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August 7, 2009 Forum Report:

85% Vote in Support of Change

 

See also subsequent announcement:

August 11, 2009, Southeastern Asset Management, Inc., press release:

"Shareholders Demand Change at Telephone and Data Systems, Inc."

 

 

Forum Report: TDS

 

85% Vote in Support of Change

 

The detailed voting results of the TDS annual meeting in May were finally reported yesterday afternoon, included as a required disclosure in the company’s SEC Form 10Q quarterly filing.[1] The full section is copied below.

The shareholder proposal for recapitalization, presented by Southeastern Asset Management for the stated purpose of testing support for management response to public investor interests, received 85.16% of the non-management votes (assuming the management-controlled votes were cast against the proposal, according to the management recommendation in the company’s proxy statement). Even if both management and Southeastern votes are excluded from the count, assuming they each voted their publicly stated positions, the remaining count of public shareholders was 84.14% in support of change.[2]

As those of you who follow shareholder vote counts know, 85% support for a proposal opposed by management is extraordinary, and an exceptionally clear expression of investor interests. The Forum will be developing plans accordingly to address two distinct but interdependent requirements of fair shareholder value realization:

►    Assuring management responsibility for the interests of all the company’s shareholders, instead of only the interests of its controlling shareholder

►    Defining alternatives for sound value enhancement, including the identification of opportunities for strategic relationships

The vote also demonstrated strong appreciation of Southeastern’s leadership, and of all the other Forum participants who offered their views.  With this encouragement, I will welcome your further views now to guide the TDS program’s continuing progress.

GL – August 7, 2009

 

Gary Lutin

Lutin & Company

575 Madison Avenue, 10th Floor

New York, New York 10022

Tel: 212-605-0335

Email: gl@shareholderforum.com

 

[2] Of the total 108,646,021 votes cast for and against the Southeastern proposal, it is assumed that management opposed the proposal with the 64,576,219 votes that they were reported to control in the company’s proxy statement. According to the same proxy statement, Southeastern at that time controlled only 2,840,948 votes, with the balance of the total 18,500,843 shares beneficially owned by them being either non-voting or with voting rights reserved by others.

 

 

 

August 6, 2009, Telephone and Data Systems: SEC Form 10Q, pages 71-72

 

 

Item 4.  Submission of Matters to a Vote of Security Holders.

 

At the Annual Meeting of Shareholders of TDS held on May 21, 2009, the following number of votes were cast for the matters indicated:

 

1.               Election of Directors:

 

a.               For the election of eight Directors of the Company by the holders of Series A Common Shares and Preferred Shares:

 

Nominee

 

For

 

Withhold

 

Broker
Non-vote

 

Outcome

 

LeRoy T. Carlson, Jr.

 

64,575,626

 

15

 

—

 

Elected

 

Letitia G. Carlson, M.D.

 

64,468,041

 

107,600

 

—

 

Elected

 

Prudence E. Carlson

 

64,468,041

 

107,600

 

—

 

Elected

 

Walter C.D. Carlson

 

64,575,626

 

15

 

—

 

Elected

 

Kenneth R. Meyers

 

63,887,566

 

688,075

 

—

 

Elected

 

Donald C. Nebergall

 

64,468,041

 

107,600

 

—

 

Elected

 

George W. Off

 

63,787,566

 

788,075

 

—

 

Elected

 

Mitchell H. Saranow

 

63,887,566

 

688,075

 

—

 

Elected

 

 

b.              For the election of four Directors of the Company by the holders of Common Shares and Special Common Shares:

 

Nominee

 

For

 

Withhold

 

Broker
Non-vote

 

Outcome

 

Clarence A. Davis

 

92,889,330

 

5,852,670

 

—

 

Elected

 

Christopher D. O’Leary

 

68,505,470

 

30,236,530

 

—

 

Elected

 

Gary L. Sugarman

 

92,751,130

 

5,990,870

 

—

 

Elected

 

Herbert S. Wander

 

82,106,313

 

16,635,687

 

—

 

Elected

 

 

2.               Proposal to Approve the Amended Non-Employee Director Compensation Plan by the holders of Series A Common Shares, Preferred Shares and Common Shares:

 

For

 

Against

 

Abstain

 

Broker
Non-vote

 

Outcome

 

106,193,980

 

2,189,938

 

475,416

 

2,745,119

 

Approved

 

 

3.               Proposal to Ratify the Selection of PricewaterhouseCoopers LLP as Independent Public Accountants for 2009 by the holders of Series A Common Shares, Preferred Shares and Common Shares:

 

For

 

Against

 

Abstain

 

Broker
Non-vote

 

Outcome

 

110,986,323

 

580,374

 

37,756

 

—

 

Approved

 

 

 

4.               Proposal by Shareholder to Recapitalize the TDS Capital Stock by the holders of Series A Common Shares, Preferred Shares and Common Shares:

 

Against

 

For

 

Abstain

 

Broker
Non-vote

 

Outcome

 

71,114,801

 

37,531,220

 

213,313

 

2,745,119

 

Defeated

 

 

A description of the terms of a settlement agreement between TDS and GAMCO Asset Management, Inc. terminating a solicitation subject to Rule 14a-12(c), including the cost to TDS, is included in TDS’ proxy statement for the Annual Meeting, which was filed with the SEC on April 28, 2009.

 

 

 

This Forum program is open to all shareholders of Telephone and Data Systems, Inc. (NYSE: TDS), and its controlled subsidiary, United States Cellular Corporation (NYSE: USM), and to any fiduciaries or professionals concerned with their investment decisions. Participation is free of charge, according to the Forum's standard Conditions of Participation.

The purpose of the Forum is to provide shareholders with access to information and a free exchange of views relating to their consideration of issues described in the Forum Summary. As stated in the Conditions, all Forum participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants. Forum polices are intended to support anonymous communication, and provide that participants will not be identified or quoted without their explicit permission.

The initiation of this program was supported by Southeastern Asset Management, Inc., which as manager of the Longleaf Partners Funds and other client funds is the largest TDS shareholder with common and special common stock aggregating more than 15% of the total of all classes outstanding. TDS has been invited to assume corporate responsibility for the costs of addressing issues of apparent significance to a broad range of its investors, according to the Forum's Conditions, and other participants may be invited to contribute support to the continuing program pending the company's acceptance of responsibility.

Inquiries and requests to be included in the Forum's distribution list may be addressed to tds@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.