US Cellular 2009 Annual Report Download - page 78

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UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 16 STOCK-BASED COMPENSATION (Continued)
A summary of U.S. Cellular stock options outstanding (total and portion exercisable) and changes during
the three years ended December 31, 2009, is presented in the table below:
Weighted
Average
Weighted Weighted Remaining
Average Average Aggregate Contractual
Number of Exercise Grant Date Intrinsic Life
Options Price Fair Value Value (in years)
Outstanding at December 31, 2006 ...... 2,571,000 $44.07
(1,430,000 exercisable) ............... 42.15
Granted ........................ 477,000 74.29 $16.74
Exercised ....................... (1,523,000) 45.53 $55,912,000
Forfeited ....................... (122,000) 57.05
Expired ........................ (4,000) 34.44
Outstanding at December 31, 2007 ...... 1,399,000 $51.65
(544,000 exercisable) ................ 38.21
Granted ........................ 685,000 56.99 $14.08
Exercised ....................... (415,000) 37.90 $ 7,487,000
Forfeited ....................... (38,000) 61.40
Expired ........................ (5,000) 63.56
Outstanding at December 31, 2008 ...... 1,626,000 $57.15
(624,000 exercisable) ................ 51.56
Granted ........................ 748,000 34.21 $11.75
Exercised ....................... (181,000) 34.01 $ 821,000
Forfeited ....................... (130,000) 47.98
Expired ........................ (34,000) 56.84
Outstanding at December 31, 2009 ...... 2,029,000 $51.37 $ 5,438,000 7.0
(1,046,000 exercisable) ............... $54.40 $ 1,436,000 5.6
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference
between U.S. Cellular’s closing stock price and the exercise price multiplied by the number of
in-the-money options) that was received by the option holders upon exercise or that would have been
received by option holders had all options been exercised on December 31, 2009.
Long-Term Incentive Plan—Restricted Stock Units—U.S. Cellular grants restricted stock unit awards,
which generally vest after three years, to key employees.
U.S. Cellular estimates the fair value of restricted stock units based on the closing market price of
U.S. Cellular shares on the date of grant. The fair value is then recognized as compensation cost on a
straight-line basis over the requisite service periods of the awards, which is generally the vesting period.
Awards granted under this plan prior to 2005 were classified as liability awards due to a plan provision
which allowed participants to elect tax withholding in excess of minimum statutory tax rates. In 2005, this
provision was removed from the plan and, thus, awards after 2005 have been classified as equity awards
(except for awards that may be settled in stock or cash at the option of the recipient, which are classified
as liability awards). All restricted stock units that were classified as liability awards vested prior to 2008.
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