Document

10-K/A 1 sprintcorpform10-ka20190331.htm 10-K/A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-K/A

(Amendment No. 1)

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x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2019



o		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

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SPRINT CORPORATION

(Exact name of registrant as specified in its charter)

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Delaware	46-1170005
(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)

Registrant's telephone number, including area code: (913) 794-1091

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.01 par value	S	New York Stock Exchange

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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 x No o

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 o No x

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 period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Aggregate market value of voting and non-voting common stock equity held by non-affiliates of Sprint Corporation at September 30, 2018 was $4,088,584,646

COMMON STOCK OUTSTANDING AT MAY 28, 2019: 4,090,807,600 shares

DOCUMENTS INCORPORATED BY REFERENCE

None.

SPRINT CORPORATION

TABLE OF CONTENTS



		Page Reference
Item

	PART III
10.	Directors, Executive Officers and Corporate Governance	2
11.	Executive Compensation	7
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	37
13.	Certain Relationships and Related Transactions, and Director Independence	39
14.	Principal Accounting Fees and Services	44

	PART IV
15.	Exhibits and Financial Statement Schedules	45
16.	Form 10-K Summary	45

EXPLANATORY NOTE

Sprint Corporation (the “Company,” “we,” “us” or “our”) filed its Annual Report on Form 10-K for the fiscal year ended March 31, 2019 (“Form 10‑K”) with the U.S. Securities and Exchange Commission (the “SEC”) on May 29, 2019. The Company is filing this Amendment No. 1 to the Form 10-K (“Form 10-K/A”) solely for the purpose of including in Part III the information that was to be incorporated by reference from its definitive proxy statement for the 2019 annual meeting of stockholders because, in light of the Company’s pending merger with T-Mobile US, Inc. (“T-Mobile”), the Company's definitive proxy statement will not be filed with the SEC within 120 days after the end of its fiscal year ended March 31, 2019. The reference on the cover page of the Form 10-K to the incorporation by reference to portions of our definitive proxy statement into Part III of the Form 10-K has been deleted. This Form 10-K/A hereby amends and restates in its entirety the Form 10-K cover page and Items 10 through 14 of Part III.

Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), this Form 10-K/A also contains new certifications by the principal executive officer and the principal financial officer as required by Section 302 of the Sarbanes-Oxley Act of 2002. Accordingly, Item 15(a)(3) of Part IV is amended to include the currently dated certifications as exhibits.

Except as expressly noted in this Form 10-K/A, this Form 10-K/A does not reflect events occurring after the original filing of the Form 10-K or modify or update in any way any of the other disclosures contained in the Form 10-K including, without limitation, the financial statements. Accordingly, this Form 10-K/A should be read in conjunction with the Company's Form 10-K and the Company's other filings with the SEC.

SPRINT CORPORATION

SECURITIES AND EXCHANGE COMMISSION

ANNUAL REPORT ON FORM 10-K

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors

Our bylaws currently fix the number of directors at ten. Our board is currently composed of ten directors.

We are a “controlled company” within the meaning of the New York Stock Exchange (NYSE) listing standards, as described below, because SoftBank Group Corp. (f/k/a Softbank Corp.) and certain of its wholly-owned subsidiaries (together, “SoftBank”) hold more than 50% of the voting power for the election of our directors. SoftBank owned nearly 85% of Sprint Corporation (“Sprint” or the “Company” or “we,” “our,” or “us”) as of the date of this Form 10-K/A.

For so long as SoftBank remains our controlling stockholder, our governing documents confer upon SoftBank certain rights. For example, SoftBank is able to elect all of the directors on our board. However, until SoftBank owns less than 50% of our outstanding voting power, the board will be required to include at least three independent directors or such greater number as may be required by applicable law or applicable rules of the stock exchange on which our stock is traded.

We consider all directors nominated by SoftBank, except our President and Chief Executive Officer (CEO), to be “SoftBank Designees.” SoftBank Designees who are not independent are known as “SoftBank Affiliate Directors.” In accordance with our bylaws, our board currently consists of our President and CEO (Michel Combes), five independent SoftBank Designees (Patrick Doyle, Gordon Bethune, Julius Genachowski, Stephen Kappes, and Sara Martinez Tucker), and four SoftBank Affiliate Directors (Masayoshi Son, Ronald Fisher, Marcelo Claure and Adm. Michael Mullen). If at any time SoftBank owns less than 50% of our outstanding voting power for ninety consecutive days, the board shall include a number of “SoftBank Designees” that is proportional to SoftBank’s voting interest, rounded up to the nearest whole number.

The following people were serving as our directors as of the date of this Form 10-K/A. Each of our directors was elected to serve until their successors have been elected. There is no familial relationship between any of our executive officers and directors.

GORDON BETHUNE, 78, Sprint director since 2004; retired Chairman and Chief Executive Officer of Continental Airlines, Inc.

Public Company Board Directorships: Park Hotels & Resorts Inc.

Former Public Company Directorships Held During the Past Five Years: Honeywell International Inc. and Prudential Financial, Inc.

Biography: Mr. Bethune served as Chief Executive Officer of Continental Airlines from 1994 until December 30, 2004 and as Chairman from 1996 until December 30, 2004.

Qualifications: Mr. Bethune has extensive experience serving as a chief executive officer and director of large international corporations, providing our board with the perspective of someone familiar with all facets of an international enterprise. He has extensive experience with developing and implementing strategies and policies for the acquisition and development of employee talent.

MARCELO CLAURE, 48, Sprint director since 2014; Executive Chairman of Sprint

Public Company Board Directorships: SoftBank Group Corp.

Biography: Mr. Claure was named our Executive Chairman, effective May 31, 2018, and has served on the Sprint board of directors since January 2014. Previously, Mr. Claure served as our President and Chief Executive Officer, serving as President from August 2014 until January 2018 and as Chief Executive Officer from August 2014 until May 2018. Mr. Claure currently serves as Chief

Operating Officer of SoftBank Group Corp. and as Chief Executive Officer of SoftBank Group International. In addition, Mr. Claure has served as a director of SoftBank Group Corp. since June 2017 and currently serves as a director of Arm Limited and as Chairman of Brightstar, each a subsidiary of SoftBank Group Corp. Prior to joining Sprint, he was Chief Executive Officer of Brightstar, a company he founded in 1997 and grew from a small Miami-based distributor of mobile device accessories into a global business with more than $10 billion in gross revenue for the year ended 2013.

Qualifications: As our Executive Chairman, Mr. Claure provides our board with unparalleled insight into our Company’s operations. In addition, his successful tenure serving as Chief Executive Officer for almost four years, and his continued leadership as Executive Chairman, allows Mr. Claure to serve as the board’s advocate in representing the Company on securing regulatory approval of the Company’s contemplated merger with T-Mobile. His experience in the telecommunications industry while making Brightstar one of the largest global distribution, services, and innovation companies in the industry provides a valuable perspective to our board.

MICHEL COMBES, 57, Sprint director since January 2018; President and Chief Executive Officer of Sprint

Public Company Board Directorships: F5 Networks, Inc.

Former Public Company Directorships Held During the Past Five Years: Altice N.V. and Altice USA, Inc.

Biography: Mr. Combes was named our Chief Executive Officer, effective May 31, 2018, and our President, effective January 6, 2018, and has served on the Sprint board of directors since January 2018. Previously, Mr. Combes served as our Chief Financial Officer from January 2018 until May 2018. Mr. Combes has more than 25 years of experience in the telecommunications industry. Prior to joining Sprint, Mr. Combes was CEO and a director of Altice N.V., where he was responsible for telecom, media, and content operations around the world from June 2016 until November 2017. Previously, Mr. Combes served as Chief Operating Officer of Altice N.V. from September 2015 until June 2016, and as CEO and Chairman of Altice SFR Group from September 2015 until November 2017. In addition, Mr. Combes served as a director of Altice USA, Inc. from June 2017 until November 2017. Before joining Altice N.V., Mr. Combes was CEO of Alcatel-Lucent from September 2013 until September 2015. Previously, he served as CEO of Vodafone Europe, Chairman and CEO of TDF Group, and Chief Financial Officer and Senior Executive Vice President of France Telecom. Mr. Combes serves on the board of directors of CTIA -The Wireless Association.

Qualifications: As our President and Chief Executive Officer, Mr. Combes is able to apprise the board of the operational and financial results as they occur and provide insight into the environment in which the Company operates. Mr. Combes’s experience providing leadership through complex merger and acquisition transactions is particularly valuable to the board. His experience in the telecommunications industry in Europe provides a valuable perspective to our board on best practices and alternative solutions.

PATRICK DOYLE, 63, Sprint director since 2016; former Chief Financial Officer of DIRECTV

Public Company Board Directorships: None

Biography: Mr. Doyle served as Chief Financial Officer of DIRECTV from 2007 until DIRECTV’s acquisition by AT&T in 2015, where he was responsible for all internal and external financial affairs within DIRECTV, including accounting, financial planning, treasury, business management, investor relations, audit, and tax. Mr. Doyle joined DIRECTV in 2000 and served in several executive roles before becoming Chief Financial Officer, including as Chief Accounting Officer, Controller, and Treasurer during his tenure at DIRECTV. Previously, he worked at Baker Hughes beginning in 1982 and eventually Hughes Electronics Corporation (the predecessor to DIRECTV) in various tax and corporate development roles. Prior to that, Mr. Doyle worked for four years at the public accounting firm of Deloitte & Touche.

Qualifications: Mr. Doyle’s experience as a senior executive paired with his extensive financial expertise provides our board with valuable insight into the financial and economic issues facing our Company. In addition, Mr. Doyle is able to leverage his understanding of the financial aspects of complex merger transactions, derived while serving as Chief Financial Officer of DIRECTV during its acquisition by AT&T, to provide our board with unique insight.

RONALD FISHER, 71, Vice Chairman of the Board and Sprint director since 2013

Public Company Board Directorships: SoftBank Group Corp.

Biography: Mr. Fisher has over 30 years of experience working with high growth and turnaround technology companies. Mr. Fisher joined SoftBank in 1995, overseeing its U.S. operations and other activities outside of Asia, and was the founder of SoftBank Capital. Prior to joining SoftBank, Mr. Fisher was the Chief Executive Officer of Phoenix Technologies Ltd., the leading developer and marketer of system software products for personal computers, from 1990 to 1995. Mr. Fisher joined Phoenix from Interactive Systems Corporation, a UNIX software company that was purchased by the Eastman Kodak Company in 1988. He served for five years as President of Interactive Systems, initially as Chief Operating Officer and then Chief Executive Officer. Mr. Fisher’s experience prior to Interactive Systems includes senior executive positions at Visicorp, TRW, and ICL (USA). Mr. Fisher currently serves as a director of Arm Limited and previously served as Chairman of Brightstar Global Group Inc., each a subsidiary of SoftBank Group Corp.

Qualifications: Mr. Fisher possesses particular knowledge and experience in technology industries, and with strategic planning and leadership of complex organizations, including at other public companies. In addition, Mr. Fisher’s extensive merger and acquisition experience is particularly essential to our board.

JULIUS GENACHOWSKI, 57, Sprint director since 2015; Managing Director of The Carlyle Group

Public Company Board Directorships: Mastercard, Inc. and Sonos, Inc.

Biography: Mr. Genachowski is a Managing Director at The Carlyle Group, a private investment company, which he joined in 2014. He served as Chairman of the U.S. Federal Communications Commission (“FCC”) from 2009 to 2013. Prior to serving at the FCC, he held senior executive positions at IAC/InterActiveCorp, which owned and operated multiple Internet and media businesses, and he was engaged with several public and private companies in the technology, media and telecommunications sector as a board member, investor or advisor. He has served on the President’s Intelligence Advisory Board and has taught a joint class at Harvard Business and Law Schools. Earlier in his career, he worked in Congress for the Select Committee on the Iran-Contra Affair, for then-Representative Charles Schumer, and he was a law clerk to U.S. Supreme Court Justice David H. Souter.

Qualifications: Mr. Genachowski’s experience as a senior executive and director at Internet, media, technology and other companies involved with digital communications, paired with his experience as former Chairman of the FCC, provides our board with a valuable perspective on the business and regulatory environments in which our Company operates, particularly as it applies to the Company’s contemplated merger with T-Mobile. Mr. Genachowski also adds valuable financial knowledge through experience in private equity and at a large operating company and experience with global matters in both the private sector and government.

STEPHEN R. KAPPES, 67, Sprint director since May 2018; former Deputy Director of the Central Intelligence Agency

Public Company Board Directorships: None

Biography: Mr. Kappes serves on the board of directors as the “Security Director” under the National Security Agreement among Sprint, SoftBank, the Department of Justice (DOJ), the Department of Homeland Security, and the Department of Defense (NSA). Mr. Kappes is a Partner and Chief Operating Officer of Torch Hill Investment Partners, a private equity firm. Previously, Mr. Kappes served as Deputy Director of the Central Intelligence Agency (CIA) from January 2006 until May 2010. During his almost 30 years of service with the CIA, Mr. Kappes served in a variety of leadership positions, including serving as Deputy Director of Operations, Associate Deputy Director of Operations and Associate Deputy Director for Counterintelligence. Before joining the CIA, he was a Captain in the United States Marine Corps. Mr. Kappes has served as a director of two wholly-owned subsidiaries of Sprint since July 2013, including serving on the Government Security Committee. He is also a member of the Board of Directors of the Atlantic Council.

Qualifications: Mr. Kappes’s almost 30 years of service with the CIA, where he served in senior management and leadership positions under two Directors and two Presidential administrations, allows him to provide guidance on national security matters impacting the telecommunications industry. Mr. Kappes also adds valuable financial knowledge through experience in the private sector. In addition to his experience in the public and private sectors, Mr. Kappes is able to leverage his long-standing relationships within the government to effectively lead our Government Security Committee.

ADM. MICHAEL MULLEN, 72, Sprint director since 2013; former 17th Chairman of the Joint Chiefs of Staff

Public Company Board Directorships: None

Former Public Company Directorships Held During the Past Five Years: General Motors Company

Biography: From September 2013 until May 30, 2018, Admiral Mullen served on the board of directors as the “Security Director” under the NSA. On June 1, 2018, Admiral Mullen was appointed to serve as Chairman of the SoftBank Advisory Board, which advises the SoftBank Vision Fund on national security considerations that may arise from certain investments. Admiral Mullen served as the 17th Chairman of the Joint Chiefs of Staff from October 2007 until his retirement in September 2011. Previously, Admiral Mullen served as the 28th Chief of Naval Operations (“CNO”) from July 2005 to 2007. CNO was one of four different four-star assignments Admiral Mullen held, including Commander, U.S. Naval Forces Europe and Commander, Allied Joint Force Command, and the 32nd Vice Chief of Naval Operations. Since 2012, he has served as President of MGM Consulting LLC and is the Charles and Marie Robertson Visiting Professor at the Woodrow Wilson School of Public and International Affairs at Princeton University. He also sits on the Board of the Bloomberg Family Foundation. Admiral Mullen served on the board of directors of General Motors Company from 2013 until June 2019, where he chaired the Risk Committee and was a member of the Audit Committee.

Qualifications: Adm. Mullen brings to our board extensive senior leadership experience gained during his 43-year career in the U.S. military and almost eight years in the private sector. As Chairman of the Joint Chiefs of Staff, the highest ranking officer in the U.S. military, Adm. Mullen led the armed forces during a critical period of transition, overseeing two active war zones. Adm. Mullen’s unique experience leading change in complex organizations, executive development and succession planning, diversity implementation, crisis management, strategic planning, budget policy, risk management, and technical innovation are important to the oversight of Sprint’s business and allows him to make a significant and invaluable contribution to our board.

MASAYOSHI SON, 61, Sprint director since 2013; Chief Executive Officer and Chairman of the Board of SoftBank Group Corp.

Public Company Board Directorships: SoftBank Group Corp., SoftBank Corp., Alibaba Group Holding Limited and Yahoo Japan Corporation

Biography: Mr. Son founded SoftBank Corp. (now SoftBank Group Corp.) in September 1981 and has been its Chairman and Chief Executive Officer since February 1986. Mr. Son serves in various capacities within SoftBank's portfolio of companies, including SoftBank Corp. (Japanese Telecommunication Operator) as its Chairman since 2015 and served as its Chairman and Chief Executive Officer from 2006 to 2015. In addition, Mr. Son sits on the board of directors of Yahoo! Japan Corporation, which was established as a joint venture between SoftBank and Yahoo! Inc., and served as its Chairman from 1996 until 2015. Mr. Son has also served as Honorary Chairman of the Broadband Association in Japan.

Qualifications: Mr. Son's vast experience in the telecommunications industry, including his successes in Japan disrupting telecom duopolies, is valuable to Sprint. Mr. Son provides expertise, leadership, and strategic direction to the Sprint board.

SARA MARTINEZ TUCKER, 64, Sprint director since 2013; former President and Chief Executive Officer of the National Math and Science Initiative

Public Company Board Directorships: American Electric Power Co., Inc., and Service Corporation International

Former Public Company Directorships Held During the Past Five Years: Xerox Corp.

Biography: Ms. Tucker served as Chief Executive Officer and President at National Math and Science Initiative, Inc. from March 2013 until February 2015. Ms. Tucker served as the Under Secretary of the U.S. Department of Education from 2006 to December 2008. Her responsibilities included overseeing policies, programs and activities related to postsecondary education, vocational and adult education, and federal student aid. Ms. Tucker served as the Chief Executive Officer and President of the Hispanic Scholarship Fund from 1997 to 2006. Previously, she worked for 16 years at AT&T and served as Regional Vice President of its Global Business Communications Systems. She has been a Trustee of the University of Notre Dame since June 2009 and in 2018 was elected as a director of both Nationwide Mutual Insurance Company and Service Corporation International. Ms. Tucker was a member of the University of Texas System Board of Regents from May 2015 to April 2019.

Qualifications: Ms. Tucker brings expertise relevant to a large telecommunications company, including her business experience and executive leadership expertise. These skills are the result of her education, experience in the telecommunications industry, service at the U.S. Department of Education, leadership positions at the Hispanic Scholarship Fund, and her service on other public company boards and committees. Further, Ms. Tucker has recent experience in evaluating corporate merger and acquisition options through her public company board service in companies that are active in making acquisitions.

Executive Officers

The information required by this item regarding our executive officers is incorporated by reference to Part I of this Annual Report on Form 10-K under the caption “Information About our Executive Officers.”

Code of Ethics

Our code of ethics, the Sprint Code of Conduct, is available at www.sprint.com/governance or by email at shareholder.relations@sprint.com. It describes the ethical and legal responsibilities of directors and employees of our Company and our subsidiaries, including senior financial officers and executive officers.

All of our directors and employees (including all senior financial officers and executive officers) are required to comply with the Sprint Code of Conduct. In support of the Code of Conduct, we provide employees with a number of avenues for reporting potential ethics violations or similar concerns or to seek guidance on ethics matters, including a 24/7 telephone helpline. The Audit Committee has established procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls, or auditing matters, including the confidential, anonymous submission by our employees of any concerns regarding questionable financial and non-financial matters to the Ethics Helpline at 1-800-788-7844, by mail to the Nominating and Corporate Governance Committee, c/o Sprint Corporation, 6200 Sprint Parkway, Overland Park, KS 66251, or by email to ethicshelpline@sprint.com. Our Chief Ethics Officer reports regularly on our ethics and compliance program to the Audit Committee and the Nominating Committee, as well as annually to the entire board.

Audit Committee

The Board has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to the integrity of our financial statements and related disclosures, as well as related accounting and financial reporting processes; our compliance with legal and regulatory requirements; our independent registered public accounting firm’s qualifications, independence, audit and review scope, and performance; the audit scope and performance of our internal audit function; related party transactions policy and procedures, including the review and approval of related party transactions; the audit committee report to be included in our annual proxy statement; and our enterprise risk management program. The charter of the Audit Committee is available on the Corporate Governance page of the Investors section of our website at http://investors.sprint.com/corporate-governance/default.aspx, or by requesting a copy, in print, without charge by contacting our Corporate Secretary, c/o Sprint Corporation, 6200 Sprint Parkway, Overland Park, KS 66251. As of the date of this Form 10-K/A, the Audit Committee is comprised of Messrs. Doyle (Chairman) and Genachowski, and Ms. Tucker, each of whom are independent under the listing standards of NYSE. Mr. Doyle and Ms. Tucker are each an “audit committee financial expert” as defined by SEC rules. Each of Ms. Tucker and Messrs. Doyle and Genachowski is financially literate and able to devote sufficient time to serving on the Audit Committee.

Item 11. Executive Compensation

Compensation Discussion and Analysis

This compensation discussion and analysis describes the compensation program for our named executive officers for the fiscal year ended March 31, 2019 (fiscal year 2018), which named executive officers were as follows:


•	Marcelo Claure: Executive Chairman; former Chief Executive Officer (CEO). Mr. Claure served as our CEO until his appointment as our Executive Chairman, effective as of May 31, 2018.


•	Michel Combes: President and CEO; former Chief Financial Officer (CFO). Mr. Combes served as our CFO until his appointment as our CEO, effective as of May 31, 2018.


•	Andrew Davies: CFO. Mr. Davies was appointed as our CFO, effective as of July 2, 2018.


•	Nestor Cano: Chief Operating Officer (COO).


•	Jorge Gracia: Chief Legal Officer (CLO).


•	John Saw: Chief Technology Officer (CTO).


•	Kevin Crull: former Chief Strategy Officer (CSO). Mr. Crull’s employment with us ended on December 31, 2018.

Compensation Overview

Philosophy and Objectives of Our Executive Compensation Program


✓	Attract and retain qualified and experienced executives by providing base salaries, target incentives, and benefits that are market competitive;


✓	Hold executives accountable for their performance by requiring that a substantial portion of total compensation is earned over a multi-year period and subject to forfeiture to the extent that vesting requirements and performance objectives are not met;


✓	Pay for performance by tying a substantial portion of our executives’ compensation opportunities directly to, and rewarding them for, our performance through short- and long-term incentive compensation plans that include performance objectives most critical to driving our continued financial and operational improvement and long-term stockholder value; and


✓	Structure our compensation programs to align executive interests with those of our stockholders, mitigate the possibility that our executives undertake excessively risky business strategies, and adhere to corporate governance best practices.

Components of Our Executive Compensation Program

The major components of our executive compensation program for fiscal year 2018 were:


•	Base salary;


•	Short-term incentives under our short-term incentive compensation plan (STIC plan); and


•	Long-term incentives under our long-term incentive compensation plan (LTIC plan).

Other components of our executive compensation program for fiscal year 2018 include the following benefits:


•	Change in control and severance benefits under employment agreements with certain of our named executive officers and our Change in Control Severance Plan;


•	Perquisites and other benefits;


•	Retirement benefits under our 401(k) plan; and


•	Employee health and welfare benefits and programs.

Fiscal Year 2018 Performance

We delivered on our plan for fiscal year 2018, including meeting all of our financial guidance, and continued to demonstrate our commitment to repositioning Sprint in the wireless industry by executing on certain imperatives in fiscal year 2018, including:

✓

Executing our strategy of growing revenue per customer with additional devices and value-added services, including by producing wireless service revenue of $22.5 billion in fiscal year 2018 (excluding the impact of the new revenue recognition standard), stabilizing wireless service revenue year-over-year (excluding the impact of the new revenue recognition standard), and achieving continued growth in postpaid net additions by producing 710,000 postpaid net additions in fiscal year 2018, an improvement of 286,000 year-over-year that was driven by growth in data devices;

✓

Improving our network quality and making continued progress on executing our Next-Gen Network plan, including currently having: (1) 2.5 GHz spectrum deployed on approximately 82% of our macro sites, (2) 31,600 outdoor small cells deployed, including both mini macros and strand mounts, and (3) approximately 2,243 Massive MIMO radios, while also continuing to progress towards building our mobile 5G network in select cities in the United States;

✓

Achieving our gross and net cost reduction targets in fiscal year 2018 and continuing to progress on our multi-year plan to improve our cost structure, as we delivered approximately $1.2 billion (excluding the impact of the new revenue recognition standard and certain merger-related costs) of combined year-over-year gross reductions in cost of services and selling, general and administrative expenses and approximately $330 million of net reductions after reinvestments in network and other operational initiatives; and


✓	Improving our customer experience and offering an exceptional value proposition, including by executing on our strategy to leverage our digital capabilities to transform the way we engage with customers, which resulted in postpaid gross additions in digital channels increasing approximately 60% year-over-year for fiscal year 2018.

The compensation decisions in the last fiscal year were made to continue to help achieve these goals, and fiscal year 2018 was a year marked by significant progress towards our goals.

Key Fiscal Year 2018 Compensation Decisions

Base Salary

Base salary is designed primarily to attract and retain employees. Our named executive officers’ salaries are based on a number of factors, including the nature, responsibilities and reporting relationships of the positions that they hold, individual performance of the executive, salary levels for incumbents in comparable positions at peer companies as well as other executives within our organization, and experience and tenure of the executive. None of our named executive officers received a salary increase in fiscal year 2018. In connection with his appointment as our Executive Chairman, effective as of May 31, 2018, Mr. Claure’s base salary was reduced to $1,000,000 pursuant to the terms of his amended and restated employment agreement. Changes to Mr. Claure’s performance-based compensation in connection with such appointment are outlined below (see “- Employment Agreements and Other Decisions”).

2018 STIC Plan

Our STIC plan is our annual cash incentive plan, which is intended to help ensure that annual incentives are tied to the successful achievement of critical operating and financial objectives that are the leading drivers of sustainable increases in stockholder value. Participants generally had to be employed on March 31, 2019 in order to earn STIC plan awards for the fiscal year 2018 performance period. A prorated payout was available for employees who were terminated during the year as the result of death, disability, retirement, or involuntary termination without cause. Under the STIC plan, our named executive officers are eligible to receive a target incentive opportunity, expressed as a percentage of base salary. Mr. Davies’s fiscal year 2018 target incentive opportunity was determined using market analytics, and the target opportunities (expressed as a percentage of base salary) for our other named executive officers did not change year-over-year. The target opportunities for the named executive officers for fiscal year 2018 are set forth in the table below.




Named Executive Officer	FY 2018 STIC Plan Target Opportunity (% of Base Salary)	FY 2018 STIC Plan Target Opportunity ($)
Claure	200	3,000,000⁽¹⁾
Combes	200	3,000,000
Davies	100	750,000⁽²⁾
Cano	100	1,300,000
Gracia	100	725,000
Saw	100	700,000
Former Executive Officer
Crull	100	800,000⁽³⁾

______________

(1)

Mr. Claure’s actual fiscal year 2018 STIC plan target opportunity was $493,151, reflecting a proration of his target opportunity for the number of days he served as CEO in fiscal year 2018. Mr. Claure served as our CEO until his appointment as our Executive Chairman, effective as of May 31, 2018, at which time he was no longer eligible to participate in the STIC plan pursuant to the terms of his amended and restated employment agreement. For more information, see “- Employment Agreements and Other Decisions.”


(2)	Mr. Davies’s actual fiscal year 2018 STIC plan target opportunity was $560,959, reflecting a proration of his target opportunity in light of his start date of July 2, 2018.


(3)	Mr. Crull’s actual fiscal year 2018 STIC plan target opportunity was $602,740, reflecting a proration of his target opportunity for the number of days he was employed during fiscal year 2018.

To further our goal of tying a significant portion of each named executive officer’s total annual compensation to our business performance, the STIC plan provided on an objective-by-objective basis for a payment equal to the named executive officer’s targeted opportunity (set at a percentage of his base salary) only if our actual results met targeted performance levels. If our actual performance exceeded the targeted objectives, named executive officers were eligible for a payout in excess of their respective targeted opportunities (but capped at 200% of the target). Similarly, if our actual performance was below the target objectives but exceeded the minimum threshold levels, named executive officers were eligible for a payout below their respective targeted opportunities. If the minimum aggregate threshold level of performance was not attained, no payments would be earned under the STIC plan. To ensure that the results under the formulaic STIC plan metrics fully reflected the Company’s overall performance for the year, the Compensation Committee retained discretion to adjust payouts at year-end.

The metrics and weightings set by the Compensation Committee for the Corporate 2018 STIC plan, which were generally consistent with those set for the Corporate 2017 STIC plan except that a larger weighting was attributed to the postpaid handset deactivations metric in light of the Company’s focus on retaining existing subscribers in fiscal year 2018, were as follows:


•	Service Revenue Less Operating Expense Less Handset Deprecation (45.0%) - Service revenue is adjusted to subtract operating expenses and depreciation expenses due to leasing of mobile device to customers;


•	Postpaid Handset Gross Additions (15.0%) - a measure of our new handset subscribers;


•	Postpaid Handset Deactivations (20.0%) - a measure of handset subscriber deactivations;


•	Prepaid Net Additions (10.0%) - a measure of our new prepaid subscribers, net of deactivations; and


•	Improvement in Sprint Promoter Score (10.0%) - a measure of customers’ perception of Sprint.

In determining the amount earned under the STIC plan, each named executive officer’s achievement was measured against Corporate objectives except for Mr. Saw, whose objective was allocated 40% to Corporate objectives and 60% to Network objectives.

The Compensation Committee reviewed with management the degree to which each senior officer met certain specific individual performance objectives as well as qualitative assessments of each officer’s performance. The Compensation Committee elected to make the following individual performance adjustments with respect to our named executive officers’ 2018 incentive awards: (1) the individual performance factor for each of Mr. Claure (135%), Mr. Davies (120%), Mr. Cano (120%), Mr. Gracia (110%), and Mr. Saw (120%) was increased; (2) the individual performance factor for Mr. Combes was set at 0%; and (3) Mr. Crull’s individual performance factor defaulted to 75% as a result of his termination pursuant to the design of the 2018 STIC plan.

Actual results based on the objectives and targets set for the Corporate 2018 STIC plan are outlined in the table below and resulted in an initial payout level of 130.95% of target opportunity:



Objective	Fiscal Year 2018 Minimum Threshold	Fiscal Year 2018 Target	Fiscal Year 2018 Maximum	Actual Results	Earn-out Percentage
Service Revenue Less Operating Expense Less Handset Depreciation	$6,474,000,000	$7,074,000,000	$7,625,000,000	$7,717,000,000	200%
Postpaid Handset Gross Additions	5,550,000	5,947,000	6,400,000	4,947,000	0%
Postpaid Handset Deactivations	5,898,000	5,761,000	5,504,000	5,527,000	186.01%
Prepaid Net Additions	327,000	777,000	1,077,000	175,000	0%
Improvement in Sprint Promoter Score ⁽¹⁾	1	7	11	2	37.51%
Corporate Payout Percentage					130.95%

(1) Based on customer surveys in which customers are asked how likely they are to recommend Sprint.

Mr. Saw earned a portion of his 2018 STIC plan payment in accordance with the Corporate objectives, which resulted in a payout of 130.95% as described in the table above, as well as Network objectives, which resulted in a payout of 108.50%, for a total earn-out percentage of 117.48%.

Mr. Combes did not receive a 2018 STIC plan payment because his individual performance factor was set at 0%. The other named executive officers received 2018 STIC plan payments as follows:




Named Executive Officer	FY 2018 STIC Plan Target Opportunity ($)	Aggregate Payout Percentage (%)	FY 2018 STIC Plan Payout ($)
Claure⁽¹⁾	3,000,000	130.95	871,804
Davies⁽²⁾⁽³⁾	750,000	130.95	881,491
Cano⁽³⁾	1,300,000	130.95	2,042,820
Gracia⁽³⁾	725,000	130.95	1,044,326
Saw⁽³⁾	700,000	117.48	986,832
Former Executive Officer
Crull⁽⁴⁾	800,000	130.95	591,966

(1)

Mr. Claure’s actual fiscal year 2018 STIC plan target opportunity was $493,151, reflecting a proration of his target opportunity for the number of days he served as CEO in fiscal year 2018. Mr. Claure served as our CEO until his appointment as our Executive Chairman, effective as of May 31, 2018, at which time he was no longer eligible to participate in the STIC plan pursuant to the terms of his amended and restated employment agreement. As previously discussed, Mr. Claure’s individual performance factor was increased to 135%.


(2)	Mr. Davies’s actual fiscal year 2018 STIC plan target opportunity was $560,959, reflecting a proration of his target opportunity in light of Mr. Davies’s start date of July 2, 2018.


(3)	As previously discussed, the individual performance factor for each of Messrs. Davies, Cano and Saw was increased to 120%, and the individual performance factor for Mr. Gracia was increased to 110%.


(4)	Mr. Crull’s actual fiscal year 2018 STIC plan target opportunity was $602,740, reflecting a proration of his target opportunity for the number of days he was employed during fiscal year 2018. Pursuant to the 2018 STIC plan design, Mr. Crull’s individual performance factor defaulted to 75%.

LTIC Plan

Our LTIC plan is designed to encourage retention, link payment of performance-based awards to achievement of financial and operational objectives critical to our long-term success, and create a commonality of interests between our executives and our stockholders. By dovetailing with the STIC plan, our LTIC plan is also intended to create balance between short-term, or annual, performance goals and longer-term objectives that are critical to growing and sustaining stockholder value. Under the 2018 LTIC plan, each of our named executive officers (other than Mr. Claure) is eligible to earn equity-based awards subject to performance-based and/or service-based vesting conditions. In addition, as described in our 2016 proxy statement, the special TIA award (as defined below) granted to Mr. Claure in the fiscal year ended March 31, 2016 served as a three-year award. Accordingly, Mr. Claure did not receive an equity award in fiscal years 2016, 2017 and 2018, and Mr. Claure is not entitled to LTIC awards going forward in his capacity as our Executive Chairman based on the terms of his amended and restated employment agreement. See “- Employment Agreements and Other Decisions” for more information regarding Mr. Claure’s amended and restated employment agreement.

2018 LTIC Plan. The participating named executive officers’ fiscal year 2018 LTIC plan awards were granted under our Amended and Restated 2015 Omnibus Incentive Plan in the form of time-based restricted stock units (RSUs) and performance-based RSUs (pRSUs) to emphasize the imperative of achieving long-term growth and alignment with stockholder interests. For fiscal year 2018, the Compensation Committee did not grant stock options as part of the LTIC Plan. Accordingly, allocations of the two types of awards granted under our 2018 LTIC plan are as follows:




Type of Award	Percent of 2018 LTIC Plan Opportunity	Vesting

Time-based RSUs	50%	Generally vest ratably on each of May 23, 2019, 2020 and 2021
Performance-based RSUs	50%	Generally vest on May 23, 2021, with earn-out allocated to a single three-year performance period (April 1, 2018 through March 31, 2021) subject to achievement of certain performance-based vesting conditions

For fiscal year 2018, each of our named executive officers (except for Mr. Claure, who was not eligible to receive an LTIC plan award for fiscal year 2018 as described above) was granted a target opportunity under the 2018 LTIC plan, as follows:




Named Executive Officer	2018 LTIC Plan Target Opportunity ($)
Claure	—
Combes	5,000,000
Davies	1,500,000⁽¹⁾
Cano	1,625,000
Gracia	1,450,000
Saw	1,260,000
Former Executive Officer
Crull	2,000,000


(1)	Pursuant to his employment offer letter, Mr. Davies’s fiscal year 2018 LTIC plan target opportunity was set at $1,500,000 for fiscal year 2018.

The Compensation Committee typically grants equity awards under the LTIC plan in May, following a review of an assessment of the factors critical to driving long-term stockholder value. Grants of awards under the 2018 LTIC plan were made in May 2018 (July 2018 for Mr. Davies), with earn-outs of pRSUs granted under the 2018 LTIC plan for the three-year performance period from April 1, 2018 through March 31, 2021 noted below.

Performance-Based RSUs. Similar to our STIC plan, the pRSUs granted under our LTIC plan provided for a payment equal to the named executive officer’s targeted opportunity for such awards (set at a percentage of his total LTIC plan opportunity) only if our actual results meet the targets for each completed performance period. An earn-out of pRSUs in excess of a named executive officer’s targeted opportunity may be made if our actual performance exceeds the targeted objectives (but capped at 200% of the target), an earn-out below targeted opportunity may be made if our actual performance is below the target objectives but exceeds the minimum threshold level, and no earn-out would be made if our actual performance does not exceed the minimum threshold level. Earn-outs achieved under the LTIC plan are subject to the Compensation Committee’s negative discretion.

Grants of pRSUs under our 2018 LTIC plan were allocated to one single three-year performance period (April 1, 2018 through March 31, 2021) and in general will vest, if at all, on May 23, 2021 based on the achievement of the performance-based vesting conditions described below. Accordingly, given the focus on profitability growth, cash flow and subscriber growth for the three-year performance period, the Compensation Committee adopted objectives for the pRSUs for the three-year performance period that were weighted among EBIT Compound Annual Growth, Adjusted Free Cash Flow and End of Period (EOP) Market Share:


•	EBIT Compound Annual Growth Rate (34%) - the three-year average EBIT annual growth rate for the performance period ending March 31, 2021, calculated as further described below. For this purpose, EBIT is defined as earnings before interest and taxes adjusted for certain network specific impacts.


•	Adjusted Free Cash Flow (33%) - the aggregate Adjusted Free Cash Flow generated over the three-year performance period ending March 31, 2021. For this purpose, Adjusted Free Cash Flow is defined as Adjusted EBITDA for financial reporting purposes, less cash handset inventory spend (net).


•	EOP Market Share (33%) - the Company’s postpaid handset subscribers at the end of the three-year performance period relative to its peers, calculated by taking the Company’s postpaid handset ending subscribers divided by the aggregate postpaid handset ending subscribers of the Company, Verizon Communications Inc., AT&T, Inc., and T-Mobile, in each case as of March 31, 2021.

With respect to the EBIT Compound Annual Growth Rate metric, the threshold, target and maximum EBIT growth percentage goals for each year of the three-year performance period were established at the beginning of the three-year performance period. For each year of the three-year performance period, the base-year number over which the annual EBIT growth rate

performance is measured is the final actual EBIT of the preceding fiscal year. At the end of the three-year performance period ending March 31, 2021, the calculated payout percentages from each of the three years’ performance results are averaged to determine the actual share delivery.

2017 LTIC Plan. Based on feedback we received in early 2017 from certain of our largest stockholders (other than SoftBank, which already has representation on our board), our Compensation Committee made changes in the design of our LTIC plan to establish pRSU objectives covering a single three-year performance period rather than our prior practice of setting three individual one-year performance periods. This change was designed to further focus our executives on achieving longer-term objectives to drive long-term stockholder returns. Accordingly, grants of pRSUs under our 2017 LTIC plan were allocated to one single three-year performance period (April 1, 2017 through March 31, 2020) and in general will vest, if at all, on May 24, 2020 based on the achievement of certain performance-based vesting conditions described below.

Under the 2017 LTIC Plan, the Compensation Committee adopted objectives for the pRSUs for the three-year performance period ending March 31, 2020 that were weighted among EBIT Compound Annual Growth (34%), Adjusted Free Cash Flow (33%) and EOP Market Share (33%). The weighting and objectives for the 2017 LTIC Plan were generally consistent with those established for the 2018 LTIC plan as discussed above, except that, for purposes of the 2017 LTIC Plan, Adjusted Free Cash Flow was defined as Adjusted EBITDA for financial reporting purposes, less interest expense and cash capital expenditures.

2016 LTIC Plan. Prior to implementing the 2017 LTIC plan in fiscal year 2017, our practice was to establish pRSU objectives covering three individual one-year performance periods. Accordingly, grants of pRSUs under our 2016 LTIC plan were allocated to each of three separate fiscal year performance periods. The objectives established for the third annual performance period of the 2016 LTIC plan, covering our 2018 fiscal year, were generally consistent with the objectives established for the 2018 LTIC plan as discussed above, albeit modified to account for the differing performance periods of the 2016 LTIC plan as noted above:



Objective	Fiscal 2018 Minimum Threshold	Fiscal 2018 Target Goal	Fiscal 2018 Maximum Goal	Actual Results	Earn-Out Percentage
FY 2018 EBIT	$1,754,000,000	$1,904,000,000	$2,454,000,000	$2,113,000,000	123.25%
FY 2018 Adjusted Free Cash Flow	$6,474,000,000	$7,074,000,000	$7,625,000,000	$7,690,000,000	200.0%
EOP Market Share (as of March 31, 2019)	12.02%	12.27%	12.58%	12.15%	83.18%
Achievement					135.35%

Accordingly, for the fiscal year 2018 performance period under the 2016 LTIC plan, cumulative results were as follows, with the earned pRSUs generally vesting on May 13, 2019: 9,343; 60,832; 52,467; and 64,544 for Messrs. Cano, Gracia, Saw and Crull, respectively. Mr. Claure did not participate in the 2016 LTIC plan for the reasons discussed above and Messrs. Combes and Davies did not participate in the 2016 LTIC plan because they were hired in January 2018 and July 2018, respectively.

Turnaround Incentive Awards

In prior fiscal years, Sprint granted special performance-based equity awards that can be earned only based on performance of the price of Sprint stock (referred to as the “Turnaround Incentive Award” or “TIA award”) to certain of its employees, including certain executive officers. In fiscal year 2015, Sprint granted TIA awards to Messrs. Claure, Gracia, Saw and Crull. In fiscal years 2016 and 2017, Sprint granted TIA awards to Messrs. Cano and Combes, respectively, in connection with their arrivals at Sprint. Mr. Davies was not granted a TIA award upon his appointment as CFO, but was granted a cash bonus award in May 2019 in the amount of $1,125,000 in recognition of his contributions to the Company and the fact that he was not offered a TIA award upon his appointment as CFO. Mr. Davies’s cash bonus award is payable upon closing of the Company’s contemplated merger with T-Mobile.

The TIA awards, granted in the form of performance-based RSUs, can be earned based on the achievement of specified volume-weighted average prices of our common stock during regular trading on the NYSE over any 150-calendar day period (VWAP Prices) during the performance periods specified in the tables below. The Compensation Committee determined to grant the TIA awards in order to recruit and retain executive officers and focus the leadership team on a common set of objectives. In addition, all of Sprint’s non-executive employees received TIA awards in fiscal year 2016 or, in the case of non-executive employees hired after

September 21, 2016 and employed as of March 31, 2017, a TIA award was granted in fiscal year 2017, to create a cohesive performance incentive among our employees and our executives.

Payouts for the TIA awards granted to the following named executive officers in fiscal years 2015 and 2016 are determined as follows:




Named Executive Officer	Performance Period	Target Number of Shares Under TIA Awards	Highest 150-Day VWAP Price During Performance Period	Percentage of Earned TIA Awards
Claure	6/1/2015 - 5/31/2019	10,000,000	Less than $7.00	0%
Cano	2/2/2017 - 5/31/2019	1,750,000	$7.00	25%
Gracia	1/2/2016 - 5/31/2019	312,500	$7.50	50%
Saw	6/1/2015 - 5/31/2019	625,000	$8.00	100%
Former Executive Officer			Greater than or equal to $10.00	120%
Crull	6/1/2015 - 5/31/2019	2,500,000

Payouts for the TIA award granted to Mr. Combes in fiscal year 2017 are determined as follows:




Named Executive Officer	Performance Period	Target Number of Shares Under TIA Award	Highest 150-Day VWAP Price During Performance Period	Percentage of Earned TIA Awards
Combes	1/30/2018 - 5/31/2021	3,000,000	Less than $8.00	0%
			$8.00	100%
			Greater than or equal to $10.00	120%

The TIA awards granted to our named executive officers, except for those granted to Mr. Combes, were earned at a 100% level because we achieved the applicable VWAP Price target of $8.00 during the applicable performance period ending May 31, 2019, but remain subject to certain vesting requirements based on the schedule set forth below.



Named Executive Officer	Vesting Schedule
Claure	50% on August 7, 2019 and 50% on August 7, 2020
Combes	100% on May 31, 2022
Cano	50% on February 1, 2020 and 50% on February 1, 2021
Gracia	50% on February 3, 2020 and 50% on February 3, 2021
Saw	50% on August 28, 2019 and 50% on August 28, 2020
Former Executive Officer
Crull	50% on May 31, 2019 and 50% on May 31, 2020⁽¹⁾

(1) In connection with his termination of employment, Mr. Crull is eligible to receive a pro-rata number, based on his termination date of December 31, 2018, of earned shares on his regularly scheduled vesting dates.

Other Components of Executive Compensation

Our named executive officers’ total rewards opportunities consisted of a number of other elements important to our compensation philosophy for fiscal year 2018 of attracting, retaining, and motivating our named executive officers.

Employee Benefit Plans and Programs. Our compensation program includes a comprehensive array of health and welfare benefits in which our eligible employees, including our named executive officers, are eligible to participate on terms and conditions substantially similar to those that apply for our other employees. We pay all of the costs for some of these benefit plans, and participants contribute a portion of the cost for other benefit plans. We also maintain an employee stock purchase plan, in which our eligible employees, including our named executive officers, are eligible to participate.

Retirement Program. Our retirement program consists of the Sprint Corporation 401(k) Plan, which provides participants with a fixed matching contribution on up to 100% of the first 3% of eligible compensation, to help build financial security for their future. The amount of any matching contributions made to participating named executive officers is included in the “All Other Compensation” column of the Fiscal Year 2018 Summary Compensation Table below.

Deferred Compensation. Certain employees, including our named executive officers, are offered the opportunity to participate in the Sprint Corporation Deferred Compensation Plan, a nonqualified and unfunded plan, under which employees may defer to future years the receipt of certain compensation in addition to that eligible under the 401(k) plan. Participants may elect to defer up to 50% of base salary and up to 75% of STIC plan payments. We believe this plan helps attract and retain executives by providing them with another tax efficient method to plan for retirement. In addition, executive officer participation in this plan might be able to enable a tax deduction by us for post-termination compensation. None of our named executive officers except Mr. Cano deferred compensation under this plan during fiscal year 2018. Mr. Saw also participates in the plan.

Personal Benefits and Perquisites. The personal benefits and perquisites that we provide to our named executive officers are intended to promote executive retention and to allow our executives to maximize their focus on Sprint. In accordance with the Company’s relocation policy applicable to senior executives, the Company provided relocation benefits to executives in connection with the hiring of such executives from various locations. These benefits are summarized in footnote four to the Fiscal Year 2018 Summary Compensation Table below. Pursuant to his amended and restated employment agreement, Mr. Claure is permitted unlimited personal usage of our corporate aircraft because the overall security program implemented for Mr. Claure, as further discussed below, substantially restricts him from flying commercially. Mr. Claure is also permitted to have his family or guests accompany him on the corporate aircraft for business and personal travel.

Security Program. To promote the safety of certain of our executive officers while not at our offices, we commissioned a security study in 2017 and again in 2018. As a result of these studies, and because of the high visibility of the Company, the Compensation Committee has authorized a security program for Mr. Claure to address safety concerns due to specific threats to his safety arising directly as a result of his position with the Company. We require that the executive accept such personal security protection because we believe it is in the best interests of the Company and its stockholders that the executive not be vulnerable to security threats to the executive or members of his family. We also believe that the costs of this overall security program are appropriate and necessary. Although we do not consider Mr. Claure’s overall security program to be a perquisite for his benefit for the reasons described above, the costs related to personal security for Mr. Claure at his residence and during personal travel are reported in the “All Other Compensation” column of the Fiscal Year 2018 Summary Compensation Table. The Compensation Committee periodically reviews the amount and nature of executive officers’ security expenses.

Severance Benefits. Pursuant to their employment agreements, certain of our named executive officers are entitled to certain severance benefits upon a qualifying termination of employment that is not in connection with a change in control. We provide these benefits because they are market competitive and assist us in attracting key executives. Pursuant to the terms of his amended and restated employment agreement, Mr. Claure is not entitled to severance benefits upon his termination as Executive Chairman. Pursuant to the terms of his employment offer letter, Mr. Davies will generally not be eligible to receive severance compensation and other benefits upon termination of his employment for any reason, except for certain equity acceleration. For more information, please see “Fiscal Year 2018 Potential Payments upon Termination of Employment or Change in Control.”

Change in Control. If a transaction that could result in a change in control were under consideration, such as the contemplated merger with T-Mobile, we expect that our named executive officers would face uncertainties about how the transaction may affect their continued employment with us. We believe it is in our stockholders’ best interest if our named executive officers remain employed and focused on our business through any transition period following a change in control and remain independent and objective when considering possible transactions that may be in stockholders’ best interests but possibly result in the termination of their employment. Our change in control benefits accomplish this goal by providing each eligible named executive officer, with the exception of Messrs. Claure and Davies, with a meaningful severance benefit in the event that a change in control occurs and, within a specified time period of the change in control, his employment is involuntarily terminated without “cause” or voluntarily terminated for “good reason.” With respect to Mr. Davies, the cash bonus award that was granted to Mr. Davies in May 2019 is payable upon

closing of the Company’s contemplated merger with T-Mobile (see “- Employment Agreements and Other Decisions” for more information).

The Sprint Corporation Change in Control Severance Plan, which we refer to as the CIC Plan, provides severance benefits to a select group of senior executives, including certain of our named executive officers, in the event of a qualified termination of employment in connection with a transaction that results in a change in control. Any of these benefits payable would be reduced to the extent of any severance benefit otherwise available under any other applicable policy, program, agreement, or plan so that there would be no duplication of benefits. We believe that the benefits upon termination in connection with a change in control to which our named executive officers are entitled, as described in “Fiscal Year 2018 Potential Payments upon Termination of Employment or Change in Control,” are likewise competitive within our peer group. Again, Messrs. Claure and Davies will generally not be eligible to receive severance compensation and other benefits upon termination of their employment for any reason, including in connection with a transaction that results in a change in control, except, in the case of Mr. Davies, for certain equity acceleration.

Employment Agreements and Other Decisions

We have employment agreements (or in the case of Mr. Davies, an employment offer letter) with each of our named executive officers. Discussion of the material terms of our employment agreements with our named executive officers can be found in the tabular and narrative discussion under “Fiscal Year 2018 Potential Payments upon Termination of Employment or Change in Control.”

Mr. Claure’s Appointment as Executive Chairman. Mr. Claure was appointed our Executive Chairman and ceased to serve as our CEO, effective as of May 31, 2018. On July 2, 2018, the Company and Mr. Claure entered into an amended and restated employment agreement, effective as of May 31, 2018. Mr. Claure’s amended and restated employment agreement provides that Mr. Claure will receive an annual base salary of $1,000,000 for serving as Executive Chairman. In addition, Mr. Claure will no longer be eligible to participate in any short-term or long-term incentive compensation plans (including the Company’s STIC and LTIC plans) or any severance plans (including the CIC Plan), except that (1) outstanding awards previously granted under prior plans will continue to vest and be paid pursuant to their terms, and (2) he was eligible to participate in the Company’s 2018 STIC plan and received a prorated target award opportunity based on the number of days that he served as CEO in fiscal year 2018. For more information regarding Mr. Claure’s amended and restated employment agreement, please see “Fiscal Year 2018 Potential Payments upon Termination of Employment or Change in Control.”

Mr. Combes’s Appointment as CEO. Mr. Combes was appointed our CEO, effective as of May 31, 2018. On July 2, 2018, the Company and Mr. Combes entered into an amended and restated employment agreement, effective as of May 31, 2018. In connection with his appointment as CEO, Mr. Combes’s compensation generally remained unchanged. For more information regarding Mr. Combes’s amended and restated employment agreement, please see “Fiscal Year 2018 Potential Payments upon Termination of Employment or Change in Control.”

Bonus in Lieu of Relocation Benefits. In connection with his appointment as our CFO, Mr. Davies received a one-time cash payment of $100,000 as financial assistance for certain housing and travel expenses in lieu of relocation benefits in accordance with the terms of his employment offer letter, which was subject to repayment if his employment with us had terminated under certain circumstances prior to July 2, 2019.

Departure of Mr. Crull. Mr. Crull’s employment with us terminated on December 31, 2018. Pursuant to the terms of his employment agreement, he was entitled to certain severance payments and benefits, as further described in the narrative discussion under “Fiscal Year 2018 Potential Payments upon Termination of Employment or Change in Control.”

Cash Bonus Award Granted to Mr. Davies. Following the end of fiscal year 2018, on May 16, 2019, the Compensation Committee granted a cash bonus award to Mr. Davies in the amount of $1,125,000, or 1.5 times Mr. Davies’s annual base salary, in recognition of his contributions to the Company and the fact that he was not offered a TIA award upon his appointment as CFO. The cash bonus award is payable upon closing of the Company’s contemplated merger with T-Mobile.

Setting Executive Compensation

Role of Compensation Consultant and Executive Officers

The Compensation Committee has retained Frederic W. Cook & Co., Inc. (FW Cook) as its independent compensation consultant. FW Cook provides no services to us other than advisory services for executive and director compensation and has no other relationships with Sprint. FW Cook works with management only at the request and under the direction of the Compensation Committee and only on matters for which the Compensation Committee has oversight responsibility. The Compensation Committee

has assessed the independence of FW Cook, as required under NYSE listing rules. The Compensation Committee has also considered and assessed all relevant factors, including those required by the SEC that could give rise to a potential conflict of interest with respect to FW Cook during fiscal year 2018. Based on this review, the Compensation Committee did not identify any conflict of interest raised by the work performed by any advisors to the Compensation Committee.

Representatives of FW Cook attend Compensation Committee meetings at the Compensation Committee’s request and provide guidance to the Compensation Committee on a variety of compensation issues. The primary point of contact at FW Cook frequently communicates with the chair of the Compensation Committee and interacts with all Compensation Committee members without management present.

FW Cook has reviewed the compensation components and levels for our named executive officers and advised the Compensation Committee on the appropriateness of our compensation programs, including our incentive and equity-based compensation plans, retention incentives, and proposed employment agreements, as these matters arose during fiscal year 2018. The Compensation Committee has directed that FW Cook provide this advice taking into account our overall executive compensation philosophy as described above. FW Cook prepares the market comparison data discussed below, reviews the results with the Compensation Committee, and provides recommendations and guidance on the reasonableness of new compensation plans, programs, and arrangements.

In addition to its ongoing support of the Compensation Committee and continuous advice on compensation design, levels, and emerging market practices, FW Cook annually conducts a comprehensive review of our overall executive compensation program, including direct and indirect elements of compensation, to ensure that the program operates in support of our short- and long-term financial and strategic objectives and that it aligns with evolving corporate governance “best practices.”

Our CEO periodically discusses the design of, and makes recommendations with respect to, our compensation programs and the compensation levels of our other named executive officers and certain key personnel with the Compensation Committee. Our CEO does not make recommendations to the Compensation Committee with regard to his own compensation; rather, FW Cook provides the Compensation Committee with an annual report on CEO compensation and a range of alternatives with regard to potential changes.

Process for Setting Executive Compensation

The Compensation Committee annually reviews the compensation packages of our named executive officers in the form of “tally sheets.” These tally sheets value each component of compensation and benefits, including a summary of the outstanding equity holdings of each named executive officer as of fiscal year-end and the value of such holdings at various assumed stock prices. The tally sheets also set forth the estimated value that each of our named executive officers would realize upon termination under various scenarios.

The Compensation Committee uses these tally sheets when considering adjustments to base salaries and awards of equity-based or other remuneration and in establishing incentive plan target opportunity levels as follows:


✓	Comparing each named executive officer’s total compensation against a similar position in our peer group as a market check;


✓	Understanding the impact of decisions on each individual element of compensation on total compensation for each named executive officer; and


✓	Ensuring that equity compensation represents a portion of each named executive officer’s total compensation that is in line with our philosophy of motivating the executives and aligning their interests with those of our stockholders.

Although the Compensation Committee reviews and considers the amounts realizable by our named executive officers under different termination scenarios, including those in connection with a change in control, as well as the current equity-based award holdings, these are not the primary considerations in the assessment and determination of annual compensation for our named executive officers.

Use of Market Comparison Data

To assist in setting total compensation levels that are reasonably competitive, the Compensation Committee annually reviews market trends in executive compensation and a competitive analysis prepared by FW Cook. This information is derived from the most recent proxy statement data of companies in a peer group of telecommunications and high-technology companies and, where limited

in its functional position match to our executives, is supplemented with data on our peer group from a published compensation survey prepared by Willis Towers Watson, as tailored for Sprint, of approximately 51 participating industry companies all with revenues exceeding $25 billion. The compensation data, and not the identity of the individual companies participating in the surveys for this database, was generally the most significant factor considered by the Compensation Committee with respect to its fiscal year 2018 executive compensation decisions.

Taking into consideration the recommendations of FW Cook, the Compensation Committee determines companies for our peer group based on similarity of their business model and product offerings as well as comparability from a size perspective, including annual revenue, market capitalization, net income, enterprise value and number of employees. Accordingly, the Compensation Committee approved the use of the following 13 companies for its fiscal year 2018 executive compensation market comparison analysis:

AT&T, Inc.; CenturyLink, Inc.; Cisco Systems, Inc.; Comcast Corporation; DXC Technology Company; Intel Corporation; Motorola Solutions, Inc.; Qualcomm Incorporated; Texas Instruments Incorporated; T-Mobile US, Inc.; Charter Communications, Inc.; Verizon Communications Inc.; and Xerox Corporation.

This peer group did not change from fiscal year 2017. Sprint’s size positioning remains reasonable in relation to this group because Sprint’s revenue is between the median and 75^th percentile, which is balanced by Sprint’s market capitalization that is near the 25^th percentile. In addition, the group, as a whole, continues to represent a reasonable match to Sprint in business content. The Compensation Committee does not follow a specific formula in making its pay decisions but rather uses market comparison data as a frame of reference. The Compensation Committee does not target a specific percentile in the range of compensation data for each individual or for each component of compensation. The Compensation Committee exercises its judgment by taking into consideration a multitude of other important factors such as experience, individual performance, and internal pay equity in setting target compensation levels, but actual payouts under our variable incentive plans are primarily determined based on formulaic outcomes. The Compensation Committee, however, considers unrealized appreciation in outstanding equity awards when reviewing each executive’s compensation.

Corporate Governance Highlights

We endeavor to maintain stockholder-friendly compensation practices, including with respect to our executive compensation program, which practices include the following:




Stockholder-Friendly Compensation Practices We Embrace	Unfavorable Compensation Practices We Avoid
• A significant portion of the compensation program provided to our senior executives in fiscal year 2018 is performance-based compensation • 50% of our long-term incentive program for fiscal year 2018 is delivered in performance-oriented awards (performance-based RSUs) and 50% of our long-term incentive program is delivered in time-based RSUs • The peer group we use for market comparisons of compensation levels and practices appropriately reflects our size and industry of operations • We provide few entitlements or elements of non-performance-based compensation • We maintain a clawback provision in our incentive compensation programs under which we may recover cash and equity payouts • We expect our senior executives to hold significant ownership in Sprint through meaningful stock ownership guidelines We do not allow short-selling or hedging of the Company’s securities by the Company’s employees and directors	• Our severance benefits are positioned conservatively relative to market practices, with no benefit in excess of two times base salary plus annual incentive • We do not provide excise tax gross-ups • We do not employ single-trigger cash severance or equity acceleration • We do not reprice underwater stock options without stockholder approval

Stock Ownership Guidelines

We have stock ownership guidelines for our named executive officers and other members of our senior management team. The board believes ownership by executives of a meaningful financial stake in Sprint serves to align executives’ interests with those of our stockholders. Our guidelines encourage our CEO to hold shares of our common stock with a value equal to five times his base salary and encourage the other continuing named executive officers to hold shares of our common stock with a value equal to three times their respective base salaries. Eligible shares and share equivalents counted toward ownership consist of:


•	RSUs, including TIA awards;


•	common stock, including shares purchased through our Employee Stock Purchase Plan;


•	intrinsic value (the excess of the current stock price over a stock option’s exercise price) of vested,

in-the-money stock options; and


•	share units held in our 401(k) plan and various deferred compensation plans.

Individuals subject to the stock ownership guidelines have five years beginning on the date on which the person becomes subject to the ownership guidelines to achieve the ownership requirement. All of our continuing named executive officers met the stock ownership guidelines as of March 31, 2019 except for Mr. Davies, who joined the Company in July 2018 and is making progress towards achieving the stock ownership guidelines.

Anti-hedging Policy

Our Securities Law Compliance Policy prohibits our directors and employees from: (1) entering into hedging or monetization transactions or similar arrangements with respect to Sprint securities, (2) buying or selling puts or calls or other derivative securities on Sprint securities, and (3) selling any securities of Sprint “short.”

2018 Stockholder Say-on-Pay Vote

We provide our stockholders with the opportunity to cast an annual advisory vote on named executive officer compensation (a say-on-pay proposal). At our 2017 annual meeting of stockholders, in a non-binding, advisory vote on the frequency of votes on named executive officer compensation, our stockholders voted in favor of an annual vote. Our board considered the outcome of this advisory vote and determined that we will hold future say-on-pay votes on an annual basis. Our board will re-evaluate this determination no later than after the next advisory vote regarding the frequency of future say-on-pay votes, which is required to occur no later than our 2023 annual meeting of stockholders.

At our 2018 annual meeting of stockholders, 99.4% of the votes cast on the say-on-pay proposal were voted in favor of the proposal. The Compensation Committee considered the voting results at discussions among its members during the remainder of its fiscal year 2018 meetings, and the Compensation Committee believes this vote affirms stockholders’ support of Sprint’s approach to executive compensation. As a result of this consideration, we did not change our approach to named executive officer compensation in fiscal year 2018 solely in response to the say-on-pay proposal results. The Compensation Committee expects to continue to consider the outcome of our say-on-pay votes when making future compensation decisions for the named executive officers.

Tax Deductibility of Compensation

Section 162(m) of the IRC, as amended (Section 162(m)), limits to $1 million the amount of remuneration that we may deduct from our taxable income in any tax year with respect to certain executive officers (and, beginning in 2018, certain former executive officers). Section 162(m) was amended by the 2017 Tax Cuts and Jobs Act (TCJA) to generally repeal the rule that had allowed us to deduct from our taxable income without regard to the $1 million limit the full value of all “qualified performance-based compensation.” The new tax law, however, provides a transition rule for qualified performance-based compensation and any other compensation paid under written binding contracts in place on November 2, 2017 and not materially modified after that time (grandfathered awards). Our STIC plan, certain of our LTIC plan awards, and certain TIA awards were designed to potentially qualify as “qualified performance-based compensation” if certain requirements are met, including among other things if the maximum number of stock options or full value share awards and the maximum amount of cash performance-based remuneration that may be payable to any one executive officer has been disclosed to and approved by stockholders prior to the award or payment.

The Compensation Committee has generally considered Section 162(m) deductibility in designing our compensation program and incentive-based compensation plans and generally intends to preserve the deductibility of such compensation to the extent available. Executive compensation tax deductions unquestionably have, however, been limited under the TCJA, and the Compensation Committee makes no assurance that any performance-based compensation, or compensation paid after termination of service, will be fully deductible for federal income tax purposes. Moreover, even if the Compensation Committee intended to grant compensation that qualifies as “qualified performance-based compensation” under the transition rule of Section 162(m) as amended, Sprint cannot guarantee that such compensation will so qualify or ultimately will be deductible.

For the 2018 STIC plan, the Compensation Committee comprised of Messrs. Bethune and Mullen established Section 162(m) objectives for the named executive officers potentially subject to Section 162(m) at a small fraction of a percentage of our adjusted operating income (approximately 1% or less) for the performance cycle. Under the tax laws applicable before 2018 (which still generally apply to any grandfathered awards), the Compensation Committee is precluded from exercising upward discretion to the payout achieved under the Section 162(m) objectives. The Compensation Committee then exercised its negative discretion to make payments under the 2018 STIC plan at levels below the payout achieved under the Section 162(m) objectives for the fiscal year 2018 performance period, as guided by the performance metrics discussed under “Key Fiscal Year 2018 Compensation Decisions-2018 STIC Plan.”

For the three-year performance period under the 2018 LTIC plan and the third annual performance period under the 2016 LTIC plan, the Compensation Committee established a Section 162(m) objective for the pRSUs for the named executive officers potentially subject to Section 162(m) based on cumulative adjusted operating income during the performance cycle.Under the tax laws applicable to any grandfathered awards, the Compensation Committee is precluded from exercising upward discretion to the payout achieved under the Section 162(m) objective. The Compensation Committee then exercised its negative discretion to set the performance adjustment for the third annual performance period under the 2016 LTIC plan at levels below the earn-out achieved under the Section 162(m) objective for the performance period, as guided by the performance metrics discussed under “Key Fiscal Year 2018 Compensation Decisions-LTIC Plan.”

Compensation Committee Report

The Compensation Committee has reviewed and discussed Sprint’s Compensation Discussion and Analysis with management. Based on these reviews and discussions, the Compensation Committee recommended to the board that Sprint’s Compensation Discussion and Analysis be included in this Annual Report on Form 10-K for the fiscal year ended March 31, 2019.

The Compensation Committee

Gordon Bethune, Chair

Adm. Michael Mullen

Stephen Kappes

Relationship of Compensation Practices to Risk Management

We annually assess whether there are any risks arising from our compensation policies and practices for our employees and factors that may affect the likelihood of excessive risk taking. Based on our annual review, we have concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

Fiscal Year 2018 Summary Compensation Table

The table below summarizes the compensation of our named executive officers for fiscal years 2018, 2017, and 2016, as required. As discussed above, the named executive officers for fiscal year 2018 are Marcelo Claure, our Executive Chairman who previously served as our CEO in fiscal year 2018; Michel Combes, our President and CEO who previously served as our CFO in fiscal year 2018; Andrew Davies, our CFO; Nestor Cano, our COO; Jorge Gracia, our CLO; John Saw, our CTO; and Kevin Crull, our former CSO.

As further discussed above, Mr. Claure was appointed as our Executive Chairman and ceased serving as our CEO, and Mr. Combes, our President, was also appointed as our CEO and ceased serving as our CFO, in each case effective as of May 31, 2018.



Name and Principal Position	Fiscal Year	Salary ($)	Bonus ($)⁽¹⁾		Stock Awards ($)⁽²⁾		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)⁽³⁾		All Other Compensation ($)⁽⁴⁾		Total ($)
Marcelo Claure Executive Chairman Former Chief Executive Officer	2018	1,082,192		—		—		—		871,804		1,451,254		3,405,250
	2017	1,500,000		—		—		—		3,603,750		1,280,168		6,383,918
	2016	1,500,000		—		2,796,903		—		2,598,000		578,190		7,473,093
Michel Combes President and Chief Executive Officer	2018	1,500,000		—		4,614,003		—		—		166,144		6,280,147
	2017	349,315		1,298,630		12,629,403		462,815		—		3,760		14,743,923
Andrew Davies Chief Financial Officer	2018	560,959		100,000		1,536,788		—		881,491		8,250		3,087,487
Nestor Cano Chief Operating Officer	2018	1,300,000		—		1,535,035		—		2,042,820		8,250		4,886,105
	2017	1,300,000		—		1,315,942		298,459		1,249,300		47,975		4,211,676
	2016	160,000		300,000		18,332,964		173,908		178,894		24,505		19,170,271
Jorge Gracia Chief Legal Officer	2018	725,000		—		1,569,078		—		1,044,326		8,250		3,346,654
	2017	663,630		—		1,392,824		220,400		797,186		5,900		3,079,940
John Saw Chief Technology Officer	2018	700,000		—		1,361,977		—		986,832		106,265		3,155,074
Former Executive Officer
Kevin Crull Former Chief Strategy Officer	2018	600,000		—		2,230,621		—		591,966		460,125		3,882,712
	2017	800,000		—		2,598,395		367,335		768,800		5,900		4,540,430
	2016	800,000		250,000		1,162,834		762,594		591,749		5,300		3,572,477

_______________


(1)	For Mr. Davies, the reported amount consists of a one-time cash payment of $100,000 as financial assistance for certain housing and travel expenses in lieu of relocation benefits in accordance with the terms of his employment offer letter.


(2)	For fiscal year 2018, the reported amount represents the aggregate value of three types of awards, as applicable, consisting of (a) pRSUs under the 2018 LTIC plan, (b) time-based RSUs under the 2018 LTIC plan, and (c) pRSUs allocable to the fiscal year 2018 performance period under the 2016 LTIC plan, as shown in the following table.




Name	2016 pRSUs ($)	2018 RSUs ($)	2018 pRSUs ($)	Total ($)
Claure	—	—	—	—
Combes	—	2,307,002	2,307,002	4,614,003
Davies	—	768,394	768,394	1,536,788
Cano	35,481	749,777	749,777	1,535,035
Gracia	231,012	669,033	669,033	1,569,078
Saw	199,247	581,365	581,365	1,361,977
Former Executive Officer
Crull	385,022	922,800	922,800	2,230,621

For the 2018 time-based RSU awards, the value represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The time-based RSUs generally vest ratably on each of May 23, 2019, 2020 and 2021.

Amounts for the fiscal year 2018 portion of the pRSUs granted under the 2016 LTIC plan represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The pRSUs granted under the 2016 LTIC plan are reported based on target opportunity (in other words, probable outcome of the performance conditions) and generally vested on May 13, 2019, subject to achievement of the applicable performance conditions. Assuming maximum levels of performance are achieved, the aggregate grant date fair value would be $70,962; $462,024; $398,494; and $770,044 for Messrs. Cano, Gracia, Saw and Crull, respectively, for the 2016 LTIC plan pRSUs. The pRSUs granted under the 2018 LTIC plan are reported based on target opportunity (in other words, probable outcome of the performance conditions) and vest generally on May 23, 2021, subject to achievement of the applicable performance conditions. Assuming maximum levels of performance are achieved, the aggregate grant date fair value would be $4,614,000; $1,536,788; $1,499,554; $1,338,066; $1,162,730 and $1,845,600 for Messrs. Combes, Davies, Cano, Gracia, Saw and Crull, respectively, for the 2018 LTIC plan pRSUs. For more information regarding the 2018 LTIC plan, see “Executive Compensation-Key Fiscal Year 2018 Compensation Decisions-LTIC Plan.”

See “—Note 2—Summary of Significant Accounting Policies” in this Annual Report on Form 10-K for the fiscal year ended March 31, 2019, for more information regarding the assumptions upon which the above amounts are based.

(3)

The values shown for 2018 are the final payouts under the 2018 STIC plan. Mr. Claure’s payout was prorated to account for the number of days that he served as CEO during the 2018 fiscal year. As further described above, effective May 31, 2018, Mr. Claure was appointed our Executive Chairman and was no longer eligible to participate in the STIC plan pursuant to the terms of his amended and restated employment agreement. Mr. Combes did not receive a 2018 STIC plan payment. Mr. Crull’s payout was prorated for the number of days that he was employed during the 2018 fiscal year. For more information regarding our STIC plan, see “Executive Compensation-Key Fiscal Year 2018 Compensation Decisions-2018 STIC Plan.”


(4)	For 2018, consists of perquisites and other personal benefits and tax gross-ups during fiscal year 2018 as follows:




Name	Non-Business Use of Corporate Aircraft ($)⁽ⁱ⁾	Security-Related Costs ($)⁽ⁱⁱ⁾	Relocation Costs ($)⁽ⁱⁱⁱ⁾	Tax Gross-Ups ($)^(iv)	Company Contributions to 401(k) Plan ($)	Severance ($)(v)
Claure	690,466	752,538	—	—	8,250	—
Combes	—	116,140	25,011	16,744	8,250	—
Davies	—	—	—	—	8,250	—
Cano	—	—	—	—	8,250	—
Gracia	—	—	—	—	8,250	—
Saw	—	—	65,040	32,975	8,250	—
Former Executive Officer
Crull	—	—	—	—	8,250	451,875

________________

(i)

The incremental cost of non-business use of our aircraft is calculated by dividing the total variable costs (such as fuel, aircraft maintenance, engine warranty expense, contract labor expense and other trip expenses) by the total flight hours for the past twelve months and multiplying such amount by the individual’s total number of flight hours for non-business use for the year. Pursuant to his amended and restated employment agreement, Mr. Claure is permitted unlimited personal usage of our corporate aircraft because the overall security program implemented for Mr. Claure, as further discussed above, substantially restricts him from flying commercially. Mr. Claure is also permitted to have his family or guests accompany him on the corporate aircraft for business and personal travel.

(ii)

For Messrs. Claure and Combes, represents the approximate aggregate incremental cost to the Company of security arrangements for Messrs. Claure and Combes in addition to security arrangements provided at business facilities and for business travel. Mr. Combes does not currently have a security program but was provided security arrangements from time to time in fiscal year 2018. For more information regarding Mr. Claure’s security program, please see “Executive Compensation - Other Components of Executive Compensation - Security Program.”


(iii)	For Mr. Combes, consists of relocation costs incurred in connection with relocation of Mr. Combes’s principal residence to the Overland Park, Kansas area in accordance with the Company’s relocation policy applicable to senior executives. For Mr. Saw, consists of a tax protected monthly living stipend of $5,420 until October 2019 as contemplated by his employment agreement, as amended.


(iv)	For Mr. Combes, consists of customary tax gross-ups in connection with relocation of his principal residences to the Overland Park, Kansas area. For Mr. Saw, consists of tax gross-ups in connection with his interim living stipend.


(v)	For Mr. Crull, consists of severance payments and other amounts accrued as a result of termination of his employment. For more information regarding these severance payments, see “Fiscal Year 2018 Potential Payments upon Termination of Employment or Change in Control.”

Fiscal Year 2018 Grants of Plan-Based Awards

The table below summarizes awards under our 2018 STIC and LTIC incentive plans to our named executive officers for the fiscal year ended March 31, 2019, plus additional plan-based awards granted during fiscal year 2018. These awards consisted of the following:


•	awards granted pursuant to our 2018 STIC plan;


•	time-based RSUs and pRSUs granted pursuant to our 2018 LTIC plan; and


•	the fiscal year 2018 portion of pRSUs granted under our 2016 LTIC plan.



				Estimated Possible Payouts Under Non-Equity Incentive Plan Awards			Estimated Future Payouts Under Equity Incentive Plan Awards
Name	Grant Date	Comm- ittee Action Date	Award Type	Threshold ($)	Target ($)	Maximum ($)	Threshold (#)	Target (#)	Maximum (#)	All Other Stock Awards: Number of Shares of Stock or Units (#)	All Other Options Awards: Number of Securities Underlying Options (#)	Exercise or Base Price of Option Awards ($/Sh)	Grant Date Fair Value of Stock and Option Awards ($)
Claure	4/25	4/25	STI⁽¹⁾	750,000	3,000,000	6,000,000	—	—	—	—	—	—		—
Combes	4/25	4/25	STI⁽¹⁾	750,000	3,000,000	6,000,000	—	—	—	—	—	—		—
	5/23	5/23	pRSU⁽²⁾	—	—	—	112,208	448,833	897,666	—	—	—		2,307,002
	5/23	5/23	RSU⁽³⁾	—	—	—	—	—	—	448,833	—	—		2,307,002
Davies	7/02	6/30	STI⁽¹⁾	140,240	560,959	1,121,918	—	—	—	—	—	—		—
	7/02	6/30	pRSU⁽²⁾	—	—	—	35,377	141,509	283,018	—	—	—		768,394
	7/02	6/30	RSU⁽³⁾	—	—	—	—	—	—	141,509	—	—		768,394
Cano	4/25	4/25	STI⁽¹⁾	325,000	1,300,000	2,600,000	—	—	—	—	—	—		—
	5/23	5/23	pRSU⁽²⁾	—	—	—	36,468	145,871	291,742	—	—	—		749,777
	5/23	5/23	RSU⁽³⁾	—	—	—	—	—	—	145,871	—	—		749,777
	5/23	5/23	pRSU⁽⁴⁾	—	—	—	1,726	6,903	13,806	—	—	—		35,481
Gracia	4/25	4/25	STI⁽¹⁾	181,250	725,000	1,450,000	—	—	—	—	—	—		—
	5/23	5/23	pRSU⁽²⁾	—	—	—	32,541	130,162	260,324	—	—	—		669,033
	5/23	5/23	RSU⁽³⁾	—	—	—	—	—	—	130,162	—	—		669,033
	5/23	5/23	pRSU⁽⁴⁾	—	—	—	11,236	44,944	89,888	—	—	—		231,012
Saw	4/25	4/25	STI⁽¹⁾	175,000	700,000	1,400,000	—	—	—	—	—	—		—
	5/23	5/23	pRSU⁽²⁾	—	—	—	28,277	113,106	226,212	—	—	—		581,365
	5/23	5/23	RSU⁽³⁾	—	—	—	—	—	—	113,106	—	—		581,365
	5/23	5/23	pRSU⁽⁴⁾	—	—	—	9,691	38,764	77,528	—	—	—		199,247
Former Executive Officer
Crull	4/25	4/25	STI⁽¹⁾	200,000	800,000	1,600,000	—	—	—	—	—	—		—
	5/23	5/23	pRSU⁽²⁾	—	—	—	44,883	179,533	359,066	—	—	—		922,800
	5/23	5/23	RSU⁽³⁾	—	—	—	—	—	—	179,533	—	—		922,800
	5/23	5/23	pRSU⁽⁴⁾	—	—	—	18,727	74,907	149,814	—	—	—		385,022

_______________

(1)

STI-Represents the threshold, target and maximum estimated possible payouts for fiscal year 2018 under our 2018 STIC plan. Mr. Claure’s actual fiscal year 2018 STIC plan target opportunity was $493,151, reflecting a proration of his target opportunity for the number of days he served as CEO in fiscal year 2018. Mr. Crull’s actual fiscal year 2018 STIC plan target opportunity was $602,740, reflecting a proration of his target opportunity for the number of days he was employed during fiscal year 2018.


(2)	pRSU-Represents a pRSU award granted under our 2018 LTIC plan, which is subject to payout in accordance with the performance objectives. Vesting of any earned pRSUs generally occurs, depending on achievement in the three-year performance period ending on March 31, 2021, on May 23, 2021. For Mr. Crull, 143,037 of such target pRSUs were forfeited as a result of his termination.


(3)	RSU-Represents a time-based RSU award granted under our 2018 LTIC plan. Vesting generally occurs in 1/3 amounts on each of May 23, 2019, May 23, 2020 and May 23, 2021. For Mr. Crull, 143,037 of such RSUs were forfeited as a result of his termination.

(4)

pRSU-Represents the fiscal year 2018 portion of a pRSU award granted under our 2016 LTIC plan, which is subject to adjustment in accordance with the performance objectives. Vesting of any earned pRSUs generally occurred, depending on achievement in the one-year performance period ending on March 31, 2019, on May 13, 2019. For Mr. Crull, 27,220 of such target pRSUs were forfeited as a result of his termination.

Employment Agreements

We had employment agreements (or in the case of Mr. Davies, an employment offer letter) with each of our named executive officers during fiscal year 2018. For information regarding the material terms of such employment agreements, see the tabular and narrative disclosure under “-Compensation Discussion and Analysis” and “-Fiscal Year 2018 Potential Payments upon Termination of Employment or Change in Control.”

Outstanding Equity Awards at 2018 Fiscal Year-End

The table below summarizes option awards and stock awards outstanding as of March 31, 2019 held by each of our named executive officers.

Option Awards

Stock Awards

Name

Number of

Securities

Underlying

Unexercised

Options (#)

Exercisable

Number of

Securities

Underlying

Unexercised

Options (#)

Unexercisable

Option

Exercise

Price

($)

Option

Expiration

Date

Number of

Shares or Units

of Stock that

Have Not

Vested

(#)

Market

Value of

Shares or

Units of

Stock that

Have Not

Vested

($)⁽¹⁾

Equity Incentive

Plan Awards:

Number of

Unearned

Shares, Units, or

Other Rights that

Have Not Vested

(#)

Equity

Incentive Plan

Awards:

Market or

Payout Value of

Unearned

Shares, Units,

or Other Rights

that Have Not

Vested

($)⁽¹⁾

Claure

2,949,077⁽²⁾

—

5.62

8/18/2024

10,000,000⁽⁵⁾

56,500,000

2,000,000⁽⁵⁾

11,300,000

Combes

66,401⁽³⁾

132,802⁽³⁾

5.29

1/30/2028

536,707⁽⁶⁾

3,032,395

3,668,517⁽⁶⁾

20,727,121

Davies

—

141,509⁽⁷⁾

799,526

141,509⁽⁷⁾

799,526

Cano

26,092⁽⁴⁾

13,047⁽⁴⁾

8.53

2/02/2027

1,972,246⁽⁸⁾

11,143,190

591,911⁽⁸⁾

3,344,297

24,127⁽³⁾

48,256⁽³⁾

8.17

5/24/2027

Gracia

20,281⁽²⁾

—

2.84

2/03/2026

718,200⁽⁹⁾

4,057,830

263,584⁽⁹⁾

1,489,250

72,398⁽⁴⁾

72,399⁽⁴⁾

3.44

5/13/2026

17,817⁽³⁾

35,635⁽³⁾

8.17

5/24/2027

Saw

113,165⁽²⁾

—

8.99

5/20/2024

975,757⁽¹⁰⁾

5,513,027

299,276⁽¹⁰⁾

1,690,909

—

62,444⁽⁴⁾

3.44

5/13/2026

15,367⁽³⁾

30,735⁽³⁾

8.17

5/24/2027

Former Executive Officer

Crull

29,695⁽²⁾

—

8.17

4/1/2019

2,306,159⁽¹¹⁾

13,029,798

548,069⁽¹¹⁾

3,096,590

________________


(1)	Market value is based on the closing price of a share of our common stock of $5.65 on March 29, 2019.


(2)	Stock options are fully vested.


(3)	Stock options generally vest/vested 33 1/3% on each of May 24, 2018, May 24, 2019 and May 24, 2020.


(4)	Stock options generally vest/vested 33 1/3% on each of May 13, 2017, May 13, 2018 and May 13, 2019.

(5)

Represents the TIA award granted to Mr. Claure consisting of (i) 10,000,000 pRSUs that have already been earned because the Company achieved the target VWAP Price target of $8.00, and (ii) 2,000,000 pRSUs that had not yet been earned because the Company had not achieved the maximum VWAP Price target of $10.00, in each case with respect to which the applicable performance period has not been completed that generally vest 50% on each of August 7, 2019 and August 7, 2020. Following the end of fiscal year 2018, the performance period for the TIA award granted to Mr. Claure ended on May 31, 2019. The TIA award granted to Mr. Claure was not earned at a 120% level (maximum) because we failed to achieve the maximum VWAP Price target of $10.00 during the applicable performance period.


(6)	Consists of time-based RSUs that generally vest as follows:



Amount	Vesting Date
87,874	50% on May 24, 2019 and May 24, 2020
448,833	33 1/3% on May 23, 2019, May 23, 2020 and May 23, 2021