<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A-1
(Amendment No.1)
Under the Securities Exchange Act of 1934
SPRINT CORPORATION
(Name of Issuer)
Common Stock
(Title of Class of Securities)
852061407
(CUSIP Number)
Deutsche Telekom AG, Joachim Kroeske, Chief Financial Officer,
Friedrich-Ebert-Allee 140,
D-53113 Bonn, Germany; Phone (49-228) 181-8000
France Telecom, Jacques Champeaux,
Directeur Executif de la Branche Enterprises,
Group Executive 6 place d'Alleray, 75505 Paris Cedex 15, France
Phone (33-1) 44-44-19-94
- - - --------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 26, 1996
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box [].
Check the following box if a fee is being paid with this
statement []. (A fee is not required only if the reporting person:
(1) has a previous statement on file reporting beneficial ownership
of more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
(Continued on following page(s))
<PAGE>
13D
- - - --------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Deutsche Telekom AG
IRS Identification Number: N/A
- - - --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- - - --------------------------------------------------------------------------
3 SEC USE ONLY
- - - --------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- - - --------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- - - --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Germany
- - - --------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 86,236,036 shares of Class A Common Stock
REPORTING (equivalent in voting power to 86,236,036
PERSON shares of Common Stock)
WITH --------------------------------------------------
9 SOLE DISPOSITIVE POWER
43,118,018 shares of Class A Common Stock
(equivalent in voting power to 43,118,018
shares of Common Stock)
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- - - ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
86,236,036 shares of Class A Common Stock (equivalent in
voting power to 86,236,036 shares of Common Stock)
- - - ---------------------------------------------------------------------------
<PAGE>
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
- - - ---------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
100% of Class A Common Stock. If the Class A Common Stock is
converted to Common Stock, approximately 19.76% of the Common
Stock.
- - - ----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- - - ----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
- - - --------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
France Telecom
IRS Identification Number: N/A
- - - --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
- - - --------------------------------------------------------------------------
3 SEC USE ONLY
- - - --------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- - - --------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- - - --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
- - - --------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 86,236,036 shares of Class A Common Stock
REPORTING (equivalent in voting power to 86,236,036
PERSON shares of Common Stock)
WITH --------------------------------------------------
9 SOLE DISPOSITIVE POWER
43,118,018 shares of Class A Common Stock
(equivalent in voting power to 43,118,018
shares of Common Stock)
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- - - ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
86,236,036 shares of Class A Common Stock (equivalent in
voting power to 86,236,036 shares of Common Stock)
- - - ---------------------------------------------------------------------------
<PAGE>
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
- - - ---------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
100% of Class A Common Stock. If the Class A Common Stock is
converted to Common Stock, approximately 19.76% of the Common
Stock.
- - - ----------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- - - ----------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this Statement on
Schedule 13D relates is the common stock, par value $2.50 per share
(the "Common Stock"), of Sprint Corporation, a Kansas corporation
(the "Issuer"), with its principal executive offices located at
2330 Shawnee Mission Parkway, Westwood, Kansas 66205. The Class A
Common Stock (as defined in Item 6) acquired by the persons filing
this joint statement is convertible into Common Stock in the manner
described in Item 6.
ITEM 2. IDENTITY AND BACKGROUND
The persons listed in numbers 1 and 2 below are persons filing
this joint statement. A copy of their written agreement relating
to the filing of this joint statement is filed as Exhibit 1 to FT's
and DT's Schedule 13D filing of February 12, 1996 (the "Original
Schedule 13D Filing").
1. a. Deutsche Telekom AG ("DT"), an Aktiengesellschaft formed
under the laws of Germany.
b. Friedrich-Ebert-Allee 140, D-53113 Bonn, Germany.
c. DT provides telecommunications services and products.
d. During the last five years, DT has not been convicted in
any criminal proceeding.
e. During the last five years, DT has not been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding
is or was subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or finding any violation with respect to
such laws.
Information regarding the directors and executive officers of
DT is set forth on Schedule I attached hereto, which Schedule is
incorporated herein by reference. Except as set forth on Schedule
I, all of the directors and executive officers of DT are citizens
of Germany. During the last five years, to the best knowledge of
DT, no person named on Schedule I has been (a) convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors) or (b) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding is or was subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
2. a. France Telecom ("FT"), an exploitant public formed under
the laws of France.
b. 6 place d'Alleray, 75505 Paris Cedex 15, France.
c. FT provides telecommunications services and products.
d. During the last five years, FT has not been convicted in
any criminal proceeding.
e. During the last five years, FT has not been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding
is or was subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws or finding any violation with respect to
such laws.
Information regarding the directors and executive officers of
FT is set forth on Schedule II attached hereto, which Schedule is
incorporated herein by reference. Except as set forth on Schedule
II, all of the directors and executive officers of FT are citizens
of France. During the last five years, to the best knowledge of
FT, no person named on Schedule II has been (a) convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors) or (b) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding is or was subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Each of FT and DT required funds in an aggregate of about
$1.831 billion to purchase shares of Class A Stock. In connection
with the $1.5 billion in aggregate amount of Class A Preference
Stock acquired by each of FT and DT on the Initial Issuance Date by
each of FT and DT (which were converted into shares of Class A
Common Stock at the Deferred Common Stock Closing), and in
connection with the approximately $331 million in aggregate amount
of Class A Common Stock acquired at the Deferred Common Stock
Closing by each of them, each of FT and DT used cash on hand.
ITEM 4. PURPOSE OF THE ACQUISITION
DT and FT have entered into the investment arrangement
described in Item 6 with the Issuer in order to participate and
invest in the markets in which the Issuer operates and as part of
the related transactions described in Item 6.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
1. Deutsche Telekom AG
(a) DT is the beneficial owner of 86,236,036 shares of Class
A Common Stock, representing approximately 19.76% of the voting
power of the Issuer. The calculation of the foregoing percentage
is based on the number of shares of Common Stock shown, on the Form
10-K Annual Report filed by the Issuer with the SEC for the year
ended December 31, 1995, as being outstanding at March 1, 1996.
(b) The shares of Class A Common Stock are subject to the
terms and conditions of the following agreements, documents and
instruments, among others, all as more fully described in Item 6:
i. the Investment Agreement, dated as of July 31, 1995,
as amended, among the Issuer, FT and DT (the "Investment
Agreement");
ii. the Registration Rights Agreement, dated as of
January 31, 1995, among the Issuer, FT and DT (the
"Registration Rights Agreement");
iii. the Standstill Agreement, dated as of July 31, 1995,
among the Issuer, FT and DT (the "Standstill Agreement");
iv. the Coordination Agreement, dated as of July 31,
1995, between FT and DT (the "Coordination Agreement");
v. the Joint Venture Agreement, dated June 22, 1995, as
amended (the "Joint Venture Agreement"), among the Issuer,
Sprint Global Venture, Inc. ("Sprint Sub"), FT, DT and Atlas
Telecommunications S.A. ("Atlas");
vi. the Stockholders' Agreement, dated as of January 31,
1995, among the Issuer, FT and DT (the "Stockholders'
Agreement");
vii. the amendments to the Articles of Incorporation of
the Issuer (the "Charter Amendments") approved and adopted at
a special meeting of stockholders of the Issuer held on
January 29, 1996, and filed by the Issuer with the Secretary
of State of the State of Kansas on January 30, 1996; and
viii. the amendments to the Bylaws of the Issuer (the
"Bylaws Amendments") approved and adopted at a special meeting
of stockholders of the Issuer held on January 29, 1996, and
effective upon the Initial Issuance Date.
(c) Except as described herein, there have been no
transactions by DT in securities of the Issuer during the past sixty days.
(d) No one other than DT is known to have the right to
receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, the shares of Class A Common Stock
purchased by DT.
(e) Not applicable.
2. France Telecom
(a) FT is the beneficial owner of 86,236,036 shares of Class
A Common Stock, representing approximately 19.76% of the voting
power of the Issuer. The calculation of the foregoing percentage
is based on the number of shares of Common Stock shown, on the Form
10-K Annual Report filed by the Issuer with the SEC for the year
ended December 31, 1995, as being outstanding at March 1, 1996.
(b) The shares of Class A Common Stock are subject to the
terms and conditions of the following agreements, documents and
instruments, among others, all as more fully described in Item 6:
i. the Investment Agreement;
ii. the Registration Rights Agreement;
iii. the Standstill Agreement;
iv. the Coordination Agreement;
v. the Joint Venture Agreement;
vi. the Stockholders' Agreement;
vii. the Charter Amendments; and
viii. the Bylaws Amendments.
(c) Except as described herein, there have been no
transactions by FT in securities of the Issuer during the past
sixty days.
(d) No one other than FT is known to have the right to
receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, the shares of Class A Common Stock
purchased by FT.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
Purchase of Class A Stock
Purchase of Class A Preference Stock at the First Closing. At
a closing (the "First Closing") on January 31, 1996 (the "Initial
Issuance Date") under the Investment Agreement (as defined in Item
5), each of FT and DT purchased 31,762,837.48 shares of Class A
Preference Stock, par value $1.00 per share (the "Class A
Preference Stock"), of the Issuer having an aggregate liquidation
value of $1.5 billion and a per share liquidation value of $47.225,
plus accrued and unpaid dividends. Pursuant to the terms of the
Investment Agreement, the price (as adjusted from time to time, the
"Conversion Price") at which a share of Class A Preference Stock
acquired by FT and DT would convert into a share of Class A Common
Stock was, at the time of the First Closing and subject to
adjustment as described below, $48.704. See, generally, the
Investment Agreement attached as Exhibit 2 to FT's and DT's
Schedule 13D filing of February 12, 1996 (the "Original Schedule
13D Filing") and incorporated herein by reference. The description
of the Investment Agreement contained herein is qualified in its
entirety by reference to such exhibit.
Conversion into and Purchase of Class A Common Stock at the
Deferred Common Stock Closing. At a closing (the "Deferred Common
Stock Closing") on April 26, 1996 (the "Class A Common Issuance
Date" or the "Investment Completion Date") under the Investment
Agreement:
(a) the 31,762,837.48 shares of Class A Preference Stock
held by each of FT and DT converted into 35,329,574.41 shares
of Class A Common Stock, par value $2.50 per share (the "Class
A Common Stock" and, together with the Class A Preference
Stock, the "Class A Stock"), of the Issuer at the adjusted
Conversion Price determined in accordance with the Articles of
Incorporation of the Issuer, as amended (the "Articles"), and
(b) each of FT and DT purchased an additional
7,788,443.59 shares of Class A Common Stock for a purchase
price of $330,676,652.10.
Purchase of Optional Shares. Each of FT and DT have the
right, but not the obligation, to purchase from the Issuer
additional shares (the "Optional Shares") of Class A Common Stock.
The number of Optional Shares that each of FT and DT will be
entitled to purchase at the closing for such shares (the "Optional
Shares Closing") generally will be equal to one-half of the number
of shares of Class A Common Stock equal to 25% of the number of
shares of Common Stock issued after June 14, 1994 and on or prior
to the Investment Completion Date. Should FT and DT elect to
purchase Optional Shares, the purchase price payable by FT and DT
for such shares would depend upon the circumstances in which the
underlying Common Stock was originally issued, FT's and DT's
weighted average purchase price for their Class A Common Stock, and
other factors.
Additional Purchases. In addition to their equity purchase
rights (see below under "Equity Purchase Rights"), FT and DT may
from time to time acquire, through open market purchases, a number
of additional shares of Common Stock that would bring their
aggregate holdings up to 20% of the voting power of the Issuer.
The ability of FT and DT to acquire shares of Common Stock is
limited by the Standstill Agreement. Until the conversion of all
of the shares of Class A Common Stock into shares of Common Stock,
each share of Common Stock acquired by a Class A Holder will
automatically convert into one share of Class A Common Stock on the
date of such acquisition.
Terms of Class A Common Stock
The Charter Amendments establish the terms of the Class A
Common Stock, including voting rights, and also supplement the
terms of the Common Stock in order to set forth the rights of the
holders of the Common Stock in relation to those of the holders of
the Class A Common Stock. The terms of the Class A Common Stock
generally will be equivalent on a per share basis to the terms of
the Common Stock except for special voting and other rights of the
Class A Common Stock described below. See, generally, the Charter
Amendments attached to the Original Schedule 13D Filing as Exhibit
8 and incorporated herein by reference. The description of the
Charter Amendments contained herein is qualified in its entirety by
reference to such exhibit.
In General
Dividends. Subject to exceptions set forth in the Articles,
the holders of shares of Class A Common Stock will be entitled to
receive, when, as and if declared by the Issuer's Board of
Directors (the "Board"), dividends on the shares of Class A Common
Stock in an amount per share equal to the per share amount of any
dividend on the Common Stock.
Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution, or winding up of the Issuer,
after payment or provision for payment of the debts and other
liabilities of the Issuer, including the liquidation preferences of
any existing series of preferred or preference stock of the Issuer
then outstanding, the holders of the Class A Common Stock and the
holders of the Common Stock will share ratably in any remaining
assets of the Issuer.
Voting Rights. Except as may otherwise be required by law,
and except in connection with the election of directors and the
exercise of certain disapproval rights, each share of Class A
Common Stock will be entitled to one vote on each matter in respect
of which the holders of shares of Common Stock are entitled to
vote, and the holders of shares of Class A Common Stock will vote
together as a single class with the holders of shares of the Common
Stock and all other classes or series of capital stock of the
Issuer which have general voting power. No holder of capital stock
of the Issuer, including FT, DT and certain of their designated
subsidiaries (collectively, the "Class A Holders"), is entitled to
cumulative voting of his or her shares of capital stock in the
election of any members of the Board. With respect to certain
breaches of the Standstill Agreement (as defined in Item 5), FT
and/or DT will not be entitled to vote any of their shares of
capital stock of the Issuer with respect to the matter arising from
or relating to such breach.
Anti-Dilution Provisions. The Issuer may not effect any
reclassification, subdivision or combination of the outstanding
Class A Common Stock unless at the same time the Common Stock is
reclassified, subdivided or combined so that the holders of the
Common Stock remain entitled, in the aggregate, to voting power of
the Issuer representing the same percentage relative to the Class
A Common Stock as was represented by the Common Stock prior to such
reclassification, subdivision or combination. Holders of Class A
Common Stock have identical anti-dilution protection if such
modifications are made to the Common Stock. In connection with
such a reclassification, subdivision or combination of Common
Stock, the Issuer would also be required to maintain all of the
rights provided to the Class A Holders in the Articles.
In addition, in the case of any consolidation or merger of the
Issuer with or into any other entity (other than a merger or
consolidation which does not result in any reclassification,
conversion, exchange or cancellation of the Common Stock) or any
other reclassification of the Common Stock into any other form of
capital stock of the Issuer, each holder of Class A Common Stock
will have the right to convert each share of Class A Common Stock
held by it into the kind and amount of shares of stock and other
securities and property which such Class A Holder would have been
entitled to receive in such merger, consolidation or
reclassification had such Class A Holder converted its shares of
Class A Common Stock into Common Stock immediately prior to such
merger, consolidation or reclassification.
Associated Rights. Each share of Class A Common Stock will
have attached one-half of a right issued pursuant to the Rights
Plan.
Board Representation Rights
As and from the Initial Issuance Date, the Class A Holders
have the right to representation on the Board equal to the
percentage of the Issuer's voting power owned by the Class A
Holders, rounded up or down to the nearer whole number of
directors. On the Initial Issuance Date, FT and DT exercised such
right and elected Mr. Michel Bon and Dr. Ron Sommer to the Board.
In addition, for so long as it is necessary in order to allow FT
and DT to receive certain benefits under tax treaties between the
United States and France and between the United States and Germany,
respectively, the Class A Holders will be entitled to elect not
less than 20% of the members of the Board at any time when their
actual percentage of the Issuer's voting power is at least 20%.
Moreover, the Class A Holders will be entitled to elect a minimum
of two directors so long as the percentage of voting securities of
the Issuer owned by them, plus the percentage they are committed to
purchase (collectively, and determined on a basis that includes as
outstanding the shares they are committed to purchase, the
"Committed Percentage"), does not fall below 10% due to transfers
or, if the Committed Percentage is below 10% for 180 consecutive
days following a Major Issuance (as hereinafter defined), until
three years after the consummation of such Major Issuance. The
directors elected from time to time by the Class A Holders are
referred to as the "Class A Directors".
Unless prohibited by law or the rules of the New York Stock
Exchange (the "NYSE"), the Class A Holders will be entitled to at
least one representative on each committee of the Board. After
examining the relevant circumstances, the NYSE has indicated that
it would be opposed to the Class A Holders having a representative
on the Audit Committee of the Board.
The Articles provide that any Class A Director may be removed
from office with or without cause by the affirmative vote of the
holders of a majority of the outstanding shares of Class A Common
Stock voting separately as a class or with cause by the affirmative
vote of the holders of two-thirds of the outstanding voting
securities of the Issuer voting as a single class.
Disapproval Rights
Pursuant to the Articles, the Class A Holders will have the
right for specified periods of time to disapprove the taking of
certain actions by the Issuer. These rights will include the right
to disapprove certain business transactions of the Issuer,
issuances of 30% or more of the Issuer's voting power (a "Major
Issuance") and certain transactions involving Major Competitors of
FT/DT (as such term is defined under "Major Competitors" below).
Certain Business Transactions. The Class A Holders will have
the right to disapprove the following actions by the Issuer until
the second anniversary of the Initial Issuance Date (through action
by the holders of a majority of the shares of Class A Common
Stock):
(i) other than certain exempt transactions defined in
the Articles as "Exempt Asset Divestitures" and "Exempt Long
Distance Asset Divestitures", any transaction or series of
related transactions resulting in divestitures of assets with
a fair market value in excess of 20% of the Issuer's market
capitalization as of the date of the definitive agreement
relating to the last such divestiture;
(ii) other than Exempt Asset Divestitures and Exempt Long
Distance Asset Divestitures, any transaction or series of
related transactions (including a merger or other business
combination) resulting in the acquisition for cash or debt
securities having a maturity of less than one year of:
(A) businesses defined in the Articles as "Core
Businesses", the purchase price of which exceeds 20% of
the Issuer's market capitalization immediately prior to
such acquisition; or
(B) businesses other than Core Businesses, the
purchase price of which exceeds 5% of the Issuer's market
capitalization immediately prior to such acquisition,
provided that if an acquisition involves both Core Businesses
and other businesses and the ratio of the fair market value of
the Core Businesses to be acquired to the fair market value of
the other businesses to be acquired exceeds 1.75 to 1, then
the Class A Holders will only be entitled to disapproval
rights as set forth in clause (ii)(A) above;
(iii) the issuance by the Issuer of any capital stock or
debt with class voting rights and certain disapproval rights
which are in scope and duration as extensive as or more
extensive than the rights granted to the Class A Holders;
(iv) the declaration of extraordinary cash dividends or
cash distributions to stockholders of the Issuer during any
one year in excess of 5% of the market capitalization of the
Issuer;
(v) any merger or other business combination in which the
Issuer is not the surviving parent corporation; and
(vi) any Major Issuance.
Beginning two years after the Initial Issuance Date, the
Issuer may take any of the foregoing actions despite the
disapproval of such action by FT and DT. However, if despite such
disapproval the Issuer nevertheless takes any of the actions
described in clauses (i), (ii), (iii), (iv) or (vi) above following
the second anniversary, but prior to the fifth anniversary, of the
Initial Issuance Date, the transfer restrictions described below
applicable to the Class A Common Stock (other than those
restrictions relating to transfers to a holder of more than 5% of
the Issuer's voting power) will terminate, unless in the case of a
Major Issuance the Class A Holders have exercised their equity
purchase rights in respect of such Major Issuance.
In addition, during the five-year period following the Initial
Issuance Date, a Major Issuance will require the approval of
two-thirds of the Independent Directors (as defined in the
Articles), and after such five-year period will require the
approval of a majority of the Independent Directors as long as any
shares of Class A Common Stock are outstanding.
Governing Documents, Etc. The Class A Holders will have the
right to disapprove the following actions until no shares of Class
A Common Stock are outstanding:
(i) amendments to the Articles, the Bylaws of the Issuer,
as amended (the "Bylaws") or the Rights Plan that would
adversely affect the rights of the Class A Holders under the
Articles or the Bylaws;
(ii) issuance by the Issuer of any capital stock or debt
(including pursuant to a merger or other business combination)
with more than one vote per share or otherwise having
supervoting powers;
(iii) any merger or other business combination involving
the Issuer that results in a Change of Control (as hereinafter
defined in "Change of Control Rights"), unless the surviving
corporation expressly (x) assumes all of the Issuer's
obligations to the Class A Holders with respect to the assets
defined in the Articles as "Long Distance Assets" and all of
the provisions of the Registration Rights Agreement (as
defined in Item 5) and (y) agrees to be bound by the rights of
FT, DT and their affiliates to exercise greater control over
the Joint Venture (as defined in Item 6) following certain
occurrences; and
(iv) any merger or other business combination involving
the Issuer that does not result in a Change of Control, unless
(x) the Issuer survives as the parent entity, or (y) the
surviving corporation expressly assumes all of the Issuer's
obligations in respect of the rights of the Class A Holders
granted pursuant to the Articles, the Bylaws, the
Stockholders' Agreement (as defined in Item 5) and the
Registration Rights Agreement.
Long Distance Assets. Until the earliest of (i) the fifth
anniversary of the Initial Issuance Date, (ii) the date on which
the ownership by FT and DT of the Long Distance Assets is no longer
prohibited by Section 310 of the Communications Act of 1934, as
amended (the "Communications Act"), (iii) the date on which FT, DT,
Atlas (as defined in Item 5) or any qualifying subsidiary of FT, DT
or Atlas which owns interests in the JV Entities (collectively the
"FT/DT Parties") elect to accept the Issuer's offer to sell all of
the interests (the "Venture Interests") of the Issuer and certain
of its affiliates (the "Sprint Parties") in the companies
comprising the Joint Venture (the "JV Entities") following a Change
of Control, and (iv) the date on which the Sprint Parties exercise
their right to sell all of the Venture Interests to the FT/DT
Parties following a Change of Control (such period, the "Initial
Period"), no sale of a Cumulative amount of 5% or more of the fair
market value of Long Distance Assets, other than Exempt Long
Distance Asset Divestitures, may be consummated by the Issuer if it
is disapproved by the Class A Holders. As used herein, the term
"Cumulative" means a percentage representing the aggregate fair
market value of all Long Distance Assets previously sold or
proposed to be sold in the transaction for which such calculation
is being made, divided by the fair market value of Long Distance
Assets existing on the date of the definitive agreement with
respect to such transaction.
Major Competitors. During the ten-year period following the
Initial Issuance Date, the Issuer may not consummate any
transaction or take any other action that would result in, or is
taken for the purpose of encouraging or facilitating, a Major
Competitor of FT/DT (as defined in the Articles) having, or being
granted by the Issuer, any right, permission or approval to
acquire, 10% or more of the outstanding voting power of the Issuer
if such transaction or action is disapproved by the Class A
Holders, unless such transaction is a Strategic Merger (as defined
in the Articles).
Major Competitor Rights
Until the tenth anniversary of the Initial Issuance Date, if
a Major Competitor of FT/DT or of the Joint Venture obtains
securities representing 20% or more of the outstanding voting power
of the Issuer as the result of a Strategic Merger, the Class A
Holders will have the right to commit, within 30 days after the
consummation of such Strategic Merger, to purchase from the Issuer
or its successor in the Strategic Merger, and the Issuer or such
successor will be obligated to sell to the Class A Holders after
the Investment Completion Date, a number of shares of Class A
Common Stock such that the aggregate percentage ownership of the
Class A Holders shall be equal to the percentage ownership interest
of such Major Competitor following the consummation of such
Strategic Merger. If the Class A Holders do not so elect, (i) the
Issuer will take all actions necessary to lift all restrictions
imposed by the Issuer on the ability of the Class A Holders to
purchase shares from third parties, (ii) the Issuer will be
obligated to ensure that the Class A Holders will have rights
(other than rights deriving solely from the number of shares of
voting securities of the Issuer owned) in scope and duration at
least as extensive as certain rights granted by the Issuer to such
Major Competitor, regardless of whether the Class A Holders
exercise their right to increase their ownership, and (iii) if such
Major Competitor has been granted rights by the Issuer equivalent
or superior to the board representation rights of the Class A
Holders, the disapproval rights of the Class A Holders, the rights
with respect to Major Competitors of FT/DT or of the Joint Venture,
the right of first offer with respect to Long Distance Assets, the
equity purchase rights of the Class A Holders, and the protections
provided to the Class A Holders in the event of a Change of Control
or an Exclusionary Tender Offer (collectively, the "Minority
Rights") of the Class A Holders, then for a period of five years
following the date of closing of such transaction the FT/DT Parties
will obtain rights which will give them greater control over the
Joint Venture.
A "Major Competitor of FT/DT" is defined generally as a
company which materially competes with a major portion of the
telecommunications services businesses of FT, DT or Atlas in Europe
or the business of the Joint Venture, or a company which has taken
substantial steps to become such a Major Competitor and which FT or
DT has reasonably concluded, in its good faith judgment, will be
such a Major Competitor in the near future.
Change of Control Rights
If the Issuer determines to effect an Acquisition Proposal (as
hereinafter defined), the Issuer will conduct such transaction in
accordance with reasonable procedures to be determined by the Board
and permit FT and DT to participate in that process on a basis no
less favorable than that granted any other participant. In
general, this provision is designed to permit FT and DT to
participate as a bidder in such transaction on an equal basis with
all other bidders seeking to acquire control of the Issuer.
In addition, if the Board determines to effect a transaction
involving a Change of Control, the standstill provisions applicable
to FT and DT pursuant to the Standstill Agreement will terminate.
Finally, in the case of a Change of Control, the FT/DT Parties will
obtain rights which will give them greater control over the Joint
Venture, provided that if, at any time following such Change of
Control, the Sprint Parties offer to sell all of their Venture
Interests to the FT/DT Parties at a price equal to the appraised
value thereof, and the FT/DT Parties decline such offer, then, at
such time, such rights will terminate. During the two year period
beginning on the fifth anniversary of the consummation of a Change
of Control, the Sprint Parties will have the right to require the
FT/DT Parties to purchase all of the Venture Interests of the
Sprint Parties at the appraised value thereof. If the FT/DT
Parties accept such offer or such right is exercised by the Sprint
Parties, the disapproval rights of the Class A Holders with respect
to the Long Distance Assets of the Issuer will terminate.
As used herein, an "Acquisition Proposal" means a
determination by the Issuer to sell all or substantially all of its
assets or not to oppose a third-party tender, exchange or other
purchase offer for more than 35% of the voting power of the Issuer
or to sell control of the Issuer or to effect a merger or other
business combination, the result of which would be a 35% or larger
stockholder (other than FT, DT and those majority-owned
subsidiaries of FT and/or DT which satisfy certain criteria
("Qualified Subsidiaries")) in the resulting entity. A "Change of
Control" means:
(i) a decision by the Board to sell control of the
Issuer or not to oppose a third party tender offer for the
Issuer's voting securities representing more than 35% of the
voting power of the Issuer, or
(ii) a change in the identity of the majority of the
Board due to (x) a proxy contest (or the threat to engage in
a proxy contest) or the election of directors by the holders
of Preferred Stock, or (y) any unsolicited tender, exchange or
other purchase offer which has not been approved by a majority
of the Independent Directors,
except that neither a Strategic Merger nor any transaction between
the Issuer and FT and/or DT shall be deemed to be a Change of
Control.
Exclusionary Tender Offer Rights
In addition to the rights of the Class A Holders upon a Change
of Control, if the Board determines not to oppose a tender offer by
a person other than FT, DT or their respective affiliates for 35%
or more of the Issuer voting power which does not permit the Class
A Holders to sell an equal or greater percentage of their shares as
the other holders of the voting securities of the Issuer are
permitted to sell (an "Exclusionary Tender Offer"), the Class A
Holders will have the right (but not the obligation) to cause the
conversion into Common Stock of all or part of the shares of Class
A Common Stock held by them. Upon such election, each share of
Class A Common Stock so designated will automatically convert into
one duly issued, fully paid and nonassessable share of Common
Stock.
In the event of an Exclusionary Tender Offer in which the
Class A Holders do not elect to convert their shares of Class A
Common Stock into Common Stock as described above, upon the
completion of the purchase by a third party of securities
representing not less than 35% of the Issuer's voting power in such
Exclusionary Tender Offer, the Class A Holders will have the option
to require the Issuer to purchase at the tender offer price all,
but not less than all, of the shares that they were unable to
tender on the same basis as the other stockholders, unless under
the terms of the tender offer such Class A Holders are entitled to
receive publicly traded securities and/or cash in an equivalent
amount in a business combination transaction required to be
effected within 90 days after the consummation of the tender offer.
Equity Purchase Rights
The Stockholders' Agreement provides that, for so long as the
Committed Percentage of the Class A Holders is not less than 10%
for more than a specified period and unless such right is otherwise
terminated, when the Issuer issues additional shares of Common
Stock or other voting securities each of the Class A Holders will
have the right, subject to certain restrictions, to maintain its
proportionate ownership of the Issuer's voting power (based on such
Class A Holder's Committed Percentage) by purchasing additional
shares of Class A Common Stock from the Issuer. See, generally,
the Stockholders' Agreement attached to the Original Schedule 13D
Filing as Exhibit 7 and incorporated herein by reference. The
description of the Stockholders' Agreement contained herein is
qualified in its entirety by reference to such exhibit.
The purchase price for such shares will depend upon the nature
of the issuance which gives rise to such purchase right, as
provided in the Stockholders' Agreement.
Major Issuance Rights
The Stockholders' Agreement provides that, if the Committed
Percentage of the Class A Holders is diluted to less than 10% of
the outstanding voting power of the Issuer as a result of a Major
Issuance, the Class A Holders will be entitled (but not obligated),
in addition to any equity purchase rights they may have, to commit
to the Issuer within 180 days after such Major Issuance to increase
their interest to 10% of the outstanding voting power of the Issuer
through purchases from third parties during the three-year period
following the consummation of such Major Issuance.
Long Distance Assets Rights
The Stockholders' Agreement provides that, following the
Initial Period (as defined in the Stockholders' Agreement) and
prior to the tenth anniversary of the Initial Issuance Date, with
certain exceptions, if a disposition of Long Distance Assets by the
Issuer would result in the disposition of a Cumulative amount of
30% or more of the fair market value of Long Distance Assets since
the date of the Investment Agreement, the Class A Holders will have
a right of first offer with respect to the assets of which the
Issuer proposes to dispose, unless such right of first offer has
been otherwise terminated. In connection with such a disposition,
for so long as the restrictions contained in Section 310 of the
Communications Act apply, FT and DT will have the right to assign
their right to purchase such Long Distance Assets to a buyer (a
"Qualified LD Purchaser") having the legal and financial capacity
to buy such assets which would not be a Major Competitor of Sprint
(as hereinafter defined in "Conversion of Class A Common Stock --
Conversion Following Breach of Joint Venture Agreement") based on
the business of the Issuer following such disposition. Upon
learning the identity of the prospective Qualified LD Purchaser
proposed by FT and DT, the Issuer will be entitled to abandon the
disposition which gave rise to such right in FT and DT.
Registration Rights
The Class A Holders have been granted certain registration
rights by the Issuer pursuant to the Registration Rights Agreement.
See, generally, the Registration Rights Agreement attached to the
Original Schedule 13D Filing as Exhibit 3 and incorporated herein
by reference. The description of the Registration Rights Agreement
contained herein is qualified in its entirety by reference to such
exhibit.
The holders of a majority of the Class A Common Stock will be
entitled to demand one registration in any 12-month period, up to
a maximum of seven registrations. The Issuer will be responsible
for the registration expenses in connection with the first five of
such registrations; the holders of the Class A Common Stock
requesting registration will be responsible for the registration
expenses in connection with the remaining two registrations. The
Issuer is not required to effect any registration unless the market
value of the Class A Common Stock requested to be registered
exceeds $200 million. The holders of the Class A Common Stock will
also have the right to participate in all registrations of Common
Stock by the Issuer on behalf of itself or any other party, other
than registrations on Forms S-4 or S-8, registrations in connection
with an exchange offer or offerings solely to the Issuer's existing
stockholders or pursuant to dividend reinvestment plans or dividend
reinvestment and stock purchase plans.
Transfer Restrictions
Pursuant to the Stockholders' Agreement, the Class A Holders
have agreed not to transfer any equity interests in the Issuer
until the fifth anniversary of the Initial Issuance Date, except
for transfers to FT, DT, Qualified Subsidiaries, and in certain
circumstances, Qualified Stock Purchasers (such permitted transfers
being "Permitted Transfers"). After the general prohibition on
transfers is no longer applicable, until such time as the sum of
(i) the Committed Percentage of the Class A Holders and (ii) the
percentage of the voting power of the Issuer represented by voting
securities of the Issuer which the Class A Holders have the right
to commit to purchase pursuant to the Investment Agreement and the
Stockholders' Agreement is less than 3-1/2% of the outstanding
voting power of the Issuer for more than 150 days, no Class A
Holder may make any transfer to, or resulting in, a holder of more
than 5% of the voting power of the Issuer, other than in an
underwritten public offering. In connection with any such public
offering, a Class A Holder may not to the best of its knowledge (i)
sell more than 2% of the outstanding voting power of the Issuer to
any person or group that, prior to such sale, owned 3% or more of
such voting power of the Issuer, (ii) sell more than 5% of the
outstanding voting power of the Issuer to any person or group or
(iii) sell to a person or group required under Section 13(d) of the
Exchange Act to file a Schedule 13D with respect to the Issuer (a
"Schedule 13D Filer") or to a person or group who, as a result of
such sale, would become a Schedule 13D Filer.
So long as the sum of (i) the Committed Percentage of the
Class A Holders and (ii) the percentage of the voting power of the
Issuer which the Class A Holders have the right to commit to
purchase pursuant to the Investment Agreement and the Stockholders'
Agreement is greater than 5%, but less than 9% (immediately
following a transfer of shares of Class A Common Stock by the Class
A Holders) or 10% (for more than 150 days immediately following the
issuance of additional voting securities of the Issuer other than
pursuant to a Major Issuance), no Class A Holder may transfer
shares of Class A Common Stock representing more than 1% of the
voting power of the Issuer to any one person or group of persons in
any transaction or series of transactions, except in connection
with a public offering, or transfer shares other than in a public
offering to any Major Competitor of Sprint (as hereinafter
defined).
Each proposed sale by the Class A Holders of equity securities
of the Issuer to a third party, other than Permitted Transfers,
will be subject to the rights of first offer and first refusal in
favor of the Issuer specified in the Stockholders' Agreement.
In the event of a Change of Control resulting from a
determination by the Board to sell all or substantially all of the
assets of the Issuer (or not to oppose a third-party tender offer
for more than 35% of the Issuer's voting power) or to sell control
of the Issuer or to effect a merger or other business combination,
the result of which is a 35% or larger stockholder (other than FT,
DT or any of their Qualified Subsidiaries) in the resulting entity,
the Class A Holders generally will have the right to sell their
shares of Class A Common Stock in such transaction free of any
restriction on transfer (except for transfers to large holders) set
forth in the Stockholders' Agreement.
The transfer restrictions (other than those relating to
transfers to large holders) and the rights of first offer and first
refusal will terminate (i) if the Joint Venture is terminated due
to a material breach by the Issuer, (ii) on the first anniversary
of a termination of the Joint Venture for any reason other than a
material breach by the Issuer or the FT/DT Parties, (iii) if the
Issuer breaches certain material provisions of the Investment
Agreement or the related documents, (iv) if the Issuer proceeds
with a transaction involving an Acquisition Proposal, (v) if the
Class A Holders own shares (A) representing less than 10% of the
outstanding Common Stock and the Class A Common Stock for 150 days
due to share issuances by the Issuer (other than a Major Issuance),
or (B) representing less than 9% of the outstanding Common Stock
and the Class A Common Stock due to sales by the Class A Holders
(provided that the Issuer's right of first offer shall continue
until the Class A Holders own or are committed to acquire or have
the right to commit to acquire less than 5% of the voting power of
the Issuer), (vi) if the Class A Holders own shares representing
less than 10% of the outstanding Common Stock and Class A Common
Stock as a result of a Major Issuance and the Class A Holders fail
to exercise their right to purchase additional Class A Common Stock
in connection therewith, (vii) if there is a greater than 20%
holder of voting securities of the Issuer (other than the Class A
Holders) or there is a Change of Control, or (viii) if the Issuer
undertakes certain transactions between the second and fifth
anniversaries of the Initial Issuance Date notwithstanding the
disapproval of FT and DT (other than with respect to a Major
Issuance following which the Class A Holders exercise their equity
purchase rights with respect thereto).
Standstill Restrictions
As a condition to entering into the Investment Agreement, FT,
DT and the Issuer have entered into the Standstill Agreement. See,
generally, the Standstill Agreement attached to the Original
Schedule 13D Filing as Exhibit 4 and incorporated herein by
reference. The description of the Standstill Agreement contained
herein is qualified in its entirety by reference to such exhibit.
The Standstill Agreement imposes restrictions on the ability
of FT and DT and their respective "affiliates" and "associates" (as
defined in the Standstill Agreement) to acquire additional voting
power in the Issuer that would result in FT, DT and their
respective affiliates and associates beneficially owning more than
20% of the Issuer's voting power during the first fifteen years
following the date of the Standstill Agreement (the "Initial
Percentage Limitation") and more than the lesser of (i) 30% of the
Issuer's voting power and (ii) that percentage of the Issuer's
outstanding voting securities equal to 80% of the Foreign Ownership
Limitation (as hereinafter defined) (the "Subsequent Percentage
Limitation," and together with the Initial Percentage Limitation,
the "Percentage Limitations"). For purposes of the Standstill
Agreement, the "Foreign Ownership Limitation" means the maximum
aggregate percentage of the Issuer's voting securities 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 the Issuer or any of its affiliates to conduct
any portion of the business of the Issuer or such affiliate, as
such maximum aggregate percentage may be increased from time to
time by amendments to Section 310 or by actions of the FCC. In
addition, the Standstill Agreement imposes restrictions on the
ability of FT, DT and their respective affiliates and associates to
initiate or participate in proposals with respect to the control of
the Issuer. The term "associate" in the Standstill Agreement
generally has the meaning ascribed to such term in Rule 12b-2 under
the Exchange Act, except that such definition has been limited with
respect to the "associates" of FT and DT for purposes of the
Standstill Agreement.
Under the Standstill Agreement, FT and DT and their respective
affiliates generally will be permitted, subject to the Rights Plan,
to increase their beneficial ownership beyond the applicable
Percentage Limitation to the extent required to match the
percentage ownership of voting securities of the Issuer owned by
any other shareholder, provided that the beneficial ownership of FT
and DT and their respective affiliates does not exceed 80% of the
Foreign Ownership Limitation. In addition, neither FT nor DT shall
be deemed in violation of the beneficial ownership restriction if
the beneficial ownership of the Issuer's voting securities by FT
and DT exceeds the applicable Percentage Limitation solely due to
(i) an acquisition of the Issuer's voting securities by the Issuer,
unless FT and DT have previously been notified of such acquisition,
or (ii) purchases by FT and DT of voting securities of the Issuer
in reliance on information regarding the number of outstanding
voting securities of the Issuer provided by the Issuer to FT and
DT, unless FT and DT have previously been notified that such
information is incorrect.
If an acquisition by FT or DT or their respective affiliates
and associates of beneficial ownership of additional voting
securities of the Issuer otherwise permitted by the Standstill
Agreement is prohibited because it would result in FT or DT and
their respective affiliates and associates beneficially owning a
percentage of the outstanding voting securities of the Issuer
greater than that percentage equal to 80% of the Foreign Ownership
Limitation, then in accordance with the terms of the Stockholders'
Agreement, FT and DT may assign their rights to purchase the
additional shares of voting securities of the Issuer they would
otherwise be entitled to purchase under the Standstill Agreement to
an entity that FT and DT reasonably believe has the legal and
financial ability to purchase such shares and that would not be an
Alien or a Major Competitor of Sprint immediately following such
purchase (a "Qualified Stock Purchaser").
The Standstill Agreement provides a number of other
restrictions on the actions or public announcements which may be
undertaken or made by FT, DT and their respective affiliates and
associates.
FT and DT have agreed to cause (i) their Qualified
Subsidiaries which acquire shares of Class A Common Stock, (ii)
each person other than FT, DT or a passive financial institution
which acquires an equity interest in a Qualified Subsidiary (each,
a "Strategic Investor"), and (iii) each Qualified Stock Purchaser
which acquires any shares of Class A Common Stock, in each case to
execute a standstill agreement prior to and as a condition to the
effectiveness of such acquisition.
Redemptions
Outstanding shares of Common Stock held by Aliens (as defined
in the Communications Act) and, in certain circumstances, Class A
Common Stock held by Aliens may be redeemed at prices provided in
the Articles by action of the Board to the extent necessary, in the
judgment of the Board, to comply with Section 310 of the
Communications Act. Shares of Class A Common Stock may be redeemed
only if, and only to the extent that, the outstanding shares of
Class A Common Stock represent votes constituting greater than 20%
of the aggregate voting power of the Issuer immediately prior to
the time of such redemption. In addition, prior to redeeming
shares of Class A Common Stock, the Issuer is required to consult
in good faith with the Class A Holders to consider alternatives to
redemption, and the Issuer may not redeem such shares unless the
Independent Directors determine in good faith that, after
considering all reasonable alternatives, the failure to redeem such
shares would have a material adverse effect on the Issuer.
Conversion of Class A Common Stock
As discussed below, under certain circumstances, shares of
Class A Common Stock will automatically convert into shares of
Common Stock.
Conversion Following Reduction in Ownership. If the aggregate
Committed Percentage of the Class A Holders is below 10% for more
than 180 consecutive days other than due to sales by the Class A
Holders, each outstanding share of Class A Common Stock will
automatically convert into one share of Common Stock unless the
Committed Percentage falls below 10% for more than 180 consecutive
days due to a Major Issuance, in which case the Class A Common
Stock will not convert until three years after the consummation of
such Major Issuance. If the Committed Percentage falls below 10%
due to a sale by the Class A Holders, each outstanding share of
Class A Common Stock will automatically and immediately convert
into one share of Common Stock.
Conversion Following Breach of Certain Related Investment
Documents. Except as described below, each outstanding share of
Class A Common Stock will, following certain procedural steps,
convert into one share of Common Stock if (i) FT, DT or any
Qualified Subsidiary breaches in any material respect its
obligations with respect to transfers of Class A Common Stock to
large stockholders, (ii) FT, DT or any Qualified Subsidiary
breaches in any material respect any other restriction on the
transfer of Class A Common Stock or (iii) FT, DT or any Qualified
Subsidiary breaches its obligations under certain specified
provisions of the Standstill Agreement or under any standstill
agreement into which such Qualified Subsidiary has entered (a
"Qualified Subsidiary Standstill Agreement"), as the case may be,
subject to certain procedures.
Conversion Following Breach of the Joint Venture Agreement.
Except as described below, each outstanding share of Class A Common
Stock will automatically convert into one share of Common Stock if
(i) the Sprint Parties receive the right to control the management
of the Joint Venture as a result of the sale by Atlas of all or a
substantial part of its telecommunications assets used to provide
services to the Joint Venture to a Major Competitor of Sprint or as
a result of certain breaches of the Joint Venture Agreement (as
defined in Item 5) or the Related Joint Venture Documents or (ii)
the Joint Venture is terminated due to certain actions by the FT/DT
Parties. A "Major Competitor of Sprint" is defined generally as a
company which materially competes with a major portion of the
telecommunications services business of the Issuer in North America
or the business of the Joint Venture or a company which has taken
substantial steps to become such a Major Competitor.
If the Joint Venture is terminated due to certain actions on
the part of the Sprint Parties or if the FT/DT Parties receive the
right to control the management of the Joint Venture due to certain
breaches of the Joint Venture Agreement by the Sprint Parties, each
share of Class A Common Stock outstanding will automatically
convert into one share of Common Stock on the third anniversary of
such termination. If the Joint Venture is terminated for reasons
other than those described in the preceding paragraph or the
preceding sentence, (i) on the date of such termination the
Minority Rights of the Class A Holders, other than rights to
representation on the Board and with respect to certain matters
relating to the governing documents and related matters of the
Issuer, will immediately terminate and (ii) on the third
anniversary of such termination of the Joint Venture, each share of
Class A Common Stock outstanding will automatically convert into
one share of Common Stock.
Conversion Following Change of Control. Upon the occurrence
of a Change of Control (other than a Change of Control arising from
a change in the identity of a majority of the Board due to (i) a
proxy contest, (ii) the election of directors by the holders of the
Preferred Stock, or (iii) an unauthorized tender offer not approved
by a majority of the Independent Directors), the Minority Rights,
except for rights as to Long Distance Assets and rights to
participate in a Change of Control, will terminate. The Issuer is
obligated in such a situation to negotiate in good faith with any
potential acquiror of control to provide the Class A Holders with
rights equivalent to the rights of the Class A Holders to
representation on the Board. Upon such Change of Control, the
Class A Holders will have the right, but not the obligation, to
cause the conversion of their Class A Common Stock into Common
Stock.
Conversion Following Failure to Maintain Ownership Ratios. If
the ratio of the number of shares of Class A Common Stock held by
either of FT or DT and its Qualified Subsidiaries to the number
held by the other of FT or DT and its Qualified Subsidiaries
exceeds 60/40 for more than 60 days after notice from the Issuer to
FT and DT, each share of Class A Common Stock outstanding will
automatically convert into one share of Common Stock.
Conversion Following Transfers to Persons Other Than FT, DT,
a Qualified Subsidiary or a Qualified Stock Purchaser. If any
shares of Class A Common Stock are transferred (other than pursuant
to a transfer to FT, DT, a Qualified Subsidiary or a Qualified
Stock Purchaser in accordance with the Stockholders' Agreement)
without the approval of the Issuer, the shares of Class A Common
Stock so transferred will automatically convert into shares of
Common Stock.
Conversion Following Actions by Qualified Stock Purchasers.
If a Qualified Stock Purchaser becomes a Major Competitor of the
Issuer, the shares of Class A Common Stock owned by such Qualified
Stock Purchaser will immediately convert into Common Stock. In
addition, if such Qualified Stock Purchaser (i) breaches in any
material respect its obligations with respect to transfers of Class
A Common Stock to large stockholders, (ii) breaches in any material
respect any other restrictions on the transfer of Class A Common
Stock or (iii) breaches its obligations under certain specified
provisions of a standstill agreement into which such Qualified
Stock Purchaser has entered in accordance with the Standstill
Agreement (a "Qualified Stock Purchaser Standstill Agreement"), the
shares of Class A Common Stock owned by such Qualified Stock
Purchaser will, following certain procedural steps, immediately
convert into Common Stock.
Effect of Conversion of Class A Common Stock. A conversion of
Class A Common Stock into Common Stock will in most circumstances
cause the termination of the disapproval rights of the Class A
Holders under the Articles and the termination of the rights of the
Class A Holders under the Stockholders' Agreement with respect to
(a) dispositions of Long Distance Assets, (b) Changes of Control,
(c) equity purchase rights, (d) Major Competitors of FT/DT, (e)
Major Issuances, and (f) certain other matters. Upon such
conversion of the Class A Common Stock, the term of office of all
Class A Directors will terminate. The vacancies resulting from
such termination will be filled by the remaining Directors then in
office, acting by majority vote.
The shares of Class A Common Stock issued by the Issuer
pursuant to the Investment Agreement, the Stockholders' Agreement
or the Articles subsequent to a conversion of all of the shares of
Class A Common Stock into Common Stock will automatically convert
into shares of Common Stock.
Conversion in Connection With An Exclusionary Tender Offer.
If the Board determines not to oppose an Exclusionary Tender Offer
by a person other than FT, DT or their respective affiliates, and
the terms of such tender offer do not permit the Class A Holders to
sell an equal or greater percentage of their shares in Class A
Common Stock as the other stockholders of the Issuer are permitted
to sell in such tender offer, the Class A Holders may require the
Issuer to convert certain of their shares of Class A Common Stock
into Common Stock.
Conversion of Common Stock into Class A Common Stock. Until
the conversion of all of the shares of Class A Common Stock into
shares of Common Stock, each share of Common Stock acquired by a
Class A Holder will automatically convert into one share of Class
A Common Stock on the date of such acquisition. The ability of FT
and DT to acquire shares of Common Stock is limited by the
Standstill Agreement.
Certain Additional Relevant Documents
Coordination Agreement
The Coordination Agreement, dated as of July 31, 1995, between
FT and DT (the "Coordination Agreement") sets forth the terms on
which FT and DT agree to coordinate their joint investment in the
Issuer. In addition to their general undertaking to use reasonable
efforts to reach consensus on coordinated action within the
necessary time frames, FT and DT have agreed, among other things,
as follows:
(a) In the event that FT and DT are permitted to acquire
additional shares of Class A Common Stock (other than pursuant
to Sections 2.1 through 2.5 of the Investment Agreement) and
Common Stock, each of FT and DT will be entitled to acquire
one half of the aggregate amount thereof which they are both
entitled to acquire, provided that if either of them owns less
than half of such shares at such time, the party owning less
shall be entitled to acquire up to all of such additional
shares until both FT and DT own an equal number of voting
securities of the Issuer, and provided, further, that if
either FT or DT does not want to acquire any or all of such
additional shares, the other of them may acquire such unwanted
shares.
(b) In the event that FT and DT cannot decide how to
vote their Class A Common Stock (including how to exercise
their disapproval rights) with respect to any matter despite
their undertakings to do so, they generally agree to abstain
from voting their Class A Common Stock with respect to such
matter.
(c) FT and DT will alternate between themselves from
year to year (with the first year being determined by lot) the
right to appoint an extra director to the Board at such times
as they are entitled to appoint an odd number of directors to
the Board, and will alternate in a manner to be determined
their right to appoint one or an odd number of directors to
committees of the Board.
(d) In the event that FT and DT are entitled to acquire
all or part of the Long Distance Assets, each of FT and DT
will be entitled to acquire an equal undivided interest in
such assets, provided that if either FT or DT does not want to
acquire any or all of its share of such Long Distance Assets
the other of them may acquire such unwanted share.
(e) In the event that FT and DT are entitled to propose
a transaction resulting in a Change of Control of the Issuer,
both parties agree to make such proposal jointly or not at
all. If one party desires to make a proposal alone, it will
not be entitled to proceed without the other's consent.
Subject to applicable fiduciary and other duties, if one of
them has made a permitted Change of Control proposal the other
of them will not transfer its Class A Common Stock into such
a proposal made by a third party.
(f) In the event that FT or DT propose to sell any of
their shares of Class A Common Stock, the other of them shall
generally have a right of first refusal to acquire such
shares.
(g) Each of FT and DT have agreed to indemnify the other
for Indemnifiable Losses (as defined in the Coordination
Agreement) caused by it as the result of breaches by it of the
Coordination Agreement, the Investment Agreement, and the
related documentation, among other matters.
See, generally, the Coordination Agreement attached to the Original
Schedule 13D Filing as Exhibit 5 and incorporated herein by
reference. The description of the Coordination Agreement contained
herein is qualified in its entirety by reference to such exhibit.
Joint Venture Agreement
Concurrently with the First Closing under the Investment
Agreement, the Issuer, FT and DT also consummated a closing under
the Joint Venture Agreement, dated June 22, 1995, as amended (the
"Joint Venture Agreement"), among the Issuer, Sprint Sub (as
defined in Item 5), FT, DT and Atlas. The Issuer, Sprint Sub, FT,
DT and Atlas are collectively referred to as the "Joint Venture
Parties." The Joint Venture Parties entered into the joint venture
(the "Joint Venture") for the purpose of providing certain global
telecommunications services (the "Joint Venture Services") from
time to time, which at the outset of the Joint Venture will include
(i) global international data, voice and video business services
for multinational companies and business customers, (ii)
international services for consumers, initially based on card
services for travelers, and (iii) a "carrier's carrier" business
which will provide certain transport services for the Issuer, FT,
DT and other carriers.
The Joint Venture Services will be distributed in the rest of
Europe (other than France and Germany) by a group of JV Entities
referred to as the "ROE Group" and in the rest of the world (other
than Europe and the United States) by a separate group of JV
Entities referred to as the "ROW Group." The Joint Venture Parties
also formed an additional group of JV Entities referred to as the
"GBN Group" to own and operate a global transmission network over
which the Joint Venture Services and other traffic will be routed
as agreed by the Joint Venture Parties, subject to applicable law
and to existing arrangements of the Joint Venture Parties. With
respect to the ROW Group and the GBN Group, each of Sprint Sub and
Atlas initially will own, directly or indirectly, 50% of the
outstanding voting equity of the parent entity of each such group.
With respect to the ROE Group, Sprint Sub and Atlas initially will
own, directly or indirectly, 33-1/3% and 66-2/3%, respectively, of
the voting equity of the parent entity of such group.
See, generally, the Joint Venture Agreement attached to the
Original Schedule 13D Filing as Exhibit 6 and incorporated herein
by reference. The description of the Joint Venture Agreement
contained herein is qualified in its entirety by reference to such
exhibit.
Bylaws Amendments
The amendments to the Bylaws of the Issuer (the "Bylaws
Amendments") approved and adopted at a special meeting of
stockholders of the Issuer held on January 29, 1996, and effective
upon the Initial Issuance Date, reflected the establishment of the
Class A Stock and the directors to be elected by the Class A
Holders. The Bylaws Amendments also add a provision requiring a
majority of the Board to be Independent Directors. See, generally,
the Bylaws Amendments attached to the Original Schedule 13D Filing
as Exhibit 9 and incorporated herein by reference. The description
of the Bylaws Amendments contained herein is qualified in its
entirety by reference to such exhibit.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
All exhibits to this Amendment No. 1 to the Schedule 13D are
incorporated by reference to the Original Schedule 13D Filing filed
on behalf of DT and FT on February 12, 1996.
Exhibit 1 Joint Filing Agreement, dated February 9,
1996, between France Telecom and Deutsche
Telecom AG relating to the filing of this
joint Schedule 13D statement.
Exhibit 2 Investment Agreement, dated as of July 31,
1995, as amended November 21, 1995, among
Sprint Corporation, France Telecom and
Deutsche Telekom AG.
Exhibit 3 Registration Rights Agreement, dated January
31, 1996, among Sprint Corporation, France
Telecom and Deutsche Telekom AG.
Exhibit 4 Standstill Agreement, dated as of July 31,
1995, among Sprint Corporation, France Telecom
and Deutsche Telekom AG.
Exhibit 5 Coordination Agreement, dated as of July 31,
1995, between France Telecom and Deutsche
Telekom AG.
Exhibit 6 Joint Venture Agreement, dated June 22, 1995,
as amended January 31, 1996, among Sprint
Corporation, Sprint Global Venture, Inc.,
France Telecom, Deutsche Telekom AG and Atlas
Telecommunications SA.
Exhibit 7 Stockholders' Agreement, dated January 31,
1996, among Sprint Corporation, France Telecom
and Deutsche Telekom AG.
Exhibit 8 Charter Amendments
Exhibit 9 Bylaws Amendments
After reasonable inquiry and to my best knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
DATED: May 6, 1996 DEUTSCHE TELEKOM AG
By: /s/ Joachim Kroske
Chief Financial Officer
<PAGE>
After reasonable inquiry and to my best knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
DATED: May 6, 1996 FRANCE TELECOM
By: /s/ Jacques Champeaux
Directeur Executif de
la Branche Enterprises
<PAGE>
<TABLE>
<CAPTION>
Schedule I
Directors and Executive Officers of Deutsche Telekom AG
I. Vorstand
------------
<S> <C>
Dr. Ron Sommer Erik Jan Nederkoorn (citizen of
Vorstandsvorsitzender the Netherlands)
Deutsche Telekom AG Vorstandsmitglied
Postfach 20 00 Deutsche Telekom AG
Postfach 20 00
53105 Bonn
53105 Bonn
<PAGE>
Detlef Buchal Dipl. Ing. Gerd Tenzer
Deutsche Telekom AG Vorstandsmitglied
Postfach 20 00 Deutsche Telekom AG
Postfach 20 00
53105 Bonn
53105 Bonn
<PAGE>
Fredrich Gorts
Vorstandsmitglied
Deutsche Telekom AG
Postfach 20 00
53105 Bonn
<PAGE>
Dr. Hagen Hultsch
Vorstandsmitglied
Deutsche Telekom AG
Postfach 20 00
53105 Bonn
<PAGE>
Dr. Heinz Klinkhammer
Vorstandsmitglied
Deutsche Telekom AG
Postfach 20 00
53105 Bonn
Dr. Joachim Kroske
Vorstandsmitglied
Deutsche Telekom AG
Postfach 20 00
53105 Bonn<PAGE>
Dr. Herbert May
Vorstandsmitglied
Deutsche Telekom AG
Postfach 20 00
53105 Bonn
<PAGE>
<CAPTION>
II. Aufsichtsrat
- - - ----------------
Veronika Altmeyer Dr. Gert Haller
stellvertr. Vorsitzende Sprecher der Geschaftsfuhrung
des Auf der Wustenrot Holding GmbH
sichtsrats der Deutschen
Telekom AG 71630 Ludwigsburg
Deutsche
Postgewerkschaft
Postfach 71 02 38
60525 Frankfurt/M. <PAGE>
Dipl. Ing. Luther Holzwarth
Paul Burkhart Mitglied im Betriebsrat bei der
Prasident der Telekom Niederlassung 2 Stuttgart
Direktion Telekom Postach 50 20 20
Stuttgart
Postfach 10 10 40 70369 Stuttgart
70009 Stuttgart <PAGE>
Gert Becker Dr. sc. techn. Dieter Hundt
Vorsitzender des Geschaftsfuhrender Gesellschafter
Vorstands Allgaier-Worker GmbH & Co. KG
der Degussa AG Postfach 40
60287 Frankfurt/M. 73062 Uhingen
<PAGE>
Parlamentarischer Dipl. Ing. Franz-Josef Klare
Staatssekretar Deutsche Postgewerkschaft
Rainer Funke, MdB Lortzingstr. 13
Bundesministerium fur
Justiz 48145 Munster
Heinemannstr. 6
53175 Bonn<PAGE>
Hans Gimstein Bundesminster a.D.
Vorsitzender des Dr. Ing. Paul Kruger, MdB
Gesamtbetriebstrats Bundeshaus
der Deutschen Telekom AG
Friedrich-Ebert-Allee 53115 Bonn
140
53113 Bonn<PAGE>
Prof. Dr. Peter Glotz Rolf-Dieter Leister
Bundeshaus Vorsitzender des Aufsichtarates
der Deutschen Telekom AG
53113 Bonn Postfach 20 00
53105 Bonn<PAGE>
Dr. Klaus Gotte Dr. h.c. Andre Leysen
Vorsitzender des Vorsitzender des Aufsichstrats
Vorstands der AGFA-GEVAERT
der MAN AG Septe Straat 27
Ungerer Str. 69
B-2640 Morstel
80805 Munchen<PAGE>
Michael Loffler
Stellvertr. Vorsitzender
des Betriebsrats
Telekom Niederlassung Leipzig
Grimmaische Steinweg 9
04103 Leipzig<PAGE>
Maud Pagel
Stellvertr. Vorsitzende
des Gesamtbetriebsrats
der Deutschen Telekom AG
Friedrich-Ebert-Allee 140<PAGE>
Klaus Pleines
Bezirksleiter der
Deutschen Postgewerkschaft
Bezirk Koblenz/Trier
Postfach 405
56004 Koblenz<PAGE>
Will Russ
Bundesvorsitzender des
Deutschen
Postverbandes
Schaumburg-Lippe-Str. 5
53113 Bonn<PAGE>
Ursula Steinke
Mitglied im Betriebsrat
(SCZ)
Bunsenstr. 29
24145 Kiel<PAGE>
Prof. Dr. h.c. Dieter Stolte
Indendant des ZDF
Postfach 40 40
55100 Mainz
<PAGE>
<CAPTION>
Schedule II
Directors and Executive Officers of France Telecom
1. Highest ranking executives of France Telecom
<S> <C>
Michel Bon
President
Chairman
Charles Rozmaryn
Directeur General
Chief Executive Officer
Jean-Jacques Damlamian
Directeur Executif de la
Branche
Developpement
Group Executive
Jean-Yves Gouiffes
Directeur Executif de la
Branche
Reseau
Group Executive
Jacques Champeaux
Directeur Executif de la
Branche
Enterprises
Group Executive
Jean-Francois Pontal
Directeur Executif de la
Branche
Grand Public
Group Executive
Pierre Dauvillaire
Directeur Executif de la
Branche
Ressources
Group Executive
<PAGE>
<CAPTION>
2. Members of the Board of France Telecom
<S> <C>
Mr. Pierre PEUCH Mr. Michel BLANGY
Employee of France Telecom Directeur General
de l'Administration
Ministere de l'Interieur
1 Bis, place des Saussaics
75800 Paris
Mr. Jean-Francois DAVOUST Mr. Pierre LESTRADE
Employee of France Telecom Inspecteur General
Ministere des Postes et
Telecommunications
et de l'Espacc
Inspection Generale
20, avenue de Segur
75700 Paris
Mrs. Monique MARTIN Mr. Didier LOMBARD
Employee of France Telecom Directeur General
Direction des Strategies
Industrielles
Ministere de l'Industrie
et du Commerce Exterieur
Mrs. Francine BAVAY Mr. Thierry AULAGNON
Employee of France Telecom Chef du Service des
Financements et des
participations
Ministere des Finances
Direction du Tresor
Mr. Christope AGUITON Mr. Francois GRAPPOTTE
Employee of France Telecom President Directeur General
de LEGRAND
Societe LEGRAND
128, av. due Marcchal
de Lattre -de- Tassigny
87045 Limoges Cedex
<PAGE>
Mr. Raymond DURAND Mr. Yannick d'ESCATHA
Employee of France Telecom Administrateur General
du CEA
CEA
31-33, rue de la Federation
75752 Paris Cedex 15
Mr. Roland SAINT-CRIQ Mr. Marc LADREIT de
Employee of France Telecom LACHARRIERE
President de FIMALAC
FIMALAC
97, rue de Lille
75007 Paris
Mr. Gilles MORTIER Mr. Michel BON
Directeur de la Federation President de France Telecom
des Familles Rurales
Federation des Familles Rurales
7. Cite d'Antin
75009 Paris
Mr. Pierre POTIER Mr. Francis BRUN-BUISSON
Directeur General Chef du Service Juridique et
de la recherche et de la Technique de l'Information
Technologic Service Juridique et
Direction Generale Technique de l'Information
de la Recherche et de la 69, rue de Varenne
Technologic 75007 Paris
1, rue Descartes
75231 Paris Cedex 05
<PAGE>
Mr. Eric HAYAT Mr. Christophe
Directeur General Adjoint de BLANCHARD-DIGNAC
STERIA ct President de Directeur du Budget
Syntec-Informatique Ministere des Finances
STERIA Direction du Budget
12, rue Paul Dautier 139 rue de Bercy
78140 Velizy 75572 Paris Cedex 12
Syntec-Informatique
Mr. Simon NORA
Conseiller Banque Lehman
Brothers
56, rue du Fg Saint Honore
75008 Paris
</TABLE>
