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UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 15 STOCK-BASED COMPENSATION (Continued)
The total fair value of deferred compensation stock units that vested during 2010, 2009 and 2008 was
$0.4 million, $0.1 million and $0.1 million, respectively. The weighted average grant date fair value of
deferred compensation stock units granted in 2010, 2009 and 2008 was $40.76, $33.58 and $56.23,
respectively.
Employee Stock Purchase Plan—The U.S. Cellular 2009 Employee Stock Purchase Plan became effective
January 1, 2009 and will terminate December 31, 2013. Under this plan, eligible employees of
U.S. Cellular and its subsidiaries may purchase a limited number of U.S. Cellular Common Shares on a
quarterly basis. During 2008, the 2003 Employee Stock Purchase Plan was effective but terminated
December 31, 2008. U.S. Cellular employees are also eligible to participate in the TDS Employee Stock
Purchase Plan.
Under these plans, the per share cost to participants is 85% of the market value of the U.S. Cellular
Common Shares or TDS Special Common Shares as of the issuance date. The employee stock
purchase plans are considered compensatory plans; therefore, recognition of compensation cost for
stock issued under these plans is required. Compensation cost is measured as the difference between
the cost of the shares to plan participants and the market value of the shares on the date of issuance.
Compensation of Non-Employee Directors—U.S. Cellular issued 9,000 and 5,200 Common Shares in
2010 and 2009, respectively, under its Non-Employee Director Compensation Plan. No Common Shares
were issued under this plan in 2008.
Stock-Based Compensation Expense
The following table summarizes stock-based compensation expense recognized during 2010, 2009 and
2008:
Year Ended December 31, 2010 2009 2008
(Dollars in thousands)
Stock option awards ....................................... $ 7,179 $ 7,024 $ 7,331
Restricted stock unit awards ................................. 10,056 8,640 7,213
Deferred compensation matching stock unit awards ................ 165 151 350
Awards under employee stock purchase plan ..................... 314 241 228
Awards under non-employee director compensation plan ............ 330 306 —
Total stock-based compensation, before income taxes ............... 18,044 16,362 15,122
Income tax benefit ........................................ (6,812) (6,154) (5,585)
Total stock-based compensation expense, net of income taxes ........ $11,232 $10,208 $ 9,537
In 2010, 2009 and 2008, stock-based compensation expense of $2.0 million, $1.9 million and
$1.5 million, respectively, was recorded in System operations expense and $16.0 million, $14.5 million
and $13.6 million, respectively, was recorded in Selling, general and administrative expense in the
Consolidated Statement of Operations.
At December 31, 2010, unrecognized compensation cost for all U.S. Cellular stock-based compensation
awards was $20.4 million and is expected to be recognized over a weighted average period of 1.8 years.
U.S. Cellular’s tax benefits realized from the exercise of stock options and other awards totaled
$2.8 million in 2010.
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