Form 8-K UNITED STATES CELLULAR For: Jun 07
SECURITIES AND EXCHANGE COMMISSION |
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Washington, D.C. 20549 |
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FORM 8-K |
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CURRENT REPORT |
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Pursuant to Section 13 or 15(d) of |
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The Securities Exchange Act of 1934 |
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Date of Report (Date of earliest event reported): June 7, 2016 |
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UNITED STATES CELLULAR CORPORATION |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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001-09712 |
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62-1147325 |
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(State or other jurisdiction of |
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(Commission |
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(I.R.S. Employer Identification No.) |
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incorporation or organization) |
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File Number) |
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8410 West Bryn Mawr, Chicago, Illinois 60631 |
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(Address of principal executive offices) (Zip code) |
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Registrant's telephone number, including area code: (773) 399-8900 |
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Not Applicable |
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(Former name or former address, if changed since last report) |
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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: |
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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)) |
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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 2016 Executive Officer Annual Incentive Plan.
As of June 7, 2016 the United States Cellular Corporation (“U.S. Cellular”) 2016 Executive Officer Annual Incentive Plan Effective January 1, 2016 (“2016 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 2016 Incentive Plan are: to provide incentive for the executive officers of U.S. Cellular to extend their best efforts toward achieving superior results in relation to key business performance targets; to reward U.S. Cellular’s 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 2016 Incentive Plan are all executive officers of U.S. Cellular, which are defined in the 2016 Incentive Plan as all executive vice presidents and the senior vice president – chief human resources officer.
The following performance measures will be considered for the purposes of the 2016 Incentive Plan:
Component Weighting |
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Overall Plan Weighting |
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Consolidated Total Revenues |
35% |
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21% |
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Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization |
30% |
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18% |
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Consolidated Capital Expenditures |
20% |
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12% |
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Customer Engagement |
15% |
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9% |
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Company Performance |
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60% |
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Chairman Assessment on Strategic Initiatives |
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10% |
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Individual Performance |
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30% |
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It is anticipated that bonuses for 2016 will be paid on or after January 1, 2017 but no later than March 15, 2017 (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 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 2016 Incentive 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 2016 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 2016 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.
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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. |
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UNITED STATES CELLULAR CORPORATION |
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(Registrant) |
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Date: |
June 10, 2016 |
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By: |
/s/ Steven T. Campbell |
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Steven T. Campbell |
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Executive Vice President - Finance, Chief Financial Officer and Treasurer |
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(principal financial officer) |
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The following exhibits are filed or furnished herewith as noted below. |
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Exhibit No. |
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Description |
10.1 |
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United States Cellular Corporation 2016 Executive Officer Annual Incentive Plan Effective January 1, 2016 |
UNITED STATES CELLULAR CORPORATION
2016 EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN
Effective January 1, 2016
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 importance to the success of the Company.
II. ELIGIBLE PARTICIPANTS
All U.S. Cellular Executive Officers are eligible to participate in this 2016 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
Component Weighting |
Overall Plan Weighting |
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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 |
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60% |
Chairman Assessment on Strategic Initiatives |
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10% |
Individual Performance |
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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 manner 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 to 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: Performance against targets for the total annual company customer engagement score.
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.
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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 executive officer’s individual performance for the year will be assessed 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.
- Associate 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:
- Evaluation of the executive officer’s performance in the above areas.
- Performance feedback 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. U.S. Cellular reserves the right to amend or discontinue the Plan at any time, with or without notice.
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 program shall not be construed as an employment contract or as a promise of continuing employment between U.S. Cellular and the associate. 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.
VI. BONUS RANGES AS A PERCENT OF TARGET
The bonus ranges were set to reinforce the Company’s pay for performance culture. Minimum performance levels for each component need to be achieved before any bonus is earned. The ranges result in substantial reductions in bonuses when targets are not achieved, and greater rewards for above target performance.
Company Performance Measures:
Minimum |
Maximum |
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Consolidated Total Revenues |
90% |
110% |
Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization |
80% |
120% |
Consolidated Capital Expenditures |
110% |
80% |
Customer Engagement |
80% |
120% |
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Bonus Payouts as a Percent of Target at Minimum and Maximum Performance Levels:
Minimum |
Target |
Maximum |
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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 |
50% |
100% |
200% |
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:
% Payout Range |
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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 was essentially equivalent to that which was planned and expected |
80% - 120% |
Partially meets target performance: Given that 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:
% Payout Range |
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Far Exceeds Expectation (FE) |
130% - 150% |
Exceeds Expectations (EE) |
110% - 130% |
Meets Expectations (ME) |
80% - 110% |
Partially Meets Expectations (PM) |
0% |
Fails to Meet Expectations (FM) |
0% |
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6/7/2016 |
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President and CEO |
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Date |
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/s/ LeRoy T. Carlson, Jr. |
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6/7/2016 |
Chairman |
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Date |
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Within/ Between Annual Plans:
If an associate is promoted / transferred within or between annual incentive plan(s), no prorations will be made in determining the associate’s target bonus. The associate’s target bonus will be based on the associate’s plan as of 12/31/16.
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), target incentive assigned for each position’s pay grade, and percentage of time worked in each position/plan during the plan year. |
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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, 2017 and ending on March 15, 2017. 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, 2017 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, 2017, but in no event later than December 31, 2017. Payment will be in the form of a lump sum. |
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