Document:

EXHIBIT 10.6

 

FOURTH AMENDMENT

TO THE

UNITED STATES CELLULAR
CORPORATION

2005 LONG-TERM INCENTIVE PLAN

 

WHEREAS, United
States Cellular Corporation, a Delaware corporation (the “Corporation”) has
adopted and maintains the United States Cellular Corporation 2005 Long-Term
Incentive Plan (the “Plan”) for the benefit of certain key executives and
management personnel;

 

WHEREAS, pursuant to
Section 9.2 of the Plan, the Board of Directors of the Corporation (the “Board”)
may amend the Plan as it deems advisable, subject to any requirement of
shareholder approval;

 

WHEREAS, the Board
desires to amend the Plan to change in certain minor respects the tax
withholding procedure utilized under the Plan; and

 

WHEREAS, such
amendment to the Plan is not material and is not required to be submitted for
approval by shareholders of the Corporation.

 

NOW, THEREFORE, BE IT RESOLVED, that
effective as of December 5, 2007, the Plan hereby is amended as follows:

 

1.        The final two sentences of Section
4.4(a) hereby are amended in their entirety to read as follows:

 

Any fraction of a share of Stock which would be
required to satisfy the aggregate of such purchase price and the withholding
taxes with respect to the award, as described in Section 9.6, shall be
disregarded and the remaining amount due shall be paid in cash by the option
holder. No share of Stock shall be delivered until the full purchase price
therefore and the withholding taxes thereon have been paid (or arrangement has
been made for such payment to the Company’s satisfaction).

 

2.        Section 4.4(b) hereby is amended in its
entirety to read as follows:

 

(b)           Purchase Price Payment by Officers.
The holder of an option awarded to an Officer before March 7, 2006 may pay for
the shares of Stock to be purchased pursuant to the exercise of such option (i)
by any of the methods set forth in Section 4.4(a) or (ii) by authorizing the
Company to withhold whole shares of Stock which would otherwise be delivered
having a Fair Market Value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of such exercise, in each case to
the extent authorized by the Committee. Payment for shares of Stock to be
purchased pursuant to the exercise of an option granted to an Officer on or
after March 7, 2006 shall be by (i) the delivery of Mature Shares having a Fair
Market Value, determined as of the date of exercise, equal to the aggregate
purchase price payable by reason of such exercise or (ii) authorizing the
Company to withhold whole shares of Stock which would otherwise be delivered
having a Fair Market Value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of such exercise. Any fraction of a
share of Stock which would be required to satisfy the 

 

 

aggregate of such purchase price and the withholding
taxes with respect to the award, as described in Section 9.6, shall be
disregarded and the remaining amount due shall be paid in cash by the option
holder. No share of Stock shall be delivered until the full purchase price
therefore and the withholding taxes thereon have been paid (or arrangement has
been made for such payment to the Company’s satisfaction).

 

3.        Section 9.6 hereby is amended in its
entirety to read as follows:

 

9.6           Tax Withholding. The Company
shall have the right to require, prior to the issuance or delivery of any
shares of Stock or the payment of any cash pursuant to an award made hereunder,
payment by the holder of any federal, state, local or other taxes which may be
required to be withheld or paid in connection with the award. Such payment
shall be in accordance with Section 9.6(a), (b) or (c), as applicable. Shares
of Stock to be withheld or delivered pursuant to this Section 9.6 may not have
an aggregate Fair Market Value in excess of the amount determined by applying
the minimum statutory withholding rate. Any fraction of a share of Stock which
would be required to satisfy the aggregate of the tax withholding obligation
and the purchase price for the award, if any, shall be disregarded and the remaining
amount due shall be paid in cash by the holder. No share of Stock shall be
delivered until the withholding taxes thereon have been paid (or arrangement
has been made for such payment to the Company’s satisfaction).

 

(a)           Methods of Tax Withholding
Applicable to Awards Granted prior to March 7, 2006. An Agreement
evidencing an award granted prior to March 7, 2006 may provide for the
withholding of taxes by any of the following means:  (i) a cash payment to the Company, (ii)
authorizing the Company to withhold whole shares of Stock which otherwise would
be delivered to the holder, the aggregate Fair Market Value of which shall be
determined as of the date the obligation to withhold or pay taxes arises in
connection with the award (the “Tax Date”), or an amount of cash which
otherwise would be payable to the holder, (iii) delivery to the Company of
previously-owned whole shares of Stock, the aggregate Fair Market Value of
which shall be determined as of the Tax Date, (iv) in the case of the exercise
of an option and to the extent legally permissible, a cash payment by a
broker-dealer acceptable to the Company to whom the option holder has submitted
an irrevocable notice of exercise or (v) any combination of (i), (ii) and
(iii).

 

(b)           Methods of Tax Withholding
Applicable to Awards Granted on or after March 7, 2006 but prior to September
14, 2006. An Agreement evidencing an option granted to an Officer during
the period commencing on March 7, 2006 and ending on September 13, 2006 shall
provide that all tax withholding shall be satisfied either by (i) authorizing
the Company to withhold whole shares of Stock which otherwise would be
delivered to the holder, the aggregate Fair Market Value of which shall be
determined as of the Tax Date or (ii) delivery to the Company of
previously-owned whole shares of Stock, the aggregate Fair Market Value of
which shall be determined as of the Tax Date. An Agreement evidencing any other
award granted during the period commencing on 

 

2

 

March 7, 2006 and ending on September 13, 2006 may
provide for the withholding of taxes by any of the methods set forth in Section
9.6(a).

 

(c)           Methods of Tax Withholding
Applicable to Awards Granted on or after September 14, 2006. An Agreement
evidencing an option granted on or after September 14, 2006 to an employee who
is not an Officer may provide for the withholding of taxes by any of the
methods set forth in Section 9.6(a). An Agreement evidencing any other award
granted on or after September 14, 2006 shall provide that all tax withholding
shall be satisfied either by (i) authorizing the Company to withhold whole
shares of Stock which otherwise would be delivered to the holder, the aggregate
Fair Market Value of which shall be determined as of the Tax Date, or an amount
of cash which otherwise would be payable to the holder or (ii) delivery to the
Company of previously-owned whole shares of Stock, the aggregate Fair Market
Value of which shall be determined as of the Tax Date. Notwithstanding the
foregoing, withholding of employment taxes owed in connection with a Deferred
Compensation Account may be satisfied by a cash payment to the Company.

 

* * * * * *

 

3

 

IN WITNESS WHEREOF, the
undersigned has executed this Fourth Amendment as of this 5th day of December,
2007.

 

 

	
   

  	
  UNITED
  STATES CELLULAR CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven T.
  Campbell

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  EVP – Finance ,
  CFO & Treasurer

  	
   

  

 

 

 

SIGNATURE PAGE TO

FOURTH AMENDMENT TO

UNITED STATES CELLULAR
CORPORATION

2005 LONG-TERM INCENTIVE PLANExhibit
10.1

 

TDS BONUS DEFERRAL AND

STOCK UNIT MATCH PROGRAM

2008 BONUS YEAR

 

Purpose

 

The
TDS Bonus Deferral and Stock Unit Match Program (the “Program”) is designed to
provide TDS Corporate executives with a significant incentive to acquire
additional shares of TDS stock.  This
document sets forth the terms and conditions of the Program as offered for the
2008 bonus year.

 

Eligibility

 

Executives
who hold TDS Vice Presidential and above positions are eligible to participate.

 

Program Overview

 

Eligible executives may defer up to 100% of their annual bonus up to a
maximum of $400,000 and receive Company Stock Unit Matches on the amount
deferred.  Company Stock Unit Match
amounts will depend on the amount of annual bonus that the executive deferred
into stock units and the price of TDS Special Common Stock on the date his/her
bonus was determined by TDS.  Executives
will receive a 25% Company Stock Unit Match for amounts deferred up to 50% of
their total annual bonus and a 33% match for any amounts that they elect to
defer that exceed 50% of their total annual bonus award.  The Company Stock Unit Matches will vest
ratably over three years.

 

TDS will establish bookkeeping accounts that
reflect the executive’s deferral amount, Company Stock Unit Match and any earned
dividends.  The value of the executive’s
accounts will change in direct proportion to the performance of TDS Special
Common Stock.  However, the amounts
credited to an executive’s accounts will not actually be invested in TDS
Special Common Stock.  The amounts
credited to the executive’s accounts will be distributed in TDS Special Common
Stock during the earlier of (i) the seventh calendar month following the
calendar month during which he/she separates from service and (ii) the calendar
year elected by the executive that is at least three years following the
calendar year during which the executive makes the deferral election.  Distribution will be in the form of a single
lump sum payment.  If the executive
separates from service earlier than January 1st of the fourth
calendar year following the calendar year during which the bonus is earned (the
“Performance Year”), and such separation from service is for a reason other
than death or “Disability”, a portion of the Company match will be lost.

 

For purposes hereof, “Disability” shall mean
an executive’s (i) inability to engage in any substantial gainful activity or
(ii) receipt of income replacement benefits for a period of not less than 3
months under an accident and health plan covering employees of TDS, in each
case as a result of a medically 

 

 

determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months.

 

The executive is considered to be a general unsecured
creditor of TDS with regard to the deferred compensation amounts to which the
Program pertains.

 

The Program is subject to the provisions of the Telephone and Data
Systems, Inc. 2004 Long-Term Incentive Plan, as it may be amended from time to
time (the “LTIP”), and shall be interpreted in accordance therewith.  In the event of any inconsistency between the
terms of the Program and the terms of the LTIP, the terms of the LTIP shall
govern.  The TDS Compensation Committee
shall have the right to resolve all questions which may arise in connection
with the Program.  Any interpretation,
determination or other action made or taken by the TDS Compensation Committee
regarding the Program shall be final, binding and conclusive.

 

Administrative Overview

 

In
November or December of each year, the Corporate Vice President of Human
Resources will send a Bonus Deferral Form similar to Attachment I for the
upcoming Performance Year to all eligible TDS executives.  Executives wishing to take advantage of this
bonus deferral opportunity must fill out this Form and return it (delivered or
faxed with signature) to the Corporate Vice President of Human Resources no
later than the date specified by TDS (which in no event will be later than
December 31st) (see Administrative Ground Rules – Taxes).  Except in the event that an executive
experiences an “Unforeseeable Emergency” (as defined below), the elections made
by the executive on the Bonus Deferral Form shall be irrevocable upon the
commencement of the Performance Year.

 

Before the first of each year, the Corporate Vice President of Human
Resources will confirm all election deferral decisions with the executives
making them, as well as advise the administrative personnel who need to be
aware of the specifics of these bonus deferral election decisions.

 

After a participating executive’s bonus award has been determined and
the amount he/she has deferred is known, two separate accounts will be
established for each participating executive: 
(i) the “Deferred Compensation Stock Account”, which will be credited
with the bonus monies that the executive has deferred under the Program, and
(ii) the “Stock Unit Match Account”, which will be credited with the Company
Stock Unit Match awards.

 

The
value of your accounts for the 2008 Performance Year will rise or fall in
direct proportion to the price of TDS Special Common Stock. (1) All
participating executives will receive statements of the 

 

(1)   Please note that if you
participated in the Program for Performance Years prior to the 2005 Performance
Year, the value of your accounts for such years will rise or fall in direct
proportion to the price of TDS Special Common Stock and TDS Common Stock.  Accounts for Performance Years prior to the
2005 Performance Year are deemed to be invested in an equal number of shares of
TDS Special Common Stock and TDS Common Stock. 
Accounts for the 2005 Performance Year and any Performance Year
thereafter are deemed to be invested solely in shares of TDS Special Common
Stock.

 

2

 

number
of vested and unvested share units they have in their accounts as of each
December 31st (see Attachment II for the information that will be
included in each account statement). 
These statements will be sent out annually as early in the first quarter
as possible.

 

Administrative Ground Rules

 

This
2008 Program will be administered in accordance with the following ground
rules:

 

•      Vesting:

 

The
executive is always 100% vested in all bonus amounts that have been deferred
under the Program and any dividends credited under the Program.  Provided that the executive does not separate
from service or receive a distribution of his/her accounts for the 2008
Performance Year prior to the vesting date, the Company Stock Unit Matches will
vest ratably over three years in accordance with the following schedule:

 

•        33% on December 31st of the year following the Performance
Year.

 

•        an additional 33% on December 31st of the second year
following the Performance Year, and

 

•        the remaining 34% on December 31st of the third year
following the Performance Year.

 

•      Taxes:

 

Since all bonus deferral
decisions under the Program will be made in accordance with IRS requirements,
income taxes on all Bonus Deferrals and Company Stock Unit Match awards will be
deferred until the proceeds from the executive’s Deferred Compensation Stock
Account and Stock Unit Match Account are distributed.  The IRS has taken the position that the
executive must make his/her deferral election prior to the beginning of the
Performance Year in order that the deferred monies not be considered in “constructive
receipt”, and therefore taxable income in the year they would have been paid to
the executive.

 

Please note, however, that
Bonus Deferrals and Company Stock Unit Match awards will be subject to social
security and unemployment tax prior to the date they are distributed.  Bonus Deferrals will be subject to social
security and unemployment tax at the time of the deferral and Company Stock
Unit Match awards will be subject to social security and unemployment tax at
the time they become vested.

 

Appropriate amounts shall be
withheld from any distributions under the Program or from an executive’s
compensation as may be required for purposes of complying with federal, state, local
or other tax withholding requirements applicable to the Program.

 

•      Separation from Service:

 

If the executive separates
from service prior to the completion of the vesting schedule, as 

 

3

 

previously described, all
unvested share units credited to the executive’s Stock Unit Match Account will
be forfeited, except if the executive separates from service as a result of
his/her Disability or death.  If the
executive separates from service as a result of his/her Disability or death,
the executive, or his/her beneficiary/beneficiaries, will be 100% vested in all
share units credited to the executive’s Stock Unit Match Account.

 

Notwithstanding the
foregoing, if the executive separates from service as a result of his/her
negligence, willful misconduct, competition with TDS or an affiliate thereof or
misappropriation of confidential information of TDS or an affiliate thereof,
then the executive’s Stock Unit Match Account, whether vested or nonvested,
automatically will be forfeited as of the date of such separation.

 

•      Beneficiaries:

 

An executive who defers any
portion of his/her annual bonus under the Program should complete a “Bonus
Deferral and Stock Unit Match Program Beneficiary Designation Form” (see Attachment
III) and return it to the Corporate Vice President of Human Resources as soon
as possible.  In the event of the
executive’s death, this Form will govern distribution of the executive’s unpaid
vested accounts for the 2008 Performance Year and all other Performance Years
with respect to which the executive participated in the Program.  The Form does not have to be completed again
unless the executive wishes to make some change to the previous Beneficiary
Designation Form.  If an executive is
married and names someone other than his/her spouse as a primary beneficiary,
the designation is invalid unless the spouse consents by signing the
Beneficiary Designation Form in the presence of a Notary Public.  If an executive fails to complete such a
form, the executive’s spouse, if any, will be the beneficiary.  Otherwise, the executive’s beneficiary will
be determined by the terms of the LTIP document.

 

Notwithstanding any
provision within the Program to the contrary, in the event of the executive’s
death, his/her unpaid vested accounts will be distributed in their entirety at
the time determined by TDS within 60 days following the executive’s death.

 

•      Initial Value of the Executive’s Deferred
Compensation Stock and Stock Unit Match Accounts:

 

After verification of the
executive’s bonus, and the amount that was deferred, the amount credited to the
executive’s accounts for the 2008 Performance Year will be determined as
follows:

 

•        The initial value of the bonus deferral amount will be determined by
dividing the bonus deferral by the closing price of TDS Special Common Stock on
the date that the bonus was determined. 
Share units will be calculated to three decimal places and fractional
share units will accumulate.

 

For example, if the
executive elected to defer 75% of his/her bonus for a year and his/her bonus
was $40,000 for that year, the executive would have deferred $30,000.  If the closing price of a share of TDS
Special Common Stock on the day this bonus was approved was 

 

4

 

$100, then 300 share units
will be credited to the executive’s Deferred Compensation Stock Account.

 

•        The initial value of the Stock Unit Match Account will be determined
the same way.  Using the above example,
the initial dollar value of share units credited to his/her Stock Unit Match
Account is $8,300, calculated as follows:

 

•        25% of $20,000 (50% of the executive’s total bonus) = $5,000

 

•        33% of $10,000 (the deferral amount over 50% of the executive’s total
bonus) = $3,300

 

•        Total = $8,300

 

Since the closing price of TDS Special Common
Stock on the date the bonus award was approved was assumed to be $100, the
executive’s Stock Unit Match Account would be credited 83.00 share units, which
would vest in accordance with the following schedule:

 

•        27.39(2) share
units – vests on December 31st of the year following the Performance
Year.

 

•        27.39(2) share
units – vests on December 31st two years after the Performance Year.

 

•        28.22(3) share units –
vests on December 31st three years after the Performance Year.

 

•        83.00 share
units – Total Stock Unit Match

 

•      Value of an Executive’s Deferred Compensation Stock
Account and Stock Unit Match Account:

 

The value of an executive’s accounts for the
2008 Performance Year will increase or decrease in an amount equal to the gains
or losses that would have been realized if assets in an amount equal to the
balance in the executive’s accounts were actually invested in TDS Special
Common Stock.  Hence, if the price of TDS
Special Common Stock rises by $1, each share unit credited in the executive’s
accounts will be worth an additional $1.

 

•      Dividends:

 

The
executive’s Deferred Compensation Stock Account and Stock Unit Match Account
will be credited with dividend share units as follows:

 

•        On Bonus Deferral Share Units: Dividend share units on the executive’s share units in his/her
Deferred Compensation Stock Account will be credited on an annual basis and
based on the number of share units credited to the executive’s Deferred
Compensation Stock Account as of the record date for each quarter of the year.

 

This
will be done by totaling up the quarterly dividend dollar amounts as per the
above (as if the share units actually were outstanding shares of TDS), and
dividing this sum by the closing price of TDS Special Common Stock on December
31st of that year.  The result
is the number 

 

(2)           33% of the total
Company Stock Unit Match

(3)           34% of the total Company Stock Unit Match.

 

5

 

of
dividend share units that will be credited to the executive’s account for that
year.

 

On Match Share Units:  For all vested share units
credited in the executive’s Stock Unit Match Account, the procedure for
determining the dividend share units to be credited to this account is the same
as for the Deferred Compensation Stock Account. 
Unvested share units credited to a Stock Unit Match Account will not be
credited with dividend share units.

 

•      Unforeseeable Emergency Withdrawals:

 

In the event of an
Unforeseeable Emergency, an executive may request a payment of all or a portion
of the share units credited to his/her Deferred Compensation Stock Account and
the vested share units credited to his/her Stock Unit Match Account.  Withdrawals will first come from the vested
Stock Unit Match Account.  For this
purpose, “Unforeseeable Emergency” shall mean a severe financial hardship to an
executive resulting from (i) an illness or accident of the executive, the
executive’s spouse or the executive’s dependent; (ii) the loss of the executive’s
property due to casualty; or (iii) other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the executive.  Payment may not exceed an
amount reasonably necessary to satisfy such emergency plus amounts necessary to
pay taxes or penalties reasonably anticipated as a result of such payment after
taking into account the extent to which the hardship may be relieved (a)
through reimbursement or compensation by insurance or otherwise, (b) by
liquidation of the executive’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship) or (c) by cancellation
of any deferral election hereunder or under any other nonqualified deferral
program for the year of the hardship. College expenses and expenses incurred in
purchasing a residence do not qualify as Unforeseeable Emergencies.  The following may be considered Unforeseeable
Emergencies:  (i) the imminent foreclosure
of or eviction from the executive’s primary residence, (ii) the need to pay for
medical expenses, including non-refundable deductibles and the cost of
prescription drug medication and (iii) the need to pay for funeral expenses of
the executive’s spouse or dependent.  In
the event an executive’s Unforeseeable Emergency withdrawal request is
approved, such payment shall be made to the executive in a lump sum at the time
determined by TDS within 60 days after such approval.  No Unforeseeable Emergency withdrawal request
will be approved during the six-month period following an executive’s
separation from service.

 

In addition, in the event an
executive receives an Unforeseeable Emergency withdrawal, whether under this
Program or any other nonqualified deferred compensation plan maintained by TDS
or its affiliates, then any deferral election made by the executive under this
Program or such other plan with respect to the calendar year during which the
withdrawal occurs shall be cancelled for the remainder of such year.

 

•      Distributions:

 

Except in the event of the
executive’s death, the executive will receive the distributable balance
credited to his/her accounts for the 2008 Performance Year as of the earlier of
(i) the seventh calendar month following the calendar month during which he or
she separates from service, or (ii) the distribution date that he/she selected
on the Bonus Deferral Form (which must be a 

 

6

 

calendar year at least three
years following the calendar year during which the executive makes the deferral
election).  In the event of the executive’s
death, the executive will receive such balance at the time determined by TDS
within 60 days following the executive’s death. 
All distributions for the 2008 Performance Year will be made in TDS
Special Common Stock, except that the value of any partial share units credited
to an executive’s accounts will be paid in cash.

 

The
total distributable balance in an executive’s accounts will be determined by
adding:

 

•        The sum of all share units credited to his/her Deferred Compensation
Stock Account (including any credited dividend share units) reduced by any
Unforeseeable Emergency or other withdrawals made prior to the distribution
date, and

 

•        The sum of vested share units credited to his/her Stock Unit Match
Account (including any credited dividend share units) reduced by any
Unforeseeable Emergency or other withdrawals made prior to the distribution
date.

 

If,
for example, the total vested share units credited to the executive’s accounts
is 500 share units on the distribution date, the executive will receive 500
shares of TDS Special Common Stock less any taxes TDS is required to withhold
(taxes may be withheld in the form of shares). 
In this example, the dollar value, which is taxable income, would be
calculated by multiplying the closing price of TDS Special Common Stock on the
distribution date by 500.

 

Compliance with Law

 

This
2008 Program is intended to comply with Section 409A of the Internal Revenue
Code and shall be interpreted and construed accordingly.  TDS shall have sole discretion and authority
to amend this Program, unilaterally, at any time in the future to satisfy any
requirements of Section 409A or applicable guidance thereunder (irrespective of
whether such amendment has retroactive or prospective effect).  Notwithstanding the foregoing, under no
circumstance shall TDS be responsible for any taxes, penalties, interest or
other losses or expenses incurred by an executive or other person due to any
failure to comply with Section 409A.

 

Questions

 

Questions
on the Program should be directed to the Corporate Vice President of Human
Resources.

 

7

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