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):  April 2, 2019
  USMLOGOA01.JPG
UNITED STATES CELLULAR CORPORATION
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Delaware
001-09712
62-1147325
(State or other jurisdiction
(Commission File Number)
(IRS Employer Identification No.)
of incorporation or organization)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
□
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
□
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
□
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
□
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).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
□
Emerging growth company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
□
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
This Current Report on Form 8-K is being filed by United States Cellular Corporation (U.S. Cellular) to describe and file as an Exhibit a form of agreement with respect to "named executive officers" of U.S. Cellular as specified in paragraph (e) of Item 5.02 of Form 8-K.

2019 Executive Officer Annual Incentive Plan
As of April 2, 2019, the U.S. Cellular 2019 Executive Officer Annual Incentive Plan (2019 Executive 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 2019 Executive Plan are: 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 importance to the success of U.S. Cellular.  Eligible participants in the 2019 Executive Plan are all executive officers of U.S. Cellular, who are defined in the 2019 Executive Plan as all Executive Vice Presidents.
The following performance measures will be considered for the purposes of the 2019 Executive Plan:
Performance Measures
Component Weighting
Overall Plan Weighting
Consolidated Total Operating Revenues
35%
21%
Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, and Accretion
30%
18%
Consolidated Capital Expenditures
20%
12%
Customer Engagement
15%
9%
Company Performance
 
60%
Chairman Assessment on   Strategic Initiatives
 
10%
Individual Performance
 
30%
 

General Bonus Information
It is anticipated that bonuses for 2019 will be paid in March 2020 on or before March 15, 2020 (bonus payout date), or as soon as administratively practicable after March 15, 2020, but in no event later than December 31, 2020. However, in the event of a payout in connection with retirement or death, the bonus will be paid as soon as administratively 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 2019 Executive 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. 
The foregoing description of the 2019 Executive Plan is not purported to be complete with respect to the material terms of such plan and is qualified by reference to the complete 2019 Executive 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:




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:
April 5, 2019
By:
/s/  Steven T. Campbell
 
 
 
Steven T. Campbell
 
 
 
Executive Vice President - Finance,
 
 
 
Chief Financial Officer and Treasurer
 
 
 
(principal financial officer)





Exhibit 10.1
USMLOGOA04.JPG
UNITED STATES CELLULAR CORPORATION
2019 EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN
Effective January 1, 2019
I.
Purpose
•
To provide incentive for the executive officers of United States Cellular Corporation (“U.S. Cellular” or “Company”) 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 importance to the success of the Company.

II.
Eligible Participants

The following U.S. Cellular officers are eligible to participate in this 2019 Executive Officer Annual Incentive Plan (“Plan”): all Executive Vice Presidents.

III.
Performance Measures & Weightings

Performance Measures
Component Weighting
Overall Plan Weighting
Consolidated Total Operating Revenues
35%
21%
Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Accretion
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 Operating Revenues: Total operating revenues determined on a consolidated company-wide basis and in a manner consistent with U.S. Cellular’s presentation of total operating revenues for external reporting purposes.  
 
Consolidated Adjusted EBITDA (i.e., Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Accretion):   Adjusted EBITDA determined on a consolidated company-wide basis and in a manner consistent with U.S. Cellular’s presentation of Adjusted EBITDA for external reporting purposes, and further adjusted to remove (1) the effects of equity in earnings of unconsolidated entities, determined on a consolidated company-wide basis and in a manner consistent with U.S. Cellular’s presentation of equity in earnings of unconsolidated entities for external reporting purposes, and (2) expenses associated with the annual bonus and performance share unit plans.
 




Consolidated Capital Expenditures:   Capital expenditures determined on a consolidated company-wide basis and in a manner consistent with 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 could 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 of the Chairman.
 
Customer Engagement:  Customer Engagement as measured by the Loyalty Index Score from the Customer Engagement Total Experience Survey. The Loyalty Index Score is a calculated score of customers’ responses based on their overall experience of U.S. Cellular, including overall brand, network and customer experience, laddering to overall satisfaction, likelihood to recommend and likelihood to continue to do business with U.S. Cellular.

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 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 participating officer’s individual 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.
▪
Executive level leadership and teamwork.
▪
Identification and development of key talent for succession planning purposes.
▪
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 feedback received on the participating officer.
▪
The participating 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-Frank 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. Cellular and the participating 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 bonus payments, if any, will be paid to the participating officers. U.S. Cellular reserves the right to modify or terminate the Plan at its sole discretion, at 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 participating 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 Performance Measures:

Performance Measure
Minimum
Maximum
Consolidated Total Operating Revenues
90%
110%
Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Accretion
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 Operating Revenues
50%
100%
225%
Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Accretion
50%
100%
225%
Consolidated Capital Expenditures
50%
100%
225%
Customer Engagement
50%
100%
225%


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 determined and approved at the discretion of the Chairman.


Chairman Assessment on Strategic Initiatives:

Performance Criteria
% Payout Range
Far exceeds expectations target performance: Performance greatly exceeded that which was planned and expected.
150% - 200%
Exceeds expectations target performance: Performance significantly exceeded that which was planned and expected.
120% - 150%
Meets expectations target performance : Performance was essentially equivalent 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%
Fails to meet target performance:  Given the conditions that prevailed, performance was not sufficient 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%



President and CEO
 
Date
 
 
 
Chairman
 
Date






Exhibit A
Administrative Guidelines
PLAN YEAR EFFECTIVE DATES
January 1, 2019 - December 31, 2019
GENERAL ADMINISTRATION
The target annual bonus payout for Plan participants will be based on the participating 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, equity and any additional compensation not related to base earnings).
VESTING
The bonus does not vest and no bonus shall be paid unless the participating officer remains employed through the actual bonus payout date. Special rules apply to those participating officers 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, 2019.
NEW HIRE ELIGIBILITY
Eligibility for participation in this Plan and any payout will be determined at the discretion of the President 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


DEATH
Prior to Payout Vesting Date
Participating 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).

In the event of death or retirement during 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 described 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 assessment 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, Paid Parental Leave, 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 participating 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 a participating officer is promoted / transferred within or between annual incentive plan(s), no pro-rations will be made in determining the officer’s bonus. The participating officer’s bonus will be based on the officer’s plan as of 12/31/19.

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 plans’ attainment percentages, individual performance in each job/plan, the last base earnings 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.
TRANSFERS TO/ FROM TDS DURING THE PLAN YEAR
If a participating 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
Historically, bonuses have been paid in March on or before March 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, 2020 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, 2020, but in no event later than December 31, 2020. Payment will be in the form of a lump sum.