US Cellular 2008 Annual Report Download - page 30

rights to receive the cash or Common Shares subject to the performance award. All of the terms related
to the termination of the performance period or the satisfaction of performance measures, or the
forfeiture and cancellation of a performance award upon a termination of employment, whether by
reason of disability, retirement, death or any other reason, will be determined by the Committee.
Company Match Awards. The Amended Plan permits an eligible employee selected by the
Committee to elect to defer all or a portion of his or her annual bonus to a deferred compensation
account under the Amended Plan. If a selected employee elects to defer under the Amended Plan all or
a portion of his or her annual bonus, a company match award will be allocated to the employee’s
deferred compensation account in an amount equal to the sum of:
• 25% of the deferred bonus amount which is not in excess of one-half of the employee’s gross
bonus for the year, and
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1⁄3% of the deferred bonus amount which is in excess of one-half of the employee’s gross bonus
for the year.
An employee will be fully vested in the deferred bonus amounts credited to his or her deferred
compensation account. One-third of the company match award credited to the employee’s deferred
compensation account will become vested on each of the first three anniversaries of the last day of the
year for which the applicable bonus is payable, provided that such employee remains continuously
employed by U.S. Cellular or an affiliate until such date and the related deferred bonus amount has not
been withdrawn or distributed before such date. Any company match award that is not vested as of the
date that the related deferred bonus amount is withdrawn or distributed will be forfeited as the date of
the withdrawal or distribution. Without regard to the previous provisions of this paragraph, the company
match award will become fully vested upon the employee’s permanent disability prior to separation from
service or the employee’s separation from service due to retirement or death.
Amounts credited to an employee’s deferred compensation account will be deemed to be invested
in phantom Common Shares at the time the amounts are credited to the deferred compensation
account.
Payment of deferred compensation generally will be in accordance with the employee’s distribution
date elections, provided that if an employee is a ‘‘specified employee’’ within the meaning of
Section 409A of the Code, and is entitled to payment by reason of the employee’s separation from
service, no portion of his or her deferred compensation account subject to Section 409A of the Code will
be paid before the date which is six months after the date of the employee’s separation from service (or
if earlier, the date of the employee’s death). Payment of deferrals related to bonus years prior to 2009
generally will be in a lump sum or installments, as elected by the employee. Payment of deferrals related
to 2009 and bonus years thereafter will be in a lump sum.
In addition, the Committee may approve a distribution of all or a portion of an employee’s vested
deferred compensation account in the event of an unforeseeable emergency causing the employee
severe financial hardship. In the event an employee receives a distribution from his or her deferred
compensation account due to unforeseeable emergency, any deferral election by the employee in effect
under the Amended Plan immediately will be cancelled.
All payments of deferred compensation will be made in whole Common Shares and cash equal to
the fair market value of any fractional share.
Federal Income Tax Consequences
The following is a brief summary of certain U.S. federal income tax consequences, pursuant to the
laws in effect as of the date of this Proxy Statement, of awards made under the Amended Plan.
U.S. federal income tax laws are complex and subject to different interpretations, and the following
summary is not a complete description of the possible U.S. federal income tax consequences of awards
made under the Amended Plan.
Nonqualified Stock Options. An award recipient will not recognize taxable income at the time of
grant of a nonqualified stock option, and U.S. Cellular will not be entitled to a corporate income tax
deduction at that time. An award recipient will recognize compensation taxable as ordinary income
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