Sprint - Nextel 2013 Annual Report Download - page 24

Table of Contents
SoftBank
’ s ability to eventually control our board of directors may make it difficult for us to recruit independent directors.
For so long as SoftBank and its controlled affiliates hold shares of our common stock representing at least a majority of the votes entitled to be cast
by the holders of our common stock at a stockholders
’ meeting, SoftBank will be able to elect all of the members of our board of directors commencing three
years following the effective time of the SoftBank Merger. Further, the interests of SoftBank and our other stockholders may diverge. Under these
circumstances, persons who might otherwise accept an invitation to join our board of directors may decline.
Any inability to resolve favorably any disputes that may arise between the Company and SoftBank may adversely affect our business.
Disputes may arise between SoftBank and the Company in a number of areas, including:
We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable than if we were dealing with an
unaffiliated party.
The agreements between the Company and SoftBank may be amended upon agreement between the parties. While the Company is controlled by
SoftBank, it may not have the leverage to negotiate amendments to these agreements if required on terms as favorable to us as those that we would negotiate
with an unaffiliated third
- party.
We are a "controlled company" within the meaning of the NYSE rules and, as a result, rely on exemptions from certain corporate governance requirements
that provide protection to stockholders of companies that are not "controlled companies."
SoftBank owns more than 50% of the total voting power of our common shares and, accordingly, we have elected to be treated as a "controlled
company" under the NYSE corporate governance standards. As a controlled company, we are exempt under the NYSE standards from the obligation to comply
with certain NYSE corporate governance requirements, including the requirements:
As a result of our use of the "controlled company" exemptions, holders of our common stock and debt securities, may not have the same protection
afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.
Regulatory authorities have imposed measures to protect national security and classified projects as well as other conditions that could have an adverse
effect on Sprint.
As a precondition to Committee of Foreign Investment in the United States (CFIUS) approval of the SoftBank Merger, CFIUS required that SoftBank
and Sprint enter into a National Security Agreement (NSA), under which SoftBank and Sprint have agreed to implement certain measures to protect national
security, certain of which may materially and adversely affect our operating results due to increasing the cost of compliance with security measures, and limiting
our control over certain U.S. facilities, contracts, personnel, vendor selection and operations. If we fail to comply with our obligations under the NSA, our ability
to operate our business may be adversely affected.
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business combinations involving the Company;
•
sales or dispositions by SoftBank of all or any portion of its ownership interest in us;
•
the nature, quality and pricing of services SoftBank may agree to provide to the Company;
•
arrangements with third parties that are exclusionary to SoftBank or the Company; and
•
business opportunities that may be attractive to both SoftBank and the Company.
•
that a majority of our board of directors consists of independent directors;
•
that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter
addressing the committee
’ s purpose and responsibilities;
•
that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee ’ s
purpose and responsibilities; and
•
that an annual performance evaluation of the nominating and governance committee and compensation committee be performed.