\n5.14 Redemption of Sprint First Series Preferred Stock and Sprint Second Series Preferred Stock.. 1-36
\n5.15 Affiliate Letter…………………………………………………………………. 1-36
\n5.16 Tax Treatment……………………………………………………………………. 1-36
\n5.17 Assumption Agreement and Supplemental Indentures…………………………………….. 1-37
\n5.18 Other Actions……………………………………………………………………. 1-37<\/p>\n ARTICLE VI CONDITIONS PRECEDENT<\/p>\n
6.1 Conditions to Each Party’s Obligation to Effect the Merger……………………………. 1-37
\n (a) Stockholder Approvals…………………………………………………………. 1-37
\n (b) No Injunctions or Restraints; Illegality………………………………………… 1-37
\n (c) FCC and Public Utility Commission Approvals……………………………………… 1-37
\n (d) HSR Act……………………………………………………………………… 1-37
\n (e) EU Antitrust…………………………………………………………………. 1-38
\n (f) Nasdaq Listing……………………………………………………………….. 1-38
\n (g) Effectiveness of the Form S-4………………………………………………….. 1-38
\n6.2 Additional Conditions to Obligations of MCI WorldCom…………………………………. 1-38
\n (a) Representations and Warranties…………………………………………………. 1-38
\n (b) Performance of Obligations of Sprint……………………………………………. 1-38
\n (c) Tax Opinion………………………………………………………………….. 1-38
\n (d) No Material Adverse Change…………………………………………………….. 1-39
\n6.3 Additional Conditions to Obligations of Sprint………………………………………. 1-39
\n (a) Representations and Warranties…………………………………………………. 1-39
\n (b) Performance of Obligations of MCI WorldCom………………………………………. 1-39
\n (c) Tax Opinion………………………………………………………………….. 1-39
\n (d) No Material Adverse Change…………………………………………………….. 1-39<\/p>\n
ARTICLE VII TERMINATION AND AMENDMENT<\/p>\n
7.1 Termination……………………………………………………………………… 1-39
\n7.2 Effect of Termination…………………………………………………………….. 1-40
\n7.3 Amendment……………………………………………………………………….. 1-41
\n7.4 Extension; Waiver; Consent………………………………………………………… 1-41<\/p>\n
ARTICLE VIII GENERAL PROVISIONS<\/p>\n
8.1 Non-Survival of Representations, Warranties and Agreements……………………………. 1-41
\n8.2 Notices…………………………………………………………………………. 1-41
\n8.3 Interpretation…………………………………………………………………… 1-42
\n8.4 Counterparts…………………………………………………………………….. 1-42
\n8.5 Entire Agreement; No Third Party Beneficiaries………………………………………. 1-42
\n8.6 Governing Law……………………………………………………………………. 1-43
\n8.7 Severability…………………………………………………………………….. 1-43
\n8.8 Assignment………………………………………………………………………. 1-43
\n8.9 Submission to Jurisdiction; Waivers………………………………………………… 1-43
\n8.10 Enforcement……………………………………………………………………… 1-43
\n8.11 Definitions……………………………………………………………………… 1-43<\/p>\n
Exhibit A Amendments to Articles of Incorporation of MCI WorldCom
\nExhibit B Amendments to Bylaws of MCI WorldCom
\nAnnex 1 Certain Matters Relating to Surviving Corporation
\nAppendix 1 Form of MCI WorldCom Tax Opinion
\nAppendix 2 Form of Sprint Tax Opinion
\nAppendix 3 Form of MCI WorldCom Representations Letter
\nAppendix 4 Form of Sprint Representations Letter
\n<\/c><\/c><\/s><\/table>\n
iii<\/p>\n
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of March 8, 2000
\n(this “Agreement”), between MCI WORLDCOM, INC., a Georgia corporation (“MCI
\nWorldCom”), and SPRINT CORPORATION, a Kansas corporation (“Sprint”).<\/p>\n
WITNESSETH:<\/p>\n
WHEREAS, MCI WorldCom and Sprint entered into an Agreement and Plan of
\nMerger, dated as of October 4, 1999 (the “Original Merger Agreement”), and they
\nnow desire to amend and restate the Original Merger Agreement (it being
\nunderstood that all references to “the date hereof” or “the date of this
\nAgreement” refer to October 4, 1999);<\/p>\n
WHEREAS, the respective Boards of Directors of MCI WorldCom and Sprint have
\neach determined that the merger of Sprint with and into MCI WorldCom (the
\n“Merger”) is in the best interests of their respective stockholders, such
\nBoards of Directors have adopted resolutions approving the Merger and
\nrecommending that their respective stockholders adopt and approve this
\nAgreement, and the Board of Directors of Sprint has also determined that the
\nterms of the Merger are fair to holders of Sprint FON Stock, taken as a
\nseparate class, and holders of Sprint PCS Stock, taken as a separate class,
\nupon the terms and subject to the conditions set forth in this Agreement,
\npursuant to which each outstanding share of capital stock of Sprint issued and
\noutstanding immediately prior to the Effective Time, other than shares owned or
\nheld by MCI WorldCom or Sprint and other than Dissenting Shares, will be
\nconverted into the right to receive the applicable Merger Consideration as set
\nforth in Section 1.8;<\/p>\n
WHEREAS, MCI WorldCom and Sprint desire to make certain representations,
\nwarranties, covenants and agreements in connection with the transactions
\ncontemplated hereby and also to prescribe various conditions to the
\ntransactions contemplated hereby;<\/p>\n
WHEREAS, MCI WorldCom and Sprint intend, by approving resolutions
\nauthorizing this Agreement, to adopt this Agreement as a plan of reorganization
\nwithin the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
\namended (the “Code”), and the regulations promulgated thereunder; and<\/p>\n
WHEREAS, Sprint has entered into or is entering into the MTA Transaction
\nDocuments with France Telecom S.A. (“FT”), Deutsche Telekom A.G. (“DT”) and
\ncertain other parties thereto relating to the interest of Sprint and its
\nSubsidiaries in the Global One joint venture and the investment by FT and DT
\nand certain of their Subsidiaries in Sprint.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the respective
\nrepresentations, warranties, covenants and agreements set forth herein and
\nintending to be legally bound hereby, the parties hereto agree as follows:<\/p>\n
ARTICLE I<\/p>\n
The Merger<\/p>\n
1.1 The Merger. Upon the terms and subject to the conditions set forth in
\nthis Agreement, and in accordance with the Kansas General Corporation Code (the
\n“KGCC”) and the Georgia Business Corporation Code (the “GBCC”), Sprint shall be
\nmerged with and into MCI WorldCom at the Effective Time. Following the Merger,
\nthe separate corporate existence of Sprint shall cease and MCI WorldCom shall
\ncontinue as the surviving corporation (the “Surviving Corporation”).<\/p>\n
1.2 Closing. The closing of the Merger (the “Closing”) will take place at
\n10:00 a.m., New York City time, on the second Business Day after the
\nsatisfaction or (subject to applicable law) waiver of the conditions (excluding
\nconditions that, by their terms, cannot be satisfied until the Closing Date)
\nset forth in Article VI (the “Closing Date”), unless another time or date is
\nagreed to in writing by the parties hereto. The Closing shall be held at the
\noffices of Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New
\nYork, New York, 10019, unless another place is agreed to in writing by the
\nparties hereto.<\/p>\n
1-1<\/p>\n
1.3 Effective Time. As soon as practicable following the Closing, the
\nparties shall (a) (i) file a certificate of merger (the “Kansas Certificate of
\nMerger”) in such form as is required by and executed in accordance with the
\nrelevant provisions of the KGCC and (ii) make all other filings or recordings
\nrequired under the KGCC, and (b) (i) file a certificate of merger (the “Georgia
\nCertificate of Merger”) in such form as is required by and executed in
\naccordance with the relevant provisions of the GBCC and (ii) make all other
\nfilings or recordings required under the GBCC. The Merger shall become
\neffective upon the later to occur of the filing of (i) the Kansas Certificate
\nof Merger with the Kansas Secretary of State and (ii) the Georgia Certificate
\nof Merger with the Georgia Secretary of State, or at such subsequent time as
\nMCI WorldCom and Sprint shall agree and be specified in the Kansas Certificate
\nof Merger and the Georgia Certificate of Merger (the date and time the Merger
\nbecomes effective being the “Effective Time”).<\/p>\n
1.4 Effects of the Merger. At and after the Effective Time, the Merger will
\nhave the effects set forth in the KGCC and GBCC. Without limiting the
\ngenerality of the foregoing, and subject thereto, at the Effective Time, all
\nthe property, rights, privileges, powers and franchises of Sprint shall be
\nvested in the Surviving Corporation, and all debts, liabilities and duties of
\nSprint shall become the debts, liabilities and duties of the Surviving
\nCorporation. Without limiting the generality of the foregoing, at the Effective
\nTime, the Surviving Corporation hereby expressly assumes all of Sprint’s
\nobligations in respect of the rights of the other parties granted pursuant to
\nthe Amended and Restated Stockholders’ Agreement dated as of November 23, 1998,
\nas amended (as amended by the MTA), the Amended and Restated Registration
\nRights Agreement dated as of November 23, 1998, as amended (as amended by the
\nMTA), the Amended and Restated Standstill Agreement dated as of November 23,
\n1998 (as amended by the MTA), in each case between Sprint, FT, DT and certain
\nother parties thereto, the Qualified Subsidiary Standstill Agreement dated
\nDecember 29, 1999 (as amended by the MTA) between Sprint and a Subsidiary of
\nDT, and the MTA Transaction Documents.<\/p>\n
1.5 Articles of Incorporation. The articles of incorporation of MCI
\nWorldCom, as in effect immediately prior to the Effective Time, shall be
\namended as of the Effective Time as set forth in Exhibit A hereto and, as so
\namended, such articles of incorporation shall be the articles of incorporation
\nof the Surviving Corporation until thereafter changed or amended as provided
\ntherein or by applicable law.<\/p>\n
1.6 Bylaws. The Bylaws of MCI WorldCom, as in effect immediately prior to
\nthe Effective Time, shall be amended as of the Effective Time as set forth in
\nExhibit B hereto and, as so amended, such Bylaws shall be the Bylaws of the
\nSurviving Corporation until thereafter changed or amended as provided therein
\nor by applicable law.<\/p>\n
1.7 Certain Surviving Corporation Matters. MCI WorldCom and Sprint shall
\ncause the matters set forth in Annex 1 hereto regarding the Surviving
\nCorporation to be effected as of the Effective Time.<\/p>\n
1.8 Effect on Capital Stock.<\/p>\n
(a) As contemplated by Exhibit A, at the Effective Time, the articles of
\nincorporation of MCI WorldCom will be amended to provide for the creation of
\nthe following series of capital stock of:<\/p>\n
(i) Common Stock, Series 2, par value $0.01 per share (the “MCI WorldCom
\n Series 2 Common Stock”);<\/p>\n
(ii) PCS Common Stock, Series 1, par value $1.00 per share (the “MCI
\n WorldCom Series 1 PCS Stock”);<\/p>\n
(iii) PCS Common Stock, Series 2, par value $1.00 per share (the “MCI
\n WorldCom Series 2 PCS Stock” and, together with the MCI WorldCom Series 1
\n PCS Stock, the “MCI WorldCom PCS Stock”);<\/p>\n
(iv) Series 5 Preferred Stock, par value $0.01 per share (the “MCI
\n WorldCom Series 5 Preferred Stock”);<\/p>\n
1-2<\/p>\n
(v) Series 7 Preferred Stock, par value $0.01 per share (the “MCI
\n WorldCom Series 7 Preferred Stock”); and<\/p>\n
(vi) Series 8 Junior Participating Preferred Stock, par value $0.01 per
\n share.<\/p>\n
The foregoing series of capital stock, together with the series and classes
\nof capital stock of MCI WorldCom authorized as of the date hereof, are hereby
\ncollectively referred to as “MCI WorldCom Capital Stock”.<\/p>\n
(b) At the Effective Time by virtue of the Merger and without any action on
\nthe part of the holder thereof (in each of the following cases other than such
\nshares owned or held by MCI WorldCom or Sprint, which shall automatically be
\nretired and shall cease to exist, and no consideration shall be delivered in
\nexchange therefor, and other than Dissenting Shares):<\/p>\n
(i) each share of Old Class A Common Stock, par value $2.50 per share, of
\nSprint (“Sprint Series FT Common Stock”) issued and outstanding immediately
\nprior to the Effective Time will be converted into the right to receive
\n(collectively, the “Series FT Merger Consideration”):<\/p>\n
(A) that number of shares of common stock, par value $0.01 per share, of
\n MCI WorldCom (“MCI WorldCom Common Stock”) equal to the sum of<\/p>\n
(x) the Number Of Shares Issuable With Respect To The Old Class A
\n Equity Interest In The FON Group (as defined in Sprint’s articles of
\n incorporation) represented by such share of Sprint Series FT Common
\n Stock immediately prior to the Effective Time times the FON Exchange
\n Ratio and<\/p>\n
(y) the Number Of Shares Issuable With Respect To The Old Class A
\n Equity Interest In The PCS Group (as defined in Sprint’s articles of
\n incorporation) represented by such share of Sprint Series FT Common
\n Stock immediately prior to the Effective Time times the PCS Exchange
\n Ratio,<\/p>\n
and<\/p>\n
(B) that number of shares of MCI WorldCom Series 1 PCS Stock equal to
\n the Number Of Shares Issuable With Respect To The Old Class A Equity
\n Interest In The PCS Group (as defined in Sprint’s articles of
\n incorporation) represented by such share of Sprint Series FT Common Stock
\n immediately prior to the Effective Time;<\/p>\n
(ii) each share of Class A Common Stock, Series DT, par value $2.50 per
\nshare, of Sprint (“Sprint Series DT Common Stock” and, together with the Sprint
\nSeries FT Common Stock, the “Sprint Class A Common Stock”) issued and
\noutstanding immediately prior to the Effective Time will be converted into the
\nright to receive (collectively, the “Series DT Merger Consideration”):<\/p>\n
(A) that number of shares of MCI WorldCom Common Stock equal to the sum
\nof<\/p>\n
(x) the Number Of Shares Issuable With Respect To The Class A–
\n Series DT Equity Interest In The FON Group (as defined in Sprint’s
\n articles of incorporation) represented by such share of Sprint Series
\n DT Common Stock immediately prior to the Effective Time times the FON
\n Exchange Ratio and<\/p>\n
(y) the Number Of Shares Issuable With Respect To The Class A–
\n Series DT Equity Interest In The PCS Group (as defined in Sprint’s
\n articles of incorporation) represented by such share of Sprint Series
\n DT Common Stock immediately prior to the Effective Time times the PCS
\n Exchange Ratio,<\/p>\n
and<\/p>\n
(B) that number of shares of MCI WorldCom Series 1 PCS Stock equal to
\n the Number Of Shares Issuable With Respect To The Class A–Series DT Equity
\n Interest In The PCS Group (as defined in Sprint’s articles of
\n incorporation) represented by such share of Sprint Series DT Common Stock
\n immediately prior to the Effective Time;<\/p>\n
1-3<\/p>\n
(iii) each share of Series 1 FON Stock, par value $2.00 per share, of
\n Sprint (“Sprint Series 1 FON Stock”) issued and outstanding immediately
\n prior to the Effective Time will be converted into the right to receive
\n that number of shares of MCI WorldCom Common Stock equal to the FON
\n Exchange Ratio (the “Series 1 FON Merger Consideration”);<\/p>\n
(iv) each share of Series 3 FON Stock, par value $2.00 per share, of
\n Sprint (“Sprint Series 3 FON Stock” and, together with the Sprint Series 1
\n FON Stock and the Series 2 FON Stock, par value $2.00 per share, of Sprint
\n (“Sprint Series 2 FON Stock”), the “Sprint FON Stock”), issued and
\n outstanding immediately prior to the Effective Time will be converted into
\n the right to receive a number of shares of MCI WorldCom Common Stock equal
\n to the FON Exchange Ratio (the “Series 3 FON Merger Consideration”);<\/p>\n
(v) each share of Series 1 PCS Stock, par value $1.00 per share, of
\n Sprint (“Sprint Series 1 PCS Stock”) issued and outstanding immediately
\n prior to the Effective Time will be converted into the right to receive (A)
\n one share of MCI WorldCom Series 1 PCS Stock and (B) that number of shares
\n of MCI WorldCom Common Stock equal to the PCS Exchange Ratio (collectively,
\n the “Series 1 PCS Merger Consideration”);<\/p>\n
(vi) each share of Series 2 PCS Stock, par value $1.00 per share, of
\n Sprint (“Sprint Series 2 PCS Stock”) issued and outstanding immediately
\n prior to the Effective Time will be converted into the right to receive (A)
\n one share of MCI WorldCom Series 2 PCS Stock and (B) a number of shares of
\n MCI WorldCom Series 2 Common Stock equal to the PCS Exchange Ratio
\n (collectively, the “Series 2 PCS Merger Consideration”);<\/p>\n
(vii) each share of Series 3 PCS Stock, par value $1.00 per share, of
\n Sprint (“Sprint Series 3 PCS Stock” and, together with the Sprint Series 1
\n PCS Stock and the Sprint Series 2 PCS Stock, the “Sprint PCS Stock”) issued
\n and outstanding immediately prior to the Effective Time will be converted
\n into the right to receive (A) one share of MCI WorldCom Series 1 PCS Stock
\n and (B) a number of shares of MCI WorldCom Common Stock equal to the PCS
\n Exchange Ratio (collectively, the “Series 3 PCS Merger Consideration” and,
\n together with the Series 1 PCS Merger Consideration and the Series 2 PCS
\n Merger Consideration, the “PCS Stock Merger Consideration”);<\/p>\n
(viii) each share of Preferred Stock-First Series, Convertible, without
\n par value, of Sprint (“Sprint First Series Preferred Stock”) shall be
\n redeemed by Sprint prior to the Effective Time pursuant to Section 5.14;<\/p>\n
(ix) each share of Preferred Stock-Second Series, Convertible, without
\n par value, of Sprint (“Sprint Second Series Preferred Stock”) shall be
\n redeemed by Sprint prior to the Effective Time pursuant to Section 5.14;<\/p>\n
(x) each share of Preferred Stock-Fifth Series, without par value, of
\n Sprint (“Sprint Fifth Series Preferred Stock”) issued and outstanding
\n immediately prior to the Effective Time will be converted into the right to
\n receive one share of MCI WorldCom Series 5 Preferred Stock (the “Fifth
\n Series Preferred Merger Consideration”); and<\/p>\n
(xi) each share of Preferred Stock-Seventh Series, Convertible, without
\n par value, of Sprint (“Sprint Seventh Series Preferred Stock” and, together
\n with the Sprint First Series Preferred Stock, the Sprint Second Series
\n Preferred Stock and the Sprint Fifth Series Preferred Stock, the “Sprint
\n Preferred Stock”) issued and outstanding immediately prior to the Effective
\n Time will be converted into the right to receive one share of MCI WorldCom
\n Series 7 Preferred Stock (the “Seventh Series Preferred Merger
\n Consideration”).<\/p>\n
The Sprint Class A Common Stock, the Sprint FON Stock and the Sprint PCS
\nStock are referred to herein collectively as the “Sprint Common Stock”. The
\nSprint Common Stock and the Sprint Preferred Stock are referred to herein
\ncollectively as the “Sprint Capital Stock”. Shares of Sprint Capital Stock that
\nare convertible by the holders thereof or by Sprint into a different class or
\nseries of Sprint Capital Stock pursuant to the terms of Sprint’s articles of
\nincorporation are referred to herein collectively as the “Sprint Conversion
\nSecurities”.<\/p>\n
1-4<\/p>\n
The Series 1 FON Merger Consideration and the Series 3 FON Merger
\nConsideration are referred to herein collectively as the “FON Stock Merger
\nConsideration”. The Fifth Series Preferred Merger Consideration and the Seventh
\nSeries Preferred Merger Consideration are referred to collectively herein as
\nthe “Preferred Stock Merger Consideration”. The Series FT Merger Consideration,
\nthe Series DT Merger Consideration, the FON Stock Merger Consideration, the PCS
\nStock Merger Consideration and the Preferred Stock Merger Consideration are
\nreferred to herein collectively as the “Merger Consideration”.<\/p>\n
(c) As a result of the Merger and without any action on the part of the
\nholders thereof, at the Effective Time, all shares of Sprint Capital Stock
\nshall cease to be outstanding and shall be canceled and retired and shall cease
\nto exist, and each holder of a certificate which immediately prior to the
\nEffective Time represented any such shares of Sprint Capital Stock (a
\n“Certificate”) shall thereafter cease to have any rights with respect to such
\nshares of Sprint Capital Stock, except the right to receive the applicable
\nMerger Consideration and any cash in lieu of fractional shares of applicable
\nMCI WorldCom Capital Stock to be issued in consideration therefor and any
\ndividends or other distributions to which holders of Sprint Capital Stock
\nbecome entitled all in accordance with Article II upon the surrender of such
\ncertificate.<\/p>\n
(d) Each share of Sprint Capital Stock issued and owned or held by MCI
\nWorldCom or Sprint at the Effective Time shall, by virtue of the Merger, cease
\nto be outstanding and shall be canceled and retired and no stock of MCI
\nWorldCom or other consideration shall be delivered in exchange therefor.<\/p>\n
(e) (i) Notwithstanding anything in this Agreement to the contrary and
\nunless provided for by applicable law, shares of Sprint Series FT Common Stock,
\nSprint Series DT Common Stock, Sprint Series 3 FON Stock, Sprint Series 2 PCS
\nStock, Sprint Series 3 PCS Stock, Sprint Fifth Series Preferred Stock and
\nSprint Seventh Series Preferred Stock that are issued and outstanding
\nimmediately prior to the Effective Time and that are owned by stockholders who
\nhave properly perfected their rights of appraisal within the meaning of Section
\n17-6712 of the KGCC (the “Sprint Dissenting Shares”) shall not be converted
\ninto the right to receive the Series FT Merger Consideration, the Series DT
\nMerger Consideration, the Series 3 FON Merger Consideration, the Series 2 PCS
\nMerger Consideration, the Series 3 PCS Merger Consideration, the Fifth Series
\nPreferred Merger Consideration and the Seventh Series Preferred Merger
\nConsideration, respectively, unless and until such stockholders shall have
\nfailed to perfect their right of payment under applicable law, but, instead,
\nthe holders thereof shall be entitled to payment of the appraised value of such
\nSprint Dissenting Shares in accordance with Section 17-6712 of the KGCC. If any
\nsuch holder shall have failed to perfect or shall have effectively withdrawn or
\nlost such right of appraisal, each share of Sprint Series FT Common Stock,
\nSprint Series DT Common Stock, Sprint Series 3 FON Stock, Sprint Series 2 PCS
\nStock, Sprint Series 3 PCS Stock, Sprint Fifth Series Preferred Stock and
\nSprint Seventh Series Preferred Stock held by such stockholder shall thereupon
\nbe deemed to have been converted into the right to receive and become
\nexchangeable for, at the Effective Time, the Series FT Merger Consideration,
\nthe Series DT Merger Consideration, the Series 3 FON Merger Consideration, the
\nSeries 2 PCS Merger Consideration, the Series 3 PCS Merger Consideration, the
\nFifth Series Preferred Merger Consideration and the Seventh Series Preferred
\nMerger Consideration, respectively, in the manner provided for in Section
\n1.8(b).<\/p>\n
(ii) Sprint shall give MCI WorldCom (A) prompt notice of any objections
\nfiled pursuant to Section 17-6712 of the KGCC received by Sprint, withdrawals
\nof such objections and any other instruments served in connection with such
\nobjections pursuant to the KGCC and received by Sprint and (B) the opportunity
\nto direct all negotiations and proceedings with respect to objections under the
\nKGCC consistent with the obligations of Sprint thereunder. Sprint shall not,
\nexcept with the prior written consent of MCI WorldCom, (x) make any payment
\nwith respect to any such objection, (y) offer to settle or settle any such
\nobjection or (z) waive any failure to timely deliver a written objection in
\naccordance with the KGCC.<\/p>\n
(f) (i) Notwithstanding anything in this Agreement to the contrary and
\nunless provided for by applicable law, holders of shares of MCI WorldCom Series
\nB Preferred Stock that are issued and outstanding immediately prior to the
\nEffective Time and that are owned by stockholders who have properly perfected
\ntheir rights of<\/p>\n
1-5<\/p>\n
appraisal within the meaning of Section 14-2-1301 et seq. of the GBCC (the “MCI
\nWorldCom Dissenting Shares”) shall be entitled to payment of the fair value of
\nsuch MCI WorldCom Dissenting Shares determined in accordance with Section 14-2-
\n1301 et seq. of the GBCC. If any such holder shall have failed to perfect or
\nshall have effectively withdrawn or lost such right of appraisal, each share of
\nMCI WorldCom Series B Preferred Stock held by such stockholder shall thereupon
\nbe deemed to remain issued and outstanding and unchanged as a validly issued,
\nfully paid and nonassessable share of capital stock of the Surviving
\nCorporation.<\/p>\n
(ii) MCI WorldCom shall give Sprint (A) prompt notice of MCI WorldCom’s
\nreceipt of any notice of intent to demand payment pursuant to Section 14-2-1301
\net seq. of the GBCC, withdrawals of such notice and any other instruments
\nserved in connection with such notice pursuant to the GBCC and received by MCI
\nWorldCom and (B) the opportunity to direct all negotiations and proceedings
\nwith respect to such notice under the GBCC consistent with the obligations of
\nMCI WorldCom thereunder.<\/p>\n
ARTICLE II<\/p>\n
Exchange of Certificates<\/p>\n
2.1 Exchange Agent. Prior to the Effective Time, MCI WorldCom shall appoint
\nThe Bank of New York or another commercial bank or trust company reasonably
\nsatisfactory to Sprint to act as exchange agent hereunder for the purpose of
\nexchanging Certificates for the applicable Merger Consideration (the “Exchange
\nAgent”). At or prior to the Effective Time, MCI WorldCom shall deposit with the
\nExchange Agent, in trust for the benefit of holders of shares of Sprint Capital
\nStock, certificates representing the applicable MCI WorldCom Capital Stock
\nissuable pursuant to Section 1.8 in exchange for outstanding shares of Sprint
\nCapital Stock in the Merger pursuant to Section 1.8. MCI WorldCom agrees to
\nmake available to the Exchange Agent from time to time as needed, cash
\nsufficient to pay cash in lieu of fractional shares pursuant to Section 2.5 and
\nany dividends and other distributions pursuant to Section 2.3.<\/p>\n
2.2 Exchange Procedures. As soon as reasonably practicable after the
\nEffective Time, the Surviving Corporation shall cause the Exchange Agent to
\nmail to each holder of a Certificate (i) a letter of transmittal which shall
\nspecify that delivery shall be effected, and risk of loss and title to the
\nCertificates shall pass, only upon delivery of the Certificates to the Exchange
\nAgent, and which letter shall be in such form and have such other provisions as
\nMCI WorldCom may reasonably specify and (ii) instructions for effecting the
\nsurrender of such Certificates in exchange for the applicable Merger
\nConsideration. Upon surrender of a Certificate to the Exchange Agent together
\nwith such letter of transmittal, duly executed and completed in accordance with
\nthe instructions thereto, and such other documents as may reasonably be
\nrequired by the Exchange Agent, the holder of such Certificate, if it is a
\nCertificate for Sprint Capital Stock shall be entitled to receive in exchange
\ntherefor (A) one or more shares of applicable MCI WorldCom Capital Stock
\nrepresenting, in the aggregate, the whole number of shares that such holder has
\nthe right to receive pursuant to Section 1.8, and (B) a check in the amount
\nequal to the cash that such holder has the right to receive pursuant to the
\nprovisions of this Article II including cash in lieu of any fractional shares
\nof applicable MCI WorldCom Capital Stock pursuant to Section 2.5 and any
\ndividends or other distributions pursuant to Section 2.3, and in each case the
\nCertificate so surrendered shall forthwith be canceled. No interest will be
\npaid or will accrue on any cash payable pursuant to Section 2.3 or Section 2.5.
\nIn the event of a transfer of ownership of Sprint Capital Stock which is not
\nregistered in the transfer records of Sprint, one or more shares of applicable
\nMCI WorldCom Capital Stock evidencing, in the aggregate, the proper number of
\nshares of applicable MCI WorldCom Capital Stock and a check in the proper
\namount of cash in lieu of any fractional shares of applicable MCI WorldCom
\nCapital Stock pursuant to Section 2.5 and any dividends or other distributions
\nto which such holder is entitled pursuant to Section 2.3, may be issued with
\nrespect to such Sprint Capital Stock to such a transferee if the Certificate
\nrepresenting such shares of Sprint Capital Stock is presented to the Exchange
\nAgent, accompanied by all documents required to evidence and effect such
\ntransfer and to evidence that any applicable stock transfer taxes have been
\npaid.<\/p>\n
1-6<\/p>\n
2.3 Distributions with Respect to Unexchanged Shares. No dividends or other
\ndistributions declared or made with respect to shares of MCI WorldCom Capital
\nStock with a record date after the Effective Time shall be paid to the holder
\nof any unsurrendered Certificate with respect to the shares of MCI WorldCom
\nCapital Stock that such holder would be entitled to receive upon surrender of
\nsuch Certificate and no cash payment in lieu of fractional shares of MCI
\nWorldCom Capital Stock shall be paid to any such holder pursuant to Section 2.5
\nuntil such holder shall surrender such Certificate in accordance with Section
\n2.2. Subject to the effect of applicable laws, following surrender of any such
\nCertificate, there shall be paid to such holder of shares of MCI WorldCom
\nCapital Stock issuable in exchange therefor, without interest, (a) promptly
\nafter the time of such surrender, the amount of any cash payable in lieu of
\nfractional shares of MCI WorldCom Capital Stock to which such holder is
\nentitled pursuant to Section 2.5 and the amount of dividends or other
\ndistributions with a record date after the Effective Time theretofore paid with
\nrespect to such whole shares of MCI WorldCom Capital Stock and (b) at the
\nappropriate payment date, the amount of dividends or other distributions with a
\nrecord date after the Effective Time but prior to such surrender and a payment
\ndate subsequent to such surrender payable with respect to such shares of MCI
\nWorldCom Capital Stock.<\/p>\n
2.4 No Further Ownership Rights in Sprint Capital Stock. All shares of MCI
\nWorldCom Capital Stock issued and cash paid upon conversion of shares of Sprint
\nCapital Stock in accordance with the terms of Article I and this Article II
\n(including any cash paid pursuant to Section 2.3 or 2.5) shall be deemed to
\nhave been issued or paid in full satisfaction of all rights pertaining to the
\nshares of Sprint Capital Stock, subject, however, to the Surviving
\nCorporation’s obligation to pay any dividends or make any other distributions
\nwith a record date prior to the Effective Time which may have been declared or
\nmade by Sprint on such shares of Sprint Capital Stock which remain unpaid at
\nthe Effective Time, and there shall be no further registration of transfers on
\nthe stock transfer books of the Surviving Corporation of the shares of Sprint
\nCapital Stock which were outstanding immediately prior to the Effective Time.
\nIf, after the Effective Time, Certificates are presented to the Surviving
\nCorporation or the Exchange Agent for any reason, they shall be canceled and
\nexchanged as provided in this Article II.<\/p>\n
2.5 No Fractional Shares of MCI WorldCom Capital Stock. (a) No certificates
\nor scrip or shares of MCI WorldCom Capital Stock representing fractional shares
\nof MCI WorldCom Capital Stock shall be issued upon the surrender for exchange
\nof Certificates and such fractional share interests will not entitle the owner
\nthereof to vote or to have any rights of a shareholder of MCI WorldCom or a
\nholder of shares of MCI WorldCom Capital Stock.<\/p>\n
(b) Notwithstanding any other provision of this Agreement, each holder of
\nshares of Sprint Common Stock exchanged pursuant to the Merger who would
\notherwise have been entitled to receive a fraction of a share of applicable MCI
\nWorldCom Capital Stock (after taking into account all Certificates delivered by
\nsuch holder) shall receive, in lieu thereof, cash (without interest) in an
\namount equal to the product of (i) such fractional part of a share of
\napplicable MCI WorldCom Capital Stock multiplied by (ii) the per share closing
\nprice of applicable MCI WorldCom Common Stock quoted on Nasdaq on the Closing
\nDate. The fractional share interests of MCI WorldCom Capital Stock will be
\naggregated, and no recordholder of Sprint Capital Stock will receive cash in an
\namount equal to or greater than the value of one full share of MCI WorldCom
\nCapital Stock determined as of the Effective Time.<\/p>\n
2.6 No Liability. None of Sprint, MCI WorldCom, the Surviving Corporation or
\nthe Exchange Agent shall be liable to any Person in respect of any Merger
\nConsideration, any dividends or distributions with respect thereto or any cash
\nin lieu of fractional shares of applicable MCI WorldCom Capital Stock, in each
\ncase delivered to a public official pursuant to any applicable abandoned
\nproperty, escheat or similar law. If any Certificate shall not have been
\nsurrendered prior to three years after the Effective Time (or immediately prior
\nto such earlier date on which any Merger Consideration, any dividends or
\ndistributions payable to the holder of such Certificate or any cash payable in
\nlieu of fractional shares of MCI WorldCom Capital Stock pursuant to this
\nArticle II, would otherwise escheat to or become the property of any
\nGovernmental Entity), any such Merger Consideration, dividends or distributions
\nin respect thereof or such cash shall, to the extent permitted by applicable
\nlaw, be delivered to MCI WorldCom, upon demand, and any holders of Sprint
\nCapital Stock who<\/p>\n
1-7<\/p>\n
have not theretofore complied with the provisions of this Article II shall
\nthereafter look only to MCI WorldCom for satisfaction of their claims for such
\nMerger Consideration, dividends or distributions in respect thereof or such
\ncash.<\/p>\n
2.7 Lost Certificates. If any Certificate shall have been lost, stolen or
\ndestroyed, upon the making of an affidavit of that fact by the Person claiming
\nsuch Certificate to be lost, stolen or destroyed and, if required by the
\nSurviving Corporation, the posting by such Person of a bond in such reasonable
\namount as the Surviving Corporation may direct as indemnity against any claim
\nthat may be made against it with respect to such Certificate, the Exchange
\nAgent will deliver in exchange for such lost, stolen or destroyed Certificate
\nthe applicable Merger Consideration with respect to the shares of Sprint
\nCapital Stock formerly represented thereby, any cash in lieu of fractional
\nshares of MCI WorldCom Capital Stock, and unpaid dividends and distributions on
\nshares of MCI WorldCom Capital Stock deliverable in respect thereof, pursuant
\nto this Agreement.<\/p>\n
2.8 Withholding Rights. The Surviving Corporation shall be entitled to
\ndeduct and withhold from the consideration otherwise payable pursuant to this
\nAgreement to any holder of shares of Sprint Capital Stock such amounts as it is
\nrequired to deduct and withhold with respect to the making of such payment
\nunder the Code and the rules and regulations promulgated thereunder, or any
\nprovision of state, local or foreign tax law. To the extent that amounts are so
\nwithheld by the Surviving Corporation such withheld amounts shall be treated
\nfor all purposes of this Agreement as having been paid to the holder of the
\nshares of Sprint Capital Stock in respect of which such deduction and
\nwithholding was made by the Surviving Corporation.<\/p>\n
2.9 Stock Transfer Books. At the close of business, New York City time, on
\nthe day the Effective Time occurs, the stock transfer books of Sprint shall be
\nclosed and there shall be no further registration of transfers of shares of
\nSprint Capital Stock thereafter on the records of Sprint. From and after the
\nEffective Time, the holders of Certificates shall cease to have any rights with
\nrespect to such shares of Sprint Capital Stock formerly represented thereby,
\nexcept as otherwise provided herein or by law. On or after the Effective Time,
\nany Certificates presented to the Exchange Agent or MCI WorldCom for any reason
\nshall be converted into the Merger Consideration with respect to the shares of
\nSprint Capital Stock formerly represented thereby, any cash in lieu of
\nfractional shares of MCI WorldCom Capital Stock to which the holders thereof
\nare entitled pursuant to Section 2.5 and any dividends or other distributions
\nto which the holders thereof are entitled pursuant to Section 2.3.<\/p>\n
ARTICLE III<\/p>\n
Representations and Warranties<\/p>\n
3.1 Representations and Warranties of Sprint. Except as disclosed in the
\nSprint SEC Reports filed and publicly available prior to the date of this
\nAgreement (the “Sprint Filed SEC Reports”) or as set forth in the Sprint
\nDisclosure Schedule delivered by Sprint to MCI WorldCom prior to the execution
\nof this Agreement (the “Sprint Disclosure Schedule”), Sprint represents and
\nwarrants to MCI WorldCom as follows:<\/p>\n
(a) Organization, Standing and Power. Each of Sprint and its Significant
\nSubsidiaries is a corporation or other legal entity duly organized or formed,
\nvalidly existing and in good standing under the laws of its jurisdiction of
\nincorporation or organization, has all requisite corporate, partnership or
\nsimilar power and authority to own, lease and operate its properties and to
\ncarry on its business as now being conducted and is duly qualified and in good
\nstanding to do business in each jurisdiction in which the nature of its
\nbusiness or the ownership or leasing of its properties makes such qualification
\nnecessary other than in such jurisdictions where the failure so to qualify or
\nto be in good standing is not reasonably likely, individually or in the
\naggregate, to have a Material Adverse Effect on Sprint. The copies of the
\narticles of incorporation and by-laws of Sprint which were previously furnished
\nto MCI WorldCom are true, complete and correct copies of such documents as in
\neffect on the date of this Agreement.<\/p>\n
1-8<\/p>\n
(b) Capital Structure. (i) As of September 30, 1999, the authorized capital
\nstock of Sprint consisted of (A) 100,000,000 shares of Sprint Series FT Common
\nStock, of which 43,118,018 shares were outstanding, (B) 100,000,000 shares of
\nSprint Series DT Common Stock, of which 43,118,018 shares were outstanding, (C)
\n2,500,000,000 shares of Sprint Series 1 FON Stock, of which 696,949,268 shares
\nwere outstanding, (D) 500,000,000 shares of Sprint Series 2 FON Stock, of which
\nno shares were outstanding, (E) 1,200,000,000 shares of Sprint Series 3 FON
\nStock, of which 88,111,036 shares were outstanding, (F) 1,250,000,000 shares of
\nSprint Series 1 PCS Stock, of which 198,422,792 shares were outstanding, (G)
\n500,000,000 shares of Sprint Series 2 PCS Stock, of which 219,393,844 shares
\nwere outstanding, (H) 600,000,000 shares of Sprint Series 3 PCS Stock, of which
\n13,089,418 shares were outstanding, and (I) 20,000,000 shares of Preferred
\nStock, without par value, of which (I) 1,742,853 shares have been designated as
\nSprint First Series Preferred Stock, of which 36,150 shares were outstanding,
\n(II) 8,758,472 shares have been designated as Sprint Second Series Preferred
\nStock, of which 219,045 shares were outstanding, (III) 95 shares have been
\ndesignated as Sprint Fifth Series Preferred Stock, of which 95 shares were
\noutstanding, (IV) 1,500,000 shares of Preferred Stock-Sixth Series, Junior
\nParticipating, without par value, have been designated and reserved for
\nissuance upon exercise of the rights (the “Sprint Rights”) distributed to
\nholders of Sprint FON Stock and Sprint Class A Common Stock pursuant to the
\nRights Agreement dated as of November 23, 1998, between Sprint and UMB Bank,
\nN.A., as rights agent (the “Sprint Rights Agreement”), (V) 1,250,000 shares of
\nPreferred Stock-Eighth Series, Junior Participating, without par value, have
\nbeen designated and reserved for issuance upon exercise of the Sprint Rights
\ndistributed to holders of Sprint PCS Stock and Sprint Class A Common Stock
\npursuant to the Sprint Rights Agreement and (VI) 300,000 shares have been
\ndesignated as Sprint Seventh Series Preferred Stock, of which 246,766 shares
\nwere outstanding. As of September 30, 1999, 2,409,990 shares of Sprint Series 1
\nFON Stock and 67,927 shares of Sprint Series 1 PCS Stock were held by Sprint in
\nits treasury. Since September 30, 1999 to the date of this Agreement, there
\nhave been no issuances of shares of the capital stock of Sprint or any other
\nsecurities of Sprint other than issuances of shares (and accompanying Sprint
\nRights) pursuant to options or rights outstanding as of September 30, 1999
\nunder the Benefit Plans of Sprint or pursuant to the conversion of the Sprint
\nConversion Securities. All issued and outstanding shares of the capital stock
\nof Sprint are duly authorized, validly issued, fully paid and nonassessable,
\nand no class of capital stock is entitled to preemptive rights. There were
\noutstanding as of September 30, 1999 no options, warrants or other rights to
\nacquire capital stock from Sprint other than (v) shares of Sprint Capital Stock
\nissuable upon conversion of the Sprint Conversion Securities, (w) 12,452,831
\nshares of Sprint Series 2 PCS Stock reserved for future issuance upon the
\nexercise of warrants (“Warrants”) issued pursuant to the terms of the Warrant
\nAgreements, each dated as of November 23, 1998 between Sprint, on the one hand,
\nand Cox Teleport Partners, Inc., Cox Communications, Inc., Comcast Telephony
\nServices Holdings, Inc., TCI Wireless Holdings, Inc. and TCI Spectrum
\nInvestment, Inc., on the other hand, (x) the Sprint Rights, (y) options
\nrepresenting in the aggregate the right to purchase 54,628,805 shares of Sprint
\nFON Stock and 21,525,703 shares of Sprint PCS Stock under Sprint’s 1985 Stock
\nOption Plan, Sprint’s 1990 Stock Option Plan, Sprint’s Management Incentive
\nStock Option Plan, Sprint’s 1997 Long-Term Stock Incentive Program, Sprint’s
\nLong-Term Incentive Compensation Plan, the Amended and Restated Centel Director
\nStock Option Plan and the Amended and Restated Centel Stock Option Plan
\n(collectively with Sprint’s 1990 Restricted Stock Plan, the “Sprint Stock
\nOption Plans”), and (z) rights to purchase shares of Sprint Common Stock under
\nSprint’s Employees Stock Purchase Plan. Sprint has delivered to MCI WorldCom a
\ncomplete and correct list, as of September 30, 1999, of the number of shares of
\nSprint Common Stock subject to outstanding stock option or other rights to
\npurchase or receive Sprint Common Stock granted under (i) the Sprint Stock
\nOption Plans (collectively, “Sprint Stock Options”) and (ii) the Warrants and
\nthe exercise prices thereof. No options or warrants or other rights to acquire
\ncapital stock from Sprint have been issued or granted since September 30, 1999
\nto the date of this Agreement.<\/p>\n
(ii) As of the date of this Agreement, no bonds, debentures, notes or other
\nindebtedness of Sprint having the right to vote on any matters on which
\nstockholders may vote (“Sprint Voting Debt”) are issued or outstanding.<\/p>\n
(iii) Except as otherwise set forth in this Section 3.1(b) and as
\ncontemplated by Section 5.6, as of the date of this Agreement, there are no
\nsecurities, options, warrants, calls, rights, commitments, agreements,<\/p>\n
1-9<\/p>\n
arrangements or undertakings of any kind to which Sprint or any of its
\nSubsidiaries is a party or by which any of them is bound obligating Sprint or
\nany of its Subsidiaries to issue, deliver or sell, or cause to be issued,
\ndelivered or sold, additional shares of capital stock or other voting
\nsecurities of Sprint or any of its Subsidiaries or obligating Sprint or any of
\nits Subsidiaries to issue, grant, extend or enter into any such security,
\noption, warrant, call, right, commitment, agreement, arrangement or
\nundertaking. As of the date of this Agreement, there are no outstanding
\nobligations of Sprint or any of its Subsidiaries to repurchase, redeem or
\notherwise acquire any shares of capital stock of Sprint or any of its
\nSubsidiaries.<\/p>\n
(iv) Exhibit 21 to Sprint’s Annual Report on Form 10-K for the fiscal year
\nended December 31, 1998 (the “Sprint 1998 10-K”), sets forth each Significant
\nSubsidiary of Sprint as of the date hereof. As of the date hereof, all the
\noutstanding shares of capital stock of, or other equity interests in, each
\nSignificant Subsidiary of Sprint have been validly issued and are fully paid
\nand nonassessable and are owned directly or indirectly by Sprint, free and
\nclear of all pledges, claims, liens, charges, encumbrances and security
\ninterests of any kind or nature whatsoever (collectively, “Liens”) and free of
\nany restriction on the right to vote, sell or otherwise dispose of such capital
\nstock or other ownership interests. Except for the capital stock or other
\nownership interests of its Subsidiaries, as of the date hereof, Sprint does not
\nbeneficially own directly or indirectly any capital stock, membership interest,
\npartnership interest, joint venture interest or other equity interest in any
\nPerson which constitutes a Material Investment.<\/p>\n
(c) Authority; No Conflicts. (i) Sprint has all requisite corporate power
\nand authority to enter into this Agreement and to consummate the transactions
\ncontemplated hereby, subject in the case of the consummation of the Merger to
\nthe adoption of this Agreement by the Required Sprint Vote. The execution and
\ndelivery of this Agreement and the consummation of the transactions
\ncontemplated hereby have been duly authorized by all necessary corporate action
\non the part of Sprint, subject to the adoption of this Agreement by the
\nRequired Sprint Vote. This Agreement has been duly executed and delivered by
\nSprint and constitutes a valid and binding agreement of Sprint, enforceable
\nagainst it in accordance with its terms.<\/p>\n
(ii) The execution and delivery of this Agreement do not or will not, as the
\ncase may be, and the consummation of the Merger and the other transactions
\ncontemplated hereby will not, subject to the adoption of this Agreement by the
\nRequired Sprint Vote, conflict with, or result in any violation of, or
\nconstitute a default (with or without notice or lapse of time, or both) under,
\nor give rise to a right of termination, amendment, cancelation or acceleration
\nof any obligation or the loss of a material benefit under, or the creation of a
\nlien, pledge, security interest, charge or other encumbrance on any assets (any
\nsuch conflict, violation, default, right of termination, amendment, cancelation
\nor acceleration, loss or creation, a “Violation”) pursuant to: (A) any
\nprovision of the articles of incorporation or by-laws of Sprint or the
\ngoverning documents of any Subsidiary of Sprint, or (B) except as is not
\nreasonably likely, individually or in the aggregate, to have a Material Adverse
\nEffect on Sprint and subject to obtaining or making the consents, approvals,
\norders, authorizations, registrations, declarations and filings referred to in
\nparagraph (iii) below, any loan or credit agreement, note, mortgage, bond,
\nindenture, lease, benefit plan or other agreement, obligation, instrument,
\npermit, concession, franchise, license, judgment, order, decree, statute, law,
\nordinance, rule or regulation applicable to Sprint or any Subsidiary of Sprint
\nor their respective properties or assets.<\/p>\n
(iii) No consent, approval, order or authorization of, or registration,
\ndeclaration or filing with, any supranational, national, state, municipal or
\nlocal government, any instrumentality, subdivision, court, administrative
\nagency or commission or other authority thereof, or any quasi-governmental or
\nprivate body exercising any regulatory, taxing, importing or other governmental
\nor quasi-governmental authority, including the European Union (a “Governmental
\nEntity”), is required by or with respect to Sprint or any Subsidiary of Sprint
\nin connection with the execution and delivery of this Agreement by Sprint or
\nthe consummation of the Merger and the other transactions contemplated hereby,
\nexcept for those required under or in relation to (A) the Hart-Scott-Rodino
\nAntitrust Improvements Act of 1976, as amended, and the rules and regulations
\npromulgated thereunder (the “HSR Act”) and Council Regulation (EEC) No. 4064\/89
\n(“Regulation 4064\/89”), (B) the Communications Act of 1934, as amended, and the
\nrules and regulations promulgated thereunder (the<\/p>\n
1-10<\/p>\n
“Communications Act”), and any other rules, regulations, practices and policies
\npromulgated by the Federal Communications Commission (“FCC”), (C) state
\nsecurities or “blue sky” laws (the “Blue Sky Laws”), (D) the Securities Act of
\n1933, as amended, and the rules and regulations promulgated thereunder (the
\n“Securities Act”), (E) the Securities Exchange Act of 1934, as amended, and the
\nrules and regulations promulgated thereunder (the “Exchange Act”), (F) the KGCC
\nwith respect to the filing of the Kansas Certificate of Merger and the GBCC
\nwith respect to the filing of the Georgia Certificate of Merger, (G) laws,
\nrules, regulations, practices and orders of any state public service
\ncommissions (“PUCs”), foreign telecommunications regulatory agencies or similar
\nstate or foreign regulatory bodies, (H) rules and regulations of the New York
\nStock Exchange, Inc. (“NYSE”), (I) antitrust or other competition laws of other
\njurisdictions, and (J) such consents, approvals, orders, authorizations,
\nregistrations, declarations and filings the failure of which to make or obtain
\nis not reasonably likely, individually or in the aggregate, to have a Material
\nAdverse Effect on Sprint. Consents, approvals, orders, authorizations,
\nregistrations, declarations and filings required under or in relation to any of
\nthe foregoing clauses (A) through (G) and clause (I) are hereinafter referred
\nto as “Required Consents”.<\/p>\n
(d) Reports and Financial Statements. Sprint has filed all reports,
\nschedules, forms, statements and other documents required to be filed by it
\nwith the Securities and Exchange Commission (the “SEC”) since January 1, 1998
\n(collectively, including all exhibits thereto, the “Sprint SEC Reports”). No
\nSignificant Subsidiary of Sprint is required to file any form, report or other
\ndocument with the SEC. None of the Sprint SEC Reports when filed contained any
\nuntrue statement of a material fact or omitted to state a material fact
\nrequired to be stated therein or necessary to make the statements therein, in
\nlight of the circumstances under which they were made, not misleading. Each of
\nthe financial statements (including the related notes) included in the Sprint
\nSEC Reports presents fairly, in all material respects, the consolidated
\nfinancial position and consolidated results of operations and cash flows of
\nSprint and its Subsidiaries as of the respective dates or for the respective
\nperiods set forth therein, all in conformity with United States generally
\naccepted accounting principles (“U.S. GAAP”) consistently applied during the
\nperiods involved except as otherwise noted therein, and subject, in the case of
\nthe unaudited interim financial statements, to normal and recurring year-end
\nadjustments. All of such Sprint SEC Reports, as of their respective dates (and
\nas of the date of any amendment to the respective Sprint SEC Report), complied
\nas to form in all material respects with the applicable requirements of the
\nSecurities Act and the Exchange Act.<\/p>\n
(e) Information Supplied. (i) None of the information supplied or to be
\nsupplied by Sprint for inclusion or incorporation by reference in (A) the Form
\nS-4 to be filed with the SEC by MCI WorldCom in connection with the issuance of
\nthe MCI WorldCom Capital Stock in the Merger will, at the time the Form S-4
\nbecomes effective under the Securities Act, contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated therein
\nor necessary to make the statements therein not misleading and (B) the Joint
\nProxy Statement\/Prospectus included in the Form S-4 related to the Sprint
\nStockholders Meeting and the MCI WorldCom Shareholders Meeting and the MCI
\nWorldCom Capital Stock to be issued in the Merger will, on the date it is first
\nmailed to Sprint stockholders or MCI WorldCom shareholders or at the time of
\nthe Sprint Stockholders Meeting or the MCI WorldCom Shareholders Meeting,
\ncontain any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary in order to make the statements
\ntherein, in light of the circumstances under which they were made, not
\nmisleading. The Joint Proxy Statement\/Prospectus will comply as to form in all
\nmaterial respects with the requirements of the Exchange Act.<\/p>\n
(ii) Notwithstanding the foregoing provisions of this Section 3.1(e), no
\nrepresentation or warranty is made by Sprint with respect to statements made or
\nincorporated by reference in the Form S-4 or the Joint Proxy
\nStatement\/Prospectus based on information supplied by MCI WorldCom for
\ninclusion or incorporation by reference therein.<\/p>\n
(f) Litigation. There is no suit, action, proceeding, claim or investigation
\npending or, to the Knowledge of Sprint, threatened against or affecting Sprint
\nor any of its Subsidiaries that is reasonably likely, individually or in the
\naggregate, to have a Material Adverse Effect on Sprint nor is there any
\njudgment, decree, injunction,<\/p>\n
1-11<\/p>\n
rule or order of any Governmental Entity or arbitrator outstanding against
\nSprint or any of its Subsidiaries having, or that is reasonably likely,
\nindividually or in the aggregate, to have a Material Adverse Effect on Sprint.<\/p>\n
(g) Compliance with Applicable Laws. Sprint and its Subsidiaries hold all
\npermits, licenses, variances, exemptions, orders, registrations and approvals
\nof all Governmental Entities which are required for the operation of the
\nbusiness of Sprint and its Subsidiaries taken as a whole (the “Sprint
\nPermits”), except where the failure to have any such Sprint Permits is not
\nreasonably likely, individually or in the aggregate, to have a Material Adverse
\nEffect on Sprint. Sprint and its Subsidiaries are in compliance with the terms
\nof the Sprint Permits and all applicable statutes, laws, ordinances, rules and
\nregulations, except where the failure so to comply is not reasonably likely,
\nindividually or in the aggregate, to have a Material Adverse Effect on Sprint.
\nSubject to obtaining the Required Consents, the Merger, in and of itself, would
\nnot cause the revocation or cancelation of any Sprint Permit that is reasonably
\nlikely, individually or in the aggregate, to have a Material Adverse Effect on
\nSprint.<\/p>\n
(h) State Takeover Statutes; Approvals. Each of the Board of Directors of
\nSprint (including the disinterested directors thereof) and the Capital Stock
\nCommittee of such Board of Directors has approved and recommended the terms of
\nthis Agreement and the consummation of the Merger and the other transactions
\ncontemplated by this Agreement and such approval of the Board of Directors of
\nSprint constitutes approval of the Merger and the other transactions
\ncontemplated by this Agreement by the Board of Directors of Sprint to the
\nextent applicable under the provisions of Section 17-1286 et seq. and Section
\n17-12,100 et seq. of the KGCC and Article Seventh of Sprint’s articles of
\nincorporation and represents all the action necessary to ensure that Section
\n17-1286 et seq. and Section 17-12,100 et seq. of the KGCC and Article Seventh
\nof Sprint’s articles of incorporation do not apply to MCI WorldCom in
\nconnection with the Merger and the other transactions contemplated by this
\nAgreement. No other Kansas or Georgia state takeover statute is applicable to
\nSprint in connection with this Agreement, the Merger or the other transactions
\ncontemplated hereby. Other than those that have been made prior to the date
\nhereof, no approval or determination of the Board of Directors of Sprint or any
\ncommittee thereof is required with respect to any class or series of Sprint
\nCapital Stock or under Sprint’s articles of incorporation, Bylaws or governance
\npolicies to approve this Agreement or any of the transactions contemplated
\nhereby.<\/p>\n
(i) Intellectual Property; Year 2000. (i) Sprint and its Subsidiaries own,
\nor are validly licensed or otherwise have the right to use, all patents, patent
\nrights, trademarks, trade secrets, trade names, service marks, copyrights and
\nother proprietary intellectual property rights and computer programs (the
\n“Intellectual Property Rights”) used in the business of Sprint and its
\nSubsidiaries, except for such Intellectual Property Rights the failure of which
\nto own, license or otherwise have the right to use is not reasonably likely,
\nindividually or in the aggregate, to have a Material Adverse Effect on Sprint.<\/p>\n
(ii) To the Knowledge of Sprint, neither Sprint nor any of its Subsidiaries
\nhas interfered with, infringed upon, misappropriated or otherwise come into
\nconflict with any Intellectual Property Rights or other proprietary information
\nof any other Person, except for any such interference, infringement,
\nmisappropriation or other conflict which is not reasonably likely, individually
\nor in the aggregate, to have a Material Adverse Effect on Sprint. To the
\nKnowledge of Sprint, neither Sprint nor any of its Subsidiaries has received
\nany written charge, complaint, claim, demand or notice alleging any such
\ninterference, infringement, misappropriation or other conflict (including any
\nclaim that Sprint or any such Subsidiary must license or refrain from using any
\nIntellectual Property Rights or other proprietary information of any other
\nPerson) which has not been settled or otherwise fully resolved, except with
\nrespect to any such interference, infringement, misappropriation or other
\nconflict which is not reasonably likely, individually or in the aggregate, to
\nhave a Material Adverse Effect on Sprint. To the Knowledge of Sprint, no other
\nPerson has interfered with, infringed upon, misappropriated or otherwise come
\ninto conflict with any Intellectual Property Rights of Sprint or any of its
\nSubsidiaries, except for any such interference, infringement, misappropriation
\nor other conflict which is not reasonably likely, individually or in the
\naggregate, to have a Material Adverse Effect on Sprint.<\/p>\n
1-12<\/p>\n
(iii) As of the date of this Agreement, Sprint and its Subsidiaries have
\nundertaken a concerted effort to ensure that all of the computer software,
\ncomputer firmware, computer hardware, and other similar or related items of
\nautomated, computerized, and\/or software system(s) that are to be used or
\nrelied on by Sprint or any of its Subsidiaries in the conduct of their
\nrespective businesses will not malfunction, will not cease to function, will
\nnot generate incorrect data, and will not provide incorrect results when
\nprocessing, providing and\/or receiving (i) date-related data into and between
\nthe years 1999 and 2000 and (ii) date-related data in connection with any valid
\ndate in the twentieth and twenty-first centuries. As of the date of this
\nAgreement, Sprint reasonably believes that such effort will be successful.<\/p>\n
(j) Absence of Certain Changes or Events. Except for liabilities incurred in
\nconnection with this Agreement or the transactions contemplated hereby, since
\nJune 30, 1999, Sprint and its Subsidiaries have conducted their business only
\nin the ordinary course, and there has not been (i) any Material Adverse Change
\nin Sprint, (ii) any declaration, setting aside or payment of any dividend or
\nother distribution (whether in cash, stock or property) with respect to any of
\nSprint’s capital stock, other than regular quarterly cash dividends of $0.125
\nper share of Sprint FON Stock and a corresponding cash dividend on the Class A
\nCommon Stock and dividends payable on Sprint Preferred Stock in accordance with
\ntheir terms as of the date of this Agreement, (iii) any split, combination or
\nreclassification of any of Sprint’s capital stock or any issuance or the
\nauthorization of any issuance of any other securities in respect of, in lieu of
\nor in substitution for shares of Sprint’s capital stock, (iv) (A) any granting
\nby Sprint or any of its Subsidiaries to any current or former director,
\nexecutive officer or other key employee of Sprint or its Subsidiaries of any
\nincrease in compensation, bonus or other benefits, except for normal increases
\nin the ordinary course of business consistent with past practice or as was
\nrequired under any employment agreements in effect as of the date of the most
\nrecent audited financial statements included in the Sprint Filed SEC Reports,
\n(B) any granting by Sprint or any of its Subsidiaries to any such current or
\nformer director, executive officer or key employee of any increase in severance
\nor termination pay or (C) any entry by Sprint or any of its Subsidiaries into,
\nor any amendment of, any employment, deferred compensation, consulting,
\nseverance, termination or indemnification agreement with any such current or
\nformer director, executive officer or key employee, other than in the ordinary
\ncourse of business consistent with past practice, (v) except insofar as may be
\nrequired by a change in U.S. GAAP, any change in accounting methods, principles
\nor practices by Sprint materially affecting its consolidated financial position
\nor consolidated results of operations or (vi) except insofar as MCI WorldCom
\nhas given its consent, which consent shall not be unreasonably withheld or
\ndelayed, any tax election (or settlement or compromise of any material income
\ntax liability) that is reasonably likely, individually or in the aggregate, to
\nhave a Material Adverse Effect on Sprint.<\/p>\n
(k) Vote Required. The affirmative vote of the holders of shares
\nrepresenting a majority of the total voting power of Sprint Common Stock and
\nSprint Preferred Stock entitled to vote at the Sprint Stockholders Meeting to
\nadopt this Agreement voting together as a single class (the “Required Sprint
\nVote”) is the only vote or approval of the holders of any class or series of
\ncapital stock of Sprint necessary to adopt this Agreement and to approve the
\ntransactions contemplated hereby.<\/p>\n
(l) Sprint Rights Agreement. No amendment to the Sprint Rights Agreement is
\nrequired to be made by Sprint in connection with the approval, execution or
\ndelivery of this Agreement or the consummation of the transactions contemplated
\nhereby.<\/p>\n
(m) Brokers or Finders. No agent, broker, investment banker, financial
\nadvisor or other firm or Person on behalf of Sprint is or will be entitled to
\nany broker’s or finder’s fee or any other similar commission or fee in
\nconnection with any of the transactions contemplated by this Agreement, except
\nWarburg Dillon Read LLC, whose fees and expenses will be paid by Sprint in
\naccordance with Sprint’s agreement with such firm, based upon arrangements made
\nby or on behalf of Sprint and previously disclosed to MCI WorldCom.<\/p>\n
(n) Opinion of Financial Advisor. Sprint has received the opinion of Warburg
\nDillon Read LLC, dated the date of this Agreement, to the effect that, as of
\nthe date hereof, (i) the FON Exchange Ratio was fair, from a financial point of
\nview, to the holders of each series of Sprint FON Stock, (ii) the consideration
\nto be received<\/p>\n
1-13<\/p>\n
by holders of each series of Sprint Common Stock in the Merger was fair, from a
\nfinancial point of view, to the holders of such series and (iii) the Merger
\nConsideration applicable to the Sprint Common Stock was fair, from a financial
\npoint of view, to the holders of Sprint Common Stock taken as a whole, a copy
\nof which opinion has been made available to MCI WorldCom.<\/p>\n
(o) Absence of Changes in Sprint’s Benefit Plans. Except as expressly
\npermitted by this Agreement, since the date of the most recent audited
\nfinancial statements included in the Sprint Filed SEC Reports, there has not
\nbeen any adoption or amendment in any material respect by Sprint or any of its
\nSubsidiaries of any of Sprint’s Benefit Plans, or any material change in any
\nactuarial or other assumption used to calculate funding obligations with
\nrespect to any Sprint pension plans, or any material change in the manner in
\nwhich contributions to any Sprint pension plans are made or the basis on which
\nsuch contributions are determined other than a change required under the terms
\nof such plans as in effect on the date hereof or as required by applicable law.<\/p>\n
(p) ERISA Compliance; No Parachute Payments. (i) With respect to Sprint’s
\nBenefit Plans, no liability has been incurred and to the Knowledge of Sprint
\nthere exists no condition or circumstances in connection with which Sprint or
\nany of its Subsidiaries could be subject to any liability that is reasonably
\nlikely, individually or in the aggregate, to have a Material Adverse Effect on
\nSprint, in each case under the Employee Retirement Income Security Act of 1974,
\nas amended (“ERISA”), the Code or any other applicable law.<\/p>\n
(ii) Each of Sprint’s Benefit Plans has been administered in accordance with
\nits terms, except for any failures so to administer any such Benefit Plan that
\nare not reasonably likely, individually or in the aggregate, to have a Material
\nAdverse Effect on Sprint. Sprint, its Subsidiaries and all Sprint’s Benefit
\nPlans are in compliance with the applicable provisions of ERISA, the Code and
\nall other applicable laws and the terms of all applicable collective bargaining
\nagreements, except for any failures to be in such compliance that are not
\nreasonably likely, individually or in the aggregate, to have a Material Adverse
\nEffect on Sprint.<\/p>\n
(iii) None of Sprint or any of its Subsidiaries sponsors or contributes to
\nany of Sprint’s Benefit Plans that is subject to Title IV of ERISA.<\/p>\n
(iv) Sprint and its Subsidiaries are in compliance with all Federal, state,
\nlocal and foreign requirements regarding employment, except for any failures to
\ncomply that are not reasonably likely, individually or in the aggregate, to
\nhave a Material Adverse Effect on Sprint. As of the date of this Agreement,
\nthere is no labor dispute, strike or work stoppage against Sprint or any of its
\nSubsidiaries pending or, to the Knowledge of Sprint, threatened which may
\ninterfere with the respective business activities of Sprint or any of its
\nSubsidiaries, except where such dispute, strike or work stoppage is not
\nreasonably likely, individually or in the aggregate, to have a Material Adverse
\nEffect on Sprint. As of the date of this Agreement, to the Knowledge of Sprint,
\nnone of Sprint, any of its Subsidiaries or any of their respective
\nrepresentatives or employees has committed any unfair labor practice in
\nconnection with the operation of the respective businesses of Sprint or any of
\nits Subsidiaries, and there is no action, charge or complaint against Sprint or
\nany of its Subsidiaries by the National Labor Relations Board or any comparable
\nGovernmental Entity pending or threatened in writing, in each case except where
\nsuch practices, actions, charges or complaints are not reasonably likely,
\nindividually or in the aggregate, to have a Material Adverse Effect on Sprint.<\/p>\n
(v) No employee of Sprint or its Subsidiaries will be entitled to any
\nadditional benefits or any acceleration of the time of payment or vesting of
\nany benefits under any of Sprint’s Benefit Plans as a result of the
\ntransactions contemplated by this Agreement. No amount payable, or economic
\nbenefit provided, by Sprint or its Subsidiaries (including any acceleration of
\nthe time of payment or vesting of any benefit) could be considered an “excess
\nparachute payment” under Section 280G of the Code. No Person is entitled to
\nreceive any additional payment from Sprint or its Subsidiaries or any other
\nPerson in the event that the excise tax of Section 4999 of the Code is imposed
\non such Person.<\/p>\n
1-14<\/p>\n
(q) Taxes. (i) (A) Each of Sprint and its Subsidiaries and each Sprint
\nConsolidated Group has timely filed or has caused to be timely filed all
\nmaterial tax returns and reports required to be filed by it or requests for
\nextensions to file such returns or reports have been timely filed, granted and
\nhave not expired, (B) all tax returns and reports filed by Sprint and each of
\nits Subsidiaries and each Sprint Consolidated Group are complete and accurate
\nin all respects and (C) Sprint and each of its Subsidiaries and each Sprint
\nConsolidated Group has paid (or Sprint or another member of such Sprint
\nConsolidated Group has paid on its behalf) all taxes shown as due on such
\nreturns and reports, and the reserve for current taxes shown on the most recent
\nfinancial statements contained in the Sprint Filed SEC Reports (in addition to
\nany reserve for deferred taxes established to reflect timing differences
\nbetween book and tax income) is adequate to cover all taxes payable by Sprint
\nand its Subsidiaries and each Sprint Consolidated Group for all taxable periods
\nand portions thereof through the date of such financial statements, except for
\nany such failure to file, incompleteness or inaccuracy, failure to pay, or
\ninadequacy of such reserve, that is not reasonably likely, individually or in
\nthe aggregate, to have a Material Adverse Effect on Sprint.<\/p>\n
(ii) No deficiencies for any taxes have been proposed, asserted or assessed
\nin writing against Sprint or any of its Subsidiaries or any Sprint Consolidated
\nGroup that are not adequately reserved for, except for deficiencies that are
\nnot reasonably likely, individually or in the aggregate, to have a Material
\nAdverse Effect on Sprint, and no requests for waivers of the time to assess any
\nsuch taxes have been granted or are pending (other than with respect to years
\nthat are currently under examination by the Internal Revenue Service or other
\napplicable taxing authorities). The statute of limitations on assessment or
\ncollection of any Federal taxes due from Sprint and its Subsidiaries has
\nexpired for all taxable years of Sprint and each of its Subsidiaries through
\n1985. The Federal income tax returns of Sprint and each of its Subsidiaries
\nhave been examined by and settled with the Internal Revenue Service for all
\nyears through 1987.<\/p>\n
(iii) Neither Sprint nor any of its Subsidiaries has taken or has agreed to
\ntake any action or has any Knowledge of any fact, agreement, plan or other
\ncircumstance that is reasonably likely to prevent the Merger from qualifying as
\na “reorganization” within the meaning of Section 368(a) of the Code.<\/p>\n
(iv) Neither Sprint nor any of its Subsidiaries has constituted either a
\n“distributing corporation” or a “controlled corporation” (within the meaning of
\nSection 355(a)(1)(A) of the Code) in a distribution of stock qualifying for
\ntax-free treatment under Section 355 of the Code (A) in the two years prior to
\nthe date of this Agreement or (B) in a distribution which could otherwise
\nconstitute part of a “plan” or series of “related transactions” (within the
\nmeaning of Section 355(e) of the Code) in conjunction with the Merger.<\/p>\n
(v) Sprint does not believe that it is a “United States real property
\nholding corporation” within the meaning of Section 897(c)(2) of the Code during
\nthe applicable period specified in Section 897(c)(1)(A)(ii) of the Code,
\nalthough it has not determined or established whether it will be a United
\nStates real property holding corporation in the future.<\/p>\n
(vi) Sprint has “nexus” for state tax law purposes in Kansas and
\nPennsylvania.<\/p>\n
(vii) As used in this Agreement, “taxes” shall include all (A) Federal,
\nstate, local or foreign income tax, property, sales, excise or other taxes or
\nsimilar governmental charges, including any interest, penalties or additions
\nwith respect thereto, (B) liability for the payment of the amounts described in
\nclause (A) as a result of being a member of an affiliated, consolidated,
\ncombined or unitary group, and (C) liability for the payment of any amounts as
\na result of being a party to any tax sharing agreement or as a result of any
\nexpress or implied obligation to indemnify any other Person with respect to the
\npayment of any amounts of the type described in clause (A) or (B).<\/p>\n
(viii) As used in this Agreement, “Sprint Consolidated Group” means any
\naffiliated group within the meaning of Section 1504(a) of the Code, in which
\nSprint (or any Subsidiary of Sprint) is or has ever been a member or any group
\nof corporations with which Sprint files, has filed or is or was required to
\nfile an affiliated, consolidated, combined, unitary or aggregate tax return.<\/p>\n
1-15<\/p>\n
3.2 Representations and Warranties of MCI WorldCom. Except as disclosed in
\nthe MCI WorldCom SEC Reports filed and publicly available prior to the date of
\nthis Agreement (the “MCI WorldCom Filed SEC Reports”) or as set forth in the
\nMCI WorldCom Disclosure Schedule delivered by MCI WorldCom to Sprint prior to
\nthe execution of this Agreement (the “MCI WorldCom Disclosure Schedule”), MCI
\nWorldCom represents and warrants to Sprint as follows:<\/p>\n
(a) Organization, Standing and Power. Each of MCI WorldCom and its
\nSignificant Subsidiaries is a corporation or other legal entity duly organized
\nor formed, validly existing and in good standing under the laws of its
\njurisdiction of incorporation or organization, has all requisite corporate,
\npartnership or similar power and authority to own, lease and operate its
\nproperties and to carry on its business as now being conducted and is duly
\nqualified and in good standing to do business in each jurisdiction in which the
\nnature of its business or the ownership or leasing of its properties makes such
\nqualification necessary other than in such jurisdictions where the failure so
\nto qualify or to be in good standing is not reasonably likely, individually or
\nin the aggregate, to have a Material Adverse Effect on MCI WorldCom. The copies
\nof the articles of incorporation and by-laws of MCI WorldCom which were
\npreviously furnished to Sprint are true, complete and correct copies of such
\ndocuments as in effect on the date of this Agreement.<\/p>\n
(b) Capital Structure. (i) As of September 30, 1999, the authorized capital
\nstock of MCI WorldCom consisted of (A) 5,000,000,000 shares of MCI WorldCom
\nCommon Stock of which 1,880,219,054 shares were outstanding and (B) 50,000,000
\nshares of Preferred Stock, par value $0.01 per share, of which (1) 94,992
\nshares have been designated as Series A 8% Cumulative Convertible Preferred
\nStock, of which no shares were outstanding, (2) 15,000,000 shares have been
\ndesignated Series B Convertible Preferred Stock (“MCI WorldCom Series B
\nPreferred Stock”), of which 11,190,244 shares were outstanding, (3) 3,750,000
\nshares have been designated Series C $2.25 Cumulative Convertible Exchangeable
\nPreferred Stock (“MCI WorldCom Series C Preferred Stock”), of which no shares
\nwere outstanding, and (4) 5,000,000 shares have been designated Series 3 Junior
\nParticipating Preferred Stock and reserved for issuance upon exercise of the
\nrights (the “MCI WorldCom Rights”) distributed to holders of MCI WorldCom
\nCommon Stock pursuant to the Rights Agreement dated as of August 25, 1996, as
\namended, between MCI WorldCom and The Bank of New York, as rights agent (the
\n“MCI WorldCom Rights Agreement”). As of September 30, 1999, 4,510,211 shares of
\nMCI WorldCom Common Stock were held by MCI WorldCom in its treasury. Since
\nSeptember 30, 1999 to the date of this Agreement, there have been no issuances
\nof shares of the capital stock of MCI WorldCom or any other securities of MCI
\nWorldCom other than issuances of shares (and accompanying MCI WorldCom Rights)
\npursuant to options or rights outstanding as of September 30, 1999 under the
\nBenefit Plans of MCI WorldCom or pursuant to MCI WorldCom’s acquisition of
\nSkyTel Communications, Inc. All issued and outstanding shares of the capital
\nstock of MCI WorldCom are duly authorized, validly issued, fully paid and
\nnonassessable, and no class of capital stock is entitled to preemptive rights.
\nThere were outstanding as of September 30, 1999 no options, warrants or other
\nrights to acquire capital stock from MCI WorldCom other than pursuant to MCI
\nWorldCom’s pending acquisitions as of such date. MCI WorldCom’s Benefit Plans
\nand MCI WorldCom’s convertible preferred stock. No options or warrants or other
\nrights to acquire capital stock from MCI WorldCom have been issued or granted
\nsince September 30, 1999 to the date of this Agreement other than pursuant to
\nMCI WorldCom’s acquisition of SkyTel Communications, Inc. or pursuant to MCI
\nWorldCom’s Benefit Plans. The shares of MCI WorldCom Capital Stock to be issued
\npursuant to this Agreement, when issued in accordance with the terms of this
\nAgreement, will be validly issued, fully paid and nonassessable, and no Person
\nwill have any preemptive right, subscription right or other purchase right in
\nrespect thereof other than pursuant to agreements with Sprint or any of its
\nSubsidiaries as in effect on the date hereof.<\/p>\n
(ii) As of the date of this Agreement, no bonds, debentures, notes or other
\nindebtedness of MCI WorldCom having the right to vote on any matters on which
\nshareholders may vote (“MCI WorldCom Voting Debt”) are issued or outstanding.<\/p>\n
(iii) Except as otherwise set forth in this Section 3.2(b), as of the date
\nof this Agreement, there are no securities, options, warrants, calls, rights,
\ncommitments, agreements, arrangements or undertakings of any kind to which MCI
\nWorldCom or any of its Subsidiaries is a party or by which any of them is bound
\nobligating<\/p>\n
1-16<\/p>\n
MCI WorldCom or any of its Subsidiaries to issue, deliver or sell, or cause to
\nbe issued, delivered or sold, additional shares of capital stock or other
\nvoting securities of MCI WorldCom or any of its Subsidiaries or obligating MCI
\nWorldCom or any of its Subsidiaries to issue, grant, extend or enter into any
\nsuch security, option, warrant, call, right, commitment, agreement, arrangement
\nor undertaking. As of the date of this Agreement, there are no outstanding
\nobligations of MCI WorldCom or any of its Subsidiaries to repurchase, redeem or
\notherwise acquire any shares of capital stock of MCI WorldCom or any of its
\nSubsidiaries.<\/p>\n
(iv) Exhibit 21 to MCI WorldCom’s Annual Report on Form 10-K for the fiscal
\nyear ended December 31, 1998 (the “MCI WorldCom 1998 10-K”), sets forth each
\nSignificant Subsidiary of MCI WorldCom as of the date hereof. As of the date
\nhereof, all the outstanding shares of capital stock of, or other equity
\ninterests in, each Significant Subsidiary of MCI WorldCom have been validly
\nissued and are fully paid and nonassessable and are owned directly or
\nindirectly by MCI WorldCom, free and clear of all Liens and free of any
\nrestriction on the right to vote, sell or otherwise dispose of such capital
\nstock or other ownership interests. Except for the capital stock or other
\nownership interests of its Subsidiaries, as of the date hereof, MCI WorldCom
\ndoes not beneficially own directly or indirectly any capital stock, membership
\ninterest, partnership interest, joint venture interest or other equity interest
\nin any Person which constitutes a Material Investment.<\/p>\n
(c) Authority; No Conflicts. (i) MCI WorldCom has all requisite corporate
\npower and authority to enter into this Agreement and to consummate the
\ntransactions contemplated hereby, subject in the case of the approval of this
\nAgreement and the MCI WorldCom Stock Issuance to obtaining the Required MCI
\nWorldCom Vote. The execution and delivery of this Agreement and the
\nconsummation of the transactions contemplated hereby have been duly authorized
\nby all necessary corporate action on the part of MCI WorldCom, subject to the
\napproval of this Agreement and the MCI WorldCom Stock Issuance by the Required
\nMCI WorldCom Vote. This Agreement has been duly executed and delivered by MCI
\nWorldCom and constitutes a valid and binding agreement of MCI WorldCom,
\nenforceable against it in accordance with its terms.<\/p>\n
(ii) The execution and delivery of this Agreement do not or will not, as the
\ncase may be, and the consummation of the Merger and the other transactions
\ncontemplated hereby will not, subject to the approval of this Agreement and the
\nMCI WorldCom Stock Issuance by the Required MCI WorldCom Vote, conflict with,
\nor result in, a Violation pursuant to: (A) any provision of the articles of
\nincorporation or by-laws of MCI WorldCom or the governing documents of any
\nSubsidiary of MCI WorldCom, or (B) except as is not reasonably likely,
\nindividually or in the aggregate, to have a Material Adverse Effect on MCI
\nWorldCom and subject to obtaining or making the consents, approvals, orders,
\nauthorizations, registrations, declarations and filings referred to in
\nparagraph (iii) below, any loan or credit agreement, note, mortgage, bond,
\nindenture, lease, benefit plan or other agreement, obligation, instrument,
\npermit, concession, franchise, license, judgment, order, decree, statute, law,
\nordinance, rule or regulation applicable to MCI WorldCom or any Subsidiary of
\nMCI WorldCom or their respective properties or assets.<\/p>\n
(iii) No consent, approval, order or authorization of, or registration,
\ndeclaration or filing with, any Governmental Entity is required by or with
\nrespect to MCI WorldCom or any Subsidiary of MCI WorldCom in connection with
\nthe execution and delivery of this Agreement by MCI WorldCom or the
\nconsummation of the Merger and the other transactions contemplated hereby,
\nexcept for (A) those required under or in relation to the rules and regulations
\nof Nasdaq, (B) the Required Consents and (C) such consents, approvals, orders,
\nauthorizations, registrations, declarations and filings the failure of which to
\nmake or obtain is not reasonably likely, individually or in the aggregate, to
\nhave a Material Adverse Effect on MCI WorldCom.<\/p>\n
(d) Reports and Financial Statements. MCI WorldCom has filed all reports,
\nschedules, forms, statements and other documents required to be filed by it
\nwith the SEC since January 1, 1998 (collectively, including all exhibits
\nthereto, the “MCI WorldCom SEC Reports”). No Significant Subsidiary of MCI
\nWorldCom is required to file any form, report or other document with the SEC.
\nNone of the MCI WorldCom SEC Reports when filed contained any untrue statement
\nof a material fact or omitted to state a material fact required to be stated
\ntherein or necessary to make the statements therein, in light of the
\ncircumstances under which they were made, not misleading. Each of the financial
\nstatements (including the related notes) included in the MCI WorldCom SEC<\/p>\n
1-17<\/p>\n
Reports presents fairly, in all material respects, the consolidated financial
\nposition and consolidated results of operations and cash flows of MCI WorldCom
\nand its Subsidiaries as of the respective dates or for the respective periods
\nset forth therein, all in conformity with U.S. GAAP consistently applied during
\nthe periods involved except as otherwise noted therein, and subject, in the
\ncase of the unaudited interim financial statements, to normal and recurring
\nyear-end adjustments. All of such MCI WorldCom SEC Reports, as of their
\nrespective dates (and as of the date of any amendment to the respective MCI
\nWorldCom SEC Report), complied as to form in all material respects with the
\napplicable requirements of the Securities Act and the Exchange Act.<\/p>\n
(e) Information Supplied. (i) None of the information supplied or to be
\nsupplied by MCI WorldCom for inclusion or incorporation by reference in (A) the
\nForm S-4 will, at the time the Form S-4 becomes effective under the Securities
\nAct, contain any untrue statement of a material fact or omit to state any
\nmaterial fact required to be stated therein or necessary to make the statements
\ntherein not misleading, and (B) the Joint Proxy Statement\/Prospectus will, on
\nthe date it is first mailed to Sprint stockholders or MCI WorldCom shareholders
\nor at the time of the Sprint Stockholders Meeting or the MCI WorldCom
\nShareholders Meeting, contain any untrue statement of a material fact or omit
\nto state any material fact required to be stated therein or necessary in order
\nto make the statements therein, in light of the circumstances under which they
\nwere made, not misleading. The Form S-4 and the Joint Proxy
\nStatement\/Prospectus will comply as to form in all material respects with the
\nrequirements of the Securities Act and the Exchange Act.<\/p>\n
(ii) Notwithstanding the foregoing provisions of this Section 3.2(e), no
\nrepresentation or warranty is made by MCI WorldCom with respect to statements
\nmade or incorporated by reference in the Form S-4 or the Joint Proxy
\nStatement\/Prospectus based on information supplied by Sprint for inclusion or
\nincorporation by reference therein.<\/p>\n
(f) Litigation. There is no suit, action, proceeding, claim or investigation
\npending or, to the Knowledge of MCI WorldCom, threatened against or affecting
\nMCI WorldCom or any of its Subsidiaries that is reasonably likely, individually
\nor in the aggregate, to have a Material Adverse Effect on MCI WorldCom nor is
\nthere any judgment, decree, injunction, rule or order of any Governmental
\nEntity or arbitrator outstanding against MCI WorldCom or any of its
\nSubsidiaries having, or that is reasonably likely, individually or in the
\naggregate, to have a Material Adverse Effect on MCI WorldCom.<\/p>\n
(g) Compliance with Applicable Laws. MCI WorldCom and its Subsidiaries hold
\nall permits, licenses, variances, exemptions, orders, registrations and
\napprovals of all Governmental Entities which are required for the operation of
\nthe business of MCI WorldCom and its Subsidiaries taken as a whole (the “MCI
\nWorldCom Permits”), except where the failure to have any such MCI WorldCom
\nPermits is not reasonably likely, individually or in the aggregate, to have a
\nMaterial Adverse Effect on MCI WorldCom. MCI WorldCom and its Subsidiaries are
\nin compliance with the terms of the MCI WorldCom Permits and all applicable
\nstatutes, laws, ordinances, rules and regulations, except where the failure so
\nto comply is not reasonably likely, individually or in the aggregate, to have a
\nMaterial Adverse Effect on MCI WorldCom. Subject to obtaining the Required
\nConsents, the Merger, in and of itself, would not cause the revocation or
\ncancelation of any MCI WorldCom Permit that is reasonably likely, individually
\nor in the aggregate, to have a Material Adverse Effect on MCI WorldCom.<\/p>\n
(h) State Takeover Statutes; Approvals. The Board of Directors of MCI
\nWorldCom has approved and recommended the terms of this Agreement and the
\nconsummation of the Merger and the other transactions contemplated hereby
\n(including the amendments to MCI WorldCom’s articles of incorporation
\ncontemplated hereby) and such approval of the Board of Directors of MCI
\nWorldCom constitutes approval of the Merger and the other transactions
\ncontemplated hereby (including the amendments to MCI WorldCom’s articles of
\nincorporation contemplated hereby) by the Board of Directors of MCI WorldCom to
\nthe extent applicable under Article Eleven of MCI WorldCom’s articles of
\nincorporation and represents all the action necessary to ensure that Article
\nEleven of MCI WorldCom’s articles of incorporation does not apply to Sprint in
\nconnection with the Merger and the other transactions contemplated hereby. No
\nGeorgia or Kansas state takeover statute<\/p>\n
1-18<\/p>\n
(including Section 14-2-1110 et seq. and Section 14-2-1131 et seq. of the GBCC)
\nis applicable to MCI WorldCom in connection with this Agreement, the Merger or
\nthe other transactions contemplated by this Agreement. Other than those that
\nhave been made prior to the date hereof, no approval or determination of the
\nBoard of Directors of MCI WorldCom or any committee thereof is required with
\nrespect to any class or series of MCI WorldCom Capital Stock or under MCI
\nWorldCom’s articles of incorporation or by-laws to approve this Agreement or
\nany of the transactions contemplated hereby.<\/p>\n
(i) Intellectual Property; Year 2000. (i) MCI WorldCom and its Subsidiaries
\nown, or are validly licensed or otherwise have the right to use, all
\nIntellectual Property Rights used in the business of MCI WorldCom and its
\nSubsidiaries, except for such Intellectual Property Rights the failure of which
\nto own, license or otherwise have the right to use is not reasonably likely,
\nindividually or in the aggregate, to have a Material Adverse Effect on MCI
\nWorldCom.<\/p>\n
(ii) To the Knowledge of MCI WorldCom, neither MCI WorldCom nor any of its
\nSubsidiaries has interfered with, infringed upon, misappropriated or otherwise
\ncome into conflict with any Intellectual Property Rights or other proprietary
\ninformation of any other Person, except for any such interference,
\ninfringement, misappropriation or other conflict which is not reasonably
\nlikely, individually or in the aggregate, to have a Material Adverse Effect on
\nMCI WorldCom. To the Knowledge of MCI WorldCom, neither MCI WorldCom nor any of
\nits Subsidiaries has received any written charge, complaint, claim, demand or
\nnotice alleging any such interference, infringement, misappropriation or other
\nconflict (including any claim that MCI WorldCom or any such Subsidiary must
\nlicense or refrain from using any Intellectual Property Rights or other
\nproprietary information of any other Person) which has not been settled or
\notherwise fully resolved, except with respect to any such interference,
\ninfringement, misappropriation or other conflict which is not reasonably
\nlikely, individually or in the aggregate, to have a Material Adverse Effect on
\nMCI WorldCom. To the Knowledge of MCI WorldCom, no other Person has interfered
\nwith, infringed upon, misappropriated or otherwise come into conflict with any
\nIntellectual Property Rights of MCI WorldCom or any of its Subsidiaries, except
\nfor any such interference, infringement, misappropriation or other conflict
\nwhich is not reasonably likely, individually or in the aggregate, to have a
\nMaterial Adverse Effect on MCI WorldCom.<\/p>\n
(iii) As of the date of this Agreement, MCI WorldCom and its Subsidiaries
\nhave undertaken a concerted effort to ensure that all of the computer software,
\ncomputer firmware, computer hardware, and other similar or related items of
\nautomated, computerized, and\/or software system(s) that are to be used or
\nrelied on by MCI WorldCom or any of its Subsidiaries in the conduct of their
\nrespective businesses will not malfunction, will not cease to function, will
\nnot generate incorrect data, and will not provide incorrect results when
\nprocessing, providing and\/or receiving (i) date\/related data into and between
\nthe years 1999 and 2000 and (ii) date-related data in connection with any valid
\ndate in the twentieth and twenty-first centuries. As of the date of this
\nAgreement, MCI WorldCom reasonably believes that such effort will be
\nsuccessful.<\/p>\n
(j) Absence of Certain Changes or Events. Except for liabilities incurred in
\nconnection with this Agreement or the transactions contemplated hereby, since
\nJune 30, 1999, MCI WorldCom and its Subsidiaries have conducted their business
\nonly in the ordinary course, and there has not been (i) any Material Adverse
\nChange in MCI WorldCom, (ii) until the date of this Agreement, any declaration,
\nsetting aside or payment of any dividend or other distribution (whether in
\ncash, stock or property) with respect to any of MCI WorldCom’s capital stock,
\nother than dividends payable on MCI WorldCom’s preferred stock in accordance
\nwith their terms as of the date of this Agreement, (iii) until the date of this
\nAgreement, any split, combination or reclassification of any of MCI WorldCom’s
\ncapital stock or any issuance or the authorization of any issuance of any other
\nsecurities in respect of, in lieu of or in substitution for shares of MCI
\nWorldCom’s capital stock, (iv) until the date of this Agreement, except insofar
\nas may be required by a change in U.S. GAAP, any change in accounting methods,
\nprinciples or practices by MCI WorldCom materially affecting its consolidated
\nfinancial position or consolidated results of operations or (v) until the date
\nof this Agreement, except insofar as Sprint has given its consent, which
\nconsent shall not be unreasonably withheld or delayed, any tax election (or
\nsettlement or compromise of any material income tax liability) that is
\nreasonably likely, individually or in the aggregate, to have a Material Adverse
\nEffect on MCI WorldCom.<\/p>\n
1-19<\/p>\n
(k) Vote Required. The affirmative vote (the “Required MCI WorldCom Vote”)
\nof (i) holders of shares of MCI WorldCom Common Stock and MCI WorldCom Series B
\nPreferred Stock representing a majority of all the votes entitled to be cast at
\na meeting of the holders of outstanding shares of capital stock of MCI
\nWorldCom, voting as a single voting group, is the only vote of the holders of
\nany class or series of MCI WorldCom capital stock necessary to approve the
\nMerger (which would include the amendment to MCI WorldCom’s articles of
\nincorporation contemplated hereby) and (ii) a majority of the total votes cast
\nby the holders of shares of MCI WorldCom Common Stock is the only vote of the
\nholders of any class or series of capital stock of MCI WorldCom necessary to
\napprove, in accordance with the applicable rules of Nasdaq, the issuance (the
\n“MCI WorldCom Stock Issuance”) of MCI WorldCom Capital Stock pursuant to the
\nMerger.<\/p>\n
(l) MCI WorldCom Rights Agreement. No amendment to the MCI WorldCom Rights
\nAgreement is required to be made by MCI WorldCom in connection with the
\napproval, execution or delivery of this Agreement or the consummation of the
\ntransactions contemplated hereby.<\/p>\n
(m) Brokers or Finders. No agent, broker, investment banker, financial
\nadvisor or other firm or Person on behalf of MCI WorldCom is or will be
\nentitled to any broker’s or finder’s fee or any other similar commission or fee
\nin connection with any of the transactions contemplated by this Agreement,
\nexcept Salomon Smith Barney Inc., whose fees and expenses will be paid by MCI
\nWorldCom in accordance with MCI WorldCom’s agreement with such firm, based upon
\narrangements made by or on behalf of MCI WorldCom and previously disclosed to
\nSprint.<\/p>\n
(n) Opinion of Financial Advisor. MCI WorldCom has received the opinion of
\nSalomon Smith Barney Inc., dated the date of this Agreement, to the effect
\nthat, as of the date hereof, the FON Exchange Ratio and the PCS Stock Merger
\nConsideration were fair, from a financial point of view, to MCI WorldCom, a
\ncopy of which opinion has been made available to Sprint.<\/p>\n
(o) ERISA Compliance. (i) With respect to MCI WorldCom’s Benefit Plans, no
\nliability has been incurred and to the Knowledge of MCI WorldCom there exists
\nno condition or circumstances in connection with which MCI WorldCom or any of
\nits Subsidiaries could be subject to any liability that is reasonably likely,
\nindividually or in the aggregate, to have a Material Adverse Effect on MCI
\nWorldCom, in each case under ERISA, the Code or any other applicable law.<\/p>\n
(ii) Each of MCI WorldCom’s Benefit Plans has been administered in
\naccordance with its terms, except for any failures so to administer any such
\nBenefit Plan that are not reasonably likely, individually or in the aggregate,
\nto have a Material Adverse Effect on MCI WorldCom. MCI WorldCom, its
\nSubsidiaries and all MCI WorldCom’s Benefit Plans are in compliance with the
\napplicable provisions of ERISA, the Code and all other applicable laws and the
\nterms of all applicable collective bargaining agreements, except for any
\nfailures to be in such compliance that are not reasonably likely, individually
\nor in the aggregate, to have a Material Adverse Effect on MCI WorldCom.<\/p>\n
(iii) None of MCI WorldCom or any of its Subsidiaries sponsors or
\ncontributes to any of MCI WorldCom’s Benefit Plans that is subject to Title IV
\nof ERISA.<\/p>\n
(iv) MCI WorldCom and its Subsidiaries are in compliance with all Federal,
\nstate, local and foreign requirements regarding employment, except for any
\nfailures to comply that are not reasonably likely, individually or in the
\naggregate, to have a Material Adverse Effect on MCI WorldCom. As of the date of
\nthis Agreement, there is no labor dispute, strike or work stoppage against MCI
\nWorldCom or any of its Subsidiaries pending or, to the Knowledge of MCI
\nWorldCom, threatened which may interfere with the respective business
\nactivities of MCI WorldCom or any of its Subsidiaries, except where such
\ndispute, strike or work stoppage is not reasonably likely, individually or in
\nthe aggregate, to have a Material Adverse Effect on MCI WorldCom. As of the
\ndate of this Agreement, to the Knowledge of MCI WorldCom, none of MCI WorldCom,
\nany of its Subsidiaries or any of their respective representatives or employees
\nhas committed any unfair labor practice in connection with the operation of the
\nrespective businesses of MCI WorldCom or any of its Subsidiaries, and<\/p>\n
1-20<\/p>\n
there is no action, charge or complaint against MCI WorldCom or any of its
\nSubsidiaries by the National Labor Relations Board or any comparable
\nGovernmental Entity pending or threatened in writing, in each case except where
\nsuch practices, actions, charges or complaints are not reasonably likely,
\nindividually or in the aggregate, to have a Material Adverse Effect on MCI
\nWorldCom.<\/p>\n
(v) No employee of MCI WorldCom or its Subsidiaries will be entitled to any
\nadditional benefits or any acceleration of the time of payment or vesting of
\nany benefits under any of MCI WorldCom’s Benefit Plans as a result of the
\ntransactions contemplated by this Agreement, except to the extent that such
\nbenefits, acceleration or vesting are not reasonably likely, individually or in
\nthe aggregate, to have a Material Adverse Effect on MCI WorldCom. No amount
\npayable, or economic benefit provided, by MCI WorldCom or its Subsidiaries
\n(including any acceleration of the time of payment or vesting of any benefit)
\ncould be considered an “excess parachute payment” under Section 280G of the
\nCode, except to the extent that, if such payment or benefit was an “excess
\nparachute payment”, such payment or benefit is not reasonably likely,
\nindividually or in the aggregate, to have a Material Adverse Effect on MCI
\nWorldCom. No Person is entitled to receive any additional payment from MCI
\nWorldCom or its Subsidiaries or any other Person in the event that the excise
\ntax of Section 4999 of the Code is imposed on such Person, except to the extent
\nthat any such additional payment is not reasonably likely, individually or in
\nthe aggregate, to have a Material Adverse Effect on MCI WorldCom.<\/p>\n
(p) Taxes. (i) (A) Each of MCI WorldCom and its Subsidiaries and each MCI
\nWorldCom Consolidated Group has timely filed or has caused to be timely filed
\nall material tax returns and reports required to be filed by it or requests for
\nextensions to file such returns or reports have been timely filed, granted and
\nhave not expired, (B) all tax returns and reports filed by MCI WorldCom and
\neach of its Subsidiaries and each MCI WorldCom Consolidated Group are complete
\nand accurate in all respects and (C) MCI WorldCom and each of its Subsidiaries
\nand each MCI WorldCom Consolidated Group has paid (or MCI WorldCom or another
\nmember of such MCI WorldCom Consolidated Group has paid on its behalf) all
\ntaxes shown as due on such returns and reports, and the reserve for current
\ntaxes shown on the most recent financial statements contained in the MCI
\nWorldCom Filed SEC Reports (in addition to any reserve for deferred taxes
\nestablished to reflect timing differences between book and tax income) is
\nadequate to cover all taxes payable by MCI WorldCom and its Subsidiaries and
\neach MCI WorldCom Consolidated Group for all taxable periods and portions
\nthereof through the date of such financial statements, except for any such
\nfailure to file, incompleteness or inaccuracy, failure to pay, or inadequacy of
\nsuch reserve, that is not reasonably likely, individually or in the aggregate,
\nto have a Material Adverse Effect on MCI WorldCom.<\/p>\n
(ii) No deficiencies for any taxes have been proposed, asserted or assessed
\nin writing against MCI WorldCom or any of its Subsidiaries or any MCI WorldCom
\nConsolidated Group that are not adequately reserved for, except for
\ndeficiencies that are not reasonably likely, individually or in the aggregate,
\nto have a Material Adverse Effect on MCI WorldCom and no requests for waivers
\nof time to assess any such taxes have been granted or are pending (other than
\nwith respect to years that are currently under examination by the Internal
\nRevenue Service or other applicable taxing authorities). The statute of
\nlimitations on assessment or collection of any Federal taxes due from MCI
\nWorldCom and its Subsidiaries has expired for all taxable years of MCI WorldCom
\nand each of its Subsidiaries through 1987. The Federal income tax returns of
\nMCI WorldCom and each of its Subsidiaries have been examined by and settled
\nwith the Internal Revenue Services for all years through 1987.<\/p>\n
(iii) Neither MCI WorldCom nor any of its Subsidiaries has taken or has
\nagreed to take any action or has any Knowledge of any fact, agreement, plan or
\nother circumstance that is reasonably likely to prevent the Merger from
\nqualifying as a “reorganization” within the meaning of Section 368(a) of the
\nCode.<\/p>\n
(iv) Neither MCI WorldCom nor any of its Subsidiaries has constituted either
\na “distributing corporation” or a “controlled corporation” (within the meaning
\nof Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for
\ntax-free treatment under Section 355 of the Code (A) in the two years prior to
\nthe date of this Agreement or (B) in a distribution which could otherwise
\nconstitute part of a “plan” or series of “related transactions” (within the
\nmeaning of Section 355(e) of the Code) in conjunction with the Merger.<\/p>\n
1-21<\/p>\n
(v) MCI WorldCom does not believe that it is a “United States real property
\nholding corporation” within the meaning of Section 897(c)(2) of the Code during
\nthe applicable period specified in Section 897(c)(1)(A)(ii) of the Code,
\nalthough it has not determined or established whether it will be a United
\nStates real property holding corporation in the future.<\/p>\n
(vi) As used in this Agreement, “MCI WorldCom Consolidated Group” means any
\naffiliated group within the meaning of Section 1504(a) of the Code, in which
\nMCI WorldCom (or any Subsidiary of MCI WorldCom) is or has ever been a member
\nor any group of corporations with which MCI WorldCom files, has filed or is or
\nwas required to file an affiliated, consolidated, combined, unitary or
\naggregate tax return.<\/p>\n
ARTICLE IV<\/p>\n
Covenants Relating to Conduct of Business<\/p>\n
4.1 Covenants of Sprint. During the period from the date of this Agreement
\nand continuing until the Effective Time, Sprint agrees as to itself and its
\nSubsidiaries that (except as expressly contemplated, permitted or required by
\nthis Agreement or as otherwise indicated on the Sprint Disclosure Schedule or
\nto the extent that MCI WorldCom shall otherwise consent in writing, which
\nconsent shall not be unreasonably withheld or delayed):<\/p>\n
(a) Ordinary Course. Except to the extent not reasonably practicable in
\nlight of the announcement or existence of this Agreement and the transactions
\ncontemplated hereby, Sprint shall, and shall cause its Subsidiaries taken as a
\nwhole to, carry on its business in the usual, regular and ordinary course in
\nall material respects, in substantially the same manner as heretofore
\nconducted, and shall use all reasonable efforts to maintain its rights and
\nfranchises and preserve its relationships with customers, suppliers and others
\nhaving business dealings with it with the objective to minimize the impairment
\nof its ongoing business; provided, however, that no action by Sprint or its
\nSubsidiaries with respect to matters specifically addressed by any other
\nprovisions of this Section 4.1 or Section 4.1 of the Sprint Disclosure Schedule
\nshall be deemed a breach of this Section 4.1(a) unless such action would
\nconstitute a breach of one or more of such other provisions.<\/p>\n
(b) Dividends; Changes in Share Capital. Sprint shall not, and shall not
\npermit any of its Subsidiaries to, and shall not propose to, (i) declare or pay
\nany dividends on or make other distributions in respect of any of its capital
\nstock, except (A) Sprint may continue the declaration and payment of regular
\nquarterly cash dividends not in excess of $0.125 per share of Sprint FON Stock
\n(and any corresponding cash dividends on shares held by the Class A Holders)
\nand regular dividends required by the terms of the Sprint Preferred Stock as in
\neffect on the date hereof, in each case with usual record and payment dates for
\nsuch dividends in accordance with Sprint’s past practice and (B) dividends by
\nwholly owned Subsidiaries of Sprint to its parent, (ii) split, combine or
\nreclassify any of its capital stock or issue or authorize or propose the
\nissuance of any other securities in respect of, in lieu of or in substitution
\nfor, shares of its capital stock, except for any such transaction by a wholly
\nowned Subsidiary of Sprint which remains a wholly owned Subsidiary after
\nconsummation of such transaction, or (iii) repurchase, redeem or otherwise
\nacquire any shares of its capital stock or any securities convertible into or
\nexercisable for any shares of its capital stock except for the purchase from
\ntime to time by Sprint of Sprint Common Stock (and the associated Sprint
\nRights) in the ordinary course of business consistent with past practice in
\nconnection with the Sprint Benefit Plans and the terms of the Sprint Conversion
\nShares as in effect on the date hereof and except for the redemption of the
\nSprint First Series Preferred Stock and Sprint Second Series Preferred Stock
\npursuant to Section 5.14.<\/p>\n
(c) Issuance of Securities. Sprint shall not, and shall not permit any of
\nits Subsidiaries to, issue, deliver or sell, or authorize or propose the
\nissuance, delivery or sale of, any shares of its capital stock of any class,
\nany Sprint Voting Debt or any securities convertible into or exercisable for,
\nor any rights, warrants or options to acquire, any such shares or Sprint Voting
\nDebt, or enter into any agreement with respect to any of the foregoing, other
\nthan (i) the issuance of Sprint Common Stock (and the associated Sprint Rights)
\nupon the exercise of stock options or in connection with rights under other
\nstock-based benefits plans, to the extent such<\/p>\n
1-22<\/p>\n
options or rights are outstanding on the date hereof in accordance with their
\npresent terms or upon the exercise of the stock options issued pursuant to
\nclause (vi) below, (ii) the issuance of Sprint Capital Stock upon the
\nconversion of Sprint Conversion Securities pursuant to the terms thereof as in
\neffect on the date hereof, (iii) the issuance of Sprint PCS Stock pursuant to
\nthe exercise of Warrants pursuant to the terms of the Warrant Agreements as in
\neffect on the date hereof, (iv) issuances by a wholly owned Subsidiary of
\nSprint of capital stock to such Subsidiary’s parent, (v) issuances in
\naccordance with the Sprint Rights Agreement, (vi) issuances of stock options in
\nconnection with regular option grants by Sprint or issuances of stock options
\nfor new hires or issuances of restricted stock, in each case in the ordinary
\ncourse of business and consistent with past practice pursuant to the Sprint
\nBenefit Plans, (vii) the issuance of shares of Sprint Capital Stock pursuant to
\npurchase rights or preemptive rights held by stockholders of Sprint under the
\nterms of the instruments or agreements as in effect on the date hereof pursuant
\nto which such shares were issued, (viii) the issuance of Sprint Capital Stock
\npursuant to acquisitions permitted under Section 4.1(e) hereof or under Section
\n4.1 of the Sprint Disclosure Schedule or (ix) as provided in Section 5.7 of the
\nSprint Disclosure Schedule.<\/p>\n
(d) Governing Documents. Except to the extent required to comply with their
\nrespective obligations hereunder, required by law or required by the rules and
\nregulations of the NYSE, Sprint shall not amend its articles of incorporation
\nor by-laws.<\/p>\n
(e) No Acquisitions. Sprint shall not, and shall not permit any of its
\nSubsidiaries to, acquire or agree to acquire by merging or consolidating with,
\nor by purchasing a substantial equity interest in or a substantial portion of
\nthe assets of, or by any other manner, any business or any corporation,
\npartnership, association or other business organization or division thereof or
\notherwise acquire or agree to acquire any assets; provided, however, that the
\nforegoing shall not prohibit (i) acquisitions of assets used in the operations
\nof the business of Sprint and its Subsidiaries in the ordinary course of
\nbusiness consistent with past practice, (ii) internal reorganizations or
\nconsolidations involving existing Subsidiaries of Sprint or (iii) the creation
\nof new Subsidiaries of Sprint organized to conduct or continue activities
\notherwise permitted by this Agreement, so long as any action otherwise
\npermitted by this proviso could not reasonably be expected to result in (A) any
\nof the conditions to the Merger set forth in Article VI not being satisfied or
\n(B) a material delay in the satisfaction of any such conditions.<\/p>\n
(f) No Dispositions. Other than (i) in the ordinary course of business
\nconsistent with past practice and, in any event, which are not material,
\nindividually or in the aggregate, to Sprint and its Subsidiaries taken as a
\nwhole or (ii) internal reorganizations or consolidations involving existing
\nSubsidiaries of Sprint, Sprint shall not, and shall not permit any of its
\nSubsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to
\nsell, lease, encumber or otherwise dispose of (including by way of a spin-off
\nor similar transaction), any of its assets.<\/p>\n
(g) Indebtedness; Investments. Sprint shall not, and shall not permit any of
\nits Subsidiaries to, (i) incur any indebtedness for borrowed money or guarantee
\nany such indebtedness of another Person, issue or sell any debt securities or
\nwarrants or other rights to acquire any debt securities of Sprint or any of its
\nSubsidiaries, guarantee any debt securities of another Person, enter into any
\n“keep well” or other agreement to maintain any financial statement condition of
\nanother Person (other than any wholly owned Subsidiary) or enter into any
\narrangement having the economic effect of any of the foregoing, except for (A)
\nshort-term borrowings, senior bank or similar bank financing or, subject to
\nprior consultation with MCI WorldCom, any other indebtedness incurred by Sprint
\nor any of its Subsidiaries with a maturity date not to exceed five years from
\nthe date of its original issuance (provided that the consummation of this
\nAgreement or any of the transactions contemplated hereby shall not give rise
\nto, cause or result in, a default or event of default under the agreement or
\ninstrument governing any such indebtedness or, an obligation to pay any amount
\nthereunder solely as a result of the consummation of this Agreement or any of
\nthe transactions contemplated hereby) incurred in the ordinary course of
\nbusiness consistent with past practice (or to refund existing or maturing
\nindebtedness) and (B) intercompany indebtedness between Sprint and any of its
\nwholly owned Subsidiaries or between such wholly owned Subsidiaries, (ii) make
\nany loans or advances to any other Person, other than (A) employee loans or
\nadvances made by Sprint in the ordinary course of business consistent with past
\npractice and (B) loans or<\/p>\n
1-23<\/p>\n
advances made between Sprint and any of its wholly owned Subsidiaries or
\nbetween such wholly owned Subsidiaries, or (iii) investments in any Person
\nother than (A) investments in wholly owned Subsidiaries and (B) investments in
\nthe ordinary course of business consistent with past practice and, in any
\nevent, which are not material, individually or in the aggregate, to Sprint.<\/p>\n
(h) New Line of Business; Capital Expenditures. Sprint shall not, and shall
\nnot permit any of its Subsidiaries to, (i) enter into any new material line of
\nbusiness outside its Core Businesses (as defined in Sprint’s articles of
\nincorporation) or (ii) incur or commit to any capital expenditures other than
\ncapital expenditures incurred or committed to in the ordinary course of
\nbusiness and which are not in excess of the amounts set forth in Section 4.1(h)
\nof the Sprint Disclosure Schedule.<\/p>\n
(i) Tax-Free Qualification. Sprint shall not, and shall not permit any of
\nits Subsidiaries to, take any action that would prevent or impede the Merger
\nfrom qualifying as a reorganization under Section 368 of the Code.<\/p>\n
(j) Other Actions. Sprint shall not, and shall not permit any of its
\nSubsidiaries to, take any action that would, or that could reasonably be
\nexpected to, result in (i) any of the conditions to the Merger set forth in
\nArticle VI not being satisfied or (ii) a material delay in the satisfaction of
\nany such conditions.<\/p>\n
(k) Accounting Methods. Except as disclosed in the Sprint Filed SEC Reports,
\nor as required by a Governmental Entity, Sprint shall not make any material
\nchange in its methods of accounting in effect at December 31, 1998, except as
\nrequired by changes in U.S. GAAP as concurred in by Sprint’s independent
\nauditors. Sprint shall not change its fiscal year.<\/p>\n
(l) Representations and Warranties. Sprint shall not take any action that
\nwould cause the representations and warranties set forth in Section 3.1(j) to
\nno longer be true and correct.<\/p>\n
(m) Authorization of the Foregoing. Sprint shall not, and shall not permit
\nany of its Subsidiaries to, authorize, commit or agree to take any of the
\nforegoing actions.<\/p>\n
4.2 Covenants of MCI WorldCom. During the period from the date of this
\nAgreement and continuing until the Effective Time, MCI WorldCom agrees as to
\nitself and its Subsidiaries that (except as expressly contemplated, permitted
\nor required by this Agreement or as otherwise indicated on the MCI WorldCom
\nDisclosure Schedule or to the extent that Sprint shall otherwise consent in
\nwriting, which consent shall not be unreasonably withheld or delayed):<\/p>\n
(a) Ordinary Course. Except to the extent not reasonably practicable in
\nlight of the announcement or existence of this Agreement and the transactions
\ncontemplated hereby, MCI WorldCom shall, and shall cause its Subsidiaries taken
\nas a whole to, carry on its business in the usual, regular and ordinary course
\nin all material respects, in substantially the same manner as heretofore
\nconducted, and shall use all reasonable efforts to maintain its rights and
\nfranchises and preserve its relationships with customers, suppliers and others
\nhaving business dealings with it with the objective to minimize the impairment
\nof its ongoing business; provided, however, that no action by MCI WorldCom or
\nits Subsidiaries with respect to matters specifically addressed by any other
\nprovisions of this Section 4.2 shall be deemed a breach of this Section 4.2(a)
\nunless such action would constitute a breach of one or more of such other
\nprovisions.<\/p>\n
(b) Dividends; Changes in Share Capital. MCI WorldCom shall not, and shall
\nnot permit any of its Subsidiaries to, and shall not propose to, repurchase,
\nredeem or otherwise acquire any shares of its capital stock or any securities
\nconvertible into or exercisable for any shares of its capital stock except for
\nthe purchase from time to time by MCI WorldCom of MCI WorldCom Capital Stock
\n(and the associated MCI WorldCom Rights) in the ordinary course of business
\nconsistent with past practice in connection with share options, share incentive
\nschemes, profit sharing schemes or other benefit plans of MCI WorldCom or
\nrepurchases of shares of MCI WorldCom Common Stock in open market or privately
\nnegotiated transactions. In the event MCI WorldCom<\/p>\n
1-24<\/p>\n
changes (or establishes a record date for changing) the number of shares of MCI
\nWorldCom Common Stock issued and outstanding prior to the Effective Time as a
\nresult of a stock split, stock dividend, recapitalization, subdivision,
\nreclassification, combination, exchange of shares or similar transaction with
\nrespect to the outstanding MCI WorldCom Common Stock and the record date
\ntherefor shall be prior to the Effective Time, the applicable Merger
\nConsideration shall be appropriately adjusted to reflect such stock split,
\nstock dividend, recapitalization, subdivision, reclassification, combination,
\nexchange of shares or similar transaction. In addition, in the event MCI
\nWorldCom pays (or establishes a record date for payment of) any dividend on, or
\nmakes any other distribution in respect of, MCI WorldCom Common Stock, the
\napplicable Merger Consideration shall be appropriately adjusted to reflect such
\ndividend or distribution. Without limiting the foregoing, the issuance of MCI
\nWorldCom Rights pursuant to the MCI WorldCom Rights Agreement in respect of
\neach share of MCI WorldCom PCS Stock shall not cause, or result in, any
\nadjustment pursuant to this Section 4.2(b).<\/p>\n
(c) No Acquisitions. MCI WorldCom shall not, and shall not permit any of its
\nSubsidiaries to, acquire or agree to acquire by merging or consolidating with,
\nor by purchasing a substantial equity interest in or all or a substantial
\nportion of the assets of, or by any other manner, any business or any
\ncorporation, partnership, association or other business organization or
\ndivision thereof, in any event (i) with a value in excess of an amount equal to
\n20% of the market capitalization of MCI WorldCom, for any one acquisition and
\n30% thereof for all acquisitions before the Closing, in each case as determined
\non the date of its entering into an agreement therefor or (ii) that could
\nreasonably be expected to result in (A) any of the conditions to the Merger set
\nforth in Article VI not being satisfied or (B) a material delay in the
\nsatisfaction of any such conditions. MCI WorldCom shall not, and shall not
\npermit any of its Subsidiaries to, enter into any new material line of business
\noutside its existing core businesses.<\/p>\n
(d) No Dispositions. MCI WorldCom shall not, and shall not permit any of its
\nSubsidiaries to, sell, lease, encumber or otherwise dispose of all or
\nsubstantially all of any material line of business for MCI WorldCom and its
\nSubsidiaries taken as a whole.<\/p>\n
(e) Tax-Free Qualification. MCI WorldCom shall not and shall not permit any
\nof its Subsidiaries to, take any action that would prevent or impede the Merger
\nfrom qualifying as a reorganization under Section 368 of the Code.<\/p>\n
(f) Other Actions. MCI WorldCom shall not, and shall not permit any of its
\nSubsidiaries to, take any action that would, or could reasonably be expected
\nto, result in (i) any of the conditions to the Merger set forth in Article VI
\nnot being satisfied or (ii) a material delay in the satisfaction of such
\nconditions.<\/p>\n
(g) Representations and Warranties. MCI WorldCom shall not take any action
\nthat would cause the representations and warranties set forth in Section
\n3.2(j)(i) to no longer be true and correct.<\/p>\n
(h) Authorization of the Foregoing. MCI WorldCom shall not, and shall not
\npermit any of its Subsidiaries to, authorize, commit or agree to take, any of
\nthe foregoing actions.<\/p>\n
4.3 Control of Other Party’s Business. Nothing contained in this Agreement
\nshall give Sprint, directly or indirectly, the right to control or direct MCI
\nWorldCom’s operations prior to the Effective Time. Nothing contained in this
\nAgreement shall give MCI WorldCom, directly or indirectly, the right to control
\nor direct Sprint’s operations prior to the Effective Time. Prior to the
\nEffective Time, each of Sprint and MCI WorldCom shall exercise, consistent with
\nthe terms and conditions of this Agreement, complete control and supervision
\nover its respective operations.<\/p>\n
4.4 FT\/DT Arrangements. Notwithstanding anything in this Agreement to the
\ncontrary:<\/p>\n
(a) MCI WorldCom expressly consents and agrees to (i) the execution and
\ndelivery by Sprint, Sprint Global Venture, Inc. (“SGVI”) and any other
\nSubsidiary of Sprint of (A) the Master Transfer Agreement dated as of January
\n21, 2000 (the “MTA”) between and among FT, DT, NAB Nordamerika Beteiligungs
\nHolding GmbH,<\/p>\n
1-25<\/p>\n
Atlas Telecommunications S.A., Sprint, SGVI and the JV Entities which are
\nparties thereto and (B) the agreements contemplated by, or to be executed and
\ndelivered pursuant to, the MTA (together with the MTA, the “MTA Transaction
\nDocuments”), and (ii) the performance by Sprint, SGVI and any other Subsidiary
\nof Sprint of their obligations thereunder and the consummation by Sprint, SGVI
\nand any other Subsidiary of Sprint of the transactions contemplated thereby.<\/p>\n
(b) MCI WorldCom agrees that neither the execution and delivery of the MTA
\nTransaction Documents nor the performance of the obligations thereunder or the
\nconsummation of the transactions contemplated thereby will constitute a breach
\nof this Agreement or be included in determining whether a Material Adverse
\nEffect on Sprint or a Material Adverse Change in Sprint has occurred for any
\npurpose of this Agreement.<\/p>\n
(c) Sprint shall not, and shall not permit any of its Subsidiaries to,
\namend, modify or waive any of the provisions of the MTA Transaction Documents
\nin any material respect without the consent of MCI WorldCom (which consent
\nshall not be unreasonably withheld or delayed). Sprint shall consult
\nimmediately with MCI WorldCom regarding any communication or advisory from FT
\nor DT under Section 5.06(b) of the MTA.<\/p>\n
ARTICLE V<\/p>\n
Additional Agreements<\/p>\n
5.1 Preparation of the Form S-4 and the Joint Proxy Statement\/Prospectus;
\nStockholders Meetings. (a) As promptly as practicable following the date
\nhereof, MCI WorldCom and Sprint shall jointly prepare and file with the SEC
\npreliminary proxy materials and any amendments or supplements thereto which
\nshall constitute the joint proxy statement\/prospectus (such proxy
\nstatement\/prospectus, and any amendments or supplements thereto, the “Joint
\nProxy Statement\/Prospectus”) and MCI WorldCom shall prepare and file with the
\nSEC the Registration Statement on Form S-4 with respect to the issuance of MCI
\nWorldCom Capital Stock in the Merger (the “Form S-4”) in which the Joint Proxy
\nStatement\/Prospectus will be included as a prospectus. The Form S-4 and the
\nJoint Proxy Statement\/Prospectus shall comply as to form in all material
\nrespects with the applicable provisions of the Securities Act and the Exchange
\nAct. Each of MCI WorldCom and Sprint shall use all reasonable efforts to have
\nthe Form S-4 declared effective under the Securities Act as promptly as
\npracticable after filing with the SEC and to keep the Form S-4 effective as
\nlong as is necessary to consummate the Merger. The parties shall promptly
\nprovide copies to and consult with each other and prepare written responses
\nwith respect to any written comments received from the SEC with respect to the
\nForm S-4 and the Joint Proxy Statement\/Prospectus and promptly advise the other
\nparty of any oral comments received from the SEC. MCI WorldCom agrees that none
\nof the information supplied or to be supplied by MCI WorldCom for inclusion or
\nincorporation by reference in the Joint Proxy Statement\/Prospectus and each
\namendment or supplement thereto, at the time of mailing thereof and at the time
\nof the Sprint Stockholders Meeting or the MCI WorldCom Shareholders Meeting,
\nwill contain an untrue statement of a material fact or omit to state a material
\nfact required to be stated therein or necessary to make the statements therein,
\nin light of the circumstances under which they were made, not misleading.
\nSprint agrees that none of the information supplied or to be supplied by Sprint
\nfor inclusion or incorporation by reference in the Joint Proxy
\nStatement\/Prospectus and each amendment or supplement thereto, at the time of
\nmailing thereof and at the time of the Sprint Stockholders Meeting or the MCI
\nWorldCom Shareholders Meeting, will contain an untrue statement of a material
\nfact or omit to state a material fact required to be stated therein or
\nnecessary to make the statements therein, in light of the circumstances under
\nwhich they were made, not misleading. For purposes of the foregoing, it is
\nunderstood and agreed that information concerning or related to MCI WorldCom
\nand the MCI WorldCom Shareholders Meeting will be deemed to have been supplied
\nby MCI WorldCom and information concerning or related to Sprint and the Sprint
\nStockholders Meeting shall be deemed to have been supplied by Sprint. No
\namendment or supplement to the information supplied by Sprint for inclusion in
\nthe Joint Proxy Statement\/Prospectus shall be made without the approval of
\nSprint, which approval shall not be unreasonably withheld or delayed.<\/p>\n
1-26<\/p>\n
(b) Sprint shall, as promptly as practicable following the execution of this
\nAgreement, duly call, give notice of, convene and hold a meeting of its
\nstockholders (the “Sprint Stockholders Meeting”) for the purpose of obtaining
\nthe Required Sprint Vote with respect to the transactions contemplated by this
\nAgreement, shall use its reasonable best efforts, subject to Section 5.4, to
\nsolicit the adoption of this Agreement by the Required Sprint Vote and, subject
\nto Section 5.4, the Board of Directors of Sprint shall recommend adoption of
\nthis Agreement by the stockholders of Sprint. Without limiting the generality
\nof the foregoing but subject to its rights pursuant to Sections 5.4 and 7.1(e),
\nSprint agrees that its obligations pursuant to the first sentence of this
\nSection 5.1(b) shall not be affected by the commencement, public proposal,
\npublic disclosure or communication to Sprint of any Sprint Acquisition
\nProposal.<\/p>\n
(c) MCI WorldCom shall, as promptly as practicable following the execution
\nof this Agreement, duly call, give notice of, convene and hold a meeting of its
\nshareholders (the “MCI WorldCom Shareholders Meeting”) for the purpose of
\nobtaining the Required MCI WorldCom Vote with respect to the transactions
\ncontemplated by this Agreement, shall use its reasonable best efforts, subject
\nto Section 5.5, to solicit the approval of this Agreement by the Required MCI
\nWorldCom Vote and, subject to Section 5.5, the Board of Directors of MCI
\nWorldCom shall recommend the approval of this Agreement by the shareholders of
\nMCI WorldCom. Without limiting the generality of the foregoing but subject to
\nits rights pursuant to Sections 5.5 and 7.1(f), MCI WorldCom agrees that its
\nobligations pursuant to the first sentence of this Section 5.1(c) shall not be
\naffected by the commencement, public proposal, public disclosure or
\ncommunication to MCI WorldCom of any MCI WorldCom Acquisition Proposal.<\/p>\n
(d) The Sprint Stockholders Meeting and the MCI WorldCom Shareholders
\nMeeting shall take place on the same date, to the extent practicable; provided
\nthat, notwithstanding anything in this Agreement, neither such meeting shall
\ntake place earlier than the 121st day following the date of this Agreement.<\/p>\n
5.2 Access to Information. Upon reasonable notice, each of MCI WorldCom and
\nSprint shall, and shall cause its Subsidiaries to, afford to the other party
\nand to the officers, employees, accountants, counsel, financial advisors and
\nother representatives of such other party reasonable access during normal
\nbusiness hours, during the period prior to the Effective Time, to all its
\nproperties, books, contracts, commitments and records and, during such period,
\neach of MCI WorldCom and Sprint shall, and shall cause its Subsidiaries to,
\nfurnish promptly to the other party consistent with its legal obligations, all
\nother information concerning its business, properties and personnel as such
\nother party may reasonably request; provided, however, that each of MCI
\nWorldCom and Sprint may restrict the foregoing access to the extent that (i) a
\nGovernmental Entity requires either party or any of its Subsidiaries to
\nrestrict access to any properties or information reasonably related to any such
\ncontract on the basis of applicable laws and regulations with respect to
\nnational security matters or (ii) in the reasonable judgment of such party, any
\nlaw, treaty, rule or regulation of any Governmental Entity applicable to such
\nparty requires it or its Subsidiaries to restrict access to any properties or
\ninformation. The parties will hold any such information in confidence to the
\nextent required by, and in accordance with, the provisions of the letter dated
\nSeptember 22, 1999, between Sprint and MCI WorldCom (the “Confidentiality
\nAgreement”). Any investigation by MCI WorldCom or Sprint shall not affect the
\nrepresentations and warranties of Sprint or MCI WorldCom, as the case may be.<\/p>\n
5.3 Reasonable Best Efforts. (a) Subject to the terms and conditions of this
\nAgreement, each party hereto will use its reasonable best efforts to (i) take,
\nor cause to be taken, all actions and to do, or cause to be done, all things
\nnecessary, proper or advisable under applicable laws and regulations to
\nconsummate the Merger and the other transactions contemplated by this Agreement
\nas soon as practicable after the date hereof and (ii) obtain and maintain all
\napprovals, consents, waivers, registrations, permits, authorizations,
\nclearances and other confirmations required to be obtained from any third party
\nand\/or any Governmental Entity that are reasonably necessary to consummate the
\nMerger and the transactions contemplated hereby (each a “Required Approval”).
\nIn furtherance and not in limitation of the foregoing, each party hereto agrees
\nto make, as promptly as practicable, to the extent it has not already done so,
\n(i) an appropriate filing of a Notification and Report Form pursuant to the HSR
\nAct with respect to the transactions contemplated hereby (which filing shall be
\nmade in any event within five Business Days of the date hereof), (ii)
\nappropriate filings with the FCC and PUCs with<\/p>\n
1-27<\/p>\n
respect to the transactions contemplated hereby, (iii) appropriate filings with
\nthe European Commission in accordance with applicable competition, merger
\ncontrol, antitrust or similar laws within the time periods specified
\nthereunder, and (iv) all necessary filings with other Governmental Entities
\nrelating to the Merger, and, in each case, to supply as promptly as practicable
\nany additional information and documentary material that may be requested
\npursuant to such laws and to use reasonable best efforts to cause the
\nexpiration or termination of the applicable waiting periods under the HSR Act
\nand the receipt of Required Approvals under such other laws as soon as
\npracticable. Notwithstanding the foregoing, nothing in this Section 5.3 shall
\nrequire, or be deemed to require, (i) MCI WorldCom or Sprint to agree to or
\neffect any divestiture or take any other action if doing so would, individually
\nor in the aggregate, reasonably be expected to materially impair the parties’
\nability to achieve the overall benefits expected, as of the date hereof, to be
\nrealized from the consummation of the Merger or (ii) MCI WorldCom or Sprint to
\nagree to or effect any divestiture or take any other action that is not
\nconditional on the consummation of the Merger.<\/p>\n
(b) Each of MCI WorldCom and Sprint shall, in connection with the efforts
\nreferenced in Section 5.3(a) to obtain all Required Approvals, use its
\nreasonable best efforts to (i) cooperate in all respects with each other in
\nconnection with any filing or submission and in connection with any
\ninvestigation or other inquiry, including any proceeding initiated by a private
\nparty; (ii) promptly inform the other party of any communication received by
\nsuch party from, or given by such party to, the FCC, PUCs, the Antitrust
\nDivision of the Department of Justice (the “DOJ”) or any other Governmental
\nEntity and of any material communication received or given in connection with
\nany proceeding by a private party, in each case regarding any of the
\ntransactions contemplated hereby, and (iii) permit the other party to review
\nany communications given by it to, and consult with each other in advance to
\nthe extent practicable of any meeting or conference with, the FCC, PUCs, the
\nDOJ or any such other Governmental Entity or, in connection with any proceeding
\nby a private party, with any other Person, and to the extent permitted by the
\nFCC, PUCs, the DOJ or such other applicable Governmental Entity or other
\nPerson, give the other party the opportunity to attend and participate in such
\nmeetings and conferences.<\/p>\n
(c) In furtherance and not in limitation of the covenants of the parties
\ncontained in Sections 5.3(a) and 5.3(b), if any administrative or judicial
\naction or proceeding, including any proceeding by a private party, is
\ninstituted (or threatened to be instituted) challenging any transaction
\ncontemplated by this Agreement as violative of any Regulatory Law, or if any
\nstatute, rule, regulation, executive order, decree, injunction or
\nadministrative order is enacted, entered, promulgated or enforced by a
\nGovernmental Entity which would make the Merger or the transactions
\ncontemplated hereby illegal or would otherwise prohibit or materially impair or
\ndelay the consummation of the Merger or the transactions contemplated hereby,
\neach of MCI WorldCom and Sprint shall cooperate in all respects with each other
\nand use its respective reasonable best efforts to contest and resist any such
\naction or proceeding and to have vacated, lifted, reversed or overturned any
\ndecree, judgment, injunction or other order, whether temporary, preliminary or
\npermanent, that is in effect and that prohibits, prevents or restricts
\nconsummation of the Merger or the transactions contemplated by this Agreement
\nand to have such statute, rule, regulation, executive order, decree, injunction
\nor administrative order repealed, rescinded or made inapplicable.
\nNotwithstanding the foregoing or any other provision of this Agreement, nothing
\nin this Section 5.3 shall limit a party’s right to terminate this Agreement
\npursuant to Section 7.1(b) or 7.1(c) so long as such party has up to then
\ncomplied in all respects with its obligations under this Section 5.3. For
\npurposes of this Agreement, “Regulatory Law” means the Sherman Act, as amended,
\nthe Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as
\namended, the Federal Communications Act, as amended, Regulation 4064\/89 and all
\nother Federal, state and foreign, if any, statutes, rules, regulations, orders,
\ndecrees, administrative and judicial doctrines and other laws that are designed
\nor intended to regulate mergers, acquisitions or other business combinations.<\/p>\n
(d) Sprint and its Board of Directors shall, if any state takeover statute
\nor similar statute becomes applicable to this Agreement, the Merger or any
\nother transactions contemplated hereby or thereby, take all action reasonably
\nnecessary to ensure that the Merger and the other transactions contemplated by
\nthis Agreement may be consummated as promptly as practicable on the terms
\ncontemplated hereby or thereby and<\/p>\n
1-28<\/p>\n
otherwise to minimize the effect of such statute or regulation on this
\nAgreement, the Merger and the other transactions contemplated hereby.<\/p>\n
(e) MCI WorldCom and its Board of Directors shall, if any state takeover
\nstatute or similar statute becomes applicable to this Agreement, the Merger or
\nany other transactions contemplated hereby, to the extent legally permissible
\ntake all action reasonably necessary to ensure that the Merger and the other
\ntransactions contemplated by this Agreement may be consummated as promptly as
\npracticable on the terms contemplated hereby and otherwise to minimize the
\neffect of such statute or regulation on this Agreement, the Merger and the
\nother transactions contemplated hereby.<\/p>\n
5.4 No Solicitation by Sprint. (a) Sprint shall not, nor shall it permit any
\nof its Subsidiaries to, nor shall it authorize or permit any of its directors,
\nofficers or employees or any investment banker, financial advisor, attorney,
\naccountant or other representative retained by it or any of its Subsidiaries
\nto, directly or indirectly through another Person, (i) solicit, initiate or
\nknowingly encourage (including by way of furnishing information), or knowingly
\ntake any other action to facilitate, the making of any proposal that
\nconstitutes a Sprint Competing Proposal or (ii) participate in any discussions
\nor negotiations regarding any Sprint Competing Proposal; provided, however,
\nthat if, at any time during the period commencing on the 61st day after the
\ndate hereof and ending on the date the Required Sprint Vote is obtained (the
\n“Sprint Applicable Period”), the Board of Directors of Sprint, in the exercise
\nof its fiduciary duties, determines in good faith, after consultation with
\noutside counsel, that to do otherwise would not be in the best interests of
\nSprint’s stockholders, Sprint and its representatives may, in response to a
\nSprint Superior Proposal which did not result from a breach of this Section
\n5.4(a), and subject to providing prior or contemporaneous notice of its
\ndecision to take such action to MCI WorldCom, (x) furnish information with
\nrespect to Sprint and its Subsidiaries to any Person making a Sprint Superior
\nProposal pursuant to a customary confidentiality agreement (as determined by
\nSprint after consultation with its outside counsel) and (y) participate in
\ndiscussions or negotiations regarding such Sprint Superior Proposal. This
\nSection 5.4 is subject to Section 5.4 of the Sprint Disclosure Schedule. For
\npurposes of this Agreement, “Sprint Competing Proposal” means any bona fide
\nproposal or offer from any Person relating to any direct or indirect
\nacquisition or purchase of 20% or more of the assets of Sprint and its
\nSubsidiaries, taken as a whole, or 20% or more of the combined voting power of
\nthe shares of Sprint Common Stock, any tender offer or exchange offer that if
\nconsummated would result in any Person beneficially owning 20% or more of the
\ncombined voting power of the shares of Sprint Common Stock, or any merger,
\nconsolidation, business combination, recapitalization, liquidation, dissolution
\nor similar transaction involving Sprint or any of its Subsidiaries in which the
\nother party thereto or its stockholders will own 20% or more of the combined
\nvoting power of the parent entity resulting from any such transaction, other
\nthan the transactions contemplated by this Agreement. For purposes of this
\nAgreement, a “Sprint Superior Proposal” means (i) any proposal made by a third
\nparty relating to any direct or indirect acquisition or purchase of 50% or more
\nof the assets of Sprint and its Subsidiaries, taken as a whole, or 50% or more
\nof the combined voting power of the shares of Sprint Common Stock, any tender
\noffer or exchange offer that if consummated would result in any Person
\nbeneficially owning 50% or more of the combined voting power of the shares of
\nSprint Common Stock or any merger, consolidation, business combination,
\nrecapitalization, liquidation, dissolution or similar transaction involving
\nSprint or any of its Subsidiaries in which the other party thereto or its
\nstockholders will own 40% or more of the combined voting power of the parent
\nentity resulting from any such transaction and (ii) otherwise on terms which
\nthe Board of Directors of Sprint determines in its good faith judgment (based
\non the advice of a financial advisor of nationally recognized reputation),
\ntaking into account the Person making the proposal and the legal, financial,
\nregulatory and other aspects of the proposal deemed appropriate by the Board of
\nDirectors of Sprint, (x) would be more favorable than the Merger to Sprint’s
\nstockholders taken as a whole, (y) is reasonably capable of being completed and
\n(z) for which financing, to the extent required, is then committed or is
\nreasonably capable of being obtained by such third party.<\/p>\n
(b) Neither the Board of Directors of Sprint nor any committee thereof shall
\n(i) withdraw, or propose publicly to withdraw, in a manner adverse to MCI
\nWorldCom, the approval or recommendation by such Board of Directors or such
\ncommittee of the Merger or this Agreement, (ii) subject to Section 5.4(d),
\nmodify, or<\/p>\n
1-29<\/p>\n
propose publicly to modify, in a manner adverse to MCI WorldCom, the approval
\nor recommendation by such Board of Directors or such committee of the Merger or
\nthis Agreement, (iii) approve or recommend, or propose publicly to approve or
\nrecommend, any Sprint Competing Proposal or (iv) approve or recommend, or
\npropose to approve or recommend, or execute or enter into, any letter of
\nintent, agreement in principle, merger agreement, acquisition agreement, option
\nagreement or other similar agreement or propose publicly or agree to do any of
\nthe foregoing (each, a “Sprint Acquisition Agreement”) related to any Sprint
\nCompeting Proposal. Notwithstanding the foregoing, during the Sprint Applicable
\nPeriod, in response to a Sprint Superior Proposal which did not result from a
\nbreach of Section 5.4(a), if the Board of Directors of Sprint, in the exercise
\nof its fiduciary duties, determines in good faith, after consultation with
\noutside counsel, that to do otherwise would not be in the best interests of
\nSprint’s stockholders, the Board of Directors of Sprint may (x) modify or
\npropose publicly to modify, in a manner adverse to MCI WorldCom, the approval
\nor recommendation of the Merger or this Agreement by the Board of Directors of
\nSprint and\/or (y) terminate this Agreement (and concurrently with or after such
\ntermination, if it so chooses, cause Sprint to enter into any Sprint
\nAcquisition Agreement with respect to any Sprint Superior Proposal), but, in
\nthe case of clause (y), only at a time that is during the Sprint Applicable
\nPeriod and is after the fourth Business Day (or the second calendar day in the
\ncase of a material amendment to a Sprint Superior Proposal) following MCI
\nWorldCom’s receipt of written notice advising MCI WorldCom that the Board of
\nDirectors of Sprint is prepared to accept a Sprint Superior Proposal (or any
\nmaterial amendment thereto), specifying the material terms and conditions of
\nsuch Sprint Superior Proposal (or any material amendment thereto) and
\nidentifying the Person making such Sprint Superior Proposal (or any material
\namendment thereto).<\/p>\n
(c) In addition to the obligations of Sprint set forth in paragraphs (a) and
\n(b) of this Section 5.4, Sprint shall promptly advise MCI WorldCom of any
\nSprint Competing Proposal or any inquiry or request for information relating
\nthereto, the material terms and conditions of such request or Sprint Competing
\nProposal and the identity of the Person making such request or Sprint Competing
\nProposal. Sprint will promptly keep MCI WorldCom reasonably informed of the
\nstatus (including amendments) of any such request or Sprint Competing Proposal.<\/p>\n
(d) Nothing contained in this Section 5.4 shall prohibit Sprint from taking
\nand disclosing to its stockholders a position contemplated by Rule 14d-9 or
\n14e-2 promulgated under the Exchange Act or from making any disclosure to
\nSprint’s stockholders if, in the good faith judgment of the Board of Directors
\nof Sprint, after consultation with outside counsel, failure so to disclose
\nwould be inconsistent with its obligations under applicable law; provided,
\nhowever, that, subject to Section 5.4(b), neither Sprint nor its Board of
\nDirectors nor any committee thereof shall withdraw, or propose publicly to
\nwithdraw, its position with respect to this Agreement or the Merger or approve
\nor recommend, or propose publicly to approve or recommend, a Sprint Competing
\nProposal.<\/p>\n
5.5 No Solicitation by MCI WorldCom. (a) MCI WorldCom shall not, nor shall
\nit permit any of its Subsidiaries to, nor shall it authorize or permit any of
\nits directors, officers or employees or any investment banker, financial
\nadvisor, attorney, accountant or other representative retained by it or any of
\nits Subsidiaries to, directly or indirectly through another Person, (i)
\nsolicit, initiate or knowingly encourage (including by way of furnishing
\ninformation), or knowingly take any other action to facilitate, the making of
\nany proposal that constitutes an MCI WorldCom Competing Proposal or (ii)
\nparticipate in any discussions or negotiations regarding any MCI WorldCom
\nCompeting Proposal; provided, however, that if, at any time during the period
\ncommencing on the 61st day after the date hereof and ending on the date
\nRequired MCI WorldCom Vote is obtained (the “MCI WorldCom Applicable Period”),
\nthe Board of Directors of MCI WorldCom, in the exercise of its fiduciary
\nduties, determines in good faith, after consultation with outside counsel, that
\nto do otherwise would not be in the best interests of MCI WorldCom’s
\nshareholders, MCI WorldCom and its representatives may, in response to an MCI
\nWorldCom Superior Proposal which did not result from a breach of this Section
\n5.5(a), and subject to providing prior or contemporaneous notice of its
\ndecision to take such action to Sprint, (x) furnish information with respect to
\nMCI WorldCom and its Subsidiaries to any Person making an MCI WorldCom Superior
\nProposal pursuant to a customary confidentiality agreement (as determined by
\nMCI<\/p>\n
1-30<\/p>\n
WorldCom after consultation with its outside counsel) and (y) participate in
\ndiscussions or negotiations regarding such MCI WorldCom Superior Proposal. For
\npurposes of this Agreement, “MCI WorldCom Competing Proposal” means any bona
\nfide proposal or offer from any Person relating to any direct or indirect
\nacquisition or purchase of 20% or more of the assets of MCI WorldCom and its
\nSubsidiaries, taken as a whole, or 20% or more of the combined voting power of
\nthe shares of MCI WorldCom Common Stock, any tender offer or exchange offer
\nthat if consummated would result in any Person beneficially owning 20% or more
\nof the combined voting power of the shares of MCI WorldCom Common Stock, or any
\nmerger, consolidation, business combination, recapitalization, liquidation,
\ndissolution or similar transaction involving MCI WorldCom or any of its
\nSubsidiaries in which the other party thereto or its shareholders will own 20%
\nor more of the combined voting power of the shares of the parent entity
\nresulting from any such transaction, other than the transactions contemplated
\nby this Agreement. For purposes of this Agreement, an “MCI WorldCom Superior
\nProposal” means (i) (A) any proposal made by a third party relating to any
\ndirect or indirect acquisition or purchase of 50% or more of the assets of MCI
\nWorldCom and its Subsidiaries, taken as a whole, or 50% or more of the combined
\nvoting power of the shares of MCI WorldCom Common Stock, any tender offer or
\nexchange offer that if consummated would result in any Person beneficially
\nowning 50% or more of the combined voting power of the shares of MCI WorldCom
\nCommon Stock, or (B) any merger, consolidation, business combination,
\nrecapitalization, liquidation, dissolution or similar transaction involving MCI
\nWorldCom or any of its Subsidiaries in which (1) the other party thereto or its
\nshareholders will own 50% or more of the combined voting power of the shares of
\nthe parent entity resulting from any such transaction and (2) representatives
\nof such other party shall represent a majority of the Board of Directors of
\nsuch parent entity, and (ii) otherwise on terms which the Board of Directors of
\nMCI WorldCom determines in its good faith judgment (based on the advice of a
\nfinancial advisor of nationally recognized reputation), taking into account the
\nPerson making the proposal and the legal, financial, regulatory and other
\naspects of the proposal deemed appropriate by the Board of Directors of MCI
\nWorldCom, (x) would be more favorable than the Merger to MCI WorldCom’s
\nshareholders taken as a whole, (y) is reasonably capable of being completed and
\n(z) for which financing, to the extent required, is then committed or is
\nreasonably capable of being obtained by such third party.<\/p>\n
(b) Neither the Board of Directors of MCI WorldCom nor any committee thereof
\nshall (i) withdraw, or propose publicly to withdraw, in a manner adverse to
\nSprint, the approval or recommendation by such Board of Directors or such
\ncommittee of the Merger or this Agreement, (ii) subject to Section 5.5(d),
\nmodify, or propose publicly to modify, in a manner adverse to Sprint, the
\napproval or recommendation by such Board of Directors or such committee of the
\nMerger or this Agreement, (iii) approve or recommend, or propose publicly to
\napprove or recommend, any MCI WorldCom Competing Proposal or (iv) approve or
\nrecommend, or propose to approve or recommend, or execute or enter into, any
\nletter of intent, agreement in principle, merger agreement, acquisition
\nagreement, option agreement or other similar agreement or propose publicly or
\nagree to do any of the foregoing (each, an “MCI WorldCom Acquisition
\nAgreement”) related to any MCI WorldCom Competing Proposal. Notwithstanding the
\nforegoing, during the MCI WorldCom Applicable Period, in response to an MCI
\nWorldCom Superior Proposal which did not result from a breach of Section
\n5.5(a), if the Board of Directors of MCI WorldCom, in the exercise of its
\nfiduciary duties, determines in good faith, after consultation with outside
\ncounsel, that to do otherwise would not be in the best interests of MCI
\nWorldCom’s shareholders, the Board of Directors of MCI WorldCom may (x) modify
\nor propose publicly to modify, in a manner adverse to Sprint, the approval or
\nrecommendation of the Merger or this Agreement by the Board of Directors of MCI
\nWorldCom and\/or (y) terminate this Agreement (and concurrently with or after
\nsuch termination, if it so chooses, cause MCI WorldCom to enter into any MCI
\nWorldCom Acquisition Agreement with respect to any MCI WorldCom Superior
\nProposal), but, in the case of clause (y), only at a time that is during the
\nMCI WorldCom Applicable Period and is after the fourth Business Day (or the
\nsecond calendar day in the case of a material amendment to an MCI WorldCom
\nSuperior Proposal) following Sprint’s receipt of written notice advising Sprint
\nthat the Board of Directors of MCI WorldCom is prepared to accept an MCI
\nWorldCom Superior Proposal (or any material amendment thereto), specifying the
\nmaterial terms and conditions of such MCI WorldCom Superior Proposal (or any
\nmaterial amendment thereto) and identifying the Person making such MCI WorldCom
\nSuperior Proposal (or any material amendment thereto).<\/p>\n
1-31<\/p>\n
(c) In addition to the obligations of MCI WorldCom set forth in paragraphs
\n(a) and (b) of this Section 5.5, MCI WorldCom shall promptly advise Sprint of
\nany MCI WorldCom Competing Proposal or any inquiry or request for information
\nrelating thereto, the material terms and conditions of such request or MCI
\nWorldCom Competing Proposal and the identity of the Person making such request
\nor MCI WorldCom Competing Proposal. MCI WorldCom will promptly keep Sprint
\nreasonably informed of the status (including amendments) of any such request
\nor MCI WorldCom Competing Proposal.<\/p>\n
(d) Nothing contained in this Section 5.5 shall prohibit MCI WorldCom from
\ntaking and disclosing to its shareholders a position contemplated by Rule 14d-
\n9 or 14e-2 promulgated under the Exchange Act or from making any disclosure to
\nMCI WorldCom’s shareholders if, in the good faith judgment of the Board of
\nDirectors of MCI WorldCom, after consultation with outside counsel, failure so
\nto disclose would be inconsistent with its obligations under applicable law;
\nprovided, however, that, subject to Section 5.5(b), neither MCI WorldCom nor
\nits Board of Directors nor any committee thereof shall withdraw, or propose
\npublicly to withdraw, its position with respect to this Agreement or the
\nMerger or approve or recommend, or propose publicly to approve or recommend,
\nan MCI WorldCom Competing Proposal.<\/p>\n
5.6 Sprint Stock Options. (a) As soon as practicable following the date of
\nthis Agreement, the Board of Directors of Sprint (or, if appropriate, any
\ncommittee administering the Sprint Stock Option Plans) shall adopt such
\nresolutions or take such other actions as may be required to effect the
\nfollowing:<\/p>\n
(i) adjust the terms of all outstanding Sprint Stock Options (each, as
\n so adjusted, an “Adjusted Option”), whether vested or unvested, as
\n necessary to provide that, at the Effective Time, each Sprint Stock Option
\n outstanding immediately prior to the Effective Time shall be amended and
\n converted, on the same terms and conditions as were applicable under such
\n Sprint Stock Option, as follows:<\/p>\n
(A) each Sprint Stock Option to acquire shares of Sprint FON Stock
\n will be converted into an option to acquire the number of shares of MCI
\n WorldCom Common Stock determined by multiplying the number of shares of
\n Sprint FON Stock subject to such Sprint Stock Option by the FON
\n Exchange Ratio (rounded up to the nearest whole share) at an exercise
\n price determined by dividing the exercise price set forth in such
\n Sprint Stock Option by the FON Exchange Ratio (rounded up to the
\n nearest whole cent); and<\/p>\n
(B) each Sprint Stock Option to acquire shares of any class of
\n Sprint PCS Stock will be converted into an option to acquire:<\/p>\n
(x) an equivalent number of shares of MCI WorldCom Series 1 PCS
\n Stock at the same exercise price as the exercise price for such
\n Sprint PCS Stock plus<\/p>\n
(y) an amount of MCI WorldCom Common Stock for no additional
\n consideration equal to the number of shares of such Sprint PCS Stock
\n subject to such Sprint Stock Option multiplied by the PCS Exchange
\n Ratio, (rounded up to the nearest whole share) (the “MCI WorldCom
\n Common Stock Option Shares”), where such option shall automatically
\n be exercised (as part of the exercise of the option to acquire MCI
\n WorldCom Series 1 PCS Stock described in the preceding clause (x))
\n for a number of shares of MCI WorldCom Common Stock each time that
\n such option to acquire MCI WorldCom Series 1 PCS Stock is exercised,
\n and where the number of shares of MCI WorldCom Common Stock to be
\n acquired upon such exercise shall:<\/p>\n
(1) equal “Z” (rounded up to the nearest whole share), where
\n “Z” equals (i) the number of shares of MCI WorldCom Series 1 PCS
\n Stock to be acquired pursuant to such exercise of such option
\n multiplied by (ii) the PCS Exchange Ratio; or<\/p>\n
(2) equal the number of shares of MCI WorldCom Common Stock
\n which remain subject to such option, if such exercise is for all
\n the shares of MCI WorldCom Series 1 PCS Stock which remain
\n subject to such option;<\/p>\n
provided, however, that the maximum number of shares of MCI WorldCom
\n Common Stock issuable pursuant to all such exercises of an Adjusted
\n Option described in this Section<\/p>\n
1-32<\/p>\n
5.6(a)(i)(B) shall not in the aggregate exceed the number of MCI
\n WorldCom Common Stock Option Shares; and<\/p>\n
(ii) make such other changes to the Sprint Stock Option Plans as MCI
\n WorldCom and Sprint may agree are appropriate to give effect to the Merger.<\/p>\n
(b) The adjustments provided in this Section 5.6 with respect to any Sprint
\nStock Options to which Section 421(a) of the Code applies shall be and are
\nintended to be effected in a manner which is consistent with Section 424(a) of
\nthe Code.<\/p>\n
(c) Prior to the Effective Time, MCI WorldCom shall take all necessary
\nactions (including, if required to comply with Section 162(m) of the Code (and
\nthe regulations thereunder) or applicable law or rule of Nasdaq, obtaining the
\napproval of its shareholders at the next regularly scheduled annual meeting of
\nMCI WorldCom following the Effective Time) to assume as of the Effective Time
\nall obligations undertaken by, or on behalf of, Sprint under Section 5.6(a)
\nand to adopt at the Effective Time the Sprint Stock Option Plans and each
\nAdjusted Option and to take all other action called for in this Section 5.6,
\nincluding the reservation, issuance and listing of MCI WorldCom Capital Stock
\nin a number at least equal to the number of shares of MCI WorldCom Common
\nStock that will be subject to the Adjusted Options.<\/p>\n
(d) As soon as practicable following the Effective Time, MCI WorldCom shall
\nprepare and file with the SEC a registration statement on Form S-8 (or another
\nappropriate form) registering a number of shares of MCI WorldCom Common Stock
\nequal to the number of shares subject to the Adjusted Options. Such
\nregistration statement shall be kept effective (and the current status of the
\nprospectus or prospectuses required thereby shall be maintained) at least for
\nso long as any Adjusted Options or any unsettled awards granted under the
\nSprint Stock Option Plans after the Effective Time may remain outstanding.<\/p>\n
(e) As soon as practicable after the Effective Time, MCI WorldCom shall
\ndeliver to the holders of the Sprint Stock Options appropriate notices setting
\nforth such holders’ rights pursuant to the respective Sprint Stock Option
\nPlans and the agreements evidencing the grants of such Sprint Stock Options
\nand that such Sprint Stock Options and agreements shall be assumed by MCI
\nWorldCom and shall continue in effect on the same terms and conditions
\n(subject to the adjustments required by this Section 5.6 after giving effect
\nto the Merger).<\/p>\n
(f) Except as otherwise expressly provided in this Section 5.6 and except
\nto the extent required under the respective terms of the Sprint Stock Options,
\nall restrictions or limitations on transfer and vesting with respect to the
\nSprint Stock Options awarded under the Sprint Stock Option Plans or any other
\nplan, program or arrangement of Sprint or any of its Subsidiaries, to the
\nextent that such restrictions or limitations shall not have already lapsed,
\nand all other terms thereof, shall remain in full force and effect with
\nrespect to such options after giving effect to the Merger and the assumption
\nby MCI WorldCom as set forth above.<\/p>\n
5.7 Employee Matters. (a) During the one-year period following the
\nEffective Time (the “Transition Period”), MCI WorldCom shall maintain employee
\nbenefit plans, programs and policies for the employees of Sprint and its
\nSubsidiaries which, in the aggregate, are substantially comparable to the
\nemployee benefit plans, programs and policies provided by Sprint and its
\nSubsidiaries before the Effective Time (other than Sprint’s Employees Stock
\nPurchase Plan). Furthermore, no employee of Sprint or a Subsidiary of Sprint
\nshall have his or her base hourly rate of pay, base salary or bonus
\nopportunity reduced during the Transition Period except to the extent such
\nreduction is called for as a result of a violation of MCI WorldCom’s generally
\napplicable policies or a failure to satisfy MCI WorldCom’s generally
\napplicable performance standards for similarly situated MCI WorldCom
\nemployees. The participant accounts in each unfunded plan, program or policy
\nof Sprint and each Subsidiary of Sprint which are designed to track the
\nperformance of Sprint Capital Stock but which only pay benefits in cash shall
\nbe converted at the Effective Time to accounts which track the performance of
\nthe corresponding MCI WorldCom Capital Stock based upon the principles set
\nforth in this Agreement for converting Sprint Capital Stock to MCI WorldCom
\nCapital Stock except that there shall be no rounding up or down as part of
\nsuch conversions.<\/p>\n
1-33<\/p>\n
(b) During the one-year period following the Transition Period, the
\nemployees of Sprint and each Subsidiary of Sprint shall be eligible to
\nparticipate in employee benefit plans, programs and policies which, in the
\naggregate, are substantially comparable to the employee benefit plans, programs
\nand policies maintained by MCI WorldCom for similarly situated employees. Each
\nemployee of Sprint and each Subsidiary of Sprint shall receive full credit
\nunder each applicable MCI WorldCom plan, program or policy for his or her
\nservice as an employee of Sprint and any Subsidiary of Sprint on the same basis
\nthat he or she would have received such credit if such service had been
\ncompleted as an employee of MCI WorldCom for purposes of satisfying any service
\nrequirement to participate in such plan, program or policy (including any plan,
\nprogram or policy which provides post-retirement medical benefits) and any
\nservice requirement to receive a non-forfeitable interest in the benefits under
\nsuch plan, program or policy. Furthermore, if any such MCI WorldCom plan,
\nprogram or policy has any active employment requirements, pre-existing
\ncondition requirements, co-pay, coinsurance or deductible requirements in
\neffect for a year and an employee of Sprint or a Subsidiary of Sprint had
\nsatisfied (or had made payments towards satisfying) such requirements for a
\npart of such year as a participant in a Sprint plan, program or policy, such
\nemployee shall receive full credit for satisfying (or for payments made towards
\nsatisfying) such requirements in the MCI WorldCom plan, program or policy for
\nsuch year when he or she begins to participate in such plan, program or policy
\nand any such co-pay, coinsurance or deductible requirements for such year under
\nthe MCI WorldCom plan, program or policy shall be no greater than the co-pay,
\ncoinsurance or deductible requirement under the Sprint plan, program or policy
\nfor such year.<\/p>\n
(c) MCI WorldCom and Sprint will implement the provisions relating to Sprint
\nemployee matters set forth in Section 5.7 of the Sprint Disclosure Schedule.<\/p>\n
5.8 Fees and Expenses. (a) Whether or not the Merger is consummated, all
\nExpenses incurred in connection with this Agreement and the transactions
\ncontemplated hereby shall be paid by the party incurring such Expenses, except
\nExpenses incurred in connection with the filing, printing and mailing of the
\nForm S-4 and the Joint Proxy Statement\/Prospectus (including SEC filing fees)
\nand the filing fees for the premerger notification and report forms under the
\nHSR Act and for filings with the European Commission, which shall be shared
\nequally by MCI WorldCom and Sprint. As used in this Agreement, “Expenses”
\nincludes all out-of-pocket expenses (including all fees and expenses of
\ncounsel, accountants, investment bankers, experts and consultants to a party
\nhereto and its affiliates) incurred by a party or on its behalf in connection
\nwith or related to the authorization, preparation, negotiation, execution and
\nperformance of this Agreement and the transactions contemplated hereby,
\nincluding the preparation, printing, filing and mailing of the Form Su-4 and
\nthe Joint Proxy Statement\/Prospectus and the solicitation of stockholder
\napprovals and all other matters related to the transactions contemplated
\nhereby.<\/p>\n
(b) If (1) prior to the date the Required Sprint Vote is obtained a Sprint
\nCompeting Proposal shall have been made to Sprint or any of its Subsidiaries or
\nshall have been made directly to the stockholders of Sprint generally or any
\nPerson shall have publicly announced an intention (whether or not conditional)
\nto make a Sprint Competing Proposal and thereafter this Agreement is terminated
\nby either MCI WorldCom or Sprint pursuant to Section 7.1(b) without a Sprint
\nStockholders Meeting having occurred or 7.1(d)(i) or (2) this Agreement is
\nterminated (i) by Sprint pursuant to Section 7.1(e) or (ii) by MCI WorldCom
\npursuant to Section 7.1(j), then Sprint shall promptly, but in no event later
\nthan the date of such termination, pay MCI WorldCom a fee equal to $2.5 billion
\n(the “Termination Fee”), payable by wire transfer of same day funds; provided,
\nhowever, that no Termination Fee shall be payable to MCI WorldCom pursuant to
\nclause (1) or (2)(ii) of this paragraph (b) unless and until within 12 months
\nof such termination Sprint or any of its Subsidiaries enters into any Sprint
\nAcquisition Agreement with respect to, or approves or consummates, any Sprint
\nCompeting Proposal (for the purposes of the foregoing proviso the term “Sprint
\nCompeting Proposal” shall mean a Sprint Superior Proposal pursuant to clause
\n(i) (without giving effect to clause (ii)) of the definition thereof in Section
\n5.4(a), in which event the Termination Fee shall be payable upon the first to
\noccur of such events. Sprint acknowledges that the agreements contained in this
\nSection 5.8(b) are an integral part of the transactions contemplated by this
\nAgreement, and that, without these agreements, MCI WorldCom would not enter
\ninto this Agreement; accordingly, if Sprint fails promptly to pay the amount
\ndue pursuant to this Section 5.8(b), and, in<\/p>\n
1-34<\/p>\n
order to obtain such payment, MCI WorldCom commences a suit which results in a
\njudgment against Sprint for the fee set forth in this Section 5.8(b), Sprint
\nshall pay to MCI WorldCom its costs and expenses (including attorneys’ fees and
\nexpenses) in connection with such suit, together with interest on the amount of
\nthe fee at the prime rate of Citibank, N.A. in effect on the date such payment
\nwas required to be made.<\/p>\n
(c) If (1) prior to the date the Required MCI WorldCom Vote is obtained an
\nMCI WorldCom Competing Proposal shall have been made to MCI WorldCom or any of
\nits Subsidiaries or shall have been made directly to the shareholders of MCI
\nWorldCom generally or any Person shall have publicly announced an intention
\n(whether or not conditional) to make an MCI WorldCom Competing Proposal and
\nthereafter this Agreement is terminated by either MCI WorldCom or Sprint
\npursuant to Section 7.1(b) without an MCI WorldCom Shareholders Meeting having
\noccurred or 7.1(d)(ii) or (2) this Agreement is terminated (i) by MCI WorldCom
\npursuant to Section 7.1(f) or (ii) by Sprint pursuant to Section 7.1(i), then
\nMCI WorldCom shall promptly, but in no event later than the date of such
\ntermination, pay Sprint the Termination Fee, payable by wire transfer of same
\nday funds; provided, however, that no Termination Fee shall be payable to
\nSprint pursuant to clause (1) or (2)(ii) of this paragraph (c) unless and until
\nwithin 12 months of such termination MCI WorldCom or any of its Subsidiaries
\nenters into any MCI WorldCom Acquisition Agreement with respect to, or approves
\nor consummates, any MCI WorldCom Competing Proposal (for the purposes of the
\nforegoing proviso the term “MCI WorldCom Competing Proposal” shall mean an MCI
\nWorldCom Superior Proposal pursuant to clause (i) (without giving effect to
\nclause (ii)) of the definition thereof in Section 5.5(a), in which event the
\nTermination Fee shall be payable upon the first to occur of such events. MCI
\nWorldCom acknowledges that the agreements contained in this Section 5.8(c) are
\nan integral part of the transactions contemplated by this Agreement, and that,
\nwithout these agreements, Sprint would not enter into this Agreement;
\naccordingly, if MCI WorldCom fails promptly to pay the amount due pursuant to
\nthis Section 5.8(c), and, in order to obtain such payment, Sprint commences a
\nsuit which results in a judgment against MCI WorldCom for the fee set forth in
\nthis Section 5.8(c), MCI WorldCom shall pay to Sprint its costs and expenses
\n(including attorneys’ fees and expenses) in connection with such suit, together
\nwith interest on the amount of the fee at the prime rate of Citibank, N.A. in
\neffect on the date such payment was required to be made.<\/p>\n
5.9 Indemnification, Exculpation and Insurance. (a) MCI WorldCom agrees that
\nall rights to indemnification and exculpation from liabilities for acts or
\nomissions occurring at or prior to the Effective Time now existing in favor of
\nthe current or former directors or officers of Sprint and its Subsidiaries as
\nprovided in their respective articles of incorporation or by-laws (or
\ncomparable organizational documents) and any indemnification agreements of
\nSprint, the existence of which does not constitute a breach of this Agreement,
\nshall be assumed by MCI WorldCom, as the Surviving Corporation in the Merger,
\nwithout further action, as of the Effective Time and shall survive the Merger
\nand shall continue in full force and effect in accordance with their terms.<\/p>\n
(b) In the event that MCI WorldCom or any of its successors or assigns (i)
\nconsolidates with or merges into any other Person and is not the continuing or
\nsurviving corporation or entity of such consolidation or merger or (ii)
\ntransfers or conveys all or substantially all of its properties and assets to
\nany Person, then, and in each such case, proper provision will be made so that
\nthe successors and assigns of MCI WorldCom assume the obligations set forth in
\nthis Section 5.9.<\/p>\n
(c) For six years after the Effective Time, MCI WorldCom shall maintain in
\neffect Sprint’s current directors’ and officers’ liability insurance covering
\nacts or omissions occurring prior to the Effective Time with respect to those
\nPersons who are currently covered by Sprint’s directors’ and officers’
\nliability insurance policy on terms with respect to such coverage and amount no
\nless favorable than those of such policy in effect on the date hereof;
\nprovided, however, that in no event shall MCI WorldCom be required to expend in
\nany one year an amount in excess of 200% of the annual premiums currently paid
\nby Sprint for such insurance; and, provided, further, that if the annual
\npremiums of such insurance coverage exceed such amount, MCI WorldCom shall be
\nobligated to obtain a policy with the greatest coverage available for such
\namount.<\/p>\n
1-35<\/p>\n
5.10 Sprint Rights Agreement. The Board of Directors of Sprint shall take
\nall action to the extent necessary (including amending the Sprint Rights
\nAgreement) in order to render the Sprint Rights inapplicable to the Merger and
\nthe other transactions contemplated by this Agreement. Except in connection
\nwith the foregoing sentence or, with respect to a Sprint Superior Proposal,
\nconcurrently with or after a termination of this Agreement by Sprint in
\naccordance with Section 5.4(b), the Board of Directors of Sprint shall not,
\nwithout the prior written consent of MCI WorldCom, (a) amend the Sprint Rights
\nAgreement or (b) take any action with respect to, or make any determination
\nunder, the Sprint Rights Agreement, including a redemption of the Sprint
\nRights, in each case in order to facilitate a Sprint Competing Proposal.<\/p>\n
5.11 MCI WorldCom Rights Agreement. The Board of Directors of MCI WorldCom
\nshall take all action to the extent necessary (including amending the MCI
\nWorldCom Rights Agreement) in order to render the MCI WorldCom Rights
\ninapplicable to the Merger and the other transactions contemplated by this
\nAgreement. Except in connection with the foregoing sentence or, with respect to
\nan MCI WorldCom Superior Proposal, concurrently with or after a termination of
\nthis Agreement by MCI WorldCom in accordance with Section 5.5(b), the Board of
\nDirectors of MCI WorldCom shall not, without the prior written consent of
\nSprint, (a) amend the MCI WorldCom Rights Agreement or (b) take any action with
\nrespect to, or make any determination under, the MCI WorldCom Rights Agreement,
\nincluding a redemption of the MCI WorldCom Rights, in each case in order to
\nfacilitate an MCI WorldCom Competing Proposal. Notwithstanding the foregoing,
\nMCI WorldCom may amend the MCI WorldCom Rights Agreement to effect a
\ntransaction permitted by Section 4.2(c) of this Agreement.<\/p>\n
5.12 Public Announcements. Sprint and MCI WorldCom shall use all reasonable
\nefforts to develop a joint communications plan and each party shall use all
\nreasonable efforts (i) to ensure that all press releases and other public
\nstatements with respect to the transactions contemplated hereby shall be
\nconsistent with such joint communications plan, and (ii) unless otherwise
\nrequired by applicable law or by obligations pursuant to any listing agreement
\nwith or rules of any securities exchange, to consult with each other before
\nissuing any press release or otherwise making any public statement with respect
\nto this Agreement or the transactions contemplated hereby.<\/p>\n
5.13 Listing. MCI WorldCom shall use its reasonable best efforts to cause
\nthe shares of MCI WorldCom Common Stock and MCI WorldCom Series 1 PCS Stock to
\nbe issued in the Merger to be approved for quotation on Nasdaq, subject to
\nofficial notice of issuance.<\/p>\n
5.14 Redemption of Sprint First Series Preferred Stock and Sprint Second
\nSeries Preferred Stock. Prior to the Effective Time, Sprint shall have redeemed
\nall the issued and outstanding shares of Sprint First Series Preferred Stock
\nand Sprint Second Series Preferred Stock in accordance with the terms of
\nSprint’s articles of incorporation.<\/p>\n
5.15 Affiliate Letter. On or prior to the date of the Sprint Stockholders
\nMeeting, Sprint will deliver to MCI WorldCom a letter (the “Sprint Affiliate
\nLetter”) identifying all Persons who are, or may be, “affiliates” of Sprint for
\npurposes of Rule 145 under the Securities Act (“Rule 145”). On or prior to the
\nClosing Date, Sprint will use its reasonable efforts to deliver on behalf of
\neach Person identified as an “affiliate” in the Sprint Affiliate Letter a
\nwritten agreement in connection with restrictions on affiliates under Rule 145.<\/p>\n
5.16 Tax Treatment. Each of MCI WorldCom and Sprint shall use reasonable
\nefforts to cause the Merger to qualify as a “reorganization” under the
\nprovisions of Section 368 of the Code and to obtain the opinions of counsel
\nreferred to in Sections 6.2(c) and 6.3(c), including the execution of the
\nletters of representation referred to therein updated as necessary. Sprint and
\nMCI WorldCom and their respective Subsidiaries shall treat the MCI WorldCom
\nCommon Stock, MCI WorldCom PCS Stock and MCI WorldCom<\/p>\n
1-36<\/p>\n
Series 2 Common Stock (together, the “MCI WorldCom Relevant Stock”) received in
\nthe Merger by holders of Sprint Common Stock as property permitted to be
\nreceived under Section 354 of the Code without the recognition of gain. Each of
\nSprint and MCI WorldCom covenants and agrees to, and agrees to cause its
\naffiliates to, vigorously and in good faith defend all challenges to the
\ntreatment of the reorganization as described in this Section 5.16, including
\nany such challenge to the treatment of the MCI WorldCom Relevant Stock as
\nproperty permitted to be received under Section 354 of the Code without the
\nrecognition of gain. Each of Sprint and MCI WorldCom agrees that if it becomes
\naware of any such fact or circumstance that is reasonably likely to prevent the
\nMerger from qualifying as a reorganization described in Section 368(a) of the
\nCode, including any such fact or circumstance that is reasonably likely to
\nprevent the MCI WorldCom Relevant Stock from being treated as property
\npermitted to be received under Section 354 of the Code without the recognition
\nof gain, it will promptly notify the other party in writing.<\/p>\n
5.17 Assumption Agreement and Supplemental Indentures. Prior to or at the
\nEffective Time, MCI WorldCom will execute and deliver (a) a written instrument
\nto Sprint evidencing its obligation to deliver to each holder of a warrant
\ngranted pursuant to one of the Warrant Agreements other securities, cash or
\nother assets as such holder may be entitled to purchase and the other
\nobligations under the applicable Warrant Agreement, and (b) a supplemental
\nindenture to each of the trustees with respect to the indentures named in
\nSection 5.17 of the Sprint Disclosure Schedule, in form satisfactory to each
\nsuch trustee, as required under such indentures.<\/p>\n
5.18 Other Actions. Sprint will use reasonable efforts to cooperate with any
\nrequest by MCI WorldCom to transfer certain assets of Sprint to any Subsidiary
\nof Sprint, so long as such transfer(s) (a) would be permitted by applicable
\nregulations, laws and contracts, (b) would not, individually or in the
\naggregate, adversely affect Sprint and (c) would be executed by Sprint at any
\ntime (as determined by Sprint) prior to the Effective Time.<\/p>\n
ARTICLE VI<\/p>\n
Conditions Precedent<\/p>\n
6.1 Conditions to Each Party’s Obligation to Effect the Merger. The
\nobligations of Sprint and MCI WorldCom to effect the Merger are subject to the
\nsatisfaction or waiver on or prior to the Closing Date of the following
\nconditions:<\/p>\n
(a) Stockholder Approvals. (i) Sprint shall have obtained the Required
\nSprint Vote and (ii) MCI WorldCom shall have obtained the Required MCI WorldCom
\nVote.<\/p>\n
(b) No Injunctions or Restraints; Illegality. No Laws shall have been
\nadopted or promulgated, and no temporary restraining order, preliminary or
\npermanent injunction or other order issued by a court or other Governmental
\nEntity of competent jurisdiction shall be in effect, having the effect of
\nmaking the Merger illegal or otherwise prohibiting consummation of the Merger;
\nprovided, however, that the provisions of this Section 6.1(b) shall not be
\navailable to any party whose failure to fulfill its obligations pursuant to
\nSection 5.3 shall have been the cause of, or shall have resulted in, such order
\nor injunction.<\/p>\n
(c) FCC and Public Utility Commission Approvals. All approvals for the
\nMerger from the FCC and from the PUCs shall have been obtained other than those
\nthe failure of which to be obtained would not, individually or in the
\naggregate, reasonably be expected to materially impair the parties’ ability to
\nachieve the overall benefits expected, as of the date hereof, to be realized
\nfrom the consummation of the Merger; provided, however, that the provisions of
\nthis Section 6.1(c) shall not be available to any party whose failure to
\nfulfill its obligations pursuant to Section 5.3 shall have been the cause of,
\nor shall have resulted in, such failure.<\/p>\n
(d) HSR Act. The waiting period (and any extension thereof) applicable to
\nthe Merger under the HSR Act shall have been terminated or shall have expired;
\nprovided, however, that the provisions of this Section<\/p>\n
1-37<\/p>\n
6.1(d) shall not be available to any party whose failure to fulfill its
\nobligations pursuant to Section 5.3 shall have been the cause of, or shall have
\nresulted in, the failure to obtain such termination or expiration.<\/p>\n
(e) EU Antitrust. To the extent that such a decision is required by
\nRegulation 4064\/89, MCI WorldCom and Sprint shall have received in respect of
\nthe Merger and any matters arising therefrom: confirmation by way of a decision
\nfrom the Commission of the European Union under Regulation 4064\/89 (with or
\nwithout the initiation of proceedings under Article 6(1)(c) thereof) that the
\nMerger and any matters arising therefrom are compatible with the common market;
\nprovided, however, that the provisions of this Section 6.1(e) shall not be
\navailable to any party whose failure to fulfill its obligations pursuant to
\nSection 5.3 shall have been the cause of, or shall have resulted in, the
\nfailure to obtain such confirmation.<\/p>\n
(f) Nasdaq Listing. The shares of MCI WorldCom Common Stock and MCI WorldCom
\nSeries 1 PCS Stock to be issued in the Merger shall have been approved for
\nquotation on Nasdaq, subject to official notice of issuance.<\/p>\n
(g) Effectiveness of the Form S-4. The Form S-4 shall have been declared
\neffective by the SEC under the Securities Act. No stop order suspending the
\neffectiveness of the Form S-4 shall have been issued by the SEC and no
\nproceedings for that purpose shall have been initiated or threatened by the
\nSEC.<\/p>\n
6.2 Additional Conditions to Obligations of MCI WorldCom. Other than as set
\nforth in the Sprint Disclosure Schedule, the obligations of MCI WorldCom to
\neffect the Merger are subject to the satisfaction of, or waiver by MCI
\nWorldCom, on or prior to the Closing Date of the following additional
\nconditions:<\/p>\n
(a) Representations and Warranties. (i) Each of the representations and
\nwarranties (other than as set forth in Section 3.1(b)(i), (ii) and (iii)) of
\nSprint set forth in this Agreement shall be true and correct on the date of
\nthis Agreement, and as of the Closing Date, as if made at and as of such time
\n(except to the extent expressly made as of an earlier date, in which case as of
\nsuch date), except for changes expressly permitted under Article IV and except
\nwhere the failure of such representations and warranties to be so true and
\ncorrect (without giving effect to any limitation as to “materiality” or
\n“Material Adverse Effect” set forth therein), individually or in the aggregate,
\ndoes not have, and is not reasonably likely to have, a Material Adverse Effect
\non Sprint, and (ii) the representations and warranties of Sprint set forth in
\nSection 3.1(b)(i), (ii) and (iii) shall be true and correct in all material
\nrespects on the date of this Agreement, and as of the Closing Date, as if made
\nat and as of such time (except to the extent expressly made as of an earlier
\ndate, in which case as of such date), except for changes expressly permitted
\nunder Article IV. MCI WorldCom shall have received a certificate of the chief
\nexecutive officer and the chief financial officer of Sprint to such effect.<\/p>\n
(b) Performance of Obligations of Sprint. Sprint shall have performed or
\ncomplied in all material respects with all material agreements and covenants
\nrequired to be performed by it or complied with under this Agreement at or
\nprior to the Closing Date. MCI WorldCom shall have received a certificate of
\nthe chief executive officer and the chief financial officer of Sprint to such
\neffect.<\/p>\n
(c) Tax Opinion. MCI WorldCom shall have received from Cravath, Swaine & Moore, counsel to MCI WorldCom, on the date on which the Form S-4 is declared
\neffective by the SEC and on the Closing Date, a written opinion dated as of
\nsuch date stating that: (i) the Merger will qualify as a “reorganization”
\nwithin the meaning of Section 368(a) of the Code, (ii) MCI WorldCom and Sprint
\nwill each be a “party” to that reorganization within the meaning of Section
\n368(b) of the Code and (iii) the issuance of the MCI WorldCom Relevant Stock to
\nthe holders of the Sprint Common Stock in the Merger will not result in MCI
\nWorldCom’s recognizing an amount of income or gain or being subject to an
\namount of tax, in each case that individually or in the aggregate, is
\nreasonably likely to have a Material Adverse Effect on MCI WorldCom. In
\nrendering such opinions, counsel to MCI WorldCom shall be entitled to rely upon
\nrepresentations of officers of MCI WorldCom and Sprint substantially in the
\nform of Appendices 3 and 4, respectively, and updated as necessary. The
\nopinions shall be in substantially the same form as Appendix 1.<\/p>\n
1-38<\/p>\n
(d) No Material Adverse Change. Since the date of this Agreement, there
\nshall not have been any Material Adverse Change in Sprint.<\/p>\n
6.3 Additional Conditions to Obligations of Sprint. The obligations of
\nSprint to effect the Merger are subject to the satisfaction of, or waiver by
\nSprint, on or prior to the Closing Date of the following additional conditions:<\/p>\n
(a) Representations and Warranties. (i) Each of the representations and
\nwarranties (other than as set forth in Section 3.2(b)(i), (ii) and (iii)) of
\nMCI WorldCom set forth in this Agreement shall be true and correct on the date
\nof this Agreement and as of the Closing Date, as if made at and as of such time
\n(except to the extent expressly made as of an earlier date, in which case as of
\nsuch date), except for changes expressly permitted under Article IV and except
\nwhere the failure of such representations and warranties to be so true and
\ncorrect (without giving effect to any limitation as to “materiality” or
\n“Material Adverse Effect” set forth therein), individually or in the aggregate,
\ndoes not have, and is not reasonably likely to have, a Material Adverse Effect
\non MCI WorldCom, and (ii) the representations and warranties of MCI WorldCom
\nset forth in Section 3.2(b)(i), (ii) and (iii) shall be true and correct in all
\nmaterial respects on the date of this Agreement, and as of the Closing Date, as
\nif made at and as of such time (except to the extent expressly made as of an
\nearlier date, in which case as of such date). Sprint shall have received a
\ncertificate of the chief executive officer and the chief financial officer of
\nMCI WorldCom to such effect.<\/p>\n
(b) Performance of Obligations of MCI WorldCom. MCI WorldCom shall have
\nperformed or complied in all material respects with all material agreements and
\ncovenants required to be performed by it or complied with under this Agreement
\nat or prior to the Closing Date. Sprint shall have received a certificate of
\nthe chief executive officer and the chief financial officer of MCI WorldCom to
\nsuch effect.<\/p>\n
(c) Tax Opinion. Sprint shall have received from King & Spalding, counsel to
\nSprint, on the date on which the Form S-4 is declared effective by the SEC and
\non the Closing Date, a written opinion dated as of such date stating that: (i)
\nthe Merger will qualify as a “reorganization” within the meaning of Section
\n368(a) of the Code, (ii) Sprint and MCI WorldCom will each be a “party” to that
\nreorganization within the meaning of Section 368(b) of the Code and (iii) the
\nMCI WorldCom Relevant Stock received in the Merger by holders of Sprint Common
\nStock is property permitted to be received under Section 354 of the Code
\nwithout the recognition of gain. In rendering such opinions, counsel to Sprint
\nshall be entitled to rely upon representations of officers of MCI WorldCom and
\nSprint substantially in the form of Appendices 3 and 4, respectively, and
\nupdated as necessary. The opinions shall be in substantially the same form as
\nAppendix 2.<\/p>\n
(d) No Material Adverse Change. Since the date of this Agreement, there
\nshall not have been any Material Adverse Change in MCI WorldCom.<\/p>\n
ARTICLE VII<\/p>\n
Termination and Amendment<\/p>\n
7.1 Termination. This Agreement may be terminated at any time prior to the
\nEffective Time, by action taken or authorized by the Board of Directors of the
\nterminating party or parties, and except as provided below, whether before or
\nafter approval of the matters presented in connection with the Merger by the
\nstockholders of Sprint or MCI WorldCom:<\/p>\n
(a) By mutual written consent of MCI WorldCom and Sprint, by action of their
\nrespective Boards of Directors;<\/p>\n
(b) By either Sprint or MCI WorldCom if the Effective Time shall not have
\noccurred on or before December 31, 2000 (the “Termination Date”); provided,
\nhowever, that the right to terminate this Agreement under this Section 7.1(b)
\nshall not be available to any party whose failure to fulfill any obligation
\nunder this<\/p>\n
1-39<\/p>\n
Agreement (including Section 5.3) has caused, or resulted in, the failure of
\nthe Effective Time to occur on or before the Termination Date;<\/p>\n
(c) By either Sprint or MCI WorldCom if any Governmental Entity (i) shall
\nhave issued an order, decree or ruling or taken any other action permanently
\nrestraining, enjoining or otherwise prohibiting the transactions contemplated
\nby this Agreement, and such order, decree, ruling or other action shall have
\nbecome final and nonappealable or (ii) shall have failed to issue an order,
\ndecree or ruling or to take any other action (which order, decree, ruling or
\nother action the parties shall have used their reasonable best efforts to
\nobtain, in accordance with Section 5.3), in each case (i) and (ii) which is
\nnecessary to fulfill the conditions set forth in Sections 6.1(c), (d) and (e),
\nas applicable, and such denial of a request to issue such order, decree, ruling
\nor take such other action shall have become final and nonappealable; provided,
\nhowever, that the right to terminate this Agreement under this Section 7.1(c)
\nshall not be available to any party whose failure to comply with Section 5.3
\nhas caused or resulted in such action or inaction;<\/p>\n
(d) By either Sprint or MCI WorldCom if (i) the approval by the stockholders
\nof Sprint required for the consummation of the Merger shall not have been
\nobtained by reason of the failure to obtain the Required Sprint Vote at a duly
\nheld Sprint Stockholders Meeting or at any adjournment or postponement thereof
\nor (ii) the approval by the shareholders of MCI WorldCom required for the
\nconsummation of the Merger shall not have been obtained by reason of the
\nfailure to obtain the Required MCI WorldCom Vote at a duly held MCI WorldCom
\nShareholders Meeting or at any adjournment or postponement thereof;<\/p>\n
(e) By Sprint in accordance with Section 5.4(b); provided that, in order for
\nthe termination of this Agreement pursuant to this paragraph (e) to be deemed
\neffective, Sprint shall have complied with the notice provisions of Section 5.4
\nand shall have paid the Termination Fee in accordance with Section 5.8(b);<\/p>\n
(f) By MCI WorldCom in accordance with Section 5.5(b); provided that, in
\norder for the termination of this Agreement pursuant to this paragraph (f) to
\nbe deemed effective, MCI WorldCom shall have complied with the notice
\nprovisions of Section 5.5 and shall have paid the Termination Fee in accordance
\nwith Section 5.8(c);<\/p>\n
(g) By Sprint, if MCI WorldCom shall have breached or failed to perform any
\nof its representations, warranties, covenants or other agreements contained in
\nthis Agreement, which breach or failure to perform (A) would give rise to the
\nfailure of a condition set forth in Section 6.3(a) or (b) and (B) has not been
\nor is incapable of being cured by MCI WorldCom within 45 calendar days after
\nits receipt of written notice thereof from Sprint;<\/p>\n
(h) By MCI WorldCom, if Sprint shall have breached or failed to perform any
\nof its representations, warranties, covenants or other agreements contained in
\nthis Agreement, which breach or failure to perform (A) would give rise to the
\nfailure of a condition set forth in Section 6.2(a) or (b) and (B) has not been
\nor is incapable of being cured by Sprint within 45 calendar days after its
\nreceipt of written notice thereof from MCI WorldCom;<\/p>\n
(i) By Sprint, in the event that MCI WorldCom takes any action set forth in
\nSection 5.5(b)(x); or<\/p>\n
(j) By MCI WorldCom, in the event that Sprint takes any action set forth in
\nSection 5.4(b)(x).<\/p>\n
Notwithstanding anything else contained in this Agreement, the right to
\nterminate this Agreement under this Section 7.1 shall not be available to any
\nparty (a) that is in material breach of its obligations hereunder or (b) whose
\nfailure to fulfill its obligations or to comply with its covenants under this
\nAgreement has been the cause of, or resulted in, the failure to satisfy any
\ncondition to the obligations of either party hereunder.<\/p>\n
7.2 Effect of Termination. In the event of termination of this Agreement by
\neither Sprint or MCI WorldCom as provided in Section 7.1, this Agreement shall
\nforthwith become void and there shall be no liability or obligation on the part
\nof MCI WorldCom or Sprint or their respective directors or officers except with
\nrespect to Section 3.1(m), Section 3.2(m), the second sentence of Section 5.2,
\nSection 5.8, this Section 7.2<\/p>\n
1-40<\/p>\n
and Article VIII. Termination of this Agreement will not relieve a breaching
\nparty from liability for any willful and material breach by such party of any
\nof its representations, warranties, covenants or agreements set forth in this
\nAgreement.<\/p>\n
7.3 Amendment. This Agreement may be amended by the parties hereto, by
\naction taken or authorized by their respective Boards of Directors, at any time
\nbefore or after approval of the matters presented in connection with the Merger
\nby the stockholders of Sprint and MCI WorldCom, but, after any such approval,
\nno amendment shall be made which by law or in accordance with the rules of any
\nrelevant stock exchange requires further approval by such stockholders without
\nsuch further approval. This Agreement may not be amended except by an
\ninstrument in writing signed on behalf of each of the parties hereto.<\/p>\n
7.4 Extension; Waiver; Consent. At any time prior to the Effective Time, the
\nparties hereto, by action taken or authorized by their respective Boards of
\nDirectors, may, to the extent legally allowed, (i) extend the time for the
\nperformance of any of the obligations or other acts of the other parties
\nhereto, (ii) waive any inaccuracies in the representations and warranties
\ncontained herein or in any document delivered pursuant hereto and (iii) waive
\ncompliance with or give a consent under any of the agreements or conditions
\ncontained herein. Any agreement on the part of a party hereto to any such
\nextension, waiver or consent shall be valid only if set forth in a written
\ninstrument signed on behalf of such party in its sole discretion. The failure
\nof any party to this Agreement to assert any of its rights under this Agreement
\nor otherwise shall not constitute a waiver of those rights.<\/p>\n
ARTICLE VIII<\/p>\n
General Provisions<\/p>\n
8.1 Non-Survival of Representations, Warranties and Agreements. None of the
\nrepresentations, warranties, covenants and other agreements in this Agreement
\nor in any instrument delivered pursuant to this Agreement, including any rights
\narising out of any breach of such representations, warranties, covenants and
\nother agreements, shall survive the Effective Time, except for those covenants
\nand agreements contained herein that by their terms apply or are to be
\nperformed in whole or in part after the Effective Time and this Article VIII.<\/p>\n
8.2 Notices. All notices and other communications hereunder shall be in
\nwriting and shall be deemed duly given (a) on the date of delivery if delivered
\npersonally, or by telecopy or telefacsimile, upon confirmation of receipt, (b)
\non the first Business Day following the date of dispatch if delivered by a
\nrecognized next-day courier service, or (c) on the tenth Business Day following
\nthe date of mailing if delivered by registered or certified mail, return
\nreceipt requested, postage prepaid. All notices hereunder shall be delivered as
\nset forth below, or pursuant to such other instructions as may be designated in
\nwriting by the party to receive such notice:<\/p>\n
(a) if to MCI WorldCom, to<\/p>\n
MCI WORLDCOM, Inc
\n 1801 Pennsylvania Avenue, NW
\n Washington, DC 20006<\/p>\n
Attention: Michael Salsbury, Esq.
\n Facsimile No.: 202-887-3353<\/p>\n
MCI WORLDCOM, Inc
\n 10777 Sunset Office Drive, Suite 330
\n St. Louis, MO 63127<\/p>\n
Attention: P. Bruce Borghardt, Esq.
\n Facsimile No.: 314-909-4101<\/p>\n
1-41<\/p>\n
with a copy to<\/p>\n
Cravath, Swaine & Moore
\n Worldwide Plaza
\n 825 Eighth Avenue
\n New York, New York 10019
\n Attention: Robert A. Kindler, Esq.
\n Robert I. Townsend, III, Esq.
\n Facsimile No.: 212-474-3700<\/p>\n
(b) if to Sprint, to<\/p>\n
Sprint Corporation
\n 2330 Shawnee Mission Parkway
\n Westwood, KS 66205<\/p>\n
Attention: J. Richard Devlin, Esq.
\n Facsimile No.: 913-624-8426<\/p>\n
Sprint Corporation
\n 2330 Shawnee Mission Parkway
\n Westwood, KS 66205<\/p>\n
Attention: Fred L. Sgroi, Esq.
\n Facsimile No.: 913-624-8361<\/p>\n
with a copy to<\/p>\n
King & Spalding
\n 191 Peachtree Street
\n Atlanta, Georgia 30303<\/p>\n
Attention: Bruce N. Hawthorne, Esq.
\n C. William Baxley, Esq.
\n Facsimile No.: 404-572-5146<\/p>\n
8.3 Interpretation. When a reference is made in this Agreement to Sections,
\nexhibits or Schedules, such reference shall be to a Section of or Exhibit or
\nSchedule to this Agreement unless otherwise indicated. The table of contents,
\nglossary of defined terms and headings contained in this Agreement are for
\nreference purposes only and shall not affect in any way the meaning or
\ninterpretation of this Agreement. Whenever the words “include”, “includes” or
\n“including” are used in this Agreement, they shall be deemed to be followed by
\nthe words “without limitation”.<\/p>\n
8.4 Counterparts. This Agreement may be executed in one or more
\ncounterparts, all of which shall be considered one and the same agreement and
\nshall become effective when one or more counterparts have been signed by each
\nof the parties and delivered to the other party, it being understood that both
\nparties need not sign the same counterpart.<\/p>\n
8.5 Entire Agreement; No Third Party Beneficiaries. (a) This Agreement and
\nthe Confidentiality Agreement constitute the entire agreement and supersede all
\nprior agreements and understandings, both written and oral, between the parties
\nwith respect to the subject matter hereof.<\/p>\n
(b) This Agreement shall be binding upon and inure solely to the benefit of
\neach party hereto, and nothing in this Agreement, express or implied, is
\nintended to or shall confer upon any other Person any right, benefit or remedy
\nof any nature whatsoever under or by reason of this Agreement, other than
\nSection 5.9 (which is intended to be for the benefit of the Persons covered
\nthereby and may be enforced by such Persons) or as provided in Section 5.7 of
\nthe Sprint Disclosure Schedule.<\/p>\n
1-42<\/p>\n
8.6 Governing Law. This Agreement shall be governed and construed in
\naccordance with the laws of the State of Delaware, except that the Merger
\nshall be governed by the laws of the State of Kansas and the laws of the State
\nof Georgia.<\/p>\n
8.7 Severability. If any term or other provision of this Agreement is
\ninvalid, illegal or incapable of being enforced by any law or public policy,
\nall other terms and provisions of this Agreement shall nevertheless remain in
\nfull force and effect. Upon such determination that any term or other
\nprovision is invalid, illegal or incapable of being enforced, the parties
\nhereto shall negotiate in good faith to modify this Agreement so as to effect
\nthe original intent of the parties as closely as possible in an acceptable
\nmanner in order that the transactions contemplated hereby are consummated as
\noriginally contemplated to the greatest extent possible.<\/p>\n
8.8 Assignment. Neither this Agreement nor any of the rights, interests or
\nobligations hereunder shall be assigned by any of the parties hereto, in whole
\nor in part (whether by operation of law or otherwise), without the prior
\nwritten consent of the other party, and any attempt to make any such
\nassignment without such consent shall be null and void. Subject to the
\npreceding sentence, this Agreement will be binding upon, inure to the benefit
\nof and be enforceable by the parties and their respective successors and
\nassigns.<\/p>\n
8.9 Submission to Jurisdiction; Waivers. Each of the parties hereto (a)
\nconsents to submit itself to the personal jurisdiction of any Delaware state
\ncourt or any Federal court located in the State of Delaware in the event any
\ndispute arises out of or under or relates to this Agreement or any of the
\ntransactions contemplated hereby and agrees, to the extent that such party is
\nnot resident in the State of Delaware, to irrevocably appoint CSC The United
\nStates Corporation Company as its agent for service of process, (b) agrees
\nthat it will not attempt to deny or defeat such personal jurisdiction by
\nmotion or other request for leave from any such court, (c) agrees that it will
\nnot bring any action, suit or proceeding arising out of or under or relating
\nto this Agreement or any of the transactions contemplated hereby, in any court
\nother than any Delaware state court or any Federal court located in the State
\nof Delaware and (d) waives any right to trial by jury with respect to any
\naction, suit or proceeding arising out of or under or relating to this
\nAgreement or any of the transactions contemplated hereby. Each of the parties
\nhereto hereby irrevocably and unconditionally waives any objection to the
\nlaying of venue of any action, suit or proceeding arising out of or under or
\nrelating to this Agreement or any of the transactions contemplated hereby in
\nany Delaware state court or any Federal court located in the State of
\nDelaware, and hereby further irrevocably and unconditionally waives and agrees
\nnot to plead or claim in any such court that any such action, suit or
\nproceeding brought in any such court has been brought in an inconvenient
\nforum.<\/p>\n
8.10 Enforcement. The parties agree that irreparable damage would occur in
\nthe event that any of the provisions of this Agreement were not performed in
\naccordance with their specific terms. It is accordingly agreed that the
\nparties shall be entitled to specific performance of the terms hereof, this
\nbeing in addition to any other remedy to which they are entitled at law or in
\nequity.<\/p>\n
8.11 Definitions. As used in this Agreement:<\/p>\n
(a) “Benefit Plans” means, with respect to any Person, each employee
\nbenefit plan, program, arrangement and contract (including any “employee
\nbenefit plan” (as defined in ERISA) and any bonus, deferred compensation,
\nstock bonus, stock purchase, restricted stock, stock option, employment,
\ntermination, stay agreement or bonus, change in control and severance plan,
\nprogram, arrangement and contract) all of the foregoing in effect on the date
\nof this Agreement, to which such Person is a party, which is maintained or
\ncontributed to by such Person, or with respect to which such Person could
\nincur material liability under Section 4069, 4201 or 4212(c) of ERISA.<\/p>\n
(b) “Board of Directors” means the Board of Directors of any specified
\nPerson or any committee thereof.<\/p>\n
(c) “Business Day” means any day on which banks are not required or
\nauthorized to close in the City of New York.<\/p>\n
1-43<\/p>\n
(d) “Class A Holder” has the meaning ascribed thereto in Sprint’s articles
\nof incorporation.<\/p>\n
(e) “Knowledge” of any Person that is not an individual means, with respect
\nto any specific matter, the actual knowledge of such Person’s executive
\nofficers and other officers having primary responsibility for such matter.<\/p>\n
(f) “Material Adverse Effect” or “Material Adverse Change” means, with
\nrespect to any entity, any adverse change, circumstance or effect that,
\nindividually or in the aggregate with all other adverse changes, circumstances
\nand effects, is or is reasonably likely to be materially adverse to the
\nbusiness, financial condition or results of operations of such entity and its
\nSubsidiaries taken as a whole, other than any change, circumstance or effect
\n(i) relating to or resulting from the economy or securities markets in general,
\n(ii) relating to or resulting from the industries in which MCI WorldCom or
\nSprint operate and not uniquely relating to MCI WorldCom or Sprint or (iii)
\nresulting from the announcement or the existence of this Agreement and the
\ntransactions contemplated hereby.<\/p>\n
(g) “Material Investment” means (a) as to Sprint, any Person which Sprint
\ndirectly or indirectly holds the stock of, or other ownership interest in,
\nprovided that the lesser of the fair market value and the book value of such
\nstock or interest exceeds $250 million, excluding any Person that is a wholly
\nowned Subsidiary of Sprint; and (b) as to MCI WorldCom, any Person which MCI
\nWorldCom directly or indirectly holds the stock of, or other ownership interest
\nin, provided that the lesser of the fair market value and the book value of
\nsuch stock or interest exceeds $250 million, excluding any Person that is a
\nwholly owned Subsidiary of MCI WorldCom.<\/p>\n
(h) “the other party” means, with respect to Sprint, MCI WorldCom and means,
\nwith respect to MCI WorldCom, Sprint.<\/p>\n
(i) “Person” means an individual, corporation, limited liability company,
\npartnership, association, trust, unincorporated organization, other entity or
\ngroup (as defined in the Exchange Act).<\/p>\n
(j) “Significant Subsidiary” has the meaning ascribed thereto in Rule 1-
\n02(w) of Regulation S-X of the SEC.<\/p>\n
(k) “Subsidiary” when used with respect to any party means any corporation
\nor other organization, whether incorporated or unincorporated, (i) of which
\nsuch party or any other Subsidiary of such party is a general partner
\n(excluding partnerships, the general partnership interests of which held by
\nsuch party or any Subsidiary of such party do not have a majority of the voting
\ninterests in such partnership) or (ii) at least a majority of the securities or
\nother interests of which having by their terms ordinary voting power to elect a
\nmajority of the Board of Directors or others performing similar functions with
\nrespect to such corporation or other organization is directly or indirectly
\nowned or controlled by such party or by any one or more of its Subsidiaries, or
\nby such party and one or more of its Subsidiaries.<\/p>\n
(l) “FON Exchange Ratio” means the quotient (rounded to the nearest
\n1\/10,000) determined by dividing $76 by the Average Price; provided that the
\nFON Exchange Ratio shall not be less than 1.4100 or greater than 1.8342 (it
\nbeing understood and agreed that such numbers have been adjusted from the
\n0.9400 and 1.2228 numbers, respectively, contained in the Original Merger
\nAgreement to reflect MCI WorldCom’s three-for-two stock split in the form of a
\n50% stock dividend which was distributed on December 30, 1999 (the “December
\n1999 MCI WorldCom Stock Split”) and that no further adjustment will be made to
\nthe FON Exchange Ratio to reflect the December 1999 MCI WorldCom Stock Split).<\/p>\n
(m) “PCS Exchange Ratio” means 0.116025 (it being understood and agreed that
\nsuch number has been adjusted from the 0.1547 number contained in the Original
\nMerger Agreement to reflect both the December 1999 MCI WorldCom Stock Split and
\nSprint’s two-for-one stock split of its Sprint PCS Stock in the form of a stock
\ndividend which was distributed on February 4, 2000 (the “February PCS Stock
\nSplit”) and that no further adjustment will be made to the PCS Exchange Ratio
\nto reflect the December 1999 MCI WorldCom Stock Split or the February PCS Stock
\nSplit).<\/p>\n
1-44<\/p>\n
(n) “Average Price” means the average (rounded to the nearest 1\/10,000) of
\nthe volume weighted averages (rounded to the nearest 1\/10,000) of the trading
\nprices of MCI WorldCom Common Stock on The Nasdaq National Market (“Nasdaq”),
\nas reported by Bloomberg Financial Markets (or such other source as the parties
\nshall agree in writing), for the 15 trading days randomly selected by lot by
\nMCI WorldCom and Sprint together from the 30 consecutive trading days ending on
\nthe third trading day immediately preceding the Effective Time.<\/p>\n
IN WITNESS WHEREOF, MCI WorldCom and Sprint have caused this Agreement to be
\nsigned by their respective officers thereunto duly authorized, all as of the
\ndate first written above.<\/p>\n
MCI WorldCom, Inc.,<\/p>\n
\/s\/ Bernard J. Ebbers
\n by __________________________________
\n Name: Bernard J. Ebbers
\n Title: President and Chief
\n Executive Officer<\/p>\n
Sprint Corporation,<\/p>\n
\/s\/ William T. Esrey
\n by __________________________________
\n Name: William T. Esrey
\n Title: Chairman and Chief
\n Executive Officer<\/p>\n
1-45<\/p>\n
ANNEX 1 TO
\n THE MERGER AGREEMENT<\/p>\n
CERTAIN MATTERS RELATING TO SURVIVING CORPORATION<\/p>\n
Board of Directors<\/p>\n
The Board of Directors of the Surviving Corporation will initially consist
\nof 16 members, 10 of whom shall be initially designated by MCI WorldCom and 6
\nof whom shall be initially designated by Sprint.<\/p>\n
Prior to the Effective Time, each party will designate in writing the
\nindividual directors that it is entitled to designate to the Board of Directors
\nas provided above.<\/p>\n
Tracking Stock Policies; Tax Sharing Agreement<\/p>\n
As of the Effective Time, MCI WorldCom shall adopt Tracking Stock Policies
\nidentical to the Sprint Tracking Stock Policies as in effect on the date hereof
\nand will assume the related Tax Sharing Agreement dated as of November 23,
\n1998.<\/p>\n
MCI WorldCom agrees that, at the Closing, no other policies shall have been
\nadopted by MCI WorldCom which are inconsistent with such Tracking Stock
\nPolicies or otherwise impair the relative position of the holders of capital
\nstock as set forth in such Tracking Stock Policies.<\/p>\n
MCI WorldCom Shareholder Rights Plan<\/p>\n
As of the Effective Time, MCI WorldCom shall modify the terms of the MCI
\nWorldCom shareholder rights plan in a manner to take into account the creation
\nof the PCS stock.<\/p>\n
1-46<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9361],"corporate_contracts_industries":[9519],"corporate_contracts_types":[9622,9626],"class_list":["post-43090","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-worldcom-inc","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43090","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43090"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43090"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43090"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}