UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Sprint CorporationSPRINT CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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Notes:
LOGO Post Office Box
11315
[LOGO OF SPRINT APPEARS HERE]
William T. Esrey Kansas City, Missouri 64112
William T. Esrey
Chairman
March 10, 199817, 1999
Dear Stockholder:
On behalf of the Board of Directors and Management, I cordially invite you
to attend the Annual Meeting of the Stockholders of Sprint Corporation. The Annual
Meeting will be held at 10:00 a.m. on Tuesday, April 21, 1998,20, 1999, at Sprint World
Headquarters, 2330 Shawnee Mission Parkway, Westwood, Kansas. The enclosed
notice of the meeting and Proxy Statement contain detailed information about
the business to be transacted at the meeting.
The Board of Directors has nominated the three present Directors whose terms
of office expire this year to continue to serve as Directors of Class III.
Ruth M. Davis, a Director of Sprint since 1981 and a present Class II
Director, will retire when her term of office expires at the Annual Meeting.I. The
Board of Directors recommends that you vote for the nominees.
You are also being asked to approve amendments to the 1988 Employees Stock
Purchase Plan and to approve the appointment of Ernst & Young LLP as
independent auditors of Sprint for 1998.1999. The Board of Directors recommends
that you vote for these proposals.this proposal.
Three Stockholder proposals are also included in the Proxy Statement. The
proposals relate to Sprint's retirement plan for outside Directors, stock
option plans and compensation agreements contingent upon a change in control
of Sprint. For
the reasons set forth in the Proxy Statement, the Board of Directors
recommends a vote against each proposal.
The prompt return of your proxy in the enclosed business return envelope
will save Sprint additional expenses of solicitation and will help ensure that
as many shares as possible are represented.
Sincerely,
LOGO/s/ W. T. Esrey
Chairman
SPRINT CORPORATION
P.O. BOXBox 11315
KANSAS CITY, MISSOURIKansas City, Missouri 64112
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 21, 1998
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TO THE STOCKHOLDERS OF SPRINT CORPORATION:
TheNotice of Annual Meeting of the Stockholders
of----------------
Time:
10:00 a.m. (Central Daylight Time) on Tuesday, April 20, 1999
Place:
Sprint Corporation (Sprint) will
be held at the World Headquarters of Sprint,
2330 Shawnee Mission Parkway
Westwood, Kansas
on Tuesday, April 21, 1998, at 10:00 a.m. (local time) for
the following purposes:
1. ToPurpose:
.To elect three Class IIII Directors to serve for a term of three years.
2. To consider and.To approve amendments to the 1988 Employees Stock
Purchase Plan.
3. To consider and approve the appointment of Ernst & Young LLP as our independent auditors of Sprint for 1998.
4. To act upon such matters, including1999.
.To vote on three Stockholder proposals (set
forth on pages 20 through 24if presented at the Meeting.
. To conduct other business properly raised before the Meeting and any
adjournment or postponement of the accompanying Proxy Statement), as
may properly come beforeMeeting.
Record Date:
You can vote if you are a Stockholder of record at the meeting or any adjournments thereof.
The close of
business on February 23, 1998 has been designated as the record
date for the determination of Stockholders entitled to notice of and to vote
at the Annual Meeting or any adjournments thereof.
By order of the Board of Directors22, 1999.
Westwood, Kansas Don A. Jensen
March 17, 1999 Vice President and Secretary
Westwood, Kansas
March 10, 1998
YOUR VOTE IS IMPORTANT
We consider theYour vote of each Stockholder important, whatever the number
of shares held. If you are unable to attend the meeting in person, pleaseis important. Please complete, sign, date, and return your proxy
promptly in the enclosed envelope at your earliest
convenience. The prompt returnenvelope.
Table of your proxy will save expense to Sprint.Contents
Proxy Statement............................................................ 1
Stockholders who may vote................................................ 1
How to vote.............................................................. 1
How proxies work......................................................... 1
How to revoke a proxy.................................................... 1
Required vote............................................................ 2
Costs of proxy solicitation.............................................. 2
Confidential voting policy............................................... 2
Attending the meeting.................................................... 2
Stockholder proposals for next year...................................... 2
Security ownership of certain beneficial owners.......................... 3
Security ownership of Directors and executive officers................... 3
Section 16(a) beneficial ownership reporting compliance.................. 4
Election of Directors (Item 1 on Proxy Card)............................... 4
Nominees for Director.................................................... 4
Directors continuing in office........................................... 5
Directors elected by and serving at the pleasure of DT and FT............ 6
Board committees......................................................... 7
Compensation of Directors................................................ 8
Organization, Compensation and Nominating Committee report on executive
compensation............................................................ 9
Summary compensation table............................................... 12
Option grants............................................................ 13
Options exercises and fiscal year-end values............................. 16
Pension plans............................................................ 17
Employment contracts..................................................... 17
Performance graph........................................................ 19
Compensation committee interlocks and insider participation.............. 19
Selection of Independent Auditors (Item 2 on Proxy Card)................... 20
Stockholder Proposal Concerning Meeting Fees for Outside Directors (Item 3
on Proxy Card)............................................................ 20
Stockholder Proposal Concerning "Soft Dollar" Political Contributions (Item
4 on Proxy Card).......................................................... 21
Stockholder Proposal Concerning Compensation Agreements Contingent upon a
Change in Control of Sprint (Item 5 on Proxy Card)...................... 22
Other Matters to Come Before the Meeting................................... 23
SPRINT CORPORATION
P.O. BOXBox 11315
KANSAS CITY, MISSOURIKansas City, Missouri 64112
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PROXY STATEMENT
MARCH 10, 1998
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PROXIES, SOLICITATION AND VOTING
This Proxy Statement is furnishedThese proxy materials are delivered in connection with the solicitation by
the Board of Directors of Sprint Corporation, of proxies in the accompanying form to be usedvoted at theour
1999 Annual Meeting of Stockholders on April 21, 1998. Properly executed and dated
proxies received will be voted in accordance with instructions thereon. If the
proxy card is signed and returned and no instructions are given on the proxy
with respect to the matters to be acted upon,held April 20, 1999. On March 17,
1999, we commenced mailing this Proxy Statement and the shares represented byenclosed form of proxy
to Stockholders entitled to vote at the proxy will be voted for the election of the nominees for Directors designated
below, for approval of amendments to the 1988 Employees Stock Purchase Plan,
for approval of the appointment of the auditorsmeeting.
Stockholders who may vote
Stockholders of Sprint and against the
Stockholder proposals.
A Stockholder giving a proxy may revoke it at any time before it is
exercised by filing with the Secretary of Sprint an instrument of revocation
or a duly executed proxy bearing a later date. A proxy may also be revoked by
attending the Annual Meeting of Stockholders and voting in person. Attendance
at the Annual Meetingclose of Stockholders will not in and of itself constitutebusiness on February 22, 1999 may
vote at the revocation of a proxy.
In addition to solicitation by mail, proxies may be solicited by officers of
Sprint in person or by telephone. Sprint has retained D. F. King & Co., Inc.
to assist in the solicitation of proxies for an anticipated fee of $6,500 plus
out-of-pocket expenses. The cost of soliciting proxies will be borne by
Sprint.meeting. As of the recordthat date February 23, 1998, Sprint hadthere were outstanding and entitled to
vote 343,323,103 sharesthe following:
Shares Votes per
Designation Outstanding share
----------- ----------- ---------
Series 1 FON Stock ("FON Stock").................... 345,139,187 1.0000
Series 1 PCS Stock ("PCS Stock").................... 197,448,099 0.3540
Series 2 PCS Stock.................................. 195,094,340 0.0354
Series 3 PCS Stock.................................. 11,299,418 0.3540
Class A Common Stock................................ 86,236,036 1.177
Preferred Stock--First Series....................... 38,595 1.000
Preferred Stock--Second Series...................... 242,707 1.000
Preferred Stock--Fifth Series....................... 95 1.000
Preferred Stock--Seventh Series..................... 246,766 1.1513
Deutsche Telekom AG (DT) and France Telecom S.A. (FT), the holders of Common Stock, 42,615 shares of
Preferred Stock-First Series, Convertible, 256,167 shares of Preferred Stock-
Second Series, Convertible, and 95 shares of Preferred Stock-Fifth Series.
Each share of Common Stock, Preferred Stock-First Series, Convertible,
Preferred Stock-Second Series, Convertible, and Preferred Stock-Fifth Series
is entitled to one vote on each matter to be voted on at the meeting. Asall of
the record date, Sprint also had outstanding 86,236,036 shares of Class A
Common Stock. Each share ofSeries 3 PCS Stock and the Class A Common Stock, isare entitled to one vote on
each matter to be voted on at the meeting other than the election of
Directors. DT and FT have the right to elect three Directors. The holders of
all other classes of stock are entitled to vote on each matter.
The relative voting power of Sprint's different classes and series of voting
stock is determined using formulas set forth in Sprint's Articles of
Incorporation. Restated Articles were approved as part of a "tracking stock
proposal" at Sprint's Special Stockholders meeting on November 13, 1998. That
proposal called for a recapitalization of Sprint's publicly traded common
stock in which each share was reclassified into one share of FON Stock and
one-half share of PCS Stock (the "Recapitalization").
How to vote
You may vote by proxy or in person at the meeting. To vote by proxy, please
complete, sign, date, and return your proxy card in the postage-paid envelope
provided.
How proxies work
Giving your proxy means that you authorize us to vote your shares at the
meeting in the manner you direct. If you sign, date, and return the enclosed
proxy card but do not specify how to vote, we will vote your shares for the
nominees for Directors designated below, for approval of the appointment of
Sprint's auditors, and against the Stockholder proposals.
How to revoke a proxy
You may revoke your proxy before it is voted by submitting a new proxy with
a later date, or by filing an instrument of revocation with Sprint's Corporate
Secretary. You may also revoke your proxy by voting in person at the meeting.
1
Required vote
In order to carry on the business of the meeting, we must have a quorum. A
quorum requires the presence, in person or by proxy, of the holders of a
majority of the votes entitled to be cast at the meeting. We count abstentions
and broker "non-votes" as present and entitled to vote for purposes of
determining a quorum. A broker non-vote occurs when you fail to provide voting
instructions to your broker for shares you hold in "street name." Under those
circumstances, your broker may be authorized to vote for you on some routine
items but is prohibited from voting on other items. Those items for which your
broker cannot vote result in broker non-votes.
The three nominees for Director receiving the greatest number of votes at
the Annual Meeting of Stockholdersmeeting will be elected as Directors. In addition,
the holders of the Class A Common Stock, France TelecomAbstentions and Deutsche Telekom
AG, have the right to elect three Directors.broker non-votes are
not counted for this purpose.
For all other matters to be voted upon at the Annual Meeting,meeting, the affirmative vote
of a majority of shares present in person or represented by proxy, and
entitled to vote on the matter, is necessary for approval. For purposes of determining the outcome of thethis purpose,
if you vote
on these matters, an instruction to "abstain" from voting on a proposal, your shares will be treated as shares present and entitled to vote,
and will have the same effect as a voteif you voted against athe proposal. "Broker non-votes", which occur when
brokers are prohibited from exercising discretionary voting authority for
beneficial owners who have not provided voting instructions,Broker
non-votes, however, are not counted for thethis purpose of determining the number of shares present in person or
represented by proxy on a voting matter and have no effect on the
outcome of the vote.
Sprint'sCosts of proxy solicitation
We will pay the expenses of soliciting proxies. In addition to solicitation
by mail, our officers may solicit proxies in person or by telephone. We have
hired D. F. King & Co. to assist us in soliciting proxies for an anticipated
fee of $7,500 plus out-of-pocket expenses.
Confidential voting policy
Your individual vote is that all Stockholder meeting proxies, ballotskept confidential from our Directors, officers, and
voting
tabulations that identify the vote of a specific Stockholder shall, withemployees except for certain specific and limited exceptions, be kept confidential from Sprint's
Directors, officers or employees.exceptions. One exception
occurs if you write opinions or comments on your proxy card. In that case, a
copy of your proxy card is sent to us.
Attending the meeting
If you hold your shares in the name of a bank, broker, or other holder, and
you plan to attend the meeting, please bring proof of ownership with you to
the meeting. A bank or brokerage account statement showing that you owned
voting stock of Sprint on February 22, 1999 would be acceptable proof. If you
are a registered holder, no proof is required.
Stockholder proposals for next year
Sprint's Bylaws provide that the Annual Meeting of Stockholders is to be
held on the third Tuesday in April of each year. In 2000, the third Tuesday
falls on April 18.
The deadline for Stockholder proposals to be included in the Proxy Statement
for that meeting is November 18, 1999. If you intend to submit such a
proposal, it must be received by the Corporate Secretary at Sprint's principal
office, 2330 Shawnee Mission Parkway, Westwood, Kansas 66205, no later than
that date.
If you intend to bring a matter before next year's meeting other than by
submitting a proposal to be included in our Proxy Statement, you must give
timely notice according to Sprint's confidential
voting policy occurs whenBylaws. To be timely, your notice must be
received by Sprint's Corporate Secretary at 2330 Shawnee Mission Parkway,
Westwood, Kansas 66205, on or after February 3, 2000 and on or before February
28, 2000. For each matter you intend to bring before the meeting, your notice
must include a Stockholder writes comments on his or her proxy
card. This exception is designedbrief description of the business you wish to accommodatebe considered,
any material interest you have in that business, and the Stockholders who express
their opinionsreasons for
conducting that business at the meeting. The notice must also include your
name and views by writing comments on their proxy cardsaddress and expectthe class and number of shares of Sprint to receive those comments.
1that you own.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTSecurity ownership of certain beneficial owners
The following table sets forthprovides information about the only known beneficial
owners of more than five percent of each class of Sprint's outstanding voting
stock, based solely on Schedules 13G and 13D received by Sprint:Sprint and our
records:
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
-Percent
Amount and Nature of Sprint
Name and Address of of Beneficial Percent Voting
Title of Class Beneficial Owner Ownership Series of Class Power
-------------- ------------------------- ------------------------------------------- ----------------- --------- -------- ---------
FON common stock........ Capital Research and 24,688,900 shares Series 1 7.2% 4.7%
Management Company (1)
Putnam (2) 21,606,345 shares Series 1 6.3% 4.1%
PCS common stock........ DT (3) 5,649,709 shares Series 3 1.4% 0.4%
FT (4) 5,649,709 shares Series 3 1.4% 0.4%
Comcast (5) 47,248,435 shares Series 2 11.7% 0.3%
Cox (6) 49,281,981 shares Series 2 12.2% 0.3%
TCI (7) 98,563,924 shares Series 2 24.4% 0.7%
Class A Common Stock.... France Telecomcommon stock.... DT (3) 43,118,018 shares 50%
6 place d'Alleray
75505 Paris Cedex 15
France
Class A Common Stock.... Deutsche Telekom AGSeries DT 50.0% 9.6%
FT (4) 43,118,018 shares 50%
Friedrich-Ebert-Allee 140
D-53113 Bonn
Germany
Common Stock............ Putnam Investments, Inc. 21,355,53050.0% 9.6%
Preferred stock......... Comcast (5) 61,726 shares 6%
One Post Office Square
Boston, MassachusettsSeries 7 11.7% 0.0%
Cox (6) 61,726 shares Series 7 11.7% 0.0%
TCI (7) 123,314 shares Series 7 23.3% 0.0%
- --------
(1) Capital Research and Management Company, 333 South Hope Street, Los
Angeles, California.
(2) Putnam Investments, Inc., One Post Office Square, Boston, Massachusetts.
(3) DT, Friedrich-Ebert-Allee 140, D-53113 Bonn, Germany.
(4) FT, 6 place d'Alleray, 75505 Paris Cedex 15, France.
(5) Comcast Corporation, 1500 Market Street, Philadelphia, Pennsylvania.
(6) Cox Communications, Inc., 1400 Lake Hearn Drive, Atlanta, Georgia.
(7) Tele-Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood,
Colorado.
Security ownership of Directors and executive officers
The following table states the number of shares of Sprint Common StockSprint's common stock
beneficially owned, as of December 31, 1997,1998, by each current Director, each
executive officer named in the "Summary Compensation Table" and by all
Directors and executive officers as a group. The numberNone of shares beneficially
owned by all Directors and executive officers as a group represented lessthe individuals own more
than one percent0.4% of the outstanding shares.shares of FON common stock or 0.2% of the
outstanding shares of PCS common stock. As a group all the individuals own
1.1% of the outstanding FON common stock and 0.5% of the outstanding PCS
common stock. Except as otherwise indicated, each individual named has sole
investment and voting power with respect to the securities shown.
NAME NUMBER OF SHARESFON Stock PCS Stock
--------------------------- -------------------------
Shares Covered Shares Covered
Shares By Exercisable Shares By Exercisable
Name Owned Options (1) Owned Options (1)
---- ------------------------- -------------- ------- --------------
DuBose Ausley.......................................... 7,652(1)Ausley........... 7,725 9,000 3,854 4,500
Warren L. Batts........................................ 5,000(1)Batts......... 5,421 19,996 2,704 9,998
Michel Bon............................................. 0(1)
Ruth M. Davis.......................................... 2,226(1)Bon.............. 0 3,000 0 1,500
Kevin E. Brauer......... 11,025 49,135 5,552 24,568
William T. Esrey....................................... 380,424(1)(2)Esrey........ 550,470(2) 979,571 274,408(3) 489,788
Gary D. Forsee......................................... 39,486(1)
Michael B. Fuller...................................... 27,716(1)Forsee.......... 55,385 214,904 27,654 107,453
Irvine O. Hockaday, Jr................................. 1,500(1)Jr.
....................... 2,890 500 1,439 250
Harold S. Hook......................................... 16,000(1)Hook.......... 16,000 7,856 8,000 3,928
Arthur B. Krause....................................... 90,376(1)(2)Krause........ 91,864(2) 222,136 46,017(3) 111,069
Ronald T. LeMay........................................ 284,905(1)LeMay......... 314,429 366,365 157,262 183,184
Linda Koch Lorimer..................................... 1,465(1)
D. Wayne Peterson...................................... 78,378(1)Lorimer...... 1,857 37,727 772 18,865
Patti S. Manuel......... 7,472 56,482 3,772 34,251
Charles E. Rice........................................ 3,000(1)Rice......... 3,445 19,996 1,715 9,998
Ron Sommer............................................. 0(1)Sommer.............. 0 3,000 0 1,500
Stewart Turley......................................... 3,400(1)Turley.......... 3,400 19,996 1,700 9,998
All Directors and
executive officers as a
group (26 persons).......................................... 1,202,277(1)(2)..... 1,373,850(2) 2,715,739 686,171(3) 1,403,510
3
- --------
(1) Does not includeThese are shares whichthat may be acquired upon the exercise of stock options
exercisable on or within sixty days after December 31, 1997,1998, under
Sprint's stock option plans as follows: 22,500, 18,496, 1,500, 3,928,
981,674, 219,408, 126,735, 0, 18,496, 195,575, 224,828, 36,227, 107,255,
18,496, 1,500 and 18,496 shares for Messrs. Ausley, Batts, Bon, Dr. Davis,
Messrs. Esrey, Forsee, Fuller, Hockaday, Hook, Krause, LeMay, Ms. Lorimer,
Messrs. Peterson, Rice, Sommer and Turley, respectively, and 2,802,519 for
all Directors and executive officers as a group.plans.
(2) Includes shares held by or for the benefit of family members in which
beneficial ownership has been disclaimed: 16,44216,688 shares held in trust for
Mr. Esrey's children, 13,64426,656 shares ownedheld by Mr. Krause's wife, and 30,08643,344
shares held by or for the benefit of family members forof all Directors and
executive officers as a group.
2
(3) Includes shares held by or for the benefit of family members in which
beneficial ownership has been disclaimed: 9,498 shares held in trust for
Mr. Esrey's children, 13,327 shares held by Mr. Krause's wife, and 22,825
shares held by or for the benefit of family members of all Directors and
executive officers as a group.
Section 16(a) beneficial ownership reporting compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Sprint's
Directors and executive officers to file with the Securities and Exchange
Commission (SEC) and the New York Stock Exchange initial reports of ownership
and reports of changes in ownership of Sprint common stock and other equity
securities of Sprint. Directors and executive officers are required by SEC
regulations to furnish Sprint with copies of all Section 16(a) reports they
file.
To Sprint's knowledge, based solely on review of the copies of such reports
furnished to Sprint and written representations that no other reports were
required, during 1998 all Section 16(a) filing requirements applicable to its
Directors and executive officers were complied with, except that we failed to
timely report Mr. Hockaday's acquisition of 1,000 shares on June 4, 1998. As
soon as we discovered the oversight, we promptly reported the transaction.
I. ELECTION OF DIRECTORS
(Item 1 on Proxy Card)
The Board of Directors of Sprint (other than the Directors elected by the
holders of the Class A Common Stock)DT and
FT) is divided into three classes, with the term of office of each class
ending in successive years. The terms of the Directors of Class IIII expire with
this Annual Meeting of Stockholders.meeting. Each of the three nominees for Class III,I, if elected, will serve
three years until the 20012002 Annual Meeting and until a successor has been
elected and qualified. The Directors remaining in Classes I andClass II will continue in office until
the 19992000 meeting and 2000 Annual Meetings, respectively.
Except for the Directors in Class A Common Stock, each share is entitled to one vote for
each of three Directors.III will continue in office until
the 2001 meeting.
The persons named in the accompanying proxy will vote ityour shares for the
election of the nominees named below as Directors of Class IIII unless otherwise directed by the Stockholder.you direct
otherwise. Each nominee has consented to be named and to continue to serve if
elected. If any of the nominees become unavailable for election for any
reason, the proxies will be voted for the other nominees and for any
substitutes.
NOMINEES FOR DIRECTORSNominees for Director
The following information is given with respect to the nominees for
election.
Class III--Nominees to Serve Three Years Until 2001 Annual Meeting
WILLIAM T. ESREY, age 58. Chairman and Chief Executive
Officer of Sprint, Westwood, Kansas; Director of Duke
Energy Corporation, The Equitable Life Assurance Society
of the United States, Everen Capital Corporation, and
General Mills, Inc. Mr. Esrey has been Chairman of Sprint
since 1990 and Chief Executive Officer since 1985.
Director of Sprint since 1985; Chairman of the Executive
Committee.
LOGO
LINDA KOCH LORIMER, age 45. Vice President and Secretary
of the University, Yale University, New Haven,
Connecticut; Director of McGraw-Hill, Inc. Prior to
becoming Vice President and Secretary of Yale University
in 1993, Ms. Lorimer was President of Randolph-Macon
Woman's College for more than six years. Director of
Sprint since 1993; Member of the Organization,
Compensation and Nominating Committee.
LOGO
STEWART TURLEY, age 63. Retired Chairman of Eckerd
Corporation, a diversified retailer, Clearwater, Florida;
Director of Barnett Banks, Inc. and Springs Industries,
Inc. Mr. Turley had been Chairman of Eckerd Corporation
for more than five years prior to his retirement in 1997.
Director of Sprint since 1980; Chairman of the
Organization, Compensation and Nominating Committee;
Member of the Executive Committee.
LOGO
3
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
The following information is given with respect to the Directors of Classes
I and II, who will continueI--Nominees to serve as Directors of Sprintthree years until the 1999 and
2000 Annual Meetings, respectively.
Class I--Serving Until 1999 Annual Meeting
WARREN2002 meeting
Warren L. BATTS,Batts, age 65.66. Retired Chairman and Chief
Executive Officer of Tupperware Corporation, a diversified
consumer products company, Orlando, Florida. Mr. Batts is
also the retired Chairman of Premark International, Inc.,
a diversified consumer products company, Deerfield,
Illinois; DirectorIllinois. He is a director of The Allstate Corporation,
Cooper Industries, Inc. and Sears, Roebuck & Company.
Prior toBefore his retirement in 1997, Mr. Batts had been Chairman
of Premark International, Inc. since 1986 and Chairman and
Chief Executive Officer of Tupperware Corporation since
LOGO
its spin-off from Premark International, Inc. in 1996. He
has been a Director of Sprint since 1982; Chairman of the Audit
Committee; Member of the Executive Committee.
IRVINE1982.
4
Irvine O. HOCKADAY, JR.Hockaday, Jr., age 61.62. President and Chief
Executive Officer of Hallmark Cards, Inc., a manufacturer
of greeting cards, Kansas City, Missouri. DirectorHe is a director
of Dow Jones, Inc., Ford Motor Company, and UtiliCorp
United. Mr. Hockaday has been President and Chief Executive
Officer of Hallmark Cards, Inc. since 1985. He has been a
Director of Sprint since June of 1997; Member of the Audit Committee.
LOGO
RONALD1997.
Ronald T. LEMAY,LeMay, age 52.53. President and Chief Operating
Officer of Sprint, Westwood, Kansas; DirectorKansas. He is a director of
The Allstate Corporation, Ceridian Corporation, Imation
Corporation, and Yellow Corporation. Mr. LeMay has served
as President and Chief Operating Officer of Sprint since
February of 1996 except for the period from July 1997 to
October 1997 when he served as Chairman and Chief Executive
Officer of Waste Management, Inc., a provider of
comprehensive waste management services. Mr. LeMay was
Chief Executive Officer of Sprint Spectrum L.P. (Sprint PCS) from 1995
to 1996. Mr. LeMay was President and Chief Operating
Officer--Long Distance LOGO
Division of Sprint from 1989 to
1995. He was a Director of Sprint from 1993 until July 1997
and re-elected in December 1997.
Directors continuing in office.
The following information is given with respect to the Directors who are not
nominees for election at the meeting.
Class II--Serving Untiluntil 2000 Annual Meeting
HAROLDmeeting
Harold S. HOOK,Hook, age 66.67. Retired Chairman and Chief
Executive Officer of American General Corporation, a
financial services holding corporation, Houston, Texas;
DirectorTexas. He
is a director of Chase Manhattan Bank, Chase Manhattan
Corporation, Cooper Industries, Inc. and Duke Energy
Corporation. Mr. Hook was Chairman of American General
Corporation from 1978 to 1997 and Chief Executive Officer
from 1978 to 1996. He has been a Director of Sprint since
1982; Member1982.
Charles E. Rice, age 63. Vice Chairman, Corporate
Development of the Organization, Compensation and Nominating
Committee.
LOGO
4
CHARLES E. RICE, age 62. Chairman and Chief Executive
OfficerBank of Barnett Banks, Inc.,America, a bank holding company,
Jacksonville, Florida; Directorcompany. He
is a director of CSX Corporation. Before becoming Vice
Chairman, Corporate Development of Bank of America, Mr.
Rice has beenwas Chairman and Chief Executive Officer of Barnett
Banks, Inc. for more than five years. He has been a
Director of Sprint since 1975; Member1975.
5
Class III--Serving until 2001 meeting
William T. Esrey, age 59. Chairman and Chief Executive
Officer of Sprint, Westwood, Kansas. He is a director of
Duke Energy Corporation, Everen Capital Corporation,
General Mills, Inc., and Exxon Corporation. Mr. Esrey has
been Chairman of Sprint since 1990 and Chief Executive
Officer since 1985. He has been a Director of Sprint since
1985.
Linda Koch Lorimer, age 46. Vice President and Secretary of
the Organization,
CompensationUniversity, Yale University, New Haven, Connecticut.
She is a director of McGraw-Hill, Inc. Before becoming Vice
President and Nominating CommitteeSecretary of Yale University in 1993, Ms.
Lorimer was President of Randolph-Macon Woman's College for
more than six years. She has been a Director of Sprint
since 1993.
Stewart Turley, age 64. Retired Chairman of Eckerd
Corporation, a diversified retailer, Clearwater, Florida.
He is a director of Marinemax, Inc. and the Executive
Committee.
LOGOSprings Industries,
Inc. Before his retirement in 1997, Mr. Turley had been
Chairman of Eckerd Corporation for more than five years. He
has been a Director of Sprint since 1980.
Directors Electedelected by and Servingserving at the Pleasurepleasure of the holders of the Class A
Common Stock
DUBOSE AUSLEY,DT and FT.
DuBose Ausley, age 60.61. Chairman of Ausley & McMullen, a law
firm, Tallahassee, Florida; DirectorFlorida. He is a director of Capital
City Bank Group, Inc., Tampa Electric Co., Inc. and TECO
Energy, Inc. Prior toBefore becoming Chairman of Ausley & McMullen
in 1996, Mr. Ausley was Chairman of Macfarlane, Ausley,
Ferguson & McMullen since 1994 and prior to that he was
President of Ausley, McMullen, McGehee, Carothers &
Proctor, P.A. for more than five years. Mr. Ausley has also
been Chairman of the Capital City Bank Group, Inc. for more
than five years. He has been a Director of Sprint since
1993.
LOGO
MICHEL BON,Michel Bon, age 54.55. Chairman and Chief Executive Officer of
France Telecom,FT, a telecommunications company, Paris, France. Mr. Bon
became Chairman and Chief Executive Officer of France TelecomFT in
September of 1995. He served as head of France's national job-placementjob-
placement agency from 1993 to 1995 and, prior to that as Chairman and Chief
Executive Officer of Carrefour, France's largest retailer,
for more than five years.1995. He has been a Director
of Sprint since 1996;
Member of the Executive Committee.
LOGO
RON SOMMER,1996.
6
Ron Sommer, age 48.49. Chairman of the Board of Management of
Deutsche Telekom AG,DT, a telecommunications company, Bonn, Germany. Prior toBefore
becoming Chairman of Deutsche Telekom AGthe Board of Management of DT in May
of 1995, Mr.Dr. Sommer was President and Chief Operating Officer
of Sony Corporation of America beginning in 1990, and in
1993, he took over the management of Sony Europe in the
same function. He has been a Director of Sprint since
1996; Member of1996.
Board committees
During 1998, the Organization, Compensation and
Nominating Committee.
LOGO
BOARD COMMITTEES AND DIRECTOR MEETINGS
The Board of Directors held six regular meetings and one special meeting in
1997.meeting.
The Board of Directors has an Audit Committee, a Capital Stock Committee, an
Executive Committee and an Organization, Compensation and Nominating
Committee. The members of
each committee are identified in the above description of Directors. In 1997
the Audit Committee held two meetings and the Organization, Compensation and
Nominating Committee held seven meetings. Except for Mr. Hockaday, each
current DirectorHook, all Directors attended at least 75% of the
aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by
allBoard committees of the Board of Directors on which the Directorthey served during 1997.
5
1998.
The Audit Committee. The principal responsibilities of the Audit Committee
are to ensure: (a)(1) that proper accounting principles are being followed; (b)(2)
that the total audit coverage of Sprint and its affiliates is satisfactory;
and (c)(3) that an adequate system of internal controls has been implemented by
Sprint and is being effectively followed. The Audit Committee provides an open
avenue of communication between management, the external and internal auditors
and the Board of Directors. The Committeecommittee reviews the nature of all services
performed by the external auditors, including the scope and general extent of
their audit examination and the basis for their compensation. The Committeecommittee
recommends to the full Board of Directors the auditors for formal ratification by
the Stockholderswho are appointed, subject to your
approval at the Annual Meeting.meeting.
The Chairman of the Audit Committee is Mr. Batts. The other members are Mr.
Hockaday and Mr. Hook. Mr. Bon is a non-voting member. The Audit Committee met
three times in 1998.
The Capital Stock Committee. The Capital Stock Committee's role is to
interpret and oversee the implementation of the Policy Statement Regarding
Tracking Stock Matters. This policy provides generally that all material
matters as to which the holders of FON Stock and the holders of PCS Stock may
have potentially divergent interests will be resolved in a manner that the
Board determines to be in the best interests of Sprint and all of the holders
of its common stock. In making this determination, the Board will give fair
consideration to the potentially divergent interests and all other relevant
interests of the holders of the separate classes of Sprint's common stock.
The Chairman of the Capital Stock Committee is Mr. Hockaday. The other
members are Mr. Ausley, Mr. Batts, Mr. Bon, Mr. Hook, Ms. Lorimer, Mr. Rice,
Dr. Sommer, and Mr. Turley.
The Executive Committee. The principal responsibility of the Executive
Committee is to exercise powers of the Board on matters of an urgent nature
that arise between regularly scheduled Board meetings.
The Chairman of the Executive Committee is Mr. Esrey. The other members are
Mr. Batts, Mr. Bon, Mr. Rice, and Mr. Turley.
The Organization, Compensation, and Nominating Committee. The principal
responsibilities of the Organization, Compensation and Nominating Committee,
as they relate to matters of executive compensation, are to: (a)(1) assess and
appraise the performance of the Chief Executive Officer and review the
performance of executive management; (b)(2) recommend to the Board of Directors
base salaries, incentive compensation and other benefits for the Chief
Executive Officer and other key officers; (c)(3) counsel and advise management on
plans for
7
orderly development and succession of executive management; (d)(4) take any and
all action required or permitted to be taken by the Board of Directors under
the stock option and restricted stock plans, stock purchase plans, incentive
compensation plans and the deferred compensation plans of Sprint; and (e)(5)
review recommendations for major changes in compensation and benefit and
retirement plans which have applicationthat apply to significant numbers of Sprint's total employees
and which require review or approval of the Board of Directors.
The principal responsibilities of the Organization, Compensation and
Nominating Committee, as they relate to the Director nomination process, are
to: (a)(1) periodically review the size and composition of the Board of Directors and make
recommendations to the Board with respect to such matters; (b)(2) recommend to
the Board of Directors proposed nominees whose election at the next Annual Meeting of
Stockholders will be recommended by the Board of
Directors;Board; and (c)(3) recommend persons
proposed to be elected to fill any vacancy on the Board of Directors between
Stockholder meetings. The Committeecommittee will consider qualified nominees
recommended by Stockholders. Such recommendations should be sent to the
Organization, Compensation and Nominating Committee, c/o Corporate Secretary,
at the corporate headquarters of Sprint, Post Office Box 11315,2330 Shawnee Mission Parkway,
Westwood, Kansas City, Missouri 64112.
COMPENSATION OF DIRECTORS66205.
The Chairman of the Organization, Compensation and Nominating Committee is
Mr. Turley. The other members are Mr. Ausley, Ms. Lorimer, Mr. Rice, and Dr.
Sommer. The Organization, Compensation and Nominating Committee met six times
in 1998.
Compensation of Directors
Annual retainer and meeting fees. Directors who are not officersemployees of Sprint
(the Outside Directors) are each paid $35,000 annually plus $1,250 for each
meeting attended and $1,000 for each committee meeting attended. TheUnder the
1997 Long-Term Stock Incentive Program, Outside Directors can elect to use
these fees to purchase FON Stock and PCS Stock. They can also elect to have
the purchased shares deferred and placed in a trust. Sprint also maintains the
Directors' Deferred Fee Plan under which was approved at the 1997 Annual
MeetingOutside Directors may elect to defer
all or some of Stockholders, provides for the grant of stock options to Outside
Directors. Under the programtheir fees.
Stock options. On April 21, 1998, each Outside Director receives an annual grant ofwas granted an
option to purchase 2,000 shares of Common StockSprint common stock at an option price
equal to 100% of the fair market value of the Common Stock on the date of grant.that date. The options expire ten
years from the date of grant; 25%grant. Twenty-five percent of the shares subject to eachthe
option become exercisable as ofon December 31, of the year in which the
option is granted1998, and an additional 25% become
exercisable on December 31 of each of the three succeeding years. Following
the Recapitalization, the options were converted into options to purchase
2,000 shares of FON Stock and 1,000 shares of PCS Stock. Under the 1997 Long-
term Stock Incentive Program, as amended and approved at the Special
Stockholders Meeting on November 13, 1998, future option grants are made at
the discretion of the Organization, Compensation and Nominating Committee.
Retirement Benefits. In 1982 Sprint adopted a retirement plan for its
Outside Directors. Any Director of Sprint who served five years as a Director
without simultaneously being employed by Sprint or any of its subsidiaries is
eligible to receive benefits under the plan.plan on retirement. The retirement plan
was amended in December of 1996 to eliminate the retirement benefit for any
Director who had not served five years as of the date of the amendment. An
eligible Director retiring after March 30, 1989, will receive monthly benefit
payments equal to the monthly fee (not including meeting fees) being paid to
Directors at the time of the Director's retirement. The monthly retirement
benefit would be $2,917 for any Director retiring while the current $35,000
annual fee remains in effect. The number of monthly benefit payments to a
Director under the plan will equal the number of months served as a Director
without simultaneously being employed by Sprint or any of its subsidiaries, up
to a maximum of 120 payments.
6
Outside Directors of Sprint and certain of its subsidiaries are also
eligible for a Directors' Deferred Fee Plan under which Outside Directors may
elect to defer all or some of their fees. New Directors, who are not eligible for benefits under the retirement plan after
the December 1996 amendment, will
receivereceived units representing 2,500 shares of
Sprint Common Stockcommon stock credited to their accounts under the Directors'Director's Deferred
Fee Plan upon becoming a Director.Director of Sprint. Upon the Recapitalization, these
units were converted into units representing FON Stock and PCS Stock. Half of
these units will vest upon completion of five years of Board service and ten
percent will vest on each succeeding anniversary.
Under the
Long-Term Stock Incentive Program, Outside Directors can elect to use their
fees to purchase Sprint Common Stock. They can also elect to have the
purchased shares deferred and placed in a trust.Other benefits. In addition, Outside Directors are provided with Sprint
residential long distance service valued in the following amounts for 1997:1998:
Mr. Ausley, $4,609;$5,047; Mr. Batts, $2,225; Dr. Davis, $1,353;$1,213; Mr. Hockaday, $352;$894; Mr. Hook, $700;$373; Ms.
Lorimer, $2,585;$3,535; Mr. Rice, $4,228;$6,000; and Mr. Turley, $4,961.
EXECUTIVE COMPENSATION
ORGANIZATION, COMPENSATION AND NOMINATING COMMITTEE REPORT ON EXECUTIVE
COMPENSATION$3,427.
8
Organization, Compensation and Nominating Committee report on executive
compensation
The Organization, Compensation and Nominating Committee of the Board, which
is composed of independent, non-employee Directors and has the principal
responsibilities described on page 67 of this Proxy Statement, has furnished
the following report on executive compensation:
Sprint's compensation philosophy is to link, by using specific objectives,
executives' compensation to the short-term and long-term performance of Sprint
so as to maximize long-term Stockholder value. Sprint's executive compensation
program consists of four elements: (1) base salary, (2) short-term incentive
compensation, (3) long-term incentive compensation and (4) stock options. To
develop a competitive compensation package, both base salary and total
compensation (i.e., the sum of all four elements) are compared to market data
from similarly sized companies in the telecommunications industry as well as
other industries from surveys conducted by independent compensation
consultants and from proxy data. The Committee believes that the comparison
groups accurately reflect the market in which Sprint competes for executive
talent. Eleven of the 12The companies in the S&P&P(R) Telephone Utility Index and the S&P&P(R)
Telecommunications (Long Distance) Index, which are used in the Stock
Performance Graph on page 1619 of this Proxy Statement, are included in the
comparison groups. The Committee's policy is to target base salaries at the
50th percentile for base pay of similar positions within the comparison group,
and total compensation at the 75th percentile provided certain performance
objectives are achieved.
Section 162(m) of the Internal Revenue Code denies a tax deduction to any
publicly held corporation, such as Sprint, for compensation in excess of $1
million paid to any Named Officer unless such compensation is performance-
based under Section 162(m). Sprint took all action required under Section
162(m) for Sprint's incentive compensation plans to be performance-based so as
to preserve Sprint's tax deduction for compensation earned under such plans
for 1997.1998.
Base Salary. Each year the Committee makes a recommendation to the Board
establishing base pay for all Named Officers. In making this recommendation
for 1997,1998, the Committee considered the salaries of other executives within the
comparison group and the executives' performance during 1996.1997. With respect to
the latter, the Committee exercised its judgment in evaluating the executives'
accomplishments during the year. As a result of his performance evaluations
during his tenure as Chief Executive Officer, Mr. Esrey's base salary exceeds
the median of the comparison group.
Short-Term Incentive Compensation. Sprint's short-term incentive
compensation (STIC) is a performance-driven annual incentive designed to
promote the near term objectives of the organization. For the Named Officers,
the material terms of the performance goals under STIC were approved by the
Stockholders at the 1997 Annual Meeting.
7
Target incentive opportunity for STIC is based on job level and potential
impact on organization results. The STIC payout is based on the achievement of
sixten financial objectives--three for the Local Telecommunications Division
(LTD) and, three for the Long Distance Division (LDD), two for Sprint
PCS/SprintCom, one for Global One, and one for National Integrated Services
(NIS). For each objective, targets were established and compared to actual
1997 financial1998 results.
. The objectives for the LTD related to operating income (55%(45% weighting),
net collectible revenue (25%(30%), and economic value added (EVA) (20%(25%).
Actual results were 70.4%43.8% of target on a weighted average basis.
. The objectives for the LDD related to operating income (40%(35% weighting),
net collectible revenue relative to market growth (40%), and EVA (20%(25%).
Actual results were 32.7%179.3% of target on a weighted average basis.
. The objectives for Sprint PCS/SprintCom related to operating income (50%
weighting) and net collectible service revenue (50%). Actual results were
72.8% of target on a weighted average basis.
9
. The objective for Global One related to operating income. The actual
result was 0.0% of target.
. The CEO and COO objective for NIS was expense and capital spending. The
actual result was 150.0% of target. The objectives for NIS for the
remaining executive officers were the completion of key milestones for
the Sprint ION(SM) (Sprint's Integrated On-Demand Network) and
competitive local exchange carrier electronic interface projects. The
actual results were 150.0% of target on a weighted average basis.
The weights assigned for a particular executive among the LTD, LDD, Sprint
PCS/SprintCom, Global One, and LDDNIS depended on an executive's responsibilities
with Sprint. The entire STIC payout for Messrs. Esrey and LeMay was based on
the achievement of these financial objectives.
For the remaining executive
officers except Mr. Peterson, 15% of the STIC payout was based on the
achievement of certain personal objectives in 1997. Fifty percent of Mr.
Peterson's STIC payout was based on personal objectives. These personal
objectives included qualitative factors relating to business unit and
departmental results of a nonfinancial nature, the support the executive
provided in furthering strategic and tactical objectives, contributing to the
progress of the quality improvement process, and individual professional
growth and development.
Based on the financial results described above, and the achievement of their
personal objectives, the executive officers earned STIC payouts on average of
56.7%109.3% of target. Mr. Esrey's STIC payout was based on the financial results
described above using relative weights for objectives by division as follows:
45%30% for the LTD, 40% for LDD, 15% for Sprint PCS/SprintCom, 5% for Global One,
and 55%10% for LDD.NIS. Based on these factors, Mr. Esrey earned a payout of 49.7%110.8%
of target.
Long-Term Incentive Compensation. Sprint's long-term incentive compensation
(LTIP) is a three-year performance-driven incentive plan designed to promote
the long-term objectives of the organization and to pay out in SprintFON and PCS
common stock. For the Named Officers, the material terms of the performance
goals under LTIP were approved by the Stockholders at the 1997 Annual Meeting.
Target incentive opportunity is established as a percentage of the three-year
average salary range midpoint and is based on job level and potential impact
on organization results.
LTIP payouts were based entirely on the achievement of EVA. This financial
objectives.
These financial objectivesobjective related to the LTD, the LDD, the Cellular Division,
and Sprint consolidated.
. The objectives for the LTD related to return on assets (55% weighting),
nonregulated cumulative net collectible revenue (15%), 1997 nonregulated
operating income (15%) and EVA (15%). For the LTD, the actual results were
115.1%result was 187.9% of target on a weighted average basis.
. The objectives for the LDD related to net collectible revenue growth
relative to market (50%), cumulative operating margin (40%) and EVA
(10%)target.
. For the LDD, the actual results were 152.0%result was 200.0% of target on a weighted
average basis.target.
. The objectives for the Cellular Division related to cumulative operating
income (45%), cumulative net collectible revenue (45%) and EVA (10%) from
January 1, 1995 through March 7, 1996. On March 7, 1996, there was a
spin-off of the Cellular Division. For the Cellular Division, actual
results were 107.5% of target on a weighted average basis.
. The objective for Sprint consolidated, related to EVA. Actual results were
80.9%the actual result was 200.0% of target.
As with the STIC, the relative weights assigned to the LTIP objectives among
the LTD, LDD, Cellular Division, and Sprint consolidated depend on an executive's
responsibilities with Sprint.
The specific amounts of the LTIP payouts were determined by comparing actual
financial results to the pre-established targets for each objective. The
payout is also adjusted by a stock price factor under which the payout 8
based
on financial objectives as described above is multiplied by a fraction, the
numerator of which is the market price of Sprint CommonFON Stock and one-half the market
price of PCS Stock on the last day of the performance period and the
denominator of which is the market price of Sprint common stock on the first
day of the performance period. The three-year increase in the price of Sprint CommonFON
Stock and PCS Stock resulted in a multiplier of 263.0%296.2%.
Mr. Esrey's LTIP payout was based on the financial results described above
using relative weights for each objective as follows: 28%25% for the LTD, 55%50% for
the LDD, 6% for the Cellular Division and 11%25% for Sprint consolidated. Based on the financial results and
the methodology described above, Mr. Esrey received a payout of 346.4%583.4% of
target. The LTIP payouts, if not deferred under the Executive Deferred
Compensation Plan, were paid in restricted or unrestricted shares of Sprint CommonFON Stock
and PCS Stock.
Stock Options. Stock option grants combined with LTIP comprise long-term
incentive compensation awarded to executive officers of Sprint. Total long-
term incentive compensation is targeted at the 75th percentile of the
comparison group. The Committee does not consider any measures of corporate or
individual performance in determining option grants and does not consider the
number of options already held by an executive. The telecommunications
industry is going through tremendous changes and industry leaders are in high
demand, both inside and outside the industry. In 1997, Sprint granted
performance options to buy 1,000,000 and 500,000 shares to Mr. Esrey and Mr.
LeMay, respectively. These options become exercisable if the combined trading
price of
10
FON stock and one-half the trading price of PCS stock equals or exceeds
$95.875 per share for a period of 30 trading days within a consecutive period
of 45 days after June 9, 2001 and on or before June 9, 2003. Since the
performance vesting criteria will most likely be met and in order to obtain
more favorable accounting treatment the Board amended the vesting provision of
these grants. The amendment provides that, if the performance vesting
provisions have not already been achieved, these options will automatically
vest on February 9, 2007. The Board of Directors believes that granting
options and other stock awards to officers and other key employees enhances
the Company'sSprint's ability to attract, retain and provide incentives to individuals of
exceptional talent necessary for the continued success of Sprint.
In furtherance of these objectives, a special grant of
options was made to Mr. Esrey and Mr. LeMay in 1997.
During 19971998 certain executive officers elected under Sprint's Management
Incentive Stock Option Plan (MISOP) to receive options in lieu of receiving up
to 50% of their target opportunity under Sprint's management incentive plans.
For each $3.95$5.69 reduction in an executive's target opportunity resulting from
such election, the executive received an option to purchase one share of Sprint CommonFON
Stock and one-half share of PCS Stock. The MISOP is in keeping with Sprint's
philosophy of increasing the percentage of compensation tied to stock
ownership. The Committee believes stock options more closely align Stockholder
and employee interests by focusing executives on long-term growth and
profitability of Sprint and its Common Stock.common stock.
Stewart Turley, Chairman
Harold S. HookDuBose Ausley
Linda Koch Lorimer
Charles E. Rice
Ron Sommer
911
SUMMARY COMPENSATION TABLESummary compensation table
The following table reflects the cash and non-cash compensation for services
in all capacities to Sprint by those persons who were, as of December 31,
1997,1998, the chief executive officer and the other four most highly compensated
executive officers of Sprint, and by Mr. Peterson,Forsee, who served as an executive
officer until October 14, 1997February 12, 1998 (the Named Officers):
SUMMARY COMPENSATION TABLESummary Compensation Table
ANNUAL COMPENSATION LONG-TERM COMPENSATIONAnnual Compensation Long-Term Compensation
--------------------------- ----------------------------------
AWARDS PAYOUTS
OTHER -------------------------------------------------------------------
Awards Payouts
Other --------------------------------- --------- ALL
ANNUAL RESTRICTED SECURITIES OTHER
COMPEN- STOCK UNDERLYINGAll
Annual Restricted Other
Compen- Stock Securities LTIP COMPEN-
NAME AND SALARY BONUS SATION AWARD(S) OPTIONS PAYOUTS SATION
PRINCIPAL POSITION YEARCompen-
Name and Salary Bonus sation Award(s) Underlying Options Payouts sation
Principal Position Year ($)(1) ($)(1) ($) ($)(2) (#)(3) ($) ($)(3)(4)
------------------ ---- --------- --------- ------- ---------- ----------------------------- --------- -------
FON Stock PCS Stock
William T. EsreyEsrey........ 1998 1,000,000 851,351 75,986(5) 0 722,410 361,206 2,199,644 52,000
Chairman and Chief 1997 1,000,000 0 73,134(4)73,134 0 2,536,183 1,268,093 1,221,064 38,880
Chairman and ChiefExecutive Officer 1996 987,500 2,280,250 76,480 0 336,468 168,234 597,948 33,645
Executive Officer 1995 937,502 541,200 76,989Kevin E. Brauer(6)...... 1998 339,851 425,845 6,696 0 291,360 768,140 31,50677,417 38,709 481,312 14,122
President--National 1997 306,871 172,850 4,857 242,500 39,975 19,988 267,755 6,348
Integrated
Services
Gary D. Forsee (7)...... 1998 546,055 254,167 12,855 0 199,834 99,918 847,787 5,911
Former President-- 1997 474,828 0 12,775 0 176,512 88,257 459,447 7,513
President--LongLong Distance 1996 412,746 1,177,866 6,172 577,500 88,688 44,344 203,570 5,173
Distance Division 1995 344,237 258,809 6,404 0 50,372 214,524 7,846
Michael B. Fuller(5) 1997 307,864 230,500 1,519 363,750 64,608 204,762 10,511
President--Local 1996 269,485 298,808 1,569 0 28,720 87,851 7,612
Telecommunications
Division
Arthur B. KrauseKrause........ 1998 415,076 371,216 8,866 0 77,417 38,709 532,799 46,053
Executive Vice 1997 401,852 192,642 2,840 0 64,608 32,304 304,057 23,491
Executive VicePresident--Chief 1996 373,581 670,321 3,787 0 52,200 26,100 153,437 16,302
President--Chief 1995 349,172 271,518 8,614 0 36,420 204,099 16,134
Financial Officer
Ronald T. LeMayLeMay......... 1998 808,801 562,501 65,566(8) 0 488,868 244,437 1,061,710 3,740
President and Chief 1997 602,966 0 9,944 8,896,817(6)8,896,817(9) 1,603,546 810,776 574,008 8,395
President andOperating Officer 1996 700,002 1,684,142 71,975 0 269,531 134,768 315,615 9,321
Chief Operating 1995 668,122 287,000 10,979Patti S. Manuel (10).... 1998 346,895 530,015 1,639 0 160,268 398,676 12,178
Officer
D. Wayne Peterson(7) 1997 431,770 92,482 4,427 0 177,107 365,238 21,302
Former President-- 1996 389,355 738,212 7,890 0 64,337 193,364 14,567
National Integrated 1995 344,129 382,485 6,198 0 48,935 213,519 14,729
Services93,040 46,520 482,702 43,666
President--Long
Distance Division
- -------
(1) Includes all amounts earned for the respective years, even if deferred
under Sprint's Executive Deferred Compensation Plan. AllExcept for $500,000
paid to Mr. Forsee, all bonuses were paid under Sprint's Management Incentive Plans.short-term
incentive plans.
(2) The value of the Restricted Stock Awards shown for 1997 is based on the
closing prices of Sprint Common Stock on August 12, 1997 and October 30,
1997, the dates of grant for Messrs. Fuller and LeMay, respectively. As of December 31, 1997, Messrs. Esrey, Forsee, Fuller, Krause, LeMay1998, the Named Officers held restricted shares of FON
Stock and Peterson held 101,820; 19,801; 9,424; 10,000; 174,876 and 6,133 shares,
respectively, of restricted stock.PCS Stock as set forth in the following table. The shares had a market value
of $5,969,198; $1,160,834; $552,482; $586,250; $10,252,106 and $359,547,
respectively, at December 31, 1997,the shares is based on a value of $58.625$84.125 per share.share for FON Stock and
$23.125 per share for PCS Stock (the closing price at December 31, 1998).
Each of the Named Officers has the right to vote and receive dividends on
the restricted shares.
FON Stock PCS Stock
-------------------- ---------------------
Number
of Number
shares Value of shares Value
------- ------------ --------- -----------
Mr. Esrey.................... 122,648 $ 10,317,763 61,324 $ 1,418,118
Mr. Brauer................... 5,000 $ 420,625 2,500 $ 57,813
Mr. Forsee................... 15,000 $ 1,261,875 7,500 $ 173,438
Mr. Krause................... 10,000 $ 841,250 5,000 $ 115,625
Mr. LeMay.................... 174,876 $ 14,711,444 87,438 $ 2,022,004
Ms. Manuel................... 0 $ 0 0 $ 0
12
(3) Reflects the conversion of options for Sprint common stock before the
Recapitalization into independently exercisable options for FON Stock and
PCS Stock.
(4) Consists of the following amounts for 1997:1998, (a) $6,365 contributed on
behalf of each of Messrs. Esrey, Forsee, Fuller, Krause, LeMay and
Peterson as matching contributions
under the Sprint Retirement Savings Plan; andPlan, (b) $32,515, $1,148, $4,146, $17,126, $2,030 and $14,937 for
Messrs. Esrey, Forsee, Fuller, Krause, LeMay and Peterson, respectively, representing the portion of
interest credits on deferred compensation accounts under Sprint's
Executive Deferred Compensation Plan that are at above-market rates.
10
(4)rates, and
(c) paid for relocations expenses, as follows:
Savings Plan Above-Market Relocation
Match Earnings Expenses
------------ ------------ ----------
Mr. Esrey............................ $4,800 $47,200 $ 0
Mr. Brauer........................... $4,800 $ 9,322 $ 0
Mr. Forsee........................... $4,800 $ 1,111 $ 0
Mr. Krause........................... $4,800 $41,253 $ 0
Mr. LeMay............................ $3,740 $ 0 $ 0
Ms. Manuel........................... $4,800 $11,011 $ 27,855
(5) Includes the cost to Sprint of providing tax and financial services of
$15,000 club memberships of $14,717 and automobile allowance of $18,000.
(5)(6) Mr. FullerBrauer became President--Local Telecommunications Divisionan executive officer on October
8, 1996.
(6)June 9, 1997.
(7) Mr. Forsee became President and Chief Executive Officer of Global One on
February 13, 1998. Global One is a joint venture among Sprint, DT, and FT.
(8) Includes the cost to Sprint of providing tax and financial services of
$15,000 and automobile allowance of $15,600.
(9) When Mr. LeMay left Sprint to join Waste Management, Inc. lastin July of 1997,
all of his unvested options to purchase Sprint stock and restricted Sprint
shares were canceled. Upon Mr. LeMay's return to Sprint lastin October, 1997,
he was granted restricted stock in amounts designed to place Mr. LeMay in
the same general economic position he was in before his leaving Sprint
with respect to such options and restricted shares. These replacement
grants, on a pre-Recapitalization basis, included: (1) 14,876 shares that
vest on March 31, 1999 to replace his canceled restricted stock, and (2)
100,000 shares that vest on April 30, 2000 to replace the unrealized gain
on canceled Sprint stock options. (7)However, with respect to two options
aggregating 1,000,000 shares granted on June 9, 1997 at an exercise price
of $47.94 that were canceled when Mr. Peterson resignedLeMay left Sprint and were replaced
at an exercise price of $51.69, no action was taken to restore the
economic benefit lost resulting from his position as President--National Integrated
Servicesthe difference in the exercise
prices.
(10) Ms. Manuel became President--Long Distance Division on October 14, 1997.
OPTION GRANTSFebruary 13, 1998.
Option grants
The following table summarizestables summarize options granted during 19971998 under Sprint's
stock option plans to the Named Officers. Options granted before the
Recapitalization were converted into separate options to purchase FON Stock
and PCS Stock. The exercise prices of the original options were allocated
between the FON Stock and PCS Stock options based on the proportionate market
values of FON Stock and PCS Stock over a ten-day trading period following the
Recapitalization. This was intended to ensure that the aggregate intrinsic
value of the original options was preserved. Following the conversion, the
vesting and option periods of the FON Stock and PCS Stock options remained the
same as for the original options that were converted.
The amounts shown as potential realizable values on these options are based
on arbitrarily assumed annualized rates of appreciation in the price of Sprint CommonFON
Stock and PCS Stock of five percent and ten percent over the term of the
options, as set forth in Securities and
Exchange Commission (SEC)SEC rules. The Named Officers will realize no gain on
these options without an increase in the price of Sprint CommonFON Stock and PCS Stock that
will benefit all shareholdersholders of these stocks proportionately.
11
EachUnless otherwise indicated, each option listed below has a reload feature.
Unless otherwise indicated,
vestingVesting is accelerated in the event of an employee's death or permanent
disability. In addition, if an option has been outstanding for at least one
year, vesting is accelerated upon a change in control if the change in
control occursor an employee's normal
retirement at least one year after the grant date of the option.age 65 or older. A
13
change in control is deemed to occur if (1) DT and FT acquire additional stock
of Sprint that would result in their owning 35% or more of the voting power of
Sprint stock, (2) someone acquires 20% or more of the outstanding stock of
Sprint, or if(3) there is a change of a majority of the Directors within a two-yeartwo-
year period. No stock appreciation rights were granted during 1997.
OPTION GRANTS IN LAST FISCAL YEAR1998.
Option Grants in Last Fiscal Year
FON Stock Options
POTENTIAL REALIZABLE VALUE AT
NUMBER OFNumber of % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE
UNDERLYING GRANTED TO OR BASE APPRECIATION FOR OPTION TERM(1)
OPTIONS EMPLOYEES PRICE EXPIRATION ----------------------------------
NAME GRANTEDof Total
Securities Options Potential Realizable
Underlying Granted to Exercise Value at Assumed
Options Employees Or Base Annual Rates of Stock
Granted In Fiscal Price Expiration Price Appreciation for
Name (#) IN FISCAL YEARYear ($/SH) DTAESh) Date Option Term(1)
---- ----------- ---------- -------- ---------- ------------------------------------
0% 5% 10%
- ---- ------------ -------------- -------- ---------- --- -------------- ---------------
William T. Esrey 160,000(2)Esrey........ 240,000(2) 2.7% 52.86 2/9/08 $ 0 $ 7,978,863 $ 20,220,005
71,740(3) 0.8% 52.86 2/9/08 $ 0 $ 2,385,015 $ 6,044,097
123,023(4) 1.4% 52.86 2/9/08 $ 0 $ 4,089,932 $ 10,364,690
24,070(5) 0.3% 66.64 2/11/04 $ 0 $ 503,432 $ 1,129,919
54,397(5) 0.6% 66.64 2/17/05 $ 0 $ 1,379,887 $ 3,182,088
141,562(5) 1.6% 66.64 2/16/00 $ 0 $ 770,060 $ 1,562,754
50,714(5) 0.6% 66.64 3/9/03 $ 0 $ 863,976 $ 1,892,674
16,904(5) 0.2% 66.64 3/9/03 $ 0 $ 287,981 $ 630,866
Kevin E. Brauer......... 60,000(2) 0.7% 52.86 2/9/08 $ 0 $ 1,994,716 $ 5,055,001
17,417(3) 0.2% 52.86 2/9/08 $ 0 $ 579,033 $ 1,467,383
Gary D. Forsee.......... 95,000(2) 1.1% 52.86 2/9/08 $ 0 $ 3,158,300 $ 8,003,752
27,944(3) 0.3% 52.86 2/9/08 $ 0 $ 929,006 $ 2,354,283
46,134(4) 0.5% 52.86 2/9/08 $ 0 $ 1,533,737 $ 3,886,791
16,690(5) 0.2% 67.35 2/11/04 $ 0 $ 332,768 $ 741,409
4,255(5) 0.0% 67.35 3/9/03 $ 0 $ 68,383 $ 148,728
9,811(5) 0.1% 67.35 2/17/05 $ 0 $ 239,153 $ 547,376
Arthur B. Krause........ 60,000(2) 0.7% 52.86 2/9/08 $ 0 $ 1,994,716 $ 5,055,001
17,417(3) 0.2% 52.86 2/9/08 $ 0 $ 579,033 $ 1,467,383
Ronald T. LeMay......... 150,000(2) 1.7% $43.3852.86 2/9/08 $ 0 $ 4,986,789 $ 12,637,503
38,805(3) 0.4% 52.86 2/9/08 $ 0 $ 1,290,082 $ 3,269,322
81,283(4) 0.9% 52.86 2/9/08 $ 0 $ 2,702,275 $ 6,848,095
13,487(5) 0.1% 63.60 2/16/00 $ 0 $ 70,387 $ 142,872
110,614(5) 1.2% 52.16 2/11/07 $ 0 $ 4,364,5293,228,853 $ 11,060,573
100,810(3) 1.1% 43.387,977,471
19,602(5) 0.2% 63.60 2/17/05 $ 0 $ 475,227 $ 1,096,139
23,523(5) 0.3% 63.60 2/12/06 $ 0 $ 672,153 $ 1,592,509
15,291(5) 0.2% 63.60 2/17/05 $ 0 $ 370,712 $ 855,069
21,529(5) 0.2% 63.60 2/11/07 $ 0 2,749,926 6,968,852
151,899(4) 1.6% 43.38 2/11/07 0 4,143,547 10,500,562
91,179(5) 1.0% 44.94 3/15/05 0 1,942,564 4,646,788
32,295(5) 0.3% 44.94$ 714,118 $ 1,739,377
14,734(5) 0.2% 63.60 2/17/05 $ 0 680,621 1,624,906
1,000,000(6) 10.6% 47.94 6/$ 357,208 $ 823,921
Patti S. Manuel......... 70,000(2) 0.8% 52.86 2/9/0708 $ 0 30,147,636 76,400,029
1,000,000(7) 10.6% 47.94 6/$ 2,327,168 $ 5,897,502
23,040(3) 0.3% 52.86 2/9/0708 $ 0 30,147,636 76,400,029
Gary D. Forsee 55,000(2) 0.6% 43.38$ 765,971 $ 1,941,121
All FON Stockholders.... 345,139,187(6) -- 52.86 2/11/07 0 1,500,307 3,802,072
38,354(3) 0.4% 43.38 2/11/07 0 1,046,232 2,651,358
66,456(4) 0.7% 43.38 2/11/07 0 1,812,807 4,594,009
3,588(5) 0.0% 55.28 2/16/00 0 23,748 49,034
8,217(5) 0.1% 55.28 2/15/01 0 79,746 168,787
4,897(5) 0.1% 55.28 3/9/03 0 81,178 181,152
Michael B. Fuller 40,000(2) 0.4% 43.38 2/11/07 0 1,091,132 2,765,143
24,608(3) 0.3% 43.38 2/11/07 0 671,265 1,701,116
Arthur B. Krause 40,000(2) 0.4% 43.38 2/11/07 0 1,091,132 2,765,143
24,608(3) 0.3% 43.38 2/11/07 0 671,265 1,701,116
Ronald T. LeMay 100,000(2) 1.1% 51.69 2/11/07 0 2,961,927 7,354,406
55,519(3) 0.6% 51.69 2/11/07 0 1,644,432 4,083,092
117,089(4) 1.2% 51.69 2/11/07 0 3,468,091 8,611,200
81,945(8) 0.9% 51.69 2/12/06 0 2,110,729 5,096,086
45,524(9) 0.5% 51.69 2/17/05 0 1,006,959 2,365,970
17,757(10) 0.2% 51.69 2/17/05 0 392,773 922,866
17,109(11) 0.2% 51.69 2/17/05 0 378,439 889,188
91,050(12) 1.0% 51.69 7/12/04 0 1,820,090 4,207,454
14,905(10) 0.2% 51.69 3/9/03 0 230,083 513,180
62,648(11) 0.7% 51.69 2/16/00 0 384,304 793,127
500,000(6) 5.3% 51.69 6/9/07 0 15,455,956 38,731,415
500,000(7) 5.3% 51.69 6/9/07 0 15,455,956 38,731,415
D. Wayne Peterson 40,000(2) 0.4% 43.38 2/11/07 0 1,091,132 2,765,143
32,076(3) 0.3% 43.38 2/11/07 0 874,979 2,217,368
56,329(4) 0.6% 43.38 2/11/07 0 1,536,560 3,893,944
6,850(5) 0.1% 46.63 2/17/05 0 150,037 358,304
5,095(5) 0.1% 46.63 3/9/03 0 79,984 181,205
6,475(5) 0.1% 46.63 2/16/00 0 45,723 95,753
28,247(5) 0.3% 54.47 2/11/04 0 556,324 1,273,134
2,035(5) 0.0% 54.47 2/16/00 0 13,404 27,691
All Stockholders(13) 343,323,103 -- 46.14 2/11/07 0 9,962,473,482 25,246,863,81508 $0 $11,474,242,807 $29,077,984,102
Named Officers' gain as
a % of all
Stockholders' gain..... 0.4% 0.4%
14
PCS Stock Options
Number of % of Total
Securities Options Potential Realizable
Underlying Granted to Value at Assumed
Options Employees Exercise Or Annual Rates of Stock
Granted In Base Expiration Price Appreciation for
Name (#) Fiscal Year Price($/Sh) Date Option Term(1)
---- -------------- ----------- ----------- ---------- ----------------------------------
0% 5% 10%
William T. Esrey........ 120,000(2) 1.6% 11.52 2/9/08 $ 0 $ 869,684 $ 2,203,951
35,870(3) 0.5% 11.52 2/9/08 $ 0 $ 259,963 $ 658,798
61,512(4) 0.8% 11.52 2/9/08 $ 0 $ 445,800 $ 1,129,745
12,035(5) 0.2% 14.53 2/11/04 $ 0 $ 54,873 $ 123,160
27,199(5) 0.4% 14.53 2/17/05 $ 0 $ 150,409 $ 346,850
70,781(5) 1.0% 14.53 2/16/00 $ 0 $ 83,935 $ 170,338
25,357(5) 0.3% 14.53 3/9/03 $ 0 $ 94,172 $ 206,299
8,452(5) 0.1% 14.53 3/9/03 $ 0 $ 31,389 $ 68,764
Kevin E. Brauer......... 30,000(2) 0.4% 11.52 2/9/08 $ 0 $ 217,421 $ 550,988
8,709(3) 0.1% 11.52 2/9/08 $ 0 $ 63,119 $ 159,956
Gary D. Forsee.......... 47,500(2) 0.6% 11.52 2/9/08 $ 0 $ 344,250 $ 872,397
13,972(3) 0.2% 11.52 2/9/08 $ 0 $ 101,260 $ 256,613
23,067(4) 0.3% 11.52 2/9/08 $ 0 $ 167,175 $ 423,655
8,345(5) 0.1% 14.68 2/11/04 $ 0 $ 36,271 $ 80,812
2,128(5) 0.0% 14.68 3/9/03 $ 0 $ 7,456 $ 16,215
4,906(5) 0.1% 14.68 2/17/05 $ 0 $ 26,070 $ 59,669
Arthur B. Krause........ 30,000(2) 0.4% 11.52 2/9/08 $ 0 $ 217,421 $ 550,988
8,709(3) 0.1% 11.52 2/9/08 $ 0 $ 63,119 $ 159,956
Ronald T. LeMay......... 75,000(2) 1.0% 11.52 2/9/08 $ 0 $ 543,553 $ 1,377,469
19,403(3) 0.3% 11.52 2/9/08 $ 0 $ 140,622 $ 356,364
40,642(4) 0.6% 11.52 2/9/08 $ 0 $ 294,546 $ 746,437
6,744(5) 0.1% 13.86 2/16/00 $ 0 $ 7,673 $ 15,574
55,307(5) 0.8% 11.37 2/11/07 $ 0 $ 351,940 $ 869,533
9,801(5) 0.1% 13.86 2/17/05 $ 0 $ 51,799 $ 119,478
11,762(5) 0.2% 13.86 2/12/06 $ 0 $ 73,267 $ 173,590
7,646(5) 0.1% 13.86 2/17/05 $ 0 $ 40,410 $ 93,208
10,765(5) 0.1% 13.86 2/11/07 $ 0 $ 77,842 $ 189,600
7,367(5) 0.1% 13.86 2/17/05 $ 0 $ 38,935 $ 89,806
Patti S. Manuel......... 35,000(2) 0.5% 11.52 2/9/08 $ 0 $ 253,658 $ 642,819
11,520(3) 0.2% 11.52 2/9/08 $ 0 $ 83,490 $ 211,579
All PCS Stockholders.... 197,448,099(6) -- 11.52 2/9/08 $0 $1,430,979,500 $3,626,383,009
Named Officers' gain as
a % of all
Stockholders' gain -- -- -- -- 0.08% 0.08%gain..... 0.4% 0.4%
- --------
(1) The dollar amounts in these columns are the result of calculations at the
five percent and ten percent rates set by the SEC and are not intended to
forecast future appreciation of Sprint CommonFON Stock or PCS Stock.
12
(2) Twenty-five percent of this option became exercisable on February 11,
1998,9, 1999,
and an additional 25% will become exercisable on February 119 of each of the
three successive years.
(3) This option was granted in lieu of a potential award under the LTIP for
the three-year period ending on December 31, 1999.2000. The option becomes
exercisable on December 31, 1999 and is not immediately exercisable upon
a change in control.2000.
(4) This option was granted under the Management Incentive Stock Option Plan
(MISOP). Under the MISOP, the optionee elected to receive options in lieu
of receiving a portion of his bonus under the management incentive
compensation plans. The MISOP benefits Sprint by reducing the cash bonus
paid to the executive.
15
It further increases the percentage of compensation tied to stock
ownership, in keeping with Sprint's philosophy to more closely align
Stockholderstockholder and employee interests. This option became exercisable on
December 31, 1997.1998.
(5) This option is a reload option. A reload option is an option granted when
an optionee exercises a stock option and makes payment of the purchase
price using shares of previously owned Sprint CommonFON Stock or PCS Stock. A reload
option grant is for the number of shares utilized in payment of the
purchase price and tax withholding, if any. The option price for a reload
option is equal to the market price of Sprint CommonFON Stock or PCS Stock on the date
the reload option is granted. A reload option becomes exercisable one year
from the date the original option was exercised.exercised and does not have a reload
feature.
(6) This option becomes exercisable on June 9, 2002 only if the market value
of Sprint Common Stock equals or exceeds $95.875 per share on any 30
trading days within a consecutive period of 45 trading days, all of which
fall after June 9, 2001 and on or before June 9, 2002. Alternatively, if
the market value of Sprint Common Stock equals or exceeds $95.875 per
share on any 30 trading days within a consecutive period of 45 trading
days, all of which fall after June 9, 2001 and on or before June 9, 2003,
this option becomes exercisable on the last day of the 45-day period. If
no such 45-day period occurs by June 9, 2003, the option will be
forfeited. Upon a change in control, this option becomes exercisable for
a fraction of the number of shares granted, the numerator of which is the
number of months between the grant date and the date of the change in
control and the denominator of which is 60.
(7) This option becomes excisable on July 9, 2002. Upon a change in control,
this option becomes exercisable for a fraction of the number of shares
granted, the numerator of which is the number of months between the grant
date and the date of the change in control and the denominator of which
is 60.
(8) One-third of this option became exercisable on February 12, 1998, and an
additional one-third will become exercisable on February 12, 1999 and on
February 12, 2000.
(9) Fifty percent of this option became exercisable on February 17, 1998 and
an additional 50% will become exercisable on February 17, 1999.
(10) This option became exercisable on November 15, 1997.
(11) This option becomes excisable on May 20, 1998.
(12) This option becomes excisable on July 12, 1999.
(13) The amounts shown as potential realizable value for all Stockholders,
which are presented for comparison purposes only, represent the aggregate
net gain for all holders of record, as of February 23, 1998, of Sprint
Common22, 1999. The
calculation for FON Stock assumingassumes a hypothetical option granted at $46.14$52.86
per share (the weighted average price of all options granted in 1997) on February 11, 19979, 1998 and expiring on February 11, 2007,9, 2008, if the
price of Sprint CommonFON Stock appreciates at the rates shown in the table. The
calculation for PCS Stock assumes a hypothetical option granted at $11.52
per share on February 9, 1998 and expiring on February 9, 2008, if the
price of PCS Stock appreciates at the rates shown in the table. There can
be no assurance that the potential realizable values shown in the table
will be achieved. Sprint will neither make nor endorse any prediction as
to future stock performance.
13
OPTION EXERCISES AND FISCAL YEAR-END VALUESOption exercises and fiscal year-end values
The following table summarizestables summarize the net value realized on the exercise of
options in 1997,1998, and the value of the outstanding options at December 31,
1997,1998, for the Named Officers.
AGGREGATED OPTION EXERCISES IN 1997 AND YEAR-END OPTION VALUESAggregated Option Exercises in 1998
and Year-end Option Values
FON Stock
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS ATNumber of Securities Value of Unexercised
Shares Underlying Unexercised In the Money Options
Acquired Options at 12/31/97 OPTIONS AT98 At 12/31/97(2)98(2)
on ------------------------- -------------------------
SHARES ACQUIRED VALUE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
ON EXERCISEExercise Value Realized(1) Exercisable Unexercisable Exercisable Unexercisable
(#) ($) (#) (#) ($) ($)
----------------------- ----------------- ----------- ------------- ----------- -------------
William T. Esrey........ 330,544 $7,466,939 856,694 2,736,344 $21,732,707 $35,258,353433,580 18,435,057 794,591 3,087,277 36,234,790 119,967,102
Kevin E. Brauer......... 26,246 891,427 17,906 137,278 1,068,511 5,301,150
Gary D. Forsee.......... 23,836 750,953 184,413 184,412 4,075,005 3,319,224
Michael B. Fuller....... 16,996 450,007 109,451 82,818 3,426,780 1,426,311135,189 3,420,135 156,160 277,310 7,151,638 10,190,326
Arthur B. Krause........ 0 0 165,847 151,105 4,803,963 3,279,38418,166 470,857 177,409 198,794 10,030,474 8,521,568
Ronald T. LeMay......... 368,155 6,112,173 149,751 1,453,795 954,663 9,267,943242,694 2,784,222 143,174 1,706,546 4,791,485 59,539,240
Patti S. Manuel......... 18,019 826,783 28,698 132,808 1,709,105 4,813,664
PCS Stock
Number of Securities Value of Unexercised
Shares Underlying Unexercised In the Money Options
Acquired Options at 12/31/98 At 12/31/98(2)
on ------------------------- -------------------------
Exercise Value Realized(1) Exercisable Unexercisable Exercisable Unexercisable
(#) ($) (#) (#) ($) ($)
-------- ----------------- ----------- ------------- ----------- -------------
William T. Esrey........ 216,792 2,009,411 397,298 1,543,639 5,571,510 19,378,136
Kevin E. Brauer......... 13,123 97,164 8,954 68,639 153,034 858,025
Gary D. Wayne Peterson....... 117,683 2,623,292 76,010 211,828 1,248,317 3,805,337Forsee.......... 67,596 372,798 78,081 138,655 1,098,296 1,676,778
Arthur B. Krause........ 9,083 51,323 88,706 99,397 1,455,457 1,334,620
Ronald T. LeMay......... 121,349 303,482 71,588 853,276 814,524 9,973,189
Patti S. Manuel......... 3,000 19,061 20,359 66,404 342,673 795,776
- --------
(1) The value realized upon exercise of an option is the difference between
the fair market value of the shares of Sprint CommonFON Stock or PCS Stock received
upon the exercise, valued on the exercise date, and the exercise price
paid.
16
(2) The value of unexercised, in-the-money options is the difference between
the exercise price of the options and the fair market value, of Sprint
Common Stock at December
31, 19971998, of FON Stock ($58.0625)83.625) or PCS Stock ($22.3125).
PENSION PLANSPension plans
The following table reflects the estimated annual pension benefit payable to
an individual retiring in 19981999 at age 65. The amounts include all prospective
benefits under Sprint's plans, whether tax-qualified or not.
PENSION PLAN TABLEPension Plan Table
YEARS OF SERVICE(2)
-------------------------------------------------------------
REMUNERATION(1)Remuneration(1) Years of Service (2)
--------------- -----------------------------------------------
15 20 25 30 35
- --------------- -------- -------- -------- ----------------- --------- ---------
$ 500,000 $114,612 $152,816 $191,020 $229,224500,000................. $114,518 $152,690 $ 267,428
700,000 161,112 214,816 268,520 322,224 375,928
900,000 207,612 276,816 346,020 415,224 484,428
1,100,000 254,112 338,816 423,520 508,224 592,928
1,300,000 300,612 400,816 501,020 601,224 701,428
1,500,000 347,112 462,816 578,520 694,224 809,928
1,700,000 393,612 524,816 656,020 787,224 918,428
1,900,000 440,112 586,816 733,520 880,224 1,026,928
2,100,000 486,612 648,816 811,020 973,224 1,135,428190,863 $ 229,035 $ 267,208
700,000................. 161,018 214,690 268,363 322,035 375,708
900,000................. 207,518 276,690 345,863 415,035 484,208
1,100,000................. 254,018 338,690 423,363 508,035 592,708
1,300,000................. 300,518 400,690 500,863 601,035 701,208
1,500,000................. 347,018 462,690 578,363 694,035 809,708
1,700,000................. 393,518 524,690 655,863 787,035 918,208
1,900,000................. 440,018 586,690 733,363 880,035 1,026,708
2,100,000................. 486,518 648,690 810,863 973,035 1,135,208
2,300,000................. 533,018 710,690 888,363 1,066,035 1,243,708
2,500,000................. 579,518 772,690 965,863 1,159,035 1,352,208
2,700,000................. 626,018 834,690 1,043,363 1,252,035 1,460,708
2,900,000................. 672,518 896,690 1,120,863 1,345,035 1,569,208
3,100,000................. 719,018 958,690 1,198,363 1,438,035 1,677,708
- --------
(1) Compensation, for purposes of estimating a pension benefit, includes
salary and bonus (paid under Sprint's short-term incentive plans) as
reflected under Annual Compensation in the Summary Compensation Table on
page 10.12. The calculation of benefits under the pension plans generally is
based upon average compensation for the highest five consecutive years of
the ten years preceding retirement.retirement under a grandfathered benefit.
(2) These amounts are straight life annuity amounts and would not be subject
to reduction because of Social Security benefits. For purposes of
estimating a pension benefit, the years of service credited are 33, 16,
23, 34 24 and 40 years
for Messrs.Mr. Esrey, 15 years for Mr. Brauer, 18 years for Mr. Forsee, Fuller,35 years
for Mr. Krause, 26 years for Mr. LeMay, and Peterson, respectively.12 years for Ms. Manuel.
In addition, Sprint has a Key Management Benefit Plan that permits a
participant to elect a supplemental retirement benefit equal to 300% (or a reduced
percentage if the participant retires before age 60) of the participant's
highest annual
14
salary during the five-year period immediately prior to the time of
retirement.benefit. More information on
the plan is provided in the following section under "Employment Contracts."
EMPLOYMENT CONTRACTScontracts".
Employment contracts
Sprint has contingency employment agreements with Messrs. Esrey, Forsee,
Fuller, Krause, and LeMay whichthat provide for separation pay and benefits if employment
is involuntarily terminated following a change in control. A change of control
is deemed to occur if someone acquires 20% or more of the outstanding voting
stock of Sprint or if there is a change of a majority of the Directors within
a two-year period. Benefits will include monthly salary payments for 35 months
(or until the officer reaches age 65 if this occurs earlier) and three
payments each equal to the highest short-term plus the highest long-term
incentive compensation awards received during the three years preceding
termination. In addition, life, disability, medical and dental insurance
coveragescoverage will be provided for 35 months. For purposes of the Key Management
Benefit Plan, an officer will be deemed to have remained a Key Executive (as
defined in the plan) until age 60; interest will be credited under the
Executive Deferred Compensation Plan at the maximum rate allowed under the
plan. Retirement benefits will be determined assuming three years of
additional service and no early retirement pension reduction will be imposed.
If any excise tax is imposed by Section 4999 of the Internal Revenue Code,
Sprint will make the executive whole with respect to any additional taxes due.
The agreements are not intended as an anti-takeover provision but could
discourage an attempt to acquire control of Sprint by increasing itsthe cost.
17
The Named Officers have each signed non-competition agreements with Sprint
which provide that he or she will not associate himself with a competitor for an 18-
month period following termination of employment. In addition, the agreements
provide that each executive will receive 18 months of compensation and
benefits following an involuntary termination of employment. In connection
with Mr. Peterson's resignation as President--National Integrated Services
last October, his non-competition agreement was amended to shorten his non-
compete period to end on December 31, 1998. Until that date, Mr. Peterson will
continue to receive his pay and benefits as an employee.
Sprint has a Key Management Benefit Plan providing for a survivor benefit in
the event of the death of a participant or, in the alternative, a supplemental
retirement benefit. Under the plan, if a participant dies prior to retirement,
the participant's beneficiary will receive ten annual payments each equal to
25% of the participant's highest annual salary during the five-year period
immediately prior to the time of death. If a participant dies after retiring
or becoming permanently disabled, the participant's beneficiary will receive a
benefit equal to 300% (or a reduced percentage if the participant retires
before age 60) of the participant's highest annual salary during the five-year
period immediately prior to the time of retirement or disability, payable
either in a lump sum or in installments at the election of the participant. At
least 13 months before retirement, a participant may elect a supplemental
retirement benefit in lieu of all or a portion of the survivor benefit. The
supplemental retirement benefit will be the actuarial equivalent of the
survivor benefit. Each Named Officer is a participant in the plan.
1518
PERFORMANCE GRAPHPerformance graph
The graph below compares the yearly percentage change in the cumulative
total Stockholder return for Sprint Common Stockcommon stock as compared with the S&P
500(R)&P(R)
500 Stock Index, the S&P(R) Telephone Utility Index and the S&P(R)
Telecommunications (Long Distance) Index, for the five-year period from
December 31, 19921993 to December 31, 1997.1998. The return for Sprint is based on the
historical return of Sprint common stock before the Recapitalization on
November 23, 1998, and after that date, the graph reflects the composite
return for one share of FON Stock and one-half share of PCS Stock. All returns
are compounded annually and include price appreciation and dividend
reinvestment.
The companies which comprise the S&P Telephone Utility Index are ALLTEL
Corp., Ameritech, Inc., Bell Atlantic Corp., BellSouth, Frontier Corp,Corp., GTE,
SBC Communications, Inc. and U.S. West, Inc. The companies which comprise the
S&P Telecommunications (Long Distance) Index are AT&T Corp., MCI Communications, Sprint and WorldCom,
Inc. LOGOand Sprint FON Group.
[CHART]
1992
1993 1994 1995 1996 1997 ---- ---- ---- ---- ---- ----1998
------ ------ ------ ------ ------ ------
SprintSprint.............................. 100.00 140.20 115.49 169.83 212.51 317.7782.98 122.58 153.09 228.57 371.86
S&P 500500............................. 100.00 109.92 111.34 152.66 187.28 249.28101.28 138.88 170.38 226.78 291.04
S&P (Long Distance)................. 100.00 113.16 103.21 138.74 143.09 201.8391.21 122.61 126.45 178.36 288.28
S&P TelephoneTelephone....................... 100.00 115.35 110.74 165.35 166.64 231.6496.01 143.35 144.47 200.82 293.29
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONSSource: Bloomberg
Compensation committee interlocks and insider participation
Mr. Ausley is Chairmana member of the Organization, Compensation and Nominating
Committee. He also is chairman of the law firm of Ausley & McMullen, which
provided legal services to certain affiliates of Sprint in 19971998 for which it
billed $288,430.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Sprint's
Directors and executive officers to file with the SEC and the New York Stock
Exchange initial reports of ownership and reports of changes in ownership of
Sprint Common Stock and other equity securities of Sprint. Directors and
executive officers are required by SEC regulations to furnish Sprint with
copies of all Section 16(a) reports they file.
To Sprint's knowledge, based solely on review of the copies of such reports
furnished to Sprint and written representations that no other reports were
required, during 1997 all Section 16(a) filing requirements applicable to its
Directors and executive officers were complied with, except that a Form 3,
Initial Statement of Beneficial
16$389,130.
19
Ownership of Securities, for Mr. LeMay (required when he returned to Sprint
after his resignation as Chairman and Chief Executive Officer of Waste
Management, Inc. last October) was filed three days late.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Stockholder proposals for the 1999 Annual Meeting of Stockholders of Sprint
must be received by the Corporate Secretary at Sprint's principal office, 2330
Shawnee Mission Parkway, Westwood, Kansas 66205, no later than November 10,
1998.
II. PROPOSAL TO ADOPT AMENDMENTS TO
THE EMPLOYEES STOCK PURCHASE PLAN
(Item 2 on Proxy Card)
In 1988, the Stockholders approved the 1988 Employees Stock Purchase Plan
(the ESPP). In 1994, the Stockholders approved an amendment to the ESPP
increasing the number of shares of Sprint Common Stock reserved for issuance
under the plan and making certain other changes to the plan. At its meeting on
December 9, 1997, the Board of Directors approved amendments making extensive
changes to the plan and recommended that the ESPP, as so amended, be submitted
to the Stockholders at the Annual Meeting for their approval. If approved by
the Stockholders, the ESPP, as amended and restated, will be effective for the
1998 offering and subsequent offerings.
SUMMARY OF AMENDMENTS
The amendments will:
1. Increase the number of shares authorized for issuance under the plan
to a total of 20 million shares, an increase of approximately 2.1 million
shares.
2. Permit participants to elect a percentage of compensation (defined by
the ESPP to include base salary and incentive compensation), up to a
maximum of 75% of compensation, to be used to purchase Sprint Common Stock.
Previously, participants elected the number of shares (between 10 and
2,000) that they could purchase during the purchase period for an offering.
3. Reduce the length of the purchase period for an offering from twenty-
four months to twelve months.
4. Require that Sprint Common Stock be automatically purchased and issued
to participants at quarterly intervals; the number of shares purchased each
quarter will be the number that can be purchased at the offering price with
the cash that has been withheld from the participant's compensation during
the quarter. Previously, a participant could elect to receive his cash back
(with interest) instead of receiving Sprint Common Stock and shares of
Sprint Common Stock were usually not issued until the end of the twenty-
four month purchase period, although a participant could elect to leave the
plan early and either receive his cash back (with interest) or purchase the
number of shares that could be purchased at the offering price with the
cash that had been paid into the plan by the participant at the time of
withdrawal.
5. Require that all purchases be made out of payroll deductions; a
participant may no longer make separate cash payments to the plan.
6. Eliminate the payment of interest on cash paid into the plan.
Previously, the Board of Directors set an interest rate for each offering
and cash paid into the plan earned interest at that rate.
The ESPP, restated to incorporate the amendments adopted by the Board of
Directors, is set forth in Exhibit A attached to this Proxy Statement and
reference is made to such Exhibit for a complete statement of its terms and
provisions.
SUMMARY OF OTHER PLAN PROVISIONS
Under the ESPP, the Board of Directors is authorized to offer to all
eligible employees of Sprint and its subsidiaries the right to elect to
purchase shares of Sprint Common Stock at the prices set forth in the next
17
paragraph. No employee may purchase more than 1,000 shares of Sprint Common
Stock during any single offering. In addition, the maximum number of shares
which any employee may purchase in an offering is limited by the fact that the
value of the stock to be purchased may not accrue at a rate which exceeds
$25,000 in any calendar year. If the market price of Sprint Common Stock is
$60 on May 15, 1998, then the maximum number of shares that any employee could
purchase in the 1998 offering would be 416 shares. If the total number of
shares which are to be granted on the date of grant for an offering exceeds
the shares available, the available shares will be allocated among
participating employees. Following termination of the 1996 offering, which
will be concluded at the end of June 1998, approximately 8.5 million shares of
Sprint Common Stock will be available for future offerings under the ESPP if
the plan, as amended, is approved. It is anticipated that this will be
sufficient shares for five to six 12-month offerings. There is no specified
date of termination of the ESPP; however, its duration is limited by the
maximum number of shares that may be sold pursuant to the plan.
The price for shares purchased under each offering will be 85% of the
average market price of Sprint Common Stock (such average market price being
defined by the ESPP to be the average of the high and low price for composite
transactions as published by major newspapers) on the date of grant or the
date of exercise of the option, whichever is lower. On February 23, 1998, the
high and low prices of Sprint Common Stock were $61 9/16 and $59 15/16,
respectively.
The Subscription Period for the 1998 Offering will be from June 1 to June 30
and the twelve month purchase period will begin July 1.
AWARDS UNDER THE PLAN
It is not possible to determine the number of shares that may be purchased
by each participant in the ESPP; however, the maximum number of shares which
any employee may purchase in an offering is limited in the manner described
above.
Set forth below are the number of shares of Sprint Common Stock underlying
options that were elected in the 1996 offering under the plan (which had a
twenty-four month purchase period) by the persons and groups identified.
NUMBER OF SHARES
UNDERLYING
NAME AND POSITION OPTIONS ELECTED
- ----------------- ----------------
William T. Esrey............................................. 1,162
Chairman and Chief Executive Officer
Gary D. Forsee............................................... 1,000
President--Long Distance Division
Michael B. Fuller............................................ 700
President--Local Telecommunications Division
Arthur B. Krause............................................. 1,162
Executive Vice President--Chief Financial Officer
Ronald T. LeMay.............................................. 0
President and Chief Operating Officer
D. Wayne Peterson............................................ 1,162
Former President--National Integrated Services
All current executive officers as a group.................... 13,820
All current Directors who are not executive officers as a
group....................................................... 0(1)
All employees who are not executive officers as a group...... 2,741,024
- --------
(1) Outside Directors cannot participate in the ESPP.
18
TAX ASPECTS OF THE PLAN
The ESPP is an "employee stock purchase plan" under Section 423 of the
Internal Revenue Code. Options issued under the plan will qualify for special
tax treatment. No income is recognized at the time the option is granted; the
recognition of gain is deferred until stock is disposed of. If stock is
disposed of after being held for the required period (one year from date of
purchase and two years from the date of the grant of the option), the employee
will recognize ordinary income to the extent of the excess of the fair market
value of the stock on the grant date or the date of disposition, whichever is
less, over the option price. Any further gain is a capital gain. Any loss is
treated as a capital loss. There will be no tax effect on Sprint under these
circumstances.
If the stock is sold before the requisite holding period expires, the
employee must recognize additional ordinary income. This ordinary income is
reported as wages on the employee's Form W-2. The amount to be treated as
ordinary income is the difference between the fair market value on the date of
exercise of the option and the option price. Any further gain is a capital
gain. If the selling price is less than the value of the stock at the time of
exercise, the ordinary income amount remains the same and a capital loss is
recognized. The early disposition of the stock entitles Sprint to a deduction
to the extent that any gain to the employee is treated as ordinary income.
VOTE REQUIRED FOR APPROVAL
Adoption of this proposal requires the affirmative vote of a majority of the
shares present and entitled to vote at the Annual Meeting. If not approved by
the Stockholders, the Board of Directors may continue to make offerings
available to eligible employees under the terms of the plan before the
amendments were adopted at the December 9, 1997 Board meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL AND ADOPTION OF THE
EMPLOYEES STOCK PURCHASE PLAN, AS AMENDED.
III. SELECTION OF INDEPENDENT AUDITORS
(Item 32 on Proxy Card)
The Board of Directors of Sprint has voted to appoint Ernst & Young LLP as
independent auditors to examine the consolidated financial statements of
Sprint and its subsidiaries for the fiscal year 1998,1999, subject to approval of
the Stockholders at the Annual Meeting.
Ernst & Young has examined the financial statements of Sprint since 1965.
Representatives of Ernst & Young will be present at the Annual Meeting with
the opportunity to make a statement and to respond to appropriate questions.
The affirmative vote of a majority of the shares present and entitled to vote
at the Annual Meeting is necessary for the approval of the appointment of
Ernst & Young as independent auditors. If the appointment of Ernst & Young is
not approved at the Annual Meeting,meeting, the Board of Directors will consider the selection of another
accounting firm.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTEThe Board of Directors recommends that the Stockholders vote FOR THE
APPROVAL OF THE APPOINTMENT.
19
IV.the
approval of the appointment.
III. STOCKHOLDER PROPOSALS
A. STOCKHOLDER PROPOSAL CONCERNING RETIREMENT PLANMEETING FEES
FOR OUTSIDE DIRECTORS
(Item 43 on Proxy Card)
The International Brotherhood of Teamsters, 25 Louisiana Avenue, N.W.,
Washington, D.C, 20001, beneficial holders of 14,000 shares of FON Stock and
7,000 shares of PCS Stock, has given notice of its intention to introduce the
following resolution at the Annual Meeting:
PROPOSAL: That shareholders of Sprint urge the board to adopt a policy
eliminating fees paid to directors for attending meetings, received in
addition to their annual compensation.
Stockholder's Statement in Support of Stockholder Proposal A
The non-employee directors at Sprint receive not only compensation of
$35,000, but additional fees of $1,250 for each board meeting attended and
$1,000 for each committee meeting attended.
Attending board meetings is what board members do. This is not an extra task
added to their job description for which they must be compensated. It seems
unlikely that other employees of Sprint receive a bonus just for showing up
for work in the morning, and there is no reason that directors need this
bonus. Directors are presumably, and justifiably, compensated for any costs
associated with traveling to meetings, but should not receive additional
compensation for attending.
For the above reasons we urge you to vote FOR this Proposal.
The Company's Response to Stockholder Proposal A
The Board believes that the best interest of Sprint and its Stockholders are
served by providing a compensation package that attracts and retains non-
employee Directors who are experienced, able, and knowledgeable leaders. To
that end, the compensation package should be competitive with that offered by
other major corporations and should recognize the increasing time commitment,
diligence, and risks associated with Board service.
When compared to the compensation program for directors of other companies,
Sprint's program is consistent with national and industry standards. According
to a 1998 study by PricewaterhouseCoopers, 80% of 187 surveyed corporations
provide meeting fees to their outside directors. Another 1998 study by The
Conference Board reveals that about 75% of 614 companies surveyed pay both
annual retainers and meeting fees to non-employee directors.
20
If Sprint were to eliminate meeting fees, it would need to pay Outside
Directors in another manner to maintain a competitive compensation program. At
this time, Sprint, like most other corporations, favors payment of meeting
fees as a direct way of compensating Directors for their time spent preparing
for, and attending, Board and committee meetings.
Accordingly, the Board of Directors recommends that the Stockholders vote
AGAINST this Proposal.
B. STOCKHOLDER PROPOSAL CONCERNING
"SOFT DOLLAR" POLITICAL CONTRIBUTIONS
(Item 4 on Proxy Card)
The National Electrical Workers' Pension Benefit Fund, 1125 15th Street, N.W., Washington,
D.C. 20005, beneficial owners of 40,60265,000 shares of Sprint CommonFON Stock and 32,500 shares
of PCS Stock, has given notice of its intention to introduce the following
resolution at the Annual Meeting:
BE IT RESOLVED: That the shareholders of Sprint Corporation(Sprint) ("Company") requesturge that the
Board of Directors inestablish a political "Soft Dollar" or "Soft Money"
contributions program that includes the future, refrain from providing
pension or other retirement benefits to non-employee or outside Directors,
unless such benefits are specifically submitted to the shareholders for
approval.
STOCKHOLDER'S STATEMENT IN SUPPORT OF STOCKHOLDER PROPOSAL Afollowing features:
1. Contribution Guidelines: The Board of Directors playwill provide upon the
request of a vitalshareholder contribution guidelines that clearly define the
issues and independent role in helping to
determine overall corporate policy and strategic direction. They should
actively monitor senior management in faithfully implementing these policies.
In their capacity on the Board, Directors owe their fundamental allegiance to
the shareholders of the Company (the owners) who elect them, and not to
management.
We believe however,interests that certain business or financial relationships can
adversely affect the ability of Directors to function in their appropriate
oversight role. This is particularly critical for so-called outside or
independent Directors who should bring a certain arms-length objectivity to
Board deliberations. According to the Company's most recent proxy statement,
in December 1996, the Company eliminated the old outside director's retirement
plan and replaced it with a "Phantom Share Plan." Under this plan, the outside
directors will receive the cash equivalent of Sprint stock, which is then
placed in the Deferred Directors Fee Plan, just another form of pension.
When this issue was raised at the 1997 stockholders meeting, Mr. Esrey
disputed that the new plan was a "Phantom Share Plan." His staff then informed
him that it was, and the reason they chose this method of providing pay to the
outside directors instead of "Real Stock" was that they would have to seek
stockholder approval for the stock grants. Could stockholder approval be the
real problem? Our resolution received a favorable 27% vote, even though Sprint
claimed to have eliminated their pension plan.
Non-employee or outside Directors should be entitled to reasonable
compensation for their time and expertise. We are of the opinion that
additional layers of compensation in the Director's base compensation has a
detrimental effect of compromising their independence and impartiality. It is
our view that such generous and unnecessary extra compensation for outside
Directors of the Company is management's wayseeking to promote with its
"Soft Dollar" political contributions; and
2. Contribution Reporting: Comprehensive political contribution reporting
will be provided upon the request of assuring their unquestioning
loyaltya shareholder documenting the
entities that were the recipients of the Company's political "Soft
Dollar" contributions during the previous twelve-month period.
Stockholder's Statement in Support of Stockholder Proposal B
The American political election process is the cornerstone of the country's
democratic system of government, serving as the central means by which all
citizens can participate in the public debate of ideas and acquiescenceelect
representatives to whatever policy management initiates. Accordingly,
when viewed fromprotect and promote our collective interests. The integrity
of the political process is currently being challenged by the flood of
unregulated "soft dollar" political contributions into the political process.
The corruptive influence of this perspective, these types of retirement benefits become
yet another devicepolitical money has contributed to enhance and entrench management's control over corporate
policy. While ata growing
cynicism by Americans toward the same time being accountable only to themselves and notpolitical electoral process.
In response to the Company's owners. Wegrowing public repulsion towards "soft dollar" political
giving, several major corporations, including General Motors, Monsanto and
Allied Signal, have stated their intent to end the practice. The audacious
manner in which the "soft dollars" have been raised and the lack of accounting
for how they are spent are particularly troubling aspects of the "soft dollar"
giving process. Concerned about possible association with the unseemly aspects
of the "soft dollar" fundraising process, which has received considerable
press attention, these corporations are removing themselves from the process.
The large amount of money flowing to the political parties have also led many
to suspect that more than good government is being sought by contributors.
Our Company has made "soft dollar" political contributions from corporate
assets. In order to provide shareholder accountability in this area, we
believe that this additional layerit would be good corporate practice to establish a Board
Contribution Policy that provides upon the request of compensation toa shareholder a report
on the Directors may influence their ability to exercise that degree of
independence from management, which is critical to the proper functioning of
the Board.
Our concern is to maximize the ability of Board of Directors to act in the
shareholder's interest. We feel that the long-term best interest of the
Company is not well served by this type of retirement policy. Most major
corporations have eliminated Outside Director Pension Plans. It is time Sprint
follows their lead. The vast majority of Directors at various corporations are
undoubtedly covered by generous retirement policies at their principal place
of employment, and they need not be "double-dipping" this Company or any
other.company's "Soft Dollar" giving activity.
We urge you to vote FORfor this Proposal.
20proposal.
21
THE COMPANY'S RESPONSE TO STOCKHOLDER PROPOSAL A
Providing outside directors with pension benefits has become a subject of
much controversy. Opponents of these arrangements argue that the pensions are
excessive and compromise director independence. While the Board believes
Sprint's Retirement Plan for Outside Directors was neither excessive nor
compromised Director independence, the Board took action in 1996The Company's Response to eliminate
the controversy. Specifically, Sprint's Retirement Plan for Outside Directors
has been closed to new participants who were not vested in the plan at that
time. For current Directors who are vested in the plan, Sprint will keep its
commitment to provide the benefit.
Sprint provides a compensation package for its Directors that is described
on page 6 of the Proxy Statement. The compensation package for new Directors,
who will not receive a benefit under the Retirement Plan for Outside
Directors, includes a grant of 2,500 share units in the Directors' Deferred
Fee Plan that vest, in part, after five years of Board service. Because the
share units derive their value from Sprint Common Stock (and from an economic
standpoint are no different than owning Sprint common stock), that component
of the new Director's compensation is directly tied to how Sprint stock fares
during the Director's tenure. This is in keeping with the recommendation of
the Report of the National Association of Corporate Directors Blue Ribbon
Commission on Director Compensation to increase the use of equity-based
compensation for non-employee directors.Stockholder Proposal B
The Board of Directors believes that Sprint's existing compensation package for Outside
Directors, which is designed to attract and retain experienced, able and
knowledgeable Directors,it is in the best interests of Sprint and
its Stockholders.
Accordingly,Stockholders for Sprint to be an effective participant in the political
process. To that end, Sprint engages in an active government relations
advocacy program to educate and inform public officials about Sprint's
position on matters that are significant to our business. Contributions to
national and state political parties (so-called "soft dollar" contributions)
are currently an important component to an effective advocacy program.
Over the years, Sprint's "soft dollar" contributions have been modest
compared to contributions by other companies in the industry. Sprint's
contributions are also reviewed annually by the Audit Committee of the Sprint
Board of Directors recommends that the Stockholders vote
AGAINST this Proposal.
B. STOCKHOLDER PROPOSAL CONCERNING
STOCK OPTIONS
(Item 5 on Proxy Card)
The Teamsters Affiliates Pension Plan, 25 Louisiana Avenue, N.W.,
Washington, D.C, 20001, beneficial holders of 16,400 shares of Sprint Common
Stock, has given notice of its intention to introduce the following resolutionDirectors. Furthermore, at the Annual Meeting:
PROPOSAL: That shareholders urge that no future option plansnational party level, recipients of
these "soft dollar" contributions are required to file reports with the
Federal Election Commission (FEC) setting forth, among other things, the
amount and source of each contribution. Most states also have reporting
requirements. Reports of contributions made to national parties are available
to the public and can be adopted,reviewed at FEC headquarters or existing option plansaccessed on internet
sites. In sum, a lot of contribution data is already available to the public.
The additional disclosures called for under the proposal could also be
amended, to allow options to be issued for exercise
prices below those of any options that were outstanding at any time during the
year immediately preceding the grants of the new options.
STOCKHOLDER'S STATEMENT IN SUPPORT OF STOCKHOLDER PROPOSAL B
Sprint's proxy notes that the Compensation Committee "believes stock options
more closely align stockholder and employee interests by focusing executives
on long-term growth and profitability of Sprint and its common stock."
But, many shareholders believe that this is only the case when there is no
possibility of option repricing.
Repricingcompetitively harmful. The telecommunications industry is the practicesubject of allowing "under water" options to be traded
back in for better options. Stock options are granted to tie executive
compensation with company performancemuch
legislation. Sprint's major competitors and align shareholder interests with
those of senior management. However, if there are no consequences for poor
performance, the options do not serve this purpose. If Sprint has a bad year,
will directors untie that connection between performance and pay? Shareholders
deserve a guarantee that they will not.
Sprint executives are already well paid. In April 1997, Business Week
compiled an Executive Compensation Scorecard, comparing compensation of top
executives to both shareholder return and corporate profit with other
21
industry peers. In both categories Sprint scored a 4 (with 1 as the best
possible score and 5 as the worst.) Sprint's top executives weresuppliers participate in the
bottom
third ofpolitical process to their peers in terms of what they gave shareholders for their money.
Executives need to be held accountable for poor performance,business advantage. Any unilateral limitations or
expanded disclosure requirements on Sprint could benefit competitors and certainly
not rewarded for it.
Forhurt
the above reasons we urge you to vote for this proposal.
THE COMPANY'S RESPONSE TO STOCKHOLDER PROPOSAL B
The Board believes the interests of Sprint and its Stockholders are best
served by Sprint's existing stock option plans. Options are designed to align
the interests of employees with the interests of Stockholders. The ability to
grant options at market price is a key component in attracting and retaining
officers and other key employees. The proposal would significantly reduce
Sprint's ability to use this form of compensation.
Options usually have a term of 10 years and often remain outstanding until
near the end of their term. Consequently, if the proposal were adopted, no
option could be granted with an exercise price lower than the highest market
price of Sprint stock on the date any option was granted during the previous
ten-year period. Such a limitation could severely limit Sprint's ability to
attract and retain key employees.
The proponent states incorrectly that there are no consequences to an option
holder for poor performance. Under the 1997 Long-term Stock Incentive Program
approved by the Stockholders last year, options cannot be granted at prices
less than fair market value. Therefore, Sprint employees realize no gain on
options without an increase in the price of Sprint Common Stock that will
benefit all Stockholders.
The proponent's statement in support focuses on a different issue, namely
repricing of existing options. Sprint does not reprice outstanding options.
Also, because repricing is a concern to investors, the Securities and Exchange
Commission requires specific disclosures in a company's proxy statement when a
company reprices outstanding options for a named executive officer. The
disclosures not only require tabular information on repricing over the last
ten years, but also require a discussion of the reasons for repricing the
options. Because Sprint does not reprice options, no such disclosures have
been required in Sprint's Proxy Statements.
With respect to the proponent's comments relating to the performance of
Sprint executives in creating Stockholder value, reference is made to the
performance graph contained on page 16 of this Proxy Statement. The graph
shows the total cumulative return for Sprint Stockholders exceeding that of
both industry and broad market indexes.Company.
Accordingly, the Board of Directors recommends that the Stockholders vote
AGAINST this Proposal.
C. STOCKHOLDER PROPOSAL CONCERNING COMPENSATION
AGREEMENTS CONTINGENT UPON A CHANGE IN CONTROL OF SPRINT
(Item 65 on Proxy Card)
George Speight, 3959 Cordiality Church Road, Nashville, North Carolina
27856, beneficial owner of more than 671102 shares of Sprint CommonFON Stock and 51 shares of PCS Stock,
has given notice of his intention to introduce the following resolution at the
Annual Meeting:
Resolved, that Sprint Corporation Board of Directors should adopt a
policy against making any future compensation awards to the officers
and directors of this Corporation, which are contingent on a change of
control of the corporation, unless such compensation awards are
submitted to a vote of the shareholders and approved by a majority of
the votes cast.
22
STOCKHOLDER'S STATEMENT IN SUPPORT OF STOCKHOLDER PROPOSALStockholder's Statement in Support of Stockholder Proposal C
Golden parachutes are lucrative compensation awards, which are provided to
senior executives. Sprint has golden parachutes that are contingent on a
change of control, which by definition occurs if someone acquires 20% or more
of the outstanding stock voting stock, or if there is a change of majority of the
directors within a two-year period.
Golden parachutes have been provided for Messrs. Esrey, Forsee, Krause and
LeMay, but none of these golden parachutes have the approval of the
shareholders. The amounts to be paid out would be calculated by computing an
amount equal to approximately three times the sum of the annual salary, short-
term incentive compensation, and long-term incentive compensation including
the value of stock option awards.
We believe that these golden parachutes are excessive, particularly in view
of the fact that they include a multiplier for stock option awards. For
example,In the
case of CEO William Esrey, the parachute is particularly excessive because of
the mega-stock option award granted to him. Sprint's 19971998 proxy statement
reflects that CEO WilliamMr. Esrey received $987,500$1 million in salary and $597,948plus $1.2 million
through the long termlong-term incentive plan which impliespayments in 1997. Mr. Esrey also stands
to realize an additional $188 million from his stock option awards assuming a
base golden parachute payment10% annual price appreciation over the term of $4.67 million if the payment
were made in 1997, andoptions, as the potential for larger amounts in later years.Sprint
proxy statement does. These options are not indexed or premium-based.
22
When the multiplier for stock options is included, there is the potential
for truly astronomical payouts. For example, if we consider the options that
Mr. Esrey was awarded during 1996, assume a 10% annual price appreciation over
the term of the option as the Sprint proxy statement does, the additional
payout to Mr. Esrey could receive a golden
parachute amount to as much as three times $19.7in excess of $500 million or
nearly $60 million more. Total payments to all four executives could amount to
$125 million. The actual payments could be more, or less, depending on the way thehis stock
options are valued.valued for the purpose of computing his golden parachute payment.
In our view, a conflict of interest is created when executives are awarded
special compensation that is to be paid only in the event of a future merger
or acquisition. Such awards provide management with a personal financial
incentive to perform their duties in a way that might be detrimental to
shareholder interests.
Management's first priority should be to maximize shareholder value.
However, actions that might temporarily diminish or restrain the growth of
shareholder value may make the company look more attractive as the potential
target of a merger or acquisition. Management may also be tempted to support a
merger or acquisition proposal without seeking a better deal for shareholders.
In the alternative, excessive golden parachutes may also deter a takeover
attempt. Sprint's 1997 proxy statement notes that "the agreements are not
intended as an anti-takeover provision but could discourage an attempt to
acquire control of Sprint by increasing its cost."
THE COMPANY'S RESPONSE TO STOCKHOLDER PROPOSALThe Company's Response to Stockholder Proposal C
The Board of Directors believes that arrangements for executive management
that provide reasonable contingent benefits upon a change in control serve the
best interests of Sprint and its Stockholders.
During a takeover bid for the Company, the Board believes that these
agreements provide financial security against possible job loss, allowing
executive management to assess a takeover bid objectively and to advise the
Board whether the bid is in the best interests of Sprint and its Stockholders.
As a lengthy period may elapse from the time a change in control is proposed
until it is completed, such arrangements also discourage an exodus of talent
and leadership at such a critical period of time, thereby protecting
Stockholder value.
The proponent suggests that these agreements may create a conflict of
interest whereby executives will support a merger or acquisition proposal
presumably to gain severance benefits. However, Sprint's agreements allow an
executive to claim a payment only under limited circumstances. Even though a
change in control may occur, payments will be made only to executives who are
terminated without cause or who resign due to a substantial diminution in
responsibilities, authority or compensation. Because the executives do not
control the 23
conditions that give rise to a severance payment under the
agreements, they are not encouraged to support a takeover of Sprint solely to
obtain severance benefits.
In the proponent's statement in support of his proposal, the proponent
expresses concern with respect to the valuation of stock option awards upon a
change of control. The proponent's statement incorrectly describes the use of
a "multiplier" in calculating the value of stock options upon a change in
control. The proponent indicates thatThis "multiplier," however, applies only to salary and payouts under
the useshort-term and long-term incentive plans (described under the salary,
bonus and LTIP payouts columns of the multiplier for stock
options results in what the proponent describes as "truly astronomical
payouts". These statements are inaccurateSummary Compensation Table on page 12)
and misleading. In fact, these
agreements do not provide for any benefits based on the value of stockto options. Consequently,As a result, the potential payout amountspayouts described in the
proponent's statement are grossly overstated.
Accordingly, the Board of Directors recommends that the Stockholders vote
AGAINST the proposal.
V.IV. OTHER MATTERS TO COME BEFORE THE MEETING
No other matters are intended to be brought before the meeting by Sprint nor
does Sprint know of any matters to be brought before the meeting by others.
If, however, any other matters properly come before the meeting, the persons
named in the proxy will vote the shares represented thereby in accordance with
the judgment of management on any such matter.
By order of the Board of Directors
Don A. Jensen
Vice President and
Secretary
March 10, 1998
A COPY OF SPRINT'S ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 1997, WILL BE SENT TO
STOCKHOLDERS UPON REQUEST WITHOUT CHARGE. REQUESTS SHOULD BE SENT TO INVESTOR
RELATIONS DEPARTMENT,17, 1999
23
SPRINT CORPORATION
P.O. BOXBox 11315, KANSAS CITY, MISSOURI 64112.
24
EXHIBIT A
EMPLOYEES STOCK PURCHASE PLAN
AMENDED AND RESTATED
FOR 1998 AND SUBSEQUENT OFFERINGS
1. PURPOSE
The purposeKansas City, Missouri 64112
This Proxy is Solicited on Behalf of this Employees Stock Purchase Plan is to encourage and enable
eligible employees of Sprint and its Subsidiaries to acquire proprietary
interests in Sprint through the ownership of Common Stock in order to
establish a closer identification of their interests with those of Sprint by
providing them with another and more direct means of participating in its
growth and earnings which, in turn, will provide motivation for participating
employees to remain in the employ of and to give greater effort on behalf of
Sprint. It is the intention of Sprint to have the Plan qualify as an "employee
stock purchase plan" under Section 423 of the Code. The provisions of the Plan
shall, accordingly, be construed so as to extend and limit participation in a
manner consistent with the requirements of that Section of the Code.
2. DEFINITIONS
The following words or terms, when used herein, shall have the following
respective meanings:
(a) "Account" shall mean the funds accumulated with respect to an
individual Employee as a result of deductions from his paycheck for the
purpose of purchasing Common Stock under this Plan. The funds allocated to
an Employee's Account shall remain the property of the respective Employee
at all times but may be commingled with the general funds of Sprint.
(b) "Average Market Price" shall mean the average of the high and low
prices of the Common Stock for composite transactions as published by major
newspapers for the date in question or, if no trade of the Common Stock so
published shall have been made on that date, the next preceding date on
which there was a trade of Common Stock so published.
(c) "Board" shall mean the Board of Directors of Sprint.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Committee" shall mean the Organization, Compensation and Nominating
Committee of the Board unless the Board designates another committee
consisting of three or more members of the Board who are not eligible to
participate in this Plan.
(f) "Compensation" shall mean compensation, as such term is defined from
time to time in the Sprint Retirement Savings Plan for purposes of Pre-Tax
Contributions (as defined in such plan) without regard to any limitations
imposed by such plan under Section 401(a)(17) of the Code.
(g) "Date of Grant" shall mean, with respect to each offering under the
Plan, the 15th day of May (or the business day immediately preceding such
date if May 15 fallsAnnual Meeting
on a Saturday, Sunday or a legal holiday) immediately
before the beginning of the Subscription Period for the offering. A
different date may be set by resolution of the Board.
(h) "Date of Exercise" shall mean the date on which Options shall be
deemed exercised, which shall be the last business day of each calendar
quarter in a Purchase Period. Different dates may be set by resolution of
the Board.
(i) "Eligible Employee" or "Employee" shall mean all persons employed by
Sprint or a participating Subsidiary on the Date of Grant; provided,
however, persons whose customary employment is for less than twenty hours
per week or for not more than five months in any calendar year shall not be
an "Employee" or an "Eligible Employee" as those terms are used herein; and
provided further that the Committee may determine, as to any offering under
this Plan, that the offer will not be extended to highly compensated
employees (within the meaning of Section 414(q) of the Code or any
successor Code section). An individual who is on sick leave or other
company approved leave on the Date of Grant and who otherwise is an
Eligible Employee may enroll in an offering under the Plan; provided,
however, if on the Date of Grant such leave has exceeded a period of 90
days and the individual's right to reemployment is not guaranteed either by
statute or by contract, the individual shall not be permitted to enroll.
A-1
(j) "ESPP Broker" shall have the meaning assigned in Section 14(a).
(k) "Local Plan Administrator" shall mean the person designated by the
employer company to assist that company's Employees in Plan matters.
(l) "Option" or "Options" shall mean the right or rights granted to
Eligible Employees to purchase Common Stock under an offering made under
this Plan.
(m) "Plan" shall mean this Employees Stock Purchase Plan, as amended.
(n) "Plan Administrator" shall mean the individual or individuals
appointed under Section 4 to carry out certain administrative duties with
respect to the Plan.
(o) "Purchase Period" shall mean, with respect to each offering under the
Plan, the period from and including the first business day in July of each
year through the last business day of June of the following year. A
different Purchase Period may be set by resolution of the Board.April 20, 1999
The
Purchase Period relates to the period during which payroll deductions for
payment for stock purchased under an offering under this Plan are made.
(p) "Shares," "Stock" or "Common Stock" shall mean shares of $2.50 par
value common stock of Sprint.
(q) "Subscription Period" shall mean, with respect to each offering under
the Plan, the period of time from the first business day of June through
the last day of June immediately preceding the Purchase Period for the
offering. A different Subscription Period may be set by resolution of the
Board.
(r) "Sprint" shall mean Sprint Corporation, a Kansas corporation, or its
successor.
(s) "Subsidiary" shall mean a corporation, domestic or foreign, of which
not less than 50% of the voting securities are held by Sprint or by Sprint
together with one or more of its Subsidiaries whether or not such
corporation now exists or is hereafter organized or acquired by Sprint or a
Subsidiary.
3. NUMBER OF SHARES UNDER THE PLAN
A total of 20 million shares of Common Stock may be sold to Eligible
Employees under this Plan. These may be newly issued Shares or may be Shares
purchased for the Plan on the open market or from private sources, at the
option of Sprint. Such Shares may be sold pursuant to one or more offerings
under the Plan. With respect to each offering, the Board of Directors will
specify the Subsidiaries participating in the offeringrecommends a vote FOR items 1 and such other terms2 and conditions not inconsistent with this Plan as may be necessary or
appropriate.
In the event of reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, offerings of rights,
or any other change in the structure of Common Stock, the Board may make such
adjustment, if any, as it may deem appropriate in the number, kind,AGAINST items 3,
4 and the
Option price of Shares available for purchase under the Plan, and in the
number of Shares which an Employee is entitled to purchase.
4. ADMINISTRATION OF THE PLAN
This Plan shall be administered by the Committee. The Committee is vested
with full authority to make, administer and interpret such equitable rules and
regulations regarding this Plan as it may deem advisable. Its determinations
as to the interpretation and operation of this Plan shall be final and
conclusive.
To aid in administering the Plan, the Board or the Committee shall appoint a
Plan Administrator and the Committee shall allocate to the Plan Administrator
certain limited responsibilities to carry out the directives of the Committee
in all phases of the administration of the Plan.
Sprint will pay all expenses incident to establishing and administering the
Plan and purchasing or issuing Shares.
A-2
5. PARTICIPATION; PAYROLL DEDUCTIONS
(a) An Eligible Employee may become a participant by enrolling during the
Subscription Period in the manner prescribed by the Plan Administrator.
(b) Payroll deductions for a participant shall commence with the first
payday in the Purchase Period for an offering and shall end with the last
payday during the Purchase Period for such offering or until the Employee
terminates employment or terminates his participation in the offering as
provided in Section 9.
(c) As part of his enrollment, the participant shall elect to have
deductions made from his pay on each payday during the time he is a
participant in an offering at a percentage (in whole numbers) of his
Compensation, up to a maximum of 75% of Compensation. Payroll withholding in
excess of the percentage designated by a participant is permitted in order to
adjust for delays or mistakes in the processing of enrollments. If a
participant's pay on any payday is insufficient, after all other payroll
deductions, to withhold the percentage of Compensation elected by such
participant, the deduction for this Plan shall be the amount remaining after
such other payroll deductions are taken.
(d) All payroll deductions made for a participant shall be credited to his
Account under the Plan. A participant may not make any separate cash payment
into such Account nor may payment for Shares be made other than by payroll
deduction.
(e) A participant may discontinue his participation in an offering as
provided in Section 9, but may not otherwise alter the rate of his payroll
deductions for that offering.
6. GRANTING OF OPTION
On the Date of Grant for an offering, this Plan shall be deemed to have
granted to each participating Employee an Option for as many full Shares as he
will be able to purchase with the payroll deductions credited to his Account
during the Purchase Period for that offering. Notwithstanding the foregoing,
no Employee may purchase more than 1,000 shares of Common Stock during any
single offering; provided, further, that no Employee shall be granted an
Option to purchase Shares under this Plan if such Employee, immediately after
such Option is granted, owns stock (applying the rules of Section 424(d) of
the Code) or holds Options to purchase stock possessing five percent or more
of the total combined voting power or value of all classes of stock of Sprint
or of any of its Subsidiaries; provided, further, that no Employee may be
granted an Option to purchase Shares which permits his rights to purchase
stock under all employee stock purchase plans of Sprint to accrue at a rate
which exceeds in any one calendar year $25,000 of the fair market value of the
stock determined as of the date the Option to purchase is granted.
If the total number of Shares for which Options are to be granted on any
Date of Grant exceeds the number of Shares then available under the Plan
(after deduction of all Shares for which Options have been exercised or are
then outstanding), Sprint shall make a pro rata allocation of the Shares
remaining available in as nearly a uniform manner as shall be practicable and
as it shall determine to be equitable. In such event, the payroll deductions
to be made pursuant to the authorizations therefor shall be reduced
accordingly and each Employee affected thereby shall be given written notice
of such reduction.
All Shares included in any offering under this Plan in excess of the total
number of Shares purchased in such offering shall be available for inclusion
in any subsequent offering under this Plan.
7. PURCHASE PRICE
The Option price per Share shall be the lower of:
(a) 85% of the Average Market Price for a Share of Common Stock on the
Date of Grant; or
(b) 85% of the Average Market Price for a Share of Common Stock on the
Date of Exercise.
A-3
8. EXERCISE OF OPTION
Each Employee who has sufficient funds in his Account on a Date of Exercise
to purchase at least one full share of Common Stock shall be deemed to have
exercised his Option on such date and shall be deemed to have purchased from
Sprint such number of full shares of Common Stock reserved for the purpose of
the Plan as the balance in his Account on the Date of Exercise will pay for at
the Option price. Unless the Employee has terminated employment or
participation in the offering, the balance in his Account not used to purchase
Common Stock shall be used for Option exercises on the next Date of Exercise
in the Purchase Period.
9. TERMINATION OF PARTICIPATION
An Employee may terminate participation in an offering, in whole but not in
part, at any time prior to the end of the Purchase Period for such offering.
To terminate participation, an Employee must deliver a notice to his Local
Plan Administrator in the manner prescribed by the Plan Administrator. As soon
as practicable after receipt of such notice, the Local Plan Administrator
shall stop the Employee's payroll deductions provided for in Section 5. The
balance in the Employee's Account shall be used for Option exercises on the
next Date of Exercise. Any funds remaining in the Employee's Account after
such Option exercises will be paid to the Employee as soon as practicable
after the Date of Exercise.
10. TERMINATION OF EMPLOYMENT
Upon termination of employment for any reason whatsoever, including but not
limited to death or retirement, the balance in the Account of a participating
Employee shall be used for Option exercises on the next Date of Exercise. Any
funds remaining in the participant's Account after such Option exercises will
be paid to the Employee as soon as practicable after the Date of Exercise.
11. AUTOMATIC RE-ENROLLMENT
For each offering subsequent to the 1998 offering, each participant in an
offering who is still an Eligible Employee shall automatically be re-enrolled
in the next offering at the same percentage of Compensation in effect at the
last day of the Purchase Period immediately preceding such next offering (if
such an offering is authorized by the Board). If the Employee wants to change
his payroll deductions in the new offering, he must re-enroll in the new
offering during the Subscription Period for the new offering. If an Employee
does not want to participate in the new offering, he must affirmatively elect
not to participate in the new offering during the Subscription Period for the
new offering.
The balance in the Employee's Account at the end of an offering not used to
purchase Common Stock shall be refunded to him. Upon termination of the Plan
the balance in each Employee's Account not used to purchase Common Stock shall
be refunded to him.
12. INTEREST
No interest will be paid or allowed on any money in the Accounts of
participating Employees.
13. RIGHTS TO PURCHASE SHARES NOT TRANSFERABLE
No Employee shall be permitted to sell, assign, transfer, pledge, or
otherwise dispose of or encumber either the payroll deductions credited to his
Account or any rights with regard to the exercise of an Option or to receive
Shares under the Plan other than by will or the laws of descent and
distribution, and such right and interest shall not be liable for, or subject
to, the debts, contracts, or liabilities of the Employee. Any such action
taken by the Employee shall be null and void.
A-4
14. RIGHTS AS STOCKHOLDER AND EVIDENCE OF STOCK OWNERSHIP
(a) An Employee will not become a stockholder, and will have no rights as a
stockholder, with respect to Shares being purchased under this Plan until
after his Option is exercised and the Shares have been issued by Sprint.
Promptly following each Date of Exercise, the number of shares of Common Stock
purchased by each participant shall be deposited into an account established
in the participant's name at a stock brokerage or other financial services
firm designated by Sprint (the "ESPP Broker").
(b) A participant shall be free to undertake a disposition (as that term is
defined in Section 424 of the Code) of the Shares in his ESPP Broker account
at any time, whether by sale, exchange, gift, or other transfer of legal
title, but in the absence of such a disposition of the Shares, the Shares must
remain in the participant's account at the ESPP Broker until the holding
period set forth in Section 423(a) of the Code has been satisfied. With
respect to Shares for which the Section 423(a) holding period has been
satisfied, the participant may move those Shares to another brokerage account
of participant's choosing or request that a stock certificate be issued and
delivered to him.
(c) A participant who is not subject to payment of U.S. income taxes may
move his Shares to another brokerage account of his choosing or request that a
stock certificate be issued and delivered to him at any time, without regard
to the satisfaction of the Section 423(a) holding period.
15. APPLICATION OF FUNDS
All funds received by Sprint in payment for Shares purchased under this Plan
may be used for any valid corporate purpose.
16. COMMENCEMENT OF PLAN
This Plan commenced on the first day of June, 1988. This Plan as amended and
restated is effective for the 1998 and subsequent offerings.
17. GOVERNMENTAL APPROVALS OR CONSENTS; AMENDMENTS OR TERMINATION
This Plan and any offering and sales to Employees under it are subject to
any governmental approvals or consents that may be or become applicable in
connection therewith.
The Plan shall terminate on the effective date of a merger or consolidation
in which Sprint is not the surviving corporation, if such merger or
consolidation is not between or among corporations related to Sprint. If such
event occurs during a Purchase Period for an offering, the last Date of
Exercise shall be the last such date occurring prior to the date of
termination of the Plan. Any payroll deductions placed in an Employee's
Account after such last Date of Exercise will be refunded to the Employee.
The Board may terminate the Plan or make such changes in the Plan and
include such terms in any offering under this Plan as may be necessary or
desirable, in the opinion of Counsel for Sprint, to comply with the rules or
regulations of any governmental authority, or to be eligible for tax benefits
under the Code or the laws of any state; or for any other reason provided that
no termination or amendment may adversely affect the rights of any participant
in any offering already commenced, nor may any amendment require the sale of
more Shares than are authorized without prior approval of Sprint's
stockholders.
18. NOTICES
All notices or other communications by a participant to Sprint under or in
connection with the Plan shall be deemed to have been duly given when received
in the form specified by Sprint at the location, or by the person, designated
for the receipt thereof.
A-5
SPRINT CORPORATION
P.O. BOX 11315, KANSAS CITY, MISSOURI 64112
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL MEETING
ON APRIL 21, 1998
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3 AND AGAINST ITEMS
4, 5 AND 6.
The undersigned hereby appoints W.T. Esrey, J.R. Devlin and A.B. Krause, and
each of them, with full power of substitution as proxies, to vote all the
shares of FON Common Stock, PCS Common Stock and Preferred Stock of Sprint
Corporation (Sprint) which the undersigned is entitled to vote at the 19981999
Annual Meeting of Stockholders to be held April 21, 1998,20, 1999, and any adjournment
thereof, upon the matters set forth below and on the reverse side, AND IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING.
THIS PROXY, IF SIGNED AND RETURNED, WILL BE VOTED AS SPECIFIED ON THE REVERSE
SIDE. IF THIS CARD IS SIGNED AND RETURNED WITHOUT SPECIFICATIONS, YOUR SHARES
WILL BE VOTEDand in their
discretion upon such other matters as may properly come before the meeting.
This Proxy, if signed and returned, will be voted as specified. If this card
is signed and returned without specifications, your shares will be voted FOR
ITEMSitems 1 and 2 ANDand AGAINST items 3, AND AGAINST ITEMS 4 5 AND 6.and 5. A majority of said proxies, or any
substitute or substitutes, who shall be present and act at the meeting (or if
only one shall be present and act, then that one) shall have all the powers of
said proxies hereunder.
1. To elect the nominees listed below, and each of them, as Directors of
Class III;I; and while Sprint has no reason to believe that any of the nominees
will decline or be unable to serve, if any do, to vote with discretionary
authority.
WILLIAMWarren L. Batts, Irvine O. Hockaday, Jr., Ronald T. ESREY, LINDA KOCH LORIMER, STEWART TURLEYLeMay
NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark the
"FOR ALL EXCEPT" box and strike a line through the name(s) of the nominee(s).
Your shares will be voted for the remaining nominee(s).
[_] FOR ALL NOMINEES [_] WITHHOLD [_] FOR ALL EXCEPTFor All Nominees[_] Withhold[_] For All Except
2. To approve amendments to the 1988 Employees Stock Purchase Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
3. To approve the appointment of Ernst & Young LLP as independent auditors of
Sprint for 1998.1999.
[_] FOR [_] AGAINST [_] ABSTAINFor[_] Against[_] Abstain
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------3. Stockholder proposal concerning meeting fees for outside Directors.
[_] For[_] Against[_] Abstain
4. Stockholder proposal concerning retirement plan for outside Directors."soft dollar" political contributions.
[_] FOR [_] AGAINST [_] ABSTAINFor[_] Against[_] Abstain
5. Stockholder proposal concerning stock options.
[_] FOR [_] AGAINST [_] ABSTAIN
6. Stockholder proposal concerning compensation agreements contingent upon a
change in control of Sprint.
[_] FOR [_] AGAINST [_] ABSTAIN
--------------------------
--------------------------
--------------------------For[_] Against[_] Abstain
-----------------------------------
-----------------------------------
-----------------------------------
SIGNATURE(S) DATE
Please sign exactly as name
appears. If shares are held
jointly, any one of the joint
owners may sign. Attorneys-in-fact,Attorneys-in-
fact, executors, administrators,
trustees, guardians or corporation
officers should indicate the
capacity in which they are
signing. PLEASE SIGN, DATE, AND
MAIL THIS PROXY PROMPTLY whether
or not you expect to attend the
meeting. You may nevertheless vote
in person if you do attend.
FIDELITY INSTITUTIONAL OPERATIONS CO.
P.O. BOX 9107
HINGHAM, MA 02043-9107
SPRINT RETIREMENT SAVINGS PLAN CENTEL EMPLOYEES' STOCK OWNERSHIP PLAN
SPRINT RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT GLOBAL ONE RETIREMENT SAVINGS PLAN
EMPLOYEES
CENTEL RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT
EMPLOYEES
FOR FASTER, MORE CONVENIENT VOTING USE THE INTERNET
INTERNET VOTING: www.401kproxy.com
-----------------
**** YOUR PERSONAL CONTROL NUMBER: 999 999 999 999 99 ****
---------------------------------PLEASE FOLD AND DETACH CARD AT PERFORATION
BEFORE MAILING-------------------------------------------
FIDELITY MANAGEMENT TRUST COMPANY
and THE NORTHERN TRUST COMPANY, TRUSTEES
P.O. Box 9107, Hingham, Massachusetts 02043-9107
VOTING INSTRUCTIONS FOR ANNUAL MEETING OF STOCKHOLDERS OF SPRINT CORPORATION ON
APRIL 20, 1999
I hereby direct Fidelity Management Trust Company and The Northern Trust
Company, either in person or by proxy, to vote all shares of FON Common Stock
and PCS Common Stock of Sprint Corporation (Sprint) which have been allocated to
my account(s) under the Sprint Retirement Savings Plan, the Sprint Retirement
Savings Plan for Bargaining Unit Employees, the Centel Retirement Savings Plan
for Bargaining Unit Employees, the Centel Employees' Stock Ownership Plan and
the Global One Retirement Savings Plan at the Annual Meeting of Stockholders to
be held April 20, 1999, and any adjournments thereof, in the manner specified on
the reverse side, AND TO AUTHORIZE NAMED INDIVIDUALS AS PROXIES TO VOTE IN THEIR
DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Date __________________________, 1999.
If you sign this card and it is received by Fidelity
Management Trust Company by April 14, 1999, YOUR SHARES
WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE, OR IF
THIS CARD IS SIGNED AND RETURNED WITHOUT
SPECIFICATIONS, YOUR SHARES WILL BE VOTED FOR ITEMS 1
AND 2 AND AGAINST ITEMS 3, 4 AND 5.
___________________________________
Signature
You are entitled to direct the voting of the total number of shares of
FON Common Stock and PCS Common Stock of Sprint allocated to your accounts
through February 23, 1998,22, 1999, the record date for voting at the April 21, 1998,20, 1999,
Stockholders Meeting. Your accounts are held within one or more of the following
plans: (a) the Sprint Retirement Savings Plan (including TRASOP), (b) the Sprint
Retirement Savings Plan for Bargaining Unit Employees, (c) the Centel Retirement
Savings Plan for Bargaining Unit Employees, (d) the Centel Employees' Stock
Ownership Plan (e)
the 360(degrees) Communications Company Retirement Savings Plan, and (f)(e) the Global One Retirement Savings Plan. The Centel
Employees' Stock Ownership Plan and the Centel Retirement Savings Plan for
Bargaining Unit Employees and the
360(degrees) Communications Company Retirement Savings Plan each provide for the trustees to vote all Sprint
shares held in the trusts for which they do not receive voting instructions in
the same proportions as they vote the Sprint stockshares for which they do receive
instructions. The trustee will vote all unallocated shares held in the Sprint
Retirement Savings Plan (including the TRASOP), the Sprint Retirement Savings
Plan for Bargaining Unit Employees and the Global One Retirement Savings Plan in
the same proportions as instructions received for shares voted, and any shares
allocated to participant accounts in these plans for which the trustees do not
receive voting instructions will not be voted.
Statements of your accounts will be provided separately.
--------Please fold and detach card at perforation before mailing--------
Please vote by filling in the appropriate boxes below. If you do not specify,
your shares will be voted---------------------------------PLEASE FOLD AND DETACH CARD AT PERFORATION
BEFORE MAILING-------------------------------------------
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOXES BELOW. IF YOU DO NOT SPECIFY,
YOUR SHARES WILL BE VOTED FOR itemsPROPOSALS 1 AND 2 andAND AGAINST 3, and AGAINST items 4 5 and 6.
1. To elect the nominees listed below, and each of them, as Directors of Class
III;AND 5.
1. To elect the nominees listed below, and each of them, as Directors of FOR all WITHHOLD
Class I; and while Sprint has no reason to believe that any of the nominees listed AUTHORITY
nominees will decline or be unable to serve, if any do, to authorize at left (except to vote for all
named individuals as proxies to vote with discretionary authority.
[_]FOR all nominees listed below [_]WITHHOLD AUTHORITY
(except as marked to nominees listed
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE THE NOMINEE'S NAME ON the at left
THE LINE BELOW.) contrary at left)
to vote for all nominees listed at left
(To withhold authority to vote for any individual nominee write the nominee's name on the line below.)
WilliamWarren L. Batts Irvine O. Hockaday, Jr.
Ronald T. Esrey Linda Koch Lorimer Stewart Turley
- ---------------------------------------------------------------------------------------------------
LeMay
FOR AGAINST ABSTAIN
2. To approve amendments to the 1988 Employees Stock Purchase Plan. [_] [_] [_]
3. To approve the appointment of Ernst & Young LLP as independent auditors of FOR AGAINST ABSTAIN
Sprint for 1998. [_] [_] [_]1999.
SHAREHOLDER PROPOSALS
3. Stockholder proposal concerning meeting fees for outside Directors.
4. Stockholder proposal concerning retirement plan for outside Directors. [_] [_] [_]"soft dollar" political contributions.
5. Stockholder proposal concerning stock options. [_] [_] [_]
6. Stockholder proposal concerning compensation agreements contingent upon a
change in control [_] [_] [_]
of Sprint.
(Please sign on reverse side.(PLEASE SIGN ON REVERSE SIDE.)
PRESORTED
FIRST CLASS
FIDELITY INSTITUTIONAL RETIREMENT SERVICES CO. U.S. POSTAGE
P.O. BOX 9107 PAID
HINGHAM, MA 02043-9107 PROXY
TABULATOR
Sprint Retirement Savings Plan Centel Employees' Stock Ownership Plan
Sprint Retirement Savings Plan for Bargaining Unit Employees 360(degrees) Communications Company Retirement Savings Plan
Centel Retirement Savings Plan for Bargaining Unit Employees Global One Retirement Savings Plan
- ----------Please fold and detach card at perforation before mailing-----------
FIDELITY MANAGEMENT TRUST COMPANY
and THE NORTHERN TRUST COMPANY, TRUSTEES
P.O. Box 9107, Hingham, Massachusetts 02043-9107
Voting Instructions for Annual Meeting of Stockholders of
Sprint Corporation on April 21, 1998
I hereby direct Fidelity Management Trust Company and The Northern Trust
Company, either in person or by proxy, to vote all shares of Common Stock of
Sprint Corporation (Sprint) which have been allocated to my account(s) under the
Sprint Retirement Savings Plan, the Sprint Retirement Savings Plan for
Bargaining Unit Employees, the Centel Retirement Savings Plan for Bargaining
Unit Employees, the Centel Employees' Stock Ownership Plan, the 360(degrees)
Communications Company Retirement Savings Plan and the Global One Retirement
Savings Plan at the Annual Meeting of Stockholders to be held April 21, 1998,
and any adjournments thereof, in the manner specified on the reverse side, and
to authorize named individuals as proxies to vote in their discretion upon such
other matters as may properly come before the meeting:
Date__________________________, 1998
If you sign this card and it is received by Fidelity
Management Trust Company by April 15, 1998, your shares
will be voted as directed. In order to direct the trustees,
you must check off a box for each individual proposal on
the reverse side.
______________________________
Signature