Sprint - Nextel 2005 Annual Report Download - page 145

SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Common Stock Reserved for Future Grants
As of December 31, 2005, Series 1 common stock reserved for future grants under plans providing for the grant
of stock options and other equity-based awards, future grants under the employees stock purchase plan or future
issuances under various other arrangements included:
Shares
(in millions)
Employee stock purchase plan ........................................................ 25.6
Employee savings plans ............................................................. 22.4
Automatic dividend reinvestment plan .................................................. 2.3
Officer and key employees’ and directors’ stock options and other equity-based awards ........... 109.5
Conversion of mandatorily redeemable preferred stock ..................................... 8.0
5.25% convertible debt conversion rights ................................................ 10.3
Conversion of non-voting common stock ................................................ 37.6
Other ............................................................................ 0.1
215.8
Note 17. Stock Plans
Management Incentive Stock Option Plan
Under the Management Incentive Stock Option Plan, or MISOP, before 2003 we granted stock options to
employees eligible to receive annual incentive compensation. Eligible employees could elect to receive stock
options in lieu of a portion of their target incentive under our annual incentive compensation plans. The options
generally became exercisable on December 31 of the year granted and have a maximum term of 10 years. Under
the MISOP, we also granted stock options to executives in lieu of long-term incentive compensation, or LTIP-
MISOP options. The LTIP-MISOP options generally became exercisable on the third December 31 following the
grant date and have a maximum term of 10 years. MISOP options were granted with exercise prices equal to the
market price of the underlying common stock on the grant date. No new options may be granted under this plan
after April 2005. As of December 31, 2005, options to buy approximately 40.0 million common shares were
outstanding.
Long-Term Stock Incentive Program
Under the 1997 Long-Term Stock Incentive Program, or the 1997 Program, we can grant stock options, restricted
stock and restricted stock units and other equity based awards to directors and employees. In the 1997 Program
the number of shares available for grant increases each year until 2007. No awards may be granted under the plan
after April 2007. On January 1, 2006, the number of shares authorized by the 1997 Program increased by
approximately 43.8 million shares. As of December 31, 2005, this plan authorized equity-based awards for
approximately 146.0 million common shares, and 61.0 million common shares remained available.
Employees and directors who are granted restricted stock units are not required to pay for the shares but must
remain employed with us, or continue to serve as a member of our board of directors, until the restrictions on the
shares lapse. In addition, beginning with the 2005 awards, the number of restricted stock units granted is based
on performance criteria as well. The 2005 awards vest 100% three years from the date of grant.
The 2005 stock option awards for executives holding titles of Senior Vice President or above, including our
Chief Executive Officer, have a strike price equal to 110% of the market value of the underlying stock on the
grant date. All other executives received stock options with a strike price equal to 100% of fair market value on
the grant date. The 2005 stock option award for all participants will vest 25% per year on each of the
anniversaries of the date of grant and will have a maximum term of 10 years.
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