Exhibit 10.26.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “Agreement”) is made and entered into
as of December 31, 2008, by and between Sprint Nextel
Corporation, a Kansas corporation (the “Company”), and
Robert L. Johnson (the “Executive”) and amends and
restates the Employment Agreement (the “Original Employment
Agreement”), originally entered into as of April 1, 2004
(the “Effective Date”), by and between Nextel
Communications, Inc., a Delaware corporation, and a subsidiary of
the Company, and the Executive (the Company and the Executive,
collectively, the “Parties,” and each, a
“Party”). Certain capitalized terms are defined in
Section 30.
WITNESSETH
:
WHEREAS, the Executive serves the
Company as its Chief Service Officer;
WHEREAS, the Executive and Nextel
Communications, Inc. are parties to a Nextel Confidentiality
Agreement dated November 15, 1998 (the “Confidentiality
Agreement”); and
WHEREAS, the Executive and the
Company desire to amend and restate the Original Employment
Agreement as provided herein.
NOW, THEREFORE, in consideration of
the premises and of the covenants and agreements set forth herein
and for other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the Company and the
Executive hereby amend and restate the Original Employment
Agreement as follows:
1. Employment .
(a) The Company will continue to
employ the Executive and the Executive will continue to be employed
by the Company upon the terms and conditions set forth
herein.
(b) The employment relationship
between the Company and the Executive shall be governed by the
general employment policies and practices of the Company, including
without limitation, those relating to the Company’s Code of
Corporate Conduct, confidential information and avoidance of
conflicts, except that when the terms of this Agreement differ from
or are in conflict with the Company’s general employment
policies or practices, this Agreement shall control.
2. Term . Subject to
termination under Section 9, the Executive’s employment
shall be for an initial term of thirty-six (36) months
commencing on the Effective Date and shall continue through the
third anniversary of the Effective Date (the “Employment
Term”); provided , however , that at the end of
the initial Employment Term and on each succeeding anniversary of
the Effective Date, the Employment Term will be automatically
extended by an additional twelve (12) months, unless, not less
than twelve (12) months prior to the end of the initial
Employment Term or any such succeeding anniversary date either the
Executive or the Company has given the other written notice of
nonrenewal.
3. Position and Duties of the
Executive .
(a) The Executive serves as the
Senior Vice President, National Field Operations of the Company,
and agrees to serve as an officer and/or agrees to be an employee
of any Subsidiary as may be requested from time to time by the
Board of Directors of the Company (the “Board”), any
committee or person delegated by the Board or the Chief Executive
Officer of the Company (the “Chief Executive Officer”).
In such capacity, the Executive shall report directly to the Chief
Executive Officer or the Chief Operating Officer of the Company.
The Executive shall perform such duties as may be delineated in the
By-laws of the Company, and such other duties commensurate with the
Executive’s title and position, as may be assigned to the
Executive from time to time by 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,
“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.
Notwithstanding the foregoing, for purposes of the first sentence
of this Section 3(a), “Subsidiary” shall mean any
affiliate with which the Company would be considered a single
employer as described in the definition of Separation from
Service.
(b) Throughout the Employment Term,
the Executive shall, except as may from time to time be otherwise
agreed in writing by the Company and during reasonable vacations as
set forth in Section 7 hereof and authorized leave, devote his
best efforts, full attention and energies during his normal working
time to the business of the Company, any duties as may be
delineated in the Company’s By-laws for the Executive’s
position and title and such other related duties and
responsibilities as may from time to time be reasonably prescribed
by the Board, any committee or person delegated by the Board, or
the Chief Executive Officer, in each case, within the framework of
the Company’s policies and objectives.
(c) Throughout the Employment Term,
and provided that such activities do not contravene the provisions
of Section 3(a) or Sections 10, 11, 12 and 13 hereof and
provided further the Executive does not engage in any other
substantial business activity for gain, profit or other pecuniary
advantage which materially interferes with the performance of his
duties hereunder, the Executive may participate in any
governmental, educational, charitable or other community affairs
and serve as a member of the governing board of any such
organization or of up to three (3) private or public for
profit companies, subject in each case to the prior approval of the
Chief Executive Officer. The Executive may retain all fees and
other compensation from any such service, and the Company shall not
reduce his compensation by the amount of such fees.
4. Compensation .
(a) Base Salary . During the
Employment Term the Company shall pay to the Executive a base
salary of not less than his base salary as of the Effective Date
(the “Base Salary”), payable at the times and in the
manner consistent with the Company’s general policies
regarding compensation of senior executive employees. The Base
Salary will be reviewed not less than annually by the Chief
Executive Officer and may be increased (but not decreased) in the
Chief Executive Officer’s sole discretion. The
Executive’s position shall be classified as pay grade EX3 or
better (as adjusted for any changes to the Company’s system
of classifying employees by salary grade level implemented
subsequent to the Effective Date).
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(b) Incentive Compensation
.
(i) The Executive will continue to
be eligible to participate in any short-term and long-term
incentive compensation plans, annual bonus plans and such other
management incentive programs or arrangements of the Company
approved by the Board that are generally available to the
Company’s senior executives, including, but not limited to,
the STIP and the LTSIP. Incentive compensation shall be paid in
accordance with the terms and conditions of the applicable plans,
programs and arrangements.
(ii) Annual Performance Bonus
. During the Employment Term, the Executive shall continue to be
entitled to participate in the STIP, with such opportunities as may
be determined by the Chief Executive Officer (“Target
Bonuses”); provided, however, that effective for the bonus
year ending December 31, 2004 the Executive participated in
the STIP at a Target Bonus opportunity of 50% of his Base Salary
and was entitled to receive full payment of any award under the
STIP, determined pursuant to the STIP (a “Bonus
Award”).
(iii) Long-Term Performance
Bonus . During the Employment Term, the Executive shall
continue to be entitled to participate in the LTPP with such
opportunities, if any, as may be determined by the Chief Executive
Officer (“LTPP Target Award Opportunities”).
(iv) Incentive bonuses, if earned,
shall be paid when incentive compensation is customarily paid to
the Company’s senior executives in accordance with the terms
of the applicable plans, programs or arrangements.
(v) Pursuant to the Company’s
applicable incentive or bonus plans as in effect from time to time,
the Executive’s incentive compensation during the term of
this Agreement may be determined according to criteria intended to
qualify under Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”).
(c) Equity Compensation . The
Executive shall continue to be eligible to participate in such
equity incentive compensation plans and programs as the Company
generally provides to its senior executives, including, but not
limited to, the LTSIP.
(i) Options . During the
Employment Term, the Compensation Committee of the Board (the
“Compensation Committee”) may, in its sole discretion,
grant stock options to the Executive, which would be subject to the
terms of the respective option agreements evidencing such
grants.
(ii) Deferred Shares . The
Compensation Committee awarded to the Executive 90,000 Deferred
Shares (as such term is defined in the Incentive Equity Plan) of
common stock of the Company, par value $.001 per share
(“Common
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Stock”), (the
“Deferred Shares Award”) in three (3) tranches as
follows: 30,000 Deferred Shares as of the Effective Date (the
“Tranche 1 Shares”), 30,000 Deferred Shares as of the
date of a Compensation Committee meeting in February 2005 (the
“Tranche 2 Shares”) and 30,000 Deferred Shares
immediately upon the Change of Control (as defined in the Incentive
Equity Plan) of Nextel Communications, Inc. that occurred in 2005
(the “Tranche 3 Shares”). Subject to the terms and
conditions of the Deferred Shares Award agreement evidencing each
such Tranche, one-third ( 1 / 3 ) of the Tranche 1 Shares
vested and became nonforfeitable on the first anniversary of the
Effective Date, and the remaining two thirds of the Tranche 1
Shares and the remaining tranches of the Deferred Shares Award
immediately vested and became nonforfeitable upon the
aforementioned Change of Control.
5. Benefits .
(a) During the Employment Term, the
Company shall make available to the Executive, subject to the terms
and conditions of the applicable plans, participation for the
Executive and his eligible dependents in (i) Company-sponsored
group health, major medical, pension and profit sharing, 401(k) and
employee welfare benefit plans, programs and arrangements (the
“Employee Plans”) and such other usual and customary
benefits in which senior executives of the Company participate from
time to time, and (ii) such fringe benefits and perquisites as
may be made available to senior executives of the Company as a
group, including but not limited to, long-term disability
insurance, life insurance coverage and the CIC Severance
Plan.
(b) The Executive acknowledges that
the Company may change its benefit programs from time to time,
which may result in certain benefit programs being amended or
terminated for its senior executives generally.
6. Expenses . The Company
shall pay or reimburse the Executive for reasonable and necessary
business expenses incurred by the Executive in connection with his
duties on behalf of the Company in accordance with the
Company’s Enterprise Financial Services Employee Travel and
Expense Policy, as may be amended from time to time, or any
successor policy, plan, program or arrangement thereto and any
other of its expense policies applicable to senior executives of
the Company, following submission by the Executive of reimbursement
expense forms in a form consistent with such expense
policies.
7. Vacation . In addition to
such holidays, sick leave, personal leave and other paid leave as
is allowed under the Company’s policies applicable to senior
executives generally, the Executive shall be entitled to twenty
(20) days of vacation per 12-month period and subject to the
terms and conditions of the Company’s vacation policy
applicable to senior executives. The duration of such vacations and
the time or times when they shall be taken will be determined by
the Executive in consultation with the Company.
8. Place of Performance . In
connection with his employment by the Company, the Executive shall
be based at the principal executive offices of the Company in the
vicinity of Overland Park, Kansas, except for travel reasonably
required for Company business. If the
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Company relocates his place of work more than 30
miles, the Executive shall relocate to a residence within 30 miles
of such relocated executive offices, subject, however, to
reimbursement of the Executive’s relocation expenses in
accordance with the Company’s relocation policy applicable to
senior executives.
9. Termination .
(a) Termination by the Company
for Cause or Resignation by the Executive Without Good Reason .
If, prior to the expiration of the Employment Term, the
Executive’s employment is terminated by the Company for
Cause, as defined in Section 9(d), or if the Executive resigns
from his employment hereunder without Good Reason, as defined in
Section 9(f), the Executive shall not be eligible to receive
Base Salary or to participate in any Employee Plans with respect to
future periods after the date of such termination or resignation
except for the right to receive vested benefits under any Employee
Plan in accordance with the terms of such Employee Plan.
(b) Termination by the Company
Without Cause or Resignation by the Executive for Good Reason .
If, prior to the expiration of the Employment Term, the
Executive’s employment is terminated by the Company without
Cause or the Executive terminates his employment hereunder for Good
Reason and such termination constitutes a Separation from Service,
the Executive shall be entitled to receive from the Company:
(1) the Executive’s accrued, but unpaid, Base Salary
through the date of termination of employment, payable in
accordance with the Company’s normal payroll practices, and
(2) conditioned upon the Executive executing a Release within
the Release Consideration Period and delivering it to the Company
with the Release Revocation Period expired without revocation,
notwithstanding any provision in the terms of any incentive
compensation plan or agreement to the contrary, in full
satisfaction of the Executive’s rights and any benefits the
Executive might be entitled to under the Separation Plan and this
Agreement, unless otherwise specified herein, the Executive shall
be entitled to:
(i) periodic
payments equal to his Base Salary in effect prior to termination of
employment, which payments shall be paid in equal installments on
the regular payroll dates under the Company’s payroll
practices applicable to the Executive on the date of this Agreement
for the greater of the remainder of the Employment Term or
twenty-four (24) months (the “Severance Period”)
following the Separation from Service, except that (A) if the
Release Consideration and Revocation Period ends on or after
December 15 th of the calendar year of the
Executive’s Separation from Service, such installments that
are otherwise payable in the calendar year of the Executive’s
Separation from Service shall be paid in a lump sum on the first
business day of the following calendar year or (B) if the
Executive is a Specified Employee, with respect to any amount
payable by reason of the Separation from Service that constitutes
deferred compensation within the meaning of Section 409A of
the Code, such installments shall not commence until after the end
of the six continuous month period following the date of the
Executive’s Separation from Service, in which case, the
Executive shall be paid a lump-sum cash payment equal to the
aggregate amount of missed installments during such period on the
first day of the seventh month following the date of the
Executive’s Separation from Service;
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(ii) continue participation in the
Company’s health care, life and long-term disability plans,
substantially on the same basis that the Executive participated in
such health care, life and long-term disability plans prior to the
termination of his employment for the Severance Period; provided,
however, that benefits otherwise receivable by the Executive
pursuant to this Section 9(b)(ii) shall be applied against the
maximum period of continuation coverage provided under
Section 4980B of the Code;
(iii)
(A) receive full payment of the Bonus Award for the
Company’s current fiscal year during which his termination of
employment occurs, (B) receive full payment of the Bonus Award
for the next fiscal year following the fiscal year during which his
termination of employment occurs and (C) receive payment of a
pro rata portion of the Bonus Award for the second year following
the fiscal year during which the Executive’s employment
terminates (such pro rata formula shall be determined based on the
number of months of service provided by the Executive during the
fiscal year during which his termination of employment occurs), in
each case at the greater of the annual Target Bonus or actual
performance for such fiscal year in accordance with the then
existing terms of such cash incentive compensation, which shall not
be payable until the Compensation Committee has determined that any
incentive targets have been achieved and the subsequent designated
payout date has arrived, and each such payment shall be payable in
accordance with the provisions of the STIP in the calendar year in
which the Bonus Award is determined, and in all events, not later
than December 31 st of the year in which each such
award is determined;
(iv) receive either
(A) a pro rata portion of any LTPP Target Award Opportunity to
which he would otherwise be entitled for the LTPP performance
period during which his termination of employment occurs (but not
for any later years) if such termination occurs during the first
year of the two-year LTPP performance period or (B) full
payment of any LTPP Target Award Opportunity to which he would
otherwise be entitled for the LTPP performance period during which
his termination of employment occurs (but not for any later years)
if such termination occurs during the second year of the two-year
LTPP performance period, in each case, in accordance with the then
existing terms of the LTPP, which shall not be payable until the
Compensation Committee has determined that any incentive targets
have been achieved and the subsequent designated payout date has
arrived, and each such payment shall be payable in accordance with
the LTPP in the calendar year in which the payment is determined,
and in all events, not later than December 31
st
of the year in which
each such award is determined;
(v) accelerated vesting of any
unvested deferred shares, restricted shares and stock options
granted to the Executive which have not otherwise vested and any
vested stock options shall remain outstanding and exercisable for
twelve (12) months following the Executive’s termination
of employment; and
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(vi) receive outplacement services
by a firm selected by the Company at its expense in an amount not
to exceed the lesser of $50,000 or 10% of the Executive’s
Base Salary, and the Company will not provide for cash in lieu of
this benefit; provided, however, that all such outplacement
services must be completed, and all payments by the Company must be
made, by December 31st of the second calendar year following
the calendar year in which the Executive’s Separation from
Service occurs.
Notwithstanding the
foregoing, if the Executive terminates his employment for Good
Reason due to the relocation of the Executive’s principal
place of work, as set forth in Section 9(f)(iii) and such
termination constitutes a Separation from Service, in lieu of
payments and benefits set forth under Section 9(b)(i), (ii),
(iii), (iv), (v) and (vi), the Executive shall be entitled to
receive (A) the compensation and benefits provided under
Sections 9(b)(i), (ii) and (iii) for a maximum period of
twelve (12) months and under Section 9(b)(v), as provided
in such provision and (B) a pro rata portion of the
Executive’s LTPP Target Award Opportunity, if any, for the
Company’s fiscal year during which the Executive’s
termination occurs (but not for any later years) payable in
accordance with the then existing terms of such cash incentive
compensation, which shall not be payable until the Compensation
Committee has determined that any incentive targets have been
achieved and the subsequent designated payout has arrived, and each
such payment shall be payable in accordance with the LTPP in the
calendar year in which the payment is determined, and in all
events, not later than December 31 st of the year in which each such
award is determined.
Notwithstanding anything in this
Section 9(b) to the contrary, to the extent the Executive has
not executed the Release within the Release Consideration Period
and delivered it to the Company, or has revoked the executed
Release within the Release Revocation Period, as determined at the
end of such Release Revocation Period, the Executive will forfeit
any right to receive the payments and benefits specified in this
Section 9(b) (other than any accrued but unpaid payments and
benefits through the date of termination of employment).
(c) Termination by Death or
Disability . If the Executive dies or becomes Disabled, as
defined in Section 9(e), prior to the expiration of the
Employment Term, the Executive’s employment will terminate,
and the Executive, or in the case of death, the Executive’s
beneficiary, or if none, the Executive’s estate, shall be
entitled to:
(i) in the event of the
Executive’s death, receive an amount equal to twelve
(12) months Base Salary payable in a lump on the date of the
Executive’s death; in the case of Disability, provided that
such termination constitutes a Separation from Service, receive
from the Company periodic payments equal to his Base Salary in
effect prior to the termination of his employment, which payments
shall be paid to the Executive in equal installments on the regular
payroll dates under the Company’s payroll practices
applicable to the Executive on the date of this Agreement for 12
months commencing on the Separation from Service date; provided,
however, that in the event that the Executive is a
Specified
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Employee, with respect to any amount
payable by reason of the Separation from Service that constitutes
deferred compensation within the meaning of Section 409A of
the Code, such installments shall commence the earlier to occur of
(A) the first business day of the seventh month following the
date of the Executive’s Separation from Service or
(B) death, except that on the first day of the seventh month
following the date of the Executive’s Separation from Service
(or the Executive’s death, if earlier), the Executive shall
be paid a lump-sum cash payment equal to the aggregate amount of
any such payments that constitutes deferred compensation within the
meaning of Section 409A of the Code that the Executive would
have been entitled to receive during the applicable period
following the Executive’s Separation from Service;
(ii) in the case of Disability,
continue participation in any health care and life plans for a
period of twelve (12) months or in the event of the
Executive’s death, receive any health care benefits under the
terms of the Employee Plans; and
(iii) receive a pro
rata portion of the Executive’s Bonus Award and LTPP Target
Award Opportunity, if any, for the Company’s fiscal year
during which the Executive’s death or Disability occurs (but
not for any later years) payable in accordance with the then
existing terms of such cash incentive compensation, which shall not
be payable until the Compensation Committee has determined that any
incentive targets have been achieved and the subsequent designated
payout has arrived, and each such payment shall be payable in
accordance with the LTPP or the STIP, as applicable, in the
calendar year in which such payments, as applicable, are
determined, and in all events, not later than
December 31 st of the year in which each such
award is determined; and
(iv) accelerated vesting of any
unvested deferred shares, restricted shares and stock options, and
payment thereof on the date of, and exercise of any unexercised
vested stock options for a period of twelve (12) months
following, Separation from Service due to the Executive’s
death or Disability;
provided , however , if the Executive also becomes
entitled to receive benefits under a long-term disability plan
(“LTD Plan”) now or hereafter paid for by the Company,
then the Executive’s disability benefits under
Section 9(c)(i) (calculated on a monthly basis) shall be
reduced by the amount of the benefits paid under such LTD
Plan.
(d) Cause . For purposes of
this Agreement, “Cause” shall mean:
(i) any act or omission constituting
a material breach by the Executive of any provisions of this
Agreement or the willful failure by the Executive to perform his
duties hereunder (other than any such failure resulting from the
Executive’s Disability), after demand for performance is
delivered by the Company that identifies the manner in which the
Company believes the Executive has not performed his duties, if,
within thirty (30) days of such demand, the Executive fails to
cure any such failure capable of being cured;
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(ii) any intentional act or
misconduct materially injurious to the Company or any Subsidiary,
financial or otherwise, or the misappropriation, fraud,
embezzlement or conversion by the Executive of the Company’s
or any of its Subsidiary’s property in connection with the
Executive’s duties or in the course of the Executive’s
employment with the Company;
(iii) the conviction or plea of no
contest of the Executive for any felony or the indictment of the
Executive for any felony involving fraud, moral turpitude,
embezzlement or theft in connection with the Executive’s
duties or in the course of the Executive’s employment with
the Company;
(iv) the commission of any
intentional or knowing violation of any antifraud provision of the
federal or state securities laws or the Board reasonably believes
that the Executive has committed any of the acts referred to in
this Section 9(d)(iv);
(v) there is a final, non-appealable
order in a proceeding before a court of competent jurisdiction or a
final order in an administrative proceeding finding that the
Executive committed any willful misconduct or criminal activity
(excluding traffic violations or other minor offenses) which
commission is materially inimical to the interests of the Company
or any Subsidiary, whether for his personal benefit or in
connection with his duties for the Company or any
Subsidiary;
(vi) current alcohol or prescription
drug abuse affecting work performance;
(vii) current illegal use of drugs;
or
(viii) violation of the
Company’s Code of Corporate Conduct.
For purposes of this Agreement, no
act or failure to act on the part of the Executive shall be deemed
“intentional” if it was due primarily to an error in
judgment or negligence, but shall be deemed
“intentional” only if 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.
(e) Disability . For purposes
of this Agreement, “Disability” or
“Disabled” shall mean:
(i) the Executive’s incapacity
due to physical or mental illness to substantially perform his
duties and the essential functions of his position, with or without
reasonable accommodation, on a full-time basis for at least six
(6) months in any 12-month period as determined by the Board
in its reasonable discretion, and within thirty (30) days
after a notice of termination is thereafter given by the Company,
the Executive shall not have returned to the full-time performance
of the Executive’s duties; or
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(ii) the Executive becomes eligible
to receive benefits under the Company’s LTD Plan;
provided , however , if the Executive shall not
agree with a determination to terminate his employment because of
Disability, the q