GENERAL | As you know, the Company anticipates entering into a Business Combination Agreement with Sprint Corporation and certain other parties named therein (the “BCA”) on or around April 29, 2018. This Term Sheet confirms our understanding and agreement about your role and certain compensation opportunities with the Company, effective as of the date on which the BCA is fully executed (the “Effective Date”). |
TERM | Subject to the provisions for earlier termination set forth below, the term of this Term Sheet (the “Term”) will commence on the Effective Date and continue until the second (2nd) anniversary thereof (the “Expiration Date”). Your employment remains “at will,” meaning that it may be terminated by you or the Company, for any reason or for no reason whatsoever, with or without notice and with or without cause. The at-will nature of your employment relationship cannot be changed other than by a written agreement signed by you and a duly authorized Company officer. |
POSITION | During the Term, you will continue to serve as the Executive Vice President, Corporate Services of the Company reporting to the Chief Executive Officer (“CEO”). You will have such duties and authority commensurate with the position of Executive Vice President, Corporate Services of the Company and you will perform such other duties commensurate with such position as the CEO may from time-to-time assign. You will continue to devote your full professional time, attention and energies to the business of the Company. Your position will continue to be based in Bellevue, WA. |
COMPENSATION | During the Term, your compensation will be as follows: |
• | You will receive an annual base salary of no less than $775,000 payable in accordance with the Company’s standard payroll practices (but no less often than monthly). |
• | Effective as of the Effective Date, and for each calendar year commencing after the Effective Date during the Term, your annual target STI (“Target STI”) will be no less than 125% of your eligible base earnings during such calendar year. |
• | STI awards will continue be based on the achievement of Company goals (and, as applicable, individual performance) as determined by the Compensation |
• | Effective as of the Effective Date, with the next annual LTI award after such date anticipated to be granted in February 2019, your annual LTI awards will have an annual aggregate grant-date target value (as determined by the Committee) of no less than $4,359,375. |
• | LTI awards will continue to be made in such form and on such terms as the Committee may determine. Each LTI award (including the Transaction PRSUs (as defined below)) will be subject to the terms and conditions of the Company’s 2013 Omnibus Incentive Plan (as amended from time to time, the “Plan”) and an award agreement prescribed by the Company, which shall evidence the grant of the LTI award. |
• | Effective as of the Effective Date, you will be granted a one-time special equity award as follows: |
o | On the Effective Date, the Company will grant to you, under the Plan, a one-time award of performance-based restricted stock units (“PRSUs”) with respect to a number of shares of Company common stock equal to the quotient of $5,719,000 divided by the average closing price of the Company’s common stock over the 90 calendar-day period ending with (and including) April 27, 2018, rounded up to the nearest whole share (the “Transaction PRSUs”). |
o | The Transaction PRSUs will be subject to substantially the same terms and conditions applicable to the award of PRSUs granted to you on February 15, 2018, except that: (i) 50% of the Transaction PRSUs shall be eligible to vest upon the earlier of (x) the closing (the “Closing”) of the transactions (collectively, the “Transaction”) contemplated by the BCA and (y) the Expiration Date, and (ii) the remaining 50% of the Transaction PRSUs shall be eligible to vest on the Expiration Date. Vesting of the Transaction PRSUs shall be based on the Company’s total shareholder return relative to the Company’s peer group during the applicable performance period, subject to your continued employment through the applicable vesting date, and further subject to accelerated vesting upon certain terminations of your employment in accordance the Transaction PRSU award agreement (and any other applicable Company plan or arrangement in which you participate). In addition, for purposes of determining the level of attainment of the total shareholder return performance goals applicable to the Transaction PRSUs, the Company’s and each peer company’s share price shall equal (x) as of the grant date, the volume weighted average price of the Company’s (or such peer company’s) common stock over the 90 calendar-day period ending with (and including) April 27, 2018, (y) as of the Closing, the average closing price of the Company’s (or such peer |
o | The Transaction PRSUs will be administered as exempt from Section 409A (as defined below) for purposes of the application of your Side Letter (defined below) and any relevant agreements or plans (for clarify, the PRSUs will vest upon your Separation under your Side Letter (as defined therein) and be paid to you upon vesting). |
SIDE LETTER | You and the Company acknowledge and agree that the Letter Regarding Eligibility for Certain Payments and Benefits by and between you and the Company, dated February 19, 2018 (the “Side Letter”), remains in effect in accordance with its terms. |
CODE SECTIONS | The payments and benefits described in this Term Sheet are intended to comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). See Attachment A, which is hereby incorporated into this Term Sheet, for additional details. In addition, you acknowledge and agree that the payments and benefits described in this Term Sheet (in addition to any other payments and benefits payable to you by the Company or any affiliate thereof) may be subject to reduction as set forth on Attachment B, which is hereby incorporated into this Term Sheet. |
SUCCESSORS | This Term Sheet is personal to you and, without the prior written consent of the Company, shall not be assignable by you other than by will or the laws of descent and distribution. This Term Sheet shall inure to the benefit of and be binding upon the Company and its successors and assigns. |
WITHHOLDING | All compensation and other benefits to or on behalf of you pursuant to this Term Sheet shall be subject to such deductions and withholding as may be agreed to by you or required by applicable law, rule or regulation or Company policy. |
DISPUTE RESOLUTION | Except for any claims arising out of, or relating to, your restrictive covenant, confidentiality or similar agreement with the Company (the “Restrictive Covenant and Confidentiality Agreement”) (to which you remain bound) and, any other written and fully executed agreements to which you and the Company or an affiliate thereof are parties that expressly provide for a different dispute resolution mechanism, any controversy, claim or dispute arising out of or relating to this Term Sheet or your employment with the Company or termination thereof, either during the existence of the employment relationship or afterward, and including, but not limited to, any common law or statutory claims for wrongful discharge, discrimination or unpaid compensation, shall be resolved exclusively by arbitration in King County, Washington, conducted in accordance with the then prevailing commercial arbitration rules of the American Arbitration Association (the “AAA”), with one arbitrator designated in accordance with those rules. The parties agree to abide by all decisions and awards rendered in such proceedings. Such decisions and awards rendered by the arbitrator shall be final and conclusive and may be entered in any court having jurisdiction thereof as a basis of judgment and of the issuance of execution for its collection. All such controversies, claims or disputes |
ENTIRE AGREEMENT | This Term Sheet, along with the Restrictive Covenant and Confidentiality Agreement, your Side Letter and your STI and LTI award agreements, embody the entire agreement and understanding between the parties with respect to the subject matters hereof (including but not limited to your compensation terms) and supersedes all prior oral and written agreements and understandings between the Company and you with respect to the subject matters hereof, and it can only be modified in a fully executed written agreement between you and a duly authorized Company officer. It may be executed by facsimile and in counterparts which, taken together, shall constitute one original. To the extent the provisions of this Term Sheet are inconsistent with the terms of any underlying compensation plan or program, including without limitation any annual performance bonus plan or the Plan, the terms of this Term Sheet shall control. Notwithstanding the foregoing or anything herein to the contrary, to the extent that the Plan or any short-term incentive or long-term-incentive award agreement provides for more favorable treatment to you of your STI award(s) and/or LTI award(s) than the terms of this Term Sheet, the terms of the Plan or award agreement (as applicable) shall control. For avoidance of doubt, this Term Sheet is not intended to deprive you of any right, entitlement or protection (e.g., indemnification and insurance), in any case, that is not inconsistent with this Term Sheet and that you may have under any other agreement, plan, or policy of the Company applicable to you that may provide more favorable treatment than this Term Sheet, nor is it intended to exclude you from being eligible to receive any employee benefits (provided that such benefits would not result in you receiving a duplication of benefits) that may in the future be broadly provided to similarly-situated employees. Similarly, for avoidance of doubt, this Term Sheet is not intended to relieve you of obligations to the Company or requirements of the Company set forth in any other written agreement, plan, or policy of the Company applicable to you (including, without limitation, the Company’s Executive Incentive Compensation Recoupment Policy as adopted October 30, 2014, as amended from time to time), unless such obligations or requirements are expressly contrary to a commitment in this Term Sheet. This Term Sheet shall be exclusively governed by and interpreted under the laws of the State of Washington. |
EFFECTIVENESS | This Term Sheet shall become effective as of the Effective Date. If the BCA is not fully executed for any reason, this Term Sheet shall be null and void and of no force or effect. |