Exhibit (10)(w)
AGREEMENT REGARDING SPECIAL COMPENSATION
AND POST EMPLOYMENT RESTRICTIVE COVENANTS
THIS AGREEMENT made this 9th day of November, 1993, by and between
SPRINT/UNITED MANAGEMENT COMPANY, a Kansas corporation and subsidiary of Sprint
Corporation ("Employer"), and XXXXX X. XXXXXX ("Executive").
W I T N E S S E T H:
WHEREAS, Employer and its parent and affiliates are engaged
in the telecommunications business;
WHEREAS, Executive has expertise, experience and capability
in the business of Employer and the telecommunications business
in general;
WHEREAS, Executive has been, and/or now is serving Employer
as President, Business Market Group;
WHEREAS, Employer desires to enter into this Agreement to provide
severance and other benefits for Executive and obtain Executive's agreements
regarding confidentiality and post- employment restrictive covenants for
Employer; and
WHEREAS, Executive is willing to provide such agreements to Employer.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which consideration is mutually acknowledged by the parties, it
is hereby agreed as follows:
1. Recitals.
The recitals hereinbefore set forth constitute an integral part of this
Agreement, evidencing the intent of the parties in executing this Agreement, and
describing the circumstances surrounding its execution. Said recitals are by
express reference made a part of the covenants hereof, and this Agreement shall
be construed in light thereof.
2. Duties and Responsibilities.
The duties and responsibilities of Executive are and shall continue to
be of an executive nature as shall be required by Employer in the conduct of its
business. Executive's powers and authority shall include all those presently
delegated to him or such other duties and responsibilities as from time to time
may be assigned to him. Executive recognizes, that during his employment
hereunder, he owes an undivided duty of loyalty to Employer, and agrees to
devote his entire business time and attention to the
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performance of said duties and responsibilities and to use his best efforts to
promote and develop the business of Employer.
3. Employment Term.
Executive's employment may be terminated by either party in accordance
with Sections 5, 6, 7, or 8 herein.
4. Compensation and Benefits.
During employment, Executive shall be entitled to receive a base annual
salary, shall be reimbursed for reasonable expenses incurred and accounted for
in accordance with the policies and procedures of Employer, and shall be
entitled to vacation pay and other benefits applicable to employees generally,
each as may from time to time be established, amended or terminated. In
addition, upon execution of this Agreement, Executive shall be awarded five
thousand (5,000) shares of restricted stock as set forth in a restricted stock
agreement of even-date herewith, attached hereto and incorporated herein
("Restricted Stock Agreement"), shall be entitled to the Special Compensation
set forth in Section 6 hereof in accordance with the terms of this Agreement,
and shall be entitled, subject to approval of the Organization and Compensation
Committee, to participation in the Key Management Benefit Plan in accordance
with the terms of said plan.
5. Termination by Employer: Special Compensation.
At any time, Employer may terminate Executive's employment for any
reason. If Executive's termination is other than pursuant to Section 6,
Executive shall, subject to the other provisions of this Section 5, be entitled
to the following Special Compensation (as that term is defined in this Section
5) in lieu of any benefits available under any and all Employer separation plans
or policies. If Executive's termination is pursuant to Sections 5, 6 or 7,
Executive's obligations under Sections 11, 12, 13, and 14 hereof shall continue.
For purposes of this Agreement, "Special Compensation" shall entitle
Executive:
(a) to continue to receive for a period of eighteen (18) months
from the date of termination (the "Severance Period") biweekly
compensation at the rate equal to the biweekly amount of his base annual
salary in effect at the date of termination of employment;
(b) to receive a bonus, based on actual performance results, up
to the target amount, under the Management Incentive Plan ("MIP")
throughout the Severance Period provided that the amount, if any,
payable under such Plan for the award period including the last day of
the Severance Period shall be pro
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rated based upon the number of months of the Severance Period that fall
within the award period and the total number of months in such award
period;
(c) to receive an award under the Long Term Incentive Plan, pro
rated based on the Executive's last day worked, exclusive of any
Severance Period, determined in accordance with the terms of said Plan;
(d) acceleration of vesting of restricted stock in accordance
with the relevant provisions of the Restricted Stock Agreement;
(e) to continue to receive throughout the Severance Period any
executive medical, dental, life, and qualified or nonqualified
retirement benefits which the Executive was receiving or was entitled to
receive at the time of termination, except that long term disability and
short term disability benefits cease on the last day worked;
(f) outplacement counseling by a firm selected by Employer to
continue until Executive becomes employed; and
(g) to continue to receive throughout the Severance Period all
applicable executive perquisites (including automobile allowance, long
distance services and all miscellaneous services) except country club
membership dues and accrual of vacation.
Employer shall pay or cause to be paid the amounts payable under
paragraph (a) above in equal installments, bi-weekly in arrears, and the amount
payable under paragraphs (b) and (c) in accordance with the terms of the Plans.
All payments pursuant to this Section shall be subject to applicable federal and
state income and other withholding taxes.
In addition to the Special Compensation described above, Executive shall
also be entitled to any vacation pay for vacation accrued by Executive in the
calendar year of termination but not taken at the time of termination.
In the event Executive becomes employed full time during the Severance
Period, Executive's entitlement to continuation of the benefits described in
paragraph (e) shall immediately cease, however, Executive shall retain any
rights to continue medical insurance coverage under the COBRA continuation
provisions of the group medical insurance plan by paying the applicable premium
therefor.
The payments and benefits provided for in this Section shall be in
addition to all other sums then payable and owing to Executive hereunder and,
except as expressly provided herein, shall not be subject to reduction for any
amounts received by Executive for
3
employment or services provided after termination of employment hereunder, and
shall be in full settlement and satisfaction of all of Executive's claims and
demands.
In all events, Executive's right to receive severance and/or other
benefits pursuant to this Section shall cease immediately in the event Executive
is re-employed by Employer or an affiliate or Executive breaches his
Confidential Information Covenant (as defined in Section 11 hereof), or breaches
Sections 12, 13 or 14 hereof. In all cases, Employer's rights under Section 15
shall continue.
6. Voluntary Resignation by Executive; Termination
for Cause: Total Disability.
Upon termination of Executive's employment by either Voluntary
Resignation, Termination for Cause (as those terms are defined in this Section
6), or Total Disability, as that term is defined in the Long Term Disability
Plan, Executive shall have no right to compensation, severance pay or other
benefits described herein but Executive's obligations under Sections 11, 12, 13
and 14 hereof shall continue.
(a) Voluntary Resignation by Executive. At any time, Executive
has the right, by written notice to Employer, to terminate his services
hereunder ("Voluntary Resignation"), effective as of thirty (30) days
after such notice.
(b) Termination for Cause by Employer. At any time, Employer has
the right to terminate Executive's employment. Termination upon the
occurrence of any of the following shall be deemed termination for cause
("Termination for Cause"):
(i) Conduct by the Executive which reflects adversely on
the Executive's honesty, trustworthiness or fitness as an
Executive, or
(ii) Executive's willful engagement in conduct which is
demonstrably and materially injurious to the Employer.
For Termination for Cause, written notice of the termination of
Executive's employment by Employer shall be served upon Executive and shall be
effective as of the date of such service. Such notice given by Employer shall
specify the act or acts of Executive underlying such termination.
(c) Total Disability. Upon the total disability of the
Executive, as that term is defined in the Long Term Disability Plan,
Executive shall have no right to compensation or severance pay described
herein but shall be entitled to long term disability and other such
benefits afforded under the applicable policies and plans.
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7. Resignation Following Constructive Discharge.
If at any time, except in connection with a termination pursuant to
Section 5, 6, or 8 Executive is Constructively Discharged (as that term is
defined in this Section 7) then Executive shall have the right, by written
notice to Employer within sixty (60) days of such Constructive Discharge, to
terminate his services hereunder, effective as of thirty (30) days after such
notice. Executive shall in such event be entitled to the compensation and
benefits as if such employment were terminated pursuant to Section 5 of this
Agreement.
For purposes of this Agreement, the Executive shall be "Constructively
Discharged" upon the occurrence of any one of the following events:
(a) Executive is removed from his position with Employer other
than as a result of Executive's appointment to positions of equal or
superior scope and responsibility; or
(b) Executive's targeted total compensation is reduced by more
than 10% (other than across-the-board reductions similarly affecting all
officers of the Long Distance Division of Employer).
8. Effect of Change in Control.
In the event that within one year of a Change in Control (as that term
is defined in this Section 8) Executive's employment is terminated:
(a) by the Employer other than pursuant to Section 6
hereof, or
(b) by Executive pursuant to Section 7 hereof,
then Executive shall be entitled to the Special Compensation described in
Section 5 and shall be bound by Section 11, but shall not have any continuing
obligations under Sections 12, 13, and 14, except as otherwise required by
common law or statute.
For purposes of this Agreement, a "Change in Control" shall be deemed to
have occurred if:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")) other
than a trustee or other fiduciary holding securities under an employee
benefit plan of Sprint Corporation ("Sprint") or any of its affiliates,
and other than Sprint or a corporation owned, directly or indirectly, by
the stockholders of Sprint in substantially the same proportions as
their ownership of stock of Sprint, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act),
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directly or indirectly, of securities of Sprint representing 20% or more
of the combined voting power of Sprint's then outstanding securities, or
(ii) during any period of two consecutive years (not including
any period prior to the date of this Agreement), incumbent members cease
for any reason to constitute a majority of the members of the Board of
Directors of Sprint.
A member of the Board of Directors of Sprint shall be an "incumbent member" if
such individual is as of the date of this Agreement or at the beginning of the
applicable two consecutive year period a member of the Board of Directors of
Sprint, and any new director after the date of this Agreement (other than a
director designated by person who has entered into an agreement to effect a
transaction described in subparagraph (i) above) whose election to the Board or
nomination for election by the stockholders of Sprint was approved by a vote of
at least two-thirds (2/3) of the directors still in office who either were
directors as of the date hereof or as of the first day of the applicable two
consecutive year period or whose election or nomination for election was
previously so approved.
9. Dispute Resolution.
All disputes arising under this Agreement, other than those disputes
relating to Executive's alleged violations of Sections 11 through 14 herein,
shall be submitted to arbitration by the American Arbitration Association of
Kansas City, Missouri. Costs of arbitration shall be borne equally by the
parties. The decision of the arbitrators shall be final and there shall be no
appeal from any award rendered. Any award rendered may be entered as a judgment
in any court of competent jurisdiction. In any judicial enforcement proceeding,
the losing party shall reimburse the prevailing party for its reasonable costs
and attorneys' fees for enforcing its rights under this Agreement, in addition
to any damages or other relief granted. This Section 9 does not apply to any
action by Employer to enforce Sections 11 through 14 of this Agreement and does
not in any way restrict Employer's rights under Section 15 herein.
10. Enforcement.
In the event Employer shall fail to pay any amounts due to Executive
under this Agreement as they come due, Employer agrees to pay interest on such
amounts at a rate of prime plus two percent (2%) per annum. Employer agrees that
Executive and any successor shall be entitled to recover all costs of
successfully enforcing any provision of this Agreement, including reasonable
attorney fees and costs of litigation.
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11. Confidential Information.
Executive acknowledges that during the course of his employment he has
learned or will learn or develop Confidential Information (as that term is
defined in this Section 11). Executive further acknowledges that unauthorized
disclosure or use of such Confidential Information, other than in discharge of
Executive's duties, will cause Employer irreparable harm.
For purposes of this Section, Confidential Information means trade
secrets (such as technical and non-technical data, a formula, pattern,
compilation, program, device, method, technique, drawing, process) and other
proprietary information concerning the products, processes or services of
Employer or its parent, and/or affiliates, including but not limited to:
computer programs; unpatented inventions, discoveries or improvements;
marketing, manufacturing, or organizational research and development; business
plans; sales forecasts; personnel information, including the identity of other
employees of Employer, their responsibilities, competence, abilities, and
compensation; pricing and financial information; current and prospective
customer lists and information on customers or their employees; information
concerning planned or pending acquisitions or divestitures; and information
concerning purchases of major equipment or property, which information: (a) has
not been made generally available to the public; and (b) is useful or of value
to the current or anticipated business, or research or development activities of
Employer or of any customer or supplier of Employer, or (c) has been identified
to Employee as confidential by Employer, either orally or in writing.
Except in the course of his employment and in the pursuit of the
business of Employer or any of its subsidiaries or affiliates, Executive shall
not, during the course of his employment, or for a period of eighteen (18)
months following termination of his employment for any reason, directly or
indirectly, disclose, publish, communicate or use on his behalf or another's
behalf, any proprietary information or data of Employer or any of its
subsidiaries or affiliates.
Executive acknowledges that Employer operates and competes nationally,
and that Employer will be harmed by unauthorized disclosure or use of
Confidential Information regardless of where such disclosure or use occurs, and
that therefore this confidentiality agreement is not limited to any single state
or other jurisdiction.
12. Non-Competition.
Executive acknowledges that use or disclosure of Confidential
Information described in Section 11 is likely if Executive were
to perform telecommunications functions relating to long distance
services on behalf of a competitor of Employer. Therefore,
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Executive shall not, for eighteen (18) months following termination of
employment for any reason (the "Non-Compete Period"), accept any position,
including but not limited to a position in the long distance operations of AT&T
or MCI, where the performance of duties in that position will involve managing,
controlling, participating in, investing in, acting as consultant or advisor to,
rendering services for, or otherwise assisting any person or entity in the long
distance business and performing functions relating to long distance services,
including all forms of interexchange, interstate, intrastate, interlata and
international communications.
Executive acknowledges that Employer operates and competes nationally,
and that therefore this non-competition agreement is not limited to any single
state or other jurisdiction.
This section shall not prevent Executive from using general skills and
experience developed during employment with Employer or other employers; or from
accepting a position of employment with another company, firm, or other
organization which competes with Employer, if its business is diversified and
Executive is employed in a part of the business that is not related to long
distance Services and provided that such position does not require or permit the
disclosure or use of Confidential Information.
13. Inducement of Other Employees.
For a eighteen (18) month period following termination of employment,
Executive will not directly or indirectly solicit, induce or encourage any
employee or agent of Employer to terminate his relationship with Employer.
14. Return of Employer's Property.
All notes, reports, sketches, plans, published memoranda or other
documents created, developed, generated or held by Executive during employment,
concerning or related to Employer's business, and whether containing or relating
to Confidential Information or not, are the property of Employer and will be
promptly delivered to Employer upon termination of Executive's employment for
any reason whatsoever. During the course of employment, Executive shall not
remove any of the above property containing Confidential Information, or
reproductions or copies thereof, or any apparatus from Employer's premises
without authorization.
15. Remedies.
Executive acknowledges that the restraints and agreements herein
provided are fair and reasonable, that enforcement of the provisions of Sections
11, 12, 13 and 14 will not cause him undue hardship and that said provisions are
reasonably necessary and commensurate with the need to protect Employer and its
legitimate and proprietary business interests and property from irreparable
harm.
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Executive acknowledges that failure to comply with the terms of this
Agreement will cause irreparable damage to Employer. Therefore, Executive agrees
that, in addition to any other remedies at law or in equity available to
Employer for Executive's breach or threatened breach of this Agreement, Employer
is entitled to specific performance or injunctive relief, without bond, against
Executive to prevent such damage or breach, and the existence of any claim or
cause of action Executive may have against Employer will not constitute a
defense thereto. Executive further agrees to pay reasonable attorney fees and
costs of litigation incurred by Employer in any proceeding relating to the
enforcement of the Agreement or to any alleged breach thereof in which Employer
shall prevail in whole or in part.
In the event of a breach or a violation by Executive of any of the
covenants and provisions of this Agreement, the running of the Non-Compete
Period (but not of Executive's obligation thereunder), shall be tolled during
the period of the continuance of any actual breach or violation.
16. Confidentiality of Agreement.
As a specific condition to Executive's right to Special Compensation or
other benefits described herein, Executive agrees that he will not disclose or
discuss: the existence of this Agreement; the Special Compensation provided
hereunder; or any other terms of the Agreement except: (1) to members of his
immediate family; (2) to his financial advisor or attorney but then only to the
extent necessary for them to assist him; or (3) as required by law or to enforce
legal rights.
17. Entire Understanding.
This Agreement constitutes the entire understanding between the parties
relating to Executive's employment hereunder and supersedes and cancels all
prior written and oral understandings and agreements with respect to such
matters, except for the terms and provisions of the Key Management Benefit Plan
and any other employee benefit or other compensation plans (or any agreements or
awards thereunder) referred to in or contemplated by this Agreement and except
for the SPRINT UNITED EMPLOYEE AGREEMENT REGARDING PROPERTY RIGHTS AND BUSINESS
PRACTICES which the Executive has signed and by which Executive continues to be
bound.
18. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of
Executive's executors, administrators, legal representatives, heirs and legatees
and the successors and assigns of Employer.
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19. Partial Invalidity.
The various provisions of this Agreement are intended to be severable
and to constitute independent and distinct binding obligations. Should any
provision of this Agreement be determined to be void and unenforceable, in whole
or in part, it shall not be deemed to affect or impair the validity of any other
provision or part thereof, and such provision or part thereof shall be deemed
modified to the extent required to permit enforcement. Without limiting the
generality of the foregoing, if the scope of any provision contained in this
Agreement is too broad to permit enforcement to its full extent, but may be made
enforceable by limitations thereon, such provision shall be enforced to the
maximum extent permitted by law, and Executive hereby agrees that such scope may
be judicially modified accordingly.
20. Strict Construction.
The language used in this Agreement will be deemed to be the language
chosen by Employer and Executive to express their mutual intent and no rule of
strict construction shall be applied against any person.
21. Waiver.
The waiver of any party hereto of a breach of any provision of this
Agreement by any other party shall not operate or be construed as a waiver of
any subsequent breach.
22. Notices.
Any notice or other communication required or permitted to be given
hereunder shall be determined to have been duly given to any party (a) upon
delivery to the address of such party specified below if delivered personally or
by courier; (b) upon dispatch if transmitted by telecopy or other means of
facsimile, provided a copy thereof is also sent by regular mail or courier; or
(c) within forty-eight (48) hours after deposit thereof in the U.S. mail,
postage prepaid, for delivery as certified mail, return receipt requested,
addressed, in any case to the party at the following address(es) or telecopy
numbers:
If to Executive:
Xxxxx X. Xxxxxx
Sprint Communications Company, L.P.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
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If to Employer and/or Company:
Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Secretary
or to such other address(es) or telecopy number(s) as any party may designate by
Written Notice in the aforesaid manner.
23. Governing Law.
This Agreement shall be governed by, and interpreted, construed and
enforced in accordance with, the laws of the State of Kansas.
24. Gender and Number.
Wherever from the context it appears appropriate, each term stated in
either the singular of plural shall include the singular and the plural, and the
pronouns stated in either the masculine, the feminine or the neuter gender shall
include the masculine, feminine or neuter.
25. Headings.
The headings of the Sections of this Agreement are for reference
purposes only and do not define or limit, and shall not be used to interpret or
construe the contents of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed at Westwood, Kansas, on the date above set forth.
XXXXX X. XXXXXX SPRINT/UNITED MANAGEMENT COMPANY
/s/ X. X. Xxxxxx By: /s/ X. Xxxxxx
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AMENDMENT
The Agreement Regarding Special Compensation and Post Employment
Restrictive Covenants (the "Special Agreement") between Sprint/United Management
Company and Xxxxx X. Xxxxxx (the "Executive") is hereby amended as follows,
effective January 21, 1994:
1. The first sentence of Section 8 shall be changed by adding the word
"or" at the end of item (b) and by adding the following item (c):
(c) by Executive if Executive is required to be based anywhere
other than the Kansas City metropolitan area or the Dallas,
Texas metropolitan area except for required travel on business
to an extent substantially consistent with Executive's business
travel obligations immediately prior to the Change in Control;
2. Section 12 shall be changed by:
(a) deleting from the second sentence of the first paragraph the
words "the performance of duties in that position will involve",
and substituting in lieu thereof the words "Executive dedicates
his time and efforts principally to"; and
(b) changing the last sentence of the Section to read:
This section shall not prevent Executive from using general
skills and experience developed during employment with Employer
or other employers; or from accepting a position of employment
with another company, firm, or other organization which competes
with Employer, if its business is diversified and Executive is
employed in a part of the business that is not related
principally to long distance services and provided that such
position does not require or permit the disclosure or use of
Confidential Information.
Except as amended herein, the terms of the Special Agreement shall
remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed at Westwood, Kansas, as of the date above set forth.
EXECUTIVE SPRINT/UNITED MANAGEMENT
COMPANY
/s/ X. X. Xxxxxx By: /s/ X. Xxxxxx
Title: SVP - HR
Exhibit (10)(w)
AGREEMENT REGARDING SPECIAL COMPENSATION
AND POST EMPLOYMENT RESTRICTIVE COVENANTS
THIS AGREEMENT made this 9th day of November, 1993, by and between
SPRINT/UNITED MANAGEMENT COMPANY, a Kansas corporation and subsidiary of Sprint
Corporation ("Employer"), and XXXXX X. XXXXXX ("Executive").
W I T N E S S E T H:
WHEREAS, Employer and its parent and affiliates are engaged
in the telecommunications business;
WHEREAS, Executive has expertise, experience and capability
in the business of Employer and the telecommunications business
in general;
WHEREAS, Executive has been, and/or now is serving Employer
as President, Business Services Group;
WHEREAS, Employer desires to enter into this Agreement to provide
severance and other benefits for Executive and obtain Executive's agreements
regarding confidentiality and post- employment restrictive covenants for
Employer; and
WHEREAS, Executive is willing to provide such agreements to Employer.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which consideration is mutually acknowledged by the parties, it
is hereby agreed as follows:
1. Recitals.
The recitals hereinbefore set forth constitute an integral part of this
Agreement, evidencing the intent of the parties in executing this Agreement, and
describing the circumstances surrounding its execution. Said recitals are by
express reference made a part of the covenants hereof, and this Agreement shall
be construed in light thereof.
2. Duties and Responsibilities.
The duties and responsibilities of Executive are and shall continue to
be of an executive nature as shall be required by Employer in the conduct of its
business. Executive's powers and authority shall include all those presently
delegated to him or such other duties and responsibilities as from time to time
may be assigned to him. Executive recognizes, that during his employment
hereunder, he owes an undivided duty of loyalty to Employer, and agrees to
devote his entire business time and attention to the
1
performance of said duties and responsibilities and to use his best efforts to
promote and develop the business of Employer.
3. Employment Term.
Executive's employment may be terminated by either party in accordance
with Sections 5, 6, 7, or 8 herein.
4. Compensation and Benefits.
During employment, Executive shall be entitled to receive a base annual
salary, shall be reimbursed for reasonable expenses incurred and accounted for
in accordance with the policies and procedures of Employer, and shall be
entitled to vacation pay and other benefits applicable to employees generally,
each as may from time to time be established, amended or terminated. In
addition, upon execution of this Agreement, Executive shall be awarded five
thousand (5,000) shares of restricted stock as set forth in a restricted stock
agreement of even-date herewith, attached hereto and incorporated herein
("Restricted Stock Agreement"), shall be entitled to the Special Compensation
set forth in Section 6 hereof in accordance with the terms of this Agreement,
and shall be entitled, subject to approval of the Organization and Compensation
Committee, to participation in the Key Management Benefit Plan in accordance
with the terms of said plan.
5. Termination by Employer: Special Compensation.
At any time, Employer may terminate Executive's employment for any
reason. If Executive's termination is other than pursuant to Section 6,
Executive shall, subject to the other provisions of this Section 5, be entitled
to the following Special Compensation (as that term is defined in this Section
5) in lieu of any benefits available under any and all Employer separation plans
or policies. If Executive's termination is pursuant to Sections 5, 6 or 7,
Executive's obligations under Sections 11, 12, 13, and 14 hereof shall continue.
For purposes of this Agreement, "Special Compensation" shall entitle
Executive:
(a) to continue to receive for a period of eighteen (18) months
from the date of termination (the "Severance Period") biweekly
compensation at the rate equal to the biweekly amount of his base annual
salary in effect at the date of termination of employment;
(b) to receive a bonus, based on actual performance results, up
to the target amount, under the Management Incentive Plan ("MIP")
throughout the Severance Period provided that the amount, if any,
payable under such Plan for the award period including the last day of
the Severance Period shall be pro
2
rated based upon the number of months of the Severance Period that fall
within the award period and the total number of months in such award
period;
(c) to receive an award under the Long Term Incentive Plan, pro
rated based on the Executive's last day worked, exclusive of any
Severance Period, determined in accordance with the terms of said Plan;
(d) acceleration of vesting of restricted stock in accordance
with the relevant provisions of the Restricted Stock Agreement;
(e) to continue to receive throughout the Severance Period any
executive medical, dental, life, and qualified or nonqualified
retirement benefits which the Executive was receiving or was entitled to
receive at the time of termination, except that long term disability and
short term disability benefits cease on the last day worked;
(f) outplacement counseling by a firm selected by Employer to
continue until Executive becomes employed; and
(g) to continue to receive throughout the Severance Period all
applicable executive perquisites (including automobile allowance, long
distance services and all miscellaneous services) except country club
membership dues and accrual of vacation.
Employer shall pay or cause to be paid the amounts payable under
paragraph (a) above in equal installments, bi-weekly in arrears, and the amount
payable under paragraphs (b) and (c) in accordance with the terms of the Plans.
All payments pursuant to this Section shall be subject to applicable federal and
state income and other withholding taxes.
In addition to the Special Compensation described above, Executive shall
also be entitled to any vacation pay for vacation accrued by Executive in the
calendar year of termination but not taken at the time of termination.
In the event Executive becomes employed full time during the Severance
Period, Executive's entitlement to continuation of the benefits described in
paragraph (e) shall immediately cease, however, Executive shall retain any
rights to continue medical insurance coverage under the COBRA continuation
provisions of the group medical insurance plan by paying the applicable premium
therefor.
The payments and benefits provided for in this Section shall be in
addition to all other sums then payable and owing to Executive hereunder and,
except as expressly provided herein, shall not be subject to reduction for any
amounts received by Executive for
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employment or services provided after termination of employment hereunder, and
shall be in full settlement and satisfaction of all of Executive's claims and
demands.
In all events, Executive's right to receive severance and/or other
benefits pursuant to this Section shall cease immediately in the event Executive
is re-employed by Employer or an affiliate or Executive breaches his
Confidential Information Covenant (as defined in Section 11 hereof), or breaches
Sections 12, 13 or 14 hereof. In all cases, Employer's rights under Section 15
shall continue.
6. Voluntary Resignation by Executive; Termination
for Cause: Total Disability.
Upon termination of Executive's employment by either Voluntary
Resignation, Termination for Cause (as those terms are defined in this Section
6), or Total Disability, as that term is defined in the Long Term Disability
Plan, Executive shall have no right to compensation, severance pay or other
benefits described herein but Executive's obligations under Sections 11, 12, 13
and 14 hereof shall continue.
(a) Voluntary Resignation by Executive. At any time, Executive
has the right, by written notice to Employer, to terminate his services
hereunder ("Voluntary Resignation"), effective as of thirty (30) days
after such notice.
(b) Termination for Cause by Employer. At any time, Employer has
the right to terminate Executive's employment. Termination upon the
occurrence of any of the following shall be deemed termination for cause
("Termination for Cause"):
(i) Conduct by the Executive which reflects adversely on
the Executive's honesty, trustworthiness or fitness as an
Executive, or
(ii) Executive's willful engagement in conduct which is
demonstrably and materially injurious to the Employer.
For Termination for Cause, written notice of the termination of
Executive's employment by Employer shall be served upon Executive and
shall be effective as of the date of such service. Such notice given by
Employer shall specify the act or acts of Executive underlying such
termination.
(c) Total Disability. Upon the total disability of the
Executive, as that term is defined in the Long Term Disability Plan,
Executive shall have no right to compensation or severance pay described
herein but shall be entitled to long term disability and other such
benefits afforded under the applicable policies and plans.
4
7. Resignation Following Constructive Discharge.
If at any time, except in connection with a termination pursuant to
Section 5, 6, or 8 Executive is Constructively Discharged (as that term is
defined in this Section 7) then Executive shall have the right, by written
notice to Employer within sixty (60) days of such Constructive Discharge, to
terminate his services hereunder, effective as of thirty (30) days after such
notice. Executive shall in such event be entitled to the compensation and
benefits as if such employment were terminated pursuant to Section 5 of this
Agreement.
For purposes of this Agreement, the Executive shall be "Constructively
Discharged" upon the occurrence of any one of the following events:
(a) Executive is removed from his position with Employer other
than as a result of Executive's appointment to positions of equal or
superior scope and responsibility; or
(b) Executive's targeted total compensation is reduced by more
than 10% (other than across-the-board reductions similarly affecting all
officers of the Long Distance Division of Employer).
8. Effect of Change in Control.
In the event that within one year of a Change in Control (as that term
is defined in this Section 8) Executive's employment is terminated:
(a) by the Employer other than pursuant to Section 6
hereof, or
(b) by Executive pursuant to Section 7 hereof,
then Executive shall be entitled to the Special Compensation described in
Section 5 and shall be bound by Section 11, but shall not have any continuing
obligations under Sections 12, 13, and 14, except as otherwise required by
common law or statute.
For purposes of this Agreement, a "Change in Control" shall be deemed to
have occurred if:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")) other
than a trustee or other fiduciary holding securities under an employee
benefit plan of Sprint Corporation ("Sprint") or any of its affiliates,
and other than Sprint or a corporation owned, directly or indirectly, by
the stockholders of Sprint in substantially the same proportions as
their ownership of stock of Sprint, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act),
5
directly or indirectly, of securities of Sprint representing 20% or more
of the combined voting power of Sprint's then outstanding securities, or
(ii) during any period of two consecutive years (not including
any period prior to the date of this Agreement), incumbent members cease
for any reason to constitute a majority of the members of the Board of
Directors of Sprint.
A member of the Board of Directors of Sprint shall be an "incumbent member" if
such individual is as of the date of this Agreement or at the beginning of the
applicable two consecutive year period a member of the Board of Directors of
Sprint, and any new director after the date of this Agreement (other than a
director designated by person who has entered into an agreement to effect a
transaction described in subparagraph (i) above) whose election to the Board or
nomination for election by the stockholders of Sprint was approved by a vote of
at least two-thirds (2/3) of the directors still in office who either were
directors as of the date hereof or as of the first day of the applicable two
consecutive year period or whose election or nomination for election was
previously so approved.
9. Dispute Resolution.
All disputes arising under this Agreement, other than those disputes
relating to Executive's alleged violations of Sections 11 through 14 herein,
shall be submitted to arbitration by the American Arbitration Association of
Kansas City, Missouri. Costs of arbitration shall be borne equally by the
parties. The decision of the arbitrators shall be final and there shall be no
appeal from any award rendered. Any award rendered may be entered as a judgment
in any court of competent jurisdiction. In any judicial enforcement proceeding,
the losing party shall reimburse the prevailing party for its reasonable costs
and attorneys' fees for enforcing its rights under this Agreement, in addition
to any damages or other relief granted. This Section 9 does not apply to any
action by Employer to enforce Sections 11 through 14 of this Agreement and does
not in any way restrict Employer's rights under Section 15 herein.
10. Enforcement.
In the event Employer shall fail to pay any amounts due to Executive
under this Agreement as they come due, Employer agrees to pay interest on such
amounts at a rate of prime plus two percent (2%) per annum. Employer agrees that
Executive and any successor shall be entitled to recover all costs of
successfully enforcing any provision of this Agreement, including reasonable
attorney fees and costs of litigation.
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11. Confidential Information.
Executive acknowledges that during the course of his employment he has
learned or will learn or develop Confidential Information (as that term is
defined in this Section 11). Executive further acknowledges that unauthorized
disclosure or use of such Confidential Information, other than in discharge of
Executive's duties, will cause Employer irreparable harm.
For purposes of this Section, Confidential Information means trade
secrets (such as technical and non-technical data, a formula, pattern,
compilation, program, device, method, technique, drawing, process) and other
proprietary information concerning the products, processes or services of
Employer or its parent, and/or affiliates, including but not limited to:
computer programs; unpatented inventions, discoveries or improvements;
marketing, manufacturing, or organizational research and development; business
plans; sales forecasts; personnel information, including the identity of other
employees of Employer, their responsibilities, competence, abilities, and
compensation; pricing and financial information; current and prospective
customer lists and information on customers or their employees; information
concerning planned or pending acquisitions or divestitures; and information
concerning purchases of major equipment or property, which information: (a) has
not been made generally available to the public; and (b) is useful or of value
to the current or anticipated business, or research or development activities of
Employer or of any customer or supplier of Employer, or (c) has been identified
to Employee as confidential by Employer, either orally or in writing.
Except in the course of his employment and in the pursuit of the
business of Employer or any of its subsidiaries or affiliates, Executive shall
not, during the course of his employment, or for a period of eighteen (18)
months following termination of his employment for any reason, directly or
indirectly, disclose, publish, communicate or use on his behalf or another's
behalf, any proprietary information or data of Employer or any of its
subsidiaries or affiliates.
Executive acknowledges that Employer operates and competes nationally,
and that Employer will be harmed by unauthorized disclosure or use of
Confidential Information regardless of where such disclosure or use occurs, and
that therefore this confidentiality agreement is not limited to any single state
or other jurisdiction.
12. Non-Competition.
Executive acknowledges that use or disclosure of Confidential
Information described in Section 11 is likely if Executive were
to perform telecommunications functions relating to long distance
services on behalf of a competitor of Employer. Therefore,
7
Executive shall not, for eighteen (18) months following termination of
employment for any reason (the "Non-Compete Period"), accept any position,
including but not limited to a position in the long distance operations of AT&T
or MCI, where the performance of duties in that position will involve managing,
controlling, participating in, investing in, acting as consultant or advisor to,
rendering services for, or otherwise assisting any person or entity in the long
distance business and performing functions relating to long distance services,
including all forms of interexchange, interstate, intrastate, interlata and
international communications.
Executive acknowledges that Employer operates and competes nationally,
and that therefore this non-competition agreement is not limited to any single
state or other jurisdiction.
This section shall not prevent Executive from using general skills and
experience developed during employment with Employer or other employers; or from
accepting a position of employment with another company, firm, or other
organization which competes with Employer, if its business is diversified and
Executive is employed in a part of the business that is not related to long
distance Services and provided that such position does not require or permit the
disclosure or use of Confidential Information.
13. Inducement of Other Employees.
For a eighteen (18) month period following termination of employment,
Executive will not directly or indirectly solicit, induce or encourage any
employee or agent of Employer to terminate his relationship with Employer.
14. Return of Employer's Property.
All notes, reports, sketches, plans, published memoranda or other
documents created, developed, generated or held by Executive during employment,
concerning or related to Employer's business, and whether containing or relating
to Confidential Information or not, are the property of Employer and will be
promptly delivered to Employer upon termination of Executive's employment for
any reason whatsoever. During the course of employment, Executive shall not
remove any of the above property containing Confidential Information, or
reproductions or copies thereof, or any apparatus from Employer's premises
without authorization.
15. Remedies.
Executive acknowledges that the restraints and agreements herein
provided are fair and reasonable, that enforcement of the provisions of Sections
11, 12, 13 and 14 will not cause him undue hardship and that said provisions are
reasonably necessary and commensurate with the need to protect Employer and its
legitimate and proprietary business interests and property from irreparable
harm.
8
Executive acknowledges that failure to comply with the terms of this
Agreement will cause irreparable damage to Employer. Therefore, Executive agrees
that, in addition to any other remedies at law or in equity available to
Employer for Executive's breach or threatened breach of this Agreement, Employer
is entitled to specific performance or injunctive relief, without bond, against
Executive to prevent such damage or breach, and the existence of any claim or
cause of action Executive may have against Employer will not constitute a
defense thereto. Executive further agrees to pay reasonable attorney fees and
costs of litigation incurred by Employer in any proceeding relating to the
enforcement of the Agreement or to any alleged breach thereof in which Employer
shall prevail in whole or in part.
In the event of a breach or a violation by Executive of any of the
covenants and provisions of this Agreement, the running of the Non-Compete
Period (but not of Executive's obligation thereunder), shall be tolled during
the period of the continuance of any actual breach or violation.
16. Confidentiality of Agreement.
As a specific condition to Executive's right to Special Compensation or
other benefits described herein, Executive agrees that he will not disclose or
discuss: the existence of this Agreement; the Special Compensation provided
hereunder; or any other terms of the Agreement except: (1) to members of his
immediate family; (2) to his financial advisor or attorney but then only to the
extent necessary for them to assist him; or (3) as required by law or to enforce
legal rights.
17. Entire Understanding.
This Agreement constitutes the entire understanding between the parties
relating to Executive's employment hereunder and supersedes and cancels all
prior written and oral understandings and agreements with respect to such
matters, except for the terms and provisions of the Key Management Benefit Plan
and any other employee benefit or other compensation plans (or any agreements or
awards thereunder) referred to in or contemplated by this Agreement and except
for the SPRINT UNITED EMPLOYEE AGREEMENT REGARDING PROPERTY RIGHTS AND BUSINESS
PRACTICES which the Executive has signed and by which Executive continues to be
bound.
18. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of
Executive's executors, administrators, legal representatives, heirs and legatees
and the successors and assigns of Employer.
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19. Partial Invalidity.
The various provisions of this Agreement are intended to be severable
and to constitute independent and distinct binding obligations. Should any
provision of this Agreement be determined to be void and unenforceable, in whole
or in part, it shall not be deemed to affect or impair the validity of any other
provision or part thereof, and such provision or part thereof shall be deemed
modified to the extent required to permit enforcement. Without limiting the
generality of the foregoing, if the scope of any provision contained in this
Agreement is too broad to permit enforcement to its full extent, but may be made
enforceable by limitations thereon, such provision shall be enforced to the
maximum extent permitted by law, and Executive hereby agrees that such scope may
be judicially modified accordingly.
20. Strict Construction.
The language used in this Agreement will be deemed to be the language
chosen by Employer and Executive to express their mutual intent and no rule of
strict construction shall be applied against any person.
21. Waiver.
The waiver of any party hereto of a breach of any provision of this
Agreement by any other party shall not operate or be construed as a waiver of
any subsequent breach.
22. Notices.
Any notice or other communication required or permitted to be given
hereunder shall be determined to have been duly given to any party (a) upon
delivery to the address of such party specified below if delivered personally or
by courier; (b) upon dispatch if transmitted by telecopy or other means of
facsimile, provided a copy thereof is also sent by regular mail or courier; or
(c) within forty-eight (48) hours after deposit thereof in the U.S. mail,
postage prepaid, for delivery as certified mail, return receipt requested,
addressed, in any case to the party at the following address(es) or telecopy
numbers:
If to Executive:
Xxxxx X. Xxxxxx
Sprint Communications Company, L.P.
0000 Xxxx Xxxxxxx
Xxxxxx Xxxx, XX 00000
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If to Employer and/or Company:
Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Secretary
or to such other address(es) or telecopy number(s) as any party may designate by
Written Notice in the aforesaid manner.
23. Governing Law.
This Agreement shall be governed by, and interpreted, construed and
enforced in accordance with, the laws of the State of Kansas.
24. Gender and Number.
Wherever from the context it appears appropriate, each term stated in
either the singular of plural shall include the singular and the plural, and the
pronouns stated in either the masculine, the feminine or the neuter gender shall
include the masculine, feminine or neuter.
25. Headings.
The headings of the Sections of this Agreement are for reference
purposes only and do not define or limit, and shall not be used to interpret or
construe the contents of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed at Westwood, Kansas, on the date above set forth.
XXXXX X. XXXXXX SPRINT/UNITED MANAGEMENT COMPANY
/s/ Xxxxx X. Xxxxxx By: /s/ X. Xxxxxx
11
AMENDMENT
The Agreement Regarding Special Compensation and Post Employment
Restrictive Covenants (the "Special Agreement") between Sprint/United Management
Company and Xxxxx X. Xxxxxx (the "Executive") is hereby amended as follows,
effective January 21, 1994:
1. The first sentence of Section 8 shall be changed by adding the word
"or" at the end of item (b) and by adding the following item (c):
(c) by Executive if Executive is required to be based anywhere
other than the Kansas City metropolitan area or the Dallas,
Texas metropolitan area except for required travel on business
to an extent substantially consistent with Executive's business
travel obligations immediately prior to the Change in Control;
2. Section 12 shall be changed by:
(a) deleting from the second sentence of the first paragraph the
words "the performance of duties in that position will involve",
and substituting in lieu thereof the words "Executive dedicates
his time and efforts principally to"; and
(b) changing the last sentence of the Section to read:
This section shall not prevent Executive from using general
skills and experience developed during employment with Employer
or other employers; or from accepting a position of employment
with another company, firm, or other organization which competes
with Employer, if its business is diversified and Executive is
employed in a part of the business that is not related
principally to long distance services and provided that such
position does not require or permit the disclosure or use of
Confidential Information.
Except as amended herein, the terms of the Special Agreement shall
remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed at Westwood, Kansas, as of the date above set forth.
EXECUTIVE SPRINT/UNITED MANAGEMENT
COMPANY
/s/ Xxxxx X. Xxxxxx By: /s/ X. Xxxxxx
Title: SVP - HR
Exhibit (10)(w)
Special Compensation and Non-Compete Agreement
This Agreement is entered into as of the 12th day of August, 1997 (the
"Effective Date"), by and between Sprint Corporation, a Kansas corporation
("Sprint," and it, together with its Subsidiaries, the "Employer"), and
MichaelB. Xxxxxx ("Employee").
Recitals
1. Employer is engaged in the telecommunications and related businesses.
This is a worldwide business that may be conducted from sites and serve
customers throughout the world.
2. By virtue of his work for Employer, Employee has gained and will
continue to gain additional valuable Proprietary Information of
Employer.
3. Employer desires to enter into this Agreement to provide severance and
other benefits for Employee in exchange for Employee's agreement to
maintain the confidentiality of certain information and to refrain from
competing with Employer during and after termination of his employment
with Employer.
Capitalized terms are defined in Section 6 or parenthetically throughout this
Agreement.
Now, Therefore, in consideration of the premises and of the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties, the parties hereby
agree as follows:
1. Employment At Will.
Employee's employment may be terminated by either party for any reason. Employee
shall provide Employer with written notice of his intent to terminate at least
30 days before the effective date of the termination. Except in the event of
Termination for Cause, Employer shall provide Employee with written notice of
its intent to terminate Employee's employment at least 30 days before the
effective date of the termination.
2. Employee's Covenants.
2.01. Exclusivity of Services.
Employee shall, during his employment with Employer, owe an undivided duty of
loyalty to Employer and agrees to devote his entire business time and attention
to the performance of those duties and responsibilities and to use his best
efforts to promote and develop the business of Employer. Employee shall adhere
to the conflicts of interest provisions set forth in Section 7 of the Sprint
Code of Ethics (or any successor provision, which is incorporated by this
reference) as
1
in effect as of the date of this Agreement and as may be amended from time to
time hereafter. The determination of the Committee as to the Employee's
compliance with this provision shall be final.
2.02. Proprietary Information.
Employee acknowledges that during the course of his employment he has learned or
will learn or develop Proprietary Information. Employee further acknowledges
that unauthorized disclosure or use of such Proprietary Information, other than
in discharge of Employee's duties, will cause Employer irreparable harm.
Except in the course of his employment with Employer under this Agreement, in
the pursuit of the business of Employer, or as otherwise required in employment
with Employer, Employee shall not, during the course of his employment or at any
time following termination of his employment, directly or indirectly, disclose,
publish, communicate, or use on his behalf or another's behalf, any Proprietary
Information. If during or after his employment Employee has any questions about
whether particular information is Proprietary Information he shall consult with
Employer's Corporate Secretary.
2.03. Non-Competition.
Employee shall not, during the Non-Compete Period, engage in Competitive
Employment, whether paid or unpaid and whether as a consultant, employee, or
otherwise. This provision shall not apply if, within one year following a Change
in Control:
(i) Employer terminates Employee's employment with Employer for any reason
other than Termination for Cause or Total Disability; or
(ii) Employee terminates his employment with Employer upon Constructive
Discharge.
If Employee ceases to be employed by Employer because of a sale, merger,
divestiture, or other transaction entered into by Employer, this provision shall
continue to apply during the Non-Compete Period, except that Employee's
continued employment for the subsidiary, division, or other divested unit of the
Employer shall not be deemed a violation of this provision.
Employee agrees that because of the worldwide nature of Employer's business,
breach of this agreement by accepting Competitive Employment anywhere in the
United States would irreparably injure Employer and that, therefore, a more
limited geographic restriction is neither feasible nor appropriate to protect
Employer's interests.
2.04. Inducement of Employees, Customers and Others.
During the term of his employment and the Non-Compete Period, Employee shall not
directly or indirectly solicit, induce, or encourage any employee, consultant,
agent, or customer of Employer with whom he has worked or about whom he has
gained Proprietary Information to terminate his or its employment, agency, or
customer relationship with Employer or to render services for or transfer
business to any Competitor of Employer.
2
2.05. Return of Employer's Property.
Employee shall, upon termination of his employment with Employer, return to
Employer all property of Employer in his possession, including all notes,
reports, sketches, plans, published memoranda or other documents, whether in
hard copy or in computer form, created, developed, generated, received, or held
by Employee during employment, concerning or related to Employer's business,
whether containing or relating to Proprietary Information or not. Employee shall
not remove, by e-mail, by removal of computer discs or hard drives, or by other
means, any of the above property containing Proprietary Information, or
reproductions or copies thereof, or any apparatus from Employer's premises
without Employer's authorization.
2.06. Exit Interview.
At Employer's request, Employee shall participate in an exit interview prior to
his Severance Date to provide for the orderly transition of his duties, to
arrange for the return of Employer's property, to discuss his intended new
employment, and to discuss and complete such other matters as may be necessary
to ensure full compliance with this Agreement.
2.07. Confidentiality of Agreement.
Employee shall not disclose or discuss the existence of this Agreement, the
Stock-Based Award, the Special Compensation, or any other terms of the Agreement
except (i) to members of his immediate family,
(ii) to his financial advisor or attorney, but then only to the extent
necessary for them to assist him,
(iii)toa potential employer on a strictly confidential basis, and then only to
the extent necessary for reasonable disclosure in the course of serious
negotiations, or
(iv) as required by law or to enforce his legal rights.
3. Stock-Based Award.
As partial consideration for Employee's agreements hereunder, Employee shall be
granted the Stock-Based Award on the terms set forth in this section.
3.01. Award of Restricted Stock.
Employer hereby grants to Employee an award of 7,500 shares of restricted stock
under Sprint's 1990 Restricted Stock Plan, the terms of which are hereby
incorporated into this Agreement by this reference.
3.02. Lapse of Restrictions.
Employee may not sell, transfer, assign, pledge, or otherwise encumber or
dispose of shares of restricted stock until the restrictions on the shares
lapse. Restrictions on the shares covered by this award shall lapse, with
respect to 100% of the total shares granted, on the fifth anniversary of the
Effective Date.
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3.03. Rights as Stockholder and Issuance of Shares.
Except as set forth in the 1990 Restricted Stock Plan, Employee shall have all
rights of a stockholder with respect to the shares of restricted stock,
including the right to vote the shares of stock and the right to dividends on
the shares. The shares of restricted stock shall be registered in the name of
the Employee and the certificates evidencing the shares shall, at Employer's
sole election, either (i) bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to the award or (ii) be held in escrow
by the Company. Within 60 days of the Effective Date of this Agreement, the
Employee shall execute a stock power or powers assigning the shares of
restricted stock to Sprint, and Sprint shall hold the stock power and the
certificate in escrow and may use the stock power to effect forfeiture of the
restricted stock to the extent the shares are forfeited under the terms of this
Agreement. Sprint shall cause the certificate evidencing unrestricted shares of
common stock to be issued to the Employee as soon as practicable after the
restrictions lapse on the restricted shares.
3.04. Provisions Applicable to Stock-Based Award.
(a) Acceleration of Stock-Based Award.
(1) Conditions to Acceleration.
The restrictions on all shares of restricted stock that have not
otherwise lapsed shall lapse if, on or after the first anniversary of
the Effective Date, Employee is not in breach
of this Agreement and
(i) Employer terminates Employee's employment with Employer for any
reason other than Termination for Cause or Employee's Total
Disability or
(ii)Employee terminates his employment with Employer
by reason of Employee's Constructive Discharge or
(iii)Employee ceases to be employed by Employer because of a sale,
merger, divestiture, or other transaction entered into by
Employer.
(2) No Acceleration on Transfer of Employment to Affiliates.
Inno event shall the restrictions lapse on restricted stock as provided
in the prior section upon Employee's ceasing employment with Employer
to commence employment with an Affiliate of Sprint.
(b) Forfeiture of Stock-Based Award on Transfer to Affiliates and on Termination
of Employment in Certain Circumstances.
Employee shall not be entitled to sell or continue to own any unvested
shares of restricted stock if before such restricted shares vest, (i)
Employee ceases employment with Employer and begins employment with an
Affiliate of Employer,
(ii)Employer terminates Employee's employment with Employer for any
4
reason constituting Termination for Cause or by reason of
Employee's Total Disability, or
(iii)Employee terminates his employment with Employer for any reason other
than Employee's Constructive Discharge.
Except as to clause (iii), this provision applies regardless of what
subsequent employment Employee may take.
(c) Tax Withholding. Employer may withhold the amount of any tax attributable to
any amount payable or shares issuable under this Agreement.
4. Payment of Special Compensation.
In lieu of any payments or benefits available under any and all Employer
severance plans or policies but not in lieu of benefits under Sprint's Long-Term
Disability Plan, Employee shall be entitled to Special Compensation plus any
vacation pay for vacation accrued but not taken by Employee on his Severance
Date, if
(i) Employer terminates Employee's employment with Employer for any reason
other than Termination for Cause or Total Disability or
(ii)Employee terminates his employment with Employer upon Constructive
Discharge.
The payments and benefits provided for in this section shall be in addition to
all other sums then payable and owing to Employee hereunder and, except as
expressly provided herein, shall not be subject to reduction for any amounts
received by Employee for employment or services provided to any Person other
than Employer after the Severance Date and shall be in full settlement and
satisfaction of all of Employee's claims against and demands upon Employer.
Employee's right to receive severance or other benefits pursuant to this section
shall cease immediately if Employee is re-employed by Employer or Employee
materially breaches this Agreement.
5. Dispute Resolution.
5.01. Jurisdiction and Venue.
Employee consents to jurisdiction and venue in the state and federal courts in
and for Xxxxxxx County, Kansas, for any and all disputes arising under this
Agreement, provided, however, that Employer may seek injunctive relief in any
court of competent jurisdiction to enjoin any violation of the covenants under
Section 2, as well as seeking damages therefor.
5.02. Remedies.
Employee acknowledges that the restraints and agreements herein provided are
fair and reasonable, that enforcement of the provisions of this Agreement will
not cause him undue hardship and that the provisions are reasonably necessary
and commensurate with the need to protect Employer and its legitimate and
proprietary business interests and property from irreparable harm.
5
Employee acknowledges that failure to comply with the terms of this Agreement,
particularly the provisions of Section 2, will cause irreparable damage to
Employer. Therefore, Employee agrees that, in addition to any other remedies at
law or in equity available to Employer for Employee's breach or threatened
breach of this Agreement, Employer is entitled to specific performance or
injunctive relief, without bond, against Employee to prevent such damage or
breach, and the existence of any claim or cause of action Employee may have
against Employer shall not constitute a defense thereto.
If Employee materially breaches any provision of Section 2 or if any of those
provisions are held to be unenforceable against Employee
(i) Employee shall return any Special Compensation paid pursuant to
this Agreement and
(ii) if Employee's breach occurs within the five-year period beginning on the
Effective Date of this Agreement, Employee shall return to Employer the
stock received with respect to the Stock-Based Award, or, if Employee
has disposed of the stock, an amount equal to the fair market value
thereof on the date of disposition.
This remedy is a return of consideration and shall be in addition to any other
remedies. During Employee's employment with Employer, the Committee shall
determine whether Employee has materially breached the provisions of Section 2,
and the Committee's determination shall be final.
6. Definitions.
6.01. Affiliate.
"Affiliate" means, with respect to any Person, a Person, other than a Subsidiary
of such Person, (i) controlling, controlled by, or under common control with
such Person and (ii) any other Person with whom such Person reports consolidated
financial information for financial reporting purposes. "Control" for this
purpose means direct or indirect possession by one Person of voting or
management rights of at least 20% with respect to another Person.
6.02. Change in Control.
"Change in Control" means the occurrence of any of the following events:
(i) the acquisition, without the approval of a majority of the directors
described in clause (ii) of this Section 6.02, by any "person" or
"group" as such terms are defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules
thereunder other than
(A) a trustee or other fiduciary holding securities under an employee
benefit plan of Sprint or
(B) Sprint or a corporation owned, directly or indirectly, by the
stockholders of Sprint in substantially the same proportions as
their ownership of stock of Sprint
6
of securities of Sprint representing 20% or more of the combined
voting power of Sprint's then outstanding securities; or
(ii) at the end of any two-year period, less than a majority of the
directors of Sprint are directors
(A) who were directors of Sprint at the beginning of the
two-year period or
(B) whose election or nomination as director was approved by a vote of
2/3's of the then directors described in this
clause (ii) of this Section 6.02 by prior nomination or
election; or
(iii)the shareholders of Sprint approve a merger, consolidation, liquidation,
or dissolution of Sprint, or a sale of all or substantially all of the
assets of Sprint without approval of a majority of the directors
described in clause (ii) of this Section 6.02
6.03. Committee.
"Committee" means the Organization, Compensation, and Nominating
Committee of Sprint's board of directors.
6.04. Competitive Employment.
"Competitive Employment" means the performance of duties or
responsibilities for a Competitor of Employer
(i) that are of a similar nature or employ similar professional or technical
skills (e.g., marketing, engineering, legal, etc.) to those employed by
Employee in his performance of services for Employer at any time during
the two years before the Severance Date,
(ii) that relate to products or services that are competitive with Employer's
products or services with respect to which Employee performed services
for Employer at any time during the two years before the Severance Date,
or
(iii)inthe performance of which Proprietary Information to which Employee had
access at any time during the two-year period before the Severance Date
could be of substantial economic value to the Competitor of Employer.
6.05. Competitor of Employer.
Because of the highly competitive, evolving nature of Employer's industry, the
identities of companies in competition with Employer are likely to change over
time. The following tests, while not exclusive indications of what employment
may be competitive, are designed to assist the parties and any court in
evaluating whether particular employment is prohibited under this Agreement. A
Sprint Affiliate shall not be a Competitor of Employer.
"Competitor of Employer" means
7
(i) any Person doing business in the United States whose primary business is
providing local or long distance telephone or wireless service;
(ii) any Person doing business in the United States, who, together
with its Consolidated Affiliates, receives more than 15% of
its gross operating revenue from a line of business in which
Employer, together with its Consolidated Affiliates, receives
more than 15% of its gross operating revenues, all as measured
by the most recent available financial information of both
Employer and such other Person, at the time Employee accepts,
or proposes to accept, employment with or to otherwise perform
services for such Person;
(iii)any Person doing business in the United States and operating, for less
than 5 years, a line of business from which Employer derives more than
15% of its gross operating revenues, notwithstanding such Person's lack
of substantial revenues in such line of business; and
(iv) any Person doing business in the United States, who receives more than
15% of its gross operating revenue from a line of business in which
Employer has operated for less than 5 years, notwithstanding Employer's
lack of substantial revenues in such line of business.
If financial information is not publicly available or is inadequate for purposes
of applying this definition, the burden shall be on the Employee to demonstrate
that such Person is not a Competitor of Employer.
6.06. Consolidated Affiliate.
"Consolidated Affiliate" means, with respect to any person, all Affiliates and
Subsidiaries of such person, if any, with whom the financial statements of such
person are required, under generally accepted accounting principles, to be
reported on a consolidated basis.
6.07. Constructive Discharge.
"Constructive Discharge" means termination by the Employee of his employment
with the Employer by written notice given within 60 days following one or more
of the following events:
(i) unless Employer first offers to Employee a position having an equal or
greater grade rating, reassignment of Employee from his then current
position with Employer to a position having a lower grade rating, in
each case under Employer's methodology of rating employment positions
for its employees generally;
(ii) a reduction in Employee's targeted total compensation by more than 10%
other than by an across-the-board reduction affecting substantially all
similarly situated employees of Employer; or
(iii)a change in the Employee's base employment area to anywhere other than the
Kansas City metropolitan area within one year following a Change in
Control.
8
6.08. Non-Compete Period.
"Non-Compete Period" means the 18-month period beginning on Employee's Severance
Date. If Employee breaches or violates any of the covenants or provisions of
this Agreement, the running of the Non-Compete Period shall be tolled during the
period the breach or violation continues.
6.09. Person.
"Person" means any individual, corporation, partnership,
association, company, or other entity.
6.10. Proprietary Information.
"Proprietary Information" means trade secrets (such as customer information,
technical and non-technical data, a formula, pattern, compilation, program,
device, method, technique, drawing, process) and other confidential and
proprietary information concerning the products, processes, or services of
Employer or Employer's Affiliates, including but not limited to: computer
programs, unpatented or unpatentable inventions, discoveries or improvements;
marketing, manufacturing, or organizational research and development results and
plans; business and strategic plans; sales forecasts and plans; personnel
information, including the identity of other employees of Employer, their
responsibilities, competence, abilities, and compensation; pricing and financial
information; current and prospective customer lists and information on customers
or their employees; information concerning purchases of major equipment or
property; and information about potential mergers or acquisitions which
information: (i) has not been made generally to the public; and (ii) is useful
or of value to the current or anticipated business, or research or development
activities of Employer or of any customer or supplier of Employer, or (iii) has
been identified to Employee as confidential by Employer, either orally or in
writing.
6.11. Severance Date.
"Severance Date" means the last day on which Employee actually performs services
as an employee of Employer.
6.12. Severance Period.
"Severance Period" means the 18-month period beginning on Employee's
Severance Date.
6.13. Special Compensation.
"Special Compensation" means Employee's right
(i) to continue to receive during the Severance Period periodic compensation
at the same rate as his base salary in effect at the Employee's
Severance Date;
(ii) to receive bonuses under one or more of Sprint's Management Incentive
Plan, Executive Management Incentive Plan, and Sales Incentive
Compensation Plan in which Employee participated on the Severance Date
9
(together with other incentive compensation plans specifically approved for
this purpose by the Committee, the "Short-Term Incentive Plans")based on the
Employee's target amount under such plans on the Severance Date, and
assuming achievement of performance targets under the Short-Term Incentive
Plans of
(A) the actual performance level for periods before the beginning of the
Severance Period and
(B) the lesser of (a) the actual performance level during the Severance
Period and (b) 100% of targeted performance during the Severance
Period,
pro-rating the foregoing performance levels under the Short-Term Incentive
Plans based on the ratio of the amount of time in each of the foregoing time
periods to the amount of time in the whole performance period under each
Short-Term Incentive Plan;
(iii)to receive an award under the Long Term Incentive Plan and the Executive
Long Term Incentive Plan (the "Long-Term Incentive Plans"), assuming
achievement of performance targets under the Long-Term Incentive Plans of
(A) the actual performance level for periods before the beginning of the
Severance Period and
(B) 0% of targeted performance during the Severance Period,
pro-rating the foregoing performance levels under the Long-Term Incentive
Plans based on the ratio of the amount of time in each of the foregoing time
periods to the amount of time in the whole performance period under each
Long-Term Incentive Plan;
(iv)to continue to participate throughout the Severance Period in all group
health plans (as defined in Code section 106(b)(3) or any successor
provision of the Internal Revenue Code of 1986, as amended, including but
not limited to any medical and dental) that Employer continues to make
available to Employer's employees generally and that Employee was
participating in on his Severance Date, except that participation in those
plans after Employee becomes employed full-time during the Severance Period
shall immediately cease unless Employee elects to continue coverage under
the COBRA continuation provisions of any group health plan by paying the
applicable premium therefor;
(v) to continue to participate throughout the Severance Period in all group life
insurance and qualified or non-qualified retirement plans that Employer
continues to make available to Employer's employees generally and that
Employee was participating in on his Severance Date;
(vi)to receive out-placement counseling by a firm selected by
Employer to continue until Employee becomes employed;
10
(vii)tocontinue to receive throughout the Severance Period all executive
perquisites (including automobile allowance, long distance services and
all miscellaneous services) Employee was entitled to receive on the
Severance Date except country club membership dues and accrual of
vacation; and
(viii)tohave the end of the Severance Period treated as Employee's termination
date for purposes of Sprint's employee stock option plans and restricted
stock plans.
Employee shall not be entitled to participate in Sprint's long- and short-term
disability plan after the Severance Date.
6.14. Stock-Based Award.
"Stock-Based Award" means the award of restricted stock under Section 3 of this
Agreement.
6.15. Subsidiary.
"Subsidiary" means, with respect to any Person (the "Controlling Person"), all
other Persons (the "Controlled Persons") in whom the Controlling Person, alone
or in combination with one or more of its Subsidiaries, owns or controls more
than 50% of the management or voting rights, together with all Subsidiaries of
such Controlled Persons.
6.16. Termination for Cause.
"Termination for Cause" means termination by Employer of Employee's
employment because of
(i) conduct by the Employee that violates the Employers code of ethics or
reflects adversely on the Employee's honesty or
(ii)Employee's willful engagement in conduct that is materially
injurious to the Employer.
Termination for failure to meet performance expectations, unless willful,
continuing, and substantial, shall not be deemed a Termination for Cause.
6.17. Total Disability.
"Total Disability" shall have the same meaning as in Sprint's Long Term
Disability Plan, as amended from time to time.
7. General Provisions.
7.01. Obligations to Survive Termination of Employment.
Employee's obligations under this Agreement shall survive his termination of
employment with Employer.
7.02. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of Employee's
executors, administrators, legal representatives, heirs, and legatees and to
Employer's successors and assigns.
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7.03. Partial Invalidity.
The various provisions of this Agreement are intended to be severable and to
constitute independent and distinct binding obligations. Should any provision of
this Agreement be determined to be void and unenforceable, in whole or in part,
it shall not be deemed to affect or impair the validity of any other provision
or part thereof, and such provision or part thereof shall be deemed modified to
the extent required to permit enforcement. Without limiting the generality of
the foregoing, if the scope of any provision contained in this Agreement is too
broad to permit enforcement to its full extent, but may be enforceable by
limitations thereon, such provision shall be enforced to the maximum extent
permitted by law, and Employee hereby agrees that such scope may be judicially
modified accordingly.
7.04. Waiver.
The waiver by either party of a breach of any provision of this Agreement by any
other party shall not operate or be construed as a waiver of any subsequent
breach.
7.05. Prior Agreements Merged into Agreement.
This Agreement represents the entire understanding of the parties and, to the
extent that there is any conflict, supersedes all other agreements with respect
to the subject matter hereof.
7.06. Notices.
Any notice or other communication required or permitted to be given hereunder
shall be determined to have been duly given to any party
(i) upon actual receipt at the address of such party specified
below if delivered personally or by regular U.S. mail;
(ii) upon receipt by the sender of a "GOOD" or "OK" confirmation of
transmission if transmitted by facsimile, but only if a copy is also
sent by regular mail or courier;
(iii)when delivery is certified if sent as certified mail, return receipt
requested,addressed, in any case to the party at the following
addresses:
If to Employee: If to Employer:
Xxxxxxx X. Xxxxxx Sprint Corporation
0000 X. 000xx Xxxxxx Attn: Corporate Secretary
Xxxxxxxx Xxxx, XX 00000 0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
FAX: (000) 000-0000
or to such other address or telecopy number as any party may designate
by written notice in the aforesaid manner, or with respect to Employee,
such address as Employee may provide Employer for purposes of its human
resources database.
12
7.07. Governing Law.
Because Employer's business is headquartered in Kansas, and to ensure uniformity
of enforcement of this Agreement, the validity, interpretation, and enforcement
of this Agreement shall be governed by the laws of the State of Kansas.
7.08. Number and Gender.
Wherever the context requires, each term stated in either the singular or plural
shall include the singular and the plural, and the pronouns stated in either the
masculine, the feminine, or the neuter gender shall include the masculine,
feminine, or neuter as appropriate.
7.09. Headings.
The headings of the Sections of this Agreement are for reference purposes only
and do not define or limit, and shall not be used to interpret or construe the
contents of this Agreement.
In Witness Whereof, the parties have caused this Agreement to be duly executed
and effective as of August 12, 1997.
Sprint Corporation
by: /s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx, Vice President
and Secretary
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Employee
13
Exhibit (10)(w)
AGREEMENT REGARDING SPECIAL COMPENSATION
AND POST EMPLOYMENT RESTRICTIVE COVENANTS
THIS AGREEMENT made the 30th day of October, 1997, by and among SPRINT
CORPORATION, a Kansas corporation ("Sprint"), SPRINT/UNITED MANAGEMENT COMPANY,
a Kansas corporation and subsidiary of Sprint ("SUMC") (Sprint, SUMC and the
subsidiaries of Sprint are collectively referred to herein as "Employer"), and
XXXXXX X. XXXXX("Executive").
W I T N E S S E T H:
WHEREAS, Employer and its affiliates are engaged in the
telecommunications business;
WHEREAS, Executive has expertise, experience and capability
in the business of Employer and the telecommunications business
in general;
WHEREAS, SUMC provides services for Sprint, its subsidiaries and
affiliates, including providing all personnel to Sprint and Sprint's Long
Distance Division; and
WHEREAS, Executive has been, and now is serving Employer as
Sprint's President and Chief Operating Officer; and
WHEREAS, Employer desires to enter into this Agreement to provide
severance and other benefits for Executive and obtain Executive's agreements
regarding confidentiality and post- employment restrictive covenants for
Employer; and
WHEREAS, Executive is willing to provide such agreements to Employer.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which consideration is mutually acknowledged by the parties, it
is hereby agreed as follows:
1. Recitals.
The recitals hereinbefore set forth constitute an integral part of this
Agreement, evidencing the intent of the parties in executing this Agreement, and
describing the circumstances surrounding its execution. Said recitals are by
express reference made a part of the covenants hereof, and this Agreement shall
be construed in light thereof.
2. Duties and Responsibilities.
The duties and responsibilities of Executive are and shall continue to
be of an executive nature as shall be required by Employer in the conduct of its
business. Executive's powers and authority shall include all those presently
delegated to him or such other duties and responsibilities as from time to time
may be assigned to him. Executive recognizes, that during his employment
hereunder, he owes an undivided duty of loyalty to Employer, and agrees to
devote his entire business time and attention to the performance of said duties
and responsibilities and to use his best efforts to promote and develop the
business of Employer.
3. Employment Term.
Executive's employment may be terminated by either party in accordance
with Sections 5, 6, 7, or 8 herein.
4. Compensation and Benefits.
During employment, Executive shall be entitled to receive a base annual
salary, shall be reimbursed for reasonable expenses incurred and accounted for
in accordance with the policies and procedures of Employer, and shall be
entitled to vacation pay and other benefits applicable to employees generally,
each as may from time to time be established, amended or terminated. In
addition, upon execution of this Agreement, Executive (a) shall be entitled to
5,668 shares of restricted stock as set forth in a restricted stock agreement of
even date herewith (the "Restricted Stock Agreement"), and (b) shall be entitled
to the Special Compensation set forth in Section 5 hereof in accordance with the
terms of this Agreement.
5. Termination by Employer: Special Compensation.
At any time, Employer may terminate Executive's employment for any
reason. If Executive's termination is other than pursuant to Section 6,
Executive shall, subject to the other provisions of this Section 5, be entitled
to the following Special Compensation (as that term is defined in this Section
5) in lieu of any benefits available under any and all Employer separation plans
or policies, except as noted in Section 17. If Executive's termination is
pursuant to Sections 5, 6 or 7, Executive's obligations under Sections 11, 12,
13, and 14 hereof shall continue.
For purposes of this Agreement, "Special Compensation" shall entitle
Executive:
2
(a) to continue to receive for a period of eighteen (18) months from the
date of termination (the "Severance Period") monthly compensation at the rate
equal to the monthly amount of his base annual salary in effect at the date of
termination of employment;
(b) to receive a bonus, based on actual performance results, up to the
target amount, under the Management Incentive Plan ("MIP") throughout the
Severance Period provided that the amount, if any, payable under such Plan for
the award period including the last day of the Severance Period shall be pro
rated based upon the number of months of the Severance Period that fall within
the award period and the total number of months in such award period;
(c) to receive an award under the Long Term Incentive Plan, pro rated
based on the Executive's last day worked, exclusive of any Severance Period,
determined in accordance with the terms of said Plan;
(d) to an acceleration of vesting of restricted stock in accordance with
the relevant provisions of the Restricted Stock Agreement;
(e) to continue to receive throughout the Severance Period any executive
medical, dental, life, and qualified or nonqualified retirement benefits which
the Executive was receiving or was entitled to receive at the time of
termination, except that long term disability and short term disability benefits
cease on the last day worked;
(f) to receive outplacement counseling by a firm selected by Employer to
continue until Executive becomes employed; and
(g) to continue to receive throughout the Severance Period all
applicable executive perquisites (including automobile allowance, long distance
services and all miscellaneous services) except country club membership dues and
accrual of vacation.
Employer shall pay or cause to be paid the amounts payable under
paragraph (a) above in equal installments, monthly in arrears, and the amount
payable under paragraphs (b) and (c) in accordance with the terms of the Plans.
All payments pursuant to this Section shall be subject to applicable federal and
state income and other withholding taxes.
In addition to the Special Compensation described above,
Executive shall also be entitled to any vacation pay for
3
vacation accrued by Executive in the calendar year of
termination but not taken at the time of termination.
In the event Executive becomes employed full time during the Severance
Period, Executive's entitlement to continuation of the benefits described in
paragraph (e) shall immediately cease, however, Executive shall retain any
rights to continue medical insurance coverage under the COBRA continuation
provisions of the group medical insurance plan by paying the applicable premium
therefor.
The payments and benefits provided for in this Section shall be in
addition to all other sums then payable and owing to Executive hereunder and,
except as expressly provided herein, shall not be subject to reduction for any
amounts received by Executive for employment or services provided after
termination of employment hereunder, and shall be in full settlement and
satisfaction of all of Executive's claims and demands.
In all events, Executive's right to receive severance and/or other
benefits pursuant to this Section shall cease immediately in the event Executive
is reemployed by Employer or an affiliate or Executive breaches his Confidential
Information Covenant (as defined in Section 11 hereof), or breaches Sections 12,
13 or 14 hereof. In all cases, Employer's rights under Section 15 shall
continue.
6. Voluntary Resignation by Executive; Termination for Cause; Total
Disability.
Upon termination of Executive's employment by either Voluntary
Resignation, Termination for Cause (as those terms are defined in this Section
6), or Total Disability, as that term is defined in the Long Term Disability
Plan, Executive shall have no right to compensation, severance pay or other
benefits described herein but Executive's obligations under Sections 11, 12, 13
and 14 hereof shall continue.
(a) Voluntary Resignation by Executive. At any time,
Executive has the right, by written notice to Employer, to
terminate his services hereunder ("Voluntary Resignation"),
effective as of thirty (30) days after such notice.
(b) Termination for Cause by Employer. At any time,
Employer has the right to terminate Executive's employment.
Termination upon the occurrence of any of the following shall be
deemed termination for cause ("Termination for Cause"):
4
(i) Conduct by the Executive which reflects
adversely on the Executive's honesty, trustworthiness or
fitness as an Executive, or
(ii) Executive's willful engagement in conduct
which is demonstrably and materially injurious to the
Employer.
Termination for failure to meet performance expectations, unless
willful, continuing and substantial, shall not be deemed a Termination
for Cause. For Termination for Cause, written notice of the termination
of Executive's employment by Employer shall be served upon Executive and
shall be effective as of the date of such service. Such notice given by
Employer shall specify the act or acts of Executive underlying such
termination.
(c) Total Disability. Upon the total disability of the
Executive, as that term is defined in the Long Term Disability Plan,
Executive shall have no right to compensation or severance pay described
herein but shall be entitled to long term disability and other such
benefits afforded under the applicable policies and plans.
7. Resignation Following Constructive Discharge.
If at any time, except in connection with a termination pursuant to
Section 5, 6, or 8 Executive is Constructively Discharged (as that term is
defined in this Section 7) then Executive shall have the right, by written
notice to Employer within sixty (60) days of such Constructive Discharge, to
terminate his services hereunder, effective as of thirty (30) days after such
notice. Executive shall in such event be entitled to the compensation and
benefits as if such employment were terminated pursuant to Section 5 of this
Agreement.
For purposes of this Agreement, the Executive shall be "Constructively
Discharged" upon the occurrence of any one of the following events:
(a) Executive is removed from his position with Employer other
than as a result of Executive's appointment to positions of equal or
superior scope and responsibility; or
(b) Executive's targeted total compensation is reduced by more
than 10% (other than across-the-board reductions
5
similarly affecting all executive officers of Sprint
Corporation).
8. Effect of Change in Control.
In the event that within one year of a Change in Control (as that term
is defined in this Section 8) Executive's employment is terminated:
(a) by the Employer other than pursuant to Section 6
hereof; or
(b) by Executive pursuant to Section 7 hereof,
then Executive shall be entitled to the Special Compensation described in
Section 5 and shall be bound by Section 11, but shall not have any continuing
obligations under Sections 12, 13, and 14, except as otherwise required by
common law or statute.
For purposes of this Agreement, a "Change in Control" shall be deemed to
have occurred if:
(i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")) other
than a trustee or other fiduciary holding securities under an employee
benefit plan of Sprint or any of its affiliates, and other than Sprint
or a corporation owned, directly or indirectly, by the stockholders of
Sprint in substantially the same proportions as their ownership of stock
of Sprint, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
Sprint representing 20% or more of the combined voting power of Sprint's
then outstanding securities, or
(ii) during any period of two consecutive years (not including
any period prior to the date of this Agreement), incumbent members cease
for any reason to constitute a majority of the members of the Board of
Directors of Sprint;
provided, however, that a transaction among Employer, France Telecom ("FT") and
Deutsche Bundespost Telekom ("DT") commonly known as Project Phoenix shall not
constitute a Change in Control for this Agreement and the related Restricted
Stock Agreement, except that an acquisition of 35% or more of Sprint's voting
securities by DT and FT collectively shall constitute a Change in Control. A
member of the Board of Directors of Sprint shall be an "incumbent member" if
such individual is as of the
6
date of this Agreement or at the beginning of the applicable two consecutive
year period a member of the Board of Directors of Sprint, and any new director
after the date of this Agreement (other than a director designated by person who
has entered into an agreement to effect a transaction described in subparagraph
(i) above) whose election to the Board or nomination for election by the
stockholders of Sprint was approved by a vote of at least two-thirds (2/3) of
the directors still in office who either were directors as of the date hereof or
as of the first day of the applicable two consecutive year period or whose
election or nomination for election was previously so approved.
9. Dispute Resolution.
All disputes arising under this Agreement, other than those disputes
relating to Executive's alleged violations of Sections 11 through 14 herein,
shall be submitted to arbitration by the American Arbitration Association of
Kansas City, Missouri. Costs of arbitration shall be borne equally by the
parties. The decision of the arbitrators shall be final and there shall be no
appeal from any award rendered. Any award rendered may be entered as a judgment
in any court of competent jurisdiction. In any judicial enforcement proceeding,
the losing party shall reimburse the prevailing party for its reasonable costs
and attorneys' fees for enforcing its rights under this Agreement, in addition
to any damages or other relief granted. This Section 9 does not apply to any
action by Employer to enforce Sections 11 through 14 of this Agreement and does
not in any way restrict Employer's rights under Section 15 herein.
10. Enforcement.
In the event Employer shall fail to pay any amounts due to Executive
under this Agreement as they come due, Employer agrees to pay interest on such
amounts at a rate of prime plus two percent (2%) per annum. Employer agrees that
Executive and any successor shall be entitled to recover all costs of
successfully enforcing any provision of this Agreement, including reasonable
attorney fees and costs of litigation.
11. Confidential Information.
Executive acknowledges that during the course of his employment he has
learned or will learn or develop Confidential Information (as that term is
defined in this Section 11). Executive further acknowledges that unauthorized
disclosure or use of such Confidential Information, other than in discharge of
Executive's duties, will cause Employer irreparable harm.
For purposes of this Section, Confidential Information means trade
secrets (such as technical and non-technical data, a
7
formula, pattern, compilation, program, device, method, technique, drawing,
process) and other proprietary information concerning the products, processes or
services of Employer, or its affiliates, including but not limited to: computer
programs; unpatented inventions, discoveries or improvements; marketing,
manufacturing, or organizational research and development; business plans; sales
forecasts; personnel information, including the identity of other employees of
Employer, their responsibilities, competence, abilities, and compensation;
pricing and financial information; current and prospective customer lists and
information on customers or their employees; information concerning planned or
pending acquisitions or divestitures; and information concerning purchases of
major equipment or property, which information: (a) has not been made generally
available to the public; and (b) is useful or of value to the current or
anticipated business, or research or development activities of Employer or of
any customer or supplier of Employer, or (c) has been identified to Executive as
onfidential by Employer, either orally or in writing.
Except in the course of his employment and in the pursuit of the
business of Employer or any of its subsidiaries or affiliates, Executive shall
not, during the course of his employment, or for a period of eighteen (18)
months following termination of his employment for any reason, directly or
indirectly, disclose, publish, communicate or use on his behalf or another's
behalf, any proprietary information or data of Employer or any of its
subsidiaries or affiliates.
Executive acknowledges that Employer operates and competes nationally,
and that Employer will be harmed by unauthorized disclosure or use of
Confidential Information regardless of where such disclosure or use occurs, and
that therefore this confidentiality agreement is not limited to any single state
or other jurisdiction.
12. Non-Competition.
Executive acknowledges that use or disclosure of Confidential
Information described in Section 11 is likely if Executive were to perform
services relating to the long-distance business on behalf of a competitor of
Employer. Therefore, Executive shall not, for eighteen (18) months following
termination of employment for any reason (the "Non-Compete Period"), accept any
position, including but not limited to a position in the long-distance
operations of AT&T or MCI, where the performance of duties in that position will
involve managing, controlling, participating in, investing in, acting as
consultant or advisor to, rendering services for, or otherwise assisting any
person or entity that engages in or owns any business that is in the
long-distance business. For purposes of
8
this Agreement, "long-distance business" includes all forms of interexchange,
interstate, intrastate, interlata, and international communications, together
with related activities such as information services.
Executive acknowledges that Employer operates and competes nationally,
and that therefore this non-competition agreement is not limited to any single
state or other jurisdiction.
This section shall not prevent Executive from using general skills and
experience developed during employment with Employer or other employers; or from
accepting a position of employment with another company, firm, or other
organization which competes with Employer, if its business is diversified and
Executive is employed in a part of the business that is not related to the
long-distance business and provided that such position does not require or
permit the disclosure or use of Confidential Information.
13. Inducement of Other Employees.
For an eighteen (18) month period following termination of employment,
Executive will not directly or indirectly solicit, induce or encourage any
employee or agent of Employer to terminate his relationship with Employer.
14. Return of Employer's Property.
All notes, reports, sketches, plans, published memoranda or other
documents created, developed, generated or held by Executive during employment,
concerning or related to Employer's business, and whether containing or relating
to Confidential Information or not, are the property of Employer and will be
promptly delivered to Employer upon termination of Executive's employment for
any reason whatsoever. During the course of employment, Executive shall not
remove any of the above property containing Confidential Information, or
reproductions or copies thereof, or any apparatus from Employer's premises
without authorization.
15. Remedies.
Executive acknowledges that the restraints and agreements herein
provided are fair and reasonable, that enforcement of the provisions of Sections
11, 12, 13 and 14 will not cause him undue hardship and that said provisions are
reasonably necessary and commensurate with the need to protect Employer and its
legitimate and proprietary business interests and property from irreparable
harm.
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Executive acknowledges that failure to comply with the terms of this
Agreement will cause irreparable damage to Employer. Therefore, Executive agrees
that, in addition to any other remedies at law or in equity available to
Employer for Executive's breach or threatened breach of this Agreement, Employer
is entitled to specific performance or injunctive relief, without bond, against
Executive to prevent such damage or breach, and the existence of any claim or
cause of action Executive may have against Employer will not constitute a
defense thereto. Executive further agrees to pay reasonable attorney fees and
costs of litigation incurred by Employer in any proceeding relating to the
enforcement of the Agreement or to any alleged breach thereof in which Employer
shall prevail in whole or in part.
In the event of a breach or a violation by Executive of any of the
covenants and provisions of this Agreement, the running of the Non-Compete
Period (but not of Executive's obligation thereunder), shall be tolled during
the period of the continuance of any actual breach or violation.
16. Confidentiality of Agreement.
As a specific condition to Executive's right to Special Compensation or
other benefits described herein, Executive agrees that he will not disclose or
discuss: the existence of this Agreement; the Special Compensation provided
hereunder; or any other terms of the Agreement except: (1) to members of his
immediate family; (2) to his financial advisor or attorney but then only to the
extent necessary for them to assist him; (3) to a potential employer on a
strictly confidential basis and then only to the extent necessary for reasonable
disclosure in the course of serious negotiations; or (4) as required by law or
to enforce legal rights.
17. Entire Understanding.
This Agreement constitutes the entire understanding between the parties
relating to Executive's employment hereunder and supersedes and cancels all
prior written and oral understandings and agreements with respect to such
matters, except for the terms and provisions of any employee benefit or other
compensation plans (or any agreements or awards thereunder) referred to in or
contemplated by this Agreement, Executive's Contingency Employment Agreement,
and except for the SPRINT UNITED EMPLOYEE AGREEMENT REGARDING PROPERTY RIGHTS
AND BUSINESS PRACTICES which the Executive has signed and by which Executive
continues to be bound.
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18. Binding Effect.
This Agreement shall be binding upon and inure to the benefit of
Executive's executors, administrators, legal representatives, heirs and legatees
and the successors and assigns of Employer.
19. Partial Invalidity.
The various provisions of this Agreement are intended to be severable
and to constitute independent and distinct binding obligations. Should any
provision of this Agreement be determined to be void and unenforceable, in whole
or in part, it shall not be deemed to affect or impair the validity of any other
provision or part thereof, and such provision or part thereof shall be deemed
modified to the extent required to permit enforcement. Without limiting the
generality of the foregoing, if the scope of any provision contained in this
Agreement is too broad to permit enforcement to its full extent, but may be made
enforceable by limitations thereon, such provision shall be enforced to the
maximum extent permitted by law, and Executive hereby agrees that such scope may
be judicially modified accordingly.
20. Strict Construction.
The language used in this Agreement will be deemed to be the language
chosen by Employer and Executive to express their mutual intent and no rule of
strict construction shall be applied against any person.
21. Waiver.
The waiver of any party hereto of a breach of any provision of this
Agreement by any other party shall not operate or be construed as a waiver of
any subsequent breach.
22. Notices.
Any notice or other communication required or permitted to be given
hereunder shall be determined to have been duly given to any party (a) upon
delivery to the address of such party specified below if delivered personally or
by courier; (b) upon dispatch if transmitted by telecopy or other means of
facsimile, provided a copy thereof is also sent by regular mail or courier; or
(c) within forty-eight (48) hours after deposit thereof in the U.S. mail,
postage prepaid, for delivery as certified mail, return receipt requested,
addressed, in any case to the party at the following address(es) or telecopy
numbers:
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If to Executive:
Xxxxxx X. XxXxx
c/o Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
If to Employer:
Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Secretary
or to such other address(es) or telecopy number(s) as any party may designate by
Written Notice in the aforesaid manner.
23. Governing Law.
This Agreement shall be governed by, and interpreted, construed and
enforced in accordance with, the laws of the State of Kansas.
24. Gender.
Wherever from the context it appears appropriate, each term stated in
either the singular of plural shall include the singular and the plural, and the
pronouns stated in either the masculine, the feminine or the neuter gender shall
include the masculine, feminine or neuter.
25. Headings.
The headings of the Sections of this Agreement are for reference
purposes only and do not define or limit, and shall not be used to interpret or
construe the contents of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date above set forth.
XXXXXX X. XXXXX SPRINT/UNITED MANAGEMENT COMPANY
/s/ Xxxxxx X. XxXxx By: /s/ Xxx X. Xxxxxx
Authorized Officer
SPRINT CORPORATION
By: /s/ X. Xxxxxx
Authorized Officer
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