SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 19, 2003
SPRINT CORPORATION
(Exact name of Registrant as specified in its charter)
Kansas 1-04721 48-0457967
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
6200 Sprint Parkway, Overland Park, Kansas 66251
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (913) 624-3000
(Former name or former address, if changed since last report)
P. O. Box 11315, Kansas City, Missouri 64112
(Mailing address of principal executive offices)
Item 5. Other Events.
1) Settlement of Shareholder Litigation. On March 19, 2003, the registrant
("Sprint") announced a settlement, subject to court approval, of the securities
class-action and derivative lawsuits relating to the failed merger with
WorldCom. The press release was as follows:
Sprint Settles Shareholder Litigation
OVERLAND PARK, Kan. - March 19, 2003 - Sprint (NYSE: FON, PCS) today announced a
settlement, subject to court approval, of the securities class-action and
derivative lawsuits relating to the failed merger with WorldCom. The settlement
does not reflect any admission of liability by the company or its directors and
officers, and there has been no finding of any violation of federal securities
laws.
The securities class action litigation is pending in federal district court in
Kansas as In re Sprint Corporation Securities Litigation, Master File No.
01-4080- DES. The derivative case is pending in state court in Jackson County,
Mo., as Amalgamated Bank v.LeMay, Case No. 00 CV 230077.
In the settlement of the securities class action, Sprint agreed to pay $50
million, most of which should be covered by insurance. Sprint and its insurance
carriers are currently in litigation over which year's insurance policies apply
to the claim. Sprint intends to record a charge in the first quarter for the
entire settlement less undisputed insurance coverage amounts.
The settlement in the derivative action will include the adoption of
enhancements to the Company's corporate governance policies and practices; an
agreement by current board members and senior management to certain restrictions
on options, or any stock obtained through the exercise of options accelerated by
the shareholder approval of the WorldCom merger; and the payment of plaintiff's
attorneys' fees in the form of 250,000 FON shares and 500,000 PCS shares, which
have a combined value of about $5 million. The corporate enhancements agreed to
in this settlement, along with others adopted by Sprint's board and being
announced today, will put Sprint in the forefront of best governance practices.
William T. Esrey, Sprint's chairman, said, "We are pleased to have this matter
settled. We can now put the distraction and expense of this litigation behind
us."
About Sprint Sprint is a global communications company serving more than 26
million business and residential customers in over 70 countries. With
approximately 72,000 employees worldwide and nearly $27 billion in annual
revenues, Sprint is widely recognized for developing, engineering and deploying
state-of-the-art network technologies, including the United States' first
nationwide all-digital, fiber-optic network and an award-winning Tier 1 Internet
backbone. Sprint provides local voice and data services in 18 states and
operates the largest 100-percent digital, nationwide PCS wireless network in the
United States.
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2) Sprint Strengthens its Corporate Governance. On March 19, 2003, Sprint
also announced enhancements to its corporate governance practices. The press
release was as follows:
Sprint Strengthens its Corporate Governance
Actions consistent with company's commitment to be at forefront of best
practices in corporate governance
OVERLAND PARK, Kan. - March 19, 2003 - Sprint (NYSE: FON, PCS) today announced
enhancements to its corporate governance practices and strengthened functioning
of its board of directors in order to better serve the long-term interests of
its shareholders, employees and other stakeholders.
The actions, which were unanimously approved by Sprint's board of directors, are
consistent with the company's commitment to be at the forefront of "best
practices" in corporate governance. The enhancements, some of which have already
been implemented and many others that are effective immediately, are consistent
with requirements of the Sarbanes-Oxley legislation, the proposed New York Stock
Exchange corporate governance standards, as well as Sprint's own intent to be at
the leading edge of good governance practices.
"Both the board and the management of Sprint are committed to adhering to the
highest corporate governance standards and to strengthening the oversight role
of the board. I am pleased to take on the role of lead independent director and
am confident that the steps we have announced today not only demonstrate our
commitment to being a leader in corporate governance but also make Sprint an
even stronger company," said Irvine O. Hockaday Jr.
"Since the summer of 2002, our newly formed Nominating and Corporate Governance
Committee has been designing a comprehensive set of corporate governance
initiatives and focused on how we can enhance our existing policies and
procedures. The changes that we have already made since last summer and the
other enhancements to Sprint's existing corporate governance policies and
practices that we are implementing today have all been unanimously approved by
the board and they ensure that the company is among the leaders in the best
practices of governance in corporate America. The changes also incorporate
corporate governance enhancements agreed to in settlement of litigation relating
to the failed merger with WorldCom. The board views this committee's work to be
on-going, and we will continue to study other governance concepts and not
hesitate to institute further enhancements in our governance if warranted," said
Linda Koch Lorimer, chairperson of the board's Nominating and Governance
committee.
The company will make details regarding these initiatives available on its Web
site at www.sprint.com.
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As part of the corporate governance enhancements, the company will request
shareholder approval to eliminate three-year staggered terms in the company's
2003 proxy statement. This decision prompted the board to delay the company's
annual shareholder meeting until May 13, 2003, to provide for the required
review time of the proxy statement by the Securities and Exchange Commission.
The Board also adopted a policy, starting with respect to tax years after 2002,
which prohibits Sprint's independent auditors from providing professional
services to certain officers.
Among the other actions that the company either has already implemented or has
adopted today include:
o Creation of a new position, the lead independent director, which will be
held by Mr. Hockaday. In this position, Mr. Hockaday will serve as the
primary interface between the outside directors, chairman and CEO of
Sprint. The lead independent director will also chair meetings of the
outside directors.
o The creation, in August, 2002, of a nominating and governance committee
comprised of three independent directors, Ms. Lorimer, Mr. Hockaday and
Stewart Turley. Ms. Lorimer is chairperson of this committee.
o Adoption of strict independence standards for directors, and a goal to have
two-thirds of the board consist of independent directors by the 2004 Annual
Meeting of Shareholders.
o Adoption of a revised audit committee charter that is consistent with the
Sarbanes-Oxley Act and the proposed New York Stock Exchange corporate
governance standards.
o Adoption of a policy to expense all stock options issued by the company on
or after January 1, 2003.
o Establishment of term limits for the outside directors and limits on the
number of other public company boards on which Sprint directors can serve
o Formalization of the existing practice of regular meeting of outside
directors
o Approval of a revised code of ethics, The Sprint Principles of Business
Conduct, which applies to all employees and directors of Sprint and its
subsidiaries and complies with the Sarbanes-Oxley Act and proposed NYSE
corporate governance standards.
About Sprint
Sprint is a global communications company serving more than 26 million business
and residential customers in over 70 countries. With approximately 72,000
employees worldwide and nearly $27 billion in annual revenues, Sprint is widely
recognized for developing, engineering and deploying state-of-the-art network
technologies, including the United States' first nationwide all-digital,
fiber-optic network and an award-winning Tier 1 Internet backbone. Sprint
provides local voice and data services in 18 states and operates the largest
100-percent digital, nationwide PCS wireless network in the United States.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized.
SPRINT CORPORATION
Date: March 19, 2003 By: /s/ Michael T. Hyde
Michael T. Hyde
Assistant Secretary
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