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.

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.

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

 

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.

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.

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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.

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.

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.