EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered into June 26,
2007 effective as of July 9, 2007 (the “Effective
Date”), by and between Sprint Nextel Corporation, a Kansas
corporation (the “Company”) on behalf of itself and any
of its subsidiaries, affiliates and related entities, and Keith O.
Cowan (the “Executive”) (the Company and the Executive,
collectively, the “Parties,” and each, a
“Party”). Certain capitalized terms are defined in
Section 29.
WITNESSETH :
WHEREAS, the Company desires to
employ the Executive in the position and on the terms and
conditions set forth below and the Executive desires to accept such
employment;
WHEREAS, the Executive and the
Company desire to enter into this Agreement; and
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 agree as follows:
1. Employment .
(a) The
Company will employ the Executive and the Executive will 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 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 36 months commencing on the
Effective Date and shall continue through the third anniversary of
the Effective Date (the “Initial Employment Term”). 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 12 months (each, a
“Renewal Term”), unless not less than 12 months
prior to the end of the Initial Employment Term or any Renewal
Term, either the Executive or the Company has given the other
written notice (in accordance with Section 20) of nonrenewal.
The Executive shall provide the Company with written notice of his
intent to terminate employment with the Company at least
30 days prior to the effective date of such termination.
3. Position and Duties of
the Executive.
(a) The
Executive shall serve as President-Strategic Planning and Corporate
Initiatives, and agrees to serve as an officer of any enterprise
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 of the Company or the Chairman of the Board. The
Executive shall have such duties, responsibility and authority
commensurate with the Executive’s title and position, and
such additional duties and responsibilities, as may be assigned to
the Executive from time to time by the Chief Executive Officer, the
Board or such other officer of the Company as may be designated by
the Chief Executive Officer or the Board.
(b) During
the Employment Term, the Executive shall, except as may from time
to time be otherwise agreed to in writing by the Company, during
reasonable vacations (as set forth in Section 7 hereof) and
authorized leave and except as may from time to time otherwise be
permitted pursuant to Section 3(c), 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 Bylaws 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 designated by the Board, or the Chief Executive Officer, in
each case, within the framework of the Company’s policies and
objectives.
(c) During
the Employment Term, and provided that such activities do not
contravene the provisions of Section 3(a) or Sections 10, 11,
12 or 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, subject to the prior
approval of the Chief Executive Officer serve as a member of the
governing board of any such organization or any private or public
for-profit company. 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 an annual base salary of $725,000, (the
“Base Salary”), which Base Salary shall be payable at
the times and in the manner consistent with the Company’s
general policies regarding compensation of the Company’s
senior executives. The Base Salary will be reviewed periodically by
the Compensation Committee and may be increased (but not decreased,
except for across-the-board reductions generally applicable to the
Company’s senior executives) from time to time in the sole
discretion of the Compensation Committee.
(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
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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 be entitled to
participate in the STIP, with such opportunities as may be
determined by the Compensation Committee in its sole discretion
(“Target Bonuses”), and as may be increased (but not
decreased, except for across-the-board reductions generally
applicable to the Company’s senior executives) from time to
time, and the Executive shall be entitled to receive full payment
of any award under the STIP, determined pursuant to the STIP (a
“Bonus Award”).
(A) 2007
STIP . The Executive’s Target Bonus for 2007 shall be
$906,250. The Bonus Award for 2007 will not be prorated for the
portion of the STIP performance period before the Effective Date
and will be the greater of Target Bonus or the Bonus Award based on
actual performance.
(iii) Long-Term Performance
Bonus . During the Employment Term, the Executive shall be
entitled to participate in the LTSIP with such opportunities, if
any, as may be determined by the Compensation Committee
(“LTSIP 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 as performance-based compensation under Section 162(m) of
the Internal Revenue Code of 1986, as amended (the
“Code”).
(c)
Equity Compensation . The Executive shall 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. During the
Employment Term, the Compensation Committee may, in its sole
discretion, grant equity awards to the Executive, which would be
subject to the terms of the respective award agreements evidencing
such grants and the applicable plan or program.
(i) 2007 LTSIP . The
Compensation Committee hereby authorizes the grant of a pro-rated
award to the Executive, as of the Effective Date, of an option
right to purchase 157,828 shares of the Company’s
Series 1 common stock $2.00 par value (the “Common
Stock”) at an option price equal to the closing price
of
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the Common
Stock on the Effective Date and 56,844 performance-based restricted
stock units. These awards will be governed by the terms of the
Evidence of Award attached as Exhibit A to this
Agreement.
(ii) Sign-on Equity . The
Compensation Committee hereby authorizes the grant to the
Executive, as of the Effective Date, of an option right to purchase
315,657 shares of Common Stock at an option price equal to the
closing price of the Common Stock on the Effective Date and 113,688
restricted stock units. These awards will be governed by the terms
of the Evidence of Award attached as Exhibit B to this
Agreement.
(iii) 2008 LTSIP . Subject to
approval by the Compensation Committee, the Executive will the
eligible to participate in the 2008 LTSIP at a target award of
$5 million.
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, dental,
vision, 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.
(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.
(c) If,
by reason of entering into this Agreement and becoming an employee
of the Company, the Executive forfeits any compensation from his
former employer, AT&T Inc., or any of its present or former
subsidiaries (collectively “AT&T Inc.”) that was
previously vested but not yet paid, or he is required to repay
compensation from AT&T Inc., the Company will pay the Executive
promptly following his providing the Company with satisfactory
documentation thereof, an amount in cash equal to the sum of any
such amounts.
(d) If
the Executive elects to continue coverage under his former
employer’s group health plan pursuant to the provisions of
Section 4980B of the Code for the period before he becomes
eligible to participate in the Company’s group health plans,
the Company will reimburse the Executive for any premiums paid by
the Executive for such continuation coverage.
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.
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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 participate in the Company’s vacation policy in
accordance with the Company’s policy generally 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 Fairfax County, Virginia (the “Place of
Performance”), except for travel reasonably required for
Company business or for work performed at an appropriate
alternative location. Within 15 months of the Effective Date,
the Executive will establish a secondary residence in the area
surrounding the Executive’s Place of Performance, in
accordance with the Company’s relocation policy. If the
Company relocates the Executive’s place of work more than 50
miles from his place of work prior to such relocation, the
Executive shall relocate the secondary residence within (a) 50
miles of such relocated executive offices or (b) such total
miles that does not exceed the total number of miles the Executive
commuted to his place of work prior to relocation of the
Executive’s place of work. In establishing a secondary
residency as provided in this Section 8, the Executive shall
be eligible to participate in the Company’s Executive —
New Employee Relocation Program. Exceptions to the program will be
limited to interim living arrangements not to exceed $10,000 per
month and shall be administered in a manner consistent with the
Company’s normal exception process subject in each case to
approval by the Chief Executive Officer.
9. Termination .
(a)
Termination by the Company for Cause or Resignation by the
Executive Without Good Reason . If, during the Employment Term,
the Executive’s employment is terminated by the Company for
Cause, or if the Executive resigns without Good Reason, 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 accrued but unpaid cash compensation and vested
benefits under any Employee Plan in accordance with the terms of
such Employee Plan and applicable law.
(b)
Termination by the Company Without Cause or Resignation by the
Executive for Good Reason outside of the CIC Severance Protection
Period . If, during the Employment Term, the Executive’s
employment is terminated by the Company without Cause or the
Executive terminates for Good Reason prior to or following
expiration of the CIC Severance Protection Period, the Executive
shall be entitled to receive from the Company 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 conditioned upon the Executive delivering to
the Company a release in a form reasonably satisfactory to the
Company with all periods for revocation expired, 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, during the Payment Period,
the Executive shall be entitled to:
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(i) receive from the Company periodic
payments equal to his Base Salary in effect prior to the
termination of his employment in accordance with the
Company’s normal payroll practices;
(ii) (A) receive a pro rata
payment of the Bonus Award for the portion of the Company’s
fiscal year prior to the date of termination of his employment, (B)
receive a pro rata payment of the Capped Bonus Award for the
portion of the Company’s fiscal year following the date of
termination of his employment, (C) receive for the next fiscal year
following the fiscal year during which termination of his
employment occurs, the Capped Bonus Award; and (D) receive
payment of a pro rata portion of the Capped Bonus Award for the
second year following the fiscal year during which the
Executive’s employment terminates (for purposes of this
Section 9(b)(ii) any pro rata payment shall be determined based on
the methodology for determining pro rated awards under the STIP);
provided , however , that to the extent the
Executive’s employment is terminated for Good Reason due to a
reduction of the Executive’s Target Bonus, in accordance with
Section 29(x)(ii), the Executive’s Target Bonus for the
purposes of this Section 9(b)(ii) shall be the
Executive’s Target Bonus immediately prior to such
reduction;
(iii) continued participation at
then-existing participation and coverage levels for 24 months
in the Company’s medical, dental, vision and employee life
insurance plans comparable to the terms in effect from time to time
for the Company’s senior executives, including any co-payment
and premium payment requirements, except that (A) following
such period, the Executive shall retain any rights to continue
coverage under the Company’s medical, dental, vision and
employee life insurance plans under the benefits continuation
provisions pursuant to Section 4980B of the Code by paying the
applicable premiums of such plans; (B) the Executive shall no
longer be eligible to receive the benefits otherwise receivable
pursuant to this Section 9(b)(iii) as of the date that the
Executive becomes eligible to receive comparable benefits from a
new employer; and (C) the Company will not provide for cash in
lieu of benefits under this Section 9(b)(iii); and
(iv) receive outplacement services by
a firm selected by the Company at its expense in an amount not to
exceed $35,000, and the Company will not provide for cash in lieu
of this benefit.
(c)
Termination by the Company Without Cause or Resignation by the
Executive for Good Reason During the CIC Severance Protection
Period . If prior to the expiration of the Employment Term and
during the CIC Severance Protection Period, the Executive’s
employment is terminated by the Company without Cause or the
Executive terminates his employment for Good Reason, subject to the
terms and conditions of the CIC Severance Plan, the Executive shall
be entitled to severance compensation and benefits pursuant to the
terms of the CIC Severance Plan. To the extent that the Executive
is not a Participant in the CIC Severance Plan at the time of
termination, the Executive shall be entitled to severance
compensation and benefits pursuant to the terms of Section
9(b).
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(d)
Termination by Death . If the Executive dies during the
Employment Term, the Executive’s employment will terminate
and the Executive’s beneficiary or if none, the
Executive’s estate, shall be entitled to receive from the
Company, the Executive’s accrued, but unpaid Base Salary
through the date of termination of employment and any vested
benefits under any Employee Plan in accordance with the terms of
such Employee Plan and applicable law.
(e)
Termination by Disability . If the Executive becomes
Disabled, prior to the expiration of the Employment Term, the
Executive’s employment will terminate and the Executive shall
be entitled to:
(i) receive periodic payments of Base
Salary in the same frequency as the Company’s payroll
schedule for 12 months (reduced by any amounts paid under a
long-term disability plan (“LTD Plan”) now or hereafter
sponsored by the Company (calculated on a monthly basis));
and
(ii) continued participation at
then-existing participation and coverage levels for 12 months
in the Company’s medical, dental, vision and employee life
insurance plans comparable to the terms in effect from time to time
for the Company’s senior executives, including any co-payment
and premium payment requirements; provided , however
, that the Company will not provide for cash in lieu of these
benefits under this Section 9(e)(ii).
(f)
No Mitigation Obligation . No amounts paid under
Section 9 will be reduced by any earnings that the Executive
may receive from any other source. The Executive’s coverage
under the Company’s medical, dental, vision and employee life
insurance plans will terminate as of the date that the Executive is
eligible for comparable benefits from a new employer. The Executive
shall notify the Company within 30 days after becoming
eligible for coverage of any such benefits.
(g)
Forfeiture . Notwithstanding the foregoing, any right of the
Executive to receive termination payments and benefits hereunder
shall be forfeited to the extent of any amounts payable after any
breach of Section 10, 11, 12, 13 or 15 by the Executive.
10. Confidential
Information; Statements to Third Parties.
(a) During
the Employment Term and on a permanent basis upon and following
termination of the Executive’s employment, the Executive
acknowledges that:
(i) all information, whether reduced
to writing (or in a form from which information can be obtained,
translated, or derived into reasonably usable form) or not and
whether compiled or created by the Company, any of its Subsidiaries
or any affiliates of the Company or its Subsidiaries (collectively,
the “Company Group”), which derives independent
economic value from not being readily known to or ascertainable by
proper means by others who can obtain economic value from the
disclosure or use of such information, of a proprietary, private,
secret or confidential (including, without exception, inventions,
products, processes, methods, techniques, formulas, compositions,
compounds, projects, developments, sales strategies, plans,
research data, clinical data, financial data,
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personnel data,
computer programs, customer and supplier lists, trademarks, service
marks, copyrights (whether registered or unregistered), artwork,
and contacts at or knowledge of customers or prospective customers)
nature concerning the Company Group’s business, business
relationships or financial affairs (collectively,
“Proprietary Information”) shall be the exclusive
property of the Company Group.
(ii) the Proprietary Information of
the Company Group gained by the Executive during the
Executive’s association with the Company Group was or will be
developed by and/or for the Company Group through substantial
expenditure of time, effort and money and constitutes valuable and
unique property of the Company Group;
(iii) reasonable efforts have been
put forth by the Company Group to maintain the secrecy of its
Proprietary Information;
(iv) such Proprietary Information is
and will remain the sole property of the Company Group; and
(v) any retention or use by the
Executive of Proprietary Information after the termination of the
Executive’s services for the Company Group will constitute a
misappropriation of the Company Group’s Proprietary
Information.
(b) The
Executive further acknowledges and agrees that he will take all
affirmative steps reasonably necessary or required by the Company
to protect the Proprietary Information from inappropriate
disclosure during and after his employment with the Company.
(c) The
Executive further agrees that all files, letters, memoranda,
reports, records, data, sketches, drawings, laboratory notebooks,
program listings, or other written, photographic, electronic, or
other tangible material containing or constituting Proprietary
Information, whether created by the Executive or others, which
shall come into his custody or possession, regardless of medium,
shall be and are the exclusive property of the Company to be used
by him only in the performance of his duties for the Company. All
such materials or copies thereof and all tangible things and other
property of the Company Group in the Executive’s custody or
possession shall be delivered to the Company (to the extent the
Executive has not already returned) in good condition, on or before
five business days subsequent to the earlier of: (i) a request
by the Company or (ii) the Executive’s termination of
employment for any reason or Cause, including for nonrenewal of
this Agreement, Disability, termination by the Company or
termination by the Executive. After such delivery, the Executive
shall not retain any such materials or portions or copies thereof
or any such tangible things and other property and shall execute
any statements or affirmations of compliance under oath that the
Company may require.
(d) The
Executive further agrees that his obligation not to disclose or to
use information and materials of the types set forth in
Sections 10(a), 10(b) and 10(c) above, and his obligation to
return materials and tangible property, set forth in Section 10(c)
above, also extends to such types of information, materials and
tangible property of customers of the Company Group, consultants
for the Company Group, suppliers to the Company Group, or other
third
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parties
who may have disclosed or entrusted the same to the Company Group
or to the Executive.
(e) The
Executive further acknowledges and agrees that he will continue to
keep in strict confidence, and will not, directly or indirectly, at
any time, disclose, furnish, disseminate, make available, use or
suffer to be used in any manner any Proprietary Information of the
Company Group without limitation as to when or how the Executive
may have acquired such Proprietary Information and that he will not
disclose any Proprietary Information to any person or entity other
than appropriate employees of the Company or use the same for any
purposes (other t
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