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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
For the fiscal year ended December 31, 2011
or
Commission file number 1-04721
SPRINT NEXTEL CORPORATION
(Exact name of registrant as specified in its charter)
Registrant's telephone number, including area code: (800) 829-0965
Securities registered pursuant to Section 12(b) of the Act:
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
p
eriod that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes No
Aggregate market value of voting and non-voting common stock equity held by non-affiliates at June 30, 2011 was $16,112,904,505
COMMON SHARES OUTSTANDING AT FEBRUARY 20, 2012:
Documents incorporated by reference
Portions of the registrant's definitive proxy statement filed under Regulation 14A promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, which definitive
p
roxy statement is to be filed within 120 days after the end of registrant's fiscal year ended December 31, 2011, are incorporated by reference in Part III hereof.
Toggle SGML Header (+)
Section 1: 10-K (FORM 10K)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
KANSAS 48-0457967
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
6200 Sprint Parkway, Overland Park, Kansas 66251
(Address of principal executive offices) (Zip Code)
Title of each class Name of each exchange on which registered
Series 1 common stock, $2.00 par value New York Stock Exchange
Guarantees of Sprint Capital Corporation 6.875% Notes due 2028 New York Stock Exchange
Large accelerated filer Accelerated filer
Non-accelerated filer (Do not check if smaller reporting company) Smaller reporting company
VOTING COMMON STOCK
Series 1 2,997,386,429

Table of contents

  • Page 1
    ... fiscal year ended December 31, 2011 or  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-04721 SPRINT NEXTEL CORPORATION (Exact name of registrant as specified in its charter) KANSAS (State or...

  • Page 2
    ... Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures about Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial...

  • Page 3
    ...ownership of extensive wireless networks, an all-digital global long distance network and a Tier 1 Internet backbone. We offer wireless and wireline voice and data transmission services to subscribers in all 50 states, Puerto Rico, and the U.S. Virgin Islands under the Sprint corporate brand, which...

  • Page 4
    ...Shrinkage service where bills are reduced after six on-time payments. Virgin Mobile â„¢ serves subscribers who are device and data-oriented with Beyond Talk plans and our broadband plan, Broadband2Go, that offer subscribers control, flexibility and connectivity through various communication vehicles...

  • Page 5
    ... Nextel platform subscribers to other offerings on our Sprint platform, which includes future ® ® offerings on our multi-mode network, such as Sprint Direct Connect. We market our prepaid services under the Boost Mobile , Virgin Mobile , and Assurance Wireless brands as a means to provide value...

  • Page 6
    ...business and consumer subscribers. In addition, we provide voice, data and IP communication services to our Wireless segment, and IP and other services to cable Multiple System Operators (MSOs). Cable MSOs resell our local and long distance services and use our back office systems and network assets...

  • Page 7
    ... long distance voice services have experienced an industry-wide trend of lower revenue from lower prices and increased competition from other wireline and wireless communications companies, as well as cable MSOs and Internet service providers. Some competitors are targeting the high-end data market...

  • Page 8
    ...new rules regarding interference in the 800 MHz band and a comprehensive plan to reconfigure the 800 MHz band (the "Report and Order"). The Report and Order provides for the exchange of a portion of our 800 MHz FCC spectrum licenses, and requires us to fund the cost incurred by public safety systems...

  • Page 9
    ... network in November 2011. Our subscribers with mobile phones equipped with the necessary software who live, work or visit New York City are able to receive wireless emergency alerts. Tower Siting Wireless systems must comply with various federal, state and local regulations that govern the siting...

  • Page 10
    ... voice telephony market. Our communications and back-office services enable the cable companies to provide competitive local and long distance telephone services primarily in a VoIP format to their end-user customers. Voice over Internet Protocol We offer VoIP-based services to business subscribers...

  • Page 11
    ..., the LECs partner with other entities to offer "free" or almost free services (such as conference calling and chat lines) to end users; these services (and payments to the LECs' partners) are financed through the assessment of high access charges on the end user's long distance or wireless carrier...

  • Page 12
    ... initial Clearwire transaction, Sprint is required to phase out its high-cost USF support to zero by 2013, and that process is currently being implemented on a state-by-state basis. Virgin Mobile is designated as a Lifeline-only ETC in 31 jurisdictions, providing service under our Assurance Wireless...

  • Page 13
    ... 8-K, and amendments to these reports filed with or furnished to the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934. These documents may be accessed free of charge on our website at the following address: http://investors.sprint.com. These documents are available...

  • Page 14
    ... to July 2007. He held several key positions with BellSouth Corporation from 1996 to January 2007, including Chief Planning and Development Officer, Chief Field Operations Officer, President - Marketing and Product Management and President - Interconnection Services. He was previously an associate...

  • Page 15
    .... He served as President - iDEN from June 2008 to August 2009. He served in various executive positions including Product Development and Management, Sales, Marketing and General Management since 1997. 2011 58 Charles R. Wunsch 2008 56 Steven L. Elfman 2008 56 Matthew Carter 2010 51 Ryan...

  • Page 16
    ...compete successfully for new subscribers and reduce our rate of churn depends on our successful execution of marketing and sales strategies, including the acceptance of our value proposition; service delivery and customer care activities, including new account set up and billing; and our credit and...

  • Page 17
    ... to meet future advances in competing technologies on a timely basis, or at an acceptable cost, we may not be able to compete effectively and could lose subscribers to our competitors. Some competitors and new entrants may be able to offer subscribers network features or products and services not...

  • Page 18
    ... revenue per subscriber, subscriber churn, ability to attract new subscribers, and operating costs. For example, our prepaid services compete with several carriers, including Metro PCS and Leap Wireless, which offer competitively-priced prepaid calling plans that include unlimited long distance...

  • Page 19
    ... such devices for a period of time after that, as we transition to LTE. The failure to successfully design, build and deploy our LTE network, or a loss of or inability to access Clearwire's spectrum could increase subscriber losses, increase our costs of providing services or increase our churn...

  • Page 20
    ... common stock; • any significant change in our board of directors or management; • litigation; • changes in governmental regulations or approvals; and • perceptions of general market conditions in the technology and communications industries, the U.S. economy and global market conditions. 18

  • Page 21
    ... controlling access to more cell sites, enabling them to control usage and rates, which could negatively affect our revenues and profitability. We provide wholesale services under long-term contracts to cable television operators which enable these operators to provide consumer and business digital...

  • Page 22
    ...on intellectual property rights owned by others. Some of our products and services use intellectual property that we own. We also purchase products from suppliers, including device suppliers, and outsource services to service providers, including billing and customer care functions, that incorporate...

  • Page 23
    ... and we may be subject to legal claims if there is loss, disclosure or misappropriation of or access to our subscribers' or our own information or other breaches of our information security. We make extensive use of online services and centralized data processing, including through third-party 21...

  • Page 24
    ... Clearwire's annual report on Form 10-K for the year ended December 31, 2011. The contents of Clearwire's SEC filings are expressly not incorporated by reference into this Form 10-K. Our investment in Clearwire exposes us to risks because we do not control the board, determine the strategies, manage...

  • Page 25
    ..., and employ Clearwire's employees or officers. These shareholders or their affiliates may deploy competing wireless broadband networks or purchase broadband services from other providers. Any such actions could have a material adverse effect on Clearwire's business, financial condition, results...

  • Page 26
    ... lease space for base station towers and switch sites for our wireless network. Properties utilized by our Wireline segment generally consist of land, buildings, switching equipment, digital fiber optic network and other transport facilities. We have been granted easements, rights-of-way and rights...

  • Page 27
    ...voting common stock outstanding. The high and low Sprint Series 1 common stock prices, as reported on the NYSE composite, are as follows: 2011 Market Price High Low End of Period High 2010 Market Price Low End of Period Series 1 common stock First quarter Second quarter Third quarter Fourth quarter...

  • Page 28
    ...Inc. (Virgin Mobile) in 2009 and Affiliates in 2007 and 2009, as well as the November 2008 contribution of our next generation wireless network to Clearwire. The acquired companies' results of operations subsequent to their acquisition dates are included in our consolidated financial statements. The...

  • Page 29
    ...plan with Shrinkage service where bills are reduced after six on-time payments. Virgin Mobile serves subscribers â„¢ who are device and data-oriented with Beyond Talk plans and our broadband plan, Broadband2Go, that offer consumers control, flexibility, and connectivity through various communication...

  • Page 30
    ... of Sprint Direct Connect , are expected to continue through early 2014. We expect the plan to bring financial benefit to the Company through migration to one common network, which is expected to reduce network maintenance and operating costs through capital efficiencies, reduced energy costs, lower...

  • Page 31
    ...below under "Results of Operations," Wireless segment earnings represented approximately 84% of our total consolidated segment earnings in 2011. The wireless industry is subject to competition to retain and acquire subscribers of wireless services. Most markets in which we operate have high rates 29

  • Page 32
    ... rate plans providing simplicity and value. The Company has significantly improved net postpaid subscriber results subsequent to the first quarter 2009 as a result of actions taken to improve customer service, device selection and value-oriented service offerings. In conjunction with Network...

  • Page 33
    .... (iPCS) and Virgin Mobile acquisitions in the fourth quarter 2009. Customer relationships are amortized using the sum-of-the-years'-digits method, resulting in higher amortization rates in early periods that decline over time. Other, net The following table provides additional information of items...

  • Page 34
    ... that provides high-speed residential and mobile Internet access services and residential voice services in communities throughout the country. Clearwire is an early stage company, and as such, heavily invested in building its network and acquiring other assets necessary to expand its WiMAX business...

  • Page 35
    ... held non-controlling interest in Virgin Mobile. The loss on early retirement of debt in 2011 was due to the redemption of all of our outstanding $2.0 billion Sprint Capital Corporation 8.375% senior notes due March 2012. Income Tax (Expense) Benefit The consolidated effective tax rate was an...

  • Page 36
    ... which generally consist of per-minute usage fees and roaming fees paid to other carriers. The remaining costs associated with operating the Wireless segment include the costs to operate our customer care organization and administrative support. Wireless service revenue, costs to acquire subscribers...

  • Page 37
    ..., roaming, equipment protection, late payment and early termination charges and certain regulatory related fees, net of service credits. The ability of our Wireless segment to generate service revenues is primarily a function of: • • revenue generated from each subscriber, which in turn is...

  • Page 38
    ... number of subscribers in the applicable service category. Changes in average monthly service revenue reflect subscribers for either the postpaid or prepaid service category who change rate plans, the level of voice and data usage, the amount of service credits which are offered to subscribers...

  • Page 39
    ... their new service category. There is no net effect for such subscriber changes to the total wireless net additions (losses) or end of period subscribers. Includes subscribers with PowerSource devices, which operate seamlessly between our networks. In the first quarter 2009, Boost Monthly Unlimited...

  • Page 40
    ... churn as of the end of each quarterly period for the past twelve quarters. Quarter Ended March 31, 2009 June 30, 2009 September 30, 2009 December 31, 2009 March 31, 2010 June 30, 2010 September 30, 2010 December 31, 2010 March 31, 2011 June 30, 2011 September 30, 2011 December 31, 2011 ARPU Sprint...

  • Page 41
    ... customer experience and customer care satisfaction. We plan to migrate Nextel platform push-to-talk subscribers by providing competitive offerings on the Sprint platform, which includes future offerings on our multi-mode network, such as Sprint Direct Connect. Retail Prepaid Subscribers-We added...

  • Page 42
    ... generally consists of per-minute use fees charged by wireline providers for calls terminating on their networks, which fluctuate in relation to the level and duration of those terminating calls; long distance costs paid to the Wireline segment; costs to service and repair devices; regulatory fees...

  • Page 43
    ...but some cost elements do not fluctuate in the short term with the changes in our customer usage. Our wireline services provided to our Wireless segment are generally accounted for based on market rates, which we believe approximate fair value. The Company generally re-establishes these rates at the...

  • Page 44
    ...of customer churn driven by the focus to no longer provide frame relay and ATM services in each of those periods. Data revenues generated from the provision of services to the Wireless segment represented 35% of total data revenue in 2011 as compared to 27% in 2010 and 19% in 2009. Internet Revenues...

  • Page 45
    ...capitalized interest on qualifying activities associated with Network Vision primarily related to the carrying value of spectrum licenses not yet placed in service. These increases in use of cash were offset by increases of $825 million in proceeds from sales and maturities of short-term investments...

  • Page 46
    ... Report and Order. These decreases were partially offset by reduced proceeds from sales and maturities of short-term investments of $418 million and increased capital expenditures of $332 million to add coverage and capacity to our wireless networks. Sprint also increased its investment in Clearwire...

  • Page 47
    ... in our networks, and FCC license acquisitions; • anticipated payments under the Report and Order, as supplemented; • any additional contributions we may make to our pension plan; • scheduled debt service requirements; • additional investments, if any, we may choose to make in Clearwire; and...

  • Page 48
    ... current ratings do not accelerate scheduled principal payments of our existing debt. However, downgrades may cause us to incur higher interest costs on our credit facilities and future borrowings, if any, and could negatively impact our access to the public capital markets. The terms and conditions...

  • Page 49
    ... future interest rates. Represents capital lease payments including interest and financing obligation related to the sale and subsequent leaseback of multiple tower sites. Includes future lease costs related to cell and switch sites, real estate, network equipment and office space. Includes service...

  • Page 50
    ... recovery; financial condition, liquidity, and near-term prospects of the investee, specific events, and other factors. At each financial reporting measurement date, we evaluate the excess, if any, of Sprint's carrying value over the estimated fair value of our investment in Clearwire to determine...

  • Page 51
    ... cell site development costs and software in development, are periodically assessed to determine recoverability. Network equipment and cell site development costs are expensed whenever events or changes in circumstances cause the Company to conclude the assets are no longer needed to meet management...

  • Page 52
    ... an extended period of time, we would likely consider the decline to be indicative of a decline in the estimated fair value at the reporting unit level. Differences in the Company's actual future cash flows, operating results, growth rates, capital expenditures, cost of capital and discount rates as...

  • Page 53
    ... of our competitors to offer products and services at lower prices due to lower cost structures; the effects of vigorous competition on a highly penetrated market, including the impact of competition on the price we are able to charge subscribers for services and equipment we provide and our ability...

  • Page 54
    ...stock, current economic conditions and our ability to access capital; the impact of unrelated parties not meeting our business requirements, including a significant adverse change in the ability or willingness of such parties to provide devices or infrastructure equipment for our networks; the costs...

  • Page 55
    ... point change in interest rates would have an annual pre-tax impact of $10 million on our consolidated statements of operations and cash flows for the year ended December 31, 2011. We also perform a sensitivity analysis on the fair market value of our outstanding debt. A 10% decline in market...

  • Page 56
    ... 31, 2011 in providing reasonable assurance that information required to be disclosed in reports we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions...

  • Page 57
    ... 16(a) Beneficial Ownership Reporting Compliance" in our proxy statement relating to our 2012 annual meeting of shareholders, which will be filed with the SEC. We have adopted the Sprint Nextel Code of Conduct, which applies to all of our directors, officers and employees. The Code of Conduct is...

  • Page 58
    ... and "Board Operations-Independence of Directors" in our proxy statement relating to our 2012 annual meeting of shareholders, which will be filed with the SEC. Principal Accountant Fees and Services The information required by this item is incorporated by reference to the information set forth under...

  • Page 59
    ... Provision regarding Kansas Control Share Acquisition Act is in Article 2, Section 2.5 of the Bylaws. Provisions regarding Stockholders' Meetings are set forth in Article 3 of the Bylaws. See Exhibit 3.2 Indenture, dated as of October 1, 1998, among Sprint Capital Corporation, Sprint Corporation and...

  • Page 60
    ... and The Bank of New York Mellon Trust Company, N.A. Registration Rights Agreement, dated November 9, 2011, among Sprint Nextel Corporation and J.P. Morgan Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Citigroup Global Markets, Inc., Goldman, Sachs & Co...

  • Page 61
    ... Agreement (awarding stock options) under the 2010 Long-Term Incentive Plan for all other executive officers (other than Robert H. Brust) Form of Award Agreement (awarding restricted stock units) under the 2010 Long-Term Incentive Plan for executive officers with Nextel employment agreements Form of...

  • Page 62
    ... other executive officers Summary of 2011 Long-Term Incentive Plan Summary of 2011 Short-Term Incentive Plan Amended Summary of 2011 Short-Term Incentive Plan Form of Stock Option Agreement under the Stock Option Exchange Program (for certain Nextel Communication Inc. employees) Form of Stock Option...

  • Page 63
    ...regarding retention cash award Employment Agreement, effective September 26, 2011, between William M. Malloy and Sprint Nextel Corporation Form of Award Agreement (awarding stock options) under the 2009 Long-Term Incentive Plan for executive officers with Nextel employment agreements 8-K 001-04721...

  • Page 64
    ... stock options) under the 2009 Long-Term Incentive Plan for all other executive officers Sprint Nextel Deferred Compensation Plan, as amended and restated effective November 17, 2011 Executive Deferred Compensation Plan, as amended and restated effective January 1, 2008 Director's Deferred Fee Plan...

  • Page 65
    ... * * * _____ * Filed or furnished, as required. ** Schedules and/or exhibits not filed will be furnished to the SEC upon request. Sprint will furnish to the SEC, upon request, copies of instruments defining the rights of holders of long-term debt not exceeding 10% of the total assets of Sprint. 63

  • Page 66
    ...undersigned, thereunto duly authorized. SPRINT NEXTEL CORPORATION (Registrant) By /s/ DANIEL R. HESSE Daniel R. Hesse Chief Executive Officer and President Date: February 24, 2012 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following...

  • Page 67
    Table of Contents SIGNATURES SPRINT NEXTEL CORPORATION (Registrant) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 24th day of February, 2012. /s/ JAMES...

  • Page 68
    ... 31, 2011, 2010 and 2009 Consolidated Statements of Shareholders' Equity for the years ended December 31, 2011, 2010 and 2009 Notes to the Consolidated Financial Statements Clearwire Consolidated Financial Statements Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm...

  • Page 69
    ... of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was...

  • Page 70
    ...Contents SPRINT NEXTEL CORPORATION CONSOLIDATED BALANCE SHEETS December 31, 2011 2010 (in millions, except share and per share data) ASSETS Current assets Cash and cash equivalents Short-term investments Accounts and notes receivable, net Device and accessory inventory Deferred tax assets Prepaid...

  • Page 71
    ...per share amounts) 2009 Net operating revenues Net operating expenses Cost of services and products (exclusive of depreciation and amortization included below) Selling, general and administrative Severance, exit costs and asset impairments Depreciation Amortization Other, net Operating income (loss...

  • Page 72
    ... accounts receivable Share-based compensation expense Deferred and other income taxes Equity in losses of unconsolidated investments, net Gains from asset dispositions and exchanges Contribution to pension plan Gain on previously held non-controlling interest in Virgin Mobile Other changes in assets...

  • Page 73
    ... SPRINT NEXTEL CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in millions) Common Shares Shares(1) Amount Paid-in Capital Treasury Shares Shares Amount Accumulated Deficit Accumulated Other Comprehensive Loss Total Balance, December 31, 2008 Net loss Other comprehensive income...

  • Page 74
    ... Assets Long-Term Debt, Financing and Capital Lease Obligations Severance, Exit Costs and Asset Impairments Supplemental Financial Information Income Taxes Spectrum Hosting Commitments and Contingencies Compensation Plans Shareholders' Equity and Per Share Data Segments Quarterly Financial Data...

  • Page 75
    ...U.S. Virgin Islands. The Wireline segment includes revenue from domestic and international wireline voice and data communication services, including services to the cable multiple systems operators that resell our local and long distance services and use our back office systems and network assets in...

  • Page 76
    ... rates for assets are revised periodically to account for changes, if any, related to management's strategic objectives, technological changes or obsolescence. Repair and maintenance costs and research and development costs are expensed as incurred. We capitalize costs for network and non-network...

  • Page 77
    ... cell site development costs and software in development, are periodically assessed to determine recoverability. Network equipment and cell site development costs are expensed whenever events or changes in circumstances cause the Company to conclude the assets are no longer needed to meet management...

  • Page 78
    ... long distance voice, data and Internet revenues. Service revenues consist of fixed monthly recurring charges, variable usage charges such as roaming, data, text messaging, and premium service usage and miscellaneous fees, such as activation, upgrade, late payment, reconnection and early termination...

  • Page 79
    Table of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS revenue unless we receive, or will receive, an identifiable benefit in exchange for the consideration, and the fair value of such benefit can be reasonably estimated, in which case the consideration will be ...

  • Page 80
    ... Interest Sprint's investment in Clearwire is part of our plan to participate in the 4G wireless broadband market. Sprint offers 4G products utilizing Clearwire's 4G wireless broadband network in available markets. As of December 31, 2011, Sprint holds approximately 51.5% of a non-controlling...

  • Page 81
    ...-off of certain network and other assets that no longer meet their strategic plans. The year ended December 31, 2011 also includes a $135 million pre-tax impairment reflecting Sprint's reduction in the carrying value of its investment in Clearwire to an estimated fair value and a pretax dilution...

  • Page 82
    ... fair value. The fair value of our marketable equity securities, totaling $43 million and $39 million as of December 31, 2011 and 2010, respectively, is measured on a recurring basis using quoted prices in active markets. The estimated fair value of long-term debt, financing and capital lease...

  • Page 83
    ... SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Property, Plant and Equipment Property, plant and equipment consists primarily of network equipment and other long-lived assets used to provide service to our subscribers. In the first quarter 2012, we formalized our plans...

  • Page 84
    ... first quarter of 2010 associated with the 2009 acquisitions of Virgin Mobile and iPCS primarily related to deferred tax assets and liabilities. We hold 1.9 gigahertz (GHz), 800 megahertz (MHz), and 900 MHz FCC licenses authorizing the use of radio frequency spectrum to deploy our wireless services...

  • Page 85
    Table of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Intangible Assets Subject to Amortization Sprint's customer relationships are amortized using the sum of the years' digits method. We reduce the gross carrying value and associated accumulated amortization ...

  • Page 86
    ...CONSOLIDATED FINANCIAL STATEMENTS Note 7. Long-Term Debt, Financing and Capital Lease Obligations Interest Rates December 31, 2011 (in millions) December 31, 2010 Maturities Notes Senior notes Sprint Nextel Corporation Sprint Capital Corporation Serial redeemable senior notes Nextel Communications...

  • Page 87
    ... at any time prior to maturity. If a change of control event (as defined in the Supplemental Indentures) occurs prior to the Company being rated "investment grade" by the applicable rating agencies, the holders will have the right, subject to certain conditions, to require the Company to repurchase...

  • Page 88
    ... Company is also obligated to repay the credit facilities if certain change-of-control events occur. Future Maturities of Long-Term Debt, Financing Obligation and Capital Lease Obligations Scheduled principal payments of long-term debt, financing obligation and capital lease obligations outstanding...

  • Page 89
    ...$ (62) (342) (404) $ $ 89 110 199 Asset Impairments In 2011, 2010, and 2009, we recorded asset impairments of $78 million, $125 million, and $47 million, respectively, primarily related to network asset equipment in our Wireless segment, no longer necessary for management's strategic plans. F-22

  • Page 90
    ... SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 9. Supplemental Financial Information December 31, 2011 (in millions) 2010 Accounts and notes receivable, net Trade Unbilled trade and other Less allowance for doubtful accounts Prepaid expenses and other current assets...

  • Page 91
    ... SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 10. Income Taxes Income tax (expense) benefit consists of the following: Year Ended December 31, 2011 2010 (in millions) 2009 Current income tax (expense) benefit Federal State Total current income tax (expense) benefit...

  • Page 92
    Table of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Deferred income taxes are recognized for the temporary differences between the carrying amounts of our assets and liabilities for financial statement purposes and their tax bases. Deferred tax assets are also...

  • Page 93
    ... in the controlling interest acquisition of our wireless joint venture, which we call the PCS Restructuring. The benefits acquired in the PCS Restructuring are subject to certain realization restrictions under various tax laws. We are required to reimburse the former cable company partners of the...

  • Page 94
    ...310 million of advanced payments from LightSquared for future services to be performed under the spectrum hosting agreement. Beginning in December 2011, through a series of amendments, the arrangement was modified to, among other things, extend the date in which Sprint has the right to terminate the...

  • Page 95
    .... On January 6, 2011, the U.S. District Court for the District of Kansas denied our motion to dismiss a shareholder lawsuit, Bennett v. Sprint Nextel Corp., that alleges that the Company and three of our former officers violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 by...

  • Page 96
    ... reductions on a periodic basis. As a result of these reviews, our letter of credit was reduced from $2.5 billion at the start of the project to $1.0 billion as of December 31, 2011, as approved by the FCC. Total payments directly attributable to our performance under the Report and Order, from the...

  • Page 97
    ... Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS We are in the process of renegotiating cell site leases in connection with Network Vision, which includes spectrum hosting capabilities. As a result, lease renegotiations completed through December 31, 2011 resulted...

  • Page 98
    ... of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS individuals as defined by the plan. Options, other than those issued through the offer to exchange ("Exchange Offer") described below, are generally granted with an exercise price equal to the market value of the...

  • Page 99
    ... of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Options The fair value of each option award is estimated on the grant date using the Black-Scholes option valuation model, based on several assumptions including the risk-free interest rate, volatility, expected...

  • Page 100
    ...Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Restricted Stock Units The fair value of each restricted stock unit award is calculated using the share price at the date of grant. Restricted stock units outstanding consist of those units granted under the 2007 Plan...

  • Page 101
    ... U.S. Virgin Islands. Wireline primarily includes revenue from domestic and international wireline voice and data communication services, including services to the cable multiple systems operators that resell our local and long distance services and use our back office systems and network assets in...

  • Page 102
    ... communications companies as well as cable and Internet service providers. Segment financial information is as follows: Corporate, Other and Eliminations (in millions) Statement of Operations Information Wireless Wireline Consolidated 2011 Net operating revenues (1) Inter-segment revenues Total...

  • Page 103
    ...segment revenues consist primarily of wireline services provided to the Wireless segment for resale to wireless subscribers. Other, net consists primarily of severance, exit costs and asset impairments offset by gains from other asset dispositions and exchanges. See note 8 for additional information...

  • Page 104
    ...SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Corporate, Other and Eliminations(1) (in millions) Operating Revenues by Service and Products Wireless Wireline Consolidated 2011 Wireless services Wireless equipment Voice Data Internet Other Total net operating revenues...

  • Page 105
    Table of Contents SPRINT NEXTEL CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 16. Quarterly Financial Data (Unaudited) Quarter 1st 2nd 3rd 4th (in millions, except per share amounts) 2011 Net operating revenues Operating income (loss) Net loss (1) Basic and diluted loss per ...

  • Page 106
    ... financial position of Clearwire Corporation and subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011, in conformity with accounting principles generally accepted in the United States...

  • Page 107
    ...481 shares outstanding Additional paid-in capital Accumulated other comprehensive income Accumulated deficit Total Clearwire Corporation stockholders' equity Non-controlling interests Total stockholders' equity Total liabilities and stockholders' equity See notes to consolidated financial statements...

  • Page 108
    ... Contents CLEARWIRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31, 2011 2010 (In thousands, except per share data) 2009 Revenues Operating expenses: Cost of goods and services and network costs (exclusive of items shown separately below) Selling, general...

  • Page 109
    ... activities Cash flows from financing activities: Principal payments on long-term debt Proceeds from issuance of long-term debt Debt financing fees Equity investment by strategic investors Proceeds from issuance of common stock Net cash provided by financing activities of continuing operations Net...

  • Page 110
    ... Ended December 31, 2011, 2010 and 2009 Class A Common Stock Class B Common Stock Additional Paid In Capital Accumulated Other Comprehensive Income Noncontrolling Interests Total Stockholders' Equity Shares Amounts Shares Amounts Accumulated Deficit (In thousands) Balances at December 31, 2008...

  • Page 111
    ... FINANCIAL STATEMENTS 1. Description of Business We are a leading provider of fourth generation, or 4G, wireless broadband services. We build and operate next generation mobile broadband networks that provide high-speed mobile Internet and residential Internet access services in communities...

  • Page 112
    ... decision maker is our Chief Executive Officer. We operate with a single reportable segment as a provider of 4G wireless broadband services in the United States. Prior to June 30, 2011, we had identified two reportable segments: the United States and the international operations. As a result of...

  • Page 113
    ... including market price, investment ratings, the financial condition and near-term prospects of the issuer, the length of time and the extent to which the fair value has been less than the cost basis, and our intent and ability to hold the investment until maturity or for a period of time sufficient...

  • Page 114
    ...for internal use has generally been enterprise-level business and finance software customized to meet specific operational needs. Costs incurred in the application development phase are capitalized and amortized over the useful life of the software once the software has been placed in service, which...

  • Page 115
    ... income tax expense. Revenue Recognition - We primarily earn revenue by providing access to our high-speed wireless networks. Also included in revenue are sales and leases of CPE and additional add-on services, including personal and business email. In our 4G mobile broadband markets, we offer...

  • Page 116
    ... units of accounting based on the deliverables' relative selling prices. Revenue-generating activities to which value was attributed in the April 2011 Sprint Wholesale Amendments included: permission for Sprint to resell the 4G wireless broadband services on a wholesale basis to other companies...

  • Page 117
    ... the provision of certain communications services on the EBS channels in certain markets throughout the United States. We account for these spectrum leases as executory contracts which are similar to operating leases. Signed leases which have unmet conditions required to become effective are...

  • Page 118
    ... costs relating to unused tower sites where our current contract requires us to continue payments for the remaining term. Based on current estimates, total costs for these activities are not expected to be significantly different from those incurred to date. $3.4 million is recorded within Accounts...

  • Page 119
    ... securities include investments in collateralized debt obligations, which we refer to as CDOs, supported by preferred equity securities of insurance companies and financial institutions with stated final maturity dates in 2033 and 2034. During the fourth quarter of 2011, we sold the CDOs for total...

  • Page 120
    .... We also periodically assess certain assets associated with our corporate operations that have not yet been placed in service. Any projects which are no longer expected to be completed are written down to expected fair value. During 2011, certain internally-developed software projects were...

  • Page 121
    ...and a wide-area basis, authorize wireless carriers to use radio frequency spectrum to provide service to certain geographical areas in the United States. These licenses are generally acquired as an asset purchase or through a business combination. In some cases, we acquire licenses directly from the...

  • Page 122
    Table of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 7. Other Intangible Assets Other intangible assets as of December 31, 2011 and 2010 consisted of the following (in thousands): December 31, 2011 Gross Carrying Value $ 108,275 3,804 3,...

  • Page 123
    ...interest Salaries and benefits Business and income taxes payable Other accrued expenses Total accounts payable and accrued expenses Other current liabilities: Derivative instruments Deferred revenues(1) Current portion of long-term debt Cease-to-use lease liability (Note 3) Other Total other current...

  • Page 124
    ...2 160 $ $ $ The income tax rate computed using the federal statutory rates is reconciled to the reported effective income tax rate as follows: Year Ended December 31, 2011 2010 2009 Federal statutory income tax rate State income taxes (net of federal benefit) Non-controlling interest Other, net...

  • Page 125
    .... We file income tax returns for Clearwire and our subsidiaries in the United States Federal jurisdiction and various state and foreign jurisdictions. As of December 31, 2011, the tax returns for Clearwire for the years 2003 through 2010 remain open to examination by the Internal Revenue Service and...

  • Page 126
    ... Discount Carrying Value Notes: Senior Secured Notes and Rollover Notes Second-Priority Secured Notes Exchangeable Notes Vendor Financing Notes(4) Capital lease obligations(4) Total debt, net Less: Current portion of Vendor Financing Notes and capital lease obligations(3) Total long-term debt, net...

  • Page 127
    ... Second-Priority Secured Notes provide for bi-annual payments of interest in June and December. The holders of the Second-Priority Secured Notes have the right to require us to repurchase all of the notes upon the occurrence of a change of control event or a sale of certain assets at a price of 101...

  • Page 128
    ... under capital leases with 12 year lease terms. Future Payments - For future payments on our long-term debt see Note 13, Commitments and Contingencies. Interest Expense - Interest expense included in our consolidated statements of operations for the years ended December 31, 2011, 2010 and 2009...

  • Page 129
    ... fair value of the Exchange Options, we use an income approach based on valuation models, including option pricing models and discounted cash flow models. We maximize the use of market-based observable inputs in the models and develop our own assumptions for unobservable inputs based on management...

  • Page 130
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) We use a trinomial option pricing model to estimate the fair value of the Exchange Options. The inputs include the contractual terms of the instrument and marketbased parameters such as interest rate forward curves, stock price and dividend...

  • Page 131
    ... value for financial instruments we hold that are not subject to fair value recognition. Debt Instruments To estimate the fair value of the Senior Secured Notes and Rollover Notes, the Second-Priority Secured Notes and the Exchangeable Notes, we used the average indicative price from several market...

  • Page 132
    ... sites, including towers and rooftop locations, and office space. Certain of the leases provide for minimum lease payments, additional charges and escalation clauses. Operating leases generally have initial terms of five years with multiple renewal options for additional five-year terms totaling...

  • Page 133
    Table of Contents CLEARWIRE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Spectrum lease obligations - Certain of the leases provide for minimum lease payments, additional charges and escalation clauses. Leased spectrum agreements have terms of up to 30 years....

  • Page 134
    ... with subscribers and is contrary to the company's advertising and marketing claims. Plaintiffs also allege that subscribers do not review the Terms of Service prior to subscribing, and when subscribers cancel service due to network management, we charge an ETF or restocking fee that they claim is...

  • Page 135
    ... held eligible stock options and, as of the date the offer commenced, were actively employed by Clearwire or one of our subsidiaries (excluding the members of the Board of Directors, our Chief Executive Officer, former employees and non-United States employees). Pursuant to the Exchange Offer, 4,390...

  • Page 136
    ... former employees and the Exchange Offer) for the years ended December 31, 2011, 2010 and 2009 is presented below: Number of RSU's WeightedAverage Grant Price Fair Value (In Millions) Restricted stock units outstanding - January 1, 2009 Granted Forfeited Vested Restricted stock units outstanding...

  • Page 137
    ... former employees and the Exchange Offer) from January 1, 2009 through December 31, 2011 is presented below: WeightedAverage Remaining Contractual Term (Years) Number of Options WeightedAverage Exercise Price Options outstanding - January 1, 2009 Granted Forfeited Exercised Options outstanding...

  • Page 138
    ... FINANCIAL STATEMENTS - (Continued) The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model using the following assumptions for the years ended December 31, 2010 and 2009. There were no options granted in 2011: Year Ended December...

  • Page 139
    ... stake in Clearwire. This is accomplished through an exchange feature that provides the holder the right, at any time, to exchange one share of Class B Common Stock plus one Class B Common Interest for one share of Class A Common Stock. During the second quarter of 2011, Sprint surrendered 77...

  • Page 140
    ... 31, 2011, Sprint holds 705,359,348 Class B Common Interests in Clearwire Communications representing 51.5% of the economic interests. Intel, Comcast, Time Warner Cable and Bright House, collectively, whom we refer to as the Strategic Investors, and Sprint own shares of Class B Common Stock, which...

  • Page 141
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The following shows the effects of the changes in Clearwire's ownership interests in Clearwire Communications (in thousands): Year Ended December 31, 2011 Year Ended December 31, 2010 Year Ended December 31, 2009 Clearwire's loss from equity...

  • Page 142
    ...ended December 31, 2011, 2010 and 2009 (in thousands): Unrealized Gains (Losses) On Available-For-Sale Securities $ 512 297 809 708 - 1,517 (273) (1,236) 8 Balance at December 31, 2008 Current period unrealized gain/(loss) recorded in other comprehensive income attributable to Clearwire Corporation...

  • Page 143
    ..., 2010 on an "if converted" basis since the result was dilutive. For purpose of this computation, the change in fair value of the Exchange Options and interest expense on the Exchangeable Notes were reversed for the period. For the year ended December 31, 2011, shares issuable upon the conversion of...

  • Page 144
    ...): Year Ended December 31, 2011 2010 - 103,001 8,920 18,380 13,820 12,414 7,748 17,806 - 22,657 - 1,519 133,489 72,776 2009 - 22,154 9,488 17,806 - 12,747 62,195 Exchangeable Notes conversion shares Stock options Restricted stock units Warrants Subscription rights Contingent shares We have...

  • Page 145
    ... long-term liabilities $ $ $ $ $ 78,282 2,229 4,736 13,953 35,147 $ $ $ $ $ 22,297 5,010 11,161 - - Year Ended December 31, 2011 2010 2009 Revenue Cost of goods and services and network costs (inclusive of capitalized costs) Selling, general and administrative (inclusive of capitalized costs...

  • Page 146
    ... elimination of device minimum fees after 2011, usage based pricing for WiMAX services after 2013, and for LTE service beginning in 2012. We also agreed that Sprint Spectrum may re-wholesale wireless broadband services, subject to certain conditions and we agreed to operate our WiMAX network through...

  • Page 147
    ... of service; in general, the pricing is based on the mid-point between fair market value of the service and the Sprint Entities' fully allocated cost for providing the service. The term of the Master Agreement for Network Services is five years, but the lessee will have the right to extend the term...

  • Page 148
    ... be used on our networks. The Intel Market Development Agreement will last for a term of seven years from the date of the agreement, with Intel having the option to renew the agreement for successive one year terms up to a maximum of 13 additional years provided that Intel meets certain requirements...

  • Page 149
    ... CLEARWIRE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) December 31, 2011 Assets Current assets: Cash and cash equivalents Prepaid and other assets Total current assets Property, plant and equipment, net Spectrum licenses, net Other assets Total assets...

  • Page 150
    ... in Securities and Exchange Commission Rule 4-08(e)(3) of Regulation S-X) of Clearwire's subsidiary exceeding 25% of the consolidated net assets of Clearwire and its subsidiaries. The following condensed parent-only financial statements of Clearwire account for the investment in Clearwire F-83

  • Page 151
    ...) Communications under the equity method of accounting. The financial statements should be read in conjunction with the consolidated financial statements of Clearwire and subsidiaries and notes thereto. CLEARWIRE CORPORATION CONDENSED BALANCE SHEETS December 31, 2011 (In thousands) 2010 ASSETS Cash...

  • Page 152
    ... Code of Conduct, confidential information and avoidance of conflicts, except that when the terms of this Agreement differ from or are in conflict with the Company's general employment policies or practices, this Agreement shall control. 2. Term. Subject to termination under Section 9, the Executive...

  • Page 153
    ... date of such termination. 3. Position and Duties of the Executive. (a) The Executive shall serve as Chief Marketing Officer, and agrees to serve as an officer of any enterprise and/or agrees to be an employee of any Subsidiary as may be requested from time to time by the Board of Directors...

  • Page 154
    ... as may from time to time be reasonably prescribed by the Board, any committee or person designated by the Board, or the Chief Executive Officer, in each case, within the framework of the Company's policies and objectives. (c) During the Employment Term, and provided that such activities...

  • Page 155
    ... basis for the period of FY 2011 in which he is employed, at an annual Target Bonus opportunity equal to 70% of his Base Salary. The Executive's Target Bonus may be increased (but not decreased, except for across-the-board reductions generally applicable to the Company's senior executives) from time...

  • Page 156
    ...Performance. In connection with his employment by the Company, the Executive shall be based at the principal executive offices of the Company in the vicinity of Overland Park, Kansas (the "Place of Performance"), except for travel reasonably required for Company business. The Executive will relocate...

  • Page 157
    ... through the date of termination of employment, payable in accordance with the Company's normal payroll practices and any vested benefits under any Employee Plan in accordance with the terms of such Employee Plan and applicable law, and (2) conditioned upon the Executive executing a Release within...

  • Page 158
    ... the date that the Executive becomes eligible to receive comparable benefits from a new employer; (iv) continue for the Payment Period participation in the Company's employee life insurance plans at then-existing participation and coverage levels, comparable to the terms in effect from time to time...

  • Page 159
    ... Plan, the Executive will become entitled to severance compensation and benefits under the CIC Severance Plan as of (x) the date the Separation from Service occurs, or (y) in the event of a Pre-CIC Termination, the date the Change in Control occurs, as of which date all rights to severance benefits...

  • Page 160
    ... prior to the termination of his employment (reduced by any amounts paid on a monthly basis under any long-term disability plan (the "LTD Plan") now or hereafter sponsored by the Company), which payments shall be paid to the Executive commencing on the Separation from Service date for 12 months...

  • Page 161
    ...developments, sales strategies, plans, research data, clinical data, financial data, personnel data, computer programs, customer and supplier lists, trademarks, service marks, copyrights (whether registered or unregistered), artwork, and contacts at or knowledge of customers or prospective customers...

  • Page 162
    ... no fault of the Executive, generally known to the public. In the event that the Executive is required by law, regulation, or court order to disclose any of the Company Group's Proprietary Information, the Executive will promptly notify the Company prior to making any such disclosure to facilitate...

  • Page 163
    ... of confidentiality under the Company's policies, general legal or equitable principles or statutes. (h) During the Employment Term and following his termination of employment: (i) the Executive shall not, directly or indirectly, make or cause to be made any statements, including but not limited...

  • Page 164
    ... evolving nature of the Company Group's industry, the scope of its business and/or the identities of Competitors may change over time. The Executive further acknowledges and agrees that the Company Group markets its products and services on a nationwide basis, encompassing the Territory and...

  • Page 165
    ... to terminate his employment, (iii) referring employees of the Company Group to personnel or agents employed by competitors, suppliers or customers of the Company Group, and (iv) initiating communications with any person or entity relating to a possible Change in Control. 13. Developments. (a) The...

  • Page 166
    ... payment, the Executive shall return all severance compensation and the value of such benefits, or profits derived or received from such benefits. 15. Continued Availability and Cooperation. (a) Following termination of the Executive's employment, the Executive shall cooperate fully with the Company...

  • Page 167
    ... arbitration, which shall be the exclusive forum for resolving such claims. Such arbitration will be administered by Judicial Arbitration and Mediation Services, Inc. ("JAMS") pursuant to its Employment Arbitration Rules and Procedures and governed by Kansas law. The arbitration shall be conducted...

  • Page 168
    ... be required to perform if no such succession had taken place. This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business or assets of...

  • Page 169
    ... mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier service such as Federal Express or UPS, addressed to the Company (to the attention of the General Counsel of the Company) at its principal executive offices...

  • Page 170
    ... of legal fees in connection with execution of this Agreement. (e) The Executive hereby represents and agrees that, during the Restricted Period, if the Executive is offered employment or the opportunity to enter into any business activity, whether as owner, investor, executive, manager, employee...

  • Page 171
    ... final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of Treasury or the Internal Revenue Service. Notwithstanding the foregoing, no particular tax result for the Executive with respect to any income recognized by the Executive in connection with...

  • Page 172
    ... with respect to the Company's accounting and financial statements, embezzlement or conversion by the Executive of the Company's or any of its Subsidiary's property in connection with the Executive's duties or in the course of the Executive's employment with the Company; (iv) the conviction (or...

  • Page 173
    ...Period" has the meaning set forth in the CIC Severance Plan. (l) "Certificate of Incorporation" means the Amended and Restated Articles of Incorporation of Sprint Nextel Corporation, as may be amended from time to time. (m) "Code" means the Internal Revenue Code of 1986, as amended from time to time...

  • Page 174
    ...have returned to the full-time performance of the Executive's duties; and, further, (ii) the Executive becomes eligible to receive benefits under the LTD Plan; provided, however, if the Executive shall not agree with a determination to terminate his employment because of Disability, the question of...

  • Page 175
    ...(jj) "Release" means a release of claims in a form provided to the Executive by the Company in connection with the payment of benefits under this Agreement. (kk) "Release Consideration Period" means the period of time pursuant to the terms of the Release afforded the Executive to consider whether to...

  • Page 176
    ...or businesses (whether or not incorporated) that are under common control for purposes of Code Section 414(c), "at least 20 percent" is used instead of "at least 80 percent" at each place it appears in Treasury Regulation Section 1.414(c)-2. (pp) "Separation Plan" means the Company's Separation Plan...

  • Page 177
    ..." has the meaning set forth in Section 11(b). IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by an officer pursuant to the authority of its Board, and the Executive has executed this Agreement, as of the day and year first written above. SPRINT NEXTEL CORPORATION By:_____...

  • Page 178
    ... be extended by an additional 12 months. Page 26 of 26 (Back To Top) Section 3: EX-10.46 (DEFERRED COMP PLAN AS AMENDED AND RESTATED) Exhibit 10.46 SPRINT NEXTEL CORPORATION DEFERRED COMPENSATION PLAN (EFFECTIVE JANUARY 1, 2006 AND AMENDED AND RESTATED ON MAY 17, 2006, DECEMBER 11, 2008, FEBRUARY...

  • Page 179
    ... Statement 1.2.29 Plan Year 1.2.30 Pre-Tax Contributions 1.2.31 Pre-Tax Contribution Account 1.2.32 Recapitalization Multiple 1.2.33 Record Date 1.2.34 Separation and Distribution Agreement 1.2.35 Separation From Service 1.2.36 Specified Employee 1.2.37 Sprint Nextel 1.2.38 Sprint Nextel Share Unit...

  • Page 180
    ... Elections 3.2.3 Proportionate Allocation 3.2.4 Investment Funds 3.2.5 Embarq Share Units 3.2.6 Debits and Credits to Accounts No Actual Investment FICA and Other Taxes SECTION 4 VESTING OF ACCOUNT SECTION 5 DISTRIBUTION General Valuation Date General Distribution Date 5.2.1 Time of Distribution of...

  • Page 181
    ... for Claim on Review Claims and Review Procedure for Disability Claims Filed under the Plan Rules Information Furnished by Participants PLAN ADMINISTRATION Authority 9.1.1 Majority Decisions Miscellaneous 9.2.1 Conflict of Interest 9.2.2 Dual Capacity 9.2.3 Administrator 9.2.4 Service of Process...

  • Page 182
    ... from Sprint Nextel. Effective December 11, 2008, Sprint Nextel amended and restated the Plan to comply with the final Treasury regulations issued under Code Section 409A. Effective February 17, 2011, Sprint Nextel amended the Plan clarifying the timing of valuation of a Plan Participant's Account...

  • Page 183
    ... Control" means a change in ownership of Sprint Nextel, a change in the effective control of Sprint Nextel or a change in the ownership of a substantial portion of the assets of Sprint Nextel as described in Treasury regulations issued under Code Section 409A. 1.2.8 Code - the Internal Revenue Code...

  • Page 184
    ... no longer be permitted to defer compensation after completion of deferrals already elected. 1.2.27 Plan - the nonqualified, income deferral program maintained by Sprint Nextel established for the benefit of Participants eligible to participate therein, as set forth in this Plan Statement. (As used...

  • Page 185
    ... businesses and distributing on a pro rata basis to holders of Sprint Nextel common stock all of the outstanding shares of common stock of Embarq. 1.2.35 Separation From Service - shall mean a "separation from service" from Sprint Nextel and its subsidiaries as described under Code Section...

  • Page 186
    ... regulations issued under Code Section 409A. 1.2.37 Sprint Nextel - Sprint Nextel Corporation, a Kansas corporation. References herein to Sprint Nextel shall also refer to any successor of Sprint Nextel that adopts the Plan. Except as hereinafter provided, functions generally assigned to Sprint...

  • Page 187
    ... Eligible Employee has not made a withdrawal due to hardship under Treasury Regulations Section 1.401(k)-1(d)(3) from any Code Section 401(k) plan sponsored by Sprint Nextel within the prior six months. 2.2 Initial Deferral Election. A Participant shall make an initial deferral election by filing an...

  • Page 188
    ... in this Plan, develop benefits under this Plan or be entitled to receive benefits under this Plan (either for himself or herself or his or her survivors) unless such individual is either a member of a select group of management or highly compensated employees (as that expression is used in Section...

  • Page 189
    ... amount to (i) the number of Sprint Nextel Share Units credited to the Participant under the Sprint Nextel Share Unit Fund as of the Record Date, multiplied by (ii) the Recapitalization Multiple. From time to time between the Distribution Date and December 31, 2006 (but subject to such rules as the...

  • Page 190
    ... to exist. As of such time, all Embarq Share Units credited thereunder shall be converted to Sprint Nextel Share Units based on the fair market value of such units, in the manner determined by the Committee in its discretion. Debits and Credits to Accounts. Adjustments to Accounts shall be made in...

  • Page 191
    ...; or (iv) the employee has acted intentionally and in bad faith in a manner that results in a material detriment to the assets, business, or prospects of the employer. SECTION 5 DISTRIBUTION 5.1 General Valuation Date. A Participant's Account shall be valued on the last business day of the month of...

  • Page 192
    ... From Service if the total account value under the Plan as of such date is less than $20,000. The Participant's Separation From Service within twelve (12) months after a Change in Control. The entire Account balance of a Participant shall be accelerated and paid in the benefit form selected...

  • Page 193
    ... if such payment were made as scheduled, Sprint Nextel's deduction with respect to such payment would not be permitted due to the application of Code Section 162(m), the Committee may unilaterally delay the time of the making or commencement of payments, provided that all scheduled payments to the...

  • Page 194
    ... following requirements. To be eligible to disclaim, a Beneficiary must be a natural person, must not have received a distribution of all or any portion of the Account at the time such disclaimer is executed and delivered, and must have attained at least age twenty-one (21) years as of the date of...

  • Page 195
    ..., at the time of such execution or filing, is then a minor under the law of the state of the Participant's legal residence. The Committee shall be the sole judge of the content, interpretation and validity of a purported Beneficiary designation. 5.5.6 No Spousal Rights. Except as required by law, no...

  • Page 196
    ... of Sprint Nextel to make payments under this Plan constitutes only the unsecured (but legally enforceable) promise of Sprint Nextel to make such payments. The Participant shall have no lien, prior claim or other security interest in any property of Sprint Nextel. Sprint Nextel is not required to...

  • Page 197
    ... earned as of the date of such amendment unless the Participant so affected consents in writing to the amendment. 7.2 Termination. By action of the Human Capital & Compensation Committee, Sprint Nextel reserves the right to terminate the Plan and accelerate the payment of Accounts to Participants in...

  • Page 198
    ...or information is necessary; and a description of the claims review procedure, including the time limits applicable to such procedure, and a statement of the claimant's right to bring a civil action against the Plan pursuant to Section 502(a) of ERISA. (c) (d) 8.4.3 Claims on Review. If the claim...

  • Page 199
    ..., the claims and review procedure for employees for disability claims shall be that set forth in the Sprint Nextel Long Term Disability Plan. Similar procedures shall be used for Board Members, except that no statements referencing ERISA rights will be provided. 8.6 Rules. (a) No inquiry or question...

  • Page 200
    ... provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits. The time period within which a benefit determination will be made shall begin to run at the time a claim or request for review...

  • Page 201
    ...have the right to examine that part of such report or accounting (or a true and correct copy of such part) which sets forth the Participant's benefits and ratable interest in the Plan, prescribe forms to be used for applications for participation, benefits, notifications, etc., as may be required in...

  • Page 202
    ... be the plan administrator. 9.2.4 Service of Process. In the absence of any designation to the contrary by Sprint Nextel, the Secretary of Sprint Nextel is designated as the appropriate and exclusive agent for the receipt of service of process directed to the Plan in any legal proceeding, including...

  • Page 203
    ...discharge any employee or other person at any time for any or no reason, which right is hereby reserved. 10.2 Source of Payment. Neither Sprint Nextel nor any of its officers nor any member of the Committee or the Board of Directors in any way secure or guarantee the payment of any benefit or amount...

  • Page 204
    ... February, 2012. SPRINT NEXTEL CORPORATION By /S/ Stanley M. Sword Vice President, Total Rewards Sprint Nextel Corporation 23 (Back To Top) Section 4: EX-10.49 (CIC SEVERENCE PLAN AS AMENDED AND RESTATED) EXHIBIT 10.49 SPRINT NEXTEL CORPORATION CHANGE IN CONTROL SEVERANCE PLAN (Effective January...

  • Page 205
    SPRINT NEXTEL CORPORATION CHANGE IN CONTROL SEVERANCE PLAN (Amended and Restated as of February 10, 2012)... DEFINITIONS ELIGIBILITY AND PARTICIPATION SEVERANCE BENEFITS AMENDMENT AND TERMINATION MISCELLANEOUS PLAN PARTICIPANTS APPLICABLE BENEFITS AND PERIODS PARTICIPATING EMPLOYERS Page 1 3 12 13 ...

  • Page 206
    ...such key employees to make career decisions without undue time pressure and financial uncertainty. The Plan is intended to provide severance compensation and benefits pursuant to the Plan if a Change in Control of the Corporation has occurred and the Participant's employment is either (a) terminated...

  • Page 207
    ...Human Capital and Compensation Committee of the Board (the "Compensation Committee") shall administer the Plan; provided, however, that none of the members of the Compensation Committee will be a Participant. The powers and duties of the Compensation Committee in administering the Plan are set forth...

  • Page 208
    ...date of the relevant Change in Control or (ii) on the date of the Participant's termination of employment with a Company, whichever is higher. "Board" means the Board of Directors of the Corporation. "Business Transaction" has the meaning set forth in Section 2.01(h)(ii). "Cause" means a termination...

  • Page 209
    ...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...

  • Page 210
    ...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 Person's acquisition; or (ii) the...

  • Page 211
    ... Period shall also include the time period before the occurrence of a Change in Control for Participants who are subject to a Pre-CIC Termination with respect to the affected Participant. (k) "Code" means the Internal Revenue Code of 1986, as amended and the proposed, temporary and final regulations...

  • Page 212
    ... the value of aggregate employee benefits provided immediately prior to the Change in Control, except for across-the-board reductions generally applicable to all senior executives; (iii) (iv) (v) (vi) (vii) (viii) a Company requires the Participant to have the Participant's principal location...

  • Page 213
    ...from Service. "Release" means a release of claims and a non-compete agreement and other restrictive covenants in a form provided to the Participant by the Corporation in connection with the payment of benefits under this Plan. "Release Consideration and Revocation Period" means the combined total of...

  • Page 214
    ... period). If a Participant's status changes from an employee to an independent contractor, or from an independent contractor to an employee, services provided in both capacities are taken into account. (iii) (mm) "Separation Plan" means the Corporation's Separation Plan as may be amended from time...

  • Page 215
    (uu) "Voting Stock" means securities entitled to vote generally in the election of directors. 10

  • Page 216
    ... Date will be a Participant in the Plan. 3.02 Future Eligibility Except as provided in the next sentence, each full-time employee of the Corporation or a Participating Employer who is recommended to the Compensation Committee to be a Tier I or Tier II Executive by the Chief Executive Officer...

  • Page 217
    ...of Separation from Service, and such termination of employment or change in status constitutes a Separation from Service. In addition, as a condition of receiving Severance Benefits, the Participant must execute a Release within the Release Consideration Period and deliver it to the Company with the...

  • Page 218
    ... annual short term incentive compensation under an Employment Agreement or Separation Plan to the Participant for any period after the Separation from Service. The CIC Severance Amount is payable on (x) the Executive's Separation from Service date; or (y) for a Pre-CIC Termination, the closing date...

  • Page 219
    ... the Separation from Service in the Corporation's group health and life insurance plans comparable to the terms in effect from time to time for the Corporation's senior executives, including any co-payment and premium payment requirements, except that: (A) after the Applicable Period expires, the...

  • Page 220
    ... Code Section 409A. The right to a series of payments under the Plan will be treated as a right to a series of separate payments. If a distribution or benefit subject to Code Section 409A is being made to a Specified Employee due to the Participant's Separation from Service, distribution or payment...

  • Page 221
    ... that the Plan complies with any provision of federal, state, local, or non-United States law. The Corporation, its subsidiaries, and their respective directors, officers, employees and advisers will not be liable to any Participant (or any other individual claiming a benefit through the Participant...

  • Page 222
    ..., and upon request, provide to the Corporation true and correct copies (with any amendments) of the Participant's federal income tax return as filed with the Internal Revenue Service and corresponding state and local tax returns, if relevant, as filed with the applicable taxing authority, and such...

  • Page 223
    ... required to comply with changes in applicable laws or regulations, including as set forth in Section 4.02. 5.02 Termination The term of the Plan shall be for an initial term of two (2) years commencing on the Effective Date and shall continue through December 31, 2008 (the "Initial Term"); provided...

  • Page 224
    ... confer on any Participant any right to continue in the employ of any Company or a Subsidiary or affiliate of the Corporation or to affect in any way the right of the Corporation or a Subsidiary or affiliate of the Corporation to terminate a Participant's employment without prior notice at any time...

  • Page 225
    ... and provide any other additional information, as applicable, required by 29 Code of Federal Regulations Section 2560.503-1 applicable to the Plan. With respect to any claim for benefits which, under the terms of the Plan, are provided under another employee benefit plan maintained by a Company, the...

  • Page 226
    ... of this Plan document, exhibits and amendments hereto, and any related documents on file in its administrative offices, and such documents will be available for review by a Participant or a designated representative of the Participant at any reasonable time during regular business hours. Reasonable...

  • Page 227
    ... with the Corporation's counsel in connection with any present and future actual or threatened litigation or administrative proceeding involving any Company that relates to events, occurrences or conduct occurring (or claimed to have occurred) during the period of the Participant's employment by any...

  • Page 228
    ... provided herein, the Plan shall not affect any Participant's rights or entitlement under any other retirement or employee benefit plan offered to him by the Corporation or a Subsidiary or affiliate of the Corporation (as appropriate) as of the date of the Participant's termination of employment...

  • Page 229
    ... employee at his or her place of employment in compliance with 29 Code of Federal Regulations Section 2520.104b-1(c). In the case of any Company, mailed notices shall be addressed to the Corporation's corporate headquarters, and all notices shall be directed to the attention of its General Counsel...

  • Page 230
    ...thereof. Except as otherwise required by ERISA, every right of action by a Participant with respect to the Plan shall be barred after the expiration of three (3) years from the date of termination of employment or the date of receipt of the notice of denial of a claim for benefits or eligibility, if...

  • Page 231
    APPENDIX I PLAN PARTICIPANTS As of February 10, 2012 NAME SEVERANCE BENEFIT CLASSIFICATION Tier I Tier I Tier I Tier I Tier I Tier I Tier I Tier I Tier II Tier II Tier... Azzi Peter Campbell Matthew Carter John Dupree Jaime Jones Vonya McCann William Malloy Sandra Price Christopher Rogers William White

  • Page 232
    APPENDIX II APPLICABLE BENEFITS AND PERIODS As of December 15, 2008 Severance Benefits Classification Tier I Executive Tier II Executive Applicable Multiple Applicable Period 2 1.5 27 2 Years 1.5 Years

  • Page 233
    ..., Inc. Nextel of New York, Inc. Nextel Systems Corp. US Telecom, Inc. UCOM, Inc. AirGate PCS, Inc. Alamosa Missouri, LLC Alamosa Wisconsin Limited Partnership Southwest PCS, L.P. SPCS Caribe Inc. Sprint International Caribe, Inc. Sprint/United Management Company Sprint Nextel Corporation Texas...

  • Page 234
    .... The following terms, when capitalized as shown below, shall have the following respective meanings, unless the context clearly indicates otherwise. "Board" means the Board of Directors of the Company. "Code" means the Internal Revenue Code of 1986, as amended from time to time. References to...

  • Page 235
    ... an Employee who has satisfied the requirements of Section 3.1 for participation in the Plan or a former Employee entitled to benefits hereunder. "Plan" means the Sprint Supplemental Executive Retirement Plan, as set forth herein and as amended from time to time. "Plan Administrator" means the plan...

  • Page 236
    "Subsidiary" means (a) a member of a controlled group of corporations of which an Employer is a member, (b) an unincorporated trade or business which is under common control with an Employer as determined in accordance with Section 414(c) of the Code or (c) a member of an affiliated service group of...

  • Page 237
    ... date such benefits are first so limited. Also, any Employee whose Deferred Compensation Plan Deferrals cause a reduction in his or her benefit under the Qualified Pension Plan shall be a Participant in this Plan. An Employee whose employment with the Company and all of its Subsidiaries terminated...

  • Page 238
    ... have no right to such benefits if: (a) such Participant has engaged in Gross Misconduct, or (b) the Participant, without the consent of the Committee, while employed by the Company or a Subsidiary or after termination of such employment, becomes associated with, employed by, renders services to, or...

  • Page 239
    has a substantial interest as determined by the Committee. The restriction from competition after termination of employment described in the preceding sentence shall not apply to a Participant in the event he or she has an Involuntary Termination without Cause. 7

  • Page 240
    ... business experience of the Participant with another employer prior to his or her employment with the Company or a Subsidiary) with which such Participant will be credited for the purpose of calculating benefits in accordance with the benefit formula under the Qualified Pension Plan, (c) the service...

  • Page 241
    ... plans of his or her previous employers, if any, whether qualified under Section 401 of the Code or not. 5.3 Service Requirements. Unless provided otherwise in the recommendation, the number of additional years of service specified in the recommendation shall be credited to a Participant at the rate...

  • Page 242
    ...not Subject to §409A. This Section 6 provides the rules for benefit commencement dates and forms of payment for Plan benefits accrued and vested before January 1, 2005 as described in §1.409A-6(a) of the Treasury Regulations. 6.2 Benefit Commencement Date. Subject to Section 10.6 and the following...

  • Page 243
    ... Participant's annuity starting date for benefits under the Qualified Pension Plan. Notwithstanding the previous sentence, a married participant who has not made an election under this paragraph (b) may elect, before his or her annuity starting date and during the period between the dates of January...

  • Page 244
    ... Section 7 provides the rules for benefit commencement dates and forms of payment for Plan benefits accrued or vested after December 31, 2004 as described in §1.409A-6(a) of the Treasury Regulations, and commencing as of a date on or after January 1, 2009. 7.2 Benefit Commencement Date. Subject to...

  • Page 245
    ... optional form shall be subject to application of the same actuarial equivalence factors as are applicable to the amount payable under the Qualified Pension Plan to which the benefit under this Plan relates. 7.4 Delay for Specified Employees. Notwithstanding the benefit commencement date specified...

  • Page 246
    ... 7 is less than $15,000, such benefits will be paid in a lump sum within 60 days after such Separation from Service, provided, that such payment results in the termination and liquidation of the entirety of such Participant's interest under the Plan, including all agreements, methods, programs or...

  • Page 247
    ...his or her death. (b) If a Participant dies on or after his or her annuity starting date with respect to his or her benefits under Section 7 that are subject to §409A, the survivor benefits payable under the Plan with respect to such benefits, if any, shall be payable in accordance with the form of...

  • Page 248
    ... as determined under the terms and conditions of such plan, including the restrictions under such plan which are imposed in accordance with sections 415 and 401(a)(17) of the Code and excluding any Deferred Compensation Plan Deferrals and any additional years of credited service specified in Section...

  • Page 249
    Regulations (i.e., that are subject to §409A) and commencing as of a date on or after January 1, 2009, subject to Section 7.5, such survivor benefit shall commence as of the first day of the month following the Participant's death and shall be payable in the form of a single life annuity. 17

  • Page 250
    ... Plan in accordance with its terms and the rules and regulations adopted by the Committee; and (e) to delegate its powers to any officer of the Company or other specified persons or committees. (f) to do all other acts which in its judgment are necessary or desirable for the proper and advantageous...

  • Page 251
    ...provisions of the Plan. 9.5 Indemnification. The Employers will indemnify and hold harmless the directors and officers of the Employers, and of all Subsidiaries, the members of the Committee and all other Employees of the Employers, or of any Subsidiary, from any liability, loss, cost or damage that...

  • Page 252
    ...to the Participant or beneficiary a written decision with respect to the claim, except that if there are special circumstances (such as the need to hold a hearing) which require more time for processing, the 60-day period shall be extended to 120 days upon notice to the Participant or beneficiary to...

  • Page 253
    ... other Employers, transfer assets to a trust established with an independent trustee to make distributions under the Plan. The assets so held in such trust shall remain the general assets of the Company which at all times shall be subject to the rights and claims of the Company's general creditors...

  • Page 254
    ... Plans or any other qualified retirement plan maintained by an Employer. 10.9 Withholding of Taxes. An Employer, or a person designated by the Employer, will withhold any required taxes related to the vesting of accrued benefits or the payment of supplemental retirement income or survivor benefits...

  • Page 255
    ...assign, pledge, encumber or charge the same shall be void. No right or benefit under the Plan shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of the person entitled to such benefits, except such claims as may be made by the Company or any other Employer. 23

  • Page 256
    ..., and delivered by ordinary mail, or by Employer mail, to such Participant's business address or resident address on the employee information system of the Employer. All notices required to be given by a Participant or beneficiary shall be given on a form provided for the purpose and shall...

  • Page 257
    ..., the Elected Delivery Date above. This signed Election to Defer Delivery of Shares form must be received on or before [time] on [month/day/year] via • fax at [number] • email at [address] or • post at [title and mailstop], Sprint Nextel Corporation 6200 Sprint Parkway, Overland Park, KS 66251...

  • Page 258
    ...Sprint! I look forward to working with you in meeting the exciting challenges and opportunities in 2011. Best Regards, /s/ Paget Alves Paget Alves President, Business Markets Group (Back To Top) Section 8: EX-10.54 (2007 OMNIBUS INCENTIVE PLAN AS AMENDED AND RESTATED) EXHIBIT 10.54 SPRINT NEXTEL...

  • Page 259
    ... 22. 23. Purpose Definitions Shares Subject to this Plan Option Rights Appreciation Rights Restricted Stock Restricted Stock Units Performance Shares and Performance Units Awards to Non-Employee Directors Other Awards Administration of this Plan Adjustments Change in Control Detrimental Activity Non...

  • Page 260
    ... 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...

  • Page 261
    ... 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: (A) for purposes of this Section 2(h)(i), the following acquisitions shall not constitute a Change in Control...

  • Page 262
    ..., 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 Person's acquisition; or (D) (ii) the consummation...

  • Page 263
    ...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...

  • Page 264
    ... 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...

  • Page 265
    ... "Director" means a member of the Board. (r) "Disability" shall mean, in the case of an Employee, termination of employment under circumstances that would make the Employee eligible to receive benefits under the Sprint Nextel Basic Long-Term Disability Plan, as it may be amended from time to time...

  • Page 266
    ... 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...

  • Page 267
    ... defined by generally accepted accounting principles or the Securities and Exchange Commission and as identified in the Corporation's audited financial statements, notes to such financial statements or management's discussion and analysis in the Corporation's annual report or other filings with the...

  • Page 268
    ... market value pricing rules set forth in Section 409A of the Code. (ff) "Nextel Plan" means the Nextel Communications, Inc. Amended and Restated Incentive Equity Plan. (gg) "Non-Employee Director" means a member of the Board who is not an Employee. (hh) "Non-Qualified Options" means Option Rights...

  • Page 269
    ... the Code at a time that references a Pre-CIC Termination, Pre-CIC Termination shall mean Separation from Service under these circumstances (uu) "Predecessor Plans" means (i) the Management Incentive Stock Option Plan, effective February 18, 1995, (ii) the Sprint 1997 Plan, and (iii) the Nextel Plan...

  • Page 270
    ... 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...

  • Page 271
    ... ends. (iii) 3. "Voting Stock" means securities entitled to vote generally in the election of Directors. Shares Subject to this Plan. (a) Maximum Shares Available Under Plan. (i) Subject to adjustment as provided in Section 12 of this Plan, the maximum aggregate number of shares of Common Stock...

  • Page 272
    ..., then the underlying shares of Common Stock, to the extent of any such forfeiture, termination 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). any (1) option or stock appreciation right granted pursuant to...

  • Page 273
    ... the shares of Common Stock available for Awards under the Plan and will not count against the limits specified in Section 3(c) 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...

  • Page 274
    ... 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 may not be less than the Market Value Per Share on the Date of Grant. In...

  • Page 275
    ... 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...

  • Page 276
    ... 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 Participant's termination of employment or service...

  • Page 277
    ... 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...

  • Page 278
    ... in termination or early termination of the restrictions applicable to such Restricted Stock. 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 on...

  • Page 279
    ...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...

  • Page 280
    ... 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...

  • Page 281
    .... 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...

  • Page 282
    ... last day set by the administrator for making elections. (h) Non-Employee Directors may under policies approved from time to time by the Board or a committee of the Board, elect to defer their annual retainer, meeting fees or other fees and, in which case, the shares of Common Stock purchased under...

  • Page 283
    ...in accordance with the election applicable to the underlying annual retainer and fees. The shares of Common Stock credited to the account of an Non-Employee Director shall remain subject to the claims of the Corporation's creditors, and the interests of the Non-Employee Director in the trust may not...

  • Page 284
    ... 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...

  • Page 285
    ...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 Units, Performance Shares, Performance...

  • Page 286
    ...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...

  • Page 287
    ... 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 Participant's Separation from Service with the Employer, (ii) the date...

  • Page 288
    ... 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...

  • Page 289
    ...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...

  • Page 290
    ... 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 -31...

  • Page 291
    ... the grant date. (3) Eligible Employees means employees of the Corporation other than its "named executive officers" and Eligible Options means any Option other than a New Option where, as of the date specified by the terms of the exchange offer (which date shall be not more than ten business days...

  • Page 292
    ...per share trading price of our Common Stock. Subject to the foregoing, the Compensation Committee shall be permitted to determine additional terms, restrictions or requirements relating to the Option Exchange Program. (d) If permitted by Section 409A of the Code, in case of termination of service by...

  • Page 293
    ... in any way with any right the Corporation or any Subsidiary would otherwise have to terminate such Participant's 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...

  • Page 294
    ... Communications, Inc. (the "Corporation") and its Subsidiaries and to provide such persons with incentives and rewards for superior performance. 2. Definitions. As used in this Plan: (a) "Accelerated Vesting Period" means the period beginning on the effective date of a Change of Control and ending...

  • Page 295
    ... upon the exercise of options, warrants or other securities or rights; or (iv) the Corporation (or any successor thereto by operation of law or by acquisition of all or substantially all of the assets of the Corporation) files a report or proxy statement pursuant to the Exchange Act disclosing in...

  • Page 296
    ... Common Shares at the end of a specified Deferral Period. (q) "Employer" means the Corporation or a Subsidiary or a successor to the Corporation or any such Subsidiary by merger or otherwise upon or following a Change of Control. (r) "Employment" As used in this Plan, the term "employment" shall...

  • Page 297
    ... (xi) economic value added; (xii) total shareholder return; (xiii) improvement in or attainment of expense levels; (xiv) improvement in or attainment of working capital levels; (xv) net additional subscribers; (xvi) customer retention (churn); (xvii) customer service; (xviii) operating income before...

  • Page 298
    ... accepted accounting principles or the Securities and Exchange Commission. (z) "Market Value Per Share" means, as of any particular date, (i) the closing sale price per Common Share as reported on the principal exchange on which Common Shares are then trading, if any, or, if applicable and provided...

  • Page 299
    ... Option Price specified in the related Option Right. (qq) "Stock Option Plan" means the Fleet Call, Inc. Stock Option Plan (as amended and restated as of July 15, 1992). (rr) "Subsidiary" means a corporation, company or other entity (i) more than 50 percent of whose outstanding shares or securities...

  • Page 300
    ... tendered in payment of the Option Price of an Option Right, shares withheld by the Corporation to satisfy a tax withholding obligation and shares not issued in connection with the exercise of an Appreciation Right shall be added to the aggregate plan limit described above and (ii) shares issued in...

  • Page 301
    ... award of Performance Units that specify Management Objectives having an aggregate maximum value as of its Date of Grant in excess of $5,000,000. 4. OPTION RIGHTS. The Committee may authorize grants to Participants of options to purchase Common Shares upon such terms and conditions as the Committee...

  • Page 302
    ... identify the related Option Right (or similar right granted under any other plan of the Corporation) and shall provide that the Tandem Appreciation Right may be exercised only (i) at a time when the related Option Right (or such similar right) is also exercisable and the Spread is positive and (ii...

  • Page 303
    ... of such Management Objectives a minimum level of achievement and may set forth a formula for determining the number of shares of Restricted Shares on which restrictions will terminate if performance is at or above the minimum -10- No Free-Standing Appreciation Right granted under this Plan may be...

  • Page 304
    ... such grant or sale, shall provide for the earlier termination of the Deferral Period, and/or the immediate vesting of the Participant's rights to all of the Deferred Shares subject to the grant or sale, in the event of a Change of Control, in accordance with Section 15 of this Plan. (d) During the...

  • Page 305
    ... rights to all of the Performance Shares or Performance Units subject to the grant, in the event of a Change of Control, in accordance with Section 15 of this Plan. (c) Any grant of Performance Shares or Performance Units will specify Management Objectives which, if achieved, will result in payment...

  • Page 306
    ... debt securities, other rights convertible or exchangeable into Common Shares, purchase rights for Common Shares, 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...

  • Page 307
    ...by the Board, the Committee) may make or provide for such adjustments in the number of Common Shares covered by outstanding Option Rights, Appreciation Rights, Deferred Shares and Performance Shares granted hereunder, the Option Price per Common Share or Base Price per Common Share applicable to any...

  • Page 308
    ...absence approved by the Corporation, provided that such leave of absence constitutes a "separation from service" (as such term is defined under Code Section 409A and the guidance and Treasury regulations issued thereunder), of a Participant who holds an Option Right or Appreciation Right that is not...

  • Page 309
    ... Plan shall (a) if the Participant is an Outside Director, immediately become fully exercisable and nonforfeitable upon the occurrence of such Change of Control of the Corporation or (b) if the Participant is recognized by any Employer as a regular full time employee who is subject to U.S. income...

  • Page 310
    ... to time reserve a specified number of Common Shares, subject to adjustment as provided in Section 11 of this Plan, for grants of Nonqualified Options to New Hires upon commencement of their employment with the Corporation or any Subsidiary, or to any Participant in connection with a promotion or...

  • Page 311
    ... Act, as determined by the Board in accordance with Section 16 of the Exchange Act; (B) the resolution providing for such authorization sets forth the total number of Common Shares such officer(s) may grant; and (iii) the officer(s) shall report periodically to the Board or the Committee, as the...

  • Page 312
    ... in any way with any right the Corporation or any Subsidiary would otherwise have to terminate such Participant's employment or other service at any time. (f) 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...

  • Page 313
    ... 409A or any other provision of federal, state, local, or non-United States law. Neither the Employer, its subsidiaries, nor their respective directors, officers, employees or advisers shall be liable to any Participant (or any other individual claiming a benefit through the Participant) for any tax...

  • Page 314
    ...claim to any particular assets or shares of Sprint Nextel. 2. Restriction Period Your RSUs vest 100 percent on the third anniversary of the closing of the acquisition of Virgin Mobile USA, Inc., or on the date vesting is accelerated as described in paragraph 5 below (the "Vesting Date"), conditioned...

  • Page 315
    ... subject to Section 409A of the Internal Revenue Code (the "Code") that are paid upon Separation from Service. CIC Severance Protection Period is defined in the Plan. It means the time period commencing on the date of the first occurrence of a Change in Control and continuing until the earlier of...

  • Page 316
    ... of shares or any other change in our corporate structure or shares of our Common Stock, an appropriate adjustment will be made consistent with applicable provisions of the Code and applicable Treasury Department rulings and regulations in the number and kind of shares subject to outstanding Awards...

  • Page 317
    ... of Earnings to Fixed Charges For the Years Ended December 31, 2011 2010 2009 (in millions) 2008 2007 Earnings: Loss from continuing operations before income taxes Equity in losses of unconsolidated investments Fixed charges Interest capitalized Amortization of interest capitalized Earnings (loss...

  • Page 318
    ... Sprint Nextel Corporation are as follows: Ownership Interest Held By Its Immediate Parent 100 100 100 100 100 100 100 100 100 1 100 100 99 99 100 1 1 99 100 100 100 100 100 99 Name Alamosa Holdings, Inc. Subsidiary: AirGate PCS, Inc. Subsidiaries: AGW Leasing Company, Inc. AirGate Service Company...

  • Page 319
    ... Sprint WBC of New York, Inc. for SN UHC 2, Inc. subs; see endnote) Nextel Communications, Inc. Subsidiaries: Dial Call Midwest, Inc. NCI 900 Spectrum Holdings, Inc. Subsidiaries: ACI 900, Inc. Velocita Wireless Holding Corp. Subsidiaries: Machine License Holding, LLC Velocita Wireless Holding, LLC...

  • Page 320
    ... Holdings 2, Inc. Nextel License Holdings 4, Inc. Nextel of Puerto Rico, Inc. Subsidiary: Nextel License Holdings 5, Inc. Sprint Nextel Holdings (ME) Corp. Tower Parent Corp. Unrestricted Subsidiary Funding Company Subsidiaries: Nextel 220 License Acquisition Corp. Nextel Broadband, Inc. Nextel Data...

  • Page 321
    .... Nextel WIP License Corp. NPCR, Inc. Subsidiary: Nextel Partners Equipment LLC NPFC, Inc. Nextel Boost Investment, Inc. Subsidiary: Boost Worldwide, Inc. NCI 700, Inc. Sprint Nextel Aviation, Inc. Unrestricted Extend America Investment Corp. Unrestricted Subscriber Equipment Leasing Company, Inc...

  • Page 322
    ... LLC Sprint Corporation Sprint Corporation (Inactive) Sprint Credit General, Inc. Sprint Credit Limited, Inc. Sprint eBusiness, Inc. Sprint Enterprise Mobility, Inc. Sprint Enterprise Network Services, Inc. Sprint eWireless, Inc. Sprint Healthcare Systems, Inc. Sprint International Holding, Inc...

  • Page 323
    ...(see Sprint International Incorporated) SprintLink Netherlands B.V. SprintLink UK Limited Sprint Mexico, Inc. Sprint PCS Canada Holdings, Inc. Sprint Solutions, Inc. Sprint TELECENTERs, Inc. Sprint/United Management Company Sprint Ventures, Inc. Subsidiary: Virgin Mobile USA, L.P. (see Virgin Mobile...

  • Page 324
    ...: Sprint Telephony PCS, L.P. (see Sprint Spectrum Holding Company, L.P.) Subsidiaries: Sprint PCS Assets, L.L.C. Subsidiary: STC One LLC Sprint PCS License, L.L.C. PCS Leasing Company, L.P. (see Sprint Spectrum Holding Company, L.P.) SWV Five, Inc. Subsidiaries: PhillieCo Partners I, L.P. (see...

  • Page 325
    ...Sprint Spectrum Holding Company, L.P. (see SWV One Telephony Partnership) Subsidiaries: American PCS, L.P. (see MinorCo, L.P.) Sprint Telephony PCS, L.P. (see SWV Three Telephony Partnership) PCS Leasing Company, L.P. (see Sprint Telephony PCS, L.P.) Sprint Spectrum L.P. (see MinorCo, L.P.) Wireless...

  • Page 326
    Name (Sprint Nextel Corporation subsidiaries continued) SWV One, Inc. Subsidiary: SWV One Telephony Partnership (see SWV Two, Inc.) Subsidiaries: MinorCo, L.P. (see SWV Six, Inc.) Sprint Spectrum Holding Company, L.P. (see SWV Six, Inc.) Wireless Leasing Co., Inc. (see SWV Two, Inc.) SWV Seven, Inc....

  • Page 327
    ... (see SWV Five, Inc.) PhillieCo Partners II, L.P. (see SWV Five, Inc.) Sprint Spectrum Holding Company, L.P. (see SWV Six, Inc.) Wireless Leasing Co., Inc. (see US Telecom, Inc.) Wireline Leasing Co., Inc. (see US Telecom, Inc.) Sprint Global Venture, Inc. Subsidiary: SGV Corporation US Telecom, Inc...

  • Page 328
    ... Wireline Leasing Co., Inc. (see Sprint International Communications Corporation) Louisiana Louisiana Georgia Georgia Louisiana General Part Louisiana General Part Delaware Kansas Delaware New Jersey Delaware Delaware Partnership Kansas Delaware Mexico Kansas Hong Kong Argentina Brazil Puerto Rico...

  • Page 329
    ...-year period ended December 31, 2011, and the effectiveness of internal control over financial reporting as of December 31, 2011, which report appears in the December 31, 2011 annual report on Form 10-K of Sprint Nextel Corporation. Sprint Nextel Corporation adopted accounting guidance regarding...

  • Page 330
    ...of Sprint Nextel Corporation and subsidiaries of our report dated February 16, 2012, relating to the consolidated financial statements of Clearwire Corporation and subsidiaries appearing in the Annual Report on Form 10-K of Sprint Nextel Corporation for the year ended December 31, 2011. /s/ Deloitte...

  • Page 331
    ... Act of 2002 In connection with the annual report of Sprint Nextel Corporation (the "Company") on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission (the "Report"), I, Joseph J. Euteneuer, Chief Financial Officer of the Company, certify, pursuant to...

  • Page 332
    (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: February 24, 2012 /s/ Joseph J. Euteneuer Joseph J. Euteneuer Chief Financial Officer (Back To Top)