| Item 5.02 | Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. |
On March 9, 2023, T-Mobile US, Inc. (“T-Mobile” or the “Company”) entered into an amended and restated employment agreement (the “A&R Employment Agreement”) with G. Michael Sievert, its President and Chief Executive Officer, that extends the term for five years. The A&R Employment Agreement supersedes and replaces the prior employment agreement between T-Mobile and Mr. Sievert, dated as of November 15, 2019, as amended. The term of A&R Employment Agreement continues through April 1, 2028, subject to automatic one-year extensions thereafter unless at least ninety (90) days’ prior notice of non-renewal is given by either party.
Pursuant to the A&R Employment Agreement, Mr. Sievert is entitled to (i) an annual base salary initially equal to $1,750,000, effective as of January 1, 2023, which will automatically increase to (a) effective January 1, 2024, the greater of (x) $1,850,000 or (y) the then-current median annual base salary for chief executive officers in T-Mobile’s then-current compensation peer group (the “Peer Group”), (b) effective January 1, 2025, the greater of (x) $1,900,000 or (y) the then-current median annual base salary for chief executive officers in T-Mobile’s Peer Group, and (c) effective each of January 1, 2026 and January 1, 2027, the greater of (x) $2,000,000 or (y) the then-current median annual base salary for chief executive officers in T-Mobile’s Peer Group; (ii) commencing with calendar year 2023, an annual short-term cash incentive targeted at no less than 250% of his base salary (with a maximum award equal to 200% of target), payable based on the attainment of pre-established performance goals; and (iii) employee benefits to the same extent and on the same terms as such benefits are provided generally by T-Mobile to its senior executives.
In addition, pursuant to the A&R Employment Agreement, commencing with calendar year 2023, Mr. Sievert will be entitled to annual long-term incentive awards (“LTI awards”) with a target grant-date value (the “Annual LTI Target Value”) that is no less than $18,500,000, which will be allocated as follows: 50% of such value will be granted in the form of performance-based restricted stock units (“PRSUs”) and the remaining 50% of such value will be granted in the form of time-based restricted stock units (“RSUs”). Mr. Sievert’s Annual LTI Target Value will automatically increase to (i) for LTI awards granted during calendar year 2024, the greater of (a) $19,000,000, (b) the 60th percentile of the aggregate target grant-date value of annual equity incentive awards for chief executive officers in T-Mobile’s Peer Group, or (c) the Annual LTI Target Value for the immediately preceding calendar year; and (ii) for LTI grants made during calendar years 2025, 2026, 2027 and 2028, the greater of (a) $19,000,000, (b) the 65th percentile of the aggregate target grant-date value of annual equity incentive awards for chief executive officers in T-Mobile’s Peer Group, and (c) the Annual LTI Target Value in effect for the applicable prior calendar year. With respect to 60% of the total time-based RSUs granted to Mr. Sievert as annual LTI awards during each of calendar years 2023 through 2028 (i.e., 30% of the total Annual LTI Target 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 T-Mobile’s Peer Group at the time of grant. In satisfaction of T-Mobile’s obligation under the A&R Employment Agreement to grant Mr. Sievert LTI awards with an Annual LTI Target Value of $18,500,000 for fiscal year 2023, on April 1, 2023, Mr. Sievert will be granted one-time awards of RSUs and PRSUs under the Company’s 2013 Omnibus Incentive Plan (as amended, the “Plan”), with respect to a total target number of shares of T-Mobile common stock equal to the quotient of $2,333,333 divided by the average closing price of T-Mobile common stock over the thirty calendar day period ending five days before February 15, 2023, rounded up to the nearest whole share (the “True-Up Awards”). The True-Up Awards will be subject to the same vesting schedules and other terms and conditions (including, with respect to the PRSUs, performance goals) applicable to the awards of RSUs and PRSUs granted to Mr. Sievert under the Plan on February 15, 2023.
The A&R Employment Agreement provides that, on April 1, 2023, Mr. Sievert will be granted a one-time award of PRSUs (the “Special PRSUs”) under the Plan, with respect to a target number of shares of T-Mobile common stock equal to the quotient of $10,000,000 divided by the average closing price of T-Mobile common stock over the thirty calendar day period ending five days before the grant date. The Special PRSUs will cliff-vest on the second anniversary of the grant date, based on T-Mobile’s total shareholder return relative to its Peer Group during the applicable performance period and subject to Mr. Sievert’s continued employment through such date (except as otherwise noted below and in the PRSU award agreement).
