January 23, 2006
Sprint Nextel Names New Board Member Designees to New Local Communications Company; Initial Form 10 Filed with SEC
OVERLAND PARK, Kan. — 01/23/2006
Sprint Nextel Corporation (NYSE: S) announced today that its board of directors has chosen five designees to the board of directors of the new company that will own and operate its local communications business, which it expects to separate in the second quarter of 2006. The designations will not become effective until the separation is completed. Four of the five designees are expected to be independent board members of the newly formed local communications company under the NYSE listing standards. These individuals represent a group of executive leaders from the communications, entertainment and media, finance, technology, marketing and government service arenas.
The director designees are:
Peter C. Brown, Chairman, President and Chief Executive Officer of AMC Entertainment Inc.
William A. Owens, former Chief Executive Officer of Nortel Networks Corporation and former Vice Chairman of the Joint Chiefs of Staff.
Dinesh C. Paliwal, Chairman and Chief Executive Officer of ABB Inc., the US subsidiary of ABB Ltd.; and President, Global Markets & Technology of ABB Ltd.
Stephanie M. Shern, member, board of directors, Sprint Nextel; former Vice Chairman and the Global Director of Retail and Consumer Products, Ernst & Young LLP.
Daniel R. Hesse, Chief Executive Officer, Sprint Nextel Local Telecommunications Division. Hesse will serve as the President and Chief Executive Officer of the company following the separation from Sprint Nextel, and he is expected to serve as Chairman of the Board. He will not be an independent director.
Each of the designees has agreed to serve on the board of the new local communications company.
"These are impressive leaders we are designating to serve on the board of directors of the new local communications company, and their experiences position them well to play key roles in the evolution of the local communications business," said Gary D. Forsee, president and chief executive officer for Sprint Nextel.
"With this group of directors, we see the new local communications company being governed by a board of world-class business leaders with proven acumen in critical areas including technology, customer service, marketing, media and entertainment, and public company governance," said Irvine O. Hockaday, Jr., one of the Lead Independent Directors of the Sprint Nextel board and Chair of its Nominating and Corporate Governance Committee. "These individuals were identified through a formal and rigorous selection process as defined by our corporate governance policies. We are pleased they have agreed to join the board of the new local communications company," added Hockaday.
"The impressive group of independent director designees is attracted by the opportunity to help shape a new and innovative company that we hope can redefine the local communications category," said Daniel R. Hesse, chief executive officer for Sprint Nextel Local Telecommunications Division.
Board members are expected to be formally appointed in connection with the completion of the separation of the new local communications company from Sprint Nextel. They will be elected annually by the company's stockholders. The company's board is expected to be in compliance with NYSE listing standards that require companies to have a majority of independent board members.
Separately, Sprint Nextel announced that a Form 10 registration statement was filed today with the Securities and Exchange Commission in connection with the proposed separation of its local communications business. The Form 10 filing was made by LTD Holding Company, which is the temporary name of the entity that will operate the local communications business following the separation. The new name of the company is expected to be announced in the first quarter of 2006.
Biographical summaries: Board of Directors Designees
Peter C. Brown, 47, is Chairman of the Board, Chief Executive Officer, and President of AMC Entertainment Inc., which is one of the world's leading theatrical exhibition companies. Pending the merger with Loews Cineplex Entertainment Corporation, AMC Entertainment Inc. will have interests in approximately 418 theatres with a total of 5,668 screens in 12 countries. He also founded Entertainment Properties Trust, an NYSE traded real estate investment trust.
Brown serves on the board of directors for Midway Games, Inc., a NYSE traded developer and publisher of interactive entertainment software, as well as of MovieTickets.com, Inc. and National CineMedia, LLC.
William A. Owens, retired, 65, is the former Chief Executive Officer of Nortel Networks Corporation, a $9.8 billion manufacturer of telecommunications products. Previously, Owens was Vice Chairman and co-Chief Executive Officer of Teledesic, LLC; and Vice Chairman, President, and COO of Science Applications International. He has extensive board experience and is a current board member of two publicly traded companies, Daimler-Chrysler AG and Polycom, Inc.
Owens served from 1994 to 1996 as Vice Chairman of the Joint Chiefs of Staff, the second-highest ranking military officer in the United States. Before that prestigious post, he served as Deputy Chief of Naval Operations for Resources, Warfare Requirements and Assessment.
Dinesh C. Paliwal, 48, is Chairman and Chief Executive Officer of ABB Inc., the US subsidiary of ABB Ltd.; and President, Global Markets & Technology of ABB Ltd. Until 2005, he was responsible for ABB's Automation Technologies division, which accounted for more than $10 billion of ABB's $21 billion in global revenues. Paliwal has been a member of the ABB Group Executive Committee since 2001.
Paliwal is Chairman of the National Foreign Trade Council (NFTC) and he sits on the boards of the US-China Business Council and the US-India Business Council. He also is a member of the Business Roundtable.
Stephanie M. Shern, 57, is a current Sprint Nextel board member and she has served on the Nextel board of directors since March 2003. She is expected to resign from the Sprint Nextel board upon completion of the separation.
Previously, she was Vice Chairman and the Global Director of Retail and Consumer Products for Ernst & Young, LLP, where she led the global business for audit, tax and consulting services. Shern is a CPA. Additionally, she serves on the board of directors of three publicly traded companies, The Scotts Miracle-Gro Company, GameStop Corp., and Royal Ahold NV.
Daniel R. Hesse, 52, was named Chief Executive Officer of Sprint Nextel's Local Telecommunications Division in June 2005. He has spent more than 27 years in the communications industry, including 23 years at AT&T, where he served as President and Chief Executive Officer of AT&T Wireless Services from 1997-2000. He was most recently Chairman, President and Chief Executive Officer of Terabeam Corporation.
Hesse serves as a director of two publicly-traded companies, Nokia Corporation and VF Corporation.
About the Local Communications Business
Upon the separation from Sprint Nextel, the local communications business is expected to be a NYSE-listed company with approximately $6 billion in revenues, rank among the Fortune 500 and serve as the fifth largest local communications company in the United States based on the company's 7.4 million access lines as of September 30, 2005. The company will provide a suite of communications services, consisting of local and long distance voice and data services, including high-speed Internet access. The company expects to have approximately 20,000 employees at the time of the separation from Sprint Nextel.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline communications services to consumer, business and government customers. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks offering industry leading mobile data services; instant national and international walkie-talkie capabilities; and an award-winning and global Tier 1 Internet backbone. For more information, visit www.sprint.com/about.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
The matters discussed in this press release that are not historical or current facts deal with potential future circumstances and developments, in particular relating to completion of the separation. This discussion is qualified by the inherent risks and uncertainties surrounding future events generally and also may differ materially from actual future experience involving any one or more of such matters. Such risks and uncertainties include: the result of the review of the proposed separation by various regulatory agencies and any conditions imposed on LTD Holding Company in connection with consummation of the separation, the approval of the separation by the Sprint Nextel board of directors, the receipt of satisfactory tax opinions and the risks that are described in the sections entitled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" contained in the Form 10 Registration Statement of LTD Holding Company, as filed with the Securities and Exchange Commission on January 23, 2006 and in Sprint Nextel's filings with the Securities and Exchange Commission including its Form 10-K for the year ended December 31, 2004, as amended, and its quarterly reports on Form 10-Q filed in 2005. In addition to the factors mentioned above and within the Form 10 Registration Statement and in Sprint Nextel's filings with the Securities and Exchange Commission, economic, governmental, technological, capital market and other factors could affect the forward-looking statements in this press release. Forward-looking statements speak only as of the date they were made, and neither Sprint Nextel nor LTD Holding Company undertakes an obligation to update or revise any forward-looking statements in light of new information or future events.