Clearwire 2008 Annual Report Download - page 43

O
ur commerc
i
a
l
agreement w
i
t
h
Spr
i
nt an
d
t
h
e Investors were eac
h
entere
di
nto concurrent
l
yw
i
t
h
purc
h
ases
of shares of our capital stock b
y
such parties or their affiliates. In addition, our various commercial a
g
reements with
S
print and the Investors provide for, among other things, access rights to towers that Sprint owns or leases, resale
s
b
yusan
d
certa
i
n Investors o
fb
un
dl
e
d
2G an
d
3G serv
i
ces
f
rom Spr
i
nt, resa
l
es
b
y Spr
i
nt an
d
certa
i
n Investors o
f
ou
r
4
G services, most favored reseller status with res
p
ect to economic and non-economic terms of certain service
agreements, co
ll
ect
i
ve
d
eve
l
opment o
f
new 4G serv
i
ces, creat
i
on o
fd
es
k
top an
d
mo
bil
e app
li
cat
i
ons on t
h
eou
r
n
etwor
k
,t
h
eem
b
e
ddi
ng o
f
mo
bil
eW
i
MAX c
hi
ps
i
nto var
i
ous o
f
our networ
kd
ev
i
ces an
d
t
h
e
d
eve
l
opment o
f
Internet serv
i
ces an
d
protoco
l
s. Except
f
or t
h
ea
g
reements w
i
t
h
Goo
gl
ean
d
Inte
l
, none o
f
t
h
ese a
g
reements restr
i
cts
t
hese parties from entering into similar arrangements with other parties. See the section titled “Certain Relation
-
s
hips and Related Transactions, and Directors Independence” beginning on page 122 of this report
.
C
learwire is a “controlled company” within the meaning of the NASDA
Q
Marketplace Rules and relies
o
n exemptions
f
rom certain corporate governance requirements.
Sprint beneficially owns approximately 51% of the outstanding voting power of Clearwire as of February 26, 2009.
In addition, the Investors collectivel
y
own approximatel
y
31% and Ea
g
le River owns approximatel
y
5% of th
e
outstandin
g
votin
g
power of Clearwire. The Equit
y
holders’ A
g
reement
g
overns the votin
g
of shares of Clearwire Class A
an
d
C
l
ass B Common Stoc
kh
e
ld b
yeac
h
o
f
t
h
e part
i
es t
h
ereto
i
n certa
i
nc
i
rcumstances,
i
nc
l
u
di
ng w
i
t
h
respect to t
he
el
ect
i
on o
f
t
h
e
i
n
di
v
id
ua
l
snom
i
nate
d
to t
h
e
b
oar
d
o
fdi
rectors o
f
C
l
earw
i
re
b
ySpr
i
nt, Eag
l
eR
i
ver an
d
t
h
e Investors.
As a result of the combined votin
g
power of Sprint, Ea
g
le River and the Investors and the Equit
y
holders
’
A
greement, we rely on exemptions from certain NASDAQ corporate governance standards. Under the NASDA
Q
M
arketplace Rules, a compan
y
of which more than 50% of the votin
g
power is held b
y
sin
g
le person or a
g
roup o
f
p
eople is a “controlled compan
y
” and ma
y
elect not to compl
y
with certain NASDAQ corporate
g
overnance
r
equirements, includin
g
the requirements that
:
•ama
j
or
i
t
y
o
f
t
h
e
b
oar
d
o
fdi
rectors cons
i
st o
fi
n
d
epen
d
ent
di
rectors;
• the compensation of officers be determined, or recommended to the board of directors for determination, b
y
ama
j
or
i
ty o
f
t
h
e
i
n
d
epen
d
ent
di
rectors or a compensat
i
on comm
i
ttee compr
i
se
d
so
l
e
l
yo
fi
n
d
epen
d
ent
di
rectors; an
d
• director nominees be selected, or recommended for the board of directors’ selection, b
y
ama
j
orit
y
of th
e
i
n
d
epen
d
ent
di
rectors or a nom
i
nat
i
ng comm
i
ttee compr
i
se
d
so
l
e
l
yo
fi
n
d
epen
d
ent
di
rectors w
i
t
h
awr
i
tte
n
ch
arter or
b
oar
d
reso
l
ut
i
on a
dd
ress
i
ng t
h
e nom
i
nat
i
on process.
Unless we choose to no lon
g
er rel
y
on these exemptions in the future,
y
ou will not have the same protections
afforded to stockholders of companies that are sub
j
ect to all of the NASDAQ corporate
g
overnance requirements
.
Th
e cor
p
orate o
pp
ortunit
yp
rovisions in t
h
eC
l
earwire C
h
arter cou
ld
ena
bl
e certain o
f
our stoc
kh
o
ld
ers t
o
b
enefit from corporate opportunities that might otherwise be available to us.
Th
eC
l
earw
i
re C
h
arter conta
i
ns prov
i
s
i
ons re
l
ate
d
to corporate opportun
i
t
i
es t
h
at may
b
eo
fi
nterest to
b
ot
h
C
l
earw
i
re an
d
certa
i
no
f
our stoc
kh
o
ld
ers,
i
nc
l
u
di
ng Spr
i
nt, Eag
l
eR
i
ver an
d
t
h
e Investors, w
h
o are re
f
erre
d
to
i
nt
h
e
Clearwire Charter as the Foundin
g
Stockholders. These provisions provide that unless a director is an emplo
y
ee o
f
C
l
earw
i
re, suc
h
person
d
oes not
h
ave a
d
uty to present to C
l
earw
i
re a corporate opportun
i
ty o
f
w
hi
c
hh
eors
he
b
ecomes aware, except w
h
ere t
h
e corporate opportun
i
ty
i
s express
l
yo
ff
ere
d
to suc
h
person
i
n
hi
sor
h
er capac
i
ty a
s
a director of Clearwire.
I
n addition, the Clearwire Charter expressl
y
provides that our Foundin
g
Stockholders ma
y
, and have no dut
y
n
ot to, engage
i
n any
b
us
i
nesses t
h
at are s
i
m
il
ar to or compet
i
t
i
ve w
i
t
h
t
h
at o
f
C
l
earw
i
re,
d
o
b
us
i
ness w
i
t
h
our
c
ompetitors, customers and suppliers, and emplo
y
Clearwire’s emplo
y
ees or officers. The Foundin
g
Stockholder
s
or their affiliates ma
y
deplo
y
competin
g
wireless broadband networks or purchase broadband services from othe
r
p
rov
id
ers. Furt
h
er, we may a
l
so compete w
i
t
h
t
h
e Foun
di
ng Stoc
kh
o
ld
ers or t
h
e
i
ra
ffili
ates
i
nt
h
e area o
f
emp
l
oye
e
r
ecruitin
g
and retention. These potential conflicts of interest could have a material adverse effect on our business
,
financial condition, results of operations or prospects if attractive corporate opportunities are allocated b
y
th
e
F
oun
di
ng Stoc
kh
o
ld
ers to t
h
emse
l
ves or t
h
e
i
rot
h
er a
ffili
ates or we
l
ose
k
ey personne
l
to t
h
em
.
31