-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QoDYD3LEj8kd0KyJhxG5VB8Az83oopiv9/T0R0uZkCyhX57jGli+uYx/BTtH9aku RbmKrApU/a8h8+drU/kyUw== 0000912057-97-013463.txt : 19970421 0000912057-97-013463.hdr.sgml : 19970421 ACCESSION NUMBER: 0000912057-97-013463 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970328 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970418 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: US WEST INC CENTRAL INDEX KEY: 0000732718 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 840926774 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08611 FILM NUMBER: 97583150 BUSINESS ADDRESS: STREET 1: 7800 E ORCHARD RD STREET 2: SUITE 480 CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3037936629 MAIL ADDRESS: STREET 1: 7800 EAST ORCHARD ROAD STREET 2: SUITE 480 CITY: ENGLEWOOD STATE: CO ZIP: 80111 8-K 1 FORM 8-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (Date of earliest event reported): APRIL 17, 1997 U S WEST, INC. (Exact name of registrant as specified in its charter) A DELAWARE CORPORATION COMMISSION FILE IRS EMPLOYER IDENTIFICATION (STATE OF INCORPORATION) NUMBER 1-8611 NO. 84-0926774
7800 EAST ORCHARD ROAD, ENGLEWOOD, COLORADO 80111 (Address of principal executive offices, including Zip Code) TELEPHONE NUMBER (303) 793-6500 (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ITEM 7. EXHIBITS
EXHIBIT DESCRIPTION - ----------- --------------------------------------------------------------------------------------------------- 99A Press Release dated April 17, 1997, respecting merger of domestic wireless interests of AirTouch Communications and U S West Media Group. 99B Form of Letter of Intent dated April 17, 1997, respecting merger of domestic wireless interests of AirTouch Communications and U S West Media Group.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. U S WEST, INC. By: /s/ STEPHEN E. BRILZ ----------------------------------------- Stephen E. Brilz CORPORATE COUNSEL AND ASSISTANT SECRETARY Dated: April 17, 1997 EX-99.A 2 PRESS RELEASE FOR IMMEDIATE RELEASE: April 17, 1997 Contact: Kathy Reinhart Steve Lang AirTouch Communications Inc. U S WEST Media Group 415-658-2042 303-793-6290 AIRTOUCH AND U S WEST MEDIA GROUP PLAN MERGER OF DOMESTIC WIRELESS INTERESTS - AIRTOUCH TO GET GREATER SCALE AND SCOPE IN DOMESTIC WIRELESS OPERATIONS - - U S WEST MEDIA GROUP TO REDUCE DEBT BY $2.2 BILLION AND SHAREOWNERS TO GET AIRTOUCH STOCK TAX FREE - U S WEST Media Group (NYSE: UMG) will merge NewVector, its domestic cellular business, and its interest in PrimeCo Personal Communications into AirTouch Communications (NYSE: ATI), the two companies said today. The parties value the transaction at about $5 billion. The transaction includes assumption of $2.2 billion of debt by AirTouch and the distribution of AirTouch stock to Media Group shareowners, tax free. As a result of the transaction, AirTouch will obtain ownership of Media Group's domestic wireless businesses. With the acquisition, AirTouch expects to add to its proportionate U.S. cellular and PCS portfolio up to about 34 million POPs, 1.9 million customers and $300 million operating cash flow, based on pro- forma 1996 results, bringing its worldwide proportionate totals to 212 million POPS, 10 million customers and $1.4 billion operating cash flow. Media Group's overseas wireless properties are not affected. According to Sam Ginn, AirTouch's chairman and CEO, "The combination of our U.S. wireless operations with those of U S WEST will mark a major milestone for AirTouch, bolstering both our operating scale and expanding our footprint to reach over 212 million people worldwide." "Our partnership with AirTouch has been terrific," said Richard McCormick, chairman of U S WEST. "It allowed the creation of a powerful cellular company with scale and scope advantages that are critical in a highly competitive environment. This merger is consistent with the intent of AirTouch and U S WEST when the partnership was announced nearly three years ago, in July 1994, to create a single wireless company. But this transaction recognizes the changing competitive environment, eliminates potential business conflicts, reduces our debt and allows our shareowners to receive AirTouch stock tax free." The number of AirTouch shares to be issued will vary depending on the trading price of AirTouch stock. AirTouch will issue 84.8 million shares to Media Group shareowners if AirTouch stock is trading at $33 or higher. If AirTouch is trading at $30 or lower, Media Group shareowners will receive 93.3 million AirTouch shares. AirTouch common stock closed on April 17 at 23 1/2. While accretive to AirTouch's cash flow, earnings per-share dilution from this transaction for the first full year is expected to be around $.30 and to decline thereafter. AirTouch expects to maintain its investment grade rating. Customers of Media Group's cellular service will notice no change, because Media Group's cellular operations began using the AirTouch brand about a year ago. In addition, Media Group's domestic cellular employees will generally follow their work, and become AirTouch employees once the transaction is final. After several months of negotiation, the companies signed a letter of intent today, documenting the significant terms of the transaction. Closing of the transaction requires a definitive agreement, the approval of the AirTouch and U S WEST boards of directors, the approval of the Internal Revenue Service, Hart-Scott-Rodino review, approval by shareowners of Media Group and U S WEST Communications (NYSE: USW), voting as a single class, and the satisfaction of other conditions. (U S WEST common stock was converted into two classes of "tracking stocks" in 1995, one that tracks the performance of the Communications Group, and one that tracks Media Group.) Pursuant to the transaction, which will be tax-free to U S WEST, AirTouch and their respective shareowners, U S WEST will distribute to its shareowners shares of a newly formed company holding all of its businesses other than the Media Group's domestic wireless businesses and will then merge the remaining domestic wireless businesses with AirTouch or a subsidiary thereof in a transaction in which shares of AirTouch common stock will be distributed directly to holders of U S WEST Media Group common stock. The companies said they believe this transaction should close by the end of the year, but they noted that "Morris Trust" legislation introduced today in Congress would block this transaction if the legislation passes in its current form. In this event, the companies would continue with their existing joint venture agreement. The ability to include in the transaction certain of U S WEST's cellular interests representing four million to five million POPs may be dependent on the outcome of pending litigation or the receipt of third-party consents. In the event that U S WEST is unable to transfer certain of its interests to AirTouch, the amount of debt that AirTouch will assume and the amount of stock that it will issue will be appropriately reduced. If consummated, the transaction would replace the 1994 agreements between AirTouch and U S WEST that called for the companies to combine their U.S. cellular operations and interests in PrimeCo in a multi-phased transaction. U S WEST Media Group (NYSE: UMG), one of America's largest broadband communications companies, is involved in domestic and international cable and telephony, wireless communications, and directory and information services. For 1996, Media Group reported proportionate revenues of $6.4 billion. Media Group is one of two major groups that make up U S WEST, a company in the connections business, helping customers share information, entertainment and communications services in local markets worldwide. U S WEST's other major group, U S WEST Communications, provides telecommunications services in 14 western and midwestern states. AirTouch Communications is a global wireless communications company, with interests in cellular, paging, and personal communications services in the United States, Belgium, Germany, India, Italy, Japan, Poland, Portugal, Romania, South Korea, Spain and Sweden, as well as an interest in the Globalstar satellite system. The company, based in the San Francisco, serves over 8 million proportionate customers worldwide. ### EX-99.B 3 LTR OF INTENT April 17, 1997 AirTouch Communications, Inc. One California Street San Francisco, California 94111 Ladies and Gentlemen: This letter agreement sets forth the principal terms and conditions upon which U S WEST, Inc. ("U S WEST") and AirTouch Communications, Inc. ("AirTouch") intend to consummate a business combination transaction (the "Transaction"), the effect of which will be to transfer to AirTouch all of the businesses of U S WEST Media Group, Inc. ("USWMG") engaged in the provision of wireless services in the United States, other than the Excluded Wireless Business (the "Domestic Wireless Business"). Capitalized terms used but not defined in this letter agreement shall have the meanings set forth in Schedule A hereto. 1. THE TRANSACTION (a) The Transaction shall be implemented through the following transactions which shall occur in the order indicated: (i) U S WEST shall restructure certain of the assets and businesses of U S WEST and its Subsidiaries by making a tax-free distribution of stock such that all or substantially all of the assets of the Domestic Wireless Business will be owned and operated by a first tier Subsidiary of U S WEST and entities directly or indirectly owned by such first-tier Subsidiary (the "Restructuring"). (ii) U S WEST shall contribute to a newly formed wholly owned Subsidiary of U S WEST ("New U S WEST") all of the assets of U S WEST other than assets related to the Domestic Wireless Business, and New U S WEST shall assume all of the liabilities of U S WEST other than liabilities related to the Domestic Wireless Business and an aggregate principal amount of AirTouch Communications, Inc. April 17, 1997 Page 2 indebtedness equal to the Assumed Indebtedness Amount (the "Contribution"). (iii) AirTouch will acquire U S WEST in a merger intended to qualify as a tax-free transaction under Section 368(a) of the Code (the "Merger"). In connection with the Merger: (A) Each share of U S WEST Communications Group Common Stock, par value $.01 per share, of U S WEST ("Communications Stock") issued and outstanding shall be converted into the right to receive one share of U S WEST Communications Group Common Stock, par value $.01 per share, of New U S WEST ("New Communications Stock"). (B) Each share of U S WEST Media Group Common Stock, par value $.01 per share, of U S WEST ("Media Stock") issued and outstanding shall be converted into the right to receive (x) one share of U S WEST Media Group Common Stock, par value $.01 per share, of New U S WEST ("New Media Stock") and (y) a number of shares of Common Stock, par value $.01 per share, of AirTouch ("AirTouch Common Stock") equal to the Conversion Number (as determined pursuant to subparagraph (b) below). (C) Each share of Series C Cumulative Redeemable Preferred Stock, par value $1.00 per share, of U S WEST ("U S WEST Series C Preferred Stock") issued and outstanding (other than shares as to which dissenters rights have been properly exercised) shall be converted into the right to receive one share of Series C Cumulative Redeemable Preferred Stock, par value $1.00 per share, of New U S WEST ("New U S WEST Series C Preferred Stock"). (D) Each share of Series D Convertible Preferred Stock, par value $1.00 per share, of Page 3 U S WEST ("U S WEST Series D Preferred Stock") issued and outstanding shall be converted into the right to receive one share of Series D Convertible Preferred Stock, par value $1.00 per share, of New U S WEST ("New U S WEST Series D Preferred Stock"). (E) Each share of Series E Convertible Preferred Stock, par value $1.00 per share, of U S WEST ("U S WEST Series E Preferred Stock") issued and outstanding (other than shares as to which dissenters rights have been properly exercised) shall be converted into the right to receive one share of Series E Convertible Preferred Stock, par value $1.00 per share, of New U S WEST ("New U S WEST Series E Preferred Stock"). (b) The Conversion Number shall be calculated in the following manner: (i) If the Determination Price (as defined below) is greater than or equal to $30.00 (the "Floor Price") and less than or equal to $33.00 (the "Cap Price"), the Conversion Number shall equal the quotient of (A) the Transaction Value minus the Assumed Indebtedness Amount, divided by (B) the product of the number of outstanding shares of Media Stock multiplied by the Determination Price, rounded to the nearest one-hundred thousandth (or if there shall not be a nearest one-hundred thousandth, to the next highest one-hundred thousandth). (ii) If the Determination Price is less than the Floor Price, the Conversion Number shall equal the quotient of (A) the Transaction Value minus the Assumed Indebtedness Amount, divided by (B) the product of the number of outstanding shares of Media Stock multiplied by the Floor Price, rounded to the nearest one-hundred thousandth (or if there shall not be a nearest one- Page 4 hundred thousandth, to the next highest one-hundred thousandth). (iii) If the Determination Price is greater than the Cap Price, the Conversion Number shall equal the quotient of (A) Transaction Value minus the Assumed Indebtedness Amount, divided by (B) the product of the number of outstanding shares of Media Stock multiplied by the Cap Price, rounded to the nearest one-hundred thousandth (or if there shall not be a nearest one-hundred thousandth, to the next highest one-hundred thousandth). (c) To the extent the terms of the Restructuring require modifications to the consideration to be issued by U S WEST to U S WEST's stockholders in the Merger, U S WEST and AirTouch agree to cooperate reasonably to make appropriate adjustments in order to reflect such modifications. (d) It is intended for United States federal income tax purposes that the Restructuring, the Contribution and the Merger shall qualify as tax-free transactions under Sections 332, 355, 368(a)(1)(D) and 368(a) of the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder (the "Code"). 2. DEFINITIVE AGREEMENTS. (a) The principal documentation for the Transaction will consist of: (i) An Agreement and Plan of Merger (the "Merger Agreement") to be entered into by U S WEST, New U S WEST and AirTouch or a Subsidiary thereof, which will set forth the specific terms of the Merger. (ii) A Restructuring and Contribution Agreement (the "Restructuring and Contribution Agreement") to be entered into by U S WEST, New U S WEST and certain subsidiaries of U S WEST, which will set forth the specific terms of the Restructuring and the Contribution. Page 5 (iii) A Tax Sharing Agreement (the "Tax Sharing Agreement") to be entered into by U S WEST, New U S WEST and AirTouch, which will, among other things, provide for the allocation of liability with respect to pre- and post-closing taxes and matters related thereto and set forth certain representations, warranties, covenants and indemnities relating to the preservation of the tax-free status of the Restructuring, the Contribution, and the Merger. (iv) A Post-Closing Covenants Agreement (the "Post-Closing Covenants Agreement") to be entered into by U S WEST, New U S WEST and AirTouch, which will set forth agreements governing certain matters that may arise following the Restructuring, the Contribution and the Merger (including the post-Merger indemnification obligations of the parties). (b) Promptly following the execution of this letter agreement, the parties agree to use good faith, reasonable best efforts to complete negotiation of a definitive Merger Agreement, Restructuring and Contribution Agreement, Tax Sharing Agreement, Post-Closing Covenants Agreement and such other contracts, agreements and other instruments as are reasonably necessary to carry out the intent of the parties expressed herein (collectively, the "Definitive Agreements"). 3. CONDITIONS TO THE TRANSACTION. The consummation of the Merger shall be subject to the fulfillment of each of the following conditions: (a) The preparation, execution and delivery of the Definitive Agreements, in form and substance reasonably satisfactory to each of U S WEST and AirTouch. (b) AirTouch and U S WEST shall agree on the principal terms and conditions of the indebtedness to be used to refinance existing indebtedness of U S WEST and retained by U S WEST in connection with the Contribution. Page 6 (c) Prior to execution of Definitive Agreements, the completion to each party's satisfaction of its review of the properties, records, financial statements and operations (including legal, regulatory, tax and accounting due diligence) of U S WEST and the Domestic Wireless Business (in the case of AirTouch) and AirTouch (in the case of U S WEST). (d) The receipt of all necessary regulatory, judicial and other governmental approvals and all required material consents of third parties required for the consummation of the Transaction, including the receipt of an advance letter ruling from the Internal Revenue Service that (1) the Restructuring and the Contribution and distribution of shares of capital stock of New U S WEST to stockholders of U S WEST pursuant to the Merger will qualify as tax-free transactions within the meaning of Sections 332, 355 and 368(a)(1)(D) of the Code and (2) the Merger will qualify as a tax-free reorganization within the meaning of Section 368(a) of the Code. (e) The approval of the Transaction and the Definitive Agreements by the Boards of Directors of U S WEST and AirTouch. (f) The receipt of the approval of the Transaction by the stockholders of U S WEST. 4. REASONABLE BEST EFFORTS. Each party hereto agrees to proceed with the transactions contemplated hereby on a prompt basis and to use its reasonable best efforts to prepare all necessary documentation, obtain all necessary consents, authorizations, approvals and waivers required to be obtained by it in connection with the consummation of the Transaction and take all other actions necessary to consummate the Transaction as promptly as practicable. To the extent any transaction contemplated hereby requires action by a Subsidiary of U S WEST or AirTouch, U S WEST or AirTouch, as the case may be, agrees to cause such Subsidiary to act as required by, and in a manner consistent with, this letter agreement. Page 7 5. BINDING EFFECT. (a) This letter agreement constitutes an expression of mutual intention, is not a binding obligation on the part of any party hereto and shall not otherwise create any rights in favor of any of the parties hereto. A binding agreement with respect to the Transaction will result only from the execution and delivery of a definitive Merger Agreement. Notwithstanding the two preceding sentences, the provisions of paragraph 9 shall constitute binding agreements and commitments of AirTouch and U S WEST. (b) Each party hereto acknowledges that, except as set forth in paragraph 9, this letter agreement shall not affect any party's obligations under (i) the Amended and Restated Joint Venture Organization Agreement, dated as of September 30, 1995, between AirTouch and U S WEST, Inc., a Colorado corporation and predecessor to U S WEST ("U S WEST Colorado"), as amended (the "Joint Venture Organization Agreement"), and the Related Agreements referred to therein , and all letter and other agreements entered into by U S WEST, U S WEST Colorado and AirTouch and their respective Subsidiaries pursuant thereto or in connection therewith, or (ii) the confidentiality agreement, dated April 11, 1997, between U S WEST and AirTouch, each of which shall remain in full force and effect in accordance with the terms thereof. 6. TERMINATION. This letter agreement (except for the provisions of paragraph 9) may be terminated by either party hereto in the event Definitive Agreements have not been executed by the parties on or before May 15, 1997. 7. PUBLICITY. Each of the parties hereto agrees with the other party hereto that no press release or similar public announcement, statement or communication shall be made or caused to be made with respect to the Transaction unless specifically approved in advance by both parties hereto. 8. GOVERNING LAW. This letter agreement shall be governed by, and construed in accordance with, the law of the State of Page 8 Delaware, without reference to choice of law principles, including all matters of construction, validity and performance. 9. CERTAIN AGREEMENTS OF AIRTOUCH AND U S WEST. (a) Each of AirTouch and U S WEST agree that the parties shall not proceed with the Phase II Closing (as defined in the Joint Venture Organization Agreement) at any time from the date hereof until (i) the date that is nine months following the termination of this letter agreement pursuant to paragraph 6 or (ii) if a definitive Merger Agreement is executed, the date that is nine months following any termination thereof. (b) If the Merger is consummated, U S WEST agrees that New U S WEST will unconditionally and irrevocably release and discharge AirTouch and its Subsidiaries (and each of its past, present or future directors, officers, employees, agents and other representatives), and each of their respective predecessors, successors and assigns, from any and all claims, actions, obligations, demands, injuries, damages, losses, costs or liabilities of any kind, if any, arising out of, relating to or resulting from, directly or indirectly, the Joint Venture Organization Agreement (or the Related Agreements referred to therein or transactions contemplated thereby) or as a result of the Transaction, in each case, with respect to any Excluded Assets, including, without limitation, any claim for indemnification from AirTouch or WMC Partners, L.P. pursuant to Article 8 of the Joint Venture Organization Agreement. 10. COUNTERPARTS. This letter agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Page 9 If the terms of our understanding have been correctly set forth herein, please confirm this by signing and returning to the undersigned a copy of this letter agreement. Very truly yours, U S WEST, INC. By: ------------------------------ Name: Title Agreed to and accepted: AIRTOUCH COMMUNICATIONS, INC. By: ------------------------------ Name: Title: SCHEDULE A CERTAIN DEFINED TERMS For purposes of this letter agreement, the following terms shall have the meanings set forth below: "ASSUMED INDEBTEDNESS AMOUNT" shall mean $2,200,000,000, subject to adjustment to be agreed upon to reflect any reduction in the Transaction Value. "CONSENT" shall mean any approval, consent or waiver required to be obtained from any third party for the consummation of a specified transaction, including (without limitation) any option, right of first refusal, right of first offer or other similar right of a third party triggered by a specified transaction. "DETERMINATION PRICE" shall mean the average of the Volume-Weighted Average Trading Prices of AirTouch Common Stock for the 30 consecutive Trading Days (the "Averaging Period") ending on the fifth Trading Day immediately prior to the closing date for the Merger, rounded to the nearest one-hundred thousandth (or if there shall not be a nearest one-hundred thousandth, to the next higher one- hundred thousandth). "EXCLUDED ASSET" shall mean each of the Subsidiaries or Investments of NewVector set forth in the letter agreement between the parties of even date herewith unless U S WEST shall have obtained as to such Subsidiary or Investment of NewVector either (i) all required Consents to the consummation of the Transaction and the transactions contemplated by the Definitive Agreements or (ii) a final, non-appealable order of a court of competent jurisdiction to the effect that the consummation of the Transaction and the transactions contemplated by the Definitive Agreements does not give rise to any requirement to obtain any such Consents. "EXCLUDED ASSET VALUE" shall equal, for all Excluded Assets, (x) the aggregate number of proportionate POPs represented by the Excluded Assets as determined by reference to Kagan's 1997 Cellular Telephone Atlas multiplied by (y) the price set forth opposite such aggregate number of POPs below: Number of POPs Price -------------- ----- Less than= 2,000,000 $220 2,000,001 - 4,999,999 increasing on a linear basis from $220 to $230 Greater than= 5,000,000 $230 "EXCLUDED WIRELESS BUSINESS" shall mean all of the Excluded Assets and any and all liabilities arising out of, relating to or resulting from, directly or indirectly, the Excluded Assets. "INVESTMENT" shall mean, with respect to any Person, any equity interest held by such Person or its Subsidiaries in another Person (other than a Subsidiary of such Person). "PERSON" shall mean and includes any individual, partnership, limited liability company, joint venture, corporation, association, joint stock company, trust, unincorporated organization or similar entity. "SUBSIDIARY" shall mean, with respect to any Person, (i) each corporation, partnership, joint venture or other legal entity of which such Person owns, either directly or indirectly, 50% or more of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or similar governing body of such corporation, partnership, joint venture or other legal entity and (ii) each partnership in which such Person or another Subsidiary of such Person is the general partner or otherwise controls such partnership. "TRADING DAY" shall mean a day on which the NYSE is open for the transaction of business. "TRANSACTION VALUE" shall equal (i) $5,000,000,000, minus (ii) the Excluded Asset Value. "VOLUME-WEIGHTED AVERAGE TRADING PRICE" means, for any Trading Day, an amount equal to (i) the cumulative sum, for each trade of AirTouch Common Stock during such Trading Day on the NYSE (or, if such security is not listed on the NYSE, such other principal exchange or over-the-counter market on which such security is listed), of the product of: (x) the sale price times (y) the number of shares of AirTouch Common Stock sold at such price, divided by (ii) the total number of shares of AirTouch Common Stock so traded during the Trading Day. -----END PRIVACY-ENHANCED MESSAGE-----