KIRKLAND, Wash.-Nextel Partners Inc. has adopted a retention and severance program that will make all Nextel Partners executives eligible to receive cash incentives if the carrier exercises its “put right” in connection with Nextel Communications Inc.’s pending merger agreement with Sprint Corp. If exercised, the “put right” would force Nextel to acquire Nextel Partners at fair market value plus a premium, which analysts expect would be between 10 to 20 percent above Nextel Partners’ market value.
The program would allow Nextel Partners’ executives to receive a cash payment equal to 100 percent of their base salaries and annual performance bonuses if there is a change in control at the carrier. Half of the payment would be available at the time of a change in control, with the balance payable six months later.
The plan also provides executive officers involuntarily terminated within a year after a change of control with a severance payment equal to 200 percent of their base salaries and annual performance bonuses plus medical and dental benefits for two years. Executive stock options will also fully vest in the event of a change in control if the carrier achieves certain 2005 operating objectives.
Nextel Partners said it has 18 months following the close of the proposed merger to exercise its “put right.”
