8-KLeadership Changes

T-Mobile US, Inc. 8-K Report, Executive Changes (Mar 10, 2021)

Filed March 10, 2021For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. (TMUS) filed an 8-K on March 9, 2021, detailing the approval of cash-settled performance-based restricted stock units (PRSUs) for key executives, including CEO G. Michael Sievert, CFO Peter Osvaldik, and President of Technology Neville R. Ray. These awards are effective March 4, 2021, and vest on March 4, 2024, contingent upon continued employment and the achievement of specific free cash flow (FCF) targets over a three-year performance period (January 1, 2021, to December 31, 2023). The PRSUs offer a payout ranging from 0% to 200% of the target number of units, with each vested unit translating into a cash payment equivalent to the fair market value of one TMUS common share. The filing also outlines specific terms for vesting and forfeiture in cases of termination, including provisions for death, disability, workforce reduction, divestiture, and termination without cause or resignation for good reason, particularly in the context of a change of control.

Key Highlights

  • 1Grant of cash-settled performance-based restricted stock units (PRSUs) to CEO, CFO, and President of Technology.
  • 2Vesting period for PRSUs is March 4, 2021, to March 4, 2024.
  • 3Payout is tied to free cash flow (FCF) achievement over a three-year performance period (2021-2023).
  • 4Potential payout ranges from 0% to 200% of the target PRSU grant.
  • 5Each vested PRSU will be settled in cash equivalent to the fair market value of one TMUS common share.
  • 6Includes specific provisions for vesting upon certain termination events (death, disability, workforce reduction, change of control) and forfeiture.
  • 7Target PRSUs granted: Sievert (20,067), Osvaldik (6,601), Ray (10,033).

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose the approval and terms of performance-based restricted stock units (PRSUs) granted to T-Mobile's top executives, including the CEO, CFO, and President of Technology. This is part of their executive compensation structure and is designed to incentivize performance based on free cash flow.

The executives will receive cash payments for each vested PRSU. The amount of cash will be equal to the fair market value of one T-Mobile common share at the time of vesting. The number of PRSUs that vest depends on the company's free cash flow performance over the three-year period and the executive's continued employment.

PRSUs vest based on two main conditions: continued employment with T-Mobile through March 4, 2024, and the company achieving specific free cash flow targets between January 1, 2021, and December 31, 2023. The payout can range from 0% to 200% of the target grant based on performance.

The treatment of PRSUs upon termination varies. If an executive dies or becomes disabled, unvested PRSUs vest at the target performance level. Specific provisions exist for terminations due to workforce reduction, divestiture, termination by the company without cause, or resignation for good reason, especially within a year of a change of control. In most other termination scenarios, unvested PRSUs are forfeited.