US Cellular 2008 Annual Report Download - page 27

employees of U.S. Cellular or certain of its affiliates, as the Committee (as defined below) may select
from time to time. U.S. Cellular and its affiliates currently have approximately 1,850 key executive and
management employees.
Maximum Award. Subject to adjustment in the event of changes in the capital structure of
U.S. Cellular, and to the extent necessary for an award to be ‘‘qualified performance-based
compensation’’ under Section 162(m) of the Code:
• the maximum number of Common Shares with respect to which options or SARs (or a
combination thereof) may be granted during any calendar year to any employee is 175,000;
• the maximum number of Common Shares with respect to which restricted stock or RSU awards
subject to performance measures (or a combination thereof) may be granted during any calendar
year to any employee is 50,000; and
• the maximum amount that may be paid to any employee under a performance award for any
performance period is 50,000 Common Shares or the fair market value of such Common Shares if
paid in cash.
Administration. The Amended Plan will be administered by a committee (the ‘‘Committee’’)
designated by the board of directors, consisting of one or more members of the board of directors, each
of whom is an ‘‘outside director’’ within the meaning of Section 162(m) of the Code and a
‘‘Non-Employee Director’’ within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934,
as amended (the ‘‘Exchange Act’’). The Committee will select those eligible persons for participation in
the Amended Plan as the Committee determines and will determine the form and timing of each award
and, if applicable, the number of Common Shares, the number of SARs and the number of RSUs subject
to such an award, the exercise price or base price of the award, the time and conditions of exercise or
settlement of the award and all other terms and conditions of the award, including, without limitation, the
form of the agreement evidencing the award. The Committee may impose conditions with respect to the
grant of an award, such as limiting competitive employment or other activities.
The Committee also will have authority to prescribe rules and regulations for administering the
Amended Plan and to decide questions of interpretation or application of any provision of the Amended
Plan.
The approval by the full board of directors, as well as the affirmative vote of a majority of the
members of the Committee, is required for any grant of stock options, restricted stock or RSU awards or
similar stock-based compensation if the number of Common Shares which could be issued pursuant to
such award, when added to the then currently outstanding Common Shares plus the number of
Common Shares then subject to purchase or receipt pursuant to all grants of stock options, employee
stock purchase plans, restricted stock or RSU awards and any other plan or program pursuant to which
Common Shares of U.S. Cellular have been optioned or granted, whether vested or not, would result in
U.S. Cellular no longer satisfying the eligibility requirements, under Section 1504 of the Code, to file a
consolidated tax return with TDS.
Except in connection with certain changes in the capital structure of U.S. Cellular, the Committee
may not reduce the exercise price of an outstanding stock option or the base price of an outstanding
SAR without the approval of U.S. Cellular’s stockholders.
Delegation. The Committee may delegate some or all of its power and authority under the
Amended Plan to the Chairman or other executive officer of U.S. Cellular as it deems appropriate;
provided, however, that the Committee may not delegate its power and authority regarding:
• the selection for participation in the Amended Plan of:
the Chief Executive Officer of U.S. Cellular (or any employee who is acting in such capacity),
one of the four highest compensated officers of U.S. Cellular (other than the Chief Executive
Officer), or any other person deemed to be a ‘‘covered employee’’ within the meaning of
Section 162(m) of the Code or who, in the Committee’s judgment, is likely to be a covered
employee at any time during the period the award to be granted to such employee may result
in taxable income to the employee, or
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