8-KLeadership Changes

T-Mobile US, Inc. 8-K Report, Executive Changes (Feb 24, 2017)

Filed February 24, 2017For Securities:TMUSTMUSZTMUSITMUSL

Summary

This 8-K filing from T-Mobile US, Inc. on February 23, 2017, details an amended compensation term sheet for Chief Operating Officer G. Michael Sievert, effective January 1, 2017. The agreement outlines a significant increase in base salary, short-term, and long-term incentive targets, reflecting his continued role and responsibilities within the company. Notably, Mr. Sievert will also receive a substantial one-time special equity award, split between time-based and performance-based restricted stock units, with vesting tied to continued service and total shareholder return goals. The filing also specifies severance benefits in the event of a "qualifying termination" (termination by the Company without cause or constructive discharge), including a payout based on his salary and target incentive, as well as accelerated vesting for certain long-term incentives. Provisions for termination due to death or disability are also detailed. This compensation adjustment and the associated equity grants underscore the company's commitment to retaining key executive talent and aligning their interests with shareholder value creation.

Key Highlights

  • 1Amended compensation term sheet for COO G. Michael Sievert effective January 1, 2017.
  • 2Annual base salary increased to $950,000.
  • 3Annual short-term incentive target set at 200% of base salary.
  • 4Annual long-term incentive target value of $7,125,000.
  • 5One-time special equity award granted to Mr. Sievert valued at $7,125,000, split between time-based and performance-based RSUs.
  • 6Performance-based RSUs tied to relative total shareholder return goals.
  • 7Severance provisions outlined for qualifying termination, death, or disability, including accelerated vesting of equity awards.

Frequently Asked Questions

Effective January 1, 2017, Mr. Sievert's compensation includes an annual base salary of $950,000, an annual short-term incentive target of 200% of his base salary, and annual long-term incentive awards with a target grant-date value of $7,125,000. He also received a one-time special equity award of $7,125,000.

The special equity award is valued at $7,125,000 and consists of 50% time-based restricted stock units (RSUs) and 50% performance-based restricted stock units (PRSUs). Both types of units cliff-vest on the second anniversary of the grant date, subject to continued service and, for PRSUs, achievement of relative total shareholder return goals.

In the event of a "qualifying termination" (termination by the Company other than for cause or constructive discharge), Mr. Sievert would be entitled to a lump-sum payment equal to two times his then-current base salary plus target short-term incentive, any earned but unpaid short-term incentive, a pro-rata short-term incentive for the year of termination, and accelerated vesting for certain long-term incentive awards. In case of death or disability, he would receive prior year STI, a pro-rata STI based on target or actual performance, and LTI vesting governed by plan terms.

Yes, the Term Sheet includes a "best pay cap" provision. If any payment or benefit received by Mr. Sievert would be subject to excise taxes under Internal Revenue Code Section 4999, such payments will be reduced if that reduction results in a greater net after-tax benefit for Mr. Sievert.