Clearwire 2010 Annual Report Download - page 35

Investors described elsewhere in this filing. These relationships may create actual or potential conflicts of interest,
and may cause the parties to these arrangements to make decisions or take actions that do not reflect our best
interests.
Our commercial agreements with Sprint and the other Investors were each entered into concurrently with
purchases of shares of our capital stock by such parties or their affiliates. In addition, our various commercial
agreements with Sprint and the other Investors provide for, among other things, access rights to towers that Sprint
owns or leases, resales by us and certain other Investors of bundled 2G and 3G services from Sprint, resales by
Sprint and certain other Investors of our 4G services, most favored reseller status with respect to economic and non-
economic terms of certain service agreements, collective development of new 4G services, creation of desktop and
mobile applications on our network, the embedding of 4G mobile WiMAX chips into various of our network
devices and the development of Internet services and protocols. Except for the agreements with Google and Intel,
none of these agreements restricts these parties from entering into similar arrangements with other parties, but rights
could be lost if a party enters into a similar relationship. For additional information regarding these relationships,
see “Certain relationships and related party transactions.”
Clearwire is a “controlled company” within the meaning of the NASDAQ Marketplace Rules and relies
on exemptions from certain corporate governance requirements.
Sprint beneficially owned approximately 53.9% of the outstanding voting power of Clearwire as of Decem-
ber 31, 2010. In addition, the Investors collectively owned approximately 27.8% and Eagle River owned
approximately 3.9% of the outstanding voting power of Clearwire. For further information, please see “Certain
relationships and related party transactions — Relationships among certain stockholders, directors and officers of
Clearwire.” The Equityholders’ Agreement governs the voting of shares of Class A Common Stock and Class B
Common Stock held by each of the parties thereto in certain circumstances, including with respect to the election of
the individuals nominated to the Clearwire board of directors by Sprint, the Investors and Eagle River.
As a result of the combined voting power of Sprint, the Investors and Eagle River and the Equityholders’
Agreement, Clearwire relies on exemptions from certain NASDAQ corporate governance standards. Under the
NASDAQ Marketplace Rules, a company of which more than 50% of the voting power is held by single person or a
group of people is a “controlled company” and may elect not to comply with certain NASDAQ corporate
governance requirements, including the requirements that:
• a majority of the board of directors consist of independent directors;
• the compensation of officers be determined, or recommended to the board of directors for determination, by
a majority of the independent directors or a compensation committee comprised solely of independent
directors; and
• director nominees be selected, or recommended for the board of directors’ selection, by a majority of the
independent directors or a nominating committee comprised solely of independent directors with a written
charter or board resolution addressing the nomination process.
If Clearwire chooses to no longer rely on these exemptions in the future it will be subject to all of the NASDAQ
corporate governance requirements.
The corporate opportunity provisions in the Charter could enable certain of Clearwire’s stockholders to
benefit from corporate opportunities that might otherwise be available to Clearwire.
The Charter contains provisions related to corporate opportunities that may be of interest to both Clearwire and
certain of its stockholders, including the Investors and Eagle River, who are referred to in the Charter as the
Founding Stockholders. These provisions provide that unless a director is an employee of Clearwire, such person
does not have a duty to present to Clearwire a corporate opportunity of which he or she becomes aware, except
where the corporate opportunity is expressly offered to such person primarily in his or her capacity as a director of
Clearwire.
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