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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
SPRINT CORPORATION
(Name of Issuer)
PCS COMMON STOCK SERIES 1
$1.00 PAR VALUE
(Title of Class of Securities)
-----------------------
852061506
(Cusip Number)
Comcast Corporation
(Name of Person Filing Statement)
Arthur R. Block
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
Tel No.: (215) 665-1700
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
November 23, 1998
(Date of Event which Requires Filing of this Statement)
-----------------------
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this statement because of Rule 13d-1 (e), 13d-1 (f) or 13d-1 (g), check the
following: [ ]
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<PAGE>
CUSIP No. 85206150 13D Page 2 of 10 Pages
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
COMCAST CORPORATION
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
3. SEC USE ONLY
4. SOURCE OF FUNDS
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
6. CITIZENSHIP OR PLACE OF ORGANIZATION
PENNSYLVANIA
NUMBER OF 7. SOLE VOTING POWER 53,479,187
(See Item Nos. 1 and 6)
SHARES
BENEFICIALLY 8. SHARED VOTING POWER 0 shares
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER 53,479,187 PCS Common
REPORTING Stock-Series-2 $1.00 par
PERSON WITH value per share (See
Item Nos. 1, 4 and 6)
10. SHARED DISPOSITIVE POWER 0 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
(a) Amount beneficially owned: 53,479,187*
53,479,187 shares consists of shares (i) 47,248,435 of Series 2 PCS
Stock, (ii) presently exercisable Warrants to purchase an additional
3,015,858 shares of Series 2 PCS Stock, and (iii) 61,726 shares of
Series 7 Preferred Stock (which for purposes of this Report are assumed
to be convertible into an aggregate of 3,214,895 shares of Series 2 PCS
Stock). Each share of Series 2 PCS Stock automatically converts into
one share of Series 1 PCS Stock under certain circumstances.
* Assumes the conversion of all shares of Series 2 PCS Stock
beneficially owned by the Reporting Person (including all shares of
Series 2 PCS Stock issuable upon exercise of all Warrants and upon
conversion of all Series 7 Preferred Stock) into the corresponding
number of shares of Series 1 PCS Stock. See Item No. 1.
Because the Reporting Person does not have the right to acquire any
shares of Series 1 PCS Stock, underlying the shares of Series 2 PCS
Stock, shares of the Series 7 Preferred Stock or the Warrants, within
sixty days of the date of the event requiring this Report, the
Reporting Person disclaims beneficialownership of all shares of Series
1 PCS Stock underlying the Series 2 PCS Stock, the Series 7 Preferred
Stock and the Warrants. The filing of this Report by the Reporting
Person shall not be construed as an admission that the Reporting Person
is the beneficial owner of any shares of Series 1 PCS Stock.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.7%
Because each share of Series 2 PCS Stock generally is entitled to
one-tenth of the applicable vote per share of Series 1 PCS Stock, the
shares of Series 2 PCS Stock beneficially owned by the Reporting Person
represent less than 1% of the voting power of Sprint Corporation.
The shares of Series 2 PCS Stock beneficially owned by the Reporting
Person represent approximately 11.3% of the outstanding Series 1 PCS
Stock of the Issuer (which class includes the Series 1 PCS Stock, the
Series 2 PCS Stock and the Series 3 PCS Stock), assuming the exercise
of all Warrants to purchase shares of Series 2 PCS Stock initially
issued to the Reporting Person, the conversion of all shares of Series
7 Preferred Stock initially issued to the Reporting Person into shares
of Series 7 Preferred Stock, the issuance of all shares of Series 3 PCS
Stock issuable in respect of the Sprint's outstanding Class A Common
Stock and the issuance of all shares of Series 1 PCS Stock represented
by the Sprint FON Group's "inter-group interest" in Sprint's PCS Group
(including that portion of such inter-group interest corresponding to
the Series 7 Preferred Stock and the Warrants to purchase Series 2 PCS
Stock held by the Reporting Person and certain other holders).
14. TYPE OF REPORTING PERSON
CO
<PAGE>
Item 1. Security and Issuer.
The class of equity securities to which this statement relates is the PCS
Common Stock Series 1, $1.00 par value per share (the "Shares"), of Sprint
Corporation, a Kansas corporation (the "Issuer"). The principal executive
offices of the Issuer are located at 2330 Shawnee Mission Parkway, Westwood,
Kansas 66205.
Pursuant to Rule 13d-3 promulgated under the Exchange Act, this Report
relates to the shares of Series 1 PCS Stock issuable upon conversion of shares
of the PCS common Stock - Series 2, par value $1.00 per share ("Series 2 PCS
Stock", and collectively with the Series 1 PCS Stock and the PCS Common Stock -
Series 3, par value $1.00 per share (the "Series 3 PCS Stock"), the "PCS
Stock"), of the Issuer, which are (i) held by the Reporting Person, (ii)
issuable upon exercise of certain warrants to purchase shares of Series 2 PCS
Stock (the "Warrants'), of the Issuer, held by the Reporting Person, and (iii)
issuable upon conversion of certain shares Preferred Stock-Seventh Series,
Convertible, $1,000 liquidation preference (the "Series 7 Preferred Stock"), of
the Issuer, held by the Reporting Person. The shares of Series 2 PCS Stock,
Warrants and Series 7 Preferred Stock beneficially owned by the Reporting Person
were issued in a series of transactions which occurred on November 23, 1998 in
which the Issuer acquired through several mergers all of the outstanding
interests in certain joint ventures held by certain affiliates of the Reporting
Person, Telecommunications, Inc. ("TCI") and Cox Communications, Inc. ("Cox"
and, together with TCI and the Reporting Person, the "Cable Parents") in
exchange for shares of Series 2 PCS Stock, Warrants and shares of Series 7
Preferred Stock.
Certain terms of the Series 2 PCS Stock, the Warrants and the Series 7
Preferred Stock are described below:
(a) Each share of Series 2 PCS Stock automatically converts into
one share of Series 1 PCS Stock, under certain circumstances. In
particular, (i) all outstanding shares of Series 2 PCS Stock will
convert into the corresponding number of shares of Series 1 PCS Stock
at such time as the outstanding shares of Series 2 PCS Stock would
represent, assuming the conversion of all of such shares, less than
one percent of the voting power of the outstanding equity securities
of the Issuer and (ii) each share of Series 2 PCS Stock will
automatically convert into one share of Series 1 PCS Stock upon any
transfer to a transferee other than one of the Cable Parents and
certain of their affiliates and associates.
(b) Each Warrant is exercisable for one share of Series 2 PCS
Stock during the five year period ending on November 23, 2003. The
exercise price per share of Series 2 PCS Stock will be equal to the
average of the daily closing prices of the Series 1 PCS Stock on the
New York Stock Exchange for the 30 consecutive trading days ending on
the 45th trading day following the commencement of regular way trading
of such stock, subject to certain adjustments. Regular way
trading in the Series 1 PCS Stock commenced on November 24, 1998,
following the completion of the transactions contemplated by the
Restructuring Agreement on November 23, 1998.
(c) Each share of Series 7 Preferred Stock is convertible into a
number of shares of Series 2 PCS Stock equal to the quotient of (x)
$1,000 divided by (y) the product of (i) 1.28 and (ii) the average of
the daily closing prices of the Series 1 PCS Stock on the New York
Stock Exchange for the 30 consecutive trading days ending on the 45th
trading day following the commencement of regular way trading of such
stock, subject to certain adjustments. The Issuer may redeem any
outstanding shares of Series 7 Preferred Stock after November 24, 2001
or November 23, 2000 under certain circumstances, and must redeem all
outstanding shares of Series 7 Preferred Stock on November 24, 2008.
(d) The Warrants and the Series 7 Preferred Stock will become
exercisable for or convertible into shares of Series 1 PCS Stock in
lieu of the corresponding number of shares of Series 2 PCS Stock under
circumstances similar to those under which the applicable shares of
Series 2 PCS Stock underlying such securities would automatically
convert into shares of Series 1 PCS Stock.
Holders of Series 1 PCS Stock are entitled to a number of votes per
share based on the ratio of the average trading price per share of a share of
Series 1 PCS Stock to the average trading price per share of a share of the
Issuer's FON Common Stock - Series 1, par value $1.00 per share, and holders of
Series 2 PCS Stock are entitled per share to a number of votes equal to one
tenth of the number of votes per share of Series 1 PCS Stock, on all matters
presented to stockholders, except as otherwise provided in the Issuer's Amended
and Restated Articles of Incorporation (the
Page 3 of 10
<PAGE>
"Issuer Charter"). Shares of Series 1 PCS Stock are not convertible into shares
of Series 2 PCS Stock. All other rights and privileges of the Series 1 PCS Stock
and Series 2 PCS Stock are identical.
Item 2. Identity and Background.
The name of the person filing this statement is Comcast Corporation, a
Pennsylvania corporation ("Comcast").
Comcast's principal business is the development, operation and management
of cable and cellular communications systems. The address of Comcast's principal
business and principal office is 1500 Market Street, Philadelphia, PA
19102-2148. The name, business address, present principal occupation or
employment, and citizenship of each director and executive officer of Comcast is
set forth on Schedule A.
During the last five years, neither Comcast, nor any other person
controlling Comcast nor, to the best of its knowledge, any of the persons listed
on Schedule A attached hereto, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
See the information set forth in Item 1 of this Schedule 13D.
Item 4. Purpose of Transaction.
See the information set forth in Item 1 of this Schedule 13D. Comcast has
acquired the Shares for investment. Comcast intends to review from time to time
the Issuer's business affairs and financial position. Based on such evaluation
and review, as well as general economic and industry conditions existing at the
time, Comcast may consider from time to time various alternative courses of
action. Such actions may include the acquisition of additional Shares through
open market purchases, privately negotiated transactions, tender offer, exchange
offer or otherwise. Alternatively, such actions may involve the sale of all or a
portion of the Shares in the open market, in privately negotiated transactions,
through a public offering or otherwise. Except as set forth above, Comcast has
no plan or proposals which relate to or would result in any of the transactions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) Comcast has acquired and, for the purpose of Rule 13d-3 promulgated
under the Exchange Act, beneficially owns 53,479,187 Shares, representing
approximately 23.7% of the outstanding Shares of the class of securities.
Except as set forth in this Item 5(a), neither Comcast, nor any other
person controlling Comcast, nor, to the best of its knowledge, any persons named
in Schedule A hereto owns beneficially any Shares.
(b) Comcast has sole power to dispose of 53,479,187 Shares.
(c) Information concerning acquisitions of Shares since November 23, 1998
is set forth on Schedule B.
The Reporting Person currently owns no shares of Series 1 PCS Stock,
47,248,435 shares of Series 2 PCS Stock, 3,015,858 Warrants and 61,726 shares of
Series 7 Preferred Stock, resulting in an aggregate beneficial ownership of
approximately 53,479,187 shares of Series 2 PCS Stock (assuming valid exercise
of the Warrants and valid conversion of the shares of Series 7 Preferred Stock).
As of the date hereof and assuming the conversion into Series 1 PCS Stock of all
of the shares of Series 2 PCS Stock beneficially owned by the Reporting Person,
the Reporting Person holds
Page 4 of 10
<PAGE>
certain rights to an aggregate of 53,479,187 shares of Series 1 PCS Stock, or
approximately 23.7% of the shares of Series 1 PCS Stock deemed outstanding. The
shares of Series 2 PCS Stock beneficially owned by Comcast constitute 24.2% of
the outstanding shares of Series 2 PCS Stock. The foregoing amounts exclude
shares of Series 1 PCS Stock held by executive officers and directors of
Comcast, if any. Comcast disclaims beneficial ownership of any shares held by
such officers and directors.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
In connection with the issuance of Series 2 PCS Stock to Comcast in the
Restructuring, Sprint and Comcast entered into a Standstill Agreement pursuant
to which Comcast agreed that it will not acquire (other than in connection with
the exercise of its shares purchase rights) any voting securities of Sprint
("Sprint Voting Securities") if, as a result of such acquisition, the votes
represented by the Sprint Voting Securities owned by Comcast and its affiliates
would represent (in the aggregate) more than one and one half percent (1.5%) of
the voting power represented by all of the outstanding Sprint Voting Securities
(assuming that all shares of Series 2 PCS Stock have the same voting rights as
the Series 1 PCS Stock).
The Issuer and the Cable Parents have entered into a registration
rights agreement (the "Registration Rights Agreement") providing the Cable
Parents with certain "demand" and "piggy back" registration rights relating
to the shares of Series 2 PCS Stock. Until the Cable Parents have sold
securities covered by the Registration Rights Agreement with an aggregate
offering price of $2 billion (or 12 months have passed since the
commencement of registration rights, whichever is sooner), the Cable
Parents will have priority in selling their shares of PCS Stock in any
offering for which the underwriters require a reduction in the number of
shares desired to be offered. Such priority will apply regardless of
whether the applicable Cable Parent(s) is (are) exercising "demand" or
"piggy back" registration rights and whether such priority would prevent
the Issuer from selling shares of PCS Stock in order to raise capital to
fund the operations of the PCS Group.
Comcast has entered into an Irrevocable Proxy and Voting Agreement ("Voting
Agreement") governing the voting of any shares of Series 1 PCS Stock acquired by
it or its subsidiaries as a result of the exercise of its rights under the
Restructuring Agreement to maintain its percentage interests in the PCS Group.
The Voting Agreement grants William T. Esrey (and any successor as the Chief
Executive Officer of the Issuer) an irrevocable proxy to vote such shares at any
meeting of the shareholders of the Issuer, with such shares to be voted on any
matter on the same basis as the majority of votes that are cast with respect to
such matter by the holders of the Issuer's other voting securities. The Voting
Agreement of Comcast will terminate upon the earlier to occur of the tenth
anniversary of the Closing or the termination of the Standstill Agreement.
The Cable Parents have entered into a Top Up Right Agreement (the
"Top Up Right Agreement") with France Telecom S.A. ("FT") and Deutsche
Telekom AG ("DT"), dated as of May 26, 1998 which agreement provides FT and
DT, among other things, with certain right in connection with certain
transfers by the Reporting Person of shares of Series 2 PCS Stock that
result in the applicable shares of Series 2 PCS Stock converting into
shares of Series 1 PCS Stock.
The foregoing summary description of the Restructuring Agreement, the
Registration Rights Agreement, the Standstill Agreement, and the Voting
Agreement do not purport to be complete and are qualified in their entirety by
reference to the text of such documents, each of which is filed as an Exhibit to
this Report and is hereby incorporated by reference herein.
Except for the Agreement as described above, to the best knowledge of
Comcast, there are no contracts, arrangements, understandings or relationships
(legal or otherwise) between the persons enumerated in Item 2, and any other
person, with respect to any securities of the Issuer, including, but not limited
to, transfer or voting of any of the
Page 5 of 10
<PAGE>
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit No. Exhibit
10.1 Restructuring and Merger Agreement, dated as of May 26, 1998, by
and among the Issuer, TCI, Comcast, Cox, and certain affiliates
thereof (incorporated by reference to Exhibit No. 2 to the Form
8-K filed by Sprint Corporation on June 2, 1998 (File No.
001-04721)).
10.2 Form of Registration Rights Agreement, by and among the Issuer, a
subsidiary of TCI, Cox and Comcast (incorporated by reference to
Exhibit 10.2 to the Form S-4 filed by Sprint Corporation on
October 1, 1998 (File No. 333-65173)).
10.3 Form of Standstill Agreement, dated as of May 26, 1998 between
the Issuer and a Holder (as defined therein) (incorporated by
reference to Exhibit 10.3 to the Form S-3 filed by Sprint
Corporation on September 25, 1998 (File No. 333-64241)).
10.4 Irrevocable Proxy and Voting Agreement, dated as of November 23,
1998, between the Issuer and Comcast.
10.5 Top Up Right Agreement, dated as of May 26, 1998, among the Cable
Parents, France Telecom S.A. and Deutsche Telekom AG
(incorporated by reference to Exhibit 4 to Amendment No. 2
(filed May 28, 1998) to the Schedule 13D originally filed by
FT and DT on February 12, 1996 (File No. 005-41991)).
Page 6 of 10
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
10.1 Restructuring and Merger Agreement, dated as of May 26, 1998, by
and among the Issuer, TCI, Comcast, Cox, and certain affiliates
thereof (incorporated by reference to Exhibit No. 2 to the Form
8-K filed by Sprint Corporation on June 2, 1998 (File No.
001-04721).
10.2 Form of Registration Rights Agreement, by and among the Issuer, a
subsidiary of TCI, Cox and Comcast (incorporated by reference to
Exhibit 10.2 to the Form S-4 filed by Sprint Corporation on
October 1, 1998 (File No. 333-65173)).
10.3 Form of Standstill Agreement, dated as of May 26, 1998 between
the Issuer and a Holder (as defined therein) (incorporated by
reference to Exhibit 10.3 to the Form S-3 filed by Sprint
Corporation on September 25, 1998 (File No. 333-64241)).
10.4 Irrevocable Proxy and Voting Agreement, dated as of November 23,
1998, between the Issuer and Comcast.
10.5 Top Up Right Agreement, dated as of May 26, 1998, among the Cable
Parents, France Telecom S.A. and Deutsche Telekom AG (incorporated
by reference to Exhibit 4 to Amendment No. 2 (filed May 28, 1998)
to the Schedule 13D originally filed by FT and DT on February 12,
1996 (File No. 005-41991)).
SIGNATURES
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Date: December ___, 1998
COMCAST CORPORATION
By:
------------------------------
Name: Arthur R. Block
Title: Vice President
Page 7 of 10
<PAGE>
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OFCOMCAST
The name, business address, title, present principal occupation or
employment of each of the directors and executive officers of Comcast
Corporation ("Comcast") are set forth below. If no business address is given the
director's or officer's business address is 1500 Market Street, Philadelphia, PA
19102-2148. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to Comcast. Unless otherwise indicated below, all of
the persons listed below are citizens of the United States of America.
<TABLE>
Name Title Business Address Present Principal Occupation
---- ----- ---------------- ----------------------------
<S> <C> <C> <C>
Ralph J. Roberts Chairman of the Board 1500 Market Street Chairman of the Board of Directors
of Directors and Philadelphia, PA 19102 of Comcast
Director
Julian A. Brodsky Vice Chairman of the 1500 Market Street Vice President of the Board of
Board of Directors and Philadelphia, PA 19102 Directors of Comcast
Director
Brian L. Roberts President; Director 1500 Market Street President of Comcast
Philadelphia, PA 19102
Daniel Aaron Director 1500 Market Street Director of Comcast
Philadelphia, PA 19102
Gustave G. Amsterdam Director 1845 Walnut Street Attorney
Suite 2390 1845 Walnut Street
Philadelphia, PA 19103 Suite 2390
Philadelphia, PA 19103
Sheldon M. Bonovitz Director 4200 One Liberty Place Partner in the law firm of Duane,
Philadelphia, PA 19103 Morris and Heckscher
4200 Liberty Place
Philadelphia, PA 19103
Joseph L. Castle Director One Valley Square President of Castle Energy Corp.
Suite 101 One Valley Square
512 Township Line Road Suite 101
Blue Bell, PA 19422 512 Township Line Road
Blue Bell, PA 19422
Bernard C. Watson Director 1630 Locust Street President of William Penn
Philadelphia, PA 19103 Foundation
1630 Locust Street
Philadelphia, PA 19103
Irving A. Wechsler Director One Oliver Plaza Partner in Wechsler, Myers &
Pittsburgh, PA 15222 Walsh, Certified Public Accountants
One Oliver Plaza
Pittsburgh, PA 15222
Anne Wexler Director 1317 F. Street, N.W. Chairman of The Wexler Group
Suite 600 1317 F. Street, N.W.
Washington, DC 20004 Suite 600
Washington, DC 20004
</TABLE>
Page 8 of 10
<PAGE>
<TABLE>
Name Title Business Address Present Principal Occupation
---- ----- ---------------- ----------------------------
<S> <C> <C> <C>
John R. Alchin* Senior Vice President 1500 Market Street Senior Vice President and Treasurer
and Treasurer Philadelphia, PA 19102 of Comcast
Thomas G. Baxter Senior Vice President 1500 Market Street President of Comcast Cable
Philadelphia, PA 19102 Communications, Inc.
Lawrence S. Smith Senior Vice President - 1500 Market Street Senior Vice President - Accounting
Accounting and Philadelphia, PA 19102 and Administration of Comcast
Administration
Stanley L. Wang Senior Vice President, 1500 Market Street Senior Vice President, General
General Counsel and Philadelphia, PA 19102 Counsel and Secretary of Comcast
Secretary
C. Stephen Backstrom Vice President - 1500 Market Street Vice President - Taxation of
Taxation Philadelphia, PA 19102 Comcast
Mark A. Coblitz Vice President - 1500 Market Street Vice President - Strategic Planning
Strategic Planning Philadelphia, PA 19102 of Comcast
Paul Gillert Vice President - 1500 Market Street Vice President - Human Resources
Strategic Planning Philadelphia, PA 19102 of Comcast
Donald A. Harris Vice President - 1500 Market Street President of Comcast Cellular
Human Resources Philadelphia, PA 19102 Communications, Inc.
F. Jerome Purcell Vice President 1500 Market Street President of Comcast Sound
Philadelphia, PA 19102 Communications, Inc.
</TABLE>
* Citizen of Australia
Page 9 of 10
<PAGE>
SCHEDULE B
TRANSACTIONS IN SHARES OF THE ISSUER SINCE NOVEMBER 23, 1998 BY COMCAST
All of the purchases of Shares set forth below were made by Comcast.
<TABLE>
Number of Shares Aggregate
Date of Transaction Purchased Nature of Purchase Price Per Share Purchase Price
- ------------------- --------- ------------------ --------------- --------------
<S> <C> <C> <C> <C>
None
Total
</TABLE>
Page 10 of 10
IRREVOCABLE PROXY
AND
VOTING AGREEMENT
THIS IRREVOCABLE PROXY AND VOTING AGREEMENT (this "Agreement"),
dated as of November 23, 1998, is entered into between SPRINT CORPORATION,
a Kansas corporation ("Sprint"), and COMCAST CORPORATION, a Pennsylvania
corporation (the "Holder").
WHEREAS, Sprint, Tele-Communications, Inc., a Delaware corporation
("TCI"), the Holder, and Cox Communications, Inc., a Delaware corporation
("Cox", and together with TCI and the Holder, the "Cable Holders") and certain
of their respective Subsidiaries (as defined herein) have entered into the
Restructuring and Merger Agreement, dated May 26, 1998 (the "Restructuring
Agreement"), pursuant to which such Cable Holders (directly or indirectly
through Subsidiaries) will acquire shares of Series 2 PCS Stock (as defined
herein) on the terms set forth in the Restructuring Agreement;
WHEREAS, contemporaneously with the execution of this Agreement,
Sprint and the Holder have entered into a Standstill Agreement, dated May
26, 1998 (the "Standstill Agreement") imposing certain restrictions on the
ability of the Holder and its Affiliates to acquire shares of Series 1 PCS
Stock (as defined herein) and other shares of the capital stock of Sprint;
WHEREAS, Section 6.8 of the Restructuring Agreement permits the Holder
and its Affiliates to acquire shares of Series 1 PCS Stock under certain
circumstances, which acquisitions are permitted under the Standstill Agreement;
WHEREAS, each share of Series 2 PCS Stock has one-tenth of the
vote of each share of Series 1 PCS Stock in all matters presented for a
vote of the holders of the common stock of Sprint;
WHEREAS, Sprint is willing to permit the Holder and its Affiliates
to acquire shares of the Series 1 PCS Stock in accordance with the
Restructuring Agreement; based on the arrangements set forth herein
(including the granting by the Holder of the irrevocable proxy contained
herein);
NOW THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Holder and Sprint (each a "Party"),
intending to be legally bound, hereby agree as follows:
Section 1. Irrevocable Proxy.
(a) Subject to paragraphs (c), (d) and (e) below, the
Holder hereby grants to William T. Esrey (the "Grantee") an irrevocable
proxy, with full power of substitution, to exercise voting authority and
authority to act by written consent over all shares of Series 1 PCS Stock
Beneficially Owned by the Holder and its Affiliates, at the time of
execution of this Agreement or at any time in the future (the "Proxy
Shares"), on all matters submitted to a vote of all or any class or classes
of the holders of the Sprint Voting Securities, which proxy is irrevocable
and coupled with an interest for purposes of Section 17-6502 of the Kansas
General Corporation Code.
(b) Prior to the acquisition by any Affiliate of Holder
that has not previously executed and delivered to Sprint an Irrevocable
Proxy under this paragraph of any shares of Series 1 PCS Stock, the Holder
will cause such Affiliate to execute and deliver to Sprint the form of
Irrevocable Proxy attached hereto as Exhibit A, which proxies shall
(together with the proxy contained in Section 1 (a)) be deemed to
constitute the "Proxy" for the purposes of this Proxy Agreement.
(c) Pursuant to the Proxy, the Grantee is authorized and
directed to vote the Proxy Shares for or against any matter presented for a
vote of the Sprint Voting Securities in the same manner as the majority of
votes that are cast with respect to such matter by the holders of Sprint
Voting Securities (other than the Proxy Shares).
(d) Notwithstanding the foregoing, the Proxy shall not be
applicable with respect to any of the Proxy Shares in connection with any
matter on which the holders of Series 1 PCS Stock vote pursuant to Article
Sixth, Sections 3.2(d) and 3.2(f) of the Initial Charter Amendment (as
defined in the Restructuring Agreement) or any successor provisions with
the same effect, and the Holder shall have the power to vote the Proxy
Shares in its discretion with respect to any such matter.
(e) The Grantee's appointment hereunder shall terminate
at such time as the Grantee ceases to be the Chief Executive Officer of
Sprint, at which time the Proxy shall automatically be granted, without any
further act by the Holder or its Affiliates, to the Grantee's successor as
Chief Executive Officer of Sprint and thereafter to each subsequent
successor as the Chief Executive Officer of Sprint (each of which persons
shall be deemed the Grantee hereunder). At the request of Sprint from
time-to-time, the Holder shall, and shall cause each of its Affiliates
holding any Proxy Shares to, execute an irrevocable proxy in the form of
this Agreement or Exhibit A hereto confirming the appointment of each
successor Chief Executive Officer of Sprint as the Grantee for all purposes
under this Agreement.
(f) Within 10 days following the record date for each
meeting of the shareholders of Sprint, the Holder shall give notice to
Sprint of (i) the names of the Affiliates of the Holder that Beneficially
Owned shares of Series 1 PCS Stock as of the record date and (ii) the
number of shares of Series 1 PCS Stock Beneficially Owned by the Holder and
each of its Affiliates as of the record date.
Section 2. Voting Agreement. If the Proxy is determined to be
invalid or unenforceable in any respect, or the holder of the Proxy is
unable or unwilling for any reason to vote the Proxy Shares at any meeting
of the stockholders of Sprint as contemplated by Section 1 (c), then,
except in the case of a matter described in Section 1 (d), the Holder
shall, and shall cause each of its Affiliates to, attend each meeting of
the stockholders of Sprint for the purposes of satisfying quorum
requirements and shall vote the Proxy Shares for or against any matter
presented for a vote of the Sprint Voting Securities in the same manner as
the majority of votes that are cast with respect to such matter by the
holders of Sprint Voting Securities (other than the Proxy Shares).
Section 3. Termination. The Proxy and this Agreement shall
terminate on the earlier to occur of (a) the consent in writing of Sprint
and the Holder, (b) the termination of the Standstill Agreement and (c) the
tenth anniversary of this Agreement.
Section 4. Certain Definitions. As used in this Agreement, the
following terms shall have the meanings specified below. Any capitalized
terms not otherwise defined herein shall have the meaning attributed
thereto in the Restructuring Agreement.
"Affiliate" means with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by, or is under common Control with, such Person.
"Agreement" has the meaning set forth in the Preamble.
"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 has, directly or
indirectly, the sole or shared right to acquire (whether such right is
exercisable immediately or only after the passage of time) such securities
pursuant to any agreement, arrangement or understanding (whether or not in
writing), including pursuant to the Restructuring Agreement, or upon the
exercise of conversion rights, exchange rights, warrants or options, or
otherwise;
(b) has, or any of whose Affiliates has, directly or
indirectly, the sole or shared right to vote or dispose of (whether such right
is exercisable immediately or only after the passage of time) or "beneficial
ownership" of (as determined pursuant to Rule 13d-3 under the Exchange Act as in
effect on the date hereof but including all such securities which a Person has
the right to acquire beneficial ownership of, whether or not such right is
exercisable within the 60-day period specified therein) such securities,
including pursuant to any agreement, arrangement or understanding (whether or
not in writing); or
(c) has, or any of whose Affiliates has, any agreement,
arrangement or understanding (whether or not in writing) for the purpose of
acquiring, holding, voting or disposing of any securities which are Beneficially
Owned, directly or indirectly, by any other Person (or any Affiliate thereof),
provided that the Restructuring Agreement shall not be deemed an agreement,
arrangement or understanding contemplated by this paragraph (c).
"Cable Holders" has the meaning set forth in the Recitals.
"Class A Stock" means the Class A Common Stock, par value $2.50
per share, of Sprint.
"Common Stock" means the Common Stock, par value $2.50 per share,
of Sprint.
"Control" (including, with its correlative meanings, "Controlled
by" and "under common Control with") means, with respect to a Person or
Group:
(a) ownership by such Person or Group of Votes entitling it to
exercise in the aggregate more than 50 percent of the Voting Power of the entity
in question; or
(b) possession by such Person or Group of the power, directly
or indirectly, (i) to elect a majority of the board of directors (or equivalent
governing body) of the entity in question; (ii) to direct or cause the direction
of the management and policies of or with respect to the entity in question,
whether through ownership of securities, by contract or otherwise; or (iii) with
respect to a particular action or agreement, to direct or cause the direction of
decisions, or veto or otherwise prevent decisions, of or with respect to the
entity in question relating to such action or agreement.
"PCS Preferred Stock" means the Preferred Stock -- Seventh
Series, Convertible, no par value, of Sprint.
"PCS Stock" means the Series 1 PCS Stock, the Series 2 PCS Stock
and the Series 3 PCS Stock.
"Person" means an individual, a partnership, an association, a joint
venture, a corporation, a business, a trust, an unincorporated organization, a
governmental authority or any other entity organized under applicable law.
"Restructuring Agreement" has the meaning set forth in the Recitals.
"Series 1 PCS Stock" means the PCS Common Stock -- Series 1, par value
S1.00 per share, of Sprint, which will be created on the Closing Date by the
filing of the Initial Charter Amendment, as defined in the Restructuring
Agreement.
"Series 2 PCS Stock" means the PCS Common Stock -- Series 2, par value
$1.00 per share, of Sprint, which will be created on the Closing Date by the
filing of the Initial Charter Amendment.
"Series 3 PCS Stock" means the PCS Common Stock -- Series 3, par value
$1.00 per share, of Sprint, which will be created on the Closing Date by the
filing of the Initial Charter Amendment.
"FON Stock" means the Sprint FON Group Common Stock that will be
created upon completion of the Recapitalization, as defined in the
Restructuring Agreement.
"Sprint Voting Securities" means the Common Stock, the Class A
Stock, the FON Stock, the PCS Stock, the PCS Preferred Stock and any other
securities of Sprint having the right to Vote.
"Subsidiary" means, with respect to any Person (the "Parent"),
any other Person in which the Parent, one or more Subsidiaries of the
Parent, or the Parent and one or more of its Subsidiaries (a) have the
ability, through ownership of securities individually or as a group,
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or individuals performing similar functions) of such other
Person, and (b) own more than 50% of the equity interests.
"Transfer" means any act pursuant to which, directly or
indirectly, the ownership of assets or securities in question is sold,
transferred, conveyed, delivered or otherwise disposed of.
"Vote" means, as to any entity, the ability to cast a vote at a
stockholders' or comparable meeting of such entity with respect to the
election of directors or other members of such entity's governing body;
provided that with respect to Sprint only, "Vote" means the ability to
exercise general voting power (as opposed to the exercise of special voting
or disapproval rights) with respect to matters other than the election of
directors at a meeting of the stockholders of Sprint.
"Voting Power" means, as to any entity as of any date, the
aggregate number of Votes outstanding as of such date in respect of such
entity; provided that, with respect to PCS Stock, the Vote per share used
to calculate such aggregate number of Votes shall be the Vote per share
most recently established by the Board of Directors of Sprint, whether for
the most recent vote of stockholders or for a vote of stockholders to be
conducted in the future.
Section 5. Interpretation and Construction of this Agreement. The
definitions in Section 4 shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." All references herein to Articles, Sections and
Exhibits shall be deemed to be references to Articles and Sections of, and
Exhibits to, this Agreement unless the context shall otherwise require.
The headings of the Articles and Sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement. Unless the context shall
otherwise require or provide, any reference to any agreement or other
instrument or statute or regulation is to such agreement, instrument,
statute or regulation as amended and supplemented from time to time (and,
in the case of a statute or regulation, to any successor provision).
Section 6. Notices. Except as expressly provided herein, all notices,
consents, waivers and other communications required or permitted to be given by
any provision of this Agreement shall be in writing and mailed (certified or
registered mail, postage prepaid, return receipt requested) or sent by hand or
overnight courier, or by facsimile transmission (with acknowledgment received
and confirmation sent as provided below), charges prepaid and addressed to the
intended recipient as follows, or to such other address or number as such Person
may from time to time specify by like notice to the parties:
Holder: Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
Telecopy: (215) 981-7794
Attention: General Counsel
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopy: (212) 450-4800
Attention: Dennis S. Hersch
Sprint:
Sprint Corporation
2330 Shawnee Mission Parkway
East Wing
Westwood, Kansas 66205
Attention: General Counsel
Tel: (913) 624-8440
Fax: (913) 624-8426
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
Attention: Bruce N. Hawthorne, Esq.
Tel: (404) 572-4903
Fax: (404) 572-5146
Any party may from time to time specify a different address for notices by like
notice to the other parties. All notices and other communications given in
accordance with the provisions of this Agreement shall be deemed to have been
given and received (i) four (4) Business Days after the same are sent by
certified or registered mail, postage prepaid, return receipt requested, (ii)
when delivered by hand or transmitted by facsimile (with acknowledgment received
and, in the case of a facsimile only, a copy of such notice is sent no later
than the next Business Day by a reliable overnight courier service, with
acknowledgment of receipt) or (iii) one (1) Business Day after the same are sent
by a reliable overnight courier service, with acknowledgment of receipt.
Section 7. Assignment. No Party will assign this Agreement or any
rights, interests or obligations hereunder, or delegate performance of any of
its obligations hereunder, without the prior written consent of each other
Party.
Section 8. Entire Agreement. This Agreement (together with the
Standstill Agreement and the Restructuring Agreement) embodies the entire
agreement and understanding of the Parties with respect to the subject matter
contained herein, provided that this provision shall not abrogate any other
written agreement between the Parties executed simultaneously with this
Agreement.
Section 9. Waiver, Amendment. etc. This Agreement may not be amended or
supplemented, and no waivers of or consents to departures from the provisions
hereof shall be effective, unless set forth in a writing signed by, and
delivered to, all the Parties. No failure or delay of any Party in exercising
any power or right under this Agreement will operate as a waiver thereof, nor
will any single or partial exercise of any right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.
Section 10. Binding Agreement; No Third Party Beneficiaries. This
Agreement will be binding upon and inure to the benefit of the Parties and their
successors and permitted assigns. Nothing expressed or implied herein is
intended or will be construed to confer upon or to give to any third party
any rights or remedies by virtue hereof.
Section 11. Governing Law; Equitable Relief.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF KANSAS (REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAW).
(B) EACH PARTY AGREES THAT MONEY DAMAGES WOULD NOT BE A
SUFFICIENT REMEDY FOR THE OTHER PARTIES FOR ANY BREACH OF THIS AGREEMENT BY IT,
AND THAT IN ADDITION TO ALL OTHER REMEDIES THE OTHER PARTIES MAY HAVE, THEY
SHALL BE ENTITLED TO SPECIFIC PERFORMANCE AND TO INJUNCTIVE OR OTHER EQUITABLE
RELIEF AS A REMEDY FOR ANY SUCH BREACH. EACH PARTY AGREES NOT TO OPPOSE THE
GRANTING OF SUCH RELIEF IN THE EVENT A COURT DETERMINES THAT SUCH BREACH HAS
OCCURRED, AND AGREES TO WAIVE ANY REQUIREMENT FOR THE SECURING OR POSTING OF ANY
BOND IN CONNECTION WITH SUCH REMEDY.
Section 12. Severability. The invalidity or unenforceability of any
provision hereof in any jurisdiction will not affect the validity or
enforceability of the remainder hereof in that jurisdiction or the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction. To the extent permitted by applicable law, each Party waives any
provision of applicable law that renders any provision hereof prohibited or
unenforceable in any respect. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the Parties to the extent possible.
Section 13. Counterparts. This Agreement may be executed in one or
more counterparts each of which when so executed and delivered will be deemed an
original but all of which will constitute one and the same Agreement.
Section 14. Remedies. In addition to any other remedies which may be
available to Sprint (including any remedies which Sprint may have at law or in
equity), if the Holder or any of its Affiliates breaches any material provision
of this Agreement or the Proxy, neither the Holder nor such Affiliates shall be
entitled to vote any of its shares of capital stock of Sprint (or any shares
into which such shares of capital stock are converted) with respect to any
matter or proposal arising from, relating to or involving such breach, and no
such purported vote by the Holder or any of its Affiliates on such matter shall
be effective or shall be counted.
IN WITNESS WHEREOF, Sprint and the Holder have caused their respective
duly authorized officers to execute this Irrevocable Proxy and Voting Agreement
as of the day and year first above written.
COMCAST CORPORATION
By: /s/ Arthur R. Block
------------------------------------
Name: Arthur R. Block
Title: Vice President
SPRINT CORPORATION
By: /s/ Don A. Jensen
------------------------------------
Name:
Title:
IN WITNESS WHEREOF, Sprint and the Holder have caused their respective
duly authorized officers to execute this Irrevocable Proxy and Voting Agreement
as of the day and year first above written.
COMCAST CORPORATION
By:
------------------------------------
Name:
Title:
SPRINT CORPORATION
By:
------------------------------------
Name: Don A. Jensen
Title: Vice President and Secretary
EXHIBIT A
IRREVOCABLE PROXY
_______________, a __________________ [corporation/
partnership/limited liability company] hereby grants to __________________
[insert name of chief executive officer of Sprint] an irrevocable proxy,
with full power of substitution, to exercise voting authority and authority
to act by written consent over all shares of the Series 1 PCS Group Common
Stock, par value $1.00, of Sprint Corporation ("Sprint") Beneficially
Owned by the Holder, at the time of execution and delivery of this proxy or
at any time in the future (the "Proxy Shares"), on all matters submitted to
a vote of all or any class or classes of the holders of Sprint Voting
Securities. This proxy is granted pursuant to the terms of the Irrevocable
Proxy and Voting Agreement (the "Voting Agreement"), dated as of
_____________ , 1998, between Sprint and _____________, a _____________
corporation, and this proxy is irrevocable and coupled with an interest for
purposes of Section 17-6502 of the Kansas General Corporation Code. This
proxy is given under and subject to the terms and limitations of the Voting
Agreement (including, without limitation, Sections I (c), I (d) and I (e)
thereof) and shall terminate simultaneously with the termination of the
Voting Agreement pursuant to Section 3 thereof. Capitalized terms utilized
but not defined in this proxy shall have the meaning ascribed thereto in
the Voting Agreement.
IN WITNESS WHEREOF, the undersigned has caused its duly authorized
officer to execute and deliver this Irrevocable Proxy as of the _____day of
_________, ___.
[HOLDER]
By:
------------------------------------
Name:
Title:
