SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): September 13, 1998
QWEST COMMUNICATIONS INTERNATIONAL INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
000-22609 84-1339282
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(Commission File Number) (IRS Employer Identification No.)
1000 Qwest Tower, 555 Seventeenth Street Denver, Colorado 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 303-992-1400
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Not Applicable
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
On September 13, 1998, Qwest Communications International, Inc. (the
"Registrant") and Icon CMT Corp., a Delaware corporation ("Icon"), entered into
a definitive Agreement and Plan of Merger (the "Merger Agreement") among Icon,
the Registrant and a wholly-owned subsidiary of the Registrant, providing for
the merger that will result in Icon becoming a subsidiary of the Registrant. A
copy of the press release dated September 14, 1998 of the Registrant announcing
the merger is attached as Exhibit 99.1 to this current report on Form 8-K. A
copy of the Merger Agreement is attached to the current report on Form 8-K dated
September 13, 1998 of Icon as Exhibit 2.1 and is incorporated herein by
reference.
The following descriptions of the Merger Agreement and the option
agreements, the voting agreements, the term loan, the warrants and the related
registration rights agreement are not complete and are qualified by reference to
the Merger Agreement and its exhibits incorporated by reference herein.
The Merger Agreement provides for the acquisition of Icon in a
stock-for-stock merger. The acquisition will be accounted for as a purchase. The
actual number of shares of the Registrant's common stock to be exchanged for
each Icon share will be determined by dividing $12 by a 15-day volume weighted
average of trading prices for the Registrant's common stock prior to the Icon
stockholders meeting that will be called to approve the transaction, but will
not be less than .3200 shares (if the Registrant's average stock price exceeds
$37.50) or more than .444 shares (if the Registrant's average stock price is
less than $27.00).
The Icon board of directors unanimously approved the Merger Agreement
and related transactions. The obligations of the parties under the Merger
Agreement are subject to the satisfaction of certain conditions, including,
without limitation, the approval of Icon's stockholders. The Merger Agreement is
not subject to the approval of the Registrant's board of directors or
stockholders. Icon and its directors, officers and other representatives are,
subject to certain exceptions, prohibited from soliciting, initiating or
encouraging proposals for alternative business combination transactions,
providing information to or conducting negotiations or discussions with other
persons regarding alternative business combination transactions, withdrawing the
Icon board of director's approval of the Merger Agreement, recommending that
Icon's stockholders approve an alternative business combination transaction or
terminating the Merger Agreement to accept an alternative business combination
transaction. Fees and other amounts are payable by Icon to the Registrant in
connection with the termination of the Merger Agreement in certain
circumstances, and additional amounts may be payable by Icon to the Registrant
if an alternative business combination transaction involving Icon is consummated
within a year following the termination of the Merger Agreement.
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Pursuant to the Merger Agreement, the Registrant and each of Scott A.
Baxter, President and Chief Executive Officer of Icon, Richard M. Brown, Vice
President--Information Technologies of Icon, and Scott Harmolin, Senior Vice
President--Senior Technology Officer of Icon, entered into option agreements
providing for, among other things, a grant by the stockholders to Qwest of an
option to acquire 6,550,354 restricted Icon shares and certain restrictions on
the sale or other transfer of the restricted Icon shares. The Registrant and
Messrs. Baxter, Brown and Harmolin also entered into voting agreements providing
for, among other things, (1) the obligation of the stockholders to vote the
shares of Icon capital stock beneficially owned by them to approve the Merger
Agreement and the merger and against other business combination transactions
involving Icon and to grant to the Registrant an irrevocable proxy in connection
therewith and (2) certain other restrictions on the voting and the sale or other
transfer of such shares of Icon capital stock. The voting restrictions in the
option agreements and the voting agreements terminate upon the termination of
the Merger Agreement in certain circumstances. Messrs. Baxter, Brown and
Harmolin beneficially own 41.7% of the shares of Icon common stock outstanding
as of September 13, 1998. Forms of the option agreements and the voting
agreements are attached as Exhibits A and B to the Merger Agreement and are
incorporated by reference herein.
Pursuant to the Merger Agreement, the Registrant also committed to lend
to Icon up to $15,000,000 in the aggregate, subject to the execution of
definitive loan and security documentation in form and substance satisfactory to
Icon and the Registrant. The date of initial availability of the loan will be
January 31, 1999. The proceeds of the loan will be applied to (a) repay the
indebtedness outstanding under Icon's credit facilities, (b) pay certain other
indebtedness, (c) acquire equipment and (d) pay general corporate expenses. The
maturity date of the loan will be January 31, 2000. The terms and conditions of
loan are attached as Exhibit D to the Merger Agreement and are incorporated by
reference herein.
In consideration of the commitment by the Registrant to advance the
loan to Icon, Icon issued to the Registrant warrants to purchase 750,000 shares
of Icon's common stock, exercisable at $12.00 per share for 10 years with
registration rights granted pursuant to a registration rights agreement. The
forms of the warrants and the registration rights agreement are attached as
Exhibits E and F, respectively, to the Merger Agreement and are incorporated by
reference herein.
As a result of the effectiveness of the option agreements and the
voting agreements and the issuance of the warrants, the Registrant may be deemed
to be the "beneficial owner" of approximately 44% of the shares of Icon's common
stock, as determined pursuant to Regulation 13D-G under the Securities Exchange
Act of 1934, as amended.
Pursuant to the Merger Agreement, the Registrant and Icon also entered
into a private line services agreement, under which the Registrant would provide
to Icon telecommunications capacity and related ancillary services, and a
related master collocation license agreement.
2
This current report on Form 8-K contains or incorporates by reference
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that include,
among others, (i) statements by the Registrant concerning the benefits expected
to result from certain business activities and transactions, (ii) the
Registrant's plans to complete the Qwest Network, an approximately 18,450
route-mile, coast-to-coast, technologically advanced fiber optic communications
network, and (iii) other statements by the Registrant of expectations, beliefs,
future plans and strategies, anticipated developments and other matters that are
not historical facts. The Registrant cautions the reader that these
forward-looking statements are subject to risks and uncertainties, including
financial, regulatory environment, and trend projections, that could cause
actual events or results to differ materially from those expressed or implied by
the statements. Such risks and uncertainties include those risks, uncertainties
and risk factors identified, among other places, in documents filed with
Securities and Exchange Commission. The most important factors that could
prevent the Registrant from achieving its stated goals include, but are not
limited to, (a) failure by the Registrant to construct the Qwest Network on
schedule and on budget, (b) failure by the Registrant to maintain all necessary
rights-of-way, (c) intense competition in the Registrant's communications
services markets, (d) rapid and significant changes in technology and markets,
(e) dependence on new product development, (f) operating and financial risks
related to managing rapid growth, integrating acquired businesses, being highly
leveraged and sustaining operating cash deficits and (g) adverse changes in the
regulatory environment. These cautionary statements should be considered in
connection with any subsequent written or oral forward-looking statements that
may be issued by the Registrant or persons acting on its behalf. The Registrant
undertakes no obligation to review or confirm analysts' expectations or
estimates or to release publicly any revisions to any forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit 99.1 Press release of the Registrant dated September 14,
1998.
Exhibit 99.2 Agreement and Plan of Merger dated as of September 13,
1998 among Icon CMT Corp., the Registrant and Qwest
1998-I Acquisition Corp., filed as Exhibit 2.1 to the
Current Report on Form 8-K of Icon CMT Corp. dated
September 14, 1998 and filed with the Securities and
Exchange Commission on September 16, 1998, and
incorporated herein by reference.
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SIGNATURES
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 thereunto duly authorized.
QWEST COMMUNICATIONS INTERNATIONAL INC.
DATE: September 15, 1998 By: /s/ ROBERT S. WOODRUFF
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Robert S. Woodruff
Executive Vice President - Finance
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit 99.1 Press release of Icon CMT Corp. and the Registrant
dated September 14, 1998.
Exhibit 99.2 Agreement and Plan of Merger dated as of September 13,
1998 among Icon CMT Corp., the Registrant and Qwest
1998-I Acquisition Corp., filed as Exhibit 2.1 to the
Current Report on Form 8-K of Icon CMT Corp. dated
September 14, 1998 and filed with the Securities and
Exchange Commission on September 16, 1998, and
incorporated herein by reference.
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