US Cellular 2008 Annual Report Download - page 19

The Audit Committee is currently composed of three members who qualify as independent under
NYSE listing standards, including Section 10A-3, as discussed above. The current members of the Audit
Committee are J. Samuel Crowley (chairperson), Paul-Henri Denuit and Harry J. Harczak, Jr. The board
of directors has determined that each of the members of the Audit Committee is financially literate and
has ‘‘accounting or related financial management expertise’’ pursuant to listing standards of the NYSE.
In addition, although Mr. Harczak previously was an executive officer of CDW Corporation, which
provides products and services to U.S. Cellular and its affiliates, this interest was not considered to be a
direct or indirect material interest to Mr. Harczak under SEC rules. Nevertheless, U.S. Cellular has elected
to disclose the dollar amount of such products and services in this proxy statement. As set forth above
under ‘‘Election of Directors,’’ U.S. Cellular purchased $276,986 and TDS purchased an additional $4,636
in products and services from CDW in 2007, the last year during which Mr. Harczak served as an
executive officer of CDW.
The board has made a determination that Harry J. Harczak, Jr. is an ‘‘audit committee financial
expert’’ as such term is defined by the SEC.
In accordance with the SEC’s safe harbor rule for ‘‘audit committee financial experts,’’ no member
designated as an audit committee financial expert shall (i) be deemed an ‘‘expert’’ for any other purpose
or (ii) have any duty, obligation or liability that is greater than the duties, obligations and liability imposed
on a member of the board or the audit committee not so designated. Additionally, the designation of a
member or members as an ‘‘audit committee financial expert’’ shall in no way affect the duties,
obligations or liability of any member of the audit committee, or the board, not so designated.
The Audit Committee held ten meetings during 2008.
Pre-Approval Procedures
The Audit Committee adopted a policy, effective May 6, 2003, as amended as of February 17, 2004
and November 1, 2005, pursuant to which all audit and non-audit services provided by U.S. Cellular’s
principal independent registered public accounting firm must be pre-approved by the Audit Committee.
Under no circumstances may U.S. Cellular’s principal independent registered public accounting firm
provide services that are prohibited by the Sarbanes Oxley Act of 2002 or rules issued thereunder.
Non-prohibited audit related services and certain tax and other services may be provided to U.S. Cellular,
subject to such pre-approval process and prohibitions. The Audit Committee has delegated to the
chairperson of the Audit Committee the authority to pre-approve services by the independent registered
public accountants and to report such approvals to the full Audit Committee at each of its regularly
scheduled meetings. The pre-approval policy relates to all services provided by U.S. Cellular’s principal
independent registered public accounting firm and does not include any de minimis exception.
Review, approval or ratification of transactions with related persons
The Audit Committee Charter provides that the Audit Committee shall ‘‘be responsible for the review
and oversight of all related-party transactions, as such term is defined by the rules of the New York Stock
Exchange.’’ Related party transactions are addressed in Sections 307.00 and 314.00 of the NYSE Listed
Company Manual.
Section 314.00 of the NYSE Listed Company Manual states that ‘‘Related party transactions normally
include transactions between officers, directors, and principal shareholders and the company.’’ In
general, ‘‘related party transactions’’ would include transactions required to be disclosed in U.S.
Cellular’s proxy statement pursuant to Item 404 of Regulation S-K of the SEC. Pursuant to Item 404, U.S.
Cellular is required to disclose any transaction, which includes any financial transaction, arrangement, or
relationship (including any indebtedness or guarantee of indebtedness) or a series of transactions, that
has taken place since the beginning of U.S. Cellular’s last fiscal year or any currently proposed
transaction in which: 1. U.S. Cellular was or is to be a participant, 2. the amount involved exceeds
$120,000 and 3. any ‘‘related person’’ had or will have a direct or indirect material interest in the
transaction during any part of the fiscal year. For this purpose, in general, the term ‘‘related person’’
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