Chair: Teresa A. Taylor Additional Member Dominique Leroy Meetings Held in 2020: 5 | | | | Nominating and Corporate Governance Committee | | | | | | | | 
Chair: Teresa A. Taylor
Additional Members
Lawrence H. Guffey
Thorsten Langheim
Meetings Held in 2018: 5
| | As more fully described in its charter, the primary responsibilities of the Nominating and Corporate Governance Committee are to: ∎ Subject to the terms of the Company’s certificate of incorporation and the Stockholder’s Agreement, review, approve and recommend for Board consideration director candidates based on the director selection guidelines then in effect, and advise the Board with regard to the nomination or appointment of such director candidates
∎ Periodically review and make recommendations to the Board regarding the appropriate size, role and function of the Board
∎ Develop and oversee a process for an annual evaluation of the Board and its committees
∎ Monitor the process for preparing agendas for, organizing and running Board meetings (including the occurrence of regular executive sessions) in coordination with the Chairman of the Board and Chief Executive Officer
∎ Recommend to the Board, as appropriate, the number, type, functions, and structure of committees of the Board, and the chairperson of each such committee
∎ Periodically review the Company’s director orientation program and recommend changes, as appropriate
∎ Monitor, plan and support continuing education activities of the directors
∎ Develop, update as necessary and recommend to the Board corporate governance principles and policies
| | |
◾ Subject to the terms of the Company’s certificate of incorporation and the Stockholders’ Agreement, review, approve and recommend for Board consideration director candidates based on the director selection guidelines then in effect, and advise the Board with regard to the nomination or appointment of such director candidates ◾ Periodically review and make recommendations to the Board regarding the appropriate size, role and function of the Board ◾ Develop and oversee a process for an annual evaluation of the Board and its committees ◾ Monitor the process for preparing agendas for, organizing and running Board meetings (including the occurrence of regular executive sessions) in coordination with the Chairman of the Board and Chief Executive Officer ◾ Recommend to the Board, as appropriate, the number, type, functions, and structure of committees of the Board, and the chairperson of each such committee ◾ Develop and oversee compliance with the Code of Business Conduct for all employees, officers and directors ◾ Discuss the Company’s risk assessment and risk management policies, as well as annually review the implementation and effectiveness of our compliance and ethics programs ◾ Periodically review the Company’s report on political and charitable contributions and other environmental, sustainability, and corporate social responsibility matters ◾ Periodically review the Company’s director orientation program and recommend changes, as appropriate ◾ Monitor, plan and support continuing education activities of the directors ◾ Develop, update as necessary and recommend to the Board corporate governance principles and policies | | | | | | | T-Mobile 2019 Proxy Statement | | 9 |
| | | | |
CORPORATE GOVERNANCE AT T-MOBILE
BOARD RISK OVERSIGHTChair: Thorsten Langheim
ManagementAdditional Members
Lawrence H. Guffey Christian P. Illek Kelvin R. Westbrook Meetings Held in 2020: 0* *Per the Transaction Committee’s charter, the Committee meets as often as it determines necessary | | | | Transaction Committee As more fully described in its charter, the primary responsibilities of the Company, including the Chief Executive Officer and other executive officers, is primarily responsible for managing the risks associatedTransaction Committee are to: ◾ Evaluate with the business, operations,Company’s management and financial and disclosure controls. Management conducts a quarterly enterprise-wide risk assessment and considers financial, strategic, IT, technology, operational, compliance, legal/regulatory, and reputational risksprovide recommendations to the Company. In addition, Management conducts an annual fraud risk assessment. The results of these assessments are considered in connectionBoard with respect to proposed strategic transactions for the operational, financial,Company and business activities of the Company. Management Has Established a Third-Party Risk Management Program
Management has established a centralized Third-Party Risk Management program to evaluate multiple aspects of risk related to doing business with third parties,its businesses, including, but not limited to, cybersecurity, geopolitical, privacy, financial, anti-corruption,mergers, acquisitions, divestitures, joint ventures, and fourth-party risks.other similar transactions
◾ Monitor the progress of pending and potential strategic transactions involving the Company, its businesses and its competitors |
| | | 16 | | PROXY STATEMENT 2021 ⬛  |
Corporate Governance at T-Mobile Risk Oversight MANAGEMENT’S ROLE IN RISK OVERSIGHT Management of the Company, including the Chief Executive Officer and other executive officers, is primarily responsible for managing the risks associated with the business, operations, and financial and disclosure controls. Management conducts a quarterly enterprise-wide risk assessment and considers financial, integration, strategic, IT, technology, operational, compliance, legal/regulatory, and reputational risks to the Company. In addition, management conducts an annual fraud risk assessment. The results of these assessments are considered in connection with the operational, financial, and business activities of the Company. Management Has Established a Third-Party Risk Management Program Management has established a centralized Third-Party Risk Management program to evaluate multiple aspects of risk related to doing business with third parties, including, but not limited to, cybersecurity, geopolitical, privacy, financial, anti-corruption, fourth-party risks and risks relating to foreign ownership and compliance with national security commitments. Management Has Established an Enterprise Risk and Compliance Committee and an Information Security and Privacy Council The Enterprise Risk and Compliance Committee oversees risk management and compliance activities as a means of bringing risk issues to the attention of senior management. Responsibilities for risk management and compliance are distributed throughout various functional areas of the business, and the Enterprise Risk and Compliance Committee regularly meets and reviews the Company’s activities in these areas. The Information Security and Privacy Council oversees the strategic governance and prioritization of the Company’s information security and privacy initiatives. THE BOARD’S ROLE IN RISK OVERSIGHT Selective Delegation of Risk Oversight to Committees While the full Board has overall responsibility for risk oversight, the Board has delegated risk oversight responsibility for certain risks to committees of the Board. On a regular basis, reports of all committee meetings are presented to the Board, and the Board periodically conducts deep dives on key enterprise risks. Audit Committee The Audit Committee has primary responsibility for overseeing the Company’s various risk assessment and risk management policies. The Audit Committee considers and discusses policies with respect to risk assessment and risk management, including the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures. To assist the Audit Committee with its risk assessment function, the Senior Vice President, Internal Audit & Risk Management, who serves as the Chief Audit Executive, and the Vice President, Chief Compliance Officer havehas a direct reporting communications channelscommunication channel to the Audit Committee for purposes of reporting or discussing concerns, and havehas regular meetings with the Audit Committee and/or its members. They provideThe Chief Audit Executive provides a quarterly enterprise-wide risk assessment (including risks relating to cybersecurity and privacy), annual fraud risk assessment, and compliance riskSOX and Internal Audit reporting or assessments to the Audit Committee, and updateupdates the Audit Committee on significant issues raised by the Enterprise Risk and Compliance Committee. The Audit Committee reviews all enterprise risk assessments, provides feedback to executive management and shares the risk assessments with the Board. The Audit Committee also has other responsibilities with respect to the Company’s financial and accounting compliance and complaint procedures and internal audit and SOX Compliance program, as well as other compliance and ethics programs, as more fully set out in its charter. Additionally, the Chief Compliance Officer also has a direct communication channel to the Audit Committee for purposes of discussing or reporting financial misconduct matters with the Audit Committee and/or its members. CEO Selection Committee The CEO Selection Committee oversees risks related to the selection, appointment, hiring, firing and recall from office the Chief Executive Officer of the Company. Compensation Committee The Compensation Committee has certain responsibilities with respect to succession planning and the assessment of risk in connection with our compensation programs. The Compensation Committee periodically reviews with management an assessment of whether risks arising from the Company’s compensation policies and practices for all employees are reasonably likely to have a material adverse effect on the Company, as well as the means by which any potential risks may be mitigated, such as through governance and oversight policies. The Company designs the compensation programs to encourage appropriate risk-taking while | | | ⬛ PROXY STATEMENT 2021 | | 17 |
Corporate Governance at T-Mobile discouraging behavior that may result in unnecessary or excessive business risk. In this regard, the following elements have been incorporated in our compensation programs for executive officers: ∎ | ◾ | | Use of multiple metrics in the annual incentive plan and use of two long-term incentive vehicles (time-based and performance-based)performance-based incentive awards) for executive officers |
∎ | ��� | | Annual incentive award payouts capped at 200% of target |
∎ | ◾ | | Performance-based long-term incentive awards capped at 200% of target |
∎ | ◾ | | Emphasis on long-term and performance-based compensation |
∎ | ◾ | | The Compensation Committee has discretion to reduce incentive awards, as appropriate |
∎ | ◾ | | Alignment of interests of our executive officers with the long-term interests of our stockholders through stock ownership guidelines that call for significant share ownership by our executive officers |
∎ | ◾ | | Formal clawback policy applicable to both cash and equity compensation |
∎ | ◾ | | Generally, long-term incentive awards vest ratably over three years or at the end of a three-year performance period |
∎ | ◾ | | No excessive perquisites for executive officers |
| | | ∎ | | Based on an assessment conducted by management consultant Willis Towers Watson, which was presented to and discussed with the Compensation Committee, management concluded that our compensation policies and practices for all employees do not create risks that are reasonably likely to have a material adverse effect on the Company. |
Executive Committee The Executive Committee reviewsis available to review and providesprovide guidance to senior management regarding the Company’s strategy, operating plans and operating performance. The Executive Committee also plays a key role in helping the Board perform its risk oversight function by considering strategic operating goals, opportunities and risks. Nominating and Corporate Governance Committee The Nominating and Corporate Governance Committee oversees Board process and corporate governance-related risks.risks, management of compliance risks, and risks related to our diversity, corporate social responsibility and sustainability practices. Our Chief Communications Officer provides periodic reports to the Nominating and Corporate Governance Committee on the Company’s charitable spending and related policies. Our General Counsel provides periodic reports to the Nominating and Corporate Governance Committee on the Company’s political spending and related policies. Our Chief Compliance Officer provides periodic reports to the Nominating and Corporate Governance Committee on the Company’s compliance and ethics program. The Chief Compliance Officer also has a direct communication channel to the Nominating and Corporate Governance Committee for purposes of reporting or discussing concerns relating to the Company’s compliance and ethics programs. Transaction Committee The Transaction Committee oversees risks related to strategic transactions involving the Company and its businesses. | | | | | 1018 | | T-Mobile 2019 Proxy Statement | | PROXY STATEMENT 2021 ⬛ |
CORPORATE GOVERNANCE ATT-MOBILECorporate Governance at T-Mobile
DIRECTOR COMPENSATIONDirector Compensation
Non-EmployeeNON-EMPLOYEE Director Compensation ProgramDIRECTOR COMPENSATION PROGRAM
Our“non-employee directors”—directors who are not employees of the Company or officers or employees of Deutsche Telekom—Telekom or SoftBank—are eligible to participate in the Company’snon-employee director compensation program, described below. The Compensation Committee periodically reviews the compensation of ournon-employee directors. As part of the review, the Compensation Committee engages Mercer to assess ournon-employee director compensation program in comparison to our peer group (see “Executive Compensation—Factors Considered in Determining Executive Compensation—Executive Compensation Peer Group” for more information on our peer group). Based on such assessment, the non-employee director compensation program is adjusted as appropriate to ensure alignment with market practices. KEY FEATURES OF OUR Key Features of OurNon-EmployeeNON-EMPLOYEE Director Compensation ProgramDIRECTOR COMPENSATION PROGRAM ∎ | ◾ | | A larger allocation of total director compensation to equity-based compensation rather than cash compensation |
∎ | ◾ | | All equity-based compensation is subject to a vesting period |
∎ | ◾ | | Substantial stockStock ownership guidelines of five times thenon-employee director’s annual cash retainer for Board services |
| | | | | | | Elements ofNon-Employee Director Compensation | | Amount ($) | | | | | | Annual cash retainer | | | 120,000135,000 | | | | | | Additional annual cash retainer for: | | | | | | | | | Lead Independent Director | | | 35,00055,000 | | | | | | Audit Committee Chair | | | 50,00060,000 | | | | | | Compensation Committee Chair | | | 25,000 | | | | | | Nominating and Corporate Governance Committee Chair | | | 15,00020,000 | | | | | | Additional Retainer for Audit Committee Members (Other Than(including the Audit Committee Chair) | | | 15,000 | | | | National Security Director | | | 75,000 | | | | Annual award of Restricted Stock Units | | | 195,000240,000 | | | | | | Additional cash amounts for each Board and committee meeting in excess of 10 meetings per year: | | | | | | | | | In personmeeting:
| | | 2,000 | | | | | | By telephoneBoard
| | | 1,0003,000 | | | | Committee | | | 2,000 | |
The annual award of time-based restricted stock units (“RSUs”) is made immediately after each Annual Meeting of Stockholders. The RSUs vest on theone-year anniversary of the grant date or, for directors not standing forre-election, on the date of the next Annual Meeting of Stockholders, subject to continued service as anon-employee director through the vesting date. In the event of a director’s termination of service prior to vesting, all RSUs are automatically forfeited. The RSUs immediately vest on the date of a change in control of the Company. Annual cash retainers and the annual RSU awardawards are prorated for any person who becomes anon-employee director and/or committee chair, or who otherwise becomes entitled to an additional annual cash retainer as described above, at any time of the year other than the date of the Company’s Annual Meeting of Stockholders.Non-employee directors also receive reimbursement of expenses incurred in connection with their Board service and are eligible to receive up to two handsets per year and up to 10 lines of U.S. service pursuant to the Board of Directors Phone Perquisite Program.program. OUR DIRECTORS ARE REQUIRED TO ACQUIRE AND MAINTAIN OWNERSHIP OF SHARES OF Our Directors Are Required to Acquire and Maintain Ownership of Shares ofT-MobileT-MOBILE Under our stock ownership guidelines, eachnon-employee director is expected to acquire and maintain ownership of shares of common stock equal in value to five times his or her annual cash retainer for Board service measured as of the laterSeptember 30 of (i) the date we adopted the policy (May 1, 2013) and (ii) the date on which he or she becomes anon-employee director.each year. Eachnon-employee director is expected to meet the ownership guidelines within the later of (i)(a) five years from the date we adopted the policy and (ii)(b) the date on which he or she became anon-employee director, and is expected to retain at least 50% of the net shares of common stock acquired through equity awards until the ownership threshold is met. | | | ∎ | | As of December 31, 2018,2020, all then-serving non-employee directors were in compliance with our stock ownership guidelines. |
| | | | | ⬛ PROXY STATEMENT 2021 | | T-Mobile 2019 Proxy Statement | | 1119 |
CORPORATE GOVERNANCE AT T-MOBILECorporate Governance at T-Mobile
2020 2018Non-EmployeeNON-EMPLOYEE Director Compensation TableDIRECTOR COMPENSATION TABLE During fiscal year 2018,2020, the Company’snon-employee directors received the following compensation for their services: | | Name | | Fees Earned or
Paid in Cash(3)
($) | | | Stock
Awards (4)
($) | | | All Other
Compensation (5)
($) | | | Total ($) | | | Fees Earned or
Paid in Cash2
($) | | | Stock
Awards4
($) | | | All Other
Compensation6
($) | | | Total
($) | | | W. Michael Barnes(1) | | | 70,750 | | | | 178,798 | | | | 7,221 | | | | 256,769 | | | | Marcelo Claure | | | | — | | | | — | | | | 3,507 | | | | 3,507 | | | Srikant M. Datar | | | 198,000 | | | | 178,798 | | | | 4,195 | | | | 380,993 | | | | 452,142 | | | | 297,824 | | | | 9,217 | | | | 759,183 | | | | Lawrence H. Guffey | | | 137,000 | | | | 178,798 | | | | 9,471 | | | | 325,269 | | | | 372,142 | | | | 297,824 | | | | 5,999 | | | | 675,965 | | | | Olaf Swantee(2) | | | 65,918 | | | | — | | | | — | | | | 65,918 | | | | Stephen Kappes1 | | | | 112,568 | 3 | | | 51,973 | 5 | | | — | | | | 164,541 | | | Teresa A. Taylor | | | 193,250 | | | | 178,798 | | | | 11,217 | | | | 383,265 | | | | 468,084 | | | | 297,824 | | | | 1,667 | | | | 767,575 | | | | Kelvin R. Westbrook | | | 174,500 | | | | 178,798 | | | | 12,445 | | | | 365,743 | | | | 432,142 | | | | 297,824 | | | | 5,933 | | | | 735,899 | | |
(1)1 | Mr. BarnesKappes was not nominated forre-election and hisappointed to the Board service ended on June 13, 2018,April 1, 2020, the date of the 2018 Annual Meetingclosing of Stockholders.the Sprint Combination, and resigned from the Board on April 6, 2021. The amounts in this table reflect his partial year of service in 2020. |
(2) | Mr. Swantee was elected to the Board on June 13, 2018, the date of the 2018 Annual Meeting of Stockholders.
|
(3)2 | Includes meeting fees earned as an Independent Committee member. |
(4)3 | Does not include any fees earned while serving as a non-employee director of Sprint prior to the closing of the Sprint Combination. |
| 4 | The value of stock awards is determined using the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Compensation–Stock Compensation,” or ASC 718, excluding the effect of any estimated forfeitures. These amounts reflect the Company’s accounting expense and do not correspond to the actual value that will be realized by the directors. See Note 111 to the Consolidated Financial Statements included in the Company’s Annual Report on Form10-K for the year ended December 31, 20182020 for a summary of the assumptions we apply in calculating these amounts. As of December 31, 2018,2020, each director held 3,3242,396 unvested time-based RSUs. |
(5)5 | Does not include the value of Sprint stock awards vested prior to the closing of the Sprint Combination. |
| 6 | Includes (i) phone perquisites under the Board of Directors Phone Perquisite Program,program and (ii) personal and spousal travel expenses in connection with a Board meeting, and (iii) reimbursement of taxes associated with the personal and spousal travel expenses.meeting. |
DIRECTOR NOMINATION, SELECTION AND QUALIFICATIONSDirector Nomination, Selection and Qualifications
QUALIFICATIONS AND DIVERSITY QualificationsT-Mobile understands that diversity, inclusive of gender, race and Diversityexperience, is a critical attribute of a well-functioning board of directors and a measure of sound corporate governance. T-Mobile follows its director selection guidelines as we strive to maintain a board comprised of individuals with a mix of expertise, experience, skills and backgrounds to reflect the diverse nature of the business environment in which we operate and the customers we serve. In connection with the Sprint Combination, we adopted an Equity in Action Plan to further advance diversity, equity and inclusion efforts across T-Mobile, including at the Board level.
Subject to Deutsche Telekom’s board designation rights, the Nominating and Corporate Governance Committee is responsible for identifying and evaluating director nominees and recommending to the Board a slate of nominees for election at each Annual Meeting of Stockholders. The Board has adopted director selection guidelines, which the Nominating and Corporate Governance Committee considers in evaluating each director candidate. The Nominating and Corporate Governance Committee considers, among others, the following factors: | ∎ | | | ◾Professional experience, industry knowledge, skills and expertise |
| ∎ | | ◾ Diversity in all forms, including gender, race, age, ethnic, geographic, cultural and professional backgrounds ◾Leadership qualities, public company board and committee experience andnon-business-related activities and experience |
| ∎ | | ◾High standard of personal and professional ethics, integrity and values |
| ∎ | | ◾Training, experience and ability at making and overseeing policy in business, government and/or education sectors |
| ∎ | | ◾Willingness and ability to: |
| ∎ | | ◾keep an open mind when considering matters affecting interests of the Company and its constituents |
| ∎ | | ◾devote the required time and effort to effectively fulfill the duties and responsibilities related to Board and committee membership |
| ∎ | | ◾serve on the Board for multiple terms, if nominated and elected, to enable development of a deeper understanding of the Company’s business affairs |
| ∎ | | ◾Willingness not to engagerefrain from engaging in activities or interests that may create a conflict of interest with a director’s responsibilities and duties to the Company and its constituents |
| ∎ | | ◾Willingness to act in the best interests of the Company and its constituents and to objectively assess Board, committee and management performances |
Diversity is one of many factors under our director selection guidelines that the Nominating and Corporate Governance Committee considers when evaluating potential director candidates. However, we do not have a formal policy with respect to diversity on the Board. Our director selection guidelines define diversity broadly to include not just | | | 20 | | PROXY STATEMENT 2021 ⬛ |
Corporate Governance at T-Mobile factors such as gender and race, but also factors such as age, ethnic, geographic, cultural and professional diversity. Our director selection guidelines mandate that the skills and backgrounds collectively represented on the Board should reflect the diverse nature of the business environment in which the Company operates and the customers it serves. In addition, according to our director selection guidelines, the Nominating and Corporate Governance Committee will include, and will require any outside consultant that it engages to include, women and minority candidates in the pool from which the committee selects director candidates. Six of our current 13 director nominees are women or minorities, and all of our core Board committees were chaired by a woman or diverse director. In connection with its general responsibility to monitor and advise the Board on the size, role, function and composition of the Board, the Nominating and Corporate Governance Committee will periodically consider whether the Board represents the overall mix of skills and characteristics described in the director selection guidelines, including diversity and the other factors described above. Subject to Deutsche Telekom’s board designation rights, the selection process for director candidates is intended to be flexible, and the Nominating and Corporate Governance Committee, in the exercise of its discretion, may deviate from the selection process when particular circumstances warrant a different approach. Nomination ProcessThe following table sets forth certain information about the current composition of our Board, as well as information about Bavan M. Holloway, our new nominee for election to the Board:
| | | | | | | | | | | | | | | | | | | | Director Nominee Name & Occupation | | Age | | Director
Since | | Independent | | Gender | | Ethnicity/Race | | Designation | | | | | | | | Marcelo Claure Chief Executive Officer, SoftBank International; Chief Operating Officer, SoftBank; Executive Chairman, WeWork | | 50 | | 2020 | | No | | M | | Hispanic | | Deutsche
Telekom | | | | | | | | Srikant M. Datar George F. Baker Professor of Administration; Dean of the Faculty, the Graduate School of Business Administration at Harvard University | | 67 | | 2013 | | Yes | | M | | Asian | | Nom &
Gov | | | | | | | | Lawrence H. Guffey* Managing Partner, Twin Point Capital | | 53 | | 2013 | | Yes | | M | | White | | Deutsche
Telekom | | | | | | | | Timotheus Höttges (C) Chief Executive Officer, Deutsche Telekom | | 58 | | 2013 | | No | | M | | White | | Deutsche
Telekom | | | | | | | | Bavan M. Holloway Former Vice President, Corporate Audit for The Boeing Company | | 56 | | Nominee | | Yes | | F | | African American | | Deutsche
Telekom | | | | | | | | Christian P. Illek Chief Finance Officer, Deutsche Telekom | | 56 | | 2018 | | No | | M | | White | | Deutsche
Telekom | | | | | | | | Raphael Kübler Senior Vice President, the Corporate Operating Office of Deutsche Telekom | | 58 | | 2013 | | No | | M | | ** | | Deutsche
Telekom | | | | | | | | Thorsten Langheim Member, Deutsche Telekom AG Board of Management, USA and Group Development | | 55 | | 2013 | | No | | M | | White | | Deutsche
Telekom | | | | | | | | Dominique Leroy Member, Deutsche Telekom AG Board of Management, Europe | | 56 | | 2020 | | No | | F | | White | | Deutsche
Telekom | | | | | | | | G. Michael Sievert President and Chief Executive Officer, T-Mobile US, Inc. | | 51 | | 2018 | | No | | M | | White | | N/A | | | | | | | | Teresa A. Taylor (L) Chief Executive Officer, Blue Valley Advisors, LLC | | 57 | | 2013 | | Yes | | F | | White | | Nom &
Gov | | | | | | | | Omar Tazi Senior Vice President of Group Innovation, Products, Design & Customer Experience, and Global Partnerships and Devices, Deutsche Telekom | | 46 | | 2020 | | No | | M | | White | | Deutsche
Telekom | | | | | | | | Kelvin Westbrook President and Chief Executive Officer, KRW Advisors, LLC | | 65 | | 2013 | | Yes | | M | | African American | | Deutsche
Telekom | | | | | | | | Michael Wilkens Senior Vice President Group Controlling (FP&A), Deutsche Telekom | | 55 | | 2020 | | No | | M | | White | | Deutsche
Telekom |
Legend: C = Chair; L = Lead Independent Director | * | Mr. Guffey is not nominated for re-election at the Annual Meeting. |
| | | ⬛ PROXY STATEMENT 2021 | | 21 |
Corporate Governance at T-Mobile NOMINATION PROCESS In addition to candidates designated by Deutsche Telekom, the Nominating and Corporate Governance Committee may consider possible director candidates from a number of sources, including those recommended by stockholders, directors, or officers. In addition, the Nominating and Corporate Governance Committee may engage the services of outside consultants and search firms to identify potential director candidates. A stockholder who wishes to suggest a director candidate for consideration by the Nominating and Corporate Governance Committee should submit the suggestion to the Chair of the Nominating and Corporate Governance Committee, care of our Corporate Secretary, at 12920 SE 38th Street, Bellevue, Washington 98006, and include the candidate’s name, | | | | | 12 | | T-Mobile 2019 Proxy Statement | | |
CORPORATE GOVERNANCE AT T-MOBILE
biographical data, relationship to the stockholder and other relevant information. The Nominating and Corporate Governance Committee may request additional information about the suggested candidate and the proposing stockholder. Subject to Deutsche Telekom’s board designation rights, the full Board of Directors will approve all final nominations after considering the recommendations of the Nominating and Corporate Governance Committee. | | | 22 | | PROXY STATEMENT 2021 ⬛ |
| | | | | | | 2021 Director Nominees The Board has nominated 13 nominees for election at the Annual Meeting to serve as directors for terms that would end at the 2022 Annual Meeting of Stockholders. Lawrence H. Guffey has not been nominated for re-election, and his Board service will end at the conclusion of the Annual Meeting. The Board would like to recognize Mr. Guffey for his service and his immense contributions as a member of the Board over the last eight years. The Board has nominated Bavan M. Holloway as a new nominee for election to the Board. If elected, Ms. Holloway’s term will begin at the conclusion of the Annual Meeting. Other than Messrs. Tazi and Wilkens and Mses. Holloway and Leroy, all nominees were elected at the 2020 Annual Meeting of Stockholders. Committee memberships will be determined following the conclusion of the Annual Meeting. Each nominee was nominated by the Board on the recommendation of the Nominating and Corporate Governance Committee. The Board has found each nominee to be qualified based on his or her qualifications, experience, attributes, skills and whether he or she meets the applicable independence standards. Each of the nominees has consented to stand for election and we do not anticipate any candidate will be unavailable to serve. In the event that any of the nominees should be unavailable for election as a result of an unexpected occurrence, shares may be voted for the election of such substitute nominee as the Board may nominate. In the alternative, if a vacancy remains, the Board may fill such vacancy at a later date or reduce the size of the Board, subject to certain requirements in our certificate of incorporation. The Board knows of no reason why any of the nominees would be unavailable or unable to serve. Messrs. Höttges, Claure, Illek, Kübler, Langheim, Tazi, Westbrook, Wilkens and Mses. Holloway and Leroy were designated for nomination by Deutsche Telekom pursuant to its rights under our certificate of incorporation and the Stockholders’ Agreement. Mr. Datar and Ms. Taylor were designated for nomination by the Nominating and Corporate Governance Committee. REQUIRED VOTE Under our bylaws, directors are elected by a plurality of the votes cast by stockholders entitled to vote on the election of directors at the Annual Meeting. Shares represented by executed proxies received by the Company will be voted, unless otherwise marked withheld, “FOR” the election of each of the nominees. | | | | |
| | | | | | | | | | | | | |  | | OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION TO THE BOARD OF EACH OF THE NOMINEES LISTED BELOW | | | | | | | | | |
| | | ⬛ PROXY STATEMENT 2021 | | 23 |
Proposal 1 – Election of Directors | | | | |  Director Since: 2020 Age: 50 Other Public Company Boards: ◾ SoftBank (2017 to November 2020) ◾ Sprint (2014 to April 2020) Board Committees: ◾ CEO Selection ◾ Compensation ◾ Executive | | | | Marcelo Claure CHIEF EXECUTIVE OFFICER OF SOFTBANK INTERNATIONAL; CHIEF OPERATING OFFICER OF SOFTBANK; EXECUTIVE CHAIRMAN OF WEWORK Biography: Mr. Claure currently serves as Chief Executive Officer of SoftBank International, Chief Operating Officer of SoftBank and Executive Chairman of WeWork. Mr. Claure was Executive Chairman of Sprint prior to the Sprint Combination and had served on the Sprint board of directors since January 2014. Previously, Mr. Claure served as Sprint’s President and Chief Executive Officer, serving as President from August 2014 until January 2018 and as Chief Executive Officer from August 2014 until May 2018. In addition, Mr. Claure served as a director of SoftBank from 2017 to 2020 and he currently serves as a director of Arm Limited and as Chairman of Brightstar, each a subsidiary of SoftBank. Prior to joining Sprint, he was Chief Executive Officer of Brightstar Corp., a company he founded in 1997 and grew from a small Miami-based distributor of mobile device accessories into a global business with more than $10 billion in gross revenue for the year ended 2013. Mr. Claure holds a Bachelor’s degree in Economics and Finance and an honorary Doctorate degree in Commercial Science from Bentley University in Massachusetts. Qualifications and Skills Supporting Election to the Board: ◾ Former CEO and Executive Chairman of Sprint ◾ Expertise in telecommunications and technology industries ◾ Global communications and investment experience | 
Director Since: 2013 Age: 67 Other Public Company Boards: ◾ Novartis AG (2003 to March 2021) ◾ ICF International Inc. ◾ Stryker Corporation Board Committees: ◾ Audit (Chair) | | | | Srikant M. Datar GEORGE F. BAKER PROFESSOR OF ADMINISTRATION; DEAN OF THE FACULTY OF THE GRADUATE SCHOOL OF BUSINESS ADMINISTRATION AT HARVARD UNIVERSITY Biography: Mr. Datar is the George F. Baker Professor of Administration and Dean of the Faculty of the Graduate School of Business Administration at Harvard University. Mr. Datar is a Chartered Accountant and planner in industry, and has been a professor of accounting and business administration at Harvard since July 1996; he previously served as a professor at Stanford University and Carnegie Mellon University. Mr. Datar received gold medals upon his graduation from the Indian Institute of Management, Ahmedabad, and the Institute of Cost and Works Accountants of India. Mr. Datar holds a Master’s degree in Statistics and Economics and a Ph.D. in Business from Stanford University. Qualifications and Skills Supporting Election to the Board: ◾ Expertise in finance, accounting, governance and risk management ◾ Public company director and committee experience ◾ Academic and commercial perspective on complex issues |
| | | 24 | | PROXY STATEMENT 2021 ⬛ |
Proposal 1 – Election of Directors | | | | | | | Bavan M. Holloway FORMER VICE PRESIDENT, CORPORATE AUDIT FOR THE BOEING COMPANY Biography: Ms. Holloway served as the Vice President, Corporate Audit for The Boeing Company from 2010 until her retirement in April 2020, where she was responsible for all corporate audit activities, including the review of internal control systems and overall process assessments ensuring effectiveness. Prior to that, she served in a variety of senior finance roles after joining Boeing in 2002, including Director of Finance, 777 Program; Director of Finance and Chief Financial Officer, Material Management; Director, Financial Planning and Analysis; and Assistant Corporate Controller and Chief Accountant. Prior to joining Boeing, Ms. Holloway was a partner at KPMG, LLP from 1998 to 2002 and held other roles at KPMG before becoming partner, primarily serving investment services, broker dealer and financial clients. Ms. Holloway is a certified public accountant. Ms. Holloway holds a Bachelor’s degree in Business Administration from the University of Tulsa and a Master’s degree in Financial Markets and Trading from the Illinois Institute of Technology. Qualifications and Skills Supporting Election to the Board: ◾ Expertise in finance and accounting ◾ Finance and audit experience in complex and highly regulated global business environments, including service as chief audit executive and chief accountant | | | | 
Director Nominee Age: 56 Other Public Company Boards: ◾ TPI Composites, Inc. | Timotheus Höttges CHIEF EXECUTIVE OFFICER OF DEUTSCHE TELEKOM Biography: Since January 2014, Mr. Höttges has served as Chief Executive Officer of Deutsche Telekom, our significant stockholder and a leading integrated telecommunications company. From March 2009 to December 2013, he served as Deutsche Telekom’s Chief Financial Officer and a member of the Board of Management. From December 2006 to March 2009, he was a member of the Board of Management responsible for the T-Home Unit (fixed network and broadband business, as well as integrated sales and service in Germany). From January 2003 to December 2006, Mr. Höttges headed European operations as a member of the Board of Management of T-Mobile International. Mr. Höttges studied Business Administration at the University of Cologne. Qualifications and Skills Supporting Election to the Board: ◾ Chief executive officer of major global communications company ◾ Core finance, business and leadership skills | | | | 
Director Since: 2013 Age: 58 Other Public Company Boards: ◾ Henkel AG & Co. KGaA ◾ BT Group plc
(2016 to May 2020) ◾ Daimler AG Board Committees: ◾ CEO Selection (Chair) ◾ Executive (Chair) |
| | | ⬛ PROXY STATEMENT 2021 | | 25 |
Proposal 1 – Election of Directors | | | | |  Director Since: 2018 Age: 56 Board Committees: ◾ CEO Selection ◾ Compensation ◾ Executive ◾ Transaction | | | | Christian P. Illek CHIEF FINANCE OFFICER OF DEUTSCHE TELEKOM Biography: Dr. Illek has served as the Chief Finance Officer of Deutsche Telekom, our significant stockholder and a leading integrated telecommunications company, since January 2019. Since April 2015, he has served as Chief Human Resources Officer and Member of Management Board of Deutsche Telekom. Dr. Illek has also served as Chairman of the Supervisory Board for T-Systems International GmbH since November 2016 (a subsidiary of Deutsche Telekom). Prior to that, Dr. Illek was Chairman of the Management Board at Microsoft Germany from September 2012 to March 2015. From April 2010 to September 2012, he was Director of Marketing at Telekom Deutschland GmbH. In this position, he was responsible for all marketing activities for both consumers and business customers in Germany. He was also in charge of the Wholesale Center and the Value-Added Services Center, as well as international product development for Deutsche Telekom’s fixed-network, IPTV, a convergent and business customer portfolio. Before joining Deutsche Telekom, Dr. Illek held various managerial positions at Bain & Company and at Dell, in both Germany and in Switzerland. Dr. Christian P. Illek studied chemistry and business administration in Düsseldorf and Munich, beginning his career at the University of Munich in 1989. Qualifications and Skills Supporting Election to the Board: ◾ Expertise in global telecommunications industry ◾ Expertise in human resources, business and finance | 
Director Since: 2013 Age: 58 Other Public Company Boards: ◾ Ströer SE & Co. KGaA ◾ Hellenic Telecommunications Organization (OTE) (2013 to 2018) Board Committees: ◾ Compensation ◾ Executive | | | | Raphael Kübler SENIOR VICE PRESIDENT OF THE CORPORATE OPERATING OFFICE OF DEUTSCHE TELEKOM Biography: In January 2014, Mr. Kübler assumed the position of Senior Vice President of the Corporate Operating Office of Deutsche Telekom, our significant stockholder and a leading integrated telecommunications company, and he reports directly to the Chief Executive Officer of Deutsche Telekom. From July 2009 to December 2013, Mr. Kübler served as Senior Vice President Group Controlling at Deutsche Telekom. In this position, he was responsible for the financial planning, analysis and steering of the overall Deutsche Telekom Group as well as the financial management of central headquarters and shared services. From November 2003 to June 2009, Mr. Kübler served as Chief Financial Officer of T-Mobile Deutschland GmbH, the mobile operations of Deutsche Telekom in Germany now known as Telekom Deutschland GmbH (a wholly owned subsidiary of Deutsche Telekom). Mr. Kübler studied Business Administration at H.E.C. in Paris and the Universities of Bonn and Cologne. He holds a doctoral degree from the University of Cologne. Qualifications and Skills Supporting Election to the Board: ◾ Expertise in global telecommunications industry ◾ Core business, management and leadership skills ◾ Complex financial management experience |
| | | 26 | | PROXY STATEMENT 2021 ⬛ |
Proposal 1 – Election of Directors | | | | | | | Thorsten Langheim MEMBER OF THE DEUTSCHE TELEKOM AG BOARD OF MANAGEMENT, USA AND GROUP DEVELOPMENT Biography: Thorsten Langheim joined the Board of Management of Deutsche Telekom, our significant stockholder and a leading integrated telecommunications company, on January 1, 2019, where he is responsible for the “USA and Group Development” Board department, overseeing Deutsche Telekom’s U.S. business as well as corporate development, portfolio strategy and group M&A activities. This includes overseeing Deutsche Telekom’s 12% stake in BT Group as well as the management of Deutsche Telekom’s subsidiaries T-Mobile Netherlands and Deutsche Funkturm. In addition, Mr. Langheim also serves as the Chairman and Co-founder of Deutsche Telekom Capital Partners, where he is responsible for the venture capital and private equity activities of Deutsche Telekom. Prior to that, from 2009 to December 2018, he first served as Senior Vice President of Corporate Development and then as Executive Vice President Group Development at Deutsche Telekom. Prior to his roles at Deutsche Telekom, Mr. Langheim was Managing Director at the Private Equity Group of The Blackstone Group, an asset management and financial services company, from May 2004 to June 2009, primarily focusing on private equity investments in Germany. Before that, Mr. Langheim was Investment Banker and Vice President European M&A at J.P. Morgan in London and Assistant Director at WestLB in Düsseldorf between 1995 and 2004. Mr. Langheim is a member of the Supervisory Board of Deutsche Sporthilfe as well as Chairman of T-Mobile Netherlands and Deutsche Funkturm. Mr. Langheim holds a Master of Science degree in International Securities, Investment and Banking from the ISMA Centre for Education and Research at the University of Reading (United Kingdom) and a bachelor’s degree (Hons) in European Finance and Accounting from the University of Bremen (Germany) and Leeds Business School (United Kingdom). Qualifications and Skills Supporting Election to the Board: ◾ Expertise in global telecommunications industry ◾ Experience overseeing telecommunications and technology investments ◾ Corporate strategy and M&A experience | | | |
Director Since: 2013 Age: 55 Board Committees: ◾ CEO Selection ◾ Executive ◾ Transaction (Chair) |
| | | ⬛ PROXY STATEMENT 2021 | | 27 |
Proposal 1 – Election of Directors | | | | |  Director Since: 2020 Age: 56 Board Committees: ◾ Nominating and Corporate Governance Other Public Company Boards: ◾ Koninklijke Ahold Delhaize N.V., commonly known as Royal Ahold Delhaize ◾ Compagnie de Saint-Gobain S.A. ◾ Lotus Bakeries (2009 to 2018) ◾ Proximus (2014 to 2019) | | | | Dominique Leroy MEMBER OF THE DEUTSCHE TELEKOM AG BOARD OF MANAGEMENT, EUROPE Biography: Dominique Leroy has served as a member of the Board of Management of Deutsche Telekom since November 2020. Prior to that, from November 2019 to November 2020, she served as an independent advisor at Bain & Company. In 2011 she joined Proximus (formerly Belgacom) where she quickly became Head of the Consumer Market and held the position of CEO from January 2014 to September 2019. As the CEO of Proximus, she managed to turn around the company with a continuous growth phase and a strong customer experience focus. Ms. Leroy started her career at Unilever where her last position was Managing Director for Belgium and Luxembourg. Ms. Leroy currently serves as a director at Royal Ahold Delhaize and Compagnie de Saint Gobain. She has also been a Board Member at Lotus Bakeries, Proximus, and BICS. Ms. Leroy holds a Master’s degree in Industrial Engineering and Management from the Solvay Business School in Brussels. Qualifications and Skills Supporting Election to the Board: ◾ Over 30 years of experience in consumer goods and telecommunication sector ◾ More than 10 years of Board experience | 
Director Since: 2018 Age: 51 Other Public Company Boards: ◾ Shaw Communications Board Committees: ◾ Executive | | | | G. Michael (Mike) Sievert PRESIDENT AND CHIEF EXECUTIVE OFFICER OF T-MOBILE US, INC. Biography: Mr. Sievert serves as our President and Chief Executive Officer. Mr. Sievert served as our Chief Operating Officer from February 2015 to June 2018 and our President and Chief Operating Officer from June 2018 to April 1, 2020. From April 2013 to February 2015, he served as our Executive Vice President and Chief Marketing Officer, and from November 2012 to April 2013, Mr. Sievert was Executive Vice President and Chief Marketing Officer of T-Mobile USA. Prior to joining T-Mobile USA, Mr. Sievert was an entrepreneur and investor involved with several Seattle-area start-up companies. From April 2009 to June 2011, he was Chief Commercial Officer at Clearwire Corporation, a broadband communications provider, responsible for all customer-facing operations. From February 2008 to January 2009, Mr. Sievert was co-founder and Chief Executive Officer of Switchbox Labs, Inc., a consumer technologies developer, leading up to its sale to Lenovo. He also served from January 2005 to February 2008 as Corporate Vice President of the worldwide Windows group at Microsoft Corporation, responsible for global product management and P&L performance for that unit. Prior to Microsoft, he served as Executive Vice President and Chief Marketing Officer at AT&T Wireless for three years. He also served as Chief Sales and Marketing Officer at E*TRADE Financial and began his career with management positions at Procter & Gamble and IBM. He has served on the boards of Rogers Wireless Communications in Canada, Switch & Data Corporation, and a number of technology start-ups. Mr. Sievert holds a Bachelor’s degree in Economics from the Wharton School at the University of Pennsylvania. Qualifications and Skills Supporting Election to the Board: ◾ President and Chief Executive Officer of T-Mobile ◾ Expertise in telecommunications and technology industries |
| | | 28 | | PROXY STATEMENT 2021 ⬛ |
Proposal 1 – Election of Directors | | | | | | | Teresa A. Taylor CHIEF EXECUTIVE OFFICER OF BLUE VALLEY ADVISORS, LLC Biography: Since April 2011, Ms. Taylor has served as Chief Executive Officer of Blue Valley Advisors, LLC, an advisory firm. Ms. Taylor served as Chief Operating Officer of Qwest Communications, Inc., a telecommunications carrier, from August 2009 to April 2011. She served as Qwest’s Executive Vice President, Business Markets Group, from January 2008 to April 2009 and served as its Executive Vice President and Chief Administrative Officer from December 2005 to January 2008. Ms. Taylor served in various positions with Qwest and the former US West beginning in 1987. During her 24-year tenure with Qwest and US West, she held various leadership positions and was responsible for strategic planning and execution, sales, marketing, product, network, information technology, human resources and corporate communications. Ms. Taylor holds a Bachelor of Science degree from the University of Wisconsin-LaCrosse. Qualifications and Skills Supporting Election to the Board: ◾ Expertise in technology, media and telecommunications industries ◾ Expertise in strategic planning and execution, technology development, human resources, labor relations and corporate communications ◾ Public company director and committee experience | | | |
Director Since: 2013 Age: 57 Lead Independent Director Other Public Company Boards: ◾ Black Hills Corporation ◾ First Interstate BancSystem, Inc.
(2012 to February 2020) Board Committees: ◾ Audit ◾ CEO Selection ◾ Nominating and Corporate
Governance (Chair) | Omar Tazi SENIOR VICE PRESIDENT OF GROUP INNOVATION, PRODUCTS, DESIGN & CUSTOMER EXPERIENCE, AND GLOBAL PARTNERSHIPS AND DEVICES, DEUTSCHE TELEKOM Biography: Mr. Tazi is currently Senior Vice President at Deutsche Telekom in charge of Group Innovation, Products, Design & Customer Experience, as well as Global Partnerships and Devices. Prior to joining Deutsche Telekom in January 2018, he founded several fintech, e-commerce, and big data ventures focusing on Middle East and Africa markets. Previously, from February 2010 to January 2014, Mr. Tazi was with Orange Maroc as Executive Vice President in charge of various areas, including consumer marketing, information systems and customer experience. Prior to that, he was Oracle’s chief evangelist where he was in charge of building and scaling developer communities and promoting Oracle platforms globally. Before that, he also served as CEO of Orbeon, Inc., a Silicon Valley-based company specializing in middleware for form-based applications. Mr. Tazi has also held several other senior management positions in Silicon Valley including at Symantec and WebGain (later acquired by Oracle). He has held several research and teaching positions at the Swiss Federal Institute of Technology (ETH - EPFL), in the fields of in the fields of Artificial Intelligence (AI) and Computer Science. Mr. Tazi is a Stanford Graduate School of Business alumnus and holds a Master of Science degree in Computer Science & Electrical Engineering from Polytech Montpellier. Qualifications and Skills Supporting Election to the Board: ◾ Expertise in technology, media and telecommunications industries ◾ Expertise in strategic planning and execution, technology development, and global operations | | | | 
Director Since: 2020 Age: 46 |
| | | ⬛ PROXY STATEMENT 2021 | | 29 |
Proposal 1 – Election of Directors | | | | | 
Director Since: 2013 Age: 65 Other Public Company Boards: ◾ Archer Daniels Midland Company ◾ Camden Property Trust ◾ The Mosaic Company ◾ Stifel Financial Corp. (2007 to 2018) Board Committees: ◾ Compensation (Chair) ◾ Audit ◾ Transaction | | | | Kelvin R. Westbrook PRESIDENT AND CHIEF EXECUTIVE OFFICER OF KRW ADVISORS, LLC Biography: Mr. Westbrook is President and Chief Executive Officer of KRW Advisors, LLC, a consulting and advisory firm, a position he has held since October 2007. Mr. Westbrook also served as Chairman and Chief Strategic Officer of Millennium Digital Media Systems, L.L.C. (“MDM”), a broadband services company that later changed its name to Broadstripe LLC, from September 2006 until October 2007. Mr. Westbrook was also President and Chief Executive Officer of MDM from May 1997 until October 2006. Broadstripe LLC (formerly MDM) and certain of its affiliates filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in January 2009, approximately 15 months after Mr. Westbrook resigned. Mr. Westbrook holds an undergraduate degree in Business Administration from the University of Washington and a Juris Doctor degree from Harvard Law School. Qualifications and Skills Supporting Election to the Board: ◾ Expertise in the telecommunications industry ◾ Core legal, media, marketing and risk analysis skills ◾ Public company director and committee experience |  Director Since: 2020 Age: 55 Other Public Company Boards: ◾ Hellenic Telecommunications Organization (OTE) Board Committees: ◾ Compensation | | | | Michael Wilkens SENIOR VICE PRESIDENT GROUP CONTROLLING (FP&A) OF DEUTSCHE TELEKOM Biography: Mr. Wilkens has served as Senior Vice President Group Controlling (FP&A) of Deutsche Telekom since October 2013. He joined Deutsche Telekom in 2001 and has since held various senior management positions in finance, as well as in international sales and marketing, working in Germany, Austria, the UK and Poland. Mr. Wilkens is a member of the board of directors of the French/German Joint Venture BUYIN and rolling chairman of its finance committee, as well as member of the board of directors of Hellenic Telecommunications Organization (OTE) and a member of the board of directors of T-Mobile Netherlands B.V. Additionally, he is a member of the advisory boards of T-Mobile Netherlands and Deutsche Telekom’s Tower-Co business. Prior to his career at Deutsche Telekom, he held senior positions in finance at E-Plus Mobilfunk GmbH and Debitel AG in Germany. Mr. Wilkens holds a Bachelor of Arts (with honors) in Finance and Accounting from Hochschule Bremen and Leeds Metropolitan University. Qualifications and Skills Supporting Election to the Board: ◾ Expertise in technology, media and telecommunications industries ◾ Expertise in finance and international sales and marketing |
| | | 30 | | PROXY STATEMENT 2021 ⬛ |
The following sets forth information regarding the executive officers of the Company. Biographical information pertaining to Mr. Sievert, who is both an executive officer and a director of the Company, can be found in the Section titled “Proposal 1—Election of Directors.” | | | | | | | T-Mobile 2019 Proxy Statement | Name | | 13Age | | Position | | | | G. Michael Sievert | | 51 | | President and Chief Executive Officer | | | | Peter Osvaldik | | 43 | | Executive Vice President and Chief Financial Officer | | | | Peter A. Ewens | | 58 | | Executive Vice President, Corporate Strategy and Development | | | | Deeanne King | | 54 | | Executive Vice President and Chief Human Resource Officer | | | | David A. Miller | | 60 | | Executive Vice President, General Counsel and Secretary | | | | Neville R. Ray | | 58 | | President, Technology | | | | Matthew A. Staneff | | 43 | | Executive Vice President and Chief Marketing Officer |
Mr. Osvaldik serves as our Executive Vice President and Chief Financial Officer, a position he has held since July 2020, and is responsible for leading the financial functions of the Company. From June 2016 to June 2020, he served as our Chief Accounting Officer and Senior Vice President of Finance. From January 2016 to June 2016, Mr. Osvaldik served as our Vice President, External Reporting & Technical Accounting. Prior to joining T-Mobile, from May 2014 to December 2015, he served as Chief Accounting Officer at Outerwall Inc. (formerly Coinstar, Inc.), a provider of automated retail solutions, including movie and video game rental kiosks as well as coin cashing machines. From November 2010 to May 2014, he served in various capacities at Outerwall Inc. including as Corporate Controller and as Controller, Coinstar LOB. Prior to that, Mr. Osvaldik was a Senior Manager at PricewaterhouseCoopers LLP, a national public accounting firm. Mr. Osvaldik received Bachelor’s degrees in Accounting and Biochemistry from Western Washington University. Mr. Ewens serves as our Executive Vice President, Corporate Strategy and Development. He leads the Company’s corporate strategy, business development and M&A activities, which include spectrum strategy and acquisitions and co-brand partnerships. Mr. Ewens has also served as Executive Vice President and Chief Strategy Officer of T-Mobile USA since July 2010. From April 2008 until July 2010, Mr. Ewens was Senior Vice President, Corporate Strategy at T-Mobile USA. Before joining T-Mobile USA, Mr. Ewens was Vice President of OEM Business at Sun Microsystems, a computer software and information technology services company, from June 2006 to March 2008. Before that, Mr. Ewens was a partner at McKinsey & Company, a global management consulting firm. Mr. Ewens holds a Master of Science in Management from the Sloan School at Massachusetts Institute of Technology, and Master’s and Bachelor’s degrees in Electrical Engineering from the University of Toronto. Ms. King serves as our Executive Vice President and Chief Human Resources Officer. Ms. King is responsible for leading the human resources function that supports our employees across the country. Over the past 30+ years, Ms. King has held a wide variety of executive positions across nearly all functions at Sprint including most recently the role of Chief Human Resources Officer and Chief Diversity Officer. Ms. King held that position from August 2018 to April 2020, encompassing leadership of all human resources operations and diversity and inclusion programs. From August 2017 to August 2018, she served as Senior Vice President, Omni-Channel Operations, Customer Experience and Fraud Operations. Prior to that in October 2014 through August 2017 she served as Vice President, Omni-Channel Operations and Customer Experience. Ms. King received a Bachelor of Business Administration in Computer Information Systems degree from Baylor University in 1989 as well as completed the Strategic Business Leadership Series program from Georgetown University in 2007 and the Executive Leadership Program in 2012 from Duke University. | | | ⬛ PROXY STATEMENT 2021 | | 31 |
Executive Officers Proposal 1 - Election
Mr. Miller serves as our Executive Vice President, General Counsel and Secretary. Mr. Miller oversees all legal affairs and government affairs functions of Directors the Company. Mr. Miller has also served as 2019T-Mobile USA’s Chief Legal Officer, Executive Vice President, General Counsel and Secretary. Mr. Miller was appointed Senior Vice President and General Counsel of T-Mobile USA in April 2002 and Executive Vice President in January 2011. Previously, Mr. Miller served as Director Nominees The Board has nominated 12 directorsof Legal Affairs for election atWestern Wireless (a predecessor to T-Mobile USA) from March 1995 to May 1999, and he became Vice President of Legal Affairs of VoiceStream in May 1999 following its spin-off from Western Wireless. VoiceStream was acquired by Deutsche Telekom in May 2001, when it became T-Mobile USA. Prior to joining Western Wireless, Mr. Miller was an attorney with the Annual Meeting to servelaw firm of Lane Powell and began his law career as directors for terms that would end atan attorney with the 2020 Annual Meeting of Stockholders. Olaf Swantee has not been nominated for re-electionfirm McCutchen, Doyle, Brown and his Board service will endEnersen. Mr. Miller serves on the dateboard of directors of the Annual Meeting. The Board would likeCompetitive Carriers Association and is a member of its Executive Committee. Mr. Miller holds a Bachelor’s degree in Economics from the University of Washington and a Juris Doctor from Harvard Law School.
Mr. Ray serves as our President, Technology. Mr. Ray joined T-Mobile USA (then VoiceStream) in April 2000 and from December 2010 to recognize Mr. SwanteeNovember 2019, served as its Chief Technology Officer, responsible for histhe national management and development of the T-Mobile USA wireless network and the Company’s information technology services and contributionsoperations. Prior to joining T-Mobile USA, Mr. Ray served as Network Vice President for Pacific Bell Mobile Services. He currently serves on the board of directors of Next Generation Mobile Networks Alliance, a mobile telecommunications association of mobile operators, vendors, manufacturers and research institutes, and on the board of governors of 5G Americas, a mobile telecommunications association of mobile operators, vendors, and manufacturers. Both associations have a focus on the advancement and development of 5G technologies and services. He has previously served as a member of the Board. National Telecommunications and Information Administration’s Commerce Spectrum Management Advisory Committee and the Federal Communications Commission’s Communications Security, Reliability and Interoperability Council. Mr. Ray is an honors graduate of City University of London and a member of the Institution of Electrical and Electronic Engineers and the Institution of Civil Engineers. Mr. Staneff serves as our Executive Vice President and Chief Marketing Officer, responsible for everything from brand strategy and insights to digital experiences and marketing, to media, commercial, sponsorships, events, offers, promotions and customer acquisition and management. Mr. Staneff joined T-Mobile in November 2002. Prior to his role as Chief Marketing Officer, Mr. Staneff held several leadership positions at T-Mobile, including EVP Chief Commercial Officer, SVP Product and Customer Management, SVP and VP Customer Loyalty and more. With nearly two decades of experience at T-Mobile, Mr. Staneff has deep knowledge of the wireless industry. Mr. Staneff holds a Master of Business Administration degree from Seattle University and a Bachelor of Science in Economics degree from the University of Washington. | | | 32 | | PROXY STATEMENT 2021 ⬛ |
The Audit Committee has appointed PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2021. Although ratification of the appointment of PricewaterhouseCoopers LLP by our stockholders is not required, the Board has nominatedis submitting the selection of PricewaterhouseCoopers LLP to our stockholders for ratification as a new director for election, Srini Gopalan.matter of good corporate governance. If elected, Mr. Gopalan’s termthe selection is not ratified, the Audit Committee will begin on June 13, 2019. Other than Dr. Illek and Mr. Gopalan, all nominees were electedconsider whether it is appropriate to select another independent registered public accounting firm. We expect representatives of PricewaterhouseCoopers LLP to be present at the 2018 Annual Meeting of Stockholders. Each nominee was nominated by the Board on the recommendation of the NominatingMeeting. They will have an opportunity to make a statement if they so desire and Corporate Governance Committee. The Board has found each nomineeare expected to be qualified based on his or her qualifications, experience, attributes, skills and whether he or she meets the applicable independence standards. Each of the nominees has consentedavailable to stand for election and we do not anticipate any candidate will be unavailablerespond to serve. In the event that any of the nominees should be unavailable for election as a result of an unexpected occurrence, shares may be voted for the election of such substitute nominee as the Board may nominate. In the alternative, if a vacancy remains, the Board may fill such vacancy at a later date or reduce the size of the Board, subject to certain requirements in our certificate of incorporation. The Board knows of no reason why any of the nominees would be unavailable or unable to serve.
Messrs. Höttges, Gopalan, IIlek, Jacobfeuerborn, Kübler, Langheim and Westbrook and Ms. Taylor were designated for nominationappropriate questions by Deutsche Telekom pursuant to its rights under our certificate of incorporation and the Stockholder’s Agreement.stockholders.
| | | | | | | | | OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2021 | | | |
Required Vote
Under our bylaws, directors are elected by a plurality of the votes cast by stockholders entitled to vote on the election of directors at the Annual Meeting. Shares represented by executed proxies received by the Company will be voted, unless otherwise marked withheld, “FOR” the election of each of the nominees.
| | |  | | Our Board of Directors recommends a voteFOR the election to the Board of each of the nominees listed below |
| | | | | 
Director Since:
2013
Age:
65
Other Public
Company Boards:
∎ Novartis AG
∎ ICF International Inc.
∎ Stryker Corporation
Board Committees:
∎ Audit (Chair)
| | Srikant M. Datar
Arthur Lowes Dickinson Professor at the Graduate School of Business Administration at Harvard University; Senior Associate Dean for University Affairs
Biography:
Mr. Datar is the Arthur Lowes Dickinson Professor at the Graduate School of Business Administration at Harvard University. Mr. Datar is a Chartered Accountant and planner in industry, and has been a professor of accounting and business administration at Harvard since July 1996; he previously served as a professor at Stanford University and Carnegie Mellon University. Mr. Datar received gold medals upon his graduation from the Indian Institute of Management, Ahmedabad, and the Institute of Cost and Works Accountants of India.
Mr. Datar holds a Master’s degree in Statistics and Economics and a Ph.D. in Business from Stanford University.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in accounting, governance and risk management
∎ Public company director and committee experience
∎ Academic and commercial perspective on complex issues
| | | | | | | |
| | | | | 14 | | T-Mobile 2019 Proxy Statement | | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | 
Nominee
Age:
48
Other Public
Company Boards:
∎ Hellenic Telecommunications Organization (OTE)
| | Srini Gopalan
Member of the Board of Management Deutsche Telekom AG for Europe
Biography:
Since January 1, 2017, Mr. Gopalan has served as a member of the Board of Management Deutsche Telekom AG, our majority stockholder and a leading integrated telecommunications company. He is responsible for the Europe segment of the company. From September 2013 to September 2016, he served as the Consumer Director at Bharti Airtel in India, where he was responsible for consumer business that covered broadband connections and satellite TV, in addition to mobile communications. Prior to joining Bharti Airtel, from August 2010 to August 2013, he was the Consumer Director at Vodafone UK. Prior to that, from June 2009 to August 2010, he was the Chief Marketing Officer at T-Mobile UK and was part of the management team that led T-Mobile UK to the joint venture with Orange Communications SA, “everything-everywhere”. Prior to that, between 1999 and 2009, Mr. Gopalan worked at Capital One in several functions – starting as Senior Vice President, Head of UK Card and leaving as Managing Director UK.
Mr. Gopalan studied Business Administration at St. Stephen’s College in New Delhi, India and later received a Master of Business Administration at Indian Institute of Management Ahmedabad in Ahmedabad, India.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in global telecommunications
∎ Core business, management and leadership skills
| | | | | | | |
| | | | | 
Director Since:
2013
Age:
51
Board Committees:
∎ Compensation
∎ Executive
∎ Nominating and Corporate Governance
| | Lawrence H. Guffey
Chief Executive Officer of LG Capital Investors LLC
Biography:
Mr. Guffey is Chief Executive Officer of LG Capital Investors LLC, a single family office formed in 2014, and Managing Partner of Twin Point Capital, the principal investment arm of the family office. From 1991 to 2013, Mr. Guffey was with The Blackstone Group, an asset management and financial services company, most recently serving as Senior Managing Director (Partner) in the Private Equity Group. Mr. Guffey led many of The Blackstone Group’s media and communications investment activities and managed Blackstone Communications Advisors. Mr. Guffey was a member of the Supervisory Board at Deutsche Telekom, our majority stockholder and a leading integrated telecommunications company, from June 2006 to October 2013. He was a Director of New Skies Satellites Holdings Ltd. from January 2005 to December 2007, Axtel SA de CV from May 2000 to June 2013, FiberNet L.L.C. from 2001 to 2003, iPCS Inc. from August 2000 to September 2002, PAETEC Holding Corp. from February 2000 to 2002, and Commnet Cellular Inc. from February 1998 to December 2001. Mr. Guffey also served as a Director of TDC A/S from February 2006 to March 2013 and Wind Mobile from 2014 to 2016.
He holds a Bachelor of Arts and graduatedmagna cum laude from Rice University, where he was elected to Phi Beta Kappa.
Qualifications and Skills Supporting Election to the Board:
∎ Core financial and business skills
∎ Experience overseeing investments in media and communications industries
∎ Public company director and committee experience
| | |
| | | | | | | T-Mobile 2019 Proxy Statement | | 15 |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | 
Director Since:
2013
Age:
56
Other Public
Company Boards:
∎ Henkel AG & Co. KGaA
∎ BT Group plc
Board Committees:
∎ Executive (Chair)
| | Timotheus Höttges
Chief Executive Officer of Deutsche Telekom
Biography:
Since January 2014, Mr. Höttges has served as Chief Executive Officer of Deutsche Telekom, our majority stockholder and a leading integrated telecommunications company. From March 2009 to December 2013, he served as Deutsche Telekom’s Chief Financial Officer and a member of the Board of Management. From December 2006 to March 2009, he was a member of the Board of Management responsible for theT-Home Unit (fixed network and broadband business, as well as integrated sales and service in Germany). From January 2003 to December 2006, Mr. Höttges headed European operations as a member of the Board of Management ofT-Mobile International.
Mr. Höttges studied Business Administration at the University of Cologne.
Qualifications and Skills Supporting Election to the Board:
∎ Chief executive officer of major global communications company
∎ Core finance, business and leadership skills
| | | | | | | |
| | | | | 
Director Since:
2018
Age:
54
Board Committees:
∎ Compensation
∎ Executive
| | Christian P. Illek
Chief Financial Officer of Deutsche Telekom
Biography:
Dr. Illek has served as the Chief Financial Officer of Deutsche Telekom, our majority stockholder and a leading integrated telecommunications company, since January 2019.
Since April 2015, he has served as Chief Human Resources Officer and Member of Management Board of Deutsche Telekom. Dr. Illek has also served as Chairman of the Supervisory Board forT-Systems International GmbH since November 2016 (a subsidiary of Deutsche Telekom). Prior to that, Dr. Illek was Chairman of Management Board at Microsoft Germany from September 2012 to March 2015. From April 2010 to September 2012, he was Director of Marketing at Telekom Deutschland GmbH. In this position, he was responsible for all marketing activities for both consumers and business customers in Germany. He was also in charge of the Wholesale Center and the Value-Added Services Center, as well as international product development for Deutsche Telekom’s fixed-network, IPTV, a convergent and business customer portfolio. Before joining Deutsche Telekom, Dr. Illek held various managerial positions at Bain & Company and at Dell, in both Germany and in Switzerland.
Dr. Christian P. Illek studied chemistry and business administration in Düsseldorf and Munich, beginning his career at the University of Munich in 1989.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in global telecommunications industry
∎ Expertise in human resources, business and finance
| | |
| | | | | 16 | | T-Mobile 2019 Proxy Statement | | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | 
Director Since:
2014
Age:
58
Board Committees:
∎ Executive
| | Bruno Jacobfeuerborn
Chief Executive Officer of DFMG Deutsche Funkturm GmbH and Chief Executive Officer of Comfortcharge GmbH
Biography:
Mr. Jacobfeuerborn has been Chief Executive Officer of DFMG Deutsche Funkturm GmbH since January 2017 and Chief Executive Officer of Comfortcharge GmbH since January 2018. Previously, he served as the Chief Technology Officer of Deutsche Telekom AG from February 2012 to December 2017. Deutsche Telekom AG is our majority stockholder and a leading integrated telecommunications company. He also served as the Director of Technology Telekom Deutschland GmbH from April 2010 to December 2016. Prior to that, Mr. Jacobfeuerborn was Director of Technology ofT-Mobile Deutschland andT-Home in Germany from July 2009 to March 2010. In this dual role, he was responsible for the technology business (both mobile and fixed network) in Germany. From April 2007 to July 2009, he was Managing Director of Technology, IT and Procurement at Polska Telefonica Cyfrowa. Mr. Jacobfeuerborn joined what is now Deutsche Telekom AG in 1989 and has held several positions with increasing responsibility within the group.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in global telecommunications industry
∎ Wireless network and technology expertise
∎ Core finance, business and leadership skills
| | | | | | | | 
Director Since:
2013
Age:
56
Other Public
Company Boards:
∎ Ströer SE & Co. KGaA
∎ Hellenic Telecommunications Organization (OTE) (2013-2018)
Board Committees:
∎ Compensation
∎ Executive
| | Raphael Kübler
Senior Vice President of the Corporate Operating Office of Deutsche Telekom
Biography:
In January 2014, Mr. Kübler assumed the position of Senior Vice President of the Corporate Operating Office of Deutsche Telekom, our majority stockholder and a leading integrated telecommunications company, and he reports directly to the Chief Executive Officer of Deutsche Telekom. From July 2009 to December 2013, Mr. Kübler served as Senior Vice President Group Controlling at Deutsche Telekom. In this position, he was responsible for the financial planning, analysis and steering of the overall Deutsche Telekom Group as well as the financial management of central headquarters and shared services. From November 2003 to June 2009, Mr. Kübler served as Chief Financial Officer ofT-Mobile Deutschland GmbH, the mobile operations of Deutsche Telekom in Germany now known as Telekom Deutschland GmbH (a wholly owned subsidiary of Deutsche Telekom).
Mr. Kübler studied Business Administration at H.E.C. in Paris and the Universities of Bonn and Cologne. He holds a doctoral degree from the University of Cologne.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in global telecommunications industry
∎ Core business, management and leadership skills
∎ Complex financial management experience
| | |
| | | | | | | T-Mobile 2019 Proxy Statement | | 17 |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | 
Director Since:
2013
Age:
53
Board Committees:
∎ Executive
∎ Nominating and Corporate Governance
| | Thorsten Langheim
Member of the Deutsche Telekom AG Board of Management, USA and Group Development
Biography:
Thorsten Langheim joined the Board of Management of Deutsche Telekom, our majority stockholder and a leading integrated telecommunications company, on January 1, 2019, where he is responsible for the “USA and Group Development” Board department, overseeing Deutsche Telekom’s U.S. business as well as corporate development, portfolio strategy and group M&A activities. This includes overseeing Deutsche Telekom’s 12% stake in BT Group as well as the management of Deutsche Telekom’s subsidiaries T-Mobile Netherlands and Deutsche Funkturm. In addition, Mr. Langheim also serves as the Chairman and Co-founder of Deutsche Telekom Capital Partners, where he is responsible for the venture capital and private equity activities of Deutsche Telekom.
Prior to that, from 2009 to December 2018, he first served as Senior Vice President of Corporate Development and then as Executive Vice President Group Development at Deutsche Telekom. Prior to his roles at Deutsche Telekom, Mr. Langheim was Managing Director at the Private Equity Group of The Blackstone Group, an asset management and financial services company, from May 2004 to June 2009, primarily focusing on private equity investments in Germany. Before that, Mr. Langheim was Investment Banker and Vice President European M&A at J.P. Morgan in London and Assistant Director at WestLB in Düsseldorf between 1995 and 2004.
Mr. Langheim is a member of the Supervisory Board of Deutsche Sporthilfe as well as Chairman of T-Mobile Netherlands and Deutsche Funkturm.
Mr. Langheim holds a Master of Science degree in International Securities, Investment and Banking from the ISMA Centre for Education and Research at the University of Reading and a bachelor’s degree (Hons) in European Finance and Accounting from the University of Bremen (Germany) and Leeds Business School (United Kingdom).
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in global telecommunications industry
∎ Experience overseeing telecommunications and technology investments
∎ Corporate strategy and M&A experience
| | | | | | | | 
Director Since:
2013
Age:
60
Board Committees:
∎ Executive
| | John J. Legere
Chief Executive Officer ofT-Mobile US, Inc.
Biography:
Mr. Legere joinedT-Mobile USA in September 2012 as President and Chief Executive Officer and became our President and Chief Executive Officer on April 30, 2013 upon the consummation of the Metro Combination. Mr. Legere has over 38 years’ experience in the U.S. and global telecommunications and technology industries. Prior to joiningT-Mobile USA, Mr. Legere served as Chief Executive Officer of Global Crossing Limited, a telecommunications company, from October 2001 to October 2011. Before joining Global Crossing, he served as Chief Executive Officer of Asia Global Crossing; as president of Dell Computer Corporation’s operations in Europe, the Middle East, and Africa; as President, Asia-Pacific for Dell; as president of AT&T Asia Pacific; as head of AT&T’s outsourcing program and as head of AT&T global strategy and business development. Mr. Legere serves on the CTIA Board of Directors.
Mr. Legere holds a bachelor’s degree in Business Administration from the University of Massachusetts, a Master of Science degree as an Alfred P. Sloan Fellow at the Massachusetts Institute of Technology, and a Master of Business Administration degree from Fairleigh Dickinson University. He also completed Harvard Business School’s Program for Management Development.
Qualifications and Skills Supporting Election to the Board:
∎ Chief Executive Officer ofT-Mobile
∎ Expertise in telecommunications and technology industries
| | |
| | | | | 18 | | T-Mobile 2019 Proxy Statement | | |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | 
Director Since:
2018
Age:
49
Other Public
Company Boards:
∎ Shaw Communications
| | G. Michael (Mike) Sievert
President and Chief Operating Officer ofT-Mobile US, Inc.
Biography:
Mr. Sievert serves as our President and Chief Operating Officer. Mr. Sievert is responsible for guiding all customer-facing operations across the business, including marketing, product development, retail management, sales and customer care for all of our direct and indirect channels and each of our brands. Mr. Sievert served as our Executive Vice President and Chief Marketing Officer from April 2013 to February 2015, and from November 2012 to April 2013, Mr. Sievert was Executive Vice President and Chief Marketing Officer ofT-Mobile USA.
Prior to joiningT-Mobile USA, Mr. Sievert was an entrepreneur and investor involved with several Seattle-areastart-up companies. From April 2009 to June 2011, he was Chief Commercial Officer at Clearwire Corporation, a broadband communications provider, responsible for all customer-facing operations. From February 2008 to January 2009, Mr. Sievert wasco-founder and Chief Executive Officer of Switchbox Labs, Inc., a consumer technologies developer, leading up to its sale to Lenovo. He also served from January 2005 to February 2008 as Corporate Vice President of the worldwide Windows group at Microsoft Corporation, responsible for global product management and P&L performance for that unit. Prior to Microsoft, he served as Executive Vice President and Chief Marketing Officer at AT&T Wireless for three years. He also served as Chief Sales and Marketing Officer at E*TRADE Financial and began his career with management positions at Procter & Gamble and IBM. He has served on the boards of Rogers Wireless Communications in Canada, Switch & Data Corporation, and a number of technologystart-ups.
Mr. Sievert holds a bachelor’s degree in Economics from the Wharton School at the University of Pennsylvania.
Qualifications and Skills Supporting Election to the Board:
∎ President and Chief Operating Officer ofT-Mobile
∎ Expertise in telecommunications and technology industries
| | | | | | | |
| | | | |
Director Since:
2013
Age:
55
Lead Independent Director
Other Public
Company Boards:
∎ First Interstate BancSystem, Inc.
∎ Black Hills Corporation
∎ NiSource Inc. (2012 to 2015)
Board Committees:
∎ Nominating and Corporate Governance (Chair)
∎ Audit
| | Teresa A. Taylor
Chief Executive Officer of Blue Valley Advisors, LLC
Biography:
Since April 2011, Ms. Taylor has served as Chief Executive Officer of Blue Valley Advisors, LLC, an advisory firm. Ms. Taylor served as Chief Operating Officer of Qwest Communications, Inc., a telecommunications carrier, from August 2009 to April 2011. She served as Qwest’s Executive Vice President, Business Markets Group, from January 2008 to April 2009 and served as its Executive Vice President and Chief Administrative Officer from December 2005 to January 2008. Ms. Taylor served in various positions with Qwest and the former US West beginning in 1987. During her24-year tenure with Qwest and US West, she held various leadership positions and was responsible for strategic planning and execution, sales, marketing, product, network, information technology, human resources and corporate communications.
Ms. Taylor holds a Bachelor of Science degree from the University of Wisconsin-LaCrosse.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in technology, media and telecommunications industries
∎ Expertise in strategic planning and execution, technology development, human resources, labor relations and corporate communications
∎ Public company director and committee experience
| | | | | | | |
| | | | | | | T-Mobile 2019 Proxy Statement | | 19 |
PROPOSAL 1 - ELECTION OF DIRECTORS
| | | | | 
Director Since:
2013
Age:
63
Other Public
Company Boards:
∎ Archer Daniels Midland Company
∎ Camden Property Trust
∎ The Mosaic Company
∎ Stifel Financial Corp. (2007 to 2018)
Board Committees:
∎ Compensation (Chair)
∎ Audit
| | Kelvin R. Westbrook
President and Chief Executive Officer of KRW Advisors, LLC
Biography:
Mr. Westbrook is President and Chief Executive Officer of KRW Advisors, LLC, a consulting and advisory firm, a position he has held since October 2007. Mr. Westbrook also served as Chairman and Chief Strategic Officer of Millennium Digital Media Systems, L.L.C. (“MDM”), a broadband services company that later changed its name to Broadstripe LLC, from September 2006 until October 2007. Mr. Westbrook was also President and Chief Executive Officer of MDM from May 1997 until October 2006. Broadstripe LLC (formerly MDM) and certain of its affiliates filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in January 2009, approximately 15 months after Mr. Westbrook resigned.
Mr. Westbrook holds an undergraduate degree in Business Administration from the University of Washington and a Juris Doctor degree from Harvard Law School.
Qualifications and Skills Supporting Election to the Board:
∎ Expertise in the telecommunications industry
∎ Core legal, media, marketing and risk analysis skills
∎ Public company director and committee experience
| | |
| | | | | 20 | | T-Mobile 2019 Proxy Statement | | |
Executive Officers
The following sets forth information regarding the executive officers of the Company. Biographical information pertaining to Messrs. Legere and Sievert, who are both executive officers and directors of the Company, can be found in the Section entitled “Proposal 1—Election of Directors.”
| | | | | | | | Name
| | Age
| | Position
| John J. Legere
| | | | 60
| | | Chief Executive Officer
| G. Michael Sievert
| | | | 49
| | | President and Chief Operating Officer
| David R. Carey
| | | | 65
| | | Executive Vice President, Corporate Services
| J. Braxton Carter
| | | | 60
| | | Executive Vice President and Chief Financial Officer
| Peter A. Ewens
| | | | 56
| | | Executive Vice President, Corporate Strategy
| Thomas C. Keys
| | | | 60
| | | President, MetroPCS
| David A. Miller
| | | | 58
| | | Executive Vice President, General Counsel and Secretary
| Neville R. Ray
| | | | 56
| | | Executive Vice President and Chief Technology Officer
| Elizabeth A. McAuliffe
| | | | 56
| | | Executive Vice President, Human Resources
|
David R. Carey
Mr. Carey serves as our Executive Vice President, Corporate Services and is responsible for leading the Enterprise Program Office, Corporate Communications, Corporate Real Estate, Corporate Responsibility, Corporate Security and a broad range of responsibilities in leading the Office of the Chief Executive Officer. Mr. Carey has also served in the same role withT-Mobile USA, Inc., the wholly owned subsidiary of the Company(“T-Mobile USA”), since February 2013. Mr. Carey’s career spans 44 years in the telecom and energy services industry. Before joiningT-Mobile USA, from October 2011 to February 2013, Mr. Carey served as Chief Executive Officer and Founder of Telescope Advisors, LLC, an advisory firm specializing in telecommunications. From September 1999 to October 2011, Mr. Carey served in various executive positions, including Executive Vice President, Chief Marketing Officer, Head of Global Sales, Strategy and Corporate Development and Chief Ethics Officer at Global Crossing Limited, a telecommunications company. In addition to Global Crossing, his experience includes executive leadership positions at AT&T, LG&E Energy and Frontier Communications. Mr. Carey holds a Master of Science in Management Science from the Massachusetts Institute of Technology, where he was appointed to a Sloan Fellowship, and received his Bachelor of Science degree at Clarkson University. He has also attended executive programs at the Harvard Business School and the Wharton School at the University of Pennsylvania.
J. Braxton Carter
Mr. Carter serves as our Executive Vice President and Chief Financial Officer, and is responsible for leading the financial functions of the Company. Mr. Carter served as MetroPCS Communications, Inc.’s Chief Financial Officer from March 2005 until the consummation of the Metro Combination. Mr. Carter also served as MetroPCS Communications Inc.’s Vice Chairman from May 2011 until the consummation of the Metro Combination. From February 2001 to March 2005 he was Vice President, Corporate Operations of MetroPCS Communications, Inc. Mr. Carter also has extensive senior management experience in the wireless and retail industry and spent ten years in public accounting. He is a certified public accountant. Mr. Carter holds a Bachelor of Science degree from the University of Colorado with a major in accounting.
Peter A. Ewens
Mr. Ewens serves as our Executive Vice President, Corporate Strategy. He leads the Company’s corporate strategy, business development and M&A activities, which include spectrum strategy and acquisitions andco-brand partnerships. Mr. Ewens has also served as Executive Vice President and Chief Strategy Officer ofT-Mobile USA since July 2010. From April 2008 until July 2010, Mr. Ewens was Senior Vice President, Corporate Strategy atT-Mobile USA. Before joiningT-Mobile USA, Mr. Ewens was Vice President of OEM Business at Sun Microsystems, a computer software and information technology services company, from June 2006 through March 2008. Before that, Mr. Ewens was a partner at McKinsey & Company, a global management consulting firm. Mr. Ewens holds a Master of Science in Management from the Sloan School at Massachusetts Institute of Technology, and Master’s and bachelor’s degrees in Electrical Engineering from the University of Toronto.
Thomas C. Keys
Mr. Keys serves as our President, MetroPCS, and is responsible for our Metro byT-Mobile business. Previously, Mr. Keys served as our Executive Vice President and Chief Operating Officer, MetroPCS Business, from April 2013 to February 2015. Mr. Keys served as MetroPCS Communications Inc.’s President from May 2011 until the consummation of the Metro Combination, and as Chief Operating Officer since June 2007. Mr. Keys also served as MetroPCS Communications Inc.’s President from June 2007 to December 2007, as Senior Vice President, Market Operations, West, from January 2007 until June 2007, and as Vice President and General Manager, Dallas, from April 2005 until January 2007. Mr. Keys holds a Bachelor of Arts degree from the State University of New York at Oswego, and a Master of Arts from Syracuse University.
David A. Miller
Mr. Miller serves as our Executive Vice President, General Counsel and Secretary. Mr. Miller oversees all legal affairs and government affairs functions of the Company. Mr. Miller has also served asT-Mobile USA’s Chief Legal Officer, Executive Vice President, General Counsel and Secretary. Mr. Miller was appointed Senior Vice President and General Counsel ofT-Mobile USA in April 2002 and Executive Vice President in
| | | | | | | T-Mobile 2019 Proxy Statement | | 21 |
EXECUTIVE OFFICERS
January 2011. Previously, Mr. Miller served as Director of Legal Affairs for Western Wireless (a predecessor toT-Mobile USA) from March 1995 to May 1999, and he became Vice President of Legal Affairs of VoiceStream in May 1999 following itsspin-off from Western Wireless. VoiceStream was acquired by Deutsche Telekom in May 2001, when it becameT-Mobile USA. Prior to joining Western Wireless, Mr. Miller was an attorney with the law firm of Lane Powell and began his law career as an attorney with the firm McCutchen, Doyle, Brown and Enersen. Mr. Miller serves on the Board of Directors of the Competitive Carriers Association and is a member of its Executive Committee. Mr. Miller holds a bachelor’s degree in Economics from the University of Washington and a Juris Doctor from Harvard Law School.
Neville R. Ray
Mr. Ray serves as our Executive Vice President and Chief Technology Officer. Mr. Ray joinedT-Mobile USA (then VoiceStream) in April 2000 and since December 2010 has served as its Chief Technology Officer, responsible for the national management and development of theT-Mobile USA wireless network and the company’s information technology services and operations. Prior to joiningT-Mobile USA, Mr. Ray served as Network Vice President for Pacific Bell Mobile Services. He currently serves on the Board of Directors of Next Generation Mobile Networks Alliance, a mobile telecommunications association of mobile operators, vendors, manufacturers and research institutes, and as the Chairperson of the Board of Governors of 5G Americas, a mobile telecommunications association of mobile operators, vendors, and manufacturers. Both
associations have a focus on the advancement and development of 5G technologies and services. He has previously served as a member of the National Telecommunications and Information Administration’s Commerce Spectrum Management Advisory Committee and the Federal Communications Commission’s Communications Security, Reliability and Interoperability Council. Mr. Ray is an honors graduate of City University of London and a member of the Institution of Electrical and Electronic Engineers and the Institution of Civil Engineers.
Elizabeth A. McAuliffe
Ms. McAuliffe serves as our Executive Vice President, Human Resources. Ms. McAuliffe is responsible for leading the human resources function that supports our employees across the country. From January 2014 to June 2016 she served as Senior Vice President of Total Rewards and Operations, encompassing leadership of all compensation, Rewards & Recognition, benefits, payroll, human resources systems and human resources operations. From June 2013 to January 2014, she served as Vice President, CHRO Regions, at Providence Health & Services, a nonprofit health system. From January 2011 to June 2013, she served as Senior Vice President, Human Resources atT-Mobile. Prior to joiningT-Mobile, Ms. McAuliffe held various positions at Starbucks Coffee Company, a coffee retailer, in both the Law & Corporate Affairs department and the Human Resources department. Ms. McAuliffe holds a bachelor’s degree from the University of Massachusetts, Amherst and a Juris Doctor from Northeastern University School of Law.
| | | | | 22 | | T-Mobile 2019 Proxy Statement | | |
Proposal 2 - Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2019
The Audit Committee has appointed PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2019. Although ratification of the appointment of PricewaterhouseCoopers LLP by our stockholders is not required, the Board is submitting the selection of PricewaterhouseCoopers LLP to our stockholders for ratification as a matter of good corporate governance. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm.
We expect representatives of PricewaterhouseCoopers LLP to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and are expected to be available to respond to appropriate questions by stockholders.
| | | | | Our Board of Directors recommends a voteFOR the ratification of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2019 |
Required Vote The affirmative vote of a majority of the votes cast is required to approve this proposal. If the stockholders do not ratify the appointment of PricewaterhouseCoopers LLP, the Audit Committee will reconsider the appointment but is under no obligation to appoint a different independent registered public accounting firm. Pre-Approval Process The Audit Committee is responsible for reviewing and, if appropriate,pre-approving all audit, audit-related andnon-audit services to be performed by our independent registered public accounting firm. The Audit Committee charter authorizes the Audit Committee to establish a policy and related procedures regarding thepre-approval of audit, audit-related andnon-audit services to be performed by our independent registered public accounting firm. The Audit Committee has delegated itspre-approval authority to the Chair of the Audit Committee, who is authorized topre-approve services to be performed by our independent registered public accounting firm and the compensation to be paid for such services if it is impracticable to delay the review and approval of such services and compensation until the next regularly scheduled meeting of the Audit Committee,Committee; provided that, in such case, the Chair shall provide a report to the Audit Committee at its next regularly scheduled meeting of any services and compensation approved by the Chair pursuant to the delegated authority. Fees Paid to PricewaterhouseCoopersPricewaterhouseCooper LLP PricewaterhouseCoopers LLP was paid the following fees for services rendered during fiscal years 20182020 and 2017, all of2019, which were approved in conformity with the Audit Committee’spre-approval process, as described above under“Pre-Approval Process”: | | | | | | | | | | | | 2018 ($) | | | 2017 ($) | | Audit Fees(1) | | | 9,526,000 | | | | 9,330,000 | | Audit-Related Fees(2) | | | 900,000 | | | | 748,000 | | Tax Fees(3) | | | 300,000 | | | | 163,000 | | All Other Fees(4) | | | 1,701,000 | | | | 79,000 | | Total Fees | | | 12,427,000 | | | | 10,320,000 | |
| | | | | | | | | | | | | | | | | 2020 ($) | | 2019 ($) | | | | Audit Fees1 | | | | 42,471,000 | | | | | 12,206,000 | | | | | Audit-Related Fees2 | | | | 2,170,000 | | | | | 892,000 | | | | | Tax Fees3 | | | | 2,735,000 | | | | | 355,000 | | | | | All Other Fees4 | | | | 1,239,000 | | | | | 7,306,000 | | | | | Total Fees | | | | 48,615,000 | | | | | 20,759,000 | |
(1)1 | Audit Fees relate to professional services rendered in connection with the audit of the Company’s annual financial statements and internal control over financial reporting, quarterly review of financial statements included in the Company’s Quarterly Reports on Form10-Q and audit services provided in connection with other statutory and regulatory filings. |
(2) | | | ⬛ PROXY STATEMENT 2021 | | 33 |
Proposal 2 - Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2021 | 2 | Audit-Related Fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under Audit Fees. This category includes fees related to audit and attest services not required by statute or regulations, and consultations concerning financial accounting and reporting standards. |
(3)3 | Tax Fees consist of fees for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and international tax compliance. |
(4)4 | All Other Fees consist of fees for permitted services other than those that meet the criteria above and include fees associated with the proposed Sprint Combination fees to assess mobile advertising for a joint venture and research subscriptions. |
Audit Committee Report In the performance of its oversight responsibilities, the Audit Committee (i) reviewed and discussed with management and the independent registered public accounting firm the Company’s audited financial statements for the fiscal year ended December 31, 2018;2020; (ii) discussed with the Company’s independent registered public accounting firm the matters required to be discussed byapplicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”(“PCAOB”) Auditing Standard No. 1301,Communications with Audit Committees;and the SEC; (iii) received the written disclosures and the letter from the Company’s independent registered public accounting firm required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee regarding independence; and (iv) discussed with the Company’s independent registered public accounting firm any relationships that may impact its objectivity and independence and satisfied itself as to the firm’s independence. | | | | | | | T-Mobile 2019 Proxy Statement | | 23 |
PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2019
Company management is responsible for the assessment and determination of risks associated with the Company’s business, financial reporting, operations and contractual obligations. The Audit Committee, together with the Board of Directors, is responsible for oversight ofoverseeing the Company’s management of risks. As part of its responsibilities for oversight ofoverseeing the Company’s management of risks, the Audit Committee has reviewed and discussed the Company’s enterprise-wide risk assessment, and the Company’s policies with respect to risk assessment and risk management, including discussions of individual risk areas as well as an annual summary of the overall process. The Audit Committee has discussed with the Company’s Internal Audit Department and its independent registered public accounting firm the overall scope of and plans for their respective audits. The Committeecommittee regularly meets with the head of the Company’s Internal Audit Department and representatives of the independent registered public accounting firm, in regular and executive sessions, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting and compliance programs. Management is responsible for the Company’s financial reporting process, including establishing and maintaining adequate internal control over financial reporting and the preparation of the Company’s financial statements. The Company’s independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements and expressing an opinion on the conformity of the Company’s audited financial statements with U.S. generally accepted accounting principles. The Company’s independent registered public accounting firm also is responsible for performing an independent audit of the effectiveness of the Company’s internal control over financial reporting and issuing a report thereon. We rely,The Audit Committee relies, without independent verification, on the information provided to usit and on the representations made by management and the Company’s independent registered public accounting firm. Based on the review and discussion and the representations made by management and the Company’s independent registered public accounting firm, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements for the fiscal year ended December 31, 20182020 be included in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2018.2020. The Audit Committee: Srikant M. Datar, Ph.D., Chairman Teresa A. Taylor Kelvin R. Westbrook The material contained in this Audit Committee Report does not constitute soliciting material, is not deemed filed with the SEC, and is not incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made on, before, or after the date of this Proxy Statement and irrespective of any general incorporation language in such filing, except to the extent that the Company specifically incorporates the Audit Committee Report by reference therein. | | | | | 2434 | | T-Mobile 2019 Proxy Statement | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation
COMPENSATION DISCUSSION AND ANALYSISCompensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) describes our 2020 executive compensation program for the following executive officers who served in the positions set forth below during 2020 (collectively, the “Named Executive Officers”): | | | | | | | | | | This Compensation Discussion and Analysis (“CD&A”) describes our 2018 executive compensation program for the following executive officers (collectively, the “Named Executive Officers”): | | | | | | | ∎⬛ G. Michael Sievert
| | ⬛ Peter Osvaldik | | ⬛ Neville R. Ray | | ⬛ David A. Miller | President and Chief Executive Officer | | Executive Vice
President and
Chief Financial Officer | | President,
Technology | | Executive Vice President, General Counsel and Secretary | ⬛ Peter A. Ewens | | ⬛JohnJ.Legere | | ∎⬛ J.BraxtonCarter
| | ∎⬛ G.MichaelSievert
| | ∎NevilleR.Ray
| | ∎David R. Carey
| Executive Vice
President, Corporate Strategy and Development | | Former Chief Executive Officer | | Former Executive
Vice
President and
Chief Financial Officer | | President and Chief Operating Officer
| | Executive Vice
President and Chief Technology Officer
| | Former Executive Vice President,
Corporate Services |
During 2018,Following a multi-year, comprehensive leadership succession planning process, effective as of April 1, 2020 (the date on which the Sprint Combination closed), Mr. Legere servedSievert was appointed as our President and Chief Executive Officer and Mr. Sievert served as our Chief Operating Officer, through April 29, 2018 (as ratified by the Board on June 13, 2018). Thereafter, Mr. Legere servedceased to serve as our Chief Executive Officer andOfficer. Mr. Sievert served as our President & Chief Operating Officer through March 31, 2020.
Effective April 13, 2020, Mr. Carey ceased to serve as our Executive Vice President, Corporate Services. In addition, effective July 1, 2020, Mr. Osvaldik was appointed Executive Vice President and Chief OperatingFinancial Officer and Mr. Carter ceased to serve as our Executive Vice President and Chief Financial Officer. T-Mobile Had Record Financial Results
| | | ⬛ PROXY STATEMENT 2021 | | 35 |
Executive Compensation | | | | | | | T-MOBILE CAPS THE BEST YEAR EVER IN 2020, MEETING OR EXCEEDING GUIDANCE AS IT LEVERAGES A SYNERGY-BACKED MODEL TO SIMULTANEOUSLY DELIVER CUSTOMER GROWTH AND PROFITABILITY | | |
On April 1, 2020, we closed the Sprint Combination, which enhanced our spectrum portfolio, increased our customer base, altered our product mix and Strong Customer Growthcreated opportunities for synergies in 2018 and Proved, Once Again, That Taking Care of Customers Is Also Good For Stockholders T-Mobile had record financial results in 2018, including record service revenues, record total revenues, strong net income, record fourth quarter Adjusted EBITDA, strong net cash from operating activities and record free cash flow.our operations. We added 7.05.5 million totalpostpaid net customers in 2018, marking2020, the fifth yearbest in the industry and the most in Company history. The total customer count increased to a rowrecord-high of more than 5 million total net102.1 million.
While completing the Sprint Combination and integrating the companies, we continued to successfully translate customer additions.growth into strong financial results. We ended the year2020 with 79.7 million total customers. Our customer growth translated into industry-leading revenue growth. Service revenuerevenues of $32.0$68.4 billion, for 2018 grew at 6.1% year over year. Nettotal service revenues of $50.4 billion, net income of $2.9$3.1 billion, for 2018 was down 36.3% year over year, due to the impact from the Tax Act, which resulted in an income tax benefit of $2.2 billion in 2017, and grew 22.6% year over year excluding the impact from the Tax Act. Adjusted EBITDA of $12.4$24.6 billion. We delivered $1.3 billion grew 10.6% year over year.of synergies from the Sprint Combination in full-year 2020.
AsWith the first and largest nationwide 5G network, at the end of December 31, 2018,T-Mobile2020, our Extended Range 5G covered more than 325280 million people with 4G LTE. across 1.6 million square miles and our Ultra Capacity 5G covered 106 million people.
Our stock price increased by 285.0%58.4% from MayApril 1, 20132020 (the first dayclosing date of trading after the MetroSprint Combination) throughto December 31, 2018. Looking back three years, our stock price has increased 63.3% (January 4, 2016 through December 31, 2018).2020 and 72.0% in 2020. Adjusted EBITDA is anon-GAAP financial measure. Thisnon-GAAP financial measure should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP.U.S. generally accepted accounting principles (“GAAP”). A reconciliation to the most directly comparable GAAP financial measure is provided in Appendix A to this proxy statement.Proxy Statement. 
Our executive compensation program emphasizes pay for performance. As a result, our 20182020 Named Executive Officer compensation reflectsT-Mobile’s strong 20182020 operational and financial performance. | | | | | | | T-Mobile 2019 Proxy Statement | | 25 |
EXECUTIVE COMPENSATION
Executive Compensation Program Our executive compensation program is aligned with our business strategy and is designed to attract, motivate and retain top talent, reward short-term and long-term business results and exceptional performance, and most importantly, maximize stockholder value. Our program is competitive in the marketplace and highly incentive-based, with Company performance determining a significant portion of total compensation. | Key Features of Our Executive Compensation Program |
| | | | | | | | | 36 | | What We DoPROXY STATEMENT 2021 ⬛ |
Executive Compensation KEY FEATURES OF OUR EXECUTIVE COMPENSATION PROGRAM WHAT WE DO  | | |  | | | Emphasis on pay for performance |
| | | | | | Independent compensation consultant |
| | | | | | Executive and director stock ownership guidelines |
| | | | | | Clawback policy to recapture incentive payments |
| | | | | | Use of multiple performance measures and caps on potential incentive payments |
| | | | | | Substantial majority of target total compensation is variable |
| | | | | | Use of executive compensation statements (“tally sheets”) |
| | | | | | Annual risk assessment of compensation programs |
 | | | | | | | What We Don’t Do | | |  | | No short-selling, hedging or pledging of the Company’s securities |
| | | | No excise tax gross ups |
| | | | No guaranteed increases or bonuses |
| | | | No plans that encourage excessive risk taking |
| | | | No single-trigger payments or vesting of equity awards upon a change in control |
| | | | No significant perquisites |
| | | | | | | Goals of Compensation Program
GOALS OF COMPENSATION PROGRAM | | | | | |
What We Pay and Why: Goals and Elements of Compensation | | | | | | | | | | | | | | | | | | | | | | | | | | Emphasis on pay for performance | | | | Attract, retain and motivate talented and experienced executives within the highly competitive and dynamic wireless communications industry | | | | Recognize and reward executives whose skillskills and performance are critical to our success | | | | Align interests of our executives with our stockholders | | | | Encourage appropriate risk taking |
Elements of Total Direct Compensation
| | | | | | | ELEMENTS OF TOTAL DIRECT COMPENSATION | | | | | |
Summary of Current Named Executive Officer Average Target Compensation as of December 31, 20182020 
Long-Term Incentive (LTI) Performance-based restricted stock units (PRSUs) and time-based restricted stock units (RSUs) Emphasis on long-term Company performance Retains and engages executive officers Aligns executive officer interests with our stockholders Approximately 73% of target total direct compensation Number of PRSUs that can be earned is capped at 200% of target Benefits and Perquisites Executive officers are generally not eligible for any additional benefits or perquisites beyond what is provided to the general employee population.Base Salary Competitive fixed base of cash compensation Amount based on individual factors such as scope of responsibility, experience and strategic impact Annual Short-Term Incentive (STI) Cash Award Based entirely on Company performance; not guaranteed Aligned with Company near-term objectives, while also supporting our long-term strategic plan Award opportunities established at threshold, target and maximum values Each measure capped at 200% of target The Compensation Committee considers input from its independent compensation consultant, compensation survey data, and internal comparators among the officer positions when setting target compensation. When setting base salaries, the Compensation Committee also considers the impact of base salary on other compensation elements.
| | | | | 26 | | T-Mobile 2019 Proxy Statement | | |
EXECUTIVE COMPENSATION
To promote a performance-based culture that further aligns the interests of management and stockholders, in 2018 the2020, our executive compensation program focused extensively on variable, performance-based compensation. As illustrated in the charts below,With respect to our Named Executive Officers who were employed by us as of December 31, 2020, the substantial majority of our current Chief Executive Officer’s and such other Named Executive Officers’ actual total compensation as reported in the 20182020 Summary Compensation Table was in the form of variable compensation (short-term and long-term)long-term incentives). Summary of Named
| | | ⬛ PROXY STATEMENT 2021 | | 37 |
Executive Officer Compensation as Reported in the Summary Compensation Table 
CEO 2018 Pay Mix Named Executive Officer 2018 Average Pay Mix (Excluding CEO) (1) The value of stock awards is determined using the aggregate grant date fair value computed in accordance with ASC 718.
Factors Considered in Determining Executive Compensation Compensation Consultant and ManagementCOMPENSATION CONSULTANT AND MANAGEMENT
The Compensation Committee sets compensation levels based on the skills, experience and achievements of each executive officer, taking into account market analysis, input by its independent compensation consultant (Mercer) and the compensation recommendations of our Chief Executive Officer, except with respect to his own position.compensation. The Chief Executive Officer provides recommended annual compensation adjustments tofor the other Named Executive Officers’ base salaries, target annual short-term incentive opportunities and target long-term incentive opportunities. The Compensation Committee believes that input from both its independent compensation consultant and our Chief Executive Officer provides useful information and points of view to assist the Compensation Committee in determining appropriate compensation. Market AnalysisThe Compensation Committee has assessed the independence of Mercer pursuant to the rules prescribed by the SEC and has concluded that no conflict of interest existed in 2020 or currently exists that would prevent Mercer from serving as an independent consultant to the Compensation Committee.
MARKET ANALYSIS We use comparative executive officer compensation data publicly disclosed by a peer group of public companies in addition to compensation survey data to evaluate the competitiveness of our executive officer compensation and to guide the compensation for newly hired and promoted executive officers. We believe a competitive total compensation package is necessary to attract and retain an executive management team with the appropriate abilities and experience required to lead the Company and execute on our strategic business plan. In analyzing this information, we compare our executive compensation program as a whole to the programs of our peer group companies and compare the pay of our individual executives to that of the executive officers of our peer group companies if we believe the positions are sufficiently similar to make meaningful comparisons. We do not target a specific percentile in the range of comparative data for each individual or for each component of compensation.compensation, except as provided below for Mr. Sievert. In determining the amount of base salary, the target annual short-term incentive award value and the target annual long-term incentive award value for each Named Executive Officer, we review the comparative compensation data and consider each executive’s level of responsibility, prior experience, past job performance, internal comparators, contribution to the Company’s success and results achieved. The Compensation Committee exercises its business judgment and discretion and does not apply formulas or assign these factors specific mathematical weights.weights, except as provided below for Mr. Sievert. Under the Sievert Employment Agreement, for 60% of the time-based restricted stock units (“RSUs”) granted to him as annual LTI awards during 2020, the total vesting schedule length must be no longer than the median total vesting schedule length of annual time-based equity incentive awards for Chief Executive Officers in our peer group at the time such RSUs are granted. We reviewed the compensation of Chief Executive Officers in our peer group for purposes of assessing the foregoing and determined that the median total vesting schedule length of annual time-based equity incentive awards for Chief Executive Officers in our peer group was three years, which is the same as the three-year vesting schedule that generally applies to time-based RSUs granted to our employees. Executive Compensation Peer GroupEXECUTIVE COMPENSATION PEER GROUP
We select our peer group based on similarity to us in terms of relative size of revenue and market capitalization, industry and the ability to compete with us for talent at the executive officer level. The Compensation Committee reviews the Company’s peer group on an annual basis. Our 20182020 peer group was initially the same as our 2019 peer group. Effective February 12, 2020, Frontier Communications, Inc. (“Frontier”) was removed from our peer group atbecause Frontier’s market capitalization was significantly lower than that of both T-Mobile and the endother members of 2017.our peer group. This peer group which is described below, was used to set compensation for 2018.2020 executive compensation. In addition, effective April 1, 2020, upon the closing of the Sprint Combination, Sprint was removed from our peer group. T-Mobile was ranked near the median of the peer group for 20182020 (after excluding Frontier and Sprint) both in terms of revenue and market capitalization. | | | | | | | T-Mobile 2019 Proxy Statement | | 27 |
EXECUTIVE COMPENSATION
The following chart showsT-Mobile’s 20182020 peer group of 1412 companies (after excluding Frontier and Sprint) and each such company’s revenue as of fiscalyear-end and market capitalization as of December 31, 2018. Our2020. | | | 38 | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation TMUS Executive Compensation Peer Group | | | | | | | | | | | | Peer Company | | Revenue (in billions)
As of Peer Fiscal Year-End | | | Market Capitalization (in billions)
As of December 31, 2020 | | | | | AT&T, Inc. | | | $181.19 | | | | $ 204.92 | | | | | Charter Communications, Inc. | | | $ 45.76 | | | | $ 132.23 | | | | | Cisco Systems, Inc. | | | $ 49.30 | | | | $ 189.09 | | | | | Comcast Corp. | | | $108.94 | | | | $ 239.75 | | | | | Dish Network Corp. | | | $ 12.81 | | | | $ 17.01 | | | | | Intel Corp. | | | $ 71.97 | | | | $ 204.16 | | | | | Liberty Global plc | | | $ 11.54 | | | | $ 13.90 | | | | | Lumen Technologies, Inc. (formerly CenturyLink, Inc.) | | | $ 22.40 | | | | $ 10.70 | | | | | Microsoft Corporation | | | $143.02 | | | | $1,681.61 | | | | | Motorola Solutions, Inc. | | | $ 7.41 | | | | $ 28.83 | | | | | QUALCOMM Incorporated | | | $ 23.53 | | | | $ 172.30 | | | | | Verizon Communications Inc. | | | $131.87 | | | | $ 243.11 | | | | | Median | | | $ 47.53 | | | | $ 180.69 | | | | | T-Mobile US, Inc. | | | $ 68.40 | | | | $ 167.37 | |
We reviewed our peer group for 2019 has not changed. 
TMUS executive compensationafter the closing of the Sprint Combination and, effective January 1, 2021, we made the following changes to our peer group peer company revenue (in billions) as of peer fiscal year-end market capitalization (in billions) as of December 31, 2018 AT&T, Inc. $170.76 $207.71 CenturyLink, Inc. $23.44 $16.37 Charter Communications, Inc. $43.63 $65.23 Cisco Systems, Inc. $49.33 $194.81 Comcast corp. $94.51 $154.91 Dish network corp. $13.62 $11.68 Frontier Communications Corporation $8.61 $0.25 Intel Corp. $70.85 $214.19 Liberty Global plc $11.96 $15.71 Microsoft corporation $110.36 $779.80group: (a) we removed Motorola Solutions, Inc. $7.34 $18.81 QUALCOMM incorporated $22.73 $68.98 Sprintfrom our peer group because its market capitalization is substantially lower than T-Mobile’s market capitalization and (b) we added International Business Machines, Oracle Corp. $32.41 $23.73 Verizon Communications Inc. $130.86 $232.30 Median $38.02 $67.11 T-Mobile US, Inc. $43.24 $53.97 10th percentile 25th percentile 50th percentile 75th percentile 90th percentileand The Walt Disney Company to our peer revenue TMUS: $43.24 $9.6 $15.9 $38.0 54th percentile $88.6 $124.7 Market Capitalization TMUS: $53.97 $12.9 $17.0 44th Percentile $67.1 $204.5 $226.9group, due to their relevance in terms of financial scope and industry and because they are included in the peer groups of many of our existing peer companies. This revised peer group was used to set executive compensation for 2021.
Analysis of Executive Officer CompensationANALYSIS OF EXECUTIVE OFFICER COMPENSATION
The key components of our annual target total compensation package for executive officers are base salary, annual cash-based short-term incentive awards, and long-term equity incentive awards, including performance-based restricted stock units (“PRSUs”) and time-based restricted stock units (“RSUs”).RSUs. Target Total Direct CompensationTARGET TOTAL DIRECT COMPENSATION
The Compensation Committee reviews the compensation of the Named Executive Officers based on a market analysis prepared by management in partnership with the Compensation Committee’s independent compensation consultant. Based on the Compensation Committee’s assessment of each Named Executive Officer in relation to peer and survey market data as well as the executive officer’s contributioncontributions to the Company’s ongoing strategy, including contributions relatedrelating to the proposed merger with Sprint Corporation (the “Sprint Combination”) pursuant to that certain Business Combination Agreement, dated April 29, 2018, by and between the Company and certain other parties thereto (the “Sprint Business Combination Agreement”),ongoing integration efforts, the Compensation Committee increased the total target compensation of each of ourfor the Named Executive Officers for 2018,2020, including increasesan increase to one or more componentscomponent of base salary, target annual short-term incentive opportunity and target annual long-term incentive opportunity. Increases to target compensation supported the continued retention and engagement of our Named | | | ⬛ PROXY STATEMENT 2021 | | 39 |
Executive Officers.Compensation The following table shows, as of December 31, 2018,2020, the target total direct compensation established for eachthe Named Executive Officer.Officers employed as of December 31, 2020. | | Officer | | Base
Salary ($) | | Target
STIP Percent (1) | | Target
STIP Value ($) | | Total
Target Cash ($) | | Target
LTIP Percent (2) | | Target
LTIP Value ($) | | Target Total Direct
Compensation ($) | | | Base
Salary
($) | | Target
STIP
Percent1 | | Target
STIP Value
($) | | Total
Target Cash
($) | | Target LTIP
Percent2 | | Target
LTIP Value
($) | | Total Direct
Compensation
($) | | John J. Legere (3) | | 2,000,000 | | | 200% | | | 4,000,000 | | | 6,000,000 | | | | — | | | 17,250,000 | | | 23,250,000 | | | J. Braxton Carter | | 900,000 | | | 150% | | | 1,350,000 | | | 2,250,000 | | | 250% | | | 5,625,000 | | | 7,875,000 | | | | G. Michael Sievert(4) | | 1,200,000 | | | 200% | | | 2,400,000 | | | 3,600,000 | | | | — | | | 10,350,000 | | | 13,950,000 | | | | 1,400,000 | | | | 250 | % | | | 3,500,000 | | | | 4,900,000 | | | | — | 3 | | | 13,500,000 | | | | 18,400,000 | | | Peter Osvaldik | | | | 750,000 | | | | 150 | % | | | 1,125,000 | | | | 1,875,000 | | | | 200 | % | | | 3,750,000 | | | | 5,625,000 | | | Neville R. Ray | | 900,000 | | | 200% | | | 1,800,000 | | | 2,700,000 | | | 250% | | | 6,750,000 | | | 9,450,000 | | | | 925,000 | | | | 200 | % | | | 1,850,000 | | | | 2,775,000 | | | | 250 | % | | | 6,937,500 | | | | 9,712,500 | | David R. Carey(5) | | 775,000 | | | 125% | | | 968,750 | | | 1,743,750 | | | | — | | | 4,359,375 | | | 6,103,125 | | | | David A. Miller | | | | 775,000 | | | | 150 | % | | | 1,162,500 | | | | 1,937,500 | | | | 200 | % | | | 3,875,000 | | | | 5,812,500 | | | Peter A. Ewens | | | | 725,000 | | | | 125 | % | | | 906,250 | | | | 1,631,250 | | | | 200 | % | | | 3,262,500 | | | | 4,893,750 | |
(1)1 | Target STIP Percent reflected as a percent of base salary. |
(2)2 | Target LTIP Percent reflected as a percent of total target cash. |
(3) | Target STIP value and LTIP value for Mr. Legere are as specified in his employment agreement.
|
(4)3 | Target LTIP value for Mr. Sievert as specified in his term sheet. |
(5) | Target LTIP value for Mr. Carey as specified in his term sheet.employment agreement.
|
| | | | | 28 | | T-Mobile 2019 Proxy Statement | | |
EXECUTIVE COMPENSATION
Annual Base SalariesANNUAL BASE SALARIES
Base salary is designed to provide a competitive fixed component of income. Base salaries for our Named Executive Officers are set by the Compensation Committee, with assistance from the Compensation Committee’s independent compensation consultant, after consideration of various factors including individual performance, executive experience and skill set, retention considerations, and market data. In particular, the Compensation Committee focuses on how base salary levels may impact the market competitiveness of an executive’s total compensation opportunity. See further discussion under “— Factors Considered in Determining Executive Compensation-Market Analysis” above. Effective April 29, 2018, to reward certain Named Executive Officers At the February 2020 Compensation Committee meeting, the Compensation Committee approved the following base salaries for their efforts in connection with the execution of the Business Combination Agreement, we increased Mr. Legere’s base salary from $1,666,667 to $2,000,000, Mr. Sievert’s base salary from $950,000 to $1,200,000, and Mr. Ray’s base salary from $850,000 to $900,000. See “— Employment Arrangements” below for additional details. 2020: | | | | | | | | | | | | Officer | | 2019 Base Salary
($) | | | 2020 Base Salary
($) | | | | | G. Michael Sievert | | | 1,200,000 | | | | 1,400,000 | | | | | John J. Legere | | | 2,000,000 | | | | 2,000,000 | | | | | Peter Osvaldik | | | 450,000 | | | | 525,000 | | | | | J. Braxton Carter | | | 950,000 | | | | 950,000 | | | | | Neville R. Ray | | | 900,000 | | | | 925,000 | | | | | David A. Miller | | | 700,000 | | | | 775,000 | | | | | Peter A. Ewens | | | 700,000 | | | | 725,000 | | | | | David R. Carey | | | 775,000 | | | | 775,000 | |
In connection with the entrance into an amendmentMr. Osvaldik’s appointment to the Carter Employment Agreement (as defined below)Chief Financial Officer on March 25, 2019,July 1, 2020, Mr. Carter’sOsvaldik’s base salary was increased from $900,000$525,000 to $950,000,$750,000, effective as of December 16, 2018.July 1, 2020. Annual Short-Term IncentivesEffective January 1, 2020, Mr. Sievert’s base salary automatically increased from $1,200,000 to $1,400,000 pursuant to his employment agreement with the Company, which was entered into in November 2019 (as amended, the “Sievert Employment Agreement”).
ANNUAL SHORT-TERM INCENTIVES Our executive officers are eligible for annual cash-based short-term incentivesincentive awards under the 2013 Omnibus Incentive Plan.Plan, as amended (the “2013 Plan”). The Compensation Committee sets the annual target value of each executive’s short-term incentive award opportunity as a percentage of the executive’s base salary. The final award is based on the applicable executive’s eligible base earnings for the performance period. AwardGenerally, award opportunities for each metric evaluated under the plan2013 Plan are established at threshold, target and maximum levels. The maximum level for each metric is capped at 200% of target, and as a result, the overall potential amount that could be earned is capped at 200% of target. The 2018 | | | 40 | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation Late in 2019, the Compensation Committee approved a design for the 2020 short-term incentive plan (the “2018“2020 STIP”) awards for executive officers, includingT-Mobile on a standalone basis with the Named Executive Officers, were based entirely on Company performance, which was measured by:same measures as the 2019 plan: Total Service Revenue, Branded Net Additions (Total Branded Customer Additions), Adjusted EBITDA, Operating Free Cash Flow, and Adjusted EBIT. Adjusted EBITDA, Operating Free Cash Flow and Adjusted EBIT arenon-GAAP measures and Operating Free Cash Flow is not provided in our earnings materials. Please seeAppendix A for more information on how these measures are calculated. 
Eligible Earnings Target Percentage Target STIP Opportunity Total Service Revenue (20%) Branded Net Adds (20%) Adjusted EBITDA (20%) Operating Free cash Flow (30%) Adjusted EBIT (10%) Corporate Performance Attainment Annual Incentive Amount
These measures (the relative weightings of which are set forth in the table below) were aligned with the operational objectives of the Company’s business. Attainment of the minimum threshold performance level (representing attainment of 25% of the target performance level) for at least one of the performance metrics was required in order for the executives to receive any payment under the 20182020 STIP. If none of the minimum performance thresholds had been achieved during 2018,2020, no awards would have been paid. | | | | | | | | | | | | | | | | | | | | | Metric | | Weight | | | Minimum
Performance (in millions) | | | Target
Performance (in millions) | | | Maximum
Performance (in millions) | | | Actual
Performance (in millions) | | Total Service Revenue | | | 20 | % | | $ | 30,223 | | | $ | 31,814 | | | $ | 32,609 | | | $ | 32,027 | | Branded Net Additions | | | 20 | % | | | 1.143 | | | | 2.858 | | | | 3.997 | | | | 4.919 | | Adjusted EBITDA | | | 20 | % | | $ | 10,411 | | | $ | 11,316 | | | $ | 11,969 | | | $ | 12,000 | | Operating Free Cash Flow | | | 30 | % | | $ | 4,015 | | | $ | 5,300 | | | $ | 5,814 | | | $ | 5,413 | | Adjusted EBIT | | | 10 | % | | $ | 4,714 | | | $ | 5,124 | | | $ | 5,397 | | | $ | 5,514 | |
The Company performed
| | | | | | | | | | | | | | | | | | | | | | Metric | | Weight | | | Threshold
Performance
(in millions) | | | Target
Performance
(in millions) | | | Maximum
Performance
(in millions) | | | | | | | Total Service Revenue | | | 20% | | | | $33,560 | | | | $35,326 | | | | $36,208 | | | | | | | Branded Net Additions | | | 20% | | | | 1.365 | | | | 3.412 | | | | 4.772 | | | | | | | Adjusted EBITDA | | | 20% | | | | $12,673 | | | | $13,775 | | | | $14,250 | | | | | | | Operating Free Cash Flow | | | 30% | | | | $ 5,622 | | | | $ 7,421 | | | | $ 8,140 | | | | | | | Adjusted EBIT | | | 10% | | | | $ 6,256 | | | | $ 6,800 | | | | $ 7,162 | |
When the Sprint Combination closed April 1, 2020, the Compensation Committee determined that the above target levels with respecttargets were no longer applicable under our combined financials going forward and it would have been difficult to all fivecalculate the extent to which the performance metrics in 2018. Overallgoals were attained by T-Mobile as a standalone company (without taking into account the Sprint Combination) through the date of the acquisition given the portion of the year completed as compared to full-year goals. In addition, we were navigating the Pandemic which made us rethink how to best serve our customers and protect our employees. In this challenging environment, we needed to incentivize our employees to focus on integrating our two companies, unlocking synergies and rapidly delivering a leading 5G network, recognizing that a significant effort would be required above and beyond business as usual. Focusing on our performance, underfollowing the 2018close of the Sprint Combination, the Compensation Committee approved payouts for the 2020 STIP determinedawards for executive officers, including the Named Executive Officers, based on actualthe average Company performance goal attainment for each performance metricshort-term incentive awards over the Company’s fiscal years 2017, 2018 and 2019 (after excluding the relative weightingimpact of each such metric (as disclosed incertain vendor financings and securitization arrangements from the table above), was achieved at 162% of target. The 2018 actual results do not include the impactscalculation of the new revenue standard, consistent2019 Company performance goal attainment), which was 160%. Locking the performance at a fixed percent for the entire performance period (a) eliminated the risk of prematurely setting metrics for the remainder of the fiscal year that could have resulted in mis-alignment to company interests and (b) closely aligned the payouts with the 2018historical STIP designpayouts, ensuring participants were not disincentivized versus prior year payouts when they were tasked with significant work above and targets. beyond business as usual. | | | ⬛ PROXY STATEMENT 2021 | | 41 |
Executive Compensation The following table shows the payouts under the 20182020 STIP for each Named Executive Officer, based on these performance results.determined by multiplying each Named Executive Officer’s target 2020 STIP by 160%. | | | | | | | | | | | | | | | | | | | | | Officer | | Base Earnings (1) ($) | | | Target 2018
STIP Percent
(as a % of Base
Earnings) | | | Target 2018
STIP Value ($) | | | Company
Attainment | | | Total 2018 STIP
Payout Value ($) | | John J. Legere (2) | | | 1,878,205 | | | | — | | | | 3,784,475 | | | | 162% | | | | 6,130,849 | | J. Braxton Carter | | | 898,077 | | | | 150.00% | | | | 1,347,115 | | | | 162% | | | | 2,182,327 | | G. Michael Sievert | | | 1,108,654 | | | | 200.00% | | | | 2,217,308 | | | | 162% | | | | 3,592,039 | | Neville R. Ray (3) | | | 879,808 | | | | 181.73% | | | | 1,598,874 | | | | 162% | | | | 2,590,177 | | David R. Carey | | | 774,038 | | | | 125.00% | | | | 967,548 | | | | 162% | | | | 1,567,428 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Officer | | Base
Earnings1
($) | | | Target 2020
STIP Percent
(as a % of Base
Salary) | | | Target 2020
STIP Value
($) | | | Company
Attainment | | | Total 2020
STIP
Payout Value
($) | | | | | | | | G. Michael Sievert2 | | | 1,400,000 | | | | 250% | | | | 3,500,000 | | | | 160% | | | | 5,600,000 | | | | | | | | John J. Legere | | | 498,630 | | | | 200% | | | | 997,260 | | | | 160% | | | | 1,595,616 | 4 | | | | | | | Peter Osvaldik3 | | | 627,115 | | | | 136% | | | | 854,946 | | | | 160% | | | | 1,367,913 | | | | | | | | J. Braxton Carter5 | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Neville R. Ray | | | 925,000 | | | | 200% | | | | 1,850,000 | | | | 160% | | | | 2,960,000 | | | | | | | | David A. Miller | | | 775,000 | | | | 150% | | | | 1,162,500 | | | | 160% | | | | 1,860,000 | | | | | | | | Peter A. Ewens | | | 725,000 | | | | 125% | | | | 906,250 | | | | 160% | | | | 1,450,000 | | | | | | | | David R. Carey | | | 220,219 | | | | 150% | | | | 330,328 | | | | 160% | | | | 528,525 | 4 |
(1)1 | Base earnings reflect annual salary paid from December 17, 2017 to December 15, 2018eligible earnings as reported byT-Mobile payrollpayroll. For Messrs. Legere and vary slightlyCarey, base earnings reflect earnings pro-rated from target 2018the beginning of the calendar year through the applicable termination date. Mr. Osvaldik’s base salaries.earnings reflect the increase to his base salary from $525,000 to $750,000, effective July 1, 2020. |
(2)2 | Pursuant to the Sievert Employment Agreement, Mr. Legere’s employment agreement provides thatSievert’s target STIP for 2020 was increased to 250% of his short-term incentive value will be targeted at not less than $3,784,475.base salary effective January 1, 2020. |
(3)3 | Mr. Ray’sOsvaldik’s target 2018 STIP percent reflects his SVP, Chief Accounting Officer short-term incentive target of 125% effective until July 1, 2020 and his EVP & Chief Financial Officer short-term incentive target of 150% for the remainder of the year. |
| 4 | The 2020 annual short-term incentive awards for Messrs. Legere and Carey were pro-rated based on the applicable executive’s length of employment with us during 2020 and were paid, and are reported in the 2020 Summary Compensation Table below, as part of their respective severance payments and benefits. For additional information, see “—Separation Payments and Benefits to Messrs. Legere, Carter and Carey” below. |
| 5 | Pursuant to the Carter Employment Agreement (as defined below), Mr. Carter was not eligible for an increase from 150% to 200% effective April 29, 2018.annual short-term incentive award in 2020. |
| | | | | | | T-Mobile 2019 Proxy Statement | | 29 |
EXECUTIVE COMPENSATION
Long-Term IncentivesLONG-TERM INCENTIVES
We grant our executive officers long-term incentive compensation in the form of PRSUs and RSUs under the 2013 Plan and the Sprint Corporation Amended and Restated 2015 Omnibus Incentive Plan.Plan (the “2015 Plan”) that we assumed upon the closing of the Sprint Combination, as discussed below under “— Equity Compensation Plan Information.” PRSUs granted in 2020 are measured based on our relative total shareholder return (“RTSR”) over a three-year performance period. We believe it is an appropriate performance measure because RTSR inherently reflects relevant financial and operational results as share price is a reflection of our current and expected future performance and directly links a significant portion of executive officer compensation to stockholder value creation. Long-Term Incentive Awards Granted in 2018LONG-TERM INCENTIVE AWARDS GRANTED IN 2020
On February 15, 2018,2020, we granted annual long-term incentive awards to theour Named Executive Officers. With the exception of Mr.Officers (other than Messrs. Legere, theCarter and Carey, who were not eligible to receive 2020 long-term incentive awards pursuant to their respective employment agreements or term sheets with us). Each such Named Executive OfficersOfficer received half of the aggregate value of their 20182020 long-term incentive awards in the form of PRSUs and half of such value in the form of RSUs. We believe this mix emphasizes long-term Company performance as well as the retention and engagement of the Named Executive Officers. To further align Mr. Legere’s compensation with stockholder value creation, Mr. Legere’s 2018 annual long-term incentive award had a greater emphasis on PRSUs, with approximately 3/4 of the award consisting of PRSUs (excluding his Transaction PRSUs, as defined and described below) and roughly 1/4 consisting of RSUs. In addition to their annual awards, each of Messrs. Legere, Sievert, Ray and CareyOsvaldik were granted special long-term incentive awards, as discussed below under “—Special Equity Awards in 2018.2020.” RSU awards for 20182020 generally vest annually in three equal tranches beginning February 2019,2021, subject to the Named Executive Officer’s continued service through the applicable vesting date. The annual PRSU awards for 20182020 generally cliff vest at the conclusion of the three-year performance period ending on the third anniversary of the grant date, subject to the Named Executive Officer’s continued service through the vesting date and based on the level of RTSR attained during the performance period.period as certified by the Section 16 Subcommittee of the Compensation Committee. | | | 42 | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation PRSU achievement can range from 0% to 200% of target based on relative performance against our peer group, and payouts are determined by multiplying the target number of PRSUs by an adjustment percentage based on the RTSR percentile performance of the Company, as set forth in the following table. No payout will be made if performance is attained below the 25th percentile. 
2018-2021 PRSU award relative total shareholder return design RTSR percentile ranking adjustment percentage 1 Below 25th percentile o% 25th percentile 25% 50th percentile 100% 75th percentile 125% 100th percentile 200% 1 company total shareholder return for the performance period must be positive in order for the adjustment percentage to be greater than 100% PRSU adjustment Percentage 0 25 50 75 100 125 150 175 200 Poor Performance < 25th percentile No payout y=0 25th to 49th percentile y=3x-50 50th to 75th percentile slope (1:1) y=x+50 High performance 76th to 100th percentile y=3x-100 0 25 50 75 100 Relative TSR percentile Result Relative position at the conclusion of the performance period calculated as percentile rank based on linear interpolation beginning price means the average of the closing prices of the applicable stock for the 30 days prior to the start of the performance period Ending price means the average of the closing prices of the applicable stock for the last 30 days of the performance period total shareholder return for a given company means: [(ending price beginning price) + Dividends] divided by [Beginning price] (applicable dividend inclusion based on ex-dividend date; dividends re-invested for TSR calculation)
RTSR for the 20182020 PRSU awards is generally measured against the following peer group, consisting of 1412 companies: AT&T, CenturyLink, Charter Communications, Cisco Systems, Comcast, Dish Network, Frontier Communications, Intel, Liberty Global, Lumen Technologies (formerly known as CenturyLink), Microsoft, Motorola Solutions, Qualcomm Sprint and Verizon Communications. Under the terms of the award, if one or more members of the peer group cease to be a publicly traded entity during the performance period, then that company will be removed from the peer group; however, unless otherwise determined by our Compensation Committee, any member of the peer group that ceases to be a publicly traded entity during the performance period due to bankruptcy or insolvency (as determined by the Compensation Committee) will not be removed from the peer group. In such an event, noNo additional companies will be added to the peer group for purposes of determining any earned PRSU awards. | | | | | 30 | | T-Mobile 2019 Proxy Statement | | |
EXECUTIVE COMPENSATION
The total 20182020 target long-term incentive grant value and the number of annual PRSUs and RSUs awarded are shown below for each Named Executive Officer.Officer other than Messrs. Legere, Carter and Carey who were not eligible to receive 2020 long-term incentive awards pursuant to their respective employment agreements or term sheets with us. The number of annual PRSUs and RSUs awarded was established as the total grant-date target value multiplied by the award mix and divided by the average closing price of our common stock for the 30calendar-day period ending five business days prior to the grant date. | | | | | | | | | | | | | Officer | | Total 2018 Grant
Target Value (1)
($) | | | Target Number of PRSUs (#) | | | Number of
RSUs
(#) | | | Grant Date | | | Total 2020 Grant Target Value ($) | | | Target
PRSU/RSU Award
Mix | | | Target Number of
Performance-Based
RSUs
(#) | | | Number of
Time-Based
RSUs
(#) | | John J. Legere | | | 15,000,000 | | | | 173,283 | | | | 63,012 | | | J. Braxton Carter | | | 5,625,000 | | | | 44,306 | | | | 44,306 | | | | G. Michael Sievert | | | 7,125,000 | | | | 56,121 | | | | 56,121 | | | | 2/15/2020 | | | | 13,500,000 | | | | 50% PRSU, 50% RSU | | | | 82,843 | | | | 82,843 | | | Peter Osvaldik | | | | 2/15/2020 | | | | 1,771,875 | | | | 50% PRSU, 50% RSU | | | | 10,874 | | | | 10,874 | | | Neville R. Ray | | | 5,312,500 | | | | 41,844 | | | | 41,844 | | | | 2/15/2020 | | | | 6,937,500 | | | | 50% PRSU, 50% RSU | | | | 42,572 | | | | 42,572 | | David R. Carey | | | 4,359,375 | | | | 34,337 | | | | 34,337 | | | | David A. Miller | | | | 2/15/2020 | | | | 3,875,000 | | | | 50% PRSU, 50% RSU | | | | 23,779 | | | | 23,779 | | | Peter A. Ewens | | | | 2/15/2020 | | | | 3,262,500 | | | | 50% PRSU, 50% RSU | | | | 20,021 | | | | 20,021 | |
SPECIAL EQUITY AWARDS IN 2020 (1) | Named Executive Officers received half of the aggregate target value of their long-term incentive awards in the form of PRSUs and half of such value in the form of RSUs, except for Mr. Legere who received approximately 3/4 of his target award in the form of PRSUs.
|
In connection withPursuant to the execution of the Business CombinationSievert Employment Agreement, effective as ofin April 29, 2018 (and commencing with annual awards granted in calendar year 2019), we increased certain Named Executive Officers’ target annual long-term incentive grant values as follows: Mr. Legere: $17,250,000; Mr. Sievert: $10,350,000. See “—Employment Arrangements” below for additional details.
Special Equity Awards in 2018
In February 2018, to stabilize our senior leadership team and to incentivize continued high performance during a period of significant organizational uncertainty related to potential M&A activity,2020, the Company granted Mr. Sievert a one-time special PRSUsPRSU award with a target value equalof $20,000,000 (the “Sievert Special PRSUs”) in connection with his promotion to $3,000,000 to Messrs. Ray and Carey. TheseCEO. The Sievert Special PRSUs are generally subject to the same vesting schedule and other terms and conditions (including vesting conditions and performance conditions) applicable to the annual awards of PRSUs granted to the Named Executive Officers on February 15, 20182020 (see “—Long-Term Incentive Awards Granted in 2018”2020” above
| | | ⬛ PROXY STATEMENT 2021 | | 43 |
Executive Compensation for additional information), except that in order to further alignfor more than 100% of the executives with stockholder value creation, the “threshold” level of attainment was increased such that no payout will be made if performance is attained below the 50th percentile (rather than the 25th percentile). Thetarget number of specialSievert Special PRSUs awarded to Messrs. Rayvest, there must be at least a twenty percent (20%) increase in the Company’s stock price over the period beginning on April 1, 2020, the date on which Mr. Sievert became our Chief Executive Officer (with the stock price on such date deemed to equal the average closing price of T-Mobile’s stock over the period commencing November 18, 2019 and Carey is shown below.ending April 1, 2020), and ending on the vesting date. | | | | | | | | | | | | | Officer | | Grant
Date | | | Total Grant
Target Value
($) | | | Target Number of PRSUs (#) | | Neville R. Ray | | | 2/15/2018 | | | | 3,000,000 | | | | 47,259 | | David R. Carey | | | 2/15/2018 | | | | 3,000,000 | | | | 47,259 | |
In April 2018,conjunction with his appointment to Chief Financial Officer, in connection withJuly 2020, the execution of the Business Combination Agreement and given the immense regulatory and advocacy work associatedCompany granted Mr. Osvaldik a one-time PRSU award with a mergertarget value of this size and in this industry and related business planning activities, all while continuing to deliver business results$1,000,000 (the “Osvaldik Special PRSUs”) to ensure alignment with stockholders during a critical period of potential value creation, the Compensation Committee, following discussion with its independent compensation consultant and management, approved special awards ofmarket competitive pay relative to similarly situated CFOs at peer companies. The Osvaldik Special PRSUs (the “Transaction PRSUs”) to Messrs. Legere, Sievert, Ray and Carey, which vest based onT-Mobile’s total shareholder return during the applicable performance period. The mechanics of RTSR make certain that any eventual value at vest aligns with the relative value provided to stockholders. The details of these Transaction PRSUs are outlined below. The Transaction PRSUs are generally subject to the same terms and conditions as(including vesting conditions and performance conditions) applicable to the annual awards of PRSUs granted to the Named Executive Officers on February 15, 20182020 (see “—Long-Term Incentive Awards Granted in 2018”2020” above for additional information), except that (i). In order to incentivize Mr. Ray for his network integration efforts associated with the closing of the Sprint Combination, in April 2020, the Company granted Mr. Legere, 50%Ray a one-time PRSU award with a target value of his Transaction$15,000,000 (the “Ray Special PRSUs”). Five-sixths of the Ray Special PRSUs (the “Network Synergy PRSUs”) will generally cliff vest uponon the earlierthird anniversary of the closing of the Sprint Combination or April 30, 2020,based on the Company’s annualized total network synergy exit run rate relative to certain targets determined by the Compensation Committee, subject to Mr. Ray’s continued employment through the vesting date, and provided that the remaining 50%number of his Transactionsuch earned PRSUs will be reduced by 25% if such goals are not attained within the Company’s annualized capital expenditure budget over the applicable performance period. The number of Network Synergy PRSUs that vest can range from 0% to 200% of target based on April 30, 2020, (ii) for Mr. Carey, 50%performance (with 200% vesting upon attainment of his Transactionmaximum performance, 100% vesting upon attainment of target performance, and 25% vesting upon attainment of threshold performance). No payout will be made if performance is below threshold level. The remaining one-sixth of the Ray Special PRSUs will vest upongenerally cliff-vest on the earlierfourth anniversary of the closing of the Sprint Combination or April 29, 2020,if the Company receives Federal Communications Commission (“FCC”) certification with respect to all FCC product testing completed during the three-year performance period commencing on the closing date of the Sprint Combination and the remaining 50%FCC does not assess any material voluntary contributions against the Company during the four-year performance period commencing on the closing date of his Transaction PRSUs will vest on April 29, 2020, and (iii) for Messrs. Sievert and Ray, 50% of their Transaction PRSUs will vest upon the earlierSprint Combination, subject to Mr. Ray’s continued employment through the third anniversary of the closing of the Sprint Combination or April 29, 2021,Combination. The annual RSUs and the remaining 50% of their Transaction PRSUs will vest on April 29, 2021, subject, in each case, to the applicable Named Executive Officer’s continued employment through the applicable vesting date (except as otherwise provided in the applicable employment arrangement and/or award agreement). The total target grant values and the number of Transaction PRSUs awarded to each Named Executive Officer is shown below. | | | | | | | T-Mobile 2019 Proxy Statement | | 31 |
EXECUTIVE COMPENSATION
If the Sprint Combination fails to close, 100% of the Transaction PRSUs will vest on the second vesting date. The delay in vesting, coupled with the actual value at vest of the Transaction PRSUs being entirely dependent on our RTSR, ensures recipients will be incented to refocus at that time and maximize shareholder value creation within the context of the resulting stand-alone Company.
| | | | | | | | | | | | | Officer | | Grant
Date | | | Total Grant Target Value
($) | | | Target Number of PRSUs (#) | | John J. Legere | | | 4/29/2018 | | | | 37,000,000 | | | | 598,029 | | G. Michael Sievert | | | 4/29/2018 | | | | 20,000,000 | | | | 323,259 | | Neville R. Ray | | | 4/29/2018 | | | | 12,187,500 | | | | 196,986 | | David R. Carey | | | 4/29/2018 | | | | 5,719,000 | | | | 92,436 | |
The annual and special RSUs and PRSUs granted during 20182020 are subject to accelerated vesting in certain circumstances as described below under
“— “— Potential Payments upon Termination or in Connection with a Change in Control”.
Performance-Based Long-Term Incentive Awards Vested in 2018PERFORMANCE-BASED LONG-TERM INCENTIVE AWARDS VESTED IN 2020
The annual PRSUs granted to each of the Named Executive Officers in 20152017 had a three-year performance period that ended on February 25, 2018.2020. Based on the Company’s RTSR at the end of the performance period, an adjustment percentage106% of 179%the target award was earned for each Named Executive Officer. The number of 20152017 PRSUs earned and paid in 2020 is set forth in the table below. | | | | | | | | | | | | | | | | | Officer | | Target 2017 PRSUs ($) | | | RTSR Adjustment Percentage (%) | | | Earned PRSUs (#) | | | | | | G. Michael Sievert | | | 57,899 | | | | 106% | | | | 61,372 | | | | | | John J. Legere | | | 178,775 | | | | 106% | | | | 189,501 | | | | | | Peter Osvaldik | | | 7,111 | | | | 106% | | | | 7,537 | | | | | | Neville R. Ray | | | 40,631 | | | | 106% | | | | 43,068 | | | | | | David A. Miller | | | 14,628 | | | | 106% | | | | 15,505 | | | | | | Peter A. Ewens | | | 21,128 | | | | 106% | | | | 22,395 | | | | | | David R. Carey | | | 30,854 | | | | 106% | | | | 32,705 | |
| | | 44 | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation In addition to the 2017 annual PRSUs that vested in 2020, 50% of the special PRSU awards granted to the Named Executive Officers in 2018 in connection with the Company’s entrance into the Business Combination Agreement (the “Transaction PRSUs”) vested upon the closing of the Sprint Combination and were earned with an adjustment percentage of 146% on April 1, 2020. The number of Transaction PRSUs earned by each Named Executive Officer and paid in 20182020 is set forth in the table below. | | | | | | | | | | | | | | Officer | | Target 2015 PRSUs ($) | | | RTSR Adjustment Percentage (%) | | | Earned
PRSUs
(#) | | | Target 2018 PRSUs ($) | | | RTSR Adjustment Percentage (%) | | | Earned PRSUs (#) | | John J. Legere | | | 260,163 | | | | 179% | | | | 465,691 | | | J. Braxton Carter | | | 56,911 | | | | 179% | | | | 101,870 | | | | G. Michael Sievert | | | 65,041 | | | | 179% | | | | 116,423 | | | | 161,629 | | | | 146% | | | | 235,978 | | | Neville R. Ray | | | 39,025 | | | | 179% | | | | 69,854 | | | | 98,493 | | | | 146% | | | | 143,799 | | | David A. Miller | | | | 26,669 | | | | 146% | | | | 38,936 | | | Peter A. Ewens | | | | 26,669 | | | | 146% | | | | 38,936 | | | David R. Carey | | | 36,098 | | | | 179% | | | | 64,615 | | | | 46,218 | | | | 146% | | | | 67,478 | |
One-half of Mr. Legere’s Transaction PRSUs vested on March 31, 2020 in connection with his termination with the Company. 146% of the target PRSUs were earned, earning 436,561 shares. Additionally, in connection with their termination of employment with us in 2020, each of Messrs. Legere and Carey became entitled to accelerated vesting of certain of their equity awards as described below under “—Separation Payments and Benefits to Messrs. Legere, Carter and Carey”. COMPENSATION PAID TO FORMER EXECUTIVES As noted previously, following a multi-year, comprehensive leadership succession planning process, effective as of April 1, 2020 (the date on which the Sprint Combination closed), Mr. Legere ceased to serve as our Chief Executive Officer. After a short transition period, Mr. Legere stepped down from the Board on April 24, 2020. In connection with Mr. Legere’s termination of employment with the Company, he became eligible for certain severance payments and benefits as described below in “—Separation Payment and Benefits to Messrs. Legere, Carter, and Carey”. In conjunction with the Sprint Combination, the Company extended its employment arrangement with Mr. Carter through July 1, 2020. In addition to the compensation Mr. Carter earned while an employee, the Compensation Committee entered into a consulting agreement with Mr. Carter. In approving the additional benefits, the Compensation Committee considered a range of factors, including (i) the critical role Mr. Carter played in negotiating, financing and implementing the Sprint Combination, (ii) his contributions to the growth of PerquisitesT-Mobile over the past 7 years and the implementation of the CFO succession and (iii) Mr. Carter’s agreement to, among other things, waive any claims against us and refrain from competing against us for 18 months following termination. Mr. Carey served as our Executive Vice President, Corporate Services until April 13, 2020. In addition to the compensation Mr. Carey earned while an employee, the Compensation Committee entered into a consulting agreement with Mr. Carey. The Company entered into the above-mentioned compensation arrangements with the former executives to incentivize a high level of execution in setting up the Company for successful integration and continued long-term success. The T-Mobile stock price increased 58.4% from April 1, 2020 (the date on which the Sprint Combination closed) through December 31, 2020, providing stockholder returns above the S&P 500 and the telecommunications industry to our stockholders. PERQUISITES We generally do not provide perquisites to any executive officer, including the Named Executive Officers, beyond what all other employees may be eligible to receive. In 2018,2020, we provided personal security for Mr. LegereSievert due to the range of security issues encountered by chief executive officersChief Executive Officers of large public companies, particularly with respect to high-profile chief executive officersChief Executive Officers such as Mr. Legere.Sievert. For fiscal year 2018,2020, we paid approximately $16,000$103,068 toward Mr. Legere’sSievert’s personal security. Included in the amount are costs relating to a new assessment to help determine overall security needs for the Company’s executives, including the CEO. We also reimbursed Mr. Legere for legal fees and expenses (capped at $25,000)$50,000 as approved by the Compensation Committee) incurred in connection with the negotiation of and preparation of an amendment to his employment agreement. In 2018,for the Company also permitted the spouses of executive officers, including the Named Executive Officers, to attend one Board meeting and paid for certain incremental costs (excluding travel costs) associated with such attendance.CEO transition which occurred on April 1, 2020. Comprehensive Benefits PackageCOMPREHENSIVE BENEFITS PACKAGE
We provide a competitive benefits package to all full-time employees, including the Named Executive Officers, that includes health and welfare benefits, such as medical, dental, vision care, disability insurance, life insurance benefits and a 401(k) savings plan (with an employer match up to 4%). We provide anon-qualified deferred compensation plan under which eligible participants may defer up to 75% of their base salary and 100% of their annual short-term incentive and annual RSUs. We do not provide any employer matching or discretionary allocations under thenon-qualified deferred compensation plan. | | | ⬛ PROXY STATEMENT 2021 | | 45 |
Executive Compensation SEVERANCE AND Severance andChange-in-ControlCHANGE-IN-CONTROL BenefitsBENEFITS We provide severance pay and other termination benefits to eligible executive officers, including the Named Executive Officers, whose employment is terminated, including due to corporate restructuring, and, in some cases, due to involuntary termination by us without cause, due to ournon-renewal of the executive’s employment term, due to the executive’s retirement or due to the voluntary termination by the executive for good reason. We entered into Severance Letter Agreements with Messrs. Carter, Carey and Ray and certain otherbelieve that these severance benefits provide our executive officers, and a Retirement Letterincluding our Named Executive Officers, with Mr. Carey (the “Carey Retirement Letter”) to provide security of transition income and benefit replacement, that allowthus allowing such executivesexecutive officers to focus on our prospective business priorities that create value for stockholders. We believe the level of severance and termination benefits provided by these arrangements is consistent with the practices of our peer group and is necessary to attract and retain key employees. These benefits are provided pursuant to our Severance Guidelines, Executive Continuity Plan, the 2013 Omnibus Incentive Plan, long-term incentive award agreements and, foras well as written employment agreements, term sheets and/or letter agreements, as applicable, that we have entered into with each of Messrs. Legere, Sievert, Carey and Carter, pursuant to a written employment agreement, term sheet and/or letter agreement, as applicable. The adoption of the Carey Retirement Letter recognizes his contributions to the Company.our Named Executive Officers. These arrangements do not include any gross up for excise taxes imposed as a result of severance or other payments that are deemed made in connection with a change in control. The potential payments and benefits available under these arrangements are discussed further under “—Potential Payments upon Termination or in Connection with a Change in Control.” | | | | | 32 | | T-Mobile 2019 Proxy Statement | | |
EXECUTIVE COMPENSATION
Other Matters Tax and Accounting ConsiderationsTAX AND ACCOUNTING CONSIDERATIONS
Section 162(m) of the Code. The Internal Revenue Code (the “Code”) Section 162(m) generally disallows an income tax deduction to public companies for annual compensation in excess of $1 million paid to the chief executive officer and other “covered employees.” For taxable years beginning on or before December 31, 2017, this deduction limit included an exception for “qualified performance-based compensation”. The recently-enacted Tax Cuts and Jobs Act of 2017 (the “Tax Act”) amended certain provisions of Code Section 162(m), including eliminating the exemption for “qualified performance-based compensation” for tax years beginning after December 31, 2017. The Tax Act includes a grandfather provision, pursuant to which compensation that is provided pursuant to a written binding contract in effect on November 2, 2017, and which has not been modified in any material respect on or after that date, will not be subject to the amendments made to Code Section 162(m) by the Tax Act. We believe that maintaining the discretion to evaluate the performance of our executive officers through the use of performance-based compensation is an important part of our responsibilities and benefits our stockholders, even if it may benon-deductible under Code Section 162(m). The Compensation Committee has historically considered the potential impact of Code Section 162(m) as well as other tax and accounting consequences when developing and implementing the Company’s executive compensation programs. However, the Compensation Committee retains the discretion and flexibility to design and administer compensation programs that are in the best interests of the Company and its stockholders, and, in light of the repeal of the performance-based compensation exception to Code Section 162(m), the Compensation Committee may in the future approve compensation that would not have qualified as performance-based compensation under Code Section 162(m) as in effect prior to the Tax Act. Section 280G of the Code. Code Section 280G disallows a tax deduction with respect to excess parachute payments to certain executives of companies which undergo a change in control. In addition, Code Section 4999 imposes a 20% excise tax on the individual with respect to the excess parachute payment. Parachute payments are compensation linked to or triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans including stock options and other equity-based compensation. Excess parachute payments are parachute payments that exceed a threshold determined under Code Section 280G based on the executive’s prior compensation. As discussed above, we do not provide taxgross-ups on income attributable to severance or other payments that are deemed made in connection with a change in control and other executive arrangements.control. Section 409A of the Code. Code Section 409A requires that “nonqualified deferred compensation” be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, timing of payments and certain other matters. Failure to satisfy these requirements can expose employees and directors to accelerated income tax liabilities, substantial additional taxes and interest on their vested compensation under such plans. Accordingly, as a general matter, it is our intention to design and administer our compensation and benefit plans and arrangements for all of our employees and directors, including our Named Executive Officers, so that they are either exempt from, or satisfy the requirements of, Code Section 409A. Accounting for Stock-Based Compensation. We follow Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC Topic 718, for stock-based compensation awards. ASC Topic 718 requires companies to calculate the grant date “fair value” of their stock-based awards using a variety of assumptions. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based awards in their income statements over the period that an employee is required to render service in exchange for the award. Grants of performance-based RSUs, time-basedPRSUs, RSUs and other equity-based awards under equity incentive award plans have been and will be accounted for under ASC Topic 718. We expect that we will regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity | | | 46 | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation awards with our overall executive compensation philosophy and objectives. For further information on our accounting for our stock-based compensation awards, refer to our Annual Report on Form10-K for the year ended December 31, 2018.2020. Securities Trading PolicySECURITIES TRADING POLICY
Our policy on securities trading prohibits our directors, officers and designated employees from trading in our securities during certain quarterly and event-specific blackout periods. The policy prohibits our directors, officers and designated blackout periods and otherwise while they are aware of materialnon-public information, andemployees from engaging in hedging transactions or short sales and trading in options with respect to our securities (including puts, calls and other derivative securities) on an exchange or in any other organized market, or otherwise engaging in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities. The policy also prohibits short sales of our securities, holding our securities in a margin account or pledging our securities as collateral for a loan. Mr. Claure, one of our directors, holds 2,034,791 shares of our common stock that are pledged to secure a line of credit with an unrelated third-party bank. This pledge pre-dated the Sprint Combination, and Mr. Claure has committed to unwind the pledge by December 31, 2024. Clawback ProvisionsCLAWBACK PROVISIONS
In 2014, the Compensation Committee adopted a policy of recoupment of compensation in certain circumstances. The policy provides that in the event the Company issues a restatement of its financial statements due to its material noncompliance with financial reporting requirements under U.S. securities laws, the Company will, to the extent permitted by governing law, require reimbursement from current and former executive officers for excess incentive compensation received at any time during the three-year period preceding the date on which the Company is required to prepare the accounting restatement if a lower payment would have occurred based on the restated results, regardless of whether the executive officer engaged in misconduct or otherwise caused or contributed to the requirement for the restatement. The policy is administered by the Section 16 Subcommittee, which has the sole discretion to seek recovery from an executive officer and may consider whether seeking recovery would be in the best interests of the Company, including the costs and benefits of seeking recovery and whether doing so may prejudice the interests of the Company, including in any related proceeding or investigation. All awards granted under the 2013 Omnibus Incentive PlanPlans are subject to the requirements of Section 954 of the Dodd-Frank Act regarding the recovery of erroneously awarded compensation as well as any implementing rules and regulations under the Dodd-Frank Act, any policies adopted by the Company to implement such requirement, and any other compensation recovery policies that may be adopted from time to time by the Company. | | | | | | | T-Mobile 2019 Proxy Statement | | 33 |
EXECUTIVE COMPENSATIONSTOCK OWNERSHIP GUIDELINES AND BROAD-BASED STOCK OWNERSHIP
Stock Ownership Guidelines and Broad-Based Stock Ownership
Under our stock ownership guidelines, the Chief Executive Officer and all executive officers reporting to the Chief Executive Officer are expected to acquire and maintain ownership of shares of common stock equal in value to a specified multiple of the executive officer’s base salary measured as of the laterSeptember 30th of (i) the date we adopted the stock ownership guidelines (May 1, 2013) and (ii) the date on which he or she became an executive officer.each year. | | | | | | | Position | | Ownership Requirement | | | | Chief Executive Officer | | | 5x base salary | | | | Executive Officers reporting to the CEO | | | 3x base salary | |
Each executive officer is expected to meet the ownership guidelines within the later of (i) five years from the date we adopted the guidelines and (ii) the date on which he or she became an executive officer, and is expected to retain at least 50% of the net shares of common stock acquired through our equity awardscompensation plans until the ownership thresholds are met. | ∎ As of December 31, 2018,As of December 31, 2020, our Chief Executive Officer and each of the executive officers reporting to the Chief Executive Officer and each of the other Named Executive Officers who were then employed by us were in compliance with our stock ownership guidelines.
| | | | | | | WE BELIEVE THAT ALL EMPLOYEES SHOULD HAVE A STAKE IN THE COMPANY’S PERFORMANCE. ACCORDINGLY, WE UTILIZE A COMPANY-WIDE ANNUAL EQUITY AWARD PROGRAM. | | |
We believe that all employees should have a stake in the Company’s performance. Accordingly, we utilize a Company-wide annual equity award program. In addition, we implemented an Employee Stock Purchase Plan (“ESPP”) in 2015 to provide employees with a cost-effective vehicle to purchase stock.
Equity Granting PracticesEQUITY GRANTING PRACTICES
The Compensation Committee has adopted an equity grant policy pursuant to which the Compensation Committee (or a subcommittee)the Section 16 Subcommittee) may approve annual grants to executive officers and other members of the executive leadership team at a specified time each year. In addition to the annual grants, equity awards may be granted on a quarterly basis to new hires. We may also grant supplemental equity awards from time to time to retain high-performing leaders, reward exceptional performance or recognize expanded responsibility. The Compensation Committee has delegated authority to the Company’s SVP, Total Rewards & Employee Experience or, for awards granted after April 1, 2020, the Company’s Executive Vice President and Chief Human Resources Officer, subject to certain terms and limitations as established by the Compensation Committee, to grant awards to employees who are not Section 16 officers. Results of Stockholder Advisory Approval of Named
| | | ⬛ PROXY STATEMENT 2021 | | 47 |
Executive Officer Compensation RESULTS OF STOCKHOLDER ADVISORY APPROVAL OF NAMED EXECUTIVE OFFICER COMPENSATION At the 20172020 Annual Meeting of Stockholders, stockholders were asked to approve, on an advisory basis, the Named Executive Officer compensation for 20162019 as reported in the proxy statement. Thissay-on-pay proposal was approved by over 99%approximately 82% of the shares present and entitled to vote, and the Compensation Committee believes this affirms our stockholders’ strong support of our executive compensation program. Generally, the feedback from proxy advisors that did not support our 2019 say-on-pay proposal was related to Mr. Carter’s compensation and certain one-time long-term incentive awards granted to him in order to encourage his continued retention as our Chief Financial Officer through July 1, 2020. As these awards represented a singular compensation event to ensure leadership continuity for our Company, rather than an ongoing aspect of our executive compensation program, our Compensation Committee did not believe that significant changes to the Company’s executive compensation program were warranted. Accordingly, while the Compensation Committee considered the results of the 20172020 advisory vote along with stockholder input and other factors discussed in this CD&A,Compensation Discussion and Analysis, it concluded that no changes to our compensation policies and practices were warranted in response to the stockholder advisory vote.vote and has continued to refine our executive compensation program for 2020 and 2021, as a demonstration of its attention to corporate governance and its emphasis on the link between pay and performance. The Board has previously determined to hold advisorysay-on-pay votes every three years. Accordingly, the next advisorysay-on-pay stockholder vote will occur in connection with the 20202023 Annual Meeting of Stockholders. COMPENSATION COMMITTEE REPORTCompensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with Company management. Based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement and incorporated by reference into the 2018 Form10-K.10-K for the year ended December 31, 2020. The Compensation Committee:Committee1: Kelvin R. Westbrook, Chair Marcelo Claure Christian P. Illek Lawrence H. Guffey
Raphael Kübler Olaf SwanteeMichael Wilkens
| 1 | Mr. Claure became a member of the Compensation Committee on April 1, 2020, the closing date of the Sprint Combination. Mr. Wilkens became a member of the Compensation Committee on February 11, 2021. The composition of the Compensation Committee as set forth here is as of March 22, 2021, the date on which the Compensation Committee approved the Compensation Disclosure and Analysis. |
| | | | | 3448 | | T-Mobile 2019 Proxy Statement | | PROXY STATEMENT 2021 ⬛ |
EXECUTIVE COMPENSATIONExecutive Compensation
EXECUTIVE COMPENSATION TABLESExecutive Compensation Tables
2018 Summary Compensation Table2020 SUMMARY COMPENSATION TABLE
The following table sets forth certain information with respect to compensation for the years ended December 31, 2018, 20172020, 2019 and 20162018 earned by or paid to our Named Executive Officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary ($) | | | Bonus
($) | | | Stock
Awards (1)
($) | | | Option
Awards
($) | | | Non-Equity
Incentive Plan
Compensation (2)
($) | | | All Other
Compensation (3)
($) | | | Total ($) | | John J. Legere | | | 2018 | | | | 1,878,205 | | | | — | | | | 58,494,969 | | | | — | | | | 6,130,849 | | | | 34,183 | | | | 66,538,207 | | Chief Executive Officer | | | 2017 | | | | 1,618,590 | | | | — | | | | 16,278,923 | | | | — | | | | 5,666,666 | | | | 67,027 | | | | 23,631,206 | | | | | 2016 | | | | 1,500,000 | | | | — | | | | 12,898,115 | | | | — | | | | 5,610,000 | | | | 51,800 | | | | 20,059,915 | | J. Braxton Carter | | | 2018 | | | | 898,077 | | | | — | | | | 5,374,318 | | | | — | | | | 2,182,327 | | | | 11,803 | | | | 8,466,524 | | Executive Vice President and Chief Financial Officer | | | 2017 | | | | 845,192 | | | | — | | | | 8,128,113 | | | | — | | | | 2,155,241 | | | | 28,192 | | | | 11,156,737 | | | | | 2016 | | | | 724,135 | | | | — | | | | 4,339,167 | | | | — | | | | 1,692,665 | | | | 10,600 | | | | 6,766,567 | | G. Michael Sievert | | | 2018 | | | | 1,108,654 | | | | — | | | | 30,937,145 | | | | — | | | | 3,592,039 | | | | 11,534 | | | | 35,649,372 | | President and Chief Operating Officer | | | 2017 | | | | 944,231 | | | | — | | | | 14,699,399 | | | | — | | | | 3,210,384 | | | | 36,729 | | | | 18,890,743 | | | | | 2016 | | | | 800,000 | | | | — | | | | 5,320,028 | | | | — | | | | 2,244,000 | | | | 10,600 | | | | 8,374,628 | | Neville R. Ray | | | 2018 | | | | 879,808 | | | | — | | | | 22,293,403 | | | | — | | | | 2,590,177 | | | | 11,511 | | | | 25,774,898 | | Executive Vice President and Chief Technology Officer | | | 2017 | | | | 796,154 | | | | — | | | | 5,222,303 | | | | — | | | | 2,030,192 | | | | 11,468 | | | | 8,060,117 | | | | | 2016 | | | | 696,539 | | | | — | | | | 4,189,514 | | | | — | | | | 1,628,159 | | | | 10,600 | | | | 6,524,811 | | David R. Carey | | | 2018 | | | | 774,038 | | | | — | | | | 13,501,485 | | | | — | | | | 1,567,428 | | | | 11,025 | | | | 15,853,977 | | Executive Vice President, Corporate Services | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary1
($) | | | Bonus2
($) | | | Stock
Awards3
($) | | | Option
Awards
($) | | | Non-Equity
Incentive
Compensation4
($) | | | All Other
Compensation5
($) | | | Total ($) | | | | | | | | | | | G. Michael Sievert | | | 2020 | | | | 1,446,154 | | | | 3,500,000 | | | | 44,253,227 | | | | — | | | | 5,600,000 | | | | 114,634 | | | | 54,914,014 | | President & CEO | | | 2019 | | | | 1,200,000 | | | | — | | | | 11,532,431 | | | | — | | | | 3,576,000 | | | | 61,273 | | | | 16,369,704 | | | | | 2018 | | | | 1,108,654 | | | | — | | | | 30,937,145 | | | | — | | | | 3,592,039 | | | | 11,534 | | | | 35,649,372 | | | | | | | | | | | John J. Legere | | | 2020 | | | | 600,000 | | | | — | | | | — | | | | — | | | | — | | | | 136,595,887 | | | | 137,195,887 | | Former Chief Executive Officer | | | 2019 | | | | 2,000,000 | | | | — | | | | 19,652,001 | | | | — | | | | 5,960,000 | | | | 144,689 | | | | 27,756,690 | | | | | 2018 | | | | 1,878,205 | | | | — | | | | 58,494,969 | | | | — | | | | 6,130,849 | | | | 34,183 | | | | 66,538,207 | | | | | | | | | | | Peter Osvaldik | | | 2020 | | | | 655,962 | | | | 600,000 | | | | 3,468,190 | | | | — | | | | 1,367,913 | | | | 11,420 | | | | 6,103,484 | | Executive Vice President & Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | J. Braxton Carter | | | 2020 | | | | 575,540 | | | | — | | | | — | | | | — | | | | — | | | | 8,820,671 | | | | 9,396,212 | | Former Executive Vice President & Chief Financial Officer | | | 2019 | | | | 1,169,231 | | | | 2,500,000 | | | | 11,722,200 | | | | — | | | | 2,123,250 | | | | 4,761,512 | | | | 22,276,193 | | | | | 2018 | | | | 898,077 | | | | — | | | | 5,374,318 | | | | — | | | | 2,182,327 | | | | 11,803 | | | | 8,466,524 | | | | | | | | | | | Neville R. Ray | | | 2020 | | | | 960,577 | | | | — | | | | 29,280,443 | | | | — | | | | 2,960,000 | | | | 11,449 | | | | 33,212,469 | | President, Technology | | | 2019 | | | | 900,000 | | | | — | | | | 7,521,164 | | | | — | | | | 2,682,000 | | | | 72,533 | | | | 11,175,697 | | | | | 2018 | | | | 879,808 | | | | — | | | | 22,293,403 | | | | — | | | | 2,590,177 | | | | 11,511 | | | | 25,774,898 | | | | | | | | | | | David A. Miller | | | 2020 | | | | 804,808 | | | | — | | | | 5,100,120 | | | | — | | | | 1,860,000 | | | | 11,449 | | | | 7,776,377 | | Executive Vice President, General Counsel & Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Peter A. Ewens | | | 2020 | | | | 752,885 | | | | — | | | | 4,294,104 | | | | — | | | | 1,450,000 | | | | 11,449 | | | | 6,508,438 | | Executive Vice President, Corporate Strategy and Development | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | David R. Carey | | | 2020 | | | | 289,284 | | | | — | | | | — | | | | — | | | | — | | | | 29,558,335 | | | | 29,847,619 | | Former Executive Vice President, Corporate Services | | | 2019 | | | | 775,000 | | | | — | | | | 5,397,151 | | | | — | | | | 1,732,125 | | | | 11,299 | | | | 7,915,575 | | | | | 2018 | | | | 774,038 | | | | — | | | | 13,501,485 | | | | — | | | | 1,567,428 | | | | 11,025 | | | | 15,853,977 | |
(1)1 | For Messrs. Carter and Carey, the amount in this column for 2020 also includes a one-time cash payment of accrued, unused paid time off through their respective termination dates, which was paid to Mr. Carter in July 2020 and to Mr. Carey in April 2020. |
| 2 | For Mr. Sievert, the amount in this column represents the special bonus that became payable to him on April 1, 2020 in connection with the closing of the Sprint Combination, as approved by the Compensation Committee in connection with his entrance into his employment agreement in 2019. For Mr. Osvaldik the amount in this column represents the special bonus that became payable to him on July 1, 2020, as approved by the Compensation Committee in connection with his appointment as EVP & Chief Financial Officer. |
| 3 | The value of stock awards (consisting of RSUs and PRSUs at target level) is determined using the aggregate grant date fair value computed in accordance with ASC 718, excluding the effect of any estimated forfeitures. These amounts reflect the Company’s accounting expense and do not correspond to the actual value that will be realized by the Named Executive Officer. See Note 111 to the Consolidated Financial Statements included in the Company’s Annual Report on Form10-K for the year ended December 31, 20182020 for a summary of the assumptions we apply in calculating these amounts. The aggregate grant date fair value of the PRSUs granted to our Named Executive Officers during 2018,2020, assuming maximum performance, would be as follows: Mr. Legere, $109,373,048Sievert, $72,521,068 (including $15,339,641$19,550,948 (for his annual PRSUs), $5,752,365PRSUs granted in February) and $52,970,120 (for his Incremental PRSUs (as defined and discussed below)), and $88,281,041 (for his TransactionSievert Special PRSUs)); Mr. Carter, $5,392,926; Mr. Sievert, $55,090,384Osvaldik, $4,838,133 (including $6,831,048$2,566,264 (for his annual PRSUs)PRSUs granted in February) and $48,259,336$2,271,869 (for his TransactionOsvaldik Special PRSUs)); Mr. Ray, $39,528,704$46,987,888 (including $5,093,252$10,046,992 (for his annual PRSUs), $5,027,412PRSUs granted in February) and $36,940,896 (for his February specialone-time award of PRSUs), and $29,408,040 (for his TransactionRay Special PRSUs)); Mr. Miller, $5,611,844; and Mr. Carey, $22,852,314 (including $4,179,500 (for his annual PRSUs), $5,027,412 (for his February specialone-time award of PRSUs), and $13,645,402 (for his Transaction PRSUs)).Ewens, $4,724,956. |
(2)4 | For 2018,2020, represents amounts paid by the Company under the 20182020 STIP, based on the achievement of certain Company performance measures during the year. For additional information, please see “— Annual Short-Term Incentives” above. |
(3) | | | ⬛ PROXY STATEMENT 2021 | | 49 |
Executive Compensation | 5 | Amounts included in the “All Other Compensation” column are detailed in the table below. |
| Officer | | 401k
Employer Match ($) | | | Legal Fee
Reimbursement ($) | | | Security
Arrangements ($) | | | Spousal Travel (1) ($) | | | Other (2) ($) | | | Total ($) | | | | Name | | | 401k
Employer
Match | | Legal Fee
Reimbursement | | Security
Arrangements | | Consulting
Arrangements1 | | Severance
Payments2 | | Other3 | | Total | | | G. Michael Sievert | | | | 11,400 | | | | — | | | | 103,068 | | | | — | | | | — | | | | 166 | | | | 114,634 | | | John J. Legere | | | — | | | | 18,375 | | | | 15,784 | | | | — | | | | 25 | | | | 34,183 | | | | — | | | | 50,000 | | | | — | | | | — | | | | 136,545,887 | | | | — | | | | 136,595,887 | | | Peter Osvaldik | | | | 11,400 | | | | — | | | | — | | | | — | | | | — | | | | 20 | | | | 11,420 | | | J. Braxton Carter | | | 11,000 | | | | — | | | | — | | | | 509 | | | | 294 | | | | 11,803 | | | | 11,400 | | | | — | | | | — | | | | 1,260,000 | | | | 7,549,271 | | | | — | | | | 8,820,671 | | G. Michael Sievert | | | 11,000 | | | | — | | | | — | | | | 509 | | | | 25 | | | | 11,534 | | | | Neville R. Ray | | | 11,000 | | | | — | | | | — | | | | 486 | | | | 25 | | | | 11,511 | | | | 11,400 | | | | — | | | | — | | | | — | | | | — | | | | 49 | | | | 11,449 | | | David A. Miller | | | | 11,400 | | | | — | | | | — | | | | — | | | | — | | | | 49 | | | | 11,449 | | | Peter A. Ewens | | | | 11,400 | | | | — | | | | — | | | | — | | | | — | | | | 49 | | | | 11,449 | | | David R. Carey | | | 11,000 | | | | — | | | | — | | | | — | | | | 25 | | | | 11,025 | | | | 11,400 | | | | — | | | | — | | | | 354,255 | | | | 29,192,681 | | | | — | | | | 29,558,335 | |
| (1)1 | Converted from Euro to US Dollars usingFor Mr. Carter and Mr. Carey, the exchange rate of 1.1680 as of September 18, 2018, 1.1671 as of September 19, 2018, and 1.1779 as of September 20, 2018.value in the Consulting Arrangements column represents payments associated with their respective post-employment consulting arrangements.
|
| (2)2 | Amounts reflectFor Mr. Legere the value in the Severance Payments column represents cash severance, accelerated equity vesting upon termination, up to 18 months of giftsCOBRA continuation, a lump sum payment of $450,000 in lieu of monthly payments associated with an office and assistant, and reimbursement of certain moving expenses, as per his employment agreement. For Mr. Carter, the value in the Severance Payments column represents a cash retention payment made upon termination and up to 18 months of COBRA continuation, as per his employment agreement. For Mr. Carey, the value in the Severance Payments column represents cash severance, up to 18 months of COBRA continuation, up to 12 months of outplacement services, and accelerated equity vesting upon termination, as per his employment agreement. For additional information, please see “—Separation Payments and Benefits to Messrs. Legere, Carter and Carey” below.
|
| 3 | This value represents the cash value of items provided to the Named Executive Officers at employee recognition events (i.e. T-shirts,executive in conjunction with a Company sponsored event such as t-shirts, sunglasses etc.).and other Company branded memorabilia. |
| | | | | 50 | | T-Mobile 2019 Proxy Statement | | PROXY STATEMENT 2021 35⬛ |
EXECUTIVE COMPENSATIONExecutive Compensation
2018 Grants of Plan-Based Awards Table2020 GRANTS OF PLAN-BASED AWARDS TABLE
The following table sets forth certain information with respect to grants of plan-based awards for the year ended December 31, 2018,2020, to the Named Executive Officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards1 | | Estimated Future Payouts Under Equity Incentive Plan Awards2 | | | All Other
Stock
Awards:
Number of Shares
of Stock
or Units
(#) | | Grant
Date Fair
Value of
Stock
Awards3
($) | | Name | | Type of
Award | | Grant
Date | | Approval
Date | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other
Stock Awards:
Number of Shares
of Stock or Units (#) | | Grant Date
Fair Value of Stock
Awards (3)
($) | | | Type of
Award | | Grant
Date | | Approval
Date | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | G. Michael Sievert | | | STIP | | | | | | | 87,500 | | | 3,500,000 | | | 7,000,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | PRSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | 20,711 | | | 82,843 | | | 165,686 | | | | — | | | 9,775,474 | | | | | RSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 82,843 | | | 7,992,693 | | | | | | PRSU | | | 4/1/2020 | | | 11/15/2019 | | | | — | | | | — | | | | — | | | 60,813 | | | 243,250 | | | 486,500 | | | | — | | | 26,485,060 | | | John J. Legere | | STIP | | | | | | | 189,224 | | | 3,784,475 | | | 7,568,950 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | STIP | | | | | | | 24,932 | | | 997,260 | | | 1,994,521 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | PRSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | 31,506 | | | 126,024 | | | 252,048 | | | | — | | | 7,669,821 | | | PRSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | RSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | 63,012 | | | 3,808,445 | | | RSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | PRSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | 11,815 | | | 47,259 | | | 94,518 | | | | — | | | 2,876,183 | | | PRSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | PRSU | | | 4/29/2018 | | | 4/27/2018 | | | | — | | | | — | | | | — | | | | | 149,507 | | | 598,029 | | | 1,196,058 | | | | — | | | 44,140,520 | | | J. Braxton Carter | | STIP | | | | | | | 67,356 | | | 1,347,115 | | | 2,694,230 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | Peter Osvaldik | | | STIP | | | | | | | 21,374 | | | 854,946 | | | 1,709,892 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | PRSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | 11,077 | | | 44,306 | | | 88,612 | | | | — | | | 2,696,463 | | | PRSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | 2,719 | | | 10,874 | | | 21,748 | | | | — | | | 1,283,132 | | | | RSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | 44,306 | | | 2,677,855 | | | RSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 10,874 | | | 1,049,124 | | G. Michael Sievert | | STIP | | | | | | | 110,865 | | | 2,217,308 | | | 4,434,616 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | PRSU | | | 7/1/2020 | | | 6/12/2020 | | | | — | | | | — | | | | — | | | 2,437 | | | 9,748 | | | 19,496 | | | | — | | | 1,135,934 | | | J. Braxton Carter | | | STIP | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | PRSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | 14,030 | | | 56,121 | | | 112,242 | | | | — | | | 3,415,524 | | | PRSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | RSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | 56,121 | | | 3,391,953 | | | RSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | PRSU | | | 4/29/2018 | | | 4/27/2018 | | | | — | | | | — | | | | — | | | | | 80,815 | | | 323,259 | | | 646,518 | | | | — | | | 24,129,668 | | | Neville R. Ray | | STIP | | | | | | | 79,944 | | | 1,598,874 | | | 3,197,749 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | STIP | | | | | | | 46,250 | | | 1,850,000 | | | 3,700,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | PRSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | 10,461 | | | 41,844 | | | 83,688 | | | | — | | | 2,546,626 | | | PRSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | 10,643 | | | 42,572 | | | 85,144 | | | | — | | | 5,023,496 | | | | RSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | 41,844 | | | 2,529,051 | | | RSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 42,572 | | | 4,107,347 | | | | PRSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | 11,815 | | | 47,259 | | | 94,518 | | | | — | | | 2,513,706 | | | PRSU | | | 4/1/2020 | | | 9/9/2020 | 4 | | | — | | | | — | | | | — | | | 37,083 | | | 178,000 | | | 326,333 | | | | — | | | 20,149,600 | | | | PRSU | | | 4/29/2018 | | | 4/27/2018 | | | | — | | | | — | | | | — | | | | | 49,247 | | | 196,986 | | | 393,972 | | | | — | | | 14,704,020 | | | David A. Miller | | | STIP | | | | | | | 29,063 | | | 1,162,500 | | | 2,325,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | PRSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | 5,945 | | | 23,779 | | | 47,558 | | | | — | | | 2,805,922 | | | | | | RSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 23,779 | | | 2,294,198 | | | Peter A. Ewens | | | STIP | | | | | | | 22,656 | | | 906,250 | | | 1,812,500 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | PRSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | 5,005 | | | 20,021 | | | 40,042 | | | | — | | | 2,362,478 | | | | | | RSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 20,021 | | | 1,931,626 | | | David R. Carey | | STIP | | | | | | | 48,377 | | | 967,548 | | | 1,935,096 | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | STIP | | | | | | | 8,258 | | | 330,328 | | | 660,656 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | PRSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | 8,584 | | | 34,337 | | | 68,674 | | | | — | | | 2,089,750 | | | PRSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | RSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | | — | | | 34,337 | | | 2,075,328 | | | RSU | | | 2/15/2020 | | | 2/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | PRSU | | | 2/15/2018 | | | 2/14/2018 | | | | — | | | | — | | | | — | | | | | 11,815 | | | 47,259 | | | 94,518 | | | | — | | | 2,513,706 | | | | | PRSU | | | 4/29/2018 | | | 4/27/2018 | | | | — | | | | — | | | | — | | | | | 23,109 | | | 92,436 | | | 184,872 | | | | — | | | 6,822,701 | | |
(1)1 | Represents the threshold, target and maximum amounts of annual cash incentive compensation that mightmay have become payable to each Named Executive Officer for performance under the 20182020 STIP. The actual amounts paid for 2020 are shown in the “Non-Equity Incentive Plan Compensation” column of the 2020 Summary Compensation Table. |
(2)2 | Represents the threshold, target and maximum number of shares that might be paid pursuant to PRSU awards granted during 2018.in 2020. |
(3)3 | The value of RSUs and PRSUs (at target level)stock awards is determined using the aggregate grant date fair value computed in accordance with ASC 718, excluding the effect of any estimated forfeitures. These amounts reflect the Company’s accounting expense and do not correspond to the actual value that will be realized by the Named Executive Officer. See Note 111 to the Consolidated Financial Statements included in the Company’s Annual Report on Form10-K for for the year ended December 31, 20182020 for a summary of the assumptions we apply in calculating these amounts. |
| 4 | Mr. Ray was granted the Network Synergy PRSUs on April 1, 2020 pursuant to the Ray Term Sheet. The performance metric targets for the Network Synergy PRSUs were approved on September 9, 2020. |
EMPLOYMENT ARRANGEMENTS During 2020, the Company was party to employment arrangements with Messrs. Legere, Sievert, Carter, Carey and Ray, as more fully described below. The Company is not, and was not in 2020, party to written employment arrangements with any other Named Executive Officer. The Company is a party to certain arrangements with some of the Named Executive Officers with regard to severance and termination payments and benefits. See “—Potential Payments upon Termination or in Connection with a Change in Control” below for more information. Employment Arrangements
Employment Agreement with Mr. Legere.During 2018,the portion of 2020 ending on April 1, 2020, the Company was party to an amended and restated employment agreement with Mr. Legere (the(as amended, the “Legere Employment Agreement”). In connection with the execution of the Business Combination Agreement, the Company and Mr. Legere entered into an amendment to the Legere Employment Agreement (the “2018 Legere Amendment”), effective as of April 29, 2018. Prior to the 2018 Legere Amendment, the term of the Legere Employment Agreement extended through April 1, 2019, and automatically extended for successiveone-year terms thereafter (unless either party provided notice ofnon-renewal).
| | | ⬛ PROXY STATEMENT 2021 | | 51 |
Executive Compensation Pursuant to the Legere Employment Agreement, Mr. Legere served as in effect priorour Chief Executive Officer through April 1, 2020, the date on which the Sprint Combination closed, on which date his employment automatically terminated. In addition, under the Legere Employment Agreement, Mr. Legere would continue to serve as a member of the Board until the 2020 Annual Meeting of Stockholders. On April 24, 2020, Mr. Legere notified T-Mobile that he was resigning from the Board of Directors of the Company, effective immediately. Pursuant to the 2018 Legere Amendment,Employment Agreement, during his employment with us, Mr. Legere was entitled to (i) an annual base salary of $1,666,667,$2,000,000, and (ii) an annual incentive plan target of no less than $3,333,333$4,000,000 (with a maximum award equal to 200% of target). The Legere Employment Agreement also providesprovided that Mr. Legere iswas entitled to employee benefits to the same extent and on the same terms as such benefits are provided generally by the Company to its senior managers. Pursuant to the Legere Employment Agreement, (as in effect prior to the 2018 Legere Amendment), commencing with calendar year 2018, Mr. Legere was entitled to annualnot eligible for long-term incentive awards with a target value equal to $15,000,000, allocated as follows: (i) 20% of such value was to be granted in the form of PRSUs (the “Incremental PRSUs”); and (ii) with respect to the remaining 80% of such value,(a) one-third of such remaining value was to be granted in the form of annual RSUs and(b) two-thirds of such remaining value was to be granted in the form of annual PRSUs.during 2020.
In addition, pursuant to the Legere Employment Agreement, Mr. Legere iswas entitled upon request to certain Company-paid financial planning advice in connection with potential change in control payments under Code Section 280G. 2018 Legere Amendment. The 2018 Legere Amendment amended the Legere Employment Agreement to (i) extend the term of Mr. Legere’s employment thereunder through April 30, 2020 (with Mr. Legere’s employment automatically terminating on such date, unless terminated earlier) and (ii) increase (A) Mr. Legere’s annual base salary to $2,000,000, (B) Mr. Legere’s target annual incentive award to $4,000,000 and (C) the target grant-date value of Mr. Legere’s annual long-term incentive awards (commencing with calendar year 2019) to $17,250,000 (allocated among annual RSUs, annual PRSUs and Incremental PRSUs in the same manner described above). In addition, concurrently with the entrance into the 2018 Legere Amendment, Mr. Legere was granted an award of Transaction PRSUs, with an approximate aggregate grant-date value of $37,000,000. See “— Long-Term Incentive Awards Granted in 2018” above for additional information.
The 2018 Legere Amendment also provides that the Company will reimburse Mr. Legere for up to $25,000 in legal fees incurred in connection with the negotiation of such amendment.
| | | | | 36 | | T-Mobile 2019 Proxy Statement | | |
EXECUTIVE COMPENSATION
Term Sheet with Mr. Sievert. During 2017,2020, the Company was party to an amended and restated term sheet withthe Sievert Employment Agreement, pursuant to which Mr. Sievert (the “Sievert Term Sheet”). In connection withserved as our President and Chief Operating Officer through March 31, 2020 and commenced service as our President and Chief Executive Officer effective April 1, 2020, the executiondate on which the Sprint Combination closed. The Sievert Employment Agreement provides for an initial employment term through the third anniversary of the Business Combination Agreement, the Company anddate on which Mr. Sievert entered into an amendmentbecame our Chief Executive Officer, subject to the Sievert Term Sheet, effective asautomatic one-year extensions thereafter (unless either party provides notice of April 29, 2018 (the “2018 Sievert Amendment”)non-renewal).
Pursuant to the Sievert Term Sheet (as in effect prior to the 2018 Sievert Amendment),Employment Agreement, Mr. Sievert wasis entitled to (i) an annual base salary that, during 2020, was equal to $1,400,000, which will automatically increase (or has already automatically increased, as applicable) to (a) $1,500,000 effective as of $950,000,January 1, 2021 and (b) the greater of (x) $1,600,000 or (y) the then-current median annual base salary for chief executive officers in our then-current peer group effective as of January 1, 2022; (ii) an annual short-term incentive plan targetaward targeted at 250% of base salary (with a maximum award equal to 200% of his base salary,target); and (iii) an annual long-term incentive plan award with a target value of $7,125,000. Theemployee benefits to the same extent and on the same terms as such benefits are provided generally to other senior executives. Pursuant to the Sievert Term sheet also provides thatEmployment Agreement, Mr. Sievert is eligible to receive any employee benefits provided broadly to executives at his level in the future (except as would result inwas paid a duplicationone-time cash payment of benefits). 2018 Sievert Amendment.The 2018 Sievert Amendment amended the Sievert Term Sheet to reflect Mr. Sievert’s new position as President and Chief Operating Officer of the Company, effective as of April 29, 2018 (as ratified by the Board on June 13, 2018), and to provide for his service as President and Chief Operating Officer of the combined entity resulting from$3,500,000 (the “Retention Payment”) upon the closing of the Sprint Combination. Combination in April 2020.
In addition, pursuant to the 2018 Sievert Amendment increases (i)Employment Agreement, Mr. Sievert’sSievert is entitled to annual base salary to $1,200,000,long-term incentive awards with a target grant-date value that is no less than $13,500,000, allocated as follows: 50% of such value will be granted in the form of PRSUs and (ii) the remaining 50% of such value will be granted in the form of RSUs. The target grant-date value of Mr. Sievert’s annual long-term incentive awards (commencingwill automatically increase (or has already automatically increased, as applicable) to (i) $14,250,000 for long-term incentive awards granted during 2021 and (ii) for long-term incentive awards granted on or after January 1, 2022, the greater of (a) $15,000,000 and (b) the then-current median target grant-date value of annual equity incentive awards for chief executive officers in our then-current peer group. With respect to 60% of the total RSUs granted to Mr. Sievert as annual LTI awards during each of calendar years 2020, 2021 and 2022 (representing 30% of the total target grant-date value for each such year), the total length of the vesting schedule of such RSUs will be no longer than the length of the median total length of the vesting schedules of annual time-based equity incentive awards for chief executive officers in our then-current peer group at the time of grant. Pursuant to the Sievert Employment Agreement, in connection with calendar year 2019) to $10,350,000. In addition, concurrently with the entrance into the 2018 Sievert Amendment,Mr. Sievert’s commencement of service as our Chief Executive Officer, Mr. Sievert was granted an award of Transactionthe Sievert Special PRSUs. For additional detail regarding the Sievert Special PRSUs, with an approximate aggregate grant-date value of $20,000,000. Seesee “— Long-Term IncentiveSpecial Equity Awards Granted in 2018” above for additional information.2020” above. Employment Agreement with Mr. Carter.During 2018,2020, the Company was party to an amended and restated employment agreement with Mr. Carter (the(as amended, the “Carter Employment Agreement”). In connection with the execution of the Business Combination Agreement, the Company and Mr. Carter entered into an amendmentPursuant to the Carter Employment Agreement, (the “2018Mr. Carter Amendment”), effectiveserved as Executive Vice President and Chief Financial Officer of April 29, 2018. Effective March 25, 2019, the Company and Mr. Carter entered into a second amendment to the Carter Employment Agreement (the “2019 Carter Amendment”). The terms of the 2019 Carter Amendment (which were not in effect in 2018) are described below under “— 2019 Carter Amendment”.through July 1, 2020, on which date his employment automatically terminated. Pursuant to the Carter Employment Agreement, (as in effect during 2018 prior to the 2018 Carter Amendment), the term of the Carter Employment Agreement extended through March 1, 2019, unless extended or earlier terminated by the parties. In addition, pursuant to the Carter Employment Agreement as in effective during 2018,2020, Mr. Carter iswas entitled to receive (i) an annual base salary of $850,000,$950,000, and (ii) an annual incentive plan target of 150% of his eligible base earnings, (iii) an annual long-term incentive award with a target value of 250% of his total target cash compensation, (iv) aone-time special cash bonus equal to $2,500,000 (the full amount was paid in March 2019), (v) aone-time award of time-based RSUs with a target value of $2,500,000 (the award vested in full on March 1, 2019); and (vi) employee benefits to the same extent and on the same terms as such benefits are provided generally by the Company to its similarly-situated executives. In addition, subject to Mr. Carter’s continued employment through July 1, 2020, he was paid a one-time cash bonus in the amount of $7,525,000.
2018 Carter Amendment. The 2018 Carter Amendment amendedPursuant to the Carter Employment Agreement, to provide that Mr. Carter’s employment thereunder will continue until the first to occur of the following dates: (1) if the Sprint Combination closes, the 20th day following the
Company’s (or combined entity’s) first quarterly or annual financial filing following the closing; or (2) if the Sprint Combination is terminated and (a) public announcement thereof is made prior to March 1, 2019, (x) the 20th day following the Company’s next quarterly or annual financial filing after such public announcement if the deadline for such financial filing is after March 1, 2019, or (y) March 1, 2019 if the deadline for the Company’s next quarterly or annual financial filing after such public announcement is before March 1, 2019, and (b) public announcement thereof is made following March 1, 2019, the 20th day following the first quarterly or annual financial filing made by the Company after such public announcement. The 2018 Carter Amendment also clarifies that Mr. Carter’s employment will automatically terminate upon the expiration of his employment term (unless earlier terminated).
2019 Carter Amendment. The 2019 Carter Amendment amended the Carter Employment Agreement to provide that the term of Mr. Carter’s employment thereunder will continue until the first to occur of the following dates: (1) December 31, 2019; (2) if the Sprint Combination closes prior to December 31, 2019, the 20th day following the first quarterly or annual financial filing made by the combined entity after the closing; or (3) if, prior to December 31, 2019, the Company publicly announces that the Sprint Combination has been terminated, the 20th day following the first quarterly or annual financial filing made by the Company after such public announcement. The 2019 Carter Amendment also increased Mr. Carter’s annual base salary to $950,000, effective as of December 16, 2018.
Following entrance into the 2019 Carter Amendment,second business day following February 6, 2020, Mr. Carter was granted (i) a one-time awardhad the right to require the Company to purchase some or all of PRSUs with respect to a number ofthe vested shares of Company common stock equal to $156,250 divided by the average closing price of the Company’s common stock for the 30 calendar day-period ending five business days priorthen-held by him that were issued or paid pursuant to February 15, 2019, rounded up to the nearest whole PRSU (the “True-Up PRSUs”) and (ii)long-term incentive or other equity-based awards, at a one-time award of RSUs with respect to a number of shares of Company common stockprice per share equal to $156,250 divided by the average closing price of the Company’s common stock for the 30 calendar day-period ending five business days prior to February 15, 2019, rounded up to the nearest whole RSU (the “True-Up RSUs”). The True-Up PRSUs and True-Up RSUs are subject to the same vesting schedule and other terms and conditions (including, with respect to the True-Up PRSUs, performance goals) applicable to the annual awards of PRSUs and RSUs granted to Mr. Carter on February 15, 2019.
In addition, following entrance into the 2019 Carter Amendment, Mr. Carter was granted a one-time award of PRSUs with an aggregate value (based on the volume weighted average price of the Company’s common stock duringover the 90 calendar day30-day period ending with (and including) April 27, 2018) of $3,500,000. These PRSUs are generally subject to the same terms and conditions as the PRSUs granted todate on which we filed our Annual Report on Form 10-K for 2019. Mr. Carter underexercised this repurchase right on January 31, 2020 with respect to 342,000 shares of Company common stock, and the Planrepurchase occurred on February 15, 2018, except that (i) fifty percent (50%)10, 2020 (at a per-share purchase price of the PRSUs will vest on the earlier of the closing of the Sprint Combination or the third anniversary of April 29, 2018, and (ii) the remaining fifty percent (50%) of the PRSUs will vest on the third anniversary of April 29, 2018, subject to Mr. Carter’s continued employment through the applicable vesting date (except as otherwise set forth in the Carter Employment Agreement (as amended) and PRSU award agreement)$80.8856).
| | | 52 | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation Carey Term Sheet with Mr. Carey.Sheet. In connection with the execution of the Business Combination Agreement, effective as of April 29, 2018During 2020, the Company entered intowas party to a compensation term sheet with Mr. Carey (the(as amended, the “Carey Term Sheet”). The term of the Carey Term Sheet extends through | | | | | | | T-Mobile 2019 Proxy Statement | | 37 |
EXECUTIVE COMPENSATION
April 29, 2020, unless earlier terminated. Pursuant to the Carey Term Sheet, Mr. Carey isserved as Executive Vice President, Corporate Services of the Company through April 13, 2020, on which date his employment was terminated.
Pursuant to the Carey Term Sheet, during 2020, Mr. Carey was entitled to (i) an annual base salary of $775,000, (ii) a target annual incentiveSTI award equal to 125%150% of his eligible base earnings, and (iii) eligibility to participate in the Company’s employee benefit plans. The Carey Term Sheet provided that Mr. Carey was not eligible to receive grants of long-term incentive awards after February 12, 2020 (including any annual LTI awards for calendar year 2020). Term Sheet with Mr. Ray. During 2020, the Company was party to a compensation term sheet with Mr. Ray (the “Ray Term Sheet”). Pursuant to the Ray Term Sheet, Mr. Ray currently serves as our President, Technology. The Ray Term Sheet provides for an initial two-year employment term through November 15, 2021, subject to automatic one-year extensions (unless either party provides notice of non-renewal). Pursuant to the Ray Term Sheet, Mr. Ray is entitled to (i) an annual base salary equal to $900,000, (ii) an annual STI award targeted at 200% of Mr. Ray’s eligible base earnings during the applicable year, payable based on the attainment of pre-established performance goals, and (iii) an annual LTI or other equity awards with a target grant-date value that is no less than $6,750,000. In addition, Mr. Ray was granted the Network Synergy PRSUs. For additional detail regarding the Network Synergy PRSUs, see “—Special Equity Awards in 2020” above.” Compensation Arrangements with Mr. Miller. Mr. Miller is a party to a retirement agreement with the Company further described below in “—Termination Due to Retirement”. Additionally, on April 8, 2021, the Company and Mr. Miller entered into a letter agreement (the “Miller Term Sheet”), pursuant to which Mr. Miller is eligible to receive a supplemental cash performance bonus (each, a “Performance Bonus”) targeted at $1,500,000 for each of calendar years 2021 and 2022, subject to his continued employment through the applicable payment date. The actual amount of each Performance Bonus will range from 0% to 200% of target and will be determined based on the attainment of the same performance goals that apply to his annual STI award for the applicable calendar year. Compensation Arrangement with Mr. Osvaldik. The Company is not party to a written employment arrangement with Mr. Osvaldik. However, in connection with Mr. Osvaldik’s appointment as our Executive Vice President and Chief Financial Officer, effective July 1, 2020, our Compensation Committee approved new compensation terms for Mr. Osvaldik, including: (i) an annual base salary of $750,000, (ii) an annual STI award targeted at 150% of base salary, and (iii) commencing with calendar year 2019,2021, annual long-term incentiveLTI awards with an annual aggregate grant-date target grant-date value equal to 200% of no less than $4,359,375. Concurrently with the entrance into the Carey Term Sheet,his total target cash. In addition, Mr. CareyOsvaldik received a one-time cash payment of $600,000 upon his commencement as Executive Vice President and Chief Financial Officer, and was granted an award of Transactionthe Osvaldik Special PRSUs. For additional detail regarding the Osvaldik Special PRSUs, with an approximate aggregate grant date value of $5,719,000. Seesee “— Long-Term IncentiveSpecial Equity Awards Granted in 2018” above for additional information.2020” above. See “—Potential Payments upon Termination or in Connection with a Change in Control” for information regarding payments payable upon termination of employment of the Named Executive Officers. CASH AND INCENTIVE COMPENSATION Cash and Incentive Compensation
Non-Equity Incentive Plan Awards.The 20182020 Summary Compensation Table includes payments received under the 2018 STIP for the performance period ended December 31, 2018.2020 STIP. The 20182020 Grants of Plan-Based Awards Table includes the range of potential payouts of awards granted under the 20182020 STIP. Equity Incentive Plan Awards. All of the Named Executive Officers (other than Messrs. Legere, Carter and Carey, who were not eligible for long-term incentive awards during 2020) received equity awards consisting of both RSUs that vest in three annual installments beginning in February 2019,2021, subject to continued service through the applicable vesting dates, and PRSUs that vest based on the relative performance of the Company’s TSRRTSR compared to that of the Company’s peer group over a three-year measurement period, subject to continued service through the end of the measurement period (in each case, except as described below). In addition, Messrs. Sievert, Osvaldik and Ray received special PRSU awards during 2020. See “—Long-Term Incentives” above for more information. | | | | | 38⬛ PROXY STATEMENT 2021 | | T-Mobile 2019 Proxy Statement | | 53 |
EXECUTIVE COMPENSATIONExecutive Compensation
OUTSTANDING EQUITY AWARDS AT 2020 FISCAL Outstanding Equity Awards at 2018 FiscalYear-EndYEAR-END TableTABLE The following table sets forth certain information with respect to all outstanding equity awards held by the Named Executive Officers as of December 31, 2018. The number of PRSUs (and related market value) set forth below assume attainment of maximum Company performance (200% of target). As a result, the values disclosed are materially higher than the actual trending value as of December 31, 2018.2020. Actual value received at vestupon vesting of the PRSUs will be based on Company performance at that time. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | | | | | | | | | | | Option Awards | | | | | | Stock Awards | | | Name | |
| Type of
Award |
| |
| Grant
Date |
| | | |
| Number of
Securities
Underlying
Unexercised
Options |
| | | |
| Number of
Securities
Underlying
Unexercised
Options |
| |
| Option
Exercise
Price ($) |
| |
| Option
Expiration
Date |
| |
| Value of
Unexercised
In-the- Money Options/ SARs at
Fiscal Year-End ($) |
| | | |
| Number
of
Shares
or Units of Stock
That
Have Not Vested (#) |
| |
| Market
Value of
Shares or
Units of
Stock That
Have Not
Vested (7) ($) |
| |
| Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#) |
| |
| Equity
Incentive
Plan
Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights That
Have Not Vested (7) ($) |
| | Type of
Award | | Grant Date | | Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) | | Option
Exercise Price ($) | | Option Expiration
Date | | Value of
Unexercised In-the- Money Options/ SARs at
Fiscal Year-End ($) | | Number
of
Shares or Units or Stock
That
Have Not Vested (#) | | Market
Value of
Shares or
Units of
Stock That
Have Not Vested8 ($) | | Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not Vested
(#) | | Equity
Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or
Other Rights That
Have Not Vested8 ($) | | | | Exercisable
(#) | | | | Unexercisable
(#) | | | John J. Legere | | PRSU | | | 4/29/2018 | (1) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 598,029 | | | 76,081,249 | | | | G. Michael Sievert | | | PRSU | | | 4/1/2020 | 1 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 243,250 | | | 65,604,525 | | | | RSU | | | 2/15/2018 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 63,012 | | | 4,008,193 | | | | — | | | | — | | | PRSU | | | 2/15/2020 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 82,843 | | | 22,342,757 | | | | PRSU | | | 2/15/2018 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 47,259 | | | 6,012,290 | | | RSU | | | 2/15/2020 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 82,843 | | | 11,171,379 | | | | — | | | | — | | | | PRSU | | | 2/15/2018 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 126,024 | | | 16,032,773 | | | PRSU | | | 2/15/2019 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 76,182 | | | 20,546,285 | | | | PRSU | | | 4/1/2017 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 48,757 | | | 6,202,866 | | | RSU | | | 2/15/2019 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 50,788 | | | 6,848,762 | | | | — | | | | — | | | | PRSU | | | 2/25/2017 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 130,018 | | | 16,540,890 | | | PRSU | | | 4/29/2018 | 4 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 161,630 | | | 43,591,611 | | | | RSU | | | 2/25/2017 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 43,340 | | | 2,756,857 | | | | — | | | | — | | | PRSU | | | 2/15/2018 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 56,121 | | | 15,135,834 | | | | PRSU | | | 2/25/2016 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 215,112 | | | 27,366,549 | | | | RSU | | | | 2/15/2018 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | | 18,707 | | | | 2,522,639 | | | | — | | | | — | | | | RSU | | | 2/25/2016 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 35,852 | | | 2,280,546 | | | | — | | | | — | | | J. Braxton Carter | | PRSU | | | 2/15/2018 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 44,306 | | | 5,636,609 | | | | | RSU | | | 2/15/2018 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 44,306 | | | 2,818,305 | | | | — | | | | — | | | | | RSU | | | 12/22/2017 | (4) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 40,545 | | | 2,579,067 | | | | — | | | | — | | | | | PRSU | | | 2/25/2017 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 43,170 | | | 5,492,087 | | | | | RSU | | | 2/25/2017 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 28,780 | | | 1,830,696 | | | | — | | | | — | | | | | PRSU | | | 2/25/2016 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 54,829 | | | 6,975,345 | | | | | RSU | | | 2/25/2016 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 18,277 | | | 1,162,600 | | | | — | | | | — | | | G. Michael Sievert | | PRSU | | | 4/29/2018 | (1) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 323,259 | | | 41,125,010 | | | Peter Osvaldik | | | PRSU | | | 7/1/2020 | 5 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 9,748 | | | 2,629,036 | | | | PRSU | | | 2/15/2018 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 56,121 | | | 7,139,714 | | | PRSU | | | 2/15/2020 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 10,874 | | | 2,932,718 | | | | RSU | | | 2/15/2018 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 56,121 | | | 3,569,857 | | | | — | | | | — | | | RSU | | | 2/15/2020 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 10,874 | | | 1,466,359 | | | | — | | | | — | | | | PRSU | | | 2/25/2017 | (5) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 57,899 | | | 7,365,911 | | | PRSU | | | 2/15/2019 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 7,246 | | | 1,954,246 | | | | RSU | | | 2/25/2017 | (6) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 38,600 | | | 2,455,346 | | | | — | | | | — | | | RSU | | | 2/15/2019 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 4,831 | | | 651,460 | | | | — | | | | — | | | | PRSU | | | 2/25/2017 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 57,899 | | | 7,365,911 | | | PRSU | | | 6/29/2018 | 6 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 17,656 | | | 4,761,823 | | | | RSU | | | 2/25/2017 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 57,899 | | | 3,682,955 | | | | — | | | | — | | | PRSU | | | 2/15/2018 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 7,323 | | | 1,975,013 | | | | PRSU | | | 2/25/2016 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 67,223 | | | 8,552,110 | | | RSU | | | 2/15/2018 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 2,441 | | | 329,169 | | | | — | | | | — | | | | RSU | | | 2/25/2016 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 22,408 | | | 1,425,373 | | | | — | | | | — | | | Neville R. Ray | | PRSU | | | 4/29/2018 | (1) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 196,986 | | | 25,060,559 | | | PRSU | | | 4/1/2020 | 7 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 178,000 | | | 48,006,600 | | | | PRSU | | | 2/15/2018 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 47,259 | | | 6,012,290 | | | PRSU | | | 2/15/2020 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 42,572 | | | 11,481,668 | | | | PRSU | | | 2/15/2018 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | �� | | | | | | — | | | | — | | | 41,844 | | | 5,323,394 | | | RSU | | | 2/15/2020 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 42,572 | | | 5,740,834 | | | | — | | | | — | | | | RSU | | | 2/15/2018 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 41,844 | | | 2,661,697 | | | | — | | | | — | | | PRSU | | | 2/15/2019 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 49,684 | | | 13,399,775 | | | | PRSU | | | 2/25/2017 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 40,631 | | | 5,169,076 | | | RSU | | | 2/15/2019 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 33,123 | | | 4,466,637 | | | | — | | | | — | | | | RSU | | | 2/25/2017 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 27,088 | | | 1,723,068 | | | | — | | | | — | | | PRSU | | | 4/29/2018 | 4 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 98,493 | | | 26,563,562 | | | | PRSU | | | 2/25/2016 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 52,938 | | | 6,734,772 | | | PRSU | | | 2/15/2018 | 2 | | | | | | | | | | | | | — | | | | — | | | 47,259 | | | 12,745,752 | | | | RSU | | | 2/25/2016 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 17,646 | | | 1,122,462 | | | | — | | | | — | | | PRSU | | | 2/15/2018 | 2 | | | | | | | | | | | | | — | | | | — | | | 41,844 | | | 11,285,327 | | David R. Carey | | PRSU | | | 4/29/2018 | (1) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 92,436 | | | 11,759,708 | | | | | | | RSU | | | 2/15/2018 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 13,948 | | | 1,880,888 | | | | — | | | | — | | | David A. Miller | | | PRSU | | | 2/15/2020 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 23,779 | | | 6,413,196 | | | | PRSU | | | 2/15/2018 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 47,259 | | | 6,012,290 | | | RSU | | | 2/15/2020 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 23,779 | | | 3,206,598 | | | | — | | | | — | | | | PRSU | | | 2/15/2018 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 34,337 | | | 4,368,353 | | | PRSU | | | 2/15/2019 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 23,186 | | | 6,253,264 | | | | RSU | | | 2/15/2018 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 34,337 | | | 2,184,177 | | | | — | | | | — | | | RSU | | | 2/15/2019 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 15,458 | | | 2,084,511 | | | | — | | | | — | | | | PRSU | | | 2/25/2017 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 30,854 | | | 3,925,246 | | | PRSU | | | 11/29/2018 | 4 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 26,669 | | | 7,192,629 | | | | RSU | | | 2/25/2017 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | 20,570 | | | 1,308,458 | | | | — | | | | — | | | PRSU | | | 2/15/2018 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 47,259 | | | 12,745,752 | | | | PRSU | | | 2/25/2016 | (2) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | — | | | | — | | | 34,956 | | | 4,447,102 | | | PRSU | | | 2/15/2018 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 23,925 | | | 6,452,573 | | | | | RSU | | | | 2/25/2016 | (3) | | | | | — | | | | | | — | | | | — | | | | — | | | | — | | | | | | 11,652 | | | | 741,184 | | | | — | | | | — | | | RSU | | | 2/15/2018 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 7,975 | | | 1,075,429 | | | | — | | | | — | | | Peter A. Ewens | | | PRSU | | | 2/15/2020 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 20,021 | | | 5,399,664 | | | | | RSU | | | 2/15/2020 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 20,021 | | | 2,699,832 | | | | — | | | | — | | | | | PRSU | | | 2/15/2019 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 23,186 | | | 6,253,264 | | | | | RSU | | | 2/15/2019 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 15,458 | | | 2,084,511 | | | | — | | | | — | | | | | PRSU | | | 11/29/2018 | 4 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 26,669 | | | 7,192,629 | | | | | PRSU | | | 2/15/2018 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 47,259 | | | 12,745,752 | | | | | PRSU | | | 2/15/2018 | 2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | 24,811 | | | 6,691,527 | | | | | RSU | | | 2/15/2018 | 3 | | | — | | | | — | | | | — | | | | — | | | | — | | | 8,271 | | | 1,115,344 | | | | — | | | | — | |
(1)1 | TransactionSievert Special PRSUs which vest upon the conclusion of a three-year performance period commencing on the grant date based on the relative performance of the Company’s TSR compared to that of the peer group over the performance period, subject to continued service through the applicable vesting dateend of the performance period (except as otherwise provided in the applicable award or employment agreement), as follows: (i) for Mr. Legere, 50% of the Transaction PRSUs vest on the earlier of the closing of the Sprint Combination or April 30, 2020, and the remaining 50% vest on April 30, 2020, (ii) for Mr. Carey, 50% of the Transaction PRSUs vest upon the earlier of the closing of the Sprint Combination or April 29, 2020, and the remaining 50% vest on April 29, 2020, and (iii) for Messrs. Sievert and Ray, 50% of the Transaction PRSUs vest upon the earlier of the closing of the Sprint Combination or April 29, 2021, and the remaining 50% vest on April 29, 2021. For additional information, see “— Special Equity Awards in 2018” above..
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(2) | | | 54 | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation | 2 | PRSUs which vest upon the conclusion of a three-year performance period commencing on the grant date based on the relative performance of the Company’s TSR compared to that of the peer group over the performance period, subject to continued service through the end of the performance period (except as otherwise provided in the applicable award or employment agreement) (with the exception of Mr. Legere’s 2017 True-Up PRSUs which vest on February 25, 2020)arrangement). |
| | | | | | | T-Mobile 2019 Proxy Statement | | 39 |
EXECUTIVE COMPENSATION
(3)3 | RSUs vest in annual installments with respect toone-third of the shares on each of the first three anniversaries of the grant date, subject to continued service through the applicable vesting date (except as otherwise provided in the applicable award or employment agreement)arrangement). |
(4)4 | RSUs which vested in full on March 1, 2019.
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(5) | Transaction PRSUs which vested on February 25, 2019vest based on the relative performance of the Company’s TSR compared to that of the peer group, from February 25, 2017subject to continued service through February 25, 2019.the applicable vesting date (except as otherwise provided in the applicable award or employment arrangement), as follows: 50% of the Transaction PRSUs vested upon the closing of the Sprint Combination, and the remaining 50% vest on April 29, 2021. |
(6)5 | RSUsOsvaldik Special PRSUs which vestedvest upon the conclusion of a three-year performance period commencing on the grant date based on the relative performance of the Company’s TSR compared to that of the peer group over the performance period, subject to continued service through the end of the performance period (except as otherwise provided in full on February 25, 2019.the applicable award agreement).
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(7)6 | Special PRSUs which vest upon the conclusion of a three-year performance period ending on June 12, 2021 based on the relative performance of the Company’s TSR compared to that of the peer group over the performance period, subject to continued service through the end of the performance period (except as otherwise provided in the applicable award or employment arrangement). |
| 7 | Ray Special PRSUs which vest as to five-sixths (5/6), subject to satisfaction of synergy performance-vesting conditions, on the third anniversary of the closing date of the Sprint Combination, and as to the remaining one-sixth (1/6), subject to satisfaction of FCC performance-vesting conditions, on the fourth anniversary of the closing date of the Sprint Combination, in each case, subject to continued service through the third anniversary of the closing date of the Sprint Combination (except as otherwise provided in the applicable award agreement or term sheet). |
| 8 | Calculated based on the number of PRSUs that may be earned upon achievement of the maximum performance level or number of time-based RSUs, as applicable, multiplied by the closing price of our common stock on December 31, 20182020 of $63.61$134.85 per share. In calculating the number of PRSUs and their value, we are required by SEC rules to compare the Company’s performance through 20182020 under each outstanding PRSU grant against the threshold, target, and maximum performance levels for the grant and report in this column the applicable potential payout amount. If the performance is between levels, we are required to report the potential payout at the next highest level. For example, if the previous fiscal year’s performance exceeded target, even if it is by a small amount and even if it is highly unlikely that we will pay the maximum amount, we are required by SEC rules to report the awards using the maximum potential payouts. |
Option Exercises and Stock Vested for Fiscal Year 2018 TableOPTION EXERCISES AND STOCK VESTED FOR FISCAL YEAR 2020 TABLE
The following table sets forth certain information with respect to restricted stock unitsRSUs and PRSUs vesting during the fiscal year ended December 31, 2018,2020, with respect to the Named Executive Officers. There were no option exercises during the fiscal year ended December 31, 2018.2020. | | | | | | | | | | | | | | | | Option Awards | | | | | Stock Awards | | | | | Option Awards | | | | | | Stock Awards | | | Name | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting (1) ($) | | | Number of Shares
Acquired on Exercise
(#) | | | Value Realized
on Exercise
($) | | | | | Number of Shares
Acquired on Vesting
(#) | | | Value Realized
on Vesting
($) | | | G. Michael Sievert | | | | — | | | | — | | | | | 360,751 | | | | 32,226,126 | | | John J. Legere | | | — | | | | — | | | | | | 566,573 | | | | 34,028,374 | | | | — | | | | — | | | | | 1,693,132 | | | | 146,626,481 | | | Peter Osvaldik | | | | — | | | | — | | | | | 14,764 | | | | 1,405,606 | | | J. Braxton Carter | | | — | | | | — | | | | | | 153,507 | | | | 9,219,630 | | | | — | | | | — | | | | | — | | | | — | | G. Michael Sievert | | | — | | | | — | | | | | | 179,811 | | | | 10,799,449 | | | | Neville R. Ray | | | — | | | | — | | | | | | 114,052 | | | | 6,849,963 | | | | — | | | | — | | | | | 230,920 | | | | 20,693,345 | | | David A. Miller | | | | — | | | | — | | | | | 75,020 | | | | 6,798,944 | | | Peter A. Ewens | | | | — | | | | — | | | | | 84,372 | | | | 7,684,016 | | | David R. Carey | | | — | | | | — | | | | | | 98,584 | | | | 5,920,955 | | | | — | | | | — | | | | | | 417,653 | | | | 36,891,309 | |
(1) | Included in the amount listed in this column is vesting of deferred RSUs by Mr. Ray in the amount of $187,988 with payment deferred until after retirement.
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2020 2018Non-QualifiedNON-QUALIFIED Deferred CompensationDEFERRED COMPENSATION The following table shows the contributions, earnings and the aggregate balance of total deferrals as of December 31, 2018.2020. | | Name | | Executive Contributions in
Last Fiscal Year (1)($) | | | Aggregate
Earnings in Last
Fiscal Year ($) | | | Aggregate Balance
at Last Fiscal
Year-End(2)($) | | | Executive Contributions
in Last Fiscal Year
($) | | | Aggregate Earnings
in Last Fiscal Year
($) | | | Aggregate Balance
at Last Fiscal Year-End
($) | | | G. Michael Sievert | | | | — | | | | — | | | | — | | | John J. Legere | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | Peter Osvaldik | | | | — | | | | — | | | | — | | | J. Braxton Carter | | | — | | | | (74,839 | ) | | | 2,567,421 | | | | — | | | | 8,785 | | | | 2,988,406 | | G. Michael Sievert | | | — | | | | — | | | | — | | | | Neville R. Ray | | | 187,988 | | | | (385,487 | ) | | | 5,810,246 | | | | — | | | | 1,643,603 | | | | 8,464,916 | | | David A. Miller | | | | — | | | | 116,512 | | | | 1,256,203 | | | Peter A. Ewens | | | | — | | | | — | | | | — | | | David R. Carey | | | 234,147 | | | | (61,348 | ) | | | 837,381 | | | | — | | | | 76,616 | | | | — | |
(1) | | | ⬛ PROXY STATEMENT 2021 | | Of the amounts listed in this column, the following aggregate amounts were reported in the Summary Compensation Table for 2018: Mr. Carey, $234,147.55
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(2) | Of the amounts listed in this column, the following aggregate amounts were reported in the Summary
Executive Compensation Tables in proxy statements for 2016 and 2017: Mr. Carter, $677,066. |
All of the Named Executive Officers are eligible to participate in the Company’snon-qualified deferred compensation plan (the “Deferred Compensation Plan”). However, only Messrs. Carter, Ray, Miller and Carey have elected to do so. Under the terms of the Deferred Compensation Plan, participants are eligible to defer up to 75% of their base salary, 100% of their annual incentive compensation and 100% of annual RSU awards. All amounts attributable to participant deferrals under the Deferred Compensation Plan are fully vested at all times. We did not provide any employer matching or discretionary allocations under the Deferred Compensation Plan for 2018.2020. Participants choose how their deferrals (and their account balances) will be allocated among the national investment funds available under the Deferred Compensation Plan. For 2018,2020, there were 18 funds for deferral of base salary and incentive compensation, which did not include a Company stock fund. Any deferred RSUs would be credited to a Company stock fund. A participant’s account balance under the Deferred Compensation Plan will be distributed in alump-sum when the participant terminates employment, unless termination is due to retirement or disability, in which case the participant can elect annual installments over two to 15 years. For this purpose, “retirement” means termination of employment on or after either (i) the date on which the sum of the participant’s age and years of service equals 65 or (ii) the date on which the participant completes ten years of service. Participants may also elect to have amounts attributable to their deferrals for a particular year distributed (or commence to be distributed) as of a specified date in a lump sum or in annual installments over two to five years, even if they are still employed by the Company on that date. Generally, the specified date for base salary and incentive compensation distribution may not be earlier than the first day of the second year beginning after the year in which such amounts are deferred and for RSUs may not be earlier than the first day of the fourth year beginning after the year in which such amounts are deferred. If a participant’s employment with the Company terminates prior to thein-service distribution date specified by the participant or whilein-service distribution installment payments are being made, then any portions of the participant’s account balances that are subject to specified distribution date elections will be distributed upon termination of employment, as described above. | | | | | 40 | | T-Mobile 2019 Proxy Statement | | |
EXECUTIVE COMPENSATION
If a participant dies before his or her entire interest under the Deferred Compensation Plan has been distributed, his or her remaining interest will be distributed in a lump sum to his or her beneficiary. If a participant’s employment terminates within 24 months following a change in control (as defined in the Company’s 2013 Omnibus Incentive Plan), then all amounts credited to his accounts under the Deferred Compensation Plan will be paid to the participant in a lump sum within 90 days after such termination. Similarly, if a change in control occurs after a participant retires or becomes disabled, any undistributed amounts remaining in such participant’s accounts under the Deferred Compensation Plan will be distributed in a lump sum within 90 days after the change in control. Notwithstanding the foregoing, if a participant is a “specified employee” for purposes of Code Section 409A at the time his or her employment with the Company terminates, then distributions on account of termination of employment will not be made (or commence to be made) prior to the earlier of the participant’s death or thesix-month anniversary of the participant’s termination of employment. Each of the Named Executive Officers is a specified employee for this purpose. Distributions are made in cash or stock, as applicable. The Deferred Compensation Plan is an unfunded plan for tax purposes and for purposes of the Employee Retirement Income Security Act of 1974, as amended. We have established a “rabbi trust” to satisfy our obligations under the Deferred Compensation Plan. Potential Compensation and Benefits upon Qualifying TerminationPOTENTIAL PAYMENTS UPON TERMINATION OR IN CONNECTION WITH A CHANGE IN CONTROL
The following describes potential compensation and benefits that may be made to Named Executive Officers experiencing a qualifying separation from service. To the extent that a Named Executive Officer is eligible for severance benefits under any arrangements below, that person may not receive any duplicative benefits. Potential Payments upon Termination or in Connection with a Change in Control
The followingdiscussion describes and quantifies the estimated amount of potential payments and benefits that would be provided to each of our current Named Executive Officers under the Company’s compensation plans and agreements in the event of a termination of employment and/or change in control of the Company.Company (other than for Messrs. Legere, Carter and Carey, whose employment with the Company ended in April 2020, July 2020 and April 2020, respectively, and whose severance and termination payments and benefits are described below under “—Separation Payments and Benefits to Messrs. Legere, Carter and Carey”).
Our current Named Executive Officers are subject to covenants regarding protection of confidential information, anon-compete and certain other restrictive covenants regarding solicitation of employees or customers for a period through one year (or, in certain cases, eighteen months) after termination of employment. For Mr. Legere,Sievert, this period is two years after termination of employment and foremployment. For Mr. Carey (upon aMiller, upon his retirement, only), this period is the later of one year after his retirement or the last date on which any RSUs and/or PRSUs are paid to Mr. CareyMiller under the CareyMiller Retirement Agreement (as defined and discussed below)., and upon his termination other than for cause, due to resignation for good reason, or due to disability or death, this period is eighteen months after termination of employment pursuant to the Miller Term Sheet. Termination Due to Death or Disability Upon a termination of the applicable executive’s employment due to death or disability, each Named Executive Officer is entitled to receive (i) an unpaid annual incentiveshort-incentive award from the preceding fiscal year (if any); and (ii) a target annual short-term incentive award for the current fiscal year; and (iii)year (or, for Mr. Carter,Sievert, the greater of a prorated portion of his special cash bonus of $2,500,000 (the full amount was paid in March 2019) (discussed above under “Employment Arrangements – Employment Agreement with Mr. Carter”)target annual short-term incentive award and a pro-rated annual short-term incentive award based on actual performance results). In addition, (a) any unearned time-based long-term incentive awards (“LTI awards”) then-held by thesuch Named Executive Officer will become immediately earned and vested, and (b) any performance-based LTIlong-term
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Executive Compensation incentive awards will vest and be paid at target as of the date of the executive’s separation from service. Additionally, with respect to Mr. Miller, pursuant to the Miller Term Sheet, upon a termination of Mr. Miller’s employment due to death or disability that occurs between April 8, 2021, the date on which the Miller Term Sheet was executed, and prior to March 1, 2023, Mr. Miller is entitled to an amount equal to his target Performance Bonus, subject to his or his estate’s timely execution and non-revocation of a release of claims in favor of the Company and his compliance with applicable restrictive covenants. Termination Without Cause or for Good Reason (No Change in Control) UnderMessrs. Sievert, Ray, Miller and Ewens are eligible for severance benefits upon certain terminations of their respective employment arrangements with the Company (prior to the 2018 and 2019 amendments discussed above under “Employment Arrangements”),without “cause,” for “good reason,” or (for Mr. Sievert) upon a termination of the applicable executive’s employment by us without “cause,” by the executive for “good reason” (or, for Mr. Sievert, due to a “constructive termination”) (each, as defined in the applicable employment arrangement), or, in the case of Mr. Legere, due to the expirationCompany-initiated non-renewal of his employment term, each of Messrs. Legere, Sievert and Carter will (subjectas described in more detail below. All such severance benefits are subject to histhe applicable executive’s timely execution andnon-revocation of a release of claims in favor of the Company and for Mr. Legere, his compliance with certain restrictive covenants) becovenants.
Mr. Sievert Under the Sievert Employment Agreement, upon a termination of Mr. Sievert’s employment by us without “cause,” by him for “good reason” (each as defined in the Sievert Employment Agreement), or due to our non-renewal of his then-current employment term, Mr. Sievert is entitled to receive: ∎ | ◾ | alump-sum cash payment equal to two times the sum of his annual base salary and then-current target annual short-term incentive award; |
∎ | | ◾ | his unpaid annual short-term incentive award from the preceding fiscal year (if any); |
∎ | | ◾ | a prorated portion of his annual short-term incentive award for the current fiscal year of termination, based on actual performance; |
∎ | | for Mr. Carter, a prorated portion of his special cash bonus (if not previously paid); |
∎ | | with respect to their LTI awards: |
| | ∎◾ | | For Messrs.if the date of termination occurs after Mr. Sievert has commenced service as our Chief Executive Officer and Carter, (a) accelerated vestingprior to the payment of the next tranche of any time-based LTI awardsRetention Payment, the Retention Payment (as defined and(b) pro-rata vesting of any performance-based LTI awards (subject to adjustment based on actual performance during the applicable performance period) described above); |
| | ∎◾ | | For Mr. Legere, (a) full vesting of any then-outstanding time-based LTIlong-term incentive awards and (b) with respect to any performance-vesting LTIperformance-based long-term incentive awards, (including any PRSUs), such awards will become vested(x) a pro-rata vesting of each performance-based long-term incentive award (based the number of days elapsed between the commencement of the applicable performance period and earned as of the date of terminationtermination) based on actual performance through the termination date, except that the accelerateddate; and (y) pro-rata vesting of Mr. Legere’s Incremental PRSUs, described above, and True-Up PRSUs granted in 2017 willeach performance-based long-term incentive award (based on the portion of the performance period left to be subject to Mr. Legere’s satisfactory participation and cooperation in, and assistance with, succession planning (including his satisfactory and orderly transitioncompleted) at the greater of duties and responsibilities to his successor) after any notice of qualifying termination is provided untiltarget or actual performance through the termination date, with such determination to be made by the Section 16 Subcommittee in its good faith sole discretion; anddate; |
∎ | | ◾ | Company-paid group medical and dental benefits for up to 18 months (for Mr. Legere) or 12 months (for Mr. Carter) following termination.termination; and |
The April 2018 Amendments to the employment arrangements for Messrs. Legere, Sievert and Carter amended the foregoing severance provisions as follows:
∎ | ◾ | Mr. Legere’s severance benefits were updated to include Company-paid office space and executive assistant (not to exceed $25,000 per month in the aggregate) for 18 months following termination (in addition to the payments and benefits outlined above).termination. |
Messrs. Ray, Miller and Ewens Each of Messrs. Ray, Miller and Ewens are party to severance letter agreements with the Company (the “Severance Letter Agreements”), which became effective on April 1, 2020, the date on which the Sprint Combination closed. Each Severance Letter Agreement provides that, upon the applicable executive’s termination of employment without cause or for good reason (each as defined in the Severance Letter Agreement), in either case, within 12 months following the closing of the Sprint Combination, such executive is entitled to receive: ∎ | | ◾ | For Mr. Sievert, (i) in additiona lump-sum cash payment equal to two times the payments and benefits outlined above, he will be entitled to (a) 12 monthssum of Company-paid outplacement services followingthe executive’s annual base salary plus then-current target annual short-term incentive award;
|
| ◾ | a prorated annual short-term incentive award for the year of termination, and (b) based on actual performance; |
| ◾ | any earned, unpaid annual short-term incentive award for the preceding fiscal year (if any); |
| ◾ | full vesting of the executive’s time-based long-term incentive awards; |
| ◾ | vesting of the executive’s performance-based long-term incentive awards based on actual performance through the last trading day immediately preceding the termination date; |
| ◾ | Company-paid group medical and dental benefits forcoverage up to 18 months following termination; and (ii) in lieu of the accelerated vesting described above, |
| ◾ | Company-paid outplacement services for 12 months following termination. |
The severance benefits under the Severance Letter Agreements are in lieu of any other severance benefits (unless such other benefits are more favorable to the applicable executive). The Severance Letter Agreements expired on April 1, 2021 and are no longer in effect. In addition, with respect to Mr. Ray, under the Ray Term Sheet, upon a termination of Mr. Ray’s employment by us without “cause” or by him for “good reason” (each as defined in his Severance Letter Agreement) during the two-year period ending on November 15, | | | | | ⬛ PROXY STATEMENT 2021 | | T-Mobile 2019 Proxy Statement | | 4157 |
EXECUTIVE COMPENSATIONExecutive Compensation
| | he will be entitled to (a) full vesting of any then-outstanding time-based LTI awards and (b) unless the applicable award agreement provides for better treatment,
2021 (excluding a termination that would result in severance paid under his Severance Letter Agreement), Mr. Ray is entitled to receive the same severance payments and benefits that would apply upon a termination under his Severance Letter Agreement, except that the accelerated vesting of his long-term incentive awards described in the Severance Letter Agreement would apply only to his existing or future annual long-term incentive awards (and not to any one-time or special long-term equity awards granted on or after November 15, 2019). Further, with respect to Mr. Miller, pursuant to the Miller Term Sheet, upon a termination of Mr. Miller’s employment by us other than for cause or by him for good reason (each as defined in the Miller Term Sheet) that occurs between April 8, 2021, the date on which the Miller Term Sheet was executed, and prior to March 1, 2023, subject to his timely execution and non-revocation of a release of claims in favor of the Company and his compliance with applicable restrictive covenants, Mr. Miller will be entitled to receive (i)pro-rata vesting of a portion of each performance-based LTI award based on the portion of the performance period completed as of termination and based on actual performance, and(ii) pro-rata vesting of a portion of each performance-based LTI award based on the portion of the performance period left to be completed based on target performance. |
∎ | | For Mr. Carter, the payments and benefits outlined above will also be payable upon the expiration of his employment term (subject to his execution of a release). |
The 2019 Carter Amendment further amended the severance provisions set forth in the Carter Employment Agreement to provide that, if Mr. Carter’s employment terminates on December 31, 2019 due to the expiration of his employment term (and neither the closing nor a public announcement of the termination of the Sprint Combination has occurred prior to such date), Mr. Carter’s LTI awards will be subject to accelerated vesting in accordance with the terms set forth in his SeveranceMiller Retirement Letter Agreement (as defined and discussed below)described below under “Termination Due to Retirement”), rather thanand (ii) if his termination occurs prior to the payment of his Performance Bonus for calendar year 2022, an amount equal to his Performance Bonus for the year of termination (or, if his termination occurs during 2023, the Performance Bonus for 2022), calculated in accordance with the terms ofsame manner as the Carter Employment Agreement.annual short-term incentive award for the applicable year under the Miller Retirement Letter, as described below under “Termination Due to Retirement” (but such Performance Bonus will not, for clarity, be pro-rated).
Termination Due to Retirement On February 19, 2018, theThe Company entered intois party to a letter agreement regarding eligibility for certain payments and benefits with Mr. CareyMiller (the “Carey“Miller Retirement Agreement”). Pursuant to the CareyMiller Retirement Agreement, upon Mr. Carey’sMiller’s voluntary resignation from the Company for any reason on or after September 3, 2018,October 29, 2020 (following at least six months’ prior written notice), he will be entitled to receive (subject to his timely execution andnon-revocation of a release of claims in favor of the Company):
∎ | ◾ | a prorated portion of his annual short-term incentive award for the current fiscal year of termination, based on actual performance through the calendar quarter ending immediately prior to termination (or, for a termination during the first calendar quarter of any year, at target); |
∎ | | ◾ | with respect to his LTIlong-term incentive awards: |
| | ∎◾ | his outstanding and unvested RSUs granted prior to March 25, 2019 shall vest in full; |
| | ◾ | his outstanding and unvested RSUs granted after March 25, 2019 shall remain outstanding and shall continue to vest and be paid in accordance with the terms of the applicable award agreements; and |
| | ∎◾ | | his PRSUs (except for hisone-time special PRSUs granted on February 15, 2018 and his Transaction PRSUs) shall remain outstanding and shall continue to vest and be paid in accordance with the terms of the applicable award agreement, with the number of PRSUs earned based on the lesser of (i) actual performance during the full performance period or (ii) actual performance during the portion of the performance period ending on the termination date;date (provided that if Mr. Miller’s separation also triggers severance under Mr. Miller’s Severance Letter Agreement, then the PRSUs will be treated as provided under his Severance Letter Agreement, discussed above); |
∎ | | ◾ | Company-paid group medical and dental benefits for up to 18 months following termination; and |
∎ | | ◾ | continued eligibility for the Company’s employee mobile service discount program. |
In addition, under the CareyMiller Retirement Agreement, upon Mr. Carey’sMiller’s death or disability following his retirement but prior to the last date on which any RSUs and/or PRSUs become vested in accordance with the CareyMiller Retirement Agreement, his then-outstanding and unvested RSUs and PRSUs will vest in full as of the date of his death or disability, with actual performance for the number of PRSUs earned determined as if Mr. Carey had retired on such date.described above. Termination in Connection with a Corporate Restructuring, Business Combination or Change in Control John J. Legere
Under the Legere Employment Agreement, as amended, upon termination by us without “cause,” by Mr. Legere for “good reason” or due to the Company’snon-renewal of the employment agreement in connection with a change in control, he would be entitled to receive (subject to his timely execution of a release of claims in favor of the Company and compliance with certain restrictive covenants) the benefits described above under “—Termination Without Cause or for Good Reason,” except that: (a) if such termination occurs on or within 24 months after a change in control, his prorated annual short-term incentive award for the current fiscal year will be paid at target; and (b) if such termination occurs on or within 12 months after a change in control, his performance-vesting LTI awards (including any PRSUs) will vest based on the greater of target or actual performance through the change in control.
Named Executive Officers (Other Than Mr. Legere)Continuity Plan
Each of Messrs. Sievert, Carter,Osvaldik, Ray, Miller and CareyEwens participate in the Company’s Executive Continuity Plan, which provides that participants who are terminated within 24 months following a change in control of the Company without cause or by the participant due to a constructive termination or for good reason are entitled to receive (subject to the Named Executive Officer’sapplicable executive’s timely execution andnon-revocation of a release of claims in favor of the Company) two times the sum of (a) the executive’s base salary plus (b) the greater of the executive’s target annual short-term incentive award (i) at the time of termination, or (ii) immediately prior to the change in control, payable in alump-sum amount within 60 days following termination. Any cash severance paid under the Executive Continuity Plan will be reduced by any cash severance payments payable pursuant to any other severance plans or agreements (including amounts payable under the employment arrangements for Messrs. Sievert and Carter)arrangements). Incentive Awards In addition, pursuant to the 2013 Omnibus Incentive Plan and the award agreements governing the LTIlong-term incentive awards for Messrs. Sievert, Carter,Osvaldik, Ray, Miller and Carey,Ewens, if (i) a change in control occurs and outstanding awards are assumed, converted or replaced by the resulting entity, and (ii) on or after the change in control and within one year after the change in control, the executive’s employment | | | 58 | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation or service is terminated by the Company other than for cause or by the executive for good reason, then: (a) all time-based LTIlong-term incentive awards will become fully vested, and (b) all performance-based LTIlong-term incentive awards will vest and be paid at the greater of target or actual performance determined as of the last trading day prior to the change in control. In addition (and unless, with respect to Messrs. Osvaldik, Ray, Miller and Ewens, more favorable treatment is provided under the Executive Continuity Plan,Plan), each such Named Executive Officer’sexecutive’s annual short-term incentive award will vest and be paid at the greater of target or actual performance determined as of the last trading day prior to the change in control. Termination in Connection with the Sprint Combination
In connection with the execution of the Business Combination Agreement, effective as of April 29, 2018, the Company entered into severance letter agreements with Messrs. Carter, Ray and Carey (the “Severance Letter Agreements”). Each Severance Letter Agreement provides that, upon the applicable executive officer’s termination of employment without cause or for good reason, in either case, within 12 months following the first to
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EXECUTIVE COMPENSATION
occur of (i) the closing of the Sprint Combination or (ii) the Company’s public announcement that the Sprint Combination will not close, such executive officer would be entitled to the following: (1) alump-sum cash payment equal to two times the sum of the executive officer’s annual base salary plus then-current target annual incentive award; (2) a prorated annual incentive award for the year of termination, based on actual performance; (3) any earned, unpaid annual incentive award for the preceding fiscal year (if any); (4) full vesting of the executive’s time-based long-term incentive awards; (5) vesting of the executive’s performance-based long-term incentive awards based on actual performance through the termination date; (6) Company-paid medical and dental coverage up to 18 months following termination; and (7) Company-paid outplacement services for 12 months following termination.
As a condition of receiving the severance benefits under the Severance Letter Agreements, the applicable executive officer must execute a release of claims in favor of the Company and continue to comply with certainnon-competition andnon-solicitation restrictions for 18 months following termination (or 12 months if such termination occurs within 12 months following the date on which the Company publicly announces the Sprint Combination will not close). The severance benefits under the Severance Letter Agreements are in lieu of any other severance benefits (unless such other benefits are more favorable to the applicable executive).
Executive Severance Benefit Guidelines Under the Company’s Executive Severance Benefit Guidelines (“Severance Guidelines”), which covers all Named Executive Officers (other than Mr. Sievert), if, as a result of a corporate restructuring or business combination in which a Named Executive Officer is terminated or resigns after being offered a new position that would: (i) result in a greater than 5% reduction in total cash compensation, (ii) require a move to a work location more than 50 miles from the executive’s current work location, or (iii) significantly reduce their duties and responsibilities (including such a change to their existing position), then, in any such case, we will consider providing the applicable executive with the following benefits: (i) alump-sum cash payment of two times the executive’s total target cash (composed of annual salary and target annual bonus); (ii) a prorated annual short-term incentive for the current fiscal year, based on actual performance; (iii) COBRA benefit payments for up to 12 months following termination; and (iv) 12 months of outplacement services valued at $6,500. Any cash severance paid under the Severance Guidelines will be reduced by any cash severance payments payable pursuant to any other severance plans or agreements (including amounts payable under the applicable executive’s employment arrangement and/or the Executive Continuity Plan (as applicable)). “Best Pay” Provisions The employment arrangements for each of Messrs. Legere, Sievert and Carter, as well asRay, the Severance Letter Agreements for Messrs. Ray, Miller and Ewens, and our Executive Continuity Plan include “best pay” provisions under Code Section 280G, pursuant to which any “parachute payments” that become payable to the applicable Named Executive Officerexecutive will either be paid in full or reduced so that such payments are not subject to the excise tax under Code Section 4999, whichever results in the betterafter-tax treatment to the Named Executive Officer.executive. Change in Control (No Termination) Pursuant to ourthe 2013 Omnibus Incentive Plan and award agreements thereunder, in the event of a change in control of the Company in which outstanding awards are not assumed, converted or replaced by the resulting entity, (i) all time-based LTI awards will become vested, (ii) all performance-based LTI awards will be deemed to be satisfied and paid at the greater of target or actual performance as of the last trading day prior to the change in control prorated up to and including the date of the change in control, and (iii) all annual short-term incentive awards will be paid at the greater of target or actual performance as of the last trading day prior to the change in control prorated up to and including the date of the change in control. Definitions For each of theour current Named Executive Officers, “cause” generally has the following meaning: ∎ | ◾ | the executive’s gross neglect or willful material breach of the executive’s principal employment responsibilities or duties; |
∎ | | ◾ | a final judicial adjudication that the participant is guilty of any felony (other than a law, rule or regulation relating to a traffic violation or other similar offense that has no material adverse effect on the Company or any of its affiliates); |
∎ | | ◾ | the executive’s breach of anynon-competition or confidentiality covenant between the participantexecutive and the Company or any affiliate of the Company; |
∎ | | ◾ | fraudulent conduct, as determined by a court of competent jurisdiction, in the course of the executive’s employment with the Company or any of its affiliates; |
∎ | | ◾ | the material breach by the executive of any other obligation that continues uncured for a period of 30 days after notice thereof by the Company or any of its affiliates and that is demonstrably injurious to the Company or its affiliates; and |
∎ | | ◾ | for Mr. Legere,Sievert, his breach of hisnon-solicitation covenant, or his unlawful discrimination, harassment, or retaliation, assault or other violent act toward any employee or third party, or other act or omission that, in each case, in the view of the Board, of Directors, constitutes a material breach of the Company’s written policies or Code of Conduct. |
For Mr. Legere,Sievert, “good reason” is defined in the Sievert Employment Agreement as any of the following: ∎ | ◾ | a material diminution in Mr. Sievert’s annual base compensation,salary, annual performance bonus target STI award, or long-term incentiveannual LTI target value or in the maximum potential amount payable with respect to any annual bonus or long-term incentive bonusSTI award provided for under the LegereSievert Employment Agreement (as amended by the 2018 Legere Amendment);Agreement; |
∎ | | ◾ | a material diminution in Mr. Sievert’s authority, duties or responsibilities, including, without limitation, any change in title or the appointment of any person as a result of which Mr. Legere ceasedSievert ceases to be the Company’s sole Chief Executive Officer provided that it wouldafter May 1, 2020 or Mr. Sievert is not be good reason if, in connection with the sole executive reporting to the full Board after May 1, 2020; |
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Executive Compensation | ◾ | a change in control, Mr. Legere reportedSievert’s reporting relationship such that Mr. Sievert no longer reports directly to (a) prior to May 1, 2020, the current Chief Executive Officer of the Company (Mr. Legere) or (b) after May 1, 2020, the Board of Directors rather than the Chairman of the Board; |
∎ | | a material diminution in the authority, duties or responsibilities of the supervisor to whom Mr. Legere is required to report (including, after May 1, 2020, a requirement that heMr. Sievert report to a corporate officer or employee instead of reporting directly to the Chairman of the Board); |
∎ | | ◾ | a change of 50 miles or greater in the principal geographic location at which heMr. Sievert must perform services;his services under the Sievert Employment Agreement; or |
∎ | | ◾ | any other action or inaction that constitutes a material breach by the Company or its successor company, as applicable, of the Sievert Employment Agreement or any other agreement between Mr. Sievert and the Company or the successor company, as applicable, of any agreement under which Mr. Legere provides services to the Company or the successor company, as applicable. |
For Messrs. Sievert and Carter, “good reason” or “constructive discharge” generally has the same definition as in the Executive Continuity Plan, discussed below, except that it includes:
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EXECUTIVE COMPENSATION
∎ | | for Mr. Sievert, (a) in the event of a change in control, Mr. Sievert does not become the sole Chief Operating Officer of the principal entity resulting from such change in control, (b) any reduction (rather than a material reduction) in total target direct compensation (which consists of base salary, long term incentive and short-term incentive), (c) a change in reporting relationship such that Mr. Sievert would report to anyone other than Mr. Legere or the Board of Directors, (d) in the event of a change in control, Mr. Sievert does not become Chief Executive Officer of the principal entity resulting from such change in control within six months after such change in control, and (e) Mr. Sievert does not become Chief Executive Officer of the principal entity resulting from the Sprint Combination within six months after the earlier of the date on which the closing of the Sprint Combination occurs or the date on which the Company publicly announces that the Sprint Combination will not close for any reason (as determined by the Company in its discretion); and |
∎ | | for Mr. Carter, (a) a reduction by more than five percent (rather than a material reduction) in Mr. Carter’s then-effective total target direct compensation (which consists of his then-effective base salary, short-term incentive award and long-term incentive award) and (b) a change in reporting relationship such that Mr. Carter would report to anyone other than the Chief Executive Officer of the Company or the Board of Directors. In addition to the foregoing, neither the appointment or hiring of a new Chief Financial Officer (or the related change in Mr. Carter’s title) nor the requirement that Mr. Carter engage in any transition duties under his employment agreement will constitute good reason. |
For purposes of the Executive Continuity Plan, “constructive termination” or “good reason” means, with respect to our Named Executive Officers (other than Mr. Legere)Sievert), the occurrence, after a change in control, of any of the following conditions (as modified, for Messrs. Sievert and Carter, by their employment arrangements, as discussed above):conditions: ∎ | ◾ | a material diminution in the participant’s duties, authority or responsibilities; |
∎ | | ◾ | a material reduction in the participant’s base salary, target short-term incentive opportunity, or target long-term incentive opportunity as in effect immediately prior to the change in control, except foracross-the-board salary reductions based on the Company’s and its subsidiaries’ financial performance similarly affecting all or substantially all management employees of the Company and its subsidiaries; |
∎ | | ◾ | a material reduction in the kind or level of qualified retirement and welfare employee benefits from the like kind benefits to which the participant was entitled immediately prior to a change in control with the result that the participant’s overall benefits package is materially reduced without similar action occurring to other eligible comparably situated employees; |
∎ | | ◾ | the relocation of the office at which the participant was principally employed immediately prior to a change in control to a location more than 50 miles from the location of such office, or the participant being required to be based anywhere other than such office, except to the extent the participant was not previously assigned to a principal location and except for required travel on business to an extent substantially consistent with the participant’s business travel obligations at the time of the change in control; or |
∎ | | ◾ | such other event, if any, as is set forth in the participant’s agreement regarding executive continuity benefits. |
For purposes of the Severance Letter Agreements for Messrs. Ray, Miller and Ewens, the Miller Term Sheet, and the Ray Term Sheet, “good reason” has the same meaning as set forth for the Executive Continuity Plan, except that it does not include the trigger set forth under the third bullet above relating to material reductions in the kind or level of qualified retirement and welfare benefits. For each of our Named Executive Officers, “change in control” generally has the meaning set forth in the 2013 Omnibus Incentive Plan. Estimated Payments The following table presents the estimated compensation payable to each of the Company’s Named Executive Officers (other than Messrs. Legere, Carter, and Carey, whose employment with the Company ended in 2020 and whose severance and termination arrangements are described below under “—Separation Payments and Benefits to Messrs. Legere, Carter and Carey”) if a termination of employment and/or change in control (as applicable) had occurred as of December 31, 20182020 under the circumstances described above. The amounts shown with respect to RSUs are based on the closing price of our common stock ($63.61134.85 per share) on December 31, 2018.2020. The estimated compensation is presented in the following benefit categories: ∎ | ◾ | Cash Severance: reflects cash severance (i) in the case of termination in connection with a corporate restructuring or a termination without cause (including, for Messrs. Legere and Carter,Mr. Sievert, ournon-renewal of his then-current employment term) or for good reason before a change in control (x) under the Severance Guidelines, (y) pursuant to the employment arrangementsSievert Employment Agreement, or (z) pursuant to the Severance Letter Agreements with Messrs. Legere, SievertRay, Miller or Carter,Ewens and (ii) in the case of termination without cause or for good reason in connection with or after a change in control, under the Executive Continuity Plan; |
∎ | | ◾ | Time-Based RSUs: market value, as of December 31, 2018,2020, of unvested time-based RSUs that would vest pursuant to the 2013 Omnibus Incentive Plan, related award agreements, the CareyMiller Retirement Agreement, the Severance Letter Agreements with Messrs. Ray, Miller or Ewens and/or respective employment agreement or term sheet;the Sievert Employment Agreement;
|
∎ | | ◾ | Performance-Based RSUs:PRSUs: market value, as of December 31, 2018,2020, of unvested performance-based RSUsPRSUs (assuming performance at target) that would vest pursuant to the 2013 Omnibus Incentive Plan, related award agreements, the CareyMiller Retirement Agreement, the Severance Letter Agreements with Messrs. Ray, Miller or Ewens and/or respective employment agreement or term sheet;the Sievert Employment Agreement;
|
∎ | | ◾ | 20182020 STIP: portion of 2018the 2020 short-term cash incentives that would be paid (i) pursuant to the 2018 STIP, (ii) under the employment arrangements with Messrs. Legere, Sievert or Carter, or (iii) the Carey Retirement Letter;
|
∎ | | Bonus: portion of special cash bonusincentive that would be paid pursuant to (i) the Carter2020 STIP, (ii) the Sievert Employment Agreement, as amended by(iii) the 2018 Carter Amendment;Miller Retirement Agreement or (iv) the Severance Letter Agreements with Messrs. Ray, Miller or Ewens; |
∎ | | ◾ | Medical Coverage: estimated value of payment for continued medical coverage under COBRA pursuant to (i) the terms of our Severance Guidelines, (ii) the employment arrangementsSievert Employment Agreement, (iii) the Miller Retirement Agreement or (iv) the Severance Letter Agreements with Messrs. Legere, SievertRay, Miller or Carter, or (iii) the Carey Retirement Agreement;Ewens; |
∎ | | | 60 | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation | ◾ | Continued Mobile Service Discounts: estimated value of these discounts pursuant to the terms of the CareyMiller Retirement Agreement; |
∎ | | ◾ | Executive Office and Office Assistant: estimated potential value of this service pursuant to the terms under the 2018 Legere Amendment;Sievert Employment Agreement; and |
∎ | | ◾ | Outplacement Services: estimated potential value of this service pursuant to the terms of (i) our Severance Guidelines, or (ii) the Sievert Term Sheet.Severance Letter Agreements with Messrs. Ray, Miller or Ewens. |
The actual amounts that may become payable to our Named Executive Officers can be determined only following the officer’s termination and the conclusion of all relevant incentive plan performance periods. Because the Sprint Combination had not closed or been publicly abandoned as of December 31, 2018, none of the Named Executive Officers would have become entitled to payments under the Severance Letter Agreements upon a qualifying termination on such date and, accordingly, the table below does not include amounts payable pursuant to those arrangements. Except in connection with a retirement by Mr. Carey,Miller, if an executive officer voluntarily leaves the Company (other than for good reason), the executive officer is not entitled to any severance compensation.
| | | | | | | | | | | | | | | | | Name | | Termination in Connection
with Restructuring Before a
Change in Control
($) | | | Termination Without Cause
or for Good Reason in
Connection with or After a
Change in Control
($) | | | Death or Disability
($) | | | | | | G. Michael Sievert | | | | | | | | | | | | | Cash Severance | | | 9,800,000 | | | | 9,800,000 | | | | — | | Time-Based RSUs | | | 20,542,779 | | | | 20,542,779 | | | | 20,542,779 | | Performance-Based RSUs | | | 83,610,506 | | | | 83,610,506 | | | | 83,610,506 | | 2020 STIP | | | 5,600,000 | | | | 5,600,000 | | | | 5,600,000 | | Office & Assistant | | | 450,000 | | | | 450,000 | | | | — | | Medical Coverage | | | 33,577 | | | | 33,577 | | | | — | | Outplacement Services | | | 6,500 | | | | 6,500 | | | | — | | Total Estimated Value | | | 120,043,363 | | | | 120,043,363 | | | | 109,753,285 | | | | | | Peter Osvaldik | | | | | | | | | | | | | Cash Severance | | | 3,750,000 | | | | 3,750,000 | | | | — | | Time-Based RSUs | | | 1,143,663 | | | | 2,446,988 | | | | 2,446,988 | | Performance-Based RSUs | | | 4,234,039 | | | | 7,126,418 | | | | 7,126,418 | | 2020 STIP | | | 1,367,913 | | | | 1,367,913 | | | | 1,367,913 | | Medical Coverage | | | 25,614 | | | | 25,614 | | | | — | | Outplacement Services | | | 6,500 | | | | 6,500 | | | | — | | Total Estimated Value | | | 10,527,729 | | | | 14,723,434 | | | | 10,941,319 | | | | | | Neville R. Ray | | | | | | | | | | | | | Cash Severance | | | 5,550,000 | | | | 5,550,000 | | | | — | | Time-Based RSUs | | | 12,088,359 | | | | 12,088,359 | | | | 12,088,359 | | Performance-Based RSUs | | | 43,760,768 | | | | 61,741,342 | | | | 61,741,342 | | 2020 STIP | | | 2,960,000 | | | | 2,960,000 | | | | 2,960,000 | | Medical Coverage | | | 37,130 | | | | 37,130 | | | | — | | Outplacement Services | | | 6,500 | | | | 6,500 | | | | — | | Total Estimated Value | | | 64,402,756 | | | | 82,383,331 | | | | 76,789,701 | | | | | | David A. Miller* | | | | | | | | | | | | | Cash Severance | | | 3,875,000 | | | | 3,875,000 | | | | — | | Time-Based RSUs | | | 6,366,538 | | | | 6,366,538 | | | | 6,366,538 | | Performance-Based RSUs | | | 19,528,707 | | | | 19,528,707 | | | | 19,528,707 | | 2020 STIP | | | 1,860,000 | | | | 1,860,000 | | | | 1,860,000 | | Medical Coverage | | | 31,760 | | | | 31,760 | | | | — | | Outplacement Services | | | 6,500 | | | | 6,500 | | | | — | | Total Estimated Value | | | 31,668,506 | | | | 31,668,506 | | | | 27,755,246 | | | | | | Peter A. Ewens | | | | | | | | | | | | | Cash Severance | | | 3,262,500 | | | | 3,262,500 | | | | — | | Time-Based RSUs | | | 5,899,688 | | | | 5,899,688 | | | | 5,899,688 | | Performance-Based RSUs | | | 19,141,418 | | | | 19,141,418 | | | | 19,141,418 | | 2020 STIP | | | 1,450,000 | | | | 1,450,000 | | | | 1,450,000 | | Medical Coverage | | | 25,228 | | | | 25,228 | | | | — | | Outplacement Services | | | 6,500 | | | | 6,500 | | | | — | | Total Estimated Value | | | 29,785,334 | | | | 29,785,334 | | | | 26,491,106 | |
| | | | | 44 | | T-Mobile 2019 Proxy Statement | | |
EXECUTIVE COMPENSATION
| | | | | | | | | | | | | Name | | Termination in
Connection with
Restructuring
Before a Change
in Control ($) | | | Termination
Without Cause or
for Good Reason in
Connection with or
After a Change
in Control(1) ($) | | | Death or
Disability ($) | | John J. Legere | | | | | | | | | | | | | Cash Severance | | | 12,000,000 | | | | 12,000,000 | | | | — | | Time-Based RSUs | | | 9,045,596 | | | | 9,045,596 | | | | 9,045,596 | | Performance-Based RSUs | | | 74,118,308 | | | | 74,118,308 | | | | 74,118,308 | | 2018 STIP | | | 6,130,849 | | | | 6,130,849 | | | | 6,130,849 | | Office & Assistant | | | 450,000 | | | | 450,000 | | | | — | | Medical Coverage | | | 10,148 | | | | 10,148 | | | | — | | Outplacement Services | | | 6,500 | | | | 6,500 | | | | — | | Total Estimated Value | | | 101,761,402 | | | | 101,761,402 | | | | 89,294,754 | | J. Braxton Carter | | | | | | | | | | | | | Cash Severance | | | 4,500,000 | | | | 4,500,000 | | | | — | | Time-Based RSUs | | | 5,596,450 | | | | 8,390,668 | | | | 8,390,668 | | Performance-Based RSUs | | | 5,822,968 | | | | 9,052,021 | | | | 9,052,021 | | 2018 STIP | | | 2,182,327 | | | | 2,182,327 | | | | 2,182,327 | | Bonus | | | 2,155,963 | | | | 2,155,963 | | | | 2,155,963 | | Medical Coverage | | | 14,512 | | | | 14,512 | | | | — | | Outplacement Services | | | 6,500 | | | | 6,500 | | | | — | | Total Estimated Value | | | 20,278,720 | | | | 26,301,991 | | | | 21,780,979 | | G. Michael Sievert | | | | | | | | | | | | | Cash Severance | | | 7,200,000 | | | | 7,200,000 | | | | — | | Time-Based RSUs | | | 11,133,531 | | | | 11,133,531 | | | | 11,133,531 | | Performance-Based RSUs | | | 35,774,328 | | | | 35,774,328 | | | | 35,774,328 | | 2018 STIP | | | 3,592,039 | | | | 3,592,039 | | | | 3,592,039 | | Medical Coverage | | | 29,910 | | | | 29,910 | | | | — | | Outplacement Services | | | 6,500 | | | | 6,500 | | | | — | | Total Estimated Value | | | 57,736,307 | | | | 57,736,307 | | | | 50,499,897 | | Neville R. Ray | | | | | | | | | | | | | Cash Severance | | | 5,400,000 | | | | 5,400,000 | | | | — | | Time-Based RSUs | | | 2,871,207 | | | | 5,507,227 | | | | 5,507,227 | | Performance-Based RSUs | | | 9,261,889 | | | | 24,150,045 | | | | 24,150,045 | | 2018 STIP | | | 2,590,177 | | | | 2,590,177 | | | | 2,590,177 | | Medical Coverage | | | 21,875 | | | | 21,875 | | | | — | | Outplacement Services | | | 6,500 | | | | 6,500 | | | | — | | Total Estimated Value | | | 20,151,648 | | | | 37,675,824 | | | | 32,247,448 | | David R. Carey | | | | | | | | | | | | | Cash Severance | | | 3,487,500 | | | | 3,487,500 | | | | — | | Time-Based RSUs | | | 2,123,450 | | | | 4,233,818 | | | | 4,233,818 | | Performance-Based RSUs | | | 6,816,865 | | | | 15,256,350 | | | | 15,256,350 | | 2018 STIP | | | 1,567,428 | | | | 1,567,428 | | | | 1,567,428 | | Medical Coverage | | | 15,021 | | | | 15,021 | | | | — | | Outplacement Services | | | 6,500 | | | | 6,500 | | | | — | | Total Estimated Value | | | 14,016,764 | | | | 24,566,617 | | | | 21,057,595 | |
(1)* | Upon Mr. Carey’sMiller’s voluntary resignation from the Company as of December 31, 2018,2020 (following at least six months’ prior written notice), under the terms of the Miller Retirement Agreement, he would have been entitled to: (i) 20182020 pro-rata STIP (valued at $1,567,428$1,860,000 reflecting full year corporate performance (See “-Annual(see “—Annual Short-Term Incentives” for more information)), (ii) accelerated or continued vesting of his RSUs following retirement (valued at $4,233,818$6,366,538 reflecting market value of all outstanding RSUs as of December 31, 2018)2020), (iii) continued vesting of |
| | | ⬛ PROXY STATEMENT 2021 | | 61 |
Executive Compensation | his PRSUs except for his Special and Transaction PRSUs following retirement (valued at $6,370,351$19,528,707 reflecting market value of all such included outstanding PRSUs as of December 31, 2018)2020), (iv) company-paidCompany-paid group medical and dental benefits for up to 18 months following termination (valued at $31,760), and (v) continued eligibility for the Company’s employee mobile service discount program (the cost of which depends on a variety of factors, including the future cost and duration of Mr. Carey’sMiller’s mobile phone plan, and cannot be quantified at thethis time). |
| | | | | | | T-Mobile 2019 Proxy Statement | | 45 |
EXECUTIVE COMPENSATION
In addition to the items described above, the Named Executive Officers are entitled to receive amounts earned during the term of employment through the date of termination. These amounts, which are not included in the table, include earned base salary, vested awards under our long-term incentive awards, any vested entitlements under our applicable employee benefit plans, including vested 401(k) plan balances, and rights to continuation of coverage under our group medical plans at the Named Executive Officer’s expense. Separation Payments and Benefits to Messrs. Legere, Carter and Carey Mr. Legere. In connection with Mr. Legere’s termination of employment with the Company as of April 1, 2020, he became eligible to receive certain severance payments and benefits consisting of: (i) a lump sum cash payment equal to $14,045,616.44 (representing (i) two times the sum of his then-current base salary plus his then-current annual short-term incentive target, (ii) a Pay Ratiopro-rated short-term incentive for 2020, and (iii) a lump-sum payment of $450,000 in lieu of monthly payments related to an office and assistant), (ii) accelerated vesting of outstanding equity awards (with performance-based awards earned at actual performance) (valued at approximately $122,449,715), and (iii) up to 18 months of COBRA continuation (valued at approximately $11,102). The Company also reimbursed Mr. Legere for $39,453 in costs and expenses incurred by him in connection with the collection of his personal belongings from the Company’s Bellevue, Washington offices and the winding up of his affairs in the greater Bellevue, Washington area. Mr. Carter. In connection with Mr. Carter’s retirement in July 2020, he became eligible to receive certain payments and benefits consisting of: (i) a one-time cash bonus in the amount of $7,525,000, (ii) up to 18 months of COBRA continuation (valued at approximately $24,271), and (iii) continued participation in the Company’s employee mobile service discount program (the cost of which depends on a variety of factors, including the future cost and duration of service and cannot be quantified at this time). In addition, we entered into a consulting agreement with Mr. Carter upon his termination of employment with us, pursuant to which he provided consulting services to us through December 31, 2020 in exchange for a consulting fee equal to $210,000 per month. Mr. Carey. In connection with Mr. Carey’s termination of employment with the Company in April 2020, he became eligible to receive certain severance payments and benefits consisting of: (i) a cash payment equal to $4,403,524.59, consisting of (x) two times the sum of his then-current annual base salary plus his then-current annual short-term incentive target and (y) a pro-rated short-term incentive for 2020; (ii) up to 18 months of Company-paid COBRA continuation (valued at approximately $24,823); (iii) outplacement counseling services for up to 12 months (valued at approximately $6,500); and (iv) accelerated vesting of outstanding equity awards (with performance-based awards earned at actual performance) (valued at approximately $24,757,833). Upon his departure, we also entered into a consulting agreement with Mr. Carey, pursuant to which we engaged him as a consultant (providing up to five days of services per month) for the 12-month period following his termination (unless earlier terminated by either party) in exchange for a consulting fee equal to $41,677 per month. If the Company terminates the consulting relationship without “cause” (as defined in the consulting agreement) prior to the end of the 12-month consulting period, then the Company will pay to Mr. Carey the aggregate amount of the consulting fee that would have been payable to him over the remainder of the consulting period. PAY RATIO As required by Section 953(b) of the Dodd-Frank Act and Item 402(u) of RegulationS-K, we are providing the following information regarding the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Legere,Sievert, our Chief Executive Officer. We have calculated the median of our employees’ 20182020 total annual compensation (excluding our Chief Executive Officer) to be $59,653. Our$63,949. We experienced a Chief Executive Officer’s 2018Officer transition effective April 1, 2020 and, as permitted by Item 402(u), for purposes of calculating our 2020 pay ratio, we used the total annual 2020 compensation of Mr. Sievert, who was the Chief Executive Officer serving in such position on the date we identified our median employee. Pursuant to the Sievert Employment Agreement, Mr. Sievert’s 2020 compensation was effective as of January 1, 2020, and did not increase when he was appointed Chief Executive Officer on April 1, 2020. Accordingly, Mr. Sievert’s total annual compensation for 2020 for purposes of calculating our pay ratio for 2020, as set forth in the 20182020 Summary Compensation Table above (adjusted to include his employer-paid health benefits with respect to 2018)2020), was $66,543,571. As a result, the$54,931,184. The estimated ratio of the total compensation of Mr. LegereSievert to the median of the annual total compensation of our employees (other than the Chief Executive Officer)Mr. Sievert) was 1,116859 to 1. We believe this pay ratio is a reasonable estimate calculated in a manner consistent with applicable rules of the Securities and Exchange Commission. This information is being provided for compliance purposes. Neither the Compensation Committee nor management of the Company used the pay ratio measure in making compensation decisions. TheWe believe that the total annual compensation for our Chief Executive OfficerMr. Sievert was atypically high in 20182020 due to Mr. Legere’shis receipt of a specialone-time equity award his Transaction PRSUs(the Sievert Special PRSUs) with a target value of $20 million and a special one-time cash award of $3.5 million pursuant to the Sievert Employment Agreement in connection with his appointment to Chief Executive Officer on April 1, 2020. If the Sprint Combination (see page 32 for details). If Mr. Legere’s Transaction PRSUSievert Special PRSUs and one-time cash award isare removed from this calculation, his annualized total compensation
for 2018,2020, as adjusted to include his employer-paid health benefits with respect to 2020, would be approximately $22.4 million$24,946,124 and would result in a ratio of 376: | | | 62 | | PROXY STATEMENT 2021 ⬛ |
Executive Compensation 390:1. We believe that this reduced total annual compensation amount for Mr. Sievert, and the resulting lower pay ratio, would provide a more accurate picture of the total annual compensation of our Chief Executive Officer in the ordinary course of business andcompared to the annual total compensation of our employees.median employee. WeThe Sprint Combination closed on April 1, 2020 and, as a result, our employee population increased in 2020. As permitted by Item 402(u) of Regulation S-K, we omitted in the determination of our median employee for 2020 approximately 22,426 Sprint employees that became T-Mobile employees as a result of the Sprint Combination. After taking into account the foregoing exclusions, we identified the median employee by preparing a listing of all 51,90054,739 individuals (excluding our Chief Executive Officer)Mr. Sievert) who were employed by us on December 31, 2018,2020, the last day of the calendar year, and examining the 20182020 total compensation paid to each such individual as reflected in our payroll records for 2018.2020. We included all such employees (other than the Chief Executive Officer)Mr. Sievert), whether employed on a full-time, part-time, or seasonal basis who received a paycheck in the final pay period of the year. We did not make any assumptions, adjustments, or estimates with respect to total compensation paid, and we did not annualize the compensation for any employees that were not employed by us for all of 2018.2020. We believe the use of total compensation paid for all employees as reflected in our payroll records is a consistently applied compensation measure due to our large part-time, retail and customer service employee population and practice of granting annual equity awards across our broad employee base.
Using the method described above, we identified a small sample of 1813 employees, consisting of the median employee and 1712 other employees whose gross pay was very close to the median employee’s gross pay (“median group”). We then calculated annual total compensation for such employees using the same methodology we use for our Named Executive Officers as set forth in the 20182020 Summary Compensation Table in this proxy statement, taking into account employer-paid costs for 20182020 health benefits, and selected the median employee from this median group. We believe that our median employee’s compensation reasonably reflects the actual annual compensation of our employees generally in terms of realized pay and benefits. EQUITY COMPENSATION PLAN INFORMATIONEquity Compensation Plan Information
The following table provides information as of December 31, 2018,2020, with respect to outstanding equity awards and shares available for future issuance under our equity compensation plans. | | Plan Category | | Number of Securities to
be Issued Upon Exercise of Outstanding Options,
Warrants and Rights (#) (a) | | Weighted Average
Exercise Price of
Options, Warrants
and Rights ($) (b) | | | Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))(#) (c) | | | Number of
Securities to Be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights (#)
(a) | | | Weighted
Average
Exercise
Price of
Options,
Warrants and
Rights ($)
(b) | | | Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities
Reflected in
Column (a))(#)
(c) | | Equity Compensation Plans Approved by Stockholders | | | | | | | 27,838,984 | (5) | | | Equity Compensation Plans Approved by Stockholders: | | | | | | | | 17,394,006 | 4 | | Stock Options | | | 284,811 | (1) | | $ | 14.58 | | | | — | | | | — | 2 | | | — | 3 | | | — | | RSUs | | | 14,862,189 | (2)(3) | | — | (4) | | | — | | | Equity Compensation Plans Not Approved by Stockholders | | | — | | | | — | | | | — | | | | Restricted Stock Units | | | | 11,444,017 | 2 | | | — | 3 | | | — | | | Equity Compensation Plans Not Approved by Stockholders:1 | | | | — | | | | — | | | | 11,706,566 | 7 | | Stock Options | | | | 309,919 | 5 | | | $51.77 | 6 | | | — | | | Restricted Stock Units | | | | 1,827,703 | 5 | | | — | 6 | | | — | | | Total | | | 15,147,000 | | | $ | 14.58 | (4) | | | 27,838,984 | (5) | | | 13,581,639 | | | | $51.77 | | | | 29,100,572 | 8 |
(1)1 | Granted underThe MetroPCS Communications, Inc. 2010 Equity Incentive Plan, the Amended and Restated MetroPCS Communications, Inc. 2004 Equity Incentive Compensation Plan, the MetroPCS Communications, Inc. 2010 Equity Incentive Compensation Plan, and the Layer3 TV, Inc. 2013 Stock Plan.Plan, the Sprint Corporation 2007 Omnibus Incentive Plan, the Sprint Corporation 1997 Long-Term Stock Incentive Program and the 2015 Plan were assumed by the Company in connection with prior mergers or other acquisitions and have not been approved by T-Mobile’s stockholders. With the exception of the 2015 Plan, no further awards may be granted under any of these plans.
|
(2)2 | GrantedRepresents the number of underlying shares of common stock associated with outstanding options or RSUs and PRSUs, as applicable, granted under the 2013 Omnibus Incentive Plan including 354,459 shares of restricted shares issued in connection with the acquisition of Layer3 TV, Inc. (“Layer3”) pursuant to that certain Agreement and Plan of Merger, by and among the subsidiary of the Company, Layer3 and certain other parties named therein.(with PRSUs calculated assuming target performance).
|
(3)3 | Includes performance-basedRepresents the weighted-average exercise price of options outstanding under the 2013 Plan. RSUs assuming target performance.
|
(4) | RSUsand PRSUs do not have an exercise price and are not included in the weighted average exercise price. The weighted average exercise price is also determined without considering outstanding rights under the Company’s ESPP.
|
(5)4 | As of December 31, 2018,Represents the number of securities remainingshares available for future issuance under stockholder approved equity compensation plans as of December 31, 2020, which is comprised of 13,140,148 shares under the 2013 Omnibus Incentive Plan was 25,485,241 and 4,253,858 shares subject to outstanding rights under the ESPP was 2,353,743 (of which 1,172,5111,272,253 were purchased on March 31, 20192021 for the offering period that included December 31, 2018)2020).
|
| 5 | Represents the number of underlying shares of common stock associated with outstanding options, RSU and PRSUs, as applicable, granted under the Sprint Corporation Amended and Restated 2015 Omnibus Incentive Plan (with PRSUs calculated assuming target performance). In addition, to610,366 shares of common stock may be issued upon the exercise of outstanding options, RSUs theand PRSUs (calculated assuming target performance) under our other non-stockholder approved equity compensation plans as follows: (i) MetroPCS Communications, Inc. |
| | | ⬛ PROXY STATEMENT 2021 | | 63 |
Executive Compensation | 2010 Equity Incentive Plan, 56,884 shares; (ii) Amended and Restated MetroPCS Communications, Inc. 2004 Equity Incentive Compensation Plan, 21,569 shares; (iii) Layer3 TV, Inc. 2013 Stock Plan, 15,086 shares; (iv) Sprint Corporation 2007 Omnibus Incentive Plan, authorizes515,237 shares; and (v) Sprint Corporation 1997 Long-Term Stock Incentive Program, 1,590 shares. |
| 6 | Represents the awardweighted-average exercise price of stock options stock appreciationoutstanding under the Sprint Corporation Amended and Restated 2015 Omnibus Incentive Plan. RSUs and PRSUs do not have an exercise price and are not included in the weighted average exercise price. The weighted average exercise price of outstanding options (excluding, for clarity, RSUs and PRSUs) granted under our other non-stockholder approved equity compensation plans (the MetroPCS Communications, Inc. 2010 Equity Incentive Plan, the Amended and Restated MetroPCS Communications, Inc. 2004 Equity Incentive Compensation Plan, the Layer3 TV, Inc. 2013 Stock Plan, and the Sprint Corporation 2007 Omnibus Incentive Plan) is $51.77. |
| 7 | Represents the number of shares available for future issuance under the 2015 Plan as of December 31, 2020. |
| 8 | Represents the total number of shares available for future issuance under our equity compensation plans as of December 31, 2020, which is comprised of 13,140,148 shares under the 2013 Plan, 11,706,566 shares under the 2015 Plan, and 4,253,858 shares subject to outstanding rights restricted stock and other stock-based awards. under the ESPP (of which 1,272,253 were purchased on March 31, 2021 for the offering period that included December 31, 2020). |
| The ESPP allows eligible employees to purchase shares at 85% of the lower of the fair market value on the first or last trading day of thesix-month offering period. Although our ESPP includes an annual automatic increase of the number of shares available under the plan, since adoption of the plan in 2014, the Compensation Committee has determined that no additional shares were necessary to be added to the plan. Pursuant to the terms of our ESPP, the number of shares available for issuance under the ESPP will automatically increase each year on the first day of our fiscal year in an amount equal to the lesser of (i) 5,000,000 shares and (ii) such smaller number as determined by the Compensation Committee, if any. Since the adoption of the ESPP in 2014, the Compensation Committee has determined that no additional shares were necessary to be added to the ESPP (and, accordingly, these automatic increases have not occurred in past years); however, on each of January 1, 2020 and January 1, 2021, the shares reserved for issuance pursuant to the ESPP were automatically increased by 5,000,000. |
SPRINT CORPORATION AMENDED AND RESTATED 2015 OMNIBUS INCENTIVE PLAN In connection with the closing of the Sprint Combination, T-Mobile assumed the 2015 Plan and may grant awards covering T-Mobile common stock under the 2015 Plan. The material terms of the 2015 Plan are described below: Administration. The 2015 Plan is administered by the Compensation Committee, which has the authority to interpret, construe and make determinations regarding any provision of the 2015 Plan and any award granted thereunder. In addition, certain administrative duties may be delegated to the Company’s officers, directors or advisors, subject to limitations contained in the 2015 Plan. Share Reserve. As of December 31, 2020, the maximum number of shares of our common stock which may be granted under the 2015 Plan was 11,706,566. If any award granted under the 2015 Plan expires, is forfeited or otherwise terminates without being fully exercised, or is settled in cash, such shares will again be available for grant under the 2015 Plan. Shares of common stock tendered or withheld for the payment of the exercise price of an award, or to satisfy any applicable withholding taxes upon exercise, vesting or payment of an award, will not again be available for issuance under the 2015 Plan. Eligibility. Employees, directors, consultants and other service providers who were engaged by Sprint and its subsidiaries prior to the closing of the Sprint Combination or were hired by us following the closing of the Sprint Combination are eligible to receive awards under the 2015 Plan. Awards. We may grant awards of stock options (including incentive stock options (as defined in Code Section 422) (“ISOs”) and non-qualified stock options), appreciation rights, RSUs, restricted stock, performance shares, performance units, and other stock-based or cash-based awards under the 2015 Plan. Subject to adjustment as described in the 2015 Plan, no individual may be granted stock options (or other awards with rights which are substantially similar to stock options) for more than 5,000,000 shares of common stock in any fiscal year. | • | Stock Options and Appreciation Rights. Stock options are rights to purchase shares of common stock upon the exercise thereof at a fixed exercise price that is set on the grant date. Appreciation rights generally entitle their holder, upon exercise, to receive an amount in cash or shares equal to the appreciation of the shares subject to the award between the grant date and exercise date. Stock options granted under the 2015 Plan may be ISOs or non-qualified stock options. In no event may a stock option have a term extending beyond the tenth anniversary of the date of grant (or the fifth anniversary of the date of grant for ISOs granted to certain significant stockholders). The exercise price of any stock option or appreciation right granted under the 2015 Plan may not be less than 100% of the fair market value of the shares of common stock underlying the option on the applicable date of grant (or 110% in the case of ISOs granted to certain significant stockholders). |
| • | RSUs. An RSU represents the right to receive one share of common stock (or its fair market value in cash) at a future date upon the satisfaction of specific conditions set forth in the applicable award agreement. |
| • | Other Awards. Restricted stock is an award of nontransferable shares of our common stock that are subject to certain vesting conditions and other restrictions. Performance shares and performance units are awards that become payable, in cash or shares, upon the satisfaction of specified performance objectives set forth in the applicable award agreement. Other stock or cash-based awards are awards of cash, fully vested shares of our common stock and other awards valued wholly or partially by referring to, or otherwise based on, shares of our common stock. |
Terms and Conditions of Awards. Each award is evidenced by an award agreement specifying the applicable terms and conditions (including vesting conditions and any terms and conditions related to forfeiture and termination of service) of such award, which are determined by the Compensation Committee at the time of grant. Except as set forth in an award agreement, unvested awards are forfeited without payment upon a participant’s termination of service. Adjustments; Change in Control. In the event of certain changes in our capital structure, including any stock dividend, stock split, combination of shares, recapitalization or other change in the Company’s capital structure, or any merger, consolidation, spin-off, split-off, spin-out, reorganization, or other corporate transaction or event having a similar effect, the Board may adjust outstanding | | | | | 4664 | | T-Mobile 2019 Proxy Statement | | PROXY STATEMENT 2021 ⬛ |
Security Ownership of Principal Stockholders and ManagementExecutive Compensation
awards under the 2015 Plan and the share limit under the 2015 Plan to prevent dilution or enlargement of the rights under the 2015 Plan. Unless otherwise provided by the Compensation Committee, if there is a “change in control” of the Company (as defined in the 2015 Plan) and the resulting entity does not assume, convert or replace awards outstanding under the 2015 Plan, such awards will become fully vested and all restrictions thereon will lapse, with any performance objectives deemed satisfied at target level. If the resulting entity assumes, converts or replaces such outstanding awards, any applicable performance objectives will be deemed attained at target level and such awards will become fully vested upon the participant’s involuntary termination of service without cause or resignation with good reason, in either case, within 18 months following the change in control (or within six months prior to the change in control in certain circumstances). Notwithstanding the foregoing, in the event of a change in control, the Board may cancel and cash-out outstanding options upon a change in control. 280G Cutback. The 2015 Plan contains a Code Section 280G “cutback” provision pursuant to which any “parachute payments” (including accelerated vesting of awards under the 2015 Plan) that become payable to a participant will be reduced so that such payments are not subject to the excise tax under code Section 4999 (except as otherwise provided in an agreement between the participant and the Company). Transferability; Clawback; Recoupment. Generally, awards granted under the 2015 Plan are not transferable except by will or the laws of descent and distribution, or as otherwise permitted by the Board or the Compensation Committee. All awards granted under the 2015 Plan are subject to deduction, forfeiture, recoupment or similar requirement in accordance with any clawback policy that may be implemented by the Company from time to time or any other agreement or arrangement with a grantee. In addition, to the extent set forth in an award agreement, a participant may be required to forfeit, return or repay to the Company (as applicable) his or her awards or shares acquired pursuant to awards (or the fair market value thereof, if such shares are disposed of) if the Board or the Compensation Committee determines that the participant has engaged in any detrimental activity (as defined in the 2015 Plan) during his or her service with the Company or a subsidiary thereof or within a specified period thereafter. Amendment and Termination. The 2015 Plan will automatically terminate on the tenth anniversary of the date the 2015 Plan became effective, unless earlier terminated. Our Board may amend, suspend or terminate the 2015 Plan at any time; however, except in connection with certain changes in capital structure, stockholder approval is required for any amendment that would (i) materially increase the benefits accruing to participants under the 2015 Plan, (ii) materially increase the number of shares of common stock which may be issued thereunder, (iii) materially modify the requirements for participation in the 2015 Plan, or (iv) amend any outstanding options to reduce the exercise price thereof, cancel any options in exchange for cash or another award with a lower exercise price, or otherwise “reprice” options, and any amendment that otherwise requires stockholder approval under applicable law or the rules of the applicable stock exchange. In addition, except in connection with certain changes in capital structure, no amendment may materially impair the rights of any participant without his or her consent. | | | ⬛ PROXY STATEMENT 2021 | | 65 |
The following table sets forth information, as of March 31, 2019,2021, regarding the beneficial ownership of our common stock by: ∎ | ◾ | | each of our directors;directors and director nominees; |
∎ | ◾ | | each of the Named Executive Officers; |
∎ | ◾ | | all of our directors and executive officers as a group; and |
∎ | ◾ | | each person known by us to beneficially own more than 5% of the outstanding shares of our common stock. |
The beneficial ownership information has been presented in accordance with SEC rules and is not necessarily indicative of beneficial ownership for any other purpose. Unless otherwise indicated below and except to the extent authority is shared by spouses under applicable law, to our knowledge, each of the persons set forth below has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by him or her. The number of shares of common stock used to calculate each listed person’s percentage ownership of each such class includes the shares of common stock underlying options or other convertible securities held by such person that are exercisable or vest within 60 days after March 31, 2019.2021. | | | | | | | | | | | | | | Common Stock Beneficially Owned | | | | | | | Number | | | Percentage | | | | | Directors, Nominees and Named Executive Officers (1) | | | | | | | | | David A. Carey | | | 226,795 | | | | * | | J. Braxton Carter | | | 211,601 | | | | * | | Srikant M. Datar (2) | | | 28,782 | | | | * | | Lawrence H. Guffey | | | 20,782 | | | | * | | Timotheus Höttges | | | — | | | | * | | Christian P. Illek | | | — | | | | * | | Bruno Jacobfeuerborn | | | — | | | | * | | Raphael Kübler | | | ��� | | | | * | | Thorsten Langheim | | | — | | | | * | | John J. Legere | | | 1,673,089 | | | | * | | Neville R. Ray(3) | | | 272,743 | | | | * | | G. Michael Sievert | | | 405,743 | | | | * | | Olaf Swantee | | | — | | | | * | | Teresa A. Taylor | | | 20,782 | | | | * | | Kelvin R. Westbrook | | | 20,782 | | | | * | | All directors and executive officers as a group (19 persons) | | | 3,421,265 | | | | * | | Beneficial Owners of More Than 5%: | | | | | | | | | Deutsche Telekom AG(4) Friedrich-Ebert-Alle 140 53113 Bonn, Germany | | | 538,590,941 | | | | 63.0 | % |
| | | | | | | | | | | | | | Common Stock Beneficially Owned | | | | | Number | | | Percentage | | | | | Directors, Nominees and Named Executive Officers1 | | | | | | | | | | | | David A. Carey2 | | | 357,714 | | | | * | | | | | J. Braxton Carter2 | | | 25,618 | | | | * | | | | | Marcelo Claure | | | 7,034,791 | 3 | | | * | | | | | Srikant M. Datar4 | | | 35,767 | | | | * | | | | | Peter A. Ewens | | | 82,827 | | | | * | | | | | Lawrence H. Guffey | | | 28,367 | | | | * | | | | | Timotheus Höttges | | | — | | | | * | | | | | Bavan M. Holloway | | | — | | | | * | | | | | Christian P. Illek | | | — | | | | * | | | | | Raphael Kübler | | | — | | | | * | | | | | Thorsten Langheim | | | — | | | | * | | | | | John J. Legere2 | | | 2,668,797 | | | | * | | | | | Dominique Leroy | | | — | | | | * | | | | | Peter Osvaldik | | | 37,454 | | | | * | | | | | David A. Miller | | | 140,392 | | | | * | | | | | Neville R. Ray5 | | | 389,252 | | | | * | | | | | G. Michael Sievert | | | 669,379 | | | | * | | | | | Teresa A. Taylor | | | 28,222 | | | | * | | | | | Omar Tazi | | | — | | | | * | | | | | Kelvin R. Westbrook | | | 27,692 | | | | * | | | | | Michael Wilkens | | | — | | | | * | | | | | All directors, director nominees, and executive officers as a group (19 persons) | | | 8,583,928 | | | | * | | | | | Beneficial Owners of More Than 5%: | | | | | | | | | | | | Deutsche Telekom AG6 Friedrich-Ebert-Alle 140 53113 Bonn, Germany | | | 649,882,564 | | | | 52.1 | % | | | | SoftBank Group Corp.7 1-9-1 Higashi-Shimbashi, Minato-ku, Tokyo, 105-7303 Japan | | | 106,291,623 | | | | 8.5 | % |
| | | 66 | | PROXY STATEMENT 2021 ⬛ |
Security Ownership of Principal Stockholders and Management (1)1 | Unless otherwise indicated, the address of each person is c/oT-Mobile US, Inc., 12920 SE 38th Street, Bellevue, Washington 98006. |
(2)2 | Beneficial ownership information for the Company’s former executive officers, Messrs. Legere, Carter and Carey, is as of April 1, 2020, the most recent date for which information is available. Messrs. Legere, Carter and Carey ceased to be executive officers of the Company as of April 1, 2020, July 1, 2020 and April 13, 2020, respectively. |
| 3 | Includes 8,0005,000,000 shares of common stock held indirectly by Claure Mobile, which are subject to a voting proxy (the “Claure Proxy”) pursuant to the Claure Proxy Agreement, pursuant to which Claure Mobile has agreed to vote such shares in the manner directed by Deutsche Telekom. As a result, Mr. Claure and Claure Mobile do not have voting power with respect to such 5,000,000 shares of common stock. The remaining 2,034,791 shares of common stock held by Mr. Claure are pledged to secure a line of credit with an unrelated third-party bank, which pre-dated the Sprint Combination. Mr. Claure has committed to unwind the pledge by December 31, 2024. |
| 4 | Includes 8,200 shares of common stock held by Datar Investment LLC and 13,42413,724 shares held by Safari LLC. Mr. Datar is aco-manager of Datar Investment LLC and Safari LLC and has shared voting and investment power over the securities held by these entities. |
(3)5 | Includes 6,2509,380 shares of common stock from vested RSU’sRSUs that have been deferred. |
(4)6 | According to the Schedule 13D/A filed by Deutsche Telekom on April 29, 2018,October 6, 2020, reflecting ownership of 538,590,941 shares of common stock as of April 29, 2018. The shares are held of record by Deutsche Telekom Holding B.V., which is a direct wholly owned subsidiary ofT-Mobile Global Holding GmbH, which is a direct wholly owned subsidiary ofT-Mobile Global Zwischenholding GmbH, which in turn is a direct wholly owned subsidiary of Deutsche Telekom, over which shares each of the foregoing entities claims sole voting and dispositive power. Also includes (i) 106,291,623 shares of common stock held by Delaware Project 6 L.L.C. (“Project 6 LLC”), a wholly owned subsidiary of SoftBank, which are subject to a voting proxy (the “SoftBank Proxy”) pursuant to the SoftBank Proxy Agreement, pursuant to which SoftBank has agreed to vote such shares in the manner directed by Deutsche Telekom (with respect to 101,491,623 of which shares Deutsche Telekom has call options that can be exercised at any time prior to June 22, 2024) and (ii) 5,000,000 shares of common stock held by Claure Mobile, which are subject to the Claure Proxy, pursuant to which Claure Mobile has agreed to vote such shares in the manner directed by Deutsche Telekom. |
| 7 | According to the Schedule 13D/A filed by SoftBank on October 6, 2020, reflecting sole dispositive power with respect to 106,291,623 shares of common stock. The shares are held directly by Project 6 LLC, a wholly owned subsidiary of SoftBank. SoftBank has entered into the SoftBank Proxy pursuant to which SoftBank has agreed to vote any shares beneficially owned by SoftBank in the manner directed by Deutsche Telekom. As a result, SoftBank does not have voting power with respect to any such shares of common stock. |
| | | | | ⬛ PROXY STATEMENT 2021 | | T-Mobile 2019 Proxy Statement | | 4767 |
Transactions with Related Persons and Approval
RELATED PERSON TRANSACTIONSRelated Person Transactions
Since the Metro Combination, we have not beenWe are a participant in anya number of related person transactions (as defined in the Related Person Transaction Policy described below) other than as described below in “Transactions with Deutsche Telekom.” We are party to a number of related person transactions with our majority stockholder,significant stockholders, Deutsche Telekom and itsSoftBank, and their respective affiliates. These transactions include important financing arrangements and commercial arrangements pursuant to which we obtain or provide various services and/or license intellectual property or technology. EachAs noted below, certain transactions with Deutsche Telekom that occurred before the Metro Combination and certain transactions with SoftBank that occurred before the Sprint Combination were not required to be approved in accordance with our Related Person Transaction policy as Deutsche Telekom or SoftBank, as applicable, did not qualify as a related person at the time such transactions were entered into. Otherwise, each of the related person transactions with Deutsche Telekom or itsSoftBank or their respective affiliates
described below that were entered into from and after the consummation of the Metro Combination was reviewed and approved by the Audit Committee in accordance with our currentthen-current Related Person Transaction Policy (the “Related Person Transaction Policy”), which includes consideration ofPolicy. The Audit Committee considered, among other things, whether the terms areof each transaction were comparable to those generally available inarm’s-length transactions with unaffiliated third parties and whether the related person transaction is consistent with the best interests of the Company. All factors that are considered by the Audit Committee are described below.
RELATED PERSON TRANSACTION POLICYRelated Person Transaction Policy
Under the Company’s written Related Person Transaction Policy, any proposed or existing transaction, arrangement or relationship involving a director, director nominee, executive officer, or a member of the immediate family of any of the foregoing, or a greater than 5% owner of our stock (a “related person”), must be reviewed by our General Counsel to determine whether such transaction is a related person transaction. A “related person transaction” is any transaction, arrangement or relationship or any series of transactions, arrangements or relationships in which: ∎ | ◾ | | the Company, or any of its subsidiaries, is, was or will be a participant; |
∎ | ◾ | | the aggregate amount involved exceeds, or may be expected to exceed, $120,000; and |
∎ | ◾ | | any related person has, had or will have a direct or indirect material interest. |
A transaction, arrangement or relationship that is determined to be a related person transaction must be submitted to our Audit Committee for review, approval or ratification based on certain factors, including the following: ∎ | ◾ | | the nature of the related person transaction and the terms of the related person transaction; |
∎ | ◾ | | the extent of the related person’s interest in the transaction; |
∎ | ◾ | | the business reasons for the Company to enter into the related person transaction; |
∎ | ◾ | | whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties; |
∎ | ◾ | | whether the terms are comparable to those generally available inarm’s-length transactions with unaffiliated third parties; |
∎ | ◾ | | whether the related person transaction is consistent with the best interests of the Company; and |
∎ | ◾ | | in the case of any related person transaction involving an outside director of the Company, the potential impact of such related person transaction on such outside director’sdirector���s independence and the Company’s continued compliance with the requirements under the Exchange Act, the NASDAQ rules, or other applicable rules, laws and regulations. |
If the proposed related person transaction isTransactions with Deutsche Telekom or any of its affiliates while the Stockholder’s Agreement is in effect, the Audit Committee must unanimously approve such transaction or must submit such transaction to the full Board for approval.
TRANSACTIONS WITH DEUTSCHE TELEKOMand Softbank
Certain of the related person transactions with Deutsche Telekom or its affiliates described below were not required to be approved in accordance with our current Related Person Transaction Policy because they were entered into prior to or in connection with the consummation of the Metro Combination, at which time Deutsche Telekom became a “related person” and our current Related Person Transaction Policy became effective. Stockholder’s AgreementSimilarly, certain of the related person transactions with SoftBank or its affiliates described below were not required to be approved in accordance with our current Related Person Transaction Policy because they were entered into prior to the consummation of the Sprint Combination.
| | | 68 | | PROXY STATEMENT 2021 ⬛ |
Transactions with Related Persons and Approval STOCKHOLDERS’ AGREEMENT Pursuant to the Stockholder’sAmended and Restated Stockholders’ Agreement we entered into with Deutsche Telekom and SoftBank upon closing of the Sprint Combination on April 30, 2013 in connection with the Metro Combination,1, 2020 (the “April 1 Stockholders’ Agreement”), we granted certain governance and other rights to Deutsche Telekom and SoftBank, and each of Deutsche Telekom and SoftBank agreed to certain restrictions. For a summary of the April 1 Stockholders’ Agreement, please refer to our definitive proxy statement for the 2020 Annual Meeting of Stockholders, filed with the SEC on April 21, 2020. On June 22, 2020, in connection with the Master Framework Agreement (as described below under “—SoftBank Monetization”), we entered into the Stockholders’ Agreement with Deutsche Telekom and SoftBank, which amends and restates the April 1 Stockholders’ Agreement. In the Stockholders’ Agreement, SoftBank forfeited its governance rights (including consent rights and information rights); except that SoftBank retained (i) the right to designate one director to the Board if certain T-Mobile common stock ownership thresholds were met by SoftBank, which right has been terminated as a result of share dispositions in connection with the SoftBank Monetization (as defined under “—SoftBank Monetization”), and (ii) certain registration rights for so long as SoftBank holds at least 5% of the total outstanding common stock of the Company. These rights and restrictions asapplicable to Deutsche Telekom and SoftBank under the Stockholders’ Agreement are further outlined below: ∎ | ◾ | | So longUnder the Stockholders’ Agreement, at all times when the sum of the collective voting percentage of Deutsche Telekom, SoftBank and Marcelo Claure is 50% or more, Deutsche Telekom can designate up to ten nominees for election to our Board. As noted above, as Deutsche Telekom’sa result of share dispositions in connection with the SoftBank Monetization, SoftBank no longer meets the T-Mobile common stock ownership percentage is at least 10%, Deutsche Telekom has the rightthreshold to designate as nominees forhave any designation rights. |
| | | election to our Board a number of individuals in proportion to its stock ownership percentage, rounded to the nearest whole number. We and Deutsche Telekom have agreed to use our reasonable best efforts to cause the Deutsche Telekom designees to be elected to our Board.
|
∎◾ | | Each committee of the Board shall include in its membership a number of Deutsche Telekom designees in proportion to its stock ownership percentage,the respective number of Deutsche Telekom designees on our Board, rounded to the nearest whole number, except to the extent such membership would violate applicable securities laws or stock exchange rules. No committee of the Board may consist solely of directors who are also officers, employees, directors or affiliates of Deutsche Telekom. We and Deutsche Telekom have agreed to use our reasonable best efforts to cause at least three members of our Board to be considered “independent” under SEC and NASDAQ rules, including for purposes ofRule 10A-3 promulgated under the Exchange Act. |
∎ | ◾ | | So long as Deutsche Telekom beneficially owns 30% or more of the outstanding shares of our common stock, without Deutsche Telekom’s |
| | | | | 48 | | T-Mobile 2019 Proxy Statement | | |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
| | consent we are not permitted to take certain actions, including the incurrence of debt (excluding certain permitted debt) if our consolidated ratio of debt to cash flow for the most recently ended four full fiscal quarters for which financial statements are available would exceed 5.25 to 1.0 on a pro forma basis, the acquisition of any business, debt or equity interests, operations or assets of any person for consideration in excess of $1 billion, the sale of any of the Company’s or its subsidiaries’ divisions, businesses, operations or equity interests for consideration in excess of $1 billion, any change in the size of our Board, the issuances of equity securities in excess of 10% of our outstanding shares or for the purpose of redeeming or purchasing debt held by Deutsche Telekom, the repurchase or redemption of equity securities or the declaration of extraordinary orin-kind dividends or distributions other than on a pro rata basis, or the termination or hiring of our Chief Executive Officer. |
∎ | ◾ | | We must notify Deutsche Telekom any time it is reasonably likely that we will default on any indebtedness with a principal amount greater than $75 million, and Deutsche Telekom will have the right, but not the obligation, to provide us with new debt financing up to the amount of the indebtedness that is the subject of the potential default plus any applicable prepayment or other penalties, on the same terms and conditions as such indebtedness (together with any waiver of the potential default). |
∎ | ◾ | | As long as Deutsche Telekom beneficially owns 10% or more of the outstanding shares of our common stock, we must provide Deutsche Telekom with certain information and consultation rights, subject to certain confidentiality restrictions. |
∎ | ◾ | | During the term of the Stockholder’s Agreement,Neither Deutsche Telekom is not permitted to, and is required to cause the Deutsche Telekom designees then serving as directors on our Board not to,nor SoftBank may support, enter into or vote in favor of any controlling stockholder transaction unlessin excess of $120,000 in the aggregate between or involving both us and Deutsche Telekom or SoftBank, as applicable, or any of its affiliates, or any amendment or modification to, extension or waiver of, or statement of work under, any such transaction, is approved by a majority of the directors on our Board, which majority includes a majority of the directors on our Board that are not affiliates of Deutsche Telekom. In August 2013, the Company (uponwithout the approval of our Audit Committee. |
| ◾ | | In the event that Deutsche Telekom’s voting percentage would be reduced to less than 30% as a majoritydirect result of the directors on our Board, which included a majority of directors not affiliated with Deutsche Telekom) anddilutive issuance, Deutsche Telekom agreedwill have the right to waiveacquire newly issued voting securities issued from us up to an amount that would cause Deutsche Telekom’s voting percentage to equal its voting percentage prior to the approval requirement described above with respect to (i) any controlling stockholder transaction in which the amount involved does not exceed, or is not expected to exceed, $120,000; or (ii) any controlling stockholder transaction in which the amount involved exceeds, or is expected to exceed, $120,000 that has been unanimously approved by the Audit Committee.dilutive issuance. |
∎ | ◾ | | Deutsche Telekom, SoftBank and itstheir respective affiliates are generally prohibited from acquiring more thanour common stock if such acquisition would cause the voting percentage of Deutsche Telekom and SoftBank, taken together, to exceed 80.1% of the outstanding shares of our common stock unless they make an offer to acquire all of the then-remaining outstanding shares of our common stock at the same price and on the same terms and conditions as the proposed acquisition from all other stockholders of the Company, which is either (i) accepted or approved by the majority of the directors, which majority includes a majority of thenon-affiliated directors that are not affiliates of Deutsche Telekom, or (ii) accepted or approved by holders of a majority of our common stock held by stockholders other than Deutsche Telekom, SoftBank or itstheir respective affiliates. |
∎ | | | ⬛ PROXY STATEMENT 2021 | | 69 |
Transactions with Related Persons and Approval | ◾ | | Each of Deutsche Telekom and SoftBank is prohibited (subject to certain exceptions, under the Stockholders’ Agreement, for transactions in connection with the SoftBank Monetization) from transferring any shares of the Company’s common stock in any transaction that would result in the transferee owning more than 30% of the outstanding shares of the Company’s common stock unless (i) such transfer is approved by the majority of the directors or (ii) such transferee offers to acquire all of the then-outstanding shares of the Company’s common stock at the same price and on the same terms and conditions as the proposed transfer. |
∎ | ◾ | | We have granted Deutsche Telekom and SoftBank certain demand and piggyback registration rights for shares of our common stock and debt securities of the Company and its subsidiaries beneficially owned by Deutsche Telekom and acquired in connection with the Metro Combination or in the future.SoftBank, as applicable. |
∎ | ◾ | | Each of Deutsche Telekom’s and SoftBank’s ability to compete with the Company in the United States, Puerto Rico and the territories and protectorates of the United States is subject to certain restrictions during the period beginning on the date of the closing of the MetroSprint Combination and ending on the date that is two yearssix months after the date on which Deutsche Telekom or SoftBank, as applicable, beneficially owns less than 10% of the outstanding shares of the Company’s common stock. In addition, in the case of Deutsche Telekom, for the period that commenced at the closing of the MetroSprint Combination and expires on the first anniversary of the termination of the trademark license in accordance with its terms, or in the case of SoftBank, at any time after the closing of the Sprint Combination, Deutsche Telekom or SoftBank, as applicable, may not manufacture, market or distribute any products or services under, or use in any way, the trademark“T-Mobile” in connection with certain specified activities, other than by the Company and its affiliates in accordance with the terms of the trademark license. The trademark license is more fully described below. |
| ◾ | | Except as otherwise provided therein, the Stockholders’ Agreement will terminate with respect to Deutsche Telekom or SoftBank, as applicable, at any time after which its voting percentage is less than 5%. |
SOFTBANK INDEMNIFICATION Pursuant to Amendment No 2. to the Business Combination Agreement related to the Sprint Combination (the “Sprint Business Combination Agreement”), by and among Trademark LicenseT-Mobile, Sprint, Deutsche Telekom, SoftBank and the other parties thereto, SoftBank agreed to indemnify the Company against certain specified matters and losses. In November 2020, we entered into a consent decree with the Federal Communications Commission to resolve certain matters relating to Sprint’s Lifeline program, which resulted in a payment of $200 million by SoftBank. We expect that any additional liabilities related to these indemnified matters would be indemnified and reimbursed by SoftBank. SOFTBANK MONETIZATION On June 22, 2020, the Company entered into a Master Framework Agreement (the “Master Framework Agreement”), by and among the Company, SoftBank, SoftBank Group Capital Ltd., a private limited company incorporated in England and Wales and a wholly owned subsidiary of SoftBank (“SBGC”), Delaware Project 4 L.L.C., a Delaware limited liability company and a wholly owned subsidiary of SoftBank, Project 6 LLC, Claure Mobile, Deutsche Telekom, and T-Mobile Agent LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“T-Mobile Agent”). The Master Framework Agreement and related transactions were entered into to facilitate SoftBank’s previously announced decision to monetize a portion of the Company’s common stock held by SoftBank. As consideration for the Company’s facilitation of the SoftBank Monetization, the Independent Committee of the Board of Directors negotiated benefits for T-Mobile and its stockholders, including the following: | ◾ | | the payment of a $300 million fee to the Company (the “T-Mobile Fee”) that became due and was paid upon the closing of the Public Equity Offering described below. In addition, SoftBank agreed to (i) reimburse all of the Company’s fees and expenses in connection with the transactions contemplated by the Master Framework Agreement and (ii) indemnify the Company, its subsidiaries and its controlling persons for certain claims arising out of the Company’s participation in these transactions and in connection with certain tax matters; |
| ◾ | | the opportunity for stockholders not affiliated with the Company’s major stockholders to subscribe for shares of the Company’s common stock at the same price paid by purchasers in the Public Equity Offering. The Master Framework Agreement provided for the issuance of registered, transferable subscription rights (the “Rights Offering”) to purchase up to 19,750,000 shares of the Company’s common stock to the Company’s stockholders (other than SoftBank, Deutsche Telekom and Marcelo Claure and their respective affiliates, who agreed to waive their ability to exercise or transfer such rights). The stockholders received the right to purchase one share of common stock for every 20 shares of common stock they own at the same price per share ($103.00) as the common stock sold in the Public Equity Offering. The rights were delivered concurrently with the closing of the Public Equity Offering and were exercisable until July 27, 2020. Pursuant to the Rights Offering, subscribers purchased an aggregate of 19,750,000 shares of common stock; and |
| | | 70 | | PROXY STATEMENT 2021 ⬛ |
Transactions with Related Persons and Approval | ◾ | | the immediate forfeiture of certain governance rights (including consent rights and information rights), previously granted to SoftBank, as discussed above under “—Stockholders’ Agreement.” |
In connection with the Master Framework Agreement, Deutsche Telekom waived the restriction on the transfer under the SoftBank Proxy Agreement with respect to 198,314,426 shares of our common stock held by SoftBank (the “Released Shares”). Under the terms of the Master Framework Agreement and the agreements contemplated thereby, SBGC sold the Released Shares to us, and we participated in the following transactions: Public Equity Offering On June 26, 2020, we completed a registered public offering of approximately 154.1 million shares of our common stock (the “Public Equity Offering”) at a price of $103.00 per share. The net proceeds of the Public Equity Offering were used to repurchase an equal number of issued and outstanding shares of our common stock from SBGC, pursuant to a Share Repurchase Agreement, dated as of June 22, 2020 (the “Share Repurchase Agreement”), between us and SBGC. Mandatory Exchangeable Offering Concurrent with the Public Equity Offering, we sold approximately 19.4 million shares of our common stock to a third-party trust. The net proceeds from the sale of shares to the trust were used to repurchase an equal number of issued and outstanding shares of our common stock from SBGC. The trust issued mandatory exchangeable trust securities, which entitle holders to receive quarterly distributions from the trust and a final mandatory exchange price to be settled on June 1, 2023 (“Mandatory Exchangeable Offering”). The trust was required to use a portion of the net proceeds from the Mandatory Exchangeable Offering to purchase U.S. Treasury securities, to fund quarterly distributions on the mandatory exchangeable trust securities, and the holders of the mandatory exchangeable trust securities will be entitled to a final mandatory exchange amount on June 1, 2023 that will depend on the daily volume-weighted average price of shares of our common stock. The Company is not affiliated with the trust, did not retain any proceeds from the offering of the trust securities, and does not have an ongoing interest, economic or otherwise, in the trust securities. Rights Offering The Rights Offering Master Framework Agreement resulted in the sale of 19,750,000 shares of our common stock to our stockholders (other than SoftBank, Deutsche Telekom and Marcelo Claure and their respective affiliates, who agreed to waive their ability to exercise or transfer such rights). The subscription rights provided the stockholders the option to purchase one share of common stock for every 20 shares of common stock owned, at the same price per share as the common stock sold in the Public Equity Offering of $103.00 per share. The Rights Offering exercise period expired on July 27, 2020. On August 3, 2020, the Rights Offering closed, resulting in the sale of 19,750,000 shares of our common stock. The net proceeds from the Rights Offering were used to purchase an equal number of shares from SBGC pursuant to the Share Repurchase Agreement. Marcelo Claure The Master Framework Agreement provided for the purchase of 5.0 million shares of our common stock by Marcelo Claure, a member of our board of directors, from us at the same price per share as the common stock sold in the Public Equity Offering of $103.00 per share. Following receipt of the necessary regulatory approvals on July 16, 2020, the sale of shares to Marcelo Claure occurred simultaneously with our purchase of an equivalent number of shares from SBGC at the same price per share pursuant to the Share Repurchase Agreement. Deutsche Telekom Call Options In exchange for Deutsche Telekom consenting to the transfer of the Released Shares and as provided for in the Master Framework Agreement, Deutsche Telekom received direct and indirect call options over up to approximately 101.5 million shares of our common stock held by SBGC. The arrangement provided Deutsche Telekom with a fixed-price call option to purchase up to approximately 44.9 million shares at a price of $101.46 per share indirectly from SBGC through a back-to-back arrangement where (i) Deutsche Telekom could purchase such shares from us (the “DT Fixed-Price Call Option”) and (ii) we would fulfill our obligations under the DT Fixed-Price Call Option by simultaneously purchasing the same number of shares on the same economic terms from SBGC (the “T-Mobile Fixed-Price Call Option”). In addition, Deutsche Telekom has a floating-price call option to purchase up to approximately 56.6 million shares from SBGC directly. | | | ⬛ PROXY STATEMENT 2021 | | 71 |
Transactions with Related Persons and Approval On October 6, 2020, we assigned our rights under the T-Mobile Fixed-Price Call Option to Deutsche Telekom and Deutsche Telekom terminated its right to purchase shares from us under the DT Fixed-Price Call Option. DEUTSCHE TELEKOM TRADEMARK LICENSE AGREEMENT In connection with the Metro Combination, we and Deutsche Telekom entered into a trademark license, pursuant to which we received (i) a limited, exclusive,non-revocable and royalty-bearing license to certainT-Mobile trademarks (including internet domains) for use in connection with telecommunications and broadband products and services in the United States, Puerto Rico and the territories and protectorates of the United States, (ii) a limited,non-exclusive,non-revocable and royalty-bearing license to use certain other trademarks for use in connection with telecommunications and broadband products and services in the United States, Puerto Rico and the territories and protectorates of the United States, and (iii) free of charge, the right to use the trademark“T-Mobile” as a name for the Company. The initial termIn 2020, we paid Deutsche Telekom royalties totaling approximately $82.7 million under the terms of the trademark license. On the fifth anniversary of the trademark license, ended on December 31, 2018, subject to automatic renewal for successive five-year terms unless we provide notice of our intent not to renew the trademark license prior to the expiration of the then-current term. Thereafter, the trademark license automatically renews for subsequent five-year periods unless we provide 12 months’ notice prior to the expiration of the then-current term. We may terminate the trademark license at any time upon 12 months’ prior notice,Company and Deutsche Telekom can terminatehave agreed to adjust the royalty rate to the royalty rate found under similar licenses for trademarks in the field of wireless telecommunication, broadband and information products and services in the territory through a binding benchmarking process.
The Sprint Business Combination Agreement included a proposed “Amendment No. 1 to the License Agreement” by which the parties agreed to a new royalty rate for the ten-year period commencing January 1, 2019, which retroactively took effect upon the successful conclusion of the Sprint Combination on April 1, 2020. Under Amendment No. 1 to the License Agreement, we are obligated to pay Deutsche Telekom a royalty in an amount equal to 0.25% (the “royalty rate”) of the net revenue (as defined in the trademark license) generated by products and services sold by the Company under the licensed trademarks subject to a cap of $80 million per calendar year through December 31, 2028. The trademark license ifcontains certain quality control requirements, branding guidelines and approval processes that the Company is obligated to maintain. Deutsche Telekom is obligated to indemnify us against trademark infringement claims with respect to certain licensed T-Mobile marks and has the right (but not the obligation) to indemnify us against trademark infringement claims with respect to certain other licensed trademarks. If Deutsche Telekom chooses not to defend us against trademark infringement claims with respect to certain other licensed trademarks, we abandonhave the trademarksright to defend ourselves against such claims. We are obligated to indemnify Deutsche Telekom against third-party claims due to the Company’s advertising or anti-competitive use by the Company of the licensed thereunder or if we commit a material breach.trademarks. Except for indemnification obligations and intentional misconduct, the liability of the Company and Deutsche Telekom is limited to €1 million per calendar year. We and Deutsche Telekom are obligated to negotiate a new trademark license when (i) Deutsche Telekom has 50% or less of the voting power of the outstanding shares of capital stock of the Company or (ii) any third-party owns or controls, directly or indirectly, 50% or more of the voting power of the outstanding shares of capital stock of the Company, or otherwise has the power to direct or cause the direction of the management and policies of the Company. If we and Deutsche Telekom fail to agree on a new trademark license, either we or Deutsche Telekom may terminate the trademark license and such termination shall be effective, in the case of clause (i) above, on the third anniversary after notice of termination and, in the case of clause (ii) above, on the second anniversary after notice of termination. We have the right to continue to sell products under the licensed trademarks for a period of 12 months after termination or expiration of the trademark license. Additionally, we have the right to continue to use advertising materials bearing the licensed trademarks for a period of up to six months after termination or expiration of the trademark license. | | | | | 72 | | T-Mobile 2019 Proxy Statement | | PROXY STATEMENT 2021 49⬛ |
TRANSACTIONS WITH RELATED PERSONS AND APPROVALTransactions with Related Persons and Approval
We are obligated to payDEUTSCHE TELEKOM FINANCING ARRANGEMENTS
During 2020, Deutsche Telekom a royalty in an amount equal to 0.25% (the “royalty rate”) ofheld the net revenue (as defined in the trademark license) generated by products and services sold by the Company under the licensed trademarks. In 2018, we paid Deutsche Telekom royalties totaling approximately $83.5 million under the terms of the trademark license. On the fifth anniversary of the trademark license, the Company and Deutsche Telekom have agreed to adjust the royalty rate to the royalty rate found under similar licenses for trademarks in the field of wireless telecommunication, broadband and information products and services in the territory through a binding benchmarking process. The royalty rate adjustment mechanism has been postponed until the conclusion of the Sprint Combination. The current royalty rate will remain effective until that time. The royalty rate under the license agreement will be adjusted retroactively if the Sprint Business Combination Agreement is terminated. The trademark license contains certain quality control requirements, branding guidelines and approval processes that the Company is obligated to maintain.
Deutsche Telekom is obligated to indemnify us against trademark infringement claims with respect to certain licensedT-Mobile marks and has the right (but not the obligation) to indemnify us against trademark infringement claims with respect to certain other licensed trademarks. If Deutsche Telekom chooses not to defend us against trademark infringement claims with respect to certain other licensed trademarks, we have the right to defend ourselves against such claims. We are obligated to indemnify Deutsche Telekom against third-party claims due to the Company’s advertising or anti-competitive use by the Company of the
licensed trademarks. Except for indemnification obligations and intentional misconduct, the liability of the Company and Deutsche Telekom is limited to€1 million per calendar year.
Financing Arrangements
Senior Unsecured Notes
Deutsche Telekom currently holds theT-Mobile USA senior notes described in the table below, which were issued from 2013 through 2018. The outstanding notes areT-Mobile USA’s unsecured obligations and are guaranteed on ana senior unsecured basis by the Company and by all ofT-Mobile USA’s wholly owned domestic restricted subsidiaries (other than certain designated special purpose entities, a certain reinsurance subsidiary and immaterial subsidiaries), all ofT-Mobile USA’s restricted subsidiaries that guarantee certain ofT-Mobile USA’s indebtedness and any future subsidiary of the Company that directly or indirectly owns any ofT-Mobile USA’s equity interests.T-Mobile USA may, at its option, redeem some or all of these notes at any time on or after the dates set forth in the table below under “Optional“Earliest optional redemption” at the redemption price set forth in the governing indenture, or prior to such dates at a specified “make-whole” redemption price, plus accrued and unpaid interest to, but not including, the redemption date. In addition, prior to the dates set forth in the table below under “Optional redemption with equity proceeds,”T-Mobile USA may also redeem up to the percentage of the aggregate principal amount set forth in such column, at the redemption prices set forth in the governing indenture, with the net cash proceeds of certain sales of equity securities, including the sale of the Company’s common stock.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Series | | Largest principal amount outstanding during 2018 | | | Principal amount as of March 31, 2019 | | | Interest payment dates | | Maturity | | Optional redemption | | Optional redemption with equity proceeds | | Principal paid in 2018 | | | Interest paid in 2018 | | | Other amounts paid or (received) in 2018 (1) | | 5.300% Senior Notes due 2021 | | $ | 2,000,000,000 | | | $ | 2,000,000,000 | | | March 15 and
September 15 | | March 15, 2021 | | March 15, 2018 | | Prior to March 15, 2018, up to 35% | | $ | 0 | | | $ | 106,000,000 | | | $ | 0 | | 4.000% Senior Notes due2022-1 | | $ | 1,000,000,000 | | | $ | 1,000,000,000 | | | April 15 and
October 15 | | April 15, 2022 | | March 16, 2022 | | Not applicable | | $ | 0 | | | $ | 40,000,000 | | | $ | 0 | | 9.332% Senior Reset Notes due 2023(2) | | $ | 600,000,000 | | | $ | 600,000,000 | | | April 28 and
October 28 | | April 28, 2023 | | April 28, 2019 | | Prior to April 28, 2016, up to 35% | | $ | 0 | | | $ | 55,992,000 | | | $ | 0 | | 6.000% Senior Notes due 2024 | | $ | 2,000,000,000 | | | $ | 2,000,000,000 | | | April 15 and
October 15 | | April 15, 2024 | | April 15, 2019 | | Prior to April 15, 2019, up to 35% | | $ | 0 | | | $ | 120,000,000 | | | $ | 0 | | 5.125% Senior Notes due2025-1 | | $ | 1,250,000,000 | | | $ | 1,250,000,000 | | | April 15 and
October 15 | | April 15, 2025(3) | | April 15, 2020 | | Prior to April 15, 2020, up to 40% | | $ | 0 | | | $ | 64,062,500 | | | $ | 0 | | 4.500% Senior Notes due2026-1 | | $ | 1,000,000,000 | | | $ | 1,000,000,000 | | | February 1
and August 1 | | February 1, 2026 | | February 1, 2021 | | Prior to February 1, 2021, up to 40% | | $ | 0 | | | $ | 23,250,000 | | | $ | (11,875,000 | ) | 5.375% Senior Notes due2027-1 | | $ | 1,250,000,000 | | | $ | 1,250,000,000 | | | April 15 and
October 15 | | April 15, 2027(3) | | April 15, 2022 | | Prior to April 15, 2020, up to 40% | | $ | 0 | | | $ | 67,187,500 | | | $ | 0 | | 4.750% Senior Notes due2028-1 | | $ | 1,500,000,000 | | | $ | 1,500,000,000 | | | February 1
and August 1 | | February 1, 2028 | | February 1, 2023 | | Prior to February 1, 2021, up to 40% | | $ | 0 | | | $ | 36,812,500 | | | $ | (18,802,083 | ) | 8.097% Senior Reset Notes due 2021 | | $ | 1,250,000,000 | | | $ | 0 | | | April 28 and
October 28 | | April 28, 2021 | | April 28, 2018 | | Prior to April 28, 2016, up to 35% | | $ | 1,250,000,000 | | | $ | 50,606,250 | | | $ | 50,606,250 | | 8.195% Senior Reset Notes due 2022 | | $ | 1,250,000,000 | | | $ | 0 | | | April 28 and
October 28 | | April 28, 2022 | | April 28, 2018 | | Prior to April 28, 2016, up to 35% | | $ | 1,250,000,000 | | | $ | 51,218,750 | | | $ | 51,218,750 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Series | | Largest principal amount outstanding during 2020 | | | Principal amount as of March 31, 2021 | | | Interest payment dates | | | Maturity | | | Earliest
optional redemption | | | Optional redemption with equity proceeds | | | Principal
paid in 2020 | | | Interest
paid in 2020 | | | Other amounts
paid (or received) in 2020 | | | | | | | | | | | | 5.300% Senior Notes due 20211 | | $ | 2,000,000,000 | | | | — | | |
| March 15 and
September 15 |
| | | March 15, 2021 | | | | March 15, 2018 | | |
| Not
applicable |
| | $ | 2,000,000,000 | | | $ | 57,711,111 | | | | $0 | | | | | | | | | | | | 5.125% Senior Notes due 2025-1 (amended to mature 2021)23 | | $ | 1,250,000,000 | | | | — | | |
| April 15 and
October 15 |
| | | April 15, 2021 | | | | April 15, 2020 | | |
| Not
applicable |
| | $ | 1,250,000,000 | | | $ | 46,089,410 | | | | $0 | | | | | | | | | | | | 5.375% Senior Notes due 2027-1 (amended to mature 2022)4 | | $ | 1,250,000,000 | | | $ | 1,250,000,000 | | |
| April 15 and
October 15 |
| | | April 15, 2022 | | | | April 15, 2022 | | |
| Not
applicable |
| | | $0 | | | $ | 67,187,500 | | | | $0 | | | | | | | | | | | | 4.000% Senior Notes due 2022-1 | | $ | 1,000,000,000 | | | $ | 1,000,000,000 | | |
| April 15 and
October 15 |
| | | April 15, 2022 | | | | March 16, 2022 | | |
| Not
applicable |
| | | $0 | | | $ | 40,000,000 | | | | $0 | | | | | | | | | | | | 6.000% Senior Notes due 20245 | | $ | 2,000,000,000 | | | | — | | |
| April 15 and
October 15 |
| | | April 15, 2024 | | | | April 15, 2019 | | |
| Not
applicable |
| | $ | 2,000,000,000 | | | $ | 55,333,333 | | | | $0 | | | | | | | | | | | | 4.500% Senior Notes due 2026-1 | | $ | 1,000,000,000 | | | $ | 1,000,000,000 | | |
| February 1
and August 1 |
| | | February 1, 2026 | | | | February 1, 2021 | | |
| Prior to
February 1,
2021, up
to 40% |
| | | $0 | | | $ | 45,000,000 | | | | $0 | | | | | | | | | | | | 4.750% Senior Notes due 2028-1 | | $ | 1,500,000,000 | | | $ | 1,500,000,000 | | |
| February 1
and August 1 |
| | | February 1, 2028 | | | | February 1, 2023 | | |
| Prior to
February 1,
2021, up
to 40% |
| | | $0 | | | $ | 71,250,000 | | | | $0 | |
(1)1 | Other amounts consistUpon consummation of redemption premium paid of $50,606,250 with respectthe Sprint Combination on April 1, 2020, pursuant to the 8.097%Financing Matters Agreement, the 5.300% Senior Reset Notes due 2021 were repurchased from Deutsche Telekom at a price of $2,004,711,111, equal to par plus accrued and $51,218,750 with respectunpaid interest on such notes to, the 8.195% Senior Reset Notes due 2022 as well as interest received of $11,875,000 with respect to 4.500% Senior Notes due 2026-1 and $18,802,083 with respect to 4.750% Senior Notes due 2028-1.but not including, April 1, 2020.
|
(2) | The 9.332% Senior Reset Notes have been called for redemption effective April 28, 2019.
|
(3)2 | Effective immediately prior to the consummation of the Sprint Combination on April 1, 2020, the maturity date applicable to the 5.125% Senior Notes due2025-1 will bewas amended from April 15, 2025 to April 15, 2021,2021. See “Transactions with Related Persons and Approval—Transactions with Deutsche Telekom and SoftBank—Financing Matters Agreement” for more information. |
| 3 | On June 24, 2020, pursuant to the Financing Matters Agreement, T-Mobile USA issued a notice of redemption, pursuant to which the 5.125% Senior Notes due 2025-1 were redeemed effective July 4, 2020. |
| 4 | Effective immediately prior to the consummation of the Sprint Combination on April 1, 2020, the maturity date applicable to the 5.375% Senior Notes due2027-1 will bewas amended from April 15, 2027 to April 15, 2022. See “Transactions with Related Persons and Approval — Approval—Transactions with Deutsche Telekom — and SoftBank—Financing Matters Agreement” for more information. |
| 5 | | | | | 50 | | T-Mobile 2019 Proxy Statement | | Upon consummation of the Sprint Combination on April 1, 2020, pursuant to the Financing Matters Agreement, the 6.000% Senior Notes due 2024 were repurchased from Deutsche Telekom at a price of $2,055,333,333, equal to par plus accrued and unpaid interest on such notes to, but not including, April 1, 2020. |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
Each series ofT-Mobile USA senior notes held by Deutsche Telekom was issued pursuant to an indenture (the “Indenture”), dated as of April 28, 2013, amongT-Mobile USA, the Company, the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee. The Indenture, as amended and supplemented with respect to the notes, contains covenants that, among other things, restrict the ability ofT-Mobile USA and its restricted subsidiaries to incur more debt, pay dividends and make distributions, make certain investments, repurchase stock, create liens or other encumbrances, enter into transactions with affiliates, enter into agreements that restrict dividends or distributions from subsidiaries, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. The Indenture, as so amended and supplemented, also contains customary events of default. These covenants and events of default are subject to a number of important qualifications and exceptions, including certain customary baskets, exceptions and incurrence-based ratio tests. | | | ⬛ PROXY STATEMENT 2021 | | 73 |
Transactions with Related Persons and Approval T-Mobile USA’s 4.000% Senior Notes due2022-1, 6.000% Senior Notes due 2024, 5.125% Senior Notes due2025-1 (amended to mature in 2021), 4.500% Senior Notes due2026-1, 5.375% Senior Notes due2027-1 (amended to mature in 2022) and 4.750% Senior Notes due2028-1 held by Deutsche Telekom (collectively, the “Specified DT Notes”) have (or, in the case of notes that have been repurchased or redeemed, had) substantially the same terms and conditions asT-Mobile USA’s 4.000% Senior Notes due 2022, 6.000% Senior Notes due 2024, 5.125% Senior Notes due 2025, 4.500% Senior Notes due 2026, 5.375% Senior Notes due 2027 and 4.750% Senior Notes due 2028 issued in public offerings (collectively, the “Specified Public Notes”), as applicable, other than issue date, registration rights, CUSIP, and, CUSIP.with respect to T-Mobile USA’s 5.125% Senior Notes due 2021 and 5.375% Senior Notes due 2022, maturity. See “Transactions with Related Persons and Approval—Transactions with Deutsche Telekom and SoftBank—Financing Matters Agreement” for more information. IfT-Mobile USA exercises its rights in respect of Specified Public Notes,T-Mobile USA has agreed to exercise the same rights under the corresponding Specified DT Notes on an equal and ratable basis. On January 22, 2018,T-Mobile USA, the Company, and the other guarantors party thereto entered into a purchase agreement with Deutsche Telekom (the “Purchase Agreement”), pursuant to whichT-Mobile USA agreed to issue and sell to Deutsche Telekom, and Deutsche Telekom agreed to purchase, $1.0 billion in aggregate principal amount of 4.500% Senior Notes due2026-1 and $1.5 billion in aggregate principal amount of 4.750% Senior Notes due2028-1 (collectively, the “2018 DT Notes”) directly fromT-Mobile USA.T-Mobile USA was not required to pay any upfront fees, underwriting fees, new issuance concession or other consideration to Deutsche Telekom in connection with the issuance and sale of the 2018 DT Notes.
On April 30, 2018, pursuant to the terms of the Purchase Agreement,T-Mobile USA issued to Deutsche Telekom the 2018 DT Notes and, contemporaneously with the issuance, redeemed through net settlement all of the $1.25 billion in aggregate principal amount of 8.097% Senior Reset Notes due 2021 and all of the $1.25 billion in aggregate principal amount of 8.195% Senior Reset Notes due 2022. In connection with the exchange,T-Mobile USA paid Deutsche Telekom in cash the premium portion of the redemption price set forth in the indenture governing the reset notes, plus accrued but unpaid interest on such reset notes to, but not including, the exchange date.
On March 28, 2019, T-Mobile USA issued a notice of redemption, pursuant to which the $600 million aggregate principal amount of outstanding 9.332% Senior Reset Notes due 2023 has been called for redemption effective April 28, 2019.
Revolving Credit Facilities On December 29, 2016,T-Mobile USA, the Company and the other guarantors party thereto entered into (i) a $1.0 billion senior unsecured revolving credit agreement with Deutsche Telekom, as administrative agent and lender (the “unsecured revolving credit facility”), and (ii) a $1.5 billion senior secured revolving credit agreement with Deutsche Telekom, as administrative agent, collateral agent and lender (the “secured revolving credit facility” and, together with the unsecured revolving credit facility, the “revolving credit facilities”). Interest on outstanding borrowings and commitment fees under the revolving credit facilities are based on the Company’s leverage profile, which is determined on a quarterly basis in accordance with a debt to cash flow ratio. The interest rates on borrowings under the revolving credit facilities are the Eurodollar Rate (as defined in the revolving credit facilities), plus an applicable margin. The ranges of applicable margins payable under the secured revolving credit facility and the unsecured revolving credit facility are 1.05% to 1.80% and 2.05% to 3.05%, respectively. The ranges of undrawn commitment fees applicable to the secured revolving credit facility and the unsecured revolving credit facility are 0.25% to 0.45% and 0.20% to 0.575%, respectively. The revolving credit facilities do not contain financial maintenance covenants and only contain certain limited covenants on the Company’s andT-Mobile USA’s (and certain of their subsidiaries’) ability to incur liens, sell assets and extend loans and/or guaranties. The revolving credit facilities also contain customary events of default. If Deutsche Telekom ceases to own and control more than 50% of the voting stock of the Company,T-Mobile USA may draw any remaining capacity under the revolving credit facilities and (i) in the case of the secured revolving credit facility, atT-Mobile’s option, convert the outstanding loans to secured term debt and/or issue senior unsecured notes to Deutsche Telekom in satisfaction of outstanding loans under the secured revolving credit facility, in either case, with a tenor equal to the remaining tenor under the secured revolving credit facility, in an aggregate amount not to exceed the loans then outstanding under the secured revolving credit facility, and (ii) in the case of the unsecured revolving credit facility, issue senior unsecured notes to Deutsche Telekom in satisfaction of the outstanding loans under the unsecured revolving credit facility, with a tenor equal to the remaining tenor under the unsecured revolving credit facility in an aggregate amount not to exceed the loans then outstanding under the unsecured revolving credit facility. The revolving credit facilities are guaranteed by the same entities that guaranteeT-Mobile USA’s senior notes. The obligations ofT-Mobile USA and the guarantors under the secured revolving credit facility are secured by a first priority lien on substantially all ofT-Mobile USA’s and such guarantors’ assets, subject to certain exceptions. In addition,T-Mobile USA’s obligations under the secured revolving credit facility are subject to a first priority pledge of the equity interests ofT-Mobile USA and substantially all of its direct and indirect subsidiaries, subject to certain exceptions. On March 29, 2018, terms of the revolving credit facilities were amended to, among other things, (i) amend the range of applicable margin payable under the secured revolving credit facility from 1.00%–1.75% to 1.05%–1.80%, (ii) amend the range of the applicable margin payable under the unsecured revolving credit facility from 2.00%–3.25% to 2.05%–3.05%, (iii) amend the undrawn commitment fee applicable to the secured revolving credit facility from 0.25% to a range of 0.25%–0.45%, (iv) amend the range of the undrawn commitment fee applicable to the unsecured revolving credit facility from a range of 0.25%–0.625% to a range of 0.20%–0.575%, and (v) extend the maturity date of the revolving credit facilities from December 28,November 22, 2019, to December 29, 2020. The amendments also modified the revolving credit facilities to update certain covenants and other provisions to make them substantially consistent, subject to certain additional carveouts, withT-Mobile USA’s 4.500% Senior Notes due 2026 and 4.750% Senior Notes due 2028 issued in January 2018. On November 15, 2018, the termination date of the revolving credit facilities was extended to December 29, 2021.2022.
In 2018,2020, we paid to Deutsche Telekom commitment fees of approximately $2.7$1.8 million and approximately $13.6 million in interest on borrowings | | | | | | | T-Mobile 2019 Proxy Statement | | 51 |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
under the secured revolving credit facility and commitment fees of approximately $4.7$1.5 million and approximately $1.3 million in interest on borrowings under the unsecured revolving credit facility. AsOn April 1, 2020, in connection with the Sprint Combination and pursuant to the terms of March 31, 2019, there was no amounts outstanding underthe Financing Matters Agreement, T-Mobile USA terminated each of the secured revolving credit facility or theand unsecured revolving credit facility.
Secured Term Loans On January 25, 2017,T-Mobile USA entered into a Second Incremental Facility Amendment amongT-Mobile USA, as borrower, the Company, as a guarantor, the other guarantors party thereto, Deutsche Bank AG New York Branch (“DB”), as administrative agent, and Deutsche Telekom, as lender, which amended the existing Term Loan Credit Agreement, dated November 9, 2015, betweenamong T-Mobile USA, andas borrower, the Company, as a guarantor, the other guarantors party thereto, DB, as administrative agent and Deutsche Telekom, as lender, as amended by that certain First Incremental Facility Amendment dated as of December 29, 2016, among the Company,T-Mobile USA, the other guarantors party thereto, DB, as administrative agent and Deutsche Telekom, as lender. Pursuant to the Second Incremental Facility Amendment, Deutsche Telekom agreed (i) to increase its incremental term loan | | | 74 | | PROXY STATEMENT 2021 ⬛ |
Transactions with Related Persons and Approval commitment provided toT-Mobile USA under that certain First Incremental Facility Amendment dated as of December 29, 2016 from $660.0 million to $2.0 billion and (ii) to provide toT-Mobile USA an additional $2.0 billion incremental term loan commitment (collectively, the “secured term loan facility”). The loans under the secured term loan facility were drawn in two tranches of $2.0 billion each on January 31, 2017, one of which matures on November 9, 2022, and one of which matures on January 31, 2024. The rates of interest on amounts borrowed under the secured term loan facility are based on, at the Company’s option, either LIBOR (subject to a 0% LIBOR floor) or an alternate base rate, plus a margin. The alternate base rate is the highest of (i) the prime rate of the administrative agent, (ii) the federal funds effective rate plus 0.50% and(iii) one-month adjusted LIBOR plus 1.00%. The loans under the secured term loan facility may be prepaid and terminated byT-Mobile USA at any time on any interest payment date without penalty or premium. The applicable margin payable on LIBOR indexed loans is 1.50% under the $2.0 billion incremental secured term loan maturing on November 9, 2022 and 1.75% under the $2.0 billion incremental secured term loan maturing on January 31, 2024. The secured term loan facility contains certain covenants applicable to the Company and T-Mobile USA (and certain of their subsidiaries) with respect to dividends and other distributions, restrictions on subsidiary investments and distributions to T-Mobile USA and its restricted subsidiaries, indebtedness and guarantees, sales of certain assets, affiliate transactions, liens, acquisitions, consolidations and mergers, and changes in fiscal year. The secured term loan facility also contains customary events of default. The secured term loan facilities have the benefit of guarantees from the same entities that are guarantors underT-Mobile USA’s senior notes. The obligations ofT-Mobile USA and the guarantors under the secured term loan facility are secured by a first priority lien on substantially all ofT-Mobile USA’s and such guarantors’ assets, subject to certain exceptions. In addition,T-Mobile USA’s obligations under the secured term loan facility are subject to a first priority pledge of the equity interests ofT-Mobile USA and substantially all of its direct and indirect subsidiaries, subject to certain exceptions. The secured term loan facilities include customary events of default. On March 29, 2018, the terms of the secured term loan facility were amended to, among other things, (i) reduce the applicable margin payable on LIBOR indexed loans from 2.00% to 1.50% under the $2.0 billion incremental secured term loan maturing on November 9, 2022 and (ii) reduce the applicable margin payable on LIBOR indexed loans from 2.00% to 1.75% under the $2.0 billion incremental secured term loan maturing on January 31, 2024. The amendments also modified the secured term loan facility to (a) include a soft-call prepayment premium of 1.00% of the outstanding principal amount of the loans under the secured term loan facility payable to Deutsche Telekom upon certain refinancings of such loans byT-Mobile USA with lower priced debt prior to a date that is six months after March 29, 2018 and (b) update certain covenants and other provisions to make them substantially consistent, subject to certain additional carveouts, withT-Mobile USA’s 4.500% Senior Notes due 2026 and 4.750% Senior Notes due 2028 issued in January 2018.
In 2018,2020, we paid to Deutsche Telekom approximately $148.8$4.0 billion in principal and $37.5 million in interest under the secured term loan facility. On April 1, 2020, in connection with the Sprint Combination and pursuant to the terms of the Financing Matters Agreement, T-Mobile USA repaid all outstanding amounts owed under, and terminated, the secured term loan facility. Financing Matters Agreement In connection with the Sprint Business Combination Agreement, Deutsche Telekom andT-Mobile USA entered into a Financing Matters Agreement, dated as of April 29, 2018 (the “Financing Matters Agreement”). Pursuant to the Financing Matters Agreement, Deutsche Telekom, among other things, consented to the incurrence byT-Mobile USA of secured debt in connection with and after the consummation of the Sprint Combination, and agreed to refrain from sellingT-Mobile USA’s 5.125% Senior Notes due2025-1 or 5.375% Senior Notes due2027-1 until the earlier of April 15, 2020 or the termination of the Sprint Business Combination Agreement. In addition, pursuant to the Financing Matters Agreement, Deutsche Telekom consented to amendments toT-Mobile USA’s outstanding notes held by Deutsche Telekom, effective immediately prior to the consummation of the Sprint Combination (i) increasing the amount of indebtedness permitted to be secured under the covenants applicable to the 9.332% Senior Reset Notes due 2023, (ii) permitting certain entities related to Sprint’s existing spectrum securitization notes program to benon-guarantor restricted subsidiaries, subject to certain conditions, (iii)(ii) amending the maturity date applicable to the 5.125% Senior Notes due2025-1 from April 15, 2025 to April 15, 2021, (iv)(iii) amending the maturity date applicable to the 5.375% Senior Notes due2027-1 from April 15, 2027 to April 15, 2022, and (v)(iv) providing thatT-Mobile USA shall be required to redeem 100% of the then-outstanding 5.125% Senior Notes due2025-1 (amended to mature 2021) at par plus accrued and unpaid interest on any date thatT-Mobile USA redeems or prepays any other notes or debt securities (other thanT-Mobile USA notes held by Deutsche Telekom and outstanding as of April 29, 2018). Further,T-Mobile USA agreed, among other things, upon closing of the Sprint Combination, to repay and terminate the secured term loan facility and the revolving credit facilities, as well as to purchase its outstanding 5.300% Senior Notes due 2021 and 6.000% Senior Notes due 2024.2024 at par plus accrued and unpaid interest. In connection with receiving the consents, we paid to Deutsche Telekom $7$7.0 million during 2018. IfOn April 1, 2020, upon consummation of the Sprint Business Combination, is consummated, we will makemade additional payments for consents to Deutsche Telekom of $20$13.1 million. Other AgreementsOTHER TRANSACTIONS WITH DEUTSCHE TELEKOM AND SOFTBANK ENTITIES
The related person transactions described below consist of ongoing arrangements under which the execution of transactions or the provision of services, and the payments related thereto, may vary from period to period or may only occur from time to time, depending on the circumstances of the parties involved and the terms of the applicable arrangements. Management Agreement BetweenT-Systems andT-Mobile USA The Management Agreement covers certain international multinational corporation (“MNC”) services thatT-Systems International GmbH(“T-Systems”), a wholly owned subsidiary of Deutsche Telekom, provides toT-Mobile USA in the MNC segment. These services | | | ⬛ PROXY STATEMENT 2021 | | 75 |
Transactions with Related Persons and Approval include sales, business development and account management services, marketing and bid management services, business strategy and information technology services, and business solicitation services aimed toward multinational enterprises. The Management Agreement was initially entered into between the Company and Deutsche Telekom. In July 2016, Deutsche Telekom transferred its rights and obligations under the Management Agreement, as amended, toT-Systems. The Management Agreement may be terminated by either party on 12 months’ notice. During 2018,2020, T-Mobile USA incurred $109,000approximately $0.4 million in expenses forT-Systems’ services under the Management Agreement. | | | | | 52 | | T-Mobile 2019 Proxy Statement | | |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
Discount Agreements on Inter-Operator Tariffs T-Mobile USA has entered into Discount Agreements on Inter-Operator Tariffs with certain Deutsche Telekom affiliates. The Discount Agreements establish a reciprocal discount scheme for roaming charges based on inter-operator tariffs to be paid by the Home Public Mobile Network operator to the Visited Public Mobile Network operator according to their respective international roaming agreements. The Discount Agreements had an initial term ending on December 31, 2016 with yearly or bi-annualrenewal terms thereafter. During 2018,2020, T-Mobile USA received approximately $1.5$0.4 million in net revenue and incurred approximately $5.2$1.4 million in net expenses for Deutsche Telekom’s and its affiliates’ services under the Discount Agreements. Agreement on Commercial Roaming Broker Services Between Deutsche Telekom andT-Mobile USA Under this agreement, Deutsche Telekom negotiates, for the benefit of certain of its wireless affiliates, includingT-Mobile USA (“NatCos”), the terms of group roaming discount agreements with third-party network/service operators, or roaming partners. This agreement has an indefinite term, but by September 30 of each year,T-Mobile USA has the right to elect to participate or decline to participate under the broker arrangement for the following calendar year, and the parties negotiate the scope of roaming partners with which Deutsche Telekom is entitled to negotiate forT-Mobile USA’s benefit. IfT-Mobile USA agrees to be a participating NatCo in a given calendar year,T-Mobile USA will receive and/or provide roaming services according to the terms of the group roaming discount agreements during such calendar year, and at the end of a specified settlement period, Deutsche Telekom will receive from, or make payments to, the roaming partners forT-Mobile USA and the other participating NatCos, pursuant to the payment terms of the roaming agreements. Intercompany payments are made between Deutsche Telekom andT-Mobile USA to settle any amounts due to, or owed by,T-Mobile for roaming services under the roaming agreements. Deutsche Telekom may realize volume discounts for roaming services based on the NatCos’ participation in the group roaming discount agreements. Deutsche Telekom also allocates its commercial roaming costs, which consist of certain strategic and financial planning costs associated with roaming transactions, to the NatCos, includingT-Mobile USA. During 2018,2020, T-Mobile USA experienced an approximately $4.9$7.9 million increase in roaming revenues (primarily as a result of minimum revenue commitment payments toT-Mobile USA from certain partners) and experienced an approximately $4.1$5.4 million increasedecrease in roaming expenses (primarily as a result of minimum revenue commitment payments fromT-Mobile USA to certain partners) for roaming usage provided to, or delivered by, third-party operators under this agreement. In November 2018,2020, T-Mobile USA elected to participate in the roaming broker arrangement for calendar year 2019.2021. Telecom Master Services Agreement Between Deutsche Telekom North America and T-Mobile USA Pursuant to the Master Services Agreement, Deutsche Telekom North America, a wholly owned subsidiary of Deutsche Telekom, provides international long-distance and IP transit (internet connectivity) services toT-Mobile USA. The Master Services Agreement will remain in effect for so long as there remain statements of work pending. In December 2017 and February 2018, the Company entered into amendments to the Master
Services Agreement to enable new services over other carrier networks. During 2018,2020, T-Mobile USA incurred approximately $36.3$47.8 million in expenses for Deutsche Telekom North America’s services under the Master Services Agreement.
Services Agreement BetweenT-Systems North America andT-Mobile USA
T-Mobile USA andT-Systems North America, Inc., a wholly owned subsidiary of Deutsche Telekom(“T-Systems North America”), entered into a Services Agreement on January 4, 2008, which governs the terms of certain IT support services provided byT-Systems North America toT-Mobile USA. The agreement expired on January 31, 2017 and the parties entered into a Statement of Work, pursuant to whichT-Systems North America would provide termination assistance to transition IT support services to a new vendor. During 2018,T-Mobile USA incurred approximately $205,000 in aggregate expenses forT-Systems North America’s services under the Statement of Work. We do not expect to incur any further expenses under this arrangement.
Insurance Brokerage Services Provided by DeTeAssekuranz-Deutsche Telekom Assekuranz-Vermittlungsgesellschaft mbH (DeTeAssekuranz) DeTeAssekuranz, a wholly owned subsidiary of Deutsche Telekom, provides certain insurance brokerage services forT-Mobile USA. During 2018,2020, T-Mobile USA incurred approximately $3.3$8.0 million in expenses for DeTeAssekuranz’s services under this arrangement. Services Agreement Between Deutsche Telekomand T-Mobile In February 2015,T-Mobile entered into a Services Agreement effective as of January 1, 2014 with Deutsche Telekom pertaining to the provision byT-Mobile of certain financial, tax and accounting-related services to Deutsche Telekom and the payment by Deutsche Telekom for such services. The services relaterelated to certain operating and financial data and other information that Deutsche Telekom may request fromT-Mobile. In December 2016, the parties entered into an Amendment updatingThe agreement was further amended with updates to the fees and services schedule. The parties intendschedule, and an extension to enter into another Amendment extending the termsterm following the closing of the agreement.Sprint Combination. Pursuant to the Services Agreement, as amended,T-Mobile has billed Deutsche Telekom $10.0received approximately $6.3 million in revenues for such services in 2018.2020. Connected Solutions Agreement Between Mojioand T-Mobile In November 2016,T-Mobile entered into a Connected Car Agreement effective as of November 18, 2016 with Mojio, Inc. (“Mojio”), a company in which an affiliate of Deutsche Telekom at the time owned an approximately 14% equity interest. In December 2018, the agreementConnected Car Agreement was further amended.amended and restated in the form of a Master Agreement for Connected Solutions, effective | | | 76 | | PROXY STATEMENT 2021 ⬛ |
Transactions with Related Persons and Approval December 20, 2018. The amended and restated agreement enables Mojio to provide cloud platform and software support to the Company for multiple connected device product lines, including the connected car devices purchased by the Company.service. During 2018,2020, the Company incurred approximately $6.6$6.1 million in expenses under the arrangement. In addition, in connection with the amended and restated agreement, the Company invested an aggregate total of approximately $5.0 million in shares of Mojio’s Class B preferred share financing. | | | | | | | T-Mobile 2019 Proxy Statement | | 53 |
Proposal 3 - Stockholder Proposal for Limitations on Accelerated Vestingstock, which was subsequently converted to shares of Equity Awards inMojio’s common stock. Concurrent with the Eventpurchase of a Change of Control
AmalgaTrust, a division of Amalgamated Bank of Chicago, on behalfMojio’s Class B preferred stock, the Company entered into an amendment of the amended and restated agreement. The amendment provides that the Company will AFL-CIOpre-pay Reserve Fund, 815 16th St., N.W., Washington, D.C. 20006,to Mojio, on a beneficial ownercalendar quarterly basis, the sum of 200 shares$2.0 million, for monthly recurring charges (“MRC”) for subscribers to the connected car service. The pre-payment is subject to a quarterly true-up against actual MRC for each such quarter. The pre-payment period commenced on January 1, 2020, and continues through December 31, 2021, unless the Company exercises its right, commencing on February 26, 2021, to terminate the pre-payment. After termination or expiration of the pre-payment period, the Company’s common stock, has advised us that it intendspayment of MRC reverts to submit the following proposal at the Annual Meeting.monthly payment, in arrears.
| | | | | Our Board of Directors recommends a voteAGAINST the proposal for limitations on accelerated vesting of equity awards in the event of a change of control |
Required VoteSprint International Wireline Agreements and Purchase Orders
ApprovalPrior to the closing of the stockholder proposalSprint Combination, Sprint international entities entered into various wireline agreements and purchase orders with affiliates of Deutsche Telekom, including the Company, that provide for limitations on accelerated vesting of equity awards in the event of a change of control requires that the number of votes cast “FOR” the proposal represents a majoritytransport, co-location and peering arrangements to provide Sprint international wireline customers local access outside of the total votes cast onUnited States. These agreements continued following the proposal.closing of the Sprint Combination. In 2020, the Company received approximately $2.6 million in revenues and incurred approximately $3.1 million in expenses pursuant to these arrangements.
ProposalBrightstar Master Services Agreement and Related Statements of Work
RESOLVED: Shareholders urgeOn April 1, 2020 (the closing date of the Board of Directors ofSprint Combination), T-Mobile and Brightstar US Inc. (the “Company”LLC (“Brightstar”), an affiliate of SoftBank, entered into a Master Services Agreement and certain statements of work (collectively, the “Brightstar Agreement”) under which Brightstar would provide T-Mobile with forward and reverse logistics services for handsets and other devices, support and services related to adoptT-Mobile’s trade-in programs for used handsets and devices, and accessory sourcing and distribution services.
Brightstar historically provided substantially similar services to Sprint. T-Mobile has engaged Brightstar to perform these services for certain retail channels previously operated by Sprint during a policy that intransition period while the eventoperations of a change in controlT-Mobile and Sprint are being consolidated. The initial term of the Brightstar Agreement is for two years after the closing date of the Sprint Combination, through April 1, 2022. The forward logistics Statement of Work and the accessories Statement of Work under the Brightstar Agreement were terminated in November 2020. During 2020, the Company as definedincurred approximately $116.4 million in expenses and received approximately $65.1 million in revenues under any applicable employment agreement, equity incentive plan or other plan, there shall be no acceleration of vesting of any equity award granted to any senior executive. However, under this policy the Compensation Committee may provide in an applicable grant or purchase agreement that any unvested award will vest on a partial,pro rata basis uparrangement. Brightstar Prepaid Device Insurance Program Master Services Agreement Prior to the timeclosing of the senior executive’s termination, with such qualificationsSprint Combination, Sprint and an affiliate of Brightstar were parties to a Prepaid Device Insurance Program Master Services Agreement whereby Brightstar provides insurance and extended warranty phone replacement services for an award asSprint’s prepaid subscribers. The agreement continued following the Compensation Committee may determine. The policy should be implemented so as not to violate any contractual obligations in existence on the date adopted. Supporting Statement
The Company allows senior executives to receive accelerated equity awards under certain conditions after a change in controlclosing of the Company. These accelerated equity awards can significantly increaseSprint Combination. In 2020, the Company received approximately $14.8 million in revenues under the arrangement.
International Roaming Agreement Prior to the closing of the Sprint Combination, Sprint and an affiliate of SoftBank were parties to an agreement pursuant to which each party allows the other party’s customers to roam on certain of its networks free of charge or to roam on certain networks at a discount rate. The agreement continued and was further amended following the closing of the Sprint Combination. In 2020, the total value of senior executives’ “golden parachutes” after a change in control. We do not question that a reasonable amountthis agreement for Sprint was approximately $9.7 million, and the total value of severance payments may be appropriatethis agreement for senior executives and other employees. We are concerned, however, that current practices at ourSoftBank was approximately $2.7 million. In addition, for the roaming services provided under the Roaming Agreement Addendum—Inter Operator Tariff Agreement for M2M Traffic, the Company may permit windfall awards to senior executives. As of December 31, 2017, our Company’s CEO John Legere had just under $53received approximately $2.9 million in unvested time-basedrevenues and performance-based restricted stock units subject to acceleration following a change in control. This amount of accelerated equity is in addition to a lump sum of $10incurred approximately $2.9 million in cash severance and $5.7 million in short term cash incentives that Legere would have been entitledexpenses.
Joint Capacity Provisioning Agreement Prior to receive if his employment was terminated after a change on control. We note that many companies use a “double trigger” system to determine eligibility for accelerated vesting of equity awards – there must be a change in control, and the executive must be involuntarily terminated. While we support the use of double triggers, we are not convinced that executives deserve to receive all unvested awards after a termination event. We do believe, however, that an affected executive should be eligible to receive vesting of equity awards on apro rata basis as of his or
her termination date, with the details of anypro rata award to be determined by the Compensation Committee.
Other leading companies, including Apple Inc., Chevron Corporation, Exxon Mobil Corporation, International Business Machines Corporation, Intel Corporation, Microsoft Corporation and Occidental Petroleum Corporation impose limitations on accelerated vesting of equity, such as providingpro rata awards or simply forfeiting unearned awards.
We urge you to vote FOR this proposal.
The Board’s Response to Proposal 3
The proponents have submitted substantially the same proposal in previous years. Having again carefully considered the matter, for similar reasons as with the prior proposals, the Board believes that adoption of this proposal is not in the best interests of the Company and its stockholders.
In connection with a change in control, none of the Company’s outstanding equity awards provides for automatic accelerated vesting unless an acquirer or successor does not assume or replace such awards. Instead, in connection with a change in control, equity awards granted to our executives are subject to “double-trigger” accelerated vesting, meaning that equity awards accelerate only upon a qualifying termination of employment, either for good reason (such as material diminution of duties, material reduction of compensation or other specified events), without cause or, in limited cases, due to expiration of the applicable executive’s employment term. Providing for “double-trigger” accelerated vesting of equity awards upon a qualifying termination of employment in connection with a change in control effectively aligns the interests of our executive officers with those of our stockholders by encouraging our executive officers to continue in employment with the Company through the consummation of a change in control.
Even in the proposed Sprint Combination, which is not a change in control of the Company, the Company’s outstanding equity awards do not provide for automatic accelerated vesting. Instead, each Severance Letter Agreement entered into in connection with the Business Combination Agreement provides for accelerated vesting only upon a qualifying termination of employment in connection with the closing or abandonment of the Sprint Combination, either for good reason, without cause or,Sprint and an affiliate of SoftBank entered into a Joint Provisioning Capacity Agreement to make available to each other network resources in limited cases, due to expirationthe Asia Pacific region and the United States. The agreement continued following the closing of the applicable executive’s employment term.
Notwithstanding the assertions in the proposal, eliminating the executives’ “double-trigger” arrangements upon adoption of the proposal would place the Company outside the practice of its peers and lead to a competitive disadvantage when competing for executive talent. We also do not believe that adoption of this proposal is appropriate given our existing compensation practices and programs, which have received strong support from stockholders as demonstrated by the fact that our most recentsay-on-pay proposal was approved by 99.5% of the votes cast on the proposal.
| | | | | 54 | | T-Mobile 2019 Proxy Statement | | |
PROPOSAL 3 - STOCKHOLDER PROPOSAL FOR LIMITATIONS ON ACCELERATED VESTING OF EQUITY AWARDS IN THE EVENT OF A CHANGE OF CONTROL
We provide our executivesSprint Combination. In 2020, Sprint provided SoftBank with benefits, including severance and change in control benefits, that the Compensation Committee believes are competitively necessary, customary and in the best interests of the Company and its stockholders. As noted above, providing for “double-trigger” accelerated vesting of equity awards upon a qualifying termination of employment in connectionservices with a change in control aligns the interests of the Company’s executivesmarket value equal to approximately $0.9 million. Sprint’s cost to provide these services was approximately $398,000. In such period, SoftBank provided Sprint with those of its stockholders by encouraging continued stability of our executive team through a change in control. No windfall is created because an executive will not receive accelerated vesting based solely on a change in control, nor would an executive be entitled to receive accelerated vesting solely upon a termination of employment unless the executive terminates for good reason or the Company terminates the executive without cause or, in limited cases, due to expiration of the executive’s employment term.
Allowing for double-trigger accelerated vesting ensures that executives are not penalizedservices with a loss of then-unvested equity awards duemarket value equal to an involuntary termination of employment in connection with the consummation of a transaction that, while outside the control of any individual executive, is in the best interests of stockholders. We believe that accelerated vesting in appropriate circumstances permits management to remain objective and focused on protecting stockholder rights and maximizing stockholder value during a potential change in control event. In addition, the double-trigger provision in our equity awards ensures that executives are not distracted by a potential loss of employment and remain with the Company through the transaction, thereby reducing deal uncertainty.approximately $1.5 million.
| | | ⬛ PROXY STATEMENT 2021 | | For the reasons above, the Board recommends a voteAGAINST this proposal.77 |
Transactions with Related Persons and Approval Traffic Termination Agreement Prior to the closing of the Sprint Combination, Sprint and an affiliate of SoftBank entered into a Traffic Termination Agreement, pursuant to which the parties set forth the rates for the exchange of traffic between the parties. The agreement continued following the closing of the Sprint Combination. In 2020, the Company received approximately $150,000 in revenues and incurred approximately $270,000 in expenses under this arrangement. Tax Sharing Agreement Prior to the closing of the Sprint Combination, Sprint, an affiliate of SoftBank and Brightstar entered into a Tax Sharing Agreement effective as of the taxable year ending March 31, 2016. The Tax Sharing Agreement governs the rights, responsibilities, and obligations of Sprint, the affiliate of SoftBank and Brightstar with respect to tax liabilities and benefits, entitlements to refunds, preparation of tax returns, tax contests and other tax matters regarding state income taxes. The agreement continued following the closing of the Sprint Combination. In 2020, the Company had a tax receivable of approximately $1.9 million due from SoftBank pursuant to the Tax Sharing Agreement. Global Wholesale Wireline Master Services Agreement Prior to the closing of the Sprint Combination, Sprint and an affiliate of SoftBank, and Brightstar entered into a Global Wholesale Wirelines Master Services Agreement, pursuant to which Sprint International Japan Corporation sells wireline wholesale services to SoftBank. The agreement continued following the closing of the Sprint Combination. In 2020, the Company received approximately $2.7 million in revenues and incurred approximately $0.4 million in expenses under this arrangement. WeWork Membership Agreements Prior to the closing of the Sprint Combination, Sprint and parties associated with WeWork, an affiliate of SoftBank, entered into various Membership Agreements, pursuant to which Sprint leased office spaces in Los Angeles, London, San Francisco and New York. The Membership Agreements continued following the closing of the Sprint Combination, with the membership agreements for the San Francisco and Los Angeles office spaces terminated in November 2020 and the membership agreement for the New York office space terminated in December 2020. In 2020, the Company incurred an aggregate of approximately $0.9 million in expenses under these Membership Agreements. WeWork Service Agreements Prior to the closing of the Spring Business Combination, Sprint and parties associated with WeWork, an affiliate of SoftBank, entered into a Master Service Agreement and a Master Software as a Service Agreement, pursuant to which WeWork provided Sprint turn-key design/manage services in connection with Building 6200 on Sprint’s Overland Park Campus in Kansas. The agreements continued following the closing of the Sprint Combination and expired in June 2020. In 2020, the Company incurred an aggregate of approximately $0.2 million in expenses under these arrangements. Nexlink’s Participation in Auction Nexlink Communications (“Nexlink”), an affiliate of SoftBank, historically participated in Sprint accessories auctions which included a number of unrelated bidders. In 2020, the Company received approximately $0.5 million in revenues and incurred approximately $1.6 million in expenses under this arrangement. Nexlink National Direct Agreement Following the closing of the Sprint Combination, the Company entered into a National Direct Agreement with Nexlink, pursuant to which Nexlink was authorized to market and sell the Company’s wireless services and equipment and activate additional lines of services. In 2020, the Company incurred approximately $1.4 million in expenses under this agreement. Agoop Master Services Agreement Prior to the closing of the Sprint Combination, Sprint and Agoop Corporation (“Agoop”), an affiliate of SoftBank, entered into a Master Services Agreement, pursuant to which Agoop provided expertise, personnel, professional, technical and project management and data analysis services to the Company. The agreement continued following the closing of the Sprint Combination through the end of 2020. In 2020, the Company incurred approximately $0.4 million in expenses under this Master Services Agreement. InMobi Master Services Agreement Prior to the closing of the Sprint Combination, Sprint and InMobi Pte. Ltd. (“InMobi”), an affiliate of SoftBank, entered into a Master Services Agreement, pursuant to which InMobi licenses data and provides certain distribution, mobile advertising and data services. The agreement continued following the closing of the Sprint Combination. In 2020, the Company received approximately $5.0 million in revenues and incurred approximately $2.6 million in expenses under this Master Services Agreement. | | | | | 78 | | T-Mobile 2019 Proxy Statement | | PROXY STATEMENT 2021 55⬛ |
QuestionsTransactions with Related Persons and Answers About the Annual Meeting and VotingApproval
Arm Limited Master Purchase Agreement Prior to the closing of the Sprint Combination, Sprint and Arm Limited (“Arm Limited”), an affiliate of SoftBank, entered into a Master Purchase Agreement, pursuant to which Arm Limited provided Sprint business units with a hosted solution for embedded SIM card. The agreement continued following the closing of the Sprint Combination. In 2020, the Company incurred approximately $150,000 in expenses under this arrangement. Alto GSuite Arrangement Prior to the closing of the Sprint Combination, Sprint and Alto Pharmaceuticals, an affiliate of SoftBank, entered into an arrangement pursuant to which Sprint provides services relating to Google business licenses. This arrangement continued following the closing of the Business Combination. In 2020, the Company incurred approximately $150,000 in expenses under this arrangement. Wireless Services Agreements Prior to the closing of the Sprint Combination, Sprint entered into agreements with SoftBank and several of its affiliates to provide wireless services. In 2020, the Company received approximately $2.8 million in revenues pursuant to these wireless services agreements. Brightstar Puerto Rico Services Agreement Prior to the closing of the Sprint Combination, T-Mobile entered into a Services Agreement with Brightstar Puerto Rico, Inc. (“Brightstar Puerto Rico”), an affiliate of SoftBank, pursuant to which Brightstar Puerto Rico served as the Company’s 3PL and operated part of the Company’s inventory distribution and logistics facilities in Puerto Rico. The agreement continued following the closing of the Sprint Combination. In 2020, the Company incurred approximately $2.8 million in expenses under this Services Agreement. Trustonic Master Agreement Prior to the closing of the Sprint Combination, T-Mobile entered into a Master Agreement with Trustonic Limited (“Trustonic”), an affiliate of SoftBank, pursuant to which Trustonic provided subscriber identify module card unlock technology and services to the Company. The agreement continued following the closing of the Sprint Combination. In 2020, the Company incurred approximately $0.4 million in expenses under this Master Agreement. Lease Agreements Prior to the closing of the Sprint Combination, T-Mobile entered into several store and cell site lease agreements with certain parties that are affiliates of SoftBank. These agreements continued following the closing of the Sprint Combination. In 2020, the Company incurred approximately $0.2 million in expenses under these lease agreements. | | | ⬛ PROXY STATEMENT 2021 | | 79 |
Why did I receive these materials?
| | | | WHY DID I RECEIVE THESE MATERIALS? | | | | |
As a holder of common stock ofT-Mobile US, Inc. at the close of business on April 18, 2019,7, 2021, the record date, you are entitled to vote at the Annual Meeting. We are providing you with these proxy materials in connection with the solicitation of proxies by our Board to be used at the Annual Meeting. These proxy materials were first made available to our stockholders on or about April 26, 2019.21, 2021. This Proxy Statement describes the proposals to be voted on at the Annual Meeting by the holders of record of our common stock on the record date and includes information required to be disclosed to our stockholders. Who may vote at the Annual Meeting?
If you are a holder of record of our common stock as of the record date (April 18, 2019), you may vote your shares on the matters to be voted on at the Annual Meeting. You will receive only one proxy card for all the shares of common stock you hold in certificate and book-entry form.
If, as of the record date, you hold shares of our common stock in “street name” – that is, through an account with a bank, broker or other institution – you may direct the registered holder how to vote your shares at the Annual Meeting by following the instructions that you will receive from the registered holder.
How do proxies work?
You may vote by authorizing the persons selected by us as your proxy to vote your shares at the Annual Meeting according to your instructions on the matters discussed in this Proxy Statement, and according to their discretion on any other business that may properly come before the Annual Meeting. We have designated two of our executive officers as proxies for the Annual Meeting: John J. Legere,G. Michael Sievert and Peter Osvaldik. If you are a holder of record of our Chief Executive Officer,common stock as of the record date (April 7, 2021), you may vote your shares on the matters to be voted on at the Annual Meeting. You will receive only one proxy card for all the shares of common stock you hold in certificate and J. Braxton Carter,book-entry form. If, as of the record date, you hold shares of our Executive Vice President and Chief Financial Officer.common stock in “street name”—that is, through an account with a bank, broker or other institution—you may direct the registered holder how to vote your shares at the Annual Meeting by following the instructions that you will receive from the registered holder. How do I vote?
By Internet. Go towww.proxyvote.com, available 24 hours a day, seven days a week, and follow theon-screen instructions to submit your proxy. You will need to have your proxy card available and use the Company number and account number shown on your proxy card to cast your vote. This method of voting will be available until 11:59 p.m. Eastern Daylight Time, or EDT, on June 12, 2019,2, 2021, or the date immediately before any date to which the Annual Meeting may be continued, adjourned or postponed. By Mail. You may submit your proxy by mail by returning your executed proxy card. You should sign your proxy card using exactly the same name as appears on the card, date your proxy card and indicate your voting preference on each proposal. You should mail your proxy card in plenty of time to allow for delivery prior to the Annual Meeting. Proxy cards received after 8:00 a.m. Pacific Daylight Time on June 13, 20193, 2021 may not be considered unless the Annual Meeting is continued, adjourned or postponed and then only if such proxy cards are received before the date and time the continued, adjourned or postponed Annual Meeting is held. By Phone. You also may submit your proxy by phone from the United States and Canada, using the toll-free number on the proxy card and the procedures and instructions described on the proxy card. Telephone voting will be considered at the Annual Meeting if completed prior to 11:59 p.m. EDT on June 12, 2019,2, 2021, or the date immediately before any date to which the Annual Meeting may be continued, adjourned or postponed. In PersonAt the Annual Meeting.. You may also may vote in personelectronically at the virtual Annual Meeting. See “What do I need in order to virtually attend the Annual Meeting?” below.
How are the votes recorded? What is the effect if I do not vote?
| | | | HOW ARE THE VOTES RECORDED? WHAT IS THE EFFECT IF I DO NOT VOTE? | | | | |
∎ | ◾ | | If you are a registered holder and we receive a valid proxy card from you by mail or receive your vote by phone or internet, your shares will be voted by the named proxy holders as indicated in your voting preference selection. |
∎ | ◾ | | If you return your signed and dated proxy card without indicating your voting preference on one or more of the proposals to be considered at the Annual Meeting, or if you if otherwise do not indicate your voting preference via phone or internet on one or more of the proposals to be considered at the Annual Meeting, your shares will be voted on the proposals for which you did not indicate your voting preference in accordance with the recommendations of the Board. |
∎ | | | 80 | | PROXY STATEMENT 2021 ⬛ |
Questions and Answers About the Annual Meeting and Voting | ◾ | | If you hold your shares in street name and want your shares to be voted, you must instruct your broker, bank or other institution how to vote such shares. Absent your specific instructions, NASDAQ rules do not permit brokers and banks to vote your shares on a discretionary basis fornon-routine corporate governance matters, such as the election of directors and the stockholder proposal (resulting in a “brokernon-vote”), but your shares can be voted without your instructions on the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm because this is considered a routine matter. |
∎ | ◾ | | If you indicate that you wish to withhold authority or abstain from voting on a proposal, your shares will not be voted and will have no direct effect on the outcome of that proposal. Your shares, however, will count toward the quorum necessary to hold the Annual Meeting. |
| | | | | 56 | | T-Mobile 2019 Proxy Statement | | |
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
| | | | | | | | | | | | | | Proposal | | RecommendedRecommended
Vote | | Vote
Required | | Withhold Votes/ Withhold
Votes/Abstentions
| | Broker
Non-Votes | 1.
| | Broker Non-Votes | | | | | | 1.Election of Directors | | FOR | | Plurality | | No Effect | | No Effect | 2.
| | | | | 2.Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 20192021 | | FOR | | Majority* | | No Effect | | ** | 3.
| | Stockholder Proposal for Limitations on Accelerated Vesting of Equity Awards in the Event of a Change of Control | | AGAINST | | Majority* | | No Effect | | No Effect |
| * | Under our bylaws, the ratification of the appointment of our independent registered public accounting firm and approval of the stockholder proposal areis decided by the vote of a majority of the votes cast in person (virtually) or by proxy at the Annual Meeting by the holders of our shares of common stock entitled to vote thereon. Under this voting standard, any matter orthis proposal for which the vote required is a “majority” will, if presented, be approved if a majority of the votes cast “FOR” suchthe proposal exceed the number of votes cast “AGAINST” suchthe proposal. Neither abstentions nor brokernon-votes will count as votes cast “FOR” or “AGAINST” the proposal. Therefore, abstentions and brokernon-votes, if any, will have no direct effect on the outcome of the proposal. |
| ** | Brokernon-votes are not expected for this proposal. |
Can I change my vote or revoke my proxy?
| | | | CAN I CHANGE MY VOTE OR REVOKE MY PROXY? | | | | |
Yes. If you are a holder of record of our common stock, you may revoke your proxy at any time prior to the voting deadlines referred to in “How do I vote?” above by: ∎ | ◾ | | delivering to our Corporate Secretary at our principal executive office located at 12920 SE 38th Street, Bellevue, Washington 98006, a written revocation prior to the date and time of the Annual Meeting; |
∎ | ◾ | | submitting another valid proxy card with a later date by mail; |
∎ | ◾ | | submitting another, later-dated proxy by phone or internet; or |
∎ | ◾ | | virtually attending the Annual Meeting in person and giving the Company’s Inspector of Elections notice of your intent to vote your shares in person.voting electronically. |
Attendance at the virtual Annual Meeting will not, by itself, revoke a proxy. If your shares are held in street name, you must contact your broker or other registered holder in order to revoke your previously submitted voting instructions. Such revocation should be made sufficiently in advance of the Annual Meeting to ensure that the revocation of the proxy card submitted by your registered holder is received by our Corporate Secretary prior to the date and time of the Annual Meeting. What is required for a quorum at the Annual Meeting?
| | | | WHAT IS REQUIRED FOR A QUORUM AT THE ANNUAL MEETING? | | | | |
To transact business at the Annual Meeting, a majority of the shares of our common stock outstanding on the record date and entitled to vote at the Annual Meeting must be present, in person (virtually) or by proxy, at the Annual Meeting. If a quorum is not present at the Annual Meeting, no business can be transacted at that time, and the meeting will be continued, adjourned or postponed to a later date. On the record date, there were 854,303,0111,246,808,967 shares of our common stock outstanding and entitled to vote at the Annual Meeting. A stockholder’s instruction to “withhold authority,” abstentions, and brokernon-votes will be counted as present and entitled to vote at the Annual Meeting for purposes of determining a quorum. What do I need
| | | | WHAT DO I NEED IN ORDER TO VIRTUALLY ATTEND THE ANNUAL MEETING? | | | | |
The Annual Meeting will again be held solely by means of remote communication, in ordera virtual only format. You will not be able to attend the Annual Meeting?Meeting in person. You can virtually attend the Annual Meeting at the meeting time by visiting www.virtualshareholdermeeting.com/TMUS2021 and entering the 16-digit If you are a record holder of shares of our common stock, you must bring the control number included on your Notice of Internet Availability of Proxy Materials, proxy card or on the admission ticket enclosed with the paper copy of theinstructions that accompany your proxy materials. However, ifThe Annual Meeting will begin promptly at 8:00 a.m. PDT. Online check-in will begin at 7:45 a.m. PDT, and you hold your shares of common stock in street name, you must askshould allow ample time for the broker,online check-in procedures.
| | | ⬛ PROXY STATEMENT 2021 | | 81 |
bank or other institution (registered holder) that holds your shares to provide you with a legal proxy, a copy of your account statement, or a letter from the registered holder confirming that you beneficially own or hold shares of our common stock as of the close of business on April 18, 2019. You can obtain an admission ticket by presenting this confirming documentation from your broker, bank or other institution at the Annual Meeting.
Every attendee ofQuestions and Answers About the Annual Meeting will be required to show a valid, government-issued picture identification that matches his or her Notice of Internet Availability of Proxy Materials, admission ticket, legal proxy and/or confirming documentation to gain admission to the Annual Meeting. Seating is limited and will be available on a first-come, first-served basis.Voting
For safety and security purposes, we do not permit any stockholder to bring cameras, video or audio recording equipment, large bags, briefcases or packages into the meeting room or to otherwise record or photograph the Annual Meeting. We also ask that all stockholders attending the Annual Meeting turn off all cell phones and other electronic devices during the Annual Meeting. We reserve the right to inspect any bags, purses or briefcases brought into the Annual Meeting.
Who will tabulate and count the votes?
| | | | WHO WILL TABULATE AND COUNT THE VOTES? | | | | |
Representatives of Broadridge Financial Solutions will tabulate the votes and act as the Company’s Inspector of Elections. Where can I find the voting results for each proposal?
| | | | WHERE CAN I FIND THE VOTING RESULTS FOR EACH PROPOSAL? | | | | |
We will file a Current Report onForm 8-K within four business days after the Annual Meeting to announce the preliminary results of voting. Who bears the cost of the proxy solicitation?
| | | | WHO BEARS THE COST OF THE PROXY SOLICITATION? | | | | |
We will bear all of the costs of soliciting proxies, including the preparation, assembly, printing and distribution of all proxy materials. We also reimburse brokers, banks, fiduciaries, custodians and other institutions for their costs in forwarding the proxy materials to the beneficial owners or holders of our common stock. Our directors, officers and employees also may solicit proxies by mail, personally, by telephone, by email or by other appropriate means. No additional compensation will be paid to directors, officers or other employees for such services. | | | | | 82 | | T-Mobile 2019 Proxy Statement | | PROXY STATEMENT 2021 57⬛ |
Other Information and Business
COMPANY INFORMATION
Company Information Our website contains the Company’s current Corporate Governance Guidelines, Director Selection Guideline, committee charters, Speak Up Policy (f.k.a. Whistleblower Protection Policy), Code of Business Conduct, Code of Ethics for Senior Financial Officers, Supplier Code of Conduct and SEC filings. You may view or download any of these documents free of charge on the Investor Relations section of our website athttp://investor.t-mobile.com by selecting “Governance Documents” under the “Governance” tab. By selecting “SEC Filings” under the “Financials” tab, you will also find a copy of this Proxy Statement, a copy of the 20182020 Annual Report to Stockholders, a copy of the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 2018,2020, and copies of the Company’s quarterly reports onForm 10-Q and current reports onForm 8-K.You may obtain a copy of any of the above-listed documents, including the Company’s Annual Report on Form 10-K, upon request, free of charge, by sending a request in writing to the Company’s Investor Relations Department atT-Mobile US, Inc., 13655 131st Ave SE, Bellevue, WA 98006. Park Avenue, 14th Floor, New York, NY 10016. The Company has entered into the Sprint Business Combination Agreement, which provides for the Sprint Combination, in which T-Mobile will combine with Sprint in an all-stock transaction at a fixed exchange ratio of 0.10256 shares of T-Mobile common stock for each share of Sprint common stock, or the equivalent of 9.75 shares of Sprint common stock for each share of T-Mobile common stock. The Sprint Combination has been approved by the boards of directors of T-Mobile and Sprint and the required approvals of the stockholders of each of T-Mobile and Sprint have been obtained (in the case of the Company, pursuant to a written
consent of Deutsche Telekom Holding B.V., the holder of a majority of the outstanding shares of T-Mobile common stock, in favor of proposals to approve the issuance of T-Mobile common stock and an amended and restated certificate of incorporation of the Company in connection with the transaction, as further described in the Company’s registration statement on Form S-4 (No. 333-226435)). The completion of the Sprint Combination remains subject to regulatory approvals and certain other customary closing conditions.
DUPLICATE MAILINGS (HOUSEHOLDING)Duplicate Mailings (Householding)
We have adopted a procedure called “householding,” which has been approved by the SEC. Under this procedure, we may deliver only one copy of our Notice of Internet Availability of Proxy Materials, and for those stockholders that received a paper copy of proxy materials in the mail, one copy of this Proxy Statement and our 20182020 Annual Report to Stockholders, to multiple stockholders who share the same address unless we have received contrary instructions from an affected stockholder. If you received only one copy of this Proxy Statement and the 20182020 Annual Report to Stockholders or Notice of Internet Availability of Proxy Materials and wish to receive a separate copy for each stockholder atin your household, or if you wish to participate in householding, please contact Broadridge Financial Solutions, Inc. by calling toll free at(866) 540-7095 or by writing to Broadridge Financial Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, New York, NY 11717. We will promptly deliver, upon written or oral request to the address or telephone number above by stockholders at a shared address to which a single copy of the documents was delivered, a separate copy of the Proxy Statement and the 20182020 Annual Report to Stockholders. A number of brokerage firms have instituted householding. If you hold your shares in street name, please contact your bank, broker or other holder of record to request information on householding. STOCKHOLDER PROPOSALS FOR THE 2020 ANNUAL MEETING OF STOCKHOLDERSStockholder Proposals for the 2022 Annual Meeting of Stockholders
Proposals Pursuant to Rule 14a-8. Pursuant toRule 14a-8 under the Exchange Act, stockholders may present proper proposals for inclusion in our Proxy Statement and for consideration at our 20202022 Annual Meeting of Stockholders. To be eligible for inclusion in our 20202022 Proxy Statement underRule 14a-8, your proposal must be received by us no later than the close of business on December 27, 2019,22, 2021, and must otherwise comply withRule 14a-8. While the Board will consider stockholder proposals, we reserve the right to omit from our Proxy Statement stockholder proposals that we are not required to include under the Exchange Act, includingRule 14a-8. Business Proposals and Nominations Pursuant to Our Bylaws. Under our bylaws, in order to nominate a director or bring any other business before the stockholders at the 20202022 Annual Meeting of Stockholders that will not be included in our Proxy Statement pursuant toRule 14a-8, you must comply with the procedures and timing specifically described in our bylaws. In addition, assuming the date of the 20202022 Annual Meeting of Stockholders is not more than 30 days before and not more than 60 days after the anniversary date of the 20192021 Annual Meeting, you must notify us in writing, and such written notice must be delivered to our secretary no earlier than February 14, 2020,3, 2022, and no later than March 15, 2020.5, 2022. A copy of our bylaws setting forth the requirements for the nomination of director candidates by stockholders and the requirements for proposals by stockholders may be obtained free of charge from our Corporate Secretary at 12920 SE 38th Street, Bellevue, Washington 98006. A nomination or proposal that does not comply with the above procedures will be disregarded. Compliance with the above procedures does not require the Company to include the proposed nominee or proposal in the Company’s proxy solicitation material. | | | | | 58⬛ PROXY STATEMENT 2021 | | T-Mobile 2019 Proxy Statement | | 83 |
OTHER INFORMATION AND BUSINESSOther Information and Business
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEDelinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and holders of 10% or more of our outstanding common stock to file reports concerning their ownership (Form 3) and changes in ownership (Form 4 and Form 5) of Company equity securities with the SEC. Based solely upon our review of such reports submitted on EDGAR, the Company believes that all personsone report by Matthew A. Staneff on August 20, 2020 relating to one transaction and one report by Deeanne King on March 26, 2021 relating to one transaction were not filed on a timely basis all reportsas required by Section 16(a). of the Exchange Act. OTHER BUSINESSOther Business
Management does not know of any other items or business, other than those in the accompanying Notice of Annual Meeting of Stockholders, that may properly come before the Annual Meeting or other matters incident to the conduct of the Annual Meeting. As to any other item or proposal that may properly come before the Annual Meeting, including voting on a proposal omitted from this Proxy Statement pursuant to the rules of the SEC, it is intended that proxies will be voted in accordance with the discretion of the proxy holders. By Order of the Board of Directors, 
David A. Miller Executive Vice President, General Counsel and Secretary | | | | | 84 | | T-Mobile 2019 Proxy Statement | | PROXY STATEMENT 2021 59⬛ |
APPENDIXAppendix A
Reconciliation ofNon-GAAP Financial Measures Certain of the financial metrics applicable to the 20182020 STIP described under “Executive Compensation – Compensation—Analysis of Executive Officer Compensation” arenon-GAAP financial measures. Below is a description of thesenon-GAAP financial measures. “Adjusted EBITDA”: Earnings before interest expense, net of interest income, income tax expense, depreciation and amortization expense,non-cash stock-based compensation and certain income and expenses not reflective ofT-Mobile’s ongoing operating performance.performance such as merger-related costs, COVID-19-related costs and impairment expense. Adjusted EBITDA is reconciled to netNet income as follows: | | | | | Quarter | | Year Ended
December 31, | | | Quarter | | Year Ended
December 31, | | (in millions) | | Q1
2017 | | Q2
2017 | | Q3
2017 | | Q4
2017 | | Q1
2018 | | Q2
2018 | | Q3
2018 | | Q4
2018 | | 2017 | | 2018 | | | Q1 2019 | | Q2 2019 | | Q3 2019 | | Q4 2019 | | Q1 2020 | | Q2 2020 | | Q3 2020 | | Q4 2020 | | 2019 | | 2020 | | | Net income | | $ | 698 | | | $ | 581 | | | $ | 550 | | | $ | 2,707 | | | $ | 671 | | | $ | 782 | | | $ | 795 | | | $ | 640 | | | $ | 4,536 | | | $ | 2,888 | | | $ | 908 | | | $ | 939 | | | $ | 870 | | | $ | 751 | | | $ | 951 | | | $ | 110 | | | $ | 1,253 | | | $ | 750 | | | $ | 3,468 | | | $ | 3,064 | | | Adjustments: | | | | | | | | | | | | | | | | | | | | | | | Income from discontinued operations, net of tax | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (320 | ) | | | — | | | | — | | | | — | | | | (320 | ) | | Income from continuing operations | | | | 908 | | | | 939 | | | | 870 | | | | 751 | | | | 951 | | | | (210 | ) | | | 1,253 | | | | 750 | | | | 3,468 | | | | 2,744 | | | Interest expense | | 339 | | | 265 | | | 253 | | | 254 | | | 251 | | | 196 | | | 194 | | | 194 | | | 1,111 | | | 835 | | | | 179 | | | | 182 | | | | 184 | | | | 182 | | | | 185 | | | | 776 | | | | 765 | | | | 757 | | | | 727 | | | | 2,483 | | | Interest expense to affiliates | | 100 | | | 131 | | | 167 | | | 162 | | | 166 | | | 128 | | | 124 | | | 104 | | | 560 | | | 522 | | | | 109 | | | | 101 | | | | 100 | | | | 98 | | | | 99 | | | | 63 | | | | 44 | | | | 41 | | | | 408 | | | | 247 | | | Interest income | | (7 | ) | | (6 | ) | | (2 | ) | | (2 | ) | | (6 | ) | | (6 | ) | | (5 | ) | | (2 | ) | | (17 | ) | | (19 | ) | | | (8 | ) | | | (4 | ) | | | (5 | ) | | | (7 | ) | | | (12 | ) | | | (6 | ) | | | (3 | ) | | | (8 | ) | | | (24 | ) | | | (29 | ) | | Other (income) expense, net | | (2 | ) | | 92 | | | (1 | ) | | (16 | ) | | (10 | ) | | 64 | | | (3 | ) | | 3 | | | 73 | | | 54 | | | | (7 | ) | | | 22 | | | | (3 | ) | | | (4 | ) | | | 10 | | | | 195 | | | | 99 | | | | 101 | | | | 8 | | | | 405 | | Income tax expense (benefit) | | (91 | ) | | 353 | | | 356 | | | (1,993 | ) | | 210 | | | 286 | | | 335 | | | 198 | | | (1,375 | ) | | 1,029 | | | | Income tax expense | | | | 295 | | | | 301 | | | | 325 | | | | 214 | | | | 306 | | | | 2 | | | | 407 | | | | 71 | | | | 1,135 | | | | 786 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating income | | 1,037 | | | 1,416 | | | 1,323 | | | 1,112 | | | 1,282 | | | 1,450 | | | 1,440 | | | 1,137 | | | 4,888 | | | 5,309 | | | | 1,476 | | | | 1,541 | | | | 1,471 | | | | 1,234 | | | | 1,539 | | | | 820 | | | | 2,565 | | | | 1,712 | | | | 5,722 | | | | 6,636 | | | Depreciation and amortization | | 1,564 | | | 1,519 | | | 1,416 | | | 1,485 | | | 1,575 | | | 1,634 | | | 1,637 | | | 1,640 | | | 5,984 | | | 6,486 | | | | 1,600 | | | | 1,585 | | | | 1,655 | | | | 1,776 | | | | 1,718 | | | | 4,064 | | | | 4,150 | | | | 4,219 | | | | 6,616 | | | | 14,151 | | Stock-based compensation(1) | | 67 | | | 72 | | | 83 | | | 85 | | | 96 | | | 106 | | | 102 | | | 85 | | | 307 | | | 389 | | | Cost associated with the Transactions(2) | | | — | | | | — | | | | — | | | | — | | | | — | | | 41 | | | 53 | | | 102 | | | | — | | | 196 | | | Other, net(3) | | | — | | | 5 | | | | — | | | 29 | | | 3 | | | 2 | | | 7 | | | 6 | | | 34 | | | 18 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted EBITDA(4) | | $ | 2,668 | | | $ | 3,012 | | | $ | 2,822 | | | $ | 2,711 | | | $ | 2,956 | | | $ | 3,233 | | | $ | 3,239 | | | $ | 2,970 | | | $ | 11,213 | | | $ | 12,398 | | | Operating income from discontinued operations1 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 432 | | | | — | | | | — | | | | — | | | | 432 | | | Stock-based compensation2 | | | | 93 | | | | 111 | | | | 108 | | | | 111 | | | | 123 | | | | 139 | | | | 125 | | | | 129 | | | | 423 | | | | 516 | | | Merger-related costs | | | | 113 | | | | 222 | | | | 159 | | | | 126 | | | | 143 | | | | 798 | | | | 288 | | | | 686 | | | | 620 | | | | 1,915 | | | COVID-19-related costs3 | | | | — | | | | — | | | | — | | | | — | | | | 117 | | | | 341 | | | | — | | | | — | | | | — | | | | 458 | | | Impairment expense | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 418 | | | | — | | | | — | | | | — | | | | 418 | | | Other, net4 | | | | 2 | | | | 2 | | | | 3 | | | | (5 | ) | | | 25 | | | | 5 | | | | 1 | | | | — | | | | 2 | | | | 31 | | | Adjusted EBITDA | | | $ | 3,284 | | | $ | 3,461 | | | $ | 3,396 | | | $ | 3,242 | | | $ | 3,665 | | | $ | 7,017 | | | $ | 7,129 | | | $ | 6,746 | | | $ | 13,383 | | | $ | 24,557 | |
(1)1 | Following the acquisition of Sprint’s prepaid wireless business by DISH Network Corporation (excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Telecommunications Company and Swiftel Communications, Inc.), including customer accounts, inventory, contracts, intellectual property and certain other specified assets (the “Prepaid Transaction”), starting on July 1, 2020, we will provide MVNO services to DISH. We have included the operating income from discontinued operations in our determination of the Adjusted EBITDA to reflect contributions of the Prepaid Business that were replaced by the MVNO Agreement beginning on July 1, 2020 in order to enable management, analysts and investors to better assess ongoing operating performance and trends. |
| 2 | Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense in the Condensed Consolidated Financial Statements. Additionally, certain stock-based compensation expenses associated with the Transactions (as defined below)Sprint Combination have been included in Cost associated with the Transactions.Merger-related costs. |
(2)3 | The defined term “Transactions” includes the Sprint CombinationSupplemental employee payroll, third-party commissions and the other transactions contemplated by the Sprint Business Combination Agreement.cleaning-related COVID-19 costs were not significant for Q3 and Q4 2020.
|
(3)4 | Other, net may not agree to the Consolidated Statements of Comprehensive Income primarily due to certainnon-routine operating activities, such as other special items that would not be expected to reoccur or are not reflective ofT-Mobile’s ongoing operating performance, and are therefore excluded in Adjusted EBITDA. |
(4) | Adjusted EBITDA for 2018 includes the impact from the new revenue standard of $398 million.
|
Adjusted EBITDA is anon-GAAP financial measure utilized byT-Mobile’s management to monitor the financial performance of our operations.T-Mobile uses Adjusted EBITDA internally as a metricmeasure to evaluate and compensate its personnel and management for their performance, and as a benchmark to evaluateT-Mobile’s operating performance in comparison to its competitors. Management believes analysts and investors use Adjusted EBITDA as a supplemental measure to evaluate overall operating performance and facilitate comparisons with other wireless communications services companies because it is indicative ofT-Mobile’s ongoing operating performance and trends by excluding the impact of interest expense from financing,non-cash depreciation and amortization from capital investments,non-cash stock-based compensation, Sprint Combination-related costs including network decommissioning costs and incremental costs relateddirectly attributable to the Transactions,COVID-19 and impairment expense, as they are not indicative ofT-Mobile’s ongoing operating performance, as well as certain other nonrecurring income and expenses. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for income from operations, net income or any other measure of financial performance reported in accordance with GAAP. | | | ⬛ PROXY STATEMENT 2021 | | A-1 |
APPENDIX A “Adjusted EBIT”: Adjusted EBITDA minus depreciation and amortization expense.
| | | | | | | T-Mobile 2019 Proxy Statement | | A-1 |
APPENDIX A - RECONCILIATION OFNON-GAAP FINANCIAL MEASURES
Adjusted EBIT is reconciled to net income as follows: | | | | | Quarter | | Year Ended
December 31, | | | Quarter | | Year Ended
December 31, | | (in millions) | | Q1
2017 | | Q2
2017 | | Q3
2017 | | Q4
2017 | | Q1
2018 | | Q2
2018 | | Q3
2018 | | Q4
2018 | | 2017 | | 2018 | | | Q1 2019 | | Q2 2019 | | Q3 2019 | | Q4 2019 | | Q1 2020 | | Q2 2020 | | Q3 2020 | | Q4 2020 | | 2019 | | 2020 | | | Net income | | $ | 698 | | | $ | 581 | | | $ | 550 | | | $ | 2,707 | | | $ | 671 | | | $ | 782 | | | $ | 795 | | | $ | 640 | | | $ | 4,536 | | | $ | 2,888 | | | $ | 908 | | | $ | 939 | | | $ | 870 | | | $ | 751 | | | $ | 951 | | | $ | 110 | | | $ | 1,253 | | | $ | 750 | | | $ | 3,468 | | | $ | 3,064 | | | Adjustments: | | | | | | | | | | | | | | | | | | | | | | | Income from discontinued operations, net of tax | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (320 | ) | | | — | | | | — | | | | — | | | | (320 | ) | | Income from continuing operations | | | | 908 | | | | 939 | | | | 870 | | | | 751 | | | | 951 | | | | (210 | ) | | | 1,253 | | | | 750 | | | | 3,468 | | | | 2,744 | | | Interest expense | | 339 | | | 265 | | | 253 | | | 254 | | | 251 | | | 196 | | | 194 | | | 194 | | | 1,111 | | | 835 | | | | 179 | | | | 182 | | | | 184 | | | | 182 | | | | 185 | | | | 776 | | | | 765 | | | | 757 | | | | 727 | | | | 2,483 | | | Interest expense to affiliates | | 100 | | | 131 | | | 167 | | | 162 | | | 166 | | | 128 | | | 124 | | | 104 | | | 560 | | | 522 | | | | 109 | | | | 101 | | | | 100 | | | | 98 | | | | 99 | | | | 63 | | | | 44 | | | | 41 | | | | 408 | | | | 247 | | | Interest income | | (7 | ) | | (6 | ) | | (2 | ) | | (2 | ) | | (6 | ) | | (6 | ) | | (5 | ) | | (2 | ) | | (17 | ) | | (19 | ) | | | (8 | ) | | | (4 | ) | | | (5 | ) | | | (7 | ) | | | (12 | ) | | | (6 | ) | | | (3 | ) | | | (8 | ) | | | (24 | ) | | | (29 | ) | | Other (income) expense, net | | (2 | ) | | 92 | | | (1 | ) | | (16 | ) | | (10 | ) | | 64 | | | (3 | ) | | 3 | | | 73 | | | 54 | | | | (7 | ) | | | 22 | | | | (3 | ) | | | (4 | ) | | | 10 | | | | 195 | | | | 99 | | | | 101 | | | | 8 | | | | 405 | | Income tax expense (benefit) | | (91 | ) | | 353 | | | 356 | | | (1,993 | ) | | 210 | | | 286 | | | 335 | | | 198 | | | (1,375 | ) | | 1,029 | | | | Income tax expense | | | | 295 | | | | 301 | | | | 325 | | | | 214 | | | | 306 | | | | 2 | | | | 407 | | | | 71 | | | | 1,135 | | | | 786 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating income | | 1,037 | | | 1,416 | | | 1,323 | | | 1,112 | | | 1,282 | | | 1,450 | | | 1,440 | | | 1,137 | | | 4,888 | | | 5,309 | | | | 1,476 | | | | 1,541 | | | | 1,471 | | | | 1,234 | | | | 1,539 | | | | 820 | | | | 2,565 | | | | 1,712 | | | | 5,722 | | | | 6,636 | | Stock-based compensation(1) | | 67 | | | 72 | | | 83 | | | 85 | | | 96 | | | 106 | | | 102 | | | 85 | | | 307 | | | 389 | | | Cost associated with the Transactions | | | — | | | | — | | | | — | | | | — | | | | — | | | 41 | | | 53 | | | 102 | | | | — | | | 196 | | | Other, net(2) | | | — | | | 5 | | | | — | | | 29 | | | 3 | | | 2 | | | 7 | | | 6 | | | 34 | | | 18 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted EBIT(3) | | $ | 1,104 | | | $ | 1,493 | | | $ | 1,406 | | | $ | 1,226 | | | $ | 1,381 | | | $ | 1,599 | | | $ | 1,602 | | | $ | 1,330 | | | $ | 5,229 | | | $ | 5,912 | | | Operating income from discontinued operations1 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 432 | | | | — | | | | — | | | | — | | | | 432 | | | Stock-based compensation2 | | | | 93 | | | | 111 | | | | 108 | | | | 111 | | | | 123 | | | | 139 | | | | 125 | | | | 129 | | | | 423 | | | | 516 | | | Merger-related costs | | | | 113 | | | | 222 | | | | 159 | | | | 126 | | | | 143 | | | | 798 | | | | 288 | | | | 686 | | | | 620 | | | | 1,915 | | | COVID-19-related costs3 | | | | — | | | | — | | | | — | | | | — | | | | 117 | | | | 341 | | | | — | | | | — | | | | — | | | | 458 | | | Impairment expense | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 418 | | | | — | | | | — | | | | — | | | | 418 | | | Other, net4 | | | | 2 | | | | 2 | | | | 3 | | | | (5 | ) | | | 25 | | | | 5 | | | | 1 | | | | — | | | | 2 | | | | 31 | | | Adjusted EBIT | | | $ | 1,684 | | | $ | 1,876 | | | $ | 1,741 | | | $ | 1,466 | | | $ | 1,947 | | | $ | 2,953 | | | $ | 2,979 | | | $ | 2,527 | | | $ | 6,767 | | | $ | 10,406 | |
(1)1 | Following the Prepaid Transaction, starting on July 1, 2020, we will provide MVNO services to DISH. We have included the operating income from discontinued operations in our determination of the Adjusted EBITDA to reflect contributions of the Prepaid Business that will be replaced by the MVNO Agreement beginning on July 1, 2020 in order to enable management, analysts and investors to better assess ongoing operating performance and trends. |
| 2 | Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense in the Condensed Consolidated Financial Statements. Additionally, certain stock-based compensation expenses associated with the TransactionsSprint Combination have been included in Cost associated with the Transactions.Merger-related costs. |
(2)3 | Supplemental employee payroll, third-party commissions and cleaning-related COVID-19 costs were not significant for Q3 and Q4 2020. |
| 4 | Other, net may not agree to the Consolidated Statements of Comprehensive Income primarily due to certainnon-routine operating activities, such as other special items that would not be expected to reoccur or are not reflective ofT-Mobile’s ongoing operating performance, and are therefore excluded in Adjusted EBIT. |
(3) | Adjusted EBIT for 2018 includes the impact from the new revenue standard of $398 million.EBITDA.
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Adjusted EBIT is anon-GAAP financial measure utilized byT-Mobile’s management to monitor financial performance ofT-Mobile’s operations.T-Mobile uses Adjusted EBIT internally as a metric to evaluate and compensate its personnel and management for their performance. Adjusted EBIT has limitations as an analytical tool and should not be considered in isolation or as a substitute for income from operations, net income or any other measure of financial performance reported in accordance with GAAP. “Operating Free Cash Flow”: Operating free cash flow is anon-GAAP financial measure as defined and used under the 20182020 STIP. It is generally equal to Adjusted EBITDA (calculated using net income determined in accordance with IFRS, which is different from GAAP net income) further adjusted for the change in working capital assets and liabilities (other than those with Deutsche Telekom and its affiliates) andnon-cash items included in Adjusted EBITDA, less cash paid for capital expenditures (other than spectrum licenses) and othernon-recurring cash items that are not representative of normal ongoing operations. | | | | | A-2 | | T-Mobile 2019 Proxy Statement | | |
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T-MOBILE US, INC.
ATTN: BROADY HODDER
12920 SE 38TH STREET
BELLEVUE, WA 98006A-2
| | VOTE BY INTERNET -www.proxyvote.com | | Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on June 12, 2019. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | | ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSSTATEMENT 2021 ⬛
| | If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. | | VOTE BY PHONE - 1-800-690-6903
| | Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 12, 2019. Have your proxy card in hand when you call and then follow the instructions. | | VOTE BY MAIL
| | Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
-T- MobileTM T-MOBILE US, INC. ATTN: BROADY HODDER 12920 SE 38TH STREET BELLEVUE, WA 98006 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Daylight Time on June 2, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/TMUS2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Daylight Time on June 2, 2021. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E76641-P24097 D43560-P53666 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY T-MOBILE US, INC. For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR the following: 1.Election of Directors Nominees: 01) Marcelo Claure 02) Srikant M. Datar 03) Bavan M. Holloway 04) Timotheus Hottges 05) Christian P. Illek 06) Raphael Kubler 07) Thorsten Langheim 08) Dominique Leroy 09) G. Michael Sievert 10) Teresa A. Taylor 11) Omar Tazi 12) Kelvin R. Westbrook 13) Michael Wilkens The Board of Directors recommends you vote FOR proposal 2. 2. Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company's Independent Registered Public Accounting Firm for Fiscal Year 2021. NOTE: Consider any other business that is properly brought before the Annual Meeting or any continuation, adjournment or postponement of the Annual Meeting. For Against Abstain Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by an authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date | | | | | | | | | | | | | | | | | | | | | | | | | | | | | T-MOBILE US, INC.
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All
| | Withhold
All
| | For All
Except
| | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.
| | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following: | | | | | | | | | | | | | | | | | 1. | | Election of Directors | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nominees: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 01) Srikant M. Datar | | 07) Raphael Kübler | | | | | | | | | | | | | | | | | | | | | | | | | | | 02) Srini Gopalan | | 08) Thorsten Langheim | | | | | | | | | | | | | | | | | | | | | | | | | | | 03) Lawrence H. Guffey | | 09) .John J. Legere | | | | | | | | | | | | | | | | | | | | | | | | | | | 04) Timotheus Höttges | | 10) G. Michael Sievert | | | | | | | | | | | | | | | | | | | | | | | | | | | 05) Christian P. Illek | | 11) Teresa A. Taylor | | | | | | | | | | | | | | | | | | | | | | | | | | | 06) Bruno Jacobfeuerborn | | 12) Kelvin R. Westbrook | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR proposal 2. | | For | | Against | | | Abstain | | | | | | | | | | | | | | | | | | 2. | | Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2019.
| | ☐ | | ☐ | | | ☐ | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote AGAINST proposal 3. | | For | | Against | | | Abstain | | | | | | | | | | | | | | | | | | 3. | | Stockholder Proposal for Limitations on Accelerated Vesting of Equity Awards in the Event of a Change of Control. | | ☐ | | ☐ | | | ☐ | | | | | | | | | | | | | | | | | NOTE:Consider any other business that is properly brought before the Annual Meeting or any continuation, adjournment or postponement of the Annual Meeting. | | | | | | | | | | | | | | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
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2019 ANNUAL MEETING ADMISSION TICKET
2021 ANNUAL MEETING OF STOCKHOLDERS OF T-MOBILE US, INC. Thursday, June 13, 2019 3, 2021 8:00 A.M., Pacific Daylight Time Four Seasons Hotel
99 Union Street
Seattle, Washington 98101
Online only at www.virtualshareholdermeeting.com/TMUS2021 At the Annual Meeting, stockholders will vote upon the proposals outlined in the Notice of 20192021 Annual Meeting of Stockholders of T-Mobile US, Inc. and any other business as may properly come before the Annual Meeting. We look forward to your participation. Upon arrival please present this Admission Ticket, together with a valid government-issued picture identification to enter the Annual Meeting. This Admission Ticket only admits the stockholder identified on the reverse side and is non-transferable.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available atwww.proxyvote.com. www.proxyvote.com. D43561-P53666 T-MOBILE US, INC. Annual Meeting of Stockholders June 3, 2021 8:00 A.M., Pacific Daylight Time This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) G. Michael Sievert and Peter Osvaldik, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of T-MOBILE US, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 8:00 A.M. PDT on Thursday, June 3, 2021 virtually at www.virtualshareholdermeeting.com/TMUS2021. This proxy, when properly executed, will be voted in the manner directed herein and, in the proxyholders' discretion, upon any other business that properly comes before the meeting. If no direction is given, this proxy will be voted in accordance with the recommendation of the Board of Directors: FOR the election of the nominees to the Board and FOR Proposal 2. Continued and to be signed on reverse side — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
E76642-P24097
| | | T-MOBILE US, INC.
Annual Meeting of Stockholders
June 13, 2019 8:00 A.M., Pacific Daylight Time
This proxy is solicited by the Board of Directors
The stockholder(s) hereby appoint(s) John J. Legere and J. Braxton Carter, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of T-MOBILE US, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 8:00 A.M. PDT on Thursday, June 13, 2019 at the Four Seasons Hotel, 99 Union Street, Seattle, WA 98101.
This proxy, when properly executed, will be voted in the manner directed herein and, in the proxyholders’ discretion, upon any other business that properly comes before the meeting. If no direction is made, this proxy will be voted in accordance with the recommendation of the Board of Directors: FOR the election of the nominees to the Board, FOR Proposal 2 and AGAINST Proposal 3.
Continued and to be signed on reverse side
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