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 |
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. |
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% |
Exhibit Number | Description of Exhibit | |
10.1 |
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) |
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 |
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 |
▪ | 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. |
▪ | 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. |
▪ | 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. |
▪ | Performance feedback received on the participating officer. |
▪ | The participating officer’s report on his/her activities/accomplishments for the performance year. |
V. | Miscellaneous Provisions |
VI. | Bonus Ranges As A Percent Of Target |
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% |
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% |
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% |
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 |
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 15th 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. |
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