EXHIBIT 10.3
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT (this "First Amendment")
by and between Nextel Communications, Inc., a Delaware corporation (the
"Company") and Xxxxx X. Xxxx (the "Executive"), effective as of April 1, 2004,
is made and entered into as of July 25, 2006 (the "Revised Effective Date").
WITNESSETH:
WHEREAS, the Executive and the Company entered into an Employment Agreement
dated as of April 1, 2004 (the "Original Agreement");
WHEREAS, under the terms of that certain Agreement and Plan of Merger
entered into December 15, 2004 (the "Merger Agreement"), the Company merged with
and into a subsidiary of Sprint Corporation (the "Merger"), and as of the
Effective Time, Sprint Corporation became known as Sprint Nextel Corporation
("Sprint Nextel");
WHEREAS, the Merger constituted a Change of Control for purposes of the
Company's Change of Control Retention Bonus and Severance Pay Plan ("Change of
Control Plan") and Amended and Restated Incentive Equity Plan ("Incentive Equity
Plan");
WHEREAS, pursuant to the terms of the Change of Control Plan, the Executive
is eligible to terminate employment for Good Reason (as defined in the Change of
Control Plan) during the Severance Period (as defined in the Change of Control
Plan);
WHEREAS, the Executive agrees to continue to be employed and the Company
agrees to continue to employ the Executive pursuant to the terms of the Original
Agreement, as amended by this First Amendment;
WHEREAS, the Company and the Executive agree that for purposes of the
Change of Control Plan, the Executive's Severance Period shall be extended until
February 28, 2007 and for purposes of the Incentive Equity Plan, the Executive's
Accelerated Vesting Period (as defined in the Incentive Equity Plan) shall be
extended until February 28, 2007;
WHEREAS, the Company and the Executive agree that the Executive's right to
terminate his employment with the Company for Good Reason under Section 3(h)
(iii) of the Change of Control Plan and Section 2(v)(iii) of the Incentive
Equity Plan shall be extended until February 28, 2007; and
WHEREAS, pursuant to Section 26 of the Original Agreement, the Company and
the Executive wish to amend the Original Agreement, effective as of the Revised
Effective Date, as set forth herein.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements set forth herein, the Company and the Executive agree as follows:
I.
Effective as of the Revised Effective Date, pursuant to Section 26 of the
Original Agreement, the Executive and the Company agree to amend the Original
Agreement as provided below.
II.
Section 3(a) is hereby amended and restated in its entirety as follows:
The Executive shall continue to serve as the Chief Technology Officer
of Sprint Nextel, or in such other capacity to which Executive may be
appointed, until the expiration of the Employment Term. The Executive
shall perform such duties as may be assigned to the Executive from
time to time by the Chief Executive Officer of the Company (the "Chief
Executive Officer") or such other officer of the Company as may be
designated by the Chief Executive Officer. For purposes of this
Agreement, "Board" means the Board of Directors of the Company. For
purposes of this Agreement, "Subsidiary" shall mean any entity,
corporation, partnership (general or limited), limited liability
company, entity, firm, business organization, enterprise, association
or joint venture in which the Company directly or indirectly controls
ten percent (10%) or more of the voting interest.
III.
The portion of Section 11 preceding subparagraph (a) is hereby amended and
restated in its entirety as follows:
11. Non-Competition. In consideration of the Company and the Executive
entering into the Agreement, as amended by this First Amendment, and
in particular, the awards of Deferred Shares under Section 4(c)(ii),
the payments to be made under the Original Agreement, as amended by
this First Amendment, and the modified vesting provided for under
Section VI of this First Amendment, for a period commencing on the
Revised Effective Date and ending on February 28, 2008:
IV.
The following is added as a new Section 29 of the Agreement:
29. Application of Code Section 409A. This Agreement is intended to be
administered and interpreted in a manner that is consistent with the
requirements of Section 409A of the Code. The timing of all payments
provided in this Agreement, as modified by this First Amendment, are
therefore subject to the requirements of Section 409A of the Code and
other provisions of the Code and the implementing regulations of the
Code. Notwithstanding the foregoing, no particular tax result for the
Executive with respect to any income recognized by the Executive in
connection with the Agreement is guaranteed, and the Executive shall
be responsible for any taxes, penalties and interest imposed on him
under or as a result of Section 409A of the Code in connection with
the Agreement.
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V.
The following is added as a new Section 30 of the Agreement:
30. Application of Code Section 280G. Notwithstanding anything in this
Agreement or Change of Control Plan to the contrary, Section 5(d) of
the Change of Control Plan (the "280G Protection Provision") will
apply to the terms and conditions of this Agreement during the
Employment Term; provided, however, that for purposes of determining
whether the Executive would be subject to the excise tax imposed by
Section 4999 of the Code (or any successor provision thereto), by
reason of being considered "contingent on a change in ownership or
control" of the Company, within the meaning of Section 280G of the
Code (or any successor provision thereto) or to any similar tax
imposed by state or local law, or related interest or penalties as
provided in the 280G Protection Provision, this Section 30 and the
280G Protection Provision will only apply to any such tax, interest or
penalties that may arise by reason of the Merger being considered
"contingent on a change in ownership or control" of the Company of and
will not apply to any other "change in ownership or control" of Sprint
Nextel within the meaning of Section 280G of the Code (or any
successor provision thereto).
VI.
The Company hereby amends the vesting provisions of the (i) special
recognition award of deferred shares pursuant to the Executive's Deferred Shares
Agreement - Recognition Award dated February 24, 2005 (the "Special Recognition
Award"), and (ii) entire 2006 equity award (including the award of options
granted to the Executive on February 7, 2006 and restricted stock units granted
to the Executive on June 12, 2006) (the "2006 Award") to provide that each award
will vest 100 percent on February 28, 2007 (the "Special Accelerated Vesting")
to the extent the Executive is employed on such date or otherwise entitled to
vesting pursuant to the Section 9(b) of the Original Agreement. The Executive
will not be entitled to the Special Accelerated Vesting to the extent he
terminates employment prior to February 28, 2007 for any reason other than Good
Reason.
VII.
Notwithstanding anything in this Agreement, the Change of Control Plan or
the Incentive Equity Plan to the contrary, (a) for purposes of the Change of
Control Plan, the Executive's Severance Period shall be extended until February
28, 2007, (b) for purposes of the Incentive Equity Plan, the Executive's
Accelerated Vesting Period (as defined in the Incentive Equity Plan) shall be
extended until February 28, 2007, and (c) the Executive's right to terminate his
employment with the Company for Good Reason under Section 3(h)(iii) of the
Change of Control Plan and Section 2(v)(iii) of the Incentive Equity Plan shall
be extended until February 28, 2007; provided, however, that to the extent the
Executive terminates his employment for Good Reason as provided in this Section
VII of this First Amendment prior to February 28, 2007, the Executive will not
be entitled to any accelerated vesting of his Special Recognition Award or his
2006 Award. For the avoidance of any doubt, to the extent that the Executive is
terminated by the Company without Cause on or prior to February 28, 2007, the
Executive will be entitled to the
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same severance benefits provided in this Section VII and in Section 9(b) of the
Original Agreement as though the Executive had terminated his employment for
Good Reason on February 28, 2007; and provided, further, that the Executive
would be subject to the covenant of non-competition set forth in Section 11 of
the Original Agreement, as modified by Section III hereof.
VIII.
Except as specifically amended herein, the Agreement shall remain
unchanged, and as amended herein, shall continue in full force and effect until
the expiration of the Employment Term pursuant to Section 2 of the Original
Agreement, as amended by this First Amendment.
IN WITNESS WHEREOF, the Company has caused this First Amendment to be
signed by an officer pursuant to the authority of its Board, and the Executive
has executed this First Amendment, as of the day and year first written above.
Sprint Nextel Corporation
By: /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Chief Executive Officer
/s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
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