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PCS > SEC Filings for PCS > Form 8-K on 2-May-2013All Recent SEC Filings

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Form 8-K for T-MOBILE US, INC.


2-May-2013

Entry into a Material Definitive Agreement, Termination of a Material Definitiv


Item 1.01 Entry into a Material Definitive Agreement.

Stockholder's Agreement

On April 30, 2013, pursuant to the Business Combination Agreement, the Company and Deutsche Telekom entered into a stockholder's agreement (the "Stockholder's Agreement"). Pursuant to the Stockholder's Agreement, Deutsche Telekom has the right to designate a number of individuals to be nominees for election to the Company's board of directors (the "Board") equal to the percentage of Common Stock beneficially owned by Deutsche Telekom multiplied by the number of directors on the Board rounded to the nearest whole number. In addition, the Company has agreed to include as members of each committee of the Board the number of Deutsche Telekom director designees equal to the percentage of Common Stock beneficially owned by Deutsche Telekom multiplied by the number of members of such committee rounded up to the nearest whole number, except to the extent that such membership would violate applicable law or stock exchange rules; provided that no committee may consist solely of directors designated by Deutsche Telekom. These rights will remain in effect as long as Deutsche Telekom beneficially owns 10% or more of the outstanding shares of Common Stock. The Company and Deutsche Telekom also have each agreed to use their reasonable best efforts to cause at least three members of the Board to be considered "independent" under the rules of the SEC and under applicable listing standards.

In addition, pursuant to the Stockholder's Agreement, as long as Deutsche Telekom beneficially owns 30% or more of the outstanding shares of Common Stock, the Company will not take certain actions without Deutsche Telekom's prior written consent, including (a) incurring indebtedness above certain levels based on a specified debt to cash flow ratio, (b) taking any action that would cause a default under any instrument evidencing indebtedness of Deutsche Telekom or its affiliates, (c) acquiring or disposing of assets or entering into mergers or similar acquisitions in excess of $1,000,000,000, (d) changing the size of the . . .



Item 1.02 Termination of a Material Definitive Agreement.

Intercompany Indebtedness

In connection with the issuance of the DT Notes (as defined below), as described in Item 2.03 below, T-Mobile USA and its subsidiaries were relieved of all obligations under $14.5 billion aggregate principal amount of indebtedness previously owed thereby to Deutsche Telekom and its subsidiaries (other than T-Mobile USA and its subsidiaries).

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Wireless Credit Facility

In connection with the closing of the Mergers, a portion of the net proceeds from the sale of $1.75 billion aggregate principal amount of 6.250% Senior Notes due 2021 and $1.75 billion aggregate principal amount of 6.625% Senior Notes due 2023, as described in Item 2.03 below, was used to repay all outstanding amounts owed under Wireless's existing $2.5 billion credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, to pay liabilities under related interest rate protection agreements and to pay related fees and expenses, and such credit facility was terminated on May 1, 2013.

The information set forth in Item 2.03 under the "Deutsche Telekom Notes" and "$3.5 Billion MetroPCS Notes" is incorporated herein by reference.



Item 2.01 Completion of Acquisition or Disposition of Assets.

The information set forth in the Introduction above regarding the acquisition of the equity interests of T-Mobile USA and the information set forth below in Item 2.03 is incorporated herein by reference.



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Deutsche Telekom Notes.

On April 28, 2013, T-Mobile USA issued $11.2 billion of senior unsecured notes to Deutsche Telekom (the "DT Notes") pursuant to the terms of the indenture, dated as of April 28, 2013, entered into by T-Mobile USA, the guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee, as modified by the supplemental indentures relating to each series of DT Notes, each also dated as of April 28, 2013. The DT Notes were guaranteed by T-Mobile USA's wholly owned domestic restricted subsidiaries (other than certain designated special purpose entities, a certain reinsurance subsidiary and immaterial subsidiaries). Upon closing of the Mergers, the Company and those subsidiaries of the Company that had previously been subsidiaries of Wireless agreed to guarantee the DT Notes pursuant to a supplemental indenture dated as of May 1, 2013. The DT Notes consist of the following series:

• 6.464% Senior Notes due 2019 in an aggregate principal amount of $1.25 billion;

• 6.542% Senior Notes due 2020 in an aggregate principal amount of $1.25 billion;

• 6.633% Senior Notes due 2021 in an aggregate principal amount of $1.25 billion;

• 6.731% Senior Notes due 2022 in an aggregate principal amount of $1.25 billion;

• 6.836% Senior Notes due 2023 in an aggregate principal amount of $600 million;

• Senior Reset Notes due 2019 with an initial coupon of 5.578%, which will be re-priced two years after the date of issuance, in an aggregate principal amount of $1.25 billion;

• Senior Reset Notes due 2020 with an initial coupon of 5.656%, which will be re-priced two years after the date of issuance, in an aggregate principal amount of $1.25 billion;

• Senior Reset Notes due 2021 with an initial coupon of 5.747%, which will be re-priced two and a half years after the date of issuance, in an aggregate principal amount of $1.25 billion;

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• Senior Reset Notes due 2022 with an initial coupon of 5.845%, which will be re-priced two and a half years after the date of issuance, in an . . .


Item 3.02 Unregistered Sales of Equity Securities

The information set forth in the Introduction above relating to the issuance of shares of Common Stock to T-Mobile Holding is incorporated herein by reference. The 535,286,077 shares of Common Stock issued and delivered to T-Mobile Holding pursuant to the Business Combination Agreement have been issued in a transaction exempted from the registration requirement of the Securities Act of 1933 pursuant to Section 4(2) thereof and Regulation D promulgated thereunder.

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Item 3.03 Material Modification to Rights of Security Holders

The information set forth in Item 1.01 relating to the Stockholder's Agreement and the information set forth in Item 5.03 relating to the Company's Restated Certificate of Incorporation and bylaws is incorporated herein by reference.



Item 4.01 Changes in Registrant's Certifying Accountant

The Transaction was treated as a "reverse acquisition" for accounting purposes and, as such, the historical financial statements of the accounting acquirer, T-Mobile USA, will become the historical financial statements of the Company. Pursuant to guidance from the SEC, a reverse acquisition results in a change of the accounting firm unless the same accounting firm reported on the financial statements of both the registrant and the accounting acquirer.

(a) Deloitte & Touche LLP was the independent registered public accounting firm that audited MetroPCS Communications, Inc.'s financial statements for the fiscal years ended December 31, 2012 and 2011. In connection with the closing of the Transaction, on May 1, 2013, the Audit Committee chose to (i) dismiss Deloitte & Touche LLP as the Company's independent registered public accounting firm, and
(ii) formally engage PricewaterhouseCoopers LLP to be the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2013. Deloitte & Touche LLP's reports on MetroPCS Communications, Inc.'s financial statements for the fiscal years ended December 31, 2012 and 2011 did not contain an adverse opinion or disclaimer of opinion, or qualification or modification as to uncertainty, audit scope, or accounting principles. In addition, during the Company's two most recent fiscal years and through the date of this report, there were no disagreements with Deloitte & Touche LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreement(s), if not resolved to the satisfaction of Deloitte & Touche LLP, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its report.

The Company has provided Deloitte & Touche LLP with a copy of the foregoing disclosures and requested that Deloitte & Touche LLP furnish a letter addressed to the SEC stating whether it agreed with the above statements made by the Company. A copy of such letter, dated May 1, 2013, is filed as Exhibit 16.1 to this Form 8-K, and incorporated herein by reference.

(b) As noted above in Item 4.01(a), on May 1, 2013, the Audit Committee of the Company's Board of Directors formally engaged PricewaterhouseCoopers LLP to be the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2013. PricewaterhouseCoopers LLP was the independent registered public accounting firm that audited T-Mobile USA's financial statements for the fiscal years ended December 31, 2012 and 2011. During the fiscal years ended December 31, 2012 and 2011, and during the interim period from January 1, 2013 to May 1, 2013, the Company did not consult with PricewaterhouseCoopers LLP in regards to MetroPCS Communication, Inc.'s financial statements, which were audited by Deloitte & Touche LLP, with respect . . .



Item 5.01 Changes in Control of Registrant.

The information set forth in the Introduction, Items 1.01, 2.01 and 3.02 above and Items 5.02 and 5.03 below is incorporated herein by reference.



Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Board of Directors

On April 30, 2013, in connection with the consummation of the Transaction and the Mergers, the Board was increased to 11 members, and Roger D. Linquist, Arthur C. Patterson, John (Jack) F. Callahan, Jr., and C. Kevin Landry resigned from their positions as directors of the Company.

W. Michael Barnes and James N. Perry, Jr. continue to serve as directors of the Company. Effective April 30, 2013, the following individuals were appointed by the Board as directors of the Company pursuant to the terms of the Business Combination Agreement and the Stockholder's Agreement, to fill the vacancies resulting from the resignations of the individuals referred to above and an increase in the size of the Board: Srikant Datar, Lawrence H. Guffey, Timotheus Höttges, Raphael Kübler, Thorsten Langheim, John J. Legere, René Obermann, Teresa A. Taylor, and Kelvin R. Westbrook.

Effective May 1, 2013, the Board's Committees were constituted as follows:

Audit Committee: Srikant Datar, W. Michael Barnes and James N. Perry, Jr.

Nominating and Corporate Governance Committee: Kelvin R. Westbrook, Thorsten Langheim and Lawrence H. Guffey

Compensation Committee: Teresa A. Taylor, Kelvin R. Westbrook, Lawrence H. Guffey, Raphael Kübler, and René Obermann

Executive Committee: Timotheus Höttges, Raphael Kübler, Thorsten Langheim, René Obermann, John J. Legere, and James N. Perry, Jr.

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Effective May 1, 2013, non-employee directors of the Company will be compensated according to the Company's Director Compensation Program. Under the program, non-employee directors of the Company receive annual cash compensation as follows:

         Annual Retainer for Board Service                     $ 100,000
         Additional Retainer for Lead Independent Director     $  25,000
         Audit Committee Chair                                 $  50,000
         Compensation Committee Chair                          $  25,000
         Nominating and Corporate Governance Committee Chair   $  10,000

Fees are paid in cash in equal quarterly installments after the end of the quarter in which they are earned. Fees are subject to pro-ration for any person who becomes a non-employee director and/or committee chair at any time of the year other than the date of the Company's annual meeting of stockholders. Non-employee directors will receive an additional $2,000 per meeting for in-person board or committee meetings attended in excess of 10 meetings and additional compensation of $1,000 per meeting for telephonic board or committee meetings attended in excess of 10 meetings.

In addition, immediately after each annual meeting of stockholders, subject to stockholder approval of the Company's 2013 Omnibus Incentive Plan (the "2013 Plan") at the Company's 2013 Annual Meeting of Stockholders, each non-employee director will automatically be granted restricted stock units with a value of $100,000 (based on the closing price of the Company's stock on the NYSE on the grant date, with fractional shares rounded to the nearest whole share). The restricted stock units will vest in full on the one-year anniversary of their . . .



Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On April 30, 2013, in connection with the completion of the Transaction, the Company amended and restated its existing certificate of incorporation in its entirety in the form of the Restated Certificate of Incorporation. The following summary of the Restated Certificate of Incorporation does not purport to be complete and is subject to, and qualified in its entirety by, the Restated Certificate of Incorporation, copy of which is attached hereto as Exhibit 3.1.

The Restated Certificate of Incorporation effects a number of changes to the Company's precedent certificate of incorporation, including the following:

• Company Name. The Restated Certificate of Incorporation changed the Company's name to "T-Mobile US, Inc."

• Par Value and Reverse Stock Split. The Restated Certificate of Incorporation reduced the par value of the Company' Common Stock and preferred stock from $0.0001 to $0.00001. In addition, the Restated Certificate of Incorporation effected the reverse stock split, pursuant to which each share of the Company's Common Stock, par value $0.0001

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per share, issued and outstanding immediately before the Effective Time automatically has been, without any action on the part of the Company or any Company stockholder, reclassified as, and converted into, one-half of a validly issued, fully paid and non-assessable share of the Company's Common Stock, par value $0.00001 per share.

• Declassification. The Restated Certificate of Incorporation provides for the declassification of the Board with all members of the Board being elected annually.

• Board Representation. The Restated Certificate of Incorporation provides Deutsche Telekom with the same board and committee representation rights as are set forth in the Stockholder's Agreement described in Item 1.01.

• Director Removal. The Restated Certificate of Incorporation provides that, subject to certain rights of the holders of preferred stock, if any, any director may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of all of the outstanding shares of the Company's capital stock entitled to elect such director, voting separately as a class, at a duly organized meeting of stockholders or by written consent. However, no director designated by Deutsche Telekom may be removed without the prior written consent of Deutsche Telekom.

• Approval Rights. The Restated Certificate of Incorporation provides Deutsche Telekom with the same approval rights as are set forth in the Stockholder's Agreement described in Item 1.01 with respect to the Company's ability to take certain actions without Deutsche Telekom's prior written consent as long as Deutsche Telekom beneficially owns 30% or more of the outstanding shares of the Company's Common Stock.

• Stockholder Meetings. The Restated Certificate of Incorporation provides that a special meeting of the Company's stockholders (i) may be called by the chairman of the Board or the Company's chief executive officer and
(ii) must be called by the Company's secretary at the request of (a) a majority of the Board or (b) as long as Deutsche Telekom beneficially owns 25% or more of the outstanding shares of Company's Common Stock, the . . .



Item 5.05 Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics.

On May 1, 2013, the Board of Directors adopted a new Code of Business Conduct, which superseded the Code of Ethics in effect prior to the consummation of the Transaction. Also on May 1, 2013, the Company board adopted a new Code of Ethics for Senior Financial Officers pursuant to Section 406 of the Sarbanes-Oxley Act of 2002 (the "Code"). Previously, the Company's code of ethics for senior financial officers was included in the Code of Ethics that was superseded by the Code of Business Conduct adopted by the Board on May 1, 2013. The new Code addresses ethical conduct, full, fair and accurate disclosure in documents the Company files with the SEC and other regulatory agencies, compliance with laws, and the process for reporting suspected violations of the code of ethics.

The Code took effect upon adoption by the Company's Board and did not result in any waiver, explicit or implicit, of any provision of the Company's previous code of ethics for senior financial officers.

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Item 7.01 Regulation FD Disclosure.

On May 1, 2013, the Company issued a press release announcing the completion of the Transaction and the Mergers. The full text of the press release is attached hereto as Exhibit 99.1.

The foregoing information in Item 7.01 of this Current Report on Form 8-K, together with the press release attached hereto as Exhibit 99.1, is being furnished pursuant to Item 7.01 and shall not be deemed "filed" for purposes of
Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to Item 7.01 of this Current Report on Form 8-K.



Item 9.01 Financial Statements and Exhibits

Financial Statement of Businesses Acquired and Pro Forma Financial Information

The audited financial statements of T-Mobile USA as required by Item 9.01(a) of Form 8-K and the unaudited pro forma condensed combined financial statements and notes related thereto, as required by Item 9.01(b) of Form 8-K are not included in this initial report on Form 8-K. The financial statements and pro forma condensed combined financial statements will be filed by an amendment to this report within the time period specified in the instructions to Item 9.01 of Form 8-K.

(d) Exhibits.

Exhibit No.                                  Description

2.1               Business Combination Agreement, by and among Deutsche Telekom AG,
                  T-Mobile USA, Inc., T-Mobile Global Zwischenholding GmbH,
                  T-Mobile Global Holding GmbH and MetroPCS Communications, Inc.,
                  dated October 3, 2012 (incorporated by reference to Exhibit 2.1
                  to the Company's Current report on Form 8-K filed with the SEC on
                  October 3, 2012).

2.2               Amendment No. 1 to the Business Combination Agreement by and
                  among Deutsche Telekom AG, T-Mobile USA, Inc., T-Mobile Global
                  Zwischenholding GmbH, T-Mobile Global Holding GmbH and MetroPCS
                  Communications, Inc., dated April 14, 2013 (incorporated by
                  reference to Exhibit 2.1 to the Company's Current Report on Form
                  8-K, filed with the SEC on April 15, 2013).

3.1               Fourth Amended and Restated Certificate of Incorporation of the
                  Company.

3.2               Fifth Amended and Restated Bylaws of the Company.

4.1               Indenture, dated as of April 28, 2013 among T-Mobile USA, Inc.,
                  the guarantors party thereto, and Deutsche Bank Trust Company
                  Americas, as trustee.

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--------------------------------------------------------------------------------
Exhibit No.                                  Description

4.2               First Supplemental Indenture, dated as of April 28, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.3               Second Supplemental Indenture, dated as of April 28, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.4               Third Supplemental Indenture, dated as of April 28, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.5               Fourth Supplemental Indenture, dated as of April 28, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.6               Fifth Supplemental Indenture, dated as of April 28, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.7               Sixth Supplemental Indenture, dated as of April 28, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.8               Seventh Supplemental Indenture, dated as of April 28, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.9               Eighth Supplemental Indenture, dated as of April 28, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.10              Ninth Supplemental Indenture, dated as of April 28, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.11              Tenth Supplemental Indenture, dated as of April 28, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.12              Eleventh Supplemental Indenture, dated as of May 1, 2013 among
                  T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                  Bank Trust Company Americas, as trustee.

4.13              Noteholder Agreement dated as of April 28, 2013, by and between
                  Deutsche Telekom AG and T-Mobile USA, Inc.

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--------------------------------------------------------------------------------
Exhibit No.                                 Description

 4.14            Credit Agreement, dated as of May 1, 2013, among T-Mobile USA,
                 Inc., as Borrower, Deutsche Telekom AG, as Lender, the other
                 lenders party thereto from time to time, and JPMorgan Chase Bank,
                 N.A., as Administrative Agent.

 4.15            Seventh Supplemental Indenture, dated as of May 1, 2013, among
                 T-Mobile USA, Inc., the guarantors party thereto, and Wells Fargo
                 Bank, N.A., as trustee.

 4.16            Fourth Supplemental Indenture, dated as of May 1, 2013, among
                 T-Mobile USA, Inc., the guarantors party thereto, and Deutsche
                 Bank Trust Company Americas, as trustee.

10.1             Stockholder's Agreement dated as of April 30, 2013 by and between
                 MetroPCS Communications, Inc. and Deutsche Telekom AG.

10.2             License Agreement dated as of April 30, 2013 by and between
                 T-Mobile US, Inc. and Deutsche Telekom AG.

10.3             Employment Agreement of Braxton Carter dated as of January 25,
                 2013.

10.4             Employment Agreement of Thomas C. Keys dated as of January 25,
                 2013.

10.5             Employment Agreement of Dennis T. Currier dated as of April 30,
                 2013.

10.6             Form of Indemnification Agreement.

10.7             Company's Director Compensation Program dated as of May 1, 2013.

16.1             Letter from Deloitte & Touche LLP to the SEC, dated May 1, 2013.

99.1             Press release, dated May 1, 2013.

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