8-K

FORM 8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 30, 2008

UNITED STATES CELLULAR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-9712	62-1147325
(State or other	(Commission	(IRS Employer
jurisdiction of	File Number)	Identification No.)
incorporation)
8410 West Bryn Mawr, Suite 700, 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):

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

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

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

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

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

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

On June 30, 2008, the United States Cellular Corporation (“U.S. Cellular”) 2008 Executive Officer Annual Incentive Plan Effective January 1, 2008 (“Executive Incentive Plan”) was approved by U.S. Cellular’s Chairman, who does not participate in such incentive plan.

The purposes of the Executive Incentive Plan are: to provide incentive for the officers of U.S. Cellular to extend their best efforts toward achieving superior results in relation to key business measures; to reward U.S. Cellular’s executive officers in relation to their success in meeting and exceeding the performance targets; and to help U.S. Cellular attract and retain talented leaders in positions of critical importance to the success of U.S. Cellular. Eligible participants in the Executive Incentive Plan are executive vice presidents and senior vice presidents of U.S. Cellular. Each participant’s target incentive is expressed as a percentage of base salary.

The Executive Incentive Plan and other officer bonus plans of U.S. Cellular are discretionary in nature and are based, in part, on company performance, individual performance, and individual bonus targets, which contribute to the formation and size of an aggregate bonus pool for all U.S. Cellular officers.

This officer bonus pool is determined by taking each officer’s target annual bonus payout (calculated as a percentage of the officer’s annual base salary) multiplied by the company / regional performance percentage attainment number achieved under the applicable officer bonus plan.  The President and CEO will consider the performance factors (see below) and any other information he deems relevant in determining the amount available under the bonus pool.  This pool is not earned, nor are payouts vested until the bonus payout date.

The President and CEO determines the actual payout that each officer will receive and is not bound to adhere to any guideline.  However, the sum of all participants’ actual awards cannot deviate from the officer bonus pool by + /- 18% for 2008.  The Chairman must approve all officer bonuses prior to payout.

The following performance measures, using weights and definitions as approved by the Chairman, will be considered in evaluating the achievements of the executive officer team for the purposes of this plan:  Customer Addition Equivalents; Customer Defections; Consolidated Revenue; Improvement on Return on Capital; and Consolidated Cash Flow.

The foregoing description of the Executive 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 Executive Incentive Plan for the material terms of such plan, which is filed herewith as Exhibit 10.1 and incorporated by reference herein.

There is no written bonus plan for the President and CEO. The bonus of the U.S. Cellular President and CEO is determined in a manner similar to the foregoing, but with some differences. In addition to the factors described above for all executive officers in general, the Chairman considers compensation paid to chief executive officers of other comparable companies, including those which are divisions or subsidiaries of parent companies.  These companies include the peer companies included in the “Stock Performance Graph” in U.S. Cellular’s annual report to shareholders.  No written or formal list of specific companies is prepared.  Instead, the Chairman is provided with information about executive compensation at these other companies by the Vice President of Human Resources of Telephone and Data Systems, Inc. (“TDS”), the parent of U.S. Cellular.  This information includes compensation reported in proxy statements of comparable companies and salary surveys.  The Chairman uses these sources and makes a determination of appropriate sources, companies and ranges for the President and CEO, based on the judgment of the Chairman.

Item 9.01.  Financial Statements and Exhibits

(d)   Exhibits:

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

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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, thereto duly authorized.

United States Cellular Corporation

(Registrant)

Date:  July 7, 2008

By:	/s/ Steven T. Campbell
	Steven T. Campbell
	Executive Vice President – Finance,
	Chief Financial Officer and Treasurer

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EXHIBIT INDEX

The following exhibit is filed herewith as noted below.

Exhibit Number	Description of Exhibit
10.1	United States Cellular Corporation 2008 Executive Officer Annual Incentive Plan
99.1	Private Securities Litigation Reform Act of 1995 Safe Harbor Cautionary Statement

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EX-10.1

Exhibit 10.1

UNITED STATES CELLULAR CORPORATION

2008 EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN

Effective January 1, 2008

I.PURPOSE

·To provide incentive for the officers of U.S. Cellular (USCC) to extend their best efforts towards achieving superior results in relation to key business measures;

·To reward USCC’s executive officers in relation to their success in meeting and exceeding the performance targets; and

·To help USCC attract and retain talented leaders in positions of critical importance to the success of the company.

II.ELIGIBLE PARTICIPANTS AND TARGETS

Executive Vice Presidents and Senior Vice President.  Each participant’s target incentive is expressed as a percentage of his/her base salary (which percentage shall be approved by the Chairman).

III.BONUS POOL

The officer bonus plans of USCC are discretionary in nature, and are based in part, on company performance, individual performance, and individual bonus targets, which contribute to the formation and size of an aggregate bonus pool for all USCC officers.

This officer bonus pool is determined by taking each officer’s target annual bonus payout (calculated as a percentage of the officer’s base salary) multiplied by the company / regional performance percentage attainment number achieved under the applicable officers bonus plan.  The President and CEO will consider the performance factors (See Performance Measures in Section IV below) and any other information he deems relevant in determining the amount available under the bonus pool.  This pool is not earned, nor are payouts vested until the bonus payout date.  (See Attachment I - Administrative Guidelines)

The President and CEO determines the actual payout that each officer will receive and is not bound to adhere to any guideline.  However, the sum of all participants’ actual awards cannot deviate from the officer bonus pool by + /-18% for 2008.  The Chairman must approve all officer bonuses prior to payout.

IV.PERFORMANCE MEASURES

The following performance measures, using weights and definitions as approved by the Chairman, will be considered in evaluating the achievements of the officer team for the purposes of this Plan.  These components were selected as the best measures of USCC’s growth and success, and are consistent with those used for other levels of USCC management.  Payouts based on each of these measures will be evaluated using the 2008 Executive Officer Annual Incentive Plan Matrices and the relative weighting of each measure that are approved by the Chairman.

Performance Measures

Growth Factors

· Customer Addition Equivalents

· Customer Defections

· Consolidated Revenue

Profit Factors

· Improvement on Return on Capital

· Consolidated Cash Flow

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V.MISCELLANEOUS PROVISIONS

Management reserves the right to amend or discontinue the Plan at any time, with or without notice.

There are no oral agreements or understandings between USCC 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 USCC policy, USCC shall have the right to revoke this program, reduce or eliminate compensation as it applies to the violator, or any other remedy as provided by corporate policy or law.

This program shall not be construed as an employment contract or as a promise of continuing employment between USCC and the associate.  Employment with USCC is terminable at will, i.e.; either the participant or USCC may terminate the relationship at any time, with or without cause.

President and CEO	Date
Chairman	Date

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Attachment I

Administrative Guidelines

PLAN EFFECTIVE DATES:	January 1, 2008 – December 31, 2008
GENERAL ADMINISTRATION:	The target annual bonus payout for a participant will be based on the associate’s base salary as of December 31, 2008.
VESTING	The bonus is not ‘earned,’ and does not vest 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).
INDIVIDUAL PERFORMANCE	Any associate who receives a 2008 annual individual performance rating of ‘Partially Meets Expectations (PM),’ or ‘Fails to Meet Expectations (FM),’ is not eligible for a 2008 Plan 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 Sr. Vice President of Human Resources.
RETIREMENT/DEATH PRIOR TO PAYOUT VESTING DATE	Payout based on a proration for time worked during the plan year (2008), individual performance, and the plan attainment percentage assigned by the CEO.
LOA (FMLA) DURING PLAN YEAR	Full payout made; no prorations.
LOA (NON-FMLA) DURING PLAN YEAR:	Payout based on a proration for time worked during the plan year (2008), individual performance, and the plan attainment percentage assigned by the CEO.
MILITARY LEAVE	Full payout made, provided associate’s performance was meeting expectations.
TRANSFERS/ PROMOTIONS DURING PLAN YEAR Within/Between Annual Plans:	If an associate is promoted / transferred within or between incentive plan(s), no prorations will be made in determining the bonus pool. The pool allocation will be based on the associate’s plan as of 12/31/08. The actual bonus payout will be recommended by the associate’s immediate leader and approved by the EVP/SVP. It will be based on plan attainment as well as individual performance.
Between an Annual Plan and a Quarterly or Monthly Plan:	Prorated payouts from both positions/plans will be determined following end of 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 (2008).
NEW HIRES DURING THE PLAN YEAR	Associates hired during 2008 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 of at least 11/30/08 in order to be eligible to receive a prorated payout. Any associate hired between 12/01/08 and 12/31/08 will not receive a payout from the 2008 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, 2009 and ending on March 15, 2009. Historically, bonuses have been paid on March 15th of each year following the end of the plan effective date (12/31). Notwithstanding the foregoing, in the event that payment by March 15, 2009 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, 2009, but in no event later than December 31, 2009. Payment will be in the form of a lump sum.

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EX-99.1

Exhibit 99.1

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

SAFE HARBOR CAUTIONARY STATEMENT

This Form 8-K and/or press release attached to this Form 8-K contain statements that are not based on historical fact and represent forward-looking statements, as this term is defined in the Private Securities Litigation Reform Act of 1995.  All statements, other than statements of historical facts, that address activities, events or developments that U.S. Cellular intends, expects, projects, believes, estimates, plans or anticipates will or may occur in the future are forward-looking statements.  The words “believes,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “projects” and similar expressions are intended to identify these forward-looking statements, but are not the exclusive means of identifying them. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward-looking statements.  Such risks, uncertainties and other factors include those set forth below, as more fully discussed under “Risk Factors” in the most recent filing of U.S. Cellular’s Form 10-K, as updated by any U.S. Cellular Form 10-Q filed subsequent to such Form 10-K.  However, such factors are not necessarily all of the important factors that could cause actual results, performance or achievements to differ materially from those expressed in, or implied by, the forward-looking statements contained in this document.  Other unknown or unpredictable factors also could have material adverse effects on future results, performance or achievements.  U.S. Cellular undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise.   You should carefully consider the Risk Factors in the most recent filing of U.S. Cellular’s Form 10-K, as updated by any U.S. Cellular Form 10-Q filed subsequent to such Form 10-K, the following factors and other information contained in, or incorporated by reference into, this Form 8-K and/or press release attached to this Form 8-K to understand the material risks relating to U.S. Cellular’s business.

·Intense competition in the markets in which U.S. Cellular operates could adversely affect U.S. Cellular’s revenues or increase its costs to compete.

·A failure by U.S. Cellular’s service offerings to meet customer expectations could limit U.S. Cellular’s ability to attract and retain customers and could have an adverse effect on U.S. Cellular’s operations.

·U.S. Cellular’s system infrastructure may not be capable of supporting changes in technologies and services expected by customers, which could result in lost customers and revenues.

·An inability to obtain or maintain roaming arrangements with other carriers on terms that are acceptable to U.S. Cellular could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.  Such agreements cover traditional voice services as well as data services, which are an area of strong growth for U.S. Cellular and other carriers.  U.S. Cellular’s rate of adoption of new technologies, such as those enabling high-speed data services, could affect its ability to enter into or maintain roaming agreements with other carriers.

·Changes in access to content for data or video services or access to new handsets being developed by vendors, or an inability to manage its supply chain or inventory successfully, could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·A failure by U.S. Cellular’s business to acquire adequate radio spectrum could have an adverse effect on U.S. Cellular’s business and operations.

·To the extent conducted by the FCC, U.S. Cellular is likely to participate in FCC auctions of additional spectrum in the future and, during certain periods, will be subject to the FCC’s anti-collusion rules, which could have an adverse effect on U.S. Cellular.

·An inability to attract and/or retain management, technical, sales and other personnel could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·U.S. Cellular’s assets are concentrated in the U.S. wireless telecommunications industry.  As a result, its results of operations may fluctuate based on factors related entirely to conditions in this industry.

·Consolidation in the telecommunications industry could adversely affect U.S. Cellular’s revenues and increase its costs of doing business.

·Changes in general economic and business conditions, both nationally and in the markets in which U.S. Cellular operates, could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·Changes in various business factors could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.  These factors include, but are not limited to, demand for or usage of services; the pricing of services; the overall size and growth rate of U.S. Cellular’s customer base; average revenue per unit; penetration rates; churn rates; selling expenses; net customer acquisition and retention costs;

roaming rates; minutes of use; the mix of products and services offered by U.S. Cellular and purchased by customers; and the costs of providing products and services.

·Advances or changes in telecommunications technology, such as Voice over Internet Protocol, WiMAX, or Long-Term Evolution (LTE) could render certain technologies used by U.S. Cellular obsolete, could reduce U.S. Cellular’s revenues or could increase its costs of doing business.

·Changes in U.S. Cellular’s enterprise value, changes in the supply or demand of the market for wireless licenses, adverse developments in the business or the industry in which U.S. Cellular is involved and/or other factors could require U.S. Cellular to recognize impairments in the carrying value of U.S. Cellular’s license costs, goodwill, customer lists and/or physical assets.

·Costs, integration problems or other factors associated with acquisitions/divestitures of properties or licenses and/or expansion of U.S. Cellular’s business could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·A significant portion of U.S. Cellular’s revenues is derived from customers who buy services through independent agents and dealers who market U.S. Cellular’s services on a commission basis.  If U.S. Cellular’s relationships with these agents and dealers are seriously harmed, its revenues could be adversely affected.

·U.S. Cellular’s investments in technologies which are unproven or for which success has not yet been demonstrated may not produce the benefits that U.S. Cellular expects.

·A failure by U.S. Cellular to complete significant network construction and system implementation as part of its plans to improve the quality, coverage, capabilities and capacity of its network could have an adverse effect on its operations.

·Financial difficulties of U.S. Cellular’s key suppliers or vendors, or termination or impairment of U.S. Cellular’s relationships with such suppliers or vendors, could result in a delay or termination of U.S. Cellular’s receipt of equipment, services or content which could adversely affect U.S. Cellular’s business and results of operations.

·U.S. Cellular has significant investments in entities that it does not control.  Losses in the value of such investments could have an adverse effect on U.S. Cellular’s results of operations or financial condition.

·War, conflicts, hostilities and/or terrorist attacks or equipment failure, power outages, natural disasters or breaches of network or information technology security could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·The market price of U.S. Cellular’s Common Shares is subject to fluctuations due to a variety of factors.

·Changes in guidance or interpretations of accounting requirements, changes in industry practice, identification of errors or changes in management assumptions could require amendments to or restatements of financial information or disclosures included in this or prior filings with the SEC.

·Restatements of financial statements by U.S. Cellular and related matters, including resulting delays in filing periodic reports with the SEC, could have an adverse effect on U.S. Cellular’s credit rating, liquidity, financing arrangements, capital resources and ability to access the capital markets, including pursuant to shelf registration statements; could adversely affect U.S. Cellular’s listing arrangements on the American Stock Exchange and/or New York Stock Exchange; and/or could have other negative consequences, any of which could have an adverse effect on the trading prices of U.S. Cellular’s publicly traded equity and/or debt and/or U.S. Cellular’s business, financial condition or results of operations.

·Changes in facts or circumstances, including new or additional information that affects the calculation of potential liabilities for contingent obligations under guarantees, indemnities or otherwise, could require U.S. Cellular to record charges in excess of amounts accrued in the financial statements, if any, which could have an adverse effect on U.S. Cellular’s financial condition or results of operations.

·A failure to successfully remediate the existing material weakness in internal control over financial reporting in a timely manner or the identification of additional material weaknesses in the effectiveness of internal control over financial reporting could result in inaccurate financial statements or other disclosures or fail to prevent fraud, which could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·Early redemptions of debt or repurchases of debt, issuances of debt, changes in operating leases, changes in purchase obligations or other factors or developments could cause the amounts reported under Contractual Obligations in U.S. Cellular’s most recent Annual Report on Form 10-K, as updated by the Quarterly Reports on Form 10-Q, to be different from the amounts actually incurred.

·An increase of U.S. Cellular’s debt in the future could subject U.S. Cellular to various restrictions and higher interest costs and decrease its cash flows and earnings.

·Uncertainty of access to capital for telecommunications companies, deterioration in the capital markets, other changes in market conditions, changes in U.S. Cellular’s credit ratings or other factors could limit or restrict the availability of financing on terms and prices acceptable to U.S. Cellular, which could require U.S. Cellular to reduce its construction, development and acquisition programs.

·Changes in the regulatory environment or a failure by U.S. Cellular to timely or fully comply with any regulatory requirements could adversely affect U.S. Cellular’s financial condition, results of operations or ability to do business.

·Changes in income tax rates, laws, regulations or rulings, or federal or state tax assessments could have an adverse effect on U.S. Cellular’s financial condition or results of operations.

·Settlements, judgments, restraints on its current or future manner of doing business or legal costs resulting from pending and future litigation could have an adverse effect on U.S. Cellular’s financial condition, results of operations or ability to do business.

·The possible development of adverse precedent in litigation or conclusions in professional studies to the effect that radio frequency emissions from handsets, wireless data devices and/or cell sites cause harmful health consequences, including cancer or tumors, or may interfere with various electronic medical devices such as pacemakers, could have an adverse effect on U.S. Cellular’s business, financial condition or results of operations.

·There are potential conflicts of interests between TDS and U.S. Cellular.

·Certain matters, such as control by TDS and provisions in the U.S. Cellular restated certificate of incorporation, may serve to discourage or make more difficult a change in control of U.S. Cellular.

·Any of the foregoing events or other events could cause revenues, customer additions, operating income, capital expenditures and/or any other financial or statistical information to vary from U.S. Cellular’s forward looking estimates by a material amount.

U.S. Cellular undertakes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise.  Readers should evaluate any statements in light of these important factors.