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For details and source references of the shareholder vote addressed in the announcement below, see

 

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

 

Shareholders Demand Change at Telephone and Data Systems, Inc.

prnewswire

 

Southeastern-led "One Share, One Vote" proposal receives support from holders of more than 80% of the independent shares voted, serves as referendum for more democratic voting structure and management accountability

 

Press Release

Source: Southeastern Asset Management, Inc.

On Tuesday August 11, 2009, 4:00 pm EDT

MEMPHIS, Tenn., Aug. 11 /PRNewswire/ -- Southeastern Asset Management, Inc. ("Southeastern"), investment advisor to Longleaf Partners Fund ("Longleaf"), announced today that the shareholder proposal it introduced at the annual meeting of Telephone and Data Systems, Inc. ("TDS" or the "Company") (NYSE: TDS) was successful, receiving support from holders of more than 80% of the non-aligned, independent shares voted on the proposal. "Independent shares" excludes the 6,359,982 Series A Common Shares owned by members of the Carlson family and other Company insiders per the Company's proxy statement, and 3,001,748 Common Shares beneficially owned by Southeastern as of the record date for the annual meeting. We assume that all Series A Common Shares were voted against the proposal.

"We are encouraged that independent shareholders have strongly supported our proposal to recapitalize the common equity structure of TDS, expressing their desire for a democratic corporate governance structure," said O. Mason Hawkins, chairman and chief executive officer, Southeastern. "This is an important step in holding TDS' management and the Board accountable to all shareholders so that management might finally begin to address TDS' strategic problems. While we recognize that the proposal was defeated by a straight vote, due to the disproportionate weight of the votes cast by the TDS Voting Trust relative to its much smaller economic stake in the Company, we firmly believe independent shareholders have sent the management and the Board a clear signal of dissatisfaction."

Southeastern made its proposal in light of management's demonstrated poor capital allocation, refusal to follow value-enhancing recommendations and its failure to disclose or pursue the premium bid for TDS from a well-resourced strategic acquirer offered in 2007. To date, management has refused to answer the questions Southeastern presented at the 2009 annual meeting regarding a long-term business plan that would be superior to the sale of the Company.

In its proposal Southeastern requested that TDS recapitalize the Company's common equity structure into one class of common stock to result in one vote per share for all outstanding common stock. The disparity inherent in the multi-class voting structure that favors the Carlson family has permitted the Company and its management to ignore the opinions of its public shareholders.

Public shareholders, including Southeastern, have repeatedly expressed their views with regard to the stewardship and strategic direction of TDS, including at Gary Lutin's Shareholder Forum, and through Glass Lewis' "Proxy Talk" conference call. Proxy advisory firm Glass Lewis subsequently recommended that shareholders vote for the proposal. And Lutin recently called the expression of shareholder support that Southeastern's proposal received, "extraordinary, and an exceptionally clear expression of investor interests."

More information about the issues can be found at The Shareholder Forum for Telephone and Data Systems, Inc.: www.shareholderforum.com/tds/.

ABOUT SOUTHEASTERN ASSET MANAGEMENT

Southeastern Asset Management, Inc., headquartered in Memphis, Tenn., is an investment management firm acting as investment advisor to institutional investors and the three Longleaf Partners Funds: Longleaf Partners Fund, Longleaf Partners Small-Cap Fund, and Longleaf Partners International Fund. Southeastern was established in 1975, and the first of the Longleaf Partners Funds was launched in 1987.

    Press Contact:
    Christina Stenson
    Brunswick Group
    212-333-3810

Copyright 2009 PR Newswire.

 

 

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.

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