Clearwire 2008 Annual Report Download - page 16

T
he Transactions and Cor
p
orate
S
tructur
e
We were formed on November 28, 2008, as a result of the closin
g
of the Transactions, which we refer to as the
Closin
g
. At the Closin
g
:
•O
ld
C
l
earw
i
re mer
g
e
d
w
i
t
h
an
di
nto an
i
n
di
rect su
b
s
idi
ar
y
o
f
C
l
earw
i
re, w
i
t
h
O
ld
C
l
earw
i
re surv
i
v
i
n
g
as a
di
rect, w
h
o
lly
-owne
d
su
b
s
idi
ar
y
o
f
C
l
earw
i
re Commun
i
cat
i
ons, LLC, a su
b
s
idi
ar
y
o
f
C
l
earw
i
re, w
hi
c
h
w
e
refer to as Clearwire Communications. In the mer
g
er, each share of Old Clearwire’s common stock was
c
onverted into one share of Clearwire’s Class A Common Stock, par value
$
0.0001 per share, which we refe
r
to as Clearwire Class A Common Stock, and each o
p
tion and warrant to
p
urchase shares of Old Clearwir
e
C
lass A Common Stock was converted into one o
p
tion or warrant, as a
pp
licable, to
p
urchase the same
n
um
b
er o
f
s
h
ares o
f
C
l
earw
i
re C
l
ass A Common Stoc
k
on su
b
stant
i
a
ll
yt
h
e same terms.
•Fo
ll
ow
i
n
g
t
h
e mer
g
er, Spr
i
nt contr
ib
ute
d
t
h
e Spr
i
nt W
i
MAX Bus
i
ness to C
l
earw
i
re Commun
i
cat
i
ons
in
e
xchange for Class B non-voting common interests in Clearwire Communications, which we refer to as
C
learwire Communications Class B Common Interests. Sprint also purchased, for
$
37,000 in cash
,
3
70 million shares of Clearwire’s Class B Common Stock, par value
$
0.0001 per share, which we refe
r
to as Clearwire Class B Common Stock. Immediatel
y
followin
g
the purchase b
y
Sprint, Clearwir
e
c
ontributed the
$
37,000 that it received from Sprint to Clearwire Communications in exchange fo
r
3
70 m
illi
on vot
i
ng equ
i
ty
i
nterests
i
nC
l
earw
i
re Commun
i
cat
i
ons, w
hi
c
h
we re
f
er to as C
l
earw
i
re Com-
m
unications Votin
g
Interests
.
• Following completion of the merger and the Sprint contributions, Google invested
$
500 million in Clearwir
e
i
n exchan
g
e for Clearwire Class A Common Stock. Clearwire then contributed the $500 million received
from Goo
g
le to Clearwire Communications in exchan
g
e for Clearwire Communications Votin
g
Interests an
d
Cl
ass A non-vot
i
ng common
i
nterests
i
nC
l
earw
i
re Commun
i
cat
i
ons, w
hi
c
h
we re
f
er to as C
l
earw
i
r
e
C
ommun
i
cat
i
ons
Cl
ass A
C
ommon Interests
.
• Following completion of the merger and the Sprint contributions, the Investors, other than Google, invested a
total of
$
2.7 billion in exchange for Clearwire Communications Voting Interests and Clearwire Commu
-
ni
cat
i
ons C
l
ass B Common Interests. Imme
di
ate
ly f
o
ll
ow
i
n
g
t
hi
s
i
nvestment, eac
h
o
f
t
h
e Investors, ot
h
e
r
than Goo
g
le, contributed to Clearwire its Clearwire Communications Votin
g
Interests in exchan
g
e for an
eq
ual number of shares of Clearwire Class B Common Stock.
I
n exchan
g
e for their investments, Goo
g
le initiall
y
received 25 million shares of Clearwire Class A Common
S
tock and the other Investors received 135 million shares of Clearwire Class B Common Stock and an e
q
uivalent
amount of Clearwire Communications Class B Common Interests. The number of shares of Clearwire Class A an
d
C
l
ass B Common Stoc
k
an
d
C
l
earw
i
re Commun
i
cat
i
ons C
l
ass B Common Interests, as app
li
ca
bl
e, t
h
at t
h
e Investor
s
were ent
i
t
l
e
d
to rece
i
ve un
d
er t
h
e Transact
i
ons. A
g
reement was su
bj
ect to a post-c
l
os
i
n
g
a
dj
ustment
b
ase
d
on t
h
e
t
radin
g
price of Clearwire Class A Common Stock on NASDAQ over 1
5
randoml
y
-selected tradin
g
da
y
s durin
g
th
e
3
0-day period ending on the 90th day after the Closing, or February 2
6
, 2009, which we refer to as the Adjustment
D
ate, with a floor of
$
17.00 per share and a cap of
$
23.00 per share. Durin
g
the measurement period, Clearwir
e
Class A Common Stock traded below $17.00 per share on NASDAQ, so on the Ad
j
ustment Date, Clearwire issue
d
t
o Google an additional 4,411,765 shares of Clearwire Class A Common Stock and to the other Investors
23,823,529 shares of Clearwire Class B Common Stock and an e
q
uivalent number of additional Clearwir
e
Communications Class B Common Interests to reflect the $17.00 final
p
rice
p
er share. Furthermore,
p
ursuant to a
S
u
b
scr
i
pt
i
on Agreement
d
ate
d
May 7, 2008,
b
yan
db
etween t
h
e Company an
d
CW Investment Ho
ldi
ngs LLC,
w
hi
c
h
we re
f
er to as CW Investments, an ent
i
t
y
a
ffili
ate
d
w
i
t
h
Jo
h
n Stanton, a
di
rector o
f
t
h
e Compan
y
,on
Februar
y
27, 2009, the Compan
y
sold 588,235 shares of Clearwire Class A Common Stock to CW Investments, at
a
p
rice of
$
17.00
p
er share
.
Fo
ll
ow
i
ng t
h
e comp
l
et
i
on o
f
t
h
e Transact
i
ons, Spr
i
nt an
d
t
h
e Investors, ot
h
er t
h
an Goog
l
e, own s
h
ares o
f
Clearwire Class B Common Stock, which have equal votin
g
ri
g
hts to Clearwire Class A Common Stock, but hav
e
on
l
y
li
m
i
te
d
econom
i
cr
i
g
h
ts. Un
lik
et
h
e
h
o
ld
ers o
f
C
l
earw
i
re C
l
ass A Common Stoc
k
,t
h
e
h
o
ld
ers o
f
C
l
earw
i
r
e
C
l
ass B Common Stoc
kh
ave no r
i
g
h
tto
di
v
id
en
d
san
d
no r
i
g
h
t to any procee
d
son
li
qu
id
at
i
on ot
h
er t
h
an t
h
e par
value of the Clearwire Class B Common Stock. Sprint and the Investors, other than Goo
g
le, hold their economic
r
ights through ownership of Clearwire Communications Class B Common Interests. Google owns shares of
C
l
earw
i
re C
l
ass A Common Stoc
k
. Eac
h
s
h
are o
f
C
l
earw
i
re C
l
ass B Common Stoc
k
p
l
us one C
l
earw
i
r
e
C
ommun
i
cat
i
ons
Cl
ass B
C
ommon Interest
i
s con
v
ert
ibl
e
i
nto one s
h
are o
fCl
ear
wi
re
Cl
ass A
C
ommon
S
toc
k
.
4