Sprint - Nextel 2012 Annual Report Download - page 198

Table of Contents
CLEARWIRE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
fiduciary duties in connection with the Proposed Merger, and that the Company aided and abetted the alleged breaches of fiduciary duty by the
directors of the Company. The Kuhnle Action also alleges that the Merger Consideration undervalues the Company, that the Proposed Merger was
negotiated pursuant to an unfair process, that the deal protection devices favor Sprint to the detriment of the public stockholders, and that the
directors of the Company failed to make necessary disclosures in their public filings. The Kuhnle Action seeks a declaratory judgment that the
Proposed Merger was entered into in breach of defendants' fiduciary duties, a preliminary injunction preventing the Proposed Merger and, should the
Proposed Merger be consummated, rescission of the Proposed Merger, and to recover unspecified rescissory and compensatory damages. On January
18, 2013, we and the other defendants collectively filed a motion to dismiss or stay the Kuhnle Action in favor of the prior
- filed Delaware Actions. On
January 18, 2013, we and the other defendants opposed plaintiff's motion to expedite discovery. On February 11, 2013, the court granted the motion to
stay. On January 22, 2013, the parties stipulated to consolidate the three King County lawsuits
-- the Kuhnle Action, along with both the Millen Action
and the Rowe Action (each discussed further below) -- into one matter: In Re Clearwire Corporation Shareholder Litigation. This litigation is in the
early stages, its outcome is unknown and an estimate of any potential losses cannot be made at this time.
On December 20, 2012, stockholder Doug Millen filed a putative class action lawsuit in the Superior Court of Washington, King County against
the Company and its directors, purportedly brought on behalf of the public stockholders of the Company, which action we refer to as the Millen
Action. The lawsuit alleges that the directors of the Company breached their fiduciary duties owed to the Company's public stockholders in
connection with the Proposed Merger, and that the Company aided and abetted the alleged breaches of fiduciary duty by the directors of the
Company. The lawsuit also alleges that the Merger Consideration undervalues the Company, that the Proposed Merger was negotiated pursuant to an
unfair process, that the deal protection devices favor Sprint to the detriment of the public stockholders, and that the directors of the Company failed to
make necessary disclosures in connection with the announcement of the transaction. The lawsuit seeks a declaratory judgment that the Proposed
Merger was entered into in breach of defendants' fiduciary duties, an injunction preventing the Proposed Merger, and rescission of the Proposed
Merger to the extent it has already been consummated. (See the related discussion above under the Kuhnle Action regarding the proposed
consolidation of the Millen Action.) This litigation is in the early stages, its outcome is unknown and an estimate of any potential losses cannot be
made at this time.
On December 31, 2012, stockholder Clinton Rowe filed a putative class action lawsuit in the Superior Court of Washington, King County against
the Company, its directors, Sprint and Merger Sub, purportedly brought on behalf of the public stockholders of the Company, which action we refer to
as the Rowe Action. The lawsuit alleges that Sprint and the directors of the Company breached their fiduciary duties in connection with the Proposed
Merger, and that the Company, Sprint and Merger Sub aided and abetted the alleged breaches of fiduciary duty by the directors of the Company. The
lawsuit also alleges that the Merger Consideration undervalues the Company, that the Proposed Merger was negotiated pursuant to an unfair process,
and that the directors of the Company did not protect the Company against numerous conflicts of interest. The lawsuit seeks a declaratory judgment
that the Proposed Merger was entered into in breach of defendants' fiduciary duties, an injunction preventing the Proposed Merger, rescission of the
transaction to the extent it has already been implemented, and the imposition of a constructive trust in favor of the plaintiff class upon any benefits
improperly received by defendants. (See the related discussion above under the Kuhnle Action regarding the proposed consolidation of the Rowe
Action.) This litigation is in the early stages, its outcome is unknown and an estimate of any potential losses cannot be made at this time.
In addition to the matters described above, we are often involved in certain other proceedings which seek monetary damages and other relief.
Based upon information currently available to us, none of these other claims are expected to have a material effect on our business, financial condition
or results of operations.
Indemnification agreements
- We are currently a party to indemnification agreements with certain officers and each of the members of our
Board of Directors. No liabilities have been recorded in the condensed consolidated balance sheets for any indemnification agreements, because they
are neither probable nor estimable.
As of December 31, 2012, there were 34,661,769 shares available for grant under the Clearwire Corporation 2008 Stock Compensation Plan, which
we refer to as the 2008 Plan, which authorizes us to grant incentive stock options, non
- qualified stock options, stock appreciation rights, restricted
stock, restricted stock units, which we refer to as RSUs, performance based RSUs and other stock awards to our employees, directors and consultants.
Grants to be awarded under the 2008 Plan will be made available at the discretion of the Compensation Committee of the Board of Directors from
authorized but unissued shares, authorized and issued shares reacquired, or a combination thereof. With the adoption of the 2008 Plan, no additional
share
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14.
Share - Based Payments