US Cellular 2008 Annual Report Download - page 56

As noted above, U.S. Cellular’s overall compensation objectives for executive officers are to
(i) support U.S. Cellular’s overall business strategy and objectives; (ii) attract and retain high quality
management; (iii) link individual compensation with attainment of individual performance goals and with
attainment of U.S. Cellular objectives; and (iv) provide competitive compensation opportunities consistent
with the financial performance of U.S. Cellular.
To achieve these objectives, the Chairman and the Stock Option Compensation Committee believe
that the named executive officers must be offered a competitive compensation package, including
benefits and plans. U.S. Cellular’s compensation packages are designed to compete with other
companies for talented employees. U.S. Cellular’s benefits and plans are part of this package and enable
U.S. Cellular to attract and retain eligible employees, including the named executive officers. Thus, the
benefits and plans fit into U.S. Cellular’s overall compensation objectives primarily by helping U.S.
Cellular achieve the second objective of U.S. Cellular’s overall compensation objectives, which is to
attract and retain high quality management. Benefits and plans are an important part of the mix of
compensation used to attract and retain management, but do not otherwise significantly affect decisions
relating to other elements of annual or long-term compensation, which are provided consistent with the
above compensation objectives.
General Provisions under Plans and Certain Agreements
Deferred Salary and Bonus
Deferred Salary. The named executive officers are permitted to defer salary pursuant to deferred
salary compensation agreements. The entire amount of the salary earned is reported in the Summary
Compensation Table in column (c) under ‘‘Salary,’’ whether or not deferred. Pursuant to the agreement,
the officer’s deferred compensation account is credited with interest compounded monthly, computed at
a rate equal to one-twelfth of the sum of the average twenty-year Treasury Bond rate plus
1.25 percentage points until the deferred compensation amount is paid to such person. As required by
SEC rules, column (h) includes the portion of any interest that exceeds 120% of the applicable federal
long-term rate, with compounding (as prescribed under section 1274(d) of the Internal Revenue Code),
at the time each monthly interest rate is set. The deferred compensation account of an officer is paid at
the time and in the form elected by the officer, subject to any payment delay required by section 409A of
the Internal Revenue Code.
Messrs. Rooney and Ellison are parties to deferred compensation agreements, pursuant to which
they have deferred a specified portion of their salaries. The executive is always 100% vested in all salary
amounts that have been deferred and any interest credited with respect thereto. Accordingly, the
executive is entitled to 100% of the amount deferred and all earnings thereon upon any termination.
Such amounts are reported in the Nonqualified Deferred Compensation table below and, because there
would not be any increased benefit or accelerated vesting in the event of any termination or change in
control, are not included in the below table of Potential Payments upon Termination or Change in
Control.
Deferred Bonus. The named executive officers are also permitted to defer their bonuses pursuant
to deferred bonus compensation agreements under the 2005 Long-Term Incentive Plan, as discussed
below. The entire amount of the bonus earned is reported in the Summary Compensation Table in
column (d) under ‘‘Bonus,’’ whether or not deferred. Deferred bonus will be deemed invested in phantom
U.S. Cellular Common Shares. The named executive officers receive a distribution of the deferred
compensation account at the date elected by the officer, subject to any payment delay required by
section 409A of the Internal Revenue Code.
Mr. Rooney and Mr. Ellison is each a party to an executive deferred compensation agreement,
pursuant to which he has deferred a specified portion of his bonus in the current or prior years. The
executive is always 100% vested in all bonus amounts that have been deferred. Such amounts are
reported in the Nonqualified Deferred Compensation table and, because there would not be any
increased benefit or accelerated vesting in the event of any termination or change in control, are not
included in the below table of Potential Payments upon Termination or Change in Control.
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