Sprint - Nextel 2013 Annual Report Download - page 79

Table of Contents
Similarly, a payment in excess of a named executive officer's targeted opportunity may be made if our actual performance exceeds the targeted objectives
(capped at 200%), a payment below targeted opportunity may be made if our actual performance is below the target objectives but exceeded the minimum
threshold level, and no payout would be made if our actual performance does not exceed the minimum threshold level. There were no material changes in our
named executive officers' targeted short
- term incentive opportunities for 2013 compared to 2012.
Long
- Term Incentive Compensation Plan
Our LTIC plan serves our compensation objectives by linking payment to achievement of financial and operational objectives and by linking
executive interests with those of our stockholders.
Pursuant to the SoftBank Merger Agreement and following evaluation of the factors critical to driving long
- term stockholder value, the
Compensation Committee established the components and terms of the 2013 LTIC plan. Since 2009, the Compensation Committee has used performance units
(cash
- settled) as a component of awards under the LTIC plan. This was done during our turnaround phase when the stock price was low and highly volatile.
However, the Compensation Committee returned to awards issued under the 2013 LTIC plan comprised solely of equity in light of the transformative SoftBank
Merger and the desire to provide incentives for achieving long
- term growth and alignment of stockholder interests. The Compensation Committee granted half
of executives' LTIC plan opportunities in the form of performance
- based RSUs and half in time - based RSUs. The time - based RSUs were granted as a component
in order to promote executive retention while allowing us to set aggressive performance goals for the performance
- based RSUs component. In light of these
considerations, the Compensation Committee established awards under the 2013 LTIC plan as follows:
The 2013 LTIC plan places a longer
- term focus on Company earnings and growing subscribers and revenues through establishing cumulative
adjusted EBITDA as the primary performance objective. This metric was chosen for the performance period because it represents a critical financial and strategic
objective. Payment on the adjusted EBITDA objective in excess of 150% up to 200% of the targeted opportunity is contingent on achieving an additional
objective of retail net subscriber additions, which includes both prepaid and postpaid additions but excludes wholesale and affiliate additions. The
Compensation Committee believes use of retail net subscriber additions supports Sprint
’ s core focus of growing our subscriber base.
Mr. Johnson's target compensation under the 2013 LTIC plan increased in connection with his increased responsibilities discussed under "—Base
Salary" above. His LTIC opportunity after the increase remained below median for the peer group.
Other Compensation Decisions for 2013
On September 10, 2013, Mr. Elfman entered into an amendment to his employment agreement. In exchange for continuing his employment through the
earlier of certain specified employment terminations and January 2, 2015, Mr. Elfman is entitled to the following under the amendment: (1) relocation of Mr.
Elfman's place of performance to Seattle, Washington, (2) any change in his reporting relationship to anyone other than the chief executive officer or the board
would constitute an event of "good reason" as defined in the agreement; and (3) following termination under certain circumstances and execution of a general
release, continued and/or prorated accelerated vesting of his then
- outstanding equity as if he was involuntarily terminated without cause on his termination
date.
As a result of the SoftBank Merger, which complicated our ability to accurately measure performance based on the goals that were originally set, the
performance units and performance
- based RSUs granted under the 2012 LTIC plan and, with respect to the 2013 annual performance period, the 2011 LTIC plan,
were deemed met at target. Amounts deemed earned at target for these awards are included in the summary compensation table in the “Non
- Equity Incentive
Plan Compensation”
column for 2013.
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Time - based RSUs—vest on February 27, 2016.
•
Performance - based RSUs—vest on February 27, 2016, with payout conditioned on achievement of a predetermined performance objective
during a single two
- year performance period of 2014 - 2015.