EXHIBIT 3.1
STOCKHOLDER AND OPTION AGREEMENT
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THIS STOCKHOLDER AND OPTION AGREEMENT (this "Agreement") dated as of April
12, 1999, is entered into between Sprint Corporation, a Kansas corporation
("Parent"), and Xxxxxxx Xxxxxxxx, an individual resident of the State of
Connecticut, on his own behalf and as attorney-in-fact for the stockholders
identified on Schedule I hereto (collectively, "Stockholder"), with respect to
the shares of common stock, par value $.01 per share (the "Company Common
Stock"), of People's Choice TV Corp., a Delaware corporation (the "Company"),
owned by Stockholder.
W I T N E S S E T H:
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WHEREAS, as of the date hereof, the Stockholder beneficially owns and has
the power to vote 1,694,823 shares of Company Common Stock as identified on
Schedule I hereto (including any and all rights attached thereto to acquire
shares of stock of the Company if the Company adopts a stockholders' rights
plan, and any other rights associated therewith, the "Option Shares"); and
WHEREAS, Parent desires to enter into this Agreement in connection with its
efforts to consummate an acquisition of the Company and Parent requires that
Stockholder enter into this Agreement as a condition to its willingness to enter
into an acquisition agreement with the Company.
NOW, THEREFORE, in contemplation of the foregoing and in consideration of
the mutual agreements, covenants, representations and warranties contained
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Certain Covenants.
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1.1 Lock-Up. Stockholder hereby covenants and agrees during the term
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of this Agreement that (a) except as consented to in writing by Parent in its
sole discretion, Stockholder will not sell, transfer, assign, pledge,
hypothecate, tender or otherwise dispose of or limit its right to vote in any
manner any of the Option Shares, or agree to do any of the foregoing, and (b)
Stockholder will not take any action which would have the effect of preventing
or disabling Stockholder from performing its obligations under this Agreement.
1.2 Irrevocable Proxy. Stockholder has revoked or terminated any
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proxies, voting agreements or similar arrangements previously given or entered
into with respect to the Option Shares and hereby irrevocably appoints Parent,
during the term of this Agreement, as proxy for Stockholder to vote (or refrain
from voting) in any manner as Parent, in its sole discretion, may see fit, all
of the Option Shares for Stockholder and in Stockholder's name, place and stead,
at any annual, special or other meeting or action of the stockholders of the
Company, as applicable, or at any adjournment thereof or pursuant to any consent
of the stockholders of the Company, in lieu of a meeting or otherwise, with
respect to any issue brought before the stockholders of the Company,
other than with respect to the election of directors of the Company, for which
the stockholders of the Company are entitled to vote.
1.3 Public Announcement. Stockholder shall consult with Parent
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before issuing any press releases or otherwise making any public statements with
respect to the transactions contemplated herein and shall not issue any such
press release or make any such public statement without the approval of Parent,
except as may be required by law.
1.4 Stop Transfer Instruction. Promptly following the date hereof,
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Stockholder and Parent shall deliver joint written instructions to the Company
and to the Company's transfer agent stating that the Option Shares may not be
sold, transferred, pledged, assigned, hypothecated, tendered or otherwise
disposed of in any manner without the prior written consent of Parent or except
in accordance with the terms and conditions of this Agreement.
1.5 HSR Filing. Promptly following the date hereof, Parent will make
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all filings with and give all notices to governmental or regulatory authorities
required of Parent pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended ("HSR Act"), in connection with consummating the
transactions contemplated by this Agreement. Parent will use all commercially
reasonable efforts to obtain early termination of all applicable waiting periods
under the HSR Act.
2. Grant of Option.
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2.1 Option. Upon the terms and subject to the conditions of this
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Agreement, Stockholder hereby grants to Parent or Parent's designee an
irrevocable option (the "Option") to purchase the Option Shares. Upon exercise
of the Option and purchase of the Option Shares, Parent shall not assume any
liabilities or obligations (if any) of Stockholder related to or in connection
with such Option Shares and arising prior to the Option Closing Date (as defined
hereinafter).
2.2 Option Price. The purchase price payable by Parent or its
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designee at the Option Closing (as hereinafter defined) for the Option Shares
shall be an amount equal to $8.00 per Option Share (the "Option Price");
provided, however, if prior to the Option Closing, Parent shall purchase any
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shares of the Company Common Stock for an amount per share in excess of the
Option Price (the "Excess Amount"), then the amount per Option Share to be paid
by Parent shall equal the sum of the Option Price plus the Excess Amount. If
following the Option Closing, Parent shall purchase any shares of the Company
Common Stock for an amount per share in excess of the sum of the Option Price
plus, if applicable, the Excess Amount plus any other amount previously remitted
pursuant to this Section 2.2 (the "Subsequent Excess Amount"), then Parent shall
forthwith remit to Stockholder an amount equal to the Subsequent Excess Amount
for each Option Share purchased at the Option Closing.
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2.3 Exercise.
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(a) Parent or its designee shall be entitled to exercise the Option by
giving written notice to Stockholder. Such notice shall specify a date (not
earlier than one business day or later than three business days from the date
such notice is delivered to Stockholder) and place for closing of the exercise
of the Option (the "Option Closing"). Upon delivery of notice exercising the
Option, the Option shall be deemed to have been exercised by Parent or its
designee irrespective of the actual date of the Option Closing (the actual date
of the Option Closing is referred to hereinafter as the "Option Closing Date").
At the Option Closing, Parent or its designee will deliver to Stockholder the
Option Price (as adjusted pursuant to Section 2.2, if necessary) with respect to
the Option Shares, by wire transfer of immediately available funds to an account
designated in writing by Stockholder prior to the Option Closing Date.
(b) Upon payment of the Option Price as provided in Section 2.3
hereof, the Stockholder shall deliver to Parent or its designee at the Option
Closing, (i) the certificates representing the Option Shares duly endorsed in
blank for transfer, or accompanied by duly executed stock powers in blank, in
each case with signatures guaranteed by a national bank or trust company or a
member firm of the New York Stock Exchange, Inc. and (ii) all such other
agreements, endorsements, assignments and other instruments as are necessary or
desirable, in Parent's sole and absolute discretion, to vest in Parent or its
designee good and marketable title to such Option Shares or to evidence of
record the sale and assignment of such Option Shares to Parent or its designee.
2.4 Option Expiration/Put Right. Except as provided below, the
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Option shall terminate and expire ten days after the transactions contemplated
by this Agreement receive approval required by the HSR Act ("HSR Approval") if
the Option has not been exercised by Parent or its designee on or before such
date (the "Expiration Date"). If the Option has not been exercised by Parent on
or before the Expiration Date, Stockholder shall have the right at such time,
and for a period of 30 days thereafter, to deliver a written notice to Parent
(the "Stockholder Notice") requiring that Parent or its designee purchase the
Option Shares at the Option Price, as adjusted (if necessary) in accordance with
Section 2.2 hereof (the "Put Right"). Upon the exercise by Stockholder of the
Put Right, the parties hereto shall consummate the purchase and sale of the
Option Shares in accordance with Section 2.3 hereof.
3. Representations and Warranties of Stockholder. Stockholder hereby
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represents and warrants to Parent, as of the date hereof and as of the Closing
Date, as follows:
3.1 Ownership. Stockholder has good and marketable title to, and is
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the sole legal and beneficial owner of the Option Shares, in each case free and
clear of all liabilities, claims, liens, options, proxies, charges,
participations and encumbrances of any kind or character whatsoever. At the
Option Closing, Stockholder will transfer and convey to Parent or its designee
good and marketable title to the Option Shares, free and clear of all
liabilities, claims, liens, options, proxies, charges, participations and
encumbrances of any kind or character whatsoever created by or arising through
Stockholder.
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3.2 Authorization. Stockholder has all requisite power and authority
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to execute and deliver this Agreement and to consummate the transactions
contemplated hereby and has sole voting power and sole power of disposition,
with respect to all of the Option Shares owned by Stockholder with no
restrictions on its voting rights or rights of disposition pertaining thereto.
Stockholder has duly executed and delivered this Agreement and this Agreement
is a legal, valid and binding agreement of Stockholder, enforceable against
Stockholder in accordance with its terms.
3.3 Stockholder Has Adequate Information. Stockholder is a
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sophisticated seller with respect to the Option Shares and has adequate
information concerning the business and financial condition of the Company to
make an informed decision regarding the sale of the Option Shares and has
independently and without reliance upon Parent and based on such information as
Stockholder has deemed appropriate, made its own analysis and decision to enter
into this Agreement. Stockholder acknowledges that Parent has not made and does
not make any representation or warranty, whether express or implied, of any kind
or character except as expressly set forth in this Agreement. Stockholder
acknowledges that the sale of the Option Shares by Stockholder to Parent is
irrevocable, and that Stockholder shall have no recourse to the Option Shares or
Parent, except with respect to breaches of representations, warranties,
covenants and agreements expressly set forth in this Agreement.
3.4 Parent's Excluded Information. Stockholder acknowledges and
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confirms that (a) Parent may possess or hereafter come into possession of
certain non-public information concerning the Option Shares and the Company
which is not known to Stockholder and which may be material to Stockholder's
decision to sell the Option Shares ("Parent's Excluded Information"), (b)
Stockholder has requested not to receive Parent's Excluded Information and has
determined to sell the Option Shares notwithstanding its lack of knowledge of
Parent's Excluded Information, and (c) Parent shall have no liability or
obligation to Stockholder in connection with, and Stockholder hereby waives and
releases Parent from, any claims which Stockholder or its successors and assigns
may have against Parent (whether pursuant to applicable Option Shares, laws or
otherwise) with respect to the non-disclosure of Parent's Excluded Information;
provided, however, nothing contained in this Section 3.4 shall limit
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Stockholder's right to rely upon the express representations and warranties made
by Parent in this Agreement, or Stockholder's remedies in respect of breaches of
any such representations and warranties.
4. Survival of Representations and Warranties. The respective
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representations and warranties of Stockholder and Parent contained herein shall
not be deemed waived or otherwise affected by any investigation made by the
other party hereto, and each representation and warranty contained herein shall
survive the closing of the transactions contemplated hereby until the expiration
of the applicable statute of limitations, including extensions thereof.
5. Specific Performance. Stockholder acknowledges that Parent will be
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irreparably harmed and that there will be no adequate remedy at law for a
violation of any of the covenants or agreements of Stockholder which are
contained in this Agreement. It is accordingly agreed that, in addition to any
other remedies which may be available to Parent upon the breach by Stockholder
of
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such covenants and agreements, Parent shall have the right to obtain injunctive
relief to restrain any breach or threatened breach of such covenants or
agreements or otherwise to obtain specific performance of any of such covenants
or agreements.
6. Miscellaneous.
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6.1 Binding Effect. This Agreement shall be binding upon and inure
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to the benefit of and be enforceable by the parties hereto and their respective
representatives and permitted successors and assigns.
6.2 Entire Agreement. This Agreement contains the entire
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understanding of the parties and supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended only by a written instrument duly executed by the
parties hereto.
6.3 Headings. The headings contained in this Agreement are for
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reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Time is of the essence with respect to all
provisions of this Agreement.
6.4 Assignment. This Agreement may not be transferred or assigned by
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Stockholder but may be assigned by Parent to any of its affiliates or to any
successor to its business and will be binding upon and inure to the benefit of
any such affiliate or successor.
6.5 Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be an original, but each of which together
shall constitute one and the same Agreement.
6.6 Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if so given) by delivery, telegram or telecopy,
or by mail (registered or certified mail, postage prepaid, return receipt
requested) or by any national courier service, provided that any notice
delivered as herein provided shall also be delivered by telecopy at the time of
such delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses (or at such other address for a
party as shall be specified by like notice, provided that notices of a change of
address shall be effective only upon receipt thereof):
(a) If to Parent: Sprint Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxx 00000
Attention: Corporate Secretary
Telecopy: (000) 000-0000
with a copy to: King & Spalding
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000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
(b) If to
Stockholder: Xxxxxxx Xxxxxxxx
00 Xxx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
with a copy to: Xxxxxxxx & Xxxxxxxx
0 Xxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
6.7 Governing Law. This Agreement shall be governed by and construed
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and enforced in accordance with the laws of the State of New York, without
regard to its principles of conflicts of laws.
6.8 Enforceability. The invalidity or unenforceability of any
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provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.
6.9 Further Assurances. From time to time at or after the Option
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Closing, at Parent's request and without further consideration, Stockholder
shall execute and deliver to Parent such documents and take such action as
Parent may reasonably request in order to consummate more effectively the
transactions contemplated hereby and to vest in Parent good, valid and
marketable title to the Option Shares, including, but not limited to, using its
best efforts to cause the appropriate transfer agent or registrar to transfer of
record the Option Shares.
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IN WITNESS WHEREOF, Parent and Stockholder have caused this Agreement to be
duly executed as of the day and year first above written.
SPRINT CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
Title: Sr. Vice President
XXXXXXX XXXXXXXX
/s/ Xxxxxxx Xxxxxxxx
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In his individual capacity and as
attorney-in-fact for the
stockholders identified on Schedule
I hereto
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SCHEDULE I
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Name of Stockholder Shares of Company Common Stock
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Xxxx Multichannels Limited 936,327
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Xxxxxxx Xxxxxxxx 10,000
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Xxxx Xxxxxxxx 45,000
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Xxxxxxx Xxxxxxxx, as custodian for
Xxxxxx Xxxxxxxx 110,000
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Xxxx Xxxxxxxx 79,357
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Xxxxxxx Xxxxxxxx 105,809
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Trust FBO Xxxxxx Xxxxxxxx 13,226
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Trust FBO Xxxxxx Xxxxxxxx 13,226
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Xxxxxx Xxxxxxxx 5,000
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Xxxx and Xxxxxx Xxxxxxxx Gifting Trust # 1 179,522
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Xxxx and Xxxxxx Xxxxxxxx Gifting Trust # 2 72,743
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Xxxx Xxxxxxxx Generation Skipping Trust
exempt marital trust 6,613
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The Oristano Foundation 108,000
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Xxxx XX 10,000
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TOTAL: 1,694,823
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