Sprint - Nextel 2013 Annual Report Download - page 100

Table of Contents
Certain Relationships and Related Transactions
SoftBank, through its wholly
- owned subsidiaries, is the controlling stockholder of Sprint. Mr. Son is SoftBank ’ s controlling stockholder, chairman of
the board and chief executive officer. Mr. Fisher is the founder of SoftBank Capital, a director and president of SoftBank Holdings, Inc. and a member of the
board of directors of SoftBank. Mr. Claure is Chairman and CEO of Brightstar Corp. ("Brightstar"). Brightstar is a controlled affiliate of SoftBank. We consider
SoftBank, its controlled affiliates, as well as our directors and executive officers to be "related parties."
Policy on Oversight of Related Party Transactions
Our board has adopted and the Audit Committee has maintained a written policy on the review and approval of transactions with related parties. The
policy generally groups these transactions into three categories: (1) transactions requiring the approval by the Audit Committee; (2) transactions requiring the
approval of our board, including approval of the majority of the independent directors; and (3) certain ordinary course transactions that are deemed pre
-
approved by our board.
Generally, our board deems pre
- approved any transaction or series of transaction between SoftBank or its controlled affiliates (each a "SoftBank
Party") that is entered into in the ordinary course of business and has substantially the same terms and conditions offered to or by third parties, or where the
rates or charges involved are determined by competitive bid, as well as certain tri
- party agreements. All transactions deemed pre - approved must be also
approved by the Related Party Transaction Committee, which is comprised of members of management.
Related Party Transactions in 2013
We have entered into indemnity agreements with our officers and directors that provide, among other things, that we will indemnify each such officer
or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required
to pay in actions or proceedings in which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of Sprint or its
subsidiaries.
Transactions with SoftBank Parties
- Approved by Sprint Nextel Corporation
So long as SoftBank remains our controlling stockholder, our governing documents confer SoftBank certain rights. Our bylaws, as contemplated by
the Merger Agreement, give SoftBank the ability to compose our board from July 10, 2013 through July 10, 2015 as follows:
• the Chief Executive Officer of Sprint;
• three independent directors designated by SoftBank;
• three continuity directors (independent directors who served on the Sprint Nextel board); and
• three additional directors designated by SoftBank, known as SoftBank Affiliate Directors.
After July 10, 2015, there is no requirement to appoint continuity directors, but SoftBank will be required to appoint six independent directors, our
Chief Executive Officer and three additional directors of its choosing to our board.
In connection with the SoftBank Merger and other related transactions, SoftBank Parties and Sprint entered into certain agreements in addition to the
Merger Agreement and the Bond Purchase Agreement. On November 30, 2012, Sprint Nextel and a SoftBank Party entered into an expense reimbursement
agreement, as amended and restated on April 9, 2013, pursuant to which the parties agreed that the SoftBank Party will reimburse Sprint for certain out
- of - pocket
expenses of up to $5.5 million in the aggregate incurred in connection with certain audit services performed on behalf of Sprint Nextel, including converting
Sprint Nextel ’ s financial statements to a presentation in conformity with the International Financial Reporting Standards and performing a valuation of Sprint
Nextel ’ s assets in connection with the preparation of pro forma financial statements. On April 8, 2013, Sprint Nextel and SoftBank Inc. entered into an expense
reimbursement agreement, pursuant to which the parties agreed that SoftBank Inc. will reimburse Sprint Nextel for certain out
- of - pocket expenses of up to
$115,000 in the aggregate
98
Item 13.
Certain Relationships and Related Transactions, and Director Independence