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Exhibit 10.1

 

UNITED STATES CELLULAR CORPORATION

2010 EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN

Effective January 1, 2010

I.          PURPOSE

Ø      To provide incentive for the officers of U.S. Cellular (USCC) to extend
their best efforts towards achieving superior results in relation to key
business measures;

Ø      To reward USCC’s executive officers in relation to their success in
meeting and exceeding the performance targets; and

Ø      To help USCC attract and retain talented leaders in positions of critical
importance to the success of the company.

 

II.         ELIGIBLE PARTICIPANTS AND TARGETS

Executive Vice Presidents.  Each participant’s target incentive is expressed as
a percentage of his/her base salary (which percentage shall be approved by the
Chairman).

 

III.        BONUS POOL

The officer bonus plans of USCC are discretionary in nature, and are based in
part, on company performance, individual performance, and individual bonus
targets, which contribute to the formation and size of an aggregate bonus pool
for all USCC officers.  Not in limitation of the foregoing, negative discretion
may be used to reduce the portion of any bonus calculated pursuant to this plan
with respect to company performance.   

 

This officer bonus pool is determined by taking each officer’s target annual
bonus payout (calculated as a percentage of the officer’s base salary)
multiplied by the company / regional performance percentage attainment number
achieved under the applicable officers bonus plan.  The President and CEO will
consider the performance factors (See Performance Measures in Section IV below)
and any other information he/she deems relevant in determining the amount
available under the bonus pool.  This pool and payouts are not vested until the
bonus payout date. To the extent and only to the extent that any bonus is paid
for a performance year, such bonus shall be deemed to have been earned on
December 31 of that performance year.  (See Attachment I - Administrative
Guidelines)

The President and CEO determines the actual payout that each officer will
receive and is not bound to adhere to any guideline.  However, the sum of all
participants’ actual awards cannot deviate from the officer bonus pool by
+ /-18% for the plan year.   The Chairman must approve all officer bonuses prior
to payout.

IV.        PERFORMANCE MEASURES

The following performance measures, using weights and definitions as approved by
the Chairman, will be considered in evaluating the achievements of the officer
team for the purposes of this Plan.  These components were selected as the best
measures of USCC’s growth and success, and are consistent with those used for
other levels of USCC management.  Payouts based on each of these measures will
be evaluated using the 2010 Executive Officer Annual Incentive Plan Matrices and
the relative weighting of each measure that are approved by the Chairman. 

 

Performance Measures

Growth Factors

      * Customer Addition Equivalents

      * Customer Defections

      * Consolidated Revenue

Profit Factors

      * Cash Costs Per Customer

      * Consolidated Cash Flow

 

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V.         MISCELLANEOUS PROVISIONS

Management reserves the right to amend or discontinue the Plan at any time, with
or without notice. 

 

There are no oral agreements or understandings between USCC and the participants
affecting or relating to this Plan not referenced herein.  If the participant
fails to adhere to the ethical and legal standards as referenced by USCC policy,
USCC shall have the right to revoke this program, reduce or eliminate
compensation as it applies to the violator, or any other remedy as provided by
corporate policy or law.

 

This program shall not be construed as an employment contract or as a promise of
continuing employment between USCC and the associate.  Employment with USCC is
terminable at will, i.e.; either the participant or USCC may terminate the
relationship at any time, with or without cause. 

 

 

________________________________________              ______________________

President and
CEO                                                                   Date

 

 

________________________________________              ______________________

Chairman                                                                                 
Date

 

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Attachment I

 

 

PLAN YEAR EFFECTIVE DATES:

January 1, 2010 – December 31, 2010

GENERAL ADMINISTRATION:

The target annual bonus payout for a participant will be based on the
associate’s base salary as of December 31, 2010. 

VESTING

The bonus does not vest and no bonus shall be paid unless the associate remains
employed through the actual bonus payout date. Not in limitation of the
foregoing, negative discretion may be used to reduce the portion of any bonus
calculated pursuant to this plan with respect to company performance.  To the
extent and only to the extent that any bonus is paid for the plan year, such
bonus shall be deemed to have been earned on December 31, 2010.  Special rules
apply to those associates who retire or die before the actual bonus payout date
(see below).

INDIVIDUAL PERFORMANCE

Any associate who receives a 2010 annual individual performance rating of
‘Partially Meets Expectations (PM),’ or ‘Fails to Meet Expectations (FM),’ is
not eligible for a payout. 

SEPARATION PRIOR TO PAYOUT VESTING DATE

Not eligible for a payout unless separation is because of retirement or death
(see below), or unless approved by the Executive Vice President and Chief Human
Resources Officer.

RETIREMENT /DEATH   Prior to Payout Vesting Date

Payout based on a proration for time worked during the plan year, individual
performance, and the plan attainment percentage.

LOA (FMLA)

                                                                                                            

During Plan Year:

LOA (Non-FMLA)

Eligible for payout based on individual performance, and the plan attainment
percentage. No prorations.

During Plan Year:

 

Eligible for payout based on proration for time worked during the plan year,
individual performance and the plan attainment percentage.

MILITARY LEAVE

During Plan Year:

 

Eligible for payout based on individual performance, and the plan attainment
percentage.  No prorations.

TRANSFERS/PROMOTIONS DURING PLAN YEAR

 

Within/ Between Annual Plans:

 

If an associate is promoted / transferred within or between incentive plan(s),
no prorations will be made in determining the bonus pool.  The pool allocation
will be based on the associate’s plan as of 12/31/10.  The actual bonus payout
will be recommended by the associate’s immediate leader and approved by the
EVP.  It will be based on plan attainment as well as individual performance.
 

Between an Annual Plan and a Quarterly or Monthly Plan:

Prorated payouts from both positions/plans will be determined following end of
plan year.   The following factors will be considered in the determination of
the payout: both plans’ attainment percentages, individual performance in each
job/plan,  the last base salary from each position occupied during the plan year
(if applicable), target incentive assigned for each position’s pay grade, and
percentage of time worked in each position/plan during the plan year.

NEW HIRES DURING THE PLAN YEAR

Associates hired during the plan year will be eligible to participate in the
Plan on a prorated (percentage of time worked in the year) basis.

The associate must have a start date of at least 11/30/10 in order to be
eligible to receive a prorated payout.  Any associate hired between 12/01/10 and
12/31/10 will not receive a payout from the Plan.  

TRANSFERS TO/ FROM TDS DURING THE PLAN YEAR

If an associate transfers to/from another TDS business unit, he/she will receive
a prorated payout based on the factors listed above. 

BONUS PAYOUT DATE

Bonuses are to be paid during the period commencing on January 1, 2011 and
ending on March 15, 2011.  Historically bonuses have been paid in March on or
before March 15th of each year following the end of the plan effective date
(12/31).  Notwithstanding the foregoing, in the event that payment by March 15,
2011 is administratively impracticable and such impracticability was
unforeseeable (in each case, such that the payment continues to qualify as a
“short-term deferral” within the meaning of section 409A of the Internal Revenue
Code), payment will be made as soon as administratively practicable after March
15, 2011, but in no event later than December 31, 2011.  Payment will be in the
form of a lump sum.

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