Sprint - Nextel 2013 Annual Report Download - page 102

Table of Contents
another amendment to the International Roaming Agreement, under which Sprint would not charge SoftBank for SoftBank subscribers roaming on Sprint
’ s
CDMA network. At this time, this transaction is expected to have little, if any, cost to Sprint in 2014 as SoftBank subscribers can not roam on Sprint today.
Our board has approved an assignment agreement with a SoftBank Party and an unrelated third
- party software vendor. The agreement provides that
Sprint will assign a to
- be - determined quantity of certain third - party software licenses to a SoftBank Party and is expected to result in: (1) payment by a SoftBank
Party to a Sprint subsidiary an amount equal to 50
- 70% of the contract license price, with a maximum amount of approximately $2.9 million, and (2) SoftBank ’ s
agreement to pay the corresponding ongoing annual support services fees for the transferred licenses, the maximum amount of such fees being approximately
$0.9 million per year, thereby relieving Sprint of such corresponding ongoing support services fees into perpetuity due to the perpetual terms of the licenses.
In February of 2014, a SoftBank Party and a Sprint subsidiary expect to enter into a sublease providing the Sprint party the right to occupy and use a
floor of SoftBank
’ s leased offices at Two Circle Star Way in San Mateo, California for an executive briefing center and general office use. Over the five year
initial sublease term, the Sprint party will pay approximately $8 million for rent, operating expenses and other services. SoftBank will provide an improvement
allowance to Sprint of up to $5 million. This transaction was approved by our board.
Transactions with SoftBank Parties in the Ordinary Course Business
Sprint or its affiliates have also entered into various commercial arrangements with SoftBank Parties or with third parties to which SoftBank Parties
are also parties, including for international wireless roaming, wireless and wireline call termination and potential joint procurement activities (collectively, the
"Commercial Agreements"). These Commercial Agreements, which include interconnection agreements, sale of data telecommunication services, master services
agreements, international roaming agreements, traffic termination agreements and other commercial agreements, were entered into in arms
- length transactions in
the ordinary course of business and are typical for SoftBank
’ s contractual arrangements with other U.S. carriers and in third - party dealings. The Commercial
Agreements and related contract orders between Sprint or its affiliates and SoftBank Parties covered an aggregate of less than $40 million in payments for
services, fees and expenses between the parties since January 1, 2013. Such transactions are generally deemed pre
- approved under our related party
transactions policy.
Transactions with Brightstar
Sprint or its affiliates entered into various commercial agreements with Brightstar or its affiliates prior to Mr. Claure becoming a director of Sprint on
January 13, 2014 and prior to Brightstar becoming a controlled affiliate of SoftBank on January 29, 2014. These agreements were entered into in arms
- length
transactions in the ordinary course of business and are typical for Sprint's contractual arrangements with unrelated third
- parties. These transactions are valued
at approximately $130 million.
Independence of Directors
Controlled Company
We have elected to be treated as a "controlled company" under NYSE listing standards because more than 50% of our voting power is held by
SoftBank. Accordingly, we are exempt from certain requirements of the NYSE corporate governance rules, including the requirement that we have a majority of
independent directors on our board and the requirement that the compensation and nominating and corporate governance committees of the board have written
charters addressing certain specified matters.
Nonetheless, in keeping with good corporate governance practices, we maintain a majority of independent directors, our Audit Committee is
comprised solely of independent directors and our Bylaws provide that, for so long as we are a controlled company, at least one member of our Compensation
Committee and Nominating Committee will be independent. In addition, we maintain written charters for each of our standing committees. Independent directors
have the ability to propose agenda items, including for executive sessions. We believe our board leadership structure provides the appropriate balance of
independent directors, directors affiliated with our controlling stockholder and management working together to represent the interests of our entire stockholder
base. In the event we cease to be a controlled company within the meaning of these rules, we would then be required to comply with these provisions after the
transition periods specified by the NYSE.
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