US Cellular 2008 Annual Report Download - page 26

PROPOSAL 3
U.S. CELLULAR 2005 LONG-TERM INCENTIVE PLAN, AS AMENDED
On March 17, 2009, the U.S. Cellular board of directors approved an amendment to the U.S. Cellular
2005 Long-Term Incentive Plan (the ‘‘Plan’’) authorizing 2,600,000 additional Common Shares, par value
$1.00 per share (‘‘Common Shares’’) to be issued under the Plan, subject to shareholder approval. In
addition, since the Plan was last approved by shareholders in 2005, there have been certain amendments to
the Plan that were not material and that were not submitted for approval by shareholders. A copy of the
amended Plan (the ‘‘Amended Plan’’), reflecting the increase in the authorized Common Shares and all other
amendments since the Plan was last approved by shareholders, is attached hereto as Exhibit C.
Accordingly, the Amended Plan is being submitted for approval by shareholders at the 2009 annual
meeting. If approved by shareholders, the Amended Plan will be effective upon approval. The following is
a description of the Amended Plan.
Description Of The Amended Plan
General. Under the Amended Plan, U.S. Cellular may grant incentive stock options (‘‘ISOs’’) and
nonqualified stock options, stock appreciation rights (‘‘SARs’’), restricted stock awards and restricted
stock unit (‘‘RSU’’) awards, performance awards and company match awards for deferred bonus
payments, as described below. Common Shares granted under the Amended Plan may be authorized
and unissued shares, authorized and issued shares that are reacquired and held as treasury or
otherwise or a combination thereof. A total of 9,600,000 Common Shares have been reserved for issuance
under the Amended Plan, subject to adjustment in the event of a stock split, stock dividend or other changes
in capital structure of U.S. Cellular. The number of available shares is reduced by the sum of the aggregate
number of Common Shares which are or become subject to outstanding awards. To the extent that
Common Shares subject to an outstanding award are not issued or delivered, or are returned to
U.S. Cellular, by reason of the expiration, termination, cancellation or forfeiture of such award, the settlement
of such award in cash, or by reason of the delivery or withholding of Common Shares to pay all or a portion
of the exercise price of an award, if any, or to satisfy all or a portion of the tax withholding obligations relating
to an award, then such Common Shares again will be available under the Amended Plan.
Effective Date and Termination. The Plan became effective as of February 22, 2005 and, unless
terminated earlier by the board of directors, the Amended Plan will terminate on February 22, 2015.
Purposes. The purposes of the Amended Plan are to:
• align the interests of the shareholders of U.S. Cellular and the key executive and management
employees of U.S. Cellular and certain of its affiliates by increasing the proprietary interest of such
employees in U.S. Cellular’s growth and success;
• advance the interests of U.S. Cellular by attracting and retaining key executive and management
employees of U.S. Cellular and such affiliates; and
• motivate such employees to act in the long-term best interests of U.S. Cellular’s shareholders.
Amendment. The U.S. Cellular board of directors may amend the Amended Plan as it deems
advisable, subject to any requirement of shareholder approval under applicable law, rule or regulation
(including Section 162(m) and Section 422 of the Internal Revenue Code of 1986, as amended (the
‘‘Code’’)), and any rule of the principal national stock exchange on which the Common Shares are then
traded, except that no amendment may be made without shareholder approval if such amendment
would:
• increase the maximum number of Common Shares available for issuance under the Amended
Plan (subject to adjustment for certain changes in the capital structure of U.S. Cellular); or
• with respect to any ISO granted under the Amended Plan, effect any change inconsistent with
Section 422 of the Code.
Eligibility. Subject to limitations set forth in the Amended Plan with respect to particular types of
awards, participants in the Amended Plan may consist of such key executive and management
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