Proposal 4. Approval of the Sprint Corporation Amended and Restated 2015 Omnibus
Incentive Plan
(Item 4 on Proxy Card)
The
Compensation Committee has recommended, and the Board has unanimously approved, an amendment and restatement of the Companys 2015 Omnibus Incentive Plan (as so amended and restated, the Sprint Corporation Amended and Restated 2015
Omnibus Incentive Plan, or Amended 2015 Plan), which would in general (1) increase the authorized number of shares available for grant under the Amended 2015 Plan by 137 million new shares, (2) amend clause
(iii) of the definition of Change in Control to provide that a Change in Control will occur if, during any consecutive 18-month period, more than 50% of the board ceases to be comprised of incumbent directors (rather than 30%), (3) extend
the term of the Amended 2015 Plan until November 1, 2026, (4) implement a cash aspect to the annual director limit and increase the annual director limit accordingly; and (5) make certain other non-substantive, clarifying or conforming
changes to the original plan document. The Amended 2015 Plan would become effective on November 1, 2016, if approved by stockholders at our 2016 annual meeting. If the Amended 2015 Plan is not approved by stockholders, the Companys 2015
Omnibus Incentive Plan (the 2015 Plan) would continue in effect in accordance with its existing terms.
At the 2015 annual meeting,
stockholders approved the 2015 Plan. We did not request additional shares last year in connection with the adoption of the 2015 Plan; the entire initial authorization for the 2015 Plan was previously approved by stockholders and rolled over from the
expiring 2007 Omnibus Incentive Plan (the 2007 Plan). A full summary of the plan proposal for the Amended 2015 Plan is attached hereto as Annex A and the full terms of the Amended 2015 Plan are included as Annex B.
Adoption of this proposal requires the affirmative vote of the majority of the votes cast in person or by proxy by holders of our common stock entitled
to vote at the annual meeting.
Our Board of Directors recommends that you vote
FOR
Proposal 4.
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70
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Notice of
Annual Meeting and Proxy Statement
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General Information
General Information
Information Regarding Solicitation
Mailing
Date:
On or about September 22, 2016, we mailed to our stockholders entitled to vote at the meeting the Notice or, for stockholders who have already requested to receive printed materials, this proxy statement, the accompanying proxy card, and
the Form 10-K for fiscal year 2015.
Address of Principal Executive Offices:
6200 Sprint Parkway, Overland Park, Kansas 66251.
Solicitation:
These proxy materials are delivered in connection with the solicitation by our board of directors of proxies to be voted at our annual meeting of
stockholders.
Purpose of the Annual Meeting
At the virtual annual meeting, you will be asked to:
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elect each of the seven directors named herein (
Item 1 on the proxy card
);
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ratify the selection of the independent registered public accounting firm (
Item 2 on the proxy card
);
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approve, on an advisory basis, our named executive officer compensation (
Item 3 on the proxy card
);
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approve the Amended 2015 Omnibus Incentive Plan (
Item 4 on the proxy card
); and
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take action on any other business that properly comes before the meeting and any adjournment or postponement of the meeting.
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Record Date; Stockholders Entitled to Vote
The close of business on September 2, 2016 has been fixed as the record date for the determination of stockholders entitled to notice of, and to vote at,
the 2016 annual meeting or any adjournments or postponements of the 2016 annual meeting.
As of the record date, we had 3,979,270,096 shares of our
common stock outstanding of which 181,992 are not entitled to vote. These shares represent shares originally issued by Sprint Nextel that have not been exchanged for Sprint Corporation shares. Each share of our common stock entitles the record
holder to one vote on each matter presented at the 2016 annual meeting.
A complete list of stockholders entitled to vote at the 2016 annual meeting
will be available for examination by any stockholder at our Principal Executive Offices for purposes pertaining to the 2016 annual meeting during normal business hours for a period of ten days before the annual meeting and at
www.virtualshareholdermeeting.com/SprintCorp16
during the annual meeting.
Street Name and Broker Non-Votes
You are a record holder if you hold our shares directly in your name through our transfer agent, Computershare Trust Company, N.A., as a
stockholder of record. If you hold our shares through a broker, bank, financial institution, trust, or other nominee, then you are a holder of our shares in street name. If you hold your shares in street name, you must
instruct the broker or other nominee about how to vote your shares.
A broker non-vote occurs when a stockholder holding in street
name fails to provide voting instructions to his or her broker or other nominee. Under the rules of the NYSE, if you do not provide such instructions, the firm that holds your shares will have discretionary authority to vote your shares with
respect to routine matters. Of the four items to be considered at our annual meeting, only the appointment of Deloitte (Item 2) is considered routine. Those non-routine items for which a stockholders broker or other
nominee does not have discretion to vote are treated as broker non-votes.
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Notice of Annual Meeting and Proxy Statement |
71
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General Information
Voting Standards
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Election of
Directors
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Auditor
Ratification
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Advisory
Approval of
Executive
Compensation
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Approval of
Amended
2015 Omnibus
Incentive Plan
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Voting Standard
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Plurality, which means directors
receiving the highest number of votes FOR will be elected
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Majority of
shares
present and entitled
to vote
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Majority of shares present and entitled to vote
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Majority of shares present and entitled to vote
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Broker Non-Votes
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Not counted as entitled
to vote and therefore no effect
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Not applicable
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Not counted as entitled to vote and therefore
no effect
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Not counted as
entitled to vote and therefore no effect
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Treatment of Abstentions
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Not applicable
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Will be treated as a vote AGAINST
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Will be treated as a vote AGAINST
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Will be treated as a vote AGAINST
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Uninstructed Proxy
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Will be voted FOR this item.
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Will be voted FOR this item.
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Will be voted FOR this item.
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Will be voted
FOR this item.
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Board Recommendation
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FOR
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FOR
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FOR
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FOR
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We do not intend to bring any other matters before the meeting, and we do not know of any matters to be brought before
the meeting by others. Should any matter not described above be properly presented at the meeting, the persons named in the proxy card will vote in accordance with their judgment as permitted.
Quorum
In order to carry on the
business of the meeting, we must have a quorum. A quorum requires the presence, in person or by proxy, of the holders of a majority of the votes entitled to be cast at the meeting. We count abstentions and broker non-votes as present and
entitled to vote for purposes of determining a quorum.
Voting of Proxies
Giving a proxy means that you authorize the persons named in the proxy card to vote your shares at the 2016 annual meeting in the manner
directed. You may vote by proxy or, if you attend the annual meeting via the Internet, by following the instructions at
www.virtualshareholdermeeting.com/SprintCorp16
. To vote by proxy, you may use one of the following methods if you are a
record holder:
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By Internet
You can vote over the Internet at
www.proxyvote.com
by entering the control number found on your Notice or proxy card;
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By Telephone
You can vote by telephone by calling 1-800-690-6903 and entering the control number found on your Notice or proxy card; or
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By Mail
If you received your proxy materials by mail, you can vote by signing, dating, and mailing the proxy card in the pre-paid enclosed envelope. Your proxy card must be received before the voting polls
close at the annual meeting.
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Notice of
Annual Meeting and Proxy Statement
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General Information
We request that you vote as soon as possible. When the proxy is properly submitted, the shares of
stock represented by the proxy will be voted at the 2016 annual meeting in accordance with the instructions contained in the proxy.
If your shares
are held in street name by a broker or other nominee, you should review the voting form used by that firm to determine whether you may provide voting instructions to the broker or other nominee by telephone or the Internet.
The deadline for voting by phone or via the Internet, except with respect to shares acquired through participation in our 401(k) plan, is 11:59 p.m.
Eastern on October 31, 2016.
Your vote is important. Accordingly, you should vote via the Internet or by telephone; sign, date and return the enclosed proxy
card if you received it by mail; or provide instructions to your broker or other nominee whether or not you plan to attend the annual meeting online.
Revocability of Proxies and Changes to a Stockholders Vote
You have the power to revoke your proxy or change your vote at any time
before the proxy is voted at the annual meeting. You can revoke your proxy or change your vote in one of four ways:
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by sending a signed notice of revocation to our corporate secretary to revoke your proxy;
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by sending to our corporate secretary a completed proxy card bearing a later date than your original proxy indicating the change in your vote;
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by logging on to
www.proxyvote.com
in the same manner you would to submit your proxy electronically or calling 1-800-690-6903, and, in each case, following the instructions to revoke or change your vote; or
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by attending the annual meeting online and voting, which will automatically cancel any proxy previously given. Attendance alone will not revoke any proxy that you have given previously.
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If you choose any of the first three methods, you must take the described action no later than the beginning of the 2016 annual meeting. Once voting on
a particular matter is completed at the annual meeting, you will not be able to revoke your proxy or change your vote. If your shares are held in street name by a broker or other nominee, you must contact that institution to change your vote.
Solicitation of Proxies
This
solicitation is made on behalf of our board, and we will pay the cost and expenses of printing and mailing this proxy statement and soliciting and obtaining the proxies, including the cost of reimbursing brokers, banks, and other financial
institutions for forwarding proxy materials to their customers. Proxies may be solicited, without extra compensation, by our officers and employees by mail, telephone, email, personal interviews or other methods of communication.
Voting by Our Employees Participating in Sprints 401(k) Plan
If you are an employee of Sprint who has a right to vote shares acquired through your participation in our 401(k) plan, you are entitled to instruct the
trustee, Fidelity Management Trust Company, how to vote the shares allocated to your account. The trustee will vote those shares as you instruct. You will receive voting information for any shares held in your 401(k) plan account, as well as any
other shares registered in your own name.
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Notice of Annual Meeting and Proxy Statement |
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General Information
If you do not instruct the trustee how to vote your shares, the 401(k) plan provides for the trustee
to vote those shares in the same proportion as the shares for which it receives instructions from all other participants. To allow sufficient time for the trustee to vote, your voting instructions must be received by the trustee by 11:59 p.m.
Eastern on October 29, 2016.
Delivery of Proxy Materials to Households Where Two or More Stockholders Reside
SEC rules allow us to deliver multiple Notices in a single envelope or a single copy of an annual report and proxy statement to any household where two
or more stockholders reside if we believe the stockholders are members of the same family. This rule benefits stockholders by reducing the volume of duplicate information they receive at their households. It also benefits us by reducing our printing
and mailing costs and reducing the environmental impact associated with our annual meeting.
We mailed Notices in a single envelope, or a single set
of proxy materials, as applicable, to each household this year unless the stockholders in these households provided instructions to the contrary in response to a notice previously mailed to them. However, for stockholders who previously requested a
printed set of the proxy materials, we mailed each stockholder in a single household a separate proxy card or voting instruction form. If you prefer to receive your own copy of the proxy materials for this or future annual meetings and you are a
record holder, you may request a duplicate set by writing to shareholder relations, 6200 Sprint Parkway, Mailstop KSOPHF0302-3B424, Overland Park, Kansas 66251, by email at
shareholder.relations@sprint.com,
or by calling 913-794-1091, and we
will promptly furnish such materials. If a broker or other nominee holds your shares, you may instruct your broker to send duplicate mailings by following the instructions on your voting instruction form or by contacting your broker.
If you share a household address with another stockholder, and you receive duplicate mailings of the proxy materials this year, you may request that
your household receive a single set of proxy materials in the future. If you are a record holder, please contact Sprint Shareholder Relations using one of the contact methods described above. If a broker or other nominee holds your shares, you
should follow the instructions on your voting instruction form or contact your broker.
If you hold some shares as a record holder or through our
401(k) plan, and other shares in the name of a broker or other nominee, we must send you proxy materials for each account. To avoid receiving duplicate sets of proxy materials, you may consolidate accounts or consent to electronic delivery as
described in the following section.
Internet Availability of the Proxy Materials
We are able to distribute the annual report and proxy statement to stockholders in a fast and efficient manner via the Internet. This reduces the amount
of paper delivered to a stockholders address, eliminates the cost of sending these documents by mail and reduces the environmental impact associated with our annual meeting. You may elect to view all future annual reports and proxy statements
on the Internet instead of receiving them by mail. Alternatively, you may elect to receive all future annual reports and proxy statements by mail instead of viewing them via the Internet. To make an election, please log on to
www.proxyvote.com
and enter your control number.
If you have enrolled for electronic delivery, you will receive an email notice of
stockholder meetings. The email will provide links to our annual report and our proxy statement. These documents are in PDF format so you will need Adobe Acrobat
®
Reader to view these
documents online, which you can download for free by visiting
www.adobe.com
. The email will also provide a link to a voting web site and a control number to use to vote via the Internet.
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74
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Notice of
Annual Meeting and Proxy Statement
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General Information
Attending the Annual Meeting Online
We are having a completely virtual meeting of stockholders. Anyone can view the annual meeting live via the internet at
www.virtualshareholdermeeting.com/SprintCorp16.
We encourage you to access the meeting prior to the start time.
Webcast starts at 12:00 p.m. Central time.
Instructions on how to attend and
participate via the Internet, including how to demonstrate proof of stock ownership, are posted on the meeting website. We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting.
If
you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call (855)
499-0991.
Stockholders
may vote and submit questions while attending the meeting on the Internet.
The webcast will be available for replay until midnight on November 13, 2016.
Proposals Submitted Pursuant to Rule 14a-8
You may submit proposals for consideration at future stockholder meetings. Such proposals also must comply with SEC regulations under Rule 14a-8
regarding the inclusion of stockholder proposals in company-sponsored proxy materials. We expect that the 2017 Annual Meeting of Stockholders will occur on or about August 3, 2017. Based on such date, and because the date of the 2017 Annual Meeting
of Shareholders will be changed by more than 30 days from the anniversary date of the 2016 Annual Meeting of Shareholders, the date by which the Company must receive shareholder proposals to be considered for inclusion in the proxy materials for the
2017 Annual Meeting of Stockholders is March 3, 2017, which we believe is a reasonable time before we begin to print and send the proxy materials for the 2017 Annual Meeting of Stockholders. If you intend to submit a proposal, it must be received by
our Corporate Secretary at 6200 Sprint Parkway, Overland Park, KS 66251, KSOPHF0302-3B424, no later than that date.
Proposals or
Nominations Not Submitted Pursuant to Rule 14a-8
For a stockholders proposal or nomination that is not intended to be included in our proxy
statement for the 2017 annual meeting under Rule 14a-8, the stockholder must provide the information required by our bylaws and give timely notice to our Corporate Secretary in accordance with our bylaws, which, in general, require that the notice
be received by our Corporate Secretary not earlier than the close of business on April 5, 2017; and no later than the close of business on May 5, 2017. If the date of the annual meeting is advanced or delayed by more than 30 days from the
anniversary of this years meeting, notice will be timely if received, no earlier than the close of business 120 days and no later than the close of business 90 days in advance of such annual meeting or 10 days following the date on which
public announcement of the date of the meeting is first made.
Availability of Sprints Bylaws
Our bylaws, which contain provisions regarding the requirements for making stockholder proposals and nominating director candidates, are available on our
website at
www.sprint.com/governance
.
Form 10-K
Upon written request to the Corporate Secretary at Sprint Corporation at 6200 Sprint Parkway, Overland Park, KS 66251, KSOPHF0302-3B424, we will provide
without charge a copy of
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Notice of Annual Meeting and Proxy Statement |
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General Information
our annual report on Form 10-K, including the financial statements and financial statement schedules, filed with the
SEC for the fiscal year ended March 31, 2016.
Litigation
Five stockholder derivative suits related to the
Bennett v. Sprint Nextel Corp.
stockholder case (now settled) were filed against Sprint
Communications, Inc. (f/k/a Sprint Nextel Corporation) and certain of its present and/or former officers and directors. The first,
Murphy v. Forsee
, was filed in state court in Kansas on April 8, 2009, was removed to federal court, and
was stayed by the court pending resolution of the motion to dismiss the
Bennett
case; the second,
Randolph v. Forsee
, was filed on July 15, 2010 in state court in Kansas, was removed to federal court, and was remanded back to
state court; the third,
Ross-Williams v. Bennett, et al.
, was filed in state court in Kansas on February 1, 2011; the fourth,
Price v. Forsee, et al.,
was filed in state court in Kansas on April 15, 2011; and the fifth,
Hartleib v. Forsee, et. al
., was filed in federal court in Kansas on July 14, 2011. These cases were essentially stayed while the
Bennett
case was pending, and we have reached an agreement in principle to settle the matters, by
agreeing to some governance provisions and by paying plaintiffs attorneys fees in an immaterial amount. We are awaiting final approval by the court.
Sprint Communications, Inc. is also a defendant in a complaint filed by stockholders of Clearwire Corporation, asserting claims for breach of fiduciary
duty by Sprint Communications, and related claims and otherwise challenging the Clearwire Acquisition
. ACP Master, LTD, et al. v. Sprint Nextel Corp., et al.
, was filed April 26, 2013 in Chancery Court in Delaware. Our motion to dismiss
the suit was denied, discovery is substantially complete and our motion for summary judgment is pending. Plaintiffs in the
ACP Master, LTD
suit have also filed suit requesting an appraisal of the fair value of their Clearwire stock. Discovery
in that case was consolidated with the breach of fiduciary duty case and is substantially complete. Trial is scheduled to begin in October 2016. Sprint Communications intends to defend the
ACP Master, LTD
cases vigorously. We do not expect
the resolution of these matters to have a material adverse effect on our financial position or results of operations.
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Notice of
Annual Meeting and Proxy Statement
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Annex A: Additional Information Regarding Proposal 4
Why We Believe You Should Vote for Proposal 4
On May 17, 2016, our board unanimously approved the Sprint Corporation Amended and Restated 2015 Omnibus Incentive Plan, or the Amended 2015 Plan,
subject to your approval at the annual meeting. The Amended 2015 Plan will replace the Sprint Corporation 2015 Omnibus Incentive Plan, or the 2015 Plan, which originally was approved by our stockholders on August 7, 2015.
The Amended 2015 Plan will allow us to continue to offer our employees performance-based compensation and equity awards, which the board believes is
necessary for us to retain, motivate and attract experienced and highly qualified employees who will contribute to our financial success. We would be at a distinct competitive disadvantage if we could not use equity-based awards to recruit,
motivate, and retain our officers and other employees. The use of our common stock as part of our compensation program fosters a pay-for-performance culture that is an important element of our overall compensation philosophy. We believe that equity
compensation motivates employees to appropriately focus on actions that enhance stockholder value because they will share in that value enhancement through improved share price performance. Our equity compensation also effectively retains our
officers and other employees and promotes a focus on sustained enhancement through improved share price performance. Some of the key features of the Amended 2015 Plan that reflect our commitment to effective management of equity and incentive
compensation are set forth below.
The Amended 2015 Plan provides for the grant of stock options, stock appreciation rights (or SARs), restricted
stock, restricted stock units (or RSUs), performance shares, performance units, and other equity-based and cash awards (collectively referred to as awards) to our employees, outside directors and certain other service providers.
Our principal reason for seeking approval of the Amended 2015 Plan is to obtain stockholder approval of the additional shares available for awards under
the Amended 2015 Plan. Stockholder approval of the Amended 2015 Plan is also intended to constitute approval of the material terms for qualified performance-based compensation under the Amended 2015 Plan for purposes of
Section 162(m) of the IRC. Section 162(m) of the IRC generally disallows a deduction for certain compensation paid to our Chief Executive Officer and certain other executive officers in a taxable year to the extent that compensation to a
covered employee exceeds $1 million for such year. However, some types of compensation, including qualified performance-based compensation under Section 162(m) of the IRC, are not subject to the deduction limit if the compensation
satisfies the requirements of Section 162(m) of the IRC. The deduction limit does not apply to compensation paid under a stockholder approved plan that meets certain requirements for qualified performance-based compensation under
Section 162(m) of the IRC. While we believe it is in the best interests of Sprint and our stockholders to have the ability to potentially grant qualified performance-based compensation under Section 162(m) of the IRC under the
Amended 2015 Plan, we may decide to grant compensation to covered employees that will not qualify as qualified performance-based compensation for purposes of Section 162(m) of the IRC. Moreover, even if we intend to grant
compensation that qualifies as qualified performance-based compensation for purposes of Section 162(m) of the IRC under the Amended 2015 Plan, we cannot guarantee that such compensation will so qualify or ultimately will be
deductible by us.
Generally, compensation attributable to stock options, appreciation rights and other performance-based awards may be deemed to
qualify as qualified performance-based compensation under Section 162(m) of the IRC if: (1) the grant is made by a committee of outside directors for purposes of Section 162(m) of the IRC; (2) the plan under which the
award is granted states the maximum number of shares and the maximum amount of cash awards that may be
A-1
Annex A: Additional Information Regarding Proposal 4
granted to any individual during a specified period of time; and (3) the amount of compensation an individual may
receive under the awards is based solely on the achievement of one or more pre-established performance goals which incorporate business criteria approved by stockholders (or, in the case of stock options or appreciation rights, the increase in the
value of the shares after the date of grant). Stockholder approval of Proposal 4 is intended to satisfy the stockholder approval requirements under Section 162(m) of the IRC.
We are seeking stockholder approval of the material terms for qualified performance-based compensation under the Amended 2015 Plan,
including the performance measures and applicable individual grant limits under the Amended 2015 Plan, as well as the individuals eligible to receive such awards under the Amended 2015 Plan, to have the flexibility to potentially grant awards under
the Amended 2015 Plan that may be fully deductible for federal income tax purposes. If our stockholders approve the material terms for qualified performance-based compensation under the Amended 2015 Plan, assuming that all other
Section 162(m) requirements are met, we may be able to obtain tax deductions with respect to awards issued under the Amended 2015 Plan to our Section 162(m) executive officers without regard to the limitations of Section 162(m)
through the 2021 annual meeting of our stockholders (or, in other words, for five years).
Historical Annual Share Usage
While the use of equity is an important part of our compensation program, we are mindful of our responsibility to our stockholders to exercise judgment
in the granting of equity awards.
In connection with the adoption and approval of our 2015 Plan, we did not request stockholders to approve any
additional shares; rather, the entire initial authorization of shares reserved for issuance under the 2015 Plan consisted solely of shares rolled over from our 2007 Omnibus Incentive Plan. We are requesting stockholder approval of an additional
137,247,553 new shares to be issued as awards under the Amended 2015 Plan.
Share Usage
. The annual share usage under the Companys
equity compensation program for the last three fiscal years is described in the table below:
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Fiscal
Year 2016
(as of 9/2/16)
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Fiscal
Year 2015
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Fiscal Year 2014
and Transition
Period
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Fiscal year
2013
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All share counts in millions
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Weighted-Average Common Shares
Outstanding
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3,976
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3,969
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3,953
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3,475
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Options:
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Granted
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11
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12
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23
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2
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Forfeited
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(3
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)
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10
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14
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4
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Exercised
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(4
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1
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17
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21
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Outstanding at period end
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45
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41
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40
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48
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Full value awards
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Granted
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14
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31
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9
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18
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Forfeited
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(2
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)
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9
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5
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3
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Vested
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(1
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)
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5
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18
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3
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Outstanding at
period end
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47
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36
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19
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33
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A-2
Annex A: Additional Information Regarding Proposal 4
As of September 2, 2016, there were 45 million unexercised stock options outstanding with a
weighted average exercise price of $4.49 and a weighted average remaining term of 7.43 years. In addition, as of this date, there were 47 million unvested full value share awards outstanding. As of September 2, 2016, 39,752,447 shares remained
available for issuance under the 2015 Plan, and the Company had a total of 3,979,270,096 shares outstanding.
Overhang.
We calculate overhang
by dividing (1) the sum of total shares available (39,752,447) and awards outstanding (92,328,078) by (2) the sum of total shares available, awards outstanding, and basic common shares outstanding. As of September 2, 2016, the
overhang from the 2015 Plan was 3.21%.
The principal features of the Amended 2015 Plan are summarized below. The full text of the Amended 2015 Plan
is attached as Annex B to this proxy statement, and the following summary is qualified in its entirety by reference to the Amended 2015 Plan itself.
Shares
Available Under the Amended 2015 Plan
Share Reserve.
Subject to adjustment as described below, the maximum number of shares which may be
issued or delivered under the Amended 2015 Plan after stockholder approval is the sum of (i) 137,247,553 shares (representing the incremental new shares of common stock being authorized under the Amended 2015 Plan); and (ii) the number of
shares available for grant under the Amended 2015 Plan as of the date of stockholder approval.
Share Recycling
. If any stock option, SAR,
restricted stock, RSU or other award (other than an award that can be paid only in cash) granted under the Amended 2015 Plan, or outstanding under the predecessor plans, expires, is forfeited or otherwise terminates without being fully exercised, or
is settled in cash, the shares subject to such award will again be available for grant under the Amended 2015 Plan, and will be credited to the number of shares available for grants under the Amended 2015 Plan on a 1-to-1 ratio. For example, if 100
RSUs are forfeited, 100 shares will become available under the Amended 2015 Plan.
The Amended 2015 Plan does not permit liberal share recycling.
Shares tendered or withheld for the payment of the exercise price or purchase price of an award, or for taxes upon exercise, vesting or earning of an award, will not again be available for issuance under the Amended 2015 Plan. In addition, when a
SAR is exercised and settled in shares, all of the shares underlying the SAR will be counted against the Amended 2015 Plan limit regardless of the number of shares used to settle the SAR.
Life-of-Plan Limits
. Subject to adjustment as described in the Amended 2015 Plan, the aggregate number of shares of common stock actually issued
or transferred by us upon the exercise of incentive stock options, or ISOs, intended to qualify under Section 422 of the IRC, will not exceed 150,000,000.
Individual Participant Limits.
Subject to adjustment as described in the Amended 2015 Plan, the following limits apply:
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No individual may be granted stock options or SARs (or other awards with rights which are substantially similar to stock options or SARs) for more than 5,000,000 shares of our common stock in any fiscal year;
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Annex A: Additional Information Regarding Proposal 4
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For awards intended to qualify as qualified performance-based compensation under Section 162(m) of the Code that are full-value awards (restricted stock, RSUs, performance shares, or other awards with
rights that are substantially similar to performance shares), no individual may be granted such awards of more than 10,000,000 shares of our common stock in the aggregate in any fiscal year; and
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For awards intended to qualify as qualified performance-based compensation under Section 162(m) of the Code, no individual may be granted performance units, other awards with rights which are
substantially similar to performance units, or cash-denominated awards in the aggregate, for more than $20,000,000 during any fiscal year.
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Non-Employee Director Limits.
The aggregate grant date fair value (computed as of the date of grant in accordance with applicable financial
accounting rules) of all awards granted to any non-employee director during any single fiscal year, taken together with any cash fees paid to such non-employee director during such fiscal year shall not exceed $750,000 ($1,500,000 for the Chairman
or Vice-Chairman).
Other Amended 2015 Plan Highlights
Administration
. The Amended 2015 Plan will be administered by the Compensation Committee.
Clawbacks
. All awards granted under the Amended 2015 Plan will be subject to deduction, forfeiture, recoupment or similar requirement in
accordance with any clawback policy that may be implemented by the Company from time to time, including such policies that may be implemented after the date an award is granted, pursuant to the listing standards of any national securities exchange
or association on which the Companys securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law, or other agreement or arrangement with a participant
No Repricing Without Shareholder Approval.
Subject to adjustment as described under Adjustment below, the Amended 2015 Plan does not
permit, without the approval of our stockholders, what is commonly known as the repricing of stock options or SARs, including:
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An amendment to reduce the exercise price of any outstanding stock option or base price of any outstanding SAR;
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The cancellation of an outstanding stock option or SAR and replacement with a stock option having a lower exercise price or with a SAR having a lower base price; and
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The cancellation of an underwater outstanding stock option or SAR and replacement with another award under the Amended 2015 Plan or cash.
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Further, no stock option or SAR will provide for the payment, at the time of exercise, of a cash bonus or grant of stock options, SARs, performance
shares, performance units, or grant or sale of restricted stock, RSUs or other awards under the Amended 2015 Plan, without further approval of our stockholders.
Change in Control
. The 2015 Plan includes a definition of change in control, which is set forth below.
Recoupment of Awards
. Any evidence of award may provide that if the board or the Compensation Committee determines a participant has engaged in
any detrimental activity (as
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Annex A: Additional Information Regarding Proposal 4
defined in the Amended 2015 Plan), either during service with us or a subsidiary or within a specified period after
termination of such service, then, promptly upon receiving notice of the boards finding, the participant will:
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forfeit that award to the extent then held by the participant;
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in exchange for payment by us or the subsidiary of any amount actually paid for such award by the participant, return to us or the subsidiary, all shares of common stock that the participant has not disposed of that had
been acquired pursuant to that award;
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with respect to any shares of common stock acquired pursuant to that award that were disposed of, pay to us or the subsidiary, in cash, the difference between:
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any amount actually paid by the participant, and
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the market value per share of our common stock on the date acquired; and
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pay to us or the subsidiary in cash the spread of the market value of our common stock over the applicable exercise price, with respect to any stock options or SARs exercised, where no shares of common stock were
retained by the participant upon such exercise.
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To the extent that such amounts are not paid to us or the subsidiary, we may seek
other remedies, including a set off of the amounts so payable to us against any amounts that may be owing from time to time by us or a subsidiary to the participant for any reason, including, without limitation, wages, deferred compensation, or
vacation pay. To the extent that any set off under these provisions of the Amended 2015 Plan causes the participant to become subject to taxes under Section 409A of the IRC, the responsibility for payment of such taxes lies solely with the
participant.
Other Features
.
The
Amended 2015 Plan also provides that no stock options or SARs will be granted with an exercise or base price less than the fair market value of our common stock on the date of grant.
The Amended 2015 Plan is designed to allow awards made under the Amended 2015 Plan to potentially qualify as qualified performance-based
compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code).
Substitute awards may be granted under
the Amended 2015 Plan for grants or awards held by employees of a company or entity who become employees of us or a subsidiary as a result of the acquisition, merger or consolidation of the employer company by or with us or a subsidiary. Except as
otherwise provided by applicable law and notwithstanding anything in the Amended 2015 Plan to the contrary, the terms, provisions and benefits of such substitute awards may vary from those set forth in or required or authorized by the Amended 2015
Plan to such extent as the Compensation Committee at the time of the grant deems appropriate to conform, in whole or part, to the terms, provisions and benefits of grants or awards in substitution for which they are granted. Such substitute awards
will not reduce the shares of common stock available for awards under the Amended 2015 Plan or count towards the individual participant award limits under the Amended 2015 Plan.
Administration and Term of the Amended 2015 Plan
The Amended
2015 Plan will be administered by the Compensation Committee. Our board or the Compensation Committee may delegate all or any part of its authority under the Amended 2015 Plan to any other committee of the board or a subcommittee consisting
exclusively of at least two members of the board, each of whom is a non-employee director within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (Exchange Act), an outside director within
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Annex A: Additional Information Regarding Proposal 4
the meaning of Section 162(m) of the Code and an independent director within the meaning of the NYSE
rules. Any interpretation, construction and determination by the Compensation Committee of any provision of the Amended 2015 Plan, or of any agreement, notification or document evidencing the grant of awards under the Amended 2015 Plan, will be
final and conclusive. To the maximum extent permitted by applicable law, the board or the Compensation Committee may delegate to one or more of its members or to one or more officers, or to one or more agents or advisors, such administrative duties
or powers as it deems advisable, and the board, the Compensation Committee, or any person to whom duties or powers have been delegated may employ one or more persons to render advice with respect to any responsibility the board, the Compensation
Committee or such person may have under the Amended 2015 Plan. In addition, the Compensation Committee may by resolution, subject to certain restrictions set forth in the Amended 2015 Plan, authorize one or more of our officers to (1) designate
participants to be recipients of awards under the Amended 2015 Plan, and (2) determine the size of such awards. However, the Compensation Committee may not delegate such responsibilities to officers for awards granted to certain individuals who
are subject to the reporting requirements of Section 16 of the Exchange Act or subject to Section 162(m) of the Code.
Our full board will
make participation and compensation determinations as to outside directors. The Compensation Committee will have the authority to, among other things, interpret the Amended 2015 Plan, to establish and revise rules and regulations relating to the
Amended 2015 Plan, and to make any other determinations that it believes necessary or advisable for the administration of the Amended 2015 Plan.
No
new awards may be granted under the Amended 2015 Plan after ten years following the effective date of the Amended 2015 Plan, but all grants made on or prior to such date will continue in effect thereafter subject to the terms of such awards and the
Amended 2015 Plan. The Amended 2015 Plan may be terminated earlier by our board.
Eligibility
From time to time, the Compensation Committee, or as to outside directors the full board, will determine who will be granted awards, the number of shares
or performance units subject to such grants, and the terms of awards. Under the Amended 2015 Plan, awards may be granted to our and our subsidiaries employees, our outside directors, and other individuals providing services to us or our
subsidiaries (provided that such persons satisfy the Form S-8 definition of employee), including but not limited to consultants, advisors, and independent contractors. As of September 2, 2016, approximately 31,161 people would have
been eligible to receive awards under the Amended 2015 Plan, which includes active employees and those on both paid and unpaid leave.
Stock Options
A stock option is a right to purchase shares of common stock upon the exercise of the stock option. Stock options granted under the Amended 2015 Plan may
consist of either an incentive stock option (ISO), a non-qualified stock option that does not comply with the requirements for ISOs, or a combination of both. However, ISOs may only be granted to employees of us or certain subsidiaries. Each grant
of stock options will be evidenced by an evidence of award which specifies the applicable terms and conditions of such award. The Compensation Committee determines the terms of each stock option grant at the time of the grant. The exercise price of
any stock option granted may not be less than the market value of our common stock (
i.e
., the closing price on the NYSE) on the date the option is granted. However, in the case of ISOs granted to certain 10% stockholders, the exercise price
may not be less than 110% of the market value of our common stock on the date of grant. The
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Annex A: Additional Information Regarding Proposal 4
exercise price is payable in cash or by check or wire transfer of immediately available funds, by delivery of shares
of our common stock (or other consideration authorized under the Amended 2015 Plan) having a value at the time of exercise equal to the exercise price, by a combination of such methods, or by other methods approved by the Compensation Committee. No
stock option will authorize the payment of dividend equivalents or be exercisable for a period of more than ten years from the date of grant (or five years, in the case of ISOs granted to certain 10% stockholders).
Each grant of stock options will specify the period or periods of continuous service by the optionee that is necessary before the stock options become
exercisable. Any grant of stock options may specify management objectives that must be achieved as a condition to the exercise of the stock options. To the extent permitted by law, any grant may provide for deferred payment of the exercise price
from the proceeds of a sale through a bank or broker of some or all of the shares to which the exercise relates. In addition, any grant of stock options may provide for the earlier exercise of such stock options or other modifications in the event
of termination without cause (as defined in the Amended 2015 Plan), resignation for good reason (as defined in the Amended 2015 Plan), normal retirement (as defined in the Amended 2015 Plan), termination due to death or disability (as defined in the
Amended 2015 Plan), a change in control (as defined in the Amended 2015 Plan), or the grant of certain substitute awards.
Except as provided in an
evidence of award, in the event of an optionees termination of employment or service, any stock options that have not vested as of the optionees date of termination will be cancelled and immediately forfeited, without further action on
the part of us or the Compensation Committee, and the optionee will have no further rights with respect to such stock options.
Stock Appreciation Rights
SARs may be granted as tandem SARs or freestanding SARs. A tandem SAR is a SAR that is granted in tandem with a stock option or similar right. A
freestanding SAR is a SAR that is not granted in tandem with a stock option or similar right. A SAR is a right, exercisable by the surrender of a related stock option (if a tandem SAR) or by itself (if a freestanding SAR), to receive from us an
amount equal to 100%, or such lesser percentage as the Compensation Committee may determine, of the spread between the base price (or option exercise price if a tandem SAR) and the value of our common stock on the date of exercise.
The Compensation Committee determines the terms of each SAR at the time of the grant.
Each grant of a SAR will be evidenced by evidence of award, which specifies the applicable terms and conditions of such award. Any grant of SARs may
specify waiting periods before exercise and permissible exercise dates or periods. Any grant of SARs may specify management objectives that must be achieved as a condition of the exercise of such SARs. A SAR may be paid in cash, shares of our common
stock, or any combination thereof. Any grant of SARs may provide for the earlier exercise of such SARs or other modifications in the event of termination without cause, resignation for good reason, normal retirement, termination due to death or
disability of the participant, a change in control, or the grant of certain substitute awards. Except as provided in an evidence of award, in the event of a participants termination of employment or service, any of the participants SARs
that have not vested as of the participants date of termination will be cancelled and immediately forfeited, without further action on the part of us or the Compensation Committee, and the participant will have no further rights in respect of
such SARs. Except with respect to awards issued in substitution for, in conversion of, or in connection with an assumption of appreciation rights
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Annex A: Additional Information Regarding Proposal 4
held by awardees of an entity engaging in a corporate acquisition or merger with us or any of our subsidiaries, the
base price of a SAR may not be less than the fair market value of a share of our common stock on the date of grant.
Tandem SARs may be exercised
only at a time when the related stock options are also exercisable and the spread (generally, the excess of the fair market value of a share of common stock over the exercise price) is positive, by surrender of the related stock option for
cancellation. No freestanding SAR may be granted at less than the market value of our common stock on the date that the SAR is granted nor have a term of longer than ten years. Distributions to a holder of a SAR may be made in shares of our common
stock, in cash or in a combination of both. No SAR will authorize the payment of dividend equivalents. Generally, no freestanding SAR may be exercised more than 10 years from the grant date.
Restricted Stock
Restricted stock awarded under the Amended
2015 Plan will consist of an award of shares of our common stock in consideration for the performance of services, which shares are subject to a substantial risk of forfeiture for a period of time determined by the Compensation Committee or until
certain management objectives specified by the Compensation Committee are achieved. Any grant of restricted stock may specify management objectives that, if achieved, will result in termination or early termination of the restrictions applicable to
the restricted stock. Restricted stock may not be disposed of by the participant until certain restrictions established by the Compensation Committee lapse. Any grant of restricted stock may require that any or all dividends or distributions paid on
restricted stock that remains subject to a substantial risk of forfeiture be automatically deferred and reinvested in additional shares of restricted stock, which may be subject to the same restrictions as the underlying restricted stock, or be paid
in cash on a deferred or contingent basis. Each grant of restricted stock will be evidenced by an evidence of award which specifies the applicable terms and conditions of such award.
Restricted stock may be issued for such consideration as the Compensation Committee determines, including no consideration other than the rendering of
services. The holder of restricted stock has all of the rights of a stockholder, including the right to vote shares and the right to receive cash dividends.
Any grant of restricted stock may provide for the earlier lapse or other modification in the event of termination without cause, resignation for good
reason, normal retirement, termination due to death or disability, change in control, or the grant of certain substitute awards.
Restricted Stock Units
An RSU represents the right for the participant to receive one share of our common stock or cash from us at a particular date in the future in
consideration of the performance of services, but subject to the fulfillment of such conditions (which may include the achievement of management objectives) during the restriction period as the Compensation Committee or an authorized officer may
specify. Each grant or sale of RSUs may be made without additional consideration or in consideration of a payment by the participant that is less than the fair market value of our common stock on the date of grant. Unlike the holder of restricted
stock, the holder of an RSU will have none of the rights of a holder of any shares of our common stock underlying the RSU until the shares are delivered, but the Compensation Committee may authorize the payment of dividend equivalents on RSUs on
either a current, deferred or contingent basis, either in cash or in additional shares of common stock.
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Annex A: Additional Information Regarding Proposal 4
Each grant of an RSU award will be evidenced by an evidence of award, which specifies the applicable
terms and conditions of such award, including any vesting and forfeiture provisions. If the restriction period applicable to an RSU award lapses only by the passage of time, each such grant or sale will be subject to a restriction period (which may
include pro-rata, graded or cliff vesting over such period), as determined by the Compensation Committee or an authorized officer on the date of grant. Each such grant or sale of RSUs may provide for the earlier lapse or other modification of such
restriction period in the event of termination without cause, resignation for good reason, normal retirement, termination due to death or disability, a change in control, or the grant of certain substitute awards. Each grant or sale of RSUs will
specify the time and manner of payment of such RSUs, and may specify that the amount payable with respect thereto may be paid by us in cash, in shares of our common stock or in any combination of the two. Each grant or sale of RSUs will provide that
during the period for which such restriction period is to continue, the transferability of the RSUs will be prohibited in the manner and to the extent prescribed by the Compensation Committee at the date of grant (which restrictions may include,
without limitation, rights of repurchase or first refusal in us or provisions subjecting the RSUs to a continuing substantial risk of forfeiture in the hands of any transferee).
Except as provided in an evidence of award, in the event of a participants termination of employment or service, any of the participants
RSUs that remain subject to the restriction period on the date of termination will be cancelled and immediately forfeited without further action on the part of us or the Compensation Committee, and the participant will have no further rights in
respect of such RSUs.
Performance Shares and Performance Units
A performance share is the equivalent of one share of our common stock, and a performance unit is the equivalent of $1.00 (or such other value as is
determined by the Compensation Committee). Performance shares and performance units may be paid in cash, shares of our common stock, restricted stock, RSUs, or any combination thereof. Performance shares and performance units will be subject to
terms and conditions that the Compensation Committee deems advisable or appropriate, consistent with the provisions of the Amended 2015 Plan. The management objectives and performance levels to be achieved for each performance period and the amount
of the award to be distributed will be determined by the Compensation Committee.
Each grant will specify the number or amount of performance shares
or performance units, which number or amount may be subject to adjustment to reflect changes in compensation or other factors. However, no such adjustment will be made in the case of an award intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code (other than in connection with the death or disability of the participant or a change in control of us) where it would result in the loss of the otherwise available exemption under
Section 162(m) of the Code. These awards, when granted under the Amended 2015 Plan, become payable to participants upon of the achievement of specified management objectives. Each grant may specify with respect to the management objectives a
minimum acceptable level of achievement and may set forth a formula for determining the number of performance shares or performance units that will be earned if performance is at or above the minimum or threshold level, or is at or above the target
level but falls short of maximum achievement. Each grant will specify the time and manner of payment of cash incentive awards, performance shares or performance units that have been earned. Any grant of performance shares may provide for the payment
of dividend equivalents on either a current, deferred or contingent basis, in cash or in additional shares of common stock. Each grant of performance shares or performance units will be evidenced by an evidence of award which specifies the
applicable terms and conditions of such award.
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Annex A: Additional Information Regarding Proposal 4
Any grant of performance shares or performance units may provide for the earlier lapse or other
modification of restrictions in the event of termination without cause, resignation for good reason, normal retirement, termination due to death or disability, a change in control, or the grant of certain substitute awards. Except as provided in an
evidence of award, in the event of a participants termination of employment or service, any of the participants performance shares and performance units that remain subject to a performance period on the participants termination
date will be cancelled and immediately forfeited, without further action on the part of us or the Compensation Committee, and the participant will have no further rights in respect of such performance share or performance units.
Awards to Non-Employee Directors; Payment of Non-Employee Directors Fees in Common Stock or other Awards
The board may, upon such conditions as it determines, authorize the granting to non-employee directors of stock options, SARs or other awards
contemplated under the Amended 2015 Plan, and may also authorize the grant or sale of shares of our common stock, restricted stock or RSUs to non- employee directors. Such awards will be subject to substantially the same terms as apply under the
Amended 2015 Plan to comparable awards granted to employees and other service providers. If a non- employee director subsequently becomes an employee of us or a subsidiary while remaining a member of the board, any award held under the Amended 2015
Plan by such individual at the time of such commencement of employment will not be affected thereby.
The Amended 2015 Plan provides that, in lieu
of cash payments, outside directors may elect to receive all or part of their annual retainer and their meeting and committee meeting fees in shares of our common stock, restricted stock, RSUs or other awards under the Amended 2015 Plan, subject to
Section 409A of the Code. The price at which outside directors may acquire shares of stock is the market value of our common stock on the last trading day of the quarter in which the fees are earned.
Other Awards
The Amended 2015 Plan also permits grants of
awards valued in whole or in part by reference to, or otherwise based on or related to, (1) shares of our common stock or factors that may influence the value of such shares, including convertible or exchangeable debt securities, other rights
convertible or exchangeable into shares of our common stock, purchase rights for shares of common stock, awards with value and payment contingent upon performance of our Company or specified subsidiaries, affiliates or other business units or any
other factors designated by the Compensation Committee, and awards valued by reference to the book value of shares of our common stock or the value of securities of, or the performance of specified subsidiaries or affiliates or other business units
of, ours, (2) cash, or (3) any combination of the foregoing. The Compensation Committee or an authorized officer will determine the terms and conditions of such awards, which may include the achievement of management objectives. Shares of
common stock delivered pursuant to an award in the nature of a purchase right will be purchased for such consideration, paid for at such time, by such methods, and in such forms, including cash, shares of common stock, other awards, notes or other
property, as the Compensation Committee will determine.
Each grant may specify the period or periods of continuous service, if any, by the
participant with us or any subsidiary that are necessary before such awards or installments thereof will become fully transferable, as determined by the Compensation Committee or an authorized officer on the date of grant.
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Annex A: Additional Information Regarding Proposal 4
Each grant may provide for the earlier termination of the period or periods of continuous service or
other modifications in the event of termination without cause, resignation for good reason, normal retirement, termination due to death or disability of the participant, a change in control, or the grant of certain substitute awards. The
Compensation Committee may also grant shares of our common stock as a bonus, or may grant other awards in lieu of obligations of us or a subsidiary to pay cash or deliver other property under the Amended 2015 Plan or under other plans or
compensatory arrangements, subject to terms determined by the Compensation Committee. Each grant or sale of such other awards may be made without additional consideration or in consideration of a payment by the participant that is less than the
market value of our common stock (except with respect to awards that are substantially similar to option rights).
Change in Control
Unless otherwise provided in an award agreement or by the Compensation Committee, if there is a change in control of us (as defined in the Amended 2015
Plan) and the resulting entity assumes, converts or replaces the outstanding awards under the Amended 2015 Plan, the awards will become fully vested only upon the participants involuntary termination of employment without cause, or resignation
with good reason for certain executives, in either case, within 18 months following the change in control (or prior to the change in control in certain circumstances). On the other hand, if the resulting entity does not assume, convert or replace
awards outstanding under the Amended 2015 Plan, the awards will become fully vested and no longer be subject to any restrictions, and any management objectives will be deemed to have been satisfied at target levels of performance.
In the event of a change in control, the board in its discretion may provide for the cancellation of each outstanding and unexercised stock option or
SAR in exchange for a cash payment to be made within 60 days of the change in control in an amount equal to the amount by which the highest price per share of common stock paid for a share of common stock in the change in control exceeds the
exercise price or base price, as applicable, multiplied by the number of shares of common stock granted under the stock option or SAR.
If the
acceleration of vesting of outstanding awards, together with all other payments or benefits contingent on the change in control within the meaning of section 280G of the Code, results in any portion of the payment or benefits not being deductible by
us as a result of the application of section 280G of the Code, the benefits will be reduced until the entire amount of the benefits is deductible, unless a participants employment agreement or other arrangement with us provides otherwise.
The Amended 2015 Plan includes a definition of change in control. In general, except as may be otherwise prescribed by the Compensation
Committee in any evidence of award, a change of control will be deemed to have occurred if:
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any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a Person), except Softbank Corp. or any other entity that controls, is
controlled by or is under common control with us or Softbank Corp. within the meaning of Rule 405 of Regulation C under the Securities Act, becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of thirty percent (30%) or more of the combined voting power of our securities entitled to vote generally in the election of our directors, or Voting Stock (excluding certain purchases from us or by us, our subsidiaries or our
benefit plans, certain purchases that do not involve a substantial change in ownership or leadership, and certain inadvertent purchases); or
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Annex A: Additional Information Regarding Proposal 4
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we consummate a reorganization, merger or consolidation, or one of certain other transactions, in each case, resulting in a substantial change in our ownership or leadership, as further described in the Amended 2015
Plan; or
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during any consecutive 18-month period, more than 50% of the board ceases to be comprised of incumbent directors (as defined in the Amended 2015 Plan);
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we consummate a transaction that implements in whole or in part a resolution of our stockholders authorizing a sale of all or substantially all of our assets or a complete liquidation or dissolution of us, other than
pursuant to a transaction that does not result in a substantial change in ownership or leadership, as further described in the Amended 2015 Plan.
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Adjustments
In the event of any stock dividend, stock split,
combination of shares, recapitalization or other change in our capital structure, or any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of
rights or warrants to purchase securities, or any other corporate transaction or event having a similar effect, the board will make or provide for such adjustments:
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In the number and kind of shares for which awards may be granted, both in the aggregate and the individual limitations each fiscal year;
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In the number and kind of shares subject to, and in the other terms of, outstanding awards; and
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In the exercise price of a stock option or base price of a SAR;
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as is equitably required to prevent dilution or
enlargement of the rights of participants that otherwise would result from such transaction or event, subject to Section 409A of the Code. Such adjustments will be made automatically, without the necessity of board action, on the customary
arithmetical basis in the case of any stock split, including a stock split effected by means of a stock dividend, and in the case of any other dividend paid in shares of our common stock. However, any adjustment shall be in compliance with or
maintain exemption from Section 409A of the Code. Moreover, in the event of any such transaction or event specified above, the board, in its discretion, and subject to ensuring compliance with or exemption from Section 409A of the Code may
provide in substitution for any or all outstanding awards under the Amended 2015 Plan such alternative consideration (including cash), if any, as it may determine, in good faith, to be equitable in the circumstances and may require the surrender of
all awards so replaced. In addition, for each stock option or SAR with an exercise price or base price greater than the consideration offered in connection with such transaction or event, the Compensation Committee may in its discretion elect to
cancel such stock option or SAR without any payment therefor. The board also will provide for such adjustments in the share limits under the Amended 2015 Plan as is appropriate to reflect any transaction or event described above. However, any such
adjustment to the number of ISOs that may be issued or transferred under the Amended 2015 Plan will be made only if and to the extent that such adjustment would not cause any stock option intended to qualify as an ISO to fail so to qualify. Except
as otherwise provided in an Evidence of Award or by the Compensation Committee, if any Person acquires beneficial ownership of the entirety (i.e., 100%) of the Voting Stock of the Corporation, such acquisition shall be treated as a transaction that
is governed by this Section 13 with respect to Awards granted after the Restatement Effective Date.
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Annex A: Additional Information Regarding Proposal 4
Transferability
Except as otherwise determined by the board or the Compensation Committee pursuant to the terms of the Amended 2015 Plan, awards made under the Amended
2015 Plan are generally not transferable by participants except by will or the laws of descent and distribution, or otherwise in a manner that protects our interests as the board or the Compensation Committee may determine. Further, the Compensation
Committee or an authorized officer may specify at the date of grant that part or all of the shares of common stock that are subject to outstanding awards will be subject to further restrictions on transfer.
Our board or the Compensation Committee may permit transfers of awards to certain family members, as further described in the Amended 2015 Plan.
Withholding
If we are required to withhold federal, state,
local or foreign taxes in connection with any payment made or benefit realized by a participant under the Amended 2015 Plan, and the amounts available to us for such withholding are insufficient, it will be a condition to the receipt of such payment
or benefit that the participant make arrangements satisfactory to us for payment of the balance of such taxes required to be withheld. Such arrangements, in the discretion of the Compensation Committee, may include relinquishment of a portion of
such benefit. If a participants benefit is to be received in the form of shares of common stock, and such participant fails to make arrangements for the payment of tax, we will withhold such shares of common stock having a value equal to the
amount required to be withheld. Notwithstanding the foregoing, when a participant is required to pay us an amount required to be withheld, the participant may satisfy such obligation by electing to have withheld, from the shares required to be
delivered to the participant, shares of common stock having a value equal to the amount required to be withheld (except in the case of restricted stock where an election under Section 83(b) of the Code has been made) or by delivering to us
other shares of common stock held by such participant. In no event will the market value per share of the shares of common stock to be withheld to satisfy applicable withholding taxes in connection with the benefit exceed the minimum amount of taxes
required to be withheld or such other amount that will not result in a negative accounting impact. Participants must also make such arrangements as we may require for the payment of any withholding tax obligation that may arise in connection with
the disposition of shares of common stock acquired upon the exercise of option rights.
Effective Date
The Amended 2015 Plan will be effective as of November 1, 2016, subject to approval by stockholders.
New Plan Benefits
It is not possible to determine the
specific amounts and types of awards that may be awarded in the future under the Amended 2015 Plan because the grant and actual settlement of awards under the Amended 2015 Plan are subject to the discretion of the plan administrator. However,
current benefits granted to our non-employee directors, named executive officers, and all other employees would not have been increased if they had been made under the proposed Amended 2015 Plan. Grants of stock options, RSUs and performance units
in fiscal year 2015 to our named executive officers are shown in the Grants of Plan-Based Awards table in this proxy statement.
As of September 2,
2016, the closing price of our common stock traded on the NYSE was $6.42 per share.
A-13
Annex A: Additional Information Regarding Proposal 4
Tax Aspects of the Amended 2015 Plan
Under present law, the following are the federal income tax consequences generally arising with respect to awards to be granted under the Amended 2015
Plan.
Tax Consequences to Participants
Restricted
Stock
. The recipient of restricted stock generally will be subject to tax at ordinary income rates on the fair market value of the restricted stock (reduced by any amount paid by the recipient for such restricted stock) at such time as the
shares are no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code (Restrictions). However, a recipient who so elects under Section 83(b) of the Code within 30 days of the date of
transfer of the shares will have taxable ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the Restrictions) over the purchase price, if any, of such
restricted shares. If a Section 83(b) election has not been made, any dividends received with respect to restricted shares that are subject to the Restrictions generally will be treated as compensation that is taxable as ordinary income to the
recipient.
Performance Shares and Performance Units
. No income generally will be recognized upon the grant of performance shares or
performance units. Upon payment in respect of the earn-out of performance shares or performance units, the recipient generally will be required to include as taxable ordinary income in the year of receipt an amount equal to the amount of cash
received and the fair market value of any unrestricted shares of common stock received.
Nonqualified Stock Options
. In general:
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no income will be recognized by an optionee at the time a non-qualified stock option is granted;
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at the time of exercise of a non-qualified stock option, ordinary income will be recognized by the optionee in an amount equal to the difference between the option price paid for the shares and the fair market value of
the shares, if unrestricted, on the date of exercise; and
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at the time of sale of shares acquired pursuant to the exercise of a non-qualified stock option, appreciation (or depreciation) in value of the shares after the date of exercise will be treated as either short-term or
long-term capital gain (or loss) depending on how long the shares have been held.
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ISOs
. No income generally will be recognized
by an optionee upon the grant or exercise of an ISO. The exercise of an ISO, however, may result in alternative minimum tax liability. If shares of common stock are issued to the optionee pursuant to the exercise of an ISO, and if no disqualifying
disposition of such shares is made by such optionee within two years after the date of grant or within one year after the transfer of such shares to the optionee, then upon sale of such shares, any amount realized in excess of the option price will
be taxed to the optionee as a long-term capital gain and any loss sustained will be a long-term capital loss.
If shares of common stock acquired
upon the exercise of an ISO are disposed of prior to the expiration of either holding period described above, the optionee generally will recognize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair
market value of such shares at the time of exercise (or, if less, the amount realized on the disposition of such shares if a sale or exchange) over the exercise price paid for such shares. Any further gain (or loss) realized by the participant
generally will be taxed as short-term or long-term capital gain (or loss) depending on the holding period.
A-14
Annex A: Additional Information Regarding Proposal 4
SARs
. No income will be recognized by a participant in connection with the grant of a tandem
SAR or a freestanding SAR. When the SAR is exercised, the participant normally will be required to include as taxable ordinary income in the year of exercise an amount equal to the amount of cash received and the fair market value of any
unrestricted shares of common stock received on the exercise.
Restricted Stock Units
. No income generally will be recognized upon the award
of RSUs. The recipient of an RSU award generally will be subject to tax at ordinary income rates on the fair market value of unrestricted shares of common stock on the date that such shares are transferred to the participant under the award (reduced
by any amount paid by the participant for such RSUs), and the capital gains/loss holding period for such shares will also commence on such date.
Tax Consequences
to Us
To the extent that a participant recognizes ordinary income in the circumstances described above, we are entitled to a corresponding
deduction provided that, among other things, the income:
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Meets the test of reasonableness, is an ordinary and necessary business expense and is not an excess parachute payment within the meaning of Section 280G of the Code; and
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Is not disallowed by the $1 million limitation on certain executive compensation under Section 162(m) of the Code.
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Section 162(m) of the Code provides an exception to this limitation for qualified performance-based compensation, as discussed above.
Management Objectives
Under the Amended 2015 Plan, management
objectives are defined as the measurable performance objective or objectives established pursuant to the Amended 2015 Plan for participants who have received grants of performance shares, performance units or, when so determined by the Compensation
Committee or an authorized officer, stock options, SARs, restricted stock, RSUs, dividend equivalents, or other awards. Management objectives may be described in terms of company-wide objectives or objectives that are related to the performance of
one or more joint ventures, subsidiaries, business units, divisions, departments, business segments, regions or functions and/or that are related to the performance of the individual participant. The management objectives may be made relative to the
performance of other companies or subsidiaries, divisions, departments, regions, functions, or other organizational units within such other companies, or an index covering multiple companies.
The Compensation Committee may grant awards to covered employees (within the meaning of Section 162(m) of the Code) subject to management
objectives that are either qualified performance-based awards or are not qualified performance-based awards. The management objectives applicable to any award intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code will be based on one or more, or a combination of the following criteria:
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revenue growth or product revenue growth;
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operating income (before or after taxes, including operating income before depreciation and amortization);
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A-15
Annex A: Additional Information Regarding Proposal 4
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income (before or after taxes and before or after allocation of corporate overhead and bonus);
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net income (before or after taxes);
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total stockholder return;
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return on assets or net assets;
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appreciation in and/or maintenance of share price;
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earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization);
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economic value-added models or equivalent metrics;
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cash flow or cash flow per share (before or after dividends);
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return on capital (including return on total capital or return on invested capital);
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cash flow return on investment;
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improvement in or attainment of expense levels or working capital levels;
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operating, gross, or cash margins;
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regulatory achievements;
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implementation, completion, or attainment of measurable objectives with respect to research, development, products or projects and recruiting and maintaining personnel; or
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a published or a special index deemed applicable by the Compensation Committee or any of the above criteria as compared to the performance of any such index, including, but not limited to, the Dow Jones U.S. Telecom
Index.
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Any management objectives that are financial metrics may be determined in accordance with United States Generally Accepted
Accounting Principles (GAAP) or may be adjusted when established to include or exclude any items otherwise includable or excludable under GAAP. In the case of qualified performance-based awards, each management objective will be objectively
determined to the extent required under Section 162(m) of the Code.
In connection with the establishment of management objectives, or with
respect to the measurement of achievement with respect to a management objective, the Compensation Committee may exclude the impact on performance of extraordinary, unusual, or infrequently occurring items, including charges for restructurings;
other non-operating items; acquisitions, divestitures, discontinued operations; and other unusual or non-recurring items and the cumulative effects of changes in tax law or accounting principles, as such are defined by generally accepted accounting
principles or the SEC and as identified in our audited financial statements, notes to such financial statements or managements discussion and analysis in our annual report or other filings
A-16
Annex A: Additional Information Regarding Proposal 4
with the SEC. With respect to any grant under the Amended 2015 Plan, if the Compensation Committee determines that a
change in the business, operations, corporate structure or capital structure of us, or the manner in which we conduct our business, or other events or circumstances render the management objectives unsuitable, the Compensation Committee may in its
discretion modify such management objectives or the related minimum acceptable level or levels of achievement, in whole or in part, as the Compensation Committee deems appropriate and equitable, except in the case of an award intended to qualify as
qualified performance-based compensation under Section 162(m) of the Code when such action would result in the loss of the otherwise available exemption of such award under Section 162(m) of the Code. In such case, the
Compensation Committee will not make any modification of the management objectives or the minimum acceptable level or levels of achievement with respect to such award. In addition, unless otherwise specified in the evidence of award, the
Compensation Committee may, in its discretion, increase, reduce or eliminate the amount payable to any participant with respect to an award, based on such factors as the Compensation Committee may deem relevant. For purpose of clarity, (1) the
amount payable pursuant to performance measures based on qualification of an award as qualified performance-based compensation under Section 162(m) of the Code for any award intended to so qualify may not be increased when such
action would result in the loss of the otherwise available exemption of such award under Section 162(m) of the Code as described above, and (2) the Compensation Committee may exercise the discretion in the foregoing sentence in a
non-uniform manner among participants.
Amendment and Termination
Our board, subject to Section 409A of the Code, may amend or terminate the Amended 2015 Plan. However, if any amendment (1) would materially
increase the benefits accruing to participants under the Amended 2015 Plan, (2) would materially increase the number of shares which may be issued under the Amended 2015 Plan, (3) would materially modify the requirements for participation
in the Amended 2015 Plan, or (4) must otherwise be approved by our stockholders in order to comply with applicable law or the rules of the NYSE, then such amendment will be subject to stockholder approval and will not be effective unless and
until such approval has been obtained. Termination of the Amended 2015 Plan will not affect the rights of participants or their successors under any awards outstanding under the Amended 2015 Plan and not exercised in full on the date of termination.
If permitted by Section 409A of the Code, in case of termination of service by reason of death, disability or normal retirement, or in the
case of unforeseeable emergency or other special circumstances, of a participant who holds a stock option or SAR not immediately exercisable in full , or any shares of restricted stock as to which the substantial risk of forfeiture or the
prohibition or restriction on transfer has not lapsed, or any RSUs as to which the restriction period has not been completed, or any performance shares or performance units which have not been fully earned, or any other awards made pursuant to the
Amended 2015 Plan subject to any vesting schedule or transfer restriction, or who holds shares of our common stock subject to any transfer restriction imposed pursuant to the Amended 2015 Plan, the Compensation Committee may, in its sole discretion,
accelerate the time at which such stock option, SAR or other award may be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such restriction period will end or
the time at which such performance shares or performance units will be deemed to have been fully earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such award, except in the
case of an award intended to qualify as qualified performance-based compensation under Section 162(m) of the Code where such action would result in the loss of the otherwise available exemption of the award under Section 162(m)
of the Code.
A-17
Annex A: Additional Information Regarding Proposal 4
Subject to the prohibition on option and SAR repricing without stockholder approval described above,
the Compensation Committee may amend the terms of any award granted under the Amended 2015 Plan prospectively or retroactively, except in the case of an award intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code where such action would result in the loss of the otherwise available exemption of such award under Section 162(m) of the Code. In such case, the Compensation Committee will not make any modification of the
management objectives or the level or levels of achievement with respect to such award. Subject to adjustments as described in the Amended 2015 Plan, no amendment will materially impair the rights of any participant without his or her consent.
Deferral of Shares
Except with respect to stock options and
SARs, the Compensation Committee may permit participants to elect to defer the issuance of shares of our common stock or the settlement of awards in cash under the Amended 2015 Plan pursuant to such rules, procedures or programs as it may establish
for purposes of the Amended 2015 Plan. The Compensation Committee also may provide that deferred issuances and settlements include the payment or crediting of dividend equivalents or interest on the deferral amounts. All elections and deferrals
permitted under this provision shall comply with Section 409A of the Code, including setting forth the time and manner of the election (including a compliant time and form of payment), the date on which the election is irrevocable, and whether
the election can be changed until the date it is irrevocable.
Registration with the SEC
We intend to file a Registration Statement on Form S-8 relating to the additional shares of our common stock to be reserved for the issuance of awards
under the Amended 2015 Plan with the Securities and Exchange Commission (SEC) pursuant to the Securities Act of 1933, as amended (Securities Act), as soon as practicable after approval of the Amended 2015 Plan by our stockholders.
Existing Equity Compensation Plan Information
These plans
consist of the 2007 Omnibus Incentive Plan, or the 2007 Plan, and the Employee Stock Purchase Plan, or ESPP. The 2007 Plan and the ESPP were approved by our stockholders.
A-18
Annex A: Additional Information Regarding Proposal 4
The following table provides information about the shares of our common stock that may be issued upon
exercise of awards as of March 31, 2016:
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Number of
Securities
to be Issued
Upon Exercise
of
Outstanding
Options,
Warrants, and
Rights
(a)
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Weighted
Average of
Exercise
Price
of
Outstanding
Options,
Warrants,
and
Rights
(b)
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Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding
Securities
Reflected in Column (a)
(c)
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Equity compensation plans approved by holders of
common stock
(1)(2)
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77,942,352
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$4.69
(3)
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132,820,958
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Equity compensation plans
not
approved by holders of common stock
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0
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N/A
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0
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Total
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77,942,352
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$4.69
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132,820,958
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(1)
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Includes 1,095,800 shares covered by options and 22,392,399 restricted stock units under the 2015 Plan, 39,553,456 shares covered by options and 14,120,829 restricted stock units under the 2007 Plan, and 93,290 shares
covered by options and 25,835 restricted stock units outstanding under the 1997 Program. Also includes purchase rights to acquire 660,743 shares of common stock accrued at March 31, 2016 under the ESPP. Under the ESPP, each eligible employee
may purchase common stock at quarterly intervals at a purchase price per share equal to 95% of the market value on the last business day of the offering period.
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(2)
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Included in the total of 77,942,352 shares are 14,120,829 restricted stock units under the 2007 Plan, which will be counted against the 2007 Plan maximum in a 2.5 to 1 ratio.
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(3)
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The weighted average exercise price does not take into account the shares of common stock issuable upon vesting of restricted stock units issued under the Companys 1997 Long-Term Stock Incentive Program, the 2007
Plan or the 2015 Plan. These restricted stock units have no exercise price. The weighted average purchase price also does not take into account the 660,743 shares of common stock issuable as a result of the purchase rights accrued under the ESPP;
the purchase price of these shares was $3.25 for each share.
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Adoption of this proposal requires the affirmative vote of the majority
of the votes cast in person or by proxy by holders of our common stock entitled to vote at the annual meeting.
A-19
ANNEX B
SPRINT CORPORATION
AMENDED AND RESTATED
2015 OMNIBUS INCENTIVE PLAN
(AMENDED AND RESTATED EFFECTIVE NOVEMBER 1, 2016)
B-1
SPRINT CORPORATION
AMENDED AND RESTATED 2015 OMNIBUS INCENTIVE PLAN
1.
Purpose
. The purpose of this Plan is to attract and retain directors, officers, other employees and consultants of the Corporation and its
Subsidiaries and to motivate and provide to such persons incentives and rewards for superior performance.
2.
Definitions
. As used in this
Plan:
(a) Appreciation Right means a right granted pursuant to Section 5 of this Plan and will include both Free-Standing
Appreciation Rights and Tandem Appreciation Rights.
(b) Authorized Officer has the meaning specified in Section 11(d) of the Plan.
(c) Award means a grant of Option Rights, Appreciation Rights, Performance Shares or Performance Units, or a grant or sale of
Restricted Stock, Restricted Stock Units or other awards contemplated by Section 10 of the Plan.
(d) Base Price means the price to
be used as the basis for determining the Spread upon the exercise of a Free-Standing Appreciation Right or a Tandem Appreciation Right.
(e)
Board means the Board of Directors of the Corporation and, to the extent of any delegation by the Board to a committee (or subcommittee thereof) pursuant to Section 11 of this Plan, such committee (or subcommittee).
(f) Business Transaction has the meaning set forth in Section 2(h)(ii).
(g) Cause as a reason for a Participants termination of employment shall have the meaning assigned such term in (x) the
employment agreement, if any, between the Participant and an Employer, or (y) during the CIC Severance Protection Period (as defined in the CIC Severance Plan), the CIC Severance Plan, if the Participant is a participant in such plan. If the
Participant is not a party to an employment agreement with an Employer in which such term is defined, or if during the CIC Severance Protection Period, the Participant is not a participant in the CIC Severance Plan, then unless otherwise defined in
the applicable Evidence of Award, Cause shall mean:
(i) the intentional engagement in any acts or omissions constituting
dishonesty, breach of a fiduciary obligation, wrongdoing or misfeasance, in each case, in connection with a Participants duties or otherwise during the course of a Participants employment with an Employer;
(ii) the commission of a felony or the indictment for any felony, including, but not limited to, any felony involving fraud,
embezzlement, moral turpitude or theft;
(iii) the intentional and wrongful damaging of property, contractual interests or business
relationships of an Employer;
(iv) the intentional and wrongful disclosure of secret processes or confidential information of an
Employer in violation of an agreement with or a policy of an Employer;
(v) the continued failure to substantially perform the
Participants duties for an Employer;
(vi) current alcohol or prescription drug abuse affecting work performance;
(vii) current illegal use of drugs; or
(viii) any intentional conduct contrary to an Employers announced policies or practices (including, but not limited to, those
contained in the Corporations Code of Conduct).
B-2
(h) For purposes of this Plan, except as may be otherwise prescribed by the Compensation Committee in an
Evidence of Award, a Change in Control of the Corporation shall be deemed to have occurred upon the happening of any of the following events:
(1)
(i) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a Person),
except Softbank Group Corp. or any other entity that controls, is controlled by or is under common control with the Corporation or Softbank Group Corp. within the meaning of Rule 405 of Regulation C under the
Securities Act, becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of the combined voting power of the then-outstanding Voting Stock of the Corporation;
except
, that:
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(A)
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for purposes of this clause (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition of Voting Stock of the Corporation directly from the Corporation that is approved by a
majority of the Incumbent Directors, (2) any acquisition of Voting Stock of the Corporation by the Corporation or any Subsidiary, (3) any acquisition of Voting Stock of the Corporation by the trustee or other fiduciary holding securities
under any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any Subsidiary, and (4) any acquisition of Voting Stock of the Corporation by any Person pursuant to a Business Transaction that complies with
clauses (A), (B) and (C) of clause (ii) below;
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(B)
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if any Person becomes the beneficial owner of thirty percent (30%) or more of combined voting power of the then-outstanding Voting Stock of the Corporation as a result of a transaction or series of transactions
described in sub-clause (1) of clause (i)(A) above and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Corporation representing one percent (1%) or more of the then-outstanding Voting
Stock of the Corporation, other than as a result of (x) a transaction described in sub-clause (1) of clause (i)(A) above, or (y) a stock dividend, stock split or similar transaction effected by the Corporation in which all holders of
Voting Stock are treated equally, then such subsequent acquisition shall be treated as a Change in Control;
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(C)
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a Change in Control will not be deemed to have occurred if a Person becomes the beneficial owner of thirty percent (30%) or more of the Voting Stock of the Corporation as a result of a reduction in the number of
shares of Voting Stock of the Corporation outstanding pursuant to a transaction or series of transactions that is approved by a majority of the Incumbent Directors unless and until such Person thereafter becomes the beneficial owner of additional
shares of Voting Stock of the Corporation representing one percent (1%) or more of the then-outstanding Voting Stock of the Corporation, other than as a result of a stock dividend, stock split or similar transaction effected by the Corporation
in which all holders of Voting Stock are treated equally; and
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(D)
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if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of thirty percent (30%) or more of the Voting Stock of the Corporation inadvertently, and
such Person divests as promptly as practicable, but no later than the date, if any, set by the Incumbent Directors, a sufficient number of shares so that such Person beneficially owns less than thirty percent (30%) of the Voting Stock of the
Corporation, then no Change in Control shall have occurred as a result of such Persons acquisition; or
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(1)
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Note: As of November 1, 2016, (i.e., the Restatement Effecftive Date), the Change in Control definition is being amended and will be applied on a prospective basis.
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B-3
(ii) the consummation of a reorganization, merger or consolidation of the Corporation with,
or the acquisition of the stock or assets of the Corporation by, another Person, or similar transaction (each, a Business Transaction), unless, in each case, immediately following such Business Transaction (A) the Voting Stock of
the Corporation outstanding immediately prior to such Business Transaction continues to represent, directly or indirectly, (either by remaining outstanding or by being converted into Voting Stock of the surviving entity or any parent thereof), more
than fifty percent (50%) of the combined voting power of the then outstanding shares of Voting Stock or comparable equity interests of the entity resulting from such Business Transaction (including, without limitation, an entity which as a
result of such transaction owns the Corporation or all or substantially all of the Corporations assets either directly or through one or more subsidiaries), (B) no Person (other than the Corporation or Softbank Group Corp. or any other
entity that controls, is controlled by or is under common control with the Corporation or Softbank Group Corp. within the meaning of Rule 405 of Regulation C under the Securities Act, such entity resulting from
such Business Transaction, or any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any Subsidiary or such entity resulting from such Business Transaction) beneficially owns, directly or indirectly, thirty
percent (30%) or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Transaction, and (C) at least a majority of the members of the board of directors of the entity
resulting from such Business Transaction were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Transaction;
(iii) during any consecutive 18-month period, more than fifty percent (50%) of the Board ceases to be comprised of Incumbent
Directors; or
(iv) consummation of a transaction that implements in whole or in part a resolution of the stockholders of the
Corporation authorizing a sale of all or substantially all of Corporations assets or a complete liquidation or dissolution of the Corporation, except pursuant to a Business Transaction that complies with sub-clauses (A), (B) and
(C) of clause (ii) above.
(i) CIC Severance Plan means the Sprint Corporation Change in Control Severance Plan, as it may be
amended from time to time or any successor plan, program, agreement or arrangement.
(j) CIC Severance Protection Period means, except
as otherwise provided in a Participants Evidence of Award, the time period commencing on the date of the first occurrence of a Change in Control and continuing until the earlier of: (i) the 18-month anniversary of such date, and
(ii) the Participants death. To the extent provided in a Participants Evidence of Award, a CIC Severance Protection Period also shall include the time period before the occurrence of a Change in Control for a Participant who is
subject to a Pre-CIC Termination.
(k) Code means the Internal Revenue Code of 1986, as amended from time to time, including any rules
and regulations promulgated thereunder, along with Treasury and IRS interpretations thereof. Reference to any section or subsection of the Code includes reference to any comparable or succeeding provisions of any legislation that amends, supplements
or replaces such section or subsection.
(l) Common Stock means the common stock, par value $0.01 per share, of the Corporation or any
security into which such shares of Common Stock may be changed by reason of any transaction or event of the type referred to in Section 12 of this Plan.
(m) Compensation Committee means the Compensation Committee of the Board, or any other committee of the Board or subcommittee thereof
authorized to administer this Plan in accordance with Section 11 of the Plan.
B-4
(n) Corporation means Sprint Corporation, a Delaware corporation, and its successors.
(o) Covered Employee means a Participant who is determined by the Compensation Committee to be likely to become a covered
employee within the meaning of Section 162(m) of the Code (or any successor provision).
(p) Date of Grant means the date as
of which an Award is determined to be effective and designated in a resolution by the Compensation Committee or an Authorized Officer and is granted pursuant to the Plan. The Date of Grant shall not be earlier than the date of the resolution and
action therein by the Compensation Committee or an Authorized Officer. In no event shall the Date of Grant be earlier than the Effective Date.
(q)
Detrimental Activity, except as may be otherwise specified in a Participants Evidence of Award, means:
(i)
engaging in any activity of competition, as specified in any covenant not to compete set forth in any agreement between a Participant and the Corporation or a Subsidiary, including, but not limited to, the Participants Evidence of Award,
during the period of restriction specified in the agreement prohibiting the Participant from engaging in such activity;
(ii)
engaging in any activity of solicitation, as specified in any covenant not to solicit set forth in any agreement between a Participant and the Corporation or a Subsidiary, including, but not limited to, the Participants Evidence of Award,
during the period of restriction specified in the agreement prohibiting the Participant from engaging in such activity;
(iii) the
disclosure to anyone outside the Corporation or a Subsidiary, or the use in other than the Corporations or a Subsidiarys business, (A) without prior written authorization from the Corporation, of any confidential, proprietary or
trade secret information or material relating to the business of the Corporation and its Subsidiaries, acquired by the Participant during his or her service with the Corporation or any of its Subsidiaries, or (B) in violation of any covenant
not to disclose set forth in any agreement between a Participant and the Corporation or a Subsidiary, including, but not limited to, the Participants Evidence of Award, during the period of restriction specified in the agreement prohibiting
the Participant from engaging in such activity;
(iv) the (A) failure or refusal to disclose promptly and to assign to the
Corporation or a Subsidiary upon request all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during his or her service with the Corporation or any of its Subsidiaries, relating in any
manner to the actual or anticipated business, research or development work of the Corporation or any Subsidiary or the failure or refusal to do anything reasonably necessary to enable the Corporation or any Subsidiary to secure a patent where
appropriate in the United States and in other countries, or (B) violation of any development and inventions provision set forth in any agreement between a Participant and the Corporation or a Subsidiary, including, but not limited to, the
Participants Evidence of Award;
(v) if the Participant is or was an officer, activity that the Board determines entitles the
Corporation to seek recovery from an officer under any policy promulgated by the Board as in effect when an Award was made or vested under this Plan; or
(vi) activity that results in termination of the Participants employment for Cause.
(r) Director means a member of the Board.
(s) Disability except as may be otherwise specified in a Participants Evidence of Award, shall mean, in the case of an Employee,
termination of employment under circumstances that would
B-5
make the Employee eligible to receive benefits under the Sprint Basic Long-Term Disability Plan, as it may be amended from time to time, or any successor plan, program, agreement or arrangement,
and in the case of a Participant who is a Non-Employee Director, termination of service as a Non-Employee Director under circumstances that would make the Non-Employee Director eligible to receive Social Security disability benefits. For purposes of
paying an amount that is subject to Section 409A of the Code at a time that references Disability, Disability shall mean Separation from Service under these circumstances.
(t) Effective Date means August 7, 2015.
(u) Employee means any employee of the Corporation or of any Subsidiary.
(v) Employer means the Corporation or any successor thereto or a Subsidiary.
(w) Evidence of Award means an agreement, certificate, resolution or other written evidence, whether or not in electronic form, that sets
forth the terms and conditions of an Award. Each Evidence of Award shall be subject to this Plan and shall contain such terms and provisions, consistent with this Plan, as the Compensation Committee or an Authorized Officer may approve. An Evidence
of Award may be in an electronic medium, may be limited to notation on the books and records of the Corporation and, unless determined otherwise by the Compensation Committee, need not be signed by a representative of the Corporation or a
Participant. If an Evidence of Award is limited to notation on the books and records of the Corporation, in the event of any inconsistency between a Participants records and the records of the Corporation, the records of the Corporation will
control.
(x) Exchange Act means the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder. Reference
to any section or subsection of the Exchange Act includes reference to any comparable or succeeding provisions of any legislation that amends, supplements or replaces such section or subsection.
(y) Executive Officer means an officer of the Corporation that is subject to the liability provisions of Section 16 of the Exchange
Act.
(z) Free-Standing Appreciation Right means an Appreciation Right granted pursuant to Section 5 of this Plan that is not
granted in tandem with an Option Right.
(aa) Good Reason, except as may be otherwise specified in a Participants Evidence of
Award, shall have the meaning assigned such term in (i) the employment agreement, if any, between a Participant and an Employer, or (ii) during the CIC Severance Protection Period (as defined in the CIC Severance Plan), the CIC Severance
Plan, if a Participant is a participant in such plan.
(bb) Incentive Stock Options means Option Rights that are intended to qualify as
incentive stock options under Section 422 of the Code.
(cc) Incumbent Directors means the individuals who, as of the
Restatement Effective Date, are Directors of the Corporation, and any individual becoming a Director after the Restatement Effective Date whose election, nomination for election by the Corporations stockholders, or appointment, was approved by
a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Corporation in which such person is named as a nominee for director, without objection to such nomination);
provided
,
however
, that an individual shall not be an Incumbent Director if the individuals election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of
the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.
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(dd) Management Objectives means the measurable performance objective or objectives established
pursuant to this Plan for Participants who have received grants of Performance Shares or Performance Units or, when so determined by the Compensation Committee or an Authorized Officer, Option Rights, Appreciation Rights, Restricted Stock,
Restricted Stock Units, other awards contemplated by Section 10 of this Plan or dividend credits pursuant to this Plan. Management Objectives may be described in terms of Corporation-wide objectives or objectives that are related to the
performance of one or more joint ventures, Subsidiaries, business units, divisions, departments, business segments, regions or functions and/or that are related to the performance of the individual Participant. The Management Objectives may be made
relative to the performance of other companies or subsidiaries, divisions, departments, regions, functions, or other organizational units within such other companies, or an index covering multiple companies. The Compensation Committee may grant
Awards to Covered Employees subject to Management Objectives that are either Qualified Performance-Based Awards or are not Qualified Performance-Based Awards. The Management Objectives applicable to any Qualified Performance-Based Award will be
based on one or more, or a combination of the following criteria:
(i) net sales;
(ii) revenue;
(iii)
revenue growth or product revenue growth;
(iv) operating income (before or after taxes, including operating income before
depreciation and amortization);
(v) income (before or after taxes and before or after allocation of corporate overhead and bonus);
(vi) net earnings;
(vii) earnings per share;
(viii) net income (before or after taxes);
(ix) return on equity;
(x) total stockholder return;
(xi) return on assets or net assets;
(xii) appreciation in and/or maintenance of share price;
(xiii) market share;
(xiv) gross profits;
(xv) earnings (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and
amortization);
(xvi) economic value-added models or equivalent metrics;
(xvii) reductions in costs;
(xviii) cash flow or cash flow per share (before or after dividends);
(xix) return on capital (including return on total capital or return on invested capital);
(xx) cash flow return on investment;
(xxi) improvement in or attainment of expense levels or working capital levels;
(xxii) operating, gross, or cash margins;
(xxiii) year-end cash;
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(xxiv) debt reductions;
(xxv) stockholder equity;
(xxvi) regulatory achievements;
(xxvii) operating performance;
(xxviii) market expansion;
(xxix) customer acquisition;
(xxx) customer satisfaction;
(xxxi) employee satisfaction;
(xxxii) implementation, completion, or attainment of measurable objectives with respect to research, development, products or projects
and recruiting and maintaining personnel; or
(xxxiii) a published or a special index deemed applicable by the Compensation Committee
or any of the above criteria as compared to the performance of any such index, including, but not limited to, the Dow Jones U.S. Telecom Index.
Any Management
Objectives that are financial metrics may be determined in accordance with United States Generally Accepted Accounting Principles (GAAP) or may be adjusted when established to include or exclude any items otherwise includable or
excludable under GAAP. In the case of Qualified Performance-Based Awards, each Management Objective will be objectively determined to the extent required under Section 162(m) of the Code.
In connection with the establishment of Management Objectives, or with respect to the measurement of achievement with respect to a Management Objective, the
Compensation Committee may exclude the impact on performance of extraordinary, unusual, or infrequently occurring items, including charges for restructurings; other non-operating items; acquisitions, divestitures, discontinued operations; and other
unusual or non-recurring items and the cumulative effects of changes in tax law or accounting principles, as such are defined by generally accepted accounting principles or the Securities and Exchange Commission and as identified in the
Corporations audited financial statements, notes to such financial statements or managements discussion and analysis in the Corporations annual report or other filings with the Securities and Exchange Commission. With respect to
any grant under the Plan, if the Compensation Committee determines that a change in the business, operations, corporate structure or capital structure of the Corporation, or the manner in which it conducts its business, or other events or
circumstances render the Management Objectives unsuitable, the Compensation Committee may in its discretion modify such Management Objectives or the related minimum acceptable level or levels of achievement, in whole or in part, as the Compensation
Committee deems appropriate and equitable, except in the case of a Qualified Performance-Based Award when such action would result in the loss of the otherwise available exemption of such Award under Section 162(m) of the Code. In such case,
the Compensation Committee will not make any modification of the Management Objectives or the minimum acceptable level or levels of achievement with respect to such Qualified Performance-Based Award. In addition, unless otherwise specified in the
Evidence of Award, the Compensation Committee may, in its discretion, increase, reduce or eliminate the amount payable to any Participant with respect to an Award, based on such factors as the Compensation Committee may deem relevant. For purpose of
clarity, (i) the amount payable pursuant to performance measures based on qualification of an Award as qualified performance-based compensation under Section 162(m) of the Code for any Qualified Performance-Based Award may not
be increased when such action would result in the loss of the otherwise available exemption of such Award under Section 162(m) of the Code as described above, and (ii) the Compensation Committee may exercise the discretion in the foregoing
sentence in a non-uniform manner among Participants.
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(ee) Market Value Per Share means, as of any particular date the closing sale price of the
Common Stock as reported on the New York Stock Exchange Composite Tape or, if not listed on such exchange, on any other national securities exchange on which the Common Stock is listed. If the Common Stock is not traded as of any given date, the
Market Value Per Share means the closing price for the Common Stock on the principal exchange on which the Common Stock is traded for the immediately preceding date on which the Common Stock was traded. If there is no regular public trading market
for such Common Stock, the Market Value Per Share of the Common Stock shall be the fair market value of the Common Stock as determined in good faith by the Board. The Board is authorized to adopt another fair market value pricing method, provided
such method is stated in the Evidence of Award, and is in compliance with the fair market value pricing rules set forth in Section 409A of the Code.
(ff) Non-Employee Director means a member of the Board who is not an Employee.
(gg) Non-Qualified Options means Option Rights that are not intended to qualify as incentive stock options under
Section 422 of the Code.
(hh) Normal Retirement except as may be otherwise specified in a Participants Evidence of Award,
means, with respect to any Employee, termination of employment (other than termination for Cause or due to death or Disability) at or after age 65. For purposes of paying an amount that is subject to Section 409A of the Code at a time that
references Normal Retirement, Normal Retirement shall mean Separation from Service at or after age 65.
(ii) Optionee means the
Participant named in an Evidence of Award evidencing an outstanding Option Right.
(jj) Option Price means the purchase price payable on
exercise of an Option Right.
(kk) Option Right means the right to purchase shares of Common Stock upon exercise of a Non-Qualified
Option or an Incentive Stock Option granted pursuant to Section 4 of this Plan.
(ll) Participant means a person who is selected by
the Board, the Compensation Committee or an Authorized Officer to receive benefits under this Plan and who is at the time (i) an Employee or a Non-Employee Director, or (ii) providing services to the Corporation or a Subsidiary, including
but not limited to, a consultant, an advisor, independent contractor, or other non-Employee of the Corporation or any one or more of its Subsidiaries (provided that such person satisfies the Form S-8 definition of an employee).
(mm) Performance Period means, in respect of a Performance Share or Performance Unit, a period of time established pursuant to
Section 8 of this Plan within which the Management Objectives relating to such Performance Share or Performance Unit are to be achieved.
(nn)
Performance Share means a bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to Section 8 of this Plan.
(oo) Performance Unit means a bookkeeping entry awarded pursuant to Section 8 of this Plan that records a unit equivalent to $1.00 or
such other value as is determined by the Compensation Committee.
(pp) Person has the meaning set forth in Section 2(h)(i).
(qq) Plan means this Sprint Corporation 2015 Omnibus Incentive Plan, as it may be amended from time to time.
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(rr) Plan Year has the meaning set forth in Section 9(g) and (h).
(ss) Pre-CIC Termination means the termination of a Participants employment without Cause, provided that both (i) the termination
was made in the six (6) month period prior to a Change in Control at the request of a third party in contemplation of a Change in Control, and (ii) the Change in Control occurs. For purposes of paying an amount that is subject to
Section 409A of the Code at a time that references a Pre-CIC Termination, Pre-CIC Termination shall mean Separation from Service under these circumstances
(tt) Predecessor Plans means (i) the Sprint 2007 Plan, and (ii) the Sprint 1997 Plan.
(uu) Qualified Performance-Based Award means any award of Performance Shares, Performance Units, Restricted Stock, Restricted Stock Units or
other awards contemplated under Section 10 of this Plan, or portion of such award, to a Covered Employee that is intended to satisfy the requirements for qualified performance-based compensation under Section 162(m) of the
Code.
(vv) Restatement Effective Date means the date on which the amended and restated Plan is approved by stockholders.
(ww) Restricted Stock means shares of Common Stock granted or sold pursuant to Section 6 of this Plan as to which neither the
substantial risk of forfeiture nor the prohibition on transfer has expired.
(xx) Restricted Stock Unit means an award granted or sold
pursuant to Section 7 of this Plan of the right to receive shares of Common Stock or cash at the end of the Restriction Period.
(yy)
Restriction Period means the period of time during which Restricted Stock Units are subject to restrictions, as provided in Section 7 of this Plan.
(zz) Separation From Service means a separation from service as such term is defined under Code Section 409A and the
Treasury regulations issued thereunder. Except as otherwise required to comply with Code Section 409A, an Employee shall be considered not to have had a Separation From Service where the level of bona fide services performed continues at a
level that is at least 21 percent or more of the average level of service performed by the Employee during the immediately preceding 36-month period (or if providing services for less than 36 months, such lesser period) after taking into account any
services that the Employee provided prior to such date or that the Corporation and the Employee reasonably anticipate the Employee may provide (whether as an Employee or independent contractor) after such date.
For purposes of the determination of whether a Participant has had a separation from service as described under Code Section 409A and the guidance and
Treasury regulations issued thereunder, the terms Sprint, employer and service recipient mean Sprint Corporation and any affiliate with which Sprint Corporation would be considered a single employer under Code
Section 414(b) or 414(c), provided that in applying Code Sections 1563(a)(1), (2), and (3) for purposes of determining a controlled group of corporations under Code Section 414(b), the language at least 50 percent is used
instead of at least 80 percent, each place it appears in Code Sections 1563(a)(1), (2) and (3), and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining trades or businesses (whether or not
incorporated) that are under common control for purposes of Code Section 414(c), at least 50 percent is used instead of at least 80 percent each place it appears in Treasury Regulation Section 1.414(c)-2.
(aaa) Six-Month Payment Delay means the required delay in payment to a Participant who is a specified employee of amounts
subject to Section 409A that are paid upon Separation from
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Service, pursuant to Section 409A(a)(2)(B)(i) of the Code. When a Six-Month Payment Delay is required, the payment date shall be not before the date which is six months after the date of
Separation from Service or, if earlier, the date of the Participants death. The term specified employee shall have the meaning ascribed to this term under Section 409A of the Code.
(bbb) Spread means the excess of the Market Value Per Share on the date when an (i) Option Right is exercised over the Option Price, or
(ii) Appreciation Right is exercised over the Option Price or Base Price provided for in the related Option Right or Free-Standing Appreciation Right, respectively.
(ccc) Sprint 1997 Plan means the 1997 Long-Term Stock Incentive Program, effective April 15, 1997.
(ddd) Sprint 2007 Plan means the 2007 Omnibus Incentive Plan, effective May 8, 2007.
(eee) Subsidiary means (i) any individual, corporation, partnership, association, joint-stock company, trust, incorporated organization
or government or political subdivision thereof, that directly, or through one or more intermediaries, controls, or is controlled by, or is under common control with, the Corporation, or (ii) any entity in which the Corporation has a significant
equity interest, as determined by the Compensation Committee except that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, Subsidiary means any corporation in which
the Corporation owns or controls, directly or indirectly, more than 50% of the total combined voting power represented by all classes of stock issued by such corporation at the time of grant.
(fff) Substitute Awards means Awards that are granted in assumption of, or in substitution or exchange for, outstanding awards previously
granted by an entity acquired directly or indirectly by the Corporation or with which the Corporation directly or indirectly combines.
(ggg)
Tandem Appreciation Right means an Appreciation Right granted pursuant to Section 5 of this Plan that is granted in tandem with an Option Right.
(hhh) Ten Percent Stockholder shall mean any Participant who owns more than 10% of the combined voting power of all classes of stock of the
Corporation, within the meaning of Section 422 of the Code.
(iii) Termination Date, for purposes of this Plan, except as may be
otherwise prescribed by the Compensation Committee or an Authorized Officer in an Evidence of Award, shall mean (i) with respect to any Employee, the date on which the Employee ceases to be employed by an Employer, or (ii) with respect to
any Participant who is not an Employee, the date on which such Participants provision of services to the Corporation or any one or more of its Subsidiaries ends.
(jjj) Voting Stock means securities entitled to vote generally in the election of Directors.
3.
Shares Subject to this Plan
.
(a) Maximum
Shares Available Under Plan.
(i) As of the Effective Date of the original Plan, the maximum aggregate number of shares of Common
Stock that could be granted under the original Plan were the shares of Common Stock available for grant under the Predecessor Plans as of May 31, 2015. Subject to stockholder approval of this amended and restated Plan, the maximum aggregate
number of shares of Common Stock that may be granted under the Plan after the Restatement
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Effective Date is the sum of (i) 137,247,553 shares (representing the incremental new shares of Common Stock being authorized under the Plan); and (ii) the number of shares
available for grant under the Plan as of the Restatement Effective Date. The foregoing Plan limit shall be subject to adjustment as provided in Section 12 of this Plan. Common Stock to be issued or delivered pursuant to the Plan may be
authorized and unissued shares of Common Stock, treasury shares or a combination of the foregoing.
(ii) In addition to the shares of
Common Stock authorized in Section 3(a)(i), if:
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(A)
|
any Award (other than an Award that can only be paid in cash) granted pursuant to this Plan (1) that terminates, is forfeited, or expires without having been exercised in full, or (2) is settled in cash, then
the underlying shares of Common Stock, to the extent of any such forfeiture, termination, expiration, or cash settlement, again shall be available for grant under this Plan and credited toward the Plan limit as set forth in Section 3(a)(i).
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(B)
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any option, stock appreciation right, restricted stock, restricted stock unit, or other award (other than an award that can only be paid in cash) granted pursuant to the Predecessor Plans that terminates, is forfeited,
or expires without having been exercised in full or is settled in cash, then the underlying shares of Common Stock, to the extent of any such forfeiture, termination or cash settlement, shall be available for grant under this Plan and credited
toward the Plan limit as one share of Common Stock for every one share of Common Stock allocable to any such award.
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(iii) Shares of Common Stock that are tendered, whether by physical delivery or by attestation, to the Corporation by a Participant or
withheld from the Award by the Corporation as full or partial payment of the exercise or purchase price of any Award or in payment of any applicable withholding for Federal, state, city, local or foreign taxes incurred in connection with the
exercise, vesting or earning of any Award under the Plan or under the Predecessor Plans will not become available for future grants under the Plan. With respect to an Appreciation Right, when such Appreciation Right is exercised and settled in
shares of Common Stock, the shares of Common Stock subject to such Appreciation Right shall be counted against the shares of Common Stock available for issuance under the Plan as one share of Common Stock for every one share of Common Stock subject
thereto, regardless of the number of shares of Common Stock used to settle the Appreciation Right upon exercise.
(b) Life-of-Plan Limits.
Notwithstanding anything in this Section 3, or elsewhere in this Plan, to the contrary and subject to adjustment pursuant to Section 12 of this Plan, the aggregate number of shares of Common Stock actually issued or transferred by the
Corporation upon the exercise of Incentive Stock Options shall not exceed 150,000,000.
(c) Individual Participant Limits. Notwithstanding anything
in this Section 3, or elsewhere in this Plan, to the contrary and subject to adjustment pursuant to Section 12 of this Plan:
(i) No Participant shall be granted Option Rights or Appreciation Rights or other awards granted pursuant to Section 10 of this Plan
with rights which are substantially similar to Option Rights or Appreciation Rights, in the aggregate, for more than 5,000,000 shares of Common Stock during any fiscal year.
(ii) For grants of Qualified Performance-Based Awards, no Participant shall be granted Restricted Stock, Restricted Stock Units,
Performance Shares or other awards granted pursuant to Section 10 of this Plan with rights which are substantially similar to Performance Shares, in the aggregate, for more than 10,000,000 shares of Common Stock during any fiscal year.
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(iii) For grants of Qualified Performance-Based Awards, no Participant shall be granted
Performance Units, cash-denominated awards, or other awards granted pursuant to Section 10 of this Plan with rights which are substantially similar to Performance Units, in the aggregate, for more than $20,000,000 during any fiscal year.
(d) Limits on Awards to Non-Employee Directors. Notwithstanding any other provision of the Plan to the contrary, the aggregate grant date fair value
(computed as of the date of grant in accordance with applicable financial accounting rules) of all Awards granted to any Non-Employee Director during any single fiscal year, taken together with any cash fees paid to such Non-Employee Director during
such fiscal year, shall not exceed $750,000 ($1,500,000 for the Chairman or Vice-Chairman).
(e) Substitute Awards. Any Substitute Awards granted by
the Corporation shall not reduce the shares of Common Stock available for Awards under the Plan and will not count against the limits specified in Sections 3(c) or (d) above.
4.
Option Rights
. The Compensation Committee or, in accordance with Section 11(d), an Authorized Officer may, from time to time and upon
such terms and conditions as it or the Authorized Officer may determine, grant Option Rights to Participants. Each such grant will utilize any or all of the authorizations as specified in the following provisions:
(a) Each grant will specify the number of shares of Common Stock to which it pertains, subject to the limitations set forth in Section 3 of this
Plan.
(b) Each Option Right will specify an Option Price per share of Common Stock, which (except with respect to Substitute Awards) may not be
less than the Market Value Per Share on the Date of Grant. In the case of an Incentive Stock Option granted to a Ten Percent Stockholder, the Option Price per share of Common Stock shall not be less than one hundred ten percent (110%) of the
Market Value Per Share on the Date of Grant.
(c) Each Option Right will specify whether the Option Price will be payable (i) in cash or by
check or by wire transfer of immediately available funds, (ii) by the actual or constructive transfer to the Corporation of shares of Common Stock owned by the Optionee (or other consideration authorized pursuant to Section 4(d)) having a
value at the time of exercise equal to the total Option Price, (iii) by a combination of such methods of payment and may either grant to the Participant or retain in the Compensation Committee the right to elect among the foregoing
alternatives, or (iv) by such other methods as may be approved by the Compensation Committee. No fractional shares of Common Stock will be issued or accepted.
(d) To the extent permitted by law, any grant may permit deferred payment of the Option Price from the proceeds of sale through a bank or broker
designated by, and on a date satisfactory to, the Corporation of some or all of the shares of Common Stock to which such exercise relates.
(e)
Successive grants may be made to the same Participant whether or not any Option Rights previously granted to such Participant remain unexercised.
(f) Each grant will specify the period or periods of continuous service by the Optionee with the Corporation or any Subsidiary that is necessary before
the Option Rights or installments thereof will become exercisable.
(g) Any grant of Option Rights may specify Management Objectives that must be
achieved as a condition to the exercise of such rights. Each grant may specify in respect of such Management
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Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of Option Rights that will become exercisable if performance is at or above
the minimum level(s), but falls short of full achievement of the specified Management Objectives. The grant will specify that, before the exercise of such Option Rights become exercisable, the Compensation Committee must certify that the Management
Objectives have been satisfied.
(h) Any grant of Option Rights may provide for the earlier exercise of such Option Rights or other modifications,
including in the event of termination without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, a Change in Control, or the grant of a Substitute Award.
(i) Option Rights granted under this Plan may be (i) options, including, without limitation, Incentive Stock Options, (ii) Non-Qualified
Options, or (iii) combinations of the foregoing. Incentive Stock Options may be granted only to Participants who meet the definition of employee under Section 3401(c) of the Code.
(j) The exercise of an Option Right will result in the cancellation on a share-for-share basis of any related Tandem Appreciation Right authorized under
Section 5 of this Plan.
(k) No Option Right will be exercisable more than ten (10) years from the Date of Grant. In the case of an
Incentive Stock Option granted to an Employee who is a Ten Percent Stockholder, the Incentive Stock Option will not be exercisable more than five (5) years from the Date of Grant.
(l) An Option Right granted hereunder may be exercisable, in whole or in part, by written notice delivered in person, by mail or by approved electronic
medium to the Treasurer of the Corporation at its principal office, or by such other means as the Treasurer or other authorized representative of the Corporation shall designate, specifying the number of shares of Common Stock to be purchased and
accompanied by payment thereof and otherwise in accordance with the Evidence of Award pursuant to which the Option Right was granted.
(m) No grant
of Option Rights will authorize the payment of dividend equivalents on the Option Right.
(n) Each grant of Option Rights will be evidenced by an
Evidence of Award, which Evidence of Award will describe such Option Rights, and contain such other terms as the Compensation Committee or Authorized Officer may approve.
(o) Except as provided in an Evidence of Award, in the event of an Optionees termination of employment or service, any Option Rights that have not
vested as of the Optionees Termination Date will be cancelled and immediately forfeited, without further action on the part of the Corporation or the Compensation Committee, and the Optionee will have no further rights in respect of such
Option Rights.
5.
Appreciation Rights
.
(a) The Compensation Committee or, in accordance with Section 11(d), an Authorized Officer may grant (i) to any Optionee, Tandem Appreciation
Rights in respect of Option Rights granted hereunder, and (ii) to any Participant, Free-Standing Appreciation Rights. All grants of Appreciation Rights will specify the number of shares of Common Stock to which the grant pertains, subject to
the limitations set forth in Section 3 of this Plan.
(b) A Tandem Appreciation Right will be a right of the Optionee, exercisable by surrender
of the related Option Right, to receive from the Corporation an amount determined by the Compensation
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Committee or an Authorized Officer, which will be expressed as a percentage of the Spread on the related Option Right (not exceeding 100%) at the time of exercise. Tandem Appreciation Rights must
be granted concurrently with the related Option Right.
(c) A Free-Standing Appreciation Right will be a right of the Participant to receive from
the Corporation an amount determined by the Compensation Committee or an Authorized Officer, which will be expressed as a percentage of the Spread (not exceeding one hundred percent (100%)) at the time of exercise.
(d) No grant of Appreciation Rights will authorize the payment of dividend equivalents on the Appreciation Right.
(e) Each grant of Appreciation Rights will utilize any or all of the authorizations as specified in the following provisions:
(i) Any grant may specify that the amount payable on exercise of an Appreciation Right may be paid by the Corporation in cash, in shares
of Common Stock or in any combination thereof and may either grant to the Participant or retain in the Compensation Committee the right to elect among those alternatives.
(ii) Any grant may specify that the amount payable on exercise of an Appreciation Right may not exceed a maximum specified by the
Compensation Committee or an Authorized Officer at the Date of Grant.
(iii) Any grant may specify waiting periods before exercise
and permissible exercise dates or periods.
(iv) Any grant of Appreciation Rights may specify Management Objectives that must be
achieved as a condition of the exercise of such Appreciation Rights. Each grant may specify in respect of such Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of
Appreciation Rights that will become exercisable if performance is at or above the minimum level(s), but falls short of full achievement of the specified Management Objectives. The grant of such Appreciation Rights will specify that, before the
exercise of such Appreciation Rights, the Compensation Committee must certify that the Management Objectives have been satisfied.
(v) Any grant of Appreciation Rights may provide for the earlier exercise of such Appreciation Rights or other modifications, including
in the event of termination without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, a Change in Control, or the grant of a Substitute Award.
(vi) Each grant of Appreciation Rights will be evidenced by an Evidence of Award, which Evidence of Award will describe such Appreciation
Rights, identify the related Option Rights (if applicable), and contain such other terms and provisions, consistent with this Plan, as the Compensation Committee or an Authorized Officer may approve.
(vii) Except as provided in an Evidence of Award, in the event of a Participants termination of employment or service, any of the
Participants Appreciation Rights that have not vested as of the Participants Termination Date will be cancelled and immediately forfeited, without further action on the part of the Corporation or the Compensation Committee, and the
Participant will have no further rights in respect of such Appreciation Rights.
(f) Any grant of Tandem Appreciation Rights will provide that such
Tandem Appreciation Rights may be exercised only at a time when the related Option Right is also exercisable (and will
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expire when the related Option Right would have expired) and at a time when the Spread is positive, and by surrender of the related Option Right for cancellation. Successive grants of Tandem
Appreciation Rights may be made to the same Participant regardless of whether any Tandem Appreciation Rights previously granted to the Participant remain unexercised. In the case of a Tandem Appreciation Right granted in relation to an Incentive
Stock Option to an Employee who is a Ten Percent Stockholder on the Date of Grant, the amount payable with respect to each Tandem Appreciation Right shall be equal in value to the applicable percentage of the excess, if any, of the Market Value Per
Share on the exercise date over the Base Price of the Tandem Appreciation Right, which Base Price shall not be less than 110 percent of the Market Value Per Share on the date the Tandem Appreciation Right is granted, and the Incentive Stock Option
and related Tandem Appreciation Right shall not be exercisable more than five (5) years from the Date of Grant.
(g) Regarding Free-Standing
Appreciation Rights only:
(i) Each grant will specify in respect of each Free-Standing Appreciation Right a Base Price, which
(except with respect to Substitute Awards) may not be less than the Market Value Per Share on the Date of Grant;
(ii) Successive
grants may be made to the same Participant regardless of whether any Free-Standing Appreciation Rights previously granted to the Participant remain unexercised; and
(iii) No Free-Standing Appreciation Right granted under this Plan may be exercised more than ten (10) years from the Date of Grant.
6.
Restricted Stock
. The Compensation Committee or, in accordance with Section 11(d), an Authorized Officer may grant or sell
Restricted Stock to Participants. Each such grant or sale will utilize any or all of the authorizations as specified in the following provisions:
(a) Each such grant or sale will constitute an immediate transfer of the ownership of shares of Common Stock to the Participant in consideration of the
performance of services, entitling such Participant to voting, dividend and other ownership rights, but subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referred to.
(b) Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant, as determined by the
Compensation Committee or an Authorized Officer at the Date of Grant.
(c) Each such grant or sale will provide that the Restricted Stock covered by
such grant or sale that vests upon the passage of time will be subject to a substantial risk of forfeiture within the meaning of Section 83 of the Code, as determined by the Compensation Committee or an Authorized Officer at the
Date of Grant and may provide for the earlier lapse of such substantial risk of forfeiture as provided in Section 6(e) below. In the case of grants that are a form of payment for earned Performance Shares or Performance Units or other awards,
such grant may provide for no minimum vesting period.
(d) Each such grant or sale will provide that during the period for which such substantial
risk of forfeiture is to continue, the transferability of the Restricted Stock will be prohibited or restricted in the manner set forth in this Plan, and to the extent prescribed by the Compensation Committee at the Date of Grant (which restrictions
may include, without limitation, rights of repurchase or first refusal in the Corporation or provisions subjecting the Restricted Stock to a continuing substantial risk of forfeiture in the hands of any transferee).
(e) Any grant of Restricted Stock may specify Management Objectives that, if achieved, will result in termination or early termination of the
restrictions applicable to such Restricted Stock. Each
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grant may specify in respect of such Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of shares of Restricted Stock
on which restrictions will terminate if performance is at or above the minimum level(s), but falls short of full achievement of the specified Management Objectives. The grant or sale of Restricted Stock will specify that, before the termination or
early termination of the restrictions applicable to such Restricted Stock, the Compensation Committee must certify that the Management Objectives have been satisfied.
(f) Any grant of Restricted Stock may provide for the earlier lapse or other modification, including in the event of termination without Cause,
resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, Change in Control, or the grant of a Substitute Award.
(g) Any such grant or sale of Restricted Stock may require that any or all dividends or other distributions paid thereon during the period of such
restrictions be automatically deferred and/or reinvested in additional shares of Restricted Stock (which may be subject to the same restrictions as the underlying Award) or be paid in cash on a deferred or contingent basis.
(h) Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award and will contain such terms and provisions, consistent with this
Plan, as the Compensation Committee or an Authorized Officer may approve. Unless otherwise directed by the Compensation Committee, (i) all certificates representing shares of Restricted Stock will be held in custody by the Corporation until all
restrictions thereon have lapsed, together with a stock power or powers executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such shares of Common Stock, or (ii) all uncertificated shares of
Restricted Stock will be held at the Corporations transfer agent in book entry form with appropriate restrictions relating to the transfer of such shares of Restricted Stock.
7.
Restricted Stock Units
. The Compensation Committee or, in accordance with Section 11(d), an Authorized Officer may grant or sell
Restricted Stock Units to Participants. Each such grant or sale will utilize any or all of the authorizations as specified in the following provisions:
(a) Each such grant or sale of Restricted Stock Units will constitute the agreement by the Corporation to deliver shares of Common Stock or cash to the
Participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include the achievement of Management Objectives) during the Restriction Period as the Compensation Committee or
an Authorized Officer may specify. Each grant may specify in respect of such Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the number of shares of Restricted Stock Units on
which restrictions will terminate if performance is at or above the minimum level(s), but falls short of full achievement of the specified Management Objectives. The grant or sale of such Restricted Stock Units will specify that, before the
termination or early termination of the restrictions applicable to such Restricted Stock Units, the Compensation Committee must certify that the Management Objectives have been satisfied.
(b) Each such grant or sale of Restricted Stock Units may be made without additional consideration or in consideration of a payment by such Participant
that is less than the Market Value Per Share at the Date of Grant.
(c) If the Restriction Period lapses only by the passage of time, each such
grant or sale will be subject to a Restriction Period (which may include pro-rata, graded or cliff vesting over such period), as determined by the Compensation Committee or an Authorized Officer at the Date of Grant. In the case of grants that are a
form of payment for earned Performance Shares or Performance Units or other awards, such grant may provide for no Restriction Period.
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(d) Each such grant or sale of Restricted Stock Units may provide for the earlier lapse or other
modification of such Restriction Period, including in the event of termination without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, a Change in Control, or the grant of a
Substitute Award and, to the extent that any grant, sale, or Substitute Award is subject to, or determined to be subject to Section 409A of the Code, the time and form of payment shall be indicated in the Evidence of Award as upon one or more
of the permissible payment events under Section 409A of the Code and as subject to the Six-Month Payment Delay, if required.
(e) During the
Restriction Period, the Participant will have none of the rights of a stockholder of any shares of Common Stock with respect to such Restricted Stock Units, but the Compensation Committee may, at the Date of Grant, authorize the payment of dividend
equivalents on such Restricted Stock Units on either a current, deferred or contingent basis, either in cash or in additional shares of Common Stock and, the Evidence of Award shall specify the time of payment of such dividend equivalents and
indicate that such payment is subject to the Six-Month Payment Delay, if required.
(f) Each grant or sale of Restricted Stock Units will specify
the time and manner of payment of Restricted Stock Units that have been earned and, that such payment is subject to the Six-Month Payment Delay, if required. Any grant or sale may specify that the amount payable with respect thereto may be paid by
the Corporation in cash, in shares of Common Stock or in any combination thereof and may either grant to the Participant or retain in the Compensation Committee the right to elect among those alternatives.
(g) Each such grant or sale of Restricted Stock Units will provide that during the period for which such Restriction Period is to continue, the
transferability of the Restricted Stock Units will be prohibited or restricted in the manner and to the extent prescribed by the Compensation Committee at the Date of Grant (which restrictions may include, without limitation, rights of repurchase or
first refusal in the Corporation or provisions subjecting the Restricted Stock Units to a continuing substantial risk of forfeiture in the hands of any transferee).
(h) Each grant or sale of Restricted Stock Units will be evidenced by an Evidence of Award and will contain such terms and provisions, consistent with
this Plan, as the Compensation Committee or an Authorized Officer may approve.
(i) Except as provided in an Evidence of Award, in the event of a
Participants termination of employment or service, any of the Participants Restricted Stock Units that remain subject to the Restriction Period on the Participants Termination Date will be cancelled and immediately forfeited
without further action on the part of the Corporation or the Compensation Committee, and the Participant will have no further rights in respect of such Restricted Stock Units.
8.
Performance Shares and Performance Units
. The Compensation Committee or, in accordance with Section 11(d), an Authorized Officer may
grant Performance Shares and Performance Units that will become payable to a Participant upon achievement of specified Management Objectives during the Performance Period. Each such grant will utilize any or all of the authorizations as specified in
the following provisions:
(a) Each grant will specify the number of Performance Shares or Performance Units to which it pertains, which number may
be subject to adjustment to reflect changes in compensation or other factors;
provided
,
however
, that no such adjustment will be made in the case of a Qualified Performance-Based Award where such action would result in the loss of the
otherwise available exemption of the award under Section 162(m) of the Code.
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(b) The Performance Period with respect to each Performance Share or Performance Unit will be such period
of time, as determined by the Compensation Committee or an Authorized Officer at the Date of Grant.
(c) Any grant of Performance Shares or
Performance Units will specify Management Objectives, which, if achieved, will result in payment of the Award, and each grant may specify in respect of such specified Management Objectives a minimum acceptable level or levels of achievement and will
set forth a formula for determining the number of Performance Shares or Performance Units that will be earned if performance is at or above the level(s), but falls short of full achievement of the specified Management Objectives. The grant of
Performance Shares or Performance Units will specify that, before the Performance Shares or Performance Units will be earned and paid, the Compensation Committee must certify that the Management Objectives have been satisfied.
(d) Any grant of Performance Shares or Performance Units may provide for the earlier lapse or other modification, including in the event of termination
without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, a Change in Control, or the grant of a Substitute Award and to the extent that any grant or Substitute Award is subject to, or
determined to be subject to, Section 409A of the Code, the time and form of payment shall be indicated in the Evidence of Award as upon one or more of the permissible payment events under Section 409A of the Code and, as subject to the
Six-Month Payment Delay, if required.
(e) Each grant will specify the time and manner of payment of Performance Shares or Performance Units that
have been earned and, that such payment is subject to the Six-Month Payment Delay, if required. Any grant may specify that the amount payable with respect thereto may be paid by the Corporation in cash, in shares of Common Stock, in Restricted Stock
or Restricted Stock Units or in any combination thereof and may either grant to the Participant or retain in the Compensation Committee the right to elect among those alternatives;
provided
,
however
, that as applicable, the amount
payable may not exceed the maximum amount payable, as may be specified by the Compensation Committee or an Authorized Officer on the Date of Grant.
(f) The Compensation Committee may provide for the payment of dividend equivalents to the holder thereof on either a current, deferred or contingent
basis, either in cash or in additional shares of Common Stock. In this case, the Evidence of Award will specify, the time of payment of such dividend equivalents and, that such payment is subject to the Six-Month Payment Delay, if required.
(g) Each grant of Performance Shares or Performance Units will be evidenced by an Evidence of Award and will contain such other terms and provisions,
consistent with this Plan, as the Compensation Committee or an Authorized Officer may approve.
(h) Except as provided in an Evidence of Award, in
the event of a Participants termination of employment or service, any of the Participants Performance Shares and Performance Units that remain subject to a Performance Period on the Participants Termination Date will be cancelled
and immediately forfeited, without further action on the part of the Corporation or the Compensation Committee, and the Participant will have no further rights in respect of such Performance Shares or Performance Units.
9.
Awards to Non-Employee Directors
. The Board may, from time to time and upon such terms and conditions as it may determine, authorize the
granting to Non-Employee Directors, Option Rights, Appreciation Rights or other awards contemplated by Section 10 of this Plan and may also authorize the grant or sale of shares of Common Stock, Restricted Stock or Restricted Stock Units to
Non- Employee Directors.
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(a) Each grant of Option Rights awarded pursuant to this Section 9 will be upon terms and conditions
consistent with Section 4 of this Plan.
(b) Each grant of Appreciation Rights pursuant to this Section 9 will be upon terms and
conditions consistent with Section 5 of this Plan.
(c) Each grant or sale of Restricted Stock pursuant to this Section 9 will be upon
terms and conditions consistent with Section 6 of this Plan.
(d) Each grant or sale of Restricted Stock Units pursuant to this Section 9
will be upon terms and conditions consistent with Section 7 of this Plan.
(e) Non-Employee Directors may be granted, sold, or awarded other
awards contemplated by Section 10 of this Plan.
(f) If a Non-Employee Director subsequently becomes an employee of the Corporation or a
Subsidiary while remaining a member of the Board, any Award held under this Plan by such individual at the time of such commencement of employment will not be affected thereby.
(g) Non-Employee Directors, pursuant to this Section 9, may be awarded, or may be permitted to elect to receive, pursuant to procedures established
by the Board or a committee of the Board, all or any portion of their annual retainer, meeting fees or other fees in shares of Common Stock, Restricted Stock, Restricted Stock Units or other Awards contemplated by Section 10 of this Plan in
lieu of cash. Any such election shall comply with Section 409A of the Code, if applicable. The election, if subject to Section 409A of the Code, (i) shall apply to the annual retainer, meeting fees, or other fees earned during the
period to which it pertains (the Plan Year), (ii) must be received in writing by the administrator of the Plan by the established enrollment deadline of any Plan Year, which must be no later than the last business day of the
calendar year immediately preceding the calendar year in which that Plan Year commences, in order to cause that Plan Years annual retainer, meeting fees, or other fees to be subject to the provision of this Plan, and (iii) must specify
the form of distribution (in shares of Common Stock, Restricted Stock, Restricted Stock Units, or other Awards contemplated by Section 10 of the Plan in lieu of cash) to the Non-Employee Director. Any such election is irrevocable on the last
day set by the administrator for making elections.
(h) Notwithstanding anything in Section 5, 6 or 7 to the contrary, each grant pursuant to
this Section 9 may specify the period or periods of continuous service, if any, by the Non-Employee Director with the Corporation that are necessary before such awards or installments thereof shall become fully exercisable or restrictions
thereon will lapse, which shall be determined on the Date of Grant.
10.
Other Awards
.
(a) The Compensation Committee or an Authorized Officer may, subject to limitations under applicable law, authorize grants or sales to any Participant
of other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, (i) shares of Common Stock or factors that may influence the value of such shares, including, without
limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into shares of Common Stock, purchase rights for shares of Common Stock, awards with value and payment contingent upon performance of the Corporation
or specified Subsidiaries, affiliates or other business units thereof or any other factors designated by the Compensation Committee, and awards valued by reference to the book value of shares of Common Stock or the value of securities of, or the
performance of specified Subsidiaries or affiliates or other business units of, the Corporation, (ii) cash,
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or (iii) any combination of the foregoing. The Compensation Committee or an Authorized Officer shall determine the terms and conditions of such awards, which may include the achievement of
Management Objectives, which may specify in respect of such Management Objectives a minimum acceptable level or levels of achievement and may set forth a formula for determining the portion or all of the award on which restrictions will terminate if
performance is at or above the minimum level(s), but falls short of full achievement of the specified Management Objectives. The grant or sale of such award will specify that, before the termination or early termination of the restrictions
applicable to such award, the Compensation Committee must certify that the Management Objectives have been satisfied. Shares of Common Stock delivered pursuant to an award in the nature of a purchase right granted under this Section 10 shall be
purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, cash, shares of Common Stock, other awards, notes or other property, as the Compensation Committee shall determine.
(b) Each grant may specify the period or periods of continuous service, if any, by the Participant with the Corporation or any Subsidiary that are
necessary before such awards or installments thereof shall become fully transferable, which shall be determined by the Compensation Committee or an Authorized Officer on the Date of Grant.
(c) Each grant may provide for the earlier termination of the period or periods of continuous service or other modifications, including in the event of
termination without Cause, resignation for Good Reason, Normal Retirement, termination due to death or Disability of the Participant, a Change in Control, or the grant of a Substitute Award and, to the extent that any grant or Substitute Award is
subject to, or determined to be subject to, Section 409A of the Code, the time and form of payment shall be indicated in the Evidence of Award as upon one or more of the permissible payment events under Section 409A of the Code and, as
subject to the Six-Month Payment Delay, if required.
(d) The Compensation Committee may authorize grants or sales of shares of Common Stock as a
bonus, or may grant other awards in lieu of obligations of the Corporation or a Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the
Compensation Committee.
(e) Each grant or sale pursuant to this Section 10 may be made without additional consideration from the Participant
or in consideration of a payment by the Participant that is less than the Market Value Per Share on the Date of Grant;
provided
,
however
, that with respect to a payment of an award that is substantially similar to an Option Right, no
such payment shall be less than Market Value Per Share on the Date of Grant.
11.
Administration of this Plan
.
(a) This Plan will be administered by the Compensation Committee. The Board or the Compensation Committee, as applicable, may from time to time delegate
all or any part of its authority under this Plan to any other committee of the Board or subcommittee thereof consisting exclusively of not less than two or more members of the Board, each of whom shall be a non-employee director within
the meaning of Rule 16b-3 of the Securities and Exchange Commission promulgated under the Exchange Act, an outside director within the meaning of Section 162(m) of the Code and an independent director within the meaning
of the rules of the New York Stock Exchange, as constituted from time to time. To the extent of any such delegation, references in this Plan to the Board or the Compensation Committee, as applicable, will be deemed to be references to such committee
or subcommittee.
(b) The interpretation and construction by the Compensation Committee of any provision of this Plan or of any agreement,
notification or document evidencing the grant of an Award, and any
B-21
determination by the Compensation Committee pursuant to any provision of this Plan or of any such agreement, notification or document will be final and conclusive.
(c) To the extent permitted by applicable law, the Board or the Compensation Committee, as applicable, may, from time to time, delegate to one or more
of its members or to one or more officers of the Corporation, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Board, the Compensation Committee, the committee, or any person to whom duties
or powers have been delegated as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Board or the Compensation Committee, the committee or such person may have under this Plan.
(d) To the extent permitted by applicable law, the Compensation Committee may, by resolution, authorize one or more Executive Officers of the
Corporation (each, an Authorized Officer), including the Chief Executive Officer of the Corporation, to do one or both of the following on the same basis as the Compensation Committee: (i) designate Participants to be recipients of
Awards under this Plan, (ii) determine the size of any such Awards;
provided
,
however
, that (A) the Compensation Committee shall not delegate such responsibilities to any Executive Officer for Awards granted to a Participant
who is an Executive Officer, a Director, or a more than 10% beneficial owner of any class of the Corporations equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Board in accordance with
Section 16 of the Exchange Act, and (B) the resolution providing for such authorization sets forth the total number of shares of Common Stock the Authorized Officer(s) may grant, and (iii) the Authorized Officer(s) shall report
periodically to the Compensation Committee, as the case may be, regarding the nature and scope of the Awards granted pursuant to the authority delegated. In no event shall any such delegation of authority be permitted with respect to Awards to any
Executive Officer or any person subject to Section 162(m) of the Code.
12.
Adjustments
. The Board shall make or provide for such
adjustments in the numbers of shares of Common Stock covered by outstanding Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units and, if applicable, in the number of shares of Common
Stock covered by other awards granted pursuant to Section 10 hereof, in the Option Price and Base Price provided in outstanding Option Rights and Appreciation Rights, and in the kind of shares covered thereby, and in other Award terms, as is
equitably required to prevent dilution or enlargement of the rights of Participants or Optionees that otherwise would result from (i) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital
structure of the Corporation, or (ii) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or
(iii) any other corporate transaction or event having an effect similar to any of the foregoing; however, in the event of any such transaction or event, any adjustments shall be in compliance with or maintain exemption from Section 409A of
the Code. Such adjustments shall be made automatically, without the necessity of Board action, on the customary arithmetical basis in the case of any stock split, including a stock split effected by means of a stock dividend, and in the case of any
other dividend paid in shares of Common Stock; however, any adjustment shall be in compliance with or maintain exemption from Section 409A of the Code. Moreover, in the event of any such transaction or event specified in this Section 12,
the Board, in its discretion, and subject to ensuring compliance with or exemption from Section 409A of the Code, may provide in substitution for any or all outstanding Awards under this Plan such alternative consideration (including cash), if
any, as it may determine, in good faith, to be equitable in the circumstances and may require in connection therewith the surrender of all Awards so replaced. In addition, for each Option Right or Appreciation Right with an Option Price or Base
Price greater than the consideration offered in connection with any such transaction or event, the Compensation Committee may in its discretion elect to cancel such Option Right or Appreciation Right without any payment to the person holding such
Option Right or
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Appreciation Right. The Board also shall make or provide for such adjustments in the numbers of shares specified in Section 3 of this Plan as is appropriate to reflect any transaction or
event described in this Section 12;
provided
,
however
, that any such adjustment to the number specified in Section 3(b) will be made only if and to the extent that such adjustment would not cause any Option Right intended to
qualify as an Incentive Stock Option to fail so to qualify.
13.
Change in Control
.
(a) Except as otherwise provided in an Evidence of Award or by the Compensation Committee at the Date of Grant, to the extent outstanding Awards granted
under this Plan are not assumed, converted or replaced by the resulting entity in the event of a Change in Control, all outstanding Awards that may be exercised shall become fully exercisable, all restrictions with respect to outstanding Awards
shall lapse and become vested and non-forfeitable, and any specified Management Objectives with respect to outstanding Awards shall be deemed to be satisfied at target. If the Award is considered a deferral of compensation (as such term
is defined under Code Section 409A), and if the failure of the Award to be assumed, converted or replaced by the resulting entity following the Change in Control would result in a payment of deferred compensation upon the closing of such Change
in Control, except as otherwise provided in an Evidence of Award, the payment will occur within 30 days after the Change in Control, provided that such Change in Control may be treated as a change in ownership of the Corporation, a change in the
effective control of the Corporation or a change in the effective ownership of a substantial portion of the Corporations assets as described in Treasury regulations issued under Code Section 409A (each a Code Section 409A
Change in Control).
(b) Except as otherwise provided in an Evidence of Award or by the Compensation Committee, to the extent outstanding
Awards granted under this Plan are assumed, converted or replaced by the resulting entity in the event of a Change in Control, any outstanding Awards that are subject to Management Objectives shall be converted by the resulting entity, as if target
performance had been achieved as of the date of the Change in Control, and each award of: (i) Performance Shares or Performance Units shall continue to vest during the remaining Performance Period, (ii) Restricted Stock shall continue to
be subject to a substantial risk of forfeiture for the remaining applicable period, (iii) Restricted Stock Units shall continue to vest during the Restriction Period, and (iv) all other Awards shall continue to vest during the
applicable vesting period, if any.
(c) Except as otherwise provided in an Evidence of Award or by the Compensation Committee, to the extent
outstanding Awards granted under this Plan are either assumed, converted or replaced by the resulting entity in the event of a Change in Control, if a Participants service is terminated without Cause by the Corporation, any of its Subsidiaries
or the resulting entity or a Participant resigns his or her employment with an Employer for Good Reason, in either case, during the CIC Severance Protection Period, all outstanding Awards held by the Participant that may be exercised shall become
fully exercisable and all restrictions with respect to outstanding Awards shall lapse and become vested and non-forfeitable.
(d) Notwithstanding
any other provision of the Plan, in the event of a Change in Control, the Board in its discretion, may provide for the cancellation of each outstanding and unexercised Option Right or Appreciation Right in exchange for a cash payment to be made
within 60 days of the Change in Control in an amount equal to the amount by which the highest price per share of Common Stock paid for a share of Common Stock in the Change in Control exceeds the Option Price or Base Price, as applicable, multiplied
by the number of shares of Common Stock granted under the Option Right or Appreciation Right.
(e) Notwithstanding any provision of this Plan to the
contrary, to the extent an Award shall be deemed to be vested or restrictions lapse, expire or terminate upon the occurrence of a Change in
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Control and such Change in Control is not a Code Section 409A Change in Control, then even though such Award may be deemed to be vested or restrictions lapse, expire or terminate upon the
occurrence of the Change in Control or any other provision of this Plan, payment will be made, to the extent necessary to comply with the provisions of Section 409A of the Code, to the Participant on the earliest of: (i) the
Participants Separation from Service with the Corporation;
provided
,
however
, that if the Participant is a specified employee (within the meaning of Section 409A of the Code), the payment date shall be the date
that is six (6) months after the date of the Participants Separation from Service with the Employer, (ii) the date payment otherwise would have been made in the absence of any provisions in this Plan to the contrary (provided such
date is permissible under Section 409A of the Code), or (iii) the Participants death. Except as otherwise provided in an Evidence of Award or by the Compensation Committee, if any Person acquires beneficial ownership of the entirety
(i.e., 100%) of the Voting Stock of the Corporation, such acquisition shall be treated as a transaction that is governed by this Section 13 with respect to Awards granted after the Restatement Effective Date.
(f) Unless otherwise provided in a Participants employment agreement, if any, between the Participant and an Employer or any other arrangement
with the Corporation or any of its Subsidiaries to which the Participant is a party or participant, if the acceleration of exercisability under this Section 13, together with all other payments or benefits contingent on the Change in Control
within the meaning of Section 280G of the Code, results in any portion of such payments or benefits not being deductible by the Corporation as a result of the application of Section 280G of the Code, the payments or benefits shall be
reduced until the entire amount of the payments or benefits is deductible. The reduction shall be effected from Awards made under this Plan by the exclusion, first, of Awards, or portions thereof, that are not permitted to be valued under Treasury
Regulation section 1.280G-1, Q&A 24(c), or any successor provision, and, second, of Awards, or portions thereof, that are permitted to be valued under Treasury Regulation section 1.280G-1, Q&A 24(c).
14.
Detrimental Activity
.
(a) Any Evidence
of Award may provide that if the Board or the Compensation Committee determines a Participant has engaged in any Detrimental Activity, either during service with the Corporation or a Subsidiary or within a specified period after termination of such
service, then, promptly upon receiving notice of the Boards finding, the Participant shall:
(i) forfeit that Award to the
extent then held by the Participant;
(ii) in exchange for payment by the Corporation or the Subsidiary of any amount actually paid
therefor by the Participant, return to the Corporation or the Subsidiary, all shares of Common Stock that the Participant has not disposed of that had been acquired pursuant to that Award;
(iii) with respect to any shares of Common Stock acquired pursuant to that Award that were disposed of, pay to the Corporation or the
Subsidiary, in cash, the difference between:
|
(A)
|
any amount actually paid by the Participant, and
|
|
(B)
|
the Market Value Per Share of the shares of Common Stock on the date acquired; and
|
(iv)
pay to the Corporation or the Subsidiary in cash the Spread, with respect to any Option Rights or Appreciation Rights exercised where no shares of Common Stock were retained by the Participant upon such exercise.
(b) To the extent that such amounts are not paid to the Corporation or the Subsidiary, the Corporation may seek other remedies, including a set off of
the amounts so payable to it against any
B-24
amounts that may be owing from time to time by the Corporation or a Subsidiary to the Participant for any reason, including, without limitation, wages, deferred compensation or vacation pay. To
the extent that any set off under this section of the Plan causes the Participant to become subject to taxes under Section 409A of the Code, the responsibility for payment of such taxes lies solely with the Participant.
15.
Non-U.S. Participants
. In order to facilitate the making of any grant or combination of grants under this Plan, the Board or the Compensation
Committee may provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Corporation or any Subsidiary outside of the United States of America or who provide services to the Corporation or any
Subsidiary under an agreement with a foreign nation or agency, as the Board or the Compensation Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Compensation Committee may
approve such supplements to or amendments, restatements or alternative versions of this Plan (including, without limitation, sub-plans) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan
as in effect for any other purpose, and the Secretary of the Board or other appropriate officer of the Corporation may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements,
amendments or restatements, however, will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the
stockholders of the Corporation.
16.
Transferability
.
(a) Except as otherwise determined by the Board or the Compensation Committee pursuant to the provisions of Section 16(c), no Award or dividend
equivalents paid with respect to Awards made under this Plan shall be transferable by the Participant except by will or the laws of descent and distribution, and may be otherwise transferred in a manner that protects the interest of the Corporation
as the Board or the Compensation Committee may determine;
provided
, that if so determined by the Compensation Committee, each Participant may, in a manner established by the Board or the Compensation Committee, designate a beneficiary to
exercise the rights of the Participant with respect to any Award upon the death of the Participant and to receive shares of Common Stock or other property issued upon such exercise.
(b) The Compensation Committee or an Authorized Officer may specify at the Date of Grant that part or all of the shares of Common Stock that are
(i) to be issued or transferred by the Corporation upon the exercise of Option Rights or Appreciation Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon payment under any grant of Performance
Shares or Performance Units or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 6 of this Plan, will be subject to further restrictions on transfer.
(c) Notwithstanding Section 16(a), the Board or the Compensation Committee may determine that Awards (other than Incentive Stock Options) may be
transferable by a Participant, without payment of consideration therefor by the transferee, only to any one or more family members (as defined in the General Instructions to Form S-8 under the Securities Act of 1933) of the Participant;
provided
,
however
, that (i) no such transfer shall be effective unless reasonable prior notice thereof is delivered to the Corporation and such transfer is thereafter effected in accordance with any terms and conditions that shall
have been made applicable thereto by the Board or the Compensation Committee, and (ii) any such transferee shall be subject to the same terms and conditions hereunder as the Participant.
17.
Withholding Taxes
. To the extent that the Corporation is required to withhold federal, state, local or foreign taxes in connection with any
payment made or benefit realized by a Participant or other
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person under this Plan, and the amounts available to the Corporation for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory to the Corporation for payment of the balance of such taxes required to be withheld, which arrangements (in the discretion of the Compensation Committee) may include
relinquishment of a portion of such benefit. If a Participants benefit is to be received in the form of shares of Common Stock, and such Participant fails to make arrangements for the payment of tax, the Corporation shall withhold such shares
of Common Stock having a value equal to the amount required to be withheld. Notwithstanding the foregoing, when a Participant is required to pay the Corporation an amount required to be withheld under applicable income and employment tax laws, the
Committee may in its discretion permit the Participant to satisfy the obligation, in whole or in part, by electing to have withheld, from the shares required to be delivered to the Participant, shares of Common Stock having a value equal to the
amount required to be withheld (except in the case of Restricted Stock where an election under Section 83(b) of the Code has been made), or by delivering to the Corporation other shares of Common Stock held by such Participant. In no event
shall the Market Value Per Share of the shares of Common Stock to be withheld pursuant to this section to satisfy applicable withholding taxes in connection with the benefit exceed the minimum amount of taxes required to be withheld or such other
amount that will not result in a negative accounting impact. Participants shall also make such arrangements as the Corporation may require for the payment of any withholding tax obligation that may arise in connection with the disposition of shares
of Common Stock acquired upon the exercise of Option Rights.
18.
Compliance with Section
409A of the Code
.
(a) To the extent applicable, it is intended that this Plan and any grants made hereunder are exempt from Section 409A of the Code or are
structured in a manner that would not cause a Participant to be subject to taxes and interest pursuant to Section 409A of the Code. This Plan and any grants made hereunder shall be administrated in a manner consistent with this intent, and any
provision that would cause this Plan or any grant made hereunder to become subject to taxation under Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be
retroactive to the extent permitted by Section 409A of the Code and may be made by the Corporation without the consent of Participants).
(b)
In order to determine for purposes of Section 409A of the Code whether a Participant is employed by a member of the Corporations controlled group of corporations under Section 414(b) of the Code (or by a member of a group of trades
or businesses under common control with the Corporation under Section 414(c) of the Code) and, therefore, whether the shares of Common Stock that are or have been purchased by or awarded under this Plan to the Participant are shares of
service recipient stock within the meaning of Section 409A of the Code:
(i) In applying Code
Section 1563(a)(1), (2) and (3) for purposes of determining the Corporations controlled group under Section 414(b) of the Code, the language at least 50 percent is to be used instead of at least 80
percent each place it appears in Code Section 1563(a)(1), (2) and (3); and
(ii) In applying Treasury Regulation
Section 1.414(c)-2 for purposes of determining trades or businesses under common control with the Corporation for purposes of Section 414(c) of the Code, the language at least 50 percent is to be used instead of at least
80 percent each place it appears in Treasury Regulation Section 1.414(c)-2.
19.
Effective Date and Term of Plan
.
(a) This Plan originally became effective as of the Effective Date and, subject to approval by the Companys stockholders, the amended and restated
Plan will become effective as of the
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Restatement Effective Date. No grant will be made under this Plan more than ten (10) years after the Restatement Effective Date, but all grants made on or prior to such date will continue in
effect thereafter subject to the terms thereof and of this Plan.
(b) Upon the Effective Date, no further grants of awards are permitted under the
Predecessor Plans. All awards under the Predecessor Plans that remain outstanding shall be administered and paid in accordance with the provisions of the applicable Predecessor Plan and award agreement.
20.
Amendments and Termination
.
(a) The
Board may at any time and from time to time, to the extent permitted by Section 409A of the Code, amend, suspend or terminate this Plan in whole or in part;
provided
,
however
, that if an amendment to this Plan (i) would
materially increase the benefits accruing to Participants under this Plan, (ii) would materially increase the number of securities which may be issued under this Plan, (iii) would materially modify the requirements for participation in
this Plan, or (iv) must otherwise be approved by the stockholders of the Corporation in order to comply with applicable law or the rules of the New York Stock Exchange or, if the shares of Common Stock are not traded on the New York Stock
Exchange, the principal national securities exchange upon which the shares of Common Stock are traded or quoted, then, such amendment will be subject to stockholder approval and will not be effective unless and until such approval has been obtained.
(b) Termination of this Plan will not affect the rights of Participants or their successors under any Awards outstanding hereunder and not
exercised in full on the date of termination.
(c) Except in connection with a corporate transaction or event described in Section 12, the
Board or the Compensation Committee will not, without the further approval of the stockholders of the Corporation, authorize the amendment of any outstanding Option Right or Appreciation Right to reduce the Option Price or Base Price, respectively.
No Option Right or Appreciation Right will be cancelled and replaced with awards having a lower Option Price or Base Price, respectively, or for another award, or for cash without further approval of the stockholders of the Corporation, except in
connection with a corporate transaction or event described in Section 12. Furthermore, no Option Right or Appreciation Right will provide for the payment, at the time of exercise, of a cash bonus or grant of Option Rights, Appreciation Rights,
Performance Shares, Performance Units, or grant or sale of Restricted Stock, Restricted Stock Units or other awards pursuant to Section 10 of this Plan, without further approval of the stockholders of the Corporation. This Section 20(c) is
intended to prohibit the repricing of underwater Option Rights or Appreciation Rights without stockholder approval and will not be construed to prohibit the adjustments provided for in Section 12 of this Plan.
(d) If permitted by Section 409A of the Code, in case of termination of service by reason of death, Disability or Normal Retirement, or in the case
of unforeseeable emergency or other special circumstances, of a Participant who holds an Option Right or Appreciation Right not immediately exercisable in full, or any shares of Restricted Stock as to which the substantial risk of forfeiture or the
prohibition or restriction on transfer has not lapsed, or any Restricted Stock Units as to which the Restriction Period has not been completed, or any Performance Shares or Performance Units which have not been fully earned, or any other awards made
pursuant to Section 10 subject to any vesting schedule or transfer restriction, or who holds shares of Common Stock subject to any transfer restriction imposed pursuant to Section 16 of this Plan, the Compensation Committee may, in its
sole discretion, accelerate the time at which such Option Right, Appreciation Right or other award may be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such
Restriction Period will end or the time at which such Performance Shares or Performance Units will be deemed to have been fully earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under
any such award,
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except in the case of a Qualified Performance-Based Award where such action would result in the loss of the otherwise available exemption of the Award under Section 162(m) of the Code.
(e) Subject to Section 20(c) hereof, the Compensation Committee may amend the terms of any Award theretofore granted under this Plan prospectively
or retroactively, except in the case of a Qualified Performance-Based Award where such action would result in the loss of the otherwise available exemption of such Award under Section 162(m) of the Code. In such case, the Compensation Committee
will not make any modification of the Management Objectives or the level or levels of achievement with respect to such Qualified Performance-Based Award. Subject to Section 12 above, no amendment shall materially impair the rights of any
Participant without his or her consent.
21.
Substitute Awards for Awards Granted by Other Entities
. Substitute Awards may be granted under
this Plan for grants or awards held by Employees of a company or entity who become Employees of the Corporation or a Subsidiary as a result of the acquisition, merger or consolidation of the employer company by or with the Corporation or a
Subsidiary. Except as otherwise provided by applicable law and notwithstanding anything in the Plan to the contrary, the terms, provisions and benefits of the Substitute Awards so granted may vary from those set forth in or required or authorized by
this Plan to such extent as the Compensation Committee at the time of the grant may deem appropriate to conform, in whole or part, to the terms, provisions and benefits of grants or awards in substitution for which they are granted.
22.
Governing Law
. This Plan and all grants and Awards and actions taken thereunder shall be governed by and construed in accordance with the
internal substantive laws of the State of Delaware.
23.
Miscellaneous Provisions
.
(a) The Corporation will not be required to issue any fractional shares of Common Stock pursuant to this Plan. The Board or the Compensation Committee
may provide for the elimination of fractions or for the settlement of fractions in cash.
(b) This Plan will not confer upon any Participant any
right with respect to continuance of employment or other service with the Corporation or any Subsidiary, nor will it interfere in any way with any right the Corporation or any Subsidiary would otherwise have to terminate such Participants
employment or other service at any time.
(c) To the extent that any provision of this Plan would prevent any Option Right that was intended to
qualify as an Incentive Stock Option from qualifying as such, that provision will be null and void with respect to such Option Right. Such provision, however, will remain in effect for other Option Rights and there will be no further effect on any
provision of this Plan.
(d) The Compensation Committee or an Authorized Officer may provide for termination of an Award in the case of termination
of employment or service of a Participant or any other reason;
provided
,
however
, that all Awards of a Participant will be immediately forfeited and cancelled to the extent the Participants employment or service has been
terminated for Cause, and the Participant will have no further rights in respect of such Awards.
(e) No Award under this Plan may be exercised by
the holder thereof if such exercise, and the receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Compensation Committee, contrary to law or the regulations of any duly constituted authority having jurisdiction
over this Plan.
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(f) Except as required by Section 409A of the Code in connection with a Separation from Service,
absence on leave approved by a duly constituted officer of the Corporation or any of its Subsidiaries shall not be considered interruption or termination of service of any Employee for any purposes of this Plan or Awards granted hereunder, except
that no Awards may be granted to an Employee while he or she is absent on leave.
(g) Except as specifically provided in Section 9(h), no
Participant shall have any rights as a stockholder with respect to any shares of Common Stock subject to Awards granted to him or her under this Plan prior to the date as of which he or she is actually recorded as the holder of such shares upon the
stock records of the Corporation.
(h) The Compensation Committee may condition the grant of any Award or combination of Awards authorized under
this Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Corporation or a Subsidiary to the Participant.
(i) Except with respect to Option Rights and Appreciation Rights, the Compensation Committee may permit Participants to elect to defer the issuance of
shares of Common Stock or the settlement of Awards in cash under this Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan. The Compensation Committee also may provide that deferred issuances and
settlements include the payment or crediting of dividend equivalents or interest on the deferral amounts. All elections and deferrals permitted under this provision shall comply with Section 409A of the Code, including setting forth the time
and manner of the election (including a compliant time and form of payment), the date on which the election is irrevocable, and whether the election can be changed until the date it is irrevocable.
(j) Any Award granted under the terms of this Plan may specify in the Evidence of Award that the Participant is subject to restrictive covenants
including, but not limited to, covenants not to compete and covenants not to solicit, unless otherwise determined by the Compensation Committee.
(k) Participants shall provide the Corporation with a completed, written election form setting forth the name and contact information of the person who
will have beneficial ownership rights of Awards made to the Participant under this Plan upon the death of the Participant.
(l) If any provision of
this Plan is or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify this Plan or any Award under any law deemed applicable by the Board or the Compensation Committee, such provision shall be construed or deemed amended
or limited in scope to conform to applicable laws or, in the discretion of the Board or the Compensation Committee, it shall be stricken and the remainder of this Plan shall remain in full force and effect.
(m)
Clawback/Recoupment of Awards
. All Awards granted under the Plan will be subject to deduction, forfeiture, recoupment or similar requirement
in accordance with any clawback policy that may be implemented by the Company from time to time, including such policies that may be implemented after the date an Award is granted, pursuant to the listing standards of any national securities
exchange or association on which the Companys securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law, or other agreement or arrangement with a Participant.
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SPRINT CORPORATION
6200 SPRINT PARKWAY
OVERLAND PARK, KS 66251
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SPRINT CORPORATION
YOUR VOTE IS IMPORTANT
Please take a moment now to vote the shares of Sprint Corporation common stock
for the Tuesday, November 1, 2016, Annual Meeting of Stockholders.
YOU CAN VOTE TODAY IN ONE OF FOUR WAYS:
1. Vote by Telephone
Please
call toll-free at 1-800-690-6903
from any touch-tone
telephone
and follow the instructions. Have your proxy card available when you call and use the Company Number and Account Number shown on this proxy card.
OR
2. Vote by Internet
Please access
www.proxyvote.com
or scan
the QR Barcode above and follow the on-screen instructions. Have this proxy card available when you access the web page, and use the Company Number and Account Number shown on your proxy card.
You may vote by telephone or Internet 24 hours a day, 7 days a week until 11:59 p.m.
Eastern Time on October 31, 2016 (October 29, 2016 for shares held through our 401(k) plan). Your telephone or Internet vote authorizes the named proxies to vote the shares in the same manner as if you had executed a proxy card.
OR
3. Vote by Mail
Please complete, sign, date and return the proxy
card in the envelope provided to: Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 to arrive no later than the closing of the polls on October 31, 2016.
OR
4. During The Meeting
- Go to
www.virtualshareholdermeeting.com/SprintCorp16
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E13220-P82448-Z68563
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY