8-KLeadership Changes

T-Mobile US, Inc. 8-K Report, Executive Changes (Mar 29, 2019)

Filed March 29, 2019For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. (TMUS) filed an 8-K on March 29, 2019, detailing amendments to the employment agreement of its Executive Vice President and Chief Financial Officer, J. Braxton Carter. The primary focus of this amendment is to align Mr. Carter's employment term with the anticipated closing of the merger with Sprint. His employment will now extend until December 31, 2019, or an earlier date tied to the closing of the merger or a public announcement that the merger will not proceed, followed by a financial filing. These changes also include an increase in Mr. Carter's base salary to $950,000, effective retroactively from December 16, 2018. Furthermore, he will receive significant long-term incentive awards, including performance-based restricted stock units (PRSUs) and time-based restricted stock units (RSUs). Notably, a special PRSU award of $3,500,000 is subject to specific vesting terms tied to the merger's closing or anniversary dates, with 50% vesting earlier upon merger close or April 29, 2021, and the remainder on the third anniversary of April 29, 2018, contingent on continued employment. The amendment also outlines severance benefits should his employment terminate on December 31, 2019, due to term expiration without the merger closing, including full vesting of certain incentive awards.

Key Highlights

  • 1J. Braxton Carter, EVP & CFO, has an amended employment agreement extending his term until December 31, 2019, or tied to the Sprint merger closing.
  • 2Mr. Carter's annual base salary increased to $950,000, effective December 16, 2018.
  • 3He will receive new grants of Performance-Based Restricted Stock Units (PRSUs) and Time-Based Restricted Stock Units (RSUs).
  • 4A special one-time PRSU award valued at $3.5 million is granted, with specific vesting conditions linked to the Sprint merger closing.
  • 5Vesting for the special PRSUs is split: 50% upon merger close or April 29, 2021, and the remaining 50% on the third anniversary of April 29, 2018, subject to employment.
  • 6The agreement specifies full vesting of time-based awards and performance-based awards based on actual performance if Carter's employment terminates on December 31, 2019, due to term expiration without merger completion.

Frequently Asked Questions

The primary purpose of the amendment is to align Mr. Carter's employment term with the expected timeline of the proposed business combination between T-Mobile and Sprint. It ensures his continued role and compensation during this critical period.

The amendment increases his base salary to $950,000 and grants him substantial new long-term incentive awards (PRSUs and RSUs). A significant portion of these awards, particularly a $3.5 million special PRSU grant, has vesting terms directly linked to the closing of the Sprint merger, incentivizing him to remain with the company through the transaction.

If the merger does not close by December 31, 2019, and his employment terminates on that date due to the expiration of his employment term, he is entitled to full vesting of his time-based long-term incentive awards and vesting of his performance-based awards based on actual performance achieved up to his termination date, subject to signing a release.

His employment term will end on the earliest of: December 31, 2019; the 20th day after the first quarterly or annual financial filing by the combined entity post-merger closing; or the 20th day after T-Mobile publicly announces the merger will not close, followed by a Company financial filing.