and certain other transactions resulting in a financial benefit to a stockholder. An “interested stockholder” is defined generally as a person who, together with affiliates and associates, owns (or, within the prior three years, did own) 15% or more of a corporation’s voting stock. Our Certificate of Incorporation does not exclude us from the restrictions imposed under Delaware Section 203 and Delaware Section 203 could prohibit or delay the accomplishment of mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us.
Limitation of Liability
Our Certificate of Incorporation provides that, to the full extent authorized by the Delaware General Corporation Law, directors of TDS will not be personally liable to the TDS or its shareholders for monetary damages for breach of fiduciary duty as a director.
Listing
The Common Stock is traded on The New York Stock Exchange under the trading symbol “TDS.”

Description of the Notes
The following description of our 6.625% Senior Notes due 2045 (the “2045 Notes”), our 6.875% Senior Notes due 2059 (the “2059 Notes”), our 7.000% Senior Notes due 2060 (the “2060 Notes”), and our 5.875% Senior Notes due 2061 (the “2061 Notes” and, together with our 2045 Notes, 2059 Notes and 2060 Notes, the “notes”), is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the Indenture for Senior Debt Securities between TDS and The Bank of New York Mellon Trust Company, N.A. (the “Trustee”), formerly known as The Bank of New York Trust Company, N.A., as successor to BNY Midwest Trust Company (BNY) dated November 1, 2001 (the “Base Indenture”), as supplemented in the case of the 2045 Notes by the third supplemental indenture dated March 31, 2005, as supplemented in the case of the 2059 Notes by the fourth supplemental indenture dated November 16, 2010, as supplemented in the case of the 2060 Notes by the  fifth supplemental indenture dated March 21, 2011, and as supplemented in the case of the 2061 Notes by the sixth supplemental indenture dated November 26, 2012 (the Base Indenture, as supplemented by the third, fourth, fifth and sixth supplemental indentures, the “indenture”), which are incorporated by reference as exhibits to the Annual Report on Form 10-K of which this Exhibit 4.12 is a part. The 2045 Notes, the 2059 Notes, the 2060 Notes and the 2061 Notes are each traded on The New York Stock Exchange under the trading symbols of “TDI,” “TDE,” “TDJ” and “TDA,” respectively.
We encourage you to read the above referenced indenture, as supplemented, for additional information.
 
General
The following is a description of certain of the specific terms and conditions of the indenture supplements with respect to each of the notes.
The 2045 Notes were issued in an aggregate principal amount of $116,250,000, which remains the aggregate principal amount outstanding.  The 2059 Notes were issued in an aggregate principal amount of $225,000,000, which remains the aggregate principal amount outstanding.  The 2060 Notes were issued in an aggregate principal amount of $300,000,000, which remains the aggregate principal amount outstanding.  The 2061 Notes were issued in an aggregate principal amount of $195,000,000, which remains the aggregate principal amount outstanding.
The notes are senior unsecured obligations and rank equally with our other unsecured and unsubordinated debt from time to time outstanding.  However, in certain circumstances the notes, other than the 2045 Notes, may become effectively subordinated to the claims of the of the holders of the 2045 Notes which have the benefit of covenants limiting secured debt and sale and leaseback transactions similar to, but more restrictive than, the limitations on secured debt and sale and leaseback transactions in the other notes.  In the event TDS incurs secured debt or enters into a sale and leaseback transaction that is excepted from the covenant protection provided to the holders of the notes but not the 2045 Notes, the notes (other than the 2045 Notes) may become effectively subordinated to the claims of the holders of the 2045 Notes up to the value of the assets subject to the lien or sale and leaseback transaction In addition, because TDS is a holding company which conducts substantially all of its operations through subsidiaries, the right of creditors of TDS, including the holders of the notes, to participate in any distribution of the assets of any subsidiary upon its liquidation or reorganization or otherwise is subject to the prior claims of creditors of the subsidiary, except to the extent that claims of TDS itself as a creditor of the subsidiary may be recognized.  As of December 31, 2019, our subsidiaries had approximately $1,552 million of long-term debt.
The maturity date of the 2045 Notes is March 31, 2045.  The maturity date of the 2059 Notes is November 15, 2059.  The maturity date of the 2060 Notes is March 15, 2060.  The maturity date of the 2061 Notes is December 1, 2061.
The notes will be subject to legal defeasance and covenant defeasance as provided under the “Discharge, Defeasance and Covenant Defeasance” section set forth below.
The notes were issued in a form of one or more fully registered global securities, without coupons, in the name of a nominee of The Depository Trust Company (the “Depositary”), in denominations of $25.
TDS may redeem the notes, in whole or in party, at any time at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date. TDS is not required to establish a sinking fund prior to redemption.
The Base Indenture does not limit the amount of debt securities that we may issue under the Base Indenture and provides that debt securities may be issued from time to time in one or more series.

Interest and Principal
The 2045 Notes bear interest at a fixed rate of 6.625% per annum and interest is paid quarterly on March 31, June 30, September 30 and December 31 of each year until maturity.  The 2059 Notes bear interest at a fixed rate of 6.875% per annum and interest is paid quarterly on February 15, May 15, August 15 and November 15 of each year until maturity. The 2060 Notes bear interest at a fixed rate of 7% per annum and interest is paid quarterly on March 15, June 15, September 15 and December 15 of each year until maturity.  The 2061 Notes bear interest at a fixed rate of 5.875% per annum and interest is paid quarterly on March 1, June 1, September 1 and December 1 of each year until maturity.   Each of the above dates is referred to as an “interest payment date”. We will pay interest on the notes to the persons in whose names the notes are registered at the close of business on the day immediately preceding the related interest payment date. Interest on the notes will be computed on the basis of twelve 30-day months and a 360-day year.  If any interest payment date falls on a Saturday, Sunday, legal holiday or a day on which banking institutions in the City of New York are authorized by law to close, then payment of interest will be made on the next succeeding business day and no additional interest will accrue because of the delayed payment, except that, if such business day is in the next succeeding calendar year, such payment will be made on the immediately preceding business day, with the same force and effect as if made on such date.
 
Optional Redemption
At any time prior to the maturity date of the notes, we will have the right at our option to redeem the notes, in whole or in part, at any time or from time to time, on at least 30 days’ but not more than 60 days’ prior notice, at a redemption price, calculated by us, equal to 100% of the principal amount redeemed plus accrued and unpaid interest to the redemption date.  The notes are not subject to any sinking fund provision. 
Book-Entry and Settlement
The notes were issued in book-entry form through the facilities of the Depositary.  Book-entry debt securities represented by a global security are not be exchangeable for certificated notes and will not otherwise be issuable as certificated notes.
Beneficial interests in the global securities are represented, and transfers of such beneficial interest are effected, through accounts of the Depositary acting on behalf of beneficial owners as direct or indirect participants.
Beneficial interests in the global securities will be shown on, and transfers of beneficial interests in the global securities are made only through, records maintained by the Depositary. 
So long as the Depositary or its nominee is the registered owner of the global security, the Depositary or its nominee will be considered the sole owner or holder of the notes represented by such global security for all purposes under the notes and the Base Indenture and supplemental indenture pursuant to which the notes were issued. Except as provided below or as we may otherwise agree in our sole discretion, owners of beneficial interests in a global security will not be entitled to have notes represented by the global security registered in their names, will not receive or be entitled to receive physical delivery of notes in definitive form and will not be considered the owners or holders thereof under the Base Indenture or supplemental indenture pursuant to which the notes were issued.  Accordingly, each person owning a beneficial interest in the global security must rely on the procedures of the Depositary and, if that person is not a participant, on the procedures of the participant through which that person owns its interest, to exercise any rights of a holder under the Base Indenture or supplemental indenture.  Principal and interest payments on notes registered in the name of the Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner of the global security representing such notes. None of TDS, the Trustee, any paying agent or the registrar for the Notes will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in such global security for such notes or for maintaining, supervising or reviewing any records relating to such beneficial interests.
Trustee, Paying Agents and Security Registrar
The Bank of New York Mellon Trust Company, N.A. is the trustee under the indentures governing the notes. The Trustee is a national banking association organized under and governed by the laws of the United States of America, and provides trust services and acts as indenture trustee for numerous corporate securities issuances, including for other series of debt securities of which we are the issuer. The Trustee is an affiliate of The Bank of New York Mellon Corp., which is one of a number of banks with which TDS and its subsidiaries maintain ordinary banking relationships including, in certain cases, credit facilities. In connection therewith, we utilize or may utilize some of the banking and other services offered by The Bank of New York Mellon Corp. or its affiliates, including The Bank of New York Mellon Trust Company, N.A., in the normal course of business, including securities custody services.

Base Indenture Provisions:
 
Governing Law
The Base Indenture and the notes are governed by, and construed in accordance with, the laws of the State of Illinois.
Modification of the Indenture
With the Consent of Security holders. The Base Indenture contains provisions permitting TDS and the Trustee, with the consent of the holders of not less than a majority in principal amount of debt securities of each series that are affected by the modification, to modify the Base Indenture or any supplemental indenture affecting that series or the rights of the holders of that series of debt securities.
However, no such modification, without the consent of the holder of each outstanding security affected thereby, may:
		
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	extend the fixed maturity of any debt securities of any series;

		
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	reduce the principal amount of any debt securities of any series;

		
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	reduce the rate or extend the time of payment of interest on any debt securities of any series;

		
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	reduce any premium payable upon the redemption of any debt securities of any series;

		
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	reduce the amount of the principal of a discount security that would be due and payable upon a declaration of acceleration of the maturity of any debt securities of any series;

		
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	reduce the percentage of holders of aggregate principal amount of debt securities which are required to consent to any such supplemental indenture; or

		
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	reduce the percentage of holders of aggregate principal amount of debt securities which are required to waive any default and its consequences.

Without the Consent of Security holders. In addition, TDS and the Trustee may execute, without the consent of any holder of debt securities, any supplemental indenture for certain other usual purposes, including:
		
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	to evidence the succession of another person to TDS or a successor to TDS, and the assumption by any such successor of the covenants of TDS contained in the Base Indenture or otherwise established with respect to the debt securities;

		
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	to add to the covenants of TDS further covenants, restrictions, conditions or provisions for the protection of the holders of the debt securities of all or any series, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions, conditions or provisions a default or an Event of Default, as described below, with respect to such series permitting the enforcement of all or any of the several remedies provided in the Indenture;

		
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	to cure any ambiguity or to correct or supplement any provision contained in the Base Indenture or in any supplemental indenture which may be defective or inconsistent with any other provision contained in the Indenture or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under the Indenture as are not inconsistent with the provisions of the Base Indenture and will not adversely affect the rights of the holders of the notes of any series which are outstanding in any material respect;

		
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	to change or eliminate any of the provisions of the Base Indenture or to add any new provision to the Base Indenture, except that such change, elimination or addition will become effective only as to debt securities issued pursuant to or subsequent to such supplemental indenture unless such change, elimination or addition does not adversely affect the rights of any security holder of outstanding debt securities in any material respect;

		
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	to establish the form or terms of debt securities of any series as permitted by the Indenture;

		
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	to add any additional Events of Default with respect to all or any series of outstanding debt securities;

		
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	to add guarantees with respect to debt securities or to release a guarantor from guarantees in accordance with the terms of the applicable series of debt securities;

		
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	to secure a series of debt securities by conveying, assigning, pledging or mortgaging property or assets to the Trustee as collateral security for such series of debt securities;

		
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	to provide for uncertificated debt securities in addition to or in place of certificated debt securities;

		
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	to provide for the authentication and delivery of bearer debt securities and coupons representing interest, if any, on such debt securities, and for the procedures for the registration, exchange and replacement of such debt securities, and for the giving of notice to, and the solicitation of the vote or consent of, the holders of such debt securities, and for any other matters incidental thereto;

		
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	to evidence and provide for the acceptance of appointment by a separate or successor Trustee with respect to the debt securities and to add to or change any of the provisions of the Base Indenture as may be necessary to provide for or facilitate the administration of the trusts by more than one Trustee;

		
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	to change any place or places where:

		
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	the principal of and premium, if any, and interest, if any, on all or any series of debt securities will be payable,

		
	•
	all or any series of debt securities may be surrendered for registration of transfer,

		
	•
	all or any series of debt securities may be surrendered for exchange, and

		
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	notices and demands to or upon TDS in respect of all or any series of debt securities and the Base Indenture may be served, which must be located in New York, New York or be the principal office of TDS;

		
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	to provide for the payment by TDS of additional amounts in respect of certain taxes imposed on certain holders and for the treatment of such additional amounts as interest and for all matters incidental thereto;

		
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	to provide for the issuance of debt securities denominated in a currency other than dollars or in a composite currency and for all matters incidental thereto; or

		
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	to comply with any requirements of the SEC or the Trust Indenture Act of 1939, as amended.

Consolidation, Merger and Sale of Assets
The Base Indenture does not contain any covenant that restricts our ability to merge or consolidate with or into any other corporation, sell or convey all or substantially all of our assets to any person, firm or corporation or otherwise engage in restructuring transactions.  
 
Events of Default
The Base Indenture provides that any one or more of the following described events, which has occurred and is continuing, constitutes an ‘‘Event of Default’’ with respect to each series of debt securities:
		
	•
	failure for 30 days to pay interest on debt securities of that series when due and payable; or

		
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	failure for three business days to pay principal or premium, if any, on debt securities of that series when due and payable whether at maturity, upon redemption, pursuant to any sinking fund obligation, by declaration or otherwise; or

		
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	failure by TDS to observe or perform any other covenant (other than those specifically relating to another series) contained in the Indenture for 90 days after written notice to TDS from the Trustee or the holders of at least 33% in principal amount of the outstanding debt securities of that series; or

		
	•
	certain events involving bankruptcy, insolvency or reorganization of TDS; or

		
	•
	any other event of default provided for in a series of debt securities.

Except as may otherwise be set forth in a prospectus supplement, the Trustee or the holders of not less than 33% in aggregate outstanding principal amount of any particular series of debt securities may declare the principal due and payable immediately upon an Event of Default with respect to such series. Holders of a majority in aggregate outstanding principal amount of such series may annul any such declaration and waive the default with respect to such series if the default has been cured and a sum sufficient to pay all matured installments of interest and principal otherwise than by acceleration and any premium has been deposited with the Trustee.
The holders of a majority in aggregate outstanding principal amount of any series of debt securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee for that series.
Subject to the provisions of the Base Indenture relating to the duties of the Trustee in case an Event of Default will occur and be continuing, the Trustee will be under no obligation to exercise any of its rights or powers under the Base Indenture at the request or direction of any of the holders of the debt securities, unless such holders will have offered to the Trustee indemnity satisfactory to it.

The holders of a majority in aggregate outstanding principal amount of any series of debt securities affected thereby may, on behalf of the holders of all debt securities of such series, waive any past default, except as discussed in the following paragraph.
The holders of a majority in aggregate outstanding principal amount of any series of debt securities affected thereby may not waive a default in the payment of principal, premium, if any, or interest when due otherwise than by
		
	•
	acceleration, unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal otherwise than by acceleration and any premium has been deposited with the Trustee; or

		
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	a call for redemption or any series of debt securities.

We are required to file annually with the trustee a certificate as to whether or not we are in compliance with all the conditions and covenants under the Base Indenture. 
 
Discharge, Defeasance and Covenant Defeasance
Debt securities of any series may be defeased in accordance with their terms and, unless the supplemental indenture or company order establishing the terms of such series otherwise provides, as set forth below.
We at any time may terminate as to a series our obligations with respect to the debt securities of that series under any restrictive covenant which may be applicable to that particular series, commonly known as ‘‘covenant defeasance.’’ All of our other obligations would continue to be applicable to such series.
We at any time may also terminate as to a series substantially all of our obligations with respect to the debt securities of such series and the Base Indenture, commonly known as ‘‘legal defeasance.’’ However, in legal defeasance, certain of our obligations would not be terminated, including our obligations with respect to the defeasance trust and obligations to register the transfer or exchange of a security, to replace destroyed, lost or stolen debt securities and to maintain agencies in respect of the debt securities.
We may exercise our legal defeasance option notwithstanding our prior exercise of any covenant defeasance option.
If we exercise a defeasance option, the particular series will not be accelerated because of an event that, prior to such defeasance, would have constituted an Event of Default.
To exercise either of our defeasance options as to a series, we must irrevocably deposit in trust with the Trustee or any paying agent money, certain eligible obligations as specified in the Base Indenture, or a combination thereof, in an amount sufficient to pay when due the principal of and premium, if any, and interest, if any, due and to become due on the debt securities of such series that are outstanding.
Such defeasance or discharge may occur only if, among other things, we have delivered to the Trustee an opinion of counsel stating that:
		
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	the holders of such debt securities will not recognize gain, loss or income for federal income tax purposes as a result of the satisfaction and discharge of the Base Indenture with respect to such series, and

		
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	that such holders will realize gain, loss or income on such debt securities, including payments of interest thereon, in the same amounts and in the same manner and at the same time as would have been the case if such satisfaction and discharge had not occurred.

The amount of money and eligible obligations on deposit with the Trustee may not be sufficient to pay amounts due on the debt securities of that series at the time of an acceleration resulting from an Event of Default if:
		
	•
	we exercise our option to effect a covenant defeasance with respect to the debt securities of any series, and

		
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	the debt securities of that series are thereafter declared due and payable because of the occurrence of any Event of Default.

In such event, we would remain liable for such payments.

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