Sprint Corporation (NYSE:S) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02
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Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers. |
Chief Operating Officer Appointment
On January 24, 2017, Sprint Corporation (Sprint) announced that
Nestor Cano, 52, has agreed to become Chief Operating Officer of
Sprint effective on February 2, 2017 (the Effective Date). The
press release is filed as Exhibit 99.1 to this Form 8-K and is
incorporated by reference herein.
Nestor Cano, 52, has agreed to become Chief Operating Officer of
Sprint effective on February 2, 2017 (the Effective Date). The
press release is filed as Exhibit 99.1 to this Form 8-K and is
incorporated by reference herein.
Mr. Cano has been the President, Europe of Tech Data Corporation
since June 2007. Tech Data Corporation (TDC) is listed on NASDAQ
and is one of the worlds largest wholesale distributors of
technology products. Mr. Cano joined TDC in July 1989 as a
Software Product Manager and served in various management
positions within TDCs operations in Spain and Portugal from 1990
to 1995, after which time he was promoted to Regional Managing
Director. In March 1999, he was appointed Executive Vice
President of U.S. Sales and Marketing, and in January 2000 was
promoted to President, the Americas. Mr. Cano was promoted to
President, Worldwide Operations in August 2000 and was appointed
to President, Europe in June 2007.
since June 2007. Tech Data Corporation (TDC) is listed on NASDAQ
and is one of the worlds largest wholesale distributors of
technology products. Mr. Cano joined TDC in July 1989 as a
Software Product Manager and served in various management
positions within TDCs operations in Spain and Portugal from 1990
to 1995, after which time he was promoted to Regional Managing
Director. In March 1999, he was appointed Executive Vice
President of U.S. Sales and Marketing, and in January 2000 was
promoted to President, the Americas. Mr. Cano was promoted to
President, Worldwide Operations in August 2000 and was appointed
to President, Europe in June 2007.
On January 19, 2017, Sprint entered into an employment agreement
with Mr. Cano (the Agreement) with an initial term of four years
from the Effective Date. The Agreement provides for the following
annual compensation:
with Mr. Cano (the Agreement) with an initial term of four years
from the Effective Date. The Agreement provides for the following
annual compensation:
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an annual base salary of $1,300,000;
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participation in Sprint’s short-term incentive
compensation plan with a targeted annual opportunity equal to 50% of his annual base salary; and |
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participation in Sprint’s long-term incentive
compensation plan with a targeted annual opportunity equal to $1,625,000. |
The Agreement states that Sprint will provide Mr. Cano with the
following sign-on compensation:
following sign-on compensation:
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a $300,000 cash sign-on bonus payable as soon as
administratively practicable after the Effective Date, subject to repayment if Mr. Cano resigns within two years after his Effective Date; and |
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an award of restricted stock units (the Make-Whole RSUs)
in consideration for certain forfeited restricted stock units from his former employer, subject to Sprints Omnibus Incentive Plan and governed by the Evidence Award substantially in the form attached to the Agreement as Exhibit B, and the value of which will be $2,397,468, with the number of restricted stock units to be determined using Sprints grant methodology and practices for other Sprint senior executives. |
The Agreement provides for an award of 1.75 million shares of
restricted stock units which can be earned upon the achievement
of specified volume-weighted average prices of Sprints common
stock during any 150-calendar day period during the period from
February 2, 2017 through May 31, 2019, with vesting of earned
shares occurring 50 percent on February 1, 2020, and 50 percent
occurring on February 1, 2021 (the Turnaround RSU Award).
restricted stock units which can be earned upon the achievement
of specified volume-weighted average prices of Sprints common
stock during any 150-calendar day period during the period from
February 2, 2017 through May 31, 2019, with vesting of earned
shares occurring 50 percent on February 1, 2020, and 50 percent
occurring on February 1, 2021 (the Turnaround RSU Award).
The Agreement provides that Mr. Canos job location will be in
Overland Park, Kansas and that he will relocate his primary
residence to the area under the standard officer relocation
program.
Overland Park, Kansas and that he will relocate his primary
residence to the area under the standard officer relocation
program.
The Agreement also provides that if (1) Sprint provides notice of
non-renewal of the employment term and Mr. Canos employment
terminates upon the resulting expiration of the employment term,
and (2) Mr. Cano has no earned shares under his Turnaround RSU
Award, Sprint will pay Mr. Cano $1,563,347 cash in a lump sum as
soon as practicable after such termination. If Mr. Cano has
earned shares under his Turnaround RSU Award, however, he will
not receive this lump sum and will receive no severance.
non-renewal of the employment term and Mr. Canos employment
terminates upon the resulting expiration of the employment term,
and (2) Mr. Cano has no earned shares under his Turnaround RSU
Award, Sprint will pay Mr. Cano $1,563,347 cash in a lump sum as
soon as practicable after such termination. If Mr. Cano has
earned shares under his Turnaround RSU Award, however, he will
not receive this lump sum and will receive no severance.
Under the Agreement, in the event that Mr. Canos employment is
terminated by Sprint without cause (as defined in the Agreement),
or Mr. Cano terminates his employment for good reason (as defined
in the Agreement), other than in connection with a change in
control of Sprint and subject to a release of claims:
terminated by Sprint without cause (as defined in the Agreement),
or Mr. Cano terminates his employment for good reason (as defined
in the Agreement), other than in connection with a change in
control of Sprint and subject to a release of claims:
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he will continue to receive his base salary for 24 months
following his termination date (the Payment Period); |
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he will receive a payment under the then-applicable
short-term incentive plan during the Payment Period equal to the lesser of his targeted opportunity as of his termination date and the payout determined by Sprint’s Compensation Committee based on actual performance of Sprint compared to the targeted objectives under the plan; |
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he will be entitled to participate in certain benefit
plans during the Payment Period; and |
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the restrictions with respect to any unvested portions of
the Make-Whole RSUs will lapse as of his termination date. |
In addition, in the event that Mr. Canos employment is terminated
by Sprint without cause (as defined in the Agreement) after the
second anniversary of his Effective Date, the restrictions with
respect to the Turnaround RSU Award will lapse for a pro-rata
number of the shares earned upon achievement of the price targets
that would have otherwise been received without such termination
on the vesting date, based on the number of days Mr. Cano was
employed during the performance period over the entire
performance period.
by Sprint without cause (as defined in the Agreement) after the
second anniversary of his Effective Date, the restrictions with
respect to the Turnaround RSU Award will lapse for a pro-rata
number of the shares earned upon achievement of the price targets
that would have otherwise been received without such termination
on the vesting date, based on the number of days Mr. Cano was
employed during the performance period over the entire
performance period.
Upon Mr. Canos death, the restrictions with respect to any unvested
portions of the Make-Whole RSUs would lapse and a pro rata portion
of any earned shares under the Turnaround RSU Award would lapse as
described above.
portions of the Make-Whole RSUs would lapse and a pro rata portion
of any earned shares under the Turnaround RSU Award would lapse as
described above.
In the event of Mr. Canos termination of employment due to
disability, he will continue to receive his base salary for 12
months (reduced by any amounts paid under Sprints long-term
disability plan), he will be entitled to continue to participate in
certain benefit plans for such period, and the restrictions with
respect to any unvested portion of the Make-Whole RSUs will lapse
as of his termination date. In addition, a pro rata portion of any
earned shares under the Turnaround RSU Award would lapse as
described above.
disability, he will continue to receive his base salary for 12
months (reduced by any amounts paid under Sprints long-term
disability plan), he will be entitled to continue to participate in
certain benefit plans for such period, and the restrictions with
respect to any unvested portion of the Make-Whole RSUs will lapse
as of his termination date. In addition, a pro rata portion of any
earned shares under the Turnaround RSU Award would lapse as
described above.
If, in connection with a change in control of Sprint, Mr. Canos
employment is terminated without cause or Mr. Cano terminates his
employment for good reason during the 18-month period following a
change in control (subject to certain exceptions), subject to a
release of claims, he is entitled to severance compensation in the
form of a lump sum payment of two times his base salary and two
times his annual short-term target opportunity as of the date of
his termination of employment, to participate in certain benefit
plans during the Restricted Period (as defined below) and to the
lapse as of his termination date of the restrictions with respect
to any unvested portion of the Make-Whole RSUs. With respect to the
Turnaround RSU Award, earned shares (if any) will be the greater of
the achievement based on (1) volume-weighted average prices of
Sprints common stock over any 150-calendar day period as of the
date of the change in control as compared to the price targets, or
(2) the consideration per share of Sprint stock in connection with
the change in control as compared to the price targets. Any earned
shares under the previous sentence will vest on the vesting date as
specified, unless the continuing entity fails to assume the RSUs,
in which case vesting will accelerate without proration as of the
date of the change in control. In addition, if during the 18-month
period, Mr. Canos employment is terminated by Sprint without cause,
or Mr. Cano terminates his employment for good reason, any earned
shares will immediately vest and become payable without proration.
Change in Control for this award is as defined in the equity plan
in effect, except that acquisition by SoftBank Group Corp. or its
subsidiaries of 50% of Sprints shares (such that Sprint ceases to
have any class of equity securities listed on a national securities
exchange) will not be governed by the acceleration provisions upon
a change in control.
employment is terminated without cause or Mr. Cano terminates his
employment for good reason during the 18-month period following a
change in control (subject to certain exceptions), subject to a
release of claims, he is entitled to severance compensation in the
form of a lump sum payment of two times his base salary and two
times his annual short-term target opportunity as of the date of
his termination of employment, to participate in certain benefit
plans during the Restricted Period (as defined below) and to the
lapse as of his termination date of the restrictions with respect
to any unvested portion of the Make-Whole RSUs. With respect to the
Turnaround RSU Award, earned shares (if any) will be the greater of
the achievement based on (1) volume-weighted average prices of
Sprints common stock over any 150-calendar day period as of the
date of the change in control as compared to the price targets, or
(2) the consideration per share of Sprint stock in connection with
the change in control as compared to the price targets. Any earned
shares under the previous sentence will vest on the vesting date as
specified, unless the continuing entity fails to assume the RSUs,
in which case vesting will accelerate without proration as of the
date of the change in control. In addition, if during the 18-month
period, Mr. Canos employment is terminated by Sprint without cause,
or Mr. Cano terminates his employment for good reason, any earned
shares will immediately vest and become payable without proration.
Change in Control for this award is as defined in the equity plan
in effect, except that acquisition by SoftBank Group Corp. or its
subsidiaries of 50% of Sprints shares (such that Sprint ceases to
have any class of equity securities listed on a national securities
exchange) will not be governed by the acceleration provisions upon
a change in control.
Throughout his employment and through the 24-month period following
Mr. Canos date of termination (the Restricted Period), Mr. Cano has
agreed not to compete with Sprint or solicit employees or customers
of Sprint. If Mr. Cano breaches any of these obligations, he would
forfeit his right to any future severance payments and benefits to
which he otherwise would be entitled.
Mr. Canos date of termination (the Restricted Period), Mr. Cano has
agreed not to compete with Sprint or solicit employees or customers
of Sprint. If Mr. Cano breaches any of these obligations, he would
forfeit his right to any future severance payments and benefits to
which he otherwise would be entitled.
The Agreement is filed as Exhibit 10.1 to this Form 8-K and is
incorporated by reference herein.
incorporated by reference herein.
Roger Sol Retention Award
On January 18, 2017, Sprint Corporations Compensation Committee
approved a cash retention payment to Roger Sol, Chief Marketing
Officer, in the amount of $200,000. The cash retention payment
must be repaid by Mr. Sol if he voluntarily leaves the Company
within one year from the payment date.
approved a cash retention payment to Roger Sol, Chief Marketing
Officer, in the amount of $200,000. The cash retention payment
must be repaid by Mr. Sol if he voluntarily leaves the Company
within one year from the payment date.
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Item 9.01
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Financial Statements and Exhibits.
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(d) Exhibits
The following exhibits are filed with this report:
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Exhibit No.
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Description
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10.1
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Employment Agreement, executed as of January 19, 2017,
between Nestor Cano and Sprint Corporation |
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99.1
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Press Release
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About Sprint Corporation (NYSE:S)
Sprint Corporation (Sprint) is a holding company. The Company, along with its subsidiaries, is a communications company offering a range of wireless and wireline communications products and services that are designed to meet the needs of consumers, businesses, government subscribers and resellers. It operates through two segments: Wireless and Wireline. The Company offers wireless services on a postpaid and prepaid payment basis to retail subscribers and also on a wholesale basis. The Wireline segment provides voice, data and Internet Protocol (IP) communication services to its Wireless segment. The Company offers wireless and wireline services to subscribers in approximately 50 states, Puerto Rico, and the United States Virgin Islands under the Sprint corporate brand, which includes its retail brands of Sprint, Boost Mobile, Virgin Mobile and Assurance Wireless on its wireless networks utilizing various technologies. Sprint Corporation (NYSE:S) Recent Trading Information
Sprint Corporation (NYSE:S) closed its last trading session down -0.03 at 9.15 with 17,439,359 shares trading hands.