<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SPRINT CORPORATION
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(Name of Registrant as Specified In Its Charter)
DON A. JENSEN, VICE PRESIDENT AND SECRETARY
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF SPRINT CORPORATION] Post Office Box 11315
Kansas City, Missouri 64112
William T. Esrey
Chairman
March 10, 1997
Dear Stockholder:
On behalf of the Board of Directors and Management, I cordially invite you
to attend the Annual Meeting of the Stockholders of Sprint Corporation. The
Annual Meeting will be held at 10:00 a.m. on Tuesday, April 15, 1997, at
Sprint World Headquarters, 2330 Shawnee Mission Parkway, Westwood, Kansas. The
enclosed notice of the meeting and Proxy Statement contain detailed
information about the business to be transacted at the meeting.
The Board of Directors has nominated the four present Directors whose terms
of office expire this year to continue to serve as Directors of Class II. The
Board of Directors recommends that you vote for the nominees.
You are also being asked to approve performance goals under which certain
executives earn incentive compensation, to approve the 1997 Long-Term Stock
Incentive Program and to approve the appointment of Ernst & Young LLP as
independent auditors of Sprint for 1997. The Board of Directors recommends
that you vote for these proposals.
Three Stockholder proposals are also included in the Proxy Statement. The
proposals relate to Sprint's retirement plan for outside Directors, limiting
the annual increases in executives' compensation, and eliminating Sprint's
classified Board of Directors. For the reasons set forth in the Proxy
Statement, the Board of Directors recommends a vote against each proposal.
The prompt return of your proxy in the enclosed business return envelope
will save Sprint additional expenses of solicitation and will help ensure that
as many shares as possible are represented.
Sincerely,
/s/ William T. Esrey
Chairman
<PAGE>
SPRINT CORPORATION
P.O. BOX 11315
KANSAS CITY, MISSOURI 64112
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 15, 1997
TO THE STOCKHOLDERS OF SPRINT CORPORATION:
The Annual Meeting of the Stockholders of Sprint Corporation (Sprint) will
be held at the World Headquarters of Sprint, 2330 Shawnee Mission Parkway,
Westwood, Kansas on Tuesday, April 15, 1997, at 10:00 a.m. (local time) for
the following purposes:
1. To elect four Class II Directors to serve for a term of three years.
2. To consider and approve performance goals under which certain
executives earn incentive compensation so as to preserve Sprint's tax-
deduction under section 162(m) of the Internal Revenue Code.
3. To consider and vote upon a proposal to approve the 1997 Long-Term
Stock Incentive Program.
4. To consider and vote upon a proposal to approve the appointment of
Ernst & Young LLP as independent auditors of Sprint for 1997.
5. To act upon such matters, including three Stockholder proposals (set
forth on pages 22 through 26 of the accompanying Proxy Statement), as may
properly come before the meeting or any adjournments thereof.
The close of business on February 18, 1997, has been designated as the
record date for the determination of Stockholders entitled to notice of and to
vote at the Annual Meeting or any adjournments thereof.
By order of the Board of Directors
Don A. Jensen
Vice President and
Secretary
Westwood, Kansas
March 10, 1997
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YOUR VOTE IS IMPORTANT
We consider the vote of each Stockholder important, whatever the number of
shares held. If you are unable to attend the meeting in person sign, date
and return your proxy in the enclosed envelope at your earliest convenience.
The prompt return of your proxy will save expense to Sprint.
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<PAGE>
SPRINT CORPORATION
P.O. BOX 11315
KANSAS CITY, MISSOURI 64112
----------------
PROXY STATEMENT
MARCH 10, 1997
----------------
PROXIES, SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of proxies in the accompanying form to be used at the
Annual Meeting of Stockholders on April 15, 1997. Properly executed and dated
proxies received will be voted in accordance with instructions thereon. If the
proxy card is signed and returned and no instructions are given on the proxy
with respect to the matters to be acted upon, the shares represented by the
proxy will be voted for the election of the nominees for Directors designated
below, for approval of the performance goals under which certain executives
earn incentive compensation, for approval of the 1997 Long-term Stock
Incentive Program, for approval of the appointment of the auditors of Sprint
and against the Stockholder proposals.
A Stockholder giving a proxy may revoke it at any time before it is
exercised by filing with the Secretary of Sprint an instrument of revocation
or a duly executed proxy bearing a later date. A proxy may also be revoked by
attending the Annual Meeting of Stockholders and voting in person. Attendance
at the Annual Meeting of Stockholders will not in and of itself constitute the
revocation of a proxy.
In addition to solicitation by mail, proxies may be solicited by officers of
Sprint in person or by telephone. Sprint has retained D. F. King & Co., Inc.
to assist in the solicitation of proxies for an anticipated fee of $6,500 plus
out-of-pocket expenses. The cost of soliciting proxies will be borne by
Sprint.
As of the record date, February 18, 1997, Sprint had outstanding and
entitled to vote 343,947,517 shares of Common Stock, 46,132 shares of
Preferred Stock-First Series, Convertible, 266,958 shares of Preferred Stock-
Second Series, Convertible, and 95 shares of Preferred Stock-Fifth Series.
Each share of Common Stock, Preferred Stock-First Series, Convertible,
Preferred Stock-Second Series, Convertible, and Preferred Stock-Fifth Series
is entitled to one vote on each matter to be voted on at the meeting. As of
the record date, Sprint also had outstanding 86,236,036 shares of Class A
Common Stock. Each share of the Class A Common Stock is entitled to one vote
on each matter to be voted on at the meeting other than election of Directors.
The four nominees for Director receiving the greatest number of votes at the
Annual Meeting of Stockholders will be elected as Directors. In addition, the
holders of the Class A Common Stock, France Telecom and Deutsche Telekom AG,
have the right to elect three Directors. For all other matters to be voted
upon at the Annual Meeting, the affirmative vote of a majority of shares
present in person or represented by proxy, and entitled to vote on the matter,
is necessary for approval. For purposes of determining the outcome of the vote
on these matters, an instruction to "abstain" from voting on a proposal will
be treated as shares present and entitled to vote, and will have the same
effect as a vote against a proposal. "Broker non-votes", which occur when
brokers are prohibited from exercising discretionary voting authority for
beneficial owners who have not provided voting instructions, are not counted
for the purpose of determining the number of shares present in person or
represented by proxy on a voting matter and have no effect on the outcome of
the vote.
Sprint's policy is that all Stockholder meeting proxies, ballots and voting
tabulations that identify the vote of a specific Stockholder shall, with
certain specific and limited exceptions, be kept confidential from Sprint's
Directors, officers or employees. One exception to Sprint's confidential
voting policy occurs when a Stockholder writes comments on his or her proxy
card. This exception is designed to accommodate the Stockholders who express
their opinions and views by writing comments on their proxy cards and expect
Sprint to receive those comments.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information about the only known beneficial
owners of more than five percent of Sprint's outstanding voting stock, based
solely on Schedules 13G and 13D received by Sprint:
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------------- ------------------------- -------------------- --------
<S> <C> <C> <C>
Class A Common Stock.... France Telecom 43,118,018 shares 50%
6 place d'Alleray
75505 Paris Cedex 15
France
Class A Common Stock.... Deutsche Telekom AG 43,118,018 shares 50%
Friedrich-Ebert-Allee 140
D-53113 Bonn
Germany
Common Stock............ Putnam Investments, Inc. 21,375,385 shares 6.2%
One Post Office Square
Boston, Massachusetts
</TABLE>
The following table states the number of shares of Sprint Common Stock
beneficially owned, as of December 31, 1996, by each current Director, each
executive officer named in the "Summary Compensation Table" and by all
Directors and executive officers as a group. The number of shares beneficially
owned by all Directors and executive officers as a group represented less than
one percent of the outstanding shares. Except as otherwise indicated, each
individual named has sole investment and voting power with respect to the
securities shown.
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
---- ----------------
<S> <C>
DuBose Ausley.......................................... 7,545(1)
Warren L. Batts........................................ 1,000(1)
Michel Bon............................................. 0(1)
Ruth M. Davis.......................................... 2,183(1)
William T. Esrey....................................... 341,378(1)(2)
Gary D. Forsee......................................... 29,431(1)
Donald J. Hall......................................... 20,200(1)
Harold S. Hook......................................... 16,000(1)
Arthur B. Krause....................................... 91,083(1)(2)
Ronald T. LeMay........................................ 97,443(1)
Linda Koch Lorimer..................................... 1,507(1)(2)
D. Wayne Peterson...................................... 52,034(1)
Charles E. Rice........................................ 3,000(1)
Ron Sommer............................................. 0(1)
Stewart Turley......................................... 3,400(1)
All Directors and executive officers as a group (25
persons).............................................. 873,663(1)(2)
</TABLE>
- --------
(1) Does not include shares which may be acquired upon the exercise of stock
options exercisable on or within sixty days after December 31, 1996, under
Sprint's stock option plans as follows: 35,227, 17,496, 500, 17,496,
1,035,339, 123,583, 17,496, 17,496, 165,847, 368,155, 53,938, 137,364,
17,496, 500 and 17,496 shares for Messrs. Ausley, Batts, Bon, Dr. Davis,
Messrs. Esrey, Forsee, Hall, Hook, Krause, LeMay, Ms. Lorimer, Messrs.
Peterson, Rice, Sommer and Turley, respectively, and 2,879,720 for all
Directors and executive officers as a group.
(2) Includes shares held by or for the benefit of family members in which
beneficial ownership has been disclaimed: 15,762 shares held in trust for
Mr. Esrey's children, 13,668 shares owned by Mr. Krause's wife, 753 shares
held by Ms. Lorimer's husband and 30,183 shares held by or for the benefit
of family members for all Directors and executive officers as a group.
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I. ELECTION OF DIRECTORS
(Item 1 on Proxy Card)
The Board of Directors of Sprint (other than the Directors elected by the
holders of the Class A Common Stock) is divided into three classes, with the
term of office of each class ending in successive years. The terms of the
Directors of Class II expire with this Annual Meeting of Stockholders. Each of
the four nominees for Class II, if elected, will serve three years until the
2000 Annual Meeting and until a successor has been elected and qualified. The
Directors remaining in Classes III and I will continue in office until the
1998 and 1999 Annual Meetings, respectively.
Except for the Class A Common Stock, each share is entitled to one vote for
each of four Directors. The persons named in the accompanying proxy will vote
it for the election of the nominees named below as Directors of Class II
unless otherwise directed by the Stockholder. Each nominee has consented to be
named and to continue to serve if elected. If any of the nominees become
unavailable for election for any reason, the proxies will be voted for the
other nominees and for any substitutes.
NOMINEES FOR DIRECTORS
The following information is given with respect to the nominees for
election.
Class II--Nominees to Serve Three Years Until 2000 Annual Meeting
RUTH M. DAVIS, age 68. President and Chief Executive
Officer of The Pymatuning Group, Inc., a technology [PHOTO APPEARS
management services company, Alexandria, Virginia; HERE]
Director of Air Products and Chemicals, Inc., BTG, Inc.,
Consolidated Edison Company of New York, Inc., Ceridian
Corporation, Giddings & Lewis, Inc., Premark
International, Inc., Principal Financial Group, Tupperware
Corporation and Varian Associates, Inc. Dr. Davis has been
President and Chief Executive Officer of The Pymatuning
Group, Inc. for more than five years. Director of Sprint
since 1981; Member of the Audit Committee.
HAROLD S. HOOK, age 65. Chairman of American General [PHOTO APPEARS
Corporation, a financial services holding corporation, HERE]
Houston, Texas; Director of Chase Manhattan Corporation,
Chase Manhattan Bank, Cooper Industries, Inc. and
PanEnergy Corporation. Mr. Hook has been Chairman of
American General Corporation since 1978 and was Chief
Executive Officer of American General Corporation from
1978 to 1996. Director of Sprint since 1982; Member of the
Organization, Compensation and Nominating Committee.
RONALD T. LEMAY, age 51. President and Chief Operating [PHOTO APPEARS
Officer of Sprint, Westwood, Kansas; Director of Ceridian HERE]
Corporation, Imation Corporation, Mercantile
Bancorporation, Inc. and Yellow Corporation. Prior to
becoming President and Chief Operating Officer of Sprint
in February of 1996, Mr. LeMay was Chief Executive Officer
of Sprint Spectrum beginning in March of 1995. Mr. LeMay
was President and Chief Operating Officer--Long Distance
Division of Sprint from 1989 until March of 1995. Director
of Sprint since 1993.
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CHARLES E. RICE, age 61. Chairman and Chief Executive [PHOTO APPEARS
Officer of Barnett Banks, Inc., a bank holding company, HERE]
Jacksonville, Florida; Director of CSX Corporation. Mr.
Rice has been Chairman and Chief Executive Officer of
Barnett Banks, Inc. for more than five years. Director of
Sprint since 1975; Member of the Organization, Compensation
and Nominating Committee and the Executive Committee.
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE
The following information is given with respect to the Directors of Classes
III and I, who will continue to serve as Directors of Sprint until the 1998 and
1999 Annual Meetings, respectively.
Class III--Serving Until 1998 Annual Meeting
WILLIAM T. ESREY, age 57. Chairman and Chief Executive [PHOTO APPEARS
Officer of Sprint, Westwood, Kansas; Director of The HERE]
Equitable Life Assurance Society of the United States,
Everen Capital Corporation, General Mills, Inc. and
PanEnergy Corporation. Mr. Esrey has been Chairman of
Sprint since 1990 and Chief Executive Officer since 1985.
Director of Sprint since 1985; Chairman of the Executive
Committee.
LINDA KOCH LORIMER, age 44. Vice President and Secretary of [PHOTO APPEARS
the University, Yale University, New Haven, Connecticut; HERE]
Director of McGraw-Hill, Inc. Prior to becoming Vice
President and Secretary of Yale University in 1993, Ms.
Lorimer was President of Randolph-Macon Woman's College for
more than six years. Director of Sprint since 1993; Member
of the Organization, Compensation and Nominating Committee.
STEWART TURLEY, age 62. Chairman of Eckerd Corporation, a [PHOTO APPEARS
diversified retailer, Clearwater, Florida; Director of HERE]
Barnett Banks, Inc. and Springs Industries, Inc. Mr. Turley
has been Chairman of Eckerd Corporation for more than five
years. Director of Sprint since 1980; Chairman of the
Organization, Compensation and Nominating Committee, member
of the Executive Committee.
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Class I--Serving Until 1999 Annual Meeting
WARREN L. BATTS, age 64. Chairman and Chief Executive [PHOTO APPEARS
Officer of Tupperware Corporation, a diversified consumer HERE]
products company, Orlando, Florida. Mr. Batts is also
Chairman of Premark International, Inc., a diversified
consumer products company, Deerfield, Illinois; Director
of The Allstate Corporation, Cooper Industries, Inc. and
Sears, Roebuck & Company. Mr. Batts has been Chairman of
Premark International, Inc. since 1986 and Chairman and
Chief Executive Officer of Tupperware Corporation since
its spin-off from Premark International, Inc. in 1996.
Director of Sprint since 1982; Chairman of the Audit
Committee, member of the Executive Committee.
DONALD J. HALL, age 68. Chairman of Hallmark Cards, Inc., [PHOTO APPEARS
manufacturer of greeting cards, Kansas City, Missouri. Mr. HERE]
Hall has been Chairman of Hallmark Cards, Inc. since 1983.
Director of Sprint since 1986; Member of the Audit
Committee.
Directors Elected by and Serving at the Pleasure of the holders of the Class A
Common Stock
DUBOSE AUSLEY, age 59. Chairman of Ausley & McMullen, [PHOTO APPEARS
P.A., a law firm, Tallahassee, Florida; Director of HERE]
Capital City Bank Group, Inc., Tampa Electric Co., Inc.
and TECO Energy, Inc. Prior to becoming Chairman of Ausley
& McMullen, P.A. in 1996, Mr. Ausley was Chairman of
Macfarlane, Ausley, Ferguson & McMullen since 1994 and,
prior to that he was President of Ausley, McMullen,
McGehee, Carothers & Proctor, P.A. for more than five
years. Mr. Ausley has also been Chairman of the Capital
City Bank Group, Inc. for more than five years. Director
of Sprint since 1993.
MICHEL BON, age 53. Chairman and Chief Executive Officer [PHOTO APPEARS
of France Telecom, a telecommunications company, Paris, HERE]
France. Mr. Bon became Chairman of France Telecom in
September of 1995. He served as head of France's national
job-placement agency from 1993 to 1995, and, prior to that
as Chairman and Chief Executive Officer of Carrefour,
France's largest retailer, for more than five years.
Director of Sprint since 1996.
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RON SOMMER, age 47. Chairman of the Board of Management of [PHOTO APPEARS
Deutsche Telekom AG, a telecommunications company, Bonn, HERE]
Germany. Prior to becoming Chairman of Deutsche Telekom AG
in May of 1995, Mr. Sommer was President and Chief
Operating Officer of Sony Corporation of America beginning
in 1990, and in 1993, he took over the management of Sony
Europe in the same function. Director of Sprint since 1996;
Member of the Organization, Compensation and Nominating
Committee.
BOARD COMMITTEES AND DIRECTOR MEETINGS
The Board of Directors held six regular meetings and three special meetings
in 1996. The Board of Directors has an Audit Committee, an Executive Committee
and an Organization, Compensation and Nominating Committee. The members of each
committee are identified in the above description of Directors. In 1996 the
Audit Committee held two meetings and the Organization, Compensation and
Nominating Committee held four meetings. Except for Dr. Sommer, each current
Director attended at least 75% of the aggregate of the total number of meetings
of the Board of Directors and the total number of meetings held by all
committees of the Board of Directors on which the Director served during 1996.
The principal responsibilities of the Audit Committee are to ensure: (a) that
proper accounting principles are being followed; (b) that the total audit
coverage of Sprint and its affiliates is satisfactory; and (c) that an adequate
system of internal controls has been implemented by Sprint and is being
effectively followed. The Audit Committee provides an open avenue of
communication between management, the external and internal auditors and the
Board of Directors. The Committee reviews the nature of all services performed
by the external auditors, including the scope and general extent of their audit
examination and the basis for their compensation. The Committee recommends to
the Board of Directors the auditors for formal ratification by the Stockholders
at the Annual Meeting.
The principal responsibilities of the Organization, Compensation and
Nominating Committee, as they relate to matters of executive compensation, are
to: (a) assess and appraise the performance of the Chief Executive Officer and
review the performance of executive management; (b) recommend to the Board of
Directors base salaries, incentive compensation and other benefits for the
Chief Executive Officer and other key officers; (c) counsel and advise
management on plans for orderly development and succession of executive
management; (d) take any and all action required or permitted to be taken by
the Board of Directors under the stock option and restricted stock plans, stock
purchase plans, incentive compensation plans and the deferred compensation
plans of Sprint; and (e) review recommendations for major changes in
compensation and benefit and retirement plans which have application to
significant numbers of Sprint's total employees and which require review or
approval of the Board of Directors.
The principal responsibilities of the Organization, Compensation and
Nominating Committee, as they relate to the Director nomination process, are
to: (a) periodically review the size and composition of the Board of Directors
and make recommendations to the Board with respect to such matters; (b)
recommend to the Board of Directors persons proposed as nominees whose election
at the next Annual Meeting of Stockholders will be recommended by the Board of
Directors; and (c) recommend persons proposed to be elected to fill any vacancy
on the Board of Directors between Stockholder meetings. The Committee will
consider qualified nominees recommended by Stockholders. Such recommendations
should be sent to the Organization, Compensation and Nominating Committee, c/o
Corporate Secretary, at the corporate headquarters of Sprint, Post Office Box
11315, Kansas City, Missouri 64112.
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COMPENSATION OF DIRECTORS
Directors who are not officers of Sprint (the Outside Directors) are each
paid $35,000 annually plus $1,250 for each meeting attended and $1,000 for each
committee meeting attended. Mr. Rice, a Director of Sprint, received $5,900 in
1996 as fees for serving as a Director of Sprint-Florida, Incorporated, a
Sprint subsidiary.
The Long-Term Stock Incentive Program, which was approved at the 1989 Annual
Meeting of Stockholders, provides for the grant of stock options to Outside
Directors. Under the program each Outside Director receives an annual grant of
an option to purchase 2,000 shares of Common Stock at an option price equal to
100% of the fair market value of the Common Stock on the date of grant. The
options expire ten years from the date of grant; 25% of the shares subject to
each option become exercisable as of December 31 of the year in which the
option is granted and an additional 25% become exercisable on December 31 of
each of the three succeeding years.
In 1982 Sprint adopted a retirement plan for its Outside Directors. Any
Director of Sprint who has served five years as a Director without
simultaneously being employed by Sprint or any of its subsidiaries is eligible
to receive benefits under the plan. The retirement plan was amended in December
of 1996 to eliminate the retirement benefit for any Director who had not served
five years as of the date of the amendment. An eligible Director retiring after
March 30, 1989, will receive monthly benefit payments equal to the monthly fee
(not including meeting fees) being paid to Directors at the time of the
Director's retirement. The monthly retirement benefit would be $2,917 for any
Director retiring while the current $35,000 annual fee remains in effect. The
number of monthly benefit payments to a Director under the plan will equal the
number of months served as a Director without simultaneously being employed by
Sprint or any of its subsidiaries, up to a maximum of 120 payments.
Outside Directors of Sprint and certain of its subsidiaries are also eligible
for a Director's Deferred Fee Plan under which Outside Directors may elect to
defer all or some of their fees. New Directors, who are not eligible for
benefits under the retirement plan after the amendment last December, will
receive units representing 2,500 shares of Sprint Common Stock credited to
their accounts under the Director's Deferred Fee Plan upon becoming a Director.
Half of these units will vest upon completion of five years of Board service
and ten percent will vest on each succeeding anniversary.
In addition, Outside Directors are provided with Sprint residential long
distance service valued in the following amounts for 1996: Mr. Ausley, $4,575;
Mr. Batts, $2,093; Dr. Davis, $1,501; Mr. Hall, $3,443; Mr. Hook, $612; Ms.
Lorimer, $1,769; Mr. Rice, $2,046; and Mr. Turley, $4,495.
EXECUTIVE COMPENSATION
ORGANIZATION, COMPENSATION AND NOMINATING COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The Organization, Compensation and Nominating Committee of the Board, which
is composed of independent, non-employee Directors and has the principal
responsibilities described on page 6 of this Proxy Statement, has furnished the
following report on executive compensation:
Sprint's compensation philosophy is to link, by using specific objectives,
executives' compensation to the short-term and long-term performance of Sprint
so as to maximize long-term Stockholder value. Sprint's executive compensation
program consists of four elements: (1) base salary, (2) short-term incentive
compensation, (3) long-term incentive compensation and (4) stock options. To
develop a competitive compensation package, both base salary and total
compensation (i.e., the sum of all four elements) are compared to a defined
competitive group. This comparison group is composed of approximately 160
companies similar to Sprint in size as measured by annual sales. The Committee
believes that the comparison group accurately reflects the market in which
Sprint competes for executive talent. Five of the 11 companies in the S&P
Telephone Utility Index and the S&P Telecommunications (Long Distance) Index,
which are used in the Stock Performance Graph
7
<PAGE>
on page 15 of this Proxy Statement, are included in the comparison group. The
Committee's policy is to target base salaries at the 50th percentile for base
pay of similar positions within the comparison group, and total compensation
at the 75th percentile provided certain performance objectives are achieved.
Section 162(m) of the Internal Revenue Code denies a tax deduction to any
publicly held corporation, such as Sprint, for compensation in excess of $1
million paid to any Named Officer unless such compensation is performance-
based under Section 162(m). Sprint took all action required under Section
162(m) for Sprint's incentive compensation plans to be performance-based so as
to preserve Sprint's tax deduction for compensation earned under such plans
for 1996.
Base Salary. Each year the Committee makes a recommendation to the Board
establishing base pay for all executive officers. In making this
recommendation for 1996, the Committee considered the salaries of other
executives within the comparison group and the executives' performance during
1995. With respect to the latter, the Committee exercised its judgment in
evaluating the executives' accomplishments during the year. As a result of his
performance evaluations during his tenure as Chief Executive Officer, Mr.
Esrey's base salary exceeds the median of the comparison group.
Short-Term Incentive Plans. Sprint maintained two short-term incentive plans
covering its executive officers for 1996. Mr. Esrey, Mr. Forsee, Mr. LeMay and
Mr. Peterson are covered under the Executive Management Incentive Plan (EMIP).
The material terms of the performance goals under EMIP were approved by the
Stockholders at the 1994 Annual Meeting. Sprint's other executive officers are
covered under the Corporate Center Management Incentive Plan (CCMIP). Each
plan is a performance-driven short-term, annual incentive plan designed to
promote the near-term objectives of the organization.
Target incentive opportunity for each plan is based on job level and
potential impact on organization results. The entire EMIP payout, and a
portion of the CCMIP payout, is based on the achievement of three financial
objectives -- one for the Local Telecommunications Division (LTD), and two for
the Long Distance Division (LDD). For each objective, targets were established
and compared to actual 1996 financial results.
. The objective for the LTD related to operating income. Actual results
were 105.7% of target.
. The objectives for the LDD related to operating income (50% weighting)
and net collectible revenue (50%). Actual results were 105.1% of target
on a weighted average basis.
The weights assigned for a particular executive among the LTD and LDD depended
on an executive's responsibilities with Sprint.
In addition to these three financial objectives, the CCMIP payout was based
on three additional financial objectives. These objectives were tied to
nonregulated contribution margin for LTD and economic value added (EVA) for
both the LTD and the LDD. EVA measures the return on investment that enhances
Stockholder value. Actual results for these objectives exceeded target for the
LTD and the LDD.
Twenty-five percent of the CCMIP payout was based on the achievement of
certain personal objectives in 1996. These personal objectives included
qualitative factors relating to business unit and departmental results of a
nonfinancial nature, the support the executive provided in furthering
strategic and tactical objectives, contributing to the progress of the quality
improvement process, and individual professional growth and development.
Based on the financial results described above, and the achievement of their
personal objectives, the executive officers earned CCMIP payouts on average of
221.9% of target. Mr. Esrey's EMIP payout was based on the financial results
described above using relative weights for objectives by division as follows:
45% for the LTD and 55% for LDD. Based on these factors, Mr. Esrey earned a
payout of 257.3% of target.
Long-Term Incentive Plans. Sprint maintained two long-term incentive plans
covering its executive officers for 1996. Mr. Esrey and Mr. LeMay are covered
under the Executive Long-term Incentive Plan (ELTIP). The
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<PAGE>
material terms of the performance goals under ELTIP were approved by the
Stockholders at the 1994 Annual Meeting. Sprint's other executive officers are
covered under the Long-term Incentive Plan (LTIP). Each Plan is a three-year
performance-driven incentive plan designed to promote the long-term objectives
of the organization. Target incentive opportunity is established as a
percentage of the three-year average salary range midpoint and is based on job
level and potential impact on organization results.
LTIP payouts were based entirely on the achievement of financial objectives.
These financial objectives related to the LTD, the LDD and the Cellular
Division.
. The objectives for the LTD related to return on assets (60% weighting),
nonregulated cumulative net collectible revenue (20%) and 1996
nonregulated operating income (20%). For the LTD, actual results were
117.2% of target on a weighted average basis.
. The objectives for the LDD, which were weighted equally in computing the
payouts, related to net collectible revenue growth relative to market and
cumulative operating margin. For the LDD, actual results were 132.9% of
target on a weighted average basis.
. The objectives for the Cellular Division related to cumulative operating
income (40% weighting) and cumulative net collectible revenue (60%) from
January 1, 1994 through March 7, 1996. On March 7, 1996, there was a
spin-off of the Cellular Division. For the Cellular Division, actual
results were 121.7% of target on a weighted average basis.
As with the CCMIP, the relative weights assigned to the LTIP objectives among
the LTD, LDD and Cellular Division depend on an executive's responsibilities
with Sprint.
The specific amounts of the LTIP payouts were determined by comparing actual
financial results to the pre-established targets for each objective. The payout
is also adjusted by a stock price factor under which the payout based on
financial objectives as described above is multiplied by a fraction, the
numerator of which is the market price of Sprint Common Stock on the last day
of the performance period and the denominator of which is the market price on
the first day of the performance period. The three-year increase in the price
of Sprint Common Stock resulted in a multiplier of 144.0%.
Mr. Esrey's ELTIP payout was based on the financial results described above
using relative weights for each objective as follows: 32% for the LTD, 54% for
the LDD and 14% for the Cellular Division. Based on the financial results and
the methodology described above, Mr. Esrey received a payout of 181.8% of
target. The LTIP payouts, if not deferred under the Executive Deferred
Compensation Plan, were paid in restricted or unrestricted shares of Sprint
Common Stock.
Stock Options. Stock option grants combined with LTIP comprise long-term
incentive compensation awarded to executive officers of Sprint. Total long-term
incentive compensation is targeted at the 75th percentile of the comparison
group. The Committee does not consider any measures of corporate or individual
performance in determining option grants and does not consider the number of
options already held by an executive. During 1996 certain executive officers
elected under Sprint's Management Incentive Stock Option Plan (MISOP) to
receive options in lieu of receiving up to 50% of their target opportunity
under Sprint's management incentive plans. For each $4.01 reduction in an
executive's target opportunity resulting from such election, the executive
received an option to purchase one share of Sprint Common Stock. The MISOP is
in keeping with Sprint's philosophy of increasing the percentage of
compensation tied to stock ownership. The Committee believes stock options more
closely align Stockholder and employee interests by focusing executives on
long-term growth and profitability of Sprint and its Common Stock.
Stewart Turley, Chairman
Harold S. Hook
Linda Koch Lorimer
Charles E. Rice
Ron Sommer
9
<PAGE>
SUMMARY COMPENSATION TABLE
The following table reflects the cash and non-cash compensation for services
in all capacities to Sprint by those persons who were, as of December 31, 1996,
the chief executive officer and the other four most highly compensated
executive officers of Sprint (the Named Officers):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------ --------------------- -------
OTHER
ANNUAL RESTRICTED SECURITIES ALL OTHER
COMPEN- STOCK UNDERLYING LTIP COMPEN-
NAME AND SALARY BONUS SATION AWARD(S) OPTIONS PAYOUTS SATION
PRINCIPAL POSITION YEAR ($)(1) ($)(1) ($) ($)(2) (#)(3) ($) ($)(4)
------------------ ---- ------- --------- ------- ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William T. Esrey 1996 987,500 2,280,250 76,480(5) 0 336,468 597,948 33,645
Chairman and Chief 1995 937,502 541,200 76,989 0 291,360 768,140 31,506
Executive Officer 1994 863,918 1,085,569 76,109 1,113,750 279,220 424,040 22,871
Gary D. Forsee(6) 1996 412,746 1,177,866 6,172 577,500 88,688 203,570 5,173
President--Long 1995 344,237 258,809 6,404 0 50,372 214,524 7,846
Distance Division
Arthur B. Krause 1996 373,581 670,321 3,787 0 52,200 153,437 16,302
Executive Vice 1995 349,172 271,518 8,614 0 36,420 204,099 16,134
President--Chief 1994 310,570 303,779 9,273 371,250 72,840 111,518 12,751
Financial Officer
Ronald T. LeMay 1996 700,002 1,684,142 71,975(7) 0 269,531 315,615 9,321
President and Chief 1995 668,122 287,000 10,979 0 160,268 398,676 12,178
Operating Officer 1994 556,494 637,481 20,265 0 190,624 201,588 6,390
D. Wayne Peterson 1996 389,355 738,212 7,890 0 64,337 193,364 14,567
President--National 1995 344,129 382,485 6,198 0 48,935 213,519 14,729
Integrated Services 1994 321,010 331,972 8,845 0 115,290 107,633 35,780
</TABLE>
- --------
(1) Includes all amounts earned for the respective years, even if deferred
under Sprint's Executive Deferred Compensation Plan. All bonuses were paid
under Sprint's Management Incentive Plans.
(2) The value of the Restricted Stock Award to Mr. Forsee shown for 1996 is
based on the closing price of Sprint Common Stock on August 12, 1996, the
date of the grant. As of December 31, 1996, Messrs. Esrey, Forsee, Krause,
LeMay and Peterson held 88,034; 19,801; 10,000; 13,412 and 8,633 shares,
respectively, of restricted stock. The shares had a market value of
$3,510,356; $789,565; $398,750; $534,804 and $344,241, respectively, at
December 31, 1996, based on a value of $39.875 per share. Each of the Named
Officers has the right to vote and receive dividends on the restricted
shares.
(3) The number and price of options granted prior to March 7, 1996, were
adjusted for the 360(degrees) Communications Company distribution to Sprint
Stockholders pursuant to the terms of the applicable plans, to preserve the
value of the benefits granted under such plans as a result of the
distribution. The distribution was made in the spin-off of Sprint's
cellular division to Stockholders.
(4) Consists of the following amounts for 1996: (a) $4,500 contributed on
behalf of each of Messrs. Esrey, Forsee, Krause, LeMay and Peterson as
matching contributions under the Sprint Retirement Savings Plan; and (b)
$29,145, $673, $11,802, $4,821 and $10,067 for Messrs. Esrey, Forsee,
Krause, LeMay and Peterson, respectively, representing the portion of
interest credits on deferred compensation accounts under Sprint's Executive
Deferred Compensation Plan that are at above-market rates.
(5) Includes the cost to Sprint of providing tax and financial services of
$15,000, club memberships of $15,057 and automobile allowance of $18,000.
(6) Mr. Forsee became President--Long Distance Division on March 29, 1995.
(7) Includes the cost to Sprint of providing tax and financial services of
$15,000 and automobile allowance of $15,400.
10
<PAGE>
OPTION GRANTS
The following table summarizes options granted during 1996 under Sprint's
stock option plans to the Named Officers. The amounts shown as potential
realizable values on these options are based on arbitrarily assumed annualized
rates of appreciation in the price of Sprint Common Stock of five percent and
ten percent over the term of the options, as set forth in Securities and
Exchange Commission (SEC) rules. The Named Officers will realize no gain on
these options without an increase in the price of Sprint Common Stock which
will benefit all shareholders proportionately. No stock appreciation rights
were granted during 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE PRICE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO OR BASE TERM(1)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 0% 5% 10%
- ---- ----------- ------------ -------- ---------- --- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
William T. Esrey 169,960(2) 3.4% $36.81 2/12/06 $ 0 $ 3,934,522 $ 9,970,851
166,508(3) 3.4% 36.81 2/12/06 0 3,854,609 9,768,336
Gary D. Forsee 54,630(2) 1.1% 36.81 2/12/06 0 1,264,668 3,204,916
34,058(3) 0.7% 36.81 2/12/06 0 788,432 1,998,042
Arthur B. Krause 42,490(2) 0.9% 36.81 2/12/06 0 983,630 2,492,713
9,710(4) 0.2% 36.30 3/9/03 0 144,867 338,130
Ronald T. LeMay 109,260(2) 2.2% 36.81 2/12/06 0 2,529,335 6,409,833
54,872(3) 1.1% 36.81 2/12/06 0 1,270,270 3,219,113
48,458(4) 1.0% 37.12 3/15/05 0 1,002,894 2,475,915
613(4) 0.0% 37.12 3/15/05 0 12,687 31,321
23,666(4) 0.5% 37.12 2/16/00 0 189,742 408,701
17,757(4) 0.4% 42.31 2/17/05 0 372,769 899,249
14,905(4) 0.3% 42.31 3/9/03 0 227,465 520,358
D. Wayne Peterson 48,560(2) 1.0% 36.81 2/12/06 0 1,124,149 2,848,815
2,614(4) 0.1% 36.45 2/15/01 0 26,243 57,969
7,541(4) 0.2% 36.45 2/17/05 0 151,371 372,749
5,622(4) 0.1% 36.45 3/9/03 0 84,041 196,083
All Stockholders(5) 343,947,517 -- 36.94 2/12/06 0 7,991,373,343 20,251,709,062
Named Officers' gain
as a % of All
Stockholders' gain -- -- -- -- 0.08% 0.08%
</TABLE>
- --------
(1) The dollar amounts in these columns are the result of calculations at the
five percent and ten percent rates set by the SEC and are not intended to
forecast future appreciation of Sprint Common Stock.
(2) Twenty-five percent of this option became exercisable on February 12, 1997,
and an additional 25% will become exercisable on February 12 of each of the
three successive years. Each option has a reload feature.
(3) This option was granted under the Management Incentive Stock Option Plan
(MISOP). Under the MISOP, the optionee elected to receive options in lieu
of receiving a portion of his bonus under the management incentive
compensation plans. The MISOP benefits Sprint by reducing the cash bonus
paid to the executive. It further increases the percentage of compensation
tied to stock ownership, in keeping with Sprint's philosophy to more
closely align Stockholder and employee interests. This option became
exercisable on December 31, 1996.
(4) This option is a reload option. A reload option is an option granted when
an optionee exercises a stock option and makes payment of the purchase
price using shares of previously owned Sprint Common Stock. A reload option
grant is for the number of shares utilized in payment of the purchase price
and tax withholding, if any. The option price for a reload option is equal
to the market price of Sprint Common Stock on the date the reload option is
granted. A reload option becomes exercisable one year from the date the
original option was exercised.
11
<PAGE>
(5) The amounts shown as potential realizable value for all Stockholders, which
are presented for comparison purposes only, represent the aggregate net
gain for all holders of record, as of February 18, 1997, of Sprint Common
Stock assuming a hypothetical option granted at $36.94 per share (the
weighted average price of all options granted in 1996) on February 12, 1996
and expiring on February 12, 2006, if the price of Sprint Common Stock
appreciates at the rates shown in the table. There can be no assurance that
the potential realizable values shown in the table will be achieved. Sprint
will neither make nor endorse any prediction as to future stock
performance.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table summarizes the net value realized on the exercise of
options in 1996, and the value of the outstanding options at December 31, 1996,
for the Named Officers.
AGGREGATED OPTION EXERCISES IN 1996
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT 12/31/96 OPTIONS AT 12/31/96(2)
SHARES ACQUIRED VALUE ------------------------- -------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
(#) (1) ($) (#) (#) (#) (#)
--------------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William T. Esrey........ 45,734 $ 916,799 950,359 437,040 $11,689,151 $3,941,659
Gary D. Forsee.......... 13,961 216,318 102,337 113,812 989,120 897,485
Arthur B. Krause........ 34,515 509,583 136,409 115,935 1,579,430 965,481
Ronald T. LeMay......... 174,162 2,580,935 245,340 373,996 2,192,758 2,536,560
D. Wayne Peterson....... 25,470 281,968 100,342 128,072 1,143,384 1,003,365
</TABLE>
- --------
(1) The value realized upon exercise of an option is the difference between the
fair market value of the shares of Sprint Common Stock received upon the
exercise, valued on the exercise date, and the exercise price paid.
(2) The value of unexercised, in-the-money options is the difference between
the exercise price of the options and the fair market value of Sprint
Common Stock at December 31, 1996 ($39.875).
LONG-TERM INCENTIVE PLAN AWARDS
The following table represents potential awards under Sprint's long-term
incentive plan which, subject to Sprint's right to amend the plan at any time
prior to approval of payouts by the Organization, Compensation and Nominating
Committee, can be earned by the achievement of certain financial objectives
over the three year period ending December 31, 1998. Payouts of awards are tied
to achieving specified levels of improvement in economic value added (EVA)
within the Long Distance Division (LDD), the Local Telecommunications Division
(LTD), and Sprint on a consolidated basis. The weights assigned for a
particular executive among the LTD, LDD and consolidated Sprint depends on an
executive's responsibilities with Sprint. Economic value added measures the
return on investment that enhances Stockholder value. The target amount will be
earned if 100% of the targeted levels of such criteria is achieved. An award
payout will not be earned for performance below the threshold.
The calculated payout, based on the achievement of the above financial
criteria, is adjusted (increased or decreased) by the percent change in the
market price of Sprint Common Stock as determined by the change in the average
of the high and low prices on January 1, 1996 and December 31, 1998. If the
stock price increases over the three-year performance period, the payout is
adjusted by the percentage increase in stock price. Conversely, if the stock
price decreases over the three-year performance period, the payout is reduced
by the percentage decrease in stock price. Upon approval of the payouts by the
Organization, Compensation and Nominating Committee, each payout will be paid
as specified by the executive in restricted or unrestricted shares of Sprint
Common Stock, or deferred under the Executive Deferred Compensation Plan.
12
<PAGE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
PERFORMANCE OR UNDER NON-STOCK PRICE BASED
NUMBER OF OTHER PERIOD PLANS(1)
SHARES, UNITS UNTIL ---------------------------
OR OTHER MATURATION OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS PAYOUT ($) ($) ($)
- ---- ------------- --------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
William T. Esrey..... -- 1/1/96-12/31/98 $90,000 $360,000 $720,000
Gary D. Forsee....... -- 1/1/96-12/31/98 33,750 135,000 270,000
Arthur B. Krause..... -- 1/1/96-12/31/98 21,563 86,250 172,500
Ronald T. LeMay...... -- 1/1/96-12/31/98 48,750 195,000 390,000
D. Wayne Peterson.... -- 1/1/96-12/31/98 28,125 112,500 225,000
</TABLE>
- --------
(1) Awards are based on a percentage of the Named Officers' average base salary
midpoint over the three-year performance cycle which ends December 31,
1998. In calculating the average base salary midpoint, the table assumes
the base salary midpoint for 1997 and 1998 will equal the 1996 base salary
midpoint. In addition, the estimated future payouts shown assume that the
average of the high and low price of Sprint Common Stock on December 31,
1998 will be the same as it was on January 1, 1996.
PENSION PLANS
The following table reflects the estimated annual pension benefit payable to
an individual retiring in 1997 at age 65. The amounts include all prospective
benefits under Sprint's plans, whether tax-qualified or not.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE(2)
------------------------------------------------------------
REMUNERATION(1) 15 20 25 30 35
- --------------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 500,000 $114,707 $ 152,942 $ 191,178 $ 229,413 $ 267,649
700,000 161,207 214,942 268,678 322,413 376,149
900,000 207,707 276,942 346,178 415,413 484,649
1,100,000 254,207 338,942 423,678 508,413 593,149
1,300,000 300,707 400,942 501,178 601,413 701,649
1,500,000 347,207 462,942 578,678 694,413 810,149
1,700,000 393,707 524,942 656,178 787,413 918,649
1,900,000 440,207 586,942 733,678 880,413 1,027,149
2,100,000 486,707 648,942 811,178 973,413 1,135,649
2,300,000 533,207 710,942 888,678 1,066,413 1,244,149
2,500,000 579,707 772,942 966,178 1,159,413 1,352,649
2,700,000 626,207 834,942 1,043,678 1,252,413 1,461,149
2,900,000 672,707 896,942 1,121,178 1,345,413 1,569,649
3,100,000 719,207 958,942 1,198,678 1,438,413 1,678,149
3,300,000 765,707 1,020,942 1,276,178 1,531,413 1,786,649
3,500,000 812,207 1,082,942 1,353,678 1,624,413 1,895,149
3,700,000 858,707 1,144,942 1,431,178 1,717,413 2,003,649
3,900,000 905,207 1,206,942 1,508,678 1,810,413 2,112,149
4,100,000 951,707 1,268,942 1,586,178 1,903,413 2,220,649
</TABLE>
- --------
(1) Compensation, for purposes of estimating a pension benefit, includes salary
and bonus as reflected under Annual Compensation in the Summary
Compensation Table on page 10. The calculation of benefits under the
pension plans generally is based upon average compensation for the highest
five consecutive years of the ten years preceding retirement.
(2) These amounts are straight life annuity amounts and would not be subject to
reduction because of Social Security benefits. For purposes of estimating a
pension benefit, the years of service credited are 32, 14, 33, 22 and 39
years for Messrs. Esrey, Forsee, Krause, LeMay and Peterson, respectively.
13
<PAGE>
In addition, Sprint has a Key Management Benefit Plan that permits a
participant to elect a retirement benefit equal to 300% (or a reduced
percentage if the participant retires before age 60) of the participant's
highest annual salary during the five-year period immediately prior to the time
of retirement. More information on the plan is provided in the following
section under "Employment Contracts".
EMPLOYMENT CONTRACTS
Sprint has contingency employment agreements with Messrs. Esrey, Forsee,
Krause and LeMay which provide for separation pay and benefits if employment is
involuntarily terminated following a change in control. A change of control is
deemed to occur if someone acquires 20% or more of the outstanding voting stock
of Sprint or if there is a change of a majority of the Directors within a two-
year period. Benefits will include monthly salary payments for 35 months (or
until the officer reaches age 65 if this occurs earlier) and three payments
each equal to the highest short-term plus the highest long-term incentive
compensation awards received during the three years preceding termination. In
addition, life, disability, medical and dental insurance coverages will be
provided for 35 months. For purposes of the Key Management Benefit Plan, an
officer will be deemed to have remained a Key Executive (as defined in the
plan) until age 60; interest will be credited under the Executive Deferred
Compensation Plan at the maximum rate allowed under the plan. Retirement
benefits will be determined assuming three years of additional service and no
early retirement pension reduction will be imposed. If any excise tax is
imposed by Section 4999 of the Internal Revenue Code, Sprint will make the
executive whole with respect to any additional taxes due. The agreements are
not intended as an anti-takeover provision but could discourage an attempt to
acquire control of Sprint by increasing its cost.
The Named Officers have each signed non-competition agreements with Sprint
which provide that he will not associate himself with a competitor for an 18-
month period following termination of employment. In addition, the agreements
provide that each executive will receive 18 months of compensation and benefits
following an involuntary termination of employment.
Sprint has a Key Management Benefit Plan providing for a survivor benefit in
the event of the death of a participant or, in the alternative, a supplemental
retirement benefit. Under the plan, if a participant dies prior to retirement,
the participant's beneficiary will receive ten annual payments each equal to
25% of the participant's highest annual salary during the five-year period
immediately prior to the time of death. If a participant dies after retiring or
becoming permanently disabled, the participant's beneficiary will receive a
benefit equal to 300% (or a reduced percentage if the participant retires
before age 60) of the participant's highest annual salary during the five-year
period immediately prior to the time of retirement or disability, payable
either in a lump sum or in installments at the election of the participant. At
least 13 months before retirement, a participant may elect a supplemental
retirement benefit in lieu of all or a portion of the survivor benefit. Each
Named Officer is a participant in the plan.
14
<PAGE>
PERFORMANCE GRAPH
The graph below compares the yearly percentage change in the cumulative
total Stockholder return for Sprint Common Stock as compared with the S&P(R)
500 Stock Index, the S&P(R) Telephone Utility Index and the S&P(R)
Telecommunications (Long Distance) Index, for the five-year period from
December 31, 1991 to December 31, 1996. The companies which comprise the S&P
Telephone Utility Index are Ameritech, Inc., Bell Atlantic Corp., BellSouth,
GTE, NYNEX, Pacific Telesis Group, SBC Communications, Inc. and U.S. West,
Inc. The companies which comprise the S&P Telecommunications (Long Distance)
Index are AT&T Corp., MCI Communications and Sprint.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Sprint 100.00 112.02 157.24 128.81 190.20 238.10
S&P 500 100.00 107.64 118.50 120.06 165.18 203.11
S&P (Long Distance) 100.00 132.15 149.37 136.03 183.47 189.46
S&P Telephone 100.00 109.73 126.73 121.49 183.02 184.85
</TABLE>
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
Mr. Ausley is Chairman of the law firm of Ausley & McMullen, P.A., which
provided legal services to certain subsidiaries of Sprint in 1996 for which it
billed $522,040.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Sprint's
Directors and executive officers to file with the SEC and the New York Stock
Exchange initial reports of ownership and reports of changes in ownership of
Sprint Common Stock and other equity securities of Sprint. Directors and
executive officers are required by SEC regulations to furnish Sprint with
copies of all Section 16(a) reports they file.
15
<PAGE>
To Sprint's knowledge, based solely on review of the copies of such reports
furnished to Sprint and written representations that no other reports were
required, during 1996 all Section 16(a) filing requirements applicable to its
Directors and executive officers were complied with, except that the
disposition of 2,031 share units under Sprint's Director's Deferred Fee Plan
was inadvertently not reported when Charles H. Price II, a Director until
March of 1996, received a cash distribution of his benefit under that plan
when his service with the Sprint Board ended. In addition, the acquisition of
3,180 share units acquired by Mr. LeMay through Sprint's Executive Deferred
Compensation Plan was not timely reported. Reports were filed as soon as the
oversights were discovered.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Stockholder proposals for the 1998 Annual Meeting of Stockholders of Sprint
must be received by the Corporate Secretary at Sprint's principal office, 2330
Shawnee Mission Parkway, Westwood, Kansas 66205, no later than November 10,
1997.
II. APPROVAL OF PERFORMANCE GOALS FOR
EXECUTIVE INCENTIVE COMPENSATION
(Item 2 on Proxy Card)
Section 162(m), which was added to the Internal Revenue Code in 1993, denies
a publicly-traded corporation's tax deduction for compensation it pays to
certain executive officers in excess of $1 million per year for each such
officer. Section 162(m) also provides an exception for performance-based
compensation the material terms of which have been approved by a corporation's
stockholders.
In accordance with Section 162(m), the Stockholders approved the material
terms of Sprint's Executive Management Incentive Plan and Executive Long-Term
Incentive Plan in 1994. Under those plans, specific business criteria were
approved; however, the Organization, Compensation and Nominating Committee
desires the ability to select additional criteria on which performance goals
are based to ensure that incentives properly reflect Sprint's business
objectives while ensuring that compensation paid to the executives as a result
of attaining those goals is deductible under Section 162(m). Accordingly,
under this proposal the Stockholders are being asked to approve the material
terms of incentive compensation provided to certain executive officers.
Stockholders are not approving additional compensation; rather, they are
approving business criteria on which performance goals may be based.
The Organization, Compensation and Nominating Committee determines periods
of time (generally one to three years, in length) during which Sprint's
performance will be measured. Executives may earn incentive payouts based on
achievement of both short-term and long-term financial objectives. These
objectives will be established by the Organization, Compensation and
Nominating Committee no later than 90 days after the beginning of each
performance period and payouts are earned based on actual results compared to
pre-established targets. For incentive compensation payouts made after January
1, 1997, the Stockholders are asked to approve the following:
. Business criteria--Business criteria which will be used to set
performance goals may be based on any of the following, alone or in
combination, and may be applicable to Sprint in total or any one or part
of Sprint's divisions, joint ventures, or complementary businesses as the
Organization, Compensation and Nominating Committee deems appropriate:
revenues or sales; operating income; cash flow; earnings; earning before
taxes; earnings before interest, taxes, depreciation and amortization;
earnings before interest and taxes; earnings per share; expenses; return
on assets; return on equity; return on invested capital; market share;
stock price; economic value added; market value added; contribution
margin; operating margin.
. Annual maximum--The maximum payment in any year to any employee is
limited to $5,000,000 (exclusive of incentive opportunity received in
options under the Management Incentive Stock Option Plan).
16
<PAGE>
. Eligible employees--The eligible employees for any year shall be the
Named Officers identified in the Summary Compensation Table of the Proxy
Statement for that year.
Subject to the Organization, Compensation and Nominating Committee's
discretion to reduce the payouts, the following table shows the incentive
payouts which would have been received by all participants for 1996 had the
performance goals been based on selected business criteria:
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
DOLLAR VALUE
-----------------
NAME AND POSITION EMIP(1) ELTIP
- ----------------- --------- -------
<S> <C> <C>
William T. Esrey, Chairman and Chief Executive Officer....... 2,280,250 597,948
Gary D. Forsee, President Long-Distance Division............. 1,177,866 203,570
Arthur B. Krause, Executive Vice President--Chief Financial
Officer..................................................... 586,946 153,437
Ronald T. LeMay, President and Chief Operating Officer....... 1,684,142 315,615
D. Wayne Peterson, President National Integrated Services.... 738,212 193,364
</TABLE>
- --------
(1) The amounts shown in this column reflect the payouts received by the
participant after reduction based on the participant's election to
purchase stock options under the Management Incentive Stock Option Plan as
more fully described on page 11 of the Proxy Statement.
Because the Board believes that appropriate incentive compensation is
critical to the ability of Sprint to retain and attract individuals necessary
for its success, the Organization, Compensation and Nominating Committee and
the Board of Directors believe that approval of the material terms of the
incentive compensation is in the best interest of Sprint and its Stockholders.
These approvals are not required by the plans or by applicable securities laws
or stock exchange rules. In the event that Stockholders do not approve the
performance goals, payments under the incentive compensation program referred
to above will not be made; however, the Organization, Compensation and
Nominating Committee may consider an alternative program of compensating
executives based on performance. Without Stockholder approval, any alternative
incentive compensation would not qualify for the exclusion from the $1 million
compensation limit under Section 162(m).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL II.
III. PROPOSAL TO APPROVE THE
1997 LONG-TERM STOCK INCENTIVE PROGRAM
(ITEM 3 ON PROXY CARD)
The Board of Directors has approved and recommends to the Stockholders the
approval of a new Long-Term Stock Incentive Program (the "Plan"). The Plan
will replace the Long-Term Stock Incentive Program (the "1989 Plan") that was
approved by the Stockholders in 1989. If the Plan is approved by the
Stockholders, no additional awards will be granted under the 1989 Plan after
the date of the 1997 Annual Meeting of Stockholders. The Plan provides for the
award of stock options, restricted stock, performance awards and other awards
to officers and employees. Outside Directors will also receive stock options
under the Plan.
The Plan will become effective on April 15, 1997, if it is approved by the
Stockholders. No award will be granted pursuant to the Plan after April 15,
2007.
17
<PAGE>
SUMMARY OF PLAN PROVISIONS
The full text of the Plan appears as Exhibit A to this Proxy Statement and
reference is made to the exhibit for a full statement of the Plan's terms and
provisions. A summary of the principal features of the Plan follows:
Shares Subject to Plan. Subject to adjustment as described below, nine-
tenths of one percent (0.9%) of the outstanding shares of Common Stock as of
the first day of 1997, plus the number of shares that remain available for
grant under the 1989 Plan as of the close of business on the date of the 1997
Annual Meeting of Stockholders, will be available for grant under the Plan
during the remainder of 1997, and one and one-half percent (1.5%) of the
outstanding shares of Common Stock as of the first day of each calendar year
for which the Plan is in effect beginning with 1998 will be available for
grant in such year. Nine-tenths of one percent (0.9%) of the shares of Common
Stock outstanding at January 1, 1997, is 3,094,817 shares. As of February 18,
1997, 2,727,993 shares of Common Stock remained available for grant under the
1989 Plan. The Closing price of one share as reported in the New York Stock
Exchange Composite Transactions for February 18, 1997, the record date for the
Annual Meeting, was $44.625.
All shares available in any year that are not granted under the Plan are
available for grant in subsequent years. If Sprint acquires another company,
any of Sprint's shares covered by or issued as a result of the assumption or
substitution of outstanding grants of the acquired company would not be deemed
issued under the Plan. If any shares subject to any award are forfeited, or
the award is terminated without issuance of shares or other consideration, the
shares subject to such award will again be available for grant pursuant to the
Plan. The committee administering the Plan may also determine that outstanding
securities other than Common Stock will be subject to awards under the Plan.
Administration. The Plan is administered by the Organization, Compensation
and Nominating Committee of the Board ("Committee"), none of the members of
which may be an employee of Sprint. The Committee has the authority to select
employees to whom awards are granted, to determine the types of awards and the
number of shares covered and to set the terms and conditions of such awards
and to cancel or suspend awards. The Committee is authorized to interpret the
Plan, to establish, amend, and rescind any rules and regulations relating to
the Plan, to determine the terms and provisions of agreements entered into
with employees under the Plan, and to make all other determinations which may
be necessary or advisable for the administration of the Plan. All employees of
Sprint and its subsidiaries and affiliates are eligible to be participants.
The Committee may delegate to one or more Senior Officers or one or more
committees of Senior Officers the right to grant awards and to cancel or
suspend awards with respect to employees who are not officers or Directors of
Sprint. The Board may amend, alter or discontinue the Plan or any portion
thereof at any time, provided that no such action may impair the rights of a
participant without the participant's consent and provided that no amendment
may be made without Stockholder approval which will (i) increase the total
number of shares reserved for issuance pursuant to the Plan; or (ii) change
the terms of the Outside Director options or stock purchases.
Stock Options. The exercise price per share of Common Stock purchasable
under any stock option granted to an employee will be determined by the
Committee, but may not be less than 100% of the fair market value of the
Common Stock on the date of the grant of such option. The term of each such
option, and the time or times when it may be exercised, will be fixed by the
Committee. The grant and the terms of incentive stock options (ISOs) shall be
restricted to the extent required by the Internal Revenue Code. Options may
only be exercised by payment of the exercise price, either in cash or, at the
discretion of the Committee, in Common Stock or other consideration having a
fair market value on the date the option is exercised equal to the exercise
price. Currently, the Committee permits payment of the exercise price of
options granted under the 1989 Plan with previously owned shares of Common
Stock.
Reload options, which are options granted when an optionee exercises a stock
option and makes payment of the purchase price with previously owned shares of
Common Stock, may be granted under the Plan. A reload option grant is for the
number of shares utilized in payment of the purchase price and tax
withholding, if any.
18
<PAGE>
The option price for a reload option is equal to the fair market value of
Common Stock on the date the reload option is granted. Reload options may also
be granted at the time an optionee utilizes previously owned Common Stock to
pay tax withholding on vesting of restricted stock received upon exercise of an
option.
Section 162(m) of the Internal Revenue Code of 1986 limits Sprint's deduction
for compensation paid to certain executive officers to $1 million per year
unless such compensation is "performance-based." For purposes of satisfying
this requirement, the Plan limits the number of options that can be granted to
any individual during any calendar year to 3,000,000 shares.
Restricted Stock. Restricted stock may not be disposed of by the recipient
until certain restrictions established by the Committee lapse. Restricted Stock
may be issued for such consideration as the Committee determines; the Plan
permits the Committee to require no consideration other than the rendering of
services. The recipient of restricted stock has all of the rights of a
Stockholder including the right to vote the shares and the right to receive any
cash dividends, unless the Committee determines otherwise. If employment is
terminated during the restriction period, all restricted stock is forfeited,
subject to such exceptions, if any, authorized by the Committee.
Performance Awards. From time to time, the Committee may select a period
during which performance criteria determined by the Committee are measured for
the purpose of determining the extent to which a performance award has been
earned. Performance awards may be in the form of performance shares (valued by
reference to shares of stock), or performance units (valued by reference to
cash or property other than stock). Performance awards may be paid in cash,
stock, other property or a combination thereof. Performance awards may be
issued for such consideration as the Committee determines.
Other Stock Unit Awards. The Committee is also authorized to grant to
participants, either alone or in addition to other awards granted under the
Plan, awards of stock and other awards that are valued in whole or in part by
reference to, or are otherwise based on, Common Stock or other securities of
the Company ("other stock unit awards"). Other stock unit awards may be paid in
Common Stock or other securities of the Company, cash or any other form of
property as the Committee determines. Securities granted pursuant to such
awards may be issued for such consideration as the Committee determines.
Directors' Options. The Plan provides that Outside Directors of Sprint will
receive options to purchase shares of Common Stock. On the date of each Annual
Meeting of Stockholders beginning with the 1998 Annual Meeting, each Outside
Director will receive an option to purchase 2,000 shares, subject to adjustment
as described below. The option price will be 100% of the fair market value of
the Common Stock on the date of grant. Twenty-five percent of the shares
subject to each option become exercisable on December 31 of the year in which
the option is granted and an additional twenty-five percent become exercisable
on December 31 of the three succeeding years; however, any options outstanding
for more than one year at the time certain changes of control of Sprint occur
become immediately exercisable. The options are exercisable until the earlier
of the date ten years after the grant date or five years after a Director's
retirement, and until the earlier of the date ten years after the grant date
and one year after the Director's death. Each Outside Director will receive an
option to purchase 2,000 shares of Common Stock on the date of the 1997 Annual
Meeting under the 1989 Plan.
Payment of Outside Directors' Fees in Common Stock. The Plan provides that
Outside Directors may elect to receive all or part of their annual retainer and
their meeting and committee meeting fees in Common Stock in lieu of cash
payments. The price at which Outside Directors may acquire shares is the fair
market value of the Common Stock on the last trading day of the month in which
the fees are earned.
In addition, Outside Directors may elect annually to defer receipt of such
Common Stock. Shares deferred pursuant to this election will be transferred by
Sprint to a trust which will hold the shares until the Outside Director's
termination of Board service. The Outside Directors may elect to receive
payment in a lump sum or installments and in Common Stock or cash. During the
period the shares are held in trust, the Outside Director will have voting
rights with respect to the shares and the trustee will reinvest the dividends
on the shares. The trust will be subject to the claims of creditors of Sprint.
19
<PAGE>
Adjustment. In the event of any change affecting the shares of Common Stock
by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other corporate
change, or any distribution to Stockholders other than cash dividends, the
options granted to Outside Directors will be adjusted and the Committee may
make such substitution or adjustment in the aggregate number or class of
shares which may be distributed under the Plan and in the number, class and
option price or other price of shares subject to outstanding awards granted
under the Plan as it deems to be appropriate.
Change of Control. In order to maintain all of the participants' rights in
the event of a change of control of Sprint, the Committee, in its sole
discretion, may, as to any outstanding awards except Outside Directors options
and stock purchases, take any one or more of the following actions: (i)
provide for the acceleration of any time periods relating to the exercise or
realization of any such award so that such award may be exercised or realized
in full on or before a date fixed by the Committee; (ii) provide for the
purchase of any such award by Sprint, upon a participant's request, for an
amount of cash equal to the excess of the fair market value of the property
which could have been received upon the exercise of such award or realization
of such participant's rights had such award been currently exercisable or
payable over the amount which would have been paid, if any, by the participant
for such property; (iii) make such adjustment to any such award then
outstanding as the Committee deems appropriate to reflect such change of
control; or (iv) cause any such award then outstanding to be assumed, or new
rights substituted for such award, by the acquiring or surviving corporation
in such change of control. A change of control is deemed to occur if someone
acquires 20% or more of the outstanding stock of Sprint or if there is a
change of a majority of the Directors within a two-year period.
TAX ASPECTS OF THE PLAN
Under present law, the following are the federal tax consequences generally
arising with respect to awards granted under the Plan. The grant of an option
will create no tax consequences for an optionee or Sprint at the time of
grant. The optionee will have no taxable income upon exercising an ISO (unless
the alternative minimum tax is applicable), and Sprint will receive no
deduction when an ISO is exercised. Except where the stock received is non-
transferable and subject to forfeiture (as described below), upon exercising
an option (other than an ISO), the optionee must recognize additional
compensation equal to the difference between the exercise price and the fair
market value of the stock on the date of the exercise; Sprint will be entitled
to a deduction for the same amount. The treatment of a disposition of shares
acquired through the exercise of an option depends on how long the shares have
been held and on whether such shares were acquired by exercising an ISO or by
exercising an option other than an ISO. Generally, there will be no tax
consequence to Sprint in connection with a disposition of shares acquired
under an option except that Sprint may be entitled to a deduction in the case
of a disposition of shares acquired under an ISO before the applicable ISO
holding periods have been satisfied.
With respect to other awards granted under the Plan that are settled either
in cash or in stock or other property that is either transferable or not
subject to substantial risk of forfeiture, the participant must recognize
additional compensation equal to the cash or the fair market value of shares
or other property received; Sprint will be entitled to a deduction for the
same amount. With respect to awards that are settled in stock or other
property that is restricted as to transferability and subject to substantial
risk of forfeiture, the participant must recognize additional compensation
equal to the fair market value of the shares or other property received at the
first time the shares or other property become transferable or not subject to
substantial risk of forfeiture, whichever occurs earlier; Sprint will be
entitled to a deduction for the same amount. Prior to the time the shares
become transferable or not subject to substantial risk of forfeiture, any
dividends received by the participant are treated as additional compensation.
Sprint will be entitled to a deduction for the same amount. Different tax
rules apply to executive officers and Outside Directors who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended.
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<PAGE>
1996 AND 1997 AWARDS UNDER THE 1989 PLAN
Set forth below are (i) the number of shares of Common Stock underlying
options that have been granted under the 1989 Plan in 1996 and in 1997 through
February 18, 1997, (ii) the number of shares of Common Stock granted under the
1989 Plan in 1996 as long-term incentive awards for the performance period
1993 through 1995 and in 1997 for the performance period 1994 through 1996 and
(iii) the number of shares of Restricted Stock that have been granted under
the 1989 Plan in 1996 and in 1997 through February 18, 1997, to the persons
and groups identified:
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF SHARES SHARES GRANTED NUMBER OF
UNDERLYING OPTIONS AS INCENTIVE RESTRICTED
NAME AND POSITION GRANTED AWARDS SHARES
----------------- ------------------ -------------- ----------
<S> <C> <C> <C> <C>
William T. Esrey............ 1996 169,960 17,189 0
Chairman and Chief Executive
Officer 1997 160,000 13,786 0
Gary D. Forsee.............. 1996 54,630 4,801 15,000
President--Long Distance
Division 1997 55,000 2,581 0
Arthur B. Krause............ 1996 52,200 2,511 0
Executive Vice President--
Chief Financial Officer 1997 40,000 0(1) 0
Ronald T. LeMay............. 1996 165,588 4,906 0
President and Chief
Operating Officer 1997 100,000 7,276 0
D. Wayne Peterson........... 1996 64,337 0(1) 0
President--National
Integrated Services 1997 40,000 0(1) 0
All current executive
officers as a group........ 1996 714,177 44,904(1) 19,553
1997 567,416 33,150(1) 0
All current Directors who
are not executive officers
as a group................. 1996 20,000(2) 0(3) 0(4)
1997 0(2) 0(3) 0(4)
All employees who are not
executive officers as a
group...................... 1996 2,229,565 34,760(1) 143,523
1997 1,518,282 20,941(1) 0
</TABLE>
- --------
(1) Certain participants deferred their incentive awards and therefore did not
receive shares of Common Stock.
(2) Under the terms of the 1989 Plan, options to purchase 2,000 shares are
granted to Outside Directors each year on the date of the Annual Meeting
of Stockholders for that year.
(3) Outside Directors do not receive long-term incentive awards under the 1989
Plan.
(4) Outside Directors do not receive Restricted Stock under the 1989 Plan.
REASONS FOR PLAN
The telecommunications industry is going through tremendous changes and
industry leaders are in high demand, both inside and outside the industry. The
Board of Directors believes that granting options and other stock awards to
officers and other key employees enhances the Company's ability to attract,
retain and provide incentives to individuals of exceptional talent necessary
for the continued success of Sprint. In furtherance of these objectives,
additional options may be granted to Mr. Esrey and Mr. LeMay and other
officers in 1997. The Board of Directors also believes that it is in the
Stockholders' interest to increase the percentage of executive compensation
that is equity-based. The amendments will give the Committee the flexibility
to make grants to a broad range of individuals and in amounts believed to be
sufficient to attain these objectives. It cannot be determined what grants
will be made by the Committee to any person or group of persons over the life
of the Plan in pursuit of these objectives.
Adoption of this proposal requires the affirmative vote of the majority of
the shares present and entitled to vote at the Annual Meeting.
21
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL AND ADOPTION OF THE
1997 LONG-TERM STOCK INCENTIVE PROGRAM.
IV. SELECTION OF INDEPENDENT AUDITORS
(Item 4 on Proxy Card)
The Board of Directors of Sprint has voted to appoint Ernst & Young LLP as
independent auditors to examine the consolidated financial statements of
Sprint and its subsidiaries for the fiscal year 1997, subject to approval of
the Stockholders at the Annual Meeting.
Ernst & Young has examined the financial statements of Sprint since 1965.
Representatives of Ernst & Young will be present at the Annual Meeting with
the opportunity to make a statement and to respond to appropriate questions.
The affirmative vote of a majority of the shares present and entitled to vote
at the Annual Meeting is necessary for the approval of the appointment of
Ernst & Young as independent auditors. If the appointment of Ernst & Young is
not approved at the Annual Meeting, the Board of Directors will consider the
selection of another accounting firm.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
APPROVAL OF THE APPOINTMENT.
V. STOCKHOLDER PROPOSALS
A. STOCKHOLDER PROPOSAL CONCERNING RETIREMENT PLAN
FOR OUTSIDE DIRECTORS
(Item 5 on Proxy Card)
The National Electrical Benefit Fund, 1125 15th Street, N.W., Washington,
D.C. 20005, beneficial owners of 80,000 shares of Sprint Common Stock, has
given notice of its intention to introduce the following resolution at the
Annual Meeting:
BE IT RESOLVED: That the shareholders of Sprint Corporation ("Company")
request that the Board of Directors, in the future, refrain from providing
pension or other retirement benefits to non-employee or outside Directors,
unless such benefits are specifically submitted to the shareholders for
approval.
STOCKHOLDER'S STATEMENT IN SUPPORT OF STOCKHOLDER PROPOSAL A
The Board of Directors should play a vital and independent role in helping
to determine overall corporate policy and strategic direction. They should
actively monitor senior management in faithfully implementing these policies.
In their capacity on the Board, Directors owe their fundamental allegiance to
the shareholders of the Company (the owners) who elect them, and not to
management.
We believe, however, that certain business or financial relationships can
adversely affect the ability of Directors to function in their appropriate
oversight role. This is particularly critical for so-called outside or
independent Directors, who should bring a certain arms-length objectivity to
Board deliberations. According to the Company's most recent proxy statement,
in 1982, the Company established a retirement or pension plan for non-employee
or outside Directors with at least five years of service. Those Directors will
receive a monthly retirement benefit equal to the number of months served on
the Board, up to ten years. The pension payment is equal to the annual Board
retainer, in effect at the time of the Director's retirement from the Board.
That retainer is now a generous $35,000. We noted last year that this is a 75%
increase over the 1994 retainer. Directors are also entitled to expense
reimbursements.
22
<PAGE>
Non-employee or outside Directors should be entitled to reasonable
compensation for their time and expertise. We are of the opinion that
additional layers of compensation in the Director's base compensation has a
detrimental effect of compromising their independence and impartiality. It is
our view that such generous and unnecessary extra compensation for outside
Directors of the Company is management's way of assuring their unquestioning
loyalty and acquiescence to whatever policy management initiates. Accordingly,
when viewed from this perspective, these types of retirement benefits become
yet another device to enhance and entrench management's control over corporate
policy. While at the same time being accountable only to themselves and not to
the Company's owners. We believe that this additional layer of compensation to
the Directors may influence their ability to exercise that degree of
independence from management, which is critical to the proper functioning of
the Board.
Our concern is to maximize the ability of Boards of Directors to act in a
shareholder's interest. We feel that the long-term best interest of the
Company is not well-served by this type of retirement policy. A recent study
of outside Directors pay shows that companies are eliminating this type of
compensation. In the past year the number of companies providing outside
Directors pension has fallen from 53% to 41%. Our company should follow that
trend. The vast majority of Directors at various corporations are undoubtedly
covered by generous retirement policies at their principal place of
employment, and they need not be "double-dipping" at this Company or any
other.
WE URGE YOU TO VOTE FOR THIS PROPOSAL.
THE COMPANY'S RESPONSE TO STOCKHOLDER PROPOSAL A
Providing outside directors with pension benefits has become a subject of
much controversy. Opponents of these arrangements argue that the pensions are
excessive and compromise director independence. While the Board believes
Sprint's Retirement Plan for Outside Directors is neither excessive nor
compromises Director independence, the Board last December took action to
eliminate the controversy. Specifically, Sprint's Retirement Plan for Outside
Directors has been closed to new participants who were not vested in the plan
as of last December. For current Directors who are vested in the plan, Sprint
will keep its commitment to provide the benefit.
Sprint provides a compensation package that is described on page 7 of the
Proxy Statement. The compensation package for new Directors, who will not
receive a benefit under the Retirement Plan for Outside Directors, will
include a grant of 2,500 share units in the Directors' Deferred Fee Plan that
vest, in part, after five years of Board service. Because the share units
derive their value from Sprint common stock, that component of the new
Director's compensation is directly tied to how Sprint stock fares during the
Director's tenure. This is in keeping with the recommendation of the Report of
the National Association of Corporate Directors Blue Ribbon Commission on
Director Compensation to increase the use of equity-based compensation for
non-employee directors. The Board believes that Sprint's existing compensation
package for Outside Directors, which is designed to attract and retain
experienced, able and knowledgeable Directors, is in the best interests of
Sprint.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
AGAINST THIS PROPOSAL.
B. STOCKHOLDER PROPOSAL CONCERNING
EXECUTIVE COMPENSATION
(Item 6 on Proxy Card)
George Speight, 3959 Cordiality Church Road, Nashville, North Carolina
27856, beneficial owner of more than 975 shares of Sprint Common Stock, has
given notice of his intention to introduce the following resolution at the
Annual Meeting:
RESOLVED, The Shareholders of Sprint Corporation recommend that the Board
of Directors consider the following nonbinding proposal: With respect to
future compensation of active executive officers of
23
<PAGE>
Sprint, the Sprint shareholders recommend that the Board of Directors
voluntarily take whatever steps it deems necessary and proper to implement
a plan which would limit the total annual cash compensation (salary plus
bonuses awarded under the Executive Incentive Plan) of Sprint executive
officers so that this compensation will not be increased by an amount
greater than the average percentage pay increase granted to Sprint
employees annually.
STOCKHOLDER'S STATEMENT IN SUPPORT OF STOCKHOLDER PROPOSAL B
In recent years, there has been widespread public debate concerning
executive compensation policies and practices. Often this debate has focused
on what is perceived by many to be excessive salaries, bonuses and incentives
granted to senior executive officers in America, particularly when compared to
compensation packages of their counterparts in Japan and Germany. The debate
over excessive executive compensation is also a part of a larger concern over
the growing inequity in income distribution in America. An article in the New
York Times on Friday, October 7, 1994 reported on recent figures made public
by the U.S. Census Bureau showing that the typical American household saw its
income decline in 1993 about $300, even though the economy grew by 3%. From
1989 to 1993, the typical American household lost $2,344 in annual income, a
fall of 7%. While the Census Bureau reported that average per capita income
was up by 1.8% in 1993, most of the benefits flowed to the wealthiest
Americans. The Census Report showed record levels of inequality, with the top
fifth of American households earning 48.2% of the nation's income, while the
bottom fifth earned just 3.6%. This Shareholder Proposal is a modest attempt
to address this unfortunate trend.
This proposal recommends that the Board of Directors implement a plan to
limit annual executive compensation so that this compensation increases no
more than the average annual pay increase granted to other Sprint employees.
This proposal is intended to assure shareholders and employees that Sprint's
hard earned profits will be used for research and development, equipment
modernization, and other endeavors which build a stronger, more profitable,
and more competitive corporation. Furthermore, this proposal could establish
Sprint as a leader in creatively addressing the issue of executive
compensation, thereby enhancing its corporate image.
If you agree, please mark your proxy FOR this proposal.
THE COMPANY'S RESPONSE TO STOCKHOLDER PROPOSAL B
The Board believes the interests of Sprint and its Stockholders are best
served by the current executive compensation program and that the arbitrary
limit proposed by the proponent, which focuses on annual increases in
executives' cash compensation, is inappropriate.
The Organization, Compensation and Nominating Committee of the Sprint Board,
which is composed entirely of independent, non-employee Directors, recommends
payments of incentive compensation under Sprint's executive compensation
program. A key principle of that executive compensation program is that
compensation should link pay to corporate performance by emphasizing "at risk"
incentives, that is, by making compensation contingent on the success of the
company and how the executive has performed in helping to create long-term
Stockholder value. This principle is pursued by tying incentive compensation
to objective financial measures, including the price of Sprint Common Stock.
When compensation is tied to financial objectives, executives earn larger
payouts when Sprint's performance is good and smaller payouts when Sprint
experiences below par performance. Historically this has led to fluctuation in
executives' cash compensation.
If a significant portion of an executive's compensation is tied to "at risk"
incentives, inevitably there will be years when the average pay increase for
all Sprint employees will exceed that of the executives (who may actually
experience a pay reduction) and years when the increase to executives exceeds
the average increase for all Sprint employees. The Board believes, however,
that Sprint's compensation philosophy, which links pay to performance, is
appropriate because it is the best way to build Stockholder value. The
proposal is inconsistent with this philosophy.
24
<PAGE>
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
AGAINST THIS PROPOSAL.
C. STOCKHOLDER PROPOSAL CONCERNING
THE CLASSIFIED BOARD
(Item 7 on Proxy Card)
The Teamsters Affiliates Pension Plan, 25 Louisiana Avenue, N.W.,
Washington, D.C. 20001, beneficial holders of 33,600 shares of Sprint Common
Stock, has given notice of its intention to introduce the following resolution
at the Annual Meeting:
RESOLVED: That Sprint's stockholders urge the Board of Directors take the
necessary steps, in compliance with state law, to declassify the Board for
the purpose of director elections. The board declassification shall be
completed in a manner that does not affect the unexpired terms of directors
previously elected.
STOCKHOLDER'S STATEMENT IN SUPPORT OF STOCKHOLDER PROPOSAL C
Sprint Company's board is divided into three classes of directors serving
staggered three-year terms. This means an individual director faces election
only once every three years, and shareholders only vote on roughly a third of
the board each year.
We think a better way to insure continuity is through re-election. When
directors are performing well they routinely are re-elected with majorities
over 95%. Continuity is not a problem for Sprint; more than half of the
current board of directors have served eleven years or longer, one has been on
the board for over 20 years.
We believe that annual elections can pave the way for improved board
sensitivity to important shareholder issues. In particular, it can help speed
the diversification of Sprint's board.
In addition, a declassified board allows the company to respond quickly to
changes, by giving the board the ability to appoint more qualified candidates
each year. The telecommunications industry is in a time of intense
technological change. Currently Sprint is involved in a partnership to create
a new digital cellular telephone system, Spectrum, in which it plans to invest
between $3.5 and $4 billion dollars. Analysts are skeptical that Spectrum will
add to shareholder value. The board, who approve management's decisions on
such costly plans must first be able to understand them. A declassified board
can help give Sprint the flexibility it needs as it moves into the next
century.
By adopting annual elections, Sprint can demonstrate its commitment to
fuller accountability to shareholders, accountability that respects the
importance of men and women of all races among our company's key constituents,
and accountability that honors shareholder prerogatives.
We urge you to vote YES for this proposal.
THE COMPANY'S RESPONSE TO STOCKHOLDER PROPOSAL C
A classified board is a widely used safeguard to protect against inadequate
tender offers or unsolicited attempts to seize control of a company. Sprint's
classified board would prevent a hostile actor from replacing the Board in
less than 12 months, which in effect encourages that person who might seek to
acquire control of Sprint to negotiate with the Board. This would give the
Board time to evaluate any proposal, study alternatives and seek the best
result for all Stockholders.
Sprint Stockholders decided in 1983, by an 81% affirmative vote, that the
Board should be divided into three classes with Directors elected to staggered
three-year terms. At the time of adoption, the Board and most Stockholders
believed that the classified Board was in Sprint's best interest. The
classified Board insures continuity and stability in the composition of the
Board and assures that a majority of the Directors have prior experience and
in-depth knowledge of Sprint. This experience and knowledge is particularly
important given the challenges Sprint faces in the current environment of the
telecommunications industry.
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Because these benefits still inure to Sprint, the Board believes the
classified Board continues to be in the best interests of Sprint and its
Stockholders. In the statement in support of its proposal, the proponent
suggests that staggered terms lessens the Directors' accountability to
Stockholders. The Board disagrees. Each year approximately one-third of the
Directors stand for election thereby providing an effective balance between
accountability and the need for stability and experience on the Board.
ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE
AGAINST THIS PROPOSAL.
VI. OTHER MATTERS TO COME BEFORE THE MEETING
No other matters are intended to be brought before the meeting by Sprint nor
does Sprint know of any matters to be brought before the meeting by others.
If, however, any other matters properly come before the meeting, the persons
named in the proxy will vote the shares represented thereby in accordance with
the judgment of management on any such matter.
By order of the Board of Directors
Don A. Jensen
Vice President and Secretary
March 10, 1997
A COPY OF SPRINT'S ANNUAL REPORT ON FORM 10-K, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION FOR THE YEAR ENDED DECEMBER 31, 1996, WILL BE SENT TO
STOCKHOLDERS UPON REQUEST WITHOUT CHARGE. REQUESTS SHOULD BE SENT TO INVESTOR
RELATIONS DEPARTMENT, P.O. BOX 11315, KANSAS CITY, MISSOURI 64112.
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EXHIBIT A
1997 LONG-TERM STOCK INCENTIVE PROGRAM
Section 1. Purpose. The purposes of the Sprint 1997 Long-Term Stock
Incentive Program (the "Plan") are to encourage Directors of Sprint
Corporation (the "Company") and officers and selected key employees of the
Company and its Affiliates to acquire a proprietary and vested interest in the
growth and performance of the Company, to generate an increased incentive to
contribute to the Company's future success and prosperity, thus enhancing the
value of the Company for the benefit of stockholders, and to enhance the
ability of the Company and its Affiliates to attract and retain individuals of
exceptional talent upon whom, in large measure, the sustained progress, growth
and profitability of the Company depends.
Section 2. Definitions. As used in the Plan, the following terms shall have
the meanings set forth below:
(a) "Affiliate" shall mean (i) any Person that directly, or through one
or more intermediaries, controls, or is controlled by, or is under common
control with, the Company or (ii) any entity in which the Company has a
significant equity interest, as determined by the Committee.
(b) "Award" shall mean any Option, Restricted Stock Award, Performance
Share, Performance Unit, Dividend Equivalent, Other Stock Unit Award, or
any other right, interest, or option relating to Shares granted pursuant to
the provisions of the Plan.
(c) "Award Agreement" shall mean any written agreement, contract, or
other instrument or document evidencing any Award granted hereunder and
signed by both the Company and the Participant or by both the Company and
an Outside Director.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(f) "Committee" means the Organization, Compensation, and Nominating
Committee of the Board, composed of not less than two directors each of
whom is a Non-Employee Director.
(g) "Company" shall mean Sprint Corporation.
(h) "Non-Employee Director" shall have the meaning provided for in Rule
16b-3(b)(3) under the Securities Exchange Act of 1934, 17 CFR (S)240.16b-
3(b)(3), as amended.
(i) "Dividend Equivalent" shall mean any right granted pursuant to
Section 14(h) hereof.
(j) "Employee" shall mean any employee of the Company or of any
Affiliate.
(k) "Fair Market Value" shall mean, with respect to any property, the
market value of such property determined by such methods or procedures as
shall be established from time to time by the Committee; except that the
"Fair Market Value" of a share of common stock of the Company for purposes
of Section 10 and Section 11 shall mean the average of the high and low
prices of the common stock for composite transactions, as published by
major newspapers, for the date in question or, if no trade of the common
stock shall have been made on that date, the next preceding date on which
there was a trade of common stock.
(l) "Incentive Stock Option" shall mean an Option granted under Section 6
hereof that is intended to meet the requirements of Section 422 of the Code
or any successor provision thereto.
(m) "Nonstatutory Stock Option" shall mean an Option granted to a
Participant under Section 6 hereof, and an Option granted to an Outside
Director pursuant to Section 10 hereof, that is not intended to be an
Incentive Stock Option.
(n) "Option" shall mean any right granted to a Participant under the Plan
allowing such Participant to purchase Shares at such price or prices and
during such period or periods as the Committee shall determine. "Option"
shall also mean the right granted to an Outside Director under Section 10
hereof allowing such Outside Director to purchase shares of the common
stock of the Company on the terms set forth in Section 10.
(o) "Other Stock Unit Award" shall mean any right granted to a
Participant by the Committee pursuant to Section 9 hereof.
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(p) "Outside Director" shall mean a member of the Board who is not an
Employee of the Company or of any Affiliate.
(q) "Participant" shall mean an Employee who is selected to receive an
Award under the Plan.
(r) "Performance Award" shall mean any Award of Performance Shares or
Performance Units pursuant to Section 8 hereof.
(s) "Performance Period" shall mean that period established by the
Committee at the time any Performance Award is granted or at any time
thereafter during which any performance goals specified by the Committee
with respect to such Award are to be measured.
(t) "Performance Share" shall mean any grant pursuant to Section 8 hereof
of a unit valued by reference to a designated number of Shares, which value
may be paid to the Participant by delivery of such property as the
Committee shall determine, including, without limitation, cash, Shares, or
any combination thereof, upon achievement of such performance goals during
the Performance Period as the Committee shall establish at the time of such
grant or thereafter.
(u) "Performance Unit" shall mean any grant pursuant to Section 8 hereof
of a unit valued by reference to a designated amount of property other than
Shares, which value may be paid to the Participant by delivery of such
property as the Committee shall determine, including, without limitation,
cash, Shares, or any combination thereof, upon achievement of such
performance goals during the Performance Period as the Committee shall
establish at the time of such grant or thereafter.
(v) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
(w) "Restricted Stock" shall mean any Share issued with restrictions on
the holder's right to sell, transfer, pledge, or assign such Share and with
such other restrictions as the Committee, in its sole discretion, may
impose (including, without limitation, any restriction on the right to vote
such Share, and the right to receive any cash dividends), which
restrictions may lapse separately or in combination at such time or times,
in installments or otherwise, as the Committee may deem appropriate.
(x) "Restricted Stock Award" shall mean an award of Restricted Stock
under Section 7 hereof.
(y) "Senior Officer" shall mean any employee of the Company holding the
office of Vice President or higher.
(z) "Shares" shall mean shares of the common stock of the Company, $2.50
par value, and such other securities of the Company as the Committee may
from time to time determine.
(aa) "Stockholders Meeting" shall mean the annual meeting of stockholders
of the Company in each year.
(bb) "1989 Plan" shall mean the Long-Term Stock Incentive Program adopted
by the Company's stockholders in 1989, as amended.
Section 3. Administration. The Plan shall be administered by the Committee.
The Committee shall have full power and authority, subject to such orders or
resolutions not inconsistent with the provisions of the Plan as may from time
to time be adopted by the Board, to: (i) select the Employees of the Company
and its Affiliates to whom Awards may from time to time be granted hereunder;
(ii) determine the type or types of Awards to be granted to each Participant
hereunder; (iii) determine the number of Shares to be covered by each Award
granted hereunder; provided, however, that Shares subject to Options granted
to any individual employee during any calendar year shall not exceed a total
of 3,000,000 Shares; (iv) determine the terms and conditions, not inconsistent
with the provisions of the Plan, of any Award granted hereunder; (v) determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares or other property, or canceled or suspended; (vi) determine
whether, to what extent and under what circumstances cash, Shares and other
property and other amounts payable with respect to an Award under this Plan
shall be deferred either automatically or at the election of the Participant;
(vii) interpret and administer the Plan and any instrument or agreement
entered
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into under the Plan; (viii) establish such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the
Plan; and (ix) make any other determination and take any other action that the
Committee deems necessary or desirable for administration of the Plan.
Decisions of the Committee shall be final, conclusive and binding upon all
persons, including the Company, any Participant, any stockholder, and any
employee of the Company or of any Affiliate. Notwithstanding the above, the
Committee shall not have any discretion with respect to the Options granted to
Outside Directors pursuant to Section 10 or stock purchased by Outside
Directors pursuant to Section 11. The Committee shall appoint an administrator
of the Plan for purposes of interpreting and administering the provisions of
Section 10 and Section 11 of the Plan.
Section 4. Shares Subject to the Plan.
(a) Subject to adjustment as provided in Section 4(b), the total number of
Shares available for grant under the Plan in a calendar year shall be nine-
tenths of one percent (0.9%) of the total outstanding Shares as of the first
day of calendar year 1997, plus a number of Shares equal to the number of
Shares available for grant under the 1989 Plan as of the close of business on
the date of the 1997 Stockholders Meeting, for calendar year 1997, and one and
one-half percent (1.5%) of the total outstanding Shares as of the first day of
each such year for which the Plan is in effect beginning with calendar year
1998; provided that such number shall be increased in any year by the number
of Shares available for grant hereunder in previous years but not covered by
Awards granted hereunder in such years; and provided further, that no more
than four million (4,000,000) Shares shall be cumulatively available for the
grant of Incentive Stock Options under the Plan. In addition, any Shares
issued by the Company through the assumption or substitution of outstanding
grants from an acquired company shall not reduce the shares available for
grants under the Plan. Any Shares issued hereunder may consist, in whole or in
part, of authorized and unissued shares or treasury shares. If any Shares
subject to any Award granted hereunder are forfeited or such Award otherwise
terminates without the issuance of such Shares or of other consideration in
lieu of such Shares, the Shares subject to such Award, to the extent of any
such forfeiture or termination, shall again be available for grant under the
Plan.
(b) In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, spin-off, or other change in the corporate
structure affecting the Shares, such adjustment shall be made in the aggregate
number and class of Shares which may be delivered under the Plan, in the
number, class and option price of Shares subject to outstanding Options
granted under the Plan, and in the value of, or number or class of Shares
subject to, Awards granted under the Plan as may be determined to be
appropriate by the Committee, in its sole discretion, provided that the number
of Shares subject to any Award shall always be a whole number, and provided
further, that the number and price of shares subject to outstanding Options
granted to Outside Directors pursuant to Section 10 hereof and the number of
shares subject to future Options to be granted pursuant to Section 10 shall be
subject to adjustment only as set forth in Section 10.
Section 5. Eligibility. Any Employee shall be eligible to be selected as a
Participant.
Section 6. Stock Options. Options may be granted hereunder to Participants
either alone or in addition to other Awards granted under the Plan. Any Option
granted to a Participant under the Plan shall be evidenced by an Award
Agreement in such form as the Committee may from time to time approve. Any
such Option shall be subject to the following terms and conditions and to such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall deem desirable:
(a) Exercise Price. The exercise price per Share purchasable under an
Option shall be determined by the Committee in its sole discretion;
provided that such exercise price shall not be less than the Fair Market
Value of the Share on the date of the grant of the Option.
(b) Option Period. The term of each Option shall be fixed by the
Committee in its sole discretion; provided that no Incentive Stock Option
shall be exercisable after the expiration of ten years from the date the
Option is granted.
(c) Exercisability. Options shall be exercisable at such time or times as
determined by the Committee at or subsequent to grant. Unless otherwise
determined by the Committee at or subsequent to grant, no
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Incentive Stock Option shall be exercisable until the first anniversary
date of the granting of the Incentive Stock Option.
(d) Method of Exercise. Subject to the other provisions of the Plan and
any applicable Award Agreement, any Option may be exercised by the
Participant in whole or in part at such time or times, and the Participant
may pay the exercise price in such form or forms, including, without
limitation, payment by delivery of cash, Shares or other consideration
(including, where permitted by law and the Committee, Awards) having a Fair
Market Value on the exercise date equal to the total exercise price, or by
any combination of cash, Shares and other consideration, as the Committee
may permit.
(e) Incentive Stock Options. In accordance with rules and procedures
established by the Committee, the aggregate Fair Market Value (determined
as of the time of grant) of the Shares with respect to which Incentive
Stock Options held by any Participant that are exercisable for the first
time by such Participant during any calendar year under the Plan (and under
any other benefit plans of the Company or of any parent or subsidiary
corporation of the Company) shall not exceed $100,000 or, if different, the
maximum limitation in effect at the time of grant under Section 422 of the
Code, or any successor provision, and any regulations promulgated
thereunder. The terms of any Incentive Stock Option granted hereunder shall
comply in all respects with the provisions of Section 422 of the Code, or
any successor provision, and any regulations promulgated thereunder.
(f) Form of Settlement. In its sole discretion, the Committee may
provide, at the time of grant, that the shares to be issued upon an
Option's exercise shall be in the form of Restricted Stock or other similar
securities, or may reserve the right so to provide after the time of grant,
or the Committee may provide that the Participant may elect to receive
Restricted Stock upon an Option's exercise.
Section 7. Restricted Stock.
(a) Issuance. Restricted Stock Awards may be issued hereunder to
Participants, for such consideration as the Committee may determine, not less
than the minimum consideration required by applicable law, either alone or in
addition to other Awards granted under the Plan. The provisions of Restricted
Stock Awards need not be the same with respect to each recipient.
(b) Registration. Any Restricted Stock issued hereunder may be evidenced in
such manner as the Committee in its sole discretion shall deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in
respect of shares of Restricted Stock awarded under the Plan, such certificate
shall be registered in the name of the Participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award or shall be held in escrow by the Company until all
restrictions on the Restricted Stock have lapsed.
(c) Forfeiture. Except as otherwise determined by the Committee at the time
of grant, upon termination of employment for any reason during the restriction
period, all shares of Restricted Stock still subject to restriction shall be
forfeited by the Participant and reacquired by the Company; provided that in
the event of a Participant's retirement, permanent disability, other
termination of employment or death, or in cases of special circumstances, the
Committee may, in its sole discretion, when it finds that a waiver would be in
the best interests of the Company, waive in whole or in part any or all
remaining restrictions with respect to such Participant's shares of Restricted
Stock.
Section 8. Performance Awards.
Performance Awards may be issued hereunder to Participants, for such
consideration as the Committee may determine, not less than the minimum
consideration required by applicable law, either alone or in addition to other
Awards granted under the Plan. The performance criteria to be achieved during
any Performance Period and the length of the Performance Period shall be
determined by the Committee upon the grant of each Performance Award. Except
as provided in Section 12, Performance Awards will be paid only after the end
of the relevant Performance Period. Performance Awards may be paid in cash,
Shares, other property or any
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combination thereof, in the sole discretion of the Committee at the time of
payment. The performance levels to be achieved for each Performance Period and
the amount of the Award to be distributed shall be conclusively determined by
the Committee. Performance Awards may be paid in a lump sum or in installments
following the close of the Performance Period or, in accordance with
procedures established by the Committee, on a deferred basis.
Section 9. Other Stock Unit Awards.
(a) Stock and Administration. Other Awards of Shares and other Awards that
are valued in whole or in part by reference to, or are otherwise based on,
Shares or other property ("Other Stock Unit Awards") may be granted hereunder
to Participants, either alone or in addition to other Awards granted under the
Plan. Other Stock Unit Awards may be paid in Shares, cash or any other form of
property as the Committee shall determine. Subject to the provisions of the
Plan, the Committee shall have sole and complete authority to determine the
Employees of the Company and its Affiliates to whom and the time or times at
which such Awards shall be made, the number of Shares to be granted pursuant
to such Awards, and all other conditions of the Awards. The provisions of
Other Stock Unit Awards need not be the same with respect to each recipient.
(b) Terms and Conditions. Subject to the provisions of this Plan and any
applicable Award Agreement, Shares subject to Awards made under this Section 9
may not be sold, assigned, transferred, pledged or otherwise encumbered prior
to the date on which the Shares are issued, or, if later, the date on which
any applicable restriction, performance or deferral period lapses. Shares
granted under this Section 9 may be issued for such consideration as the
Committee may determine, not less than the minimum consideration required by
applicable law. Shares purchased pursuant to a purchase right awarded under
this Section 9 shall be purchased for such consideration as the Committee
shall in its sole discretion determine, which shall not be less than the Fair
Market Value of such Shares as of the date such purchase right is awarded.
Section 10. Outside Directors' Options.
(a) Grant of Options. On the date of the 1998 Stockholders Meeting, each
Outside Director shall automatically be granted an Option to purchase 2,000
shares of the common stock of the Company, $2.50 par value; and on the date of
each Stockholders Meeting after the 1998 Stockholders Meeting, each Outside
Director shall automatically be granted an Option to purchase 2,000 shares of
the common stock of the Company. All such options shall be Nonstatutory Stock
Options. The price at which each share of common stock covered by such Options
may be purchased shall be one hundred percent (100%) of the Fair Market Value
of the stock on the date the Option is granted.
(b) Exercise of Options. Except as set forth in this Section 10, 25% of the
total number of the shares subject to an Option granted to an Outside Director
shall become exercisable on December 31 of the year in which the option is
granted and 25% on December 31 of each of the three succeeding years. The
right to purchase shares with respect to shares which have become exercisable
shall be cumulative during the term of the Option. Any Option that has been
outstanding for more than one (1) year shall immediately become exercisable in
the event of a Change in Control, as hereinafter defined. The Option may be
exercised by the Outside Director during the period that the Outside Director
remains a member of the Board and for a period of five (5) years following
retirement, provided that only those Options exercisable at the date of the
Outside Director's retirement may be exercised during the period following
retirement and, provided further, that in no event shall the Option be
exercisable more than ten (10) years after the date of grant.
In the event of the death of an Outside Director, the Option shall be
exercisable only within the twelve (12) months next succeeding the date of
death, and then only (i) by the executor or administrator of the Outside
Director's estate, by the person or persons to whom the Outside Director's
rights under the Option shall pass by the Outside Director's will or the laws
of descent and distribution or, by the Outside Director's designated
beneficiary, and (ii) if and to the extent that the Outside Director was
entitled to exercise the Option at the date of the Outside Director's death,
provided that in no event shall the Option be exercisable more than ten (10)
years after the date of grant.
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(c) Payment. An Option granted to an Outside Director shall be exercisable
only upon payment to the Company of the full exercise price of the shares with
respect to which the Option is being exercised. Payment for the shares shall
be in United States dollars, payable in cash or by check.
(d) Adjustment of Options. In case there shall be a merger, reorganization,
consolidation, recapitalization, stock dividend, spin-off, or other change in
corporate structure such that the shares of common stock of the Company are
changed into or become exchangeable for a larger or smaller number of shares,
thereafter the number of shares subject to outstanding Options and the number
of shares subject to Options to be granted to Outside Directors pursuant to
the provisions of this Section 10 shall be increased or decreased, as the case
may be, in direct proportion to the increase or decrease in the number of
shares, or the decrease or increase in the value of shares, of common stock of
the Company by reason of such change in corporate structure, provided that the
number of shares shall always be a whole number, and the exercise price per
share of any outstanding Options shall be increased or decreased, as the case
may be, in direct proportion to the decrease or increase in the number of
shares, or increase or decrease in value of shares, of common stock of the
Company by reason of such change in corporate structure.
Section 11. Outside Directors' Shares.
Outside Directors may elect, on an annual basis, to purchase shares of
common stock of the Company from the Company in lieu of receiving all or part
(in 10% increments) of their annual retainer, meeting fees and committee
meeting fees in cash. The purchase price of such shares shall be the Fair
Market Value of the stock for the last trading day of the month in which the
retainer, meeting fees, and committee meeting fees are earned.
Commencing May 1, 1997, the annual retainer, meeting fees and committee
meeting fees payable to each Outside Director for service on the Board may, at
the election of the Outside Director (the "Annual Election"), be payable to a
trust in shares of common stock of the Company. The Annual Election: (i) shall
be irrevocable in respect of the one-year period to which it pertains (the
"Plan Year") and shall specify the applicable percentage (in increments of
10%) of such annual retainer and meeting fees that such Outside Director
wishes to direct to the trust; (ii) must be received in writing by the
administrator of the Plan by the established enrollment deadline of any year
in which this Plan is in effect in order to cause the next succeeding Plan
Year's annual retainer and fees to be subject to the provisions of this Plan;
and (iii) must specify whether the ultimate distribution of the shares of
common stock to the Outside Directors will be paid, following the Outside
Director's death or termination of Board service, in a lump sum or in equal
annual payments over a period of two to twenty years.
The shares shall be purchased from the Company at the Fair Market Value of
the stock for the last trading day of the month in which the fees are earned
and shall be credited by the trustee to the account of the Outside Director.
The certificates for common stock shall be issued in the name of the trustee
of the trust and shall be held by such trustee in trust for the benefit of the
Outside Directors; provided, however, that each Outside Director shall be
entitled to vote the shares. The trustee shall retain all dividends (which
shall be reinvested in shares of common stock) and other distributions paid or
made with respect thereto in the trust. The shares credited to the account of
an Outside Director shall remain subject to the claims of the Company's
creditors, and the interests of the Outside Director in the trust may not be
sold, hypothecated or transferred (including, without limitation, transferred
by gift or donation) while such shares are held in the trust.
If the Outside Director elects to receive a lump sum distribution, the
trustee of the trust shall distribute such shares of common stock free of
restrictions within 60 days after the Outside Director's termination date or a
later date elected by the Outside Director (no later than the mandatory
retirement age of the Outside Director). If the Outside Director elects to
receive a lump sum distribution, the Outside Director may, by delivering
notice in writing to the administrator of the Plan no later than December 31
of the year prior to the year in which the Outside Director terminates service
as a Director, elect to receive any portion or all of the common stock in the
form of cash determined by reference to the Fair Market Value of the common
stock as of the termination date. Any such notice to the administrator must
specify whether the distribution will be entirely in cash or whether the
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distribution will be in a combination of common stock and cash (in which case
the applicable percentage must be specified). In the case of termination of
the Outside Director's service as a result of his death, payment of the
Outside Director's account shall be in shares of common stock and not in cash.
If an Outside Director elects to receive payments in installments, the
distribution will commence within 60 days after the Outside Director's
termination date and will be made in shares of common stock and not in cash.
Notwithstanding anything to the contrary contained herein, any fractional
shares of common stock shall be distributed in cash to the Outside Director.
Section 12. Change in Control.
(a) In order to maintain the Participants' rights in the event of any Change
in Control of the Company, as hereinafter defined, the Committee may, in its
sole discretion, as to any Award (except Options granted pursuant to Section
10 and stock purchased pursuant to Section 11), either at the time an Award is
made hereunder or any time thereafter, take any one or more of the following
actions: (i) provide for the acceleration of any time periods relating to the
exercise or realization of any such Award so that such Award may be exercised
or realized in full on or before a date fixed by the Committee; (ii) provide
for the purchase of any such Award, upon the Participant's request, for an
amount of cash equal to the excess of the Fair Market Value of the property
that could have been received upon the exercise of such Award or realization
of the Participant's rights had such Award been currently exercisable or
payable over the amount which would have been paid, if any, by the Participant
for such property; (iii) make such adjustment to any such Award then
outstanding as the Committee deems appropriate to reflect such Change in
Control; or (iv) cause any such Award then outstanding to be assumed, or new
rights substituted therefor, by the acquiring or surviving corporation after
such Change in Control. The Committee may, in its discretion, include such
further provisions and limitations in any agreement documenting such Awards as
it deems equitable and in the best interests of the Company.
(b) Unless the Committee determines otherwise with respect to any Award
(except any Option granted pursuant to Section 10), a "Change in Control"
shall be deemed to have occurred if (i) any person (as defined in Section
13(d) of the Securities Exchange Act of 1934 and the rules thereunder) other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Company, and other than the Company or a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities; or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board and any
new Director (other than a Director designated by a person who has entered
into an agreement with the Company to effect a transaction described in (i)
above) whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds ( 2/3) of the
Directors then still in office who either were Directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof. A Change of
Control shall not be deemed to have occurred for purposes of Section 10(b) if
a majority of the Directors described in clause (ii) above has approved the
transaction or transactions that would otherwise result in a Change of
Control.
Section 13. Amendments and Termination. The Board may amend, alter or
discontinue the Plan, but no amendment, alteration, or discontinuation shall
be made that would impair the rights of an optionee or Participant under an
Award theretofore granted, without the optionee's or Participant's consent, or
that without the approval of the Stockholders would:
(a) except as is provided in Section 4(b) of the Plan, increase the total
number of Shares reserved for the purposes of the Plan; or
(b) change in any way the terms of the Options provided for in Section 10 of
the Plan or the terms of stock purchases provided for in Section 11 of the
Plan.
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The Committee may amend the terms of any Award theretofore granted (except
Options granted pursuant to Section 10 hereof and stock purchased pursuant to
Section 11 hereof), prospectively or retroactively, but no such amendment
shall impair the rights of any Participant without his consent. The Committee
may also substitute new Awards for Awards previously granted to Participants,
including without limitation previously granted Options having higher option
prices.
Section 14. General Provisions.
(a) No Award shall be assignable or transferable by a Participant or an
Outside Director otherwise than by will or by the laws of descent and
distribution, except that Restricted Stock may be used in payment of the
exercise price of a stock option issued by the Company and may be otherwise
transferred in a manner that protects the interests of the Company as the
Committee may determine; provided that, if so determined by the Committee,
each Participant or Outside Director may, in the manner established by the
Committee, designate a beneficiary to exercise the rights of the Participant
or Outside Director with respect to any Award upon the death of the
Participant or Outside Director and to receive the Shares or other property
issued upon such exercise.
(b) The term of each Award shall be for such period from the date of its
grant as may be determined by the Committee; provided that in no event shall
the term of any Incentive Stock Option exceed a period of ten (10) years from
the date of its grant.
(c) No Employee or Participant shall have any claim to be granted any Award
under the Plan and there is no obligation for uniformity of treatment of
Employees or Participants under the Plan.
(d) The prospective recipient of any Award under the Plan shall not, with
respect to such Award, be deemed to have become a Participant, or to have any
rights with respect to such Award, until and unless such recipient shall have
executed an agreement or other instrument evidencing the Award and delivered a
fully executed copy thereof to the Company, and otherwise complied with the
then applicable terms and conditions.
(e) The Committee shall be authorized to make adjustments in performance
award criteria or in the terms and conditions of other Awards in recognition
of unusual or nonrecurring events affecting the Company or its financial
statements or changes in applicable laws, regulations or accounting
principles. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award in the manner and to the
extent it shall deem desirable to carry it into effect. In the event the
Company shall assume outstanding employee benefit awards or the right or
obligation to make future such awards in connection with the acquisition of
another corporation or business entity, the Committee may, in its discretion,
make such adjustments in the terms of Awards under the Plan as it shall deem
appropriate. Notwithstanding the above, the Committee shall not have the right
to make any adjustments in the terms or conditions of Options granted or to be
granted pursuant to Section 10 or the terms or conditions of stock purchases
pursuant to Section 11.
(f) The Committee shall have full power and authority to determine whether,
to what extent and under what circumstances any Award (other than an Option
granted pursuant to Section 10) shall be canceled or suspended. In particular,
but without limitation, all outstanding Awards to any Participant shall be
canceled if the Participant, without the consent of the Committee, while
employed by 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 or any
one or more Senior Officers or committee of Senior Officers to whom the
authority to make such determination is delegated by the Committee.
(g) All certificates for Shares delivered under the Plan pursuant to any
Award shall be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Shares are then listed, and any applicable Federal or state
securities law, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions.
A-8
<PAGE>
(h) Subject to the provisions of this Plan and any Award Agreement, the
recipient of an Award (including, without limitation, any deferred Award, but
excluding Options granted pursuant to Section 10) may, if so determined by the
Committee, be entitled to receive, currently or on a deferred basis, interest
or dividends, or interest or dividend equivalents, with respect to the number
of shares covered by the Award, as determined by the Committee, in its sole
discretion, and the Committee may provide that such amounts (if any) shall be
deemed to have been reinvested in additional Shares or otherwise reinvested.
(i) Except as otherwise required in any applicable Award Agreement or by the
terms of the Plan, recipients of Awards under the Plan shall not be required
to make any payment or provide consideration other than the rendering of
services.
(j) The Committee may delegate to one or more Senior Officers or a committee
of Senior Officers the right to grant Awards to Employees who are not officers
or Directors of the Company and to cancel or suspend Awards to Employees who
are not officers or Directors of the Company.
(k) The Company shall be authorized to withhold from any Award granted or
payment due under the Plan the amount of withholding taxes due with respect to
an Award or payment hereunder and to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes. The Company shall also be authorized to accept the
delivery of Shares by a Participant in payment for the withholding of taxes.
(l) Nothing contained in this Plan shall prevent the Board of Directors from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
(m) The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the
laws of the State of Kansas and applicable Federal law.
(n) If any provision of this Plan is or becomes or is deemed invalid,
illegal or unenforceable in any jurisdiction, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws or if it
cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan, it shall be stricken
and the remainder of the Plan shall remain in full force and effect.
Section 15. Effective Date of Plan. The Plan shall be effective as of April
15, 1997.
Section 16. Term of Plan. No Award shall be granted pursuant to the Plan
after April 15, 2007, but any Award granted on or before such date may extend
beyond that date.
A-9
<PAGE>
The following narrative descriptions of graphic and image material
appearing in the Proxy Statement in connection with the Annual Meeting of
Stockholders of Sprint Corporation to be held on April 15, 1997 are provided
pursuant to Rule 304(b) (2) of Regulation S-T:
1. Pages 3, 4 and 5 contain photographs of the members of Sprint's Board
of Directors to the right of each member's biographical description.
2. Page 15 contains a graph comparing the cumulative total Stockholder
return for Sprint Common Stock with the S&P 500 Stock Index, the S&P Telephone
Utility Index and the S&P Telecommunications (Long Distance) Index, for the
five-year period from December 31, 1991 to December 31, 1996. The graph contains
four lines, one for each of Sprint and the three S&P indexes, plotted
consistently with the data contained in a table included with the electronic
filing.
<PAGE>
P R O X Y
SPRINT CORPORATION
P.O. BOX 11315, KANSAS CITY, MISSOURI 64112
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING ON APRIL 15, 1997
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, 3 AND 4 AND AGAINST
ITEMS 5, 6 AND 7.
The undersigned hereby appoints W.T. Esrey, J.R. Devlin and A.B. Krause, and
each of them, with full power of substitution, as proxies, to vote all the
shares of Common and Preferred Stock of Sprint Corporation (Sprint) which the
undersigned is entitled to vote at the 1997 Annual Meeting of Stockholders to
be held April 15, 1997, and any adjournment thereof, upon the following
matters, AND IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING:
1. To elect the nominees listed below, and each of them, as Directors of Class
II; and while Sprint has no reason to believe that any of the nominees will
decline or be unable to serve, if any do, to vote with discretionary
authority.
[_] FOR all nominees listed below
(except as marked to the contrary below)
[_] WITHHELD AUTHORITY
to vote for all nominees listed below
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Ruth M. Davis Harold S. Hook Ronald T. LeMay Charles E. Rice
2. To approve performance goals under which executives earn incentive
compensation.
FOR [_] AGAINST [_] ABSTAIN [_]
3. To approve the 1997 Long-Term Stock Incentive Program.
FOR [_] AGAINST [_] ABSTAIN [_]
4. To approve the appointment of Ernst & Young LLP as independent auditors of
Sprint for 1997.
FOR [_] AGAINST [_] ABSTAIN [_]
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 5, 6 AND 7.
5. Stockholder proposal concerning retirement plan for outside directors.
FOR [_] AGAINST [_] ABSTAIN [_]
6. Stockholder proposal concerning executive compensation.
FOR [_] AGAINST [_] ABSTAIN [_]
7. Stockholder proposal concerning the classified Board.
FOR [_] AGAINST [_] ABSTAIN [_]
(PLEASE SIGN ON REVERSE SIDE)
<PAGE>
THIS PROXY, IF SIGNED AND RETURNED, WILL BE VOTED AS SPECIFIED ON THE REVERSE
SIDE. IF THIS CARD IS SIGNED AND RETURNED WITHOUT SPECIFICATIONS, YOUR SHARES
WILL BE VOTED FOR ITEMS 1, 2, 3 AND 4 AND AGAINST ITEMS 5, 6 AND 7. A majority
of said proxies, or any substitute or substitutes, who shall be present and act
at the meeting (or if only one shall be present and act, then that one) shall
have all the powers of said proxies hereunder.
Please sign exactly as name appears. If
shares are held jointly, any one of the
joint owners may sign. Attorneys-in-fact,
executors, administrators, trustees,
guardians or corporation officers should
indicate the capacity in which they are
signing. PLEASE SIGN, DATE, AND MAIL THIS
PROXY PROMPTLY WHETHER OR NOT YOU EXPECT
TO ATTEND THE MEETING. YOU MAY
NEVERTHELESS VOTE IN PERSON IF YOU DO
ATTEND.
DATE _____________________________ , 1997
PLEASE __________________________________
SIGN Signature
HERE
__________________________________
Signature
<PAGE>
FIDELITY INSTITUTIONAL OPERATIONS CO. FIRST CLASS
P.O. BOX 9107 U.S. POSTAGE
HINGHAM, MA 02043-9107 PAID
PROXY
TABULATOR
- --------------------Please detach at perforation before mailing----------------
FIDELITY MANAGEMENT TRUST COMPANY
and THE NORTHERN TRUST COMPANY, TRUSTEES
P.O. Box 9107, Hingham, Massachusetts 02043-9107
Voting Instructions for Annual Meeting of Stockholders of Sprint Corporation on
April 15, 1997
I hereby direct Fidelity Management Trust Company and The Northern Trust
Company, either in person or by proxy, to vote all shares of Common Stock of
Sprint Corporation (Sprint) which have been allocated to my account(s) under the
Sprint Retirement Savings Plan, the Sprint Retirement Savings Plan for
Bargaining Unit Employees, the Centel Retirement Savings Plan for Bargaining
Unit Employees, the Centel Employees' Stock Ownership Plan, the 360
Communications Company Retirement Savings Plan and the Global One Retirement
Savings Plan at the Annual Meeting of Stockholders to be held April 15, 1997,
and any adjournments thereof, in the manner specified on the reverse side, and
in their discretion upon such other matters as may properly come before the
meeting:
Date __________________________, 1997
If you sign and return this card in the enclosed
envelope for receipt by Fidelity Management Trust
Company by April 9, 1997, your shares will be voted as
specified on the reverse side, or if this card is
signed and returned without specifications, your shares
will be voted FOR items 1, 2, 3 and 4 and AGAINST items
5, 6 and 7.
___________________________________
Signature
<PAGE>
You are entitled to direct the voting of the total number of shares of
Common Stock of Sprint allocated to your accounts through February 18, 1997, the
record date for voting at the April 15, 1997, Stockholders Meeting. Your
accounts are held within one or more of the following plans: (a) the Sprint
Retirement Savings Plan (including TRASOP), (b) the Sprint Retirement Savings
Plan for Bargaining Unit Employees, (c) the Centel Retirement Savings Plan for
Bargaining Unit Employees, (d) the Centel Employees' Stock Ownership Plan , (e)
the 360 Communications Company Retirement Savings Plan, and (f) the Global One
Retirement Savings Plan. The Centel Employees' Stock Ownership Plan, the Centel
Retirement Savings Plan for Bargaining Unit Employees, and the 360
Communications Company Retirement Savings Plan each provide for the trustees to
vote all Sprint shares held in the trusts for which they do not receive voting
instructions in the same proportions as they vote the Sprint stock for which
they do receive instructions. The trustee will vote all unallocated shares held
in the Sprint Retirement Savings Plan (including the TRASOP), the Sprint
Retirement Savings Plan for Bargaining Unit Employees and the Global One
Retirement Savings Plan in the same proportions as instructions received for
shares voted, and any shares allocated to participant accounts in these plans
for which the trustees do not receive voting instructions will not be voted.
Statements of your accounts will be provided separately.
<TABLE>
<CAPTION>
-------------------------Please detach at perforation before mailing------------------------
<S> <C>
Sprint Retirement Savings Plan Centel Employees' Stock Ownership Plan
Sprint Retirement Savings Plan 360 Communications Company Retirement Savings Plan
for Bargaining Unit Employees Global One Retirement Savings Plan
Centel Retirement Savings Plan
for Bargaining Unit Employees
The Board of Directors recommends a vote FOR items 1, 2, 3 and 4 and
AGAINST items 5, 6 and 7. Please vote by filling in the appropriate boxes below,
as shown, using blue or black ink or dark pencil. Do not use red ink. [X]
1. To elect the nominees listed below, and each of them, as Directors of Class
II; and while Sprint has no reason to believe that any of the nominees will
decline or be unable to serve, if any do, to vote with discretionary
authority.
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY
(except as marked to the contrary at left) to vote for all nominees listed at left
(To withhold authority to vote for any individual nominee write the nominee's name on the line below.)
Ruth M. Davis Harold S. Hook Ronald T. LeMay Charles E. Rice
__________________________________________________________________________________________________________________________
FOR AGAINST ABSTAIN
2. To approve performance goals under which executives earn incentive compensation. [_] [_] [_]
3. To approve the 1997 Long-Term Stock Incentive Program. [_] [_] [_]
4. To approve the appointment of Ernst & Young LLP as independent auditors of Sprint for 1997. [_] [_] [_]
The Board of Directors recommends a vote AGAINST Items 5, 6 and 7.
5. Stockholder proposal concerning retirement plan for outside Directors. [_] [_] [_]
6. Stockholder proposal concerning executive compensation. [_] [_] [_]
7. Stockholder proposal concerning the classified Board. [_] [_] [_]
</TABLE>
(Please sign on reverse side.)
