DIRECTOR'S DEFERRED FEE PLAN (2/8/05)

 

                                                                  Exhibit 10.1

 

 

                          Directors' Deferred Fee Plan

                     

 

                                    ARTICLE I

                                     PURPOSE

 

The purpose of the Sprint Corporation  Directors' Deferred Fee Plan (hereinafter

referred to as the "Plan") is to provide  funds upon  termination  of service or

death for  Directors  (and their  Beneficiaries)  of Sprint  Corporation.  It is

intended  that the Plan  will  aid in  retaining  and  attracting  Directors  of

exceptional ability by providing such Directors with a means to supplement their

standard of living.

 

                                   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, 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 Compensation Committee of the Board.

 

2.6 Company. "Company" means Sprint Corporation, or any successor thereto.

 

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2.7  Deferral  Benefit.  "Deferral  Benefit"  means  the  benefit  payable  to a

Participant on the Participant's  death or termination of service as a Director,

as calculated in Article VII hereof.

 

2.8 Deferred  Benefit  Account.  "Deferred  Benefit  Account" means the accounts

maintained on the books of account of the Company 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)  separate  deferral  elections  made  pursuant  to

separately executed Participation Agreements,  (b) Account A, Account B, Account

D, Account AA, Account BB, and Account DD elections made by each  Participant in

each such Participation Agreement, and (c) One Time Grants.

 

A  Participant's  Deferred  Benefit Account shall be used solely as a device for

the measurement and  determination  of the amounts to be paid to the Participant

or the Participant's Beneficiary pursuant to this Plan. A Participant's Deferred

Benefit Account shall not constitute or be treated as a trust fund of any kind.

 

2.9 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.

 

2.10  Director.  "Director"  means a member  of the  Board of  Directors  of the

Company who is not an employee of the Company or its subsidiaries.

 

2.11 Fee. "Fee" means any cash  compensation paid to a Director for his services

as a Director other than a distribution under this Plan.

 

2.12 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.

 

2.13 Interest Yield. "Interest Yield" means, with respect to any calendar month,

(a) in the case of  balances  in Account AA,  three  percentage  points over 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 (b) 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,

 

 

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the prime rate  similarly  determined  of another  major  bank  selected  by the

Company and (ii) six percent per annum.

 

2.14 New Director.  "New Director"  means a Director who had not  accumulated at

least  five  years of service as a  Director  as of  December  10,  1996 and any

Director who is first elected after such date.  Each New Director is entitled to

a One Time Grant.

 

2.15 One Time Grant, "One Time Grant" means a one time grant to New Directors of

FON Share  Units  credited  into  Account B and PCS Share  Units  credited  into

Account D. The number of FON Share Units and the number of PCS Share Units to be

granted to each New Director are determined by the Committee.

 

2.16  Participant.  "Participant"  means any New  Director  and any Director who

elects to participate by filing a Participation Agreement as provided in Article

IV.

 

2.17 Participation Agreement.  "Participation Agreement" means the agreement, in

a form prescribed by the Company, filed by a Participant before the beginning of

the period in which the  Participant's  Fees are to be deferred  pursuant to the

Plan. A new  Participation  Agreement shall be filed by the Participant for each

separate Fee deferral election.

 

2.18 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.

 

2.19 Plan. "Plan" means the Sprint Corporation  Directors'  Deferred Fee 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 Directors'

Deferred Fee Plan adopted February 12, 1985.

 

2.20 Plan Administrator.  "Plan Administrator" means the person appointed by the

Company to represent the Company in the administration of this Plan.

 

2.21 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.

 

 

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2.22 Recapitalization Date. "Recapitalization Date" means November 23, 1998.

 

2.23 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.

 

2.24 Spouse.  "Spouse"  means a  Participant's  wife or husband who was lawfully

married  to the  Participant  upon the  Participant's  death or  severance  from

service.

 

2.25 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 Plan Administrator.  Decisions of the Plan Administrator may

be reviewed by the Company  through the Committee.  Members of the Committee may

be  Participants  under this Plan.  The Company shall also 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.

 

3.2  Binding  Effect of  Decisions.  The  decision  or action of the  Company in

respect  to  any  question   aris  ing  out  of  or  in   connection   with  the

administration,  interpretation,  and  application of the Plan and the rules and

regulations promulgated hereunder shall be final and conclusive and binding upon

all persons  having any interest in the Plan unless a written appeal is received

by the Company  within  sixty days of the  disputed  action.  The appeal will be

reviewed by the  Committee,  and its decision  shall be final,  conclusive,  and

binding on the Participant and on all persons claiming by, through, or under the

Participant.

 

                                   ARTICLE IV

                                  PARTICIPATION

 

4.1  Participation.  Participation in the Plan shall be limited to New Directors

and  Directors,  under age 70, who elect to  participate in the Plan by filing a

Participation  Agreement with the Company.  A New Director shall become eligible

to participate  in the Plan on the first day of the calendar  month  immediately

following the date on which the New Director

 

 

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has served 15 days on the  Board.  Except as  provided  below,  a  Participation

Agreement  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's  participation under the agreement will commence. The election

to participate  shall apply to Fees earned on or after the first day of the Plan

Year  following  receipt by the  Company of a properly  completed  and  executed

Participation  Agreement.  With  respect  to an  individual  becoming a Director

during a Plan Year who thereby  becomes  eligible to participate in the Plan, an

initial Participation Agreement may be filed within 30 days of the date on which

the  Director  becomes  eligible,  and such  election  to  participate  shall be

effective on the first day of the month following the Company's receipt thereof,

except that  elections  not  received by the Company  before the 15th day of any

calendar  month shall be  effective  no earlier than the first day of the second

month following the month of receipt.

 

4.2 Amount of Deferral and Length of  Participation.  A Participant may elect in

any Participation Agreement to defer up to 100% of the Fees that are expected at

the time of  election  to be earned in the Plan Year to which the  Participation

Agreement   relates  and  all  subsequent   Plan  Years  until  changed  by  the

Participant's  filing of a new  Participant  Agreement,  provided,  the  minimum

amount of Fees that may be deferred  shall,  in each case, be $5,000 per year or

100% of Fees payable, whichever is less.

 

(a)  The deferral percentage in each Participation Agreement shall be applied to

     the Participant's Fees earned during the period of election.

 

(b)  A Participant's election to defer Fees shall be irrevocable upon the filing

     of the respective  Participation  Agreement;  provided,  however,  that the

     deferral of Fees under any  Participation  Agreement  may be  suspended  or

     amended as provided in paragraphs 7.3 or 9.1.

 

If a Participant desires to change the percentage of Fees deferred or desires to

cease deferring Fees, the Participant must file a new  Participation  Agreement.

Such new  Participation  Agreement must be filed no later than the last business

day of the calendar  year  immediately  preceding the Plan Year in which the new

Participation Agreement is to take effect. The new Participation Agreement shall

be effective as to Fees earned in Plan Years beginning after the last day of the

Plan Year in

 

 

 

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which  the  agreement  is  filed  with  the  Company.   Any   previously   filed

Participation  Agreement will no longer apply to the deferral of fees.  Only one

Participation  Agreement  will be in effect for new deferrals in each Plan Year.

In the event a Participant  elects to defer Fees pursuant to a new Participation

Agreement,  the new  election  shall be  treated as an  arrangement  for which a

separate  Deferred  Benefit  Account shall be maintained  and separate  Deferral

Benefits shall be payable.

 

                                    ARTICLE V

                                  DEFERRED FEES

 

5.1 Elective  Deferred  Fees.  The amount of Fees 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  throughout each Plan Year as the

Participant is paid. The amount  credited to a  Participant's  Deferred  Benefit

Account shall equal the amount  deferred,  except to the extent that the Company

is required to withhold any taxes or other amounts related to the  Participant's

deferred  fees  pursuant  to any  federal,  state or  local  law.  In the  event

withholding is required, the amount required to be withheld shall first be taken

from the Participant's  fees that have not been deferred.  If these fees are not

sufficient to meet the withholding obligation,  the remainder will be taken from

the amount deferred.

 

5.2 Vesting of Deferred  Benefit Account. 

 

(a)  Vesting  provisions  before  February 8, 2005.  Participants  shall be 100%

vested in their Deferred  Benefit  Accounts,  except for the Account B resulting

from a One Time Grant.  The Share Units granted as part of a One Time Grant will

vest at the rate of 50% on the fifth anniversary of the  Participant's  election

as a Director and 10% per year on the sixth through tenth  anniversaries of such

election.  The Share Units  resulting from dividend  credits on such Share Units

will vest at the same time as such Share Units  vest.  Any Share Units that have

not vested at the time of the Participant's termination of service as a Director

shall be forfeited.

 

(b) Vesting provisions on and after February 8, 2005. Participants shall be 100%

vested in their Deferred  Benefit  Accounts,  except for the Account B resulting

from a One Time  Grant.  The Share  Units  granted  as part of a One Time  Grant

(including One Time Grants made before February 8, 2005) shall be 100% vested on

the third  anniversary of the  Participant's  election as a Director,  except as

follows:

 

 

 

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     (1) if a  Participant  departs  from the  Board  at his or her  convenience

before the third anniversary,  the One Time Grant would vest on a pro rata basis

in a  proportional  amount  equivalent  to the  number of full  years of service

completed since the grant date;

 

     (2) If a Participant  departs from the board because of a change in control

(as defined in the 1997 Long-term Stock Incentive  Program),  a change in policy

or  otherwise  at the  convenience  of the Board,  vesting of the One Time Grant

would accelerate upon his or her departure.

 

     The Share Units  resulting  from dividend  credits on such Share Units will

vest at the same time as such Share  Units  vest.  Any Share Units that have not

vested at the time of the  Participant's  termination  of  service as a Director

shall be forfeited.  The vesting  provided for in this Section  5.2(b) shall not

apply to any amount that was earned and vested as of December 31, 2004  pursuant

to Section 5.2(a).

 

     If any vesting under this Section 5.2(b) is treated as a parachute  payment

within the meaning of section 280G of the Internal  Revenue Code  ("280G"),  and

together with all other payments or benefits contingent on the change in control

within the meaning of 280G,  results in any portion of such payments or benefits

not being  deductible by the Company as a result of the application of 280G, the

benefits shall be reduced until the entire amount of the benefits is deductible.

The reduction  shall be effected by reduction of the benefits under the One Time

Grant,  the exclusion of acceleration of vesting of equity grants under the 1997

Long-term Stock Incentive Program,  or portions thereof, in the order elected by

Participant  until no portion of such  benefits  is rendered  non-deductible  by

application of 280G.

 

                                   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  Fees  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

 

 

 

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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 initial election shall be made by a properly executed  Participation

Agreement.  An election to change the  apportionment of deferred amounts between

Accounts A and B may be made by a Participant filing with the Plan Administrator

a revised  Participation  Agreement indicating such change on or before the last

business day of a calendar year. The revised  Participation  Agreement  shall be

deemed  a  continuation  of the  initial  Participation  Agreement  to  which it

relates. The revised Participation  Agreement shall be effective for Fees earned

in Plan Years beginning after the date it is filed.

 

Deferrals in such Plan Years shall be credited in  accordance  with the election

of the revised Participation Agreement.

 

6.3 Creation of Accounts AA, BB, D, and DD.

 

(a)  Accounts AA and BB. As of the start of busines