Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements for Certain Officers
Appointment of New CEO
On June 1, 2020, United States Cellular Corporation (U.S. Cellular) issued a press release announcing that Kenneth R. Meyers provided notice on June 1, 2020 that he will retire as President and Chief Executive Officer and as a director of U.S. Cellular, effective July 1, 2020, and that Laurent C. Therivel had been appointed as President and Chief Executive Officer and as a director of U.S. Cellular, effective July 1, 2020. A copy of such press release is attached hereto as Exhibit 99.1.
Kenneth R. Meyers did not resign due to any disagreement with U.S. Cellular. Mr. Meyers has been appointed to serve as Senior Advisor to the Chief Executive Officer from July 1, 2020 through September 4, 2020, at which time he will retire from employment with U.S. Cellular.
Mr. Therivel is 45 years old. During the last five years, Mr. Therivel was the Chief Executive Officer of AT&T Mexico from November 2018 to April 2020, Chief Financial Officer of AT&T Business from 2017 to 2018, Senior Vice President of AT&T Small Business Solutions from 2016 to 2017 and Senior Vice President – Strategy of AT&T Mobility & Business from 2013 to 2016.
Letter Agreement with Mr. Therivel
U.S. Cellular entered into a letter agreement with Mr. Therivel dated June 1, 2020 related to his employment with U.S. Cellular. The following is a brief description of this letter agreement.
A base salary of $755,000 per year through December 31, 2020, with a performance review following year-end 2020.
A target annual bonus opportunity for 2020 equal to 110% of annual base salary (pro-rated for months employed during 2020).
Assuming continued employment, a one-time cash retention payment of $1,300,000 on December 1, 2020, $400,000 on June 30, 2022, $885,000 on December 1, 2023 and $295,000 on December 1, 2024.
An initial restricted stock unit award with a grant date value of $2,250,000, which shall cliff vest six years after the start date of employment.
An initial equity award with a grant date value of $4,500,000, with vesting conditional on U.S. Cellular achieving, during any two calendar-year period commencing no earlier than January 1, 2021 and ending no later than December 31, 2026, both (i) a specified total revenue average growth rate, and (ii) a specified average annual return on capital.
Starting in 2021, annual equity grants with a target grant date value anticipated to be not less than $4,000,000. The 2021 grants are anticipated to have a target grant date value equal to $4,500,000.
This brief description is qualified by reference to the complete terms of the letter agreement which will be filed as an exhibit to U.S. Cellular’s next Quarterly Report on Form 10-Q.