US Cellular 2008 Annual Report Download - page 24

PROPOSAL 2
AMENDMENT OF COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
The U.S. Cellular board of directors approved amendments to the U.S. Cellular Compensation Plan
for Non-Employee Directors to increase director compensation, based on a review of director
compensation practices in the telecommunications industry and at other comparable companies. A copy
of the amended plan is attached hereto as Exhibit B.
The amended plan is subject to shareholder approval under the rules of the New York Stock
Exchange because the amendments are material and the plan involves the issuance of U.S. Cellular
equity securities to directors of U.S. Cellular. Accordingly, the U.S. Cellular Compensation Plan for
Non-Employee Directors, as amended (the ‘‘Directors Plan’’), is being submitted for approval by the
shareholders at the 2009 Annual Meeting. If approved by shareholders, the Directors Plan will be
effective upon such approval. The following is a description of the Directors Plan, as amended.
Description Of The Plan
Non-employee directors will receive an annual director’s retainer fee of $55,000 paid in cash.
Non-employee directors will also receive an annual stock award of $55,000 paid in the form of U.S.
Cellular Common Shares, which will be distributed in March on or prior to March 15 of each year,
beginning March 2009, for services performed during the 12 month period that commenced on March 1
of the immediately preceding calendar year and ended on the last day of February of the calendar year
of payment. The number of shares will be determined on the basis of the closing price of U.S. Cellular
Common Shares for the last trading day in the month of February of each year. Notwithstanding the
foregoing, the annual stock award of $55,000 to be distributed in March 2009, shall be distributed
$45,000 in the form of Common Shares and $10,000 in the form of cash. In addition, a director who is
not a citizen of the United States may, at his or her discretion, receive the annual stock award in the form
of cash.
Each non-employee director who serves on the Audit Committee, other than the Chairperson, will
receive an annual committee retainer fee of $11,000, and the Chairperson will receive an annual
committee retainer fee of $22,000.
Each non-employee director who serves on the Stock Option Compensation Committee, other than
the Chairperson, will receive an annual committee retainer fee of $7,000, and the Chairperson will receive
an annual committee retainer fee of $14,000.
Non-employee directors also will receive a meeting fee of $1,750 for each board or committee
meeting attended.
Under the Directors Plan, annual retainers will be paid in cash on a quarterly basis, as of the last
day of each quarter. Fees for all board and committee meetings will be paid in cash on a quarterly basis,
as of the last day of each quarter.
Upon approval of this amended Directors Plan by shareholders, directors will have the authority
without further shareholder approval to further amend the Directors Plan from time to time, including
amendments to increase the amount of the compensation payable in Common Shares from time to time,
provided that the total number of Common Shares issued under the Plan may not exceed the amount
previously approved by shareholders.
A total of 60,000 U.S. Cellular Common Shares were previously approved by shareholders for
issuance under the Directors Plan, of which approximately 12,000 Common Shares have been issued as
of February 28, 2009.
Pursuant to Section 303A.08 of the New York Stock Exchange Listed Company Manual, the
authorization to issue Common Shares pursuant to the Directors Plan shall expire ten years after the date
of shareholder approval on May 19, 2009, unless reapproved by shareholders. If for any reason shares
cannot be issued pursuant to the requirements of the New York Stock Exchange or otherwise, the value
of such shares that cannot be issued shall be paid in the form of cash.
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