Item 5.02
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Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
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On and effective as of December 20, 2017 (the Effective Date),
T-Mobile
US, Inc. (the
Company) entered into an amended and restated employment agreement (the Employment Agreement) with J. Braxton Carter, pursuant to which Mr. Carter will continue to serve as the Companys Executive Vice President and
Chief Financial Officer. The Employment Agreement supersedes and replaces the prior employment agreement between the Company and Mr. Carter, dated as of January 25, 2013. The Employment Agreement provides for an initial employment term
through March 1, 2019 (the Initial Term), subject to extension as mutually agreed to by the parties.
Pursuant to the
Employment Agreement, Mr. Carter is entitled to (i) an annual base salary equal to $850,000, (ii) commencing with calendar year 2018, an annual short-term incentive (the STI Award) targeted at 150% of Mr. Carters
eligible base earnings during the applicable year, payable based on the attainment of
pre-established
performance goals, and (iii) commencing with calendar year 2018, an annual long-term incentive or
other equity awards with a target grant-date value that is no less than 250% of Mr. Carters total cash compensation (
i.e.
, base salary plus target short-term incentive award) as in effect at the time of grant. Mr. Carter may
also participate in Company employee benefit plans, to the same extent and on the same terms as apply to the Companys similarly-situated executives generally.
In connection with his entrance into the Employment Agreement, Mr. Carter will receive a
one-time
cash bonus in an amount equal to $2,500,000 (the Special Cash Bonus), payable on or within 15 days after March 1, 2019, subject to and conditioned upon his continued employment through March 1, 2019 (except as otherwise
described below). In addition, the Company will grant Mr. Carter a
one-time
award of time-based restricted stock units under the Companys 2013 Omnibus Incentive Plan (as amended, the
Plan), with respect to a number of shares of Company common stock equal to $2,500,000 divided by the average closing price of the Companys common stock for the 30 calendar
day-period
ending
five business days prior to the grant date, rounded up to the nearest whole restricted stock unit (the Special Equity Award). The Special Equity Award will vest in full on March 1, 2019, subject to and conditioned upon
Mr. Carters continued employment through such date (except as otherwise described below).
The Employment Agreement provides
that if Mr. Carters employment is terminated by the Company other than for cause (and other than due to Mr. Carters death or disability) or by Mr. Carter for good reason (each as defined in the
Employment Agreement) (each, a qualifying termination), then, subject to his timely execution and
non-revocation
of a release, he will be entitled to receive:
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a
lump-sum
payment equal to two times the sum of (i) his then-current annual base salary plus (ii) his then-current target STI Award;
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a pro rata STI Award for the calendar year in which the qualifying termination occurs (a Pro Rata STI), based on actual performance results for such calendar year;
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if not previously paid, a
pro-rata
portion of the Special Cash Bonus based on the number of days elapsed between the Effective Date and the date of the qualifying termination;
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if such termination occurs prior to March 1, 2019, Mr. Carters Special Equity Award will vest in full on the date of the qualifying termination;
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with respect to Mr. Carters then-outstanding long-term incentive awards (each, an LTI Award), unless the applicable award agreement provides for more favorable treatment:
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for time-based LTI Awards, Mr. Carter will vest in that portion of the LTI Award that would otherwise vest on the next scheduled vesting date following such qualifying termination; and
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performance-vesting LTI Awards will vest
pro-rata
at the end of the applicable performance period, based on actual performance during the applicable performance period and the
length of Mr. Carters employment during the applicable performance period; and
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Company-subsidized health and dental benefit coverage for up to twelve months following such qualifying termination.
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The severance benefits described above will be offset by any amounts payable to Mr. Carter under any other severance program maintained by the Company.
The Employment Agreement further provides that if Mr. Carters employment is terminated
due to his death or disability, he will be entitled to receive the following:
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any STI Award for the last completed calendar year preceding the termination date;
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a Pro Rata STI, based on the greater of target or actual performance for the calendar year in which such termination occurs;
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if not previously paid, a
pro-rata
portion of his Special Cash Bonus based on the number of days elapsed between the Effective Date and the termination date; and
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the vesting of any outstanding LTI Award granted under the Plan will be governed by the terms of the Plan and the applicable award agreement, which terms shall be no less favorable than those applicable to all other
similarly-situated employees of the Company.
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To the extent that any payment or benefit received by Mr. Carter pursuant
to the Employment Agreement or otherwise would be subject to an excise tax under Internal Revenue Code Section 4999, such payments and/or benefits will be subject to a best pay cap reduction if such reduction would result in a
greater net
after-tax
benefit to Mr. Carter than receiving the full amount of such payments.
The Employment Agreement also provides that the Company will reimburse Mr. Carter for up to $25,000 in legal fees incurred by him for
legal services performed during 2017 in connection with the Employment Agreement and his employment with the Company.
The foregoing
description of the Employment Agreement with Mr. Carter is qualified in its entirety by the full text of the Employment Agreement, a copy of which will be subsequently filed with the Securities and Exchange Commission.