Sprint - Nextel 2014 Annual Report Download - page 21

Table of Contents
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• increased costs to integrate the networks, spectrum, technology, personnel, subscriber base, and business
practices of the company involved in the acquisition, strategic investment, or merger with our business;
• potential exposure to material liabilities not discovered in the due diligence process or as a result of any
litigation arising in connection with such transactions;
• significant transaction expenses in connection with any such transaction, whether consummated or not;
• risks related to our ability to obtain any required regulatory approvals necessary to consummate any such
transaction;
• acquisition financing may not be available on reasonable terms or at all and any such financing could
significantly increase our outstanding indebtedness or otherwise affect our capital structure or credit ratings;
and
• any acquired or merged business, technology, service, or product may significantly under-perform relative to
our expectations, and we may not achieve the benefits we expect from our transaction, which could, among
other things, also result in a write-down of goodwill and other intangible assets associated with such
transaction.
Certain of these risks may also apply to the RadioShack transaction. For any or all of these reasons, our pursuit of
an acquisition, investment, or merger may cause our actual results to differ materially from those anticipated.
Controlled Company Risks
As long as SoftBank controls us, other holders of our common stock will have limited ability to influence matters
requiring stockholder approval and SoftBank’s interest may conflict with ours and other stockholders.
SoftBank beneficially owns approximately 80% of the outstanding common stock of Sprint. As a result, until such
time as SoftBank and its controlled affiliates hold shares representing less than a majority of the votes entitled to be cast by
the holders of our outstanding common stock at a stockholder meeting, SoftBank generally will have the ability to control the
outcome of any matter submitted for the vote of our stockholders, except in certain circumstances set forth in our certificate
of incorporation or bylaws.
In addition, pursuant to our bylaws, we are subject to certain requirements and limitations regarding the
composition of our board of directors. Many of those requirements and limitations expire on or prior to July 10, 2016.
Thereafter, 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 stockholder meeting, SoftBank will be able
to freely nominate and elect all the members of our board of directors, subject only to a requirement that a certain number of
directors qualify as "Independent Directors," as such term is defined in the NYSE listing rules and applicable laws. The
directors elected by SoftBank will have the authority to make decisions affecting the capital structure of the Company,
including the issuance of additional capital stock or options, the incurrence of additional indebtedness, the implementation of
stock repurchase programs, and the declaration of dividends.
The interests of SoftBank may not coincide with the interests of our other stockholders or with holders of our
indebtedness. SoftBank’s ability, subject to the limitations in our certificate of incorporation and bylaws, to control all matters
submitted to our stockholders for approval limits the ability of other stockholders to influence corporate matters and, as a
result, we may take actions that our stockholders or holders of our indebtedness do not view as beneficial. As a result, the
market price of our common stock or terms upon which we issue indebtedness could be adversely affected. In addition, the
existence of a controlling stockholder may have the effect of making it more difficult for a third-party to acquire, or
discouraging a third-party from seeking to acquire, the Company. A third-party would be required to negotiate any such
transaction with SoftBank, and the interests of SoftBank with respect to such transaction may be different from the interests
of our other stockholders or with holders of our indebtedness. In addition, the performance of SoftBank and SoftBank’s
ordinary shares or speculation about the possibility of future actions SoftBank may take in connection with us may adversely
affect our share price or the trading price of our debt securities.
Subject to limitations in our certificate of incorporation that limit SoftBank’s ability to engage in certain
competing businesses in the U.S. or take advantage of certain corporate opportunities, SoftBank is not restricted from
competing with us or otherwise taking for itself or its other affiliates certain corporate opportunities that may be attractive to
the Company.