Exhibit 10(bb)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of February 26, 2001
(the "Effective Date"), 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 the "Company"), and XXXXXXX X. XXXXX (the
"Executive").
Recitals
1. Because the Company is mindful of the Executive's substantial contributions
to the Company and of his attractiveness in the competitive marketplace,
both within and outside of the telecommunications industry, it desires to
insure his continued employment as Chairman and Chief Executive Officer of
Sprint until the time of his retirement, it desires to encourage him to
maintain and increase his ownership of Company stock, and it desires to
provide him appropriate compensation arrangements that continue to motivate
him to focus on and increase shareholder value.
2. The Company and the Executive have previously entered into a Contingency
Employment Agreement, dated as of June 5, 1986, and amended as of January
1, 1990, and February 18, 1995 (the "Contingency Employment Agreement").
3. The Company and the Executive have previously entered into an Agreement
Regarding Special Compensation and Post-Employment Restrictive Covenants,
dated as of August 8, 1994 (the "Severance Agreement").
4. The Company and the Executive have previously entered into a Restated
Memorandum Agreement, dated January 17, 1987 (the "Memorandum Agreement"),
providing Executive a 15-year mid-career pension enhancement.
5. The Company and the Executive have previously entered into an Employment
and Post-Retirement Consulting Agreement, dated as of August 7, 2000 (the
"Consulting Agreement," and together with the Contingency Employment
Agreement, the Severance Agreement, and the Memorandum Agreement, the
"Prior Agreements").
6. The Executive has been, and now is serving as the Chief Executive Officer
of Sprint and the Chairman of its Board of Directors (the "Board").
7. The Company desires to secure the continued long-term employment of the
Executive and the Executive's services as a consultant to the Company
following the termination of his employment.
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8. In furtherance of the foregoing, the Company and the Executive desire to
amend, combine, and restate the Prior Agreements in the form of this
Agreement.
9. Certain capitalized terms used herein are defined in Section 10 of this
Agreement.
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 are mutually acknowledged by the parties, the
parties hereby agree as follows:
1. Employment and Termination
(a) Conditions of Employment
Subject to the terms of this Agreement, the Company hereby agrees to employ
the Executive as the Chief Executive Officer of Sprint and, provided that the
Executive continues to be so nominated and elected, the Executive shall also
serve as Chairman of the Sprint Board, in each case with such authority, power,
responsibilities, and duties customarily exercised by a person holding such
positions in a company of the size and nature of the Company.
(b) Performance of Duties
The Executive shall, during his employment with the Company, owe an
undivided duty of loyalty to the Company and agrees to use his best efforts to
promote and develop the business of the Company. The Executive agrees that
during his employment with the Company, he must devote his full business time,
energies and talents to serving as its Chairman and Chief Executive Officer and
that he shall perform his duties faithfully and efficiently subject to the
directions of the Board. Notwithstanding the foregoing, the Executive may (i)
serve as a director, trustee or officer or otherwise participate in not-for-
profit educational, welfare, social, religious and civic organizations, (ii)
serve as a director of any for-profit business listed on Exhibit A hereto or,
with the prior consent of the Board, serve as a director of any for-profit
business that is not a Competitor, and (iii) acquire passive investment
interests in one or more entities, to the extent that such other activities do
not inhibit or interfere with the performance of the Executive's duties under
this Agreement, or to the knowledge of the Executive conflict in any material
way with the business or policies of the Company.
(c) Term of Employment
The term of the Executive's employment under this Agreement (the
"Employment Term") begins on the Effective Date and ends on the earlier of (i)
May 1, 2005, or (ii) the date of the Company's first annual shareholders meeting
following the Executive's 65th birthday (the earlier of (i) and (ii), the "End
Date").
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This Agreement sets forth certain terms of Executive's employment during the
Employment Term, the consequences of any termination of employment during the
Employment Term, the terms of certain restrictive covenants by the Executive
during and after the Employment Term, and the terms of certain services to be
provided by Executive if he terminates his employment after the second
anniversary of the Effective Date or if his employment terminates under certain
other circumstances described herein. The Company and Executive agree that the
employment relationship is at will, and either party may terminate the
employment relationship for any reason in accordance with the procedures and
with the consequences set forth in this Agreement.
(d) Procedures for Termination
(A) General Procedures.
Except as set forth below, any purported termination of this Agreement or
of the Executive's employment by the Company or by the Executive during the
Employment Term, other than by Executive's death, shall be communicated by a
written notice of termination to the other party hereto delivered in accordance
with Section 37 below indicating the specific termination provision in this
Agreement relied upon and setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so
indicated. Any such termination will be effective on the Termination Date.
(B) Cause Termination.
The Company may not terminate Executive's employment for Cause during the
Employment Term until it delivers to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire
membership of the Board, excluding Executive, at a meeting of the Board (after
reasonable notice to the Executive and an opportunity for the Executive,
together with his counsel, to be heard before the Board), finding that, in the
good faith opinion of the Board, the Executive is guilty of conduct constituting
Cause and specifying the particulars thereof in detail. The subject of
Executive's termination for Cause must be included in the agenda in the notice
of the meeting sent to members of the Board. Delivery of the resolution
constitutes notice of termination for Cause by the Company.
(C) Good Reason Termination.
Executive may terminate his employment for Good Reason during the
Employment Term only within the Change in Control Protected Period, except that
Executive may not give notice of termination for Good Reason during any period
in which the Executive is unable to substantially perform his duties with the
Company due to physical or mental illness. In order to effect a termination for
Good Reason, Executive must deliver a written notice to the Company that sets
forth the specific event or circumstance giving rise to Good Reason by reference
to one or more portions of the definition of Good Reason set forth in Section 30
of this Agreement.
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(D) Constructive Discharge.
Executive may terminate his employment upon Constructive Discharge any time
during the Employment Term following written notice and an opportunity for the
Company to cure. In order to effect a termination for Constructive Discharge,
Executive must deliver a written notice to the Company within 60 days following
the event giving rise to Executive's claim for Constructive Discharge. The
notice must set forth the specific event or circumstance giving rise to
Constructive Discharge by reference to one or more portions of the definition of
Constructive Discharge set forth in Section 30 of this Agreement. If, within 30
days following notice from the Executive, the Company fully corrects the
circumstances giving rise to the Executive's claim for Constructive Discharge,
the Executive shall not be entitled to terminate his employment for Constructive
Discharge by reason of such event.
(e) Payment of Compensation Earned Through Termination Date.
Upon a termination of the Executive's employment hereunder for any reason,
the Executive or, in the event of his death, the Executive's estate, in addition
to any other payments or benefits to which the Executive may be entitled
hereunder, is entitled to the Executive's Base Salary prorated through the
Termination Date, any payment under the Incentive Plans for Performance Periods
ending before the Termination Date, unless eliminated or reduced, and then only
to the extent that such payments are eliminated or reduced, for all Senior
Officers continuing employment with the Company, and any vacation pay for
vacation accrued by the Executive in the calendar year of termination but not
taken at the Termination Date. Except as otherwise provided herein, the Company
must pay any other employee benefits to which the Executive is entitled by
reason of his employment to the Executive or his estate at the time or times
required by the terms of the applicable Company plan or policy.
(f) Effect of Termination on Other Positions.
If, on the Termination Date, the Executive (i) is a member of the Board of
Sprint or any of its subsidiaries, (ii) serves on the board of directors of any
other corporation by nomination, appointment, or designation by the Company, or
(iii) holds any other position with Sprint or any of its subsidiaries, the
Executive shall, unless otherwise agreed to by the Board, be deemed to have
resigned from all such positions as of the Termination Date. Executive agrees to
execute such documents and take such other actions as the Company may request to
reflect such resignations.
2. Compensation
Subject to the terms of this Agreement, during the Employment Term, while
the Executive is employed by the Company, the Company will compensate him for
his services as follows:
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(a) Base Salary.
The Executive shall receive an annual base salary in an amount not less
than his annual salary on the Effective Date, payable in monthly or more
frequent installments in accordance with the Company's payroll policies (such
annual base salary as adjusted pursuant to this Section 23(a) shall hereinafter
be referred to as the "Base Salary"). The Executive's Base Salary shall be
reviewed, and may be increased but not decreased below the rate in effect on the
Effective Date (other than across-the-board reductions similarly affecting all
Senior Officers), by the Board in a manner that is fair and pursuant to its
normal performance review policies for Senior Officers.
(b) Initial Option Grant
As of the Effective Date, the Company grants the Executive a non-qualified
stock option (the "PCS Option") under the Company's 1990 Stock Option Plan (the
"1990 Plan") to purchase 1,500,000 shares of PCS Common Stock, having a strike
price equal to the Fair Market Value (as defined in the 1990 Plan) of a share of
PCS Common Stock on the Effective Date. In addition, as of the Effective Date,
the Company grants the Executive a non-qualified stock option (the "FON Option"
and, together with the PCS Option, the "Options") under the 1990 Plan to
purchase 1,500,000 shares of FON Common Stock, at a strike price equal to the
Fair Market Value (as defined in the 1990 Plan) of a share of FON Common Stock
on the Effective Date. Subject to the Executive's continued employment with the
Company, the Options shall become exercisable in full on the fourth anniversary
of the Effective Date. In addition, the Options shall become exercisable in full
(1) upon the Company's termination of the Executive's employment without Cause,
but only if the Board's decision to terminate the Executive's employment without
Cause was voted against by at least two of the Board's non-employee directors,
(2) upon a Change in Control on or after the first anniversary of the Effective
Date, and (3) under Section 7.01(i)(1) of the 1990 Plan upon the Executive's
Death or Total Disability (as those terms are defined in the 1990 Plan), but
shall not become exercisable pursuant to Section 7.01(i)(2) of the 1990 Plan
upon Executive's Normal Retirement (as defined in the 1990 Plan). The Options
shall otherwise have the standard terms set forth in the 1990 Plan and shall be
subject to the 1990 Plan, except that, for purposes of the Options, (A) the
terms "Change in Control" and "Termination Date" (except as provided in Section
26(b)) shall have the meanings set forth in this Agreement rather than the
meanings set forth in the 1990 Plan, and (B) the Executive need not make the
agreement required by Section 7.01(m) of the 1990 Plan to remain employed by the
Company for one year from the Effective Date.
(c) Subsequent Option Grants
The grants of the Options are in lieu of annual executive stock option
grants under the Option Plans to the Executive for the years 2002 and 2003, and,
unless otherwise determined by the Committee, the Executive will not be
considered for or
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entitled to option grants under the Option Plans in those years. Option grants
to the Executive for years subsequent to 2003 shall be reviewed by the Board in
a manner that is fair and pursuant to its normal performance review policies for
option grants to Senior Officers.
(d) Incentive Payments.
The Executive will continue to participate in the Incentive Plans, subject
to the terms and conditions of the Incentive Plans as they may from time to time
be established, amended, or terminated in accordance with the Company's plans or
policies governing such benefits to the Company's Senior Officers generally. The
Executive's Targeted Compensation under the Incentive Plans shall be reviewed,
and may be increased but not decreased below his highest Targeted Compensation
in effect in 2001 (other than across-the-board reductions similarly affecting
all Senior Officers), by the Board in a manner that is fair and pursuant to its
normal performance review policies for Senior Officers.
(e) Employee Benefits, Fringe Benefits and Perquisites.
The Company will provide the Executive with employee benefits, fringe
benefits, and perquisites (including, without limitation, miscellaneous
services, life, disability, medical and dental insurance coverages, and
participation in the Company's Executive Deferred Compensation Plan, Key
Management Benefit Plan, Savings Plan, and the Pension Plan) that are no less
favorable in the aggregate to the Executive than those provided to him as of the
Effective Date, subject to amendment, modification or termination in accordance
with the Company's plans or policies governing such benefits to Senior Officers
generally.
(f) Expense Reimbursement.
The Company will reimburse the Executive for reasonable expenses incurred
and accounted for in accordance with the policies and procedures of the Company
for Senior Officers generally, as they may from time to time be established,
amended, or terminated.
(g) Standby Loan Arrangement.
The Board will consider in good faith and in a reasonable manner the
Executive's request from time to time for the Company to facilitate or make a
loan (in either case, the "Loan Arrangement") to enable the Executive (i) to
retain ownership of Sprint stock, (ii) to acquire, through option exercise or
otherwise, Sprint stock, (iii) to pay taxes associated with the retaining
ownership of Sprint stock, or (iv) to pay taxes associated the acquisition of
Sprint stock. It is the current intent of the Board to view favorably the
Executive's request for a Loan Arrangement, though the parties acknowledge that
any action taken by the Board must be consistent with the Board's
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view of its fiduciary duties and must be based on its determination that the
action is in the best interests of the Company and its shareholders.
Any loan to the Executive, if made by the Company, shall bear interest at
the Applicable Federal Rate or such other rate that at the time is appropriate,
giving consideration to any expense to the Company and any imputed income to the
Executive, and all other terms and conditions of the Loan Arrangement shall be
approved by the Board in its discretion, based on its good faith consideration
of the factors relevant to the fulfillment of the Board's fiduciary duties, such
as:
(i) the amount necessary to enable the Executive to increase or retain all or
a significant portion of his stock holdings in the Company,
(ii) the likely impact of the Executive's sale of his Company stock on the
market price of such stock,
(iii) the Executive's borrowing capacity,
(iv) the collateral given by the Executive to secure the Loan,
(v) the terms of comparable loans to executives of other companies,
(vi) the market price of the Company's stock and the value of the Executive's
stock holdings in the Company,
(vii) the short-term and long-term cash flow needs of the Executive, and
(viii) the potential accounting and tax consequences of the Loan Arrangement to
the Company.
(h) Supplemental Retirement Benefits.
The Company agrees that for the purpose of determining the pension benefits
to be provided under this Agreement, the Executive shall be credited with 15
years of service as a Mid-Career Pension Enhancement under the Company's
Supplemental Executive Retirement Plan ("SERP") in lieu of benefits under the
Memorandum Agreement. While receiving supplemental retirement benefits
associated with the Mid-Career Pension Enhancement, Executive covenants that he
will not compete against the Company, but Section 5.4 of the SERP shall not
apply to the Executive. The pension benefit determined under the SERP shall be
offset by the pension benefit determined under the Pension Plan. It is further
agreed that the terms of the Pension Plan and the terms of the SERP, including
any amendments hereafter adopted for said plans, shall be deemed to be
incorporated by reference in this Agreement except to the extent any provisions
in the plans would be inconsistent with the specific terms of this Agreement.
Notwithstanding Section 1(g) of the Key Management Benefit Plan of Section
2(b) of Executive's participation agreement thereunder, Executive may retire
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after the first day of the month following his 65th and on or before the End
Date without losing benefits under that plan.
(i) Elimination of Section 280G Limitations.
If during the Employment Term, a Change in Control or other change in the
equity structure of the Company occurs that would result in the acceleration of
benefits under the Company's stock option plans, restricted stock plans or other
benefit plans of the Company, except for the fact that such plans or agreements
under such plans limit acceleration to amounts deductible by the Company under
Code Section 280G (or any successor provision), then such limitations shall not
apply to the Executive.
3. Post-Retirement Consulting
(a) Consulting Services.
If (i) the Executive terminates his employment after the second anniversary
of the Effective Date, or (ii) the Company terminates the Executive's employment
during the Employment Term for any reason other than Cause or Total Disability
(as defined in the Company's Long-Term Disability Plan), or (iii) the Executive
terminates his employment with the Company (A) during the Employment Term for
Constructive Discharge or (B) during the Change in Control Protected Period for
Good Reason, the Company agrees to retain Executive as a consultant to and
representative of the Company, and when and as requested by the Chief Executive
Officer of the Company, the Executive will provide consulting and advice to the
Company and will participate in various external activities and events for the
benefit of the Company on the terms and conditions provided in this Section 3.
This Section 3 will not apply, and neither the Company nor the Executive shall
have any rights or obligations under this Section 3, unless the events set forth
in (i), (ii) or (iii) of the preceding sentence occur. The Executive agrees to
provide up to thirty (30) days per year to the Company, subject to the
Executive's reasonable availability, for such services. The Executive will
perform services under this Section 3 as an independent contractor. The Company
agrees that Executive will be considered an agent of the Company while
performing services under this Section 3 for purposes of the Indemnification
Agreement between the Company and Executive dated April 14, 1987.
(b) Compensation for Consulting Services.
In return for the foregoing commitments by the Executive, the Company will
pay the Executive, for consulting services or participation in external
activities and events performed at the request of the Chief Executive Officer of
the Company, a daily consulting fee, for the days the Executive renders
services, equal to 1/250th of his Base Salary rate at his Termination Date. The
Company will also provide the Executive continued access to office facilities
and services comparable to those provided to him
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before his Termination Date, including office and secretarial support, use of
the Company aircraft (or private aircraft at the Company's discretion),
communications services, two club memberships, and financial planning services,
in each case comparable to those provided to Executive on his Termination Date.
The Company will continue to provide these services for a period of 10 years
following Executive's Termination Date, but will continue to provide an office
and secretarial support for Executive's lifetime. The Company will also
reimburse the Executive, upon the receipt of appropriate documentation, for
reasonable travel and living expenses that he incurs in providing services at
the request of the Company's Chief Executive Officer or that he incurs because
of his position as a retired Chairman and Chief Executive Officer of Sprint.
Subject only to the Executive's compliance, to the best of his ability, with his
commitments set forth in this Section 3, the Company's obligations set forth in
this agreement are unconditional and irrevocable and shall apply irrespective of
the Executive's incapacitation, before or after his retirement, to perform
services hereunder.
(c) Benefits to Cease upon Performance of Services for a Competitor.
If the Executive performs services for a Competitor, his right to receive
benefits under this Section 3 shall cease immediately.
4. Executive Covenants
(a) Principles of Business Conduct.
The Executive shall adhere in all respects to the Company's Principles of
Business Conduct (or any successor code of conduct) as in effect on the
Effective Date and as they may from time to time be established, amended, or
terminated.
(b) Proprietary Information.
The Executive acknowledges that during the course of his employment and
consulting he has learned or will learn or develop Proprietary Information. The
Executive further acknowledges that unauthorized disclosure or use of such
Proprietary Information, other than in discharge of the Executive's duties, will
cause the Company irreparable harm. Except in the course of his employment with
and consulting for the Company under this Agreement, in the pursuit of the
business of the Company, or as otherwise required in employment with or
consulting for the Company, the Executive 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 or
consulting the Executive has any questions about whether particular information
is Proprietary Information he shall consult with the Company's General Counsel.
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The Executive also agrees to promptly disclose to the Company any
information, ideas, or inventions made or conceived by him that result from or
are suggested by services performed by him for the Company under this Agreement,
and to assign to the Company all rights pertaining to such information, ideas,
or inventions. Knowledge or information of any kind disclosed by the Executive
to the Company shall be deemed to have been disclosed without obligation on the
part of the Company to hold the same in confidence, and the Company shall have
the full right to use and disclose such knowledge and information without
compensation to the Executive beyond that specifically provided in this
Agreement.
(c) Non-Competition.
During the Executive's employment with the Company and during the Non-
Compete Period, Executive shall not engage in Competitive Employment, whether
paid or unpaid and whether as a consultant, employee, or otherwise. If the
Executive ceases to be employed by the Company because of the sale, spin-off,
divestiture, or other disposition by the Company of a subsidiary, division, or
other divested unit employing the Executive, this provision shall continue to
apply during the Non-Compete Period, except that the Executive's continued
employment for the subsidiary, division, or other divested unit disposed of by
the Company shall not be deemed a violation of this provision. The Executive
agrees that because of the worldwide nature of the Company's business, breach of
this Agreement by accepting Competitive Employment would irreparably injure the
Company and that, therefore, a limited geographic restriction is neither
feasible nor appropriate to protect the Company's interests.
In addition, during the Executive's employment with the Company, during the
term of consulting services under Section 3, and during the Non-Compete Period,
the Executive agrees to obtain the approval of the Board before serving as the
chairman or chief executive officer of any Fortune 100 company.
(d) Inducement of Employees, Customers and Others.
During the Executive's employment with the Company, during the term of
consulting services under Section 3, and during the Non-Compete Period,
Executive may not directly or indirectly solicit, induce, or encourage any
employee, consultant, agent, customer, vendor, or other parties doing business
with the Company to terminate their employment, agency, or other relationship
with the Company or to render services for or transfer business to any
Competitor, and the Executive shall not initiate discussion with any such person
for any such purpose or authorize or knowingly cooperate with the taking of any
such actions by any other individual or entity on behalf of the Competitor.
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(e) No Adverse Actions.
During the term of consulting services under Section 3 and during the Non-
Compete Period, the Executive shall not, without the prior written consent of
the Company, in any manner, solicit, request, advise, or assist any other person
or entity to (a) undertake any action that would be reasonably likely to, or is
intended to, result in a Change in Control, or (b) seek to control in any
material manner the Board.
(f) Return of Property.
The Executive shall, upon his Termination Date, return to the Company all
property of the Company in his possession, including all notes, reports,
sketches, plans, published memoranda or other documents, whether in hard copy or
in electronic form, created, developed, generated, received, or held by the
Executive during his employment, concerning or related to the Company's
business, whether containing or relating to Proprietary Information or not. The
Executive 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 the
Company's premises without the Company's written consent.
The Executive may, with the consent of the Company, maintain in his
possession such property as may be necessary or useful in carrying out his
duties as a consultant and representative under Section 3, but must return any
such property as set forth in this Section at the request of the Company.
(g) Mutual Nondisparagement.
The Executive agrees to refrain from making any statements about the
Company or its officers or directors that would disparage, or reflect
unfavorably upon the image or reputation of the Company or any such officer or
director. The Company agrees to refrain from making any statements about the
Executive that would disparage, or reflect unfavorably upon the image or
reputation of the Executive.
(h) Assistance with Claims.
Executive agrees that, consistent with the Executive's business and
personal affairs, during and after his employment by the Company, he will assist
the Company in the defense of any claims or potential claims that may be made or
threatened to be made against it in any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (a "Proceeding") and will
assist the Company in the prosecution of any claims that may be made by the
Company in any Proceeding, to the extent that such claims may relate to the
Executive's services provided under this Agreement. Executive agrees, unless
precluded by law, to promptly inform the Company if Executive is asked to
participate (or otherwise become involved) in any Proceeding involving such
claims or potential claims. Executive also agrees, unless precluded by
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law, to promptly inform the Company if Executive is asked to assist in any
investigation (whether governmental or private) of the Company (or its actions),
regardless of whether a lawsuit has then been filed against the Company with
respect to such investigation. The Company agrees to reimburse Executive for all
of Executive's reasonable out-of-pocket expenses associated with such
assistance, including travel expenses and any attorneys' fees and shall pay a
reasonable per diem fee (equal to 1/250th of his Base Salary rate at his
Termination Date ) for Executive's services.
(i) Key Man Life Insurance.
The Company may, at its discretion, purchase for its own benefit and at its
own expense, key man life insurance on the life of the Executive to cover the
repayment of any unpaid loan balances at the Executive's death, and the
Executive shall not have any right, title or interest in or to such insurance.
The Executive agrees to cooperate with the life insurance company and the
Company in the insurance underwriting process, including a physical examination
and other tests necessary to secure coverage, and to sign all appropriate
applications and written forms as may be required by the insurance company.
5. MCI WorldCom Merger Not a Change in Control
Notwithstanding anything contained herein or in any of the Prior
Agreements, the Executive agrees that neither the approval by the Company's
stockholders of the proposed merger of the Company with MCI WorldCom, Inc.,
pursuant to the Agreement and Plan of Merger, dated October 4, 1999, as amended
and restated as of March 8, 2000 (the "Proposed Merger"), which Proposed Merger
was terminated by the Company and MCI WorldCom, Inc., on July 13, 2000, nor any
other action or event that occurred in connection with the Proposed Merger may
form the basis for any claim or benefit arising from the Prior Agreements not
made by or provided to Executive before the Effective Date. The Executive hereby
represents and warrants that he has not made (or caused to be made) such a claim
or taken (or caused to be taken) any action which would result in such a claim
or the provision of such benefit. In addition, the Executive agrees that neither
the approval by the Company's stockholders of the Proposed Merger nor any other
action or event that occurred in connection with the Proposed Merger may form
the basis for any claim or benefit arising from this Agreement. The Executive
hereby represents and warrants that he will not make (or cause to be made) such
a claim or take (or cause to be taken) any action which would result in such a
claim or the provision of such benefit. This Agreement supersedes the Prior
Agreements, which as of the Effective Date, are null and void.
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6. Payments on Certain Terminations
(a) Payments on Certain Terminations Not in Connection with Change in Control
If, during the Employment Term but not within the Change in Control
Protected Period, (a) the Company terminates Executive's employment with the
Company for any reason other than (x) Cause or (y) Executive's Total Disability
or (b) the Executive terminates his employment with the Company upon
Constructive Discharge, then the Executive shall, subject to the other
provisions of this Section 26, be entitled to the following payments and
benefits (the "Non-Change in Control Benefits") in lieu of any payments or
benefits available under any and all Company separation plans or policies:
(i) The Company will pay Executive his Base Salary, in equal installments in
arrears and on the same schedule as paid before his Termination Date, for
a period (the "Non-Change in Control Severance Period") commencing on the
Termination Date and ending on the earlier to occur of (A) the eighteen
(18) month anniversary of the Termination Date, or (B) the End Date, at
the rate in effect on his Termination Date;
(ii) For the Performance Period in which the Termination Date occurs, the
Company will pay the Executive, at the time when payouts are made for that
Performance Period under the Short-Term Incentive Plan, an amount equal to
the Termination Period Incentive Payout. In addition, the Company will pay
Executive an amount equal to 1/12th (adjusted appropriately if the
Performance Period in which the Termination Date occurs is other than a
12-month period) of the Termination Period Incentive Payout at the end of
each month that (1) follows the Performance Period in which the
Termination Date occurs and (2) ends with or within the Non-Change in
Control Severance Period. In determining the number of months, for
purposes of this clause (ii), both the Termination Date and the end of the
Non-Change in Control Severance Period will be rounded to the nearest
month boundary by rounding to the beginning of the month if the date falls
on or before the 15th of the month and to the beginning of the following
month if the date falls after the 15th of the month. Any stock options
granted in lieu of Targeted Compensation under the Short-Term Incentive
Plan will continue to vest during the Non- Change in Control Severance
Period;
(iii) (A) For Performance Periods in which the Termination Date occurs and in
which the Long-Term Incentive Plan awards are to be measured in cash, the
Company will pay the award with respect to each Performance Period at the
time payment would be made under the plan for the Performance Period,
without regard to any participation requirement, and, with respect to each
Performance Period, will pay an amount equal to the Termination Period
Incentive Payout; (B) for Performance Periods in which the Termination
Date
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occurs and in which the Long-Term Incentive Plan awards are to be measured
in stock options, the options granted with respect to each Performance
Period will continue to vest during the Non-Change in Control Severance
Period;
(iv) During the Non-Change in Control Severance Period, the Company will
provide any executive medical, dental, life, and qualified or nonqualified
retirement benefits that the Executive was receiving or was entitled to
receive as of the Termination Date, except that long-term disability and
short-term disability benefits shall cease on the Executive's last day
worked as an employee of the Company, but if the Executive becomes
employed full-time during the Non-Change in Control Severance Period, the
Executive's entitlement to continuation of these benefits shall
immediately cease, except that the Executive shall retain any rights to
continue coverage under the COBRA continuation provisions of the Company's
welfare benefit plans by paying the applicable premium therefor;
(v) During the Non-Change in Control Severance Period, the Company will pay
outplacement counseling by a firm selected by the Company to continue
until such time as Executive becomes re-employed; and
(vi) During the Non-Change in Control Severance Period, the Company will
provide Executive with all applicable executive perquisites that the
Executive was receiving or was entitled to receive on the Termination Date
(including automobile allowance, communications services and all
miscellaneous services) other than country club membership dues and
accrual of vacation.
In all events, the Executive's right to receive the Non-Change in Control
Benefits shall cease immediately if the Executive is re-employed by the Company
or an affiliate of the Company or if the Executive breaches the Restrictive
Covenants. In all cases, the Company's rights under Section 29(a) shall
continue.
(b) Payments on Certain Terminations in Connection with a Change in Control
If a Change in Control occurs during the Employment Term and, within the
Change in Control Protected Period, the Executive's employment with the Company
is terminated (a) by the Company for any reason other than (x) Cause or (y)
Executive's Total Disability, or (b) by the Executive for Good Reason, the
Executive shall be entitled to the following payments and benefits (the "Change
in Control Benefits") in lieu of any payments or benefits available under
Section 26(a) above or under any and all Company separation plans or policies:
(i) In lieu of any further salary payments to the Executive for periods after
the Termination Date, the Company will pay to the Executive monthly (for a
period (the "Change in Control Severance Period") commencing on the
Termination Date and ending on the earlier to occur of (A) the thirty-five
(35) month anniversary of the Termination Date or (B) the End Date) a
payment equal to
14
the Executive's highest monthly Base Salary (without regard to any
deferred amounts) paid during the 36-month period ending on the
Termination Date;
(ii) In lieu of any payments under, and notwithstanding any provisions of the
Incentive Plans, the Company shall pay to the Executive an amount (the
"Maximum Payout Amount") up to three times the sum of (1) the highest
short-term incentive payment (without regard to any deferred amounts and
without regard to any amounts with respect to which Executive elected to
purchase options under the Management Incentive Stock Option Plan) and
(2) the highest long-term incentive payment received by the Executive
under the Incentive Plans with respect to the three Performance Periods
ending most recently on or before the Termination Date. The payments
will be made in up to three installments on the first day of the 13th,
25th, and 35th month following the Termination Date, and each
installment shall be one-third of the Maximum Payout Amount, or a lesser
amount until the cumulative amount of all payments is equal to the
Maximum Payout Amount times a fraction, the numerator of which is the
number of months in the Change in Control Severance Period and the
denominator of which is 36. For purposes of the foregoing, payments
under the Long-Term Incentive Plan for Performance Periods with respect
to which payments were not made in cash, but in vesting of stock
options, the "payment" will be deemed to be equal to the Executive's
Targeted Compensation for that Performance Period multiplied by the
Performance Period Stock Appreciation for that Performance Period. Any
stock options granted with respect to Performance Periods under the
Long-Term Incentive Plan beginning before the Termination Date will
continue to vest during the Change in Control Severance Period;
(iii) For purposes of the Company's Executive Deferred Compensation Plan,
notwithstanding any provision to the contrary in such plan, the rate at
which interest shall be credited to the Executive's Deferred
Compensation Account A and AA (as defined in such plan) shall be equal
to the maximum interest rate allowed for the account under such plan if
and as amended;
(iv) Notwithstanding anything in the Company Savings Plan, the Executive
shall be entitled to receive a cash payment in an amount equal to the
value of the nonvested portion of his Company Contribution Account (as
defined in such plan) as of the Termination Date;
(v) In addition to the retirement benefits to which the Executive is
entitled under the Sprint Retirement Pension Plan (the "Pension Plan")
or any successor plans thereto, (1) the Executive shall be credited with
three years of additional service at the Executive's highest annual
compensation rate during the term of the Contingency Employment
Agreement or the Employment Term for purposes of determining the amount
of the Executive's pension, (2) the Executive shall, at the time of the
Executive's retirement, receive the life and medical post-
15
retirement benefits that would be due to a retiree under the Pension
Plan, (3) for purposes of the Executive's supplemental retirement
benefits under Section 2(h) of this Agreement, the Executive shall be
credited as of the Termination Date with the maximum number of years of
service at the Executive's highest annual compensation rate during the
term of the Contingency Employment Agreement or the Employment Term
potentially available to the Executive under the SERP as modified by
Section 2(h), and (4) if the Executive takes early retirement, the
Company shall supplement the Executive's pension so that the Executive
is, notwithstanding the Pension Plan early retirement provisions, not
subject to any early retirement pension reduction;
(vi) During the Change in Control Severance Period, the Company will arrange
to provide the Executive with or reimburse the Executive for life,
disability, medical and dental insurance coverages substantially similar
to and at the same cost to the Executive as the cost to the Senior
Officers during such period, but the coverages shall cease immediately
if the Executive obtains subsequent employment;
(vii) During the Change in Control Severance Period, the Company will pay
outplacement counseling by a firm selected by the Company to continue
until such time as Executive becomes re-employed; and
(viii) The Options shall continue to vest during the Change in Control
Severance Period and the last day of the Change in Control Severance
Period shall be the Termination Date for purposes of the 1990 Plan.
In all events, the Executive's right to receive the Change in Control
Benefits shall cease immediately if the Executive is re-employed by the Company
or an affiliate of the Company or if the Executive breaches the Restrictive
Covenants. In all cases, the Company's rights under Section 29(a) shall
continue.
(c) Other Provisions Regarding Payments and Benefits
(A) No Mitigation; No Offset.
In the event of any termination of employment resulting in payments under
this Section 26, the Executive need not seek other employment and, except as
expressly provided herein, there shall be no offset against amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that he may obtain. The payments and benefits provided
for hereunder shall be in full settlement and satisfaction of all of Executive's
claims and demands relating to or arising out of his employment with the Company
or the termination thereof, and the Company's obligation to provide such
payments and benefits is expressly made subject to and conditioned upon (i) the
Executive's execution, within forty-five (45) days after the Termination Date,
of a release of such claims and demands in such form as the
16
Company may reasonably determine and (ii) the Executive's non-revocation of such
release in accordance with the terms thereof.
(B) Nature of Payments.
Any amounts due under this Section 26 are in the nature of severance
payments considered to be reasonable by the parties and are not in the nature of
a penalty.
(C) Benefit Plans.
If, for any period during which the Executive is entitled to continued
benefits under this Section 26, the Company reasonably determines that the
Executive cannot participate in any benefit plan because he is not actively
performing services for the Company, then, in lieu of providing benefits under
any such plan, the Company shall provide comparable benefits or the cash
equivalent of the cost thereof (after taking into account incremental payroll
and income tax consequences thereof to the Executive and the Executive's
dependents as the case may be) to the Executive and, if applicable, the
Executive's dependents through other arrangements.
(D) Other Severance Arrangements.
Except as may be otherwise specifically provided in an amendment of this
Section 26(c)(D) adopted in accordance with this Agreement, the Executive's
rights under Section 26 shall be in lieu of any benefits that may be otherwise
payable to or on behalf of the Executive pursuant to the terms of any severance
pay arrangement of the Company or any other similar arrangement of the Company
providing benefits upon termination of employment.
(E) Time of Payments.
If the amount of any payment provided for in Section 26(b) cannot be
calculated on or before the date on which such payment is due, the Company shall
pay to the Executive on such day an estimate, as calculated in good faith by the
Company, of the minimum amount of such payment and shall pay the remainder of
such payments when calculable.
7. Tax Reimbursement
If the benefits provided under this Agreement together with other benefits,
if any, the Executive receives from the Company constitute "excess parachute
payments," (the "Affected Benefits") as defined in Section 280G of the Code, the
Company shall pay the Executive an additional amount such that the net amount
retained by the Executive after payment of any excise tax that would be imposed
by Section 4999 of the Code (the "Excise Tax") and any federal, state and local
income tax, FICA tax and Excise Tax payable with respect to the payment provided
for in this Section 27, shall equal the amount the Affected Benefits would have
been in the absence of the Excise Tax. For the purpose of determining the amount
of the payment provided for in this Section 27, the Executive shall be deemed to
pay federal, state and local income taxes at
17
the highest marginal rates in effect as of the payment date and the calculation
shall take into account, as applicable, the deduction of any state, federal, or
local income taxes.
8. Interest on Payments
If the Company fails to pay any amounts due to Executive under this
Agreement as they come due, the Company agrees to pay interest on such amounts
at the Applicable Federal Rate plus two percent (2%) per annum. If any payment
is in excess of the amount due, the excess shall constitute a loan by the
Company to the Executive, payable on the 90th day after demand by the Company,
together with interest at the Applicable Federal Rate.
9. Enforcement and Remedies
(a) Equitable Remedies
The Executive acknowledges that the Company would be irreparably injured by
a violation of Sections 24(b) through 24(e) (the "Restrictive Covenants") and he
agrees that the Company, in addition to any other remedies available to it for
any breach or threatened breach, shall be entitled to a preliminary or permanent
injunction, temporary restraining order, or other equivalent relief, restraining
the Executive from any actual or threatened breach of the Restrictive Covenants.
If a bond is required to be posted in order for the Company to secure an
injunction or other equitable remedy, the parties agree that said bond need not
be more than a nominal sum.
The Executive shall be entitled to seek specific performance of his right
to be paid amounts earned through the Termination Date pursuant to Section 22(e)
during the pendency of any dispute or controversy arising under or in connection
with this Agreement.
(b) Resolution of Disputes
All disputes, claims, or controversies arising under or in connection with
this Agreement, other than those contemplated by Section 29(a) above, shall be
settled exclusively by binding arbitration administered by JAMS/Endispute in the
greater Kansas City area in accordance with the then existing JAMS/Endispute
Arbitration Rules and Procedures for Employment Disputes, except that the
parties agree that the arbitrator is not authorized or empowered to impose
punitive damages on either of the parties. If it is determined that any term or
other provision of this Agreement is invalid, illegal, or incapable of being
enforced, the arbitrator shall have the authority to modify the provision or
term to the minimum extent required to permit enforcement. In the event of such
an arbitration proceeding, the Administrator of JAMS/Endispute will appoint the
arbitrator.
18
(c) Attorney Fees
If either party seeks to enforce this Agreement and prevails on the merits,
the losing party agrees to pay to the prevailing party all reasonable legal fees
and expenses incurred by the prevailing party in seeking such enforcement. Such
payments shall be made within five (5) days after the prevailing party's request
for payment accompanied by such evidence of fees and expenses incurred as the
losing party reasonably may require.
10. Definitions
As used in the Agreement, the following terms shall have the meanings set forth
below.
(a) Actual Incentive Payout
"Actual Incentive Payout" means, with respect to a Performance Period, the
product of (1) the Performance Measure for the Performance Period and (2) the
Executive's Targeted Compensation for the Performance Period.
(b) Applicable Federal Rate
"Applicable Federal Rate" means the applicable Federal rate within the
meaning of Section 7872 of the Code.
(c) Capped Incentive Payout
"Capped Incentive Payout" means (i) with respect to a Performance Period
under the Short-Term Incentive Plan, the product of (1) the lesser of (a) 100%
and (b) the Performance Measure for the Performance Period and (2) the
Executive's Targeted Compensation for the Performance Period, and (ii) with
respect to a Performance Period under the Long-Term Incentive Plan, zero
dollars.
(d) Cause
Termination by the Company of the Executive's employment for "Cause" means
termination upon (A) the willful and continued failure by the Executive to
substantially perform his duties with the Company (other than any such failure
resulting from the Executive's incapacity due to physical or mental illness)
after a written demand for substantial performance is delivered to the Executive
by the Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed his duties, or (B)
the willful engaging by the Executive in conduct that is a serious violation of
the Company's Principles of Business Conduct, or (C) the willful engaging by the
Executive in conduct that is demonstrably and materially injurious to the
Company. For purposes of this definition, no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be
19
done, by the Executive not in good faith and without reasonable belief that the
Executive's action or omission was in the best interest of the Company. Failure
to meet performance expectations, unless willful, continuing, and substantial
shall not be considered "Cause."
(e) Change in Control
"Change in Control" means the occurrence of any of the following events:
(i) the acquisition, directly or indirectly, by any "person" or "group" (as
those terms are defined in Sections 3(a)(9), 13(d), and 14(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules
thereunder, including, without limitation, Rule 13d-5(b)) of "beneficial
ownership" (as determined pursuant to Rule 13d-3 under the Exchange Act)
of securities entitled to vote generally in the election of directors
("voting securities") of Sprint that represent 30% or more of the combined
voting power of Sprint's then outstanding voting securities, other than
(A) an acquisition by a trustee or other fiduciary holding securities
under any employee benefit plan (or related trust) sponsored or
maintained by Sprint or any person controlled by Sprint or by any
employee benefit plan (or related trust) sponsored or maintained by
Sprint or any person controlled by Sprint, or
(B) an acquisition of voting securities by Sprint or a corporation owned,
directly or indirectly, by the stockholders of Sprint in substantially
the same proportions as their ownership of the stock of Sprint, or
(C) an acquisition of voting securities pursuant to a transaction
described in clause (iii) below that would not be a Change in Control
under clause (iii);
(ii) a change in the composition of the Board that causes less than a majority
of the directors of Sprint to be directors that meet one or more of the
following descriptions:
(A) a director who has been a director of Sprint for a continuous period
of at least 24 months, or
(B) a director whose election or nomination as director was approved by a
vote of at least two-thirds of the then directors described in clauses
(ii)(A), (B), or (C) by prior nomination or election, but excluding,
for the purpose of this subclause (B), any director whose initial
assumption of office occurred as a result of an actual or threatened
(y) election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person or group other than the Board or
(z) tender offer, merger, sale of substantially all of Sprint's
assets, consolidation, reorganization, or
20
business combination that would be a Change in Control under clause
(iii) on consummation thereof, or
(C) who were serving on the Board as a result of the consummation of a
transaction described in clause (iii) that would not be a Change in
Control under clause (iii);
(iii) the consummation by Sprint (whether directly involving Sprint or
indirectly involving Sprint through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination or (y) a
sale or other disposition of all or substantially all of Sprint's assets
or (z) the acquisition of assets or stock of another entity, in each case,
other than in a transaction
(A) that results in Sprint's voting securities outstanding immediately
before the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of Sprint or
the person that, as a result of the transaction, controls, directly or
indirectly, Sprint or owns, directly or indirectly, all or
substantially all of Sprint's assets or otherwise succeeds to the
business of Sprint (Sprint or such person, the "Successor Entity"))
directly or indirectly, at least 50% of the combined voting power of
the Successor Entity's outstanding voting securities immediately after
the transaction, and
(B) after which more than 50% of the members of the board of directors of
the Successor Entity were members of the Board at the time of the
Board's approval of the agreement providing for the transaction or
other action of the Board approving the transaction (or whose election
or nomination was approved by a vote of at least two-thirds of the
members who were members of the Board at that time), and
(C) after which no person or group beneficially owns voting securities
representing 30% or more of the combined voting power of the Successor
Entity; provided, however, no person or group shall be treated for
purposes of this clause (C) as beneficially owning 30% or more of
combined voting power of the Successor Entity solely as a result of
the voting power held in Sprint prior to the consummation of the
transaction; or
(iv) a liquidation or dissolution of Sprint.
For purposes of clarification, (x) a change in the voting power of Sprint
voting securities based on the relative trading values of Sprint's then
outstanding securities as determined pursuant to Sprint's Articles of
Incorporation or (y) an acquisition of Sprint securities by Sprint that, in
either case, by itself (or in combination only with the other event listed in
this sentence) causes the Sprint's voting securities beneficially owned by a
person or group to represent 30% or more of the combined voting power of
Sprint's then outstanding voting securities is not to be treated as an
"acquisition" by any person
21
or group for purposes of clause (i) above. For purposes of clause (i) above,
Sprint makes the calculation of voting power as if the date of the acquisition
were a record date for a vote of Sprint's shareholders, and for purposes of
clause (iii) above, Sprint makes the calculation of voting power as if the date
of the consummation of the transaction were a record date for a vote of Sprint's
shareholders.
(f) Change in Control Protected Period
"Change in Control Protected Period" means the period commencing on the
date of a Change in Control and ending on the earlier to occur of (A) the three
year anniversary of the date of the Change in Control or (B) the day before the
End Date.
(g) Code
"Code" means the Internal Revenue Code of 1986, as amended, and references
to sections of the Code include any successor provision.
(h) Committee
"Committee" means the Organization, Compensation, and Nominating Committee
of the Board or any successor committee primarily responsible for executive
compensation.
(i) Competitive Employment
"Competitive Employment" means the performance of duties or
responsibilities, or the supervision of individuals performing such duties or
responsibilities, for a Competitor (i) that are of a similar nature or employ
similar professional or technical skills (for example, executive, managerial,
marketing, engineering, legal, etc.) to those employed by the Executive in his
performance of services for the Company at any time during the two years before
the Termination Date, (ii) that relate to products or services that are
competitive with the Company's products or services with respect to which the
Executive performed services for the Company at any time during the two years
before the Termination Date, or (iii) in the performance of which Proprietary
Information to which the Executive had access at any time during the two-year
period before the Termination Date could be of substantial economic value to the
Competitor.
(j) Competitor
Because of the highly competitive, evolving nature of the Company's
industry, the identities of companies in competition with the Company 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.
22
"Competitor" means any one or more of the following (i) any person or
entity (a "Person") doing business in the United States or any of its Divisions
employing the Executive if the Person or its Division receives at least 15% of
its gross operating revenues from providing communications services of any type
(for example, voice, data, including Internet, and video), employing any
transmission medium (for example, wireline, wireless, or any other technology),
over any distance (for example, local, long-distance, and distance insensitive
services), using any protocol (for example, circuit-switched, or packet-based,
such as Internet Protocol), or services or capabilities ancillary to such
communications services (for example, web hosting and network security
services); (ii) any Person doing business in the United States or its Division
employing the Executive if the Person or its Division receives at least 15% of
its gross operating revenue from a line of business in which the Company
receives at least 3% of its gross operating revenues; (iii) any Person doing
business in the United States, or its Division employing the Executive,
operating for less than 5 years a line of business from which the Company
derives at least 3% of its gross operating revenues, notwithstanding such
Person's or Division's lack of substantial revenues in such line of business;
and (iv) any Person doing business in the United States, or its Division
employing the Executive, if the Person or its Division receives at least 15% of
its gross operating revenue from a line of business in which the Company has
operated for less than 5 years, notwithstanding the Company's lack of
substantial revenues in such line of business.
For purposes of the foregoing, gross operating revenues of the Company and
such other Person shall be those of the Company or such Person, together with
their Consolidated Affiliates, but those of any Division employing or proposing
to employ the Executive shall be on a stand-alone basis, all measured by the
most recent available financial information of both the Company and such other
Person or Division at the time the Executive accepts, or proposes to accept,
employment with or to otherwise perform services for such Person. If financial
information is not publicly available or is inadequate for purposes of applying
this definition, the burden shall be on the Executive to demonstrate that such
Person is not a Competitor.
(k) Consolidated Affiliate
"Consolidated Affiliate" means, with respect to any person or entity, all
affiliates and subsidiaries of such person or entity, if any, with whom the
financial statements of such person or entity are required, under generally
accepted accounting principles, to be reported on a consolidated basis.
(l) Constructive Discharge
"Constructive Discharge" means the occurrence of any of the following
circumstances without the Executive's prior written consent unless the
circumstances are fully corrected before the Termination Date specified in the
notice of termination given in respect thereof: (1) the removal of the Executive
from his position with the
23
Company or Board other than as a result of Executive's being offered to a
position of equal or superior scope and responsibility; (2) a reduction within
any 24-month period (other than an across-the-board reduction similarly
affecting all Senior Officers) of the Executive's Targeted Total Compensation to
an amount that is less than 90% of the Executive's highest Targeted Total
Compensation during the 24-month period, or (3) the Company's requiring that the
Executive be based anywhere other than his present location or the Kansas City
metropolitan area (or any other location to which the Executive has consented to
be relocated), except for required travel on business to an extent substantially
consistent with Executive's business travel obligations as of the Effective
Date.
(m) Division
"Division" means any distinct group or unit organized as a segment or
portion of a Person that is devoted to the production, provision, or management
of a common product or service or group of related products or services,
regardless of whether the group is organized as a legally distinct entity.
(n) FON Common Stock
"FON Common Stock" means the Company's FON Common Stock, Series 1, $2.00
par value per share.
(o) Good Reason
"Good Reason" means, without the Executive's express written consent, the
occurrence of any of the following circumstances unless such circumstances are
fully corrected prior to the Termination Date specified in the notice of
termination given in respect thereof:
(i) the assignment to the Executive of any duties inconsistent with the
Executive's status as Chairman of the Board and Chief Executive Officer
of Sprint or a substantial adverse alteration in the nature or status of
the Executive's responsibilities or organizational reporting
relationships from those in effect immediately before the Change in
Control or any downgrading of the Executive's title or position from that
in effect immediately before the Change in Control;
(ii) a reduction by the Company in the Executive's Base Salary as in effect
on the Effective Date or as the same may be increased from time to time,
except for across-the-board salary reductions similarly affecting all
officers of the Company and all officers of any business entity or
entities in control of the Company;
(iii) the failure by the Company, without the Executive's consent, to pay to
the Executive any portion of the Executive's current compensation within
7 days of
24
the date it is due, except pursuant to an across-the-board compensation
deferral similarly affecting all officers of the Company and all officers
of any business entity or entities in control of the Company;
(iv) (A) the relocation of the Company's principal executive offices to a
location outside the metropolitan area in which such offices are located
immediately before the Change in Control; or (B) the Company's requiring
the Executive to be based anywhere other than the Company's principal
executive offices except for required travel on the Company's business to
an extent substantially consistent with the Executive's present business
travel obligations; or (C) the Company's requiring the Executive to
travel to an extent substantially inconsistent with the Executive's
present business travel obligations;
(v) a substantial adverse alteration in the physical conditions under or in
which the Executive is expected to perform the Executive's duties, other
than an alteration similarly affecting all officers of the Company and
all officers of any person in control of the Company;
(vi) the Company's failure to continue in effect any compensation plan in
which the Executive participated immediately before the Change in Control
and that is material to the Executive's total compensation, including but
not limited to the Incentive Plans or any substitute plans adopted before
the Change in Control, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to the
plan, or the Company's failure to continue the Executive's participation
therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits
provided and the level of the Executive's participation relative to other
Senior Officers, as existed at the time of the Change in Control;
(vii) the Company's failure to continue to provide the Executive with benefits
substantially similar in the aggregate to those he enjoyed under any of
the Company's plans, including but not limited to the Pension Plan, stock
option plans, savings plan, supplemental employee retirement agreement,
the Key Management Benefit Plan, the Executive Deferred Compensation
Plan, life insurance, medical, health and accident, or disability plans
in which the Executive was participating at the time of the Change in
Control; the taking of any action by the Company that would directly or
indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive at the
time of the Change in Control; or the failure by the Company to provide
the Executive with the number of paid vacation days to which the
Executive is entitled on the basis of years of service with the Company
in accordance with the Company's normal vacation policy in effect at the
time of the Change in Control; unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been made with respect
to such benefits;
25
(viii) the Company's failure to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated
in Section 31 hereof; or
(ix) the Company's attempt to terminate the Executive's employment without
complying with the procedures set forth in Section 1(d); any such attempt
shall not be effective.
(p) Incentive Plans
"Incentive Plans" means the Long-Term Incentive Plan and the Short-Term
Incentive Plan.
(q) Long-Term Incentive Plan
"Long-Term Incentive Plan" means the Company's Long-Term Incentive Plan,
together with other incentive compensation plans specifically approved for this
purpose by the Committee.
(r) Non-Compete Period
"Non-Compete Period" means the 36-month period beginning on the Termination
Date. If the Executive 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.
(s) Option Plans
"Option Plans" means the 1990 Plan and Sprint's 1997 Long-Term Stock
Incentive Program.
(t) Performance Measure
"Performance Measure" means, with respect to any Performance Period, a
measure, expressed as a percentage, of the extent to which the performance goals
were achieved, as determined by the Committee, during the Performance Period.
(u) Performance Period
"Performance Period" means a period of time under the Short-Term Incentive
Plan or Long-Term Incentive Plan (1) for which the Committee establishes
performance goals for the Company's business units and authorizes payment of
incentive compensation based on a measure of the extent to which those goals
were achieved during the period or (2) with respect to which the Committee
grants employee stock options in lieu of such performance goals, the period
beginning on the first day of the
26
year in which the options are granted and ending on the first date on which the
options become exercisable in full, without regard to any acceleration of
vesting.
(v) Performance Period Stock Appreciation
"Performance Period Stock Appreciation" means, with respect to any
Performance Period, 1.52 times the ratio of (1) the stock price on the last
trading day of the Performance Period to (2) the stock price on the first
trading day of the Performance Period. For this purpose, the stock price on any
day is (1) for days before November 24, 1998, the market price of the Company's
common stock, par value, $2.50 per share, on that day and (2) for days on or
after November 24, 1998, an amount equal to the sum of the market price of one
share of FON Common Stock and one-half the market price of one share of PCS
Common Stock on that day. The market price of a stock on any day is the average
of the high and low prices on that day. This definition shall be adjusted to
equitably reflect changes in Sprint's capital structure after the Effective
Date.
(w) PCS Common Stock
"PCS Common Stock" means the Company's PCS Common Stock, Series 1, $1.00
par value per share.
(x) 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 the
Company or the Company'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 the Company, 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 the Company or of any customer or supplier of the
Company, or (iii) has been identified to the Executive as confidential by the
Company, either orally or in writing.
(y) Senior Officer
"Senior Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended (or any
27
successor statute or statutes thereto), and the rules and regulations
promulgated thereunder.
(z) Short-Term Incentive Plan
"Short-Term Incentive Plan" means the Company's Management Incentive Plan,
together with other incentive compensation plans specifically approved for this
purpose by the Committee.
(aa) Targeted Compensation
"Targeted Compensation" means, (1) with respect to any Performance Period
in which the award is measured in cash, the amount established by the Committee
that would be the payout under the Short-Term Incentive Plan or the Long-Term
Incentive Plan, as the case may be, if the Performance Measure for the
Performance Period were 100% and (2) with respect to any Performance Period in
which the award is measured in stock options, the dollar amount on which the
number of options to grant was based.
(bb) Targeted Total Compensation
"Targeted Total Compensation" means, as of any time, the sum of the
Executive's (1) Base Salary, (2) Targeted Compensation for the Short-Term
Incentive Plan, (3) Targeted Compensation for the Long-Term Incentive Plan, and
(4) targeted value of his annual stock option award (ignoring the value of the
Options granted pursuant to Section 2(b) of this Agreement and any options
granted before the Effective Date) as adopted by the Committee.
(cc) Termination Date
"Termination Date" means (i) in the case of a termination of the
Executive's employment by reason of the Executive's death, the Executive's date
of death, (ii) in the case of a termination of the Executive's employment by
reason of a Constructive Discharge, the date which is thirty (30) days after the
notice of termination is given, and (iii) in all other cases, the date of any
notice of termination or the date, if any, on which the notice declares itself
to be effective (but in no event later than the 60th day after the date on which
such notice is given).
(dd) Termination Period Incentive Payout
"Termination Period Incentive Payout" means an amount equal to the weighted
average of (1) the Actual Incentive Payout for the Performance Period in which
the Termination Date occurs and (2) the Capped Incentive Payout for the
Performance Period in which the Termination Date occurs. The weights in the
weighted average will be for the amount in clause (1), the number of months in
the Performance Period occurring before the Termination Date, and, for clause
(2), the number of months in the
28
Performance Period occurring after the Termination Date, in each case divided by
the number of months in the Performance Period. In determining the number of
months, the Termination Date will be rounded to the nearest month, rounding to
the beginning of the month if the Termination Date falls on or before the 15th
of the month and to the beginning of the following month if the Termination Date
falls after the 15th of the month.
11. Assignability, Binding Nature
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, heirs (in the case of the Executive),
and assigns. No rights or obligations of the Company under this Agreement may be
assigned or transferred by the Company except that such rights or obligations
may be assigned or transferred to any subsidiary of Sprint or pursuant to a
merger or consolidation in which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the
Company, but only if the assignee or transferee becomes the successor to all or
substantially all of the assets of the Company and assumes the liabilities,
obligations, and duties of the Company, as contained in this Agreement, either
contractually or as a matter of law. The Company further agrees that, in the
event of a sale of assets or liquidation as described in the preceding sentence,
it will take whatever action it legally can in order to cause the assignee or
transferee to expressly assume the liabilities, obligations, and duties of the
Company hereunder. No rights or obligations of the Executive under this
Agreement may be assigned or transferred by the Executive other than his rights
to compensation and benefits, which may be transferred only in connection with
the Executive's estate planning objectives or by will or operation of law.
12. Amendment
This Agreement may be amended, modified, or canceled only by mutual
agreement of the parties in writing.
13. Applicable Law
The provisions of this Agreement shall be construed in accordance with the
internal laws of the State of Kansas, without regard to the conflict of law
provisions of any state.
14. Tax Withholding
All payments made pursuant to this Agreement shall be subject to applicable
federal and state income and to other withholding taxes.
29
15. Severability
The various provisions of this Agreement are intended to be severable and
to constitute independent and distinct binding obligations. If any provision of
this Agreement is determined to be invalid, illegal, or incapable of being
enforced, in whole or in part, it shall not affect or impair the validity of any
other provision or part of this Agreement, and the provision or part shall be
deemed modified to the minimum extent required to permit enforcement. Upon such
a determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the court or arbitrator, as applicable, shall have
the authority to so modify the provision or term. If such provision or term is
not modified by the court or arbitrator, the parties must negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
provisions of this Agreement are preserved to the greatest extent possible.
16. Waiver of Breach
No waiver by any party hereto of a breach of any provision of this
Agreement by any other party, or of compliance with any condition or provision
of this Agreement to be performed by such other party, will operate or be
construed as a waiver of any subsequent breach by the other party of any similar
or dissimilar provisions and conditions at the same or any prior or subsequent
time. The failure of either party to take any action by reason of such breach
will not deprive the party of the right to take action at any time while the
breach continues.
17. Notices
Notices and all other communications provided for in this Agreement shall
be in writing and shall be delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid, or prepaid overnight
courier to the parties at the addresses set forth below (or such other addresses
as shall be specified by the parties by like notice):
If to the Company: Sprint Corporation
Attn: General Counsel
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
If to the Executive: Xxxxxxx X. Xxxxx
Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
(or to the latest address furnished by
Executive to Company for purposes of
general communications).
30
Each party, by written notice furnished to the other party, may modify the
applicable delivery address, but any notice of change of address shall be
effective only upon receipt. Such notices, demands, claims and other
communications shall be deemed given in the case of delivery by overnight
service with guaranteed next day delivery, the next day or the day designated
for delivery; or in the case of certified or registered U.S. mail, five days
after deposit in the U.S. mail, but in no event will any such communications be
deemed to be given later than the date they are actually received.
18. Survivorship
Upon the expiration or other termination of this Agreement, the respective
rights and obligations of the parties shall survive the expiration or other
termination to the extent necessary to carry out the intentions of the parties
under this Agreement. In particular, without limiting the generality of the
preceding sentence, any obligation of the Company to make payments or provide
services under Sections 3 and 26 shall continue beyond the end of the Employment
Term and the obligations and covenants of Executive set forth in Sections 3 and
24 shall continue beyond the Employment Term.
19. Entire Agreement
Except as otherwise noted herein, this Agreement constitutes the entire
agreement between the parties concerning the subject matter specifically
addressed herein and, except for the terms and provisions of any other employee
benefit or other compensation plans (or any agreements or awards thereunder)
referred to herein or contemplated hereby, this Agreement supersedes
(i) all prior and contemporaneous oral agreements, if any, between the parties
relating to the subject matter specifically addressed herein; and
(ii) each of the Prior Agreements.
20. Headings
The headings in this Agreement are for convenience of reference only and
will not affect the construction of any of its provisions.
21. Counterparts
This Agreement may be executed in separate counterparts, each of which is
deemed to be an original and all of which taken together constitute one and the
same agreement.
[SIGNATURE PAGE FOLLOWS]
31
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date set forth above.
"COMPANY"
SPRINT CORPORATION, a Kansas
corporation
By: /s/ J. Xxxxxxx Xxxxxx
Name: J. Xxxxxxx Xxxxxx
Title: Executive Vice President - General
Counsel and External Affairs
"SUMC"
SPRINT/UNITED MANAGEMENT
COMPANY, a Kansas corporation
By: /s/ J. Xxxxxxx Xxxxxx
Name: J. Xxxxxxx Xxxxxx
Title: Executive Vice President -
Legal/External Afffairs
"EXECUTIVE"
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
32
EXHIBIT A
BOARDS OF DIRECTORS OF FOR-PROFIT BUSINESSES
Sprint Corporation
Duke Energy Corporation
Exxon-Mobil Corporation
General Xxxxx, Inc.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of February 26, 2001
(the "Effective Date"), 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 the "Company"), and XXXXXX X. XXXXX (the
"Executive").
Recitals
1. Because the Company is mindful of the Executive's substantial contributions
to the Company and of his attractiveness in the competitive marketplace,
both within and outside of the telecommunications industry, it desires to
insure his continued employment with the Company until the time of his
retirement, it desires to encourage him to maintain and increase his
ownership of Company stock, and it desires to provide him appropriate
compensation arrangements that continue to motivate him to focus on and
increase shareholder value.
2. The Company and the Executive have previously entered into a Contingency
Employment Agreement, dated as of October 30, 1997, and amended as of June
30, 1999 (the "Contingency Employment Agreement").
3. The Company and the Executive have previously entered into an Agreement
Regarding Special Compensation and Post-Employment Restrictive Covenants,
dated as of October 30, 1997 (the "Severance Agreement," and together with
the Contingency Employment Agreement, the "Prior Agreements").
4. The Executive has been, and now is serving as the President and Chief
Operating Officer of Sprint.
5. The Company desires to secure the continued long-term employment of the
Executive.
6. In furtherance of the foregoing, the Company and the Executive desire to
amend, combine, and restate the Prior Agreements in the form of this
Agreement.
7. Certain capitalized terms used herein are defined in Section 30 of this
Agreement.
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 are mutually acknowledged by the parties, the
parties hereby agree as follows:
1
1. Employment and Termination
(a) Conditions of Employment
Subject to the terms of this Agreement, the Company hereby agrees to employ
the Executive as the President and Chief Operating Officer of Sprint, with such
authority, power, responsibilities, and duties customarily exercised by a person
holding such positions in a company of the size and nature of the Company.
(b) Performance of Duties
The Executive shall, during his employment with the Company, owe an
undivided duty of loyalty to the Company and agrees to use his best efforts to
promote and develop the business of the Company. The Executive agrees that
during his employment with the Company, he must devote his full business time,
energies and talents to serving as its President and Chief Operating Officer and
that he shall perform his duties faithfully and efficiently subject to the
directions of the Board of Directors of Sprint (the "Board"). Notwithstanding
the foregoing, the Executive may (i) serve as a director, trustee or officer or
otherwise participate in not-for-profit educational, welfare, social, religious
and civic organizations; (ii) serve as a director of any for-profit business
listed on Exhibit A hereto or, with the prior consent of the Board, serve as a
director of any for-profit business that is not a Competitor, and (iii) acquire
passive investment interests in one or more entities, to the extent that such
other activities do not inhibit or interfere with the performance of the
Executive's duties under this Agreement, or to the knowledge of the Executive
conflict in any material way with the business or policies of the Company.
(c) Term of Employment
The term of the Executive's employment under this Agreement (the
"Employment Term") begins on the Effective Date and ends on the Executive's 65th
birthday (the "End Date"). This Agreement sets forth certain terms of
Executive's employment during the Employment Term, the consequences of any
termination of employment during the Employment Term, and the terms of certain
restrictive covenants by the Executive during and after the Employment Term. The
Company and Executive agree that the employment relationship is at will, and
either party may terminate the employment relationship for any reason in
accordance with the procedures and with the consequences set forth in this
Agreement.
(d) Procedures for Termination
(A) General Procedures.
Except as set forth below, any purported termination of this Agreement or
of the Executive's employment by the Company or by the Executive during the
Employment
2
Term, other than by Executive's death, shall be communicated by a written notice
of termination to the other party hereto delivered in accordance with Section 37
below indicating the specific termination provision in this Agreement relied
upon and setting forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under the provision so indicated. Any such
termination will be effective on the Termination Date.
(B) Cause Termination.
The Company may not terminate Executive's employment for Cause during the
Employment Term until it delivers to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire
membership of the Board, excluding Executive, at a meeting of the Board (after
reasonable notice to the Executive and an opportunity for the Executive,
together with his counsel, to be heard before the Board), finding that, in the
good faith opinion of the Board, the Executive is guilty of conduct constituting
Cause and specifying the particulars thereof in detail. The subject of
Executive's termination for Cause must be included in the agenda in the notice
of the meeting sent to members of the Board. Delivery of the resolution
constitutes notice of termination for Cause by the Company.
(C) Good Reason Termination.
Executive may terminate his employment for Good Reason during the
Employment Term only within the Change in Control Protected Period, except that
Executive may not give notice of termination for Good Reason during any period
in which the Executive is unable to substantially perform his duties with the
Company due to physical or mental illness. In order to effect a termination for
Good Reason, Executive must deliver a written notice to the Company that sets
forth the specific event or circumstance giving rise to Good Reason by reference
to one or more portions of the definition of Good Reason set forth in Section 30
of this Agreement.
(D) Constructive Discharge.
Executive may terminate his employment upon Constructive Discharge any time
during the Employment Term following written notice and an opportunity for the
Company to cure. In order to effect a termination for Constructive Discharge,
Executive must deliver a written notice to the Company within 60 days following
the event giving rise to Executive's claim for Constructive Discharge. The
notice must set forth the specific event or circumstance giving rise to
Constructive Discharge by reference to one or more portions of the definition of
Constructive Discharge set forth in Section 30 of this Agreement. If, within 30
days following notice from the Executive, the Company fully corrects the
circumstances giving rise to the Executive's claim for Constructive Discharge,
the Executive shall not be entitled to terminate his employment for Constructive
Discharge by reason of such event.
3
(e) Payment of Compensation Earned Through Termination Date.
Upon a termination of the Executive's employment hereunder for any reason,
the Executive or, in the event of his death, the Executive's estate, in addition
to any other payments or benefits to which the Executive may be entitled
hereunder, is entitled to the Executive's Base Salary prorated through the
Termination Date, any payment under the Incentive Plans for Performance Periods
ending before the Termination Date, unless eliminated or reduced, and then only
to the extent that such payments are eliminated or reduced, for all Senior
Officers continuing employment with the Company, and any vacation pay for
vacation accrued by the Executive in the calendar year of termination but not
taken at the Termination Date. Except as otherwise provided herein, the Company
must pay any other employee benefits to which the Executive is entitled by
reason of his employment to the Executive or his estate at the time or times
required by the terms of the applicable Company plan or policy.
(f) Effect of Termination on Other Positions.
If, on the Termination Date, the Executive (i) is a member of the Board of
Sprint or any of its subsidiaries, (ii) serves on the board of directors of any
other corporation by nomination, appointment, or designation by the Company, or
(iii) holds any other position with Sprint or any of its subsidiaries, the
Executive shall, unless otherwise agreed to by the Board, be deemed to have
resigned from all such positions as of the Termination Date. Executive agrees to
execute such documents and take such other actions as the Company may request to
reflect such resignations.
2. Compensation
Subject to the terms of this Agreement, during the Employment Term, while
the Executive is employed by the Company, the Company will compensate him for
his services as follows:
(a) Base Salary.
The Executive shall receive an annual base salary in an amount not less
than his annual salary on the Effective Date, payable in monthly or more
frequent installments in accordance with the Company's payroll policies (such
annual base salary as adjusted pursuant to this Section 23(a) shall hereinafter
be referred to as the "Base Salary"). The Executive's Base Salary shall be
reviewed, and may be increased but not decreased below the rate in effect on the
Effective Date (other than across-the-board reductions similarly affecting all
Senior Officers), by the Board in a manner that is fair and pursuant to its
normal performance review policies for Senior Officers.
4
(b) Initial Option Grant
As of the Effective Date, the Company grants the Executive a non-qualified
stock option (the "PCS Option") under the Company's 1990 Stock Option Plan (the
"1990 Plan") to purchase 1,500,000 shares of PCS Common Stock, having a strike
price equal to the Fair Market Value (as defined in the 1990 Plan) of a share of
PCS Common Stock on the Effective Date. In addition, as of the Effective Date,
the Company grants the Executive a non-qualified stock option (the "FON Option"
and, together with the PCS Option, the "Options") under the 1990 Plan to
purchase 1,500,000 shares of FON Common Stock, at a strike price equal to the
Fair Market Value (as defined in the 1990 Plan) of a share of FON Common Stock
on the Effective Date. Subject to the Executive's continued employment with the
Company, the Options shall become exercisable in cumulative installments as
follows: (i) each Option shall become exercisable with respect to 20% of the
shares subject thereto on the fourth anniversary of the Effective Date, (ii)
each Option shall become exercisable with respect to an additional 30% of the
shares subject thereto on the fifth anniversary of the Effective Date, and (iii)
each Option shall become exercisable with respect to the remaining 50% of the
shares subject thereto on the sixth anniversary of the Effective Date. In
addition, the Options shall become exercisable in full (1) upon the Executive's
termination of his employment by reason of a Resignation for Non-Succession, (2)
upon the Company's termination of the Executive's employment without Cause, but
only if the Board's decision to terminate the Executive's employment without
Cause was voted against by at least two of the Board's non-employee directors,
(3) upon a Change in Control on or after the first anniversary of the Effective
Date, and (4) under Section 7.01(i)(1) of the 1990 Plan upon the Executive's
Death or Total Disability (as those terms are defined in the 1990 Plan), but
shall not become exercisable pursuant to Section 7.01(i)(2) of the 1990 Plan
upon Executive's Normal Retirement (as defined in the 1990 Plan). The Options
shall otherwise have the standard terms set forth in the 1990 Plan and shall be
subject to the 1990 Plan, except that, for purposes of the Options, (A) the
terms "Change in Control" and "Termination Date" (except as provided in Section
26(b)) shall have the meanings set forth in this Agreement rather than the
meanings set forth in the 1990 Plan, and (B) the Executive need not make the
agreement required by Section 7.01(m) of the 1990 Plan to remain employed by the
Company for one year from the Effective Date.
(c) Subsequent Option Grants
The grants of the Options are in lieu of annual executive stock option
grants under the Option Plans to the Executive for the years 2002 and 2003, and,
unless otherwise determined by the Committee, the Executive will not be
considered for or entitled to option grants under the Option Plans in those
years. Option grants to the Executive for years subsequent to 2003 shall be
reviewed by the Board in a manner that is fair and pursuant to its normal
performance review policies for option grants to Senior Officers.
5
(d) Incentive Payments.
The Executive will continue to participate in the Incentive Plans, subject
to the terms and conditions of the Incentive Plans as they may from time to time
be established, amended, or terminated in accordance with the Company's plans or
policies governing such benefits to the Company's Senior Officers generally. The
Executive's Targeted Compensation under the Incentive Plans shall be reviewed,
and may be increased but not decreased below his highest Targeted Compensation
in effect in 2001 (other than across-the-board reductions similarly affecting
all Senior Officers), by the Board in a manner that is fair and pursuant to its
normal performance review policies for Senior Officers.
(e) Employee Benefits, Fringe Benefits and Perquisites.
The Company will provide the Executive with employee benefits, fringe
benefits, and perquisites (including, without limitation, miscellaneous
services, life, disability, medical and dental insurance coverages, and
participation in the Company's Executive Deferred Compensation Plan, Key
Management Benefit Plan, Savings Plan, and the Pension Plan) that are no less
favorable in the aggregate to the Executive than those provided to him as of the
Effective Date, subject to amendment, modification or termination in accordance
with the Company's plans or policies governing such benefits to Senior Officers
generally.
(f) Expense Reimbursement.
The Company will reimburse the Executive for reasonable expenses incurred
and accounted for in accordance with the policies and procedures of the Company
for Senior Officers generally, as they may from time to time be established,
amended, or terminated.
(g) Standby Loan Arrangement.
The Board will consider in good faith and in a reasonable manner the
Executive's request from time to time for the Company to facilitate or make a
loan (in either case, the "Loan Arrangement") to enable the Executive (i) to
retain ownership of Sprint stock, (ii) to acquire, through option exercise or
otherwise, Sprint stock, (iii) to pay taxes associated with the retaining
ownership of Sprint stock, or (iv) to pay taxes associated the acquisition of
Sprint stock. It is the current intent of the Board to view favorably the
Executive's request for a Loan Arrangement, though the parties acknowledge that
any action taken by the Board must be consistent with the Board's view of its
fiduciary duties and must be based on its determination that the action is in
the best interests of the Company and its shareholders.
Any loan to the Executive, if made by the Company, shall bear interest at
the Applicable Federal Rate or such other rate that at the time is appropriate,
giving
6
consideration to any expense to the Company and any imputed income to the
Executive, and all other terms and conditions of the Loan Arrangement shall be
approved by the Board in its discretion, based on its good faith consideration
of the factors relevant to the fulfillment of the Board's fiduciary duties, such
as:
(i) the amount necessary to enable the Executive to increase or retain all or
a significant portion of his stock holdings in the Company,
(ii) the likely impact of the Executive's sale of his Company stock on the
market price of such stock,
(iii) the Executive's borrowing capacity,
(iv) the collateral given by the Executive to secure the Loan,
(v) the terms of comparable loans to executives of other companies,
(vi) the market price of the Company's stock and the value of the Executive's
stock holdings in the Company,
(vii) the short-term and long-term cash flow needs of the Executive, and
(viii) the potential accounting and tax consequences of the Loan Arrangement to
the Company.
(h) Supplemental Retirement Benefits.
The Company acknowledges that the Executive has previously been credited
with 13 years of service as a Mid-Career Pension Enhancement under the
Company's Supplemental Executive Retirement Plan ("SERP"). The pension benefit
determined under the SERP shall be offset by the pension benefit determined
under the Pension Plan. It is further agreed that the terms of the Pension Plan
and the terms of the SERP, including any amendments hereafter adopted for said
plans, shall be deemed to be incorporated by reference in this Agreement except
to the extent any provisions in the plans would be inconsistent with the
specific terms of this Agreement.
(i) Elimination of Section 280G Limitations.
If during the Employment Term, a Change in Control or other change in the
equity structure of the Company occurs that would result in the acceleration of
benefits under the Company's stock option plans, restricted stock plans or other
benefit plans of the Company, except for the fact that such plans or agreements
under such plans limit acceleration to amounts deductible by the Company under
Code Section 280G (or any successor provision), then such limitations shall not
apply to the Executive.
7
3. Executive Covenants
(a) Principles of Business Conduct.
The Executive shall adhere in all respects to the Company's Principles of
Business Conduct (or any successor code of conduct) as in effect on the
Effective Date and as they may from time to time be established, amended, or
terminated.
(b) Proprietary Information.
The Executive acknowledges that during the course of his employment he has
learned or will learn or develop Proprietary Information. The Executive further
acknowledges that unauthorized disclosure or use of such Proprietary
Information, other than in discharge of the Executive's duties, will cause the
Company irreparable harm. Except in the course of his employment with the
Company under this Agreement, in the pursuit of the business of the Company, or
as otherwise required in employment with the Company, the Executive 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 the Executive has any questions about whether particular
information is Proprietary Information he shall consult with the Company's
General Counsel.
The Executive also agrees to promptly disclose to the Company any
information, ideas, or inventions made or conceived by him that result from or
are suggested by services performed by him for the Company under this Agreement,
and to assign to the Company all rights pertaining to such information, ideas,
or inventions. Knowledge or information of any kind disclosed by the Executive
to the Company shall be deemed to have been disclosed without obligation on the
part of the Company to hold the same in confidence, and the Company shall have
the full right to use and disclose such knowledge and information without
compensation to the Executive beyond that specifically provided in this
Agreement.
(c) Non-Competition.
During the Executive's employment with the Company and during the Non-
Compete Period, Executive shall not engage in Competitive Employment, whether
paid or unpaid and whether as a consultant, employee, or otherwise. If the
Executive ceases to be employed by the Company because of the sale, spin-off,
divestiture, or other disposition by the Company of a subsidiary, division, or
other divested unit employing the Executive, this provision shall continue to
apply during the Non-Compete Period, except that the Executive's continued
employment for the subsidiary, division, or other divested unit disposed of by
the Company shall not be deemed a violation of this provision. The Executive
agrees that because of the worldwide nature of the Company's business, breach of
this Agreement by accepting Competitive Employment
8
would irreparably injure the Company and that, therefore, a limited geographic
restriction is neither feasible nor appropriate to protect the Company's
interests.
(d) Inducement of Employees, Customers and Others.
During the Executive's employment with the Company and during the Non-
Compete Period, Executive may not directly or indirectly solicit, induce, or
encourage any employee, consultant, agent, customer, vendor, or other parties
doing business with the Company to terminate their employment, agency, or other
relationship with the Company or to render services for or transfer business to
any Competitor, and the Executive shall not initiate discussion with any such
person for any such purpose or authorize or knowingly cooperate with the taking
of any such actions by any other individual or entity on behalf of the
Competitor.
(e) No Adverse Actions.
During the Non-Compete Period, the Executive shall not, without the prior
written consent of the Company, in any manner, solicit, request, advise, or
assist any other person or entity to (a) undertake any action that would be
reasonably likely to, or is intended to, result in a Change in Control, or (b)
seek to control in any material manner the Board.
(f) Return of Property.
The Executive shall, upon his Termination Date, return to the Company all
property of the Company in his possession, including all notes, reports,
sketches, plans, published memoranda or other documents, whether in hard copy or
in electronic form, created, developed, generated, received, or held by the
Executive during his employment, concerning or related to the Company's
business, whether containing or relating to Proprietary Information or not. The
Executive 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 the
Company's premises without the Company's written consent.
(g) Mutual Nondisparagement.
The Executive agrees to refrain from making any statements about the
Company or its officers or directors that would disparage, or reflect
unfavorably upon the image or reputation of the Company or any such officer or
director. The Company agrees to refrain from making any statements about the
Executive that would disparage, or reflect unfavorably upon the image or
reputation of the Executive.
9
(h) Assistance with Claims.
Executive agrees that, consistent with the Executive's business and
personal affairs, during and after his employment by the Company, he will assist
the Company in the defense of any claims or potential claims that may be made or
threatened to be made against it in any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (a "Proceeding") and will
assist the Company in the prosecution of any claims that may be made by the
Company in any Proceeding, to the extent that such claims may relate to the
Executive's services provided under this Agreement. Executive agrees, unless
precluded by law, to promptly inform the Company if Executive is asked to
participate (or otherwise become involved) in any Proceeding involving such
claims or potential claims. Executive also agrees, unless precluded by law, to
promptly inform the Company if Executive is asked to assist in any investigation
(whether governmental or private) of the Company (or its actions), regardless of
whether a lawsuit has then been filed against the Company with respect to such
investigation. The Company agrees to reimburse Executive for all of Executive's
reasonable out-of-pocket expenses associated with such assistance, including
travel expenses and any attorneys' fees and shall pay a reasonable per diem fee
(equal to 1/250th of his Base Salary rate at his Termination Date) for
Executive's services.
(i) Key Man Life Insurance.
The Company may, at its discretion, purchase for its own benefit and at its
own expense, key man life insurance on the life of the Executive to cover the
repayment of any unpaid loan balances at the Executive's death, and the
Executive shall not have any right, title or interest in or to such insurance.
The Executive agrees to cooperate with the life insurance company and the
Company in the insurance underwriting process, including a physical examination
and other tests necessary to secure coverage, and to sign all appropriate
applications and written forms as may be required by the insurance company.
4. MCI WorldCom Merger Not a Change in Control
Notwithstanding anything contained herein or in any of the Prior
Agreements, the Executive agrees that neither the approval by the Company's
stockholders of the proposed merger of the Company with MCI WorldCom, Inc.,
pursuant to the Agreement and Plan of Merger, dated October 4, 1999, as amended
and restated as of March 8, 2000 (the "Proposed Merger"), which Proposed Merger
was terminated by the Company and MCI WorldCom, Inc., on July 13, 2000, nor any
other action or event that occurred in connection with the Proposed Merger may
form the basis for any claim or benefit arising from the Prior Agreements not
made by or provided to Executive before the Effective Date. The Executive hereby
represents and warrants that he has not made (or caused to be made) such a claim
or taken (or caused to be taken) any action which would result in such a claim
or the provision of such benefit. In addition, the Executive agrees that neither
the approval by the Company's stockholders of the
10
Proposed Merger nor any other action or event that occurred in connection with
the Proposed Merger may form the basis for any claim or benefit arising from
this Agreement. The Executive hereby represents and warrants that he will not
make (or cause to be made) such a claim or take (or cause to be taken) any
action which would result in such a claim or the provision of such benefit. This
Agreement supersedes the Prior Agreements, which as of the Effective Date, are
null and void.
5. Payments on Certain Terminations
(a) Payments on Certain Terminations Not in Connection with Change in Control
If, during the Employment Term but not within the Change in Control
Protected Period, (a) the Company terminates Executive's employment with the
Company for any reason other than (x) Cause or (y) Executive's Total Disability
or (b) the Executive terminates his employment with the Company upon
Constructive Discharge or Resignation for Non-Succession, then the Executive
shall, subject to the other provisions of this Section 26, be entitled to the
following payments and benefits (the "Non-Change in Control Benefits") in lieu
of any payments or benefits available under any and all Company separation plans
or policies:
(i) The Company will pay Executive his Base Salary, in equal installments in
arrears and on the same schedule as paid before his Termination Date, for a
period (the "Non-Change in Control Severance Period") commencing on the
Termination Date and ending on the earlier to occur of (A) the eighteen
(18) month anniversary of the Termination Date (or, if the Executive
terminates his employment by reason of a Resignation for Non-Succession,
the twelve (12) month anniversary of the Termination Date or the date on
which the Executive becomes re-employed, whichever occurs first), or (B)
the End Date, at the rate in effect on his Termination Date;
(ii) For the Performance Period in which the Termination Date occurs, the
Company will pay the Executive, at the time when payouts are made for that
Performance Period under the Short-Term Incentive Plan, an amount equal to
the Termination Period Incentive Payout. In addition, the Company will pay
Executive an amount equal to 1/12th (adjusted appropriately if the
Performance Period in which the Termination Date occurs is other than a 12-
month period) of the Termination Period Incentive Payout at the end of each
month that (1) follows the Performance Period in which the Termination Date
occurs and (2) ends with or within the Non-Change in Control Severance
Period. In determining the number of months, for purposes of this clause
(ii), both the Termination Date and the end of the Non-Change in Control
Severance Period will be rounded to the nearest month boundary by rounding
to the beginning of the month if the date falls on or before the 15th of
the month and to the beginning of the following month if the date falls
after the 15th of the month. Any stock options granted in lieu of Targeted
Compensation under the Short-
11
Term Incentive Plan will continue to vest during the Non-Change in Control
Severance Period;
(iii)(A) For Performance Periods in which the Termination Date occurs and in
which the Long-Term Incentive Plan awards are to be measured in cash, the
Company will pay the award with respect to each Performance Period at the
time payment would be made under the plan for the Performance Period,
without regard to any participation requirement, and, with respect to each
Performance Period, will pay an amount equal to the Termination Period
Incentive Payout; (B) for Performance Periods in which the Termination Date
occurs and in which the Long-Term Incentive Plan awards are to be measured
in stock options, the options granted with respect to each Performance
Period will continue to vest during the Non-Change in Control Severance
Period;
(iv) During the Non-Change in Control Severance Period, the Company will provide
any executive medical, dental, life, and qualified or nonqualified
retirement benefits that the Executive was receiving or was entitled to
receive as of the Termination Date, except that long term-disability and
short-term disability benefits shall cease on the Executive's last day
worked as an employee of the Company, but if the Executive becomes employed
full-time during the Non-Change in Control Severance Period, the
Executive's entitlement to continuation of these benefits shall immediately
cease, except that the Executive shall retain any rights to continue
coverage under the COBRA continuation provisions of the Company's welfare
benefit plans by paying the applicable premium therefor;
(v) During the Non-Change in Control Severance Period, the Company will pay
outplacement counseling by a firm selected by the Company to continue until
such time as Executive becomes re-employed; and
(vi) During the Non-Change in Control Severance Period, the Company will provide
Executive with all applicable executive perquisites that the Executive was
receiving or was entitled to receive on the Termination Date (including
automobile allowance, communications services and all miscellaneous
services) other than country club membership dues and accrual of vacation.
In all events, the Executive's right to receive the Non-Change in Control
Benefits shall cease immediately if the Executive is re-employed by the Company
or an affiliate of the Company or if the Executive breaches the Restrictive
Covenants. In all cases, the Company's rights under Section 29(a) shall
continue.
(b) Payments on Certain Terminations in Connection with a Change in Control
If a Change in Control occurs during the Employment Term and, within the
Change in Control Protected Period, the Executive's employment with the Company
is
12
terminated (a) by the Company for any reason other than (x) Cause or (y)
Executive's Total Disability, or (b) by the Executive for Good Reason, the
Executive shall be entitled to the following payments and benefits (the "Change
in Control Benefits") in lieu of any payments or benefits available under
Section 26(a) above or under any and all Company separation plans or policies:
(i) In lieu of any further salary payments to the Executive for periods after
the Termination Date, the Company will pay to the Executive monthly (for
a period (the "Change in Control Severance Period") commencing on the
Termination Date and ending on the earlier to occur of (A) the thirty-
five (35) month anniversary of the Termination Date or (B) the End Date)
a payment equal to the Executive's highest monthly Base Salary (without
regard to any deferred amounts) paid during the 36-month period ending on
the Termination Date;
(ii) In lieu of any payments under, and notwithstanding any provisions of the
Incentive Plans, the Company shall pay to the Executive an amount (the
"Maximum Payout Amount") up to three times the sum of (1) the highest
short-term incentive payment (without regard to any deferred amounts and
without regard to any amounts with respect to which Executive elected to
purchase options under the Management Incentive Stock Option Plan) and
(2) the highest long-term incentive payment received by the Executive
under the Incentive Plans with respect to the three Performance Periods
ending most recently on or before the Termination Date. The payments will
be made in up to three installments on the first day of the 13th, 25th,
and 35th month following the Termination Date, and each installment shall
be one-third of the Maximum Payout Amount, or a lesser amount until the
cumulative amount of all payments is equal to the Maximum Payout Amount
times a fraction, the numerator of which is the number of months in the
Change in Control Severance Period and the denominator of which is 36.
For purposes of the foregoing, payments under the Long-Term Incentive
Plan for Performance Periods with respect to which payments were not made
in cash, but in vesting of stock options, the "payment" will be deemed to
be equal to the Executive's Targeted Compensation for that Performance
Period multiplied by the Performance Period Stock Appreciation for that
Performance Period. Any stock options granted with respect to Performance
Periods under the Long-Term Incentive Plan beginning before the
Termination Date will continue to vest during the Change in Control
Severance Period;
(iii) For purposes of the Company's Executive Deferred Compensation Plan,
notwithstanding any provision to the contrary in such plan, the rate at
which interest shall be credited to the Executive's Deferred Compensation
Account A and AA (as defined in such plan) shall be equal to the maximum
interest rate allowed for the account under such plan if and as amended;
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(iv) For purposes of the Company's Key Management Benefit Plan, even if the
Executive is not 60 years of age on the Termination Date, the Executive
shall be deemed to have remained a Key Executive (as defined in such
plan) until age 60;
(v) Notwithstanding anything in the Company Savings Plan, the Executive shall
be entitled to receive a cash payment in an amount equal to the value of
the nonvested portion of his Company Contribution Account (as defined in
such plan) as of the Termination Date;
(vi) In addition to the retirement benefits to which the Executive is entitled
under the Sprint Retirement Pension Plan (the "Pension Plan") or any
successor plans thereto, (1) the Executive shall be credited with three
years of additional service at the Executive's highest annual
compensation rate during the term of the Contingency Employment Agreement
or the Employment Term for purposes of determining the amount of the
Executive's pension, (2) the Executive shall, at the time of the
Executive's retirement, receive the life and medical post-retirement
benefits that would be due to a retiree under the Pension Plan, (3) for
purposes of the Executive's supplemental retirement benefits under
Section 2(h) of this Agreement, the Executive shall be credited as of the
Termination Date with the maximum number of years of service at the
Executive's highest annual compensation rate during the term of the
Contingency Employment Agreement or the Employment Term potentially
available to the Executive under the SERP as modified by Section 2(h);
and (4) if the Executive takes early retirement, the Company shall
supplement, the Executive's pension so that the Executive is,
notwithstanding the Pension Plan early retirement provisions, not subject
to any early retirement pension reduction;
(vii) During the Change in Control Severance Period, the Company will arrange
to provide the Executive with or reimburse the Executive for life,
disability, medical and dental insurance coverages substantially similar
to and at the same cost to the Executive as the cost to the Senior
Officers during such period, but the coverages shall cease immediately if
the Executive obtains subsequent employment;
(viii) During the Change in Control Severance Period, the Company will pay
outplacement counseling by a firm selected by the Company to continue
until such time as Executive becomes re-employed; and
(ix) The Options shall continue to vest during the Change in Control Severance
Period and the last day of the Change in Control Severance Period shall
be the Termination Date for purposes of the 1990 Plan.
In all events, the Executive's right to receive the Change in Control
Benefits shall cease immediately if the Executive is re-employed by the Company
or an affiliate
14
of the Company or if the Executive breaches the Restrictive Covenants. In all
cases, the Company's rights under Section 29(a) shall continue.
(c) Other Provisions Regarding Payments and Benefits
(A) No Mitigation; No Offset.
In the event of any termination of employment resulting in payments under
this Section 26, the Executive need not seek other employment and, except as
expressly provided herein, there shall be no offset against amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that he may obtain. The payments and benefits provided
for hereunder shall be in full settlement and satisfaction of all of Executive's
claims and demands relating to or arising out of his employment with the Company
or the termination thereof, and the Company's obligation to provide such
payments and benefits is expressly made subject to and conditioned upon (i) the
Executive's execution, within forty-five (45) days after the Termination Date,
of a release of such claims and demands in such form as the Company may
reasonably determine and (ii) the Executive's non-revocation of such release in
accordance with the terms thereof.
(B) Nature of Payments.
Any amounts due under this Section 26 are in the nature of severance
payments considered to be reasonable by the parties and are not in the nature of
a penalty.
(C) Benefit Plans.
If, for any period during which the Executive is entitled to continued
benefits under this Section 26, the Company reasonably determines that the
Executive cannot participate in any benefit plan because he is not actively
performing services for the Company, then, in lieu of providing benefits under
any such plan, the Company shall provide comparable benefits or the cash
equivalent of the cost thereof (after taking into account incremental payroll
and income tax consequences thereof to the Executive and the Executive's
dependents as the case may be) to the Executive and, if applicable, the
Executive's dependents through other arrangements.
(D) Other Severance Arrangements.
Except as may be otherwise specifically provided in an amendment of this
Section 26(c)(D) adopted in accordance with this Agreement, the Executive's
rights under Section 26 shall be in lieu of any benefits that may be otherwise
payable to or on behalf of the Executive pursuant to the terms of any severance
pay arrangement of the Company or any other similar arrangement of the Company
providing benefits upon termination of employment.
(E) Time of Payments.
If the amount of any payment provided for in Section 26(b) cannot be
calculated on or before the date on which such payment is due, the Company shall
pay to the Executive on such day an estimate, as calculated in good faith by the
Company, of the
15
minimum amount of such payment and shall pay the remainder of such payments when
calculable.
6. Tax Reimbursement
If the benefits provided under this Agreement together with other benefits,
if any, the Executive receives from the Company constitute "excess parachute
payments," (the "Affected Benefits") as defined in Section 280G of the Code, the
Company shall pay the Executive an additional amount such that the net amount
retained by the Executive after payment of any excise tax that would be imposed
by Section 4999 of the Code (the "Excise Tax") and any federal, state and local
income tax, FICA tax and Excise Tax payable with respect to the payment provided
for in this Section 27, shall equal the amount the Affected Benefits would have
been in the absence of the Excise Tax. For the purpose of determining the amount
of the payment provided for in this Section 27, the Executive shall be deemed to
pay federal, state and local income taxes at the highest marginal rates in
effect as of the payment date and the calculation shall take into account, as
applicable, the deduction of any state, federal, or local income taxes.
7. Interest on Payments
If the Company fails to pay any amounts due to Executive under this
Agreement as they come due, the Company agrees to pay interest on such amounts
at the Applicable Federal Rate plus two percent (2%) per annum. If any payment
is in excess of the amount due, the excess shall constitute a loan by the
Company to the Executive, payable on the 90th day after demand by the Company,
together with interest at the Applicable Federal Rate.
8. Enforcement and Remedies
(a) Equitable Remedies
The Executive acknowledges that the Company would be irreparably injured by
a violation of Sections 24(b) through 24(e) (the "Restrictive Covenants") and he
agrees that the Company, in addition to any other remedies available to it for
any breach or threatened breach, shall be entitled to a preliminary or permanent
injunction, temporary restraining order, or other equivalent relief, restraining
the Executive from any actual or threatened breach of the Restrictive Covenants.
If a bond is required to be posted in order for the Company to secure an
injunction or other equitable remedy, the parties agree that said bond need not
be more than a nominal sum.
The Executive shall be entitled to seek specific performance of his right
to be paid amounts earned through the Termination Date pursuant to Section 22(e)
during the pendency of any dispute or controversy arising under or in connection
with this Agreement.
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(b) Resolution of Disputes
All disputes, claims, or controversies arising under or in connection with
this Agreement, other than those contemplated by Section 29(a) above, shall be
settled exclusively by binding arbitration administered by JAMS/Endispute in the
greater Kansas City area in accordance with the then existing JAMS/Endispute
Arbitration Rules and Procedures for Employment Disputes, except that the
parties agree that the arbitrator is not authorized or empowered to impose
punitive damages on either of the parties. If it is determined that any term or
other provision of this Agreement is invalid, illegal, or incapable of being
enforced, the arbitrator shall have the authority to modify the provision or
term to the minimum extent required to permit enforcement. In the event of such
an arbitration proceeding, the Administrator of JAMS/Endispute will appoint the
arbitrator.
(c) Attorney Fees
If either party seeks to enforce this Agreement and prevails on the merits,
the losing party agrees to pay to the prevailing party all reasonable legal fees
and expenses incurred by the prevailing party in seeking such enforcement. Such
payments shall be made within five (5) days after the prevailing party's request
for payment accompanied by such evidence of fees and expenses incurred as the
losing party reasonably may require.
9. Definitions
As used in the Agreement, the following terms shall have the meanings set forth
below.
(a) Actual Incentive Payout
"Actual Incentive Payout" means, with respect to a Performance Period, the
product of (1) the Performance Measure for the Performance Period and (2) the
Executive's Targeted Compensation for the Performance Period.
(b) Applicable Federal Rate
"Applicable Federal Rate" means the applicable Federal rate within the
meaning of Section 7872 of the Code.
(c) Capped Incentive Payout
"Capped Incentive Payout" means (i) with respect to a Performance Period
under the Short-Term Incentive Plan, the product of (1) the lesser of (a) 100%
and (b) the Performance Measure for the Performance Period and (2) the
Executive's Targeted Compensation for the Performance Period, and (ii) with
respect to a Performance Period under the Long-Term Incentive Plan, zero
dollars.
17
(d) Cause
Termination by the Company of the Executive's employment for "Cause" means
termination upon (A) the willful and continued failure by the Executive to
substantially perform his duties with the Company (other than any such failure
resulting from the Executive's incapacity due to physical or mental illness)
after a written demand for substantial performance is delivered to the Executive
by the Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed his duties, or (B)
the willful engaging by the Executive in conduct that is a serious violation of
the Company's Principles of Business Conduct, or (C) the willful engaging by the
Executive in conduct that is demonstrably and materially injurious to the
Company. For purposes of this definition, no act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive's action or omission was in the best interest of the Company. Failure
to meet performance expectations, unless willful, continuing, and substantial
shall not be considered "Cause."
(e) Change in Control
"Change in Control" means the occurrence of any of the following events:
(i) the acquisition, directly or indirectly, by any "person" or "group" (as
those terms are defined in Sections 3(a)(9), 13(d), and 14(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules
thereunder, including, without limitation, Rule 13d-5(b)) of "beneficial
ownership" (as determined pursuant to Rule 13d-3 under the Exchange Act) of
securities entitled to vote generally in the election of directors ("voting
securities") of Sprint that represent 30% or more of the combined voting
power of Sprint's then outstanding voting securities, other than
(A) an acquisition by a trustee or other fiduciary holding securities
under any employee benefit plan (or related trust) sponsored or
maintained by Sprint or any person controlled by Sprint or by any
employee benefit plan (or related trust) sponsored or maintained by
Sprint or any person controlled by Sprint, or
(B) an acquisition of voting securities by Sprint or a corporation owned,
directly or indirectly, by the stockholders of Sprint in substantially
the same proportions as their ownership of the stock of Sprint, or
(C) an acquisition of voting securities pursuant to a transaction
described in clause (iii) below that would not be a Change in Control
under clause (iii);
18
(ii) a change in the composition of the Board that causes less than a majority
of the directors of Sprint to be directors that meet one or more of the
following descriptions:
(A) a director who has been a director of Sprint for a continuous period
of at least 24 months, or
(B) a director whose election or nomination as director was approved by a
vote of at least two-thirds of the then directors described in clauses
(ii)(A), (B), or (C) by prior nomination or election, but excluding,
for the purpose of this subclause (B), any director whose initial
assumption of office occurred as a result of an actual or threatened
(y) election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person or group other than the Board or
(z) tender offer, merger, sale of substantially all of Sprint's
assets, consolidation, reorganization, or business combination that
would be a Change in Control under clause (iii) on consummation
thereof, or
(C) who were serving on the Board as a result of the consummation of a
transaction described in clause (iii) that would not be a Change in
Control under clause (iii);
(iii) the consummation by Sprint (whether directly involving Sprint or
indirectly involving Sprint through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination or (y) a
sale or other disposition of all or substantially all of Sprint's assets
or (z) the acquisition of assets or stock of another entity, in each case,
other than in a transaction
(A) that results in Sprint's voting securities outstanding immediately
before the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of Sprint or
the person that, as a result of the transaction, controls, directly or
indirectly, Sprint or owns, directly or indirectly, all or
substantially all of Sprint's assets or otherwise succeeds to the
business of Sprint (Sprint or such person, the "Successor Entity"))
directly or indirectly, at least 50% of the combined voting power of
the Successor Entity's outstanding voting securities immediately after
the transaction, and
(B) after which more than 50% of the members of the board of directors of
the Successor Entity were members of the Board at the time of the
Board's approval of the agreement providing for the transaction or
other action of the Board approving the transaction (or whose election
or nomination was approved by a vote of at least two-thirds of the
members who were members of the Board at that time), and
19
(C) after which no person or group beneficially owns voting securities
representing 30% or more of the combined voting power of the Successor
Entity; provided, however, no person or group shall be treated for
purposes of this clause (C) as beneficially owning 30% or more of
combined voting power of the Successor Entity solely as a result of
the voting power held in Sprint prior to the consummation of the
transaction; or
(iv) a liquidation or dissolution of Sprint.
For purposes of clarification, (x) a change in the voting power of Sprint
voting securities based on the relative trading values of Sprint's then
outstanding securities as determined pursuant to Sprint's Articles of
Incorporation or (y) an acquisition of Sprint securities by Sprint that, in
either case, by itself (or in combination only with the other event listed in
this sentence) causes the Sprint's voting securities beneficially owned by a
person or group to represent 30% or more of the combined voting power of
Sprint's then outstanding voting securities is not to be treated as an
"acquisition" by any person or group for purposes of clause (i) above. For
purposes of clause (i) above, Sprint makes the calculation of voting power as if
the date of the acquisition were a record date for a vote of Sprint's
shareholders, and for purposes of clause (iii) above, Sprint makes the
calculation of voting power as if the date of the consummation of the
transaction were a record date for a vote of Sprint's shareholders.
(f) Change in Control Protected Period
"Change in Control Protected Period" means the period commencing on the
date of a Change in Control and ending on the earlier to occur of (A) the three
year anniversary of the date of the Change in Control or (B) the day before the
End Date.
(g) Code
"Code" means the Internal Revenue Code of 1986, as amended, and references
to sections of the Code include any successor provision.
(h) Committee
"Committee" means the Organization, Compensation, and Nominating Committee
of the Board or any successor committee primarily responsible for executive
compensation.
(i) Competitive Employment
"Competitive Employment" means the performance of duties or
responsibilities, or the supervision of individuals performing such duties or
responsibilities, for a Competitor (i) that are of a similar nature or employ
similar professional or technical skills (for example, executive, managerial,
marketing, engineering, legal, etc.) to those
20
employed by the Executive in his performance of services for the Company at any
time during the two years before the Termination Date, (ii) that relate to
products or services that are competitive with the Company's products or
services with respect to which the Executive performed services for the Company
at any time during the two years before the Termination Date, or (iii) in the
performance of which Proprietary Information to which the Executive had access
at any time during the two-year period before the Termination Date could be of
substantial economic value to the Competitor.
(j) Competitor
Because of the highly competitive, evolving nature of the Company's
industry, the identities of companies in competition with the Company 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.
"Competitor" means any one or more of the following (i) any person or
entity (a "Person") doing business in the United States or any of its Divisions
employing the Executive if the Person or its Division receives at least 15% of
its gross operating revenues from providing communications services of any type
(for example, voice, data, including Internet, and video), employing any
transmission medium (for example, wireline, wireless, or any other technology),
over any distance (for example, local, long-distance, and distance insensitive
services), using any protocol (for example, circuit-switched, or packet-based,
such as Internet Protocol), or services or capabilities ancillary to such
communications services (for example, web hosting and network security
services); (ii) any Person doing business in the United States or its Division
employing the Executive if the Person or its Division receives at least 15% of
its gross operating revenue from a line of business in which the Company
receives at least 3% of its gross operating revenues; (iii) any Person doing
business in the United States, or its Division employing the Executive,
operating for less than 5 years a line of business from which the Company
derives at least 3% of its gross operating revenues, notwithstanding such
Person's or Division's lack of substantial revenues in such line of business;
and (iv) any Person doing business in the United States, or its Division
employing the Executive, if the Person or its Division receives at least 15% of
its gross operating revenue from a line of business in which the Company has
operated for less than 5 years, notwithstanding the Company's lack of
substantial revenues in such line of business.
For purposes of the foregoing, gross operating revenues of the Company and
such other Person shall be those of the Company or such Person, together with
their Consolidated Affiliates, but those of any Division employing or proposing
to employ the Executive shall be on a stand-alone basis, all measured by the
most recent available financial information of both the Company and such other
Person or Division at the time the Executive accepts, or proposes to accept,
employment with or to otherwise perform services for such Person. If financial
information is not publicly available or is
21
inadequate for purposes of applying this definition, the burden shall be on the
Executive to demonstrate that such Person is not a Competitor.
(k) Consolidated Affiliate
"Consolidated Affiliate" means, with respect to any person or entity, all
affiliates and subsidiaries of such person or entity, if any, with whom the
financial statements of such person or entity are required, under generally
accepted accounting principles, to be reported on a consolidated basis.
(l) Constructive Discharge
"Constructive Discharge" means the occurrence of any of the following
circumstances without the Executive's prior written consent unless the
circumstances are fully corrected before the Termination Date specified in the
notice of termination given in respect thereof: (1) the removal of the Executive
from his position with the Company or Board other than as a result of
Executive's being offered to a position of equal or superior scope and
responsibility; (2) a reduction within any 24-month period (other than an
across-the-board reduction similarly affecting all Senior Officers) of the
Executive's Targeted Total Compensation to an amount that is less than 90% of
the Executive's highest Targeted Total Compensation during the 24-month period;
or (3) the Company's requiring that the Executive be based anywhere other than
his present location or the Kansas City metropolitan area (or any other location
to which the Executive has consented to be relocated), except for required
travel on business to an extent substantially consistent with Executive's
business travel obligations as of the Effective Date.
(m) Division
"Division" means any distinct group or unit organized as a segment or
portion of a Person that is devoted to the production, provision, or management
of a common product or service or group of related products or services,
regardless of whether the group is organized as a legally distinct entity.
(n) FON Common Stock
"FON Common Stock" means the Company's FON Common Stock, Series 1, $2.00
par value per share.
(o) Good Reason
"Good Reason" means, without the Executive's express written consent, the
occurrence of any of the following circumstances unless such circumstances are
fully corrected prior to the Termination Date specified in the notice of
termination given in respect thereof:
22
(i) the assignment to the Executive of any duties inconsistent with the
Executive's status as President and Chief Operating Officer of Sprint or
a substantial adverse alteration in the nature or status of the
Executive's responsibilities or organizational reporting relationships
from those in effect immediately before the Change in Control or any
downgrading of the Executive's title or position from that in effect
immediately before the Change in Control;
(ii) a reduction by the Company in the Executive's Base Salary as in effect on
the Effective Date or as the same may be increased from time to time,
except for across-the-board salary reductions similarly affecting all
officers of the Company and all officers of any business entity or
entities in control of the Company;
(iii) the failure by the Company, without the Executive's consent, to pay to
the Executive any portion of the Executive's current compensation within
7 days of the date it is due, except pursuant to an across-the-board
compensation deferral similarly affecting all officers of the Company and
all officers of any business entity or entities in control of the
Company;
(iv) (A) the relocation of the Company's principal executive offices to a
location outside the metropolitan area in which such offices are located
immediately before the Change in Control; or (B) the Company's requiring
the Executive to be based anywhere other than the Company's principal
executive offices except for required travel on the Company's business to
an extent substantially consistent with the Executive's present business
travel obligations; or (C) the Company's requiring the Executive to
travel to an extent substantially inconsistent with the Executive's
present business travel obligations;
(v) a substantial adverse alteration in the physical conditions under or in
which the Executive is expected to perform the Executive's duties, other
than an alteration similarly affecting all officers of the Company and
all officers of any person in control of the Company;
(vi) the Company's failure to continue in effect any compensation plan in
which the Executive participated immediately before the Change in Control
and that is material to the Executive's total compensation, including but
not limited to the Incentive Plans or any substitute plans adopted before
the Change in Control, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to the
plan, or the Company's failure to continue the Executive's participation
therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits
provided and the level of the Executive's participation relative to other
Senior Officers, as existed at the time of the Change in Control;
23
(vii) the Company's failure to continue to provide the Executive with benefits
substantially similar in the aggregate to those he enjoyed under any of
the Company's plans, including but not limited to the Pension Plan, stock
option plans, savings plan, supplemental employee retirement agreement,
the Key Management Benefit Plan, the Executive Deferred Compensation
Plan, life insurance, medical, health and accident, or disability plans
in which the Executive was participating at the time of the Change in
Control; the taking of any action by the Company that would directly or
indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive at the
time of the Change in Control; or the failure by the Company to provide
the Executive with the number of paid vacation days to which the
Executive is entitled on the basis of years of service with the Company
in accordance with the Company's normal vacation policy in effect at the
time of the Change in Control; unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been made with respect
to such benefits;
(viii) the Company's failure to obtain a satisfactory agreement from any
successor to assume and agree to perform this Agreement, as contemplated
in Section 31 hereof; or
(ix) the Company's attempt to terminate the Executive's employment without
complying with the procedures set forth in Section 1(d); any such attempt
shall not be effective.
(p) Incentive Plans
"Incentive Plans" means the Long-Term Incentive Plan and the Short-Term
Incentive Plan.
(q) Long-Term Incentive Plan
"Long-Term Incentive Plan" means the Company's Long-Term Incentive Plan,
together with other incentive compensation plans specifically approved for this
purpose by the Committee.
(r) Non-Compete Period
"Non-Compete Period" means the 36-month period beginning on the
Termination Date. If the Executive 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.
24
(s) Option Plans
"Option Plans" means the 1990 Plan and Sprint's 1997 Long-Term Stock
Incentive Program.
(t) Performance Measure
"Performance Measure" means, with respect to any Performance Period, a
measure, expressed as a percentage, of the extent to which the performance goals
were achieved, as determined by the Committee, during the Performance Period.
(u) Performance Period
"Performance Period" means a period of time under the Short-Term Incentive
Plan or Long-Term Incentive Plan (1) for which the Committee establishes
performance goals for the Company's business units and authorizes payment of
incentive compensation based on a measure of the extent to which those goals
were achieved during the period or (2) with respect to which the Committee
grants employee stock options in lieu of such performance goals, the period
beginning on the first day of the year in which the options are granted and
ending on the first date on which the options become exercisable in full,
without regard to any acceleration of vesting.
(v) Performance Period Stock Appreciation
"Performance Period Stock Appreciation" means, with respect to any
Performance Period, 1.52 times the ratio of (1) the stock price on the last
trading day of the Performance Period to (2) the stock price on the first
trading day of the Performance Period. For this purpose, the stock price on any
day is (1) for days before November 24, 1998, the market price of the Company's
common stock, par value, $2.50 per share, on that day and (2) for days on or
after November 24, 1998, an amount equal to the sum of the market price of one
share of FON Common Stock and one-half the market price of one share of PCS
Common Stock on that day. The market price of a stock on any day is the average
of the high and low prices on that day. This definition shall be adjusted to
equitably reflect changes in Sprint's capital structure after the Effective
Date.
(w) PCS Common Stock
"PCS Common Stock" means the Company's PCS Common Stock, Series 1, $1.00
par value per share.
(x) Proprietary Information
"Proprietary Information" means trade secrets (such as customer
information, technical and non-technical data, a formula, pattern, compilation,
program, device,
25
method, technique, drawing, process) and other confidential and proprietary
information concerning the products, processes, or services of the Company or
the Company'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 the Company, 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 the Company or of any customer or supplier of the
Company, or (iii) has been identified to the Executive as confidential by the
Company, either orally or in writing.
(y) Resignation for Non-Succession
"Resignation for Non-Succession" means the Executive's resignation of his
employment with the Company within 60 days after (i) the election or other
designation by the Board of any person other than the Executive as successor to
Xxxxxxx X. Xxxxx'x position as the Chief Executive Officer of Sprint when Xx.
Xxxxx ceases to hold such position, or (ii) the failure by the Board to elect or
designate the Executive as the Chief Executive Officer of Sprint by May 1, 2005.
(z) Senior Officer
"Senior Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Securities Exchange Act of 1934, as amended (or any
successor statute or statutes thereto), and the rules and regulations
promulgated thereunder.
(aa) Short-Term Incentive Plan
"Short-Term Incentive Plan" means the Company's Management Incentive Plan,
together with other incentive compensation plans specifically approved for this
purpose by the Committee.
(bb) Targeted Compensation
"Targeted Compensation" means, (1) with respect to any Performance Period
in which the award is measured in cash, the amount established by the Committee
that would be the payout under the Short-Term Incentive Plan or the Long-Term
Incentive Plan, as the case may be, if the Performance Measure for the
Performance Period were 100% and (2) with respect to any Performance Period in
which the award is measured in stock options, the dollar amount on which the
number of options to grant was based.
26
(cc) Targeted Total Compensation
"Targeted Total Compensation" means, as of any time, the sum of the
Executive's (1) Base Salary, (2) Targeted Compensation for the Short-Term
Incentive Plan, (3) Targeted Compensation for the Long-Term Incentive Plan, and
(4) targeted value of his annual stock option award (ignoring the value of the
Options granted pursuant to Section 2(b) of this Agreement and options granted
before the Effective Date) as adopted by the Committee.
(dd) Termination Date
"Termination Date" means (i) in the case of a termination of the
Executive's employment by reason of the Executive's death, the Executive's date
of death, (ii) in the case of a termination of the Executive's employment by
reason of a Constructive Discharge, the date which is thirty (30) days after the
notice of termination is given, and (iii) in all other cases, the date of any
notice of termination or the date, if any, on which the notice declares itself
to be effective (but in no event later than the 60th day after the date on which
such notice is given).
(ee) Termination Period Incentive Payout
"Termination Period Incentive Payout" means an amount equal to the weighted
average of (1) the Actual Incentive Payout for the Performance Period in which
the Termination Date occurs and (2) the Capped Incentive Payout for the
Performance Period in which the Termination Date occurs. The weights in the
weighted average will be for the amount in clause (1), the number of months in
the Performance Period occurring before the Termination Date, and, for clause
(2), the number of months in the Performance Period occurring after the
Termination Date, in each case divided by the number of months in the
Performance Period. In determining the number of months, the Termination Date
will be rounded to the nearest month, rounding to the beginning of the month if
the Termination Date falls on or before the 15th of the month and to the
beginning of the following month if the Termination Date falls after the 15th of
the month.
10. Assignability, Binding Nature
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, heirs (in the case of the Executive),
and assigns. No rights or obligations of the Company under this Agreement may be
assigned or transferred by the Company except that such rights or obligations
may be assigned or transferred to any subsidiary of Sprint or pursuant to a
merger or consolidation in which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the
Company, but only if the assignee or transferee becomes the successor to all or
substantially all of the assets of the Company and assumes the liabilities,
obligations, and duties of the Company, as contained in this Agreement, either
27
contractually or as a matter of law. The Company further agrees that, in the
event of a sale of assets or liquidation as described in the preceding sentence,
it will take whatever action it legally can in order to cause the assignee or
transferee to expressly assume the liabilities, obligations, and duties of the
Company hereunder. No rights or obligations of the Executive under this
Agreement may be assigned or transferred by the Executive other than his rights
to compensation and benefits, which may be transferred only in connection with
the Executive's estate planning objectives or by will or operation of law.
11. Amendment
This Agreement may be amended, modified, or canceled only by mutual
agreement of the parties in writing.
12. Applicable Law
The provisions of this Agreement shall be construed in accordance with the
internal laws of the State of Kansas, without regard to the conflict of law
provisions of any state.
13. Tax Withholding
All payments made pursuant to this Agreement shall be subject to applicable
federal and state income and to other withholding taxes.
14. Severability
The various provisions of this Agreement are intended to be severable and
to constitute independent and distinct binding obligations. If any provision of
this Agreement is determined to be invalid, illegal, or incapable of being
enforced, in whole or in part, it shall not affect or impair the validity of any
other provision or part of this Agreement, and the provision or part shall be
deemed modified to the minimum extent required to permit enforcement. Upon such
a determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the court or arbitrator, as applicable, shall have
the authority to so modify the provision or term. If such provision or term is
not modified by the court or arbitrator, the parties must negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
provisions of this Agreement are preserved to the greatest extent possible.
15. Waiver of Breach
No waiver by any party hereto of a breach of any provision of this
Agreement by any other party, or of compliance with any condition or provision
of this Agreement to be performed by such other party, will operate or be
construed as a waiver of any
28
subsequent breach by the other party of any similar or dissimilar provisions and
conditions at the same or any prior or subsequent time. The failure of either
party to take any action by reason of such breach will not deprive the party of
the right to take action at any time while the breach continues.
16. Notices
Notices and all other communications provided for in this Agreement shall
be in writing and shall be delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid, or prepaid overnight
courier to the parties at the addresses set forth below (or such other addresses
as shall be specified by the parties by like notice):
If to the Company: Sprint Corporation
Attn: General Counsel
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
If to the Executive: Xxxxxx X. XxXxx
Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
(or to the latest address furnished by
Executive to Company for purposes of
general communications).
Each party, by written notice furnished to the other party, may modify the
applicable delivery address, but any notice of change of address shall be
effective only upon receipt. Such notices, demands, claims and other
communications shall be deemed given in the case of delivery by overnight
service with guaranteed next day delivery, the next day or the day designated
for delivery; or in the case of certified or registered U.S. mail, five days
after deposit in the U.S. mail, but in no event will any such communications be
deemed to be given later than the date they are actually received.
17. Survivorship
Upon the expiration or other termination of this Agreement, the respective
rights and obligations of the parties shall survive the expiration or other
termination to the extent necessary to carry out the intentions of the parties
under this Agreement. In particular, without limiting the generality of the
preceding sentence, any obligation of the Company to make payments or provide
services under Section 26 shall continue beyond the end of the Employment Term
and the obligations and covenants of Executive set forth in Section 24 shall
continue beyond the Employment Term.
29
18. Entire Agreement
Except as otherwise noted herein, this Agreement constitutes the entire
agreement between the parties concerning the subject matter specifically
addressed herein and, except for the terms and provisions of any other employee
benefit or other compensation plans (or any agreements or awards thereunder)
referred to herein or contemplated hereby, this Agreement supersedes
(i) all prior and contemporaneous oral agreements, if any, between the
parties relating to the subject matter specifically addressed herein;
and
(ii) each of the Prior Agreements.
19. Headings
The headings in this Agreement are for convenience of reference only and
will not affect the construction of any of its provisions.
20. Counterparts
This Agreement may be executed in separate counterparts, each of which is
deemed to be an original and all of which taken together constitute one and the
same agreement.
[SIGNATURE PAGE FOLLOWS]
30
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date set forth above.
"COMPANY"
SPRINT CORPORATION, a Kansas
corporation
By: /s/ J. Xxxxxxx Xxxxxx
Name: J. Xxxxxxx Xxxxxx
Title: Executive Vice President - General
Counsel and External Affairs
"SUMC"
SPRINT/UNITED MANAGEMENT
COMPANY, a Kansas corporation
By: /s/ J. Xxxxxxx Xxxxxx
Name: J. Xxxxxxx Xxxxxx
Title: Executive Vice President -
Legal/External Affairs
"EXECUTIVE"
/s/ Xxxxxx X. XxXxx
Xxxxxx X. XxXxx
31
EXHIBIT A
BOARDS OF DIRECTORS OF FOR-PROFIT BUSINESSES
Sprint Corporation
Allstate Corp.
Ceridian Corp.
Imation Corp.
Xxxxxxxxxxxxxx.xxx
