UNITED STATES CELLULAR CORP (Form: 8-K, Received: 04/16/2021 11:11:53)

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 13, 2021

UNITED STATES CELLULAR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

001-09712

62-1147325

(State or other jurisdiction of incorporation)

(Commission File Number)

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

8410 West Bryn Mawr, Chicago, Illinois 60631

(Address of principal executive offices and zip code)

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

(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:


☐			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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Shares, $1 par value

USM

New York Stock Exchange

6.95% Senior Notes due 2060

UZA

New York Stock Exchange

7.25% Senior Notes due 2063

UZB

New York Stock Exchange

7.25% Senior Notes due 2064

UZC

New York Stock Exchange

6.25% Senior Notes due 2069

UZD

New York Stock Exchange

5.50% Senior Notes due 2070

UZE

New York Stock Exchange

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 (UScellular) to describe and file as an Exhibit the UScellular 2021 Officer Annual Incentive Plan (the 2021 Plan) with respect to "named executive officers" of UScellular as specified in paragraph (e) of Item 5.02 of Form 8-K.

As of April 13, 2021, the 2021 Plan was approved both by UScellular’s Chairman and by UScellular’s President and Chief Executive Officer (CEO). The 2021 Plan covers all UScellular officers, including the President and CEO. The UScellular Chairman does not participate in the 2021 Plan.

The purposes of the 2021 Plan are: to provide incentive for the officers of UScellular to extend their best efforts towards achieving superior results in relation to key performance targets; to reward UScellular 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 UScellular.

The following performance measures will be considered for the purposes of the 2021 Plan:


Performance Measures	Component Weighting	Overall Plan Weighting
Consolidated Total Service Revenues	50%	35%
Consolidated Operating Cash Flow	40%	28%
Consolidated Capital Expenditures	10%	7%
Company Performance		70%
Chairman Assessment on Strategic Initiatives		10%
Individual Performance		20%

Under the provisions of the 2021 Plan, no bonus is due unless an officer remains employed through the bonus payout date except that an officer who separates due to retirement or death is eligible for a pro-rated bonus. The President and CEO may approve a bonus, or a pro-rated bonus, for an officer who is not employed through the bonus payout date.

The foregoing description is qualified by reference to the 2021 Plan which is attached hereto as Exhibit 10.1 and incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits


Exhibit Number						Description of Exhibits
10.1						United States Cellular Corporation 2021 Officer Annual Incentive Plan effective January 1, 2021.
104						Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.


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 16, 2021	By:	/s/ Douglas W. Chambers
			Douglas W. Chambers
			Executive Vice President, Chief Financial Officer and Treasurer
			(principal financial officer)

UNITED STATES CELLULAR CORPORATION

2021 OFFICER ANNUAL INCENTIVE PLAN

Effective January 1, 2021

•To provide incentive for the officers of United States Cellular Corporation (“UScellular” or “Company”) to extend their best efforts towards achieving superior results in relation to key performance targets;

•To reward UScellular 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

All UScellular officers, other than officers classified as temporary, are eligible to participate in this 2021 Officer Annual Incentive Plan (“Plan”). Plan eligibility is conditioned on satisfaction of the additional eligibility requirements set forth in Exhibit A, Administrative Guidelines.


III.			PERFORMANCE MEASURES & WEIGHTINGS


Performance Measures	Component Weighting	Overall Plan Weighting
Consolidated Total Service Revenues	50%	35%
Consolidated Operating Cash Flow	40%	28%
Consolidated Capital Expenditures	10%	7%
Company Performance		70%
Chairman Assessment on Strategic Initiatives		10%
Individual Performance		20%


IV.			PERFORMANCE MEASURES DEFINITIONS

Company Performance - Weighting: 70%: Actual performance will be assessed against the targeted performance for each performance measure. The performance measures are defined below.

Consolidated Total Service Revenues: Total service revenues determined on a consolidated company-wide basis and in a manner consistent with UScellular’s presentation of total service revenues for external reporting purposes.

Consolidated Operating Cash Flow: Operating cash flow determined on a consolidated company-wide basis and in a manner consistent with UScellular’s presentation of Adjusted OIBDA (Operating income before depreciation, amortization, accretion, gains and losses) for external reporting purposes, and further adjusted to remove 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 the Company’s presentation of capital expenditures for external reporting purposes.

Chairman Assessment on Strategic Initiatives – Weighting: 10%: The Chairman in his qualitative and subjective assessment of UScellular’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 UScellular 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.

▪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.

Individual Performance - Weighting: 20%: Each officer’s individual performance for the year will be assessed by the President and CEO1 based on such officer’s effectiveness/success with regard to:

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

▪Officer 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 officer.

▪The 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 UScellular and the participants affecting or relating to this Plan not referenced herein. If any participant fails to adhere to the ethical and legal standards as referenced by UScellular policy, UScellular 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 UScellular or other action pursuant to any clawback or recoupment policy which UScellular may adopt from time to time, including without limitation any such policy which UScellular 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 UScellular and the officer. Employment with UScellular is terminable at will, i.e., either the participant or UScellular may terminate the relationship at any time, with or without cause.

The Officer Annual Incentive Plan, as set forth in this document, represents the general guidelines UScellular intends to utilize to determine the bonuses, if any, that will be paid to the officers. UScellular reserves the right to modify or terminate the Plan at its sole discretion, at any time (including during or following the applicable plan year) and for any reason, with or without written notification and without regard to the effect that any such action may have on any officer’s bonus or potential bonus. UScellular 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.

______________________

1 The Chairman (rather than the President and CEO) shall make any decisions involving the President and CEO’s rights or the computation of his or her bonus under the Plan, and all provisions of this Plan shall be interpreted accordingly.


VI.			BONUS RANGES AS A PERCENT OF TARGET

The bonus ranges were set to reinforce the Company’s pay for performance philosophy. 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 Service Revenues	90%	110%
Consolidated Operating Cash Flow	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 Total Service Revenues	50%	100%	200%
Consolidated Operating Cash Flow	50%	100%	200%
Consolidated Capital Expenditures	50%	100%	150%

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 target performance: Performance greatly exceeded that which was planned and expected.			130% - 160%
Exceeds target performance: Performance exceeded that which was planned and expected.			110% - 130%
Meets target performance: Performance was essentially equivalent to that which was planned and expected.			90% - 110%
Partially meets target performance: Given the conditions that prevailed, performance was sufficient to merit a partial bonus.			Up to 90%
Fails to partially 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)			140% - 160%
Exceeds Expectations (EE)			115% - 135%
Meets Expectations (ME)			90% - 110%
Partially Meets Expectations (PM)			0%
Fails to Meet Expectations (FM)			0%

/s/ Laurent C. Therivel

April 12, 2021

President and CEO

Date

/s/ LeRoy T. Carlson, Jr.

April 13, 2021

Chairman

Date

Administrative Guidelines


PLAN YEAR EFFECTIVE DATES			January 1, 2021 - December 31, 2021
GENERAL ADMINISTRATION			The target annual bonus payout for Plan participants will be based on the officer’s base earnings paid during the plan year. Base earnings are defined as base wages, paid time off, and any differential pay (excludes Short-term disability pay, Long-term disability pay, Paid Parental Leave, Military Service Leave of Absence, any Paid Personal Leave of Absence , bonuses, merit-related lump sum payments, equity, on call pay and any additional compensation not related to base earnings).
VESTING			The bonus does not vest and no bonus shall be paid unless the officer remains employed through the actual bonus payout date. In the event of retirement / death prior to the actual bonus payout date, see Separation Prior to Payout Date below.
NEW HIRE ELIGIBILITY			In the case of an officer hired during the plan year, eligibility for participation in this Plan will be determined at the discretion of the President and CEO.
SEPARATION PRIOR TO PAYOUT DATE			Not eligible for a payout unless separation is due to retirement or death under the circumstances described below (or unless approved by the President and CEO).
RETIREMENT or DEATH Prior to Payout Date			In the case of separation due to retirement, the officer must be at least age 55 and have a minimum of 10 years of total combined adjusted service within UScellular and any other TDS business units, as applicable, at the 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 provided that the officer has been employed through at least January 31st of the plan year. An officer who is not employed through at least January 31st of the plan year will not be eligible to receive a prorated bonus payout for the time worked during the year of the event. 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 the prior year based upon actual Plan attainment for company performance (key performance measures and chairman assessment), and individual performance will be paid out at 100% of target. The payout will be made as soon as administratively possible following the date of the event and after receiving actual Plan attainment (but no later than the Bonus Payout Date, as described below).
TRANSFERS/PROMOTIONS WITHIN COMPANY DURING PLAN YEAR			Within/ Between Annual Plans: If an officer is promoted / transferred within or between annual incentive plan(s), no pro-rations will be made in determining the officer’s bonus. The officer’s bonus will be based on the officer’s effective plan as of 12/31/21. 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 eligible base earnings from each position occupied during the plan year (if applicable), target incentive assigned for each associate’s assigned job title, and percentage of time worked in each position/plan during the plan year.
TRANSFERS TO/ FROM TDS DURING THE PLAN YEAR			If an officer transfers to/from another TDS business unit, he/she will be eligible to receive a bonus deemed appropriate by the Chairman, considering all applicable factors.
BONUS PAYOUT DATE			The bonus will be paid no later than March 15th of the year following the end of the plan year (12/31/2021). Notwithstanding the foregoing, in the event that payment by March 15, 2022 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, 2022, but in no event later than December 31, 2022. Payment will be in the form of a lump sum.


I.			PURPOSE