Form 4: TDS Vice Chair Carlson Awarded Restricted Stock and Performance Share Units

Leroy T. Carlson Jr., Vice Chair of Telephone & Data Systems Inc., receives restricted stock units and performance share units under the company's 2022 Long Term Incentive Plan.

Summary

• Leroy T. Carlson Jr., Vice Chair of Telephone & Data Systems Inc. (TDS), was granted restricted stock units and performance share units on May 21, 2025.
• The restricted stock units total 14,883 and will vest in three equal installments annually from the grant date.
• The performance share units total 5,307 and are based on the performance of three key metrics.
• One performance metric, representing 32% of the total award, is tied to UScellular's performance and has a 75% floor, potentially increasing to 100% if the UScellular transaction with T-Mobile closes in 2025.
• The reported performance share units reflect the 75% floor, representing 24% of the target award.
• Additional performance share units will be reported if the UScellular transaction with T-Mobile closes in 2025.
• Performance share units accumulate dividend equivalents, which are forfeitable if performance metrics are not achieved.

Sentiment

Score: 7

Explanation: The document reflects a routine executive compensation event, indicating stability and alignment of management with company goals. The potential upside related to the UScellular transaction is a positive factor.

Positives

• The grant of restricted stock units and performance share units aligns executive compensation with company performance and shareholder value.
• The vesting schedule of the restricted stock units encourages long-term commitment from the executive.
• The performance-based nature of the share units incentivizes achievement of key strategic goals.
• The potential increase in performance share units based on the UScellular transaction with T-Mobile provides an additional incentive for successful deal completion.

Risks

• The performance share units are subject to forfeiture if the performance metrics are not achieved, potentially impacting executive compensation.
• The ultimate value of the performance share units is dependent on the company's performance and the successful completion of the UScellular transaction with T-Mobile.

Future Outlook

The number of performance share units may increase if the UScellular transaction with T-Mobile closes in 2025.

Industry Context

This filing reflects standard practice in executive compensation, utilizing equity-based awards to align management interests with shareholder value. The inclusion of performance-based metrics, particularly those tied to strategic transactions like the UScellular deal, is common in the telecommunications industry.

Comparison to Industry Standards

• Equity-based compensation is a common practice among publicly traded companies, including TDS's peers in the telecommunications industry.
• Companies like Verizon and AT&T also utilize restricted stock units and performance share units as part of their executive compensation packages.
• The vesting schedules and performance metrics used by TDS are generally in line with industry standards, although specific details may vary based on company-specific goals and strategies.

Stakeholder Impact

• Shareholders may view the equity-based compensation as a positive sign, aligning management interests with shareholder value.
• Employees may be motivated by the company's commitment to incentivizing its executives based on performance.
• The potential increase in performance share units tied to the UScellular transaction could impact stakeholders involved in the deal.

Next Steps

• One-third of the restricted stock units will vest on the first, second and third annual anniversaries of the Grant Date.
• Another Form 4 would be filed to reflect an increase in the floor to the extent the UScellular transaction with T-Mobile closes in 2025.

Key Dates

Keywords

restricted stock units, performance share units, executive compensation, TDS, Telephone & Data Systems, Carlson, UScellular, T-Mobile, incentive plan, equity