Exhibit 10.1 

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UNITED STATES CELLULAR CORPORATION

2012 EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN

Effective January 1, 2012

I.          PURPOSE

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

Ø  To reward U.S. Cellular executive officers in relation to their success in
meeting and exceeding performance targets; and

Ø  To help U.S. Cellular attract and retain talented executives in positions of
critical importance to the success of the company.

 

II.         ELIGIBLE PARTICIPANTS AND TARGETS

Executive Vice Presidents are eligible to participate in this Plan.  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 U.S. Cellular 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 U.S. Cellular officers. 

 

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.   Payouts based on each of these measures
will be evaluated using the 2012 Executive Officer Annual Incentive Plan
Matrices approved by the Chairman. 

 

Performance Measures

Financial Measures

Growth Factors

* Customer Addition Equivalents

* Customer Defections

* Consolidated Service Revenues

Profit Factors

* Consolidated Cash Flow

* Cash Cost Per Average Customer Equivalent

Company Performance

* Chairman Assessment of Overall Company Performance

 

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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 or written agreements or understandings between U.S. Cellular
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 U.S. Cellular policy, U.S. Cellular shall have the right to revoke
this Plan, reduce or eliminate compensation as it applies to the violator, or
any other remedy as provided by corporate policy or law.

 

Any compensation earned or paid pursuant to this Plan is subject to forfeiture,
recovery by U.S. Cellular or other action pursuant to any clawback or recoupment
policy which U.S. Cellular may adopt from time to time, including without
limitation any such policy which U.S. Cellular may be required to adopt under
the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing
rules and regulations there under, or as otherwise required by law.

 

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

 

 

    Mary N.
Dillon                                                                                              
May 30, 2012         

President and
CEO                                                                                               
Date

 

 

    LeRoy T. Carlson,
Jr                                                                                    
May 24, 2012         

Chairman                                                                                                               Date

                                                                                                                                     

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Attachment I

Administrative Guidelines

 

 

PLAN YEAR EFFECTIVE DATES:

January 1, 2012 – December 31, 2012

GENERAL ADMINISTRATION:

The target annual bonus payout for an associate will be based on the associate’s
base salary as of December 31, 2012.

 

VESTING

The bonus does not vest and no bonus shall be paid unless the associate remains
employed through the actual bonus payout date. Special rules apply to those
associates who retire or die before the actual bonus payout date (see below).

 

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, 2012.

INDIVIDUAL PERFORMANCE

Any associate who receives a 2012 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)

During Plan Year:

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

 

 

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:

 

 

 

 

Between an Annual Plan and a Quarterly or Monthly Plan:

 

 

 

If an associate is promoted / transferred within or between annual 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 12/31/12. The actual
bonus payout will be approved by the President and CEO and Chairman. It will be
based on plan attainment as well as individual performance.

 

 

Prorated payouts from both positions/plans will be determined following the end
of the 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 on or before 11/30/12 in order to be
eligible to receive a prorated payout. Any associate hired between 12/01/12 and
12/31/12 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, 2013 and
ending on March 15, 2013. Historically bonuses have been paid in March on or
before March 15th of the year following the end of the plan year (12/31).
Notwithstanding the foregoing, in the event that payment by March 15, 2013 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, 2013, but in no
event later than December 31, 2013. Payment will be in the form of a lump sum.

                                                                                                                                               

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