Exhibit (10)(u)
Special Compensation and Non-Compete Agreement
This Agreement is entered into as of the 6th day of August, 1999 (the "Grant
Date"), by and between Sprint Corporation, a Kansas corporation ("Sprint," and
it, together with its Subsidiaries, the "Employer"), and Xxxxx X. 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 her agreement to work for Employer, Employee will gain
access to 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 her employment
with Employer.
Capitalized terms are defined in Section 5 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 her 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 her employment with Employer, owe an undivided duty of
loyalty to Employer and agrees to devote her entire business time and attention
to the performance of those duties and responsibilities and to use her 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)
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as 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 her employment she 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 her 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 her employment or at any
time following termination of her employment, directly or indirectly, disclose,
publish, communicate, or use on her behalf or another's behalf, any Proprietary
Information. If during or after her employment Employee has any questions about
whether particular information is Proprietary Information she 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 her employment with Employer upon Constructive
Discharge.
If Employee ceases to be employed by Employer because of the sale, spin-off,
divestiture, or other disposition by Employer of the Subsidiary, division, or
other divested unit employing Employee, 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 disposed of by 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.
Employee's representation of a Competitor of Employer in the private practice of
law as a member of a law firm shall not be deemed as breaching this
Non-Competition covenant.
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2.04. Inducement of Employees, Customers and Others.
During the term of her 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 she has worked or about whom she 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.
2.05. Return of Employer's Property.
Employee shall, upon termination of her employment with Employer, return to
Employer all property of Employer in her 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
her Severance Date to provide for the orderly transition of her duties, to
arrange for the return of Employer's property, to discuss her 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
Special Compensation, or any other terms of the Agreement except
(i) to members of her immediate family,
(ii) to her financial advisor or attorney, but then only to the extent
necessary for them to assist her,
(iii) 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
(iv) as required by law or to enforce her legal rights.
3. 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 her Severance
Date, if
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(i) Employer terminates Employee's employment with Employer for any reason
other than Termination for Cause or Total Disability or
(ii) Employee terminates her 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 (1) Employee is reemployed by Employer, (2) Employee
materially breaches this Agreement, or (3) Employee, while bound by the
provisions of Section 2.03, represents a Competitor of Employer in the private
practice of law as permitted by the last sentence of Section 2.03.
4. Dispute Resolution.
4.01. 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.
4.02. 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 her 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.
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 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, Employee shall return
any Special Compensation paid pursuant to this Agreement. 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.
5. Definitions.
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5.01. 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.
5.02. Change in Control.
"Change in Control" means the occurrence of any of the following events:
(i) the acquisition 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,
(B) Sprint or a corporation owned, directly or indirectly, by the stock
holders of Sprint in substantially the same proportions as their
ownership of stock of Sprint, or
(C) Deutsche Telekom AG or France Telecom, individually or collectively;
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 5.02 by prior nomination or election; or
(iii) the shareholders of Sprint approve a merger (in which Sprint is not the
surviving operating entity), consolidation, liquidation, or dissolution
of Sprint, or a sale of all or substantially all of the assets of Sprint;
or
(iv) the acquisition by Deutsche Telekom AG or France Telecom, individually or
collectively, of additional securities of the Company that would result
in their possessing in the aggregate 35% or more of the combined voting
power of the Company's then outstanding securities.
5.03. Committee.
"Committee" means the Organization, Compensation, and Nominating Committee of
Sprint's board of directors.
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5.04. 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 her 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) in the 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.
5.05. 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
(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.
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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.
5.06. 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.
5.07. Constructive Discharge.
"Constructive Discharge" means termination by the Employee of her 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 her 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
Washington, D.C., metropolitan area within one year following a Change in
Control.
5.08. 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.
5.09. Person.
"Person" means any individual, corporation, partnership, association, company,
or other entity.
5.10. 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, in-
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cluding 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 known 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.
5.11. Severance Date.
"Severance Date" means the last day on which Employee actually performs services
as an employee of Employer.
5.12. Severance Period.
"Severance Period" means the 18-month period beginning on Employee's Severance
Date.
5.13. Special Compensation.
"Special Compensation" means Employee's right
(i) to continue to receive during the Severance Period periodic compensation
at the same rate as her 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
(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
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(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 her 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 her Severance Date;
(vi) to receive out-placement counseling by a firm selected by Employer to
continue until Employee becomes employed;
(vii) to continue 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) to have 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.
5.14. 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.
5.15. Termination for Cause.
"Termination for Cause" means termination by Employer of Employee's employment
because of
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(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.
5.16. Total Disability.
"Total Disability" shall have the same meaning as in Sprint's Long Term
Disability Plan, as amended from time to time.
6. General Provisions.
6.01. Obligations to Survive Termination of Employment.
Employee's obligations under this Agreement shall survive her termination of
employment with Employer.
6.02. 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.
6.03. 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.
6.04. 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.
6.05. 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.
6.06. Notices.
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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:
Xxxxx X. XxXxxx Sprint Corporation
0000 Xxxxxxxxx Xx., X.X. Attn: Corporate Secretary
Washington, D.C. 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.
6.07. 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.
6.08. 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.
6.09. 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.
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In Witness Whereof, the parties have caused this Agreement to be duly executed
and effective as of August 6, 1999.
Sprint Corporation
by: /s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx, Vice President and
Secretary
/s/ Xxxxx X. XxXxxx
Xxxxx X. XxXxxx, Employee
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Special Compensation and Non-Compete Agreement
This Agreement is entered into as of the 9th day of December, 1997 (the
"Effective Date"), by and between Sprint Corporation, a Kansas corporation
("Sprint," and it, together with its Subsidiaries, the "Employer"), and Xxxxxx
X. Xxxxxxx ("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
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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 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 the sale, spin-off,
divestiture, or other disposition by Employer of the subsidiary, division, or
other divested unit employing Employee, 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 disposed of by the Employer
shall not be deemed a violation of this provision.
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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.
2.05. 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.
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2.07. Confidentiality of Agreement.
Employee shall not disclose or discuss the existence of this Agreement, the
Alternative 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) 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
(iv) as required by law or to enforce his legal rights.
3. Alternative Stock-Based Awards.
As partial consideration for Employee's agreements hereunder, Employee shall be
granted one of the two Stock-Based Awards, at the election of Employee, on the
terms set forth in this section. Employee must indicate which of the two forms
of compensation he elects to receive by checking the corresponding box above his
signature line at the bottom of this Agreement. If Employee signs this Agreement
but checks neither box or both boxes, Employee shall be considered to have
elected to receive restricted stock.
3.01. Alternative Award of Restricted Stock.
If Employee elects to receive Restricted Stock, this Section 3.01 shall be
considered a part of this Agreement, otherwise it shall not be considered a part
of this Agreement.
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.
(a) 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 25% of the total shares granted, on each of the first four
anniversary dates of the Effective Date.
(b) 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
4
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.
3.02. Alternative Award of Stock Options.
If Employee elects to receive stock options, this Section 3.02 shall be
considered a part of this Agreement; otherwise it shall not be considered a part
of this Agreement.
Sprint hereby grants to Employee, under Sprint's 1990 Stock Option Plan, an
option to purchase 30,000 shares of Sprint common stock at a price of $56.50 per
share. The option shall become exercisable, with respect to 25% of the total
shares granted, on each of the first four anniversaries of the Effective Date.
The option shall expire on December 9, 2007. The terms of the 1990 Stock Option
Plan are hereby incorporated into this Agreement by reference.
3.03. Provisions Applicable to Awards of both Restricted Stock and Stock
Options.
(a) Acceleration of Stock-Based Awards.
(1) Conditions to Acceleration.
The restrictions on all shares of restricted stock that have not
otherwise lapsed shall lapse or the stock options shall become
immediately exercisable, as the case may be, 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
5
(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.
In no event shall the restrictions lapse on restricted stock nor the
exercisability of stock options be accelerated as provided in the prior
section upon Employee's ceasing employment with Employer to commence
employment with an Affiliate of Sprint.
(3) Section 280G Limits on Acceleration.
If the acceleration of the vesting of restricted stock or the
exercisability of the stock-based award hereunder, together with all
other payments or benefits contingent on a change in control within the
meaning of Internal Revenue Code Section 280G or any successor provision
("280G"), results in any portion of such payments or benefits to the
Employee not being deductible by the Employer or its successor as a
result of the application of 280G, the Employee's benefits shall be
reduced until the entire amount of the benefits is deductible. The
reduction shall be effected by the exclusion of grants of options,
restricted stock, or other benefits not deductible by Sprint under 280G
in reverse chronological order of grant date from the application of
this or other acceleration provision, until no portion of such benefits
is rendered non-deductible by application of Code Section 280G.
(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 or exercise or continue to own any unexercisable
stock options, as the case may be, if before such restricted shares vest or
before such stock options become exercisable
(i) Employee ceases employment with Employer and begins employment with an
Affiliate of Employer,
(ii) Employer terminates Employee's employment with Employer for any reason
constituting Termination for Cause or by reason of Employee's Total
Disability, or
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(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.
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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.
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.
8
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,
(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, or
(C) Deutsche Telekom AG or France Telecom, individually or collectively;
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 (in which Sprint is not the
surviving operating entity), consolidation, liquidation, or dissolution of
Sprint, or a sale of all or substantially all of the assets of Sprint; or
(iv) the acquisition by Deutsche Telekom AG or France Telecom, individually or
collectively, of additional securities of the Company that would result in
their possessing in the aggregate 35% or more of the combined voting power
of the Company's then outstanding securities.
6.03. Committee.
"Committee" means the Organization, Compensation, and Nominating Committee of
Sprint's board of directors.
9
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) in the 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
(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
10
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.
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.
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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
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Date (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;
13
(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;
(vii) to continue 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) to have 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 or stock options as
elected by Employee 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.
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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.
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
15
(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:
Xxxxxx X. Xxxxxxx Sprint Corporation
11729 Manor Attn: Corporate Secretary
Xxxxxxx, 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.
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.
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In Witness Whereof, the parties have caused this Agreement to be duly executed
and effective as of December 9, 1997.
Sprint Corporation
by: /s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx, Vice President
and Secretary
I hereby elect to receive the following as the Stock-Based Award (check one):
___ Restricted Stock
_x_ Stock Options
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, Employee
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