US Cellular 2011 Annual Report Download - page 73

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 16 STOCK-BASED COMPENSATION (Continued)
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.
A summary of U.S. Cellular nonvested restricted stock units at December 31, 2011 and changes during
the year then ended is presented in the table below:
Weighted
Average
Grant Date
Number Fair Value
Nonvested at December 31, 2010 ....................... 752,000 $42.69
Granted ........................................ 346,000 49.35
Vested ......................................... (189,000) 55.93
Forfeited ....................................... (64,000) 42.48
Nonvested at December 31, 2011 ....................... 845,000 $42.48
The total fair value of restricted stock units that vested during 2011, 2010 and 2009 was $9.5 million,
$4.7 million and $4.2 million, respectively, as of the respective vesting dates. The weighted average grant
date fair value of restricted stock units granted in 2011, 2010 and 2009 was $49.35, $42.21 and $33.00,
respectively.
Long-Term Incentive Plan—Deferred Compensation Stock Units—Certain U.S. Cellular employees may
elect to defer receipt of all or a portion of their annual bonuses and to receive a company matching
contribution on the amount deferred. All bonus compensation that is deferred by employees electing to
participate is immediately vested and is deemed to be invested in U.S. Cellular Common Share stock
units. The amount of U.S. Cellular’s matching contribution depends on the portion of the annual bonus
that is deferred. Participants receive a 25% match for amounts deferred up to 50% of their total annual
bonus and a 33% match for amounts that exceed 50% of their total annual bonus; such matching
contributions also are deemed to be invested in U.S. Cellular Common Share stock units.
The total fair value of deferred compensation stock units that vested during 2011 was less than
$0.1 million, the fair values of units vested during 2010 and 2009 was $0.4 million and $0.1 million,
respectively. The weighted average grant date fair value of deferred compensation stock units granted in
2011, 2010 and 2009 was $48.72, $40.76 and $33.58, respectively. As of December 31, 2011, there were
3,000 vested but unissued deferred compensation stock units valued at $0.1 million.
Employee Stock Purchase Plan—The U.S. Cellular 2009 Employee Stock Purchase Plan became effective
January 1, 2009. All remaining shares reserved under this plan were issued and the plan was terminated
in the fourth quarter of 2011, in advance of its original termination date of December 31, 2013. Under this
plan, eligible employees of U.S. Cellular and its subsidiaries could purchase a limited number of
U.S. Cellular Common Shares on a quarterly basis. U.S. Cellular employees were also eligible to
participate in the TDS Employee Stock Purchase Plan before this was terminated in the fourth quarter of
2011.
Under these plans, the per share cost to participants was 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 were considered compensatory plans; therefore, recognition of compensation cost for
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