Exhibit 10.2
Executive Deferred Compensation Plan
ARTICLE I
PURPOSE
The purpose of the Sprint Corporation Executive Deferred Compensation Plan
(hereinafter referred to as the "Plan") is to provide funds for retirement or
death for executive employees (and their Beneficiaries) of Sprint Corporation
and its subsidiaries. It is intended that the Plan will aid in retaining and
attracting employees of exceptional ability by providing such employees with a
means to supplement their standard of living at retirement.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, the following words and phrases shall have the
meanings indicated, unless the context clearly indicates otherwise:
2.1 Account Transfer Request. "Account Transfer Request" means a written notice,
in a form prescribed by the Company, by a Participant to transfer all or any
portion of one Deferred Benefit Account to another Deferred Benefit Account as
provided for in paragraph 6.7.
2.2 Amendment of Payment Election Form. "Amendment of Payment Election Form"
means a written notice, in a form prescribed by the Company, filed with the
Company by a Participant to change the manner in which such Participant's
Deferral Benefits are to be paid.
2.3 Beneficiary. "Beneficiary" means the person, persons or entity designated by
the Participant, or as provided in Article VIII, to receive any benefits payable
under the Plan. Any Participant Beneficiary Designation shall be made in a
written instrument filed with the Company and shall become effective only when
received, accepted and acknowledged in writing by the Company.
2.4 Board. "Board" means the Board of Directors of the Company.
2.5 Committee. "Committee" means the Deferred Compensation Committee appointed
to review the Plan decisions pursuant to Article III.
2.6 Company. "Company" means Sprint Corporation, or any successor thereto.
2.7 Compensation. "Compensation" means (i) Base Salary earned during the Plan
Year, and (ii) Annual Incentive Compensation and Long-Term Incentive
Compensation payable to a Participant with respect to a performance period
beginning during the Plan Year, other than a distribution under this Plan.
(a) Base Salary. "Base Salary" means all regular cash remuneration for
services, other than such items as Annual Incentive Compensation, payable
by the Employer to a Participant in cash, but before reduction for amounts
deferred pursuant to this Plan or any other Plan of the Employer.
(b) Annual Incentive Compensation. "Annual Incentive Compensation" means any
cash incentive compensation earned by a Participant.over a period of one
year.
(c) Long-Term Incentive Compensation. "Long-Term Incentive Compensation" means
cash incentive compensation, if any, earned by a Participant over a period
of more than one year.
2.8 Deferral Benefit. "Deferral Benefit" means the benefit payable to a
Participant or the Participant's Beneficiary on the Participant's retirement,
death, disability, or termination of employment as calculated in Article VII
hereof.
2.9 Deferred Benefit Account. "Deferred Benefit Account" means the accounts
maintained on the books of account of the Employer for each Participant pursuant
to Article VI. Separate Deferred Benefit Accounts shall be maintained for each
Participant. More than one Deferred Benefit Account shall be maintained for each
Participant to reflect (a) Termination and Retirement Interest Yields, (b)
separate deferral elections, and (c) Account A, Account B, Account D, Account
AA, Account BB, and Account DD elections.
For Account AA two sub-accounts (a Retirement Deferred Benefit Account and a
Termination Deferred Benefit Account) shall be maintained to reflect the
difference in Interest Yields as provided in Article VI, paragraph 6.4.
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For Account BB two sub-accounts (a Retirement Deferred Benefit Account and a
Termination Deferred Benefit Account) shall be maintained to reflect, in the
event of a transfer from Account AA or Account DD to Account BB pursuant to
paragraph 6.7, the difference in values of the two sub-accounts of Account AA or
Account DD transferred to Account BB.
For Account DD two sub-accounts (a Retirement Deferred Benefit Account and a
Termination Deferred Benefit Account) shall be maintained to reflect the
crediting of PCS Share Units corresponding to the respective sub- accounts of
Account BB pursuant to Section 6.3(b) and to reflect, in the event of a transfer
from Account AA or Account BB to Account DD pursuant to paragraph 6.7, the
difference in values of the two sub-accounts of Account AA or Account BB
transferred to Account DD.
A Participant's Deferred Benefit Accounts shall be used solely as a device for
the measurement and determination of the amounts to be paid to the Participant
pursuant to this Plan. A Participant's Deferred Benefit Account shall not
constitute or be treated as a trust fund of any kind. Unless the context
requires otherwise, "Deferred Benefit Account" shall mean the aggregate balance
of all accounts of a Participant.
2.10 Determination Date. "Determination Date" means the date on which the amount
of a Participant's Deferred Benefit Account is determined as provided in Article
VI hereof. The last day of each calendar month shall be a Determination Date.
2.11 Disability. "Disability" or "Disabled Participant" means a physical or
mental condition of a Participant resulting in a determination of disability for
purposes of receiving benefits under the Employer Long-Term Disability Insurance
Plan.
2.12 Early Retirement Date. "Early Retirement Date" means the date on which the
Participant actually terminates employment following the first day of the month
coincidental with or next following a Participant's attainment of age fifty-five
(55), but before his Normal Retirement Date.
2.13 Employer. "Employer" means Sprint Corporation, any successor to the
business thereof or any affiliate or subsidiary designated by the Board.
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2.14 FON Share Unit. " FON Share Unit" means a measure of participation under
the Plan having a value based on the market value of one share of FON Common
Stock, Series 1, of the Company.
2.15 Internal Revenue Code. "Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended or supplemented from time to time. References to any
section of the Internal Revenue Code shall be to that section as it is
renumbered, amended, supplemented or re-enacted.
2.16 Interest Yield. "Interest Yield" means with respect to any calendar month
the Termination Interest Yield or the Retirement Interest Yield as defined
below:
(a) Termination Interest Yield. The "Termination Interest Yield" means (1) in
the case of balances in Account AA, the composite yield on Moody's Seasoned
Corporate Bond Yield Index for the preceding calendar month as determined
from Moody's Bond Record published by Moody's Investors Services, Inc. (or
any successor thereto) or, if such monthly yield is no longer published, a
substantially similar average selected by the Company, and (2) in the case
of balances in Account A, the greater of (i) the prime rate in effect at
Citibank, N.A. at the opening of business on the first business day of the
month, or if said bank, for any reason, no longer publishes its prime rate,
the prime rate similarly determined of another major bank selected by the
Company and (ii) six percent per annum.
(b) Retirement Interest Yield. The "Retirement Interest Yield" means (1) in the
case of balances in Account AA, three percentage points over the
Termination Interest Yield, and (2) in the case of balances in Account A,
the Termination Interest Yield.
2.17 Normal Retirement Age. "Normal Retirement Age" means the time at which a
Participant attains age sixty-five (65).
2.18 Normal Retirement Date. "Normal Retirement Date" means the first day of the
month coincidental with or next following a Participant's Normal Retirement Age.
2.19 Participant. "Participant" means any individual who is designated by the
Company in accordance with paragraph 4.1 to participate in this
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Plan and who elects to participate by filing a Participation Agreement as
provided in Article IV.
2.20 Participation Agreement. "Participation Agreement" means the agreement, in
a form prescribed by the Company, filed with the Company by a Participant before
the beginning of the period in which the Participant's Compensation is to be
deferred pursuant to the Plan and the Participation Agreement. A new
Participation Agreement shall be filed by the Participant for each separate Base
Salary deferral election and for each Annual Incentive Compensation deferral
election and, if applicable, each Long-Term Incentive Compensation deferral
election not accompanying a Base Salary deferral election.
2.21 PCS Share Unit. "PCS Share Unit" means a measure of participation under the
Plan having a value based on the market value of a share of PCS Common Stock,
Series 1, of the Company.
2.22 Plan. "Plan" means the Sprint Corporation Executive Deferred Compensation
Plan as set forth in this document. This Plan is the successor to, and comprises
an amendment and revision of, the United Telecommunications, Inc. 1985 Executive
Deferred Compensation Plan adopted February 12, 1985.
2.23 Plan Administrator. "Plan Administrator" means the person appointed by the
Company to represent the Company in the administration of this Plan.
2.24 Plan Year. Until the 2005 Plan Year, "Plan Year" means a twelve month
period commencing May 1st and ending the following April 30th. The first Plan
Year commenced May 1, 1985. The 2005 Plan Year will be the eight month period
commencing May 1, 2005 and ending December 31, 2005, and all subsequent Plan
Years will be twelve month periods commencing January 1 of a year and ending on
December 31 of the same year.
2.25 Recapitalization Date. "Recapitalization Date" means November 23, 1998.
2.26 Retirement Plan. "Retirement Plan" means the Sprint Retirement Pension
Plan, as amended from time to time.
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2.27 Share Units. "Share Units" means the Share Units credited to Accounts B and
BB prior to the recapitalization of the Company's Common Stock on the
Recapitalization Date.
2.28 Spouse. "Spouse" means a Participant's wife or husband who was lawfully
married to the Participant upon the Participant's retirement, death or severance
from service.
2.29 Sprint Insider. "Sprint Insider" means, as of any time when the
determination thereof is relevant, any Participant subject to liability under
Section 16 of the Securities Exchange Act of 1934 with respect to trading in the
equity securities of the Company.
2.30 Transition Date. "Transition Date" means May 1, 1990.
ARTICLE III
ADMINISTRATION
3.1 Plan Administrator; Company and Committee; Duties. This Plan shall be
administered by the Committee. The Committee shall consist of not more than five
persons appointed by the Board. The Committee may be a consolidated Committee
administering other benefit plans of the Company in addition to this Plan. The
Committee shall have the authority to make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this Plan and decide
or resolve any and all questions, including interpretations of this Plan, as may
arise in connection with the Plan. The Committee may appoint a Benefit
Administrative Committee and a Plan Administrator. The Committee may delegate
its duties for the day-to-day operations of the Plan to the Plan Administrator
and other duties to the Benefit Administrative Committee. Members of the
Committee, the Benefit Administrative Committee and the Plan Administrator may
be Participants under this Plan.
3.2 Claim for Benefits. Any claim for benefits under this Plan shall be made in
writing to the Plan Administrator. If a claim for benefits is wholly or
partially denied, the Plan Administrator shall so notify the Participant or
Beneficiary within 90 days after receipt of the claim. The notice of denial
shall be written in a manner calculated to be understood by the Participant or
Beneficiary and shall contain (a) the specific reason or reasons for denial of
the claim, (b) specific references to the pertinent Plan provisions upon which
the denial is based, (c) a description of any additional material or information
necessary to perfect the claim together with an explanation
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of why such material or information is necessary and (d) an explanation of the
claims review procedure. The decision or action of the Plan Administrator shall
be final, conclusive and binding on all persons having any interest in the Plan,
unless a written appeal is filed as provided in Section 3.3.
3.3 Review of Claim. Within 60 days after the receipt by the Participant or
Beneficiary of notice of denial of a claim, the Participant or Beneficiary may
(a) file a request with the Benefit Administrative Committee that it conduct a
full and fair review of the denial of the claim, (b) review pertinent documents
and (c) submit questions and comments to the Committee in writing.
3.4 Decision After Review. Within 60 days after the receipt of a request for
review under Section 3.3, the Committee shall deliver to the Participant or
Beneficiary a written decision with respect to the claim, except that if there
are special circumstances (such as the need to hold a hearing) which require
more time for processing, the 60-day period shall be extended to 120 days upon
notice to the Participant or Beneficiary to that effect. The decision shall be
written in a manner calculated to be understood by the Participant or
Beneficiary and shall (a) include the specific reason or reasons for the
decision and (b) contain a specific reference to the pertinent Plan provisions
upon which the decision is based.
ARTICLE IV
PARTICIPATION
4.1 Participation. Participation in the Plan shall be limited to executives
having a job grade level of E14 or above, or any other employees designated by
the Committee, who elect to participate in the Plan by filing a Participation
Agreement with the Company. Participation Agreements must be filed by the
enrollment deadline established by the Plan Administrator for a Plan Year, which
deadline must be no later than the last business day of the calendar year
immediately preceding the Plan Year in which the Participant Agreement is to
first take effect, and the election to participate shall be effective on the
first day of the Plan Year following receipt by the Company of a properly
completed and executed Participation Agreement.
4.2 Minimum and Maximum Deferral and Length of Participation. A Participant may
elect in any Participation Agreement to defer a portion
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of the Participant's Compensation. The minimum and maximum amounts that may be
deferred under any single Participation Agreement shall be in $100 units and
shall be as follows:
Minimum Maximum
Deferral Deferral
With respect to $300 per 50% of Base
Base Salary month Salary
Deferrals
With respect to 25% of Annual 100% of
Annual Incentive Annual
Incentive Compensation Incentive
Compensation Compensation
With respect to 25% of Long- 100% of Long-
Long-Term Term Incentive Term Incentive
Incentive Compensation Compensation
(a) With respect to Base Salary deferrals, the dollar amount of deferral
elected in each Participation Agreement shall be the amount of Base Salary
that will be deferred in each month subject to the Participation Agreement.
Each Participation Agreement shall apply to the Participant's Base Salary
earned in the Plan Year immediately following the Plan Year in which the
Participation Agreement is filed (or until the Participant's retirement,
whichever occurs first). The fixed dollar amount of Base Salary deferral
applicable over a Plan Year shall not be changed by virtue of a change in
Base Salary alone.
(b) With respect to Annual Incentive Compensation and, if applicable, Long-Term
Incentive Compensation deferrals, the deferral percentage selected in a
Participation Agreement shall apply to any Annual Incentive Compensation or
Long-Term Incentive Compensation payable to a Participant with respect to
any performance period beginning in the Plan Year immediately following the
Plan Year in which the Participation Agreement is received by the Plan
Administrator. For any performance period beginning in calendar year 2005,
but before the beginning of the 2005 Plan Year, the deferral percentage
selected in the special Participation Agreement established by the Plan
Administrator applicable to such compensation, which must be received by
the Company no later than December 31, 2004, shall apply.
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(c) From time to time, the Company may increase or decrease the minimum and
maximum deferrals set forth above as well as the period for which the
deferrals are effective by giving reasonable written notice to the affected
Participants. Such changes shall be effective for all Participation
Agreements filed thereafter.
(d) A Participant's election to defer Compensation shall be irrevocable upon
the filing of the respective Participation Agreement; provided, however,
that the deferral of Compensation under any Participation Agreement may be
suspended or amended as provided in paragraphs 7.5 or 9.1.
ARTICLE V
DEFERRED COMPENSATION
5.1 Elective Deferred Compensation. The amount of Compensation that a
Participant elects to defer in the Participation Agreement executed by the
Participant, with respect to each Plan Year of participation in the Plan, shall
be credited by the Company to the Participant's Deferred Benefit Account as the
Participant is paid the non-deferred portion of such Compensation, or if all
such Compensation is deferred, at the time such Compensation would have been
paid absent the deferral election. The amount credited to a Participant's
Deferred Benefit Account shall equal the amount deferred. To the extent that the
Employer is required to withhold any taxes or other amounts relating to the
employees' deferred wages pursuant to any state, federal or local law, such
amounts shall be taken out of the portion of the Participant's Compensation
which is not deferred under this Plan.
5.2 Additional Amounts Under Savings Plan and Retirement Plan.
(a) Savings Plan. Except for Participants who are Sprint Insiders, to the
extent a Participant's deferral of Compensation under this Plan causes a
reduction in the Company's contribution for the Participant under the
Sprint Retirement Savings Plan, the Company shall credit the amount of any
such reduction to the Participant's Deferred Benefit Accounts B and D in
the ratio determined pursuant to guidelines adopted by the Committee or the
Board. For Sprint Insiders, such reduction shall be credited to Account A.
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(b) Retirement Plan. A Participant shall receive a Pension Make-Up Benefit
from the Supplemental Executive Retirement Plan if the deferral of
compensation under this Plan causes a reduction in the Participant's
benefit under the Retirement Plan.
(c) Elimination of Savings Plan Credit. No additional amounts provided
under 5.2(a) will be credited after the Plan Year ending April 30, 2004.
5.3 Additional Payments. The Company also intends that supplemental payments
shall be made at death, disability or termination of employment, as the case may
be, for any reduction in benefits due to deferrals of Compensation under this
Plan in respect of any of the Employer's life insurance or disability plans or
Employees Stock Purchase Plan now in existence or adopted after the effective
date of this Plan.
5.4 Vesting of Deferred Benefit Account. A Participant shall be 100% vested in
the Participant's Deferred Benefit Account.
ARTICLE VI
DEFERRED BENEFIT ACCOUNT
6.1 Determination of Account. Each Participant's Deferred Benefit Account, as of
each Determination Date, shall consist of the balance of the Participant's
Deferred Benefit Account as of the immediately preceding Determination Date,
plus the Participant's elective deferred compensation withheld since the
immediately preceding Determination Date pursuant to paragraph 5.1 and plus
amounts credited to the Participant's Deferred Benefit Account pursuant to
paragraphs 6.4 and 6.5. The Deferred Benefit Account of each Participant shall
be reduced by the amount of all distributions, if any, made from such Deferred
Benefit Account since the preceding Determination Date.
6.2 Type of Deferral. A Participant may elect to have any portion of the amount
deferred credited to Account A (fixed income return) or to Account B (FON Share
Units). The election shall be made by a properly executed Participation
Agreement. Deferrals shall be credited in accordance with the election of the
applicable Participation Agreement.
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6.3 Creation of Accounts AA, BB, D, and DD.
(a) Accounts AA and BB. As of the start of business on the Transition Date, all
amounts standing to the credit of each Participant in Account A were
transferred to an Account AA. As of the start of business on the Transition
Date, amounts standing to the credit of each Participant in Account B that
were attributable to prior transfers from Account A into Account B were
transferred to an Account BB. The amount of such transfers was an amount
equal to the sum of the dollar amount of all transfers from Account A to
Account B during the period beginning on the effective date of the
Participation Agreement and ending on the Transition Date. For all purposes
of this Plan, except as otherwise noted in this Plan, Account AA shall be
treated in the same manner as Account A, and Account BB shall be treated in
the same manner as Account B.
(b) Accounts D and DD. As of the Recapitalization Date, there was credited to
Accounts D and DD, created for each Participant having a positive balance
in an Account B or BB with respect to any Plan Year, a number of PCS Share
Units determined as follows:
(1) one-half of a PCS Share Unit in Account D for each Share Unit in
Account B for such Participant for such Plan Year as of the
Recapitalization Date; and
(2) one-half of a PCS Share Unit in the Retirement Deferred Benefit
Account of Account DD for each Share Unit in the Retirement Deferred
Benefit Account of Account BB for such Participant for such Plan Year
as of the Recapitalization Date; and
(3) one-half of a PCS Share Unit in the Termination Deferred Benefit
Account of Account DD for each Share Unit in the Termination Deferred
Benefit Account of Account BB for such Participant for such Plan Year
as of the Recapitalization Date.
For all purposes of this Plan except as otherwise noted in this Plan, Account DD
shall be treated in the same manner as Account D.
6.4 Maintenance of Accounts A and AA. As of each Determination Date, the
Participant's Deferred Benefit Accounts A and AA shall be increased by the
amount of interest earned since the preceding
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Determination Date. Interest on Accounts A and AA shall be based upon the
Interest Yield. For Account AA, a Retirement Deferred Benefit Account shall be
maintained and increased at the rate specified by the Retirement Interest Yield
and a Termination Deferred Benefit Account shall be maintained and increased at
the rate specified by the Termination Interest Yield. Interest shall be credited
on the mean average of the balances of the Deferred Benefit Account on the
Determination Date (before crediting the interest) and on the last preceding
Determination Date, but after the Deferred Benefit Account has been adjusted for
any contributions or distributions to be credited or deducted for each such day.
6.5 Maintenance of Share Unit Accounts. Accounts B and BB and Accounts D and DD
shall maintain balances in FON Share Units and PCS Share Units, respectively.
(a) Maintenance of Accounts B and BB.
(1) Conversion of Share Units into FON Share Units. As of the
Recapitalization Date, each Share Unit in Accounts B and BB was
converted into a FON Share Unit.
(2) Conversion between Dollar Amounts and FON Share Units in Accounts B
and BB. When an amount is to be added to a Participant's Deferred
Benefit Accounts B or BB, it shall be converted into FON Share Units,
or fractions thereof, by dividing the amount to be credited by the
closing price of the FON Common Stock, Series 1, as reported by the
New York Stock Exchange on the last trading day on or before the
Determination Date. When a number of FON Share Units is to be
subtracted from a Participant's Deferred Benefit Accounts B or BB,
such number of FON Share Units shall be converted into a dollar amount
by multiplying such number of Share Units by the closing price of the
FON Common Stock, Series 1, as reported by the New York Stock Exchange
on the last trading day on or before the Determination Date.
(3) Sub-accounts to be Maintained for Purposes of Computing Retirement and
Termination Benefits. Two sub-accounts shall be maintained for Account
BB: (i) a Retirement Deferred Benefit Account which shall include the
transfer from Account B into Account BB described in paragraph 6.3(a),
plus amounts transferred from the
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Account AA Retirement Deferred Benefit Account, if any, plus amounts
transferred from the Account DD Retirement Benefit Account, if any,
plus other additions pursuant to this paragraph 6.5(a); and (ii) a
Termination Deferred Benefit Account which shall include the transfer
from Account B into Account BB described in paragraph 6.3(a) plus
amounts transferred from the Account AA Termination Deferred Benefit
Account, if any, plus amounts transferred from the Account DD
Termination Deferred Benefit Account, if any, plus other additions
pursuant to this paragraph 6.5(a).
(4) Dividends. When a dividend is declared and paid by the Company on its
FON Common Stock, Series 1, an amount shall be credited to the
Participant's Accounts B and BB as though the same dividend had been
paid on the FON Share Units in such accounts as of the Determination
Date immediately preceding the record date for the dividend, and such
amount shall be converted to FON Share Units. Such amount shall be
valued as of the Determination Date immediately following the payment
of the dividend.
(5) Effect of Recapitalization. In the event of a stock dividend, stock
split, or other corporate reorganization involving the FON Common
Stock, Series 1, the Company shall make equitable adjustment to the
number of FON Share Units credited to a Participant's Accounts B and
BB as may be necessary to give effect to such change in the Company's
capital structure.
(6) Conversion of Share Units to Dollars on Distribution. FON Share Units
in Accounts B and BB shall be converted to an equivalent dollar amount
before any distribution thereof to a Participant pursuant to Article
VII. For purposes of distribution, the value of a FON Share Unit shall
be the average closing price of the FON Common Stock, Series 1, on the
New York Stock Exchange on the last trading day of each of (i) the 12
calendar months immediately preceding the date of distribution or (ii)
the smaller number of calendar months (including part of a month)
elapsed from the Recapitalization Date to such distribution. If a
Participant elects payment in other than a lump sum, FON Share Units
shall be so converted to a dollar amount with respect to each payment
made in the distribution. During the period of
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distribution, dividends and other equitable adjustments shall be
credited to the Participant's Accounts B and BB in accordance with
paragraphs 6.5(a)(4) and 6.5(a)(5). For such purposes, a Participant
that is a Sprint Insider immediately before the event that entitles
the Participant to distribution shall be deemed a Sprint Insider
during the period of distribution.
(b) Maintenance of Accounts D and DD.
(1) Conversion between Dollar Amounts and PCS Share Units in Accounts D
and DD. When an amount is to be added to a Participant's Deferred
Benefit Accounts D or DD, it shall be converted into PCS Share Units,
or fractions thereof, by dividing the amount to be credited by the
closing price of the PCS Common Stock, Series 1, as reported by the
New York Stock Exchange on the last trading day on or before the
Determination Date. When a number of PCS Share Units is to be
subtracted from a Participant's Deferred Benefit Accounts D or DD,
such number of PCS Share Units shall be converted into a dollar amount
by multiplying such number of PCS Share Units by the closing price of
PCS Common Stock, Series 1, as reported by the New York Stock Exchange
on the last trading day on or before the Determination Date.
(2) Sub-accounts to be Maintained for Purposes of Computing Retirement and
Termination Benefits. Two sub-accounts shall be maintained for Account
DD: (i) a Retirement Deferred Benefit Account which shall include the
value of the PCS Share Units credited pursuant to paragraph 6.3(b)(2),
plus amounts transferred from the Account AA Retirement Benefit
Account, if any, plus amounts transferred from the Account BB
Retirement Benefit Account, if any, plus other additions pursuant to
this paragraph 6.5(b) and (ii) a Termination Deferred Benefit Account
which shall include the value of the PCS Share Units credited pursuant
to paragraph 6.3(b)(3), plus amounts transferred from the Account AA
Termination Benefit Account, if any, plus amounts transferred from the
Account BB Termination Benefit Account, if any, plus other additions
pursuant to this paragraph 6.5(b).
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(3) Dividends. When a dividend is declared and paid by the Company on its
PCS Common Stock, Series 1, an amount shall be credited to the
Participant's Accounts D and DD as though the same dividend had been
paid on the PCS Share Units in such accounts as of the Determination
Date immediately preceding the record date for the dividend, and such
amount shall be converted to PCS Share Units. Such amount shall be
valued as of the Determination Date immediately following the payment
of the dividend.
(4) Effect of Recapitalization. In the event of a stock dividend, stock
split or other corporate reorganization involving PCS Common Stock,
Series 1, the Company shall make equitable adjustment to the number of
PCS Share Units credited to a Participant's Accounts D and DD as may
be necessary to give effect to such change in the Company's capital
structure. In the event a corporate reorganization results in the
conversion of PCS Share Units into FON Share Units, all FON Share
Units held in Accounts D and DD following the reorganization shall be
transferred to the Accounts B and BB, respectively. The Accounts D and
DD shall then be eliminated.
(5) Conversion of PCS Share Units to Dollars on Distribution. PCS Share
Units in Accounts D and DD shall be converted to an equivalent dollar
amount before any distribution thereof to a Participant pursuant to
Article VII. For purposes of distribution, the value of a PCS Share
Unit shall be the average closing price of PCS Common Stock, Series 1,
on the New York Stock Exchange on the last trading day for each of (i)
the 12 calendar months immediately preceding the date of such
distribution or (ii) the smaller number of calendar months (including
part of a month) elapsed from the Recapitalization Date to such
distribution. If a Participant elects payment in other than a lump
sum, PCS Share Units shall be so converted to a dollar amount with
respect to each payment made in the distribution. During the period of
distribution, dividends and other equitable adjustments shall be
credited to the Participant's Accounts D and DD in accordance with
paragraphs 6.5(b)(3) and 6.5(b)(4). For such purposes, a Participant
that is a Sprint Insider immediately before the
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event that entitles the Participant to distribution shall be deemed a
Sprint Insider during the period of distribution.
6.6 Statement of Accounts. The Company shall submit to each Participant, within
120 days after the close of each Plan Year, a statement in such form as the
Company deems desirable, setting forth the balance to the credit of such
Participant in the Participant's Deferred Benefit Accounts A, B, and D and in
the Participant's Deferred Benefit Accounts AA, BB, and DD (showing separate
calculations for each Interest Yield), in each case, as of the last day of the
preceding Plan Year.
6.7 Transfers Between Accounts. Within the limitations of this paragraph 6.7, a
Participant may elect, by executing an Account Transfer Request: (1) to transfer
all or any portion of the Participant's Account A to Account B or Account D, (2)
to transfer all or any portion of the Participant's Account B to Account A or
Account D, (3) to transfer all or any portion of the Participant's Account D to
Account A or Account B, (4) to transfer all or any portion of the Participant's
Account AA to Account BB or Account DD, (5) to transfer all or any portion of
the Participant's Account BB to Account AA or Account DD, and (6) to transfer
all or any portion of the Participant's Account DD to Account AA or Account BB.
Such election shall be effective on the last day of the calendar month in which
the Plan Administrator timely receives the Participant's executed Account
Transfer Request. Transfers may not be made more than four times in any Plan
Year, and no such transfer may be made unless a period of at least three months
shall have elapsed from the effective date of the most recent such transfer
(whether it occurred in the current Plan Year or not) to the effective date of
the current transfer.
ARTICLE VII
BENEFITS
7.1 Benefit for Normal or Early Retirement and Termination After Age 55. Subject
to paragraph 7.6 below, upon a Participant's (i) retirement after reaching the
Normal Retirement Date, or (ii) retirement after reaching the Early Retirement
Date, or (iii) termination of employment after attaining age 55, the Participant
shall be entitled to a Deferral Benefit equal to the amount of the Participant's
Retirement Deferred Benefit Account determined under paragraph 6.1 as of the
Determination Date coincident with or immediately following such event.
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7.2 Termination of Employment Before Age 55. Upon any termination of service of
the Participant before age 55 for reasons other than death or Disability, the
Employer shall pay to the Participant, as compensation earned for services
rendered before the Participant's termination of service, a Deferral Benefit
equal to the amount of the Participant's Termination Deferred Benefit Account
determined under paragraph 6.1. The Termination Deferred Benefit Account of a
Participant whose employment has terminated shall be paid in a single sum to the
terminated Participant within 30 days following termination of employment if the
aggregate balance of the Deferred Benefit Account(s) of such Participant is
$20,000 or less. If such aggregate balance of a Participant's Deferred Benefit
Account(s) is more than $20,000, payment shall commence pursuant to the
Participant's election in the Participation Agreement or in the Amendment of
Payment Election Form.
7.3 Death. If a Participant dies after the commencement of payments of the
Participant's Deferral Benefit, the Participant's Beneficiary shall continue to
receive the remaining installments of the Participant's Deferred Benefit Account
in accordance with the Participant's election pursuant to paragraph 7.6.
If a Participant dies before any payments of a Deferral Benefit, the amounts to
which the Participant's Beneficiary is entitled shall be determined as follows:
(a) In the case of deferrals pursuant to a Participation Agreement first
effective before the Transition Date:
(1) Deferrals of Incentive Compensation shall be the Retirement Deferred
Benefit Account value thereof.
(2) Deferrals of Base Salary pursuant to Participation Agreements that
required a total deferral of less than $15,000 per year allocated to
Accounts A and AA during the last Plan Year of deferrals pursuant to
such Participation Agreement shall be the greater of (i) the
Retirement Deferred Benefit Account value thereof or (ii) ten times
the amount of the elected annual Base Salary deferral.
(3) Deferrals of Base Salary pursuant to Participation Agreements that
required a total deferral of $15,000 or more per year allocated to
Accounts A and AA during the last Plan Year of deferrals pursuant to
such Participation
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Agreement shall be determined as follows: (i) that portion of the
deferral which totals $15,000 per year shall be the greater of (x) the
Retirement Deferred Benefit Account value thereof and (y) ten times
the amount of the elected annual Base Salary deferral, and (ii) the
portion of such deferral which is in excess of $15,000 per year shall
be the Retirement Deferred Benefit Account value of such excess.
(4) Deferrals allocated to Accounts B and BB shall be the Retirement
Deferred Benefit Account value thereof.
(5) Deferrals allocated to Accounts D and DD shall be the Retirement
Deferred Benefit Account value thereof.
(b) In the case of deferrals pursuant to a Participation Agreement first
effective on or after the Transition Date, the aggregate amount of all
deferrals shall be the Retirement Deferred Benefit Account value of
Accounts A, B and D. The Deferral Benefit shall be payable as provided for
in paragraph 7.6. The Deferral Benefit provided above shall be in lieu of
all other benefits under this Plan.
7.4 Disability. In the event of Disability while employed by the Employer before
the completion of all deferrals provided for under a Participation Agreement,
the Employer shall credit to the disabled Participant's Deferred Benefit Account
an amount equal to the amount deferred by the Participant under the
Participation Agreement during such period of Disability, but not beyond the end
of the Plan Year to which the Participation Agreement applies.
In the event of Disability before termination of employment or the Normal
Retirement Date, the disabled Participant, unless the Participant otherwise
elects under this paragraph, shall be entitled to the amount in the
Participant's Retirement Deferred Benefit Account (rather than the Participant's
Termination Deferred Benefit Account) determined under paragraph 6.1 as of the
Determination Date next following such Disability, with payments to commence
upon attainment of the Participant's Normal Retirement Date in the form
specified in paragraph 7.6(a)(2) and/or 7.6(a)(3) over a 15 year period. Before
payments commence under the preceding sentence, a Disabled Participant may
elect, subject to Committee approval upon good cause shown: (i) to accelerate
commencement of the payments to any earlier date, but not sooner than 60 days
after the onset of Disability and/or (ii) to change the form of payment
permitted under paragraph 7.6(a).
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7.5 Suspension of Participation; Failure to Continue Participation. The
Committee, in its sole discretion, may suspend the deferral of a Participant's
Compensation upon the advanced written request of a Participant on account of
financial hardship suffered by that Participant. A Participant must file any
request for such suspension on or before the 15th day preceding the regular
payment date on which the suspension is to take effect. The Committee, in its
sole discretion, shall determine the amount, if any, that will not be deferred
by the Participant as a result of the financial hardship.
The suspension of any deferrals under this paragraph shall not affect amounts
deferred with respect to periods before the effective date of the suspension. A
Participant whose deferrals are suspended may not execute a subsequent
Participation Agreement that would take effect before the beginning of the third
Plan Year following the close of the Plan Year in which the suspension first
took effect.
In the event the Participant ceases to remain a member of the class of employees
who are eligible to participate in this Plan, the Participant may elect to
suspend the amount of any remaining deferral commitment in the same manner as
described for other suspensions in this paragraph, except that Committee
approval shall not be required.
7.6 Form of Benefit Payment.
(a) Upon the happening of an event described in paragraphs 7.1, 7.2, 7.3 or 7.4
above, the Employer shall pay to the Participant or the Participant's
Beneficiary the amount (at a time designated by the Participant in the
Participation Agreement, but commencing no later than the Participant's
Normal Retirement Date) specified in one of the following forms as elected
by the Participant, either in the Participation Agreement or the Amendment
of Payment Election Form filed by the Participant:
(1) a lump sum payment.
(2) with respect to balances in Accounts A and AA, an annual payment of a
fixed amount that shall amortize the Deferred Benefit Account balance
in equal annual payments of principal and interest over a period from
2 to 20 years. For purposes of determining the amount of the annual
payment, the assumed rate of interest on Accounts A and AA shall be
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the average of the applicable Interest Yield as of each Determination
Date for the 60 months preceding the initial annual installment
payment.
(3) with respect to balances in Accounts B and BB, an annual payment over
a period from 2 to 20 years, each such payment having a value, as
determined pursuant to paragraph 6.5(a)(6), of the number of FON Share
Units equal to (i) the number of FON Share Units in the accounts on
the Determination Date immediately following the event described in
paragraph 7.1, 7.2, 7.3 or 7.4, divided by (ii) the number of annual
installments elected. During the period that a Participant is
receiving a distribution from Account B or BB, FON Share Unit
dividends will be added to the Accounts in accordance with
subparagraph 6.5(a)(4). Such FON Share Unit dividends shall be valued
in the same manner as previously described, and all such FON Share
Units accruing after a distribution from Accounts B or BB is made
shall be paid to the Participant with the next distribution from the
account.
(4) with respect to balances in Accounts D and DD, an annual payment over
a period from 2 to 20 years, each such payment having a value, as
determined pursuant to paragraph 6.5(b)(5), of the number of PCS Share
Units equal to (i) the number of PCS Share Units in the accounts on
the Determination Date immediately following the event described in
paragraph 7.1, 7.2, 7.3 or 7.4, divided by (ii) the number of annual
installments elected. During the period that a Participant is
receiving a distribution from Account D or DD, PCS Share Unit
dividends will be added to the Accounts in accordance with
subparagraph 6.5(b)(3). Such PCS Share Unit dividends shall be valued
in the same manner as previously described, and all such PCS Share
Units accruing after a distribution from Accounts D or DD is made
shall be paid to the Participant with the next distribution from the
account.
(b) A Participant may change the form in which such Participant's benefits
shall be paid by filing an Amendment of Payment Election Form indicating
such change at least 13 months before the date upon which the payments to
be made are determined. No such Amendment of Payment Election Form shall
change the amount
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elected to be deferred in the Participation Agreement to which it relates,
nor the time elected for commencement of benefit payments.
(c) In the absence of a Participant's election under subparagraph 7.6(a),
benefits shall be paid in the form specified in subparagraph 7.6(a)(2),
7.6(a)(3), and 7.6(a)(4) over a 15 year period, except as provided in
paragraph 7.2. In the event of a Disabled Participant, payment shall be in
the form described in paragraph 7.4.
(d) If a Participant's Beneficiary dies before payment of the Participant's
Deferred Benefits are complete, payments will continue to be made to the
estate of the Beneficiary in accordance with the Participant's election
pursuant to this paragraph 7.6.
7.7 Withholding; Payroll Taxes. To the extent required by the law in effect at
the time payments are made, the Employer shall withhold from payments made
hereunder any taxes required to be withheld from an employee's wages for the
federal or any state or local government.
7.8 Commencement of Payments. Unless otherwise provided, payments under this
Plan shall begin within 60 days following receipt of notice by the Plan
Administrator of an event which entitles a Participant (or a Beneficiary) to
payments under this Plan, or at such earlier date as may be determined by the
Company pursuant to the terms of the Plan. All payments shall be made as of the
first day of the month.
ARTICLE VIII
BENEFICIARY DESIGNATION
8.1 Beneficiary Designation. Each Participant shall have the right, at any time,
to designate any person or persons as the Participant's Beneficiary or
Beneficiaries (both principal as well as contingent) to whom payment under this
Plan shall be paid in the event of the Participant's death before complete
distribution to the Participant of the benefits due the Participant under the
Plan.
8.2 Amendments. Any Beneficiary Designation may be changed by a Participant by
the written filing of such change on a form prescribed by the Company. The
filing of a new Beneficiary Designation form will cancel all Beneficiary
Designations previously filed.
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8.3 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided above, or if all designated Beneficiaries predecease the
Participant, then the Participant's designated Beneficiary shall be deemed to be
the person or persons surviving the Participant in the first of the following
classes in which there is a survivor, share and share alike:
(a) The surviving Spouse;
(b) The Participant's children, except that if any of the children predecease
the Participant but leave issue surviving, then such issue shall take by
right of representation the share their parent would have taken if living;
(c) The Participant's personal representative (executor or administrator).
8.4 Effect of Payment. The payment to the Beneficiary or the Beneficiary's
estate shall completely discharge the Employer's obligations relating to the
Participant under this Plan.
ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
9.1 Amendment. The Board may at any time amend the Plan in whole or in part;
provided, however, that no amendment shall be effective to decrease or restrict
any Deferred Benefit Account at the time of such amendment.
9.2 Right to Terminate. The Board may at any time terminate the Plan with
respect to new elections to defer if, in its judgment, the continuance of the
Plan, the tax, accounting, or other effects thereof, or potential payments
thereunder would not be in the best interests of the Company. The Board may also
terminate the Plan in its entirety at any time, and upon any such termination,
each Participant (a) who is then receiving a Deferral Benefit shall be paid in a
lump sum, or over such period of time as determined by the Company, the then
remaining balance in the Participant's Deferred Benefit Account, and (b) who has
not received a Deferral Benefit shall be paid in a lump sum, or over such period
of time as determined by the Company, the balance in the Participant's Deferred
Benefit Account.
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ARTICLE X
MISCELLANEOUS
10.1 Unsecured General Creditor. Participants and their Beneficiaries shall have
no legal or equitable rights, interest or claims in any property or assets of
the Employer, nor shall they be Beneficiaries of, or have any rights, claims or
interests in any life insurance policies, annuity contracts or the proceeds
therefrom owned or which may be acquired by the Employer ('Policies'). Such
Policies or other assets of the Employer shall not be held under any trust for
the benefit of Participants or their Beneficiaries or held in any way as
collateral security for the fulfilling of the obligations of the Employer under
this Plan. Any and all of the Employer's assets and Policies shall be, and
remain, the general, unpledged, unrestricted assets of the Employer. The
Employer's obligation under the Plan shall be merely that of an unfunded and
unsecured promise of the Employer to pay money in the future.
10.2 Nonassignability. Neither a Participant nor any other person shall have any
right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey in advance of actual receipt
the amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be unassignable and non-transferable.
No part of the amounts payable shall, before actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.
10.3 Not a Contract of Service. The terms and conditions of this Plan shall not
be deemed to constitute a contract of service between the Employer and the
Participant, and the Participant (or the Participant's Beneficiary) shall have
no rights against the Employer except as may otherwise be specifically provided
herein. Moreover, nothing in this Plan shall be deemed to give a Participant the
right to be retained in the service of the Employer or to interfere with the
right of the Employer to discipline or discharge the Participant at any time.
10.4 Protective Provisions. A Participant will cooperate with the Employer by
furnishing any and all information requested by the Employer, in order to
facilitate the payment of benefits hereunder, and by
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taking such physical examinations as the Employer may deem necessary and taking
such other action as may be requested by the Employer.
10.5 Applicable Law. The Plan, and any Participation Agreement related thereto,
shall be governed by the laws of the State of Kansas, without regard to the
principles of conflicts of law.
10.6 Affiliated Entities. For purposes of this Plan, a Participant who becomes
employed by Global One (an "Affiliated Entity") shall not be considered to have
terminated employment with the Company or a subsidiary of the Company until the
Participant's employment is terminated with all Affiliated Entities without
becoming employed by the Company or its subsidiaries.
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Appendix A
Summary of Amendments to the Executive Deferred
Compensation Plan
Sprint's Executive Deferred Compensation Plan (the "Sprint EDCP") was amended
effective January 1, 2001 to merge the executive deferred compensation plan
maintained by Sprint Spectrum, L.P. (the "PCS EDCP") with and into Sprint EDCP.
In addition, the Sprint EDCP was amended to preserve certain features of the PCS
EDCP with respect to participants' account balances under that plan, as follows:
1. Form and Timing of Distributions. The form of benefit and timing of
distribution elected by participants in the PCS EDCP, as well as the requirement
that distribution will be made in a lump sum upon termination of employment,
continues to apply with respect to the account balances attributable to the PCS
EDCP.
2. Hardship Distributions. Provisions for hardship distributions under the PCS
EDCP continue to apply with respect to the account balances attributable to the
PCS EDCP.
3. Provisions for Disability. Provisions calling for benefits to commence for
disabled participants at age 55, or sooner under certain circumstances, continue
to apply with respect to the account balances attributable to the PCS EDCP.