EXHIBIT 4
STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (this "Agreement") dated as of July 31, 1995 by and
among SPRINT CORPORATION, a corporation formed under the laws of Kansas
("Sprint"), FRANCE TELECOM, an exploitant public formed under the laws of
France ("FT"), and DEUTSCHE TELEKOM AG, an Aktiengesellschaft formed under the
laws of Germany ("DT");
WITNESSETH:
WHEREAS, Sprint, FT and DT have entered into that certain Investment
Agreement dated as of the date hereof (the "Investment Agreement") pursuant to
which FT and DT have agreed to purchase shares of capital stock of Sprint; and
WHEREAS, as a condition to its entering into the Investment Agreement, Sprint
has required that FT and DT enter into this Agreement, which contains certain
restrictions on purchases of Sprint capital stock by FT and DT and their
respective Affiliates and Associates and certain other limitations on FT and DT
and their respective Affiliates and Associates.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein and in the Other
Agreements, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of FT, DT and Sprint (each a
"Party"), intending to be legally bound, hereby agrees as follows:
ARTICLE 1.
DEFINITIONS AND CONSTRUCTION
Section 1.1. Certain Definitions. As used in this Agreement, the following
terms shall have the meanings specified below:
"Acquisition Proposal" shall have the meaning set forth in Section 8.3(a) of
the Investment Agreement.
"Affiliate" shall mean, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by, or is under common Control with, such Person, provided that (a)
no JV Entity shall be deemed an Affiliate of any Party unless (i) FT, DT and
Atlas own a majority of the Voting Power of such JV Entity and Sprint does not
have the Tie-Breaking Vote (as defined in Section 18.1 of the Joint Venture
Agreement), (ii) FT, DT or Atlas has the Tie-Breaking Vote or (iii) FT, DT or
any of their Affiliates cause such JV Entity to acquire Beneficial Ownership of
any Sprint equity securities; (b) FT, DT and Sprint shall not be deemed
Affiliates of each other; (c) Atlas shall be deemed an Affiliate of FT and DT;
and (d) the term "Affiliate" shall not include any Government Affiliate.
"Aggregate Foreign Ownership Limitation" shall mean the maximum aggregate
percentage of equity interests of Sprint that may be Owned of Record or Voted
by Aliens under Section 310(b)(4) of the Communications Act, without such
ownership or voting resulting in the possible loss, or possible failure to
secure the renewal or reinstatement, of any license or franchise of any
Governmental Authority held by Sprint or any of its Affiliates to conduct any
portion of the business of Sprint or such Affiliate, as such maximum aggregate
percentage may be increased from time to time by amendments to such section or
by waivers granted to Sprint by the FCC or by other determinations of the FCC,
provided that if Section 310(b)(4) is repealed or otherwise made inapplicable
to the ownership of Sprint capital stock by FT and DT, there shall be no
Aggregate Foreign Ownership Limitation.
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"Aliens" shall mean "aliens," "their representatives," "a foreign government
or representatives thereof" or "any corporation organized under the laws of a
foreign country" as such terms are used in Section 310(b)(4) of the
Communications Act.
"Applicable Law" shall mean all applicable provisions of all (a)
constitutions, treaties, statutes, laws (including common law), rules,
regulations, ordinances or codes of any Governmental Authority, and (b) orders,
decisions, injunctions, judgments, awards and decrees of any Governmental
Authority.
"Articles" shall mean the Articles of Incorporation of Sprint, as amended or
supplemented from time to time.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2 under
the Exchange Act, provided that when used to indicate a relationship with FT or
DT or their respective Subsidiaries or Affiliates, the term "Associate" shall
mean (a) in the case of FT, any Person occupying the positions listed on
Schedule A hereto, and (b) in the case of DT, any Person occupying the
positions listed on Schedule B hereto, provided, further, that, in each case,
no Persons occupying any such positions described in clause (a) or (b) hereof
shall be deemed an "Associate" of FT or DT, as the case may be, unless the
Persons occupying all such positions described in clauses (a) and (b) hereof
Beneficially Own, in the aggregate, securities representing more than 0.2% of
the Voting Power of the Company.
"Atlas" shall mean the company to be formed as a societe anonyme under the
laws of Belgium pursuant to the Joint Venture Agreement, dated as of December
15, 1994, as amended, between FT and DT.
"Beneficial Owner" (including, with its correlative meanings, "Beneficially
Own" and "Beneficial Ownership"), with respect to any securities, shall mean
any Person which:
(a) has, or any of whose Affiliates or Associates has, directly or
indirectly, the right to acquire (whether such right is exercisable
immediately or only after the passage of time) such securities pursuant to
any agreement, arrangement or understanding (whether or not in writing),
including pursuant to the Investment Agreement and the Stockholders'
Agreement, or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise;
(b) has, or any of whose Affiliates or Associates has, directly or
indirectly, the right to vote or dispose of (whether such right is
exercisable immediately or only after the passage of time) or "beneficial
ownership" of (as determined pursuant to Rule 13d-3 under the Exchange Act
as in effect on the date hereof but including all such securities which a
Person has the right to acquire beneficial ownership of, whether or not
such right is exercisable within the 60-day period specified therein) such
securities, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); or
(c) has, or any of whose Affiliates or Associates has, any agreement,
arrangement or understanding (whether or not in writing) for the purpose of
acquiring, holding, voting or disposing of any securities which are
Beneficially Owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof),
provided that Class A Stock and Common Stock held by one of FT or DT or its
Affiliates or Associates shall not also be deemed to be Beneficially Owned by
the other of FT or DT or its Affiliates or Associates.
"Business Day" shall have the meaning set forth in Article I of the
Investment Agreement.
"Change of Control" shall have the meaning set forth in Article I of the
Investment Agreement.
"Class A Common Stock" shall mean the Class A Common Stock of Sprint.
"Class A Preference Stock" shall mean the Class A Preference Stock of Sprint.
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"Class A Stock" shall mean the Class A Common Stock or, if shares of the
Class A Preference Stock are outstanding, the Class A Preference Stock.
"Class A Provisions" shall mean that portion of ARTICLE SIXTH of the Articles
entitled "GENERAL PROVISIONS RELATING TO CLASS A STOCK," which will be included
in an amendment to the Articles to be filed on or before the First Closing.
"Common Stock" shall mean the Common Stock, par value U.S. $2.50 per share,
of Sprint.
"Communications Act" shall mean the United States Communications Act of 1934
and the rules and regulations thereunder.
"Control" (including, with its correlative meanings, "Controlled by" and
"under common Control with") shall mean, with respect to a Person or Group:
(a) ownership by such Person or Group of Votes entitling it to exercise
in the aggregate more than 50 percent of the Voting Power of the entity in
question; or
(b) possession by such Person or Group of the power, directly or
indirectly, (i) to elect a majority of the board of directors (or
equivalent governing body) of the entity in question; or (ii) to direct or
cause the direction of the management and policies of or with respect to
the entity in question, whether through ownership of securities, by
contract or otherwise.
"DT" shall have the meaning set forth in the introductory paragraph of this
Agreement.
"DT Investor Confidentiality Agreement" shall have the meaning set forth in
Article I of the Investment Agreement.
"Exchange Act" shall mean the United States Securities Exchange Act of 1934
and the rules and regulations thereunder.
"FCC" shall mean the United States Federal Communications Commission.
"First Closing" shall have the meaning set forth in Section 2.1(a) of the
Investment Agreement.
"France" shall mean the Republic of France, including French Guiana,
Guadeloupe, Martinique and Reunion, and its territories and possessions.
"FT" shall have the meaning set forth in the introductory paragraph of this
Agreement.
"FT Investor Confidentiality Agreement" shall have the meaning set forth in
Article I of the Investment Agreement.
"Germany" shall mean the Federal Republic of Germany.
"Government Affiliate" shall mean any Governmental Authority of France or
Germany or any other Person Controlled, directly or indirectly (other than by
virtue of a government's inherent regulatory or statutory powers to control
persons or entities within its jurisdiction), by any such Governmental
Authority, provided that FT, DT, Atlas and any other Person directly, or
indirectly through one or more intermediaries, Controlled by FT, DT or Atlas
shall not be Government Affiliates.
"Governmental Authority" shall mean any federation, nation, state, sovereign,
or government, any federal, supranational, regional, state, local or political
subdivision, any governmental or administrative body, instrumentality,
department or agency or any court, administrative hearing body, arbitration
tribunal, commission or other similar dispute resolving panel or body, and any
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of a government, provided that the term "Governmental
Authority" shall not include FT, DT or Atlas or any of their respective
Subsidiaries.
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"Group" shall mean any group within the meaning of Section 13(d)(3) of the
Exchange Act as in effect on the date hereof.
"Initial Percentage Limitation" shall have the meaning set forth in Section
2.1(a)(ii), as adjusted pursuant to Section 2.2(a).
"Initial Standstill Period" shall have the meaning set forth in Section
2.1(a)(ii).
"Investment Agreement" shall have the meaning set forth in the Recitals.
"Investment Completion Date" shall have the meaning set forth in Article I of
the Investment Agreement.
"Joint Venture" shall have the meaning set forth in Article I of the
Investment Agreement.
"Joint Venture Agreement" shall mean that certain Joint Venture Agreement,
dated as of June 22, 1995, among FT, DT, Sprint and Sprint Global Venture, Inc.
"Joint Venture Documents" shall have the meaning set forth in Article I of
the Investment Agreement.
"JV Entity" shall have the meaning set forth in Article I of the Investment
Agreement.
"Largest Other Holder" shall mean the Other Holder, if any, who Beneficially
Owns a larger percentage of the Outstanding Sprint Voting Securities than any
other Person, provided that, for purposes of this definition, FT, DT, their
Affiliates and Associates and Qualified Stock Purchasers shall be considered a
single Person.
"Major Competitor" shall have the meaning set forth in Article I of the
Investment Agreement.
"Other Agreements" shall mean the Investment Agreement, the Stockholders'
Agreement, the Registration Rights Agreement, the FT Investor Confidentiality
Agreement and the DT Investor Confidentiality Agreement.
"Other Holder" shall mean any Person other than (i) FT, DT, any of their
respective Affiliates or Associates or any Qualified Stock Purchaser, (ii)
Sprint, (iii) any Subsidiary of Sprint, (iv) any employee benefit plan of
Sprint or of any Subsidiary of Sprint, or (v) any Person organized, appointed
or established by Sprint or any Subsidiary of Sprint for or pursuant to the
terms of any such plan.
"Outstanding Sprint Voting Securities" shall mean the Sprint Voting
Securities outstanding as of any particular date, plus all Sprint Voting
Securities which as of such date any of FT or DT or any of their respective
Affiliates is committed to acquire from Sprint or has the right to acquire (or
to commit to acquire) from Sprint pursuant to the Investment Agreement and the
Stockholders' Agreement.
"Owned of Record or Voted by" shall have the meaning specified in Section
310(b)(4) of the Communications Act and published interpretations thereof by
the FCC and the U.S. federal courts.
"Passive Financial Institution" shall mean a bank (or comparable financial
institution), insurance company, pension or retirement fund which acquires
Voting Securities or other equity interests in a Qualified Subsidiary not with
the purpose or effect of changing or influencing the control of the Qualified
Subsidiary or Sprint, nor in connection with or as a participant in any
transaction having such purpose or effect; provided that the term "Passive
Financial Institution" shall not include any Major Competitor of Sprint or of
the Joint Venture.
"Percentage Limitation" shall have the meaning set forth in Section
2.1(a)(iii), as adjusted pursuant to Section 2.2(a).
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"Percentage Limitation Adjustment Event" shall mean the acquisition by an
Other Holder of Beneficial Ownership of Outstanding Sprint Voting Securities in
excess of the applicable Percentage Limitation, unless any of FT, DT or any
Qualified Subsidiary shall have breached any of the provisions of Section 3.1
or 3.2 of this Agreement or any corresponding provision of any Qualified
Subsidiary Standstill Agreement and such breach resulted in, or was intended to
facilitate, such Other Holder's acquisition of Beneficial Ownership of
Outstanding Sprint Voting Securities in excess of the applicable Percentage
Limitation.
"Percentage Ownership Interest" shall mean, with respect to any Person, that
percentage of the Voting Power of Sprint represented by Votes associated with
the Sprint Voting Securities owned of record by such Person or by its nominees.
"Person" shall mean an individual, a partnership, an association, a joint
venture, a corporation, a business, a trust, any entity organized under
Applicable Law, an unincorporated organization or any Governmental Authority.
"Qualified Stock Purchaser" shall have the meaning set forth in Article I of
the Stockholders' Agreement.
"Qualified Stock Purchaser Standstill Agreement" shall mean a Standstill
Agreement in form and substance satisfactory to Sprint, FT and DT.
"Qualified Subsidiary" shall have the meaning set forth in Article I of the
Investment Agreement.
"Qualified Subsidiary Standstill Agreement" shall mean a Standstill Agreement
in the form of Exhibit A.
"Registration Rights Agreement" shall have the meaning set forth in Article I
of the Investment Agreement.
"Related Company" shall mean any Person not Controlled by FT or DT, but in
which FT, DT and their respective Affiliates and Associates, individually or in
the aggregate, directly or indirectly through one or more intermediaries, own
securities entitling them to exercise in the aggregate more than 35 percent of
the Voting Power of such Person.
"SEC" shall mean the United States Securities and Exchange Commission.
"Section 3(b)(v) Conversion" shall mean the conversion of all of the
outstanding shares of Class A Preference Stock into Class A Common Stock or
Common Stock pursuant to Section 3(b)(v) of the Class A Provisions.
"Section 3(b)(v) Conversion Date" shall mean the date of the Section 3(b)(v)
Conversion.
"Sprint" shall have the meaning set forth in the introductory paragraph of
this Agreement.
"Sprint Rights Plan" shall mean the Rights Agreement dated as of August 8,
1989, as amended, between Sprint and UMB Bank, n.a., as rights agent.
"Sprint Voting Securities" shall mean the Common Stock, the Class A Stock and
any other securities of Sprint having the right to Vote.
"Stockholders' Agreement" shall have the meaning set forth in Article I of
the Investment Agreement.
"Strategic Investor" shall mean any Person which owns directly any equity
interests in a Qualified Subsidiary, other than FT, DT, any wholly owned
Subsidiary of FT or DT or a Passive Financial Institution.
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"Strategic Investor Standstill Agreement" shall mean a Standstill Agreement
in the form of Exhibit B.
"Strategic Merger" shall have the meaning set forth in Article I of the
Investment Agreement.
"Subsequent Percentage Limitation" shall have the meaning set forth in
Section 2.1(a)(iii), as adjusted pursuant to Section 2.2(a).
"Subsidiary" shall mean, with respect to any Person (the "Parent"), any other
Person in which the Parent, one or more Subsidiaries of the Parent, or the
Parent and one or more of its Subsidiaries (a) have the ability, through
ownership of securities individually or as a group, ordinarily, in the absence
of contingencies, to elect a majority of the directors (or individuals
performing similar functions) of such other Person, and (b) own more than 50%
of the equity interests, provided that Atlas shall be deemed to be a Subsidiary
of each of FT and DT.
"Vote" shall mean, as to any entity, the ability to cast a vote at a
stockholders' or comparable meeting of such entity with respect to the election
of directors or other members of such entity's governing body, provided that
with respect to Sprint only, the term "Vote" shall mean the ability to exercise
general voting power (as opposed to the exercise of special voting or
disapproval rights such as those set forth in the Class A Provisions) with
respect to matters other than the election of directors at a meeting of the
stockholders of Sprint and shall include the aggregate number of Votes
represented by all Sprint Voting Securities which as of such date any of FT or
DT or any of their respective Affiliates is committed to acquire from Sprint or
has the right to acquire (or to commit to acquire) from Sprint pursuant to the
Investment Agreement and the Stockholders' Agreement.
"Voting Power" shall mean, as to any entity as at any date, the aggregate
number of Votes outstanding as at such date in respect of such entity plus, in
the case of Sprint, the aggregate number of Votes represented by all Sprint
Voting Securities which as of such date any of FT or DT or any of their
respective Affiliates is committed to acquire from Sprint or has the right to
acquire (or to commit to acquire) from Sprint pursuant to the Investment
Agreement and the Stockholders' Agreement.
Section 1.2. Interpretation and Construction of this Agreement. The
definitions in Section 1.1 shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." All references herein to Articles, Sections and
Exhibits shall be deemed to be references to Articles and Sections of, and
Exhibits to, this Agreement unless the context shall otherwise require. The
headings of the Articles and Sections are inserted for convenience of reference
only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement. Unless the context shall otherwise require or
provide, any reference to any agreement or other instrument or statute or
regulation is to such agreement, instrument, statute or regulation as amended
and supplemented from time to time (and, in the case of a statute or
regulation, to any successor provision).
ARTICLE 2.
RESTRICTIONS ON ACQUISITION OF VOTING SECURITIES BY
FT, DT AND THEIR AFFILIATES AND ASSOCIATES
Section 2.1. Acquisition Restrictions.
(a) Subject to Sections 2.2, 2.3 and 2.4, each of FT and DT agrees that it
will not, and will cause each of its respective Affiliates and Associates not
to, directly or indirectly, acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, Beneficial Ownership of:
(i) any Sprint Voting Securities at any time prior to the earlier of (A)
the Investment Completion Date, and (B) the Section 3(b)(v) Conversion
Date, in each case other than as a result of purchases from Sprint
pursuant to the Investment Agreement;
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(ii) if a Section 3(b)(v) Conversion has not occurred, any Sprint Voting
Securities on or following the Investment Completion Date and prior
to the fifteenth anniversary of the date hereof (the "Initial
Standstill Period"), if as a result the Votes represented by the
Sprint Voting Securities Beneficially Owned in the aggregate by FT,
DT and their respective Affiliates and Associates would represent in
the aggregate more than 20% of the Voting Power represented by the
Outstanding Sprint Voting Securities (the "Initial Percentage
Limitation");
(iii) if a Section 3(b)(v) Conversion has not occurred, any Sprint Voting
Securities following the Initial Standstill Period, if as a result
the Votes represented by the Sprint Voting Securities Beneficially
Owned in the aggregate by FT, DT and their respective Affiliates
and Associates would represent in the aggregate more than 30% of
the Voting Power represented by the Outstanding Sprint Voting
Securities (the "Subsequent Percentage Limitation"; the Initial
Percentage Limitation and the Subsequent Percentage Limitation, as
the case may be, also being referred to as the "Percentage
Limitations"), provided that the Sprint Voting Securities
Beneficially Owned in the aggregate by FT and DT and their
respective Affiliates and Associates may not at any time exceed 80%
of the Aggregate Foreign Ownership Limitation;
(iv) if a Section 3(b)(v) Conversion has occurred, any Sprint Voting
Securities on or following the Section 3(b)(v) Conversion Date; or
(v) any Sprint nonvoting equity securities following the date hereof.
(b) In addition to any other restrictions contained herein or in the Joint
Venture Documents, the Parties agree that none of the Parties will cause any JV
Entity to, directly or indirectly, acquire, offer to acquire, or agree to
acquire, by purchase or otherwise, Beneficial Ownership of any equity
securities of Sprint.
Section 2.2. Exception to Purchase Restrictions.
(a) Subject to Section 2.4, if a Percentage Limitation Adjustment Event shall
occur, then the applicable Percentage Limitation shall be increased to the
extent necessary so that Sections 2.1(a)(ii) and 2.1(a)(iii) do not prohibit
FT, DT and their respective Affiliates from acquiring Beneficial Ownership of
additional Sprint Voting Securities such that the Votes represented by the
Sprint Voting Securities Beneficially Owned in the aggregate by FT, DT and
their respective Affiliates and Associates and any Qualified Stock Purchasers
would be equal to (but no greater than) the Votes represented by the Sprint
Voting Securities Beneficially Owned by the Largest Other Holder, after giving
effect to any dilution to such holder resulting from the operation of the
Sprint Rights Plan, provided that the Sprint Voting Securities Beneficially
Owned in the aggregate by FT and DT and their respective Affiliates may not at
any time exceed 80% of the Aggregate Foreign Ownership Limitation.
(b) Subject to Section 2.4, if an acquisition by FT, DT or any of their
respective Affiliates or Associates of Beneficial Ownership of additional
Sprint Voting Securities otherwise permitted by Section 2.1(a)(iii) or 2.2(a)
is prohibited thereunder due to the proviso at the end of such Section, then FT
or DT may assign to one or more non-Alien Qualified Stock Purchasers in
accordance with Section 7.2 of the Stockholders' Agreement their rights under
Section 2.1(a)(iii) or 2.2(a) to purchase in the aggregate the number of shares
of Sprint Voting Securities which equals the number of shares of Sprint Voting
Securities the purchase of which is prohibited by the proviso at the end of
Section 2.1(a)(iii) or Section 2.2(a), as the case may be.
Section 2.3. Effect of Action by Sprint.
(a) Subject to Section 2.3(b), neither FT nor DT shall be deemed in violation
of this Article 2 if the Beneficial Ownership of Sprint Voting Securities by
FT, DT and their respective Affiliates and Associates exceeds the applicable
Percentage Limitation (i) solely as a result of an acquisition of Sprint Voting
Securities by Sprint that, by reducing the number of Outstanding Sprint Voting
Securities, increases the proportionate number of Sprint Voting Securities
Beneficially Owned by FT, DT and their respective Affiliates and Associates, or
(ii) because FT, DT or their respective Affiliates or Associates purchase
shares in excess of the applicable Percentage Limitation in reliance on
information regarding the number of outstanding shares of Sprint provided
directly to any of FT, DT and their respective Affiliates and Associates by
Sprint in response to a request for such information by any of FT, DT and their
respective Affiliates and Associates immediately prior to such purchase.
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(b) Notwithstanding Section 2.3(a), the applicable Percentage Limitation
shall be deemed exceeded if (i) in the case of Section 2.3(a)(i), FT, DT or any
of their respective Affiliates or Associates acquires Beneficial Ownership of
any additional Sprint Voting Securities after it has been notified of an
acquisition of Sprint Voting Securities by Sprint, or (ii) in the case of
Section 2.3(a)(ii), FT, DT or any of their respective Affiliates or Associates
acquires Beneficial Ownership of additional Sprint Voting Securities after it
has been notified that the information regarding the number of outstanding
shares previously provided to it was incorrect and it has been provided by
Sprint with correct information, unless in the case of clause (i) or (ii):
(x) upon the acquisition of Beneficial Ownership of such additional
Sprint Voting Securities, FT, DT and their respective Affiliates and
Associates do not Beneficially Own in the aggregate more than the
applicable Percentage Limitation, or
(y) subject to the rights of Sprint in Section 5.7 of the Stockholders'
Agreement, such acquisition is effected pursuant to (A) the exercise of
equity purchase rights by FT or DT pursuant to the Stockholders' Agreement,
or (B) market purchases which are made solely in lieu of the exercise of
equity purchase rights by FT or DT pursuant to the Stockholders' Agreement
following the issuance of securities by Sprint, so long as (1) either (I)
FT or DT, as the case may be, has irrevocably waived its rights to exercise
the equity purchase rights in respect of which such market purchases are
made in lieu thereof, or (II) the time period for the exercise of such
equity purchase rights has expired without the exercise of such rights, and
(2) following such market purchases, the Percentage Ownership Interest of
FT, DT and their respective Affiliates and Associates does not exceed the
Percentage Ownership Interest of FT, DT and their respective Affiliates and
Associates which would have been in effect had FT, DT and their respective
Affiliates exercised such equity purchase rights.
Section 2.4. Sprint Rights Plan.
(a) Notwithstanding the provisions of Sections 2.1 and 2.2, each of FT and DT
agrees that it will not, and will cause each of its respective Affiliates not
to, directly or indirectly, acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, Beneficial Ownership of any Sprint Voting Securities if
such acquisition would result in FT or DT or any of their respective Affiliates
being deemed an Acquiring Person (as such term is defined in the Sprint Rights
Plan) or result in the occurrence of a Stock Acquisition Date, Distribution
Date, Section 11(a)(ii) Event or Section 13 Event (as such terms are defined in
the Sprint Rights Plan).
(b) If the Sprint Board of Directors amends or waives the provisions of the
Sprint Rights Plan in such a manner to permit an Other Holder to acquire
Beneficial Ownership of Sprint Voting Securities having Votes in excess of the
applicable Percentage Limitation without such acquisition resulting in the
Other Holder being deemed an Acquiring Person or resulting in the occurrence of
a Stock Acquisition Date, Distribution Date, Section 11(a)(ii) Event or Section
13 Event or makes any other changes to the Sprint Rights Plan which would
permit any Other Holder to own Sprint Voting Securities having Votes in excess
of the applicable Percentage Limitation without triggering adverse consequences
under the Sprint Rights Plan to such Other Holder, then Sprint will amend or
waive the provisions of the Sprint Rights Plan so that the Sprint Rights Plan
does not impose any prohibition (including any prohibition on the ownership of
Voting Securities), on FT, DT and their respective Affiliates and Associates
which is more restrictive than the restrictions imposed on any Other Holder.
ARTICLE 3.
OTHER STANDSTILL PROVISIONS; QUORUM
Section 3.1. Standstill Covenants. Each of FT and DT agrees that it will not,
and it will cause each of its respective Affiliates and Associates not to,
directly or indirectly, alone or in concert with others (including with any
Government Affiliate, Related Company or Qualified Stock Purchaser), unless
specifically requested in writing by the Chairman of Sprint or by a resolution
of a majority of the directors of Sprint, take any of the actions set forth
below, except to the extent expressly permitted or provided for by the Other
Agreements and the Joint Venture Documents:
(a) effect, seek, offer, propose (whether publicly or otherwise) or cause
or participate in, or assist any other Person to effect, seek, offer or
propose (whether publicly or otherwise) or participate in:
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(i) any acquisition of Beneficial Ownership of Sprint Voting
Securities or other equity interests in Sprint which would result in a
breach of Article 2 of this Agreement;
(ii) any tender or exchange offer, merger, consolidation, share
exchange or business combination involving Sprint or any material
portion of its business or any purchase of all or any substantial part
of the assets of Sprint or any material portion of its business,
provided that nothing in this clause (ii) shall prohibit discussions by
the Parties in connection with the conduct of the business of the JV
Entities in the manner contemplated by the Joint Venture Documents or
in connection with offers by FT or DT to purchase equity interests
owned by Sprint in the JV Entities;
(iii) any recapitalization, restructuring, liquidation, dissolution
or other extraordinary transaction with respect to Sprint or any
material portion of its business, provided that nothing in this clause
(iii) shall prohibit discussions by the Parties in connection with the
conduct of the business of the JV Entities or in connection with offers
by FT or DT to purchase equity interests owned by Sprint in the JV
Entities; or
(iv) any "solicitation" of "proxies" (as such terms are used in the
proxy rules of the SEC but without regard to the exclusion set forth in
Section 14a-1(l)(2)(iv) from the definition of "solicitation") with
respect to Sprint or any of its Affiliates or any action resulting in
such Person becoming a "participant" in any "election contest" (as such
terms are used in the proxy rules of the SEC) with respect to Sprint or
any of its Affiliates;
(b) propose any matter for submission to a vote of stockholders of Sprint
or any of its Affiliates; provided that nothing in this Section 3.1(b)
shall restrict the manner in which the members of the Board of Directors of
Sprint elected by the holders of Class A Stock may (i) vote on any matter
submitted to such Board, or (ii) participate in deliberations or
discussions of such Board (including making suggestions and raising issues
to the Board, so long as such actions do not otherwise violate any other
provision of this Section 3.1 or Section 3.2) in their capacity as members
of such Board and in no other capacity, including any capacity such persons
serving as directors otherwise may have as a director, officer, employee,
agent or representative of any other Person, including any holder of Class
A Stock;
(c) form, join or participate in a Group with respect to any Sprint
Voting Securities (other than any Group whose members consist solely of FT,
DT, any of their respective Affiliates and Associates and any Qualified
Subsidiaries);
(d) grant any proxy with respect to any Sprint Voting Securities to any
Person not designated by Sprint, except for proxies granted to FT or DT or
Qualified Subsidiaries or to individuals who are officers, employees or
regular agents or advisors of FT or DT or Qualified Subsidiaries who have
received specific instructions from FT, DT or Qualified Subsidiaries, as
the case may be, as to the voting of such Sprint Voting Securities with
respect to the matter or matters for which the proxy is granted;
(e) deposit any Sprint Voting Securities in a voting trust or subject any
Sprint Voting Securities to any arrangement or agreement with respect to
the voting of such Sprint Voting Securities or other agreement having
similar effect, except for agreements solely among FT, DT and any Qualified
Subsidiary;
(f) execute any written stockholder consent with respect to Sprint,
except for written consents executed by such Persons as holders of the
Class A Stock in connection with (i) the election of Class A Directors (as
defined in the Articles), (ii) the approval or disapproval of a Subject
Event, Major Issuance or Major Competitor Transaction (each as defined in
the Articles) during the period in which the holders of the Class A Stock
are entitled to exercise disapproval rights with respect to such matter, or
(iii) any vote by the holders of the Class A Stock with respect to which
such holders are entitled to vote as a class;
(g) take any other action to seek to affect the control of the management
or Board of Directors of Sprint or any of its Affiliates; provided that
nothing in this Section 3.1(g) shall restrict the manner in which the
members of the Board of Directors of Sprint elected by the holders of Class
A Stock may (i) vote on any matter submitted to such Board, or (ii)
participate in deliberations or discussions of such
9
Board (including making suggestions and raising issues to the Board, so
long as such actions do not otherwise violate any other provision of this
Section 3.1 or Section 3.2) in their capacity as members of such Board and
in no other capacity, including any capacity such persons serving as
directors otherwise may have as a director, officer, employee, agent or
representative of any other Person, including any holder of Class A Stock;
(h) enter into any discussions, negotiations, arrangements or
understandings with any Person (including any Government Affiliate, Related
Company or Qualified Stock Purchaser) other than FT, DT, their Affiliates,
Associates and their respective directors, officers, employees, agents or
advisors with respect to any of the foregoing, or advise, assist, encourage
or seek to persuade others to take any action with respect to any of the
foregoing;
(i) disclose to any Person (including any Government Affiliate, Related
Company or Qualified Stock Purchaser) other than FT, DT, their Affiliates,
Associates and their respective directors, officers, employees, agents or
advisors any intention, plan or arrangement inconsistent with the foregoing
or with the restrictions on transfer set forth in Article II of the
Stockholders' Agreement or form any such intention which would result in
FT, DT or any of their respective Affiliates or Associates being required
to make any such disclosure in any filing with a Governmental Authority or
being required by Applicable Law to make a public announcement with respect
thereto; or
(j) request Sprint or any of its Affiliates, directors, officers,
employees, representatives, advisors or agents, directly or indirectly, to
amend or waive in any material respect this Agreement (including this
Section 3.1(j)) or the articles of incorporation or the bylaws of Sprint or
any of its Affiliates.
Section 3.2. Press Releases, Etc. by FT and DT.
(a) Subject to Section 3.2(b), each of FT and DT may issue such press
releases and make such other public communications to the financial community
and to its stockholders and such other public statements made in the ordinary
course relating to its investment in Sprint, in each case as it reasonably
deems appropriate and customary. Prior to making any such press release or
other communication, FT and DT will use reasonable efforts to consult with
Sprint in good faith regarding the form and content of any such communication,
and FT and DT will use reasonable efforts to coordinate any such communication
with any decisions reached by Sprint with respect to disclosures relating to
such matters.
(b) Notwithstanding the provisions of Section 3.2(a), unless required by
Applicable Law, neither FT nor DT, nor any of their respective Affiliates or
Associates, may make any press release, public announcement or other
communication with respect to any of the matters described in Sections 3.1(a),
3.1(b), 3.1(c), 3.1(g), 3.1(h) or 3.1(j) without the prior written consent of
the Chairman of Sprint or by a resolution of a majority of the directors of
Sprint. Nothing in this Section 3.2 shall permit FT or DT to take any action
which would otherwise violate any provision contained in Section 3.1.
Section 3.3. Voting of Sprint Voting Securities. Except as set forth in
Sections 3.1(d), 3.1(e) and 3.1(f), nothing in Section 3.1 shall restrict the
manner in which FT, DT and their respective Affiliates may vote their Sprint
Voting Securities.
Section 3.4. Quorum. Each of FT and DT shall use reasonable efforts to ensure
that they shall be present, and shall use reasonable efforts to cause their
respective Affiliates and Associates owning Sprint Voting Securities to be
present, in each case, in person or by proxy, at all meetings of stockholders
of Sprint so that all Sprint Voting Securities Beneficially Owned by FT and DT
and their respective Affiliates and Associates shall be counted for purposes of
determining the presence of a quorum at such meeting.
Section 3.5. Notice of Proposals Regarding Acquisition Transactions. Each of
FT and DT agrees that it will notify Sprint promptly if any inquiries or
proposals which FT or DT reasonably believes are of substance are received by,
any information is exchanged with respect to, or any negotiations or
substantive discussions are initiated or continued with, FT or DT or any of
their respective Affiliates regarding any Acquisition Proposal involving Sprint
or any purchase of any of the shares of capital stock of Sprint Beneficially
Owned by FT, DT or any of their respective Affiliates pursuant to a tender
offer or exchange offer.
10
ARTICLE 4.
OBLIGATIONS OF OTHER ENTITIES
Section 4.1. Qualified Subsidiaries. FT and DT shall cause each Person which,
as a result of the acquisition of Beneficial Ownership of any Sprint Voting
Securities, would become a Qualified Subsidiary to execute a Qualified
Subsidiary Standstill Agreement prior to and as a condition to the
effectiveness of such acquisition.
Section 4.2. Strategic Investors. FT and DT shall cause each Person which, as
a result of an acquisition of Beneficial Ownership of any equity interest in a
Qualified Subsidiary, would become a Strategic Investor (and any Person who
Beneficially Owns more than 35% of the Voting Power, or otherwise Controls,
such acquiring Person) to execute a Strategic Investor Standstill Agreement
prior to and as a condition to the effectiveness of such acquisition.
ARTICLE 5.
MISCELLANEOUS
Section 5.1. Termination. The provisions of this Agreement shall terminate
(a) on the second anniversary of the date of the termination of the Investment
Agreement but only if such agreement is terminated prior to the First Closing,
or (b) if the Company proceeds with a transaction involving a Change of Control
following the process described in Section 4.1 of the Stockholders' Agreement.
Any termination of the Agreement as provided herein shall be without prejudice
to the rights of any Party arising out of the breach by any other Party of any
provision of this Agreement.
Section 5.2. Notices. All notices and other communications required or
permitted by this Agreement shall be made in writing in the English language
and any such notice or communication shall be deemed delivered when delivered
in person, transmitted by telex or telecopier, or seven days after it has been
sent by air mail, as follows:
FT:
0 xxxxx x'Xxxxxxx
00000 Xxxxx Cedex 15
France
Attention: Executive Vice President, International
Tel: (00-0) 00-00-00-00
Fax: (00-0) 00-00-00-00
with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Attention: Xxxxx Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
DT:
Xxxxxxxxx-Xxxxx-Xxxxx 000
X-00000 Xxxx
Xxxxxxx
Attention: Chief Executive Officer
Tel: 00-000-000-0000
Fax: 00-000-000-0000
11
with a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
U.S.A.
Attention: Xxxxxx Xxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
Sprint:
2330 Shawnee Mission Parkway
East Wing
Westwood, Kansas 66205
U.S.A.
Attention: General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
X.X.X.
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
The Parties shall promptly notify each other in the manner provided in this
Section 5.2 of any change in their respective addresses. A notice of change of
address shall not be deemed to have been given until received by the addressee.
Communications by telex or telecopier also shall be sent concurrently by mail,
but shall in any event be effective as stated above.
Section 5.3. Assignment. No Party will assign this Agreement or any rights,
interests or obligations hereunder, or delegate performance of any of its
obligations hereunder, without the prior written consent of each other Party.
Section 5.4. Entire Agreement. This Agreement, including the Exhibits
attached hereto, embodies the entire agreement and understanding of the Parties
in respect of the subject matter contained herein, provided that this provision
shall not abrogate any other written agreement between the Parties executed
simultaneously with this Agreement. This Agreement supersedes all prior
agreements and understandings between the Parties with respect to such subject
matter.
Section 5.5. Waiver, Amendment, etc. This Agreement may not be amended or
supplemented, and no waivers of or consents to departures from the provisions
hereof shall be effective, unless set forth in a writing signed by, and
delivered to, all the Parties. No failure or delay of any Party in exercising
any power or right under this Agreement will operate as a waiver thereof, nor
will any single or partial exercise of any right or power, or any abandonment
or discontinuance of steps to enforce such right or power, preclude any other
or further exercise thereof or the exercise of any other right or power.
Section 5.6. Binding Agreement; No Third Party Beneficiaries. This Agreement
will be binding upon and inure to the benefit of the Parties and their
successors (including any successor of FT in a privatization) and permitted
assigns. Nothing expressed or implied herein is intended or will be construed
to confer upon
12
or to give to any third party any rights or remedies by virtue hereof. In the
event of a reorganization of FT pursuant to, as a result of or in connection
with, a privatization, the corporation or other entity formed to continue the
business activities of FT shall assume the rights and obligations of FT under
this Agreement.
Section 5.7. Governing Law; Dispute Resolution; Equitable Relief.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE
GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW).
(b) EACH PARTY IRREVOCABLY CONSENTS AND AGREES THAT ANY LEGAL ACTION, SUIT OR
PROCEEDING AGAINST IT WITH RESPECT TO ITS OBLIGATIONS OR LIABILITIES UNDER OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR, IN
THE EVENT (BUT ONLY IN THE EVENT) SUCH COURT DOES NOT HAVE SUBJECT MATTER
JURISDICTION OVER SUCH ACTION, SUIT OR PROCEEDING, IN XXX XXXXXX XX XXX XXXXX
XX XXX XXXX SITTING IN THE CITY OF NEW YORK, AND EACH PARTY HEREBY IRREVOCABLY
ACCEPTS AND SUBMITS TO THE JURISDICTION OF EACH OF THE AFORESAID COURTS IN
PERSONAM, WITH RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING (INCLUDING CLAIMS
FOR INTERIM RELIEF, COUNTERCLAIMS, ACTIONS WITH MULTIPLE DEFENDANTS AND ACTIONS
IN WHICH SUCH PARTY IS IMPLED). EACH PARTY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT THAT IT MAY HAVE TO A JURY TRIAL IN ANY LEGAL ACTION, SUIT OR
PROCEEDING WITH RESPECT TO, OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
(c) EACH OF FT AND DT HEREBY IRREVOCABLY DESIGNATES CT CORPORATION SYSTEM (IN
SUCH CAPACITY, THE "PROCESS AGENT"), WITH XX XXXXXX XX 0000 XXXXXXXX, XXX XXXX,
XXX XXXX 00000, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, FOR AND ON ITS
BEHALF SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR
PROCEEDINGS WITH RESPECT TO THIS AGREEMENT, AND SUCH SERVICE SHALL BE DEEMED
COMPLETE UPON DELIVERY THEREOF TO THE PROCESS AGENT, PROVIDED THAT IN THE CASE
OF ANY SUCH SERVICE UPON THE PROCESS AGENT, THE PARTY EFFECTING SUCH SERVICE
SHALL ALSO DELIVER A COPY THEREOF TO FT AND DT IN THE MANNER PROVIDED IN
SECTION 5.2. FT AND DT SHALL TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO
CONTINUE SAID APPOINTMENT IN FULL FORCE AND EFFECT OR TO APPOINT ANOTHER AGENT
SO THAT FT AND DT WILL AT ALL TIMES HAVE AN AGENT FOR SERVICE OF PROCESS FOR
THE ABOVE PURPOSES IN NEW YORK, NEW YORK. IN THE EVENT OF THE TRANSFER OF ALL
OR SUBSTANTIALLY ALL OF THE ASSETS AND BUSINESS OF THE PROCESS AGENT TO ANY
OTHER CORPORATION BY CONSOLIDATION, MERGER, SALE OF ASSETS OR OTHERWISE, SUCH
OTHER CORPORATION SHALL BE SUBSTITUTED HEREUNDER FOR THE PROCESS AGENT WITH THE
SAME EFFECT AS IF NAMED HEREIN IN PLACE OF CT CORPORATION SYSTEM. EACH OF FT
AND DT FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED AIRMAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS
SET FORTH IN THIS AGREEMENT, SUCH SERVICE OF PROCESS TO BE EFFECTIVE UPON
ACKNOWLEDGMENT OF RECEIPT OF SUCH REGISTERED MAIL. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW. EACH OF FT AND DT EXPRESSLY ACKNOWLEDGES THAT THE FOREGOING
WAIVER IS INTENDED TO BE IRREVOCABLE UNDER THE LAWS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES OF AMERICA.
13
(d) EACH PARTY AGREES THAT MONEY DAMAGES WOULD NOT BE A SUFFICIENT REMEDY FOR
THE OTHER PARTIES FOR ANY BREACH OF THIS AGREEMENT BY IT, AND THAT IN ADDITION
TO ALL OTHER REMEDIES THE OTHER PARTIES MAY HAVE, THEY SHALL BE ENTITLED TO
SPECIFIC PERFORMANCE AND TO INJUNCTIVE OR OTHER EQUITABLE RELIEF AS A REMEDY
FOR ANY SUCH BREACH. EACH PARTY AGREES NOT TO OPPOSE THE GRANTING OF SUCH
RELIEF IN THE EVENT A COURT DETERMINES THAT SUCH BREACH HAS OCCURRED, AND
AGREES TO WAIVE ANY REQUIREMENT FOR THE SECURING OR POSTING OF ANY BOND IN
CONNECTION WITH SUCH REMEDY.
Section 5.8. Severability. The invalidity or unenforceability of any
provision hereof in any jurisdiction will not affect the validity or
enforceability of the remainder hereof in that jurisdiction or the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction. To the extent permitted by Applicable Law, each Party waives any
provision of Applicable Law that renders any provision hereof prohibited or
unenforceable in any respect. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the Parties to the extent possible.
Section 5.9. Translation. The parties hereto have negotiated both this
Agreement and the Memorandum of Understanding, dated June 14, 1994 (the "MOU"),
among each of the parties hereto, in the English language, and have prepared
successive drafts and the definitive texts of the MOU and this Agreement in the
English language. For purposes of complying with loi n(degrees) 94-665 du 4
aout 1994 relative a l'emploi de la langue francaise, the parties hereto have
prepared a French version of this Agreement, which French version was executed
and delivered simultaneously with the execution and delivery of the English
version hereof. The parties deem the French and English versions of this
Agreement to be equally authoritative.
Section 5.10. Counterparts. This Agreement may be executed in one or more
counterparts each of which when so executed and delivered will be deemed an
original but all of which will constitute one and the same Agreement.
Section 5.11. Waiver of Immunity. Each of FT and DT agrees that, to the
extent that it or any of its property is or becomes entitled at any time to any
immunity on the grounds of sovereignty or otherwise based upon its status as an
agency or instrumentality of government from any legal action, suit or
proceeding or from setoff or counterclaim relating to this Agreement from the
jurisdiction of any competent court, from service of process, from attachment
prior to judgment, from attachment in aid of execution of a judgment, from
execution pursuant to a judgment or arbitral award or from any other legal
process in any jurisdiction, it, for itself and its property expressly,
irrevocably and unconditionally waives, and agrees not to plead or claim, any
such immunity with respect to such matters arising with respect to this
Agreement or the subject matter hereof (including any obligation for the
payment of money). Each of FT and DT agrees that the waiver in this provision
is irrevocable and is not subject to withdrawal in any jurisdiction or under
any statute, including the Foreign Sovereign Xxxxxxxxxx Xxx, 00 X.X.X. (X)0000,
et seq. The foregoing waiver shall constitute a present waiver of immunity at
any time any action is initiated against FT or DT with respect to this
Agreement.
Section 5.12. Remedies. In addition to any other remedies which may be
available to Sprint (including any remedies which Sprint may have at law or in
equity):
(a) Each of FT and DT agrees that Sprint shall have no obligation to
honor transfers of Sprint Voting Securities or other equity interests in
Sprint to FT, DT or any of their respective Affiliates or Associates which
would cause any of FT, DT and their respective Affiliates or Associates to
Beneficially Own Sprint Voting Securities or other equity interests in
Sprint in violation of this Agreement, any such transfers shall be void and
of no effect, and Sprint shall be entitled to instruct any transfer agent
or agents for the equity interests in Sprint to refuse to honor such
transfers; and
14
(b) FT and DT acknowledge the provisions set forth in Section 5 of that
portion of ARTICLE SIXTH of the Articles entitled "GENERAL PROVISIONS
RELATING TO ALL STOCK," Section 7(b) of the Class A Provisions, and Section
3.5 and Article VIII of the Stockholders' Agreement relating to the
consequences of a breach of certain provisions of this Agreement or any
Qualified Subsidiary Standstill Agreement or to the consequences of certain
actions taken by a Government Affiliate, Qualified Stock Purchaser,
Strategic Investor or Related Company.
IN WITNESS WHEREOF, Sprint, FT and DT have caused their respective duly
authorized officers to execute this Agreement as of the day and year first
above written.
SPRINT CORPORATION
/s/ X. X. Xxxxx
By: _________________________________
Xxxxxxx X. Xxxxx
Chairman and Chief Executive
Officer
FRANCE TELECOM
/s/ Xxxxxxx Xxxxxxxx
By: _________________________________
Xxxxxxx Xxxxxxxx
Directeur General
DEUTSCHE TELEKOM AG
/s/ Xxx Xxxxxx
By: _________________________________
Dr. Xxx Xxxxxx
Xxxxxxxxxxxx xxx Xxxxxxxxxx
00
