Exhibit 10.5
Award Agreement
This Award Agreement (the "Agreement") is entered into as of _______________,
2005 (the "Grant Date"), by and between Sprint Corporation, a Kansas corporation
(together with its direct and indirect subsidiaries, "Sprint") and
_____________________ (the "Executive"), an employee of Sprint, for the grant of
options and restricted stock units with respect to Sprint's FON Common Stock,
par value $2.00 per share ("FON Stock").
In consideration of the mutual covenants and agreements set forth in this
Agreement, the parties agree to the following.
1. Defined Terms Incorporated from 1997 Long-Term Stock Incentive Program
Capitalized terms used in this Award Agreement and not defined herein shall have
the meanings set forth in Sprint's 1997 Long-Term Stock Incentive Program (the
"Program").
2. Grant of Stock Options
Sprint hereby grants to Executive under the Program options to buy
_________________ shares of FON Stock at a strike price of $26.7465 per share
(the "Option"). The Option becomes exercisable at a rate of 25% of the total
number of shares subject to purchase on each of the first four anniversaries of
the Grant Date and expires on the 10th anniversary of the Grant Date. The Option
is governed by, and this Agreement hereby incorporates, the Standard Terms of
Options set forth in Section 6(g) of the Program except (i) as provided in
Section 4 below, and (ii) that the strike price of $26.7465 was set at 110% of
the Fair Market Value of one Share of FON Stock on the Grant Date.
3. Grant of Restricted Stock Units
Sprint hereby grants to Executive under the Program _______________ FON
restricted stock units (the "RSUs"). Each RSU represents the unsecured right to
require Sprint to deliver to Executive one share of FON Stock. With respect to
100% of the RSUs, the "vesting date" and "initial delivery date" is on the third
anniversary of the Grant Date, subject to paragraph 4.02 below. The RSUs are
governed by, and this Agreement hereby incorporates, the Standard Terms of Other
Stock Unit Awards set forth in Section 9(c) of the Program except as provided in
Section 4 below.
4. Terms different from Standard Terms
4.01 Retention Program vesting. If Executive is involuntarily terminated without
cause with a last day worked before the one year anniversary of the Sprint
Nextel merger, any unvested portion of the Option or RSUs will vest on an
accelerated basis, if: (1) the merger is completed and the Executive remains
employed with Sprint, or is on severance, at that time; and, (2) the Option or
RSUs have been outstanding for at least one year as of the last day of the
Executive's severance pay period. This vesting acceleration will be effective on
the last day of the Executive's severance pay period. For this purpose, transfer
to the spun-off company in connection with the contemplated spin-off of Sprint's
Local division is not considered involuntary termination.
4.02 Performance adjustment. Subject to discretion of the Compensation Committee
of Sprint's Board of Directors, the number of RSUs in Section 3 will be adjusted
by multiplying that number by a payout percentage (from 0% to 200%) based on
achievement of financial objectives relating to enterprise economic value added
during 2005 (the "Performance Adjustment"). This Performance Adjustment will be
made as soon as practicable after 2005. If Executive remains an employee of
Sprint throughout 2005, cash dividends on the FON Stock underlying these RSUs
during 2005 will be paid to Executive as soon as practicable after the
Performance Adjustment. These cash dividends will be calculated by first
adjusting the RSUs by the Performance Adjustment and then applying the dividend
rate for each quarterly dividend for which Executive held the RSUs, as adjusted,
on each dividend record date. After the Performance Adjustment is made, if cash
dividends are paid on the underlying FON Stock, Executive will receive cash
dividends for RSUs held on the dividend record date as provided in Section 9(c)
of the Program.
5. Plan Information
Executive hereby acknowledges having read the 1997 Long-Term Stock Incentive
Program Plan Information Statement dated February 2005 available on line at
xxxx://xxxx.xxxx.xxxxxx.xxx/xx/xxxx/xx.xxxx. To the extent not inconsistent with
the provisions of this Agreement, the terms of such information statement and
the Program are hereby incorporated by this reference.
In Witness Whereof, Sprint has caused this Agreement to be executed by its duly
authorized officer and the Executive has executed the same as of the Grant Date.
Sprint Corporation
By: _________________________
Authorized Officer
_____________________________
"Executive"
