US Cellular 2008 Annual Report Download - page 79

Potential Payments Upon Termination Or Change In Control
This section discusses, with respect to the executives identified in the Summary Compensation
Table, each contract, agreement, plan or arrangement, whether written or unwritten, that provides for
payments to such executive at, following, or in connection with any termination, including resignation,
severance, retirement or constructive termination, or a change in control of U.S. Cellular or a change in
the executive officer’s responsibilities.
The Company does not have any agreements with any of the named executive officers or any plans
or policies that provide for severance or other compensation or benefits to the named executive officers
upon termination or a Change in Control other than the acceleration of equity awards upon certain
events as discussed herein and as set forth in the Table of Potential Payments upon Termination or
Change in Control. The acceleration of awards is considered to be appropriate under certain qualified
termination events or a Change in Control as discussed therein, but U.S. Cellular does not consider it
appropriate to generally provide for other significant severance or similar benefits in such events or to
permit the acceleration of awards as a general rule for non-qualified termination events. The Company
considers the fact that, unlike most of its peer companies, which are generally widely held, U.S. Cellular
is controlled by TDS, which is controlled by the TDS Voting Trust. As a result, U.S. Cellular does not
follow the practices of certain other companies that may provide for substantial benefits upon a
termination or a Change in Control as a standard practice. Instead, potential payments upon termination
or a Change in Control are designed primarily so that employees are neither harmed nor given a windfall
in such circumstances. The acceleration of awards under certain circumstances is intended to motivate
executive officers to act in the best long-term interests of U.S. Cellular.
Notwithstanding the foregoing, U.S. Cellular may enter into agreements or arrangements with officers
that provide for severance or other compensation or benefits under circumstances that are negotiated
with such officer in connection with the employment or termination of employment of an officer. Any such
agreement or arrangement is based on the facts and circumstances at the time relating to the particular
employment relationship. See for instance the employment agreement entered into with John E. Rooney
as discussed below.
The foregoing approach to termination payments is consistent with U.S. Cellular’s overall
compensation objectives, as discussed above. These objectives assume that officers will be
compensated primarily based on performance during their continued employment with U.S. Cellular and
are designed to motivate executive officers to act in the best long-term interest of U.S. Cellular,
recognizing that U.S. Cellular is a controlled company. As a result, these objectives do not contemplate
providing significant benefits with respect to qualified termination events or a Change in Control or
providing any benefits upon non-qualified termination events. Accordingly, the limited amounts of
termination and Change in Control payments provided as discussed herein are taken into account with
all other facts and circumstances, but otherwise do not significantly affect decisions relating to other
elements of compensation, which are provided consistent with the foregoing compensation objectives
assuming continued employment until normal retirement.
Arrangements with Specified Officers
U.S. Cellular does not have any agreements with any of the named executive officers providing for
severance or other compensation or benefits upon termination or a change in control, provided that
certain awards may accelerate upon termination or a change in control as discussed above under
Compensation Disclosure and Analysis—Other Benefits and Plans Available to Identified Officers. U.S.
Cellular has certain arrangements with John E. Rooney relating to vesting of stock options and restricted
stock units that are not related to termination or a change in control, as discussed in footnote (1) to the
below table.
Table of Potential Payments upon Termination or Change in Control
The following table summarizes the estimated payments to be made under each contract,
agreement, plan or arrangement which provides for payments to a named executive officer at, following,
or in connection with any termination of employment including by resignation, retirement, disability or a
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