The relative voting power of Sprint’s different classes of voting stock is determined under formulas in Sprint’s Articles of Incorporation.

How to vote

You may vote by proxy or in person at the meeting. To vote by proxy, you may use one of the following methods if you are a registered holder (that is, you hold your stock in your own name):

If your shares are held in “street name” by a broker or other nominee, you should check the voting form used by that firm to determine whether you may vote by telephone or Internet.

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 amendment to Sprint’s Articles of Incorporation and to Sprint’s Employees Stock Purchase Plan, for ratification 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 at the meeting by:

Voting by employees participating in Sprint’s Retirement Savings Plans

If you are a participant in Sprint’s Retirement Savings Plans, you are entitled to instruct the trustee, Fidelity Management Trust Company, how to vote the shares allocated to your account. If you do not instruct Fidelity how to vote your shares, the Retirement Savings Plans provide for Fidelity to vote your shares in the same proportion as the shares for which it receives instructions from all other participants. To allow sufficient time for Fidelity to vote, your voting instructions must be received by Fidelity by May 8, 2003.

You will receive one proxy card that covers any shares held for you in your Retirement Savings Plan account, as well as any other shares registered in your own name.

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 meeting will be elected as Directors. Abstentions and broker “non-votes” are not counted for this purpose.

Approval of the amendment to Sprint’s Articles of Incorporation declassifying the Board of Directors requires the affirmative vote of a majority of the votes outstanding and entitled to vote. If you vote to “abstain” on this proposal, it will have the same effect as if you voted against the proposal.

For all other matters to be voted upon at the meeting, the affirmative vote of a majority of votes cast in person or by proxy, and entitled to vote on the matter, is necessary for approval. For this purpose, if you vote to “abstain” from voting on a proposal, your shares will be treated as present and will have the same effect as if you voted against the proposal. Broker “non-votes,” however, are not counted as cast for this purpose and have no effect on the outcome of the vote.

Costs 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 $8,500 plus out-of-pocket expenses.

Delivery of proxy materials to households where two or more Stockholders reside

Securities and Exchange Commission (SEC) rules allow us to deliver a single copy of an annual report, proxy statement, prospectus, or information statement to any household where two or more Stockholders reside if we believe the Stockholders are members of the same family. This rule benefits you by reducing the volume of duplicate information you receive at your household. It also benefits Sprint by reducing our printing and mailing costs.

We mailed your household a single set of proxy materials this year unless you provided instructions to the contrary in response to a notice mailed to you last year. However, we mailed each Stockholder in your household a separate proxy card or voting instruction form. If you prefer to receive your own copy of the proxy materials for this year’s Annual Meeting, please request a duplicate set by writing to Sprint Shareholder Relations, 6200 Sprint Parkway, Mailstop: KSOPHF0302-3B206, Overland Park, KS 66251 or by calling 1-800-259-3755 (option 4).

If you prefer to receive your own copy of proxy materials in the future, and you are a registered holder, please contact Sprint Shareholder Relations. If a broker or other nominee holds your shares, you may instruct your broker to send duplicate mailings by following the instructions on your voting instruction form or by contacting your broker.

If you share a household address with another Stockholder, and you received duplicate mailings of the proxy materials this year, you may request that your household receive a single set of proxy materials in the future. If you are a registered holder, please contact Sprint Shareholder Relations. If a broker or other nominee holds your shares, follow the instructions on your voting instruction form or contact your broker.

If you hold some Sprint shares as a registered holder or through Sprint’s Retirement Savings Plan, and other Sprint shares in the name of a broker or other nominee, we must send you proxy materials for each account. To avoid receiving duplicate sets of proxy materials, you may consolidate accounts or consent to electronic delivery as described in the following section.

Viewing the proxy materials on-line

We are able to distribute the annual report and proxy statement to you in a fast and efficient manner via the Internet. This reduces the amount of paper delivered to your address and eliminates the cost of sending these documents by mail. You may elect to view all future annual reports and proxy statements on the Internet instead of receiving them by mail. To make this election follow the instructions after you vote via the Internet.

Shareholders who have enrolled for electronic delivery receive an e-mail notice of shareholder meetings. The e-mail will provide links to Sprint���s annual report and proxy statement. These documents are in PDF format so you will need Adobe Acrobat^® Reader to view them on-line. The e-mail will also provide a link to a voting web site and your control number to use to vote via the Internet.

Confidential voting policy

Your individual vote is kept confidential from our Directors, officers, and employees except for certain specific and limited 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 broker or other nominee, and you plan to attend the meeting, please bring proof of ownership with you to the meeting. A brokerage account statement showing that you owned voting stock of Sprint on March 26, 2003, is 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 unless the Board of Directors sets a different date. In 2004, the third Tuesday falls on April 20.

We anticipate mailing our proxy materials for next year’s Annual Meeting on or about March 19, 2004. Based on that schedule, the deadline for Stockholder proposals to be included in the proxy statement for that meeting is November 20, 2003. If you intend to submit such a proposal, it must be received by Sprint’s Corporate Secretary at 6200 Sprint Parkway, Mailstop KSOPHF0302-3B679, Overland Park, Kansas 66251, no later than that date.

If you intend to submit a matter for consideration at 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 bylaws. Those bylaws provide that, to be timely, your notice must be received by Sprint’s Corporate Secretary at 6200 Sprint

Parkway, Mailstop KSOPHF0302-3B679, Overland Park, Kansas 66251, by November 20, 2003 but not before October 21, 2003. For each matter you intend to bring before the meeting, your notice must include a brief description of the business you wish to be considered and the reasons for conducting that business at the meeting. The notice must also include your name and address, the class and number of shares of Sprint that you own, and any material interest you have in that business.

Security ownership of certain beneficial owners

The following table provides information about the only known beneficial owners of more than five percent of each class of Sprint’s outstanding voting stock as of March 26, 2003, except as otherwise provided in Footnote 8:

Security ownership of Directors and executive officers

The following table states the number of shares of Sprint’s common stock beneficially owned, as of December 31, 2002, by each current Director, each executive officer named in the “Summary Compensation Table,” and by all Directors and executive officers as a group. Including shares covered by options exercisable within 60 days, Mr. Esrey beneficially owned 1.1% of the outstanding shares of FON common stock. However, excluding shares covered by options that were not in-the-money on December 31, 2002, Mr. Esrey owned 0.3% of the outstanding FON common stock. Other than Mr. Esrey, no individual Director or executive officer owned more than one percent of the outstanding shares of FON common stock or one percent of the outstanding shares of PCS common stock. As a group the listed individuals owned 2.1% of the outstanding FON common stock and 1.1% 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.

		FON Stock					PCS Stock
Name		Shares Owned			Shares Covered By Exercisable Options (1)		Shares Owned			Shares Covered By Exercisable Options (1)
DuBose Ausley		16,489			35,538		8,150			17,096
J. Richard Devlin		86,558			789,496		98,744			430,738
William T. Esrey		2,660,162	(2)		8,267,986		1,644,396	(3)		4,343,325
Gary D. Forsee		0			0		31,377			0
Michael B. Fuller		305,943			932,571		382,552			341,438
Irvine O. Hockaday, Jr.		11,409			21,538		17,933			13,538
Len J. Lauer		110,431			417,034		116,907			238,726
Ronald T. LeMay		1,694,817			3,938,304		1,834,593			1,278,720
Linda Koch Lorimer		12,093			44,106		32,963			24,822
Charles E. Rice		37,448			39,250		24,175			22,394
Louis W. Smith		10,901			11,538		2,661			8,538
Stewart Turley		20,000			39,250		10,390			22,394
All Directors and executive officers as a group (17 persons)		5,077,198	(2)		15,832,835		4,378,993	(3)		7,438,880

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’s 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 these reports furnished to Sprint and written representations that no other reports were required, during 2002 all Section 16(a) filing requirements applicable to its Directors and executive officers were complied with, except for failure to report timely on a Form 4 the purchase of 1,300 shares of FON Stock by an investment advisor for Irvine O. Hockaday, Jr. and an inadvertent late filing of Stewart Turley’s Form 5 for 2001. These failures were inadvertent and, as soon as the oversights were discovered, the forms were promptly filed.

Litigation

In December 2000, The Amalgamated Bank, an institutional Stockholder, as Trustee for the Longview Collective Investment Fund, and two other Stockholders, each filed a derivative action purportedly on behalf of Sprint against certain of Sprint’s current and former officers and Directors in the Jackson County, Missouri, Circuit Court. All three suits were consolidated and allege that the individual defendants breached their fiduciary duties to Sprint and were unjustly enriched by making undisclosed amendments to Sprint’s stock option plans, by failing to disclose certain information concerning regulatory approval of the proposed merger of Sprint and WorldCom, Inc., and by overstating Sprint’s earnings for the first quarter of 2000. The plaintiff seeks damages, to be paid to Sprint, in an unspecified amount.

On March 19, 2003, plaintiff’s counsel and the defendants announced a settlement, subject to court approval, of the lawsuit. The settlement does not reflect any admission of liability by the defendants. The settlement by plaintiff’s counsel and the defendants includes the adoption of enhancements of Sprint’s corporate

governance policies and practices; an agreement by current Board members and senior management to certain restrictions on options (or any stock obtained through the exercise of options accelerated by Stockholder approval of the WorldCom merger); and the payment of plaintiff’s attorneys’ fees in the form of 250,000 FON shares and 500,000 PCS shares. Many of the corporate governance enhancements are included in those described below under “Corporate governance matters.”

In June 2001, The New England Health Care Employees Pension Fund, an institutional Stockholder, and two other Stockholders each filed a purported class action in the federal court, for the District of Kansas. All three suits were consolidated and allege that Sprint and certain of Sprint’s current and former officers and Directors failed to disclose certain information concerning regulatory approval of the proposed WorldCom merger and overstated Sprint’s earnings for the first quarter of 2000, in violation of the federal securities laws, and seek an unspecified amount of damages. On March 19, 2003, plaintiffs and defendants in these securities cases announced a settlement, subject to court approval. The settlement does not reflect any admission of liability by defendants, and there has been no finding of any violation or liability by defendants. The settlement includes the payment to the plaintiffs class and counsel a total of $50 million.

New Chief Executive Officer

On March 19, 2003, Gary Forsee became Chief Executive Officer of Sprint. Mr. Forsee was previously the Vice Chairman-Domestic Operations of BellSouth and Chairman of Cingular Wireless. BellSouth and Cingular Wireless filed suit to enforce the non-compete and confidentiality provisions of Mr. Forsee’s employment contract and prevent him from becoming Sprint’s CEO. The Georgia trial court determined that his non-competition agreement was not enforceable and referred the confidentiality provisions to an arbitrator. On March 18, 2003, the arbitrator permitted Mr. Forsee to become Sprint’s CEO subject to certain restrictions for a period of twelve months designed to protect BellSouth’s confidential information. For example, among other things, Mr. Forsee will not be able to be present at, or participate in, discussions concerning potential mergers, acquisitions or sales of assets with respect to specified telecommunications companies and cannot solicit BellSouth or Cingular employees. BellSouth has appealed the trial court’s decision to the Georgia Supreme Court and BellSouth and Cingular are separately pursuing a claim against Sprint for tortious interference with their relationship with Mr. Forsee.

I.PROPOSAL 1. ELECTION OF DIRECTORS

(Item 1 on Proxy Card)

The Board of Directors of Sprint isWe currently divided into three classes, with the term of office of each class ending in successive years. The terms of the Directors of Class II expire with this meeting.have ten seats on our board. Each of the threeten nominees, for Class II, if elected, will serve three years until the 2006 Annual Meeting2013 annual meeting and until a successor has been duly elected and qualified. The Directors in Class III will continue in office until the 2004 meeting and the Directors in Class I will continue in office until the 2005 meeting. As described below, Sprint is proposing to declassify its Board. See “Proposal to Adopt an Amendment to the Articles of Incorporation to Eliminate Classification of Sprint’s Board of Directors.”

The persons named in the accompanying proxy will vote your shares for the election of the nominees named below as Directors of Class II unless you direct otherwise. Each nominee has consented to be named and to continue to serve if elected. If any of the nominees becomebecomes unavailable for election for any reason, the proxies will be voted for the other nominees and for any substitutes.

All our directors bring to our board significant executive leadership experience derived from their service as executives and, in most cases, chief executive officers, of large corporations. They also all bring extensive board experience and a diversity of views and perspectives derived from their individual experiences working in a broad range of industries and occupations. Certain individual experiences, qualifications and skills of our directors that contribute to our board’s effectiveness as a whole are described under “—Nominees for Director” below.

Director Nomination Process

In evaluating prospective candidates or current board members for nomination, the Nominating and Corporate Governance Committee, or Nominating Committee, considers all factors it deems relevant, including, but not limited to, the candidate’s:

The Nominating Committee reviews with our board the appropriate characteristics and background needed for directors. This review is undertaken not only in considering new candidates for board membership, but also in determining whether to nominate existing directors for another term. The Nominating Committee determines the current director selection criteria and conducts searches for prospective directors whose skills and attributes reflect these criteria. To assist in the recruitment of new members to our board, the Nominating Committee employs one or more third-party search firms. All approvals of nominations are determined by the full board.

Consistent with ourCorporate Governance Guidelines, the Nominating Committee places a great deal of importance on identifying candidates having a variety of views and perspectives arising out of their individual experiences, professional expertise, educational background, and skills. In considering candidates for our board, the Nominating Committee considers the totality of each candidate’s credentials in the context of this standard.

It is the policy of the Nominating Committee also to consider candidates recommended by shareholders, using the same key factors described above for purposes of its evaluation. A shareholder who wishes to recommend a prospective nominee for our Board should notify the Corporate Secretary in writing with supporting material that the shareholder considers appropriate. The Nominating Committee will also consider whether to nominate any person nominated by a shareholder pursuant to the provisions of our bylaws relating to shareholder nominations described in “General Information – Nominations of Individuals to Serve as Directors.”

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The following information is given

Proposal 1 – Election of Directors

Majority Voting

Our bylaws provide that each nominee for director in an uncontested election will be elected if the votes cast “for” that nominee exceed the votes cast “against” that nominee. Votes cast, with respect to the election of directors, do not include abstentions and broker non-votes. The date for determining if an election is contested or uncontested has been set at 14 days before we file our definitive proxy statement. This requirement is intended to help us determine for our proxy statement whether director nominees for election.

will be elected under a majority or plurality standard prior to soliciting proxies.

OurClass II—Corporate Governance Guidelines provide that an incumbent nominee who receives fewer votes “for” than “against” in an uncontested election is expected to tender promptly his or her resignation. The Nominating Committee will recommend, and our board will determine, whether or not to accept the tendered resignation within 90 days of the certification of the shareholder vote with respect to the director election. Our board’s decision will be publicly disclosed.

Nominees to Serve Three Years Until 2006 Annual Meetingfor Director

Biography: Mr. Bennett served as President of Discovery Holding Company from March 2005 until September 2008, when the company merged with Discovery Communications, Inc. creating a new public company. Mr. Bennett also served as President and CEO of Liberty Media Corporation from April 1997 until August 2005 and continued as President until March 2006. He was with Liberty Media from its inception, serving as its principal financial officer and in various other capacities. Prior to his tenure at Liberty Media, Mr. Bennett worked with Tele-Communications, Inc. and the Bank of New York.

Qualifications:Mr. Bennett has extensive knowledge of the capital markets and other financial and operational issues from his experiences as a principal financial officer and president and chief executive officer of Liberty Media, which allows him to provide an invaluable perspective to our board’s discussions on financial and operational matters.

Biography:Mr. Bethune served as Chief Executive Officer of Continental Airlines from 1994 and as Chairman and Chief Executive Officer from 1996 until December 2004.

Qualifications: Mr. Bethune has extensive experience serving as a chief executive officer and director of large international corporations, which provides our board a perspective of someone familiar with all facets of an international enterprise.

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Proposal 1 – Election of Directors

June 2007 and as Chairman of WellPoint, Inc. from November 2005 until March 2010. Prior to Anthem’s merger with WellPoint Health Networks in November 2004, Mr. Glasscock had served as Anthem’s President and Chief Executive Officer since 2001 and also as Anthem’s Chairman since 2003.

Qualifications: Mr. Glasscock’s prior experience as the chairman, president and chief executive officer of WellPoint, Inc. and its predecessor companies, during which time the companies grew from approximately $6 billion in revenue to more than $60 billion in revenue, provides a unique insight into the challenges and opportunities involved in growing a company within a highly competitive industry, and his expertise derived from over 20 years of experience in financial services and as a senior executive and director enables him to provide invaluable assistance to our board on financial and marketing matters. Throughout his career, Mr. Glasscock has developed expertise in the successful completion and integration of mergers, utilization of technology to improve productivity and customer service, and team building and human capital development. Mr. Glasscock also has significant experience as a public company director and as a member of various committees related to important board functions, including audit, finance, governance and compensation.

Biography:Mr. Hance joined Carlyle in November 2005 and has worked primarily in its Global Market Strategies segment and the financial services sector. Prior to joining Carlyle in 2005, he served as the Vice Chairman of Bank of America Corporation from 1993 until his retirement in January, 2005 and as the Chief Financial Officer of Bank of America Corporation from 1988 until April 2004.

Qualifications: Mr. Hance’s experience as a director for a wide variety of large corporations and his extensive experience in the financial services industry, which included responsibility for financial and accounting matters while serving as Chief Financial Officer of Bank of America Corporation, provide an invaluable perspective into the diverse issues facing an international enterprise, particularly relating to financial matters.

Directors continuing in office

The following information is given with respect to the Directors who are not nominees for election at this meeting.

Class III—Serving Until 2004 Annual Meeting

Linda Koch Lorimer, age 50. Vice President and Secretary of the University, Yale University, New Haven, Connecticut. She is a director of McGraw-Hill, Inc., and Yale-New Haven Hospital and a trustee of Hollins University. Before 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. She has served as the President of the Board of the American Association of Colleges and Universities and as Vice Chair of The Center for Creative Leadership. She has been a Director of Sprint since 1993.
Stewart Turley, age 68. Retired Chairman of Eckerd Corporation, a diversified retailer, Clearwater, Florida. He is a director of WCI Communities, Inc. Before his retirement in 1997, Mr. Turley had been Chairman of Eckerd Corporation since 1975. He has been a Director of Sprint since 1980.

Class I—Serving Until 2005 Annual Meeting

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Proposal 1 – Election of Sprint since 1997, and has been named Sprint’s initial lead independent Director.Directors

June 2005 until the Embarq spin-off in May 2006. Before that, Mr. Hesse served as Chairman, President and Chief Executive Officer of Terabeam Corp., a wireless telecommunications service provider and technology company, from 2000-2004. Prior to serving at Terabeam Corp., Mr. Hesse spent 23 years at AT&T during which he held various senior management positions, including President and Chief Executive Officer of AT&T Wireless Services. He serves on the board of directors of the National Board of Governors of the Boys and Girls Clubs of America.

Qualifications: As our president and chief executive officer, Mr. Hesse provides our board with unparalleled insight into our company’s operations, and his 35 years of experience in the telecommunications industry provides substantial knowledge of the challenges and opportunities facing our company.

Qualifications: Mrs. Hill’s significant experience as a consultant to and director of large commercial enterprises provides our board with the keen insight of someone whose expertise is advising companies on the governance and operational challenges facing international consumer companies.

positions, most recently as President of Network Services. Following his retirement, Mr. Ianna served as a business consultant, executive and board member for several private and nonprofit enterprises.

Qualifications: Mr. Ianna’s technical background and expertise, and his vast experience in the telecommunications industry as an executive and director for a diverse array of enterprises allows him to provide a unique perspective to our board on a wide variety of issues.

He previously served in various executive positions for The Ericsson Group from 1982 through 1999, including as its President and Chief Executive Officer from 1998 through 1999. He currently serves as the Chairman of the Swedish Public Service Broadcasting Foundation and of the (Swedish) Defense Materiel Administration.

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Proposal 1 – Election of Directors

Qualifications: Mr. Nilsson has a decades-long record of achievement in the international telecommunications marketplace, which gives our board a unique international perspective, and his experience as a chief executive officer and director of several enterprises provides the perspective of a leader familiar with the challenges and opportunities facing our company.

		WILLIAM R. NUTI, 48, director since 2008, Chairman of the Board, Chief Executive Officer and President and Chief Operating Officer of Sprint, Overland Park, Kansas. He isNCR Corporation, a director of The Allstateglobal technology company.
		Public Company Board Directorships:NCR Corporation Ceridian Corporation, and Imation Corporation.
		Former Directorships Held During the Past Five Years: Symbol Technologies, Inc.
		Biography: Mr. LeMayNuti has served as Chief Executive Officer and President and Chief Operating Officer of SprintNCR since 1997. He was a Director of Sprint from 1993 until July 1997 and re-elected in December 1997. Mr. LeMay is expected to leave his positions at Sprint in the near future. Pursuant to Sprint’s Articles of Incorporation, the Board will select a new Director to fill the resulting vacancy.August 2005,

and as Chairman of NCR since October 2007. Before joining NCR, Mr. Nuti served as President and Chief Executive Officer of Symbol Technologies, Inc. from 2003 to 2005, and as President and Chief Operating Officer of Symbol Technologies from 2002 to 2003. Mr. Nuti joined Symbol Technologies in 2002 following more than 10 years at Cisco Systems, where he advanced to the dual role of senior vice president of the company’s Worldwide Service Provider Operations and senior vice president of U.S. Theater Operations.

Qualifications: As a current chairman and chief executive officer of a global technology company, Mr. Nuti provides our board an invaluable perspective of someone with primary responsibility for the oversight of all facets of an international enterprise in today’s global economy.

		RODNEY O’NEAL, 58, director since 2007, Chief Executive Officer and President of Delphi Automotive PLC, a global supplier of mobile electronics and transportation systems.
		Public Company Board Directorships: Delphi Automotive PLC.
		Former Directorships Held During the Past Five Years: The Goodyear Tire & Rubber Company.
		Biography: Mr. O’Neal has served as Chief Executive Officer and President of Delphi since January

2007. From January 2005 until January 2007, he served as President and Chief Operating Officer of Delphi. In 2003, he was named president of the Dynamics, Propulsion, and Thermal Sector. Previously, he served in a variety of domestic and international operating assignments for both Delphi and its former parent company, General Motors.

Qualifications: Mr. O’Neal has extensive senior management experience as both a chief executive officer and director, which provides the knowledge and expertise necessary to contribute an important viewpoint on a wide variety of governance and operational issues.

CompensationOur Board of Directors recommends that you vote “FOR” the election of the ten nominees for director in this Proposal 1.

Notice of Annual retainerMeeting and meeting fees. Directors who are not employees of Sprint (the Outside Directors) are each paid $40,000 annually plus meeting fees. For each meeting attended, Sprint pays Outside Directors the following fees: (1) $1,250 for Board meetings, (2) $1,000 for committee meetings, (3) $1,250 for in-person meetings of Outside Directors, unless those meetings occur in connection with a Board meeting, and (4) $1,250 for in-person business meetings attended on Sprint’s behalf. Under 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 Outside Directors may elect to defer all or some of their fees.Proxy Statement  |  8

Stock options. On February 19, 2002, each Outside Director was granted an option to purchase 6,550 shares of FON Stock and 6,550 shares of PCS Stock at an option price equal to 100% of the fair market value on that date. The options expire ten years from the date of grant. Twenty-five percent of the shares subject to the option became exercisable on February 19, 2003, and an additional 25% become exercisable on February 19th of each of the three succeeding years.

Board Operations

With respect to these grants, vesting is accelerated in the event of the Outside Director’s death, permanent disability, attainment of mandatory retirement age (that is, the Annual Meeting closest to the Outside Director’s 70th birthday), or change in control of Sprint.

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. The retirement plan was amended in 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 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 $3,333 for any Director retiring while the current $40,000 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.

Outside Directors not eligible for benefits under the retirement plan after the 1996 amendment received units representing shares of FON Stock and PCS Stock credited to their accounts under the Director’s Deferred Fee Plan upon becoming a Director. Half of these units will vest upon completion of five years of Board service and ten percent will vest on each succeeding anniversary.

Other benefits. Outside Directors are provided with Sprint residential long distance service limited to $6,000 per year. They are also provided with Sprint PCS service limited to $2,000 per year and use of PCS handsets. The Directors are reimbursed for income taxes associated with these benefits. Outside Directors also may participate in Sprint’s charitable matching gifts program on the same terms as Sprint employees. Under that program, Sprint will match up to $10,000 a year in contributions by each Outside Director to an eligible institution or organization.

Corporate governance mattersBOARD OPERATIONS

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(4)

establishment of term limits for the Outside Directors and limits on the number of other public company boards on which Sprint directors can serve;

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The Board has

Board Operations

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Board Operations

Board Committees

Our board has five standing committees: the Audit Committee, the Finance Committee, the Compensation Committee, the Executive Committee, and the Nominating Committee. Each committee is described in the table below and each has a charter that describes such committee’s primary functions and principal responsiblities. A current copy of ourCorporate Governance Guidelines and the charter for each standing committee of our board is available atwww.sprint.com/governance or by email atshareholder.relations@sprint.com. Our charters and ourCorporate Governance Guidelines were adopted by our board and are annually reviewed and revised as necessary. With the exception of Mr. Hesse’s membership on our Executive Committee, our board has determined that each committee member is an independent director under the NYSE listing standards.

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Board Operations

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Director Compensation

DIRECTOR COMPENSATION

The compensation of our outside directors is partially equity-based and is designed to comply with ourCorporate Governance Guidelines, which provide that the guiding principles behind our outside director compensation practices are: (1) alignment with shareholder interests; (2) preservation of outside director independence; and (3) preservation of the fiduciary duties owed to all shareholders. Our outside directors are also reimbursed for direct expenses relating to their activities as members of our board.

Components of Compensation

The dollar value of the outside directors’ targeted annual grant is prorated for the time period between the date of the director’s initial appointment to our board and the date of the subsequent annual meeting. The prorated RSU grant is intended to offer a competitive compensation package to our outside directors, to immediately align the interests of outside directors with our shareholders’ interests and to be consistent with the manner in which the cash retainers are paid upon an outside director joining our board.

Deferred Compensation Plans

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Director Compensation

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Director Compensation

2011 Director Compensation Table

The following table provides compensation information for our outside directors who served during 2011. Compensation information for Mr. Hesse, our President and Chief Executive Officer, can be found in the “Executive Compensation” section of this proxy statement.

Name		Fees Earned or Paid in Cash ($)(1)		Stock Awards ($)(2)		All Other Compensation ($)(3)		Total           ($)
Robert R. Bennett		138,000		110,000		—			248,000
Gordon M. Bethune		127,000		110,000		—			237,000
Larry C. Glasscock		154,000		110,000		1,500			265,500
James H. Hance, Jr.		278,000		110,000		2,500			390,500
V. Janet Hill		128,000		110,000		—			238,000
Frank Ianna		123,750		110,000		—			233,750
Sven-Christer Nilsson		106,000		110,000		—			216,000
William R. Nuti		109,000		110,000		—			219,000
Rodney O’Neal		109,000		110,000		—			219,000

(1)

Consists of annual retainer fees; chairman and committee chair fees; and board and committee meeting fees.

(2)

Represents the grant date fair value of 20,755 RSUs granted to our outside directors on May 10, 2011 based on the Company’s closing stock price of $5.30 on that date. The grant date fair value is calculated in accordance with FASB ASC Topic 718.

For a discussion of the assumptions used in determining the compensation cost associated with stock awards, see note 13 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2011. We did not issue stock options to outside directors as part of our 2011 outside director compensation program.

As of December 31, 2011, each of the outside directors held 20,755 stock awards in the form of RSUs. Although we issued no cash dividends in 2011, it is our policy that any cash dividend equivalents on the RSUs granted to the outside directors are reinvested into RSUs, which vest when the underlying RSUs vest.

As of December 31, 2011, V. Janet Hill was the only outside director that held outstanding stock option awards. Mrs. Hill held options, all of which are vested, with respect to 72,785 shares. Stock options granted to Mrs. Hill were granted under the Nextel incentive equity plan prior to the Sprint-Nextel merger. Since the merger, we have not issued stock options to our outside directors as part of our outside director compensation program.

(3)

Consists of charitable matching contributions made on the director’s behalf in 2011 under our Sprint Foundation matching gift program described on page 15.

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Audit Committee Report

AUDIT COMMITTEE REPORT

The Audit Committee has reviewed and discussed our audited consolidated financial statements with management. The Audit Committee has also discussed with the independent registered public accounting firm the matters required to be discussed by the statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board, or PCAOB, in Rule 3200T.

The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence.

The Audit Committee met with senior management periodically during 2011 to consider the adequacy of our internal controls and discussed these matters with our independent registered public accounting firm and with appropriate financial personnel. The Audit Committee also discussed with senior management our disclosure controls and procedures and the certifications by our CEO and our Chief Financial Officer, or CFO, which are required for certain of our filings with the SEC. The Audit Committee met privately with the independent registered public accounting firm, our internal auditors and other members of management, each of whom has unrestricted access to the Audit Committee.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the board that our audited consolidated financial statements be included in our annual report on Form 10-K for the year ended December 31, 2011 for filing with the SEC.

The Audit Committee

Larry C. Glasscock, Chair

Robert R. Bennett

James H. Hance, Jr.

Frank Ianna

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Executive Compensation

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This compensation discussion and analysis describes and analyzes our compensation program for our named executive officers, who are: Daniel R. Hesse, President and CEO; Joseph J. Euteneuer, CFO; Keith O. Cowan, President, Strategic Planning and Corporate Initiatives; Steven L. Elfman, President, Network Operations and Wholesale; Robert L. Johnson, Chief Service and Information Technology Officer; and Robert H. Brust, our former CFO, who retired in April 2011.

Compensation Overview

  Philosophy and Objectives of Our Executive Compensation Program

Attract and retain qualified and experienced executives by providing base salaries, target incentives, and benefits that are market competitive, and require that a large portion of direct compensation is earned over a multi-year period with forfeiture to the extent that vesting requirements are not met.

Pay for performance by tying a substantial portion of our executives’ compensation opportunities directly to our performance through short- and long-term incentive compensation plans that include performance objectives most critical to driving our continued financial and operational improvement and long-term shareholder value.

Align compensation with shareholder interests by structuring our compensation programs to align executive interests with those of our shareholders, mitigate the possibility that our executives undertake excessively risky business strategies, and adhere to corporate governance best practices.

  Components of Our Executive Compensation Program

The major components of our executive compensation program include base salary, our short-term incentive compensation (STIC) plan, and our long-term incentive compensation (LTIC) plan. The base salary and target opportunities under the STIC and LTIC plans for our named executive officers in 2011 are listed below.

Named Executive Officer		Base Salary		STIC plan		LTIC plan
Mr. Hesse		$1,200,000		$2,400,000		$12,000,000
Mr. Euteneuer		$775,000		$1,007,500		$3,500,000
Mr. Cowan		$725,000		$906,250		$2,500,000
Mr. Elfman		$650,000		$812,500		$3,250,000
Mr. Johnson		$510,000		$510,000		$1,400,000

  Delivering on the Sprint Turnaround

We have faced significant headwinds in recent years. Although we are far from finished from delivering Sprint’s turnaround, our progress has been significant. We plan to accomplish this turnaround in three phases: (1) Phase One, the recovery and strengthening of our business; (2) Phase Two, the investment phase; and (3) Phase Three, margin expansion. As Phase One concludes, our Company is recovering and our brand is strengthening. This improvement is illustrated by the measures that existed at the first earnings call after Mr. Hesse became our CEO for the fourth quarter 2007, and our fourth quarter earnings call for 2011, four years later.

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Executive Compensation

Delivering the Sprint Turnaround

		4Q 2007 Earnings Call		4Q 2011 Earnings Call
Net Subscriber Additions1		(2.2) million YoY Decline		3.3 million YoY Growth
Service Revenue2		(1)% YoY Decline		3% YoY Growth
Customer Satisfaction3		Worst		Best
Brand Health		Declining		Improving

  (1) Change in Total Year Net Subscriber Additions, (2) Change in Annual Total Service Revenue, (3) ACSI Customer Satisfaction Score among Top 4 National   Wireless Carriers. YoY means year-over-year.

Phase One

In Phase One, our executive compensation program provided strong incentives for executives to achieve the improvements illustrated above and focused on three priorities: improving the customer experience, strengthening the brand, and generating cash.

2011 STIC Plan

Our STIC plan is our annual cash bonus plan, which creates a strong incentive to achieve or exceed critical operating and financial objectives that are the leading drivers of sustainable increases in shareholder value. The table below summarizes our key priorities in 2011, the metrics selected in support of these priorities, and the rationale for why each was chosen by the Compensation Committee:

Priority		Objective		Rationale
Customer Experience		Postpaid subscriber churn, which is a measure of our ability to retain our customers who pay for their wireless service on a contract basis, typically for one- or two- year periods.		Measures the degree to which we retain our most profitable customers.
Strengthening our Brand		Postpaid Net Additions, which is a measure of the new wireless customers we gain, net of deactivations, for those customers who pay for their services on a contract basis. Prepaid Net Additions, which is the same measure as postpaid net additions but refers to those customers who do not pay for their service on a contract basis.		Measures the degree to which we have attracted new customers to our brands.
Generating Cash		Net service revenue, or NSR, which is our operating revenue less equipment revenue. Adjusted OIBDA, which means adjusted Operating Income Before Depreciation and Amortization less severance, exit costs and other special items.		Measures the degree to which we have stabilized annual revenue, which is the key to driving long-term growth in profitability. Measures our ability to generate cash and profit, which are critical to our ability to invest in our business and service our debt.

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Executive Compensation

On October 4, 2011, we announced that we would be offering the iPhone^® to our customers. We believe the iPhone^® will generate long-term benefits, including growth in valuable postpaid subscribers, a reduction in variable cost of service per unit, and long-term accretion to cash flows from operations. However, because the iPhone^® carries a higher equipment net subsidy, it resulted in a reduction in adjusted OIBDA and cash flows from operations in our fourth quarter.

The Compensation Committee endeavors to set targets at aggressive but attainable levels in light of then-current and prospective business conditions. Subject to the limitation of the payout achieved under the Internal Revenue Code Section 162(m), or Section 162(m), objective discussed on page 31, the Compensation Committee retains the discretion to increase or reduce the size of any award or payout under the STIC plan to ensure that extraordinary circumstances do not inequitably increase or decrease compensation.

Our budget and STIC plan targets were set without consideration of any iPhone^® impact. Due to the timing of the iPhone^® negotiations and confidentiality obligations to Apple, Inc., the Compensation Committee believed that our launch of the iPhone^® was an extraordinary circumstance, and, therefore, decided to exclude from our results for STIC plan purposes the total financial impact related to the iPhone^®. The adjusted results are detailed in the table below.

In particular, while the exclusion of the positive effect on net service revenue, postpaid churn and, postpaid net additions resulted in a slightly lower performance against that target, the exclusion of adjusted OIBDA results increased the payout under the STIC plan overall.The Compensation Committee believed that reducing bonus payouts to reflect costs related to this strategic decision would have unfairly punished employees, including our named executive officers, and potentially impaired the perception of fairness in our compensation system.

For the 2011 STIC plan, the Compensation Committee approved the aggregate payout percentage, as compared to targeted opportunity, for our employees, including our named executive officers, at approximately 73.7%. Had the adjustment to reflect the iPhone^® impact not been made, the payments would have been approximately 63.7%. The incremental payout to our named executive officers with respect to this adjustment was approximately $563,000 in the aggregate.

Our STIC plan objectives, targets, adjustments to account for the iPhone^®, and actual results with the iPhone^® for 2011 are summarized in the table below:

Objective		Weight		Target				Adjusted without iPhone® Impact				Actual with iPhone® Impact				Difference between Adjusted and Actual
Postpaid Churn		20%			1.74%				1.89%				1.86%			.03%
Postpaid Net Adds		20%			788,000				(397,000	)			(98,000)			(299,000)
Prepaid Net Adds		20%			2,237,000				2,512,000				2,512,000			–
Net Service Revenue		20%			$30,526 mm				$30,741	mm			$30,768	mm		($27) mm
Adjusted OIBDA		20%			$5,635 mm				$5,707	mm			$5,072	mm		$635 mm

Despite the improvements during the past four years and described above, we underperformed in 2011 on the challenging targets the Compensation Committee set for adjusted OIBDA, postpaid churn, and postpaid net subscriber additions. For most of 2011, we competed in a challenging environment in which two of our largest competitors offered the iPhone^®, a highly desirable device that created an advantage in their ability to acquire and retain customers. Notwithstanding this disadvantage, we grew revenues and achieved near-target results for the net service revenue objective.

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Executive Compensation

2011 LTIC Plan

Our LTIC plan is designed to encourage retention, linking payment of performance-based awards to achievement of financial objectives critical to our long-term success, and granting equity awards to directly link executive interests with those of our shareholders.

In 2011, we granted three types of awards under our LTIC plan:

—

Performance units – Each unit has a value of $1.00, and named executive officers earn a cash payout that vests on December 31, 2013 and will be paid in the 1st Quarter of 2014. The performance unit award is allocated one-third to each of three annual performance periods (2011, 2012, and 2013) with cash payouts ranging from 0% to 150% based on achievement against objectives during the three performance periods.

—

Performance-based RSUs – RSUs vest on the third anniversary of the grant date. The award is allocated one-third to each of three annual performance periods (2011, 2012, and 2013) with vesting of each third conditioned on achievement against objectives.

—

Stock options – Non-qualified stock options vest ratably on each of the three anniversaries of the grant date with an exercise price equal to the Board nominees whose election atfair market value (closing price on the next Annual MeetingNYSE) of Stockholders willour stock on the grant date. To determine the number of stock options to be recommended bydelivered under the Board; (c) recommends2011 LTIC plan, we used a Black-Scholes valuation model discussed below in footnote 3 to the Board nominees for each Board committee; (d) develops, reviews, and recommends to the Board for approval corporate governance guidelines for Sprint; (e) establishes director compensation policies; and (f) oversees the Board evaluation process. The committee will consider qualified Director nominees recommended by Stockholders. Such recommendations should be sent to the Nominating and Corporate Governance Committee, c/o Corporate Secretary, 6200 Sprint Parkway, Mailstop KSOPHF0302-3B679, Overland Park, Kansas, 66251.2011 Summary Compensation Table.

With respect to the performance units and performance-based RSUs, the Compensation Committee selected objectives to support our turnaround efforts as described below.

 

Priority		Objective		Rationale
Generating Cash		The Chairman of the Nominating and Corporate Governance Committee is Ms. Lorimer. The other members are Mr. Hockaday and Mr. Turley. The Nominating and Corporate Governance Committee met three times after it was formed in August 2002. Before August 2002, the Compensation Committee performed many of the functions of the Nominating and Corporate Governance Committee.Net service revenue   Free cash flow, which is the cash provided by our operating activities less the cash used in our investing activities other than short-term investments and equity method investments during the applicable period.		Measures the degree to which we have grown annual revenue, which is the key to driving long-term growth in profitability. Measures our ability to generate cash, which is critical to our ability to invest in our business and service our debt.

For the same reasons and subject to the limitation of the payout percentage achieved under Section 162(m) objectives discussed on page 31, the Compensation Committee excluded the positive impact on revenue and the negative impact on free cash flow attributable to the iPhone^® for purposes of measuring LTIC performance. In addition, our board-approved budgets and corresponding performance targets were established before we reached the final terms of our “spectrum-hosting” arrangement with LightSquared, Inc., which included an advance cash payment that benefited free cash flow. Therefore, the Compensation Committee also adjusted the free cash flow results to exclude the positive impact of this transaction on payouts.

For the 2011 annual performance period under the 2011 LTIC plan, the Compensation Committee approved the aggregate payout percentage for the performance units, as compared to targeted opportunity, for our named executive officers at approximately 106.5%. Had the adjustments described above not been made, the payments would have been approximately 91.5%. The Compensation Committee also approved the payout percentage for the performance-based RSUs, which was not adjusted and remained at 100%. The incremental payout to our named executive officers with respect to this adjustment was approximately $1,058,600 in the aggregate.

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Executive Compensation

Our LTIC plan objectives, targets, adjustments to account for the iPhone^® and LightSquared, and actual results with the iPhone^® and LightSquared for 2011 are summarized in the table below:

				Free Cash Flow Performance Target (in millions)										Net Service Revenue Performance Target (in millions)
				Target ($)		Adjusted without Impacts ($)(1)		Actual with Impacts ($)		Difference between Adjusted and Actual				Target ($)		Adjusted without Impacts ($)(1)		Actual with Impacts ($)		Difference between Adjusted and Actual
Performance Units				700		722		429		293				30,526		30,741		30,768		27
Performance- based RSUs				0		N/A		429		N/A				29,026		N/A		30,768		N/A

(1)

Adjusted to exclude the impacts of the iPhone® and LightSquared.

Because the payout for the performance-based RSUs is capped at 100% and there is no graduated scale for partial payout for performance below target, the Compensation Committee set the free cash flow and net service revenue targets at a lower but still meaningful level than for the performance units.

As expressed in the table below, the current value of compensation for Mr. Hesse is well below the market-competitive target opportunity. This is primarily reflective our stock price. The current value of compensation for other named executive officers is similarly below the target opportunity, which reflects our philosophy of ensuring that pay is closely correlated with changes in shareholder value over time.

“Current Value”Compensation means base salary, actual bonus earned and fair market value of outstanding performance-based RSU awards and theintrinsic value of outstanding options (plus any amount realized upon exercise of options) as of December 31, 2011. Mr. Hesse, however,has not exercised any options during his tenure.

Compensation “Target” means base salary, target bonus and grant date fair value of all equity awards granted in the applicable year(s).

Year 2007 includes Mr. Hesse’s base salary, sign-on awards of RSUs and stock options as well as a cash bonus. Mr. Hesse started on December 17, 2007.

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Executive Compensation

Our mix of fixed and performance-based compensation target opportunities under the STIC and LTIC plans for 2011 for Mr. Hesse can be illustrated by the following:

CEO Compensation Ratio

Phase Two

As discussed on page 18, we are in the process of a three-stage turnaround. To enhance the focus on Phase Two, investment for future growth, the Compensation Committee made several changes in the design of our STIC and LTIC plans for 2012:

•

Performance measurement - during Phase One we measured performance on a semi-annual basis in our STIC plan and an annual basis in our LTIC plan to ensure that goals were set commensurate with our rapidly evolving results. The charterstabilization of our business enables a return to a more traditional and best practice performance measurement system, and for 2012 we will measure performance in the NominatingSTIC plan over a one-year period and Corporate Governance Committeein the LTIC plan over a three-year period.

•

Performance metrics - to increase our emphasis on profitability,Adjusted OIBDA will have a 40% weighting in our 2012 STIC plan (twice the amount allocated 2011). The other objectives in the 2012 STIC plan arepostpaid churn with a 30% weighting (to maintain our focus on the customer experience) andtotal net additions with a 30% weighting (to maintain our focus on improving the brand).

•

To increase our focus on successful investment, our 2012 LTIC plan will have a new objective (with a 33.3% weighting for performance units and performance-based RSUs) that focuses on the implementation ofCorporate Governance GuidelinesNetwork Vision adopted(measured by Sprint, are availablea number of completed cell sites). Network Vision is a multi-year network infrastructure initiative intended to provide subscribers with an enhanced network experience by improving voice quality, coverage, and data speeds, while enhancing network flexibility, reducing operating costs, and improving environmental sustainability through the utilization of multiple spectrum bands onto a single multi-mode base station.

•

The other two objectives in our 2012 LTIC plan remain net service revenue (with a 33.3% weighting) and free cash flow (with a 33.4%). The weighting change relative to 2011 (which was each atwww.sprint.com/governance. They may also be obtained by writing 50%) reflects the shift in our focus from stabilizing top line revenue to Sprint Shareholder Relations, 6200 Sprint Parkway, Mailstop KSOPHF0302-3B206, Overland Park, Kansas 66251.investing in the future in order to drive both growth and increased profitability.

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Executive Compensation

Audit Committee reportCorporate Governance Highlights   We endeavor to maintain good governance standards, including with respect to our executive compensation practices. Several highlights are listed below: —    We have stock ownership guidelines and a clawback policy. —    Our named executive officers receive few perquisites, entitlements or elements of non-performance-based compensation, except for market-competitive salaries and modest benefits that are comparable to those provided to all employees. —    Our severance benefits are moderate: with no benefit in excess of two times base salary plus bonus, change-in-control benefits payable only upon a “double-trigger” qualified termination, and no golden parachute or excise tax gross-ups. —The AuditCompensation Committee retains an independent advisor that performs no other work for the Company.

Setting Executive Compensation

Role of Compensation Consultant and Executive Officers

The Compensation Committee has retained Frederic W. Cook & Co., Inc., or Cook, as its independent compensation consultant. Cook provides no services to us other than advisory services for executive and director compensation and has no other relationships with the Company. Cook works with management only at the request and under the direction of the Compensation Committee and only on matters for which the Compensation Committee has oversight responsibility.

To ensure independence, the Compensation Committee has a policy regarding executive compensation consultants that codifies this relationship. Representatives of Cook attend Compensation Committee meetings at the Compensation Committee’s request and provide guidance to the Compensation Committee on a variety of compensation issues. The primary point of contact at Cook frequently communicates with the chair of the Compensation Committee and interacts with all the Compensation Committee members without management present.

Cook has reviewed the compensation components and levels for our named executive officers and advised the Compensation Committee on the appropriateness of our compensation programs, including our incentive and equity-based compensation plans, retention incentives and proposed employment agreements, as these matters arose during the year. The Compensation Committee has directed that Cook provide this advice taking into account our overall executive compensation philosophy as described above. Cook prepares benchmarking data discussed below, reviews the results with the Compensation Committee, and provides recommendations and an opinion on the reasonableness of new compensation plans, programs and arrangements.

In addition to its ongoing support of the Compensation Committee and continuous advice on compensation design, levels and emerging market practices, Cook periodically conducts a comprehensive review of our overall executive compensation program – including direct and indirect elements of compensation – to ensure that the program operates in support of our short- and long-term financial and strategic objectives and that it aligns with evolving corporate governance “best practices.” Cook last completed such a comprehensive study in 2010 and found that, overall, the program supported our specific business and human resource objectives, including unique issues related to our rapidly evolving turn-around initiatives.

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Executive Compensation

Our CEO periodically discusses the design of and makes recommendations with respect to our compensation programs and the compensation levels of our other named executive officers and certain key personnel with the Compensation Committee.

Process for Setting Executive Compensation

The Compensation Committee annually reviews the compensation packages of our named executive officers and other key personnel in the form of “tally sheets.” These tally sheets value each component of compensation and benefits, including a summary of the outstanding equity holdings of each named executive officer as of year-end and the value of such holdings at various assumed stock prices. The tally sheets also set forth the estimated value that each of our named executive officers would realize upon termination under various scenarios.

The Compensation Committee uses these tally sheets when considering adjustments to base salaries and awards of equity-based or other remuneration and in establishing incentive plan target opportunity levels as follows:

comparing each named executive officer’s total compensation against a similar position in our peer group;

understanding the impact of decisions on each individual element of compensation on total compensation for each named executive officer;

evaluating total compensation of each named executive officer from an internal equity perspective; and

assuring that equity compensation represents a portion of each named executive officer’s total compensation that is in line with our philosophy of motivating the executives to align their interests with our shareholders.

Although the Compensation Committee reviews and considers the amounts realizable by our named executive officers under different termination scenarios, including those in connection with a change in control, as well as the current equity-based award holdings, these are not the primary considerations in the assessment and determination of annual compensation for our named executive officers.

Use of Benchmarking Data

To assist in setting total compensation levels that are reasonably competitive, the Compensation Committee reviews market trends in executive compensation and a competitive analysis prepared by Cook. This information is derived from the most recent proxy statement data of companies in a peer group of telecommunications and high-technology companies and, where limited in its functional position match to our executives, is supplemented with data on our peer group from a published compensation survey prepared by Towers Watson of approximately 80 participating all industry companies with revenues exceeding $4 billion.

Taking into consideration the recommendation of Cook, the Compensation Committee determines companies for our peer group based on similarity of their business model and product offerings as well as comparability from a size perspective, including annual revenue, market capitalization, net income, enterprise value and number of employees. For example, our revenue is above the median of our peer group while our enterprise value is below the median. The Compensation Committee approved the use of the following 14 companies for its 2011 executive compensation benchmarking analyses:

AT&T, Inc., Comcast Corporation, Computer Sciences Corporation, Dell Inc., DIRECTV, Hewlett-Packard Company, Motorola Solutions, Inc., Qwest Corporation, Qualcomm

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Executive Compensation

Incorporated, CenturyLink, Inc., Texas Instruments Incorporated, Time Warner Cable Inc., Verizon Communications Inc., Xerox Corporation

For 2011, we removed Sun Microsystems from our peer group because it was acquired.

For 2011, Cook provided the Compensation Committee with an analysis of the compensation of the named executive officers of each of the peer group companies as well as a summary of data at the 25^th percentile, median, and 75^th percentile for each element of compensation.

The Compensation Committee does not follow a specific formula in making its pay decisions, but rather uses benchmarks as a frame of reference and generally targets total compensation at the median of our peer group to reflect our relative position within it, with an opportunity to earn total payouts in the 75^th percentile for overachievement relative to the peer group. The Compensation Committee exercises its judgment by taking into consideration a multitude of other important factors such as experience, individual performance, and internal pay equity. Furthermore, our executives’ realized pay is ultimately dependent on company performance. With respect to our named executive officers’ total targeted compensation for 2011, Messrs. Elfman, Euteneuer and Johnson were above median and the remaining named executive officers were below the median.

Primary Components of Executive Compensation

What follows is a discussion and analysis of the primary elements of our 2011 named executive officer compensation program.

Base Salary

Base salary is designed to attract and retain executives. Our named executive officers’ salaries are based on a number of factors, including the nature, responsibilities and reporting relationships of the position, individual performance of the executive, salary levels for incumbents in comparable positions at peer companies, as well as other executives within our organization, and experience and tenure of the executive. To minimize fixed costs during our turnaround and emphasize variable, performance-based compensation, the Compensation Committee has not made increases to base salary levels for our named executive officers, except in the case of Mr. Johnson due to many of the above-noted factors as well as the mid-year addition of significant responsibilities to his role. See “– 2011 Summary Compensation Table.”

Short-Term Incentive Compensation Plan

Our STIC plan is our annual cash bonus plan, which we believe will ultimately result in an increase in shareholder value because our incentives under it are linked to business objectives that we believe will deliver our long-term success.

For the 2011 STIC plan, the Compensation Committee continued using two six-month performance periods for determining the amount of plan payments because it wanted to maintain flexibility to revisit the performance criteria at mid-year, if necessary. This flexibility enables the setting of goals that are sufficiently challenging to justify and support the costs associated with payout at various levels of performance. Such flexibility also protects against the possibility of a compensation windfall or deficit during a period in which the economic and telecommunications environment was still highly volatile. The first performance period was from January 1, 2011 through June 30, 2011, and the second was from July 1, 2011 through December 31, 2011. Each performance period had discrete performance objectives, and named executive officers must have been employed through December 31, 2011 in order to be eligible to receive full or prorated compensation for either period unless their termination during the year was the result of death, disability, retirement, or involuntary termination without cause.

In February 2011, the Compensation Committee established financial and operational objectives and their respective weightings and targets for the first half-year performance period, as well as reviewing

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Executive Compensation

proposed second half-year performance objectives. In early August, 2011, it approved the objectives, weightings and targets as previously discussed in February for the second half-year performance period. While our 2010 STIC plan emphasized a drive toward revenue generation, the Compensation Committee determined that our 2011 STIC plan should balance our senior management team’s and other plan participants’ focus among our most critical financial and strategic objectives, which remained as growing revenue and earnings while increasing subscriber growth and reducing churn. To that end, the Compensation Committee established the following objectives for our 2011 STIC plan for each six-month performance period, each equally weighted at 20%:

net service revenue;

adjusted OIBDA;

postpaid churn;

postpaid net additions; and

prepaid net additions.

To further our goal of tying a significant portion of each named executive officer’s total annual compensation to our business performance, the STIC plan provides for a payment equal to the named executive officer’s targeted opportunity (set at a percentage of his base salary) only if our actual results meet the targets. Similarly, a payment in excess of a named executive officer’s targeted opportunity may be made if our actual performance exceeds the targeted objectives (capped at 200%), a payment below opportunity may be made if our actual performance is below the target objectives but exceeded the minimum threshold level, and no payout would be made if our actual performance does not exceed the minimum threshold level.

Long-Term Incentive Compensation Plan

Our LTIC plan serves our compensation objectives by linking payment to achievement of financial objectives, and by linking executive interests with those of our shareholders.

Following evaluation of our recent LTIC plans and assessment of the near-term factors critical to driving long-term shareholder value, in February 2011, following the board’s approval of the 2011 budget, the Compensation Committee established the terms of the 2011 LTIC plan. This plan continued granting an executive’s targeted 2011 LTIC opportunity in the form of performance-based opportunities: 50% in performance units (approximately 49% for Mr. Hesse), 30% in performance-based RSUs (approximately 36% for Mr. Hesse) and 20% in non-qualified stock options (approximately 15% for Mr. Hesse). In determining the weightings among the LTIC components, the Compensation Committee balanced the desire to incentivize achievement of critical financial objectives, stock price appreciation considerations, and affordability of the LTIC plan from both a share usage and aggregate cost perspective. In particular, placing less weight on the stock option component of the 2011 LTIC plan was intended to mitigate a potential windfall associated with possible significant increases in our stock price that were not tied to our performance but to rising equity markets generally.

—

Performance units – Each unit has a value of $1.00, and executives earn a cash payout that vests on December 31, 2013 and would be paid in the 1st Quarter of 2014. The performance unit award is allocated one-third to three annual performance periods (2011, 2012, and 2013) with cash payouts ranging from 0 to 150% based on achievement against objectives during the three performance periods.

—

Performance-based RSUs – RSUs vest on the third anniversary of the Board,grant date. The award is allocated one-third to three annual performance periods (2011, 2012, and 2013) with vesting of each third conditioned on achievement against objectives.

—

Stock options –Nonqualified stock options vest ratably on each of the three anniversaries of the grant date, with an exercise price equal to the fair market value (closing price on the NYSE) of our stock on the grant date. To determine the number of stock options to be delivered under the

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Executive Compensation

2011 LTIC plan, we used a Black-Scholes valuation model discussed below in footnote 3 to the 2011 Summary Compensation Table.

For Mr. Hesse, the mix of LTIC plan awards was more heavily weighted by the Compensation Committee towards the components in which vesting is dependent on achievement of specific financial objectives. In particular, the number of shares underlying Mr. Hesse’s awards that are subject to performance-based vesting exceeds the number of shares underlying the awards that are subject to time-based vesting. This approach is intended to ensure that long-term compensation earned by our CEO, who is the executive most accountable to shareholders, is most sensitive to performance against long-term goals.

We believe the establishment of three separate performance periods enhanced our ability to maintain ongoing focus on achievement of the most critical milestones for the next three years that are integral to our continued turnaround and allowed our Compensation Committee to set appropriately aggressive, yet attainable, targets, as well as mitigate risk of a windfall if we were to experience unforeseen overachievement over a three-year period. To ensure that our executives remain focused on sustaining long-term performance, however, the payment of these performance-based awards will not occur until after the end of all three performance periods.

The 2011 LTIC plan continued our prior years’ focus on generating cash through establishing free cash flow and net service revenue as the equally-weighted performance objectives for the first annual performance period.

Other Compensation Decisions for 2011

2011 Compensation Opportunities

As part of its annual evaluation of the balance of the primary elements of our executive compensation, in particular in relation to our peer group so as to promote retention and motivation of our executive talent, the Compensation Committee also decided to adjust certain executives’ compensation for 2011. Accordingly, Mr. Hesse’s STIC plan opportunity for 2011 increased to 200% of his base pay and his target LTIC plan opportunity for 2011 increased to $12 million. For 2011, Mr. Elfman’s target LTIC plan opportunity increased to $3.25 million and Mr. Johnson’s target LTIC plan opportunity increased to $1.4 million. Additionally, Mr. Johnson’s annual base salary was increased to $483,000, and then it was increased to $510,000 effective August 1, 2011 to reflect his significant additional responsibilities.

2011 Performance Period for the 2009 and 2010 LTIC Plans

In early 2011, the Compensation Committee approved the results for the 2010 performance period of the 2009 and 2010 LTIC plans. In addition, the Compensation Committee set goals for the 2011 performance period of the Company’s 2009 and 2010 LTIC plans with respect to free cash flow and net service revenue. Please refer to footnotes 2 and 4 of the “2011 Summary Compensation Table” and footnotes 2, 4 and 6 of the “2011 Grants of Plan-Based Awards” for a discussion of these awards.

New CFO Compensation

After finalizing a search for the replacement of Mr. Brust after his departure as CFO in April, 2011, the Compensation Committee approved an employment agreement for Mr. Euteneuer, effective on April 4, 2011, incorporating the terms of his compensation package. The primary components of which are: (1) annual base salary of $775,000; (2) STIC plan target opportunity of 130% of base salary, which for 2011 was $1,007,500, prorated for his hire date; (3) $3,500,000 in LTIC plan target opportunity; (4) $500,000 sign-on bonus payable 50% after his hire date and 50% after six months of employment; and (5) a sign-on award of 125,000 time-based restricted shares of our common stock, which vests on the third anniversary of his hire date. As part of our recruiting efforts, we agreed to reimburse Mr. Euteneuer’s legal fees in connection with the negotiation of his employment agreement.

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Other Components of Executive Compensation

Our named executive officers’ total rewards opportunities consist of a number of other elements important to our compensation philosophy for 2011 of attracting, retaining, and motivating our named executive officers:

•

Employee Benefit Plans and Programs.Our compensation program includes a comprehensive array of health and welfare benefits in which our eligible employees, including our named executive officers, are eligible to participate. We pay all of the costs for some of these benefit plans and participants contribute a portion of the cost for other benefit plans.

•

Retirement Programs.Our retirement program consists of the Sprint Nextel 401(k) Plan, which provides participants, with our help of a profit sharing matching contribution opportunity and, beginning in 2011, a fixed matching contribution on up to 2% of eligible compensation, an opportunity to build financial security for their future. The amount of any matching contributions made by us to participating named executive officers is included in the “All Other Compensation” column of the 2011 Summary Compensation Table.

•

Deferred Compensation.Certain employees, including our named executive officers, are offered the opportunity to participate in the Sprint Nextel Deferred Compensation Plan, a nonqualified and unfunded plan, under which they may defer to future years the receipt of certain compensation in addition to that eligible under the 401(k) plan. Participants may elect to defer up to 50% of base salary and 75% of STIC plan payments. We believe this plan helps attract and retain executives by providing the participant another tax efficient retirement plan. Participants elect to allocate deferred and any matching contributions among one or more hypothetical investment options, which include one option that tracks our common stock and other options that track broad-based bond and equity indices. Our plan provides for a matching contribution using the same matching contribution percentage as our 401(k) plan of eligible earnings above the applicable annual limit, which is composedintended to compensate highly-compensated employees for limitations placed on our 401(k) plan by federal tax law. For 2011, Mr. Hesse was the only named executive officer who participated in the Sprint Nextel Deferred Compensation Plan.

•

Personal Benefits and Perquisites.The limited personal benefits and perquisites that we provide to our named executive officers are summarized in footnote 5 to the 2011 Summary Compensation Table below. As a result of the recommendations contained in an independent, Directorsthird-party security study, the Compensation Committee established an overall security program for Mr. Hesse. Under the security program, we currently provide Mr. Hesse with residential security systems and equipment, and he is required to use our aircraft for business and non-business travel. We believe these measures ensure the safety of Mr. Hesse and enable him to devote his full attention to company business. Mr. Hesse is permitted to have his family accompany him on the corporate aircraft for business and non-business travel. As noted above, Mr. Euteneuer received reimbursement of his legal fees relating to the negotiation of his employment agreement; additionally, in 2011, he had non-business use of our corporate aircraft. Our Officer Relocation Program provides certain benefits, which include some tax gross-up benefits, for relocation at our request. As described in footnote 5 to the 2011 Summary Compensation Table, Mr. Johnson received benefits under this program in 2011. Pursuant to the terms of his employment agreement, Mr. Euteneuer has up to 12 additional months from his hire date to complete his relocation in exchange for the principal responsibilitiesforfeiture of certain other benefits provided under the program.

•

Executive Severance Policy.Providing severance to our named executive officers helps attract and retain high quality talent by (1) mitigating the risks associated with leaving their former employer or position and assuming the challenges of a new position with us, and (2) providing income continuity following an unexpected termination of employment. Under our executive severance policy, our board will seek shareholder approval for any future severance agreement or arrangement with an executive officer, including our named executive officers, that provides (a) severance pay in excess of two times the senior executive’s base salary plus bonus and

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(b) continuation of group health, life insurance, and other benefits in excess of 24 months following the executive’s termination. The policy permits, without shareholder approval: (x) accelerated vesting of RSUs, stock options and any other LTIC plan awards, and (y) continued vesting during the severance period of any such awards. The policy also requires that we seek shareholder approval of any future severance agreement or arrangement that provides for the reimbursement of excise taxes imposed under Internal Revenue Code Section 4999 to a senior level executive. The severance benefits to which our named executive officers are entitled, as provided in the their employment agreements and described in “—Potential Payments upon Termination of Employment or Change of Control,” allow us to attract and retain a management team and secure our competitive advantage in the event of their departure through corresponding restrictive covenants.

•

Change in Control.If a transaction that could result in a change in control were under consideration, we expect that our named executive officers would face uncertainties about how the transaction may affect their continued employment with us. We believe it is in our shareholders’ best interest if our named executive officers remain employed and focused on our business through any transition period following a change in control and remain independent and objective when considering possible transactions that may be in shareholders’ best interests but possibly result in the termination of their employment. Our change in control benefits accomplish this goal by providing each eligible named executive officer with a meaningful severance benefit in the event that a change in control occurs and, within a specified time period of the change in control, his employment is involuntarily terminated without “cause” or voluntarily terminated for “good reason.”

The Sprint Nextel Change in Control Severance Plan, which we refer to as the CIC plan, provides severance benefits to a select group of senior executives, including our named executive officers, in the event of a qualified termination of employment in connection with a transaction that results in a change in control. Mr. Brust did not participate in the CIC plan, but his employment agreement provided for certain benefits in the event of a termination in connection with such a transaction. Any of these benefits payable would be reduced to the extent of any severance benefit otherwise available under any other applicable policy, program, or plan so that there would be no duplication of benefits. The benefits upon termination in connection with a change in control to which our named executive officers are entitled, as described in “—Potential Payments upon Termination of Employment or Change of Control,” are likewise competitive within our peer group.

Tax Deductibility of Compensation

Section 162(m) limits to $1 million the amount of non-performance-based remuneration that we may deduct from our taxable income in any tax year with respect to our CEO and the three other most highly compensated executive officers, other than the CFO, at the end of the year. Section 162(m) provides, however, that we may deduct from our taxable income without regard to the $1 million limit the full value of all “qualified performance-based compensation.”

Our base salary and perquisites and other personal benefits are not considered “qualified performance-based compensation” and therefore are subject to the limit on deductibility. Our STIC plan and LTIC plan awards may be considered “qualified performance-based compensation” if certain requirements are met, including among others that the maximum number of stock option or full value share awards and the maximum amount of other cash performance-based remuneration that may be payable to any one executive officer has been disclosed to and approved by shareholders prior to the award or payment.

The Compensation Committee considers Section 162(m) deductibility in designing our compensation program and incentive-based compensation plans. In general, we design our STIC and LTIC plans to be compliant with the performance-based compensation rules of Section 162(m) in order to maximize deductibility. In certain circumstances, however, the Compensation Committee has determined

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it necessary in order to retain executives and attract candidates for senior level positions to offer compensation packages in which the non-performance-based elements exceed the $1 million Section 162(m) limit.

The awards under our 2011 STIC and LTIC plans are considered performance-based compensation under Section 162(m), except for Mr. Hesse’s award under the STIC plan and his performance unit award under the LTIC plan allocated to the 2013 calendar year performance period due to the limits set under our incentive compensation plan, as well as Mr. Johnson’s award under the STIC plan and his performance based RSU award under the LTIC plan due to the terms of his employment agreement.

For the 2011 STIC plan, the Compensation Committee also established an annual Section 162(m) objective for the named executive officer’s potentially subject to Section 162(m), other than Mr. Hesse due to the limits set under our incentive plan, at a small fraction of a percentage of our adjusted operating income. The Compensation Committee is precluded from exercising upward discretion to the payout achieved under this objective. The Compensation Committee exercised its discretion to make payments under the STIC plan at levels below the payout achieved under the Section 162(m) objective for 2011 as guided by the performance metrics discussed on page 20.

For the 2011 LTIC plan, the Compensation Committee also established, for the 2011 performance period, Internal Revenue Code Section 162(m) objectives for the named executive officer’s potentially subject to Section 162(m). The Section 162(m) objective for performance units was a small fraction of a percentage of our adjusted operating income, and for performance-based restricted stock units was a required threshold level of adjusted operating income achievement. The Compensation Committee is precluded from exercising upward discretion to the payout achieved under these objectives. The achieved result under the Section 162(m) objectives met or exceeded the achieved result under the free cash flow and net service revenue objectives. The Compensation Committee exercised its discretion to approve payout percentages under the 2011 LTIC plan at or below the payout percentage achieved under the applicable Section 162(m) objective as guided by the performance metrics discussed on pages 21 and 22.

Clawback Policy

We have a “clawback” policy, which provides that, in addition to any other remedies available to us under applicable law, we may recover (in whole or in part) any bonus, incentive payment, commission, equity-based award, or other compensation received by certain executives, including our named executive officers, if our board or any committee of our board determines that such bonus, incentive payment, commission, equity-based award, or other compensation is or was based on any financial results or operating objectives that were impacted by the officer’s knowing or intentional fraudulent or illegal conduct, and recovery is appropriate.

Stock Ownership Guidelines

We have stock ownership guidelines for our named executive officers and other members of our senior management team. The board believes ownership by executives of a meaningful financial stake in our company serves to align executives’ interests with those of our shareholders. Our guidelines require that our CEO hold shares of our common stock with a value equal to five times his base salary, and that the other named executive officers hold shares of our common stock with a value equal to three times their respective base salaries. Eligible shares and share equivalents counted toward ownership consist of:

common or preferred stock, including those purchased through our Employee Stock Purchase Plan;

restricted stock or RSUs;

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intrinsic value (the excess of the current stock price over the option’s exercise price) of vested, in-the-money stock options; and

share units held in our 401(k) plan and various deferred compensation plans.

Persons subject to the stock ownership guidelines have five years beginning on the date on which the person becomes subject to the ownership guidelines, or until December 31, 2012 if later, to achieve the ownership requirement. As of December 31, 2011, all of our named executive officers, except Mr. Euteneuer, had met the stock ownership guidelines. Mr. Euteneuer has until April 4, 2016 to meet his ownership requirement.

2011 Shareholder Say-on-Pay Vote

The Company provides its shareholders with the opportunity to cast an annual advisory vote on named executive officer compensation (a “say-on-pay proposal”). At the Company’s annual meeting of shareholders held in May 2011, 85% of the votes cast on the say-on-pay proposal at that meeting were voted in favor of the proposal. The Compensation Committee considered the 2011 voting results at discussions among its members during its meetings, and the Compensation Committee believes this vote affirms shareholders’ support of the Company’s approach to executive compensation. As a result of this consideration, the Company did not change its approach to named executive officer compensation in 2011. The Compensation Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the named executive officers.

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Compensation Committee Report

The Compensation Committee has reviewed and discussed Sprint Nextel’s Compensation Discussion and Analysis with management. Based on these reviews and discussions, the Compensation Committee recommended to the board that Sprint Nextel’s Compensation Discussion and Analysis be included in this proxy statement and Annual Report on Form 10-K for the year ended December 31, 2011.

The Compensation Committee

Gordon M. Bethune, Chair

V. Janet Hill

William R. Nuti

Rodney O’Neal

Relationship of Compensation Practices to Risk Management

We have assessed whether there are any risks arising from our compensation policies and practices for our employees and factors that may affect the likelihood of excessive risk taking. Based on that review, we have concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

In coming to this conclusion, in late 2011 and early 2012, our human resources department reviewed the Company’s incentive plans, surveying sales, and nonsales related compensation programs, as well as executive and nonexecutive compensation programs. Pay philosophies, performance objectives and overall incentive plan designs were reviewed. Human resources discussed plan elements with representatives from the business functions responsible for incentive plan design and administration. Design features were assessed to determine whether there is likelihood that incentive plans could encourage excessive risk-taking resulting in a material adverse effect on the Company and to ensure that appropriate governance is in place to mitigate risk under unforeseen circumstances. The results of this assessment were reviewed by the Compensation Committee on February 22, 2012. In addition, the Compensation Committee’s independent consultant, Cook, considered risk in all aspects of the plans in which our executives participate and advised the Compensation Committee accordingly. Cook confirmed that there are no aspects of the programs described in the preceding Compensation Disclosure and Analysis, or for our employees in general, that create an incentive to take risks that are reasonably likely to have a material adverse effect on the Company.

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2011 Summary Compensation Table

The table below summarizes the compensation of our named executive officers that is attributable to the fiscal years ended December 31, 2011, 2010, and 2009. The named executive officers are our CEO and president, our CFO, our former CFO, and our three other most highly compensated executive officers ranked by their total compensation in the table below.

Each of our named executive officers has an employment agreement with us. For more information regarding our compensation philosophy and a discussion of the elements of our compensation program, see “—Compensation Discussion and Analysis.”

Name and Principal Position		Year				Salary   ($)				Bonus   ($)(1)				Stock Awards   ($)(2)				Option Awards   ($)(3)				Non-Equity Incentive Plan Compensation   ($)(4)				All Other Compensation   ($)(5)				Total   ($)
Daniel R. Hesse Chief Executive Officer and President			2011				1,200,000				829,322				3,222,768				1,692,000				4,844,272				94,289				11,882,651
			2010				1,200,000				—				1,664,012				1,801,958				4,387,636				15,002				9,068,608
			2009				1,200,000				—				708,333				9,060,764				1,322,634				42,365				12,334,096
Joseph J. Euteneuer Chief Financial Officer			2011				551,442				688,150				930,557				689,755				895,935				77,088				3,832,927
Keith O. Cowan President Strategic Planning and Corporate Initiatives			2011				725,000				229,076				735,678				458,536				1,339,781				7,837				3,495,908
			2010				725,000				—				447,253				450,490				1,550,971				1,536				3,175,250
			2009				725,000				1,000,000				208,333				2,664,932				587,567				9,800				5,195,632
Steven L. Elfman President Network Operations and Wholesale			2011				650,000				251,232				868,963				596,097				1,470,688				7,837				3,844,817
			2010				650,000				300,000				499,203				540,587				1,546,044				1,536				3,537,370
			2009				650,000				—				212,500				2,718,230				526,784				563,814				4,671,328
Robert L. Johnson Chief Service and Information Technology Officer			2011				486,308				123,842				372,019				256,780				718,990				47,578				2,005,517
			2010				460,000				—				212,993				253,999				789,514				33,421				1,749,927
			2009				460,000				115,000				90,667				1,159,778				298,241				9,800				2,133,486
Former Executive Officer:
Robert H. Brust Chief Financial Officer			2011				365,385				200,000				—				—				461,299				7,837				1,034,521
			2010				1,000,000				400,000				1,367,034				1,265,918				1,489,670				200,682				5,723,304
			2009				1,000,000				700,000				—				—				842,855				464,081				3,006,936

(1)

For 2011 consists of: (a) the incremental amounts with respect to the iPhone® adjustment described on page 12 of this proxy statement, has furnished20 for the following report: The Audit Committee has reviewed and discussed Sprint’s audited consolidated financial statementsSTIC plan, which in the aggregate totaled approximately $563,000 for the named executive officers; (b) the incremental amounts with management. The Audit Committee has also discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 (SAS 61—Communication with Audit Committees), as amended, relatingrespect to the auditors’ judgment aboutiPhone® and LightSquared adjustments described on pages 21 and 22 for the quality of Sprint’s accounting principles, judgments and estimates, as applied in its financial reporting. The Audit Committee has received the written disclosures and the letter from the independent public accountants required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) that relates to the accountants’ independence from Sprint and its subsidiaries, and has discussed with the independent public accountants their independence. The Audit Committee met with management periodically during fiscal 2002 to consider the adequacy of Sprint’s internal controls and discussed these matters with Sprint’s independent auditors and with appropriate Sprint financial personnel. The Audit Committee also discussed with senior management and the independent auditors Sprint’s disclosure controls and procedures and the certifications by Sprint’s Chief Executive Officer and Chief Financial Officer,LTIC plan, which are required by the Securities and Exchange Commission for certain of Sprint’s filings with the SEC. The Audit Committee met privately with the independent auditors, the internal auditors and other members of management, each of whom has unrestricted access to the Audit Committee. The Audit Committee also discussed with the independent auditors their work in providing tax and other services to certain Sprint executives, as has been widely reported in the press. The independent auditors informed the Audit Committee that the provision of such services has not impaired their independence. Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in Sprint’s Annual Report on Form 10-Kaggregate totaled approximately $1,058,600 for the year ended December 31, 2002,named executive officers; (c) a sign-on bonus for filing withMr. Euteneuer in the SEC.amount of $500,000; and (d) a retention bonus for Mr. Brust of $200,000. Charles E. Rice, Chairman Linda Koch Lorimer Louis W. Smith Compensation Committee report on executive compensation

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(2)

The value shown for 2011 is the sum of three awards: a performance unit award under the 2009 LTIC plan and performance-based RSU awards under the 2010 LTIC plan and the 2011 LTIC plan.

		2009 Performance Units ($)				2010 RSUs ($)				2011 RSUs ($)				Restricted Stock ($)				Total ($)				Max 2009 Performance Unit Payout ($)
Hesse			708,333				1,163,435				1,351,000				—				3,222,768				1,416,666
Euteneuer			—				—				353,057				577,500				930,557				—
Cowan			208,333				290,858				236,487				—				735,678				416,666
Elfman			212,500				349,030				307,433				—				868,963				425,000
Johnson			90,667				148,919				132,433				—				372,019				181,334

For the performance unit award, the value represents the target opportunity of performance units for the 2011 annual performance period as of the approval date of the Compensation Committee of the objectives and targets for the 2011 performance period under the 2009 LTIC plan. The performance unit award was allocated one-third to each annual performance period for three years (2009-2011). Each annual performance target was set by the Compensation Committee at the start of each respective single-year performance period, and the payout of the performance unit award may range from 0% to 200% based on the achievement of specified results. The award was payable in cash or unrestricted shares of our common stock at the discretion of the Compensation Committee. The Compensation Committee determined to pay the award in cash. For 2011, the performance unit award was based on the Company’s achievement of specified results with respect to free cash flow and net service revenue, equally weighted, and the achievement on the objectives was 91.5% (adjusted to 106.5%) of target.

For the performance-based RSU award, the value represents the aggregate grant date fair market value computed in accordance with FASB ASC Topic 718 as of the date the Compensation Committee approved the applicable objectives and targets for the 2011 performance period under the 2011 LTIC plan and the 2010 LTIC plan. The RSUs vest on the third anniversary of the grant, but are also subject to performance-based vesting conditions. The RSUs are allocated one-third to each annual performance period for three years, 2010-2012 for the 2010 LTIC plan and 2011-2013 for the 2011 LTIC plan. Each annual performance target is set by the Compensation Committee at the start of each respective single year performance period. Based on achievement of specified results with respect to free cash flow and net service revenue in 2011, for Messrs. Hesse, Cowan, Elfman, and Johnson the RSUs allocated to 2011 under the 2010 LTIC plan will vest on March 16, 2013 and for the 2011 LTIC plan on February 23, 2014 see “—Compensation Discussion and Analysis—Primary Components of Executive Compensation—Long-Term Incentive Compensation Plan.” For Mr. Euteneuer the RSUs awarded under the 2011 LTIC plan will vest on April 4, 2014. The number of performance-based RSUs granted was determined based on the 30-day average closing price of our stock, consistent with our practice in prior years as described more fully in the following footnote, whereas the grant date fair value reported for 2011 reflects the closing price on the grant date.

(3)

Represents the grant date fair value of options granted in 2011 computed in accordance with FASB ASC Topic 718. The grant date fair value reported in 2011 is lower than the respective portion of the target opportunities disclosed on page 18 because of the methodology used, consistent with our practice in prior years, to determine the number of stock options to be delivered under the LTIC plan. Under that methodology, which is commonly used to alleviate short-term fluctuations in the stock price used in the conversion from dollar-denominated awards to shares, we calculate an average closing price of our stock over a 30 calendar day period before the grant (for the 2011 LTIC plan, that period ended on February 4, 2011 and the average stock price was $4.44). The Black-Scholes value was $2.05 using this average price per share. The target dollar value to be delivered in stock options is then divided by the Black-Scholes value to determine the number of stock options granted to the participant. With respect to Mr. Euteneuer’s options the Black-Scholes value was $2.02 and the average closing price of our stock over a 30 calendar day period was $4.58. The strike price is the closing price of our common stock on the date the award was granted.

(4)

The value shown for 2011 is the sum of three amounts: the payout under the 2011 STIC plan, and a performance unit award under the 2011 LTIC plan and a performance unit award under the 2010 LTIC plan.

		2011 STIC Plan ($)				2010 Performance Units ($)				2011 Performance Units ($)				Total ($)
Hesse			1,528,800				1,525,000				1,790,472				4,844,272
Euteneuer			362,185				—				533,750				895,935
Cowan			577,281				381,250				381,250				1,339,781
Elfman			517,563				457,500				495,625				1,470,688
Johnson			310,290				195,200				213,500				718,990

With respect to the 2011 STIC plan, each named executive officer earned a payout of approximately 63.7% (adjusted to 73.7%) of their targeted opportunity based on actual performance in 2011 compared to two semi-annual company-wide performance periods under our 2011 STIC plan. For more information regarding our STIC plan, see “—Compensation Discussion and Analysis—Primary Components of Executive Compensation— Short-Term Incentive Compensation Plan.” Mr. Euteneuer’s 2011 STIC plan payout was prorated based on his start date.

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With respect to the performance units under the 2010 LTIC plan and 2011 LTIC plan, the amount shown includes, the amount earned with respect to performance units granted by the Compensation Committee on March 16, 2010 and February 23, 2011, respectively. The performance unit award is allocated one-third to each annual performance period for three years (2010-2012) or (2011-2013), as applicable, and is payable in cash after the end of such period. Each annual performance target is set by the Compensation Committee at the start of each respective single-year performance period, and the payout of the performance unit award may range from 0% to 150% based on the achievement of specified results. For 2011, the performance unit award payout was based on the Company’s achievement of specified results with respect to free cash flow and net service revenue, equally weighted, and the achievement on the objective was 91.5% of target (adjusted to 106.5%).

(5)

Consists of: (a) amounts contributed by us under our 401(k) and deferred compensation plans; (b) perquisites and other personal benefits; and (c) tax gross-ups for relocation benefits as follows:

		Year				Company Contributions to 401(k) and Deferred   Compensation Plans   ($)				Perquisites and Other Personal Benefits ($)(a)				Tax Gross Ups ($)(b)
Mr. Hesse		2011				76,629				17,660				—
Mr. Euteneuer		2011				—				77,088				—
Mr. Cowan		2011				7,837				—				—
Mr. Elfman		2011				7,837				—				—
Mr. Johnson		2011				7,837				23,589				16,152
Mr. Brust		2011				7,837				—				—

(a)

The perquisites and other personal benefits received by Mr. Hesse in 2011 consisted of: non-business use of our corporate aircraft by Mr. Hesse and his family, which had an incremental cost to us of $9,745; costs for security services for Mr. Hesse’s residence, which had an incremental cost to us of $7,915; and personal IT and tech support.

The incremental cost of use of our aircraft is calculated by dividing the total variable costs (such as fuel, aircraft maintenance, engine warranty expense, contract labor expense and other trip expenses) by the total flight hours for such year and multiplying such amount by the individual’s total number of flight hours for non-business use for the year.

The Compensation Committee established an overall security program for Mr. Hesse. Under the security program, we provided Mr. Hesse with residential security systems and equipment and he was required to use our aircraft for business travel as well as non-business travel. Mr. Hesse was permitted to have his family accompany him on the corporate aircraft for business and non-business travel.

The amount disclosed for Mr. Euteneuer includes $71,759 in legal fees relating to the negotiation of his employment contract and $5,329 of non-business use of our corporate aircraft.

Consistent with our objective to attract and retain a high-performing executive management team, we may recruit or relocate candidates from throughout the U.S. to fill executive level openings and will reimburse the executive for relocation costs. The amount disclosed for Mr. Johnson consists of relocation costs of $23,589.

(b)

To the extent such relocation benefits are taxable to the recipient, we may also provide a cash payment to the recipient to offset the tax payable on such reimbursement, in whole or in part, taking into account the tax payable by the recipient on such tax gross-up as well.

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2011 Grants of Plan-Based Awards

The table below summarizes awards under our short- and long-term incentive plans, and other option awards, to our named executive officers in 2011. These awards consisted of the following:

—

Awards granted pursuant to our 2011 STIC plan, which is our annual cash incentive compensation plan;

—

Stock options, performance units, performance-based RSUs granted pursuant to our 2011 LTIC plan, which is our long-term incentive compensation plan; and

—

Restricted stock granted to Mr. Euteneuer in connection with his employment agreement.

						Estimated Possible Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards								All Other Options Awards: # of Securities   Underlying   Options (#)		Exercise   of Base Price of Option Awards ($/Sh)		Grant   Date Fair   Value of Stock and Option Awards ($)
Name		Grant   Date		Award   Type		Threshold $		Target $		Maximum $		Threshold $		Target $		Maximum $		Target #
Hesse		2/23		STI(1)		600,000		2,400,000		4,800,000		—		—		—		—		—		—		—
		2/23		LTI(2)		1,250,000		5,000,000		7,500,000		—		—		—		—		—		—		—
		2/23		LTI(3)		1,467,600		5,870,400		8,805,600		—		—		—		—		—		—		—
		2/23		pRSU(4)		—		—		—		—		—		—		277,008		—		—		1,163,435
		2/23		pRSU(5)		—		—		—		—		—		—		321,667		—		—		1,351,000
		2/23		PU(6)		—		—		—		177,083		708,333		1,416,667		—		—		—		708,333
		2/23		SO(7)		—		—		—		—		—		—		—		900,000		4.20		1,692,000
Euteneuer		4/4		STI(1)		251,875		1,007,500		2,015,000		—		—		—		—		—		—		—
		4/4		LTI(3)		437,500		1,750,000		2,625,000		—		—		—		—		—		—		—
		4/4		pRSU(5)		—		—		—		—		—		—		76,419		—		—		353,056
		4/4		RSA (8)		—		—		—		—		—		—		—		125,000		—		577,501
		4/4		SO(9)		—		—		—		—		—		—		—		341,463		4.62		689,755
Cowan		2/23		STI(1)		226,563		906,250		1,812,500		—		—		—		—		—		—		—
		2/23		LTI(2)		312,500		1,250,000		1,875,000		—		—		—		—		—		—		—
		2/23		LTI(3)		312,500		1,250,000		1,875,000		—		—		—		—		—		—		—
		2/23		pRSU(4)		—		—		—		—		—		—		69,252		—		—		290,858
		2/23		pRSU(5)		—		—		—		—		—		—		56,306		—		—		236,487
		2/23		PU(6)		—		—		—		52,083		208,333		416,666		—		—		—		208,333
		2/23		SO(7)		—		—		—		—		—		—		—		243,902		4.20		458,536
Elfman		2/23		STI(1)		203,125		812,500		1,625,000		—		—		—		—		—		—		—
		2/23		LTI(2)		375,000		1,500,000		2,250,000		—		—		—		—		—		—		—
		2/23		LTI(3)		406,250		1,625,000		2,437,500		—		—		—		—		—		—		—
		2/23		pRSU(4)		—		—		—		—		—		—		83,102		—		—		349,030
		2/23		pRSU(5)		—		—		—		—		—		—		73,198		—		—		307,433
		2/23		PU(6)		—		—		—		53,125		212,500		425,000		—		—		—		212,500
		2/23		SO(7)		—		—		—		—		—		—		—		317,073		4.20		596,097
Johnson		2/23		STI(1)		60,375		241,500		483,000		—		—		—		—		—		—		—
		2/23		STI(1)		63,750		255,000		510,000		—		—		—		—		—		—		—
		2/23		LTI(2)		160,000		640,000		960,000		—		—		—		—		—		—		—
		2/23		LTI(3)		175,000		700,000		1,050,000		—		—		—		—		—		—		—
		2/23		pRSU(4)		—		—		—		—		—		—		35,457		—		—		148,919
		2/23		pRSU(5)		—		—		—		—		—		—		31,532		—		—		132,433
		2/23		PU(6)		—		—		—		22,667		90,667		181,334		—		—		—		90,667
		2/23		SO(7)		—		—		—		—		—		—		—		136,585		4.20		256,780
Former Executive Officer:
Brust		2/23		STI(1)		325,000		1,300,000		2,600,000		—		—		—		—		—		—		—

(1)

STI - Represents the threshold, target and maximum estimated possible payouts for fiscal year 2011 under our 2011 STIC plan. Payouts under the 2011 STIC plan, which were based on our 2011 actual performance compared to the financial and operating objectives of the plan, were made at approximately 73.7% (after adjustment) of each named executive officer’s target opportunity, and are reflected in the 2011 Summary Compensation Table in the columns entitled “Non-Equity Incentive Plan Compensation” and “Bonus.” Each performance objective under the plan had a threshold achievement level, below which there would be no payout, a target achievement level, at which the target opportunity

Notice of Annual Meeting and Proxy Statement  |  37

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Executive Compensation

would be paid, and a maximum achievement level, at which 200% of the target would be paid for each half-year performance period. For purposes of this table, the minimum estimated possible payout assumes that the threshold achievement level was satisfied. For more information on the 2011 STIC plan, see “Compensation Discussion and Analysis – Primary Components of Executive Compensation–Short-term Incentive Compensation Plans.” Mr. Johnson’s target for the first half of the 2011 STIC plan was based on a salary of $483,000, which increased in the second half of the 2011 STIC plan to $510,000.

(2)

LTI - Represents the threshold, target and maximum estimated possible payouts for performance units granted by the Compensation Committee ofon March 16, 2010 under the Board, which is composed of independent Directors and has2010 LTIC plan. In early 2011, the principal responsibilities described on page 13 of this proxy statement, has furnishedCompensation Committee set goals for the following report on executive compensation2011 LTIC plan performance period with respect to 2002: free cash flow and net service revenue.

 

Sprint’s compensation philosophy

(3)

LTI - Represents the threshold, target and maximum estimated possible payouts for performance units granted by the Compensation Committee on February 23, 2011 under the 2011 LTIC plan. In early 2011, the Compensation Committee set goals for the 2011 LTIC plan performance period with respect to free cash flow and net service revenue.

(4)

pRSUs - Represents a performance-based RSU award granted under our 2010 LTIC plan, which is subject to link, by using specific objectives, executives’ compensation toadjustment in accordance with the short-term and long-term performance of Sprint soobjectives. Vesting occurs 100%, 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 companiesadjusted for achievement 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. Sixeach of the eight companiesthree one-year performance periods ending on December 31, 2010, 2011, and 2012, on March 16, 2013. In early 2011, the Compensation Committee set goals for the 2011 LTIC plan performance period with respect to free cash flow and net service revenue. The total number of performance-based RSUs granted is set forth below:

Name		2010 Performance-based RSUs		1/3 for 2011
Daniel R. Hesse		831,025		277,008
Keith O. Cowan		207,756		69,252
Steven L. Elfman		249,307		83,102
Robert L. Johnson		106,371		35,457

(5)

pRSUs - Represents a performance-based RSU award granted under our 2011 LTIC plan, which is subject to adjustment in accordance with the S&P® 500 Integrated Telecommunications Index, which are usedperformance objectives. Vesting occurs 100%, as adjusted for achievement in each of the Stock Performance Graphthree one-year performance periods ending on page 25December 31, 2011, 2012, and 2013, on February 23, 2014. In early 2011, the Compensation Committee set goals for the 2011 performance period with respect to free cash flow and net service revenue. The total number of this Proxy Statement, are included inperformance-based RSUs granted is set forth below:

Name		2011 Performance-based RSUs		1/3 for 2011
Daniel R. Hesse		965,000		321,667
Joseph J. Euteneuer		229,258		76,419
Keith O. Cowan		168,919		56,306
Steven L. Elfman		219,595		73,198
Robert L. Johnson		94,595		31,532

(6)

PUs- Represents the comparison groups.target opportunity of performance units for the 2011 annual performance period as of the approval date of the Compensation Committee under the 2009 LTIC plan. The committee’s policy has beenperformance unit award is allocated one-third to each annual performance period for three years (2009-2011). Each annual performance target base salarieswas set by the Compensation Committee at the market median for base paystart of similar positions within the comparison group, and total compensation above the market median provided certaineach respective single-year 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 officer named in the summary compensation table of the proxy statement (the Named Officer) unless such compensation is performance-based under Section 162(m). It is Sprint’s policy to design its short-term incentive compensation plans and stock option awards for the Named Officers in a manner so that such incentive compensation would be deductible under Section 162(m). The committee believes, however, that the interests of the Stockholders are best served by not restricting the committee’s discretion in developing compensation programs, even though such programs may result in certain non-deductible compensation expenses. Base Salary. In 2002, the committee made a recommendation to the Board establishing base pay for all Named Officers. In making this recommendation for 2002, the committee considered the salaries of other executives within the comparison groupsperiod, and the executives’ performance during 2001. With respect to the latter, the committee exercised its judgment in evaluating the executives’ accomplishments during the year. Because the committee favors increasing at-risk compensation rather than base compensation, Mr. Esrey’s base salary is less than 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 termspayout of the performance goals under STIC were approved by the Stockholders at the 2002 Annual Meeting. Target incentive opportunity for STIC was based in 2002 on job level and potential impact on organization results. The STIC payout isunit award may range from 0% to 200% based on the achievement of sixteen financial objectives—four forthose specified results. The award was payable in cash or unrestricted shares of our common stock, at the Local Telecommunications Division (LTD), three for Global Markets (GMG), five for Sprint PCS, one corporate and three divisional cross-selling objectives. For each objective, targets were established and compared to actual 2002 results. When the STIC payout for an individual financial performance measure exceeds 200%, and if that amount is more than $1,000, 50%discretion of the excess payout amount is carried forward and will be paid out in two equal annual installments. The remaining STIC payout will be made atCompensation Committee, after the same time other STIC payouts occur. All amounts carried forward will accrue interest atend of 2011. For 2011, the prime rate. · The objectives for the LTD related to operating income (35% weighting), net collectible revenue (35%), economic value added (EVA) (20%) and Sprint North Supply/Sprint Publishing and Advertising (SNS/SPA) operating income (10%). Actual results were 157.4% of target on a weighted average basis. · The objectives for the GMG related to net voice revenue (20% weighting), data/internet net revenue (40%) and EBITDA (40%). Actual results were 88.0% of target on a weighted average basis. · The objectives for Sprint PCS related to share of decisions (20% weighting), average revenue per user per month (20%), cost to acquire per net gross addition (20%), cash cost per user (20%), and annual churn (20%). Actual results were 62.9% of target on a weighted average basis. · The objective for corporate cross-selling related to incremental market penetration. The actual result was 135.7% of target. · The objective for LTD cross-selling related to LTD and GMG incremental penetration (50% weighting) and LTD and PCS incremental penetration (50%). The actual result was 43.5% of target. · The objective for GMG cross-selling related to GMG and LTD incremental penetration (50% weighting) and GMG and PCS incremental penetration (50%). The actual result was 203.5% of target. · The objective for PCS cross-selling related to PCS and GMG incremental penetration (50% weighting) and PCS and LTD incremental penetration (50%). The actual result was 160.0% of target. The weighting assigned to a particular executive among the LTD, GMG, Sprint PCS, and cross-selling objectives depended on the executive’s responsibilities with Sprint. The entire STIC payout for the Named Officers, and for certain other executive officers,performance unit award was based on the Company’s achievement of specified results with respect to free cash flow and net service revenue and was paid out in cash.

(7)

SO - Represents stock options granted under our 2011 LTIC plan. Vesting occurs in equal installments on each of February 23, 2012, February 23, 2013 and February 23, 2014.

(8)

RSA - Represents a combinationrestricted stock award granted as part of these financial objectives.his sign-on award. Vesting occurs 100% on April 4, 2014.

(9)

SO - Represents stock options granted under our 2011 LTIC plan. Vesting occurs in equal installments on each of April 4, 2012, April 4, 2013 and April 4, 2014.

Notice of Annual Meeting and Proxy Statement  |  38

 

Mr. Esrey’s STIC payout was

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Executive Compensation

2011 Option Exercises and Stock Vested

The table below summarizes option awards that were exercised and stock awards that vested in 2011 with respect to each of our named executive officers.

		Option Awards				Stock Awards
		Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)(1)		Value Realized on Vesting ($)(2)
Hesse		—		—		322,581		1,461,292
Euteneuer		—		—		—		—
Cowan		—		—		161,290		730,644
Elfman		—		—		96,774		438,386
Johnson		—		—		41,290		187,044
Former Executive Officer: Brust		—		—		234,742		1,227,701

(1)

Of the shares acquired on vesting, each named executive officer surrendered a number to satisfy his tax withholding obligations, resulting in his receiving a net number of shares of our common stock as follows:

Named Executive Officer		Surrendered		Received
Hesse		114,763		207,818
Cowan		50,948		110,342
Elfman		31,704		65,070
Johnson		15,252		26,038
Brust		97,301		137,441

(2)

Amounts reflect the average high and low common stock price as reported on the NYSE composite of the underlying common stock on the day the RSU award vested multiplied by the number of shares that vested.

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Executive Compensation

Outstanding Equity Awards at 2011 Fiscal Year-End

The table below summarizes option and equity awards outstanding as of December 31, 2011 held by each of our named executive officers.

Option Awards																Stock Awards
Name		Number of       Securities      Underlying      Unexercised      Options (#)      Exercisable				Number of         Securities         Underlying         Unexercised         Options (#)         Unexercisable				Option   Exercise   Price ($)				Option   Expiration   Date		Number of           Shares or           Units of           Stock That           Have Not           Vested           (#)				Market Value of Shares or  Units of Stock That Have   Not Vested   ($)(1)		Equity      Incentive      Plan      Awards:      Number      of      Unearned      Shares,      Units, or      Other      Rights      That          Have Not          Vested      (#)				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have   Not Vested  ($)(1)
Hesse			—				900,000  (2)				4.20			02/23/2021			875,683  (6)			2,049,098			920,342  (7)			2,153,600
			227,272  (3)				681,819  (3)				3.45			03/16/2020			—			—			—			—
			1,475,694  (4)				1,475,695  (4)				3.59			02/25/2019			—			—			—			—
			513,347  (5)				—				6.52			03/26/2018			—			—			—			—
			1,000,000  (5)				—				13.91			12/17/2017			—			—			—			—
			1,000,000  (5)				—				16.69			12/17/2017			—			—			—			—
			1,275,000  (5)				—				19.47			12/17/2017			—			—			—			—
Euteneuer			—				341,463  (8)				4.62			04/04/2021			201,419  (9)			471,320			152,839 (10)			357,643
Cowan			—				243,902  (2)				4.20			02/23/2021			194,810  (6)			455,856			181,865  (7)			425,563
			56,818  (3)				170,455  (3)				3.45			03/16/2020			—			—			—			—
			434,028  (4)				434,028  (4)				3.59			02/25/2019			—			—			—			—
			256,674  (5)				—				6.52			03/26/2018			—			—			—			—
			473,485  (5)				—				21.48			07/09/2017			—			—			—			—
Elfman			—				317,073  (2)				4.20			02/23/2021			239,402  (6)			560,201			229,500  (7)			537,030
			68,181  (3)				204,546  (3)				3.45			03/16/2020			—			—			—			—
			442,708  (4)				442,709  (4)				3.59			02/25/2019			—			—			—			—
			154,004  (5)				—				7.89			05/04/2018			—			—			—			—
			435,730  (5)				—				9.47			05/04/2018			—			—			—			—
Johnson			—				136,585  (2)				4.20			02/23/2021			102,446  (6)			239,724			98,520  (7)			230,537
			29,091  (3)				87,273  (3)				3.45			03/16/2020			—			—			—			—
			188,889  (4)				188,889  (4)				3.59			02/25/2019			—			—			—			—
			65,708  (5)				—				6.52			03/26/2018
			35,344 (11)				35,371 (11)				4.64			06/17/2017
Former Executive Officer:
Brust			—				681,818 (12)				3.29			02/25/2020			415,512 (13)			972,298			—			—
			677,201  (5)				—				8.02			05/01/2018			—			—			—			—

(1)

Market value is based on the financial results described above usingclosing price of a share of our common stock of $2.34 on December 30, 2011.

(2)

Stock options vest 33 1/3% on February 23, 2012, February 23, 2013 and February 23, 2014.

(3)

Stock options vest/vested 25% on March 16, 2011, March 16, 2012, March 16, 2013 and March 16, 2014.

(4)

Stock options vest/vested 25% on February 25, 2010, February 25, 2011, February 25, 2012 and February 25, 2013.

(5)

Stock options are fully vested.

(6)

Consists of performance-based RSU awards that vest on March 16, 2013 and with respect to which the following relative weights for objectives: 25% for LTD, 25% for GMG, and 50% for Sprint PCS. Based on these factors, Mr. Esrey earned a payout of 92.8% of target. The executive officers earned STIC payouts on average of 98.4% of target. applicable performance periods have been completed:

Long-Term Incentive Compensation.Name Sprint’s long-term incentive compensation (LTIP) is a three-year incentive plan designed to promote the long-term objectives of the organization. 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. The target incentive opportunity was converted to stock options under Sprint’s Management Incentive Stock Option Plan (MISOP) based on a conversion rate of $1.63 per FON option and $1.63 per PCS option. The committee considered individual performance in determining the 2002 LTIP option award.		Amount
Daniel R. Hesse		554,016
Keith O. Cowan		138,504
Steven L. Elfman		166,204

Notice of Annual Meeting and Proxy Statement  |  40

 

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Stock Options. Stock option grants combined with LTIP constitute the long-term incentive compensation awarded to executive officers of Sprint. Total long-term incentive compensation has been targeted above the market median of the comparison group. The committee considered individual performance in determining option grants but did not consider the number of options already held by an executive. The Board believes that granting options and other stock awards to officers and other key employees enhances Sprint’s ability to attract, retain and provide incentives to individuals of exceptional talent necessary for its continued success.Executive Compensation

 

Certain exempt employees elected under Sprint’s MISOP to receive options in lieu of receiving up to 50% of their target opportunity under Sprint’s management incentive plans during 2002. For each $2.67 reduction in an employee’s target opportunity resulting from such election, the employee received an option to purchase one share of FON Stock and for each $4.62 reduction in target opportunity, the employee received an option to purchase one 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.Robert L. Johnson			70,914

Consists of performance-based RSU awards that vest on February 23, 2014 and with respect to which the applicable performance periods have been completed:

 

Certain executive officers, including Mr. Esrey, also received additional short-term incentive compensation inName		Amount
Daniel R. Hesse			321,667
Keith O. Cowan			56,306
Steven L. Elfman			73,198
Robert L. Johnson			31,532

(7)	Consists of performance-based RSU awards that vest on March 16, 2013 and with respect to which the form of options as described in footnote 5 on page 20 of this proxy statement.applicable performance periods have not been completed:

Name		Amount
Daniel R. Hesse			277,009
Keith O. Cowan			69,252
Steven L. Elfman			83,103
Robert L. Johnson			35,457

Consists of performance-based RSU awards that vest on February 23, 2014 and with respect to which the applicable performance periods have not been completed:

 

Restricted Stock.Name During 2002,		Amount
Daniel R. Hesse			643,333
Keith O. Cowan			112,613
Steven L. Elfman			146,397
Robert L. Johnson			63,063

(8)	Stock options vest in equal installments on each of April 4, 2012, April 4, 2013 and April 4, 2014.

(9)	Consists of 76,419 shares underlying a specialperformance-based RSU award and 125,000 shares of restricted stock was granted to certain executive officers. Thisthat vest 100% on April 4, 2014.

(10)	Performance-based RSU award was made to address retention concernsvests 100% on April 4, 2014.

(11)	Stock options vest/vested 50% on June 17, 2011 and to maintain a stable executive team once the telecommunications industry and the economy recover. Mr. Esrey and Mr. LeMay did not receive the award. June 17, 2012.

 

Stewart Turley, Chairman

Irvine O. Hockaday, Jr.

Charles E. Rice

(12)	Stock options vest 100% on May 1, 2012.

 

Summary compensation table

(13)	RSU award vests 100% on May 1, 2012.

Notice of Annual Meeting and Proxy Statement  |  41

 

The following table reflects

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Executive Compensation

Pension Benefits

None of our named executive officers are offered pension benefits from us.

Nonqualified Deferred Compensation

Certain employees, including our named executive officers, are entitled to participate in the Sprint Nextel Deferred Compensation Plan, a nonqualified and unfunded plan under which participants may defer to future years the receipt of certain compensation. For 2011, the plan permitted participants to defer up to 50% of base salary and 75% of their STIC plan payout. To compensate participants for federal tax law limitations under our 401(k) plan, we match deferrals to the plan using the same matching contribution formula as our 401(k) plan for eligible compensation above the applicable annual limit, which for 2011 was $245,000. Of our named executive officers, only Mr. Hesse participated in this plan with respect to compensation earned during 2011. The table below summarizes the information with respect to this plan, and the activity and balances with respect to the account of each named executive officer.

Name		Executive Contributions in Last FY($)(1)				Registrant Contributions in Last FY($)(2)				Aggregate Earnings in Last FY($)				Aggregate Withdrawals/ Distributions($)				Aggregate Balance at Last FYE ($)(3)
Mr. Hesse			60,000				68,792				10,927				—				583,319
Mr. Euteneuer			—				—				—				—				—
Mr. Cowan			—				—				—				—				—
Mr. Elfman			—				—				—				—				—
Mr. Johnson			—				—				—				—				—
Mr. Brust			—				—				—				—				—

(1)

Represents contributions by Mr. Hesse with respect to 2011 base salary compensation, the cash and non-cash compensation for servicesamount of which is included in all capacitiesthe 2011 Summary Compensation Table in the “Salary” column.

(2)

Represents matching contributions by us with respect to Sprint by those persons who were,2011 base salary deferrals but not credited to the account of Mr. Hesse until March 30, 2012, the amount of which is included in the 2011 Summary Compensation Table in the “All Other Compensation” column.

(3)

Represents the aggregate balance as of December 31, 2002,2011, adjusted to include the chief executive officer and the other four most highly compensated executive officers of Sprint (the Named Officers):matching contribution noted in footnote 2 above.

Compensation deferred by participants and any matching contributions made by us are credited to a bookkeeping account that represents our unsecured obligation to repay the participant in the future. Participants elect to allocate deferred and matching contributions among one or more hypothetical investment options, which include one option that tracks our common stock and other options that track broad-based bond and equity indices. Participants may change hypothetical investment elections only four times a year and at least three months must elapse between each change. Under the plan, the amount of our unfunded obligation is determined by tracking the value in the bookkeeping account according to the performance of the hypothetical investments.

Potential Payments upon Termination of Employment or Change of Control

Upon a December 30, 2011 termination of employment due to a resignation without good reason or by us with cause, our named executive officers would be entitled to only those payments and benefits provided to all our salaried employees on a non-discriminatory basis, including:

 

—

Summary Compensation Tableaccrued salary and vacation pay;           Annual Compensation      Long-Term Compensation                                   Awards    Payouts        Name And Principal Position    Year    Salary ($)(1)    Bonus ($)(1)    Other Annual Compensation ($)      Restricted Stock Award(s) ($)(2)    Securities Underlying Options (#)(3)    LTIP Payouts ($)      All Other Compensation ($)(4)                   FON    PCS         William T. Esrey    2002    1,100,000    919,937    172,822 (5)    0    416,333    375,836    0      87,534 Chairman and Chief    2001    1,075,000    213,020    153,623      0    2,385,055    2,385,055    0      81,126 Executive Officer    2000    1,000,000    220,176    103,986      0    1,316,623    645,679    0      72,698 J. Richard Devlin    2002    442,490    151,896    3,695      417,280    164,459    157,772    0      8,250 Executive Vice    2001    429,600    40,878    20,903      0    285,290    209,741    0      8,220 President—General Counsel, External Affairs and Corporate Secretary    2000    429,600    39,869    8,446      0    325,961    167,260    0      19,591 Michael B. Fuller    2002    518,453    729,133    7,658      1,564,800    315,182    315,182    0      10,639 President—Local    2001    447,751    0    13,187      0    453,992    268,063    0      18,401 Telecommunications Division    2000    404,491    71,802    9,693      0    336,961    192,686    0      37,500 Len J. Lauer    2002    456,441    307,014    10,026      1,564,800    299,723    290,305    0      7,468 President—Sprint PCS    2001    389,081    0    13,645      387,558    355,811    213,324    0      5,100      2000    300,059    0    39,668      0    178,051    100,670    0      7,650 Ronald T. LeMay    2002    988,076    645,823    120,525 (5)    0    264,834    240,536    0      8,250 President and Chief    2001    951,525    148,541    138,696      0    2,048,821    2,048,821    0      5,100 Operating Officer    2000    902,400    124,964    5,824      0    1,721,824    590,196    0      5,868 (1) Includes all amounts earned for the respective years, even if deferred under Sprint’s Executive Deferred Compensation Plan. All bonuses were paid under Sprint’s short-term incentive plans. (2) As of December 31, 2002, the Named Officers held restricted shares of FON Stock and PCS Stock as set forth in the following table. The market value of the shares is based on a value of $14.48 per share for FON Stock and $4.38 per share for PCS Stock (the closing price at December 31, 2002). Each of the Named Officers has the right to vote and receive dividends on the restricted shares. The restricted shares granted in 2002 vest 50% on February 28, 2005 and 50% on February 28, 2006. The shares granted to Mr. Lauer in 2001 vest 25% on each of July 30, 2002, July 30, 2003, July 30, 2004, and July 30, 2005.          FON Stock      PCS Stock        Number of shares    Value      Number of shares    Value Mr. Esrey      0    $ 0      0    $ 0 Mr. Devlin      16,000      231,680      16,000      70,080 Mr. Fuller      60,000      868,800      60,000      262,800 Mr. Lauer      67,650      979,572      64,500      282,510 Mr. LeMay      0      0      0      0 (3) Reflects the two-for-one stock split of PCS Stock in the first quarter of 2000. — distribution of balances under our 401(k) plan and deferred compensation plan; and (4) Consists of amounts for 2002 (a) contributed by Sprint under the Sprint Retirement Savings Plan and (b) representing the portion of interest credits on deferred compensation accounts under Sprint’s Executive Deferred Compensation Plan that are at above-market rates, as follows:        Savings Plan Contribution    Above-Market Earnings Mr. Esrey    $ 8,250    $ 79,284 Mr. Devlin      8,250      0 Mr. Fuller      7,517      3,122 Mr. Lauer      7,468      0 Mr. LeMay      8,250      0 (5) Includes the cost to Sprint of providing financial services for the executive under the only two benefits in which those services may be paid or reimbursed: the (1) miscellaneous services benefit and (2) income tax compliance benefit. Under the miscellaneous services benefit Sprint reimbursed up to $15,000 per year for investment counseling, estate planning, insurance counseling, preparation of wills and trusts, tax counseling, and personal financial planning. Under the income tax compliance benefit, Sprint paid fees for preparation of federal and state income tax filings and related analyses but no fees related to any tax shelters as has been widely reported in the press. These benefits totaled $67,490 for Mr. Esrey and $47,410 for Mr. LeMay. — had their termination not for cause been at their normal retirement, (1) the 2011 STIC plan and the 2009 LTIC plan performance unit award based on actual performance and made after the Compensation Committee determined whether performance targets were achieved, pro-rated for their service during the performance period, (2) continued participation in group life and health plans, and (3) accelerated vesting of options and RSUs granted (at actual performance) and exercisability of vested options for five years. Notice of Annual Meeting and Proxy Statement  |  42 Executive Compensation   For more information on the deferred compensation benefits available to our named executive officers, see “—Other Components of Executive Compensation.” Further, pursuant to the terms of our named executive officers’ respective employment agreements or our Change in Control Severance Plan, they would be entitled to not only their accrued benefits noted above, but other payments and benefits upon terminations of employment in the event of certain situations as described in the narrative, and quantified in the table, below. While each of the applicable employment agreements and the Change in Control Severance Plan document set forth relevant definitions in full, generally: Change of controlmeans: — the acquisition by a person or group of 30% or more of Sprint’s voting stock;   — Option grants The following tables summarize options granted to the Named Officers under Sprint’s stock option plans during 2002. The table does not reflect 345,064 shares of PCS Stock underlying options granted in prior years that, solely for technical reasons, were administratively re-granted with identical exercise price, vesting schedule and other terms during 2002 to ensure compliance with certain tax requirements. This re-grant of options had no consequence to or impact on the Named Officers. The amounts shown as potential realizable values on these options are based on arbitrarily assumed annualized rates of appreciation in the price of Sprint’s common stock of five percent and ten percent over the term of the options, as set forth in SEC rules. The Named Officers will realize no gain on these options without an increase in the price of Sprint’s common stock that will benefit all Stockholders proportionately. Unless otherwise indicated, each option listed below has the following terms. Vesting 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 controlthe composition of a majority of our directors; — the consummation of a merger, reorganization, business combination or an employee’s normal retirement at age 65similar transaction after which: Sprint’s shareholders do not hold more than 50% of the combined entity, the members of Sprint’s board of directors do not constitute a majority of the directors of the combined entity, or older. A change in control is deemed to occur if (1) someone’s stock acquisition results in their owninga person or group holds 30% or more of the voting powersecurities of Sprintthe combined entity; or — the liquidation or dissolution of Sprint. We havecause to terminate the employment of a named executive officer involuntarily where that officer materially breaches his employment agreement, fails to perform his duties, intentionally acts in a manner that is injurious to us, or violates our code of conduct. Good reason means, the occurrence of any of the following without the named executive officer’s consent: — our material breach of his employment agreement; — a reduction in salary or short-term incentive compensation target opportunity, except for across-the board reductions; — certain relocations; and — in connection with a change in control: ¡ the reduction of an executive’s duties or responsibilities, organizational status or title; ¡ the failure to provide a long-term incentive compensation opportunity comparable to other senior executives or a greater than 10% maximum across-the-board reduction to any of base salary or short- or long-term incentive compensation opportunities; or ¡ our failure to obtain an agreement from a successor to perform the employment agreement. The following table and narrative describe the potential payments and benefits that would be provided to our named executive officers upon each respective hypothetical December 30, 2011 termination of employment scenario (except that only the information related to an involuntary termination without cause is applicable for Mr. Brust, whose termination of employment with us was effective April 29, 2011). Notice of Annual Meeting and Proxy Statement  |  43 Executive Compensation                     Without Cause or For Good Reason                                                          Non-CIC(1)                 CIC(2)                 Disability           Death                   ($)                 ($)                 ($)           ($)       Hesse    Salary-based              2,400,000            2,400,000            1,200,000            —                 STI-based              6,563,520            7,192,800            1,765,960            1,765,960         LTI-based(3)              4,986,679            7,244,779            7,244,779            7,244,779         Benefits/Perquisites                      —                  —                  —            —                     Total Value        14,002,896            16,890,276            10,219,588            9,010,739      Euteneuer     Salary-based              1,550,000            1,550,000            775,000            —           STI-based              2,475,618            2,762,565            461,641            461,641         LTI-based(3)              292,500            828,964            828,964            828,964         Benefits/Perquisites              52,449            52,449            8,724            —                     Total Value        4,370,567            5,193,978            2,074,329            1,290,605      Cowan     Salary-based              1,450,000            1,450,000            725,000            —                 STI-based              2,478,413            2,716,031            666,834            666,834         LTI-based(3)              2,689,138            2,689,138            1,776,148            1,776,148         Benefits/Perquisites              52,606            52,606            8,803            —                     Total Value        6,670,157            6,907,775            3,176,785            2,442,982      Elfman     Salary-based              1,300,000            1,300,000            650,000            —                 STI-based              2,222,025            2,435,063            597,851            597,851           LTI-based(3)              1,496,002            2,009,854            2,009,854            2,009,854         Benefits/Perquisites              47,131                  —            6,066            —                     Total Value        5,065,158            5,792,048            3,263,771            2,607,705      Johnson     Salary-based              1,020,000            1,020,000            510,000            510,000           STI-based              1,530,000            1,530,000            510,000            510,000           LTI-based(3)              859,645            859,645            859,645            859,645         Benefits/Perquisites              68,126            68,126            9,063            —                     Total Value        3,477,771            3,477,771            1,888,708            1,879,645    Brust     Salary-based                      —            N/A            N/A            N/A           STI-based              461,299            N/A            N/A            N/A           LTI-based(3)              4,656,952            N/A            N/A            N/A         Benefits/Perquisites                      —            N/A            N/A            N/A                   Total Value          5,118,251              N/A              N/A              N/A    (1) With respect to Mr. Johnson, if his termination was for good reason based on relocation, his salary-based benefit would have been $510,000, his STI-based benefit would have been $1,020,000, and his benefits/perquisites would have been $9,063 for a total value of $2,398,708. (2) If the change of control had occurred in 2010, the 2011 STIC plan portion of the STI-based payment would have been: for Mr. Hesse, $1,765,960, resulting in a total value of $16,263,436; for Mr. Euteneuer, $461,641, resulting in a total value of $4,908,054; for Mr. Cowan, $666,834, resulting in a total value of $6,671,078; and for Mr. Elfman, $597,851, resulting in a total value of $5,579,836. (3) Includes performance units payable in cash, stock (2) thereoptions and RSUs. The value of options is based on the intrinsic value of the options, which is the difference between the exercise price of the option and the market price of our shares on December 30, 2011, multiplied by the number of options, and the value of RSUs is based on the market value of our stock on December 30, 2011, multiplied by the number of RSUs. Notice of Annual Meeting and Proxy Statement  |  44 Executive Compensation   Resignation for Good Reason or Involuntary Termination without Cause If our named executive officers’ employment had terminated either by them for good reason or by us without cause, they would have been entitled to: — continuation of their then-current base salary for their respective payment period through periodic payment with the same frequency as our payroll schedule (or in the event of a termination within 18 months after a change of control, in a majoritylump sum equal to their base salary for such payment period); — a payment of: ¡ their STIC plan award for 2011, based on actual performance (or in the event of a termination within 18 months after a change of control occurring in 2011, at their STI target opportunity) prorated for service during the performance period, plus ¡ their STI target opportunity as of December 30, 2011 or that amount of the Directorsapplicable STIC plan payout based on actual performance, if less (greater, with respect to Mr. Johnson), for their payment period, with each payment being made after the Compensation Committee has determined whether performance targets were achieved, except that, in the event of a termination within 18 months after a two-yearchange of control, the payment equal to their STI target opportunity for their payment period would instead be paid as a lump sum without regard to achievement of performance targets or timing of the Compensation Committee’s determination thereon; — a payment of their 2009 LTIC plan (and, with respect to Mr. Cowan, his 2010 LTIC plan) performance unit award based on actual performance and made after the Compensation Committee has determined whether performance targets were achieved, prorated for their service during the performance period; — continued vesting through their payment period (through the originally-scheduled vesting date with respect to Mr. Cowan’s awards outstanding as of August 5, 2010) (or in the event of a termination within 18 months after a change of control, and with respect to Mr. Johnson, immediate vesting) of options and RSUs granted, exercisability of options vested through the 90th day after such vesting, and with respect to: ¡ Mr. Hesse, receipt of the Sign-On RSU Award (as defined in his employment agreement) on the first business day of the seventh month following his termination; ¡ Mr. Brust, vesting as of May 11, 2011 of the unvested portions of his Sign-On Option Award and Sign-On RSU Award (as defined in his employment agreement); and ¡ Mr. Johnson, exercisability of vested options for 12 months; and — continued participation at employee rates in our group health and life (and for Mr. Johnson, long-term disability) plans, and (except for Mr. Brust and except for Mr. Johnson if his termination was for good reason based on relocation) outplacement services in an amount not to exceed $35,000 ($50,000 with respect to Mr. Johnson), each for the duration of their payment period. The payment period for each of the named executive officers is 24 months (12 months with respect to Mr. Johnson if his termination was for good reason based on relocation), with the exception of Mr. Brust, whose payment period was the remainder of his employment term. Termination as a Result of Disability If our named executive officers’ employment had terminated as a result of their disability, they would have been entitled to: Notice of Annual Meeting and Proxy Statement  |  45 Executive Compensation   — continuation of their base salary for 12 months, less (except for Mr. Johnson) any benefits paid under our Long-term Disability Plan, through periodic payment with the same frequency as our payroll schedule; — a payment of their 2011 STIC plan award and the 2009 LTI plan performance unit award, each based on actual performance and prorated for service during the applicable performance periods; — immediate vesting of options and RSUs granted, exercisability of vested options for five years (12 months with respect to Mr. Johnson), and with respect to Mr. Hesse, receipt of the Sign-On RSU Award on the first business day of the seventh month following his termination; and — continued participation at employee rates in our group health and life plans for 12 months. Termination as a Result of Death Had our named executive officers’ employment terminated as result of their death, their estates would have been entitled, as with respect to our employees generally, to a payment of the 2011 STIC plan award based on target and the 2009 performance units under the 2009 LTIC plan based on actual performance, each prorated for service during the applicable performance periods, immediate vesting of options and RSUs granted, and exercisability of vested options for 12 months. Mr. Johnson’s estate also would have received continuation of his base salary for 12 months. Conditions Applicable to the Receipt of Severance Payments and Benefits As a condition to our named executive officers’ entitlement to receive the amounts above, they would have been: — required to execute a release in favor of us; — subject to confidentiality and non-disparagement provisions on a permanent basis following the termination of their employment; and — for the duration of their payment period, prohibited from: ¡ engaging in certain employment activities with a competitor of ours; ¡ soliciting our employees and certain other parties doing business with us to terminate their relationship with us; and ¡ soliciting or assisting any party to undertake any action that would be reasonable likely to, or is intended to, result in a change of control or seek to control our board of directors. If the named executive officer breached any of these obligations, he would have no rights in, and we would have had no obligation to provide, any severance benefits yet to be paid or provided under his employment agreement and any outstanding equity-based award granted under his employment agreement would have terminated immediately. Certain Relationships and Related Transactions Our board has adopted a written policy regarding the review and approval or ratification of transactions involving our company and our directors, nominees for directors, executive officers, immediate family members of these individuals, and shareholders owning five percent or more of our outstanding voting stock, each of whom is referred to as a related party. Our policy covers any transaction, arrangement or relationship where a related party has a direct or indirect material interest and the amount involved exceeds $120,000, except for approved compensation-related arrangements. Our corporate governance and legal staff are primarily responsible for the development and implementation of processes and procedures to obtain information from our directors and executive officers with respect to transactions between related parties. Notice of Annual Meeting and Proxy Statement  |  46 Executive Compensation   We have a related party transaction committee comprised of members of management that reviews transactions between related parties to determine, based on the facts and circumstances, the potential amount involved and whether a related party has a direct or indirect material interest in the transaction. If the transaction is covered under our policy, the related party transaction committee then makes a recommendation to the Nominating Committee of our board regarding the appropriateness of the transaction. The Nominating Committee approves or ratifies the transaction only if it determines the transaction is in the best interests of the Company and our shareholders. In 2011, the related party transaction described below was brought before and ratified by the Nominating Committee. Certain Employment Relationships Danny L. Bowman, who was an executive officer of Sprint as of December 31, 2011, has a brother-in-law who is employed by a subsidiary of Sprint as a business account manager and in 2011 earned approximately $360,000, including commissions, which is commensurate with his level of experience and other employees having similar responsibilities. Notice of Annual Meeting and Proxy Statement  |  47 Executive Compensation   SECURITY OWNERSHIP Security Ownership of Certain Beneficial Owners The following table provides information about the only known beneficial owners of five percent or more of our common stock. For purposes of the table below, beneficial ownership is determined based on Rule 13d-3 of the Securities Exchange Act of 1934, which states that a beneficial owner is any person who directly or indirectly has or shares voting and/or investment or dispositive power. Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent of Class (1) Capital Research Global Investors 333 South Hope Street Los Angeles, California 90071 276,983,800 shares (2) 9.2% Dodge & Cox 555 California Street, 40th Floor San Francisco, CA 94104 225,844,428 shares(3) 7.5% BlackRock, Inc. 40 East 52nd Street New York, New York 10022 166,649,278 shares (4) 5.6% Franklin Resources, Inc. One Franklin Parkway San Mateo, California 94403-1906 158,537,082 shares (5) 5.3% (1) The ownership percentages set forth in this column are based on our outstanding shares on March 16, 2012 and assumes that each of these shareholders continued to own the number of shares reflected in the table above on March 16, 2012. (2) According to a Schedule 13G filed with the SEC on February 8, 2012, by Capital Research Global Investors (a division of Capital Research and Management Company). According to the Schedule 13G, Capital Research Global Investors is the beneficial owner of, and has sole voting power and sole dispositive power with respect to, all of the shares. (3) According to a Schedule 13G/A filed with the SEC on February 10, 2012 by Dodge & Cox. Dodge & Cox has sole voting power with respect to 213,917,928 shares, and sole dispositive power with respect to, all of the shares. (4) According to a Schedule 13G/A filed with the SEC on February 8, 2012 by BlackRock, Inc. BlackRock, Inc. is the beneficial owner of, and has sole voting power and sole dispositive power with respect to, all of the shares. (5) According to a Schedule 13G filed with the SEC on February 8, 2012, by Franklin Resources, Inc., Charles B. Johnson and Rupert H. Johnson, Jr. According to the Schedule 13G, Franklin Resources, Charles B. Johnson and Rupert H. Johnson, Jr. are beneficial owners of, and have shared voting power with respect to, 150,154,747 shares, and shared dispositive power with respect to 158,537,082 shares. Notice of Annual Meeting and Proxy Statement  |  48 Security Ownership   Security Ownership of Directors and Executive Officers The following table states the number of shares of our common stock beneficially owned as of March 16, 2012 by each director, named executive officer, and all directors and executive officers as a group. Except as otherwise indicated, each individual named has sole investment and voting power with respect to the shares owned. Name of Beneficial Owner    Shares Owned     Shares Covered by Exercisable Options and RSUs to be Delivered (1)      Percentage of Common Stock Robert R. Bennett      86,787        20,755       *   Gordon M. Bethune      75,305        20,755       * Robert H. Brust      0        1,774,531       * Keith O. Cowan      650,694        1,576,137       * Steven L. Elfman      430,884        1,495,850       * Joseph J. Euteneuer      125,000 (2)      113,821       * Larry C. Glasscock      91,736        20,755       * James H. Hance, Jr.      96,245        20,755       * Daniel R. Hesse      1,891,571        6,756,433       * V. Janet Hill      76,918        91,956       * Frank Ianna      56,584        20,755       * Robert L. Johnson      223,093        488,105       * Sven-Christer Nilsson      37,182        20,755       * William R. Nuti      53,940        20,755       * Rodney O’Neal      61,439        20,755       * Directors and Executive Officers as a group (20 persons)      4,138,916        6,799,262       *   *Indicates ownership of less than 1%. (1) Represents shares that may be acquired upon the exercise of stock options exercisable, and shares of stock that underlie restricted stock units to be delivered, on or within 60 days after March 16, 2012 under our equity-based incentive plans. (2) Represents shares of restricted stock as to which Mr. Euteneuer has sole voting power but no dispositive power. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC and the NYSE initial reports of beneficial ownership and reports of changes in beneficial ownership of our shares and other equity securities. These people are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file, and we make these reports available atwww.sprint.com/investors/sec. To our knowledge, based solely on a review of the copies of these reports furnished to us and written representations that no other reports were required, during 2011 all Section 16(a) filing requirements applicable to our directors, executive officers and beneficial owners of more than 10% of our equity securities were met. Notice of Annual Meeting and Proxy Statement  |  49 Proposal 2 - Ratification of the Selection of the Independent Registered Public Accounting Firm   PROPOSAL 2. RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Item 2 on Proxy Card) Our Audit Committee has voted to appoint KPMG LLP as our independent registered public accounting firm to audit the consolidated financial statements and the effectiveness of internal control over financial reporting for our company and our subsidiaries for the year ending December 31, 2012. Our shareholders are asked to ratify that appointment at the annual meeting. In keeping with good corporate governance, the Audit Committee will periodically assess the suitability of our incumbent independent registered public accounting firm taking into account all relevant facts and circumstances, including the possible consideration of the qualifications of other accounting firms. Representatives of KPMG are expected to be present at the annual meeting and will have the opportunity to make a statement and to respond to appropriate questions. If the appointment of KPMG is not ratified at the meeting, the Audit Committee will consider the selection of another accounting firm. The following paragraphs describe the fees billed for professional services rendered by our independent registered public accounting firm for the fiscal years ended December 31, 2011 and 2010. Audit Fees For professional services rendered for the audit of our 2011 consolidated financial statements, the report on the effectiveness of internal control over financial reporting as required by the Sarbanes-Oxley Act, the review of the consolidated financial statements included in our 2011 Form 10-Qs and the statutory audits of our international subsidiaries, KPMG billed us a total of approximately $15 million. For professional services rendered for the audit of our 2010 consolidated financial statements, the report on the effectiveness of internal control over financial reporting as required by the Sarbanes-Oxley Act, the review of the consolidated financial statements included in our 2010 Form 10-Qs and the statutory audits of our international subsidiaries, KPMG billed us a total of approximately $15.5 million. These amounts also include reviews of documents filed with the SEC, accounting consultations related to the annual audit and preparation of letters for underwriters and other requesting parties. Audit-Related Fees For professional audit-related services rendered to us, KPMG billed us a total of approximately $630,000 in 2011. Audit-related services in 2011 generally included the audits of our employee benefit plans, internal control reviews and other attestation services. For professional audit-related services rendered to us, KPMG billed us a total of approximately $600,000 in 2010. Audit-related services in 2010 generally included the audits of our employee benefit plans, internal control reviews and other attestation services. Tax Fees For professional tax services rendered to us, KPMG billed us a total of approximately $ 775,000 in 2011. Tax services in 2011 primarily included tax consultation matters. For professional tax services rendered to us, KPMG billed us a total of approximately $200,000 in 2010. Tax services in 2010 primarily included tax consultation matters. All Other Fees In 2011 and 2010, KPMG did not bill any fees other than the fees described above. Notice of Annual Meeting and Proxy Statement  |  50 Proposal 2 - Ratification of the Selection of the Independent Registered Public Accounting Firm   The Audit Committee determined that the non-audit services rendered by KPMG in 2011 and 2010 were compatible with maintaining its independence as auditors of our consolidated financial statements. The Audit Committee has adopted policies and procedures concerning our independent registered public accounting firm, including the pre-approval of services to be provided. Our Audit Committee pre-approved all of the services described above. The Audit Committee is responsible for the pre-approval of all audit, audit-related, tax and non-audit services; however, pre-approval authority may be delegated to one or more members of the Audit Committee. The details of any services approved under this delegation must be reported to the full Audit Committee at its next regular meeting. Our independent registered public accounting firm is generally prohibited from providing certain non-audit services under our policy, which is more restrictive than the SEC rules related to non-audit services. Any permissible non-audit service engagement must be specifically approved in advance by the Audit Committee. We provide quarterly reporting to the Audit Committee regarding all audit, audit-related, tax and non-audit services provided by our independent registered public accounting firm. Our Board of Directors recommends that you vote “FOR” Proposal 2. Notice of Annual Meeting and Proxy Statement  |  51 Proposal 2 - Ratification of the Selection of the Independent Registered Public Accounting Firm   PROPOSAL 3. ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION (Item 3 on Proxy Card) The Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, and Section 14A of the Exchange Act require that we permit our shareholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers as disclosed in the “Executive Compensation—Compensation Discussion and Analysis” and accompanying Executive Compensation Tables and related narrative disclosure beginning on page 18. At our 2011 Annual Meeting, our shareholders approved, on an advisory basis, that an advisory vote on executive compensation should be held annually. Based on such result, our board determined that the advisory vote on executive compensation will be held every year until the next advisory vote on the frequency of future advisory votes on executive compensation, which will be no later than the Company’s 2017 annual meeting of shareholders. Our executive compensation programs are designed to attract, motivate, and retain our named executive officers, who can contribute to our success. We believe our incentive compensation must strike a balance between rewarding achievement of our short-term objectives and rewarding long-term shareholder return and must be highly sensitive to the degree to which those results are realized. Please read the “Executive Compensation—Compensation Discussion and Analysis” for additional details about our executive compensation programs, including information about the fiscal year 2011 compensation of our named executive officers. We are asking our shareholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we will ask our shareholders to vote “FOR” the following resolution at the 2012 Annual Meeting: RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED. The say-on-pay vote is advisory, and therefore not binding on Sprint Nextel, the Compensation Committee or our board of directors. Our board of directors and our Compensation Committee value the opinions of our shareholders and expect to take into account the outcome of the vote when considering future executive compensation decisions to the extent they can determine the cause or causes of any significant negative voting results. Our Board of Directors recommends that you vote “FOR” Proposal 3. Notice of Annual Meeting and Proxy Statement  |  52 Proposals 4 and 5 – Approval of Amendments to Article Seventh of our Articles of Incorporation   PROPOSALS 4. AND 5. APPROVAL OF AMENDMENTS TO ARTICLE SEVENTH OF OUR ARTICLES OF INCORPORATION (Items 4 and 5 on Proxy Card) In response to a shareholder proposal requesting that we eliminate supermajority voting provisions that was approved at our 2011 Annual Meeting, our board, upon the recommendation of the Nominating Committee, approved an amendment to the Amended and Restated Articles of Incorporation (the “Articles”), subject to shareholder approval. In order to establish majority voting on all matters impacting our company, we must eliminate supermajority voting by: (1) opting-out of certain anti-takeover provisions of the Kansas General Corporation Code (“KGCC”) relating to business combinations (the “Business Combination Statute”) (Proposal 4) and (2) eliminating the business combination provision currently contained in Article SEVENTH of the Articles (the “Business Combination Provision”) (Proposal 5). The following is a summary of the two components of the amendment to the Articles (the “Amendment”), which must be separately considered for approval. The proposed Amendment would strike current Article SEVENTH in its entirety and replace it as follows: Business Combinations with Interested Stockholders.The Corporation expressly elects not to be subject to the provisions of contained in Sections 17-12,100 to 17-12,104 of the Kansas General Corporation Code, as it may be amended. While the text of the Amendment is contained in one new Article SEVENTH, in accordance with Securities Exchange Act Rule 14a-4(a)(3), shareholders will have an opportunity to vote separately on each of the two components of the Amendment: (1) “opts out” of certain anti-takeover provisions of the Business Combination Statute (Proposal 4) and (2) eliminates the Business Combination Provision currently contained in Article SEVENTH. Either one or both or neither of the proposed changes may be approved by the shareholders (Proposal 5). OVERVIEW OF KANSAS LAW Under the KGCC, the board of directors and the holders of a majority of the shares entitled to vote must approve a merger, consolidation or sale of all or substantially all of a corporation’s assets. However, unless the corporation provides otherwise in its articles of incorporation, no shareholder vote of a constituent corporation surviving a merger is required if: — the merger agreement does not amend the constituent corporation’s articles of incorporation; — each share of stock of the constituent corporation outstanding before the merger is an identical outstanding or treasury share of the surviving corporation after the merger; and — either no shares of common stock of the surviving corporation are to be issued or delivered by way of the merger or, if common stock will be issued or delivered, it will not increase the number of outstanding shares of common stock immediately before the merger by more than 20%. PROPOSAL 4. APPROVAL TO OPT-OUT OF THE BUSINESS COMBINATION STATUTE (Item 4 on Proxy Card) If passed, Proposal 4 would opt-out of the Business Combination Statute. The KGCC contains a “business combination” statute, which restricts “business combinations” between a domestic corporation and an “interested shareholder.” A “business combination” means one of various types of transactions, including mergers and consolidations that increase the proportionate voting power of the interested shareholder. An “interested shareholder” means any person, or its affiliate or associate that owns or controls 15% or more of the outstanding shares of the corporation’s voting stock. Notice of Annual Meeting and Proxy Statement  |  53 Proposals 4 and 5 – Approval of Amendments to Article Seventh of our Articles of Incorporation   Under this statute, a domestic corporation may not engage in a business combination with an interested shareholder for a period of three years following the time the interested shareholder became an interested shareholder, unless: — before that time the corporation’s board of directors approved either the business combination or the transaction that resulted in the shareholder becoming an interested shareholder; — upon completion of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owns at least 85% of the corporation’s voting stock outstanding at the time the transaction commenced, excluding shares owned by persons who are directors and also officers and shares held by specified employee stock ownership plans; or — at or after that time the business combination is approved by the board of directors and authorized at a shareholders’ meeting by the affirmative vote of at least two-thirds of the incumbent Directors,outstanding voting stock not owned by the interested shareholder. The business combination restrictions of this statute do not apply if, among other things: — the holders of a majority of the corporation’s voting stock approve an amendment to its articles of incorporation or (3) therebylaws expressly electing not to be governed by the provisions of the business combination act, which election will be effective 12 months after the amendment’s adoption and would not apply to any business combination with a person who was an interested shareholder at or before the time the amendment was approved; or — a shareholder becomes an interested shareholder “inadvertently” and as soon as possible thereafter divests itself of a sufficient number of shares so that such shareholder ceases to be an interested shareholder and would not, at any time within the three-year period immediately before a business combination between the corporation and such interested shareholder, have been an interested shareholder, but for the inadvertent acquisition. A vote “For” Proposal 4 would opt-out of the Business Combination Statute; however, it would not be effective until twelve (12) months following the shareholders’ approval. PROPOSAL 5. APPROVAL OF THE ELIMINATION OF THE BUSINESS COMBINATION PROVISION (Item 5 on Proxy Card) If approved, Proposal 5, would eliminate the Business Combination Provision contained in Article SEVENTH of our Articles. The Business Combination Provision requires that certain business combinations initiated by a beneficial owner of 10% or more of our voting stock, together with its affiliates and associates (collectively an “interested shareholder”), must be approved by the holders of 80% of the outstanding voting stock, unless (1) approved by a majority of continuing directors at a meeting where at least seven continuing directors are present, or (2) the business combination is a merger or consolidation and the consideration received by our shareholders in the business combination is not less than the highest price per share paid by the interested shareholder for its shares. The types of business combinations covered by this provision include: — a merger or consolidation of our company or any of our subsidiaries with an interested shareholder or its affiliate; — a sale, lease, exchange, pledge, transfer or other disposition (in one transaction or a series of transactions) of assets with a fair market value of $1 million or more to or with an interested shareholder or its affiliate; — the issuance or transfer by us or any of our subsidiaries (in one transaction or a series of transactions) of our securities or securities of any of our subsidiaries in exchange for cash, securities or other property having an aggregate fair market value of $1 million or more to an interested shareholder or its affiliate; — the adoption of a plan or proposal for our liquidation or dissolution proposed by an interested shareholder or its affiliate; or Notice of Annual Meeting and Proxy Statement  |  54 Proposals 4 and 5 – Approval of Amendments to Article Seventh of our Articles of Incorporation   — any reclassification of securities or recapitalization of our company or other transaction that has the effect of increasing the proportionate share of our equity securities or equity securities of any subsidiary owned directly or indirectly by the interested shareholder or its affiliate. In order to qualify as a continuing director, a director cannot be affiliated with an interested shareholder and must have been a director before the time the interested shareholder became an interested shareholder (or any successor director recommended by a majority of the continuing directors). A vote “For” Proposal 5 would eliminate the Business Combination Provision. CONSIDERATIONS OF THE BOARD IN MAKING ITS RECOMMENDATION Both the Business Combination Provision and the Business Combination Statute help discourage potential acquirors from purchasing a large block of stock as a means of substantially influencing the outcome of a simple majority vote. Neither applies to any “business combination” that was approved in advance by the corporation’s board of directors prior to the acquiring party’s becoming an interested shareholder. In making its recommendation, our board considered, among other things, that: — our shareholders approved a shareholder proposal requesting that we eliminate all supermajority voting provisions that we are subject to; — some institutional investors look unfavorably upon public companies which Sprint’s Stockholders doavail themselves of state corporate law anti-takeover protections such as the Business Combination Statute or Business Combination Provision; — the potentially chilling effect on takeover and investment activity in us due to the potential for restrictions and a substantial delay that may be required thereafter in completing a business combination; — while our board can approve a business combination in advance and exempt it from the Business Combination provisions of the KGCL or the Articles, such approval must be obtained before an investor becomes an “interested shareholder”. Investors are not controlalways cognizant of the resulting entity. Each option hasBusiness Combination provisions of the KGCL or the Articles and thus may become subject to its provisions and then be precluded from participating in a reload feature. Underbusiness combination for a reload feature, an optionsubstantial period of time. Effects of a Voting “For” and “Against” — If Proposals 4 and 5 are approved, we will not be covered by either the Business Combination Provision or the Business Combination Statute.However, we would still be covered by the Business Combination Statute for twelve (12) months following the shareholders’ approval.See Annex A – Example 1. — If both Proposal 4 and Proposal 5 are not approved, our Articles will remain unchanged. See Appendix A – Example 2. — If Proposal 4 is approved and Proposal 5 is not approved, the Business Combination provision will remain in our Articles and we will opt-out of the Business Combination Statute. See Annex A – Example 3. — If Proposal 4 is not approved and Proposal 5 is approved, we will not have a Business Combination provision in our Articles, but will continue to be covered by the Business Combination Statute. See Annex A – Example 4. Our Board of Directors recommends that you vote “FOR” Proposals 4 and 5. Notice of Annual Meeting and Proxy Statement  |  55 Proposal 6 – Approval of Material Terms of Performance Objectives under 2007 Omnibus Incentive Plan, as amended   PROPOSAL 6. APPROVAL OF MATERIAL TERMS OF PERFORMANCE OBJECTIVES UNDER 2007 OMNIBUS INCENTIVE PLAN, AS AMENDED (Item 6 on Proxy Card) Description of the Proposal Section 162(m) generally limits to $1 million the amount that a publicly held corporation is allowed to deduct each year for the compensation paid to its chief executive officer and the three other highest compensated officers (other than the chief financial officer), unless such compensation is deemed to be qualified performance-based compensation. To qualify as “qualified performance-based compensation,” certain criteria must be satisfied and the material terms under which the compensation is to be paid must be disclosed to, and approved by, shareholders before the compensation is paid. Generally, shareholders are required to approve the criteria and the material terms of the plan every five years. In 2007, the Board adopted and the shareholders approved the Sprint Nextel Corporation 2007 Omnibus Incentive Plan, which we refer to as the 2007 Plan. The Board is now requesting shareholder approval of the material terms of the performance goals for certain future compensation awards that we may grant to certain of our senior executive officers. These material terms are slightly different than those approved by shareholders in 2007 because on February 22, 2012, the Board adopted, upon recommendation of the Compensation Committee and subject to shareholder approval, an amendment of the 2007 Plan, as further described below. Under NYSE rules, we are required to obtain shareholder approval of the amendments to the 2007 Plan. In addition, we are submitting this proposal to the shareholders at this time pursuant to the requirements of Section 162(m) in order to continue meeting certain requirements of Section 162(m) regarding the deductibility of executive compensation. The following summary is qualified in its entirety by reference to the 2007 Plan, as amended (the “Amended 2007 Plan”), a copy of which is attached to this proxy statement as Annex B. If the material terms of the performance criteria and goals set forth in the Amended 2007 Plan are approved by the Company’s shareholders, the Amended 2007 Plan will enable the Compensation Committee to continue to grant qualified performance-based compensation awards under the Amended 2007 Plan that may be exempt from the deduction limits of Section 162(m) until 2017. If the material terms of the performance criteria and goals of the Amended 2007 Plan are not approved by the shareholders, then the 2007 Plan will remain in full force and effect, but the amendment will not be made and for awards granted under the 2007 Plan on or after the date of the 2012 annual meeting, we will not be able to deduct the resulting compensation that exceeds the deduction limits of Section 162(m) that would have otherwise qualified as qualified performance-based compensation under Section 162(m), which would result in an additional cost to the company. The Amended 2007 Plan is an “omnibus” type of equity compensation plan that provides the Board and the Compensation Committee of the Board with the discretion to provide for the award of incentive and nonqualified stock options, tandem and free-standing stock appreciation rights, restricted stock, restricted stock units, performance shares and units, or other share-denominated or cash awards to eligible individuals. For purposes of Section 162(m), the material terms are (1) the employees eligible to receive compensation, (2) a description of the business criteria on which the performance objective is based, and (3) either the maximum amount of compensation that could be paid to any employee or the formula used to calculate the amount of compensation to be paid to the employee if the performance objective is attained. Material terms are described in theSummary of the Amended 2007 Planbelow. Notice of Annual Meeting and Proxy Statement  |  56 Proposal 6 – Approval of Material Terms of Performance Objectives under 2007 Omnibus Incentive Plan, as amended   Text of Amendment to 2007 Plan On February 22, 2012, in connection with the five-year approval requirement of Section 162(m), the Board adopted, upon recommendation of the Compensation Committee and subject to shareholder approval, an amendment to the 2007 Plan to change the annual limit on Qualified Performance-Based Awards in the form of Performance Units or other awards substantially similar to Performance Units from $7.5 million to $10 million. If shareholders approve this proposal, the text of Section 3(c)(iii) of the 2007 Plan would be amended by adding the amount indicated in underlined text (and deleting the amount indicated in strikethrough text) as follows: For grants of Qualified Performance-Based Awards, no Participant shall be granted Performance Units, or other awards granted pursuant to Section 10 of this Plan with rights which are substantially similar to Performance Units, in the aggregate for more than$7,500,000$10,000,000 during any calendar year. Summary of the Amended 2007 Plan Shares Authorized under the Amended 2007 Plan. As of March 16, 2012, there were 135,979,303 shares of common stock remaining available for issuance under the Amended 2007 Plan. Any shares underlying full-value awards are counted against the foregoing share limit on a 2.5-to-1 ratio and those underlying any other award are counted against the share limit on a 1-1 ratio. If any stock option or SAR granted under the Amended 2007 Plan or the predecessor plans expires or is forfeited without being fully exercised, or is settled in cash, the shares subject to those awards will again be available for grant under the Amended 2007 Plan. If any full-value award granted under the Amended 2007 Plan or the predecessor plans is forfeited or settled in cash, the shares subject to those awards will again be available for grant under the Amended 2007 Plan on a 2.5-to-1 ratio. For example, if 100 RSUs are forfeited, 250 shares will become available under the Amended 2007 Plan. Shares surrendered for the payment of the exercise price under stock options or SARs, or withheld for taxes upon exercise or vesting of an award, will not again be available for issuance under the Amended 2007 Plan. In addition, when a SAR is exercised and settled in shares, all of the shares underlying the SAR will be counted against the Amended 2007 Plan limit regardless of the number of shares used to settle the SAR. Administration and Term of the Amended 2007 Plan.The selection of employee participants in the Amended 2007 Plan and the level of participation of each participant are determined by the Compensation Committee, except that our full board makes these determinations as to outside directors. To comply with applicable securities and tax laws and rules of the NYSE, the Compensation Committee must be comprised of two or more individuals, each of whom must be a “non-employee director” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, an “outside director” within the meaning of Section 162(m), and an “independent director” within the meaning of the rules of the NYSE. Currently, the Compensation Committee is comprised of three directors who satisfy each of these rules and requirements. The Compensation Committee has the authority to, among other things, interpret the Amended 2007 Plan, to establish and revise rules and regulations relating to the Amended 2007 Plan, and to make any other determinations that it believes necessary or advisable for the administration of the Amended 2007 Plan. The Compensation Committee may delegate any or all of its authority to administer the Amended 2007 Plan as it deems appropriate, except that no delegation may be made to executive officers in the case of awards intended to be qualified under Section 162(m). Notice of Annual Meeting and Proxy Statement  |  57 Proposal 6 – Approval of Material Terms of Performance Objectives under 2007 Omnibus Incentive Plan, as amended   No new awards may be granted under the Amended 2007 Plan after May 8, 2017. The Amended 2007 Plan may be terminated earlier by our board. Eligibility.From time to time, the Compensation Committee, or as to outside directors the full board, determines who will be granted awards, the number of shares or performance units subject to such grants, and the terms of awards. Under the Amended 2007 Plan, awards may be granted to our employees (approximately 39,539, as of March 16, 2012), our outside directors (nine, as of March 16, 2012), and other individuals providing services to us, including but not limited to consultants, advisors, and independent contractors (approximately 72,888 as of March 16, 2012). Performance Criteria. The management objectives applicable to any qualified performance-based award may be based on specified levels of or growth in one or more of the following criteria: — net sales; — revenue; — revenue growth or product revenue growth; — operating income (before or after taxes, including operating income before depreciation and amortization); — income (before or after taxes and before or after allocation of corporate overhead and bonus); — net earnings; — earnings per share; — net income (before or after taxes); — return on equity; — total stockholder return; — return on assets or net assets; — appreciation in and/or maintenance of share price; — market share; — gross profits; — earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization); — economic value-added models or equivalent metrics; — reductions in costs; — cash flow or cash flow per share (before or after dividends); — return on capital (including return on total capital or return on invested capital); — cash flow return on investment; — improvement in or attainment of expense levels or working capital levels; — operating, gross, or cash margins; — year-end cash; — debt reductions; — stockholder equity; — regulatory achievements; — operating performance; — market expansion; — customer acquisition; — customer satisfaction; — employee satisfaction; — implementation, completion, or attainment of measurable objectives with respect to research, development, products or projects, and recruiting and maintaining personnel; or Notice of Annual Meeting and Proxy Statement  |  58 Proposal 6 – Approval of Material Terms of Performance Objectives under 2007 Omnibus Incentive Plan, as amended   — a published or a special index deemed applicable by the Compensation Committee or any of the above criteria as compared to the performance of any such index, including, but not limited to, the Dow Jones U.S. Telecom Index. Participant Limits.In addition to the annual limit on grants of Performance Units that are Qualified Performance Based Awards that was amended as described above, the Plan limits the number of shares underlying grants of (1) Option Rights or Appreciation Rights to 5,000,000 per calendar year, and (2) Qualified Performance Based Awards that are Restricted Stock, Restricted Stock Units, Performance Shares or other awards granted pursuant to Section 10 of the Plan to 2,500,000 per calendar year. Stock Options and Stock Appreciation Rights.The Compensation Committee determines the terms of each stock option grant at the time of the grant. Stock options granted under the Amended 2007 Plan may be either non-qualified stock options or ISOs qualifying under Section 422 of the Code. The exercise price of any stock option granted may not be less than the market value of our shares (i.e., the closing price on the NYSE, which as of March 16, 2012 was $2.89) on the date the option is granted. The exercise price is payable in cash, by delivery of shares of our common stock, or other methods approved by the Compensation Committee. No stock option will authorize the payment of dividend equivalents or be exercisable for a period of more than ten years from the date of grant. ISOs granted to a 10% shareholder must have an option price at least 110% of the Stock’s FMV at grant, (2) can only be granted to employees, and (3) have an exercise period of no more than 5 years. SARs may be granted in tandem with stock options or may be freestanding. The Compensation Committee determines the terms of each SAR at the time of the grant. No SAR may be granted at less than the market value of our shares on the date that the SAR is granted nor have a term of longer than ten years. Distributions to a holder of a SAR may be made in shares of our common stock, in cash or in a combination of both. No SAR will authorize the payment of dividend equivalents. Subject to adjustment as described under “Adjustment” below, the Amended 2007 Plan does not permit “repricing” of stock options or SARs without the approval of our shareholders, except repricing was permitted under an amendment approved by our shareholders in 2010 for a one-time-only value-for-value option exchange offer. Restricted Stock.Restricted stock may not be disposed of by the participant until certain restrictions established by the Compensation Committee lapse. Restricted stock may be issued for such consideration as the Compensation Committee determines, including no consideration other than the rendering of services. The holder of restricted stock has all of the rights of a shareholder, including the right to vote shares and the right to receive dividends or other distributions. Restricted Stock Units.An RSU represents the right for the participant to receive one share of our common stock from us or cash at a particular date in the future. Unlike the holder of restricted stock, the holder of an RSU has none of the rights of a holder of any shares of our common stock underlying the RSU until the shares are delivered, but the Compensation Committee may authorize the payment of dividend equivalents on RSUs. Performance Shares and Performance Units.A performance share is the equivalent of one share of our common stock and a performance unit is the equivalent of $1.00 or another amount determined by the Compensation Committee. Performance shares and performance units may be paid in cash, shares of our common stock, restricted stock, RSUs, or any combination thereof. Performance shares and performance units will be subject to terms and conditions that the Compensation Committee deems advisable or appropriate, consistent with the provisions of the Amended 2007 Plan. The management objectives and performance levels to be achieved for each performance period and the amount of the award to be distributed will be determined by the Compensation Committee. Notice of Annual Meeting and Proxy Statement  |  59 Proposal 6 – Approval of Material Terms of Performance Objectives under 2007 Omnibus Incentive Plan, as amended   Other Awards.The Amended 2007 Plan also permits grants of awards valued in whole or in part by reference to, or otherwise based on, (1) shares of our common stock or factors that may influence the value of such shares, including convertible or exchangeable debt securities, other rights convertible or exchangeable into shares of our common stock, awards with value and payment contingent upon performance of our company or specified subsidiaries, affiliates, or other business units, or any other factors designated by the Compensation Committee, and awards valued by reference to the book value of shares of our common stock or the value of securities of, or the performance of specified subsidiaries, affiliates or other business units of ours; (2) cash; or (3) any combination of the foregoing. The Compensation Committee determines the terms and conditions of such awards, which may include the achievement of management objectives. Payment of Outside Directors’ Fees in Common Stock.The Amended 2007 Plan provides that, in lieu of cash payments, outside directors may elect to receive all or part of their annual retainer and their meeting and committee meeting fees in shares of our common stock. The price at which outside directors may acquire shares of stock is the market value of our shares on the last trading day of the quarter in which the fees are earned. In addition, outside directors may elect annually to defer receipt of such common stock. Shares deferred under this election are transferred by us to a trust, which holds the shares until the outside director’s termination of board service. The outside directors also may elect annually to receive payment out of the trust in a lump sum or installments and in shares of our common stock or cash. During the period the shares are held in trust, the outside director has voting rights with respect to the shares and the trustee reinvests the dividends on the shares in additional shares of our common stock. The trust is subject to the claims of creditors of our company. Adjustment.  In the event of any change in the number or kind of outstanding shares of our common stock by reason of a recapitalization, merger, consolidation, reorganization, separation, liquidation, stock split, stock dividend, combination of shares, or any other change in our corporate structure or shares of our common stock, an appropriate adjustment will be made consistent with applicable provisions of the IRC and applicable Treasury Department rulings and regulations: — In the number and kind of shares for which awards may be granted, when an optionee exercisesboth in the aggregate and the individual limitations each calendar year; — In the number and kind of shares subject to outstanding awards; — In the exercise price of a stock option or base price of a SAR; and — Other adjustments as the board deems appropriate. Change in Control.Unless otherwise provided in an award agreement, if there is a change in control of us (as defined in the Amended 2007 Plan) and the resulting entity assumes, converts or replaces the outstanding awards under the Amended 2007 Plan, the awards will become fully vested only upon the participant’s involuntary termination of employment without cause, or resignation with good reason for certain executives, in connection with the change in control. On the other hand, if the resulting entity does not assume, convert or replace awards outstanding under the Amended 2007 Plan, the awards will become fully vested and no longer be subject to any restrictions, and any management objectives will be deemed to have been satisfied at target. If the acceleration of vesting of outstanding awards, together with all other payments or benefits contingent on the change in control within the meaning of Section 280G of the IRC, results in any portion of the payment or benefits not being deductible by us as a result of the application of Section 280G, the benefits will be reduced until the entire amount of the benefits is deductible, unless a participant’s employment agreement or other arrangement with us provides otherwise. Notice of Annual Meeting and Proxy Statement  |  60 Proposal 6 – Approval of Material Terms of Performance Objectives under 2007 Omnibus Incentive Plan, as amended   Transferability.  Awards made under the Amended 2007 Plan are generally not transferable by our employees except by will or the laws of descent and distribution. Our board or the Compensation Committee may permit transfers of awards to any one or more family members. Amendment and Termination.  Our board may amend or terminate the Amended 2007 Plan, but may not, without prior approval of our shareholders: — Increase the number of shares of our common stock that may be issued under the Amended 2007 Plan, except as described under “Adjustment” above; or — Otherwise modify the Amended 2007 Plan in circumstances in which such approval is required under rules of the NYSE or, if the shares of our common stock are not traded on the NYSE, the principal national securities exchange upon which the shares are traded. Federal Income Tax Consequences The following is a brief summary of some of the federal income tax consequences of certain transactions under the Plan based on federal income tax laws in effect. This summary is not intended to be complete and does not describe state or local tax consequences. Tax Consequences to Participants Non-Qualified Stock Options.  In general, (1) no income will be recognized by an optionee at the time a non-qualified stock option is granted; (2) at the time of exercise of a non-qualified stock option, taxable ordinary income will be recognized by the optionee in an amount equal to the difference between the option price paid for the shares and the fair market value of the shares, if unrestricted, on the date of exercise; and (3) at the time of a taxable disposition of shares acquired pursuant to the exercise of a non-qualified stock option, appreciation (or depreciation) in value of the shares after the date of exercise will be treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held. Incentive Stock Options.  No income generally will be recognized by an optionee upon the grant or exercise of an ISO. The exercise of an ISO, however, may result in alternative minimum tax liability. If common shares are issued to the optionee pursuant to the exercise of an ISO, and if no disqualifying disposition of such shares is made by such optionee within two years after the date of grant or within one year after the transfer of such shares to the optionee, then upon sale of such shares, any amount realized in excess of the option price will be taxed to the optionee as a long-term capital gain and any loss sustained will be a long-term capital loss. If common shares acquired upon the exercise of an ISO are disposed of prior to the expiration of either holding period described above, the optionee generally will recognize taxable ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at the time of exercise (or, if less, the amount realized on the disposition of such shares if a sale or exchange) over the option price paid for such shares. Any further gain (or loss) realized by the participant generally will be taxed as short-term or long-term capital gain (or loss) depending on the holding period. SARs.  No income will be recognized by a participant in connection with the grant of a tandem SAR or a free-standing SAR. When the SAR is exercised, the participant normally will be required to include as taxable ordinary income in the year of exercise an amount equal to the amount of cash received and the fair market value of any unrestricted common shares received on the exercise. Notice of Annual Meeting and Proxy Statement  |  61 Proposal 6 – Approval of Material Terms of Performance Objectives under 2007 Omnibus Incentive Plan, as amended   Restricted Stock. The recipient of restricted stock generally will be required to include taxable ordinary income the fair market value of the restricted stock (reduced by any amount paid by the participant for such restricted stock) at such time as the shares are no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Internal Revenue Code (“Restrictions”). However, a recipient who so elects under Section 83(b) of the Internal Revenue Code within 30 days of the date of transfer of the shares will have taxable ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the Restrictions) over the purchase price, if any, of such restricted stock. If a Section 83(b) election has not been made, any dividends received with respect to restricted stock that is subject to the Restrictions generally will be treated as compensation that is taxable as ordinary income to the participant. RSUs. No income generally will be recognized upon the award of RSUs. Upon payment in respect of a RSU award, the recipient generally will be required to include taxable ordinary income in the year of receipt an amount equal to the fair market value of unrestricted common shares on the date that such shares are transferred to the participant under the award (reduced by any amount paid by the participant for such RSUs), and the capital gains/loss holding period for such shares will also commence on such date. Performance Shares and Performance Units. No income generally will be recognized upon the grant of performance shares or performance units. Upon payment in respect of the earn-out of performance shares or performance units, the recipient generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash received and the fair market value of any unrestricted common shares received. Tax Consequences to Us To the extent that a participant recognizes taxable ordinary income in the circumstances described above, we or the subsidiary for which the participant performs services will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code and is not disallowed by the $1 million limitation on certain executive compensation under Section 162(m) of the Internal Revenue Code. Plan Benefits.The amount and timing of awards granted under the Amended 2007 Plan will be determined in the sole discretion of the Compensation Committee and therefore cannot be determined in advance. The future awards that would be received under the Amended 2007 Plan by our executive officers and other employees are discretionary and are therefore not determinable at this time. EQUITY COMPENSATION PLAN INFORMATION Currently, we sponsor two active equity incentive plans, the Amended 2007 Plan and our Employee Stock Purchase Plan (ESPP). We also sponsor the 1997 Long-Term Incentive Program (1997 Program); the Nextel Incentive Equity Plan (Nextel Plan) and the Management Incentive Stock Option Plan (MISOP). Under the Amended 2007 Plan, we may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other equity-based and cash awards to our employees, outside directors and certain other service providers. The Compensation Committee of our board of directors, or one or more executive officers should the Compensation Committee so authorize, will determine the terms of each award. No new grants can be made under the 1997 Program, the Nextel Plan or the MISOP. The following table provides information about the shares of Series 1 common stock that may be issued upon exercise of awards as of December 31, 2011. Notice of Annual Meeting and Proxy Statement  |  62 Proposal 6 – Approval of Material Terms of Performance Objectives under 2007 Omnibus Incentive Plan, as amended   Plan Category        Number of Securities To be Issued Upon Exercise of Outstanding Options, Warrants and Rights      Weighted Average Exercise Price of Outstanding Options, Warrants and Rights     Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans     (Excluding Securities Reflected in Column (a)       Equity compensation plans approved by shareholders of common stock      77,251,737(1)(2)         $7.95 (3)      241,898,766(4)(5)(6)(7)        Equity compensation plans not approved by shareholders of common stock      2,562,544(8)             $13.24        —                              Total      79,814,281                        241,898,766                (1) Includes 48,943,148 shares covered by options and 13,068,827 restricted stock units under the Amended 2007 Plan, 9,089,398 shares covered by options and 41,607 restricted stock units outstanding under the 1997 Program and 4,602,844 shares covered by options outstanding under the MISOP. Also includes purchase rights to acquire 1,505,913 shares of common stock accrued at December 31, 2011 under the ESPP. Under the ESPP, each eligible employee may purchase common stock at quarterly intervals at a purchase price per share equal to 95% of the market value on the last business day of the offering period. (2) Included in the total of 77,251,737 shares are13,068,827 restricted stock units under the Amended 2007 Plan, which will be counted against the Amended 2007 Plan maximum in a 2.5 to 1 ratio. (3) The weighted average exercise price does not take into account the shares of common stock issuable upon vesting of restricted stock units issued under the 1997 Program or the Amended 2007 Plan. These restricted stock units have no exercise price. The weighted average purchase price also does not take into account the 1,505,913 shares of common stock issuable as a result of the purchase rights accrued under the ESPP; the purchase price of these shares was $2.21 for each share. (4) Of these shares, 164,914,846 shares of common stock were available under the Amended 2007 Plan. Through December 31, 2011, 120,877,297 cumulative shares of common stock came from the 1997 Program, the Nextel Plan and the MISOP. (5) Includes 76,983,920 shares of common stock available for issuance under the ESPP after issuance of the 1,505,913 shares purchased in the fourth quarter 2011 offering. See footnote 1 above. (6) No new awards may be granted under the 1997 Program or the Nextel Plan. (7) No new options may be granted under the MISOP, and, therefore, this figure does not include any shares of our common stock that may be issued under the MISOP. Most options outstanding under the MISOP, however, grant the holder the right to receive additional options to purchase our common stock if the holder, when exercising a MISOP option, makes payment of the purchase price using shares of previously owned FON Stock or PCS Stock. A reloadstock. The additional option grant is forgives the holder the right to purchase the number of shares of our common stock utilized in payment of the purchase price and tax withholding, if any.withholding. The optionexercise price for a reloadthis option is equal to the market price of FON Stock or PCS Stockthe stock on the date the reload option is granted. A reloadgranted, and this option becomes exercisable one year from the date the original option was exercised andis exercised. This option does not haveinclude a reload feature. Sprint grantedright to receive additional options. (8) Consists of 2,562,544 options outstanding under the Nextel Plan. There are no stock appreciation rights during 2002. Option Grants in Last Fiscal Yeardeferred shares outstanding under the Nextel Plan. FON Stock Options Name    Number of Securities Underlying Options Granted (#)        % of Total Options Granted to Employees In Fiscal Year      Exercise Or Base Price ($/Sh)    Expiration Date    Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term(1)                  0%    5%    10% William T. Esrey    147,622 (3)      0.8 %    12.97    2/19/12    0    $ 1,203,654    $ 3,050,294      173,127 (4)      0.9 %    14.43    2/11/12    0      1,571,119      3,981,523      95,584 (5)      0.5 %    12.97    2/19/12    0      779,356      1,975,040 J. Richard Devlin    87,500 (2)      0.5 %    12.97    2/19/12    0      713,442      1,808,001      30,031 (3)      0.2 %    12.97    2/19/12    0      244,861      620,527      28,586 (4)      0.2 %    14.43    2/11/12    0      259,417      657,412      18,342 (5)      0.1 %    12.97    2/19/12    0      149,554      378,998 Michael B. Fuller    164,400 (2)      0.8 %    12.97    2/19/12    0      1,340,455      3,396,976      54,600 (2)      0.3 %    15.59    2/19/12    0      532,376      1,347,553      52,454 (3)      0.3 %    12.97    2/19/12    0      427,690      1,083,850      11,595 (3)      0.1 %    15.59    2/19/12    0      113,057      286,170      32,133 (5)      0.2 %    12.97    2/19/12    0      262,000      663,960 Len J. Lauer    150,700 (2)      0.8 %    12.97    2/19/12    0      1,228,750      3,113,895      50,050 (2)      0.3 %    15.59    2/19/12    0      488,011      1,235,257      48,083 (3)      0.3 %    12.97    2/19/12    0      392,050      993,533      10,628 (3)      0.1 %    15.59    2/19/12    0      103,628      262,304      40,262 (4)      0.2 %    14.43    2/11/12    0      365,376      925,934 Ronald T. LeMay    94,307 (3)      0.5 %    12.97    2/19/12    0      768,943      1,948,653      103,876 (4)      0.5 %    14.43    2/11/12    0      942,669      2,388,909      66,651 (5)      0.3 %    12.97    2/19/12    0      543,447      1,377,201 Option Grants in Last Fiscal Year PCS Stock Options Name    Number of Securities Underlying Options Granted (#)        % of Total Options Granted to Employees In Fiscal Year      Exercise Or Base Price ($/Sh)    Expiration Date    Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term(1)                  0%    5%    10% William T. Esrey    147,622 (3)      0.7 %    8.90    2/19/12    0    $ 826,264    $ 2,093,916      132,630 (4)      0.6 %    12.40    2/11/12    0      1,034,288      2,621,088      95,584 (5)      0.4 %    8.90    2/19/12    0      534,999      1,355,793 J. Richard Devlin    87,500 (2)      0.4 %    8.90    2/19/12    0      489,752      1,241,127      30,031 (3)      0.1 %    8.90    2/19/12    0      168,088      425,969      21,899 (4)      0.1 %    12.40    2/11/12    0      170,775      432,777      18,342 (5)      0.1 %    8.90    2/19/12    0      102,663      260,169 Michael B. Fuller    164,400 (2)      0.8 %    8.90    2/19/12    0      920,173      2,331,900      54,600 (2)      0.2 %    10.87    2/19/12    0      371,143      939,439      52,454 (3)      0.2 %    8.90    2/19/12    0      293,594      744,024      11,595 (3)      0.1 %    10.87    2/19/12    0      78,817      199,502      32,133 (5)      0.1 %    8.90    2/19/12    0      179,854      455,784 Len J. Lauer    150,700 (2)      0.7 %    8.90    2/19/12    0      843,492      2,137,575      50,050 (2)      0.2 %    10.87    2/19/12    0      340,214      861,153      48,083 (3)      0.2 %    8.90    2/19/12    0      269,128      682,024      10,628 (3)      0.0 %    10.87    2/19/12    0      72,244      182,864      30,844 (4)      0.1 %    12.40    2/11/12    0      240,531      609,552 Ronald T. LeMay    94,307 (3)      0.4 %    8.90    2/19/12    0      527,852      1,337,680      79,578 (4)      0.4 %    12.40    2/11/12    0      620,573      1,572,653      66,651 (5)      0.3 %    8.90    2/19/12    0      373,056      945,398 (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’s common stock. (2) This annual executive stock option grant vests 25% on each of February 19, 2003, February 19, 2004, February 19, 2005, and February 19, 2006. Mr. Esrey and Mr. LeMay were not entitled to an annual executive stock option grant in 2002 because of a special grant of options made in 2001 as consideration for entering into employment contracts. The contracts provide that the grants of the options to Mr. Esrey and Mr. LeMay in 2001 were in lieu of annual executive stock option grants for 2002 and 2003, and, unless otherwise determined by the Compensation Committee, they would not be entitled to annual executive stock option grants in those years. The terms of these contracts are further described in the Employment Contracts section of this proxy statement. (3) This option was granted under the MISOP in lieu of a payment under Sprint’s long-term incentive plan. The option vests 100% on December 31, 2004. (4) This option was granted under the MISOP. Under the MISOP, the optionee elected to receive options in lieu of receiving a portion of his bonus under the management incentive compensation plan. This option vested 100% on December 31, 2002. (5) In 2002, the Compensation Committee exercised its discretion to increase the payout for employees other than the Named Officers and certain other executive officers under Sprint’s short-term incentive plan. The increase was from 7.6% of target to 75% of target and related to the local telecommunications division’s financial objectives in 2001. The action was warranted because, in comparing the division’s performance to its peers, Sprint’s local telecommunications division had relatively strong results on key financial measurements such as operating income growth, even though it did not meet the aggressive financial targets established. This special grant of options was made to those executive officers who did not receive this increase. The option vested 100% on March 15, 2002. Option exercises and fiscal year-end values Shareholder Approval The affirmative vote of the majority of the votes cast by holders of our shares present in person or represented by proxy at the Annual Meeting will result in the approval of the material terms of the performance objectives, as amended, under the Amended 2007 Plan. In addition, NYSE rules require that the total votes cast on the approval of the Amended 2007 Plan represent greater than 50% of the shares outstanding as of the record date. Our Board of Directors recommends that you vote “FOR” Proposal 6. Notice of Annual Meeting and Proxy Statement  |  63   The following tables summarize the net value realized on the exercise of options in 2002, and the value of options outstanding at December 31, 2002, for the Named Officers.Proposal 7 – Shareholder Proposal to Adopt a Bonus Deferral Policy PROPOSAL 7. SHAREHOLDER PROPOSAL TO ADOPT A BONUS DEFERRAL POLICY (Item 7 on Proxy Card) The AFL-CIO Reserve Fund, 815 Sixteenth Street, N.W., Washington D.C., 20006, owner of 2,184 shares of our common stock, has given notice of its intentions to introduce the following resolution at the annual meeting. The shareholder proposal and supporting statement appear as received by us and we are not responsible for its contents. Following the shareholder proposal is our response. RESOLVED: Shareholders of Sprint Nextel Corporation (the “Company”) urge the Compensation Committee to adopt the following bonus deferral policy for senior executives in order to promote a more long-term perspective:   Aggregated Option Exercises in 2002 1. Any discretionary bonus and Year-end Option Values FON Stock        Shares Acquired on Exercise (#)      Value Received ($)    Number of Securities Underlying Unexercised Options at 12/31/02    Value of Unexercised In the Money Options At 12/31/02(1)                    Exercisable (#)    Unexercisable (#)    Exercisable ($)      Unexercisable ($) William T. Esrey      0      0    7,914,236    2,637,055    153,466      223,647 J. Richard Devlin      0      0    743,871    254,622    29,217      178,059 Michael B. Fuller      0      0    834,821    507,736    48,681      328,534 Len J. Lauer      0      0    323,846    451,104    2,013      301,156 Ronald T. LeMay      0      0    3,719,554    2,203,343    106,170      142,875 Aggregated Option Exercises in 2002 and Year-end Option Values PCS Stock        Shares Acquired on Exercise (#)      Value Received ($)    Number of Securities Underlying Unexercised Options at 12/31/02      Value of Unexercised In the Money Options At 12/31/02(1)                    Exercisable (#)    Unexercisable (#)      Exercisable ($)      Unexercisable ($) William T. Esrey      0      0    4,074,575    2,442,055      4,675      0 J. Richard Devlin      0      0    388,863    214,949      0      0 Michael B. Fuller      0      0    260,563    411,284      0      0 Len J. Lauer      0      0    162,413    371,535      0      0 Ronald T. LeMay      0      0    1,113,095    2,081,468      0      0 (1) The value of unexercised, in-the-money options is the number of shares underlying options times the difference between the exercise price of the options and the fair market value, at December 31, 2002, of FON Stock ($14.48) and PCS Stock ($4.38). Pension plans Under the Sprint Retirement Pension Plan, eligible employees generally accrue for each year of service a retirement benefit equal to 1.5% of career average compensation, subject to limitationsany payment under the Internal Revenue Code. In addition, the Named Officers participateCompany’s Short-Term Incentive Compensation Plan (a “Bonus”) that is based on financial measurements (a “Financial Metric”) whose performance measurement period is one year or shorter shall not be paid in a supplemental retirement plan that provides additional benefits. Assuming each of the Named Officers continues to work at Sprint until age 65 and that his pensionable compensation for years after 2002 will be his 2002 pensionable compensation, the Named Officers would receive an estimated annual pension benefit, expressed as an annuity for life, as follows: Mr. Esrey—$1,294,700, Mr. Devlin—$310,300, Mr. Fuller—$276,900, Mr. Lauer—$322,300, and Mr. LeMay—$680,700. In addition, Sprint has a key management benefit plan that permits a participant to elect a supplemental retirement benefit. More information on the plan is provided in the following section under “Employment Contracts.” Employment contracts Employment contracts with Mr. Esrey and Mr. LeMay.In 2001 Sprint entered into employment contracts with Mr. Esrey and Mr. LeMay which superceded previously disclosed agreements between Sprint and each of Messrs. Esrey and LeMay. Mr. Esrey agreed in his employment contract to comply with various covenants protecting Sprint’s interests including noncompetition. The employment contract provides severance benefits to Mr. Esreyfull for a period of up to 18 months if, before a change in control of Sprint, Sprint terminates his employment without cause or he resigns due to a serious diminution in his responsibilities, authority, or compensation while employed by Sprint. His employment contract also obligates Mr. Esrey to provide up to 30 days per year of consulting servicesthree years (a “Deferral Period”) following a termination of his employment at a per diem rate for the days he provides services based on his salary at the time of his termination. For the first 10 yearsend of the post-retirement consulting arrangement, Sprint agrees to provide Mr. Esrey access to facilities and services comparable to those provided him during his employment (including office and secretarial support, useperformance measurement period; 2. The Compensation Committee shall develop a methodology for (a) determining what proportion of the company aircraft, communications services, and two club memberships). Thereafter, and fora Bonus should be paid immediately, (b) adjusting the remainder of Mr. Esrey’s life, Sprint is onlythe Bonus over the Deferral Period to reflect performance on the Financial Metric(s) during the Deferral Period and (c) paying out the remainder of the Bonus, adjusted if required, during and at the end of the Deferral Period; and 3. The adjustment(s) described above should not require achievement of new performance goals but should focus on the quality and sustainability of the performance on the Financial Metric(s) during the Deferral Period. The Policy should be implemented so as not to violate any existing contractual obligation of the Company or the terms of any compensation or benefit plan currently in effect. It should not have the effect of reducing amounts awarded or earned before the adoption of the policy. Shareholder’s Supporting Statement As long-term shareholders, we support executive compensation policies that promote the creation of sustainable value. We are concerned that short-term incentive compensation plans can encourage senior executives to manage for the short-term and take on excessive risk. The recent Wall Street financial crisis illustrates what can happen when executives are rewarded for short-term performance without any effort to ensure that the performance is sustainable. In 2010, Company CEO and President Daniel Hesse received more than $2.3 million under the Short-Term Incentive Compensation Plan. This bonus amount is nearly double his base salary of $1.2 million. The Compensation Committee used two six-month performance periods to award these 2010 bonus payouts. We are concerned that a six-month performance period gives senior executives “two bites at the apple” to meet their short-term performance goals over a year. This proposal urges that the Compensation Committee adopt a bonus deferral policy to encourage a longer-term orientation for senior executives. Specifically, the proposal asks that the Compensation Committee develop a system for holding back some portion of each bonus based on short-term financial metrics for a period of three years and adjusting the unpaid portion to account for performance during that three-year period. The Compensation Committee would have discretion to set the precise terms and mechanics of this process. For these reasons, we urge you to vote FOR this proposal. Notice of Annual Meeting and Proxy Statement  |  64 Proposal 7 – Shareholder Proposal to provide Mr. EsreyAdopt a Bonus Deferral Policy Our Response to the Shareholder Proposal Our Board believes that our executive compensation program already properly promotes our named executive officers’ longer term perspective by the weight given to awards under our LTIC plan. While a named executive officers’ STIC plan payout can at times be significant relative to his base salary, our named executive officers’ STIC plan opportunities represents the smaller portion of their total incentive compensation opportunities. As explained more fully in “Executive Compensation—Compensation Discussion and Analysis,” value under the majority of LTIC plan awards to our named executive officers is realized only to the extent of our performance on longer-term business objectives. Moreover, one-half of the awards under the LTIC plan continue to be in the form of equity with three-year vesting periods, at any given time providing significant incentive for our named executive officers to build long-term shareholder value. This weighting of compensation tied to the Company’s stock, therefore, accomplishes the proponent’s objective for creating sustainable value because the value of the equity awards realized by a named executive officer in future years will be reduced if the Company’s performance, as reflected in the trading price of its common stock, declines. Additionally, our stock ownership guidelines require our CEO to own a number of shares equal to five times his base salary and each of our other named executive officers to own sufficient shares to equal three times their base salaries. These requirements further align the interests of our named executive officers with the long-term interests of shareholders. We disagree with the proponent’s assertion, without explanation, that short-term incentive plans encourage nearsighted management and excessive risk-taking, and we take issue with the “one-size-fits-all” approach called for under the proposal. In particular, our STIC plan performance objectives and accompanying targets are designed to build year-over-year improvements and sustainability in our growth. The proponent’s reference to the recent Wall Street financial crisis, therefore, is irrelevant to assessing risk under our incentive compensation plans. Indeed, as more fully described in the “Executive Compensation—Relationship of Compensation Practices to Risk Management,” we believe our incentive compensation plans, including the STIC plan, are not reasonably likely to have a material adverse effect on the Company by increasing the likelihood of excessive risk taking. Finally, as described in the “Executive Compensation—Compensation Discussion and Analysis,” the two six-month performance periods under prior STIC plans, characterized by the proponent as “two bites at the apple,” was believed to be necessary for us as we work to turn around our Company in the midst of tough economic times and a volatile telecommunications market. The change in our STIC plan design for 2012 to establish a single annual performance period, however, has already addressed the proponent’s concern. Our Board of Directors recommends that you vote “AGAINST” Proposal 7. Notice of Annual Meeting and Proxy Statement  |  65 Proposal 8 – Shareholder Proposal Concerning Political Contributions PROPOSAL 8. SHAREHOLDER PROPOSAL CONCERNING POLITICAL CONTRIBUTIONS (Item 8 on Proxy Card) The New York City Employees’ Retirement System; the New York City Teachers’ Retirement System; the New York City Fire Department Pension Fund; the New York City Police Pension Fund; and the New York City Board of Education Retirement System, 1 Centre Street, New York, NY 10007-2341, owners of 2,723,349; 2,659,202; 434,565; 1,437,903; and 137,616 shares of our common stock, respectively, have given notice of their intention to introduce the following resolution at the annual meeting. The shareholder proposal and the supporting statement appear as received by us and we are not responsible for its contents. Following the shareholder proposal is our response. Resolved, that the shareholders of Sprint Nextel (“Company”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s: 1. Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds. 2. Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of(or in opposition to) any candidate for public office, and secretarial support.used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include: a. An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and b. The title(s) of the person(s) in the Company responsible for the decision(s) to make the political contributions or expenditures. The report shall be presented to the board of directors or relevant board oversight committee and posted on the Company’s website. Shareholder Supporting Statement As long-term shareholders of Sprint Nextel, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates. Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with federal ethics laws. Moreover, the Supreme Court’sCitizens United decision recognized the importance of political spending disclosure for shareholders when it said “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value. Sprint Nextel contributed at least $5.2 million in corporate funds since the 2002 election cycle. (CQ: http://moneyline.cq.com/pml/home.do and National Institute on Money in State Politics: http://www.followthemoney.orglindex.phtml.) Notice of Annual Meeting and Proxy Statement  |  66   Mr. LeMay’s employment contractProposal 8 – Shareholder Proposal Concerning Political Contributions However, relying on publicly available data does not provide a complete picture of the Company’s political spending. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In some cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax exempt organizations used for political purposes. This would bring our Company in line with a growing number of leading companies, including Exelon, Merck and Microsoft that support political disclosure and accountability and present this information on their websites. The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform. Our Response to the Shareholder Proposal Sprint shares the proponent’s support for transparency and accountability in corporate spending on political activities. To that end, we have been responsive to input from our shareholders by publishing late last year a report on our 2010 political contributions. The report, available on our website at http://www.sprint.com/responsibility/gov-ethics-policy/contributions.html, not only lists our contributions to political candidates during 2010, it also describes the processes and oversight used in connection with such contributions. We intend to publish this report annually. The information contained in or accessible though our website is not part of this Proxy Statement. While agreeing with the policy espoused by the proposal, we take issue with its overly prescriptive nature. For example, the proposal calls for us to identify the persons responsible for political contributions. We believe our published report’s description of the process and oversight provided by the Nominating Committee is an appropriate best practice followed by many other companies. Government policies and regulation have a significant impact on our business. It is important that we be able to advocate effectively for public policies that support our business objectives, our ability to compete fairly in the marketplace, and candidates who share our public policy views. We believe our level of transparency has been equal to, or in excess of, that of our competitors. Parties with interests adverse to us, sometimes with significantly more resources than us to expend on political advocacy, also participate in the political process to their business advantage. Any unilateral expanded disclosure could benefit those parties while harming our interests and the interests of our shareholders. Our Board of Directors recommends that you vote “AGAINST” Proposal 8. Notice of Annual Meeting and Proxy Statement  |  67 General Information   GENERAL INFORMATION Information Regarding Solicitation Mailing Date: On or about April [], 2012, we mailed to our shareholders entitled to vote at the meeting the Notice or, for shareholders who have already requested to receive printed materials, this proxy statement, the accompanying proxy card and the annual report on Form 10-K for the year ended December 31, 2011. Address of Principal Executive Offices: 6200 Sprint Parkway, Overland Park, Kansas 66251. Solicitation:These proxy materials are delivered in connection with the solicitation by our board of directors of proxies to be voted at our annual meeting of shareholders. Purpose of the Annual Meeting At the annual meeting, you will be asked to: — elect the ten directors named herein (Item 1 on the proxy card); — ratify the selection of the independent registered public accounting firm (Item 2 on the proxy card); — approve, on an advisory basis, our executive compensation (Item 3 on the proxy card); — approve an amendment to opt-out of the Kansas Business Combination Statute in our Articles of Incorporation (Item 4 on the proxy card); — approve an amendment to remove the Business Combination Provision from our Articles of Incorporation (Item 5 on the proxy card); — approve the material terms of performance objectives under our Amended 2007 Plan, (Item 6 on the proxy card); — vote on a shareholder proposal to adopt a bonus deferral policy, if presented at the meeting (Item 7 on the proxy card); — vote on a shareholder proposal concerning political contributions, if presented at the meeting (Item 8 on the proxy card); and — take action on any other business that properly comes before the meeting and any adjournment or postponement of the meeting. Record Date; Shareholders Entitled to Vote The close of business on March 16, 2012 has been fixed as the record date for the determination of shareholders entitled to notice of, and to vote at, the 2012 annual meeting or any adjournments or postponements of the 2012 annual meeting. As of the record date, we had 2,997,582,469 shares of our common stock outstanding. Each share of our common stock entitles the record holder to one vote on each matter presented at the 2012 annual meeting. A complete list of shareholders entitled to vote at the 2012 annual meeting will be available for examination by any shareholder at our Principal Executive Offices for purposes pertaining to the 2012 annual meeting during normal business hours for a period of ten days before the annual meeting and at the time and place of the annual meeting. “Street Name” and Broker Non-Votes You are a “record holder” if you hold our shares directly in your name through our transfer agent, Computershare Trust Company, N.A., as a shareholder of record. If you hold our shares through a broker, bank, financial institution, trust, or other nominee, then you are a holder of our shares in “street name.” If you hold your shares in “street name,” you must instruct the broker or other nominee about how to vote your shares. A broker “non-vote” occurs when a shareholder holding in “street name” fails to provide voting instructions to his or her broker or other nominee. Under the rules of the NYSE, if you do not provide such instructions, the firm that holds your shares will have discretionary authority to vote your shares with respect to “routine” matters. Of the nine items to be considered at our annual meeting, only the appointment of KPMG (Item 2) is considered “routine.” Those non-routine items for which a shareholder’s broker or other nominee does not have discretion to vote are treated as broker “non-votes.” Important:If you do not provide voting instructions to your broker or other nominee, your shares will not be voted or counted towards any of the items other than Item 2 (Appointment of KPMG). It is, therefore, Notice of Annual Meeting and Proxy Statement  |  68 General Information   particularly important that you instruct your brokers how you wish to vote your shares. Quorum 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. Votes Required Required Vote to Elect the Directors (Proposal 1; Item 1 on the Proxy Card) Each of the ten nominees for director will be elected as a director if the votes cast for each such nominee exceed the number of votes against that nominee, assuming that there is a quorum represented at the annual meeting. A summary of our majority voting standard appears on page 5 under “Proposal 1 – Election of Directors— Majority Voting.” Required Vote to Ratify the Appointment of KPMG as our Independent Registered Public Accounting Firm (Proposal 2; Item 2 on the Proxy Card) The affirmative vote of a majority of votes cast in person or by proxy by holders of our shares entitled to vote on the matter is required to ratify the appointment of KPMG as our independent registered public accounting firm for 2012. Required Vote to Approve, on an Advisory Basis, our Executive Compensation (Proposal 3; Item 3 on the Proxy Card) The affirmative vote of a majority of votes cast in person or by proxy by holders of our shares entitled to vote on the matter will constitute the shareholders’ non-binding approval with respect to our executive compensation. Our board will review the voting results and take them into consideration when making future decisions regarding executive compensation, but the results will not be binding on us. Required Vote to Approve Amendments to our Articles of Incorporation (Proposals 4 and 5; Item 4 and Item 5 on the Proxy Card) The affirmative vote of a majority of our outstanding shares entitled to vote at the annual meeting or any adjournment or postponement thereof, is required to approve the amendments described in Proposals 4 and 5. Required Vote to Approve Material Terms of Performance Objectives under our Amended 2007 Plan (Proposal 6; Item 6 on the Proxy Card) The affirmative vote of a majority of votes cast in person or by proxy by holders of our shares entitled to vote on the matter is required to approve this proposal. In addition, NYSE rules require that the total votes cast on this proposal represent greater than 50% of the shares outstanding as of the record date. Required Vote to Approve the Shareholder Proposals (Proposals 7-8; Items 7-8 on the Proxy Card) The affirmative vote of a majority of votes cast in person or by proxy by holders of our shares entitled to vote on the matter is required to approve the shareholder proposals, if presented at the annual meeting. Treatment of Abstentions, Not Voting and Incomplete Proxies Abstentions will have no effect on the vote for Proposal 1, but it will have the same effect as a vote against all other proposals. Broker non-votes for non-routine proposals (Proposals 1 and 3 through 8) will also have no effect on the vote for the proposals. If a proxy does not specify how to vote, the stock represented by that proxy will be considered to be voted in favor of Proposals 1, 2, 3, 4, 5, and 6 and voted against Proposals 7 and 8. Unless a shareholder checks the box on the proxy card or provides instructions to withhold discretionary authority, the proxies may use their discretion to vote on other matters introduced at the 2012 annual meeting. Voting of Proxies Giving a proxy means that you authorize the persons named in the proxy card to vote your shares at the 2012 annual meeting in the manner directed. You may vote by proxy or in person at the meeting. To vote by proxy, you may use one of the following methods if you are a record holder: • By Internet — You can vote over the Internet atwww.proxyvote.com by entering the control number found on your Notice or proxy card; • By Telephone — You can vote by telephone by calling 1-800-690-6903 and entering the control number found on your Notice of Annual Meeting and Proxy Statement  |  69 General Information   Notice or proxy card; or • By Mail — If you received your proxy materials by mail, you can vote by signing, dating and mailing the proxy card in the pre-paid enclosed envelope. We request that you vote as soon as possible. When the proxy is properly submitted, the shares of stock represented by the proxy will be voted at the 2012 annual meeting in accordance with the instructions contained in the proxy. If your shares are held in “street name” by a broker or other nominee, you should review the voting form used by that firm to determine whether you may provide voting instructions to the broker or other nominee by telephone or the Internet. The deadline for voting by phone or via the Internet, except with respect to shares acquired through participation in our 401(k) plan, is 11:59 p.m. EST on May 14, 2012. Your vote is important. Accordingly, you should vote via the Internet or by telephone; sign, date and return the enclosed proxy card if you received it by mail; or provide instructions to your broker or other nominee whether or not you plan to attend the annual meeting in person. Revocability of Proxies and Changes to a Shareholder’s Vote You have the power to revoke your proxy or change your vote at any time before the proxy is voted at the annual meeting. You can revoke your proxy or change your vote in one of four ways: by sending a signed notice of revocation to our corporate secretary to revoke your proxy; by sending to our corporate secretary a completed proxy card bearing a later date than your original proxy indicating the change in your vote; • by logging on towww.proxyvote.com in the same manner you would to submit your proxy electronically or calling 1-800-690-6903, and, in each case, following the instructions to revoke or change your vote; or by attending the annual meeting and voting in person, which will automatically cancel any proxy previously given. But attendance alone will not revoke any proxy that you have given previously. If you choose any of the first three methods, you must take the described action no later than the beginning of the 2012 annual meeting. Once voting on a particular matter is completed at the annual meeting, you will not be able to revoke your proxy or change your vote. If your shares are held in street name by a broker or other nominee, you must contact that institution to change your vote. Solicitation of Proxies This solicitation is made on behalf of our board, and we will pay the cost and expenses of printing and mailing this proxy statement and soliciting and obtaining the proxies, including the cost of reimbursing brokers, banks, and other financial institutions for forwarding proxy materials to their customers. Proxies may be solicited, without extra compensation, by our officers and employees by mail, telephone, email, personal interviews or other methods of communication. We have engaged the firm of Georgeson Inc. to assist us in the distribution and solicitation of proxies and will pay Georgeson a fee of $9,500 (plus out-of-pocket expenses for its services). Voting by Our Employees Participating in the Sprint Nextel 401(k) Plan If you are an employee of Sprint who has a right to vote shares acquired through your participation in our 401(k) plan, you are entitled to instruct the trustee, Fidelity Management Trust Company, how to vote the shares allocated to your account. The trustee will vote those shares as you instruct. You will receive voting information for any shares held in your 401(k) plan account, as well as any other shares registered in your own name. If you do not instruct the trustee how to vote your shares, the 401(k) plan provides for the trustee to vote those shares in the same proportion as the shares for which it receives instructions from all other participants. To allow sufficient time for the trustee to vote, your voting instructions must be received by the trustee by May 10, 2012. Delivery of Proxy Materials to Households Where Two or More Shareholders Reside SEC rules allow us to deliver multiple Notices in a single envelope or a single copy of an annual report and proxy statement to any household Notice of Annual Meeting and Proxy Statement  |  70 General Information   where two or more shareholders reside if we believe the shareholders are members of the same family. This rule benefits shareholders by reducing the volume of duplicate information they receive at their households. It also benefits us by reducing our printing and mailing costs and reducing the environmental impact associated with our annual meeting. We mailed Notices in a single envelope, or a single set of proxy materials, as applicable, to each household this year unless the shareholders in these households provided instructions to the contrary in response to a notice previously mailed to them. However, for shareholders who previously requested a printed set of the proxy materials, we mailed each shareholder in a single household a separate proxy card or voting instruction form. If you prefer to receive your own copy of the proxy materials for this or future annual meetings and you are a record holder, you may request a duplicate set by writing to shareholder relations, 6200 Sprint Parkway, Mailstop KSOPHF0302-3B424, Overland Park, Kansas 66251, by email atshareholder.relations@sprint.com or by calling 913-794-1091, and we will promptly furnish such materials. If a broker or other nominee holds your shares, you may instruct your broker to send duplicate mailings by following the instructions on your voting instruction form or by contacting your broker. If you share a household address with another shareholder, and you receive duplicate mailings of the proxy materials this year, you may request that your household receive a single set of proxy materials in the future. If you are a record holder, please contact Sprint Nextel Shareholder Relations using one of the contact methods described above. If a broker or other nominee holds your shares, you should follow the instructions on your voting instruction form or contact your broker. If you hold some shares as a record holder or through our 401(k) plan, and other shares in the name of a broker or other nominee, we must send you proxy materials for each account. To avoid receiving duplicate sets of proxy materials, you may consolidate accounts or consent to electronic delivery as described in the following section. Internet Availability of the Proxy Materials We are able to distribute the annual report and proxy statement to shareholders in a fast and efficient manner via the Internet. This reduces the amount of paper delivered to a shareholder’s address, eliminates the cost of sending these documents by mail and reduces the environmental impact associated with our annual meeting. You may elect to view all future annual reports and proxy statements on the Internet instead of receiving them by mail. Alternatively, you may elect to receive all future annual reports and proxy statements by mail instead of viewing them via the Internet. To make an election, please log on towww.proxyvote.com and enter your control number. If you have enrolled for electronic delivery, you will receive an email notice of shareholder meetings. The email will provide links to our annual report and our proxy statement. These documents are in PDF format so you will need Adobe Acrobat® Reader to view these documents online, which you can download for free by visitingwww.adobe.com. The email will also provide a link to a voting web site and a control number to use to vote via the Internet. Confidential Voting Policy Your votes are kept confidential from our directors, officers, and employees, subject to certain specific and limited exceptions. One exception occurs if you write opinions or comments on your proxy card. In that case, a copy of the proxy card is sent to us. Attending the Meeting Shareholders, their guests, and persons holding proxies from shareholders may attend the annual meeting. Seating, however, is limited and will be available on a first-come, first-served basis. If you plan to attend the meeting, you are required to bring proof of ownership or your proxy card to the meeting. For instance, a brokerage account statement showing that you owned our shares on March 16, 2012 is acceptable proof. Conference Call and Audio Webcast Shareholders may listen live by phone or audio webcast to our annual meeting. The dial-in numbers for the conference call will be posted atwww.sprint.com/investors/shareholders/annualmeeting before the meeting. Lines are limited and will be available on a first-come, first-served basis. Shareholders may access the audio webcast of our annual meeting at the same web address. This is an audio-only webcast with no Notice of Annual Meeting and Proxy Statement  |  71 General Information   video or other materials. Shareholders will not have an opportunity to ask questions via the phone or audio webcast. Other Matters to Come Before the Meeting The shares represented by all valid proxies received by telephone, by Internet or by mail will be voted in the manner specified. Where specific choices are not indicated, the shares represented by all valid proxies received will be voted: (1) for the nominees for director named in Proposal 1; (2) for ratification of the selection of the independent registered public accounting firm described in Proposal 2; (3) for Proposal 3 advisory approval of our executive compensation; (4) for Proposals 4 and 5 relating to amendments of Article SEVENTH to our Articles of Incorporation; (5) for approving the performance objectives under our Amended 2007 Plan as described in Proposal 6; and (6) against the shareholder proposals described in Proposals 7 and 8. We do not intend to bring any other matters before the meeting, and we do not know of any matters to be brought before the meeting by others. Should any matter not described above be properly presented at the meeting, the persons named in the proxy card will vote in accordance with their judgment as permitted. Proposals for Inclusion in our 2013 Proxy Statement You may submit proposals for consideration at future shareholder meetings. Such proposals also must comply with SEC regulations under Rule 14a-8 regarding the inclusion of shareholder proposals in company-sponsored proxy materials. The deadline for submitting shareholder proposals to be included in the proxy statement for our 2013 annual meeting of shareholders is December 6, 2012. If you intend to submit a proposal, it must be received by our Corporate Secretary at our Principal Executive Offices, no later than that date. Proposals Not Intended for Inclusion in Sprint’s Proxy Statement For a shareholder proposal that is not intended to be included in our proxy statement for the annual meeting next year under Rule 14a-8, the shareholder must provide the information required by our bylaws and give timely notice to our Corporate Secretary in accordance with our bylaws, which, in general, require that the notice be received by our Corporate Secretary not earlier than December 16, 2012; and not later than January 15, 2013. If the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary of this year’s meeting, notice will be timely if received between one hundred and fifty (150) and one hundred twenty (120) calendar days in advance of such annual meeting or ten (10) calendar days following the date on which public announcement of the date of the meeting is first made. Nominations of Individuals to Serve as Directors Our bylaws permit shareholders to nominate directors for election at an annual shareholder meeting. To nominate a director, the shareholder must deliver the information required by our bylaws. To nominate an individual for election at the 2013 annual shareholder meeting, the shareholder must give timely notice to our Corporate Secretary in accordance with our bylaws, which, in general, require that the notice be received by our Corporate Secretary not earlier than December 16, 2012; and not later than January 15, 2013. If the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary of this year’s meeting, notice will be timely if received between one hundred and fifty (150) and one hundred twenty (120) calendar days in advance of such annual meeting or ten (10) calendar days following the date on which public announcement of the date of the meeting is first made. Availability of Sprint’s Bylaws Our bylaws, which contain provisions regarding the requirements for making shareholder proposals and nominating director candidates, are available on our website atwww.sprint.com/governance. Form 10-K We will provide without charge, upon written request to the Corporate Secretary at our Principal Executive Offices, a copy of our annual report on Form 10-K, including the financial statements and financial statement schedules, filed with the SEC for the year ended December 31, 2011. Notice of Annual Meeting and Proxy Statement  |  72 Annex A Example 1 SEVENTH Business Combinations with Interested Stockholders. The Corporation expressly elects not to be subject to the provisions of contained in Sections 17-12,100 to 17-12,104 of the Kansas General Corporation Code, as it may be amended. Section 1. In addition to any affirmative vote required by law or these Articles of Incorporation, and except as expressly provided in Section 2 of this ARTICLE SEVENTH, the affirmative vote of the holders of 80% of the outstanding shares of the Corporation entitled to vote in an election of Directors shall be required for the approval or authorization of any Business Combination (as hereinafter defined). Section 2. The provisions of Section 1 of this ARTICLE SEVENTH shall not be applicable if: The Business Combination shall have been approved by a majority of the Continuing Directors (as hereinafter defined);provided,however, that such approval shall only be effective if obtained at a meeting of Directors at which at least seven Continuing Directors are present; or The Business Combination is a merger or consolidation and the cash or Fair Market Value (as hereinafter defined) of the property, securities or other consideration to be received per share by the stockholders of each class of stock of the Corporation in the Business Combination, if applicable, is not less than the highest per share price paid by the Interested Stockholder (as hereinafter defined), with appropriate adjustments for stock splits, stock dividends and like distributions, in the acquisition by the Interested Stockholder of any of its holdings of each class of the Corporation’s capital stock. Section 3. For purposes of this ARTICLE SEVENTH: The term “Business Combination” means: (a) any merger or consolidation of the Corporation or any subsidiary of the Corporation with (a) any Interested Stockholder or (b) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as defined on October 1, 1982 in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of an Interested Stockholder; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any subsidiary of the Corporation that have an aggregate Fair Market Value of $1,000,000 or more; (c) the issuance or transfer by the Corporation or any subsidiary of the Corporation (in one transaction or a series of transactions) of any securities of the Corporation or any subsidiary of the Corporation to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $1,000,000 or more; (d) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder; or (e) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder. The term “Continuing Director” means any member of the Board of Directors of the Corporation who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Continuing Director if the successor is unaffiliated with the Interested Stockholder and is recommended or elected to succeed a Continuing Director by a majority of Continuing Directors,provided that such recommendation or election shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present. The term “Fair Market Value” means: (a) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-listed stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined in good faith by a majority of Continuing Directors,provided that such determination shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present; or (b) in the case of property or securities other than cash or stock, the fair market value of such property or securities on the date in question as determined in good faith by a majority of Continuing Directors,provided that such determination shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present. The term “Interested Stockholder” means and includes, as of the date of any proposed Business Combination, any individual, corporation, partnership or other person or entity which, together with its “Affiliates” and “Associates” (as defined on October 1, 1982 in Rule 12b-2 under the Exchange Act), “Beneficially Owns” (as defined on October 1, 1982 in Rule 13d-3 under the Exchange Act) in the aggregate 10% or more of the outstanding shares of the Corporation entitled to vote in an election of Directors, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity. Example 2 SEVENTH Section 1. In addition to any affirmative vote required by law or these Articles of Incorporation, and except as expressly provided in Section 2 of this ARTICLE SEVENTH, the affirmative vote of the holders of 80% of the outstanding shares of the Corporation entitled to vote in an election of Directors shall be required for the approval or authorization of any Business Combination (as hereinafter defined). Section 2. The provisions of Section 1 of this ARTICLE SEVENTH shall not be applicable if: The Business Combination shall have been approved by a majority of the Continuing Directors (as hereinafter defined);provided,however, that such approval shall only be effective if obtained at a meeting of Directors at which at least seven Continuing Directors are present; or The Business Combination is a merger or consolidation and the cash or Fair Market Value (as hereinafter defined) of the property, securities or other consideration to be received per share by the stockholders of each class of stock of the Corporation in the Business Combination, if applicable, is not less than the highest per share price paid by the Interested Stockholder (as hereinafter defined), with appropriate adjustments for stock splits, stock dividends and like distributions, in the acquisition by the Interested Stockholder of any of its holdings of each class of the Corporation’s capital stock. Section 3. For purposes of this ARTICLE SEVENTH: The term “Business Combination” means: (a) any merger or consolidation of the Corporation or any subsidiary of the Corporation with (a) any Interested Stockholder or (b) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as defined on October 1, 1982 in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of an Interested Stockholder; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any subsidiary of the Corporation that have an aggregate Fair Market Value of $1,000,000 or more; (c) the issuance or transfer by the Corporation or any subsidiary of the Corporation (in one transaction or a series of transactions) of any securities of the Corporation or any subsidiary of the Corporation to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $1,000,000 or more; (d) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder; or (e) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder. The term “Continuing Director” means any member of the Board of Directors of the Corporation who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Continuing Director if the successor is unaffiliated with the Interested Stockholder and is recommended or elected to succeed a Continuing Director by a majority of Continuing Directors,provided that such recommendation or election shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present. The term “Fair Market Value” means: (a) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-listed stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined in good faith by a majority of Continuing Directors,provided that such determination shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present; or (b) in the case of property or securities other than cash or stock, the fair market value of such property or securities on the date in question as determined in good faith by a majority of Continuing Directors,provided that such determination shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present. The term “Interested Stockholder” means and includes, as of the date of any proposed Business Combination, any individual, corporation, partnership or other person or entity which, together with its “Affiliates” and “Associates” (as defined on October 1, 1982 in Rule 12b-2 under the Exchange Act), “Beneficially Owns” (as defined on October 1, 1982 in Rule 13d-3 under the Exchange Act) in the aggregate 10% or more of the outstanding shares of the Corporation entitled to vote in an election of Directors, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity. Example 3 SEVENTH Section 1. In addition to any affirmative vote required by law or these Articles of Incorporation, and except as expressly provided in Section 2 of this ARTICLE SEVENTH, the affirmative vote of the holders of 80% of the outstanding shares of the Corporation entitled to vote in an election of Directors shall be required for the approval or authorization of any Business Combination (as hereinafter defined). Section 2. The provisions of Section 1 of this ARTICLE SEVENTH shall not be applicable if: The Business Combination shall have been approved by a majority of the Continuing Directors (as hereinafter defined);provided,however, that such approval shall only be effective if obtained at a meeting of Directors at which at least seven Continuing Directors are present; or The Business Combination is a merger or consolidation and the cash or Fair Market Value (as hereinafter defined) of the property, securities or other consideration to be received per share by the stockholders of each class of stock of the Corporation in the Business Combination, if applicable, is not less than the highest per share price paid by the Interested Stockholder (as hereinafter defined), with appropriate adjustments for stock splits, stock dividends and like distributions, in the acquisition by the Interested Stockholder of any of its holdings of each class of the Corporation’s capital stock. Section 3. For purposes of this ARTICLE SEVENTH: The term “Business Combination” means: (a) any merger or consolidation of the Corporation or any subsidiary of the Corporation with (a) any Interested Stockholder or (b) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as defined on October 1, 1982 in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of an Interested Stockholder; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any subsidiary of the Corporation that have an aggregate Fair Market Value of $1,000,000 or more; (c) the issuance or transfer by the Corporation or any subsidiary of the Corporation (in one transaction or a series of transactions) of any securities of the Corporation or any subsidiary of the Corporation to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $1,000,000 or more; (d) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder; or (e) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder. The term “Continuing Director” means any member of the Board of Directors of the Corporation who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Continuing Director if the successor is unaffiliated with the Interested Stockholder and is recommended or elected to succeed a Continuing Director by a majority of Continuing Directors,provided that such recommendation or election shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present. The term “Fair Market Value” means: (a) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-listed stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined in good faith by a majority of Continuing Directors,provided that such determination shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present; or (b) in the case of property or securities other than cash or stock, the fair market value of such property or securities on the date in question as determined in good faith by a majority of Continuing Directors,provided that such determination shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present. The term “Interested Stockholder” means and includes, as of the date of any proposed Business Combination, any individual, corporation, partnership or other person or entity which, together with its “Affiliates” and “Associates” (as defined on October 1, 1982 in Rule 12b-2 under the Exchange Act), “Beneficially Owns” (as defined on October 1, 1982 in Rule 13d-3 under the Exchange Act) in the aggregate 10% or more of the outstanding shares of the Corporation entitled to vote in an election of Directors, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity. Section 4.Business Combinations with Interested Stockholders.The Corporation expressly elects not to be subject to the provisions of contained in Sections 17-12,100 to 17-12,104 of the Kansas General Corporation Code, as it may be amended. Example 4 SEVENTH Reserved. Section 1. In addition to any affirmative vote required by law or these Articles of Incorporation, and except as expressly provided in Section 2 of this ARTICLE SEVENTH, the affirmative vote of the holders of 80% of the outstanding shares of the Corporation entitled to vote in an election of Directors shall be required for the approval or authorization of any Business Combination (as hereinafter defined). Section 2. The provisions of Section 1 of this ARTICLE SEVENTH shall not be applicable if: The Business Combination shall have been approved by a majority of the Continuing Directors (as hereinafter defined);provided,however, that such approval shall only be effective if obtained at a meeting of Directors at which at least seven Continuing Directors are present; or The Business Combination is a merger or consolidation and the cash or Fair Market Value (as hereinafter defined) of the property, securities or other consideration to be received per share by the stockholders of each class of stock of the Corporation in the Business Combination, if applicable, is not less than the highest per share price paid by the Interested Stockholder (as hereinafter defined), with appropriate adjustments for stock splits, stock dividends and like distributions, in the acquisition by the Interested Stockholder of any of its holdings of each class of the Corporation’s capital stock. Section 3. For purposes of this ARTICLE SEVENTH: The term “Business Combination” means: (a) any merger or consolidation of the Corporation or any subsidiary of the Corporation with (a) any Interested Stockholder or (b) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as defined on October 1, 1982 in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of an Interested Stockholder; (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the Corporation or any subsidiary of the Corporation that have an aggregate Fair Market Value of $1,000,000 or more; (c) the issuance or transfer by the Corporation or any subsidiary of the Corporation (in one transaction or a series of transactions) of any securities of the Corporation or any subsidiary of the Corporation to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $1,000,000 or more; (d) the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder; or (e) any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder. The term “Continuing Director” means any member of the Board of Directors of the Corporation who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Continuing Director if the successor is unaffiliated with the Interested Stockholder and is recommended or elected to succeed a Continuing Director by a majority of Continuing Directors,provided that such recommendation or election shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present. The term “Fair Market Value” means: (a) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange-listed stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined in good faith by a majority of Continuing Directors,provided that such determination shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present; or (b) in the case of property or securities other than cash or stock, the fair market value of such property or securities on the date in question as determined in good faith by a majority of Continuing Directors,provided that such determination shall only be effective if made at a meeting of Directors at which at least seven Continuing Directors are present. The term “Interested Stockholder” means and includes, as of the date of any proposed Business Combination, any individual, corporation, partnership or other person or entity which, together with its “Affiliates” and “Associates” (as defined on October 1, 1982 in Rule 12b-2 under the Exchange Act), “Beneficially Owns” (as defined on October 1, 1982 in Rule 13d-3 under the Exchange Act) in the aggregate 10% or more of the outstanding shares of the Corporation entitled to vote in an election of Directors, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity. ANNEX B SPRINT NEXTEL CORPORATION 2007 OMNIBUS INCENTIVE PLAN (EFFECTIVE MAY 8, 2007 AND AMENDED AND RESTATED ON FEBRUARY 11, 2008, NOVEMBER 5, 2008, FEBRUARY 26, 2010, DECEMBER 17, 2010 AND                     , 2012) SPRINT NEXTEL CORPORATION 2007 OMNIBUS INCENTIVE PLAN 1. Purpose. The purpose of this 2007 Omnibus Incentive Plan is similarto attract and retain directors, officers, other employees and consultants of Sprint Nextel Corporation and its Subsidiaries and to motivate and provide to such persons incentives and rewards for superior performance. 2. Definitions. As used in this Plan: (a) “Appreciation Right” means a right granted pursuant to Section 5 of this Plan and will include both Free- Standing Appreciation Rights and Tandem Appreciation Rights. (b) “Authorized Officer” has the meaning specified in Section 11(d) of the Plan. (c) “Award” means a grant of Option Rights, Appreciation Rights, Performance Shares or Performance Units, or a grant or sale of Restricted Stock, Restricted Stock Units or other awards contemplated by Section 10 of the Plan. (d) “Base Price” means the price to be used as the basis for determining the Spread upon the exercise of a Free-Standing Appreciation Right or a Tandem Appreciation Right. (e) “Board” means the Board of Directors of the Corporation and, to the contractextent of any delegation by the Board to a committee (or subcommittee thereof) pursuant to Section 11 of this Plan, such committee (or subcommittee). (f) “Business Transaction” has the meaning set forth in Section 2(h)(ii). (g) “Cause” as a reason for a Participant’s termination of employment shall have the meaning assigned such term in (i) the employment agreement, if any, between the Participant and an Employer, or (ii) during the CIC Severance Protection Period (as defined in the CIC Severance Plan), the CIC Severance Plan, if the Participant is a participant in such plan. If the Participant is not a party to an employment agreement with Mr. Esrey with two exceptions. First, upon Mr. Esrey’s retirement,an Employer in which such term is defined, or if during the CIC Severance Protection Period, the Participant is not a date no later than May 1, 2005, if Mr. LeMay does not become Chief Executive Officerparticipant in the CIC Severance Plan, then unless otherwise defined in the applicable Evidence of Sprint, Award, “Cause” shall mean: (i) the options grantedintentional engagement in any acts or omissions constituting dishonesty, breach of a fiduciary obligation, wrongdoing or misfeasance, in each case, in connection with his 2001a Participant’s duties or otherwise during the course of a Participant’s employment contract become exercisablewith an Employer; (ii) the commission of a felony or the indictment for any felony, including, but not limited to, any felony involving fraud, embezzlement, moral turpitude or theft; (iii) the intentional and wrongful damaging of property, contractual interests or business relationships of an Employer; (iv) the intentional and wrongful disclosure of secret processes or confidential information of an Employer in full and he is entitledviolation of an agreement with or a policy of an Employer; (v) the continued failure to up to 12 months of severance benefits if he resigns within 60 days. Second, Mr. LeMay’s contract does not contain a post-retirement consulting arrangement. Employment contract with Mr. Lauer.In 2001, Mr. Lauer entered into an employment contract patterned onsubstantially perform the employment contract entered into by Mr. LeMay. This agreement, however, provides onlyParticipant’s duties for an 18-month post-employment covenantEmployer; (vi) current alcohol or prescription drug abuse affecting work performance; (vii) current illegal use of drugs; or (viii) any intentional conduct contrary to an Employer’s announced policies or practices (including, but not limited to, compete, requires no board action to effect a termination for cause, and provides no commitment by the board to consider stock acquisition or retention loans. The agreement did not provide for grants of stock options in lieu of annual executive grants, but Sprint did grant shares of restricted stock to Mr. Lauer as partial consideration for entering into an earlier non-compete agreement that was superceded by his employment agreement. The vesting terms and conditions for those shares were continued by the new employment agreement. Sprint has filed these employment contracts with the SEC. They are available on the SEC’s website atwww.sec.gov, and Sprint hereby incorporates them by reference. Contingency employment arrangements.Sprint has contingency employment agreements with Messrs. Devlin and Fuller and has provided contingency employment arrangementscontained in the employment contracts with Messrs. Esrey, LeMay, and Lauer that provide for separation pay and benefits if, following a change in controlCorporation’s Code of Sprint, Sprint terminates their employment without cause or they resign due to a diminution in responsibilities, authority, or compensation. The benefits include monthly salary payments for up to 35 months and an amount equal to the sum of the highest short-term plus the highest long-term incentive compensation awards received for the three performance periods before termination, paid in three installments. Conduct). (h) For purposes of this Plan, except as may be otherwise prescribed by the key management benefit plan, they willCompensation Committee in an Evidence of Award, a “Change in Control” of the Corporation shall be deemed to have remained a Key Executive (as defined inoccurred upon the plan) until age 60 and interest will be credited to their accountshappening of any of the following events: (i) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Executive Deferred Compensation Plan at the maximum rate allowed under the plan. In addition, Sprint will determine their retirement benefits assuming three yearsExchange Act) of additional service and will not impose on them any reduction to benefits for early retirement. The benefits also include life, disability, medical, and dental insurance coverage for up to 35 months following termination. Finally, these officers are not subject to plan provisions that require a reduction of benefits to levels deductible under Section 280Gthirty percent (30%) or more of the Internal Revenue Code,combined voting power of the then-outstanding Voting Stock of the Corporation;except, that: (A) for purposes of this Section 2(h)(i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition of Voting Stock of the Corporation directly from the Corporation that is approved by a majority of the Incumbent Directors, (2) any acquisition of Voting Stock of the Corporation by the Corporation or any Subsidiary, (3) any acquisition of Voting Stock of the Corporation by the trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any Subsidiary, and (4) any acquisition of Voting Stock of the Corporation by any Person pursuant to a Business Transaction that complies with clauses (A), (B) and (C) of Section 2(h)(ii); (B) if any excise tax is imposed on them by Section 4999Person becomes the beneficial owner of thirty percent (30%) or more of combined voting power of the Internal Revenue Codethen-outstanding Voting Stock of the Corporation as a result of a changetransaction or series of transactions described in control, Sprint will make them whole. Mr. Esreyclause (1) of Section 2(h)(i)(A) above and Mr. LeMay have waived their right tosuch Person thereafter becomes the beneficial owner of any benefits resulting from shareholder approvaladditional shares of Voting Stock of the Corporation representing one percent (1%) or more of the WorldCom, Inc., merger under their old contingency employment agreements. On March 20, 2003, Mr. Devlin notified Sprint that he was resigning and that he would leave Sprint on April 19, 2003. Non-competition and severance arrangements.Mr. Devlin and Mr. Fuller have each signed non-competition and severance agreements with Sprint and Messrs. Esrey, LeMay, and Lauer have similar provisions in their employment contracts. These arrangements prohibit the executives from performing services for a competitor for up to 18 months (36 months in the case of Mr. Esrey and Mr. LeMay) following termination of their employment. The severance arrangements provide that they will receive 18 months of compensation and benefits following an involuntary termination of employment without cause or upon a constructive discharge following a diminution of their responsibilities or compensation, or a forced relocation in certain circumstances. Key management benefit plan.Sprint has a key management benefit plan providing for a survivor benefit in the eventthen-outstanding Voting Stock of the deathCorporation, other than as a result of (x) a participanttransaction described in clause (1) of Section 2(h)(i)(A) above, or (y) a stock dividend, stock split or similar transaction effected by the Corporation in the alternative,which all holders of Voting Stock are treated equally, then such subsequent acquisition shall be treated as a supplemental retirement benefit. Under the plan, if a participant dies before 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 before the time of their 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 before the time of retirement or disability, payable eitherChange 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. Messrs. Esrey, Devlin, Fuller, Lauer, and LeMay are participants in the plan. Control;   Employment contract with Mr. Forsee. Sprint entered into an employment contract with Mr. Forsee dated as of March 19, 2003 pursuant to which Mr. Forsee agreed to serve as Sprint’s Chief Executive Officer. Mr. Forsee was also appointed (C) a member of Sprint’s Board and, under the contract, Sprint will recommend that Mr. Forsee be elected Chairman of the Board upon Mr. Esrey’s retirement as Chairman. The initial term of the contract ends December 31, 2007, subject to automatic one-year extensions. Under the contract, Mr. Forsee will receive an annual base salary of $1,100,000, will be eligible for an annual target bonus opportunity of 150% of his base salary, will be entitled to a minimum annual bonus of $1,650,000 for 2003 and will be eligible for all employee benefits made available generally to other senior executive officers of the Company. Under the contract, Mr. Forsee is required to relocate promptly to the Kansas City metropolitan area,Change in connection with which Sprint will reimburse Mr. Forsee for his reasonable moving expenses and will purchase his residence in Atlanta, GA, at an independently appraised fair market value. Under his employment contract, Mr. Forsee received initial grants of options to purchase 835,000 shares of PCS Stock and 835,000 shares of FON Stock, at exercise prices equal to the respective fair market values on the grant date; initial grants of 130,500 restricted stock units relating to shares of PCS Stock and 130,500 restricted stock units relating to shares of FON Stock (collectively, “Initial RSUs”); and sign-on awards of 474,400 restricted stock units relating to shares of PCS Stock and 474,400 restricted stock units relating to shares of FON Stock (collectively, “Sign-on RSUs”). The options which will vest in 25% tranches on the first four anniversaries of the grant date, subject to Mr. Forsee’s continued employment with Sprint,Control will not be subjectdeemed to accelerated vesting uponhave occurred if a change in control underPerson becomes the provisionsbeneficial owner of Sprint’s option plans but will be subject to accelerated vesting under the circumstances described below. The restricted stock unit awards include dividend equivalent rights. The Initial RSUs will vest on the third anniversarythirty percent (30%) or more of the grant date and the Sign-on RSUs will vest on December 31, 2007, in each case subject to Mr. Forsee’s continued employment with Sprint. In recognition that Mr. Forsee forfeited certain compensation and opportunities with his former employer, Sprint granted to Mr. Forsee “make-whole” options to purchase 597,200 shares of PCSVoting Stock and 597,200 shares of FON Stock, at exercise prices equal to the respective fair market values on the grant date; 194,400 restricted stock units relating to shares of PCS Stock and 194,400 restricted stock units relating to shares of FON Stock; and agreed to reimburse him for any forfeited earned but unpaid compensation and for taxes previously paid by him on amounts he is required to repay his former employer. The options, which will become fully exercisable on December 31, 2007, subject to Mr. Forsee’s continued employment with Sprint, will not be subject to accelerated vesting upon a change in control under the provisions of Sprint’s option plans, but will be subject to accelerated vesting as described below. The “make-whole” restricted stock units, which include dividend equivalent rights, will vest and, unless deferred, will be paid in 20% increments on each of the first four anniversaries of the grant date and on December 31, 2007 in the shares to which they relate, in each case subject to Mr. Forsee’s continued employment with Sprint. Consistent with Sprint’s standard stock compensation programs, all the options and restricted stock units granted under Mr. Forsee’s contract will vest prior to the indicated vesting dates in the event of his death or disability. Mr. Forsee will also be eligible for retirement benefits under Sprint’s non-qualified retirement plan not to exceed 65% of his covered compensation (generally, annual base salary plus actual annual bonus), which amount will be ratably reduced if Mr. Forsee’s employment with Sprint terminates prior to attaining age 65. Sprint has agreed to reimburse Mr. Forsee for reasonable legal and professional fees incurred by him in connection with the negotiation of his employment contract and in connection with litigation relating to his taking the position with Sprint. In the event Mr. Forsee’s employment with Sprint is terminated, either by Sprint without cause or by Mr. Forsee for good reason, Mr. Forsee will receive his pro-rata annual bonus and severance benefits equal to two times the sum of his annual base salary and his target annual bonus opportunity (three times such amount if the termination occurs during the 24-month period following a change in control,Corporation as defined in the agreement). In addition, in the event of such a termination, the options and restricted stock units discussed above will be subject to pro-rata accelerated vesting (100% accelerated vesting if such termination is within the 24-month period following a change in control). In the event Mr. Forsee receives any payments deemed contingent on a change in control, he will be eligible for associated tax equalization payments. Under the agreement, Mr. Forsee has agreed to certain covenants relating to competition, confidentiality, non-solicitation, non-disparagement and cooperation, his breach of which will result in forfeiture of his rights to his non-qualified pension benefit, any unpaid severance benefits and all of his equity-based awards described above that are then outstanding. Performance graphs The graph below compares the yearly percentage change in the cumulative total Stockholder return for FON Stock as compared with the S&P® 500 Stock Index and the S&P® 500 Integrated Telecommunications Index, for the five-year period from December 31, 1997 to December 31, 2002. The return for FON Stock is based on the historical return of Sprint common stock before the 1998 recapitalization of Sprint’s common stock into FON Stock and PCS Stock (the 1998 Recapitalization) as adjusted for the recapitalization and is based on the return of FON Stock after the 1998 Recapitalization. The returns for the S&P indexes are compounded annually. The S&P® 500 Integrated Telecommunications Index is composed of the following companies: ALLTEL Corporation, AT&T Corporation, BellSouth Corporation, CenturyTel, Inc., Citizens Communication Company, Qwest Corporation, SBC Communications, Inc., Verizon Communications Inc, and Sprint FON Group.      1997    1998    1999    2000    2001    2002 Sprint FON    100.00    162.48    261.95    81.00    82.06    61.72 S&P 500    100.00    128.34    155.15    141.14    124.42    97.08 S&P Integrated Telecom    100.00    151.54    164.01    106.35    96.51    67.22 The graph below compares the yearly percentage change in the cumulative total Stockholder return for PCS Stock as compared with the S&P® 500 Stock Index and the Barclays Capital Wireless Index, for the period from November 23, 1998 to December 31, 2002. The returns for the S&P and Barclays indexes are compounded annually. The Barclays Capital Wireless Index is composed of the following companies: ALLTEL Corporation, Centennial Communications, Millicom, Nextel Communications, Price Communications, Telesystem, US Cellular, Vimpel Communications, Vodafone, Western Wireless, and Sprint PCS Group.      11/23/98    1998    1999    2000    2001    2002 Sprint PCS    100.00    124.58    552.19    220.21    263.02    47.19 S&P 500    100.00    103.61    125.25    113.94    100.44    78.37 Barclay’s Capital Wireless    100.00    114.19    280.70    165.16    126.68    69.14 Equity compensation plan information Sprint has several equity compensation plans under which Sprint may issue awards of FON Stock and PCS Stock to employees, officers and directors. All of these plans have been approved by Sprint’s Stockholders. The following table provides information about the shares of FON Stock and PCS Stock that may be issued upon exercise of awards as of year-end 2002. A B C Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans(3) Equity compensation plans approved by Stockholders(1)     FON Stock 98,791,659 (2) $ 24.77 (2) 18,320,454 (4)(5)(6)     PCS Stock 72,857,108 (2) $ 18.45 (2) 35,732,271 (4)(5)(6) Equity compensation plans not approved by Stockholders —   —   —   (1) Consist of 1985 Stock Option Plan, 1997 Long-Term Stock Incentive Program, Management Incentive Stock Option Plan, and Employees Stock Purchase Plan. The Board of Directors of Sprint has authorized the 1990 Stock Option Plan (stock option grants), the 1990 Restricted Stock Plan (awards of restricted stock) and the Special Award Stock Plan (stock awards for outstanding contributions and for humanitarian service) pursuant to 1997 Long-Term Stock Incentive Program and its predecessor, which was approved by Stockholders. In addition, that plan or its predecessor also provided for options to be granted to directors and director share purchases (purchase of FON Stock and PCS Stock by directors with director fees). (2) Excludes purchase rights accruing under the ESPP. Under the ESPP, each eligible employee may purchase FON Stock and PCS Stock at quarterly and annual intervals at a purchase price per share equal to 85% of the market value on the grant date or the exercise date, whichever is lesser. (3) Of these shares, 7,749,087 shares of FON Stock and 22,475,408 shares of PCS Stock were available under the 1997 Long-Term Stock Incentive Program. Although it is not Sprint’s intention to do so, all of the shares, plus any shares that become available due to forfeiture of outstanding awards, could be issued in a form other than options, warrants, or rights. (4) Includes shares available for future issuance under the ESPP before the additional shares subject to Stockholder approval as described on page 28 of this proxy statement. (5) Under the 1997 Long-Term Stock Incentive Program, the number of shares increases on January 1 of each year by 1.5% of the FON Stock outstanding on that date and 1.5% of the PCS Stock, Series 1 and 2 outstanding on that date. No awards may be granted after April 15, 2007. (6) Under MISOP, the number of shares increases on January 1 of each year by 0.9% of the FON Stock outstanding on that date and 0.9% of the PCS Stock, Series 1 and 2 outstanding on that date. No options may be granted after April 15, 2005. II. PROPOSAL TO ADOPT AN AMENDMENT TO THE ARTICLES OF INCORPORATION TO ELIMINATE CLASSIFICATION OF SPRINT’S BOARD OF DIRECTORS (Item 2 on Proxy Card) The Board of Directors has approved an amendment to ARTICLE FIFTH of Sprint’s Articles of Incorporation to eliminate classification of Sprint’s Board of Directors. The text of the proposed amendment, marked to show changes from the current Articles of Incorporation, is set forth in Appendix B to the proxy statement. Sprint’s Articles of Incorporation currently include a provision, adopted by Sprint’s stockholders in 1983, establishing a classified Board of Directors. As a result the Board of Directors was divided into three classes, with one class standing for election each year for a three-year term. Reasons for and Effects of Proposed Amendment. At the time the Stockholders approved establishment of a classified boardreduction in 1983, many companies and their stockholders believed a classified board would increase continuity and stability in a board’s composition and in the policies formulated by the board. They also believed implementation of a classified board would discourage abusive hostile takeover tactics by making it difficult for raiders to obtain control of a company’s board quickly through a proxy contest. Many investors now believe classified boards decrease directors’ accountability to stockholders. A number of scholars and companies now are concluding that despite the benefits of a classified board in promoting corporate stability and in deterring coercive takeover attempts, stockholders should have the opportunity to elect the company’s directors annually. Sprint’s Board of Directors agrees with this conclusion. This also was one of the corporate governance enhancements agreed to as part of the settlement of the derivative litigation described above. Accordingly, the Board of Directors has approved and recommends that the Stockholders approve a proposal to amend the Articles of Incorporation to declassify the Board of Directors. Pursuant to the proposal, each Director elected at or after the 2004 Annual Meeting would be elected for a one-year term. Directors elected before the 2004 Annual Meeting (including Directors appointed by the Board to fill a vacancy) would serve the full duration of their existing three-year terms. The proposed amendment also eliminates language in the current subsection 5(b) of ARTICLE FIFTH to remove a reference to a provision that expired on November 23, 2002. Vote Required for Adoption of the Amendment to Eliminate the Classified Board of Directors. Adoption of the proposed amendment to the Articles of Incorporation requires the affirmative vote of the holders of a majority of the votes represented by the outstanding shares entitled to vote at the Annual Meeting. The Board of Directors recommends that the Stockholders vote FOR approval of the amendment. III. PROPOSAL TO ADOPT AMENDMENTS TO THE EMPLOYEES STOCK PURCHASE PLAN (Item 3 on Proxy Card) The following is a discussion of the Sprint Employees Stock Purchase Plan and the proposed amendment to the plan to be submitted for Stockholder approval at the Annual Meeting. You are urged to read carefully the Sprint Employees Stock Purchase Plan, restated to incorporate the amendment adopted by the Sprint board of directors, in its entirety, a copy of which is attached to this proxy statement as Appendix C. In 1988, Sprint Stockholders approved the Sprint Employees Stock Purchase Plan, which we refer to as the “Sprint ESPP”. In 1994, 1998, 2000, and 2001 Sprint Stockholders approved amendments to the Sprint ESPP increasing the number of shares of Sprint commonVoting Stock of the Corporation outstanding pursuant to a transaction or series of transactions that is approved by a majority of the Incumbent Directors unless and until such Person thereafter becomes the beneficial owner of additional shares of Voting Stock of the Corporation representing one percent (1%) or more of the then-outstanding Voting Stock of the Corporation, other than as a result of a stock reserved for issuance underdividend, stock split or similar transaction effected by the planCorporation in which all holders of Voting Stock are treated equally; and making other changes to the plan. Since the November 1998 recapitalization of Sprint common stock into FON Stock and PCS Stock, both FON Stock and PCS Stock have been issued under the Sprint ESPP.   At its meeting on February 11, 2003, (D) if at least a majority of the Sprint BoardIncumbent Directors determine in good faith that a Person has acquired beneficial ownership of thirty percent (30%) or more of the Voting Stock of the Corporation inadvertently, and such Person divests as promptly as practicable, but no later than the date, if any, set by the Incumbent Directors, approved an amendment increasing thea sufficient number of shares so that such Person beneficially owns less than thirty percent (30%) of FONthe Voting Stock and PCS Stock authorized for issuance underof the plan. The amendment also made other changes to the ESPPCorporation, then no Change in Control shall have occurred as follows: · establish an annual purchase date at the end of each offering period in lieu of interim quarterly purchases; · require a participant to remain employed by Sprint until the first day of the last month of the offering period to be entitled to purchase shares under the plan, unless the participant’s termination is on account of retirementa result of such Person’s acquisition; or involuntary termination not for cause; and · permit employees to elect, before the first day of the last month of the plan period, to cancel their participation and be refunded their account balances.   The Sprint (ii) the consummation of a reorganization, merger or consolidation of the Corporation with, or the acquisition of the stock or assets of the Corporation by, another Person, or similar transaction (each, a “Business Transaction”), unless, in each case, immediately following such Business Transaction the Voting Stock of the Corporation outstanding immediately prior to such Business Transaction continues to represent, directly or indirectly, (either by remaining outstanding or by being converted into Voting Stock of the surviving entity or any parent thereof), more than fifty percent (50%) of the combined voting power of the then outstanding shares of Voting Stock or comparable equity interests of the entity resulting from such Business Transaction (including, without limitation, an entity which as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries), no Person (other than the Corporation, such entity resulting from such Business Transaction, or any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any Subsidiary or such entity resulting from such Business Transaction) beneficially owns, directly or indirectly, thirty percent (30%) or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Transaction, and at least a majority of the members of the board of directors recommendedof the entity resulting from such Business Transaction were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Transaction; or (iii) during any consecutive 18-month period, more than thirty percent (30%) of the Board ceases to be comprised of Incumbent Directors; or (iv) consummation of a transaction that implements in whole or in part a resolution of the stockholders of the Corporation authorizing a sale of all or substantially all of Corporation’s assets or a complete liquidation or dissolution of the Corporation, except pursuant to a Business Transaction that complies with clauses (A), (B) and (C) of Section 2(h)(ii). (i) “CIC Severance Plan” means the Sprint ESPP,Nextel Corporation Change in Control Severance Plan, as soit may be amended be submittedfrom time to Sprint stockholders at the Sprint annual meeting for their approval. If approved by Sprint Stockholders, the amended Sprint ESPP will be effective for the 2003 offering and any subsequent offerings. Summary of Amendment The proposed amendment to the Sprint ESPP will increase the number of shares of FON Stock authorized for issuance under the plan by 10 million shares and the number of shares of PCS Stock by 40 million shares, with only one-half of these additional shares available for the 2003 offering under the Sprint ESPP. Summary of Plan Provisions Under the Sprint ESPP, the Sprint board of directors is authorized to offer to all eligible employees of Sprint and its subsidiaries the right to elect to purchase shares of FON Stock or PCS Stock at the prices set forth in the next paragraph. The plan allows participants to allocate a percentage of compensation to be used to purchase shares of FON Stock, PCS Stock or both. Participants may choose to purchase 100% FON Stock or 100% PCS Stock,time or any combinationsuccessor plan, program, agreement or arrangement. (j) “CIC Severance Protection Period” means, except as otherwise provided in a Participant’s Evidence of FON Stock and PCS Stock in 10% increments totaling 100%. The price of shares purchased under each offering will be 85% ofAward, the average market price of FON Stock or PCS Stocktime period commencing on the date of grantthe first occurrence of a Change in Control and continuing until the option orearlier of: the date18-month anniversary of exercise of the option, whichever is lower. Average market price is defined by the Sprint ESPP as the average of the high and low prices for composite transactions. On March 26, 2003, the high and low prices of FON Stock were $12.14 and $11.65, respectively,such date, and the high and low pricesParticipant’s death. To the extent provided in a Participant’s Evidence of PCS Stock were $4.47 and $4.21, respectively. The maximum number of shares that any employee may purchase in an offering is limited to no more than 6,000 shares of FON Stock and 6,000 shares of PCS Stock. In addition, the number of shares any employee may purchase is limited by the requirements under Section 423 of the Internal Revenue Code, which provides that the value of the stock to be purchased may not accrue atAward, a rate which exceeds $25,000 in any calendar year. For example, if the market price on the grant date is $12.50 for FON Stock, then the maximum number of shares of FON Stock that any employee could purchase in the 2003 offering, if all of the employee’s contributions are used to purchase FON Stock, would be 2,000 shares. Conversely, if the market price on the grant date is $5 for PCS Stock and all of the employee’s contributions are used to purchase PCS Stock, the employee could purchase a maximum of 5,000 shares. If the total number of shares which are to be purchased on the date of exercise exceeds the shares available, the available shares will be allocated pro rata among participating employees. Following termination of the 2002 offering, which will be concluded at the end of June 2003, approximately 14.3 million shares of FON Stock and 40 million shares of PCS Stock will be available for future offerings under the plan if the amendment to the plan is approved. It is anticipated that the number of shares of FON Stock and PCS Stock authorized under the proposed amendment will be sufficient for two 12-month offerings. While there is no specified date of termination of the plan, its duration is limited by the maximum number of shares that may be sold pursuant to the plan. Awards Under the Sprint ESPP While it is not possible to determine the number of shares that may be purchased by each participant in the plan, the maximum number of shares which an employee may purchase in an offering is limited in the manner described above. Set forth below are the number of shares of FON Stock and PCS Stock that were purchased during 2002, by the persons and groups identified below.      Number of shares Underlying options Elected   Name and Position    FON      PCS   William T. Esrey     Chairman and Chief Executive Officer    0      0   J. Richard Devlin Executive Vice President—General Counsel, External Affairs and Corporate Secretary    0      560   Michael B. Fuller President—Local Telecommunications Division    0      440   Len J. Lauer President—Sprint PCS    0      495   Ronald T. LeMay President and Chief Operating Officer    0      0   All current executive officers as a group    1,225      2,992   All current directors who are not executive officers as a group    0 (1)    0 (1) All employees who are not executive officers as a group    2,578,551      5,103,826   (1) Outside directors cannot participate in the Sprint ESPP. Tax Aspects of the Plan The Sprint 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 such that no income is recognized by the employee atCIC Severance Protection Period also shall include the time the option is granted or exercised and the recognition of gain is deferred until stock is disposed of. If stock is disposed of after being held for the required period which is 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 lesser of the excess of the fair market value of the stock on the grant date over the initial option price or the excess, if any, of the fair market value of the stock on the date of disposition over the purchase 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 incomeoccurrence of a Change in Control for a Participant who 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 of the stock on the date of exercise of the option and the purchase 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 the employee recognizes ordinary income. The Board of Directors recommends a vote FOR approval and adoption of the amended Sprint ESPP. IV. SELECTION OF INDEPENDENT AUDITORS (Item 4 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 year ended December 31, 2003, and you are asked to ratify that appointment at the Annual Meeting. The Audit Committee monitors Sprint’s relationship with Ernst & Young on an ongoing basis. Ernst & Young has examined the financial statements of Sprint since 1965. Representatives of Ernst & Young will be present at the Annual Meeting and will have the opportunity to make a statement and to respond to appropriate questions. If the appointment of Ernst & Young is not ratified at the meeting, the Audit Committee will consider the selection of another accounting firm. Audit Fees. For professional services rendered for the audit of Sprint’s year 2002 financial statements and the review of the financial statements included in Sprint’s year 2002 Forms 10-Q, Ernst & Young billed Sprint a total of $3.3 million. This amount also includes reviews of documents filed with the SEC and preparation of letters for underwriters and other requesting parties. Financial Information Systems Design and Implementation Fees. There were no fees by Ernst & Young related to financial information system design and implementation during 2002. All Other Fees. In addition to the fees described above, Ernst & Young billed Sprint an aggregate of $8.8 million for all other services rendered to Sprint during 2002, which consisted of $600,000 of miscellaneous consulting fees and the amounts reported under the followingAudit-Related Fees andTax Fees. Audit-Related Fees.For professional audit-related services rendered, Ernst & Young billed Sprint a total of $4.7 million in 2002. Audit-related services generally include benefit plan audits, accounting consultations, and revenue assurance and security controls compliance reviews. Tax Fees. For professional tax services rendered to Sprint, Ernst & Young billed a total of $3.5 million in 2002. Tax services generally include domestic and international corporate tax compliance, planning, and advice. In addition to services Ernst & Young provided to Sprint, some Sprint executives engaged Ernst & Young to provide financial services. As detailed in footnote 5 to the summary compensation table on page 18 of this proxy statement, executives may use their miscellaneous services benefit for reimbursement of the fees associated with these services subject to a maximum of up to $15,000 per year for the Chief Executive Officer and the Chief Operating Officer. In addition, for certain executives, including each of the Named Officers, Sprint paid Ernst & Young for tax compliance services performed for the executives. These compliance services fees were for preparation of federal and state income tax filings and related analyses, but no fees related to any tax shelters as has been widely reported in the press. The total amount of fees received by Ernst & Young in connection with the miscellaneous services benefit and the tax compliance services benefit to the executive officers was $131,950 during 2002. Starting with respect to tax years after 2002, the Board of Directors adopted the following policies:  (1) Sprint’s independent auditors may not provide financial services, including financial tax planning or compliance services, to Sprint’s audit committee members in their individual capacity, executive officers or officer-level employees in the Finance organization; and (2) Sprint will not pay for tax compliance services performed for senior executive officers by any service provider, other than through reimbursement under the annual miscellaneous services benefit that is available to all of Sprint’s officers. The Audit Committee considered whether the non-audit services rendered by Ernst & Young, including the services provided to Sprint executives, were compatible with maintaining Ernst & Young’s independence as auditors of Sprint’s financial statements. The Audit Committee is in the process of revising its existing policies and procedures to govern pre-approval of audit and non-audit services in accordance with the new regulations under the Sarbanes-Oxley Act that become effective in May 2003. The Board of Directors recommends that you vote FOR the approval of the appointment. V. STOCKHOLDER PROPOSALS A. STOCKHOLDER PROPOSAL CONCERNING OPTION RE-PRICING (Item 5 on Proxy Card) The International Brotherhood of Electrical Workers Telephone Coordinating Council TTC-3, 501, 3520 S. Boulder Highway, Las Vegas, Nevada 89121, owner of 123 shares of FON Stock, has given notice of its intention to introduce the following resolution at the Annual Meeting. The Communications Workers of America Pension Plan, owner of 4,600 shares of FON Stock and 5,700 shares of PCS Stock, is co-sponsoring the resolution. RESOLVED: that the shareholders of Sprint urge the Board of Directors to adopt a policy that the Company shall not, without prior approval of the shareholders, reprice stock options already granted to any executive officer or director to a lower exercise price, nor terminate and regrant any such option at a lower price, nor grant new options to such persons on account of the market price dropping below the exercise price of prior options. This proposal shall not be construed as asking the Board to breach any existing contract nor to amend any option plan without shareholder approval. Stockholder’s Statement in Support of the Proposal The grant of stock options is designed to provide positive incentives for executives to focus on the creation of long-term corporate value. Stock option plans have been used as a way for companies to reward top management and “key” employees and link their interests with those of the company and other shareholders. Repricing is the practice of lowering the exercise price for stock options whose exercise price is above the market price of the stock or allowing such options to be exchanged for options with lower exercise prices. This practice undermines the goal of linking compensation to company performance. Repricing essentially rewards poor performance and divides the interest of option holders from those of shareholders who cannot reprice their stock. We believe that repricing options is counterproductive to the intended purpose of equity compensation. The option should be a motivation in good times and a motivation to improve the bad times. We recognize that certain situations may justify stock option repricing. In those rare instances, however, shareholders, not the Board of Directors, should decide on the appropriateness of repricing. For these reasons, we urge shareholders to support this proposal. The Company’s Response to the Stockholder Proposal We agree with the proponent’s view that re-pricing of options may be justified in rare instances only. We oppose this proposal, however, because stockholders’ legitimate concerns about re-pricings have already been addressed by Sprint’s policy limiting option exchange programs and re-pricings, and will be further addressed by proposed New York Stock Exchange (NYSE) rules and because the proposal inappropriately limits Sprint’s ability to grant new stock options when outstanding options are underwater. Recognizing stockholders’ legitimate concerns, Sprint’s board, in February 2002, adopted a policy placing limits on the circumstances in which it will approve option exchange programs or re-pricings without stockholder approval. Under the policy, the board will not, without stockholder approval, engage in option re-pricings or exchange programs unless the board (1) determines that the price history of the underlying stock is not so volatile as to suggest that the options being re-priced are likely to be back in the money over the near term, (2) explains in a public announcement its rationale for taking the action, addressing in particular whether events leading to a price decline were beyond management’s control, (3) restricts any such action to a reasonably equivalent value- for-value exchange, taking into account all significant economic terms of the old and new options as well as other changes in employee compensation occurring in connection with the proposed action, (4) does not permit any new options to be exercisable immediately upon exchange, (5) requires the new options to expire no later than the old options, (6) requires the new options to have a strike price that is at least equal to, and possibly above, the market price of the underlying stock, and (7) excludes members of the board and the named executive officers in Sprint’s most recent proxy statement from any exchange program or re-pricing. In brief, the board’s policy seeks to ensure that any such action would require an exchange of comparable value from employees to Sprint, would exclude Sprint’s top officers and board members, and would otherwise be reasonable. In addition to this policy, rules proposed by the NYSE will further address stockholder concerns about re-pricing. Sprint will comply with those rules as soon as they have been finalized. Under these rules, if a stock option plan does not contain a provision that specifically permits option re-pricing, the plan will be considered to prohibit re-pricing. Because Sprint’s stock option plans do not specifically permit re-pricing, the NYSE rules would require stockholder approval of a plan amendment permitting re-pricing. Sprint’s policy and the proposed NYSE rules address legitimate stockholder concerns; however we believe the proposal is flawed in one material respect because it goes beyond re-pricing to prohibit granting new options to directors or executive officers “on account of the market price dropping below the exercise price of prior options.” Sprint’s shareholders have approved the number of shares that can be issued under option plans and thereby limited Sprint’s ability to grant additional options. Therefore, any concern that Sprint can accomplish the same result as a re-pricing simply by issuing additional options is misplaced and interferes with Sprint’s use of an important compensation tool. Because the concerns raised in the proposal about re-pricing have been adequately addressed and because material parts of the proposal are overly broad, the Board recommends a vote against the proposal. B. STOCKHOLDER PROPOSAL CONCERNING SEVERANCE AGREEMENTS WITH EXECUTIVES (Item 6 on Proxy Card) The Almagamated Bank Long View Investment Fund, 1100 17th Street, N.W., Washington, D.C. 20036-4601, owner of 300,415 shares of FON Stock and 335,748 shares of PCS Stock, has given notice of its intention to introduce the following resolution at the Annual Meeting. RESOLVED: that the shareholders of Sprint Corp. (“Sprint” or the “Company”) urge the Board of Directors to seek shareholder approval for future severance agreements with senior executives that provide benefits in an amount exceeding two times the sum of the executive’s base salary plus bonus. “Future severance agreements” include agreements renewing, modifying or extending existing severance agreements or employment agreements that contain severance provisions. Stockholder’s Statement in Support of the Proposal We are resubmitting this proposal, which last year received 49.9% of the yes-and-no votes cast, because we believe that it presents important issues about the shareholders’ stake in executive compensation arrangements. Sprint has entered into employment agreements with CEO William Esrey and certain other senior managers of the Company. Among other things, these agreements provide that in the event any of those executives’ employment is terminated following a change of control of the Company, the executive will be entitled to receive salary payments for 35 months, three payments equal to the highest short-term plus the highest long-term incentive compensation awards received during the preceding three years, and continuation of certain benefits. The potential magnitude of severance benefits payable to Sprint’s senior executives was highlighted recently in connection with the failed merger with MCI WorldCom. Investor and media attention focused on the payout Mr. Esrey would receive, which was estimated at over $400 million, although almost all of that amount would have stemmed from the exercise of stock options that vested when the deal was approved by Sprint’s shareholders. We recognize that severance agreements such as those the Company has entered into with Mr. Esrey and other senior executives may be appropriate in some circumstances. However, given the magnitude of the benefits payable under such agreements, and the effect of the agreements upon a change of control of the Company, we believe that Sprint should seek shareholder approval of any future such agreements. Because it may not always be practical to obtain prior shareholder approval, Sprint would have the option under this proposal of seeking approval after the material terms of the agreement were agreed upon. Institutional investors such as the California Public Employees Retirement System have recommended shareholder approval of these types of agreements in their proxy voting guidelines. Also, the Council of Institutional Investors favors shareholder approval if the amount payable exceeds 200% of the senior executive’s annual base salary. For these reasons we urge shareholders to vote FOR this proposal. The Company’s Response to the Stockholder Proposal Sprint has contingency employment agreements with a limited number of its top executives that provide for 35 months severance upon termination or job diminution following a change of control of the company. Like other large companies, Sprint believes that such severance agreements are reasonable and appropriate. According to Guide to Change of Control, Third Edition, published by Executive Compensation Advisory Services, 75 percent of chief executive officers have severance arrangements paying three times compensation or more. Four of five major competitors of Sprint provide severance payments based on periods as long or longer than the 35 months used by Sprint. The agreements are intended to provide financial security against possible job loss to key Sprint executives, particularly in the context of a potential change of control when the Board needs the objective assessment and advice of these executives to determine whether the bid is in the best interests of Sprint and its stockholders. Even after a change in control, payments will be made only if the executive is terminated without cause or resigns due to a diminution in responsibilities, authority, or compensation. The proponent concedes that nearly all of the potential benefits in connection with the terminated WorldCom merger resulted from unrealized appreciation of stock options, which appreciation is now far less than the $400 million noted by the proponent, rather than from severance agreements. The vesting of stock options upon stockholder approval of a change in control was a specific provision in Sprint’s stock option plans as well as those of other companies, and was unrelated to any executive severance agreements. Further, Sprint’s stock option plan now requires, as do the severance arrangements entered into during 2001, that a merger be consummated before a change in control occurs and any possibility of severance is triggered. The proponent suggests that stockholder approval for future severance agreements could be obtained after the material terms were agreed upon. We think this is impractical and counterproductive. The proposal would place Sprint in a competitive disadvantage in recruiting and retaining executive talent because severance arrangements offered by Sprint would be uncertain and therefore less valuable than those committed to by Sprint’s competitors whose arrangements would not be contingent upon stockholder approval. Because the proposal would limit Sprint’s flexibility to offer the competitive employment arrangements required to recruit and retain its executives, the Board recommends a vote against the proposal. C. STOCKHOLDER PROPOSAL CONCERNING CEO PAY CAP (Item 7 on Proxy Card) The Communications Workers of America Members’ Relief Fund, 501 Third Street, N.W., Washington, D.C. 20001, owner of 1,900 shares of FON Stock, has given notice of its intention to introduce the following resolution at the Annual Meeting. RESOLVED: that shareholders of Sprint Corporation (“Sprint”) ask the Board of Directors to 1) establish a cap on the total compensation that may be paid to the CEO in a given year—including salary, bonus, the grant-date present value of stock options, the grant-date present value of restricted stock, payments under long-term incentive plans, and “other annual” and “all other compensation”—equal to 50 times the average compensation paid to employees who are not exempt from coverage under the Fair Labor Standards Act in the prior year, and 2) report to shareholders on the policy prior to the 2004 annual shareholders’ meeting. Stockholder’s Statement in Support of the Proposal The compensation of chief executive officers of U.S. public companies has soared in recent years, from a median of $1.8 million in 1992 to $6.1 million in 2000, according to a report of the Conference Board. In 2001, Sprint CEO William Esrey received $1,522,769, which included all compensation besides stock options. In addition, he received options on Sprint FON and Sprint PCS stock for which Sprint reported potential values of $74,481,462 (assuming a 5% annual return over the options’ term) or $188,750,647 (assuming a 10% annual return over the options’ term). Sprint does not report the grant-date present value of stock options. The explosion in CEO pay has far outstripped gains realized by the majority of workers. According to aBusiness Week article (May 6, 2002), CEOs of large corporations in 2001 made 411 times as much as the average factory worker. In the past decade, according to the same article, while the wages of rank-and-file workers increased by 36%, the compensation of CEOs climbed 340%. There is evidence that large pay disparities can have a negative effect on worker productivity. A 1992 study by Cowherd and Levine inAdministrative Science Quarterly found that pay differentials between managers and blue collar workers, as well as within the management group, tend to reduce product quality. A study by Stanford professor Charles O’Reilly and others found that disparity between the CEO’s pay and that of lower level managers was associated with higher manager turnover. Management guru Peter Drucker argued in the mid-1980s that no CEO should earn more than 20 times the company’s lowest-paid employee to ensure that the contributions of all employees are recognized (Business Week, May 6, 2002). Drucker believed that the growing CEO-worker pay differential damages company culture and employee productivity. In a September 2002 report, a commission of the Conference Board lamented the “widespread perception of a lack of fairness since certain executives have garnered substantial compensation even as their companies and the retirement savings of their employees has collapsed.” To restore public confidence, the commission urged compensation committees to “be mindful of the differences in compensation levels throughout the corporation in setting senior executive compensation levels.” I believe this proposal is necessary to bringing balance to the differential between senior executive and employee pay. I urge shareholders to vote for this proposal. The Company’s Response to the Stockholder Proposal We believe this proposal is contrary to the interests of Sprint and its stockholders because it would place an arbitrary cap on the compensation of Sprint Chief Executive Officer. Sprint believes that the compensation of its Chief Executive Officer should be driven by competitive market forces and based on individual and company performance. The Compensation Committee, which is composed entirely of independent, non-employee directors, is responsible for assessing and appraising the performance of the Chief Executive Officer and for recommending his or her compensation to the Board. The Committee’s long-standing philosophy is to link compensation for the Chief Executive Officer to individual and company performance. The proponent’s arbitrary pay cap proposal would restrict the Committee’s role and remove from the Committee the flexibility to recognize significant accomplishments of an individual that may be critical to ensuring the long-term success of Sprint. Further, as explained in more detail in the Compensation Committee report on page 14 of this proxy statement, the Compensation Committee develops a competitive compensation package by considering market data from similarly sized companies in the telecommunications industry as well as other industries in which Sprint competes for executive, including Chief Executive Officer, talent. The pay cap called for in this proposal would place Sprint at a competitive disadvantage by limiting our ability to attract and retain the experienced and dedicated leaders necessary for its business. Accordingly, the Board recommends a vote against the proposal. D. STOCKHOLDER PROPOSAL CONCERNING CHANGE OF CONTROL PROVISIONS (Item 8 on Proxy Card) The Roque Island Gardner Homestead Corporation, 45 Exchange Street, Portland, Maine 04101, owner of 7,000 shares of FON Stock and 4,000 shares of PCS Stock, has given notice of its intention to introduce the following resolution at the Annual Meeting. WHEREAS, on April 28, 2000 in accordance with the recommendation of Sprint’s Board of Directors, Sprint shareholders voted to approve a merger between Sprint and WorldCom. WHEREAS, the proposed merger never took place, due in part to the opposition of the United States Department of Justice. WHEREAS, nevertheless, the vote for the proposed merger, as opposed to the merger itself, triggered the “change of control” provisions in certain of Sprint’s compensation plans, possibly resulting in millions of dollars of economic benefits to Sprint’s senior executive officers, according to numerous reports published in theKansas City Star. RESOLVED: that within 30 days following the 2003 annual meeting, Sprint’s Board of Directors is strongly urged to report to Sprint’s shareholders the following factual information: (a) When, under what circumstances, and by whose authority the “change of control” provisions in Sprint’s compensation plans covering senior executive officers and directors were changed so that a “change of control” was deemed to occur upon a shareholder vote in favor of a merger, as opposed to the merger actually taking place; and (b) Quantification of all economic benefits, by category, e.g., present or former cash compensation, stock option grants/benefits, etc. that flowed to each senior executive officer or director of Sprint as a result of the shareholder vote on the WorldCom merger triggering the “change of control” provisions in Sprint’s compensation plans.Pre-CIC Termination.   Stockholder’s Statement in Support of the Proposal On March 9, 2000, Sprint’s Board recommended that Sprint’s shareholders vote in favor of a proposed merger of Sprint and WorldCom. Sprint’s shareholders followed this recommendation. However, the Justice Department objected to the merger and it was abandoned. However, prior to the vote on the merger, the definition of “change of control” in certain of Sprint’s compensation programs benefiting senior executive officers and directors was changed so that a vote for a merger was deemed a “change in control” even though the merger itself never occurred. As a result of this modification, Sprint’s senior executives and directors may have received millions of dollars of benefits for a merger that never occurred. For example, theKansas City Star reported that the shareholder vote “triggered the accelerated vesting of all employee stock options…providing many senior employees with million of dollars in walkaway money.” Several of Sprint’s senior executives, including Sprint PCS President Andrew Sukawaty, left Sprint after receiving these benefits. Others that stayed returned to the same job for the same company. Sprint’s shareholders have lost billions of dollars of market capitalization in the past few years. Sprint’s shareholders are entitled to know what compensation was paid to Sprint’s senior executive officers and directors pursuant to the “change in control” provisions triggered by the vote in favor of the merger with WorldCom, which merger never occurred. We believe Sprint’s shareholders are entitled to know when, why, and by whom this change was made, and how much in economic benefits flowed from Sprint to its senior executive officers and directors as a result. Vote in favor of the resolution to find out the facts! The Company’s Response to the Stockholder Proposal We recommend that you vote against this proposal because (1) the facts assumed in part (a) of the proposal are wrong and (2) complying with part (b) of the proposal could adversely impact Sprint’s defense in a class action lawsuit currently pending in federal court in Kansas. Part (a) of the proposal is based on the same incorrect assertion made in the lawsuit—that Sprint changed the definition of “change of control” shortly before the vote on the merger. All employee options Sprint granted before the vote on the WorldCom merger that had a change in control acceleration provision used a definition of change in control that included stockholder approval of a merger. Sprint adopted that definition in 1986, at a time when many major companies had adopted similar definitions. Sprint disclosed this provision to stockholders in its 1987 proxy statement and reminded stockholders by clearly disclosing in the WorldCom merger proxy statement that their approval of the merger would accelerate vesting for most outstanding unvested options. Before 1999, Outside Director options were granted under a separate, formulaic plan. Those options did not vest upon stockholder approval of the WorldCom merger, and Sprint never amended them to do so. Outside Director options granted in 1999 were not granted under the formulaic plan, which became impractical after Sprint’s recapitalization in 1998, but under the same plan as employee stock options. As a result, these options included the same change in control definition that had been in effect for employees since 1986. Thus, the proponent’s suggestion that Sprint changed the definition of “change of control” shortly before the merger for either employees or directors is simply wrong. Part (b) of the proposal asks Sprint to disclose the economic benefits, if any, that flowed to its executive officers and directors as a result of stockholder approval of the WorldCom merger. In the lawsuit, Sprint not only denies that there was any change to the definition of change in control, Sprint maintains that many of its officers and directors received no “economic” benefit at all as a result of accelerated option vesting. To the extent any benefit might have been received by any officer or director, the parties to the lawsuit will vigorously argue how to measure that benefit. Thus, this proposal does not seek disclosure of basic facts, but of conclusions, including legal conclusions as to the meaning of complicated facts that are the subject of ongoing litigation. A discovery request in the lawsuit for the type of information the proposal seeks would be denied on those grounds. To require Sprint to respond to inquiries that would not be discoverable in the lawsuit interferes with the conduct of the litigation. Because the proposal would interfere with Sprint’s defense, the Board recommends a vote against the proposal. VI. OTHER MATTERS TO COME BEFORE THE MEETING No other matters are intended to be brought before the meeting by Sprint, and Sprint does not 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   J. Richard Devlin Executive Vice President—General Counsel, External Affairs and Corporate Secretary April     , 2003 Appendix A SPRINT CORPORATION CHARTER OF THE AUDIT COMMITTEE I. PURPOSE The primary function of the Audit Committee is to advise and assist the Board in fulfilling its oversight responsibilities to the investment community, including current and potential shareholders. The Audit Committee’s purpose includes: (a)  assisting Board oversight and review of (i)  the integrity of Sprint’s financial statements, (ii)  Sprint’s compliance with legal and regulatory requirements, and (iii)  the performance of Sprint’s internal audit function; (b)  having sole responsibility for the appointment, termination, compensation and oversight of the independent auditors; and (c)  preparing the Audit Committee report to be included in Sprint’s annual proxy statement. The Audit Committee is to act on behalf of the Board and oversee all material aspects of Sprint’s accounting and financial reporting processes and the quality and integrity of Sprint’s financial statements. Sprint’s management is responsible for preparing Sprint’s financial statements. The independent auditors are responsible for auditing those financial statements. An important part of the Audit Committee’s purpose is the coordination with other Board Committees and fostering a free, open and clear avenue of communication between management, the independent auditors, the internal auditing department, legal counsel and the Board. II. COMMITTEE COMPOSITION The Audit Committee will be comprised of at least three directors. All members of the Audit Committee must satisfy the independence requirements of the New York Stock Exchange (“NYSE”) and the other director qualification standards set forth in Sprint’s Corporate Governance Guidelines. Further, to be considered independent for purposes of Audit Committee membership, Audit Committee members may not directly or indirectly receive any compensation from Sprint other than for serving on the Board and the Board Committees as required by applicable regulation. All members of the Audit Committee will be financially literate. At least one member will have accounting or related financial management expertise or other comparable experience resulting in financial sophistication sufficient to meet applicable regulations. Independence, financial competence and the ability to devote sufficient time to serving on the Audit Committee will be determined by the Board based on applicable regulation, including the NYSE listing standards. The members and the chair of the Audit Committee are appointed by the Board annually and serve until removed by the Board or their successors have been duly appointed and qualified. III. MEETINGS The Audit Committee will meet as often as required to fulfill its responsibilities as set forth in this Charter, but no less than four times a year. Meetings may be held in person or telephonically. The Chair or his or her designee will preside over all meetings. The Audit Committee will meet regularly with management, the head of the internal auditing department and the independent auditors in separate sessions to discuss any matters that the Audit Committee or any of these groups believes should be discussed privately. The Audit Committee will report regularly to the Board. IV. PRINCIPAL RESPONSIBILITIES AND DUTIES To fulfill its responsibilities and duties, the Audit Committee will: A. Independent Auditors 1. Engage the independent auditors, specifying the scope and general extent of their work and the fees to be paid for their work. The Audit Committee will have sole authority to hire and terminate the independent auditors. The Audit Committee will make an annual determination whether to retain the current independent auditors or appoint new independent auditors. In addition, the Audit Committee will have sole authority to approve all engagement fees and terms with the independent auditors for audit, review and attest engagements. The Audit Committee will also have sole authority to approve all permissible non-audit engagements with the independent auditors. The Audit Committee may delegate pre-approval authority to one or more of its members but any decisions made by the delegate must be reported to the Audit Committee at its next meeting. The independent auditors are ultimately accountable to, and will report directly to, the Audit Committee of Sprint. 2. Oversee independence of the independent auditors by: · Receiving from the independent auditors, on a periodic basis, a formal written statement delineating all relationships between the independent auditors and Sprint and its executive officers and directors, consistent with applicable regulations; and · Reviewing and discussing with the Board, as necessary, and the independent auditors, on a periodic basis, any disclosed relationships or services between the independent auditors and Sprint or its executive officers or directors, or any other circumstances that may impact the objectivity and independence of the independent auditors. 3. Oversee the quality-control process of the independent auditors by, at least annually, obtaining and reviewing reports from the independent auditors describing the independent auditors’ internal quality-control procedures; any material issues raised by the most recent internal quality control review, or peer review, of the independent auditors, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the independent auditors; and any steps taken to deal with any such issues. The evaluation of the independent auditors will include the review and evaluation of the lead partner. The Audit Committee will review and discuss with the Board its determinations regarding the independent auditor’s qualifications and performance. B. Financial Reporting and Processes 1. Review the integrity of Sprint’s financial reporting processes, both internal and external, with input from the independent auditors and the internal auditing department. 2. Discuss the annual audited financial statements and quarterly financial statements with management and the independent auditors, including Sprint’s disclosures under “Management Discussion and Analysis of Financial Condition and Results of Operations.” 3. Discuss with management the CEO’s and CFO’s evaluations of Sprint’s disclosure controls and procedures. 4. Timely review the following with management and the independent auditors: · Significant issues regarding accounting principles and financial statement presentations, including changes in Sprint’s selection or application of accounting principles and the effect of regulatory and accounting initiatives, and issues as to the adequacy of Sprint’s internal controls and any special steps adopted in light of material control deficiencies; · Analyses prepared by management or the independent auditors setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements; · Critical accounting policies and practices to be used; · Any material written communication between the independent auditors and management; and · Such other matters required by applicable regulations, including the NYSE listing standards. 5. Discuss generally with management the type of information to be disclosed in earnings press releases and earnings guidance as well as financial information provided to analysts and rating agencies. 6. Following completion of the annual audit, review separately with each of management, the independent auditors and the internal auditing department any significant difficulties encountered during the course of the review or audit, including any restrictions on the scope of work or access to required information and management’s response thereto. 7. Review and resolve any significant disagreement between management and the independent auditors or the internal auditing department in connection with the preparation of the financial statements. 8. Review the impact of pronouncements of the Financial Accounting Standards Board, SEC, and other governing or regulating bodies on Sprint’s financial statements. C. Ethical and Legal Compliance 1. Review with Sprint’s counsel any legal matters that could have a significant impact on Sprint’s financial statements and any material reports received from regulators or governmental agencies. 2. Review Sprint’s policies concerning ethics and business conduct and review management’s monitoring of these policies. 3. Adopt and implement a policy (A) to receive, handle and retain complaints regarding accounting, internal accounting controls and auditing matters and (B) to provide for the confidential, anonymous submissions by employees making such complaints. 4. Review treatment of complaints under the policy referenced in IV.C.3. above. 5. Assist the Board in oversight of Sprint’s compliance with legal and regulatory requirements. D. General 1. Annually review and reassess the adequacy of this Charter. 2. Review activities, organizational structure and qualifications of the internal auditing department. 3. Review guidelines and policies with respect to risk assessment and risk management. 4. Conduct any investigation appropriate to fulfilling its responsibilities, using direct access to the independent auditors as well as any Sprint employee as appropriate. 5. The Audit Committee will set hiring policies for employees or former employees of the independent auditors. 6. Annually evaluate the Audit Committee’s effectiveness, at a minimum addressing the matters required by the listing standards of the NYSE. 7. Perform any other activities consistent with this Charter, Sprint’s bylaws and articles of incorporation and governing law, as the Audit Committee or the Board deems necessary or appropriate. 8. Delegate authority to subcommittees when appropriate. V. OUTSIDE ADVISORS The Audit Committee has the authority, at Sprint’s expense, to engage the services of outside advisors to assist it in the discharge of its duties. Appendix B ARTICLE FIFTH, marked to show the proposed amendments: Fifth Section 1.    Number of Directors.    The number of Directors shall not be less than eight nor more than 20 as may be determined from time to time by the affirmative vote of the majority of the Board of Directors. Section 2.    Election of Directors.    (a)  Subject to clause (b) below, the holders of Corporation Common Stock shall have the right to elect that number of Directors equal to the excess of (x) the total number of Directors over (y) the number of Directors, if any, that the holders of Preferred Stock, voting separately by class or series, are entitled to elect in accordance with the provisions of ARTICLE SIXTH of these Articles of Incorporation. (b)  So long as Section 310 remains in effect, under no circumstances shall an Alien Director elected by the holders of Corporation Common Stock be qualified to serve as a Director if the number of Aliens who would then be serving as members of the Board of Directors, including such elected Alien, would constitute more than the maximum number of Aliens permitted by Section 310 on the Board of Directors. (c)  The Directors (other than any Directors elected by the holders of any one or more classes or series of Preferred Stock having the right, voting separately by class or series, to elect Directors) shall be divided into three classes, designated Class I, Class II and Class III, with the term of office of one class expiring each year. The number of Class I, Class II and Class III Directors shall consist, as nearly as practicable, of one third of the total number of Directors (other than any Directors elected by the holders of any one or more classes or series of Preferred Stock having the right, voting separately by class or series, to elect Directors). At each annual meeting of stockholders of this Corporation, successors to the class of Directors whose term expires at that annual meeting shall be elected for a three-year term.(d)Whenever the holders of any one or moreclasses or series of Preferred Stock shall have the right, voting separately by class or series, to elect Directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of these Articles of Incorporation applicable thereto,and such Directors so elected shall not be divided into classes pursuant to this ARTICLE FIFTH unless expressly provided by such terms. Section 3.Change in Number of Directors.    If the number of Directors (other than any Directors elected by the holders of any one or more classes or series of Preferred Stock having the right, voting separately by class or series, to elect Directors) is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of Directors in each class as nearly equal as possible.Section 4. Term of Office.    (a)  Each Directorelected at or after the 2004 annual meeting of stockholders of this Corporationshall be elected for athree-year term.one-year term. Directors elected before the 2004 annual meeting of stockholders of this Corporation shall serve the remaining duration of their three-year terms.A Director shall hold office until the annual meeting for the year in which hisor herterm expires and untilhisa successorshall behas been elected andshall qualifyqualified to serve,subject toexcept in case of the Director’s prior death, resignation, retirement, disqualification or removal from office. (b)  Any vacancy on the Board of Directors (whether resulting from an increase in the total number of Directors, the departure of one of the Directors or otherwise) may be filled by the affirmative vote of a majority of the Directors elected by the same class or classes of stockholders which would be entitled to elect the Director who would fill such vacancy if the annual meeting of stockholders of this Corporation were held on the date on which such vacancy occurred, provided that at any time when there is only one such Director so elected and then serving, such Director may fill such vacancy and, provided further, that at any time when there are no such Directors then serving, the stockholders of the class or classes entitled to elect the Director who will fill such vacancy shall have the right to fill such vacancy. (c)  Anyadditional Director of any class elected to fill a vacancy resulting from an increase in the number of Directors of such class shall hold office for a term that shall coincide with the remaining term of the Directors of that class, but in no case will a decrease in the number of Directors shorten the term of any incumbent Director. Any Director elected to fillDirector who fills a vacancy not resulting from an increase in the number of Directors shall have the same remaining term as that of hisor herpredecessor. Section 5. 4.Rights, Powers, Duties, Rules and Procedures; Amendment of Bylaws.    (a)  Except to the extent prohibited by law or as set forth in these Articles of Incorporation or the Bylaws, the Board of Directors shall have the right (which, to the extent exercised, shall be exclusive) to establish the rights, powers, duties, rules and procedures that from time to time shall govern the Board of Directors and each of its members, including, without limitation, the vote required for any action by the Board of Directors, and that from time to time shall affect the Directors’ power to manage the business and affairs of this Corporation. Except to the extent required by law or as set forth in these Articles of Incorporation or the Bylaws, no Bylaw shall be adopted by stockholders which shall impair or impede the implementation of the foregoing. (b)  The Board of Directors is expressly authorized and empowered, in the manner provided in the Bylaws of this Corporation, to adopt, amend and repeal the Bylaws of this Corporation in any respect to the full extent permitted by the General Corporation Code not inconsistent with the laws of the General Corporation Code or with these Articles of Incorporation, provided that prior to November 23, 2002, ARTICLE IV, SECTION 13 of the Bylaws may not be amended, altered, repealed, superseded or made inoperative or ineffective by adoption of other provisions to the Bylaws or these Articles of Incorporation (any such action, a “CP Covered Bylaws Amendment”) without the affirmative vote of the holders of record of (i) a majority of the votes represented by the shares of PCS Stock and Class A Common Stock then outstanding, voting together as a single class in accordance with ARTICLE SIXTH, Section 3.2(d), and (ii) a majority of the votes represented by the shares of Corporation Common Stock, voting together as a single class, at any annual or special meeting of stockholders, the notice of which shall have specified or summarized the proposed CP Covered Bylaws Amendment.. Section6.5.    Removal.    A Director (other than a Director elected by the holders of any class or series of Preferred Stock having the right, voting separately by class or series, to elect Directors) may be removed only for cause. No Director so removed may be reinstated for so long as the cause for removal continues to exist. Such removal for cause may be effected only by the affirmative vote of the holders of a majority of the votes represented by the shares of the class or classes of stockholders which were entitled to elect such Director. Section7.6.Definitions.    Certain capitalized terms used in this ARTICLE FIFTH without definition have the meanings set forth in Section 10 of ARTICLE SIXTH. Appendix C EMPLOYEES STOCK PURCHASE PLAN AMENDED AND RESTATED FOR 2003 AND SUBSEQUENT OFFERINGS 1.    Purpose The purpose 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 (k) “Code” 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. If an offering permits participants to purchase more than one class of Common Stock, a separate Account shall be established for each participant for each class of Common Stock the participant elects to purchase. The funds allocated to an Employee’s Accounts 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 applicable Common Stock for composite transactions for the date in question or, if no trade of such Common Stock shall have been made on that date, the next preceding date on which there was a trade of such Common Stock. (c) “Board” shall mean the Board of Directors of Sprint. (d) “Code” shall mean the Internal Revenue Code of 1986, as amended. amended from time to time, including any rules and regulations promulgated thereunder, along with Treasury and IRS interpretations thereof. Reference to any section or subsection of the Code includes reference to any comparable or succeeding provisions of any legislation that amends, supplements or replaces such section or subsection.   (l) “Common Stock” means the Series 1 common stock, par value $2.00 per share, of the Corporation or any security into which such shares of Common Stock may be changed by reason of any transaction or event of the type referred to in Section 12 of this Plan. (e) “Committee” shall mean (m) “Compensation Committee” means the Human Capital and Compensation Committee of the Board, unlessor any other committee of the Board designatesor subcommittee thereof authorized to administer this Plan in accordance with Section 11 of the Plan. (n) “Corporation” means Sprint Nextel Corporation, a Kansas corporation, and its successors. (o) “Date of Grant” means the date as of which an Award is determined to be effective and designated in a resolution by the Compensation Committee or an Authorized Officer and is granted pursuant to the Plan. The Date of Grant shall not be earlier than the date of the resolution and action therein by the Compensation Committee or an Authorized Officer. In no event shall the Date of Grant be earlier than the Effective Date. (p) “Detrimental Activity,” except as may be otherwise specified in a Participant’s Evidence of Award, means: (i) engaging in any activity of competition, as specified in any covenant not to compete set forth in any agreement between a Participant and the Corporation or a Subsidiary, including, but not limited to, the Participant’s Evidence of Award, during the period of restriction specified in the agreement prohibiting the Participant from engaging in such activity; (ii) engaging in any activity of solicitation, as specified in any covenant not to solicit set forth in any agreement between a Participant and the Corporation or a Subsidiary, including, but not limited to, the Participant’s Evidence of Award, during the period of restriction specified in the agreement prohibiting the Participant from engaging in such activity; (iii) the disclosure to anyone outside the Corporation or a Subsidiary, or the use in other than the Corporation’s or a Subsidiary’s business, (A) without prior written authorization from the Corporation, of any confidential, proprietary or trade secret information or material relating to the business of the Corporation and its Subsidiaries, acquired by the Participant during his or her service with the Corporation or any of its Subsidiaries, or (B) in violation of any covenant not to disclose set forth in any agreement between a Participant and the Corporation or a Subsidiary, including, but not limited to, the Participant’s Evidence of Award, during the period of restriction specified in the agreement prohibiting the Participant from engaging in such activity; (iv) the (A) failure or refusal to disclose promptly and to assign to the Corporation or a Subsidiary upon request all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during his or her service with the Corporation or any of its Subsidiaries, relating in any manner to the actual or anticipated business, research or development work of the Corporation or any Subsidiary or the failure or refusal to do anything reasonably necessary to enable the Corporation or any Subsidiary to secure a patent where appropriate in the United States and in other countries, or (B) violation of any development and inventions provision set forth in any agreement between a Participant and the Corporation or a Subsidiary, including, but not limited to, the Participant’s Evidence of Award; (v) if the Participant is or was an officer, activity that the Board determines entitles the Corporation to seek recovery from an officer under any policy promulgated by the Board as in effect when an Award was made or vested under this Plan; or (vi) activity that results in termination of the Participant’s employment for Cause. (q) “Director” means a member of the Board. (r) “Disability” shall mean, in the case of an Employee, termination of employment under circumstances that would make the Employee eligible to receive benefits under the Sprint Nextel Basic Long-Term Disability Plan, as it may be amended from time to time, or any successor plan, program, agreement or arrangement, and in the case of a Participant who is a Non-Employee Director, termination of service as a Non-Employee Director under circumstances that would make the Non-Employee Director eligible to receive Social Security disability benefits. For purposes of paying an amount that is subject to Section 409A of the Code at a time that references Disability, Disability shall mean Separation from Service under these circumstances. (s) “Effective Date” means the date that this Plan is approved by the stockholders of the Corporation. (t) “Employee” means any employee of the Corporation or of any Subsidiary. (u) “Employer” means the Corporation or any successor thereto or a Subsidiary. (v) “Evidence of Award” means an agreement, certificate, resolution or other written evidence, whether or not in electronic form, that sets forth the terms and conditions of an Award. Each Evidence of Award shall be subject to this Plan and shall contain such terms and provisions, consistent with this Plan, as the Compensation Committee or an Authorized Officer may approve. An Evidence of Award may be in an electronic medium, may be limited to notation on the books and records of the Corporation and, unless determined otherwise by the Compensation Committee, need not be signed by a representative of the Corporation or a Participant. If an Evidence of Award is limited to notation on the books and records of the Corporation, in the event of any inconsistency between a Participant’s records and the records of the Corporation, the records of the Corporation will control. (w) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder. Reference to any section or subsection of the Exchange Act includes reference to any comparable or succeeding provisions of any legislation that amends, supplements or replaces such section or subsection. (x) “Executive Officer” means an officer of the Corporation that is subject to the liability provisions of Section 16 of the Exchange Act. (y) “Free-Standing Appreciation Right” means an Appreciation Right granted pursuant to Section 5 of this Plan that is not granted in tandem with an Option Right. (z) “Full-Value Awards” means Awards granted pursuant to the terms of this Plan that result in the Corporation transferring the full value of any underlying share of Common Stock granted pursuant to an Award. Full-Value Awards include all Awards other than Option Rights, Appreciation Rights or other awards granted pursuant to Section 10 of this Plan with rights which are substantially similar to an Option Right or Appreciation Right. (aa) “Good Reason,” except as may be otherwise specified in a Participant’s Evidence of Award, shall have the meaning assigned such term in (i) the employment agreement, if any, between a Participant and an Employer, or (ii) during the CIC Severance Protection Period (as defined in the CIC Severance Plan), the CIC Severance Plan, if a Participant is a participant in such plan. (bb) “Incentive Stock Options” means Option Rights that are intended to qualify as “incentive stock options” under Section 422 of the Code. (cc) “Incumbent Directors” means the individuals who, as of the Effective Date, are Directors of the Corporation, and any individual becoming a Director after the Effective Date whose election, nomination for election by the Corporation’s stockholders, or appointment, was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Corporation in which such person is named as a nominee for director, without objection to such nomination); provided, however, that an individual shall not be an Incumbent Director if the individual’s election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board. (dd) “Management Objectives” means the measurable performance objective or objectives established pursuant to this Plan for Participants who have received grants of Performance Shares or Performance Units or, when so determined by the Compensation Committee or an Authorized Officer, Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, other awards contemplated by Section 10 of this Plan or dividend credits pursuant to this Plan. Management Objectives may be described in terms of Corporation-wide objectives or objectives that are related to the performance of a joint venture, Subsidiary, business unit, division, department, business segment, region or function and/or that are related to the performance of the individual Participant. The Management Objectives may be made relative to the performance of other companies or an index covering multiple companies. The Management Objectives applicable to any Qualified Performance-Based Award will be based on specified levels of or growth in one or more of the following criteria: (i) net sales; (ii) revenue; (iii) revenue growth or product revenue growth; (iv) operating income (before or after taxes, including operating income before depreciation and amortization); (v) income (before or after taxes and before or after allocation of corporate overhead and bonus); (vi) net earnings; (vii) earnings per share; (viii) net income (before or after taxes); (ix) return on equity; (x) total stockholder return; (xi) return on assets or net assets; (xii) appreciation in and/or maintenance of share price; (xiii) market share; (xiv) gross profits; (xv) earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization); (xvi) economic value-added models or equivalent metrics; (xvii) reductions in costs; (xviii) cash flow or cash flow per share (before or after dividends); (xix) return on capital (including return on total capital or return on invested capital); (xx) cash flow return on investment; (xxi) improvement in or attainment of expense levels or working capital levels; (xxii) operating, gross, or cash margins; (xxiii) year-end cash; (xxiv) debt reductions; (xxv) stockholder equity; (xxvi) regulatory achievements; (xxvii) operating performance; (xxviii) market expansion; (xxix) customer acquisition; (xxx) customer satisfaction; (xxxi) employee satisfaction; (xxxii) implementation, completion, or attainment of measurable objectives with respect to research, development, products or projects and recruiting and maintaining personnel; or (xxxiii) a published or a special index deemed applicable by the Compensation Committee or any of the above criteria as compared to the performance of any such index, including, but not limited to, the Dow Jones U.S. Telecom Index. On or before the Date of Grant, in connection with the establishment of Management Objectives, the Compensation Committee may exclude the impact on performance of charges for restructuring, acquisitions, divestitures, discontinued operations, extraordinary items, and other unusual or non-recurring items and the cumulative effects of changes in tax law or accounting principles, as such are defined by generally accepted accounting principles or the Securities and Exchange Commission and as identified in the Corporation’s audited financial statements, notes to such financial statements or management’s discussion and analysis in the Corporation’s annual report or other filings with the Securities and Exchange Commission; any such exclusion shall be indicated in the applicable Evidence of Award. With respect to any grant under the Plan, if the Compensation Committee determines that a change in the business, operations, corporate structure or capital structure of the Corporation, or the manner in which it conducts its business, or other events or circumstances render the Management Objectives unsuitable, the Compensation Committee may in its discretion modify such Management Objectives or the related minimum acceptable level or levels of achievement, in whole or in part, as the Compensation Committee deems appropriate and equitable, except in the case of a Qualified Performance-Based Award when such action would result in the loss of the otherwise available exemption of such Award under Section 162(m) of the Code. In such case, the Compensation Committee will not make any modification of the Management Objectives or the minimum acceptable level or levels of achievement with respect to such Qualified Performance-Based Award. (ee) “Market Value Per Share” means, as of any particular date the closing sale price of the Common Stock as reported on the New York Stock Exchange Composite Tape or, if not listed on such exchange, on any other national securities exchange on which the Common Stock is listed. If the Common Stock is not traded as of any given date, the Market Value Per Share means the closing price for the Common Stock on the principal exchange on which the Common Stock is traded for the immediately preceding date on which the Common Stock was traded. If there is no regular public trading market for such Common Stock, the Market Value Per Share of the Common Stock shall be the fair market value of the Common Stock as determined in good faith by the Board. The Board is authorized to adopt another fair market value pricing method, provided such method is stated in the Evidence of Award, and is in compliance with the fair market value pricing rules set forth in Section 409A of the Code. (ff) “Nextel Plan” means the Nextel Communications, Inc. Amended and Restated Incentive Equity Plan. (gg) “Non-Employee Director” means a member of the Board who is not an Employee. (hh) “Non-Qualified Options” means Option Rights that are not intended to qualify as “incentive stock options” under Section 422 of the Code. (ii) “Normal Retirement” means, with respect to any Employee, termination of employment (other than termination for Cause or due to death or Disability) at or after age 65. For purposes of paying an amount that is subject to Section 409A of the Code at a time that references Normal Retirement, Normal Retirement shall mean Separation from Service at or after age 65. (jj) “Optionee” means the Participant named in an Evidence of Award evidencing an outstanding Option Right. (kk) “Option Price” means the purchase price payable on exercise of an Option Right. (ll) “Option Right” means the right to purchase shares of Common Stock upon exercise of a Non-Qualified Option or an Incentive Stock Option granted pursuant to Section 4 of this Plan. (mm) “Participant” means a person who is selected by the Board, the Compensation Committee or an Authorized Officer to receive benefits under this Plan and who is at the time (i) an Employee or a Non-Employee Director, or (ii) providing services to the Corporation or a Subsidiary, including but not limited to, a consultant, an advisor, independent contractor, or other non-Employee of the Corporation or any one or more of its Subsidiaries. (nn) “Performance Period” means, in respect of a Performance Share or Performance Unit, a period of time established pursuant to Section 8 of this Plan within which the Management Objectives relating to such Performance Share or Performance Unit are to be achieved. (oo) “Performance Share” means a bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to Section 8 of this Plan. (pp) “Performance Unit” means a bookkeeping entry awarded pursuant to Section 8 of this Plan that records a unit equivalent to $1.00 or such other value as is determined by the Compensation Committee. (qq) “Person” has the meaning set forth in Section 2(h)(i). (rr) “Plan” means this Sprint Nextel Corporation 2007 Omnibus Incentive Plan, as it may be amended from time to time. (ss) “Plan Year” has the meaning set forth in Section 9(g) and (h). (tt) “Pre-CIC Termination” means the termination of a Participant’s employment without Cause, provided that both (i) the termination was made in the six (6) month period prior to a Change in Control at the request of a third party in contemplation of a Change in Control, and (ii) the Change in Control occurs. For purposes of paying an amount that is subject to Section 409A of the Code at a time that references a Pre-CIC Termination, Pre-CIC Termination shall mean Separation from Service under these circumstances (uu) “Predecessor Plans” means (i) the Management Incentive Stock Option Plan, effective February 18, 1995, (ii) the Sprint 1997 Plan, and (iii) the Nextel Plan. (vv) “Qualified Performance-Based Award” means any Award or portion of an Award that is intended to satisfy the requirements for “qualified performance-based compensation” under Section 162(m) of the Code. (ww) “Restricted Stock” means shares of Common Stock granted or sold pursuant to Section 6 of this Plan as to which neither the substantial risk of forfeiture nor the prohibition on transfer has expired. (xx) “Restricted Stock Unit” means an award granted or sold pursuant to Section 7 of this Plan of the right to receive shares of Common Stock or cash at the end of the Restriction Period. (yy) “Restriction Period” means the period of time during which Restricted Stock Units are subject to restrictions, as provided in Section 7 of this Plan. (zz) “Separation From Service” means a “separation from service” as such term is defined under Code Section 409A and the Treasury regulations issued thereunder. Except as otherwise required to comply with Code Section 409A, an Employee shall be considered not to have had a Separation From Service where the level of bona fide services performed continues at a level that is at least 21 percent or more of the average level of service performed by the Employee during the immediately preceding 36-month period (or if providing services for less than 36 months, such lesser period) after taking into account any services that the Employee provided prior to such date or that the Corporation and the Employee reasonably anticipate the Employee may provide (whether as an Employee or independent contractor) after such date. For purposes of the determination of whether a Participant has had a “separation from service” as described under Code Section 409A and the guidance and Treasury regulations issued thereunder, the terms “Sprint Nextel,” “employer” and “service recipient” mean Sprint Nextel Corporation and any affiliate with which Sprint Nextel Corporation would be considered a single employer under Code Section 414(b) or 414(c), provided that in applying Code Sections 1563(a)(1), (2), and (3) for purposes of determining a controlled group of corporations under Code Section 414(b), the language “at least 50 percent” is used instead of “at least 80 percent”, each place it appears in Code Sections 1563(a)(1), (2) and (3), and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Code Section 414(c), “at least 50 percent” is used instead of “at least 80 percent” each place it appears in Treasury Regulation Section 1.414(c)-2. (aaa) “Six-Month Payment Delay” means the required delay in payment to a Participant who is a “specified employee” of amounts subject to Section 409A that are paid upon Separation from Service, pursuant to Section 409A(a)(2)(B)(i) of the Code. When a Six-Month Delay is required, the payment date shall be not before the date which is six months after the date of Separation from Service or, if earlier, the date of the Participant’s death. The term specified employee shall have the meaning ascribed to this term under Section 409A of the Code. (bbb) “Spread” means the excess of the Market Value Per Share on the date when an (i) Option Right is exercised over the Option Price, or (ii) Appreciation Right is exercised over the Option Price or Base Price provided for in the related Option Right or Free-Standing Appreciation Right, respectively. (ccc) “Sprint 1997 Plan” means the 1997 Long-Term Stock Incentive Program, effective April 15, 1997. (ddd) “Subsidiary” (effective December 8, 2010) means (i) any individual, corporation, partnership, association, joint-stock company, trust, incorporated organization or government or political subdivision thereof, that directly, or through one or more intermediaries, controls, or is controlled by, or is under common control with, the Corporation, or (ii) any entity in which the Corporation has a significant equity interest, as determined by the Compensation Committee. “Subsidiary” (prior to December 8, 2010) means a corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than 50% of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Corporation, except that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation in which the Corporation owns or controls, directly or indirectly, more than 50% of the total combined voting power represented by all classes of stock issued by such corporation at the time of grant. (eee) “Substitute Awards” means Awards that are granted in assumption of, or in substitution or exchange for, outstanding awards previously granted by an entity acquired directly or indirectly by the Corporation or with which the Corporation directly or indirectly combines. (fff) “Tandem Appreciation Right” means an Appreciation Right granted pursuant to Section 5 of this Plan that is granted in tandem with an Option Right. (ggg) “Ten Percent Stockholder” shall mean any Participant who owns more than 10% of the combined voting power of all classes of stock of the Corporation, within the meaning of Section 422 of the Code. (hhh) “Termination Date,” for purposes of this Plan, except as may be otherwise prescribed by the Compensation Committee or an Authorized Officer in an Evidence of Award, shall mean (i) with respect to any Employee, the date on which the Employee ceases to be employed by an Employer, or (ii) with respect to any Participant who is not an Employee, the date on which such Participant’s provision of services to the Corporation or any one or more of its Subsidiaries ends. (iii) “Voting Stock” means securities entitled to vote generally in the election of Directors. 3. Shares Subject to this Plan. (a) Maximum Shares Available Under Plan. (i) Subject to adjustment as provided in Section 12 of this Plan, the maximum aggregate number of shares of Common Stock that may be issued or delivered under the Plan is 34,500,000 shares of Common Stock plus the shares of Common Stock available under the Sprint 1997 Plan as of April 15, 2007 and the Nextel Plan as of the Effective Date. Any shares of Common Stock underlying Full-Value Awards that are issued or delivered under the Plan or that are granted under any Predecessor Plan after December 31, 2006 shall be counted against the share limit described above as 2.50 shares of Common Stock for every one share of Common Stock issued or delivered in connection with such Full-Value Award, and any shares of Common Stock covered by an Award, other than a Full-Value Award, shall reduce such share limit by one share for every one share of Common Stock covered by such Award. To the extent that a share of Common Stock that was subject to a Full-Value Award that counted as 2.50 shares of Common Stock against the Plan reserve pursuant to the preceding sentence again becomes available for grant under the Plan, as set forth in Section 3(a)(ii)(A), the Plan reserve shall be credited with 2.50 shares of Common Stock, and to the extent that a share of Common Stock that underlies an Award, other than a Full-Value Award, again becomes available for grant under the Plan, as set forth in Section 3(a)(ii)(A), the Plan reserve shall be credited with one share of Common Stock. Common Stock to be issued or delivered pursuant to the Plan may be authorized and unissued shares of Common Stock, treasury shares or a combination of the foregoing. (ii) In addition to the shares of Common Stock authorized in Section 3(a)(i): (A) any (1) Option Right, Appreciation Right or other Award (that is not a Full-Value Award) granted pursuant to this Plan that terminates or is forfeited without having been exercised in full, (2) Full-Value Award granted pursuant to this Plan that terminates or is forfeited, or (3) Award granted pursuant to this Plan is settled (or can be paid only) in cash, then the underlying shares of Common Stock, to the extent of any such forfeiture, termination or cash settlement, again shall be available for grant under this Plan and credited toward the Plan limit as set forth in Section 3(a)(i). (B) any (1) option or stock appreciation right granted pursuant to the Predecessor Plans that terminates, is forfeited without having been exercised in full or is settled in cash, then the underlying shares of Common Stock, to the extent of any such forfeiture, termination or cash settlement, shall be available for grant under this Plan and credited toward the Plan limit as one share of Common Stock for every one share of Common Stock allocable to any such award, or (2) award other than an option or a stock appreciation right granted pursuant to the Predecessor Plans that terminates, is forfeited or is settled in cash, then the underlying shares of Common Stock, to the extent of any such forfeiture, termination or cash settlement, shall be available for grant under this Plan and credited toward the Plan limit as 2.50 shares of Common Stock for every one share of Common Stock allocable to any such award. (iii) Shares of Common Stock that are tendered, whether by physical delivery or by attestation, to the Corporation by a Participant or withheld from the Award by the Corporation as full or partial payment of the exercise or purchase price of any Award or in payment of any applicable withholding for Federal, state, city, local or foreign taxes incurred in connection with the exercise, vesting or earning of any Award under the Plan or under the Predecessor Plans will not become available for future grants under the Plan. With respect to an Appreciation Right, when such Appreciation Right is exercised and settled in shares of Common Stock, the shares of Common Stock subject to such Appreciation Right shall be counted against the shares of Common Stock available for issuance under the Plan as one share of Common Stock for every one share of Common Stock subject thereto, regardless of the number of shares of Common Stock used to settle the Appreciation Right upon exercise. (b) Life-of-Plan Limits. Notwithstanding anything in this Section 3, or elsewhere in this Plan, to the contrary and subject to adjustment pursuant to Section 12 of this Plan, the aggregate number of shares of Common Stock actually issued or transferred by the Corporation upon the exercise of Incentive Stock Options shall not exceed 150,000,000. (c) Individual Participant Limits. Notwithstanding anything in this Section 3, or elsewhere in this Plan, to the contrary and subject to adjustment pursuant to Section 12 of this Plan: (i) No Participant shall be granted Option Rights or Appreciation Rights or other awards granted pursuant to Section 10 of this Plan with rights which are substantially similar to Option Rights or Appreciation Rights, in the aggregate, for more than 5,000,000 shares of Common Stock during any calendar year. (ii) For grants of Qualified Performance-Based Awards, no Participant shall be granted Restricted Stock, Restricted Stock Units, Performance Shares or other awards granted pursuant to Section 10 of this Plan with rights which are substantially similar to Performance Shares, in the aggregate, for more than 2,500,000 shares of Common Stock during any calendar year. (iii) For grants of Qualified Performance-Based Awards, no Participant shall be granted Performance Units or other awards granted pursuant to Section 10 of this Plan with rights which are substantially similar to Performance Units, in the aggregate, for more than $10,000,000 during any calendar year. (d) Substitute Awards. Any Substitute Awards granted by the Corporation shall not reduce the shares of Common Stock available for Awards under the Plan and will not count against the limits specified in Section 3(c) above. 4. Option Rights. The Compensation Committee or, in accordance with Section 11(d), an Authorized Officer may, from time to time and upon such terms and conditions as it or the Authorized Officer may determine, grant Option Rights to Participants. Each such grant will utilize any or all of the authorizations as specified in the following provisions: (a) Each grant will specify the number of shares of Common Stock to which it pertains, subject to the limitations set forth in Section 3 of this Plan. (b) Each Option Right will specify an Option Price per share of Common Stock, which may not be less than the Market Value Per Share on the Date of Grant. In the case of an Incentive Stock Option granted to a Ten Percent Stockholder, the Option Price per share of Common Stock shall not be less than one hundred ten percent (110%) of the Market Value Per Share on the Date of Grant. (c) Each Option Right will specify whether the Option Price will be payable (i) in cash or by check or by wire transfer of immediately available funds, (ii) by the actual or constructive transfer to the Corporation of shares of Common Stock owned by the Optionee for at least 6 months (or other consideration authorized pursuant to Section 4(d)) having a value at the time of exercise equal to the total Option Price, (iii) by a combination of such methods of payment and may either grant to the Participant or retain in the Compensation Committee the right to elect among the foregoing alternatives, or (iv) by such other methods as may be approved by the Compensation Committee. No fractional shares of Common Stock will be issued or accepted. (d) To the extent permitted by law, any grant may permit deferred payment of the Option Price from the proceeds of sale through a bank or broker designated by, and on a date satisfactory to, the Corporation of some or all of the shares of Common Stock to which such exercise relates. (e) Successive grants may be made to the same Participant whether or not any Option Rights previously granted to such Participant remain unexercised. (f) Each grant will specify the period or periods of continuous service by the Optionee with the Corporation or any Subsidiary that is necessary before the Option Rights or installments thereof will become exercisable. (g) Any grant of Option Rights may specify Management Objectives that must be achieved as a condition to the exercise of such rights. Each grant may specify in respect of such Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of Option Rights that will become exercisable if performance is at or above the minimum level(s), but falls short of full achievement of the specified Management Objectives. The grant will specify that, before the exercise of such Option Rights become exercisable, the Compensation Committee must certify that the Management Objectives have been satisfied. (h) Any grant of Option Rights may provide for the earlier exercise of such Option Rights or other modifications in the event of termination without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, a Change in Control, or the grant of a Substitute Award. (i) Option Rights granted under this Plan may be (i) options, including, without limitation, Incentive Stock Options, (ii) Non-Qualified Options, or (iii) combinations of the foregoing. Incentive Stock Options may be granted only to Participants who meet the definition of “employee” under Section 3401(c) of the Code. (j) The exercise of an Option Right will result in the cancellation on a share-for-share basis of any related Tandem Appreciation Right authorized under Section 5 of this Plan. (k) No Option Right will be exercisable more than ten (10) years from the Date of Grant. In the case of an Incentive Stock Option granted to an Employee who is a Ten Percent Stockholder, the Incentive Stock Option will not be exercisable more than five (5) years from the Date of Grant. (l) An Option Right granted hereunder may be exercisable, in whole or in part, by written notice delivered in person, by mail or by approved electronic medium to the Treasurer of the Corporation at its principal office, or by such other means as the Treasurer or other authorized representative of the Corporation shall designate, specifying the number of shares of Common Stock to be purchased and accompanied by payment thereof and otherwise in accordance with the Evidence of Award pursuant to which the Option Right was granted. (m) No grant of Option Rights will authorize the payment of dividend equivalents on the Option Right. (n) Each grant of Option Rights will be evidenced by an Evidence of Award, which Evidence of Award will describe such Option Rights, and contain such other terms as the Compensation Committee or Authorized Officer may approve. (o) Except as provided in an Evidence of Award, in the event of an Optionee’s termination of employment or service, any Option Rights that have not vested as of the Optionee’s Termination Date will be cancelled and immediately forfeited, without further action on the part of the Corporation or the Compensation Committee, and the Optionee will have no further rights in respect of such Option Rights. 5. Appreciation Rights. (a) The Compensation Committee or, in accordance with Section 11(d), an Authorized Officer may grant (i) to any Optionee, Tandem Appreciation Rights in respect of Option Rights granted hereunder, and (ii) to any Participant, Free-Standing Appreciation Rights. All grants of Appreciation Rights will specify the number of shares of Common Stock to which the grant pertains, subject to the limitations set forth in Section 3 of this Plan. (b) A Tandem Appreciation Right will be a right of the Optionee, exercisable by surrender of the related Option Right, to receive from the Corporation an amount determined by the Compensation Committee or an Authorized Officer, which will be expressed as a percentage of the Spread on the related Option Right (not exceeding 100%) at the time of exercise. Tandem Appreciation Rights must be granted concurrently with the related Option Right. (c) A Free-Standing Appreciation Right will be a right of the Participant to receive from the Corporation an amount determined by the Compensation Committee or an Authorized Officer, which will be expressed as a percentage of the Spread (not exceeding one hundred percent (100%)) at the time of exercise. (d) No grant of Appreciation Rights will authorize the payment of dividend equivalents on the Appreciation Right. (e) Each grant of Appreciation Rights will utilize any or all of the authorizations as specified in the following provisions: (i) Any grant may specify that the amount payable on exercise of an Appreciation Right may be paid by the Corporation in cash, in shares of Common Stock or in any combination thereof and may either grant to the Participant or retain in the Compensation Committee the right to elect among those alternatives. (ii) Any grant may specify that the amount payable on exercise of an Appreciation Right may not exceed a maximum specified by the Compensation Committee or an Authorized Officer at the Date of Grant. (iii) Any grant may specify waiting periods before exercise and permissible exercise dates or periods. (iv) Any grant of Appreciation Rights may specify Management Objectives that must be achieved as a condition of the exercise of such Appreciation Rights. Each grant may specify in respect of such Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of Appreciation Rights that will become exercisable if performance is at or above the minimum level(s), but falls short of full achievement of the specified Management Objectives. The grant of such Appreciation Rights will specify that, before the exercise of such Appreciation Rights, the Compensation Committee must certify that the Management Objectives have been satisfied. (v) Any grant of Appreciation Rights may provide for the earlier exercise of such Appreciation Rights or other modifications in the event of termination without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, a Change in Control, or the grant of a Substitute Award. (vi) Each grant of Appreciation Rights will be evidenced by an Evidence of Award, which Evidence of Award will describe such Appreciation Rights, identify the related Option Rights (if applicable), and contain such other terms and provisions, consistent with this Plan, as the Compensation Committee or an Authorized Officer may approve. (vii) Except as provided in an Evidence of Award, in the event of a Participant’s termination of employment or service, any of the Participant’s Appreciation Rights that have not vested as of the Participant’s Termination Date will be cancelled and immediately forfeited, without further action on the part of the Corporation or the Compensation Committee, and the Participant will have no further rights in respect of such Appreciation Rights. (f) Any grant of Tandem Appreciation Rights will provide that such Tandem Appreciation Rights may be exercised only at a time when the related Option Right is also exercisable (and will expire when the related Option Right would have expired) and at a time when the Spread is positive, and by surrender of the related Option Right for cancellation. Successive grants of Tandem Appreciation Rights may be made to the same Participant regardless of whether any Tandem Appreciation Rights previously granted to the Participant remain unexercised. In the case of a Tandem Appreciation Right granted in relation to an Incentive Stock Option to an Employee who is a Ten Percent Stockholder on the Date of Grant, the amount payable with respect to each Tandem Appreciation Right shall be equal in value to the applicable percentage of the excess, if any, of the Market Value Per Share on the exercise date over the Base Price of the Tandem Appreciation Right, which Base Price shall not be less than 110 percent of the Market Value Per Share on the date the Tandem Appreciation Right is granted, and the Incentive Stock Option and related Tandem Appreciation Right shall not be exercisable more than five (5) years from the Date of Grant. (g) Regarding Free-Standing Appreciation Rights only: (i) Each grant will specify in respect of each Free-Standing Appreciation Right a Base Price, which may not be less than the Market Value Per Share on the Date of Grant; (ii) Successive grants may be made to the same Participant regardless of whether any Free-Standing Appreciation Rights previously granted to the Participant remain unexercised; and (iii) No Free-Standing Appreciation Right granted under this Plan may be exercised more than ten (10) years from the Date of Grant. 6. Restricted Stock. The Compensation Committee or, in accordance with Section 11(d), an Authorized Officer may grant or sell Restricted Stock to Participants. Each such grant or sale will utilize any or all of the authorizations as specified in the following provisions: (a) Each such grant or sale will constitute an immediate transfer of the ownership of shares of Common Stock to the Participant in consideration of the performance of services, entitling such Participant to voting, dividend and other ownership rights, but subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referred to. (b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant, as determined by the Compensation Committee or an Authorized Officer at the Date of Grant. (c) Each such grant or sale will provide that the Restricted Stock covered by such grant or sale that vests upon the passage of time will be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code, as determined by the Compensation Committee or an Authorized Officer at the Date of Grant and may provide for the earlier lapse of such substantial risk of forfeiture as provided in Section 6(e) below. In the case of grants that are a form of payment for earned Performance Shares or Performance Units or other awards, such grant may provide for no minimum vesting period. (d) Each such grant or sale will provide that during the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Stock will be prohibited or restricted in the manner set forth in this Plan, and to the extent prescribed by the Compensation Committee at the Date of Grant (which restrictions may include, without limitation, rights of repurchase or first refusal in the Corporation or provisions subjecting the Restricted Stock to a continuing substantial risk of forfeiture in the hands of any transferee). (e) Any grant of Restricted Stock may specify Management Objectives that, if achieved, will result in termination or early termination of the restrictions applicable to such Restricted Stock. Each grant may specify in respect of such Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of shares of Restricted Stock on which restrictions will terminate if performance is at or above the minimum level(s), but falls short of full achievement of the specified Management Objectives. The grant or sale of Restricted Stock will specify that, before the termination or early termination of the restrictions applicable to such Restricted Stock, the Compensation Committee must certify that the Management Objectives have been satisfied. (f) Any grant of Restricted Stock may provide for the earlier lapse or other modification in the event of termination without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, Change in Control, or the grant of a Substitute Award. (g) Any such grant or sale of Restricted Stock may require that any or all dividends or other distributions paid thereon during the period of such restrictions be automatically deferred and/or reinvested in additional shares of Restricted Stock (which may be subject to the same restrictions as the underlying Award) or be paid in cash on a deferred or contingent basis. (h) Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award and will contain such terms and provisions, consistent with this Plan, as the Compensation Committee or an Authorized Officer may approve. Unless otherwise directed by the Compensation Committee, (i) all certificates representing shares of Restricted Stock will be held in custody by the Corporation until all restrictions thereon have lapsed, together with a stock power or powers executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such shares of Common Stock, or (ii) all uncertificated shares of Restricted Stock will be held at the Corporation’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such shares of Restricted Stock. 7. Restricted Stock Units. The Compensation Committee or, in accordance with Section 11(d), an Authorized Officer may grant or sell Restricted Stock Units to Participants. Each such grant or sale will utilize any or all of the authorizations as specified in the following provisions: (a) Each such grant or sale of Restricted Stock Units will constitute the agreement by the Corporation to deliver shares of Common Stock or cash to the Participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include the achievement of Management Objectives) during the Restriction Period as the Compensation Committee or an Authorized Officer may specify. Each grant may specify in respect of such Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of shares of Restricted Stock Units on which restrictions will terminate if performance is at or above the minimum level(s), but falls short of full achievement of the specified Management Objectives. The grant or sale of such Restricted Stock Units will specify that, before the termination or early termination of the restrictions applicable to such Restricted Stock Units, the Compensation Committee must certify that the Management Objectives have been satisfied. (b) Each such grant or sale of Restricted Stock Units may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value Per Share at the Date of Grant. (c) If the Restriction Period lapses only by the passage of time, each such grant or sale will be subject to a Restriction Period (which may include pro-rata, graded or cliff vesting over such period), as determined by the Compensation Committee or an Authorized Officer at the Date of Grant. In the case of grants that are a form of payment for earned Performance Shares or Performance Units or other awards, such grant may provide for no Restriction Period. (d) Each such grant or sale of Restricted Stock Units may provide for the earlier lapse or other modification of such Restriction Period in the event of termination without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, a Change in Control, or the grant of a Substitute Award and, to the extent that any grant, sale, or Substitute Award is subject to, or determined to be subject to Section 409A of the Code, the time and form of payment shall be indicated in the Evidence of Award as upon one or more of the permissible payment events under Section 409A of the Code and as subject to the Six-Month Payment Delay, if required. (e) During the Restriction Period, the Participant will have none of the rights of a stockholder of any shares of Common Stock with respect to such Restricted Stock Units, but the Compensation Committee may, at the Date of Grant, authorize the payment of dividend equivalents on such Restricted Stock Units on either a current, deferred or contingent basis, either in cash or in additional shares of Common Stock and, the Evidence of Award shall specify the time of payment of such dividend equivalents and indicate that such payment is subject to the Six-Month Payment Delay, if required. (f) Each grant or sale of Restricted Stock Units will specify the time and manner of payment of Restricted Stock Units that have been earned and, that such payment is subject to the Six-Month Payment Delay, if required. Any grant or sale may specify that the amount payable with respect thereto may be paid by the Corporation in cash, in shares of Common Stock or in any combination thereof and may either grant to the Participant or retain in the Compensation Committee the right to elect among those alternatives. (g) Each such grant or sale of Restricted Stock Units will provide that during the period for which such Restriction Period is to continue, the transferability of the Restricted Stock Units will be prohibited or restricted in the manner and to the extent prescribed by the Compensation Committee at the Date of Grant (which restrictions may include, without limitation, rights of repurchase or first refusal in the Corporation or provisions subjecting the Restricted Stock Units to a continuing substantial risk of forfeiture in the hands of any transferee). (h) Each grant or sale of Restricted Stock Units will be evidenced by an Evidence of Award and will contain such terms and provisions, consistent with this Plan, as the Compensation Committee or an Authorized Officer may approve. (i) Except as provided in an Evidence of Award, in the event of a Participant’s termination of employment or service, any of the Participant’s Restricted Stock Units that remain subject to the Restriction Period on the Participant’s Termination Date will be cancelled and immediately forfeited without further action on the part of the Corporation or the Compensation Committee, and the Participant will have no further rights in respect of such Restricted Stock Units. 8. Performance Shares and Performance Units. The Compensation Committee or, in accordance with Section 11(d), an Authorized Officer may grant Performance Shares and Performance Units that will become payable to a Participant upon achievement of specified Management Objectives during the Performance Period. Each such grant will utilize any or all of the authorizations as specified in the following provisions: (a) Each grant will specify the number of Performance Shares or Performance Units to which it pertains, which number may be subject to adjustment to reflect changes in compensation or other factors; provided, however, that no such adjustment will be made in the case of a Qualified Performance-Based Award where such action would result in the loss of the otherwise available exemption of the award under Section 162(m) of the Code. (b) The Performance Period with respect to each Performance Share or Performance Unit will be such period of time, as determined by the Compensation Committee or an Authorized Officer at the Date of Grant. (c) Any grant of Performance Shares or Performance Units will specify Management Objectives, which, if achieved, will result in payment of the Award, and each grant may specify in respect of such specified Management Objectives a minimum acceptable level or levels of achievement and will set forth a formula for determining the number of Performance Shares or Performance Units that will be earned if performance is at or above the level(s), but falls short of full achievement of the specified Management Objectives. The grant of Performance Shares or Performance Units will specify that, before the Performance Shares or Performance Units will be earned and paid, the Compensation Committee must certify that the Management Objectives have been satisfied. (d) Any grant of Performance Shares or Performance Units may provide for the earlier lapse or other modification in the event of termination without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, a Change in Control, or the grant of a Substitute Award and to the extent that any grant or Substitute Award is subject to, or determined to be subject to, Section 409A of the Code, the time and form of payment shall be indicated in the Evidence of Award as upon one or more of the permissible payment events under Section 409A of the Code and, as subject to the Six-Month Payment Delay, if required. (e) Each grant will specify the time and manner of payment of Performance Shares or Performance Units that have been earned and, that such payment is subject to the Six-Month Delay, if required. Any grant may specify that the amount payable with respect thereto may be paid by the Corporation in cash, in shares of Common Stock, in Restricted Stock or Restricted Stock Units or in any combination thereof and may either grant to the Participant or retain in the Compensation Committee the right to elect among those alternatives; provided, however, that as applicable, the amount payable may not exceed the maximum amount payable, as may be specified by the Compensation Committee or an Authorized Officer on the Date of Grant. (f) The Compensation Committee may provide for the payment of dividend equivalents to the holder thereof on either a current, deferred or contingent basis, either in cash or in additional shares of Common Stock. In this case, the Evidence of Award will specify, the time of payment of such dividend equivalents and, that such payment is subject to the Six-Month Delay, if required. (g) Each grant of Performance Shares or Performance Units will be evidenced by an Evidence of Award and will contain such other terms and provisions, consistent with this Plan, as the Compensation Committee or an Authorized Officer may approve. (h) Except as provided in an Evidence of Award, in the event of a Participant’s termination of employment or service, any of the Participant’s Performance Shares and Performance Units that remain subject to a Performance Period on the Participant’s Termination Date will be cancelled and immediately forfeited, without further action on the part of the Corporation or the Compensation Committee, and the Participant will have no further rights in respect of such Performance Shares or Performance Units. 9. Awards to Non-Employee Directors. The Board may, from time to time and upon such terms and conditions as it may determine, authorize the granting to Non-Employee Directors, Option Rights, Appreciation Rights or other awards contemplated by Section 10 of this Plan and may also authorize the grant or sale of shares of Common Stock, Restricted Stock or Restricted Stock Units to Non-Employee Directors. (a) Each grant of Option Rights awarded pursuant to this Section 9 will be upon terms and conditions consistent with Section 4 of this Plan. (b) Each grant of Appreciation Rights pursuant to this Section 9 will be upon terms and conditions consistent with Section 5 of this Plan. (c) Each grant or sale of Restricted Stock pursuant to this Section 9 will be upon terms and conditions consistent with Section 6 of this Plan. (d) Each grant or sale of Restricted Stock Units pursuant to this Section 9 will be upon terms and conditions consistent with Section 7 of this Plan. (e) Non-Employee Directors may be granted, sold, or awarded other awards contemplated by Section 10 of this Plan. (f) If a Non-Employee Director subsequently becomes an employee of the Corporation or a Subsidiary while remaining a member of the Board, any Award held under this Plan by such individual at the time of such commencement of employment will not be affected thereby. (g) Non-Employee Directors, pursuant to this Section 9, may be awarded, or may be permitted to elect to receive, pursuant to procedures established by the Board or a committee of the Board, all or any portion of their annual retainer, meeting fees or other fees in shares of Common Stock, Restricted Stock, Restricted Stock Units or other Awards contemplated by Section 10 of this Plan in lieu of cash. Any such election shall comply with Section 409A of the Code, if applicable. The election, if subject to Section 409A of the Code, (i) shall apply to the annual retainer, meeting fees, or other fees earned during the period to which it pertains (the “Plan Year”), (ii) must be received in writing by the administrator of the Plan by the established enrollment deadline of any Plan Year, which must be no later than the last business day of the calendar year immediately preceding the calendar year in which that Plan Year commences, in order to cause that Plan Year’s annual retainer, meeting fees, or other fees to be subject to the provision of this Plan, and (iii) must specify the form of distribution (in shares of Common Stock, Restricted Stock, Restricted Stock Units, or other Awards contemplated by Section 10 of the Plan in lieu of cash) to the Non-Employee Director. Any such election is irrevocable on the last day set by the administrator for making elections. (h) Non-Employee Directors may under policies approved from time to time by the Board or a committee of the Board, elect to defer their annual retainer, meeting fees or other fees and, in which case, the shares of Common Stock purchased under Section 9(g) will be payable to a trust. The election: (i) shall apply to the annual retainer and fees earned during the period to which it pertains (the “Plan Year”) and shall specify the applicable percentage of such annual retainer and fees that such Non-Employee Director wishes to direct to the trust, (ii) must be received in writing by the administrator of the Plan by the established enrollment deadline of any Plan Year which must be no later than the last business day of the calendar year immediately preceding the calendar year in which that Plan Year commences, in order to cause that Plan Year’s annual retainer and fees to be subject to the provisions of this Plan, and (iii) must specify the time and manner of the distribution of the shares of Common Stock to the Non-Employee Director. Any such election is irrevocable on the last day set by the administrator for making elections. The shares of Common Stock covered by this election will be issued in the name of the trustee of the trust for the benefit of the Non-Employee Director; provided, however, that each Non-Employee Director shall be entitled to vote the shares of Common Stock. The trustee shall retain all dividends (which shall be reinvested in shares of Common Stock) and other distributions paid or made with respect thereto in the trust, and all dividends and other distributions will be paid in accordance with the election applicable to the underlying annual retainer and fees. The shares of Common Stock credited to the account of an Non-Employee Director shall remain subject to the claims of the Corporation’s creditors, and the interests of the Non-Employee Director in the trust may not be sold, hypothecated or transferred (including, without limitation, transferred by gift or donation) while such shares of Common Stock are held in the trust. (i) Notwithstanding anything in Section 5, 6 or 7 to the contrary, each grant pursuant to this Section 9 may specify the period or periods of continuous service, if any, by the Non-Employee Director with the Corporation that are necessary before such awards or installments thereof shall become fully exercisable or restrictions thereon will lapse, which shall be determined on the Date of Grant. 10. Other Awards. (a) The Compensation Committee or an Authorized Officer may, subject to limitations under applicable law, authorize grants or sales to any Participant other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, (i) shares of Common Stock or factors that may influence the value of such shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into shares of Common Stock, purchase rights for shares of Common Stock, awards with value and payment contingent upon performance of the Corporation or specified Subsidiaries, affiliates or other business units thereof or any other factors designated by the Compensation Committee, and awards valued by reference to the book value of shares of Common Stock or the value of securities of, or the performance of specified Subsidiaries or affiliates or other business units of, the Corporation, (ii) cash, or (iii) any combination of the foregoing. The Compensation Committee or an Authorized Officer shall determine the terms and conditions of such awards, which may include the achievement of Management Objectives, which may specify in respect of such Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the portion or all of the award on which restrictions will terminate if performance is at or above the minimum level(s), but falls short of full achievement of the specified Management Objectives. The grant or sale of such award will specify that, before the termination or early termination of the restrictions applicable to such award, the Compensation Committee must certify that the Management Objectives have been satisfied. Shares of Common Stock delivered pursuant to an award in the nature of a purchase right granted under this Section 10 shall be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, cash, shares of Common Stock, other awards, notes or other property, as the Compensation Committee shall determine. (b) Each grant may specify the period or periods of continuous service, if any, by the Participant with the Corporation or any Subsidiary that are necessary before such awards or installments thereof shall become fully transferable, which shall be determined by the Compensation Committee or an Authorized Officer on the Date of Grant. (c) Each grant may provide for the earlier termination of the period or periods of continuous service or other modifications in the event of termination without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, a Change in Control, or the grant of a Substitute Award and, to the extent that any grant or Substitute Award is subject to, or determined to be subject to, Section 409A of the Code, the time and form of payment shall be indicated in the Evidence of Award as upon one or more of the permissible payment events under Section 409A of the Code and, as subject to the Six-Month Payment Delay, if required. (d) The Compensation Committee may authorize grants or sales of shares of Common Stock as a bonus, or may grant other awards in lieu of obligations of the Corporation or a Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the Compensation Committee. (e) Each grant or sale pursuant to this Section 10 may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the Market Value Per Share on the Date of Grant; provided, however, that with respect to a payment of an award that is substantially similar to an Option Right, no such payment shall be less than Market Value Per Share on the Date of Grant. 11. Administration of this Plan. (a) This Plan will be administered by the Compensation Committee. The Board or the Compensation Committee, as applicable, may from time to time delegate all or any part of its authority under this Plan to any other committee of the Board or subcommittee thereof consisting exclusively of threenot less than two or more members of the Board, who are not eligibleeach of whom shall be a “non-employee director” within the meaning of Rule 16b-3 of the Securities and Exchange Commission promulgated under the Exchange Act, an “outside director” within the meaning of Section 162(m) of the Code and an “independent director” within the meaning of the rules of the New York Stock Exchange, as constituted from time to participatetime. To the extent of any such delegation, references in this Plan. Plan to the Board or the Compensation Committee, as applicable, will be deemed to be references to such committee or subcommittee.   (f) “Compensation” shall mean compensation, (b) The interpretation and construction by the Compensation Committee of any provision of this Plan or of any agreement, notification or document evidencing the grant of an Award, and any determination by the Compensation Committee pursuant to any provision of this Plan or of any such agreement, notification or document will be final and conclusive. (c) To the extent permitted by applicable law, the Board or the Compensation Committee, as such term is definedapplicable, may, from time to time, in the Sprint Retirement Savings Plan for purposes of Pre-Tax Contributions (as defined in such plan) without regarddelegate 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 last day 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 day of the Purchase Period. Different dates may be set by resolution of the Board. (i) “Eligible Employee” or “Employee” shall mean all persons continuously employed by Sprint or a participating Subsidiary on the 15th day of May immediately before the beginning of the Subscription Period for an offering through the Date of Grant for that offering; 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. (j) “ESPP Broker” shall have the meaning assigned in Section 14(a). (k) “MIP Payout” shall mean Compensation paid during an offering under the Management Incentive Plan. (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. 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 any class of common stock of Sprint that is publicly traded, including shares of Series 1 FON Stock (the “FON Stock”) and shares of Series 1 PCS Stock (the “PCS Stock”). (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 business 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 whethermembers or to one or more officers of the Corporation, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Board, the Compensation Committee, the committee, or any person to whom duties or powers have been delegated as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Board or the Compensation Committee, the committee or such person may have under this Plan. (d) To the extent permitted by applicable law, the Compensation Committee may, by resolution, authorize one or more Executive Officers of the Corporation (each, an “Authorized Officer”), including the Chief Executive Officer of the Corporation, to do one or both of the following on the same basis as the Compensation Committee: (i) designate Participants to be recipients of Awards under this Plan, (ii) determine the size of any such Awards; provided, however, that (A) the Compensation Committee shall not delegate such corporation now exists orresponsibilities to any Executive Officer for Awards granted to a Participant who is hereafter organized or acquired by Sprintan Executive Officer, a Director, or a Subsidiary. 3.    Numbermore than 10% beneficial owner of Shares Under the Plan A total of 50 million shares of FON Stock and a total of 80 million shares of PCS Stock may be sold to Eligible Employees under this Plan. For this purpose, each share of Common Stock, par value $2.50 per share, sold to Eligible Employees before the recapitalization in November 1998 of such shares into shares of FON Stock and PCS Stock shall be counted as a sale of two shares of FON Stock and one share of PCS Stock and each share of FON Stock sold to Eligible Employees after the recapitalization in November 1998 and before the May 1999 two-for-one stock splitany class of the FON Stock shall be counted as a sale of two shares of FON Stock. Furthermore, each share of PCS Stock soldCorporation’s equity securities that is registered pursuant to Eligible Employees after the recapitalization in November 1998 and before the January 2000 two-for-one stock splitSection 12 of the PCS Stock shall be countedExchange Act, as a saledetermined by the Board in accordance with Section 16 of two shares of PCS Stock. The available shares were appropriately adjustedthe Exchange Act, and (B) the resolution providing for such authorization sets forth the two-for-one stock split of both FON Stock and PCS Stock. The Shares used under the Plan 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. Thetotal number of shares of FONCommon Stock thatthe Authorized Officer(s) may grant, and (iii) the Authorized Officer(s) shall report periodically to the Compensation Committee, as the case may be, soldregarding the nature and scope of the Awards granted pursuant to the 2003 Offering underauthority delegated. In no event shall any such delegation of authority be permitted with respect to Awards to any Executive Officer or any person subject to Section 162(m) of the Plan is limited to a number equal toCode. 12. Adjustments. The Board shall make or provide for such adjustments in the sum of (1) the numbernumbers of shares determinedof Common Stock covered by subtractingoutstanding Option Rights, Appreciation Rights, Restricted Stock Units, Performance Shares, Performance Units and, if applicable, in the number of shares of FONCommon Stock sold (as above calculated) under covered by other awards granted pursuant to Section 10 hereof, in the Plan following completionOption Price and Base Price provided in outstanding Option Rights and Appreciation Rights, and in the kind of shares covered thereby, as is equitably required to prevent dilution or enlargement of the 2002 Offeringrights of Participants or Optionees that otherwise would result from 40 million shares and (2) 5 million shares. The number(i) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of PCSthe Corporation, or (ii) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (iii) any other corporate transaction or event having an effect similar to any of the foregoing; however, in the event of any such transaction or event, any adjustments shall be in compliance with or maintain exemption from Section 409A of the Code. Such adjustments shall be made automatically, without the necessity of Board action, on the customary arithmetical basis in the case of any stock split, including a stock split effected by means of a stock dividend, and in the case of any other dividend paid in shares of Common Stock; however, any adjustment shall be in compliance with or maintain exemption from Section 409A of the Code. Moreover, in the event of any such transaction or event specified in this Section 12, the Board, in its discretion, and subject to ensuring compliance with or exemption from Section 409A of the Code, may provide in substitution for any or all outstanding Awards under this Plan such alternative consideration (including cash), if any, as it may determine, in good faith, to be equitable in the circumstances and may require in connection therewith the surrender of all Awards so replaced. The Board also shall make or provide for such adjustments in the numbers of shares specified in Section 3 of this Plan as is appropriate to reflect any transaction or event described in this Section 12; provided, however, that any such adjustment to the number specified in Section 3(b) will be made only if and to the extent that such adjustment would not cause any Option Right intended to qualify as an Incentive Stock Option to fail so to qualify. 13. Change in Control. (a) Except as otherwise provided in an Evidence of Award or by the Compensation Committee at the Date of Grant, to the extent outstanding Awards granted under this Plan are not assumed, converted or replaced by the resulting entity in the event of a Change in Control, all outstanding Awards that may be sold pursuantexercised shall become fully exercisable, all restrictions with respect to outstanding Awards shall lapse and become vested and non-forfeitable, and any specified Management Objectives with respect to outstanding Awards shall be deemed to be satisfied at target. If the Award is considered a “deferral of compensation” (as such term is defined under Code Section 409A), and if the failure of the Award to be assumed, converted or replaced by the resulting entity following the Change in Control would result in a payment of deferred compensation upon the closing of such Change in Control, except as otherwise provided in an Evidence of Award, the payment will occur within 30 days after the Change in Control, provided that such Change in Control may be treated as a change in ownership of the Corporation, a change in the effective control of the Corporation or a change in the effective ownership of a substantial portion of the Corporation’s assets as described in Treasury regulations issued under Code Section 409A (each a “Code Section 409A Change in Control”). (b) Except as otherwise provided in an Evidence of Award or by the Compensation Committee, to the 2003 Offeringextent outstanding Awards granted under this Plan are assumed, converted or replaced by the resulting entity in the event of a Change in Control, any outstanding Awards that are subject to Management Objectives shall be converted by the resulting entity, as if target performance had been achieved as of the date of the Change in Control, and each award of: (i) Performance Shares or Performance Units shall continue to vest during the remaining Performance Period, (ii) Restricted Stock shall continue to be subject to a “substantial risk of forfeiture” for the remaining applicable period, (iii) Restricted Stock Units shall continue to vest during the Restriction Period, and (iv) all other Awards shall continue to vest during the applicable vesting period, if any. (c) Except as otherwise provided in an Evidence of Award or by the Compensation Committee, to the extent outstanding Awards granted under this Plan are either assumed, converted or replaced by the resulting entity in the event of a Change in Control, if a Participant’s service is terminated without Cause by the Corporation, any of its Subsidiaries or the resulting entity or a Participant resigns his or her employment with an Employer for Good Reason, in either case, during the CIC Severance Protection Period, all outstanding Awards held by the Participant that may be exercised shall become fully exercisable and all restrictions with respect to outstanding Awards shall lapse and become vested and non-forfeitable. (d) Notwithstanding any other provision of the Plan, is limitedin the event of a Change in Control, the Board in its discretion, may provide for the cancellation of each outstanding and unexercised Option Right or Appreciation Right in exchange for a cash payment to a numberbe made within 60 days of the Change in Control in an amount equal to the sumamount by which the highest price per share of (1)Common Stock paid for a share of Common Stock in the number of shares determinedChange in Control exceeds the Option Price or Base Price, as applicable, multiplied by subtracting the number of shares of PCSCommon Stock sold (as above calculated)granted under the Option Right or Appreciation Right. (e) Notwithstanding any provision of this Plan following completionto the contrary, to the extent an Award shall be deemed to be vested or restrictions lapse, expire or terminate upon the occurrence of a Change in Control and such Change in Control is not a Code Section 409A Change in Control, then even though such Award may be deemed to be vested or restrictions lapse, expire or terminate upon the occurrence of the 2002 Offering from 40 million shares and (2) 20 million shares. With respect to each offering, the Board of Directors will specify the Subsidiaries participatingChange in the offering and such other terms 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,Control or any other changeprovision of this Plan, payment will be made, to the extent necessary to comply with the provisions of Section 409A of the Code, to the Participant on the earliest of: (i) the Participant’s Separation from Service with the Corporation; provided, however, that if the Participant is a “specified employee” (within the meaning of Section 409A of the Code), the payment date shall be the date that is six (6) months after the date of the Participant’s Separation from Service with the Employer, (ii) the date payment otherwise would have been made in the structureabsence of any provisions in this Plan to the contrary (provided such date is permissible under Section 409A of the Code), or (iii) the Participant’s death. (f) Unless otherwise provided in a Participant’s employment agreement, if any, between the Participant and an Employer or any other arrangement with the Corporation or any of its Subsidiaries to which the Participant is a party or participant, if the acceleration of exercisability under this Section 13, together with all other payments or benefits contingent on the Change in Control within the meaning of Section 280G of the Code, results in any portion of such payments or benefits not being deductible by the Corporation as a result of the application of Section 280G of the Code, the payments or benefits shall be reduced until the entire amount of the payments or benefits is deductible. The reduction shall be effected from Awards made under this Plan by the exclusion, first, of Awards, or portions thereof, that are not permitted to be valued under Treasury Regulation section 1.280G-1, Q&A 24(c), or any successor provision, and, second, of Awards, or portions thereof, that are permitted to be valued under Treasury Regulation section 1.280G-1, Q&A 24(c). 14. Detrimental Activity. (a) Any Evidence of Award may provide that if the Board or the Compensation Committee determines a Participant has engaged in any Detrimental Activity, either during service with the Corporation or a Subsidiary or within a specified period after termination of such service, then, promptly upon receiving notice of the Board’s finding, the Participant shall: (i) forfeit that Award to the extent then held by the Participant; (ii) in exchange for payment by the Corporation or the Subsidiary of any amount actually paid therefor by the Participant, return to the Corporation or the Subsidiary, all shares of Common Stock that the BoardParticipant has not disposed of that had been acquired pursuant to that Award; (iii) with respect to any shares of Common Stock acquired pursuant to that Award that were disposed of, pay to the Corporation or the Subsidiary, in cash, the difference between: (A) any amount actually paid by the Participant, and (B) the Market Value Per Share of the shares of Common Stock on the date acquired; and (iv) pay to the Corporation or the Subsidiary in cash the Spread, with respect to any Option Rights or Appreciation Rights exercised where no shares of Common Stock were retained by the Participant upon such exercise. (b) To the extent that such amounts are not paid to the Corporation or the Subsidiary, the Corporation may make such adjustment, ifseek other remedies, including a set off of the amounts so payable to it against any as itamounts that may deem appropriate inbe owing from time to time by the number, kind, andCorporation or a Subsidiary to the Option priceParticipant for any reason, including, without limitation, wages, deferred compensation or vacation pay. To the extent that any set off under this section of Shares available for purchase under the Plan and incauses the number of Shares which an Employee is entitledParticipant to purchase. 4.    Administrationbecome subject to taxes under Section 409A of the Plan Code, the responsibility for payment of such taxes lies solely with the Participant.   This Plan shall be administered by 15. Non-U.S. Participants. In order to facilitate the Committee. The Committee is vested with full authority to make, administer and interpret such equitable rules and regulations regardingmaking of any grant or combination of grants under 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 Compensation Committee shall appointmay provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Corporation or any Subsidiary outside of the United States of America or who provide services to the Corporation or any Subsidiary under an agreement with a foreign nation or agency, as the Board or the Compensation Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Compensation Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan Administrator(including, without limitation, sub-plans) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the Committee shall allocate to the Plan Administrator certain limited responsibilities to carry out the directivesSecretary of the Committee in all phasesBoard or other appropriate officer of the administrationCorporation may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Plan. Corporation.   Employees who become participants will be assessed an annual administrative fee, 16. Transferability. (a) Except as otherwise determined by the Plan Administrator, and such fee will be deducted from their pay onBoard or the first payday of the Purchase Period. Sprint will pay all other expenses incident to establishing and administering the Plan and purchasing or issuing Shares. 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. In addition, a participant may affirmatively elect, as part of his enrollment, that no deduction be made under the Plan from any MIP Payout. If the offering permits a participant to elect to purchase more than one class of Common Stock, the participant must specify the percentage (in 10% multiples) of his aggregate deductions to applyCommittee pursuant to the purchaseprovisions of each class of Common Stock. Payroll withholding in excess of the percentage designated by a participant is permitted in orderSection 16(c), no Award or dividend equivalents paid with respect 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 forAwards made under 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 Accounts under the Plan. A participant may not make any separate cash payment into such Accounts 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 each of his Accounts during the Purchase Period for that offering, subject to the provisions in the next two paragraphs. Notwithstanding the foregoing, no Employee may purchase more than 6,000 shares of FON Stock nor more than 6,000 shares of PCS 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 Shares of all classes of Common 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 of any class for which Options are to be exercised on any Date of Exercise exceeds the number of Shares of that class then available under the Plan for that offering before any transfer of Account balances permitted by Section 8, Sprint shall make a pro rata allocation of the available Shares of that class based on the amount in each participant’s Account relating to that class of Common Stock at the end of the Purchase Period without transferring any Account balances. If the total number of Shares of any class for which Options are to be exercised on any Date of Exercise does not exceed the number of Shares of that class then available under the Plan for that offering before any transfer of Account balances permitted by Section 8, but would exceed the number of Shares of that class then available for that offering after the transfer of Account balances permitted by Section 8, Sprint shall (1) allocate sufficient Shares of that class so that the amounts in all participants’ Accounts relating to that class of Common Stock at the end of the Purchase Period without the transfer of Account balances will be used to purchase such number of full shares of that class of Common Stock as the balances in the Accounts will pay for at the Option price for that class of Common Stock, (2) transfer Account balances as permitted by Section 8, and (3) make a pro rata allocation of the remaining Shares of that class available for that offering based on the amounts in each participant’s Account following such transfer. All Shares of any class of Common Stock included in any offering under this Plan in excess of the total number of Shares of that class purchased in such offering shall be available for inclusion in any subsequent offering under this Plan. 7.    Purchase Price The Option price per Share with respect to each class of Common Stock shall be the lower of: (a) 85% of the Average Market Price for a Share of that class of Common Stock on the Date of Grant; or (b) 85% of the Average Market Price for a Share of that class of Common Stock on the Date of Exercise. 8.    Exercise of Option Subject to the availability of Shares as set forth in Section 6, each Employee who has sufficient funds in his Account for a class of Common Stock on a Date of Exercise to purchase at least one full share of that class 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 that class 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 for that class of Common Stock. If on any Date of Exercise, an Employee (1) shall have purchased all the shares he is entitled to purchase of any class of Common Stock, as determined under Section 6, (2) a balance remains in his Account for that class of Common Stock, and (3) he has another Account for the purchase of another class of Common Stock with respect to which he has not purchased the maximum number of shares allowable under Section 6, the unused balance shall be transferred to the other Account for the purchase of such other class of Common Stock and applied on the Date of Exercise to the purchase of shares of such other class of Common Stock up to the maximum permissible number of shares he may purchase under Section 6. In the event there are not sufficient Shares of both PCS Stock and FON Stock available to allow the purchase of Shares without a pro rata allocation of the Shares of each class before unused balances are transferred from one Account to the other Account, there shall be no transfer of amounts from one Account to another Account and the allocation of available Shares will be made pro rata based on the amounts in the respective Accounts at the end of the Purchase Period without any such transfer. The balance in an Employee’s Account not used to purchase Common Stock shall be paid to the Employee as soon as practicable after the Date of Exercise. 9.    Termination of Participation An Employee may terminate participation in an offering with respect to all classes of Common Stock, in whole but not in part, at any time before the end of the Purchase Period for such offering. To terminate participation, an Employee must deliver a notice to the Plan Administrator in the manner prescribedtransferable by the Plan Administrator. As soon as practicable after receipt of such notice, the Plan Administrator shall stop the Employee’s payroll deductions provided for in Section 5. If the Employee terminates participation in an offering before the first day of June in the Purchase Period of that offering, the Employee may make an irrevocable election, in the manner prescribed by the Plan Administrator, to have the balances in the Employee’s Accounts used for Option exercises on the Date of Exercise or have the balances in the Employee’s Accounts refunded to the Employee. If the Employee elects to have the amounts in his Accounts refunded, the funds will be paid to the Employee as soon as practicable after his election. If the Employee elects to have the balances used for Option exercises, any funds remaining in the Employee’s Accounts after such Option exercises will be paid to the Employee as soon as practicable after the Date of Exercise. If an Employee terminates participation in an offering on or after the first day of June in the Purchase Period of that offering, the balances in the Employee’s Accounts shall be used for Option exercises on the Date of Exercise. Any funds remaining in the Employee’s Accounts after such Option exercises will be paid to the Employee as soon as practicable after the Date of Exercise. 10.    Termination of Employment If an Employee: (1) retires under the provisions of the Sprint Retirement Pension Plan or (2) is involuntarily separated without cause before the first day of June in the Purchase Period of an offering, the Employee may make an irrevocable election, in the manner prescribed by the Plan Administrator, to have the balances in the Employee’s Accounts be used for Option exercises on the Date of Exercise or have the balances in the Employee’s Accounts refunded to the Employee. The Employee must make this election either no later than 30 days from his separation date or June 1, whichever is earlier. If an election is not made by the deadline for making an election, the funds remaining in the Employee’s Account will be used for Option exercises on the Date of Exercise. If the Employee elects to have the amounts in his Accounts refunded, the funds will be paid to the Employee as soon as practicable after his election. If the Employee elects to have the balances used for Option exercises, or if the Employee fails to make an election by the deadline for making an election, any funds remaining in the Employee’s Accounts after the Option exercises will be paid to the Employee as soon as practicable after the Date of Exercise. If an Employee terminates employment for any other reason before the first day of June in the Purchase Period of an offering, the funds remaining in the Employee’s Accounts will be refunded to the Employee as soon as practicable after termination. Upon termination of employment for any reason whatsoever, including but not limited to death or retirement, on or after the first day of June in the Purchase Period of an offering, the balances in the Accounts of a participating Employee shall be used for Option exercises on the Date of Exercise. Any funds remaining in the participant’s Accounts 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 (and with the same election as to whether a deduction shall be made from any MIP Payout) 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 offering permits a participant to elect to purchase more than one class of Common Stock, and the participant is automatically re-enrolled as described in the preceding sentence, such participant’s aggregate payroll deductions will be used to purchase each class of Common Stock as set by resolution 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 enrolled in a prior offering 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 balances in the Employee’s Accounts at the end of an offering not used to purchase Common Stock shall be refunded to him. Upon termination of the Plan, the balances in each Employee’s Accounts 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 Accounts or any rights with regard to the exercise of an Option or to receive Shares under the Plan other thanParticipant except by will or the laws of descent and distribution, and may be otherwise transferred in a manner that protects the interest of the Corporation as the Board or the Compensation Committee may determine; provided, that if so determined by the Compensation Committee, each Participant may, in a manner established by the Board or the Compensation Committee, designate a beneficiary to exercise the rights of the Participant with respect to any Award upon the death of the Participant and to receive shares of Common Stock or other property issued upon such rightexercise. (b) The Compensation Committee or an Authorized Officer may specify at the Date of Grant that part or all of the shares of Common Stock that are (i) to be issued or transferred by the Corporation upon the exercise of Option Rights or Appreciation Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon payment under any grant of Performance Shares or Performance Units or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 6 of this Plan, will be subject to further restrictions on transfer. (c) Notwithstanding Section 16(a), the Board or the Compensation Committee may determine that Awards (other than Incentive Stock Options) may be transferable by a Participant, without payment of consideration therefor by the transferee, only to any one or more family members (as defined in the General Instructions to Form S-8 under the Securities Act of 1933) of the Participant; provided, however, that (i) no such transfer shall be effective unless reasonable prior notice thereof is delivered to the Corporation and such transfer is thereafter effected in accordance with any terms and conditions that shall have been made applicable thereto by the Board or the Compensation Committee, and (ii) any such transferee shall be subject to the same terms and conditions hereunder as the Participant. 17. Withholding Taxes. To the extent that the Corporation is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Corporation for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Corporation for payment of the balance of such taxes required to be withheld, which arrangements (in the discretion of the Compensation Committee) may include relinquishment of a portion of such benefit. If a Participant’s benefit is to be received in the form of shares of Common Stock, and such Participant fails to make arrangements for the payment of tax, the Corporation shall withhold such shares of Common Stock having a value equal to the amount required to be withheld. Notwithstanding the foregoing, when a Participant is required to pay the Corporation an amount required to be withheld under applicable income and employment tax laws, the Participant may elect to satisfy the obligation, in whole or in part, by electing to have withheld, from the shares required to be delivered to the Participant, shares of Common Stock having a value equal to the amount required to be withheld (except in the case of Restricted Stock where an election under Section 83(b) of the Code has been made), or by delivering to the Corporation other shares of Common Stock held by such Participant. In no event shall the Market Value Per Share of the shares of Common Stock to be withheld pursuant to this section to satisfy applicable withholding taxes in connection with the benefit exceed the minimum amount of taxes required to be withheld or such other amount that will not result in a negative accounting impact. Participants shall also make such arrangements as the Corporation may require for the payment of any withholding tax obligation that may arise in connection with the disposition of shares of Common Stock acquired upon the exercise of Option Rights. 18. Compliance with Section 409A of the Code. (a) To the extent applicable, it is intended that this Plan and any grants made hereunder are exempt from Section 409A of the Code or are structured in a manner that would not cause a Participant to be subject to taxes and interest pursuant to Section 409A of the Code. This Plan and any grants made hereunder shall be administrated in a manner consistent with this intent, and any provision that would cause this Plan or any grant made hereunder to become subject to taxation under Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Corporation without the consent of Participants). (b) In order to determine for purposes of Section 409A of the Code whether a Participant is employed by a member of the Corporation’s controlled group of corporations under Section 414(b) of the Code (or by a member of a group of trades or businesses under common control with the Corporation under Section 414(c) of the Code) and, therefore, whether the shares of Common Stock that are or have been purchased by or awarded under this Plan to the Participant are shares of “service recipient” stock within the meaning of Section 409A of the Code: (i) In applying Code Section 1563(a)(1), (2) and (3) for purposes of determining the Corporation’s controlled group under Section 414(b) of the Code, the language “at least 50 percent” is to be used instead of “at least 80 percent” each place it appears in Code Section 1563(a)(1), (2) and (3); and (ii) In applying Treasury Regulation Section 1.414(c)-2 for purposes of determining trades or businesses under common control with the Corporation for purposes of Section 414(c) of the Code, the language “at least 50 percent” is to be used instead of “at least 80 percent” each place it appears in Treasury Regulation Section 1.414(c)-2. 19. Effective Date and Term of Plan. (a) This Plan will be effective as of the Effective Date. No grant will be made under this Plan more than ten (10) years after the date on which this Plan is first approved by the stockholders of the Corporation, but all grants made on or prior to such date will continue in effect thereafter subject to the terms thereof and of this Plan. (b) Upon the Effective Date, no further grants of awards are permitted under the Predecessor Plans. All awards under the Predecessor Plans that remain outstanding shall be administered and paid in accordance with the provisions of the applicable Predecessor Plan and award agreement. 20. Amendments and Termination. (a) The Board may at any time and from time to time, to the extent permitted by Section 409A of the Code, amend, suspend or terminate this Plan in whole or in part; provided, however, that if an amendment to this Plan (i) would materially increase the benefits accruing to Participants under this Plan, (ii) would materially increase the number of securities which may be issued under this Plan, (iii) would materially modify the requirements for participation in this Plan, or (iv) must otherwise be approved by the stockholders of the Corporation in order to comply with applicable law or the rules of the New York Stock Exchange or, if the shares of Common Stock are not traded on the New York Stock Exchange, the principal national securities exchange upon which the shares of Common Stock are traded or quoted, then, such amendment will be subject to stockholder approval and will not be effective unless and until such approval has been obtained. (b) Termination of this Plan will not affect the rights of Participants or their successors under any Awards outstanding hereunder and not exercised in full on the date of termination. (c) The Board or the Compensation Committee will not, without the further approval of the stockholders of the Corporation, authorize the amendment of any outstanding Option Right or Appreciation Right to reduce the Option Price or Base Price, respectively. No Option Right or Appreciation Right will be cancelled and replaced with awards having a lower Option Price or Base Price, respectively, or for another award, or for cash without further approval of the stockholders of the Corporation, except as provided in Section 12. Furthermore, no Option Right or Appreciation Right will provide for the payment, at the time of exercise, of a cash bonus or grant of Option Rights, Appreciation Rights, Performance Shares, Performance Units, or grant or sale of Restricted Stock, Restricted Stock Units or other awards pursuant to Section 10 of this Plan, without further approval of the stockholders of the Corporation. Except for the Option Exchange Program as specifically described below, this Section 20(c) is intended to prohibit the repricing of “underwater” Option Rights or Appreciation Rights without stockholder approval and will not be construed to prohibit the adjustments provided for in Section 12 of this Plan. Stock Option Exchange Program. Notwithstanding any other provision of the Plan to the contrary, including but not limited to the foregoing paragraph, the Corporation, by action of the Compensation Committee, may effect an option exchange program (the “Option Exchange Program”), to be commenced through an option exchange offer in 2010. Under any option exchange offer, Eligible Employees would be offered the opportunity to exchange Eligible Options (the “Surrendered Option”) for new Options (the “New Options”) as follows: (i) each New Option shall have a “value” (determined in accordance with a generally accepted valuation method as of a date prior to the commencement of any exchange offer) substantially equal to the value of the Surrendered Option; (ii) the Compensation Committee shall determine exchange ratios for the Option Exchange Program consistent with the foregoing pursuant to which each New Option shall represent the right to purchase fewer Option Shares than the Option Shares underlying the Surrendered Option, and the per share exercise price of each New Option shall be not less than the fair market value of a share of Common Stock on the date of issuance of the New Option; (iii) each Surrendered Option shall be exchanged for a New Option with 50% vesting upon each of one and two years, and an expiration date seven years, after the grant date. Eligible Employees means employees of the Corporation other than its “named executive officers” and Eligible Options means any Option other than a New Option where, as of the date specified by the terms of the exchange offer (which date shall be not more than ten business days prior to any exchange offer), the per share exercise price of such Option is greater than the higher of (a) the then-current 52-week high per share trading price of our Common Stock and (b) 150% of the then-current per share trading price of our Common Stock. Subject to the foregoing, the Compensation Committee shall be permitted to determine additional terms, restrictions or requirements relating to the Option Exchange Program. (d) If permitted by Section 409A of the Code, in case of termination of service by reason of death, Disability or Normal Retirement, or in the case of unforeseeable emergency or other special circumstances, of a Participant who holds an Option Right or Appreciation Right not immediately exercisable in full, or any shares of Restricted Stock as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any Restricted Stock Units as to which the Restriction Period has not been completed, or any Performance Shares or Performance Units which have not been fully earned, or any other awards made pursuant to Section 10 subject to any vesting schedule or transfer restriction, or who holds shares of Common Stock subject to any transfer restriction imposed pursuant to Section 16 of this Plan, the Compensation Committee may, in its sole discretion, accelerate the time at which such Option Right, Appreciation Right or other award may be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such Restriction Period will end or the time at which such Performance Shares or Performance Units will be deemed to have been fully earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such award, except in the case of a Qualified Performance-Based Award where such action would result in the loss of the otherwise available exemption of the Award under Section 162(m) of the Code. (e) Subject to Section 20(c) hereof, the Compensation Committee may amend the terms of any Award theretofore granted under this Plan prospectively or retroactively, except in the case of a Qualified Performance-Based Award where such action would result in the loss of the otherwise available exemption of such Award under Section 162(m) of the Code. In such case, the Compensation Committee will not make any modification of the Management Objectives or the level or levels of achievement with respect to such Qualified Performance-Based Award. Subject to Section 12 above, no amendment shall materially impair the rights of any Participant without his or her consent. 21. Substitute Awards for Awards Granted by Other Entities. Substitute Awards may be granted under this Plan for grants or awards held by Employees of a company or entity who become Employees of the Corporation or a Subsidiary as a result of the acquisition, merger or consolidation of the employer company by or with the Corporation or a Subsidiary. Except as otherwise provided by applicable law and notwithstanding anything in the Plan to the contrary, the terms, provisions and benefits of the Substitute Awards so granted may vary from those set forth in or required or authorized by this Plan to such extent as the Compensation Committee at the time of the grant may deem appropriate to conform, in whole or part, to the terms, provisions and benefits of grants or awards in substitution for which they are granted. 22. Governing Law. This Plan and all grants and Awards and actions taken thereunder shall be governed by and construed in accordance with the internal substantive laws of the State of Kansas. 23. Miscellaneous Provisions. (a) The Corporation will not be required to issue any fractional shares of Common Stock pursuant to this Plan. The Board or the Compensation Committee may provide for the elimination of fractions or for the settlement of fractions in cash. (b) This Plan will not confer upon any Participant any right with respect to continuance of employment or other service with the Corporation or any Subsidiary, nor will it interfere in any way with any right the Corporation or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time. (c) To the extent that any provision of this Plan would prevent any Option Right that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be null and void with respect to such Option Right. Such provision, however, will remain in effect for other Option Rights and there will be no further effect on any provision of this Plan. (d) The Compensation Committee or an Authorized Officer may provide for termination of an Award in the case of termination of employment or service of a Participant or any other reason; provided, however, that all Awards of a Participant will be immediately forfeited and cancelled to the extent the Participant’s employment or service has been terminated for Cause, and the Participant will have no further rights in respect of such Awards. (e) No Award under this Plan may be exercised by the holder thereof if such exercise, and the receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Compensation Committee, contrary to law or the regulations of any duly constituted authority having jurisdiction over this Plan. (f) Except as required by Section 409A of the Code in connection with a Separation from Service, absence on leave approved by a duly constituted officer of the Corporation or any of its Subsidiaries shall not be liableconsidered interruption or termination of service of any Employee for any purposes of this Plan or subjectAwards granted hereunder, except that no Awards may be granted to the debts, contracts,an Employee while he or liabilities of the Employee. Any such action taken by the Employee shall be null and void. she is absent on leave.   14.    Rights (g) Except as Stockholder and Evidence of Stock Ownership (a) An Employee will not become a stockholder, and willspecifically provided in Section 9(h), no Participant shall have noany rights as a stockholder with respect to Shares being purchasedany shares of Common Stock subject to Awards granted to him or her under this Plan until afterprior to the date as of which he or she is actually recorded as the holder of such shares upon the stock records of the Corporation. (h) The Compensation Committee may condition the grant of any Award or combination of Awards authorized under this Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Corporation or a Subsidiary to the Participant. (i) Except with respect to Option is exercisedRights and Appreciation Rights, the Shares have been issued by Sprint. Promptly following each Date of Exercise,Compensation Committee may permit Participants to elect to defer the numberissuance of shares of Common Stock or the settlement of each class purchased by each participantAwards in cash under this Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan. The Compensation Committee also may provide that deferred issuances and settlements include the payment or crediting of dividend equivalents or interest on the deferral amounts. All elections and deferrals permitted under this provision 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 incomply with 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)409A of the Code, has been satisfied. With respect to Shares forincluding setting forth the time and manner of the election (including a compliant time and form of payment), the date on which the Section 423(a) holding period has been satisfied,election is irrevocable, and whether the participantelection can be changed until the date it is irrevocable. (j) Any Award granted under the terms of this Plan may move those Shares to another brokerage accountspecify in the Evidence of participant’s choosing or requestAward that a stock certificate be issued and delivered to him. (c) A participant whothe Participant is not subject to paymentrestrictive covenants including, but not limited to, covenants not to compete and covenants not to solicit, unless otherwise determined by the Compensation Committee. (k) Participants shall provide the Corporation with a completed, written election form setting forth the name and contact information of U.S. income taxes may move his Shares to another brokerage accountthe person who will have beneficial ownership rights of his choosing or request that a stock certificate be issued and delivered to him at any time, without regardAwards made to the satisfaction of the Section 423(a) holding period. 15.    Application of Funds All funds received by Sprint in payment for Shares purchasedParticipant under this Plan may be used forupon the death of the Participant. (l) If any valid corporate purpose. 16.    Commencementprovision of Plan Thisthis Plan commenced onis or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify this Plan or any Award under any law deemed applicable by the first day of June, 1988. This Plan as amended and restated is effective forBoard or the 2003 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, ifCompensation Committee, 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 Date of Exerciseprovision shall be the date determined by the Board. Any payroll deductions placedconstrued or deemed amended or limited in an Employee’s Accounts after such Date of Exercise will be refundedscope to the Employee. The Board may terminate the Planconform to applicable laws 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. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — SPRINT CORPORATION 6200 Sprint Parkway Overland Park, Kansas 66251 This Proxy is Solicited on Behalfdiscretion of the Board of Directors foror the Annual Meeting on May 13, 2003 The undersigned hereby appoints W.T. Esrey, J. R. Devlin and R. J. Dellinger, and each of them, with full power of substitution, as proxies, to vote all the shares of common and preferred stock of Sprint Corporation (“Sprint”) that the undersigned is entitled to vote at the 2003 Annual Meeting of Stockholders to be held May 13, 2003, and any adjournment thereof, upon the matters set forth 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 voted FOR items 1, 2, 3, and 4 and AGAINST items 5, 6, 7 and 8. A majority of said proxies, or any substitutes, whoCompensation Committee, it shall be presentstricken and act at the meeting (or if only oneremainder of this Plan shall be presentremain in full force and act, then that one) shall have all the powers of said proxies hereunder.effect. PRELIMINARY FORM OF PROXY SPRINT NEXTEL CORPORATION 6200 SPRINT PARKWAY OVERLAND PARK, KS 66251 VOTE BY INTERNET—www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern time on May 14, 2012 (May 10, 2012 for shares held through our 401(k) plan). Have the control number in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by Sprint in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards, and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern time on May 14, 2012 (May 10, 2012 for shares held through our 401(k) plan). Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 to arrive no later than the closing of the polls on May 15, 2012. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: M44096-P21643-Z57233 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY SPRINT NEXTEL CORPORATION The Board of Directors recommends you vote FOR the following proposals: 1. Election of Directors For Against Abstain Nominees: 1a. Robert R. Bennett ! ! ! 1b. Gordon M. Bethune ! ! ! For Against Abstain 4. To approve an amendment to Sprint’s Articles of Incorporation to opt-out of the business 1c. Larry C. Glasscock ! ! ! combination statute. ! ! ! 1d. James H. Hance, Jr. 5. To approve an amendment to Sprint’s Articles of ! ! ! Incorporation to eliminate the business combination ! ! ! provision in Article SEVENTH. 1e. Daniel R. Hesse ! ! ! 6. To approve the material terms of performance objectives ! ! ! under 2007 Omnibus Incentive Plan. 1f. V. Janet Hill ! ! ! The Board of Directors recommends you vote AGAINST the following proposals: 1g. Frank Ianna ! ! ! 7. To vote on a shareholder proposal to adopt a bonus ! ! ! deferral policy. 1h. Sven-Christer Nilsson ! ! ! 8. To vote on a shareholder proposal concerning political ! ! ! contributions. 1i. William R. Nuti ! ! ! NOTE: The proxy holder(s) will vote in their discretion on any other business as may properly come before the meeting or any 1j. Rodney O’Neal ! ! ! adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When 2. To ratify the appointment of KPMG LLP as the independent ! ! ! signing as attorney, executor, administrator, or other registered public accounting firm of Sprint Nextel for 2012. fiduciary, please give full title as such. Joint owners should 3. Advisory resolution to approve executive compensation. each sign personally. All holders must sign. If a corporation ! ! ! or partnership, please sign in full corporate or partnership name, by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date PRELIMINARY FORM OF PROXY ADMISSION TICKET 2012 ANNUAL MEETING OF SHAREHOLDERS Tuesday, May 15, 2012 10:00 a.m. Central time Sheraton Overland Park Hotel 6100 College Boulevard Overland Park, Kansas 66211 THIS ADMISSION TICKET ADMITS ONLY THE NAMED SHAREHOLDER AND A GUEST, OR PERSONS HOLDING PROXIES FROM SHAREHOLDERS. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. M44096-P21643-Z57233 SPRINT NEXTEL CORPORATION 6200 SPRINT PARKWAY OVERLAND PARK, KANSAS 66251 This Proxy is solicited on behalf of the Board of Directors for the Annual Meeting on May 15, 2012 The undersigned hereby appoints Charles R. Wunsch and Timothy P. O’Grady, and each of them, with full power of substitution, as proxies, to vote all the shares of stock of Sprint Nextel Corporation that the undersigned is entitled to vote at the 2012 Annual Meeting of Shareholders to be held on May 15, 2012, and any adjournment thereof, upon the matters set forth, 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 indicated. If this card is signed and returned without indication as to how to vote, the shares will be voted FOR items 1 through 6 and AGAINST items 7 through 8. Any one of said proxies, or any substitutes, who shall be present and act at the meeting shall have all the powers of said proxies hereunder. Continued and to be signed on reverse side SPRINT CORPORATION 6200 Sprint Parkway Overland Park, Kansas 66251 VOTE BY INTERNET—www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site. You will be prompted to enter your 12-digit Control Number which is located below to obtain your records and to create an electronic voting instruction form. VOTE BY PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call. You will be prompted to enter your 12-digit Control Number which is located below and then follow the simple instructions the Vote Voice provides you. VOTE BY MAIL Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to Sprint Corporation, c/o ADP, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:                  SPRNT1                  KEEP THIS PORTION FOR YOUR RECORDS — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. SPRINT CORPORATION The Board of Directors recommends a vote FOR items 1, 2, 3, and 4 and AGAINST 5, 6, 7 and 8.   Vote On Directors                                    1.   To elect the nominees listed below, and each of them, as Directors of Class II; 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.   For All   ¨   Withhold All   ¨   For All Except   ¨        To withhold authority to vote, mark “For All Except” and write the nominee’s number on the line below.                                                                                                 Nominees:    01) Gary D. Forsee                      02) Charles E. Rice                      03) Louis W. Smith     For   Against   Abstain            For   Against   Abstain     Vote on Proposals                                  2.   To amend the Articles of Incorporation to declassify Sprint’s Board of Directors.   ¨   ¨   ¨    5.   Stockholder Proposal Concerning Option Repricing   ¨   ¨   ¨ 3.   To approve amendments to the 1988 Employees Stock Purchase Plan.   ¨   ¨   ¨    6.   Stockholder Proposal Concerning Severance Agreements With Executives   ¨   ¨   ¨ 4.   To ratify appointment of Ernst & Young LLP as independent auditors of Sprint for 2003 (see page 31 of enclosed proxy statement for new policy prohibiting Sprint’s independent auditors from providing tax services to Sprint’s executives).   ¨   ¨   ¨    7.   Stockholder Proposal Concerning CEO Pay Cap   ¨   ¨   ¨                    8.   Stockholder Proposal Concerning Change in Control Provisions   ¨   ¨   ¨ Please sign exactly as your name(s) appear(s) to the right. If shares are held jointly, any one of the joint owners may sign. Attorneys-in-fact, executors, administrators, trustees, guardians or corporation officers should indicate the capacity in which they are signing. PLEASE VOTE THIS PROXY PROMPTLY whether or not you expect to attend the meeting.                              Yes   No                          HOUSEHOLDING ELECTION—Please indicate if you consent to receive certain future investor communications in a single package per household   ¨   ¨                                                                                                                                                                                                                   Signature [PLEASE SIGN WITHIN BOX]         Date                Signature (Joint Owners)                    Date