The agreement comes as part of a legal settlement and includes increasing the number of independent directors on its board and setting term limits. As part of the changes, Sprint will request shareholder approval to eliminate the board’s three-year staggered terms, set strict independence standards for directors, and set a goal to have two-thirds of the board consist of independent directors by the 2004 annual meeting of shareholders, according to a Reuters report.
Further, independent directors will be prohibited from providing professional services to certain officers.
The shareholder lawsuits stemmed from Sprint’s failed merger with larger rival WorldCom, which fell apart amid pressure from domestic and overseas antitrust regulators. Stockholders maintained they were not properly informed of the regulatory risks, even as Sprint executives accelerated $1.7 billion in employee stock options regardless of whether the merger took place or executives lost their jobs.
Sprint said it would take a charge in the first quarter related to the $50-million settlement of the class action suit. The company anticipates the majority of the settlement to be covered by insurance.