UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number 1-4721
SPRINT CORPORATION
(Exact name of registrant as specified in its charter)
KANSAS 48-0457967
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 11315, Kansas City, Missouri 64112
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (913) 624-3000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Preferred Stock, without par
value
First series, $7.50 stated
value New York Stock Exchange
Second series, $6.25 stated
value New York Stock Exchange
Common stock, $2.50 par value,
and Rights (shares New York Stock Exchange
outstanding at March 1, 1994, Chicago Stock Exchange
343,913,432) Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of voting stock held by non-affiliates at
March 1, 1994 is $12,687,759,984.
Documents incorporated by reference.
Registrant's definitive proxy statement filed pursuant to
Regulation 14A promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934 is
incorporated by reference in Part III hereof.
SPRINT CORPORATION
SECURITIES AND EXCHANGE COMMISSION
ANNUAL REPORT ON FORM 10-K
Part I
Item 1. Business
THE CORPORATION
Sprint Corporation (Sprint), incorporated in 1938 under the laws
of Kansas, is a holding company. Sprint's principal subsidiaries
provide local exchange, cellular/wireless and domestic and
international long distance telecommunications services. Other
subsidiaries are engaged in the wholesale distribution of
telecommunications products and the publishing and marketing of
white and yellow page telephone directories.
Sprint, through its subsidiaries, owns Sprint Communications
Company L.P. (the Limited Partnership), the principal entity
comprising the long distance division. Through December 31,
1991, GTE Corporation (GTE) owned a 19.9 percent interest in the
Limited Partnership. In March 1993, Sprint's merger with Centel
Corporation (Centel) was consummated, increasing Sprint's local
exchange operations and greatly expanding its cellular/wireless
operations.
LONG DISTANCE COMMUNICATIONS SERVICES
The long distance division is the nation's third largest long
distance telephone company, operating a nationwide all-digital
long distance communications network utilizing state-of-the-art
fiber-optic and electronic technology. The division provides
domestic voice and data communications services across certain
specified geographical boundaries, as well as international long
distance communications services. Rates charged by the division
for its services sold to the public are subject to different
levels of state and federal regulation, but are generally not
subject to rate-base regulation. The division had net operating
revenues of $6.14 billion, $5.66 billion and $5.39 billion in
1993, 1992 and 1991, respectively.
The 1982 Modification of Final Judgment (MFJ) entered into by
American Telephone and Telegraph Company (AT&T) and the
Department of Justice significantly affected the long distance
communications market. The major aspects of the MFJ were (1) the
divestiture of AT&T's local telephone operating companies (the
Bell Operating Companies), (2) the creation of geographical areas
called Local Access and Transport Areas (LATAs) within which the
Bell Operating Companies and independent local exchange companies
provide basic local and intra-LATA toll service, (3) the
retention of long distance services by AT&T, and (4) the
prohibition against the Bell Operating Companies providing inter-
LATA services and information services, and manufacturing
telecommunications equipment. The Bell Operating Companies and
GTE local exchange companies were required by the MFJ and the GTE
Consent Decree, respectively, to provide customers with access to
all inter-LATA carriers' networks in a manner "equal in type,
quality, and price" to that provided to AT&T (equal access). The
independent local exchange companies were required by the Federal
Communications Commission (FCC) to provide equal access from many
of their central offices.
AT&T dominates the long distance communications market and is
expected to continue to dominate the market for some years into
the future. MCI Communications Corporation (MCI) is the nation's
second largest long distance telephone company. Sprint's long
distance division competes with AT&T and MCI in all segments of
the long distance communications market. Competition is based
upon price and pricing plans, the types of services offered,
customer service, and communications quality, reliability and
availability.
The opportunities for and cost of competition and, as a result,
the structure of the long distance telecommunications industry
are all subject to varying degrees of change by decisions of the
executive, judicial and legislative branches of the federal
government. The stated objective of these changes is to open the
long distance market to new entrants and eventually replace
regulation with competition where it best serves the public
interest. Some of the major issues being addressed by the
federal government to facilitate the transition to a competitive
market include the full implementation of equal access (discussed
above), equal charges per unit of traffic for access transport
provided to long distance carriers (discussed below), lessened
regulation of AT&T (including permitting individual customer
offerings), and the modification of some or all of the line-of-
business restrictions imposed on the Bell Operating Companies by
the MFJ (also discussed below). Many of these same competitive
issues are also being considered by a number of state regulators
and legislators.
In 1982, the FCC distinguished between carriers and found some
(AT&T and the Local Exchange Carriers, or LECs) to be dominant,
and others (primarily smaller competitive long distance
companies) to be nondominant. The FCC found it was in the public
interest to continue to regulate dominant carriers but, because
of market forces, it was appropriate to significantly lessen the
amount of regulation applied to nondominant domestic carriers;
thus, for instance, nondominant carriers were allowed to choose
not to file interstate tariffs. This policy of "permissive
detariffing" for nondominant carriers was found by the U.S. Court
of Appeals for the D.C. Circuit, in November 1992, to violate the
requirement in the Communications Act that all carriers "shall"
file tariffs. In response to the Court's decision, the FCC
adopted rules streamlining tariff filings for nondominant
carriers. The U.S. Supreme Court subsequently agreed to hear an
appeal of the Circuit Court decision. In February 1993, AT&T
filed lawsuits in federal District Court in Washington, D.C.
against the Limited Partnership, MCI and WilTel, Inc. alleging
unspecified damages for providing competitive service at rates
not contained in tariffs filed with the FCC. In November 1993,
the court granted Sprint's motion to dismiss AT&T's lawsuit;
however, AT&T has appealed the decision to the D.C. Circuit
Court. Although it is impossible to predict the outcome of these
proceedings with certainty, Sprint believes that the Limited
Partnership has at all times complied with applicable laws and
regulations and that its rates are proper and enforceable.
In 1989, the FCC replaced regulation of AT&T's rate of return
with a system of price caps, giving AT&T increased pricing
flexibility. In 1991, the FCC adopted partial "streamlined"
regulation of certain competitive business services provided by
AT&T. Specifically, the FCC removed these services (primarily
WATS and private line) from price caps regulation, reduced the
related tariff filing requirements and permitted contracts with
individual customers if the terms are generally available to
other business users. The FCC subsequently extended
"streamlined" regulation to most 800 services provided by AT&T.
Also in 1991, the FCC extended the provision of the MFJ requiring
the Bell Operating Companies (and all other LECs) to apply "equal
charges per unit of traffic" for access transport to all
interexchange carriers, which otherwise would have expired, and
instituted a comprehensive proceeding to determine new access
transport rules. In October 1992, the FCC adopted a new rate
structure and new pricing rules for LEC-provided switched
transport. LECs filed new access transport tariffs with the FCC
in September 1993, which contain rates that will purportedly
reduce the costs of the largest interexchange carrier by less
than 1 percent and increase the costs of the smaller
interexchange carriers (including Sprint's long distance division)
by less than 2 percent. The new rates went into effect on December
30, 1993.
In 1991, a series of decisions by the U.S. District Court and
Circuit Court of Appeals in Washington, D.C. resulted in the
MFJ's restriction against participation by the Bell Operating
Companies in information services being removed. Legislation has
been introduced in Congress, however, to place some safeguards on
the provision of those services. Legislation also has been
introduced in both Houses of Congress in 1994 to substantially
modify the restrictions in the MFJ. The bill in the U.S. House
would require the Justice Department, instead of the District
Court, to determine whether the provision of long distance
service by the Bell Operating Companies would substantially harm
competition, but there are significant exceptions to this rule.
The bill in the U.S. Senate would require the FCC to determine
that the Bell Operating Companies can provide competitive long
distance service only after local telephone competition has
diminished their monopoly power. The Clinton Administration has
also indicated that it favors legislation which promotes local
telephone competition and the national information
infrastructure. Although federal legislation to modify the MFJ
has been introduced several times in recent years but has not
passed, there appears to be a greater likelihood that Congress
will act during the Clinton Administration.
LOCAL COMMUNICATIONS SERVICES
The local division is comprised of rate-regulated local exchange
operating companies which serve approximately 6.1 million access
lines in 19 states. In addition to furnishing local exchange
services, the division provides intra-LATA toll service and
access by other carriers to Sprint's local exchange facilities.
The division had net operating revenues of $4.13 billion, $3.86
billion and $3.75 billion in 1993, 1992 and 1991, respectively.
Florida and North Carolina were the only jurisdictions in which
10 percent or more of the division's total 1993 net operating
revenues were generated. The following table reflects major
revenue categories as a percentage of the division's total net
operating revenues:
1993 1992 1991
Local service 39.4% 39.0% 38.3%
Network access 37.1 36.9 37.2
Toll service 12.2 12.6 13.0
Other 11.3 11.5 11.5
Total 100.0% 100.0% 100.0%
AT&T, as the dominant long distance telephone company, is the
division's largest customer for network access services. In
1993, 17.3 percent of the division's net operating revenues (6.3
percent of Sprint's consolidated net operating revenues) was
derived from services provided to AT&T, primarily network access
services, compared to 18.7 percent (6.9 percent of Sprint's
consolidated net operating revenues) in 1992. While AT&T is a
significant customer, Sprint does not believe the division's
revenues are dependent upon AT&T, as customers' demand for inter-
LATA long distance telephone service is not tied to any one long
distance carrier. Historically, as the market share of AT&T's
long distance competitors increases, the percent of revenues
derived from network access services provided to AT&T decreases.
Effective January 1, 1991, the FCC adopted a price caps
regulatory format for the Bell Operating Companies and the GTE
local exchange companies. Other LECs could volunteer to become
subject to price caps regulation. Under price caps, prices for
network access service must be adjusted annually to reflect
industry average productivity gains (as specified by the FCC),
inflation and certain allowed cost changes. Sprint elected to be
subject to price caps regulation, and under the form of the plan
adopted, Sprint's LECs generally have an opportunity to earn up
to a 14.25 percent rate of return on investment. Some of
Sprint's LECs have committed to produce higher than industry
average productivity gains, and as a result have an opportunity
to earn up to a 15.25 percent rate of return on investment. The
LECs owned by Centel did not originally elect price caps, but as
a result of the merger, these LECs adopted price caps effective
July 1, 1993. Prior to price caps, under rate of return
regulation, the Centel companies' authorized rate of return on
investment was 11.25 percent, with the ability to earn 0.25
percent above the authorized return. The FCC is conducting a
scheduled review of all aspects of the price caps plan; changes
to the plan may be proposed by interested parties and the FCC may
implement changes in 1995. Without further action by the FCC,
the current price caps plan would expire in 1995 and would be
replaced by rate of return regulation.
The potential for more direct competition with Sprint's LECs is
increasing. Many states, including most of the states in which
Sprint's LECs operate, allow competitive entry into the intra-LATA
long distance service market. State regulators are also
increasingly confronted with requests to permit resale of
local exchange services, with such resale now existing in a number
of states in which Sprint's LECs operate, including Pennsylvania,
Kansas, Illinois and Missouri. Illinois law also allows
alternative telecommunications providers to obtain certificates
of local exchange service authority in direct competition with
existing LECs if certain showings are made to the satisfaction
of the Illinois Commerce Commission.
At the interstate level, the FCC has revised its rules to permit
connection of customer-owned coin telephones to the local
network, exposing LECs to direct coin telephone competition.
Additionally, the FCC has assisted Competitive Access Providers
(CAPs) in providing access to interexchange carriers and end
users by mandating that all Tier 1 (over $100 million annual
operating revenues) LECs allow collocation of CAP equipment in
LEC central offices. The FCC's decision regarding collocation is
under appeal to the U.S. Court of Appeals for the D.C. Circuit.
The extent and ultimate impact of competition for LECs will
continue to depend, to a considerable degree, on FCC and state
regulatory actions, court decisions and possible federal or state
legislation. Legislation designed to stimulate local competition
between local exchange service providers and cable programming
service providers, in both markets, is presently pending in both
houses of the U.S. Congress. It is uncertain if any of the bills
will be enacted.
CELLULAR AND WIRELESS COMMUNICATIONS SERVICES
The cellular and wireless division primarily consists of Sprint
Cellular Company and its subsidiaries. In addition, Sprint's
LECs hold FCC licenses for Rural Service Areas. For management
and financial reporting purposes, these operations have been
combined with Sprint Cellular Company's operations.
Approximately 50 percent of Sprint's local communications
services customers are located in areas served by the cellular
and wireless division of Sprint. The division has operating
control of 88 markets in 15 states and a minority interest in 64
markets. The division had net operating revenues of $464 million
in 1993 and served more than 652,000 customers as of year end.
In 1992 and 1991, the division had revenues of $322 million and
$242 million, respectively.
Prior to the November 1992 decision by the U.S. Court of Appeals
for the D.C. Circuit rejecting permissive detariffing discussed
above under "Long Distance Communications Services", cellular
carriers had not filed tariffs with the FCC. In February 1993,
resale of domestic interstate toll tariffs for Sprint's cellular
and wireless operations were filed. The FCC, pursuant to
authority conferred by the Revenue Reconciliation Act of 1993,
has adopted rules to pre-empt all state regulation of commercial
mobile radio services, including cellular, and to forbear from
enforcing tariffing requirements with respect to commercial
mobile radio services.
The FCC licenses two carriers in each cellular market area and
these carriers compete directly with each other to provide
cellular service to end users and resellers. Each carrier is
licensed to operate on frequencies set aside for its cellular
operation. Licensees also encounter retail competition from
resale carriers in their market. Sprint Cellular Company also
sells cellular equipment in the competitive retail market.
Competition is based on quality of service, price and product
quality.
The FCC has announced that it will award additional radio
spectrum for the provision of personal communications services
(PCS). The FCC is expected to auction spectrum licenses during
1994. The FCC expects that PCS will result in additional competition
for existing cellular carriers.
PRODUCT DISTRIBUTION AND DIRECTORY PUBLISHING
North Supply Company (North Supply), a wholesale distributor of
telecommunications, security and alarm, and electrical products,
distributes products of more than 900 manufacturers to
approximately 12,000 customers. Products range from basics, such
as wire and cable, telephones and repair parts, to complete PBX
systems and security and alarm equipment. North Supply also
provides material management services to several of its
affiliates and to several subsidiaries of the Regional Bell
Holding Companies.
The nature of competition in North Supply's markets demands a
high level of customer service to succeed, as a number of
competitors, including other national wholesale distributors,
sell the same products.
North Supply sells to telephone companies and other users of
telecommunications products, including Sprint's local and long
distance divisions, other local and long distance telephone
companies, and companies with large private networks. Other
North Supply customers include original equipment manufacturers,
interconnect companies, security and alarm dealers and local,
state and federal governments. Sales to affiliates represented 39.3
percent of North Supply's total sales in 1993 and 1992 and
36.5 percent in 1991. North Supply's net operating revenues
were $677 million, $594 million and $569 million in 1993,
1992 and 1991, respectively.
Sprint Publishing & Advertising publishes and markets white and
yellow page telephone directories in certain of Sprint's local
exchange territories, as well as in the greater metropolitan
areas of Milwaukee, Wisconsin and Chicago, Illinois. The company
publishes approximately 277 directories in 19 states with a
circulation of 12.6 million copies. Sprint Publishing &
Advertising's net operating revenues were $268 million, $257
million, and $245 million in 1993, 1992 and 1991, respectively.
In addition, Centel Directory Company, another Sprint subsidiary,
publishes and markets approximately 59 directories in 5 states
with a circulation of 3.5 million copies through The CenDon
Partnership, a general partnership between Centel Directory
Company and The Reuben H. Donnelley Corporation. Revenues of
Sprint Publishing & Advertising and The CenDon Partnership are
principally derived from selling directory advertisements. The
companies compete with publishers of telephone directories and
others for advertising revenues.
ENVIRONMENT
Sprint's subsidiaries are involved in the remediation of certain
sites, primarily relating to leakage from tanks used for the
storage of gasoline for vehicles and diesel fuel for standby
power generators. Compliance with federal, state and local
provisions relating to the protection of the environment has had
no significant effect on the capital expenditures or earnings of
Sprint or any of its subsidiaries, and future effects are not
expected to be material.
PATENTS, TRADEMARKS AND LICENSES
Sprint and its subsidiaries own numerous patents, patent
applications and trademarks in the United States and other
countries. Sprint and its subsidiaries are also licensed under
domestic and foreign patents owned by others. In the aggregate,
these patents, patent applications, trademarks and licenses are
of material importance to Sprint's businesses.
EMPLOYEE RELATIONS
As of December 31, 1993, Sprint and its subsidiaries had
approximately 50,500 employees, of whom approximately 25 percent
are members of unions. During 1993, Sprint and its subsidiaries
had no material work stoppages caused by labor controversies.
INFORMATION AS TO INDUSTRY SEGMENTS
Sprint's net operating revenues from affiliates and non-
affiliates, by segment, for the three years ended December 31,
1993, 1992 and 1991, are as follows (in millions):
Net Operating Revenues
1993 1992 1991
Long Distance Communications
Services
Non-affiliates $ 6,088.4 $ 5,612.1 $ 5,344.2
Affiliates 50.8 46.1 43.4
6,139.2 5,658.2 5,387.6
Local Communications Services
Non-affiliates 3,911.5 3,662.4 3,564.6
Affiliates 214.5 199.8 189.1
4,126.0 3,862.2 3,753.7
Cellular and Wireless
Communications Services
Non-affiliates 464.0 322.2 242.1
Product Distribution and
Directory Publishing
Non-affiliates 679.2 629.7 618.5
Affiliates 266.0 233.2 207.5
945.2 862.9 826.0
Subtotal 11,674.4 10,705.5 10,209.4
Intercompany revenues (306.6) (285.2) (276.1)
Net operating revenues $ 11,367.8 $ 10,420.3 $ 9,933.3
For additional information as to industry segments of Sprint,
refer to "Business Segment Information" within the Financial
Statements, Financial Statement Schedules and Supplementary Data filed
as part of this report.
Item 2. Properties
The aggregate cost of Sprint's property, plant and equipment was
$17.72 billion as of December 31, 1993, of which $11.23 billion
relates to local communications services, $5.49 billion relates
to long distance communications services and $570 million relates
to cellular/wireless communications services. These properties
consist primarily of land, buildings, digital fiber-optic
network, switching equipment, cellular radio, microwave radio and
cable and wire facilities and are in good operating condition.
Certain switching equipment and several general office facilities
are located on leased premises. The long distance division has
been granted easements, rights-of-way and rights-of-occupancy,
primarily by railroads and other private landowners, for its
fiber-optic network.
The properties of the product distribution and directory
publishing businesses consist primarily of office and warehouse
facilities to support the business units in the distribution of
telecommunications products and publication of telephone
directories.
Sprint owns its corporate headquarters building and certain other
property located in the greater Kansas City metropolitan area.
Property, plant and equipment with an aggregate cost of
approximately $10.36 billion is either pledged as security for
first mortgage bonds and certain notes or is restricted for use
as mortgaged property.
Item 3. Legal Proceedings
In September 1993, a memorandum of agreement setting forth
settlement terms was executed in connection with the class action
lawsuit originally filed in 1990 by certain Sprint shareholders
against Sprint and certain of its executive officers and
directors in the United States District Court for the District of
Kansas. An amended class action complaint was filed in January
1992 after dismissal without prejudice of the original complaint.
The plaintiffs in the class action alleged violations of various
federal securities laws and related state laws and, among other
relief, sought unspecified compensatory damages. A related
shareholders' derivative complaint was dismissed without
prejudice by the same court in March 1993. Pursuant to the
settlement, which includes settlement of the derivative claims,
Sprint will pay $28.5 million. Sprint admits no wrongdoing, but
settled the case to avoid the costs and uncertainties of further
litigation and the disruption of business activities that would
result from trial. Approximately 60 percent of the settlement
will be recovered from Sprint's insurance carriers. The net
settlement did not have a significant effect on Sprint's 1993
results of operations. The settlement agreement is subject to
the approval of the court.
Following announcement of the Sprint/Centel merger agreement in
May 1992, a class action suit was filed by certain Centel
shareholders against Centel and certain of its officers and
directors. The suit was consolidated in the United States
District Court for the Northern District of Illinois in July
1992. The complaint alleges violations of federal securities
laws by failing to disclose pertinent information regarding the
value of Centel common stock. The plaintiffs seek damages in an
unspecified amount.
Other suits arising in the ordinary course of business are
pending against Sprint and its subsidiaries. Sprint cannot
predict the ultimate outcome of these actions or the above-
described litigation, but believes they will not result in a
material effect on Sprint's consolidated financial statements.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders during the
fourth quarter of 1993.
Item 10(b). Executive Officers of the Registrant
Office Name Age
Chairman and Chief Executive Officer William T. Esrey (1) 54
President - Cellular and Wireless
Communications Division Dennis E. Foster (2) 53
President - Long Distance Division Ronald T. LeMay (3) 48
President - Local Telecommunications
Division D. Wayne Peterson (4) 58
Executive Vice President - Law and
External Affairs J. Richard Devlin (5) 43
Executive Vice President - Chief
Financial Officer Arthur B. Krause (6) 52
Senior Vice President - Financial
Services and Taxes Gene M. Betts (7) 41
Senior Vice President - External
Affairs John R. Hoffman (8) 48
Senior Vice President and Controller John P. Meyer (9) 43
Senior Vice President - Strategic
Planning and Business Development Theodore H. Schell (10) 49
Senior Vice President - Quality
Development and Public Relations Richard C. Smith,Jr.(11) 53
Senior Vice President - Treasurer M. Jeannine
Strandjord (12) 48
Senior Vice President - Human
Resources I. Benjamin Watson (13) 45
Vice President and Secretary Don A. Jensen (14) 58
(1)Mr. Esrey was elected Chairman in 1990. He was elected Chief
Executive Officer and a member of the Board of Directors in
1985. In addition, he has served as Chief Executive Officer
of the Limited Partnership since 1988.
(2)Mr. Foster was elected President - Cellular and Wireless
Communications Division in April 1993. Mr. Foster had served
as Senior Vice President - Operations of a subsidiary of
Sprint since 1992. From 1991 to 1992, he served as President
of GTE Mobilnet in Atlanta, Georgia. Prior to that, he had
served in various positions with GTE Corporation for more
than five years.
(3)Mr. LeMay was elected President - Long Distance Division in
1989. He had served as Executive Vice President - Corporate
Affairs of Sprint since 1987. He was elected to the Board of
Directors of Sprint in 1993.
(4)Mr. Peterson was elected President - Local Telecommunications
Division in August 1993. From 1980 to 1993, he served as
President of Carolina Telephone and Telegraph Company, a
subsidiary of Sprint.
(5)Mr. Devlin was elected Executive Vice President - Law and
External Affairs in 1989. He had served as Vice President
and General Counsel - Telephone since 1987.
(6)Mr. Krause was elected Executive Vice President - Chief
Financial Officer in 1988. During 1990 and 1991, he also
served as Chief Information Officer.
(7)Mr. Betts was elected Senior Vice President - Financial
Services and Taxes in 1990. He had served as Vice President
- Taxes since 1988.
(8)Mr. Hoffman was elected Senior Vice President - External
Affairs in 1990. He had served in the same capacity at the
Limited Partnership since 1986.
(9)Mr. Meyer was elected Senior Vice President and Controller in
April 1993. He had served as Vice President and Controller
of Centel since 1989. From 1986 to 1989, he served as
Controller of Centel.
(10)Mr. Schell was elected Senior Vice President - Strategic
Planning and Business Development of Sprint in 1990. He
joined the Long Distance Division as Vice President -
Strategic Planning in 1989. From 1983 to 1989, he served as
President of RealCom Communications Corporation, an IBM
subsidiary, whose principal business is telecommunications
services.
(11)Mr. Smith was elected Senior Vice President - Quality
Development and Public Relations in 1991. He had served as
President of the Limited Partnership's National Markets since
1989. From 1986 to 1989, he served as President of the
Limited Partnership's National Accounts Division.
(12)Ms. Strandjord was elected Senior Vice President -
Treasurer in 1990. She had served as Vice President and
Controller since 1986.
(13)Mr. Watson was elected Senior Vice President - Human
Resources in April 1993. Mr. Watson headed a transition team
in connection with the Centel merger following announcement
of the merger. He had served as Vice President - Finance and
Administration of United Telephone - Eastern Group, an
operating group of subsidiaries of Sprint, since 1990. From
1983 to 1990, he served as Vice President - Administration of
the Midwest Group, an operating group of subsidiaries of
Sprint.
(14)Mr. Jensen was elected Vice President and Secretary in
1975.
There are no known family relationships between any of the
persons named above or between any such persons and any outside
directors of Sprint. Officers are elected annually.
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
Market Price Per Share
1993 1992
End of End of
High Low Period High Low Period
First Quarter 31 3/4 25 1/2 30 1/2 26 3/8 21 22 1/2
Second Quarter 35 3/8 29 1/2 35 1/8 25 20 3/4 21 3/4
Third Quarter 37 1/2 33 1/2 36 3/4 24 3/8 21 1/2 24 3/8
Fourth Quarter 40 1/4 31 3/8 34 3/4 26 3/4 23 3/8 25 1/2
As of March 1, 1994, there were approximately 105,000 record
holders of Sprint's common stock. The principal trading market
for Sprint's common stock is the New York Stock Exchange. The
common stock is also traded on the Chicago and Pacific Stock
Exchanges. Sprint has declared dividends of $0.25 per quarter
during each of the years ended December 31, 1993 and 1992.
Item 6. Selected Financial Data
For information required by Item 6, refer to the "Selected Financial Data"
section of the Financial Statements, Financial Statement Schedules and
Supplementary Data filed as part of this report.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
For information required by Item 7, refer to the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" section
of the Financial Statements, Financial Statement Schedules and Supplementary
Data filed as part of this report.
Item 8. Financial Statements and Supplementary Data
For information required by Item 8, refer to the "Consolidated Financial
Statements and Schedules" and "Quarterly Financial Data sections of the
Financial Statements, Financial Statement Schedules and Supplementary
Data filed as part of this report.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure
As previously reported in Sprint's Current Report on Form 8-K
dated April 23, 1993, following consummation of the merger with
Centel, Arthur Andersen & Co. was replaced with Ernst & Young as
auditors of Centel and its subsidiaries, effective April 23,
1993.
Part III
Item 10. Directors and Executive Officers of the Registrant
Pursuant to Instruction G(3) to Form 10-K, the information
relating to Directors of Sprint required by Item 10 is
incorporated by reference from Sprint's definitive proxy
statement filed pursuant to Regulation 14A.
For information pertaining to Executive Officers of Sprint, as
required by Instruction 3 of Paragraph (b) of Item 401 of
Regulation S-K, refer to the "Executive Officers of the Registrant"
section of Part I of this report.
Pursuant to Instruction G(3) to Form 10-K, the information
relating to compliance with Section 16(a) required by Item 10 is
incorporated by reference from Sprint's definitive proxy
statement filed pursuant to Regulation 14A.
Item 11. Executive Compensation
Pursuant to Instruction G(3) to Form 10-K, the information
required by Item 11 is incorporated by reference from Sprint's
definitive proxy statement filed pursuant to Regulation 14A.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Pursuant to Instruction G(3) to Form 10-K, the information
required by Item 12 is incorporated by reference from Sprint's
definitive proxy statement filed pursuant to Regulation 14A.
Item 13. Certain Relationships and Related Transactions
Pursuant to Instruction G(3) to Form 10-K, the information
required by Item 13 is incorporated by reference from Sprint's
definitive proxy statement filed pursuant to Regulation 14A.
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) 1. The consolidated financial statements of Sprint
and supplementary financial information filed as part of
this report are listed in the Index to Financial
Statements, Financial Statement Schedules and
Supplementary Data.
2. The consolidated financial statement
schedules of Sprint filed as part of this report are
listed in the Index to Financial Statements, Financial
Statement Schedules and Supplementary Data.
3. The following exhibits are filed as part of
this report:
EXHIBITS
(3) Articles of Incorporation and Bylaws:
(a) Articles of Incorporation, as amended (filed
as Exhibit 4 to Sprint Corporation Current Report
on Form 8-K dated March 9, 1993 and incorporated
herein by reference).
(b) Bylaws, as amended (filed as Exhibit 3(b) to
Sprint Corporation Annual Report on Form 10-K for
the year ended December 31, 1991 and incorporated
herein by reference).
(4) Instruments defining the Rights of Sprint's Equity
Security Holders:
(a) The rights of Sprint's equity security holders
are defined in the Fifth, Sixth, Seventh and Eighth
Articles of Sprint's Articles of Incorporation. See
Exhibit 3(a).
(b) Rights Agreement dated as of August 8, 1989,
between Sprint Corporation (formerly United
Telecommunications, Inc.) and United Missouri Bank,
N.A. (formerly United Missouri Bank of Kansas City,
N.A.), as Rights Agent (filed as Exhibit 2(b) to
Sprint Corporation Registration Statement on Form 8-
A dated August 11, 1989 (File No. 1-4721), and
incorporated herein by reference).
(c) Amendment and supplement dated June 4, 1992 to
Rights Agreement dated as of August 8, 1989 (filed
as Exhibit 2(c) to Amendment No. 1 on Form 8 dated
June 8, 1992 to Sprint Corporation Registration
Statement on Form 8-A dated August 11, 1989 (File
No. 1-4721), and incorporated herein by reference).
(10) Material Agreements - Merger Agreement:
(a) Agreement and Plan of Merger dated as of May
27, 1992, among Sprint Corporation, F W Sub Inc.
and Centel Corporation (filed as Exhibit 2 to
Sprint Corporation Current Report on Form 8-K dated
May 27, 1992 and incorporated herein by reference).
(b) First Amendment dated as of February 19, 1993,
to the Agreement and Plan of Merger, dated as of
May 27, 1992, among Sprint Corporation, F W Sub
Inc. and Centel Corporation (filed as Exhibit 2b to
Sprint Corporation Current Report on Form 8-K dated
March 9, 1993 and incorporated herein by
reference).
(10) Executive Compensation Plans and Arrangements:
(c) 1978 Stock Option Plan, as amended (filed as
Exhibit 19(a) to United Telecommunications, Inc.
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1991, and incorporated herein by
reference).
(d) 1981 Stock Option Plan, as amended (filed as
Exhibit 19(b) to United Telecommunications, Inc.
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1991, and incorporated herein by
reference).
(e) 1985 Stock Option Plan, as amended (filed as
Exhibit 19(c) to United Telecommunications, Inc.
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1991, and incorporated herein by
reference).
(f) 1990 Stock Option Plan, as amended.
(g) 1990 Restricted Stock Plan, as amended (filed
as Exhibit 99 to Sprint Corporation Registration
Statement No. 33-50421 and incorporated herein by
reference).
(h) Long-Term Stock Incentive Program, as amended
(filed as Exhibit 19(e) to United
Telecommunications, Inc. Quarterly Report on Form
10-Q for the quarter ended September 30, 1991, and
incorporated herein by reference).
(i) Restated Memorandum Agreements Respecting
Supplemental Pension Benefits between Sprint
Corporation (formerly United Telecommunications,
Inc.) and two of its current and former executive
officers (filed as Exhibit 10(i) to Sprint
Corporation Annual Report on Form 10-K for the year
ended December 31, 1992, and incorporated herein by
reference).
(j) Executive Long-Term Incentive Plan.
(k) Executive Management Incentive Plan.
(l) Long-Term Incentive Compensation Plan (filed
as Exhibit 10(j) to United Telecommunications, Inc.
Annual Report on Form 10-K for the year ended
December 31, 1989, and incorporated herein by
reference).
(m) Short-Term Incentive Compensation Plan (filed
as Exhibit 10(k) to United Telecommunications, Inc.
Annual Report on Form 10-K for the year ended
December 31, 1989, and incorporated herein by
reference).
(n) Retirement Plan for Directors, as amended
(filed as Exhibit 28d to Registration Statement No.
33-28237, and incorporated herein by reference).
(o) Key Management Benefit Plan, as amended.
(p) Executive Deferred Compensation Plan, as
amended (filed as Exhibit 19(f) to United
Telecommunications, Inc. Quarterly Report on Form
10-Q for the quarter ended September 30, 1991, and
incorporated herein by reference).
(q) Director's Deferred Fee Plan, as amended
(filed as Exhibit 19(g) to United
Telecommunications, Inc. Quarterly Report on Form
10-Q for the quarter ended September 30, 1991, and
incorporated herein by reference).
(r) Supplemental Executive Retirement Plan (filed
as Exhibit 10(q) to Sprint Corporation Annual
Report on Form 10-K for the year ended December 31,
1992, and incorporated herein by reference).
(s) Form of Contingency Employment Agreements
between Sprint Corporation and certain of its
executive officers (filed as Exhibit 10(r) to
Sprint Corporation Annual Report on Form 10-K for
the year ended December 31, 1992, and incorporated
herein by reference).
(t) Form of Indemnification Agreements between
Sprint Corporation (formerly United
Telecommunications, Inc.) and its Directors and
Officers (filed as Exhibit 10(s) to Sprint
Corporation Annual Report on Form 10-K for the year
ended December 31, 1991, and incorporated herein by
reference).
(u) Summary of Executive Benefits (filed as
Exhibit 10(u) to Sprint Corporation Annual Report
on Form 10-K for the year ended December 31, 1991,
and incorporated herein by reference).
(v) Amended and Restated Centel Management
Incentive Plan.
(w) Amended and Restated Centel Stock Option Plan.
(x) Agreements Regarding Special Compensation and
Post Employment Restrictive Covenants between
Sprint Corporation and three of its executive
officers.
(y) Amended and Restated Centel Matched Deferred
Salary Plan.
(z) Amended and Restated Centel Directors Deferred
Compensation Plan.
(aa) Amended and Restated Centel Director Stock
Option Plan.
(11) Computation of Earnings Per Common Share.
(12) Computation of Ratio of Earnings to Fixed Charges.
(21) Subsidiaries of Registrant.
(23a) Consent of Ernst & Young.
(23b) Consent of Arthur Andersen & Co.
Sprint will furnish to the Securities and Exchange Commission,
upon request, a copy of the instruments defining the rights of
holders of its long-term debt and the long-term debt of its
subsidiaries. The total amount of securities authorized under
any of said instruments does not exceed 10 percent of the total
assets of Sprint and its subsidiaries on a consolidated basis.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the
fourth quarter of 1993.
(c) Exhibits are listed in Item 14(a).
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
SPRINT CORPORATION
(Registrant)
By /s/ W. T. Esrey
William T. Esrey
Chairman and
Chief Executive Officer
Date: March 14, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities indicated on
the 14th day of March, 1994.
/s/ W. T. Esrey
William T. Esrey
Chairman and
Chief Executive Officer
/s/ Arthur B. Krause
Arthur B. Krause
Executive Vice President -
Chief Financial Officer
/s/ John P. Meyer
John P. Meyer
Senior Vice President and Controller
Principal Accounting Officer
SIGNATURES
SPRINT CORPORATION
(Registrant)
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities indicated on
the 14th day of March, 1994.
/s/ DuBose Ausley /s/ Robert E. R. Huntley
DuBose Ausley, Director Robert E. R. Huntley, Director
/s/ Warren L. Batts /s/ George Hutton Jr.
Warren L. Batts, Director George N. Hutton Jr., Director
/s/ Ruth M. Davis /s/ Ronald T. LeMay
Ruth M. Davis, Director Ronald T. LeMay, Director
/s/ Joseph L. Dionne /s/ Linda K. Lorimer
Joseph L. Dionne, Director Linda Koch Lorimer, Director
/s/ W. T. Esrey /s/ C. Price
William T. Esrey, Director Charles H. Price II, Director
/s/ Donald J. Hall /s/ Frank E. Reed
Donald J. Hall, Director Frank E. Reed, Director
/s/ P. H. Henson /s/ Charles E. Rice
Paul H. Henson, Director Charles E. Rice, Director
/s/ Harold S. Hook /s/ Stewart Turley
Harold S. Hook, Director Stewart Turley, Director
INDEX TO FINANCIAL STATEMENTS, FINANCIAL Sprint Corporation
STATEMENT SCHEDULES AND SUPPLEMENTARY DATA
Selected Financial Data
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Consolidated Financial Statements and Schedules:
Management Report
Report of Independent Auditors - Ernst & Young
Report of Independent Auditors - Arthur Andersen & Co.
Business Segment Information as of or for each of the
three years ended December 31, 1993
Consolidated Statements of Income for each of the
three years ended December 31, 1993
Consolidated Balance Sheets as of December 31, 1993
and 1992
Consolidated Statements of Cash Flows for each of the
three years ended December 31, 1993
Consolidated Statements of Common Stock and Other
Shareholders' Equity for each of the three years
ended December 31, 1993
Notes to Consolidated Financial Statements
Financial Statement Schedules for each of the three
years ended December 31, 1993:
V - Consolidated Property, Plant and Equipment
VI - Consolidated Accumulated Depreciation
VIII - Consolidated Valuation and Qualifying
Accounts
IX - Consolidated Short-term Borrowings
X - Consolidated Supplementary Income
Statement Information
Certain financial statement schedules are omitted
because the required information is not present, or
because the information required is included in the
consolidated financial statements and notes thereto.
Quarterly Financial Data
SELECTED FINANCIAL DATA Sprint Corporation
As of or For the Years Ended December 31,
1993 1992 1991 1990 1989
(In Millions, Except Per Share Data)
Results of Operations <1>
Net operating revenues $ 11,367.8 $10,420.3 $9,933.3 $9,469.8 $8,557.6
Operating income <2> 1,250.6 1,213.4 1,185.6 1,045.3 1,076.7
Income from continuing
operations <2>, <3>,
<4> 480.6 496.1 472.7 351.1 353.0
Earnings per common
share from continuing
operations <2>, <3>,
<4> 1.39 1.46 1.41 1.06 1.08
Dividends per common
share 1.00 1.00 1.00 1.00 0.97
Financial Position <1>
Total assets $14,148.9 $13,599.6 $13,929.8 $14,080.6 $13,092.7
Property, plant and
equipment, net 10,314.8 10,219.9 10,310.5 10,295.2 9,700.9
Total debt (including
short-term borrowings) 5,094.4 5,442.7 5,571.2 6,082.3 5,471.3
Redeemable preferred
stock 38.6 40.2 56.6 60.0 63.5
Common stock and other
shareholders' equity 3,918.3 3,971.6 3,671.9 3,353.5 3,151.5
<1>Effective March 9, 1993, Sprint Corporation (Sprint)
consummated its merger with Centel Corporation (Centel).
Because the merger has been accounted for as a pooling of
interests, the accompanying data has been retroactively
restated to include the results of operations and financial
position of Centel. Dividends per common share for periods
prior to the merger represent the amounts paid by Sprint.
<2>During 1993, nonrecurring charges of $293 million were
recorded related to (a) transaction costs associated with the
merger with Centel and the expenses of integrating and
restructuring the operations of the two companies and (b) a
realignment and restructuring within the long distance
division. Such charges reduced consolidated 1993 income from
continuing operations by $193 million ($0.56 per share).
During 1990, nonrecurring charges of $72 million were
recorded related to the long distance division, which reduced
consolidated 1990 income from continuing operations by $37
million ($0.11 per share).
<3>During 1992 and 1991, gains were recognized related to the
sales of certain local telephone and cellular properties,
which increased consolidated 1992 income from continuing
operations by $44 million ($0.13 per share) and consolidated
1991 income from continuing operations by $78 million ($0.23
per share).
<4>During 1993, as a result of the enactment of the Revenue
Reconciliation Act of 1993, Sprint was required to adjust its
deferred income tax assets and liabilities to reflect the
increased tax rate. Such adjustment reduced consolidated
1993 income from continuing operations by $13 million ($0.04
per share).
MANAGEMENT'S DISCUSSION AND ANALYSIS OF Sprint Corporation
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Sprint/Centel Merger
Effective March 9, 1993, Sprint Corporation (Sprint)
consummated its merger with Centel Corporation (Centel), creating
a diversified telecommunications enterprise with operations in
long distance, local exchange and cellular/wireless
communications services. The merger has been accounted for as a
pooling of interests. Accordingly, the accompanying consolidated
financial statements and information have been restated
retroactively to include the results of operations, financial
position and cash flows of Centel for all periods prior to
consummation of the merger.
Consolidated Results of Operations
Each of Sprint's primary divisions -- long distance, local and
cellular/wireless communications services -- generated record
levels of net operating revenues and improved operating results
in 1993. The long distance division generated a solid 8 percent
growth in traffic volumes in 1993, the number of access lines
served by the local division grew 5 percent, and the
cellular/wireless division benefited from a strong 67 percent
customer line growth rate. Cost controls and synergies resulting
from the merger with Centel also contributed to the improved 1993
results.
Consolidated results of operations in 1993, 1992 and 1991 were,
however, affected by several nonrecurring items, as described in
the next section. Highlights of consolidated results are as
follows, excluding nonrecurring items as applicable:
*Consolidated net operating revenues grew 9 percent in 1993
to $11.37 billion, following a 5 percent increase in 1992.
*Income from continuing operations in 1993 was $687 million
as compared to $452 million in 1992 and $395 million in 1991 --
which represents a compounded annual growth rate of 21 percent
over the past three years.
*Earnings per common share from continuing operations
increased 50 percent in 1993 to $1.99 per share as compared to
$1.33 per share in 1992.
The following analysis of earnings per common share in 1993 and
1992 highlights the factors contributing to the improved results
and the impact of nonrecurring items:
1993 1992
Prior year's earnings per common share from
continuing operations (excluding
nonrecurring items) $ 1.33 $ 1.18
Favorable (unfavorable) factors contributing
to changes
Divisional operating results 0.63 0.06
Interest expense 0.11 0.07
Other non-operating expense (0.03) 0.05
Effective income tax rate (0.02) (0.02)
Change in weighted average common shares (0.03) (0.01)
Current year's earnings per common share from
continuing operations (excluding
nonrecurring items) 1.99 1.33
Nonrecurring items
Merger, integration and restructuring costs (0.56)
Divestitures 0.13
1993 Tax law change (0.04)
Discontinued operations (0.04)
Extraordinary losses (0.08) (0.05)
Accounting changes (1.12) 0.07
Total earnings per common share $ 0.15 $ 1.48
Nonrecurring Items
Merger, Integration and Restructuring Costs - As a result of
the merger with Centel, the operations of the merged companies
continue to be integrated and restructured to achieve
efficiencies which have begun to yield operational synergies and
cost savings, particularly during the latter half of 1993. The
transaction costs associated with the merger (consisting
primarily of investment banking and legal fees) and the estimated
expenses of integrating and restructuring the operations of the
two companies (consisting primarily of employee severance and
relocation expenses and costs of eliminating duplicative
facilities) resulted in nonrecurring charges aggregating $259
million, which reduced 1993 income from continuing operations by
$172 million ($0.50 per share).
In addition, in 1993, Sprint initiated a realignment and
restructuring of its long distance division, including the
elimination of approximately 1,000 positions and the closure of
two facilities. These actions are expected to improve market
focus, lower costs and streamline operations within the division,
and resulted in a nonrecurring charge of $34 million, which
reduced 1993 income from continuing operations by $21 million
($0.06 per share).
Divestitures - Divestitures of local telephone and cellular
operations in 1992 and 1991 resulted in gains of $81 million and
$114 million, respectively, which increased income from
continuing operations by $44 million and $78 million,
respectively.
1993 Tax Law Change - In August 1993, the Revenue
Reconciliation Act of 1993 was enacted which, among other
changes, raised the federal income tax rate to 35 percent from 34
percent. As a result, Sprint adjusted its deferred income tax
assets and liabilities to reflect the revised rate. The
adjustment related to Sprint's nonregulated subsidiaries
increased the income tax provision for 1993 by $13 million.
Discontinued Operations and Extraordinary Losses - During 1993,
Sprint incurred a loss from discontinued operations of $12
million, net of related income tax benefits. In 1993, 1992 and
1991, Sprint incurred extraordinary losses related to the early
extinguishments of debt of $29 million, $16 million, and $2
million, respectively, net of related income tax benefits.
Accounting Changes - Effective January 1, 1993, Sprint changed
its method of accounting for postretirement and postemployment
benefits by adopting Statement of Financial Accounting Standards
(SFAS) No. 106 and No. 112 and effected another accounting
change. The cumulative effect of these changes in accounting
principles reduced 1993 net income by $384 million. Effective
January 1, 1992, Sprint also changed its method of accounting for
income taxes by adopting SFAS No. 109. The cumulative effect of
this change in accounting principle increased 1992 net income by
$23 million.
Non-operating Items
Interest expense in 1993 and 1992 decreased $59 million and $37
million, respectively, generally related to decreases in average
levels of debt outstanding and lower interest rates.
The components of other expense, net are as follows (in
millions):
1993 1992 1991
Equity in earnings from cellular
minority partnership investments $ 20.0 $ 12.8 $ 8.8
Minority interests (9.4) (6.1) (51.6)
Write-down of assets held for sale (16.0) (15.0)
Other, net (16.9) 3.3 7.2
Total other expense, net $ (22.3) $ (5.0) $ (35.6)
The decline in 1992 minority interests reflects Sprint's
acquisition of the remaining 19.9 percent minority interest in
Sprint Communications Company L.P. (the Limited Partnership)
effective January 1, 1992.
Sprint's income tax provisions for 1993, 1992 and 1991 resulted
in effective tax rates of 38 percent, 36 percent and 34 percent,
respectively. See Note 4 of "Notes to Consolidated Financial
Statements" for information regarding the differences which cause
the effective income tax rates to vary from the statutory federal
income tax rates. As of December 31, 1993, Sprint has recorded
deferred income tax assets of $316 million related to
postretirement benefits and other accruals, $260 million related
to alternative minimum tax credit carryforwards, and $40 million
(net of a $25 million valuation allowance) related to state
operating loss carryforwards. Sprint's management has determined
that it is more likely than not that these deferred income tax
assets, net of the valuation allowance, will be realized based on
current income tax laws and expectations of future taxable income
stemming from ordinary operations or the reversal of existing
deferred tax liabilities. Uncertainties surrounding income tax
law changes, shifts in operations between state taxing
jurisdictions, and future operating income levels may, however,
affect the ultimate realization of all or some portion of these
deferred income tax assets.
The effects of inflation on Sprint's operations were not
significant during 1993, 1992, or 1991.
Segmental Results of Operations
Long Distance Communications Services
Sprint's long distance division provides domestic and
international voice and data communications services. Rates
charged by the division for its services are subject to different
levels of state and federal regulation, but are generally not
rate-base regulated.
Net operating revenues increased 9 percent in 1993, following a
5 percent increase in 1992. Such increases were generally due to
traffic volume growth of 8 percent and 6 percent, respectively.
Average revenue per minute received from customers was relatively
constant during 1993 but declined 3 percent during 1992,
primarily due to the mix of products among markets and
competitive influences. The increases in net operating revenues
and traffic volumes in both 1993 and 1992 reflect ongoing growth
in the business and international markets, coupled with
rebounding growth in the residential market during 1993. Growth
in the business market in 1993 was also enhanced by the arrival
of "800 portability," whereby customers who wish to change long
distance carriers may now do so while retaining their advertised
"800" numbers. In addition, lower revenue adjustments,
reflecting improvement in the collectibility of customer accounts
receivable, resulted in increased net operating revenues in 1992.
Future rates of growth in both net operating revenues and traffic
volumes may be influenced by both domestic and international
economic conditions and the division's ability to maintain market
share and current price levels in the intensely competitive long
distance marketplace.
Interconnection costs increased $136 million and $118 million
in 1993 and 1992, respectively. International interconnection
costs increased due to increased traffic volumes, partially
offset by price reductions and the conversion of international
traffic from resale arrangements (traffic transported by other
long distance carriers) to less costly direct access
arrangements. Costs of connecting to networks domestically also
increased primarily as a result of traffic volume growth,
partially offset by reductions in interconnection rates paid to
local exchange companies and by reduced costs related to the
transition from switched to special access arrangements.
Interconnection costs as a percentage of net operating revenues
were 44 percent in 1993 as compared to 46 percent in both 1992
and 1991.
Operations expense consists of costs related to operating and
maintaining the long distance network; costs of providing various
services such as operator services, public payphones,
telecommunications services for the hearing impaired, and video
teleconferencing; and costs of data systems sales. Operations
expense increased $98 million in 1993 over 1992, partially due to
a change in accounting whereby circuit activity costs are now
being expensed when incurred (see Note 1 of "Notes to
Consolidated Financial Statements" for additional information).
Exclusive of the effect of this accounting change, operations
expense increased approximately $63 million in 1993 and $43
million in 1992, primarily due to expanded service offerings,
increased traffic volumes and increased salaries and related
benefits.
Selling, general and administrative (SG&A) expense increased
$120 million and $92 million in 1993 and 1992, respectively,
generally as a result of intensified sales and marketing efforts.
During 1993, marketing efforts primarily directed towards "800
portability," The Most calling plan and the recently introduced
"Be there now" campaign resulted in increased advertising and
other marketing expenses, as well as increased commissions and
salaries and related expenses. During 1992, the introduction of
several new calling plans and calling card features also resulted
in increases in such sales and marketing expenses. Despite the
increases in the amount of SG&A expense in 1993 and 1992, such
expenses as a percentage of net operating revenues remained
constant when compared to 1991, at 25 percent.
Depreciation and amortization in 1993 decreased from 1992,
primarily due to the change in accounting for circuit activity
costs, as described above. Depreciation and amortization in 1992
was consistent with the 1991 amount as the increased depreciation
resulting from additions to property, plant and equipment was
substantially offset by a decrease in amortization expense
resulting from the full amortization in June 1991 of certain
intangible assets related to the 1986 formation of the Limited
Partnership.
Local Communications Services
The local division consists principally of Sprint's rate-
regulated, local exchange telephone operations. The following
table summarizes, by major category, the net operating revenues
of the division (in millions):
1993 1992 1991
Net operating revenues
Local service $ 1,624.3 $ 1,507.4 $ 1,436.4
Network access 1,530.4 1,425.8 1,398.5
Toll service 505.3 487.5 487.2
Other 466.0 441.5 431.6
Total $ 4,126.0 $ 3,862.2 $ 3,753.7
As described in Note 9 of "Notes to Consolidated Financial
Statements," certain local telephone operations were divested
during 1992 and 1991. The following comparisons and discussion
exclude the effects of such divested operations.
Net operating revenues increased 7 percent in 1993, following a
5 percent increase in 1992. Increased local service revenues
reflect continued increases in the number of access lines served
and growth in add-on services, such as custom calling features.
The division experienced 4.8 percent growth in access lines
during 1993, compared to 4.2 percent in 1992. Network access
revenues, derived from interexchange long distance carriers' use
of the local network to complete calls, increased during 1993 and
1992 as a result of increased traffic volumes and additional
revenues resulting from the recognition of a portion of the
merger, integration and restructuring costs for regulatory
purposes in certain jurisdictions, partially offset by periodic
reductions in network access rates charged. Toll service
revenues, related to the provision of long distance services
within specified geographical areas and the reselling of
interexchange long distance services, increased 4 percent and 1
percent in 1993 and 1992, respectively. Such increase in 1993
primarily reflects the election of the division's Indiana
operations to serve as the primary intralata toll carrier within
its serving area, rather than providing network access to another
carrier. Other revenues increased in 1993 and 1992 generally due
to higher equipment sales.
Plant operations expense includes network operations costs;
repair and maintenance costs of property, plant and equipment;
and other expenses associated with the cost of providing
services. The 4 percent and 2 percent increases in such costs in
1993 and 1992, respectively, were primarily related to increases
in the costs of providing services resulting from access line
growth.
Depreciation and amortization expense increased $14 million in
1993, following a $15 million increase in 1992. Exclusive of the
effects of depreciation rate changes, special short-term
amortizations and nonrecurring charges approved by state
regulatory commissions, such increases were $17 million and $16
million, respectively, generally due to plant additions.
Other operating expense increased $99 million and $122 million
in 1993 and 1992, respectively. Such increases resulted
primarily from higher sales and marketing expenses to promote new
products and services; increases in systems development costs
incurred to enhance the efficiency and capabilities of the
division's billing processes; and increases in the cost of
equipment sales.
The increases in both plant operations and other operating
expenses also reflect the impact of the increased postretirement
benefits cost of approximately $38 million being recognized in
1993 as a result of the adoption of SFAS No. 106.
Consistent with most local exchange carriers, the division
accounts for the economic effects of regulation pursuant to SFAS
No. 71, "Accounting for the Effects of Certain Types of
Regulation." The application of SFAS No. 71 requires the
accounting recognition of the rate actions of regulators where
appropriate, including the recognition of depreciation and
amortization based on estimated useful lives prescribed by
regulatory commissions rather than those which might be utilized
by non-regulated enterprises. Sprint's management believes that
the division's operations meet the criteria for the continued
application of the provisions of SFAS No. 71. With increasing
competition and the changing nature of regulation in the
telecommunications industry, the ongoing applicability of SFAS
No. 71 must, however, be constantly monitored and evaluated.
Should the division no longer qualify for the application of the
provisions of SFAS No. 71 at some future date, the accounting
impact could result in the recognition of a material,
extraordinary, noncash charge.
Cellular and Wireless Communications Services
Sprint's cellular and wireless division consists of wholly-
owned and majority-owned interests in 42 metropolitan service
area (MSA) markets and 46 rural service area (RSA) markets. The
company also owns minority interests in 31 MSA and 33 RSA
markets. Equity in the earnings and losses of these minority
investments is included in other expense, net in the consolidated
statements of income.
The increases in net operating revenues during 1993 and 1992
resulted principally from the growth in customer lines served,
which increased 67 percent in 1993 and 52 percent in 1992. The
effects of growth in customer lines served was partially offset
by a decline in service revenue per customer line served,
reflecting an industry-wide trend that has occurred as a result
of increased general consumer market penetration.
Costs of services and products declined to 33 percent of net
operating revenue in 1993 from 37 percent in 1992 and 39 percent
in 1991, generally reflecting economies gained from serving
additional customer lines. The increases in selling, general and
administrative expense for 1993 and 1992 resulted principally
from increased commissions and customer service expenses, as well
as increased advertising costs related to the growth in customer
lines. Despite the increases in the amount of SG&A expense, such
costs as a percentage of net operating revenues declined to 45
percent in 1993 from 48 percent in 1992 and 47 percent in 1991.
Such improvement resulted primarily from an overall reduction in
the unit cost of acquiring new customers and additional economies
realized from providing service and support to a larger customer
base. Depreciation and amortization increased during both 1993
and 1992 as additional investment in property, plant and
equipment was required to meet the growth in customer lines.
Product Distribution and Directory Publishing
Sprint's product distribution and directory publishing
businesses generated operating income of $64 million, $66 million
and $62 million in 1993, 1992 and 1991, respectively. North
Supply, a wholesale distributor of telecommunications products,
had 1993 net operating revenues of $677 million, compared to $594
million in 1992 and $569 million in 1991. The increases
primarily reflect additional nonaffiliated contracts and
increased sales to the local division, partially as a result of
sales during 1993 to the merged Centel telephone operations.
Sprint Publishing & Advertising, a publisher and marketer of
telephone directories, had net operating revenues of $268 million
in 1993, compared with 1992 and 1991 net operating revenues of
$257 million and $245 million, respectively.
Liquidity and Capital Resources
Cash Flows - Operating Activities
Cash flows from operating activities, which are Sprint's
primary source of liquidity, were $2.14 billion, $2.26 billion
and $1.82 billion in 1993, 1992 and 1991, respectively. The 1992
operating cash flows include proceeds of $300 million from the
sale of accounts receivable within the long distance division.
Excluding these proceeds, the improvement in 1993 operating cash
flows reflects better operating results, partially offset by
expenditures related to merger, integration and restructuring
actions of $155 million.
Cash Flows - Investing Activities
Sprint's investing activities used cash of $1.57 billion, $1.58
billion and $1.08 billion in 1993, 1992 and 1991, respectively.
Capital expenditures, which represent Sprint's most significant
investing activity, were $1.59 billion, $1.47 billion and $1.52
billion in 1993, 1992 and 1991, respectively (see "Business
Segment Information" for the amounts incurred by each division).
Long distance capital expenditures were incurred each year
primarily to increase the network capacity and to enhance network
capabilities for providing new products and services. Capital
expenditures for the local division were made to accommodate
access line growth, to continue the conversion to digital
technologies, and to expand the division's capabilities for
providing enhanced telecommunications services. The increases in
1993 and 1992 capital expenditures for the cellular and wireless
division reflect the significant increases in the number of
customer lines served during such years.
Investing activities in 1992 also include $250 million paid in
connection with Sprint's $530 million acquisition of the
remaining 19.9 percent interest in the Limited Partnership and
proceeds of $114 million from the sale of certain local telephone
properties. Investing activities for 1991 include proceeds of
$468 million from the divestitures of certain local telephone,
cellular and other properties.
Cash Flows - Financing Activities
Sprint's financing activities used cash of $620 million, $681
million and $755 million in 1993, 1992 and 1991, respectively.
Improved operating cash flows during each year, together with
proceeds from the sale of additional accounts receivable in 1992
and from the various divestitures in 1992 and 1991, allowed
Sprint to fund capital expenditures and dividends internally and
to reduce total debt outstanding during each year. In addition,
the $280 million note issued to the seller in connection with the
acquisition of the remaining interest in the Limited Partnership
was paid in 1992.
During 1993 and 1992, a significant level of debt refinancing
occurred in order to take advantage of lower interest rates.
Accordingly, a majority of the proceeds from long-term borrowings
in 1993 was used to finance the redemption prior to scheduled
maturities of $1.24 billion of debt. During 1992, Sprint
refinanced $720 million of long-term debt and borrowed $250
million to finance the payment related to the acquisition of the
remaining 19.9 percent interest in the Limited Partnership.
Sprint paid dividends to common and preferred shareholders of
$347 million, $300 million and $296 million in 1993, 1992 and
1991, respectively. Sprint's indicated annual dividend rate on
common stock is currently $1.00 per share.
Financial Position, Liquidity and Capital Requirements
As of December 31, 1993, Sprint's total capitalization
aggregated $9.05 billion, consisting of long-term debt (including
current maturities), redeemable preferred stock, and common stock
and other shareholders' equity. Long-term debt (including
current maturities) and short-term borrowings comprised 55
percent of total capitalization as of December 31, 1993, compared
to 58 percent at year-end 1992 (as adjusted in both years on a
proforma basis for the effects of changes in accounting
principles).
During 1994, Sprint anticipates funding estimated capital
expenditures of $1.8 billion and dividends with cash flows from
operating activities. Notes payable and commercial paper
outstanding as of December 31, 1993 (classified as long-term
debt) aggregated $756 million. During 1994, this entire balance
will be replaced by the issuance of long-term debt or will
continue to be refinanced under existing long-term credit
facilities. Sprint expects its external cash requirements for
1994 to be approximately $800 million to $900 million, which is
generally required to repay scheduled long-term debt maturities
and reduce notes payable and commercial paper outstanding. A
portion of such external cash requirements is expected to be
generated from issuances of common stock through employee benefit
plans and from the sale of certain investments. The method of
financing the remaining external cash requirements will depend
upon prevailing market conditions during the year. Sprint may
also undertake additional debt refinancings during 1994 in order
to take advantage of favorable interest rates.
At year-end 1993, Sprint had the ability to borrow $803 million
under a revolving credit agreement with a syndicate of domestic
and international banks and other bank commitments. Other
available financing sources include a Medium-Term Note program,
under which Sprint may offer for sale up to $175 million of
unsecured senior debt securities. Additionally, pursuant to
shelf registration statements filed with the Securities and
Exchange Commission, up to $1.2 billion of debt securities may be
offered for sale.
The aggregate amount of additional borrowings which can be
incurred is ultimately limited by certain covenants contained in
existing debt agreements. As of December 31, 1993, Sprint had
borrowing capacity of approximately $2.8 billion under the most
restrictive of its debt covenants.
MANAGEMENT REPORT
The management of Sprint Corporation has the responsibility for
the integrity and objectivity of the information contained in
this Annual Report. Management is responsible for the consistency of
reporting such information and for ensuring that generally
accepted accounting principles are used.
In discharging this responsibility, management maintains a
comprehensive system of internal controls and supports an
extensive program of internal audits, has made organizational
arrangements providing appropriate divisions of responsibility
and has established communication programs aimed at assuring that
its policies, procedures and codes of conduct are understood and
practiced by its employees.
The consolidated financial statements included in this Annual
Report have been audited by Ernst & Young, independent auditors.
Their audit was conducted in accordance with generally accepted
auditing standards and their report is included herein.
The responsibility of the Board of Directors for these
financial statements is pursued primarily through its Audit
Committee. The Audit Committee, composed entirely of directors
who are not officers or employees of Sprint, meets periodically
with the internal auditors and independent auditors, both with
and without management present, to assure that their respective
responsibilities are being fulfilled. The internal and
independent auditors have full access to the Audit Committee to
discuss auditing and financial reporting matters.
/s/ W. T. Esrey
William T. Esrey
Chairman and Chief Executive Officer
/s/ Arthur B. Krause
Arthur B. Krause
Executive Vice President - Chief Financial Officer
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Sprint Corporation
We have audited the accompanying consolidated balance sheets of
Sprint Corporation (Sprint) as of December 31, 1993 and 1992, and
the related consolidated statements of income, cash flows, and
common stock and other shareholders' equity for each of the three
years in the period ended December 31, 1993. Our audits also
included the financial statement schedules listed in the Index
To Financial Statements, Financial Statement Schedules and
Supplementary Data. These financial statements and schedules are
the responsibility of the management of Sprint. Our responsibility
is to express an opinion on these financial statements and
schedules based on our audits. We did not audit the financial
statements or schedules of Centel Corporation, a wholly-owned
subsidiary, as of December 31, 1992, or for each of the two years
in the period ended December 31, 1992, which statements reflect
total assets constituting 25% in 1992, and net income constituting
approximately 9% in 1992 and 29% in 1991 of the related consolidated
financial statement totals. Those statements and schedules were
audited by other auditors whose report has been furnished to us,
and our opinion, insofar as it relates to data included for Centel
Corporation, is based solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits and the report of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audits and the report of other
auditors, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Sprint Corporation at December 31, 1993 and 1992, and
the consolidated results of its operations and its cash flows for
each of the three years in the period ended December 31, 1993, in
conformity with generally accepted accounting principles. Also
in our opinion, the related financial statement schedules, when
considered in relation to the basic financial statements taken as
a whole, present fairly in all material respects the information
set forth therein.
As discussed in Note 1 to the consolidated financial
statements, Sprint changed its method of accounting for
postretirement benefits, postemployment benefits and circuit
activity costs in 1993 and income taxes in 1992.
ERNST & YOUNG
Kansas City, Missouri
February 2, 1994
REPORT OF INDEPENDENT AUDITORS
To the Shareowners of Centel Corporation:
We have audited the consolidated balance sheet of CENTEL
CORPORATION (a Kansas corporation) AND SUBSIDIARIES as of
December 31, 1992, and the related consolidated statements of
income, common shareowners' investment and cash flows for each of
the two years in the period ended December 31, 1992, prior to the
pooling of interests with Sprint Corporation (and, therefore, are
not presented herein) described in Note 2 to the consolidated
financial statements of Sprint Corporation for the year ended
December 31, 1993. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Centel Corporation and Subsidiaries as of December 31, 1992,
and the results of their operations and their cash flows for each
of the two years in the period ended December 31, 1992, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. In connection with
our audits, certain auditing procedures were applied to the following
schedules which are required for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the
basic financial statements. Such schedules are not included herein:
Schedule I - Marketable Securities
Schedule V - Consolidated Plant, Property and Equipment
Schedule VI - Consolidated Accumulated Depreciation
Schedule VIII - Consolidated Allowance for Doubtful Accounts
Schedule IX - Consolidated Short-Term Borrowings
Schedule X - Consolidated Supplementary Income Statement
Information
In our opinion, the information contained in these schedules fairly states,
in all material respects, the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Chicago, Illinois
February 3, 1993
BUSINESS SEGMENT INFORMATION Sprint Corporation
As of or for the Years Ended
December 31,
1993 1992 1991
(In Millions)
Long Distance Communications Services <1>
Net operating revenues $ 6,139.2 $ 5,658.2 $ 5,387.6
Operating expenses
Interconnection 2,710.7 2,574.9 2,457.0
Operations 857.7 759.8 717.1
Selling, general and administrative 1,546.4 1,426.3 1,334.3
Depreciation and amortization 523.5 586.6 584.4
Total operating expenses <2>, <3> 5,638.3 5,347.6 5,092.8
Operating income $ 500.9 $ 310.6 $ 294.8
Capital expenditures $ 529.4 $ 468.1 $ 580.2
Identifiable assets as of December 31 $ 4,193.1 $ 4,232.0 $ 4,543.5
Local Communications Services <1>
Net operating revenues $ 4,126.0 $ 3,862.2 $ 3,753.7
Operating expenses
Plant operations 1,206.7 1,165.6 1,160.9
Depreciation and amortization 733.0 720.0 716.7
Other 1,232.5 1,137.0 1,036.5
Total operating expenses <2>, <4> 3,172.2 3,022.6 2,914.1
Operating income $ 953.8 $ 839.6 $ 839.6
Capital expenditures $ 845.3 $ 839.4 $ 802.4
Identifiable assets as of December 31 $ 7,604.0 $ 7,242.2 $ 7,099.6
Cellular and Wireless Communications Services <1>
Net operating revenues $ 464.0 $ 322.2 $ 242.1
Operating expenses
Cost of services and products 154.9 118.3 95.2
Selling, general and administrative 209.9 154.6 114.5
Depreciation and amortization 75.0 52.1 43.2
Total operating expenses <2> 439.8 325.0 252.9
Operating income (loss) $ 24.2 $ (2.8) $ (10.8)
Capital expenditures $ 164.9 $ 123.8 $ 91.8
Identifiable assets as of December 31 $ 1,504.3 $ 1,489.4 $ 1,418.1
Product Distribution, Directory Publishing and Other <1>
Net operating revenues $ 945.2 $ 862.9 $ 826.0
Operating income <2> $ 64.2 $ 66.0 $ 62.0
Depreciation and amortization $ 27.2 $ 32.8 $ 25.2
Capital expenditures $ 55.1 $ 34.9 $ 48.8
Identifiable assets as of December 31 $ 847.5 $ 636.0 $ 868.6
<1>Include net operating revenues and operating expenses
eliminated in consolidation of $306.6 million, $285.2 million
and $276.1 million for the years ended December 31, 1993,
1992 and 1991, respectively.
<2>Exclude a nonrecurring charge of $259.0 million in 1993
related to the transaction costs associated with the merger
with Centel and the estimated expenses of integrating and
restructuring the operations of the two companies (see Note 2
of "Notes to Consolidated Financial Statements" for
additional information). Such charge was allocable as
follows: Long Distance-$12.4 million; Local-$190.1 million;
Cellular and Wireless-$3.2 million; Product Distribution and
Directory Publishing-$2.5 million; and Other-$50.8 million.
<3>Exclude a nonrecurring charge of $33.5 million in 1993
related to the realignment and restructuring of the long
distance division (see Note 9 of "Notes to Consolidated
Financial Statements" for additional information).
<4>Includes increased postretirement benefits cost of
approximately $38 million in 1993 related to the adoption of
SFAS No. 106. Such cost for the other divisions was not
significant.
CONSOLIDATED STATEMENTS OF INCOME Sprint Corporation
For the Years Ended
December 31,
1993 1992 1991
(In Millions, Except Per
Share Data)
Net Operating Revenues $11,367.8 $10,420.3 $ 9,933.3
Operating Expenses
Costs of services and products 5,736.1 5,325.5 5,091.0
Selling, general and administrative 2,729.9 2,489.9 2,287.2
Depreciation and amortization 1,358.7 1,391.5 1,369.5
Merger, integration and restructuring costs 292.5
Total operating expenses 10,117.2 9,206.9 8,747.7
Operating Income 1,250.6 1,213.4 1,185.6
Gain on divestiture of telephone
and cellular properties 81.1 113.9
Interest expense (452.4) (511.1) (548.3)
Other expense, net (22.3) (5.0) (35.6)
Income from continuing operations
before income taxes 775.9 778.4 715.6
Income tax provision (295.3) (282.3) (242.9)
Income From Continuing Operations 480.6 496.1 472.7
Discontinued operations, net (12.3) 49.4
Extraordinary losses on early
extinguishments of debt, net (29.2) (16.0) (1.9)
Cumulative effect of changes in
accounting principles, net (384.2) 22.7
Net income 54.9 502.8 520.2
Preferred stock dividends (2.8) (3.5) (4.1)
Earnings applicable to common stock $ 52.1 $ 499.3 $ 516.1
Earnings Per Common Share
Continuing operations $ 1.39 $ 1.46 $ 1.41
Discontinued operations (0.04) 0.15
Extraordinary item (0.08) (0.05) (0.01)
Cumulative effect of changes in
accounting principles (1.12) 0.07
Total $ 0.15 $ 1.48 $ 1.55
Weighted average number of common shares 343.7 337.2 333.5
See accompanying notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEETS Sprint Corporation
As of December 31,
1993 1992
Assets (In Millions)
Current assets
Cash and equivalents $ 76.8 $ 128.8
Accounts receivable, net of allowance
for doubtful accounts of $121.9 million
($118.0 million in 1992) 1,230.6 1,044.8
Investment in common stock 130.2
Inventories 182.3 172.1
Deferred income taxes 81.1 46.5
Prepaid expenses 120.7 102.5
Other 156.2 169.3
Total current assets 1,977.9 1,664.0
Investments in common stocks 173.1 209.0
Property, plant and equipment
Long distance communications services 5,492.7 5,355.9
Local communications services 11,226.4 10,732.2
Cellular and wireless communications services 569.6 409.9
Other 433.7 405.2
17,722.4 16,903.2
Less accumulated depreciation 7,407.6 6,683.3
10,314.8 10,219.9
Cellular minority partnership investments 287.5 271.2
Excess of cost over net assets acquired 736.8 765.3
Other assets 658.8 470.2
$14,148.9 $13,599.6
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt $ 523.4 $ 386.6
Short-term borrowings 362.3
Accounts payable 925.4 755.4
Accrued interconnection costs 487.5 464.3
Accrued taxes 307.2 291.9
Other 825.1 716.8
Total current liabilities 3,068.6 2,977.3
Long-term debt 4,571.0 4,693.8
Deferred credits and other liabilities
Deferred income taxes and investment tax
credits 1,182.9 1,308.3
Postretirement and other benefit obligations 793.1 69.0
Other 576.4 539.4
2,552.4 1,916.7
Redeemable preferred stock 38.6 40.2
Common stock and other shareholders' equity
Common stock, par value $2.50 per share,
authorized-500.0 million shares 858.5 847.1
Capital in excess of par or stated value 827.4 717.5
Retained earnings 2,184.2 2,451.7
Other 48.2 (44.7)
3,918.3 3,971.6
$14,148.9 $13,599.6
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS Sprint Corporation
For the Years Ended December 31,
1993 1992 1991
(In Millions)
Operating Activities
Net income $ 54.9 $ 502.8 $ 520.2
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization 1,358.7 1,391.5 1,369.5
Gain on divestiture of telephone
and cellular properties (81.1) (113.9)
Discontinued operations (5.9) (20.6) (43.9)
Extraordinary losses on early
extinguishments of debt 49.5 25.1 3.1
Cumulative effect of changes in
accounting principles 384.2 (22.7)
Deferred income taxes and investment
tax credits (34.5) 3.0 (34.7)
Changes in operating assets and liabilities
Accounts receivable, net (185.8) 257.8 42.4
Inventories and other current assets (42.7) (13.9) 52.3
Accounts payable and accrued
interconnection costs 196.4 165.8 (130.1)
Accrued expenses and other
current liabilities 160.5 (39.0) 98.5
Noncurrent assets and liabilities, net 135.1 152.3 7.0
Other, net 66.0 (59.5) 50.2
Net cash provided by operating
activities 2,136.4 2,261.5 1,820.6
Investing Activities
Capital expenditures (1,594.7) (1,466.2) (1,523.2)
Acquisition of Limited Partnership
minority interest (250.0)
Proceeds from divestiture of
telephone and cellular properties 114.0 148.3
Proceeds from sale of discontinued
operations 320.0
Other, net 26.3 24.3 (24.5)
Net cash used by investing activities (1,568.4) (1,577.9) (1,079.4)
Financing Activities
Proceeds from long-term debt 840.4 951.2 645.0
Retirements of long-term debt (1,589.0) (1,257.4) (744.3)
Net increase (decrease) in notes
payable and commercial paper 393.5 147.0 (468.3)
Payment of note payable to
minority partner (280.0)
Proceeds from common stock issued 70.8 51.6 54.1
Proceeds from employees stock purchase
installments, net 28.3 13.2 13.9
Dividends paid (347.1) (300.1) (295.8)
Other, net (16.9) (6.2) 40.7
Net cash used by financing activities (620.0) (680.7) (754.7)
Increase (Decrease) in Cash and
Equivalents (52.0) 2.9 (13.5)
Cash and Equivalents at Beginning of Year 128.8 125.9 139.4
Cash and Equivalents at End of Year $ 76.8 $ 128.8 $ 125.9
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF COMMON STOCK Sprint Corporation
AND OTHER SHAREHOLDERS'EQUITY
For the Years Ended December 31, 1993, 1992 and 1991
Capital in
Excess of
Par or
Common Stated Retained
Stock Value Earnings Other Total
(In Millions)
Balance as of January 1,
1991 (330.6 million
shares issued and
outstanding) $ 826.4 $ 554.0 $2,021.4 $ (48.3) $3,353.5
Net income 520.2 520.2
Common stock dividends (291.7) (291.7)
Preferred stock dividends (4.1) (4.1)
Employee stock purchase
and other installments
received, net 16.0 16.0
Common stock issued 10.0 85.6 (24.8) 70.8
Other, net 0.5 0.7 2.3 3.7 7.2
Balance as of December
31, 1991 (334.8 million
shares issued and
outstanding) 836.9 640.3 2,248.1 (53.4) 3,671.9
Net income 502.8 502.8
Common stock dividends (296.6) (296.6)
Preferred stock dividends (3.5) (3.5)
Employee stock purchase
and other installments
received, net 15.5 15.5
Common stock issued 9.9 73.7 (6.5) 77.1
Other, net 0.3 3.5 0.9 (0.3) 4.4
Balance as of December
31, 1992 (338.9 million
shares issued and
outstanding) 847.1 717.5 2,451.7 (44.7) 3,971.6
Net income 54.9 54.9
Common stock dividends (324.5) (324.5)
Preferred stock dividends (2.8) (2.8)
Employee stock purchase
and other installments
received, net 30.8 30.8
Common stock issued 11.0 98.4 (2.4) 107.0
Unrealized holding gains
on investments in common
stocks, net 64.8 64.8
Other, net 0.4 11.5 4.9 (0.3) 16.5
Balance as of December
31, 1993 (343.4 million
shares issued and
outstanding) $ 858.5 $ 827.4 $2,184.2 $ 48.2 $3,918.3
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Sprint Corporation
1. Accounting Policies
Basis of Consolidation
The accompanying consolidated financial statements include the
accounts of Sprint Corporation and its wholly-owned and majority-
owned subsidiaries (Sprint), including Centel Corporation
(Centel) and Sprint Communications Company L.P. (the Limited
Partnership). Investments in less than 50 percent-owned cellular
communications partnerships are accounted for using the equity
method.
During 1991, GTE Corporation (GTE) owned a 19.9 percent
interest in the Limited Partnership. Effective January 1, 1992,
Sprint acquired GTE's interest in exchange for a $250 million
cash payment and a $280 million note which was paid in June 1992.
In accordance with industry practice, revenues and related net
income of non-regulated operations attributable to transactions
with Sprint's rate-regulated telephone companies have not been
eliminated in the accompanying consolidated financial statements.
Intercompany revenues of such entities amounted to $225 million,
$194 million and $164 million in 1993, 1992 and 1991,
respectively.
All other significant intercompany transactions have been
eliminated.
Classification of Operations
The long distance communications services division provides
domestic voice and data communications services across certain
specified geographical boundaries, as well as international long
distance communications services. Rates charged for such
services sold to the public are subject to different levels of
state and federal regulation, but are generally not subject to
rate-base regulation.
The local communications services division consists principally
of the operations of Sprint's rate-regulated telephone companies.
These operations provide local exchange services, access by
telephone customers and other carriers to local exchange
facilities and long distance services within specified
geographical areas.
The cellular and wireless communications services division
consists of wholly-owned and majority-owned interests in
partnerships and corporations operating cellular and wireless
communications properties in various metropolitan and rural
service area markets.
The product distribution and directory publishing businesses
include the wholesale distribution of telecommunications products
and the publishing and marketing of white and yellow page
telephone directories.
Revenue Recognition
Operating revenues for the long distance, local and
cellular/wireless communications services divisions are
recognized as communications services are rendered. Operating
revenues for the long distance communications services division
are recorded net of an estimate for uncollectible accounts.
Operating revenues for Sprint's product distribution business
are recognized upon delivery of products to customers.
Regulated Operations
Sprint's rate-regulated telephone companies account for the
economic effects of regulation pursuant to Statement of Financial
Accounting Standards (SFAS) No. 71, "Accounting for the Effects
of Certain Types of Regulation," which requires the accounting
recognition of the rate actions of regulators where appropriate.
Such actions can provide reasonable assurance of the existence of
an asset, reduce or eliminate the value of an asset, or impose a
liability on a regulated enterprise.
Cash and Equivalents
Cash equivalents generally include highly liquid investments
with original maturities of three months or less and are stated
at cost, which approximates market value.
As of December 31, 1993 and 1992, outstanding checks in excess
of cash balances of $166 million and $151 million, respectively,
are included in accounts payable.
Investments in Common Stocks
Effective December 31, 1993, Sprint changed its method of
accounting for its portfolio of marketable equity securities by
adopting SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." Accordingly, such investments in
common stocks are classified as available for sale and reported
at fair value (estimated based on quoted market prices) as of
December 31, 1993 and at cost as of December 31, 1992. As of
December 31, 1993, the cost of such investments is $202 million,
with the gross unrealized holding gains of $101 million reflected
as an addition to other shareholders' equity, net of related
income taxes. As of December 31, 1992, the market value of such
investments was $278 million.
Inventories
Inventories, consisting principally of those related to
Sprint's product distribution business, are stated at the lower
of cost (principally first-in, first-out method) or market.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. Generally,
ordinary asset retirements and disposals are charged against
accumulated depreciation with no gain or loss recognized.
Repairs and maintenance costs are expensed as incurred.
Effective January 1, 1993, Sprint's long distance
communications services division changed its method of accounting
for certain costs related to connecting new customers to its
network. The change was made to conform Sprint's accounting to
the predominant industry practice for such costs. Under the new
method, such costs (which were previously capitalized) are being
expensed when incurred. The resulting nonrecurring, noncash
charge of $32 million ($0.09 per share), net of related income
tax benefits, is reflected in the 1993 consolidated statement of
income as a cumulative effect of change in accounting principle.
The proforma impact of retroactive application of the change
would not have been material to net income or earnings per share
for 1992 or 1991, and the impact of the change on Sprint's 1993
operating expenses was not significant.
Depreciation
The cost of property, plant and equipment is depreciated
generally on a straight-line basis over the estimated useful
lives (such lives related to regulated property, plant and
equipment are those prescribed by regulatory commissions).
Depreciation rate changes, special short-term amortizations and
nonrecurring charges approved by regulatory commissions for the
rate-regulated telephone companies resulted in additional
depreciation totaling $7 million, $46 million and $49 million in
1993, 1992 and 1991, respectively. After the related effects on
revenues and income taxes, these items reduced income from
continuing operations for 1993, 1992 and 1991 by approximately $4
million, $24 million and $25 million, respectively.
Cellular Minority Partnership Investments
Cellular minority partnership investments include the excess of
the purchase price over the underlying book value of cellular
communications partnerships of $203 million and $209 million as
of December 31, 1993 and 1992, respectively. Such excess is
being amortized on a straight-line basis over 40 years;
accumulated amortization aggregated $29 million and $23 million
as of December 31, 1993 and 1992, respectively.
Excess of Cost over Net Assets Acquired
The excess of the purchase price over the fair value of net
assets acquired, principally related to cellular communications
services properties, is being amortized on a straight-line basis
over 40 years. Accumulated amortization aggregated $112 million
and $88 million as of December 31, 1993 and 1992, respectively.
Postretirement Benefits
Effective January 1, 1993, Sprint changed or modified its
method of accounting for certain postretirement benefits by
adopting SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." Sprint provides postretirement
benefits (principally health care benefits) to certain retirees.
SFAS No. 106 requires accrual of the expected cost of providing
postretirement benefits to employees and their dependents or
beneficiaries during the years employees earn the benefits.
During 1992 and 1991, the cost of providing postretirement
benefits to Sprint's retirees was expensed as such costs were
paid, while for Centel's employees and retirees, an accrual basis
approach was utilized to recognize such costs.
Upon adoption of the new standard, Sprint elected to
immediately recognize its previously unrecorded obligation for
postretirement benefits already earned by current retirees and
employees (the transition obligation), a substantial portion of
which related to its rate-regulated telephone companies.
Pursuant to SFAS No. 71, regulatory assets associated with the
recognition of the transition obligation were recorded in
jurisdictions where the regulators have issued orders specific to
Sprint permitting recognition of net postretirement benefits
costs for ratemaking purposes, and providing for recovery of the
transition obligation over a period of no longer than 20 years.
As of December 31, 1993, such regulatory assets aggregated $83
million. In all other jurisdictions, regulatory assets
associated with the recognition of the transition obligation were
not recorded due to the uncertainties as to the timing and extent
of recovery.
The resulting nonrecurring, noncash charge of $341 million
($1.00 per share), net of related income tax benefits, is
reflected in the 1993 consolidated statement of income as a
cumulative effect of change in accounting principle. Net
postretirement benefits cost for 1993 increased approximately $50
million as a result of adopting SFAS No. 106.
Postemployment Benefits
Effective January 1, 1993, Sprint adopted SFAS No. 112,
"Employers' Accounting for Postemployment Benefits." Upon
adoption, Sprint recognized certain previously unrecorded
obligations for benefits being provided to former or inactive
employees and their dependents, after employment but before
retirement. Such postemployment benefits offered by Sprint
include severance, disability and workers compensation benefits,
including the continuation of other benefits such as health care
and life insurance coverage.
The resulting nonrecurring, noncash charge of $11 million
($0.03 per share), net of related income tax benefits, is
reflected in the 1993 consolidated statement of income as a
cumulative effect of change in accounting principle. Adoption of
SFAS No. 112 had no significant impact on operating expenses in
1993.
Income Taxes
Effective January 1, 1992, Sprint changed its method of
accounting for income taxes by adopting SFAS No. 109, "Accounting
for Income Taxes." SFAS No. 109 requires an asset and liability
approach to accounting for income taxes and establishes less
restrictive criteria for recognizing deferred income tax assets.
Accordingly, Sprint adjusted its existing deferred income tax
assets and liabilities to reflect current statutory income tax
rates and previously unrecognized tax benefits related to federal
and certain state net operating loss carryforwards. To the
extent reductions of the rate-regulated telephone companies'
deferred income tax liabilities will accrue to the benefit of its
customers, such reductions were recorded as regulatory
liabilities. The remaining net change in Sprint's deferred
income tax assets and liabilities increased 1992 net income by
$23 million ($0.07 per share) and is reflected in the
consolidated statement of income as a cumulative effect of change
in accounting principle. As allowed under SFAS No. 109, prior
years' consolidated financial statements were not restated.
During 1991, in accordance with Accounting Principles Board
Opinion (APB) No. 11, deferred income taxes were provided for all
differences in timing of reporting income and expenses for
financial statement and income tax purposes, except for rate-
regulated telephone companies' items that were not allowable by
various regulatory commissions as expenses for rate-making
purposes.
Investment tax credits related to regulated telephone property,
plant and equipment have been deferred and are being amortized
over the estimated useful lives of the related assets.
Interest Charged to Construction
Regulatory commissions allow the rate-regulated telephone
companies to capitalize an allowance for funds expended during
construction. Amounts capitalized will be recovered over the
service lives of the respective assets constructed as the
resulting higher depreciation is recovered through increased
revenues. Interest costs associated with the construction of
capital assets for Sprint's other operations are capitalized in
accordance with SFAS No. 34, "Capitalization of Interest Costs."
Total interest amounts capitalized during 1993, 1992 and 1991,
including an allowance for funds expended during construction,
totaled $8 million, $11 million and $15 million, respectively.
Earnings Per Share
Earnings per common share amounts are based on the weighted
average number of shares both outstanding and issuable assuming
exercise of all dilutive options, as applicable.
Reclassifications
Certain amounts in the accompanying consolidated financial
statements for 1992 and 1991 have been reclassified to conform to
the presentation of amounts in the 1993 consolidated financial
statements. Such reclassifications had no effect on the results
of operations.
2. Sprint / Centel Merger
Effective March 9, 1993, Sprint consummated its merger with
Centel, a telecommunications company with local exchange and
cellular/wireless communications services operations. Pursuant
to the Agreement and Plan of Merger dated May 27, 1992, Sprint
issued 1.37 shares of its common stock in exchange for each
outstanding share of Centel common stock, or approximately 119
million shares. The transaction costs associated with the merger
(consisting primarily of investment banking and legal fees) and
the estimated expenses of integrating and restructuring the
operations of the two companies (consisting primarily of employee
severance and relocation expenses and costs of eliminating
duplicative facilities) resulted in nonrecurring charges of $259
million, which reduced 1993 income from continuing operations by
$172 million ($0.50 per share).
The merger has been accounted for as a pooling of interests.
Accordingly, the accompanying consolidated financial statements
have been retroactively restated for all periods presented to
include the results of operations, financial position and cash
flows of Centel. In addition, the accompanying consolidated
financial statements reflect the elimination of significant,
recurring intercompany transactions and certain adjustments to
conform the accounting policies of the two companies.
Operating results of the separate companies for periods prior
to the merger are as follows (in millions):
1992 1991
Net operating revenues
Sprint $ 9,230.4 $ 8,779.7
Centel 1,191.4 1,180.5
Eliminations and reclassifications (1.5) (26.9)
Total $ 10,420.3 $ 9,933.3
Income from continuing operations
Sprint $ 427.2 $ 367.5
Centel 83.8 112.3
Accounting conformity adjustments (14.9) (7.1)
Total 496.1 472.7
Discontinued operations, net 49.4
Extraordinary losses on early extinguishments
of debt, net (1992: Sprint - $6.5 million,
Centel - $9.5 million; 1991:
Centel - $1.9 million) (16.0) (1.9)
Cumulative effect of change in
accounting for income taxes 22.7
Net income (1992: Sprint - $457.1 million,
Centel - $45.7 million; 1991:
Sprint - $367.5 million,
Centel - $152.7 million) $ 502.8 $ 520.2
3. Employee Benefit Plans
Defined Benefit Pension Plan
Substantially all Sprint employees are covered by a
noncontributory defined benefit pension plan. For participants
of the plan represented by collective bargaining units, benefits
are based upon schedules of defined amounts as negotiated by the
respective parties. For participants not covered by collective
bargaining agreements, the plan provides pension benefits based
upon years of service and participants' compensation.
Sprint's policy is to make contributions to the plan each year
equal to an actuarially determined amount consistent with
applicable federal tax regulations. The funding objective is to
accumulate funds at a relatively stable rate over the
participants' working lives so that benefits are fully funded at
retirement. As of December 31, 1993, the plan's assets consisted
principally of investments in corporate equity securities and
U.S. government and corporate debt securities.
The components of the net pension credits and related weighted
average assumptions are as follows (in millions):
1993 1992 1991
Service cost -- benefits earned
during the period $ 58.2 $ 50.8 $ 47.8
Interest cost on projected benefit
obligation 103.9 96.1 87.2
Actual return on plan assets (241.2) (89.5) (381.7)
Net amortization and deferral 62.5 (64.7) 231.4
Net pension credit $ (16.6) $ (7.3) $ (15.3)
Discount rate 8.0% 8.4% 8.6%
Expected long-term rate of return
on plan assets 9.5% 8.5% 8.5%
Anticipated composite rate of
future increases in compensation 5.5% 6.2% 7.3%
In addition, Sprint recognized pension curtailment losses of $3
million in 1993 as a result of integration and restructuring
actions (see Notes 2 and 9).
The funded status and amounts recognized in the consolidated
balance sheets for the plan, as of December 31, are as follows
(in millions):
1993 1992
Actuarial present value of benefit
obligations
Vested benefit obligation $ (1,277.0) $ (1,043.6)
Accumulated benefit obligation $ (1,462.7) $ (1,183.2)
Projected benefit obligation $ (1,582.9) $ (1,321.2)
Plan assets at fair value 2,029.0 1,862.4
Plan assets in excess of the projected
benefit obligation 446.1 541.2
Unrecognized net gains (197.3) (215.1)
Unrecognized prior service cost 88.1 23.0
Unamortized portion of transition asset (221.9) (247.3)
Prepaid pension cost $ 115.0 $ 101.8
The projected benefit obligations as of December 31, 1993 and
1992 were determined using discount rates of 7.5 percent and 8.0
percent, respectively, and anticipated composite rates of future
increases in compensation of 4.5 percent and 5.5 percent,
respectively.
Defined Contribution Plans
Sprint sponsors defined contribution employee savings plans
covering substantially all employees. Participants may
contribute portions of their compensation to the plans.
Contributions of participants represented by collective
bargaining units are matched by Sprint based upon defined amounts
as negotiated by the respective parties. Contributions of
participants not covered by collective bargaining agreements are
also matched by Sprint. For these participants, Sprint provides
matching contributions in common stock equal to 50 percent of
participants' contributions up to 6 percent of their compensation
and may, at the discretion of the Board of Directors, provide
additional matching contributions based upon the performance of
Sprint's common stock in comparison to other telecommunications
companies. Sprint's matching contributions (including cash
contributions under the former Centel savings plans) aggregated
$49 million, $40 million and $36 million in 1993, 1992 and 1991,
respectively.
Postretirement Benefits
Sprint sponsors postretirement benefits (principally health
care benefits) arrangements covering substantially all employees.
Employees who retired before specified dates are eligible for
these benefits at no cost or a reduced cost. Employees retiring
after specified dates are eligible for these benefits on a shared
cost basis. Sprint funds the accrued costs as benefits are paid.
The components of the 1993 net postretirement benefits cost are
as follows (in millions):
Service cost -- benefits earned during the period $ 22.1
Interest on accumulated benefit obligation 56.5
Net postretirement benefits cost $ 78.6
For measurement purposes, an annual health care cost trend rate
of 13 percent was assumed for 1993, gradually decreasing to 6
percent by 2001 and remaining constant thereafter. The effect of
a one percent increase in the assumed trend rates would have
increased the 1993 net postretirement benefits cost by
approximately $14 million. The weighted average discount rate
for 1993 was 8.0 percent.
In addition, the Company recognized postretirement benefits
curtailment losses of $11 million in 1993 as a result of
integration and restructuring actions (see Notes 2 and 9).
The cost of providing postretirement benefits was $28 million
in 1992 and $29 million in 1991.
The amount recognized in the consolidated balance sheet as of
December 31, 1993 is as follows (in millions):
Accumulated postretirement benefits obligation
Retirees $ 322.8
Active plan participants -- fully eligible 158.0
Active plan participants -- other 254.4
735.2
Unrecognized prior service benefit 6.8
Unrecognized net gains 38.9
Accrued postretirement benefits cost $ 780.9
The accumulated benefits obligation as of December 31, 1993 was
determined using a discount rate of 7.5 percent. An annual
health care trend rate of 12 percent was assumed for 1994,
gradually decreasing to 6 percent by 2001 and remaining constant
thereafter. The effect of a one percent annual increase in the
assumed health care cost trend rates would have increased the
accumulated benefits obligation as of December 31, 1993 by
approximately $98 million.
4. Income Taxes
The components of the income tax provisions allocated to
continuing operations are as follows (in millions):
1993 1992 1991
Current income tax provision
Federal $ 275.6 $ 242.1 $ 232.9
State 54.2 37.2 44.7
Amortization of deferred
investment tax credits (24.7) (31.3) (34.6)
305.1 248.0 243.0
Deferred income tax provision
(benefit)
Federal 16.4 9.5 (6.4)
State (26.2) 24.8 6.3
(9.8) 34.3 (0.1)
Total income tax provision $ 295.3 $ 282.3 $ 242.9
On August 10, 1993, the Revenue Reconciliation Act of 1993 was
enacted which, among other changes, raised the federal income tax
rate for corporations to 35 percent from 34 percent, retroactive
to January 1, 1993. Accordingly, Sprint adjusted its deferred
income tax assets and liabilities to reflect the revised rate.
The resulting adjustment related to Sprint's nonregulated
subsidiaries increased the 1993 deferred income tax provision by
$13 million ($0.04 per share). Adjustments to the net deferred
income tax liabilities associated with the rate-regulated
telephone companies were generally recorded as reductions to
regulatory liabilities and, accordingly, had no immediate effect
on Sprint's net income.
The differences which cause the effective income tax rate to
vary from the statutory federal income tax rate of 35 percent in
1993 and 34 percent in 1992 and 1991 are as follows (in
millions):
1993 1992 1991
Income tax provision at the
statutory rate $ 271.6 $ 264.7 $ 243.3
Less investment tax credits
included in income 24.7 31.3 34.6
Expected federal income tax
provision after investment tax
credits 246.9 233.4 208.7
Effect of
State income taxes, net of federal
income tax effect 18.2 40.9 33.7
Differences required to be flowed
through by regulatory commissions 6.0 5.6 5.7
Reversal of rate differentials (13.0) (16.3) (23.7)
Amortization of intangibles 8.8 8.6 8.3
Merger related costs 18.0
Other, net 10.4 10.1 10.2
Income tax provision, including
investment tax credits $ 295.3 $ 282.3 $ 242.9
Effective income tax rate 38% 36% 34%
The income tax provisions (benefits) allocated to other items
are as follows (in millions):
1993 1992 1991
Discontinued operations $ (6.6) $ 15.3
Extraordinary losses on early
extinguishments of debt (20.3) $ (9.1) (1.2)
Cumulative effect of changes in
accounting principles
Postretirement benefits (216.7)
Postemployment benefits (6.7)
Circuit activity costs (21.5)
Unrealized holding gains on
investments in common stocks
(recorded directly to
shareholders' equity) 36.5
Stock ownership, purchase and
options arrangements (recorded
directly to shareholders' equity) (10.6) (6.0) (2.7)
Effective with the adoption of SFAS No. 109 in 1992, deferred
income taxes are provided for the temporary differences between
the carrying amounts of Sprint's assets and liabilities for
financial statement purposes and their tax bases. The sources of
the differences that give rise to the deferred income tax assets
and liabilities as of December 31, 1993 and 1992, along with the
income tax effect of each, are as follows (in millions):
1993 Deferred 1992 Deferred
Income Tax Income Tax
Assets Liabilities Assets Liabilities
Property, plant and
equipment $ 1,564.0 $ 1,522.6
Postretirement and
other benefits $ 281.1 $ 25.6
Alternative minimum
tax credit
carryforwards 259.7 311.6
Operating loss
carryforwards 64.7 70.2
Integration and
restructuring
costs 35.0
Other, net 9.9 10.2
Subtotal 640.5 1,573.9 417.6 1,522.6
Less valuation
allowance 24.5 30.2
Total $ 616.0 $ 1,573.9 $ 387.4 $ 1,522.6
During 1993 and 1992, the valuation allowance related to
deferred income tax assets decreased $6 million and $5 million,
respectively.
During 1991, in accordance with APB No. 11, deferred income tax
provisions resulted from the differences in the timing of
recognizing certain revenues and expenses for financial statement
and income tax purposes. The sources of the differences, along
with the income tax effect of each, are as follows (in millions):
Property, plant and equipment $ 86.5
Allowance for doubtful accounts 8.9
Deferred revenue (2.9)
Expense accruals (9.0)
Exchangeable debentures 7.0
Alternative minimum tax credit carryforwards (90.8)
Investment tax credit carryforwards 5.9
Special partnership allocations 25.3
Sale of telephone properties (32.2)
Other, net 1.2
Total $ (0.1)
As of December 31, 1993, Sprint has available, for income tax
purposes, $260 million of alternative minimum tax credit
carryforwards to offset regular income tax payable in future
years, and tax benefits of $65 million associated with state
operating loss carryforwards. The loss carryforwards expire in
varying amounts annually from 1994 through 2008.
5. Debt
Long-term debt, as of December 31, is as follows (in
millions):
Maturing 1993 1992
Corporate
Senior notes
9.75% 1993 $ 100.0
8.60% to 9.71% 1994 $ 225.0 225.0
9.45% 1995 50.0 50.0
10.45% 1996 200.0 200.0
9.88% 1997 120.0 160.0
9.19% to 9.60% 1998 43.0 43.0
8.13% to 9.80% 2000 to 2003 632.3 632.3
Debentures
9.25% 2022 200.0 200.0
Subordinated debentures
8.00% 2006 204.8
Notes payable and commercial
paper, classified as
long-term debt 1996 634.4
Other
11.88% 1999 4.5 5.6
Long Distance Communications
Services
Vendor financing agreements
6.99% to 10.18% 1994 to 2001 423.4 538.5
Note payable to GTE
5.30% 1993 72.8
Local Communications Services
First mortgage bonds
4.63% to 9.00% 1994 to 1998 167.4 260.3
2.00% to 9.37% 1999 to 2003 541.1 487.1
4.00% to 8.75% 2004 to 2008 353.0 344.3
6.88% to 9.79% 2009 to 2013 80.0 32.6
8.77% to 8.78% 2014 to 2018 80.5 216.3
7.13% to 9.89% 2019 to 2023 343.1 268.9
Debentures and notes
4.50% to 9.61% 1994 to 2017 424.4 340.1
Notes payable and commercial
paper, classified as
long-term debt 1996 121.4
Other
2.00% to 19.45% 1994 to 2017 17.3 20.7
Other
Senior notes
9.88% to 11.70% 1998 to 2000 277.1 281.0
Debentures
9.00% 2019 150.0 229.2
Other
8.59% to 13.00% 1995 to 1998 6.5 167.9
Subtotal 5,094.4 5,080.4
Less current maturities 523.4 386.6
Long-term debt $4,571.0 $4,693.8
Long-term debt maturities during each of the next five years
are as follows (in millions):
Amount
1994 $ 523.4
1995 216.8
1996 1,104.2
1997 100.7
1998 385.3
Property, plant and equipment with an aggregate cost of
approximately $10.36 billion is either pledged as security for
first mortgage bonds and certain notes or is restricted for use
as mortgaged property.
Notes payable and commercial paper outstanding and related
weighted average interest rates, as of December 31, are as
follows (in millions):
1993 1992
Bank notes, 3.55% weighted average interest
rate $ 397.5 $ 206.3
Master Trust notes, 3.71% weighted average
interest rate 250.0 80.0
Commercial paper, 3.29% weighted average
interest rate 108.3 76.0
Total notes payable and commercial paper $ 755.8 $ 362.3
Notes payable and commercial paper outstanding as of December
31, 1993 are classified as long-term debt due to Sprint's intent
to refinance such borrowings on a long-term basis and due to its
demonstrated ability to do so pursuant to the $1.1 billion
revolving credit agreement described below. Such borrowings as
of December 31, 1992 were classified as short-term borrowings.
The bank notes are renewable at various dates throughout the
year. Sprint pays a fee to certain commercial banks to support
current and future credit requirements based upon loan
commitments. Lines of credit may be withdrawn by the banks if
there is a material adverse change in Sprint's financial
condition.
Sprint has a Master Trust Note Agreement with the trust
division of a bank to borrow funds on demand. Interest on such
borrowings is at a rate that yields interest equivalent to the
most favorable discount rate paid on 180-day commercial paper.
As of December 31, 1993, Sprint had a total of $1.31 billion
of credit arrangements, consisting of various bank commitments
and a $1.1 billion revolving credit agreement with a syndicate of
domestic and international banks. At that date, Sprint had
availability totaling $803 million under such arrangements. The
revolving credit agreement expires in July 1996 and, subject to
the approval of the lenders, may be extended for up to an
additional two years.
During 1993 and 1992, Sprint redeemed or called for redemption
prior to scheduled maturities $1.34 billion and $720 million,
respectively, of first mortgage bonds, senior notes and
debentures. Excluding amounts deferred by the rate-regulated
telephone companies as required by certain regulatory
commissions, the prepayment penalties incurred in connection with
early extinguishments of debt and the write-off of related debt
issuance costs aggregated $29 million in 1993 and $16 million in
1992, net of related income tax benefits, and are reflected as
extraordinary losses in the consolidated statements of income.
In 1991, extraordinary losses of $2 million, net of related
income tax benefits, were recorded related to the early
extinguishment and defeasance of debt.
6. Redeemable Preferred Stock
Sprint has 20 million authorized shares and subsidiaries have
approximately 6 million authorized shares of preferred stock,
including non-redeemable preferred stock. The redeemable
preferred stock outstanding, as of December 31, is as follows (in
millions):
1993 1992
Third series -- stated value $100 per share,
shares - 208,000 in 1993 and 220,000 in
1992, non-participating, non-voting,
cumulative 7.75% annual dividend rate $ 20.8 $ 22.0
Fifth series -- stated value $100,000 per
share, shares - 95 in 1993 and 1992, voting,
cumulative 6% annual dividend rate 9.5 9.5
Subsidiaries -- stated value ranging from $10
to $100 per share, shares - 380,055 in 1993
and 395,765 in 1992, annual dividend rates
ranging from 4.7% to 5.4% 8.3 8.7
Total redeemable preferred stock $ 38.6 $ 40.2
Sprint's third series preferred stock is redeemed through a
sinking fund at the rate of 12,000 shares, or $1.2 million per
year, until 2008, at which time all remaining shares are to be
redeemed. Sprint may redeem additional third series preferred
shares at $102.55 per share during 1994, and at declining amounts
in succeeding years. In the event of default, the holders of
Sprint's third series redeemable preferred stock are entitled to
elect a certain number of directors until all arrears in dividend
and sinking fund payments have been paid.
Sprint's fifth series preferred stock must be redeemed in full
in 2003. If less than full dividends have been paid for four
consecutive dividend periods or if the total amount of dividends
in arrears exceeds an amount equal to the dividend payment for
six dividend periods, the holders of the fifth series preferred
stock are entitled to elect a majority of directors standing for
election until all arrears in dividend payments have been paid.
7. Common Stock
Common stock activity during 1993 and shares reserved for
future grants under stock option plans or future issuances under
various arrangements are as follows (in millions):
Number of Shares
1993 Reserved as of
Activity December 31, 1993
Employees Stock Purchase Plan 0.1 3.3
Employee savings plans 1.4 5.0
Automatic Dividend Reinvestment Plan 0.4 1.3
Officer and key employees' and
Directors' stock options 2.2 12.2
Conversion of preferred stock and
other 0.4 2.1
Total 4.5 23.9
As of December 31, 1993, elections to purchase 2.6 million of
Sprint's common shares were outstanding under the 1992 offering
of the Employees Stock Purchase Plan. The purchase price under
the offering cannot exceed $19.66 per share, such price
representing 85 percent of the average market price on the
offering date, or fall below $12.00 per share. The 1992 offering
terminates on June 30, 1994.
Under various stock option plans, shares of common stock are
reserved for issuance to officers, other key employees and
outside directors. All options are granted at 100 percent of the
market price at date of grant. Approximately 6 percent of all
options outstanding as of December 31, 1993 provide for the
granting of stock appreciation rights as an alternate method of
settlement upon exercise. The stock appreciation rights feature
allows the optionee to elect to receive any gain in the stock
price on the underlying option directly from Sprint, either in
stock or in cash or a combination of the two, in lieu of
exercising the option by payment of the purchase price. A
summary of stock option activity under the plans is as follows
(in millions, except per share data):
Per Share
Number Exercise Aggregate
of Price Exercise
Shares Low High Amount
Shares under option as of
January 1, 1993 (5.5
million shares exercisable) 7.5 $ 9.44 $ 39.31 $ 170.2
Granted 1.6 27.50 38.44 50.3
Exercised
Options without stock
appreciation rights (2.1) 9.44 33.75 (41.0)
Options with stock
appreciation rights (0.3) 11.09 29.68 (5.5)
Terminated and expired (0.1) 18.16 33.75 (3.2)
Shares under option as of
December 31, 1993 (4.5
million shares exercisable) 6.6 $ 9.44 $ 39.31 $ 170.8
During 1990, the Savings Plan Trust, an employee savings plan,
acquired shares of common stock from Sprint in exchange for a $75
million promissory note payable to Sprint. The note bears an
interest rate of 9 percent and is to be repaid from the common
stock dividends received by the plan and the contributions made
to the plan by Sprint in accordance with plan provisions. The
remaining balance of the note receivable of $60 million as of
December 31, 1993 is reflected as a reduction to other
shareholders' equity.
Under a Shareholder Rights plan, one-half of a Preferred Stock
Purchase Right is attached to each share of common stock. Each
Right, which is exercisable and detachable only upon the
occurrence of certain takeover events, entitles shareholders to
buy units consisting of one one-hundredth of a newly issued share
of Preferred Stock-Fourth Series, Junior Participating at a price
of $235 per unit or, in certain circumstances, common stock.
Under certain circumstances, Rights beneficially owned by an
acquiring person become null and void. Sprint's Preferred Stock-
Fourth Series is without par value. It is voting, cumulative and
accrues dividends equal generally to the greater of $10 per share
or one hundred times the aggregate per share amount of all common
stock dividends. No shares of Preferred Stock-Fourth Series were
issued or outstanding at December 31, 1993. The Rights may be
redeemed by Sprint at a price of one cent per Right and will
expire on September 8, 1999.
During 1993, 1992 and 1991, Sprint declared and paid annual
dividends on common stock of $1.00 per share, and Centel declared
pre-merger common stock dividends of $0.15, $0.90 and $0.89 per
share, respectively. The most restrictive covenant applicable to
dividends on common stock results from the $1.1 billion revolving
credit agreement. Among other restrictions, this agreement
requires Sprint to maintain specified levels of consolidated net
worth, as defined. As a result of this requirement, $1.45
billion of Sprint's $2.18 billion consolidated retained earnings
were effectively restricted from the payment of dividends as of
December 31, 1993. The indentures and financing agreements of
certain of Sprint's subsidiaries contain various provisions
restricting the payment of cash dividends on subsidiary common
stock held by Sprint. In connection with these restrictions,
$749 million of the related subsidiaries' $1.79 billion total
retained earnings is restricted as of December 31, 1993. The
flow of cash in the form of advances from the subsidiaries to
Sprint is generally not restricted.
8. Commitments and Contingencies
Litigation, Claims and Assessments
During 1993, an agreement for settlement was reached related
to a class action complaint filed in January 1992 against Sprint
and certain of its officers and directors, amending a complaint
originally filed in 1990. The plaintiffs in the class action
alleged violations of various federal securities laws and related
state laws and, among other relief, sought unspecified
compensatory damages. The settlement, which is subject to
approval by the court, totaled $29 million, of which
approximately 60 percent will be recovered from Sprint's
insurance carriers. The net settlement did not have a
significant effect on Sprint's 1993 results of operations.
Following announcement of Sprint's merger with Centel, class
action suits were filed against Centel and certain of its
officers and directors in federal and state courts. The state
suits have been dismissed, while the federal suits have been
consolidated into a single action and seek damages for alleged
violations of securities laws. These and various other suits
arising in the ordinary course of business are pending against
Sprint. Management cannot predict the ultimate outcome of these
actions but believes they will not result in a material effect on
Sprint's consolidated financial statements.
Accounts Receivable Sold with Recourse
Under an agreement available through January 1995, Sprint may
sell on a continuous basis, with recourse, up to $600 million of
undivided interests in a designated pool of its accounts
receivable. Subsequent collections of receivables sold to
investors are typically reinvested in the pool. On a quarterly
basis, subject to the approval of the investors, Sprint may
extend the agreement for an additional ninety days. During 1992,
proceeds of $300 million were received under the arrangement.
Receivables sold that remained uncollected as of December 31,
1993 and 1992 aggregated $600 million.
Operating Leases
Minimum rental commitments as of December 31, 1993 for all non-
cancelable operating leases, consisting principally of leases for
data processing equipment and real estate, are as follows (in
millions):
Amount
1994 $ 304.1
1995 251.4
1996 171.1
1997 100.6
1998 83.8
Thereafter 243.6
Gross rental expense aggregated $387 million, $385 million and
$397 million in 1993, 1992 and 1991, respectively. The amount of
rental commitments applicable to subleases, contingent rentals
and executory costs is not significant.
9. Additional Financial Information
Segment Information
See "Business Segment Information."
Realignment and Restructuring Charge
During 1993, Sprint initiated a realignment and restructuring
of its long distance communications services division, including
the elimination of approximately 1,000 positions and the closure
of two facilities. These actions are expected to improve market
focus, lower costs and streamline operations within the division,
and resulted in a nonrecurring charge of $34 million, which
reduced income from continuing operations by $21 million ($0.06
per share).
Divestiture of Telephone and Cellular Properties
During 1992, the sale of Centel's local telephone operations
in Ohio was completed, pursuant to a definitive agreement reached
in November 1991. Proceeds from the sale aggregated $129
million, including $114 million of cash and $15 million of
assumed debt; a gain of $44 million ($0.13 per share), net of
related income taxes, was realized on the sale.
During 1991, the sales of Centel's local telephone operations
in Minnesota and Iowa were completed, pursuant to a definitive
agreement reached in November 1990. Proceeds from the sales
included $116 million in cash, 2,885,000 shares of Rochester
Telephone Corporation common stock with a value of $84 million
and ownership rights in various cellular franchises with a value
of $28 million. Gains of $64 million ($0.19 per share), net of
related income taxes, were realized on the sales. Also during
1991, 50 percent of Centel's interest in a cellular limited
partnership was divested. Cash proceeds of $36 million were
received, and a gain of $14 million ($0.04 per share), net of
related income taxes, was realized on this divestiture.
Discontinued Operations
During 1991, pursuant to a definitive agreement reached in
December 1990, the sale of Centel's electric operations was
completed for $320 million in cash and $26 million of assumed
liabilities. A gain of $37 million, net of related income taxes,
was realized on the sale. Revenues related to discontinued
operations were $178 million in 1991.
Financial Instruments
The carrying amounts and estimated fair values of Sprint's
long-term debt, as of December 31, are as follows (in millions):
1993 1992
Estimated Estimated
Carrying Fair Carrying Fair
Amount Value Amount Value
Long-term debt
Corporate $ 2,109.2 $ 2,377.2 $ 1,820.7 $ 1,957.3
Long distance
communications services 423.4 447.8 611.3 656.7
Local communications
services 2,128.2 2,342.5 1,970.3 2,032.3
Other 433.6 534.6 678.1 705.4
The fair values of Sprint's long-term debt are estimated based
on quoted market prices for publicly-traded issues, and based on
the present value of estimated future cash flows using a discount
rate commensurate with the risks involved for all other issues.
The carrying values of Sprint's other financial instruments
(principally cash equivalents, temporary investments, short-term
borrowings, interest rate swap/cap agreements and foreign
currency contracts) approximate fair value as of December 31,
1993 and 1992.
Supplemental Cash Flows Information
1993 1992 1991
Cash paid for (in millions)
Interest $ 453.6 $ 507.5 $ 568.7
Income taxes $ 292.4 $ 269.0 $ 244.8
During 1993, 1992 and 1991, Sprint contributed previously
unissued shares of its common stock with market values of $39
million, $28 million and $25 million, respectively, to the
employee savings plans.
SPRINT CORPORATION
SCHEDULE V -- CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT
Year Ended December 31, 1993
(In Millions)
Balance Balance
beginning Additions Other end of
of year at cost Retirements changes year
LONG DISTANCE
COMMUNICATIONS
SERVICES
Digital fiber-
optic network $ 3,976.9 $ 367.0 $ 153.0 (101.5)<1> $ 4,089.4
Data
communications
equipment 301.9 54.5 11.4 (64.8)<2> 280.2
Administrative
assets 864.5 81.1 30.8 (31.2)<2> 883.6
Construction-in-
progress 212.6 26.8 0.1 239.5
Subtotal 5,355.9 529.4 195.2 (197.4) 5,492.7
LOCAL
COMMUNICATIONS
SERVICES
Land and
buildings 636.5 29.7 6.2 660.0
Other general
support assets 624.7 75.1 58.2 (0.7) 640.9
Cable and wire
facility
assets 5,150.8 324.9 71.5 5,404.2
Central office
assets 3,855.7 387.8 163.6 3.3 4,083.2
Information
origination/
termination
assets 333.6 51.1 49.1 (0.2) 335.4
Telephone plant
under
construction 130.9 (23.3) (4.9) 102.7
Subtotal 10,732.2 845.3 348.6 (2.5) 11,226.4
CELLULAR AND
WIRELESS
COMMUNICATIONS
SERVICES 409.9 164.9 3.3 (1.9) 569.6
PRODUCT
DISTRIBUTION,
DIRECTORY
PUBLISHING AND
OTHER 405.2 55.1 24.8 (1.8) 433.7
$ 16,903.2 $ 1,594.7 $ 571.9 $ (203.6) $ 17,722.4
Depreciation is computed on a straight-line basis. The weighted
average annual composite depreciation rate for the rate-regulated
local division, excluding special short-term amortizations and
nonrecurring charges, was 6.7 percent in 1993.
<1>Adjustment primarily represents reductions to plant due to a
change in the method of accounting for certain costs related
to connecting new customers to the network. See Note 1 of
"Notes to Consolidated Financial Statements" for additional
information.
<2>Adjustments primarily represent the contribution of plant to
a joint venture.
SPRINT CORPORATION
SCHEDULE V -- CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT
Year Ended December 31, 1992
(In Millions)
Balance Balance
beginning Additions Other end of
of year at cost Retirements changes year
LONG DISTANCE
COMMUNICATIONS
SERVICES
Digital fiber-
optic network $ 3,899.1 $ 356.8 $ 230.2 $ (48.8)<1><2> $ 3,976.9
Data
communications
equipment 243.9 51.2 3.7 10.5 <2> 301.9
Administrative
assets 932.0 76.6 76.5 (67.6)<2> 864.5
Construction-in
-progress 227.7 (16.5) 1.4 212.6
Subtotal 5,302.7 468.1 310.4 (104.5) 5,355.9
LOCAL
COMMUNICATIONS
SERVICES
Land and
buildings 598.7 53.5 15.3 (0.4) 636.5
Other general
support assets 593.8 81.6 51.5 0.8 624.7
Cable and wire
facility
assets 4,959.2 292.9 101.2 (0.1) 5,150.8
Central office
assets 3,688.3 377.2 210.4 0.6 3,855.7
Information
origination/
termination
assets 527.4 42.4 237.0 0.8 333.6
Telephone plant
under
construction 140.2 (8.2) (1.1) 130.9
Subtotal 10,507.6 839.4 615.4<3> 0.6 10,732.2
CELLULAR AND
WIRELESS
COMMUNICATIONS
SERVICES 298.4 123.8 8.2 (4.1) 409.9
PRODUCT
DISTRIBUTION,
DIRECTORY
PUBLISHING AND
OTHER 398.8 34.9 29.3 0.8 405.2
$ 16,507.5 $ 1,466.2 $ 963.3 $ (107.2) $ 16,903.2
Depreciation is computed on a straight-line basis. The weighted
average annual composite depreciation rate for the rate-regulated
local division, excluding special short-term amortizations and
nonrecurring charges, was 6.6 percent in 1992.
<1>Adjustment represents an adjustment pursuant to Accounting
Principles Board Opinion No. 16 related to the acquisition of
the remaining 19.9% of the Limited Partnership, partially
offset by reclassifications of plant among categories.
<2>Adjustments represent the reclassification of plant among
categories.
<3>Retirements include approximately $95 million related to the
divestiture of Centel's local telephone operations in Ohio.
SPRINT CORPORATION
SCHEDULE V -- CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT
Year Ended December 31, 1991
(In Millions)
Balance Balance
beginning Additions Other end of
of year at cost Retirements changes year
LONG DISTANCE
COMMUNICATIONS
SERVICES
Digital fiber-
optic network $ 3,619.1 $ 451.6 $ 137.5 $(34.1)<1> $ 3,899.1
Data
communications
equipment 178.4 54.0 3.3 14.8 <2> 243.9
Administrative
assets 835.1 136.8 39.2 (0.7) 932.0
Construction-in
-progress 289.9 (62.2) 227.7
Subtotal 4,922.5 580.2 180.0 (20.0) 5,302.7
LOCAL
COMMUNICATIONS
SERVICES
Land and
buildings 585.9 27.0 15.0 0.8 598.7
Other general
support assets 564.8 75.7 49.4 2.7 593.8
Cable and wire
facility
assets 4,801.0 308.1 149.8 (0.1) 4,959.2
Central office
assets 3,580.2 348.3 238.5 (1.7) 3,688.3
Information
origination/
termination
assets 708.7 33.1 215.0 0.6 527.4
Telephone plant
under
construction 131.4 10.2 0.1 (1.3) 140.2
Subtotal 10,372.0 802.4 667.8<3> 1.0 10,507.6
CELLULAR AND
WIRELESS
COMMUNICATIONS
SERVICES 222.5 91.8 14.5 (1.4) 298.4
PRODUCT
DISTRIBUTION,
DIRECTORY
PUBLISHING AND
OTHER 363.9 48.8 13.8 (0.1) 398.8
$ 15,880.9 $ 1,523.2 $ 876.1 $ (20.5) $ 16,507.5
Depreciation is computed on a straight-line basis. The weighted
average annual composite depreciation rate for the rate-regulated
local division, excluding special short-term amortizations and
nonrecurring charges, was 6.3 percent in 1991.
<1>Adjustment primarily represents the reclassification of plant
between categories and to inventories.
<2>Adjustment represents the reclassification of plant between
categories.
<3>Retirements include approximately $213 million related to the
divestiture of Centel's local telephone operations in
Minnesota and Iowa.
SPRINT CORPORATION
SCHEDULE VI -- CONSOLIDATED ACCUMULATED DEPRECIATION
Year Ended December 31, 1993
(In Millions)
Balance Additions Balance
beginning charged to Other end of
of year income Retirements Changes year
LONG DISTANCE
COMMUNICATIONS
SERVICES
Digital fiber-
optic network $1,258.4 $357.4 $105.4 $(62.6)<3> $1,447.8
Data
communications
equipment 169.5 37.7 9.2 (18.4)<4> 179.6
Administrative
assets 507.2 122.7 30.7 (13.3)<4> 585.9
Subtotal 1,935.1 517.8 145.3 (94.3) 2,213.3
LOCAL
COMMUNICATIONS
SERVICES
Buildings 180.1 22.0 6.2 (2.5) 193.4
Other general
support assets 318.0 67.5 58.0 4.6 332.1
Cable and wire
facility
assets 2,172.8 301.1 71.5 (12.2) 2,390.2
Central office
assets 1,572.9 307.6 165.1 6.5 1,721.9
Information
origination/
termination
assets 251.0 28.8 49.1 5.2 235.9
Subtotal 4,494.8 727.0 349.9 1.6 4,873.5
CELLULAR AND
WIRELESS
COMMUNICATIONS
SERVICES 85.9 55.5 2.0 (1.5) 137.9
PRODUCT
DISTRIBUTION,
DIRECTORY
PUBLISHING AND
OTHER 167.5 33.3 21.1 3.2 182.9
$6,683.3 $1,333.6<1> $518.3<2> $(91.0) $7,407.6
<1> Reconciliation of additions charged to income to
amount disclosed in the consolidated statement of
income:
Amount charged to income $ 1,333.6
Amortization of intangibles 25.1
Depreciation and amortization
included in consolidated
statement of income $ 1,358.7
<2> Reconciliation of retirements included
in Schedule V -- Consolidated Property,
Plant and Equipment:
Amount charged to reserve $ 518.3
Net book value of long distance and
cellular/wireless division retirements
and other 53.6
Total Schedule V retirements $ 571.9
<3>Adjustment primarily represents reduction to accumulated
depreciation due to a change in the method of accounting for
certain costs related to connecting new customers to the
network. See Note 1 of "Notes to Consolidated Financial
Statements" for additional information.
<4>Adjustments primarily represent the contribution of plant to
a joint venture.
SPRINT CORPORATION
SCHEDULE VI -- CONSOLIDATED ACCUMULATED DEPRECIATION
Year Ended December 31, 1992
(In Millions)
Balance Additions Balance
beginning charged to Other end of
of year income Retirements Changes year
LONG DISTANCE
COMMUNICATIONS
SERVICES
Digital fiber-
optic network $1,062.9 $385.6 $190.6 $0.5<3> $1,258.4
Data
communications
equipment 125.5 39.5 3.1 7.6<3> 169.5
Administrative
assets 453.3 136.9 74.9 (8.1)<3> 507.2
Subtotal 1,641.7 562.0 268.6 1,935.1
LOCAL
COMMUNICATIONS
SERVICES
Buildings 171.1 19.9 10.4 (0.5) 180.1
Other general
support assets 300.9 61.8 49.3 4.6 318.0
Cable and wire
facility
assets 1,973.8 289.4 78.6 (11.8) 2,172.8
Central office
assets 1,429.5 319.7 182.9 6.6 1,572.9
Information
origination/
termination
assets 458.0 26.5 236.7 3.2 251.0
Subtotal 4,333.3 717.3 557.9 2.1 4,494.8
CELLULAR AND
WIRELESS
COMMUNICATIONS
SERVICES 60.6 32.8 2.9 (4.6) 85.9
PRODUCT
DISTRIBUTION,
DIRECTORY
PUBLISHING AND
OTHER 161.4 30.4 24.3 167.5
$6,197.0 $1,342.5<1> $853.7<2> $(2.5) $6,683.3
<1>Reconciliation of additions charged to income to
amount disclosed in the consolidated statement of
income:
Amount charged to income $ 1,342.5
Amortization of intangibles 49.0
Depreciation and amortization included in
consolidated statement of income $ 1,391.5
<2>Reconciliation of retirements included in Schedule V
-- Consolidated Property, Plant and Equipment:
Amount charged to reserve $ 853.7
Divestiture of local telephone operations 57.3
Net book value of long distance and
cellular/wireless divisions retirements
and other 52.3
Total Schedule V retirements $ 963.3
<3>Adjustments primarily represent reclassifications of plant
among categories.
SPRINT CORPORATION
SCHEDULE VI -- CONSOLIDATED ACCUMULATED DEPRECIATION
Year Ended December 31, 1991
(In Millions)
Balance Additions Balance
beginning charged to Other end of
of year income Retirements Changes year
LONG DISTANCE
COMMUNICATIONS
SERVICES
Digital fiber-
optic network $810.9 $370.8 $118.8 $1,062.9
Data
communications
equipment 63.4 24.1 1.1 $39.1 125.5
Administrative
assets 363.6 143.5 22.6 (31.2)<3> 453.3
Subtotal 1,237.9 538.4 142.5 7.9 1,641.7
LOCAL
COMMUNICATIONS
SERVICES
Buildings 162.0 18.9 8.5 (1.3) 171.1
Other general
support assets 270.5 67.5 42.1 5.0 300.9
Cable and wire
facility
assets 1,802.5 271.4 89.2 (10.9) 1,973.8
Central office
assets 1,295.9 320.0 192.1 5.7 1,429.5
Information
origination/
termination
assets 631.1 36.2 213.2 3.9 458.0
Subtotal 4,162.0 714.0 545.1 2.4 4,333.3
CELLULAR AND
WIRELESS
COMMUNICATIONS
SERVICES 42.0 24.7 4.8 (1.3) 60.6
PRODUCT
DISTRIBUTION,
DIRECTORY
PUBLISHING AND
OTHER 143.8 27.9 12.1 1.8 161.4
$5,585.7 $1,305.0<1> $704.5<2> $10.8 $6,197.0
<1>Reconciliation of additions charged to income to
amount disclosed in the consolidated statement of
income:
Amount charged to income $ 1,305.0
Amortization of intangibles 64.5
Depreciation and amortization included
in consolidated statement of income $ 1,369.5
<2>Reconciliation of retirements included in Schedule V
-- Consolidated Property, Plant and Equipment:
Amount charged to reserve $ 704.5
Divestiture of local telephone operations 122.7
Net book value of long distance and
cellular/wireless divisions retirements
and other 48.9
Total Schedule V retirements $ 876.1
<3>Adjustments primarily represent reclassifications of plant
between categories.
SPRINT CORPORATION
SCHEDULE VIII -- CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1993, 1992 and 1991
(In Millions)
Additions
Balance Charged Charged Balance
beginning to to other Other end of
of year income accounts deductions year
1993
Allowance for
doubtful accounts $118.0 $271.5 $2.6 $(270.2)<1> $121.9
Valuation allowance
- deferred income
tax assets $30.2 $0.7 $(6.4) $24.5
1992
Allowance for
doubtful accounts $144.8 $267.6 $2.4 $(296.8)<1> $118.0
Valuation allowance
- deferred income
tax assets $35.4<2> $ (5.2) $30.2
1991
Allowance for
doubtful accounts $212.6 $371.2 $2.9 $(441.9)<1> $144.8
<1> Accounts written off, net of recoveries.
<2> Valuation allowance established upon adoption of SFAS No. 109,
"Accounting for Income Taxes." See Notes 1 and 4 of "Notes to
Consolidated Financial Statements" for additional information.
SPRINT CORPORATION
SCHEDULE IX -- CONSOLIDATED SHORT-TERM BORROWINGS
Years Ended December 31, 1993, 1992 and 1991
(In Millions)
1993 <1> 1992 1991 <1>
Bank Commercial Bank Commercial Bank Commercial
Notes Paper Notes Paper Notes Paper
<2> <3> <2> <3> <2> <3>
Balance at end
of period $ 647.5 $108.3 $ 286.3 $76.0 $ 185.3 $30.0
Weighted average
interest rate 3.61% 3.29% 3.92% 4.10% 5.25% 5.31%
Average amount
outstanding
during the
year $ 456.8 $80.3 $ 398.0 $37.5 $ 401.2 $52.5
Maximum amount
outstanding
during the
year $ 722.0 $198.0 $ 486.4 $78.5 $ 749.0 $130.2
Weighted average
interest rate
during the
year (computed
by dividing
the annual
interest
expense by the
average debt
outstanding
during the
year) 3.70% 3.25% 4.17% 4.10% 6.73% 6.66%
<1>As of December 31, 1993 and 1991, short-term borrowings were
classified as long-term debt in the consolidated balance sheets
due to Sprint's intent and demonstrated ability to refinance
such borrowings on a long-term basis.
<2>Bank notes are generally issued for terms ranging from overnight
to 60 days.
<3>Commercial paper is generally issued for periods ranging from
overnight to 30 days.
SPRINT CORPORATION
SCHEDULE X -- CONSOLIDATED SUPPLEMENTARY
INCOME STATEMENT INFORMATION
Years Ended December 31, 1993, 1992 and 1991
(In Millions)
1993 1992 1991
Maintenance and repairs <1> $ 167.2 $ 174.1 $ 162.2
Taxes, other than payroll and
income taxes:
Property taxes $ 158.6 $ 148.2 $ 157.0
Gross receipts and other 77.9 76.8 60.7
$ 236.5 $ 225.0 $ 217.7
Advertising expense $ 317.2 $ 251.7 $ 192.6
<1>Amount represents maintenance and repairs for the long
distance division, cellular and wireless division, and
product distribution, directory publishing and other.
For the local division, maintenance and repairs is
the primary component of plant operations expense which
totaled $1.21 billion, $1.17 billion and $1.16 billion in
1993, 1992 and 1991, respectively.
QUARTERLY
FINANCIAL DATA
(Unaudited)
First Quarter Second Quarter Third Quarter
1993 1992 1993 1992 1993 1992
(In Millions, Except Per Share Data)
Net operating
revenues $2,718.0 $2,501.0 $2,800.9 $2,568.2 $2,867.6 $2,631.2
Operating
expenses
Costs of
services and
products 1,381.9 1,272.5 1,408.9 1,307.2 1,435.1 1,350.8
Selling, general
and
administrative 641.8 594.5 675.9 625.0 690.8 609.7
Depreciation and
amortization 337.2 334.3 338.0 352.4 338.5 356.8
Merger,
integration and
restructuring
costs <1>,<2> 248.0 44.5
Total operating
expenses 2,608.9 2,201.3 2,422.8 2,284.6 2,508.9 2,317.3
Operating income 109.1 299.7 378.1 283.6 358.7 313.9
Gain on
divestiture of
telephone
properties <3> 81.1
Interest expense (117.9) (131.2) (113.0) (129.4) (114.2) (126.7)
Other income
(expense), net (0.7) (1.8) (8.1) 6.5 (11.4) 6.4
Income (loss)
from continuing
operations
before income
taxes (9.5) 166.7 257.0 241.8 233.1 193.6
Income tax
provision <4> (1.8) (60.4) (91.9) (94.2) (96.4) (68.3)
Income (loss)
from continuing
operations (11.3) 106.3 165.1 147.6 136.7 125.3
Discontinued
operations, net (12.3)
Extraordinary
losses on early
extinguishments
of debt, net (5.2) (8.5) (14.5) (5.6)
Cumulative effect
of changes in
accounting
principles, net<5> (384.2) 22.7
Net income (loss) (413.0) 129.0 156.6 147.6 122.2 119.7
Preferred stock
dividends (0.6) (1.0) (0.9) (0.9) (0.6) (0.9)
Earnings (loss)
applicable to
common stock $(413.6) $128.0 $155.7 $146.7 $121.6 $118.8
Earnings (loss)
per common share
Continuing
operations $(0.03) $0.31 $0.48 $0.44 $0.39 $0.37
Discontinued
operations (0.04)
Extraordinary
item (0.02) (0.02) (0.04) (0.02)
Cumulative
effect of
changes in
accounting
principles (1.12) 0.07
Total $(1.21) $0.38 $0.46 $0.44 $0.35 $0.35
QUARTERLY Sprint Corporation
FINANCIAL DATA
(Unaudited)
Fourth Quarter Total Year
1993 1992 1993 1992
Net operating
revenues $2,981.3 $2,719.9 $11,367.8 $10,420.3
Operating
expenses
Costs of
services and
products 1,510.2 1,395.0 5,736.1 5,325.5
Selling, general
and
administrative 721.4 660.7 2,729.9 2,489.9
Depreciation and
amortization 345.0 348.0 1,358.7 1,391.5
Merger,
integration and
restructuring
costs <1>,<2> 292.5
Total operating
expenses 2,576.6 2,403.7 10,117.2 9,206.9
Operating income 404.7 316.2 1,250.6 1,213.4
Gain on
divestiture of
telephone
properties <3> 81.1
Interest expense (107.3) (123.8) (452.4) (511.1)
Other income
(expense), net (2.1) (16.1) (22.3) (5.0)
Income (loss)
from continuing
operations
before income
taxes 295.3 176.3 775.9 778.4
Income tax
provision <4> (105.2) (59.4) (295.3) (282.3)
Income (loss)
from continuing
operations 190.1 116.9 480.6 496.1
Discontinued
operations, net (12.3)
Extraordinary
losses on early
extinguishments
of debt, net (1.0) (10.4) (29.2) (16.0)
Cumulative effect
of changes in
accounting
principles, net <5> (384.2) 22.7
Net income (loss) 189.1 106.5 54.9 502.8
Preferred stock
dividends (0.7) (0.7) (2.8) (3.5)
Earnings (loss)
applicable to
common stock $188.4 $105.8 $52.1 $499.3
Earnings (loss)
per common share
Continuing
operations $0.55 $0.34 $1.39 $1.46
Discontinued
operations (0.04)
Extraordinary
item (0.03) (0.08) (0.05)
Cumulative
effect of
changes in
accounting
principles (1.12) 0.07
Total $0.55 $0.31 $0.15 $1.48
<1>During 1993, Sprint consummated its merger with Centel. The
transaction costs associated with the merger and the expenses
of integrating and restructuring the operations of the two
companies resulted in nonrecurring charges in the first and
third quarters of 1993. Such charges reduced net income by
$165 million ($0.48 per share) and $7 million ($0.02 per
share), respectively. See Note 2 of "Notes to Consolidated
Financial Statements" for additional information.
<2>During third quarter 1993, Sprint realigned and restructured
its long distance communications services division, resulting
in a nonrecurring charge which reduced net income by $21
million ($0.06 per share). See Note 9 of "Notes to
Consolidated Financial Statements" for additional
information.
<3>During second quarter 1992, a gain of $44 million ($0.13 per
share), net of related income taxes, was recognized related
to the sale of certain of Centel's local telephone
operations. See Note 9 of "Notes to Consolidated Financial
Statements" for additional information.
<4>During third quarter 1993, the Revenue Reconciliation Act of
1993 was enacted which, among other changes, raised the
federal income tax rate to 35 percent from 34 percent. As a
result, Sprint adjusted its deferred income tax assets and
liabilities to reflect the revised rate, resulting in a
nonrecurring charge which reduced net income by $13 million
($0.04 per share). See Note 4 of "Notes to Consolidated
Financial Statements" for additional information.
<5>Effective January 1, 1993, Sprint changed its method of
accounting for postretirement and postemployment benefits by
adopting SFAS No. 106 and No. 112 and effected another
accounting change. Effective January 1, 1992, Sprint changed
its method of accounting for income taxes by adopting SFAS
No. 109. See Note 1 of "Notes to Consolidated Financial
Statements" for additional information.
EXHIBIT INDEX
EXHIBIT
NUMBER
(3) Articles of Incorporation and Bylaws:
(a) Articles of Incorporation, as amended
(filed as Exhibit 4 to Sprint Corporation
Current Report on Form 8-K dated March 9, 1993
and incorporated herein by reference).
(b) Bylaws, as amended (filed as Exhibit 3(b)
to Sprint Corporation Annual Report on Form 10-
K for the year ended December 31, 1991 and
incorporated herein by reference).
(4) Instruments defining the Rights of Sprint's
Equity Security Holders:
(a) The rights of Sprint's equity security
holders are defined in the Fifth, Sixth,
Seventh and Eighth Articles of Sprint's
Articles of Incorporation. See Exhibit 3(a).
(b) Rights Agreement dated as of August 8,
1989, between Sprint Corporation (formerly
United Telecommunications, Inc.) and United
Missouri Bank, N.A. (formerly United Missouri
Bank of Kansas City, N.A.), as Rights Agent
(filed as Exhibit 2(b) to Sprint Corporation
Registration Statement on Form 8-A dated
August 11, 1989 (File No. 1-4721), and
incorporated herein by reference).
(c) Amendment and supplement dated June 4,
1992 to Rights Agreement dated as of August 8,
1989 (filed as Exhibit 2(c) to Amendment No. 1
on Form 8 dated June 8, 1992 to Sprint
Corporation Registration Statement on Form 8-A
dated August 11, 1989 (File No. 1-4721), and
incorporated herein by reference).
(10) Material Agreements - Merger Agreement:
(a) Agreement and Plan of Merger dated as of
May 27, 1992, among Sprint Corporation, F W
Sub Inc. and Centel Corporation (filed as
Exhibit 2 to Sprint Corporation Current Report
on Form 8-K dated May 27, 1992 and
incorporated herein by reference).
(b) First Amendment dated as of February 19,
1993, to the Agreement and Plan of Merger,
dated as of May 27, 1992, among Sprint
Corporation, F W Sub Inc. and Centel
Corporation (filed as Exhibit 2b to Sprint
Corporation Current Report on Form 8-K dated
March 9, 1993 and incorporated herein by
reference).
(10) Executive Compensation Plans and
Arrangements:
(c) 1978 Stock Option Plan, as amended (filed
as Exhibit 19(a) to United Telecommunications,
Inc. Quarterly Report on Form 10-Q for the
quarter ended September 30, 1991, and
incorporated herein by reference).
(d) 1981 Stock Option Plan, as amended (filed
as Exhibit 19(b) to United Telecommunications,
Inc. Quarterly Report on Form 10-Q for the
quarter ended September 30, 1991, and
incorporated herein by reference).
(e) 1985 Stock Option Plan, as amended (filed
as Exhibit 19(c) to United Telecommunications,
Inc. Quarterly Report on Form 10-Q for the
quarter ended September 30, 1991, and
incorporated herein by reference).
(f) 1990 Stock Option Plan, as amended.
(g) 1990 Restricted Stock Plan, as amended
(filed as Exhibit 99 to Sprint Corporation
Registration Statement No. 33-50421 and
incorporated herein by reference).
(h) Long-Term Stock Incentive Program, as
amended (filed as Exhibit 19(e) to United
Telecommunications, Inc. Quarterly Report on
Form 10-Q for the quarter ended September 30,
1991, and incorporated herein by reference).
(i) Restated Memorandum Agreements Respecting
Supplemental Pension Benefits between Sprint
Corporation (formerly United
Telecommunications, Inc.) and two of its
current and former executive officers (filed
as Exhibit 10(i) to Sprint Corporation Annual
Report on Form 10-K for the year ended
December 31, 1992 and incorporated herein by
reference).
(j) Executive Long-Term Incentive Plan.
(k) Executive Management Incentive Plan.
(l) Long-Term Incentive Compensation Plan
(filed as Exhibit 10(j) to United
Telecommunications, Inc. Annual Report on Form
10-K for the year ended December 31, 1989, and
incorporated herein by reference).
(m) Short-Term Incentive Compensation Plan
(filed as Exhibit 10(k) to United
Telecommunications, Inc. Annual Report on Form
10-K for the year ended December 31, 1989, and
incorporated herein by reference).
(n) Retirement Plan for Directors, as amended
(filed as Exhibit 28d to Registration
Statement No. 33-28237, and incorporated
herein by reference).
(o) Key Management Benefit Plan, as amended.
(p) Executive Deferred Compensation Plan, as
amended (filed as Exhibit 19(f) to United
Telecommunications, Inc. Quarterly Report on
Form 10-Q for the quarter ended September 30,
1991, and incorporated herein by reference).
(q) Director's Deferred Fee Plan, as amended
(filed as Exhibit 19(g) to United
Telecommunications, Inc. Quarterly Report on
Form 10-Q for the quarter ended September 30,
1991, and incorporated herein by reference).
(r) Supplemental Executive Retirement Plan
(filed as Exhibit 10(q) to Sprint Corporation
Annual Report on Form 10-K for the year ended
December 31, 1992, and incorporated herein by
reference).
(s) Form of Contingency Employment Agreements
between Sprint Corporation and certain of its
executive officers (filed as Exhibit 10(r) to
Sprint Corporation Annual Report on Form 10-K
for the year ended December 31, 1992, and
incorporated herein by reference).
(t) Form of Indemnification Agreements
between Sprint Corporation (formerly United
Telecommunications, Inc.) and its Directors
and Officers (filed as Exhibit 10(s) to Sprint
Corporation Annual Report on Form 10-K for the
year ended December 31, 1991 and incorporated
herein by reference).
(u) Summary of Executive Benefits (filed as
Exhibit 10(u) to Sprint Corporation Annual
Report on Form 10-K for the year ended
December 31, 1991 and incorporated herein by
reference).
(v) Amended and Restated Centel Management
Incentive Plan.
(w) Amended and Restated Centel Stock Option
Plan.
(x) Agreements Regarding Special Compensation
and Post Employment Restrictive Covenants
between Sprint Corporation and three of its
executive officers.
(y) Amended and Restated Centel Matched
Deferred Salary Plan.
(z) Amended and Restated Centel Directors
Deferred Compensation Plan.
(aa) Amended and Restated Centel Director
Stock Option Plan.
(11) Computation of Earnings Per Common Share.
(12) Computation of Ratio of Earnings to Fixed
Charges.
(21) Subsidiaries of Registrant.
(23a) Consent of Ernst & Young.
(23b) Consent of Arthur Andersen & Co.
Exhibit (10)(f)
1990 STOCK OPTION PLAN
Section 1. Establishment.
Pursuant to the Sprint Corporation Long-Term Stock
Incentive Program (the "Program"), Sprint Corporation, a Kansas
corporation (the "Company"), hereby establishes a stock option plan to
be named the 1990 Stock Option Plan (the "Plan"), for officers and key
employees of the Company and its subsidiaries.
Section 2. Purpose.
The purpose of the Plan is to induce officers and key
employees of the Company and its subsidiaries, who are in a
position to contribute materially to the prosperity thereof, to
remain with the Company or its subsidiaries, to offer them
incentives and reward in recognition of their share in the
Company's progress, and to encourage them to continue to promote
the best interests of the Company and its affiliates. The Plan
will also aid the Company and its subsidiaries in competing with
other enterprises for the services of new key personnel needed
to help insure their continued development.
Options granted to an optionee shall be either Incentive
Stock Options within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended, or Nonstatutory Stock Options,
provided that no Incentive Stock Options shall be granted which
would permit options first exercisable in any calendar year to
exceed the limitations set forth in Section 6(a) hereof.
Options which become first exercisable in any calendar year in
excess of said limitations shall be Nonstatutory Stock Options.
Options designated "Nonstatutory Stock Options" shall not be
restricted by the limitations of said Section 6(a) and shall not
be treated as Incentive Stock Options.
Section 3. Administration.
The Plan shall be administered by the Organization and
Compensation Committee (the "Committee") of the Board of
Directors of the Company. Members of the Committee shall be
Disinterested Persons as defined in the Program. The Committee
shall hold its meetings at such times and places as it may
determine. A majority of the Committee shall constitute a
quorum and the acts of a majority of the members present at any
meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee, shall be deemed the acts
of the Committee. The Company shall grant options and related
Stock Appreciation Rights ("SARs") under the Plan in accordance
with determinations made by the Committee pursuant to the
provisions of the Plan and the Program. The Committee from time
to time may adopt (and thereafter amend and rescind) such rules
and regulations for carrying out the Plan and take such action
in the administration of the Plan, not inconsistent with the
provisions of the Plan and the Program, as it shall deem proper.
The interpretation and construction of any provisions of the
Plan by the Committee shall, unless otherwise determined by the
Board of Directors of the Company, be final and conclusive. No
member of
the Board of Directors or the Committee shall be liable for any
action or determination made in good faith with respect to the Plan
or any option granted under it.
Section 4. Total Number of Shares to be Optioned.
The maximum number of shares of common stock ($2.50 par
value) of the Company which may be issued upon exercise of options
under the Plan shall not exceed 8,500,000 (subject to adjustment as
provided in Section 11 hereof). The shares sold under the Plan may
be either treasury shares or authorized but unissued shares, as the
Board of Directors from time to time may determine. The maximum
number of shares of common stock which may be issued upon exercise
of options granted in any calendar year, together with shares of
common stock subject to other awards under the Program, shall not
exceed the limits set forth in Section 4(a) of the Program.
In the event that any outstanding options under the Plan
for any reason expire or are terminated, the shares of common stock
of the Company allocable to the unexercised portion of all of such
options may again be subject to an option under the Plan.
Section 5. Eligibility.
Options shall be granted only to officers and key employees
of the Company or its subsidiaries. The Committee will, in its
discretion, determine the officers and key employees to be granted
options, the time or times at which options shall be granted, the
number of shares subject to each option, whether the options are
Incentive Stock Options or Nonstatutory Stock Options, any
conditions on the exercise of the options, and the manner in which
options may be exercised. In making such determination, the
Committee may take into consideration the value of the services
rendered by the respective individuals, their present and potential
contributions to the success of the Company and its affiliates and
such other factors which the Committee may deem relevant in
accomplishing the purpose of the Plan.
No option may be granted to any individual who immediately
after the option grant owns directly or indirectly stock possessing
more than five percent (5%) of the total combined voting power or
value of all classes of stock of the Company or any subsidiary.
An individual may be granted more than one option but only on
the terms and subject to the restrictions hereinafter set forth.
No person shall be eligible to receive an option for a larger
number of shares than is recommended for such individual by the
Committee.
Section 6. Limitation on Incentive Stock Options.
(a) General Rule. The aggregate fair market value
(determined at the time the option is granted) of the stock with
respect to which Incentive Stock Options are exercisable for the
first time during any calendar year by the optionee under all plans
of the Company and its subsidiaries shall not exceed $100,000 or,
if different, the maximum limitation in effect at the time of grant
under Section 422A of the Internal Revenue Code of 1986, as
amended, or any successor provision, and any regulations
promulgated thereunder.
(b) Fair Market Value. Fair market value shall be deemed
to be the average of the high and low prices of the common
stock of the Company for composite transactions as published by
major newspapers for the date the Incentive Stock Option is granted
or, if no sale of the Company's stock shall have been made on that
day, the next preceding day on which there was a sale of such
stock.
Section 7. Terms and Conditions of Options.
Each option granted under the Plan shall be evidenced by a
Stock Option Agreement in such form not inconsistent with the Plan
as the Committee shall determine, provided that such Stock Option
Agreement clearly and separately identifies Nonstatutory Stock
Options and Incentive Stock Options and that the substance of the
following terms and conditions be included therein:
(a) Option Price. The price at which each share of
common stock covered by such option may be purchased shall be
determined by the Committee and shall be no less than one hundred
percent (100%) of the fair market value of the stock on the date
the option is granted. Fair market value shall be deemed to be the
average of the high and low prices of the common stock of the
Company for composite transactions as published by major newspapers
for the date the option is granted or, if no sale of the Company's
stock shall have been made on that day, the next preceding day on
which there was a sale of such stock.
(b) Nontransferable. The option and any related SAR shall
not be transferable by the optionee otherwise than by will or by
the laws of descent and distribution; provided that, if so
determined by the Committee, an optionee may, in the manner
established by the Committee, designate a beneficiary to exercise
the option and any related SAR upon the death of the optionee.
During the optionee's lifetime, the option and any related SAR may
be exercised only by the optionee or, if permissible under
applicable law, by the guardian or representative of the optionee.
(c) Exercise of Option. The option and any related SAR,
if exercised by the optionee, may be exercised (subject, however,
to the provisions of Section 9, and if applicable, Section 10) only
if the optionee has been an employee of the Company or of any
subsidiary thereof at all times during the period beginning with
the date of the granting of the option and ending on the day three
(3) months before the date of such exercise; provided, however,
that in the case of an optionee who is a retiree of the Company or
of any subsidiary thereof or who becomes permanently and totally
disabled, the three (3) months shall be extended to twelve (12)
months for options designated "Incentive Stock Options" and to five
(5) years for options designated "Nonstatutory" Stock Options" (for
this purpose, a retiree is a person who is entitled to receive
pension benefits in accordance with the Sprint Retirement Pension
Plan immediately upon termination of employment). Options granted
under the Plan shall not be affected by any change of duties or
position so long as the optionee continues to be an employee of the
Company or of a subsidiary. Only those options exercisable at the
date the optionee's employment is terminated may be exercised
during the period following such termination, whether such
termination is by retirement or otherwise.
(d) Term of Option. The option and any related SAR shall
not be exercisable after the expiration of ten (10) years from the
date the option was granted.
(e) Death of Optionee. In the event of the death of an
optionee during the period in which an option is exercisable (as
set forth in Section 7(c) above), the option theretofore granted to
such person and any related SAR shall be exercisable only within
the twelve (12) months next succeeding such death, and then only
(i) by the executor or administrator of the optionee's estate, by
the person or persons to whom the optionee's rights under the
option shall pass by the optionee's will or the laws of descent and
distribution, or, if a beneficiary has been designated in
accordance with Section 7(b) above, by the beneficiary, and (ii) if
and to the extent that the optionee was entitled (or deemed to be
entitled by the Committee) to exercise the option at the date of
the optionee's death, provided that in no event shall the option be
exercisable more than ten (10) years after the date it was granted.
Section 7A. Reload Options.
In connection with non-qualified options (including newly-
granted options or outstanding options granted under the Plan or
any other stock option plan of the Company or of US Sprint
Communications Company Limited Partnership), the Committee may
provide that an optionee has the right to a reload option, which
shall be subject to the following terms and conditions:
(a) Grant of the Reload Option; Number of Shares, Price.
Subject to subsections (b) and (c) of this Section 7A and to the
availability of shares to be optioned under the Plan, if an optionee has
an option (the "original option") with reload rights and pays for the
exercise of the original option by surrendering common stock of the
Company, the optionee shall receive a new option ("reload option") for
the number of shares so surrendered at an option price equal to the fair
market value of the stock on the date of the exercise of the original
option.
(b) Minimum Purchase Required. A reload option will be
granted only if the exercise of the original option is an exercise of at
least 25% of the total number of shares granted under the original option
(or an exercise of all the shares remaining under the original option if
less than 25% of the shares remain to be exercised).
(c) Other Requirements. A reload option will not be
granted: (1) if the market value of the common stock of the Company on
the date of exercise of the original option is less than the exercise
price of the original option; (2) if the optionee is no longer an
employee of Sprint or a Sprint subsidiary; or (3) if the original option
is exercised less than one year prior to the expiration of the original
option.
(d) Term of Option. The reload option shall expire on
the same date as the original option.
(e) Type of Option. The reload option shall be a
non-qualified option.
(f) No Additional Reload Options. The reload options
shall not include any right to a second reload option.
(g) Date of Grant, Vesting. The date of grant of the
reload option shall be the date of the exercise of the original option.
The reload options shall be exercisable in full beginning one year from
date of grant; provided, however, that all shares purchased upon the
exercise of the original option (except for any shares withheld for tax
withholding obligations) shall not be sold, transferred or pledged within
six months from the date of exercise of the original option. In no event
shall a reload option be exercised after the original option expires as
provided in subsection (d) of this Section 7A.
(h) Stock Withholding; Grants of Reload Options. If the other
requirements of this Section 7A are satisfied, and if shares are
withheld or shares surrendered for tax withholding pursuant to Section
17, a reload option will be granted for the number of shares surrendered
as payment for the exercise of the original option plus the number of
shares surrendered or withheld to satisfy tax withholding. In
connection with reload options for officers who are subject to Section
16 of the Securities Exchange Act of 1934 ("Insiders"), the Committee
may at any time impose any limitations which, in the Committee's sole
discretion, are necessary or desirable in order to comply with Section
16(b) of the Securities Exchange Act of 1934 and the rules and
regulations thereunder, or in order to obtain any exemption therefrom.
(i) Other Terms and Conditions. Except as otherwise provided
in this Section 7A, all the provisions of the 1990 Stock Option Plan
shall apply to reload options granted pursuant to this Section 7A.
Section 8. Consideration for Options.
Each optionee shall, as consideration for the grant of the option,
agree in writing to remain in the employ of the Company or of one of its
subsidiaries, at the pleasure of the Company or of such subsidiary, for
at least (1) year from the date of the granting of such option or until
earlier termination of the optionee's employment effected or approved by
the Company or by such subsidiary. In the event of a violation by the
optionee of such agreement, any options still held by such person at the
time of such violation shall automatically terminate. The Committee may
waive this requirement in the case of any optionee. Nothing contained
in the Plan, or in any option granted pursuant to the Plan, nor in any
agreement made pursuant to the provisions of this Section 8, shall
confer upon any optionee any right with respect to continuance of
employment by the Company or its subsidiaries, nor interfere in any way
with the right of the Company or its subsidiaries to terminate the
optionee's employment or change the optionee's compensation at any time.
Section 9. Exercise of Options - Purchase of Shares.
Options and related SARs shall be exercisable at such time or
times, and upon the satisfaction of such conditions, as determined by
the Committee; provided, however, that unless otherwise determined by
the Committee, no Incentive Stock Option shall be exercisable during the
year ending on the day before the first anniversary date of the granting
of the Incentive Stock Option. An optionee's right to purchase shares
with respect to shares which become exercisable shall be cumulative
during the term of the option. An option shall be exercisable by
purchase of shares only upon payment to the Company of the full purchase
price of the shares with respect to which the option is exercised;
provided, however, that the Company shall not be required to issue or
deliver any certificates for shares of common stock purchased upon the
exercise of an option prior to (i) if requested by the Company, the
filing with the Company by the optionee or purchaser acting under
Section 7(e) hereof of a representation in writing that at the time of
such exercise it is the optionee's or purchaser's then present intention
to acquire the shares being purchased for investment and not for resale,
or (ii) the completion of any registration or other qualification of
such shares under any state or federal laws or rulings or regulations of
any government regulatory body, which the Company
shall determine to be necessary or advisable.
Payment for the shares shall be either in United States dollars,
payable in cash or by check, or by surrender of stock certificates
representing like common stock of the Company having an aggregate fair
market value, determined as of the date of exercise, equal to the number
of shares with respect to which such option is exercised multiplied by
the option price per share; provided that the Committee may impose
whatever restrictions it deems necessary or desirable with respect to
the payment for shares by the surrender of stock certificates
representing like common stock of the Company. The fair market value of
common stock on the date of exercise of an option shall be determined in
the same manner as the fair market value of common stock on the date of
grant of an option is determined pursuant to Section 7(a). Such payment
shall be accompanied by a written request for the shares purchased. An
option shall be deemed exercised on the date such payment and written
request are received by the Secretary of the Company.
No optionee or optionee's beneficiary, executor or administrator,
legatees or distributees, as the case may be, will be, or will be deemed
to be, a holder of any shares subject to an option unless and until a
stock certificate or certificates for such shares are issued to such
person or them under the terms of the Plan. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record
date is prior to the date such stock certificate is issued, except as
provided in Section 11 hereof.
In the event that any optionee shall be dismissed from the employ
of the Company or any of its subsidiaries for any reason which in the
opinion of the Committee shall constitute good cause for dismissal, any
option still held by such person at such time shall automatically
terminate. The decision of the Committee as to what shall constitute
good cause for dismissal shall be final and binding upon all concerned.
In the event that any optionee, without the consent of
the Committee, while employed by the Company or any affiliate of the
Company or after termination of such employment, becomes associated
with, employed by, renders services to, or owns any interest in (other
than any nonsubstantial interest, as determined by the Committee), any
business that is in competition with the Company or with any business in
which the Company has a substantial interest, as determined by the
Committee, any option still held by such person at such time shall
automatically terminate. The decision of the Committee on any such
matters shall be final and binding upon all concerned.
Section 10. Exercise of Options - Stock Appreciation Rights.
In addition to providing for the exercise of an option as set
forth in Section 9, at the time of grant of such option the Committee
may by separate agreement, in conjunction with all or part of any option
granted under the Plan, permit an optionee to exercise the option in an
alternative manner based on the appreciated value of the common stock
subject to option; provided, however, that no SAR granted to an optionee
who is subject to Section 16(b) of the Exchange Act (an "Insider") shall
be exercisable during the six-month period following the date of grant,
except that such limitation shall not apply in the event of death or
physical disability of such optionee occurring prior to the expiration
of such six-month period. SARs may be exercised by an optionee by
surrendering the related option or
applicable portion thereof. Upon such exercise and surrender, the
optionee shall be entitled to receive the value of such SARs
determined in the manner prescribed in this Section 10. Options which
have been so surrendered, in whole or in part, shall no longer be
exercisable.
Each agreement evidencing SARs shall clearly and separately
identify the Nonstatutory Stock Options and Incentive Stock Options to
which it relates and shall contain such terms and conditions not
inconsistent with other provisions of the Plan and the Program as shall
be determined from time to time by the Committee, which shall include
the following:
(a) SARs shall expire no later than the expiration of
the related option.
(b) SARs shall be transferable only when and to the
extent that the related option is transferable.
(c) SARs shall be exercisable at such time or times and only to
the extent that the related option is exercisable. The SAR shall
terminate and no longer be exercisable upon the termination or exercise
of the related option, except that SARs granted with respect to less
than the full number of shares covered by a related option shall not be
reduced until the exercise or termination of the related option exceeds
the number of shares not covered by the SARs.
(d) SARs shall be exercisable only when there is a
positive spread, that is, when the market price of the stock subject to
the related option exceeds the exercise price of such option.
(e) Upon the exercise of SARs, an optionee shall be entitled to
receive the value thereof, which value shall be equal to the excess of
the fair market value on the date of exercise of one share of common
stock over the option price per share specified in the related option
multiplied by the number of shares in respect of which the SARs shall
have been exercised.
The fair market value of common stock on the date of exercise of SARs
shall be determined in the same manner as the fair market value of
common stock on the date of grant of an option is determined pursuant to
Section 7(a).
(f) Upon an exercise of SARs, the optionee shall notify the
Company of the form in which payment of the value thereof will be made
(i.e., cash, common stock, or any combination thereof); provided,
however, in the case of Insiders, (i) payment of the value of SARs
related to Incentive Stock Options may be elected in common stock only
insofar as the issuance of such common stock to the optionee would be
subject to the Internal Revenue Code of 1986, Section 83 Income
Inclusion Rule, as in effect on the date of exercise of the SARs, and
(ii) the Committee may at any time impose any other limitations upon the
exercise of SARs which, in the Committee's sole discretion, are
necessary or desirable in order to comply with Section 16(b) of the
Exchange Act and the rules and regulations thereunder, or in order to
obtain any exemption therefrom.
Upon the exercise of SARs, the option or part thereof to
which such SARs are related shall be deemed to have been exercised for
the purpose of the limitation of the number of shares of common stock to
be issued under the Plan as set forth in Section 4 and the limitation of
the number of shares of common stock to be issued under the Program as
set forth in Section 4(a)
of the Program. SARs shall be deemed exercised on the date written
notice of exercise is received by the Secretary of the Company.
Section 11. Change in Stock, Adjustments, Etc.
In the event that the outstanding shares of common stock of the
Company are hereafter increased or decreased or changed into or
exchanged for a different number of shares or kind of shares or other
securities of the Company or of another corporation, by reason of
reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, or a dividend
payable in capital stock, appropriate adjustment shall be made by the
Committee in the number and kind of shares for the purchase of which
options may be granted under the Plan including the maximum number that
may be granted to any one person. In addition, the Committee shall make
appropriate adjustment in the number and kind of shares as to which
outstanding options, or portions thereof then unexercised, shall be
exercisable, to the end that the optionee's proportionate interest shall
be maintained as before the occurrence of such event, and such
adjustment of outstanding options shall be made without change of the
total price applicable to the unexercised portion of the option and with
a corresponding adjustment in the option price per share; provided,
however, that each such adjustment in the number and kind of shares
subject to outstanding options, including any adjustment in the option
price, shall be made in such manner as not to constitute a modification
as defined in Section 425 of the Internal Revenue Code of 1986, as
amended. If any outstanding options are subject to any conditions, the
Committee shall also make appropriate adjustments to such conditions.
Any such adjustment made by the Committee shall be conclusive.
The grant of an option pursuant to the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
Section 12. Duration, Amendment and Termination.
The Board of Directors of the Company may at any time terminate
the Plan or make such amendments thereof as it shall deem advisable and
in the best interests of the Company; provided, however, that no such
termination or amendment shall, without the consent of the individual to
whom any option shall theretofore have been granted, affect or impair
the rights of such individual under such option; and provided further,
that any such amendment shall be consistent with the provisions of the
Program, as it may be amended from time to time.
No stock option shall be granted under the Plan after April 18,
1999, but stock options granted prior to or as of such date may extend
beyond such date in accordance with the provisions hereof.
Section 13. Effectiveness of Plan.
This Plan shall be effective as of February 17, 1990.
Section 14. Date of Granting of Options.
The date of grant of a reload option shall be determined in
accordance with Section 7A(g). The date of grant of all other
options shall be the date designated by the Committee as the date of
grant, provided that in no event shall the date of grant be earlier than
the date on which the Committee approved the grant. Within sixty (60)
days of the granting of the option, the Company shall notify the
optionee of the grant of the option, and submit to the optionee a Stock
Option Agreement and, if applicable, an agreement respecting SARs, duly
executed by and on behalf of the Company, with the request that the
optionee execute the agreement or agreements within sixty (60) days
after the mailing by the Company of the notice to the optionee. The
optionee shall execute the written option agreement and, if applicable,
the agreement respecting SARs, within said 60-day period.
Section 15. Application of Funds.
The proceeds received by the Company from the sale of stock
subject to option are to be added to the general funds of the Company
and used for its corporate purposes.
Section 16. No Obligation to Exercise Option.
Granting of an option shall impose no obligation on the
optionee to exercise such option.
Section 17. Stock Withholding Election.
When taxes are withheld in connection with the exercise of a
Nonstatutory Stock Option or SAR for stock, the optionee may elect to
make payment for the withholding of federal, state and local taxes,
excluding social security and medicare taxes, up to the optionee's
marginal tax rates, by one or both of the following methods:
(i) delivering part or all of the payment in previously-owned
shares (which shall be valued at fair market, as defined
herein, on the date of exercise) held for at least six
months, whether or not received through the prior exercise
of a stock option or SAR for stock; or
(ii) requesting the Company to withhold from those shares that
would otherwise be received upon exercise of the option, or
upon exercise of an SAR for stock, a number of shares having
a fair market value (as defined herein) on the date of
exercise equal to the amount to be withheld. The amount of
tax withholding to be satisfied by withholding shares from
the option exercise is limited to the minimum amount of
taxes, excluding social security and medicare taxes,
required to be withheld under federal, state and local law.
Such election is irrevocable. Any social security and medicare taxes,
any fractional share amount and any additional withholding not paid by
the withholding or surrender of shares must be paid in cash. If no
timely election is made, cash must be delivered to satisfy all tax
withholding requirements.
Optionees who are subject to Section 16 of the Securities Exchange
Act of 1934 ("Insiders") making an election pursuant to (i) or (ii) of
the immediately preceding paragraph must do so: (a) at least six months
after the date of grant of the option or SAR; and (b) within a "window
period" as defined in
Rule 16b-3(e)(3) under the Securities Exchange Act of 1934. An election
by an Insider to deliver stock or have stock retained to satisfy tax
obligations is subject to the approval of the
Committee and to such rules as the Committee may from time to
Exhibit (10)(j)
EXECUTIVE LONG-TERM INCENTIVE PLAN
1.0 Establishment
1.01 The Executive Long-Term Incentive Plan is effective
January 1, 1994. Thereafter, it will continue from
year to year, until the Board amends or terminates it.
2.0 Definitions
2.01 "Board" is the Board of Directors of Sprint
Corporation.
2.02 "Committee" is the Organization and Compensation
Committee of the Board.
2.03 "Company" is Sprint Corporation.
2.04 "Participant" is a Senior Officer designated by the
Committee to participate in the Plan.
2.05 "Senior Officer" is an officer of the Company holding
the office of Senior Vice President or higher.
3.0 Purpose
3.01 The Plan is intended to further the Company's long-term
objectives by offering competitive incentive
compensation to Senior Officers who make substantive
contributions to those objectives.
4.0 Administration
4.01 The Committee will be responsible for the
administration of the Plan. The Committee is
authorized to interpret the Plan, to prescribe, amend,
and rescind rules and regulations deemed advisable to
protect the interests of the Company, and to make all
other administrative determinations necessary. Any
determination, interpretation or other action made or
taken by the Committee pursuant to the Plan's
provisions will be final for all purposes and upon all
persons.
5.0 Performance Cycle
5.01 A performance cycle, established by the Committee,
consists of at least two (2) consecutive calendar
years, over which period the Company's performance is
to be measured.
6.0 Performance Criteria
6.01 Prior to the beginning of each Performance Cycle, the
Committee will determine the factors to be used for
measuring performance. Such Committee determinations
may vary for different Performance Cycles.
7.0 Adjustments
7.01 In the event of a restructuring charge, a change in a
method of accounting, or a charge or writedown related
to asset impairments, the Committee shall make
adjustments to reflect the impact of the change on the
Plan features or measurement areas.
7.02 In the event of a Corporate transaction, such as any
merger, consolidation, distribution of stock or
property, reorganization or partial or complete
liquidation of the Company, the Committee shall make
adjustments to reflect the impact of the Corporate
transaction on the Plan features or measurement areas.
7.03 At the Committee's discretion, the payout for a
participant may be decreased or eliminated. In
determining whether to exercise its discretion pursuant
to this paragraph, the Committee shall consider, among
the other factors it deems appropriate, the level of
incentive awards payable under plans offered by the
Company which are similar to the Plan established
hereunder.
8.0 Participation
8.01 For each Performance Cycle, the Committee will
determine which Senior Officers will participate in the
Plan.
8.02 Participation is limited to those positions (or
individuals) approved by the Committee at the beginning
of each performance period unless specified elsewhere
in this Plan.
Individuals may join or leave the Plan through transfer
to a participating or non participating position
throughout the Performance Cycle. In such cases,
incentive opportunity and payouts will be prorated
based on time served under the Plan. No employee will
be eligible to receive a Plan payout without having
served at least 24 months of the Performance Cycle.
With Committee approval, individuals who have not
served 24 months under this Plan but who have a total
of 24 months under this Plan and/or any other Company
or subsidiary long-term Plan during the cycle, may
receive a prorated payout under this Plan.
9.0 Payment
9.01 The Committee will determine the incentive opportunity
earned by each participant for any Performance Cycle.
9.02 The incentive opportunity earned based upon the
achievement of the performance criteria will be
adjusted by the percent increase or decrease in the
market price of Sprint Corporation common stock as
occurs over the Performance Cycle.
9.03 The Committee will certify that the performance
criteria were met and approve the payment of each award
made under the Plan. Payments will be made following
the end of each Performance Cycle.
9.04 Award payments will be made to the participants as soon
as practicable following the end of each Performance
Cycle after the Committee certifies that the
performance criteria were met and gives approval for
payment. Unless otherwise determined by the Committee,
payment shall be in the form of Sprint common stock,
less the cash amount necessary to pay any taxes due
based on the then current tax law.
10.0 Termination of Employment
10.01 If termination of employment occurs during a
Performance Cycle by reason of death, disability (as
determined under the company's long-term disability
program), or normal retirement (as determined under the
Company's retirement plan), the participant shall be
entitled to prorated award based on Company performance
as of the most recently completed fiscal year for any
plan in which the participant has completed at least
two thirds of the performance period. The Committee
will determine the prorated award under the rules and
regulations it establishes. The award will be paid
when all other payments are made at the end of the
cycle. If termination of employment occurs for reasons
other than death, disability or normal retirement, all
the participant's rights and interests under this Plan
will be canceled and forfeited, unless determined
otherwise by the Committee.
11.0 Non-Transferability
11.01 A participant's rights and interests under the
Plan may not be sold, pledged, assigned or transferred
in any manner other than by will or by the laws of
descent and distribution except as provided by the Plan
or specified by the Committee.
12.0 Tax Withholding
12.01 The Company shall have the right to deduct from
all awards any taxes required by law to be withheld
with respect to such awards.
13.0 Continuance of Employment
13.01 Nothing under this Plan nor any action taken
because of the Plan will be construed as giving any
employee any right to be retained in the Company's
employ.
14.0 Amendment and Termination
14.01 The Board, at any time, may terminate, and at any
time, and in any respect, may amend or modify, the
Plan.
15.0 Legal Requirements
15.01 The designation of participation and any
opportunity in the Plan, together with the award of the
Plan payout will be subject to all applicable federal,
state and local laws, rules and regulations.
15.02 The Plan, and all related provisions, shall be
construed in accordance with and governed by the laws
of the State of Kansas.
Exhibit (10)(k)
EXECUTIVE MANAGEMENT INCENTIVE PLAN
1.0 Establishment
1.01 The Executive Management Incentive Plan is effective
January 1, 1994. Thereafter, it will continue from
year to year, until the Board amends or terminates it.
2.0 Definitions
2.01 "Board" is the Board of Directors of Sprint
Corporation.
2.02 "Committee" is the Organization and Compensation
Committee of the Board.
2.03 "Company" is Sprint Corporation.
2.04 "Participant" is a Senior Officer designated by the
Committee to participate in the Plan.
2.05 "Senior Officer" is an officer of the Company holding
the office of Senior Vice President or higher.
3.0 Purpose
3.01 The plan is intended to further the Company's
objectives by offering competitive incentive
compensation to Senior Officers who make substantive
contributions to those objectives.
4.0 Administration
4.01 The Committee will be responsible for the
administration of the Plan. This Committee is
authorized to interpret the Plan, to prescribe, amend,
and rescind rules and regulations deemed advisable to
protect the interests of the Company, and to make all
other administrative determinations necessary. Any
determination, interpretation or other action made or
taken by the Committee pursuant to the Plan's
provisions will be final for all purposes and upon all
persons.
5.0 Performance Cycle
5.01 A Performance Cycle consists of a calendar year. Cash
may be awarded to participants for each year the
Committee approves a plan.
6.0 Performance Criteria
6.01 Prior to the beginning of each Performance Cycle, the
Committee will determine the factors to be used for
measuring performance. Such Committee determinations
may vary from year to year.
7.0 Adjustments
7.01 In the event of a restructuring charge, a change in a
method of accounting, or a charge or writedown related
to asset impairments, the Committee shall make
adjustments to reflect the impact of such items on the
Plan features or measurement areas.
7.02 In the event of a Corporate transaction, such as any
merger, consolidation, distribution of stock or
property, reorganization or partial or complete
liquidation of the Company, the Committee shall make
adjustments to reflect the impact of the Corporate
transaction on the Plan features or measurement areas.
7.03 At the Committee's discretion, the payout for a
participant may be decreased or eliminated. In
determining whether to exercise its discretion pursuant
to this paragraph, the Committee shall consider, among
the other factors it deems appropriate, the level of
incentive awards payable under plans offered by the
Company which are similar to the Plan established
hereunder.
8.0 Participation
8.01 For each Performance Cycle, the Committee will
determine which Senior Officers will participate in the
Plan.
8.02 Senior Officers hired or promoted during a Performance
Cycle into a position appropriate for participation in
this Plan may either participate in the already
existing Cycle on a prorated basis, or be held out
until the beginning of the next Cycle. This
determination will be made by the Committee.
9.0 Payment
9.01 The Committee will determine the incentive opportunity
(or possible cash payment) earned by each participant
for any Performance Cycle.
9.02 The Committee will certify that the performance
criteria were met and approve the payment of each award
made under the Plan. Payments will be made following
the end of each Performance Cycle. This normally
follows the Committee's February meeting.
10.0 Deferral
10.01 For each Performance Cycle, an eligible
participant may elect, in writing, to voluntarily defer
all or a portion of a potential payment. This will be
consistent with the federal income tax code
requirements to effectively defer income. The
Committee and the Executive Deferred Compensation Plan
will determine the terms of all deferrals.
11.0 Termination of Employment
11.01 If termination of employment occurs during a
Performance Cycle by reason of death, disability (as
determined under the Company's long-term disability
program), or normal retirement (as determined under the
Company's retirement plan), the Participant will be
entitled to a prorated award based upon appropriate
Performance Criteria. The Committee will determine the
prorated award under the rules and regulations it
establishes. The award will be paid when all other
payments are made at the end of the cycle. Should a
Senior Officer terminate to immediately become employed
by an affiliated organization, a prorata payment may
also be extended. If termination of employment occurs
for reasons other than death, disability, normal
retirement or transfer, all the Participant's interests
and rights in this Plan will be forfeited, unless
otherwise determined by the Committee.
12.0 Non-Transferability
12.01 A participant's rights and interests under the
Plan may not be sold, pledged, assigned or transferred
in any manner other than by will or by the laws of
descent and distribution except as provided by the Plan
or specified by the Committee.
13.0 Tax Withholding
13.01 The Company retains the right to deduct from all
awards paid in cash any taxes required by law to be
withheld with respect to cash awards.
14.0 Continuance of Employment
14.01 Nothing under the Plan nor any action taken
because of Plan will be construed as giving any
employee any right to be retained in the Company's
employ.
15.0 Amendment and Termination
15.01 The Board, at any time may terminate, and at any
time and in any respect may amend or modify the Plan.
16.0 Legal Requirements
16.01 The designation of participation and any
opportunity in the Plan, together with the payment of
cash, will be subject to all applicable federal, state
and local laws, rules and regulations.
16.02 The Plan and all related provisions will be
construed in accordance with and governed by the laws
of the State of Kansas.
Attachment B
EXECUTIVE LONG-TERM INCENTIVE PLAN
1.0 Establishment
1.01 The Executive Long-Term Incentive Plan is effective
January 1, 1994. Thereafter, it will continue from
year to year, until the Board amends or terminates it.
2.0 Definitions
2.01 "Board" is the Board of Directors of Sprint
Corporation.
2.02 "Committee" is the Organization and Compensation
Committee of the Board.
2.03 "Company" is Sprint Corporation.
2.04 "Participant" is a Senior Officer designated by the
Committee to participate in the Plan.
2.05 "Senior Officer" is an officer of the Company holding
the office of Senior Vice President or higher.
3.0 Purpose
3.01 The Plan is intended to further the Company's long-term
objectives by offering competitive incentive
compensation to Senior Officers who make substantive
contributions to those objectives.
4.0 Administration
4.01 The Committee will be responsible for the
administration of the Plan. The Committee is
authorized to interpret the Plan, to prescribe, amend,
and rescind rules and regulations deemed advisable to
protect the interests of the Company, and to make all
other administrative determinations necessary. Any
determination, interpretation or other action made or
taken by the Committee pursuant to the Plan's
provisions will be final for all purposes and upon all
persons.
5.0 Performance Cycle
5.01 A performance cycle, established by the Committee,
consists of at least two (2) consecutive calendar
years, over which period the Company's performance is
to be measured.
6.0 Performance Criteria
6.01 Prior to the beginning of each Performance Cycle, the
Committee will determine the factors to be used for
measuring performance. Such Committee determinations
may vary for different Performance Cycles.
7.0 Adjustments
7.01 In the event of a restructuring charge, a change in a
method of accounting, or a charge or writedown related
to asset impairments, the Committee shall make
adjustments to reflect the impact of the change on the
Plan features or measurement areas.
7.02 In the event of a Corporate transaction, such as any
merger, consolidation, distribution of stock or
property, reorganization or partial or complete
liquidation of the Company, the Committee shall make
adjustments to reflect the impact of the Corporate
transaction on the Plan features or measurement areas.
7.03 At the Committee's discretion, the payout for a
participant may be decreased or eliminated. In
determining whether to exercise its discretion pursuant
to this paragraph, the Committee shall consider, among
the other factors it deems appropriate, the level of
incentive awards payable under plans offered by the
Company which are similar to the Plan established
hereunder.
8.0 Participation
8.01 For each Performance Cycle, the Committee will
determine which Senior Officers will participate in the
Plan.
8.02 Participation is limited to those positions (or
individuals) approved by the Committee at the beginning
of each performance period unless specified elsewhere
in this Plan.
Individuals may join or leave the Plan through transfer
to a participating or non participating position
throughout the Performance Cycle. In such cases,
incentive opportunity and payouts will be prorated
based on time served under the Plan. No employee will
be eligible to receive a Plan payout without having
served at least 24 months of the Performance Cycle.
With Committee approval, individuals who have not
served 24 months under this Plan but who have a total
of 24 months under this Plan and/or any other Company
or subsidiary long-term Plan during the cycle, may
receive a prorated payout under this Plan.
9.0 Payment
9.01 The Committee will determine the incentive opportunity
earned by each participant for any Performance Cycle.
9.02 The incentive opportunity earned based upon the
achievement of the performance criteria will be
adjusted by the percent increase or decrease in the
market price of Sprint Corporation common stock as
occurs over the Performance Cycle.
9.03 The Committee will certify that the performance
criteria were met and approve the payment of each award
made under the Plan. Payments will be made following
the end of each Performance Cycle.
9.04 Award payments will be made to the participants as soon
as practicable following the end of each Performance
Cycle after the Committee certifies that the
performance criteria were met and gives approval for
payment. Unless otherwise determined by the Committee,
payment shall be in the form of Sprint common stock,
less the cash amount necessary to pay any taxes due
based on the then current tax law.
10.0 Termination of Employment
10.01 If termination of employment occurs during a
Performance Cycle by reason of death, disability (as
determined under the company's long-term disability
program), or normal retirement (as determined under the
Company's retirement plan), the participant shall be
entitled to prorated award based on Company performance
as of the most recently completed fiscal year for any
plan in which the participant has completed at least
two thirds of the performance period. The Committee
will determine the prorated award under the rules and
regulations it establishes. The award will be paid
when all other payments are made at the end of the
cycle. If termination of employment occurs for reasons
other than death, disability or normal retirement, all
the participant's rights and interests under this Plan
will be canceled and forfeited, unless determined
otherwise by the Committee.
11.0 Non-Transferability
11.01 A participant's rights and interests under the
Plan may not be sold, pledged, assigned or transferred
in any manner other than by will or by the laws of
descent and distribution except as provided by the Plan
or specified by the Committee.
12.0 Tax Withholding
12.01 The Company shall have the right to deduct from
all awards any taxes required by law to be withheld
with respect to such awards.
13.0 Continuance of Employment
13.01 Nothing under this Plan nor any action taken
because of the Plan will be construed as giving any
employee any right to be retained in the Company's
employ.
14.0 Amendment and Termination
14.01 The Board, at any time, may terminate, and at any
time, and in any respect, may amend or modify, the
Plan.
15.0 Legal Requirements
15.01 The designation of participation and any
opportunity in the Plan, together with the award of the
Plan payout will be subject to all applicable federal,
state and local laws, rules and regulations.
15.02 The Plan, and all related provisions, shall be
construed in accordance with and governed by the laws
of the State of Kansas.
Exhibit (10)(o)
SPRINT CORPORATION
KEY MANAGEMENT BENEFIT PLAN
This Plan has been established for the benefit of certain
key executives of Sprint Corporation and its subsidiaries, in
order to retain their services and encourage them to continue the
increasing profitability of the Company.
Section 1. Definitions
The following terms shall have the meaning set forth below:
(a) "Base Salary" means the highest annual salary of a
Participant during the last five years immediately preceding the
participant's death or retirement, as applicable. "Base Salary"
shall include amounts deferred under the Sprint Retirement
Savings Plan and the Sprint Executive Deferred Compensation Plan,
but shall not include incentive payments, bonuses, supplemental
unemployment benefits, contributions to any profit sharing or
other qualified plan, reimbursements of moving expenses or other
expenses, or disability payments. The Compensation Committee
shall determine whether a particular item of income constitutes
Base Salary if a question arises.
(b) "Beneficiary" means the person or persons entitled
under Section 5 to receive a Survivor Benefit after a
Participant's death.
(c) "Company" means Sprint Corporation.
(d) "Compensation Committee" means the Organization and
Compensation Committee of the Company's Board of Directors.
(e) "Key Executive" means a key employee of Company or its
subsidiaries so designated by the Chief Executive Officer of the
Company.
(f) "Participant" means a present or former Key Executive
on whose account a Survivor Benefit will be payable under Section
3.
(g) "Participation Agreement" means a written agreement,
together with a form of Benefit Election, in form and substance
satisfactory to the Company, by which a Participant in the Plan
agrees to retire from employment with the Company or subsidiary
no later than the month following the date on which the
Participant attains age 65.
(h) "Plan" means this Key Management Benefit Plan as
amended from time to time.
(i) "Survivor Benefit" means a benefit payable under
Section 3 of this Plan.
Section 2. Participation
The Chief Executive Officer of the Company, with the approval of
the Compensation Committee, shall designate from time to time the
Key Executives who may become Participants in this Plan. A Key
Executive shall become a Participant in the Plan only after
signing a Participation Agreement. A Beneficiary shall be
eligible for benefits only as hereinafter provided.
Section 3. Survivor Benefit
(a) If a Participant's employment with Company or
subsidiary end because of his death while he is a Key Executive,
his Beneficiary shall receive an annual Survivor Benefit equal to
25% of the Participant's Base Salary. This annual benefit shall
be payable for a period of 10 years.
(b) If a Participant (i) remains a Key Executive until age
60, and retires or terminates employment no later than the month
after the date on which the Participant attains age 65, or (ii)
becomes disabled and qualifies for long-term disability benefits
under the Company's Long-Term Disability Insurance Plan, or (iii)
elects to retire before age 65 and qualifies to receive early
retirement benefits under the Company's pension plan, then his
Beneficiary shall receive upon his death a Survivor Benefit equal
to 300% of the Participant's Base Salary; provided, the Survivor
Benefit for a Participant electing early retirement under (iii)
above shall be reduced 10% per year of attained age prior to age
60, e.g., to 270% of Base Salary for retirement at age 59, and to
150% of Base Salary for retirement at age 55. This Survivor
Benefit shall be paid in the manner provided in Section 4(b)
and/or Section 4(c).
(c) If a Participant does not satisfy the conditions of
Section 3(a) or 3(b), no Survivor Benefit shall be payable on his
account.
Section 4. Payment of Survivor Benefit
(a) The Survivor Benefit under Section 3(a) shall be
payable in equal annual installments, commencing on the first day
of the second month following the Participant's death.
(b) The Survivor Benefit described in Section 3(b) shall
normally be paid in a lump sum. However, a Participant may elect
in the Participation Agreement an installment method of payment
and the period of such payments, provided that in all events the
Survivor Benefit shall be payable over a period of not less than
2 years but not more than 20 years. If a Participant elects to
have the Survivor Benefit pay in installments, the actuaries then
servicing the Company shall determine the present value using an
assumed interest rate of 6 1/2% of the payment method so elected,
and the amount of the Survivor Benefit shall be revised
accordingly, so that the value of the Survivor Benefit,
determined at the time of the Participant's death, is the same as
if the
Beneficiary received a lump sum.
(c) A Participant, with the consent of the Company, may
elect, prior to attaining age 60 and at least 13 months prior to
retirement, to receive the Survivor Benefit described in Section
3(b) in the form of a supplemental retirement benefit. A
Participant may elect in the Participation Agreement to receive,
upon satisfying the requirement of clause (i) or (iii) of Section
3(b), the Survivor Benefit in the form of a supplemental
retirement benefit. The Company may determine to pay a disabled
Participant's Survivor Benefit in the form of a supplemental
retirement benefit within 60 days of the commencement of the
Participant's disability. Such determination shall be final and
conclusive on all parties. The Participant may elect in the
Participation Agreement to receive the supplemental retirement
benefit either (i) in a lump sum, (ii) in annual installments
over a period not to exceed 30 years, or (iii) in the form of a
single life annuity, or (iv) in any combination of the forms set
forth in Section 4(c)(i)-(iii) (to be elected as a percentage of
the total benefit). The actuaries then servicing the Company
shall determine the present value using an assumed interest rate
of 6 1/2% of the payment method elected by the Participant, and
the amount of the Survivor Benefit shall be revised accordingly,
so that the value of the supplemental retirement benefit
determined at the time of the Participant's retirement, is the
same as if the Participant received the Survivor Benefit in a
lump sum.
(d) If a Participant fails to make the election described
in Section 4(c) in the Participation Agreement, the Survivor
Benefit shall be paid as provided in Section 4(b).
Section 5. Beneficiaries
(a) A Participant may designate one or more Beneficiaries
to receive a Survivor Benefit payable under this Plan.
Beneficiaries shall be designated only upon forms made available
by or satisfactory to the Company, and filed by the Participant
with the Company, as the Company may require.
(b) At any time prior to his death, a Participant may
change his Designation of Beneficiary by filing a substitute
Designation of Beneficiary with the Company in accordance with
Section 5(a) above.
(c) In the absence of an effective Designation of
Beneficiary, or if all persons so designated shall have
predeceased the Participant or shall have died before the
Survivor Benefit shall have been fully distributed, the balance
of the Survivor Benefit shall be paid to the Participant's
surviving spouse or, if none, to the Participant's issue per
stirpes or, if no issue to the executor or administrator of the
Participant's estate.
(d) If a Survivor Benefit is payable to a minor or person
declared incompetent or to a person incapable of handling the
disposition of his property, the Company may pay such Survivor
Benefit to the guardian, legal representative or person having
the care and custody of such minor, incompetent or person. The
Company may require proof of incompetency, minority, incapacity
or guardianship as it may deem appropriate prior to distribution
of the Survivor Benefit. Such distribution shall completely
discharge the Company from all liability with respect to such
benefit.
Section 6. Unfunded Plan
(a) Benefits to be provided under this Plan are unfunded
obligations of the Company. Nothing contained in this Plan shall
require the Company to segregate any monies from its general
funds, to create any trust, to make any special deposits, or to
purchase any policies of insurance with respect to such
obligations. If the Company elects to purchase individual
policies of insurance on one or more of the Participants to help
finance its obligations under this Plan, such individual policies
and the proceeds therefrom shall at all times remain the sole
property of the Company and neither the Participants whose lives
are insured nor their Beneficiaries shall have any ownership
rights in such policies of insurance.
(b) No Participant shall be required or permitted to make
contributions to this Plan.
Section 7. Plan Administration
(a) The Company through its Compensation Committee, shall
be the Plan Administrator of this Plan and shall be solely
responsible for its general administration and interpretation and
for carrying out the respective provisions hereof, and shall have
all such powers as may be necessary to do so. The Company may
from time to time establish rules for the administration of this
Plan and the transaction of its business. Any action by the
Company shall be final, conclusive and binding on each
Participant and all persons claiming by, through or under any
Participant, unless a written appeal is received by the Company
within 60 days of the disputed action. The appeal will be
reviewed by the Compensation Committee and the decision of the
Compensation Committee shall be final, conclusive and binding on
the Participant and on all persons claiming by, through or under
the Participant.
(b) The Company may employ or engage such agents,
accountants, actuaries, counsel, other experts and other persons
as it shall deem necessary or desirable in connection with the
interpretation and administration of this Plan. The Company
shall be entitled to rely upon all certificates made by an
accountant or actuary selected by Company. The Company and its
committees, officers, directors and employees shall not be liable
for any action taken, suffered or omitted by them in good faith
in reliance upon the advice or opinion of any counsel,
accountant, actuary or other expert and all action so taken,
suffered or omitted shall be conclusive upon each of them and
upon all other persons interested in this Plan.
(c) The Company may require proof of the death of any
Participant and evidence of the right of any person to receive
any Survivor Benefit.
(d) Claims under this Plan shall be filed with the Company
on its prescribed forms.
(e) The Company shall withhold from benefits paid under
this Plan any taxes or other amounts required to be withheld by
law.
Section 8. Miscellaneous
(a) No Survivor Benefit shall be subject in any manner to
alienation, sale, transfer, assignment, pledge or encumbrance of
any kind. Any attempt to alienate, sell, transfer, assign,
pledge, or otherwise encumber any Survivor Benefit, whether
presently or hereafter payable, shall be void. Except as
required by law, no Survivor Benefit payable under this Plan
shall in any manner be subject to garnishment, attachment,
execution, or other legal process, or be liable for or subject to
the debts or liability of any Participant or Beneficiary.
(b) Notwithstanding any Plan provision to the contrary, the
Board of Directors of the Company shall have the right to amend,
modify, suspend, or terminate this Plan at any time. No
amendment, suspension or termination shall adversely affect the
right of a Participant or Beneficiary to receive a benefit
payable as the result of the death, termination of employment,
retirement or disability of a Participant which occurred prior to
the effective date of such amendment, suspension or termination.
(c) Nothing contained in this Plan shall be construed as a
contract of employment between any Participant and the Company or
to suggest or create a right in any Participant to be continued
in employment as a Key Executive or other employee of the
Company.
(d) The Company may impose such other lawful terms and
conditions on participation in this Plan as deemed desirable.
(e) The Plan, and any Participation Agreement related
thereto, shall be governed by the laws of the State of Kansas,
without regard to the principles of conflicts of law.
(f) This Plan shall become effective as of March 1, 1985.
Exhibit (10)(v)
CENTEL CORPORATION
CENTEL MANAGEMENT INCENTIVE PLAN
1. Purpose of Plan. The purpose of the Centel Management
Incentive Plan is to:
(a) reward outstanding performance by individuals who
make significant contributions to Company and
profit center results;
(b) reinforce effective teamwork and individual
efforts toward the Company's stated goals;
(c) provide an incentive opportunity incorporating an
appropriate level of risk that will enable the
Company to attract and retain outstanding
executives and managers; and
(d) provide management with the opportunity to acquire
a greater stake in the future of the Company
through stock ownership.
2. Definitions. The following words and phrases have the
respective meanings indicated below unless a different
meaning is plainly implied by the context.
(a) "Administrative Committee" means the Employee
Benefits Committee of Sprint.
(b) "award" or "incentive award" or "original
incentive award" means the amount approved by the
Board Committee to be paid in the form of cash to
an eligible employee pursuant to this Plan.
(c) "Board Committee" means the Organization and
Compensation Committee of the Board of Directors
of Sprint.
(d) "business group" means each of the major lines of
business in which the Company operates (i.e.
telephone, cellular, etc.). A business group is
also considered a profit center relative to the
business group staff.
(e) "business group staff" means the group of
individuals with discrete functional
responsibilities who are not associated with any
specific profit center but who service an entire
business group.
(f) "Common Stock" or "stock" or "shares" means shares
of common stock of Sprint. Notwithstanding any
other provision of this Plan, the aggregate number
of shares of Common Stock which may be distributed
pursuant to this Plan shall not exceed 120,000
shares, as may be adjusted from time to time in
accordance with Section 13.
(g) "Company" means Centel Corporation, a Kansas
corporation, and its successors.
(h) "corporate staff" means the groups of individuals
with discrete functional responsibilities who are
not associated with any specific business group or
profit center but who service the entire Company.
(i) "date of award" means the date on which incentive
awards are approved by the Board Committee.
(j) "eligible employee" means any full time management
employee of the Company or of a subsidiary of
Centel who is in a position designated as eligible
to receive an incentive award under this Plan.
(k) "Exchange Act" means the Securities Exchange Act
of 1934, as amended. References to a particular
section of, or rule under, the Exchange Act shall
include references to successor provisions.
(l) "Insider" means any eligible employee who is
subject to Section 16 of the Securities Exchange
Act of 1934 with respect to the equity securities
of Sprint.
(m) "market value" of Common Stock on any date means
the closing price of the Common Stock on that date
on the New York Stock Exchange Composite
Transactions List, as subsequently reported in The
Wall Street Journal, or if no sale of the Common
Stock shall have been made on that date, such
closing price on the next preceding date on which
there was a sale.
(n) "participant" means any person who has received an
incentive award pursuant to this Plan.
(o) "Plan" means the plan set forth in this Centel
Management Incentive Plan, as it may be amended
from time to time, and known as the "Centel
Management Incentive Plan".
(p) "profit center" means an organization or group of
organizations with a discrete profit and loss
responsibility.
(q) "SEC" means the Securities and Exchange
Commission.
(r) "Sprint" means Sprint Corporation, a Kansas
corporation, and its successors.
(s) "subsidiary" means any corporation of which fifty
percent or more of the voting stock is owned,
directly or indirectly, by the Company or Sprint.
(t) "target incentive award" means the amount that may
be paid to a participant if financial and
individual goals are met in a given plan year.
3. Administration of Plan.
(a) This Plan shall be administered by the Board
Committee.
(b) The Board Committee shall have sole authority and
discretion, consistent with the provisions of this
Plan, to:
(1) approve management positions eligible to
participate in the Plan;
(2) approve at the beginning of each year the
performance measures and target amounts for
each business group and the Company as a
whole as well as the weighting of each of the
measures, the payout range, and leveraging,
if any, to be used in calculating the
incentive awards;
(3) determine and approve the original incentive
awards; and
(4) make all decisions concerning which Insiders
are to become participants, and the timing,
pricing, and amount of awards to Insiders
under the Plan.
(c) The Board Committee shall have full authority and
discretion to adopt rules and regulations to carry
out the purposes and provisions of this Plan. The
Board Committee's interpretation and construction
of any provision of this Plan shall be binding and
conclusive, unless otherwise determined by the
Board of Directors.
4. Administrative Committee.
(a) The Administrative Committee shall:
(1) construe this Plan (subject to Board
Committee interpretations) and make equitable
adjustments for any mistakes, omissions, or
errors made in the administration of this
Plan;
(2) adopt such rules and regulations and
prescribe or approve the forms as may be
deemed reasonably necessary for the proper
and efficient administration of this Plan
consistent with its purposes;
(3) enforce this Plan in accordance with its
terms and with the rules and regulations
adopted for the Plan; and
(4) do all other acts which in the Administrative
Committee's reasonable judgment are necessary
or desirable for the proper and advantageous
administration of this Plan consistent with
its purposes.
(b) The Administrative Committee shall have authority
to delegate any or all of its duties to the
Benefit Administrative Committee of Sprint.
(c) The Administrative Committee will make decisions
according to a majority vote and maintain a written
record of its decisions and actions, but no member of
the Administrative Committee shall act on any matter
that has particular reference to such member's own
interest under this Plan.
(d) All decisions and actions of the Administrative
Committee shall be binding and conclusive, unless
otherwise determined by the Board Committee.
5. Overview of Plan Operation.
(a) Based on the achievement of performance measures
which are approved at the beginning of each plan
year, the percentage achievement of target will be
calculated.
(b) The head of each profit center, business group
staff or corporate staff group will recommend
individual incentive awards for each eligible
employee based on the achievement of individual
objectives and management performance.
(c) All incentive awards are subject to the approval
of the Board Committee.
(d) No original incentive awards will be awarded for
calendar years after 1993.
6. Establishment of Target Incentive Awards.
(a) The Board Committee shall, in its sole discretion,
determine and approve all target incentive awards
for Insiders. The CEO will determine the target
incentive award for the other members of the
Administrative Committee and other eligible
employees in executive positions (other than
Insiders) with the approval of the Board
Committee.
(b) Target incentive awards for all other eligible
employees will be established according to current
salary planning practice and will be approved by
the CEO.
(c) Target incentive awards will be adjusted as
eligible employees move in and out of individual
profit centers, business group staffs or corporate
staff groups or as individuals are assigned to
positions with different target incentive awards
within those groups. Generally, the following
conventions will apply as these changes occur
(when an individual becomes an eligible employee
on or through the fifteenth day of the month, the
months will be calculated as of the first of that
month; when an individual becomes an eligible
employee after the fifteenth day of the month, the
months will be calculated as of the first of the
following month):
(1) individuals who are eligible employees will
have their target incentive award prorated
proportionately by the number of full
calendar months they were an eligible
employee (i.e. a promotion effective 4/16/XX
would qualify that individual to be
considered for 8/12 of his or her target
incentive award for that year; a promotion
effective 9/15/XX would qualify that
individual to be considered for 4/12 of his
or her target incentive award for that year).
(2) individuals who are assigned to a different
award eligible position will have target
incentive awards in each position prorated
based on the number of months in each
position consistent with the conventions
outlined in this Section.
7. Establishment of Goals.
(a) Individual goals will be determined by the
eligible employee and his or her immediate
supervisor.
(b) Performance measures will be established annually
at both the consolidated and business group
levels. These measures will be approved by the
Board Committee. Specific target amounts for each
business unit and the Company as a whole will also
be approved by the Board Committee.
(c) The Board Committee may, at any time prior to the
approval of the incentive awards, approve a change
to the target amounts for the performance measures
if, in its judgment, such a change is desirable in
the interests of equitable treatment of the
participants and the Company as a result of
extraordinary or non-recurring events, changes in
applicable accounting rules or principles, changes
in the Company's method of accounting, changes in
applicable law, changes due to consolidation,
acquisitions, divestitures, reorganization, stock
split or stock dividends, combination of shares or
other changes in the Company structure or shares,
major changes in business strategy, or any other
change of a similar nature to any of the
foregoing.
8. Determining Incentive Awards.
(a) The achievement of each performance measure will
stand independently and the weighting, payout
range and leveraging, if any, will be established
for each business group and the Company as a whole
and will be approved by the Board Committee.
(b) The Board Committee will review business group
operational summary reports along with the
performance of the profit centers, business groups
and the Company as a whole and determine the
percentage of the target incentive awards to be
awarded to participants in each business group and
corporate staff group. This determination will be
based on consolidated financial results and the
extent to which profit centers and business groups
met their financial goals.
(c) The Board Committee reserves the right to give
special consideration to individual profit centers
or business groups if appropriate.
(d) The Board Committee is authorized to make
adjustments for unusual or extraordinary
circumstances which in its sole judgment are
appropriate to the purposes of the Plan.
9. Determining Individual Incentive Awards.
(a) Each eligible employee's immediate supervisor
will, through lines of organization, recommend the
level of award to be paid to such eligible
employee. This recommendation will be based on
financial performance and the supervisor's
judgment of the eligible employee's achievement of
his or her individual goals and contribution to
the profit center or business group performance.
An eligible employee's recommended award may
exceed his or her individual target incentive
award.
(b) The Board Committee will determine and approve all
incentive awards. The Board Committee may, at its
sole discretion, raise or lower the recommended
incentive award of any eligible employee on the
basis of the difficulty of the eligible employee's
incentive goals, changes in circumstances or
priorities during the year, or any other factors
it deems relevant.
10. Payment of Incentive Awards.
(a) Incentive awards will be paid before the close of
the first quarter, if practical, following the
year to which the award relates.
(b) The original incentive awards for calendar year
1993 will be paid exclusively in cash.
(c) Certain participants received all or a portion of
their award for 1992 in shares of Common Stock
(the "original incentive shares") and received a
matching incentive award of shares of Common
Stock. To encourage retaining the original
incentive shares as an investment, Sprint will,
twelve (12) months after issuance of such shares,
provide as "retention shares" a number of shares
of Common Stock equal to twenty-five percent (25%)
of the number of original incentive shares (the
award of such retention shares to be known as a
"retention incentive award") if the following
conditions are met:
(1) the participant is still an
employee of Sprint or one of its
subsidiaries at the end of the
twelve month period; and,
(2) the participant has not disposed of
the original incentive shares
through the end of the twelve month
period. The original shares must
be registered exactly the same way
they were registered at the time of
issuance unless a new registration
is called for by circumstances
beyond the control of the
participant.
In the event that twenty-five percent of the
number of original incentive shares is not a
whole number, the participant will receive
cash in lieu of a fractional share of Common
Stock based on the market value of the
fractional share of Common Stock on the date
that is twelve months after the date of
issuance of the original incentive shares.
(d) (i) "Six Month Advance Election" means an
election made by an Insider to receive an
award in the form of stock which (A) becomes
effective six months after the date on which
such Six Month Advance Election was made, and
(B) may be revoked only by making a new Six
Month Advance Election. The new Six Month
Advance Election may, in turn, be revoked in
accordance with this clause (i).
(ii) Once a Six Month Advance Election has
become effective with respect to an original
incentive award or matching incentive award
or a Tax Withholding Election (as defined in
paragraph (f) of this Section 10), such Six
Month Advance Election shall remain effective
with respect to all subsequent original
incentive awards, matching incentive awards
or Tax Withholding Elections, as the case may
be, until such Election is revoked in
accordance with clause (i) of this paragraph
(d).
(e) Except where a Tax Withholding Election has been
made by an Insider, the federal, state and local
income tax withholding and other tax obligations
associated with receipt of any retention incentive
award will be deducted from the original incentive
award of such participant for calendar year 1993,
provided that the original incentive award is
sufficient to cover all such taxes as well as
taxes associated with receipt of the original
incentive award; otherwise, Sprint shall retain
from the retention shares a sufficient number of
shares of Common Stock, valued at the market value
of the Common Stock on the date that is twelve
months after the date of issuance of the original
incentive shares, to satisfy the taxes associated
with receipt of the retention shares.
(f) A participant who is an Insider may elect to
authorize Sprint to retain from the retention
shares otherwise to be distributed whole shares of
Common Stock to satisfy federal, state and local
income tax withholding and FICA obligations
associated with receipt of any retention incentive
award of such Insider (such election, a "Tax
Withholding Election") provided that:
(i) such election becomes effective
during the period beginning on the
third business day following the
date of release of quarterly or
annual financial data specified in
SEC Rule 16b-3(e)(1)(ii) and ending
on the twelfth business day
following such date (such period, a
"Quarterly Window Period" and such
election, a "Quarterly Window
Period Election") and is subject to
the approval of the Board Committee
in its sole discretion (a
"Quarterly Window Period
Election"); or
(ii) such election is a Six Month
Advance Election.
(g) A Quarterly Window Period Election made pursuant
to paragraph (f) of this Section 10:
(i) becomes effective when made, if
made during a Quarterly Window
Period, or as of the first day of
the next Quarterly Window Period,
if not made during a Quarterly
Window Period.
(ii) may be revoked by making a new
Quarterly Window Period Election
which (A) changes the previous
Quarterly Window Period Election,
and (B) becomes effective (in
accordance with clause (i) of this
paragraph (g) before the date on
which the retention shares are to
be distributed.
(iii) once it has become effective,
it shall remain in effect with
respect to all subsequent tax
withholding until revoked in
accordance with clause (ii) of this
paragraph (g).
11. Limitation on Vested Interest. The earning of
incentive awards by eligible employees under this Plan
is within the sole discretion of the Company in
accordance with the terms of this Plan, and no eligible
employee, participant or other person has any legal
right to or vested interest in an incentive award under
this Plan prior to the actual payment to the eligible
employee of an incentive award.
12. Indemnification of Committee Members. In addition to
such other rights of indemnification as any person may
have as a director, officer or member of the Board
Committee, Administrative Committee or the Benefit
Administrative Committee, each member of the Committees
shall be indemnified by the Company against the
reasonable expenses, including attorney's fees,
actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which such
person may be a party by reason of any action taken or
failure to act under or in connection with this Plan,
and against all amounts paid by such person in
settlement thereof (provided such settlement is
approved by legal counsel selected or approved by the
Company), or paid by such person in satisfaction of a
judgment in any such action, suit or proceeding, except
in relation to matters as to which it shall be adjudged
in such action, suit or proceeding, that such Committee
member is liable for gross misconduct; provided that
within sixty (60) days after the institution of such
action, suit or proceeding, such Committee member shall
in writing offer the Company the opportunity, at its
own expense, to handle and defend the same.
13. Adjustment in Number of Shares. In the event of any
subdivision or combination of the outstanding shares of
Sprint by reclassification or otherwise, or in the
event of the payment of a stock dividend, a capital
reorganization, a reclassification of shares, a
consolidation or merger, or the sale, lease or
conveyance of substantially all the assets of Sprint,
the Board Committee shall make appropriate and
equitable adjustments in the number and kind of shares
with respect to all undistributed retention shares.
Any such adjustment made by the Board Committee shall
be final and binding upon all participants, the
Company, Sprint, and all other interested persons.
14. Compliance with Rule 16b-3. The intent of this Plan is
to qualify for the exemption provided by Rule 16b-3 of
the Exchange Act. To the extent any provision of the
Plan does not comply with the requirements of Rule 16b-
3, it shall be deemed inoperative and shall not affect
the validity of the Plan. In the event Rule 16b-3 is
revised or replaced, the Board Committee may exercise
discretion to modify this Plan in any respect necessary
to satisfy the requirements of the revised exemption or
its replacement.
15. Non-transferability. No right awarded hereunder is
assignable or transferable other than by will or the
laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the
Internal Revenue Code of 1986, as amended.
16. Amendment and Discontinuance. The Board of Directors
of the Company may alter, suspend or terminate this
Plan. Any such alteration or amendment of this Plan
shall be subject to the approval of the Company's
shareholders to the extent required by SEC Rule 16b-3
under the Exchange Act or by the listing requirements
of any national securities exchange upon which the
Common Stock is listed.
Exhibit (10)(w)
CENTEL CORPORATION
CENTEL STOCK OPTION PLAN
1. Purpose of Plan. The purpose of the Centel Stock Option
Plan (the Plan) is to promote the long-term financial
interests of the Company and its subsidiaries by:
(a) providing an incentive for key management employees to
maximize the long-term value of Centel Common Stock and
otherwise act in the best interest of Centel
shareowners;
(b) providing management with the opportunity to acquire a
greater stake in the future of the Company and its
subsidiaries through stock ownership;
(c) attracting, retaining and rewarding highly qualified
executives and managers who will contribute in
exceptional ways to the long-term financial success of
the Company and its subsidiaries; and
(d) tying compensation of key management employees more
closely with the performance of Common Stock.
2. Definitions. The following words and phrases have the
respective meanings indicated below unless a different
meaning is plainly implied by the context.
(a) "Administrative Committee" means a committee of
management employees which, pursuant to Section 4, has
been appointed by the Board Committee and authorized to
assume designated responsibilities and perform
designated functions.
(b) "award" means the grant of stock options or stock
appreciation rights (SARs) to an eligible employee
pursuant to this Plan.
(c) "Board Committee" means the Organization and
Compensation Committee of the Board of Directors of
Sprint.
(d) "Common Stock" or "stock," or "shares" means shares of
common stock of Sprint.
(e) "Company" means Centel Corporation, a Kansas
corporation and its successors.
(f) "date of award" means the date designated by the Board
Committee for the award of stock options or SARs which
have been approved by the Board Committee to be awarded
pursuant to this Plan.
(g) "eligible employee" means any management employee of
the Company or of a subsidiary of Sprint who is
designated by the Board Committee as a key employee
eligible to receive an award of options or SARs under
this Plan.
(h) "Exchange Act" means the Securities Exchange Act of
1934. References to a particular section or, or rule
under, the Exchange Act shall include references to
successor provisions.
(i) "Insider" means any participant who is subject to
Section 16 of the Exchange Act with respect to the
equity securities of Sprint.
(j) "letter of agreement" means a letter from the Board
Committee, or from the Administrative Committee or
Administrative Committee member acting on behalf of the
Board Committee, to an employee, indicating that the
employee is a participant in the Centel Stock Option
Plan, the number of shares subject to option or SAR to
be granted to the participant, the option price, the
date or dates when such option or SAR may be exercised,
and other provisions consistent with the Plan.
(k) "market value" of Common Stock on any date means the
closing price of the Common Stock on that date on the
New York Stock Exchange Composite Transactions list, as
subsequently reported in The Wall Street Journal, or,
if no sale of the Common Stock shall have been made on
that date, such closing price on the next preceding
date on which there was a sale.
(l) "Non-Insider" means any participant who is not an
Insider.
(m) "participant" means any person who has been awarded
options or SARs pursuant to this Plan.
(n) "Plan" means the plan set forth in this Centel Stock
Option Plan, as it may be amended from time to time,
and known as the "Centel Stock Option Plan."
(o) "retirement" means cessation of employment with the
Company, Sprint and all subsidiaries after a
participant has attained age fifty-five under
circumstances that would result in the participant
having a vested interest under the Centel Retirement
Benefit Plan or successor Sprint plan if the
participant were a participant in that plan.
"normal retirement" means retirement after a
participant has attained age sixty-five; "early
retirement" means retirement before a participant has
attained age sixty-five.
(p) "SEC" means the Securities and Exchange Commission.
(q) "Sprint" means Sprint Corporation, a Kansas
corporation, and its successors.
(r) "stock appreciation right" or "SAR" is a right granted
to a participant to receive a payment in cash or in
shares of Common Stock or in a combination of cash and
shares equal in value to the increase in the market
value of the Common Stock from the date of grant of
such SAR to the date of exercise with respect to the
shares represented by such SAR. The election to
receive either cash or shares, or a combination of cash
and shares, is made by the participant.
(s) "stock option" or "option" is a right granted to a
participant to purchase a designated number of shares
of Common Stock at a stated price for a stated period
of time. The participant may exercise that right
according to Section 8 of the Plan as to all or a
portion of the shares at a specified time or times.
Stock options granted under this Plan are not intended
to qualify as incentive stock options under Internal
Revenue Code Section 422A.
(t) "subsidiary" means any corporation fifty percent or
more of the voting stock of which is owned, directly or
indirectly, by the Company or Sprint.
(u) "tandem grant" means an option and an SAR granted in
combination such that both cover the same shares.
Either the option or the SAR may be exercised for all
or any portion of the shares. By exercising the option
for a given number of shares, the right to exercise the
tandem SAR for that number of shares is canceled and
vice-versa.
(v) "total disability" of a participant means the
participant would be eligible to receive disability
benefits under the Centel Corporation Group Welfare
Plan or similar Sprint plan if the participant were a
participant in that plan.
3. Administration of Plan.
(a) This Plan shall be administered by the Board Committee.
(b) The Board Committee shall have full authority and
discretion to adopt rules and regulations and prescribe
or approve the forms to carry out the purposes and
provisions of this Plan. The Board Committee's
interpretation and construction of any provision of
this Plan or any option or SAR granted hereunder shall
be binding and conclusive, unless otherwise determined
by the Board.
4. Appointment of Administrative Committee.
(a) The Board Committee may appoint an Administrative
Committee to:
(1) construe this Plan and make equitable adjustments
for any mistakes, omissions, or errors made in the
administration of this Plan;
(2) adopt such rules and regulations as may be deemed
reasonably necessary for the proper and efficient
administration of this Plan consistent with its
purposes;
(3) enforce this Plan in accordance with its terms and
with the rules and regulations adopted for the
Plan; and
(4) do all other acts which in the Administrative
Committee's reasonable judgment are necessary or
desirable for the proper and advantageous
administration of this Plan consistent with the
Plan's purposes.
(b) No member of the Administrative Committee who is a
participant in the Plan shall act on any matter that
has particular reference to such member's own interest
under this Plan.
5. Eligibility. The Board Committee shall from time to time
determine the key management employees of the Company
(including officers and directors of the Company who are
also employees) and subsidiaries who shall be participants
in this Plan.
6. Shares Subject to Plan. Subject to adjustment as provided
in Section 21, the aggregate number of shares subject to
options or SARs granted by the Board Committee under this
Plan shall be less than 2,534,450 shares of Common Stock of
Sprint, par value $2.50 per share (the shares), which may be
treasury shares reacquired by Sprint or authorized and
unissued shares, or a combination of both.
7. Option Price. The option price per share under each option
granted by the Board Committee shall be not less than 100%
of the market value per share on the date an option is
granted, but in no event shall the option price be less than
the par value per share.
8. Exercise of Options.
(a) Terms. Each option granted under this Plan shall be
exercisable on the dates and for the number of shares
as shall be provided in a letter of agreement between
the Company and the participant evidencing the option
granted by the Board Committee and the terms thereof.
However, subject to Sections 13, 14, 15, 16, and 17, no
option shall become exercisable until six months after
its date of award.
(b) Exercise and Payment of Exercise Price. Shares shall
be issued to the participant pursuant to the exercise
of an option only upon receipt by Sprint from the
participant of written notice of exercise, specifying
the number of shares with respect to which the option
is being exercised, accompanied by payment in full
either in cash or by a single exchange of shares of
Common Stock of Sprint previously owned by the
optionee, or a combination of both, in an amount or
having a combined value equal to the aggregate purchase
price for the shares subject to the option or portion
thereof being exercised. The value of the previously
owned shares of Common Stock exchanged in full or
partial payment for the shares purchased upon the
exercise of an option shall be equal to the aggregate
market value, as defined in Section 2, of such shares
on the date of the exercise of such option. Previously
owned shares acquired via prior exercise of a stock
option granted under this Plan shall not be accepted in
full or partial payment for shares purchased upon the
exercise of an option unless such previously owned
shares have been held by the participant for at least
six months subsequent to such prior exercise.
(c) Effect on Tandem Grants. If the option was granted in
a tandem grant (as defined in Section 2) with an SAR,
then exercise of such option with respect to a stated
number of shares shall cancel the right to exercise the
tandem SAR with respect to the same number of shares.
(d) Tax Withholding. Participants may elect to deliver to
Sprint (or authorize Sprint to retain from the shares
purchased by such exercise) whole shares of Common
Stock (or cash) to satisfy Sprint's obligation, if any,
to withhold federal, state and local income tax
required to be withheld in respect of such exercise
("Tax Withholding Obligations"), provided that Insiders
may not elect to deliver shares to Sprint, or authorize
Sprint to retain shares purchased by the option
exercise, to satisfy Tax Withholding Obligations unless
(i) such election becomes effective during the period
beginning on the third business day following the date
of release of the quarterly or annual financial data
specified in SEC Rule 16b-3(e)(1)(ii) and ending on the
twelfth business day following such date (such period,
a "Quarterly Window Period" and such an election, a
"Quarterly Window Period Election"), and (ii) the
option is exercised during a Quarterly Window Period.
Any such election by an Insider shall be subject to the
approval of the Board Committee in its sole discretion
at any time after such election.
(e) Quarterly Window Period Elections.
(i) A Quarterly Window Period Election made
pursuant to paragraph (d) of this Section 8 or
paragraphs (c) or (e) of Section 9 becomes
effective when made, if made during a Quarterly
Window Period, or as of the first day of the next
Quarterly Window Period, if not made during a
Quarterly Window Period.
(ii) A Quarterly Window Period Election may be
revoked by making a new Quarterly Window Period
Election which (A) changes the previous Quarterly
Window Period Election and (B) becomes effective
(in accordance with Section 8(e)(i)) before the
exercise of the option or SAR, as applicable, to
which the new election relates. The new Quarterly
Window Period Election may, in turn, be revoked in
accordance with this clause (ii).
(iii) A Quarterly Window Period Election may be
either a specific election or a standing election.
A specific election is effective only with respect
to the first exercise of options or SARs, as
applicable, after the election becomes effective.
A standing election that has become effective
remains effective with respect to all subsequent
exercises of options or SARs, as applicable, until
the election is revoked in accordance with Section
8(e)(ii).
9. Exercise of SARs.
(a) Terms. Each SAR granted under this Plan shall be
exercisable on the dates and for the number of shares
as shall be provided in a letter of agreement between
the Company and the participant evidencing the SAR
granted by the Board Committee and the terms thereof.
However, subject to Sections 13, 14, 15, 16, and 17, no
SAR shall become exercisable until six months after its
date of award.
(b) Exercise by Non-Insider Participants. Cash or shares
(at the election of the Non-Insider) shall be issued to
the Non-Insider pursuant to the exercise of an SAR upon
the receipt by Sprint from the Non-Insider of written
notice that an SAR is being exercised.
(c) Exercise by Insider Participants. An Insider may
exercise an SAR by delivery to Sprint of written notice
of exercise, which notice includes, or is preceded by,
the Insider's election to receive cash or stock. If
the Insider elects to receive Common Stock, the SAR may
be exercised only pursuant to a Quarterly Window Period
Election; provided, however, that an Insider's election
to receive stock may be made at any time if the Board
Committee determines, with the advice of counsel, that
the implementation of this proviso does not require
shareholder approval pursuant to SEC Rule 16b-3(b). If
the Insider elects to receive cash, (i) such election
must be a Quarterly Window Period Election and (ii) the
SAR may be exercised only during a Quarterly Window
Period. Any such election by an Insider to receive
cash shall be subject to the approval of the Board
Committee in its sole discretion at any time after such
election.
(d) Effect on Tandem Grants. If an SAR was granted in a
tandem grant (as defined in Section 2) with an option,
then exercise of such SAR with respect to a stated
number of shares shall cancel the right to exercise the
tandem option with respect to the same number of
shares.
(e) Withholding. Participants may elect to have all or a
portion of the cash or shares to be received from
exercising an SAR retained by Sprint in order to
exercise a stock option, or to satisfy Tax Withholding
Obligations in respect of an exercise of an option or
SAR; provided, however, that an Insider may elect to
have all or a portion of the shares to be received from
exercising an SAR retained by Sprint to satisfy Tax
Withholding Obligations only if (i) such election is a
Quarterly Window Period Election, and (ii) the SAR is
exercised during a Quarterly Window Period. Any such
election by an Insider that relates to the satisfaction
of Tax Withholding Obligations shall be subject to the
approval of the Board Committee in its sole discretion
at any time after such election.
10. Term of Option or SAR. Each option or SAR granted hereunder
shall be exercisable for not more than ten years from the
date it is granted, after which the unexercised portion
thereof shall expire.
11. Nontransferability of Option. No option or SAR granted
under this Plan shall be transferable except by will or the
laws of descent or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of
1986. Each such option and SAR shall be exercisable during
the participant's lifetime only by the participant.
12. Termination of Employment. Upon termination of employment
of a participant for any reason other than retirement, total
disability, death, sale or disposition of a business unit,
or change in control (as defined in Section 17), all options
and SARs previously granted to the participant, whether
exercisable or unexercisable, shall be forfeited and
canceled.
13. Retirement of Participant.
(a) Upon the normal retirement of a participant (after
attaining age sixty-five), all options and SARs
previously granted to the participant shall become
fully exercisable, and may be exercised within a three-
year period following the date of retirement, but in no
event later than ten years from the date of grant of
such options and SARs; provided, however, that an
Insider may not exercise an option or SAR until at
least six months after the date of award of such option
or SAR, as applicable.
(b) Upon the early retirement of a participant (prior to
attaining age sixty-five), the portion of all options
and SARs that the participant is then entitled to
exercise may be exercised within a three-year period
following the date of retirement, but in no event later
than ten years from the date of grant of such options
and SARs.
14. Total Disability of Participant. Upon the total disability
of a participant (as defined in Section 2) all options and
SARs previously granted to the participant shall become
fully exercisable and may be exercised within a one-year
period following the date the participant becomes totally
disabled, but in no event later than ten years from the date
of grant of such options and SARs; provided, however, than
an Insider may not exercise an option or SAR until at least
six months after the date of award of such option or SAR, as
applicable.
15. Death of Participant. Upon the death of a participant, all
options and SARs previously granted to the participant shall
become fully exercisable by the legal representative of the
deceased participant's estate and may be exercised within a
one-year period following the date of the participant's
death, but in no event later than ten years from the date of
grant of such options or SARs.
16. Sale or Disposition of a Business Unit. Upon the
termination of employment of a participant occurring as a
result of the disposition by Sprint of a subsidiary,
division or business unit, the Board Committee, or, except
with respect to Insiders, the Administrative Committee,
acting on behalf of the Board Committee, may determine the
extent to which unexercisable options and SARs shall become
exercisable, and the period of time, if any, following the
date of disposition during which the participant may
exercise such options and SARs; provided, however, than an
Insider may not exercise an option or SAR until at least six
months after the date of award of such option or SAR, as
applicable.
17. Change in Control. Deleted.
18. Committee Discretion in the Event of Termination.
Notwithstanding the provisions of Sections 12, 13, 14, and
15, if, upon termination of employment of the participant
for any reason, the Board Committee, or, except with respect
to Insiders, the Administrative Committee acting on behalf
of the Board Committee, determines that it is in the best
interest of Sprint, it may determine that all or a portion
of the participant's unexercisable options and SARs may
become exercisable, and that all or a portion of the
participant's exercisable options and SARs may be exercised
for a period of time following the date of the participant's
termination of employment, but in no event later than ten
years from the date of grant of such options or SARs.
19. Nonalienation of Benefits. No right or benefit under this
Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge and any attempt to
anticipate, alienate, sell, assign, pledge, encumber or
charge the same shall be void. No right or benefit under
this Plan shall in any manner be liable for or subject to
the debts, contracts, liabilities or torts of the person
entitled to such benefits except such claims as may be made
by the Company, Sprint or any subsidiary. If any
participant or beneficiary hereunder should become bankrupt
or attempt to anticipate, alienate, sell, assign, pledge,
encumber or charge any right or benefit under this Plan,
such right or benefit shall, in the sole discretion of the
Board Committee (or, except with respect to Insiders, the
Administrative Committee acting on behalf of the Board
Committee), cease, and in such event, the Company or Sprint
shall hold or apply the same or any part thereof for the
benefit of such participant or beneficiary, such person's
spouse, children or other dependents, or any of them, in
such manner and in such proportions as the Committee in its
sole discretion shall determine.
20. Indemnification of Committee Members. In addition to such
other rights of indemnification as any person may have as a
director, officer or member of the Board Committee or
Administrative Committee, each member of the Committees
shall be indemnified by the Company against the reasonable
expenses, including attorney's fees, actually and
necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal
therein, to which such person may be a party by reason of
any action taken or failure to act under or in connection
with this Plan, and against all amounts paid by such person
in settlement thereof (provided such settlement is approved
by legal counsel selected or approved by the Company), or
paid by such person in satisfaction of a judgment in any
such action, suit or proceeding, except in relation to
matters as to which it shall be adjudged in such action,
suit or proceeding, that such Committee member is liable for
gross misconduct; provided that within 60 days after the
institution of such action, suit or proceeding, such
Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the
same.
21. Adjustment in Number of Shares and Option Price. In the
event of any subdivision or combination of the outstanding
shares of Sprint by reclassification or otherwise, or in the
event of the payment of a stock dividend, a capital
reorganization, a reclassification of shares, a
consolidation or merger, or the sale, lease or conveyance of
substantially all the assets of Sprint, the Board Committee
shall make appropriate and equitable adjustments in the
number and kind of shares with respect to which all
outstanding options and SARs, or portions thereof then
unexercised, shall be exercisable. Any such adjustment made
by the Board Committee shall be final and binding upon all
participants, Sprint, the Company and all other interested
persons.
22. Compliance with Rule 16b-3. the intent of this Plan is to
qualify for the exemption provided by Rule 16b-3 of the
Exchange Act. To the extent any provision of the Plan does
not comply with the requirements of Rule 16b-3, it shall be
deemed inoperative and shall not affect the validity of the
Plan. In the event Rule 16b-3 is revised or replaced, the
Board Committee, or the Administrative Committee acting on
behalf of the Board Committee, may exercise discretion to
modify this Plan in any respect necessary to satisfy the
requirements of the revised exemption or its replacement.
23. Amendments and Discontinuance. The Board of Directors of
the Company may alter, suspend or terminate this Plan;
provided, however, that no such action shall increase the
term of any option or SAR previously granted, or increase
the number of shares available under the Plan (other than as
provided in Section 21), or reduce the minimum option price
per share as provided in Section 7, and provided further
that no such action shall materially and adversely affect
any outstanding options or SARs without the consent of the
respective participants.
Exhibit (10)(x)
AGREEMENT REGARDING SPECIAL COMPENSATION
AND POST EMPLOYMENT RESTRICTIVE COVENANTS
THIS AGREEMENT made this 20th day of October, 1993, by and
between SPRINT/UNITED MANAGEMENT COMPANY, a Kansas corporation
and subsidiary of Sprint Corporation ("Employer"), and D. WAYNE
PETERSON ("Executive").
W I T N E S S E T H:
WHEREAS, Employer and its parent and affiliates are engaged
in the telecommunications business;
WHEREAS, Executive has expertise, experience and capability
in the business of Employer and the telecommunications business
in general;
WHEREAS, Executive has been, and/or now is serving Employer
as President and Chief Operating Officer, Local Telco Division;
WHEREAS, Employer desires to enter into this Agreement to
provide severance and other benefits for Executive and obtain
Executive's agreements regarding confidentiality and post-
employment restrictive covenants for Employer; and
WHEREAS, Executive is willing to provide such agreements to
Employer.
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which consideration
is mutually acknowledged by the parties, it is hereby agreed as
follows:
1. Recitals.
The recitals hereinbefore set forth constitute an integral
part of this Agreement, evidencing the intent of the parties in
executing this Agreement, and describing the circumstances
surrounding its execution. Said recitals are by express
reference made a part of the covenants hereof, and this Agreement
shall be construed in light thereof.
2. Duties and Responsibilities.
The duties and responsibilities of Executive are and shall
continue to be of an executive nature as shall be required by
Employer in the conduct of its business. Executive's powers and
authority shall include all those presently delegated to him or
such other duties and responsibilities as from time to time may
be assigned to him. Executive recognizes, that during his
employment hereunder, he owes an undivided duty of loyalty to
Employer, and agrees to devote his entire business time and
attention to the performance of said duties and responsibilities
and to use his best efforts to promote and develop the business
of Employer.
3. Employment Term.
Executive's employment may be terminated by either party in
accordance with Sections 5, 6, 7, or 8 herein.
4. Compensation and Benefits.
During employment, Executive shall be entitled to receive a
base annual salary, shall be reimbursed for reasonable expenses
incurred and accounted for in accordance with the policies and
procedures of Employer, and shall be entitled to vacation pay and
other benefits applicable to employees generally, each as may
from time to time be established, amended or terminated. In
addition, upon execution of this Agreement, Executive shall be
awarded ten thousand (10,000) shares of restricted stock as set
forth in a restricted stock agreement of even date herewith,
attached hereto and incorporated herein (the "Restricted Stock
Agreement") and shall be entitled to the Special Compensation set
forth in Section 6 hereof in accordance with the terms of this
Agreement.
5. Termination by Employer: Special Compensation.
At any time, Employer may terminate Executive's employment
for any reason. If Executive's termination is other than
pursuant to Section 6, Executive shall, subject to the other
provisions of this Section 5, be entitled to the following
Special Compensation (as that term is defined in this Section 5)
in lieu of any benefits available under any and all Employer
separation plans or policies. If Executive's termination is
pursuant to Sections 5, 6 or 7, Executive's obligations under
Sections 11, 12, 13, and 14 hereof shall continue.
For purposes of this Agreement, "Special Compensation" shall
consist of:
(a) to continue to receive for a period of eighteen
(18) months from the date of termination (the "Severance
Period") bi-weekly compensation at the rate equal to the bi-
weekly amount of his base annual salary in effect at the
date of termination of employment;
(b) to receive a bonus, based on actual performance
results, up to the target amount, under the Management
Incentive Plan ("MIP") throughout the Severance Period
provided that the amount, if any, payable under such Plan
for the award period including the last day of the Severance
Period shall be pro rated based upon the number of months of
the Severance Period that fall within the award period and
the total number of months in such award period;
(c) to receive an award under the Long Term Incentive
Plan, pro rated based on the Executive's last day worked,
exclusive of any Severance Period, determined in accordance
with the terms of said Plan;
(d) acceleration of vesting of restricted stock in
accordance with the relevant provisions of the Restricted
Stock Agreement;
(e) to continue to receive throughout the Severance
Period any executive medical, dental, life, and qualified or
non-qualified retirement benefits which the Executive was
receiving or was entitled to receive at the time of
termination, except that long term disability and short term
disability benefits cease on the last day worked;
(f) outplacement counseling by a firm selected by
Employer to continue until Executive becomes employed; and
(g) to continue to receive throughout the Severance
Period all applicable executive perquisites (including
automobile allowance, long distance services and all
miscellaneous services) except country club membership dues
and accrual of vacation.
Employer shall pay or cause to be paid the amounts payable
under paragraph (a) above in equal installments, bi-weekly in
arrears, and the amount payable under paragraphs (b) and (c) in
accordance with the terms of the Plans. All payments pursuant to
this Section shall be subject to applicable federal and state
income and other withholding taxes.
In addition to the Special Compensation described above,
Executive shall also be entitled to any vacation pay for vacation
accrued by Executive in the calendar year of termination but not
taken at the time of termination.
In the event Executive becomes employed full time during the
Severance Period, Executive's entitlement to continuation of the
benefits described in paragraph (e) shall immediately cease,
however, Executive shall retain any rights to continue medical
insurance coverage under the COBRA continuation provisions of the
group medical insurance plan by paying the applicable premium
therefor.
The payments and benefits provided for in this Section shall
be in addition to all other sums then payable and owing to
Executive hereunder and, except as expressly provided herein,
shall not be subject to reduction for any amounts received by
Executive for employment or services provided after termination
of employment hereunder, and shall be in full settlement and
satisfaction of all of Executive's claims and demands.
In all events, Executive's right to receive severance and/or
other benefits pursuant to this Section shall cease immediately
in the event Executive is re-employed by Employer or an affiliate
or Executive breaches his Confidential Information Covenant (as
defined in Section 11 hereof), or breaches Sections 12, 13 or 14
hereof. In all cases, Employer's rights under Section 15 shall
continue.
6. Voluntary Resignation by Executive; Termination
for Cause; Total Disability.
Upon termination of Executive's employment by either
Voluntary Resignation, Termination for Cause (as those terms are
defined in this Section 6), or Total Disability, as that term is
defined in the Long Term Disability Plan, Executive shall have no
right to compensation, severance pay or other benefits described
herein but Executive's obligations under Sections 11, 12, 13 and
14 hereof shall continue.
(a) Voluntary Resignation by Executive. At any time,
Executive has the right, by written notice to Employer, to
terminate his services hereunder ("Voluntary Resignation"),
effective as of thirty (30) days after such notice.
(b) Termination for Cause by Employer. At any time,
Employer has the right to terminate Executive's employment.
Termination upon the occurrence of any of the following
shall be deemed termination for cause ("Termination for
Cause"):
(i) Conduct by the Executive which reflects
adversely on the Executive's honesty, trustworthiness
or fitness as an Executive, or
(ii) Executive's willful engagement in conduct
which is demonstrably and materially injurious to the
Employer.
For Termination for Cause, written notice of the
termination of Executive's employment by Employer shall be
served upon Executive and shall be effective as of the date
of such service. Such notice given by Employer shall
specify the act or acts of Executive underlying such
termination.
(c) Total Disability. Upon the total disability of
the Executive, as that term is defined in the Long Term
Disability Plan, Executive shall have no right to
compensation or severance pay described herein but shall be
entitled to long term disability and other such benefits
afforded under the applicable policies and plans.
7. Resignation Following Constructive Discharge.
If at any time, except in connection with a termination
pursuant to Section 5, 6, or 8 Executive is Constructively
Discharged (as that term is defined in this Section 7) then
Executive shall have the right, by written notice to Employer
within sixty (60) days of such Constructive Discharge, to
terminate his services hereunder, effective as of thirty (30)
days after such notice. Executive shall in such event be
entitled to the compensation and benefits as if such employment
were terminated pursuant to Section 5 of this Agreement.
For purposes of this Agreement, the Executive shall be
"Constructively Discharged" upon the occurrence of any one of the
following events:
(a) Executive is removed from his position with
Employer other than as a result of Executive's appointment
to positions of equal or superior scope and responsibility;
or
(b) Executive's targeted total compensation is reduced
by more than 10% (other than across-the-board reductions
similarly affecting all executive officers of Sprint
Corporation).
8. Effect of Change in Control.
In the event that within one year of a Change in Control (as
that term is defined in this Section 8) Executive's employment is
terminated:
(a) by the Employer other than pursuant to Section 6
hereof, or
(b) by Executive pursuant to Section 7 hereof,
then Executive shall be entitled to the Special Compensation
described in Section 5 and shall be bound by Section 11, but
shall not have any continuing obligations under Sections 12, 13,
and 14, except as otherwise required by common law or statute.
For purposes of this Agreement, a "Change in Control" shall
be deemed to have occurred if:
(i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act")) other than a trustee or other fiduciary
holding securities under an employee benefit plan of Sprint
Corporation ("Sprint") or any of its affiliates, and other
than Sprint or a corporation owned, directly or indirectly,
by the stockholders of Sprint in substantially the same
proportions as their ownership of stock of Sprint, is or
becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
securities of Sprint representing 20% or more of the
combined voting power of Sprint's then outstanding
securities, or
(ii) during any period of two consecutive years (not
including any period prior to the date of this Agreement),
incumbent members cease for any reason to constitute a
majority of the members of the Board of Directors of Sprint.
A member of the Board of Directors of Sprint shall be an
"incumbent member" if such individual is as of the date of this
Agreement or at the beginning of the applicable two consecutive
year period a member of the Board of Directors of Sprint, and any
new director after the date of this Agreement (other than a
director designated by person who has entered into an agreement
to effect a transaction described in subparagraph (i) above)
whose election to the Board or nomination for election by the
stockholders of Sprint was approved by a vote of at least two-
thirds (2/3) of the directors still in office who either were
directors as of the date hereof or as of the first day of the
applicable two consecutive year period or whose election or
nomination for election was previously so approved.
9. Dispute Resolution.
All disputes arising under this Agreement, other than those
disputes relating to Executive's alleged violations of Sections
11 through 14 herein, shall be submitted to arbitration by the
American Arbitration Association of Kansas City, Missouri. Costs
of arbitration shall be borne equally by the parties. The
decision of the arbitrators shall be final and there shall be no
appeal from any award rendered. Any award rendered may be
entered as a judgment in any court of competent jurisdiction. In
any judicial enforcement proceeding, the losing party shall
reimburse the prevailing party for its reasonable costs and
attorneys' fees for enforcing its rights under this Agreement, in
addition to any damages or other relief granted. This Section 9
does not apply to any action by Employer to enforce Sections 11
through 14 of this Agreement and does not in any way restrict
Employer's rights under Section 15 herein.
10. Enforcement.
In the event Employer shall fail to pay any amounts due to
Executive under this Agreement as they come due, Employer agrees
to pay interest on such amounts at a rate of prime plus two
percent (2%) per annum. Employer agrees that Executive and any
successor shall be entitled to recover all costs of successfully
enforcing any provision of this Agreement, including reasonable
attorney fees and costs of litigation.
11. Confidential Information.
Executive acknowledges that during the course of his
employment he has learned or will learn or develop Confidential
Information (as that term is defined in this Section 11).
Executive further acknowledges that unauthorized disclosure or
use of such Confidential Information, other than in discharge of
Executive's duties, will cause Employer irreparable harm.
For purposes of this Section, Confidential Information means
trade secrets (such as technical and non-technical data, a
formula, pattern, compilation, program, device, method,
technique, drawing, process) and other proprietary information
concerning the products, processes or services of Employer or its
parent, and/or affiliates, including but not limited to: computer
programs; unpatented inventions, discoveries or improvements;
marketing, manufacturing, or organizational research and
development; business plans; sales forecasts; personnel
information, including the identity of other employees of
Employer, their responsibilities, competence, abilities, and
compensation; pricing and financial information; current and
prospective customer lists and information on customers or their
employees; information concerning planned or pending acquisitions
or divestitures; and information concerning purchases of major
equipment or property, which information: (a) has not been made
generally available to the public; and (b) is useful or of value
to the current or anticipated business, or research or
development activities of Employer or of any customer or supplier
of Employer, or (c) has been identified to Employee as
confidential by Employer, either orally or in writing.
Except in the course of his employment and in the pursuit of
the business of Employer or any of its subsidiaries or
affiliates, Executive shall not, during the course of his
employment, or for a period of eighteen (18) months following
termination of his employment for any reason, directly or
indirectly, disclose, publish, communicate or use on his behalf
or another's behalf, any proprietary information or data of
Employer or any of its subsidiaries or affiliates.
Executive acknowledges that Employer operates and competes
nationally, and that Employer will be harmed by unauthorized
disclosure or use of Confidential Information regardless of where
such disclosure or use occurs, and that therefore this
confidentiality agreement is not limited to any single state or
other jurisdiction.
12. Non-Competition.
Executive acknowledges that use or disclosure of
Confidential Information described in Section 11 is likely if
Executive were to perform services related to the local
telecommunications business on behalf of a competitor of
Employer. Therefore, Executive shall not, for eighteen (18)
months following termination of employment for any reason (the
"Non-Compete Period"), accept any position, including, but not
limited to a position with any Regional Bell Operating Company
where the performance of duties in that position will involve
managing, controlling, participating in, investing in, acting as
consultant or advisor to, rendering services for, or otherwise
assisting any person or entity that engages in or owns any
business that is in the local telecommunications business. For
purposes of this Agreement, "local telecommunications business"
includes all forms of local exchanges, together with related
activities such as directory publication, information services
and material supply distribution.
Executive acknowledges that Employer operates and competes
nationally, and that therefore this non-competition agreement is
not limited to any single state or other jurisdiction.
This section shall not prevent Executive from using general
skills and experience developed during employment with Employer
or other employers; or from accepting a position of employment
with another company, firm, or other organization which competes
with Employer, if its business is diversified and Executive is
employed in a part of the business that is not related to local
telecommunications and provided that such position does not
require or permit the disclosure or use of Confidential
Information.
13. Inducement of Other Employees.
For an eighteen (18) month period following termination of
employment, Executive will not directly or indirectly solicit,
induce or encourage any employee or agent of Employer to
terminate his relationship with Employer.
14. Return of Employer's Property.
All notes, reports, sketches, plans, published memoranda or
other documents created, developed, generated or held by
Executive during employment, concerning or related to Employer's
business, and whether containing or relating to Confidential
Information or not, are the property of Employer and will be
promptly delivered to Employer upon termination of Executive's
employment for any reason whatsoever. During the course of
employment, Executive shall not remove any of the above property
containing Confidential Information, or reproductions or copies
thereof, or any apparatus from Employer's premises without
authorization.
15. Remedies.
Executive acknowledges that the restraints and agreements
herein provided are fair and reasonable, that enforcement of the
provisions of Sections 11, 12, 13 and 14 will not cause him undue
hardship and that said provisions are reasonably necessary and
commensurate with the need to protect Employer and its legitimate
and proprietary business interests and property from irreparable
harm.
Executive acknowledges that failure to comply with the terms
of this Agreement will cause irreparable damage to Employer.
Therefore, Executive agrees that, in addition to any other
remedies at law or in equity available to Employer for
Executive's breach or threatened breach of this Agreement,
Employer is entitled to specific performance or injunctive
relief, without bond, against Executive to prevent such damage or
breach, and the existence of any claim or cause of action
Executive may have against Employer will not constitute a defense
thereto. Executive further agrees to pay reasonable attorney
fees and costs of litigation incurred by Employer in any
proceeding relating to the enforcement of the Agreement or to any
alleged breach thereof in which Employer shall prevail in whole
or in part.
In the event of a breach or a violation by Executive of any
of the covenants and provisions of this Agreement, the running of
the Non-Compete Period (but not of Executive's obligation
thereunder), shall be tolled during the period of the continuance
of any actual breach or violation.
16. Confidentiality of Agreement.
As a specific condition to Executive's right to Special
Compensation or other benefits described herein, Executive agrees
that he will not disclose or discuss: the existence of this
Agreement; the Special Compensation provided hereunder; or any
other terms of the Agreement except: (1) to members of his
immediate family; (2) to his financial advisor or attorney but
then only to the extent necessary for them to assist him; or (3)
as required by law or to enforce legal rights.
17. Entire Understanding.
This Agreement constitutes the entire understanding between
the parties relating to Executive's employment hereunder and
supersedes and cancels all prior written and oral understandings
and agreements with respect to such matters, except for the terms
and provisions of any employee benefit or other compensation
plans (or any agreements or awards thereunder) referred to in or
contemplated by this Agreement and except for the SPRINT UNITED
EMPLOYEE AGREEMENT REGARDING PROPERTY RIGHTS AND BUSINESS
PRACTICES which the Executive has signed and by which Executive
continues to be bound.
18. Binding Effect.
This Agreement shall be binding upon and inure to the
benefit of Executive's executors, administrators, legal
representatives, heirs and legatees and the successors and
assigns of Employer.
19. Partial Invalidity.
The various provisions of this Agreement are intended to be
severable and to constitute independent and distinct binding
obligations. Should any provision of this Agreement be
determined to be void and unenforceable, in whole or in part, it
shall not be deemed to affect or impair the validity of any other
provision or part thereof, and such provision or part thereof
shall be deemed modified to the extent required to permit
enforcement. Without limiting the generality of the foregoing,
if the scope of any provision contained in this Agreement is too
broad to permit enforcement to its full extent, but may be made
enforceable by limitations thereon, such provision shall be
enforced to the maximum extent permitted by law, and Executive
hereby agrees that such scope may be judicially modified
accordingly.
20. Strict Construction.
The language used in this Agreement will be deemed to be the
language chosen by Employer and Executive to express their mutual
intent and no rule of strict construction shall be applied
against any person.
21. Waiver.
The waiver of any party hereto of a breach of any provision
of this Agreement by any other party shall not operate or be
construed as a waiver of any subsequent breach.
22. Notices.
Any notice or other communication required or permitted to
be given hereunder shall be determined to have been duly given to
any party (a) upon delivery to the address of such party
specified below if delivered personally or by courier; (b) upon
dispatch if transmitted by telecopy or other means of facsimile,
provided a copy thereof is also sent by regular mail or courier;
or (c) within forty-eight (48) hours after deposit thereof in the
U.S. mail, postage prepaid, for delivery as certified mail,
return receipt requested, addressed, in any case to the party at
the following address(es) or telecopy numbers:
If to Executive:
D. Wayne Peterson
Sprint Corporation
2330 Shawnee Mission Parkway
Westwood, KS 66205
If to Employer and/or Company:
Sprint Corporation
2330 Shawnee Mission Parkway
Westwood, KS 66205
Attn: Corporate Secretary
or to such other address(es) or telecopy number(s) as any party
may designate by Written Notice in the aforesaid manner.
23. Governing Law.
This Agreement shall be governed by, and interpreted,
construed and enforced in accordance with, the laws of the State
of Kansas.
24. Gender and Number.
Wherever from the context it appears appropriate, each term
stated in either the singular of plural shall include the
singular and the plural, and the pronouns stated in either the
masculine, the feminine or the neuter gender shall include the
masculine, feminine or neuter.
25. Headings.
The headings of the Sections of this Agreement are for
reference purposes only and do not define or limit, and shall not
be used to interpret or construe the contents of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed at Westwood, Kansas, on the date above set
forth.
D. WAYNE PETERSON SPRINT/UNITED MANAGEMENT
COMPANY
/s/ D. WAYNE PETERSON By: /s/ B. WATSON
Authorized Officer
Exhibit (10)(x)
AGREEMENT REGARDING SPECIAL COMPENSATION
AND POST EMPLOYMENT RESTRICTIVE COVENANTS
THIS AGREEMENT made this 20th day of October, 1993, by and
between SPRINT/UNITED MANAGEMENT COMPANY, a Kansas corporation
and subsidiary of Sprint Corporation ("Employer"), and DENNIS E.
FOSTER ("Executive").
W I T N E S S E T H:
WHEREAS, Employer and its parent and affiliates are engaged
in the telecommunications business;
WHEREAS, Executive has expertise, experience and capability
in the business of Employer and the telecommunications business
in general;
WHEREAS, Executive has been, and/or now is serving Employer
as President and Chief Operating Officer, Sprint Cellular
Division;
WHEREAS, Employer desires to enter into this Agreement to
provide severance and other benefits for Executive and obtain
Executive's agreements regarding confidentiality and post-
employment restrictive covenants for Employer; and
WHEREAS, Executive is willing to provide such agreements to
Employer.
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which consideration
is mutually acknowledged by the parties, it is hereby agreed as
follows:
1. Recitals.
The recitals hereinbefore set forth constitute an integral
part of this Agreement, evidencing the intent of the parties in
executing this Agreement, and describing the circumstances
surrounding its execution. Said recitals are by express
reference made a part of the covenants hereof, and this Agreement
shall be construed in light thereof.
2. Duties and Responsibilities.
The duties and responsibilities of Executive are and shall
continue to be of an executive nature as shall be required by
Employer in the conduct of its business. Executive's powers and
authority shall include all those presently delegated to him or
such other duties and responsibilities as from time to time may
be assigned to him. Executive recognizes, that during his
employment hereunder, he owes an undivided duty of loyalty to
Employer, and agrees to devote his entire business time and
attention to the performance of said duties and responsibilities
and to use his best efforts to promote and develop the business
of Employer.
3. Employment Term.
Executive's employment may be terminated by either party in
accordance with Sections 5, 6, 7, or 8 herein.
4. Compensation and Benefits.
During employment, Executive shall be entitled to receive a
base annual salary, shall be reimbursed for reasonable expenses
incurred and accounted for in accordance with the policies and
procedures of Employer, and shall be entitled to vacation pay and
other benefits applicable to employees generally, each as may
from time to time be established, amended or terminated. In
addition, upon execution of this Agreement, Executive shall be
awarded ten thousand (10,000) shares of restricted stock as set
forth in a restricted stock agreement of even date herewith,
attached hereto and incorporated herein (the "Restricted Stock
Agreement") and shall be entitled to the Special Compensation set
forth in Section 6 hereof in accordance with the terms of this
Agreement.
5. Termination by Employer: Special Compensation.
At any time, Employer may terminate Executive's employment
for any reason. If Executive's termination is other than
pursuant to Section 6, Executive shall, subject to the other
provisions of this Section 5, be entitled to the following
Special Compensation (as that term is defined in this Section 5)
in lieu of any benefits available under any and all Employer
separation plans or policies. If Executive's termination is
pursuant to Sections 5, 6 or 7, Executive's obligations under
Sections 11, 12, 13, and 14 hereof shall continue.
For purposes of this Agreement, "Special Compensation" shall
consist of:
(a) to continue to receive for a period of eighteen
(18) months from the date of termination (the "Severance
Period") bi-weekly compensation at the rate equal to the bi-
weekly amount of his base annual salary in effect at the
date of termination of employment;
(b) to receive a bonus, based on actual performance
results, up to the target amount, under the Management
Incentive Plan ("MIP") throughout the Severance Period
provided that the amount, if any, payable under such Plan
for the award period including the last day of the Severance
Period shall be pro rated based upon the number of months of
the Severance Period that fall within the award period and
the total number of months in such award period;
(c) to receive an award under the Long Term Incentive
Plan, pro rated based on the Executive's last day worked,
exclusive of any Severance Period, determined in accordance
with the terms of said Plan;
(d) acceleration of vesting of restricted stock in
accordance with the relevant provisions of the Restricted
Stock Agreement;
(e) to continue to receive throughout the Severance
Period any executive medical, dental, life, and qualified or
non-qualified retirement benefits which the Executive was
receiving or was entitled to receive at the time of
termination, except that long term disability and short term
disability benefits cease on the last day worked;
(f) outplacement counseling by a firm selected by
Employer to continue until Executive becomes employed; and
(g) to continue to receive throughout the Severance
Period all applicable executive perquisites (including
automobile allowance, long distance services and all
miscellaneous services) except country club membership dues
and accrual of vacation.
Employer shall pay or cause to be paid the amounts payable
under paragraph (a) above in equal installments, bi-weekly in
arrears, and the amount payable under paragraphs (b) and (c) in
accordance with the terms of the Plans. All payments pursuant to
this Section shall be subject to applicable federal and state
income and other withholding taxes.
In addition to the Special Compensation described above,
Executive shall also be entitled to any vacation pay for vacation
accrued by Executive in the calendar year of termination but not
taken at the time of termination.
In the event Executive becomes employed full time during the
Severance Period, Executive's entitlement to continuation of the
benefits described in paragraph (e) shall immediately cease,
however, Executive shall retain any rights to continue medical
insurance coverage under the COBRA continuation provisions of the
group medical insurance plan by paying the applicable premium
therefor.
The payments and benefits provided for in this Section shall
be in addition to all other sums then payable and owing to
Executive hereunder and, except as expressly provided herein,
shall not be subject to reduction for any amounts received by
Executive for employment or services provided after termination
of employment hereunder, and shall be in full settlement and
satisfaction of all of Executive's claims and demands.
In all events, Executive's right to receive severance and/or
other benefits pursuant to this Section shall cease immediately
in the event Executive is re-employed by Employer or an affiliate
or Executive breaches his Confidential Information Covenant (as
defined in Section 11 hereof), or breaches Sections 12, 13 or 14
hereof. In all cases, Employer's rights under Section 15 shall
continue.
6. Voluntary Resignation by Executive; Termination
for Cause; Total Disability.
Upon termination of Executive's employment by either
Voluntary Resignation, Termination for Cause (as those terms are
defined in this Section 6), or Total Disability, as that term is
defined in the Long Term Disability Plan, Executive shall have no
right to compensation, severance pay or other benefits described
herein but Executive's obligations under Sections 11, 12, 13 and
14 hereof shall continue.
(a) Voluntary Resignation by Executive. At any time,
Executive has the right, by written notice to Employer, to
terminate his services hereunder ("Voluntary Resignation"),
effective as of thirty (30) days after such notice.
(b) Termination for Cause by Employer. At any time,
Employer has the right to terminate Executive's employment.
Termination upon the occurrence of any of the following
shall be deemed termination for cause ("Termination for
Cause"):
(i) Conduct by the Executive which reflects
adversely on the Executive's honesty, trustworthiness
or fitness as an Executive, or
(ii) Executive's willful engagement in conduct
which is demonstrably and materially injurious to the
Employer.
For Termination for Cause, written notice of the
termination of Executive's employment by Employer shall be
served upon Executive and shall be effective as of the date
of such service. Such notice given by Employer shall
specify the act or acts of Executive underlying such
termination.
(c) Total Disability. Upon the total disability of
the Executive, as that term is defined in the Long Term
Disability Plan, Executive shall have no right to
compensation or severance pay described herein but shall be
entitled to long term disability and other such benefits
afforded under the applicable policies and plans.
7. Resignation Following Constructive Discharge.
If at any time, except in connection with a termination
pursuant to Section 5, 6, or 8 Executive is Constructively
Discharged (as that term is defined in this Section 7) then
Executive shall have the right, by written notice to Employer
within sixty (60) days of such Constructive Discharge, to
terminate his services hereunder, effective as of thirty (30)
days after such notice. Executive shall in such event be
entitled to the compensation and benefits as if such employment
were terminated pursuant to Section 5 of this Agreement.
For purposes of this Agreement, the Executive shall be
"Constructively Discharged" upon the occurrence of any one of the
following events:
(a) Executive is removed from his position with
Employer other than as a result of Executive's appointment
to positions of equal or superior scope and responsibility;
or
(b) Executive's targeted total compensation is reduced
by more than 10% (other than across-the-board reductions
similarly affecting all executive officers of Sprint
Corporation).
8. Effect of Change in Control.
In the event that within one year of a Change in Control (as
that term is defined in this Section 8) Executive's employment is
terminated:
(a) by the Employer other than pursuant to Section 6
hereof, or
(b) by Executive pursuant to Section 7 hereof,
then Executive shall be entitled to the Special Compensation
described in Section 5 and shall be bound by Section 11, but
shall not have any continuing obligations under Sections 12, 13,
and 14, except as otherwise required by common law or statute.
For purposes of this Agreement, a "Change in Control" shall
be deemed to have occurred if:
(i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act")) other than a trustee or other fiduciary
holding securities under an employee benefit plan of Sprint
Corporation ("Sprint") or any of its affiliates, and other
than Sprint or a corporation owned, directly or indirectly,
by the stockholders of Sprint in substantially the same
proportions as their ownership of stock of Sprint, is or
becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
securities of Sprint representing 20% or more of the
combined voting power of Sprint's then outstanding
securities, or
(ii) during any period of two consecutive years (not
including any period prior to the date of this Agreement),
incumbent members cease for any reason to constitute a
majority of the members of the Board of Directors of Sprint.
A member of the Board of Directors of Sprint shall be an
"incumbent member" if such individual is as of the date of this
Agreement or at the beginning of the applicable two consecutive
year period a member of the Board of Directors of Sprint, and any
new director after the date of this Agreement (other than a
director designated by person who has entered into an agreement
to effect a transaction described in subparagraph (i) above)
whose election to the Board or nomination for election by the
stockholders of Sprint was approved by a vote of at least two-
thirds (2/3) of the directors still in office who either were
directors as of the date hereof or as of the first day of the
applicable two consecutive year period or whose election or
nomination for election was previously so approved.
9. Dispute Resolution.
All disputes arising under this Agreement, other than those
disputes relating to Executive's alleged violations of Sections
11 through 14 herein, shall be submitted to arbitration by the
American Arbitration Association of Kansas City, Missouri. Costs
of arbitration shall be borne equally by the parties. The
decision of the arbitrators shall be final and there shall be no
appeal from any award rendered. Any award rendered may be
entered as a judgment in any court of competent jurisdiction. In
any judicial enforcement proceeding, the losing party shall
reimburse the prevailing party for its reasonable costs and
attorneys' fees for enforcing its rights under this Agreement, in
addition to any damages or other relief granted. This Section 9
does not apply to any action by Employer to enforce Sections 11
through 14 of this Agreement and does not in any way restrict
Employer's rights under Section 15 herein.
10. Enforcement.
In the event Employer shall fail to pay any amounts due to
Executive under this Agreement as they come due, Employer agrees
to pay interest on such amounts at a rate of prime plus two
percent (2%) per annum. Employer agrees that Executive and any
successor shall be entitled to recover all costs of successfully
enforcing any provision of this Agreement, including reasonable
attorney fees and costs of litigation.
11. Confidential Information.
Executive acknowledges that during the course of his
employment he has learned or will learn or develop Confidential
Information (as that term is defined in this Section 11).
Executive further acknowledges that unauthorized disclosure or
use of such Confidential Information, other than in discharge of
Executive's duties, will cause Employer irreparable harm.
For purposes of this Section, Confidential Information means
trade secrets (such as technical and non-technical data, a
formula, pattern, compilation, program, device, method,
technique, drawing, process) and other proprietary information
concerning the products, processes or services of Employer or its
parent, and/or affiliates, including but not limited to: computer
programs; unpatented inventions, discoveries or improvements;
marketing, manufacturing, or organizational research and
development; business plans; sales forecasts; personnel
information, including the identity of other employees of
Employer, their responsibilities, competence, abilities, and
compensation; pricing and financial information; current and
prospective customer lists and information on customers or their
employees; information concerning planned or pending acquisitions
or divestitures; and information concerning purchases of major
equipment or property, which information: (a) has not been made
generally available to the public; and (b) is useful or of value
to the current or anticipated business, or research or
development activities of Employer or of any customer or supplier
of Employer, or (c) has been identified to Employee as
confidential by Employer, either orally or in writing.
Except in the course of his employment and in the pursuit of
the business of Employer or any of its subsidiaries or
affiliates, Executive shall not, during the course of his
employment, or for a period of eighteen (18) months following
termination of his employment for any reason, directly or
indirectly, disclose, publish, communicate or use on his behalf
or another's behalf, any proprietary information or data of
Employer or any of its subsidiaries or affiliates.
Executive acknowledges that Employer operates and competes
nationally, and that Employer will be harmed by unauthorized
disclosure or use of Confidential Information regardless of where
such disclosure or use occurs, and that therefore this
confidentiality agreement is not limited to any single state or
other jurisdiction.
12. Non-Competition.
Executive acknowledges that use or disclosure of
Confidential Information described in Section 11 is likely if
Executive were to perform services related to the cellular and
wireless telecommunications business on behalf of a competitor of
Employer. Therefore, Executive shall not, for eighteen (18)
months following termination of employment for any reason (the
"Non-Compete Period"), accept any position, where the performance
of duties in that position will involve managing, controlling,
participating in, investing in, acting as consultant or advisor
to, rendering services for, or otherwise assisting any person or
entity that engages in or owns any business that is in the
cellular or wireless telecommunications business. For purposes
of this Agreement, "cellular and wireless telecommunications
business" includes all forms of wireless and cellular
communications, together with related activities such as
information services.
Executive acknowledges that Employer operates and competes
nationally, and that therefore this non-competition agreement is
not limited to any single state or other jurisdiction.
This section shall not prevent Executive from using general
skills and experience developed during employment with Employer
or other employers; or from accepting a position of employment
with another company, firm, or other organization which competes
with Employer, if its business is diversified and Executive is
employed in a part of the business that is not related to
cellular or wireless communications and provided that such
position does not require or permit the disclosure or use of
Confidential Information.
13. Inducement of Other Employees.
For an eighteen (18) month period following termination of
employment, Executive will not directly or indirectly solicit,
induce or encourage any employee or agent of Employer to
terminate his relationship with Employer.
14. Return of Employer's Property.
All notes, reports, sketches, plans, published memoranda or
other documents created, developed, generated or held by
Executive during employment, concerning or related to Employer's
business, and whether containing or relating to Confidential
Information or not, are the property of Employer and will be
promptly delivered to Employer upon termination of Executive's
employment for any reason whatsoever. During the course of
employment, Executive shall not remove any of the above property
containing Confidential Information, or reproductions or copies
thereof, or any apparatus from Employer's premises without
authorization.
15. Remedies.
Executive acknowledges that the restraints and agreements
herein provided are fair and reasonable, that enforcement of the
provisions of Sections 11, 12, 13 and 14 will not cause him undue
hardship and that said provisions are reasonably necessary and
commensurate with the need to protect Employer and its legitimate
and proprietary business interests and property from irreparable
harm.
Executive acknowledges that failure to comply with the terms
of this Agreement will cause irreparable damage to Employer.
Therefore, Executive agrees that, in addition to any other
remedies at law or in equity available to Employer for
Executive's breach or threatened breach of this Agreement,
Employer is entitled to specific performance or injunctive
relief, without bond, against Executive to prevent such damage or
breach, and the existence of any claim or cause of action
Executive may have against Employer will not constitute a defense
thereto. Executive further agrees to pay reasonable attorney
fees and costs of litigation incurred by Employer in any
proceeding relating to the enforcement of the Agreement or to any
alleged breach thereof in which Employer shall prevail in whole
or in part.
In the event of a breach or a violation by Executive of any
of the covenants and provisions of this Agreement, the running of
the Non-Compete Period (but not of Executive's obligation
thereunder), shall be tolled during the period of the continuance
of any actual breach or violation.
16. Confidentiality of Agreement.
As a specific condition to Executive's right to Special
Compensation or other benefits described herein, Executive agrees
that he will not disclose or discuss: the existence of this
Agreement; the Special Compensation provided hereunder; or any
other terms of the Agreement except: (1) to members of his
immediate family; (2) to his financial advisor or attorney but
then only to the extent necessary for them to assist him; or (3)
as required by law or to enforce legal rights.
17. Entire Understanding.
This Agreement constitutes the entire understanding between
the parties relating to Executive's employment hereunder and
supersedes and cancels all prior written and oral understandings
and agreements with respect to such matters, except for the terms
and provisions of any employee benefit or other compensation
plans (or any agreements or awards thereunder) referred to in or
contemplated by this Agreement and except for the SPRINT UNITED
EMPLOYEE AGREEMENT REGARDING PROPERTY RIGHTS AND BUSINESS
PRACTICES which the Executive has signed and by which Executive
continues to be bound.
18. Binding Effect.
This Agreement shall be binding upon and inure to the
benefit of Executive's executors, administrators, legal
representatives, heirs and legatees and the successors and
assigns of Employer.
19. Partial Invalidity.
The various provisions of this Agreement are intended to be
severable and to constitute independent and distinct binding
obligations. Should any provision of this Agreement be
determined to be void and unenforceable, in whole or in part, it
shall not be deemed to affect or impair the validity of any other
provision or part thereof, and such provision or part thereof
shall be deemed modified to the extent required to permit
enforcement. Without limiting the generality of the foregoing,
if the scope of any provision contained in this Agreement is too
broad to permit enforcement to its full extent, but may be made
enforceable by limitations thereon, such provision shall be
enforced to the maximum extent permitted by law, and Executive
hereby agrees that such scope may be judicially modified
accordingly.
20. Strict Construction.
The language used in this Agreement will be deemed to be the
language chosen by Employer and Executive to express their mutual
intent and no rule of strict construction shall be applied
against any person.
21. Waiver.
The waiver of any party hereto of a breach of any provision
of this Agreement by any other party shall not operate or be
construed as a waiver of any subsequent breach.
22. Notices.
Any notice or other communication required or permitted to
be given hereunder shall be determined to have been duly given to
any party (a) upon delivery to the address of such party
specified below if delivered personally or by courier; (b) upon
dispatch if transmitted by telecopy or other means of facsimile,
provided a copy thereof is also sent by regular mail or courier;
or (c) within forty-eight (48) hours after deposit thereof in the
U.S. mail, postage prepaid, for delivery as certified mail,
return receipt requested, addressed, in any case to the party at
the following address(es) or telecopy numbers:
If to Executive:
Dennis E. Foster
Sprint Corporation
8725 Higgins Road
Chicago, IL 60631
If to Employer and/or Company:
Sprint Corporation
2330 Shawnee Mission Parkway
Westwood, KS 66205
Attn: Corporate Secretary
or to such other address(es) or telecopy number(s) as any party
may designate by Written Notice in the aforesaid manner.
23. Governing Law.
This Agreement shall be governed by, and interpreted,
construed and enforced in accordance with, the laws of the State
of Kansas.
24. Gender and Number.
Wherever from the context it appears appropriate, each term
stated in either the singular of plural shall include the
singular and the plural, and the pronouns stated in either the
masculine, the feminine or the neuter gender shall include the
masculine, feminine or neuter.
25. Headings.
The headings of the Sections of this Agreement are for
reference purposes only and do not define or limit, and shall not
be used to interpret or construe the contents of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed at Westwood, Kansas, on the date above set
forth.
DENNIS E. FOSTER SPRINT/UNITED MANAGEMENT
COMPANY
/s/ DENNIS E. FOSTER By: /s/ B. WATSON
Authorized Officer
Exhibit (10)(x)
AGREEMENT REGARDING SPECIAL COMPENSATION
AND POST EMPLOYMENT RESTRICTIVE COVENANTS
THIS AGREEMENT made this 20th day of October, 1993, by and
between SPRINT/UNITED MANAGEMENT COMPANY, a Kansas corporation
and subsidiary of Sprint Corporation ("Employer"), and RONALD T.
LEMAY ("Executive").
W I T N E S S E T H:
WHEREAS, Employer and its parent and affiliates are engaged
in the telecommunications business;
WHEREAS, Executive has expertise, experience and capability
in the business of Employer and the telecommunications business
in general;
WHEREAS, Executive has been, and/or now is serving Employer
as President and Chief Operating Officer, Long Distance Division;
WHEREAS, Employer desires to enter into this Agreement to
provide severance and other benefits for Executive and obtain
Executive's agreements regarding confidentiality and post-
employment restrictive covenants for Employer; and
WHEREAS, Executive is willing to provide such agreements to
Employer.
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which consideration
is mutually acknowledged by the parties, it is hereby agreed as
follows:
1. Recitals.
The recitals hereinbefore set forth constitute an integral
part of this Agreement, evidencing the intent of the parties in
executing this Agreement, and describing the circumstances
surrounding its execution. Said recitals are by express
reference made a part of the covenants hereof, and this Agreement
shall be construed in light thereof.
2. Duties and Responsibilities.
The duties and responsibilities of Executive are and shall
continue to be of an executive nature as shall be required by
Employer in the conduct of its business. Executive's powers and
authority shall include all those presently delegated to him or
such other duties and responsibilities as from time to time may
be assigned to him. Executive recognizes, that during his
employment hereunder, he owes an undivided duty of loyalty to
Employer, and agrees to devote his entire business time and
attention to the performance of said duties and responsibilities
and to use his best efforts to promote and develop the business
of Employer.
3. Employment Term.
Executive's employment may be terminated by either party in
accordance with Sections 5, 6, 7, or 8 herein.
4. Compensation and Benefits.
During employment, Executive shall be entitled to receive a
base annual salary, shall be reimbursed for reasonable expenses
incurred and accounted for in accordance with the policies and
procedures of Employer, and shall be entitled to vacation pay and
other benefits applicable to employees generally, each as may
from time to time be established, amended or terminated. In
addition, upon execution of this Agreement, Executive shall be
awarded twenty thousand (20,000) shares of restricted stock as
set forth in a restricted stock agreement of even date herewith,
attached hereto and incorporated herein (the "Restricted Stock
Agreement") and shall be entitled to the Special Compensation set
forth in Section 6 hereof in accordance with the terms of this
Agreement.
5. Termination by Employer: Special Compensation.
At any time, Employer may terminate Executive's employment
for any reason. If Executive's termination is other than
pursuant to Section 6, Executive shall, subject to the other
provisions of this Section 5, be entitled to the following
Special Compensation (as that term is defined in this Section 5)
in lieu of any benefits available under any and all Employer
separation plans or policies. If Executive's termination is
pursuant to Sections 5, 6 or 7, Executive's obligations under
Sections 11, 12, 13, and 14 hereof shall continue.
For purposes of this Agreement, "Special Compensation" shall
consist of:
(a) to continue to receive for a period of eighteen
(18) months from the date of termination (the "Severance
Period") monthly compensation at the rate equal to the
monthly amount of his base annual salary in effect at the
date of termination of employment;
(b) to receive a bonus, based on actual performance
results, up to the target amount, under the Management
Incentive Plan ("MIP") throughout the Severance Period
provided that the amount, if any, payable under such Plan
for the award period including the last day of the Severance
Period shall be pro rated based upon the number of months of
the Severance Period that fall within the award period and
the total number of months in such award period;
(c) to receive an award under the Long Term Incentive
Plan, pro rated based on the Executive's last day worked,
exclusive of any Severance Period, determined in accordance
with the terms of said Plan;
(d) acceleration of vesting of restricted stock in
accordance with the relevant provisions of the Restricted
Stock Agreement;
(e) to continue to receive throughout the Severance
Period any executive medical, dental, life, and qualified or
non-qualified retirement benefits which the Executive was
receiving or was entitled to receive at the time of
termination, except that long term disability and short term
disability benefits cease on the last day worked;
(f) outplacement counseling by a firm selected by
Employer to continue until Executive becomes employed; and
(g) to continue to receive throughout the Severance
Period all applicable executive perquisites (including
automobile allowance, long distance services and all
miscellaneous services) except country club membership dues
and accrual of vacation.
Employer shall pay or cause to be paid the amounts payable
under paragraph (a) above in equal installments, monthly in
arrears, and the amount payable under paragraphs (b) and (c) in
accordance with the terms of the Plans. All payments pursuant to
this Section shall be subject to applicable federal and state
income and other withholding taxes.
In addition to the Special Compensation described above,
Executive shall also be entitled to any vacation pay for vacation
accrued by Executive in the calendar year of termination but not
taken at the time of termination.
In the event Executive becomes employed full time during the
Severance Period, Executive's entitlement to continuation of the
benefits described in paragraph (e) shall immediately cease,
however, Executive shall retain any rights to continue medical
insurance coverage under the COBRA continuation provisions of the
group medical insurance plan by paying the applicable premium
therefor.
The payments and benefits provided for in this Section shall
be in addition to all other sums then payable and owing to
Executive hereunder and, except as expressly provided herein,
shall not be subject to reduction for any amounts received by
Executive for employment or services provided after termination
of employment hereunder, and shall be in full settlement and
satisfaction of all of Executive's claims and demands.
In all events, Executive's right to receive severance and/or
other benefits pursuant to this Section shall cease immediately
in the event Executive is re-employed by Employer or an affiliate
or Executive breaches his Confidential Information Covenant (as
defined in Section 11 hereof), or breaches Sections 12, 13 or 14
hereof. In all cases, Employer's rights under Section 15 shall
continue.
6. Voluntary Resignation by Executive; Termination
for Cause; Total Disability.
Upon termination of Executive's employment by either
Voluntary Resignation, Termination for Cause (as those terms are
defined in this Section 6), or Total Disability, as that term is
defined in the Long Term Disability Plan, Executive shall have no
right to compensation, severance pay or other benefits described
herein but Executive's obligations under Sections 11, 12, 13 and
14 hereof shall continue.
(a) Voluntary Resignation by Executive. At any time,
Executive has the right, by written notice to Employer, to
terminate his services hereunder ("Voluntary Resignation"),
effective as of thirty (30) days after such notice.
(b) Termination for Cause by Employer. At any time,
Employer has the right to terminate Executive's employment.
Termination upon the occurrence of any of the following
shall be deemed termination for cause ("Termination for
Cause"):
(i) Conduct by the Executive which reflects
adversely on the Executive's honesty, trustworthiness
or fitness as an Executive, or
(ii) Executive's willful engagement in conduct
which is demonstrably and materially injurious to the
Employer.
For Termination for Cause, written notice of the
termination of Executive's employment by Employer shall be
served upon Executive and shall be effective as of the date
of such service. Such notice given by Employer shall
specify the act or acts of Executive underlying such
termination.
(c) Total Disability. Upon the total disability of
the Executive, as that term is defined in the Long Term
Disability Plan, Executive shall have no right to
compensation or severance pay described herein but shall be
entitled to long term disability and other such benefits
afforded under the applicable policies and plans.
7. Resignation Following Constructive Discharge.
If at any time, except in connection with a termination
pursuant to Section 5, 6, or 8 Executive is Constructively
Discharged (as that term is defined in this Section 7) then
Executive shall have the right, by written notice to Employer
within sixty (60) days of such Constructive Discharge, to
terminate his services hereunder, effective as of thirty (30)
days after such notice. Executive shall in such event be
entitled to the compensation and benefits as if such employment
were terminated pursuant to Section 5 of this Agreement.
For purposes of this Agreement, the Executive shall be
"Constructively Discharged" upon the occurrence of any one of the
following events:
(a) Executive is removed from his position with
Employer other than as a result of Executive's appointment
to positions of equal or superior scope and responsibility;
or
(b) Executive's targeted total compensation is reduced
by more than 10% (other than across-the-board reductions
similarly affecting all executive officers of Sprint
Corporation).
8. Effect of Change in Control.
In the event that within one year of a Change in Control (as
that term is defined in this Section 8) Executive's employment is
terminated:
(a) by the Employer other than pursuant to Section 6
hereof, or
(b) by Executive pursuant to Section 7 hereof,
then Executive shall be entitled to the Special Compensation
described in Section 5 and shall be bound by Section 11, but
shall not have any continuing obligations under Sections 12, 13,
and 14, except as otherwise required by common law or statute.
For purposes of this Agreement, a "Change in Control" shall
be deemed to have occurred if:
(i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 (the
"Exchange Act")) other than a trustee or other fiduciary
holding securities under an employee benefit plan of Sprint
Corporation ("Sprint") or any of its affiliates, and other
than Sprint or a corporation owned, directly or indirectly,
by the stockholders of Sprint in substantially the same
proportions as their ownership of stock of Sprint, is or
becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
securities of Sprint representing 20% or more of the
combined voting power of Sprint's then outstanding
securities, or
(ii) during any period of two consecutive years (not
including any period prior to the date of this Agreement),
incumbent members cease for any reason to constitute a
majority of the members of the Board of Directors of Sprint.
A member of the Board of Directors of Sprint shall be an
"incumbent member" if such individual is as of the date of this
Agreement or at the beginning of the applicable two consecutive
year period a member of the Board of Directors of Sprint, and any
new director after the date of this Agreement (other than a
director designated by person who has entered into an agreement
to effect a transaction described in subparagraph (i) above)
whose election to the Board or nomination for election by the
stockholders of Sprint was approved by a vote of at least two-
thirds (2/3) of the directors still in office who either were
directors as of the date hereof or as of the first day of the
applicable two consecutive year period or whose election or
nomination for election was previously so approved.
9. Dispute Resolution.
All disputes arising under this Agreement, other than those
disputes relating to Executive's alleged violations of Sections
11 through 14 herein, shall be submitted to arbitration by the
American Arbitration Association of Kansas City, Missouri. Costs
of arbitration shall be borne equally by the parties. The
decision of the arbitrators shall be final and there shall be no
appeal from any award rendered. Any award rendered may be
entered as a judgment in any court of competent jurisdiction. In
any judicial enforcement proceeding, the losing party shall
reimburse the prevailing party for its reasonable costs and
attorneys' fees for enforcing its rights under this Agreement, in
addition to any damages or other relief granted. This Section 9
does not apply to any action by Employer to enforce Sections 11
through 14 of this Agreement and does not in any way restrict
Employer's rights under Section 15 herein.
10. Enforcement.
In the event Employer shall fail to pay any amounts due to
Executive under this Agreement as they come due, Employer agrees
to pay interest on such amounts at a rate of prime plus two
percent (2%) per annum. Employer agrees that Executive and any
successor shall be entitled to recover all costs of successfully
enforcing any provision of this Agreement, including reasonable
attorney fees and costs of litigation.
11. Confidential Information.
Executive acknowledges that during the course of his
employment he has learned or will learn or develop Confidential
Information (as that term is defined in this Section 11).
Executive further acknowledges that unauthorized disclosure or
use of such Confidential Information, other than in discharge of
Executive's duties, will cause Employer irreparable harm.
For purposes of this Section, Confidential Information means
trade secrets (such as technical and non-technical data, a
formula, pattern, compilation, program, device, method,
technique, drawing, process) and other proprietary information
concerning the products, processes or services of Employer or its
parent, and/or affiliates, including but not limited to: computer
programs; unpatented inventions, discoveries or improvements;
marketing, manufacturing, or organizational research and
development; business plans; sales forecasts; personnel
information, including the identity of other employees of
Employer, their responsibilities, competence, abilities, and
compensation; pricing and financial information; current and
prospective customer lists and information on customers or their
employees; information concerning planned or pending acquisitions
or divestitures; and information concerning purchases of major
equipment or property, which information: (a) has not been made
generally available to the public; and (b) is useful or of value
to the current or anticipated business, or research or
development activities of Employer or of any customer or supplier
of Employer, or (c) has been identified to Employee as
confidential by Employer, either orally or in writing.
Except in the course of his employment and in the pursuit of
the business of Employer or any of its subsidiaries or
affiliates, Executive shall not, during the course of his
employment, or for a period of eighteen (18) months following
termination of his employment for any reason, directly or
indirectly, disclose, publish, communicate or use on his behalf
or another's behalf, any proprietary information or data of
Employer or any of its subsidiaries or affiliates.
Executive acknowledges that Employer operates and competes
nationally, and that Employer will be harmed by unauthorized
disclosure or use of Confidential Information regardless of where
such disclosure or use occurs, and that therefore this
confidentiality agreement is not limited to any single state or
other jurisdiction.
12. Non-Competition.
Executive acknowledges that use or disclosure of
Confidential Information described in Section 11 is likely if
Executive were to perform services related to the long distance
business on behalf of a competitor of Employer. Therefore,
Executive shall not, for eighteen (18) months following
termination of employment for any reason (the "Non-Compete
Period"), accept any position, [including but not limited to a
position in the long distance operations of AT&T or MCI,] where
the performance of duties in that position will involve managing,
controlling, participating in, investing in, acting as consultant
or advisor to, rendering services for, or otherwise assisting any
person or entity that engages in or owns any business that is in
the long distance business. For purposes of this Agreement,
"long distance business" includes all forms of interexchange,
interstate, intrastate, interlata and international
communications, together with related activities such as
information services.
Executive acknowledges that Employer operates and competes
nationally, and that therefore this non-competition agreement is
not limited to any single state or other jurisdiction.
This section shall not prevent Executive from using general
skills and experience developed during employment with Employer
or other employers; or from accepting a position of employment
with another company, firm, or other organization which competes
with Employer, if its business is diversified and Executive is
employed in a part of the business that is not related to the
long distance business and provided that such position does not
require or permit the disclosure or use of Confidential
Information.
13. Inducement of Other Employees.
For an eighteen (18) month period following termination of
employment, Executive will not directly or indirectly solicit,
induce or encourage any employee or agent of Employer to
terminate his relationship with Employer.
14. Return of Employer's Property.
All notes, reports, sketches, plans, published memoranda or
other documents created, developed, generated or held by
Executive during employment, concerning or related to Employer's
business, and whether containing or relating to Confidential
Information or not, are the property of Employer and will be
promptly delivered to Employer upon termination of Executive's
employment for any reason whatsoever. During the course of
employment, Executive shall not remove any of the above property
containing Confidential Information, or reproductions or copies
thereof, or any apparatus from Employer's premises without
authorization.
15. Remedies.
Executive acknowledges that the restraints and agreements
herein provided are fair and reasonable, that enforcement of the
provisions of Sections 11, 12, 13 and 14 will not cause him undue
hardship and that said provisions are reasonably necessary and
commensurate with the need to protect Employer and its legitimate
and proprietary business interests and property from irreparable
harm.
Executive acknowledges that failure to comply with the terms
of this Agreement will cause irreparable damage to Employer.
Therefore, Executive agrees that, in addition to any other
remedies at law or in equity available to Employer for
Executive's breach or threatened breach of this Agreement,
Employer is entitled to specific performance or injunctive
relief, without bond, against Executive to prevent such damage or
breach, and the existence of any claim or cause of action
Executive may have against Employer will not constitute a defense
thereto. Executive further agrees to pay reasonable attorney
fees and costs of litigation incurred by Employer in any
proceeding relating to the enforcement of the Agreement or to any
alleged breach thereof in which Employer shall prevail in whole
or in part.
In the event of a breach or a violation by Executive of any
of the covenants and provisions of this Agreement, the running of
the Non-Compete Period (but not of Executive's obligation
thereunder), shall be tolled during the period of the continuance
of any actual breach or violation.
16. Confidentiality of Agreement.
As a specific condition to Executive's right to Special
Compensation or other benefits described herein, Executive agrees
that he will not disclose or discuss: the existence of this
Agreement; the Special Compensation provided hereunder; or any
other terms of the Agreement except: (1) to members of his
immediate family; (2) to his financial advisor or attorney but
then only to the extent necessary for them to assist him; or (3)
as required by law or to enforce legal rights.
17. Entire Understanding.
This Agreement constitutes the entire understanding between
the parties relating to Executive's employment hereunder and
supersedes and cancels all prior written and oral understandings
and agreements with respect to such matters, except for the terms
and provisions of any employee benefit or other compensation
plans (or any agreements or awards thereunder) referred to in or
contemplated by this Agreement, Executive's Contingency
Employment Agreement, and the SPRINT UNITED EMPLOYEE AGREEMENT
REGARDING PROPERTY RIGHTS AND BUSINESS PRACTICES which the
Executive has signed and by which Executive continues to be
bound.
18. Binding Effect.
This Agreement shall be binding upon and inure to the
benefit of Executive's executors, administrators, legal
representatives, heirs and legatees and the successors and
assigns of Employer.
19. Partial Invalidity.
The various provisions of this Agreement are intended to be
severable and to constitute independent and distinct binding
obligations. Should any provision of this Agreement be
determined to be void and unenforceable, in whole or in part, it
shall not be deemed to affect or impair the validity of any other
provision or part thereof, and such provision or part thereof
shall be deemed modified to the extent required to permit
enforcement. Without limiting the generality of the foregoing,
if the scope of any provision contained in this Agreement is too
broad to permit enforcement to its full extent, but may be made
enforceable by limitations thereon, such provision shall be
enforced to the maximum extent permitted by law, and Executive
hereby agrees that such scope may be judicially modified
accordingly.
20. Strict Construction.
The language used in this Agreement will be deemed to be the
language chosen by Employer and Executive to express their mutual
intent and no rule of strict construction shall be applied
against any person.
21. Waiver.
The waiver of any party hereto of a breach of any provision
of this Agreement by any other party shall not operate or be
construed as a waiver of any subsequent breach.
22. Notices.
Any notice or other communication required or permitted to
be given hereunder shall be determined to have been duly given to
any party (a) upon delivery to the address of such party
specified below if delivered personally or by courier; (b) upon
dispatch if transmitted by telecopy or other means of facsimile,
provided a copy thereof is also sent by regular mail or courier;
or (c) within forty-eight (48) hours after deposit thereof in the
U.S. mail, postage prepaid, for delivery as certified mail,
return receipt requested, addressed, in any case to the party at
the following address(es) or telecopy numbers:
If to Executive:
Ronald T. LeMay
Sprint Corporation
8140 Ward Parkway
Kansas City, MO 64114
If to Employer:
Sprint Corporation
2330 Shawnee Mission Parkway
Westwood, KS 66205
Attention: Corporate Secretary
or to such other address(es) or telecopy number(s) as any party
may designate by Written Notice in the aforesaid manner.
23. Governing Law.
This Agreement shall be governed by, and interpreted,
construed and enforced in accordance with, the laws of the State
of Kansas.
24. Gender and Number.
Wherever from the context it appears appropriate, each term
stated in either the singular of plural shall include the
singular and the plural, and the pronouns stated in either the
masculine, the feminine or the neuter gender shall include the
masculine, feminine or neuter.
25. Headings.
The headings of the Sections of this Agreement are for
reference purposes only and do not define or limit, and shall not
be used to interpret or construe the contents of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed at Westwood, Kansas, on the date above set
forth.
RONALD T. LEMAY SPRINT/UNITED MANAGEMENT COMPANY
/s/ RONALD T. LEMAY By: /s/ B. WATSON
Authorized Officer
Exhibit (10)(y)
CENTEL MATCHED DEFERRED SALARY PLAN
SECTION 1 - PLAN
1.1 Plan. Centel Corporation, a Kansas corporation,
hereby establishes this Centel Matched Deferred Salary Plan
effective with respect to Salary paid on and after July 1,
1987. All amounts deferred and accrued under this plan will
be unsecured liabilities of the Company or a Subsidiary and
will not be funded with specific assets of the Company or
any Subsidiary. This Plan supersedes the Centel Executive
Deferred Salary Plan. Any account balances in the Centel
Executive Deferred Salary Plan will be transferred to this
Plan.
1.2 Purpose. The purpose of this Plan is to provide a
means for certain management employees of the Company and
its Subsidiaries to build savings through salary deferrals.
The Plan also provides for Company credits to the same
extent as under a 401(k) plan or any similar plan sponsored
by the Company or a Subsidiary were there no limitations
imposed by the Internal Revenue Code (IRC).
SECTION 2 - DEFINITIONS
The following words and phrases have the respective
meanings stated below unless a different meaning is plainly
required by the context:
"Beneficiary" means any person who is entitled to
receive distributions under this Plan pursuant to Section 9.
"Board" means the board of directors of the Company,
the executive committee of that board and any other
committee of that board authorized to act on its behalf.
"Committee" means the committee established pursuant to
Section 10.
"Company" means Centel Corporation, a Kansas
corporation (Centel), and its successor or successors.
"Deferral Period" means a period of time containing all
pay dates occurring within a calendar month.
"Employee" means a salaried employee designated third
level or above who is employed by an Employer, and who is
(a) exempt from the provisions of Section 6 and 7 of the
Fair Labor Standards Act, by reason of the provisions of
Section 13(a)(1) of such act, and (b) not in a bargaining
unit represented by a labor organization.
"Employer" means the Company or any Subsidiary which
participates in the Plan.
"Enrollment Date" means the date when Salary Deferrals
begin, pursuant to Section 3, and may be either (a) the
first day of the payroll period of the Employee which
includes the first pay date of a calendar month or (b) the
first day of a pay period following the Employee's election
to enroll in this Plan after the cessation of contributions
to any 401(k) plan or similar plan sponsored by the Company
or a Subsidiary due to application of IRC contribution
limitations.
"Long-Term Disability Benefits" means the payments made
under the Long-Term Disability provisions of the Centel
Group Welfare Plan or any other plan maintained by the
Company or a Subsidiary which the Plan Administrator
determines to be comparable to Long-Term Disability Benefits
provided under the Centel Group Welfare Plan.
"Matching Credits" means the credits made by an
Employer pursuant to Section 5.1.
"Nonvested Amounts" means, as of the date of
determination, that portion of Matching Credits not yet
attributable to the Participant's account according to the
schedule set forth in Section 7.
"Participant" means an Employee who has met the
requirements of Section 3 for participating in the Plan or a
former Employee who is entitled to receive benefits under
the Plan.
"Plan" means this Centel Matched Deferred Salary Plan.
"Plan Administrator" means the Assistant Vice President-
Benefits and Human Resource Development of the Company or
such other person designated by the Board.
"Plan Year" means July 1 to December 31, 1987 and
thereafter each calendar year beginning January 1 and ending
December 31.
"Profit Sharing Credits" means the credits made by an
Employer pursuant to Section 5.2.
"Retirement" means termination of employment with the
Company and all Subsidiaries after age 55 under
circumstances that would result in the Participant having a
vested interest under the Centel Retirement Benefit Plan if
the Participant were a participant in that plan.
"Salary" means base pay during the Plan Year, prior to
any salary reduction elections entered into by the
Participant pursuant to this Plan and any 401(k) plan or
similar plans sponsored by the Company or a Subsidiary for
such Plan Year. Salary does not include overtime pay,
bonuses, commissions or any other extra compensation.
"Salary Deferrals" means the deferrals made by an
Employee pursuant to Section 4.1.
"Separation from Service" means the first day of an
absence from active service due to an unpaid leave of
absence.
"Severance from Service" means with respect to an
employee of the Company or any Subsidiary, the date on which
the employee resigns, retires, is discharged, dies, or
severs employment due to divestiture of his Employer, or the
first anniversary of the employee's Separation from Service
if the employee has not returned to active service by such
date.
"Subsidiary" means any corporation of which fifty
percent or more of the voting stock is owned directly or
indirectly by the Company.
SECTION 3 - PLAN PARTICIPATION
3.1 Participants. Each Employee shall become a
Participant as of the Enrollment Date next following the
date on which such Employee elects, in such manner and at
such time as specified by the Committee, to participate in
the Plan.
3.2 Timing of Elections. A Participant may elect to
participate in this Plan by giving prior written notice
authorizing a reduction in Salary in accordance with Section
4 by (a) November 30 prior to the January 1 Enrollment Date
or (b) at least 30 days prior to any other Enrollment Date
during the Plan Year.
3.3 Method of Election. A separate notice will be
required for Salary which would be paid in any year. Each
such notice shall specify either (a) the year to which
payment of the Salary Deferrals shall be deferred, which may
not be less than one year or more than ten years from the
year in which the Salary would have been paid if it had not
been deferred, but not beyond retirement, or (b) that
payment shall be deferred to the earlier of retirement or
other Severance from service.
3.4 Transferred Participants. Transfer of a
Participant between Employers will not affect the
Participant's participation in the Plan, provided that the
Participant continues to be an Employee.
3.5 Cessation of Participation. An Employee who has
become a Participant shall continue as a Participant until
such time as the full value of a Participant's accounts in
this Plan have been distributed or forfeited pursuant to
Section 8.
SECTION 4 - EMPLOYEE SALARY DEFERRALS
4.1 Employee Salary Deferrals. Each Participant may
elect to have his or her Employer reduce such Participant's
Salary in whole percentage increments up to 50% of Salary.
4.2 Effect of Deferral. To the extent possible, this
Plan will be administered in such a manner as to not affect
employee benefits and payroll deductions which are based
upon Salary except that (a) income tax withholding will be
based upon the amount of Salary paid or as directed by the
Participant; (b) payroll deductions for Social Security tax
(FICA) will be based upon Salary without giving effect to
any deferral. To the extent the Company is required to
withhold taxes or any other amounts from the Participant's
deferred Salary pursuant to any federal, state or local law,
such amounts will be withheld from the portion of the
Participant's Salary which is not deferred under this Plan.
4.3 Change in Deferrals. A Participant may request a
change, as of any pay date, in such Participant's Salary
Deferrals to another permissible deferral rate by giving
prior written notice, except that no Participant shall be
entitled to make more than four such changes in any Plan
Year other than on January 1 or a date set forth in
paragraph (b) of the definition of "Enrollment Date"
contained in Section 2 above. Changes in deferrals shall be
made as soon as practicable after receipt of notice and
shall apply solely to the Salary of the Participant
requesting the change which is attributable to periods after
the request is made and given effect. For purposes of this
Section 4.3, changes in deferral rates shall include
elections to suspend or recommence Salary Deferrals.
In the event of a change in the Salary of a
Participant, the Salary Deferral rate then in effect will be
applied as soon as practicable with respect to such changed
Salary, without action by the Participant.
SECTION 5 - EMPLOYER CREDITS
5.1 Matching Credits. Each Employer will credit to a
Participant's account an Employer Matching Credit on behalf
of each of its Employees who is a Participant in an amount
equal to seventy percent of the first 6% of Salary Deferrals
being credited under this Plan.
5.2 Profit Sharing Credits. Each Employer will credit
to a Participant's account a Profit Sharing Credit of the
same percentage of Salary as determined by the Board for
Employer Profit Sharing Contributions each year to the
Centel Retirement Savings Plan. Credits for the portion of
the Plan Year following a Participant's enrollment in this
Plan will be made in this Plan.
5.3 Deferral Suspension. Salary Deferrals and
Employer Credits in this Plan with respect to a Participant
will be suspended if the Participant continues to be
employed by the Company or a Subsidiary but ceases to be an
Employee. Whenever Employee Salary Deferrals are suspended
by a Participant, Matching Credits with respect to that
Participant will also be suspended, but Profit Sharing
Credits will continue during such period of suspension at
the rate provided under Section 5.2.
SECTION 6 - MAINTENANCE AND VALUATION OF ACCOUNTS
6.1 Maintenance of Separate Accounts. There shall be
established separate accounts on the books of the Company,
held as reserves according to generally accepted accounting
principles, for each Participant, which shall reflect all
credits made on the Participant's behalf and earnings
thereon. Subaccounts shall be established to reflect Salary
Deferrals, Matching Credits and Profit Sharing Credits.
Each Participant will be furnished a statement of his or her
accounts not less often than annually and following any
distribution or withdrawal.
6.2 Valuation of Accounts. The interest of a
Participant in his or her account(s), will be represented in
cash and will be valued and credited as follows:
(a) Salary Deferrals, Matching Credits and Profit
Sharing Credits will be added to the balance of the
Participant's accounts;
(b) account balances will be credited with interest
equal to the prime rate in effect at Harris Trust and
Savings Bank, Chicago, Illinois on the last business day of
each month; and
(c) account balances will be debited with
distributions or forfeitures.
Notwithstanding the foregoing, Participants receiving a
distribution will receive interest credit for the period
between valuation and final distribution based on the prime
rate at Harris Trust and Savings Bank, Chicago, Illinois on
the last business day of the preceding month.
SECTION 7 - VESTING
7.1 Vesting. Salary Deferrals and Profit Sharing
Credits together with the earnings thereon will be fully
vested in the Participant at all times. Matching Credits
will vest after five years of service. Years of service
means the Participant's term of service which begins on the
date last hired by the Company or any of its Subsidiaries or
predecessor companies (as well as any prior service that may
be credited under the Company's bridging of service rules
applicable to the Company's 401(k) plan) and ends with
Severance from Service.
7.2 Time Deferrals. Notwithstanding the provisions of
Section 7.1, Matching Credits, together with the earnings
thereon, relating to a Salary Deferral for a specified
number of years less than five will vest and be distributed
when such account is distributed.
7.3 Committee Discretion. The Committee may elect, in
its sole discretion, to partially or fully vest any
Nonvested Amounts for a Participant.
7.4 Special Vesting Rules for Certain Terminations.
Notwithstanding Section 7.1, Section 8.4(a) or any other
provision of the Plan to the contrary, in the case of a
termination of employment (a) on account of a divestiture or
(b) with benefits payable under the Centel Corporation
Change in Control Plan or with benefits payable under any
other plan or arrangement which provides for such benefits
by reason of a change in control, each affected Participant
will become vested (if he or she is not already) in such
Participant's subaccount established under Section 6.1 to
reflect Matching Credits (and any income thereon) consistent
with the principles, and to the same degree, prescribed for
the determination of the distributable portion of employer
matching contribution accounts under identical circumstances
under the Centel Retirement Savings Plan.
SECTION 8 - DISTRIBUTION
8.1 Method of Distribution. Upon any distribution
from a Participant's accounts, unless otherwise expressly
provided, payment will be made in cash on the basis of the
accounts' values as set forth in Section 6.2.
8.2 Hardship Distribution. The Committee may, in its
sole discretion, upon the request of a Participant, at any
time prior to termination of employment, authorize the
distribution to the Participant of a specified amount of
cash from such Participant's vested accounts for the
purposes set forth below and subject to the following rules:
(a) Each request for a distribution shall be made by
written application to the Plan Administrator supported by
such evidence as the Committee may require to establish
hardship.
(b) Amounts will be distributed to a Participant only
on account of a hardship. A distribution will be deemed to
be on account of hardship if it is necessary in the light of
immediate and heavy financial needs of the Participant. A
distribution based upon financial hardship will not exceed
the amount required to meet the immediate financial need
created by the hardship and not reasonably available from
other resources of the Participant. The determination of
the existence of financial hardship and the amount required
to be distributed to meet the need created by the hardship
will be made by the Committee in accordance with uniform and
nondiscriminatory standards.
(c) The Committee will authorize distribution of
amounts to a Participant to enable the Participant to (i)
meet any extraordinary expenses incurred on account of
accident, sickness, disability or other emergency affecting
the Participant or any of the Participant's dependents; (ii)
provide for the education of the Participant or the
Participant's dependents; (iii) purchase a residence for the
Participant and the Participant's family; or (iv) make a
major improvement on the Participant's residence.
(d) Within sixty days after the written request is
received by the Plan Administrator, the Participant shall be
advised in writing whether the request for distribution has
been approved or denied. If the request is approved,
distribution will be made as soon as practicable thereafter.
8.3 Other Distribution While Employed. A Participant
who has deferred Salary for a specified number of years, as
set forth in Section 3.3(a) will receive a distribution of
the Participant's account(s) attributable to Salary
Deferrals and corresponding Matching Credits and Profit
Sharing Credits as soon as practicable in January, April,
July or October, whichever is designated by the Participant,
of the year specified by the Participant but not beyond
retirement.
8.4 Distribution Upon Severance from Service or
Commencement of Long-Term Disability Benefits.
(a) Termination Due to Retirement, Resignation,
Discharge, Commencement of Long-Term Disability Benefits,
Death and Employer Divestiture. If a Participant terminates
employment with the Company and all Subsidiaries for any
reason during a Plan Year and is not reemployed by the
Company or a Subsidiary prior to the time distribution is
made, distribution of the Participant's accounts will begin
as soon as practicable following Severance from Service or
commencement of Long-Term Disability Benefits.
In the case of Retirement, termination of employment
pursuant to the Centel Exempt Employee Severance Pay Plan
(or any other plan maintained by an Employer which the
Committee determines to be a comparable severance pay plan),
commencement of Long-Term Disability Benefits, death or
Employer divestiture, distribution will be made of the
entire balance in the Participant's accounts. In the case of
any other termination of employment, distribution will be
made of the entire balance in the Participant's accounts
except the balance representing Nonvested Amounts, which
will be forfeited. All forfeitures will be applied as
credits against the book reserves of the Company and will be
valued for such purposes as of the end of the same month
that the balance distributed as a result of the event
causing the forfeitures are valued.
(b) Separation from Service. There will be no
Employee Salary Deferrals, Employer Matching Credits or
Profit Sharing Credits following a Separation from Service.
If a Separation from Service is followed by a Severance from
Service, the Participant's participation in the Plan will be
deemed to have terminated at such time for the purpose of
distribution under the Plan and Nonvested Amounts will be
forfeited.
SECTION 9 - BENEFICIARIES
9.1 Beneficiary Designation. A Participant may
designate, by written notice delivered prior to the
Participant's death, a beneficiary or beneficiaries to
receive all or part of the amount of the Participant's
accounts in case of the Participant's death. A designation
of beneficiary may be replaced by a new designation or may
be revoked by the Participant at any time by written notice
delivered prior to the Participant's death.
9.2 Absence of Designation. If there is no designated
Beneficiary living upon the death of a Participant or if all
such designated Beneficiaries die prior to distribution of
the Participant's balances under this Plan, the Beneficiary
shall be such one or more of the surviving spouse or
surviving descendants of such Participant and in such
proportions among them, as the Committee in its sole
discretion may determine; but if there are none then
surviving to the knowledge of the Committee the balances
will be distributed to the estate of the last survivor of
the participant and designated Beneficiaries. If the
Company, after reasonable inquiry, is unable within one year
to determine whether any designated Beneficiary did in fact
survive the event that entitled such Beneficiary to receive
distribution under this Plan, it will be conclusively
presumed that such Beneficiary did in fact die prior to such
event.
SECTION 10 - COMMITTEE
10.1 Committee. This Plan will be administered by a
committee consisting of not less than three persons
designated by the Board.
10.2 Power of Committee. Except as otherwise expressly
provided in this Plan, the Committee shall have full power
and authority, within the limits provided by this Plan:
(a) to construe this Plan and make equitable
adjustments for any mistakes or errors made in the
administration of this Plan;
(b) to determine all questions arising in the
administration of this Plan, including the power to
determine the rights of Participants and their Beneficiaries
and the amount of their respective interests;
(c) to adopt such rules and regulations as it may deem
reasonably necessary for the proper and efficient
administration of this Plan consistent with its purposes;
(d) to enforce this Plan in accordance with its terms
and with the rules and regulations adopted by the Committee;
and
(e) to do all other acts which in its judgment are
necessary or desirable for the proper advantageous
administration of this Plan.
The Committee shall act by the vote or concurrence of a
majority of its members and shall maintain a written record
of its decisions and actions. All decisions and actions of
the Committee pursuant to the provisions of the Plan shall
be final and binding upon all persons affected thereby. No
member of the Committee shall have any personal liability to
anyone, either as such member or as an individual, for
anything done or omitted to be done in good faith in
carrying out the provisions of this Plan.
SECTION 11 - ADMINISTRATION AND INTERPRETATION OF PLAN
11.1 Administration. The general administration of the
Plan and the responsibility for carrying out its provisions
on behalf of the Company and each Employer will be vested in
a Committee as set forth in Section 10.
11.2 Expenses. Expenses of administering the Plan,
including the fees and expenses of the Trustee, will be
borne by the Employer.
11.3 Trustee. The Company may make all distributions
under this Plan or it may transfer assets to a trust
established with an independent trustee to make
distributions under this Plan.
11.4 Amendments. The Board may amend this Plan in its
sole discretion. Any such amendment shall be effective at
such date as the Board may determine, except that no such
amendment, other than an amendment of a minor nature or
permitted in accordance with the terms of the trust, if any,
described in Section 11.3, may apply to any period prior to
the announcement of the amendment. The Committee may also
amend the Plan, both retroactively and prospectively, but
only to make minor changes which are technical or
administrative in nature.
11.5 Plan Termination. The Board may at any time
terminate the making of Employee Salary Deferrals, Employer
Matching Credits and Employer Profit Sharing Credits. If an
Employer ceases to be a Subsidiary, Employee Salary
Deferrals with respect to Participants of such Employer and
Employer Matching Credits and Employer Profit Sharing
Credits by such Employer will be terminated.
11.6 Non-Alienation. No right or benefit under this
Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge, and any attempt
to anticipate, alienate, sell, assign, pledge, encumber or
charge the same shall be void. No right or benefit under
this Plan shall in any manner be liable for or subject to
the debts, contracts, liabilities or torts of the person
entitled to such benefits except such claims as may be made
by the Company or any Subsidiary.
11.7 Notices. Notices, reports and statements to be
given, made or delivered to an Employee or a Participant
will be deemed duly given, made or delivered, when addressed
to the Employee or Participant, and delivered by ordinary
mail, or by Employer mail, to such Employee's or
Participant's business address or residence address on the
Employee Information System of the Company. All notices
required to be given by an Employee or a Participant will be
given on a form provided for the purpose and will be deemed
received when delivered to such Employee's or Participant's
personnel department.
11.8 Applicable Law. This Plan shall be governed by
the law of the State of Kansas.
SECTION 12 - EFFECTS OF THE MERGER
On March 9, 1993 (the "Merger Date"), the Company
became a wholly-owned subsidiary of Sprint Corporation
("Sprint"). Notwithstanding anything herein to the
contrary, effective as of the Merger Date:
(a) No employee of the Company, other than individuals
who are Participants in the Plan as of the Merger Date
("Continuing Participants"), shall become a Participant in
the Plan;
(b) Current Participants shall not be deemed to
terminate service for purposes of maintaining account
balances or other rights outstanding as of March 8, 1993,
under the Plan until they cease to be employees of Sprint
and its subsidiaries; and
(d) Account balances will be maintained for all
Continuing Participants and will be credited with interest
thereon pursuant to Section 6.2(b) of the Plan, but all
Salary Deferrals, Employer Matching Credits and Profit
Sharing Credits shall cease as of the Merger Date.
Exhibit (10)(z)
CENTEL DIRECTORS DEFERRED COMPENSATION PLAN
SECTION 1. Plan. Centel Corporation, a Kansas
corporation, hereby establishes this "Centel Directors
Deferred Compensation Plan".
SECTION 2. Definitions. The following words have
the respective meanings stated below unless a different
meaning is plainly required by the context:
(a) "Beneficiary" means any person other than a
Director who is entitled to receive distributions under
this Plan pursuant to Section 6.
(b) "Board" means the Board of Directors of the
Company or of a Subsidiary.
(c) "Committee" means the committee which
administers this Plan as provided in Section 7.
(d) "Common Stock" means shares of common stock
of the Company.
(e) "Company" means Centel Corporation, a Kansas
corporation, and its successors.
(f) "Director" means an individual who is (1)
serving as a member of a Board or who has been
nominated to serve as a member of a Board and (2)
receives compensation for such service other than as
employee of the Company or a Subsidiary.
(g) "Market Value" of Common Stock on any date
means the closing price of the Common Stock on that day
on the Composite Transactions Tape, as subsequently
reported in The Wall Street Journal, or, if no sale of
the Common Stock shall have been made on that date,
such closing price on the next preceding date on which
there was a sale.
(h) "Plan" means the plan set forth in this
instrument, and known as the "Centel Directors Deferred
Compensation Plan".
(i) "Subsidiary" means any corporation fifty
percent or more of the voting stock of which is owned,
directly or indirectly, by the Company.
(j) "Unit" means the equivalent under this Plan
of one share of Common Stock.
(k) "Value" of a Unit on any date means the
Market Value on such date of one share of Common Stock.
SECTION 3. Participation. A Director may elect to
defer the payment of:
(a) annual or quarterly compensation for service
as a Director;
(b) compensation paid for attendance at meetings
of the Board and of committees of the Board; or
(c) annual or quarterly compensation for service
as a Director plus all additional compensation paid for
attendance at meetings of the Board and of committees
of the Board;
by giving notice: (1) if the Director is a Director on
November 30 of any year, at least thirty days prior to
January 1 of the year for which the election is to be
effective, (2) if the Director is not a Director on November
30 of any year, within 20 days after the date on which the
Director is first elected a Director, or (3) within 20 days
after any amendment of this Plan. Each notice shall continue
in force unless and until revoked or modified by notice at
least thirty days before the January 1 on which such
revocation or modification is to become effective. All
amounts deferred and accrued under this Plan will be
unsecured liabilities of the Company or a Subsidiary and
will not be funded with any specific assets of the Company
or any Subsidiary.
SECTION 4. Method of Deferment.
(a) A Director who elects to defer compensation
under this Plan may elect to have such compensation
credited to a prime rate account, to a Common Stock
account, or in increments of 25%, to both forms of
account. Amounts accrued in accounts may not be
transferred from one form to the other. A different
election may be made with respect to compensation
earned in each calendar year.
(b) An amount equal to the compensation which a
Director has elected to have deferred will be credited
by the Company in a deferred compensation account in
the name of the Director on the date such compensation
would otherwise become payable to the director.
(c) Prime rate account. Interest equivalents
will be credited on the balance in a Director's prime
rate account at the end of each calendar quarter. After
installment payments to the Director or a Beneficiary
have commenced under this Plan interest will be paid
quarterly in cash to the Director or Beneficiary, as
the case may be. For the purpose of crediting interest,
(1) interest will be computed at the prime rate of
interest in effect at Harris Trust and Savings Bank,
Chicago, Illinois during such quarter, and (2) the
balance accrued in a Director's deferred compensation
account during any quarter will be the average of the
balances in the Director's account at the beginning of
the quarter and at the end of each month during the
quarter.
(d) Common Stock account. When compensation is
credited to a Common Stock account, the amount of
compensation will be divided by the Market Value on the
date such compensation is credited to the account to
determine the number of Units (to the nearest one-
hundredth) to be credited to such account. On each
record date for determination of shareowners entitled
to receive a dividend on the outstanding shares of
Common Stock, there will be credited to each Common
Stock account that number of additional Units equal to
the number of shares (and fraction of a share to the
nearest one-hundredth) of Common Stock which could have
been purchased at Market Value on that date with the
amount, if paid in cash, or the value, if paid in
property, of the dividend to be paid on a number (to
the nearest one-hundredth) of shares of Common Stock
equal to the number of Units (to the nearest one-
hundredth) in that account on such record date. No
account of a Director who has terminated service as a
Director on or prior to a record date shall be credited
with additional Units, however, if the Director would
have been entitled to receive the dividend as a
shareowner of record on such record date had the Units
in such account been distributed in the form of shares
of Common Stock on or prior to such record date.
SECTION 5. Distributions.
(a) Except as provided in Section 5(b), the
timing and manner of each distribution to a Director
under the Plan shall be made pursuant to such
Director's Valid Election, as defined in the following
sentence. A "Valid Election" means an election by the
Director which (i) is irrevocable except as provided in
Section 5(g), (ii) is made by the Director prior to the
first day of the calendar year in which such Director's
termination of service occurs, (iii) is made in writing
pursuant to such rules as the Committee may determine,
and (iv) provides for a distribution pursuant to
paragraphs (b) or (c).
(b) If the Director so elects pursuant to a
Valid Election, or if the Director makes no Valid
Election, upon a termination of service as a Director,
the amounts accrued in the Director's accounts will be
distributed to the Director in a lump sum as soon as
practicable after January 31 of the calendar year
following the calendar year in which the Director's
termination of service occurs (Distribution Date);
provided, however, that no payment of amounts
attributable to deferrals credited to a Director's
Common Stock account on or before October 10, 1991 will
be made less than six months after the Director's last
acquisition, prior to termination of service as a
Director, of a Centel equity security (as defined in
Securities and Exchange Commission Rule 16a-l(d)),
which acquisition is not exempt from Section 16(b) of
the Securities Exchange Act of 1934.
(c) Pursuant to the terms of a Valid Election,
distributions shall be paid under the Plan commencing
on or after termination of service as a director as
follows:
(i) in a lump sum as soon as practicable after
the Director's termination of service; or
(ii) in installment payments of principal and
interest which (A) shall be paid for a period
not exceeding the Director's life expectancy
determined at the time of a termination of
service (Life Expectancy) and (B) shall
commence as of the Distribution Date; or
(iii) in installment payments of the interest
accrued on amounts in the Director's deferred
compensation accounts; such interest shall be
paid for the Life Expectancy and shall
commence as of the Distribution Date, with
the principal and any other amounts credited
to the Director's deferred compensation
accounts being paid as soon as practicable
after the Director's death; or
(iv) pursuant to any method determined by the
Director, provided that such method provides
for full payment of all amounts credited to
the Director's deferred compensation accounts
no later than a date which is as soon as
practicable after the Director's death.
(d) All distributions of amounts accrued in a
Director's deferred compensation account, whether
accrued in a prime rate account or in a Common Stock
account, will be paid exclusively in cash. If
distribution cannot be made on the day prescribed, it
will be made as soon thereafter as practicable as of
that day. The Value of Units for purposes of
distribution shall be their Value on the date as of
which distribution is deemed made.
(e) Notwithstanding the foregoing, a Director who
has an interest in a prime rate account under this Plan
may elect, by giving notice a least 60 but not more
than 120 days prior to January 1 of the fifth year
following the year in which deferred compensation was
accrued in a Director's prime rate account to have the
amount accrued in such fifth preceding year, together
with interest credited with respect thereto, paid in
cash to the Director on the January 31 following
receipt of the notice.
(f) In the event of a Director's death, any
amounts to which the Director is entitled hereunder
will be distributed to the Beneficiary entitled thereto
in such manner as is determined by the Committee in its
sole discretion. The Company may consult with the
beneficiary prior to such determination.
(g) Notwithstanding any provision to the contrary
hereunder, at any time, the Director may change a Valid
Election by election to accelerate the date(s) of
payment specified in such prior election, subject to
the following circumstances:
(i) the Committee in its sole discretion consents
to the change in Valid Election, and
(ii) the amounts which are subject to such
accelerated payment date(s) shall be reduced
by 6%. Subject to the preceding sentence, the
calculation of such reduction shall be made
in the sole discretion of the Committee.
SECTION 6. Anti-Dilution. In the event of any change
in capitalization which affects the Common Stock, such as a
stock dividend, a stock distribution, a stock split-up or a
subdivision or combination of shares, such adjustments, if
any, as the Board in its discretion deems appropriate to
reflect such change shall be made with respect to the number
of Units in each Common Stock account.
SECTION 7. Beneficiaries.
(a) A Director may, by giving notice during the
Director's lifetime, designate (1) a Beneficiary or
Beneficiaries to whom distribution of the Director's
deferred compensation accounts will be made in the
event of the Director's death prior to the full receipt
of the Director's interests under this Plan, and (2)
the proportions to be distributed to each such
designated Beneficiary if there be more than one. Any
such designation may be revoked or changed by the
Director at any time and from time to time by similar
notice. If there if no such designated Beneficiary
living upon the death of the Director or if all such
designated Beneficiaries die prior to distribution of
all of a Director's interests under this Plan, the
Beneficiary shall be such one or more of the surviving
spouse, or surviving descendants, of such Director and
in such proportions among them, as the Committee in its
sole discretion may determine; but if there are none
then surviving to the knowledge of the Committee the
then remaining balance of such interest will be
distributed to the estate of the last survivor of the
Director and designated Beneficiaries.
(b) If the Company, after reasonable inquiry, is
unable within one year to determine whether any
designated Beneficiary did in fact survive the event
that entitled such Beneficiary to receive distribution
under this Plan, it will be conclusively presumed that
such Beneficiary did in fact die prior to such event.
SECTION 8. Committee. This Plan will be administered
by a Committee consisting of the members of the Board of the
Company who are employees of the Company or its Subsidiaries
and do not receive compensation for serving as Directors.
Except as otherwise expressly provided in this Plan,
the Committee shall have full power and authority, within
the limits provided by this Plan:
(a) to construe this Plan and make equitable
adjustments for any mistakes or errors made in the
administration of this Plan;
(b) to determine all questions arising in the
administration of this Plan, including the power to
determine the rights of Directors participating in this
Plan and their Beneficiaries and the amount of their
respective interests;
(c) to adopt such rules and regulations as it may
deem reasonably necessary for the proper and efficient
administration of this Plan consistent with its
purposes;
(d) to enforce this Plan in accordance with its
terms and with the rules and regulations adopted by the
Committee; and
(e) to do all other acts which in its judgment
are necessary or desirable for the proper and
advantageous administration of this Plan.
The Committee shall act by the vote or concurrence of a
majority of its members and shall maintain a written record
of its decisions and actions. All decisions and actions of
the Committee pursuant to the provisions of this Plan shall
be final and binding upon all persons affected thereby. No
member of the Committee shall have any personal liability to
anyone, either as such member or as an individual, for
anything done or omitted to be done in good faith in
carrying out the provisions of this Plan.
SECTION 9. Non-Alienation. No right or benefit
under this plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance or charge,
and any attempt to anticipate, alienate, sell, assign,
pledge, encumber or charge the same shall be void. No right
or benefit under this Plan shall in any manner be liable for
or subject to the debts, contracts, liabilities or torts of
the person entitled to such benefits except such claims as
may be made by the Company or any Subsidiary.
SECTION 10. Notice. Any notice authorized or
required to be given to the Company under this Plan shall be
deemed given upon delivery in writing, signed by the person
giving the notice, to the Secretary of the Company or such
other officer as may be designated by the Chairman of the
Board.
SECTION 11. Plan Modifications. The Board of the
Company may, at any time terminate this Plan or may, from
time to time, amend any provision of this Plan in such
manner and to such extent as it may, in its discretion, deem
to be advisable. In the event this Plan is terminated, any
amount remaining in any Director's account will be
distributed in such manner as is determined by the Committee
in its sole discretion.
SECTION 12. Applicable Law. This Plan shall be
governed by the law of the State of Illinois.
Exhibit (10)(aa)
CENTEL CORPORATION
DIRECTOR STOCK OPTION PLAN
1. Purpose of Plan. The purpose of the Director Stock Option
Plan (the Plan) is to promote the long-term financial
interests of the company and its subsidiaries by:
(a) providing an incentive for all non-employee members of
the Centel Board of Directors (the Directors) to
maximize the long-term value of the Common Stock and
otherwise act in the best interest of shareowners;
(b) providing Directors with the opportunity to acquire a
greater stake in the future of the Company and its
subsidiaries through stock ownership; and
(c) attracting and retaining highly qualified Directors who
will contribute in exceptional ways to the long-term
financial success of the Company and its subsidiaries.
2. Definitions. The following words and phrases have the
respective meanings indicated below unless a different
meaning is plainly implied by the context.
(a) "Administrative Committee" means a committee of
management employees which, pursuant to Section 4, has
been appointed by the Board Committee and authorized to
assume designated responsibilities and perform
designated functions.
(b) "award" means the grant of stock options on a date
specified in Section 7 to an Eligible Director pursuant
to this Plan.
(c) "Board Committee" means the Organization and
Compensation Committee of the Board of Directors of
Sprint.
(d) "Common Stock" or "stock," or "shares" means shares of
common stock of Sprint.
(e) "Company" means Centel Corporation, a Kansas
corporation, and its successors.
(f) "date of award" means the date designated by this Plan
for the award of stock options.
(g) "Eligible Director" means any present or future member
of the Board of Directors of the company (the Board or
Board of Directors) who is (1) a member of the Board of
Directors on the date an award is made, and (2) not an
employee of the Company or any subsidiary.
(h) "letter of agreement" means a letter from the Board
Committee, or from the Administrative Committee or
Administrative Committee member acting on behalf of the
Board Committee, to a Director, indicating that the
Director is a participant in the Director Stock Option
Plan, the number of shares subject to option to be
granted to the participant, the option price, the date
or dates when such option may be exercised, and other
provisions consistent with the Plan.
(i) "market value" of Common Stock on any date means the
closing price of Common Stock on that date on the New
York Stock Exchange Composite Transactions list, as
subsequently reported in The Wall Street Journal, or,
if no sale of the Common Stock shall have been made on
that date, such closing price on the next preceding
date on which there was a sale.
(j) "participant" means an Eligible Director who has been
awarded options pursuant to this Plan.
(k) "Plan" means the plan set forth in this Director Stock
Option Plan, as it may be amended from time to time,
and known as the "Director Stock Option Plan."
(l) "Sprint" shall mean Sprint Corporation, a Kansas
corporation, and its successors.
(m) "stock option" or "option" is a right granted to a
participant to purchase a designated number of shares
of Common Stock at a stated price for a stated period
of time. The participant may exercise that right
according to Section 9 of the Plan as to all or a
portion of the shares at a specified time or times.
Stock options granted under this Plan are not intended
to qualify as incentive stock options under Internal
Revenue Code Section 422A.
(n) "subsidiary" means any corporation fifty percent or
more of the voting stock of which is owned, directly or
indirectly, by the Company or Sprint.
3. Administration of Plan.
(a) The Plan shall be administered by the Board Committee.
(b) The Board Committee shall not have authority or
discretion to determine (1) the Directors to be granted
options, (2) the times at which options shall be
granted, (3) the number of shares subject to each
option, (4) the period during which each option shall
become exercisable, or (5) the terms contained in each
letter of agreement between the company and
participant. All such matters are fixed and
determinable according to the provisions of the Plan
applicable thereto.
(c) The Board Committee shall have full authority and
discretion to adopt rules and regulations and prescribe
or approve the forms to carry out the purposes and
provisions of this Plan. The Board Committee's
interpretation and construction of any provision of
this Plan or any option granted hereunder shall be
binding and conclusive, unless otherwise determined by
the Board.
4. Appointment of Administrative Committee.
(a) The Board Committee may appoint an Administrative
Committee to:
(1) construe this Plan and make equitable adjustment
for any mistakes, omissions, or errors made in the
administration of this Plan;
(2) adopt such rules and regulations as may be deemed
reasonably necessary for the proper and efficient
administration of this Plan consistent with its
purposes;
(3) enforce this Plan in accordance with its terms and
with the rules and regulations adopted for the
Plan; and
(4) do all other acts which in the Administrative
Committee's reasonable judgment are necessary or
desirable for the proper and advantageous
administration of this Plan consistent with the
Plan's purposes.
(b) The Administrative Committee shall not have authority
or discretion over matters delineated in Section 3(b)
of the Plan.
5. Eligibility. All present or future members of the Board of
Directors who are members of the Board of Directors on the
date an award is made, and are not employees of the company
or any subsidiary, shall be Eligible Directors under the
Plan, and participants in this Plan.
6. Shares Subject to Plan. Subject to adjustment as provided
in Section 15, the aggregate number of shares subject to
options granted under this Plan shall not exceed 288,396
shares of Common Stock, par value $2.50 per share (the
shares), which may be treasury shares reacquired by Sprint
or authorized and unissued shares, or a combination of both.
7. Size and Frequency of Option Grants.
(a) Each Eligible director shall be granted options on the
following dates to purchase the following number of
shares:
<TABLE>
<CAPTION>
Date of Award Number of Shares
<S> <C>
November 11, 1988 11,250
November 1, 1989 6,750
November 1, 1990 6,750
November 1, 1991 3,000
November 1, 1992 3,000
November 1, 1993 3,000
</TABLE>
(b) Each new Eligible Director shall be granted 5,000
options upon election to the Board of Directors of the
Company.
(c) No Eligible Director shall receive more than one award
in any calendar year.
8. Option Price. The option price per share under each option
granted under this Plan shall be 100% of the market value
per share on the date an option is granted, but in no event
shall the option price be less than the par value per share.
9. Exercise of Options. Each option granted under this Plan
shall be fully exercisable as of the date it is awarded to
the participant. Shares shall be issued to the participant
pursuant to the exercise of an option only upon receipt by
Sprint from the participant of written notice of exercise,
specifying the number of shares with respect to which the
option is being exercised, accompanied by payment in full
either in cash or by a single exchange of shares of Common
Stock previously owned by the optionee, or a combination of
both, in an amount or having a combined value equal to the
aggregate purchase price for the shares subject to the
option or portion thereof being exercised. The value of the
previously owned shares of Common Stock exchanged in full or
partial payment for the shares purchased upon the exercise
of an option shall be equal to the aggregate market value,
as defined in Section 2, of such shares on the date of the
exercise of such option. Previously owned shares acquired
via prior exercise of a stock option granted under this Plan
shall not be accepted in full or partial payment for shares
purchased upon the exercise of an option unless such
previously owned shares have been held by the participant
for at least six months subsequent to such prior exercise.
10. Term of Option. The unexercised portion of any option
granted hereunder shall expire ten years after the date the
option is granted.
11. Nontransferability of Option. No option granted under this
Plan shall be transferable except by will or the laws of
descent or pursuant to a qualified domestic relations order
as defined by the Internal Revenue Code of 1986. Each such
option shall be exercisable during the participant's
lifetime only by the participant.
12. Termination of Service. Upon termination of service of a
participant for any reason including expiration of term with
no subsequent reelection, resignation, retirement, total
disability, or death, all options previously granted to the
participant may be exercised within a one-year period
following the date of termination, but in no event earlier
than six months, nor later than ten years, after the date of
grant of such options. On or before March 8, 1993,
termination of service shall mean termination of service as
a Director of the Company. Directors who become Directors
of Sprint Corporation on March 9, 1993, shall not be deemed
to have terminated service for purposes of determining when
an option lapses under this Section 12. On or after March
9, 1993, termination of service shall mean termination of
service as a Director of Sprint. Upon the death of a
participant, options may be exercised by the legal
representative of the deceased participant's estate.
13. Nonalienation of Benefits. No right or benefit under this
Plan shall be subject to anticipation, alienation, sale,
assignment, pledge, encumbrance or charge and any attempt to
anticipate, alienate, sell, assign, pledge, encumber or
charge the same shall be void. No right or benefit under
this Plan shall in any manner be liable for or subject to
the debts, contracts, liabilities or torts of the person
entitled to such benefits except such claims as may be made
by the Company, Sprint or any subsidiary. If any
participant or beneficiary hereunder should become bankrupt
or attempt to anticipate, alienate, sell, assign, pledge,
encumber or charge any right or benefit under this Plan,
such right or benefit shall, in the sole discretion of the
Board Committee (or of the Administrative Committee acting
on behalf of the Board Committee), cease, and in such event,
the Company or Sprint shall hold or apply the same or any
part thereof for the benefit of such participant or
beneficiary, such person's spouse, children or other
dependents, or any of them, in such manner and in such
proportions as the Committee in its sole discretion shall
determine.
14. Indemnification of Committee Members. In addition to such
other rights of indemnification as any person may have as a
director, officer or member of the Board Committee or
Administrative Committee, each member of the Committees
shall be indemnified by the Company against the reasonable
expenses, including attorney's fees, actually and
necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal
therein, to which such person may be a party by reason of
any action taken or failure to act under or in connection
with this Plan, and against all amounts paid by such person
in settlement thereof (provided such settlement is approved
by legal counsel selected or approved by the company), or
paid by such person in satisfaction of a judgment in any
such action, suit or proceeding, except in relation to
matters as to which it shall be adjudged in such action,
suit or proceeding, that such Committee member is liable for
gross misconduct, provided that within 60 days after the
institution of such action, suit or proceeding, such
Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the
same.
15. Adjustment in Number of Shares and Option Price. In the
event of any subdivision or combination of the outstanding
shares of Sprint by reclassification or otherwise, or in the
event of the payment of a stock dividend, a capital
reorganization, a reclassification of shares, a
consolidation or merger, or the sale, lease or conveyance of
substantially all the assets of Sprint, the Board Committee
shall make appropriate and equitable adjustments in the
number and kind of shares with respect to which all
outstanding options or portions thereof then unexercised,
shall be exercisable. Any such adjustment made by the Board
Committee shall be final and binding upon all participants,
the Company, Sprint and all other interested persons.
16. Compliance with Rule 16b-3. The intent of this Plan is to
qualify for the exemption provided by Rule 16b-3 of the
Securities Exchange Act of 1934, as amended. To the extent
any provision of the Plan does not comply with the
requirements of Rule 16b-3, it shall be deemed inoperative
and shall not affect the validity of the Plan. In the event
Rule 16b-3 is revised or replaced, the Board Committee, or
the Administrative Committee acting on behalf of the Board
Committee, may exercise discretion to modify this Plan in
any respect necessary to satisfy the requirements of the
revised exemption or its replacement.
17. Amendment and Discontinuance. The Board of Directors of the
Company may alter, suspend or terminate this Plan; provided,
however, that (1) no such action shall increase the term for
which any option may be granted, or change in any way the
grants made in accordance with Section 7, or increase the
number of shares available under the Plan (other than as
provided in Section 15), or reduce the minimum option price
per share as provided in Section 8, (2) if required to
qualify the Plan under Rule 16b-3 of the Securities Exchange
Act of 1934, no amendment which alters the amount, price or
timing of awards granted under the Plan shall be made more
than once every six months, other than to comport with
changes in the Internal Revenue Code of 1986, or the rules
thereunder, and (3) no action pursuant to this Section 17
shall materially and adversely affect any outstanding
options without the consent of the respective participants.
EXHIBIT (11)
SPRINT CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
(In Millions, Except Per Share Data)
Twelve Months Ended
December 31,
1993 1992 1991
PRIMARY EARNINGS PER SHARE
Income from continuing operations $ 480.6 $ 496.1 $ 472.7
Preferred stock dividends (2.8) (3.5) (4.1)
477.8 492.6 468.6
Discontinued operations, net (12.3) 49.4
Extraordinary losses on early
extinguishments of debt, net (29.2) (16.0) (1.9)
Cumulative effect of changes in
accounting principles, net (384.2) 22.7
Earnings applicable to common stock $ 52.1 $ 499.3 $ 516.1
Weighted average number of common
shares <1> 343.7 337.2 333.5
Primary earnings (loss) per share
Continuing operations $ 1.39 $ 1.46 $ 1.41
Discontinued operations (0.04) 0.15
Extraordinary item (0.08) (0.05) (0.01)
Cumulative effect of changes in
accounting principles, net (1.12) 0.07
Total $ 0.15 $ 1.48 $ 1.55
FULLY DILUTED EARNINGS PER SHARE
Income from continuing operations, net
of preferred stock dividends $ 477.8 $ 492.6 $ 468.6
Convertible preferred stock dividends 0.6 0.8 0.9
478.4 493.4 469.5
Discontinued operations, net (12.3) 49.4
Extraordinary losses on early
extinguishments of debt, net (29.2) (16.0) (1.9)
Cumulative effect of changes in
accounting principles, net (384.2) 22.7
Earnings as adjusted for purposes of
computing fully diluted earnings per
share $ 52.7 $ 500.1 $ 517.0
Weighted average number of common
shares 343.7 337.2 333.5
Additional dilution for common stock
equivalents and dilutive securities 2.0 3.1 3.2
Total 345.7 340.3 336.7
Fully diluted earnings (loss) per
share
Continuing operations $ 1.38 $ 1.45 $ 1.40
Discontinued operations (0.04) 0.15
Extraordinary item (0.08) (0.05) (0.01)
Cumulative effects of changes in
accounting principles (1.11) 0.07
Total $ 0.15 $ 1.47 $ 1.54
<1>Weighted average number of common shares outstanding has been
adjusted for dilutive common stock equivalents using the treasury
stock method.
EXHIBIT (12)
SPRINT CORPORATION
COMPUTATION OF RATIO OF
EARNINGS TO FIXED CHARGES
(In Millions)
1993 1992 1991 1990 1989
Income from continuing
operations $480.6 $496.1 $472.7 $351.1 $353.0
Capitalized interest (8.1) (11.3) (15.0) (16.9) (21.4)
Income tax provision 295.3 282.3 242.9 173.9 151.9
Subtotal 767.8 767.1 700.6 508.1 483.5
Fixed charges
Interest charges 460.5 522.4 563.3 549.9 556.5
Interest factor of
operating rents 117.8 116.3 105.6 94.6 86.4
Pre-tax cost of
preferred stock
dividends of
subsidiaries 1.6 2.1 2.4 2.5 2.6
Total fixed charges 579.9 640.8 671.3 647.0 645.5
Earnings, as adjusted $1,347.7 $1,407.9 $1,371.9 $1,155.1 $1,129.0
Ratio of earnings to
fixed charges <1> 2.32 2.20 2.04 1.79 1.75
<1>Earnings as computed for the ratio of earnings to fixed
charges includes the nonrecurring merger, integration and
restructuring costs of $293 million recorded in 1993 and
nonrecurring charges of $58 million (after the effect of
minority interest) recorded in 1990. In the absence of these
nonrecurring costs, the ratio of earnings to fixed charges
would have been 2.83 and 1.87 for 1993 and 1990, respectively.
NOTE : The above ratios have been computed by dividing fixed
charges into the sum of (a) income from continuing operations
less capitalized interest included in income, (b) income
taxes, and (c) fixed charges. Fixed charges consist of
interest on all indebtedness (including amortization of debt
issuance expenses), the interest component of operating rents
and the pre-tax cost of preferred stock dividends of
subsidiaries.
EXHIBIT (21)
SPRINT CORPORATION
SUBSIDIARIES OF REGISTRANT
The registrant is the parent. The subsidiaries of the registrant
are as follows:
Percentage
Of Voting
Securities
Owned
Jurisdiction Of By Its
Incorporation Or Immediate
Name Organization Parent
Carolina Telephone and Telegraph Co. North Carolina 100
Subsidiaries
Carolina Telephone Long Distance,
Inc. North Carolina 100
North Carolina RSA 6 Limited Delaware 88
Partnership Partnership
Centel Corporation Kansas 100
Subsidiaries:
C FON Corporation Delaware 100
Centel Cable Investment Company Delaware 100
Centel Capital Corporation Delaware 100
Centel Cellular Company of Alabama Delaware 100
Centel Cellular Company of Mexico Delaware 100
Centel Credit Company Delaware 100
Centel Directory Company Delaware 100
Subsidiary:
CenDon Partnership, The Illinois 50
Partnership
Centel-Information Systems, Inc. Delaware 100
Centel-Texas, Inc. Texas 100
Subsidiary:
Central Telephone Company of Texas 100
Texas
Central Telephone Company Delaware 97
Subsidiaries:
Central Telephone Company of
Florida Florida 100
Central Telephone Company of
Illinois Illinois 100
Central Telephone Company of
Virginia Virginia 100
New Centel Communications Company Delaware 100
Subsidiary:
Centel Videopath, Inc. Illinois 100
Sprint Cellular Company Delaware 100
Subsidiaries:
Cellular 7 Minnesota 6
Partnership
Centel Cellular Investment Delaware 100
Company
Subsidiaries:
Centel Cellular Company of Delaware 100
Laredo
Centel Cellular Company of Virginia 100
Petersburg
Subsidiaries:
Petersburg Cellular Delaware 22
Partnership Partnership
Petersburg Cellular Telephone
Company, Inc. Virginia 100
Subsidiary:
Petersburg Cellular Delaware 51
Partnership Partnership
Centel Cellular Company of Delaware 100
Sioux City
Subsidiary:
Sioux City Cellular District of
Partnership Columbia 95
Partnership
Allentown MSA Limited Partnership Delaware 17
Partnership
Chicago MSA Limited Partnership Illinois 5
Partnership
Cincinnati MSA Limited Delaware 1
Partnership Partnership
GTE Mobilnet of Austin Limited Delaware 1
Partnership Partnership
GTE Mobilnet of Fort Wayne
Limited Partnership Delaware 25
Partnership
GTE Mobilnet of Ohio Limited
Partnership Delaware 4
Partnership
GTE Mobilnet of South Texas
Limited Partnership Delaware 9
Partnership
Kansas City MSA Limited Delaware 20
Partnership Partnership
Orlando MSA Limited Partnership Delaware 15
Partnership
St. Joseph MSA Limited Delaware 20
Partnership Partnership
Centel Cellular Investment Company
of Greensboro North Carolina 100
Subsidiary:
Centel Cellular Company of North
Carolina Limited Partnership North Carolina 5
Centel Cellular Company of
Charlottesville Virginia 100
Centel Cellular Company of Florida Delaware 100
Subsidiaries:
Centel Cellular Company of Florida 60
Tallahassee Limited Partnership Partnership
Centel Cellular Company of Ft. Florida 70
Walton Beach Limited Partnership Partnership
Florida 9 RSA Limited Florida 49
Partnership Partnership
Centel Cellular Company of Delaware 100
Hickory
Subsidiary:
Centel Cellular Company of North Carolina
Hickory Limited Partnership Partnership 97
Centel Cellular Company of Iowa Delaware 100
Subsidiaries:
Waterloo MSA Limited Partnership Delaware 89
Partnership
Iowa RSA 5 Limited Partnership Iowa Partnership 7
Iowa RSA No. 13 Limited Iowa Partnership 30
Partnership
Centel Cellular Company of Nevada
Limited Partnership Nevada Partnership 72
Centel Cellular Company of New Delaware 100
Mexico
Centel Cellular Company of North North Carolina
Carolina Limited Partnership Partnership 57
Centel Cellular Company of Peoria Illinois 100
Centel Cellular Company of South
Carolina Delaware 100
Centel Cellular Company of Texas
Limited Partnership Texas Partnership 67
Centel Cellular Company of Virginia Virginia 100
Subsidiaries:
Virginia RSA 1 Limited Delaware 5
Partnership
Centel Cellular Company of Virginia 100
Lynchburg
Centel Cellular Company of Virginia 75
Danville Limited Partnership Partnership
Virginia 10 RSA Limited Virginia 33
Partnership Partnership
Virginia 10 RSA Resale Limited Virginia 33
Partnership Partnership
Centel Nebraska, Inc. Delaware 100
Subsidiary:
Omaha Cellular General Nebraska 50
Partnership Partnership
Subsidiary:
Omaha Cellular Limited Nebraska 27
Partnership Partnership
Subsidiaries:
RSA 1 Limited Partnership Iowa Partnership 4
Iowa 8-Monona Limited Colorado 2
Partnership Partnership
Dubuque MSA Limited Partnership Delaware 85
Partnership
Georgia RSA No. 1 Limited Delaware 20
Partnership Partnership
GTE Mobilnet of Indiana RSA #3 Indiana 20
Limited Partnership Partnership
Illinois Independent RSA No.3 Illinois 18
General Partnership Partnership
Illinois Valley Cellular RSA 2-II Illinois 40
Partnership Partnership
Iowa 15-Dickinson Limited Colorado 7
Partnership Partnership
Iowa 16-Lyon Limited Partnership Colorado 8
Partnership
Iowa RSA No. 14 Limited Partnership Iowa Partnership 6
L. J. Systems Corp. Iowa 100
North Carolina RSA 6 Limited Delaware 12
Partnership Partnership
North Carolina RSA 15 North Sector North Carolina
Limited Partnership Partnership 67
Pennsylvania 3 Wireline Settlement Delaware 28
Limited Partnership Partnership
Pennsylvania 4 Wireline Settlement Delaware 33
Limited Partnership Partnership
Pennsylvania RSA 10B(I) Limited Delaware 33
Partnership Partnership
RSA 11 Limited Partnership Iowa Partnership 14
TeleSpectrum, Inc. Kansas 100
Subsidiaries:
Empire Cellular, Inc. Kansas 100
Subsidiary:
New York MSA Limited New York 10
Partnership Partnership
TeleSpectrum of Virginia, Inc. Virginia 100
Charleston-North Charleston MSA Delaware 75
Limited Partnership Partnership
Greenville MSA Limited Delaware 89
Partnership Partnership
Raleigh-Durham MSA Limited
Partnership Delaware 85
Partnership
South Bend/Mishawaka MSA Limited
Partnership Delaware 84
Partnership
Susquehanna Cellular
Communications Limited Partnership Delaware 87
Partnership
Toledo MSA Limited Partnership Delaware 75
Partnership
Tyler/Longview/Marshall MSA
Limited Partnership Delaware 60
Partnership
Youngstown-Warren MSA Limited
Partnership Delaware 77
Partnership
Tennessee RSA 8 Limited Partnership Delaware 50
Partnership
Texas RSA 7B1 Limited Partnership Delaware 25
Partnership
Texas RSA 9B3 Limited Partnership Texas Partnership 70
Texas RSA 10B4 Limited Partnership Texas Partnership 75
Texas RSA No. 15B1 Limited Texas Partnership 51
Partnership
Virginia Metronet, Inc. Virginia 100
Subsidiary:
RCTC Wholesale Company Virginia 27
Partnership
Virginia RSA 2 Limited Partnership Delaware 5
Partnership
DirectoriesAmerica, Inc. Kansas 100
Subsidiary:
Sprint Publishing & Advertising, Kansas 100
Inc.
Florida Telephone Corporation Florida 100
North Supply Company Ohio 100
Subsidiaries:
NSC Advertising, Inc. Kansas 100
North Supply Company of Lenexa Delaware 100
North Supply International, Ltd. Kansas 100
Northstar Transportation, Inc. Kansas 100
Sprint OEM Products Group, Inc. Kansas 100
S FON Corporation Delaware 100
Sprint Capital Corporation Delaware 100
Sprint Asian American, Inc. Kansas 100
Sprint Mid-Atlantic Telecom, Inc. North Carolina 100
Sprint/United Management Company Kansas 100
UCOM, Inc. Missouri 100
Subsidiary:
Sprint Communications Company L.P. Delaware 34
Partnership
United Telephone Company of the South Carolina 100
Carolinas
Subsidiaries:
South Carolina RSA No. 2 Cellular South Carolina
General Partnership Partnership 50
South Carolina RSA No. 8 Cellular South Carolina
General Partnership Partnership 50
United Telephone Long Distance, Inc. South Carolina 100
United Telephone Company of Eastern Delaware 100
Kansas
Subsidiary:
Sprint/United Midwest Management
Services Company Kansas 20
United Telephone Company of Florida Florida 97
Subsidiary:
United Telephone Long Distance, Inc. Florida 100
United Telephone Company of Indiana, Indiana 100
Inc.
Subsidiary:
Indiana RSA 2 Partnership Delaware 75
Partnership
United Telephone Company of Kansas Kansas 100
Subsidiaries:
Sprint/United Midwest Management
Services Company Kansas 80
United Teleservices, Inc. Kansas 100
United Telephone Company of Minnesota Minnesota 100
United Telephone Company of Missouri Missouri 100
United Telephone Company of New New Jersey 100
Jersey, Inc.
United Telephone Company of the Oregon 100
Northwest
United Telephone Company of Ohio Ohio 100
Subsidiaries:
United Telephone Communications
Services of Ohio, Inc. Ohio 100
Ohio RSA 2 Limited Partnership Delaware 67
Partnership
Ohio RSA 5 Limited Partnership Delaware 58
Partnership
Ohio RSA 6 Limited Partnership Delaware 80
Partnership
United Telephone Long Distance, Inc. Ohio 100
United Telephone Long Distance of
Indiana, Inc. Indiana 100
United Telephone Company of Pennsylvania 100
Pennsylvania, The
Subsidiaries:
Joint Underground Locating Services, Pennsylvania 100
Inc.
Pennsylvania RSA 1 Limited Delaware 80
Partnership Partnership
Pennsylvania RSA No. 6(I) Delaware 57
Partnership
Pennsylvania RSA 10B(I) Limited Delaware 67
Partnership Partnership
Pennsylvania RSA 12 Limited Delaware 67
Partnership Partnership
United Telephone Long Distance, Inc. Pennsylvania 100
United Telephone Company of
Southcentral Kansas Arkansas 100
United Telephone Company of Texas, Texas 100
Inc.
Subsidiaries:
Texas RSA 7B2 Limited Partnership Delaware 98
Partnership
Texas RSA 10B2 Limited Partnership Delaware 75
Partnership
United Telephone Company of the West Delaware 100
United Telephone - Southeast, Inc. Virginia 100
Subsidiaries:
Tennessee RSA 8 Limited Partnership Delaware 50
Partnership
United Telephone Long Distance, Inc. Tennessee 100
UTLD, Inc. Virginia 100
Virginia RSA 1 Limited Partnership Delaware 95
Partnership
Virginia RSA 2 Limited Partnership Delaware 67
Partnership
US Telecom, Inc. Kansas 100
Subsidiaries:
LCF, Inc. California 100
Sprint Communications Company L.P. Delaware 59
Partnership
United Telecommunications, Inc. Delaware 100
US Telecom of New Hampshire, Inc. New Hampshire 100
Utelcom, Inc. Kansas 100
Subsidiaries:
Private TransAtlantic
Telecommunications System, Inc. Delaware 100
Subsidiary:
Private Trans-Atlantic
Telecommunications System (N.J.), Inc. New Jersey 100
Sprint Communications Company L.P. Delaware 5
Partnership
Sprint International Incorporated Delaware 100
Subsidiaries:
Consortium Communications
International, Inc. New York 100
PTL (Sprint) Limited United Kingdom 100
Subsidiary:
Plessey-Telenet B.V. Netherlands 100
Rosprint Russia 50
S.I. Communications A.B. Sweden 100
Sprint Argentina S.A. Argentina 100
Sprint Bulgaria Limited Bulgaria 50
Subsidiary:
Sprint Business
Telecommunications Company Limited Bulgaria 60
(SBTC)
Sprint Colombia S.A. Colombia 95*
Sprint Communications Russia 75
Sprint Communications B.V. Netherlands 100
Sprint Communications Canada Inc. Canada 100
Sprint Communications S.A. Luxembourg 100
Sprint Comunicacoes do Brasil Ltda. Brazil 100
Sprint Czech Republic, s.r.o. Czech Republic 100
Sprint Datenservice Gesellschaft Austria 100
M.B.H.
Sprint Denmark A/S Denmark 100
Sprint East Operations Incorporated Delaware 100
Sprint Holding (UK) Limited United Kingdom 99
Subsidiary:
Sprint International (UK) United Kingdom 99
Limited
Sprint International Belgium N.V. Belgium 99
Sprint International Caribe, Inc. Puerto Rico 100
Sprint International Communications
Corporation Delaware 100
Subsidiaries:
Sprint Bulgaria Limited Bulgaria 50
Sprint Colombia S.A. Colombia 2*
Sprint Communications Company Delaware 2
L.P. Partnership
Sprint Holding (UK) Limited United Kingdom 1
Sprint International Belgium Belgium 1
N.V.
Sprint International (UK) United Kingdom 1
Limited
Sprint Polska Sp. z. o.o. Poland 50
Sprint International Communications
Hong Kong Limited Hong Kong 100*
Sprint International Espana S.A. Spain 100
Sprint International Finland Oy Finland 100
Sprint International France S.A. France 100*
Sprint International Ireland Republic of 100*
Limited Ireland
Sprint International Italia S.p.A. Italy 100*
Sprint International Mexico S.A. de Mexico 100*
C.V.
Sprint International Norge A/S Norway 100
Sprint International PTE LTD. Singapore 100
Sprint International PTY Limited Australia 100*
Sprint Japan, Inc. Japan 100
Sprint Korea, Inc. South Korea 100
Sprint Movil S.A. Argentina 51
Sprint Networks Russia 50
Sprint Polska Sp. z o.o. Poland 50
Sprint Services, Inc. Delaware 100
Sprint Services, Inc. Panama 100
Sprint Telecommunication Services Germany 100
Gmbh
Sprint Telecommunications
(Australia) Limited Delaware 100
Sprint Telecommunications (France)
Limited Delaware 100
Sprint Telecommunications
Deutschland Inc. Delaware 100
Sprint Telecommunications (New
Zealand) Limited Delaware 100
Sprint Telecommunications (UK) Delaware 100
Limited
Sprint Telemail Services S.A. Switzerland 100*
*Some shares owned by nominees to meet local shareholder
requirements.
EXHIBIT (23a)
SPRINT CORPORATION
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statements (Form S-3, No. 33-34567; Form S-3, No. 33-48689; Form
S-3, No. 33-58488; Form S-3, No. 33-59996; Form S-3, No. 33-
64564; Form S-8, No. 33-35173; Form S-8, No. 33-44255; Form S-8,
No. 33-38761; Form S-8, No. 33-21662; Form S-8, No. 33-28544;
Form S-8, No. 33-31802; Form S-8, No. 2-97322; Form S-8, No. 33-
50421; Form S-8, No. 2-71704; Form S-8, No. 2-62061; Form S-8,
No. 33-59316; Form S-8, No. 33-59318; Form S-8, No. 33-59320;
Form S-8, No. 33-59322; Form S-8, No. 33-59324; Form S-8, No. 33-
59326; and Form S-8, No. 33-59328) of Sprint Corporation and in
the related Prospectuses of our report dated February 2, 1994,
with respect to the consolidated financial statements and
schedules of Sprint Corporation included in this Annual Report
(Form 10-K) for the year ended December 31, 1993.
/s/ ERNST & YOUNG
ERNST & YOUNG
Kansas City, Missouri
March 14, 1994
EXHIBIT (23b)
SPRINT CORPORATION
CONSENT OF INDEPENDENT AUDITORS
As independent public accountants, we hereby consent to the
inclusion in this Form 10-K of our report dated February 3, 1993,
covering the consolidated balance sheet of Centel Corporation (a
Kansas corporation) as of December 31, 1992, and the related
consolidated statements of income, common shareowners' investment
and cash flows and schedules for the two years ended December 31, 1992,
incorporated by reference into the following previously filed
registration statements of Sprint Corporation.
Registration Statements on Form S-3:
33-34567 33-59996
33-48689 33-64564
33-58488
Registration Statements on Form S-8
33-35173 2-62061
33-44255 33-59316
33-38761 33-59318
33-21662 33-59320
33-28544 33-59322
33-31802 33-59324
33-50421 33-59326
2-97322 33-59328
2-71704
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Chicago, Illinois
March 14, 1994
