UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule14a-101)
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T-Mobile US, Inc.
(Name of Registrant as Specified In Its Charter)
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Place:
Date: June
Time: 8:00 a.m. PDT | Agenda:
∎ Elect ∎ Ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020; ∎ Conduct an advisory vote to approve the compensation provided to the Company’s named executive officers for 2019; ∎ Vote on one stockholder proposal, if properly presented at the Annual Meeting; and ∎ Consider any other business that is properly brought before the Annual Meeting or any continuation, adjournment or postponement of the Annual Meeting.
Record
YOUR VOTE IS VERY IMPORTANT.
Due to the potential travel, community gathering and other impacts of coronavirus disease 2019(COVID-19), the Annual Meeting will be held solely by means of remote communication, in a virtual only format. You will not be able to attend the Annual Meeting in person. You can virtually attend the Annual Meeting at the meeting time by visiting www.virtualshareholdermeeting.com/TMUS2020 and entering the16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card or on the instructions that accompany your proxy materials. The Annual Meeting will begin promptly at 8:00 a.m. PDT. Onlinecheck-in will begin at 7:45 a.m. PDT, and you should allow ample time for the onlinecheck-in procedures.
By hosting the Annual Meeting online, the Company is able to ensure the health and safety of its directors, officers, employees and stockholders. This approach also aligns with the Company’s broader sustainability goals. Attendance at the virtual Annual Meeting will provide you with the same rights to participate as you would have at anin-person meeting. Once admitted to the Annual Meeting, you may submit questions, vote or view our list of stockholders by following the instructions that will be available on the meeting website.
By Order of the Board of Directors,
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Timotheus Höttges Chairman of the Board of Directors April | ||
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 13, 20194, 2020
The Proxy Statement and Annual Report to Stockholders are available at
https://t-mobile.com/Proxy2019Proxy2020and https://www.proxyvote.com.
This summary highlights information you will find in this Proxy Statement. As it is only a summary, please review the complete Proxy Statement before you vote.
20192020 Annual Meeting Information
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Date and Time: Thursday, June 8:00 a.m. | Location:
| Record Date: April | Proxy Mail Date: On or about April |
How to Vote
By Internet: Visit the website listed on your proxy card |
By Phone: Call the telephone number on your proxy card |
By Mail: Sign, date and return your proxy card in the enclosed envelope
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at the virtual Annual Meeting
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| Voting: | Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on. | |
| Admission: |
proxy card or on the instructions that accompany your proxy materials. The Annual Meeting will begin promptly at 8:00 a.m. PDT. Online online | |
Annual Meeting Agenda and Vote Recommendations:
Matter | Board Vote Recommendation | Page Reference (for more details) | ||||||
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| FOR | ||||||
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| FOR | 28 | ||||
Proposal 4 | Stockholder Proposal for Limitations on Accelerated Vesting of Equity Awards in the Event of a Change of Control |
| AGAINST | |||||
In this Proxy Statement, “we,” “our,” “us,”“T-Mobile” and the “Company” refer toT-Mobile US, Inc. as a standalone company prior to April 1, 2020, the date we completed the Sprint Combination (as defined below), and after April 1, 2020, refer to the combined company as a result of the Sprint Combination. “Annual Meeting” refers to the 20192020 Annual Meeting of Stockholders. We first made this Proxy Statement and form of proxy card available to stockholders on or about April 26, 2019.21, 2020.
PROXY SUMMARY STATEMENT
Good Corporate Governance Practices
Governance is real atT-Mobile. In connection with the business combination with MetroPCS Communications, Inc. completed in 2013 (the “Metro Combination”),T-Mobile became a publicly traded company with a significant stockholder, Deutsche Telekom AG (“Deutsche Telekom”). On April 29, 2018, we entered into the Business Combination Agreement with Sprint to merge in anall-stock transaction (the “Sprint Combination”), and on April 1, 2020, we completed the Sprint Combination. After the Sprint Combination we have two significant stockholders, Deutsche Telekom and SoftBank Group Corp. (“SoftBank”). Each of Deutsche Telekom and SoftBank has the right to designate a number of our directors, and as a result, we have stockholder representation on our Board. Directors approach each Board decision with a mindset that is intellectually independent from management. In addition, our Board has structured our corporate governance program to promote the long-term interest of stockholders, strengthen the Board’s and management’s accountability and help build public trust in the Company.
 | Unclassified Board and Annual Election of Directors | | Annual Board and Committee Self-Evaluations | |||
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| | No Poison Pill | |||
| Separation of Chairman and Chief Executive Officer Roles | | Stockholder Right to Call Special Meeting and Act by Written Consent | |||
| Lead Independent Director | | Anti-Hedging, Anti-Short Sale and Anti-Pledging Policies | |||
| Independent Chairs of the Audit, Compensation and Nominating and Corporate Governance Committees | | Executive Compensation Driven by Pay for Performance | |||
| Regular Executive Sessions of Independent Directors | | Stock Ownership Guidelines for Executive Officers and Directors | |||
| Comprehensive Risk Oversight by the Board and its Committees | | Clawback Policy to Recapture Incentive Payments | |||
T-Mobile Had Record Financial ResultsFinancials and Strong Customer Growth in 20182019, Beating Increased Guidance While Balancing Growth and Proved, Once Again, That Taking Care of Customers Is Also Good for StockholdersProfitability
T-Mobile had record financial results in 2018,2019, including record servicetotal revenues, record total service revenues, strong net income and record fourth quarter Adjusted EBITDA, strong net cash from operating activities and record free cash flow.EBITDA. We added 7.0 million total net customers in 2018,2019, marking the fifthsixth year in a row of more than 5 million total net customer additions. We ended the year with 79.786.0 million total customers, of which 67.9 million were total branded customers.
OurWe continued to successfully translate customer growth translated into industry-leading year-over-year service revenue percentage growth. Service revenue of $32.0 billion for 2018 grew at 6.1% year over year. Net income of $2.9 billion for 2018 was down 36.3%In 2019, total revenues increased 4% year over year due to the impact from the Tax Cuts and Jobs Act (the “Tax Act”), which resulted in an income tax benefita record of $2.2$45.0 billion, in 2017, and grew 22.6%total service revenues increased 6% year over year excluding the impact from the Tax Act.to a record of $34.0 billion, net income increased 20% year over year to $3.5 billion, and Adjusted EBITDA of $12.4 billion grew 10.6%increased 8% year over year.year to a record of $13.4 billion.
As ofIn December 31, 2018,2019, we launched America’s first nationwide 5G network, including prepaid 5G with Metro byT-Mobile, coveredcovering more than 325200 million people and more than 5,000 cities and towns across the United States with 5G. At the end of the fourth quarter of 2019, 327 million Americans were covered by our 4G LTE. LTE network.
Our stock price increased by 285.0%374.7% from May 1, 2013 (the first day of trading after the Metro Combination) through December 31, 2018. Looking back three years, our stock price has increased 63.3% (January 4, 2016 through December 31, 2018).and 23.3% during 2019 alone.
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 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.
| 2 | T-Mobile |
PROXY SUMMARY STATEMENT
Executive Compensation Highlights – Paying for Performance
Our executive compensation program is aligned with our business strategy and is designed to attract and retain top talent, reward short-term and long-term business results and exceptional individual performance, and, most importantly, maximize stockholder value.
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 Company’s securities | |||
| No excise taxgross-ups | |||
| No guaranteed | |||
| No plans that encourage excessive risk taking | |||
| No single-trigger vesting of equity awards upon a change in control | |||
| No significant perquisites | |||
| T-Mobile | 3 |
Corporate Governance atT-Mobile
T-Mobile Is Committed to Good Corporate Governance
Our corporate governance practices and policies promote the long-term interests of our stockholders, strengthen the accountability of our Board and management and help build public trust.
Our Board has established a boardroom dynamic that encourages meaningful and robust discussions based on each director’s unique and
diverse background, resulting in informed decision-making that seeks to maximize stockholder value and promotes stockholder interests. Directors exercise thorough oversight of decisions regarding the Company’s strategy and outlook. The Board regularly reviews developments in corporate governance and updates its practices and governance materials as it deems necessary and appropriate.
| Governance Highlights |
| Unclassified Board and Annual Election of Directors |
| Annual Board and Committee Self-Evaluations | |||||
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| No Poison Pill | |||||
| Separation of Chairman and Chief Executive Officer Roles |
|  | Stockholder Right to Call Special Meeting and Act by Written Consent | ||||
| Lead Independent Director |
| | Anti-Hedging, Anti-Short Sale and Anti-Pledging Policies | ||||
| Independent Chairs of the Audit, Compensation and Nominating and Corporate Governance Committees |
| Executive Compensation Driven by Pay for Performance | |||||
| Regular Executive Sessions of Independent Directors |
| Stock Ownership Guidelines for Executive Officers and Directors | |||||
| Comprehensive Risk Oversight by the Board and Its Committees |
| Clawback Policy to Recapture Incentive Payments | |||||
| Key Governance Materials |
| Certificate of Incorporation |
| Charter for Each Board Committee | |||
| Bylaws |
| Code of Business Conduct | |||
| Corporate Governance Guidelines |
| Code of Ethics for Senior Financial Officers | |||
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| Speak Up Policy (f.k.a. Whistleblower Protection Policy) | |||
| Stockholders’ Agreement |
| Supplier Code of Conduct | |||
These documents are available under the “Governance” section of our website athttp://investor.t-mobile.com or are listed as exhibits to the Annual Report on Form10-K filedincluded in our filings with the Securities and Exchange Commission (“SEC”).
| 4 | T-Mobile |
CORPORATE GOVERNANCE ATT-MOBILE
Governance Framework and Code of Business Conduct
Our Board has adopted Corporate Governance Guidelines that, together with our certificate of incorporation, our bylaws and the Stockholder’sStockholders’ Agreement with Deutsche Telekom and SoftBank, provide a framework for the effective governance of the Company.
The Board also adopted our Code of Business Conduct, which establishes the standards of ethical conduct applicable to our directors, officers and employees. In addition, we have a Code of Ethics for Senior Financial Officers. In the event of a waiver by the Board of any Code of Business Conduct or Code of Ethics for Senior Financial Officers provisions applicable to directors or executive officers, we will promptly disclose the Board’s actions on our website.
Our Board and Director Independence
Our
Subsequent to the Annual Meeting, our Board consistswill consist of 1213 directors, twoone of whom areis currently employed by the Company. Pursuant to our certificate of incorporation and the Stockholder’sStockholders’ Agreement, Deutsche Telekom hasand SoftBank have certain rights to designate director nominees and to have such designees serve on the committees of the Board. See “Transactions with Related Persons and Approval — Transactions with Deutsche Telekom and SoftBank — Stockholder’sStockholders’ Agreement” for more information.
We Are a Controlled Company with Certain Exemptions
Since Deutsche Telekom beneficially owns a majorityand SoftBank hold approximately 43.6% and 24.7%, respectively, of our outstanding stock (approximately 63.0%shares as of March 31, 2019),April 1, 2020, and pursuant to the proxy,lock-up and right of first refusal agreement between Deutsche Telekom and SoftBank, SoftBank is obligated to vote its shares ofT-Mobile common stock as directed by Deutsche Telekom, we are deemed a “controlled company” under the NASDAQ Stock Market LLC (“NASDAQ”) rules. These rules exempt “controlled companies,” like us, from certain corporate governance requirements, including: (i) that a majority of our Board be independent, (ii) that our Nominating and Corporate Governance Committee be composed entirely of independent directors, and (iii) that our Compensation Committee be composed entirely of independent directors. In addition, we rely on the exemption for controlled companies from NASDAQ rules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act that relaterelates to compensation committee member independence and compensation committee consultants.
Director Independence
On an annual basis, our Board evaluates the independence of each director, including nominees for election to the Board, in accordance with NASDAQ rules and our Corporate Governance Guidelines. For certain types of relationships, NASDAQ rules require us to consider a director’s relationship with the Company, and also with any parent or subsidiary in a consolidated group with the Company, which includes Deutsche Telekom and its affiliates. Each of the following directors or director nominees is an “independent director” under NASDAQ rules and our Corporate Governance Guidelines:
∎ Srikant M. Datar* | ∎ Kelvin R. Westbrook* | |
∎ Lawrence H. Guffey ∎ Stephen Kappes | ∎ Teresa A. Taylor* | |
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| * | The Board has determined that each member of the Audit Committee meets the heightened independence criteria applicable to audit committee members under NASDAQ and SEC rules. |
Board Leadership
Our Chairman and Our Chief Executive Officer Roles Are Separated
We believe that separating the roles of Chief Executive Officer and Chairman of the Board is appropriate for the Company and in the best interests of the Company and its stockholders at this time. Timotheus Höttges, Deutsche Telekom’s Chief Executive Officer, is the Chairman of the Board. Key responsibilities of our Chairman include:
| ∎ | Managing the overall Board function |
| ∎ | Chairing all regular sessions of the Board |
| ∎ | Establishing the agenda for each Board meeting in consultation with the lead independent director, our Chief Executive Officer and other senior management, as appropriate |
| ∎ | Assisting in establishing, coordinating and reviewing the criteria and methods for evaluating, at least annually, the effectiveness of the Board and its committees |
The separation of the offices allows Mr. Höttges to focus on management of Board matters and allows our Chief Executive Officer to focus on managing our business. Additionally, we believe the separation of the roles ensures the objectivity of the Board in its management oversight role, specifically with respect to reviewing and assessing our Chief Executive Officer’s performance. The Board believes that its role in risk oversight did not impact the leadership structure chosen by the Board.
We Have a Lead Independent Director
Our Board has also chosen to appoint a lead independent director. Teresa A. Taylor is our current lead independent director. Key responsibilities of our lead independent director include:
| ∎ | Coordinating the activities of our independent directors |
| ∎ | Calling and presiding over the executive sessions of the independent directors |
| ∎ | Functioning as a liaison between the independent directors and the Chairman of the Board and/or the Chief Executive Officer |
| ∎ | Providing input on the flow of information to the Board, including the Board’s agenda and schedule |
Board Meetings and Director Attendance
Our Board meets regularly throughout the year. Committees typically meet the day prior to the Board meeting, and, depending on the schedule of the Board meeting, the Audit Committee holds additional meetings in connection with quarterly earnings. Directors are expected to attend all meetings of the Board and each committee on which they serve, as well as the Annual Meeting of Stockholders. At each regularly scheduled Board meeting (or more frequently if necessary), time is set aside for executive sessions where outside(non-management) directors meet without management present. In addition, our Corporate Governance Guidelines require the independent directors to meet at least twice each year in executive session, with the lead independent director presiding at such executive session.
| ∎ | Our Board met |
| ∎ | Each director attended at least 75% of the total number of meetings of the Board and Board committees on which he or she served |
| ∎ | All directors who then served on the Board, other than one, attended our |
| T-Mobile | 5 |
CORPORATE GOVERNANCE ATT-MOBILE
ANNUAL BOARD AND COMMITTEE EVALUATIONS
The Nominating and Corporate Governance Committee oversees the annual Board and committee self-evaluation process. In 2018,2019, the Committee engaged an outside consultant to coordinate and provide insight on the annual self-evaluation process.
| The Board is committed to a comprehensive self-evaluation process to review the Board’s and each committee’s overall effectiveness. |
Noted below are the high-level steps of the Board and Committeecommittee self-evaluation process.
Board Evaluation Process
STEP 1 Begin Evaluation Process The Chair of the Nominating and Corporate Governance Committee initiates, with the assistance of the Corporate Secretary, the annual evaluation process by engaging an outside evaluation consultant STEP 2 Evaluation Working closely with management, the outside consultant distributes comprehensive questionnaires to each director soliciting feedback on the Board's and each relevant Committee's effectiveness, covering topics such as: Strategic Oversight Scope & Content of Presentations Risk Management Succession Planning STEP 3 Analysis The outside consultant reviews the responses and prepares an executive summary for the Board and each Committee, which includes an overview of director responses and guidance on any material issues. The Chair of the Nominating and Corporate Governance Committee reviews the reports together with management and works directly with the consultant to evaluate the findings. STEP 4 Results and Findings The Nominating and Corporate Governance chair, with assistance from the outside consultant, presents the results and findings to the Board. Each committee reviews the committee results and findings. STEP 5 Follow Up Results requiring additional consideration are addressed at subsequent board and committee meetings and reported back to the Board, where appropriate. STEP 1 Begin Evaluation Process The Chair of the Nominating and Corporate Governance Committee initiates, with the assistance of the Corporate Secretary, the annual evaluation process by engaging an outside evaluation consultant. STEP 2 Evaluation Working closely with management, the outside consultant distributes comprehensive questionnaires to each director soliciting feedback on the Board's and each relevant Committee's effectiveness, covering topics such as: Strategic Oversight Scope & Content of Presentations Risk Management Succession Planning STEP 3 Analysis The outside consultant reviews the responses and prepares an executive summary for the Board and each Committee, which includes an overview of director responses and guidance on any material issues. The Chair of the Nominating and Corporate Governance Committee reviews the reports together with management and works directly with the consultant to evaluate the findings. STEP 4 Results and Findings The Nominating and Corporate Governance chair, with assistance from the outside consultant, presents the results and findings to the Board. Each committee reviews the committee results and findings. STEP 5 Follow Up Results requiring additional consideration are addressed at subsequent board and committee meetings and reported back to the Board, where appropriate.
HOW TO COMMUNICATE WITH OUR BOARD
You may contact the Chairman of the Board, the Board as a whole, the lead independent director, or any individual director as follows:
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T-Mobile US, Inc. The Board of Directors c/o Corporate Secretary 12920 SE 38th Street Bellevue, Washington 98006
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After receipt, communications will generally be forwarded to the Chairman of the Board, the whole Board, the lead independent director or specific directors as the Corporate Secretary deems appropriate based on the content of, and the matters raised in, the communications. Communications that are unrelated to the duties and responsibilities of the Board or are unduly hostile, threatening, potentially illegal or similarly unsuitable will not be forwarded. Responses to letters and any communications that are excluded are maintained by the Company and are available to any director upon request.
| 6 | T-Mobile |
CORPORATE GOVERNANCE ATT-MOBILE
BOARD COMMITTEES AND RELATED MATTERS
Our Board has foursix standing committees: Audit, CEO Selection, Compensation, Executive, and Nominating and Corporate Governance.Governance and Transaction. The CEO Selection and Transaction Committees are new committees formed upon the Sprint Combination. The Board makes committee and committee chair assignments annually at its meeting immediately following the Annual Meeting of Stockholders, although further changes may be made from time to time as deemed appropriate by the Board.
Each committee has a Board-approved charter, which is reviewed annually by the respective committee. Recommended changes, if any, are submitted to the Board for approval. Each committee may retain and compensate consultants or other advisors as necessary for it to carry out its duties, without consulting with or obtaining the approval of the Board or the Company. A copy of the charter for each standing committee can be found on the Investor Relations section of our website athttp://investor.t-mobile.com by selecting “Governance Documents” under the “Governance” tab.
Audit Committee
Chair: Srikant M. Datar
Additional Members
Teresa A. Taylor Kelvin R. Westbrook
Meetings Held in | As more fully described in its charter, the primary responsibilities of the Audit Committee are to:
∎ Assist the Board in oversight of the integrity of the Company’s financial statements and the financial reporting process, disclosure controls and procedures and internal audit functions ∎ Directly appoint, compensate and retain our independent auditor, including the evaluation of the independent auditor’s qualifications, performance and independence ∎Pre-approve the retention of the independent auditor for all audit and suchnon-audit services as the independent auditor is permitted to provide the Company and approve the fees for such services ∎ 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 ∎ Develop and oversee compliance with the Code of Ethics for Senior Financial Officers and the Code of Business Conduct for all employees, officers and directors ∎ Establish procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters ∎ Review and approve all related person transactions pursuant to the Company’s Related Person Transaction Policy
Our Board has determined that each member of the Audit Committee meets all of the requirements for audit committee members under applicable NASDAQ rules, and each of Messrs. Datar and Westbrook is an “audit committee financial expert” as defined in applicable SEC rules.
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| T-Mobile | 7 |
CORPORATE GOVERNANCE ATT-MOBILE
Compensation Committee
Chair: Kelvin R. Westbrook
Additional Members
Christian P. Illek Raphael Kübler
Meetings Held in
Section 16 Subcommittee:
Kelvin R. Westbrook
| As more fully described in its charter, the primary responsibilities of the
∎ Review and approve the Company’s overall executive compensation philosophy and its programs, policies and practices regarding the compensation of its executive officers ∎ Review and approve corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluate the Chief Executive Officer’s performance in light of those goals and objectives and determine and approve the Chief Executive Officer’s compensation ∎ Review and approve annual and long-term compensation for the Company’s executive officers ∎ Oversee the development of succession plans for the Chief Executive Officer and senior management ∎ Assist the Board in reviewing the results of any shareholder advisory votes, or responding to other shareholder communications, that relate to executive officer compensation, and consider whether to make or recommend adjustments to the Company’s policies and practices as a result of such votes or communications ∎ Review a report from management regarding potential material risks, if any, created by the Company’s compensation policies and practices ∎ Review and make recommendations to the Board with respect to compensation for non- employee members of the Board ∎ Review and recommend to the Board for its approval all Company equity compensation plans and oversee the administration of such plans ∎The Section 16 Subcommittee has
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The Compensation Committee Has Engaged an Independent Compensation Consultant
The Compensation Committee has retained Mercer (a wholly owned subsidiary of Marsh & McLennan Companies, Inc.), a well-recognized employee benefits and compensation consulting firm, as its independent compensation consultant. Mercer assists the Committee in its evaluation of the compensation and benefits provided to the Chief Executive Officer and the other executive officers. Mercer generally attends the Committee meetings at which executive officer compensation is discussed and provides information, research and analysis pertaining to executive compensation as requested by the Compensation Committee. Mercer also updates the Compensation Committee on market trends.
∎ | The Compensation Committee determined that Mercer is (and was, during |
| interest that would prevent Mercer from serving as an independent consultant to the Compensation Committee. ∎ | Mercer also determined that it was independent from management and confirmed this in a written statement delivered to the Compensation Committee. |
During 2018,2019, Mercer provided executive compensation services to the Company. The aggregate fees for such services were approximately $349,500.$362,000. In addition, Mercer provided services to the Company for investment and benefits consulting and retirement plan consulting. The aggregate fees for such services were approximately $233,000.$325,000.
Compensation Committee Interlocks and Insider Participation
During 2018,2019, the following individuals served on the Compensation Committee for all or part of the year: Ms. Taylor, Dr.Messrs. Guffey, Illek, and Messrs. W. Michael Barnes, Thomas Dannenfeldt, Guffey, Kübler, Langheim, Swantee and Westbrook. No member of the Compensation Committee who served during 20182019 was an officer or employee of the Company or any of its subsidiaries during the year, was formerly a Company officer or had any relationship otherwise requiring disclosure as a compensation committee interlock.
| 8 | T-Mobile |
CORPORATE GOVERNANCE ATT-MOBILE
CEO Selection Committee
Chair: Timotheus Höttges Additional Members Marcelo Claure Christian P. Illek Thorsten Langheim Teresa A. Taylor | As more fully described in its charter, the primary responsibilities of the CEO Selection Committee are to: ∎ Select, appoint, hire, fire and recall from office the Chief Executive Officer of the Company ∎ Consult with SoftBank as required for certain decisions to fire and recall from office the Chief Executive Officer of the Company | |||
Executive Committee
Chair: Timotheus Höttges
Additional Members
Marcelo Claure Ronald D. Fisher Lawrence H. Guffey
Raphael Kübler Thorsten Langheim
Meetings Held in
*Per the Executive Committee’s charter, the Committee meets as often as it determines necessary
| As more fully described in its charter, the primary responsibilities of the Executive Committee are to:
∎ Monitor the Company’s operating performance relative to its operating objectives, strategy, plans and actions ∎ Provide management with feedback regarding the Company’s operating objectives, strategy, plans, and actions, as well as the Company’s operating performance ∎ Consider strategic operating goals, opportunities and risks ∎ Recommend changes to the Company’s operating objectives, strategy, plans, and actions for consideration by the Board, as appropriate
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| T-Mobile 2020 Proxy Statement | 9 |
CORPORATE GOVERNANCE ATT-MOBILE
Nominating and Corporate Governance Committee
Chair: Teresa A. Taylor
Additional Members
Meetings Held in
| 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
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Transaction Committee
Chair: Thorsten Langheim Additional Members Ronald D. Fisher Christian P. Illek Lawrence H. Guffey | As more fully described in its charter, the primary responsibilities of the Transaction Committee are to: ∎ Evaluate with the Company’s management and provide recommendations to the Board with respect to proposed strategic transactions for the Company and its businesses, including, but not limited to, mergers, acquisitions, divestitures, joint ventures, and other similar transactions ∎ Monitor the progress of pending and potential strategic transactions involving the Company, its businesses and its competitors | |||
| 10 | T-Mobile |
CORPORATE GOVERNANCE ATT-MOBILE
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, 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, and fourth-party risks.
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.
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 have direct reporting communicationscommunication channels to the Audit Committee for purposes of reporting or discussing concerns, and have regular meetings with the Audit Committee and/or its members. They provide a quarterly enterprise-wide risk assessment, and annual fraud risk assessment, and compliance risk
reporting or assessments to the Audit Committee, and update 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 internal audit and SOX Compliance program, as well as other compliance and ethics programs, as more fully set out in its charter.
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 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 discouraging behavior that may result in unnecessary or excessive 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) 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 |
| ∎ | 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. |
| T-Mobile 2020 Proxy Statement | 11 |
CORPORATE GOVERNANCE ATT-MOBILE
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.
Transaction Committee
The Transaction Committee oversees risks related to strategic transactions involving the Company and its businesses.
CORPORATE GOVERNANCE ATT-MOBILE
Non-Employee Director Compensation Program
Our“non-employee directors”—directors who are not employees of the Company or officers or employees of Deutsche Telekom—areTelekom 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
assessment, thenon-employee director compensation program is adjusted as appropriate to ensure alignment with market practices.
Key Features of OurNon-Employee Director 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 stock ownership guidelines of five times thenon-employee director’s annual cash retainer |
Elements ofNon-Employee Director Compensation | Amount ($) | |||
Annual cash retainer | ||||
Additional annual cash retainer for: | ||||
Lead Independent Director | ||||
Audit Committee Chair | ||||
Compensation Committee Chair | 25,000 | |||
Nominating and Corporate Governance Committee Chair | 15,000 | |||
Additional Retainer for Audit Committee Members | 15,000 | |||
Annual award of Restricted Stock Units | ||||
Additional cash amounts for each Board and committee meeting in excess of 10 meetings per year: | ||||
In person | 2,000 | |||
By telephone | 1,000 | |||
The annual award of 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 RSURSUs award 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 ofT-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 later of (i) the date we adopted the policy (May 1, 2013) and (ii) the date on which he or she becomes anon-employee director. 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, |
| 12 | T-Mobile |
CORPORATE GOVERNANCE ATT-MOBILE
20182019Non-Employee Director Compensation Table
During fiscal year 2018,2019, the Company’snon-employee directors received the following compensation for their services:
Name
|
Fees Earned or
|
Stock
|
All Other
| Total ($)
|
Fees Earned or
|
Stock
|
All Other
| Total ($)
| ||||||||||||||||||||||||
W. Michael Barnes(1) | 70,750 | 178,798 | 7,221 | 256,769 | ||||||||||||||||||||||||||||
Srikant M. Datar | 198,000 | 178,798 | 4,195 | 380,993 | 212,701 | 247,472 | 5,274 | 465,447 | ||||||||||||||||||||||||
Lawrence H. Guffey | 137,000 | 178,798 | 9,471 | 325,269 | 160,242 | 247,472 | 5,080 | 412,794 | ||||||||||||||||||||||||
Olaf Swantee(2) | 65,918 | — | — | 65,918 | ||||||||||||||||||||||||||||
Olaf Swantee(1) | 54,000 | 247,472 | — | 301,472 | ||||||||||||||||||||||||||||
Teresa A. Taylor | 193,250 | 178,798 | 11,217 | 383,265 | 224,771 | 247,472 | — | 472,183 | ||||||||||||||||||||||||
Kelvin R. Westbrook | 174,500 | 178,798 | 12,445 | 365,743 | 204,242 | 247,472 | 3,809 | 455,523 | ||||||||||||||||||||||||
| (1) | Mr. |
| (2) |
|
Includes meeting fees earned as an Independent Committee member. |
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 1 to the Consolidated Financial Statements included in the Company’s Annual Report on Form10-K for the year ended December 31, |
Includes (i) phone perquisites under the Board of Directors Phone Perquisite |
DIRECTOR NOMINATION, SELECTION AND QUALIFICATIONS
Qualifications and Diversity
The Board has adopted director selection guidelines, which the Nominating and Corporate Governance Committee considers in evaluating each director candidate. The director selection guidelines specifically provide that the Company seeks to maintain a Board comprised of talented and dedicated directors with a diverse mix of expertise, experience, skills and backgrounds.
Subject to Deutsche Telekom’s and SoftBank’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, including gender, race, age, ethnic, geographic, cultural and professional diversity |
| ∎ | 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 engage 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 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. In 2019, four of our 12 directors were female or minority 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 and SoftBank’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.
| T-Mobile 2020 Proxy Statement | 13 |
CORPORATE GOVERNANCE ATT-MOBILE
Nomination Process
In addition to candidates designated by Deutsche Telekom and SoftBank, 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,
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 and SoftBank’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.
| 14 | T-Mobile |
CORPORATE GOVERNANCE ATT-MOBILE
DIVERSITY AND INCLUSION
Our People
We are a company of approximately 53,000 (as of December 2019) diverse and amazing employees. Our ability to continue to deliver unbelievable results year over year is impossible without our employees.
AtT-Mobile, we provide exceptional benefits to our employees such as:
| ∎ | Medical, dental and vision benefits. We offer extremely competitive medical benefits including these special benefits: |
| ∎ | Autism coverage, including Applied Behavioral Analysis services |
| ∎ | Gender-affirming services, including surgery coverage, for transgender employees or their family members |
| ∎ | Infertility benefits |
| ∎ | Telemedicine |
| ∎ | Access to personal health advocates offering independent guidance |
| ∎ | Tuition assistance for all full-time and part-time employees |
| ∎ | Employees are owners too! Annual stock grants to all full-time and part-time employees |
| ∎ | A discounted Employee Stock Purchase Plan |
| ∎ | Many childcare benefits, including a childcare subsidy |
| ∎ | Backup childcare and Eldercare |
| ∎ | LiveMagenta: a custom-branded program for employee engagement and well-being. It includes free access for employees and family members to life coaches, financial coaches and many tools and resources for healthy living |
| ∎ | Employee mobile service and accessory discounts |
| ∎ | Paid parental leave benefits for moms and dads (up to seven weeks of 100% paid maternity leave for birth moms and up to three weeks of 100% paid family bonding time for |
| ∎ | Adoption/Surrogacy benefits |
| ∎ | 401(k) Savings Plan |
| ∎ | Matching program for employee donations and volunteering |
| ∎ | Life insurance and short-term and long-term disability insurance |
| ∎ | Discounted group rates for legal, pet, auto, home and AFLAC insurance and identity protection monitoring |
| ∎ | Subsidies and discounts on fitness centers, retail items, travel, entertainment, dining and much more! |
It’s no secret theUn-carrier works hard, but we play hard too! In fact, Employee Recognition is everywhere and powerful atT-Mobile! We didn’t get to where we are without our employees! From online certificates to award to their colleagues and reward points toCEO-specific awards andtop-performer recognition events in Las Vegas and Maui, we believe recognizing great talent goes a long way and we celebrate those who work hard every day to make our customers #1 and continue to change wireless for good!
We also believe in providing opportunities for our employees to improve their skills and advance their careers. We do this through a variety of programs, including:
| ∎ | Award-winning career and development programs for all employees at all levels |
| ∎ | Transparent career paths available to employees and candidates that provide realistic progression timelines, salaries and expectations |
| ∎ | A Customer Care organization that uses over 90 types of programs to train over 32,000 front line representatives and leaders as of January 2020 |
| ∎ | ALeader-to-Executives Program that provides elite career track opportunities for select MBA students and graduates |
| ∎ | Training for employees with disabilities pursuant to U.S. Department of Labor standards |
Diversity and Inclusion
We are the most diverse wireless carrier in the U.S. As of January 2020, 62% of our employees are minority employees and 42% of them are female. Every day we celebrate diversity and inclusion – from our workplace policies, to our hallway conversations, to our six D&I networks with more than 52 chapters around the US and Puerto Rico. As of January 2020, more than 25,200 employees, more than 48% of allT-Mobile employees, are actively engaged in one of them.
Total Membership % 48% | Access for Disabilities Network 10,894 | Multicultural Network 15,961 | Multigenerational Network 12,927 | |||
Total Members 25,249 | Pride & Allies Network 12,946 | Veterans & Allies Network 11,483 | Women’s Leadership Network 16,017 |
Diversity and inclusion thrive atT-Mobile. It starts with at the top with the Company’s Chief Executive Officer, who also serves as the executive sponsor for our diversity and inclusion programs. Our Vice President of Diversity and Inclusion is responsible for designing, developing, aligning, and/or integrating a range of new and existing initiatives, policies and procedures into a cohesive platform that will foster a more inclusive, welcoming, supportive, and diverseT-Mobile community. Moreover, our Inclusion Council helps to drive awareness and encourage everyone to be exactly who they want to be. Our Diversity and Inclusion team conducts listening sessions, focus groups, surveys and other various methods of obtaining information and feedback from employees.
| T-Mobile 2020 Proxy Statement | 15 |
CORPORATE GOVERNANCE ATT-MOBILE
Our efforts have not gone unrecognized. In 2019, we were named Forbes Best Employers for Women 2019, Forbes Best Employers for Diversity 2019, and we were also named to Forbes Just Companies in 2020. In addition, we received a perfect 100 on the Human Rights Campaign
Corporate Equality Index for seven years in a row, were designated a Military Friendly Employer by Military Friendly for 11 years running, and received a score of 100% on the Disability Equality Index.
T-Mobile is Mobilizing for Good
Over the past 7 years,T-Mobile has challenged the status quo of a broken industry and transformed it by listening to customers and solving their pain points, oneUn-Carrier move at a time. We are equally committed to addressing some of the most pressing problems facing our communities and planet.
SUSTAINABILITY
T-Mobile is fully committed to sustainability – it’s simply the right thing to do! Our community expects us as theUn-carrier to shake things up by making big, industry-leading commitments and that applies just as much to the way we show up for our planet. First and foremost, we’re working toward an ambitious goal to be powered by 100% renewable energy by 2021 through our commitment to RE100. Next we’re working to increase our energy efficiency from our offices to our network — we’re taking big steps to a smaller footprint.
In 2019, we entered into five new green contracts — four solar farms and a wind farm — that will be added to our clean energy provider portfolio when they come online by 2021. These moves, in addition to the previously announced wind farm projects that we signed in 2018, will bring us to 95% of our RE100 commitment to use 100% renewable energy by 2021.
Further cementing our position as a leader in climate change,T-Mobile is the first major carrier in the U.S. to have approved science-based targets, which guide our pledge to reduce scope 1, 2 and 3 emissions in line with climate science and the Paris Agreement. Each year we report our progress through the
CDP (formerly known as Carbon Disclosure Project) framework, which helps us carefully measure and manage every aspect of our environmental impact.
And that’s not all — in 2019 we also planted more than 300,000 trees through The Nature Conservancy, and supported device recycling programs in every store that contributed to more than 28 million devices being reused or recycled since 2013.
Community
OurUn-carrier Revolution has always been about making people our highest priority, a commitment that came through loud and clear in our 2019 philanthropic, volunteer and environmental efforts. We reached new heights in our corporate social responsibility efforts last year, increasing employee volunteering and, together with theT-Mobile Foundation, contributing $15 million to programs and organizations dedicated to empowering youth, protecting the environment, fighting hunger and helping communities recover from disasters, which adds up to our largest single-year charitable contribution to date.
5G For Good
On November 7, 2019, we announced our plans for thefirst Un-carrier Move for the combined company following the closing of the Sprint Combination —5G FOR GOOD. Featuring three bold initiatives that harness the new company’s transformational network capabilities to bring accessibility and connectivity to all Americans.
Connecting Heroes Initiative 10-year commitment to provide free 5G service — unlimited talk, text, and smartphone data — to public andnon-profit state and local first-responder agencies. | Project 10 Million A $10 billion service commitment to eradicate the “homework gap” by offering free service, hotspots, and devices to 10 million households around the U.S. over five years. | T-Mobile Connect A groundbreaking prepaid service offering that will deliver a new competitive $15 per month prepaid option to everyone, especially lower-income consumers. | ||
| 16 | T-Mobile 2020 Proxy Statement |
Proposal 1 - 1—Election of Directors
20192020 Director Nominees
The Board has nominated 1213 directors for election at the Annual Meeting to serve as directors for terms that would end at the 2020 Annual Meeting of Stockholders. Olaf Swantee has not been nominated for re-election and his Board service will end on the date of the Annual Meeting. The Board would like to recognize Mr. Swantee for his services and contributions as a member of the Board. The Board has nominated a new director for election, Srini Gopalan. If elected, Mr. Gopalan’s term will begin on June 13, 2019. Other than Dr. Illek and Mr. Gopalan, all nominees were elected at the 20182021 Annual Meeting of Stockholders.
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, Datar, Gopalan, IIlek, Jacobfeuerborn,Guffey, Illek, Kübler, Langheim and Westbrook and Ms. Taylor were designated for nomination by Deutsche Telekom pursuant to its rights under our certificate of incorporation and the Stockholder’sStockholders’ Agreement. Messrs. Claure, Fisher and Kappes were designated for nomination by SoftBank pursuant to its rights under our certificate of incorporation and the Stockholders’ Agreement.
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: 2020
Age: 49 Other Public Company Boards: ∎ SoftBank ∎ Sprint (2014 to April 2020) Board Committees: ∎ Compensation | Marcelo Claure Chief Executive Officer of SoftBank International; Chief Operating Officer of SoftBank; Executive Chairman of The We Company (WeWork) Biography: Mr. Claure currently serves as Chief Executive Officer of SoftBank International, Chief Operating Officer of SoftBank and Executive Chairman of The We Company (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 has served as a director of SoftBank since June 2017 and 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 |
| T-Mobile 2020 Proxy Statement | 17 |
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2013
Age:
66 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
| |||
Director Since: 2020 Age: 72 Other Public Company Boards: ∎ SoftBank ∎ Sprint (2013 to April 2020) Board Committees: ∎ Executive ∎ Compensation | Ronald D. Fisher Director and Vice Chairman of SoftBank Group Corp.; Director and Chairman of SB Investment Advisers (US) Inc. Biography: Mr. Fisher has over 30 years of experience working with high growth and turnaround technology companies. Mr. Fisher joined SoftBank in 1995, overseeing its U.S. operations and other activities outside of Asia, and was the founder of SoftBank Capital Partners LLC. Prior to joining SoftBank, Mr. Fisher was the Chief Executive Officer of Phoenix Technologies Ltd., the leading developer and marketer of system software products for personal computers, from 1990 to 1995. Mr. Fisher joined Phoenix from Interactive Systems Corporation, a UNIX software company that was purchased by the Eastman Kodak Company in 1988. He served for five years as President of Interactive Systems, initially as Chief Operating Officer and then Chief Executive Officer. Mr. Fisher’s experience prior to Interactive Systems includes senior executive positions at Visicorp, TRW, Inc., and Israel Chemicals Ltd. (USA). Mr. Fisher currently serves as a director of Arm Limited and previously served as Chairman of Brightstar Global Group Inc., each a subsidiary of SoftBank. Mr. Fisher earned an MBA from Columbia University, New York, and a Bachelor of Commerce from the University of Witwatersrand in South Africa. 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 |
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since:
Age:
49 Other Public Company Boards: ∎ Hellenic Telecommunications Organization (OTE) Board Committees: ∎ Nominating and Corporate Governance |
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
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:
Board Committees: ∎
∎ |
Lawrence H. Guffey
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
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 |
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2013
Age:
Other Public Company Boards: ∎ Henkel AG & Co. KGaA ∎ BT Group plc
Board Committees: ∎ CEO Selection (Chair) ∎Executive (Chair) ∎ Transaction |
Timotheus Höttges Chief Executive Officer of Deutsche Telekom
Biography:
Since January 2014, Mr. Höttges has served as Chief Executive Officer of Deutsche Telekom, our
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:
Board Committees: ∎ CEO Selection ∎Compensation ∎ Executive ∎ Transaction |
Christian P. Illek Chief Financial Officer of Deutsche Telekom
Biography:
Dr. Illek has served as the Chief Financial Officer of Deutsche Telekom, our 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 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
|
| T-Mobile |
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since:
Age:
Other Public Company Boards: ∎ Sprint (2018 to April 2020)
Board Committees: ∎ Nominating and Corporate Governance ∎ Executive |
Biography:
Mr. Mr. Kappes received a Bachelor of Science in Pre-Medicine from
Qualifications and Skills Supporting Election to the Board:
∎ ∎
| |||
Director Since: 2013
Age:
Other Public Company Boards: ∎ Ströer SE & Co. KGaA ∎ Hellenic Telecommunications Organization (OTE)
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
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 |
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2013
Age:
Board Committees: ∎ CEO Selection ∎ Compensation ∎Executive ∎ |
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
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
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|
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2018
Age:
Other Public Company Boards: ∎ Shaw Communications Board Committees: ∎ Executive |
G. Michael (Mike) Sievert President and Chief
Biography:
Mr. Sievert serves as our President and Chief
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
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| 22 | T-Mobile 2020 Proxy Statement |
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2013
Age:
Lead Independent Director
Other Public Company Boards: ∎ Black Hills Corporation ∎First Interstate BancSystem, Inc.
∎ 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 | |||
PROPOSAL 1 - ELECTION OF DIRECTORS
Director Since: 2013
Age:
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 |
| T-Mobile | 23 |
The following sets forth information regarding the executive officers of the Company. Biographical information pertaining to Messrs. Legere andMr. Sievert, who areis both an executive officersofficer and directorsa director of the Company, can be found in the Section entitledtitled “Proposal 1—Election of Directors.”
Name | Age | Position | |||||
|
|
| |||||
G. Michael Sievert |
|
| President and Chief | ||||
|
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| |||||
J. Braxton Carter |
|
| Executive Vice President and Chief Financial Officer | ||||
Peter A. Ewens |
|
| Executive Vice President, Corporate Strategy and Development | ||||
|
|
| Executive Vice President | ||||
David A. Miller |
|
| Executive Vice President, General Counsel and Secretary | ||||
Neville R. Ray | 57 | President, Technology | |||||
Matthew A. Staneff |
|
| Executive Vice President and Chief | ||||
|
|
| |||||
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 ten10 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.Strategy and Development. 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 throughto 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. KeysDeeanne King
Mr. KeysMs. King 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 OperatingHuman Resource 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 MetroPCS Business,and Chief Diversity Officer. Ms. King held that position from August 2018 to April 20132020, encompassing leadership of all human resources operations and diversity and inclusion programs. From August 2017 to February 2015. Mr. KeysAugust 2018, she 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, MarketOmni-Channel Operations, West, from January 2007 until June 2007,Customer Experience and Fraud Operations. Prior to that in October of 2014 through August 2017 she served as Vice
President, Omni-Channel Operations and General Manager, Dallas, from April 2005 until January 2007. Mr. Keys holdsCustomer Experience. Ms. King received a Bachelor of ArtsBusiness Administration in Computer Information Systems degree from Baylor University in 1989 as well as completed the StateStrategic Business Leadership Series program from Georgetown University of New York at Oswego,in 2007 and a Master of Artsthe Executive Leadership Program in 2012 from SyracuseDuke 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
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.Technology. Mr. Ray joinedT-Mobile USA (then VoiceStream) in April 2000 and sincefrom December 2010 hasto November 2019, 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
| 24 | T-Mobile 2020 Proxy Statement |
EXECUTIVE OFFICERS
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.
ElizabethMatthew A. McAuliffeStaneff
Ms. McAuliffeMr. Staneff serves as our Executive Vice President Human Resources. Ms. McAuliffe isand Chief Marketing Officer, responsible for leading the human resources function that supports our employees across the country. From January 2014everything from brand strategy and insights to June 2016 she served as Senior Vice President of Total Rewards
digital experiences and Operations, encompassing leadership of all compensation, Rewards & Recognition, benefits, payroll, human resources systemsmarketing, to media, commercial, sponsorships, events, offers, promotions 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 atcustomer acquisition and management.
Mr. Staneff joinedT-Mobile.T-Mobile in November 2002. Prior to joininghis role as Chief Marketing Officer, Mr. Staneff held several leadership positions atT-Mobile, Ms. McAuliffe held various positionsincluding EVP Chief Commercial Officer, SVP Product and Customer Management, SVP and VP Customer Loyalty and more. With over 17 years of experience at Starbucks Coffee Company, a coffee retailer, in bothT-Mobile, Mr. Staneff has deep knowledge of the Law & Corporate Affairs department and the Human Resources department. Ms. McAuliffewireless industry. Mr. Staneff holds a bachelor’sMaster of Business Administration degree from Seattle University and a Bachelor of Science in Economics degree from the University of Massachusetts, Amherst and a Juris Doctor from Northeastern University School of Law.Washington.
| T-Mobile | 25 |
Proposal 2 - Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 20192020
The Audit Committee has appointed PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2019.2020. 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 |
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.
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 PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP was paid the following fees for services rendered during fiscal years 20182019 and 2017, all of2018, which were approved in conformity with the Audit Committee’spre-approval process, as described above under“Pre-Approval Process”:
2018 ($) | 2017 ($) | 2019 ($) | 2018 ($) | |||||||||||||
Audit Fees(1) |
| 9,526,000 |
|
| 9,330,000 |
| 12,206,000 | 9,526,000 | ||||||||
Audit-Related Fees(2) |
| 900,000 |
|
| 748,000 |
| 892,000 | 900,000 | ||||||||
Tax Fees(3) |
| 300,000 |
|
| 163,000 |
| 355,000 | 300,000 | ||||||||
All Other Fees(4) |
| 1,701,000 |
|
| 79,000 |
| 7,306,000 | 1,701,000 | ||||||||
Total Fees |
| 12,427,000 |
|
| 10,320,000 |
| 20,759,000 | 12,427,000 | ||||||||
| (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) | 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) | 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) | All Other Fees consist of fees for permitted services other than those that meet the criteria above and include fees associated with the |
| (5) | Approximately 2% of the fees paid by the Company to PricewaterhouseCoopers, LLP for non-audit services for the year ended December 31, 2019, were retrospectively approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01(c)(7)(i)(C) of Regulation S-X. These fees relate to procedures performed by PricewaterhouseCoopers, LLP to gain an understanding of and perform risk assessment procedures for financially relevant information technology systems that were not part of the scope of the current year financial statement audit. |
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;2019; (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.
| 26 | T-Mobile |
PROPOSAL 2 - 2—RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 20192020
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 Committee 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, 20182019 be included in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2018.2019.
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.
| T-Mobile 2020 Proxy Statement |
Proposal 3 - Advisory Vote to Approve the Compensation Provided to the Company’s Named Executive Officers for 2019
We are asking stockholders to approve an advisory,non-binding resolution (commonly referred to as a“say-on-pay” resolution) to approve the compensation of the Company’s named executive officers as reported in this proxy statement.
We urge stockholders to read the “Compensation Discussion and Analysis” section of this proxy statement, which describes how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables, notes and narrative, which provide detailed information on the compensation of our named executive officers for 2019. The Board and the Compensation Committee believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement has contributed to the Company’s recent and long-term success.
The Board has adopted a policy providing for a triennial“say-on-pay” advisory vote. In accordance with this policy and Section 14A of the Exchange Act and as a matter of good corporate governance, we are asking stockholders to approve the following advisory resolution at the Annual Meeting of Stockholders:
RESOLVED, that the stockholders ofT-Mobile US, Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers for 2019 as disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company’s Annual Meeting of Stockholders.
This advisory“say-on-pay” resolution isnon-binding on the Board. Althoughnon-binding, the Board and the Compensation Committee will review and consider the voting results when making future decisions regarding our executive compensation program. Unless the Board modifies its policy on the frequency of future“say-on-pay” advisory votes, the next“say-on-pay” advisory vote will be held at the 2023 Annual Meeting of Stockholders.
| Our Board of Directors recommends a voteFOR the advisory resolution to approve the compensation of our named executive officers |
Required Vote
The affirmative vote of a majority of the votes cast is required to approve this proposal.
| 28 | T-Mobile |
COMPENSATION DISCUSSION AND ANALYSIS
| This Compensation Discussion and Analysis (“CD&A”) describes our | ||||||||
∎ JohnJ.Legere | ∎ J.BraxtonCarter | ∎ G.MichaelSievert | ∎ NevilleR.Ray | ∎ David R. Carey | ||||
Chief Executive Officer | Executive Vice
| President and Chief Operating Officer |
| Executive Vice President, | ||||
During 2018,2019, Mr. LegereRay served as Executive Vice President and Chief Technology Officer ofT-Mobile through November 18, 2019 and, thereafter, served as our President, and Chief Executive Officer, andTechnology.
Following a multi-year, comprehensive leadership succession planning process, effective as of April 1, 2020 (the date on which the Sprint Combination closed), Mr. Sievert served as our Chief Operating Officer, through April 29, 2018 (as ratified by the Board on June 13, 2018). Thereafter, Mr. Legere servedwas appointed as our Chief Executive Officer and Mr. Sievert servedLegere ceased to serve as Chief Executive Officer. In addition, effective April 13, 2020, Mr. Carey ceased to serve as our Executive Vice President, and Chief Operating Officer.Corporate Services.
T-Mobile Had Record Financial ResultsFinancials and Strong Customer Growth in 20182019, Beating Increased Guidance While Balancing Growth and Proved, Once Again, That Taking Care of Customers Is Also Good For StockholdersProfitability
T-Mobile had record financial results in 2018,2019, including record servicetotal revenues, record total service revenues, strong net income and record fourth quarter Adjusted EBITDA, strong net cash from operating activities and record free cash flow.EBITDA. We added 7.0 million total net customers in 2018,2019, marking the fifthsixth year in a row of more than 5 million total net customer additions. We ended the year with 79.786.0 million total customers, of which 67.9 million were total branded customers.
OurWe continued to successfully translate customer growth translated into industry-leading year-over-year service revenue percentage growth. Service revenue of $32.0 billion for 2018 grew at 6.1% year over year. Net income of $2.9 billion for 2018 was down 36.3%In 2019, total revenues increased 4% year over year due to the impact from the Tax Act, which resulted in an income tax benefita record of $2.2$45.0 billion, in 2017, and grew 22.6%total service revenues increased 6% year over year excluding the impact from the Tax Act.to a record of $34.0 billion, net income increased 20% year over year to $3.5 billion, and Adjusted EBITDA of $12.4 billion grew 10.6%increased 8% year over year.year to a record of $13.4 billion.
As ofIn December 31, 2018,2019, we launched America’s first nationwide 5G network, including prepaid 5G with Metro byT-Mobile, coveredcovering more than 325200 million people and more than 5,000 cities and towns across the United States with 5G. At the end of the fourth quarter of 2019, 327 million Americans were covered by our 4G LTE. LTE network.
Our stock price increased by 285.0%374.7% from May 1, 2013 (the first day of trading after the Metro Combination) through December 31, 2018. Looking back three years, our stock price has increased 63.3% (January 4, 2016 through December 31, 2018).and 23.3% during 2019 alone.
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. 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 20182019 Named Executive Officer compensation reflectsT-Mobile’s strong 20182019 operational and financial performance.
| T-Mobile |
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 |
| 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 Company’s securities | |
| No excise tax gross ups | |
| No guaranteed | |
| No plans that encourage excessive risk taking | |
| No single-trigger vesting of equity awards upon a change in control | |
| No significant perquisites | |
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 performance are critical to our success |
Align interests of our executives with our stockholders |
Encourage appropriate risk taking |
Elements of Total Direct Compensation
Summary of Named Executive Officer Average Target Compensation as of December 31, 20182019
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.
| T-Mobile |
EXECUTIVE COMPENSATION
To promote a performance-based culture that further aligns the interests of management and stockholders, in 2018 the2019, our executive compensation program focused extensively on variable, performance-based compensation. As illustrated in the charts below, the substantial majority of our Chief Executive Officer’s and other Named Executive Officers’ actual total compensation as reported in the 20182019 Summary Compensation Table was in the form of variable compensation (short-term and long-term).
Summary of Named 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 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. 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 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 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. In connection with Mike Sievert’s employment agreement, each component of total direct compensation was benchmarked against the Peer Group targeting the 50th percentile. 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.
Executive 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 20182019 peer group was the same as our peer group at the end of 2017.2018. This peer group, which is described below, was used to set compensation for 2018.2019.T-Mobile was ranked near the median of the peer group for 20182019 both in terms of revenue and market capitalization.
| T-Mobile |
EXECUTIVE COMPENSATION
The following chart showsT-Mobile’s 20182019 peer group of 14 companies and each such company’s revenue as of fiscalyear-end and market capitalization as of December 31, 2018. Our2019. Effective February 12, 2020, Frontier Communications, Inc. (“Frontier”) was removed from our peer group for 2019 has not changed.due to Frontier’s market capitalization being significantly lower than bothT-Mobile’s and the remaining peers. In addition, effective April 1, 2020, upon the closing of the Sprint Combination, Sprint was removed from our peer group.
TMUS executive compensation 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 $779.80 Motorola Solutions, Inc. $7.34 $18.81 QUALCOMM incorporated $22.73 $68.98 Sprint 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 percentile 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 $226.9
Analysis of Executive Officer Compensation
The key components of our annual target total compensation package for executive officers are base salary, annual cash-based short-term incentive awards, and long-term equity incentive awards, including performance-based restricted stock units (“PRSUs”) and time-based restricted stock units (“RSUs”).
Target Total Direct Compensation
The Compensation Committee reviews the compensation of the Named Executive Officers based on a market analysis prepared by management in
partnership with the Compensation Committee’s independent compensation consultant. Based on the Compensation Committee’s
assessment of each Named Executive Officer in relation to peer and survey market data as well as the executive officer’s contributioncontributions to the Company’s ongoing strategy, including contributions relatedrelating to the proposed merger with Sprint Corporation (the “Sprint Combination”) pursuant to that certain Business Combination, Agreement, dated April 29, 2018, by and between the Company and certain other parties thereto (the “Sprint Business Combination Agreement”), the Compensation Committee increased the total target compensation of each of our Named Executive Officers for 2018,Messrs. Carter and Carey for 2019, including increases to one or more components of base salary, target annual short-term incentive opportunity and target annual long-term incentive opportunity. Increases to target compensation supported the continued retention and engagement of our Named Executive Officers.
The following table shows, as of December 31, 2018,2019, the target total direct compensation established for each Named Executive Officer.
Officer | Base Salary ($) | Target STIP Percent (1) | Target STIP Value ($) | Total Target Cash ($) | Target LTIP Percent (2) | Target LTIP Value ($) | Target Total Direct Compensation ($) | Base Salary ($) | Target STIP Percent (1) | Target STIP Value ($) | Total Target Cash ($) | Target LTIP Percent (2) | Target LTIP Value ($) | Target Total Direct Compensation ($) | ||||||||||||||||||||||||||||||||||||||||||
John J. Legere (3) | 2,000,000 | 200% | 4,000,000 | 6,000,000 | — | 17,250,000 | 23,250,000 | 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 | 950,000 | 150% | 1,425,000 | 2,375,000 | 250% | 5,937,500 | 8,312,500 | ||||||||||||||||||||||||||||||||||||||||||
G. Michael Sievert(4) | 1,200,000 | 200% | 2,400,000 | 3,600,000 | — | 10,350,000 | 13,950,000 | 1,200,000 | 200% | 2,400,000 | 3,600,000 | — | 10,350,000 | 13,950,000 | ||||||||||||||||||||||||||||||||||||||||||
Neville R. Ray | 900,000 | 200% | 1,800,000 | 2,700,000 | 250% | 6,750,000 | 9,450,000 | 900,000 | 200% | 1,800,000 | 2,700,000 | 250% | 6,750,000 | 9,450,000 | ||||||||||||||||||||||||||||||||||||||||||
David R. Carey | 775,000 | 125% | 968,750 | 1,743,750 | — | 4,359,375 | 6,103,125 | 775,000 | 150% | 1,162,500 | 1,937,500 | 250% | 4,843,750 | 6,781,250 | ||||||||||||||||||||||||||||||||||||||||||
| (1) | Target STIP |
| (2) | Target LTIP |
| (3) | Target STIP value and Target LTIP value for Mr. Legere are as specified in his employment agreement. |
| (4) | Target LTIP value for Mr. Sievert as specified in his term sheet. |
|
| T-Mobile |
EXECUTIVE COMPENSATION
Annual 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 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. In connection with the entrance into an amendment to the Carter Employment Agreement (as defined below) on March 25, 2019, Mr. Carter’s base salary was increased from $900,000 to $950,000, effective as ofretroactive to December 16, 2018.
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 “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. Award opportunities for each metric evaluated under the planPlan 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 20182019 short-term incentive plan (the “2018“2019 STIP”) awards for executive officers, including the Named Executive Officers, were based entirely on Company performance, which was measured by: 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 above and 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 level) for at least one of the performance metrics was required in order for the executives to receive any payment under the 20182019 STIP. If none of the minimumthreshold performance thresholds had been achieved during 2018,2019, no awards would have been paid.
Metric | Weight | Minimum (in millions) | Target (in millions) | Maximum (in millions) | Actual (in millions) | Weight | Threshold (in millions) | Target (in millions) | Maximum (in millions) | Actual (in millions) | ||||||||||||||||||||||||||||||
Total Service Revenue | 20 | % | $ | 30,223 | $ | 31,814 | $ | 32,609 | $ | 32,027 | 20 | % | $ | 31,874 | $ | 33,552 | $ | 34,390 | $ | 33,994 | ||||||||||||||||||||
Branded Net Additions | 20 | % | 1.143 | 2.858 | 3.997 | 4.919 | 20 | % | 1.140 | 2.850 | 3.986 | 4.854 | ||||||||||||||||||||||||||||
Adjusted EBITDA | 20 | % | $ | 10,411 | $ | 11,316 | $ | 11,969 | $ | 12,000 | 20 | % | $ | 11,624 | $ | 12,635 | $ | 13,358 | $ | 13,184 | ||||||||||||||||||||
Operating Free Cash Flow | 30 | % | $ | 4,015 | $ | 5,300 | $ | 5,814 | $ | 5,413 | 30 | % | $ | 4,742 | $ | 6,260 | $ | 6,867 | $ | 6,287 | ||||||||||||||||||||
Adjusted EBIT | 10 | % | $ | 4,714 | $ | 5,124 | $ | 5,397 | $ | 5,514 | 10 | % | $ | 5,271 | $ | 5,729 | $ | 6,034 | $ | 6,561 | ||||||||||||||||||||
The Company performed above target levels with respect to all five performance metrics in 2018.2019. Overall performance under the 20182019 STIP, determined based on actual performance for each performance metric and the relative weighting of each such metric (as disclosed in the table above), was achieved at 162%157% of target. The 20182019 actual results do not include the impacts of the new revenue standard, consistent with the 20182019 STIP design and targets. The following table shows
Following its review of the payouts under2019 STIP results, the 2018 STIPCompensation Committee determined that, in light of the Company’s significant capital expenditures as a result of its accelerated network buildout in calendar year 2019 while the proposed Sprint Combination was pending, and to promote a culture that encourages financial accountability and responsibility among our management team and further aligns employee pay with employee performance and the interests of our Company’s management team with those of our stockholders, it would be appropriate to adjust the overall company attainment factor to exclude the positive impact of certain transactions from the calculation of Operating Free Cash Flow for certain of our executives, including each of our Named Executive Officer based on these performance results.Officers. This exclusion resulted in a decrease in the overall company attainment factor to 149% and, accordingly, a decrease in the actual 2019 STIP payouts to our Named Executive Officers.
Officer | Base Earnings (1) ($) | Target 2018 STIP Percent (as a % of Base Earnings) | Target 2018 STIP Value ($) | Company Attainment | Total 2018 STIP Payout Value ($) | |||||||||||||||
John J. Legere (2) | 1,878,205 | — | 3,784,475 | 162% | 6,130,849 | |||||||||||||||
J. Braxton Carter | 898,077 | 150.00% | 1,347,115 | 162% | 2,182,327 | |||||||||||||||
G. Michael Sievert | 1,108,654 | 200.00% | 2,217,308 | 162% | 3,592,039 | |||||||||||||||
Neville R. Ray (3) | 879,808 | 181.73% | 1,598,874 | 162% | 2,590,177 | |||||||||||||||
David R. Carey | 774,038 | 125.00% | 967,548 | 162% | 1,567,428 | |||||||||||||||
|
|
|
| T-Mobile |
EXECUTIVE COMPENSATION
The following table shows the payouts under the 2019 STIP for each Named Executive Officer based on actual performance results, after taking into account the adjustments discussed in the preceding paragraph:
Officer | Base Earnings (1)($) | Target 2019 STIP Percent (as a % of Base Earnings) | Target 2019 STIP Value ($) | Company Attainment | Total 2019 STIP Payout Value ($) | |||||||||||||||
John J. Legere | 2,000,000 | 200% | 4,000,000 | 149% | 5,960,000 | |||||||||||||||
J. Braxton Carter | 950,000 | 150% | 1,425,000 | 149% | 2,123,250 | |||||||||||||||
G. Michael Sievert | 1,200,000 | 200% | 2,400,000 | 149% | 3,576,000 | |||||||||||||||
Neville R. Ray | 900,000 | 200% | 1,800,000 | 149% | 2,682,000 | |||||||||||||||
David R. Carey | 775,000 | 150% | 1,162,500 | 149% | 1,732,125 | |||||||||||||||
| (1) | Base earnings reflect eligible earnings as earned from 12/16/2018 to 12/14/2019 and reported byT-Mobile payroll. |
Pursuant to the Sievert Employment Agreement, Mr. Sievert’s target STIP for 2020 was increased to 250% of his base salary. In addition to the amounts paid to him under the 2019 STIP, pursuant to the terms of the Carter Employment Agreement, Mr. Carter was paid aone-time retention bonus in an aggregate amount equal to $2,500,000 (the “Carter Retention Bonus”) in March 2019 (which was subject to his continued employment through March 1, 2019).
| 34 | T-Mobile 2020 Proxy Statement |
EXECUTIVE COMPENSATION
Long-Term Incentives
We grant our executive officers long-term incentive compensation in the form of PRSUs and RSUs under the 2013 Omnibus Incentive Plan. PRSUs 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 20182019
On February 15, 2018,2019, we granted annual long-term incentive awards to the Named Executive Officers. With the exception of Mr. Legere, the Named Executive Officers received half of the aggregate value of their 20182019 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 20182019 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 theirhis annual awards, each of Messrs. Legere, Sievert, Ray and Carey wereaward, Mr. Carter was granted special long-term incentive awards, as discussed below under “— Special Equity Awards in 2018.2019.” RSU awards for 20182019 generally vest annually in three equal tranches beginning February 2019,2020, subject to the Named Executive Officer’s continued service through the applicable vesting date. The annual PRSU awards for 20182019 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.
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 20182019 PRSU awards is generally measured against the following peer group, consisting of 1413 companies: AT&T, CenturyLink, Charter Communications, Cisco Systems, Comcast, Dish Network, Frontier Communications, Intel, Liberty Global, 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. In such an event, no additional companies will be added to the peer group for purposes of determining any earned PRSU awards.
| T-Mobile | 35 |
EXECUTIVE COMPENSATION
The total 20182019 target long-term incentive grant value and the number of annual PRSUs and RSUs awarded are shown below for each Named Executive Officer. 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 Number of PRSUs (#)
| Number of
| Total 2019 Grant
| Target Number of PRSUs (#)
| Number of
| ||||||||||||||||||
John J. Legere |
| 15,000,000 |
|
| 173,283 |
|
| 63,012 |
|
| 17,250,000 |
|
| 186,222 |
|
| 67,717 |
| ||||||
J. Braxton Carter |
| 5,625,000 |
|
| 44,306 |
|
| 44,306 |
|
| 5,625,000 |
|
| 41,403 |
|
| 41,403 |
| ||||||
G. Michael Sievert |
| 7,125,000 |
|
| 56,121 |
|
| 56,121 |
|
| 10,350,000 |
|
| 76,182 |
|
| 76,182 |
| ||||||
Neville R. Ray |
| 5,312,500 |
|
| 41,844 |
|
| 41,844 |
|
| 6,750,000 |
|
| 49,684 |
|
| 49,684 |
| ||||||
David R. Carey |
| 4,359,375 |
|
| 34,337 |
|
| 34,337 |
|
| 4,843,750 |
|
| 35,653 |
|
| 35,653 |
| ||||||
| (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. |
InEffective as of March 25, 2019, in connection with the execution ofentrance into the Business CombinationCarter 2019 Second Agreement effective as of April 29, 2018 (and commencing with annual awards granted in calendar year 2019)(as defined below), we increased certain Named Executive Officers’ targetMr. Carter’s annual long-term incentive grant values as follows:award target value increased to $5,937,500. Pursuant to the Carter 2020 Third Amendment (as defined below), commencing January 1, 2020, Mr. Legere: $17,250,000;Carter is no longer eligible for grants of annual long-term incentive awards. In addition, pursuant to the Sievert Employment Agreement, Mr. Sievert: $10,350,000.Sievert’s annual long-term incentive award target value increased to $13,500,000 effective January 1, 2020. See “—Employment Arrangements” below for additional details.
Special Equity Awards in 20182019
In February 2018, to stabilize our senior leadership team andMarch 2019, to incentivize continued highstrong performance during a period of significant organizational uncertainty related to potential M&A activity,and in conjunction with the Carter 2019 Second Amendment, the Company granted Mr. Carter (i) aone-time special PRSUsRSU award with a target value equal to $3,000,000 to Messrs. Rayof $156,250 (the “CarterTrue-Up RSUs”), and Carey.(ii) aone-time PRSU award with a target value of $156,250 (the “CarterTrue-Up PRSUs”). In addition, Mr. Carter was granted aone-time special PRSU award with a target value of $3,500,000 (the “Carter Transaction PRSUs”). These PRSUsRSU and PRSU awards are subject to the same vesting schedule and other terms and conditions (including vesting conditions and, with respect to the PRSUs, performance conditions) applicable to the annual awards of RSUs and PRSUs granted to the Named Executive Officers on February 15, 20182019 (see “— Long-Term Incentive Awards Granted in 2018”2019” above for additional information), except that, in orderwith respect to further align 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). The number of special PRSUs awarded to Messrs. Ray and Carey is shown below.
Officer
| Grant
| Total Grant
| 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, in connection with the execution of the Business Combination Agreement and given the immense regulatory and advocacy work associated with a merger of this size and in this industry and related business planning activities, all while continuing to deliver business results 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 of 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 theseCarter Transaction PRSUs are outlined below. The Transaction PRSUs are generally subject to the same terms and conditions as the annual PRSUs granted to the Named Executive Officers on February 15, 2018 (see “— Long-Term Incentive Awards Granted in 2018” above for additional information), except thatonly, (i) for Mr. Legere, 50% of his Transactionsuch PRSUs willwere eligible to vest upon the earlier ofon the closing of the Sprint Combination, or April 30, 2020, and (ii) the remaining 50% of his Transactionsuch PRSUs willwere eligible to vest on April 30, 2020, (ii) for Mr. Carey, 50%the third anniversary of his Transaction PRSUs will vest upon the earlier of the closing of the Sprint Combination or April 29, 2020, and the remaining 50% 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 earlier of the closing of the Sprint Combination or April 29, 2021, and the remaining 50% of their Transaction PRSUs will vest on April 29, 2021, subject,2018, in each case, subject to the applicable Named Executive Officer’sMr. Carter’s continued employment through the applicable vesting date (except as otherwise provided in the applicable employment arrangement and/or award agreement).date. The total target grant values and the number of Transactionspecial RSUs and PRSUs awarded to each Named Executive OfficerMr. Carter is shown below.
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
| 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 |
| |||
Officer
| Grant
| Total Grant
| Target
| Number of
| ||||||||||||
J. Braxton Carter | 3/25/2019 | 156,250 | 2,301 | — | ||||||||||||
J. Braxton Carter | 3/25/2019 | 156,250 | — | 2,301 | ||||||||||||
J. Braxton Carter | 3/25/2019 | 3,500,000 | 56,571 | — | ||||||||||||
The annual and special RSUs and PRSUs granted during 20182019 are subject to accelerated vesting in certain circumstances as described below under
“— “— Potential Payments upon Termination or in Connection with a Change in Control”.
Pursuant to the Carter 2019 Third Amendment (as discussed in more detail below under “Employment Arrangements—Carter 2019 Third Amendment”), Mr. Carter’s then-outstanding RSUs and PRSUs (consisting of 87,632 RSUs and 174,888 PRSUs) vested in full on December 31, 2019 (with the vesting of PRSUs based on actual performance through such date).
Performance-Based Long-Term Incentive Awards Vested in 20182019
The annual PRSUs granted to each of the Named Executive Officers in 20152016 had a three-year performance period that ended on February 25, 2018.2019. Based on the Company’s RTSR at the end of the performance period, an adjustment percentage of 179%121% was earned for each Named Executive Officer. The number of 20152016 PRSUs earned by each Named Executive Officer and paid in 20182019 is set forth in the table below.
Officer | Target 2015 PRSUs ($) | RTSR Adjustment Percentage (%) | Earned PRSUs (#) | Target 2016 PRSUs (#) | RTSR Adjustment (%) | Earned PRSUs (#) | ||||||||||||||||||
John J. Legere | 260,163 | 179% | 465,691 | 215,112 | 121% | 260,285 | ||||||||||||||||||
J. Braxton Carter | 56,911 | 179% | 101,870 | 54,829 | 121% | 66,343 | ||||||||||||||||||
G. Michael Sievert | 65,041 | 179% | 116,423 | 67,223 | 121% | 81,339 | ||||||||||||||||||
Neville R. Ray | 39,025 | 179% | 69,854 | 52,938 | 121% | 64,054 | ||||||||||||||||||
David R. Carey | 36,098 | 179% | 64,615 | 34,956 | 121% | 42,296 | ||||||||||||||||||
| 36 | T-Mobile 2020 Proxy Statement |
EXECUTIVE COMPENSATION
Pursuant to the Carter 2019 Third Amendment (as discussed in more detail below under “Employment Arrangements—Carter 2019 Third Amendment”), Mr. Carter’s then-outstanding RSUs and PRSUs (consisting of 87,632 RSUs and 174,888 PRSUs) vested in full on December 31, 2019 (with the vesting of PRSUs based on actual performance through such date).
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 2018,2019, we provided personal security for Mr. Legere due to the range of security issues encountered by chief executive officers of large public companies, particularly with respect to high-profile chief executive officers such as Mr. Legere. For fiscal year 2018,2019, we paid approximately $16,000$145,000 toward Mr. Legere’s personal security.security, an increase of $129,000 from fiscal year 2018 as a result of additional security in connection with increased travel for the Sprint Combination. We also reimbursed Mr. LegereSievert for legal fees and expenses (capped at $25,000)$50,000) incurred in connection with the negotiation and preparation of the Sievert Employment Agreement. In addition, to ensure that Mr. Ray was able to both attend to personal obligations and attend critical regulatory meetings relating to the Sprint Combination in Washington D.C., in 2019, we reimbursed Mr. Ray $36,995 in travel expenses, plus an amendmentadditional $24,003 to his employment agreement. In 2018, 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) associatedcover taxes incurred by Mr. Ray in connection with such attendance.Company-paid travel.
Comprehensive 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.
Severance andChange-in-Control Benefits
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, 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.”
| T-Mobile | 37 |
EXECUTIVE COMPENSATION
Other Matters
Tax 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 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-based 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 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, 2018.2019.
Securities 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.
Clawback 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 Plan 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.
| 38 | T-Mobile |
EXECUTIVE COMPENSATION
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 later 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.
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 equity awards until the ownership thresholds are met.
∎ As of December 31,
|
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 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. TheDuring 2019, the Compensation Committee has delegated authority to the Company’s Executive Vice President, Human Resources,SVP, Total Rewards & Employee Experience, 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 Executive Officer Compensation
At the 2017 Annual Meeting of Stockholders, stockholders were asked to approve, on an advisory basis, the Named Executive Officer compensation for 2016 as reported in the proxy statement. Thissay-on-pay proposal was approved by over 99% of the shares present and entitled to vote, and the Compensation Committee believes this affirms our stockholders’ strong support of our executive compensation program.
Accordingly, while the Compensation Committee considered the results of the 2017 advisory vote along with stockholder input and other factors discussed in this CD&A, it concluded that no changes to our compensation policies and practices were warranted in response to the stockholder advisory vote. The Board has previously determined to hold advisorysay-on-pay votes every three years. Accordingly, the nextwe are asking stockholders to approve an advisorysay-on-pay stockholder vote will occurresolution on the Company’s executive compensation as reported in this proxy statement in connection with the 2020 Annual Meeting of Stockholders.
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 20182019 Form10-K.
The Compensation Committee:
Kelvin R. Westbrook, Chair
Lawrence H. Guffey *
Christian P. Illek
Lawrence H. Guffey
Raphael Kübler
Olaf SwanteeThorsten Langheim
| * | Mr. Guffey ceased to be a member of the Compensation Committee effective as of April 1, 2020 but participated in the review, discussions and recommendation with respect to the Compensation Discussion and Analysis as required by the applicable SEC rules. |
| T-Mobile | 39 |
EXECUTIVE COMPENSATION
20182019 Summary Compensation Table
The following table sets forth certain information with respect to compensation for the years ended December 31, 2019, 2018 2017 and 20162017 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) ($) | Total ($) | Year | Salary (1) ($) | Bonus (2) ($) | Stock Awards (3) ($) | Option Awards ($) | Non-Equity Incentive Compensation (4) ($) | All Other Compensation (5) ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||||||||
John J. Legere | 2018 | 1,878,205 | — | 58,494,969 | — | 6,130,849 | 34,183 | 66,538,207 | 2019 | 2,000,000 | — | 19,652,001 | — | 5,960,000 | 144,689 | 27,756,690 | ||||||||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Former Chief Executive Officer | 2018 | 1,878,205 | — | 58,494,969 | — | 6,130,849 | 34,183 | 66,538,207 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 1,618,590 | — | 16,278,923 | — | 5,666,666 | 67,027 | 23,631,206 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. Braxton Carter | 2018 | 898,077 | — | 5,374,318 | — | 2,182,327 | 11,803 | 8,466,524 | 2019 | 1,169,231 | 2,500,000 | 11,722,200 | — | 2,123,250 | 4,761,512 | 22,276,193 | ||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer | 2017 | 845,192 | — | 8,128,113 | — | 2,155,241 | 28,192 | 11,156,737 | 2018 | 898,077 | — | 5,374,318 | — | 2,182,327 | 11,803 | 8,466,524 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | 724,135 | — | 4,339,167 | — | 1,692,665 | 10,600 | 6,766,567 | 2017 | 845,192 | — | 8,128,113 | — | 2,155,241 | 28,192 | 11,156,737 | |||||||||||||||||||||||||||||||||||||||||||||||||
G. Michael Sievert | 2018 | 1,108,654 | — | 30,937,145 | — | 3,592,039 | 11,534 | 35,649,372 | 2019 | 1,200,000 | — | 11,532,431 | — | 3,576,000 | 61,273 | 16,369,704 | ||||||||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and Chief Executive Officer (6) | 2018 | 1,108,654 | — | 30,937,145 | — | 3,592,039 | 11,534 | 35,649,372 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 944,231 | — | 14,699,399 | — | 3,210,384 | 36,729 | 18,890,743 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Neville R. Ray | 2018 | 879,808 | — | 22,293,403 | — | 2,590,177 | 11,511 | 25,774,898 | 2019 | 900,000 | — | 7,521,164 | — | 2,682,000 | 72,533 | 11,175,697 | ||||||||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President, Technology | 2018 | 879,808 | — | 22,293,403 | — | 2,590,177 | 11,511 | 25,774,898 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 796,154 | — | 5,222,303 | — | 2,030,192 | 11,468 | 8,060,117 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David R. Carey | 2018 | 774,038 | — | 13,501,485 | — | 1,567,428 | 11,025 | 15,853,977 | 2019 | 775,000 | — | 5,397,151 | — | 1,732,125 | 11,299 | 7,915,575 | ||||||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President, Corporate Services | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Former EVP, Corporate Services | 2018 | 774,038 | — | 13,501,485 | — | 1,567,428 | 11,025 | 15,853,977 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | For Mr. Carter, the amount in this column for 2019 also includes aone-time cash payment of his accrued, unused paid time off as of December 31, 2019, which was paid to him on December 31, 2019 pursuant to the Carter 2019 Third Amendment (as defined below). |
| (2) | For Mr. Carter, the amount in this column represents theone-time retention bonus paid to him in March 2019, which was approved by the Compensation Committee in 2017 and became payable to him based on his continued employment with the Company through March 2019. |
| (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 1 to the Consolidated Financial Statements included in the Company’s Annual Report on Form10-K for the year ended December 31, |
For |
Amounts included in the “All Other Compensation” column are detailed in the table below. |
Officer | 401k ($) | Legal Fee ($) | Security ($) | Spousal Travel (1) ($) | Other (2) ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||||||
Name | 401k Employer Match | Legal Fee Reimbursement | Security Arrangements | Personal Travel(1) | Severance Payments (2) | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||
John J. Legere | — | 18,375 | 15,784 | — | 25 | 34,183 | 0 | 0 | 144,618 | 0 | 0 | 71 | 144,689 | |||||||||||||||||||||||||||||||||||||||
J. Braxton Carter | 11,000 | — | — | 509 | 294 | 11,803 | 11,200 | 0 | 0 | 0 | 4,750,000 | 312 | 4,761,512 | |||||||||||||||||||||||||||||||||||||||
G. Michael Sievert | 11,000 | — | — | 509 | 25 | 11,534 | 11,200 | 50,000 | 0 | 0 | 0 | 73 | 61,273 | |||||||||||||||||||||||||||||||||||||||
Neville R. Ray | 11,000 | — | — | 486 | 25 | 11,511 | 11,200 | 0 | 0 | 60,998 | 0 | 335 | 72,533 | |||||||||||||||||||||||||||||||||||||||
David R. Carey | 11,000 | — | — | — | 25 | 11,025 | 11,200 | 0 | 0 | 0 | 0 | 99 | 11,299 | |||||||||||||||||||||||||||||||||||||||
| (1) |
|
| (2) |
|
| (6) | Mr. Sievert served as our President and Chief Operating Officer in 2019 and effective as of April 1, 2020 (the date on which the Sprint Combination closed), he was appointed as our Chief Executive |
| 40 | T-Mobile |
EXECUTIVE COMPENSATION
20182019 Grants of Plan-Based Awards Table
The following table sets forth certain information with respect to grants of plan-based awards for the year ended December 31, 2018,2019, to the Named Executive Officers.
Name | Type of | Grant | Approval | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other (#) | Grant Date of Stock | Type of | Grant | Approval | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other (#) | Grant Date of Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John J. Legere | STIP | 189,224 | 3,784,475 | 7,568,950 | — | — | — | — | — | STIP | 100,000 | 4,000,000 | 8,000,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | 2/14/2018 | — | — | — | 31,506 | 126,024 | 252,048 | — | 7,669,821 | PRSU | 2/15/2019 | 2/13/2019 | — | — | — | 33,859 | 135,434 | 270,868 | — | 10,743,979 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2018 | 2/14/2018 | — | — | — | — | — | — | 63,012 | 3,808,445 | RSU | 2/15/2019 | 2/13/2019 | — | — | — | — | — | — | 67,717 | 4,879,010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | 2/14/2018 | — | — | — | 11,815 | 47,259 | 94,518 | — | 2,876,183 | PRSU | 2/15/2019 | 2/13/2019 | — | — | — | 12,697 | 50,788 | 101,576 | — | 4,029,012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. Braxton Carter | STIP | 35,625 | 1,425,000 | 2,850,000 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 4/29/2018 | 4/27/2018 | — | — | — | 149,507 | 598,029 | 1,196,058 | — | 44,140,520 | PRSU | 2/15/2019 | 2/13/2019 | — | — | — | 10,351 | 41,403 | 82,806 | — | 3,284,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. Braxton Carter | STIP | 67,356 | 1,347,115 | 2,694,230 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2019 | 2/13/2019 | — | — | — | — | — | — | 41,403 | 2,983,086 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 3/25/2019 | 3/25/2019 | — | — | — | 575 | 2,301 | 4,602 | — | 166,385 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | 2/14/2018 | — | — | — | 11,077 | 44,306 | 88,612 | — | 2,696,463 | RSU | 3/25/2019 | 3/25/2019 | — | — | — | — | — | — | 2,301 | 177,039 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2018 | 2/14/2018 | — | — | — | — | — | — | 44,306 | 2,677,855 | PRSU | 3/25/2019 | 3/25/2019 | — | — | — | 14,143 | 56,571 | 113,142 | — | 5,097,047 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
G. Michael Sievert | STIP | 110,865 | 2,217,308 | 4,434,616 | — | — | — | — | — | STIP | 60,000 | 2,400,000 | 4,800,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | 2/14/2018 | — | — | — | 14,030 | 56,121 | 112,242 | — | 3,415,524 | PRSU | 2/15/2019 | 2/13/2019 | — | — | — | 19,046 | 76,182 | 152,364 | — | 6,043,518 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2018 | 2/14/2018 | — | — | — | — | — | — | 56,121 | 3,391,953 | RSU | 2/15/2019 | 2/13/2019 | — | — | — | — | — | — | 76,182 | 5,488,913 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | 45,000 | 1,800,00 | 3,600,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | 2/14/2018 | — | — | — | 10,461 | 41,844 | 83,688 | — | 2,546,626 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2018 | 2/14/2018 | — | — | — | — | — | — | 41,844 | 2,529,051 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | 2/14/2018 | — | — | — | 11,815 | 47,259 | 94,518 | — | 2,513,706 | PRSU | 2/15/2019 | 2/13/2019 | — | — | — | 8,913 | 35,653 | 71,306 | — | 2,828,352 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 4/29/2018 | 4/27/2018 | — | — | — | 49,247 | 196,986 | 393,972 | — | 14,704,020 | RSU | 2/15/2019 | 2/13/2019 | — | — | — | — | — | — | 35,653 | 2,568,799 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David R. Carey | STIP | 48,377 | 967,548 | 1,935,096 | — | — | — | — | — | STIP | 29,063 | 1,162,500 | 2,325,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | 2/14/2018 | — | — | — | 8,584 | 34,337 | 68,674 | — | 2,089,750 | PRSU | 2/15/2019 | 2/13/2019 | — | — | — | 8,913 | 35,653 | 71,306 | — | 2,828,352 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2018 | 2/14/2018 | — | — | — | — | — | — | 34,337 | 2,075,328 | RSU | 2/15/2019 | 2/13/2019 | — | — | — | — | — | — | 35,653 | 2,568,799 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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) | Represents the threshold, target and maximum amounts of annual cash incentive compensation that |
| (2) | Represents the threshold, target and maximum number of shares that might be paid pursuant to PRSU awards granted during |
| (3) | The value of |
Employment Arrangements
2017 Employment Agreement with Mr. Legere.During 2018,2019, 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).
Pursuant to the Legere Employment Agreement, as in effect priorthe term of Mr. Legere’s employment with the Company thereunder extended through April 30, 2020 (with Mr. Legere’s employment automatically terminating on that date unless earlier terminated).
Pursuant to the 2018 Legere Amendment,Employment Agreement, Mr. Legere wasis 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 provides that Mr. Legere is 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 2018,2019, Mr. Legere was entitled to annual long-term incentive awards with a target value equal to $15,000,000,$17,250,000, 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.
In addition, pursuant to the Legere Employment Agreement, Mr. Legere is entitled upon request to certain Company-paid financial planning advice in connection with potential change in control payments under Code Section 280G.
2020 Amendment to Employment Agreement with Mr. Legere2018. Effective March 26, 2020, the Company entered into a second amendment to the Legere Amendment. The 2018 Legere AmendmentEmployment Agreement (the “Legere Amendment”), which amended the Legere Employment Agreement to provide that Mr. Legere would continue to serve as the Company’s Chief Executive Officer through the earlier of (i) extendimmediately following the termclosing of the Sprint Combination, or (ii) April 30, 2020, and would continue to serve as a member of the Board until the 2020 Annual Meeting of Stockholders. 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 intoCompany terminated, and he ceased to serve as our Chief Executive Officer, on April 1, 2020, immediately following the 2018 Legere Amendment, Mr. Legere was granted an awardclosing 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.Sprint Combination.
EXECUTIVE COMPENSATION
Term Sheet with Mr. Sievert. During 2017,the portion of calendar year 2019 ending on November 15, 2019, the Company was party to an amended and restated term sheet with Mr. Sievert (the(as amended, the “Sievert Term Sheet”). In connection with the execution
The Sievert Term Sheet provided for Mr. Sievert’s service as President and Chief Operating Officer of the Business Combination Agreement, the Company, and Mr. Sievert entered into an amendment tofor his service as President and Chief Operating Officer of the Sievert Term Sheet, effective ascombined entity resulting from the closing of April 29, 2018 (the “2018 Sievert Amendment”).the Sprint Combination.
Pursuant to the Sievert Term Sheet, (as in effect prior to the 2018 Sievert Amendment), Mr. Sievert was entitled to (i) an annual base salary of $950,000,$1,200,000, (ii) an annual incentive plan target of
| T-Mobile 2020 Proxy Statement | 41 |
EXECUTIVE COMPENSATION
200% of his base salary, and (iii) an annual long-term incentive plan award with a target value of $7,125,000.$10,350,000. The Sievert Term sheet also provides that Mr. Sievert is eligible to receive any employee benefits provided broadly to executives at his level in the future (except as would result in a duplication of benefits).
2019 Employment Agreement with Mr.2018 Sievert. Effective as of November 15, 2019, the Company entered into an employment agreement with Mr. Sievert Amendment.The 2018 Sievert Amendment amended(the “Sievert Employment Agreement”), which superseded and replaced the Sievert Term SheetSheet. Pursuant to reflectthe Sievert Employment Agreement, Mr. Sievert’s new positionSievert would continue to serve as our President and Chief Operating Officer through April 30, 2020. Effective May 1, 2020, Mr. Sievert would commence service as our President and Chief Executive Officer. The Sievert Employment Agreement provides for an initial employment term through the third anniversary of the Company,date on which Mr. Sievert becomes Chief Executive Officer, subject to automaticone-year extensions thereafter (unless either party provides notice ofnon-renewal).
Pursuant to the Sievert Employment Agreement, Mr. Sievert is entitled to (i) an annual base salary initially equal to $1,200,000, which will automatically increase (or has already automatically increased, as applicable) to (a) $1,400,000 effective as of April 29, 2018 (as ratified byJanuary 1, 2020, (b) $1,500,000 effective as of January 1, 2021 and (c) the Boardgreater of (x) $1,600,000 or (y) the then-current median annual base salary for chief executive officers in our then-current peer group (the “Peer Group”) effective as of January 1, 2022; (ii) commencing with calendar year 2020, an annual short-term incentive award targeted at 250% of base salary (with a maximum award equal to 200% of target); and (iii) employee benefits to the same extent and on June 13, 2018), andthe same terms as such benefits are provided generally to provide for his service as President and Chief Operating Officerother senior executives.
Pursuant to the Sievert Employment Agreement, Mr. Sievert became entitled to receive a one-time cash payment of the combined entity resulting from$3,500,000 (the “Retention Payment”) upon the closing of the Sprint Combination. In addition,Combination, which was paid to him following such closing.
Pursuant to the 2018 Sievert Amendment increases (i)Employment Agreement, commencing with calendar year 2020, 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 (commencing withwill automatically increase 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 time-based RSUs granted to Mr. Sievert as annual LTI awards during each of calendar year 2019)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 $10,350,000. In addition, concurrently with the entrance intoSievert Employment Agreement, following the 2018date on which Mr. Sievert Amendment,became Chief Executive Officer, Mr. Sievert was granted ana one-time award of Transaction PRSUs (the “Sievert Special PRSUs”) with an approximate aggregate grant-date value of $20,000,000. See “— Long-Term Incentive Awards Grantedapproximately $20,000,000 (determined based on the average closing price of the Company’s common stock over the period commending on November 18, 2019 and ending on April 1,
2020, the date on which Mr. Sievert became Chief Executive Officer (such average closing price, the “Starting Price”)). The Sievert Special PRSUs will cliff-vest on the third anniversary of the date on which Mr. Sievert becomes Chief Executive Officer, based on our total shareholder return relative to our then-current Peer Group during the applicable performance period and subject to Mr. Sievert’s continued employment through such date. In order for more than 100% of the target number of Sievert Special PRSUs to vest, there must be at least a 20% increase in 2018” aboveour stock price during the period beginning on the date on which Mr. Sievert became Chief Executive Officer (with our stock price as of such date deemed to equal the Starting Price) and ending on the vesting date.
The Sievert Employment Agreement also provides thatT-Mobile will reimburse Mr. Sievert for additional information.up to $50,000 in legal fees incurred by him in connection with the Sievert Employment Agreement.
2020 Amendment to Employment Agreement with Mr. Carter.Sievert. Effective March 26, 2020, the Company entered into a first amendment to the Sievert Employment Agreement (the “Sievert Amendment”), which amended the Sievert Employment Agreement to provide that he would continue to serve as our President and Chief Operating Officer through, and would commence service as our President and Chief Executive Officer as of, the earlier of (i) immediately following the closing of the Sprint combination or (ii) April 30, 2020. Mr. Sievert became our President and Chief Executive Officer on April 1, 2020, immediately following the closing of the Sprint Combination.
Employment Agreement with Mr. Carter.During 2018,2019, 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 amendment to the Carter Employment Agreement (the “2018 Carter Amendment”), effective as 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 2019 Second Amendment”), and effective November 15, 2019, the Company and Mr. Carter entered into a third amendment to the Carter Employment Agreement (the “Carter 2019 Third Amendment” and, together with the Carter 2019 Second Amendment, the “Carter Amendments”). The terms of the 2019 Carter Amendment (which were not in effect in 2018) are described below under “— 2019 Carter Amendment”.
Pursuant to the Carter Employment Agreement (as in effect during 20182019 prior to the 2018 Carter Amendment)Amendments), 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, Mr. Carter is entitled to receive (i) an annual base salary of $850,000, (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.
2018 Carter Amendment. The 2018 Carter Amendment amended the Carter Employment Agreement to provide that Mr. Carter’s employment thereunder will continuecontinued until the first to occur of the following dates: (1) if the Sprint Combination closes,closed, 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 iswas 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 thatannouncement, in any case, with Mr. Carter’s employment willterminating automatically terminate upon the expiration of his employment term (unless earlier terminated).
In addition, pursuant to the Carter Employment Agreement as in effect during 2019 prior to the Carter Amendments, Mr. Carter was entitled to receive (i) an annual base salary of $850,000, (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) the Carter Retention Bonus (the full amount of which was paid in March 2019), (v) aone-time award of time-based RSUs with a
| 42 | T-Mobile 2020 Proxy Statement |
EXECUTIVE COMPENSATION
target value of $2,500,000 (which 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.
Carter 2019 CarterSecond Amendment. The Carter 2019 CarterSecond Amendment amended the Carter Employment Agreement to provide that the term of Mr. Carter’s employment thereunder willwould continue until the first to occur of the following dates: (1) December 31, 2019; (2) if the Sprint Combination closesclosed 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 announcesannounced that the Sprint Combination hashad been terminated, the 20th day following the first quarterly or annual financial filing made by the Company after such public announcement. The Carter 2019 CarterSecond Amendment also increased Mr. Carter’s annual base salary to $950,000, retroactively effective as ofto December 16, 2018.
Following In connection with the entrance into the Carter 2019 CarterSecond Amendment, Mr. Carter was granted (i) the CarterTrue-Up PRSUs, (ii) the CarterTrue-Up RSUs, and (iii) the Carter Transaction PRSUs. For additional information regarding the CarterTrue-Up PRSUs, the CarterTrue-Up RSUs and the Carter Transaction PRSUs, see “— Special Equity Awards in 2019” above.
Carter2019Third Amendment. The Carter 2019 Third Amendment amended the Carter Employment Agreement to (i) extend the term of Mr. Carter’s employment thereunder through July 1, 2020 and (ii) clarify that Mr. Carter’s employment will automatically terminate upon July 1, 2020.
The Carter 2019 Third Amendment provides that, during the remainder of his employment term, Mr. Carter will continue to (i) serve as Executive Vice President and Chief Financial Officer of the Company, (ii) receive the same base salary as currently in effect ($950,000 per year) and (iii) be eligible to continue to participate in employee benefit plans maintained by the Company. Mr. Carter is not be eligible to receive annual short-term incentive or long-term incentive awards after December 31, 2019.
Pursuant to the Carter 2019 Third Amendment, subject to Mr. Carter’s continued employment through December 31, 2019 and his timely execution andnon-revocation of a one-time awardrelease of claims, Mr. Carter became entitled to receive the following payments and benefits: (a) on December 31, 2019, (i) payment of his accrued but unusedpaid-time-off through December 31, 2019, (ii) full vesting of his outstanding RSUs and PRSUs, with respect toand (iii) a number of shares of Company common stockcash payment equal to $156,250 divided bytwo times the average closing pricesum of his base salary plus his target STI (the payments and benefits in clauses (ii) and (iii), the “Severance Benefits,” which represented certain severance payments and benefits to which Mr. Carter would have been entitled had his employment terminated on December 31, 2019 had his employment term expired on such date (as provided under the terms of the Carter 2019 Second Amendment)); and (b) a short-term incentive award for calendar year 2019 (determined and paid as discussed in more detail above under “— Annual Short Term Incentives”). Mr. Carter is not entitled to any further separation payments or benefits upon his subsequent termination of employment withT-Mobile (except as described below under “— Potential Payments upon Termination or in Connection with a Change in Control”).
In addition, subject to Mr. Carter’s continued employment through July 1, 2020, he will be eligible to receive aone-time cash bonus in the amount of $7,525,000 (the “Carter 2020 Special Bonus”), payable on or within 74 days following such date, subject to his timely execution andnon-revocation of a release.
The Carter 2019 Third Amendment also provided Mr. Carter with the right to require the Company to purchase, effective as of the second business day following February 6, 2020, which was the date on which we filed our Annual Report on Form10-K for 2019 (the“10-K Filing Date”), some or all of the vested shares 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 to10-K Filing Date. 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 aper-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).
Carey Term Sheet with Mr. Carey.Sheet. In connection with the execution of the Business Combination Agreement, effective as of April 29, 2018During 2019, the Company entered intowas party to a compensation term sheet with Mr. Carey (the “Carey Term Sheet”). The term of the Carey Term Sheet extends through
EXECUTIVE COMPENSATION
April 29, 2020, unless earlier terminated. Pursuant to the Carey Term Sheet, during 2019, Mr. Carey iswas entitled to (i) an annual base salary of $775,000, (ii) a target annual incentiveSTI award equal to 125% of his eligible base earnings, and (iii) commencing with calendar year 2019, annual long-term incentive awards with an aggregate target grant-date value of no less than $4,359,375. Concurrently with
2020 Carey Term Sheet Amendment. Effective February 12, 2020, the entranceCompany entered into an amendment to the Carey Term Sheet (the “Carey Amendment”). The Carey Amendment amends the Carey Term Sheet to extend the term of Mr. Carey’s employment thereunder through, and to clarify that Mr. Carey’s employment will automatically terminate on, the first to occur of July 1, 2020 and the date on which the Company eliminates Mr. Carey’s position with the Company (the “Position Elimination Date”). The Carey Amendment notes that the Position Elimination Date is expected to occur between April 30, 2020 and July 1, 2020.
The Carey Amendment provides that, during the remainder of Mr. Carey’s employment, Mr. Carey was grantedshall continue to (i) receive the same base salary as currently in effect ($775,000 per year), (ii) be eligible to earn the same target annual short-term incentive awards as currently in effect (i.e., 150% of Mr. Carey’s eligible base earnings, or $1,162,500) and (iii) continue to be eligible to participate in the Company’s employee benefit plans. Mr. Carey will not be 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. Effective as of November 15, 2019 the Company entered into 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 initialtwo-year employment term through November 15, 2021, subject to automaticone-year extensions (unless either party provides notice ofnon-renewal).
Pursuant to the Ray Term Sheet, Mr. Ray is entitled to (i) an annual base salary equal to $900,000, (ii) commencing with calendar year 2020, an annual STI award targeted at 200% of Transaction PRSUs,Mr. Ray’s eligible base earnings during the applicable year, payable based on the attainment ofpre-established performance goals, and (iii) commencing with calendar year 2020, an approximate aggregate grant dateannual LTI award or other equity awards with a target grant-date value of $5,719,000. See “— Long-Term Incentive Awards Granted in 2018” above for additional information.that is no less than $6,750,000.
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.
| T-Mobile 2020 Proxy Statement | 43 |
EXECUTIVE COMPENSATION
Cash and Incentive Compensation
Non-Equity Incentive Plan Awards.The 20182019 Summary Compensation Table includes payments received under the 20182019 STIP for the performance period ended December 31, 2018.2019. The 20182019 Grants of Plan-Based Awards Table includes the range of potential payouts of awards granted under the 20182019 STIP.
Equity Incentive Plan Awards. All of the Named Executive Officers received equity awards consisting of both RSUs that vest in three annual installments beginning in February 2019,2020, 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). See “— Long-Term Incentives” above for more information.
| T-Mobile |
EXECUTIVE COMPENSATION
Outstanding Equity Awards at 20182019 FiscalYear-End Table
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, 2018.2019. 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 |
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Number of |
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Number of
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| | Option Exercise Price ($) |
| | Option Expiration |
| | Value of Unexercised In-the- Money Options/ SARs at Year-End ($) |
| | Number of Shares or Units of Stock Not Vested (#) |
| | Market Value of Shares or Units of Stock That Have Not Vested (7) ($) |
| | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
| | Equity Incentive Plan Awards: Value of Units or Rights That Not Vested (7) ($) |
| | Type of Award | | | Grant Date |
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Number of |
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Number of
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| | Option Exercise Price ($) |
| | Option Expiration |
| | Value of Unexercised In-the- Money Options/ SARs at Year-End ($) |
| | Number of Shares or Units or Stock Not Vested (#) |
| | Market Value of Shares or Units of Stock That Have Not Vested (5) ($) |
| | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
| | Equity Incentive Plan Awards: Value of Units or Rights That Not Vested (5) ($) |
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Exercisable | Unexercisable | Exercisable | Unexercisable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John J. Legere | PRSU | 4/29/2018 | (1) | — | — | — | — | — | — | — | 598,029 | 76,081,249 | PRSU | 2/15/2019 | (1) | — | — | — | — | — | — | — | 135,434 | 10,620,734 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2018 | (3) | — | — | — | — | — | 63,012 | 4,008,193 | — | — | RSU | 2/15/2019 | (2) | — | — | — | — | — | 67,717 | 5,310,367 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | (2) | — | — | — | — | — | — | — | 47,259 | 6,012,290 | PRSU | 2/15/2019 | (1) | — | — | — | — | — | — | — | 50,788 | 3,982,795 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | (2) | — | — | — | — | — | — | — | 126,024 | 16,032,773 | PRSU | 4/29/2018 | (3) | — | — | — | — | — | — | — | 598,029 | 93,794,868 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 4/1/2017 | (2) | — | — | — | — | — | — | — | 48,757 | 6,202,866 | RSU | 2/15/2018 | (2) | — | — | — | — | — | 42,008 | 3,294,267 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/25/2017 | (2) | — | — | — | — | — | — | — | 130,018 | 16,540,890 | PRSU | 2/15/2018 | (1) | — | — | — | — | — | — | — | 47,259 | 7,412,102 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/25/2017 | (3) | — | — | — | — | — | 43,340 | 2,756,857 | — | — | PRSU | 2/15/2018 | (1) | — | — | — | — | — | — | — | 126,024 | 19,765,604 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/25/2016 | (2) | — | — | — | — | — | — | — | 215,112 | 27,366,549 | PRSU | 4/1/2017 | (4) | — | — | — | — | — | — | — | 48,757 | 3,823,524 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/25/2016 | (3) | — | — | — | — | — | 35,852 | 2,280,546 | — | — | PRSU | 2/25/2017 | (1) | — | — | — | — | — | — | — | 130,018 | 10,196,012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. Braxton Carter | PRSU | 2/15/2018 | (2) | — | — | — | — | — | — | — | 44,306 | 5,636,609 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2018 | (3) | — | — | — | — | — | 44,306 | 2,818,305 | — | — | RSU | 2/25/2017 | (2) | — | — | — | — | — | 21,670 | 1,699,361 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. Braxton Carter (6) | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
G. Michael Sievert | PRSU | 4/29/2018 | (1) | — | — | — | — | — | — | — | 323,259 | 41,125,010 | PRSU | 2/15/2019 | (1) | — | — | — | — | — | — | — | 76,182 | 5,974,192 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | (2) | — | — | — | — | — | — | — | 56,121 | 7,139,714 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2018 | (3) | — | — | — | — | — | 56,121 | 3,569,857 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/25/2017 | (5) | — | — | — | — | — | — | — | 57,899 | 7,365,911 | RSU | 2/15/2019 | (2) | — | — | — | — | — | 76,182 | 5,974,192 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/25/2017 | (6) | — | — | — | — | — | 38,600 | 2,455,346 | — | — | PRSU | 4/29/2018 | (3) | — | — | — | — | — | — | — | 323,259 | 50,699,942 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/25/2017 | (2) | — | — | — | — | — | — | — | 57,899 | 7,365,911 | PRSU | 2/15/2018 | (1) | — | — | — | — | — | — | — | 56,121 | 8,802,018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/25/2017 | (3) | — | — | — | — | — | 57,899 | 3,682,955 | — | — | RSU | 2/15/2018 | (2) | — | — | — | — | — | 37,414 | 2,934,006 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/25/2016 | (2) | — | — | — | — | — | — | — | 67,223 | 8,552,110 | PRSU | 2/25/2017 | (1) | — | — | — | — | — | — | — | 57,899 | 4,540,440 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/25/2016 | (3) | — | — | — | — | — | 22,408 | 1,425,373 | — | — | RSU | 2/25/2017 | (2) | — | — | — | — | — | 19,300 | 1,513,506 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Neville R. Ray | PRSU | 4/29/2018 | (1) | — | — | — | — | — | — | — | 196,986 | 25,060,559 | PRSU | 2/15/2019 | (1) | — | — | — | — | — | — | — | 49,684 | 3,896,219 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | (2) | — | — | — | — | — | — | — | 47,259 | 6,012,290 | RSU | 2/15/2019 | (2) | — | — | — | — | — | 49,684 | 3,896,219 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | (2) | — | — | — | — | �� | — | — | 41,844 | 5,323,394 | PRSU | 4/29/2018 | (3) | — | — | — | — | — | — | — | 196,986 | 30,895,284 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2018 | (3) | — | — | — | — | — | 41,844 | 2,661,697 | — | — | PRSU | 2/15/2018 | (1) | — | — | — | — | — | — | — | 47,259 | 7,412,102 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/25/2017 | (2) | — | — | — | — | — | — | — | 40,631 | 5,169,076 | PRSU | 2/15/2018 | (1) | — | — | — | — | — | — | — | 41,844 | 6,562,813 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/25/2017 | (3) | — | — | — | — | — | 27,088 | 1,723,068 | — | — | RSU | 2/15/2018 | (2) | — | — | — | — | — | 27,896 | 2,187,604 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/25/2016 | (2) | — | — | — | — | — | — | — | 52,938 | 6,734,772 | PRSU | 2/25/2017 | (1) | — | — | — | — | — | — | — | 40,631 | 3,186,283 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/25/2016 | (3) | — | — | — | — | — | 17,646 | 1,122,462 | — | — | RSU | 2/25/2017 | (2) | — | — | — | — | — | 13,544 | 1,062,120 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David R. Carey | PRSU | 4/29/2018 | (1) | — | — | — | — | — | — | — | 92,436 | 11,759,708 | PRSU | 2/15/2019 | (1) | — | — | — | — | — | — | — | 35,653 | 2,795,908 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | (2) | — | — | — | — | — | — | — | 47,259 | 6,012,290 | RSU | 2/15/2019 | (2) | — | — | — | — | — | 35,653 | 2,795,908 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/15/2018 | (2) | — | — | — | — | — | — | — | 34,337 | 4,368,353 | PRSU | 4/29/2018 | (3) | — | — | — | — | — | — | — | 92,436 | 14,497,662 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/15/2018 | (3) | — | — | — | — | — | 34,337 | 2,184,177 | — | — | PRSU | 2/15/2018 | (1) | — | — | — | — | — | — | — | 47,259 | 7,412,102 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/25/2017 | (2) | — | — | — | — | — | — | — | 30,854 | 3,925,246 | PRSU | 2/15/2018 | (1) | — | — | — | — | — | — | — | 34,337 | 5,385,415 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/25/2017 | (3) | — | — | — | — | — | 20,570 | 1,308,458 | — | — | RSU | 2/15/2018 | (2) | — | — | — | — | — | 22,892 | 1,795,191 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PRSU | 2/25/2016 | (2) | — | — | — | — | — | — | — | 34,956 | 4,447,102 | PRSU | 2/25/2017 | (1) | — | — | — | — | — | — | — | 30,854 | 2,419,571 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RSU | 2/25/2016 | (3) | — | — | — | — | — | 11,652 | 741,184 | — | — | RSU | 2/25/2017 | (2) | — | — | — | — | — | 10,285 | 806,550 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) |
|
| (2) | RSUs vest in annual installments with respect toone-third of the shares on each of the first three anniversaries of the grant date (or, with respect to the CarterTrue-Up RSUs, on each of the first three anniversaries of February 15, 2019), subject to continued service through the applicable vesting date (except as otherwise provided in the applicable award or employment agreement). |
| (3) | Special awards of PRSUs granted in connection with the proposed Sprint Combination (“Transaction PRSUs”) vest or vested (as applicable) based on the Company’s |
|
EXECUTIVE COMPENSATION
|
| (4) |
|
PRSUs which vested on February 25, |
|
Calculated based on (i) the number of PRSUs that may be earned upon achievement of (a) for PRSUs granted in 2018 and the Carter Transaction PRSUs, the maximum performance level and (b) for the PRSUs granted in 2017 and 2019 and the CarterTrue-Up PRSUs, target performance level, or (ii) the number of time-based RSUs, as applicable, multiplied by the closing price of our common stock on December 31, |
| (6) | Pursuant to the Carter 2019 Third Amendment, Mr. Carter’s then-outstanding RSUs and PRSUs (consisting of 87,632 RSUs and 174,888 PRSUs), vested in full on December 31, 2019 (with the vesting of PRSUs based on actual performance through such date). |
| T-Mobile 2020 Proxy Statement | 45 |
EXECUTIVE COMPENSATION
Option Exercises and Stock Vested for Fiscal Year 20182019 Table
The following table sets forth certain information with respect to restricted stock units vesting during the fiscal year ended December 31, 2018,2019, with respect to the Named Executive Officers. There were no option exercises during the fiscal year ended December 31, 2018.2019.
| 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) ($) | ||||||||||||||||
John J. Legere | — | — | 566,573 | 34,028,374 | ||||||||||||||||
J. Braxton Carter | — | — | 153,507 | 9,219,630 | ||||||||||||||||
G. Michael Sievert | — | — | 179,811 | 10,799,449 | ||||||||||||||||
Neville R. Ray | — | — | 114,052 | 6,849,963 | ||||||||||||||||
David R. Carey | — | — | 98,584 | 5,920,955 | ||||||||||||||||
|
| Option Awards | Stock Awards | |||||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting($) | ||||||||||||||||
John J. Legere | — | — | 338,811 | 24,729,140 | ||||||||||||||||
J. Braxton Carter | — | — | 416,843 | 31,816,559 | ||||||||||||||||
G. Michael Sievert | — | — | 266,236 | 19,429,833 | ||||||||||||||||
Neville R. Ray | — | — | 109,192 | 7,962,528 | ||||||||||||||||
David R. Carey | — | — | 75,678 | 5,516,833 | ||||||||||||||||
20182019Non-Qualified Deferred Compensation
The following table shows the contributions, earnings and the aggregate balance of total deferrals as of December 31, 2018.2019.
Name | Executive Contributions in | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Balance at Last Fiscal Year-End(2)($) | Executive Contributions in Last Fiscal Year (1) ($) | Aggregate Earnings in Last Fiscal Year ($) | Aggregate Balance at Last Fiscal Year-End ($) | ||||||||||||||||||
John J. Legere | — | — | — | — | — | — | ||||||||||||||||||
J. Braxton Carter | — | (74,839 | ) | 2,567,421 | — | 412,201 | 2,979,621 | |||||||||||||||||
G. Michael Sievert | — | — | — | — | — | — | ||||||||||||||||||
Neville R. Ray | 187,988 | (385,487 | ) | 5,810,246 | — | 1,314,906 | 6,983,758 | |||||||||||||||||
David R. Carey | 234,147 | (61,348 | ) | 837,381 | 77,500 | 255,438 | 1,327,062 | |||||||||||||||||
| (1) |
|
|
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 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 2018.2019.
Participants choose how their deferrals (and their account balances) will be allocated among the national investment funds available under the Deferred Compensation Plan. For 2018,2019, 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.
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.
| 46 | T-Mobile 2020 Proxy Statement |
EXECUTIVE COMPENSATION
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 Termination
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 following 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.
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.Messrs. Legere and Sievert, this period is currently two years after termination of employment and(however, prior to the entrance into the Sievert Employment Agreement on November 15, 2019, this period was one year after termination of employment for Mr. Sievert). For Mr. Carey (upon ahis 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. Carey under the Carey Retirement Agreement (as defined and discussed below).
Termination Due to Death or Disability
Upon a termination of the applicable executive’s employment due to death or disability, each Named Executive Officer (other than Mr. Carter) is entitled to receive (i) an unpaid annual incentiveshort-incentive award from the preceding fiscal year (if any); and(ii) a pro-ratedtarget annual short-term incentive award for the current fiscal year; and (iii)year (or, for Mr. Carter,Sievert, if the termination occurred on or after November 15, 2019, a prorated portionpro-rated annual short-term incentive award based on the greater 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 or 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 incentive awards will vest and be paid at target as of the date of the executive’s separation from service.
Mr. Carter would have become entitled to the foregoing payments and benefits had he incurred a termination of employment due to death or disability prior to December 31, 2019, as well as (if his employment terminated prior to March 1, 2019, apro-rated portion of his Carter Retention Bonus (discussed above under “Employment Arrangements — Employment Agreement with Mr. Carter”)). However, as discussed above, pursuant to the Carter 2019 Third Amendment, the Carter Retention Bonus was paid to him in full in March 2019 and, following the payment of the Severance Benefits to him on December 31, 2019, he is no longer entitled to any further separation payments or benefits upon a termination of employment due to death or disability.
Termination Without Cause or for Good Reason
(No Change in Control)
UnderDuring 2019, Messrs. Legere, Sievert, Carter and Ray were eligible for severance benefits upon 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 certain executives) upon a termination due to expiration of, or a Company-initiatednon-renewal of, their employment terms, as described in more detail below. All such severance benefits are (or were, as applicable) subject to 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 expiration of his employment term, each of Messrs. Legere, Sievert and Carter will (subject to his 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. Legere
Under the Legere Employment Agreement, upon a termination of Mr. Legere’s employment by us without “cause,” by him for “good reason” (each as defined in the Legere Employment Agreement), or due to the expiration of his employment term, Mr. Legere was 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 |
| ∎ |
| ∎ | Company-paid group medical and dental benefits for up to 18 months |
The April 2018 Amendments to the employment arrangements for Messrs. Legere, Sievert and Carter amended the foregoing severance provisions as follows:
| ∎ |
Pursuant to the Legere Amendment, which became effective on March 26, 2020, Mr. Legere became entitled to receive the above-described severance payments and benefits upon his termination of employment with the Company on April 1, 2020, the date on which the Sprint Combination closed, upon and subject to the following terms of the Legere Amendment:
| ∎ | the conditions to the |
| ∎ |
|
| ∎ | in lieu of Company-paid |
| T-Mobile |
EXECUTIVE COMPENSATION
| ∎ |
|
Mr. Sievert
Under the Sievert Employment Agreement, which became effective on November 15, 2019, 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 ournon-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 fiscal year of termination, based on actual performance; |
| ∎ | if the date of termination occurs after Mr. Sievert has commenced service as our Chief Executive Officer, the Retention Payment (as defined and described above); |
| ∎ | (a) full vesting of any then-outstanding time-based |
| ∎ |
| ∎ | Company-paid office space and executive assistant (not to exceed $25,000 per month in the |
The
Prior to November 15, 2019 (the date on which the Sievert Employment Agreement became effective), Mr. Sievert was entitled to severance benefits under the Sievert Term Sheet upon a termination of his employment by us without “cause” or by him for “constructive termination” (each as defined in the Sievert Term Sheet), which consisted of the same payments and benefits descried above, except that (a) he was not entitled to the Retention Payment or Company-paid office space and executive assistant, and (b) with respect to his performance-based long-term incentive awards (unless the applicable award agreement provided for better treatment), he was entitled to(i) pro-rata vesting of a portion of each performance-based long-term incentive award based on the portion of the performance period completed as of termination, based on actual performance, and(ii) pro-rata vesting of a portion of each performance-based long-term incentive award based on the portion of the performance period left to be completed, based on target performance.
Mr. Carter
Pursuant to the Carter Amendment further amended the severance provisions set forthEmployment Agreement, upon a termination of Mr. Carter’s employment without “cause,” for “good reason” (each as defined in the Carter Employment Agreement) or upon the expiration of his employment term on July 1, 2020, Mr. Carter is entitled to receive:
| ∎ | Company-paid group medical and dental benefits for up to 18 months following termination; and |
| ∎ | the Carter 2020 Special Bonus (which shall bepro-rated in the event of a termination without “cause” or for “good reason” prior to July 1, 2020). |
As discussed above under “Employment Arrangements—Carter Third Amendment”, pursuant to the Carter 2019 Third Amendment, on December 31, 2019, Mr. Carter received a payout of his Severance Benefits and all of his then-outstanding RSUs and PRSUs vested in full (based on, for his PRSUs, actual performance through the termination date). Accordingly, except as described in the preceding paragraph, he is no longer eligible for any separation payments or benefits upon a termination of his employment with the Company.
Prior to November 15, 2019 (the date on which the Carter 2019 Third Amendment became effective), Mr. Carter was entitled to receive severance benefits under the Carter Employment Agreement to provide that, ifupon a termination of Mr. Carter’s employment terminateswithout “cause,” for “good reason” (each as defined in the Carter Employment Agreement) or upon the expiration of his employment term, which consisted of (i) the Severance Benefits, (ii) any unpaid annual short-term incentive award from the preceding fiscal year (if any), (iii) apro-rated portion of his annual short-term incentive award for the fiscal year of termination, based on December 31,actual performance, (iv) Company-paid group medical and dental benefits for up to 18 months following termination and (v) with respect to his long-term incentive awards, (a) under the Carter Employment Agreement as in effect through March 25, 2019, the next tranche of any time-based long-term incentive awards andpro-rata vesting of any performance-based long-term incentive awards (based on actual performance) or (b) under the Carter Employment Agreement as in effect from March 25, 2019 through November 15, 2019, full-vesting of time-based long-term incentive awards and full vesting of performance-based long-term incentive awards (based on actual performance through the day immediately following the termination date).
Mr. Ray
Under the Ray Term Sheet, which became effective on November 15, 2019, 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 (as defined below)) during thetwo-year period ending on November 15, 2021, Mr. Ray is entitled to receive the same severance payments and benefits that would apply upon a termination under his Severance Letter Agreement (as discussed below under “— Termination in Connection with the Sprint Combination”), 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 anyone-time or special long-term equity awards granted on or after November 15, 2019).
Mr. Carey
We were not a party to an employment agreement or term sheet with Mr. Carey in 2019 that provided for severance payments or benefits. However, pursuant to the Carey Amendment, which became effective on February 12, 2020, upon a termination of Mr. Carey’s employment by us without “cause” or by him for “good reason” (each as defined in his Severance Letter Agreement), due to the expiration of his employment term (and neitheron July 1, 2020, or due to the closing nor a public announcementelimination 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 accordancehis position with the terms set forth inCompany, Mr. Carey is currently entitled to receive the same severance payments and benefits that would apply upon a termination under his Severance Letter Agreement (as defined and discussed below), rather thanbelow under “— Termination in accordanceConnection with the terms ofSprint Combination”) and to remain eligible for the Carter Employment Agreement.
| 48 | T-Mobile 2020 Proxy Statement |
EXECUTIVE COMPENSATION
Company’s mobile service discount program as in effect from time to time. In addition, upon such termination, the Company and Mr. Carey have agreed to enter into a12-month consulting arrangement pursuant to which Mr. Carey will provide certain consulting services to the Company in exchange for a consulting fee equal to $41,677 per month.
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. Carey (the “Carey Retirement Agreement”). Pursuant to the Carey Retirement Agreement, upon Mr. Carey’s voluntary resignation from the Company for any reason, on or after September 3, 2018, 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 |
| ∎ | with respect to his |
| ∎ | his RSUs 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 |
| ∎ | 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 Carey Retirement Agreement, upon Mr. Carey’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 Carey 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 PRSUs determined as if Mr. Carey had retired on such date.
Termination in Connection with a Corporate Restructuring, Business Combination or Change in Control
John J.Mr. 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-renewalexpiration of thehis employment agreementterm, in any case, in connection with a change in control of the Company, 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 of termination will be paid at target; and (b) if such termination occurs on or within 12 months after a change in control, his performance-vesting LTIlong-term incentive 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)
Each of Messrs. Sievert, Carter, Ray and Carey participate in and, prior to the effective date of the Sievert Employment Agreement, Mr. Sievert participated 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).
In addition, pursuant to the 2013 Omnibus Incentive Plan and the award agreements governing the LTIlong-term incentive awards for Messrs. Sievert, Carter, Ray and Carey, 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 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. Carter, Ray and Carey, 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’sexecutive’s termination of employment without cause or for good reason, in either case, within 12 months following the first to
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’sexecutive’s annual base salary plus then-current target annual short-term incentive award; (2) a prorated annual short-term incentive award for the year of termination, based on actual performance; (3) any earned, unpaid annual short-term 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 last trading day immediately preceding 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
| T-Mobile 2020 Proxy Statement | 49 |
EXECUTIVE COMPENSATION
termination (or 12 months if such termination occurswere to occur 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, 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,our Named Executive Officers, as well as 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 our 2013 Omnibus Incentivethe 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 the 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 |
| ∎ | 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 |
| ∎ | for |
For Mr. Legere, “good reason” is defined in the Legere Employment Agreement as any of the following:
| ∎ | a material diminution in base compensation, annual performance bonus target, or long-term incentive target or in the maximum potential amount payable with respect to any annual bonus or long-term incentive bonus award provided for under the Legere Employment |
| ∎ | a material diminution in authority, duties or responsibilities, including, without limitation, any change in title or the appointment of any person as a result of which Mr. Legere ceased to be the Company’s sole Chief Executive Officer, provided that it would not be good reason if, in connection with a change in control, Mr. Legere reported to the Board |
| ∎ | a material diminution in the authority, duties or responsibilities of the supervisor to whom Mr. Legere is required to report (including a requirement that he 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 he must perform services; or |
| ∎ | any other action or inaction that constitutes a material breach by 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.Mr. Sievert, “good reason” is defined in the Sievert Employment Agreement as any of the following:
| ∎ | a material diminution in Mr. Sievert’s annual base salary, annual target STI award, or annual LTI target value or in the maximum potential amount payable with respect to any STI award provided for under the Sievert Employment 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. Sievert ceases to be the Company’s sole Chief Executive Officer after May 1, 2020 or Mr. Sievert is not the sole executive reporting to the full Board after May 1, 2020; |
| ∎ | a change in Mr. Sievert’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 (including, after May 1, 2020, a requirement that Mr. Sievert report to a corporate officer or employee instead of reporting directly to the Board); |
| ∎ | a change of 50 miles or greater in the principal geographic location at which Mr. Sievert must perform his services under the Sievert Employment Agreement; or |
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EXECUTIVE COMPENSATION
| ∎ | any 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. |
For Messrs. Ray and Carey, “good reason” generally has the same definition as in the Severance Letter Agreements, discussed below. Pursuant to the Carey Amendment, Mr. Carey waived any rights he otherwise may have to resign for “good reason” as a result of, or in connection with, any diminution of his duties and responsibilities occurring on or after February 12, 2020, so long as he continues to directly report to Mr. Legere through the date on which Mr. Legere’s employment with the Company terminates.
For Mr. Carter, “good reason” or “constructive discharge” generally has the same definition as in the Executive Continuity Plan, discussed below, except that it includes: (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. 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.
EXECUTIVE COMPENSATION
For purposes of the Executive Continuity Plan, “constructive termination” or “good reason” means, with respect to our Named Executive Officers (other than Mr. Legere)Messrs. Legere and Sievert), the occurrence, after a change in control, of any of the following conditions (as modified, for Messrs. Sievert andMr. Carter, by their employment arrangements,the Carter Employment Agreement, as discussed above):
| ∎ | 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, “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 if a termination of employment and/or change in control (as applicable) had occurred as of December 31, 20182019 under the circumstances described above. The amounts shown with respect to RSUs are based on the closing price of our common stock ($63.6178.42 per share) on December 31, 2018.2019. 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, a termination due to expiration of their employment terms and, for Mr. Sievert, ournon-renewal of his then-current employment term) or for good reason before a change in control under the Severance Guidelines or pursuant to the employment arrangements with Messrs. Legere, Sievert, |
| ∎ |
| ∎ |
| ∎ |
| ∎ | Medical Coverage: estimated value of payment for continued medical coverage under COBRA pursuant to (i) the terms of our Severance Guidelines, (ii) the employment arrangements with Messrs. Legere, Sievert, Carter or |
| ∎ | Continued Mobile Service Discounts: estimated value of these discounts pursuant to the terms of the Carey Retirement Agreement; |
| ∎ | Executive Office and Office Assistant: estimated potential value of this service pursuant to the terms under the |
| ∎ | Outplacement Services: estimated potential value of this service pursuant to the terms of (i) our Severance Guidelines, or (ii) the |
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, 2018,2019, 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, if an executive officer voluntarily leaves the Company (other than for good reason), the executive officer is not entitled to any severance compensation.
| T-Mobile | 51 |
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) ($) | Death or Disability ($) | 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 | — | 12,000,000 | 12,000,000 | — | ||||||||||||||||||
Time-Based RSUs | 9,045,596 | 9,045,596 | 9,045,596 | 10,303,996 | 10,303,996 | 10,303,996 | ||||||||||||||||||
Performance-Based RSUs | 74,118,308 | 74,118,308 | 74,118,308 | 89,109,352 | 89,109,352 | 89,109,352 | ||||||||||||||||||
2018 STIP | 6,130,849 | 6,130,849 | 6,130,849 | |||||||||||||||||||||
2019 STIP | 5,960,000 | 5,960,000 | 5,960,000 | |||||||||||||||||||||
Office & Assistant | 450,000 | 450,000 | — | 450,000 | 450,000 | — | ||||||||||||||||||
Medical Coverage | 10,148 | 10,148 | — | 10,786 | 10,786 | — | ||||||||||||||||||
Outplacement Services | 6,500 | 6,500 | — | 6,500 | 6,500 | — | ||||||||||||||||||
Total Estimated Value | 101,761,402 | 101,761,402 | 89,294,754 | 117,840,634 | 117,840,634 | 105,373,348 | ||||||||||||||||||
J. Braxton Carter | ||||||||||||||||||||||||
Cash Severance | 4,500,000 | 4,500,000 | — | 4,750,000 | 4,750,000 | — | ||||||||||||||||||
Time-Based RSUs | 5,596,450 | 8,390,668 | 8,390,668 | 6,872,101 | 6,872,101 | 6,872,101 | ||||||||||||||||||
Performance-Based RSUs | 5,822,968 | 9,052,021 | 9,052,021 | 14,723,433 | 14,723,433 | 14,723,433 | ||||||||||||||||||
2018 STIP | 2,182,327 | 2,182,327 | 2,182,327 | |||||||||||||||||||||
Bonus | 2,155,963 | 2,155,963 | 2,155,963 | |||||||||||||||||||||
2019 STIP | 2,123,250 | 2,123,250 | 2,123,250 | |||||||||||||||||||||
Medical Coverage | 14,512 | 14,512 | — | 23,304 | 23,304 | — | ||||||||||||||||||
Outplacement Services | 6,500 | 6,500 | — | 6,500 | 6,500 | — | ||||||||||||||||||
Total Estimated Value | 20,278,720 | 26,301,991 | 21,780,979 | |||||||||||||||||||||
Total Estimated Value(2) | 28,498,589 | 28,498,589 | 23,718,785 | |||||||||||||||||||||
G. Michael Sievert | ||||||||||||||||||||||||
Cash Severance | 7,200,000 | 7,200,000 | — | 7,200,000 | 7,200,000 | — | ||||||||||||||||||
Time-Based RSUs | 11,133,531 | 11,133,531 | 11,133,531 | 10,421,704 | 10,421,704 | 10,421,704 | ||||||||||||||||||
Performance-Based RSUs | 35,774,328 | 35,774,328 | 35,774,328 | 40,265,612 | 40,265,612 | 40,265,612 | ||||||||||||||||||
2018 STIP | 3,592,039 | 3,592,039 | 3,592,039 | |||||||||||||||||||||
2019 STIP | 3,576,000 | 3,576,000 | 3,576,000 | |||||||||||||||||||||
Office & Assistant | 450,000 | 450,000 | — | |||||||||||||||||||||
Medical Coverage | 29,910 | 29,910 | — | 31,847 | 31,847 | — | ||||||||||||||||||
Outplacement Services | 6,500 | 6,500 | — | 6,500 | 6,500 | — | ||||||||||||||||||
Total Estimated Value | 57,736,307 | 57,736,307 | 50,499,897 | 61,951,663 | 61,951,663 | 54,263,316 | ||||||||||||||||||
Neville R. Ray | ||||||||||||||||||||||||
Cash Severance | 5,400,000 | 5,400,000 | — | 5,400,000 | 5,400,000 | — | ||||||||||||||||||
Time-Based RSUs | 2,871,207 | 5,507,227 | 5,507,227 | 7,145,944 | 7,145,944 | 7,145,944 | ||||||||||||||||||
Performance-Based RSUs | 9,261,889 | 24,150,045 | 24,150,045 | 29,517,602 | 29,517,602 | 29,517,602 | ||||||||||||||||||
2018 STIP | 2,590,177 | 2,590,177 | 2,590,177 | |||||||||||||||||||||
2019 STIP | 2,682,000 | 2,682,000 | 2,682,000 | |||||||||||||||||||||
Medical Coverage | 21,875 | 21,875 | — | 35,117 | 35,117 | — | ||||||||||||||||||
Outplacement Services | 6,500 | 6,500 | — | 6,500 | 6,500 | — | ||||||||||||||||||
Total Estimated Value | 20,151,648 | 37,675,824 | 32,247,448 | 44,787,163 | 44,787,163 | 39,345,546 | ||||||||||||||||||
David R. Carey | ||||||||||||||||||||||||
Cash Severance | 3,487,500 | 3,487,500 | — | 3,875,000 | 3,875,000 | — | ||||||||||||||||||
Time-Based RSUs | 2,123,450 | 4,233,818 | 4,233,818 | 2,636,062 | 5,397,649 | 5,397,649 | ||||||||||||||||||
Performance-Based RSUs | 6,816,865 | 15,256,350 | 15,256,350 | 13,167,599 | 18,863,068 | 18,863,068 | ||||||||||||||||||
2018 STIP | 1,567,428 | 1,567,428 | 1,567,428 | |||||||||||||||||||||
2019 STIP | 1,732,125 | 1,732,125 | 1,732,125 | |||||||||||||||||||||
Medical Coverage | 15,021 | 15,021 | — | 16,046 | 16,046 | — | ||||||||||||||||||
Outplacement Services | 6,500 | 6,500 | — | 6,500 | 6,500 | — | ||||||||||||||||||
Total Estimated Value | 14,016,764 | 24,566,617 | 21,057,595 | 21,433,332 | 29,890,388 | 25,992,842 | ||||||||||||||||||
| (1) | Upon Mr. Carey’s voluntary resignation from the Company as of December 31, |
| (2) | Pursuant to the Carter 2019 Third Amendment, on December 31, 2019, Mr. Carter received (i) full vesting of his outstanding RSUs and PRSUs (covering, in the aggregate, 262,520 shares of Company common stock) and (ii) a cash payment equal to $4,750,000 representing two times the sum of his base salary plus his target STI. |
| 52 | T-Mobile |
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.
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, our Chief Executive Officer. We have calculated the median of our employees’ 20182019 total annual compensation (excluding our Chief Executive Officer) to be $59,653.$62,195. Our Chief Executive Officer’s 20182019 total annual compensation, as set forth in the 20182019 Summary Compensation Table above (adjusted to include his employer-paid health benefits with respect to 2018)2019), was $66,543,571.$27,762,231. As a result, the estimated ratio of the total compensation of Mr. Legere to the median of the annual total compensation of our employees (other than the Chief Executive Officer) was 1,116446 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.
The total annual compensation for our Chief Executive Officer was atypically high in 2018 due to Mr. Legere’s receipt of a specialone-time equity award, his Transaction PRSUs in connection with the Sprint Combination (see page 32 for details). If Mr. Legere’s Transaction PRSU award is removed from this calculation, his annualized total compensation
for 2018, as adjusted, would be approximately $22.4 million and would result in a ratio of 376:1. We believe that this reduced compensation amount, and the resulting lower ratio, would provide a more accurate picture of the total annual compensation of our Chief Executive Officer in the ordinary course of business and the annual total compensation of our employees.
We identified the median employee by preparing a listing of all 51,90052,846 individuals (excluding our Chief Executive Officer) who were employed by us on December 31, 2018,2019, the last day of the calendar year, and examining the 20182019 total compensation paid to each such individual as reflected in our payroll records for 2018.2019. We included all employees (other than the Chief Executive Officer), 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 2018.2019. 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 1816 employees, consisting of the median employee and 1715 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 20182019 Summary Compensation Table in this proxy statement, taking into account employer-paid costs for 20182019 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 INFORMATION
The following table provides information as of December 31, 2018,2019, with respect to outstanding equity awards and shares available for future issuance under our equity compensation plans.
Plan Category | Number of Securities to of Outstanding Options, (a) | Weighted Average (b) | Number of Securities (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: | 20,827,363 | |||||||||||||||||||||||
Stock Options | 284,811 | (1) | $ | 14.58 | — | 194,942 | (1) | $ | 13.80 | — | ||||||||||||||
RSUs | 14,862,189 | (2)(3) | — | (4) | — | |||||||||||||||||||
Restricted Stock and RSUs | 14,306,750 | (2)(3) | — | (4) | — | |||||||||||||||||||
Equity Compensation Plans Not Approved by Stockholders | — | — | — | — | — | — | ||||||||||||||||||
Total | 15,147,000 | $ | 14.58 | (4) | 27,838,984 | (5) | 14,501,692 | $ | 13.80 | 20,827,363 | (5) | |||||||||||||
| (1) | Granted under the Metro Communications, Inc. 2010 Equity Incentive Plan, the Amended and Restated |
| (2) | 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. |
| (3) | Includes performance-based RSUs assuming target performance. |
| (4) | RSUs 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) | As of December 31, |
| T-Mobile | 53 |
Security Ownership of Principal Stockholders and Management
The following table sets forth information, as of March 31, 2019,April 1, 2020, regarding the beneficial ownership of our common stock by:
| ∎ | each of our directors; |
| ∎ | 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.April 1, 2020.
| Common Stock Beneficially Owned | ||||||||||||||||
| Number | Percentage | Common Stock Beneficially Owned | ||||||||||||||
| Number | Percentage | |||||||||||||||
Directors, Nominees and Named Executive Officers (1) | ||||||||||||||||
David A. Carey |
| 226,795 |
|
| * |
|
| 357,714 |
|
| * |
| ||||
J. Braxton Carter |
| 211,601 |
|
| * |
|
| 25,618 |
|
| * |
| ||||
Marcelo Claure |
| 1,219,534 |
|
| * |
| ||||||||||
Srikant M. Datar (2) |
| 28,782 |
|
| * |
|
| 32,106 |
|
| * |
| ||||
Ronald D. Fisher |
| 214,529 |
|
| * |
| ||||||||||
Srini Gopalan |
| — |
|
| * |
| ||||||||||
Lawrence H. Guffey |
| 20,782 |
|
| * |
|
| 24,106 |
|
| * |
| ||||
Timotheus Höttges |
| — |
|
| * |
|
| — |
|
| * |
| ||||
Christian P. Illek |
| — |
|
| * |
|
| — |
|
| * |
| ||||
Bruno Jacobfeuerborn |
| — |
|
| * |
| ||||||||||
Stephen Kappes |
| 8,387 |
|
| * |
| ||||||||||
Raphael Kübler |
| ��� |
|
| * |
|
| — |
|
| * |
| ||||
Thorsten Langheim |
| — |
|
| * |
|
| — |
|
| * |
| ||||
John J. Legere |
| 1,673,089 |
|
| * |
|
| 2,668,797 |
|
| * |
| ||||
Neville R. Ray(3) |
| 272,743 |
|
| * |
|
| 327,374 |
|
| * |
| ||||
G. Michael Sievert |
| 405,743 |
|
| * |
|
| 473,647 |
|
| * |
| ||||
Olaf Swantee |
| — |
|
| * |
| ||||||||||
Teresa A. Taylor |
| 20,782 |
|
| * |
|
| 24,106 |
|
| * |
| ||||
Kelvin R. Westbrook |
| 20,782 |
|
| * |
|
| 24,106 |
|
| * |
| ||||
All directors and executive officers as a group (19 persons) |
| 3,421,265 |
|
| * |
| ||||||||||
All directors and executive officers as a group (21 persons) |
| 5,793,637 |
|
| * |
| ||||||||||
Beneficial Owners of More Than 5%: | ||||||||||||||||
Deutsche Telekom AG(4) Friedrich-Ebert-Alle 140 53113 Bonn, Germany
|
| 538,590,941
|
|
| 63.0
| %
| 843,196,990 | 68.3 | % | |||||||
SoftBank Group Corp. (5) 1-9-1 Higashi-Shimbashi,Minato-ku, Tokyo,105-7303 Japan
| 304,606,049 | 24.7 | % | |||||||||||||
| * | Represents less than 1% |
| (1) | Unless otherwise indicated, the address of each person is c/oT-Mobile US, Inc., 12920 SE 38th Street, Bellevue, Washington 98006. |
| (2) | Includes 8,000 shares of common stock held by Datar Investment LLC and 13,424 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. |
| 54 | T-Mobile 2020 Proxy Statement |
Security Ownership of Principal Stockholders and Management
| (3) | Includes 6,250 shares of common stock from vested |
| (4) | According to the Schedule 13D/A filed by Deutsche Telekom on April |
| (5) | According to the Schedule 13D filed by SoftBank on April 1, 2020, reflecting sole investment power with respect to 304,606,049 shares of common stock as of April 1, 2020. The shares are held directly by SoftBank Group Capital Ltd., which is a wholly owned indirect subsidiary of SoftBank. SoftBank has entered into a proxy agreement with Deutsche Telekom 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 shares of common stock. |
| T-Mobile |
Transactions with Related Persons and Approval
Since the Metro Combination, we have not been a participant in any related person transactions (as defined in the Related Person Transaction Policy described below) other than as described below in “Transactions with Deutsche Telekom.Telekom and SoftBank.” We are party to a number of related person transactions with our majoritysignificant stockholder, Deutsche Telekom, SoftBank and itstheir 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. Each of the related person transactions with Deutsche Telekom or its affiliates
and the related person transaction with Brightstar described below that were entered into from and after the consummation of the Metro Combination was reviewed and approved in
accordance with our current Related Person Transaction Policy (the “Related Person Transaction Policy”), which includes consideration of whether the terms are 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.
In addition, as a result of the Sprint Combination, we became party to a number of related person transactions with SoftBank and its affiliates that are being evaluated during the integration process to determine those that will remain in place for the Company.
RELATED 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’s independence and the Company’s continued compliance with the requirements under the Exchange Act, |
If the proposed related person transaction is with Deutsche Telekom or any of its affiliates while the Stockholder’sStockholders’ 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 TELEKOM AND 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.
Similarly, 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.
Stockholder’sAmended and Restated 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, we granted certain governance and other rights to Deutsche Telekom and SoftBank, and each of Deutsche Telekom and SoftBank agreed to certain restrictions, as outlined below:
| ∎ | At all times when the |
|
|
| T-Mobile |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
can designate up to nine nominees for election to our Board and SoftBank can designate up to four nominees for election to our Board. |
| ∎ | So long as each of Deutsche Telekom’s and SoftBank’s stock ownership percentage is at least 10%, each of Deutsche Telekom and SoftBank has the right to designate as nominees for election to our Board a number of individuals based on each’s respective ownership percentage. |
| ∎ | Each committee of the Board shall include in its membership a number of Deutsche Telekom and SoftBank designees in proportion to the respective number of Deutsche Telekom and SoftBank 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. |
| ∎ | So long as Deutsche Telekom beneficially owns 30% or more of the outstanding shares of our common stock, without Deutsche Telekom’s 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. |
| ∎ | So long as SoftBank beneficially owns 22.5% or more of the outstanding shares of our common stock and the sum of the voting percentage of Deutsche Telekom and SoftBank is at least 30%, without SoftBank’s consent we are not permitted to take certain actions, including 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, and the issuance of equity securities in excess of 10% of our outstanding shares. |
| ∎ | So long as SoftBank beneficially owns 22.5% or more of the outstanding shares of our common stock, we may not enter into any binding definitive agreement to effect any merger, sale or disposition of all or substantially all of our assets without providing SoftBank an advance notice and right of first refusal. |
| ∎ | 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. |
| ∎ |
between or involving both us and Deutsche Telekom |
| ∎ | In the event that Deutsche Telekom’s voting percentage would be reduced to |
| ∎ | Deutsche Telekom, SoftBank and |
| ∎ | Each of Deutsche Telekom and SoftBank is prohibited 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 |
| ∎ | 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 |
| ∎ | Except as otherwise provided in the Amended and Restated Stockholders’ Agreement, the Amended and Restated 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%. |
| T-Mobile 2020 Proxy Statement | 57 |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
Trademark License
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 2019, we paid Deutsche Telekom royalties totaling approximately $88.1 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 business combination agreement betweenT-Mobile and Sprint in connection with the Sprint Combination (the “Sprint Business Combination Agreement”) included a proposed “Amendment No. 1 to the License Agreement” by which the parties agree to a new royalty rate for theten-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 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 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.
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
We are obligated to payAfter the Sprint Combination, Deutsche Telekom a royalty in an amount equal to 0.25% (the “royalty rate”)maintained greater than 50% of 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 termsoutstanding shares 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 liabilitycapital stock of the Company andsince Deutsche Telekom is limitedand SoftBank hold approximately 43.6% and 24.7%, respectively, of our outstanding shares as of April 1, 2020, and pursuant to the proxy,€lock-up1 million per calendar year. and right of first refusal agreement between Deutsche Telekom and SoftBank, SoftBank agrees to vote its shares ofT-Mobile common stock as directed by Deutsche Telekom.
Financing Arrangements
Senior Unsecured Notes
During 2019, Deutsche Telekom currently holdsheld 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 | ||||||||||||||
| 58 | T-Mobile 2020 Proxy Statement |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
Series | Largest principal amount outstanding during 2019 | Principal amount as of March 31, 2020 | Interest payment dates | Maturity | Earliest redemption | Optional redemption with equity proceeds | Principal paid in 2019 | Interest paid in 2019 | Other amounts paid or (received) in 2019 | |||||||||||||||||||
5.300% Senior Notes due 2021(1) | $ | 2,000,000,000 | $ | 2,000,000,000 | March 15 and September 15 | March 15, 2021 | March 15, 2018 | Not applicable | $ | 0 | $ | 106,000,000 | $ | 0 | ||||||||||||||
5.125% Senior Notes due2025-1 (amended to mature 2021)(2) | $ | 1,250,000,000 | $ | 1,250,000,000 | April 15 and October 15 | April 15, 2021 | April 15, 2020 | Not applicable | $ | 0 | $ | 64,062,500 | $ | 0 | ||||||||||||||
5.375% Senior Notes due2027-1 (amended to mature 2022)(3) | $ | 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 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(4) | $ | 600,000,000 | $ | 0 | April 28 and October 28 | April 28, 2023 | April 28, 2019 | Not applicable | $ | 600,000,000 | $ | 27,996,000 | $ | 27,996,000 | ||||||||||||||
6.000% Senior Notes due 2024(5) | $ | 2,000,000,000 | $ | 2,000,000,000 | April 15 and October 15 | April 15, 2024 | April 15, 2019 | Not applicable | $ | 0 | $ | 120,000,000 | $ | 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 | $ | 45,000,000 | $ | 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 | $ | 71,250,000 | $ | 0 | ||||||||||||||
| (1) |
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| (2) |
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| (3) | Effective immediately prior to the consummation of the Sprint Combination |
| (4) | ||||
On March 28, 2019, T-Mobile | USA issued a notice of redemption, pursuant to which the 9.332% Senior Reset Notes due 2023 were redeemed effective April 28, 2019. “Other amounts” in the table above consist of redemption premium paid |
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
| (5) | 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. |
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.
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 2021), 4.500% Senior Notes due2026-1, 5.375% Senior Notes due2027-1 (amended to mature 2027) and 4.750% Senior Notes due2028-1 held by Deutsche Telekom (collectively, the “Specified DT Notes”) have 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 margin 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 fee 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.
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TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
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 2018,2019, we paid to Deutsche Telekom commitment fees of approximately $2.7$3.6 million and approximately $13.6$3.3 million in interest on borrowings
TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
under the secured revolving credit facility and commitment fees of approximately $4.7$3.6 million and approximately $1.3 million in interest on borrowings under the unsecured revolving credit facility.
As
On April 1, 2020, in connection with the Sprint Combination and pursuant to the terms of March 31, 2019, there was no amounts outstandingthe Financing Matters Agreement, T-Mobile USA terminated each of the secured revolving credit facility and unsecured revolving credit facility. In connection with the terminations, we paid to Deutsche Telekom commitment fees of approximately $0.8 million under the secured revolving credit facility orand commitment fees of approximately $0.7 million under the 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, betweenamongT-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 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 andT-Mobile USA (and certain of their subsidiaries) with respect to dividends and other distributions, restrictions on subsidiary investments and distributions toT-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 2018,2019, we paid to Deutsche Telekom approximately $148.8$159.4 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 has, 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 has consented to amendments toT-Mobile USA’s
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TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
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 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 Agreements
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 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 2018,2019,T-Mobile USA incurred $109,000approximately $0.2 million in expenses forT-Systems’ services under the Management Agreement.
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 orbi-annualrenewal terms thereafter. During 2018,2019,T-Mobile USA received approximately $1.5$1.7 million in net revenue and incurred approximately $5.2
$4.8 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 2018,2019,T-Mobile USA experienced an approximately $4.9$7.8 million increase in roaming revenues (primarily as a result of minimum revenue commitment payments tohigher roaming volumes sent byT-Mobile USA fromto certain partners) and experienced an approximately $4.1$9.0 million increase 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 2018,2019,T-Mobile USA elected to participate in the roaming broker arrangement for calendar year 2019.2020.
Telecom Master Services Agreement Between Deutsche Telekom North America andT-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 2018,2019,T-Mobile USA incurred approximately $36.3$39.7 million in expenses for Deutsche Telekom North America’s services under the Master Services Agreement.
Services AgreementVideo Service Order 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 (the “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,
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TRANSACTIONS WITH RELATED PERSONS AND APPROVAL
pursuant to whichT-Systems North America would provideprovided termination assistance to transition IT support services to a new vendor. No further expenses were incurred in 2019 under this arrangement. The Corporate Video Cross Company Exchange Services and Connection Statement of Work and Service Order (the “Video Services Order”) that was entered into under the Service Agreement, however, continued to be operational following the expiration of the Services Agreement. Pursuant to the video Services Order,T-Systems North America continued to provide telepresence-enabled video bridge services to the Company. During 2018,2019,T-Mobile USA incurred approximately $205,000$77,000 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.Video Service Order.
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 2018,2019,T-Mobile USA incurred approximately $3.3$4.7 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 until the earlier of the agreement.closing of the Sprint Combination or the termination of the Sprint Business Combination Agreement. Pursuant to the Services Agreement, as amended,T-Mobile has billed Deutsche Telekom $10.0 million for such services in 2018.2019. The Service Agreement was terminated upon the closing of the Sprint Combination.
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 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 2018,2019, the Company incurred approximately $6.6$6.4 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.stock. Concurrent with the purchase of Mojio’s Class B preferred stock, the Company entered into an amendment of the amended and restated agreement. The amendment
provides that the Company willpre-pay to Mojio, on a calendar quarterly basis, the sum of $2.0 million, for monthly recurring charges (MRC) for subscribers to the connected car service. Thepre-payment is subject to a quarterlytrue-up against actual MRC for each such quarter. Thepre-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 thepre-payment. After termination or expiration of thepre-payment period, the Company’s payment of MRC reverts to monthly payment, in arrears.
Frame Agreement BetweenT-Mobile and Telekom Deutschland GmbH (“Telekom”)
T-Mobile entered into a Frame IMSI Transfer Agreement(“F-ITA”) effective as of February 20, 2020 with Telekom pursuant to whichT-Mobile will provide connectivity for Telekom IoT opportunities in the U.S., including connected car opportunities. A contemporaneous Addendum to theF-ITA addresses the connected car opportunity with Bayerische Motoren Werke AG. During 2019, the Company incurred no expenses pursuant to this agreement.
Brightstar Master Services Agreement and Related Statements of Work
On the closing date of the Sprint Combination,T-Mobile and Brightstar US 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 provideT-Mobile with forward and reverse logistics services for handsets and other devices, support and services related toT-Mobile’strade-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 transition period while the operations ofT-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. Pursuant to the Brightstar Agreement, management expectsT-Mobile to pay Brightstar up to an estimated $88 million in the first year and $67 million in the second year.
Other Transactions with SoftBank
Prior to the Sprint Combination, Sprint entered into a number of related party transactions with SoftBank and its affiliates, including for international wireless roaming, wireless and wireline call termination, joint procurement and device distribution activities, assignment of software licenses, network testing services, tax sharing agreements, rooftop network agreements, reimbursement of labor costs on collaboration projects, flight expenses on Sprint’s aircraft, and service as a compute and storage provider.
As a result of the Sprint Combination, we became party to a number of these related person transactions with SoftBank and its affiliates. These transactions are being evaluated during the integration process to determine those that will remain in place for the Company.
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Proposal 34 - Stockholder Proposal for Limitations on Accelerated Vesting of Equity Awards in the Event of a Change of Control
AmalgaTrust, a division of Amalgamated Bank of Chicago, on behalf of theAFL-CIO Reserve Fund, 815 16th
CtW Investment Group, 1900 L. St., N.W., NW, Suite 900, Washington, D.C. 20006,20036, a beneficial owner of 20070 shares of the Company’s common stock, has advised us that it intends to submit the following proposal at the Annual Meeting. The “Supporting Statement” below was provided by the proponent, and in such section, “we” refers to CtW Investment Group.
| Our Board of Directors recommends a voteAGAINST the proposal for |
Required Vote
Approval of the stockholder proposal 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 majority of the total votes cast on the proposal.
Proposal
RESOLVED: Shareholders urge the Board of Directors ofT-Mobile US, Inc. (the “Company”) to adopt a policy that in the event of a change in control of the Company, as defined 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 up to the time of the senior executive’s termination, with such qualifications for an award as 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 control of the Company. These accelerated equity awards can significantly increase the total value of senior executives’ “golden parachutes” after a change in control. We do not question that a reasonable amount of severance payments may be appropriate for senior executives and other employees.
We are concerned, however, that current practices at our Company may permit windfall awards to senior executives. As of December 31, 2017,2018, our Company’s named executive officers other than the CEO John Legere had just under $53at least $31 million – and potentially up to $117 million – in unvested time-based and performance-based restricted stock units subject to acceleration following a change in control. This amountcontrol or the closing of accelerated equity is in addition to a lump sum of $10 million in cash severancethe Sprint merger, if these executives leave the company within 12 months and $5.7 million in short term cash incentives that Legere would have been entitled to receive if his employment was terminated after a change on control.for good reason.
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 34
The proponents have submittedCompany has received 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 or Company-initiatednon-renewalof 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 connection with the proposed Sprint Combination, which isdid not result in a change in control of the Company, the Company’s outstanding equity awards dodid not provide for automatic accelerated vesting. Instead, each Severance Letter Agreement entered into in connection with the Sprint 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, in limited cases, due to expiration or Company-initiatednon-renewalof 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.
| T-Mobile | 63 |
PROPOSAL 3 - STOCKHOLDER PROPOSAL FOR LIMITATIONS ON ACCELERATED VESTING OF EQUITY AWARDS IN THE EVENT OF A CHANGE OF CONTROLProposal 4—Stockholder Proposal for Limitations on Accelerated Vesting of Equity Awards in the Event of a Change of Control
We provide our executives 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 connection with a change in control aligns the interests of the Company’s executives 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 or Company-initiatednon-renewalof the executive’s employment term.
Allowing for double-trigger accelerated vesting ensures that executives are not penalized with a loss of then-unvested equity awards due 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.
| For the reasons above, the Board recommends a voteAGAINST this proposal. |
| 64 | T-Mobile |
Questions and Answers About the Annual Meeting and Voting
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, 2020, 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, 2020. 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.
WhoHow do proxies work?
You may vote by authorizing the persons selected by us as your proxy to vote your shares at the Annual Meeting?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: G. Michael Sievert and J. Braxton Carter.
Who is entitled to vote?
If you are a holder of record of our common stock as of the record date (April 18, 2019)7, 2020), 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, our Chief Executive Officer, and J. Braxton Carter, our Executive Vice President and Chief Financial Officer.
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, 2019,3, 2020, 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, 20194, 2020 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, 2019,3, 2020, or the date immediately before any date to which the Annual Meeting may be continued, adjourned or postponed.
In PersonVoting by Participants in Sprint’s 401(k) Plan.If you are a participant in Sprint’s 401(k) Plan (assumed by us in connection with the Sprint Combination), you have the right to direct the trustee of the Plan, Fidelity Management Trust Company, how to vote the shares attributable to your account in the Plan. To allow sufficient time for the trustee to vote, your should submit your proxy according to any of the above methods by 11:59 p.m. EDT on June 1, 2020.
.At 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?
| ∎ | 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 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. |
| ∎ | 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. |
| ∎ | If you are a participant in Sprint’s 401(k) Plan, you have the right to direct the trustee of the Plan, Fidelity Management Trust Company, how to vote the shares attributable to your account in the Plan. Unless otherwise required by law, the trustee will vote those shares as directed. If you do not direct the trustee how to vote your shares, Sprint’s 401(k) Plan provides for the trustee to vote those shares in the same proportion as the shares for which it receives directions from all other participants. |
| T-Mobile | 65 |
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
Proposal | Recommended Vote | Vote Required | Withhold Votes/Abstentions | Broker Non-Votes | ||||||
1. | Election of Directors | FOR | Plurality | No Effect | No Effect | |||||
2. | Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year | FOR | Majority* | No Effect | ** | |||||
3. | Advisory Vote to Approve the Compensation Provided to the Company’s Named Executive Officers for 2019 | FOR | Majority* | No Effect | No Effect | |||||
4. | 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, the advisory vote to approve the compensation provided to the Company’s named executive officers, and the approval of the stockholder proposal are 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 or proposal for which the vote required is a “majority” will, if presented, be approved if a majority of the votes cast “FOR” such proposal exceed the number of votes cast “AGAINST” such proposal. Neither abstentions nor brokernon-votes will count as votes cast “FOR” or “AGAINST” the proposal. Therefore, abstentions and brokernon-votes 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?
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 |
Attendance at Virtually attending the 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?
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 854,303,0111,234,489,733 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 in order to virtually attend the Annual Meeting?
If you are a record holder of shares of our common stock, you must bring the Notice of Internet Availability of Proxy Materials or the admission ticket enclosed with the paper copy of the proxy materials. However, if you hold your shares of common stock in street name, you must ask the broker,
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, 2019.7, 2020. You can obtain an admission ticket by presenting this confirming documentation from your broker, bank or other institution at the Annual Meeting.
Every attendee of 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.
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.
If you are a record holder of shares of our common stock, you can virtually attend the Annual Meeting at the meeting time by visiting www.virtualshareholdermeeting.com/TMUS2020 and entering the16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card or on the instructions that accompany your proxy materials.
If you hold your shares of common stock in street name, you may be required to provide proof of beneficial ownership, such as 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 7, 2020.
| 66 | T-Mobile 2020 Proxy Statement |
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
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?
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?
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.
| T-Mobile |
Other Information and Business
COMPANY INFORMATION
Our website contains the Company’s current Corporate Governance Guidelines, committee charters, Code of Business Conduct, Code of Ethics for Senior Financial Officers 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 20182019 Annual Report to Stockholders, a copy of the Company’s
Annual Report onForm 10-K for the fiscal year ended December 31, 2018,2019, 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., 1 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)
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 20182019 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 20182019 Annual Report to Stockholders or Notice of Internet Availability of Proxy Materials and wish to receive a separate copy for each stockholder at 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 20182019 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 20202021 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 20202021 Annual Meeting of Stockholders. To be eligible for inclusion in our 20202021 Proxy Statement underRule 14a-8, your proposal must be received by us no later than the close of business on December 27, 2019,22, 2020, 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 20202021 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 20202021 Annual Meeting of Stockholders is not more than 30 days before and not more than 60 days after the anniversary date of the 20192020 Annual Meeting, you must notify us in writing, and such written notice must be delivered to our secretary no earlier than February 14, 2020,4, 2021, and no later than March 15, 2020.6, 2021.
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.
| T-Mobile |
OTHER INFORMATION AND BUSINESS
DELINQUENT SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS
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
and written representations from the reporting persons that no Form 5 was required, the Company believes that all personsone report by Elizabeth A. McAuliffe relating to one transaction was not filed on a timely basis all reportsas required by Section 16(a).
OTHER 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
| T-Mobile |
Reconciliation ofNon-GAAP Financial Measures
Certain of the financial metrics applicable to the 20182020 STIP described under “Executive 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 expenses not reflective ofT-Mobile’s ongoing operating performance.
Adjusted EBITDA is reconciled to net income as follows:
| Quarter | Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Quarter | Year Ended December 31, | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | 2017 | 2018 | 2018 | 2018 | 2018 | 2018 | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 698 | $ | 581 | $ | 550 | $ | 2,707 | $ | 671 | $ | 782 | $ | 795 | $ | 640 | $ | 4,536 | $ | 2,888 | $ | 671 | $ | 782 | $ | 795 | $ | 640 | $ | 908 | $ | 939 | $ | 870 | $ | 751 | $ | 2,888 | $ | 3,468 | ||||||||||||||||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | 339 | 265 | 253 | 254 | 251 | 196 | 194 | 194 | 1,111 | 835 | 251 | 196 | 194 | 194 | 179 | 182 | 184 | 182 | 835 | 727 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense to affiliates | 100 | 131 | 167 | 162 | 166 | 128 | 124 | 104 | 560 | 522 | 166 | 128 | 124 | 104 | 109 | 101 | 100 | 98 | 522 | 408 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income | (7 | ) | (6 | ) | (2 | ) | (2 | ) | (6 | ) | (6 | ) | (5 | ) | (2 | ) | (17 | ) | (19 | ) | (6 | ) | (6 | ) | (5 | ) | (2 | ) | (8 | ) | (4 | ) | (5 | ) | (7 | ) | (19 | ) | (24 | ) | ||||||||||||||||||||||||||||||||||||||||
Other (income) expense, net | (2 | ) | 92 | (1 | ) | (16 | ) | (10 | ) | 64 | (3 | ) | 3 | 73 | 54 | (10 | ) | 64 | (3 | ) | 3 | (7 | ) | 22 | (3 | ) | (4 | ) | 54 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | (91 | ) | 353 | 356 | (1,993 | ) | 210 | 286 | 335 | 198 | (1,375 | ) | 1,029 | 210 | 286 | 335 | 198 | 295 | 301 | 325 | 214 | 1,029 | 1,135 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Operating income | 1,037 | 1,416 | 1,323 | 1,112 | 1,282 | 1,450 | 1,440 | 1,137 | 4,888 | 5,309 | 1,282 | 1,450 | 1,440 | 1,137 | 1,476 | 1,541 | 1,471 | 1,234 | 5,309 | 5,722 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 1,564 | 1,519 | 1,416 | 1,485 | 1,575 | 1,634 | 1,637 | 1,640 | 5,984 | 6,486 | 1,575 | 1,634 | 1,637 | 1,640 | 1,600 | 1,585 | 1,655 | 1,776 | 6,486 | 6,616 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation(1) | 67 | 72 | 83 | 85 | 96 | 106 | 102 | 85 | 307 | 389 | 96 | 106 | 102 | 85 | 93 | 111 | 108 | 111 | 389 | 423 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost associated with the Transactions(2) | — | — | — | — | — | 41 | 53 | 102 | — | 196 | — | 41 | 53 | 102 | 113 | 222 | 159 | 126 | 196 | 620 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, net(3) | — | 5 | — | 29 | 3 | 2 | 7 | 6 | 34 | 18 | 3 | 2 | 7 | 6 | 2 | 2 | 3 | (5 | ) | 18 | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Adjusted EBITDA(4) | $ | 2,668 | $ | 3,012 | $ | 2,822 | $ | 2,711 | $ | 2,956 | $ | 3,233 | $ | 3,239 | $ | 2,970 | $ | 11,213 | $ | 12,398 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 2,956 | $ | 3,233 | $ | 3,239 | $ | 2,970 | $ | 3,284 | $ | 3,461 | $ | 3,396 | $ | 3,242 | $ | 12,398 | $ | 13,383 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense in the Consolidated Financial Statements. Additionally, certain stock-based compensation expenses associated with the Transactions |
(2) The defined term “Transactions” includes the Sprint Combination and the other transactions contemplated by the Sprint Business Combination Agreement. |
| (3) | Other, net may not agree to the Condensed 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. |
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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 metric 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, network decommissioning costs and costs related to the Transactions, 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.
“Adjusted EBIT”: Adjusted EBITDA minus depreciation and amortization expense.
| T-Mobile | A-1 |
APPENDIX A - 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, | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | 2017 | 2018 | 2018 | 2018 | 2018 | 2018 | 2019 | 2019 | 2019 | 2019 | 2018 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 698 | $ | 581 | $ | 550 | $ | 2,707 | $ | 671 | $ | 782 | $ | 795 | $ | 640 | $ | 4,536 | $ | 2,888 | $ | 671 | �� | $ | 782 | $ | 795 | $ | 640 | $ | 908 | $ | 939 | $ | 870 | $ | 751 | $ | 2,888 | $ | 3,468 | |||||||||||||||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | 339 | 265 | 253 | 254 | 251 | 196 | 194 | 194 | 1,111 | 835 | 251 | 196 | 194 | 194 | 179 | 182 | 184 | 182 | 835 | 727 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense to affiliates | 100 | 131 | 167 | 162 | 166 | 128 | 124 | 104 | 560 | 522 | 166 | 128 | 124 | 104 | 109 | 101 | 100 | 98 | 522 | 408 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income | (7 | ) | (6 | ) | (2 | ) | (2 | ) | (6 | ) | (6 | ) | (5 | ) | (2 | ) | (17 | ) | (19 | ) | (6 | ) | (6 | ) | (5 | ) | (2 | ) | (8 | ) | (4 | ) | (5 | ) | (7 | ) | (19 | ) | (24 | ) | ||||||||||||||||||||||||||||||||||||||||
Other (income) expense, net | (2 | ) | 92 | (1 | ) | (16 | ) | (10 | ) | 64 | (3 | ) | 3 | 73 | 54 | (10 | ) | 64 | (3 | ) | 3 | (7 | ) | 22 | (3 | ) | (4 | ) | 54 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | (91 | ) | 353 | 356 | (1,993 | ) | 210 | 286 | 335 | 198 | (1,375 | ) | 1,029 | 210 | 286 | 335 | 198 | 295 | 301 | 325 | 214 | 1,029 | 1,135 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Operating income | 1,037 | 1,416 | 1,323 | 1,112 | 1,282 | 1,450 | 1,440 | 1,137 | 4,888 | 5,309 | 1,282 | 1,450 | 1,440 | 1,137 | 1,476 | 1,541 | 1,471 | 1,234 | 5,309 | 5,722 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation(1) | 67 | 72 | 83 | 85 | 96 | 106 | 102 | 85 | 307 | 389 | 96 | 106 | 102 | 85 | 93 | 111 | 108 | 111 | 389 | 423 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost associated with the Transactions | — | — | — | — | — | 41 | 53 | 102 | — | 196 | — | 41 | 53 | 102 | 113 | 222 | 159 | 126 | 196 | 620 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other, net(2) | — | 5 | — | 29 | 3 | 2 | 7 | 6 | 34 | 18 | 3 | 2 | 7 | 6 | 2 | 2 | 3 | (5 | ) | 18 | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Adjusted EBIT(3) | $ | 1,104 | $ | 1,493 | $ | 1,406 | $ | 1,226 | $ | 1,381 | $ | 1,599 | $ | 1,602 | $ | 1,330 | $ | 5,229 | $ | 5,912 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBIT | $ | 1,381 | $ | 1,599 | $ | 1,602 | $ | 1,330 | $ | 1,684 | $ | 1,876 | $ | 1,741 | $ | 1,466 | $ | 5,912 | $ | 6,767 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense in the Consolidated Financial Statements. Additionally, certain stock-based compensation expenses associated with the Transactions have been included in |
| (2) | Other, net may not agree to the Condensed 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. |
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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 20182019 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 |
T-MOBILE US, INC. ATTN: BROADY HODDER 12920 SE 38TH STREET BELLEVUE, WA 98006 | VOTE BY INTERNET | |
Before The Meeting- Go towww.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 | ||
| ||
You may attend the | ||
| 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 Time on June | ||
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-P24097D12361-P34638 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.
T-MOBILE US, INC.
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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 | 08) Stephen R. Kappes | |||||||||||||||||||||||||||
| 02) Srikant M. Datar | ||||||||||||||||||||||||||||
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| 05) | ||||||||||||||||||||||||||||
| 06) | ||||||||||||||||||||||||||||
| 07) Christian P. Illek | ||||||||||||||||||||||||||||
| The Board of Directors recommends you vote FOR | For | Against | Abstain | |||||||||||||||||||||||||
| 2. | Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2020. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||
| 3. | Advisory Vote to Approve the Compensation Provided to the Company’s Named Executive Officers for 2019. | ☐ | ☐ | ☐ | ||||||||||||||||||||||||
| The Board of Directors recommends you vote AGAINST proposal | For | Against | Abstain | |||||||||||||||||||||||||
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 an authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
| Date
| Signature (Joint Owners) | Date
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2019 ANNUAL MEETING ADMISSION TICKET
2020 ANNUAL MEETING OF STOCKHOLDERS OF
T-MOBILE US, INC.
Thursday, June 13, 20194, 2020
8:00 A.M., Pacific Daylight Time
Four Seasons Hotel
99 Union Street
Seattle, Washington 98101Online only at www.virtualshareholdermeeting.com/TMUS2020
At the Annual Meeting, stockholders will vote upon the proposals outlined in the Notice of 20192020 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.
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E76642-P24097
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D12362-P34638
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T-MOBILE US, INC. Annual Meeting of Stockholders June This proxy is solicited by the Board of Directors
The stockholder(s) hereby appoint(s)
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
Continued and to be signed on reverse side
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