<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 1998
REGISTRATION NO. 333-50227
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
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<S> <C> <C> <C>
U S WEST, INC. (to be renamed
"MediaOne Group, Inc.") DELAWARE 4841 84-0926774
MEDIAONE GROUP FUNDING, INC. DELAWARE 4841 APPLIED FOR
MEDIAONE FINANCE TRUST I DELAWARE 4841 APPLIED FOR
MEDIAONE FINANCE TRUST II DELAWARE 4841 APPLIED FOR
(Exact name of Registrant as (State or other Jurisdiction (Primary Standard (I.R.S. Employer
Specified in its Charter) of Industrial Code Number) Identification
Incorporation or Number)
Organization)
</TABLE>
7800 EAST ORCHARD ROAD
ENGLEWOOD, COLORADO 80111
(303) 793-6500
(Address, including ZIP code, and telephone number, including
area code, of each registrants' principal executive offices)
STEPHEN E. BRILZ, ESQ.
U S WEST, INC.
7800 EAST ORCHARD ROAD
ENGLEWOOD, COLORADO 80111
(303) 793-6500
(Name, address, including ZIP code, and telephone number, including
area code, of agent for service)
------------------------
COPIES TO:
DENNIS J. BLOCK, ESQ.
WEIL, GOTSHAL & MANGES LLP
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 310-8000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
Upon consummation of the Offers described herein.
------------------------
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL") permits the
board of directors of each of U S WEST and MediaOne Funding to indemnify any
person against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with any threatened, pending or completed action, suit or proceeding in which
such person is made a party by reason of his being or having been a director,
officer, employee or agent of U S WEST or MediaOne Funding, as the case may be,
in terms sufficiently broad to permit such indemnification under certain
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the Securities Act of 1933, as amended (the "Securities Act"). The
statute provides that indemnification pursuant to its provisions is not
exclusive of other rights of indemnification to which a person may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise.
The Certificate of Incorporation and Bylaws of each of U S WEST and MediaOne
Funding provides for indemnification of its directors and officers to the
fullest extent permitted by law.
As permitted by section 102 of the DGCL, the Certificate of Incorporation of
each of U S WEST and MediaOne Funding eliminates a person's liability to U S
WEST or MediaOne Funding, as the case may be, or its stockholders for monetary
damages for breach of fiduciary duty as a director, including without limitation
for serving on a committee of the board of directors of U S WEST or MediaOne
Funding; provided, however, that the foregoing does not eliminate or limit
liability (i) for any breach of the director's duty of loyalty to U S WEST or
MediaOne Funding or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under section 174 of the DGCL or (iv) for any transaction from which the
director derived an improper personal benefit.
The Declaration of each of New Trust provides that no New Regular Trustee,
affiliate of any New Regular Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives or agents of any New Regular
Trustee, or any employee or agent of such New Trust or its affiliates (each an
"Indemnified Person") shall be liable, responsible or accountable in damages or
otherwise to such New Trust or any employee or agent of the trust or its
affiliates for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of such New Trust and in a manner such Indemnified Person reasonably believed to
be within the scope of the authority conferred on such Indemnified Person by
such Declaration or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omission.
The Declaration of each New Trust also provides that to the fullest extent
permitted by applicable law, U S WEST shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage or claim incurred by such
Indemnified Person by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of such New Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by such Declaration, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of gross
negligence or willful misconduct with respect to such act or omissions. The
Declaration of each New Trust further provides that, to the fullest extent
permitted by applicable law, expenses (including legal fees) incurred by an
Indemnified Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by U S WEST prior to the final disposition
of such claim, demand, action, suit or proceeding upon receipt by of an
undertaking by or on behalf of the
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<PAGE>
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified for the underlying cause of
action as authorized by such Declaration.
The directors and officers of U S WEST, MediaOne Funding and the New Regular
Trustees of each New Trust are covered by insurance policies indemnifying
against certain liabilities, including certain liabilities arising under the
Securities Act, which might be incurred by them in such capacities and against
which they cannot be indemnified by U S WEST, MediaOne Funding and the New
Trusts.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibits identified in parentheses below are on file with the Securities and
Exchange Commission and are incorporated herein by reference to such previous
filings. All other exhibits are provided as part of this electronic
transmission.
<TABLE>
<C> <C> <S>
(2-A) -- Form of Separation Agreement between U S WEST, Inc. (to be renamed MediaOne
Group, Inc.) and USW-C, Inc. (to be renamed "U S WEST, Inc") (incorporated
by reference to Exhibit 2-A to Registration Statement on Form S-4 of USW-C,
Inc., File No. 333-45765)
(3-A) -- Restated Certificate of Incorporation of U S WEST, Inc. (to be renamed
"MediaOne Group, Inc.") (incorporated by reference to Annex A-2 to
Prospectus included in Registration Statement on Form S-4 of USW-C, Inc.,
File No. 333-45765)
*3-B -- Certificate of Incorporation of MediaOne Group Funding, Inc.
*3-C -- Bylaws of U S WEST, Inc. (to be renamed "MediaOne Group, Inc.")
*3-D -- Bylaws of MediaOne Group Funding, Inc.
*3-E -- Certificate of Trust of MediaOne Finance Trust I
*3-F -- Certificate of Trust of MediaOne Finance Trust II
*4-A -- Form of Amended and Restated Declaration of Trust of MediaOne Finance Trust
I
*4-B -- Form of Amended and Restated Declaration of Trust of MediaOne Finance Trust
II
*4-C -- Form of Indenture among MediaOne Group Funding, Inc., U S WEST, Inc. (to be
renamed "MediaOne Group, Inc.") and Norwest Bank Minnesota, National
Association, as Trustee.
*4-D -- Form of First Supplemental Indenture with respect to the Debt Securities to
be issued to MediaOne Finance Trust I
*4-E -- Form of Second Supplemental Indenture with respect to the Debt Securities to
be issued to MediaOne Finance Trust II
*4-F -- Form of Preferred Security of MediaOne Finance Trust I (included in Exhibit
4-A)
*4-G -- Form of Preferred Security of MediaOne Finance Trust II (included in Exhibit
4-B)
*4-H -- Form of Debt Security and Debt Guarantee to be issued to MediaOne Finance
Trust I (included in Exhibit 4-D)
*4-I -- Form of Debt Security and Debt Guarantee to be issued to MediaOne Finance
Trust II (included in Exhibit 4-E)
*4-J -- Form of Preferred Securities Guarantee for MediaOne Finance Trust I
*4-K -- Form of Preferred Securities Guarantee for MediaOne Finance Trust II
*5-A -- Opinion of Morris, Nichols, Arsht & Tunnell
*5-B -- Opinion of Weil, Gotshal & Manges LLP
*8-A -- Tax Opinion of Weil, Gotshal & Manges LLP
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <C> <S>
(12-A) -- Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to
Combined Fixed Charges and Preferred Stock Dividends (incorporated by
reference to Exhibit 12 to U S WEST's Annual Report on Form 10-K for the
year ended December 31, 1997 (as amended by form 10-K/A filed on April 13,
1998), File No. 1-8611)
*23-A -- Consent of Arthur Andersen LLP
*23-B -- Consent of Coopers & Lybrand L.L.P.
*23-C -- Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit 5-A)
*23-D -- Consent of Weil, Gotshal & Manges LLP (included in Exhibits 5-B and 8-A)
*24-A -- Powers of Attorney
*25-A -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of Norwest Bank Minnesota, National Association, as Trustee under the
Indenture
*25-B -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The First National Bank of Chicago, as Property Trustee under the
Declaration of Trust of MediaOne Finance Trust I
*25-C -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The First National Bank of Chicago, as Trustee under the Preferred
Securities Guarantee for MediaOne Finance Trust I
*25-D -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The First National Bank of Chicago, as Property Trustee under the
Declaration of Trust of MediaOne Finance Trust II
*25-E -- Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The First National Bank of Chicago, as Trustee under the Preferred
Securities Guarantee for MediaOne Finance Trust II
99-A -- Form of Letter of Transmittal and Consent
*99-B -- Form of Notice of Guaranteed Delivery
*99-C -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
other Nominees
99-D -- Form of Letter to Clients
*99-E -- Question and Answer Pamphlet
*99-F -- Tombstone Advertisement
</TABLE>
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* Previously filed.
ITEM 22. UNDERTAKINGS.
The Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement;
(iii) to include any material information with respect to the Offers not
previously disclosed in this Registration Statement or any material change
to such information in this Registration Statement;
II-3
<PAGE>
provided, however, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrants pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's Annual Report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(5) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the Registrant undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(6) That every prospectus: (i) that is filed pursuant to paragraph (5)
immediately preceding, or (ii) purports to meet the requirements of Section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(7) To respond to requests for information that is incorporated by reference
into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form, within one
business day of receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of this
Registration Statement through the date of responding to the request.
(8) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions referred to in Item 15 (other than the
insurance policies referred to therein), or otherwise, the Registrants have been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the respective Registrant of
expenses incurred or paid by a director, officer or controlling person of such
Registrant in the successful defense of any action, suit or proceeding) is
asserted against such Registrant by such director, officer or controlling person
in connection with the securities being registered, such Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, U S
WEST, Inc. (to be renamed "MediaOne Group, Inc.") certifies that it has
reasonable grounds to believe that it meets all the requirements for filing on
Form S-4 and has duly caused this Amendment No. 2 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Englewood, State of Colorado, on the 5th day of May, 1998.
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<S> <C> <C>
U S WEST, INC.
(to be renamed "MediaOne Group, Inc.")
By: /s/ STEPHEN E. BRILZ
-----------------------------------------
Stephen E. Brilz
Assistant Secretary
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<S> <C>
PRINCIPAL EXECUTIVE OFFICER:
Richard D. McCormick* President and Chief Executive Officer
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
Executive Vice President and Chief Financial
Michael P. Glinsky* Officer
DIRECTORS:
Robert L. Crandall*
Grant A. Dove*
Allan D. Gilmour*
Pierson M. Grieve*
George J. Harad*
Allen F. Jacobson*
Charles M. Lillis*
Richard D. McCormick*
Marilyn Carlson Nelson*
Frank Popoff*
Charles P. Russ, III*
Louis A. Simpson*
John "Jack" Slevin*
Solomon D. Trujillo*
Jerry O. Williams*
*By /s/ STEPHEN E. BRILZ
--------------------------------------
Stephen E. Brilz
Assistant Secretary
</TABLE>
Dated: May 5, 1998
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
MediaOne Group Funding, Inc. certifies that it has reasonable grounds to believe
that it meets all the requirements for filing on Form S-4 and has duly caused
this Amendment No. 2 to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Englewood, State of
Colorado, on the 5th day of May, 1998.
MEDIAONE GROUP FUNDING, INC.
By /s/ STEPHEN E. BRILZ
--------------------------------------
Stephen E. Brilz
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<S> <C>
PRINCIPAL EXECUTIVE OFFICER:
Contance P. Campbell* President
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
Vice President and Chief
Rahn K. Porter* Financial Officer
DIRECTORS:
Constance P. Campbell*
*By /s/ STEPHEN E. BRILZ
--------------------------------------
Stephen E. Brilz
Secretary
</TABLE>
Dated: May 5, 1998
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, each
of the undersigned Registrants certifies that it has reasonable grounds to
believe that it meets all the requirements for filing on Form S-4 and has duly
caused this Amendment No. 2 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Englewood,
State of Colorado, on the 5th day of May, 1998.
MEDIAONE FINANCE TRUST I
By /s/ CONSTANCE P. CAMPBELL
--------------------------------------
Constance P. Campbell, Trustee
By /s/ RHAN K. PORTER
--------------------------------------
Rhan K. Porter, Trustee
MEDIAONE FINANCE TRUST II
By /s/ CONSTANCE P. CAMPBELL
--------------------------------------
Constance P. Campbell, Trustee
By /s/ RHAN K. PORTER
--------------------------------------
Rhan K. Porter, Trustee
II-7
<PAGE>
LETTER OF TRANSMITTAL AND CONSENT
RELATING TO TENDER OF AND CONSENTS WITH RESPECT TO
U S WEST FINANCING I
7.96% TRUST ORIGINATED PREFERRED SECURITIES-SM- ("TOPRS-SM-")
(CUSIP 90388D204)
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THE SERIES I OFFER AND RELATED WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , , 1998, UNLESS EXTENDED.
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THE EXCHANGE AGENT FOR THE SERIES I OFFER AND THE SERIES II OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
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<S> <C> <C>
IF BY MAIL: IF BY HAND: IF BY OVERNIGHT DELIVERY:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges
Suite 4660 c/o the Depository Trust Suite 4680
P.O. Box 2569 Company 14 Wall Street, 8th Floor
Jersey City, New Jersey 55 Water Street, DTC TAD New York, New York
07303-2569 Vietnam Veterans Memorial Plaza 10005
New York, New York 10041
</TABLE>
IF BY FACSIMILE TRANSMISSION:
(For Eligible Institutions only)
(201) 222-4720
or
(201) 222-4721
FACSIMILE CONFIRMATION NUMBER:
(201) 222-4707
DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT (THE "LETTER OF
TRANSMITTAL") OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
THIS LETTER OF TRANSMITTAL IS TO BE USED BY BOTH (1) HOLDERS OF OLD SERIES I
PREFERRED SECURITIES WHO ARE TENDERING PURSUANT TO THE OFFER AND (2) HOLDERS OF
OLD SERIES I PREFERRED SECURITIES WHO ARE ONLY CONSENTING TO THE PROPOSED
AMENDMENTS AND NOT TENDERING THEIR SECURITIES.
ANY HOLDER OF OLD SERIES I PREFERRED SECURITIES WHO HAS ANY QUESTIONS AS TO
HOW TO COMPLETE THIS LETTER OF TRANSMITTAL SHOULD CONTACT BEACON HILL PARTNERS,
INC., THE INFORMATION AGENT, AT (800) 787-3120 (TOLL FREE) AND FOR BANKS AND
BROKERS (212) 843-8500.
- ------------------------
-SM- "Trust Originated Preferred Securities and "TOPrS" are services marks of
Merrill Lynch & Co.
<PAGE>
THE INSTRUCTIONS PERTAINING TO THIS LETTER OF TRANSMITTAL, WHICH BEGIN ON
THE FOLLOWING PAGE, SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
AND CONSENT IS COMPLETED.
This Letter of Transmittal relates to the offer by U S WEST Capital Funding,
Inc. ("Capital Funding") to exchange 7.96% Trust Originated Preferred Securities
(the "Old Series I Preferred Securities") of U S WEST Financing I (the "Old
Series I Trust") for either (i) an equal amount of % Trust Originated
Preferred Securities (the "New Series I Preferred Securities") of MediaOne
Finance Trust I or cash (the "Series I Offer"). The Series I Offer is being made
upon the terms and subject to the conditions set forth in the accompanying
Prospectus, dated May , 1998 (as amended or supplemented and including the
documents incorporated therein by reference, the "Prospectus") and this Letter
of Transmittal. Capitalized terms used and not defined herein have the meanings
ascribed to them in the Prospectus.
Unless an Agents Message is utilized, this Letter of Transmittal is to be
completed for tenders of Old Series I Preferred Securities made by book-entry
transfer by participants ("DTC Participants") of the Depository Trust Company
("DTC") into the account of First Chicago Trust Company of New York, as Exchange
Agent (the "Exchange Agent"), at DTC pursuant to the procedures described under
"Chapter 3: The Offers And Consent Solicitation--The Offers--Procedures for
Tendering" in the Prospectus. Holders of Old Series I Preferred Securities who
tender Old Series I Preferred Securities by book-entry transfer are referred to
herein as "Book-Entry holders."
This Letter of Transmittal is also to be completed by DTC Participants
acting on behalf of beneficial owners who have elected not to tender their Old
Series I Preferred Securities pursuant to the Offer but have elected to consent
to the Proposed Amendments (as defined in the Prospectus) pursuant to the
procedures described under "Chapter 3: The Offers And Consent Solicitation--The
Consent Solicitation Procedures for Consenting" in the Prospectus.
HOLDERS OF OLD SERIES I PREFERRED SECURITIES AS OF MAY 6, 1998 (THE "RECORD
DATE") WHO VALIDLY TENDER THEIR OLD SERIES I PREFERRED SECURITIES WILL BE DEEMED
TO HAVE GIVEN THEIR CONSENT WITH RESPECT TO SUCH OLD SERIES I PREFERRED
SECURITIES TO THE PROPOSED AMENDMENTS.
HOLDERS OF OLD SERIES I PREFERRED SECURITIES WHO PURCHASE OR WHOSE PURCHASE
SETTLES OR IS RECORDED AFTER THE CLOSE OF BUSINESS ON THE RECORD DATE WILL HAVE
THE RIGHT TO TENDER THEIR OLD SERIES I PREFERRED SECURITIES IN THE OFFER BUT
WILL NOT HAVE THE RIGHT TO PROVIDE CONSENTS.
HOLDERS OF OLD SERIES I PREFERRED SECURITIES AS OF THE RECORD DATE WILL BE
PERMITTED TO PROVIDE THEIR CONSENTS TO THE PROPOSED AMENDMENTS EVEN IF THEY DO
NOT TENDER THEIR OLD SERIES I PREFERRED SECURITIES.
THIS LETTER OF TRANSMITTAL RELATES ONLY TO THE OLD SERIES I PREFERRED
SECURITIES AND MAY NOT BE USED FOR THE OLD SERIES II PREFERRED SECURITIES.
COPIES OF THE LETTER OF TRANSMITTAL RELATING TO THE OLD SERIES II PREFERRED
SECURITIES MAY BE OBTAINED FROM THE INFORMATION AGENT OR THE EXCHANGE AGENT AT
THEIR RESPECTIVE ADDRESSES OR TELEPHONE NUMBERS SET FORTH ON PAGE 1 HEREOF.
2
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE SERIES I OFFER
1. GUARANTEE OF SIGNATURES.
No signature guarantee is required on this Letter of Transmittal if (i) this
Letter of Transmittal is signed by the holder(s) of the Old Series I Preferred
Securities (which shall include any participant in the Book-Entry Transfer
Facility whose name appears on a security position listing as the owner of Old
Series I Preferred Securities) tendered herewith and such holder(s) have not
completed the box entitled "Special Issuance Instructions" on this Letter of
Transmittal, (ii) if such Old Series I Preferred Securities are tendered for an
account of an Eligible Institution (as defined below) or (iii) if this Letter of
Transmittal is being signed by the holder of Old Series I Preferred Securities
solely for the purpose of providing a Consent to the Proposed Amendments and not
tendering any Old Series I Preferred Securities. If the tendered Old Series I
Preferred Securities are registered in the name(s) of someone other than the
undersigned or if certificates for New Series I Preferred Securities or checks
for the cash purchase price to be issued or paid in exchange therefor are to be
issued in the name of any other person, such tendered Old Series I Preferred
Securities must be endorsed or accompanied by written instruments of transfer in
form satisfactory to Capital Funding and duly signed by the registered holder,
and the signature on the endorsement or instrument of transfer must be
guaranteed by a financial institution (including most banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agents Medallion Program or the Stock Exchange Medallion Program (any
of the foregoing hereinafter referred to as an "Eligible Institution"). See
Instruction 4.
2. DELIVERY OF LETTER OF TRANSMITTAL AND OLD SERIES I PREFERRED SECURITIES.
This Letter of Transmittal is to be completed if (a) unless an Agent's
Message (as defined in the Prospectus) is utilized, tenders of Old Series I
Preferred Securities are to be made pursuant to the procedure for tender by
book-entry transfer set forth under "Chapter 3: The Offers and Consent
Solicitation--The Offers--Procedures for Tendering" in the Prospectus, or (b)
only Consents to the Proposed Amendments are being provided (and the Old Series
I Preferred Securities are not being tendered). Timely confirmation (a
"Book-Entry Confirmation") of a book-entry transfer of such Old Series I
Preferred Securities into the Exchange Agent's account at DTC, as well as this
Letter of Transmittal (or a facsimile hereof), properly completed and duly
signed, with any required signature guarantees, or an Agent's Message in the
case of a book-entry delivery, and any other documents required by this Letter
of Transmittal, must be received by the Exchange Agent at one of its addresses
set forth herein prior to the Series I Expiration Date (as defined in the
Prospectus).
If the procedure for book-entry transfer cannot be completed on a timely
basis, a tender may be effected if the Exchange Agent has received at one of the
addresses set forth herein prior to the Expiration Date, a signed letter,
telegram or facsimile transmission from an Eligible Institution setting forth
the name and address of the tendering holder, the name(s) in which the Old
Series I Preferred Securities are registered, and stating that the tender is
being made thereby and guaranteeing that within two New York Stock Exchange
("NYSE") trading days after the date of signature of such letter, telegram or
facsimile transmission by the Eligible Institution, a confirmation of book-entry
transfer of such Old Series I Preferred Securities into the Exchange Agent's
account at DTC, will be delivered by such Eligible Institution. Unless a
confirmation of book-entry transfer of such Old Series I Preferred Securities
into the Exchange Agent's account at DTC in accordance with DTC's Automated
Tender Offer Program ("ATOP") procedures, if applicable, is received, Capital
Funding may, at its option, reject the tender.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Old Series I Preferred Securities will be accepted for exchange. By
signing this Letter of Transmittal (or facsimile hereof), the tendering holder
waives any right to receive any notice of the acceptance of the Old Series I
Preferred Securities for exchange.
3
<PAGE>
3. CONSENTS.
HOLDERS OF OLD SERIES I PREFERRED SECURITIES AS OF THE RECORD DATE WHO
TENDER THEIR SECURITIES PURSUANT TO THE OFFER WILL BE DEEMED TO HAVE CONSENTED
TO THE PROPOSED AMENDMENTS. In addition, holders of Old Series I Preferred
Securities as of the Record Date have the right to Consent to the Proposed
Amendments (regardless of whether they tender their Old Series I Preferred
Securities) by executing the Consent included in this Letter of Transmittal. By
executing a Notice of Guaranteed Delivery, a registered holder of Old Series I
Preferred Securities as of the Record Date is deemed to have tendered the Old
Series I Preferred Securities described in such Notice of Guaranteed Delivery
and to have given their Consent to the Proposed Amendments with respect to their
Old Series I Preferred Securities so tendered. The Prospectus and related
documents are being sent to all persons in whose name Old Series I Preferred
Securities are registered on the books of the Trustee on May 6, 1998, which is
the Record Date. Holders of Old Series I Preferred Securities who purchase or
whose purchase is recorded after the Record Date and who wish to tender in the
Series I Offer are not eligible to Consent to the Proposed Amendments. Any
holder of Old Series I Preferred Securities as of the Record Date in the name of
another holder must establish to the satisfaction of Capital Funding such
holder's entitlement to give such Consent. This will ordinarily require an
assignment by such registered holder in blank, or if not in blank, to and from
each successive transferee, including the holder, with each signature guaranteed
by an Eligible Institution. See Instruction 4. Any person who is the beneficial
owner but not the registered holder of Old Series I Preferred Securities must
arrange for the registered transfer of such Old Series I Preferred Securities
prior to tendering or direct the registered holder to tender on behalf of the
beneficial holder.
4. SIGNATURES ON LETTER OF TRANSMITTAL.
If this Letter of Transmittal or the Notice of Guaranteed Delivery is signed
by the holder(s) of the Old Series I Preferred Securities tendered hereby or for
which Consents are provided hereby, the signature(s) most correspond with the
name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Old Series I Preferred Securities tendered hereby or for which
Consents are provided hereby are held of record by two or more persons, all such
persons must sign this Letter of Transmittal.
If any of the Old Series I Preferred Securities tendered hereby or for which
consents are provided hereby are registered in different names on different
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
5. STOCK TRANSFER TAXES.
Capital Funding will pay all stock transfer taxes, if any, applicable to the
exchange of any Old Series I Preferred Securities pursuant to the Series I
Offer. If, however, Series I Preferred Securities or checks representing the
cash purchase price for the Old Series I Preferred Securities, if any, are to be
issued in the name of any person other than the holder of Old Series I Preferred
Securities tendered, or if tendered Old Series I Preferred Securities are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, then the amount of any such transfer taxes (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with this Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder or deducted from
the purchase price.
6. SPECIAL ISSUANCE INSTRUCTIONS.
Any DTC Participant tendering Old Preferred Securities may request that Old
Preferred Securities not tendered or not accepted for exchange or purchase be
credited to such account at DTC as such
4
<PAGE>
DTC Participant may designate under the caption "Special Issuance Instructions."
If no such instructions are given, any such Old Preferred Securities not
tendered or not accepted for exchange or purchase will be returned by crediting
the DTC account of such DTC Participant designated above.
7. SUBSTITUTE FORM W-9.
Under the federal income tax laws, the Exchange Agent may be required to
withhold 31% of the amount of any cash payments made and/or the fair market
value of any New Series I Preferred Securities issued pursuant to the Series I
Offer. In order to avoid such backup withholding, each tendering holder, and, if
applicable, each other payee, is requested to provide such holder's or payee's
correct taxpayer identification number, and certify that such holder or payee is
not subject to such backup withholding by completing and signing the box
entitled "Substitute Form W-9" set forth on page of this Letter of
Transmittal. In general, if a holder or payee is an individual, the taxpayer
identification number is the Social Security Number of such individual. If the
Exchange Agent is not provided with the correct taxpayer identification number,
the holder or payee providing such number may be subject to a $50 penalty
imposed by the Internal Revenue Service. Certain holders or payees (including,
among others, all corporations and certain foreign individual(s)) are not
subject to these backup withholding and reporting requirements. In order to
satisfy the Exchange Agent that a foreign individual qualifies as an exempt
recipient, such holder or payee is requested to submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Exchange Agent. For further information
concerning backup withholding and instructions for completing the Substitute
Form W-9 (including how to obtain a taxpayer identification number if you do not
have one and/or how to complete the Substitute Form W-9 if the Old Series I
Preferred Securities are held in more than one name and/or the New Series I
Preferred Securities will be held in more than one name), consult the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9.
8. WAIVER OF CONDITIONS.
The conditions of the Series I Offer may be waived by Capital Funding from
time to time in accordance with, and subject to the limitations described in,
the Prospectus. Capital Funding, however, may not waive the condition that
requires the satisfaction of certain conditions to the Separation described in
the Prospectus and the condition that as of the Series I Expiration Date there
be at least 400 record or beneficial holders of at least 1,000,000 New Series I
Preferred Securities to be issued in exchange for Old Series I Preferred
Securities validly tendered in the Series I Offer.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES; INADEQUATE SPACE.
Requests for assistance or additional copies of the Prospectus and this
Letter of Transmittal (or the Letter of Transmittal relating to the Old Series
II Preferred Securities and the Series II Offer) may be obtained from the
Information Agent or the Exchange Agent at their respective addresses or
telephone numbers set forth herein.
If the space provided herein is inadequate, the certificate numbers and/or
the amounts of Old Series I Preferred Securities should be listed on a separate
signed schedule attached hereto.
10. SOLICITED TENDERS.
Capital Funding will pay to Soliciting Dealers (as defined herein)
designated by the beneficial owner of the Old Series I Preferred Securities
validly tendered and accepted pursuant to the Offer a solicitation fee of $0.50
per Old Series I Preferred Security exchanged for New Series I Preferred
Securities and $0.375 per Old Series I Preferred Security tendered for cash
(except that in the case of transactions equal to or exceeding 10,000 Old Series
I Preferred Securities of either series, Capital Funding will pay $0.25 per Old
Series I Preferred Security exchanged for New Series I Preferred
5
<PAGE>
Securities or tendered for cash), in each case subject to certain conditions.
For purposes of this Instruction 10, "Soliciting Dealer" includes (i) any broker
or dealer in securities, including each Dealer Manager in its capacity as dealer
or broker, who is a member of any national securities exchange or of the
National Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign
broker or dealer not eligible for membership in the NASD who agrees to conform
to the NASD's Rules of Fair Practice in soliciting tenders outside the United
States to the same extent as though it were an NASD member, or (iii) any bank or
trust company, any one of whom has solicited and obtained a tender pursuant to
the Series I Offer. No such fee shall be payable to a Soliciting Dealer in
respect of Old Series I Preferred Securities registered in the name of such
Soliciting Dealer unless such Old Series I Preferred Securities are held by such
Soliciting Dealer as nominee and such Old Series I Preferred Securities are
being tendered for the benefit of one or more beneficial owners identified on
this Letter of Transmittal or on the Notice of Solicited Tenders (included in
the materials provided to brokers and dealers). No solicitation fee shall be
payable to a Soliciting Dealer with respect to the tender of Old Series I
Preferred Securities unless this Letter of Transmittal accompanying such tender
designates such Soliciting Dealer as such in the box captioned "Solicited
Tenders."
In order to receive a solicitation fee, the Soliciting Dealer must return a
Notice of Solicited Tenders to the Exchange Agent within three NYSE trading days
after the Series I Expiration Date. No solicitation fee shall be payable to a
Soliciting Dealer in respect of Old Series I Preferred Securities (i)
beneficially owned by such Soliciting Dealer or (ii) registered in the name of
such Soliciting Dealer unless such Old Series I Preferred Securities are held by
such Soliciting Dealer as nominee and such Old Series I Preferred Securities are
being tendered for the benefit of one or more beneficial owners identified on
this Letter of Transmittal or the Notice of Solicited Tenders. No solicitation
fee shall be payable to the Soliciting Dealer with respect to the tender of Old
Series I Preferred Securities by the holder of record, for the benefit of the
beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer.
11. LOST, STOLEN OR DESTROYED CERTIFICATES FOR OLD SERIES I PREFERRED
SECURITIES.
Any holder of Old Series I Preferred Securities whose certificate(s) for
such securities have been lost, stolen or destroyed should contact either the
Exchange Agent or the Information Agent at their respective addresses shown on
the back page of this Letter of Transmittal for special instructions.
12. IRREGULARITIES.
All questions as to the number of Old Series I Preferred Securities to be
accepted, the validity, form, eligibility (including time of receipt) and
acceptance of any tender of Old Series I Preferred Securities will be determined
by Capital Funding, in its sole discretion, which determination shall be final
and binding. Capital Funding reserves the absolute right to reject any or all
tenders made pursuant to the Series I Offer determined by it not to be in
appropriate form or the acceptance of or payment for any Old Series I Preferred
Securities which would, in the opinion of Capital Funding's counsel, be
unlawful. Capital Funding also reserves the absolute right to waive any of the
conditions set forth in the Series I Offer (other than the Separation Condition
and the Minimum Distribution Condition as described in the Prospectus) or any
defect or irregularity in any tender with respect to any particular Old Series I
Preferred Securities or any particular holder, and Capital Funding's
interpretation of the terms and conditions of the Series I Offer (including
these instructions) will be final and binding. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived
prior to the Series I Expiration Date or such times as Capital Funding shall
determine. Neither U S WEST, the Old Series I Trust, Capital Funding, the
Exchange Agent, the Information Agent, the Dealer Managers nor any other person
will be obligated to give notice of defects or irregularities in tenders, nor
shall any of them incur any liability for failure to give any such notice.
6
<PAGE>
IMPORTANT TAX INFORMATION
Under United States federal income tax law, tendering holders of Old Series
I Preferred Securities may be subject to backup withholding unless the Exchange
Agent is in possession of such holder's correct taxpayer identification number
("TIN") on a Substitute Form W-9. If the holder is an individual, the TIN is his
or her social security number. If the payor is not in possession of the correct
TIN, payments that are made to such holder or other payee with respect thereto
may be subject to 31% backup withholding. To avoid backup withholding, tendering
holders are requestd to complete the Substitute Form W-9 below.
Certain holders of Old Series I Preferred Securities (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and reporting requirements. In order for a foreign
individual to qualify as an exempt recipient, the holder of Old Series I
Preferred Securities is requested to submit a signed Form W-8 attesting to that
individual's exempt status. A Form W-8 can be obtained from the Exchange Agent.
See the enclosed "Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9" for more instructions.
If backup withholding applies, the Exchange Agent is required to withhold
31% of (i) the fair market value of the New Series I Preferred Securities that
would be distributed to a tendering holder of Old Series I Preferred Securities
or other person pursuant to the Series I Offer and (ii) any payments that would
be made in respect of the Old Series I Preferred Securities. Such withholding
obligation may cause the payor to sell some portion of the New Series I
Preferred Securities that otherwise would have been distributed to a tendering
holder. Backup withholding is not an additional tax. Rather, the tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld, provided that the required information is given to the Internal
Revenue Service. If withholding results in an overpayment of taxes, a refund may
be obtained from the Internal Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the holder of
Old Series I Preferred Securities has not been issued a TIN and has applied for
a TIN or intends to apply for a TIN in the near future. If the box in Part 3 is
checked, the holder of Old Series I Preferred Securities or other payee should
also complete the Certificate of Awaiting Taxpayer Identification Number below
in order to avoid backup withholding. Notwithstanding that the box in Part 3 is
checked and the Certificate of Awaiting Taxpayer Identification Number is
completed, the Exchange Agent may withhold 31% (i) of payments made with respect
to Old Series I Preferred Securities prior to the time a properly certified TIN
is provided to the payor and (ii) of the New Series I Preferred Securities that
otherwise would be distributed to such holder. However, such amounts and/or New
Series I Preferred Securities will be refunded to each such holder of Old Series
I Preferred Securities if a TIN is provided to the payor within 60 days.
The holder of Old Series I Preferred Securities should give the payor the
TIN of the record owner of the Old Series I Preferred Securities or of the last
transferee appearing on the transfers attached to, or endorsed on, the Old
Series I Preferred Securities. If the Old Series I Preferred Securities are in
more than one name or are not in the name of the actual owner, consult the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional guidance on which number to report.
NOTE: SIGNATURES MUST BE PROVIDED ON PAGES 16 AND 17 BELOW
PLEASE READ THE PRECEDING INSTRUCTIONS CAREFULLY
7
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Capital Funding Old Series I Preferred
Securities pursuant to the offer by Capital Funding to exchange New Series I
Preferred Securities or cash for the Old Series I Preferred Securities, upon the
terms and subject to the conditions set forth in the Prospectus, the receipt of
which is hereby acknowledged, and in this Letter of Transmittal (the "Series I
Offer"). Holders of Old Series I Preferred Securities as of the Record Date who
tender in the Series I Offer will be deemed to have provided their Consents to
the Proposed Amendments with respect to such Old Series I Preferred Securities
tendered.
Subject to and effective upon acceptance for exchange of the Old Series I
Preferred Securities tendered herewith, the undersigned hereby exchanges,
assigns and transfers to or upon the order of Capital Funding all right, title
and interest in and to all the Old Series I Preferred Securities that are being
tendered hereby and irrevocably constitutes and appoints the Exchange Agent the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Old Series I Preferred Securities, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) transfer ownership of such Old Series I Preferred Securities
on the account books maintained by DTC, together with all accompanying evidences
of transfer and authenticity, to the Exchange Agent for the account of the Old
Series I Preferred Securities, (b) present such Old Series I Preferred
Securities for transfer on the books of the Old Series I Trust and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Old Series I Preferred Securities, all in accordance with the terms of the
Series I Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, assign and transfer the Old Series I
Preferred Securities tendered hereby and to acquire the New Series I Preferred
Securities or cash issuable or deliverable upon the exchange of such tendered
Old Series I Preferred Securities and that, when the undersigned's Old Series I
Preferred Securities are accepted for exchange, Capital Funding will acquire
good and unencumbered title to such tendered Old Series I Preferred Securities,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim. The undersigned will, upon request, sign and
deliver any additional documents deemed by Capital Funding to be necessary or
desirable to complete the exchange, assignment and transfer of tendered Old
Series I Preferred Securities or to transfer ownership of such Old Series I
Preferred Securities.
All authority herein conferred or agreed to be conferred shall survive the
death, bankruptcy or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, legal representatives,
successors, assigns, executors and administrators of the undersigned. Except as
stated in the Series I Offer, this tender is irrevocable.
The undersigned understands that tenders of Old Series I Preferred
Securities pursuant to any one of the procedures described in "Chapter 3: The
Offers and Consent Solicitation--The Offer--Procedures for Tendering" in the
Prospectus and in the instructions hereto will constitute agreements between the
undersigned and Capital Funding upon the terms and subject to the conditions of
the Series I Offer.
Unless otherwise indicated under "Special Issuance Instructions," please
cause New Series I Preferred Securities or checks representing the cash purchase
price to be issued in the name(s) of the undersigned (and, in the case of Old
Series I Preferred Securities tendered by book-entry transfer, by credit to the
account at DTC). The undersigned recognizes that Capital Funding has no
obligation, pursuant to the "Special Issuance Instructions," to transfer any Old
Series I Preferred Securities from the name of the registered bolder(s) thereof
if Capital Funding does not accept for exchange any of the Old Series I
Preferred Securities so tendered.
8
<PAGE>
PLEASE COMPLETE:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD SERIES I PREFERRED SECURITIES TENDERED OR CONSENTED
----------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF 7.96% TRUST ORIGINATED PREFERRED SECURITIES
HOLDER(S) TENDERED (ATTACH ADDITIONAL SIGNED LIST IF
(PLEASE FILL IN EXACTLY AS NAME(S) NECESSARY)
APPEAR(S) ON CERTIFICATE(S).)
- ------------------------------------------------------------------------------------------------------
NUMBER NUMBER OF
OF SECURITIES
SECURITIES NOT
TENDERED TENDERED BUT
FOR NUMBER OF AS TO WHICH
NEW SERIES I SECURITIES ONLY
PREFERRED TENDERED FOR CONSENTS ARE
SECURITIES* CASH* GIVEN**
<S> <C> <C> <C>
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
TOTAL
SECURITIES
- ------------------------------------------------------------------------------------------------------
* UNLESS OTHERWISE INDICATED, THE HOLDER WILL BE DEEMED TO HAVE TENDERED THE FULL NUMBER OF OLD
SERIES I PREFERRED SECURITIES HELD.
** NEED NOT BE COMPLETED BY HOLDERS WHO TENDER OLD SERIES I PREFERRED SECURITIES. A VALID TENDER BY
HOLDERS AS OF THE RECORD DATE WILL CONSTITUTE THEIR CONSENT TO THE PROPOSED AMENDMENTS.
- ------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Account No.:
Transaction Code No.:
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED OLD SERIES I PREFERRED SECURITIES ARE BEING
DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE
AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Tendering Stockholder(s):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
If delivery is by book-entry transfer:
Name of Tendering Institution:
Account No.:
Transaction Code No.:
</TABLE>
- --------------------------------------------------------------------------------
COMPLETE ONLY IF APPLICABLE:
- ------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5 AND 6)
To be completed ONLY if a DTC Participant requests that Old Series I
Preferred Securities not tendered or not accepted for exchange or purchase
are to be credited to an account other than the account of such DTC
Participant.
Issue to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION NO.)
- ------------------------------------------------------------
UNLESS YOU ARE AN ELIGIBLE INSTITUTION, IF YOU HAVE COMPLETED THE BOX
IMMEDIATELY ABOVE, YOU MUST HAVE THE "GUARANTEE OF SIGNATURE(S)" PORTION OF THE
BOX ON PAGE 12 COMPLETED BY AN ELIGIBLE INSTITUTION.
10
<PAGE>
COMPLETE ONLY IF CONSENTING BUT NOT TENDERING:
- --------------------------------------------------------------------------------
CONSENT
The undersigned, a registered holder of 7.96% Trust Originated Preferred
Securities of U S WEST Financing I as of May 6, 1998, hereby consents or
withholds consent as specified below with respect to the Proposed Amendments
and appoints the Exchange Agent its agent and attorney-in-fact (with full
knowledge that the Exchange Agent also acts as the agent of U S WEST and
Capital Funding) with respect to such consent given hereby with full power
of substitution to deliver this Letter of Transmittal to U S WEST, Capital
Funding, the Series I Trust and The First National Bank of Chicago, as
property trustee under the Old Series I Trust and holder of the Old Series I
Debt Securities.
The Proposed Amendments would, as described more fully in the Prospectus,
specifically permit U S WEST to consummate the separation without complying
with a covenant contained in the Old Indenture that might otherwise require
New U S WEST to assume liability for the Old Debt Guarantees.
CHECK ONE BOX ONLY
CONSENT / / WITHHOLD CONSENT / /
-------------------------- Number of Securities for which Consent is
being delivered
The Power of Attorney granted in this paragraph shall be deemed
irrevocable from and after the execution of the applicable Consent
Supplemental Indenture and coupled with an interest.
The undersigned understands that the Consent delivered pursuant to this
Letter of Transmittal will constitute a binding agreement between the
undersigned and Capital Funding upon the terms and subject to the conditions
set forth in the Prospectus and in the Letter of Transmittal.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity, dissolution or liquidation
of the undersigned and every obligation of the undersigned under this Letter
of Transmittal shall be binding upon the undersigned heirs, personal
representatives, successors and assigns.
Unless otherwise specified in the table on page 9, this Letter of
Transmittal relates to all Old Series I Preferred Securities held by the
undersigned. If the space provided above is inadequate, list all such
information on a separate signed schedule and affix the schedule to this
Letter of Transmittal.
The terms and conditions of the Consent Solicitation set forth in the
Prospectus, those terms and conditions set forth in "Chapter 3: The Offers
and Consent Solicitation--The Consent Solicitation--Procedures for
Consenting" are hereby incorporated herein by reference and form part of the
terms and conditions of the Letter of Transmittal.
----------------------------------------------------------------------------
11
<PAGE>
PLEASE COMPLETE:
- --------------------------------------------------------------------------------
HOLDER(S) OF OLD SERIES I PREFERRED SECURITIES SIGN HERE
(PLEASE COMPLETE AND SIGN THE BOX ENTITLED "SUBSTITUTE FORM W-9" ON PAGE )
Must be signed by registered holder(s) exactly as name(s) appear(s) on
certificate(s) for Old Series I Preferred Securities or on a security
position listing or by person(s) authorized to become registered holder(s)
by certificates and documents transmitted herewith. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative
capacity, please set forth full title and see Instruction 5.)
X __________________________________________________________________________
X __________________________________________________________________________
SIGNATURE(S) OF OWNER(S)
Dated: _____________________________________________________________________
Name(s): ___________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity (full title): _____________________________________________________
Address: ___________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.: _______________________________________________
GUARANTEE OF SIGNATURE(S) (IF APPLICABLE)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: ______________________________________________________
Name: ______________________________________________________________________
Title: _____________________________________________________________________
Address: ___________________________________________________________________
Name of Firm: ______________________________________________________________
Area Code and Telephone No.: _______________________________________________
Dated: _____________________________________________________________________
----------------------------------------------------------------------------
12
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS:
PAYOR: FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------------------------------------------------
SUBSTITUTE Part 1: PLEASE PROVIDE YOUR TIN SOCIAL SECURITY
FORM W-9 IN THE BOX AT RIGHT AND CERTIFY NUMBER
DEPARTMENT OF THE TREASURY BY SIGNING AND DATING BELOW OR EMPLOYER
INTERNAL REVENUE SERVICE IDENTIFICATION NUMBER
-----------------------------------------------------------------
Part 2 Check the box if you are NOT subject to backup withholding
under the provisions of Section 3406(a)(1)(C) of the Internal
Revenue Code because (1) you are exempt from backup withholding
PAYER'S REQUEST FOR TAXPAYER (2) you have not been notified that you are subject to backup
IDENTIFICATION (TIN) AND withholding as a result of failure to report all interest or
CERTIFICATION dividends or (3) the Internal Revenue Service has notified you
that you are no longer subject to backup withholding. / /
-----------------------------------------------------------------
Part 3 Awaiting TIN / / (And see next box.)
- ---------------------------------------------------------------------------------------------------
CERTIFICATION: UNDER PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM IS
TRUE, CORRECT AND COMPLETE.
SIGNATURE ------------------------------------------------------------- DATE--------------------
- ---------------------------------------------------------------------------------------------------
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF THE ABOVE SUBSTITUTE FORM W-9.
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not been issued
to me, and either (a) I have mailed or delivered an application to receive a taxpayer
identification number to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in the near future. I
understand that 31% of all reportable payments made to me will be withheld until I provide a
number and that if such number is provided to you within sixty (60) days, such withheld amounts
will be refunded.
Signature -------------------------------------------------------------- Date
---------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU. PLEASE REVIEW THE ENCLOSED GUIDELINES
FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
13
<PAGE>
THE INFORMATION AGENT FOR THE OFFERS IS:
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, New York 10004
Banks and Brokers Call Collect: (212) 843-8500
All Others Call Toll-Free: (800) 787-3120
Any questions or requests for assistance or additional copies of the
Prospectus or the Letters of Transmittal or for copies of the Notices of
Guaranteed Delivery may be directed to the Information Agent at its telephone
number and location set forth above. You may also contact the Dealer Managers or
your broker, dealer, commercial bank or trust company or other nominee for
assistance concerning the Offers.
THE DEALER MANAGERS FOR THE OFFERS ARE:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281
(888) ML4-TNDR (toll-free)
(888) 654-8637
LEHMAN BROTHERS
3 World Financial Center
200 Vesey Street
New York, New York 10285
(800) 438-3242 (toll-free)
(212) 528-7581
<PAGE>
OFFER TO EXCHANGE AND CONSENT SOLICITATION
U S WEST FINANCING I
7.96% TRUST ORIGINATED PREFERRED SECURITIES-SM- ("TOPRS-SM-")
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
(CUSIP 90388D204)
FOR
MEDIAONE FINANCE TRUST I
% TRUST ORIGINATED PREFERRED SECURITIES-SM- ("TOPRS-SM-")
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
OR $ . IN CASH
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THE SERIES I OFFER AND RELATED WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON , JUNE , 1998, UNLESS EXTENDED.
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To Our Clients:
Enclosed for your consideration are the Prospectus, dated May , 1998 (as
amended or supplemented and including all documents incorporated therein by
reference, the "Prospectus") and a form of Letter of Transmittal and Consent
(the "Letter of Transmittal") relating to the offer by U S WEST Capital Funding,
Inc. ("Capital Funding") to exchange 7.96% Trust Originated Preferred Securities
(the "Old Series I Preferred Securities") of U S WEST Financing I (the "Old
Series I Trust"), for an equal amount of % Trust Originated Preferred
Securities (the "New Series I Preferred Securities") of MediaOne Finance Trust I
(the "New Series I Trust") or $ . in cash per Old Series I Preferred
Security (the "Series I Offer"). The terms of the New Series I Preferred
Securities are set forth in the Prospectus. All capitalized terms used and not
defined herein shall have the meanings ascribed to them in the Prospectus.
In connection with the Offers, U S WEST, Inc. ("U S WEST") and Capital
Funding are soliciting Consents from the holders of record of Old Series I
Preferred Securities as of May 6, 1998 (the "Record Date") to the Proposed
Amendments. The proper tender by holders of Old Series I Preferred Securities as
of the Record Date will constitute the giving of a Consent by such holders with
respect to such Old Series I Preferred Securities. Holders of Old Series I
Preferred Securities who acquired such Old Series I Preferred Securities after
the Record Date will have the right to tender their Old Series I Preferred
Securities pursuant to the Offers but will not have the right to provide
Consents. A holder of Old Series I Preferred Securities as of the Record Date
will be permitted to provide such holder's Consent even if such holder does not
tender Old Series I Preferred Securities pursuant to an Offer.
We are the holder of record of Old Series I Preferred Securities held for
your account. A tender of such Old Series I Preferred Securities can be made
only by us as the holder of record and pursuant to your instructions. The Letter
of Transmittal relating to the Old Series I Preferred Securities is furnished to
you for your information now and cannot be used by you to tender Old Series I
Preferred Securities held by us for your account.
We request instructions as to whether you wish us to tender (or, if
applicable, provide Consents with respect to) any or all of the Old Series I
Preferred Securities held by us for your account, upon the terms and subject to
the conditions set forth in the Prospectus and the applicable Letter of
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- -SM- "Trust Originated Preferred Securities" and "TOPrS" are services marks of
Merrill Lynch & Co.
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Transmittal. We also request that you designate, in the box captioned
"Soliciting Tenders," any Soliciting Dealer who solicited your tender of Old
Series I Preferred Securities.
Your attention is called to the following:
1. The Series I Offer and related withdrawal rights expire at 5:00 P.M.,
New York City time, on , , 1997, unless extended.
2. The Series I Offer is being made in connection with the separation of U
S WEST into two separate companies (the "Separation"). Consummation of the
Series I Offer is conditioned upon, among other things, the satisfaction of
certain conditions to the Separation described in the Prospectus (including the
approval of the Separation by U S WEST's stockholders) (the "Separation
Condition"). Consummation of the Series I Offer is also conditioned upon tenders
by a sufficient number of holders of Old Series I Preferred Securities such that
there be at least 400 record or beneficial holders of at least 1,000,000 New
Series I Preferred Securities to be issued in exchange for such Old Series I
Preferred Securities (the "Minimum Distribution Condition"). The Separation
Condition and Minimum Distribution Condition may not be waived by Capital
Funding.
3. If you owned Old Series I Preferred Securities as of the Record Date,
you may not validly tender Old Series I Preferred Securities without delivering
a Consent to the Proposed Amendments. The proper tender of Old Preferred
Securities by holders as of the Record Date will constitute the giving of a
Consent by such holders. If you did not own Old Series I Preferred Securities as
of the Record Date, you will not be eligible to deliver a Consent. If you owned
Old Series I Preferred Securities as of the Record Date, you may deliver a
Consent even if you do not elect to tender Old Series I Preferred Securities. No
separate payments are being made for Consents.
4. Tendering stockholders will not pay brokerage fees or commissions,
solicitation fees or, subject to Instruction 5 of the Letter of Transmittal
relating to the Old Series I Preferred Securities, any stock transfer taxes
applicable to the exchange of Old Series I Preferred Securities pursuant to the
Series I Offer.
Please note that a Question and Answer pamphlet regarding the Series I Offer
is enclosed for your information.
If you wish to have us tender or deliver a Consent with respect to any or
all of your Old Series I Preferred Securities, please instruct us by completing,
executing, detaching and returning to us the detachable portion hereof captioned
"Instructions With Respect to the Series I Offer." An envelope to return your
instructions to us is enclosed. Unless specified on such instructions, tenders
of or Consents with respect to all such Old Series I Preferred Securities will
be made on your behalf. Your instructions should be forwarded to us in ample
time to permit us to submit a tender on your behalf before the Series I
Expiration Date.
THE SERIES I OFFER IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM
OR ON BEHALF OF, HOLDERS OF OLD SERIES I PREFERRED SECURITIES IN ANY
JURISDICTION IN WHICH THE MAKING OF THE SERIES I OFFER OR ACCEPTANCE THEREOF
WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. IN THOSE
JURISDICTIONS THE LAWS OF WHICH REQUIRE THAT THE SERIES I OFFER BE MADE BY A
LICENSED BROKER OR DEALER, THE SERIES I OFFER SHALL BE DEEMED TO BE MADE ON
BEHALF OF CAPITAL FUNDING BY MERRILL LYNCH & CO., LEHMAN BROTHERS INC. OR ONE OR
MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION.
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INSTRUCTIONS WITH RESPECT TO THE SERIES I OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
Prospectus, dated May , 1998, and the Letter of Transmittal and Consent
relating to the Old Series I Preferred Securities in connection with the Series
I Offer by Capital Funding to exchange Old Series I Preferred Securities for New
Series I Preferred Securities or cash.
This will instruct you to tender the number of Old Series I Preferred
Securities indicated below held by you for the account of the undersigned, upon
the terms and subject to the conditions set forth in the Prospectus and the
Letter of Transmittal relating to the Old Series I Preferred Securities.
TENDER FOR NEW SERIES I PREFERRED SECURITIES BY HOLDERS AS OF THE RECORD DATE:
/ / By checking this box, all Old Series I Preferred Securities held by you for
our account will be tendered in the Series I Offer for New Series I
Preferred Securities. If fewer than all Old Series I Preferred Securities
are to be tendered, we have checked the box below and indicated the
aggregate number of Old Series I Preferred Securities to be tendered by you.
We understand that since the Old Series I Preferred Securities held by you
for our account were held as of the Record Date, the tender of Old Series I
Preferred Securities will constitute the Consent to the Proposed Amendments.
/ / ___________________ shares*
TENDER FOR CASH BY HOLDERS AS OF THE RECORD DATE:
/ / By checking this box, all Old Series I Preferred Securities held by you for
our account will be tendered in the Series I Offer for cash. If fewer than
all Old Series I Preferred Securities are to be tendered, we have checked
the box below and indicated the aggregate number of Old Series I Preferred
Securities to be tendered by you. We understand that since the Old Series I
Preferred Securities held by you for our account were held as of the Record
Date, the tender of Old Series I Preferred Securities will constitute the
Consent to the Proposed Amendments.
/ / ___________________ shares*
TENDER FOR NEW SERIES I PREFERRED SECURITIES BY HOLDERS WHO ACQUIRED OLD SERIES
I PREFERRED SECURITIES AFTER THE RECORD DATE:
/ / By checking this box, all Old Series I Preferred Securities held by you for
our account, will be tendered in the Series I Offer for New Series I
Preferred Securities. If fewer than all Old Series I Preferred Securities
are to be tendered, we have checked the box below and indicated the
aggregate number of Old Series I Preferred Securities to be tendered by you.
/ / ___________________ shares*
TENDER FOR CASH BY HOLDERS WHO ACQUIRED OLD SERIES I PREFERRED SECURITIES AFTER
THE RECORD DATE:
/ / By checking this box, all Old Series I Preferred Securities held by you for
our account, will be tendered in the Series I Offer for cash. If fewer than
all Old Series I Preferred Securities are to be tendered, we have checked
the box below and indicated the aggregate number of Old Series I Preferred
Securities to be tendered by you.
/ / ___________________ shares*
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CONSENT ONLY BY HOLDERS AS OF THE RECORD DATE:
/ / By checking this box, we instruct you to deliver a Consent with respect to
all Old Series I Preferred Securities held by you for our account as of the
Record Date which are not being tendered in the Series I Offer. If Consents
should be provided with respect to fewer than all Old Series I Preferred
Securities not tendered, we have checked the box below and indicated the
aggregate number of Old Series I Preferred Securities as to which Consents
should be provided.
/ / ___________________ shares*
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* Unless otherwise indicated, it will be assumed that all such Old Series I
Preferred Securities are to be tendered or that Consents are to be provided
with respect to all such Old Series I Preferred Securities.
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SIGN HERE
SIGNATURE(S): __________________________________________________________________
NAME(S): _______________________________________________________________________
ADDRESS(ES): ___________________________________________________________________
SOCIAL SECURITY OR TAXPAYER ID NO(S).: _________________________________________
DATED: _________________________________________________________________________
(SEE OTHER SIDE)
PLEASE DESIGNATE IN THE BOX BELOW ANY SOLICITING DEALER
WHO SOLICITED YOUR TENDER.
SOLICITED TENDERS
The undersigned represents that the Soliciting Dealer who solicited and obtained
this tender is:
Name of Firm: __________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _______________________________________________________
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
SIGN HERE
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X
X
SIGNATURE(S) PRINT NAME(S) AND ADDRESS(ES) HERE
Dated:
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