AMENDMENT TO SEPARATION AGREEMENT
This Amendment to Separation Agreement ("Amendment) is made
and entered into as of the 18th day of March, 1998, by and among
Peter Kiewit Sons', Inc., a Delaware corporation ("PKS"), Level 3
Communications, Inc. (formerly, Kiewit Diversified Group Inc.), a
Delaware corporation ("Level 3"), PKS Holdings, Inc., a Delaware
corporation ("PKS Holdings") and Kiewit Construction Group Inc.,
a Delaware corporation ("KCG," and together with PKS, Level 3,
and PKS Holdings, collectively the "Parties" or individually a
"Party").
PRELIMINARY STATEMENT. The Parties have previously entered
into a Separation Agreement dated as of December 8, 1997 (the
"Separation Agreement"), with respect to a series of transactions
(collectively, the "Transaction") intended to separate the
construction businesses of PKS and the diversified businesses of
PKS into two separate and independent companies. The Parties
desire to amend the Separation Agreement to provide for the
modification of certain cost allocation provisions thereof, in
the event of the occurrence of certain specified events.
NOW, THEREFORE, in consideration of the premises, the
Parties hereby agree as follows:
1. Section 1.01 of the Separation Agreement is hereby
amended by adding the following definitions:
"Conversion Event: the issuance of shares of Class D Stock in
exchange for all of the outstanding shares of Class R Stock
pursuant to the approval by the PKS Board, or any successor, of a
"Forced Conversion" ( as defined in the PKS Certificate)."
"Forced Conversion Date: the date of issuance of shares of Class
D Stock pursuant to the Conversion Event."
2. Section 3.06(b) of the Separation Agreement is hereby
amended in its entirety to read as follows:
"(b) PKS will record the Class R Distribution, and
register all persons entitled to the Class R Distribution as
holders of Class R Stock, on the books and records maintained by
or on behalf of PKS for the registration of ownership of the
capital stock of PKS, effective as of the Class R Distribution
Record Date. PKS will not issue certificates or other
instruments to evidence Class R Stock unless and until the Share
Exchange is consummated, and in any event, no sooner than June
30, 1998. If the Share Exchange is consummated, PKS will issue
and distribute certificates evidencing the Class R Stock. If the
Class R Distribution is consummated, but the Transaction is later
abandoned, PKS will exercise its rights to repurchase all of the
Class R Stock under Section IX.M of the Initial Certificate
Amendment as promptly as practicable after abandonment of the
Transaction."
3. Section 7.01 of the Separation Agreement is amended
in its entirety to read as follows:
"7.01 General. The Parties have agreed to allocate the
financial burden of Covered Expenses 82.5% to the Diversified
Group and 17.5% to the Construction Group (the "Expense Sharing
Ratio"), whether the Transaction is consummated or abandoned;
provided, however, that in the event that the Forced Conversion
Date occurs on or before July 15, 1998, the Expense Sharing Ratio
shall be modified so that the Construction Group incurs 100% of
the Covered Expenses. In such event, the Construction Group will
reimburse the Diversified Group for any Covered Expenses paid by
the Diversified Group prior to the Forced Conversion Date. All
other costs or expenses incurred by any Party in connection with
the Transaction will be borne by the Party incurring the cost or
expense."
4. A paragraph shall be added as Section 7.02 (c)of the
Separation Agreement and shall read in its entirety as follows:
"(d) The Parties acknowledge that in the event the
Forced Conversion Date occurs on or before July 15, 1998, and the
Expense Sharing Ratio is modified as provided in Section 7.01
above, any success fees, mark-ups, bonuses, equity participation
or amounts in excess of regularly billable hours, payable to the
advisors described in (i), (ii), (iii) and (iv) of Section
7.02(a), shall be incurred solely for the account of the
Diversified Group, and shall not be considered to be Covered
Expenses.
5. Section 7.04 of the Separation Agreement is amended in its
entirety to read as follows:
"7.04 Covered Expense True-Up. KDG will prepare and
submit to KCG, within 120 calendar days after the date of
abandonment of the Transaction or the Exchange Date, as the case
may be, a schedule of the Other Covered Expenses, together with
such supporting documentation with respect to the Other Covered
Expenses as KCG reasonably requests. Within five calendar days
after the submission of that schedule, KDG or KCG, as the case
may be, will pay KCG or KDG, as the case may be, in cash, an
amount sufficient to ensure that the financial burden of the
Covered Expenses has been allocated between KCG and KDG in
proportion to the Expense Sharing Ratio."
6. Unless otherwise specified, capitalized terms used
herein shall have the meanings specified in the Separation
Agreement.
7. Any other changes or modifications to the Separation
Agreement necessary to conform such agreement to this Amendment
are hereby deemed to be made. In all other respects, not
inconsistent with this Amendment, the terms of the Separation
Agreement, not specifically or by necessary implication amended
or modified hereby, shall be and remain in full force and effect
as modified hereby.
IN WITNESS WHEREOF, the Parties have caused this Amendment
to be duly executed as of the date first above written.
PETER KIEWIT SONS', INC.
By: /s/ Walter Scott, Jr.
Walter Scott, Jr., President
LEVEL 3 COMMUNICATIONS, INC.
By: /s/ James Q. Crowe
James Q. Crowe, President
PKS HOLDINGS, INC.
By: /s/ Kenneth E.Stinson
Kenneth E. Stinson, President
KIEWIT CONSTRUCTION GROUP INC.
By: /s/ Kenneth E. Stinson
Kenneth E. Stinson, President