Exhibit 10.4
Award Agreement
This Award Agreement (the "Agreement") is entered into as of __________________,
2005 (the "Grant Date"), by and between Sprint Corporation, a Kansas corporation
(together with its direct and indirect subsidiaries, "Sprint") and
_________________________ (the "Executive"), an employee of Sprint for the grant
of options and restricted stock units with respect to Sprint's FON Common Stock,
par value $2.00 per share ("FON Stock").
In consideration of the mutual covenants and agreements set forth in this
Agreement, the parties agree to the following.
1. Defined Terms Incorporated from 1997 Long-Term Stock Incentive Program
Capitalized terms used in this Award Agreement and not defined herein shall have
the meanings set forth in Sprint's 1997 Long-Term Stock Incentive Program (the
"Program").
2. Grant of Stock Options
Sprint hereby grants to Executive under the Program options to buy
__________________ shares of FON Stock at a strike price of $26.7465 per share
(the "Option"). The Option becomes exercisable at a rate of 25% of the total
number of shares subject to purchase on each of the first four anniversaries of
the Grant Date and expires on the 10th anniversary of the Grant Date. The Option
is governed by, and this Agreement hereby incorporates, the Standard Terms of
Options set forth in Section 6(g) of the Program except (i) as provided in
Section 4 below, and (ii) that the strike price of $26.7465 was set at 110% of
the Fair Market Value of one Share of FON Stock on the Grant Date.
3. Grant of Restricted Stock Units
Sprint hereby grants to Executive under the Program ___________________ FON
restricted stock units (the "RSUs"). Each RSU represents the unsecured right to
require Sprint to deliver to Executive one share of FON Stock. With respect to
100% of the RSUs, the "vesting date" and "initial delivery date" is on the third
anniversary of the Grant Date subject to paragraph 4.02 below. The RSUs are
governed by, and this Agreement hereby incorporates, the Standard Terms of Other
Stock Unit Awards set forth in Section 9(c) of the Program except as provided in
Section 4 below.
4. Terms different from Standard Terms
4.01 Retention Program vesting. If Executive is involuntarily terminated without
cause with a last day worked before the one year anniversary of the contemplated
spin-off of Sprint's Local division (the "Spin-off), any unvested portion of the
Option or RSUs will vest on an accelerated basis, if: (1) the Sprint Nextel
merger is completed and the Executive remains employed with Sprint, or is on
severance, at that time; and, (2) the Option or RSUs have been outstanding for
at least one year as of the last day of the Executive's severance pay period.
This vesting acceleration will be effective on the last day of the Executive's
severance pay period. For this purpose, transfer to the spun-off company in
connection with the Spin-off is not considered involuntary termination. In the
event the Spin-off does not occur, acceleration will only occur if the Executive
is involuntarily terminated without cause with a last day worked before the one
year anniversary of the Sprint Nextel merger.
4.02 Performance adjustment. Subject to discretion of the Compensation Committee
of Sprint's Board of Directors, the number of RSUs in Section 3 will be adjusted
by multiplying that number by a payout percentage (from 0% to 200%) based on
achievement of financial objectives relating to enterprise economic value added
during 2005 (the "Performance Adjustment"). This Performance Adjustment will be
made as soon as practicable after 2005. If Executive remains an employee of
Sprint throughout 2005, cash dividends on the FON Stock underlying these RSUs
during 2005 will be paid to Executive as soon as practicable after the
Performance Adjustment. These cash dividends will be calculated by first
adjusting the RSUs by the Performance Adjustment and then applying the dividend
rate for each quarterly dividend for which Executive held the RSUs, as adjusted,
on each dividend record date. After the Performance Adjustment is made, if cash
dividends are paid on the underlying FON Stock, Executive will receive cash
dividends for RSUs held on the dividend record date as provided in Section 9(c)
of the Program.
4.03 Section 280G of the Internal Revenue Code. The limitation on acceleration
of vesting under Section 6(g)(viii) and Section 9(c)(iv) of the Program,
relating to payments or benefits contingent on a change in control within the
meaning of Code Section 280G, does not apply to the Option or RSUs.
5. Plan
Information Executive hereby acknowledges having read the 1997 Long-Term Stock
Incentive Program Plan Information Statement dated February 2005 available on
line at http://ppld.corp.sprint.com/hr/comp/ec.html. To the extent not
inconsistent with the provisions of this Agreement, the terms of such
information statement and the Program are hereby incorporated by this reference.
In Witness Whereof, Sprint has caused this Agreement to be executed by its duly
authorized officer and the Executive has executed the same as of the Grant Date.
Sprint Corporation
By: __________________________
Authorized Officer
______________________________
"Executive"