TELEPHONE AND DATA SYSTEMS, INC. 2004 LONG-TERM INCENTIVE PLAN

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.1

Form of TDS Corporate Officer
TELEPHONE AND DATA SYSTEMS, INC.
2004 LONG-TERM INCENTIVE PLAN

[[YEAR]] STOCK OPTION AWARD

        Telephone and Data Systems, Inc., a Delaware corporation (the "Company"), hereby grants to [[PNAME]] (the "Optionee"), as of [[DATE]], pursuant to the provisions of the Telephone and Data Systems, Inc. 2004 Long-Term Incentive Plan (the "Plan"), a Non-Qualified Stock Option (the "Option") to purchase from the Company [[NUMBER]] shares of Common Stock at the price of $[[PRICE]] per share upon and subject to the terms and conditions set forth below. Capitalized terms not defined herein shall have the meanings specified in the Plan.

        1.    Time and Manner of Exercise of Option.    

        1.1.    Exercise of Option.    (a) In general.    The Option shall become exercisable in its entirety on December 15, [[CALENDAR YEAR OF OPTION DATE]]. In no event may the Option be exercised, in whole or in part, after [[TENTH ANNIVERSARY OF OPTION DATE]] (the "Expiration Date").

        (b)    Disability.    If the Optionee ceases to be employed by or of service to the Employers and Affiliates by reason of Disability, the Option shall be exercisable only to the extent it is exercisable on the effective date of the Optionee's termination of employment or service, and after such date may be exercised by the Optionee (or the Optionee's Legal Representative) for a period of 12 months after the effective date of the Optionee's termination of employment or service or until the Expiration Date, whichever period is shorter. If the Optionee shall die within such original exercise period, the Option shall be exercisable by the beneficiary or beneficiaries duly designated by the Optionee, to the same extent the Option was exercisable by the Optionee on the date of the Optionee's death, for a period ending on the later of (i) the last day of such original exercise period and (ii) 90 days after the date of the Optionee's death.

        (c)    Special Retirement.    If the Optionee ceases to be employed by or of service to the Employers and Affiliates by reason of Special Retirement (as defined below), the Option shall be exercisable only to the extent it is exercisable on the effective date of the Optionee's Special Retirement, and after such date may be exercised by the Optionee (or the Optionee's Legal Representative) for a period of 12 months after the effective date of the Special Retirement or until the Expiration Date, whichever period is shorter. If the Optionee shall die within such original exercise period, the Option shall be exercisable by the beneficiary or beneficiaries duly designated by the Optionee, to the same extent the Option was exercisable by the Optionee on the date of the Optionee's death, for a period ending on the later of (i) the last day of such original exercise period and (ii) 90 days after the date of the Optionee's death. For purposes of this Award, "Special Retirement" shall mean an Optionee's termination of employment or service with the Employers and Affiliates on or after the later of (i) the Optionee's attainment of age 62 and (ii) the Optionee's Early Retirement Date or Normal Retirement Date, as such terms are defined in the Telephone and Data Systems, Inc. Pension Plan.

        (d)    Retirement.    If the Optionee ceases to be employed by or of service to the Employers and Affiliates by reason of Retirement (as defined below), the Option shall be exercisable only to the extent it is exercisable on the effective date of the Optionee's Retirement, and after such date may be exercised by the Optionee (or the Optionee's Legal Representative) for a period of 90 days after the effective date of the Retirement or until the Expiration Date, whichever period is shorter. If the Optionee shall die within such original exercise period, the Option shall be exercisable by the beneficiary or beneficiaries duly designated by the Optionee, to the same extent the Option was exercisable by the Optionee on the date of the Optionee's death, for a period ending 180 days after the effective date of the Retirement. For purposes of this Award, "Retirement" shall mean an Optionee's termination of employment or service with the Employers and Affiliates on or after the Optionee's attainment of age 65 that does not satisfy the definition of "Special Retirement" set forth in Section 1.1(c).

        (e)    Resignation with Prior Consent of the Board.    If the Optionee ceases to be employed by or of service to the Employers and Affiliates by reason of the Optionee's resignation of employment or service at any age with the prior consent of the board of directors of such Optionee's Employer (as evidenced in the Employer's minute book), the Option shall be exercisable only to the extent it is exercisable on the effective date of the Optionee's resignation, and after such date may be exercised by the Optionee (or the Optionee's Legal Representative) for a period of 90 days after such effective date or until the Expiration Date, whichever

period is shorter. If the Optionee shall die within such original exercise period, the Option shall be exercisable by the beneficiary or beneficiaries duly designated by the Optionee, to the same extent the Option was exercisable by the Optionee on the date of the Optionee's death, for a period ending 180 days after the effective date of the Optionee's resignation.

        (f)    Death.    If the Optionee ceases to be employed by or of service to the Employers and Affiliates by reason of death, the Option shall be exercisable only to the extent it is exercisable on the date of death, and after the date of death may be exercised by the beneficiary or beneficiaries duly designated by the Optionee, for a period of 180 days after the date of death or until the Expiration Date, whichever period is shorter.

        (g)    Other Termination of Employment or Service.    If the Optionee ceases to be employed by or of service to the Employers and Affiliates for any reason other than Disability, Special Retirement, Retirement, resignation of employment or service with the prior consent of the board of directors of the Optionee's Employer (as evidenced in the Employer's minute book) or death, the Option shall be exercisable only to the extent it is exercisable on the effective date of the Optionee's termination of employment or service, and after such date may be exercised by the Optionee (or the Optionee's Legal Representative) for a period of 30 days after the effective date of the Optionee's termination of employment or service or until the Expiration Date, whichever period is shorter. If the Optionee shall die within such original exercise period, the Option shall be exercisable only to the extent it is exercisable on the date of death and after the date of death may be exercised by the beneficiary or beneficiaries duly designated by the Optionee for a period of 120 days after the date of death or until the Expiration Date, whichever period is shorter. Notwithstanding any provision in this Award to the contrary, if the Optionee ceases to be employed by or of service to the Employers and Affiliates on account of the Optionee's negligence, willful misconduct, competition with an Employer or other Affiliate or misappropriation of confidential information of an Employer or other Affiliate, the Option shall terminate on the date the Optionee's employment or service with the Employers and Affiliates terminates, unless such Option terminates earlier pursuant to Section 1.2.

        1.2.    Forfeiture of Option Upon Competition or Misappropriation of Confidential Information.    Notwithstanding any other provision herein, the Option granted pursuant to this Award shall not be exercisable on or after any date on which the Optionee enters into competition with an Employer or other Affiliate, or misappropriates confidential information of an Employer or other Affiliate, as determined by the Company in its sole discretion. As of the date of such competition or misappropriation, the Option granted pursuant to this Award automatically shall terminate and thereby be forfeited to the extent it has not been exercised. In the event of such competition or misappropriation, the Optionee shall pay the Company, within five business days of receipt by the Optionee of a written demand therefor, an amount in cash determined by multiplying the number of shares of Stock purchased pursuant to each exercise of the Option within the six months immediately preceding such competition or misappropriation (without reduction for any shares of Stock delivered by the Optionee pursuant to Section 1.3 or Section 2.4 or withheld by the Company pursuant to Section 2.4) by the difference between (i) the Fair Market Value of a share of Stock on the date of such exercise and (ii) the purchase price per share of Stock set forth in the first paragraph of this Award.

        For purposes of the preceding paragraph, the Optionee shall be treated as entering into competition with an Employer or other Affiliate if the Optionee (i) directly or indirectly, individually or in conjunction with any person, firm or corporation, has contact with any customer of an Employer or other Affiliate or with any prospective customer which has been contacted or solicited by or on behalf of an Employer or other Affiliate for the purpose of soliciting or selling to such customer or prospective customer any product or service, except to the extent such contact is made on behalf of an Employer or other Affiliate, or (ii) otherwise competes with an Employer or other Affiliate in any manner or otherwise engages in the business of an Employer or other Affiliate.

        The Optionee shall be treated as misappropriating confidential information of an Employer or other Affiliate if the Optionee (i) uses confidential information (as described below) for the benefit of anyone other than an Employer or such Affiliate, as the case may be, or discloses the confidential information to anyone not authorized by an Employer or such Affiliate, as the case may be, to receive such information, (ii) upon termination of employment or service, makes any summaries of, takes any notes with respect to, or memorizes any confidential information or takes any confidential information or reproductions thereof from the facilities of an Employer or other Affiliate, or (iii) upon termination of employment or service or upon the request of an Employer or other Affiliate, fails to return all confidential information then in the Optionee's possession. "Confidential information" shall mean any confidential and proprietary drawings, reports, sales and training manuals, customer lists, computer

2

programs, and other material embodying trade secrets or confidential technical, business, or financial information of an Employer or other Affiliate.

        1.3.    Method of Exercise.    Subject to the limitations set forth in this Award, the Option may be exercised by the holder of the Option (1) by giving written notice to the Vice President-Human Resources of the Company specifying the number of whole shares of Stock to be purchased and by accompanying such notice with payment therefor in full (unless another arrangement for such payment which is satisfactory to the Company has been made) either (i) in cash, (ii) in previously owned whole shares of Stock (which the holder has held for at least six months prior to the delivery of such shares of Stock or which the holder purchased on the open market and for which the holder has good title, free and clear of all liens and encumbrances) having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (iii) to the extent legally permissible, in cash by a broker-dealer acceptable to the Company to whom the holder has submitted an irrevocable notice of exercise, or (iv) a combination of (i) and (ii), and (2) by executing such documents and taking any other actions as the Company may reasonably request. If payment of the purchase price is made pursuant to clause (ii) of the first sentence of this Section 1.3, then any fraction of a share of Stock which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the holder. No share of Stock shall be delivered until the full purchase price therefor has been paid.

        1.4.    Full or Partial Cancellation of Option.    In the event that rights to purchase all or a portion of the shares of Stock subject to the Option expire or are exercised, cancelled or forfeited, the holder shall promptly return this Award to the Company. If the holder continues to have rights to purchase shares hereunder, the Company shall, within 10 days of the holder's delivery of this Award to the Company, either (i) mark the Award to indicate the extent to which the Option has expired or been exercised, cancelled or forfeited or (ii) issue to the holder a substitu