Item 5.02 Resignation of Directors or Officers; election of directors;
Appointment of Chief Officers.
On March 9, 2023, T-Mobile US, Inc. (“T-Mobile” or the “Company”) entered into an amended and restated employment agreement (the “A&R Employment Agreement”) with G. Michael Sievert, its President and Chief Executive Officer extending term by five years. The A&R employment contract replaces the previous employment contract between T-Mobile and Mr. Sievert dated November 15, 2019 in the currently valid version. The term of the A&R employment contract will expire on April 1, 2028, subject to automatic renewal for one year thereafter unless either party provides at least ninety (90) days’ notice of non-renewal.
Pursuant to the A&R employment agreement, Mr. Sievert is entitled to (i) an annual base salary of $1,750,000 initially effective January 1, 2023, which automatically increases to (a) effective January 1, 2024, whichever is greater (x) $1,850,000; or (y) the then-current average annual base salary for chief executive officers in T-Mobile’s then-current pay peer group (the “Peer Group”), (b) effective January 1, 2025, as the case may be, whichever is greater (x) $1,900,000 or (y) the then-current average annual base salary for chief executive officers in T-Mobile’s peer group, and (c) effective January 1, 2026 and January 1, respectively 2027, the greater of (x) $2,000,000 or (y) the then-current average annual base salary for chief executive officers in T-Mobile’s peer group; (ii) beginning in calendar year 2023, an annual short-term cash incentive targeting at least 250% of his base salary (with a maximum award of 200% of target), payable based on the achievement of predetermined performance targets; and (iii) employee benefits to the same extent and on the same terms as such benefits are generally provided by T-Mobile to its officers.
In addition, pursuant to the A&R employment agreement, beginning in calendar year 2023, Mr. Sievert is entitled to annual long-term incentive awards (“LTI awards”) with a target value at the grant date (the “Annual LTI Target”). ), which is not less than $18,500,000, which will be allocated as follows: 50% of this value will be granted in the form of performance-based Restricted Stock Units (“PRSUs”) and the remaining 50% of this value will be granted in the form of time-based Restricted Stock Units (“RSUs”). Mr. Sievert’s annual LTI target automatically increases to (i) for LTI awards granted in calendar year 2024, the higher of (a) $19,000,000, (b) the 60th percentile of the total annual stock incentive target as of grant date for chief executive officers in the T-Mobile peer group, or (c) the annual LTI target for the immediately preceding calendar year; and (ii) for LTI awards granted in calendar years 2025, 2026, 2027 and 2028, the higher of (a) $19,000,000, (b) the 65th percentile of the total value of annual chief executive stock incentive awards Officers at the grant date in the T-Mobile peer group and (c) the annual LTI target applicable for the relevant prior calendar year. With respect to 60% of the aggregate time-based RSUs granted to Mr. Sievert as annual LTI awards in each of calendar years 2023 through 2028 (ie, 30% of the aggregate annual LTI target for each such year), the total duration of the vesting schedule such RSUs will be no longer than the median cumulative vesting schedules of annual time-based stock incentive awards for chief executive officers in T-Mobile’s peer group at the grant date. To fulfill T-Mobile’s obligation under the A&R employment agreement to grant Mr. Sievert LTI awards with an annual LTI target of $18,500,000 for fiscal year 2023, Mr. Sievert will be granted one-time awards of RSUs on April 1, 2023 and PRSUs under the Company’s 2013 Omnibus Incentive Plan (as amended, the “Plan”), in respect of an aggregate target number of T-Mobile common shares equal to the quotient of $2,333,333 divided by the average closing price of T- Mobile will equal common shares for the thirty calendar day period ending five days prior to February 15, 2023, rounded up to the nearest whole share (the “True-Up Awards”). The true-up awards are subject to the same vesting plans and other terms and conditions (including, with respect to the PRSUs, performance targets) that apply to the RSU and PRSU awards granted to Mr. Sievert under the plan on February 15. 2023
The A&R employment agreement provides that, on April 1, 2023, Mr. Sievert will be granted a one-time grant of PRSUs (the “Special PRSUs”) under the Plan in respect of a target number of T-Mobile common shares equal to the Quotient of $10,000,000 divided by the average closing price of T-Mobile common stock over the thirty calendar day period ending five days prior to the grant date. The Special PRSUs vest on the second anniversary of the grant date based on T-Mobile’s total shareholder return relative to its peer group during the applicable performance period and subject to Mr. Sievert’s continued employment through that date (unless otherwise noted) below and in the PRSU premium agreement).
————————————————– ——————————
The A&R employment contract provides that if Mr. Sievert’s employment is terminated by T-Mobile for any reason other than “good cause” (as defined in the A&R employment contract) by Mr. Sievert for “good cause” (as defined in the A&R employment contract ) is terminated ) or as a result of T-Mobile’s non-renewal of the A&R employment contract (each, a “Qualified Termination”), then he will be entitled to receive it, subject to his timely execution and non-revocation of any time off and continued compliance with applicable restrictive agreements :
• a lump sum payment equal to twice the sum of (i) his then-current Base Salary plus (ii) his then-current Target Short Term Incentive; • all earned, unpaid short-term incentives for T-Mobile’s most recently completed fiscal year prior to the Termination Date (a “Prior Year STI”); • a prorated short-term incentive for the fiscal year in which the qualifying termination occurs (a “Prorated STI”) based on actual performance results for that year; • with respect to Mr. Sievert’s then outstanding LTI awards and notwithstanding anything to the contrary in the applicable award agreement(s): • full vesting of the time-based LTI awards (including any RSUs); and • with respect to performance-based LTI awards (including PRSUs), (i) a portion of each performance-based LTI award determined by multiplying (x) the total number of shares or units subject to that award by (y) a fraction of that Numerator is the number of days between the start of the applicable performance period in effect at the time of termination of Mr. Sievert’s employment to the date of such termination, and whose denominator is the number of days in the total performance period, are calculated based on actual performance through vesting on termination date; and (ii) a portion of each performance-based LTI award determined by multiplying (x) the total number of shares or units, if any, subject to such award by (y) a fraction whose numerator is the number of days between the date of the termination of Mr. Sievert’s employment and the end of the applicable performance period in effect upon such termination, the denominator of which is the number of days of the aggregate performance period, will be exercised at the higher of target or actual performance as of that termination date; • Company-paid medical and dental insurance (the “Continuing Medical Plan”) for up to eighteen (18) months after such termination; • Company compensation for an exclusive office and executive assistant for up to eighteen (18) months after such termination (with a cap of $25,000 per month) (the “Continuing Office/Assistant Benefits”); and • continued eligibility for T-Mobile’s employee discount program for mobile services (the “Continued Mobile Discounts”).
In addition, the A&R employment agreement provides that Mr. Sievert may retire on or after the end of the 5-year term or on April 1, 2028 by giving the Company at least 12 months’ written notice of his “proposed retirement date”. . (as defined in the A&R employment contract) and will receive substantially the same compensation and benefits as he would receive if terminated with qualification. Mr. Sievert also has the option of 12 months in writing
————————————————– ——————————
Terminated on or after April 1, 2026, but would only receive 60% of the retirement benefit if his proposed retirement date is on or after April 1, 2026 but before April 1, 2027, or 75% if his proposed retirement date is is on or after April 1, 2027 but before April 1, 2028.
The A&R employment contract further provides that if Mr. Sievert’s employment is terminated as a result of his death or disability, he is entitled to the following:
• STI of the previous year; • a prorated STI based on the greater of the targeted or actual performance results for the fiscal year in which such termination occurs; • The vesting of LTI awards or other stock awards granted by T-Mobile is subject to the terms of the applicable stock incentive plan and the applicable award agreement, which terms must be no less favorable than those applicable to all other executive employees of T-Mobile; and • the ongoing mobile discounts.
In addition, to the extent that any payment or benefit Mr. Sievert receives under the A&R employment contract or otherwise is subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments and/or benefits are subject to a “Best Pay Cap” reduction if such a reduction would result in a greater net after-tax benefit for Mr. Sievert than receiving the full amount of those payments.
The foregoing description of Mr. Sievert’s A&R employment agreement is supplemented in its entirety by the full text of the A&R employment agreement, a copy of which is later filed with the Securities and Exchange Commission.
————————————————– ——————————
© Edgar Online, Source Insights
