Document:

Form of Tax Sharing Agreement

 EXHIBIT 10.3 
 FORM OF TAX SHARING AGREEMENT 
 TAX SHARING AGREEMENT dated as of [•], 2006 (this
“Agreement”) between Sprint Nextel Corporation, a Kansas corporation (“Sprint Nextel”), Embarq Corporation, a Delaware corporation (“Embarq”) and the Embarq subsidiaries listed on Schedule 1 hereto
(collectively, the “Companies”). 
 WHEREAS, as of the date of this Agreement, the Sprint Nextel affiliated group includes
Embarq and certain of its future subsidiaries; 
 WHEREAS, the Companies have entered into the Separation and Distribution Agreement,
pursuant to which Sprint Nextel has agreed to contribute to Embarq the stock and assets associated with its local exchange carrier business and certain other assets in exchange for shares of common stock of Embarq, cash, securities of Embarq and the
assumption by Embarq of certain liabilities of Sprint Nextel (the “Contribution”); 
 WHEREAS, Sprint Nextel intends to
distribute to its shareholders all the outstanding shares of stock of Embarq (the “Distribution”); 
 WHEREAS, the Companies
believe the Distribution will (i) facilitate growth and efficiency of operations and, in turn, maximize the profitability of each of Sprint Nextel and Embarq, including by eliminating strategic conflicts, and (ii) create entities that have
different financial characteristics that may appeal to different investor bases; 
 WHEREAS, the Companies intend that the Contribution and
the Distribution qualify as a “reorganization” under Section 368(a) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), with respect to which no gain or loss is recognized under Code Sections 361 and
355; 
 WHEREAS, as a result of and upon the Distribution, Embarq and its subsidiaries will cease to be members of the Sprint Nextel
affiliated group; and 
 WHEREAS, the Companies desire to allocate the Tax responsibilities, liabilities and benefits of transactions that
occur on or prior to, and that may occur after, the date on which the Distribution occurs (the “Distribution Date”) and to provide for and address certain other Tax matters; 

 NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Companies
(each on behalf of itself, each of its Affiliates, and its future Affiliates) hereby agree as follows:
 ARTICLE I 
 Definitions 
 SECTION 1.01
Definition of Terms. The following terms shall have the following meanings (such meanings to apply equally to both the singular and the plural forms of the terms defined). All section and Exhibit references are to this Agreement unless
otherwise stated. 
 “Active Trade or Business” means the active conduct by Embarq of the businesses conducted by the
members of the Embarq Group as of the Distribution (determined in accordance with Code Section 355(b)). 
 “Adjustment
Request” means any formal or informal claim or request filed with any governmental authority for any Refund, underpayment or overpayment of Tax or any change in available Tax Attributes. 
 “Affiliate” of any person means any entity that, after the Distribution, is directly or indirectly “controlled” by any of
(i) the person in question, (ii) any person of which the person in question is an Affiliate under clause (i), or (iii) any Affiliate under clause (i) of a person described in clause (ii). For purposes of this definition,
“control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise. 

“Agreement” has the meaning set forth in the recitals. 
 “Ancillary Agreement” has the meaning set forth in the Separation and Distribution Agreement. 
 “Code” has the meaning set forth in the recitals. 
 “Companies” has the meaning set forth in the
recitals. 
 “Contribution” has the meaning set forth in the recitals. 
 “Distribution” has the meaning set forth in the recitals. 
 “Distribution Date” has the meaning set forth in the recitals. 
 “Embarq”
has the meaning set forth in the recitals. 
 “Embarq Capital Stock” means (i) all classes or series of capital stock
of Embarq, including common stock and all other instruments treated as equity in Embarq for U.S. federal income tax purposes and (ii) all options, warrants and other rights to acquire such capital stock. 
  

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 “Embarq Carryback” means any net operating loss, net capital loss, excess tax credit or
other similar Tax item of any member of the Embarq Group that may or must be carried from one taxable period to a prior taxable period under applicable Tax law. 
 “Embarq Group” means Embarq and its Affiliates. 
 “Final Determination”
means the final resolution of liability for any Tax for any taxable period by or as a result of (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction; (ii) a final settlement with the
IRS, a closing agreement or accepted offer in compromise under Code Sections 7121 or 7122, or a comparable arrangement under the laws of another jurisdiction; (iii) any allowance of a Refund in respect of an overpayment of Tax, but only after
the expiration of all periods during which such amount may be recovered by the Taxing Authority imposing the Tax; or (iv) any other final disposition, including by reason of the expiration of the applicable statute of limitations. 

“Group” means the Sprint Nextel Group or the Embarq Group, or both, as the context requires. 
 “High-Level Dispute” means any dispute arising in connection with this Agreement and (i) relating to liability under
Section 2.02 or (ii) in which the amount of liability in dispute exceeds $20 million. 
 “Indemnitee” has the
meaning set forth in Section 5.01. 
 “Indemnifying Party” has the meaning set forth in Section 5.01. 

“IRS” means the U.S. Internal Revenue Service. 
 “Joint Return” means any Return that includes both a member of the Sprint Nextel Group and a member of the Embarq Group. 
 “Past Practices” has the meaning set forth in Section 3.03(a). 
 “Pre-Distribution Period” means any taxable period (or portion thereof) ending on or before the close of the Distribution Date. 
 “Proposed Acquisition Transaction” has the meaning set forth in Section 4.02(b)(i). 
 “Refund” means any cash refund of Taxes or reduction of Taxes by means of credit, offset or otherwise. 
 “Restricted Period” means the period beginning on the date of this Agreement and ending on, and including, the last day of the eighteen month period following the Distribution Date. 
  

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 “Ruling” means all private letter rulings granted by the IRS relating to the
Transactions (whether granted prior to, on or after the date hereof), requests for such rulings, including all supplemental ruling requests and information submissions, and any exhibit to any of the foregoing. 
 “Satisfactory Guidance” means either a ruling from the IRS or an Unqualified Tax Opinion, at the election of Embarq, in either case
reasonably satisfactory to Sprint Nextel in both form and substance, including with respect to any underlying assumptions or representations. Satisfactory Guidance shall not include an Unqualified Tax Opinion with respect to which Sprint
Nextel’s counsel, of recognized national standing, provides an opinion to Sprint Nextel that the conclusions in such Unqualified Tax Opinion are not free from doubt. For the avoidance of doubt, this definition is intended to allow Sprint Nextel
to prevent Embarq from taking the action that is the subject of a ruling from the IRS or an Unqualified Tax Opinion, if Sprint Nextel determines in good faith that there is any tax risk to it from such action based upon either (1) any
uncertainty concerning any underlying assumptions or representations in such ruling or opinion or (2) any legal uncertainty referred to in advice it receives from its counsel. 
 “Separate Return” means (i) in the case of the Embarq Group, a Tax Return of any member of that Group (including any consolidated,
combined, affiliated or unitary Return) that does not include, for all or any portion of the relevant taxable period, any member of the Sprint Nextel Group and (ii) in the case of the Sprint Nextel Group, a Tax Return of any member of that
Group (including any consolidated, combined, affiliated or unitary Return) that does not include, for all or any portion of the relevant taxable period, any member of the Embarq Group. 
 “Separation and Distribution Agreement” means the Separation and Distribution Agreement, as amended from time to time, by and between
Sprint Nextel and Embarq dated [•]. 
 “Sprint Nextel” has the meaning set forth in the recitals. 
 “Sprint Nextel Group” means Sprint Nextel and its Affiliates. For the avoidance of doubt, the Sprint Nextel Group excludes any entity
that is a member of the Embarq Group. 
 “Taxes” means all forms of taxation or duties imposed, or required to be collected
or withheld, including charges, together with any related interest, penalties or other additional amounts. For the avoidance of doubt, the term “Taxes” does not include amounts to be paid to any governmental authority pursuant to escheat
law. 
 “Tax Advisor” means a U.S. tax counsel or other tax advisor of recognized national standing reasonably acceptable to
both parties. 
  

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 “Tax Attribute” means a net operating loss, net capital loss, investment credit, foreign
tax credit, excess charitable contribution, general business credit or any other item of loss, deduction or credit that could reduce a Tax liability. 
 “Tax Contest” means an audit, review, examination or any other administrative or judicial proceeding with the purpose or effect of determining or redetermining Taxes (including any administrative or
judicial review of any Adjustment Request). 
 “Tax Dispute” means any dispute arising in connection with this Agreement
other than a High-Level Dispute. 
 “Tax-Free Status” means the qualification of the Contribution and Distribution, taken
together, as a transaction (i) that is a “reorganization” described in Code Sections 355(a) and 368(a)(1)(D), (ii) in which the Embarq stock and securities distributed are “qualified property” for purposes of Code
Sections 355(c) and 361(c), (iii) in which Sprint Nextel, Embarq and the shareholders of Sprint Nextel recognize no income or gain for U.S. federal income tax purposes pursuant to Code Sections 355, 361 and 1032 and (iv) that
qualifies for tax-free treatment under comparable provisions of state, local and foreign law. For the avoidance of doubt, recognition of income or gain that relates to items discussed in Sections 2.03 or 2.04 or to intercompany items shall not cause
the Contribution and the Distribution to fail to achieve Tax-Free Status. 
 “Tax Opinions/Rulings” means (i) any
Ruling and (ii) the opinions of Tax Advisors relating to the Transactions including, without limitation, those issued either at the time of the Distribution or to allow a party to take actions otherwise prohibited under this Agreement.

 “Tax Return” or “Return” means any return, filing, report, questionnaire, information statement, claim
for refund, or other document required or permitted to be filed, including any amendments that may be filed, for any taxable period with any Taxing Authority. 
 “Taxing Authority” means any governmental authority imposing Taxes. 
 “Transactions” means the Contribution, the Distribution, the transactions contemplated by the Separation and Distribution Agreement and any other transfer of assets (whether by contribution, sale or otherwise) between any
member of the Sprint Nextel Group and any member of the Embarq Group in connection with the Contribution or Distribution. 
 “Transaction Taxes” means all (i) Taxes of any member of the Sprint Nextel Group or the Embarq Group resulting from, or arising in connection with, the failure of the Contribution and Distribution to have Tax-Free
Status, (ii) Taxes of the type described in clause (i) of any third party for which any member of the Sprint Nextel Group or the Embarq Group is or becomes liable, and (iii) reasonable out of pocket legal, accounting and other
advisory and court fees in connection with liability for Taxes described in clauses (i) or (ii). 
  

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 “Unqualified Tax Opinion” means an unqualified “will” opinion of a Tax Advisor
that permits reliance by Sprint Nextel. The Tax Advisor, in issuing its opinion, shall be permitted to rely on the validity and correctness, as of the date given, of any previously issued Tax Opinions/Rulings, unless such reliance would be
unreasonable under the circumstances. 
 ARTICLE II 
 Payment of Taxes 
 SECTION 2.01 Ordinary Course Taxes. (a) Except as provided in Sections
2.02, 2.03 and 2.04, Embarq shall be liable, and shall indemnify the Sprint Nextel Group, pursuant to the principles set forth in Exhibit A. 
 (b) Except as provided in Sections 2.02, 2.03 and 2.04, Sprint Nextel shall be liable, and shall indemnify the Embarq Group, pursuant to the principles set forth in Exhibit A. 
 (c) Sprint Nextel and Embarq shall agree on a reasonable apportionment between the Sprint Nextel Group and the Embarq Group of the existing limitation
under Code Section 382 that applies to net operating loss carryforwards in the existing Sprint Nextel consolidated group, and any comparable limitations under state or local law. 
 SECTION 2.02 Transaction Taxes. (a) Embarq shall be liable, and shall indemnify the Sprint Nextel Group, for any Transaction Taxes that are
attributable to: 
 (i) any inaccurate statement or representation of fact or intent (or omission to state a material fact)
(x) in Section 4.01 that relates to the Embarq Group (and the representations in Section 4.01 shall be deemed, solely for purposes of this Section 2.02(a)(i), to be made both as of the date of this Agreement and as of the
Distribution Date) or (y) identified in Exhibit B1 or B2; 
 (ii) any inaccurate statement or representation of fact or
intent (or omission to state a material fact) in a letter or certificate that is provided by any member of the Embarq Group after March 1, 2006, and that forms the basis for the Tax Opinions/Rulings; 
 (iii) any action or omission by the Embarq Group after the date of this Agreement inconsistent with the covenants set forth in this
Agreement; or 
 (iv) any other action or omission by the Embarq Group after the date of this Agreement (except for actions
disclosed in any ruling request submitted to the IRS prior to the date hereof), including any action or omission that would 
  

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 have resulted in Embarq being in breach of Section 4.02(b) but for the receipt by Embarq of a ruling
from the IRS, an Unqualified Tax Opinion or a waiver. 
 (b) Sprint Nextel shall be liable, and shall indemnify the Embarq Group, for any
Transaction Taxes attributable to: 
 (i) any inaccurate statement or representation of fact or intent (or omission to state a
material fact) made (x) in Section 4.01 that relates to the Sprint Nextel Group (and the representations in Section 4.01 shall be deemed, solely for purposes of this Section 2.02(b)(i), to be made both as of the date of this
Agreement and as of the Distribution Date) or (y) before March 1, 2006 and that formed the basis for any Tax Opinions/Rulings, excluding the representations identified on Exhibit B1; 
 (ii) any inaccurate statement or representation of fact or intent (or omission to state a material fact) in a letter or certificate that
is provided by any member of the Sprint Nextel Group after March 1, 2006 and that forms the basis for the Tax Opinions/Rulings; 
 (iii) any action or omission by the Sprint Nextel Group after the date of this Agreement inconsistent with the covenants set forth in this Agreement; or 
 (iv) any other action or omission (except for actions disclosed in any ruling request submitted to the IRS prior to the date hereof) by
the Sprint Nextel Group. 
 (c) Liability for any Transaction Taxes described in both paragraphs (a) and (b) shall be shared by
Sprint Nextel and Embarq according to relative fault. 
 SECTION 2.03 Transfer Taxes. The Sprint Nextel Group shall be liable, and
shall indemnify the Embarq Group, for any stamp, sales, use, gross receipts, value-added, real estate transfer or other transfer Taxes imposed in connection with the Transactions. 
 SECTION 2.04 Other Income Taxes. Without regard to anything to the contrary in Exhibit A, Sprint Nextel shall be liable, and shall indemnify the
Embarq Group, for all Taxes arising as a result of the Transactions from (i) excess loss accounts taken into account under Code Section 1502, (ii) Code Section 357(c) or (iii) Code Section 361(b), in each case, including under similar state law
provisions. Deferred intercompany gains will be governed solely by Exhibit A. Notwithstanding the foregoing, Embarq shall be liable, and shall indemnify Sprint Nextel, for Transaction Taxes arising on the issuance of Embarq securities to Sprint
Nextel as a result of Embarq’s actions or failure to take actions following the Distribution with respect to such securities. 
  

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 ARTICLE III 
 Preparation and Filing of Tax Returns 
 SECTION 3.01 Sprint Nextel Responsibility. (a) Subject
to paragraph (b) below, Sprint Nextel shall make all determinations with respect to, have ultimate control over the preparation of and file all (i) Joint Returns and (ii) Sprint Nextel Separate Returns, in each case as it determines to be mandatory
or advisable and for all taxable periods. 
 (b) If, in connection with the preparation of any Joint Return, Sprint Nextel materially
modifies any information relating to, or provided in, the pro forma federal and state income Tax Returns or other information related to members of the Embarq Group prepared by Embarq and provided to Sprint Nextel pursuant to Section 3.02 below, the
portions of the Joint Returns that include such information shall be submitted to Embarq no later than 100 days prior to the due date (including extensions) for filing of such federal Joint Returns and 20 days prior to the due date (including
extensions) for filing of such state Joint Returns (or if such due date is within 100 days following the Distribution Date, as promptly as practicable following the Distribution Date). Within 10 days after delivery of any such revised portions of
any Joint Return, Embarq shall provide comments to Sprint Nextel in writing to the extent Embarq objects to any revisions that could reasonably be expected to adversely impact any member of the Embarq Group. Such Embarq comments shall be
incorporated into the Joint Return upon the consent of Sprint Nextel, not to be unreasonably withheld. If Embarq does not so notify Sprint Nextel of any objection, Embarq shall be considered to have consented to the filing of such Joint Return. The
dates for submissions to Embarq required in this section may be modified by mutual agreement of Sprint Nextel and Embarq. 
 SECTION 3.02
Embarq Responsibility. Embarq shall make all determinations with respect to, have ultimate control over the preparation of and file all Tax Returns (other than those described in Section 3.01) for the Embarq Group as it determines to be
mandatory or advisable and for all taxable periods. Embarq shall prepare and provide to Sprint Nextel all pro forma federal and state income Tax Returns and other information related to members of the Embarq Group required to complete any Joint
Return, in the format reasonably requested by Sprint Nextel, and at least 110 days prior to the due date (including extensions) of the relevant federal Joint Return and at least 100 days prior to the due date (including extensions) of the relevant
state Joint Return. The dates for submissions to Sprint Nextel required in this section may be modified by mutual agreement of Sprint Nextel and Embarq. 
 SECTION 3.03 Tax Accounting Practices. (a) Except as provided in Section 3.03(b), any Tax Return for any Pre-Distribution Period, to the extent it relates to members of the Embarq Group, shall be prepared in
accordance with practices, accounting methods, elections, conventions and Tax positions used with respect to the Tax Return in question for periods prior to the Distribution (“Past Practices”), and, in the case of any item the treatment of
which is not addressed by Past Practices, in accordance with generally acceptable Tax accounting practices. Notwithstanding the foregoing, for 
  

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 any Tax Return described in the preceding sentence, (i) a party will not be required to follow Past Practices with
either the written consent of the other party (not to be unreasonably withheld) or a “should” level opinion from a Tax Advisor that the proposed method of reporting is correct and (ii) Sprint Nextel shall have the right to determine
which entities will be included in any consolidated, combined, affiliated or unitary Return that it is responsible for filing. 
 (b) The
parties shall report the Transactions for all Tax purposes in a manner consistent with the Tax Opinions/Rulings, unless, and only to the extent, an alternative position is required pursuant to a Final Determination. Sprint Nextel shall determine the
Tax treatment to be reported on any Tax Return of any Tax issue relating to the Transactions that is not covered by the Tax Opinions/Rulings. 
 SECTION 3.04 Right to Review Tax Returns. Upon request, each party shall make available to the other party the portion of Pre-Distribution Period Tax Returns that relates to the Embarq Group that the first party is responsible for
preparing under this Article III. 
 SECTION 3.05 Embarq Adjustment Requests. (a) Except with the written consent of Sprint Nextel
(not to be unreasonably withheld) and subject to paragraph (b), Embarq will not file any Adjustment Request with respect to any Joint Return or any Embarq Separate Return for income Taxes for any Pre-Distribution Period unless required by law. For
the avoidance of doubt, Embarq shall be permitted to file any Adjustment Request with respect to any Embarq Separate Return for Taxes other than income Taxes. To the extent legally permitted, Embarq will waive the right to claim any Embarq Carryback
to any Pre-Distribution Period with respect to any Joint Return. Subject to paragraph (b), any Adjustment Request made under this Section 3.05 shall be prepared by the party that filed the Tax Return to be adjusted and the cost shall be borne by the
parties in proportion to the benefit that each would receive from such adjustment. 
 (b) Embarq may prepare and file any Adjustment Request
with respect to the matters described on Exhibit C at the times provided on Exhibit C. 
 ARTICLE IV 
 Tax-Free Status of Distribution 
 SECTION 4.01 Representations. Each of Embarq and Sprint Nextel represents that (i) it knows of no fact (other than the facts disclosed in any ruling request submitted prior to the date hereof) that may cause the Contribution and the
Distribution to fail to have Tax-Free Status and (ii) it has no plan or intention to take any action inconsistent with the Tax Opinions/Rulings or the covenants set forth in this Agreement. 
 SECTION 4.02 Covenants. (a) Each of Embarq and Sprint Nextel will not take or fail to take, or permit its Affiliates to take or fail to take, any
action where that action or omission would (i) violate, be inconsistent with or cause to be untrue any covenant, representation or statement in any Tax Opinions/Rulings or a letter or certificate that forms the basis therefor, or (ii) prevent, or be
reasonably likely to prevent, the Tax-Free Status. 
  

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 (b) During the Restricted Period, except as provided in paragraph (c), Embarq shall not, and shall not
permit its Affiliates to, in a single transaction or in a series of transactions: 
 (i) permit any transaction or series of
transactions (or any agreement, understanding or arrangement to enter into a transaction or series of transactions) as determined for purposes of Code Section 355(e), in connection with which (A) any member of the Embarq Group would merge
or consolidate with any person other than any other member of the Embarq Group, (B) any member of the Embarq Group would form one or more joint ventures with any person other than any other member of the Embarq Group in which, in the aggregate,
more than 10% of the gross assets of the Embarq Group are transferred to such joint ventures or (C) any person would (directly or indirectly) acquire, or have the right to acquire, from any other person, any interest in Embarq Capital Stock (a
“Proposed Acquisition Transaction”). For these purposes, any recapitalization, repurchase or redemption of Embarq Capital Stock shall be treated as an indirect acquisition of such stock by any non-exchanging shareholder to the
extent such shareholder’s percentage interest in the issuer increases by vote or value. Notwithstanding the foregoing, a Proposed Acquisition Transaction shall not include (w) the adoption by Embarq of a shareholder rights plan that meets
the requirements of IRS Revenue Ruling 90-11, (x) issuances of Embarq Capital Stock pursuant to an employee stock purchase agreement or equity compensation plan that Sprint Nextel has notified Embarq in writing is acceptable to Sprint Nextel in
its sole discretion (for the avoidance of doubt, (i) any modification or amendment to such agreement or plan is also subject to the prior written consent of Sprint Nextel and (ii) Sprint Nextel’s approval is required for the
underlying purchase agreement or plan but not for each issuance of stock pursuant thereto), (y) transfers on an established market of Embarq Capital Stock described in Safe Harbor VII of Treasury Regulation Section 1.355-7(d) or
(z) issuances of Embarq Capital Stock described in Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d). 
 (ii) liquidate or partially liquidate, including by way of merger or consolidation, any member of the Embarq Group other than Embarq;

 (iii) liquidate or partially liquidate Embarq; 
 (iv) cause or permit Embarq to cease to engage in the Active Trade or Business; 
 (v) sell or transfer assets, other than inventory sold or transferred in the ordinary course of business, constituting (A) 50% or
more of the gross assets that are held by any member of the Embarq Group and are used in the Active Trade or Business and are relied upon to satisfy the requirements of 355(b), (B) 50% or 
  

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 more of the consolidated gross assets of the Embarq Group that are used in an Active Trade or Business
(such percentages to be measured based on fair market value as of the Distribution Date) or (C) any lesser amount if that sale or transfer could reasonably be expected to result in a significant and material change to, or termination of, the
Active Trade or Business immediately after the Distribution Date; provided, however, that clauses (A) and (B) of this clause (iv) shall not be deemed violated if both (x) they would be violated solely because of
tax-free exchanges of like kind assets under Code Section 1031, and (y) they would not be violated if 50% in such clauses were replaced with 66 2/3%; or 
 (vi) amend its certificate of incorporation (or other organizational documents), or take any other action, affecting the relative voting
rights of the separate classes of Embarq Capital Stock; provided, however, that this clause (vi) shall not be deemed to be violated upon Embarq’s adoption of a shareholder rights plan that meets the requirements of IRS
Revenue Ruling 90-11. 
 (c) Notwithstanding paragraph (b): 
 (i) clauses (i) through (vi) of paragraph (b) shall not apply upon the prior written consent of Sprint Nextel, which
consent may not be withheld if Sprint Nextel determines in good faith that Embarq has provided it with Satisfactory Guidance concluding that the proposed actions will not result in Transaction Taxes; 
 (ii) clauses (ii) and (v) of paragraph (b) shall not apply after the six month anniversary of the Distribution Date;

 (iii) for purposes of clause (i), if Embarq provides Sprint Nextel an Unqualified Tax Opinion that is intended to be
Satisfactory Guidance concerning a Proposed Acquisition Transaction, then such Opinion may be based on the assumption that Sprint Nextel did not have any agreement, understanding, arrangement or substantial negotiations, within the meaning of
Treasury Regulations Section 1.355-7(h), with the counterparty to the Proposed Acquisition Transaction within the two year period preceding the Distribution Date and such assumption shall not prevent such Unqualified Tax Opinion from being
considered Satisfactory Guidance by the parties, provided that (x) such assumption must be based on a certificate of such counterparty that such assumption is true to the best of its knowledge and belief, and (y) Sprint Nextel may deem
such Opinion not to be Satisfactory Guidance if, in its reasonable judgment, there is a risk that such assumption is not correct. 
 (iv) In the event that Embarq intends to consummate any Proposed Acquisition Transaction after the end of the Restricted Period but before the end of 30 months after the Distribution Date, then either (x) Embarq shall be permitted to
consummate such proposed Acquisition Transaction, provided that Embarq shall provide Sprint Nextel with an unconditional certification that it did not have any agreement, understanding, arrangement or substantial negotiations, 
  

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 within the meaning of Treasury Regulations Section 1.355-7(h), with the counterparty to such
transaction within 12 months after the Distribution Date, and Sprint Nextel after reasonable due investigation is satisfied with the correctness of such certification, or (y) such Proposed Acquisition Transaction shall be subject to the
provisions under Sections 4.02(b) and (c). 
 (d) Notwithstanding anything herein to the contrary, for purposes of paragraph (c), no Ruling
shall be obtained from the IRS if Sprint Nextel determines that there is a reasonable possibility that such an action could have a significant adverse impact on any member of the Sprint Nextel Group. Notwithstanding the foregoing, the parties agree
to use reasonable efforts to seek a Ruling no later than 90 days after the Distribution substantially to the effect that open-market repurchases by either Sprint Nextel or Embarq of its own stock shall not affect the Tax-Free Status. 
 SECTION 4.03 Procedures Regarding Opinions and Rulings. (a) Subject to Section 4.02(d), if Embarq may take certain actions conditioned upon the
receipt of Satisfactory Guidance, Sprint Nextel, at the request of Embarq, shall use commercially reasonable efforts to expeditiously obtain, or assist Embarq in obtaining, such Satisfactory Guidance. Sprint Nextel shall not be required to take any
action pursuant to this Section 4.03(a) if Embarq fails to certify, upon request, that all information and representations relating to any member of the Embarq Group in the relevant documents are true, correct and complete. Embarq shall reimburse
Sprint Nextel for all reasonable out-of-pocket costs and expenses incurred by the Sprint Nextel Group in obtaining Satisfactory Guidance. 
 (b) Sprint Nextel shall have the right to obtain a ruling from the IRS (or any other Taxing Authority) or an Unqualified Tax Opinion at any time in its sole discretion. Sprint Nextel shall reimburse Embarq for all reasonable out-of-pocket
costs and expenses incurred by the Embarq Group in obtaining such a ruling or Unqualified Tax Opinion. 
 (c) Sprint Nextel shall have
exclusive control over the process of obtaining any ruling relating to the Transactions and neither Embarq nor any of its Affiliates shall independently seek any guidance concerning the Transactions from any Taxing Authority at any time. In
connection with any ruling relating to the Transactions that can reasonably be expected to affect Embarq liabilities under this Agreement, Sprint Nextel shall (i) keep Embarq informed of all material actions taken or proposed to be taken by
Sprint Nextel, (ii) reasonably in advance of the submission of any ruling request provide Embarq with a draft thereof, consider Embarq’s comments on such draft, and provide Embarq with a final copy, and (iii) provide Embarq with
notice reasonably in advance of, and permit Embarq to attend, any formally scheduled meetings with the IRS (subject to the approval of the IRS) that relate to such ruling. 
  

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 ARTICLE V 
 Tax Contests; Indemnification; Cooperation 
 SECTION 5.01 Notice. (a) Within 15 days after a
party (the “Indemnitee”) becomes aware of the existence of a Tax Contest that may give rise to an indemnification claim under this Agreement by it against the other party (the “Indemnifying Party”), the Indemnitee
shall promptly notify the Indemnifying Party of the Tax Contest, and thereafter shall promptly forward or make available to the Indemnifying Party copies of notices and communications with a Taxing Authority relating to such Tax Contest. 

(b) The Indemnifying Party shall not be responsible for any increase in amounts to which the Indemnitee is otherwise entitled to the extent that such
increase results solely from the failure of the Indemnitee to provide timely notice as required pursuant to Section 5.01(a). 
 SECTION
5.02 Control of Tax Contests. (a) Except as otherwise provided in paragraphs (b) and (d): 
 (i) Sprint
Nextel may elect to control, and to have sole discretion in handling, settling or contesting, any Tax Contest relating to any Joint Returns, any Sprint Nextel Separate Returns or the Tax treatment of the Transactions, provided that
(x) Sprint Nextel shall act in good faith in connection with its control of any such Tax Contests and (y) Embarq shall have the right to participate in and advise on (including, without limitation, the opportunity to review and comment
upon Sprint Nextel’s communications with the Taxing Authority, which comments shall be incorporated upon the consent of Sprint Nextel, not to be unreasonably withheld) such items for which Embarq could be liable under Article II as a result of
such Tax Contest; and 
 (ii) If Embarq disagrees with Sprint Nextel’s decision to settle a Tax Contest that may
reasonably be expected to affect amounts for which it is liable under Article II, it shall have the right to contest its liability to Sprint Nextel under Article II notwithstanding the settlement. Embarq shall provide written notice to Sprint Nextel
of its intention to contest its liability as a result of any settlement (and its irrevocable election described below) prior to the time such settlement is entered into. Any such contest by Embarq shall be made under the procedures set forth in
Article VI. Under those procedures, Embarq may irrevocably elect, in its sole discretion, to require the Tax Advisor or the arbitrator to determine either (x) the amount of a settlement with the relevant Taxing Authority that would most
accurately reflect the litigation risk of the relevant issue, or (y) the most likely outcome of the issue if it were litigated without a settlement. In either such case, Embarq shall be liable to Sprint Nextel, or Sprint Nextel shall be liable
to Embarq, based solely on the determination of the Tax Advisor or the arbitrator as if a settlement or litigation implementing such determination had actually occurred, without regard to the actual settlement. For the avoidance of doubt, this
clause (ii) shall not limit Sprint Nextel’s ability to settle a Tax Contest. 
  

 13 

 (b) Sprint Nextel and Embarq shall jointly control Tax Contests relating to tax liability arising from
the failure of the Transactions to qualify for tax-free treatment under Code Sections 355 or 361, if Embarq potentially would be liable to Sprint Nextel under Article II as a result of such Tax Contest. Neither party shall have the right to settle
any such Tax Contest without the consent of the other party. 
 (c) Except as provided in clauses (i)-(iii) below, Embarq shall have
sole control over any Tax Contest relating to the Embarq Separate Returns. 
 (i) Sprint Nextel shall have sole control over
any Tax Contest relating to the Centel Directory Company or any subsidiary thereof. 
 (ii) Sprint Nextel shall have sole
control over any Tax Contests relating to a Return of a partnership in which an Embarq Group member was a partner and the interests in which were included in the assets distributed by Sprint in the 1996 distribution of certain wireless operations.

 (iii) To the extent that a Tax Contest relates to an Embarq Separate Return with respect to which, pursuant to this
Agreement, Sprint Nextel is responsible for any Taxes, clauses (x) and (y) below shall govern: 
 (x) Embarq may
elect to control, and to have sole discretion in handling, settling or contesting, such Tax Contest, provided that (I) Embarq shall act in good faith in connection with its control of any such Tax Contests and (II) Sprint Nextel shall
have the right to participate in and advise on (including, without limitation, the opportunity to review and comment upon Embarq’s communications with the Taxing Authority, which comments shall be incorporated upon the consent of Embarq, not to
be unreasonably withheld); and 
 (y) If Sprint Nextel disagrees with Embarq’s decision to settle such Tax Contest, it
shall have the right to contest its liability to Embarq under Article II notwithstanding the settlement. Sprint Nextel shall provide written notice to Embarq of its intention to contest its liability as a result of any settlement (and its
irrevocable election described below) prior to the time such settlement is entered into. Any such contest by Sprint Nextel shall be made under the procedures set forth in Article VI. Under those procedures, Sprint Nextel may irrevocably elect, in
its sole discretion, to require the Tax Advisor or the arbitrator to determine either (I) the amount of a settlement with the relevant Taxing Authority that would most accurately reflect the litigation risk of the relevant issue, or (II) the
most likely outcome of the issue if it were litigated without a settlement. In either such case, Sprint Nextel shall be liable to Embarq, or Embarq shall be liable to Sprint Nextel, based solely on the determination 
  

 14 

 of the Tax Advisor or the arbitrator as if a settlement or litigation implementing such determination had
actually occurred, without regard to the actual settlement. For the avoidance of doubt, this clause (y) shall not limit Embarq’s ability to settle a Tax Contest. 
 (d) Embarq may elect to control, and to have sole discretion in handling, settling or contesting, any Tax Contest for a Pre-Distribution Period to the
extent such Tax Contest relates to the matters described on Exhibit C; provided that Sprint Nextel shall have the right to participate in and advise on all aspects of such Tax Contests and may coordinate discussions with the relevant
Taxing Authority with respect thereto. 
 (e) Any out-of-pocket costs incurred in handling, settling or contesting a Tax Contest shall be
borne ratably by the parties based on their ultimate liability under this Agreement for the Taxes to which the Tax Contest relates; provided, however, that (I) if Embarq contests a settlement made by Sprint Nextel as provided in
clause (ii) of paragraph (a), Sprint Nextel shall bear the costs relating to Embarq’s contest of such settlement unless Sprint Nextel substantially prevails in such contest and (II) if Sprint Nextel contests a settlement made by Embarq as
provided in clause (iii)(y) of paragraph (c), Embarq shall bear the costs related to Sprint Nextel’s contest of such settlement unless Embarq substantially prevails in such contest. 
 SECTION 5.03 Indemnification Payments. (a) An Indemnitee shall be entitled to make a claim for payment pursuant to this Agreement when the
Indemnitee determines that it is entitled to such payment and the amount of such payment (including, for the avoidance of doubt, the finalization of a Return before filing). The Indemnitee shall provide to the Indemnifying Party notice of such claim
within 10 days of the date on which it first so becomes entitled to claim such payment, including a description of such claim and a detailed calculation of the amount of the indemnification payment that is claimed, provided, however,
that no delay on the part of the Indemnitee in notifying the Indemnitor shall relieve the Indemnitor from any obligation hereunder unless (and then solely to the extent) the Indemnitor is actually and materially prejudiced thereby. Except as
provided in paragraph (b), the Indemnifying Party shall make the claimed payment to the Indemnitee within 10 days after receiving such notice, unless the Indemnifying Party reasonably disputes its liability for, or the amount of, such payment.

 (b) If the Indemnitee will be obligated to make the payment described in paragraph (a) to a Taxing Authority or other third party
(including expenses reimbursable under this Agreement), the Indemnifying Party shall not be obligated to pay the Indemnitee more than 5 days before the Indemnitee incurs such expense or makes such payment. If the Indemnitee’s claim for payment
arises from a payment that the Indemnifying Party will receive from a third party, such as a Refund, the Indemnifying Party shall not be obligated to pay the Indemnitee until 5 days after the Indemnifying Party receives such payment. 
 (c) In the case of a claim under Article II where no payment will be made to or received from a Taxing Authority, paragraph (b) shall be applied to
the payments that would be made to or from a Taxing Authority if the Embarq Group was treated, pursuant to the principles set forth on Exhibit A, as a standalone group for all taxable periods. 
  

 15 

 SECTION 5.04 Interest on Late Payments. Interest shall accrue with respect to any indemnification
payment (including any disputed payment that is ultimately required to be made), not made within the period for payment, at seven percent per annum compounded quarterly. 
 SECTION 5.05 Treatment of Payments. The amount of all indemnification obligations under this Agreement shall be decreased to take into account the Tax benefits to the Indemnitee of the deductibility of any
indemnified item (whether or not any tax benefit is actually received for a deductible item and assuming the highest applicable taxable rate) and shall be increased where necessary so that, after all the required deductions (whether or not any tax
benefit is actually received for a deductible item and assuming the highest applicable taxable rate) have been made and Taxes imposed, the Indemnitee receives the amount it would have been entitled to receive under this Agreement in the absence of
such deductions and Taxes. Any payments made to one party by another party pursuant to this Agreement shall be treated by the parties for all Tax purposes as a distribution by, or capital contribution to, Embarq, as the case may be, made immediately
prior to the Distribution, except to the extent otherwise required by a Final Determination. 
 SECTION 5.06 Expenses. Except as
otherwise provided herein, each party and its Affiliates shall bear their own expenses incurred in connection with preparation of Tax Returns, Tax Contests, and other matters under this Agreement. 
 SECTION 5.07 Cooperation. Each member of the Sprint Nextel Group and the Embarq Group shall cooperate fully with all reasonable requests from the
other party in connection with the preparation and filing of Tax Returns and Adjustment Requests, Tax Contests and other matters covered by this Agreement. 
 (a) Such cooperation shall include: 
 (i) the retention until the expiration of the
applicable statute of limitations, and the provision upon request, of Tax Returns, books, records (including information regarding ownership and Tax basis of property), documentation and other information relating to the Tax Returns, including
accompanying schedules, related workpapers, and documents relating to rulings or other determinations by Taxing Authorities; 
 (ii) the execution of any document that may be necessary or reasonably helpful in connection with any Tax Contest, the filing of a Tax Return or Adjustment Request by a member of the Sprint Nextel Group or the Embarq Group, obtaining a tax
opinion or private letter ruling (except as otherwise provided in Section 4.02(d)), or other matters covered by this Agreement, including certification (provided in such form as may be required by applicable 
  

 16 

 law or reasonably requested and made to the best of a party’s knowledge) of the accuracy and
completeness of the information it has supplied; 
 (iii) the use of the parties’ reasonable best efforts to obtain any
documentation that may be necessary or reasonably helpful in connection with any of the foregoing; 
 (iv) the use of the
parties’ reasonable best efforts to make the applicable party’s current or former directors, officers, employees, agents and facilities available on a reasonable and mutually convenient basis in connection with the foregoing matters; and

 (v) making determinations with respect to actions described in Section 4.02(c) as promptly as practicable including,
without limitation, making determinations within 10 days with respect to modifications and amendments of employee stock purchase agreements or equity compensation plans under Section 4.02 (b)(i)(x). 
 (b) If a party fails to comply with any of its obligations set forth in this Section 5.07 upon reasonable request and notice by the other party, and
such failure results in the imposition of additional Taxes, the nonperforming party shall be liable in full for such additional Taxes. 
 SECTION 5.08 Confidentiality. Any information or documents provided under this Agreement shall be kept confidential by the recipient-party, except as may otherwise be necessary in connection with the filing of Tax Returns or with any
Tax Contest. In addition, if Sprint Nextel or Embarq determines that providing such information could be commercially detrimental, violate any law or agreement or waive any privilege, the parties shall use reasonable best efforts to permit
compliance with the obligations under this Agreement in a manner that avoids any such harm or consequence. 
 SECTION 5.09 Retention of
Tax Records. Embarq may request from Sprint Nextel and retain copies of (i) with respect to any Joint Return, all pro forma federal and state Tax Returns, supporting schedules and workpapers related to members of the Embarq Group, and (ii) any
Separate Returns for any Embarq Group members, including supporting schedules and workpapers. If either Sprint Nextel or Embarq intends to dispose of documentation with respect to any Pre-Distribution Period, including books, records, Tax Returns
and all supporting schedules and information relating thereto (after the expiration of the applicable statute of limitations), of any member of the other Group, or in the case of the Embarq Group any member included in a Joint Return, they shall
provide written notice to the other party describing the documentation to be disposed of 30 days prior to taking such action. The other party may arrange to take delivery of the documentation described in the notice at its own expense during the
succeeding 30 day period. 
  

 17 

 ARTICLE VI 
 Resolution of Disputes 
 SECTION 6.01 Tax Disputes. The parties will endeavor, and will cause
their respective Affiliates to endeavor, to resolve in an amicable manner all disputes arising in connection with this Agreement. The parties shall negotiate in good faith to resolve any Tax Dispute for not less than 45 days. Upon written notice of
either party after 45 days, the matter will be referred to a Tax Advisor acceptable to both parties. The Tax Advisor may, in its discretion, obtain the services of any third-party necessary to assist it in resolving the dispute. The Tax Advisor
shall furnish written notice to the Companies of its resolution of the dispute as soon as practicable, but in any event no later than 45 days after its acceptance of the matter for resolution. Any such resolution by the Tax Advisor will be binding
on the parties and the parties shall take, or cause to be taken, any action necessary to implement the resolution. All fees and expenses of the Tax Advisor shall be shared equally by Sprint Nextel, on the one hand, and Embarq, on the other hand. If,
having determined that the dispute must be referred to a Tax Advisor, after 45 days the parties are unable to find a Tax Advisor willing to adjudicate the dispute in question and whom the parties in good faith find acceptable, then the dispute will
be submitted for arbitration to the American Arbitrators Association, provided, however, that only an arbitrator that qualifies as a Tax Advisor shall be selected. 
 SECTION 6.02 High-Level Disputes. Any High-Level Dispute shall be resolved pursuant to the arbitration procedures set forth in Article VII of the Separation and Distribution Agreement, provided,
however, that only an arbitrator that qualifies as a Tax Advisor shall be selected to resolve a High-Level Dispute. 
 ARTICLE VII

 Miscellaneous Provisions 
 SECTION 7.01 Disposition of Embarq Subsidiaries. In the event that Embarq disposes of the stock of a subsidiary that is not a party to this Agreement (i) without receiving compensation equal to the fair market value of such
subsidiary, prior to the disposition, such subsidiary shall deliver to Sprint Nextel an executed agreement, in a form reasonably acceptable to Sprint Nextel, agreeing to be bound by this Agreement as if it had been an original party hereto or (ii)
in an exchange intended to result in the receipt of compensation equal to the fair market value of such subsidiary, prior to the disposition, such subsidiary shall deliver to Sprint Nextel an executed agreement, in a form reasonably acceptable to
Sprint Nextel, agreeing to be bound by Sections 5.07, 5.08, 5.09 and Article VII of this Agreement as if it had been an original party hereto. 
 SECTION 7.02 Notice. Any payment, notice or communication required or permitted to be given under this Agreement shall be in writing (including facsimile) and mailed, faxed or delivered to the parties at the following addresses (or
at such other address as one party may specify by notice to the other party): 
  

			
	If to Sprint Nextel:	 	with a copy to:
		
	Sprint Nextel Corporation	 	Sprint Nextel Corporation
		
	Attention:	 	Attention:
	Facsimile:	 	Facsimile:
		
	If to Embarq:	 	with a copy to:
		
	Embarq	 	Embarq
		
	Attention: Director, Taxes	 	Attention: Chief Financial Officer
	Facsimile:	 	Facsimile:

  

 18 

 Notification of a change of address shall be given by either party to the other as provided in this
Section 7.02. All such notices and communications shall be effective (i) when received, if mailed or delivered, or (ii) when confirmed by fax answerback, if faxed. 
 SECTION 7.03 Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of
this Agreement will remain in full force, as long as the essential terms and conditions of this Agreement for each party remain valid, binding and enforceable. 
 SECTION 7.04 Integration; Amendments. Except as explicitly stated herein, this Agreement embodies the entire understanding between the parties relating to its subject matter and supersedes and terminates all
prior agreements and understandings among the parties with respect to such matters. No promises, covenants or representations of any kind, other than those expressly stated herein, have been made to induce any party to enter into this Agreement.
This Agreement shall not be modified or terminated except by a writing duly signed by each of the parties hereto, and no waiver of any provisions of this Agreement shall be effective unless in a writing duly signed by the party sought to be bound.
If, and to the extent, the provisions of this Agreement conflict with the Separation and Distribution Agreement, or any Ancillary Agreement, the provisions of this Agreement shall control. 
 SECTION 7.05 Construction. The language of this Agreement shall be construed according to its fair meaning and shall not be strictly construed for
or against any party. Notwithstanding the foregoing, the purposes of Article IV are to ensure the Tax-Free Status and, accordingly, the parties agree that the language thereof shall be interpreted in a manner that serves this purpose to the greatest
extent possible. Headings of sections in this Agreement are inserted for convenience only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. 
 SECTION 7.06 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same. 
  

 19 

 SECTION 7.07 Governing Law. This Agreement shall be governed by the laws applicable to contracts
entered into and to be performed within the State of Delaware by residents thereof. 
 SECTION 7.08 Jurisdiction. Each party agrees to
submit exclusively to the personal jurisdiction of any Delaware court in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement and agrees that it will not attempt to deny or defeat such personal
jurisdiction or venue by motion or other request for leave from any such Delaware court. Each party further agrees that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth
above shall be effective service of process for any action, suit or proceeding in Delaware with respect to any matters to which it has submitted to jurisdiction in this Section 7.08. 
 SECTION 7.09 Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury
in respect of any dispute arising out of this Agreement. 
 SECTION 7.10 Successors and Assigns. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties without the prior written consent of the other party; provided, however, that no such consent shall
be required in the event of a merger, consolidation or sale of either Sprint Nextel or Embarq. Subject to the preceding sentence, this Agreement shall be binding on, and shall inure to the benefit of, and be enforceable by, the parties hereto and
their respective successors and assigns. 
 SECTION 7.11 Injunctions. The parties acknowledge that irreparable damage would occur to
Sprint Nextel in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached. The parties agree that Sprint Nextel shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court having jurisdiction, such remedy being in addition to any other remedy to which it may be entitled at law or in equity.
Nothing in this Agreement (including Article VI) will prevent any party from seeking injunctive relief as it deems necessary or appropriate. 
 SECTION 7.12 Survival. Except with respect to Sections 5.07, 5.08 and 5.09 which shall remain in effect without limitation as to time, the provisions in this Agreement shall be unconditional and absolute and shall remain in effect
until the expiration of the statute of limitations for all taxable periods that end before or include December 31 of the calendar year in which the Distribution occurs and the resolution of all disputes under this Agreement that arose during such
periods. 
 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the respective officers as of the date set forth
above. 
  

 20 

 Exhibit A 
 Key Principles of Tax Sharing/Billing Arrangements For Entities Now Comprising the 
 Embarq Group 

Federal Income Taxes: 
  

	•	 	The amount of tax on income or loss will be computed at the highest statutory federal income tax rate in effect during the period to which the tax relates. For purposes of the
calculations described below, loss entities will be treated as producing negative taxable income and the calculations will be done by aggregating all of the entities comprising the Embarq Group. References in this Exhibit A to the Embarq
Group’s “income tax liability” or “taxable income” shall refer to a positive number or a negative number and shall be computed in order to determine whether either (x) Embarq shall be liable for and shall indemnify the
Sprint Nextel Group pursuant to Section 2.01(a), or (y) Sprint Nextel shall be liable for and shall indemnify the Embarq Group pursuant to Section 2.01(b). 

  

	•	 	With respect to tax years ending on or before December 31, 2004, any adjustments to the Embarq Group’s income tax liability will be calculated as if the Embarq Group filed
a standalone federal income tax return (without regard to loss or credit carryovers or carrybacks to the year in question). Embarq will pay Sprint Nextel the amount of tax attributable to adjustments that increase the taxable income of the Embarq
Group. Sprint Nextel will pay Embarq the reduction in tax attributable to adjustments that decrease the taxable income of the Embarq Group. 

  

	•	 	With respect to tax years beginning on or after January 1, 2005 and ending on or before December 31, 2005: 

  

	 	•	 	The Embarq Group’s income tax liability will be calculated as of the tax return filing date as if the Embarq Group filed a standalone federal income tax return (without regard
to loss or credit carryovers or carrybacks to the year in question). To the extent there is a difference between the amount of tax for the Embarq Group so calculated and the amount of tax for the Embarq Group depicted on Schedule 2, Embarq will pay
Sprint Nextel the amount of any increased tax liability and Sprint Nextel will pay Embarq the amount of any reduced tax liability. 

  

	 	•	 	Any other adjustments to the Embarq Group’s income tax liability will be calculated as if the Embarq Group filed a standalone federal income tax return (without regard to loss
or credit carryovers or carrybacks to the year in question). Embarq will pay Sprint Nextel the amount of tax attributable to adjustments that increase the taxable income of the Embarq Group. Sprint Nextel will pay Embarq the reduction in tax
attributable to adjustments that decrease the taxable income of the Embarq Group. 

  

	•	 	With respect to tax years beginning on or after January 1, 2006: 

  

	 	•	 	The Embarq Group’s income tax liability for the period through the Distribution Date will be calculated as of the Distribution Date as if the Embarq Group filed a standalone
federal income tax return (without regard to loss or credit carryovers or carrybacks to the year in question). 

  

 1 

	 	 	Sprint Nextel and Embarq will cooperate and work together to determine the income tax liability of the Embarq Group as of the Distribution Date and such liability, as so determined,
will be reflected on Schedule 3 no later than 60 days after the Distribution Date. All federal income tax liabilities will be eliminated as of the Distribution Date and the amounts depicted on Schedule 3 will be treated as paid for purposes of
future adjustments. 

  

	 	•	 	The Embarq Group’s income tax liability for the period prior to the Distribution Date will be calculated as of the tax return filing date as if the Embarq Group filed a
standalone federal income tax return (without regard to loss or credit carryovers or carrybacks to the year in question). To the extent there is a difference between the amount of tax for the Embarq Group so calculated and the amount of tax for the
Embarq Group calculated as of the Distribution Date as depicted on Schedule 3, Embarq will pay Sprint Nextel the amount of any increased tax liability and Sprint Nextel will pay Embarq the amount of any reduced tax liability.

  

	 	•	 	Any other adjustments to the Embarq Group’s income tax liability will be calculated as if the Embarq Group filed a standalone federal income tax return (without regard to loss
or credit carryovers or carrybacks to the year in question). Embarq will pay Sprint Nextel the amount of tax attributable to adjustments that increase the taxable income of the Embarq Group. Sprint Nextel will pay Embarq the reduction in tax
attributable to adjustments that decrease the taxable income of the Embarq Group. 

  

	 	•	 	Any taxes attributable to deferred intercompany gains that are triggered as a result of the Transactions shall be the responsibility of Sprint Nextel and shall not be included in
Schedule 3 or in determining the Embarq Group’s income tax liability. To the extent there are adjustments to the amount of any deferred intercompany gain triggered as a result of the Distribution, Sprint Nextel shall be responsible for paying
the additional tax associated with any increase in the amount of gain and shall also be entitled to a refund of tax attributable to any reduction of gain. 

  

	 	•	 	Notwithstanding anything herein to the contrary, this paragraph shall control with respect to the treatment of the LEC Notes. “LEC Notes” means notes owed by members of
the Embarq Group to members of the Sprint Nextel Group on April 3, 2006. The preceding bullet points of this section shall not apply to the LEC Notes, and Schedule 3 shall not take into account any tax liability or benefit attributable to the
actual or deemed payment of the LEC Notes. If the LEC Notes are eliminated prior to the Distribution, any tax items attributable to the elimination of the LEC Notes shall be treated as tax items of the Sprint Nextel Group and not the Embarq Group
for all purposes of this Agreement. To the extent the LEC Notes remain outstanding as of the Distribution, Embarq will indemnify Sprint Nextel for the tax attributable to any increase in the consolidated taxable income of the Sprint Nextel
consolidated group in the Pre-Distribution Period attributable to the LEC Notes and arising from the transactions related to the Distribution. 

  

 2 

	•	 	To the extent the Embarq Group is allocated any Tax Attributes from Pre-Distribution Periods that carry over to tax periods after the Distribution Date, Embarq will pay Sprint
Nextel for such Tax Attributes when the Tax Attributes are used by the Embarq Group to reduce its tax liability. With respect to Tax Attributes that reduce the taxable income of the Embarq Group, Embarq will pay Sprint Nextel the amount of the Tax
Attribute used by the Embarq Group multiplied by the highest statutory federal income tax rate in effect at the time of such use. With respect to Tax Attributes that are directly credited against the amount of tax owed by the Embarq Group to a
Taxing Authority, Embarq will pay Sprint Nextel the amount of the credit so used. To the extent the Tax Attributes that carry over to Embarq Group tax periods after the Distribution Date are subsequently increased for any reason, Embarq will pay
Sprint Nextel for the benefit of any such increase in a manner consistent with this provision. To the extent the Tax Attributes that carry over to Embarq Group tax periods after the Distribution Date are subsequently decreased for any reason, and
Embarq has previously paid Sprint Nextel for the use of such Tax Attributes, Sprint Nextel shall refund to Embarq the excess of the amounts previously received by Sprint Nextel for such Tax Attributes over the amount Sprint Nextel should have
received based on the amount of the reduced Tax Attributes. 

  

	•	 	With respect to any increase to tax liabilities of the Embarq Group, Embarq will pay Sprint Nextel interest on such additional tax liabilities to the extent the additional Embarq
Group tax liabilities increase the amount of interest owed by Sprint Nextel to the Taxing Authority or reduce the amount of interest that Sprint Nextel is entitled to receive from the Taxing Authority when compared to the amount of interest that
would have been owed to or received from the Taxing Authority in the absence of such additional Embarq Group tax liabilities. With respect to any decrease to tax liabilities of the Embarq Group, Sprint Nextel will pay Embarq interest on such
reduction to the extent the reduction increases the amount of interest received from the Taxing Authority or reduces the amount of interest that Sprint Nextel owes the Taxing Authority when compared to the amount of interest that would have been
received from or owed to the Taxing Authority in the absence of such reduction to the Embarq Group tax liabilities. 

 State and Local Taxes Based on Income: 
  

	•	 	Each legal entity is responsible for payment of its own tax liabilities, and receives all tax refunds, for taxes based on income, for a state or political subdivision in which it
files a return on a separate company basis. Any such tax liabilities existing or accrued as of the Distribution Date will not be settled, paid or contributed by Sprint Nextel prior to the Distribution Date, and Embarq will have sole responsibility
for satisfying such liabilities. 

  

	•	 	With respect to tax years ending on or before December 31, 2004, any adjustments to the Embarq Group’s income tax liability for a state in which it is part of a
consolidated, combined or unitary return will be calculated as follows: 

  

	 	•	 	Embarq will pay Sprint Nextel the amount of tax attributable to adjustments in taxable income or apportionment that increase the income tax liability of the Embarq Group. Sprint
Nextel will pay Embarq the 

  

 3 

 amount of tax attributable to adjustments in taxable income or apportionment that decrease the income
tax liability of the Embarq Group. 
  

	 	•	 	The amount of tax payable by Embarq to Sprint Nextel, or by Sprint Nextel to Embarq, will be calculated as follows: (A) the product of (i) the adjusted taxable income
attributable to the Embarq Group, (ii) the last determined combined or consolidated apportionment factor for the relevant jurisdiction subject to the COP Adjustment described below, and (iii) the highest applicable state statutory rate in
effect during the tax period to which the adjustment relates, MINUS (B) the product of (i) the originally determined taxable income of the Embarq Group as reported on the originally filed tax return, or, if different, as last determined
prior to the Distribution Date, (ii) the apportionment factor for the relevant jurisdiction as reported on the originally filed tax return, or, if different, as last determined prior to the Distribution Date, subject to the COP Adjustment
described below, and (iii) the highest applicable state statutory rate in effect during the tax period to which the adjustment relates. 

  

	 	•	 	To the extent the result of the foregoing calculation is a positive number, Embarq will owe Sprint Nextel such amount. To the extent the result of the foregoing calculation is a
negative number, Sprint Nextel will owe Embarq such amount. 

  

	 	•	 	To the extent adjustments are made to a tax return on more than one occasion, the calculations described above will take into account the prior adjustments to the extent the parties
have previously paid the taxes attributable to such adjustments in accordance with this Exhibit A. 

  

	•	 	With respect to tax years beginning on or after January 1, 2005 and ending on or before December 31, 2005: 

  

	 	•	 	As of the tax return filing date, the Embarq Group’s income tax liability for a state in which it is part of a consolidated, combined or unitary return will be calculated as
follows: 

  

	 	•	 	The taxable income of the Embarq Group that is included in such return shall be multiplied by (i) the combined or consolidated apportionment factor for the relevant
jurisdiction as reported on such return subject to the COP Adjustment described below, and (ii) the highest applicable state statutory tax rate in effect for the tax period. 

  

	 	•	 	The result of the preceding calculation applied to the Embarq Group will be compared to the estimated 2005 tax liability calculated for the Embarq Group in such jurisdiction as
depicted on Schedule 4. 

  

	 	•	 	To the extent the amount of tax calculated as of the tax return filing date exceeds the amount of tax depicted on Schedule 4, Embarq will pay Sprint Nextel the difference. To the
extent the amount of tax calculated as of the tax return filing date is less than the amount of tax depicted on Schedule 4, Sprint Nextel will pay Embarq the difference. 

  

 4 

	 	•	 	Any other adjustments to the Embarq Group’s income tax liability for a state in which it is part of a consolidated, combined or unitary return will be calculated as follows:

  

	 	•	 	Embarq will pay Sprint Nextel the amount of tax attributable to adjustments in taxable income or apportionment that increase the income tax liability of the Embarq Group. Sprint
Nextel will pay Embarq the amount of tax attributable to adjustments in taxable income or apportionment that decrease the income tax liability of the Embarq Group. 

  

	 	•	 	The amount of tax payable by Embarq to Sprint Nextel, or by Sprint Nextel to Embarq, will be calculated as follows: (A) the product of (i) the adjusted taxable income
attributable to the Embarq Group, (ii) the last determined combined or consolidated apportionment factor for the relevant jurisdiction subject to the COP Adjustment described below, and (iii) the highest applicable state statutory rate in
effect during the tax period to which the adjustment relates, MINUS (B) the product of (i) the originally determined taxable income of the Embarq Group as reported on the originally filed tax return, (ii) the combined or consolidated
apportionment factor for the relevant jurisdiction as reported on the originally filed tax return subject to the COP Adjustment described below, and (iii) the highest applicable state statutory rate in effect during the tax period to which the
adjustment relates. 

  

	 	•	 	To the extent the result of the foregoing calculation is a positive number, Embarq will owe Sprint Nextel such amount. To the extent the result of the foregoing calculation is a
negative number, Sprint Nextel will owe Embarq such amount. 

  

	 	•	 	To the extent adjustments are made to a tax return on more than one occasion, the calculations described above will take into account the prior adjustments to the extent the parties
have previously paid the taxes attributable to such adjustments in accordance with this Exhibit A. 

  

	•	 	With respect to tax years beginning on or after January 1, 2006: 

  

	 	•	 	The Embarq Group’s income tax liability for a state in which it is part of a consolidated, combined or unitary return for the period through the Distribution Date will be
calculated as of the Distribution Date based on the product of (i) the estimated taxable income for the Embarq Group through the Distribution Date, (ii) the estimated 2005 apportionment factor for the applicable jurisdiction on the
Distribution Date subject to the COP Adjustment described below, and (iii) the highest applicable state statutory rate for such jurisdiction in effect on the Distribution Date. Sprint Nextel and Embarq will cooperate and work together to
determine these income tax liabilities as of the Distribution Date for the Embarq Group, and such liabilities, as so determined, will be reflected on Schedule 5 no later than 60 days after the Distribution Date. All such consolidated, combined or
unitary state tax liabilities will be eliminated as of the Distribution Date and the amounts depicted on Schedule 5 will be treated as paid for purposes of future adjustments. 

  

 5 

	 	•	 	As of the tax return filing date, the Embarq Group’s income tax liability for a state in which it is part of a consolidated, combined or unitary return will be calculated as
follows: 

  

	 	•	 	The taxable income of the Embarq Group that is included in such return shall be multiplied by (i) the last determined combined or consolidated apportionment factor for the
relevant jurisdiction for the 2005 tax year subject to the COP Adjustment described below, and (ii) the highest applicable state statutory tax rate in effect for the tax period. 

  

	 	•	 	The result of the preceding calculation applied to the Embarq Group will be compared to the estimated tax liability calculated for the Embarq Group in such jurisdiction as of the
Distribution Date as depicted on Schedule 5. 

  

	 	•	 	To the extent the amount of tax calculated as of the tax return filing date exceeds the amount of tax depicted on Schedule 5, Embarq will pay Sprint Nextel the difference. To the
extent the amount of tax calculated as of the tax return filing date is less than the amount of tax depicted on Schedule 5, Sprint Nextel will pay Embarq the difference. 

  

	 	•	 	Any other adjustments to the Embarq Group’s income tax liability for a state in which it is part of a consolidated, combined or unitary return will be calculated as follows:

  

	 	•	 	Embarq will pay Sprint Nextel the amount of tax attributable to adjustments in taxable income or apportionment that increase the income tax liability of the Embarq Group. Sprint
Nextel will pay Embarq the amount of tax attributable to adjustments in taxable income or apportionment that decrease the income tax liability of the Embarq Group. 

  

	 	•	 	The amount of tax payable by Embarq to Sprint Nextel, or by Sprint Nextel to Embarq, will be calculated as follows: (A) the product of (i) the adjusted taxable income
attributable to the Embarq Group, (ii) the last determined combined or consolidated apportionment factor for the relevant jurisdiction for the 2005 tax year subject to the COP Adjustment described below, and (iii) the highest applicable
state statutory rate in effect during the period to which the adjustment relates, MINUS (B) the product of (i) the originally determined taxable income of the Embarq Group as reported on the originally filed tax return, (ii) the
combined or consolidated apportionment factor for the relevant jurisdiction for the 2005 tax year as used at the time of the 2006 tax return filing date subject to the COP Adjustment described below, and (iii) the highest applicable state
statutory rate in effect during the tax period to which the adjustment relates. 

  

 6 

	 	•	 	To the extent the result of the foregoing calculation is a positive number, Embarq will owe Sprint Nextel such amount. To the extent the result of the foregoing calculation is a
negative number, Sprint Nextel will owe Embarq such amount. 

  

	 	•	 	To the extent adjustments are made to a tax return on more than one occasion, the calculations described above will take into account the prior adjustments to the extent the parties
have previously paid the taxes attributable to such adjustments in accordance with this Exhibit A. 

  

	•	 	When determining the appropriate apportionment factor to utilize in all of the above calculations, the apportionment factors shall be adjusted to remove the impact of the
utilization of the cost of performance method to source the receipts of Sprint Communications Company L.P. in the applicable consolidated, combined or unitary returns (the “COP Adjustment”). 

  

	•	 	Any taxes attributable to deferred intercompany gains that are triggered as a result of the Transactions shall be the responsibility of Sprint Nextel and shall not be included in
Schedule 5 or in determining the Embarq Group’s income tax liability. To the extent there are adjustments to the amount of any deferred intercompany gain triggered as a result of the Distribution, Sprint Nextel shall be responsible for paying
the additional tax associated with any increase in the amount of gain and shall also be entitled to a refund of tax attributable to any reduction of gain. 

  

	•	 	Notwithstanding anything herein to the contrary, this paragraph shall control with respect to the treatment of the LEC Notes. “LEC Notes” means notes owed by members of
the Embarq Group to members of the Sprint Nextel Group on April 3, 2006. The preceding bullet points of this section shall not apply to the LEC Notes, and Schedule 5 shall not take into account any tax liability or benefit attributable to the
actual or deemed payment of the LEC Notes. If the LEC Notes are eliminated prior to the Distribution, any tax items attributable to the elimination of the LEC Notes on any consolidated, combined or unitary tax return shall be treated as tax items of
the Sprint Nextel Group and not the Embarq Group for all purposes of this Agreement. To the extent the LEC Notes remain outstanding as of the Distribution, Embarq will indemnify Sprint Nextel for the tax attributable to any increase in the aggregate
taxable income in the Pre-Distribution Period attributable to the LEC Notes and arising from the transactions related to the Distribution in any state consolidated, combined or unitary tax return. 

  

	•	 	To the extent the Embarq Group is allocated any state Tax Attributes from Pre-Distribution Periods that carry over to tax periods after the Distribution Date, Embarq will be
entitled to use such state Tax Attributes and will not be required to pay Sprint Nextel for such use. These attributes will be determined by Sprint Nextel using the applicable state statutes and regulations as guidelines to calculate the amount of
state Tax Attributes to be allocated to the Embarq Group. Notwithstanding the foregoing, to the extent the amount of Tax Attributes allocated to the Embarq Group is increased as a result of reductions to the taxable income of the Embarq Group,
Sprint Nextel shall not be required to pay Embarq for such reductions to taxable income under the paragraphs above to the extent of the value of such increased Tax Attributes. 

  

 7 

	•	 	With respect to any increase to tax liabilities of the Embarq Group, Embarq will pay Sprint Nextel interest on such additional tax liabilities to the extent the additional Embarq
Group tax liabilities increase the amount of interest owed by Sprint Nextel to the Taxing Authority or reduce the amount of interest that Sprint Nextel is entitled to receive from the Taxing Authority when compared to the amount of interest that
would have been owed to or received from the Taxing Authority in the absence of such additional Embarq Group tax liabilities. With respect to any decrease to tax liabilities of the Embarq Group, Sprint Nextel will pay Embarq interest on such
reduction to the extent the reduction increases the amount of interest received from the Taxing Authority or reduces the amount of interest that Sprint Nextel owes the Taxing Authority when compared to the amount of interest that would have been
received from or owed to the Taxing Authority in the absence of such reduction to the Embarq Group tax liabilities. 

 Franchise Taxes:

  

	•	 	Each legal entity is responsible for any franchise, capital stock or other similar capital or net worth based taxes attributable to its business. Any such tax liabilities
attributable to the Embarq Group that are existing or accrued as of the Distribution Date will not be settled, paid or contributed by Sprint Nextel prior to the Distribution Date, and Embarq will have sole responsibility for satisfying such
liabilities. 

 Transfer Taxes: 
  

	•	 	Except as provided in Section 2.03 of the Agreement, each legal entity is responsible for any transfer taxes attributable to its business operations, including, but not limited
to, any stamp, sales, use, gross receipts, value-added or other transfer taxes or tax-like fees. Any unpaid transfer tax liabilities attributable to the business operations of a Sprint Nextel entity that have been transferred to an Embarq entity as
part of the Transactions (e.g., the long distance customers transferred to Embarq entities), and which relate to periods prior to the transfer of such operations, shall remain the liability of Sprint Nextel. Any tax liabilities attributable to the
historical business operations of Embarq existing or accrued as of the Distribution Date will not be settled, paid or contributed by Sprint Nextel prior to the Distribution Date, and Embarq will have sole responsibility for satisfying such
liabilities. 

  

	•	 	With respect to Refund claims pending on the Distribution Date involving any sales, use, gross receipts or other similar taxes, (x) in the case of a Refund received by Sprint
Nextel and payable to Embarq pursuant to the terms hereof, the amount of such payment shall be net of all contingent fee expenses paid by Sprint Nextel and related to such Refund, or (y) in the event that Embarq receives a Refund directly from
the relevant Taxing Authority, it shall reimburse Sprint Nextel for all contingent fee expenses paid by Sprint Nextel with respect to such Refund. For the avoidance of doubt, Embarq shall not be liable for any contingent fee expenses related to
Refunds received prior to the Distribution Date. 

  

 8 

 Property Taxes: 
  

	•	 	Each legal entity is responsible for all real and personal property taxes relating to the property that it owns for the periods in which it owns the property (e.g., if property is
transferred between legal entities, the transferor is responsible for the pro-rata portion of the total property tax calculated from January 1 through the transfer date; the transferee is responsible for the pro rata portion of the property
taxes after the transfer date). Any such tax liabilities attributable to the Embarq Group that are existing or accrued as of the Distribution Date will not be settled, paid or contributed by Sprint Nextel prior to the Distribution Date, and Embarq
will have sole responsibility for satisfying such liabilities. 

 Payroll Taxes: 
  

	•	 	Each legal entity is responsible for all withholding and other employment related taxes with respect to the people it employs. To the extent an employee moves from one employer to
another, the “old” employer is liable for all employment related taxes attributable to pre-transfer periods and the “new” employer is liable for all employment related taxes attributable to post-transfer periods. Any such tax
liabilities attributable to the Embarq Group that are existing or accrued as of the Distribution Date will not be settled, paid or contributed by Sprint Nextel prior to the Distribution Date, and Embarq will have sole responsibility for satisfying
such liabilities. 

 All Taxes 
  

	•	 	Any item not dealt with in this Exhibit A will be dealt with in a manner consistent with the past practice of the parties, or in the absence of such practice, as the parties
may agree. Any disagreements by the parties shall be subject to the normal dispute resolution provisions of the Agreement. 

 Other

  

	•	 	Notwithstanding the rules above, Sprint Nextel shall be responsible for all tax deficiencies, and entitled to receive all tax refunds, attributable to any adjustment made with
respect to tax items of a member of the Embarq Group attributable to (x) adjustments made to the taxable income of a partnership in which an Embarq Group member was a partner and that was included in the assets distributed by Sprint in the 1996
distribution of certain wireless operations, or (y) Centel Directory Company or any subsidiary thereof. 

  

	•	 	To the extent the aggregate adjusted tax basis (“Tax Basis”) as of the Distribution Date of the Embarq Group assets identified on Schedule 6 (“Transferred
Assets”) as determined based on the originally filed 2006 Sprint Nextel consolidated federal income tax return is less than $316,000,000, Sprint Nextel will upon the filing of such 

  

 9 

	 	return pay to Embarq an amount equal to one half of the product of (a) 39% and (b) the difference of such Tax Basis and $316,000,000. To the extent such Tax Basis is
greater than $316,000,000, Embarq will pay to Sprint Nextel at such time an amount equal to one half the product of (a) 39% and (b) the difference of such Tax Basis and $316,000,000. If there is any subsequent redetermination of the Tax
Basis, then (in the case of a decrease) Sprint Nextel will pay to Embarq or (in the case of a increase) Embarq will pay to Sprint Nextel an amount equal to one half of the product of (a) 39% and (b) the amount of such adjustment to Tax
Basis. 

  

	•	 	Unless otherwise indicated, all defined terms shall have the meaning as defined in the Agreement. 

  

 10Form of Employee Matters Agreement

 EXHIBIT 10.4 
 FORM OF 
 EMPLOYEE MATTERS AGREEMENT 

 TABLE OF CONTENTS 
  

									
	 	 	 	  	 	 	 	  	Page
	SECTION 1 DEFINITIONS	  	1
				
		 	1.1	  	DEFINITIONS	  	1
		 	1.2	  	GENERAL INTERPRETIVE PRINCIPLES	  	9
		
	SECTION 2 GENERAL PRINCIPLES	  	9
				
		 	2.1	  	ASSUMPTION AND RETENTION OF LIABILITIES; RELATED ASSETS	  	9
		 		  	(a)	 	Sprint	  	9
		 		  	(b)	 	Embarq	  	10
		 		  	(c)	 	Reimbursements	  	10
		 	2.2	  	EMBARQ PARTICIPATION IN SPRINT BENEFIT PLANS	  	10
		 	2.3	  	COMPARABLE COMPENSATION AND BENEFITS	  	10
		 	2.4	  	SERVICE RECOGNITION	  	11
		 		  	(a)	 	Pre-Distribution Service Credit	  	11
		 		  	(b)	 	Post-Distribution Reciprocal Service Crediting	  	11
		 	2.5	  	APPROVAL BY SPRINT AS SOLE STOCKHOLDER; APPROVAL BY EMBARQ	  	12
		
	SECTION 3 SPRINT RETIREMENT PENSION PLAN	  	13
				
		 	3.1	  	ESTABLISHMENT OF EMBARQ RETIREMENT PENSION PLAN	  	13
		 	3.2	  	EMBARQ PLAN PARTICIPANTS	  	13
		 		  	(a)	 	Assumption of Sprint Retirement Pension Plan Liabilities	  	13
		 		  	(b)	 	Transfer of Sprint Retirement Pension Plan Assets	  	13
		 		  	(c)	 	Continuation of Elections	  	16
		 	3.3	  	DELAYED TRANSFER EMPLOYEES	  	16
		 		  	(a)	 	Assumption of Sprint Retirement Pension Plan Liabilities	  	16
		 		  	(b)	 	Transfer of Sprint Retirement Pension Plan Assets	  	16
		 		  	(c)	 	Continuation of Elections	  	17
		 	3.4	  	ALTERNATIVE PROCEDURES	  	17
		
	SECTION 4 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN	  	18
				
		 	4.1	  	ADOPTION OF EMBARQ SERP	  	18
		 	4.2	  	CONTINUATION OF ELECTIONS	  	18
		
	SECTION 5 KEY MANAGEMENT BENEFIT PLAN	  	18
				
		 	5.1	  	SPRINT KEY MANAGEMENT BENEFIT PLAN	  	18
		 	5.2	  	ASSUMPTION OF SPRINT KMBP LIABILITIES	  	18
		 	5.3	  	TRANSFER OF SPRINT KMBP ASSETS	  	19
		 	5.4	  	CONTINUATION OF ELECTIONS	  	19
		
	SECTION 6 401(k) PLANS	  	19
				
		 	6.1	  	EMBARQ 401(k) PLAN	  	19
		 		  	(a)	 	Establishment of the Embarq 401(k) Plan	  	19
		 		  	(b)	 	Transfer of Sprint 401(k) Plan Assets	  	20
		 		  	(c)	 	Continuation of Elections	  	20
		 	6.2	  	BARGAINING UNIT 401(k) PLANS	  	20
		 		  	(a)	 	Sprint Retirement Savings Plan for Bargaining Unit Employees	  	20

  

 i 

									
		 		  	(b)	 	Transfer of Bargaining Unit 401(k) Plan Assets	  	21
		 		  	(c)	 	Continuation of Elections	  	21
		
	SECTION 7 SPRINT RETAINED LIABILITIES AND EMPLOYMENT AGREEMENTS	  	21
				
		 	7.1	  	SPRINT EDCP	  	21
		 	7.2	  	OTHER SPRINT LIABILITIES	  	21
		 	7.3	  	EMPLOYMENT AGREEMENTS	  	21
			
		 	SECTION 8 RETIREE MEDICAL COVERAGE	  	22
			
		 	SECTION 9 HEALTH AND WELFARE PLANS	  	22
				
		 	9.1	  	ADOPTION OF HEALTH AND WELFARE PLANS	  	22
		 		  	(a)	 	Adoption of the Embarq Welfare Plans	  	22
		 		  	(b)	 	Terms of Participation in Embarq Welfare Plans	  	22
		 		  	(c)	 	Continuation of Elections	  	23
		 	9.2	  	LIABILITIES FOR CLAIMS	  	23
		 		  	(a)	 	Embarq Employees and Former Embarq Employees	  	23
		 		  	(b)	 	Delayed Transfer Employees	  	23
		 		  	(c)	 	Sprint Liabilities	  	24
		 		  	(d)	 	Cooperation	  	24
		
	SECTION 10 REIMBURSEMENT ACCOUNT PLANS	  	24
				
		 	10.1	  	PLANS	  	24
		 	10.2	  	CASH TRANSFERS	  	24
		
	SECTION 11 COBRA	  	25
				
		 	11.1	  	EMBARQ PARTICIPANTS	  	25
		 	11.2	  	DELAYED TRANSFER EMPLOYEES	  	25
		
	SECTION 12 SHORT TERM AND LONG TERM DISABILITY	  	25
		
	SECTION 13 WORKERS’ COMPENSATION	  	26
				
		 	13.1	  	TREATMENT OF WORKERS’ COMPENSATION CLAIMS	  	26
		 		  	(a)	 	Sprint WC Claims	  	26
		 		  	(b)	 	Embarq WC Claims	  	26
		 		  	(c)	 	When WC Claims Made	  	26
		 	13.2	  	COLLATERAL	  	26
		 	13.3	  	RETRO POLICY TRUE-UPS	  	26
		 	13.4	  	NOTIFICATION OF GOVERNMENTAL AUTHORITIES	  	26
		 	13.5	  	ASSIGNMENT OF CONTRIBUTION RIGHTS	  	27
		 	13.6	  	RESOLUTION OF DISPUTES	  	27
		
	SECTION 14 SEPARATION PLAN AND VOLUNTARY SEPARATION PLAN	  	27
				
		 	14.1	  	ESTABLISHMENT OF EMBARQ SEPARATION PLANS	  	27
		 	14.2	  	ASSUMPTION OF SEVERANCE LIABILITIES	  	27
		 	14.3	  	SEVERANCE BENEFITS	  	27
		 	14.4	  	EFFECT OF THE SEPARATION ON SEVERANCE	  	27
		
	SECTION 15 CASH RETENTION PLAN	  	28

  

 ii 

											
		 	SECTION 16 ANNUAL INCENTIVE PLANS	  	28
			
		 	SECTION 17 EQUITY INCENTIVE PLANS	  	29
					
		 		 	17.1	  	EQUITY INCENTIVE AWARDS	  	29
		 		 	17.2	  	TREATMENT OF OUTSTANDING SPRINT OPTIONS	  	29
		 		 		  	(a)	 	Sprint Employees	  	29
		 		 		  	(b)	 	Embarq Employees	  	29
		 		 		  	(c)	 	Delayed Transfer Employees	  	30
		 		 		  	(d)	 	409A	  	30
		 		 		  	(e)	 	Restriction on Exercisability of Options	  	30
		 		 	17.3	  	TREATMENT OF OUTSTANDING SPRINT RESTRICTED STOCK	  	31
		 		 	17.4	  	TREATMENT OF OUTSTANDING RESTRICTED STOCK UNITS	  	31
		 		 		  	(a)	 	General Rule	  	31
		 		 		  	(b)	 	Legacy Nextel Employee	  	31
		 		 		  	(c)	 	Specified Embarq Executive	  	31
		 		 	17.5	  	LIABILITIES FOR SETTLEMENT OF AWARDS	  	32
		 		 		  	(a)	 	Settlement of Outstanding Sprint Restricted Stock	  	32
		 		 		  	(b)	 	Settlement of Outstanding Embarq Restricted Stock	  	32
		 		 		  	(c)	 	Settlement of Outstanding Sprint RSUs	  	32
		 		 		  	(d)	 	Settlement of Outstanding Embarq RSUs	  	32
		 		 		  	(e)	 	Settlement of Sprint Options	  	32
		 		 		  	(f)	 	Settlement of Embarq Options	  	32
		 		 		  	(g)	 	Tax Responsibilities	  	32
		 		 	17.6	  	DETRIMENTAL CONDUCT PROVISIONS	  	32
		 		 	17.7	  	SEC REGISTRATION	  	33
		 		 	17.8	  	EMBARQ EMPLOYEES	  	33
			
		 	SECTION 18 OUTSTANDING FOUNDERS’ GRANTS	  	33
			
		 	SECTION 19 CAROLINA VEBA AND TEXAS TRUST	  	34
					
		 		 	19.1	  	CAROLINA VEBA	  	34
		 		 	19.2	  	TEXAS TRUST	  	34
			
		 	SECTION 20 PAID TIME OFF AND PAYROLL	  	34
					
		 		 	20.1	  	PAID TIME OFF	  	34
		 		 	20.2	  	PAYROLL	  	34
			
		 	SECTION 21 TAX AND ADMINISTRATIVE MATTERS	  	35
			
		 	SECTION 22 INDEMNIFICATION	  	35
			
		 	SECTION 23 GENERAL AND ADMINISTRATIVE	  	35
					
		 		 	23.1	  	SHARING OF INFORMATION	  	35
		 		 	23.2	  	TRANSFER OF PERSONNEL RECORDS AND AUTHORIZATIONS	  	35
		 		 	23.3	  	REASONABLE EFFORTS/COOPERATION	  	36
		 		 	23.4	  	EMPLOYER RIGHTS	  	36
		 		 	23.5	  	NO THIRD-PARTY BENEFICIARIES	  	36
		 		 	23.6	  	CONSENT OF THIRD PARTIES	  	36
		 		 	23.7	  	BENEFICIARY DESIGNATION/RELEASE OF INFORMATION/RIGHT TO REIMBURSEMENT	  	36
		 		 	23.8	  	NOT A CHANGE IN CONTROL	  	37
		 		 	23.9	  	NO NOVATION	  	37

  

 iii 

							
	SECTION 24 MISCELLANEOUS	  	37
				
	    24.1	  	EFFECT IF DISTRIBUTION DOES NOT OCCUR	 		  	37
	    24.2	  	RELATIONSHIP OF PARTIES	 		  	37
	    24.3	  	INDIRECT ACTION	 		  	37
	    24.4	  	NOTICES	 		  	37
	    24.5	  	ENTIRE AGREEMENT	 		  	38
	    24.6	  	AMENDMENTS AND WAIVERS	 		  	38
	    24.7	  	GOVERNING LAW	 		  	38
	    24.8	  	HEADINGS	 		  	38
	    24.9	  	COUNTERPARTS	 		  	38
	    24.10	  	ASSIGNMENT	 		  	38
	    24.11	  	SEVERABILITY	 		  	38
				
	 SCHEDULES
	  	 	 	 SECTION
	  	 
	Schedule A	  		 	Delayed Transfer Employee	  	
	Schedule B	  		 	Former Embarq Employee	  	
	Schedule C	  		 	Section 3.2(b)(i)	  	
	Schedule D	  		 	Section 5	  	
	Schedule E	  		 	Section 7.3	  	
	Schedule F	  		 	Section 9.1(a)	  	
	Schedule G	  		 	Section 13.1(b)	  	
	Schedule H	  		 	Section 15.1	  	
	Schedule I	  		 	Section 21	  	

  

 iv 

 May [    ], 2006 
 EMPLOYEE MATTERS AGREEMENT 
 This
Employee Matters Agreement (the “Agreement”), dated as of May     , 2006 is by and between Sprint Nextel Corporation, a Kansas corporation (“Sprint”), and Embarq Corporation, a Delaware
corporation (“Embarq”). 
 WHEREAS, the Board of Directors of Sprint has determined that it is in the best interests of
Sprint to separate the Embarq Business and the Sprint Business into two independent public companies on the terms and subject to the conditions set forth in the Separation and Distribution Agreement; 
 WHEREAS, in furtherance of the foregoing, Sprint has announced its intention to distribute all of the shares of Embarq Common Stock owned by Sprint to
the holders of Sprint Common Stock by means of the Distribution; 
 WHEREAS, in furtherance of the foregoing, Sprint and Embarq have entered
into a Separation and Distribution Agreement, dated as of                     , 2006, (the “Separation and Distribution
Agreement”), and other Ancillary Agreements that will govern certain matters relating to the Separation and the relationship among the Sprint Group and the Embarq Group prior to and following the Distribution; and 
 WHEREAS, pursuant to the Separation and Distribution Agreement, Sprint and Embarq have agreed to enter into this Agreement for the purpose of allocating
Assets, Liabilities and responsibilities with respect to certain employee compensation and benefit plans and programs between and among them. 
 NOW, THEREFORE, in consideration of the premises and of the respective agreements and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties, intending to be legally bound, agree as follows: 
 SECTION 1 
 DEFINITIONS 
 1.1 DEFINITIONS. Capitalized terms used, but not defined in this
Agreement, shall have the meanings assigned to such terms in the Separation and Distribution Agreement. The following terms shall have the following meanings: 
 “Actuary” means Watson Wyatt & Company or any other actuarial firm mutually agreed upon by Sprint and Embarq who will perform the calculations required by Section 3 of this Agreement.

 “Agreement” shall have the meaning set forth in the preamble to this Agreement. 
  

 1 

 “Bargaining Unit 401(k) Plans” means the Embarq Bargaining Unit 401(k) Plan and the Centel
Retirement Savings Plan for Bargaining Unit Employees. 
 “Bargaining Unit 401(k) Assets” shall have the meaning set forth in
Section 6.2(b) of this Agreement. 
 “Benefit Plan” means, with respect to an entity, each plan, program, arrangement,
agreement or commitment (whether written or unwritten, formal or informal) that is an employment, consulting, non-competition or deferred compensation agreement, or an executive compensation, incentive bonus or other bonus, employee pension, profit
sharing, savings, retirement, supplemental retirement, stock option, stock purchase, stock appreciation rights, restricted stock, other equity-based compensation, severance pay, salary continuation, life, health, hospitalization, sick leave,
vacation pay, disability or accident insurance plan, corporate-owned or key-man life insurance or other employee benefit plan, program, arrangement, agreement or commitment, (1) including any “employee benefit plan” (as defined in
Section 3(3) of ERISA), sponsored or maintained by such entity (or to which such entity contributes or is required to contribute or has any liabilities, directly or indirectly, contingent or fixed) and (2) excluding any Indemnification
Obligations. 
 “Centel Compensation Programs” means (i) the Centel Directors Retirement Plan, (ii) the Centel Augmented
Pension Plan, (iii) the Centel Defined Benefit Restoration Plan, (iv) the Centel Matched Deferred Salary Plan, (v) the Centel Directors Deferred Compensation Plan, (vi) the John P. Frazee Trust, (vii) the Wilson B. Garnet
Trust, (viii) the Robert C. Reuss Trust, and (ix) those certain contracts to provide retirement benefits to Walt Zurawski and Lincoln Perley. 
 “COBRA” means the continuation coverage requirements for “group health plans” under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as codified in Code
Section 4980B and Sections 601 through 608 of ERISA, and any similar purpose state group health plan continuation Law. 
 “Deferred
Share” means an award granted pursuant to Section 7 of the Nextel Equity Plan. 
 “Delayed 401(k) Assets” shall have the
meaning set forth in Section 6.1(b)(ii) of this Agreement. 
 “Delayed Price Ratio” means, with respect to a Delayed Transfer
Employee, the quotient obtained by dividing (i) the official NYSE only closing price for Embarq Common Stock on the last Trading Day on the NYSE immediately before such Delayed Transfer Employee’s Transfer Date by (ii) the official
NYSE only closing price for Sprint Common Stock on the last Trading Day on the NYSE immediately before such Delayed Transfer Employee’s Transfer Date. 
 “Delayed Share Ratio” means, with respect to a Delayed Transfer Employee, the quotient obtained by dividing (i) the official NYSE only closing price for Sprint Common Stock on the last trading day on
the NYSE immediately before such Delayed Transfer Employee’s Transfer Date by (ii) the official NYSE only closing price for Embarq Common Stock on the last Trading Day on the NYSE immediately before such Delayed Transfer Employee’s
Transfer Date. 
  

 2 

 “Delayed Transfer Calculation Date” shall have the meaning set forth in
Section 3.3(b)(i) of this Agreement. 
 “Delayed Transfer Employees” means those Sprint Employees named in
Schedule A (which Schedule A may be amended in writing by mutual agreement of the Parties at any time prior to the first anniversary of the Distribution Date), who are considered by the Parties to be important to the Embarq Business and whose
transfer from the Sprint Group to the Embarq Group in connection with the Separation will be delayed, due to certain business constraints, until after the Distribution Date but prior to the first anniversary of the Distribution Date (or such later
date as mutually agreed to by the Parties). 
 “Delayed Transfer Embarq Option” shall have the meaning set forth in
Section 17.2(c)(ii) of this Agreement. 
 “Detrimental Conduct Provisions” means the provisions set forth in
Section 14(f) of the Sprint 1997 Long-Term Incentive Program and any similar provision in any other Sprint Stock Plan or in the Embarq Equity Incentive Plan and any other provision incorporated in any award under the Sprint Stock Plans or the
Embarq Equity Incentive Plan (or in any agreement between any individual and Sprint or any member of the Sprint Group or Embarq or any member of the Embarq Group) which entitles Sprint or Embarq, as applicable, to terminate any award thereunder.

 “Embarq” shall have the meaning set forth in the Preamble to this Agreement. 
 “Embarq Bargaining Unit 401(k) Plan” shall have the meaning set forth in Section 6.2(a) of this Agreement. 
 “Embarq Benefit Plan” means any Benefit Plan sponsored, maintained or contributed to by any member of the Embarq Group including, without
limitation, the Embarq Retirement Pension Plan, the Embarq 401(k) Plan, the Bargaining Unit 401(k) Plans, the Embarq Reimbursement Account Plan, the Embarq SERP, the Embarq Separation Plans, the Embarq Retiree Medical Plan and the Embarq Welfare
Plans, and any Benefit Plan assumed or adopted by any member of the Embarq Group. 
 “Embarq Committee” means the compensation
committee of the Board of Directors of Embarq. 
 “Embarq Employee” means any individual who immediately before and immediately
after the Distribution Date is employed by Embarq or any member of the Embarq Group as a common law employee, including active employees and employees on vacation, approved leave of absence or serial severance. 
  

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 “Embarq Employee Stock Purchase Plan” means the Embarq Corporation Employee Stock Purchase
Plan. 
 “Embarq Equity Incentive Plan” means the Embarq Corporation 2006 Equity Incentive Plan. 
 “Embarq Fidelity Trust” means the trust which is part of the Embarq 401(k) Plan and the Bargaining Unit 401(k) Plans as effective as of the
Distribution Date. 
 “Embarq 401(k) Plan” shall have the meaning set forth in Section 6.1(a) of this Agreement. 

“Embarq 401(k) Assets” shall have the meaning set forth in Section 6.1(b)(i) of this Agreement. 
 “Embarq 401(k) Participants” shall have the meaning set forth in Section 6.1(a) of this Agreement. 
 “Embarq KMBP” shall have the meaning set forth in Section 5.1 of this Agreement. 
 “Embarq Master Trust” means the trust which is part of the Embarq Retirement Pension Plan. 
 “Embarq Option” shall have the meaning set forth in Section 17.2(b) of this Agreement. 
 “Embarq Participant” means any individual who, immediately following the Distribution Date, is an Embarq Employee, a Former Embarq Employee, or
a beneficiary, dependent or alternate payee of an Embarq Employee or Former Embarq Employee. 
 “Embarq Plan Participants” shall
have the meaning set forth in Section 3.1 of this Agreement. 
 “Embarq Price Ratio” means the quotient obtained by dividing
the Embarq Stock Value by the Sprint Pre-Distribution Stock Value. 
 “Embarq Reimbursement Account Plans” shall have the meaning
set forth in Section 10.1 of this Agreement. 
 “Embarq Retiree Medical Plan” shall have the meaning set forth in
Section 8 of this Agreement. 
 “Embarq Retiree Medical Plan Participants” shall have the meaning set forth in Section 8
of this Agreement. 
 “Embarq Retirement Pension Plan” shall have the meaning set forth in Section 3.1 of this Agreement.

  

 4 

 “Embarq Restricted Stock” means a grant of restricted stock made under the Embarq Equity
Incentive Stock Plan pursuant to Section 17.3 of this Agreement. 
 “Embarq RSU” means a grant of a restricted stock unit made
under the Embarq Equity Incentive Plan pursuant to Section 17.4 of this Agreement. 
 “Embarq Separation Plans” shall have the
meaning set forth in Section 14.1 of this Agreement. 
 “Embarq SERP” shall have the meaning set forth in Section 4.1 of
this Agreement. 
 “Embarq Service Plans” means, collectively, the Embarq Retirement Pension Plan, the Embarq 401(k) Plan, the
Bargaining Unit 401(k) Plans and the Embarq Separation Plans. 
 “Embarq Share Ratio” means the quotient obtained by dividing the
Sprint Pre-Distribution Stock Value by the Embarq Stock Value. 
 “Embarq Stock Value” means the official NYSE only closing price
for Embarq Common Stock trading “when issued” on the last Trading Day on the NYSE immediately before the Distribution Time. 
 “Embarq Welfare Plans” shall have the meaning set forth in Section 9.1(a) of this Agreement. 
 “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended. 
 “Estimated Retirement Pension Plan Transfer Amount” shall
have the meaning set forth in Section 3.2(b)(ii) of this Agreement. 
 “Final Delayed Transfer Amount” shall have the
meaning set forth in Section 3.3(b)(ii) of this Agreement. 
 “Final Delayed Transfer Date” shall have the meaning set
forth in Section 3.3(b)(iii) of this Agreement. 
 “Final Retirement Pension Plan Transfer Amount” shall have the meaning
set forth in Section 3.2(b)(v) of this Agreement. 
 “Final Transfer Date” shall have the meaning set forth in
Section 3.2(b)(vi) of this Agreement. 
 “Former Embarq Employee” means, as of the Distribution Date, any former employee
of Sprint or a Subsidiary of Sprint, including individuals to whom long-term disability benefits are being paid under a Sprint Benefit Plan and retired, deferred vested, non-vested and other terminated individuals, (i) whose most recent active
employment with Sprint or a Subsidiary of 
  

 5 

 Sprint was employment by the Embarq Group and whose active employment has ended on or before the Distribution Date or
(ii) whose most recent active employment was with Sprint United Management Company and whose active employment has ended before the Distribution Date and who is named in Schedule B to this Agreement. 
 “Former Sprint Employee” means, as of the Distribution Date, any former employee of Sprint or a Subsidiary of Sprint, including individuals to
whom long-term disability benefits are being paid under a Sprint Benefit Plan and retired, deferred vested, non-vested and other terminated individuals, other than a Former Embarq Employee. 
 “HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended. 
 “ITA Adjustment” shall have the meaning set forth in Section 3.2(b)(iv) of this Agreement. 
 “Indemnification Obligations” means, as of the Distribution Date, any Liabilities of Sprint or a Subsidiary of Sprint to indemnify any
employee, officer, director, or agent, or to advance to such person expenses before a judicial or administrative determination that such person is entitled to indemnification, such Liabilities being memorialized or otherwise provided for in a
separate agreement, Articles of Incorporation or Bylaws. 
 “Initial Cash Transfer” shall have the meaning set forth in
Section 3.2(b)(iii) of this Agreement. 
 “Initial Transfer Amount” shall have the meaning set forth in
Section 3.2(b)(iii) of this Agreement. 
 “Initial Transfer Date” shall have the meaning set forth in
Section 3.2(b)(iii) of this Agreement. 
 “IRS” means the Internal Revenue Service. 
 “KMBP Assets” shall have the meaning set forth in Section 5.3 of this Agreement. 
 “Legacy Nextel Employee” shall have the meaning set forth in Section 17.4(b) of this Agreement. 
 “Nextel Equity Plan” means the Nextel Communications, Inc. Amended and Restated Incentive Equity Plan. 
 “NYSE” means the New York Stock Exchange. 
 “Outstanding Founders’ Grants” means awards of Sprint RSUs granted on August 12, 2005 to all employees and outside directors under the Sprint 1997 Long-Term Incentive Program. 
  

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 “Participating Company” means Sprint or any Person (other than an individual) participating in
a Sprint Benefit Plan. 
 “Plan Assets” means the assets of the Sprint Retirement Pension Plan allocable to pay the benefits
accrued by Embarq Plan Participants as of the Distribution Date. 
 “Remaining Sprint Option” shall have the meaning set forth in
Section 17.2(a) of this Agreement. 
 “Separation and Distribution Agreement” shall have the meaning set forth in the recitals
to this Agreement. 
 “Specified Embarq Executive” shall have the meaning set forth in Section 17.4(c) of this Agreement.

 “Sprint” shall have the meaning set forth in the Preamble to this Agreement. 
 “Sprint EDCP” means the Sprint Executive Deferred Compensation Plan. 
 “Sprint 401(k) Plan” means the Sprint Nextel 401(k) Plan. 
 “Sprint Bargaining Unit 401(k) Plan” means the Sprint Retirement Savings Plan for Bargaining Unit Employees. 
 “Sprint Benefit Plan” means any Benefit Plan sponsored, maintained or contributed to by Sprint or any Subsidiaries of Sprint including, without limitation, the Sprint Retirement Pension Plan, the Sprint
401(k) Plan, the Sprint Bargaining Unit 401(k) Plan, the Sprint Reimbursement Account Plans, the Sprint EDCP, the Sprint SERP, the Sprint Separation Plans, the Sprint Retiree Medical Plan, and the Sprint Welfare Plans. 
 “Sprint Committee” means the Human Capital and Compensation Committee of the Board of Directors of Sprint. 
 “Sprint Employee” means any individual who immediately before and immediately following the Distribution Date is employed by Sprint or any
member of the Sprint Group as a common law employee, including active employees and employees on vacation, approved leave of absence or serial severance. 
 “Sprint Fidelity Trust” means the trust which is part of the Sprint 401(k) Plan and, until the date all of the Embarq 401(k) Assets and Bargaining Unit 401(k) Assets held in such trust have been transferred
to the Embarq Fidelity Trust, the Bargaining Unit 401(k) Plans and the Embarq 401(k) Plan. 
 “Sprint KMBP” shall have the meaning
set forth in Section 5.1 of this Agreement. 
  

 7 

 “Sprint Master Trust” means the trust which is part of the Sprint Retirement Pension Plan.

 “Sprint Option” shall have the meaning set forth in Section 17.2(a) of this Agreement. 
 “Sprint Participant” means any individual who, immediately following the Distribution Date, is a Sprint Employee, a Former Sprint Employee or a
beneficiary, dependent or alternate payee of any of the foregoing. 
 “Sprint Post-Distribution Stock Value” means the official
NYSE only “ex-dividend” closing price for Sprint Common Stock on the last Trading Day on the NYSE immediately before the Distribution Time. 
 “Sprint Pre-Distribution Stock Value” means the official NYSE only “regular way” closing price for Sprint Common Stock on the last Trading Day on the NYSE immediately before the Distribution Time.

 “Sprint Price Ratio” means the quotient obtained by dividing the Sprint Post-Distribution Stock Value by the Sprint
Pre-Distribution Stock Value. 
 “Sprint Reimbursement Account Plans” shall have the meaning set forth in Section 10.1 of this
Agreement. 
 “Sprint Restricted Stock” means a restricted stock award under any of the Sprint Stock Plans. 
 “Sprint RSU” means a restricted stock unit award under any of the Sprint Stock Plans. 
 “Sprint Separation Plans” means, collectively, the Sprint Separation Plan and the Sprint Voluntary Separation Plan. 
 “Sprint Service Plans” means, collectively, the Sprint Retirement Pension Plan, the Sprint 401(k) Plan, the Sprint Bargaining Unit 401(k) Plan
and the Sprint Separation Plans. 
 “Sprint Share Ratio” means the quotient obtained by dividing the Sprint Pre-Distribution Stock
Value by the Sprint Post-Distribution Stock Value. 
 “Sprint Stock Plans” means, collectively, the Sprint 1997 Long-Term Stock
Incentive Program, the Sprint Management Incentive Stock Option Plan, the Nextel Equity Plan and any other stock option or stock incentive compensation plan or arrangement for employees, officers, or directors of Sprint, other than the Sprint
Employees Stock Purchase Plan. 
 “Sprint Welfare Plans” shall have the meaning set forth in Section 9.1(a) of this Agreement.

 “Sprint SERP” means the Sprint Supplemental Executive Retirement Plan. 
  

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 “Trading Day” means the period of time during any given calendar day, commencing with the NYSE
only opening price and ending with the NYSE only closing price, in which trading in shares of Sprint Common Stock or Embarq Common Stock is permitted and settled on the NYSE. 
 “Transfer Date” means, with respect to a Delayed Transfer Employee, the date that such Delayed Transfer Employee commences active employment
with a member of the Embarq Group. 
 “True-Up Amount” shall have the meaning set forth in Section 3.2(b)(vi) of this
Agreement. 
 “U.S.” means the United States of America. 
 “VEBA” shall have the meaning set forth in Section 19.1 of this Agreement. 
 “VEBA Trust” shall have the meaning set forth in Section 19.1 of this Agreement. 
 “WC Claim” shall have the meaning set forth in Section 13.1(a) of this Agreement. 
 1.2 GENERAL INTERPRETIVE PRINCIPLES. (a) Words in the singular shall include the plural and vice versa, and words of one gender shall include the
other gender, in each case, as the context requires; (b) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement and not to
any particular provision of this Agreement, and references to Section and Schedules are references to the Sections and Schedules to this Agreement unless otherwise specified; (c) the word “including” and words of similar import when
used in this Agreement shall mean “including, without limitation,” unless otherwise specified; (d) any reference to any U.S. federal, state, or local statute or Law shall be deemed to also refer to all rules and regulations
promulgated under such statute or Law, unless the context otherwise requires; and (e) except as otherwise provided herein, any reference to an Embarq Benefit Plan or a Sprint Benefit Plan shall be deemed to refer to any such plan as it may have
been, or be, amended, restated or otherwise supplemented from time to time. 
 SECTION 2 
 GENERAL PRINCIPLES 
 2.1 ASSUMPTION
AND RETENTION OF LIABILITIES; RELATED ASSETS. 
 (a) Sprint. As of the Distribution Date, except as otherwise expressly provided for in
this Agreement, Sprint shall, or shall cause one or more members of the Sprint Group to, assume or retain, as applicable, and Sprint hereby agrees to pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all
Sprint Benefit Plans, (ii) all Liabilities with respect to the employment, service, termination of employment or termination of service of all Sprint 
  

 9 

 Employees, Former Sprint Employees and their dependents and beneficiaries and (iii) any other Liabilities expressly
assigned or allocated to Sprint or any member of the Sprint Group under this Agreement and Embarq shall have no responsibility for any such Liabilities. 
 (b) Embarq. As of the Distribution Date, except as otherwise expressly provided for in this Agreement, Embarq shall, or shall cause one or more members of the Embarq Group to, assume or retain, as applicable,
and Embarq hereby agrees to pay, perform, fulfill and discharge, in due course in full (i) all Liabilities under all Embarq Benefit Plans, (ii) all Liabilities with respect to the employment, service, termination of employment or
termination of service of all Embarq Employees, Former Embarq Employees and their dependents and beneficiaries and (iii) any other Liabilities expressly assigned or allocated to Embarq or any member of the Embarq Group under this Agreement, and
Sprint shall have no responsibility for any such Liabilities. The assumption by Embarq of Liabilities under this Agreement shall not create any obligation on Embarq to reimburse Sprint for any Liabilities paid or discharged by Sprint before the
Distribution Date. 
 (c) Reimbursements. 
 (i) From time to time after the Distribution Date, Embarq shall promptly reimburse Sprint, upon Sprint’s reasonable request and the presentation by Sprint of such substantiating documentation as Embarq shall
reasonably request, for the cost of any Liabilities satisfied by Sprint or any member of the Sprint Group that are pursuant to this Agreement the responsibility of Embarq or any member of the Embarq Group. 
 (ii) From time to time after the Distribution Date, Sprint shall promptly reimburse Embarq, upon Embarq’s reasonable request and the presentation by
Embarq of such substantiating documentation as Sprint shall reasonably request, for the cost of any Liabilities satisfied by Embarq or any member of the Embarq Group that are pursuant to this Agreement the responsibility of Sprint or any member of
the Sprint Group. 
 2.2 EMBARQ PARTICIPATION IN SPRINT BENEFIT PLANS. Except as otherwise expressly provided for in this Agreement or as
otherwise expressly agreed to in writing between the Parties, (i) effective as of the Distribution Date, Embarq and each member of the Embarq Group shall cease to be a Participating Company, and (ii) each (A) Embarq Participant and
each other employee of the Embarq Group as of the Distribution Date, and (B) Delayed Transfer Employee, effective as of such Delayed Transfer Employee’s Transfer Date, shall cease to participate in, be covered by, accrue benefits under, be
eligible to contribute to or have any rights under any Sprint Benefit Plan, and Sprint and Embarq shall take all necessary action to effectuate each such cessation. 
 2.3 COMPARABLE COMPENSATION AND BENEFITS. Except as otherwise agreed to in writing by Sprint, (i) with respect to an Embarq Employee, for the period commencing on the Distribution Date and ending on
December 31, 2006, Embarq (acting directly or through a member of the Embarq Group) intends to provide such Embarq Employee with compensation opportunities (including, without limitation, salary, wages, commissions and bonus opportunities) and
employee benefits that are in Embarq’s opinion, substantially 
  

 10 

 comparable, in the aggregate, to the compensation opportunities and employee benefits to which such Embarq Employee was
entitled to immediately prior to the Distribution Date and (ii) with respect to a Delayed Transfer Employee whose Transfer Date occurs prior to December 31, 2006, for the period commencing on such Delayed Transfer Employee’s Transfer
Date and ending on December 31, 2006, Embarq (acting directly or through a member of the Embarq Group) intends to provide such Delayed Transfer Employee with compensation opportunities (including, without limitation, salary, wages, commissions
and bonus opportunities) and employee benefits that are in Embarq’s opinion, substantially comparable, in the aggregate, to the compensation opportunities and employee benefits to which similarly situated Embarq Employees were entitled
immediately prior to such Delayed Transfer Employee’s Transfer Date. 
 2.4 SERVICE RECOGNITION. 
 (a) Pre-Distribution Service Credit. Embarq shall give each Embarq Participant and Delayed Transfer Employee full credit for purposes of
eligibility, vesting, determination of level of benefits, and, to the extent applicable, benefit accruals under any Embarq Benefit Plan for such Embarq Participant’s or Delayed Transfer Employee’s service with any member of the Sprint
Group prior to the Distribution Date or applicable Transfer Date to the same extent such service was recognized by the corresponding Sprint Benefit Plan immediately prior to the Distribution Date or applicable Transfer Date; provided,
however, that such service shall not be recognized to the extent that such recognition would result in the duplication of benefits under an Embarq Benefit Plan and a Sprint Benefit Plan. 
 (b) Post-Distribution Reciprocal Service Crediting. Each of Sprint and Embarq (acting directly or through members of the Sprint Group or the
Embarq Group, respectively) shall cause each of the Sprint Service Plans and the Embarq Service Plans, respectively, to provide the following service crediting rules effective as of the Distribution Date: 
 (i) If Sprint and Embarq agree in writing to the transfer of a Sprint Employee (including a Delayed Transfer Employee) to a member of the Embarq Group,
such Sprint Employee was a participant in any of the Sprint Service Plans and such transfer is effective prior to the first anniversary of the Distribution Date (or such later date as mutually agreed to in writing by the Parties) and such Sprint
Employee is continuously employed by the Sprint Group from the Distribution Date through the date which comes immediately before such Sprint Employee commences active employment with a member of the Embarq Group, then such Sprint Employee’s
service with the Sprint Group following the Distribution Date shall be recognized under the corresponding Embarq Service Plans for purposes of eligibility, vesting and level of benefits (other than benefit accruals under the Embarq Retirement
Pension Plan), in each case to the same extent as such Sprint Employee’s service with the Sprint Group was recognized under the corresponding Sprint Service Plans; provided, however, that such service shall not be recognized to the extent that
such recognition would result in the duplication of benefits under an Embarq Benefit Plan and a Sprint Benefit Plan. 
 (ii) Except as
provided in Section 2.4(b)(i), if a Sprint Employee after the Distribution Date becomes employed by a member of the Embarq Group, then, except to the extent required by applicable Law, such individual’s service with the Sprint Group
following the Distribution Date will not be recognized for any purpose under any Embarq Benefit Plan. 
  

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 (iii) If Sprint and Embarq agree in writing to the transfer of an Embarq Employee to, or Delayed Transfer
Employee back to, a member of the Sprint Group, such Embarq Employee or Delayed Transfer Employee was a participant in any of the Embarq Service Plans and such transfer is effective prior to the first anniversary of the Distribution Date (or such
later date as mutually agreed to in writing by the Parties) and such Embarq Employee or Delayed Transfer Employee is continuously employed by the Embarq Group from the Distribution Date or Transfer Date, as applicable, through the date which comes
immediately before such Embarq Employee or Delayed Transfer Employee commences active employment with a member of the Sprint Group, then such Embarq Employee’s or Delayed Transfer Employee’s service with the Embarq Group following the
Distribution Date or Transfer Date, as applicable, shall be recognized under the appropriate Sprint Service Plans (other than the Sprint Retirement Pension Plan) for purposes of eligibility, vesting and level of benefits, in each case to the same
extent as such Embarq Employee’s or Delayed Transfer Employee’s service with the Embarq Group was recognized under the corresponding Embarq Service Plans; provided, however, that such service shall not be recognized to the extent that such
recognition would result in the duplication of benefits under an Embarq Benefit Plan and a Sprint Benefit Plan. 
 (iv) Except as provided in
Section 2.4(b)(iii), if an Embarq Employee after the Distribution Date or a Delayed Transfer Employee after the applicable Transfer Date becomes employed by a member of the Sprint Group, then, except to the extent required by applicable Law,
such individual’s service with the Embarq Group following the Distribution Date or Transfer Date, as applicable, will not be recognized for any purpose under any Sprint Benefit Plan. 
 2.5 APPROVAL BY SPRINT AS SOLE STOCKHOLDER; APPROVAL BY EMBARQ. Effective as of the Distribution Date, Embarq shall have (a) adopted (i) the
Embarq Equity Incentive Plan which shall permit the issuance of long-term incentive awards that have material terms and conditions substantially similar to those long-term incentive awards issued under the Sprint 1997 Long-Term Stock Incentive
Program and, with respect to grants made under Section 17 of this Agreement, the other Sprint Stock Plans, as applicable, and (ii) the Embarq Employee Stock Purchase Plan, and (b) filed and caused to be effective any and all
registration statements and other reports or filings required to register shares for issuance under either such plan, including without limitation, by way of conversion pursuant to Sections 17.2(b) and 17.2(c)(ii) of this Agreement. The Embarq
Equity Incentive Plan and the Embarq Employee Stock Purchase Plan shall be approved prior to the Distribution Date by Sprint as Embarq’s sole shareholder. Notwithstanding the foregoing, any awards granted under the Embarq Equity Incentive Plan
or the Embarq Employee Stock Purchase Plan (including by way of conversion pursuant to Section 17.2(b) or 17.2(c)(ii) of this Agreement) shall be authorized and made by the Embarq Committee. 
  

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 SECTION 3 
 SPRINT RETIREMENT PENSION PLAN 
 3.1 ESTABLISHMENT OF EMBARQ RETIREMENT PENSION PLAN. Effective as of
the Distribution Date, Embarq shall, or shall have caused one or more members of the Embarq Group to, adopt a defined benefit pension plan and related trust to provide retirement benefits to Embarq Participants who immediately prior to the
Distribution Date were participants in, or entitled to present or future benefits (whether or not vested) under, the Sprint Retirement Pension Plan (such defined benefit pension plan, the “Embarq Retirement Pension Plan” and such
Embarq Participants, the “Embarq Plan Participants”). Embarq shall be responsible for taking appropriate action to adopt and administer the Embarq Retirement Pension Plan so that it is qualified under Section 401(a) of the Code
and that the trust which is a part of such plan is exempt under Section 501(a) of the Code. Notwithstanding the foregoing, until the date of the Initial Cash Transfer, all benefits payable to Embarq Plan Participants (including benefits that
have accrued under the Embarq Retirement Pension Plan following the Distribution Date) shall be paid on behalf of the Embarq Retirement Pension Plan from the Sprint Master Trust, and following the date of the Initial Cash Transfer, all benefits
payable to Embarq Plan Participants (including benefits that have accrued under the Sprint Retirement Pension Plan) shall be paid from the Embarq Master Trust. Embarq (acting directly or through one or more members of the Embarq Group) shall be
responsible for any and all Liabilities (including Liabilities for funding) and other obligations with respect to the Embarq Retirement Pension Plan. 
 3.2 EMBARQ PLAN PARTICIPANTS. 
 (a) Assumption of Sprint Retirement Pension Plan Liabilities. Subject
to the Plan Asset transfer described in Section 3.2(b), Embarq (acting directly or through a member of the Embarq Group) hereby agrees to cause the Embarq Retirement Pension Plan effective as of the date of the Initial Cash Transfer to assume,
and to fully perform, pay and discharge, all accrued benefits under the Sprint Retirement Pension Plan relating to all Embarq Plan Participants as of the Distribution Date (inclusive of benefits paid by the Sprint Retirement Pension Plan to Embarq
Plan Participants following the Distribution Date, but prior to the date of the Initial Cash Transfer Date in accordance with Section 3.1). 
 (b) Transfer of Sprint Retirement Pension Plan Assets.
 (i) (A) The Parties agree that the Plan Assets and any related
earnings or losses shall be determined and transferred to the Embarq Master Trust from the Sprint Master Trust in accordance with Section 414(l) of the Code, Treasury Regulation Section 1.414(l)-1, Section 208 of ERISA and the
assumptions and valuation methodology which the Pension Benefit Guaranty Corporation would have used under Section 4044 of ERISA as of the Distribution Date as set forth in Schedule C to this Agreement. 
 (B) No later than thirty (30) days prior to the Distribution Date, Sprint and Embarq (acting directly or through members of the Sprint Group or the
Embarq Group, respectively) shall, to the extent necessary, file an IRS Form 5310-A regarding the transfer of Plan Assets and Liabilities from the Sprint Retirement Pension Plan to the Embarq Retirement Pension Plan. 
  

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 (ii) As soon as reasonably practicable following the Distribution Date, Sprint shall cause the Actuary to
determine the estimated value, as of the Distribution Date, of the Plan Assets to be transferred pursuant to Section 3.2(b)(i)(A) of this Agreement to the Embarq Master Trust (the “Estimated Retirement Pension Plan Transfer
Amount”). 
 (iii) The Sprint Master Trust shall transfer to the Embarq Master Trust (in a single transfer or in a series of
transfers, as needed) an amount in cash which the Parties reasonably agree is at least sufficient to fund benefit payments reasonably projected to be required under the Embarq Retirement Pension Plan prior to the Initial Transfer Date (the
“Initial Cash Transfer”), and the Initial Cash Transfer shall be made on or before the end of the ten (10) business day period which starts on the Distribution Date. Within thirty (30) business days (or such later time as
mutually agreed to by the Parties) following the determination of the Estimated Retirement Pension Plan Transfer Amount, Sprint and Embarq (each acting directly or through the members of the Sprint Group or the Embarq Group, respectively) shall
cooperate in good faith to cause an initial transfer of Plan Assets (the date of such transfer, the “Initial Transfer Date”) from the Sprint Master Trust to the Embarq Master Trust in an amount equal to ninety percent (90%) of
the Estimated Retirement Pension Plan Transfer Amount minus the Initial Cash Transfer, adjusted to reflect earnings or losses during the period from the Distribution Date to the Initial Transfer Date (such amount, the “Initial Transfer
Amount”). Such earnings or losses shall be determined based on the actual rate of return on the investments of the Sprint Master Trust for the period commencing on the Distribution Date and ending on the last day of the calendar month
ending immediately prior to the Initial Transfer Date. Unless otherwise agreed to by the Parties in writing, Sprint shall satisfy its obligation pursuant to this Section 3.2(b)(iii) by causing the Sprint Master Trust to transfer Plan
Assets in kind to the extent practicable equal to the Initial Transfer Amount consisting of a pro rata percentage (rounded up or down to the nearest whole lot or distributable unit) of all investments under the Sprint Retirement Pension Plan and to
transfer the balance of the Initial Transfer Amount in cash. 
 (iv) Within thirty (30) days, or such other period of time as mutually
agreed upon by Sprint and Embarq, following the Initial Transfer Date, Sprint shall cause the trustee of the Sprint Master Trust to calculate the earnings or losses on the investments of the Sprint Master Trust for the period commencing on the first
day of the calendar month containing the Initial Transfer Date and ending on the Initial Transfer Date. The Initial Transfer Amount shall be hypothetically recalculated as if such earnings or losses had been credited to or debited against the
Initial Transfer Amount and the difference between the Initial Transfer Amount and such recalculated amount shall be the “ITA Adjustment”. 
 (v) Within one hundred twenty (120) days, or such other period of time as agreed upon by Sprint and Embarq, following the Initial Transfer Date, Sprint shall cause the Actuary to calculate (in accordance with
Section 3.2(b)(i)(A) of this Agreement) the final, verified value, as of the Distribution Date, of the Plan Assets to be transferred to the Embarq Master Trust, which shall be referred to herein as the “Final Retirement Pension Plan
Transfer Amount.” 
  

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 (vi) Within forty-five (45) days (or within such other period of time as agreed upon in writing
by the Parties) of the determination of the Final Retirement Pension Plan Transfer Amount, Sprint shall cause the Sprint Master Trust to transfer to the Embarq Master Trust (the date of such transfer, the “Final Transfer Date”) an
amount (the “True-Up Amount”), in accordance with Section 3.2(b)(vii), equal to (A) the sum of (1) the Final Retirement Pension Plan Transfer Amount and (2) if the ITA Adjustment reflects net earnings on the
Initial Transfer Amount, the ITA Adjustment, minus (B) the sum of (1) the Initial Transfer Amount, (2) the amount of the Initial Cash Transfer, (3) if the ITA Adjustment reflects net losses on the Initial Transfer Amount, the ITA
Adjustment (expressed as a positive number), and (4) the aggregate amount of payments made from the Sprint Master Trust on behalf of the Embarq Retirement Pension Plan to Embarq Plan Participants in order to satisfy any benefit obligation with
respect to such Embarq Plan Participants during the period commencing on the Distribution Date and ending on the date of the Initial Cash Transfer; provided, that, the True-Up Amount shall be adjusted to reflect earnings or losses as
described in Section 3.2(b)(vii); and provided, further, that in the event the sum of clauses (B)(1), (B)(2), (B)(3) and (B)(4) of this Section 3.2(b)(vi) is greater than the sum of clauses (A)(1) and (A)(2) of this
Section 3.2(b)(vi), Sprint shall not be required to cause any such additional transfer and instead Embarq shall be required to cause a transfer of cash from the Embarq Master Trust to the Sprint Master Trust in amount equal to the amount by
which the sum of clauses (B)(1), (B)(2), (B)(3) and (B)(4) of this Section 3.2(b)(vi) exceeds the sum of clauses (A)(1) and (A)(2) of this Section 3.2(b)(vi). 
 (vii) The True-Up Amount shall be transferred from the Sprint Master Trust to the Embarq Master Trust, and the transfer shall (unless otherwise agreed to
by the Parties in writing) be made to the extent practicable in kind, consisting of a pro rata percentage (rounded up or down to the nearest whole lot or distributable unit) of all investments under the Sprint Retirement Pension Plan and the balance
of the True-Up Amount shall be transferred in cash. The True-Up Amount shall be adjusted to reflect earnings or losses during the period from the Distribution Date to the Final Transfer Date. Such earnings or losses shall be determined based on the
actual rate of return of the investments of the Sprint Master Trust for the period commencing on the Distribution Date and ending on the last calendar day of the month ending immediately prior to the Final Transfer Date. 
 (viii) Within thirty (30) days, or such other period of time as agreed upon by Sprint and Embarq, following the Final Transfer Date, Sprint shall
cause the trustee of the Sprint Master Trust to calculate the earnings or losses on the investments of the Sprint Master Trust for the period commencing on the first day of the calendar month containing the Final Transfer Date and ending on the
Final Transfer Date. The True-Up Amount shall be hypothetically recalculated as if such earnings or losses had been credited to or debited against the True-Up Amount. If, under such calculation, there were earnings on the True-Up Amount, the Sprint
Master Trust shall transfer to the Embarq Master Trust an amount of cash equal to such hypothetical earnings. If, under such calculation, there were losses on the True-Up Amount, Embarq shall be required to cause a transfer of cash from the Embarq
Master Trust to the Sprint Master Trust in an amount equal to such losses. The transfer required by this Section 3.2(b)(viii) shall be made within forty-five (45) days of the Final Transfer Date. 
  

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 (c) Continuation of Elections. As of the Distribution Date, Embarq (acting directly or through a
member of the Embarq Group) shall cause the Embarq Retirement Pension Plan to recognize all existing elections, including, but not limited to, beneficiary designations, payment form elections and rights of alternate payees under qualified domestic
relations orders with respect to Embarq Plan Participants under the Sprint Retirement Pension Plan. 
 3.3 DELAYED TRANSFER EMPLOYEES.

 (a) Assumption of Sprint Retirement Pension Plan Liabilities. Subject to the asset transfer described in Section 3.3(b) with
respect to each Delayed Transfer Employee, effective as of such Delayed Transfer Employee’s Transfer Date, Embarq (acting directly or through members of the Embarq Group) shall cause the Embarq Retirement Pension Plan to assume, and to fully
perform, pay and discharge, all benefits accrued under the Sprint Retirement Pension Plan relating to such Delayed Transfer Employee through such Delayed Transfer Employee’s Transfer Date. Each Delayed Transfer Employee shall receive service
credit under the Embarq Retirement Pension Plan for service completed with Sprint or a member of the Sprint Group for the period commencing on January 1, 2006 and ending on such Delayed Transfer Employee’s Transfer Date but shall receive
no credit under such plan for compensation paid by Sprint for such service. 
 (b) Transfer of Sprint Retirement Pension Plan
Assets.
 (i) The Parties agree that the assets of the Sprint Master Trust allocable to pay the benefits accrued by the Delayed Transfer
Employees shall be transferred to the Embarq Master Trust in accordance with Section 3.2(b)(i)(A) of this Agreement. No later than thirty (30) days after the first anniversary of the Distribution Date (or such other date as mutually agreed
to by the Parties) (the “Delayed Transfer Calculation Date”), Sprint and Embarq (acting directly or through members of the Sprint Group or the Embarq Group, respectively) shall, if then deemed necessary or appropriate, file an IRS
Form 5310-A regarding the transfer of such assets and Liabilities from the Sprint Master Trust to the Embarq Master Trust with respect to the Delayed Transfer Employees. 
 (ii) No later than one hundred twenty (120) days, or such other period of time as agreed upon by Sprint and Embarq, following the Delayed Transfer
Calculation Date, Sprint shall cause the Actuary to calculate (in accordance with Section 3.2(b)(i)(A) of this Agreement) the final, verified value of the assets to be transferred to the Embarq Master Trust with respect to the Delayed Transfer
Employees, which amount shall be referred to as the “Final Delayed Transfer Amount.” 
 (iii) Within thirty (30) days
following the determination of the Final Delayed Transfer Amount, Sprint shall cause the Sprint Master Trust to transfer to the Embarq Master Trust (the date of such transfer, the “Final Delayed Transfer Date”) an amount equal to
the Final Delayed Transfer Amount, adjusted to reflect investment earnings or losses of the Sprint Master Trust during the period from the Delayed Transfer Calculation Date through the Final Delayed Transfer Date. Such investment earnings or losses
shall be determined based on the actual investment rate of return on the assets of the Sprint Master Trust for the period commencing on 
  

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 the Delayed Transfer Calculation Date and ending on the last calendar day of the month ending immediately prior to the
Final Delayed Transfer Date. Sprint shall satisfy its obligation pursuant to this Section 3.3(b)(iii) by causing the Sprint Master Trust to transfer assets in kind to the extent practicable equal to the Final Delayed Transfer Amount
consisting of a pro rata percentage (rounded up or down to the nearest whole lot or distributable unit) of all investments under the Sprint Retirement Pension Plan and to transfer the balance of the Final Delayed Transfer Amount in cash. 

(iv) Within thirty (30) days, or such other period of time as mutually agreed upon by Sprint and Embarq, following the Final Delayed Transfer
Date, Sprint shall cause the trustee of the Sprint Master Trust to calculate the earnings and losses on the investments of the Sprint Master Trust for the period commencing on the first day of the calendar month containing the Final Delayed Transfer
Date and ending on the Final Delayed Transfer Date. The Final Delayed Transfer Date Amount shall be hypothetically recalculated as if such earnings or losses had been credited to or debited against the Final Delayed Transfer Amount. If, under such
calculation, there were earnings on the Final Delayed Transfer Amount, the Sprint Master Trust shall transfer to the Embarq Master Trust an amount of cash equal to such hypothetical earnings. If, under such calculation, there were losses on the
Final Delayed Transfer Amount, Embarq shall be required to cause a transfer of cash from the Embarq Master Trust to the Sprint Master Trust in an amount equal to such losses. The transfer required by this Section 3.3(b)(iv) shall be made within
forty-five (45) days of the Final Delayed Transfer Date. 
 (c) Continuation of Elections. As of each Delayed Transfer
Employee’s Transfer Date, Embarq (acting directly or through a member of the Embarq Group) shall cause the Embarq Retirement Pension Plan to recognize all existing elections including beneficiary designations, payment form elections and rights
of alternate payees under qualified domestic relations orders with respect to such Delayed Transfer Employee under the Sprint Retirement Pension Plan. 
 3.4 ALTERNATIVE PROCEDURES. Notwithstanding the foregoing provisions of this Section 3, the Parties acknowledge that the trustee for the Sprint Master Trust may propose alternative procedures for transferring (or
accounting for the transfer of) Plan Assets and any related earnings and losses from the Sprint Master Trust to the Embarq Master Trust with respect to Embarq Plan Participants and Delayed Transfer Employees. The Parties agree to reasonably
cooperate with each other and the trustee for the Sprint Master Trust to evaluate any such alternative procedures and, upon the written agreement of the Parties, may utilize such alternative procedures in lieu of the procedures set forth in the
foregoing provisions of this Section 3; provided, however, that any such alternative procedures must (a) comply with applicable Law, and (b) provide for the transfer of Plan Assets and related earnings and losses in
accordance with Section 414(1) of the Code, Treasury Regulation Section 1.414(1)-1, Section 208 of ERISA and the assumptions and valuation methodology which the Pension Benefit Guaranty Corporation would have used under
Section 4044 of ERISA as of the Distribution Date as set forth on Schedule C of this Agreement. 
  

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 SECTION 4 
 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 
 4.1 ADOPTION OF EMBARQ SERP. Effective as of the
Distribution Date, Embarq as a part of the transfer of Plan Assets and Liabilities from the Sprint Retirement Pension Plan to the Embarq Retirement Pension Plan shall, or shall cause a member of the Embarq Group to, adopt the Sprint SERP with
respect to the Embarq Plan Participants (the “Embarq SERP”) and, effective as of the Distribution Date, Embarq hereby agrees to cause the Embarq SERP to assume responsibility for all Liabilities and fully perform, pay and discharge
all obligations, when such obligations become due, of the Sprint SERP with respect to all such Embarq Plan Participants. With respect to each Delayed Transfer Employee, effective as of such Delayed Transfer Employee’s Transfer Date, Embarq
shall cause the Embarq SERP to assume, and to fully perform, pay and discharge, all Liabilities of the Sprint SERP with respect to such Delayed Transfer Employee. Embarq (acting directly or through a member of the Embarq Group) shall be responsible
for any and all Liabilities (including Liabilities for paying benefits) and other obligations with respect to the Embarq SERP. 
 4.2
CONTINUATION OF ELECTIONS. As of the Distribution Date, Embarq (acting directly or through a member of the Embarq Group) shall cause the Embarq SERP to recognize any election with respect to the form of distribution then in effect with respect to
any Embarq Plan Participants under the Sprint SERP. With respect to each Delayed Transfer Employee who participated in the Sprint SERP, effective as of such Delayed Transfer Employee’s Transfer Date, Embarq (acting directly or through a member
of the Embarq Group) shall cause the Embarq SERP to recognize and maintain any election with respect to the form of distribution then in effect with respect to such Delayed Transfer Employee under the Sprint SERP. 
 SECTION 5 
 KEY MANAGEMENT BENEFIT
PLAN 
 5.1 SPRINT KEY MANAGEMENT BENEFIT PLAN. Effective as of the Distribution Date, Embarq shall, or shall have caused one or more
members of the Embarq Group to adopt the Sprint Key Management Benefit Plan (the “Sprint KMBP”), with respect to the Embarq Participants who immediately prior to the Distribution Date were participants (whether or not vested) in
such plan (the “Embarq KMBP”) and who are shown on Schedule D to this Agreement. Embarq shall be responsible for taking all appropriate action to assume and administer the Embarq KMBP. Embarq (acting directly or through a member of
the Embarq Group) shall be responsible for any and all Liabilities with respect to the Embarq KMBP. 
 5.2 ASSUMPTION OF SPRINT KMBP
LIABILITIES. Effective as of the Distribution Date, Embarq (acting directly or through a member of the Embarq Group) hereby agrees to cause the Embarq KMBP to assume, and to fully perform, pay and discharge, all Liabilities of the Sprint KMBP
relating to all Embarq Participants as of the Distribution Date which are set forth in Schedule D to this Agreement. 
  

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 5.3 TRANSFER OF SPRINT KMBP ASSETS. The Parties agree the general Assets of Sprint shown in Schedule D to
this Agreement (the “KMBP Assets”) shall be transferred by Sprint to Embarq as of the Distribution Date and that the KMBP Assets shall be held by Embarq as part of Embarq’s general Assets. 
 5.4 CONTINUATION OF ELECTIONS. As of the Distribution Date, Embarq (acting directly or through a member of the Embarq Group) shall cause the Embarq KMBP
to recognize any election then in effect with respect to any Embarq Participant under the Sprint KMBP. 
 SECTION 6 
 401(K) PLANS 
 6.1 EMBARQ 401(k) PLAN.

 (a) Establishment of the Embarq 401(k) Plan.
 (i) Sprint established effective as of January 1, 2006 a defined contribution plan for the benefit of individuals, who were not represented by a collective bargaining agent, and who would have been Embarq
Employees on such date if January 1, 2006 were the Distribution Date (the “Embarq 401(k) Participants”), and such plan has eligibility, contribution and vesting provisions which are the same as the eligibility, contribution and
vesting provisions of the Sprint 401(k) Plan as in effect on December 31, 2005 (the “Embarq 401(k) Plan”). Each Delayed Transfer Employee shall receive service credit under the Embarq 401(k) Plan for service completed with
Sprint or a member of the Sprint Group or for the period commencing on January 1, 2006 and ending on such Delayed Transfer Employee’s Transfer Date but shall receive no credit under such plan for compensation paid by Sprint for such
service. 
 (ii) Sprint before the Distribution Date shall be responsible for taking all appropriate action to establish and administer the
Embarq 401(k) Plan so that it is qualified under Section 401(a) of the Code and that the Sprint Fidelity Trust which is a part of such plan is exempt under Section 501(a) of the Code. Embarq on the Distribution Date shall assume the Embarq
401(k) Plan and all of Sprint’s rights and obligations under such plan and shall be responsible for taking all appropriate action to administer the Embarq 401(k) Plan so that it remains qualified under Section 401(a) of the Code.

 (iii) Effective as of the Distribution Date, Embarq shall establish the Embarq Fidelity Trust which shall be a part of the Embarq 401(k)
Plan on and after the Distribution Date, and Embarq shall be responsible for taking all necessary action so that such trust is exempt under Section 501(a) of the Code. Embarq (acting directly or through a member of the Embarq Group) shall be
responsible for any and all Liabilities (including all Liabilities for funding) with respect to the Embarq 401(k) Plan. The Sprint Fidelity Trust shall remain a part of the Embarq 401(k) Plan until the date all of the assets held in such trust which
are properly allocable to Embarq 401(k) Participants have been transferred to the Embarq Fidelity Trust. 
  

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 (b) Transfer of Sprint 401(k) Plan Assets.
 (i) As soon as reasonably practicable (but not later than thirty (30) days) following the Distribution Date, Sprint shall cause the trustee for
the Sprint Fidelity Trust to transfer in-kind the assets underlying the account balances (including any unvested balances, outstanding loan balances and forfeitures) held in the Sprint Fidelity Trust for the Embarq 401(k) Participants (the
“Embarq 401(k) Assets”) to the Embarq Fidelity Trust, and Embarq shall cause the Embarq Fidelity Trust to accept the transfer of the Embarq 401(k) Assets. Embarq effective as of the date of such transfer shall assume and fully
perform, pay and discharge, all Liabilities of the Embarq 401(k) Plan. The transfer of the Embarq 401(k) Assets shall be conducted in accordance with Section 414(l) of the Code, Treasury Regulation Section 1.414(1)-1, and Section 208
of ERISA. 
 (ii) As soon as reasonably practicable (but not later than thirty (30) days) following the one year anniversary of the
Distribution Date, Sprint shall cause the trustee for the Sprint Fidelity Trust to transfer in-kind the assets underlying account balances (including any unvested balances, any outstanding loan balances and forfeitures) held in the Sprint Fidelity
Trust for the Delayed Transferred Employees to the Embarq Fidelity Trust (the “Delayed 401(k) Assets”), and Embarq shall cause the Embarq Fidelity Trust to accept the transfer of the Delayed 401(k) Assets. Embarq effective as of the
date of such transfer shall assume and fully perform, pay and discharge, all Liabilities relating to the Delayed 401(k) Assets as of such transfer date. The transfer of the Delayed 401(k) Assets shall be conducted in accordance with
Section 414(l) of the Code, Treasury Regulation Section 1.414(l)-1, and Section 208 of ERISA. 
 (iii) Sprint and Embarq agree
to cooperate, and Sprint agrees to cause the trustee for the Sprint Fidelity Trust and Embarq agrees to cause the trustee for the Embarq Fidelity Trust to cooperate, to assure the transfers described in this Section 6.1(b) are effected in a
manner intended to have a minimum adverse impact, if any, on participants. 
 (c) Continuation of Elections. The Embarq 401(k) Plan
shall recognize all elections, including deferral, investment and payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to Embarq 401(k) Participants under the
Sprint 401(k) Plan. Delayed Transfer Employees will be eligible to enroll in the Embarq 401(k) Plan in accordance with the terms of such plan and will be eligible to make all elections and beneficiary designations in accordance with the terms of the
Embarq 401(k) Plan and the procedures which Embarq or the Embarq 401(k) Plan has established for the making of such elections and designations. 
 6.2 BARGAINING UNIT 401(K) PLANS. 
 (a) Sprint Retirement Savings Plan for Bargaining Unit Employees. Effective as of the
Distribution Date, Embarq shall, or shall have caused one or more members of the Embarq Group to assume the Sprint Bargaining Unit 401(k) Plan for the benefit of the Embarq Participants who immediately prior to the Distribution Date were
participants in, or entitled to present or future benefits (whether or not vested) under such plan immediately prior to the 
  

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 Distribution Date, which plan as so assumed shall be referred to as the “Embarq Bargaining Unit 401(k)
Plan”. Embarq shall be responsible for taking all appropriate action to assume and administer the Embarq Bargaining Unit 401(k) Plan. 
 (b) Transfer of Bargaining Unit 401(k) Plan Assets. As soon as reasonably practicable (but not later than thirty (30) days) following the Distribution Date, Sprint shall cause the trustee for the Sprint Fidelity Trust to
transfer in-kind the assets underlying the account balances (including any unvested balances, outstanding loan balances and forfeitures) held in the Sprint Fidelity Trust for the Bargaining Unit 401(k) Plans (the “Bargaining Unit 401(k)
Assets”) to the Embarq Fidelity Trust, and Embarq shall cause the Embarq Fidelity Trust to accept the transfer of the Bargaining Unit 401(k) Assets. Embarq effective as of the date of such transfer shall assume and fully perform, pay and
discharge, all Liabilities of the Bargaining Unit 401(k) Plans. The transfer of the Bargaining Unit 401(k) Assets shall be conducted in accordance with Section 414(l) of the Code, Treasury Regulation Section 1.414(1)-1, and
Section 208 of ERISA. Sprint and Embarq agree to cooperate, and Sprint agrees to cause the trustee for the Sprint Fidelity Trust and Embarq agrees to cause the trustee for the Embarq Fidelity Trust to cooperate, to assure the transfers
described in this Section 6.2(b) are effected in a manner intended to have a minimum adverse impact, if any, on participants. 
 (c)
Continuation of Elections. As of the Distribution Date, Embarq (acting directly or through a member of the Embarq Group) shall cause the Bargaining Unit 401(k) Plans to recognize all elections, including deferral, investment and
payment form elections, beneficiary designations, and the rights of alternate payees under qualified domestic relations orders with respect to participants in the Bargaining Unit 401(k) Plans. 
 SECTION 7 
 SPRINT RETAINED LIABILITIES AND EMPLOYMENT AGREEMENTS

 7.1 SPRINT EDCP. Sprint shall retain all Liabilities under the Sprint EDCP. Pursuant to the terms of the Sprint EDCP, Sprint shall
treat the Distribution Date as the date the employment of each Embarq Employee who is a participant in the Sprint EDCP terminates. 
 7.2
OTHER SPRINT LIABILITIES. Sprint shall retain all Liabilities under the Centel Compensation Programs, and Embarq shall, or shall cause a member of the Embarq Group, to assign or otherwise transfer all of its rights and interests in the Centel
Deferred Compensation Trust to Sprint so that Sprint shall have the same rights and interests as Embarq or such member of the Embarq Group had to satisfy such Liabilities from the assets of such trust. Sprint in addition shall retain all Liabilities
under the Indemnification Obligations. 
 7.3 EMPLOYMENT AGREEMENTS. The Parties agree that Sprint shall assign to Embarq and Embarq shall
assume the employment related agreements shown on Schedule E to this Agreement with the individuals shown on Schedule E to this Agreement pursuant to the Conveyance and Assumption Instruments under the Separation and Distribution Agreement.

  

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 SECTION 8 
 RETIREE MEDICAL COVERAGE 
 Effective no later than the Distribution Date, Embarq shall, or shall have
caused one or more members of the Embarq Group to, adopt a retiree medical plan to provide retiree medical benefits in accordance with the terms of the Sprint Retiree Medical Plan as in effect on December 31, 2005 (i) to Embarq Employees
and Embarq Participants who immediately prior to the Distribution Date were participants in the Sprint Retiree Medical Plan and (ii) to each Delayed Transfer Employee who immediately prior to his or her Transfer Date is a participant in the
Sprint Retiree Medical Plan (such retiree medical plan, the “Embarq Retiree Medical Plan” and such Embarq Participants, the “Embarq Retiree Medical Plan Participants”). Embarq shall be responsible for taking all
appropriate action to adopt and administer the Embarq Retiree Medical Plan. Embarq (acting directly or through a member of the Embarq Group) shall be responsible for any and all Liabilities (including Liabilities for funding) with respect to the
Embarq Retiree Medical Plan. Effective as of the Distribution Date, Embarq (acting directly or through a member of the Embarq Group) hereby agrees to cause the Embarq Retiree Medical Plan to assume, and to fully perform, pay and discharge, all
accrued but unpaid benefits as of the Distribution Date, including incurred but unreported claims for benefits, and any credits under the Sprint Retiree Medical Plan relating to all Embarq Retiree Medical Plan Participants as of the Distribution
Date with respect to individuals described in clause (i) of this Section 8 and as of the applicable Transfer Date with respect to individuals described in clause (ii) of this Section 8. 
 SECTION 9 
 HEALTH AND WELFARE PLANS

 9.1 ADOPTION OF HEALTH AND WELFARE PLANS. 
 (a) Adoption of the Embarq Welfare Plans. Sprint or one or more of its Subsidiaries maintain each of the health and welfare plans set forth on Schedule F to this Agreement (collectively the “Sprint
Welfare Plans” and individually a “Sprint Welfare Plan”) for the benefit of eligible Sprint Participants and Embarq Participants. Effective as of the Distribution Date, Embarq shall, or shall cause a member of the Embarq
Group to adopt for the benefit of eligible Embarq Participants health and welfare plans which provide benefits which are the same as the benefits provided under the corresponding Sprint Welfare Plans in which such individuals participate immediately
prior to the Distribution Date as each such plan is then in effect (collectively the “Embarq Welfare Plans” and individually an “Embarq Welfare Plan”). 
 (b) Terms of Participation in Embarq Welfare Plans. Embarq (acting directly or through a member of the Embarq Group) shall cause each Embarq
Welfare Plan to (i) waive all limitations as to preexisting conditions, exclusions, and service conditions with respect to participation and coverage requirements applicable to Embarq Participants and Delayed Transfer Employees, other than
limitations that were in effect with respect to (A) Embarq Participants as of the Distribution Date and (B) each Delayed Transfer Employee as of such Delayed Transfer 
  

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 Employee’s Transfer Date, in each case under the corresponding Sprint Welfare Plan, (ii) honor any deductibles,
out-of-pocket maximums, and co-payments incurred by Embarq Participants and Delayed Transfer Employees under the corresponding Sprint Welfare Plan in satisfying any applicable deductibles, out-of-pocket maximums or co-payments under an Embarq
Welfare Plan during the same plan year in which such deductibles, out-of-pocket maximums and co-payments were made, and (iii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to an
Embarq Participant following the Distribution Date or to a Delayed Transfer Employee following such Delayed Transfer Employee’s Transfer Date, to the extent such Embarq Participant or Delayed Transfer Employee, as applicable, had satisfied any
similar limitation under the corresponding Sprint Welfare Plan. 
 (c) Continuation of Elections. With respect to Embarq Participants,
as of the Distribution Date, Embarq (acting directly or through a member of the Embarq Group) shall cause each Embarq Welfare Plan to recognize all elections and designations (including all coverage and contribution elections and beneficiary
designations) made by Embarq Participants under, or with respect to, the Embarq Welfare Plans or the corresponding Sprint Welfare Plan, as applicable, and apply such elections and designations under the Embarq Welfare Plan for the remainder of the
period or periods for which such elections or designations are by their original terms applicable, to the extent an election or designation made under a particular Sprint Welfare Plan is available under the corresponding Embarq Welfare Plan. With
respect to each Delayed Transfer Employee, as of such Delayed Transfer Employee’s Transfer Date, Embarq (acting directly or through a member of the Embarq Group) shall cause each Embarq Welfare Plan to recognize all elections and designations
(including all coverage and contribution elections and beneficiary designations) made by such Delayed Transfer Employee under, or with respect to, the corresponding Sprint Welfare Plan and apply such elections and designations under the Embarq
Welfare Plan for the remainder of the period or periods for which such elections or designations are by their original terms applicable, to the extent such election or designation is available under the corresponding Embarq Welfare Plan. 

9.2 LIABILITIES FOR CLAIMS. 
 (a)
Embarq Employees and Former Embarq Employees. Effective as of the Distribution Date, Embarq shall, or shall have caused one or more members of the Embarq Group to, assume all Liabilities under the Sprint Welfare Plans for claims incurred by
Embarq Employees and Former Embarq Employees, in each case, regardless of whether such Liabilities relate to claims incurred before, on or after the Distribution Date, and Embarq agrees to pay, perform and discharge all such Liabilities. 

(b) Delayed Transfer Employees. Effective as of the Transfer Date for each Delayed Transfer Employee, Embarq shall, or shall have caused one or
more members of the Embarq Group to, assume all Liabilities under the Sprint Welfare Plans for claims incurred by such Delayed Transfer Employee, regardless of whether such Liabilities relate to claims incurred before, on or after, his or her
Transfer Date, and Embarq agrees to pay, perform and discharge all such Liabilities. 
  

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 (c) Sprint Liabilities. Sprint shall retain all Liabilities under the Sprint Welfare Plans for
claims incurred by Sprint Employees and Former Sprint Employees, and Sprint (subject to Section 9.2(a) and Section 9.2(b)), shall cause the Sprint Welfare Plans to continue to process and pay all claims incurred and reported before the
Distribution Date for Embarq Employees and Former Embarq Employees and all claims incurred and reported for a Delayed Transfer Employee before his or her Transfer Date in accordance with each such plan’s standard policies and practices for
processing and paying claims. 
 (d) Cooperation. Sprint and Embarq agree to cooperate to assure the transfers of Liabilities under
this Section 9.2 are effected in a manner intended to have a minimum adverse impact, if any, on Embarq Employees, Former Embarq Employees and Delayed Transfer Employees. 
 SECTION 10 
 REIMBURSEMENT ACCOUNT PLANS 
 10.1 PLANS. Effective as of the Distribution Date, Embarq (acting directly or through a member of the Embarq Group) shall establish a health and
dependent care reimbursement account plan (the “Embarq Reimbursement Account Plans”) with features that are the same as those in the Sprint Health Care Reimbursement Account and the Sprint Dependent Day Care Reimbursement Account
immediately prior to the Distribution Date (the “Sprint Reimbursement Account Plans”). Effective as of the Distribution Date, Embarq (acting directly or through a member of the Embarq Group) shall assume responsibility for
administering all reimbursement claims under the Embarq Reimbursement Account Plans of Embarq Participants with respect to calendar year 2006, whether arising before, on, or after the Distribution Date. With respect to each Delayed Transfer
Employee, effective as of such Delayed Transfer Employee’s Transfer Date, Embarq (acting directly or through a member of the Embarq Group) shall assume responsibility for administering all reimbursement claims under the Embarq Reimbursement
Account Plans of such Delayed Transfer Employee with respect to the calendar year in which such Delayed Transfer Employee’s Transfer Date occurs, whether arising before, on, or after such Transfer Date. 
 10.2 CASH TRANSFERS. As soon as practicable but no more than 30 days following the Distribution Date with respect to each Embarq Participant or, no
more than 30 days following the last day of the calendar year in which the applicable Transfer Date occurs with respect to each Delayed Transfer Employee, Sprint shall cause to be transferred to Embarq an amount in cash equal to (i) the
sum of all contributions to the Sprint Reimbursement Account Plans made with respect to calendar year 2006 by or on behalf of all Embarq Participants for periods before the Distribution Date and on behalf of each Delayed Transfer Employee for the
calendar year in which the Transfer Date for such Delayed Transfer Employee occurs, reduced by (ii) the sum of all claims incurred in calendar year 2006 and paid by the Sprint Reimbursement Account Plans with respect to all such Embarq
Participants and the sum of all claims incurred in the calendar year in which the applicable Transfer Date occurs and paid by the Sprint Reimbursement Account Plans with respect to each Delayed Transfer Employee. All assets or obligations relating
to all participants in the Sprint Reimbursement Account Plans with respect to periods ending on or before December 31, 2005 (or December 31, 2006 for each Delayed Transfer Employee with a Transfer Date in calendar year 2007) will be
retained by Sprint. 
  

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 SECTION 11 
 COBRA 
 11.1 EMBARQ PARTICIPANTS. Effective as of the Distribution Date, Embarq (acting directly or
through a member of the Embarq Group) shall assume, or shall have caused the Embarq Welfare Plans to assume, responsibility for compliance with the health care continuation coverage requirements of COBRA with respect to Embarq Participants who, as
of the day prior to the Distribution Date, were covered under a Sprint Welfare Plan pursuant to COBRA or who had a COBRA qualifying event (as defined in Code Section 4980B) prior to the Distribution Date. 
 11.2 DELAYED TRANSFER EMPLOYEES. Effective as of a Delayed Transfer Employee’s Transfer Date, Embarq (acting directly or through a member of the
Embarq Group) shall assume, or shall have caused the Embarq Welfare Plans to assume, responsibility for compliance with the health care continuation coverage requirements of COBRA with respect to such Delayed Transfer Employee (and his or her
qualified beneficiaries under COBRA) to the extent such Delayed Transfer Employee was, as of the day prior to such Delayed Transfer Employee’s Transfer Date, covered under a Sprint Welfare Plan pursuant to COBRA or who had a COBRA qualifying
event (as defined in Code Section 4980B) prior to the Delayed Transfer Employee’s Transfer Date. 
 SECTION 12 
 SHORT TERM AND LONG TERM DISABILITY 
 Effective as of the Distribution Date, Embarq (acting directly or through a member of the Embarq Group) shall establish a short term disability program and a long term disability program with benefits that are the same as those under the
corresponding Sprint programs immediately prior to the Distribution Date. Effective as of the Distribution Date, Embarq (acting directly or through a member of the Embarq Group) shall assume all Liabilities (a) with respect to short term
disability benefits for Embarq Participants who (i) were receiving short term disability payments as of the Distribution Date or (ii) incurred an illness or injury before the Distribution Date which would entitle such Embarq Participants
to receive short term disability payments beginning on or after the Distribution Date and (b) with respect to long term disability benefits for Embarq Participants who are or who become eligible for long term disability benefits. With respect
to each Delayed Transfer Employee, effective as of such Delayed Transfer Employee’s Transfer Date, Embarq (acting directly or through a member of the Embarq Group) shall assume all Liabilities (a) with respect to short term disability
benefits under Sprint’s short term disability program to such Delayed Transfer Employee who (i) was receiving short term disability payments as of the Delayed Transfer Employee’s Transfer Date or (ii) incurred an illness or
injury before the Delayed Transfer Employee’s Transfer Date which would entitle such Delayed Transfer Employee to receive such short term disability payments beginning on or after such Delayed Employee’s Transfer Date, or (b) with
respect to long term disability benefits for any Delayed Transfer Employee who is or who becomes eligible for long term disability benefits. 
  

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 SECTION 13 
 WORKERS’ COMPENSATION 
 13.1 TREATMENT OF WORKERS’ COMPENSATION CLAIMS. 
 (a) Sprint WC Claims. Sprint will be responsible for all Liabilities (including Liabilities for associated administrative functions) for
workers’ compensation claims made for compensable injuries (the “WC Claims”) occurring before the Distribution Date in states with monopolistic workers’ compensation systems, (including North Dakota, Ohio (except
self-insured WC Claims in Ohio), Washington, West Virginia and Wyoming) and all other WC Claims except the WC Claims described in Section 13.1(b). 
 (b) Embarq WC Claims. Embarq shall be responsible for all Liabilities (including Liabilities for associated administrative functions) (i) for WC Claims made on or after the Distribution Date by Embarq
Employees as well as WC Claims before the Distribution Date as described on Schedule G; and (ii) for WC Claims made on or after January 1, 2006 by a Delayed Transfer Employee who actually transfers to Embarq. 
 (c) When WC Claims Made. For purposes of this Section 13.1, WC Claims shall be “made” at the time of the occurrence of the event
giving rise to eligibility for workers’ compensation benefits or at the time the occupational disease become manifest, as applicable. 
 13.2 COLLATERAL. Sprint will be responsible for providing all collateral required by insurance carriers through the four-year anniversary of the Distribution Date, in support of the WC Claims described in Section 13.1(b) that were made
prior to the Distribution Date. After the four-year anniversary of the Distribution Date, Embarq will be responsible for providing all collateral required by insurance carriers in support of such WC Claims. 
 13.3 RETRO POLICY TRUE-UPS. Upon receipt by Sprint of a statement for adjustments to the Retro Policies for United Telecommunications, Inc. and Centel
Corporation, Sprint will submit to Embarq a copy of the workers’ compensation portion of the statement. If the statement requires an additional premium for the workers’ compensation portion, Embarq will submit a payment to Sprint for that
amount, and if the statement provides for a return of premium paid for the workers’ compensation portion, Sprint will submit a payment to Embarq for that amount. 
 13.4 NOTIFICATION OF GOVERNMENTAL AUTHORITIES. Embarq will notify applicable Governmental Authorities, if and as appropriate, of any on-the-job injuries or WC Claims for which it is responsible under this
Section 13. Sprint will notify applicable Governmental Authorities, if and as appropriate, of any on-the-job injuries or WC Claims for which it is responsible under this Section 13. The Parties will cooperate in providing to each other
Information needed for these notifications and related filings. 
  

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 13.5 ASSIGNMENT OF CONTRIBUTION RIGHTS. Sprint will transfer and assign to Embarq all rights to
seek contribution or damages from any third party (such as a third party who aggravates an injury to a worker who makes a WC Claim) with respect to any WC Claim for which Embarq is responsible pursuant to
Section 13.1(b).
 13.6 RESOLUTION OF DISPUTES. Sprint and Embarq will cooperate with each other in carrying out their respective
obligations under this Section 13 and applicable workers’ compensation laws. Any disputes which Sprint and Embarq cannot resolve shall initially be presented in writing to the Treasurer of Sprint and the Treasurer of Embarq for resolution,
before initiating the dispute resolution provisions of Article 7 of the Separation and Distribution Agreement. 
 SECTION 14

 SEPARATION PLAN AND VOLUNTARY SEPARATION PLAN 
 14.1 ESTABLISHMENT OF EMBARQ SEPARATION PLANS. Effective as of the Distribution Date, Embarq shall adopt (i) the Embarq Separation Plan for those Embarq Employees who, immediately prior to the Distribution Date, were
eligible to participate in the Sprint Separation Plan and which shall provide the same benefits as the Sprint Separation Plan and (ii) the Embarq Voluntary Separation Plan for all Embarq Employees who, immediately prior to the Distribution Date,
were eligible to participate in the Sprint Voluntary Separation Plan and which shall provide the same benefits as the Sprint Voluntary Separation Plan (the Embarq Separation Plan and the Embarq Voluntary Separation Plan shall be referred to
individually as an “Embarq Separation Plan” and collectively as the “Embarq Separation Plans”). 
 14.2
ASSUMPTION OF SEVERANCE LIABILITIES. Effective as of the Distribution Date, Embarq shall assume or retain, as applicable, responsibility for all Liabilities and fully perform, pay and discharge all obligations, when such obligations become due,
relating to any unpaid severance benefit to which an Embarq Participant remains entitled under the Sprint Separation Plans on the Distribution Date. 
 14.3 SEVERANCE BENEFITS. If an Embarq Participant or Delayed Transfer Employee becomes eligible to receive a severance benefit pursuant to an Embarq Separation Plan during the period commencing on the Distribution
Date and ending on the first anniversary of the Distribution Date, the applicable Embarq Separation Plan shall provide to such Embarq Participant or Delayed Transfer Employee a severance benefit that is based on the same number of weeks of pay that
such Embarq Participant or Delayed Transfer Employee would have received under the corresponding Sprint Separation Plan as in effect immediately prior to the Distribution Date. 
 14.4 EFFECT OF THE SEPARATION ON SEVERANCE. Except as otherwise expressly provided for in this Agreement, Sprint and Embarq acknowledge and agree that
the 
  

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 transactions contemplated by the Separation and Distribution Agreement will not cause any Embarq Participant to be
entitled to benefits under any policy, plan, program or agreement of Sprint or Embarq or any member of the Sprint Group or Embarq Group that provides for the payment of severance or similar benefits in the event of a termination of employment.

 SECTION 15 
 CASH
RETENTION PLAN 
 Embarq hereby acknowledges and agrees that it shall have full responsibility with respect to any Liabilities to Embarq
Employees, Former Embarq Employees and Delayed Transfer Employees who are transferred to the Embarq Group prior to August 12, 2006, arising out of or relating to the arrangements listed on Schedule H to this Agreement, which were not
otherwise satisfied as of the Distribution Date or, for a Delayed Transfer Employee, his or her Transfer Date. Sprint agrees to retain all Liabilities related to cash retention payments for each Delayed Transfer Employee whose Transfer Date is on or
after August 12, 2006. 
 SECTION 16 
 ANNUAL INCENTIVE PLANS 
 Sprint shall be responsible for all Liabilities and fully perform, pay and
discharge all annual bonus obligations relating to any annual incentive plan for Sprint Employees for 2006 and thereafter, and Embarq shall be responsible for all Liabilities and fully perform, pay and discharge all annual bonus obligations,
relating to any annual incentive plan for Embarq Employees for 2006 and thereafter. As for each Delayed Transfer Employee, (a) Sprint shall be responsible for all Liabilities and fully perform, pay and discharge all annual bonus
obligations to such individual relating to any annual incentive plan for Sprint Employees for (i) any calendar year which comes before such individual’s Transfer Date and (ii) for any part of a calendar year which includes such
individual’s Transfer Date if such individual is still an employee of Embarq or any member of the Embarq Group at the end of such calendar year, (b) Embarq shall be responsible for all Liabilities and fully perform, pay and discharge all
annual bonus obligations to such individual relating to any annual incentive plan for Embarq Employees for the remainder of such calendar year and (c) the bonus, if any, payable by Sprint and by Embarq for any calendar year shall be a pro-rata
part of the annual bonus which would have been payable if the Delayed Transfer Employee had been employed by Sprint or by Embarq for the entire calendar year, pro-rated with respect to his or her employment with Sprint based on Sprint’s then
generally applicable pro-rate policy when payment is made and pro-rated with respect to his or her employment with Embarq based on Embarq’s then generally applicable pro-rate policy when payment is made. Notwithstanding the foregoing, in no
event shall a Person receive a duplication of benefits under this Section 16. 
  

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 SECTION 17 
 EQUITY INCENTIVE PLANS 
 17.1 EQUITY INCENTIVE AWARDS. This Section 17 sets forth obligations
and agreements between the Parties with respect to the treatment of outstanding equity incentive awards under the Sprint Stock Plans as of the Distribution Time. Notwithstanding anything in this Agreement to the contrary (including, without
limitation, Section 2.2), (a) Sprint shall treat employment by Embarq and each member of the Embarq Group as employment by Sprint under the Sprint Stock Plans with respect to outstanding Sprint Restricted Stock grants and Sprint RSU grants
which are held by Embarq Employees and Delayed Transfer Employees (or which are held by Sprint Employees who, after the Distribution Time, with the consent of Sprint transfer to Embarq or any member of the Embarq Group) and (b) Embarq shall
treat employment by Sprint and each member of the Sprint Group as employment by Embarq under the Embarq Equity Incentive Plan with respect to Embarq Restricted Stock grants and Embarq RSU grants which are held by Sprint Employees (or which are held
by Embarq Employees or Delayed Transfer Employees who, after the Distribution Time or their respective Transfer Date, as applicable, with the consent of Embarq return to employment by Sprint or any member of the Sprint Group). 
 17.2 TREATMENT OF OUTSTANDING SPRINT OPTIONS. 
 (a) Sprint Employees. Each option to purchase shares of Sprint Common Stock (each, a “Sprint Option”) outstanding under the Sprint Stock Plans at the Distribution Time which is held by (i) any Person other than
an Embarq Employee or (ii) any Embarq Employee who is on serial severance shall remain an option to purchase Sprint Common Stock issued under the Sprint Stock Plans (each such option, a “Remaining Sprint Option”). Each
Remaining Sprint Option shall be subject to the same terms and conditions after the Distribution as the terms and conditions applicable to the corresponding Sprint Option immediately prior to the Distribution. The exercise price and number of shares
subject to each Remaining Sprint Option shall be adjusted by action of the Sprint Committee under the applicable Sprint Stock Plan as follows: (i) the number of shares of Sprint Common Stock subject to each such Remaining Sprint Option shall be
equal to the product of (x) the number of shares of Sprint Common Stock subject to the corresponding Sprint Option immediately prior to the Distribution Time and (y) the Sprint Share Ratio, with fractional shares rounded down to the
nearest whole share and (ii) the per-share exercise price of each such Remaining Sprint Option shall be equal to the product of (x) the per-share exercise price of the corresponding Sprint Option immediately prior to the Distribution Time
and (y) the Sprint Price Ratio, rounded up to the nearest whole cent. 
 (b) Embarq Employees. Each Sprint Option outstanding
under the Sprint Stock Plans which is held by an Embarq Employee at the Distribution Time (other than an Embarq Employee who is on serial severance) shall be converted as of the Distribution Time into an option to purchase shares of Embarq Common
Stock (each such option, an “Embarq Option”) pursuant to the terms of the Embarq Equity Incentive Plan subject to terms and conditions after the Distribution that are substantially similar to (to the extent practicable) the terms
and conditions applicable to the corresponding Sprint Option immediately prior to the Distribution. Subject to Section 17.2(d), the exercise price and number of shares subject to such Embarq Option shall be 
  

 29 

 determined as follows: (i) the number of shares of Embarq Common Stock subject to each such Embarq Option shall be
equal to the product of (x) the number of shares of Sprint Common Stock subject to the corresponding Sprint Option immediately prior to the Distribution Time and (y) the Embarq Share Ratio, with fractional shares rounded down to the
nearest whole share and (ii) the per-share exercise price of each such Embarq Option shall be equal to the product of (x) the per-share exercise price of the corresponding Sprint Option immediately prior to the Distribution Time and
(y) the Embarq Price Ratio, rounded up to the nearest whole cent. 
 (c) Delayed Transfer Employees. 
 (i) Each Sprint Option held by a Delayed Transfer Employee at the Distribution Time shall be adjusted under Section 17.2(a) on the same basis as any
other Sprint Option. 
 (ii) Each Remaining Sprint Option outstanding under the Sprint Stock Plans held by a Delayed Transfer Employee on
such Delayed Transfer Employee’s Transfer Date shall be converted as of such Transfer Date into an option to purchase shares of Embarq Common Stock (each such option, a “Delayed Transfer Embarq Option”) pursuant to the terms of
the Embarq Equity Incentive Plan subject to terms and conditions after such Delayed Transfer Employee’s Transfer Date that are substantially similar to (to the extent practicable) the terms and conditions applicable to the corresponding
Remaining Sprint Option immediately prior to such Delayed Transfer Employee’s Transfer Date. Subject to Section 17.2(d), the exercise price and number of shares subject to such Delayed Transfer Embarq Option shall be determined as follows:
(i) the number of shares of Embarq Common Stock subject to each such Delayed Transfer Embarq Option shall be equal to the product of (x) the number of shares of Sprint Common Stock subject to the corresponding Remaining Sprint Option
immediately prior to such Delayed Transfer Employee’s Transfer Date and (y) the Delayed Share Ratio, with fractional shares rounded down to the nearest whole share and (ii) the per-share exercise price of each such Delayed Transfer
Embarq Option shall be equal to the product of (x) the per-share exercise price of the corresponding Remaining Sprint Option immediately prior to such Delayed Transfer Employee’s Transfer Date and (y) the Delayed Price Ratio, rounded
up to the nearest whole cent. 
 (d) 409A. The Parties agree that (notwithstanding the conversion formula set forth in
Section 17.2(b) and Section 17.2(c)(ii)) the Embarq Committee shall have the discretion, subject to the terms of the Tax Sharing Agreement, to effect option conversions under Section 17.2(b) and Section 17.2(c)(ii) using an
alternative option conversion formula which satisfies the requirements of Section 409A of the Code if the Embarq Committee determines that such alternative option conversion formula may reduce shareholder dilution or otherwise would be in
Embarq’s best interest, provided that such alternative option conversion formula (i) is consistent with the terms of the applicable equity plan and (ii) does not cause the option to become subject to taxation under Section 409A
of the Code. 
 (e) Restriction on Exercisability of Options. The Parties acknowledge and agree that blackout periods may be
implemented with respect to the Remaining Sprint Options, the Embarq Options and the Delayed Transfer Embarq Options for administrative reasons in accordance with the terms of the Sprint Stock Plans or the Embarq Equity Incentive Plan, as
applicable. 
  

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 17.3 TREATMENT OF OUTSTANDING SPRINT RESTRICTED STOCK. 
 Each Person who holds shares of Sprint Restricted Stock outstanding under a Sprint Stock Plan as of the Distribution Time shall continue to hold such
shares of Sprint Restricted Stock and, in addition, shall receive a dividend of Embarq Common Stock and, except as provided in the next sentence, such Person shall be treated in the same manner at the Distribution Time as any other holder of
outstanding shares of Sprint Common Stock. Except as otherwise expressly provided in any written agreement entered into prior to January 1, 2006 between Sprint and any Person who holds Sprint Restricted Stock, the Embarq Restricted Stock shall
(to the extent practicable) be subject to the same terms, conditions and restrictions as the related Sprint Restricted Stock. If a share of Embarq Restricted Stock is forfeited, such share of stock shall revert to Embarq. If a share of Sprint
Restricted Stock is forfeited, such share of stock shall revert to Sprint. 
 17.4 TREATMENT OF OUTSTANDING RESTRICTED STOCK UNITS.

 (a) General Rule. Except as provided for under Section 17.4(b) or Section 17.4(c), each Person who holds a Sprint RSU
(other than an Outstanding Founders’ Grant) which is outstanding under a Sprint Stock Plan as of the Distribution Time shall continue to hold such Sprint RSU and, in addition, shall (in lieu of any award related to Embarq Common Stock made
pursuant to the terms of his or her Sprint RSU award) receive (i) a restricted stock unit award under the Embarq Equity Incentive Plan (each, an “Embarq RSU”) which reflects the number of shares of Embarq Common Stock that such
Person would have received at the Distribution if such Person’s Sprint RSU had been Sprint Restricted Stock, rounded down to the nearest whole share, and (ii) cash from Embarq in lieu of a fractional Embarq RSU. Each such Embarq RSU grant
shall (to the extent practicable) be made subject to the same terms, conditions and restrictions after the Distribution Time as the terms, conditions and restrictions applicable to the corresponding Sprint RSU immediately prior to the Distribution
Time. 
 (b) Legacy Nextel Employee. As of the Distribution Time, the number of Deferred Shares that are held by a Person who
was employed by Nextel Communications, Inc. or one of its Subsidiaries on or before August 12, 2005 (a “Legacy Nextel Employee”) shall be adjusted in accordance with the terms of the Nextel Equity Plan such that the number of
Deferred Shares held by such Legacy Nextel Employee as of the Distribution Time equals the product of (x) the number of Deferred Shares held by him or her immediately prior to the Distribution Time, multiplied by (y) the Sprint Share
Ratio, rounded down to the nearest whole unit, plus cash from Sprint in lieu of a fractional Deferred Share. 
 (c) Specified
Embarq Executive. The Sprint RSUs (other than Outstanding Founders’ Grants) that, as of the Distribution Time, are held by any Embarq Employee who is, or as of the Distribution Time will become, a senior executive officer or director of
Embarq, and whose award agreement for such Sprint RSUs specifically contemplates the conversion of such Sprint RSUs into Embarq RSUs as of the Distribution Time (each such person, a “Specified Embarq Executive”) shall be converted
into that number of Embarq RSUs equal to the product of (x) the number of Sprint RSUs held by him or her immediately prior to the Distribution Time, multiplied by (y) the Embarq Share Ratio, rounded down to the nearest whole unit, plus
cash from Embarq in lieu of a fractional Embarq RSU. 
  

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 17.5 LIABILITIES FOR SETTLEMENT OF AWARDS. 
 (a) Settlement of Outstanding Sprint Restricted Stock. Sprint shall be responsible for all Liabilities associated with Sprint Restricted Stock
(regardless of the holder of such awards) including any share delivery, registration or other obligations related to the settlement of the Sprint Restricted Stock award. 
 (b) Settlement of Outstanding Embarq Restricted Stock. Embarq shall be responsible for all Liabilities associated with Embarq Restricted Stock (regardless of the holder of such awards) including any share
delivery, registration or other obligations related to the settlement of the Embarq Restricted Stock award. 
 (c) Settlement of
Outstanding Sprint RSUs. Sprint shall (subject to Section 18) be responsible for all Liabilities associated with Sprint RSUs (regardless of the holder of such awards) including any share delivery, registration or other obligations related
to the settlement of Sprint RSUs. 
 (d) Settlement of Outstanding Embarq RSUs. Embarq shall be responsible for all Liabilities
associated with Embarq RSUs (regardless of the holder of such awards) including any share delivery, registration or other obligations related to the settlement of the Embarq RSUs. 
 (e) Settlement of Sprint Options. Sprint shall be responsible for all Liabilities associated with Sprint Options (regardless of the holder of such
awards) including any option exercise, share delivery, registration or other obligations related to the exercise of the Sprint Options. 
 (f) Settlement of Embarq Options. Embarq shall be responsible for all Liabilities associated with Embarq Options (regardless of the holder of such awards) including any option exercise, share delivery, registration or other
obligations related to the exercise of the Embarq Options. 
 (g) Tax Responsibilities. The Parties do not intend that this
Section 17.5 have any effect on the allocation of tax benefits and tax withholding and reporting responsibilities as set forth in Schedule I to this Agreement. 
 17.6 DETRIMENTAL CONDUCT PROVISIONS. The Parties hereby acknowledge that any Detrimental Conduct Provisions applicable to any Sprint Employee, Embarq Employee, Former Embarq Employee, Former Sprint Employee or Delayed
Transfer Employee with respect to Sprint Options, Sprint Restricted Stock, Sprint RSUs, Embarq Restricted Stock and Embarq RSUs shall continue in full force and effect following the Distribution. In addition, each Party agrees to use commercially
reasonable efforts to provide the other Party with any Information reasonably requested by the other Party in connection with the enforcement of such Detrimental Conduct Provisions; provided, however (i) with respect to any Embarq Employee holding
Sprint 
  

 32 

 Options which were adjusted pursuant to Section 17.2(a) of this Agreement and any Embarq Employee or Delayed
Transfer Employee holding Sprint RSUs or Sprint Restricted Stock, and (ii) with respect to any Sprint Employee or Former Sprint Employee holding Embarq RSUs or Embarq Restricted Stock, each Party hereby waives any violation of the Detrimental
Conduct Provisions that may affect such aforementioned equity awards held by such respective persons that would otherwise be caused by (A) any theory that an Embarq Employee or Delayed Transfer Employee is in competition with Sprint or a member
of the Sprint Group solely because he or she becomes associated with, employed by, renders services to, or owns any interest in Embarq or a member of the Embarq Group and (B) any theory that a Sprint Employee is in competition with Embarq or a
member of the Embarq Group solely because he or she becomes associated with, employed by, renders services to, or owns any interest in Sprint or a member of the Sprint Group. The Parties acknowledge that Former Sprint Employees and Former Embarq
Employees are not in competition with Embarq or Sprint, respectively, solely by reason of their status as a Former Sprint Employee or Former Embarq Employee. 
 17.7 SEC REGISTRATION. The Parties mutually agree to use commercially reasonable efforts to maintain effective registration statements with the SEC with respect to the long-term incentive awards described in this
Section 17, to the extent any such registration statement is required by applicable Law. Sprint shall be responsible for taking all appropriate action to continue to maintain and administer the Sprint Stock Plans and the awards granted
thereunder so that they comply with applicable Law, including, without limitation, continued compliance with, and qualification under, Section 16 of the Securities Exchange Act of 1934, as amended and the registration requirements under the
Securities Act of 1933. Embarq shall be responsible for taking all appropriate action (a) to adopt and administer the Embarq Equity Incentive Plan and the awards granted thereunder (including by way of conversion pursuant to
Section 17.2(b) or 17.2(c)(ii) of this Agreement) so that it and they comply with applicable Law, including, without limitation, compliance with, and qualification under, Section 16 of the Securities Exchange Act of 1934, as amended, and
(b) to register the shares for issuance under the Embarq Equity Incentive Plan or any other equity-based plan of Embarq (including shares acquired by conversion pursuant to Section 17.2(b) or 17.2(c)(ii) of this Agreement), including the
filing of a registration statement on an appropriate form with the U.S. Securities and Exchange Commission. 
 17.8 EMBARQ EMPLOYEES. Subject
to the terms of the Tax Sharing Agreement, the Embarq Committee shall have full discretion to grant options to purchase Embarq Common Stock, award restricted stock or restricted stock units of Embarq or grant other forms of compensation that are
derived from the value of the equity of Embarq, provided that the exercise of such discretion does not cause a materially adverse tax or accounting effect on Sprint or any member of the Sprint Group. 
 SECTION 18 
 OUTSTANDING
FOUNDERS’ GRANTS 
 Sprint shall retain responsibility for all Liabilities and fully perform, pay and discharge all obligations in
cash, when such obligations become due, relating to and under the terms of the 
  

 33 

 Outstanding Founders’ Grants held, as of the Distribution Date by members of Embarq’s Board of Directors and
Embarq Participants, and held, as of their respective Transfer Date, by each Delayed Transfer Employee, and Embarq shall reimburse Sprint for such payments made to members of Embarq’s Board of Directors, Embarq Participants and Delayed Transfer
Employees. 
 SECTION 19 
 CAROLINA VEBA AND TEXAS TRUST 
 19.1 CAROLINA VEBA. Carolina Telephone and Telegraph Company, a subsidiary of Embarq,
sponsors the Carolina Telephone and Telegraph Company Voluntary Employee Beneficiary Association (the “VEBA”), the assets of which are held in a trust which is a part of the VEBA (the “VEBA Trust”). The sponsorship
of the VEBA and the VEBA Trust will remain with Carolina Telephone and Telegraph Company following the Distribution Date. All Liabilities associated with any Sprint Employee participating in the VEBA shall be assumed by Sprint. No portion of the
VEBA Trust shall be transferred to Sprint. 
 19.2 TEXAS TRUST. United Telephone Company of Texas, a subsidiary of Embarq, sponsors the
Sprint Corporation Post-Retirement Trust, a trust which is a welfare benefit fund described in Section 419 of the Code. The sponsorship of this trust will remain with United Telephone Company of Texas following the Distribution
Date. No portion of the assets of this trust will be transferred to Sprint. 
 SECTION 20 
 PAID TIME OFF AND PAYROLL 
 20.1 PAID
TIME OFF. Effective as of the Distribution Date for Embarq Employees and effective as of the Transfer Date for each Delayed Transfer Employee, Embarq shall, or shall have caused one or more members of the Embarq Group, to assume all Liabilities for
vacation time, sick time and other time-off benefits with respect to such individuals, in each case, regardless of whether such Liabilities relate to claims incurred before, on or after the Distribution Date or, where applicable, a Transfer Date,
and Embarq agrees to pay, perform and discharge all such Liabilities. Effective as of the Distribution Date, Embarq shall credit each Embarq Employee with the amount of accrued but unused vacation time, sick time and other time-off benefits pursuant
to this Section 20 as of the Distribution Date, and with respect to each Delayed Transfer Employee, his or her accruals as of his or her Transfer Date. Notwithstanding the forgoing, Embarq shall not be required to credit any Embarq Employee or
Delayed Transfer Employee with any accrual to the extent that a benefit attributable to such accrual is provided by the Sprint Group. 
 20.2
PAYROLL. If there are any Liabilities for accrued salary or wages on Sprint’s payroll books and records for an Embarq Employee on the Distribution Date, Embarq shall assume and discharge such Liabilities with respect to such Embarq Employee as
of the Distribution Date. If there are any Liabilities for accrued salary or wages on Sprint’s payroll books and records for a Delayed Transfer Employee on his or her Transfer Date, Sprint shall retain and discharge such Liabilities as of his
or her Transfer Date. 
  

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 SECTION 21 
 TAX AND ADMINISTRATIVE MATTERS 
 Schedule I sets forth the agreement of the Parties with respect to
the treatment for certain tax and administrative purposes of the matters which are subject to this Agreement. 
 SECTION 22 

INDEMNIFICATION 
 Article 6 of
the Separation and Distribution Agreement shall apply to this Agreement as if such Article 6 were set forth in this Agreement. 
 SECTION
23 
 GENERAL AND ADMINISTRATIVE 
 23.1 SHARING OF INFORMATION. Sprint and Embarq (acting directly or through members of the Sprint Group or Embarq Group, respectively) shall provide to the other and their respective agents and vendors all Information
in accordance with Article 5 of the Separation and Distribution Agreement. The Parties also hereby agree to enter into any business associate agreements that may be required for the sharing of any Information pursuant to this Agreement to comply
with the requirements of HIPAA. 
 23.2 TRANSFER OF PERSONNEL RECORDS AND AUTHORIZATIONS. Subject to applicable Law, on the Distribution
Date, Sprint shall transfer and assign to Embarq all personnel records (“Personnel Records”), all immigration documents, including I-9 forms and work authorizations (“Immigration Records”), all payroll deduction authorizations
and elections, whether voluntary or mandated by law, including but not limited to W-4 forms and deductions for benefits such as insurance, FlexCare and retirement savings, charitable giving, and purchases at the fitness center, restaurants or other
merchants on Sprint’s Overland Park campus (“Payroll Forms”), and all short term disability records, Family and Medical Leave Act records, insurance beneficiary designations, FlexCare enrollment confirmations, attendance, and return
to work information (“Benefit Management Records”) relating to Embarq Participants. Sprint shall transfer and assign to Embarq all Personnel Records, Immigration Records, Payroll Forms and Benefit Management Records relating to Delayed
Transfer Employees on the Transfer Date for the Delayed Transfer Employee. Sprint, however, may retain originals of, copies of, or access to Personnel Records, Immigration Records, Payroll Forms and Benefit Management Records as long as necessary to
provide services to Embarq or on its behalf pursuant to a Transition Services 
  

 35 

 Agreement. Immigration Records will, if and as appropriate, become a part of Embarq’s public access file. Embarq
will use Personnel Records, Payroll Forms and Benefit Management Records for all lawful purposes, including calculation of withholdings from wages and personnel management. 
 23.3 REASONABLE EFFORTS/COOPERATION. Each of the Parties will use its commercially reasonable efforts to promptly take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate the transactions contemplated by this Agreement. The provisions of Section 5.07 of the Separation and Distribution
Agreement shall apply to any Action or Third Party claim to which an employee, director, member or Benefit Plan of the Sprint Group or Embarq Group is involved to the extent that such Action or Third Party Claim relates to this Agreement or any such
Benefit Plan. 
 23.4 EMPLOYER RIGHTS. Nothing in this Agreement shall prohibit Embarq or any member of the Embarq Group from amending,
modifying or terminating any Embarq Benefit Plan, at any time within its sole discretion provided that any such amendment, modification or termination shall not relieve Embarq from any obligation herein and shall comply with the requirements of the
Tax Sharing Agreement. Nothing in this Agreement shall prohibit Sprint or any member of the Sprint Group from amending, modifying or terminating any Sprint Benefit Plan, at any time within its sole discretion provided that any such amendment,
modification or termination shall not relieve Sprint from any obligation herein and shall comply with the requirements of the Tax Sharing Agreement. 
 23.5 NO THIRD-PARTY BENEFICIARIES. This Agreement is solely for the benefit of the Parties and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person or Persons any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement, including any Embarq Participant and any Sprint Participant. Furthermore, nothing in this Agreement is
intended (i) to confer upon any employee or former employee of Sprint, Embarq or any member of the Sprint Group or Embarq Group any right to continued employment, or any recall or similar rights to an individual on layoff or any type of
approved leave, or (ii) to be construed to relieve any insurance company of any responsibility for any employee benefit under any Benefit Plan or any other Liability. 
 23.6 CONSENT OF THIRD PARTIES. If any provision of this Agreement is dependent on the consent of any third party and such consent is withheld, the
Parties shall use their reasonable best efforts to implement the applicable provisions of this Agreement to the fullest extent practicable. If any provision of this Agreement cannot be implemented due to the failure of such third party to consent,
the Parties shall negotiate in good faith to implement the provision in a mutually satisfactory manner; provided, however, Embarq shall not have any obligation under this Agreement to Sprint to obtain a novation with respect to obligations which
Sprint or any member of the Sprint Group might have with respect to any Embarq Participant. 
 23.7 BENEFICIARY DESIGNATION/RELEASE OF
INFORMATION/RIGHT TO REIMBURSEMENT. To the extent permitted by applicable Law and except as otherwise 
  

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 provided for in this Agreement, all beneficiary designations, authorizations for the release of Information and rights to
reimbursement made by or relating to Embarq Participants under Sprint Benefit Plans shall be transferred and assigned to and be in full force and effect under the corresponding Embarq Benefit Plans until such beneficiary designations, authorizations
or rights are replaced or revoked by, or no longer apply to, the relevant Embarq Participant. 
 23.8 NOT A CHANGE IN CONTROL. The Parties
acknowledge and agree that the transactions contemplated by the Separation and Distribution Agreement and this Agreement do not constitute a “change in control” for purposes of any Sprint Benefit Plan or Embarq Benefit Plan. 
 23.9 NO NOVATION. The Parties do not intend that any provision of this Agreement or the fact of any individual’s participation in the negotiation of
this Agreement or any individual’s employment by Embarq or any member of the Embarq Group constitute an implied novation with respect to any obligations which Sprint or any member of the Sprint Group might have with respect to such
individual. 
 SECTION 24 
 MISCELLANEOUS 
 24.1 EFFECT IF DISTRIBUTION DOES NOT OCCUR. Notwithstanding anything in this Agreement to the contrary, if
the Separation and Distribution Agreement is terminated prior to the Distribution Date, then all actions and events that are, under this Agreement, to be taken or occur effective immediately prior to, as of or following the Distribution Date, or
otherwise in connection with the Separation, shall not be taken or occur except to the extent specifically agreed to in writing by Sprint and Embarq and neither Party shall have any Liabilities to the other Party under this Agreement. 
 24.2 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed or construed by the Parties or any third party as creating the relationship of
principal and agent, partnership, joint venture or other fiduciary relationship between the Parties, it being understood and agreed that no provision contained herein, and no act of the Parties, shall be deemed to create any relationship between the
Parties other than the relationship set forth in this Agreement. 
 24.3 INDIRECT ACTION. Each of Sprint and Embarq shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed indirectly by such Party or by the Sprint Group or the Embarq Group, respectively. 
 24.4 NOTICES. All notices, requests, claims, demands and other communications under this Agreement shall be provided in accordance with the Notice
provision of the Separation and Distribution Agreement. 
  

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 24.5 ENTIRE AGREEMENT. This Agreement, the Separation and Distribution Agreement, and each other
Ancillary Agreement, including any related annexes, schedules and exhibits, as well as any other agreements and documents referred to in this Agreement and in any such Ancillary Agreement, shall together constitute the entire agreement between the
Parties with respect to the subject matter hereof and thereof and shall supersede all prior negotiations, agreements and understandings of the Parties of any nature, whether oral or written, with respect to such subject matter. 
 24.6 AMENDMENTS AND WAIVERS. This Agreement may not be modified or amended except by an instrument or instruments in writing signed by an authorized
officer of each Party. Except as otherwise provided in this Agreement, any failure of any of the Parties to comply with any obligation, covenant, agreement or condition herein may be waived by the Party entitled to the benefits thereof only by a
written instrument signed by an authorized officer of the Party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. 
 24.7 GOVERNING LAW. This Agreement and any dispute arising out of, in connection with or
relating to this Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware, without giving effect to the conflicts of laws principles thereof. 
 24.8 HEADINGS. The section and other headings contained in this Agreement are inserted for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement. 
 24.9 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall constitute one and the same Agreement. 
 24.10 ASSIGNMENT. This
Agreement may not be assigned by either Party except as provided in the Separation and Distribution Agreement with respect to an assignment under such Separation and Distribution Agreement. 
 24.11 SEVERABILITY. The invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity or enforceability of this
Agreement or of any other term or provision of this Agreement, which shall remain in full force and effect; provided, however, if any term or provision of this Agreement is determined to be invalid or unenforceable, the Parties shall negotiate in
good faith to amend such term or provision so that it will be valid and enforceable. If it is ever held that any restriction hereunder is too broad to permit enforcement of such restriction to its fullest extent, each Party hereby agrees that such
restriction may be enforced to the maximum extent permitted by Law, and each Party hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction. 
  

 38 

 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year
first above written. 
  

			
	 Sprint Nextel Corporation

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	
	
	 Embarq Corporation

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

  

 39

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