UNITED STATES CELLULAR CORP (Form: 8-K, Received: 05/19/2017 16:14:55)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 15, 2017

UNITED STATES CELLULAR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

001-09712

62-1147325

(State or other jurisdiction of

(Commission

(I.R.S. Employer Identification No.)

incorporation or organization)

File Number)

8410 West Bryn Mawr, Chicago, Illinois 60631

(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (773) 399-8900

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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Emerging growth company

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

The following information is being provided pursuant to paragraph (e) of Item 5.02 of Form 8-K:

United States Cellular Corporation 2017 Executive Officer Annual Incentive Plan.

As of May 15, 2017 the United States Cellular Corporation (“U.S. Cellular”) 2017 Executive Officer Annual Incentive Plan Effective January 1, 2017 (“2017 Incentive Plan”) was approved both by U.S. Cellular’s Chairman and by U.S. Cellular’s President and Chief Executive Officer. Neither the Chairman nor the President and Chief Executive Officer participate in such plan.

The purposes of the 2017 Incentive Plan are: to provide incentive for the executive officers of U.S. Cellular to extend their best efforts towards achieving super ior results in relation to key business performance targets; to reward U.S. Cellular executive officers in relation to their success in meeting and exceeding the performance targets; and to attract and retain talented leaders in positions of critical impor tance to the success of U.S. Cellular. Eligible participants in the 2017 Incentive Plan are all executive officers of U.S. Cellular, which are defined in the 2017 Incentive Plan as all Executive Vice Presidents and the Senior Vice President – Chief Human R esources Officer.

The following performance measures will be considered for the purposes of the 2017 Incentive Plan:

Performance Measures	Component Weighting	Overall Plan Weighting
Consolidated Total Revenues	35%	21%
Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization	30%	18%
Consolidated Capital Expenditures	20%	12%
Customer Engagement	15%	9%
Company Performance		60%
Chairman Assessment on Strategic Initiatives		10%
Individual Performance		30%

It is anticipated that bonuses for 2017 will be paid on or after January 1, 2018 but no later than March 15, 2018 (the “bonus payout date”). However, in the event of a payout in connection with retirement or death, the bonus will be paid as soon as administrati vely possible following such retirement or death, but no later than the bonus payout date. No bonus is due unless an executive officer remains employed through the bonus payout date except that an executive officer who separates due to retirement or death is eligible for a pro-rated bonus. In addition, the President and CEO may approve a bonus, or a pro-rated bonus, for an executive officer who is not employed through the bonus payout date.

Any compensation earned or paid pursuant to the 2017 Incentive Pl an 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.

The foregoing description of the 2017 Incentive Plan is not purported to be complete with respect to the material terms of such plan and is qualified by reference to the complete 2017 Incentive Plan for the material terms of such plan, which is filed herewith as Exhibit 10.1 and incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits:

In accordance with the provisions of Item 601 of Regulation S-K, any exhibits filed or furnished herewith are set forth on the Exhibit Index attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		UNITED STATES CELLULAR CORPORATION
		(Registrant)

Date:	May 19, 2017

		By:	/s/ Steven T. Campbell
			Steven T. Campbell
			Executive Vice President - Finance,
			Chief Financial Officer and Treasurer
			(principal financial officer)

EXHIBIT INDEX

The following exhibits are filed or furnished herewith as noted below.

Exhibit No.		Description

10.1		United States Cellular Corporation 2017 Executive Officer Annual Incentive Plan Effective January 1, 2017

Exhibit 10.1

UNITED STATES CELLULAR CORPORATION

201 7 EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN

Effective January 1, 201 7

I. PURPOSE

To provide incentive for the executive officers of U.S. Cellular to extend their best efforts towards achieving superior results in relation to key business performance targets;
To reward U.S. Cellular executive officers in relation to their success in meeting and exceeding the performance targets; and
To attract and retain talented leaders in positions of critical importanc e to the success of the Company.

II. ELIGIBLE PARTICIPANTS

All U.S. Cellular Executive Officers are eligible to participate in this 201 7 Executive Officer Annual Incentive Plan (“Plan”). Executive officers include all Executive Vice Presidents and the Senior Vice President - Chief Human Resources Officer.

III. PERFORMANCE MEASURES & WEIGHTINGS

Performance Measures	Component Weighting	Overall Plan Weighting
Consolidated Total Revenues	35%	21%
Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization	30%	18%
Consolidated Capital Expenditures	20%	12%
Customer Engagement	15%	9%
Company Performance		60%
Chairman Assessment on Strategic Initiatives		10%
Individual Performance		30%

IV. PERFORMANCE MEASURES DEFINITIONS

Company Performance – Weighting : 60%: Actual performance will be assessed against the targeted performance for each performance measure. The performance measures are defined below.

Consolidated Total Revenues: Total revenues determined on a consolidated company-wide basis and in a man ner consistent to U.S. Cellular’ s presentation of total revenues for external reporting purposes.

Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA): Adjusted EBITDA determined on a consolidated company-wide basis and in a manner consistent to U.S. Cellular ’ s presentation of Adjusted EBITDA for external reporting purposes.

Consolidated Capital Expenditures: Capital expenditures determined on a consolidated company-wide basis and in a manner consistent t o 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 because it would measure actual expenditures , but not necessarily the efficiency and/or productivity of those expenditures. Therefore, if appropriate, the measurement of actual expenditures against targeted expenditures could incorporate an adjustment for spending efficiency/productivity which coul d include an assessment of the degree of completion of certain projects. The determination of whether such an adjustment is appropriate and the amount of the adjustment will be made by the President and CEO and will be subject to the review and approval o f the Chairman.

Customer Engagement: Loyalty Index Score determined from the Customer Engagement Total Experience survey. The Loyalty Index Score is a calculated score of customer responses based on customers’ overall experience of the company, including overall brand, network and customer experience, laddering to overall satisfaction, likelihood to recommend and likelihood to continue to do business with USCC.

Notes:

Results associated with acquisitions and / or divestitures will be evaluated on a case-by-case basis to determine whether adjustments to target or actual results are warranted.
The Cha irman 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:

Achiev ement 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 direct ors.
Developing and enhancing strategies and plans that strengthen the Company’s ability to successfully compete in the marketplace.

Individual Performance - Weighting: 30%:

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

Carrying out his/her ongoing responsibilities and key initiatives during the performance year.
Executive level leadership and teamwork.
Identification and development of key talent for succession planning purposes.
Executive officer engagement as measured in large part by the Company’s culture survey.

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

Performance feed back received on the executive officer.
The executive officer’s report on his/her activities/accomplishments for the performance year.

V. MISCELLANEOUS PROVISIONS

The Plan is subject to the Administrative Guidelines attached hereto as Exhibit A. 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-F rank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.

This Plan shall not be construed as an employment contract or as a promise of continuing employment between U.S. Cellul ar and the executive officer . 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.

The Executive Officer Annual Incentive Plan, as set forth in this document, represents the general guidelines U.S. Cellular intends to utilize to determine what executive officer bonus payments, if any, will be paid. U.S. Cellular reserves the right to modify or terminate the Plan at its sole discretion, a t any time and for any reason, with or without written notification and without regard to the effect that any such action may have on any executive officer’s bonus or potential bonus. U.S. Cellular shall have the full power and authority to interpret and administer the Plan and shall be the sole arbiter of all matters of interpretation and application of the Plan.

VI. BONUS RANGES AS A PERCENT OF TARGET

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

Company Perfo rmance Measures:

Performance Measure	Minimum	Maximum
Consolidated Total Revenues	90%	110%
Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization	80%	120%
Consolidated Capital Expenditures	110%	80%
Customer Engagement	95%	110%

Bonus Payouts as a Percent of Target at Minimum and Maximum Performance Levels:

Performance Measure	Minimum	Target	Maximum
Consolidated Total Revenues	50%	100%	225%
Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization	50%	100%	225%
Consolidated Capital Expenditures	50%	100%	225%
Customer Engagement 1	50%	100%	225%

¹ The target for Customer Engagement incorporates a year-over-year improvement in performance, and the payout will be determined based on actual performance against the target.

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

Any bonus for performance below the minimum level will be d etermined and approved at the discretion of the Chairman.

Chairman Assessment on Strategic Initiatives:

Performance Criteria	% Payout Range
Far exceeds target performance: Performance greatly exceeded that which was planned and expected.	150% - 200%
Significantly exceeds target performance: Performance significantly exceeded that which was planned and expected.	120% - 150%
Somewhat exceeds/fully meets/almost fully meets target performance: Performance was essentially equivalent to that which was plan ned 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 across all components of the Plan to merit any bonus.	0%

Individual Performance:

Performance Criteria	% Payout Range
Far Exceeds Expectations (FE)	130% - 150%
Exceeds Expectations (EE)	110% - 130%
Meets Expectations (ME)	80% - 110%
Partially Meets Expectations (PM)	0%
Fails to Meet Expectations (FM)	0%

/s/ Kenneth R. Meyers		5/15/2017
President and CEO		Date

/s/ LeRoy T. Carlson, Jr.		5/15/2017
Chairman		Date

Exhibit A

Administrative G uidelines

PLAN YEAR EFFECTIVE DATES	January 1, 2017 – December 31, 2017
GENERAL ADMINISTRATION	The target annual bonus payout for plan participants will be based on the executive officer ’ s base earnings paid during the bonus period. Base earnings include base wages, paid time off, and any differential pay (excludes short-term disability pay, bonuses and any additional compensation not related to base earnings).
VESTING	The bonus does not vest and no bonus shall be paid unless the executive officer remains employed through the actual bonus payout date. Special rules apply to those executive officers who retire or die before the actual bonus payout date (see below). To the extent and only t o the extent that any bonus is paid for the plan year, such bonus shall be deemed to have been earned on December 31, 2017.
NEW HIRE ELIGIBILITY	Eligibility for participation in this plan and any payout will be determined at the discretion of the Presi dent and CEO.
SEPARATION PRIOR TO PAYOUT VESTING DATE	Not eligible for a payout unless separation is due to retirement or death (see below), or unless approved by the President and CEO.
RETIREMENT Prior to Payout Vesting Date	Executive officer must be at least age 55 and have a minimum of 10 years of 401(k) vesting service at time of retirement to be eligible for a payout (unless otherwise approved by the President and CEO).
DEATH Prior to Payout Vesting Date	In the event of death or retirement dur ing the plan year (1/1 – 12/31) a prorated bonus for time worked at target (100% plan attainment) will be paid. The payout will be made as soon as administratively possible following the date of the event (but no later than the Bonus Payout Date, as descr ibed below). In the event of death or retirement after the plan year, but before the payout date for the plan year, a participant will be eligible to receive a bonus for time worked in the prior year based upon actual plan attainment (company, chairman as sessment and individual performance), or if actual plan attainment is not available on the date of the event, at target (100% plan attainment). The payout will be made as soon as administratively possible following the date of the event (but no later than the Bonus Payout Date, as described below).
LEAVE OF ABSENCE	A leave of absence includes the following: Short-term Disability, FMLA Leave of Absence, Unpaid Medical Leave of Absence, Military Service Leave of Absence and Personal Leave of Absence. Bonus payouts will be prorated for any portion of the plan year for which the executive officer had unpaid hours. Unpaid hours are defined as those hours where accrued benefit time (i.e. sick, vacation, personal, etc.) was NOT applied to the leave of absence.
TRANSFERS/PROMOTIONS DURING PLAN YEAR	Within/ Between Annual Plans: If an executive officer is promoted / transferred within or between annual incentive plan(s), no prorations will be made in determining the executive officer ’ s bonus. The executive officer ’ s bonus will be based on the executive officer ’ s plan as of 12/31/17. Between an Annual Plan and a Quarterly or Monthly Plan: 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 plan ’ attainment percentages, individual performance in each job/plan, the last base salary from each position occupied during the plan year (if applicable), targ et incentive assigned for each position’s pay grade, and percentage of time worked in each position/plan during the plan year.
TRANSFERS TO/ FROM TDS DURING THE PLAN YEAR	If an executive officer transfers to/from another TDS business unit, he/she will be eligible to 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, 2018 and ending on March 15, 2018. Historically, bonuses have been paid in March on or before M arch 15 th of the year following the end of the plan year (12/31). Notwithstanding the foregoing, in the event that payment by March 15, 2018 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, 2018, but in no event later than December 31, 2018. Payment wil l be in the form of a lump sum.