--------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------------------------------------------
FORM 8-K
--------------------------------------------------------------------------------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 25, 2010
--------------------------------------------------------------------------------
SPRINT NEXTEL CORPORATION
(Exact name of Registrant as specified in its charter)
--------------------------------------------------------------------------------
Kansas 1-04721 48-0457967
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
6200 Sprint Parkway, Overland Park, Kansas 66251
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (800) 829-0965
(Former name or former address, if changed since last report)
--------------------------------------------------------------------------------
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Short-Term Incentive Compensation Plan
On February 26, 2010, the Compensation Committee of the Board of Directors
of Sprint Nextel Corporation (the "Company") established the performance
objectives and other terms of the Company's 2010 Short-Term Incentive Plan for
officers and other eligible employees of the Company (the "2010 STI Plan"). The
Compensation Committee has established two six-month performance periods. The
first period is from January 1, 2010 through June 30, 2010 and the second is
from July 1, 2010 through December 31, 2010. Each performance period has
discrete performance objectives, and employees must be employed on December 31,
2010 in order to be eligible to receive compensation for both periods.
The 2010 STI Plan provides for a payment of incentive compensation to
officers and other eligible employees based on the achievement of the following
specified performance objectives during the first-half of 2010: adjusted OIBDA
(operating income before depreciation and amortization), weighted at 25%; a
measure of retention of our post-paid wireless subscribers, which we refer to as
post-paid churn, weighted at 20%; net service revenue (operating revenue less
equipment revenue), weighted at 45%; and our subscribers on Clearwire's 4G
network, which we call 4G subscribers, weighted at 10%. The Compensation
Committee did not yet set performance objectives for the second-half of 2010.
Each of the performance objectives will have a threshold, target and
maximum level of payment opportunity. The maximum payment opportunity is equal
to 200% of the individual's target opportunity. The award payment under the 2010
STI Plan will be determined based on the Company's results using three
variables: (1) the individual's annual incentive target opportunity, which is
based on a percentage of the individual's base salary; (2) the Compensation
Committee's assessment and certification of Company performance compared with
each of the above-referenced performance objectives; and (3) relative weightings
for each performance objective. The determination of payments for certain
executive officers will be made so as to comply with Section 162(m) of the
Internal Revenue Code.
Mr. Hesse's employment agreement provides for a target opportunity under
the short-term incentive plan of not less than 170% of base salary - or
$2,040,000 for 2010 - with actual payouts under the 2010 STI Plan limited to
200% of his targeted opportunity. Mr. Brust's employment agreement provides for
a target opportunity under the STI Plan of not less than 130% of base salary -
or $1,300,000 for 2010. Mr. Cowan's employment agreement provides for a target
opportunity under STI Plan of not less than 125% of base salary - or $906,250
for 2010. Mr. Elfman's employment agreement provides for a target opportunity
under STI Plan of not less than 125% of base salary - or $812,500 for 2010. Mr.
Robert L. Johnson's employment agreement provides for a target opportunity under
the STI Plan of not less than 100% of base salary - or $460,000 for 2010.
The actual incentive amounts paid under the 2010 STI Plan will be based on
the Company's actual results during 2010 in relation to the established
performance objectives, and these payments may be greater or less than the
target amounts that have been established.
Long-Term Incentive Compensation Plan for Mr. Brust
On February 25, 2010, the Compensation Committee granted the 2010 awards
for Mr. Brust under the Company's 2010 Long-Term Incentive Plan (the "2010 LTI
Plan"). The Compensation Committee has not yet set any of the terms of the 2010
LTI Plan with respect to any other officers or other eligible employees of the
Company.
Pursuant to the terms of his amended employment agreement, dated December
22, 2009, Mr. Brust's 2010 LTI Plan target opportunity of $3 million is
allocated equally in value in stock options and restricted stock units all of
which will vest on May 1, 2012, subject to compliance with non-compete and
non-solicitation covenants under his employment agreement. The number of stock
options granted is based on the value of each option determined using the
Black-Scholes valuation model. The number of restricted share units awarded is
based on the 30-day average trading price of the Company's common stock.
The stock option grants and restricted stock unit awards, as applicable,
will be made pursuant to the Company's 2007 Omnibus Incentive Plan.
Special Payment
On February 25, 2010, the Compensation Committee also approved a lump-sum
payment to Mr. Elfman in the amount of $300,000 related to his successful
leadership of the Ericsson transaction, which was completed in 2009.
--------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SPRINT NEXTEL CORPORATION
Date: March 3, 2010 /s/ Timothy O'Grady
By: Timothy O'Grady
Assistant Secretary