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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SPRINT CORPORATION
(Exact name of registrant as specified in its charter)
KANSAS 48-0457967
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
P.O. BOX 11315
KANSAS CITY, MO 64112
(Address of principal executive office) (zip code)
If this Form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), please check the following box [X]
If this Form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), please check the following box [_]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class to Name of Each Exchange on Which
be Registered Each Class is to be Registered
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SERIES 1 PCS COMMON NEW YORK STOCK EXCHANGE
STOCK, PAR VALUE $1.00
PER SHARE
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
(Title of class)
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SPRINT CORPORATION
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The description of the Series 1 PCS Common Stock, par value $1.00 per
share, of Sprint Corporation (the "Registrant") registered herein is contained
under the captions "The Tracking Stock Proposal -- The Tracking Stock Policies,"
"Future Inter-Group Interest," "Description of Capital Stock" and "Anti-Takeover
Considerations" of the Registrant's Prospectus/Proxy Statement that forms a part
of the Registrant's Registration Statement on Form S-4 (the "Registration
Statement") that was filed with the Securities and Exchange Commission on
October 1, 1998 (File No. 333-65173). Such description is hereby incorporated by
reference herein pursuant to Rule 12b-23 under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
ITEM 2. EXHIBITS.
4.1 The rights of the Registrant's equity security holders are defined in the
Fifth, Sixth, Seventh and Eighth Articles of the Registrant's Articles of
Incorporation (filed as Exhibit 3(a) to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1997 and incorporated herein by
reference).
4.2 The rights of the Registrant's equity security holders as of the completion
of the PCS Restructuring and the Recapitalization (as such terms are
defined in the Registration Statement) will be defined in the Fifth, Sixth,
Seventh and Eighth Articles of the Registrant's Amended and Restated
Articles of Incorporation.
4.3 Rights Agreement dated as of June 9, 1997, between the Registrant and UMB
Bank, n.a. as Rights Agent (filed as Exhibit 1 to the Registrant's
Registration Statement on Form 8-A dated June 12, 1997 (File No. 1-4721),
and incorporated herein by reference).
4.4 Form of Amended and Restated Rights Agreement between the Registrant and
UMB Bank, n.a., as Rights Agent (filed as Exhibit 4.1 to the Registrant's
Current Report on Form 8-K dated June 29, 1998 and incorporated herein by
reference).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Exchange Act, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
SPRINT CORPORATION
By: /s/ Don A. Jensen
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Don A. Jensen
Vice President
Date: October 30, 1998
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Exhibit 4.2
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF SPRINT CORPORATION
[CHARTER NO. 2 (GIVING EFFECT TO THE PCS STOCK AMENDMENT AND THE
RECAPITALIZATION AMENDMENT)]
We, Don A. Jensen, Vice President, and Michael T. Hyde, Assistant Secretary,
of Sprint Corporation (the "Corporation"), a corporation organized and
existing under the laws of the State of Kansas, do hereby certify as follows:
1. That the Corporation was originally incorporated in the State of Kansas
on November 15, 1938 under the name of United Utilities, Inc.
2. That the Board of Directors of the Corporation, at a meeting of the Board
of Directors, adopted resolutions
(i) approving a plan of recapitalization for the Corporation whereby each
share of (1) the Corporation's existing Common Stock, par value $2.50 per
share, may be reclassified and exchanged for (A) one share of FON Common
Stock--Series 1, par value $2.00 per share, of the Corporation and (B) 1/2
of a share of PCS Common Stock--Series 1, par value $1.00 per share of the
Corporation, (2) the Corporation's Common Stock--Series 2, par value $2.50
per share, may be reclassified and changed into FON Common Stock--Series 2,
par value $2.00 per share, of the Corporation, (3) the Corporation's
existing Class A Common Stock, par value $2.50 per share, shall remain
outstanding but may be reclassified and exchanged into an equal number of
shares of Class A Common Stock, par value $2.50 per share, of the
Corporation (in each such case, such stock is designated as "Old Class A
Common Stock"), (4) the Corporation's existing Class A Common Stock--Series
DT, par value $2.50 per share, shall remain outstanding but may be
reclassified and exchanged into an equal number of shares of Class A Common
Stock--Series DT, par value $2.50, of the Corporation (in each such case,
such stock is designated as "Class A Common Stock--Series DT"), and (5) (A)
PCS Common Stock--Series 1, par value $1.00 per share, (B) PCS Common
Stock--Series 2, par value $1.00 per share, and (C) PCS Common Stock--
Series 3, par value $1.00 per share, would each remain outstanding; and
(ii) if there are fractional shares of Series 1 PCS Stock to be issued in
the Recapitalization, the Corporation shall pay cash in respect of such
fractional shares in an amount equal to the Fair Value thereof on the
Effective Date (for purposes of this clause (ii) only, "Fair Value" of any
fractional share means the product of such fraction and the Market Value
(as defined in ARTICLE SIXTH, Section 10) of one share of Series 1 PCS
Stock); and
(iii) providing for the adoption of these Amended and Restated Articles
of Incorporation of the Corporation, which amend and restate the
Corporation's Articles of Incorporation in their entirety, and
(iv) declaring the advisability of such plan of recapitalization and
these Amended and Restated Articles of Incorporation of the Corporation.
The resolutions further directed that the plan of recapitalization and these
Amended and Restated Articles of Incorporation be submitted to the
stockholders of the Corporation for their consideration and approval.
3. That thereafter, pursuant to the resolutions and in accordance with the
bylaws of the Corporation and the laws of the State of Kansas, the Board of
Directors called a meeting of stockholders for consideration of the plan of
recapitalization and these Amended and Restated Articles of Incorporation, and
thereafter, pursuant to notice and in accordance with the statutes of the
State of Kansas, the stockholders convened and considered the plan of
recapitalization and these Amended and Restated Articles of Incorporation.
4. That at the meeting a majority of the outstanding stock entitled to vote
thereon voted in favor of, among other things, the proposed plan of
recapitalization effected by these Amended and Restated Articles of
Incorporation, and these Amended and Restated Articles of Incorporation were
duly adopted in accordance with the provisions of Kan. Stat. Ann. (S) 17-6602.
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5. That these Amended and Restated Articles of Incorporation shall become
effective on the day of , 1998 (the "Effective Date") pursuant to the
provisions of Kan. Stat. Ann. (S) 17-6003(d).
6. That at the Effective Date,
(i) each share of Common Stock, par value $2.50 per share, of the
Corporation (the "Old Common Stock") outstanding immediately prior to such
filing of these Amended and Restated Articles of Incorporation is hereby
automatically reclassified and exchanged without any action on the part of
the stockholders of the Corporation so that each share of Old Common Stock
becomes (A) one share of FON Common Stock--Series 1, par value $2.00 per
share, of the Corporation and (B) 1/2 of a share of PCS Common Stock--
Series 1, par value $1.00 per share, of the Corporation,
(ii) the Common Stock--Series 2, par value $2.50 per share, of the
Corporation is hereby automatically reclassified and changed into FON
Common Stock--Series 2, par value $2.00 per share, of the Corporation,
(iii) the Corporation's existing Class A Common Stock, par value $2.50
per share, designated as "Old Class A Common Stock" herein, is hereby
automatically reclassified and exchanged into an equal number of shares of
Class A Common Stock, par value $2.50 per share, of the Corporation,
(iv) the Corporation's existing Class A Common Stock--Series DT, par
value $2.50 per share, designated as "Class A Common Stock--Series DT"
herein, is hereby automatically reclassified and exchanged into an equal
number of shares of Class A Common Stock--Series DT, par value $2.50, of
the Corporation,
(v) (A) PCS Common Stock--Series 1, par value $1.00 per share, (B) PCS
Common Stock--Series 2, par value $1.00 per share, and (C) PCS Common
Stock--Series 3, par value $1.00 per share, would each remain unchanged by
these Amended and Restated Articles of Incorporation, and
(vi) if there are fractional shares of Series 1 PCS Stock to be issued in
the Recapitalization, the Corporation shall pay cash in respect of such
fractional shares in accordance with Section 2(ii) above.
7. That the text of the Articles of Incorporation of the Corporation, as
previously restated and amended, is hereby amended and restated to read in its
entirety as follows:
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.
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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
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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
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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.
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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
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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.
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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>
<CAPTION>
DESIGNATION CLASS SERIES NO. OF SHARES PAR VALUE
----------- -------------------- -------------------- ------------- ---------------
<S> <C> <C> <C> <C>
The "Series 1 FON
Stock"................. FON Common Stock Series 1 2,500,000,000 $2.00 per share
The "Series 2 FON
Stock"................. FON Common Stock Series 2 500,000,000 $2.00 per share
The "Series 3 FON
Stock"................. FON Common Stock Series 3 1,200,000,000 $2.00 per share
The "Old Class A Common
Stock"................. Class A Common Stock 100,000,000 $2.50 per share
The "Class A Common
Stock-- Series DT"..... Class A Common Stock Series DT 100,000,000 $2.50 per share
The "Series 1 PCS
Stock"................. PCS Common Stock Series 1 1,250,000,000 $1.00 per share
The "Series 2 PCS
Stock"................. PCS Common Stock Series 2 500,000,000 $1.00 per share
The "Series 3 PCS
Stock"................. PCS Common Stock Series 3 600,000,000 $1.00 per share
The "Preferred Stock"... Preferred Stock See Section 13 below 20,000,000 No par 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,
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<PAGE>
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
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<PAGE>
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.
10
<PAGE>
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;
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<PAGE>
(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;
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<PAGE>
(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
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<PAGE>
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
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(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;
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(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 Stock--Series DT
outstanding; and
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(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
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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.
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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.
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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
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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
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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,
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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
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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
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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
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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
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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
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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
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(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
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(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
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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
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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
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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
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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
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(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;
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(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
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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
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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
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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.
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(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
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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
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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.
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(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
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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
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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
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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 Articlesof 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 Articlesof 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.
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(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
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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;
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(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
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(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.
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(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))
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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 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 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.
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(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.
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(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
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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
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(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).
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(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
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(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
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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.
(S) 17-6003 and (S) 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
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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.
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"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;
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(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.
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"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.
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"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
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(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.
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"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
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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
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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
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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
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(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.
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"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.
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"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
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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
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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
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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:
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(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.
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"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;
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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.
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"PCS Ratio" means the ratio of [THE PCS IPO PRICE TO THE CLOSING PRICE ON
THE PCS IPO PRICING DATE OF ONE SHARE OF SERIES 1 FON STOCK] [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.
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"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 , 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
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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 , 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;
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(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
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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 , 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 , 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
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(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.
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"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.
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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
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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. [PREFERRED STOCK UNDERLYING THE RIGHTS GRANTED TO THE FON
STOCK UNDER THE RIGHTS PLAN WILL BE ATTRIBUTED TO THE SPRINT FON GROUP WHILE
PREFERRED STOCK UNDERLYING THE RIGHTS GRANTED TO THE PCS STOCK UNDER THE
RIGHTS PLAN WILL BE ATTRIBUTED TO THE PCS 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 $.37 1/2 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
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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.
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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 $.37 1/2 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,
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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
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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.
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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.
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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
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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.
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
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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
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(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
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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.
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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.
IN WITNESS WHEREOF, we have hereunto set our hands and affixed the seal of
said Corporation this day of , 1998.
-------------------------------------
Don A. Jensen, Vice President
-------------------------------------
Michael T. Hyde, Assistant Secretary
STATE OF KANSAS
ss.
COUNTY OF JOHNSON H
Be it remembered that before me, a Notary Public in and for the aforesaid
county and state, personally appeared: Don A. Jensen, Vice President, and
Michael T. Hyde, Assistant Secretary, of Sprint Corporation, a corporation,
who are known to me to be the same persons who executed the foregoing Amended
and Restated Articles of Incorporation, and duly acknowledged the execution of
the same this day of , 1998.
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Notary Public
My appointment expires:
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98
