Registration No. 33-58488
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 2 on
Form S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
SPRINT CORPORATION
(Exact name of registrant as specified in its charter)
Kansas 48-0457967
(State of incorporation) (I.R.S. Employer
Identification No.)
P.O. Box 11315, Kansas City, Missouri 64112, (913) 624-3000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
DON A. JENSEN
Vice President and Secretary
Sprint Corporation
P.O. Box 11315
Kansas City, Missouri 64112
Telephone (913) 624-3326
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
________________________
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this
Registration Statement.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. X
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. ___
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. ___
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. ___
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. ___
Explanatory Note
This Post-Effective Amendment No. 2 is being filed with
respect to an aggregate of 1,163,514 shares of Sprint Corporation
FON Common Stock - Series 1, par value $2.00 per share ("FON
Stock"), and 581,757 shares of Sprint Corporation PCS Common
Stock - Series 1, par value $1.00 per share ("PCS Stock"),
issuable under Sprint's Automatic Dividend Reinvestment Plan.
This Registration Statement as originally filed related to
the offering of 1,500,000 shares of Sprint Common Stock ("Sprint
Common Stock") issuable under the Automatic Dividend Reinvestment
Plan. 336,486 of such shares have been issued by Sprint, leaving
1,163,514 shares. On November 23, 1998, following approval by
Sprint's shareholders, Sprint's Articles of Incorporation were
restated to reclassify each share of Sprint Common Stock into one
share of FON Stock and one-half of a share of PCS Stock.
Accordingly, the purpose of this Post-Effective Amendment No. 2
is to reflect the reclassification of the remaining 1,163,514
shares of Sprint Common Stock into the 1,163,514 shares of FON
Stock and the 581,757 shares of PCS Stock now covered by this
Registration Statement. Since participants in the Automatic
Dividend Reinvestment Plan cannot purchase PCS Stock through the
Plan, the Registration Statement is also being amended to
deregister the 581,757 shares of PCS Stock.
PROSPECTUS
SPRINT CORPORATION
FON Common Stock
(Par Value $2.00 Per Share)
______________
Automatic Dividend Reinvestment Plan
______________
The Automatic Dividend Reinvestment Plan of Sprint
Corporation provides holders of its FON Common Stock with a
method of purchasing additional shares of FON Common Stock
without payment of any brokerage commission or service
charge. Any holder of record of FON Common Stock is
eligible to join the Plan. The FON Common Stock is listed
on the New York Stock Exchange under the symbol "FON." Of
the original issue shares authorized for issuance under the
Plan, 1,163,514 shares of FON Common Stock remained
available for issuance at November 25, 1998.
You may:
1. automatically reinvest cash dividends on all of
your FON Common Stock.
2. automatically reinvest cash dividends on less than
all of your FON Common Stock and continue to
receive cash dividends on the remaining FON Common
Stock.
3. invest optional cash payments in FON Common Stock.
Optional cash payments cannot exceed $5,000 per
quarter. A minimum payment of $25 is required.
4. invest both cash dividends and optional cash
payments in FON Common Stock.
You cannot invest in PCS Common Stock through the Plan.
Both the FON Common Stock and the PCS Common Stock are
classes of common stock of Sprint and are subject to all of
the risks of an equity investment in Sprint and all of
Sprint's businesses, assets and liabilities.
UMB Bank, n.a., administers the Plan. It may purchase
shares of FON Common Stock for the accounts of participants
directly from Sprint, on the open market or from private
sources. If the Agent purchases shares from Sprint, the
price of your shares will be the average of the high and low
sales price of the FON Common Stock on the relevant
Investment Date. If the Agent purchases shares on the open
market or from private sources, the price of your shares
will be the Agent's average cost. You receive no discount
on purchases under the Plan. The closing price of the FON
Common Stock on November 25, 1998, as shown by the composite
listing of transactions as published in major newspapers,
was $74.625.
_______________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities
or passed upon the adequacy or accuracy of this Prospectus.
Any
representation to the contrary is a criminal offense.
______________
The date of this Prospectus is December __, 1998.
TABLE OF CONTENTS
Page
Where You Can Find More Information 2
Sprint Corporation 3
Use of Proceeds 4
Plan of Distribution 4
Automatic Dividend Reinvestment Plan 4
Validity of the FON Common Stock 16
Indemnification for Securities Act Liabilities 16
WHERE YOU CAN FIND MORE INFORMATION
Sprint files annual, quarterly and special reports,
proxy statements and other information with the SEC. You
can inspect and copy the Registration Statement on Form S-3
of which this Prospectus is a part, as well as reports,
proxy statements and other information filed by Sprint, at
the public reference facilities maintained by the SEC at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the following Regional Offices of the SEC: 7 World
Trade Center, Suite 1300, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. You can obtain copies of such
material from the Public Reference Room of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. You can call the SEC at 1-800-732-0330 for
information regarding the operation of its Public Reference
Room. The SEC also maintains a site on the World Wide Web
at http://www.sec.gov that contains reports, proxy
statements and other information regarding registrants (like
Sprint) that file electronically.
In addition, you can inspect reports, proxy statements
and other information concerning Sprint at the offices of
the New York Stock Exchange, 20 Broad Street, New York, New
York 10005, on which exchange the FON Common Stock and the
PCS Common Stock is listed.
This Prospectus describes the Plan. You should read
it, together with the additional information that is
incorporated by reference as described below.
This Prospectus is part of a Registration Statement
that we have filed with the SEC. To see more detail, you
should read the exhibits filed with our Registration
Statement.
The SEC allows this Prospectus to "incorporate by
reference" certain other information that we file with them,
which means that we can disclose important information to
you by referring you to those documents. The information
incorporated by reference is an important part of this
Prospectus, and information that we file later with the SEC
will automatically update and replace this information. We
incorporate by reference the documents listed below and any
future filings made by us with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until we sell all of the securities that we have registered.
-- Sprint's Annual Report on Form 10-K for the year ended
December 31, 1997.
-- Sprint's Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30, and September 30, 1998.
-- Sprint's Current Reports on Form 8-K dated May 26, June
29, October 28, November 2, and November 12, 1998.
-- Sprint's Proxy Statement/Prospectus that forms a part
of Registration Statement No. 333-65173.
-- The description of FON Common Stock contained in
Sprint's Registration Statement on Form 8-A relating to the
FON Common Stock, filed November 2, 1998.
-- The description of PCS Common Stock contained in
Sprint's Registration Statement on Form 8-A relating to the
PCS Common Stock, filed November 2, 1998.
-- The description of FON Group Rights contained in
Amendment No. 2 to Sprint's Registration Statement on Form 8-
A relating to the FON Group Rights, filed November 25, 1998.
-- The description of PCS Group Rights contained in
Amendment No. 1 to Sprint's Registration Statement on Form 8-
A relating to the PCS Group Rights, filed November 25, 1998.
If you request such information in writing or by
telephone, we will provide to you, at no cost, a copy of any
or all of the information incorporated by reference in the
Registration Statement of which this Prospectus is a part.
Requests should be addressed to: Sprint Corporation, 2330
Shawnee Mission Parkway, Westwood, Kansas 66205, Attention:
Investor Relations (telephone number: (800) 259-3755).
SPRINT CORPORATION
Sprint is a diversified telecommunications service
provider, offering wireless personal communications (PCS)
services, long distance services and local services. The
mailing address of Sprint's principal executive offices is
2330 Shawnee Mission Parkway, Westwood, Kansas 66205 and
its telephone number is (913) 624-3000.
In November, 1998, Sprint completed the acquisition of
ownership and control of the PCS business that operates
under the Sprint PCS(Registered) brand name. As a result, its
operations have been divided into the PCS Group and the FON
Group. In addition, in connection with the restructuring of
its PCS operations, Sprint's outstanding publicly-traded
common stock was recapitalized into two classes of common
stock of Sprint: PCS Common Stock and FON Common Stock.
The trading price of the PCS Common Stock should reflect
separately the performance of the PCS Group. The trading
price of the FON Common Stock should reflect separately the
performance of the FON Group.
The PCS Group operates a 100% digital PCS wireless
network in the United States with licenses to provide
service nationwide utilizing a single frequency band and
single technology. The PCS Group owns licenses to provide
service to the entire United States, including Puerto Rico
and the U.S. Virgin Islands.
The FON Group consists of all of Sprint's businesses
and assets not included in the PCS Group. The FON Group's
long distance division is the nation's third largest
provider of long distance telephone services. The long
distance division operates a nationwide, all digital long
distance telecommunications network that uses state-of-the-
art fiber-optic and electronic technology. The long
distance division provides domestic and international voice,
video and data communications services. The FON Group's
local telecommunications division consists primarily of
regulated local exchange carriers serving more than 7.5
million access lines in 18 states. The local
telecommunications division provides local services and
access for telephone customers and other carriers to the
division's local exchange facilities, and sells
telecommunications equipment and long distance services
within specified geographic areas. The FON Group's product
distribution and directory publishing businesses consist of
wholesale distribution of telecommunications equipment and
publishing and marketing white and yellow page telephone
directories.
Other telecommunications activities of the FON Group
include (1) emerging businesses, which consist of the
development of new integrated communications services,
integration management and support services for computer
networks and international development activities outside
the scope of Global One, (2) Sprint's interest in the Global
One international strategic alliance, a joint venture with
France Telecom S.A. and Deutsche Telekom AG, and (3)
Sprint's other telecommunications investments and alliances,
such as its investment in Earthlink Network, Inc., an
internet service provider. France Telecom and Deutsche
Telekom are European telephone companies with a combined 20%
strategic equity investment in Sprint.
USE OF PROCEEDS
We do not know either the number of shares that will
ultimately be purchased under the Plan or the prices at
which such shares will be purchased. When we sell shares to
the Plan, the proceeds will be allocated to the FON Group
and used for general corporate purposes and for advances to,
and additional equity investment in, Sprint's subsidiary
companies and joint ventures to facilitate additions and
improvements to the property, plant and equipment of such
companies and to fund operations. We are unable to
determine the amount of the proceeds that will be devoted to
any of these purposes.
PLAN OF DISTRIBUTION
We are offering the holders of our FON Common Stock the
opportunity to purchase additional shares of FON Common
Stock through an Automatic Dividend Reinvestment Plan
without payment of any brokerage commission or service
charge.
AUTOMATIC DIVIDEND REINVESTMENT PLAN
UMB Bank, n.a., administers the Plan. The provisions
of the Plan are set forth below in question and answer form.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide you with a
convenient method of investing cash dividends on your FON
Common Stock and/or optional cash payments in additional
shares of FON Common Stock without payment of any brokerage
commission or service charge. You cannot purchase PCS
Common Stock through the Plan.
ADVANTAGES
2. What are the advantages of the Plan?
You may (1) automatically reinvest cash dividends on
all or less than all of your shares of FON Common Stock in
additional shares of FON Common Stock, or (2) invest
optional cash payments, not to exceed $5,000 per quarter
(minimum payment of $25), in additional shares of FON Common
Stock, or (3) both reinvest cash dividends and invest
optional cash payments in FON Common Stock. You can make
optional cash payments without reinvesting any of your cash
dividends, except that the dividends on any shares of FON
Common Stock that you purchase under the Plan will be
reinvested until such time as you withdraw such shares from
the Plan or you sell or transfer such shares. You will pay
no commission or service charge in connection with purchases
under the Plan. The Plan permits fractions of shares, as
well as full shares, to be credited to your account. In
addition, the Agent will credit dividends on fractions of
shares, as well as on full shares, to your account and the
Agent will reinvest the dividends in shares of FON Common
Stock. The Agent will provide you with regular statements
of your account for recordkeeping.
You may also deposit your FON Common Stock certificates
for safekeeping with the Agent and have your ownership of
such FON Common Stock maintained on the Agent's records as
part of your Plan account (see Question 8).
You may transfer, at any time and at no cost, some or
all of the shares you hold under the Plan to another person
or persons (see Question 22).
ADMINISTRATION
3. Who administers the Plan?
The Agent, UMB Bank, n.a., acts as your agent and keeps
a record of your account, sends statements of account to you
and performs other duties relating to the Plan. Should UMB
Bank, n.a. resign, another agent will be asked to serve.
You should send all communications regarding the Plan to the
Agent addressed as follows:
UMB Bank, n.a.
P.O. Box 410064
Kansas City, Missouri 64141-0064
PARTICIPATION
4. Who is eligible to participate?
If you are a holder of record of shares of FON Common
Stock, you are eligible to purchase shares of FON Common
Stock through the Plan. If you only hold shares of PCS
Common Stock, you cannot participate in the Plan. If you do
not hold shares of FON Common Stock in your own name, you
must become a stockholder of record by having the shares
transferred into your name.
5. How do you participate?
You may join the Plan by completing and signing an
Authorization Form and returning it to the Agent. You may
obtain an Authorization Form at any time by writing the
Agent at the above address or by writing Sprint, as follows:
Sprint Corporation
Dividend Reinvestment
P.O. Box 11315
Kansas City, Missouri 64112-0315
6. When can you join the Plan?
You may join the Plan at any time. If the Agent
receives your Authorization Form on or before the record
date for the next dividend, the Agent will invest the amount
of your dividend in additional shares of FON Common Stock.
If the Agent receives your Authorization Form after the
record date for a dividend, the dividend reinvestment will
not start until payment of the following dividend. Dividend
payment dates for FON Common Stock will normally be on the
last business day of March, June and September and in the
last week of December, and dividend record dates will
normally be about three weeks before the dividend payment
dates. If the Agent receives your optional cash payment
before an Investment Date (see Question 13), it will invest
your payment in additional shares of FON Common Stock on the
Investment Date. If the Agent does not receive your cash
payment before an Investment Date, your purchases will start
with the next Investment Date, which will usually be in the
following month.
For example, to initially invest a quarterly dividend
payable at the next dividend payment date (assuming
declaration of a dividend), the Agent must receive your
Authorization Form by the record date for that dividend. If
the Agent receives your Authorization Form after the record
date, we will pay you the dividend in cash. The Agent will
invest all optional cash payments received by it before an
Investment Date in FON Common Stock on such Investment Date.
7. What does the Authorization Form provide?
By checking the appropriate box on the Authorization
Form, you can (1) direct us to pay to the Agent all or less
than all of your cash dividends on FON Common Stock (after
withholding any required income taxes) on the shares
registered in your own name and direct the Agent to reinvest
the cash dividends and any optional cash payments received
from you, or (2) direct the Agent to invest only optional
cash payments that you make. The Agent will use cash
dividends on shares of FON Common Stock purchased under the
Plan to purchase additional shares of FON Common Stock
unless you sell, transfer or withdraw the shares from the
Plan (see Questions 20, 21 and 22). You can change your
participation only by submitting a new Authorization Form.
You should send optional cash payments directly to the
Agent. You should make your check or money order payable to
UMB Bank, n.a.
8. How does Share Safekeeping work?
At the time of enrollment in the Plan, or at any later
time, you may use the Plan's "share safekeeping" service to
deposit any FON Common Stock certificates in your possession
with the Agent. The Agent will credit the shares to your
account under the Plan. Thereafter, dividends on those
shares will be reinvested until you sell, transfer or
withdraw the shares from the Plan (see Questions 20, 21 and
22).
By using the Plan's share safekeeping service, you no
longer bear the risk associated with loss, theft or
destruction of stock certificates. Also, you can sell or
transfer shares deposited with the Agent through the Plan in
a convenient and efficient manner (see Questions 21 and 22).
If you wish to deposit your FON Common Stock
certificates with the Agent, you must complete and return to
the Agent, by registered, insured mail, the FON Common Stock
certificates you want to deposit along with a properly
completed Share Safekeeping Form. You should not endorse
the certificates. You can get a Share Safekeeping Form from
the Agent.
You cannot deposit certificates for PCS Common Stock
with the Agent for safekeeping.
COSTS
9. Do you incur any expenses if you participate in the
Plan?
We will pay all fees, commissions and expenses in
connection with the purchase of shares of FON Common Stock
under the Plan. We will also pay all costs of administering
the Plan, except when you sell shares held in the Plan (see
Questions 21, 25 and 26).
PURCHASES
10. How many shares of FON Common Stock will you purchase?
The number of shares you purchase depends on the amount
of your dividend (after deducting any required income tax
withholding) on shares that you designate to participate in
the Plan, any optional cash payments you make, and the price
of the shares of FON Common Stock purchased. Your account
will be credited with that number of shares, including
partial shares, equal to the sum of the total amount of your
reinvested dividend plus the total amount of your optional
cash payment (if an optional cash payment is made), divided
by the purchase price of the FON Common Stock (see Question
12).
11. What happens if your dividends are subject to income
tax withholding?
If your dividends are subject to United States income
tax withholding, the Agent will apply the net amount of your
dividend, after the deduction of taxes, to the purchase of
shares of FON Common Stock. If you want to invest the full
amount of your dividends, you may tender an optional cash
payment to the Agent for the withholding amount, so long as
the payment is not less than the minimum payment or more
than the maximum payment (see Questions 15, 16 and 17).
12. How much will the shares of FON Common Stock that you
purchase under the Plan cost you?
The Agent will purchase shares from us, to the extent
that we make shares available to the Agent. The Agent will
purchase any other shares required for the Plan on the open
market or from private sources. The price of shares
purchased from us will be the average of the high and low
sale prices of the FON Common Stock on the relevant
Investment Date as shown by the composite listing of
transactions as published in major newspapers. The price of
shares purchased on the open market or from private sources
will be the average cost per share of all shares so
purchased for the relevant Investment Date (see Question
13).
13. When is the Investment Date?
The Investment Date will be the dividend payment date,
or the last trading day before the dividend payment date if
there is no trade reported on the dividend payment date, in
any calendar month in which a cash dividend is payable on
the FON Common Stock. Dividend payment dates will normally
be on the last business day of March, June and September and
in the last week of December.
In all other calendar months the Investment Date will
be the thirtieth day of that month (or the last day of
February), or the last trading day before that date if there
is no trade reported on the thirtieth day (or the last day
of February).
There will normally be only one Investment Date in a
month. However, in any month in which a cash dividend is
payable and the dividend payment date is before the last
five business days in the month, there will be a second
Investment Date for optional cash payments on the thirtieth
day of that month (or the last day of February), or the last
trading day before that date if there is no trade reported
on the thirtieth day (or the last day of February).
14. When will the Agent purchase shares?
The Agent will purchase shares acquired from us as of
the close of business on the Investment Date. The Agent
will purchase shares acquired on the open market or from
private sources promptly and in no event later than thirty
days after the Investment Date. These purchases may be made
on any securities exchange where the shares are traded, in
the over-the-counter market, or by negotiated transactions,
and are subject to whatever terms and conditions, including
price and delivery, the Agent agrees to. Dividend and
voting rights will begin on the settlement date, which is
normally three business days after the purchase, whether
from us or any other source. For the purpose of making
purchases, the Agent will commingle your funds with those of
all other participants.
OPTIONAL CASH PAYMENTS
15. How does the cash payment option work?
Each month the Agent will use any optional cash payment
received from you before the Investment Date for the month
to purchase additional shares of FON Common Stock for your
account on the Investment Date. If there is more than one
Investment Date in a month, the Agent will use your optional
cash payment to purchase additional shares of FON Common
Stock on the first Investment Date after receipt of your
payment. The Agent will use any optional cash payment not
received before an Investment Date in any month to purchase
additional shares for your account on the Investment Date in
the following month.
16. How can you make an optional cash payment?
You can make an optional cash payment each month.
Optional cash payments must be at least $25 per payment and
cannot exceed a total of $5,000 per quarter. Each time you
make an optional cash payment, you will receive an updated
statement after the payment is invested.
You may make an optional cash payment when enrolling by
enclosing with the Authorization Form a check or money order
payable to the Agent, UMB Bank, n.a. You can also make an
optional cash payment by using the remittance form attached
to your account statement sent by the Agent. You do not
need to send the same amount of money each time and you are
not required to make an optional cash payment each month or
each quarter.
17. When should you make an optional cash payment?
The Agent will invest optional cash payments received
before an Investment Date in any month on the Investment
Date. If the Agent does not receive an optional cash
payment before an Investment Date, the Agent will hold the
payment until the next Investment Date. You will not be
paid any interest on cash payments. We suggest that you
send optional cash payments to the Agent at least ten
business days before the end of a month.
REPORTS TO PARTICIPANTS
18. What kind of reports will you receive?
You will receive from the Agent a quarterly statement
of your account. If you make an optional cash payment, you
will receive an updated statement after your optional cash
payment is invested. In addition, you will receive from us
or the Agent copies of the same communications sent to every
other holder of FON Common Stock, including the Annual
Report to Stockholders, Notice of Annual Meeting and Proxy
Statement, and IRS information return reporting dividends
paid (Form 1099-DIV).
You should keep your statements for income tax purposes
since the statements provide information regarding the cost
basis of shares that you purchase through the Plan. You
will need this information when you sell or transfer the
shares in a taxable transaction (see Question 31).
DIVIDENDS
19. Will you be credited with dividends on fractions of
shares?
You will be credited with the amount of dividends
attributable to fractions of shares in your account under
the Plan and the dividends will be reinvested.
CERTIFICATES FOR SHARES
20. Will the Agent issue certificates for shares of FON
Common Stock you hold in the Plan?
You normally will not receive certificates for shares
of FON Common Stock purchased under the Plan. Your
statement of account will show the number of shares credited
to your account under the Plan. This convenience protects
against loss, theft or destruction of stock certificates.
If you make a written request that a certificate be
issued, the Agent will issue to you a certificate for any
number of whole shares credited to your account under the
Plan (whether purchased under the Plan or deposited with the
Agent for safekeeping). Your participation in the Plan will
not terminate. However, if you are reinvesting your cash
dividends only on shares credited to your account under the
Plan, the issuance of a certificate for such shares will
remove them from the Plan and the cash dividends on such
shares will not be reinvested thereafter. Any full shares
and fraction of a share not issued will continue to be
credited to your account and cash dividends on such shares
will continue to be reinvested in FON Common Stock.
You may not pledge shares credited to your account
under the Plan as collateral. If you want to pledge your
shares, you must request that a certificate for the shares
be issued to you in your name.
The Agent will not issue certificates for fractions of
shares under any circumstances.
21. How do you sell shares held in the Plan?
You may ask the Agent to sell any number of shares,
including fractional shares, held in your account at any
time by giving written instructions to the Agent. The Agent
will make the sale as soon as practicable after it receives
the request. If your account is in the name of more than
one person, each individual whose name is on the account
must execute the request to sell shares. You (and any co-
owner) will receive the proceeds, less an administration
charge of $2.00 and applicable brokerage commissions, if
any. The Agent will pay the proceeds of shares sold through
the Plan by check.
If the Agent receives instructions for the sale of all
shares credited to your account on or after an ex-dividend
date but before the related dividend payment date, the Agent
will not process the sale until after the dividend payment
date. The dividends on the shares will be reinvested on the
dividend payment date and the shares purchased with the
dividends will be included in the shares sold. If the Agent
receives instructions for the sale of less than all your
shares on or after an ex-dividend date but before the
related dividend payment date, the Agent will process the
sale as soon as practicable and the dividend on the shares
that have been sold, as well as the dividend on the shares
remaining in the account, will be reinvested on the dividend
payment date and the shares purchased will be credited to
your account. The ex-dividend date is two business days
before the record date and will normally be approximately
four weeks before the dividend payment date.
22. How do you transfer shares held in the Plan?
If you want to transfer the ownership of all or part of
the shares held in your Plan account to another person,
whether by gift, private sale or otherwise, you may make the
transfer by mailing a properly completed and executed stock
assignment (stock power) to the Agent. You must transfer a
whole number of shares, unless the transfer is to another
participant in the Plan, in which case you may transfer any
number of shares, including fractional shares. If you
transfer all whole shares in your account, any remaining
fractional share will remain in your account and dividends
on the fractional share and any optional cash payment will
be invested in FON Common Stock unless you instruct the
Agent to sell the fractional share or otherwise indicate
that you want to terminate participation in the Plan. If
you instruct the Agent to sell the fractional share, the
Agent will sell the fractional share and mail the proceeds
(less any sales commission and a handling charge of $2.00)
directly to you (see Question 26).
You must include in your written request for transfer
that you send to the Agent the names, addresses and tax
identification number of the transferees and you must also
send an executed stock assignment (stock power) with
medallion signature guarantee. Your signature and the
signatures of any co-owners on the assignment must
correspond exactly with the names on the account.
If the Agent receives instructions for the transfer of
all shares credited to your Plan account on or after an ex-
dividend date but before the related dividend payment date,
the Agent will not process the transfer until after the
dividend payment date. The Agent will reinvest the
dividends on the shares on the dividend payment date and the
shares purchased with the dividends will be included in the
shares transferred. If the Agent receives instructions for
the transfer of less than all your shares on or after an ex-
dividend date but before the related dividend payment date,
the Agent will process the transfer as soon as practicable
and the Agent will reinvest the dividend on the shares that
have been transferred, as well as the dividend on the shares
remaining in your account, on the dividend payment date and
will credit the shares purchased to your account.
The Agent will issue a stock certificate for the shares
transferred to the transferees and mail information
pertaining to the Plan to the transferees, unless the
transferees already participate in the Plan.
TERMINATION
23. How do you terminate your participation in the Plan?
You may terminate participation in the Plan by
notifying the Agent, in writing, that you want to terminate.
24. When does your notice of termination become effective?
A notice of termination is normally effective when the
Agent receives it. However, if the Agent receives the
notice on or after an ex-dividend date and before the
related dividend payment date, the notice will be effective
after that dividend payment date. The Agent will invest the
dividend paid on that date and any optional cash payment
under the Plan. The Agent will process the notice of
termination after crediting your account with the shares
purchased.
After your termination from the Plan, we will pay
dividends in cash directly to you unless you elect to re-
enroll in the Plan, which you may do at any time.
25. How will certificates for shares be distributed to you
when you terminate participation in the Plan?
When you terminate participation in the Plan, or if we
terminate the Plan, the Agent will issue a certificate for
whole shares credited to your account under the Plan. The
Agent will mail to you a cash payment for any fraction of a
share, less any sales commission and an administration
charge of $2.00 (see Question 26). Upon termination, you
may ask the Agent to sell all of the shares, both whole and
fractional, credited to your account in the Plan (see
Question 21).
26. What happens to a fraction of a share when you request
to terminate participation in the Plan or we terminate the
Plan?
When you terminate participation in the Plan, the Agent
will mail to you a cash payment representing the proceeds
from the sale of any fraction of a share. This cash payment
will be based on the then current market price of the shares
of FON Common Stock, less any sales commission and an
administration charge of $2.00. We will also make
adjustments for fractional shares if we terminate the Plan.
OTHER INFORMATION
27. What happens when you sell or transfer a portion of
your shares in the Plan?
If you are reinvesting the cash dividends on all of the
shares of FON Common Stock registered in your name and you
dispose of a portion of the shares, the Agent will continue
to reinvest the dividends on the remaining shares.
If you are reinvesting the cash dividends on part of
the shares of FON Common Stock registered in your name and
you dispose of a portion of those shares, the Agent will
continue to reinvest the dividends on the remaining shares
up to the number of shares you originally authorized.
For example, if you authorized the Agent to reinvest
the cash dividends on 50 shares of a total of 100 shares
registered in your name, and then you dispose of 25 shares,
the Agent would continue to reinvest the cash dividends on
50 of the remaining 75 shares. If instead you dispose of 75
shares, the Agent would continue to reinvest the cash
dividends on all of the remaining 25 shares.
The Agent will continue to reinvest the dividends on
shares credited to your account under the Plan until you
sell or transfer the shares or withdraw the shares from the
Plan.
28. Does participation in the Plan involve any risk?
The Plan itself creates no additional risk. Your risk
is the same as with any other investment in shares of FON
Common Stock. You should recognize that by purchasing
through the Plan, you lose any advantage otherwise available
from being able to select the timing of your purchases. You
must recognize that neither Sprint nor the Agent can assure
you a profit or protect you against a loss on the shares you
purchase under the Plan.
29. What happens if we issue a stock dividend, declare a
stock split or have a rights offering?
Any shares distributed by us as a stock dividend on
shares credited to your account, or upon any split of such
shares, will be credited to your account and held by the
Agent for safekeeping. Stock dividends distributed on
shares registered in your name that are not held by the
Agent under the Plan, as well as shares distributed on
account of any split of such shares, will be mailed directly
to you. In a rights offering, your entitlement will be
based upon your total holdings, including shares credited to
your account under the Plan. The Agent will sell rights
(except for the FON Group Rights provided for by our
Shareholder Rights Plan) applicable to shares credited to
you under the Plan and credit the proceeds to your account
under the Plan. The Agent will then apply the proceeds as
an optional cash payment to purchase shares of FON Common
Stock on the next Investment Date.
30. How will your shares be voted at stockholder meetings?
We will mail you a proxy to vote all of your shares
held in the Plan. The shares will be voted in the manner
you direct in the proxy. If you do not return the proxy or
vote in person at the meeting, your shares will not be
voted.
31. What are the Federal income tax consequences of
participating in the Plan?
(1) For Federal income tax purposes, you must include
as taxable income the amount of the cash dividend (before
deduction of any required back-up withholding) that you
would have received if you had not reinvested the dividend
in FON Common Stock. The information return (Form 1099-DIV)
we send to you and the Internal Revenue Service at year-end
will report the total amount of the dividends.
(2) The tax basis per share for shares of FON Common
Stock you acquire pursuant to the Plan is equal to the
purchase price per share as described in Question 12, plus
any brokerage commissions paid by us. Brokerage commissions
paid by us on your behalf in acquiring the stock are treated
as distributions subject to income tax in the same manner as
dividends. The information return (Form 1099-DIV) we send
to you and the Internal Revenue Service at year-end will
include the brokerage commissions paid on your behalf during
the year.
(3) Your holding period for shares of FON Common Stock
acquired pursuant to the Plan will begin on the day
following the purchase of such shares.
(4) You will not recognize any taxable income when you
request and receive certificates for whole shares credited
to your account.
(5) You will recognize gain or loss when you sell or
transfer shares in a taxable transaction and, in the case of
a fractional share, when you receive a cash payment for a
fraction of a share credited to your account upon
termination of participation in the Plan. The amount of the
gain or loss will be the difference between the amount you
receive for the shares or fraction of a share and the tax
basis of the shares or fraction of a share.
(6) Shares of FON Common Stock purchased under the
Plan have FON Group Rights issued pursuant to our
Shareholders Rights Plan attached. Depending upon the
circumstances, you may recognize taxable income if the FON
Group Rights become exercisable or are exercised for shares
of FON Common Stock or for common stock of an acquiring
company. Sprint's redemption of the FON Group Rights also
would be a taxable event.
The Federal income tax discussion set forth above is
included for general information only. You should consult
your tax advisor with respect to the tax consequences of
participation in the Plan and the sale or transfer of shares
purchased under the Plan.
32. What is the Agent's responsibility under the Plan?
The Agent, UMB Bank, n.a., had no responsibility for
the preparation and contents of this Prospectus or of the
Registration Statement of which this Prospectus is a part.
In performing its duties under the Plan, the Agent will not
be liable for any act it does in good faith, or for any good
faith omission to act, including any claims of liability
arising out of failure to terminate your account upon your
death before it receives notice in writing of your death.
33. Can we change or discontinue the Plan?
We reserve the right to suspend, modify or terminate
the Plan at any time. We will send you a notice if we
decide to suspend, modify or terminate the Plan.
VALIDITY OF THE FON COMMON STOCK
The validity of the original issue shares of FON Common
Stock to be purchased from Sprint under the Plan has been
passed upon by Don A. Jensen, Vice President and Secretary
of Sprint.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Consistent with Kansas law, Article IV, Section 10, of
the Bylaws of Sprint provides that we will indemnify
directors and officers against expenses, judgments, fines
and amounts paid in settlement in connection with any
action, suit or proceeding if the director or officer acted
in good faith and in a manner reasonably believed to be in
or not opposed to the best interests of Sprint. With
respect to a criminal action or proceeding, the director or
officer must also have had no reasonable cause to believe
his conduct was unlawful. Sprint has entered into
indemnification agreements with its directors and officers.
These agreements provide for the indemnification, to the
full extent permitted by law, of expenses, judgments, fines,
penalties and amounts paid in settlement incurred by the
director or officer in connection with any threatened,
pending or completed action, suit or proceeding on account
of services as a director, officer, employee or agent of
Sprint.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling Sprint pursuant
to the foregoing provisions, Sprint has been informed that
in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act of 1933 and
is therefore unenforceable.
SPRINT CORPORATION
AUTOMATIC DIVIDEND REINVESTMENT PLAN
FON Common Stock
_____________________
PROSPECTUS
_____________________
We have not authorized any dealer, salesperson or other
person to give any information or represent anything that is not
contained in this Prospectus. You must not rely on any
unauthorized information. This Prospectus does not offer to sell
and is not a solicitation of an offer to buy any securities in
any jurisdiction where it is unlawful. The information in this
Prospectus is current only as of December ____, 1998.
Dated December _____, 1998
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits.
Exhibit
Number Exhibit
4A. Articles of Incorporation of Sprint Corporation. The
rights of Sprint's equity security holders are defined
in Article Fifth, Article Sixth, Article Seventh and
Article Eighth of the Articles of Incorporation.
4B. Rights Agreement dated as of November 23, 1998, between
Sprint Corporation and UMB Bank, n.a. (filed as Exhibit
4.1 to Amendment No. 1 to Sprint Corporation
Registration Statement on Form 8-A relating to Sprint's
PCS Group Rights, filed November 25, 1998, and
incorporated herein by reference).
4C. Bylaws of Sprint Corporation. Provisions regarding the
Capital Stock Committee are set forth in Article IV,
Section 13 of the Bylaws.
4D. Tracking Stock Policies of Sprint Corporation.
4E. Amended and Restated Standstill Agreement dated as of
November 23, 1998, by and among Sprint Corporation,
France Telecom, S.A. and Duetsche Telekom, A.G.
5. Opinion and consent of Don A. Jensen, Esq.
23-A. Consent of Ernst & Young LLP.
23-B. Consent of Deloitte & Touche LLP.
23-C. Consent of Don A. Jensen, Esq. is contained in his
opinion filed as Exhibit 5.
24. Power of Attorney.*
*Previously filed
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all the requirements for filing on Form S-3
and has duly caused this Amendment to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Westwood, State of Kansas, on the
3rd day of December, 1998.
SPRINT CORPORATION
By /s/ Don A. Jensen
(Don A. Jensen, Vice President)
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed by
the following persons in the capacities and on the date
indicated.
Name Title Date
)
Chairman of the Board )
and Chief Executive Officer )
W. T. ESREY * (Principal Executive )
Officer) )
)
Executive Vice President- )
Chief Financial Officer )
(Principal Financial )
/s/ A. B. Krause Officer) )
(A. B. Krause) )
)
Senior Vice President and )
Controller )
(Principal Accounting )
/s/ J. P. Meyer Officer) ) December 3, 1998
(J. P. Meyer) )
)
Director )
(DuBose Ausley) )
)
WARREN L. BATTS * Director )
)
Director )
(Michel Bon) )
)
)
)
Director )
(Irvine O. Hockaday, Jr. )
Jr.) )
)
HAROLD S. HOOK * Director )
)
/s/ Ronald T. LeMay Director ) December 3, 1998
(Ronald T. LeMay) )
)
Director )
(Linda K. Lorimer) )
)
CHARLES E. RICE * Director )
)
Director )
(Ron Sommer) )
)
STEWART TURLEY * Director )
/s/ A.B. Krause
* (A.B. Krause, as Attorney-in-Fact for
each of the above officers and directors,
pursuant to Power of Attorney filed with
this Registration Statement No.
33-58488)
INDEX EXHIBIT
Exhibit
Number Exhibit
4A. Articles of Incorporation of Sprint Corporation. The
rights of Sprint's equity security holders are defined
in Article Fifth, Article Sixth, Article Seventh and
Article Eighth of the Articles of Incorporation.
4B. Rights Agreement dated as of November 23, 1998, between
Sprint Corporation and UMB Bank, n.a. (filed as Exhibit
4.1 to Amendment No. 1 to Sprint Corporation
Registration Statement on Form 8-A relating to Sprint's
PCS Group Rights, filed November 25, 1998, and
incorporated herein by reference).
4C. Bylaws of Sprint Corporation. Provisions regarding the
Capital Stock Committee are set forth in Article IV,
Section 13 of the Bylaws.
4D. Trading Stock Policies of Sprint Corporation.
4E. Amended and Restated Standstill Agreement dated as of
November 23, 1998, by and among Sprint Corporation,
France Telecom, S.A. and Duetsche Telekom, A.G.
5. Opinion and consent of Don A. Jensen, Esq.
23-A. Consent of Ernst & Young LLP.
23-B. Consent of Deloitte & Touche LLP.
23-C. Consent of Don A. Jensen, Esq. is contained in his
opinion filed as Exhibit 5.
24. Power of Attorney.*
*Previously filed.
Exhibit 4A
ARTICLES OF INCORPORATION
OF SPRINT CORPORATION
(As amended November 23, 1998)
First
The name of the Corporation is SPRINT CORPORATION.
Second
This Corporation is organized for profit, and the purpose for
which it is formed is to engage in any lawful act or activity for
which corporations may be organized under the Kansas General
Corporation Code (the "General Corporation Code").
Third
The Corporation's registered office is located at 2330 Shawnee
Mission Parkway, Westwood, Johnson County, Kansas 66205; Mr. J.
Richard Devlin is the registered agent at said address.
Fourth
The Corporation shall have perpetual existence.
Fifth
Section 1. Number of Directors; Increases in Number of
Directors. (a) The number of Directors shall not be less than
ten nor more than 20 (unless increased to more than 20 pursuant
to Section 1(b) or Section 6(e) of this ARTICLE FIFTH) as may be
determined from time to time by the affirmative vote of the
majority of the Board of Directors or as provided in Section 1(b)
or in Section 6(e) of this ARTICLE FIFTH.
(b) If at any time the Class A Holders are entitled to elect a
number of Directors pursuant to Section 2(a) of this ARTICLE
FIFTH that exceeds the sum of the number of Directors elected by
the Class A Holders then serving on the Board of Directors and
the number of vacancies on the Board of Directors which the
Directors elected by the Class A Holders or the Class A Holders
are entitled to fill, the total number of Directors shall
automatically and without further action be increased by the
smallest number necessary to enable the Class A Holders (and the
Directors elected by the Class A Holders in the case of
vacancies) to elect the number of Directors that the Class A
Holders are entitled to elect pursuant to such Section 2(a).
Section 2. Election of Directors. (a) Election of
Directors by Class A Holders. (i) Except as otherwise provided
in Sections 8.5(b), 8.5(f) and 8.5(k) of ARTICLE SIXTH, the Class
A Holders shall have the right, voting together as a single
class, to elect a number of Directors equal to the greater of (x)
two and (y) the product (rounded to the nearest whole number if
such product is not a whole number) of (i) the aggregate
Percentage Ownership Interests of the Class A Holders and (ii)
the total number of Directors, provided that so long as Section
310 of the Communications Act of 1934, as amended (or any
successor provision of law) ("Section 310"), remains in effect,
under no circumstances shall (A) the Class A Holders have the
right to elect Aliens as Directors such that the total number of
Aliens so elected by them would exceed the maximum percentage of
the total number of Directors of this Corporation permitted under
Section 310 to be Aliens or (B) the total number of Directors
elected by the Class A Holders and serving on the Board of
Directors exceed the maximum percentage of the total Directors of
this Corporation permitted under Section 310 to be elected by
shareholders that are Aliens. Such Directors elected by the Class
A Holders shall not be divided into classes.
(ii) Upon the conversion of all outstanding shares of Class A
Stock into Series 1 FON Stock or Series 1 PCS Stock, as the case
may be, pursuant to Section 8.5 of ARTICLE SIXTH, the term of
office of all Class A Directors then in office shall thereupon
terminate, the vacancy or vacancies resulting from such
termination shall be filled by the remaining Directors then in
office, acting by majority vote of such remaining Directors, and
the Director or Directors so elected to fill such vacancy or
vacancies shall not be treated hereunder or under the Bylaws of
this Corporation as Class A Directors. If at any time the number
of Directors that the Class A Holders have the right to elect
pursuant to this Section 2(a) shall decrease other than as set
forth in the preceding sentence, and the Class A Holders shall
not have removed or caused to resign, in either case effective
not later than the fifteenth day following the event that
resulted in such decrease, a number of Class A Directors so that
the total number of Directors elected by the Class A Holders then
in office does not exceed the number provided in the first
sentence of Section 2(a)(i), then the terms of office of all
Class A Directors shall terminate on such fifteenth date. The
vacancy or vacancies resulting from such termination of the terms
of the Class A Directors shall be filled as follows: (A) the
vacancy or vacancies equal to the number of Directors that the
Class A Holders then have the right to elect pursuant to this
Section 2(a) (after giving effect to the decrease referred to in
the preceding sentence) shall be filled as provided in Section
4(b) of this ARTICLE FIFTH, and (B) the remaining vacancy or
vacancies shall be filled by the remaining Directors other than
Class A Directors then in office, acting by majority vote of such
remaining Directors, and the Director or Directors so elected to
fill such vacancy or vacancies shall not be treated hereunder or
under the Bylaws as Class A Directors.
(iii) (1) Notwithstanding anything to the contrary in this
Section 2, but subject to paragraphs (2), (3), (4) and (5) of
this Section 2(a)(iii) and the proviso set forth at the end of
the first sentence of Section 2(a)(i) of this ARTICLE FIFTH (the
"Section 2(a) Proviso"), if the aggregate Percentage Ownership
Interest of the Class A Holders is 20% or greater, the Class A
Holders at all times shall have the right to elect not less than
20% of the total number of Directors, provided that, if the
Section 2(a) Proviso prevents the Class A Holders from electing
at least 20% of the total number of Directors under such
circumstances, this Corporation shall increase the total number
of Directors to a number not greater than 20 if such increase
would enable the Class A Holders to elect at least 20% of the
total number of Directors as increased.
(2) The provisions of Section 2(a)(iii)(1) of this ARTICLE
FIFTH (the "Section 2(a)(iii)(1) Provisions") shall terminate and
be of no force and effect (a "Nullification") unless reinstated
in accordance with Section 2(a)(iii)(5), if either:
(A) this Corporation delivers an opinion of nationally-
recognized U.S. tax counsel to the effect that the Section
2(a)(iii)(1) Provisions are, with respect to both FT and DT,
either not a Necessary Condition or not a Sufficient Condition to
secure any Treaty Benefit and within 90 days of the delivery of
such opinion by this Corporation there is not delivered to this
Corporation by FT or DT an opinion of nationally-recognized U.S.
tax counsel concluding that such provisions are a Necessary
Condition and a Sufficient Condition for either FT or DT to
secure a Treaty Benefit, or
(B) this Corporation provides written notice to FT and DT in
which it agrees to accord FT and DT those Treaty Benefits to
which FT and DT would be entitled if the Section 2(a)(iii)(1)
Provisions were in effect (the "Continuing Treaty Benefits") and
to indemnify FT and DT on an after-tax basis against (a) any
liability arising out of according FT and DT Continuing Treaty
Benefits to the extent such liability would not arise if the
Section 2(a)(iii)(1) Provisions were in effect and (b) the loss
of those Continuing Treaty Benefits that this Corporation cannot
directly accord; provided that this Corporation by written notice
to FT and DT may revoke and withdraw such agreement to accord
such Treaty Benefits and to provide such indemnification
following the date of such notice and upon delivery of such
notice the Section 2(a)(iii)(1) Provisions shall again become
effective. Notwithstanding any revocation or withdrawal pursuant
to the proviso contained in the immediately preceding sentence,
this Corporation shall continue to indemnify FT and DT on an
after-tax basis against any loss of Treaty Benefits to which FT
or DT, as the case may be, would have been entitled had the
Nullification described in this Section 2(a)(iii)(2)(B) not taken
place.
If a Nullification occurs under the provisions of paragraph
(A) of this Section 2(a)(iii)(2), then after the date of any such
Nullification, and until such time as a change in facts or
Applicable Law requires a different result, this Corporation
shall accord FT and DT Treaty Benefits under the relevant
treaties between the United States and France and the United
States and Germany, but only to the extent FT or DT, as the case
may be, would have been entitled to claim such benefits had such
Nullification not occurred.
(3) In addition to its rights under Section 2(a)(iii)(2), this
Corporation shall have the right, from time to time, to deliver
to each of FT and DT a written notice requesting that the chief
tax officer of each of FT and DT certify that FT, in the case of
the request furnished to FT, and DT, in the case of the request
furnished to DT, is eligible to claim at least one Treaty
Benefit, and that such chief tax officer provide this Corporation
with other facts and information reasonably requested by this
Corporation that are reasonably necessary for this Corporation to
determine whether the Section 2(a)(iii)(1) Provisions are a
Sufficient Condition or a Necessary Condition to secure at least
one Treaty Benefit. Unless within 60 days of delivery of any such
request, either FT or DT delivers such requested certificate to
this Corporation, and provides such requested facts or
information, the Section 2(a)(iii)(1) Provisions shall terminate
and be of no force or effect, unless reinstated in accordance
with Section 2(a)(iii)(5).
(4) If FT and DT determine that the Section 2(a)(iii)(1)
Provisions are, with respect to both FT and DT, either not a
Necessary Condition or not a Sufficient Condition to secure at
least one Treaty Benefit, FT and DT shall deliver to this
Corporation a certification to such effect, and the Section
2(a)(iii)(1) Provisions shall terminate and be of no force or
effect, unless reinstated in accordance with Section
2(a)(iii)(5).
(5) Each of FT and DT shall have the right, at any time after
the date the Section 2(a)(iii)(1) Provisions are nullified
pursuant to paragraph (A) (but not paragraph (B)) of clause (2)
or clause (3) or (4) of this Section 2(a)(iii), to deliver to
this Corporation a certificate signed by the chief tax officer of
either FT or DT to the effect that FT or DT, as the case may be,
is eligible to claim a Treaty Benefit and an opinion of
nationally-recognized U.S. tax counsel to the effect that the
Section 2(a)(iii)(1) Provisions are again a Necessary Condition
and a Sufficient Condition for any of FT or DT to secure a Treaty
Benefit. Upon the delivery of any such certificate and opinion,
the Section 2(a)(iii)(1) Provisions shall again become effective
unless and until they become ineffective pursuant to the other
provisions of this Section 2(a)(iii).
(6) For purposes of this Section 2(a)(iii), the term "FT"
shall include any Qualified Subsidiary of FT organized under the
laws of France and the term "DT" shall include any Qualified
Subsidiary of DT organized under the laws of Germany.
(7) The Section 2(a)(iii)(1) Provisions shall be a "Necessary
Condition" with respect to any Treaty Benefit if FT or DT would
not be entitled to claim such Treaty Benefit unless such Section
2(a)(iii)(1) Provisions are in effect.
(8) The Section 2(a)(iii)(1) Provisions shall be a "Sufficient
Condition" with respect to any Treaty Benefit if FT and DT will
otherwise fulfill all other relevant conditions to claiming such
Treaty Benefit if the Section 2(a)(iii)(1) Provisions are in
effect.
(b) Election of Directors by Other Holders. (i) Subject to
clause (ii) below, the holders of Non-Class A Common Stock shall
have the right to elect that number of Directors equal to the
excess of (x) the total number of Directors over (y) the sum of
the number of Directors the Class A Holders are entitled to elect
and the number of Directors, if any, that the holders of
Preferred Stock, voting separately by class or series, are
entitled to elect in accordance with the provisions of ARTICLE
SIXTH of these Articles of Incorporation. The Class A Holders
shall have no right to vote for Directors under this Section
2(b)(i).
(ii) So long as Section 310 remains in effect, under no
circumstances shall an Alien Director elected by the holders of
Non-Class A Common Stock be qualified to serve as a Director if
the number of Aliens who would then be serving as members of the
Board of Directors, including such elected Alien, would
constitute more than the maximum number of Aliens permitted by
Section 310 on the Board of Directors.
(iii) The Directors (other than the Directors elected by the
Class A Holders and any Directors elected by the holders of any
one or more classes or series of Preferred Stock having the
right, voting separately by class or series, to elect Directors)
shall be divided into three classes, designated Class I, Class II
and Class III, with the term of office of one class expiring each
year. The number of Class I, Class II and Class III Directors
shall consist, as nearly as practicable, of one third of the
total number of Directors (other than the Directors elected by
the Class A Holders and any Directors elected by the holders of
any one or more classes or series of Preferred Stock having the
right, voting separately by class or series, to elect Directors).
At each annual meeting of stockholders of this Corporation,
successors to the class of Directors whose term expires at that
annual meeting shall be elected for a three-year term.
(iv) Whenever the holders of any one or more classes or series
of Preferred Stock shall have the right, voting separately by
class or series, to elect Directors at an annual or special
meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be
governed by the terms of these Articles of Incorporation
applicable thereto, and such Directors so elected shall not be
divided into classes pursuant to this ARTICLE FIFTH unless
expressly provided by such terms.
Section 3. Change in Number of Directors. If the number of
Directors (other than Directors elected by Class A Holders and
any Directors elected by the holders of any one or more classes
or series of Preferred Stock having the right, voting separately
by class or series, to elect Directors) is changed, any increase
or decrease shall be apportioned among the classes so as to
maintain the number of Directors in each class as nearly equal as
possible.
Section 4. Term of Office. (a) Each Director shall be
elected for a three-year term. A Director shall hold office until
the annual meeting for the year in which his term expires and
until his successor shall be elected and shall qualify to serve,
subject to prior death, resignation, retirement, disqualification
or removal from office.
(b) Any vacancy on the Board of Directors (whether resulting
from an increase in the total number of Directors, the departure
of one of the Directors or otherwise) may be filled by the
affirmative vote of a majority of the Directors elected by the
same class or classes of stockholders which would be entitled to
elect the Director who would fill such vacancy if the annual
meeting of stockholders of this Corporation were held on the date
on which such vacancy occurred, provided that at any time when
there is only one such Director so elected and then serving, such
Director may fill such vacancy and, provided further, that at any
time when there are no such Directors then serving, the
stockholders of the class or classes entitled to elect the
Director who will fill such vacancy shall have the right to fill
such vacancy and, provided, further, that, so long as any Class A
Stock is outstanding, any vacancy to be filled by the Director or
Directors elected by the holders of Non-Class A Common Stock may
not be filled with a Person who, upon his election, would not be
an Independent Director or would be an Alien, as the case may be,
if the effect of such election would be that less than a majority
of the Board of Directors following such election would be
Independent Directors, or that the number of Aliens who would
then be serving on the Board of Directors would constitute more
than the maximum number of Aliens permitted on the Board of
Directors under Section 310.
(c) Any additional Director of any class elected to fill a
vacancy resulting from an increase in the number of Directors of
such class shall hold office for a term that shall coincide with
the remaining term of the Directors of that class, but, except as
provided in Section 2(a)(ii) of this ARTICLE FIFTH, in no case
will a decrease in the number of Directors shorten the term of
any incumbent Director. Any Director elected to fill a vacancy
not resulting from an increase in the number of Directors shall
have the same remaining term as that of his predecessor.
Section 5. Rights, Powers, Duties, Rules and Procedures;
Amendment of Bylaws. (a) Except to the extent prohibited by law
or as set forth in these Articles of Incorporation or the Bylaws,
the Board of Directors shall have the right (which, to the extent
exercised, shall be exclusive) to establish the rights, powers,
duties, rules and procedures that from time to time shall govern
the Board of Directors and each of its members, including,
without limitation, the vote required for any action by the Board
of Directors, and that from time to time shall affect the
Directors' power to manage the business and affairs of this
Corporation. Except to the extent required by law or as set forth
in these Articles of Incorporation or the Bylaws, no Bylaw shall
be adopted by stockholders which shall impair or impede the
implementation of the foregoing.
(b) The Board of Directors is expressly authorized and
empowered, in the manner provided in the Bylaws of this
Corporation, to adopt, amend and repeal the Bylaws of this
Corporation in any respect to the full extent permitted by the
General Corporation Code not inconsistent with the laws of the
General Corporation Code or with these Articles of Incorporation,
provided that
(i) prior to the fourth anniversary of the Restructuring
Closing Date, ARTICLE IV, SECTION 13 of the Bylaws may not be
amended, altered, repealed, superseded or made inoperative or
ineffective by adoption of other provisions to the Bylaws or
these Articles of Incorporation (any such action, a "CP Covered
Bylaws Amendment") without the affirmative vote of the holders of
record of (i) a majority of the votes represented by the shares
of PCS Stock and Class A Common Stock then outstanding, voting
together as a single class in accordance with ARTICLE SIXTH,
Section 3.2(d), and (ii) a majority of the votes represented by
the shares of Corporation Common Stock, voting together as a
single class, at any annual or special meeting of stockholders,
the notice of which shall have specified or summarized the
proposed CP Covered Bylaws Amendment; and
(ii) the following provisions of the Bylaws may not be
amended, altered, repealed, superseded or made inoperative or
ineffective by adoption of other provisions to the Bylaws or
these Articles of Incorporation (any such action, a "Class A
Covered Bylaws Amendment") without the affirmative vote of the
holders of record of a majority of the votes represented by the
shares of Class A Stock then outstanding, voting together as a
single class, at any annual or special meeting of stockholders,
the notice of which shall have specified or summarized the
proposed Class A Covered Bylaws Amendment: ARTICLE III, SECTIONS
2, 4, 5, 8 AND 9; ARTICLE IV, SECTIONS 5, 6, 10, 11 AND 12;
ARTICLE VI, SECTION 1; AND ARTICLE VII, SECTIONS 1 AND 2.
Section 6. Removal; Changes in Status; Preferred Stock
Directors. (a) Except as provided in paragraphs (c) or (d) of
this Section 6, a Director (other than a Director elected by the
Class A Holders or by the holders of any class or series of
Preferred Stock having the right, voting separately by class or
series, to elect Directors) may be removed only for cause. No
Director so removed may be reinstated for so long as the cause
for removal continues to exist. Such removal for cause may be
effected only by the affirmative vote of the holders of a
majority of the votes represented by the shares of the class or
classes of stockholders which were entitled to elect such
Director.
(b) A Director elected by the Class A Holders may be removed
with or without cause. If removed for cause, no Director so
removed may be reinstated for so long as the cause for removal
continues to exist. Removal may be effected with or without cause
by the affirmative vote of the holders of a majority of the votes
represented by the shares of Class A Stock or with cause by the
affirmative vote of the holders of two-thirds of the votes
represented by the shares of the Non-Class A Common Stock, the
Class A Stock and other capital stock of this Corporation
entitled to general voting power, voting together as a single
class.
(c) If a Director elected by the holders of Non-Class A Common
Stock who was not, at the time of his election to the Board of
Directors, an Alien, subsequently becomes an Alien, the effect of
which would be that the number of Aliens who would then be
serving as members of the Board of Directors, including the
Director who changed status, would constitute more than the
maximum number of Aliens permitted on the Board of Directors
under Section 310, such Director shall upon his change in status
automatically and without further action be removed from the
Board of Directors.
(d) So long as any Class A Stock is outstanding, if an
Independent Director elected by the holders of Non-Class A Common
Stock subsequently ceases to be an Independent Director, the
effect of which would be that the Independent Directors who would
then be serving as members of the Board of Directors would not
constitute a majority of the Board of Directors, such Director
shall automatically and without further action upon his change in
status be removed from the Board of Directors.
(e) (i) So long as any Class A Stock is outstanding, if a
Director elected by the holders of any class or series of
Preferred Stock having the right, voting separately by class or
series, to elect Directors (a "Preferred Stock Director") is an
Alien, or after election becomes an Alien, the effect of which
would be that the number of Aliens who would then be serving as
members of the Board of Directors (including such Preferred Stock
Director) would constitute more than the maximum number of Aliens
permitted on the Board of Directors under Section 310, the total
number of Directors shall automatically and without further
action be increased by the smallest number necessary to enable
the Class A Holders (and the Directors elected by the Class A
Holders in the case of vacancies) to elect Aliens as Directors to
the fullest extent that the Class A Holders are entitled to elect
Directors pursuant to Section 2(a) of this ARTICLE FIFTH without
violating the requirements of Section 310.
(ii) So long as any Class A Stock is outstanding, if a
Preferred Stock Director is not an Independent Director, or after
election ceases to be an Independent Director, the effect of
which would be that the Independent Directors who would then be
serving as members of the Board of Directors would not constitute
a majority of the Board of Directors, the total number of
Directors shall automatically and without further action be
increased by the smallest number necessary so that the number of
Directors then serving who are not Independent Directors
(including such Preferred Stock Director and any vacancies which
the holders of Class A Stock have a right to fill) constitute
less than a majority of the Board of Directors.
Section 7. Definitions. Certain capitalized terms used in
this ARTICLE FIFTH without definition have the meanings set forth
in Section 10 of ARTICLE SIXTH.
Sixth
Section 1.1. Authorized Shares. The total number of shares
of capital stock which may be issued by this Corporation is
6,770,000,000, and the designation of each class or series, the
number of authorized shares of each class or series and the par
value of the shares of each class or series, are as follows:
<TABLE>
Authorized Shares
<CAPTION>
No. of Par
Designation Class Series Shares Value
<S> <C> <C> <C> <C>
The "Series 1 FON Stock" FON Common Series 1 2,500,000,000 $ 2.00 per
Stock share
The "Series 2 FON Stock" FON Common Series 2 500,000,000 $ 2.00 per
Stock share
The "Series 3 FON Stock" FON Common Series 3 1,200,000,000 $ 2.00 per
Stock share
The "Old Class A Common Class A 100,000,000 $ 2.50 per
Stock" Common Stock share
The "Class A Common Stock Class A Series DT 100,000,000 $ 2.50 per
Series DT" Common Stock share
The "Series 1 PCS Stock" PCS Common Series 1 1,250,000,000 $ 1.00 per
Stock share
The "Series 2 PCS Stock" PCS Common Series 2 500,000,000 $ 1.00 per
Stock share
The "Series 3 PCS Stock" PCS Common Series 3 600,000,000 $ 1.00 per
Stock share
The "Preferred Stock" Preferred See Section 20,000,000 No par
Stock below value
</TABLE>
Section 1.2. Representation of Equity Value; Exchange of
Interests in Class A Common Stock. (a) The aggregate common
equity value of the Corporation and each Business Group shall, at
any time, be represented as follows:
(i) The total common equity value of the Corporation shall be
represented by the sum of the outstanding shares of (A) the FON
Stock, (B) the PCS Stock and (C) the Class A Common Stock.
(ii) The total common equity value of the FON Group shall be
represented by the sum of (A) the outstanding shares of the FON
Stock and (B) the outstanding shares of Old Class A Common Stock
and Class A Common Stock-Series DT (but only to the extent such
stock represents a Number Of Shares Issuable With Respect To The
Old Class A Equity Interest In The FON Group and a Number Of
Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The FON Group, respectively).
(iii) The total common equity value of the PCS Group shall be
represented by the sum of (A) the outstanding shares of the PCS
Stock, (B) the Number Of Shares Issuable With Respect To The FON
Group Intergroup Interest, and (C) the outstanding shares of Old
Class A Common Stock and Class A Common Stock-Series DT (but only
to the extent such stock represents a Number Of Shares Issuable
With Respect To The Old Class A Equity Interest In The PCS Group
and a Number Of Shares Issuable With Respect To The Class
A-Series DT Equity Interest In The PCS Group, respectively).
(b) The Old Class A Common Stock and Class A Common
Stock-Series DT shall, at all times, be deemed to represent,
respectively, a number of shares of Series 3 FON Stock and/or
Series 3 PCS Stock equal to: (A) the Number Of Shares Issuable
With Respect To The Old Class A Equity Interest In The FON Group
plus the Number Of Shares Issuable With Respect To The Old Class
A Equity Interest In The PCS Group and (B) the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The FON Group plus the Number Of Shares Issuable With Respect To
The Class A-Series DT Equity Interest In The PCS Group.
(c) Each holder of a share of Old Class A Common Stock shall
have the right, exercisable at any time and from time to time, to
cause the Corporation to issue the following:
(i) in respect of each share notionally represented in the
Number Of Shares Issuable With Respect To The Old Class A Equity
Interest In The FON Group, either a share of Series 3 FON Stock
to such holder (or to a Qualified Subsidiary of such holder) or a
share of Series 1 FON Stock to a designee of such holder,
provided a transfer of such share to such designee is permitted
under the Stockholders' Agreement; or
(ii) in respect of each share notionally represented in the
Number Of Shares Issuable With Respect To The Old Class A Equity
Interest In The PCS Group, either a share of Series 3 PCS Stock
to such holder (or to a Qualified Subsidiary of such holder) or a
share of Series 1 PCS Stock to a designee of such holder,
provided a transfer of such share to such designee is permitted
under the Stockholders' Agreement.
A holder of Old Class A Common Stock may exercise its right to
cause any such issuance solely with respect to the Number Of
Shares Issuable With Respect To The Old Class A Equity Interest
In The FON Group, solely with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group, or any combination thereof; provided,
(x) when the Number Of Shares Issuable With Respect To The Old
Class A Equity Interest In The FON Group is reduced to zero, no
further shares of Series 1 FON Stock or Series 3 FON Stock may be
issued pursuant to this Section 1.2(c),
(y) when the Number Of Shares Issuable With Respect To The Old
Class A Equity Interest In The PCS Group is reduced to zero, no
further shares of Series 1 PCS Stock or Series 3 PCS Stock may be
issued pursuant to this Section 1.2(c), and
(z) if at any time the Number Of Shares Issuable With Respect
To The Old Class A Equity Interest In The FON Group and the
Number Of Shares Issuable With Respect To The Old Class A Equity
Interest In The PCS Group are both zero, the Old Class A Common
Stock may be redeemed, at the Corporation's option, at a
redemption price of $0.001 per share.
(d) Each holder of a share of Class A Common Stock-Series DT
shall have the right, exercisable at any time and from time to
time, to cause the Corporation to issue the following:
(i) in respect of each share notionally represented in the
Number Of Shares Issuable With Respect To The Class A-Series DT
Equity Interest In The FON Group, either a share of Series 3 FON
Stock to such holder (or to a Qualified Subsidiary of such
holder) or a share of Series 1 FON Stock to a designee of such
holder, provided a transfer of such share to such designee is
permitted under the Stockholders' Agreement; and
(ii) in respect of each share notionally represented in the
Number Of Shares Issuable With Respect To The Class A-Series DT
Equity Interest In The PCS Group, either a share of Series 3 PCS
Stock to such holder (or to a Qualified Subsidiary of such
holder) or a share of Series 1 PCS Stock to a designee of such
holder, provided a transfer of such share to such designee is
permitted under the Stockholders' Agreement.
A holder of Class A Common Stock-Series DT may exercise its
right to cause any such issuance solely with respect to the
Number Of Shares Issuable With Respect To The Class A-Series DT
Equity Interest In The FON Group, solely with respect to the
Number Of Shares Issuable With Respect To The Class A-Series DT
Equity Interest In The PCS Group, or any combination thereof;
provided,
(i) when the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The FON Group is reduced to
zero, no further shares of Series 1 FON Stock or Series 3 FON
Stock may be issued pursuant to this Section 1.2(d),
(ii) when the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The PCS Group is reduced to
zero, no further shares of Series 1 PCS Stock or Series 3 PCS
Stock may be issued pursuant to this Section 1.2(d), and
(iii) if at any time the Number Of Shares Issuable With
Respect To The Class A-Series DT Equity Interest In The FON Group
and the Number Of Shares Issuable With Respect To The Class
A-Series DT Equity Interest In The PCS Group are both zero, the
Class A Common Stock-Series DT may be redeemed, at the
Corporation's option, at a redemption price of $0.001 per share.
(e) Automatic Reclassification and Adjustment to Par Value
Amount.
(i) Upon each issuance of any shares of Series 1 FON Stock
and/or Series 3 FON Stock, on the one hand, and Series 1 PCS
Stock and/or Series 3 PCS Stock, on the other, in accordance with
Section 1.2(c), each share of the Corporation's existing Old
Class A Common Stock will be automatically reclassified into a
share of Class A Common Stock with a par value amount equal to
the Reduced Par Value Amount and the Number Of Shares Issuable
With Respect To The Old Class A Equity Interest In The FON Group
and the Number Of Shares Issuable With Respect To The Old Class A
Equity Interest In The PCS Group, respectively, will be reduced
in accordance with the definitions of such terms set forth in
ARTICLE SIXTH, Section 10; provided that after each such
reclassification, the sum of (x) the total number of outstanding
shares of Series 1 FON Stock and/or Series 3 FON Stock, on the
one hand, or Series 1 PCS Stock and/or Series 3 PCS Stock, on the
other, so issued in accordance with Section 1.2(c) times the par
value per share of such stock and (y) the total number of
outstanding shares of Old Class A Common Stock immediately after
such issuance times the Reduced Par Value Amount will always
equal (z) the total number of outstanding shares of Old Class A
Common Stock immediately prior to such issuance times the par
value per share of such shares existing immediately prior to such
issuance.
(ii) Upon each issuance of any shares of Series 1 FON Stock
and/or Series 3 FON Stock, on the one hand, and Series 1 PCS
Stock and/or Series 3 PCS Stock, on the other, in accordance with
Section 1.2(d), each share of the Corporation's existing Class A
Common Stock-Series DT will be automatically reclassified into a
share of Class A Common Stock-Series DT with a par value amount
equal to the Reduced Par Value Amount and the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The FON Group and the Number Of Shares Issuable With Respect To
The Class A-Series DT Equity Interest In The PCS Group,
respectively, will be reduced in accordance with the definitions
of such terms set forth in ARTICLE SIXTH, Section 10; provided
that after each such reclassification, the sum of (x) the total
number of outstanding shares of Series 1 FON Stock and/or Series
3 FON Stock, on the one hand, or Series 1 PCS Stock and/or Series
3 PCS Stock, on the other, so issued in accordance with Section
1.2(d) times the par value per share of such stock and (y) the
total number of outstanding shares of Class A Common Stock-Series
DT immediately after such issuance times the Reduced Par Value
Amount will always equal (z) the total number of outstanding
shares of Class A Common Stock-Series DT immediately prior to
such issuance times the par value per share of such shares
existing immediately prior to such issuance.
(f) Notice Provisions; Issuance of Stock Certificates, etc.
(i) A Class A Holder shall exercise its rights under this
Section 1.2 by delivering a written notice to the Corporation (an
"Issuance Notice") signed by an authorized officer of the Class A
Holder specifying (1) the class and series of the Shares to be
issued by the Corporation, (2) the number of shares of each to be
issued pursuant to such request, and (3) the name of the Person
in whose name the shares are to be issued (such a Person, a
"Designee").
(ii) As promptly as practical after receipt of an Issuance
Notice, and in no event later than 5 Business Days thereafter,
the Corporation will deliver or cause to be delivered a
certificate or certificates representing the number of duly
issued, fully paid and nonassessable shares issued pursuant to
the Issuance Notice; provided, however, that the Corporation
shall not be obligated to issue such shares if any material
defect exists with respect to such Issuance Notice.
(iii) Immediately upon the issuance of the shares of Series 1
FON Stock, Series 3 FON Stock, Series 1 PCS Stock and Series 3
PCS Stock pursuant to an Issuance Notice, the Designee shall be
treated for all purposes as having become the record holder of
the shares of such stock so issued.
(iv) This Corporation shall pay all United States federal,
state or local documentary, stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of shares in
connection with an Issuance Notice pursuant to this Section 1.2,
provided that this Corporation shall not be required to pay any
tax which may be payable in respect of any registration of
Transfer involved in the issue or delivery of such shares in a
name other than that of the registered holder of the Class A
Common Stock that gave rise to the right to cause the issuance of
such Shares, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to this
Corporation the amount of any such tax or has established, to the
satisfaction of this Corporation, that such tax has been paid.
(v) In addition to the obligations of the Corporation
contained in these Articles of Incorporation to reserve and keep
available Shares, this Corporation shall at all times reserve and
keep available, out of the aggregate of its authorized but
unissued Series 3 FON Stock, Series 3 PCS Stock, Series 1 PCS
Stock and Series 1 FON Stock and its issued Series 1 FON Stock or
Series 1 PCS Stock held in its treasury, Shares for the purpose
of effecting the issuances of the Series 3 FON Stock, Series 1
FON Stock, Series 3 PCS Stock and Series 1 PCS Stock contemplated
hereby.
Section 2. General Provisions Relating to All Stock.
2.1. Preemptive Rights; Cumulative Voting. No holder of
shares of capital stock of any class or series of this
Corporation or holder of any security or obligation convertible
into shares of capital stock of any class or series of this
Corporation shall have any preemptive right whatsoever to
subscribe for, purchase or otherwise acquire shares of capital
stock of any class or series of this Corporation, whether now or
hereafter authorized; provided that this provision shall not (i)
prohibit this Corporation from granting, contractually or
otherwise, to any such holder, the right to purchase additional
securities of this Corporation or (ii) otherwise limit or
otherwise modify any rights of any such holder pursuant to any
such contract or other agreement. Stockholders of this
Corporation shall not be entitled to cumulative voting of their
shares in elections of Directors.
2.2. Redemption of Shares Held by Aliens. Notwithstanding
any other provision of these Articles of Incorporation to the
contrary, outstanding shares of Non-Class A Common Stock
Beneficially Owned by Aliens and Class A Stock Beneficially Owned
by Aliens may be redeemed by this Corporation, by action duly
taken by the Board of Directors (with the approval of a majority
of the Continuing Directors (as defined in ARTICLE SEVENTH) at a
meeting at which at least seven Continuing Directors are present,
except that no such approval of the Continuing Directors shall be
required if
(i) the Fair Price Provisions have been deleted in their
entirety,
(ii) the Fair Price Provisions have been modified so as
explicitly not to apply to any Class A Holder, or they have been
modified in a manner reasonably satisfactory to FT and DT so as
explicitly not to apply to any transactions with any Class A
Holder contemplated under these Articles of Incorporation,
(iii) the transaction in question is not a "Business
Combination" within the meaning of the Fair Price Provisions, or
(iv) the Class A Holder that is a party to the transaction,
along with its Affiliates (as such term is defined in Rule 12b-2
under the Securities Exchange Act of 1934, as in effect on
October 1, 1982) and Associates (as such term is defined in Rule
12b-2 under the Securities Exchange Act of 1934, as in effect on
October 1, 1982), is no longer an "Interested Stockholder" or
"Affiliate" of an "Interested Stockholder" within the meaning of
the Fair Price Provisions),
to the extent necessary or advisable, in the judgment of the
Board of Directors, for this Corporation or any of its
Subsidiaries to comply with the requirements of Section 310 (each
of (i) through (iv), a "Fair Price Condition"), provided that (i)
for purposes of these Articles of Incorporation, redemption of
the Class A Common Stock is deemed to occur upon the reduction,
in consideration of payments otherwise made in respect of
redemptions under this Section 2.2, of Shares Issuable With
Respect To The Class A Equity Interest In The FON Group or Shares
Issuable With Respect To The Class A Equity Interest In The PCS
Group that are represented by the Class A Common Stock (with any
such redemption of shares of Class A Common Stock being referred
to in this Section 2.2 as a redemption of Shares Issuable With
Respect To The Class A Equity Interest In The FON Group or Shares
Issuable With Respect To The Class A Equity Interest In The PCS
Group, as applicable) and (ii) Series 3 FON Stock, Series 3 PCS
Stock, Shares Issuable With Respect To The Class A Equity
Interest In The FON Group and Shares Issuable With Respect To The
Class A Equity Interest In The PCS Group may only be redeemed if,
and only to the extent that, they represent in the aggregate
Votes constituting greater than 20% of the aggregate Voting Power
of this Corporation immediately prior to the time of such
redemption.
The terms and conditions of such redemption shall be as
follows, subject in any case to any other rights of a particular
Alien or of this Corporation pursuant to any contract or
agreement between such Alien and this Corporation:
(a) except as provided in Section 2.2(f), the redemption price
of the shares to be redeemed pursuant to this Section 2.2 shall
be equal to the Market Price of such shares on the third Business
Day prior to the date notice of such redemption is given pursuant
to Section 2.2(d), provided that, except as provided in Section
2.2(f), such redemption price as to any Alien who purchased such
shares of Non-Class A Common Stock after November 21, 1995 and
within one year prior to the Redemption Date shall not (unless
otherwise determined by the Board of Directors) exceed the
purchase price paid by such Alien for such shares;
(b) the redemption price of such shares may be paid in cash,
Redemption Securities or any combination thereof;
(c) if less than all of the shares Beneficially Owned by
Aliens are to be redeemed, the shares to be redeemed shall be
selected in such manner as shall be determined by the Board of
Directors, which may include selection first of the most recently
purchased shares thereof, selection by lot or selection in any
other manner determined by the Board of Directors to be
equitable, provided that this Corporation shall
(i) in all cases be entitled to redeem shares of Non-Class
A Common Stock Beneficially Owned by Aliens prior to redeeming
any shares of Series 3 FON Stock, Series 3 PCS Stock, Shares
Issuable With Respect To The Class A Equity Interest In The FON
Group or Shares Issuable With Respect To The Class A Equity
Interest In The PCS Group Beneficially Owned by Aliens,
(ii) redeem Shares Issuable With Respect To The Class A
Equity Interest In The FON Group or Shares Issuable With Respect
To The Class A Equity Interest In The PCS Group of the holders of
Old Class A Common Stock and Class A Common Stock-Series DT on a
pro rata basis,
(iii) redeem, on a pro rata basis, Shares Issuable With
Respect To The Class A Equity Interest In The FON Group based on
the ratio of the Number Of Shares Issuable With Respect To The
Old Class A Equity Interest In The FON Group to the Number Of
Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The FON Group,
(iv) redeem, on a pro rata basis, Shares Issuable With
Respect To The Class A Equity Interest In The PCS Group based on
the ratio of the Number Of Shares Issuable With Respect To The
Old Class A Equity Interest In The PCS Group to the Number Of
Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group, and
(v) redeem shares of Series 3 PCS Stock and Series 3 FON
Stock prior to redeeming Shares Issuable With Respect To The
Class A Equity Interest In The FON Group and Shares Issuable With
Respect To The Class A Equity Interest In The PCS Group;
(d) this Corporation shall give notice of the Redemption Date
at least 30 days prior to the Redemption Date to the record
holders of the shares selected to be redeemed (unless waived in
writing by any such holder) by delivering a written notice by
first class mail, postage pre-paid, to the holders of record of
the shares selected to be redeemed, addressed to such holders at
their last address as shown upon the stock transfer books of this
Corporation (each such notice of redemption specifying the date
fixed for redemption, the redemption price, the place or places
of payment and that payment will be made upon presentation and
surrender of the certificates representing such shares), provided
that the Redemption Date may be the date on which written notice
shall be given to record holders if the cash or Redemption
Securities necessary to effect the redemption shall have been
deposited in trust for the benefit of such record holders and
subject to immediate withdrawal by them upon surrender of the
stock certificates for their shares to be redeemed;
(e) on the Redemption Date, unless this Corporation shall have
defaulted in paying or setting aside for payment the cash or
Redemption Securities payable upon such redemption, any and all
rights of Aliens in respect of shares so redeemed (including
without limitation any rights to vote or participate in
dividends), shall cease and terminate, and from and after such
Redemption Date such Aliens shall be entitled only to receive the
cash or Redemption Securities payable upon redemption of the
shares to be redeemed; and
(f) such other terms and conditions as the Board of Directors
shall determine to be equitable, provided that,
(1) if any Shares Issuable With Respect To The Class A
Equity Interest In The FON Group or Shares Issuable With Respect
To The Class A Equity Interest In The PCS Group are redeemed
pursuant to this Section 2.2, (x) the redemption price, on a per
share basis, of Shares Issuable With Respect To The Class A
Equity Interest In The FON Group shall be an amount equal to the
redemption price of a share of Series 3 FON Stock calculated
pursuant to subsection (f)(2) of this Section 2.2, and (y) the
redemption price, on a per share basis, of Shares Issuable With
Respect To The Class A Equity Interest In The PCS Group shall be
an amount equal to the redemption price of shares of Series 3 PCS
Stock calculated pursuant to subsection (f)(4) of this Section
2.2;
(2) if any shares of Series 3 FON Stock are redeemed
pursuant to this Section 2.2, the redemption price thereof shall
be a per share price equal to the greater of (A) the Market Price
of a share of Series 1 FON Stock on the Redemption Date and (B)
the Weighted Average Price paid by the Class A Holders for the
Series 3 FON Stock (or Shares Issuable With Respect To The Class
A Equity Interest In The FON Group, if applicable) together with
a stock appreciation factor thereon (calculated on the basis of a
365-day year) at the rate of 3.88% through and including the
Redemption Date, such stock appreciation factor to be calculated,
on an annual compounding basis, from (x) the date of purchase of
such Series 3 FON Stock or (y) in the case of either a share of
Series 3 FON Stock issued in connection with ARTICLE SIXTH,
Section 1.2 or any Shares Issuable With Respect To The Class A
Equity Interest In The FON Group, the date of purchase of the
Class A Common Stock that represented such shares, until the
Redemption Date, provided, that if this Corporation redeems any
shares hereunder after April 26, 1999, the redemption price
thereof shall be the Market Price of a share of Series 1 FON
Stock on the Redemption Date;
(3) if any shares of Series 2 PCS Stock (or Series 2 FON
Stock, if applicable) are redeemed pursuant to this Section 2.2,
the redemption price of any such shares redeemed shall be a per
share price equal to the greater of (A) the Market Price of a
share of Series 1 PCS Stock (or Series 1 FON Stock, if
applicable) on the Redemption Date and (B) the Weighted Average
Price paid by the holders thereof for the Series 2 PCS Stock (or
Series 2 FON Stock, if applicable) together with a stock
appreciation factor thereon (calculated on the basis of a 365-day
year) at the rate of 3.88% through and including the Redemption
Date, such stock appreciation factor to be calculated, on an
annual compounding basis, from the date of purchase of such
Series 2 PCS Stock (or Series 2 FON Stock, if applicable) until
the Redemption Date, provided, that if this Corporation redeems
any shares of Series 2 PCS Stock (or Series 2 FON Stock, if
applicable) after April 26, 1999, the redemption price of any
such shares redeemed shall be the Market Price of a share of
Series 1 PCS Stock (or Series 1 FON Stock, if applicable) on the
Redemption Date; and
(4) if any shares of Series 3 PCS Stock are redeemed
pursuant to this Section 2.2, the redemption price thereof shall
be a per share price equal to the greater of (A) the Market Price
of a share of Series 1 PCS Stock on the Redemption Date and (B)
the Weighted Average Price paid by the holders thereof for the
Series 3 PCS Stock (or Shares Issuable With Respect To The Class
A Equity Interest In The PCS Group, if applicable) together with
a stock appreciation factor thereon (calculated on the basis of a
365-day year) at the rate of 3.88% through and including the
Redemption Date, such stock appreciation factor to be calculated,
on an annual compounding basis, from (x) the date of purchase of
such Series 3 PCS Stock, or (y) in the case of a share of Series
3 PCS Stock issued in connection with ARTICLE SIXTH, Section 1.2
or Shares Issuable With Respect To The Class A Equity Interest In
The PCS Group, the date of purchase of the Class A Common Stock
that represented such shares, until the Redemption Date,
provided, that if this Corporation redeems any shares hereunder
after April 26, 1999, the redemption price thereof shall be the
Market Price of a share of Series 1 PCS Stock on the Redemption
Date.
The redemption price to be paid to the Class A Holders shall
be modified in accordance with Article IX of the Stockholders'
Agreement if either (i) such redemption is effected on or
prior to April 26, 1999, or (ii) such redemption is effected
within the 120-day period described in the last sentence of
Section 2.11 of the Stockholders' Agreement (as such period
may be extended pursuant thereto) following an election by
this Corporation to redeem shares in accordance with such
Section.
Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the
holder of shares to be redeemed received such notice, provided
that all notices to be given to the Class A Holders shall be made
and deemed delivered in accordance with Section 11 of ARTICLE
SIXTH and failure to give such notice by mail, or any defect in
such notice, to holders of shares designated for redemption shall
not affect the validity of the proceedings for the redemption of
any other shares.
2.3. Beneficial Ownership Inquiry. (a) This Corporation may
by written notice require a Person that is a holder of record of
Non-Class A Common Stock or Class A Stock or that this
Corporation knows to have, or has reasonable cause to believe
has, Beneficial Ownership of Non-Class A Common Stock or Class A
Stock, to certify that, to the knowledge of such Person:
(i) no Non-Class A Common Stock or Class A Stock as to which
such Person has record ownership or Beneficial Ownership is
Beneficially Owned by Aliens; or
(ii) the number and class or series of shares of Non-Class A
Common Stock or Class A Stock owned of record or Beneficially
Owned by such Person that are owned of record or Beneficially
Owned by Persons that are Aliens are as set forth in such
certificate.
(b) With respect to any Non-Class A Common Stock or Class A
Stock identified by such Person in response to Section 2.3(a)(ii)
above, this Corporation may require such Person to provide such
further information as this Corporation may reasonably require in
order to implement the provisions of Section 2.2 of ARTICLE
SIXTH.
(c) For purposes of applying Section 2.2 of ARTICLE SIXTH with
respect to any Non-Class A Common Stock or Class A Stock, if any
Person fails to provide the certificate or other information to
which this Corporation is entitled pursuant to this Section 2.3,
this Corporation in its sole discretion may presume that the Non-
Class A Common Stock or Class A Stock in question is, or is not,
Beneficially Owned by Aliens.
2.4. Factual Determinations. The Board of Directors shall
have the power and duty to construe and apply the provisions of
Sections 2.2 and 2.3 of ARTICLE SIXTH and, with respect to shares
of Non-Class A Common Stock, to make all determinations necessary
or desirable to implement such provisions, including but not
limited to: (a) the number of shares of Non-Class A Common Stock
that are Beneficially Owned by any Person; (b) whether a Person
is an Alien; (c) the application of any other definition of these
Articles of Incorporation to the given facts; and (d) any other
matter relating to the applicability or effect of Section 2.2 of
ARTICLE SIXTH.
2.5. Loss of Voting Rights. If (a) there is a breach by FT,
DT, any Qualified Subsidiary, any Strategic Investor or any
Qualified Stock Purchaser of any of the provisions of Sections
3.1(a) or 3.2(b) (as it relates to matters described in Section
3.1(a)) of the Standstill Agreement or any corresponding
provision of any Qualified Subsidiary Standstill Agreement,
Strategic Investor Standstill Agreement or Qualified Stock
Purchaser Standstill Agreement, (b) there is a willful breach in
any material respect by FT, DT, any Qualified Subsidiary, any
Strategic Investor or any Qualified Stock Purchaser of any
provision of Section 3.1 (other than Section 3.1(a)) of the
Standstill Agreement or any corresponding provision of any
Qualified Subsidiary Standstill Agreement, Strategic Investor
Standstill Agreement or Qualified Stock Purchaser Standstill
Agreement, or (c) a Government Affiliate or Related Company (each
as defined in the Standstill Agreement) takes an action which if
taken by FT or DT would violate Sections 3.1 or 3.2(b) (as it
relates to matters other than those described in Section 3.1(a))
of the Standstill Agreement, then FT and its Qualified
Subsidiaries (except in the case of a breach arising from the
action of a Government Affiliate of Germany, a Related Company of
DT or a Strategic Investor in a Qualified Subsidiary of DT in
which FT is not an investor), DT and its Qualified Subsidiaries
(except in the case of a breach arising from the action of a
Government Affiliate of France, a Related Company of FT or a
Strategic Investor in a Qualified Subsidiary of FT in which DT is
not an investor) and each Qualified Stock Purchaser shall not be
entitled to vote any of their shares of capital stock of this
Corporation with respect to any matter or proposal arising from,
relating to or involving, such breach or action, and no such
purported vote by such Class A Holders on such matter shall be
effective or shall be counted.
Section 3. Voting Powers.
Section 3.1. General. Except as otherwise provided by law
or as expressly set forth in ARTICLE FIFTH or in this ARTICLE
SIXTH, each share of Corporation Common Stock shall be entitled
to vote, as provided in ARTICLE SIXTH, Section 3.2 and ARTICLE
SIXTH, Section 7.5(d) (with respect to Class A Stock only), on
all matters in respect of which the holders of Corporation Common
Stock are entitled to vote, and, except as otherwise provided by
the terms of any outstanding series of Preferred Stock, the
holders of Corporation Common Stock shall vote together with the
holders of all other classes or series of capital stock which
have general voting power on all such matters as a single class;
provided, however, that
(i) holders of FON Stock and Class A Common Stock, voting
together as a single class in accordance with Section 3.2(c),
shall be entitled to vote upon a proposed amendment to these
Articles of Incorporation if such amendment would (A) increase or
decrease the aggregate number of authorized shares of FON Stock,
(B) increase or decrease the par value of the shares of FON Stock
or (C) alter or change the powers, preferences or special rights
of the shares of FON Stock so as to affect them adversely, and
(ii) holders of PCS Stock and Class A Common Stock, voting
together as a single class in accordance with Section 3.2(d),
shall be entitled to vote upon a proposed amendment to these
Articles of Incorporation if such amendment would (A) increase or
decrease the aggregate number of authorized shares of PCS Stock,
(B) increase or decrease the par value of shares of PCS Stock or
(C) alter or change the powers, preferences or special rights of
the shares of PCS Stock so as to affect them adversely.
The Board of Directors is authorized to adopt resolutions
requiring the approval of any class or series of capital stock,
alone or together with any other class or series of capital
stock, as a condition precedent, or condition subsequent, to the
approval, adoption, authorization or consummation of any action,
transaction or any other matter by or involving the Corporation,
and no provision contained in the Amended and Restated Articles
of Incorporation shall be interpreted to limit or restrict such
authority in any way.
Section 3.2. Number of Votes. (a) On each matter to be
voted on by the holders of Non-Class A Common Stock and Class A
Stock voting together as a single class,
(i) each outstanding share of Series 1 FON and Series 3 FON
Stock is entitled to one vote (subject, in the case of the Series
3 FON Stock, to any increase in accordance with ARTICLE SIXTH,
Section 7.5(d));
(ii) subject to any increase resulting from the provisions of
ARTICLE SIXTH, Section 7.5(d), each outstanding share of Old
Class A Common Stock and Class A Common Stock-Series DT is
entitled to a number of votes (which, at any time, may be more or
less than one whole vote and may include a fraction of a vote)
equal to the sum of (A) in the case of the Old Class A Common
Stock, the Old Class A FON Vote Per Share and the Old Class A PCS
Vote Per Share (computed as of the tenth Trading Day preceding
the record date for determining the stockholders entitled to
vote, expressed as a decimal fraction rounded to the nearest
three decimal places); and (B) in the case of the Class A Common
Stock-Series DT, the Class A-Series DT FON Vote Per Share and the
Class A-Series DT PCS Vote Per Share; (computed as of the tenth
Trading Day preceding the record date for determining the
stockholders entitled to vote, expressed as a decimal fraction
rounded to the nearest three decimal places);
(iii) each outstanding share of Series 1 PCS Stock is entitled
to a number of votes (which, at any time, may be more or less
than one whole vote and may include a fraction of a vote) (the
"PCS Per Share Vote") equal to (x) if the record date for
determining the stockholders entitled to vote is on or before
December 31, 1998, the number of votes determined by multiplying
one by the PCS Ratio and (y) if the record date for determining
the stockholders entitled to vote is after December 31, 1998, the
number of votes determined by multiplying one by the ratio of the
Average Trading Price of one share of Series 1 PCS Stock to the
Average Trading Price of one share of Series 1 FON Stock computed
as of the tenth Trading Day preceding the record date for
determining the stockholders entitled to vote, expressed as a
decimal fraction rounded to the nearest three decimal places;
(iv) each outstanding share of Series 2 PCS Stock is entitled
to a number of votes (which, at any time, may be more or less
than one whole vote and may include a fraction of one vote) equal
to ten percent of the applicable PCS Per Share Vote as determined
in accordance with Section 3.2(a)(iii);
(v) each outstanding share of Series 3 PCS Stock is entitled
to a number of votes (which, at any time, may be more or less
than one whole vote and may include a fraction of one vote) equal
to the applicable PCS Per Share Vote as determined in accordance
with Section 3.2(a)(iii) (subject to any increase in accordance
with ARTICLE SIXTH, Section 7.5(d)); and
(vi) each outstanding share of Series 2 FON Stock is entitled
to ten percent of one vote.
(b) On each matter to be voted on by the holders of Non-Class
A Common Stock voting together as a single class,
(i) each outstanding share of Series 1 FON Stock is entitled
to one vote;
(ii) each outstanding share of Series 1 PCS Stock is entitled
to the PCS Per Share Vote determined in accordance with Section
3.2(a)(iii);
(iii) each outstanding share of Series 2 PCS Stock is entitled
to a number of votes determined in accordance with Section
3.2(a)(iv); and
(iv) each outstanding share of Series 2 FON Stock is entitled
to ten percent of one vote.
(c) On each matter to be voted on by the holders of FON Stock
and Class A Common Stock, voting together as a single class, each
outstanding share of (i) Series 1 FON Stock, Series 2 FON Stock
and Series 3 FON Stock is entitled to one vote and (ii) Old Class
A Common Stock and Class A Common Stock-Series DT is entitled to
the Old Class A FON Vote Per Share and the Class A-Series DT FON
Vote Per Share, respectively.
(d) On each matter to be voted on by the holders of the PCS
Stock and Class A Common Stock voting together as a single class,
each outstanding share of (i) Series 1 PCS Stock, Series 2 PCS
Stock and Series 3 PCS Stock is entitled to one vote and (ii) Old
Class A Common Stock and Class A Common Stock-Series DT is
entitled to the Old Class A PCS Vote Per Share and the Class
A-Series DT PCS Vote Per Share, respectively.
(e) On each matter to be voted on by the holders of the Class
A Stock voting together as a single class, each outstanding share
of (i) Series 3 FON Stock is entitled to one vote, (ii) Series 3
PCS Stock is entitled to the PCS Vote Per Share determined in
accordance with Section 3.2(a)(v), and (iii) Old Class A Common
Stock and Class A Common Stock-Series DT is entitled to their
respective per share vote determined in accordance with Section
3.2(a)(ii).
(f) In addition to the foregoing provisions of this Section 3,
(i) if shares of only one class or series of Corporation Common
Stock are outstanding on the record date for determining the
holders of Corporation Common Stock entitled to vote on any
matter, then each share of that class or series shall be entitled
to one vote and (ii) if any class or any series of Corporation
Common Stock votes as a single class with respect to any matter,
each share of that class or series shall, for purposes of such
vote, be entitled to one vote on such matter except with respect
to a vote of Old Class A Common Stock and Class A Common
Stock-Series DT voting together as a single class, in which case
each share of such stock shall be entitled to its per share vote
determined in accordance with Section 3.2(a)(ii).
Section 4. Liquidation Rights. If any voluntary or
involuntary liquidation, dissolution or winding up of this
Corporation occurs, then after payment or provision for payment
of the debts and other liabilities of this Corporation, including
the liquidation preferences of any series of Preferred Stock, the
holders of Corporation Common Stock shall be entitled to receive
the remaining assets of the Corporation, regardless of the
Business Group to which such assets are attributed in accordance
with Section 10 of this ARTICLE SIXTH, divided among such holders
in accordance with the per share "Liquidation Units" attributable
to each such class or series of stock as follows:
(i) each share of Series 1 FON Stock, Series 2 FON Stock and
Series 3 FON Stock is hereby attributed one "Liquidation Unit,"
(ii) at the time of the liquidation, dissolution or winding up
of this Corporation, each share of Old Class A Common Stock will
be attributed a number of "Liquidation Units" (which may be more
or less than one whole "Liquidation Unit" and may include a
fraction of a "Liquidation Unit") equal to (A) the sum of (I) the
Number Of Shares Issuable With Respect To The Old Class A Equity
Interest In The FON Group and (II) the product of the Number Of
Shares Issuable With Respect To The Old Class A Equity Interest
In The PCS Group and the PCS Ratio, divided by (B) the aggregate
number of shares of Old Class A Common Stock outstanding;
(iii) at the time of the liquidation, dissolution or winding
up of this Corporation, each share of Class A Common Stock-Series
DT will be attributed a number of "Liquidation Units" (which may
be more or less than one whole "Liquidation Unit" and may include
a fraction of a "Liquidation Unit") equal to (A) the sum of (I)
the Number Of Shares Issuable With Respect To The Class A-Series
DT Equity Interest In The FON Group and (II) the product of the
Number Of Shares Issuable With Respect To The Class A-Series DT
Equity Interest In The PCS Group and the PCS Ratio, divided by
(B) the aggregate number of shares of Class A Common StockSeries
DT outstanding; and
(iv) each share of PCS Stock is hereby attributed the number
of "Liquidation Units" determined by multiplying one by the PCS
Ratio.
The per share "Liquidation Units" of each such class or series of
stock are subject to adjustment as determined by the Board of
Directors to be appropriate to reflect equitably (i) any
subdivision (by stock split or otherwise) or combination (by
reverse stock split or otherwise) of such class or series of
stock or (ii) any dividend or other distribution of shares of
such class or series of stock to holders of shares of such class
or series of stock. Neither the merger nor consolidation of this
Corporation, nor the Transfer of all or part of its assets, shall
be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of this Corporation within the meaning
of this Section 4. Notwithstanding the foregoing, any transaction
or series of related transactions which results in the
distribution of all or substantially all of the assets of the PCS
Group (excluding any portion of such assets retained by the
Corporation or distributed to holders of FON Stock in respect of
the FON Group Intergroup Interest Fraction) to the holders of the
outstanding PCS Stock and Class A Common Stock (to the extent of
any Shares Issuable With Respect To The Class A Equity Interest
In The PCS Group) by way of the distribution of equity interests
in one or more entities that collectively hold, directly or
indirectly, all or substantially all of the assets of the PCS
Group (including, without limitation, the PCS Group Subsidiary)
shall not constitute a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation for purposes of this
Section 4 but shall be subject to ARTICLE SIXTH, Section 7.2.
Section 5. Dividends. Dividends shall be declared and paid
only out of net income or surplus of this Corporation and may be
declared and paid upon each class and series of Corporation
Common Stock, upon the terms with respect to each such class and
series, and subject to the limitations provided for in this
Section 5 and in Section 13, as the Board of Directors may
determine.
5.1. Generally. Dividends on Corporation Common Stock may be
declared and paid only out of the funds of the Corporation
legally available therefor.
5.1.1. The holders of the Series 1 FON Stock shall be entitled
to receive, when and if declared by the Board of Directors in
accordance with this Section 5.1, dividends in respect of the
Series 1 FON Stock equivalent on a per share basis to those
payable on the Series 2 FON Stock. Dividends on the Series 1 FON
Stock shall be payable on the same date fixed for the payment of
the corresponding dividend on shares of Series 2 FON Stock and
shall be in an amount per share equal to the full per share
amount of any cash dividend paid on shares of Series 2 FON Stock,
plus the full per share amount (payable in kind) of any non-cash
dividend paid on shares of Series 2 FON Stock, provided that if
this Corporation shall declare and pay any dividend on shares of
Series 2 FON Stock payable in shares of Series 2 FON Stock or
Series 2 PCS Stock, or in options, warrants or rights to acquire
shares of Series 2 FON Stock or Series 2 PCS Stock, or in
securities convertible into or exchangeable for shares of Series
2 FON Stock or Series 2 PCS Stock, then in each case, this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, an equivalent dividend per
share on the Series 1 FON Stock payable in shares of Series 1 FON
Stock or Series 1 PCS Stock, respectively, or equivalent
corresponding options, warrants or rights to acquire shares of
Series 1 FON Stock or Series 1 PCS Stock, respectively, or
equivalent corresponding securities convertible into or
exchangeable for shares of Series 1 FON Stock or Series 1 PCS
Stock, respectively.
5.1.2. The holders of the Series 1 FON Stock shall be entitled
to receive, when and if declared by the Board of Directors in
accordance with this Section 5.1, dividends in respect of the
Series 1 FON Stock equivalent on a per share basis to those
payable on the Series 3 FON Stock. Dividends on the Series 1 FON
Stock shall be payable on the same date fixed for the payment of
the corresponding dividend on shares of Series 3 FON Stock and
shall be in an amount per share equal to the full per share
amount of any cash dividend paid on shares of Series 3 FON Stock,
plus the full per share amount (payable in kind) of any non-cash
dividend paid on shares of Series 3 FON Stock, provided that if
this Corporation shall declare and pay any dividend on shares of
Series 3 FON Stock payable in shares of Series 3 FON Stock or
Series 3 PCS Stock, or in options, warrants or rights to acquire
shares of Series 3 FON Stock or Series 3 PCS Stock, or in
securities convertible into or exchangeable for shares of Series
3 FON Stock or Series 3 PCS Stock, then in each case, this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, an equivalent dividend per
share on the Series 1 FON Stock payable in shares of Series 1 FON
Stock or Series 1 PCS Stock, respectively, or equivalent
corresponding options, warrants or rights to acquire shares of
Series 1 FON Stock or Series 1 PCS Stock, respectively, or
equivalent corresponding securities convertible into or
exchangeable for shares of Series 1 FON Stock or Series 1 PCS
Stock, respectively.
5.1.3. The holders of shares of Series 2 FON Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 2 FON Stock equivalent on a per share basis
to those payable on the Series 1 FON Stock. Dividends on the
Series 2 FON Stock shall be payable on the same date fixed for
the payment of the corresponding dividend on shares of Series 1
FON Stock and shall be in an amount per share equal to the full
per share amount of any cash dividend paid on shares of Series 1
FON Stock, plus the full per share amount (payable in kind) of
any non-cash dividend paid on shares of Series 1 FON Stock,
provided that if this Corporation shall declare and pay any
dividend on shares of Series 1 FON Stock payable in shares of
Series 1 FON Stock or Series 1 PCS Stock, or in options, warrants
or rights to acquire shares of Series 1 FON Stock or Series 1 PCS
Stock, or in securities convertible into or exchangeable for
shares of Series 1 FON Stock or Series 1 PCS Stock, then in each
case, this Corporation shall declare and pay, at the same time
that it declares and pays any such dividend, an equivalent
dividend per share on the Series 2 FON Stock payable in shares of
Series 2 FON Stock or Series 2 PCS Stock, respectively, or
equivalent corresponding options, warrants or rights to acquire
shares of Series 2 FON Stock or Series 2 PCS Stock, respectively,
or equivalent corresponding securities convertible into or
exchangeable for shares of Series 2 FON Stock or Series 2 PCS
Stock, respectively.
5.1.4. The holders of shares of Series 2 FON Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 2 FON Stock equivalent on a per share basis
to those payable on the Series 3 FON Stock. Dividends on the
Series 2 FON Stock shall be payable on the same date fixed for
the payment of the corresponding dividend on shares of Series 3
FON Stock and shall be in an amount per share equal to the full
per share amount of any cash dividend paid on shares of Series 3
FON Stock, plus the full per share amount (payable in kind) of
any non-cash dividend paid on shares of Series 3 FON Stock,
provided that if this Corporation shall declare and pay any
dividend on shares of Series 3 FON Stock payable in shares of
Series 3 FON Stock or Series 3 PCS Stock, or in options, warrants
or rights to acquire shares of Series 3 FON Stock or Series 3 PCS
Stock, or in securities convertible into or exchangeable for
shares of Series 3 FON Stock or Series 3 PCS Stock, then in each
case, this Corporation shall declare and pay, at the same time
that it declares and pays any such dividend, an equivalent
dividend per share on the Series 2 FON Stock payable in shares of
Series 2 FON Stock or Series 2 PCS Stock, respectively or
equivalent corresponding options, warrants or rights to acquire
shares of Series 2 FON Stock or Series 2 PCS Stock, respectively,
or equivalent corresponding securities convertible into or
exchangeable for shares of Series 2 FON Stock or Series 2 PCS
Stock, respectively.
5.1.5. The holders of shares of Series 3 FON Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 3 FON Stock equivalent on a per share basis
to those payable on the Series 1 FON Stock. Dividends on the
Series 3 FON Stock shall be payable on the same date fixed for
the payment of the corresponding dividend on shares of Series 1
FON Stock and shall be in an amount per share equal to the full
per share amount of any cash dividend paid on shares of Series 1
FON Stock, plus the full per share amount (payable in kind) of
any non-cash dividend paid on shares of Series 1 FON Stock,
provided that if this Corporation shall declare and pay any
dividend on shares of Series 1 FON Stock payable in shares of
Series 1 FON Stock or Series 1 PCS Stock, or in options, warrants
or rights to acquire shares of Series 1 FON Stock or Series 1 PCS
Stock, or in securities convertible into or exchangeable for
shares of Series 1 FON Stock or Series 1 PCS Stock, then in each
case, this Corporation shall declare and pay, at the same time
that it declares and pays any such dividend, an equivalent
dividend per share on the Series 3 FON Stock payable in shares of
Series 3 FON Stock or Series 3 PCS stock, respectively, or
equivalent corresponding options, warrants or rights to acquire
shares of Series 3 FON Stock or Series 3 PCS Stock, respectively,
or equivalent corresponding securities convertible into or
exchangeable for shares of Series 3 FON Stock or Series 3 PCS
Stock, respectively.
5.1.6. The holders of shares of Series 3 FON Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 3 FON Stock equivalent on a per share basis
to those payable on the Series 2 FON Stock. Dividends on the
Series 3 FON Stock shall be payable on the same date fixed for
the payment of the corresponding dividend on shares of Series 2
FON Stock and shall be in an amount per share equal to the full
per share amount of any cash dividend paid on shares of Series 2
FON Stock, plus the full per share amount (payable in kind) of
any non-cash dividend paid on shares of Series 2 FON Stock,
provided that if this Corporation shall declare and pay any
dividend on shares of Series 2 FON Stock payable in shares of
Series 2 FON Stock or Series 2 PCS Stock, or in options, warrants
or rights to acquire shares of Series 2 FON Stock or Series 2 PCS
Stock, or in securities convertible into or exchangeable for
shares of Series 2 FON Stock or Series 2 PCS Stock, then in each
case, this Corporation shall declare and pay, at the same time
that it declares and pays any such dividend, an equivalent
dividend per share on the Series 3 FON Stock payable in shares of
Series 3 FON Stock or Series 3 PCS Stock, respectively, or
equivalent corresponding options, warrants or rights to acquire
shares of Series 3 FON Stock or Series 3 PCS Stock, respectively,
or equivalent corresponding securities convertible into or
exchangeable for shares of Series 3 FON Stock or Series 3 PCS
Stock, respectively.
5.1.7. In addition to the entitlement with respect to
dividends contained in Sections 5.1.16 through 5.1.18, the
holders of shares of Class A Common Stock shall be entitled to
receive, when and if declared by the Board of Directors in
accordance with this Section 5.1, dividends in respect of the
Class A Common Stock equivalent on a Per Class A FON Share Basis
to those payable on a per share basis to the Series 1 FON Stock.
Dividends on the Class A Common Stock shall be payable on the
same date fixed for the payment of the corresponding dividend on
shares of Series 1 FON Stock and shall be in an amount, on a Per
Class A FON Share Basis, equal to (i) the full per share amount
of any cash dividend paid on shares of Series 1 FON Stock plus
(ii) the full per share amount (payable in kind) of any non-cash
dividend paid on shares of Series 1 FON Stock, provided that if
this Corporation shall declare and pay any dividend on shares of
Series 1 FON Stock payable in shares of Series 1 FON Stock or
Series 1 PCS Stock, or in options, warrants or rights to acquire
shares of Series 1 FON Stock or Series 1 PCS Stock, or in
securities convertible into or exchangeable for shares of Series
1 FON Stock or Series 1 PCS Stock, then in each case, this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, an equivalent dividend on a
Per Class A FON Share Basis on the Class A Common Stock payable
in shares of Series 3 FON Stock or Series 3 PCS Stock,
respectively, or equivalent corresponding options, warrants or
rights to acquire shares of Series 3 FON Stock or Series 3 PCS
Stock, respectively, or equivalent corresponding securities
convertible into or exchangeable for shares of Series 3 FON Stock
or Series 3 PCS Stock, respectively.
5.1.8. In addition to the entitlement with respect to
dividends contained in Sections 5.1.16 through 5.1.18, the
holders of shares of Class A Common Stock shall be entitled to
receive, when and if declared by the Board of Directors in
accordance with this Section 5.1, dividends in respect of the
Class A Common Stock equivalent on a Per Class A FON Share Basis
to those payable on a per share basis to the Series 2 FON Stock.
Dividends on the Class A Common Stock shall be payable on the
same date fixed for the payment of the corresponding dividend on
shares of Series 2 FON Stock and shall be in an amount, on a Per
Class A FON Share Basis, equal to (i) the full per share amount
of any cash dividend paid on shares of Series 2 FON Stock plus
(ii) the full per share amount (payable in kind) of any non-cash
dividend paid on shares of Series 2 FON Stock, provided that if
this Corporation shall declare and pay any dividend on shares of
Series 2 FON Stock payable in shares of Series 2 FON Stock or
Series 2 PCS Stock, or in options, warrants or rights to acquire
shares of Series 2 FON Stock or Series 2 PCS Stock, or in
securities convertible into or exchangeable for shares of Series
2 FON Stock or Series 2 PCS Stock, then in each case, this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, an equivalent dividend on a
Per Class A FON Share Basis on the Class A Common Stock payable
in shares of Series 3 FON Stock or Series 3 PCS Stock,
respectively, or equivalent corresponding options, warrants or
rights to acquire shares of Series 3 FON Stock or Series 3 PCS
Stock, respectively, or equivalent corresponding securities
convertible into or exchangeable for shares of Series 3 FON Stock
or Series 3 PCS Stock, respectively.
5.1.9. In addition to the entitlement with respect to
dividends contained in Sections 5.1.16 through 5.1.18, the
holders of shares of Class A Common Stock shall be entitled to
receive, when and if declared by the Board of Directors in
accordance with this Section 5.1, dividends in respect of the
Class A Common Stock, on a Per Class A FON Share Basis, equal to
those payable on a per share basis to the Series 3 FON Stock.
Dividends on the Class A Common Stock shall be payable on the
same date fixed for the payment of the corresponding dividend on
shares of Series 3 FON Stock and shall be in an amount, on a Per
Class A FON Share Basis, equal to (i) the full per share amount
of any cash dividend paid on shares of Series 3 FON Stock plus
(ii) the full per share amount (payable in kind) of any non-cash
dividend paid on shares of Series 3 FON Stock, provided that if
this Corporation shall declare and pay any dividend on shares of
Series 3 FON Stock payable in shares of Series 3 FON Stock or
Series 3 PCS Stock, or in options, warrants or rights to acquire
shares of Series 3 FON Stock or Series 3 PCS Stock, or in
securities convertible into or exchangeable for shares of Series
3 FON Stock or Series 3 PCS Stock, then in each case, this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, an equivalent dividend on a
Per Class A FON Share Basis on the Class A Common Stock payable
in shares of Series 3 FON Stock or Series 3 PCS Stock,
respectively, or equivalent corresponding options, warrants or
rights to acquire shares of Series 3 FON Stock or Series 3 PCS
Stock, respectively, or equivalent corresponding securities
convertible into or exchangeable for shares of Series 3 FON Stock
or Series 3 PCS Stock, respectively.
5.1.10. The holders of the Series 1 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 1 PCS Stock equivalent on a per share basis
to those payable on the Series 2 PCS Stock. Dividends on the
Series 1 PCS Stock shall be payable on the same date fixed for
the payment of the corresponding dividend on shares of Series 2
PCS Stock and shall be in an amount per share equal to the full
per share amount of any cash dividend paid on shares of Series 2
PCS Stock, plus the full per share amount (payable in kind) of
any non-cash dividend paid on shares of Series 2 PCS Stock,
provided that if this Corporation shall declare and pay any
dividend on shares of Series 2 PCS Stock payable in shares of
Series 2 PCS Stock, or in options, warrants or rights to acquire
shares of Series 2 PCS Stock, or in securities convertible into
or exchangeable for shares of Series 2 PCS Stock, then in each
case, this Corporation shall declare and pay, at the same time
that it declares and pays any such dividend, an equivalent
dividend per share on the Series 1 PCS Stock payable in shares of
Series 1 PCS Stock, or equivalent corresponding options, warrants
or rights to acquire shares of Series 1 PCS Stock, or equivalent
corresponding securities convertible into or exchangeable for
shares of Series 1 PCS Stock.
5.1.11. The holders of the Series 1 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 1 PCS Stock equivalent on a per share basis
to those payable on the Series 3 PCS Stock. Dividends on the
Series 1 PCS Stock shall be payable on the same date fixed for
the payment of the corresponding dividend on shares of Series 3
PCS Stock and shall be in an amount per share equal to the full
per share amount of any cash dividend paid on shares of Series 3
PCS Stock, plus the full per share amount (payable in kind) of
any non-cash dividend paid on shares of Series 3 PCS Stock,
provided that if this Corporation shall declare and pay any
dividend on shares of Series 3 PCS Stock payable in shares of
Series 3 PCS Stock, or in options, warrants or rights to acquire
shares of Series 3 PCS Stock, or in securities convertible into
or exchangeable for shares of Series 3 PCS Stock, then in each
case, this Corporation shall declare and pay, at the same time
that it declares and pays any such dividend, an equivalent
dividend per share on the Series 1 PCS Stock payable in shares of
Series 1 PCS Stock, or equivalent corresponding options, warrants
or rights to acquire shares of Series 1 PCS Stock, or equivalent
corresponding securities convertible into or exchangeable for
shares of Series 1 PCS Stock.
5.1.12. The holders of shares of Series 2 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 2 PCS Stock equivalent on a per share basis
to those payable on the Series 1 PCS Stock. Dividends on the
Series 2 PCS Stock shall be payable on the same date fixed for
the payment of the corresponding dividend on shares of Series 1
PCS Stock and shall be in an amount per share equal to the full
per share amount of any cash dividend paid on shares of Series 1
PCS Stock, plus the full per share amount (payable in kind) of
any non-cash dividend paid on shares of Series 1 PCS Stock,
provided that if this Corporation shall declare and pay any
dividend on shares of Series 1 PCS Stock payable in shares of
Series 1 PCS Stock, or in options, warrants or rights to acquire
shares of Series 1 PCS Stock, or in securities convertible into
or exchangeable for shares of Series 1 PCS Stock, then in each
case, this Corporation shall declare and pay, at the same time
that it declares and pays any such dividend, an equivalent
dividend per share on the Series 2 PCS Stock payable in shares of
Series 2 PCS Stock, or equivalent corresponding options, warrants
or rights to acquire shares of Series 2 PCS Stock, or equivalent
corresponding securities convertible into or exchangeable for
shares of Series 2 PCS Stock.
5.1.13. The holders of shares of Series 2 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 2 PCS Stock equivalent on a per share basis
to those payable on the Series 3 PCS Stock. Dividends on the
Series 2 PCS Stock shall be payable on the same date fixed for
the payment of the corresponding dividend on shares of Series 3
PCS Stock and shall be in an amount per share equal to the full
per share amount of any cash dividend paid on shares of Series 3
PCS Stock, plus the full per share amount (payable in kind) of
any non-cash dividend paid on shares of Series 3 PCS Stock,
provided that if this Corporation shall declare and pay any
dividend on shares of Series 3 PCS Stock payable in shares of
Series 3 PCS Stock, or in options, warrants or rights to acquire
shares of Series 3 PCS Stock, or in securities convertible into
or exchangeable for shares of Series 3 PCS Stock, then in each
case, this Corporation shall declare and pay, at the same time
that it declares and pays any such dividend, an equivalent
dividend per share on the Series 2 PCS Stock payable in shares of
Series 2 PCS Stock, or equivalent corresponding options, warrants
or rights to acquire shares of Series 2 PCS Stock, or equivalent
corresponding securities convertible into or exchangeable for
shares of Series 2 PCS Stock.
5.1.14. The holders of shares of Series 3 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 3 PCS Stock equivalent on a per share basis
to those payable on the Series 1 PCS Stock. Dividends on the
Series 3 PCS Stock shall be payable on the same date fixed for
the payment of the corresponding dividend on shares of Series 1
PCS Stock and shall be in an amount per share equal to the full
per share amount of any cash dividend paid on shares of Series 1
PCS Stock, plus the full per share amount (payable in kind) of
any non-cash dividend paid on shares of Series 1 PCS Stock,
provided that if this Corporation shall declare and pay any
dividend on shares of Series 1 PCS Stock payable in shares of
Series 1 PCS Stock, or in options, warrants or rights to acquire
shares of Series 1 PCS Stock, or in securities convertible into
or exchangeable for shares of Series 1 PCS Stock, then in each
case, this Corporation shall declare and pay, at the same time
that it declares and pays any such dividend, an equivalent
dividend per share on the Series 3 PCS Stock payable in shares of
Series 3 PCS Stock, or equivalent corresponding options, warrants
or rights to acquire shares of Series 3 PCS Stock, or equivalent
corresponding securities convertible into or exchangeable for
shares of Series 3 PCS Stock.
5.1.15. The holders of shares of Series 3 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 3 PCS Stock equivalent on a per share basis
to those payable on the Series 2 PCS Stock. Dividends on the
Series 3 PCS Stock shall be payable on the same date fixed for
the payment of the corresponding dividend on shares of Series 2
PCS Stock and shall be in an amount per share equal to the full
per share amount of any cash dividend paid on shares of Series 2
PCS Stock, plus the full per share amount (payable in kind) of
any non-cash dividend paid on shares of Series 2 PCS Stock,
provided that if this Corporation shall declare and pay any
dividend on shares of Series 2 PCS Stock payable in shares of
Series 2 PCS Stock, or in options, warrants or rights to acquire
shares of Series 2 PCS Stock, or in securities convertible into
or exchangeable for shares of Series 2 PCS Stock, then in each
case, this Corporation shall declare and pay, at the same time
that it declares and pays any such dividend, an equivalent
dividend per share on the Series 3 PCS Stock payable in shares of
Series 3 PCS Stock, or equivalent corresponding options, warrants
or rights to acquire shares of Series 3 PCS Stock, or equivalent
corresponding securities convertible into or exchangeable for
shares of Series 3 PCS Stock.
5.1.16. In addition to the entitlement with respect to
dividends contained in Sections 5.1.7 through 5.1.9, the holders
of shares of Class A Common Stock shall be entitled to receive,
when and if declared by the Board of Directors in accordance with
this Section 5.1, dividends in respect of the Class A Common
Stock equivalent on a Per Class A PCS Share Basis to those
payable on a per share basis to the Series 1 PCS Stock. Dividends
on the Class A Common Stock shall be payable on the same date
fixed for the payment of the corresponding dividend on shares of
Series 1 PCS Stock and shall be in an amount, on a Per Class A
PCS Share Basis, equal to (i) the full per share amount of any
cash dividend paid on shares of Series 1 PCS Stock plus (ii) the
full per share amount (payable in kind) of any non-cash dividend
paid on shares of Series 1 PCS Stock, provided that if this
Corporation shall declare and pay any dividend on shares of
Series 1 PCS Stock payable in shares of Series 1 PCS Stock, or in
options, warrants or rights to acquire shares of Series 1 PCS
Stock, or in securities convertible into or exchangeable for
shares of Series 1 PCS Stock, then in each case, this Corporation
shall declare and pay, at the same time that it declares and pays
any such dividend, an equivalent dividend on a Per Class A PCS
Share Basis on the Class A Common Stock payable in shares of
Series 3 PCS Stock, or equivalent corresponding options, warrants
or rights to acquire shares of Series 3 PCS Stock, or equivalent
corresponding securities convertible into or exchangeable for
shares of Series 3 PCS Stock.
5.1.17. In addition to the entitlement with respect to
dividends contained in Sections 5.1.7 through 5.1.9, the holders
of shares of Class A Common Stock shall be entitled to receive,
when and if declared by the Board of Directors in accordance with
this Section 5.1, dividends in respect of the Class A Common
Stock equivalent on a Per Class A PCS Share Basis to those
payable on a per share basis to the Series 2 PCS Stock. Dividends
on the Class A Common Stock shall be payable on the same date
fixed for the payment of the corresponding dividend on shares of
Series 2 PCS Stock and shall be in an amount, on a Per Class A
PCS Share Basis, equal to (i) the full per share amount of any
cash dividend paid on shares of Series 2 PCS Stock plus (ii) the
full per share amount (payable in kind) of any non-cash dividend
paid on shares of Series 2 PCS Stock, provided that if this
Corporation shall declare and pay any dividend on shares of
Series 2 PCS Stock payable in shares of Series 2 PCS Stock, or in
options, warrants or rights to acquire shares of Series 2 PCS
Stock, or in securities convertible into or exchangeable for
shares of Series 2 PCS Stock, then in each case, this Corporation
shall declare and pay, at the same time that it declares and pays
any such dividend, an equivalent dividend on a Per Class A PCS
Share Basis on the Class A Common Stock payable in shares of
Series 3 PCS Stock, or equivalent corresponding options, warrants
or rights to acquire shares of Series 3 PCS Stock, or equivalent
corresponding securities convertible into or exchangeable for
shares of Series 3 PCS Stock.
5.1.18. In addition to the entitlement with respect to
dividends contained in Sections 5.1.7 through 5.1.9, the holders
of shares of Class A Common Stock shall be entitled to receive,
when and if declared by the Board of Directors in accordance with
this Section 5.1, dividends in respect of the Class A Common
Stock equivalent on a Per Class A PCS Share Basis to those
payable on a per share basis to the Series 3 PCS Stock. Dividends
on the Class A Common Stock shall be payable on the same date
fixed for the payment of the corresponding dividend on shares of
Series 3 PCS Stock and shall be in an amount, on a Per Class A
PCS Share Basis, equal to (i) the full per share amount of any
cash dividend paid on shares of Series 3 PCS Stock plus (ii) the
full per share amount (payable in kind) of any non-cash dividend
paid on shares of Series 3 PCS Stock, provided that if this
Corporation shall declare and pay any dividend on shares of
Series 3 PCS Stock payable in shares of Series 3 PCS Stock, or in
options, warrants or rights to acquire shares of Series 3 PCS
Stock, or in securities convertible into or exchangeable for
shares of Series 3 PCS Stock, then in each case, this Corporation
shall declare and pay, at the same time that it declares and pays
any such dividend, an equivalent dividend on a Per Class A PCS
Share Basis on the Class A Common Stock payable in shares of
Series 3 PCS Stock, or equivalent corresponding options, warrants
or rights to acquire shares of Series 3 PCS Stock, or equivalent
corresponding securities convertible into or exchangeable for
shares of Series 3 PCS Stock.
5.1.19. The holders of shares of Old Class A Common Stock
shall be entitled to receive, when and if declared by the Board
of Directors in accordance with this Section 5.1, dividends in
respect of the Old Class A Common Stock equivalent, on a Per
Class A FON Share Basis and on a Per Class A PCS Share Basis, to
those payable on the Class A Common Stock-Series DT. Dividends on
the Old Class A Common Stock shall be payable on the same date
fixed for the payment of the corresponding dividend on shares of
Class A Common Stock-Series DT and shall be in an amount, on a
Per Class A FON Share Basis and on a Per Class A PCS Share Basis,
equal to the amount of any cash dividend paid on shares of Class
A Common Stock-Series DT, plus the amount, on a Per Class A FON
Share Basis and on a Per Class A PCS Share Basis, (payable in
kind) of any non-cash dividend paid on shares of Class A Common
Stock-Series DT, provided that if this Corporation shall declare
and pay any dividend on shares of Class A Common Stock-Series DT
payable in shares of FON Stock or PCS Stock, or in options,
warrants or rights to acquire shares of FON Stock or PCS Stock,
or in securities convertible into or exchangeable for shares of
FON Stock or PCS Stock, then in each case, this Corporation shall
declare and pay, at the same time that it declares and pays any
such dividend, an equivalent dividend, on a Per Class A FON Share
Basis and on a Per Class A PCS Share Basis, on the Old Class A
Common Stock payable in shares of FON Stock or PCS Stock,
respectively, or equivalent corresponding options, warrants or
rights to acquire shares of FON Stock or PCS Stock, respectively,
or equivalent corresponding securities convertible into or
exchangeable for shares of FON Stock or PCS Stock, respectively.
5.1.20. The holders of shares of Class A Common Stock-Series
DT shall be entitled to receive, when and if declared by the
Board of Directors in accordance with this Section 5.1, dividends
in respect of the Class A Common Stock-Series DT equivalent, on a
Per Class A FON Share Basis and on a Per Class A PCS Share Basis,
to those payable on the Old Class A Common Stock. Dividends on
the Class A Common Stock-Series DT shall be payable on the same
date fixed for the payment of the corresponding dividend on
shares of Old Class A Common Stock and shall be in an amount, on
a Per Class A FON Share Basis and on a Per Class A PCS Share
Basis, equal to the full amount of any cash dividend paid on
shares of Old Class A Common Stock, plus the full amount, on a
Per Class A FON Share Basis and on a Per Class A PCS Share Basis,
(payable in kind) of any non-cash dividend paid on shares of Old
Class A Common Stock, provided that if this Corporation shall
declare and pay any dividend on shares of Old Class A Common
Stock payable in shares of FON Stock or PCS Stock, or in options,
warrants or rights to acquire shares of FON Stock or PCS Stock,
or in securities convertible into or exchangeable for shares of
FON Stock or PCS Stock, then in each case, this Corporation shall
declare and pay, at the same time that it declares and pays any
such dividend, an equivalent dividend, on a Per Class A FON Share
Basis and on a Per Class A PCS Share Basis, on the Class A Common
Stock-Series DT payable in shares of FON Stock or PCS Stock,
respectively, or equivalent corresponding options, warrants or
rights to acquire shares of FON Stock or PCS Stock, respectively,
or equivalent corresponding securities convertible into or
exchangeable for shares of FON Stock or PCS Stock, respectively.
5.1.21. The holders of shares of Series 1 FON Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 1 FON Stock equivalent on a per share basis
to those payable, on a Per Class A FON Share Basis, on the Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
FON Group only). Dividends on the Series 1 FON Stock shall be
payable on the same date fixed for the payment of the
corresponding dividend on shares of Old Class A Common Stock and
shall be in an amount per share equal to the full amount, on a
Per Class A FON Share Basis, of any cash dividend paid on shares
of Old Class A Common Stock, plus the full amount, on a Per Class
A FON Share Basis, (payable in kind) of any non-cash dividend
paid on shares of Old Class A Common Stock, provided that if this
Corporation shall declare and pay any dividend on shares of Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
FON Group only) payable in shares of FON Stock or PCS Stock, or
in options, warrants or rights to acquire shares of FON Stock or
PCS Stock, or in securities convertible into or exchangeable for
shares of FON Stock or PCS Stock, then in each case this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, a dividend per share on the
Series 1 FON Stock (equivalent to that declared and paid on
shares of Old Class A Common Stock on a Per Class A FON Share
Basis) payable in shares of Series 1 FON Stock or Series 1 PCS
Stock, respectively, or equivalent corresponding options,
warrants or rights to acquire shares of Series 1 FON Stock or
Series 1 PCS Stock, respectively, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
1 FON Stock or Series 1 PCS Stock, respectively.
5.1.22. The holders of shares of Series 2 FON Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 2 FON Stock equivalent on a per share basis
to those payable, on a Per Class A FON Share Basis, on the Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
FON Group only). Dividends on the Series 2 FON Stock shall be
payable on the same date fixed for the payment of the
corresponding dividend on shares of Old Class A Common Stock and
shall be in an amount per share equal to the full amount, on a
Per Class A FON Share Basis, of any cash dividend paid on shares
of Old Class A Common Stock, plus the full amount, on a Per Class
A FON Share Basis, (payable in kind) of any non-cash dividend
paid on shares of Old Class A Common Stock, provided that if this
Corporation shall declare and pay any dividend on shares of Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
FON Group only) payable in shares of FON Stock or PCS Stock, or
in options, warrants or rights to acquire shares of FON Stock or
PCS Stock, or in securities convertible into or exchangeable for
shares of FON Stock or PCS Stock, then in each case this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, a dividend per share on the
Series 2 FON Stock (equivalent to that declared and paid on
shares of Old Class A Common Stock on a Per Class A FON Share
Basis) payable in shares of Series 2 FON Stock or Series 2 PCS
Stock, respectively, or equivalent corresponding options,
warrants or rights to acquire shares of Series 2 FON Stock or
Series 2 PCS Stock, respectively, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
2 FON Stock or Series 2 PCS Stock, respectively.
5.1.23. The holders of shares of Series 3 FON Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 3 FON Stock equivalent on a per share basis
to those payable, on a Per Class A FON Share Basis, on the Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
FON Group only). Dividends on the Series 3 FON Stock shall be
payable on the same date fixed for the payment of the
corresponding dividend on shares of Old Class A Common Stock and
shall be in an amount per share equal to the full amount, on a
Per Class A FON Share Basis, of any cash dividend paid on shares
of Old Class A Common Stock, plus the full amount, on a Per Class
A FON Share Basis, (payable in kind) of any non-cash dividend
paid on shares of Old Class A Common Stock, provided that if this
Corporation shall declare and pay any dividend on shares of Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
FON Group only) payable in shares of FON Stock or PCS Stock, or
in options, warrants or rights to acquire shares of FON Stock or
PCS Stock, or in securities convertible into or exchangeable for
shares of FON Stock or PCS Stock, then in each case this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, a dividend per share on the
Series 3 FON Stock (equivalent to that declared and paid on
shares of Old Class A Common Stock on a Per Class A FON Share
Basis) payable in shares of Series 3 FON Stock or Series 3 PCS
Stock, respectively, or equivalent corresponding options,
warrants or rights to acquire shares of Series 3 FON Stock or
Series 3 PCS Stock, respectively, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
3 FON Stock or Series 3 PCS Stock, respectively.
5.1.24. The holders of shares of Series 1 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 1 PCS Stock equivalent on a per share basis
to those payable, on a Per Class A PCS Share Basis, on the Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group only). Dividends on the Series 1 PCS Stock shall be
payable on the same date fixed for the payment of the
corresponding dividend on shares of Old Class A Common Stock and
shall be in an amount per share equal to the full amount, on a
Per Class A PCS Share Basis, of any cash dividend paid on shares
of Old Class A Common Stock, plus the full amount, on a Per Class
A PCS Share Basis, (payable in kind) of any non-cash dividend
paid on shares of Old Class A Common Stock, provided that if this
Corporation shall declare and pay any dividend on shares of Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group only) payable in shares of PCS Stock, or in options,
warrants or rights to acquire shares of PCS Stock, or in
securities convertible into or exchangeable for shares of PCS
Stock, then in each case this Corporation shall declare and pay,
at the same time that it declares and pays any such dividend, a
dividend per share on the Series 1 PCS Stock (equivalent to that
declared and paid on shares of Old Class A Common Stock on a Per
Class A PCS Share Basis) payable in shares of Series 1 PCS Stock,
or equivalent corresponding options, warrants or rights to
acquire shares of Series 1 PCS Stock, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
1 PCS Stock.
5.1.25. The holders of shares of Series 2 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 2 PCS Stock equivalent on a per share basis
to those payable, on a Per Class A PCS Share Basis, on the Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group only). Dividends on the Series 2 PCS Stock shall be
payable on the same date fixed for the payment of the
corresponding dividend on shares of Old Class A Common Stock and
shall be in an amount per share equal to the full amount, on a
Per Class A PCS Share Basis, of any cash dividend paid on shares
of Old Class A Common Stock, plus the full amount, on a Per Class
A PCS Share Basis, (payable in kind) of any non-cash dividend
paid on shares of Old Class A Common Stock, provided that if this
Corporation shall declare and pay any dividend on shares of Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group only) payable in shares of PCS Stock, or in options,
warrants or rights to acquire shares of PCS Stock, or in
securities convertible into or exchangeable for shares of PCS
Stock, then in each case this Corporation shall declare and pay,
at the same time that it declares and pays any such dividend, a
dividend per share on the Series 2 PCS Stock (equivalent to that
declared and paid on shares of Old Class A Common Stock on a Per
Class A PCS Share Basis) payable in shares of Series 2 PCS Stock,
or equivalent corresponding options, warrants or rights to
acquire shares of Series 2 PCS Stock, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
2 PCS Stock.
5.1.26. The holders of shares of Series 3 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 3 PCS Stock equivalent on a per share basis
to those payable, on a Per Class A PCS Share Basis, on the Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group only). Dividends on the Series 3 PCS Stock shall be
payable on the same date fixed for the payment of the
corresponding dividend on shares of Old Class A Common Stock and
shall be in an amount per share equal to the full amount, on a
Per Class A PCS Share Basis, of any cash dividend paid on shares
of Old Class A Common Stock, plus the full amount, on a Per Class
A PCS Share Basis, (payable in kind) of any non-cash dividend
paid on shares of Old Class A Common Stock, provided that if this
Corporation shall declare and pay any dividend on shares of Old
Class A Common Stock (with respect to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group only) payable in shares of PCS Stock, or in options,
warrants or rights to acquire shares of PCS Stock, or in
securities convertible into or exchangeable for shares of PCS
Stock, then in each case this Corporation shall declare and pay,
at the same time that it declares and pays any such dividend, a
dividend per share on the Series 3 PCS Stock (equivalent to that
declared and paid on shares of Old Class A Common Stock on a Per
Class A PCS Share Basis) payable in shares of Series 3 PCS Stock,
or equivalent corresponding options, warrants or rights to
acquire shares of Series 3 PCS Stock, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
3 PCS Stock.
5.1.27. The holders of shares of Series 1 FON Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 1 FON Stock equivalent on a per share basis
to those payable, on a Per Class A FON Share Basis, on the Class
A Common Stock-Series DT Stock (with respect to the Number Of
Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The FON Group only). Dividends on the Series 1 FON
Stock shall be payable on the same date fixed for the payment of
the corresponding dividend on shares of Class A Common
Stock-Series DT Stock and shall be in an amount per share equal
to the full amount, on a Per Class A FON Share Basis, of any cash
dividend paid on shares of Class A Common Stock-Series DT Stock,
plus the full amount, on a Per Class A FON Share Basis, (payable
in kind) of any non-cash dividend paid on shares of Class A
Common Stock-Series DT Stock, provided that if this Corporation
shall declare and pay any dividend on shares of Class A Common
Stock-Series DT Stock (with respect to the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The FON Group only) payable in shares of FON Stock or PCS Stock,
or in options, warrants or rights to acquire shares of FON Stock
or PCS Stock, or in securities convertible into or exchangeable
for shares of FON Stock or PCS Stock, then in each case this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, a dividend per share on the
Series 1 FON Stock (equivalent to that declared and paid on
shares of Class A Common Stock-Series DT on a Per Class A FON
Share Basis) payable in shares of Series 1 FON Stock or Series 1
PCS Stock, respectively, or equivalent corresponding options,
warrants or rights to acquire shares of Series 1 FON Stock or
Series 1 PCS Stock, respectively, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
1 FON Stock or Series 1 PCS Stock, respectively.
5.1.28. The holders of shares of Series 2 FON Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 2 FON Stock equivalent on a per share basis
to those payable, on a Per Class A FON Share Basis, on the Class
A Common Stock-Series DT Stock (with respect to the Number Of
Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The FON Group only). Dividends on the Series 2 FON
Stock shall be payable on the same date fixed for the payment of
the corresponding dividend on shares of Class A Common
Stock-Series DT Stock and shall be in an amount per share equal
to the full amount, on a Per Class A FON Share Basis, of any cash
dividend paid on shares of Class A Common Stock-Series DT Stock,
plus the full amount, on a Per Class A FON Share Basis, (payable
in kind) of any non-cash dividend paid on shares of Class A
Common Stock-Series DT Stock, provided that if this Corporation
shall declare and pay any dividend on shares of Class A Common
Stock-Series DT Stock (with respect to the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The FON Group only) payable in shares of FON Stock or PCS Stock,
or in options, warrants or rights to acquire shares of FON Stock
or PCS Stock, or in securities convertible into or exchangeable
for shares of FON Stock or PCS Stock, then in each case this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, a dividend per share on the
Series 2 FON Stock (equivalent to that declared and paid on
shares of Class A Common Stock-Series DT on a Per Class A FON
Share Basis) payable in shares of Series 2 FON Stock or Series 2
PCS Stock, respectively, or equivalent corresponding options,
warrants or rights to acquire shares of Series 2 FON Stock or
Series 2 PCS Stock, respectively, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
2 FON Stock or Series 2 PCS Stock, respectively.
5.1.29. The holders of shares of Series 3 FON Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 3 FON Stock equivalent on a per share basis
to those payable, on a Per Class A FON Share Basis, on the Class
A Common Stock-Series DT Stock (with respect to the Number Of
Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The FON Group only). Dividends on the Series 3 FON
Stock shall be payable on the same date fixed for the payment of
the corresponding dividend on shares of Class A Common
Stock-Series DT Stock and shall be in an amount per share equal
to the full amount, on a Per Class A FON Share Basis, of any cash
dividend paid on shares of Class A Common Stock-Series DT Stock,
plus the full amount, on a Per Class A FON Share Basis, (payable
in kind) of any non-cash dividend paid on shares of Class A
Common Stock-Series DT Stock, provided that if this Corporation
shall declare and pay any dividend on shares of Class A Common
Stock-Series DT Stock (with respect to the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The FON Group only) payable in shares of FON Stock or PCS Stock,
or in options, warrants or rights to acquire shares of FON Stock
or PCS Stock, or in securities convertible into or exchangeable
for shares of FON Stock or PCS Stock, then in each case this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, a dividend per share on the
Series 3 FON Stock (equivalent to that declared and paid on
shares of Class A Common Stock-Series DT on a Per Class A FON
Share Basis) payable in shares of Series 3 FON Stock or Series 3
PCS Stock, respectively, or equivalent corresponding options,
warrants or rights to acquire shares of Series 3 FON Stock or
Series 3 PCS Stock, respectively, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
3 FON Stock or Series 3 PCS Stock, respectively.
5.1.30. The holders of shares of Series 1 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 1 PCS Stock equivalent on a per share basis
to those payable, on a Per Class A PCS Share Basis, on the Class
A Common Stock-Series DT (with respect to the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The PCS Group only). Dividends on the Series 1 PCS Stock shall be
payable on the same date fixed for the payment of the
corresponding dividend on shares of Class A Common Stock-Series
DT and shall be in an amount per share equal to the full amount,
on a Per Class A PCS Share Basis, of any cash dividend paid on
shares of Class A Common Stock-Series DT, plus the full amount,
on a Per Class A PCS Share Basis, (payable in kind) of any non-
cash dividend paid on shares of Class A Common Stock-Series DT,
provided that if this Corporation shall declare and pay any
dividend on shares of Class A Common Stock-Series DT (with
respect to the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The PCS Group only) payable
in shares of PCS Stock, or in options, warrants or rights to
acquire shares of FON Stock or PCS Stock, or in securities
convertible into or exchangeable for shares of PCS Stock, then in
each case this Corporation shall declare and pay, at the same
time that it declares and pays any such dividend, a dividend per
share on the Series 1 PCS Stock (equivalent to that declared and
paid on shares of Class A Common Stock-Series DT on a Per Class A
PCS Share Basis) payable in shares of Series 1 PCS Stock, or
equivalent corresponding options, warrants or rights to acquire
shares of Series 1 PCS Stock, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
1 PCS Stock.
5.1.31. The holders of shares of Series 2 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 2 PCS Stock equivalent on a per share basis
to those payable, on a Per Class A PCS Share Basis, on the Class
A Common Stock-Series DT (with respect to the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The PCS Group only). Dividends on the Series 2 PCS Stock shall be
payable on the same date fixed for the payment of the
corresponding dividend on shares of Class A Common Stock-Series
DT and shall be in an amount per share equal to the full amount,
on a Per Class A PCS Share Basis, of any cash dividend paid on
shares of Class A Common Stock-Series DT, plus the full amount,
on a Per Class A PCS Share Basis, (payable in kind) of any non-
cash dividend paid on shares of Class A Common Stock-Series DT,
provided that if this Corporation shall declare and pay any
dividend on shares of Class A Common Stock-Series DT (with
respect to the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The PCS Group only) payable
in shares of PCS Stock, or in options, warrants or rights to
acquire shares of PCS Stock, or in securities convertible into or
exchangeable for shares of PCS Stock, then in each case this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, a dividend per share on the
Series 2 PCS Stock (equivalent to that declared and paid on
shares of Class A Common Stock-Series DT on a Per Class A PCS
Share Basis) payable in shares of Series 2 PCS Stock, or
equivalent corresponding options, warrants or rights to acquire
shares of Series 2 PCS Stock, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
2 PCS Stock.
5.1.32. The holders of shares of Series 3 PCS Stock shall be
entitled to receive, when and if declared by the Board of
Directors in accordance with this Section 5.1, dividends in
respect of the Series 3 PCS Stock equivalent on a per share basis
to those payable, on a Per Class A PCS Share Basis, on the Class
A Common Stock-Series DT (with respect to the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The PCS Group only). Dividends on the Series 3 PCS Stock shall be
payable on the same date fixed for the payment of the
corresponding dividend on shares of Class A Common Stock-Series
DT and shall be in an amount per share equal to the full amount,
on a Per Class A PCS Share Basis, of any cash dividend paid on
shares of Class A Common Stock-Series DT, plus the full amount,
on a Per Class A PCS Share Basis, (payable in kind) of any non-
cash dividend paid on shares of Class A Common Stock-Series DT,
provided that if this Corporation shall declare and pay any
dividend on shares of Class A Common Stock-Series DT (with
respect to the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The PCS Group only) payable
in shares of PCS Stock, or in options, warrants or rights to
acquire shares of PCS Stock, or in securities convertible into or
exchangeable for shares of PCS Stock, then in each case this
Corporation shall declare and pay, at the same time that it
declares and pays any such dividend, a dividend per share on the
Series 3 PCS Stock (equivalent to that declared and paid on
shares of Class A Common Stock-Series DT on a Per Class A PCS
Share Basis) payable in shares of Series 3 PCS Stock, or
equivalent corresponding options, warrants or rights to acquire
shares of Series 3 PCS Stock, or equivalent corresponding
securities convertible into or exchangeable for shares of Series
3 PCS Stock.
5.2. Separate Declaration of Dividends. The Board of
Directors, in accordance with the applicable provisions of
Section 5.1, may at any time declare and pay dividends (i)
exclusively on the FON Stock and the Class A Common Stock (on a
Per Class A FON Share Basis), (ii) exclusively on the PCS Stock
and the Class A Common Stock (on a Per Class A PCS Share Basis)
or (iii) on the FON Stock and the Class A Common Stock (on a Per
Class A FON Share Basis), on the one hand, and the PCS Stock and
the Class A Common Stock (on a Per Class A PCS Share Basis), on
the other, in equal or unequal per share amounts, notwithstanding
the amount of dividends previously declared on each class or
series of stock, the respective voting or liquidation rights of
each class or series of stock or any other factor.
5.3 Share Distributions. Subject to ARTICLE SIXTH, Section 5
and except as permitted by ARTICLE SIXTH, Sections 7.1 and 7.2,
the Board of Directors may declare and pay dividends or
distributions of shares of Corporation Common Stock (or
Convertible Securities convertible into or exchangeable or
exercisable for shares of Corporation Common Stock) on shares of
Corporation Common Stock or shares of Preferred Stock only as
follows:
(A) dividends or distributions of shares of (i) Series 1 FON
Stock (or Convertible Securities convertible into or exchangeable
or exercisable for shares of Series 1 FON Stock), (ii) Series 2
FON Stock (or Convertible Securities convertible into or
exchangeable or exercisable for Shares of Series 2 FON Stock) and
(iii) Series 3 FON Stock (or Convertible Securities convertible
into or exchangeable or exercisable for shares of Series 3 FON
Stock) on shares of (i) Series 1 FON Stock, (ii) Series 2 FON
Stock and (iii) Series 3 FON Stock and shares of Class A Common
Stock (but only in respect of the Shares Issuable With Respect To
The Class A Equity Interest In The FON Group), respectively, as
well as on Preferred Stock attributed to the Sprint FON Group
exclusively in accordance with ARTICLE SIXTH, Section 13;
(B) dividends or distributions of shares of (i) Series 1 PCS
Stock (or Convertible Securities convertible into or exchangeable
or exercisable for shares of Series 1 PCS Stock), (ii) Series 2
PCS Stock (or Convertible Securities convertible into or
exchangeable or exercisable for shares of Series 2 PCS Stock) and
(iii) Series 3 PCS Stock (or Convertible Securities convertible
into or exchangeable or exercisable for shares of Series 3 PCS
Stock) on shares of (i) Series 1 PCS Stock, (ii) Series 2 PCS
Stock and (iii) Series 3 PCS Stock and shares of Class A Common
Stock (but only in respect of the Shares Issuable With Respect To
The Class A Equity Interest In The PCS Group), respectively, and
Preferred Stock attributed to the PCS Group exclusively in
accordance with ARTICLE SIXTH, Section 13;
(C) dividends or distributions of shares of (i) Series 1 PCS
Stock (or Convertible Securities convertible into or exchangeable
or exercisable for shares of Series 1 PCS Stock), (ii) Series 2
PCS Stock (or Convertible Securities convertible into or
exchangeable or exercisable for shares of Series 2 PCS Stock) and
(iii) Series 3 PCS Stock (or Convertible Securities convertible
into or exchangeable or exercisable for shares of Series 3 PCS
Stock) on (x) shares of (i) Series 1 FON Stock, (ii) Series 2 FON
Stock and (iii) Series 3 FON Stock and shares of Class A Common
Stock (but only in respect of the Shares Issuable With Respect To
The Class A Equity Interest In The FON Group), respectively, or
(y) shares of FON Preferred Stock, but in any such case only if
immediately prior to such dividend or distribution the Number Of
Shares Issuable With Respect To The FON Group Intergroup Interest
is greater than or equal to the sum of (1) the amount of any
decrease in the Number Of Shares Issuable With Respect To The FON
Group Intergroup Interest required by paragraph (B) of the
definition of such term in ARTICLE SIXTH, Section 10 as a result
of such dividend or distribution, plus (2) the number of shares
of PCS Stock issuable upon conversion, exchange or exercise of
any Convertible Securities to be so issued or any other
outstanding Convertible Securities that have been issued as a
dividend or other distribution (including in connection with any
reclassification or exchange of shares) to holders of FON Stock
or Class A Common Stock (but only in respect of the Shares
Issuable With Respect To The Class A Equity Interest In The FON
Group) or shares of Preferred Stock to the extent attributed to
the Sprint FON Group in accordance with ARTICLE SIXTH, Section
13; and
(D) dividends or distributions of shares of PCS Preferred
Stock (or Convertible Securities convertible into or exchangeable
or exercisable for shares of PCS Preferred Stock) on shares of
FON Stock or Class A Common Stock (but only in respect of the
Shares Issuable With Respect To The Class A Equity Interest In
The FON Group) or shares of Preferred Stock to the extent
attributed to the Sprint FON Group in accordance with ARTICLE
SIXTH, Section 13, but in any such case only if immediately prior
to such dividend or distribution the Number Of Shares Issuable
With Respect To The FON Group Intergroup Interest is greater than
or equal to the sum of (1) the amount of any decrease in the
Number Of Shares Issuable With Respect To The FON Group
Intergroup Interest required by paragraph (B) of the definition
of such term in ARTICLE SIXTH, Section 10 as a result of such
dividend or distribution plus (2) the number of shares of PCS
Stock issuable upon conversion, exchange or exercise of any
Convertible Securities that have been issued as a dividend or
other distribution (including in connection with any
reclassification or exchange of shares) to holders of FON Stock
or Class A Common Stock (but only in respect of the Shares
Issuable With Respect To The Class A Equity Interest In The FON
Group) or shares of Preferred Stock to the extent attributed to
the Sprint FON Group in accordance with ARTICLE SIXTH, Section
13.
For purposes of this Section 5.3, any outstanding Convertible
Securities that are convertible into or exchangeable or
exercisable for any other Convertible Securities which are
themselves convertible into or exchangeable or exercisable for
FON Stock (or other Convertible Securities that are so
convertible, exchangeable or exercisable) or PCS Stock (or
other Convertible Securities that are so convertible,
exchangeable or exercisable) shall be deemed to have been
converted, exchanged or exercised in full for such Convertible
Securities.
Section 6. No Dilution or Impairment; Certain Tender Offers.
(a) No reclassification, subdivision or combination of the
outstanding shares of Series 2 FON Stock shall be effected
directly or indirectly (including, without limitation, any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 1 FON Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 1 FON
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 2 FON Stock as were
represented by the shares of Series 1 FON Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 1 FON Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 2 FON Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(b) No reclassification, subdivision or combination of the
outstanding shares of Series 3 FON Stock shall be effected
directly or indirectly (including, without limitation, any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 1 FON Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 1 FON
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 3 FON Stock as were
represented by the shares of Series 1 FON Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 1 FON Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 3 FON Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(c) No reclassification, subdivision or combination of the
outstanding shares of Series 1 FON Stock shall be effected
directly or indirectly (including without limitation any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 2 FON Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 2 FON
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 1 FON Stock as were
represented by the shares of Series 2 FON Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 2 FON Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 1 FON Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(d) No reclassification, subdivision or combination of the
outstanding shares of Series 3 FON Stock shall be effected
directly or indirectly (including without limitation any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 2 FON Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 2 FON
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 3 FON Stock as were
represented by the shares of Series 2 FON Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 2 FON Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 3 FON Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(e) No reclassification, subdivision or combination of the
outstanding shares of Series 1 FON Stock shall be effected
directly or indirectly (including without limitation any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 3 FON Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 3 FON
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 1 FON Stock as were
represented by the shares of Series 3 FON Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 3 FON Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 1 FON Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(f) No reclassification, subdivision or combination of the
outstanding shares of Series 2 FON Stock shall be effected
directly or indirectly (including without limitation any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 3 FON Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 3 FON
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 2 FON Stock as were
represented by the shares of Series 3 FON Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 3 FON Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 2 FON Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(g) No adjustment to the Number Of Shares Issuable With
Respect To The Class A-Series DT Equity Interest In The FON Group
or the Number Of Shares Issuable With Respect To The Class
A-Series DT Equity Interest In The PCS Group (other than with
respect to any adjustments resulting from issuances made in
accordance with ARTICLE SIXTH, Section 1.2) shall be effected
directly or indirectly unless at the same time the Number Of
Shares Issuable With Respect To The Old Class A Equity Interest
In The FON Group or the Number Of Shares Issuable With Respect To
The Old Class A Equity Interest In The PCS Group is adjusted on
an equal Per Class A FON Share Basis or Per Class A PCS Share
Basis, as the case may be, so that the holders of the Old Class A
Common Stock (i) are entitled, in the aggregate, to a number of
Votes representing the same percentage of the Voting Power of
this Corporation relative to the Class A Common Stock-Series DT
on an equal Per Class A FON Share Basis or Per Class A PCS Share
Basis, as the case may be, as were represented by the Number Of
Shares Issuable With Respect To The Old Class A Equity Interest
In The FON Group or the Number Of Shares Issuable With Respect To
The Old Class A Equity Interest In The PCS Group as calculated
immediately prior to such adjustment and (ii) maintain all of the
rights associated with the Old Class A Common Stock set forth in
these Articles of Incorporation, including without limitation the
right to receive dividends and other distributions (including
liquidating and other distributions) that are equivalent, on a
Per Class A FON Share Basis or Per Class A PCS Share Basis, to
those payable in respect of shares of Class A Common Stock-Series
DT, subject to the limitations, restrictions and conditions on
such rights contained herein.
(h) No adjustment to the Number Of Shares Issuable With
Respect To The Old Class A Equity Interest In The FON Group or
the Number Of Shares Issuable With Respect To The Old Class A
Equity Interest In The PCS Group (other than with respect to any
adjustments resulting from issuances made in accordance with
ARTICLE SIXTH, Section 1.2) shall be effected directly or
indirectly unless at the same time the Number Of Shares Issuable
With Respect To The Class A-Series DT Equity Interest In The FON
Group or the Number Of Shares Issuable With Respect To The Class
A-Series DT Equity Interest In The PCS Group is adjusted on an
equal Per Class A FON Share Basis or Per Class A PCS Share Basis,
as the case may be, so that the holders of the Class A Common
Stock-Series DT (i) are entitled, in the aggregate, to a number
of Votes representing the same percentage of the Voting Power of
this Corporation relative to the Old Class A Common Stock on an
equal Per Class A FON Share Basis or Per Class A PCS Share Basis,
as the case may be, as were represented by the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The FON Group or the Number Of Shares Issuable With Respect To
The Class A-Series DT Equity Interest In The PCS Group as
calculated immediately prior to such adjustment and (ii) maintain
all of the rights associated with the Class A-Series DT Common
Stock set forth in these Articles of Incorporation, including
without limitation the right to receive dividends and other
distributions (including liquidating and other distributions)
that are equivalent, on a Per Class A FON Share Basis or Per
Class A PCS Share Basis, to those payable in respect of shares of
Old Class A Common Stock, subject to the limitations,
restrictions and conditions on such rights contained herein.
(i) No reclassification, subdivision or combination of the
outstanding shares of Series 2 PCS Stock shall be effected
directly or indirectly (including, without limitation, any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 1 PCS Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 1 PCS
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 2 PCS Stock as were
represented by the shares of Series 1 PCS Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 1 PCS Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 2 PCS Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(j) No reclassification, subdivision or combination of the
outstanding shares of Series 3 PCS Stock shall be effected
directly or indirectly (including, without limitation, any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 1 PCS Stock is reclassified, subdivided or combined on
a equal per share basis so that the holders of the Series 1 PCS
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 3 PCS Stock as were
represented by the shares of Series 1 PCS Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 1 PCS Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 3 PCS Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(k) No reclassification, subdivision or combination of the
outstanding shares of Series 1 PCS Stock shall be effected
directly or indirectly (including, without limitation, any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 2 PCS Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 2 PCS
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 1 PCS Stock as were
represented by the shares of Series 2 PCS Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 2 PCS Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 1 PCS Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(l) No reclassification, subdivision or combination of the
outstanding shares of Series 3 PCS Stock shall be effected
directly or indirectly (including, without limitation, any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 2 PCS Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 2 PCS
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 3 PCS Stock as were
represented by the shares of Series 2 PCS Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 2 PCS Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 3 PCS Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(m) No reclassification, subdivision or combination of the
outstanding shares of Series 1 PCS Stock shall be effected
directly or indirectly (including, without limitation, any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 3 PCS Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 3 PCS
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 1 PCS Stock as were
represented by the shares of Series 3 PCS Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 3 PCS Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 1 PCS Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(n) No reclassification, subdivision or combination of the
outstanding shares of Series 2 PCS Stock shall be effected
directly or indirectly (including, without limitation, any
reclassification, subdivision or combination effected pursuant to
a consolidation, merger or liquidation) unless at the same time
the Series 3 PCS Stock is reclassified, subdivided or combined on
an equal per share basis so that the holders of the Series 3 PCS
Stock (i) are entitled, in the aggregate, to a number of Votes
representing the same percentage of the Voting Power of this
Corporation relative to the Series 2 PCS Stock as were
represented by the shares of Series 3 PCS Stock outstanding
immediately prior to such reclassification, subdivision or
combination and (ii) maintain all of the rights associated with
the Series 3 PCS Stock set forth in these Articles of
Incorporation, including without limitation the right to receive
dividends and other distributions (including liquidating and
other distributions) that are equivalent to those payable per
share in respect of shares of Series 2 PCS Stock, subject to the
limitations, restrictions and conditions on such rights contained
herein.
(o) Without limiting the generality of the foregoing
paragraphs (a) through (n), in the case of any consolidation or
merger of this Corporation with or into any other entity (other
than a merger which does not result in any reclassification,
conversion, exchange or cancellation of the Non-Class A Common
Stock) or any reclassification of the Non-Class A Common Stock
into any other form of capital stock of this Corporation, whether
in whole or in part, each Class A Holder shall, after such
consolidation, merger or reclassification, have the right (but
not the obligation), by notice delivered to this Corporation or
any successor thereto within 90 days after the consummation of
such consolidation, merger or reclassification, to convert each
share of Series 3 FON Stock, Series 3 PCS Stock and 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 upon such consolidation,
merger, or reclassification if such Class A Holder had (I)
converted its shares of Series 3 FON Stock or Series 3 PCS Stock
into Series 1 FON Stock or Series 1 PCS Stock, respectively, or
(II) received shares of Series 3 FON Stock or Series 3 PCS Stock
in respect of the Shares Issuable With Respect To The Class A
Equity Interest In The FON Group or the Shares Issuable With
Respect To The Class A Equity Interest In The PCS Group,
respectively, represented by such Class A Common Stock
immediately prior to such merger, consolidation or
reclassification and converted such shares in accordance with
clause (I). This Corporation shall not effect, directly or
indirectly, any such reclassification, subdivision or combination
of outstanding shares of Non-Class A Common Stock unless it
delivers to the Class A Holders written notice of its intent to
take such action at least ten Business Days before taking such
action.
(p) Without limiting the generality of the foregoing, in the
case of any consolidation or merger of this Corporation with or
into any other entity (other than a merger which does not result
in any reclassification, conversion, exchange or cancellation of
the Series 1 FON Stock or Series 1 PCS Stock) or any
reclassification of the Series 1 FON Stock or Series 1 PCS Stock
into any other form of capital stock of this Corporation, whether
in whole or in part, each holder of Series 2 FON Stock or Series
2 PCS Stock, as the case may be, shall, after such consolidation,
merger or reclassification, have the right (but not the
obligation), by notice delivered to this Corporation or any
successor thereto within 90 days after the consummation of such
consolidation, merger or reclassification, to convert each share
of Series 2 FON Stock or Series 2 PCS Stock, as the case may be,
held by such holder into the kind and amount of shares of stock
and other securities and property which such holder would have
been entitled to receive upon such consolidation, merger, or
reclassification if such holder had converted its shares of
Series 2 FON Stock or Series 2 PCS Stock into Series 1 FON Stock
or Series 1 PCS Stock, respectively, immediately prior to such
merger, consolidation or reclassification. This Corporation shall
not effect, directly or indirectly, any such reclassification,
subdivision or combination of outstanding shares of Series 1 FON
Stock or Series 1 PCS Stock unless it delivers to the holders of
Series 2 FON Stock and Series 2 PCS Stock written notice of its
intent to take such action at least ten Business Days before
taking such action.
(q) Exclusionary Tender Offers. If the Board of Directors
shall determine not to oppose a tender offer by a Person other
than a Cable Holder for Voting Securities of this Corporation
representing not less than 35 percent of the Voting Power of this
Corporation, and the terms of such tender offer do not permit the
holders of Series 2 PCS Stock to sell an equal or greater
percentage of their shares as the holders of Series 1 PCS Stock
are permitted to sell taking into account any proration, then
each holder of Series 2 PCS Stock shall have the right (but not
the obligation) to deliver to this Corporation a written notice
requesting conversion of certain shares of Series 2 PCS Stock
designated by such holder of Series 2 PCS Stock into Series 1 PCS
Stock, upon which delivery each share of Series 2 PCS Stock so
designated in such notice shall automatically convert (without
the payment of any consideration) into one duly issued, fully
paid and nonassessable share of Series 1 PCS Stock, provided that
(i) unless the Series 2 PCS Stock shall have otherwise been
converted into Series 1 PCS Stock pursuant to ARTICLE SIXTH,
Section 7.5 upon or prior to the consummation or abandonment of
the transaction contemplated by such tender offer, immediately
following the consummation of such transaction or the delivery by
this Corporation to each holder of Series 2 PCS Stock of a notice
that such transaction has been abandoned, each share of Series 1
PCS Stock held by a holder of Series 2 PCS Stock shall
automatically reconvert (without the payment of any
consideration) into one duly issued, fully paid and nonassessable
share of Series 2 PCS Stock, and (ii) only those shares of Series
2 PCS Stock related to shares of Series 1 PCS Stock that were not
so reconverted shall be deemed for any purpose under these
Articles of Incorporation to have been converted into Series 1
PCS Stock, pursuant to this subparagraph (q) and the Series 2 PCS
Stock so reconverted shall be deemed to have been at all times
outstanding shares of Series 2 PCS Stock, provided, that if the
Series 2 PCS Stock has been converted into or redeemed for Series
2 FON Stock pursuant to ARTICLE SIXTH, Section 7, then the terms
"Series 2 FON Stock" and "Series 1 FON Stock" shall be deemed to
replace the terms "Series 2 PCS Stock" and "Series 1 PCS Stock,"
respectively, in this subparagraph (q).
(r) Issuer Tender Offers. The Corporation shall not conduct
an issuer tender offer (as defined on the Effective Date in Rule
13e-4 under the Exchange Act) with respect to the Series 1 PCS
Stock or the Series 1 FON Stock unless (i) such tender offer
provides for the participation of the holders of Series 2 PCS
Stock, Series 3 PCS Stock and Class A Common Stock (with respect
to the Shares Issuable With Respect To The Class A Equity
Interest In The PCS Group), on the one hand, or Series 2 FON
Stock, Series 3 FON Stock and Class A Common Stock (with respect
to the Shares Issuable With Respect To The Class A Equity
Interest In The FON Group), on the other hand, on an equal basis
with the Series 1 PCS Stock or the Series 1 FON Stock,
respectively, and (ii) the Corporation accepts for repurchase the
number of shares tendered by the holders of Series 1 PCS Stock,
Series 2 PCS Stock, Series 3 PCS Stock and Class A Common Stock
(with respect to the Shares Issuable With Respect To The Class A
Equity Interest In The PCS Group), on the one hand, or Series 1
FON Stock, Series 2 FON Stock, Series 3 FON Stock and Class A
Common Stock (with respect to the Shares Issuable With Respect To
The Class A Equity Interest In The FON Group), on the other, in
proportion to the number of shares of each such class and series
tendered; provided that the terms of this subparagraph (r) shall
not prevent the Corporation from administering in good faith an
"odd-lot" program in connection with such issuer tender offer and
shall not apply to customary acquisitions of Corporation Common
Stock made by the Corporation on the open market for purposes of
maintaining stock option plans of the Corporation.
Section 7. Conversion or Redemption of PCS Stock. Except
as otherwise provided in Sections 2.2, 6(q) and 8.5, shares of
PCS Stock are (i) subject to conversion or redemption, as the
case may be, upon the terms provided in this Section 7 with
respect to each class and (ii) otherwise not subject to
conversion or redemption.
7.1. Conversion or Redemption of PCS Stock.
(A) If the Corporation and/or its subsidiaries makes a
Disposition, in one transaction or a series of related
transactions, of all or substantially all of the properties and
assets attributed to the PCS Group to one or more persons or
entities (other than (w) the Disposition by the Corporation of
all or substantially all of its properties and assets in one
transaction or a series of related transactions in connection
with the dissolution or the liquidation and winding up of the
Corporation and the distribution of assets to stockholders
pursuant to Section 4, (x) the redemption of the PCS Stock for
the stock of the PCS Group Subsidiary pursuant to Section 7.2,
(y) to any person or entity controlled (as determined by the
Board of Directors) by the Corporation or (z) pursuant to a
Related Business Transaction), then the Corporation shall, on or
prior to the 85th Trading Day after the date of consummation of
such Disposition (the "PCS Group Disposition Date"), either (I)
pay a dividend on the PCS Stock or (II) redeem some or all of the
PCS Stock or convert PCS Stock into Series 1 FON Stock, Series 2
FON Stock and Series 3 FON Stock, as applicable (or another class
or series of common stock of the Corporation), in accordance with
the following subparagraphs (1) and (2) of this paragraph (A)
and, to the extent applicable, in accordance with Section 7.4, as
the Board of Directors shall have selected among such
alternatives:
(1) provided that there are funds of the Corporation legally
available therefor:
(a) pay to the holders of the shares of PCS Stock a
dividend, as the Board of Directors shall have declared in
accordance with Section 5.1 of ARTICLE SIXTH, in cash and/or in
securities (other than a dividend of Corporation Common Stock or
other common equity securities of the Corporation) or other
property having a Fair Value as of the PCS Group Disposition Date
in the aggregate equal to the product of the Outstanding PCS
Fraction as of the record date for determining holders entitled
to receive such dividend multiplied by the Fair Value of the Net
Proceeds of such Disposition; or
(b) (i) subject to the last sentence of this paragraph (A),
if such Disposition involves all (not merely substantially all)
of the properties and assets attributed to the PCS Group, redeem
as of the Redemption Date provided by Section 7.4(C) all
outstanding shares of PCS Stock in exchange for cash and/or
securities (other than Corporation Common Stock or other common
equity securities of the Corporation) or other property having a
Fair Value as of the PCS Group Disposition Date in the aggregate
equal to the product of the Outstanding PCS Fraction as of such
Redemption Date multiplied by the Fair Value of the Net Proceeds
of such Disposition (such aggregate amount to be allocated to
shares of Series 1 PCS Stock, Series 2 PCS Stock and Series 3 PCS
Stock in the ratio of the number of shares of each such series
outstanding to the other series (so that the amount of
consideration paid for the redemption of each share of Series 1
PCS Stock, Series 2 PCS Stock and Series 3 PCS Stock is the
same)); or
(ii) subject to the last sentence of this paragraph (A), if
such Disposition involves substantially all (but not all) of the
properties and assets attributed to the PCS Group, redeem as of
the Redemption Date provided by Section 7.4(D) the number of
whole shares of PCS Stock (which may be all of such shares
outstanding) as have in the aggregate an average Market Value
during the period of ten consecutive Trading Days beginning on
the sixteenth Trading Day immediately succeeding the PCS Group
Disposition Date closest to the product of the Outstanding PCS
Fraction as of the date such shares are selected for redemption
multiplied by the Fair Value as of the PCS Group Disposition Date
of the Net Proceeds of such Disposition, in exchange for cash
and/or securities (other than Corporation Common Stock or other
common equity securities of the Corporation) or other property
having a Fair Value in the aggregate equal to such product (such
aggregate amount to be allocated to shares of Series 1 PCS Stock,
Series 2 PCS Stock and Series 3 PCS Stock in the ratio of the
number of shares of each such series outstanding to the other
series (so that the amount of consideration paid for the
redemption of each share of Series 1 PCS Stock, Series 2 PCS
Stock and Series 3 PCS Stock is the same)); or
(2) convert each outstanding share of Series 1 PCS Stock,
Series 2 PCS Stock and Series 3 PCS Stock as of the Conversion
Date provided by Section 7.4(E) into a number of fully paid and
nonassessable shares of Series 1 FON Stock, Series 2 FON Stock
and Series 3 FON Stock, respectively (or, if the Series 1 FON
Stock is not Publicly Traded at such time and shares of another
class or series of common stock of the Corporation (other than
PCS Stock) are then Publicly Traded, of such other class or
series of common stock as has the largest Total Market
Capitalization as of the close of business on the Trading Day
immediately preceding the date of the notice of such conversion
required by Section 7.4(E)) equal to 110% of the ratio, expressed
as a decimal fraction rounded to the nearest five decimal places,
of the average Market Value of one share of Series 1 PCS Stock
over the period of ten consecutive Trading Days beginning on the
sixteenth Trading Day following the PCS Group Disposition Date to
the average Market Value of one share of Series 1 FON Stock (or
such other class or series of common stock) over the same ten
Trading Day period.
Notwithstanding the foregoing provisions of this paragraph
(A), the Corporation may redeem PCS Stock as provided by
subparagraph (1)(b)(i) or (1)(b)(ii) of this paragraph (A) only
if the amount to be paid in redemption of such stock (and the
Shares Issuable With Respect To The Class A Equity Interest In
The PCS Group in accordance with ARTICLE SIXTH, Section 7.1(B))
is less than or equal to the sum of (i) the amount available for
the payment of dividends on such shares to be redeemed in
accordance with Section 5 of ARTICLE SIXTH measured as of the
Redemption Date and (ii) the amount determined to be capital in
respect of the shares to be redeemed in accordance with
applicable corporation law as of the Redemption Date.
(B) For purposes of this Section 7.1:
(1) as of any date, "substantially all of the properties and
assets" attributed to the PCS Group means a portion of such
properties and assets that represents at least 80% of the Fair
Value of the properties and assets attributed to the PCS Group as
of such date;
(2) in the case of a Disposition of the properties and assets
attributed to the PCS Group in a series of related transactions,
such Disposition shall not be deemed to have been consummated
until the consummation of the last of such transactions;
(3) the Board of Directors may pay any dividend or redemption
price referred to in Section 7.1(A) in cash, securities (other
than Corporation Common Stock or other common equity securities
of the Corporation) or other property, regardless of the form or
nature of the proceeds of the Disposition; provided that if such
payment is made in Voting Securities (other than Corporation
Common Stock or other common equity securities of the
Corporation) of the Corporation or another entity, holders of
Series 2 PCS Stock shall receive Voting Securities with Voting
Power equivalent on a per share basis to such shares received by
holders of Series 1 PCS Stock;
(4) if the Corporation pays a dividend to the holders of
shares of PCS Stock in accordance with Section 7.1(A)(1)(a), then
the Corporation will pay a dividend equivalent on a Per Class A
PCS Share Basis to the holders of Class A Common Stock;
(5) if the Corporation redeems all outstanding shares of PCS
Stock in accordance with Section 7.1(A)(1)(b)(i), then the
Corporation will pay an aggregate amount to the holders of Old
Class A Common Stock and Class A Common Stock-Series DT
equivalent on a Per Class A PCS Share Basis to the per share
redemption amount paid in accordance with Section 7.1(A)(1)(b)(i)
in respect of the total Number Of Shares Issuable With Respect To
The Old Class A Equity Interest In The PCS Group and the Number
Of Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group, respectively;
(6) if the Corporation redeems shares of PCS Stock in
accordance with Section 7.1(A)(1)(b)(ii), then the Corporation
will pay to the holders of Old Class A Common Stock and Class A
Common Stock-Series DT an amount in accordance with subparagraph
(5) immediately above but only in respect of the same proportion
of the Number Of Shares Issuable With Respect To The Old Class A
Equity Interest In The PCS Group and the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The PCS Group, respectively, as the PCS Stock redeemed in
accordance with Section 7.1(A)(7)(b)(ii); and
(7) if the Corporation converts shares of PCS Stock in
accordance with Section 7.1(A)(2), then (i) the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group will convert into a Number Of Shares Issuable With
Respect To The Old Class A Equity Interest In The FON Group and
(ii) the Number Of Shares Issuable With Respect To The Class
A-Series DT Equity Interest In The PCS Group will convert into a
Number Of Shares Issuable With Respect To The Class A-Series DT
Equity Interest in the FON Group, each such conversion to be on
the same basis as set forth in Section 7.1(A)(2).
(C) If the payment of the dividend or the redemption price
with respect to the PCS Stock provided for by Section 7.1(A)(1)
occurs prior to the third anniversary of the Restructuring
Closing Date, then the Board of Directors may convert each share
of Series 1 PCS Stock, Series 2 PCS Stock and Series 3 PCS Stock
remaining outstanding, but only as of a Conversion Date
(determined as provided by Section 7.4(E) hereof) prior to the
first anniversary of the payment of such dividend or redemption
price, into a number of fully paid and nonassessable shares of
Series 1 FON Stock, Series 2 FON Stock and Series 3 FON Stock,
respectively (or, if the Series 1 FON Stock is not Publicly
Traded at such time and shares of any other class or series of
common stock of the Corporation (other than PCS Stock) are then
Publicly Traded, of such other class or series of common stock as
has the largest Total Market Capitalization as of the close of
business on the Trading Day immediately preceding the date of the
notice of such conversion required by Section 7.4(E)) equal to
110% of the Optional Conversion Ratio as of the fifth Trading Day
prior to the date of the notice of such conversion required by
Section 7.4(E); provided, that upon such conversion, the Number
Of Shares Issuable With Respect To The Old Class A Equity
Interest In The PCS Group and the Number Of Shares Issuable With
Respect To The Class A-Series DT Equity Interest In The PCS Group
will convert, on the same basis, into a Number Of Shares Issuable
With Respect To The Old Class A Equity Interest In The FON Group
and a Number Of Shares Issuable With Respect To The Class
A-Series DT Equity Interest In The FON Group, respectively.
(D) At any time following the third anniversary of the
Restructuring Closing Date, the Board of Directors may convert
each outstanding share of Series 1 PCS Stock, Series 2 PCS Stock
and Series 3 PCS Stock, as of the Conversion Date provided by
Section 7.4(E), into the number of fully paid and nonassessable
shares of Series 1 FON Stock, Series 2 FON Stock and Series 3 FON
Stock, respectively (or, if the Series 1 FON Stock is not
Publicly Traded at such time and shares of any other class or
series of common stock of the Corporation (other than PCS Stock)
are then Publicly Traded, of such other class or series of common
stock as has the largest Total Market Capitalization as of the
close of business on the Trading Day immediately preceding the
date of the notice of conversion required by Section 7.4(E))
equal to, on the Conversion Date, (i) if following the third
anniversary but prior to the fourth anniversary of the
Restructuring Closing Date, 110% of the Optional Conversion Ratio
as of the fifth Trading Day prior to the date of the notice of
such conversion required by Section 7.4(E), or (ii) if on or
after the fourth anniversary of the Restructuring Closing Date,
at such conversion ratio (if any) as the Board of Directors
determines to be fair to holders of the PCS Stock, taken as a
separate class, and holders of FON Stock, taken as a separate
class, provided, that upon such conversion, the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group and the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The PCS Group will convert,
on the same basis, into a Number Of Shares Issuable With Respect
To The Old Class A Equity Interest In The FON Group and a Number
Of Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The FON Group, respectively.
7.2. Redemption of PCS Stock for Subsidiary Stock. At any
time the Board of Directors may redeem all of the outstanding
shares of PCS Stock, on a Redemption Date of which notice is
delivered in accordance with Section 7.4(F), in exchange for the
number of shares of common stock of one or more wholly-owned
subsidiaries of the Corporation (collectively, the "PCS Group
Subsidiary") that collectively hold directly or indirectly all of
the assets and liabilities attributed to the PCS Group (and no
other assets or liabilities of the Corporation or any subsidiary
thereof) equal to the product of the Outstanding PCS Fraction and
the number of shares of common stock of such PCS Group Subsidiary
to be outstanding immediately following such exchange of shares
(including any shares of such PCS Group Subsidiary which will be
retained by the Corporation in respect of the FON Group
Intergroup Interest Fraction), such PCS Group Subsidiary shares
to be delivered to the holders of shares of PCS Stock on the
Redemption Date and to be divided among the holders of PCS Stock
pro rata in accordance with the number of shares of PCS Stock
held by each on such Redemption Date, each of which shares of
common stock of such PCS Group Subsidiary shall be, upon such
delivery, fully paid and nonassessable; provided, however, that
(i) no such redemption pursuant to this Section 7.2 may occur
prior to the second anniversary of the Restructuring Closing Date
unless such redemption is approved by the affirmative vote of the
holders of a majority of shares of PCS Stock and Class A Common
Stock, voting together as a single class in accordance with
ARTICLE SIXTH, Section 3.2(d),
(ii) holders of shares of Series 2 PCS Stock and Series 3 PCS
Stock outstanding immediately prior to the Redemption Date shall
receive on a per share basis, pursuant to such redemption, shares
of common stock of such PCS Group Subsidiary with Voting Power
equivalent on a per share basis to such shares received by
holders of Series 1 PCS Stock and
(iii) on such Redemption Date, the holders of Old Class A
Common Stock and Class A Common Stock-Series DT will receive the
number of shares of the PCS Group Subsidiary equal to the product
of (A) the Old Class A PCS Interest Fraction, in the case of the
holders of the Old Class A Common Stock, and the Class A-Series
DT PCS Interest Fraction, in the case of holders of Class A
Common Stock-Series DT and (B) the number of shares of common
stock of such PCS Group Subsidiary to be outstanding immediately
following such issuance of shares;
and provided further, that no such redemption pursuant to this
Section 7.2 may occur unless (i) the redemption is tax-free to
the holders of PCS Stock or (ii) such other arrangement exists
for the benefit of the holders of PCS Stock redeemed such that,
net of all taxes related to such redemption and to such other
arrangement itself which are realized by such stockholders, such
stockholders will be in a position that is substantially
equivalent economically to the position such stockholders would
be in after a tax-free distribution described in the immediately
preceding clause (i).
7.3. Treatment of Convertible Securities. After any
Conversion Date or Redemption Date on which all outstanding
shares of any class or series of PCS Stock are converted or
redeemed, any share of such class or series of PCS Stock that is
issued on conversion, exchange or exercise of any Convertible
Securities shall, immediately upon issuance pursuant to such
conversion, exchange or exercise and without any notice from or
to, or any other action on the part of, the Corporation or its
Board of Directors or the holder of such Convertible Security:
(A) if the shares of such class or series of PCS Stock
outstanding on such Conversion Date were converted into shares of
another class or series of Corporation Common Stock (or another
class or series of common stock of the Corporation) pursuant to
subparagraph (A)(2) or paragraph (C) or (D) of Section 7.1, be
converted into the amount of cash and/or the number of shares of
the kind of capital stock and/or other securities or property of
the Corporation that the number of shares of such class or series
of PCS Stock issued upon such conversion, exchange or exercise
would have received had such shares been outstanding on such
Conversion Date; or
(B) if the shares of such class or series of PCS Stock
outstanding on such Redemption Date were redeemed pursuant to
Section 7.1(A)(1)(b) or Section 7.2, be redeemed, to the extent
of funds of the Corporation legally available therefor, for $.01
per share in cash for each share of such class or series of PCS
Stock issued upon such conversion, exchange or exercise.
The provisions of this Section 7.3 shall not apply to the
extent that other adjustments in respect of such conversion,
exchange or redemption of a class or series of PCS Stock are
otherwise made pursuant to the provisions of such Convertible
Securities.
7.4. Notice and Other Provisions.
(A) Not later than the tenth Trading Day following the
consummation of a Disposition referred to in Section 7.1(A), the
Corporation shall announce publicly by press release (1) the Net
Proceeds of such Disposition, (2) the number of shares
outstanding of the PCS Stock, (3) the number of shares of PCS
Stock into or for which Convertible Securities are then
convertible, exchangeable or exercisable and the conversion,
exchange or exercise price thereof and (4) the Outstanding PCS
Fraction, the Old Class A PCS Interest Fraction and the Class
A-Series DT Interest Fraction on the date of such notice. Not
earlier than the 26th Trading Day and not later than the 30th
Trading Day following the consummation of such Disposition, the
Corporation shall announce publicly by press release which of the
actions specified in Section 7.1(A) it has irrevocably determined
to take in respect of such Disposition.
(B) If the Corporation determines to pay a dividend on shares
of PCS Stock pursuant to Section 7.1(A)(1)(a), the Corporation
shall, not later than the 30th Trading Day following the
consummation of the Disposition referred to in such Section,
cause notice to be given to each holder of PCS Stock, Class A
Common Stock and to each holder of Convertible Securities that
are convertible into or exchangeable or exercisable for shares of
PCS Stock (unless alternate provision for such notice to the
holders of such Convertible Securities is made pursuant to the
terms of such Convertible Securities), setting forth (1) the
record date for determining holders entitled to receive such
dividend, which shall be not earlier than the 40th Trading Day
and not later than the 50th Trading Day following the
consummation of such Disposition, (2) the anticipated payment
date of such dividend (which shall not be more than 85 Trading
Days following the consummation of such Disposition), (3) the
kind of shares of capital stock, cash and/or other securities or
property to be paid as such dividend in respect of the
outstanding shares of PCS Stock, (4) the Net Proceeds of such
Disposition, (5) the Outstanding PCS Fraction, the Old Class A
PCS Interest Fraction and the Class A-Series DT Interest Fraction
on the date of such notice, (6) the number of outstanding shares
of PCS Stock and the number of shares of PCS Stock into or for
which outstanding Convertible Securities are then convertible,
exchangeable or exercisable and the conversion, exchange or
exercise price thereof and (7) in the case of notice to be given
to holders of Convertible Securities, a statement to the effect
that a holder of such Convertible Securities shall be entitled to
receive such dividend only if such holder properly converts,
exchanges or exercises such Convertible Securities on or prior to
the record date referred to in clause (1) of this sentence. Such
notice shall be sent by first-class mail, postage prepaid, to
each such holder at such holder's address as the same appears on
the transfer books of the Corporation.
(C) If the Corporation determines to redeem PCS Stock pursuant
to Section 7.1(A)(1)(b)(i), the Corporation shall, not earlier
than the 45th Trading Day and not later than the 35th Trading Day
prior to the Redemption Date, cause notice to be given to each
holder of shares of PCS Stock, Class A Common Stock and to each
holder of Convertible Securities convertible into or exchangeable
or exercisable for shares of PCS Stock (unless alternate
provision for such notice to the holders of such Convertible
Securities is made pursuant to the terms of such Convertible
Securities), setting forth (1) a statement that all shares of PCS
Stock outstanding on the Redemption Date shall be redeemed, (2)
the Redemption Date (which shall not be more than 85 Trading Days
following the consummation of such Disposition), (3) the kind of
shares of capital stock, cash and/or other securities or property
in which the redemption price for the shares to be redeemed is to
be paid, (4) the Net Proceeds of such Disposition, (5) the
Outstanding PCS Fraction, the Old Class A PCS Interest Fraction
and the Class A-Series DT Interest Fraction on the date of such
notice, (6) the place or places where certificates for shares of
PCS Stock, properly endorsed or assigned for transfer (unless the
Corporation waives such requirement), are to be surrendered for
delivery of cash and/or securities or other property, (7) the
number of outstanding shares of PCS Stock and the number of
shares of PCS Stock into or for which such outstanding
Convertible Securities are then convertible, exchangeable or
exercisable and the conversion, exchange or exercise price
thereof, (8) in the case of notice to be given to holders of
Convertible Securities, a statement to the effect that a holder
of such Convertible Securities shall be entitled to participate
in such redemption only if such holder properly converts,
exchanges or exercises such Convertible Securities on or prior to
the Redemption Date referred to in clause (2) of this sentence
and a statement as to what, if anything, such holder will be
entitled to receive pursuant to the terms of such Convertible
Securities or, if applicable, this Section 7 if such holder
thereafter converts, exchanges or exercises such Convertible
Securities and (9) a statement to the effect that, except as
otherwise provided by paragraph (I) of this Section 7.4,
dividends on such shares of PCS Stock shall cease to be paid as
of such Redemption Date. Such notice shall be sent by first-class
mail, postage prepaid, to each such holder at such holder's
address as the same appears on the transfer books of the
Corporation.
(D) If the Corporation determines to redeem PCS Stock pursuant
to Section 7.1(A)(1)(b)(ii), the Corporation shall, not later
than the 30th Trading Day following the consummation of the
Disposition referred to in such subparagraph, cause notice to be
given to each holder of shares of PCS Stock, Class A Common Stock
and to each holder of Convertible Securities that are convertible
into or exchangeable or exercisable for shares of PCS Stock
(unless alternate provision for such notice to the holders of
such Convertible Securities is made pursuant to the terms of such
Convertible Securities) setting forth (1) a date, not earlier
than the 40th Trading Day and not later than the 50th Trading Day
following the consummation of the Disposition in respect of which
such redemption is to be made, on which shares of PCS Stock shall
be selected for redemption, (2) the anticipated Redemption Date
(which shall not be more than 85 Trading Days following the
consummation of such Disposition), (3) the kind of shares of
capital stock, cash and/or other securities or property in which
the redemption price for the shares to be redeemed is to be paid,
(4) the Net Proceeds of such Disposition, (5) the Outstanding PCS
Fraction, the Old Class A PCS Interest Fraction and the Class
A-Series DT Interest Fraction on the date of such notice, (6) the
number of shares of PCS Stock outstanding and the number of
shares of PCS Stock into or for which outstanding Convertible
Securities are then convertible, exchangeable or exercisable and
the conversion, exchange or exercise price thereof, (7) in the
case of notice to be given to holders of Convertible Securities,
a statement to the effect that a holder of such Convertible
Securities shall be eligible to participate in such selection for
redemption only if such holder properly converts, exchanges or
exercises such Convertible Securities on or prior to the record
date referred to in clause (1) of this sentence, and a statement
as to what, if anything, such holder will be entitled to receive
pursuant to the terms of such Convertible Securities or, if
applicable, this Section 7 if such holder thereafter converts,
exchanges or exercises such Convertible Securities and (8) a
statement that the Corporation will not be required to register a
transfer of any shares of PCS Stock for a period of 15 Trading
Days next preceding the date referred to in clause (1) of this
sentence. Promptly following the date referred to in clause (1)
of the preceding sentence, but not earlier than 40 Trading Days
nor later than 50 Trading Days following the consummation of such
Disposition, the Corporation shall cause a notice to be given to
each holder of record of shares of PCS Stock to be redeemed
setting forth (1) the number of shares of PCS Stock held by such
holder to be redeemed, (2) a statement that such shares of PCS
Stock shall be redeemed, (3) the Redemption Date, (4) the kind
and per share amount of cash and/or securities or other property
to be received by such holder with respect to each share of PCS
Stock to be redeemed, including details as to the calculation
thereof, (5) the place or places where certificates for shares of
PCS Stock, properly endorsed or assigned for transfer (unless the
Corporation shall waive such requirement), are to be surrendered
for delivery of such cash and/or securities or other property,
(6) if applicable, a statement to the effect that the shares
being redeemed may no longer be transferred on the transfer books
of the Corporation after the Redemption Date and (7) a statement
to the effect that, subject to paragraph (I) of this Section 7.4,
dividends on such shares of PCS Stock shall cease to be paid as
of the Redemption Date. Such notices shall be sent by first-class
mail, postage prepaid, to each such holder at such holder's
address as the same appears on the transfer books of the
Corporation.
(E) If the Corporation determines to convert the PCS Stock
pursuant to Section 7.1(A)(2), Section 7.1(C) or Section 7.1(D),
as the case may be, the Corporation shall, not earlier than the
45th Trading Day and not later than the 35th Trading Day prior to
the Conversion Date, cause notice to be given to each holder of
shares of PCS Stock, Class A Common Stock and to each holder of
Convertible Securities that are convertible into or exchangeable
or exercisable for shares of PCS Stock (unless alternate
provision for such notice to the holders of such Convertible
Securities is made pursuant to the terms of such Convertible
Securities) setting forth (1) a statement that all outstanding
shares of PCS Stock shall be converted, (2) the Conversion Date
(which, in the case of a conversion after a Disposition, shall
not be more than 85 Trading Days following the consummation of
such Disposition), (3) the per share number of shares of Series 1
FON Stock (or Series 2 FON Stock or Series 3 FON Stock, if
applicable) or another class or series of common stock of the
Corporation, as the case may be, to be received with respect to
each share of PCS Stock, including details as to the calculation
thereof, (4) the place or places where certificates for shares of
PCS Stock, properly endorsed or assigned for transfer (unless the
Corporation shall waive such requirement), are to be surrendered
for delivery of certificates for shares of Series 1 FON Stock (or
Series 2 FON Stock or Series 3 FON Stock, if applicable) or
another class or series of common stock of the Corporation, as
the case may be, (5) the number of outstanding shares of PCS
Stock and the number of shares of PCS Stock into or for which
outstanding Convertible Securities are then convertible,
exchangeable or exercisable and the conversion, exchange or
exercise price thereof, (6) a statement to the effect that,
subject to paragraph (I) of this Section 7.4, dividends on such
shares of PCS Stock shall cease to be paid as of such Conversion
Date and (7) in the case of notice to holders of such Convertible
Securities, a statement to the effect that a holder of such
Convertible Securities shall be entitled to receive shares of
common stock upon such conversion only if such holder properly
converts, exchanges or exercises such Convertible Securities on
or prior to such Conversion Date and a statement as to what, if
anything, such holder will be entitled to receive pursuant to the
terms of such Convertible Securities or, if applicable, this
Section 7.4 if such holder thereafter converts, exchanges or
exercises such Convertible Securities. Such notice shall be sent
by first-class mail, postage prepaid, to each such holder at such
holder's address as the same appears on the transfer books of the
Corporation.
(F) If the Corporation determines to redeem shares of PCS
Stock pursuant to Section 7.2, the Corporation shall cause notice
to be given to each holder of shares of PCS Stock to be redeemed,
and to each holder of Class A Common Stock and Convertible
Securities that are convertible into or exchangeable or
exercisable for shares of such class of PCS Stock (unless
alternate provision for such notice to the holders of such
Convertible Securities is made pursuant to the terms of such
Convertible Securities), setting forth (1) a statement that all
shares of PCS Stock outstanding on the Redemption Date shall be
redeemed in exchange for shares of common stock of the PCS Group
Subsidiary, (2) the Redemption Date, (3) the Outstanding PCS
Fraction, the Old Class A PCS Interest Fraction and the Class
A-Series DT Interest Fraction on the date of such notice, (4) the
place or places where certificates for shares of PCS Stock to be
redeemed, properly endorsed or assigned for transfer (unless the
Corporation shall waive such requirement), are to be surrendered
for delivery of certificates for shares of the PCS Group
Subsidiaries, (5) a statement to the effect that, subject to
paragraph (I) of this Section 7.4, dividends on such shares of
PCS Stock shall cease to be paid as of such Redemption Date, (6)
the number of shares of PCS Stock outstanding and the number of
shares of PCS Stock into or for which outstanding Convertible
Securities are then convertible, exchangeable or exercisable and
the conversion, exchange or exercise price thereof and (7) in the
case of notice to holders of Convertible Securities, a statement
to the effect that a holder of Convertible Securities shall be
entitled to receive shares of common stock of the PCS Group
Subsidiary upon redemption only if such holder properly converts,
exchanges or exercises such Convertible Securities on or prior to
the Redemption Date and a statement as to what, if anything, such
holder will be entitled to receive pursuant to the terms of such
Convertible Securities or, if applicable, this Section 7 if such
holder thereafter converts, exchanges or exercises such
Convertible Securities. Such notice shall be sent by first-class
mail, postage prepaid, not less than 30 Trading Days nor more
than 45 Trading Days prior to the Redemption Date to each such
holder at such holder's address as the same appears on the
transfer books of the Corporation. If any shares of Series 2 PCS
Stock or Series 3 PCS Stock are outstanding immediately prior to
the Redemption Date, then the notice provided to each holder of
Series 2 PCS Stock or Series 3 PCS Stock, as the case may be,
pursuant to this Section 7.4(F) will also indicate that such
holders of shares of Series 2 PCS Stock and Series 3 PCS Stock
outstanding immediately prior to the Redemption Date shall
receive on a per share basis, pursuant to such redemption, shares
of common stock of such PCS Group Subsidiary with Voting Power
equivalent to such shares received by holders of Series 1 PCS
Stock.
(G) If less than all of the outstanding shares of PCS Stock
are to be redeemed pursuant to Section 7.1(A)(1), then the shares
to be redeemed by the Corporation shall be selected from among
the holders of shares of PCS Stock outstanding at the close of
business on the record date for such redemption on a pro rata
basis among each class or series of PCS Stock (including pro rata
among all holders of Series 2 PCS Stock and Series 3 PCS Stock)
or, if Series 2 PCS Stock is no longer outstanding, by lot or
such other method as may be determined by the Board of Directors
of the Corporation to be equitable.
(H) The Corporation shall not be required to issue or deliver
fractional shares of any capital stock or of any other securities
to any holder of PCS Stock upon any conversion, redemption,
dividend or other distribution pursuant to this Section 7. If
more than one share of PCS Stock shall be held at the same time
by the same holder, the Corporation may aggregate the number of
shares of any capital stock that shall be issuable or any other
securities or property that shall be distributable to such holder
upon any conversion, redemption, dividend or other distribution
(including any fractional shares). If there are fractional shares
of any capital stock or of any other securities remaining to be
issued or distributed to the holders of PCS Stock, the
Corporation shall, if such fractional shares are not issued or
distributed to the holder, pay cash in respect of such fractional
shares in an amount equal to the Fair Value thereof on the fifth
Trading Day prior to the date such payment is to be made (without
interest). For purposes of the preceding sentence only, "Fair
Value" of any fractional share means (A) in the case of any
fraction of a share of capital stock of the Corporation, the
product of such fraction and the Market Value of one share of
such capital stock and (B) in the case of any other fractional
security, such value as is determined by the Board of Directors.
(I) No adjustments in respect of dividends shall be made upon
the conversion or redemption of any shares of PCS Stock;
provided, however, that if the Conversion Date or Redemption
Date, as the case may be, with respect to any shares of PCS Stock
shall be subsequent to the record date for the payment of a
dividend or other distribution thereon or with respect thereto,
the holders of such shares of PCS Stock at the close of business
on such record date shall be entitled to receive the dividend or
other distribution payable on or with respect to such shares on
the date set for payment of such dividend or other distribution,
in each case without interest, notwithstanding the subsequent
conversion or redemption of such shares.
(J) Before any holder of PCS Stock shall be entitled to
receive any cash payment and/or certificates or instruments
representing shares of any capital stock and/or other securities
or property to be distributed to such holder with respect to such
shares of PCS Stock pursuant to this Section 7, such holder shall
surrender at such place as the Corporation shall specify
certificates for such shares of PCS Stock, properly endorsed or
assigned for transfer (unless the Corporation shall waive such
requirement). The Corporation shall as soon as practicable after
receipt of certificates representing such shares of PCS Stock
deliver to the person for whose account such shares of PCS Stock
were so surrendered, or to such person's nominee or nominees, the
cash and/or the certificates or instruments representing the
number of whole shares of the kind of capital stock and/or other
securities or property to which such person shall be entitled as
aforesaid, together with any payment in respect of fractional
shares contemplated by Section 7.4(H), in each case without
interest. If less than all of the shares of PCS Stock represented
by any one certificate are to be redeemed or converted, then the
Corporation shall issue and deliver a new certificate for the
shares of PCS Stock not redeemed.
(K) From and after any applicable Conversion Date or
Redemption Date, as the case may be, all rights of a holder of
shares of PCS Stock that were converted or redeemed shall cease
except for the right, upon surrender of the certificates
representing such shares of PCS Stock as required by Section
7.4(J), to receive the cash and/or the certificates or
instruments representing shares of the kind of capital stock
and/or other securities or property for which such shares were
converted or redeemed, together with any payment in respect of
fractional shares contemplated by Section 7.4(H) and rights to
dividends as provided in Section 7.4(I), in each case without
interest. Subject to the next sentence, any holder of a
certificate that immediately prior to the applicable Conversion
Date or Redemption Date represented shares of PCS Stock shall not
be entitled to receive any dividend or other distribution or
interest payment with respect to shares of any kind of capital
stock or other security or instrument for which PCS Stock was
converted or redeemed until the surrender as required by this
Section 7 of such certificate in exchange for a certificate or
certificates or instrument or instruments representing such
capital stock or other security. Upon such surrender, there shall
be paid to the holder the amount of any dividends or other
distributions (without interest) which theretofore became payable
on any class of capital stock of the Corporation as of a record
date after the Conversion Date or Redemption Date, but that were
not paid by reason of the foregoing, with respect to the number
of whole shares of the kind of capital stock represented by the
certificate or certificates issued upon such surrender. From and
after a Conversion Date or Redemption Date, the Corporation
shall, however, be entitled to treat the certificates for PCS
Stock that have not yet been surrendered for conversion or
redemption as evidencing the ownership of the number of whole
shares of the kind or kinds of capital stock of the Corporation
for which the shares of PCS Stock represented by such
certificates shall have been converted or redeemed,
notwithstanding the failure to surrender such certificates.
(L) The Corporation shall pay any and all documentary, stamp
or similar issue or transfer taxes that may be payable in respect
of the issuance or delivery of any shares of capital stock and/or
other securities upon conversion or redemption of shares of PCS
Stock pursuant to this Section 7. The Corporation shall not,
however, be required to pay any tax that may be payable in
respect of any transfer involved in the issuance or delivery of
any shares of capital stock and/or other securities in a name
other than that in which the shares of PCS Stock so converted or
redeemed were registered, and no such issuance or delivery shall
be made unless and until the person requesting such issuance or
delivery has paid to the Corporation the amount of any such tax
or has established to the satisfaction of the Corporation that
such tax has been paid.
(M) Neither the failure to mail any notice required by this
Section 7.4 to any particular holder of PCS Stock or of
Convertible Securities nor any defect therein shall affect the
sufficiency of any notice given to any other holder of
outstanding shares of PCS Stock or of Convertible Securities or
the validity of any such conversion or redemption.
(N) The Board of Directors may establish such rules and
requirements to facilitate the effectuation of the transactions
contemplated by this Section 7 as the Board of Directors shall
determine to be appropriate.
(O) If notices to Class A Holders are made pursuant to this
Section 7, then the Corporation will make such notices in
compliance with the provisions of Section 11 of ARTICLE SIXTH as
well as with the provisions of this Section 7.
7.5 Automatic Conversion of Series 2 PCS Stock and Series 2
FON Stock.
(a) Below One Percent Voting Power. If the total number of
Converted Votes represented by the aggregate number of issued and
outstanding shares of Series 2 PCS Stock or Series 2 FON Stock,
as the case may be, is below one percent of the outstanding
Voting Power of the Corporation for more than 90 consecutive
days, then (i) the Corporation shall notify FT and DT, in
accordance with ARTICLE SIXTH, Section 11, of the date on which
such conversion will occur as soon as practicable following the
date on which such 90-day period ends (the "Conversion Trigger
Date") but in no event later than ten Business Days after the
Conversion Trigger Date and (ii) each outstanding share of Series
2 PCS Stock or Series 2 FON Stock will automatically convert
(without the payment of any consideration) into one duly issued,
fully paid and nonassessable share of Series 1 PCS Stock or
Series 1 FON Stock, respectively, such conversion to take place
on the 90th day following the Conversion Trigger Date.
(b) Certain Transfers. Upon any Transfer of shares of Series
2 PCS Stock or Series 2 FON Stock, as the case may be (other than
a Transfer to a Cable Holder) each such share so Transferred
shall automatically convert (without the payment of any
consideration) into one duly issued, fully paid and nonassessable
share of Series 1 PCS Stock or Series 1 FON Stock, respectively,
as of the date of such Transfer.
(c) Notice of Automatic Conversion; Exchange of Stock
Certificates; Effect of Automatic Conversion of All Series 2 PCS
Stock, etc.
(i) In addition to the notice required in Section 7.5(a), as
soon as practicable after a conversion of shares of Series 2 PCS
Stock (or, if applicable, Series 2 FON Stock) into shares of
Series 1 PCS Stock (or, if applicable, Series 1 FON Stock),
pursuant to this Section 7, the Corporation shall notify FT and
DT, in accordance with ARTICLE SIXTH, Section 11, of the number
of shares so converted and the date on which such conversion
occurred.
(ii) Immediately upon the conversion of shares of Series 2 PCS
Stock (or, if applicable, Series 2 FON Stock) into shares of
Series 1 PCS Stock (or, if applicable, Series 1 FON Stock),
pursuant to this Section 7 (such shares so converted hereinafter
referred to as the "Converted Series Shares"), the rights of the
holders of such Converted Series Shares, as such, shall cease and
the holders thereof shall be treated for all purposes as having
become the record owners of the shares of Series 1 PCS Stock or
Series 1 FON Stock, as the case may be, issuable upon such
conversion (the "Newly Issued Shares"), provided that such
Persons shall be entitled to receive when paid any dividends
declared on the Converted Series Shares as of a record date
preceding the time the Converted Series Shares were converted
(the "Series Conversion Time") and unpaid as of the Series
Conversion Time. If the stock transfer books of this Corporation
shall be closed at the Series Conversion Time, such Person or
Persons shall be deemed to have become such holder or holders of
record of the Newly Issued Shares at the opening of business on
the next succeeding day on which such stock transfer books are
open.
(iii) As promptly as practicable after the Series Conversion
Time, upon the delivery to this Corporation of the certificates
formerly representing Converted Series Shares, this Corporation
shall deliver or cause to be delivered, to or upon the written
order of the record holder of such certificates, a certificate or
certificates representing the number of duly issued, fully paid
and nonassessable Newly Issued Shares into which the Converted
Series Shares formerly represented by such certificates have been
converted in accordance with the provisions of this Section 7.5.
(iv) This Corporation shall pay all United States federal,
state or local documentary, stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of Newly Issued
Shares upon the conversion of Converted Series Shares pursuant to
this Section 7.5, provided that this Corporation shall not be
required to pay any tax which may be payable in respect of any
registration of Transfer involved in the issue or delivery of
Newly Issued Shares in a name other than that of the registered
holder of shares converted or to be converted, and no such issue
or delivery shall be made unless and until the person requesting
such issue has paid to this Corporation the amount of any such
tax or has established, to the satisfaction of this Corporation,
that such tax has been paid.
(v) This Corporation shall at all times reserve and keep
available, out of the aggregate of its authorized but unissued
Series 1 PCS Stock, authorized but unissued Series 1 FON Stock,
issued Series 1 PCS Stock held in its treasury and issued Series
1 FON Stock held in its treasury, for the purpose of effecting
the conversion of the Series 2 PCS Stock or Series 2 FON Stock,
as the case may be, contemplated hereby, the full number of
shares of Series 1 PCS Stock and Series 1 FON Stock then
deliverable upon the conversion of all outstanding shares of
Series 2 PCS Stock or Series 2 FON Stock, as the case may be, and
the full number of shares of Series 2 PCS Stock the Cable Holders
are permitted to acquire under the Restructuring Agreement and
the Cable Holder Standstill Agreements.
(d) Temporary Voting Power Adjustment for Class A Holders.
If any conversions of shares of Series 2 PCS Stock or Series 2
FON Stock into shares of Series 1 PCS Stock or Series 1 FON
Stock, respectively, pursuant to this Section 7.5, or any
increases in the per share vote of other Voting Securities of the
Corporation upon a Transfer of such Voting Securities, occur on
or after the tenth Trading Day preceding a record date for
purposes of determining the stockholders entitled to vote or to
receive the payment of a dividend, then the per share vote of the
Class A Stock determined in accordance with ARTICLE SIXTH,
Section 3.2 shall be increased such that the aggregate Percentage
Ownership Interest of each Class A Holder, including with respect
to Series 3 FON Stock and Series 3 PCS Stock (or stock converting
into Series 3 FON Stock and Series 3 PCS Stock pursuant to
ARTICLE SIXTH, Section 8.5(i)) acquired prior to such record
date, shall not be diluted as a result of such conversions until
12:01 a.m. on the day immediately following the date of such
stockholder meeting or the dividend payment date, respectively.
Section 8. Provisions Relating to Class A Stock.
8.1. Rights and Privileges. Except as otherwise set forth in
these Articles of Incorporation, at all times (i) the holders of
Series 3 FON Stock shall be entitled to all of the rights and
privileges pertaining to the ownership of Series 1 FON Stock,
(ii) the holders of Series 3 PCS Stock shall be entitled to all
of the rights and privileges pertaining to the ownership of
Series 1 PCS Stock, and (iii) the holders of Class A Common Stock
shall be entitled to all of the rights and privileges pertaining
to the ownership of Series 1 FON Stock and Series 1 PCS Stock to
the extent such Class A Common Stock represents, at such time,
Shares Issuable With Respect To The Class A Equity Interest In
The FON Group and Shares Issuable With Respect To The Class A
Equity Interest In The PCS Group, in all such cases without any
limitations, prohibitions, restrictions or qualifications
whatsoever, and such holders shall be entitled to such other
rights and privileges as are expressly set forth in these
Articles of Incorporation; provided that a holder of shares of
Class A Common Stock shall not have any rights or privileges
under these Articles of Incorporation or the General Corporation
Code of Kansas, as amended, or otherwise (whether in connection
with the voluntary or involuntary liquidation, dissolution or
winding up of this Corporation, in connection with the
declaration and/or payment of dividends, with respect to
redemptions of such shares or in connection with any other
distributions by the Corporation of any character on the
Corporation Common Stock or otherwise) in respect of such shares
except such rights and privileges that such holder would have had
if all Shares Issuable With Respect To The Class A Equity
Interest In The FON Group and all Shares Issuable With Respect To
The Class A Equity Interest In The PCS Group had been issued and
all shares of Class A Common Stock had been redeemed pursuant to
ARTICLE SIXTH, Section 1.2(c) or 1.2(d), as applicable.
8.2. Special Rights to Disapprove Certain Actions. At least
40 days prior to the occurrence of a Subject Event (as defined
below), this Corporation shall deliver to each Class A Holder a
notice (a "Notice") of such proposed Subject Event, setting forth
in reasonable detail the nature of such proposed Subject Event.
This Corporation shall thereafter be entitled to effect such
proposed Subject Event unless within 30 days of delivery of such
Notice there shall have been a Class A Action exercising the
special rights of the Class A Holders to disapprove such Subject
Event, provided that the Class A Holders shall have no special
right to disapprove any action (x) which this Corporation is
required to take to comply with its obligations or exercise its
rights under the FT/DT Restructuring Agreement, the Stockholders'
Agreement, the Standstill Agreement, the Registration Rights
Agreement or the Joint Venture Agreement or any document executed
pursuant to any such agreement or the Class A Provisions, or (y)
taken to comply with Applicable Law or the rules of any exchange
or market system on which securities of this Corporation may be
traded, and provided, further, that any action to be taken by
this Corporation in reliance on clause (y) of the foregoing
proviso is the only action commercially reasonably available to
this Corporation to effect such compliance, as certified to the
Class A Holders by resolution of the Independent Directors. For
purposes of these Articles, the term "Subject Event" means only
the following transactions and only if such transactions are
consummated within the respective time periods indicated below:
(a) Until January 31, 1998 or, in the case of clause (iv)
below, April 26, 1998:
(i) any transaction or series of related transactions
(other than Exempt Asset Divestitures or Exempt Long Distance
Asset Divestitures) that results, directly or indirectly, in
Transfers of assets of this Corporation or its Subsidiaries with
an aggregate Fair Market Value (calculated in the case of each
Transfer as at the date this Corporation or any such Subsidiary
enters into a definitive agreement to effect such Transfer) of
more than 20 percent of Market Capitalization (calculated (x) in
the case of a single transaction as at the date this Corporation
or any such Subsidiary enters into a definitive agreement to
effect such Transfer and (y) in the case of a series of related
transactions, as at the date this Corporation or any such
Subsidiary enters into a definitive agreement to effect the last
of such Transfers);
(ii) any transaction or series of related transactions
(including, without limitation, mergers, purchases of stock or
assets, joint ventures or other acquisitions), but excluding any
transaction constituting an Exempt Asset Divestiture or Exempt
Long Distance Asset Divestiture, resulting, directly or
indirectly, in the acquisition by this Corporation or its
Subsidiaries for cash or debt securities maturing in less than
one year from the date of issuance of (x) assets constituting or
predominantly used in Core Businesses ("Core Business Assets")
for a purchase price or, in the case of a series of related
transactions, an aggregate purchase price that exceeds 20 percent
of Market Capitalization (calculated as at the date this
Corporation or any such Subsidiary enters into a definitive
agreement to effect such transaction or, in the case of a series
of related transactions, as at the date this Corporation or any
such Subsidiary enters into a definitive agreement to effect the
last of such related transactions) or (y) other assets for a
purchase price or, in the case of a series of related
transactions, for an aggregate purchase price that exceeds five
percent of Market Capitalization (calculated as at the date this
Corporation or any such Subsidiary enters into a definitive
agreement to effect such transaction or, in the case of a series
of related transactions, as at the date this Corporation or any
such Subsidiary enters into a definitive agreement to effect the
last of such related transactions), provided that, if any such
other assets are proposed to be obtained in the course of a
proposed transaction in which both Core Business Assets and other
assets are to be acquired and the ratio of the fair market value
of the Core Business Assets to be acquired to the fair market
value of the other assets to be acquired exceeds 1.75 to 1, then
the holders of the Class A Stock shall not be entitled to
disapproval rights with respect to such transaction except as
provided in clause (x) of this Section 8.2(a)(ii);
(iii) issuance by this Corporation of any capital stock or
debt (including, without limitation, direct or indirect issuances
such as pursuant to mergers and other business combinations) with
both (x) a class vote to elect one or more Directors and (y)
rights with respect to dispositions of Long Distance Assets or
other assets, or share issuances, which rights are in scope and
duration as extensive as or more extensive than the comparable
related rights granted to the Class A Holders in these Articles
of Incorporation or in the Stockholders' Agreement, provided that
this Section 8.2(a)(iii) shall not apply to the extent that (a)
such rights are required by Applicable Law, (b) the holders of
any series of Preferred Stock have the right, voting separately
as a class, to elect a number of Directors of this Corporation
upon the occurrence of a default in payment of dividends or
redemption price, or (c) such rights described in clause (y) are
granted in connection with borrowings and are reflected in a loan
agreement, credit agreement, trust indenture or similar agreement
or instrument;
(iv) declaration of any Extraordinary Dividends during any
one year that, individually or in the aggregate, exceed five
percent of Market Capitalization as at the Business Day
immediately preceding the declaration of the last such dividend
or distribution (other than in connection with transactions
within the meaning of clause (e) of the definition of Exempt
Asset Divestitures or clause (g) of the definition of Exempt Long
Distance Asset Divestitures); or
(v) any merger or other business combination in which this
Corporation is not the surviving parent corporation.
(b) Until the earliest of (i) January 31, 2001, (ii) such time
as (A) legislation has been enacted repealing Section 310, (B) an
FCC Order shall have been issued, or (C) outside counsel to this
Corporation with a nationally recognized expertise in
telecommunications regulatory matters delivers to each of FT and
DT a legal opinion, addressed to each of them, in form and
substance reasonably satisfactory to FT and DT, to the effect
that Section 310 does not prohibit FT and DT from owning the Long
Distance Assets proposed to be Transferred by this Corporation,
(iii) the delivery by FT, DT, Atlas or any of their Affiliates
(or a Permitted Designee (as such term is defined in the Joint
Venture Agreement)) of a notice pursuant to Section 17.2(b) of
the Joint Venture Agreement indicating the agreement to purchase
all of the Sprint Venture Interests (as such term is defined in
the Joint Venture Agreement) following an offer by this
Corporation or Sprint Sub pursuant to Section 17.2(a) of the
Joint Venture Agreement, and (iv) the delivery by this
Corporation and/or Sprint Sub of a notice pursuant to Section
17.3(a) of the Joint Venture Agreement exercising the put right
to sell all of their Sprint Venture Interests (as such term is
defined in the Joint Venture Agreement) to FT, DT and Atlas (or a
Permitted Designee (as such term is defined in the Joint Venture
Agreement)), a direct or indirect Transfer (other than in
connection with an Exempt Long Distance Asset Divestiture) after
January 31, 1996 by this Corporation or its Subsidiaries of Long
Distance Assets with a Fair Market Value (calculated as at the
date this Corporation or any such Subsidiary enters into a
definitive agreement to effect such Transfer) that, when
aggregated with the Fair Market Value of all other Long Distance
Assets Transferred by this Corporation or its Subsidiaries since
January 31, 1996 (other than in Exempt Long Distance Asset
Divestitures) (calculated in each case as at the date this
Corporation or any such Subsidiary enters into a definitive
agreement to effect each such respective Transfer) exceeds five
percent of the Fair Market Value of the Long Distance Assets of
this Corporation and its Subsidiaries, on a consolidated basis
(calculated as at the date this Corporation or any such
Subsidiary enters into a definitive agreement to effect the last
such Transfer).
(c) Except as otherwise provided in Section 8.5 of ARTICLE
SIXTH, for so long as any shares of Class A Stock are
outstanding:
(i) any amendment to these Articles of Incorporation, the
Bylaws or the Rights Agreement that would adversely affect the
rights of the Class A Holders under these Articles of
Incorporation or the Bylaws;
(ii) issuance by this Corporation (including, without
limitation, pursuant to mergers or other business combinations)
of any series or class of capital stock or debt security with
Supervoting Powers;
(iii) any merger or other business combination involving
this Corporation that results directly or indirectly in a Change
of Control, unless the surviving corporation expressly (x)
assumes all of this Corporation's obligations in respect of the
rights of the Class A Holders under Section 8.2(b) of ARTICLE
SIXTH and the provisions of Article III of the Stockholders'
Agreement (except, in each case, as they may be otherwise
terminated pursuant to these Articles of Incorporation or the
Stockholders' Agreement) and all of the provisions of the
Registration Rights Agreement and (y) agrees to be bound by any
applicable Tie-Breaking Vote in accordance with Articles 17 and
18 of the Joint Venture Agreement; or
(iv) any merger or other business combination involving
this Corporation that does not result directly or indirectly in a
Change of Control unless:
(x) this Corporation survives as the parent entity; or
(y) the surviving corporation expressly assumes all of
this Corporation's obligations in respect of the rights of the
Class A Holders granted pursuant to these Articles of
Incorporation and under the Bylaws, the Stockholders' Agreement,
the FT/DT Restructuring Agreement and the Registration Rights
Agreement.
8.3. Special Rights Regarding Major Issuances. So long as
any Class A Stock is outstanding, prior to effecting any Major
Issuance:
(a) occurring on or prior to January 31, 2001, this
Corporation shall obtain the prior approval of two-thirds of the
Independent Directors by resolution, certified to the Class A
Holders; and
(b) occurring after January 31, 2001, this Corporation shall
obtain the prior approval of a majority of the Independent
Directors.
8.4. Special Rights Regarding Holdings by Major Competitors of
FT or DT. (a) Until January 31, 2006, at least 90 days prior to
consummating any transaction or taking any other action that,
directly or indirectly, would result in, or is taken for the
purpose of encouraging or facilitating, a Major Competitor of FT
or DT or of the Joint Venture having, or being granted by this
Corporation any right, permission or approval to acquire (other
than pursuant to a Strategic Merger), a Percentage Ownership
Interest of ten percent or more (a "Major Competitor
Transaction"), this Corporation shall provide each Class A Holder
with notice of such Major Competitor Transaction in the manner
set forth in Subsection (c) below and, if there is a Class A
Action exercising the special rights of the Class A Holders to
disapprove such Major Competitor Transaction within 75 days of
the delivery of such notice, this Corporation shall not
consummate such Major Competitor Transaction.
(b) Until January 31, 2006, if a Major Competitor of FT or DT
or of the Joint Venture obtains a Percentage Ownership Interest
of 20 percent or more as a result, directly or indirectly, of a
Strategic Merger:
(i) if the Class A Holders have not made the commitment
described in Article VI of the Stockholders' Agreement, this
Corporation (or its successor in such Strategic Merger) shall,
subject to the conditions contained in Sections 2.1(a)(ii)(D) and
2.2(a)(iv) of the Standstill Agreement, nonetheless take all
action necessary or advisable to lift all restrictions,
contractual or otherwise, imposed by this Corporation or such
successor on the ability of the Class A Holders, at any time
after April 26, 1996, to purchase shares of Series 1 FON Stock,
Series 2 FON Stock, Series 1 PCS Stock, Series 2 PCS Stock or
other Voting Securities from third parties sufficient to permit
the Class A Holders to have a Percentage Ownership Interest equal
to that of the Major Competitor of FT or DT or of the Joint
Venture; and
(ii) this Corporation shall ensure that the Class A Holders
have rights with regard to (w) a class vote to elect Directors,
(x) class approval and disapproval rights, (y) any other special
rights in respect of the business or operations of this
Corporation and (z) any rights to receive special dividends,
distributions or other rights from this Corporation, which are in
scope and duration at least as extensive as any rights granted by
this Corporation to such Major Competitor of FT or DT or of the
Joint Venture (other than rights deriving solely from the number
of Voting Securities owned), regardless of whether or not the
Class A Holders purchase any additional Voting Securities.
(c) Until January 31, 2006, this Corporation shall deliver to
each Class A Holder notice of its intent to issue Voting
Securities in a Major Competitor Transaction to any Major
Competitor of FT or DT or of the Joint Venture at least 30 days
prior to such issuance, such notice to contain a complete and
correct description in reasonable detail of the transaction in
question, including, without limitation, the purchase price for
such securities, the nature of such securities, the identity of
the Major Competitor of FT or DT or of the Joint Venture and the
rights (contractual and other) this Corporation would grant such
Major Competitor. This Corporation shall also deliver to each
Class A Holder notice of any such issuance within five days after
it occurs, such notice to contain a description of the
transaction in question and be accompanied by complete and
correct copies of all agreements, instruments and written
understandings of this Corporation, its Subsidiaries and
Affiliates and such Major Competitor of FT or DT or of the Joint
Venture and the Subsidiaries and Affiliates of such Major
Competitor executed in respect of such transaction.
8.5. Conversion of Shares. (a) Failure to Maintain
Ownership. If the aggregate Committed Percentage of the Class A
Holders shall be below ten percent (i) for more than 180
consecutive days or (ii) immediately following a Transfer of
Class A Stock by a Class A Holder, then
(A) each outstanding share of Series 3 FON Stock and Series 3
PCS Stock shall automatically convert (without the payment of any
consideration) into one duly issued, fully paid and nonassessable
share of Series 1 FON Stock and Series 1 PCS Stock, respectively,
and
(B) all (i) outstanding shares of Old Class A Common Stock
shall automatically convert (without the payment of any
consideration) into the number of duly issued, fully paid and
nonassessable shares of Series 1 FON Stock and Series 1 PCS Stock
equal to the Number Of Shares Issuable With Respect To The Old
Class A Equity Interest In The FON Group and the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group, respectively, represented by such shares of Old Class
A Common Stock, and (ii) outstanding shares of Class A Common
Stock-Series DT shall automatically convert (without the payment
of any consideration) into the number of duly issued, fully paid
and nonassessable shares of Series 1 FON Stock and Series 1 PCS
Stock equal to the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The FON Group and the Number
Of Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group, respectively, represented by such
shares of Class A Common Stock-Series DT,
such conversion to take place on the next Business Day following
the end of such 180-day period in the case of clause (i) or on
the date of such Transfer in the case of clause (ii), provided
that, if the aggregate Committed Percentage of the Class A
Holders shall fall below ten percent for more than 180
consecutive days following the date of a Major Issuance as a
result of the consummation of such Major Issuance, then, unless
all of the outstanding shares of Class A Stock shall have been
converted earlier pursuant to this Section 8.5, (x) the Shares of
Class A Stock shall not convert into either Series 1 FON Stock or
Series 1 PCS Stock, as the case may be, until the third
anniversary of the date of such Major Issuance, and (y) the Class
A Holders shall continue to be entitled to elect Directors
pursuant to ARTICLE FIFTH of these Articles of Incorporation
until the third anniversary of the date of such Major Issuance,
but (z) after the expiration of 180 days following the date of
such Major Issuance, the Class A Holders shall no longer have
their rights under Sections 8.2, 8.3, 8.4, 8.5 and 8.6 of ARTICLE
SIXTH, and provided, further, that such conversion shall not be
considered to be an acquisition of Shares of Series 1 FON Stock
or Series 1 PCS Stock, as the case may be, for purposes of
Section 8.5(i) of ARTICLE SIXTH.
(b) FT/DT Joint Venture Termination; Material Breach of
Investment Documents. (i) (A) Each outstanding share of Series
3 FON Stock and Series 3 PCS Stock shall automatically convert
(without the payment of any consideration) into one duly issued,
fully paid and nonassessable share of Series 1 FON Stock and
Series 1 PCS Stock, respectively, and (B) all (i) outstanding
shares of Old Class A Common Stock shall automatically convert
(without the payment of any consideration) into the number of
duly issued, fully paid and nonassessable shares of Series 1 FON
Stock and Series 1 PCS Stock equal to the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
FON Group and the Number Of Shares Issuable With Respect To The
Old Class A Equity Interest In The PCS Group, respectively,
represented by such shares of Old Class A Common Stock, and (ii)
outstanding shares of Class A Common Stock-Series DT shall
automatically convert (without the payment of any consideration)
into the number of duly issued, fully paid and nonassessable
shares of Series 1 FON Stock and Series 1 PCS Stock equal to the
Number Of Shares Issuable With Respect To The Class A-Series DT
Equity Interest In The FON Group and the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The PCS Group, respectively, represented by such shares of Class
A Common Stock-Series DT, if:
(t) the Sprint Parties receive the Tie-Breaking Vote pursuant
to Section 17.5 of the Joint Venture Agreement;
(u) there is an FT/DT Joint Venture Termination;
(v) FT or DT or any Qualified Subsidiary breaches in any
material respect its obligations under Section 2.4 of the
Stockholders' Agreement;
(w) FT or DT or any Qualified Subsidiary breaches in any
material respect its obligations under Article II (other than
Section 2.4) of the Stockholders' Agreement;
(x) FT, DT or any Qualified Subsidiary breaches any of the
provisions of Article 2 (other than Section 2.1(b)) of the
Standstill Agreement or any corresponding provision of any
Qualified Subsidiary Standstill Agreement;
(y) FT, DT or any Qualified Subsidiary breaches any of the
provisions of Sections 3.1 or 3.2 of the Standstill Agreement or
any corresponding provisions of any Qualified Subsidiary
Standstill Agreement, in each case in a Control Context, or
otherwise breaches Sections 3.1(a)(ii), (iii) or (iv) or Section
3.1(g) of the Standstill Agreement or any corresponding provision
of any Qualified Subsidiary Standstill Agreement; or
(z) FT, DT or any Qualified Subsidiary breaches any of the
provisions of Sections 3.1 (except Section 3.1(a)(ii), (iii) or
(iv), or Section 3.1(g)) or 3.2 of the Standstill Agreement or
any corresponding provisions of any Qualified Subsidiary
Standstill Agreement, in each case other than in a Control
Context;
provided that, with respect to an alleged breach of the type
described in clauses (v), (w), (x), (y) or (z) above, the Class A
Holders alleged to have committed such breach (the "Breaching
Holders") shall deliver a notice
(I) except with respect to a breach of the type described in
clause (y) above, in accordance with clauses (ii)(x) or (iii)(x)
below, in which case no conversion of the Class A Stock shall
take place unless such breach fails to be cured within the time
provided for cure in such clause (ii) or (iii), as the case may
be;
(II) in accordance with clauses (ii)(y), (iii)(y) or (iv)
below, in which case no conversion of the Class A Stock shall
take place until there is issued a final nonappealable decision
or order of a court of competent jurisdiction finding that such
breach has occurred and, if applicable, was not cured within the
time provided for cure in clauses (ii) or (iii) below, as the
case may be; or
(III) admitting that such a breach has occurred, and (if
applicable) cannot be cured within the time periods provided for
cure in clauses (ii) or (iii) below, in which case
(A) each outstanding share of Series 3 FON Stock and Series
3 PCS Stock, as the case may be, shall automatically convert
(without the payment of any consideration) into one duly issued,
fully paid and nonassessable share of Series 1 FON Stock and
Series 1 PCS Stock, respectively, and
(B) all (i) outstanding shares of Old Class A Common Stock
shall automatically convert (without the payment of any
consideration) into the number of duly issued, fully paid and
nonassessable shares of Series 1 FON Stock and Series 1 PCS Stock
equal to the Number Of Shares Issuable With Respect To The Old
Class A Equity Interest In The FON Group and the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group, respectively, represented by such shares of Old Class
A Common Stock, and (ii) outstanding shares of Class A Common
Stock-Series DT shall automatically convert (without the payment
of any consideration) into the number of duly issued, fully paid
and nonassessable shares of Series 1 FON Stock and Series 1 PCS
Stock equal to the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The FON Group and the Number
Of Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group, respectively, represented by such
shares of Class A Common Stock-Series DT,
upon delivery of such notice; and
provided, further, that if the Breaching Holders fail to perform
the actions described in clauses (I) or (II) above within the
time periods provided for performing such actions in clauses
(ii), (iii) or (iv) below, they shall be deemed to have taken the
action described in clause (III) above.
(ii) For any alleged breach of the type described in clauses
(w), (x) or (z) of clause (i) above, the Breaching Holders shall
have the right, within five Business Days after the date (for
purposes of this clause (ii), the "Breach Notice Date") that
notice of such breach is delivered to each Breaching Holder by
this Corporation, to deliver to this Corporation a notice either:
(x) committing to effect a cure as soon as practical, in which
case the Breaching Holders shall effect such cure as soon as
practical, but in no event later than the 20th Business Day from
the Breach Notice Date (or, with respect to an alleged breach of
clauses (w) or (x), if such cure cannot be effected within such
time period due to the anti-fraud rules of the U.S. securities
laws, such longer period as is reasonably necessary to cure such
breach in a manner consistent with such rules), provided that
(I) the Breaching Holders shall have no right to cure
unless such breach is susceptible to cure;
(II) such cure period shall continue only for so long as
each Breaching Holder shall be undertaking to effect such a cure
in a diligent manner;
(III) with respect to an alleged breach of clause (i)(x)
above, this Corporation shall have the right at any time after
the end of such 20-day period to purchase such number of shares
of Non-Class A Common Stock or Class A Stock, as the case may be,
as is necessary to return the Class A Holders to the ownership
level permitted by the Standstill Agreement or a Qualified
Subsidiary Standstill Agreement, as the case may be, at a price
equal to the lower of (A) the Market Price for such shares at the
time of such redemption and (B) the price paid by the Breaching
Holders for such shares, provided that this Corporation may only
exercise such right if a majority of the Continuing Directors
shall have first approved, at a meeting at which at least seven
Continuing Directors are present, such a purchase of Shares,
unless a Fair Price Condition has been satisfied; and
(IV) withdrawal of the action alleged to have caused such
breach shall not, in and of itself, give rise to a presumption
that such breach has been cured; or
(y) disputing that such a breach has occurred, provided that
during such time as the most recent decision or order of a court
of competent jurisdiction is to the effect that such breach has
occurred and was not cured within the time provided for cure in
clause (x) of this clause (ii), the rights provided to the Class
A Holders under Sections 8.2 (except 8.2(a)(iii) and 8.2(c)),
8.3, 8.4, 8.5 and 8.6 of ARTICLE SIXTH and the right to elect
members of the Board of Directors of the holders of the Class A
Stock under ARTICLE FIFTH of these Articles of Incorporation
shall be suspended and may not be exercised by the Class A
Holders.
(iii) For any alleged breach of the type described in clause
(i)(v) above, the Breaching Holders shall have the right, within
five Business Days after the date (for purposes of this clause
(iii), the "Breach Notice Date") that notice of such breach is
delivered to each Breaching Holder by this Corporation, to
deliver to this Corporation a notice either:
(x) committing to effect a cure as soon as practical, in which
case the Breaching Holders shall effect such cure as soon as
practical, but in no event later than the 20th Business Day from
the Breach Notice Date (or, if such cure cannot be effected
within such time period due to the anti-fraud rules of the U.S.
securities laws, such longer period as is reasonably necessary to
cure such breach in a manner consistent with such rules),
provided that
(I) the Breaching Holders shall have no right to cure
unless such breach is susceptible to cure;
(II) such cure period shall continue only for so long as
each Breaching Holder shall be undertaking to effect such a cure
in a diligent manner; and
(III) withdrawal of the action alleged to have caused such
breach shall not, in and of itself, give rise to a presumption
that such breach has been cured; or
(y) disputing that such a breach has occurred;
provided that, in each case, from the Breach Notice Date until
the earlier to occur of the cure of such breach and the issuance
of a decision or order of a court of competent jurisdiction
finding that such breach has not occurred or was cured within the
time provided for cure in clause (x) of this clause (iii), the
rights provided to the Class A Holders under Sections 8.2 (except
8.2(a)(iii) and 8.2(c)), 8.3, 8.4, 8.5 and 8.6 of ARTICLE SIXTH
and the right to elect members of the Board of Directors of the
holders of the Class A Stock under ARTICLE FIFTH of these
Articles of Incorporation shall be suspended and may not be
exercised by the Class A Holders; and provided, further, that
following such decision or order, such rights shall be suspended
during such time as the most recent decision or order of a court
of competent jurisdiction is to the effect that such breach has
occurred and was not cured within the time provided for cure in
clause (x) of this clause (iii).
(iv) For any alleged breach of the type described in clause
(i)(y) above, the Breaching Holders shall have the right, within
five Business Days after the date (for purposes of this clause
(iv), the "Breach Notice Date") that notice of such breach is
delivered to each Breaching Holder by this Corporation, to
deliver to this Corporation a notice disputing that such a breach
has occurred, provided that from the Breach Notice Date until the
issuance of a decision or order of a court of competent
jurisdiction finding that such breach has not occurred, the
rights provided to the Class A Holders under Sections 8.2 (except
8.2(a)(iii) and 8.2(c)), 8.3, 8.4, 8.5 and 8.6 of ARTICLE SIXTH
and the right to elect members of the Board of Directors of the
holders of the Class A Stock under ARTICLE FIFTH of these
Articles of Incorporation shall be suspended and may not be
exercised by the Class A Holders; and provided, further, that
following such decision or order, such rights shall be suspended
during such time as the most recent decision or order of a court
of competent jurisdiction is to the effect that such breach has
occurred.
(v) For purposes of this Section 8.5(b), an alleged breach
shall be deemed to have occurred in a "Control Context" if the
action or actions alleged to have given rise to such breach were
taken in the context of efforts by any Class A Holder or any
other Person having the purpose or effect of changing or
influencing the control of this Corporation.
(vi) No conversion pursuant to this Section 8.5(b) shall be
considered an acquisition for purposes of Section 8.5(i) of
ARTICLE SIXTH.
(c) Deleted.
(d) Corporation Joint Venture Termination. Unless the Class
A Stock shall have been converted earlier pursuant to this
Section 8.5, if there is a Corporation Joint Venture Termination,
(A) each outstanding share of Series 3 FON Stock and Series 3
PCS Stock, as the case may be, shall automatically convert
(without the payment of any consideration) into one duly issued,
fully paid and nonassessable share of Series 1 FON Stock and
Series 1 PCS Stock, respectively, and
(B) all (i) outstanding shares of Old Class A Common Stock
shall automatically convert (without the payment of any
consideration) into the number of duly issued, fully paid and
nonassessable shares of Series 1 FON Stock and Series 1 PCS Stock
equal to the Number Of Shares Issuable With Respect To The Old
Class A Equity Interest In The FON Group and the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group, respectively, represented by such shares of Old Class
A Common Stock, and (ii) outstanding shares of Class A Common
Stock-Series DT shall automatically convert (without the payment
of any consideration) into the number of duly issued, fully paid
and nonassessable shares of Series 1 FON Stock and Series 1 PCS
Stock equal to the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The FON Group and the Number
Of Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group, respectively, represented by such
shares of Class A Common Stock-Series DT,
on the third anniversary of the date of such Corporation Joint
Venture Termination, provided that any such conversion shall not
be considered to be an acquisition of Series 1 FON Stock or
Series 1 PCS Stock for purposes of Section 8.5(i) of ARTICLE
SIXTH.
(e) Other Joint Venture Termination. If (i) there is a sale
of all the Venture Interests of the Sprint Parties or the FT/DT
Parties pursuant to Section 17.2, 17.3, 17.4, 19.3, 20.6 or 20.11
of the Joint Venture Agreement or (ii) the Joint Venture is
otherwise terminated, in each case other than due to (i) an FT/DT
Joint Venture Termination or (ii) a Corporation Joint Venture
Termination:
(x) on the date of such termination, the rights provided to
the Class A Holders in Sections 8.2 (except Sections 8.2(c)(i)
and 8.2(c)(iii)), 8.3 and 8.4 of ARTICLE SIXTH shall terminate;
and
(y) unless the Class A Stock shall have been converted
pursuant to this Section 8.5,
(A) each outstanding share of Series 3 FON Stock and Series
3 PCS Stock, as the case may be, shall automatically convert
(without the payment of any consideration) into one duly issued,
fully paid and nonassessable share of Series 1 FON Stock and
Series 1 PCS Stock, respectively, and
(B) all (i) outstanding shares of Old Class A Common Stock
shall automatically convert (without the payment of any
consideration) into the number of duly issued, fully paid and
nonassessable shares of Series 1 FON Stock and Series 1 PCS Stock
equal to the Number Of Shares Issuable With Respect To The Old
Class A Equity Interest In The FON Group and the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group, respectively, represented by such shares of Old Class
A Common Stock, and (ii) outstanding shares of Class A Common
Stock-Series DT shall automatically convert (without the payment
of any consideration) into the number of duly issued, fully paid
and nonassessable shares of Series 1 FON Stock and Series 1 PCS
Stock equal to the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The FON Group and the Number
Of Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group, respectively, represented by such
shares of Class A Common Stock-Series DT,
on the third anniversary of the date of such termination,
provided that any such conversion shall not be considered to
be an acquisition of Series 1 FON Stock or Series 1 PCS Stock
for purposes of Section 8.5(i) of ARTICLE SIXTH.
(f) Change of Control. If there is a Change of Control
within the meaning of clause(a) of the definition of Change of
Control, (i) the rights provided to the Class A Holders in
ARTICLE FIFTH of these Articles of Incorporation, and Sections
8.2 (except Sections 8.2(b), 8.2(c)(iii) (as to rights provided
under Section 8.2(b)) and 8.2(c)(iv) (as to rights provided under
Section 8.2(b)), 8.3 and 8.4 of ARTICLE SIXTH shall terminate
upon the consummation of the transactions contemplated thereby,
provided that, prior to such consummation, this Corporation shall
engage in good faith negotiations with any potential acquiror of
Control to provide the Class A Holders with rights equivalent to
those provided in ARTICLE FIFTH of these Articles of
Incorporation and (ii) all, but not less than all, of the Class A
Holders shall have the right (but not the obligation) to deliver
to this Corporation a written notice upon which delivery
(A) each outstanding share of Series 3 FON Stock and Series 3
PCS Stock, as the case may be, shall automatically convert
(without the payment of any consideration) into one duly issued,
fully paid and nonassessable share of Series 1 FON Stock and
Series 1 PCS Stock, respectively, and
(B) all (i) outstanding shares of Old Class A Common Stock
shall automatically convert (without the payment of any
consideration) into the number of duly issued, fully paid and
nonassessable shares of Series 1 FON Stock and Series 1 PCS Stock
equal to the Number Of Shares Issuable With Respect To The Old
Class A Equity Interest In The FON Group and the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group, respectively, represented by such shares of Old Class
A Common Stock, and (ii) outstanding shares of Class A Common
Stock-Series DT shall automatically convert (without the payment
of any consideration) into the number of duly issued, fully paid
and nonassessable shares of Series 1 FON Stock and Series 1 PCS
Stock equal to the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The FON Group and the Number
Of Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group, respectively, represented by such
shares of Class A Common Stock-Series DT.
Any such conversion of Class A Stock pursuant to this clause (f)
shall not be considered to be an acquisition of Series 1 FON
Stock or Series 1 PCS Stock for purposes of Section 8.5(i) of
ARTICLE SIXTH.
(g) Unequal Ownership. (i) If (A) the ratio of the aggregate
Percentage Ownership Interest of the overall Voting Power of the
Corporation of one of FT or DT (and its Qualified Subsidiaries)
to the aggregate Percentage Ownership Interest of the overall
Voting Power of the Corporation of the other of FT or DT (and its
Qualified Subsidiaries) is greater than 3 to 2, (B) the ratio of
the aggregate Percentage Ownership Interest of the Class A FON
Shares of one of FT or DT (and its Qualified Subsidiaries) to the
aggregate Percentage Ownership Interest of the other of FT or DT
(and its Qualified Subsidiaries) is greater than 4 to 1; or (C)
the ratio of the aggregate Percentage Ownership Interest of the
Class A PCS Shares of one of FT or DT (and its Qualified
Subsidiaries) to the aggregate Percentage Ownership Interest of
the other of FT or DT (and its Qualified Subsidiaries) is greater
than 4 to 1, for 60 consecutive days following a notice of such
event delivered by this Corporation to each of FT and DT, then
(A) each outstanding share of Series 3 FON Stock and Series 3
PCS Stock, as the case may be, shall automatically convert
(without the payment of any consideration) into one duly issued,
fully paid and nonassessable share of Series 1 FON Stock and
Series 1 PCS Stock, respectively, and
(B) all (i) outstanding shares of Old Class A Common Stock
shall automatically convert (without the payment of any
consideration) into the number of duly issued, fully paid and
nonassessable shares of Series 1 FON Stock and Series 1 PCS Stock
equal to the Number Of Shares Issuable With Respect To The Old
Class A Equity Interest In The FON Group and the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group, respectively, represented by such shares of Old Class
A Common Stock, and (ii) outstanding shares of Class A Common
Stock-Series DT shall automatically convert (without the payment
of any consideration) into the number of duly issued, fully paid
and nonassessable shares of Series 1 FON Stock and Series 1 PCS
Stock equal to the Number Of Shares Issuable With Respect To The
Class ASeries DT Equity Interest In The FON Group and the Number
Of Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group, respectively, represented by such
shares of Class A Common Stock-Series DT;
provided that any such conversion shall not be considered to be
an acquisition of Series 1 FON Stock or Series 1 PCS Stock,
respectively, for purposes of Section 8.5 (i) of ARTICLE SIXTH.
(ii) For purposes of calculating the ratios in this Section
8.5(g), FT and DT shall be deemed to own shares of Class A Stock
owned by a Qualified Subsidiary as follows:
(x) if only one of FT or DT owns, directly or indirectly,
Votes in such Qualified Subsidiary, FT or DT, as the case may be,
shall be deemed to own all of the shares of Class A Stock owned
by such Qualified Subsidiary; and
(y) if both FT and DT own, directly or indirectly, Votes in
such Qualified Subsidiary, each of FT and DT shall be deemed to
own its respective Applicable Percentage of the shares of Class A
Stock owned by such Qualified Subsidiary. As used herein, the
"Applicable Percentage" means the percentage of the equity
interests of such Qualified Subsidiary owned, directly or
indirectly, by FT or DT, as the case may be.
(h) Unauthorized Transfers. Unless approved by this
Corporation, upon any Transfer of shares of Class A Stock (other
than a Transfer to a Qualified Subsidiary, a Qualified Stock
Purchaser or to FT or DT, in each case which Transfer is effected
in accordance with the provisions of Article II of the
Stockholders' Agreement),
(A) each share of Series 3 FON Stock and Series 3 PCS Stock,
as the case may be, so Transferred shall automatically convert
(without the payment of any consideration) into one duly issued,
fully paid and nonassessable share of Series 1 FON Stock and
Series 1 PCS Stock, respectively, and
(B) (i) each share of Old Class A Common Stock so Transferred
shall automatically convert (without the payment of any
consideration) into (x) a number of duly issued, fully paid and
nonassessable shares of Series 1 FON Stock equal to the product
of (I) the number of such shares of Old Class A Common Stock so
Transferred and (II) a fraction the numerator of which is the
Number Of Shares Issuable With Respect To The Old Class A Equity
Interest In The FON Group and the denominator of which is the
aggregate number of shares of Old Class A Common Stock
outstanding immediately prior to such Transfer and (y) a number
of duly issued, fully paid and nonassessable shares of Series 1
PCS Stock equal to the product of (I) the number of such shares
of Old Class A Common Stock so Transferred and (II) a fraction
the numerator of which is the Number Of Shares Issuable With
Respect To The Old Class A Equity Interest In The PCS Group and
the denominator of which is the aggregate number of shares of Old
Class A Common Stock outstanding immediately prior to such
Transfer; and
(ii) each share of Class A Common Stock-Series DT so
Transferred shall automatically convert (without the payment of
any consideration) into (x) a number of duly issued, fully paid
and nonassessable shares of Series 1 FON Stock equal to the
product of (I) the number of such shares of Class A Common
Stock-Series DT so Transferred and (II) a fraction the numerator
of which is the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The FON Group and the
denominator of which is the aggregate number of shares of Class A
Common Stock-Series DT outstanding immediately prior to such
Transfer and (y) a number of duly issued, fully paid and
nonassessable shares of Series 1 PCS Stock equal to the product
of (I) the number of such shares of Class A Common Stock-Series
DT so Transferred and (II) a fraction the numerator of which is
the Number Of Shares Issuable With Respect To The Class A-Series
DT Equity Interest In The PCS Group and the denominator of which
is the aggregate number of shares of Class A Common Stock-Series
DT outstanding immediately prior to such Transfer;
as of the date of such Transfer, provided that no conversion of
Class A Stock pursuant to this Section 8.5(h) shall be considered
to be an acquisition of Series 1 FON Stock or Series 1 PCS Stock
for purposes of Section 8.5(i) of ARTICLE SIXTH.
(i) Conversion into Class A Stock. Until the conversion of
all of the shares of Class A Stock pursuant to this Section 8.5,
(x) each share of Series 1 FON Stock or Series 2 FON Stock, as
the case may be, acquired by a Class A Holder shall automatically
convert (without the payment of any consideration) into one duly
issued, fully paid and nonassessable share of Series 3 FON Stock
at the date of such acquisition and (y) each share of Series 1
PCS Stock or Series 2 PCS Stock, as the case may be, acquired by
a Class A Holder shall automatically convert (without the payment
of any consideration) into one duly issued, fully paid and
nonassessable share of Series 3 PCS Stock at the date of such
acquisition.
(j) Notice of Conversion; Exchange of Stock Certificates;
Effect of Conversion of all Class A Stock, etc. (i) Immediately
upon the conversion of shares of Series 3 FON Stock, Series 3 PCS
Stock and Class A Common Stock into shares of Series 1 FON Stock,
Series 1 PCS Stock and, as applicable, shares of both Series 1
FON Stock and Series 1 PCS Stock, respectively, or upon the
conversion of shares of Series 1 FON Stock and Series 2 FON Stock
or Series 2 PCS Stock and Series 1 PCS Stock into shares of
Series 3 FON Stock or Series 3 PCS Stock, respectively, and in
each case pursuant to this Section 8.5 (the shares of Class A
Common Stock, Series 3 FON Stock, Series 3 PCS Stock, Series 1
FON Stock, Series 2 FON Stock, Series 2 PCS Stock or Series 1 PCS
Stock so converted hereinafter referred to as the "Converted
Shares"), the rights of the holders of such Converted Shares, as
such, shall cease and the holders thereof shall be treated for
all purposes as having become the record owners of the shares of
Series 1 FON Stock, Series 3 FON Stock, Series 1 PCS Stock or
Series 3 PCS Stock, as the case may be, issuable upon such
conversion (the "New Shares"), provided that such Persons shall
be entitled to receive when paid any dividends declared on the
Converted Shares as of a record date preceding the time the
Converted Shares were converted (the "Conversion Time") and
unpaid as of the Conversion Time, if such Persons were the record
holders of the Converted Shares on such record date. If the stock
transfer books of this Corporation shall be closed at the
Conversion Time, such Person or Persons shall be deemed to have
become such holder or holders of record of the New Shares at the
opening of business on the next succeeding day on which such
stock transfer books are open.
(ii) As promptly as practicable after the Conversion Time,
upon the delivery to this Corporation of the certificates
formerly representing Converted Shares, this Corporation shall
deliver or cause to be delivered, to or upon the written order of
the record holder of such certificates, a certificate or
certificates representing the number of duly issued, fully paid
and nonassessable New Shares into which the Converted Shares
formerly represented by such certificates have been converted in
accordance with the provisions of this Section 8.5.
(iii) This Corporation shall pay all United States federal,
state or local documentary, stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of New Shares
upon the conversion of Converted Shares pursuant to this Section
8.5, provided that this Corporation shall not be required to pay
any tax which may be payable in respect of any registration of
Transfer involved in the issue or delivery of New Shares in a
name other than that of the registered holder of shares converted
or to be converted, and no such issue or delivery shall be made
unless and until the person requesting such issue has paid to
this Corporation the amount of any such tax or has established,
to the satisfaction of this Corporation, that such tax has been
paid.
(iv) This Corporation shall at all times reserve and keep
available, out of the aggregate of its authorized but unissued
Series 3 FON Stock, Series 3 PCS Stock, Series 1 PCS Stock and
Series 1 FON Stock and its issued Series 1 FON Stock or Series 1
PCS Stock held in its treasury, for the purpose of effecting the
conversion of the Series 3 FON Stock, Series 1 FON Stock, Series
2 FON Stock, Series 3 PCS Stock, Series 2 PCS Stock, Series 1 PCS
Stock and Class A Common Stock contemplated hereby, the full
number of shares of Series 1 FON Stock or Series 1 PCS Stock then
deliverable upon the conversion of all outstanding shares of
Series 3 FON Stock, Series 3 PCS Stock and Class A Common Stock,
and the full number of shares of Series 3 FON Stock and Series 3
PCS Stock that would be deliverable upon conversion of all of the
shares of Series 1 FON Stock, Series 1 PCS Stock, Series 2 FON
Stock and Series 2 PCS Stock the Class A Holders are permitted to
acquire hereunder and under the Investment Agreement, the FT/DT
Restructuring Agreement, the Stockholders' Agreement and the
Standstill Agreement.
(v) Following conversion of all outstanding shares of Class A
Stock into shares of Series 1 FON Stock or Series 1 PCS Stock, as
the case may be, pursuant to this Section 8.5, this Corporation
shall not, directly or indirectly, issue, or sell from the
treasury, any shares of Class A Stock.
(k) Class A Stock Held by Qualified Stock Purchasers. (i) If
any Qualified Stock Purchaser shall become a Major Competitor of
this Corporation or of the Joint Venture, on the date the writing
referred to in the definition of Major Competitor in this ARTICLE
SIXTH is delivered to each Class A Holder, each share of Series 3
FON Stock and Series 3 PCS Stock, as the case may be, owned by a
Qualified Stock Purchaser shall automatically convert (without
the payment of any consideration) into one duly issued, fully
paid and nonassessable share of Series 1 FON Stock and Series 1
PCS Stock, respectively.
(ii) (A) Each outstanding share of Series 3 FON Stock and
Series 3 PCS Stock, as the case may be, owned by a Qualified
Stock Purchaser shall automatically convert (without the payment
of any consideration) into one duly issued, fully paid and
nonassessable share of Series 1 FON Stock and Series 1 PCS Stock,
respectively, if:
(v) such Qualified Stock Purchaser breaches in any material
respect its obligations under Section 2.4 of the Stockholders'
Agreement;
(w) such Qualified Stock Purchaser breaches in any material
respect its obligations under Article II (other than Section 2.4)
of the Stockholders' Agreement;
(x) such Qualified Stock Purchaser breaches any of the
provisions of Article 2 of the Qualified Stock Purchaser
Standstill Agreement;
(y) such Qualified Stock Purchaser breaches any of the
provisions of Section 3.1 or 3.2 of the Qualified Stock Purchaser
Standstill Agreement in a Control Context, or such Qualified
Stock Purchaser otherwise breaches Sections 3.1(a)(ii), (iii) or
(iv) or Section 3.1(g) of the Qualified Stock Purchaser
Standstill Agreement; or
(z) such Qualified Stock Purchaser breaches any of the
provisions of Sections 3.1 (except Section 3.1(a)(ii), (iii) or
(iv), or Section 3.1(g)) or 3.2 of the Qualified Stock Purchaser
Standstill Agreement, in each case other than in a Control
Context;
provided, that such Qualified Stock Purchaser shall deliver a
notice
(I) except with respect to a breach of the type described in
clause (y) above, in accordance with clauses (iii)(x) or (iv)(x)
below, in which case no conversion of the Class A Stock owned by
such Qualified Stock Purchaser shall take place unless such
breach fails to be cured within the time provided for cure in
such clause (iii) or (iv), as the case may be;
(II) in accordance with clauses (iii)(y), (iv)(y) or (v)
below, in which case no conversion of the Class A Stock owned by
such Qualified Stock Purchaser shall take place until there is
issued a final nonappealable decision or order of a court of
competent jurisdiction finding that such breach has occurred and,
if applicable, was not cured within the time provided for cure in
clauses (iii) or (iv) below, as the case may be; or
(III) admitting that such a breach has occurred, and (if
applicable) cannot be cured within the time periods provided for
cure in clauses (iii) or (iv) below, in which case each
outstanding share of Series 3 FON Stock and Series 3 PCS Stock,
as the case may be, owned by such Qualified Stock Purchaser shall
automatically convert (without the payment of any consideration)
into one duly issued, fully paid and nonassessable share of
Series 1 FON Stock and Series 1 PCS Stock, respectively upon
delivery of such notice; and
provided, further, that if such Qualified Stock Purchaser fails
to perform the actions described in clauses (I) or (II) above
within the time periods provided for performing such actions in
clauses (iii), (iv) or (v) below, it shall be deemed to have
taken the action described in clause (III) above.
(iii) For any alleged breach of the type described in clauses
(w), (x) or (z) of clause (ii) above, such Qualified Stock
Purchaser shall have the right, within five Business Days after
the date (for purposes of this clause (iii), the "Breach Notice
Date") that notice of such breach is delivered to such Qualified
Stock Purchaser by this Corporation, to deliver to this
Corporation a notice either:
(x) committing to effect a cure as soon as practical, in which
case such Qualified Stock Purchaser shall effect such cure as
soon as practical, but in no event later than the 20th Business
Day from the Breach Notice Date (or, with respect to an alleged
breach of clauses (w) or (x), if such cure cannot be effected
within such time period due to the anti-fraud rules of the U.S.
securities laws, such longer period as is reasonably necessary to
cure such breach in a manner consistent with such rules),
provided that
(I) such Qualified Stock Purchaser shall have no right to
cure unless such breach is susceptible to cure;
(II) such cure period shall continue only for so long as
such Qualified Stock Purchaser shall be undertaking to effect
such a cure in a diligent manner;
(III) with respect to an alleged breach of clause (ii)(x)
above, this Corporation shall have the right at any time after
the end of such 20-day period to purchase such number of shares
of Class A Stock as is necessary to return such Qualified Stock
Purchaser to the ownership level permitted by the Qualified Stock
Purchaser Standstill Agreement, at a price equal to the lower of
(A) the Market Price for such Shares at the time of such
redemption and (B) the price paid by such Qualified Stock
Purchaser for such Shares, provided that this Corporation may
only exercise such right if a majority of the Continuing
Directors shall have first approved, at a meeting at which at
least seven Continuing Directors are present, such a purchase of
Shares, unless a Fair Price Condition has been satisfied; and
(IV) withdrawal of the action alleged to have caused such
breach shall not, in and of itself, give rise to a presumption
that such breach has been cured; or
(y) disputing that such a breach has occurred, provided that
during such time as the most recent decision or order of a court
of competent jurisdiction is to the effect that such breach has
occurred and was not cured within the time provided for cure in
clause (x) of this clause (iii), the rights provided to such
Qualified Stock Purchaser under Sections 8.2 (except 8.2(a)(iii)
and 8.2(c)), 8.3, 8.4, 8.5 and 8.6 of ARTICLE SIXTH and the right
of such Qualified Stock Purchaser to elect members of the Board
of Directors as a holder of the Class A Stock under ARTICLE FIFTH
of these Articles of Incorporation shall be suspended and may not
be exercised by such Qualified Stock Purchaser.
(iv) For any alleged breach of the type described in clause
(ii)(v) above, such Qualified Stock Purchaser shall have the
right, within five Business Days after the date (for purposes of
this clause (iv), the "Breach Notice Date") that notice of such
breach is delivered to such Qualified Stock Purchaser by this
Corporation, to deliver to this Corporation a notice either:
(x) committing to effect a cure as soon as practical, in which
case such Qualified Stock Purchaser shall effect such cure as
soon as practical, but in no event later than the 20th Business
Day from the Breach Notice Date (or, if such cure cannot be
effected within such time period due to the anti-fraud rules of
the U.S. securities laws, such longer period as is reasonably
necessary to cure such breach in a manner consistent with such
rules), provided that
(I) such Qualified Stock Purchaser shall have no right to
cure unless such breach is susceptible to cure;
(II) such cure period shall continue only for so long as
such Qualified Stock Purchaser shall be undertaking to effect
such a cure in a diligent manner; and
(III) withdrawal of the action alleged to have caused such
breach shall not, in and of itself, give rise to a presumption
that such breach has been cured; or
(y) disputing that such a breach has occurred;
provided that, in each case, from the Breach Notice Date until
the earlier to occur of the cure of such breach and the issuance
of a decision or order of a court of competent jurisdiction
finding that such breach has not occurred or was cured within the
time provided for cure in clause (x) of this clause (iv), the
rights provided to such Qualified Stock Purchaser under Sections
8.2 (except 8.2(a)(iii) and 8.2(c)), 8.3, 8.4, 8.5 and 8.6 of
ARTICLE SIXTH and the right of such Qualified Stock Purchaser to
elect members of the Board of Directors as a holder of the Class
A Stock under ARTICLE FIFTH of these Articles of Incorporation
shall be suspended and may not be exercised by such Qualified
Stock Purchaser; and provided, further, that following such
decision or order, such rights shall be suspended during such
time as the most recent decision or order of a court of competent
jurisdiction is to the effect that such breach has occurred and
was not cured within the time provided for cure in clause (x) of
this clause (iv).
(v) For any alleged breach of the type described in clause
(ii)(y) above, such Qualified Stock Purchaser shall have the
right, within five Business Days after the date (for purposes of
this clause (v), the "Breach Notice Date") that notice of such
breach is delivered to such Qualified Stock Purchaser by this
Corporation, to deliver to this Corporation a notice disputing
that such a breach has occurred, provided that from the Breach
Notice Date until the issuance of a decision or order of a court
of competent jurisdiction finding that such breach has not
occurred, the rights provided to such Qualified Stock Purchaser
under Sections 8.2 (except 8.2(a)(iii) and 8.2(c)), 8.3, 8.4, 8.5
and 8.6 of ARTICLE SIXTH and the right of such Qualified Stock
Purchaser to elect members of the Board of Directors as a holder
of the Class A Stock under ARTICLE FIFTH of these Articles of
Incorporation shall be suspended and may not be exercised by such
Qualified Stock Purchaser and provided, further, that following
such decision or order, such rights shall be suspended during
such time as the most recent decision or order of a court of
competent jurisdiction is to the effect that such breach has
occurred.
(vi) For purposes of this Section 8.5(k), an alleged breach
shall be deemed to have occurred in a Control Context if the
action or actions alleged to have given rise to such breach were
taken in the context of efforts by such Qualified Stock Purchaser
or any other Person having the purpose or effect of changing or
influencing the control of this Corporation.
(vii) No conversion pursuant to this Section 8.5(k) shall be
considered an acquisition for purposes of Section 8.5(i) of
ARTICLE SIXTH.
(l) Effect of Conversion. Upon the conversion of all of the
shares of Class A Stock pursuant to this Section 8.5,
(A) each share of Series 3 FON Stock and Series 3 PCS Stock,
as the case may be, issued by this Corporation pursuant to the
Investment Agreement, the FT/DT Restructuring Agreement, the
Stockholders' Agreement or these Articles of Incorporation shall
automatically convert (without the payment of any consideration)
into one duly issued, fully paid and nonassessable share of
Series 1 FON Stock and Series 1 PCS Stock, respectively, and
(B) all (i) outstanding shares of Old Class A Common Stock
shall automatically convert (without the payment of any
consideration) into the number of duly issued, fully paid and
nonassessable shares of Series 1 FON Stock and Series 1 PCS Stock
equal to the Number Of Shares Issuable With Respect To The Old
Class A Equity Interest In The FON Group and the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group, respectively, represented by such shares of Old Class
A Common Stock, and (ii) outstanding shares of Class A Common
Stock-Series DT shall automatically convert (without the payment
of any consideration) into the number of duly issued, fully paid
and nonassessable shares of Series 1 FON Stock and Series 1 PCS
Stock equal to the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The FON Group and the Number
Of Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group, respectively, represented by such
shares of Class A Common Stock-Series DT;
provided that such conversion shall not be considered an
acquisition of Series 1 FON Stock or Series 1 PCS Stock, as the
case may be, for purposes of Section 8.5(i) of ARTICLE SIXTH.
(m) Exclusionary Tender Offer. If the Board of Directors
shall determine not to oppose a tender offer by a Person other
than FT, DT or any of their respective Affiliates for Voting
Securities of this Corporation representing not less than 35
percent of the Voting Power of this Corporation, and the terms of
such tender offer do not permit the Class A Holders to sell an
equal or greater percentage of:
(i) if the tender offer involves only Series 1 FON Stock,
Series 3 FON Stock (and Class A Common Stock to the extent it
represents Shares Issuable With Respect To The Class A Equity
Interest In The FON Group) as the holders of Series 1 FON Stock
are permitted to sell taking into account any proration,
(ii) if the tender offer involves only Series 1 PCS Stock,
Series 3 PCS Stock (and Class A Common Stock to the extent it
represents Shares Issuable With Respect To The Class A Equity
Interest In The PCS Group) as the holders of Series 1 PCS Stock
are permitted to sell taking into account any proration, or
(iii) if the tender offer involves both Series 1 FON Stock and
Series 1 PCS Stock, Series 3 FON Stock and Series 3 PCS Stock
(and Class A Common Stock to the extent it represents Shares
Issuable With Respect To The Class A Equity Interest In The FON
Group or Shares Issuable With Respect To The Class A Equity
Interest In The PCS Group) as the holders of Series 1 FON Stock
and Series 1 PCS Stock, respectively, are permitted to sell
taking into account any proration,
then all, but not less than all, of the Class A Holders shall
have the right (but not the obligation) to deliver to this
Corporation a written notice requesting conversion of certain
shares of Series 3 FON Stock or Series 3 PCS Stock (including
shares of Series 3 FON Stock or Series 3 PCS Stock issuable
pursuant to ARTICLE SIXTH, Sections 1.2(c) and 1.2(d)) designated
by the Class A Holders into Series 1 FON Stock or Series 1 PCS
Stock, respectively, upon which delivery each share of Series 3
FON Stock or Series 3 PCS Stock so designated in such notice
shall automatically convert (without the payment of any
consideration) into one duly issued, fully paid and nonassessable
share of Series 1 FON Stock or Series 1 PCS Stock, respectively,
provided that (i) conversion pursuant to this clause (m) shall
not be considered to be an acquisition of Series 1 FON Stock or
Series 1 PCS Stock for purposes of Section 8.5(i) of ARTICLE
SIXTH, (ii) unless the Series 3 FON Stock or Series 3 PCS Stock
shall have otherwise been converted into Series 1 FON Stock or
Series 1 PCS Stock, respectively, pursuant to Section 8.5 of
ARTICLE SIXTH upon or prior to the consummation or abandonment of
the transaction contemplated by such tender offer, immediately
following the consummation of such transaction or the delivery by
this Corporation to each Class A Holder of a notice that such
transaction has been abandoned, each share of Series 1 FON Stock
or Series 1 PCS Stock held by a Class A Holder shall
automatically reconvert (without the payment of any
consideration) into one duly issued, fully paid and nonassessable
share of Series 3 FON Stock or Series 3 PCS Stock, respectively;
and (iii) only those shares of Series 3 FON Stock or Series 3 PCS
Stock related to shares of Series 1 FON Stock or Series 1 PCS
Stock, respectively, that were not so reconverted shall be deemed
for any purpose under these Articles of Incorporation, the
Stockholders' Agreement, the Investment Agreement, the FT/DT
Restructuring Agreement, the Standstill Agreement, the
Registration Rights Agreement, or any agreement or document
related thereto to have been converted into Series 1 FON Stock or
Series 1 PCS Stock, respectively, pursuant to this Section 8.5(m)
and the Series 3 FON Stock or Series 3 PCS Stock so reconverted
shall be deemed to have been at all times outstanding shares of
Series 3 FON Stock or Series 3 PCS Stock, respectively.
8.6. Change of Control Procedures. As long as shares of
Class A Stock are outstanding, but subject to Sections 8.5(a),
(b), (f) and (k) of ARTICLE SIXTH, if this Corporation, directly
or indirectly, (a) determines to sell all or substantially all of
the assets of this Corporation, (b) determines not to oppose a
third-party tender, exchange or other purchase offer for Voting
Securities with a number of Votes in excess of 35 percent of the
Voting Power of this Corporation, (c) determines to effect a
merger or other business combination involving this Corporation
that would result in a Person (other than any Class A Holder)
holding Voting Securities of the resulting entity representing 35
percent or more of the Voting Power of such entity or (d)
otherwise determines to sell Control of this Corporation, this
Corporation shall conduct such transaction in accordance with
reasonable procedures to be determined by the Board of Directors,
and permit FT and DT to participate in that process on a basis no
less favorable than that granted any other participant.
8.7. Class Voting. Except as otherwise provided by law, in
Section 2(a) of ARTICLE FIFTH or in the Class A Provisions, the
Class A Holders shall not have, nor be entitled to, a class vote
with respect to any matter to be voted on by the stockholders of
this Corporation.
8.8. Amendment of Class A Provisions and ARTICLE FIFTH. The
Class A Provisions and Section 2(a)(iii) of ARTICLE FIFTH of
these Articles of Incorporation may be amended in any manner
which would not materially alter or change the powers,
preferences or rights of the holders of shares of Non-Class A
Common Stock or Preferred Stock so as to affect such powers,
preferences or rights adversely, by the Board of Directors of
this Corporation with the affirmative vote of only the holders of
at least two-thirds of the votes represented by the outstanding
shares of Class A Stock, voting together as a single class, and
without the affirmative vote of the holders of shares of the Non-
Class A Common Stock or the Preferred Stock. Upon the retirement
of shares of Class A Common Stock, (i) such shares shall not
resume the status of authorized and unissued shares of that
class, (ii) such shares shall not be reissued, and (iii) upon the
execution, acknowledgment and filing of a certificate in
accordance with Kan. Stat. Ann. Section 17-6003 and Section 17-6603 (or any
successor provisions) stating that the reissuance of such shares
is prohibited, identifying the shares and reciting their
retirement, then the filing of such certificate shall have the
effect of amending these Articles of Incorporation so as to
reduce accordingly the number of authorized shares of Class A
Common Stock or if such retired shares constitute all of the
authorized shares of such class, then the filing of such
certificate shall have the effect of amending these Articles of
Incorporation automatically so as to eliminate all references to
such class of stock therefrom.
Section 9. Application of the Provisions of ARTICLE SIXTH
9.1. Certain Determinations of the Board of Directors. In
addition to the determinations regarding Preferred Stock to be
made by the Board of Directors as provided by Section 13.6, the
Board of Directors shall make such determinations (i) with
respect to the assets and liabilities to be attributed to the
Business Groups (in accordance with the definitions of "PCS
Group" and "Sprint FON Group" set forth in ARTICLE SIXTH, Section
10), (ii) with respect to the application of the provisions of
this ARTICLE SIXTH to transactions to be engaged in by the
Corporation and (iii) as may be or become necessary or
appropriate to the exercise of the powers, preferences and
relative, participating, optional and other special rights of the
classes or series of Corporation Common Stock, including, without
limiting the foregoing, the determinations referred to in the
following paragraphs (A), (B), (C) and (D) of this Section 9.1. A
record of any such determination shall be filed with the
Secretary of the Corporation to be kept with the records of the
actions of the Board of Directors.
(A) Upon any acquisition by the Corporation or its
subsidiaries of any assets or business, or any assumption of
liabilities, outside of the ordinary course of business of the
Sprint FON Group or the PCS Group, as the case may be, the Board
of Directors shall determine whether such assets, business and
liabilities (or an interest therein) shall be for the benefit of
the Sprint FON Group or the PCS Group or that an interest therein
shall be partly for the benefit of the Sprint FON Group and
partly for the benefit of the PCS Group and, accordingly, shall
be attributed to the Sprint FON Group or the PCS Group, or partly
to each, in accordance with the definitions of "PCS Group,"
"Sprint FON Group," and "Number Of Shares Issuable With Respect
To The FON Group Intergroup Interest" set forth in Section 10 of
ARTICLE SIXTH.
(B) Upon any issuance of any shares of PCS Stock at a time
when the Number Of Shares Issuable With Respect To The FON Group
Intergroup Interest is more than zero, the Board of Directors
shall determine, based on the use of the proceeds of such
issuance and any other relevant factors, whether all or any part
of the shares of PCS Stock so issued should reduce the Number Of
Shares Issuable With Respect To The FON Group Intergroup Interest
and the Number Of Shares Issuable With Respect To The FON Group
Intergroup Interest shall be adjusted accordingly.
(C) Upon any issuance by the Corporation or any subsidiary
thereof of any Convertible Securities that are convertible into
or exchangeable or exercisable for shares of PCS Stock, if at the
time such Convertible Securities are issued the Number Of Shares
Issuable With Respect To The FON Group Intergroup Interest is
greater than zero, the Board of Directors shall determine
whether, upon conversion, exchange or exercise thereof, the
issuance of shares of PCS Stock pursuant thereto shall, in whole
or in part, reduce the Number Of Shares Issuable With Respect To
The FON Group Intergroup Interest, taking into consideration the
use of the proceeds of such issuance of Convertible Securities in
the business of the Sprint FON Group or the PCS Group and any
other relevant factors.
(D) Upon any redemption or repurchase by the Corporation or
any subsidiary thereof of shares of any Preferred Stock of any
class or series or of other securities or debt obligations of the
Corporation, if some of such shares, other securities or debt
obligations were attributed to the Sprint FON Group and some of
such shares, other securities or debt obligations were attributed
to the PCS Group, the Board of Directors shall determine which,
if any, of such shares, other securities or debt obligations
redeemed or repurchased shall be attributed to the Sprint FON
Group and which, if any, of such shares, other securities or debt
obligations shall be attributed to the PCS Group and,
accordingly, how many of the shares of such series of Preferred
Stock or of such other securities, or how much of such debt
obligations, that remain outstanding, if any, continue to be
attributed to the Sprint FON Group or to the PCS Group.
9.2. Sources of Dividends and Distributions; Uses of Proceeds
of Share Issuances. Notwithstanding the attribution of
properties or assets of the Corporation to the Sprint FON Group
or the PCS Group as provided in the definitions of such terms in
Section 10 of ARTICLE SIXTH, the Board of Directors (i) may cause
dividends or distributions or other payments to the holders of
any class of Corporation Common Stock or any class or series of
Preferred Stock to be made out of the properties or assets
attributed to any Business Group, subject, however, to any
contrary term of any series of Preferred Stock fixed in
accordance with Section 13 of ARTICLE SIXTH, and (ii) may cause
the proceeds of issuance of any shares of Non-Class A Stock or
Class A Stock or any class or series of Preferred Stock, to
whichever Business Group attributed in accordance with Section 13
of ARTICLE SIXTH, to be used in the business of, and to be
attributed to, either the Sprint FON Group or the PCS Group in
accordance with the definitions of "PCS Group," "Sprint FON
Group," and "Number Of Shares Issuable With Respect To The FON
Group Intergroup Interest" in Section 10 of ARTICLE SIXTH.
9.3. Certain Determinations Not Required. Notwithstanding
the foregoing provisions of this Section 9, the provisions of
Section 10 of ARTICLE SIXTH or any other provision of this
ARTICLE SIXTH, at any time when there are not outstanding both
(i) one or more shares of FON Stock (or Shares Issuable With
Respect To The Class A Equity Interest In The FON Group) or
Convertible Securities convertible into or exchangeable or
exercisable for FON Stock and (ii) one or more shares of PCS
Stock (or Shares Issuable With Respect To The Class A Equity
Interest In The PCS Group) or Convertible Securities convertible
into or exchangeable or exercisable for PCS Stock, the Board of
Directors need not (A) attribute any of the assets or liabilities
of the Corporation or any of its subsidiaries to the Sprint FON
Group or the PCS Group, (B) make any determination required in
connection therewith, or (C) make any of the determinations
otherwise required by this ARTICLE SIXTH, and in such
circumstances the holders of the shares of FON Stock or PCS Stock
outstanding, as the case may be, shall (unless otherwise
specifically provided by the Articles of Incorporation of the
Corporation) be entitled to all the voting powers, preferences,
optional or other special rights of such classes of Corporation
Common Stock without differentiation between the FON Stock and
the PCS Stock and any provision of this ARTICLE SIXTH to the
contrary shall no longer be in effect or operative and the Board
of Directors may cause the Articles of Incorporation of the
Corporation to be amended as permitted by law to delete such
provisions as are no longer operative or of further effect.
9.4. Emergency Use of Business Group Assets. Notwithstanding
the foregoing provisions of this Section 9 or any other provision
of ARTICLE SIXTH, the Board of Directors may transfer assets or
properties from one Business Group to another on such other basis
as the Board of Directors shall determine, consistent with its
fiduciary duties to the Corporation and the holders of all
classes and series of the Corporation's common stock, provided
that the Board of Directors determines (i) that such transfer on
such basis should be made to prevent or mitigate material adverse
consequences that would fundamentally affect the transferee
Business Group, (ii) that the benefit of such transfer on such
basis to the transferee Business Group is to materially exceed
any adverse effect of such transfer to the transferor Business
Group, and (iii) that such transfer on such basis is in the best
interest of the Corporation as a whole after giving fair
consideration to the potentially divergent interests of the
holders of the separate classes of Corporation Common Stock.
9.5. Board Determinations Binding. Subject to applicable
law, any determinations made in good faith by the Board of
Directors of the Corporation under any provision of this Section
9 or otherwise in furtherance of the application of this ARTICLE
SIXTH shall be final and binding on all stockholders.
Section 10. Definitions. For purposes of ARTICLE FIFTH and
ARTICLE SIXTH of these Articles of Incorporation, the following
terms have the following meanings (with terms defined in the
singular having comparable meaning when used in the plural and
vice versa), unless the context otherwise requires. As used in
this Section 10, a "contribution" or "transfer" of assets or
properties from one Business Group to another refers to the
reattribution of such assets or properties from the contributing
or transferring Business Group to the other Business Group and
correlative phrases have correlative meanings.
"Affiliate" means, with respect to any Person, any other
Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common
Control with, such Person, provided that (a) no JV Entity shall
be deemed an Affiliate of any Class A Holder or this Corporation
unless (i) FT, DT and Atlas own a majority of the Voting Power of
such JV Entity and this Corporation does not have the Tie-
Breaking Vote (as defined in Section 18.1 of the Joint Venture
Agreement), or (ii) FT, DT or Atlas has the Tie-Breaking Vote;
(b) FT, DT and this Corporation shall not be deemed Affiliates of
each other; (c) Atlas shall be deemed an Affiliate of FT and DT;
and (d) the term "Affiliate" shall not include any Governmental
Authority of France or Germany or any other Person Controlled,
directly or indirectly, by any such Governmental Authority except
in each case for FT, DT, Atlas and any other Person directly, or
indirectly through one or more intermediaries, Controlled by FT,
DT or Atlas.
"Alien" means "aliens," "their representatives," "a foreign
government or representatives thereof" or "any corporation
organized under the laws of a foreign country" as such terms are
used in Section 310(b)(4) of the Communications Act of 1934, as
amended, or as hereafter may be amended, or any successor
provision of law.
"Applicable Law" has the meaning set forth in the
Stockholders Agreement.
"Associate" has the meaning ascribed to such term in Rule 12b-
2 under the Exchange Act, provided that when used to indicate a
relationship with FT or DT or their respective Subsidiaries or
Affiliates, the term "Associate" means (a) in the case of FT, any
Person occupying any of the positions listed on Schedule A to the
Stockholders' Agreement and (b) in the case of DT, any Person
occupying any of the positions listed on Schedule B to the
Stockholders' Agreement, provided, further, that, in each case,
no Person occupying any such position described in clause (a) or
(b) hereof shall be deemed an "Associate" of FT or DT, as the
case may be, unless the Persons occupying all such positions
described in clauses (a) and (b) hereof Beneficially Own, in the
aggregate, more than 0.2% of the Voting Power of the Corporation.
"Atlas" means the company formed as a societe anonyme under
the laws of Belgium pursuant to the Joint Venture Agreement,
dated as of December 15, 1994, between FT and DT, as amended.
"Average Trading Price" of a share of any class or series of
capital stock of the Corporation on any day means the average
Closing Price of such capital stock determined over the 20
Trading Days immediately preceding the date of such
determination; provided that for purposes of this definition
only, in determining the "Closing Price" of a share of any class
or series of capital stock for such 20 Trading Day period, (i)
the "Closing Price" of a share of capital stock on any day prior
to any "ex-dividend" date or any similar date occurring during
such period for any dividend or distribution (other than any
dividend or distribution contemplated by clause (ii)(B) of this
definition) paid or to be paid with respect to such capital stock
shall be reduced by the Fair Value of the per share amount of
such dividend or distribution and (ii) the "Closing Price" of any
share of capital stock on any day prior to (A) the effective date
of any subdivision (by stock split or otherwise) or combination
(by reverse stock split or otherwise) of outstanding shares of
such class of capital stock occurring during such period or (B)
any "ex-dividend" date or any similar date occurring during such
period for any dividend or distribution with respect to such
capital stock to be made in shares of such class or series of
capital stock or Convertible Securities that are convertible,
exchangeable or exercisable for such class or series of capital
stock, shall be appropriately adjusted, as determined by the
Board of Directors, to reflect such subdivision, combination,
dividend or distribution.
"Beneficial Owner" (including, with its correlative meanings,
"Beneficially Own" and "Beneficial Ownership"), with respect to
any securities, means any Person which:
(a) has, or any of whose Affiliates or Associates has,
directly or indirectly, the right to acquire (whether such right
is exercisable immediately or only after the passage of time)
such securities pursuant to any agreement, arrangement or
understanding (whether or not in writing), including, without
limitation, pursuant to the FT/DT Restructuring Agreement and the
Stockholders' Agreement, or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise;
(b) has, or any of whose Affiliates or Associates has,
directly or indirectly, the right to vote or dispose of (whether
such right is exercisable immediately or only after the passage
of time) or has "beneficial ownership" of (as determined pursuant
to Rule 13d-3 under the Exchange Act but including all such
securities which a Person has the right to acquire beneficial
ownership of whether or not such right is exercisable within the
60-day period specified therein) such securities, including
pursuant to any agreement, arrangement or understanding (whether
or not in writing); or
(c) has, or any of whose Affiliates or Associates has, any
agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or
disposing of any securities which are Beneficially Owned,
directly or indirectly, by any other Person (or any Affiliate
thereof),
provided that (i) Class A Stock, Non-Class A Common Stock and
Preferred Stock held by one of FT or DT or its Affiliates or
Associates shall not also be deemed to be Beneficially Owned by
the other of FT or DT or its Affiliates or Associates, (ii) FON
Stock and PCS Stock shall not be deemed to be Beneficially Owned
by FT, DT or their Affiliates or Associates by virtue of the top
up rights and standby commitments granted under the Purchase
Rights Agreement (as defined in the FT/DT Restructuring
Agreement) except to the extent that FT, DT or their Affiliates
or Associates have (A) acquired shares of FON Stock or PCS Stock
pursuant to the Purchase Rights Agreement, or (B) become
irrevocably committed to acquire, and the Cable Holders have
become irrevocably committed to sell, shares of FON Stock or PCS
Stock pursuant to the Purchase Rights Agreement (with such
Beneficial Ownership being determined on a full-voting basis),
subject only to customary closing conditions, if any; (iii) FT,
DT and their Affiliates and Associates shall not be deemed to
Beneficially Own any incremental Voting Power resulting solely
from the increase in Voting Power provided for by the application
of ARTICLE SIXTH, Section 7.5(d) and (iv) prior to the conversion
thereof (other than during the 90-day period following the
Conversion Trigger Date set forth in ARTICLE SIXTH, Section
7.5(a)), a holder of Series 2 PCS Stock or Series 2 FON Stock
shall not be deemed to beneficially own the shares of Series 1
PCS Stock or Series 1 FON Stock issuable upon conversion thereof.
"Board of Directors" means the board of directors of this
Corporation.
"Business Day" means any day other than a day on which
commercial banks in The City of New York, Paris, France, or
Frankfurt am Main, Germany, are required or authorized by law to
be closed.
"Business Group" means, as of any date, the Sprint FON Group
or the PCS Group, as the case may be.
"Bylaws" means the Bylaws of this Corporation as amended or
supplemented from time to time.
"Cable Holder" means any of
(i) Tele-Communications, Inc., a Delaware corporation, Comcast
Corporation, a Pennsylvania corporation, or Cox Communications,
Inc., a Delaware corporation,
(ii) any Affiliate of an entity identified in clause (i) of
this definition,
(iii) any successor (by operation of law or otherwise) of an
entity identified in clauses (i) or (ii) of this definition so
long as such successor remains an Affiliate of an entity
identified in clause (i) or (ii),
(iv) any entity controlled by two or more entities identified
in clauses (i) through (iii) of this definition or this clause
(iv) even if such entity is not considered an Affiliate of any
individual entity so identified and
(v) for purposes of ARTICLE SIXTH, Section 7.5(b) only, with
respect to any Transfer of shares of Series 2 PCS Stock, the
transferee of such shares if (A) at the time of such Transfer,
the transferor was a Cable Holder under any of the clauses (i)
through (iv) of this definition, (B) after giving effect to such
Transfer, the transferee was an Associate of the transferor, (C)
immediately prior to such Transfer, the transferee was identified
in writing by the transferor as a "Cable Holder" under this
clause (v), and (D) the transferor and transferee satisfied the
conditions set forth in Section 2.4 of the applicable Cable
Holder Standstill Agreements.
"Cable Holder Standstill Agreements" means the Standstill
Agreements, dated as of May 26, 1998, entered into between this
Corporation and each of certain Cable Holders, and any Standstill
Agreements in the form thereof entered into from time to time
between this Corporation and certain transferee Affiliates and
Associates of such Cable Holders.
"Cellular and Wireless Division" means the former Cellular and
Wireless Communications Services Division of this Corporation.
"Change of Control" means a:
(a) decision by the Board of Directors to sell Control of this
Corporation or not to oppose a third party tender offer for
Voting Securities of this Corporation representing more than 35%
of the Voting Power of this Corporation; or
(b) change in the identity of a majority of the Directors due
to (i) a proxy contest (or the threat to engage in a proxy
contest) or the election of Directors by the holders of Preferred
Stock; or (ii) any unsolicited tender, exchange or other purchase
offer which has not been approved by a majority of the
Independent Directors,
provided that a Strategic Merger shall not be deemed to be a
Change of Control and provided, further, that any transaction
between this Corporation and FT and DT or otherwise involving FT
and DT and any of their direct or indirect Subsidiaries which are
party to a Contract therefor shall not be deemed to be a Change
of Control.
"Class A Action" means action by the holders of a majority of
the Votes represented by the Class A Stock taken by a vote at
either a regular or special meeting of the stockholders of this
Corporation or of the holders of the Class A Stock or by written
consent delivered to the Secretary of this Corporation.
"Class A Common Stock" means the Old Class A Common Stock and
the Class A Common Stock-Series DT.
"Class A Common Stock-Series DT" has the meaning set forth in
the "Designation" column in Section 1 of ARTICLE SIXTH.
"Class A Director" means any Director elected by the Class A
Holders pursuant to Sections 2(a) or 4(b) of ARTICLE FIFTH of
these Articles of Incorporation or appointed by Class A Directors
pursuant to Section 4(b) of ARTICLE FIFTH of these Articles of
Incorporation.
"Class A FON Shares" means, with respect to FT, shares of
Series 3 FON Stock and the Number Of Shares Issuable With Respect
To The Old Class A Equity Interest In The FON Group, and, with
respect to DT, shares of Series 3 FON Stock and the Number Of
Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The FON Group.
"Class A Holders" means (a) the holders of the Class A Stock,
and (b) any Qualified Stock Purchaser who has executed with this
Corporation a Qualified Stock Purchaser Assumption Agreement (as
such term is defined in the Stockholders' Agreement), for so long
as such Person holds Class A Stock.
"Class A PCS Shares" means, with respect to FT, shares of
Series 3 PCS Stock and the Number Of Shares Issuable With Respect
To The Old Class A Equity Interest In The PCS Group and, with
respect to DT, shares of Series 3 PCS Stock and the Number Of
Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group.
"Class A Provisions" means Section 5 (but only with respect to
those provisions addressing the Class A Stock), Section 6 (but
only with respect to those provisions addressing the Class A
Stock), Section 8, Section 9 (but only with respect to those
provisions addressing the Class A Stock), Section 10, Section 11
and Section 12 of ARTICLE SIXTH.
"Class A-Series DT FON Vote Per Share" means, on any date, a
number equal to X?Y, where "X" equals the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The FON Group and "Y" equals the aggregate number of outstanding
shares of Class A Common Stock-Series DT.
"Class A-Series DT PCS Interest Fraction," as of any date,
means the fraction the numerator of which shall be the Number Of
Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group on such date and the denominator of
which shall be the sum of (i) the number of shares of PCS Stock
outstanding on such date, (ii) the Number Of Shares Issuable With
Respect To The FON Group Intergroup Interest on such date, (iii)
the Number Of Shares Issuable With Respect To The Old Class A
Equity Interest In The PCS Group on such date and (iv) the Number
Of Shares Issuable With Respect To The Class A-Series DT Equity
Interest In The PCS Group on such date.
"Class A-Series DT PCS Vote Per Share" means, on any date, a
number equal to (X?Y) x Z, where "X" equals the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The PCS Group, "Y" equals the aggregate number of outstanding
shares of Class A Common Stock-Series DT and "Z" equals, in the
case of ARTICLE SIXTH, Section 3.2(d), one, and in all other
cases, the applicable PCS Per Share Vote on such date.
"Class A Stock" means the Class A Common Stock, the Series 3
FON Stock and the Series 3 PCS Stock.
"Closing Price" means, with respect to a security on any day,
the last sale price, regular way, or in case no such sale takes
place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on The New York Stock
Exchange, Inc. or, if such security is not listed or admitted to
trading on such exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
on which the security is listed or admitted to trading or, if the
security is not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotations System or such
other system then in use, or, if on any such date such security
is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional
market maker making a market in the security selected in good
faith by the Board of Directors. If the security is not publicly
held or so listed or publicly traded, "Closing Price" means the
Fair Market Value of such security.
"Committed Percentage" means, as to any Class A Holder, the
percentage obtained by dividing the aggregate number of Votes
represented or to be represented by the Voting Securities of this
Corporation (a) owned of record by such Class A Holder or by its
nominees; and (b) which such Class A Holder has committed to this
Corporation to purchase pursuant to Articles V and VI or Sections
7.3 and 7.8 of the Stockholders Agreement (but not pursuant to
the FT/DT Restructuring Agreement until such shares are acquired
pursuant to such agreement), by the sum of (i) the Voting Power
of this Corporation, and (ii) the Votes to be represented by any
Voting Securities of this Corporation such Class A Holder has
committed to this Corporation to purchase from this Corporation
pursuant to Articles V or VI or Section 7.3 of the Stockholders'
Agreement (but not pursuant to the FT/DT Restructuring Agreement
until such shares are acquired pursuant to such agreement).
"Continuing Director" has the meaning set forth in the Fair
Price Provisions.
"Contract" means any loan or credit agreement, note, bond,
indenture, mortgage, deed of trust, lease, franchise, contract,
or other agreement, obligation, instrument or binding commitment
of any nature.
"Control" means, with respect to a Person or Group, any of the
following:
(a) ownership by such Person or Group of Votes entitling it to
exercise in the aggregate more than 35 percent of the Voting
Power of the entity in question; or
(b) possession by such Person or Group of the power, directly
or indirectly, (i) to elect a majority of the board of directors
(or equivalent governing body) of the entity in question; or (ii)
to direct or cause the direction of the management and policies
of or with respect to the entity in question, whether through
ownership of securities, by contract or otherwise.
"Conversion Date" means the date fixed by the Board of
Directors as the effective date for the conversion of shares of
PCS Stock into shares of FON Stock (and Shares Issuable With
Respect To The Class A Equity Interest In The PCS Group into
Shares Issuable With Respect To The Class A Equity Interest In
The FON Group) as shall be set forth in the notice to holders of
shares of PCS Stock and to holders of any Convertible Securities
that are convertible into or exchangeable or exercisable for
shares of PCS Stock required pursuant to Section 7.4(E).
"Conversion Time" has the meaning set forth in Section 8.5(j)
of ARTICLE SIXTH.
"Converted Series Shares has the meaning set forth in Section
7.5(c) of ARTICLE SIXTH.
"Converted Shares" has the meaning set forth in Section 8.5(j)
of ARTICLE SIXTH.
"Converted Votes" means, on any particular day, (i) in the
case of a share of Series 2 PCS Stock, the applicable PCS Per
Share Vote a share of Series 1 PCS Stock would have had if the
computation described in Section 3.2(a)(iii) had occurred on such
day and (ii) in the case of a share of Series 2 FON Stock, one
vote per share.
"Convertible Securities" at any time means any securities of
the Corporation or of any subsidiary thereof (other than shares
of Corporation Common Stock), including warrants and options,
outstanding at such time that by their terms are convertible into
or exchangeable or exercisable for or evidence the right to
acquire any shares of any class or series of Corporation Common
Stock, whether convertible, exchangeable or exercisable at such
time or a later time or only upon the occurrence of certain
events, pursuant to antidilution provisions of such securities or
otherwise.
"Core Businesses" means all businesses in the fields of
telecommunications and information technology and applications,
and equipment, software applications and consumer and business
services related thereto or making use of the technology thereof,
including value-added consumer and business services generated
through or as a result of underlying telecommunications services
using all technology (voice, data and image) and physical
transport, network intelligence, and software applications, and
cable television (but not including any programming or content-
related activities with respect thereto).
"Corporation Common Stock" means the Series 1 FON Stock, the
Series 2 FON Stock, the Series 3 FON Stock, the Class A Common
Stock, the Series 1 PCS Stock, the Series 2 PCS Stock and the
Series 3 PCS Stock.
"Corporation Joint Venture Termination" means any of the
following:
(a) the sale of Venture Interests by a Sprint Party pursuant
to Section 20.5(a) of the Joint Venture Agreement; or
(b) the receipt by the FT/DT Parties of the Tie-Breaking Vote
due to a Funding Default, Material Non-Funding Default or
Bankruptcy (as such terms are defined in the Joint Venture
Agreement) on the part of any of the Sprint Parties.
"Director" means a member of the Board of Directors.
"Disposition" means a sale, transfer, assignment or other
disposition (whether by merger, consolidation, sale or
contribution of assets or stock or otherwise) of properties or
assets.
"DT" means Deutsche Telekom AG, an Aktiengesellschaft formed
under the laws of Germany.
"Effective Date" means the date on which these Amended and
Restated Articles of Incorporation become effective.
"ESMR" means any commercial mobile radio service, and the
resale of such service, of the type authorized under the rules
for Specialized Mobile Radio Services designated under Subpart S
of Part 90 of the FCC's rules or similar Applicable Laws of any
other country in effect on the date hereof, including the
networking, marketing, distribution, sales, customer interface
and operations functions relating thereto.
"Europe" means the current geographic area covered by the
following countries and territories located on the European
continent, plus, in the case of France, its territories and
possessions located outside the European continent: Albania,
Andorra, Austria, Belgium, Bosnia-Herzegovina, Bulgaria, Croatia,
Cyprus, Czech Republic, Denmark, Estonia, Finland, France,
Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Italy,
Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta,
Monaco, Montenegro, Netherlands, Norway, Poland, Portugal,
Romania, San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, Ukraine, United Kingdom, and Vatican City.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the United States
Securities and Exchange Commission promulgated thereunder.
"Exempt Asset Divestitures" means, with respect to this
Corporation and its Subsidiaries:
(a) Transfers of assets, shares or other equity interests
(other than Long Distance Assets) to joint ventures approved by
FT and DT prior to January 31, 1996;
(b) Transfers of assets, shares or other equity interests
(other than Long Distance Assets) to (i) any entity in exchange
for equity interests in such entity if, after such transaction,
this Corporation owns at least 51 percent of both the Voting
Power and equity interests in such entity or (ii) any joint
venture that is an operating joint venture not controlled by any
of its principals and in which (x) this Corporation has the
right, acting alone, to disapprove (and thereby prohibit)
decisions relating to acquisitions and divestitures involving
more than 20 percent of the Fair Market Value of such entity's
assets, mergers, consolidations and dissolution or liquidation of
such entity and the adoption of such entity's business plan, and
(y) Major Competitors of the Joint Venture do not in the
aggregate own more than 20 percent of the equity interests or
Voting Power;
(c) transactions in which this Corporation exchanges one or
more (i) local exchange telephone businesses for one or more such
businesses or (ii) public cellular or wireless radio
telecommunications service systems for one or more such systems,
provided that this Corporation shall not, directly or
indirectly, receive cash in any such transaction in an amount
greater than 20 percent of the Fair Market Value of the property
or properties Transferred by it;
(d) Transfers of assets, shares or other equity interests
(other than Long Distance Assets) by this Corporation to any of
its Subsidiaries, or by any of its Subsidiaries to this
Corporation or any other Subsidiary of this Corporation;
(e) any Spin-off of equity interests of a wholly-owned
Subsidiary that is not a Subsidiary which, directly or
indirectly, owns Long Distance Assets (for purposes of this
definition, the "Spun-off Entity"), provided that the Class A
Holders receive securities in the Spun-off Entity of a separate
class with rights no less favorable to the Class A Holders than
those applicable to the Class A Stock set forth in these Articles
of Incorporation and the Bylaws;
(f) Transfers of assets (other than Long Distance Assets) of
this Corporation or any of its Subsidiaries that are primarily or
exclusively used in connection with providing information
technology or data processing functions or services
(collectively, for purposes of this definition, the "IT Assets")
to any Person that regularly provides information technology or
data processing functions or services on a commercial basis, in
connection with a contractual arrangement (for purposes of this
definition, an "IT Service Contract") pursuant to which such
Person undertakes to provide information technology or data
processing functions or services to this Corporation or any of
its Subsidiaries of substantially the same nature as the services
associated with the use of such assets prior to such Transfer and
upon commercially reasonable terms to this Corporation as
determined in good faith by this Corporation, provided that (i)
the term of such IT Service Contract shall be for a period at
least as long as the weighted average useful life of such assets,
or this Corporation or such Subsidiary shall have the right to
cause such IT Service Contract to be renewed or extended for a
period at least as long as such weighted average useful life upon
commercially reasonable terms to this Corporation as determined
in good faith by this Corporation, and (ii) the Transfer of such
assets will not materially and adversely affect the operation of
this Corporation; or
(g) Transfers of assets (other than Long Distance Assets or IT
Assets) of this Corporation or any of its Subsidiaries to any
Person in connection with any contractual arrangement (for
purposes of this definition, a "Non-IT Service Contract")
pursuant to which such Person undertakes to provide services to
this Corporation or any of its Subsidiaries of substantially the
same nature as the services associated with the use of such
assets prior to such Transfer and upon commercially reasonable
terms to this Corporation as determined in good faith by this
Corporation, provided, that (i) the Fair Market Value of such
assets, together with the Fair Market Value of assets of this
Corporation Transferred to such Person or other Persons in
related transactions, do not represent more than five percent of
the Fair Market Value of the assets of this Corporation, (ii) the
Transfer of such assets will not materially and adversely affect
the operation of this Corporation, and (iii) the term of such Non-
IT Service Contract shall be for a period at least as long as the
weighted average useful life of the assets so Transferred or this
Corporation or such Subsidiary has the right to cause such Non-IT
Service Contract to be renewed or extended for a period at least
as long as such weighted average useful life upon commercially
reasonable terms to this Corporation as determined in good faith
by this Corporation.
"Exempt Long Distance Asset Divestitures" means, with respect
to this Corporation and its Subsidiaries:
(a) Transfers of Long Distance Assets to a Qualified Joint
Venture;
(b) Transfers of Long Distance Assets to any entity if this
Corporation and its Subsidiaries after such transaction own at
least 70 percent of both the Voting Power and equity interests of
such entity, provided that if a Major Competitor of FT or DT or
of the Joint Venture holds equity interests in such entity, such
Major Competitor's equity interests and Votes in such entity as a
percentage of the Voting Power of such entity shall not, directly
or indirectly, exceed 20 percent;
(c) Transfers of Long Distance Assets pursuant to an
underwritten, widely-distributed public offering at the
conclusion of which this Corporation and its Subsidiaries shall
own at least 51 percent of both the Voting Power and equity
interests in the entity that owns such Long Distance Assets;
(d) Transfers in the ordinary course of business of Long
Distance Assets determined by this Corporation to be unnecessary
for the orderly operation of this Corporation's business, and
sale-leasebacks of Long Distance Assets and similar financing
transactions after which this Corporation and its Subsidiaries
continue in possession and control of the Long Distance Assets
involved in such transaction;
(e) Transfers of Long Distance Assets by this Corporation to
any of its Subsidiaries, or by any of its Subsidiaries to this
Corporation or any other Subsidiary of this Corporation;
(f) Transfers of Long Distance Assets to FT or DT or any
assignee thereof pursuant to the Stockholders' Agreement;
(g) any Spin-off of equity interests of a wholly-owned
Subsidiary which, directly or indirectly, owns Long Distance
Assets (for purposes of this definition, the "Spun-off Entity"),
provided that the Class A Holders receive securities in the Spun-
off Entity of a separate class with rights no less favorable to
the Class A Holders than those applicable to the Class A Stock
set forth in these Articles of Incorporation and the Bylaws;
(h) Transfers of Long Distance Assets of this Corporation or
any of its Subsidiaries that are primarily or exclusively used in
connection with providing information technology or data
processing functions or services (collectively, for purposes of
this definition, the "IT Assets") to any Person that regularly
provides information technology or data processing functions or
services on a commercial basis, in connection with a contractual
arrangement (for purposes of this definition, an "IT Service
Contract") pursuant to which such Person undertakes to provide
information technology or data processing functions or services
to this Corporation or any of its Subsidiaries of substantially
the same nature as the services associated with the use of such
Long Distance Assets prior to such Transfer and upon commercially
reasonable terms to this Corporation as determined in good faith
by this Corporation, provided that (i) the term of such IT
Service Contract shall be for a period at least as long as the
weighted average useful life of such Long Distance Assets, or
this Corporation or such Subsidiary shall have the right to cause
such IT Service Contract to be renewed or extended for a period
at least as long as such weighted average useful life upon
commercially reasonable terms to this Corporation as determined
in good faith by this Corporation, and (ii) the Transfer of such
Long Distance Assets will not materially and adversely affect the
operation of the Long Distance Business. Any such IT Service
Contract involving Transfers of Long Distance Assets, including
any renewal or extension thereof, shall be deemed to be a Long
Distance Asset; or
(i) Transfers of Long Distance Assets (other than IT Assets)
of this Corporation or any of its Subsidiaries to any Person in
connection with any contractual arrangement (for purposes of this
definition, a "Non-IT Service Contract") pursuant to which such
Person undertakes to provide services to this Corporation or any
of its Subsidiaries of substantially the same nature as the
services associated with the use of such Long Distance Assets
prior to such Transfer and upon commercially reasonable terms to
this Corporation as determined in good faith by this Corporation,
provided, that (i) the Fair Market Value of such Long Distance
Assets, together with the Fair Market Value of Long Distance
Assets Transferred to such Person or other Persons in related
transactions, do not represent more than three percent of the
Fair Market Value of the Long Distance Assets of this
Corporation, (ii) the Transfer of such Long Distance Assets will
not materially and adversely affect the operation of the Long
Distance Business, and (iii) the term of such Non-IT Service
Contract shall be for a period at least as long as the weighted
average useful life of the Long Distance Assets so Transferred or
this Corporation or such Subsidiary has the right to cause such
Service Contract to be renewed or extended for a period at least
as long as such weighted average useful life upon commercially
reasonable terms to this Corporation as determined in good faith
by this Corporation. Any such Non-IT Service Contract involving
Transfers of Long Distance Assets, including any renewal or
extension thereof, shall be deemed to be a Long Distance Asset.
"Extraordinary Dividend" means, with respect to capital stock
of this Corporation, a cash dividend or other cash distribution,
other than (a) a regular periodic dividend payable in cash; or
(b) a dividend payable in accordance with the terms of the
Preferred Stock.
"Fair Market Value" means, with respect to any asset, shares
or other property, the cash price at which a willing seller would
sell and a willing buyer would buy such asset, shares or other
property in an arm's-length negotiated transaction without undue
time restraints, as determined in good faith by a majority of the
Independent Directors as certified in a resolution delivered to
all of the Class A Holders.
"Fair Price Condition" has the meaning set forth in Section
2.2 of ARTICLE SIXTH.
"Fair Price Provisions" means ARTICLE SEVENTH of these
Articles of Incorporation, and any successor provision thereto.
"Fair Value" means, in the case of equity securities or debt
securities of a class that has previously been Publicly Traded
for a period of at least 15 months, the Market Value thereof (if
such value, as so defined, can be determined) or, in the case of
an equity security or debt security that has not been Publicly
Traded for at least such period, means the fair value per share
of stock or per other unit of such other security, on a fully
distributed basis, as determined by an independent investment
banking firm experienced in the valuation of securities selected
in good faith by the Board of Directors; provided, however, that
in the case of property other than securities, the "Fair Value"
thereof shall be determined in good faith by the Board of
Directors based upon such appraisals or valuation reports of such
independent experts as the Board of Directors shall in good faith
determine to be appropriate in accordance with good business
practice. Any such determination of Fair Value shall be described
in a statement filed with the records of the actions of the Board
of Directors.
"FCC" means the Federal Communications Commission.
"FCC Order" means, with respect to any proposed Transfer of
Long Distance Assets by this Corporation, either:
(a) an effective written order or other final action from the
FCC (either in the first instance or upon review or
reconsideration) either declaring that FT and DT are not
prohibited by Section 310 from owning such Long Distance Assets
or stating that no such declaration is required, and as to which
no Proceeding shall be pending or threatened that presents a
substantial possibility of resulting in a reversal thereof; or
(b) an effective written order from, or other final action
taken by, the FCC pursuant to delegated authority (either in the
first instance or upon review or reconsideration) either
declaring that FT and DT are not prohibited by Section 310 from
owning such Long Distance Assets, or stating that no such
declaration is required, which order or final action shall no
longer be subject to further administrative review, and as to
which no Proceeding shall be pending or threatened that presents
a substantial possibility of resulting in a reversal thereof; For
purposes of clause (b) of this definition, an order from, or
other final action taken by, the FCC pursuant to delegated
authority shall be deemed no longer subject to further
administrative review:
(x) if no petition for reconsideration or application for
review by the FCC of such order or final action has been filed
within thirty days after the date of public notice of such order
or final action, as such 30-day period is computed and as such
date is defined in Sections 1.104 and 1.4 (or any successor
provisions), as applicable, of the FCC's rules, and the FCC has
not initiated review of such order or final action on its own
motion within forty days after the date of public notice of the
order or final action, as such 40-day period is computed and such
date is defined in Sections 1.117 and 1.4 (or any successor
provisions) of the FCC's rules; or
(y) if any such petition for reconsideration or application
for review has been filed, or, if the FCC has initiated review of
such order or final action on its own motion, the FCC has issued
an effective written order or taken final action to the effect
set forth in clause (a) above.
"FON Group Intergroup Interest Fraction" as of any date means
a fraction the numerator of which is the Number Of Shares
Issuable With Respect To The FON Group Intergroup Interest on
such date and the denominator of which is the sum of (A) such
Number Of Shares Issuable With Respect To The FON Group
Intergroup Interest, (B) the aggregate number of shares of PCS
Stock outstanding on such date, (iii) the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group on such date and (iv) the Number Of Shares Issuable
With Respect To The Class A-Series DT Equity Interest In The PCS
Group on such date. A statement setting forth the FON Group
Intergroup Interest Fraction as of the record date for any
dividend or distribution on the PCS Stock, as of the end of each
fiscal quarter of the Corporation and as of any date otherwise
required under these Articles of Incorporation or by the Board of
Directors shall be filed by the Secretary of the Corporation in
the records of the Board of Directors of the Corporation not
later than fifteen Business Days after such date.
"FON Preferred Stock" means Preferred Stock to the extent
attributed to the Sprint FON Group in accordance with ARTICLE
SIXTH, Section 13.
"FON Stock" means the Series 1 FON Stock, the Series 2 FON
Stock and the Series 3 FON Stock.
"France" means the Republic of France, including French
Guiana, Guadeloupe, Martinique and Reunion, and its territories
and possessions.
"FT" means France Telecom SA, a societe anonyme formed under
the laws of France.
"FT/DT Joint Venture Termination" means any of the following:
(a) the sale of Venture Interests by an FT/DT Party pursuant
to Section 20.5(b), 20.5(c) or 20.5(d) of the Joint Venture
Agreement; or
(b) the receipt by the Sprint Parties of the Tie-Breaking Vote
due to a Funding Default, Material Non-Funding Default or
Bankruptcy (as such terms are defined in the Joint Venture
Agreement) on the part of any of the FT/DT Parties.
"FT/DT Party" has the meaning set forth in the Joint Venture
Agreement.
"FT/DT Restructuring Agreement" means the Master Restructuring
and Investment Agreement, dated as of May 26, 1998, among FT, DT
and this Corporation, as amended or supplemented from time to
time.
"Germany" means the Federal Republic of Germany.
"Governmental Authority" means any federation, nation, state,
sovereign, or government, any federal, supranational, regional,
state or local political subdivision, any governmental or
administrative body, instrumentality, department or agency or any
court, tribunal, administrative hearing body, arbitration panel,
commission or other similar dispute resolving panel or body, and
any other entity exercising executive, legislative, judicial,
regulatory or administrative functions of a government, provided
that the term "Governmental Authority" shall not include FT, DT,
Atlas or any of their respective Subsidiaries.
"Group" means any group within the meaning of Section 13(d)(3)
of the Exchange Act.
"Independent Director" means any member of the Board of
Directors who (a) is not an officer or employee of this
Corporation, or any Class A Holder, or any of their respective
Subsidiaries, (b) is not a former officer of this Corporation, or
any Class A Holder, or any of their respective Subsidiaries, (c)
does not, in addition to such person's role as a Director, act on
a regular basis, either individually or as a member or
representative of an organization, serving as a professional
adviser, legal counsel or consultant to this Corporation, or any
Class A Holder, or their respective Subsidiaries, if, in the
opinion of the Nominating Committee of the Board of Directors of
this Corporation (the "Nominating Committee") or the Board of
Directors if a Nominating Committee is not in existence, such
relationship is material to this Corporation, any Class A Holder,
or the organization so represented or such person, and (d) does
not represent, and is not a member of the immediate family of, a
person who would not satisfy the requirements of the preceding
clauses (a), (b) and (c) of this sentence. A person who has been
or is a partner, officer or director of an organization that has
customary commercial, industrial, banking or underwriting
relationships with this Corporation, any Class A Holder, or any
of their respective Subsidiaries, that are carried on in the
ordinary course of business on an arms-length basis and who
otherwise satisfies the requirements set forth in clauses (a),
(b), (c) and (d) of the first sentence of this definition, may
qualify as an Independent Director, unless, in the opinion of the
Nominating Committee or the Board of Directors if a Nominating
Committee is not in existence, such person is not independent of
the management of this Corporation, or any Class A Holder, or any
of their respective Subsidiaries, or the relationship would
interfere with the exercise of independent judgment as a member
of the Board of Directors. A person who otherwise satisfies the
requirements set forth in clauses (a), (b), (c) and (d) of the
first sentence of this definition and who, in addition to
fulfilling the customary director's role, also provides
additional services directly for the Board of Directors and is
separately compensated therefor, would nonetheless qualify as an
Independent Director. Notwithstanding anything to the contrary
contained in this definition, each Director as of the date of the
execution of the Investment Agreement who is not an executive
officer of this Corporation shall be deemed to be an Independent
Director hereunder.
"Investment Agreement" means the Investment Agreement, dated
as of July 31, 1995, among FT, DT and this Corporation (and all
exhibits and schedules thereto), as amended or supplemented from
time to time.
"Investment Documents" means the FT/DT Restructuring Agreement
and the Stockholders' Agreement.
"Joint Venture" means the joint venture formed by FT, DT, this
Corporation and Sprint Sub, as provided in the Joint Venture
Agreement.
"Joint Venture Agreement" means the Joint Venture Agreement,
dated as of June 22, 1995 among FT, DT, Sprint Sub, and this
Corporation, as amended or supplemented from time to time.
"JV Entity" has the meaning set forth in the Joint Venture
Agreement.
"Lien" means any mortgage, pledge, security interest, adverse
claim, encumbrance, lien (statutory or otherwise) or charge of
any kind (including any agreement to give any of the foregoing,
any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code or
similar Applicable Law of any jurisdiction) or any other type of
preferential arrangement for the purpose, or having the effect,
of protecting a creditor against loss or securing the payment or
performance of an obligation.
"Lien Transfer" means the granting of any Lien on any Long
Distance Asset, other than:
(a) a Lien securing purchase money indebtedness that does not
have a term longer than the estimated useful life of such Long
Distance Asset;
(b) Liens or other comparable arrangements relating to the
financing of accounts receivable; and
(c) Liens securing any other indebtedness for borrowed money,
provided that (i) the amount of such indebtedness, when added to
the aggregate amount of purchase money indebtedness referred to
in clause (a) above, does not exceed 30% of the total book value
of the Long Distance Assets as at the date of the most recently
published balance sheet of this Corporation, (ii) the
indebtedness secured by such Liens is secured only by Liens on
Long Distance Assets, (iii) the face amount of such indebtedness
does not exceed the book value of the Long Distance Assets
subject to such Liens, and (iv) such indebtedness is for a term
no longer than the estimated useful life of the Long Distance
Assets subject to such Liens.
"Local Exchange Division" means the Local Communications
Services Division of this Corporation.
"Long Distance Assets" means:
(a) the assets reflected in this Corporation's balance sheet
for the year ended December 31, 1994 as included in the Long
Distance Division;
(b) any assets acquired by this Corporation or any of its
Subsidiaries following December 31, 1994 that are reflected in
this Corporation's balance sheet as included in the Long Distance
Division;
(c) any assets of this Corporation or any of its Subsidiaries
that are not reflected in this Corporation's balance sheet for
the year ended December 31, 1994 as included in the Long Distance
Division, which after December 31, 1994 are transferred by this
Corporation or any of its Subsidiaries to, or reclassified by
this Corporation or any of its Subsidiaries as part of, the Long
Distance Division;
(d) any assets acquired by this Corporation after December 31,
1994 that are used or held for use primarily for the benefit of
the Long Distance Business; and
(e) any assets referred to in clauses (a) through (c) above
that are used or held for use primarily for the benefit of the
Long Distance Business which are transferred or reclassified by
this Corporation or any of its Subsidiaries outside of the Long
Distance Division, but which continue to be owned by this
Corporation or any of its Subsidiaries;
provided that the term "Long Distance Assets" shall not include
(i) any assets that are used or held for use primarily for the
benefit of any Non-Long Distance Business, or (ii) any other
assets reflected in this Corporation's balance sheet for the year
ended December 31, 1994 as included in the Cellular and Wireless
Division or the Local Exchange Division (other than as such
assets in the Cellular and Wireless Division or the Local
Exchange Division may be transferred or reclassified in
accordance with paragraph (c) of this definition).
"Long Distance Business" means all long distance
telecommunications activities and services of this Corporation
and its Subsidiaries at the relevant time, including (but not
limited to) all long distance transport services, switching and
value-added services for voice, data, video and multimedia
transmission, migration paths and intelligent overlapping
architectures, provided that the term "Long Distance Business"
shall not include any activities or services primarily related to
any Non-Long Distance Business.
"Long Distance Division" means the Long Distance
Communications Services Division of this Corporation.
"Major Competitor" means (a) with respect to FT or DT, a
Person that materially competes with a major portion of the
telecommunications services business of FT or DT in Europe or a
Person that 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 competitor in the near future
in France or Germany, provided that FT and/or DT furnish in
writing to this Corporation reasonable evidence of the occurrence
of such steps; (b) with respect to this Corporation, a Person
that materially competes with a major portion of the
telecommunications services business of this Corporation in North
America, or a Person that has taken substantial steps to become
such a Major Competitor and which this Corporation has reasonably
concluded, in its good faith judgment, will be such a competitor
in the near future in the United States of America provided that
this Corporation furnish in writing to each Class A Holder
reasonable evidence of the occurrence of such steps; and (c) with
respect to the Joint Venture, a Person that materially competes
with a major portion of the telecommunications services business
of the Joint Venture, or a Person that has taken substantial
steps to become such a Major Competitor and which FT, DT or this
Corporation has reasonably concluded, in its good faith judgment,
will be such a competitor in the near future, provided that FT,
DT or this Corporation furnish in writing to the other two of
them reasonable evidence of the occurrence of such steps.
"Major Competitor Transaction" has the meaning set forth in
ARTICLE SIXTH, Section 8.4.
"Major Issuance" means any transaction, including, but not
limited to, a merger or business combination, resulting, directly
or indirectly, in the issuance (or sale from treasury) in
connection with such transaction of Voting Securities of this
Corporation with a number of Votes equal to or greater than 30
percent of the Voting Power of this Corporation immediately prior
to such issuance.
"Market Capitalization" means, with respect to this
Corporation at any date, the sum of the average Market Price over
the immediately preceding 20 Business Days of each share of
outstanding capital stock of this Corporation, securities
convertible into such capital stock and options, warrants or
other rights to acquire such capital stock.
"Market Price" means with respect to a security on any date,
the Closing Price of such security on the Trading Day immediately
prior to such date. The Market Price shall be deemed to be equal
to, (i) in the case of a share of Series 3 FON Stock or Series 2
FON Stock, as the case may be, the Market Price of a share of
Series 1 FON Stock and (ii) in the case of a share of Series 3
PCS Stock or Series 2 PCS Stock, as the case may be, the Market
Price of a share of Series 1 PCS Stock. The Market Price of (x)
any options, warrants, rights or other securities convertible
into or exercisable for Series 3 FON Stock or Series 2 FON Stock
shall be equal to the Market Price of options, warrants, rights
or other securities convertible into or exercisable for Series 1
FON Stock upon the same terms and otherwise containing the same
terms as such options, warrants, rights or other securities
convertible into or exercisable for Series 3 FON Stock or Series
2 FON Stock, as the case may be, and (y) any options, warrants,
rights or other securities convertible into or exercisable for
Series 3 PCS Stock or Series 2 PCS Stock, as the case may be,
shall be equal to the Market Price of options, warrants, rights
or other securities convertible into or exercisable for Series 1
PCS Stock upon the same terms and otherwise containing the same
terms as such options, warrants, rights or other securities
convertible into or exercisable for Series 3 PCS Stock or Series
2 PCS Stock, as the case may be.
"Market Value" of a share of any class or series of capital
stock of the Corporation on any day means the average of the high
and low reported sales prices regular way of a share of such
class or series on such day (if such day is a Trading Day, and if
such day is not a Trading Day, on the Trading Day immediately
preceding such day) or, in case no such reported sale takes place
on such Trading Day, the average of the reported closing bid and
asked prices regular way of a share of such class or series on
such Trading Day, in either case as reported on the New York
Stock Exchange Composite Tape or, if the shares of such class or
series are not listed or admitted to trading on such Exchange on
such Trading Day, on the principal national securities exchange
in the United States on which the shares of such class or series
are listed or admitted to trading or, if not listed or admitted
to trading on any national securities exchange on such Trading
Day, on the National Market tier of The Nasdaq Stock Market or,
if the shares of such class or series are not listed or admitted
to trading on any national securities exchange or quoted on such
National Market System on such Trading Day, the average of the
closing bid and asked prices of a share of such class or series
in the over-the-counter market on such Trading Day as furnished
by any New York Stock Exchange member firm selected from time to
time by the Board of Directors or, if such closing bid and asked
prices are not made available by any such New York Stock Exchange
member firm on such Trading Day, the Fair Value of a share of
such class or series; provided that, for purposes of determining
the Market Value of a share of any class or series of capital
stock for any period,
(i) the "Market Value" of a share of capital stock on any day
prior to any "ex-dividend" date or any similar date occurring
during such period for any dividend or distribution (other than
any dividend or distribution contemplated by clause (ii)(B) of
this definition) paid or to be paid with respect to such capital
stock shall be reduced by the Fair Value of the per share amount
of such dividend or distribution and
(ii) the "Market Value" of any share of capital stock on any
day prior to (A) the effective date of any subdivision (by stock
split or otherwise) or combination (by reverse stock split or
otherwise) of outstanding shares of such class of capital stock
occurring during such period or (B) any "ex-dividend" date or any
similar date occurring during such period for any dividend or
distribution with respect to such capital stock to be made in
shares of such class or series of capital stock or Convertible
Securities that are convertible, exchangeable or exercisable for
such class or series of capital stock shall be appropriately
adjusted, as determined by the Board of Directors, to reflect
such subdivision, combination, dividend or distribution.
"Net Proceeds" means, as of any date with respect to any
Disposition of any of the properties and assets attributed to the
PCS Group, an amount, if any, equal to what remains of the gross
proceeds of such Disposition after payment of, or reasonable
provision is made as determined by the Board of Directors for,
(A) any taxes payable by the Corporation (or which would have
been payable but for the utilization of tax benefits attributable
to the Sprint FON Group) in respect of such Disposition or in
respect of any resulting dividend or redemption pursuant to
ARTICLE SIXTH, Section 7.1(A)(1)(a) or (b), (B) any transaction
costs, including, without limitation, any legal, investment
banking and accounting fees and expenses and (C) any liabilities
(contingent or otherwise) of or attributed to the PCS Group,
including, without limitation, any liabilities for deferred taxes
or any indemnity or guarantee obligations of the Corporation
incurred in connection with the Disposition or otherwise, and any
liabilities for future purchase price adjustments and any
preferential amounts plus any accumulated and unpaid dividends in
respect of Preferred Stock attributed to the PCS Group. For
purposes of this definition, any properties and assets attributed
to the PCS Group remaining after such Disposition shall
constitute "reasonable provision" for such amount of taxes, costs
and liabilities (contingent or otherwise) as the Board of
Directors determines can be expected to be supported by such
properties and assets.
"Non-Class A Common Stock" means the Series 1 FON Stock, the
Series 2 FON Stock, the Series 1 PCS Stock and the Series 2 PCS
Stock.
"Non-Long Distance Business" means (a) the ownership of any
equity or other interests in the Joint Venture or any of the JV
Entities; the enforcement or performance of any of the rights or
obligations of this Corporation or any Subsidiary of this
Corporation pursuant to the Joint Venture Agreement; or any
activities or services of the Joint Venture or any of the JV
Entities; (b) the interests, assets, properties and businesses
attributed to the PCS Group in accordance with this Section 10;
(c) any activities or services primarily related to the provision
of subscriber connections to a local exchange or switch providing
access to the public switched telephone network; (d) any
activities or services primarily related to the provision of
exchange access services for the purpose of originating or
terminating long distance telecommunications services; (e) any
activities or services primarily related to the resale by the
Local Exchange Division of long distance telecommunications
services of this Corporation or other carriers; (f) any
activities or services primarily related to the provision of
inter-LATA long distance telecommunications services that are
incidental to the local exchange services business of the Local
Exchange Division; (g) any activities or services primarily
related to the provision of intra-LATA long distance
telecommunications services; (h) any activities or services
(whether local, intra-LATA or inter-LATA) primarily related to
the provision of cellular, PCS, ESMR or paging services, mobile
telecommunications services or any other voice, data or
voice/data wireless services, whether fixed or mobile, or related
to telecommunications services provided through communications
satellite systems (whether low, medium or high orbit systems);
and (i) the use of the "Sprint" brand name or any other brand
names, trade names or trademarks owned or licensed by this
Corporation or any of its Subsidiaries.
"North America" means the current geographic area covered by
the following countries: Canada, Mexico and the United States of
America.
"Number Of Shares Issuable With Respect To The Class A-Series
DT Equity Interest In The FON Group" means, as of the Effective
Date, a number equal to the aggregate number of outstanding
shares of Class A Common Stock-Series DT as of the Effective
Date; provided, however, that such number shall from time to time
thereafter be:
(A) adjusted, on an equivalent Per Class A FON Share Basis, to
reflect any subdivision (by stock split or otherwise) or
combination (by reverse stock split or otherwise) of the FON
Stock or any reclassification of FON Stock; and
(B) decreased (but to not less than zero), if before such
decrease such number is greater than zero, by the number of
shares of Series 1 FON Stock or Series 3 FON Stock issued in
accordance with ARTICLE SIXTH, Section 1.2(d) and any reduction
required to reflect the redemption of Shares Issuable With
Respect To The Class A Equity Interest In The FON Group pursuant
to Section 2.2 to the extent allocated to shares of Class A
Common Stock-Series DT; and
(C) adjusted by the Board of Directors to properly reflect any
other necessary changes on an equivalent Per Class A FON Share
Basis.
"Number Of Shares Issuable With Respect To The Class A-Series
DT Equity Interest In The PCS Group" means, as of the Effective
Date, a number (rounded up to the nearest whole share) equal to
one-half of the aggregate number of outstanding shares of Class A
Common Stock-Series DT as of the Effective Date; provided,
however, that such number shall from time to time thereafter be:
(A) adjusted, on an equivalent Per Class A PCS Share Basis, to
reflect any subdivision (by stock split or otherwise) or
combination (by reverse stock split or otherwise) of the PCS
Stock or any reclassification of PCS Stock; and
(B) decreased (but to not less than zero), if before such
decrease such number is greater than zero, by action of the Board
of Directors by (1) the amount of any payment made to the holders
of Class A Common Stock-Series DT pursuant to Section 7.1(B)(5)
or Section 7.1(B)(6) divided by the corresponding redemption
price per share of PCS Stock pursuant to Section 7.1(A)(1)(b)(i)
or Section 7.1(A)(1)(b)(ii), (2) any reduction required to
reflect the redemption of Shares Issuable With Respect To The
Class A Equity Interest In The PCS Group pursuant to Section 2.2
to the extent allocated to shares of Class A Common Stock-Series
DT, (3) the amount necessary to reflect the conversion of some or
all of this number into a Number Of Shares Issuable With Respect
To The Class A-Series DT Equity Interest In The FON Group in
accordance with Sections 7.1(B)(7), 7.1(C) and 7.1(D), and (4)
the amount necessary to reflect the redemption thereof in
exchange for the issuance of shares of common stock of the PCS
Group Subsidiary in accordance with Section 7.2; and
(C) decreased (but to not less than zero), if before such
decrease such number is greater than zero, by the number of
shares of Series 1 PCS Stock or Series 3 PCS Stock issued by the
Corporation in accordance with ARTICLE SIXTH, Section 1.2(d); and
(D) adjusted by the Board of Directors to properly reflect any
other necessary changes on an equivalent Per Class A PCS Share
Basis.
"Number Of Shares Issuable With Respect To The FON Group
Intergroup Interest" means, as of the Effective Date, a number
equal to 220,000,000 less the sum of (i) the Number Of Shares
Issuable With Respect To The Old Class A Common Equity Interest
In The PCS Group, (ii) the Number Of Shares Issuable With Respect
To The Class A-Series DT Equity Interest In The PCS Group, (iii)
one-half of the number of shares of Common Stock, par value $2.50
per share, outstanding immediately prior to the Effective Date,
and (iv) one-half of the number of shares of Common Stock, par
value $2.50 per share, held as treasury shares by the Corporation
immediately prior to the Effective Date; provided, however, that
such number shall from time to time thereafter be:
(A) adjusted, as determined by the Board of Directors to be
appropriate to reflect equitably any subdivision (by stock split
or otherwise) or combination (by reverse stock split or
otherwise) of the PCS Stock or any dividend or other distribution
of shares of PCS Stock to holders of shares of PCS Stock or any
reclassification of PCS Stock;
(B) decreased (but to not less than zero), if before such
decrease such number is greater than zero, by action of the Board
of Directors by (1) the number of shares of PCS Stock issued or
sold by the Corporation that, immediately prior to such issuance
or sale, were included (as determined by the Board of Directors
pursuant to paragraph (C) of this definition) in the Number Of
Shares Issuable With Respect To The FON Group Intergroup
Interest, (2) the number of shares of PCS Stock issued upon
conversion, exchange or exercise of Convertible Securities that,
immediately prior to the issuance or sale of such Convertible
Securities, were included in the Number Of Shares Issuable With
Respect To The FON Group Intergroup Interest, (3) the number of
shares of PCS Stock issued by the Corporation as a dividend or
other distribution (including in connection with any
reclassification or exchange of shares) to holders of FON Stock
and Class A Common Stock (but only with respect to any Shares
Issuable With Respect To The Class A Equity Interest In The FON
Group) or shares of FON Preferred Stock, as the case may be, (4)
the number of shares of PCS Stock issued upon the conversion,
exchange or exercise of any Convertible Securities issued by the
Corporation as a dividend or other distribution (including in
connection with any reclassification or exchange of shares) to
holders of FON Stock or Class A Common Stock (but only with
respect to any Shares Issuable With Respect To The Class A Equity
Interest In The FON Group) or shares of FON Preferred Stock, as
the case may be, (5) the quotient of (a) the aggregate Fair Value
of any PCS Preferred Stock (or Convertible Securities convertible
into or exchangeable or exercisable for shares of PCS Preferred
Stock) issued by the Corporation as a dividend or other
distribution (including in connection with any classification or
exchange of shares) to holders of FON Stock, Class A Common Stock
(but only with respect to any Shares Issuable With Respect To The
Class A Equity Interest In The FON Group), or shares of FON
Preferred Stock, as the case may be, divided by (b) the Market
Value of one share of PCS Stock as of the date of issuance of
such PCS Preferred Stock (or Convertible Securities), or (6) the
number (rounded, if necessary, to the nearest whole number) equal
to the quotient of (a) the aggregate Fair Value as of the date of
contribution of properties or assets (including cash) transferred
from the PCS Group to the Sprint FON Group in consideration for a
reduction in the Number Of Shares Issuable With Respect To The
FON Group Intergroup Interest divided by (b) the Market Value of
one share of PCS Stock as of the date of such transfer; and
(C) increased by (1) the number of outstanding shares of PCS
Stock repurchased by the Corporation for consideration that had
been attributed to the Sprint FON Group, (2) the number (rounded,
if necessary, to the nearest whole number) equal to the quotient
of (a) the Fair Value of properties or assets (including cash)
theretofore attributed to the Sprint FON Group that are
contributed, by action of the Board of Directors, to the PCS
Group in consideration of an increase in the Number Of Shares
Issuable With Respect To The FON Group Intergroup Interest,
divided by (b) the Market Value of one share of PCS Stock as of
the date of such contribution and (3) the number of shares of PCS
Stock into or for which Convertible Securities are deemed
converted, exchanged or exercised pursuant to the penultimate
sentence of the definition of "Sprint FON Group";
provided, further, that the Board of Directors may make such
subsequent changes to the calculations made pursuant to
subparagraphs (A), (B) and (C) immediately above as may be
required for purposes of accurately determining such number.
"Number Of Shares Issuable With Respect To The Old Class A
Equity Interest In The FON Group" means, as of the Effective
Date, a number equal to the aggregate number of outstanding
shares of Old Class A Common Stock as of the Effective Date;
provided, however, that such number shall from time to time
thereafter be:
(A) adjusted, on an equivalent Per Class A FON Share Basis, to
reflect any subdivision (by stock split or otherwise) or
combination (by reverse stock split or otherwise) of the FON
Stock or any reclassification of FON Stock; and
(B) decreased (but to not less than zero), if before such
decrease such number is greater than zero, by the number of
Shares of Series 1 FON Stock or Series 3 FON Stock issued in
accordance with ARTICLE SIXTH, Section 1.2(c) and any reduction
required to reflect the redemption of Shares Issuable With
Respect To The Class A Equity Interest In The FON Group pursuant
to Section 2.2 to the extent allocated to shares of Old Class A
Common Stock; and
(C) adjusted by the Board of Directors to properly reflect any
other necessary changes on an equivalent Per Class A FON Share
Basis.
"Number Of Shares Issuable With Respect To The Old Class A
Equity Interest In The PCS Group" means, as of the Effective
Date, a number (rounded up to the nearest whole share) equal to
one-half of the aggregate number of outstanding shares of Old
Class A Common Stock as of the Effective Date; provided, however,
that such number shall from time to time thereafter be:
(A) adjusted, on an equivalent Per Class A PCS Share Basis, to
reflect any subdivision (by stock split or otherwise) or
combination (by reverse stock split or otherwise) of the PCS
Stock or any reclassification of PCS Stock; and
(B) decreased (but to not less than zero), if before such
decrease such number is greater than zero, by action of the Board
of Directors by (1) the amount of any payment made to the holders
of Old Class A Common Stock pursuant to Section 7.1(B)(5) or
Section 7.1(B)(6) divided by the corresponding redemption price
per share of PCS Stock pursuant to Section 7.1(A)(1)(b)(i) or
Section 7.1(A)(1)(b)(ii), (2) any reduction required to reflect
the redemption of Shares Issuable With Respect To The Class A
Equity Interest In The PCS Group pursuant to Section 2.2 to the
extent allocated to shares of Old Class A Common Stock, (3) the
amount necessary to reflect the conversion of some or all of this
number into a Number Of Shares Issuable With Respect To The Old
Class A Equity Interest In The FON Group in accordance with
Sections 7.1(B)(7), 7.1(C) and 7.1(D), and (4) the amount
necessary to reflect the redemption thereof in exchange for the
issuance of shares of common stock of the PCS Group Subsidiary in
accordance with Section 7.2; and
(C) decreased (but to not less than zero), if before such
decrease such number is greater than zero, by the number of
shares of Series 1 PCS Stock or Series 3 PCS Stock issued by the
Corporation in accordance with ARTICLE SIXTH, Section 1.2(c); and
(D) adjusted by the Board of Directors to properly reflect any
other necessary changes on an equivalent Per Class A PCS Share
Basis.
"Old Class A Common Stock" has the meaning set forth in the
"Designation" column in Section 1 of ARTICLE SIXTH.
"Old Class A FON Vote Per Share" means, on any date, a number
equal to X? Y, where "X" equals the Number Of Shares Issuable
With Respect To The Old Class A Equity Interest In The FON Group
and "Y" equals the aggregate number of outstanding shares of Old
Class A Common Stock.
"Old Class A PCS Interest Fraction," as of any date, means the
fraction the numerator of which shall be the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group on such date and the denominator of which shall be the
sum of (i) the number of shares of PCS Stock outstanding on such
date, (ii) the Number Of Shares Issuable With Respect To The FON
Group Intergroup Interest on such date, (iii) the Number Of
Shares Issuable With Respect To The Old Class A Equity Interest
In The PCS Group on such date and (iv) the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The PCS Group on such date.
"Old Class A PCS Vote Per Share" means, on any date, a number
equal to (X? Y) x Z, where "X" equals the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group, "Y" equals the aggregate number of outstanding shares
of Old Class A Common Stock and "Z" equals, in the case of
ARTICLE SIXTH, Section 3.2(d), one, and in all other cases, the
applicable PCS Per Share Vote on such date.
"Optional Conversion Ratio" as of any date means the ratio of
the Average Trading Price of a share of Series 1 PCS Stock to the
Average Trading Price of a share of Series 1 FON Stock; provided,
that such ratio would be determined over a 60-Trading Day period
if the 20-Trading Day period normally used to determine the
Average Trading Price is less than 90% of such ratio as
determined over a 60-Trading Day period.
"Outstanding PCS Fraction," as of any date, means the fraction
the numerator of which shall be the number of shares of PCS Stock
outstanding on such date and the denominator of which shall be
the sum of (i) the number of shares of PCS Stock outstanding on
such date, (ii) the Number Of Shares Issuable With Respect To The
FON Group Intergroup Interest on such date, (iii) the Number Of
Shares Issuable With Respect To The Old Class A Equity Interest
In The PCS Group on such date and (iv) the Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The PCS Group on such date. A statement setting forth the
Outstanding PCS Fraction as of the record date for the payment of
any dividend or distribution on PCS Stock and as of the end of
each fiscal quarter of the Corporation shall be filed by the
Secretary of the Corporation in the records of the actions of the
Board of Directors not later than fifteen Business Days after
such date.
"PCS" means a radio communications system of the type
authorized under the rules for broadband personal communications
services designated as Subpart E of Part 24 of the FCC's rules or
similar Applicable Laws of any other country, including the
network, marketing, distribution, sales, customer interface and
operations functions relating thereto.
"PCS Group" means, as of any date from and after the Effective
Date:
(A) the interest on such date of the Corporation and any of
its subsidiaries in any of the following Persons or any of their
respective subsidiaries (including any successor thereto by
merger, consolidation or sale of all or substantially all of its
assets, whether or not in connection with a Related Business
Transaction) (the "PCS Group Companies") and the corresponding
interests in their respective assets and liabilities and the
businesses conducted by such entities: SWV Six, Inc. (fka TCI
Spectrum Holdings, Inc.); SWV One, Inc. (fka Com Telephony
Services, Inc.); SWV Two, Inc. (fka Comcast Telephony Services,
Inc.); SWV Three, Inc. (fka Cox Telephony Partners, Inc.); SWV
Four, Inc. (fka Cox Communications Wireless, Inc.); Comcast
Telephony Services; Cox Telephony Partnership; Sprint
Enterprises, L.P.; MinorCo, L.P.; Sprint Spectrum Holding
Company, L.P.; American PCS, L.P.; Cox Communications PCS, L.P.;
NewTelco, L.P.; Sprint Spectrum L.P.; American Personal
Communications Holdings, Inc.; American PCS Communications, LLC;
APC PCS, LLC; APC Realty and Equipment Company, LLC; Sprint
Spectrum Finance Corporation; Sprint Spectrum Equipment Company,
L.P.; Sprint Spectrum Realty Company, L.P.; WirelessCo, L.P.; SWV
Five, Inc. (fka TCI Philadelphia Holdings, Inc.); PhillieCo
Partners I, L.P.; PhillieCo Partners II, L.P.; PhillieCo Sub,
L.P.; PhillieCo., L.P.; PhillieCo Equipment & Realty Company,
L.P.; SprintCom, Inc.; SprintCom Equipment Company L.P.; PCS
Leasing Co., L.P.; Cox PCS Assets, L.L.C.; and Cox PCS License,
L.L.C.;
(B) all assets and liabilities of the Corporation and its
subsidiaries attributed by the Board of Directors to the PCS
Group, whether or not such assets or liabilities are or were also
assets or liabilities of any of the PCS Group Companies;
(C) all properties and assets transferred to the PCS Group
from the Sprint FON Group (other than a transaction pursuant to
paragraph (D) of this definition) after the Effective Date
pursuant to transactions in the ordinary course of business of
both the Sprint FON Group and the PCS Group or otherwise as the
Board of Directors may have directed as permitted by this ARTICLE
SIXTH;
(D) all properties and assets transferred to the PCS Group
from the Sprint FON Group in connection with an increase in the
Number Of Shares Issuable With Respect To The FON Group
Intergroup Interest; and
(E) the interest of the Corporation or any of its subsidiaries
in any business or asset acquired and any liabilities assumed by
the Corporation or any of its subsidiaries outside of the
ordinary course of business and attributed to the PCS Group, as
determined by the Board of Directors as contemplated by Section
9.1(A) of ARTICLE SIXTH; provided that
(1) from and after the payment date of any dividend or other
distribution with respect to shares of PCS Stock (other than a
dividend or other distribution payable in shares of PCS Stock,
with respect to which adjustment shall be made as provided in the
definition of "Number Of Shares Issuable In Respect Of The FON
Group Intergroup Interest," or in securities of the Corporation
attributed to the PCS Group, for which provision shall be made as
set forth in clause (2) of this proviso), the PCS Group shall no
longer include an amount of assets or properties previously
attributed to the PCS Group of the same kind as so paid in such
dividend or other distribution with respect of shares of PCS
Stock as have a Fair Value on the record date for such dividend
or distribution equal to the product of (a) the Fair Value on
such record date of the aggregate of such dividend or
distribution to holders of shares of PCS Stock declared
multiplied by (b) a fraction the numerator of which is equal to
the FON Group Intergroup Interest Fraction in effect on the
record date for such dividend or distribution and the denominator
of which is equal to the Outstanding PCS Fraction in effect on
the record date for such dividend or distribution (and in such
eventuality such assets as are no longer included in the PCS
Group shall be attributed to the Sprint FON Group in accordance
with the definition of "Sprint FON Group"), and
(2) if the Corporation shall pay a dividend or make some other
distribution with respect to shares of PCS Stock payable in
securities of the Corporation that are attributed to the PCS
Group for purposes of this ARTICLE SIXTH (other than PCS Stock),
there shall be excluded from the PCS Group an interest in the PCS
Group equivalent to the number or amount of such securities that
is equal to the product of the number or amount of securities so
distributed to holders of PCS Stock multiplied by the fraction
specified in clause 1(b) of this proviso (determined as of the
record date for such distribution) (and such interest in the PCS
Group shall be attributed to the Sprint FON Group) and, to the
extent interest is or dividends are paid on the securities so
distributed, the PCS Group shall no longer include a
corresponding ratable amount of the kind of assets paid as such
interest or dividends as would have been paid in respect of the
securities equivalent to such interest in the PCS Group deemed
held by the Sprint FON Group if the securities equivalent to such
interest were outstanding (and in such eventuality such assets as
are no longer included in the PCS Group shall be attributed to
the Sprint FON Group in accordance with the definition of "Sprint
FON Group").
The Corporation may also, to the extent a dividend or
distribution on the PCS Stock has been paid in Convertible
Securities that are convertible into or exchangeable or
exercisable for PCS Stock, cause such Convertible Securities as
are deemed to be held by the Sprint FON Group in accordance with
the third-to-last sentence of the definition of "Sprint FON
Group" and clause (2) of the proviso to the immediately preceding
sentence to be deemed to be converted, exchanged or exercised as
provided in the penultimate sentence of the definition of "Sprint
FON Group," in which case such Convertible Securities shall no
longer be deemed to be held by the Sprint FON Group.
"PCS Group Disposition Date" has the meaning set forth in
Section 7.1(A) of ARTICLE SIXTH.
"PCS Group Subsidiary" has the meaning set forth in Section
7.2 of ARTICLE SIXTH.
"PCS IPO" means the initial primary underwritten public
offering of Series 1 PCS Stock conducted by the Corporation.
"PCS IPO Price" means the initial price per share at which
shares of Series 1 PCS Stock are purchased by the public in the
PCS IPO.
"PCS IPO Pricing Date" means the date on which the PCS IPO
Price is determined.
"PCS Per Share Vote" has the meaning set forth in Section 3.2
of ARTICLE SIXTH.
"PCS Preferred Stock" means Preferred Stock to the extent
attributed to the PCS Group in accordance with ARTICLE SIXTH,
Section 13.
"PCS Ratio" means the ratio of the Average Trading Price of
one share of Series 1 PCS Stock to the Average Trading Price of
one share of Series 1 FON Stock determined, in each such case, as
of the 21st Trading Day following the commencement of regular way
trading of both the Series 1 PCS Stock and the Series 1 FON
Stock, provided that for purposes of any vote of stockholders of
the Corporation for which the record date for determining the
stockholders entitled to vote occurs prior to such 21st Trading
Day, such ratio will be determined by the Board of Directors
based on the relative market values of the Series 1 FON Stock and
the Series 1 PCS Stock.
"PCS Stock" means the Series 1 PCS Stock, the Series 2 PCS
Stock and the Series 3 PCS Stock.
"Per Class A FON Share Basis" means, with respect to Old Class
A Common Stock or Class A Common Stock-Series DT, an amount per
share equal to (X? Y) x Z, where "X" equals the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
FON Group or the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The FON Group, respectively,
"Y" equals the number of shares outstanding of Old Class A Common
Stock or Class A Common Stock-Series DT, respectively, and "Z"
equals the per share number of votes or dividend amount,
redemption amount or other payment paid to the class or series of
FON Stock to which the Old Class A Common Stock or Class A Common
Stock-Series DT is being compared.
"Per Class A PCS Share Basis" means, with respect to Old Class
A Common Stock or Class A Common Stock-Series DT, an amount per
share equal to (X? Y) x Z, where "X" equals the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group or the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The PCS Group, respectively,
"Y" equals the number of shares outstanding of Old Class A Common
Stock or Class A Common Stock-Series DT, respectively, and "Z"
equals the per share number of votes or dividend amount,
redemption amount or other payment paid to the class or series of
PCS Stock to which the Old Class A Common Stock or Class A Common
Stock-Series DT is being compared.
"Percentage Ownership Interest" means, with respect to any
Person, that percentage of the Voting Power of this Corporation
represented by Votes associated with the Voting Securities of
this Corporation owned of record by such Person or by its
nominees.
"Person" means an individual, a partnership, an association, a
joint venture, a corporation, a business, a trust, any entity
organized or existing under Applicable Law, an unincorporated
organization or any Governmental Authority.
"Preferred Stock" has the meaning set forth in Section 1 of
ARTICLE SIXTH.
"Preferred Stock Director" has the meaning set forth in
ARTICLE FIFTH of these Articles of Incorporation.
"Proceeding" means any action, litigation, suit, proceeding or
formal investigation or review of any nature, civil, criminal,
regulatory or otherwise, before any Governmental Authority.
"Publicly Traded" with respect to any security means (i)
registered under Section 12 of the Securities Exchange Act of
1934, as amended (or any successor provision of law), and (ii)
listed for trading on the New York Stock Exchange or the American
Stock Exchange (or any national securities exchange registered
under Section 7 of the Securities Exchange Act of 1934, as
amended (or any successor provision of law), that is the
successor to either such exchange) or quoted in the National
Association of Securities Dealers Automation Quotation System (or
any successor system).
"Qualified Joint Venture" has the meaning set forth in Article
I of the Investment Agreement.
"Qualified Stock Purchaser" means a Person that (a) FT and DT
reasonably believe has the legal and financial ability to
purchase shares of Class A Stock from this Corporation in
accordance with Article VI of the Stockholders' Agreement and
(b)would not be a Major Competitor of this Corporation or of the
Joint Venture immediately following such purchase.
"Qualified Stock Purchaser Standstill Agreement" has the
meaning set forth in the Standstill Agreement.
"Qualified Subsidiary" has the meaning set forth in the
Investment Agreement.
"Qualified Subsidiary Standstill Agreement" has the meaning
set forth in the Investment Agreement.
"Recapitalization" means the reclassification of, among other
things, certain outstanding shares of Sprint capital stock to be
effected pursuant to the terms set forth in the Restructuring
Agreement and the FT/DT Restructuring Agreement.
"Redemption Date" means the date fixed by the Board of
Directors for the redemption of (i) any shares of capital stock
of this Corporation pursuant to ARTICLE SIXTH, Section 2.2 or
(ii) shares of PCS Stock as shall be set forth in the notice to
holders of shares of PCS Stock and to holders of any Convertible
Securities that are convertible into or exchangeable or
exercisable for shares of PCS Stock required pursuant to ARTICLE
SIXTH, Section 7.4.
"Redemption Securities" means any debt or equity securities of
this Corporation, any of its Subsidiaries, or any combination
thereof having such terms and conditions as shall be approved by
the Board of Directors and which, together with any cash to be
paid as part of the redemption price pursuant to Section 2.2(b)
of ARTICLE SIXTH of these Articles of Incorporation, in the
opinion of an investment banking firm of recognized national
standing selected by the Board of Directors (which may be a firm
which provides other investment banking, brokerage or other
services to this Corporation), have a Market Price, at the time
notice of redemption is given pursuant to Section 2.2(d) of
ARTICLE SIXTH of these Articles of Incorporation, at least equal
to the redemption price required to be paid by such Section
2.2(a).
"Reduced Par Value Amount" means, at any time and only with
respect to either the Old Class A Common Stock or the Class A
Common Stock-Series DT following an issuance of FON Stock and/or
PCS Stock in accordance with ARTICLE SIXTH, Sections 1.2(c) or
(d), the amount resulting from (X - Y) ? Z, where
"X" equals Z times the par value per share of either the Old
Class A Common Stock or the Class A Common Stock-Series DT, as
applicable, immediately prior to an issuance of shares of FON
Stock and/or PCS Stock in accordance with ARTICLE SIXTH, Sections
1.2(c) or (d),
"Y" equals the number of shares of FON Stock and/or PCS Stock
issued in accordance with ARTICLE SIXTH, Sections 1.2(c) or (d)
times the par value of such shares so issued, and
"Z" equals the aggregate outstanding shares of Old Class A
Common Stock or the Class A Common Stock-Series DT, as
applicable.
"Registration Rights Agreement" means the Amended and Restated
Registration Rights Agreement, dated as of November 23, 1998,
among FT, DT and this Corporation, as amended from time to time.
"Related Business Transaction" means any Disposition of all or
substantially all the properties and assets attributed to the PCS
Group in a transaction or series of related transactions that
result in the Corporation receiving in consideration of such
properties and assets primarily equity securities (including,
without limitation, capital stock, debt securities convertible
into or exchangeable for equity securities or interests in a
general or limited partnership or limited liability company,
without regard to the voting power or other management or
governance rights associated therewith) of any entity which (i)
acquires such properties or assets or succeeds (by merger,
formation of a joint venture or otherwise) to the business
conducted with such properties or assets or controls such
acquiror or successor and (ii) which the Board of Directors
determines is primarily engaged or proposes to engage primarily
in one or more businesses similar or complementary to the
businesses conducted by such Business Group prior to such
Disposition.
"Restructuring Agreement" means the Restructuring and Merger
Agreement dated as of May 26, 1998, by and among certain Cable
Holders, this Corporation and the other parties listed therein,
as amended or supplemented from time to time.
"Restructuring Closing Date" means the Closing Date, as such
term is defined in the Restructuring Agreement.
"Rights Agreement" means the Rights Agreement, dated as of
November 23, 1998, between this Corporation and UMB Bank, N.A.,
as amended or supplemented from time to time.
"Section 310" has the meaning set forth in Section 2(a) of
ARTICLE FIFTH of these Articles of Incorporation.
"Series 1 FON Stock" has the meaning set forth in the
"Designation" column in Section 1 of ARTICLE SIXTH.
"Series 1 PCS Stock" has the meaning set forth in the
"Designation" column in Section 1 of ARTICLE SIXTH.
"Series 2 FON Stock" has the meaning set forth in the
"Designation" column in Section 1 of ARTICLE SIXTH.
"Series 2 PCS Stock" has the meaning set forth in the
"Designation" column in Section 1 of ARTICLE SIXTH.
"Series 3 FON Stock" has the meaning set forth in the
"Designation" column in Section 1 of ARTICLE SIXTH.
"Series 3 PCS Stock" has the meaning set forth in the
"Designation" column in Section 1 of ARTICLE SIXTH.
"Shares" means (a) shares of Class A Stock, Non-Class A Common
Stock, Preferred Stock or any other Voting Securities of this
Corporation, (b) securities of this Corporation convertible into
Voting Securities of this Corporation and (c) options, warrants
or other rights to acquire such Voting Securities, but in the
case of clause (c) excluding any rights of the Class A Holders or
FT and DT to acquire Voting Securities of this Corporation
pursuant to the FT/DT Restructuring Agreement, the Purchase
Rights Agreement (as defined in the FT/DT Restructuring
Agreement) and the Stockholders' Agreement (but not excluding any
Voting Securities received upon the exercise of such rights).
"Shares Issuable With Respect To The Class A Equity Interest
In The FON Group" means, at any time, the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
FON Group and the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The FON Group.
"Shares Issuable With Respect To The Class A Equity Interest
In The PCS Group" means, at any time, the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
PCS Group and the Number Of Shares Issuable With Respect To The
Class A-Series DT Equity Interest In The PCS Group.
"Spin-off" means any spin-off or other pro rata distribution
of equity interests of a wholly-owned direct or indirect
Subsidiary of this Corporation to the stockholders of this
Corporation.
"Sprint FON Group" means, as of any date from and after the
Effective Date:
(A) the interest of the Corporation or any of its subsidiaries
on such date in all of the assets, liabilities and businesses of
the Corporation or any of its subsidiaries (and any successor
companies), other than any assets, liabilities and businesses
attributed in accordance with this Section 10 to the PCS Group;
(B) a proportionate undivided interest in each and every
business, asset and liability attributed to the PCS Group equal
to the FON Group Intergroup Interest Fraction as of such date;
(C) all properties and assets transferred to the Sprint FON
Group from the PCS Group (other than pursuant to paragraph (D) or
(F) of this definition) after the Effective Date pursuant to
transactions in the ordinary course of business of both the
Sprint FON Group and the PCS Group or otherwise as the Board of
Directors may have directed as permitted by this ARTICLE SIXTH;
(D) all properties and assets transferred to the Sprint FON
Group from the PCS Group in connection with a reduction of the
Number Of Shares Issuable With Respect To The FON Group
Intergroup Interest;
(E) the interest of the Corporation or any of its subsidiaries
in any business or asset acquired and any liabilities assumed by
the Corporation or any of its subsidiaries outside the ordinary
course of business and attributed to the Sprint FON Group, as
determined by the Board of Directors as contemplated by Section
9.1(A) of ARTICLE SIXTH; and
(F) from and after the payment date of any dividend or other
distribution with respect to shares of PCS Stock (other than a
dividend or other distribution payable in shares of PCS Stock,
with respect to which adjustment shall be made as provided in the
definition of "Number Of Shares Issuable With Respect Of The FON
Group Intergroup Interest," or in securities of the Corporation
attributed to the PCS Group, for which provision shall be made as
set forth in the third to last sentence of this definition), an
amount of assets or properties previously attributed to the PCS
Group of the same kind as were paid in such dividend or other
distribution with respect to shares of PCS Stock and Class A
Common Stock (with respect to Shares Issuable With Respect To The
Class A Equity Interest In The PCS Group) as have a Fair Value on
the record date for such dividend or distribution equal to the
product of (1) the Fair Value on such record date of such
dividend or distribution to holders of shares of PCS Stock
declared on a per share basis multiplied by (2) the Number Of
Shares Issuable With Respect To The FON Group Intergroup Interest
(determined as of the record date for such dividend or
distribution);
provided that from and after any transfer of any assets or
properties from the Sprint FON Group to the PCS Group, the Sprint
FON Group shall no longer include such assets or properties so
transferred (other than as reflected in respect of such a
transfer by the FON Group Intergroup Interest Fraction, as
provided by paragraph (B) of this definition).
If the Corporation shall pay a dividend or make some other
distribution with respect to shares of PCS Stock payable in
securities of the Corporation that are attributed to the PCS
Group for purposes of this ARTICLE SIXTH (other than PCS Stock),
the Sprint FON Group shall be deemed to hold an interest in the
PCS Group equivalent to the number or amount of such securities
that is equal to the product of the number or amount of
securities so distributed to holders of PCS Stock on a per share
basis multiplied by the Number Of Shares Issuable With Respect To
The FON Group Intergroup Interest (determined as of the record
date for such distribution) and, to the extent interest is or
dividends are paid on the securities so distributed, the Sprint
FON Group shall include, and there shall be transferred thereto
out of the PCS Group, a corresponding ratable amount of the kind
of assets paid as such interest or dividends as would have been
paid in respect of such securities so deemed to be held by the
Sprint FON Group if such securities were outstanding.
The Corporation may also, to the extent the securities so paid
as a dividend or other distribution to the holders of PCS Stock
are Convertible Securities and at the time are convertible into
or exchangeable or exercisable for shares of PCS Stock, treat
such Convertible Securities as are so deemed to be held by the
Sprint FON Group to be deemed to be converted, exchanged or
exercised, and shall do so to the extent such Convertible
Securities are mandatorily converted, exchanged or exercised (and
to the extent the terms of such Convertible Securities require
payment of consideration for such conversion, exchange or
exercise, the Sprint FON Group shall then no longer include an
amount of the kind of properties or assets required to be paid as
such consideration for the amount of Convertible Securities
deemed converted, exchanged or exercised (and such properties or
assets shall be attributed to the PCS Group)), in which case,
from and after such time, the securities into or for which such
Convertible Securities so deemed to be held by the Sprint FON
Group were so considered converted, exchanged or exercised shall
be deemed held by the Sprint FON Group (as provided in clause (3)
of paragraph (C) of the definition of "Number Of Shares Issuable
With Respect To The FON Group Intergroup Interest") and such
Convertible Securities shall no longer be deemed to be held by
the Sprint FON Group. A statement setting forth the election to
effectuate any such deemed conversion, exchange or exercise of
Convertible Securities so deemed to be held by the Sprint FON
Group and the properties or assets, if any, to be attributed to
the PCS Group in consideration of such conversion, exchange or
exercise (if any) shall be filed in the records of the actions of
the Board of Directors and, upon such filing, such deemed
conversion, exchange or exercise shall be effectuated.
"Sprint Party" has the meaning set forth in the Joint Venture
Agreement.
"Sprint Sub" means Sprint Global Venture, Inc.
"Standstill Agreement" means the Amended and Restated
Standstill Agreement, dated as of November 23, 1998, among FT, DT
and this Corporation, as amended or supplemented from time to
time.
"Stockholders' Agreement" means the Amended and Restated
Stockholders' Agreement, dated as of November 23, 1998, among FT,
DT and this Corporation (and all exhibits thereto), as amended or
supplemented from time to time.
"Strategic Investor" has the meaning set forth in the
Investment Agreement.
"Strategic Merger" means a merger or other business
combination involving this Corporation (a) in which the Class A
Holders are entitled to retain or receive, as the case may be,
voting equity securities of the surviving parent entity in
exchange for or in respect of (by conversion or otherwise) such
Class A Stock, with an aggregate Fair Market Value equal to at
least 75% of the sum of (i) the Fair Market Value of all
consideration which such Class A Holders have a right to receive
with respect to such merger or other business combination, and
(ii) if this Corporation is the surviving parent entity, the Fair
Market Value of the equity securities of the surviving parent
entity which the Class A Holders are entitled to retain, (b)
immediately after which the surviving parent entity is an entity
whose voting equity securities are registered pursuant to Section
12(b) or Section 12(g) of the Exchange Act or which otherwise has
any class or series of its voting equity securities held by at
least 500 holders and (c) immediately after which no Person or
Group (other than the Class A Holders) owns Voting Securities of
such surviving parent entity with Votes equal to more than 35
percent of the Voting Power of such surviving parent entity.
"Subsidiary" means, with respect to any Person (the "Parent"),
any other Person in which the Parent, one or more direct or
indirect Subsidiaries of the Parent, or the Parent and one or
more of its direct or indirect Subsidiaries (a) have the ability,
through ownership of securities individually or as a group,
ordinarily, in the absence of contingencies, to elect a majority
of the directors (or individuals performing similar functions) of
such other Person, and (b) own more than 50% of the equity
interests, provided that Atlas shall be deemed to be a Subsidiary
of each of FT and DT.
"Supervoting Powers" means, as to the capital stock and debt
securities of this Corporation:
(a) FON Stock entitled to more than one Vote per share (other
than pursuant to the Rights Agreement and ARTICLE SIXTH, Section
7.5(d));
(b) PCS Stock entitled to a number of Votes per share greater
than the PCS Per Share Vote of the Series 3 PCS Stock measured as
of the same record date in accordance with Section 3.2 of ARTICLE
SIXTH (other than pursuant to the Rights Agreement and ARTICLE
SIXTH, Section 7.5(d)); or
(c) Voting Securities of this Corporation other than Non-Class
A Common Stock entitled to a number of Votes per share or unit,
as the case may be and measured as of the same record date,
greater than both (x) the quotient of (i) the price per share or
unit, as the case may be, at which such security will be issued
by this Corporation divided by (ii) the Market Price per share of
Series 1 FON Stock on the date of issuance of such Voting
Securities and (y) the quotient of (i) the price per share or
unit, as the case may be, at which such security will be issued
by this Corporation divided by (ii) the Market Price per share of
Series 1 PCS Stock on the date of issuance of such Voting
Securities (other than pursuant to the Rights Agreement and
ARTICLE SIXTH, Section 7.5(d)).
"Tie-Breaking Vote" has the meaning set forth in Section
18.1(a) of the Joint Venture Agreement, and shall include any
successor provision thereto.
"Total Market Capitalization" of any class or series of common
stock on any date means the product of (i) the Market Value of
one share of such class or series of common stock on such date
and (ii) the number of shares of such class or series of common
stock outstanding on such date.
"Trading Day" means, with respect to any security, any day on
which the principal national securities exchange on which such
security is listed or admitted to trading or The Nasdaq Stock
Market, if such security is listed or admitted to trading
thereon, is open for the transaction of business (unless such
trading shall have been suspended for the entire day) or, if such
security is not listed or admitted to trading on any national
securities exchange or The Nasdaq Stock Market, any day other
than a Saturday, Sunday, or a day on which banking institutions
in the State of New York are authorized or obligated by law or
executive order to close.
"Transfer" means any act pursuant to which, directly or
indirectly, the ownership of the assets or securities in question
is sold, transferred, conveyed, delivered or otherwise disposed,
but shall not include (a) any grant of Liens, (b) any conversion
or exchange of any security of this Corporation pursuant to a
merger or other business combination involving this Corporation,
(c) any transfer of ownership of assets to the surviving entity
in a Strategic Merger or pursuant to any other merger or other
business combination not prohibited by the Class A Provisions, or
(d) any foreclosure or other execution upon any of the assets of
this Corporation or any of its Subsidiaries other than
foreclosures resulting from Lien Transfers.
"Treaty Benefit" means:
(a) the 5% rate of dividend withholding (or any successor rate
applicable to non-portfolio investments);
(b) the exemption from income tax with respect to dividends
paid or profits distributed by this Corporation;
(c) the exemption from income tax with respect to gains or
profits derived from the sale, exchange, or disposal of stock in
this Corporation; or
(d) the exemption from taxes on capital with respect to stock
in this Corporation;
under, in the case of (a), (b), (c) and (d) above, either (i) the
relevant income tax treaty between the United States and France,
in the case of FT, and the United States and Germany, in the case
of DT, or (ii) any provisions of French statutory law, in the
case of FT, or German statutory law, in the case of DT, which
refers to, or is based on or derived from, any provision of such
treaty, or
(e) any other favorable treaty benefit or statutory benefit,
that specifically requires the ownership of a certain amount of
voting power or voting interest in this Corporation, under a
provision of the relevant income tax treaty between the United
States and France or the statutory laws of France, in the case of
FT, or the relevant income tax treaty between the United States
and Germany or the statutory laws of Germany, in the case DT,
provided that the chief tax officer of FT or DT certifies that
such benefit is reasonably expected to provide to FT or DT, as
the case may be, combined tax savings in the year such
certification is made and in future years of at least U.S. $15
million.
"Venture Interests" has the meaning set forth in the Joint
Venture Agreement.
"Vote" means, with respect to any entity, the ability to cast
a vote at a stockholders', members' or comparable meeting of such
entity with respect to the election of directors, managers or
other members of such entity's governing body, or the ability to
cast a general partnership or comparable vote, provided that with
respect to this Corporation, the term "Vote" means the ability to
exercise general voting power (as opposed to the exercise of
special voting or disapproval rights such as those set forth in
this ARTICLE SIXTH) with respect to matters other than the
election of directors at a meeting of the stockholders of this
Corporation.
"Voting Power" means, with respect to any entity as at any
date, the aggregate number of Votes outstanding as at such date
in respect of such entity.
"Voting Securities" means, with respect to an entity, any
capital stock or debt securities of such entity if the holders
thereof are ordinarily, in the absence of contingencies, entitled
to a Vote, even though the right to such Vote has been suspended
by the happening of such a contingency, and in the case of this
Corporation, shall include, without limitation, the Non-Class A
Common Stock and the Class A Stock, but shall not include any
shares issued pursuant to the Rights Agreement to the extent such
issuance is caused by action of a Class A Holder.
"Weighted Average Price" means the weighted average per unit
price paid by the purchasers of any capital stock, debt
instrument or security of this Corporation; provided, that (i)
the price paid by the purchasers of Series 2 PCS Stock and Series
3 PCS Stock acquired on the Restructuring Closing Date will be
the first to be determined of the PCS IPO Price and the Average
Trading Price of a share of Series 1 PCS Stock as of the 21st
Trading Day following the commencement of regular way trading in
connection with the Recapitalization, (ii) the original purchase
price paid by the purchasers of Old Class A Common Stock shall be
allocated as of the Effective Date among the Number Of Shares
Issuable With Respect To The Old Class A Equity Interest In The
FON Group and the Number Of Shares Issuable With Respect To The
Old Class A Equity Interest In The PCS Group represented by such
Old Class A Common Stock in the same proportion per share of Old
Class A Common Stock as the per share reclassification and
exchange of a share of Common Stock, par value $2.50 per share,
outstanding immediately prior to the Recapitalization, into one
share of Series 1 FON Stock and one-half of a share of Series 1
PCS Stock and (iii) the original purchase price paid by the
purchasers of Class A Common Stock-Series DT shall be allocated
as of the Effective Date among the Number Of Shares Issuable With
Respect To The Class A-Series DT Equity Interest In The FON Group
and the Number Of Shares Issuable With Respect To The Class
A-Series DT Equity Interest In The PCS Group represented by such
Class A Common Stock-Series DT in the same proportion per share
of Class A Common Stock as the per share reclassification and
exchange of a share of Common Stock, par value $2.50 per share,
outstanding immediately prior to the Recapitalization, into one
share of Series 1 FON Stock and a portion of a share of Series 1
PCS Stock. In determining the price of shares of Non-Class A
Common Stock or Class A Stock issued upon the conversion or
exchange of securities or issued upon the exercise of options,
warrants or other rights, the consideration for such shares shall
be deemed to include the price paid to purchase the convertible
security or the warrant, option or other right, plus any
additional consideration paid upon conversion or exercise. If any
portion of the price paid is not cash, the Independent Directors
(acting by majority vote) shall determine in good faith the Fair
Market Value of such non-cash consideration. If any new shares of
Non-Class A Common Stock are issued together with other shares or
securities or other assets of this Corporation for consideration
which covers both the new shares and such other shares,
securities or other assets, the portion of such consideration
allocable to such new shares shall be determined in good faith by
the Independent Directors (acting by majority vote), in each case
as certified in a resolution sent to all Class A Holders or
holders of Series 2 PCS Stock or Series 2 FON Stock, as the case
may be.
Section 11. Notices. Notwithstanding the provisions of
Section 7.4, all notices to Class A Holders made by this
Corporation pursuant to this ARTICLE SIXTH shall be made in
writing and any such notice shall be deemed delivered when the
same has been delivered in person to, or transmitted by telex or
telefacsimile communication to, or seven days after it has been
sent by air mail to the addresses of, all of the Class A Holders
as indicated on the stock transfer books of this Corporation.
Communications by telex or telefacsimile communication also shall
be sent concurrently by air mail, but shall in any event be
effective as stated above.
Section 12. No Other Beneficiaries. The Class A Provisions
are intended for the benefit of the Class A Holders only, and
nothing in the Class A Provisions is intended or will be
construed to confer upon or to give any third party or other
stockholder of this Corporation any rights or remedies by virtue
hereof. Any term of the Class A Provisions may be waived by the
holders of at least two-thirds of the votes represented by the
outstanding shares of Class A Stock, voting together as a single
class.
Section 13. General Provisions Relating to Preferred Stock
13.1. The Preferred Stock may be issued from time to time in
one or more series, each of such series to have such voting
powers (full or limited or without voting powers) designation,
preferences and relative, participating, optional or other
special rights and qualifications, limitations or restrictions
thereof as are stated and expressed herein, or in a resolution or
resolutions providing for the issue of such series adopted by the
Board of Directors as hereinafter provided.
13.2. Authority is hereby granted to the Board of Directors,
subject to the provisions of this ARTICLE SIXTH, to create one or
more series of Preferred Stock and, with respect to each series,
to fix or alter as permitted by law, by resolution or resolutions
providing for the issue of such series:
(a) the number of shares to constitute such series and the
distinctive designation thereof;
(b) the dividend rate on the shares of such series, the
dividend payment dates, the periods in respect of which dividends
are payable ("dividend periods") whether such dividends shall be
cumulative, and if cumulative, the date or dates from which
dividends shall accumulate;
(c) whether or not the shares of such series shall be
redeemable, and, if redeemable, on what terms, including the
redemption prices which the shares of such series shall be
entitled to receive upon the redemption thereof;
(d) whether or not the shares of such series shall be subject
to the operation of retirement or sinking funds to be applied to
the purchase or redemption of such shares for retirement and, if
such retirement or sinking fund or funds be established, the
annual amount thereof and the terms and provisions relative to
the operation thereof;
(e) whether or not the shares of such series shall be
convertible into, or exchangeable for, shares of any other class
or classes or of any other series of the same or any other class
or classes of stock of the Corporation and the conversion price
or prices or rate or rates, or the rate or rates at which such
exchange may be made, with such adjustments, if any, as shall be
stated and expressed or provided in such resolution or
resolutions;
(f) the voting power, if any, of the shares of such series;
and
(g) such other terms, conditions, special rights and
protective provisions as the Board of Directors may deem
advisable.
13.3. No dividend shall be declared and set apart for payment
on any series of Preferred Stock in respect of any dividend
period unless there shall likewise be or have been paid, or
declared and set apart for payment, on all shares of Preferred
Stock of each other series entitled to cumulative dividends at
the time outstanding which rank equally as to dividends with the
series in question, dividends ratably in accordance with the sums
which would be payable on the said shares through the end of the
last preceding dividend period if all dividends were declared and
paid in full.
13.4. If upon any dissolution of the Corporation, the assets
of the Corporation distributable among the holders of any one or
more series of Preferred Stock which are (i) entitled to a
preference over the holders of the Corporation Common Stock upon
such dissolution, and (ii) rank equally in connection with any
such distribution, shall be insufficient to pay in full the
preferential amount to which the holders of such shares shall be
entitled, then such assets, or the proceeds thereof, shall be
distributed among the holders of each such series of the
Preferred Stock ratably in accordance with the sums which would
be payable on such distribution if all sums payable were
discharged in full.
13.5. In the event that the Preferred Stock of any series
shall be redeemable, then, at the option of the Board of
Directors, the Corporation may at such time or times as may be
specified by the Board of Directors as provided in Section
13.2(c) of this ARTICLE SIXTH redeem all, or any number less than
all, of the outstanding shares of such series at the redemption
price thereof and on the other terms fixed herein or by the Board
of Directors as provided in said Section 13.2(c) (the sum so
payable upon any redemption of Preferred Stock being herein
referred to as the "redemption price").
13.6. Attribution of Preferred Stock to Groups. As of the
Effective Date, the outstanding shares of Preferred Stock-First
Series, Preferred Stock-Second Series, and Preferred Stock-Fifth
Series shall be attributed entirely to the Sprint FON Group.
Upon any issuance of any shares of Preferred Stock of any series
after the Effective Date, the Board of Directors shall attribute
for purposes of this ARTICLE SIXTH the shares so issued entirely
to the Sprint FON Group or entirely to the PCS Group or partly to
the Sprint FON Group and partly to the PCS Group in such
proportion as the Board of Directors shall determine and,
further, in case of the issuance of shares of Preferred Stock
that are exchangeable or exercisable for PCS Stock, if at the
time such shares of Preferred Stock are issued the Number Of
Shares Issuable With Respect To The FON Group Intergroup Interest
shall be greater than zero, then the Board of Directors shall
also determine what portion (which may be some, all or none) of
such shares of Preferred Stock shall reduce the Number Of Shares
Issuable With Respect To The FON Group Intergroup Interest,
taking into consideration the use of the proceeds of such
issuance of shares of Preferred Stock in the business of the
Sprint FON Group or the PCS Group and any other relevant factors.
Upon any redemption or repurchase of shares of Preferred Stock,
the Board of Directors shall determine the proper attribution
thereof in accordance with Section 9.1(D) of ARTICLE SIXTH.
Notwithstanding any such attribution of shares of Preferred Stock
to the Sprint FON Group or the PCS Group, any dividends or
distributions or other payments which are made by the Corporation
on such shares of Preferred Stock may be made, and as required by
the preferences and relative, participating, optional or other
special rights thereof shall be made, out of any of the
properties or assets of the Corporation, regardless of the
Business Group to which such properties or assets are attributed
in accordance with the definitions of "Sprint FON Group" and "PCS
Group" set forth in Section 10, except as otherwise provided by
the resolution of the Board of Directors fixing the preferences
and relative, participating, optional or other special rights of
a series of Preferred Stock.
13.7. Preferred Stock-First Series, Convertible.
13.7.1. Amount. The number of shares to constitute the
initial series of Preferred Stock shall be 1,742,853 and the
designation thereof shall be Preferred Stock-First Series
(hereafter "First Series").
13.7.2. Dividends. Holders of shares of the First Series
will be entitled to receive cumulative cash dividends at the
quarterly rate of $.371/2 per share. All such payments will be
made out of funds legally available for the payment of such
dividends, when and as declared, before any distribution shall be
made on the Corporation Common Stock.
13.7.3 Conversion Rights. The holders of shares of the First
Series may convert any or all of said shares into Corporation
Common Stock at any time after the Effective Date on the basis of
three (3) shares of Series 1 FON Stock and one and fifty one-
hundredths (1.50) shares of Series 1 PCS Stock of the Corporation
for each share of the First Series. Such ratio is herein referred
to as the "conversion rate."
The conversion rate shall be subject to the following
adjustments:
A. In case the Corporation shall (i) pay a dividend in the FON
Stock or the PCS Stock or (ii) subdivide the outstanding shares
of FON Stock or PCS Stock into a greater number of shares of FON
Stock or PCS Stock, respectively, or combine the outstanding
shares of FON Stock or PCS Stock into a smaller number of shares
of FON Stock or PCS Stock, respectively, the conversion rate into
FON Stock or PCS Stock, as applicable, in effect immediately
prior to such stock dividend, subdivision or combination shall be
proportionately increased or decreased as the case may be.
B. No such adjustment shall be required, however, if the
aggregate number of shares of FON Stock or PCS Stock issued as
dividends on the FON Stock or PCS Stock, respectively, since the
most recent previous adjustment does not exceed 5% of the total
number of shares of FON Stock or PCS Stock, respectively,
outstanding; provided, however, that when the aggregate number of
shares of FON Stock or PCS Stock, as applicable, issued as
dividends since the most recent previous adjustment shall exceed
the foregoing 5%, the conversion rate shall be increased in
proportion to the same percentage or ratio that the aggregate of
all such dividends in shares of FON Stock or PCS Stock, as
applicable, since the most recent previous adjustment bears to
the total number of shares of FON Stock or PCS Stock, as
applicable, outstanding.
C. In the event the Corporation shall fix a record date for
the purpose of determining the holders of shares of Corporation
Common Stock entitled to receive any dividend in Corporation
Common Stock, the conversion rate or any subsequent conversion
rate in effect immediately prior to the record date fixed for the
determination of shareholders entitled to such dividend shall be
proportionately increased (subject to the limitation of
subparagraph (B) above) and such adjustment will become effective
immediately after the opening of business on the day following
such record date.
D. The conversion rate shall not be adjusted by reason of: (i)
the issuance of shares pursuant to options and stock purchase
agreements granted or entered into with officers or employees of
the Corporation; and (ii) the issuance of shares for cash or in
exchange for assets or stock of another company.
E. Any adjustment in the conversion rate as herein provided
shall be to the nearest, or if there shall be no nearest, then to
the next lower, one-hundredth of a share of FON Stock or PCS
Stock, as applicable, and shall remain in effect until further
adjustment as required hereunder.
F. In case the Corporation shall be recapitalized, or shall be
consolidated with or merged into, or shall sell or transfer its
property and assets as, or substantially as, an entirety to any
other corporation, proper provisions shall be made as a part of
the terms of such recapitalization, consolidation, merger, sale
or transfer whereby the holder of any shares of the First Series
at the time outstanding immediately prior to such event shall
thereafter be entitled to such conversion rights, with respect to
securities of the Corporation resulting from such
recapitalization, consolidation or merger, or to which such sale
or transfer shall be made, as shall be substantially equivalent
to the conversion rights herein provided for.
G. No fraction of a share of FON Stock or PCS Stock shall be
issued upon any conversion. In lieu of the fraction of a share to
which the holder of shares of the First Series surrendered for
conversion would otherwise be entitled, such holder shall
receive, as soon as practicable after the date of conversion, an
amount in cash equal to the same fraction of the market value of
a full share of Series 1 FON Stock or Series 1 PCS Stock, as
applicable. For the purposes of this subparagraph, the market
value of a share of Series 1 FON Stock or Series 1 PCS Stock, as
applicable, shall be the last recorded sale price of such a share
on the New York Stock Exchange on the day immediately preceding
the date upon which such shares of such series are surrendered
for conversion, or if there be no such recorded sale price on
such date, the last quoted bid price per share of such
Corporation Common Stock on such Exchange at the close of
business on such date.
13.7.4 Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the Corporation the holders of the
First Series will be entitled to receive out of the assets of the
Corporation available for distribution to stockholders, before
any distribution of the assets shall be made to the holders of
Corporation Common Stock, the sum of $42.50 per share if such
liquidation is voluntary and the sum of $40.00 per share if such
liquidation is involuntary, plus in each case any accumulated
unpaid dividends. If upon any liquidation, dissolution or winding
up of the Corporation the amounts payable with respect to the
Preferred Stock are not paid in full, the holders of the
Preferred Stock will share ratably in any distribution of assets
in proportion to the full preferential amounts to which they are
entitled.
13.7.5. Redemption. The First Series may be redeemed by the
Corporation, at any time or from time to time, upon at least
thirty days' prior notice, at the redemption price of $42.50 per
share, plus any accumulated unpaid dividends. If less than all
the outstanding First Series is to be redeemed, the shares to be
redeemed shall be determined in such manner as may be prescribed
by the Board of Directors. Shares so redeemed shall be retired
and not reissued.
13.7.6. Voting Rights. Each holder of the First Series will
be entitled to one (1) vote for each share held.
If six quarterly dividends on any series of the Preferred
Stock are in arrears, the number of directors of the Corporation
shall be increased by two (2) and the holders of all the
Preferred Stock voting as a class will be entitled to elect two
(2) directors until all arrears in dividends have been paid.
Consent of the holders of at least two-thirds of the then
outstanding Preferred Stock of all classes will be necessary to:
(a) authorize any stock ranking either as to payment of dividend
or distribution of assets prior to the First Series or any other
Preferred Stock then outstanding or (b) amend, alter, or change
in any material respect prejudicial to the holders thereof the
preferences of any then outstanding Preferred Stock.
Consent of the holders of a majority of the then outstanding
Preferred Stock of all classes will be necessary to: (a) increase
the authorized amount of the Preferred Stock or (b) create any
other class of stock ranking on a parity with the Preferred
Stock.
13.7.7. Preemptive Rights. No holder of Preferred Stock will
have any preemptive rights.
13.8. Preferred Stock-Second Series, Convertible.
13.8.1. Amount, Rank and Designation. The amount of shares
to constitute the Second Series of Preferred Stock shall be
8,758,472 shares plus such an additional amount, if any, as shall
be required under the Agreement and Plan of Merger between the
Company and Carolina Telephone and Telegraph Company dated as of
July 18, 1968. The designation thereof shall be "Preferred Stock-
Second Series, Convertible" (hereinafter "Second Series"). Shares
of the Second Series shall rank on a parity with shares of the
First Series of the Preferred Stock as to dividends and upon
liquidation and shall have a preference over the shares of the
Corporation Common Stock and any other class or series of stock
ranking junior to the Second Series as to dividends or upon
liquidation.
13.8.2. Dividends. Holders of shares of the Second Series
will be entitled to receive cumulative cash dividends each
calendar quarter payable in March, June, September and December
of each year, at the rate of $.371/2 per share in each quarter.
All such payments will be made out of funds legally available
for the payment of such dividends, when and as declared by the
Board of Directors of the Corporation. Before any dividends on
the Corporation Common Stock or any other class or series of
stock of the Corporation ranking junior to the Second Series as
to dividends shall be paid or declared and set apart for payment,
the holders of shares of the Second Series shall be entitled to
receive the full accumulated cash dividends for all quarterly
dividend periods ending on or before the date on which any
dividend on any such class or series of stock ranking junior to
the Second Series as to dividends or upon liquidation is declared
or is to be paid.
13.8.3 Conversion Rights. The holders of shares of the
Second Series may convert any or all of said shares into
Corporation Common Stock at any time after the Effective Date on
the basis of three and nine-one hundredths (3.09) shares of
Series 1 FON Stock and one and fifty-four one hundredths (1.54)
shares of Series 1 PCS Stock of the Corporation for each one
share of the Second Series. Such ratios are herein referred to
individually as the "FON conversion rate" and the "PCS conversion
rate" and, collectively, the "conversion rates." In case of the
redemption of any shares of the Second Series, such right of
conversion shall cease and terminate as to the shares duly called
for redemption, at the close of business on the date fixed for
redemption, unless default shall be made in the payment of the
redemption price. Upon conversion the Corporation shall make no
payment or adjustment on account of dividends accrued or in
arrears on the Second Series surrendered for conversion.
The conversion rates in effect at any time shall be subject to
adjustment as follows:
A. In case the Corporation shall (i) declare a dividend on its
Corporation Common Stock in shares of its capital stock, (ii)
subdivide its outstanding shares of Corporation Common Stock,
(iii) combine its outstanding shares of Corporation Common Stock
into a smaller number of shares, or (iv) issue any shares by
reclassification of its shares of Corporation Common Stock
(including any reclassification in connection with a
consolidation or merger in which the Corporation is the
continuing corporation), the conversion rates in effect at the
time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification shall
be proportionately adjusted so that the holder of any shares of
the Second Series surrendered for conversion after such time
shall be entitled to receive the number of shares which he would
have owned or have been entitled to receive had such shares of
the Second Series been converted immediately prior to such time.
Such adjustment shall be made successively whenever any event
listed above shall occur.
B. In case the Corporation shall fix a record date for the
issuance of rights or warrants to all holders of its FON Stock or
to all holders of its PCS Stock entitling them (for a period
expiring within 45 days after such record date) to subscribe for
or purchase shares of FON Stock or PCS Stock, as the case may be,
at a price per share less than the current market price per share
of such FON Stock or PCS Stock (as defined in Paragraph D below)
on such record date, the applicable conversion rate after such
record date shall be determined by multiplying the conversion
rate in effect immediately prior to such record date by a
fraction, of which the numerator shall be the number of shares of
FON Stock or PCS Stock, as the case may be, outstanding on such
record date plus the number of additional shares of FON Stock or
PCS Stock, as applicable, to be offered for subscription or
purchase, and of which the denominator shall be the number of
shares of FON Stock or PCS Stock, as the case may be, outstanding
on such record date plus the number of shares of FON Stock or PCS
Stock, as applicable, which the aggregate offering price (without
deduction for expenses or commissions of any kind) of the total
number of shares so to be offered would purchase at such current
market price. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights or
warrants are not so issued, the conversion rate shall again be
adjusted to be the applicable conversion rate which would then be
in effect if such record date had not been fixed.
C. In case the Corporation shall fix a record date for the
making of a distribution to all holders of its FON Stock or PCS
Stock, as applicable, (including any such distribution made in
connection with a consolidation or merger in which the
Corporation is the continuing corporation) of evidences of its
indebtedness or assets (excluding dividends paid in, or
distributions of, cash) or subscription rights or warrants
(excluding those referred to in Paragraph B above), the FON
conversion rate or the PCS conversion rate, as applicable, after
such record date shall be determined by multiplying the
conversion rate in effect immediately prior to such record date
by a fraction, of which the numerator shall be the current market
price per share (as defined in Paragraph D below) of FON Stock or
PCS Stock, as the case may be, on such record date, and of which
the denominator shall be such current market price per share of
FON Stock or PCS Stock, as applicable, less the fair market value
(as determined by the Board of Directors whose determination
shall be conclusive, and described in a statement filed with the
transfer agent or agents for the Second Series and with the
principal office of the Corporation) of the portion of the assets
or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of FON
Stock or PCS Stock, as applicable. Such adjustment shall be made
successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the applicable
conversion rate shall again be adjusted to the conversion rate
which would then be in effect if such record date had not been
fixed.
D. For the purpose of any computation under Paragraphs B and C
above, the current market price per share of FON Stock or PCS
Stock on any record date shall be deemed to be the average of the
daily closing prices of a share of FON Stock or PCS Stock,
respectively, for the 30 consecutive business days commencing 45
business days before such date. The closing price for each day
shall be the last sale price regular way or, in case no such sale
takes place on such day, the mean between the closing bid and
asked prices regular way, in either case on the New York Stock
Exchange.
E. The conversion rates shall not be adjusted by reason of:
(i) the issuance of shares pursuant to options and stock purchase
agreements granted or entered into with officers or employees of
the Corporation; and (ii) the issuance of shares for cash (except
as provided in Paragraph B above) or in exchange for assets or
stock of another company.
F. Any adjustment in the conversion rates as herein provided
shall be to the nearest, or if there shall be no nearest, then to
the next lower, one-hundredth of a share of Corporation Common
Stock, and shall remain in effect until further adjustment as
required hereunder.
G. In case the Corporation shall be recapitalized, or shall be
consolidated with or merged into, or shall sell or transfer its
property and assets as, or substantially as, an entirety to any
other corporation, proper provisions shall be made as a part of
the terms of such recapitalization, consolidation, merger, sale
or transfer whereby the holder of any shares of the Second Series
at the time outstanding immediately prior to such event shall
thereafter be entitled to such conversion rights, with respect to
securities of the Corporation resulting from such
recapitalization, consolidation or merger or to which such sale
or transfer shall be made, as shall be substantially equivalent
to the conversion rights herein provided for.
H. No fraction of a share of Corporation Common Stock shall be
issued upon any conversion. In lieu of the fraction of a share to
which the holder of shares of the Second Series surrendered for
conversion would otherwise be entitled, such holder shall
receive, as soon as practicable after the date of conversion, an
amount in cash equal to the same fraction of the market value of
a full share of such Corporation Common Stock. For the purposes
of this subparagraph, the market value of a share of the
applicable Corporation Common Stock shall be the last recorded
sale price of such a share on the New York Stock Exchange for
such stock on the day immediately preceding the date upon which
such shares of such series are surrendered for conversion, or if
there be no such recorded sale price on such day, the last quoted
bid price per share of the applicable Corporation Common Stock on
such Exchange at the close of business on such date.
I. Whenever there shall be an adjustment in the conversion
rates as provided by the foregoing, the Corporation will file
with each transfer agent for shares of the Second Series a
certificate signed by the President or the chief financial or
accounting officer of the Corporation, setting forth in
reasonable detail the calculation of the adjustment, and shall
mail to each holder of record thereof, a notice describing the
adjustment and stating the applicable record or effective date
therefor, at least 20 days prior thereto.
13.8.4. Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the Corporation the holders of the
Second Series will be entitled to receive out of the assets of
the Corporation available for distribution to stockholders,
before any distribution of the assets shall be made to the
holders of the Corporation Common Stock or any other class or
series of stock ranking junior to the Second Series either as to
dividends or upon liquidation, the sum of $35.42 per share if
such liquidation is voluntary and the sum of $33.33 per share if
such liquidation is involuntary, plus in each case any
accumulated unpaid dividends (whether or not declared), to the
end of the current quarterly dividend period in which the payment
is made. If upon any liquidation, dissolution or winding up of
the Corporation the amounts payable with respect to the Second
Series and any other series of Preferred Stock which ranks on a
parity with the Second Series are not paid in full, the holders
of the Second Series and such parity Preferred Stock will share
ratably in any distribution of assets in proportion to the full
preferential amounts to which they are entitled.
13.8.5. Redemption. Subject to the provisions herein and
in the charter contained, the Second Series may be redeemed by
the Corporation, at any time or from time to time, upon at least
thirty days' prior notice, at the redemption price of $50.00 per
share, plus any accumulated unpaid dividends (whether or not
declared), to the end of the current quarterly dividend period in
which the payment is made. If less than all the outstanding
Second Series is to be redeemed, the shares to be redeemed shall
be selected by lot, in such equitable manner as may be prescribed
by the Board of Directors. Shares so redeemed shall be retired
and not reissued.
13.8.6. Reservation of Shares. The Corporation shall at
all times keep available and reserved the number of shares of its
Corporation Common Stock required for conversion of the
outstanding and any reserved shares of the Second Series.
13.8.7. Certain Protective Provisions. If at any time the
full cumulative dividends on shares of the Second Series have not
been paid or declared and set aside for payment for the current
and all past quarterly dividend periods, the Corporation (a) will
not declare, or pay, or set apart for payment any dividends or
make any distribution, on any other class or series of stock of
the Corporation ranking junior to the Second Series whether as to
dividends or upon liquidation; (b) will not redeem, purchase or
otherwise acquire, or permit any subsidiary to purchase or
otherwise acquire, any shares of any junior class or series if
the Corporation shall be in default with respect to any dividend
payable on shares of the Second Series, provided that
notwithstanding the foregoing, the Corporation may at any time
redeem, purchase or otherwise acquire shares of stock of any such
junior class in exchange for, or out of the net cash proceeds
from the substantially simultaneous sale of, other shares of
stock of any junior class; and (c) will not redeem pursuant to
redemption rights in the terms of such stock any stock ranking on
a parity with the Second Series unless at the same time it
redeems all the shares of the Second Series.
Unless the consent of all or a greater number of such shares
is required by law, the consent of the holders of at least two-
thirds (2/3) of the then outstanding shares of the Second Series
shall be necessary in order to liquidate or dissolve the
Corporation voluntarily or by any other means involving the vote
or consent of any stockholders of the Corporation.
Unless the consent of all or a greater number of such shares
is required by law, consent of the holders of at least two-thirds
(2/3) of the then outstanding aggregate number of shares of the
Second Series and each other series of the Preferred Stock whose
terms provide for such consent, taken together, will be necessary
to: (a) authorize (by whatever means) any stock ranking either as
to payment of dividends or distribution of assets prior to the
Second Series or any other Preferred Stock then outstanding; or
(b) authorize any merger or consolidation (or transfer of all or
substantially all of the assets of the Corporation in a
transaction contemplating in substance and effect the exchange of
shares of the Preferred Stock for stock of another corporation)
unless the surviving, resulting or other corporation in such
transaction shall have authorized no stock ranking prior to the
Preferred Stock as to dividends or upon liquidation (unless such
stock is a stock substantially the same as, and to be exchanged
for, stock of the Corporation previously authorized pursuant to
the preceding clause (a)); or (c) amend, alter, or change in any
material respect adverse to the holders thereof the preferences
of any then outstanding Preferred Stock; provided that in case of
any such action described in the preceding clauses (a), (b) and
(c) which, in any material respect, is adverse to the Second
Series as a series and is not a term generally applicable to and
with the same relative effect upon all series, the consent of the
holders of two-thirds (2/3) of the then outstanding shares of the
Second Series will be required.
Unless the consent of all or a greater number of such shares
is required by law, consent of the holders of a majority of the
then outstanding aggregate number of shares of the Second Series
and each other series of the Preferred Stock whose terms provide
for such consent, taken together, will be necessary to: (a)
increase the authorized amount of the Preferred Stock; (b)
authorize any merger or consolidation (or transfer of all or
substantially all the assets of the Corporation to another
corporation contemplating in substance and effect the exchange of
shares of the Preferred Stock for stock of another corporation)
unless the surviving, resulting or other corporation in such
transaction shall have no greater authorized amount of stock
ranking on a parity with the Preferred Stock as to payment of
dividends or upon liquidation than was authorized by the
Corporation immediately prior to such transaction; or (c) create
any other class of stock ranking on a parity with the Preferred
Stock as to dividends or upon liquidation.
13.8.8. Voting Rights. Each holder of the Second Series
will be entitled to one (1) vote for each share held, and, in
addition to the other class and series voting rights of the
shares of the Second Series, shall have general voting power,
share for share, with the Common Stock of the Corporation and any
other shares having general voting power.
If six quarterly dividends on any series of the Preferred
Stock are in arrears, the number of directors of the Corporation
shall be increased by two (2) and the holders of all the
Preferred Stock voting as a class will be entitled to elect two
(2) directors until all arrears in dividends have been paid. The
Corporation will promptly take all such action as shall be
necessary to permit such election to occur promptly after such
arrearage occurs.
13.9. Preferred Stock-Fifth Series.
13.9.1. Designation; Number of Shares; Stated Value. The
Series shall be designated as Preferred Stock-Fifth Series (the
"Fifth Series") and shall consist of ninety-five (95) shares. The
shares of such series are hereinafter sometimes called the "Fifth
Series Shares." The stated value of the Fifth Series Shares shall
be One Hundred Thousand Dollars ($100,000) per share.
13.9.2. Dividends. The rate of dividends upon the Fifth
Series Shares (which shall be cumulative from the date of issue)
and the time of payment thereof shall be 6.00% of the stated
value per share per annum, payable quarterly on the last days of
January, April, July and October in each year.
13.9.3. Rank. The Fifth Series Shares shall rank on a
parity with shares of the First Series and Second Series of the
Preferred Stock as to dividends and upon liquidation.
13.9.4. Voting Rights. Holders of Fifth Series Shares will
be entitled to one vote for each share held and will be entitled
to exercise such voting rights together with the holders of
Corporation Common Stock of the Corporation, without distinction
as to class. If no dividends or less than full cumulative
dividends on the Fifth Series Shares shall have been paid for
each of four consecutive dividend periods, or if arrearages in
the payment of dividends on the Fifth Series Shares shall have
cumulated to an amount equal to full cumulative dividends on the
Fifth Series Shares for six quarterly dividend periods, the
holders of the Fifth Series Shares shall, at all meetings held
for the election of Directors until full cumulative dividends for
all past quarterly dividend periods and the current quarterly
dividend period on the Fifth Series Shares shall have been paid
or declared and set apart for payment, possess voting power,
acting alone, to elect the smallest number constituting a
majority of the Directors then to be elected. The Corporation
will promptly take all such action as shall be necessary to
permit such election to occur promptly after such arrearage
occurs.
13.9.5. Non-Convertible. The Fifth Series Shares shall not
be convertible into or exchangeable for stock of any other class
or classes of the Corporation.
13.9.6. Repurchase by the Corporation. Upon six months'
prior written notice, the holders of the Fifth Series Shares may
tender all and not less than all of the Fifth Series Shares to
the Corporation for purchase at a price per share equal to the
stated value of One Hundred Thousand Dollars ($100,000) per share
plus accrued dividends to the date of repurchase by the
Corporation (the Purchase Price). Upon such proper tender of all
shares of the Fifth Series Shares by the holders, the Corporation
shall purchase the Fifth Series Shares at the Purchase Price.
13.9.7. Tender Procedures. The Fifth Series Shares will
not be deemed tendered unless and until the certificate or
certificates therefor have been received by the Corporation or
the bank or trust company designated for the purpose and, if
payment upon acceptance of tender thereof is to be made other
than to the record holders, such certificate or certificates have
been duly endorsed and are in proper form for transfer, with all
transfer taxes due in respect thereof paid or provided for.
13.9.8. Redemption. If the holders have not theretofore
tendered the Fifth Series Shares to the Corporation for purchase
pursuant to paragraphs 6 and 7 hereof by March 14, 2003, then the
Corporation shall redeem all of the outstanding Fifth Series
Shares at the Purchase Price on a date set forth in written
notice to the holders as the redemption date (the Redemption
Date). The Corporation shall give notice of such redemption not
less than thirty (30) days prior to the Redemption Date, by mail
to the holders of record of the outstanding shares at their
respective addresses then appearing on the books of the
Corporation. At any time before the Redemption Date, the
Corporation may deposit in trust the funds necessary for such
redemption with a bank or trust company to be designated in the
notice of redemption, doing business in the City of Chicago and
State of Illinois or in the City and State of New York, and
having capital, surplus and undivided profits aggregating
$25,000,000. In the event such deposit is made so that the
deposited funds shall be forthwith available to the holders of
the shares to be redeemed upon surrender of the certificates
evidencing such shares, then, upon the giving of the notice of
such redemption, as hereinabove provided, or upon the earlier
delivery to such bank or trust company of irrevocable
authorization and direction so to give such notice, all shares
with respect to the redemption of which such deposit shall have
been made and the giving of such notice effected shall, whether
or not the certificates for such shares shall be surrendered for
cancellation, be deemed to be no longer outstanding for any
purpose and all rights with respect to such shares shall
thereupon cease and terminate, except only the right of the
holders of the certificates for such shares to receive, out of
the funds so deposited in trust, from and after the time of such
deposit, the amount payable upon the redemption thereof, without
interest.
13.9.9. Cancelled Shares. The Fifth Series Shares,
purchased upon tender or redeemed as herein provided, shall be
cancelled and upon such cancellation shall be deemed to be
authorized and unissued shares of Preferred Stock, without par
value, of the Corporation but shall not be reissued as shares of
the same or any theretofore outstanding series.
13.9.10. Default. Default by the Corporation in complying
with the provisions of paragraph 6 or 8 hereof shall preclude the
declaration or the payment of dividends or the making of any
other distribution whatsoever upon the Corporation Common Stock
(other than a distribution in shares of its Corporation Common
Stock) until the Corporation shall have cured such default by
depositing the funds necessary therefor in the manner and upon
the terms herein provided. The holders of the Fifth Series Shares
shall not be entitled to apply to any court of law or equity for
a money judgment or remedy on account of any such default other
than to restrain the Corporation from the actions specified above
upon the Corporation Common Stock until such default shall have
been cured.
13.9.11. Liquidation Rights. In the event of any
liquidation, dissolution or winding up of the Corporation the
holders of the Fifth Series will be entitled to receive out of
the assets of the Corporation available for distribution to
stockholders, before any distribution of the assets shall be made
to the holders of Corporation Common Stock, the sum of $100,000
per share, plus an amount equal to cumulative dividends accrued
and unpaid thereon to the date of distribution to holders of the
Fifth Series. If upon any liquidation, dissolution or winding up
of the Corporation the amounts payable with respect to the Fifth
Series and any other series of Preferred Stock which ranks on a
parity with the Fifth Series are not paid in full, the holders of
the Fifth Series and such parity Preferred Stock will share
ratably in any distribution of assets in proportion to the full
preferential amounts to which they are entitled.
PREFERRED STOCK-SIXTH SERIES
(1) Designation and Amount. The shares of such
Series shall be designated as "Preferred Stock-Sixth
Series, Junior Participating" (hereafter "Sixth
Series") and the number of shares constituting such
series shall be one million five hundred thousand
(1,500,000).
(2) Dividends.
(A) Subject to the prior and superior rights
of the holders of any shares of any other series
of Preferred Stock of the Corporation ("Preferred
Stock"), or any similar stock ranking prior and
superior to the shares of the Sixth Series with
respect to dividends, the holders of shares of the
Sixth Series, in preference to the holders of
Common Stock and any shares of stock ranking
junior (either as to dividends or upon
liquidation, dissolution or winding up) to the
shares of the Sixth Series (collectively with such
Common Stock, "Junior Stock"), shall be entitled
to receive, when, as and if declared by the Board
of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash,
on January 1, April 1, July 1 and October 1 in
each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date") in an
amount (rounded to the nearest cent) equal to the
greater of (a) $100.00 or (b) the product of the
FON Group Multiple (as defined below) times the
aggregate per share amount of all cash dividends,
plus the product of the FON Group Multiple times
the aggregate per share amount (payable in cash,
based upon the fair market value at the time the
non-cash dividend or other distribution is
declared as determined in good faith by the Board
of Directors) of all non-cash dividends or other
distributions other than a dividend payable in
shares of FON Group Common Stock, or a subdivision
of the outstanding shares of FON Group Common
Stock (by reclassification or otherwise), declared
(but not withdrawn) on the FON Group Common Stock
since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of
the Sixth Series.
(B) As used herein, the FON Group Multiple
shall initially be 1,000. In the event the
Corporation shall (i) declare any dividend on FON
Group Common Stock payable in shares of such
stock, (ii) subdivide the outstanding FON Group
Common Stock, or (iii) combine the outstanding
FON Group Common Stock into a smaller number of
shares, then in each such case the FON Group
Multiple shall be adjusted by multiplying such
amount by a fraction the numerator of which is the
number of shares of FON Group Common Stock
outstanding immediately after such event and the
denominator of which is the number of shares of
FON Group Common Stock that were outstanding
immediately prior to such event.
(C) The Corporation shall declare a dividend
or distribution on the Sixth Series as provided
above in paragraph (A) of this Section (2)
immediately after it declares a dividend or
distribution on the FON Group Common Stock (other
than a dividend payable in shares of FON Group
Common Stock); provided, however, that in the
event no dividend or distribution shall have been
declared on the FON Group Common Stock during the
period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment
Date, the minimum quarterly dividend of $100.00 on
the Sixth Series shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(D) Dividends shall begin to accrue and be
cumulative on outstanding shares of Sixth Series
from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of
Sixth Series, unless the date of issue of such
shares of Sixth Series is prior to the record date
for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date
for the determination of holders of shares of
Sixth Series entitled to receive a quarterly
dividend and before such Quarterly Dividend
Payment Date, in either of which cases such
dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall cumulate but
shall not bear interest. Dividends paid on the
shares of Sixth Series in an amount less than the
total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such
shares at the time outstanding.
(3) Voting Rights. Except as prescribed by law
and in addition to the rights provided for in ARTICLE
SIXTH of the Articles of Incorporation of the
Corporation, as amended, the holders of the shares of
the Sixth Series shall be entitled to vote at any
annual or special meeting of the stockholders of the
Corporation, for each share of Sixth Series, a number
of votes equal to the product of the FON Group Multiple
then in effect times the highest number of votes that
any share of FON Group Common Stock entitles its holder
to vote at such meeting of stockholders of the
Corporation. The holders of the shares of the Sixth
Series shall be entitled to exercise such voting rights
with the holders of Sprint Common Stock prior to the
Recapitalization and Series 1 FON Stock after the
Recapitalization, without distinction as to class, at
any annual or special meeting of stockholders for the
election of directors and on any other matter submitted
to a vote of the stockholders of the Corporation at
such meeting. Except as otherwise provided herein, in
the Articles of Incorporation of the Corporation, in
any other Certificate of Designation establishing a
series of Preferred Stock or any similar stock or
otherwise required by law, the holders of the shares of
the Sixth Series and the holders of Common Stock shall
vote together as one class on all matters submitted to
a vote of stockholders of the Corporation.
(4) Certain Restrictions.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the shares
of the Sixth Series as provided in Section (2) are
in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not
declared, on shares of the Sixth Series
outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends (except a
dividend payable in FON Group Common Stock
and/or any other Junior Stock) on, make any
other distributions on, or redeem or purchase
or otherwise acquire for consideration any
shares of Junior Stock;
(ii) declare or pay dividends on or make
any other distribution on any shares of stock
ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding
up) with the shares of the Sixth Series,
except dividends paid ratably on the shares
of the Sixth Series and all such parity stock
on which dividends are payable or in arrears
in proportion to the total amounts to which
the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise
acquire for consideration any shares ranking
on a parity (either as to dividends or upon
dissolution, liquidation or winding up) with
the shares of the Sixth Series, provided that
the Corporation may at any time redeem,
purchase or otherwise acquire shares of such
parity stock in exchange for shares of Junior
Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of the Sixth Series,
or any shares of stock ranking on a parity
with the shares of the Sixth Series, except
in accordance with a purchase offer made in
writing or by publication (as determined by
the Board of Directors) to all holders of
such shares upon such terms as the Board of
Directors, after consideration of the
respective annual dividend rates and other
relative rights and preferences of the
respective series and classes, shall
determine in good faith will result in fair
and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section (4),
purchase or otherwise acquire such shares at such
time and in such manner.
(5) Reacquired Shares. Any shares of the Sixth
Series purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and
restrictions on issuance set forth herein, in the
Articles of Incorporation, in any other Certificate of
Designation establishing a series of Preferred Stock or
any similar stock or as otherwise required by law.
(6) Liquidation, Dissolution or Winding Up.
(A) In the event of any voluntary or
involuntary liquidation, dissolution or winding up
of the Corporation, the holders of the shares of
the Sixth Series shall be entitled to receive, in
preference to the holders of Junior Stock, the
greater of (a) $1,000.00 per share, plus accrued
and unpaid dividends to the date of distribution,
whether or not earned or declared, or (b) an
amount per share equal to the product of the FON
Group Multiple then in effect times the aggregate
amount to be distributed per share to holders of
FON Group Common Stock.
(B) In the event of any voluntary or
involuntary liquidation, dissolution or winding up
of the Corporation, the holders of stock ranking
on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the
Sixth Series shall not receive any distributions
except for distributions made ratably on the Sixth
Series and all other such parity stock in
proportion to the total amounts to which the
holders of all such shares are entitled upon such
liquidation, dissolution or winding up.
(7) Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property,
then in any such case the shares of the Sixth Series
shall at the same time be similarly exchanged or
changed in an amount per share equal to the product of
the FON Group Multiple then in effect times the
aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be,
into which or for which each share of FON Group Common
Stock is changed or exchanged.
(8) Ranking. The shares of the Sixth Series
shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise. The
shares of the Sixth Series shall rank on a parity with
the Corporation's Preferred Stock-Series Eighth, Junior
Participating, as to the payment of dividends and the
distribution of assets. Nothing herein shall preclude
the Board of Directors of the Corporation from creating
any additional series of Preferred Stock or any similar
stock ranking on a parity with or prior to the shares
of the Sixth Series as to the payment of dividends or
distribution of assets.
(9) Fractional Shares. Shares of the Sixth
Series may be issued in fractions of a share which
shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to
have the benefit of all other rights of holders of
shares of the Sixth Series.
(10) Definitions. For purposes of this amended and restated
Certificate of Designation, Preferences and Rights of Sixth
Series, unless the context otherwise requires:
(11)
(A) "Class A Common Stock-Series DT" (i)
prior to the filing of the Subsequent Charter
Amendment pursuant to K.S.A. Section 17-6003(d), shall
have the meaning set forth in the Initial Charter
Amendment, and (ii) after the filing of the
Subsequent Charter Amendment pursuant to K.S.A. Section
17-6003(d), shall have the meaning set forth in
the Subsequent Charter Amendment.
(B) "Common Stock" shall mean (A) if prior
to the filing of the Subsequent Charter Amendment
pursuant to K.S.A. Section 17-6003(d): Sprint Common
Stock, and/or Series 2 Common Stock, and/or Old
Class A Common Stock, and/or Class A Common Stock-
Series DT, and/or Series 1 PCS Stock, and/or
Series 2 PCS Stock, and/or Series 3 PCS Stock, in
each case as the context requires, and (B) if
after the filing of the Subsequent Charter
Amendment: Series 1 FON Stock, and/or Series 2
FON Stock, and/or Series 3 FON Stock, and/or Old
Class A Common Stock, and/or Class A Common Stock-
Series DT, and/or Series 1 PCS Stock, and/or
Series 2 PCS Stock, and/or Series 3 PCS Stock, in
each case as the context requires.
(C) "FON Group Common Stock" shall mean
(i) if prior to the filing of the Subsequent
Charter Amendment pursuant to K.S.A. Section 17-6003(d),
Sprint Common Stock and/or Series 2 Common Stock,
in each case as the context requires, and (ii) if
after the filing of the Subsequent Charter
Amendment pursuant to K.S.A. Section 17-6003(d),
Series 1 FON Stock, and/or Series 2 FON Stock,
and/or Series 3 FON Stock, in each case as the
context requires.
(D) "FON Group Multiple" shall have the
meaning set forth in Section 2(B).
(E) "Initial Charter Amendment" shall have
the meaning set forth in the Restructuring and
Merger Agreement.
(F) "Old Class A Common Stock" (i) prior to
the filing of the Subsequent Charter Amendment
pursuant to K.S.A. Section 17-6003(d), shall have the
meaning set forth in the Initial Charter
Amendment, and (ii) after the filing of the
Subsequent Charter Amendment pursuant to K.S.A. Section
17-6003(d), shall have the meaning set forth in
the Subsequent Charter Amendment.
(G) "Recapitalization" shall mean the
reclassification of each outstanding share of
Sprint Common Stock into one share of Series 1 FON
Stock and one-half of a share of Series 1 PCS
Stock to be effected by filing of the Subsequent
Charter Amendment.
(H) "Restructuring and Merger Agreement"
shall mean that certain agreement, dated as of May
26, 1998, by and among the Corporation, Tele-
Communications, Inc., a Delaware corporation,
Comcast Corporation, a Pennsylvania corporation,
Cox Communications, Inc., a Delaware corporation,
TCI Spectrum Holdings, Inc., a Colorado
corporation, Comcast Telephony Services, a
Delaware general partnership, Cox Telephony
Partnership, a Delaware general partnership,
Sprint Enterprises, L.P., a Delaware limited
partnership, TCI Philadelphia Holdings, Inc., a
Delaware corporation, Com Telephony Services,
Inc., a Delaware corporation, Comcast Telephony
Services, Inc., a Delaware corporation, Cox
Telephony Partners, Inc., a Delaware corporation,
Cox Communications Wireless, Inc., a Delaware
corporation, SWV One, Inc., a Delaware
corporation, SWV Two, Inc., a Delaware
corporation, SWV Three, Inc., a Delaware
corporation, SWV Four, Inc., a Delaware
corporation, SWV Five, Inc., a Delaware
corporation, and SWV Six, Inc., a Colorado
corporation.
(I) "Series 2 Common Stock" shall mean the
Common Stock - Series 2, par value $2.50 per
share, of the Corporation, which will be created
by the filing of the Initial Charter Amendment.
(J) "Series 1 FON Stock" shall mean the FON
Common Stock - Series 1, par value $2.00 per
share, of the Corporation, which will be created
by the filing of the Subsequent Charter Amendment.
(K) "Series 2 FON Stock" shall mean the FON
Common Stock - Series 2, par value $2.00 per
share, of the Corporation, which will be created
by the filing of the Subsequent Charter Amendment.
(L) "Series 3 FON Stock" shall mean the FON
Common Stock - Series 3, par value $2.00 per
share, of the Corporation, which will be created
by the filing of the Subsequent Charter Amendment.
(M) "Series 1 PCS Stock" shall mean the PCS
Common Stock - Series 1, par value $1.00 per
share, of the Corporation, which will be created
by the filing of the Initial Charter Amendment.
(N) "Series 2 PCS Stock" shall mean the PCS
Common Stock - Series 2, par value $1.00 per
share, of the Corporation, which will be created
by the filing of the Initial Charter Amendment.
(O) "Series 3 PCS Stock" shall mean the PCS
Common Stock - Series 3, par value $1.00 per
share, of the Corporation, which will be created
by the filing of the Initial Charter Amendment.
(P) "Sprint Common Stock" shall mean Common
Stock, par value $2.50 per share, of the
Corporation, as provided for in the Initial
Charter Amendment.
(Q) "Subsequent Charter Amendment" shall
have the meaning set forth in the Restructuring
and Merger Agreement.
PREFERRED STOCK-SEVENTH SERIES, CONVERTIBLE
1. Amount, Rank and Designation. The amount of shares to
constitute the Seventh Series of Preferred Stock shall be 300,000
shares. The designation thereof shall be "Preferred
Stock-Seventh Series, Convertible" (hereinafter "Seventh
Series"). Shares of the Seventh Series shall rank junior as to
dividends and upon liquidation to shares of the First Series of
the Preferred Stock, Second Series of the Preferred Stock, Fifth
Series of the Preferred Stock and any other Preferred Stock
designated as senior to the Seventh Series as to dividends or
upon liquidation, dissolution or winding up ("Senior Stock"), and
shall have a preference over the shares of the Corporation Common
Stock and any other class or series of Junior Stock.
2. Dividends. Holders of record of shares of the Seventh
Series will be entitled to receive, when, as and if declared by
the Board of Directors of the Corporation, out of funds legally
available for the payment of dividends, cumulative cash dividends
("Preferred Dividends") payable at the rate of $6.73 per share
quarterly in arrears on each September 30, December 31, March 31
and June 30 (each a "Dividend Payment Date") or, if any such date
is not a business day (as defined herein), the Preferred
Dividends due on such Dividend Payment Date shall be paid on the
next succeeding business day. The first dividend period shall be
from the date of initial issuance of the Seventh Series to but
excluding December 31, 1998 and the first Preferred Dividend
shall be payable on the first Dividend Payment Date thereafter.
Preferred Dividends on the Seventh Series shall be cumulative and
shall accumulate from the date of original issuance of the
Seventh Series. Preferred Dividends shall be payable to holders
of record as they appear on the stock register of the
Corporation, net of any amounts required to be withheld for or
with respect to taxes, on such record dates, not more than 60
days preceding the payment date thereof, as shall be fixed by the
Board of Directors. Preferred Dividends payable on the Seventh
Series for any period less than a full quarterly dividend period
shall be computed on the basis of a 360-day year of twelve 30-day
months and the actual number of days elapsed in any period less
than one month. Preferred Dividends shall accrue on a daily
basis whether or not there are funds of the Corporation legally
available for the payment of such dividends and whether or not
such Preferred Dividends are declared. Accrued but unpaid
Preferred Dividends shall accumulate as of the Dividend Payment
Date on which they first become payable, but no interest shall
accrue on accumulated but unpaid Preferred Dividends. Before any
dividends on the Corporation Common Stock or any other class or
series of stock of the Corporation ranking junior to the Seventh
Series as to dividends shall be paid or declared and set apart
for payment, the holders of shares of the Seventh Series shall be
entitled to receive the full accumulated cash dividends for all
quarterly dividend periods ending on or before the date on which
any dividend on any such class or series of stock ranking junior
to the Seventh Series as to dividends is declared or is to be
paid.
3. Conversion.
(a) Each holder of shares of Seventh Series may at
such holder's option at any time convert any or all of such
holder's shares of Seventh Series into (i) if such holder is a
Cable Holder, shares of Series 2 PCS Stock, and (ii) if such
holder is not a Cable Holder, shares of Series 1 PCS Stock. All
references herein to shares of Series 2 PCS Stock issuable upon
conversion of shares of Seventh Series shall be deemed to refer
to shares of Series 1 PCS Stock if the holder of such Seventh
Series is not a Cable Holder. Such shares of Seventh Series
shall be convertible into a number of fully paid and
nonassessable whole shares of Series 2 PCS Stock as is equal to
the aggregate Liquidation Preference of the shares of Seventh
Series surrendered for conversion divided by the Initial
Conversion Price (as adjusted from time to time, the "Conversion
Price"). In case of the redemption of any shares of the Seventh
Series, such right of conversion shall cease and terminate as to
the shares duly called for redemption at the close of business on
the date fixed for redemption, unless the Corporation defaults in
the payment of the redemption price plus all accrued and unpaid
dividends. If the Corporation defaults with respect to such
payment, the right to convert the shares designated for
redemption shall terminate at the close of business on the
business day next preceding the date that such default is cured.
Upon conversion the Corporation shall make no payment or
adjustment on account of dividends accrued or in arrears on the
Seventh Series surrendered for conversion.
(b) Holders of shares of Seventh Series at the close
of business on a record date for any payment of declared
Preferred Dividends shall be entitled to receive the Preferred
Dividends payable on those shares of Seventh Series on the
corresponding Dividend Payment Date notwithstanding the
conversion pursuant to this section of those shares of Seventh
Series following such record date and before the close of
business on such Dividend Payment Date. Except as provided in
the preceding sentence, upon any conversion of shares of Seventh
Series, the Corporation shall make no payment of or allowance of
unpaid Preferred Dividends, whether or not in arrears, on such
shares of Seventh Series, or for previously declared dividends or
distributions on the shares of Series 2 PCS Stock issued upon
conversion.
(c) Conversion of shares of Seventh Series may be
effected by delivering certificates evidencing such shares of
Seventh Series, together with written notice of conversion
stating the number of shares to be converted and a proper
assignment of such certificates to the Corporation or in blank,
to the office of the transfer agent for the Seventh Series or to
any other office or agency maintained by the Corporation for that
purpose and otherwise in accordance with conversion procedures
established by the Corporation. Each conversion shall be deemed
to have been effected immediately before the close of business on
the date on which the foregoing requirements shall have been
satisfied. The Corporation shall as promptly as practicable
after any conversion pursuant to this section issue and deliver
to the converting holder a certificate or certificates
representing the number of whole shares of Series 2 PCS Stock
into which such shares of Seventh Series were converted. Upon
conversion of less than the entire number of the shares of
Seventh Series represented by any certificate, the Corporation
shall issue and deliver to the converting holder a new
certificate representing the number of shares of Seventh Series
not converted. The Corporation shall effect such conversion as
soon as practicable; provided that the Corporation shall not be
required to convert shares of Seventh Series, and no surrender of
shares of Seventh Series shall be effective for that purpose,
while the stock transfer books of the Corporation for the Series
2 PCS Stock are closed for any reason, but the surrender of
shares of Seventh Series for conversion during any period while
such books are so closed shall become effective for conversion
immediately upon the reopening of such books, as if the
conversion had been made on the date such shares of Seventh
Series were surrendered, and at the Conversion Price in effect on
the date of such surrender.
(d) No fraction of a share of Series 2 PCS Stock shall
be issued upon any conversion. In lieu of the fraction of a
share to which the holder of shares of the Seventh Series
surrendered for conversion would otherwise be entitled, such
holder shall receive, as soon as practicable after the date of
conversion, an amount in cash equal to the same fraction of the
market value of a full share of Series 1 PCS Stock. For the
purposes of this subparagraph, the market value of a share of
Series 1 PCS Stock shall be the Closing Price of such a share on
the day immediately preceding the date upon which such shares of
Seventh Series are surrendered for conversion.
(e) The Conversion Price in effect at any time shall
be subject to adjustment as follows:
(i) If the Corporation shall at any time after
the date of this Agreement: (A) pay a dividend on the
PCS Stock in shares of PCS Stock, (B) subdivide the
outstanding shares of PCS Stock into a greater number
of shares, (C) combine the outstanding shares of PCS
Stock into a smaller number of shares, (D) pay a
dividend on the PCS Stock in shares of its capital
stock (other than PCS Stock), or (E) issue any shares
of its capital stock by reclassification of the shares
of PCS Stock (other than any reclassification by way of
merger or binding share exchange that is subject to
Section 3(e)(viii)), then the Conversion Price in
effect at the time of the record date for such dividend
or of the effective date of such subdivision,
combination or reclassification shall be
proportionately adjusted so that if the holder elects
to convert shares of Seventh Series after such time,
the holder thereof shall be entitled to receive the
aggregate number of shares of PCS Stock which, if such
conversion had occurred immediately prior to such time,
he would have owned upon such conversion and been
entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any
event listed above shall occur. Subject to Section
3(e)(vi) for a dividend or distribution, the adjustment
shall become effective immediately after the record
date for the dividend or distribution, and for a
subdivision, combination or reclassification, the
adjustment shall become effective immediately after the
effective date of the subdivision, combination or
reclassification.
(ii) If the Corporation shall issue rights or
warrants to the holders of the PCS Stock entitling them
(for a period expiring within 45 days after the record
date for the determination of stockholders entitled to
receive such rights or warrants) to subscribe for or
purchase shares of PCS Stock (or Convertible
Securities) at a price per share (or having a
conversion price per share, after adding thereto an
allocable portion of the Conversion Price of the right
or warrant to purchase such Convertible Securities,
computed on the basis of the maximum number of shares
of PCS Stock issuable upon conversion of such
Convertible Securities) less than the Current Market
Price per share on the Determination Date, the
Conversion Price shall be adjusted by multiplying the
conversion price in effect immediately prior to such
record date by a fraction, of which the numerator shall
be the number of shares of PCS Stock outstanding on
such record date plus the number of shares which the
aggregate offering price of the total number of shares
of PCS Stock so offered (or the aggregate initial
conversion price of the Convertible Securities so
offered, after adding thereto the aggregate conversion
price of the rights or warrants to purchase such
Convertible Securities) to holders of PCS Stock (and
to holders of Convertible Securities referred to in the
following paragraph if the distribution to which this
paragraph (ii) applies is also being made to such
holders) would purchase at such Current Market Price,
and of which the denominator shall be the number of
shares of PCS Stock outstanding on such record date
plus the number of additional shares of PCS Stock so
offered for subscription or purchase (or into which the
Convertible Securities so offered are initially
convertible). The adjustment contemplated by this
paragraph (ii) shall be made successively whenever any
such rights or warrants are issued and shall become
effective immediately after the close of business on
such record date; however, to the extent that shares of
PCS Stock (or Convertible Securities) have not been
issued when such rights or warrants expire (or, in the
case of rights or warrants to purchase Convertible
Securities which have been exercised, if all of the
shares of PCS Stock issuable upon conversion of such
Convertible Securities have not been issued prior to
the expiration of the conversion right thereof), the
Conversion Price shall be readjusted to the Conversion
Price which would then be in effect had the adjustments
made upon the issuance of such rights or warrants been
made upon the basis of delivery of only the number of
shares (or Convertible Securities) actually issued upon
the exercise of such rights or warrants (or the
conversion of such Convertible Securities).
For purposes of this paragraph (ii) the number of
shares of PCS Stock outstanding on any record date
shall be deemed to include the maximum number of shares
of PCS Stock the issuance of which would be necessary
to effect the full exercise, exchange or conversion of
all Convertible Securities outstanding on such record
date which are then exercisable, exchangeable or
convertible at a price (before giving effect to any
adjustment to such price for the distribution to which
this paragraph (ii) is being applied) equal to or less
than the Current Market Price per share of PCS Stock
on the applicable Determination Date, if all of such
Convertible Securities were deemed to have been
exercised, exchanged or converted immediately prior to
the opening of business on such record date. In case
any subscription price may be paid in a consideration
part or all of which shall be in a form other than
cash, the value of such consideration shall be as
determined by the Board of Directors of the
Corporation.
(iii) If the Corporation shall distribute to
the holders of PCS Stock evidences of its indebtedness
or assets or subscription rights or warrants (excluding
(x) dividends or distributions referred to in
Section 3(e)(i) and distributions of rights or warrants
referred to in Section 3(e)(ii) and (y) cash dividends
or other cash distributions, unless such cash dividends
or cash distributions are Extraordinary Cash
Dividends), the Conversion Price shall be adjusted by
multiplying the Conversion Price in effect immediately
prior to the record date for the determination of
stockholders entitled to receive such distribution by a
fraction, of which the numerator shall be the number of
shares of PCS Stock outstanding on such record date
multiplied by the Current Market Price on the
Determination Date, less the fair market value (as
determined by the Board of Directors of the
Corporation) on such record date of the evidences of
indebtedness, assets (including Extraordinary Cash
Dividends), subscription rights or warrants to be
distributed to the holders of PCS Stock (and to the
holders of Convertible Securities referred to below if
the distribution to which this paragraph (iii) applies
is also being made to such holders), and of which the
denominator shall be the number of shares of PCS Stock
outstanding on such record date multiplied by such
Current Market Price. For purposes of this
paragraph (iii), the number of shares of PCS Stock
outstanding on any record date shall be deemed to
include the maximum number of shares of PCS Stock the
issuance of which would be necessary to effect the full
exercise, exchange or conversion of all Convertible
Securities outstanding on such record date which are
then exercisable, exchangeable or convertible at a
price (before giving effect to any adjustment to such
price for the distribution to which this
paragraph (iii) is being applied) equal to or less than
the Current Market Price per share of PCS Stock on the
applicable Determination Date, if all of such
Convertible Securities were deemed to have been
exercised, exchanged or converted immediately prior to
the opening of business on such record date.
For purposes of this paragraph (iii) , the term
"Extraordinary Cash Dividend" shall mean any cash
dividend with respect to the PCS Stock the amount of
which, together with the aggregate amount of cash
dividends on the PCS Stock to be aggregated with such
cash dividend in accordance with the following
provisions of this paragraph, equals or exceeds the
threshold percentage set forth below in the following
sentence. If, upon the date prior to the Ex-Dividend
Date with respect to a cash dividend on the PCS Stock,
the aggregate of the amount of such cash dividend
together with the amounts of all cash dividends on the
PCS Stock with Ex-Dividend Dates occurring in the 365
consecutive day period ending on the date prior to the
Ex-Dividend Date with respect to the cash dividend to
which this provision is being applied (other than any
such other cash dividends with Ex-Dividend Dates
occurring in such period for which a prior adjustment
to the Conversion Price was previously made under this
paragraph (iii)) equals or exceeds on a per share basis
5% of the average of the Closing Prices during the
period beginning on the date after the first such Ex-
Dividend Date in such period and ending on the date
prior to the Ex-Dividend Date with respect to the cash
dividend to which this provision is being applied
(except that if no other cash dividend has had an Ex-
Dividend Date occurring in such period, the period for
calculating the average of the Closing Prices shall be
the period commencing 365 days prior to the date
immediately prior to the Ex-Dividend Date with respect
to the cash dividend to which this provision is being
applied), such cash dividend together with each other
cash dividend with an Ex-Dividend Date occurring in
such 365-day period that is aggregated with such cash
dividend in accordance with this paragraph shall be
deemed to be an Extraordinary Cash Dividend.
The adjustment pursuant to the foregoing
provisions of this paragraph (iii) shall be made
successively whenever any distribution to which this
paragraph (iii) applies is made, and shall become
effective immediately after the record date for the
determination of stockholders entitled to receive the
distribution.
(iv) If this Section 3(e) requires adjustments to
the Conversion Price under more than one of clause (D)
of the first sentence of paragraph (i), paragraph (ii)
or paragraph (iii), and the record dates for the
distribution giving rise to such adjustments shall
occur on the same date, then such adjustments shall be
made by applying, first, the provisions of
paragraph (i), second the provisions of paragraph (iii)
and, third, the provisions of paragraph (ii).
(v) No adjustment in the Conversion Price shall
be required unless such adjustment would require an
increase or decrease of at least one percent thereof;
provided, however, that any adjustments which by reason
of this paragraph (v) are not required to be made shall
be carried forward and taken into account in any
subsequent adjustment. All calculations under this
Section 3(e) shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may
be.
(vi) In any case in which this Section 3(e) shall
require that an adjustment in the Conversion Price be
made effective as of the record date for a specified
event, the Corporation may elect to defer until the
occurrence of such event (x) issuing to the holder of
the Seventh Series the Shares, if any, issuable upon
such conversion over and above the Shares, if any,
issuable upon such conversion on the basis of the
Conversion Price in effect prior to such adjustment, if
the Seventh Series is converted after such record date,
and (y) paying to the holder cash or its check in lieu
of any fractional interest to which the holder would be
entitled pursuant to Section 3(d); provided, however,
that the Corporation shall deliver to the holder a due
bill or other appropriate instrument evidencing the
holder's right to receive such additional Shares and
such cash upon the occurrence of the event requiring
such adjustment.
(vii) If the Corporation consolidates with or
merges into, or transfers (other than by mortgage or
pledge) its properties and assets substantially as an
entirety to, another Person or the Corporation is a
party to a merger or binding share exchange which
reclassifies or changes its outstanding PCS Stock, or
the PCS Stock is converted into another class or series
of capital stock of the Corporation, the Corporation
(or its successor in such transaction) or the
transferee of such properties and assets shall make
appropriate provision so that the holder's certificate
representing shares of Seventh Series shall thereafter
be convertible, upon the terms and conditions specified
in the certificates, for the kind and amount of
securities, cash or other assets receivable upon such
transaction by a holder of the number of shares of PCS
Stock purchasable upon conversion of the holder's
Seventh Series immediately before the effective date of
such transaction (assuming, to the extent applicable,
that such holder of PCS Stock failed to exercise any
rights of election with respect thereto, and received
per Share the kind and amount of securities, cash or
other assets received per share of PCS Stock by a
plurality of the nonelecting shares of PCS Stock); and
in any such case, if necessary, the provisions set
forth in this Section 3(e) with respect to the rights
and interests thereafter of the holder of the Seventh
Series shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any such
other securities or assets thereafter deliverable on
the conversion of the holder's Seventh Series. The
subdivision or combination of the PCS Stock at any time
outstanding into a greater or lesser number of shares
of PCS Stock shall not be deemed to be a
reclassification of the PCS Stock for the purposes of
this subsection. The Corporation shall not effect any
such consolidation, merger, transfer or binding share
exchange unless prior to or simultaneously with the
consummation thereof the successor (if other than the
Corporation) resulting from such consolidation or
merger or the Person purchasing such assets or other
appropriate Person shall assume, by written instrument,
the obligation to deliver to the holders of the Seventh
Series such securities, cash or other assets as, in
accordance with the foregoing provisions, the holder
may be entitled to purchase and the other obligations
under this Certificate of Designations.
The Corporation may make such reductions in the
Conversion Price, in addition to those required by
paragraphs (i), (ii) and (iii) of this Section 3(e), as
it shall in its sole discretion determine to be
advisable.
(viii) Subject to Section 3(e)(v) and to the
remaining provisions of this Section 3(e)(viii), in the
event that a holder of Seventh Series would be entitled
to receive upon conversion thereof pursuant to this
Section 3(e) any Redeemable Capital Stock and the
Corporation redeems, exchanges or otherwise acquires
all of the outstanding shares or other units of such
Redeemable Capital Stock (such event being a
"Redemption Event"), then, from and after the effective
date of such Redemption Event, the holders of shares of
Seventh Series then outstanding shall be entitled to
receive upon conversion of such shares, in lieu of
shares or units of such Redeemable Capital Stock, the
kind and amount of shares of stock and other securities
and property receivable upon the Redemption Event by a
holder of the number of shares or units of such
Redeemable Capital Stock into which such shares of
Seventh Series could have been converted immediately
prior to the effective date of such Redemption Event
(assuming, to the extent applicable, that such holder
failed to exercise any rights of election with respect
thereto and received per share or unit of such
Redeemable Capital Stock the kind and amount of stock
and other securities and property received per share or
unit by a plurality of the non-electing shares or units
of such Redeemable Capital Stock), and (from and after
the effective date of such Redemption Event) the
holders of the Seventh Series shall have no other
conversion rights under these provisions with respect
to such Redeemable Capital Stock.
Notwithstanding the foregoing, if the redemption
price for the shares of such Redeemable Capital Stock
is paid in whole or in part in Redemption Securities,
and the Mirror Preferred Stock Condition is met, the
Seventh Series shall not be convertible into such
Redemption Securities and, from and after the
applicable redemption date, the holders of any shares
of Seventh Series that have not been exchanged for
Mirror Preferred Stock and Exchange Preferred Stock
shall have no conversion rights under these provisions
except for any conversion right that may have existed
immediately prior to the effective date of the
Redemption Event with respect to any shares of stock
(including the PCS Stock) or other securities or
property other than the Redeemable Capital Stock so
redeemed. The Corporation shall use all commercially
reasonable efforts to ensure that the Mirror Preferred
Stock Condition is satisfied. The "Mirror Preferred
Stock Condition" will be satisfied in connection with a
redemption of any Redeemable Capital Stock into which
the Seventh Series is then convertible if appropriate
provision is made so that the holders of the Seventh
Series have the right to exchange their shares of
Seventh Series on the effective date of the Redemption
Event for Exchange Preferred Stock of the Corporation
and Mirror Preferred Stock of the issuer of the
Redemption Securities. The sum of the initial
liquidation preferences of the shares of Exchange
Preferred and Mirror Preferred Stock delivered in
exchange for a share of Seventh Series will equal the
Liquidation Preference of a share of Seventh Series on
the effective date of the Redemption Event. The Mirror
Preferred Stock will have an aggregate initial
liquidation preference equal to the product of the
aggregate Liquidation Preference of the shares of
Seventh Series exchanged therefor and the quotient of
(x) the product of the amount of shares of the
Redeemable Capital Stock for which each share of
Seventh Series is then convertible to be redeemed
(determined immediately prior to the effective date of
the Redemption Event) and the average of the daily
Closing Prices of the Redeemable Capital Stock for the
period of ten consecutive trading days ending on the
third trading day prior to the effective date of the
Redemption Event, divided by (y) the sum of the amount
determined pursuant to clause (x), plus the fair value
of the shares of stock or other securities or property
(other than the Redeemable Capital Stock being
redeemed) that would have been receivable by a holder
of Seventh Series upon conversion thereof immediately
prior to the effective date of the Redemption Event
(such fair value to be determined in the case of stock
or other securities with a Closing Price in the same
manner as provided in clause (x) and otherwise by the
Board of Directors in the exercise of its judgment).
The shares of Exchange Preferred Stock will have an
aggregate initial liquidation preference equal to the
difference between the aggregate Liquidation Preference
of the shares of Seventh Series exchanged therefor and
the aggregate initial liquidation preference of the
Mirror Preferred Stock. No shares of Exchange
Preferred Stock will be issued in exchange for the
Seventh Series if the shares of Exchange Preferred
Stock would have no Liquidation Preference as a result
of the above formula.
(ix) If the Corporation effects a Spin Off, the
Corporation shall make appropriate provision so that
the holders of the Seventh Series have the right to
exchange their shares of Seventh Series on the
effective date of the Spin Off for Exchange Preferred
Stock of the Corporation and Mirror Preferred Stock of
the issuer of the Spin Off Securities. The sum of the
initial liquidation preference of the shares of
Exchange Preferred Stock and Mirror Preferred Stock
delivered in exchange for a share of Seventh Series
will equal the Liquidation Preference of a share of
Seventh Series on the effective date of the Spin Off.
The Mirror Preferred Stock will have an aggregate
liquidation preference equal to the product of the
aggregate Liquidation Preference of the shares of
Seventh Series exchanged therefor and the quotient of
(x) the product of the number (or fraction) of Spin Off
Securities that would have been receivable upon such
Spin Off by a holder of the number of shares of PCS
Stock issuable upon conversion of a share of Seventh
Series immediately prior to the effective date of the
Spin Off and the average of the daily Closing Prices of
the Spin Off Securities for the period of ten
consecutive trading days commencing on the tenth
trading day following the effective date of the Spin
Off, divided by (y) the sum of the amount determined
pursuant to clause (x), plus the fair value of the
shares of PCS Stock and other securities or property
(other than Spin Off Securities) that would have been
receivable by a holder of a share of Seventh Series in
the Spin Off following conversion thereof immediately
prior to the effective date of the Spin Off (such fair
value to be determined in the case of PCS Stock or
other securities with a Closing Price in the same
manner as provided in clause (x) and otherwise by the
Board of Directors in the exercise of its judgment).
The shares of Exchange Preferred Stock will have an
aggregate initial liquidation preference equal to the
difference between the aggregate Liquidation Preference
of the shares of Seventh Series exchanged therefor and
the aggregate initial liquidation preference of the
Mirror Preferred Stock. No shares of Exchange
Preferred Stock will be issued in exchange for the
Seventh Series if the shares of Exchange Preferred
Stock would have no Liquidation Preference as a result
of the above formula. From and after the effective
date of such Spin Off, the holders of any shares of
Seventh Series that have not been exchanged for Mirror
Preferred Stock and Exchange Preferred Stock as
provided above shall have no conversion rights under
these provisions with respect to such Spin Off
Securities.
(f) The Corporation shall pay any and all documentary
stamp or similar issue or transfer taxes payable in respect of
the issue or delivery of shares of PCS Stock on the conversion of
Seventh Series; provided, however, that the Corporation shall not
be required to pay any tax that may be payable in respect of any
registration of transfer involved in the issue or delivery of
shares of PCS Stock in a name other than that of the registered
holder of Seventh Series converted or to be converted, and no
such issue or delivery shall be made unless and until the person
requesting such issue has paid to the Corporation the amount of
any such tax or has established, to the satisfaction of the
Corporation, that such tax has been paid.
4. Liquidation Rights. Subject to prior payment of
preferred amounts to which any Senior Stock is entitled, in the
event of any liquidation, dissolution or winding up of the
Corporation the holders of the Seventh Series will be entitled to
receive out of the assets of the Corporation available for
distribution to stockholders, before any distribution of the
assets shall be made to the holders of the Corporation Common
Stock or any other class or series of stock ranking junior to the
Seventh Series upon liquidation, the sum of U.S. $1,000 per share
(the "Liquidation Preference"), plus in each case any accumulated
unpaid dividends (whether or not declared), to the date of final
distribution. If upon any liquidation, dissolution or winding up
of the Corporation the amounts payable with respect to the
Seventh Series and any other Parity Stock are not paid in full,
the holders of the Seventh Series and such Parity Stock will
share ratably in any distribution of assets in proportion to the
full preferential amounts to which they are entitled. After
payment of the full amount of the liquidating distribution to
which they are entitled, the holders of Seventh Series shall not
be entitled to any further participation in any distribution of
assets by the Corporation. A consolidation or merger of the
Corporation with or into one or more other corporations (whether
or not the Corporation is the corporation surviving such
consolidation or merger), or a sale, lease or exchange of all or
substantially all of the assets of the Corporation shall not be
deemed to be a voluntary or involuntary liquidation, dissolution,
or winding up of the Corporation. Notice of a liquidation,
dissolution or winding up of the Corporation shall be filed at
each office or agency maintained for the purpose of conversion of
the Seventh Series, and shall be mailed to the holders of Seventh
Series at their last addresses as they shall appear on the stock
register of the Corporation, at least 20 business days before any
such action, stating the date on which any such action is
expected to become effective. The failure to give or receive the
notice required by this Section or any defect therein shall not
affect the legality or validity of any such action.
5. Redemption.
(a) General. Except as provided below and in Section
5(h), the Seventh Series shall not be redeemed by the Corporation
prior to November 23, 2001. The Corporation may at its option
redeem the Seventh Series in whole or in part after November 23,
2001, at any time or from time to time, upon at least thirty
days' prior notice, at a redemption price equal to the
Liquidation Preference per share of Seventh Series, plus any
accumulated unpaid dividends (whether or not declared) up to but
excluding such redemption date. In connection with a Spin Off or
a Redemption Event, the Corporation may, at its option, redeem
the Seventh Series in whole after November 23, 2000, and before
November 23, 2001, upon at least thirty days prior notice, at a
redemption price equal to the Premium Price per share of Seventh
Series, plus any accumulated unpaid dividends (whether or not
declared) up to but excluding such redemption date, which
redemption shall be deemed effective immediately prior to the
consummation of the Spin Off or the Redemption Event. If less
than all the outstanding Seventh Series is to be redeemed, the
shares to be redeemed shall be selected pro rata as nearly as
practicable or by lot, or by such other method as may be
determined by the Board of Directors to be equitable, without
regard to whether the shares to be redeemed are convertible into
Series 1 PCS Stock or Series 2 PCS Stock. Shares so redeemed
shall be cancelled and upon such cancellation shall be deemed to
be authorized and unissued shares of Preferred Stock, without par
value, of the Corporation but shall not be reissued as shares of
the same series.
(b) Mandatory Redemption. To the extent permitted by
law, the Corporation shall redeem, on November 23, 2008 (or, if
such day is not a business day, on the first business day
thereafter) (subject to extension as provided in the last
sentence of this Section 5(b), the "Mandatory Redemption Date"),
all remaining shares of Seventh Series then outstanding, at the
redemption price of $1,000 for each share outstanding, plus an
amount in cash equal to all accrued but unpaid dividends thereon
to the Mandatory Redemption Date. Prior to authorizing or making
such redemption with respect to the Seventh Series, the
Corporation, by resolution of the Board of Directors shall, to
the extent of funds legally available therefor, declare a
dividend on the Seventh Series payable on the Mandatory
Redemption Date in an amount equal to any accrued and unpaid
dividends on the Seventh Series as of such date and, if the
Corporation does not have sufficient legally available funds to
declare and pay all dividends accrued at the time of such
redemption, any remaining accrued and unpaid dividends shall be
added to the redemption price. After paying any accrued and
unpaid dividends pursuant to the foregoing sentence, if the funds
of the Corporation legally available for redemption of shares of
the Seventh Series then required to be redeemed are insufficient
to redeem the total number of such shares then outstanding, those
funds which are legally available shall be used to redeem the
maximum possible number of shares of the Seventh Series. At any
time and from time to time thereafter, when additional funds of
the Corporation are legally available to discharge its obligation
to redeem all of the outstanding shares of Seventh Series
required to be redeemed pursuant to this section (the "Mandatory
Redemption Obligation"), such funds shall be immediately used to
discharge such Mandatory Redemption Obligation until the balance
of such shares have been redeemed. If and so long as the
Mandatory Redemption Obligation shall not be fully discharged,
(x) dividends on any remaining outstanding shares of Seventh
Series shall continue to accrue and be added to the dividend
payable pursuant to the second preceding sentence and (y) the
Corporation shall not declare or pay any dividend or make any
distribution on any Parity Stock or Junior Stock. With respect
to any Exchange Preferred Stock or Mirror Preferred Stock, the
Mandatory Redemption Date shall be the later to occur of (i)
November 23, 2008, and (ii) the fifth anniversary of the date of
issuance of such Exchange Preferred Stock or Mirror Preferred
Stock.
(c) Notice. The Corporation will provide notice of
any redemption of shares of Seventh Series to holders of record
of the Seventh Series to be redeemed not less than 30 nor more
than 60 days prior to the date fixed for such redemption. Such
notice shall be provided by first-class mail postage prepaid, to
each holder of record of the Seventh Series to be redeemed, at
such holder's address as it appears on the stock transfer books
of the Corporation. Each such mailed notice shall state, as
appropriate, the following:
(i) the redemption date;
(ii) the number of shares of Seventh Series to be
redeemed and, if fewer than all the shares held by any
holder are to be redeemed, the number of such shares to be
redeemed from such holder;
(iii) the Redemption Price;
(iv) the place or places where certificates for such
shares are to be surrendered for redemption;
(v) the amount of full cumulative dividends per share
of Seventh Series to be redeemed accrued and unpaid up to
but excluding such redemption date, and that dividends on
shares of Seventh Series to be redeemed will cease to accrue
on such redemption date unless the Corporation shall default
in payment of the Redemption Price plus such full cumulative
dividends accrued and unpaid thereon;
(vi) the name and location of any bank or trust company
with which the Corporation will deposit redemption funds
pursuant to subsection (e) below;
(vii) the then effective Conversion Price (as
determined under Section 3); and
(viii) that the right of holders to convert shares
of Seventh Series to be redeemed will terminate at the close
of business on the business day next preceding the date
fixed for redemption (unless the Corporation shall default
in the payment of the Redemption Price and such full
cumulative dividends accrued and unpaid thereon).
Any notice that is mailed as set forth above shall be
conclusively presumed to have been duly given, whether or not the
holder of shares of Seventh Series receives such notice, and
failure to give such notice by mail, or any defect in such
notice, to the holders of any shares designated for redemption
shall not affect the validity of the proceedings for the
redemption of any other shares of Seventh Series.
(d) Mechanics of Redemption. Upon surrender in
accordance with the aforesaid notice of the certificate for any
shares so redeemed (duly endorsed or accompanied by appropriate
instruments of transfer if so required by the Corporation), the
holders of record of such shares shall be entitled to receive the
redemption price, without interest, plus full cumulative
dividends thereon accrued and unpaid up to but excluding such
redemption date out of funds legally available therefor. If
fewer than all the shares represented by any such certificate are
redeemed, a new certificate representing the unredeemed shares
shall be issued without cost to the holder thereof.
(e) Redemption Funds. On the date of any redemption
being made pursuant to this Section, the Corporation shall, and
at any time after notice of such redemption shall have been
mailed and before the date of redemption the Corporation may,
deposit for the benefit of the holders of shares of Seventh
Series to be redeemed the funds necessary for such redemption
with a bank or trust company in the City of New York having a
capital and surplus of at least $1 billion, with instructions to
such bank or trust company to pay the full redemption amounts as
provided herein to the holders of shares of Seventh Series upon
surrender of certificates for such shares; provided, however,
that the making of such deposit shall not release the Corporation
from any of its obligations hereunder. Any moneys so deposited
by the Corporation and unclaimed at the end of two years from the
date designated for such redemption shall revert to the general
funds of the Corporation and, upon demand, such bank or trust
company shall pay over to the Corporation such unclaimed amounts
and thereupon such bank or trust company shall be relieved of all
responsibility in respect thereof and any holder of shares of
Seventh Series so redeemed shall look only to the Corporation for
the payment of the full redemption amounts, as provided herein.
(f) Rights After Redemption. Notice of redemption
having been given as aforesaid, upon the deposit pursuant to
subsection (e) of the full redemption amounts as provided herein
in respect of all shares of Seventh Series then to be redeemed,
notwithstanding that any certificates for such shares shall not
have been surrendered in accordance with subsection (d), from
and after the date of redemption designated in the notice of
redemption: (i) the shares represented thereby shall no longer be
deemed outstanding, (ii) the rights to receive dividends thereon
shall cease to accrue, and (iii) all rights of the holders of
such shares of Seventh Series shall cease and terminate,
excepting only the right to receive the full redemption amounts
as provided herein without interest thereon. If the funds
deposited are not sufficient for redemption of the shares of the
Seventh Series that were to be redeemed, then no certificates
evidencing such shares shall be deemed surrendered and such
shares shall remain outstanding and the rights of holders of
shares of Seventh Series shall continue to be those of holders of
shares of the Seventh Series.
(g) Restrictions on Redemption and Purchase. Any
provision of this Section to the contrary notwithstanding, in the
event that any quarterly dividend payable on the Seventh Series
shall be in arrears and until all such dividends in arrears shall
have been paid or declared and set apart for payment, the
Corporation shall not redeem any shares of Parity Stock or Junior
Stock unless all outstanding shares of Seventh Series are
simultaneously redeemed and shall not purchase or otherwise
acquire any shares of Seventh Series or any Parity Stock or
Junior Stock except (i) by conversion into or exchange for stock
ranking junior as to dividends or (ii) in accordance with a
purchase or exchange offer made by the Corporation to all holders
of record of Seventh Series and such Parity Stock upon the same
terms as to holders of any series and, in the case of offers
relating to more than one series, upon such terms as between such
series as the Board of Directors or, to the extent permitted by
applicable law, any authorized committee thereof, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series of
stock, will result in fair and equitable treatment as between
such series, which determination shall be conclusive.
(h) The Corporation shall redeem the Seventh Series in
whole or in part in accordance with and to the extent required by
Section 6.6 of the Restructuring Agreement. With respect to any
such redemption, (i) the provisions of Section 5(c) and Section
5(e) shall not apply and (ii) the restriction on rights in
Section 5(f) shall apply from the time of the closing of the IPO
or other primary offering contemplated by Section 6.6 of the
Restructuring Agreement.
6. Advance Notice of Certain Transactions. If the
Corporation: (i) takes any action which would require any
adjustment to the Conversion Price or the number of shares
issuable upon a Conversion; (ii) is a party to a consolidation,
merger or binding share exchange, or transfers all or
substantially all of its assets to another person or entity, and
any stockholders of the Corporation must approve the transaction;
or (iii) voluntarily or involuntarily dissolves, liquidates or
winds up, then, in any such event, the Corporation shall give to
the holder of the Seventh Series, at least 10 days prior to any
record date or other date set for definitive action if there
shall be no record date, a notice stating the record date for,
the anticipated effective date of such action or event and, if
applicable, whether the Corporation will adjust the Conversion
Price or the number of shares issuable upon a Conversion.
Notwithstanding the foregoing, notice shall be given no later
than the time any required notice of such action or event is
given to the holders of PCS Stock.
7. Reservation of Shares. The Corporation shall at all
times keep available and reserved for the purpose of issuance
upon conversion of shares of Seventh Series the number of shares
of its Series 1 PCS Stock and the number of shares of its Series
2 PCS Stock required for conversion of the outstanding and any
reserved shares of the Seventh Series. The Corporation shall
take all corporate and other actions necessary to ensure that all
shares of PCS Stock issuable on conversion of Seventh Series will
upon issuance be duly and validly authorized and issued, fully
paid and nonassessable.
8. Certain Protective Provisions. If at any time the full
cumulative dividends on shares of the Seventh Series have not
been paid or declared and set aside for payment for the current
and all past quarterly dividend periods, the Corporation (a) will
not declare, or pay, or set apart for payment any dividends or
make any distribution, on any class or series of Parity Stock or
Junior Stock; (b) will not redeem, purchase or otherwise acquire,
or permit any subsidiary to purchase or otherwise acquire, any
shares of any class or series of Parity Stock or Junior Stock;
provided that notwithstanding the foregoing, the Corporation may
at any time redeem, purchase or otherwise acquire shares of
Junior Stock in exchange for, or out of the net cash proceeds
from the substantially simultaneous sale of, other shares of
Junior Stock; and (c) will not redeem pursuant to redemption
rights in the terms of such stock any Parity Stock unless at the
same time it redeems all the shares of the Seventh Series.
9. Voting Rights. Except as otherwise required by law,
each outstanding share of the Seventh Series shall be entitled to
vote on all matters in respect of which the holders of the common
stock of the Corporation are entitled to vote, and the holders of
the Seventh Series shall vote together with the holders of all
other classes or series of capital stock that have general voting
power on all such matters as a single class; provided, however,
that the affirmative vote or consent of two-thirds of the votes
to which the holders of the outstanding shares of the Seventh
Series are entitled shall be necessary for authorizing, effecting
or validating the amendment, alteration or repeal of any or the
provisions of the Articles of Incorporation or of any amendment
thereto (including any certificate of designation or any similar
document relating to any series of preferred stock) of the
Corporation, which would materially and adversely affect the
voting powers, preferences, rights, powers or privileges,
qualifications, limitations and restrictions of the Seventh
Series; provided, however, that neither (i) the creation,
issuance, or increase in the amount of authorized shares of, any
series of preferred stock nor (ii) the consummation of any
transaction described in Section 3 in which the voting powers,
preferences, rights, powers or privileges, qualifications,
limitations and restrictions of the Seventh Series are addressed
as contemplated by such Section will (in either such case) be
deemed to materially and adversely affect such voting powers,
preferences, rights, powers or privileges, qualifications,
limitations and restrictions of the Seventh Series.
On each matter to be voted on by the holders of the Seventh
Series, each outstanding share of the Seventh Series is entitled
to a number of votes equal to the number of votes that could be
cast with respect to such matter by the holder of that number of
the series of PCS Stock into which such share of Seventh Series
could be converted if the requirements for conversion under
Section 3(c) of this Certificate had been satisfied by such
voting party on the record date for determining the shareholders
of the Corporation who are entitled to vote with respect to such
matter.
10. Definitions. As used in this Certificate of
Designations:
(a) the term "Affiliate" has the meaning given to such
term in the Restructuring Agreement;
(b) the term "business day" shall mean any day other
than a Saturday, Sunday, or a day on which banking institutions
in the State of New York are authorized or obligated by law or
executive order to close;
(c) the term "Cable Holder" means any of (i) Tele-
Communications, Inc., a Delaware corporation, Comcast
Corporation, a Pennsylvania corporation, or Cox Communications,
Inc., a Delaware corporation, (ii) any Affiliate of an entity
identified in clause (i) of this definition, (iii) any successor
by operation of law of an entity identified in clauses (i) or
(ii) of this definition, or (iv) any entity controlled by two or
more entities identified in clauses (i) through (iii) of this
definition or this clause (iv) even if such entity is not
considered an Affiliate of any individual entity so identified;
(d) the term "close of business" means 5:00 p.m. local
New York City time on a business day;
(e) the term "Closing Price" for a security, on any
day, means the last sale price, regular way, per share of such
security as reported on the New York Stock Exchange on such day,
or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, of such security
on the New York Stock Exchange, in either case as reported on the
New York Stock Exchange Composite Transactions Tape, or if such
security is not then listed or admitted to trading on such
exchange, on the principal national securities exchange on which
such security is then listed or admitted to trading, or if such
security is not then listed or admitted to trading on any
national securities exchange, as quoted through the National
Market tier of The Nasdaq Stock Market;
(f) "Convertible Securities" means any or all options,
warrants, securities and rights which are convertible into or
exercisable or exchangeable for PCS Stock at the option of the
holder thereof, or which otherwise entitle the holder thereof to
subscribe for, purchase or otherwise acquire PCS Stock.
(g) "Current Market Price", on the Determination Date
for any issuance of rights or warrants or any distribution in
respect of which the Current Market Price is being calculated,
means the average of the daily Closing Prices of the Series 1 PCS
Group Common Stock for the shortest of:
(i) the period of 30 consecutive Trading Days
commencing 45 Trading Days before such
Determination Date;
(ii) the period commencing on the date next
succeeding the first public announcement of
the issuance of rights or warrants or the
distribution in respect of which the Current
Market price is being calculated and ending
on the last full Trading Day before such
Determination Date; and
(iii) the period, if any, commencing on the
date next succeeding the Ex-Dividend Date
with respect to the next preceding issuance
of rights or warrants or distribution for
which an adjustment is required by the
provisions of clause (D) of the first
sentence of Section 3(e)(i), Section 3(e)(ii)
or Section 3(e)(iii), and ending on the last
full Trading Day before such Determination
Date.
If the record date for an issuance of rights or warrants or
a distribution for which an adjustment is required by the
provisions of clause (D) of the first sentence of
Section 3(e)(i), Section 3(e)(ii) or Section 3(e)(iii)(the
"preceding adjustment event") precedes the record date for the
issuance or distribution in respect of which the Current Market
Price is being calculated and the Ex-Dividend Date for such
preceding adjustment event is on or after the Determination Date
for the issuance or distribution in respect of which the Current
Market Price is being calculated, then the Current Market Price
shall be adjusted by deducting therefrom the fair market value
(on the record date for the issuance or distribution in respect
of which the Current Market Price is being calculated), as
determined in good faith by the Board of Directors, of the
capital stock, rights, warrants, assets or evidences of
indebtedness issued or distributed in respect of each share of
Series 1 PCS Group Common Stock in such preceding adjustment
event. Further, in the event that the Ex-Dividend Date (or in
the case of a subdivision, combination or reclassification, the
effective date with respect thereto) with respect to a dividend,
subdivision, combination or reclassification to which clauses
(A), (B), (C) or (D) of the first sentence of Section 3(e)(i)
applies occurs during the period applicable for calculating the
Current Market Price, then the Current Market Price shall be
calculated for such period in a manner determined in good faith
by the Board of Directors to reflect the impact of such dividend,
subdivision, combination or reclassification on the Closing
Prices of the Series 1 PCS Group Common Stock during such period.
For purposes of this certificate, the Current Market
Price of a share of Series 2 PCS Group Common Stock as of any
Determination Date shall be the Current Market Price of a share
of Series 1 PCS Group Common Stock as of such Determination Date;
(h) "Determination Date" for any issuance of rights or
warrants or any distribution to which Section 3(e)(i) or 3(e)(ii)
applies means the earlier of (i) the record date for the
determination of stockholders entitled to receive the rights or
warrants or the distribution to which such Section applies and
(ii) the Ex-Dividend Date for such right, warrants or
distribution;
(i) "Exchange Preferred Stock" means a series of
convertible preferred stock of the Corporation having terms,
conditions, designations, dividend rights, voting powers, rights
on liquidation and other preferences and relative, participating,
optional or other special rights, and qualifications, limitations
or restrictions thereof that are identical, or as nearly so as is
practicable in the judgment of the Board of Directors, to those
of the Seventh Series for which such Exchange Preferred Stock is
exchanged, except that (i) the liquidation preference will be
determined as provided in Section 3(e)(vii) or Section
3(e)(viii), as applicable, (ii) the running of any time periods
pursuant to the terms of the Seventh Series shall be tacked to
the corresponding time periods in the Exchange Preferred Stock
and (iii) the Exchange Preferred Stock will not be convertible
into, and the holders will have no conversion rights thereunder
with respect to, (x) in the case of a redemption of Redeemable
Capital Stock, the Redeemable Capital Stock redeemed, or the
Redemption Securities issued, in the Redemption Event, and (y) in
the case of a Spin Off, the Spin Off Securities;
(j) "Ex-Dividend Date" shall mean the date on which
"ex-dividend" trading commences for a dividend, an issuance of
rights or warrants or a distribution to which any of
Section 3(e)(i), Section 3(e)(ii) or Section 3(e)(iii) applies in
the over-the-counter market or on the principal exchange on which
the Series 1 PCS Stock is then quoted or listed;
(k) the term "Initial Conversion Price" shall be an
amount equal to (i) 1.28 multiplied by (ii) the first to be
determined of (A) the IPO Price and (B) the average of the daily
Closing Prices of the Series 1 PCS Stock for the 30 consecutive
Trading Days ending as of the 45th Trading Day following the
commencement of regular way trading in connection with the
Recapitalization; provided, that solely for purposes of
determining voting rights under Section 9 prior to the 46th
Trading Day following the commencement of regular way trading in
connection with the Recapitalization, such average will be deemed
to equal $15;
(l) "IPO" has the meaning given to such term in the
Restructuring Agreement;
(m) the term "IPO Price" means the price per share of
Series 1 PCS Stock in the IPO;
(n) the term "Junior Stock" means any stock ranking
junior as to dividends or upon liquidation, dissolution or
winding up to the Seventh Series;
(o) the term "Lien" means any mortgage, pledge,
security interest, adverse claim, encumbrance, lien (statutory or
otherwise) or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the
Uniform Commercial Code or similar applicable law of any
jurisdiction) or any other type of preferential arrangement for
the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an
obligation;
(p) the term "Mirror Preferred Stock" means
convertible preferred stock issued by (i) in the case of a
redemption of Redeemable Capital Stock, the issuer of the
applicable Redemption Securities, and (b) in the case of a Spin
Off, the issuer of the applicable Spin Off Securities and having
terms, designations, conditions, dividend rights, voting powers,
rights on liquidation and other preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions thereof that are
identical, or as nearly so as is practicable in the judgment of
the Board of Directors, to those of the Seventh Series for which
such Mirror Preferred Stock is exchanged, except that (i) the
liquidation preference will be determined as provided in Section
3(e)(vii) or Section 3(e)(viii), as applicable, (ii) the running
of any time periods pursuant to the terms of the Seventh Series
shall be tacked to the corresponding time periods in the Mirror
Preferred Stock and (iii) the Mirror Preferred Stock shall be
convertible into the kind and amount of Redemption Securities or
Spin Off Securities, as applicable, and other securities and
property that the holder of a share of Seventh Series in respect
of which such Mirror Preferred Stock is issued pursuant to the
terms hereof would have received (x) in the case of the
redemption of Redeemable Capital Stock, upon such redemption had
such share of Seventh Series been converted immediately prior to
the effective date of the Redemption Event and (y) in the case of
a Spin Off, in such Spin Off had such share of Seventh Series
been converted immediately prior to the record date for such Spin
Off;
(q) the term "Parity Stock" means any stock ranking on
a parity as to dividends or upon liquidation, dissolution or
winding up with the Seventh Series;
(r) the term "PCS Stock" means the Series 1 PCS Stock,
the Series 2 PCS Stock and the Series 3 PCS Stock;
(s) the term "Premium Price," which shall be measured
as of the effective date of the redemption referred to in Section
5(a), means the greater of (i) 110% of the Liquidation Preference
and (ii) 110% of the product of (A) the number of shares of PCS
Stock (or other securities) into which a share of Seventh Series
is convertible as of such redemption date multiplied by (B) the
average of the Closing Prices for the Series 1 PCS Stock (or, if
the Seventh Series is then convertible into a different publicly
traded security of the Corporation, then the average of the
Closing Prices of such publicly traded security) for the 30
consecutive Trading Days ending on the 5th Trading Day prior to
such redemption date.
(t) the term "record date" means such date as from
time to time fixed by the Board of Directors with respect to the
receipt of dividends, the receipt of a redemption price upon
redemption or the taking of any action or exercise of any voting
rights;
(u) the term "Redeemable Capital Stock" means a class
or series of capital stock of the Corporation that provides by
its terms a right in favor of the Corporation to call, redeem,
exchange or otherwise acquire all of the outstanding shares or
units of such class or series;
(v) the term "Redemption Securities" means, with
respect to the redemption of any Redeemable Capital Stock, stock
of a Subsidiary of the Corporation that is distributed by the
Corporation in payment, in whole or in part, of the redemption
price of such Redeemable Capital Stock;
(w) the term "Restructuring Agreement" means that
Restructuring and Merger Agreement, dated as of May 26, 1998,
among the Corporation, Tele-Communications, Inc., Comcast
Corporation, Cox Communications, Inc. and certain of their
respective Affiliates;
(x) the term "Series 1 PCS Stock" means the PCS Common
Stock--Series 1, par value $1.00 per share, of the Corporation;
(y) the term "Series 2 PCS Stock" means the PCS Common
Stock--Series 2, par value $1.00 per share, of the Corporation;
(z) the term "Series 3 PCS Stock" means the PCS Common
Stock--Series 3, par value $1.00 per share, of the Corporation;
(aa) the term "Spin Off" means the distribution of
stock of a Subsidiary of the Corporation as a dividend to all
holders of PCS Stock.
(bb) the term "Spin Off Securities" means stock of a
Subsidiary of the Corporation that is distributed to holders of
PCS Stock in a Spin Off.
(cc) the term "Subsidiary" means, with respect to any
person, any corporation, limited liability company, partnership
or other legal entity more than 50% of whose outstanding voting
securities or membership, partnership or other ownership
interests, as the case may be, are directly or indirectly owned
by such person.
(dd) the term "Trading Day" means a day on which the
principal national securities exchange on which the Series 1 PCS
Stock is listed or admitted to trading, or The Nasdaq Stock
Market, as applicable, if the Series 1 PCS Stock is not listed or
admitted to trading on any national securities exchange, is open
for the transaction of business (unless such trading shall have
been suspended for the entire day) or, if the Series 1 PCS Stock
is not listed or admitted to trading on any national securities
exchange or The Nasdaq Stock Market, any Business Day; and
(ee) the term "Transfer" means any act pursuant to
which, directly or indirectly, the ownership of the assets or
securities in question is sold, transferred, conveyed, delivered
or otherwise disposed, but shall not include (a) any grant of
Liens or (b) any conversion or exchange of any security of this
Corporation pursuant to a merger or other business combination
involving this Corporation.
PREFERRED STOCK-EIGHTH SERIES
(1) Designation and Amount. The shares of such
Series shall be designated as "Preferred Stock-Eighth
Series, Junior Participating" (hereafter "Eighth
Series") and the number of shares constituting such
series shall be one million two hundred fifty thousand
(1,250,000).
(2) Dividends.
(A) Subject to the prior and superior rights
of the holders of any shares of any other series
of Preferred Stock of the Corporation ("Preferred
Stock"), or any similar stock ranking prior and
superior to the shares of the Eighth Series with
respect to dividends, the holders of shares of the
Eighth Series, in preference to the holders of
Common Stock and any shares of stock ranking
junior (either as to dividends or upon
liquidation, dissolution or winding up) to the
shares of the Eighth Series (collectively with
such Common Stock, "Junior Stock"), shall be
entitled to receive, when, as and if declared by
the Board of Directors out of funds legally
available for the purpose, quarterly dividends
payable in cash, on January 1, April 1, July 1 and
October 1 in each year (each such date being
referred to herein as a "Quarterly Dividend
Payment Date") in an amount (rounded to the
nearest cent) equal to the greater of (a) $100.00
or (b) the product of the PCS Group Multiple (as
defined below) times the aggregate per share
amount of all cash dividends, plus the product of
the PCS Group Multiple times the aggregate per
share amount (payable in cash, based upon the fair
market value at the time the non-cash dividend or
other distribution is declared as determined in
good faith by the Board of Directors) of all non-
cash dividends or other distributions other than a
dividend payable in shares of PCS Group Common
Stock, or a subdivision of the outstanding shares
of PCS Group Common Stock (by reclassification or
otherwise), declared (but not withdrawn) on the
PCS Group Common Stock since the immediately
preceding Quarterly Dividend Payment Date, or,
with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any
share or fraction of a share of the Eighth Series.
(B) As used herein, the PCS Group Multiple
shall initially be 1,000. In the event the
Corporation shall (i) declare any dividend on PCS
Group Common Stock payable in shares of PCS Group
Common Stock, (ii) subdivide the outstanding PCS
Group Common Stock, or (iii) combine the
outstanding PCS Group Common Stock into a smaller
number of shares, then in each such case the PCS
Group Multiple shall be adjusted by multiplying
such amount by a fraction the numerator of which
is the number of shares of PCS Group Common Stock
outstanding immediately after such event and the
denominator of which is the number of shares of
PCS Group Common Stock that were outstanding
immediately prior to such event.
(C) The Corporation shall declare a dividend
or distribution on the Eighth Series as provided
above in paragraph (A) of this Section (2)
immediately after it declares a dividend or
distribution on the PCS Group Common Stock (other
than a dividend payable in shares of PCS Group
Common Stock); provided, however, that in the
event no dividend or distribution shall have been
declared on the PCS Group Common Stock during the
period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment
Date, the minimum quarterly dividend of $100.00 on
the Eighth Series shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(D) Dividends shall begin to accrue and be
cumulative on outstanding shares of Eighth Series
from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of
Eighth Series, unless the date of issue of such
shares of Eighth Series is prior to the record
date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the
record date for the determination of holders of
shares of Eighth Series entitled to receive a
quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which cases
such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall cumulate
but shall not bear interest. Dividends paid on
the shares of Eighth Series in an amount less than
the total amount of such dividends at the time
accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among
all such shares at the time outstanding.
(3) Voting Rights. Except as prescribed by law
and in addition to the rights provided for in ARTICLE
SIXTH of the Articles of Incorporation of the
Corporation, as amended, the holders of the shares of
the Eighth Series shall be entitled to vote at any
annual or special meeting of the stockholders of the
Corporation, for each share of Eighth Series, a number
of votes equal to the product of the PCS Group Multiple
then in effect times the highest number of votes that
each share of PCS Group Common Stock entitles its
holder to vote at such meeting of stockholders of the
Corporation. The holders of the shares of the Eighth
Series shall be entitled to exercise such voting rights
with the holders of Series 1 PCS Stock, without
distinction as to class, at any annual or special
meeting of stockholders for the election of directors
and on any other matter submitted to a vote of the
stockholders of the Corporation at such meeting. Except
as otherwise provided herein, in the Articles of
Incorporation of the Corporation, in any other
Certificate of Designation establishing a series of
Preferred Stock or any similar stock or otherwise
required by law, the holders of the shares of the
Eighth Series and the holders of Common Stock shall
vote together as one class on all matters submitted to
a vote of stockholders of the Corporation.
(4) Certain Restrictions.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the shares
of the Eighth Series as provided in Section (2)
are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or
not declared, on shares of the Eighth Series
outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends (except a
dividend payable in PCS Group Common Stock
and/or any other Junior Stock) on, make any
other distributions on, or redeem or purchase
or otherwise acquire for consideration any
shares of Junior Stock;
(ii) declare or pay dividends on or
make any other distribution on any shares of
stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or
winding up) with the shares of the Eighth
Series, except dividends paid ratably on the
shares of the Eighth Series and all such
parity stock on which dividends are payable
or in arrears in proportion to the total
amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise
acquire for consideration any shares of stock
ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding
up) with the shares of the Eighth Series,
provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares
of such parity stock in exchange for shares
of Junior Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of the Eighth
Series, or any shares of stock ranking on a
parity with the shares of the Eighth Series,
except in accordance with a purchase offer
made in writing or by publication (as
determined by the Board of Directors) to all
holders of such shares upon such terms as the
Board of Directors, after consideration of
the respective annual dividend rates and
other relative rights and preferences of the
respective series and classes, shall
determine in good faith will result in fair
and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section (4),
purchase or otherwise acquire such shares at such
time and in such manner.
(5) Reacquired Shares. Any shares of the Eighth
Series purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and
restrictions on issuance set forth herein, in the
Articles of Incorporation, in any other Certificate of
Designation establishing a series of Preferred Stock or
any similar stock or as otherwise required by law.
(6) Liquidation, Dissolution or Winding Up.
(A) In the event of any voluntary or
involuntary liquidation, dissolution or winding up
of the Corporation, the holders of the shares of
the Eighth Series shall be entitled to receive, in
preference to the holders of Junior Stock, the
greater of (a) $1,000.00 per share, plus accrued
dividends to the date of distribution, whether or
not earned or declared, or (b) an amount per share
equal to the product of the PCS Group Multiple
then in effect times the aggregate amount to be
distributed per share to holders of PCS Group
Common Stock.
(B) In the event of any voluntary or
involuntary liquidation, dissolution or winding up
of the Corporation, the holders of stock ranking
on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the
Eighth Series shall not receive any distributions
except for distributions made ratably on the
Eighth Series and all other such parity stock in
proportion to the total amounts to which the
holders of all such shares are entitled upon such
liquidation, dissolution or winding up.
(7) Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of
PCS Group Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other
property, then in any such case the shares of the
Eighth Series shall at the same time be similarly
exchanged or changed in an amount per share equal to
the product of the PCS Group Multiple then in effect
times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the
case may be, into which or for which each share of PCS
Group Common Stock is changed or exchanged.
(8) Ranking. The shares of the Eighth Series
shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise. The
shares of the Eighth Series shall rank on a parity with
the Corporation's Preferred Stock-Series Sixth, Junior
Participating, as to the payment of dividends and the
distribution of assets. Nothing herein shall preclude
the Board of Directors of the Corporation from creating
any additional series of Preferred Stock or any similar
stock ranking on a parity with or prior to the shares
of the Eighth Series as to the payment of dividends or
distribution of assets.
(9) Fractional Shares. Shares of the Eighth
Series may be issued in fractions of a share which
shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to
have the benefit of all other rights of holders of
shares of the Eighth Series.
(10) Definitions. For purposes of this
Certificate of Designation, Preferences and Rights of
Eighth Series, unless the context otherwise requires:
(A) "Class A Common Stock-Series DT" (i)
prior to the filing of the Subsequent Charter
Amendment pursuant to K.S.A. Section 17-6003(d), shall
have the meaning set forth in the Initial Charter
Amendment, and (ii) after the filing of the
Subsequent Charter Amendment pursuant to K.S.A. Section
17-6003(d), shall have the meaning set forth in
the Subsequent Charter Amendment.
(B) "Common Stock" shall mean (A) if prior
to the filing of the Subsequent Charter Amendment
pursuant to K.S.A. Section 17-6003(d): Sprint Common
Stock, and/or Series 2 Common Stock, and/or Old
Class A Common Stock, and/or Class A Common Stock-
Series DT, and/or Series 1 PCS Stock, and/or
Series 2 PCS Stock, and/or Series 3 PCS Stock, in
each case as the context requires, and (B) if
after the filing of the Subsequent Charter
Amendment: Series 1 FON Stock, and/or Series 2 FON
Stock, and/or Series 3 FON Stock, and/or Old
Class A Common Stock, and/or Class A Common Stock-
Series DT, and/or Series 1 PCS Stock, and/or
Series 2 PCS Stock, and/or Series 3 PCS Stock, in
each case as the context requires.
(C) "Initial Charter Amendment" shall have
the meaning set forth in the Restructuring and
Merger Agreement.
(D) "Old Class A Common Stock" (i) prior to
the filing of the Subsequent Charter Amendment
pursuant to K.S.A. Section 17-6003(d), shall have the
meaning set forth in the Initial Charter
Amendment, and (ii) after the filing of the
Subsequent Charter Amendment pursuant to K.S.A. Section
17-6003(d), shall have the meaning set forth in
the Subsequent Charter Amendment.
(E) "PCS Group Common Stock" shall mean
Series 1 PCS Stock, and/or Series 2 PCS Stock,
and/or Series 3 PCS Stock, in each case as the
context requires.
(F) "PCS Group Multiple" shall have the
meaning set forth in Section 2(B).
(G) "Recapitalization" shall mean the
reclassification of each outstanding share of
Sprint Common Stock into one share of Series 1 FON
Stock and one-half of a share of Series 1 PCS
Stock to be effected by filing of the Subsequent
Charter Amendment.
(H) "Restructuring and Merger Agreement"
shall mean that certain agreement, dated as of May
26, 1998, by and among the Corporation, Tele-
Communications, Inc., a Delaware corporation,
Comcast Corporation, a Pennsylvania corporation,
Cox Communications, Inc., a Delaware corporation,
TCI Spectrum Holdings, Inc., a Colorado
corporation, Comcast Telephony Services, a
Delaware general partnership, Cox Telephony
Partnership, a Delaware general partnership,
Sprint Enterprises, L.P., a Delaware limited
partnership, TCI Philadelphia Holdings, Inc., a
Delaware corporation, Com Telephony Services,
Inc., a Delaware corporation, Comcast Telephony
Services, Inc., a Delaware corporation, Cox
Telephony Partners, Inc., a Delaware corporation,
Cox Communications Wireless, Inc., a Delaware
corporation, SWV One, Inc., a Delaware
corporation, SWV Two, Inc., a Delaware
corporation, SWV Three, Inc., a Delaware
corporation, SWV Four, Inc., a Delaware
corporation, SWV Five, Inc., a Delaware
corporation, and SWV Six, Inc., a Colorado
corporation.
(I) "Series 2 Common Stock" shall mean the
Common Stock - Series 2, par value $2.50 per
share, of the Corporation, which will be created
by the filing of the Initial Charter Amendment.
(J) "Series 1 FON Stock" shall mean the FON
Common Stock - Series 1, par value $2.00 per
share, of the Corporation, which will be created
by the filing of the Subsequent Charter Amendment.
(K) "Series 2 FON Stock" shall mean the FON
Common Stock - Series 2, par value $2.00 per
share, of the Corporation, which will be created
by the filing of the Subsequent Charter Amendment.
(L) "Series 3 FON Stock" shall mean the FON
Common Stock - Series 3, par value $2.00 per
share, of the Corporation, which will be created
by the filing of the Subsequent Charter Amendment.
(M) "Series 1 PCS Stock" shall mean the PCS
Common Stock - Series 1, par value $1.00 per
share, of the Corporation, which will be created
by the filing of the Initial Charter Amendment.
(N) "Series 2 PCS Stock" shall mean the PCS
Common Stock - Series 2, par value $1.00 per
share, of the Corporation, which will be created
by the filing of the Initial Charter Amendment.
(O) "Series 3 PCS Stock" shall mean the PCS
Common Stock - Series 3, par value $1.00 per
share, of the Corporation, which will be created
by the filing of the Initial Charter Amendment.
(P) "Sprint Common Stock" shall mean Common
Stock, par value $2.50 per share, of the
Corporation, as provided for in the Initial
Charter Amendment.
(Q) "Subsequent Charter Amendment" shall
have the meaning set forth in the Restructuring
and Merger Agreement.
Seventh
1. In addition to any affirmative vote required by law or
these Articles of Incorporation, and except as expressly provided
in Section 2 of this ARTICLE SEVENTH, the affirmative vote of the
holders of eighty (80) percent of the outstanding shares of the
Corporation entitled to vote in an election of Directors shall be
required for the approval or authorization of any Business
Combination (as hereinafter defined).
2. The provisions of Section 1 of this ARTICLE SEVENTH shall
not be applicable if:
A. The Business Combination shall have been approved by a
majority of the Continuing Directors (as hereinafter defined);
provided, however, that such approval shall only be effective if
obtained at a meeting of Directors at which at least seven
Continuing Directors are present; or
B. The Business Combination is a merger or consolidation and
the cash or Fair Market Value (as hereinafter defined) of the
property, securities or other consideration to be received per
share by the stockholders of each class of stock of the
Corporation in the Business Combination, if applicable, is not
less than the highest per share price paid by the Interested
Stockholder (as hereinafter defined), with appropriate
adjustments for stock splits, stock dividends and like
distributions, in the acquisition by the Interested Stockholder
of any of its holdings of each class of the Corporation's capital
stock.
3. For purposes of this ARTICLE SEVENTH:
A. The term "Business Combination" means:
(i) any merger or consolidation of the Corporation or any
subsidiary of the Corporation with (a) any Interested Stockholder
or (b) any other corporation (whether or not itself an Interested
Stockholder) which is, or after such merger or consolidation
would be, an Affiliate (as defined on October 1, 1982 in Rule 12b-
2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of an Interested Stockholder;
(ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any subsidiary of the Corporation that have an
aggregate Fair Market Value of $1,000,000 or more;
(iii) the issuance or transfer by the Corporation or any
subsidiary of the Corporation (in one transaction or a series of
transactions) of any securities of the Corporation or any
subsidiary of the Corporation to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate Fair Market Value of $1,000,000 or more;
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or on
behalf of an Interested Stockholder or any Affiliate of any
Interested Stockholder; or
(v) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation, or
any merger or consolidation of the Corporation with any of its
subsidiaries or any other transaction (whether or not with or
into or otherwise involving an Interested Stockholder) which has
the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of
equity or convertible securities of the Corporation or any
subsidiary which is directly or indirectly owned by any
Interested Stockholder or any Affiliate of any Interested
Stockholder.
B. The term "Continuing Director" means any member of the
Board of Directors of the Corporation who is unaffiliated with
the Interested Stockholder and was a member of the Board of
Directors prior to the time that the Interested Stockholder
became an Interested Stockholder, and any successor of a
Continuing Director if the successor is unaffiliated with the
Interested Stockholder and is recommended or elected to succeed a
Continuing Director by a majority of Continuing Directors,
provided that such recommendation or election shall only be
effective if made at a meeting of Directors at which at least
seven Continuing Directors are present.
C. The term "Fair Market Value" means:
(i) in the case of stock, the highest closing sale price
during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New
York Stock Exchange-listed stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock Exchange, or,
if such stock is not listed on such Exchange, on the principal
United States securities exchange registered under the Exchange
Act on which such stock is listed, or, if such stock is not
listed on any such exchange, the highest closing bid quotation
with respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of
Securities Dealers, Inc. Automated Quotations System or any
system then in use, or if no such quotations are available, the
fair market value on the date in question of a share of such
stock as determined in good faith by a majority of Continuing
Directors, provided that such determination shall only be
effective if made at a meeting of Directors at which at least
seven Continuing Directors are present; or
(ii) in the case of property or securities other than cash
or stock, the fair market value of such property or securities on
the date in question as determined in good faith by a majority of
Continuing Directors, provided that such determination shall only
be effective if made at a meeting of Directors at which at least
seven Continuing Directors are present.
D. The term "Interested Stockholder" means and includes, as of
the date of any proposed Business Combination, any individual,
corporation, partnership or other person or entity which,
together with its "Affiliates" and "Associates" (as defined on
October 1, 1982 in Rule 12b-2 under the Exchange Act),
"Beneficially Owns" (as defined on October 1, 1982 in Rule 13d-3
under the Exchange Act) in the aggregate ten percent or more of
the outstanding shares of the Corporation entitled to vote in an
election of Directors, and any Affiliate or Associate of any such
individual, corporation, partnership or other person or entity.
Eighth
1. Prevention of "Greenmail." Any direct or indirect
purchase or other acquisition by this Corporation of any Equity
Security (as hereinafter defined) of any class at a price above
Market Price (as hereinafter defined) from any Interested
Securityholder (as hereinafter defined) who has beneficially
owned any Equity Security of the class to be purchased for less
than two years prior to the date of such purchase or any
agreement in respect thereof shall, except as hereinafter
expressly provided, require the affirmative vote of the holders
of at least a majority of the voting power of the then
outstanding shares of capital stock of this Corporation entitled
to vote generally in the election of directors (the "Voting
Stock"), excluding Voting Stock beneficially owned by such
Interested Securityholder, voting together as a single class (it
being understood that for the purposes of this ARTICLE EIGHTH,
each share of the Voting Stock shall have the number of votes
granted to it pursuant to ARTICLE SIXTH of these Articles of
Incorporation). Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a
lesser percentage may be specified, by law or any agreement with
any national securities exchange, or otherwise, but (i) no such
affirmative vote shall be required with respect to any purchase,
redemption or other acquisition by this Corporation of capital
stock from FT, DT, any Qualified Subsidiary or any Qualified
Stock Purchaser pursuant to the provisions of the Investment
Documents (as such term is defined in Section 10 of ARTICLE SIXTH
of these Articles of Incorporation) or these Articles of
Incorporation, (ii) no such affirmative vote shall be required
with respect to any purchase or other acquisition of securities
made as part of a tender or exchange offer by this Corporation to
purchase securities of the same class made on the same terms to
all holders of such securities and complying with the applicable
requirements of the Securities Exchange Act of 1934 and the rules
and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations), and (iii) no such
affirmative vote shall be required with respect to any purchase,
redemption, conversion or other acquisition by this Corporation
of Series 2 FON Stock or PCS Stock (as defined in ARTICLE SIXTH)
from a holder thereof pursuant to the provisions of these
Articles of Incorporation.
2. Certain Definitions. For the purposes of this ARTICLE
EIGHTH:
A. A "person" means any individual, firm, corporation or other
entity.
B. "Interested Securityholder" means any person (other than
the Corporation or any corporation of which a majority of any
class of Equity Security is owned, directly or indirectly, by the
Corporation) who or which:
(i) is the beneficial owner, directly or indirectly, of 5%
or more of the class of securities to be acquired; or
(ii) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of 5%
or more of the class of securities to be acquired; or
(iii) is an assignee or has otherwise succeeded to any
shares of the class of securities to be acquired which were at
any time within the two-year period immediately prior to the date
in question beneficially owned by an Interested Securityholder,
if such assignment or succession shall have occurred in the
course of a transaction or transactions not involving a public
offering within the meaning of the Securities Act of 1933, as
amended.
C. A person shall be a "beneficial owner" of any security of
any class of the Corporation:
(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns, directly
or indirectly; or
(ii) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (b) any right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly,
by any other person with which such person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any security of any class of the Corporation.
D. For the purposes of determining whether a person is an
Interested Securityholder pursuant to paragraph B of this Section
2, the relevant class of securities outstanding shall be deemed
to comprise all such securities deemed owned through application
of paragraph C of this Section 2, but shall not include other
securities of such class which may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
E. "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as in effect on October 1, 1982.
F. "Equity Security" shall have the meaning ascribed to such
term in Section 3(a)(11) of the Securities Exchange Act of 1934,
as in effect on January 1, 1985.
G. "Market Price" means the highest closing sale price during
the thirty-day period immediately preceding the date in question,
of a share of any Equity Security on the Composite Tape for New
York Stock Exchange issues or, if such Equity Security is not
quoted on the Composite Tape or is not listed on such Exchange,
on the principal United States security exchange registered under
the Securities Exchange Act of 1934, as amended, on which such
Equity Security is listed, or, if such Equity Security is not
listed on any such exchange, the highest closing bid quotation
with respect to a share of such Equity Security during the thirty-
day period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations
System or any system then in use, or, if no such quotations are
available, the fair market value on the date in question of a
share of such Equity Security.
3. Compliance. The Board of Directors of the Corporation
shall have the power to determine the application of, or
compliance with, this ARTICLE EIGHTH, including, without
limitation: (i) whether a person is an Interested Securityholder;
(ii) whether a person is a beneficial owner of any Equity
Security; and (iii) the Market Price of any Equity Security. Any
decision or action taken by the Board of Directors arising out of
or in connection with the construction, interpretation and effect
of this ARTICLE EIGHTH shall lie within its absolute discretion
and shall be conclusive and binding, except in circumstances
involving bad faith.
Ninth
No Director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for
breach of fiduciary duty by such Director as a Director;
provided, however, that this ARTICLE NINTH shall not eliminate or
limit the liability of a Director to the extent provided by
applicable law (i) for any breach of the Director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 51
of the General Corporation Code of the State of Kansas, or (iv)
for any transaction from which the Director derived an improper
personal benefit. No amendment to or repeal of this ARTICLE NINTH
shall apply to or have any effect on the liability or alleged
liability of any Director of the Corporation for or with respect
to any acts or omissions of such Director occurring prior to such
amendment or repeal.
Exhibit 4C
SPRINT CORPORATION
BYLAWS
ARTICLE I
Name and Location
SECTION 1. The name of the Corporation shall be the name
set forth in the Articles of Incorporation.
SECTION 2. The principal office of the Corporation is
located at 2330 Shawnee Mission Parkway, Westwood, Kansas.
SECTION 3. Other offices for the transaction of business
of the Corporation may be located at such place in Kansas or
elsewhere as the Board of Directors may from time to time
determine.
ARTICLE II
Capital Stock
SECTION 1. All certificates of stock shall be signed by
the Chairman of the Board of Directors, the President or a Vice
President and the Secretary or an Assistant Secretary, and sealed
with the corporate seal.
SECTION 2. Transfers of stock shall be made on the books
of the Corporation upon the surrender of the old certificate
properly endorsed, and said old certificate shall be cancelled
before a new certificate is issued.
SECTION 3. A new certificate of stock may be issued in
the place of any certificate theretofore issued, alleged to have
been lost or destroyed, and the Corporation may, in its
discretion, require the owner of the lost or destroyed
certificate, or its legal representative, to give a bond
sufficient to indemnify the Corporation against any claim that
may be made against it on account of the alleged loss of any
certificate.
SECTION 4. No holder of shares of any class of this
Corporation, or holder of any securities or obligations
convertible into shares of any class of this Corporation, shall
have any preemptive right whatsoever to subscribe for, purchase
or otherwise acquire shares of this Corporation of any class,
whether now or hereafter authorized; provided, however, that
nothing in SECTION 4 shall prohibit the Corporation from
granting, contractually or otherwise, to any such holder, the
right to purchase additional securities of the Corporation.
ARTICLE III
Stockholders' Meetings
SECTION 1. The annual meeting of the stockholders of the
Corporation shall be held on the third Tuesday of April in each
year, either within or without the State of Kansas, as may from
time to time be determined by the Board of Directors. At such
meeting the stockholders shall elect directors in the manner
provided in the Articles of Incorporation of the Corporation.
The stockholders may transact such other business at such annual
meetings as may properly come before the meeting.
SECTION 2. A special meeting of the holders of any one
or more classes of the capital stock of the Corporation entitled
to vote as a class or classes with respect to any matter, as
required by law or as provided in the Articles of Incorporation,
may be called at any time and place by the Chairman, the
President or the Board of Directors, and shall be called by the
Chairman, the President or the Secretary on the written request
of the holders of record of a majority of the shares of stock of
such class or classes issued and outstanding and entitled to
vote.
SECTION 3. Notice of the time and place of all annual
meetings and of the time, place and purpose of all special
meetings (other than meetings of the holders of the Class A Stock
separately as a class) shall be mailed by the Secretary to each
stockholder at his last known post office address as it appears
on the records of the Corporation at least twenty (20) days
before the date set for such meeting.
SECTION 4. Nominations of persons for election to the
Board of the Corporation at a meeting of the stockholders may be
made by or at the direction of the Board of Directors or may be
made (a) in the case of persons to be elected by stockholders
other than the holders of Class A Stock, at a meeting of
stockholders by any stockholder of the Corporation who is not a
holder of shares of Class A Stock and who is entitled to vote for
the election of Directors at the meeting, and (b) in the case of
persons to be elected by the holders of shares of Class A Stock
as provided for in the Articles of Incorporation of the
Corporation (the "Class A Directors"), at a meeting of
stockholders by any holder of shares of Class A Stock, in each
case in compliance with the notice procedures set forth in this
SECTION 4 of ARTICLE III. Such nominations, other than those
made by or at the direction of the Board, shall be made pursuant
to timely notice in writing to the Secretary of the Corporation.
To be timely, a stockholder's notice shall be delivered to or
mailed and received at the principal executive offices of the
Corporation not less than fifty (50) days nor more than seventy-
five (75) days prior to the meeting; provided, however, that in
the event that less than sixty-five (65) days' notice or prior
public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so
received no later than the close of business on the fifteenth
(15th) day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was made,
whichever first occurs. Such stockholder's notice to the
Secretary shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or re-election as a
Director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or
employment of the person, (iii) the class and number of shares of
capital stock of the Corporation which are beneficially owned by
the person and (iv) any other information relating to the person
that is required to be disclosed in solicitations for proxies for
election of Directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended; and (b) as to the
stockholder giving the notice (i) the name and record address of
the stockholder and (ii) the class and number of shares of
capital stock of the Corporation which are beneficially owned by
the stockholder. The Corporation may require any proposed
nominee to furnish such other information as may reasonably be
required by the Corporation to determine the eligibility of such
proposed nominee to serve as Director of the Corporation. No
person shall be eligible for election as a Director of the
Corporation at a meeting of the stockholders (a) unless such
person has been nominated in accordance with the procedures set
forth herein; and (b) unless nominated by holders of the Class A
Stock or the Preferred Stock, such person is an Independent
Nominee, as hereinafter defined, provided that nominees need not
be Independent Nominees if election of such nominees would not
result in less than a majority of the Board of Directors
following such election being Independent Directors (as such term
is defined in the Articles of Incorporation of the Corporation).
If the facts warrant, the Chairman of the meeting shall determine
and declare to the meeting that a nomination does not satisfy one
or both of the requirements set forth in clauses (a) and (b) of
the preceding sentence and the defective nomination shall be
disregarded. As used herein, "Independent Nominee" means a
person who, if elected, would be an Independent Director as such
term is defined in the Articles of Incorporation of the
Corporation. Nothing in this SECTION 4 shall be construed to
affect the requirements for proxy statements of the Corporation
under Regulation 14A of the Exchange Act.
SECTION 5. At any meeting of the stockholders (other
than a separate meeting of the holders of the Class A Stock),
only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before a
meeting (other than a separate meeting of the holders of the
Class A Stock), business must be (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction
of the Board of Directors, (b) otherwise properly brought before
the meeting by or at the direction of the Board of Directors, or
(c) otherwise properly brought before the meeting by a
stockholder. For business to be properly brought before a
meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the Secretary of the Corporation.
To be timely, a stockholder's notice shall be delivered to or
mailed and received at the principal executive offices of the
Corporation not less than fifty (50) days nor more than seventy-
five (75) days prior to the meeting; provided, however, that in
the event that less than sixty-five (65) days' notice or prior
public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so
received no later than the close of business on the fifteenth
(15th) day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was made,
whichever first occurs. Such stockholder's notice to the
Secretary shall set forth (a) as to each matter the stockholder
proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting and the reasons
for conducting such business at the meeting, and (b) as to the
stockholder giving the notice (i) the name and record address of
the stockholder, (ii) the class and number of shares of capital
stock of the Corporation which are beneficially owned by the
stockholder and (iii) any material interest of the stockholder in
such business. No business shall be conducted at a meeting of
the stockholders (other than a separate meeting of the holders of
the Class A Stock) unless proposed in accordance with the
procedures set forth herein. The Chairman of the meeting shall,
if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in
accordance with the foregoing procedure and such business shall
not be transacted. To the extent this SECTION 5 shall be deemed
by the Board of Directors or the Securities and Exchange
Commission, or finally adjudged by a court of competent
jurisdiction, to be inconsistent with the right of stockholders
to request inclusion of a proposal in the Corporation's proxy
statement pursuant to Rule 14a-8 promulgated under the Securities
Exchange Act of 1934, as amended, such rule shall prevail.
SECTION 6. The Chairman of the Board of Directors, or in
his absence the President, or in his absence or inability to act,
a Vice President shall preside at all stockholders' meetings
(other than meetings of the holders of the Class A Stock
separately as a class).
SECTION 7. Except as otherwise provided in the Articles
of Incorporation of the Corporation, at each meeting of the
stockholders, each stockholder shall be entitled to cast one vote
for each share of voting stock standing of record on the books of
the Corporation, in his name, and may cast such vote either in
person or by proxy. All proxies shall be in writing and filed
with the Secretary of the meeting.
SECTION 8. Except as otherwise provided in the Articles
of Incorporation of the Corporation, each stockholder other than
a holder of shares of Class A Stock shall have the right to vote,
in person or by proxy, a number of votes equal to the number of
shares of stock owned by the stockholder for each Director to be
elected (other than those to be elected by the holders of shares
of Class A Stock as provided for in the Articles of Incorporation
of the Corporation). Each holder of shares of Class A Stock
shall have the right to vote, in person or by proxy, a number of
votes equal to the number of shares of Class A Stock owned by
such holder (or such other number of votes as may be provided in
the Articles of Incorporation of the Corporation) for each
director to be elected by the holders of Class A Stock as
provided for in the Articles of Incorporation of the Corporation.
Stockholders shall not be entitled to cumulative voting of their
shares in elections of Directors.
SECTION 9. At any meeting held for the purpose of
electing directors, (i) the presence in person or by proxy of the
holders of at least a majority of the then outstanding shares of
Class A Stock shall be required and be sufficient to constitute a
quorum of such class for the election by such class of Class A
Directors and (ii) the presence in person or by proxy of the
holders of at least a majority of the then outstanding voting
shares of the Corporation other than the Class A Stock shall be
required and be sufficient to constitute a quorum for the
election of directors other than Class A Directors. At any such
meeting or adjournment thereof the absence of a quorum of the
holders of Class A Stock shall not prevent the election of
directors other than Class A Directors, and the absence of a
quorum of the holders of voting shares other than Class A Stock
shall not prevent the election of Class A Directors. At a
meeting held for any purpose other than the election of
directors, shares representing a majority of the votes entitled
to be cast on such matter, present in person or represented by
proxy, shall constitute a quorum. In the absence of the required
quorum at any meeting of stockholders, a majority of such holders
present in person or by proxy shall have the power to adjourn the
meeting, from time to time, without notice (except as required by
law) other than an announcement at the meeting, until a quorum
shall be present.
SECTION 10. At each of the annual stockholders' meetings,
one of the executive officers of the Corporation shall submit a
statement of the business done during the preceding year,
together with a report of the general financial condition of the
Corporation.
ARTICLE IV
Directors
SECTION 1. The business and property of the Corporation
shall be managed by a Board consisting of such number of
Directors as is determined from time to time in accordance with
the provisions of the Articles of Incorporation of the
Corporation. The Board of Directors may elect one of their
number to act as Chairman of the Board.
SECTION 2. Each Director upon his election shall qualify
by filing his written acceptance with the Secretary or an
Assistant Secretary and by fulfilling any prerequisite to
qualification that may be set forth in the Articles of
Incorporation of the Corporation.
SECTION 3. The annual meeting of the directors shall be
held immediately after the adjournment of each annual meeting of
the stockholders and in the event a quorum is not present, said
meeting shall be held within ten days after adjournment upon
proper notice by the Chairman of the Board of Directors, the
President or a Vice President.
SECTION 4. Special meetings of the Board of Directors
may be called at any time or place by the Chairman of the Board
or by the President, and in the absence or inability of either of
them to act, by a Vice President, and may also be called by any
two members of the Board. By unanimous consent of the directors,
special meetings of the Board may be held without notice, at any
time and place.
SECTION 5. Notice of all regular and special meetings of
the Board of Directors or the Executive Committee or any
committee established pursuant to SECTION 12 of ARTICLE IV (an
"Other Committee") shall be sent to each Director or member of
such committee, as the case may be, by the Secretary, by a means
reasonably calculated to be received at least seven (7) days
prior to the time fixed for such meeting, or notice of special
meetings of the Board of Directors or the Executive Committee or
any Other Committee may be given by telephone, telegraph, telefax
or telex to each Director or member of such committee, as the
case may be, at least twenty-four (24) hours prior to the time
fixed for such meeting, or on such shorter notice as the person
or persons calling the meeting may reasonably deem necessary or
appropriate in the circumstances. To the extent provided in the
notice of the meeting or as otherwise determined by the Chairman
of the Board or the Board of Directors, Directors may participate
in any regular or special meeting by means of conference
telephone or similar communications equipment which allows all
persons participating in such meeting to hear each other, and
participation in such meeting by means of such a device shall
constitute presence in person at such meeting. In addition,
Class A Directors who have not received notice of any special
meeting of the Board of Directors or the Executive Committee or
any Other Committee, as the case may be, at least six (6) days
prior to the time fixed for such meeting may participate in such
meeting by means of conference telephone or similar
communications equipment which allows all persons participating
in such meeting to hear each other, and participation in such
meeting by means of such a device shall constitute presence in
person at such meeting.
SECTION 6. Except as otherwise provided in the Articles
of Incorporation of the Corporation, a quorum for the transaction
of business at any meeting of the directors shall consist of a
majority of the members of the Board, but the directors present,
although less than a quorum, shall have the power to adjourn the
meeting from time to time or to some future date.
SECTION 7. The directors shall elect the officers of the
Corporation and fix their salaries. Such election shall be made
at the Directors' meeting following each annual stockholders'
meeting.
SECTION 8. The Board of Directors from time to time, as
they may deem proper, shall have authority to appoint a general
manager, counsel or attorneys and other employees for such length
of time and upon such terms and conditions and at such salaries
as they may deem necessary and/or advisable.
SECTION 9. The members of the Board of Directors shall
receive compensation for their services in such amount as may be
reasonable and proper and consistent with the time and service
rendered. The members of the Board of Directors shall receive
the reasonable expenses necessarily incurred in the attendance of
meetings and in the transaction of business for the Corporation.
SECTION 10.
(a) Indemnification.
(1) Actions Other Than Those by or in the Right of the
Corporation. The Corporation shall indemnify any
person who was or is a party or is threatened to
be made a party to any threatened, pending or
completed action, suit or proceeding, whether
civil, criminal, administrative or investigative
(other than an action by or in the right of the
Corporation) by reason of the fact that such
person is or was a director, officer, employee or
agent of the Corporation, or is or was serving at
the request of the Corporation as a director,
officer, employee or agent of another corporation,
partnership, joint venture, trust or other
enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by
such person in connection with such action, suit
or proceeding if such person acted in good faith
and in a manner such person reasonably believed to
be in or not opposed to the best interests of the
Corporation (or such other corporation or
organization), and, with respect to any criminal
action or proceeding, had no reasonable cause to
believe such person's conduct was unlawful. The
termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the
person did not act in good faith and in a manner
which such person reasonably believed to be in or
not opposed to the best interests of the
Corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to
believe that such person's conduct was unlawful.
(2) Action by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to
any threatened, pending or completed action or
suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the
fact that such person is or was a director,
officer, employee or agent of the Corporation, or
is or was serving at the request of the
Corporation as a director, officer, employee or
agent of another corporation, partnership, joint
venture, trust or other enterprise, against
expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection
with the defense or settlement of such action or
suit if such person acted in good faith and in a
manner such person reasonably believed to be in or
not opposed to the best interests of the
Corporation (or such other corporation or
organization) and except that no indemnification
shall be made in respect of any claim, issue or
matter as to which such person shall have been
adjudged to be liable to the Corporation (or such
other corporation or organization) unless and only
to the extent that the court in which such action
or suit was brought shall determine upon
application that, despite the adjudication of
liability but in view of all the circumstances of
the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such
court shall deem proper.
(3) Successful Defense of Action. Notwithstanding,
and without limitation of, any other provision of
this SECTION 10, to the extent that a director,
officer, employee or agent of the Corporation has
been successful on the merits or otherwise in
defense of any action, suit or proceeding referred
to in paragraph (1) or (2) of this sub-Section
(a), or in defense of any claim, issue or matter
therein, such director, officer, employee or agent
shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred
by such person in connection therewith.
(4) Determination Required. Any indemnification under
paragraph (1) or (2) of this sub-Section (a)
(unless ordered by a court) shall be made by the
Corporation only as authorized in the specific
case upon a determination that indemnification of
the director, officer, employee or agent is proper
in the circumstances because such director,
officer, employee or agent has met the applicable
standard of conduct set forth in said paragraph.
Such determination shall be made (i) by the Board
of Directors by a majority vote of a quorum
consisting of directors who were not parties to
the particular action, suit or proceeding, or (ii)
if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders.
(5) Advance of Expenses. Expenses incurred in
defending a civil or criminal action, suit or
proceeding may be paid by the Corporation in
advance of the final disposition of such action,
suit or proceeding upon receipt of a satisfactory
undertaking by or on behalf of the director,
officer, employee or agent to repay such amount if
it shall ultimately be determined that such person
is not entitled to be indemnified by the
Corporation as authorized in this sub-Section (a).
(b) Insurance. The Corporation may, when authorized by the
Board of Directors, purchase and maintain insurance on
behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a
director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against such
person and incurred by such person in any such
capacity, or arising out of such person's status as
such, whether or not the Corporation would have the
power to indemnify him against such liability under the
provisions of sub-Section (a). The risks insured under
any insurance policies purchased and maintained on
behalf of any person as aforesaid or on behalf of the
Corporation shall not be limited in any way by the
terms of this SECTION 10 and to the extent compatible
with the provisions of such policies, the risks insured
shall extend to the fullest extent permitted by law,
common or statutory.
(c) Nonexclusivity; Duration. The indemnifications and
rights provided by, or granted pursuant to, this
SECTION 10 shall not be deemed exclusive of any other
indemnifications, rights or limitations of liability to
which any person may be entitled under any Bylaw,
agreement, vote of stockholders or disinterested
directors, or otherwise, either as to action in such
person's official capacity or as to action in another
capacity while holding office, and they shall continue
although such person has ceased to be a director,
officer, employee or agent and shall inure to the
benefit of such person's heirs, executors and
administrators. The authorization to purchase and
maintain insurance set forth in sub-Section (b) shall
likewise not be deemed exclusive.
SECTION 11. The Chief Executive Officer of the
Corporation, together with no more than five additional Directors
elected by stockholders other than holders of shares of Class A
Stock, and at least one Class A Director selected by the holders
of a majority of the shares of Class A Stock, shall constitute an
Executive Committee of the Board of Directors. The Executive
Committee between regular meetings of the Board of Directors
shall manage the business and property of the Corporation and
shall have the same power and authority as the Board of
Directors; provided, however, the Executive Committee shall not
act (other than to make recommendations) in those cases where it
is provided by law or by the Articles of Incorporation of the
Corporation that any vote or action in order to bind the
Corporation shall be taken by the Directors. Members of the
Executive Committee may participate in any meeting of the
Executive Committee by means of conference telephone or similar
communications equipment which allows all persons participating
in the meeting to hear each other, and participation in a meeting
by means of such a device shall constitute presence in person at
such meeting.
The Executive Committee shall keep a record of its
proceedings and may hold meetings upon one (1) day's written
notice or upon waiver of notice signed by the members either
before or after said Executive Committee meeting.
A majority of the Executive Committee shall constitute a
quorum for the transaction of business at any meeting for which
notice has been given to all members in accordance with ARTICLE
IV, SECTION 5 hereof or for which notice has been waived by all
members.
SECTION 12. If the Board of Directors shall form any
committee other than the Executive Committee, such committee
shall have at least one member who is a Class A Director;
provided, however, that no Class A Director shall be a member of
(i) any committee established pursuant to the provisions of any
law relating to the national security of the United States, (ii)
any committee the membership on which by such a director would be
prohibited by any law or by the rules of the New York Stock
Exchange or (iii) the compensation committee, if the Board of
Directors determines that such a director would not be considered
a "non-employee director" within the meaning of Rule 16b-
3(b)(3)(i) promulgated under the Securities Exchange Act of 1934,
as amended. Any committee so formed, to the extent provided in
the resolution of the Board of Directors pursuant to which it was
formed or in the Bylaws or pursuant to the statutes of Kansas,
shall have and may exercise all the powers and authority of the
Board of Directors.
SECTION 13. The Board of Directors shall form a Capital
Stock Committee. Each member of the Capital Stock Committee
shall be an Independent Director or a person who, except for a
relationship with a Class A Holder or a Subsidiary of a Class A
Holder, would be an Independent Director. The Capital Stock
Committee shall have and may exercise such powers, authority and
responsibilities as may be delegated by the Board of Directors in
connection with the adoption of general policies governing the
relationship between business groups or otherwise, including such
powers, authority and responsibilities as are delegated by the
Board of Directors with respect to, among other things: (a) the
business and financial relationships between the Sprint FON Group
(or any business or subsidiary allocated thereto) and the Sprint
PCS Group (or any business or subsidiary allocated thereto); (b)
dividends in respect of, and transactions by Sprint or the Sprint
FON Group (or any business or subsidiary allocated thereto) in,
shares of Sprint PCS Stock; and (c) any matters arising in
connection therewith.
(Capitalized terms not otherwise defined in the Bylaws have
the meanings ascribed to them in the Charter.)
ARTICLE V
Officers
SECTION 1. The officers of this Corporation shall be a
Chairman of the Board of Directors, a President, as many Vice
Presidents as the Board of Directors may from time to time deem
advisable and one or more of which may be designated Executive
Vice President or Senior Vice President, a Secretary, a
Treasurer, and such Assistant Secretaries and Assistant
Treasurers as the Board of Directors may from time to time deem
advisable, and such other officers as the Board of Directors may
from time to time deem advisable and designate. The Chairman of
the Board of Directors shall be a member of and be elected by the
Board of Directors. All other officers shall be elected by the
Board of Directors. All officers shall hold office until their
respective successors are elected and shall have qualified. Any
two of said offices may be held by one person except the office
of President and Vice President.
SECTION 2. The Chairman of the Board of Directors shall
preside at all meetings of the Directors and stockholders at
which he is present and shall have such other duties, power and
authority as may be prescribed by the Board of Directors from
time to time. The Board of Directors may designate the Chairman
of the Board as the Chief Executive Officer of the Corporation
with all of the powers otherwise conferred upon the President of
the Corporation under these Bylaws, or it may, from time to time,
divide the responsibilities, duties and authority for the general
control and management of the Corporation's business and affairs
between the Chairman of the Board and the President.
SECTION 3. Unless the Board of Directors otherwise
provides, the President shall be the Chief Executive Officer of
the Corporation with such general executive powers and duties of
supervision and management as are usually vested in such office
and shall perform such other duties as are authorized by the
Board of Directors. The Chairman of the Board or the President
shall sign contracts, certificates and other instruments of the
Corporation as authorized by the Board of Directors. If the
Chairman of the Board is designated as the Chief Executive
Officer of the Corporation, the President shall perform such
duties as may be delegated to him by the Board of Directors and
as are conferred by law exclusively upon such office.
SECTION 4. A Vice President shall have right and power
to perform all duties and exercise all authority of the
President, in case of absence of the President or upon vacancy in
the office of President, and shall have all power and authority
usually enjoyed by a person holding the office of Vice President.
SECTION 5. The Secretary shall issue notices of all
directors' and stockholders' meetings, and shall attend and keep
the minutes of the same; shall have charge of all corporate
books, records and papers; shall be custodian of the corporate
seal; shall attest with his signature, which may be a facsimile
signature if authorized by the Board of Directors, and impress
with the corporate seal, all stock certificates and written
contracts of the Corporation; and shall perform all other duties
as are incident to his office. Any Assistant Secretary, in the
absence or inability of the Secretary, shall perform all duties
of the Secretary and such other duties as may be required.
SECTION 6. The Treasurer shall have custody of all money
and securities of the Corporation and shall give bond in such sum
and with such sureties as the directors may specify, conditioned
upon the faithful performance of the duties of his office. He
shall keep regular books of account and shall submit them,
together with all his records and other papers, to the directors
for their examination and approval annually; and semi-annually,
or when directed by the Board of Directors, he shall submit to
each director a statement of the condition of the business and
accounts of the Corporation; and shall perform all such other
duties as are incident to his office. An Assistant Treasurer, in
the absence or inability of the Treasurer, shall perform all the
duties of the Treasurer and such other duties as may be required.
SECTION 7. Any officer or employee of the Corporation
shall give such bond for the faithful performance of his duties
in such sum, as and when the Board of Directors may direct.
ARTICLE VI
Dividends
SECTION 1. Dividends shall be paid out of the net income
or earned surplus of the Corporation, determined after making
proper provision for required sinking fund deposits for debt
obligations and proper provisions for working capital and such
reserves as may be required by good and generally accepted
accounting practice, when declared from time to time by
resolution of the Board of Directors. No such dividends shall be
declared or paid which will impair the capital of the
Corporation.
ARTICLE VII
Amendments
SECTION 1. Except as otherwise provided in the Articles
of Incorporation of the Corporation and SECTION 2 of this ARTICLE
VII, the Bylaws may be amended, altered or repealed by the Board
of Directors, subject to the power of stockholders to amend,
alter or repeal the Bylaws; or the Bylaws shall be amended in
such other manner as may from time to time be authorized by the
laws of the State of Kansas.
SECTION 2. The following provisions of the Bylaws may
not be amended, altered, repealed or made inoperative or
ineffective by adoption of other provisions to the Bylaws without
the affirmative vote of the holders of record of a majority of
the shares of Class A Stock then outstanding, voting separately
as a class, at any annual or special meeting of stockholders, the
notice of which shall have specified or summarized the proposed
amendment, alteration or repeal of the Bylaws: ARTICLE III,
SECTIONS 2, 4, 5, 8 and 9; ARTICLE IV, SECTIONS 5, 6, 10, 11 and
12; ARTICLE VI, SECTION 1; and ARTICLE VII, SECTIONS 1 and 2.
ARTICLE VIII
Corporate Seal
SECTION 1. The corporate seal of this Corporation shall
have inscribed thereon the name of the Corporation and its state
of incorporation and the words, "Seal - Incorporated 1938".
Exhibit 4D
SPRINT CORPORATION
BOARD OF DIRECTORS
POLICY STATEMENT REGARDING TRACKING STOCK MATTERS
1. General Policy. It is the policy of the Sprint Board:
(i) that all material matters as to which the holders of
the FON Stock and the holders of the PCS Stock may have
potentially divergent interests shall be resolved in a manner
that the Sprint Board determines to be in the best interests of
Sprint and all of its common stockholders after giving fair
consideration to the potentially divergent interests and all
other relevant interests of the holders of the separate classes
of Sprint's common stock,
(ii) that a process of fair dealing shall govern the
relationship between the FON Group and the PCS Group and the
means by which the terms of any material transaction between them
will be determined, and
(iii) that the Sprint Board will not recommend any
transaction that would result in a Change of Control of Sprint or
a Strategic Merger without a prior determination that the terms
of such transaction are fair to holders of PCS Stock, taken as a
separate class, and holders of FON Stock, taken as a separate
class.
2. Delegation of Authority. In administering this policy, the
Sprint Board may, at its option, delegate its authority to the
Capital Stock Committee.
3. Role of the Capital Stock Committee with Respect to these
Policies. The Capital Stock Committee of the Sprint Board shall
have authority to interpret, make determinations under, and
oversee the implementation of this policy. The Capital Stock
Committee shall have the authority to engage the services of
accountants, appraisers, attorneys and other service providers to
assist it in discharging its duties.
4. Fiduciary Obligations. In making any and all determinations
in connection with this policy, either directly or by appropriate
delegation of authority, the members of the Sprint Board and the
Capital Stock Committee shall act in a fiduciary capacity and
pursuant to legal guidance concerning their respective
obligations under applicable law.
5. Dividend Policy.
5.1. Periodic Review of Dividend Policy.
The Sprint Board shall periodically consider appropriate
dividend policies and practices relating to any future dividends
on the FON Stock and the PCS Stock. The Sprint Board does not
expect to declare any dividends on the PCS Stock in the
foreseeable future.
5.2. Limitations on FON Stock Dividends.
Dividends on FON Stock may be declared and paid only out of
the lesser of (i) the funds of Sprint legally available therefor
and (ii) the FON Group Available Dividend Amount.
5.3. Limitations on PCS Stock Dividends.
Dividends on PCS Stock may be declared and paid only out of
the lesser of (i) the funds of Sprint legally available therefor
and (ii) the PCS Group Available Dividend Amount.
6. Prohibited Transactions: Limitations on Acquisition of
Series 1 PCS Stock.
Sprint shall not:
(i) engage in any transactions, including mergers,
consolidations, recapitalizations, or similar transactions that
have the effect of circumventing the rights of holders of PCS
Stock under either (A) Section 7.1 (D) of ARTICLE SIXTH or (B)
the proviso in Section 7.2 of ARTICLE SIXTH limiting redemptions
contemplated by such Section 7.2 from occurring for a two-year
period unless approved by the affirmative vote of holders of a
majority of the outstanding shares of PCS Stock. This paragraph
(i) shall not apply to any transaction involving a third party,
the terms of which have been determined in advance by either the
Sprint Board or the Capital Stock Committee to be fair to holders
of PCS Stock, taken as a separate class, and holders of FON
Stock, taken as a separate class; or
(ii) acquire a number of shares of Series 1 PCS Stock such
that, immediately after the acquisition, the number of shares of
Series 1 PCS Stock outstanding is less than 80% of the sum of (a)
the number of shares of Series 1 PCS Stock issued to the public
in the Recapitalization and (b) the number of shares of Series 1
PCS Stock issued to the public in any primary initial public
offering of Series 1 PCS Stock that is completed prior to the
Reference Date, all such numbers being appropriately adjusted for
any stock split, stock dividend, recapitalization or similar
transaction that affects the number of shares of Series 1 PCS
Stock outstanding.
7. Intergroup Interests.
Any inter-group transaction that results in a change in the
size of any Intergroup Interest held by the FON Group or any
Other Group in the PCS Group shall be subject to the review and
approval of the Capital Stock Committee. If such review occurs
before such transaction is undertaken and such transaction is
disapproved, the transaction will not proceed. If such review
occurs after such transaction is undertaken and such transaction
is disapproved, appropriate actions will be taken to reinstate
the pre-existing circumstances to the fullest extent practicable.
The PCS Group shall not acquire an Intergroup Interest in the FON
Group or in any Other Group.
8. Allocation of Business Opportunities and Operations. Except
as provided in Section 9 below, the Sprint Board may allocate
business opportunities and operations to the FON Group, the PCS
Group, or to any Other Group as it considers in the best
interests of Sprint and its shareholders as a whole.
9. Scope of PCS Group Operations. Any business conducted by
Sprint for offering or providing (i) Domestic Wireless Mobile
Telephony Services and (ii) any other Domestic PCS Services shall
be allocated to the PCS Group, and all acquisitions of Domestic
PCS Licenses shall be allocated to the PCS Group. To the extent
such businesses or licenses are acquired by the FON Group, the
Sprint Board shall arrange for an allocation or transfer of such
assets to the PCS Group as soon as reasonably practicable at a
price equivalent to the fair market value of such businesses or
licenses. In no event shall such allocation or transfer be
required at a time that would adversely affect the availability
of pooling-of-interests accounting.
This Section 9 does not preclude the formation of
commercially reasonable contracts or other arrangements between
the PCS Group and the FON Group or any Other Group for sales
agency, resale, or any other arrangement with respect to
businesses conducted by either the FON Group or the PCS Group.
10. Income Tax Matters.
Federal and state income taxes determined on a consolidated,
combined, or unitary basis shall be allocated, and resulting tax
sharing payments shall be made, between the FON Group and the PCS
Group in accordance with the Tax Sharing Agreement. The Tax
Sharing Agreement is incorporated by reference herein and is
deemed to be a part of these policies as if set forth in full
herein.
The Tax Sharing Agreement shall only apply to tax years
ending on or before December 31, 2001 and neither the Tax Sharing
Agreement nor this Section 10 shall be modified or rescinded, nor
shall any exception be made to this Section 10, with respect to
any tax year ending on or before December 31, 2001.
11. Inter-Group Transactions.
11.1. Inter-Group Borrowings.
Loans from Sprint or any member of the FON Group or any
member of any Other Group to any member of the PCS Group shall be
made at interest rates and on other terms and conditions
substantially equivalent to the interest rates and other terms
and conditions that the PCS Group would be able to obtain from
third parties (including the public markets) as a direct or
indirect wholly-owned subsidiary of Sprint, but without the
benefit of any guaranty by Sprint or any member of the FON Group.
This policy contemplates that such loans will be made on the
basis set forth above regardless of the interest rates and other
terms and conditions on which Sprint or members of the FON Group
may have acquired the subject funds. The provisions of this
Section 11.1 shall only apply prior to December 31, 2001 and
shall not be modified, suspended or rescinded, nor shall any
exception be made to such provisions, prior to December 31, 2001.
11.2. Asset Transfers Between Groups.
11.2.1. Transfers Designated as Equity Transfers.
Transfers of assets from the FON Group to the PCS Group
that are designated by the Sprint Board, consistent with other
provisions of this policy, to be treated as an equity
contribution by the FON Group to the PCS Group shall result in an
increase in the Intergroup Interest of the Sprint FON Group in
the Sprint PCS Group in accordance with paragraph (C) of the
definition of "Number Of Shares Issuable With Respect To The FON
Group Intergroup Interest" in ARTICLE SIXTH, Section 10.
Transfers of assets from the PCS Group to the FON Group
may not be treated as creating an Intergroup Interest of the PCS
Group in the FON Group, but may be treated as a reduction of any
existing Intergroup Interest of the FON Group in the PCS Group in
accordance with Paragraph (B) of the definition of "Number Of
Shares Issuable With Respect To The FON Group Intergroup
Interest" in ARTICLE SIXTH, Section 10, but not below zero.
11.2.2. Other Transfers.
All other transfers of assets between one Group (the
"Transferor Group") and another Group (the "Transferee Group"),
not designated by the Sprint Board as equity transfers under
Section 11.2.1 and not pursuant to a contract for the provision
of goods or services between the Groups, shall be accompanied by
(i) the transfer by the Transferee Group to the Transferor Group
of other assets, (ii) the creation of inter-group debt owed by
the Transferee Group to the Transferor Group, or (iii) the
reduction of inter-group debt owed by the Transferor Group to the
Transferee Group, in each case in an amount having a fair market
value, in the judgment of the Sprint Board, equivalent to the
fair market value of the assets transferred to the Transferee
Group by the Transferor Group in such transaction.
11.2.3. Limitation on Acquisition of PCS Group
Assets by the FON Group.
Neither the FON Group nor any Other Group shall acquire
in one transaction or in a series of related transactions a
significant portion of the assets of the PCS Group without
receiving the consent by the holders of a majority of the
outstanding shares of PCS Stock, voting as a separate class, and
the consent of the holders of a majority of the outstanding
shares of FON Stock, or the stock of such Other Group, as the
case may be, voting as a separate class. For purposes of this
Section 11.2.3, "significant portion of the assets of the PCS
Group" means more than 33% of the assets of the PCS Group, based
on the fair market value of the assets, both tangible and
intangible, of the PCS Group as of the time that the proposed
transaction is approved by the Sprint Board.
11.3. Commercial Transactions Between Groups.
11.3.1. Generally.
All material commercial transactions between the FON
Group or any Other Group and the PCS Group shall be on
commercially reasonable terms and shall be subject to the review
and approval of the Capital Stock Committee. If such review
occurs before such transaction is undertaken and such transaction
is disapproved, the transaction will not proceed. If such review
occurs after such transaction is undertaken and such transaction
is disapproved, appropriate actions will be taken to reinstate
the pre-existing circumstances to the fullest extent practicable.
11.3.2. Long Distance Pricing.
Sales of Domestic long distance service (whether intra-
calling area or inter-calling area) by the FON Group to the PCS
Group for purposes of enabling PCS Group customers to complete
wireless calls (whether billed separately or as part of other
charges) shall be at the best price offered by the FON Group to
third parties in similar situations when taking into account all
relevant factors (e.g., volume, peak/off-peak usage, length of
commitment). The PCS Group shall be permitted to acquire private
line capacity from the FON Group to self-provision long distance
services to the extent that such self-provisioning can be
accomplished on terms more favorable to the PCS Group, and shall
be at the best price offered by the FON Group to third parties in
similar situations, when taking into account all relevant
factors.
12. Definitions. Capitalized terms not defined in this policy
shall have the meanings set forth in the Articles. References
throughout this policy to "ARTICLES," set in all capital letters,
are references to ARTICLES in the Articles.
12.1. Articles.
"Articles" means the Amended and Restated Articles of
Incorporation of Sprint, as amended from time to time.
12.2. Domestic.
"Domestic" means geographically within the 50 states of the
United States or the District of Columbia, Puerto Rico and the
Virgin Islands.
12.3. Domestic PCS License.
"Domestic PCS License" means a license to use PCS Spectrum
within Domestic areas granted by the Federal Communication
Commission or other applicable authority.
12.4. Domestic PCS Services.
"Domestic PCS Services" means any services offered or
provided within a Domestic geographic area using a Domestic PCS
License.
12.5. Domestic Wireless Mobile Telephony Services.
"Domestic Wireless Mobile Telephony Services" means a
communications service provided through the use of a wireless
connection from the user to a Domestic terrestrial
telecommunications network that is capable of and generally
utilized by Sprint for handing-off calls from one wireless cell
to another and from one wireless sector within a cell to another
and which is intended to allow the continuation of a user's
single conversation, without interruption, as the user travels
between cells and/or sectors within such network.
12.6. Group.
"Group" means any of the FON Group or, the PCS Group or an
Other Group, as the context requires.
12.7. Intergroup Interest.
"Intergroup Interest" means the FON Group Intergroup
Interest Fraction as defined in ARTICLE SIXTH, Section 10.
12.8. Other Group.
"Other Group" means any tracked group that Sprint may
designate by future amendment to the Articles with respect to
which Sprint creates or issues tracking stock to which it
attributes or allocates any present or future assets or
businesses.
12.9. PCS Spectrum.
"PCS Spectrum" means the electromagnetic spectrum between
1850MHz and 1910MHz and between 1930MHz and 1990MHz or such other
electromagnetic spectrum as the Federal Communications Commission
may allocate to license holders of electromagnetic spectrum
between 1850MHz and 1910MHz and between 1930MHz and 1990MHz in
exchange for the surrender of electromagnetic spectrum within the
identified frequencies.
12.10. Recapitalization.
"Recapitalization" means the reclassification of each share
of Sprint's Common Stock, par value $2.50 per share, into one
share of FON Stock and a certain number of shares of Series 1 PCS
Stock as contemplated by the Restructuring Agreement.
12.11. Recapitalization Date.
"Recapitalization Date" means the effective date of the
Recapitalization.
12.12. Reference Date.
"Reference Date" means (i) if a primary initial public
offering of Series 1 PCS Stock occurs on the effective date of
these policies, 180 days after such effective date; (ii) if such
offering is not completed at such time but is completed within
120 days of the effective date of these policies, the later of:
(a) 90 days following the completion of such offering or (b) 180
days following the effective date of these policies, or (iii) if
no such offering is completed within 120 days of the effective
date of these policies, the 180th day after the effective date of
these policies.
12.13. Restructuring Agreement.
"Restructuring Agreement" means the Restructuring and
Merger Agreement dated May 26, 1998 among Sprint, Tele-
Communications, Inc., Comcast Corporation, Cox Communications,
Inc., and the other signatories thereto.
12.14. Sprint.
"Sprint" means Sprint Corporation.
12.15. Sprint Board.
"Sprint Board" means the board of directors of Sprint.
12.16. FON Group.
"FON Group" means the Sprint FON Group as defined in ARTICLE
SIXTH, Section 10.
12.17. FON Group Available Dividend Amount.
"FON Group Available Dividend Amount," on any date, means
the amount, if any, by which (1) the fair market value of the
total assets attributed to the FON Group less the total amount of
the liabilities attributed to the FON Group (provided that
Preferred Stock shall not be treated as a liability), in each
case as of such date and determined on a basis consistent with
the determination of the FON Group Net Earnings (Loss), exceeds
(2) the aggregate par value of, or any greater amount determined
in accordance with applicable corporation law to be capital in
respect of, all outstanding shares of FON Stock and each class or
series of Preferred Stock attributed in accordance with ARTICLE
SIXTH, Section 13, to the FON Group.
12.18. FON Group Net Earnings (Loss).
"FON Group Net Earnings (Loss)," for any period through any
date, means the net income or loss of the FON Group for such
period (or in respect of fiscal periods of Sprint commencing
prior to the Effective Date, the pro forma net income or loss of
the FON Group for such period as if the Effective Date had been
the first day of such period) determined in accordance with
generally accepted accounting principles in effect at such time,
reflecting income and expense of Sprint attributed to the FON
Group on a basis substantially consistent with attributions of
income and expense made in the calculation of PCS Group Net
Earnings (Loss), including, without limitation, corporate
administrative costs, net interest and other financial costs and
income taxes.
12.19. FON Stock.
"FON Stock" means, (i) before the Recapitalization Date,
Common Stock, Series 2 Common Stock, the Old Class A Common
Stock, and the Class A Common Stock-Series DT and (ii) after the
Recapitalization Date, the FON Stock, The Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The FON Group and The Number Of Shares Issuable With Respect To
The Old Class A Equity Interest In the FON Group.
12.20. PCS Group.
"PCS Group" has the meaning set forth in ARTICLE SIXTH,
Section 10.
12.21. PCS Group Available Dividend Amount.
"PCS Group Available Dividend Amount," on any date, means
the amount, if any, by which (1) the product of (a) the
Outstanding PCS Fraction as of such date multiplied by (b) an
amount equal to the fair market value of the total assets
attributed to the PCS Group less the total amount of the
liabilities attributed to the PCS Group (provided that Preferred
Stock shall not be treated as a liability), in each case as of
such date and determined on a basis consistent with the
determination of the PCS Group Net Earnings (Loss), exceeds (2)
the aggregate par value of, or any greater amount determined in
accordance with applicable corporation law to be capital in
respect of, all outstanding shares of PCS Stock and each class or
series of Preferred Stock attributed in accordance with ARTICLE
SIXTH, Section 13, to the PCS Group.
12.22. PCS Group Net Earnings (Loss).
"PCS Group Net Earnings (Loss)," for any period through any
date, means the net income or loss of the PCS Group for such
period (or in respect of fiscal periods of commencing prior to
the Effective Date, the pro forma net income or loss of the PCS
Group for such period as if the Effective Date had been the first
day of such period) determined in accordance with generally
accepted accounting principles in effect at such time, reflecting
income and expense of Sprint attributed to the PCS Group on a
basis substantially consistent with attributions of income and
expense made in the calculation of FON Group Net Earnings (Loss),
including, without limitation, corporate administrative costs,
net interest and other financial costs and income taxes.
12.23. PCS Stock.
"PCS Stock" means the PCS Stock, The Number Of Shares
Issuable With Respect To The Class A-Series DT Equity Interest In
The PCS Group, and The Number Of Shares Issuable With Respect To
The Old Class A Equity Interest In The PCS Group.
12.24. Tax Sharing Agreement.
"Tax Sharing Agreement" means the Tax Sharing Agreement
among Sprint and the "PCS Group Entities" as defined therein, a
form of which is attached as an exhibit to the Restructuring
Agreement.
13. Interpretation, Amendment and Modification of this Policy.
Except as specifically set forth in Sections 10 and 11.1 of this
policy, this policy and any agreement, resolution, management
policies, or other action implementing the provisions hereof may
at any time and from time to time be modified, suspended or
rescinded, and interpreted by the Sprint Board, and the Sprint
Board may adopt additional or other policies or make exceptions
with respect to the application of this policy in connection with
particular facts and circumstances, all as the Sprint Board may
determine, consistent with its fiduciary duties to Sprint and all
its common stockholders, and any such action may be taken with or
without the approval of stockholders of Sprint.
Exhibit 4E
AMENDED AND RESTATED STANDSTILL AGREEMENT
THIS AMENDED AND RESTATED STANDSTILL AGREEMENT (this
"Agreement") dated as of November 23, 1998 by and among SPRINT
CORPORATION, a corporation formed under the laws of Kansas
("Sprint"), FRANCE TELECOM S.A., a societe anonyme formed under
the laws of France ("FT"), and DEUTSCHE TELEKOM AG, an
Aktiengesellschaft formed under the laws of Germany ("DT");
R E C I T A L S
WHEREAS, Sprint, FT and DT entered into an Investment
Agreement dated as of July 31, 1995, as amended (the "Investment
Agreement"), pursuant to which FT and DT purchased shares of
capital stock of Sprint;
WHEREAS, as a condition to Sprint's entering into the
Investment Agreement, Sprint, FT and DT entered into a Standstill
Agreement dated as of July 31, 1995, which agreement was amended
on June 24, 1997 (as so amended, the "Original Standstill
Agreement");
WHEREAS, Sprint, FT and DT entered into a Master
Restructuring and Investment Agreement dated as of May 26, 1998,
(the "FT/DT Restructuring Agreement"), which contemplates, among
other things, the purchase by FT and DT of shares of PCS Common
Stock -- Series 3, par value $1.00 per share, of Sprint;
WHEREAS, as a condition precedent to and in consideration of
the transactions contemplated in the FT/DT Restructuring
Agreement, Sprint, FT and DT are required to enter into this
Agreement and in reliance thereon Sprint, FT and DT have entered
into the FT/DT Restructuring Agreement;
NOW, THEREFORE, in consideration of these premises and the
covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of FT, DT and Sprint (each a "Party"
and collectively the "Parties"), intending to be legally bound,
hereby agree that the Original Standstill Agreement is hereby
amended and restated in its entirety as follows:
ARTICLE 1.
DEFINITIONS AND CONSTRUCTION
Section 1.1. Certain Definitions. As used in this
Agreement, the following terms shall have the meanings specified
below:
"Acquisition Proposal" shall mean any proposal involving a
transaction of the kind described in Section 8.6 of ARTICLE SIXTH
of Sprint's Articles.
"Affiliate" shall mean, with respect to any Person, any
other Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common
Control with, such Person, provided that (a) no JV Entity shall
be deemed an Affiliate of any Party unless (i) FT, DT and Atlas
own a majority of the Voting Power of such JV Entity and Sprint
does not have the Tie-Breaking Vote (as defined in Section 18.1
of the Joint Venture Agreement), (ii) FT, DT or Atlas has the
Tie-Breaking Vote or (iii) FT, DT or any of their Affiliates
cause such JV Entity to acquire Beneficial Ownership of any
Sprint equity securities; (b) FT, DT and Sprint shall not be
deemed Affiliates of each other; (c) Atlas shall be deemed an
Affiliate of FT and DT; and (d) the term "Affiliate" shall not
include any Government Affiliate.
"Aggregate Foreign Ownership Limitation" shall mean the
maximum aggregate percentage of equity interests of Sprint that
may be Owned of Record or Voted by Aliens under Section 310(b)(4)
of the Communications Act, without such ownership or voting
resulting in the possible loss, or possible failure to secure the
renewal or reinstatement, of any license or franchise of any
Governmental Authority held by Sprint or any of its Affiliates to
conduct any portion of the business of Sprint or such Affiliate,
as such maximum aggregate percentage may be increased from time
to time by amendments to such section or by waivers granted to
Sprint by the FCC or by other determinations of the FCC, provided
that if Section 310(b)(4) is repealed or otherwise made
inapplicable to the ownership of Sprint capital stock by FT and
DT, there shall be no Aggregate Foreign Ownership Limitation.
"Amended and Restated Stockholders' Agreement" shall have
the meaning set forth in Article VIII of the FT/DT Restructuring
Agreement.
"Amended Other Agreements" shall mean the FT/DT
Restructuring Agreement, the Amended and Restated Stockholders'
Agreement, the Amended and Restated Registration Rights Agreement
(as defined in the Amended and Restated Stockholders' Agreement),
and the Amended and Restated Confidentiality Agreements (as
defined in the Amended and Restated Stockholders' Agreement).
"Beneficial Owner" (including, with its correlative
meanings, "Beneficially Own" and "Beneficial Ownership"), with
respect to any securities, shall mean any Person which:
(a) has, or any of whose Affiliates or Associates has,
directly or indirectly, the right to acquire (whether such right
is exercisable immediately or only after the passage of time)
such securities pursuant to any agreement, arrangement or
understanding (whether or not in writing), including pursuant to
the FT/DT Restructuring Agreement and the Amended and Restated
Stockholders' Agreement, or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise;
(b) has, or any of whose Affiliates or Associates has,
directly or indirectly, the right to vote or dispose of (whether
such right is exercisable immediately or only after the passage
of time) or "beneficial ownership" of (as determined pursuant to
Rule 13d-3 under the Exchange Act as in effect on the date hereof
but including all such securities which a Person has the right to
acquire beneficial ownership of, whether or not such right is
exercisable within the 60-day period specified therein) such
securities, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); or
(c) has, or any of whose Affiliates or Associates has,
any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or
disposing of any securities which are Beneficially Owned,
directly or indirectly, by any other Person (or any Affiliate or
Associate thereof),
provided that (i) Class A Common Stock, Sprint FON Stock and
Sprint PCS Stock held by one of FT or DT or its Affiliates or
Associates shall not also be deemed to be Beneficially Owned by
the other of FT or DT or its Affiliates or Associates; (ii)
Sprint FON Stock and Sprint PCS Stock shall not be deemed to be
Beneficially Owned by FT, DT or their Affiliates or Associates by
virtue of the top up rights and standby commitments granted under
the Purchase Rights Agreement except to the extent that FT, DT or
their Affiliates or Associates have (A) acquired shares of Sprint
FON Stock or Sprint PCS Stock pursuant to the Purchase Rights
Agreement, or (B) become irrevocably committed to acquire, and
the Cable Partners have become irrevocably committed to sell,
shares of Sprint FON Stock or Sprint PCS Stock pursuant to the
Purchase Rights Agreement (with such Beneficial Ownership to be
determined on a full-voting basis), subject only to customary
closing conditions, if any; and (iii) FT, DT and their Affiliates
and Associates shall not be deemed to Beneficially Own any
incremental Voting Power resulting solely from the increase in
Voting Power provided for by the application of Section 7.5(d) of
the Articles.
"Cable Partners" means Tele-Communications, Inc., Comcast
Corporation, and Cox Communications, Inc., and any of their
respective successors (by merger, consolidation, transfer or
otherwise) to all or substantially all of their respective
businesses or assets.
"Class A Common Stock" shall have the meaning set forth in
ARTICLE SIXTH, Section 10 of the Articles, as amended from time
to time.
"Class A Stock" shall mean the Class A Common Stock, the
Series 3 FON Stock and the Series 3 PCS Stock.
"Communications Act" shall mean the United States
Communications Act of 1934 and the rules and regulations
thereunder.
"Control" (including, with its correlative meanings,
"Controlled by" and "under common Control with") shall mean, with
respect to a Person or Group:
(a) ownership by such Person or Group of Votes
entitling it to exercise in the aggregate more than 50 percent of
the Voting Power of the entity in question; or
(b) possession by such Person or Group of the power,
directly or indirectly, (i) to elect a majority of the board of
directors (or equivalent governing body) of the entity in
question; or (ii) to direct or cause the direction of the
management and policies of or with respect to the entity in
question, whether through ownership of securities, by contract or
otherwise.
"CP Closing" shall have the meaning set forth in Article
VIII of the FT/DT Restructuring Agreement.
"DT" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"FT" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"FT/DT Restructuring Agreement" means the Master
Restructuring and Investment Agreement dated as of May 26, 1998
by and among Sprint, FT and DT.
"Government Affiliate" shall mean any Governmental Authority
of France or Germany or any other Person Controlled, directly or
indirectly (other than by virtue of a government's inherent
regulatory or statutory powers to control persons or entities
within its jurisdiction), by any such Governmental Authority,
provided that FT, DT, Atlas and any other Person directly, or
indirectly through one or more intermediaries, Controlled by FT,
DT or Atlas shall not be Government Affiliates.
"Group" shall mean any group within the meaning of Section
13(d)(3) of the Exchange Act as in effect on the date hereof.
"Initial Percentage Limitations" shall have the meaning set
forth in Section 2.1(a)(i), as adjusted pursuant to Section
2.2(a).
"Initial Standstill Period" shall have the meaning set forth
in Section 2.1(a)(i).
"Largest Other Holder" shall mean the Other Holder, if any,
who Beneficially Owns a larger percentage of the Outstanding
Sprint Voting Securities than any other Person, provided that,
for purposes of this definition, FT, DT, their Affiliates and
Associates and Qualified Stock Purchasers shall be considered a
single Person.
"Other Holder" shall mean any Person other than (i) FT, DT,
any of their respective Affiliates or Associates or any Qualified
Stock Purchaser, (ii) Sprint, (iii) any Subsidiary of Sprint,
(iv) any employee benefit plan of Sprint or of any Subsidiary of
Sprint, or (v) any Person organized, appointed or established by
Sprint or any Subsidiary of Sprint for or pursuant to the terms
of any such plan.
"Outstanding Sprint FON Stock" shall mean the shares of
Sprint FON Stock outstanding as of any particular date, plus (i)
all shares of Sprint FON Stock which as of such date any of FT or
DT or any of their respective Affiliates is committed to acquire
from Sprint or has the right to acquire (or to commit to acquire)
from Sprint pursuant to the FT/DT Restructuring Agreement and the
Amended and Restated Stockholders' Agreement, and (ii) the
aggregate Shares Issuable With Respect To The Class A Equity
Interest In The FON Group.
"Outstanding Sprint PCS Stock" shall mean the shares of
Sprint PCS Stock outstanding as of any particular date, plus (i)
all shares of Sprint PCS Stock which as of such date any of FT or
DT or any of their respective Affiliates is committed to acquire
from Sprint or has the right to acquire (or to commit to acquire)
from Sprint pursuant to the Amended and Restated Stockholders'
Agreement, plus (ii) the aggregate Shares Issuable With Respect
To The Class A Equity Interest In The PCS Group as of such date.
"Outstanding Sprint Voting Securities" shall mean (i) the
Sprint Voting Securities outstanding as of any particular date,
plus (ii) all Sprint Voting Securities which as of such date any
of FT or DT or any of their respective Affiliates is committed to
acquire from Sprint or has the right to acquire (or to commit to
acquire) from Sprint pursuant to the Amended and Restated
Stockholders' Agreement.
"Owned of Record or Voted by" shall have the meaning
specified in Section 310(b)(4) of the Communications Act and
published interpretations thereof by the FCC and the U.S. federal
courts.
"Percentage Limitations" shall have the meaning set forth in
Sections 2.1(a)(i) and 2.1(a)(ii), each as adjusted pursuant to
Section 2.2(a).
"Percentage Limitation Adjustment Event" shall mean the
acquisition by an Other Holder of Beneficial Ownership of
Outstanding Sprint Voting Securities in excess of the applicable
Percentage Limitations as reflected in clause (A) of Section
2.1(a)(i) or clause (A) of Section 2.1(a)(ii), as the case may
be, unless any of FT, DT or any Qualified Subsidiary shall have
breached any of the provisions of Section 3.1 or 3.2 of this
Agreement or any corresponding provision of any Qualified
Subsidiary Standstill Agreement and such breach resulted in, or
was intended to facilitate, such Other Holder's acquisition of
Beneficial Ownership of Outstanding Sprint Voting Securities in
excess of such applicable Percentage Limitations.
"Percentage Ownership Interest" shall mean, with respect to
any Person, that percentage of the Voting Power of Sprint
represented by Votes associated with the Sprint Voting Securities
owned of record by such Person or by its nominees.
"Purchase Rights Agreement" shall mean the Top Up Rights
Agreement dated as of May 26, 1998 among FT, DT, Sprint and the
Cable Partners as in effect on such date.
"Qualified Stock Purchaser Standstill Agreement" shall mean
a Standstill Agreement in form and substance satisfactory to
Sprint, FT and DT.
"Qualified Subsidiary Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit A.
"Recapitalization" shall have the meaning set forth in
Article VIII of the FT/DT Restructuring Agreement.
"Record Date Period" shall mean a period of ten Trading Days
beginning on the ninth Trading Day (as defined in the Amended and
Restated Stockholders' Agreement) before a record date for a
meeting of Sprint's stockholders or for the payment of dividends
and ending on (and including) such record date (which shall be a
Trading Day).
"Related Company" shall mean any Person not Controlled by FT
or DT, but in which FT, DT and their respective Affiliates and
Associates, individually or in the aggregate, directly or
indirectly through one or more intermediaries, own securities
entitling them to exercise in the aggregate more than 35 percent
of the Voting Power of such Person.
"Series 1 FON Stock" shall mean the FON Common Stock --
Series 1, par value U.S. $2.00 per share, of Sprint to be created
in connection with the Recapitalization.
"Series 1 PCS Stock" shall mean the PCS Common Stock --
Series 1, par value U.S. $1.00 per share, of Sprint to be created
by the Initial Charter Amendment.
"Series 2 FON Stock" shall mean the FON Common Stock --
Series 2, par value U.S. $2.00 per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 2 PCS Stock" shall mean the PCS Common Stock --
Series 2, par value U.S. $1.00 per share, of Sprint to be created
by the Initial Charter Amendment.
"Series 3 FON Stock" shall mean the FON Common Stock --
Series 3, par value U.S. $2.00 per share, of Sprint to be created
by the Subsequent Charter Amendment.
"Series 3 PCS Stock" shall mean the PCS Common Stock --
Series 3, par value U.S. $1.00 per share, of Sprint to be created
by the Initial Charter Amendment.
"Shares Issuable With Respect To The Class A Equity Interest
In The FON Group" shall have the meaning set forth in ARTICLE
SIXTH, Section 10 of the Articles, as amended from time to time.
"Shares Issuable With Respect To The Class A Equity Interest
In The PCS Group" shall have the meaning set forth in ARTICLE
SIXTH, Section 10 of the Articles, as amended from time to time.
"Sprint" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Sprint FON Common Stock" shall mean (i) prior to the
Recapitalization, the Common Stock, par value U.S. $2.50 per
share, of Sprint, and (ii) following the Recapitalization, the
Series 1 FON Stock and the Series 2 FON Stock.
"Sprint FON Stock" shall mean the Sprint FON Common Stock
and the Series 3 FON Stock.
"Sprint PCS Common Stock" shall mean the Series 1 PCS Stock
and the Series 2 PCS Stock.
"Sprint PCS Preferred Stock" shall mean the Preferred Stock
- -- Seventh Series, Convertible, no par value, of Sprint, which is
to be created prior to the CP Closing.
"Sprint PCS Stock" shall mean the Sprint PCS Common Stock,
the Sprint PCS Preferred Stock and the Series 3 PCS Stock.
"Sprint Rights Plan" shall mean the Amended and Restated
Rights Agreement dated as of the date hereof, as amended from
time to time, between Sprint and UMB Bank, n.a., as rights agent.
"Sprint Voting Securities" shall mean the Sprint FON Common
Stock, the Sprint PCS Common Stock, the Sprint PCS Preferred
Stock, the Class A Stock and any other securities of Sprint
having the right to Vote.
"Strategic Investor" shall mean any Person which owns
directly any equity interests in a Qualified Subsidiary, other
than FT, DT, any wholly owned Subsidiary of FT or DT or a Passive
Financial Institution.
"Strategic Investor Standstill Agreement" shall mean a
Standstill Agreement in the form of Exhibit B.
"Subsequent Percentage Limitations" shall have the meaning
set forth in Section 2.1(a)(ii), as adjusted pursuant to Section
2.2(a).
"Vote" shall mean, as to any entity, the ability to cast a
vote at a stockholders' or comparable meeting of such entity with
respect to the election of directors or other members of such
entity's governing body, provided that:
(i) with respect to Sprint only, the term "Vote" shall
mean the ability to exercise general voting power (as opposed to
the exercise of special voting or disapproval rights such as
those set forth in the Class A Provisions) with respect to
matters other than the election of directors at a meeting of the
stockholders of Sprint;
(ii) with respect to Sprint only, the term "Vote" shall
include the aggregate number of Votes represented by all Sprint
Voting Securities which as of such date any of FT or DT or any of
their respective Affiliates Beneficially Owns or is committed to
acquire from Sprint or has the right to acquire (or to commit to
acquire) from Sprint pursuant to the Amended and Restated
Stockholders' Agreement;
(iii) except as set forth in clause (iv) of this
definition, with respect to Sprint only, in determining the
number of Votes outstanding at any date and/or represented by any
Sprint Voting Securities at any date, a record date for
determining the stockholders entitled to vote shall be deemed to
have been set by the Board of Directors of Sprint on each such
date and accordingly the number of Votes represented by the
Sprint PCS Stock on any given date shall be deemed to have been
adjusted in the manner provided in Section 3.2 of ARTICLE SIXTH
of the Articles as if such date were a record date for
determining the stockholders entitled to vote; and
(iv) notwithstanding clause (iii) of this definition, during
a Record Date Period, the number of Votes outstanding at any date
from and including the first day of such period and to and
including the last day of such period and/or represented by any
Sprint Voting Securities at any date during such period shall be
determined in the manner provided in Section 3.2 of ARTICLE SIXTH
of the Articles with respect to the record date occurring on the
last day of such Record Date Period including, in the case of a
record date for the payment of dividends, as if such date were a
record date for determining the stockholders entitled to vote.
"Voting Power" shall mean, as to any entity as at any date,
the aggregate number of Votes outstanding as at such date in
respect of such entity, provided that, in the case of Sprint, the
term "Voting Power" shall mean the aggregate number of Votes
represented by all Outstanding Sprint Voting Securities.
In addition to the foregoing, each of the following terms
shall have the respective meanings given to such term in Article
I of the Amended and Restated Stockholders' Agreement: Alien,
Applicable Law, Articles, Associate, Atlas, Change of Control,
Class A Provisions, Exchange Act, FCC, France, Germany,
Governmental Authority, Initial Charter Amendment, Joint Venture
Agreement, Joint Venture Documents, JV Entity, Passive Financial
Institution, Person, Qualified Stock Purchaser, Qualified
Subsidiary, SEC and Subsidiary.
Section 1.2. Interpretation and Construction of this
Agreement. The definitions in Section 1.1 shall apply equally to
both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation." All references
herein to Articles, Sections and Exhibits shall be deemed to be
references to Articles and Sections of, and Exhibits to, this
Agreement unless the context shall otherwise require. The
headings of the Articles and Sections are inserted for
convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
Unless the context shall otherwise require or provide, any
reference to any agreement or other instrument or statute or
regulation is to such agreement, instrument, statute or
regulation as amended and supplemented from time to time (and, in
the case of a statute or regulation, to any successor provision).
ARTICLE 2.
RESTRICTIONS ON ACQUISITION OF VOTING SECURITIES BY
FT, DT AND THEIR AFFILIATES AND ASSOCIATES
Section 2.1. Acquisition Restrictions.
(a) Subject to Sections 2.2, 2.3 and 2.4, each of FT
and DT agrees that it will not, and will cause each of its
respective Affiliates and Associates not to, directly or
indirectly, acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, Beneficial Ownership of:
(i) any Sprint Voting Securities on or prior to July 31,
2010 (the "Initial Standstill Period"), if any of the
following would occur: (A) the Votes represented by the
Sprint Voting Securities Beneficially Owned in the
aggregate by FT, DT and their respective Affiliates and
Associates would represent in the aggregate more than
20% of the Voting Power represented by the Outstanding
Sprint Voting Securities, (B) the Votes represented by
the shares of Class A Common Stock (to the extent
representing Shares Issuable With Respect To The Class
A Equity Interest In The FON Group) and Sprint FON
Stock Beneficially Owned in the aggregate by FT, DT and
their respective Affiliates and Associates would
represent in the aggregate more than 33% of the Voting
Power represented by the Outstanding Sprint FON Stock,
or (C) the Votes represented by the shares of Class A
Common Stock (to the extent representing Shares
Issuable With Respect To The Class A Equity Interest In
The PCS Group) and Sprint PCS Stock Beneficially Owned
in the aggregate by FT, DT and their respective
Affiliates and Associates would represent in the
aggregate more than 33% of the Voting Power represented
by the Outstanding Sprint PCS Stock (clauses (A), (B)
and (C) being collectively referred to as the "Initial
Percentage Limitations"); or
(ii) any Sprint Voting Securities after the Initial
Standstill Period, if any of the following would occur:
(A) the Votes represented by the Sprint Voting
Securities Beneficially Owned in the aggregate by FT,
DT and their respective Affiliates and Associates would
represent in the aggregate more than 30% of the Voting
Power represented by the Outstanding Sprint Voting
Securities, (B) the Votes represented by the shares of
Class A Common Stock (to the extent representing Shares
Issuable With Respect To The Class A Equity Interest In
The FON Group) and Sprint FON Stock Beneficially Owned
in the aggregate by FT, DT and their respective
Affiliates and Associates would represent in the
aggregate more than 33% of the Voting Power represented
by the Outstanding Sprint FON Stock, (C) the Votes
represented by the shares of Class A Common Stock (to
the extent representing Shares Issuable With Respect To
The Class A Equity Interest In The PCS Group) and
Sprint PCS Stock Beneficially Owned in the aggregate by
FT, DT and their respective Affiliates and Associates
would represent in the aggregate more than 33% of the
Voting Power represented by the Outstanding Sprint PCS
Stock (clauses (A), (B) and (C) being collectively
referred to as the "Subsequent Percentage Limitations";
the Initial Percentage Limitations and the Subsequent
Percentage Limitations, as the case may be, also being
referred to as the "Percentage Limitations"), or (D)
the Sprint Voting Securities Beneficially Owned in the
aggregate by FT and DT and their respective Affiliates
and Associates would exceed 80% of the Aggregate
Foreign Ownership Limitation; or
(iii) any Sprint nonvoting equity securities, but not
including any "Derivative Security" (as defined in the
Purchase Rights Agreement) purchased by FT or DT from
the Cable Partners under the Purchase Rights Agreement
so long as the acquisition of the shares acquired as a
result of such derivative instruments is not otherwise
in violation of this Agreement.
(b) In addition to any other restrictions contained
herein or in the Joint Venture Documents, the Parties agree that
none of the Parties will cause any JV Entity to, directly or
indirectly, acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, Beneficial Ownership of any equity
securities of Sprint.
Section 2.2. Exception to Purchase Restrictions.
(a) Subject to Section 2.4, if a Percentage Limitation
Adjustment Event shall occur, then the applicable Percentage
Limitations shall be increased to the extent necessary so that
Sections 2.1(a)(i) and 2.1(a)(ii) do not prohibit FT, DT and
their respective Affiliates from acquiring Beneficial Ownership
of additional Sprint Voting Securities so long as each of the
following conditions is satisfied: (i) the Votes represented by
the Sprint Voting Securities Beneficially Owned in the aggregate
by FT, DT and their respective Affiliates and Associates and any
Qualified Stock Purchasers are no greater than the Votes
represented by the Sprint Voting Securities Beneficially Owned by
the Largest Other Holder, after giving effect to any dilution to
such holder resulting from the operation of the Sprint Rights
Plan, (ii) the Votes represented by the shares of Class A Common
Stock (to the extent representing Shares Issuable With Respect To
The Class A Equity Interest In The FON Group) and Sprint FON
Stock Beneficially Owned in the aggregate by FT, DT and their
respective Affiliates and Associates do not represent in the
aggregate more than 33% of the Voting Power represented by the
Outstanding Sprint FON Stock, (iii) the Votes represented by
the shares of Class A Common Stock (to the extent representing
Shares Issuable With Respect To The Class A Equity Interest In
The PCS Group) and Sprint PCS Stock Beneficially Owned in the
aggregate by FT, DT and their respective Affiliates and
Associates do not represent in the aggregate more than 33% of the
Voting Power represented by the Outstanding Sprint PCS Stock,
and (iv) the Sprint Voting Securities Beneficially Owned in the
aggregate by FT and DT and their respective Affiliates do not at
any time exceed 80% of the Aggregate Foreign Ownership
Limitation.
(b) Subject to Section 2.4, if an acquisition by FT,
DT or any of their respective Affiliates or Associates of
Beneficial Ownership of additional Sprint Voting Securities
otherwise permitted by Section 2.1(a)(ii) or 2.2(a) is prohibited
thereunder due to clause (D) of Section 2.1(a)(ii) or due to
clause (iv) of Section 2.2(a), then FT or DT may assign to one or
more non-Alien Qualified Stock Purchasers in accordance with
Section 7.2 of the Amended and Restated Stockholders' Agreement
their rights under Section 2.1(a)(ii) or 2.2(a) to purchase in
the aggregate the number of shares of Sprint Voting Securities
which equals the number of shares of Sprint Voting Securities the
purchase of which is prohibited by clause (D) of Section
2.1(a)(ii) or clause (iv) of Section 2.2(a), as the case may be.
Section 2.3. Effect of Action by Sprint; Inadvertent
Action.
(a) Subject to Section 2.3(b), neither FT nor DT shall
be deemed in violation of this Article 2 if the Beneficial
Ownership of Sprint Voting Securities by FT, DT and their
respective Affiliates and Associates exceeds the applicable
Percentage Limitations (i) solely as a result of an acquisition
of Sprint Voting Securities by Sprint (including as a result of a
redemption by Sprint of its Sprint PCS Preferred Stock) that, by
reducing the number of Outstanding Sprint Voting Securities,
increases the proportionate number of Sprint Voting Securities
Beneficially Owned by FT, DT and their respective Affiliates and
Associates, (ii) if FT, DT and their Affiliates and Associates
are in compliance with clauses (B) and (C) of Section 2.1(a)(i)
(or, after the Initial Standstill Period, clauses (B) and (C) of
Section 2.1(a)(ii)), the Beneficial Ownership of Sprint Voting
Securities by FT, DT and their respective Affiliates and
Associates does not exceed the Percentage Limitation set forth
in clause (A) of Section 2.1(a)(i) (or, after the Initial
Standstill Period, clause (A) of Section 2.1(a)(ii)) by more than
0.5% and the acquisitions of Beneficial Ownership which resulted
in FT, DT and their respective Affiliates and Associates
exceeding such Percentage Limitation were undertaken in good
faith and such applicable Percentage Limitation was exceeded
inadvertently, (iii) solely as a result of any readjustment in
the relative Voting Power of the Sprint FON Stock and the Sprint
PCS Stock in accordance with the terms of the Articles, (iv)
solely as a result of a redemption or conversion of any Sprint
PCS Stock pursuant to ARTICLE SIXTH, Section 7 of the Articles,
or (v) because FT, DT or their respective Affiliates or
Associates acquire Beneficial Ownership of Sprint Voting
Securities in excess of the applicable Percentage Limitations in
reliance on information regarding the number of outstanding
shares of Sprint provided directly to any of FT, DT and their
respective Affiliates and Associates by Sprint in response to a
request for such information by any of FT, DT and their
respective Affiliates and Associates immediately prior to such
purchase.
(b) Notwithstanding Section 2.3(a), the applicable
Percentage Limitations shall be deemed exceeded if (i) in the
case of Section 2.3(a)(i), FT, DT or any of their respective
Affiliates or Associates acquires Beneficial Ownership of any
additional Sprint Voting Securities after it has been notified of
an acquisition of Sprint Voting Securities by Sprint (including
as a result of a redemption by Sprint of its Sprint PCS Preferred
Stock), (ii) in the case of Section 2.3(a)(ii), FT, DT or any of
their respective Affiliates or Associates acquires Beneficial
Ownership of any additional Sprint Voting Securities after it has
been notified or has knowledge that one or more of the applicable
Percentage Limitations has been exceeded, (iii) in the case of
Section 2.3(a)(iii), after a readjustment in the relative Voting
Power of the Sprint FON Stock and the Sprint PCS Stock which
results in FT, DT and their respective Affiliates and Associates
having Beneficial Ownership of Sprint Voting Securities in excess
of any of the applicable Percentage Limitations, FT, DT or any of
their respective Affiliates or Associates acquires Beneficial
Ownership of any additional Sprint Voting Securities, after being
notified of, or having knowledge of such readjustment in the
relative Voting Power, (iv) in the case of Section 2.3(a)(iv),
after the redemption or conversion of any Sprint PCS Stock
pursuant to ARTICLE SIXTH, Section 7 of the Articles which
results in FT, DT and their respective Affiliates and Associates
having Beneficial Ownership of Sprint Voting Securities in excess
of any of the applicable Percentage Limitations, FT, DT or any of
their respective Affiliates or Associates acquires Beneficial
Ownership of any additional Sprint Voting Securities after being
notified of, or having knowledge of, such redemption or
conversion, and (v) in the case of Section 2.3(a)(v), FT, DT or
any of their respective Affiliates or Associates acquires
Beneficial Ownership of additional Sprint Voting Securities after
it has been notified that the information regarding the number of
outstanding shares previously provided to it was incorrect and it
has been provided by Sprint with correct information, unless in
the case of clauses (i), (ii), (iii), (iv) and (v):
(x) upon the acquisition of Beneficial Ownership of
such additional Sprint Voting Securities, FT, DT and their
respective Affiliates and Associates do not Beneficially Own
in the aggregate more than any of the applicable Percentage
Limitations, or
(y) subject to the rights of Sprint in Section 5.7 of
the Amended and Restated Stockholders' Agreement, such
acquisition is effected pursuant to (A) the exercise of
equity purchase rights by FT or DT pursuant to the Amended
and Restated Stockholders' Agreement, or (B) market
purchases which are made solely in lieu of the exercise of
equity purchase rights by FT or DT pursuant to the Amended
and Restated Stockholders' Agreement following the issuance
of securities by Sprint, so long as (1) either (I) FT or DT,
as the case may be, has irrevocably waived its rights to
exercise the equity purchase rights in respect of which such
market purchases are made in lieu thereof, or (II) the time
period for the exercise of such equity purchase rights has
expired without the exercise of such rights, and (2)
following such market purchases, the Percentage Ownership
Interest of FT, DT and their respective Affiliates and
Associates does not exceed the Percentage Ownership Interest
of FT, DT and their respective Affiliates and Associates
which would have been in effect had FT, DT and their
respective Affiliates exercised such equity purchase rights.
Section 2.4. Sprint Rights Plan.
(a) Notwithstanding the provisions of Sections 2.1 and
2.2, each of FT and DT agrees that it will not, and will cause
each of its respective Affiliates not to, directly or indirectly,
acquire, offer to acquire, or agree to acquire, by purchase or
otherwise, Beneficial Ownership of any Sprint Voting Securities
if such acquisition would result in FT or DT or any of their
respective Affiliates being deemed an Acquiring Person (as such
term is defined in the Sprint Rights Plan) or result in the
occurrence of a Stock Acquisition Date, Distribution Date,
Section 11(a)(ii) Event or Section 13 Event (as such terms are
defined in the Sprint Rights Plan).
(b) If the Sprint Board of Directors amends or waives
the provisions of the Sprint Rights Plan in such a manner to
permit an Other Holder to acquire Beneficial Ownership of Sprint
Voting Securities having Votes in excess of the applicable
Percentage Limitations without such acquisition resulting in the
Other Holder being deemed an Acquiring Person or resulting in the
occurrence of a Stock Acquisition Date, Distribution Date,
Section 11(a)(ii) Event or Section 13 Event or makes any other
changes to the Sprint Rights Plan which would permit any Other
Holder to own Sprint Voting Securities having Votes in excess of
the applicable Percentage Limitations without triggering adverse
consequences under the Sprint Rights Plan to such Other Holder,
then Sprint will amend or waive the provisions of the Sprint
Rights Plan so that the Sprint Rights Plan does not impose any
prohibition (including any prohibition on the ownership of Voting
Securities) on FT, DT and their respective Affiliates and
Associates which is more restrictive than the restrictions
imposed on any Other Holder.
ARTICLE 3.
OTHER STANDSTILL PROVISIONS; QUORUM
Section 3.1. Standstill Covenants. Each of FT and DT
agrees that it will not, and it will cause each of its respective
Affiliates and Associates not to, directly or indirectly, alone
or in concert with others (including with any Government
Affiliate, Related Company or Qualified Stock Purchaser), unless
specifically requested in writing by the Chairman of Sprint or by
a resolution of a majority of the directors of Sprint, take any
of the actions set forth below, except to the extent expressly
permitted or provided for by the Amended Other Agreements and the
Joint Venture Documents:
(a) effect, seek, offer, propose (whether publicly or
otherwise) or cause or participate in, or assist any other Person
to effect, seek, offer or propose (whether publicly or otherwise)
or participate in:
(i) any acquisition of Beneficial Ownership of Sprint
Voting Securities or other equity interests in Sprint
which would result in a breach of Article 2 of this
Agreement;
(ii) any tender or exchange offer, merger, consolidation,
share exchange or business combination involving Sprint
or any material portion of its business or any purchase
of all or any substantial part of the assets of Sprint
or any material portion of its business, provided that
nothing in this clause (ii) shall prohibit discussions
by the Parties in connection with the conduct of the
business of the JV Entities in the manner contemplated
by the Joint Venture Documents or in connection with
offers by FT or DT to purchase equity interests owned
by Sprint in the JV Entities;
(iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with
respect to Sprint or any material portion of its
business, provided that nothing in this clause (iii)
shall prohibit discussions by the Parties in connection
with the conduct of the business of the JV Entities or
in connection with offers by FT or DT to purchase
equity interests owned by Sprint in the JV Entities; or
(iv) any "solicitation" of "proxies" (as such terms are used
in the proxy rules of the SEC but without regard to the
exclusion set forth in Section 14a-1(l)(2)(iv) from the
definition of "solicitation") with respect to Sprint or
any of its Affiliates or any action resulting in such
Person becoming a "participant" in any "election
contest" (as such terms are used in the proxy rules of
the SEC) with respect to Sprint or any of its
Affiliates;
(b) propose any matter for submission to a vote of
stockholders of Sprint or any of its Affiliates; provided that
nothing in this Section 3.1(b) shall restrict the manner in which
the members of the Board of Directors of Sprint elected by the
holders of Class A Stock may (i) vote on any matter submitted to
such Board, or (ii) participate in deliberations or discussions
of such Board (including making suggestions and raising issues to
the Board, so long as such actions do not otherwise violate any
other provision of this Section 3.1 or Section 3.2) in their
capacity as members of such Board and in no other capacity,
including any capacity such persons serving as directors
otherwise may have as a director, officer, employee, agent or
representative of any other Person, including any holder of
Class A Stock;
(c) form, join or participate in a Group with respect
to any Sprint Voting Securities (other than any Group whose
members consist solely of FT, DT, any of their respective
Affiliates and Associates and any Qualified Subsidiaries);
(d) grant any proxy with respect to any Sprint Voting
Securities to any Person not designated by Sprint, except for
proxies granted to FT or DT or Qualified Subsidiaries or to
individuals who are officers, employees or regular agents or
advisors of FT or DT or Qualified Subsidiaries who have received
specific instructions from FT, DT or Qualified Subsidiaries, as
the case may be, as to the voting of such Sprint Voting
Securities with respect to the matter or matters for which the
proxy is granted;
(e) deposit any Sprint Voting Securities in a voting
trust or subject any Sprint Voting Securities to any arrangement
or agreement with respect to the voting of such Sprint Voting
Securities or other agreement having similar effect, except for
agreements solely among FT, DT and any Qualified Subsidiary;
(f) execute any written stockholder consent with
respect to Sprint, except for written consents executed by such
Persons as holders of the Class A Stock in connection with (i)
the election of Class A Directors (as defined in the Articles),
(ii) the approval or disapproval of a Subject Event, Major
Issuance or Major Competitor Transaction (each as defined in the
Articles) during the period in which the holders of the Class A
Stock are entitled to exercise disapproval rights with respect to
such matter, (iii) any vote by the holders of Class A Common
Stock, Series 3 FON Stock, or Series 3 PCS Stock with respect to
which holders of each such class or series of stock is entitled
to vote separately as a class, or (iv) any vote by the holders of
the Class A Stock with respect to which such holders are entitled
to vote together as a single class;
(g) take any other action to seek to affect the
control of the management or Board of Directors of Sprint or any
of its Affiliates; provided that nothing in this Section 3.1(g)
shall restrict the manner in which the members of the Board of
Directors of Sprint elected by the holders of Class A Stock may
(i) vote on any matter submitted to such Board, or (ii)
participate in deliberations or discussions of such Board
(including making suggestions and raising issues to the Board, so
long as such actions do not otherwise violate any other provision
of this Section 3.1 or Section 3.2) in their capacity as members
of such Board and in no other capacity, including any capacity
such persons serving as directors otherwise may have as a
director, officer, employee, agent or representative of any other
Person, including any holder of Class A Stock;
(h) enter into any discussions, negotiations,
arrangements or understandings with any Person (including any
Government Affiliate, Related Company or Qualified Stock
Purchaser) other than FT, DT, their Affiliates, Associates and
their respective directors, officers, employees, agents or
advisors with respect to any of the foregoing, or advise, assist,
encourage or seek to persuade others to take any action with
respect to any of the foregoing;
(i) disclose to any Person (including any Government
Affiliate, Related Company or Qualified Stock Purchaser) other
than FT, DT, their Affiliates, Associates and their respective
directors, officers, employees, agents or advisors any intention,
plan or arrangement inconsistent with the foregoing or with the
restrictions on transfer set forth in Article II of the
Stockholders' Agreement or form any such intention which would
result in FT, DT or any of their respective Affiliates or
Associates being required to make any such disclosure in any
filing with a Governmental Authority or being required by
Applicable Law to make a public announcement with respect
thereto; or
(j) request Sprint or any of its Affiliates,
directors, officers, employees, representatives, advisors or
agents, directly or indirectly, to amend or waive in any material
respect this Agreement (including this Section 3.1(j)) or the
articles of incorporation or the bylaws of Sprint or any of its
Affiliates.
Section 3.2. Press Releases, Etc. by FT and DT.
(a) Subject to Section 3.2(b), each of FT and DT may
issue such press releases and make such other public
communications to the financial community and to its stockholders
and such other public statements made in the ordinary course
relating to its investment in Sprint, in each case as it
reasonably deems appropriate and customary. Prior to making any
such press release or other communication, FT and DT will use
reasonable efforts to consult with Sprint in good faith regarding
the form and content of any such communication, and FT and DT
will use reasonable efforts to coordinate any such communication
with any decisions reached by Sprint with respect to disclosures
relating to such matters.
(b) Notwithstanding the provisions of Section 3.2(a),
unless required by Applicable Law, neither FT nor DT, nor any of
their respective Affiliates or Associates, may make any press
release, public announcement or other communication with respect
to any of the matters described in Sections 3.1(a), 3.1(b),
3.1(c), 3.1(g), 3.1(h) or 3.1(j) without the prior written
consent of the Chairman of Sprint or by a resolution of a
majority of the directors of Sprint. Nothing in this Section 3.2
shall permit FT or DT to take any action which would otherwise
violate any provision contained in Section 3.1.
Section 3.3. Voting of Sprint Voting Securities. Except
as set forth in Sections 3.1(d), 3.1(e) and 3.1(f), nothing in
Section 3.1 shall restrict the manner in which FT, DT and their
respective Affiliates may vote their Sprint Voting Securities.
Section 3.4. Quorum. Each of FT and DT shall use
reasonable efforts to ensure that they shall be present, and
shall use reasonable efforts to cause their respective Affiliates
and Associates owning Sprint Voting Securities to be present, in
each case, in person or by proxy, at all meetings of stockholders
of Sprint so that all Sprint Voting Securities Beneficially Owned
by FT and DT and their respective Affiliates and Associates shall
be counted for purposes of determining the presence of a quorum
at such meeting.
Section 3.5. Notice of Proposals Regarding Acquisition
Transactions. Each of FT and DT agrees that it will notify
Sprint promptly if any inquiries or proposals which FT or DT
reasonably believes are of substance are received by, any
information is exchanged with respect to, or any negotiations or
substantive discussions are initiated or continued with, FT or DT
or any of their respective Affiliates regarding any Acquisition
Proposal involving Sprint or any purchase of any of the shares of
capital stock of Sprint Beneficially Owned by FT, DT or any of
their respective Affiliates pursuant to a tender offer or
exchange offer.
ARTICLE 4.
OBLIGATIONS OF OTHER ENTITIES
Section 4.1. Qualified Subsidiaries. FT and DT shall cause
each Person which, as a result of the acquisition of Beneficial
Ownership of any Sprint Voting Securities, would become a
Qualified Subsidiary to execute a Qualified Subsidiary Standstill
Agreement prior to and as a condition to the effectiveness of
such acquisition.
Section 4.2. Strategic Investors. FT and DT shall cause
each Person which, as a result of an acquisition of Beneficial
Ownership of any equity interest in a Qualified Subsidiary, would
become a Strategic Investor (and any Person who Beneficially Owns
more than 35% of the Voting Power, or otherwise Controls, such
acquiring Person) to execute a Strategic Investor Standstill
Agreement prior to and as a condition to the effectiveness of
such acquisition.
ARTICLE 5.
MISCELLANEOUS
Section 5.1. Termination. The provisions of this
Agreement shall terminate if the Company proceeds with a
transaction involving a Change of Control following the process
described in Section 4.1 of the Amended and Restated
Stockholders' Agreement. Any termination of this Agreement as
provided herein shall be without prejudice to the rights of any
Party arising out of the breach by any other Party of any
provision of this Agreement.
Section 5.2. Notices. All notices and other
communications required or permitted by this Agreement shall be
made in writing in the English language and any such notice or
communication shall be deemed delivered when delivered in person,
transmitted by telex or telecopier, or seven days after it has
been sent by air mail, as follows:
FT: 6 place d'Alleray
75505 Paris Cedex 15
France
Attention: Group Executive Vice President
Resources
Tel: (33-1) 44-44-84-72
Fax: (33-1) 44-44-01-51
with a copy to:
6 place d'Alleray
75505 Paris Cedex 15
France
Attention: General Counsel
Tel: (33-1) 44-44-84-76
Fax: (33-1) 44-44-02-13
and with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
U.S.A.
Attention: Alfred J. Ross, Jr., Esq.
Tel: (212) 848-4000
Fax: (212) 848-8434
DT: Friedrich-Ebert-Allee 140
D-53113 Bonn
Germany
Attention: Chief Executive Officer
Tel: 49-228-181-9000
Fax: 49-228-181-8970
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
U.S.A.
Attention: Robert P. Davis, Esq.
Tel: (212) 225-2000
Fax: (212) 225-3999
Sprint: 2330 Shawnee Mission Parkway
East Wing
Westwood, Kansas 66205
U.S.A.
Attention: General Counsel
Tel: (913) 624-8440
Fax: (913) 624-8426
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
U.S.A.
Attention: Bruce N. Hawthorne, Esq.
Tel: (404) 572-4903
Fax: (404) 572-5146
The Parties shall promptly notify each other in the manner
provided in this Section 5.2 of any change in their respective
addresses. A notice of change of address shall not be deemed to
have been given until received by the addressee. Communications
by telex or telecopier also shall be sent concurrently by mail,
but shall in any event be effective as stated above.
Section 5.3. Assignment. No Party will assign this
Agreement or any rights, interests or obligations hereunder, or
delegate performance of any of its obligations hereunder, without
the prior written consent of each other Party.
Section 5.4. Entire Agreement. This Agreement, including
the Exhibits attached hereto, embodies the entire agreement and
understanding of the Parties in respect of the subject matter
contained herein, provided that this provision shall not abrogate
any other written agreement between the Parties executed
simultaneously with this Agreement. This Agreement supersedes
all prior agreements and understandings between the Parties with
respect to such subject matter.
Section 5.5. Waiver, Amendment, etc. This Agreement may
not be amended or supplemented, and no waivers of or consents to
departures from the provisions hereof shall be effective, unless
set forth in a writing signed by, and delivered to, all the
Parties. No failure or delay of any Party in exercising any
power or right under this Agreement will operate as a waiver
thereof, nor will any single or partial exercise of any right or
power, or any abandonment or discontinuance of steps to enforce
such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.
Section 5.6. Binding Agreement; No Third Party
Beneficiaries. This Agreement will be binding upon and inure to
the benefit of the Parties and their successors and permitted
assigns. Nothing expressed or implied herein is intended or will
be construed to confer upon or to give to any third party any
rights or remedies by virtue hereof.
Section 5.7. Governing Law; Dispute Resolution; Equitable
Relief.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (REGARDLESS
OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW).
(b) EACH PARTY IRREVOCABLY CONSENTS AND AGREES THAT
ANY LEGAL ACTION, SUIT OR PROCEEDING AGAINST IT WITH RESPECT TO
ITS OBLIGATIONS OR LIABILITIES UNDER OR ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK OR, IN THE EVENT (BUT ONLY IN THE EVENT) SUCH COURT DOES NOT
HAVE SUBJECT MATTER JURISDICTION OVER SUCH ACTION, SUIT OR
PROCEEDING, IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE
CITY OF NEW YORK, AND EACH PARTY HEREBY IRREVOCABLY ACCEPTS AND
SUBMITS TO THE JURISDICTION OF EACH OF THE AFORESAID COURTS IN
PERSONAM, WITH RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING
(INCLUDING CLAIMS FOR INTERIM RELIEF, COUNTERCLAIMS, ACTIONS WITH
MULTIPLE DEFENDANTS AND ACTIONS IN WHICH SUCH PARTY IS IMPLED).
EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT THAT
IT MAY HAVE TO A JURY TRIAL IN ANY LEGAL ACTION, SUIT OR
PROCEEDING WITH RESPECT TO, OR ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT.
(c) EACH OF FT AND DT HEREBY IRREVOCABLY DESIGNATES CT
CORPORATION SYSTEM (IN SUCH CAPACITY, THE "PROCESS AGENT"), WITH
AN OFFICE AT 1633 BROADWAY, NEW YORK, NEW YORK 10019, AS ITS
DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, FOR AND ON ITS BEHALF
SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR
PROCEEDINGS WITH RESPECT TO THIS AGREEMENT, AND SUCH SERVICE
SHALL BE DEEMED COMPLETE UPON DELIVERY THEREOF TO THE PROCESS
AGENT, PROVIDED THAT IN THE CASE OF ANY SUCH SERVICE UPON THE
PROCESS AGENT, THE PARTY EFFECTING SUCH SERVICE SHALL ALSO
DELIVER A COPY THEREOF TO FT AND DT IN THE MANNER PROVIDED IN
SECTION 5.2. FT AND DT SHALL TAKE ALL SUCH ACTION AS MAY BE
NECESSARY TO CONTINUE SAID APPOINTMENT IN FULL FORCE AND EFFECT
OR TO APPOINT ANOTHER AGENT SO THAT FT AND DT WILL AT ALL TIMES
HAVE AN AGENT FOR SERVICE OF PROCESS FOR THE ABOVE PURPOSES IN
NEW YORK, NEW YORK. IN THE EVENT OF THE TRANSFER OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS AND BUSINESS OF THE PROCESS AGENT
TO ANY OTHER CORPORATION BY CONSOLIDATION, MERGER, SALE OF ASSETS
OR OTHERWISE, SUCH OTHER CORPORATION SHALL BE SUBSTITUTED
HEREUNDER FOR THE PROCESS AGENT WITH THE SAME EFFECT AS IF NAMED
HEREIN IN PLACE OF CT CORPORATION SYSTEM. EACH OF FT AND DT
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED AIRMAIL, POSTAGE
PREPAID, TO SUCH PARTY AT ITS ADDRESS SET FORTH IN THIS
AGREEMENT, SUCH SERVICE OF PROCESS TO BE EFFECTIVE UPON
ACKNOWLEDGMENT OF RECEIPT OF SUCH REGISTERED MAIL. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. EACH OF FT AND DT
EXPRESSLY ACKNOWLEDGES THAT THE FOREGOING WAIVER IS INTENDED TO
BE IRREVOCABLE UNDER THE LAWS OF THE STATE OF NEW YORK AND OF THE
UNITED STATES OF AMERICA.
(d) EACH PARTY AGREES THAT MONEY DAMAGES WOULD NOT BE
A SUFFICIENT REMEDY FOR THE OTHER PARTIES FOR ANY BREACH OF THIS
AGREEMENT BY IT, AND THAT IN ADDITION TO ALL OTHER REMEDIES THE
OTHER PARTIES MAY HAVE, THEY SHALL BE ENTITLED TO SPECIFIC
PERFORMANCE AND TO INJUNCTIVE OR OTHER EQUITABLE RELIEF AS A
REMEDY FOR ANY SUCH BREACH TO THE EXTENT PERMITTED BY APPLICABLE
LAW. EACH PARTY AGREES NOT TO OPPOSE THE GRANTING OF SUCH RELIEF
IN THE EVENT A COURT DETERMINES THAT SUCH BREACH HAS OCCURRED,
AND AGREES TO WAIVE ANY REQUIREMENT FOR THE SECURING OR POSTING
OF ANY BOND IN CONNECTION WITH SUCH REMEDY.
Section 5.8. Severability. The invalidity or
unenforceability of any provision hereof in any jurisdiction will
not affect the validity or enforceability of the remainder hereof
in that jurisdiction or the validity or enforceability of this
Agreement, including that provision, in any other jurisdiction.
To the extent permitted by Applicable Law, each Party waives any
provision of Applicable Law that renders any provision hereof
prohibited or unenforceable in any respect. If any provision of
this Agreement is held to be unenforceable for any reason, to the
extent permitted by Applicable Law it shall be adjusted rather
than voided, if possible, in order to achieve the intent of the
Parties to the extent possible.
Section 5.9. Translation. The parties hereto have
negotiated this Agreement in the English language, and have
prepared successive drafts and the definitive text of this
Agreement in the English language. For purposes of complying
with loi n? 94-665 du 4 aout 1994 relative a l'emploi de la
langue francaise, the parties hereto have prepared a French
version of this Agreement, which French version was executed and
delivered simultaneously with the execution and delivery of the
English version hereof. The parties deem the French and English
versions of this Agreement to be equally authoritative.
Section 5.10. Counterparts. This Agreement may be executed
in one or more counterparts each of which when so executed and
delivered will be deemed an original but all of which will
constitute one and the same Agreement.
Section 5.11. Waiver of Immunity. Each of FT and DT agrees
that, to the extent that it or any of its property is or becomes
entitled at any time to any immunity on the grounds of
sovereignty or otherwise based upon its status as an agency or
instrumentality of government from any legal action, suit or
proceeding or from setoff or counterclaim relating to this
Agreement from the jurisdiction of any competent court, from
service of process, from attachment prior to judgment, from
attachment in aid of execution of a judgment, from execution
pursuant to a judgment or arbitral award or from any other legal
process in any jurisdiction, it, for itself and its property
expressly, irrevocably and unconditionally waives, and agrees not
to plead or claim, any such immunity with respect to such matters
arising with respect to this Agreement or the subject matter
hereof (including any obligation for the payment of money). Each
of FT and DT agrees that the waiver in this provision is
irrevocable and is not subject to withdrawal in any jurisdiction
or under any statute, including the Foreign Sovereign Immunities
Act, 28 U.S.C. Section 1602, et seq. The foregoing waiver shall
constitute a present waiver of immunity at any time any action is
initiated against FT or DT with respect to this Agreement.
Section 5.12. Remedies. In addition to any other remedies
which may be available to Sprint (including any remedies which
Sprint may have at law or in equity):
(a) Each of FT and DT agrees that Sprint shall have no
obligation to honor transfers of Sprint Voting Securities or
other equity interests in Sprint to FT, DT or any of their
respective Affiliates or Associates which would cause any of FT,
DT and their respective Affiliates or Associates to Beneficially
Own Sprint Voting Securities or other equity interests in Sprint
in violation of this Agreement, any such transfers shall be void
and of no effect, and Sprint shall be entitled to instruct any
transfer agent or agents for the equity interests in Sprint to
refuse to honor such transfers; and
(b) FT and DT acknowledge the provisions set forth in
ARTICLE SIXTH, Section 2.5 of the Articles, ARTICLE SIXTH,
Section 8.5(b) of the Articles, and Section 3.5 and Article VIII
of the Amended and Restated Stockholders' Agreement relating to
the consequences of a breach of certain provisions of this
Agreement or any Qualified Subsidiary Standstill Agreement or to
the consequences of certain actions taken by a Government
Affiliate, Qualified Stock Purchaser, Strategic Investor or
Related Company.
[Signature page follows.]
IN WITNESS WHEREOF, Sprint, FT and DT have caused their
respective duly authorized officers to execute this Agreement as
of the day and year first above written.
SPRINT CORPORATION
By: /s/ Don A. Jensen
Name: Don A. Jensen
Title: Vice President and
Secretary
FRANCE TELECOM S.A.
By: /s/ Thierry Girard
Name: Thierry Girard
Title: Senior Vice President
DEUTSCHE TELEKOM AG
By: /s/ Dr. Ron Sommer
Name: Dr. Ron Sommer
Title: Vorstandsvorsitzender
Exhibit 5
December 3, 1998
Sprint Corporation
P.O. Box 11315
Kansas City, Missouri 64112
Re: 1,163,514 shares of FON Common Stock (par value $2.00
per share)
Gentlemen:
I have acted as your counsel in connection with the proposed
offering, issuance and sale by you of an aggregate of 1,163,514
shares of your FON Common Stock (the "Shares") referred to in
Amendment No. 2 to the Registration Statement on Form S-3 (the
"Amendment"), to be filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended
(the "Act"). In such connection, I have examined the Amendment
and I am familiar with the proceedings taken by your stockholders
and your Board of Directors and officers in connection with the
authorization of the Shares, the recapitalization of your Common
Stock into FON Common Stock and PCS Common Stock, and related
matters, and I have reviewed such documents, records, and matters
of law as I have considered necessary for rendering my opinion
hereinafter set forth.
Based upon the foregoing, I am of the opinion that:
1. Sprint Corporation is a corporation duly organized and
validly existing under the laws of the State of Kansas.
2. The Automatic Dividend Reinvestment Plan and the Shares have
been duly and validly authorized, and when (i) the Amendment has
become effective under the Act and (ii) the Shares are issued and
sold in the manner and upon the terms set forth in the Automatic
Dividend Reinvestment Plan, such Shares will be legally issued,
fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference made to me
under the caption "Validity of the FON Common Stock" in the
Prospectus forming a part of the Registration Statement. In
giving such consent, I do not thereby admit that I am in the
category of persons whose consent is required under Section 7 of
the Act.
Very truly yours,
/s/ Don A. Jensen
Don A. Jensen
Exhibit 23-A
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statement (Form S-3) pertaining to the Automatic
Dividend Reinvestment Plan of Sprint Corporation of our reports
for Sprint Corporation and the FON Group dated February 3, 1998
(except Note 1, as to which the date is May 26, 1998) and our
report for the PCS Group dated May 26, 1998 included in
Sprint's Proxy Statement/Prospectus that forms a part of
Registration Statement No. 333-65173 and in Sprint's Current
Report (Form 8-K) dated November 2, 1998 filed with the
Securities and Exchange Commission, and our report dated
February 3, 1998, with respect to the consolidated financial
statements and schedule of Sprint Corporation included in its
Annual Report (Form 10-K) for the year ended December 31, 1997,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Kansas City, Missouri
December 3, 1998
Exhibit 23-B
INDEPENDENT AUDITORS' CONSENTS
We consent to the use in Post-Effective Amendment No. 2 to
Registration Statement No. 33-58488 of Sprint Corporation on
Form S-3 of our report dated May 26, 1998 (August 6, 1998 as to
Note 4), on the combined financial statements of Sprint
Spectrum Holding Company, L.P. and subsidiaries, MinorCo, L.P.
and subsidiaries, PhillieCo Partners I, L.P. and subsidiaries
and PhillieCo Partners II, L.P. and subsidiaries (which
expresses an unqualified opinion and includes an explanatory
paragraph referring to the emergence from the development
stage), appearing in Registration Statement No. 333-65173 and
Form 8-K dated November 2, 1998, which are incorporated by
reference in this Prospectus, which is part of this Registration
Statement, and of our report dated May 26, 1998 (August 6, 1998
as to Note 4) relating to the combined financial statement schedule
appearing elsewhere in Registration Statement No. 333-65173
which are incorporated by reference in this prospectus, which is
part of this Registration Statement.
We consent to the use in Post-Effective Amendment No. 2 to
Registration Statement No. 33-58488 of Sprint Corporation on
Form S-3 of our report dated February 3, 1998, on Sprint
Spectrum Holding Company, L.P. and subsidiaries (which
expresses an unqualified opinion and includes an explanatory
paragraph referring to the emergence from the development
stage) appearing in the Annual Report on Form 10-K of Sprint
Corporation for the year ended December 31, 1997, Form 8-K dated
November 2, 1998 and Registration Statement No. 333-65173 which
are incorporated by reference in this prospectus, which is
part of this Registration Statement.
We consent to the use in Post-Effective Amendment No. 2 to
Registration Statement No. 33-58488 of Sprint Corporation on
Form S-3 of our reports dated February 3, 1998, on Sprint
Spectrum L.P. and Sprint Spectrum Finance Corporation (which
expresses an unqualified opinion and includes an explanatory
paragraph referring to the emergence from the development
stage) appearing in Registration Statement No. 333-65173 which
is incorporated by reference in this prospectus, which is part
of this Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Kansas City, Missouri
December 3, 1998
