Exhibit 10.1


 


UNITED
STATES CELLULAR CORPORATION


2008
EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN


Effective
January 1, 2008


 


I.              PURPOSE


 


·                  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;


 


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


 


·                  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 and Senior Vice President. 
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.


 


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 deems relevant in determining the amount available under the
bonus pool.  This pool is not earned, nor are payouts vested until
the bonus payout date.  (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 2008.  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 2008 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

  
	
   

  	
   

  
	
   

  	
  ·
  Improvement on Return on Capital

  
	
   

  	
  ·
  Consolidated Cash Flow

  



 


1

















 


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

  



 


2

















 


Attachment
I


 


Administrative
Guidelines


 


	
  PLAN
  EFFECTIVE DATES:

  	
   

  	
  January 1,
  2008 – December 31, 2008

  
	
   

  	
   

  	
   

  
	
  GENERAL
  ADMINISTRATION:

  	
   

  	
  The
  target annual bonus payout for a participant will be based on the associate’s
  base salary as of December 31, 2008.

  
	
   

  	
   

  	
   

  
	
  VESTING

  	
   

  	
  The
  bonus is not ‘earned,’ and does not vest 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).

  
	
   

  	
   

  	
   

  
	
  INDIVIDUAL
  PERFORMANCE

  	
   

  	
  Any
  associate who receives a 2008 annual individual performance rating of
  ‘Partially Meets Expectations (PM),’ or ‘Fails to Meet Expectations (FM),’ is
  not eligible for a 2008 Plan 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 Sr. Vice President of Human Resources.

  
	
   

  	
   

  	
   

  
	
  RETIREMENT/DEATH
  PRIOR TO PAYOUT VESTING DATE

  	
   

  	
  Payout
  based on a proration for time worked during the plan year (2008), individual
  performance, and the plan attainment percentage assigned by the CEO.

  
	
   

  	
   

  	
   

  
	
  LOA
  (FMLA) DURING PLAN YEAR

  	
   

  	
  Full
  payout made; no prorations.

  
	
   

  	
   

  	
   

  
	
  LOA
  (NON-FMLA) DURING PLAN YEAR:

  	
   

  	
  Payout
  based on a proration for time worked during the plan year (2008), individual
  performance, and the plan attainment percentage assigned by the CEO.

  
	
   

  	
   

  	
   

  
	
  MILITARY
  LEAVE

  	
   

  	
  Full
  payout made, provided associate’s performance was meeting expectations.

  
	
   

  	
   

  	
   

  
	
  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 12/31/08. The actual bonus payout
  will be recommended by the associate’s immediate leader and approved by the
  EVP/SVP. 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
  (2008).

  
	
   

  	
   

  	
   

  
	
  NEW
  HIRES DURING THE PLAN YEAR

  	
   

  	
  Associates
  hired during 2008 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 11/30/08 in order to be eligible
  to receive a prorated payout. Any associate hired between 12/01/08 and
  12/31/08 will not receive a payout from the 2008 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, 2009 and
  ending on March 15, 2009.  Historically,
  bonuses have been paid on 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, 2009 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, 2009, but in no event later than December 31, 2009.
  Payment will be in the form of a lump sum.

  



 


3