UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Amendment No. 5
to
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
and
SCHEDULE 13D
Under the Securities Exchange Act of 1934
----------------
Global Crossing Ltd.
(Name of Subject Company)
U S WEST, Inc.
(Bidder)
Common Stock, $.01 Par Value
(Titles of Class of Securities)
CUSIP: G3921A100
(CUSIP Number of Class of Securities) (Common Stock)
U S WEST, Inc.
1801 California Street
Denver, CO 80202
(303) 672-2700
(Name, address and telephone number of person authorized to receive notices and
communications on behalf of bidder)
Copies to:
Dennis J. Block, Esq.
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
(212) 504-6000
Thomas O. McGimpsey, Esq.
U S WEST, Inc.
1801 California Street
Suite 5100
Denver, CO 80202
(303) 672-2712
<PAGE>
U S WEST, Inc. hereby amends and supplements its Schedule 14D-1 and 13D
originally filed on May 21, 1999 (the "Original Filing"), as amended by its
Schedule 14D-1 and 13D, Amendment No. 1, filed on May 24, 1999, Amendment No. 2,
filed on June 8, 1999, Amendment No. 3, filed on June 11, 1999 and Amendment No.
4, filed on June 18, 1999 (together with the Original Filing, the "Statement")
with respect to the Offer by U S WEST, Inc. to purchase 39,259,305 shares of
Common Stock of Global Crossing Ltd., as set forth in the Statement. Capitalized
terms used herein and not otherwise defined shall have the meaning assigned such
terms in the Statement.
Item 10. Additional Information.
Item 10 is hereby amended by the addition of the following:
(e)(3) On or about June 14, 1999, a complaint was filed in the Court of
Chancery in the State of Delaware in and for the County of New Castle entitled
KENNETH ELAN V. US WEST, INC., LINDA G. ALVARADO, CRAIG BARRETT, HANK BROWN,
JERRY COLANGELO, GEORGE HARAD, PETER HELLMAN, ALLEN F. JACOBSON, MARILYN CARLSON
NELSON, RICHARD MCCORMICK, FRANK POPOFF, AND SOLOMON TRUJILLO (Civil Action No.
17230). This action is a purported class action brought on behalf of all
shareholders, other than defendants, of U S WEST, Inc. against U S WEST, Inc.
and the directors of U S WEST, Inc. alleging that the defendants breached their
fiduciary duties to the class members by failing to undertake an appropriate
evaluation of all bona fide offers for the company in light of a proposed offer
by Qwest Communications International Inc. ("Qwest") to acquire through a
merger, all of the outstanding shares of Common Stock of U S WEST, Inc., by
exchanging 1.738 shares of Qwest Common Stock for each share of U S WEST, Inc.'s
Common Stock and, in addition, in conjunction with Qwest's offer to acquire all
of the outstanding shares of Common Stock of Frontier Corporation, if Frontier
Corporation enters into a definitive agreement with Qwest with respect to the
acquisition of Frontier by Qwest, Qwest will increase the consideration it is
offering to 1.783 shares of Qwest Common Stock for each share of U S WEST,
Inc.'s Common Stock (the "Qwest Proposal"), resulting in the stockholders being
prevented from maximizing the value of their common stock. The complaint seeks
an order (1) requiring defendants to carry out their fiduciary duties by
announcing their intention to undertake an appropriate evaluation of
alternatives designed to maximize shareholder value, (2) preventing defendants
from using a shareholder rights plan to impede any bona fide offer for U S WEST,
Inc., (3) enjoining the consummation of the Tender Offer and Merger until all
alternatives are explored, and (4) requiring defendants to account for all
damages suffered by plaintiff as a result of defendants' actions with respect to
the Tender Offer and Merger. The defendants intend to vigorously defend this
action.
(e)(4) On or about June 14, 1999, a complaint was filed in the Court of
Chancery in the State of Delaware in and for the County of New Castle entitled
JOHN MIZZARO V. US WEST, INC., HANK BROWN, GEORGE J. HARAD, ALLEN F. JACOBSON,
PETER S. HELLMAN, FRANK POPOFF, RICHARD D. MCCORMICK, LINDA G. ALVARADO, CRAIG
R. BARRETT, JERRY J. COLANGELO, MARILYN CARLSON NELSON AND SOLOMON D. TRUJILLO
(Civil Action No. 17229). This action is a purported class action brought on
behalf of all persons, other than defendants, who own the common stock of U S
WEST, Inc. against U S WEST, Inc. and the directors of U S WEST, Inc. alleging
that the defendants breached their fiduciary duties to plaintiffs by failing to
maximize shareholder value, by not considering their own interests over those of
U S WEST, Inc., and by failing to respond reasonably and on an informed basis to
bona fide offers for U S WEST, Inc., including the Qwest Proposal. The complaint
seeks an order (1) requiring defendants to act in accordance with their
fiduciary duties by, among other things, considering any bona fide proposal
which would maximize shareholder value, undertaking an evaluation of U S WEST,
Inc.'s worth as a merger/acquisition candidate, taking steps to enhance that
value and create an active auction for U S WEST, Inc. in the marketplace, (2)
declaring that defendants breached their fiduciary and other duties, (3)
enjoining defendants from entrenching themselves in office, (4) requiring
defendants to take steps to facilitate a premium acquisition by using U S WEST,
Inc.'s anti-takeover defense in a manner designed to maximize shareholder value,
and (5) requiring defendants to account for all damages suffered by plaintiff as
a result of defendants' actions with respect to the Tender Offer and Merger. The
defendants intend to vigorously defend this action.
(e)(5) On or about June 14, 1999, a complaint was filed in the Court of
Chancery in the State of Delaware in and for the County of New Castle entitled
ADELE BRODY V. HANK BROWN, GEORGE J. HARAD, MARILYN CARLSON NELSON, ALLEN F.
JACOBSON, PETER S. HELLMAN, RICHARD D. MCCORMICK, FRANK POPOFF, LINDA G.
ALVARADO, CRAIG R. BARRETT, JERRY J. COLANGELO, SOLOMON D. TRUJILLO, AND US
WEST, INC. (Civil Action No. 17231). This action is a purported class action
brought on behalf of all persons, other than defendants, who own the common
stock of U S WEST, Inc. against U S WEST, Inc. and the directors of U S WEST,
Inc. alleging that in light of the Qwest Proposal the defendants breached their
fiduciary duties to the class members by refusing to consider all bona fide
offers for the company, resulting in the defendants entrenching themselves and
the stockholders being prevented from maximizing the value of their common
stock. The complaint seeks an order (1) requiring defendants to act in
accordance with their fiduciary duties by considering any bona fide proposal
which would maximize shareholder value, undertaking an evaluation of U S WEST,
Inc.'s worth as a merger/acquisition candidate, taking steps to enhance that
value and create an active auction for U S WEST, Inc. in the marketplace, (2)
directing the defendants to deploy the U S WEST, Inc.'s Rights Plan in a manner
that would produce the best value maximizing transaction for the U S WEST, Inc.
shareholders, and (3) requiring defendants to account for all damages suffered
by plaintiff as a result of defendants' actions with respect to the Tender Offer
and Merger. The defendants intend to vigorously defend this action.
(e)(6) On or about June 14, 1999, a complaint was filed in the Court of
Chancery in the State of Delaware in and for the County of New Castle entitled
H.A. FAMILY TRUST V. HANK BROWN, GEORGE J. HARAD, MARILYN CARLSON NELSON, ALLEN
F. JACOBSON, PETER S. HELLMAN, RICHARD D. MCCORMICK, FRANK POPOFF, LINDA G.
ALVARADO, CRAIG R. BARRETT, JERRY J. COLANGELO, SOLOMON D. TRUJILLO, AND US
WEST, INC. (Civil Action No. 17227). This action is a purported class action
brought on behalf of all persons, other than defendants, who own the common
stock of U S WEST, Inc. against U S WEST, Inc. and the directors of U S WEST,
Inc. alleging that the defendants breached their fiduciary duties to the class
members by refusing to consider all bona fide offers for the company, including
the Qwest Proposal, resulting in the stockholders being prevented from
maximizing the value of their common stock. The complaint seeks an order (1)
requiring defendants to act in accordance with their fiduciary duties by
considering any bona fide proposal which would maximize shareholder value,
undertaking an evaluation of U S WEST, Inc.'s worth as a merger/acquisition
candidate, taking steps to enhance that value and create an active auction for U
S WEST, Inc. in the marketplace, (2) directing the defendants to deploy U S
WEST, Inc.'s Rights Plan in a manner that would produce the best value
maximizing transaction for U S WEST, Inc. shareholders and (3) requiring
defendants to account for all damages suffered by plaintiff as a result of
defendants' actions with respect to the Tender Offer and Merger. The defendants
intend to vigorously defend this action.
(e)(7) On or about June 15, 1999, a complaint was filed in the Court of
Chancery of the State of Delaware in and for New Castle County entitled JEROME
KAPLAN, KENNETH STEINER AND MORRIS MONDSCHEIN V. U.S. WEST, INC., LINDA G.
ALVARADO, CRAIG R. BARRETT, HANK BROWN, GERALD J. COLANGELO, GEORGE J. HARAD,
PETER S. HELLMAN, ALLEN F. JACOBSON, RICHARD D. MCCORMICK, MARILYN CARLSON
NELSON, FRANK P. POPOFF, AND SOLOMON D. TRUJILLO. This action is a purported
class action brought on behalf of all persons, other than defendants, who own
the common stock of US West, Inc. against US West, Inc. and the directors of US
West, Inc. alleging that the defendants breached fiduciary duties of good faith,
fairness, loyalty, due care and disclosure by failing to consider bona fide
offers for US West, Inc. and failing to adequately evaluate the value of US
West, Inc. in light of the Qwest Proposal. The complaint seeks an order (1)
requiring defendants to carry out their fiduciary duties of care, good faith,
loyalty, full disclosure and fairness, (2) enjoining the consummation of the
Merger until defendants have fulfilled their fiduciary duties, (3) requiring
defendants to provide access to information concerning US West Inc. to any bona
fide bidder, (4) requiring defendants to pay damages to plaintiffs, and (5)
requiring defendants to account for all profits realized by them as a result of
the Merger. The defendants intend to vigorously defend this action.
(e)(8) On or about June 14, 1999 plaintiff in the matter brought in the
District Court for the City and County of Denver, State of Colorado entitled
PAMELA CAGAN V. US WEST COMMUNICATIONS, INC., SOLOMON TRUJILLO, RICHARD
MCCORMICK, MANUEL FERNANDEZ, HANK BROWN, LINDA ALVARADO, DR. CRAIG BARRETT,
MARILYN CARLSON NELSON, FRANK POPOFF, PETER HELLMAN, GEORGE HARAD AND JERRY
COLANGELO amended its complaint to include factual allegations regarding the
Qwest Proposal, including that Qwest had reportedly proposed to acquire US West
Inc. and Frontier Corp., and that Qwest is proposing to exchange 1.783 shares of
QWEST common stock for each US West Inc. share. In every other respect, the
amended complaint is identical to the original complaint. The defendants intend
to vigorously defend this action.
Item 11. Material to be Filed as Exhibits.
Item 11 is hereby amended by the addition of the following exhibits:
(g)(1) Complaint filed in the Court of Chancery in the State of Delaware
in and for the County of New Castle entitled KENNETH ELAN V. US
WEST, INC., LINDA G. ALVARADO, CRAIG BARRETT, HANK BROWN, JERRY
COLANGELO, GEORGE HARAD, PETER HELLMAN, ALLAN JACOBSON, MARILYN
NELSON, RICHARD MCCORMICK, FRANK POPOFF, AND SOLOMON D. TRUJILLO
(Civil Action No. 17230).
(g)(2) Complaint filed in the Court of Chancery in the State of Delaware
in and for the County of New Castle entitled JOHN MIZZARO V. US
WEST, INC., HANK BROWN, GEORGE J. HARAD, ALLEN F. JACOBSON, PETER
S. HELLMAN, FRANK POPOFF, RICHARD D. MCCORMICK, LINDA G. ALVARADO,
CRAIG R. BARRETT, JERRY J. COLANGELO, MARILYN CARLSON NELSON AND
SOLOMON D. TRUJILLO (Civil Action No. 17229).
(g)(3) Complaint filed in the Court of Chancery in the State of Delaware
in and for the County of New Castle entitled ADELE BRODY V. HANK
BROWN, GEORGE J. HARAD, MARILYN CARLSON NELSON, ALLEN F. JACOBSON,
PETER S. HELLMAN, RICHARD D. MCCORMICK, FRANK POPOFF, LINDA G.
ALVARADO, CRAIG R. BARRETT, JERRY J. COLANGELO, SOLOMON D.
TRUJILLO, AND US WEST, INC. (Civil Action No. 17231).
(g)(4) Complaint filed in the Court of Chancery in the State of Delaware
in and for the County of New Castle entitled H.A. FAMILY TRUST V.
HANK BROWN, GEORGE J. HARAD, MARILYN CARLSON NELSON, ALLEN F.
JACOBSON, PETER S. HELLMAN, RICHARD D. MCCORMICK, FRANK POPOFF,
LINDA G. ALVARADO, CRAIG R. BARRETT, JERRY J. COLANGELO, SOLOMON D.
TRUJILLO, AND US WEST, INC. (Civil Action No. 17227).
(g)(5) Complaint filed in the Court of Chancery of the State of Delaware
in and for New Castle County entitled JEROME KAPLAN, KENNETH
STEINER AND MORRIS MONDSCHEIN V. U.S. WEST, INC., LINDA G.
ALVARADO, CRAIG R. BARRETT, HANK BROWN, GERALD J. COLANGELO, GEORGE
J. HARAD, PETER S. HELLMAN, ALLEN F. JACOBSON, RICHARD D.
MCCORMICK, MARILYN CARLSON NELSON, FRANK P. POPOFF, AND SOLOMON D.
TRUJILLO.
(g)(6) Amended complaint filed in the matter brought in the District Court
for the City and County of Denver, State of Colorado entitled
PAMELA CAGAN V. US WEST COMMUNICATIONS, INC., SOLOMON TRUJILLO,
RICHARD MCCORMICK, MANUEL FERNANDEZ, HANK BROWN, LINDA ALVARADO,
DR. CRAIG BARRETT, MARILYN CARLSON NELSON, FRANK POPOFF, PETER
HELLMAN, GEORGE HARAD AND JERRY COLANGELO.
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: June 18, 1999
U S WEST, Inc.
By: /s/ Thomas O. McGimpsey
--------------------------------
Name: Thomas O. McGimpsey
Title: Assistant Secretary and
Senior Attorney
<PAGE>
EXHIBIT INDEX
(g)(1) Complaint filed in the Court of Chancery in the State of Delaware
in and for the County of New Castle entitled KENNETH ELAN V. US
WEST, INC., LINDA G. ALVARADO, CRAIG BARRETT, HANK BROWN, JERRY
COLANGELO, GEORGE HARAD, PETER HELLMAN, ALLAN JACOBSON, MARILYN
NELSON, RICHARD MCCORMICK, FRANK POPOFF, AND SOLOMON D. TRUJILLO
(Civil Action No. 17230).
(g)(2) Complaint filed in the Court of Chancery in the State of Delaware
in and for the County of New Castle entitled JOHN MIZZARO V. US
WEST, INC., HANK BROWN, GEORGE J. HARAD, ALLEN F. JACOBSON, PETER
S. HELLMAN, FRANK POPOFF, RICHARD D. MCCORMICK, LINDA G. ALVARADO,
CRAIG R. BARRETT, JERRY J. COLANGELO, MARILYN CARLSON NELSON AND
SOLOMON D. TRUJILLO (Civil Action No. 17229).
(g)(3) Complaint filed in the Court of Chancery in the State of Delaware
in and for the County of New Castle entitled ADELE BRODY V. HANK
BROWN, GEORGE J. HARAD, MARILYN CARLSON NELSON, ALLEN F. JACOBSON,
PETER S. HELLMAN, RICHARD D. MCCORMICK, FRANK POPOFF, LINDA G.
ALVARADO, CRAIG R. BARRETT, JERRY J. COLANGELO, SOLOMON D.
TRUJILLO, AND US WEST, INC. (Civil Action No. 17231).
(g)(4) Complaint filed in the Court of Chancery in the State of Delaware
in and for the County of New Castle entitled H.A. FAMILY TRUST V.
HANK BROWN, GEORGE J. HARAD, MARILYN CARLSON NELSON, ALLEN F.
JACOBSON, PETER S. HELLMAN, RICHARD D. MCCORMICK, FRANK POPOFF,
LINDA G. ALVARADO, CRAIG R. BARRETT, JERRY J. COLANGELO, SOLOMON D.
TRUJILLO, AND US WEST, INC. (Civil Action No. 17227).
(g)(5) Complaint filed in the Court of Chancery of the State of Delaware
in and for New Castle County entitled JEROME KAPLAN, KENNETH
STEINER AND MORRIS MONDSCHEIN V. U.S. WEST, INC., LINDA G.
ALVARADO, CRAIG R. BARRETT, HANK BROWN, GERALD J. COLANGELO, GEORGE
J. HARAD, PETER S. HELLMAN, ALLEN F. JACOBSON, RICHARD D.
MCCORMICK, MARILYN CARLSON NELSON, FRANK P. POPOFF, AND SOLOMON D.
TRUJILLO.
(g)(6) Amended complaint filed in the matter brought in the District Court
for the City and County of Denver, State of Colorado entitled
PAMELA CAGAN V. US WEST COMMUNICATIONS, INC., SOLOMON TRUJILLO,
RICHARD MCCORMICK, MANUEL FERNANDEZ, HANK BROWN, LINDA ALVARADO,
DR. CRAIG BARRETT, MARILYN CARLSON NELSON, FRANK POPOFF, PETER
HELLMAN, GEORGE HARAD AND JERRY COLANGELO.
Exhibit (g)(1)
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ------------------------------------------------
|
KENNETH ELAN, |
| Civil Action No. 17230
Plaintiff, |
|
v. | CLASS ACTION COMPLAINT
| ----------------------
US WEST, INC., LINDA ALVARADO, |
CRAIG BARRETT, HANK BROWN, JERRY |
COLANGELO, GEORGE HARAD, PETER |
HILLMAN, ALLEN F. JACOBSON, |
MARILYN CARLSON NELSON, RICHARD |
McCORMICK, FRANK POPOFF and |
SOLOMON TRUJILLO, |
|
Defendants. |
|
- ------------------------------------------------
Plaintiff alleges upon information and belief, except as to
paragraph 1 which plaintiff alleges upon personal knowledge, as follows:
THE PARTIES
-----------
1. Plaintiff is the owner of shares of the common stock of US West,
Inc. ("US West" or the "Company") and has owned such shares at all times
material hereto.
2. Defendant US West is a Delaware corporation with offices at 1801
California St., Denver, CO. US West is a holding company which, through
subsidiaries, provides telecommunications services including local telephone
services, exchange access services, domestic and international broadcast
communications, wireless communications and directory services. As of May 21,
1999, US West had 39,259,305 shares of common stock outstanding.
3. Defendant Solomon Trujillo ("Trujillo") is and was at all
relevant times Chairman of the Board, President and Chief Executive Officer of
US West.
4. Defendants Linda Alvarado ("Alvarado"), Craig Barrett
("Barrett"), Hank Brown ("Brown"), Jerry Colangelo ("Colangelo"), George Harad
("Harad"), Peter Hellman ("Hellman"), Allen F. Jacobson ("Jacobson"), Marilyn
Carlson Nelson ("Nelson"), Richard McCormick ("McCormick") and Frank Popoff
("Popoff") are and were at all relevant times directors of US West.
5. The individual defendants (collectively referred to herein as the
"Director Defendants") are in a fiduciary relationship with plaintiff and the
other public stockholders of US West, and owe plaintiff and the US West public
stockholders the highest obligations of good faith, fair dealing, due care,
loyalty and full and candid disclosure.
CLASS ACTION ALLEGATIONS
------------------------
6. Plaintiff brings this action on his own behalf and as a class
action pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all shareholders of defendant US West (except defendants herein and any person,
firm, trust, corporation or other entity related to or affiliated with any of
the defendants) or their successors in interest, who have been or will be harmed
by the conduct of defendants complaint of herein.
7. This action is properly maintainable as a class action for the
following reasons:
(a) The class is so numerous that joinder of all Class members
is impracticable. As of May 21, 1999, there were over 39 million shares of US
West common stock outstanding, owned by hundreds of shareholders of record.
Members of the Class are dispersed throughout the United States;
(b) There are questions of law and fact which are common to
members of the Class including, INTER ALIA, the following:
(i) whether the Director Defendants have breached
their fiduciary duties owed by them to plaintiff and members of the Class; and
(ii) whether plaintiff and the other members of the
Class will be irreparably damaged by defendants' failure to explore all
reasonable alternatives to maximize shareholder value.
8. Plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature. The claims
of plaintiff are typical of the claims of the other members of the Class and
plaintiff has the same interests as the other members of the Class. Accordingly,
plaintiff is an adequate representative of the Class and will fairly and
adequately protect the interests of the Class.
9. Defendants have acted or refused to act on grounds generally
applicable to the Class, thereby making relief with respect to the Class as a
whole appropriate.
SUBSTANTIVE ALLEGATIONS
-----------------------
10. On or about May 17, 1999, US West announced in a press release
that it had entered into a definitive merger agreement with Global Crossing Ltd.
("Global") ("Global Merger"). Pursuant to the terms of the Global Merger, US
West would initially commence a tender offer for 9.5% of Global Stock for $62.75
cash per share; subsequently, US West and Global would merge in a stock swap
with each share of US West exchanged for one share of Global. As of June 14,
1999, the value of the Global Merger is $30.94 billion. The new entity will
issues two classes of tracking stock.
11. Following the Global Merger, defendant Trujillo will co-lead the
combined entity with Robert Annuziata, Global's Chief Executive Officer.
12. As part of the Global Merger, Global will proceed with its
previously announced agreement to acquire Frontier Corp. ("Frontier"), a
telecommunications company based in Rochester, New York for approximately $11
billion in stock.
13. Pursuant to the terms of the Global Merger, US West will pay
Global a $850 million termination fee if the Global Merger is not consummated.
14. In connection with the Global Merger US West amended its
shareholder rights plan ("poison pill"), triggered by the acquisition of 15% or
more of US West stock, to make the poison pill inapplicable to the Global
Merger.
15. However, on May 17, 1999, the financial news wire services
reported that the Global Merger negotiations were difficult due to the fact that
QWEST Communications International, Inc. ("QWEST") had expressed interest in a
business combination with US West.
16. On or about May 21, 1999, US West filed its Schedule 14D-l
("14D-1") with the Securities and Exchange Commission ("SEC") in connection with
its tender for 9.5% of Global stock. The tender offer is scheduled to expire
June 18, 1999. In the 14D-1, defendants noted that on May 16, 1999, the US West
Board met to discuss the Global Merger. During this meeting, the Board learned
that a "third party" had indicated an interest in US West and had requested a
delay for purposes of making an offer. Nonetheless, the Board approved the
Global Merger.
17. Thereafter, on June 14, 1999, QWEST announced in a press release
that it offered to acquire US West and Frontier in separate transactions for a
total of $55 billion cash and equity and the assumption of $11.4 billion debt
("QWEST Offer").
18. Pursuant to the QWEST Offer, QWEST would acquire each share of
US West for 1.738 shares of QWEST for a value of $80 per share. QWEST is also
offering to acquire Frontier for up to $75 per share, consisting of $20 cash per
share and up to $55 in QWEST stock. The exchange ratio will, in part, be
dependent upon approval of both the US West and Frontier acquisitions.
19. In its press release, QWEST characterized its offer as
"superior" to the Global Merger. In a separate press release, Global
characterized the Global Merger as "superior" to the QWEST Offer.
20. The QWEST Offer represents an opportunity to effect a change of
control of US West, its business and affairs. In a change of control
transaction, the Director Defendants necessarily and inherently suffer from a
conflict of interest between their own personal desires to retain their offices
in US West, with the emoluments and prestige which accompany those offices, and
their fiduciary obligation to maximize shareholder value in a change of control
transaction. Defendants, by quickly amending the poison pill with the knowledge
that a third party was interested in US West, have indicated that they favor
Global and are unable and unwilling to represent the interests of US West and
its public stockholders with the impartiality that their fiduciary duties
require, nor will they be able to ensure that their conflicts of interest will
be resolved in the best interests of US West and its public stockholders.
21. Under the circumstances, the Director Defendants' fiduciary
obligations require them to undertake an appropriate evaluation of all BONA FIDE
offers for the Company and to explore all alternatives to maximize shareholder
value. The Director Defendants have breached and will continue to breach their
fiduciary duties owed to plaintiff and other US West public shareholders by
failing to fully explore potential BONA FIDE offers for the purchase of the
Company or to, at a minimum, engage in meaningful discussions with other
interested entities such as QWEST.
22. As a result of the action and inaction of defendants, plaintiff
and the other members of the Class have been and will be damaged in that they
will not be able to maximize the value of their US West shares.
23. At all times herein, defendants were and are obligated to
adequately consider, in a timely fashion and on an informed basis, any
reasonable proposal from any party, not to place their own self-interests and
personal considerations ahead of the interests of the stockholders and to make
corporate decisions in good faith. The actions of the Director Defendants in
rejecting QWEST's overtures fundamentally motivated to further their own
self-interests and objectives, and correspondingly, preserve and protect their
emoluments and positions in the Company, all in violation of their fiduciary
duties and to the detriment of the shareholders of the Company.
24. The Director Defendants' entrenchment motives are evidenced by,
INTER ALIA, erecting a virtually insurmountable barrier to other entities who
may wish to acquire US West, obtain control or take steps to maximize
shareholder value by use of the poison pill to favor Global, and are thereby
attempting to entrench themselves in their positions of control and improperly
advance their own personal agenda at the expense of US West's public
stockholders.
25. With the poison pill, the Director Defendants have acted to
manipulate the corporate machinery of US West, thereby impairing the corporate
democratic process within the Company at the expense of and to the detriment of
the Company's common stockholders. With the poison pill, the Director Defendants
are able to restrain and impair the ability of US West stockholders to affect
corporate policy, and freely structure the directorial constituency of the
Company. The poison pill, INTER ALIA, impedes shareholder ability to accumulate
shares and associate together to replace incumbent management, oppose any
management initiative, or otherwise affect corporate policy through stockholder
resolutions. By effectively preventing any single party other than Global from
owning and thereby voting greater than 15% of the outstanding common shares,
management clearly has a significant advantage in any proxy contest which
threatens to eliminate or diminish their control over US West. The poison pill
thereby thwarts shareholder opposition and serves to perpetuate senior
management's control over the business and operations of the Company.
26. Unless enjoined by this Court, the defendants will continue to
breach their fiduciary duties owed to plaintiff and the other members of the
Class, to the irreparable harm of plaintiff and the other members of the Class.
27. Plaintiff and the Class have no adequate remedy at law,
WHEREFORE, plaintiff demands judgment, as follows:
A. Declaring this to be a proper class action;
B. Ordering defendants to carry out their fiduciary duties to
plaintiff and the other members of the Class, by announcing their intention to
undertake an appropriate evaluation of alternatives designed to maximize value
for US West's public stockholders;
C. Ordering defendants not to use the poison pill to impede any BONA
FIDE offer for the Company;
D. Preliminarily and permanently enjoining consummation of the
tender offer and Global Merger until all alternatives are explored;
E. Ordering defendants, jointly and severally, to account to
plaintiff and the Class for all damages suffered or to be suffered by them as a
result of the wrongs complained of herein.
F. Awarding plaintiff the costs and disbursements of the action,
including a reasonable allowance for plaintiff's attorneys' and experts' fees;
and
G. Granting such other and further relief as may be just and proper.
Dated: June 14, 1999
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By:_______________________________________
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, Delaware 19899
302/656-4433
OF COUNSEL:
GOODKIND LABATON RUDOFF
& SUCHAROW LLP
100 Park Avenue
New York, New York 10017
Exhibit (g)(2)
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------------------X
JOHN MIZARRO, :
:
Plaintiff, :
:
-against- : Civil Action No. 17229
:
U S WEST , INC., HANK BROWN, :
GEORGE J. HARAD, ALLEN F. JACOBSON, :
PETER S. HELLMAN, FRANK POPOFF, :
RICHARD D. MCCORMICK, LINDA G. :
ALVARADO, CRAIG G. BARRETT, JERRY J. :
COLANGELO, MARILYN CARLSON NELSON :
and SOLOMON D. TRUJILLO, :
:
Defendants. :
- ---------------------------------------------X
CLASS ACTION COMPLAINT
----------------------
Plaintiff, as and for his complaint, alleges upon information and
belief, except as to himself, which he alleges upon knowledge, as follows:
NATURE OF THE ACTION
--------------------
1. Plaintiff brings this action as a class action on behalf of
plaintiff and all other stockholders of U S West, Inc. ("U S West " or the
"Company") against the directors and/or senior officers of U S West to enjoin
certain actions of the Company and the Director Defendants (as defined herein).
In particular, U S West's shareholders are currently being deprived of the
opportunity to realize the full benefits of their investment in U S West.
2. Among other things, the director defendants have failed to
adequately consider and embrace a premium offer to acquire control of U S West
by Qwest Communications International, Inc. ("Qwest"). The director defendants
are utilizing their fiduciary positions of control over U S West to thwart Qwest
and others in their legitimate attempts to acquire the Company.
3. Such action and inaction represent an effort by the Director
Defendants to entrench themselves in office so that they may continue to receive
the substantial salaries, compensation and other benefits and perquisites of
their offices.
4. The Director Defendants are abusing their fiduciary positions of
control over U S West to thwart legitimate attempts at acquiring the Company and
are seeking to entrench themselves in the management of the Company. The actions
of the Director Defendants constitute a breach of their fiduciary duties to
maximize shareholder value, to not consider their own interests over those of
the Company, and to respond reasonably and on an informed basis to BONA FIDE
offers for the Company.
THE PARTIES
-----------
5. Plaintiff John Mizzaro had been, at all times relevant to the
action, and continues to be, an owner of U S West common stock.
6. Defendant U S West is a corporation duly organized and existing
under the laws of the State of Delaware, with its principal executive offices
located at 1801 California Street, Denver, Colorado. U S West and its
subsidiaries comprise a regional Bell operating company serving 25 million
customers in 14, mainly rural, states.
7. Defendants Hank Brown, George J. Harad, Allen F. Jacobson, Peter
S. Hellman, Frank Popoff, Richard D. McCormick, Linda C. Alvarado, Craig K.
Barrett, Jerry J. Colangelo, Marilyn Carlson Nelson and Solomon D. Trujillo
(hereinafter collectively referred to as the "Director Defendants") are each
members of Columbia's Board of Directors. In addition, defendant Solomon D.
Trujillo serves as chief executive officer of the Company.
8. By virtue of their positions as directors and/or officers of U S
West, the Director Defendants have, and at all relevant times had, the power to
control and influence, and did control and influence and cause U S West to
engage in the practices complained of herein. Each Director Defendant owed and
owes U S West and its stockholders fiduciary obligations and were and are
required to: use their ability to control and manage U S West in a fair, just
and equitable manner; act in furtherance of the best interests of U S West and
its stockholders; act to maximize stockholder value in connection with a change
of ownership and control; govern U S West in such a manner as to heed the
expressed views of its public shareholders; refrain from abusing their positions
of control; and not to favor their own interests at the expense of U S West and
its stockholders.
CLASS ACTION ALLEGATIONS
------------------------
9. Plaintiff brings this action pursuant to Rule 23 of the Rules of
this Court, individually and as a class action on behalf of all other public
holders of U S West stock, and their successors in interest (excluding
defendants herein and any person, firm, trust, corporation, or other entity
related to or affiliated with any of them and their successors in interest), who
are or will be threatened with material injury arising from defendants' actions
as more fully described herein.
10. This action is properly maintainable as a class action for the
following reasons:
(a) The Class of stockholders f or whose benefit this action
is brought is so numerous that joinder of all members is impracticable. As of
April 22, 1999, U S West had more than 503.59 million shares of common stock
outstanding, and there are thousands of stockholders of record. Members of the
Class are scattered throughout the United States.
(b) There are questions of law and fact which are common to
the Class including whether defendants have breached the fiduciary duties owed
by them to plaintiff and members of the Class by reason of the acts described
herein.
(c) Plaintiff's claims are typical of the claims of the Class
in that all members of the Class will be damaged by the Director Defendants'
actions.
(d) Plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature. Plaintiff
is an adequate representative of the Class. Plaintiff anticipates that there
will not be any difficulty in the management of this litigation as a class
action.
(e) The prosecution of separate actions by individual members
of the Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for defendants, or adjudications with respect to individual
members of the Class which would as a practical matter be dispositive of the
interests of the other members not parties to the adjudications or substantially
impair or impede their ability to protect their interests.
(f) The defendants have acted, or refused to act, on rounds
generally applicable to, and causing injury to, the Class and, therefore,
preliminary and final injunctive relief on behalf of the Class as a whole is
appropriate.
SUBSTANTIVE ALLEGATIONS
11. On June 13, 1999, Qwest issued a press release announcing that
it has offered to acquire U S West for at least $78 per share in Qwest common
stock, or at least $40.2 billion in stock and the assumption of $10 billion in U
S West debt, the aggregate -- representing at least a 25.3 percent premium to
the prevailing market price, and a 22.2 percent premium over the value to U S
West shareholders of the pending Global Crossing transaction, which was
announced on May 17, 1999.
12. The Director Defendants have hastily, and without proper
evaluation, rejected Qwest's premium offer and have been content to remain
behind the protections of the Company's defenses from unwanted takeover. To act
consistent with their fiduciary duties, the Director Defendants should evaluate
all available alternatives, including negotiating with U S West which they have
failed to do.
13. The Director Defendants owe fundamental fiduciary obligations
under the present circumstances to take all necessary and appropriate steps to
maximize shareholder value and explore in good faith the Qwest proposal. In
addition, the Director Defendants have the responsibility to act independently
so that the interests of U S West's public stockholders will be protected, to
seriously consider all BONA FIDE offers for the Company, and to conduct fair and
active bidding procedures or other mechanisms for checking the market to assure
that the highest possible price is achieved. Further, the directors of the
Company must adequately ensure that no conflict of interest exists between
defendants' own interests and their fiduciary obligations to maximize
stockholder value and act in the shareholders' best interests or, if such
conflicts exist, to ensure that they will be resolved in the best interests of
the Company's public stockholders.
14. U S West represents a highly attractive acquisition candidate.
Defendants' conduct has deprived and will continue to deprive the Company's
public shareholders of the very substantial control premium which Qwest is
prepared to pay or of the enhanced premium which further exposure of the Company
to the market could provide. Defendants are precluding the shareholders'
enjoyment of the full economic value of their investment by hastily rejecting
Qwest's premium offer and by failing to adequately evaluate and pursue a premium
acquisition proposal which would provide for an acquisition for all shares at a
very attractive price.
15. U S West's Board and its top management have frustrated and
rejected Qwest's current acquisition overtures and offers, even though these
proposals would result in U S West's shareholders receiving a substantial
premium over the then market price of U S West stock. The Director Defendants
have done this because they know that in the event U S West were acquired by any
potential bidders, most of the directors of U S West and its senior management
would, either in connection with the acquisition or shortly thereafter, be
removed from the Board of the surviving company because their services would not
be necessary and they would be mere surplusage and thus an acquisition would
bring an end to their power, prestige and profit. In so acting, U S West's
directors and those in management allied with them have been aggrandizing their
own personal positions and interests over those of U S West and its broader
shareholder community to whom they owe fundamental fiduciary duties not to
entrench themselves in office.
16. By virtue of the acts and conduct alleged herein, the Director
Defendants, who control the actions of the Company, have, carried out a
preconceived plan and scheme to place their own personal interests ahead of the
interests of the shareholders of U S West and thereby entrench themselves in
their offices and positions within the Company. The Director Defendants have
violated their fiduciary duties owed to plaintiff and the Class in that they
have not and are not exercising independent business judgment and have acted and
are acting to the detriment of the Company's public shareholders for their own
personal benefit.
17. Plaintiff seeks preliminary and permanent injunctive relief and
declaratory relief preventing defendants from inequitably and unlawfully
depriving plaintiff and the Class of their rights to realize a full and fair
value for their stock at a substantial premium over the market price and to
compel defendants to carry out their fiduciary duties to maximize shareholder
value in selling U S West.
18. Only through the exercise of this Court's equitable powers can
plaintiff be fully protected from the immediate and irreparable injury which the
defendants' actions threaten to inflict. 19.---Unless enjoined by the Court,
defendants will continue to breach their fiduciary duties owed to plaintiff and
the members of the Class, and/or aid and abet and participate in such breaches
of duty, will continue to entrench themselves in office, and will prevent the
sale of U S West at a substantial premium, all to the irreparable harm of
plaintiff and the other members of the Class.
20. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. Declaring this to be a proper class action and certifying
plaintiff as class representative;
B. Ordering the Director Defendants to carry out their fiduciary
duties to plaintiff and the other members of the Class by announcing their
intention to:
(i) cooperate fully with any entity or person, including
Qwest, having a BONA FIDE interest in proposing any transaction which would
maximize shareholder value, including, but not limited to, a buy-out or takeover
of the Company;
(ii) immediately undertake an appropriate evaluation of U S
West's worth as a merger or acquisition candidate;
(iii) take all appropriate steps to effectively expose U S
West to the marketplace in an effort to create an active auction of the Company;
(iv) act independently so that the interests of the Company's
public shareholders will be protected; and
(v) adequately ensure that no conflicts of interest exist
between the Director Defendants' own interest and their fiduciary obligation to
maximize shareholder value or, in the event such conflicts exist, to ensure that
all conflicts of interest are resolved in the best interests of the public
shareholders of U S West.
C. Declaring that the Director Defendants have violated their
fiduciary duties to the Class;
D. Enjoining defendants from abusing the corporate machinery of the
Company for the purpose of entrenching themselves in office;
E. Ordering the Director Defendants to take steps to facilitate a
premium acquisition by utilizing the Company's anti-takeover defense exclusively
in a manner designed to maximize shareholder value;
F. Ordering the Director Defendants, jointly and severally to
account to plaintiff and the Class for all damages suffered and to be suffered
by them as a result of the acts and transactions alleged herein;
G. Awarding plaintiff the costs and disbursements of this action,
including a reasonable allowance for plaintiff's attorney's and experts' fees;
and
H. Granting such other and further relief as may be just and proper.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By:_____________________________________________
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
MILBERG WEISS BERSHAD HYNES & LERACH LLP
One Pennsylvania Plaza
New York, New York 10119
(212) 594-5300
June 14, 1999
Exhibit (g)(3)
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------------------------
|
ADELE BRODY, |
| Civil Action No. 17231
Plaintiff, |
|
v. |
|
HANK BROWN, GEORGE J. HARAD, MARILYN CARLSON |
NELSON, ALLEN P. JACOBSON, PETER S. HELLMAN, |
RICHARD D. McCORMICK, FRANK POPOFF, LINDA G. |
ALVARADO, CRAIG R. BARRETT, JERRY J. COLANGELO, |
SOLOMON D. TRUJILLO, and U S WEST, INC., |
|
Defendants. |
|
- ---------------------------------------------------
CLASS ACTION COMPLAINT
-------------------------------------------------------
Plaintiff, by her attorneys, Rosenthal, Monhait, Gross & Goddess,
P.A., for her complaint against defendants, alleges upon information and belief,
except for paragraph 2 hereof, which is alleged upon knowledge as follows:
1. Plaintiff brings this action pursuant to Rule 23 of the Rules of
the Court of Chancery on her behalf and as a class action on behalf of all
persons, other than defendants and those in privity with them, who own the
common stock of U S West, Inc. ("U S West" or the "Company").
2. Plaintiff has been the owner of the common stock of the Company
since prior to the transaction herein complained of and continuously to date.
3. Defendant U S West is a corporation duly organized and existing
under the laws of the State of Delaware. The Company provides a full range of
advanced telecommunication services including wireline, wireless PCS, data
networking, directory and information services to more than 25 million customers
nationally. The Company maintains its headquarters at 1801 California Street,
Denver, Colorado.
4. Defendant Richard D. McCormick is Chairman of the Board of
Directors of the Company.
5. Defendant Solomon D. Trujillo is and was at all relevant times
the President, Chief Executive Officer and a Director of U S West.
6. Defendants Hank Brown, George J. Harad, Marilyn Carlson
Nelson, Allen F. Jacobson, Peter S. Hellman, Frank Popoff, Linda G. Alvarado,
Craig R. Barrett, Jerry J. Colangelo are and were at all relevant times
directors of U S West.
7. The Individual Defendants named in paragraphs 4 through 6 are in
a fiduciary relationship with the plaintiff and the other public stockholders of
US. West and owe them the highest obligations of good faith, due dare, candor
and fair dealing.
CLASS ACTION ALLEGATIONS
-------------------------------------------------------
8. Plaintiff brings this action on her own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all security holders of the Company (except the defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defendants) and their successors in interest, who are or will be
threatened with injury arising from defendants' actions as more fully described
herein.
9. This action is properly maintainable as a class action.
10. The class is so numerous that joinder of all members is
impracticable. As of March 15, 1999, there were approximately 502,903,055 shares
of U S West common stock outstanding, owned by shareholders located throughout
the country (the "Class").
11. there are questions of law and fact which are common to the
Class including INTER ALIA, the following: (a) whether defendants have breached
their fiduciary and other common law duties owed by them to plaintiff and the
members of the Class; (b) whether defendants are unlawfully impeding a takeover
attempt and improperly seeking to entrench themselves in their own positions at
the expense of the public shareholders of U S West; (c) whether defendants'
actions hereinafter described, constitute a breach of the duty of fair dealing
with respect to the plaintiff and the other members of the Class, and a failure
to maximize shareholder value; and (d) whether the Class is entitled to
injunctive relief or damages as a result of the wrongful conduct committed by
defendants.
12. Plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature. The claims
of the plaintiff are typical of the claims of other members of the Class and
plaintiff has the same interests as the other members of the Class. Plaintiff
will fairly and adequately represent the Class.
13. Defendants have acted in a manner which affects plaintiff and
all members of the Class, thereby making appropriate injunctive relief and/or
corresponding declaratory relief with respect to the Class as a whole.
14. The prosecution of separate actions by individual members of the
Class would create a risk of inconsistent or varying adjudications with respect
to individual members of the Class, which would establish incompatible standards
of conduct for defendants, or adjudications with respect to individual members
of the Class which would, as a practical matter, be dispositive of the interests
or other members or substantially impair or impede their ability to protect
their interests.
SUBSTANTIVE ALLEGATIONS
-------------------------------------------------------
15. On May 17, 1999, U S West and Global Crossing Ltd. ("Global")
announced that they had entered into a definitive merger agreement. In a related
transaction, Global was to acquire Frontier Corporation ("Frontier") and the
three companies were to merge to form a new company named Global Crossing
Corporation. Under the terms of the proposed merger with Global, Global Crossing
was to create two separate tracking stocks, Class G shares and Class L shares.
The Class G shares would track the combined companies' high growth global data
and voice network and internet assets and would not pay a cash dividend. The
Class L shares would track the performance of the combined companies' existing
local telecommunications assets and would pay a cash dividend. U S West
shareholders had the option of exchanging each of their shares for either 1.2
Class G shares or 1.2 Class L shares. The total value of the merger of the
Global-U S West merger was approximately $30.94 billion.
16. The U S West-Global merger provided that defendant Trujillo
would become Co-Chairman and Co-Chief Executive Officer of the combined company.
Furthermore, the combined company would have a 22-member Board of Directors, 10
designated by U S West, 10 by Global, and 2 appointed by mutual agreement.
Accordingly, defendant Trujillo would retain his positions as an executive
officer and a director of the combined company and virtually all of the other
Individual Defendants would retain their directorships in the combined company.
17. On June 8, 1999, REUTERS reported that "when U S West and Global
Crossing were trying to finalize their $37 billion deal, Qwest approached U S
West about a possible deal and asked for more time to prepare a bid. U S West,
however, decided to proceed with the Global Crossing deal and rebuffed Qwest's
advances."
18. On June 13, 1999, Qwest announced that it was offering to
purchase all of the outstanding common shares of both U S West and Frontier in a
transaction valued at $55 billion in cash and stock plus the assumption of $11.4
billion in debt.
19. Pursuant to the terms of Qwest's offer, U S West's shareholders
would receive 1.783 shares of Qwest common stock for each U S West share. Based
on the closing price of Qwest on Friday, June 11, 1999, each U S West share is
valued at about $80. This represents a premium of approximately 46% over
Friday's closing price for U S West shares of $54.875.
20. Under the proposed acquisition with Qwest, defendant Trujillo
will be invited to serve as Qwest's Vice Chairman but will apparently not be
offered a position as an executive officer of Qwest. Additionally, only three of
U S West directors will be invited to join Qwest's Board.
21. U S West has a shareholder's rights plan (the "Rights Plan")
which is triggered whenever a person or group acquires 15 percent or more of U S
West's common stock. The Rights Plan provides that holders of U S West common
stock, other than the "acquiring person" are entitled to acquire the common
stock of the Company at half its market price.
22. In connection with the merger between U S West and Global, U S
West amended the Rights Plan so that it is not applicable to the transaction
between U S West and Global. By rejecting the overtures of Qwest and refusing to
amend the Rights Plan to permit Qwest to pursue its offer, the Individual
Defendants have created an unlevel playing field and are improperly favoring
Global over Qwest and other competing bidders.
23. The Rights Plan permits the Individual Defendants to manipulate
the corporate machinery of U S West, thereby impairing the corporate democratic
process within the Company at the expense and to the detriment of the Company's
common stockholders. The Rights Plan restrains and impairs the ability of U S
West stockholders to affect corporate policy, and freely structure the
directorial constituency of the Company. The Rights Plan, INTER ALIA, impedes
shareholder ability to accumulate shares and associate together to replace
incumbent management, oppose any management initiative, or otherwise affect
corporate policy through stockholder resolutions. By effectively preventing any
single party from owning and thereby voting greater than 15% of the outstanding
common shares, management clearly has a significant advantage in any proxy
contest which might threaten to eliminate or diminish their control over U S
West. The Rights Plan thereby serves to perpetuate senior management's control
over the business and operations of the Company and to frustrate potential
bidders for U S West.
24. Defendants have refused to fulfill their fiduciary duties to U S
West's public shareholders and consider all bona fide offers for the Company.
Defendants, in an attempt to entrench themselves in their positions and offices
with the Company, have placed their own interests ahead of the interests of U S
West's public shareholders.
25. Defendants' refusal to negotiate has deprived and will continue
to deprive the Company's public shareholders of the very substantial premium
which Qwest is prepared to pay.
26. Moreover, defendants have refused to take those steps necessary
to ensure that the Company's shareholders will receive maximum value for their
shares of U S West stock. Defendants refused to negotiate with Qwest and to
seriously consider the offer Qwest indicated it was prepared to make in order to
maximize shareholder value in selling the Company.
27. As a result of the actions of the Individual Defendants,
plaintiff and the other members of the Class have been and will be damaged in
that they have not and will be not receive their fair proportion of the value of
U S West's assets and businesses and/or have been and will prevented from
obtaining a fair and adequate price for their shares of U S West's common stock.
28. Unless enjoined by this Court, defendants will continue to
breach their fiduciary duties owed to plaintiff and the Class, and will succeed
in their plan to entrench themselves and deprive the Class of the opportunity to
maximize the value of their U S West holdings either in a transaction with Qwest
or some other BONA FIDE offeror, all to the irreparable harm of the Class.
29. Plaintiff and the Class have no adequate remedy at law.
WHERFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action;
B. ordering the individual defendants to carry out their
fiduciary duties to plaintiff and the other members of the Class by
announcing their intention to:
1) cooperate fully with any person or entity, having a BONA
FIDE interest in proposing any transaction which would maximize shareholder
value, including, but not limited to, a buyout or takeover of the Company by
Qwest;
2) undertake an appropriate evaluation of U S West's worth as
a merger/acquisition candidate;
3) take all appropriate steps to enhance U S West's value and
attractiveness as a merger/acquisition candidate;
4) take all appropriate steps to effectively expose U S West
to the marketplace in an effort to create an active auction for U S West;
C. directing the Individual Defendants to deploy U S West's Rights
Plan in a manner that will produce the best value maximizing transaction for U S
West shareholders;
D. ordering the individual defendants, jointly and severally, to
account to plaintiff and the Class for all damages suffered and to be suffered
by them as a result of the acts and transactions alleged herein;
E. awarding plaintiff the costs and disbursements of this action,
including a reasonable allowance for plaintiff's attorneys' and experts' fees;
and
F. granting such other and further relief as may be just and proper
in the premises.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By:___________________________________
Suite 1401, Mellon Bank Center
919 Market Street
P.O. Box 1070
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
WEISS & YOURMAN
555 Fifth Avenue
Suite 1600, The French Building
New York, New York 10176
(212) 682-3025
June 14, 1999
Exhibit (g)(4)
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------------------------
|
H.A. FAMILY TRUST, |
|
Plaintiff, |
| Civil Action No. 17227
- against - |
|
HANK BROWN, GEORGE J. HARAD, MARILYN CARLSON |
NELSON, ALLEN F. JACOBSON, PETER S. HELLMAN, |
RICHARD D. McCORMICK, FRANK POPOFF, LINDA G. |
ALVARADO, CRAIG R. BARRETT, JERRY J. COLANGELO, |
SOLOMON D. TRUJILLO, and U S WEST, INC. |
|
Defendants. |
|
- ---------------------------------------------------
CLASS ACTION COMPLAINT
-------------------------------------------------------
Plaintiff, by its attorneys, Rosenthal, Monhait, Gross & Goddess,
P.A., for its complaint against defendants, alleges upon information and belief,
except for paragraph 2 hereof, which is alleged upon knowledge as follows:
1. Plaintiff brings this action pursuant to Rule 23 of the Rules of
the Court of Chancery on its behalf and as a class action on behalf of all
persons, other than defendants and those in privity with them, who own the
common stock of U S West, Inc. ("U S West" or the "Company").
2. Plaintiff has been the owner of the common stock of the Company
since prior to the transaction herein complained of and continuously to date.
3. Defendant U S West is a corporation duly organized and existing
under the laws of the State of Delaware. The Company provides a full range of
advanced telecommunications services including wireline, wireless PCS, data
networking, directory and information services to more than 25 million customers
nationally. The Company maintains its headquarters at 1801 California Street,
Denver, Colorado.
4. Defendant Richard D. McCormick is Chairman of the Board of
Directors of the Company.
5. Defendant Solomon D. Trujillo is and was at all relevant times
the President, Chief Executive Officer and a Director of U S West.
6. Defendants Hank Brown, George J. Harad, Marilyn Carlson
Nelson, Allen F. Jacobson, Peter S. Hellman, Frank Popoff, Linda G. Alvarado,
Craig R. Barrett, Jerry J. Colangelo are and were at all relevant times
directors of U S West.
7. The Individual Defendants named in paragraphs 4 through 6 are in
a fiduciary relationship with the plaintiff and the other public stockholders of
U S West and owe them the highest obligations of good faith, due dare, candor
and fair dealing.
CLASS ACTION ALLEGATIONS
------------------------
8. Plaintiff brings this action on its own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all security holders of the Company (except the defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defendants) and their successors in interest, who are or will be
threatened with injury arising from defendants' actions as more fully described
herein.
9. This action is properly maintainable as a class action.
10. The class is so numerous that joinder of all members is
impracticable. As of March 15, 1999, there were approximately 502,903,055 shares
of U S West common stock outstanding, owned by shareholders located throughout
the country (the "Class").
11. There are questions of law and fact which are common to the
Class including, INTER ALIA, the following: (a) whether defendants have breached
their fiduciary and other common law duties owed by them to plaintiff and the
members of the Class; (b) whether defendants are unlawfully impeding a takeover
attempt and improperly seeking to entrench themselves in their own positions at
the expense of the public shareholders of U S West; (c) whether defendants'
actions hereinafter described, constitute a breach of the duty of fair dealing
with respect to the plaintiff and the other members of the Class, and a failure
to maximize shareholder value; and (d) whether the Class is entitled to
injunctive relief or damages as a result of the wrongful conduct committed by
defendants.
12. Plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature. The claims
of the plaintiff are typical of the claims of other members of the Class and
plaintiff has the same interests as the other members of the Class. Plaintiff
will fairly and adequately represent the Class.
13. Defendants have acted in a manner which affects plaintiff and
all members of the Class, thereby making appropriate injunctive relief and/or
corresponding declaratory relief with respect to the Class as a whole.
14. The prosecution of separate actions by individual members of the
Class would create a risk of inconsistent or varying adjudications with respect
to individual members of the Class, which would establish incompatible standards
of conduct for defendants, or adjudications with respect to individual members
of the Class which would, as a practical matter, be dispositive of the interests
of other members or substantially impair or impede their ability to protect
their interests.
SUBSTANTIVE ALLEGATIONS
-----------------------
15. On May 17, 1999, U S West and Global Crossing Ltd. ("Global")
announced that they had entered into a definitive merger agreement. In a related
transaction, Global was to acquire Frontier Corporation ("Frontier") and the
three companies were to merge to form a new company named Global Crossing
Corporation. Under the terms of the proposed merger with Global, Global Crossing
was to create two separate tracking stocks, Class G shares and Class L shares.
The Class G shares would track the combined companies' high growth global data
and voice network and internet assets and would not pay a cash dividend. The
Class L shares would track the performance of the combined companies' existing
local telecommunications assets and would pay a cash dividend. U S West
shareholders had the option of exchanging each of their shares for either 1.2
Class G shares or 1.2 Class L shares. The total value of the merger of the
Global-U S West merger was approximately $30.94 billion.
16. The U S West-Global merger provided that defendant Trujillo
would become Co-Chairman and Co-Chief Executive Officer of the combined company.
Furthermore, the combined company would have a 22-member Board of Directors, 10
designated by U S West, 10 by Global, and 2 appointed by mutual agreement.
Accordingly, defendant Trujillo would retain his positions as an executive
officer and a director of the combined company and virtually all of the other
Individual Defendants would retain their directorships in the combined company.
17. On June 8, 1999, REUTERS reported that "when U S West and Global
Crossing were trying to finalize their $37 billion deal, Qwest approached U S
West about a possible deal and asked for more time to prepare a bid. U S West,
however, decided to proceed with the Global Crossing deal and rebuffed Qwest's
advances."
18. On June 13, 1999, Qwest announced that it was offering to
purchase all of the outstanding common shares of both U S West and Frontier in a
transaction valued at $55 billion in cash and stock plus the assumption of $11.4
billion in debt.
19. Pursuant to the terms of Qwest's offer, U S West's shareholders
would receive 1.783 shares of Qwest common stock for each U S West share. Based
on the closing price of Qwest on Friday, June 11, 1999, each U S West share is
valued at about $80. This represents a premium of approximately 46% over
Friday's closing price for U S West shares of $54.875.
20. Under the proposed acquisition with Qwest, defendant Trujillo
will be invited to serve as Qwest's Vice Chairman but will apparently not be
offered a position as an executive officer of Qwest. Additionally, only three of
U S West's directors will be invited to join Qwest's Board.
21. U S West has a shareholder's rights plan (the "Rights Plan")
which is triggered whenever a person or group acquires 15 percent or more of U S
West's common stock. The Rights Plan provides that holders of U S West common
stock, other than the "acquiring person" are entitled to acquire the common
stock of the Company at half its market price.
22. In connection with the merger between U S West and Global, U S
West amended the Rights Plan so that it is not applicable to the transaction
between U S West and Global. By rejecting the overtures of Qwest and refusing to
amend the Rights Plan to permit Qwest to pursue its offer, the Individual
Defendants have created an unlevel playing field and are improperly favoring
Global over Qwest and other competing bidders.
23. The Rights Plan permits the Individual Defendants to manipulate
the corporate machinery of U S West, thereby impairing the corporate democratic
process within the Company at the expense and to the detriment of the Company's
common stockholders. The Rights Plan restrains and impairs the ability of U S
West stockholders to affect corporate policy, and freely structure the
directorial constituency of the Company. The Rights Plan, inter alia, impedes
shareholder ability to accumulate shares and associate together to replace
incumbent management, oppose any management initiative, or otherwise affect
corporate policy through stockholder resolutions. By effectively preventing any
single party from owning and thereby voting greater than 15% of the outstanding
common shares, management clearly has a significant advantage in any proxy
contest which might threaten to eliminate or diminish their control over U S
West. The Rights Plan thereby serves to perpetuate senior management's control
over the business and operations of the Company and to frustrate potential
bidders for U S West.
24. Defendants have refused to fulfill their fiduciary duties to U S
West's public shareholders and consider all bona fide offers for the Company.
Defendants, in an attempt to entrench themselves in their positions and offices
with the Company, have placed their own interests ahead of the interests of U S
West's public shareholders.
25. Defendants' refusal to negotiate has deprived and will continue
to deprive the Company's public shareholders of the very substantial premium
which Qwest is prepared to pay.
26. Moreover, defendants have refused to take those steps necessary
to ensure that the Company's shareholders will receive maximum value for their
shares of U S West stock. Defendants refused to negotiate with Qwest and to
seriously consider the offer Qwest indicated it was prepared to make in order to
maximize shareholder value in selling the Company.
27. As a result of the actions of the Individual Defendants,
plaintiff and the other members of the Class have been and will be damaged in
that they have not and will not receive their fair proportion of the value of U
S West's assets and businesses and/or have been and will be prevented from
obtaining a fair and adequate price for their shares of U S West's common stock.
28. Unless enjoined by this Court, defendants will continue to
breach their fiduciary duties owed to plaintiff and the Class, and will succeed
in their plan to entrench themselves and deprive the Class of the opportunity to
maximize the value of their U S West holdings either in a transaction with Qwest
or some other BONA FIDE offeror, all to the irreparable harm of the Class.
29. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action;
B. ordering the individual defendants to carry out their
fiduciary duties to plaintiff and the other members of the Class by
announcing their intention to:
1) cooperate fully with any person or entity, having a BONA
FIDE interest in proposing any transaction which would maximize shareholder
value, including, but not limited to, a buyout or takeover of the Company by
Qwest;
2) undertake an appropriate evaluation of U S West's worth as
a merger/acquisition candidate;
3) take all appropriate steps to enhance U S West's value and
attractiveness as a merger/acquisition candidate;
4) take all appropriate steps to effectively expose U S West
to the marketplace in an effort to create an active auction for U S West;
C. directing the Individual Defendants to deploy U S West's Rights
Plan in a manner that will produce the best value maximizing transaction for U S
West shareholders;
D. ordering the individual defendants, jointly and severally, to
account to plaintiff and the Class for all damages suffered and to be suffered
by them as a result of the acts and transactions alleged herein;
E. awarding plaintiff the costs and disbursements of this action,
including a reasonable allowance for plaintiff's attorneys' and experts' fees;
and
F. granting such other and further relief as may be just and proper
in the premises.
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By:____________________________________
Suite 1401, Mellon Bank Center
919 Market Street
P.O. Box 1070
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
BERNSTEIN LIEBHARD & LIFSHITZ, LLP
10 East 40th Street
New York, New York 10016
(212) 779-1414
June 14, 1999
Exhibit (g)(5)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------------------------
JEROME KAPLAN, KENNETH STEINER and |
MORRIS MONDSCHEIN, |
| C.A. No. 17232
Plaintiffs, |
|
v. |
|
U.S. WEST, INC., LINDA G. ALVARADO, |
CRAIG R. BARRETT, HANK BROWN, |
GERALD J. COLANGELO, GEORGE J |
HARAD, PETER S. HELLMAN, ALLEN F. |
JACOBSON, RICHARD D. McCORMICK, |
MARILYN CARLSON NELSON, FRANK P. |
POPOFF, and SOLOMON D. TRUJILLO, |
|
Defendants. |
|
- ---------------------------------------------------
CLASS ACTION COMPLAINT
----------------------
Plaintiffs, by and through their attorneys, allege upon information
and belief except as to themselves and their own actions, which they allege upon
knowledge, as follows:
SUMMARY OF ACTION
-----------------
1. This action is brought seeking redress for breaches of fiduciary
duties the defendants in connection with the agreement for U.S. West Inc. to be
acquired by Global Crossing Ltd. Plaintiffs bring this action on behalf of the
public holders of the outstanding common shares of U.S. West for injunctive and
other relief.
THE PARTIES
-----------
2. Plaintiffs own common stock of U.S. West.
3. U.S. West Inc. ("U.S. West or the "Company") is a Delaware
corporation which is a holding company with subsidiaries which provide
telecommunication services. As of January 29, 1999, U.S. West had approximately
503,189,703 shares of common stock outstanding held by over 616,000 shareholders
of record scattered throughout the United States.
4. Defendant Linda G. Alvarado is a Director of U.S. West.
5. Defendant Craig R. Barrett is a Director of U.S. West.
6. Defendant Hank Brown is a Director of U.S. West.
7. Defendant Gerald J. Colangelo is a Director of U.S. West.
8. Defendant George J. Harad is a Director of U.S. West.
9. Defendant Peter S. Hellman is a Director of U.S. West.
10. Defendant Allen F. Jacobson is a Director of U.S. West.
11. Defendant Richard D. McCormick is a Director of U.S. West.
12. Defendant Marilyn Carlson Nelson is a Director of U.S. West.
13. Defendant Frank P. Popoff is a Director of U.S. West.
14. Defendant Solomon D. Trujillo is a Director, Chairman of the
Board, President and Chief Executive Officer of U.S. West.
15. The individual defendants (collectively the "Individual
Defendants"), as directors of U.S. West owe fiduciary duties of good faith,
loyalty, fair dealing, due care, and disclosure to plaintiffs and the other
members of the Class (as defined below).
CLASS ACTION ALLEGATIONS
------------------------
16. Plaintiffs bring this action pursuant to Rule 23 of the Rules of
the Court, on behalf of themselves and all other shareholders of U.S. West
(except the defendants herein and any persons, firm, trust, corporation, or
other entity related to or affiliated with them and their successors in
interest), who are or will be threatened with injury arising from defendants'
actions, as is more fully described herein (the "Class").
17. This action is properly maintainable as a class action for the
following reasons:
a. The Class is so numerous that joinder of all members is
impracticable. There are approximately 600,000 record shareholders of U.S. West
stock and many more beneficial owners who are members of the Class.
b. Members of the Class are scattered throughout the United
States and are so numerous that it is impracticable to bring them all before
this Court.
c. There are questions of law and fact that are common to the
Class and that predominate over questions affecting any individual class member.
The common questions include, INTER ALIA the following:
(1) Whether the Individual Defendants, as directors
of U.S. West, have fulfilled, their fiduciary duties to plaintiffs and the
other members of the Class, including their duties of good faith, fairness,
loyalty, due care, and disclosure; and
(2) Whether plaintiffs and the other members of the
Class would be irreparably damaged were defendants not enjoined from the conduct
described herein.
d. The claims of plaintiffs are typical of the claims of the
other members of the Class in that all members of the Class will be damaged by
defendants' actions.
e. Plaintiffs are committed to prosecuting this action and
have retained competent counsel experienced in litigation of this nature.
Plaintiffs are adequate representatives of the Class and will fairly and
adequately protect the interests of the Class.
f. Plaintiffs anticipate that there will not be any difficulty
in the management of this litigation as a class action.
g. The prosecution of separate actions by individual members
of the Class would create a risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for the party opposing the Class.
h. Defendants have acted or refused to act on grounds
generally applicable to the Class, thereby making appropriate final injunctive
relief or corresponding declaratory relief with respect to the Class as a whole.
SUBSTANTIVE ALLEGATIONS
-----------------------
18. On or about May 17, 1999, it was announced that U.S. West had
agreed to be acquired by Global Crossing Ltd., ("Global") a Bermuda corporation.
Under the agreement with Global, U.S. West would purchase 9.5 percent of Global
for approximately $2.4 billion, and Global and U.S. West would subsequently
merge in a 50-50 stock combination. The combined company would have two separate
stocks: one to track the Internet and data assets, and the other to track the
telephone assets. U.S. West stockholders would be able to choose which stock
they would hold. Each U.S. West share would be exchanged for 1.2 shares of
either tracking stock. Defendant Trujillo would share the top post with Global's
CEO and the board would have ten directors from each company. Global also agreed
to acquire Frontier Corp. ("Frontier").
19. On June 13, 1999 Qwest Communications International Inc.
("Qwest") made an offer to acquire U.S. West and Frontier. Qwest's offer for
U.S. West involves the exchange of 1.738 shares of Qwest stock for every U.S.
West share. If Frontier agrees to the transaction, Qwest will increase its offer
for U.S. West to 1.783 shares of Qwest for each share of U.S. West. Qwest will
exchange 1.181 shares for each share of Frontier if U.S. West does not agree to
be acquired, but if U.S. West agrees to the transaction, Qwest will increase its
offer for Frontier to 1.226 shares of Qwest for each share of Frontier.
20. On Friday, June 11, 1999, U.S. West closed at $54-7/8 per share,
Frontier closed at $55-7/16 per share, and Qwest closed at $44-7/8 per share.
Reportedly, Qwest plans to request U.S. West Chairman and Chief Executive
Officer and President, Trujillo, to become Vice Chairman of the combined
company, and that three U.S. West directors join the Qwest board.
21. Based upon the June 11, 1999 closing prices, Qwest's bid had a
value of approximately $80 per share, a 45.8% premium over U.S. West's closing
price on June 11, 1999. In addition, Qwest reportedly has procured a line of
acquisition financing sufficient to cover the needs of the two proposals.
22. As directors of U.S. West, the Individual Defendants were and
are under a duty to fully inform themselves before taking action, or agreeing to
refrain from taking action, to elicit, promote, consider and evaluate reasonable
and BONA FIDE offers for U.S. West. The Individual Defendants apparently have
failed adequately to evaluate and value U.S. West and the available
alternatives, given the emergence of Qwest and the previous agreement with
Global. The Individual Defendants have breached their fiduciary duties by, among
other matters, failing to fully inform themselves regarding the value of U.S.
West and available alternatives, including a transaction with Qwest. The
agreement for U.S. West to acquire over 9 percent of Global will impede the
maximization of shareholder value and the available alternatives.
23. By reason of the foregoing acts, practices and course of conduct
of defendants, plaintiffs and the other members of the Class have been and will
be damaged and will be prevented from making an informed decision, and will
wrongfully be impeded from considering any other third party offer for greater
consideration, including the Qwest offer.
24. Plaintiffs have no adequate remedy at law.
25. WHEREFORE, plaintiffs demand judgment as follows:
a. Declaring this to be a proper class action and naming
plaintiffs as Class representatives and their attorneys as Class counsel;
b. Ordering defendants to carry out their fiduciary duties to
plaintiffs and the other members of the Class, including those of duty of care,
good faith, loyalty, full disclosure, and fairness;
c. Granting preliminary and permanent injunctive relief
against the consummation of any transaction until the Individual Defendants have
fulfilled their fiduciary duties;
d. Ordering the individual defendants to explore alternatives
and to negotiate in good faith with all interested persons, including but not
limited to Qwest:
e. Ordering the individual defendants to provide access to
information concerning U.S. West to any BONA FIDE bidder, including Qwest;
f. Ordering defendants, jointly and severally, to pay to
plaintiffs and to other members of the Class all damages suffered and to be
suffered by them as the result of the acts alleged herein;
g. Ordering defendants, jointly and severally, to account to
plaintiffs and the Class for all profits realized and to be realized by them as
a result of the actions complained of and, pending such accounting, to hold such
profits in a constructive trust for the benefit of plaintiffs and other members
of the Class;
h. Awarding plaintiffs the costs and disbursements of the
action including allowances for plaintiffs' reasonable attorneys and experts
fees; and
i. Granting such other and further relief as may be just and
proper in the premises.
Dated: June 15, 1999 CHIMICLES & TIKELLIS LLP
---------------------------------------
Pamela S. Tikellis
James C. Strum
Robert J. Kriner, Jr.
One Rodney Square
P.O. Box 1035
Wilmington, Delaware 19899
(302) 656-2500
OF COUNSEL:
WOLF, HALDENSTEIN, ADLER, FREEMAN & HERZ
270 Madison Avenue
New York, NY 10016
(212) 545-4600
Exhibit (g)(6)
DISTRICT COURT, CITY AND COUNTY OF DENVER, STATE OF COLORADO
CASE NO.: 99 CV 3354
- --------------------------------------------------------------------------------
AMENDED CLASS ACTION COMPLAINT
AND JURY DEMAND
- --------------------------------------------------------------------------------
PAMELA CAGAN,
Plaintiff,
vs.
US WEST COMMUNICATIONS, INC., SOLOMON TRUJILLO, RICHARD McCORMICK, MANUEL
FERNANDEZ, HANK BROWN, LINDA ALVARADO, DR. CRAIG BARRETT, MARILYN CARLSON
NELSON, FRANK POPOFF, PETER HELLMAN, GEORGE HARAD and JERRY COLANGELO,
Defendants.
- -------------------------------------------------------------------------------
Plaintiff, by her attorneys, alleges upon information and belief,
except as to paragraph 1 which plaintiff alleges upon knowledge, as follows:
1. Plaintiff Pamela Cagan is and was, at all times relevant to this
action, a stockholder of defendant US WEST Inc. ("US WEST" or the "Company").
2. Defendant US WEST is a corporation duly organized and existing
under the laws of the state of Colorado, with principal offices located at 1801
California Street, Denver, Colorado. As of January 29, 1999 there were
approximately 503 million shares of US WEST common stock outstanding. US WEST is
a holding company with subsidiaries which provide telecommunications services,
including local telephone services, exchange access services, domestic and
international broadcast communications, wireless communications and directories
services.
3. Defendant Solomon Trujillo is and was, at all times relevant
hereto, Chairman of the Board of Directors, President and Chief Executive
Officer of US WEST.
4. Defendants Richard McCormick, Manuel Fernandez, Hank Brown, Linda
Alvarado, Dr. Craig Barrett, Marilyn Carlson Nelson, Frank Popoff, Peter
Hellman, George Harad and Jerry Colangelo are and were, at all times relevant
hereto, members of US WEST's Board of Directors.
5. By reason of their positions as officers and directors of US
WEST, each Individual Defendant has a fiduciary relationship and responsibility
to plaintiff and the other common public stockholders of US WEST and owes to
plaintiff and the other class members the highest obligations of good faith and
fair dealing.
CLASS ACTION ALLEGATIONS
------------------------
6. Plaintiff brings this action on her own behalf and as a class
action on behalf of all common stockholders of US WEST, or their successors in
interest, who are being and will be harmed by defendants' actions described
below (the "Class"). Excluded from the Class are defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of defendants.
7. This action is properly maintainable as a class action because:
(a) The Class as so numerous that joinder of all members is
impracticable. There are hundreds, if not thousands, of US WEST stockholders who
are located throughout the United States;
(b) There are questions of law and fact which are common to
the Class and which predominate over questions affecting any individual Class
members, including whether plaintiff and the other Class members would be
irreparably damaged if the defendants are not enjoined in the manner described
below;
(c) Plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature. The claims
of plaintiff are typical of the claims of the other members of the Class and
plaintiff has thc same interests as the other members of the Class. Accordingly,
plaintiff is an adequate representative of the Class and will fairly and
adequately protect the interests of the Class; and
(d) Plaintiff anticipates that there will be no difficulty in
the management of this litigation.
8. For the reasons stated herein, a class action is superior to
other available methods for the fair and efficient adjudication of this
controversy and the class action requirements are satisfied.
CLAIM FOR RELIEF
----------------
9. On May 17, 1999 defendants announced that US WEST had entered a
definitive agreement to merge with Global Crossing Ltd. ("Global Crossing") in
which US WEST would purchase 9.5% of Global Crossing for approximately $2.4
billion and the companies will subsequently merge in a 50-50 stock combination.
Under the proposed transaction (the "Global Crossing Transaction"), defendant
Trujillo, the Chief Executive Officer of US WEST, would head the combined entity
with Robert Annunziata, Global Crossing's Chief Executive Officer.
10. The announcement followed Global Crossing's agreement in March,
1999 to acquire Frontier Corp. ("Frontier"), a phone company based in Rochester,
New York for about $11 billion in stock.
11. On May 17, 1999, news stories revealed that the companies'
negotiations concerning the proposed Global Crossing Transaction were
complicated because QWEST Communications International, Inc. ("QWEST") had
expressed interest in a transaction with US WEST but US WEST rejected QWEST's
overture.
12. In the proposed Global Crossing Transaction, US WEST would have
to pay to Global Crossing a $600 million breakup fee if it did not proceed with
the proposed Transaction and pay an additional $250 million fee to Global
Crossing if US WEST initiates a break-up of the proposed Transaction.
13. After the proposed Global Crossing Transaction was announced on
May 17, 1999, US WEST's shares fell $4 per share, to close at $58.25.
14. The reaction of' the stock price reflected the dilution to US
WEST's shareholders as a result of the proposed Global Crossing Transaction, US
WEST's revenues would account for more than 80% of the revenues of the combined
companies if the Global Crossing Transaction were completed but US WEST and its
shareholders would own only half of the merged entity.
15. On June 14, 1999, news stories reported that QWEST had offered
to acquire US WEST and Frontier Corp. in a transaction valued at $55 billion in
cash and stock and $11.4 billion in assumed debt, topping the Global Crossing
Transaction which was valued at approximately $42 billion.
16. QWEST is offering 1.783 shares of QWEST common stock for each US
WEST share -- about $80 per share.
17. In light of the foregoing, the Individual Defendants must as
their fiduciary obligations require:
o undertake an appropriate evaluation of US WEST's worth as a
merger/acquisition candidate;
o take all appropriate steps to enhance US WEST's value and
attractiveness as a merger/acquisition candidate;
o take all appropriate steps to effectively expose US WEST to
the marketplace, including but not limited to engaging in
serious negotiations with QWEST, Global Crossing or their
representatives and other interested parties;
o act independently so that the interests of US WEST's public
stockholders will be protected; and
o adequately ensure that no conflicts of interest exist between
defendants' own interests and their fiduciary obligation to
maximize stockholder value or, if such conflicts exist, to
ensure that all conflicts be resolved in the best interests of
US WEST's public stockholders.
18. As a result of defendants' failure to take such steps, plaintiff
and the other members of the Class have been and will be damaged in that they
have not and will not receive their proportionate share of the value of the
Company's assets and business, have been and will be prevented from obtaining a
fair price for their common stock, and will be subject to the unreasonable
economic burden of the breakup fee from the Global Crossing Transaction without
any corresponding benefit to US WEST or its shareholders.
19. Unless enjoined by this Court, defendants will continue to
breach their fiduciary duties owed to plaintiff and the other members of the
Class, by maintaining themselves in office and/or failing to take the steps set
forth above, excluding the Class from its fair proportionate share of US WEST's
valuable assets and businesses, all to the irreparable harm of the Class.
20. Plaintiff and the other members of the Class have no adequate
remedy at law. WHEREFORE, plaintiff prays for judgment and relief as follows:
A. Ordering that this action may be maintained as a class
action and certifying plaintiff as a Class representative;
B. Declaring that defendants breached their fiduciary and other
duties to plaintiff and the other members of the Class;
C. Entering an order requiring defendants to take the steps
set forth hereinabove;
D. Awarding compensatory damages against defendants
individually and severally in an amount to be determined upon the
proof submitted to this Court;
E. Awarding costs and disbursements, including plaintiff's counsel's
fees and experts' fees; and
F. Granting such other and further relief as to the Court may seem
just and proper.
A JURY TRIAL IS DEMANDED.
Dated at Denver, Colorado this 14th day of June, 1999.
BADER & ASSOCIATES, P.C.
By:
------------------------------------
Gerald L. Bader, Jr., No. 3625
1660 Wynkoop Street, Suite 1100
Denver, Colorado 80202
Telephone: (303) 534-1700
Telecopier: (303) 534-0725
ATTORNEYS FOR PLAINTIFF
OF COUNSEL:
- ----------
ABBEY, GARDY & SQUITIERI, LLP
Stephen J. Fearon, Jr.
212 East 39th Street
New York, New York 10016
(212) 889-3700
