EXHIBIT 10.1


 


UNITED STATES
CELLULAR CORPORATION


2013 OFFICER ANNUAL
INCENTIVE PLAN


Effective January 1,
2013


 


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 officers
in relation to their success in meeting and exceeding the performance targets;
and


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


 


II.            ELIGIBLE PARTICIPANTS 


All U.S. Cellular Executive
Officers and Vice President Level Officers are eligible to participate in the
Plan.  


 


III.          PERFORMANCE MEASURES & WEIGHTINGS


 


	
  Company Performance

  	
  Component Weighting

  	
  Overall Plan Weighting

  
	
  Consolidated Service Revenues

  	
  40%

  	
  24%

  
	
  Consolidated Adjusted Income
  Before Income Taxes

  	
  35%

  	
  21%

  
	
  Consolidated Capital
  Expenditures

  	
  25%

  	
  15%

  
	
  Company Performance

  	
   

  	
  60%

  
	
   

  	
   

  	
   

  
	
  Chairman Assessment on
  Strategic Initiatives

  	
   

  	
  10%

  
	
   

  	
   

  	
   

  
	
  Individual Performance

  	
   

  	
  30%

  




 


IV.          PERFORMANCE MEASURES DEFINITIONS


 


Company Performance:


Weighting: 60%:     


 


Consolidated Service
Revenues: Actual service revenues
measured against targeted service revenues determined on a consolidated
company-wide basis and in a manner consistent to U.S. Cellular's
presentation of service revenues for external reporting purposes.  
Equipment revenue is excluded from this calculation. 


 


Consolidated Adjusted Income
Before Income Taxes (AIBIT): 
Actual AIBIT measured against targeted AIBIT determined on a consolidated
company-wide basis and in a manner consistent to U.S. Cellular's
presentation of AIBIT for external reporting purposes.  AIBIT will be
determined from the Consolidated Statement of Operations, and is defined as
income before income taxes, adjusted for depreciation, amortization and
accretion, net gain or loss on sale of business and other exit costs (if any),
and interest expense.  


 


Consolidated Capital
Expenditures: Actual capital
expenditures measured against targeted capital expenditures determined on
a consolidated company-wide basis and in a manner consistent to U.S.
Cellular's presentation of capital expenditures for external reporting purposes. 
The measurement of actual capital expenditures against targeted capital
expenditures may not be sufficiently comprehensive since it would measure what
is spent, but not necessarily the efficiency and/or productivity of what is
spent.  Therefore, if warranted, the measurement of actual expenditures vs.
targeted expenditures will incorporate an adjustment for spending
efficiency/productivity which could include an assessment of the “degree of
completion” of certain projects.  Such an assessment will be made and
recommended by senior management and will be subject to the review and approval
of the Chairman.


 


Notes:


§ 
Results associated with the NY
1&2 markets, acquisitions and / or divestitures, TDS Corporate assessments
and bonus expense will be excluded from the calculations of all measures.


§ 
The Chairman in his discretion may
adjust targets to reflect unanticipated events. 


 


 


 









 










 








 








Chairman
Assessment on Strategic Initiatives:


Weighting: 10%:     


 


The Chairman in his qualitative
and subjective assessment of U.S. Cellular’s overall company performance during
the year will consider the following key factors and any other information he
deems relevant in determining the level of attainment for this measure:


§ 
Achievement of key goals and
objectives provided to the U.S. Cellular board of directors 


§ 
Accomplishing / making commendable
progress on major initiatives for the year to the extent not covered under the
key goals and objectives provided to the board of directors


§ 
Developing and enhancing
strategies and plans that strengthen the company’s ability to successfully
compete in the marketplace


 


Individual Performance:


Weighting: 30%:     


 


Each
officer’s overall performance for the year will be assessed by the President
and CEO based on such officer’s effectiveness/success with regard to:


 


§ 
Carrying out
his/her ongoing responsibilities and key initiatives during the performance
year. 


§ 
Recommending/making
decisions; taking actions; and providing support, assistance and counsel to
executive management and other leaders throughout the business.


 


In
making these assessments, the President and CEO will take into consideration:


 


§ 
Evaluation of
the officer’s performance in the above areas.


§ 
Performance
feedback received on the officer.  


§ 
The officer’s
report on his/her activities/accomplishments for the performance year.












 










 








 








 


V.            MISCELLANEOUS
PROVISIONS


U.S. Cellular 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 thereunder, 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.  


 


	
  Kenneth R.
  Meyers

  	
   

  	
  7/18/13

  	
   

  
	
  President and
  CEO

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LeRoy T.
  Carlson, Jr.

  	
   

  	
  7/22/13

  	
   

  
	
  Chairman

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  














 










 








 








 


VI.          BONUS RANGES AS A PERCENT OF TARGET


 


The bonus ranges were set to
reinforce the Company’s pay for performance culture.  Minimum performance
levels for each component need to be achieved before any bonus is earned. 
The narrow ranges result in substantial reductions in bonuses when targets are
not achieved, and greater rewards for above target performance.


 


Company Performance
Measures:


                 


	
  Performance
  Measure

  	
  Minimum

  	
  Maximum

  
	
  Consolidated
  Service Revenues

  	
  90%

  	
  110%

  
	
  Consolidated
  Adjusted Income Before Income Taxes 

  	
  85%

  	
  115%

  
	
  Consolidated
  Capital Expenditures

  	
  105%

  	
  90%

  




 


Bonus
Payouts As A Percent Of Target At Minimum, And Maximum Performance Levels:


 


	
  Performance
  Measure

  	
  Minimum

  	
  Target

  	
  Maximum

  
	
  Consolidated
  Service Revenues

  	
  50%

  	
  100%

  	
  200%

  
	
  Consolidated
  Adjusted Income Before Income Taxes

  	
  50%

  	
  100%

  	
  200%

  
	
  Consolidated
  Capital Expenditures

  	
  50%

  	
  100%

  	
  200%

  




 


Bonus
payouts between the minimum and target and between target and maximum target
performance levels will be computed by interpolation.


 


Any
bonus for performance below the minimum percentage will be at the discretion of
the Chairman.


 


Chairman Assessment on
Strategic Initiatives:  


 


	
  Performance Criteria

  	
  % Payout of Target

  
	
  Far exceeds target
  performance: Performance greatly
  exceeded that which was planned and expected.

  	
  150% - 200%

  
	
  Significantly exceeds
  target performance: Performance
  substantially exceeds that which was planned and expected.

  	
  120% - 150% 

  
	
  Somewhat exceeds/fully
  meets / almost fully meets target performance:  Performance was close to that which was planned
  and expected.

  	
  80% -120%

  
	
  Partially meets target
  performance: Given the conditions
  that prevailed, performance was sufficient to merit a partial bonus.

  	
  Up to 80%

  
	
  Well below target
  performance: Given the conditions
  that prevailed, performance was not sufficient to merit any bonus

  	
  0%

  




 


Individual Performance:  


 


	
  Performance Criteria

  	
  % Payout of Target

  
	
  Far exceeds target
  performance: Performance greatly
  exceeded that which was planned and expected.

  	
  150% - 200%

  
	
  Significantly exceeds
  target performance: Performance
  substantially exceeds that which was planned and expected.

  	
  120% - 150% 

  
	
  Somewhat exceeds/fully
  meets / almost fully meets target performance:  Performance was close to that which was planned
  and expected.

  	
  80% -120%

  
	
  Partially meets target
  performance: Given the conditions
  that prevailed, performance was sufficient to merit a partial bonus.

  	
  Up to 80%

  
	
  Well below target
  performance: Given the conditions
  that prevailed, performance was not sufficient to merit any bonus

  	
  0%

  














 










 








 








 


Administrative
Guidelines


 


	
  PLAN YEAR EFFECTIVE DATES:

  	
  January 1, 2013 – December 31, 2013

  
	
  GENERAL ADMINISTRATION:

  	
  The target annual bonus payout for an associate will be
  based on the associate’s base salary as of December 31, 2013.  

   

  
	
  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, 2013.  

  
	
  INDIVIDUAL PERFORMANCE

  	
  Any associate who receives a 2013 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
  associate’s target bonus.  The associate’s target bonus will be based on the
  associate’s plan as of 12/31/13.  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 11/30/13
  in order to be eligible to receive a prorated payout.  Any associate hired
  between 12/01/13 and 12/31/13 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, 2014 and ending on March 15, 2014. 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, 2014 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, 2014, but in no event later than December 31,
  2014.  Payment will be in the form of a lump sum.