EXHIBIT 10.4
IRREVOCABLE PROXY
AND
VOTING AGREEMENT
THIS IRREVOCABLE PROXY AND VOTING AGREEMENT (this "Agreement"), dated as of
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November 23, 1998, is entered into between SPRINT CORPORATION, a Kansas
corporation ("Sprint"), and TELE-COMMUNICATIONS, INC., a Delaware corporation
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(the "Holder").
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WHEREAS, Sprint, the Holder, Comcast Corporation, a Pennsylvania
corporation ("Comcast"), and Xxx Communications, Inc., a Delaware corporation
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("Cox", and together with the Holder and Comcast, the "Cable Holders") and
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certain of their respective Subsidiaries (as defined herein) have entered into
the Restructuring and Merger Agreement, dated May 26, 1998 (the "Restructuring
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Agreement"), pursuant to which such Cable Holders (directly or indirectly
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through Subsidiaries) will acquire shares of Series 2 PCS Stock (as defined
herein) on the terms set forth in the Restructuring Agreement;
WHEREAS, contemporaneously with the execution of this Agreement, Sprint and
the Holder have entered into a Standstill Agreement, dated May 26, 1998 (the
"Standstill Agreement") imposing certain restrictions on the ability of the
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Holder and its Affiliates to acquire shares of Series 1 PCS Stock (as defined
herein) and other shares of the capital stock of Sprint;
WHEREAS, Section 6.8 of the Restructuring Agreement permits the Holder and
its Affiliates to acquire shares of Series 1 PCS Stock under certain
circumstances, which acquisitions are permitted under the Standstill Agreement;
WHEREAS, each share of Series 2 PCS Stock has one-tenth of the vote of each
share of Series 1 PCS Stock in all matters presented for a vote of the holders
of the common stock of Sprint;
WHEREAS, Sprint is willing to permit the Holder and its Affiliates to
acquire shares of the Series 1 PCS Stock in accordance with the Restructuring
Agreement; based on the arrangements set forth herein (including the granting by
the Holder of the irrevocable proxy contained herein);
NOW THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Holder and Sprint (each a "Party"), intending to be legally
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bound, hereby agree as follows:
Section 1. Irrevocable Proxy.
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(a) Subject to paragraphs (c), (d) and (e) below, the Holder hereby
grants to Xxxxxxx X. Xxxxx (the "Grantee") an irrevocable proxy, with full power
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of substitution, to exercise voting authority and authority to act by written
consent over all shares of Series 1 PCS Stock Beneficially Owned by the Holder
and its Affiliates, at the time of execution of this Agreement or at any time in
the future (the "Proxy Shares"), on all matters submitted to a vote of all or
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any class or classes of the holders of the Sprint Voting Securities, which proxy
is irrevocable and coupled with an interest for purposes of Section 17-6502 of
the Kansas General Corporation Code.
(b) Prior to the acquisition by any Affiliate of Holder that has not
previously executed and delivered to Sprint an Irrevocable Proxy under this
paragraph of any shares of Series 1 PCS Stock, the Holder will cause such
Affiliate to execute and deliver to Sprint the form of Irrevocable Proxy
attached hereto as Exhibit A, which proxies shall (together with the proxy
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contained in Section 1(a)) be deemed to constitute the "Proxy" for the purposes
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of this Agreement.
(c) Pursuant to the Proxy, the Grantee is authorized and directed to
vote the Proxy Shares for or against any matter presented for a vote of the
Sprint Voting Securities in the same manner as the majority of votes that are
cast with respect to such matter by the holders of Sprint Voting Securities
(other than the Proxy Shares).
(d) Notwithstanding the foregoing, the Proxy shall not be applicable
with respect to any of the Proxy Shares in connection with any matter on which
the holders of Series 1 PCS Stock vote pursuant to Article Sixth, Sections
3.2(d) and 3.2(f) of the Initial Charter Amendment (as defined in the
Restructuring Agreement) or any successor provisions with the same effect, and
the Holder shall have the power to vote the Proxy Shares in its discretion with
respect to any such matter.
(e) The Grantee's appointment hereunder shall terminate at such time
as the Grantee ceases to be the Chief Executive Officer of Sprint, at which time
the Proxy shall automatically be granted, without any further act by the Holder
or its Affiliates, to the Grantee's successor as Chief Executive Officer of
Sprint and thereafter to each subsequent successor as the Chief Executive
Officer of Sprint (each of which persons shall be deemed the Grantee hereunder).
At the request of Sprint from time-to-time, the Holder shall, and shall cause
each of its Affiliates holding any Proxy Shares to, execute an irrevocable proxy
in the form of this Agreement or Exhibit A hereto confirming the appointment of
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each successor Chief Executive Officer of Sprint as the Grantee for all purposes
under this Agreement.
(f) Within 10 days following the record date for each meeting of the
shareholders of Sprint, the Holder shall give notice to Sprint of (i) the names
of the Affiliates of the Holder that Beneficially Owned shares of Series 1 PCS
Stock as of the record date and (ii) the
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number of shares of Series 1 PCS Stock Beneficially Owned by the Holder and each
of its Affiliates as of the record date.
Section 2. Voting Agreement. If the Proxy is determined to be invalid or
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unenforceable in any respect, or the holder of the Proxy is unable or unwilling
for any reason to vote the Proxy Shares at any meeting of the stockholders of
Sprint as contemplated by Section 1(c), then, except in the case of a matter
described in Section 1(d), the Holder shall, and shall cause each of its
Affiliates to, attend each meeting of the stockholders of Sprint for the
purposes of satisfying quorum requirements and shall vote the Proxy Shares for
or against any matter presented for a vote of the Sprint Voting Securities in
the same manner as the majority of votes that are cast with respect to such
matter by the holders of Sprint Voting Securities (other than the Proxy Shares).
Section 3. Termination. The Proxy and this Agreement shall terminate on
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the earlier to occur of (a) the consent in writing of Sprint and the Holder, (b)
the termination of the Standstill Agreement and (c) the tenth anniversary of
this Agreement.
Section 4. Certain Definitions. As used in this Agreement, the following
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terms shall have the meanings specified below. Any capitalized terms not
otherwise defined herein shall have the meaning attributed thereto in the
Restructuring Agreement.
"Affiliate" means, with respect to any Person, any other Person that
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directly, or indirectly through one or more intermediaries, Controls or is
Controlled by, or is under common Control with, such Person.
"Agreement" has the meaning set forth in the Preamble.
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"Beneficial Owner" (including, with its correlative meanings, "Beneficially
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Own" and "Beneficial Ownership"), with respect to any securities, means any
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Person which:
(a) has, or any of whose Affiliates has, directly or indirectly, the
sole or shared 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 Restructuring Agreement, or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise;
(b) has, or any of whose Affiliates has, directly or indirectly, the
sole or shared 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
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(c) has, or any of whose Affiliates 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 thereof), provided
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that the Restructuring Agreement shall not be deemed an agreement, arrangement
or understanding contemplated by this paragraph (c).
"Cable Holders" has the meaning set forth in the Recitals.
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"Class A Stock" means the Class A Common Stock, par value $2.50 per share,
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of Sprint.
"Common Stock" means the Common Stock, par value $2.50 per share, of
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Sprint.
"Control" (including, with its correlative meanings, "Controlled by" and
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"under common Control with") means, with respect to a Person or Group:
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(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; (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; or (iii) with
respect to a particular action or agreement, to direct or cause the direction of
decisions, or veto or otherwise prevent decisions, of or with respect to the
entity in question relating to such action or agreement.
"PCS Preferred Stock" means the Preferred Stock -- Seventh Series,
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Convertible, no par value, of Sprint.
"PCS Stock" means the Series 1 PCS Stock, the Series 2 PCS Stock and the
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Series 3 PCS Stock.
"Person" means an individual, a partnership, an association, a joint
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venture, a corporation, a business, a trust, an unincorporated organization, a
governmental authority or any other entity organized under applicable law.
"Restructuring Agreement" has the meaning set forth in the Recitals.
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"Series 1 PCS Stock" means the PCS Common Stock -- Series 1, par value
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$1.00 per share, of Sprint, which will be created on the Closing Date by the
filing of the Initial Charter Amendment, as defined in the Restructuring
Agreement.
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"Series 2 PCS Stock" means the PCS Common Stock -- Series 2, par value
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$1.00 per share, of Sprint, which will be created on the Closing Date by the
filing of the Initial Charter Amendment.
"Series 3 PCS Stock" means the PCS Common Stock -- Series 3, par value
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$1.00 per share, of Sprint, which will be created on the Closing Date by the
filing of the Initial Charter Amendment.
"FON Stock" means the Sprint FON Group Common Stock that will be created
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upon completion of the Recapitalization, as defined in the Restructuring
Agreement.
"Sprint Voting Securities" means the Common Stock, the Class A Stock, the
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FON Stock, the PCS Stock, the PCS Preferred Stock and any other securities of
Sprint having the right to Vote.
"Subsidiary" means, with respect to any Person (the "Parent"), any other
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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.
"Transfer" means any act pursuant to which, directly or indirectly, the
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ownership of assets or securities in question is sold, transferred, conveyed,
delivered or otherwise disposed of.
"Vote" means, as to any entity, the ability to cast a vote at a
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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
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with respect to Sprint only, "Vote" means the ability to exercise general voting
power (as opposed to the exercise of special voting or disapproval rights) with
respect to matters other than the election of directors at a meeting of the
stockholders of Sprint.
"Voting Power" means, as to any entity as of any date, the aggregate number
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of Votes outstanding as of such date in respect of such entity; provided that,
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with respect to PCS Stock, the Vote per share used to calculate such aggregate
number of Votes shall be the Vote per share most recently established by the
Board of Directors of Sprint, whether for the most recent vote of stockholders
or for a vote of stockholders to be conducted in the future.
Section 5. Interpretation and Construction of this Agreement. The
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definitions in Section 4 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
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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).
Section 6. Notices. Except as expressly provided herein, all notices,
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consents, waivers and other communications required or permitted to be given by
any provision of this Agreement shall be in writing and mailed (certified or
registered mail, postage prepaid, return receipt requested) or sent by hand or
overnight courier, or by facsimile transmission (with acknowledgment received
and confirmation sent as provided below), charges prepaid and addressed to the
intended recipient as follows, or to such other address or number as such Person
may from time to time specify by like notice to the parties:
Holder: Tele-Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxx & Xxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Te1ecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx
Sprint: Sprint Corporation
2330 Shawnee Mission Parkway
East Wing
Westwood, Kansas 66205
Attention: General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
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Tel: (000) 000-0000
Fax: (000) 000-0000
Any party may from time to time specify a different address for notices by like
notice to the other parties. All notices and other communications given in
accordance with the provisions of this Agreement shall be deemed to have been
given and received (i) four (4) Business Days after the same are sent by
certified or registered mail, postage prepaid, return receipt requested, (ii)
when delivered by hand or transmitted by facsimile (with acknowledgment received
and, in the case of a facsimile only, a copy of such notice is sent no later
than the next Business Day by a reliable overnight courier service, with
acknowledgment of receipt) or (iii) one (1) Business Day after the same are sent
by a reliable overnight courier service, with acknowledgment of receipt.
Section 7. Assignment. No Party will assign this Agreement or any rights,
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interests or obligations hereunder, or delegate performance of any of its
obligations hereunder, without the prior written consent of each other Party.
Section 8. Entire Agreement. This Agreement (together with the Standstill
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Agreement and the Restructuring Agreement) embodies the entire agreement and
understanding of the Parties with respect to the subject matter contained
herein, provided that this provision shall not abrogate any other written
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agreement between the Parties executed simultaneously with this Agreement.
Section 9. Waiver, Amendment, etc. This Agreement may not be amended or
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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 10. Binding Agreement; No Third Party Beneficiaries. This
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Agreement will be binding upon and inure to the benefit of the Parties and their
successors and permitted assigns. Nothing expressed or implied herein is
intended or will be construed to confer upon or to give to any third party any
rights or remedies by virtue hereof.
Section 11. Governing Law; Equitable Relief.
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(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF KANSAS (REGARDLESS OF THE LAWS THAT MIGHT
OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW).
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(B) 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 12. Severability. The invalidity or unenforceability of any
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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 13. Counterparts. This Agreement may be executed in one or more
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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 14. Remedies. In addition to any other remedies which may be
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available to Sprint (including any remedies which Sprint may have at law or in
equity), if the Holder or any of its Affiliates breaches any material provision
of this Agreement or the Proxy, neither the Holder nor such Affiliates shall be
entitled to vote any of its shares of capital stock of Sprint (or any shares
into which such shares of capital stock are converted) with respect to any
matter or proposal arising from, relating to or involving such breach, and no
such purported vote by the Holder or any of its Affiliates on such matter shall
be effective or shall be counted.
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IN WITNESS WHEREOF, Sprint and the Holder have caused their respective duly
authorized officers to execute this Irrevocable Proxy and Voting Agreement as of
the day and year first above written.
TELE-COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Executive Vice President
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SPRINT CORPORATION
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
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Title: Vice President and Secretary
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EXHIBIT A
IRREVOCABLE PROXY
_____________________, a ____________________
[CORPORATION/PARTNERSHIP/LIMITED LIABILITY COMPANY] hereby grants to
_________________ [INSERT NAME OF CHIEF EXECUTIVE OFFICER OF SPRINT] an
irrevocable proxy, with full power of substitution, to exercise voting authority
and authority to act by written consent over all shares of the Series 1 PCS
Group Common Stock, par value $1.00, of Sprint Corporation ("Sprint")
Beneficially Owned by the Holder, at the time of execution and delivery of this
proxy or at any time in the future (the "Proxy Shares"), on all matters
submitted to a vote of all or any class or classes of the holders of Sprint
Voting Securities. This proxy is granted pursuant to the terms of the
Irrevocable Proxy and Voting Agreement (the "Voting Agreement"), dated as of
________________, 1998, between Sprint and ______________, a ____________
corporation, and this proxy is irrevocable and coupled with an interest for
purposes of Section 17-6502 of the Kansas General Corporation Code. This proxy
is given under and subject to the terms and limitations of the Voting Agreement
(including, without limitation, Sections 1(c), 1(d) and 1(e) thereof) and shall
terminate simultaneously with the termination of the Voting Agreement pursuant
to Section 3 thereof. Capitalized terms utilized but not defined in this proxy
shall have the meaning ascribed thereto in the Voting Agreement.
IN WITNESS WHEREOF, the undersigned has caused its duly authorized officer
to execute and deliver this Irrevocable Proxy as of the ____ day of ___________,
____.
[HOLDER]
By: ______________________________
Name: ________________________
Title: _________________________
