19 slides from Telephone And Data Systems's proxy contest presentation, Nov 29, 2011
Slide 1: TDS Announces Revised Plan to Reclassify Special Common Shares
Contact: Jane W. McCahon, Vice President, Corporate Relations (312) 592-5379; jane.mccahon@teldta.com Julie D. Mathews, Manager, Investor Relations (312) 592-5341; julie.mathews@teldta.com FOR RELEASE: IMMEDIATE TDS ANNOUNCES REVISED PLAN TO RECLASSIFY SPECIAL COMMON SHARES AS COMMON SHARES Reclassi
Slide 2: Share Consolidation Amendment and Vote Amendment Revised Proposal
Share Consolidation Amendment and Vote Amendment Revised Proposal
Slide 3: Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this presentation, except historical and factual information, represents forward-looking statements. This in
Slide 4: Important Information
Important Information This presentation is not a solicitation of a proxy from any TDS shareholder. This is being done only pursuant to a definitive proxy statement, as supplemented. Additional information relating to the foregoing is included in TDS' proxy materials filed with the Securities and Exc
Slide 5: Capital Structure Challenges
Capital Structure Challenges Special Common Shares trade at a substantial discount to the Common Shares Economic dilution exists today from the issuance of Special Common Shares for compensation Due to discount, further dilution occurs when TDS issues Special Common Shares Complexity due to multiple
Slide 6: Transaction Rationale
Transaction Rationale Consolidate the public float and increase market liquidity Eliminate the pricing discrepancy between classes of common shares Increase financial flexibility and enhance ability to structure and execute equity-based transactions Reduce dilution that occurs when Special Common Sh
Slide 7: Original Plan to Improve Capital Structure
Original Plan to Improve Capital Structure Share Consolidation Amendment – reclassify outstanding Special Common Shares (NYSE: TDS.S) as Common Shares (NYSE: TDS) on a one-for-one basis Vote Amendment – a “vote freeze” would be set at the aggregate percentage voting power of the Series A Common Shar
Slide 8: Revised Plan to Improve Capital Structure
Revised Plan to Improve Capital Structure Share Consolidation Amendment Reclassification Ratio now: Each Common Share would be reclassified as 1.087 Common Shares Each Series A Common Share would be reclassified as 1.087 Series A Common Shares Each Special Common Share would be reclassified as one C
Slide 9: Revised Proposal Details
Revised Proposal Details The shares classes would be reclassified as follows: Each Common Share would be reclassified as 1.087 Common Shares Each Series A Share would be reclassified as 1.087 Series A Shares Each Special Common Share would be reclassified as one Common Share The vote freeze mechanis
Slide 10: Benefits of Revised Reclassification Ratio
Benefits of Revised Reclassification Ratio Recognizes historical average of the premiums of TDS to TDS.S from the time the Special Common Shares were issued to the announcement of the original proposal Maintains current number of shares held by, and level of dividends received by, Special Common sha
Slide 11: Factors Considered in Revised Reclassification Ratio
Factors Considered in Revised Reclassification Ratio Increase of 8.7% represents the historical average relationship of the Common to the Special Common Shares Total new shares to be issued: 4.9 million Percentage increase in total shares outstanding: 4.8% Approximate increase in total annual divide
Slide 12: Pro Forma Impact on Share Count, Dividends and Voting: Revised Proposal
Pro Forma Impact on Share Count, Dividends and Voting: Revised Proposal Pro Forma Impact on Share Count, Dividends and Voting: Revised Proposal CURRENT 9/30/11 Total Shares Outstanding Percent of Total Total Dividends Percent of Total Total Votes* Percent of Total SERIES A COMMON SPECIAL COMMON TOTA
Slide 13: Illustrative Voting Rights Situations: Revised Proposal
Illustrative Voting Rights Situations: Revised Proposal 12 (1) Voting trust acquired shares of Special Common Shares through dividends (2) Management is compensated with Special Common Shares, which they currently hold today Base Case (as of 9/30/2011) 10 Million Share Issuance Voting Trust Converts
Slide 14: Corporate Governance Process
Corporate Governance Process The revised proposal was unanimously approved by all TDS directors, including independent directors Citi is acting as a financial advisor to TDS in connection with the proposed amendments The independent directors were represented by their own financial advisor (Credit S
Slide 15: Revised Solution Accomplishes the Following
Revised Solution Accomplishes the Following Eliminates the difference in the market price of the Special Common Shares in relation to the Common Shares by reclassifying Special Common Shares as Common Shares Recognizes the historical average premium of Common Shares to Special Common Shares Consolid
Slide 16: Revised Solution Accomplishes the Following (cont.)
Revised Solution Accomplishes the Following (cont.) Allows for easier analysis and valuation of the single class of publicly traded common stock Increases the market recognition of the value of TDS Simplifies the TDS capital structure and reduces investor and employee confusion regarding two publicl
Slide 17: Timeline and Next Steps
Timeline and Next Steps New record date for the Adjourned Special Meeting is December 9, 2011 Adjourned Special Meeting will be held January 13, 2012 Shareholder vote mechanics will be the same as with original proposal Statutory class votes pursuant to Delaware law Voluntary ratification votes whic
Slide 18: Summary
Summary TDS management understands that it has other strategic, operational and structural opportunities and challenges Management, with the support of the Board, is working to address these with a sense of urgency Executing this revised share consolidation represents an important step toward improv
Slide 19: Share Consolidation Amendment and Vote Amendment Revised Proposal
Share Consolidation Amendment and Vote Amendment Revised Proposal