OFFER TO EXCHANGE AND CONSENT SOLICITATION
U S WEST FINANCING I U S WEST FINANCING II
7.96% TRUST ORIGINATED PREFERRED 8 1/4% TRUST ORIGINATED PREFERRED
SECURITIES-SM- SECURITIES-SM-
("TOPRS-SM-") (CUSIP 90388D204) ("TOPRS-SM-") (CUSIP 90338M204)
FOR FOR
MEDIAONE FINANCE TRUST I MEDIAONE FINANCE TRUST II
. % TRUST ORIGINATED PREFERRED % TRUST ORIGINATED PREFERRED SECURITIES-SM-
SECURITIES-SM- ("TOPRS-SM-")
("TOPRS-SM-") OR $ . IN CASH
OR $ . IN CASH
EACH OF THE OFFERS AND RELATED WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON , , 1998, UNLESS EXTENDED.
May , 1998
To: Brokers, Dealers, Commercial Banks,
Trust Companies and
Other Nominees
We have been appointed by U S WEST Capital Funding, Inc. ("Capital Funding")
to act as Dealer Managers in connection with the offers described below.
Capital Funding is offering 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.
Capital Funding is also offering to exchange 8 1/4% Trust Originated Preferred
Securities (the "Old Series II Preferred Securities" and, together with the Old
Series I Preferred Securities, the "Old Preferred Securities") of U S WEST
Financing II (the "Old Series II Trust") for an equal amount of % Trust
Originated Preferred Securities (the "New Series II Preferred Securities") of
MediaOne Finance Trust II (the "New Series II Trust") or $ in cash per Old
Series II Preferred Security. Each of the offers is referred to individually as
on "Offer" and collectively as the "Offers." The Offers are being made upon the
terms and subject to the conditions set forth in a Prospectus, dated May ,
1998 (as amended or supplemented and including all documents incorporated
therein by reference, the "Prospectus"), and the related Letters of Transmittal
and Consent (the "Letters of Transmittal"). The terms of the New Series I
Preferred Securities and the New Series II Preferred Securities are described in
the Prospectus.
In connection with the Offers, U S WEST, Inc. ("U S WEST") and Capital
Funding are soliciting consents (the "Consents") from the holders of record of
Old Preferred Securities as of May 6, 1998 (the "Record Date") to the Proposed
Amendments described in the Prospectus.
- The proper tender by holders of Old Preferred Securities as of the Record
Date will constitute the giving of a Consent by such holders with respect
to such Old Preferred Securities.
- Holders of Old Preferred Securities who acquired such Old Preferred
Securities after the Record Date will have the right to tender their Old
Preferred Securities pursuant to the Offers but will not have the right to
provide Consents.
- A holder of Old Preferred Securities as of the Record Date will be
permitted to provide such holder's Consent even if such holder does not
tender Old Preferred Securities pursuant to an Offer.
- No separate payments will be made for consents.
For your information and for forwarding to your clients, for whom you hold
either or both series of Old Preferred Securities registered in your name or in
the name of your nominee, we are enclosing an appropriate number of sets of the
following documents with respect to either or both Offers, as applicable:
- ------------------------
- -SM- "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co.
1. Prospectus;
2. Letter of Transmittal relating to the applicable Offer for your use and for
the information of your clients, for whom you hold Old Preferred Securities
of the applicable series, together with Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withholding;
3. Notice of Guaranteed Delivery relating to the applicable Offer, to be used
to accept such Offer if the book-entry transfer of Old Preferred Securities
cannot be completed by the applicable Expiration Date (as defined in the
Prospectus);
4. A form of letter that may be sent to your clients, for whom you hold Old
Preferred Securities, with space provided for obtaining such clients'
instructions and their designation of a Soliciting Dealer with regard to the
applicable Offer;
5. A Question and Answer pamphlet relating to both of the Offers that may be
sent to your clients; and
6. A return envelope addressed to First Chicago Trust Company of New York, the
Exchange Agent.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
Brokers, dealers, commercial banks, trust companies and other nominees
should be aware that the Depository Trust Company has issued a special notice
and established special procedures for tendering Old Preferred Securities
pursuant to the Offers. With respect to each Offer, separate accounts have
been established by the Exchange Agent at the Depository Trust Company ("DTC")
for (i) book-entry delivery of interests in Old Preferred Securities held as
of the Record Date (which will constitute the giving of a Consent with respect
to such interests) and (ii) book-entry delivery of interests in Old Preferred
Securities acquired after the Record Date (which will not constitute the
giving of a Consent with respect to such interests). PLEASE ENSURE THAT
TENDERS ARE MADE TO THE PROPER ACCOUNT. If only a Consent is being provided by
a holder as of the Record Date, you will be required to fill out the form of
Consent included in the applicable Letter of Transmittal and return such
Letter of Transmittal to the Exchange Agent.
Capital Funding will pay Soliciting Dealers designated by the beneficial
owner of the Old Preferred Securities validly tendered and accepted pursuant
to the Offers a solicitation fee of $0.50 per Old Preferred Security exchanged
for New Preferred Securities and $0.375 per Old Preferred Security tendered
for cash (except that in the case of transactions equal to or exceeding 10,000
Old Preferred Securities of either series, Capital Funding will pay $0.25 per
Old Preferred Security exchanged for New Preferred Securities or tendered for
cash), in each case subject to certain conditions. In cases where no
Solicitating Dealer is designated, the Dealer Managers will be paid one
hundred percent (100%) of the applicable solicitation fee. "Solicitating
Dealers" include (i) any broker or dealer in securities, including each Dealer
Manager in its capacity as a broker or dealer, which 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 which 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 (each of
which is referred to herein as a "Soliciting Dealer"). No solicitation fee
shall be payable to a Soliciting Dealer with respect to the tender of Old
Preferred Securities by a holder unless the applicable Letter of Transmittal
accompanying such tender designates such Soliciting Dealer as such in the box
captioned "Solicited Tenders." No separate solicitation fee will be paid for
Consents.
Soliciting Dealers will include any of the organizations described in
clauses (i),(ii) and (iii) above even when the activities of such
organizations in connection with either Offer consist solely of forwarding to
clients material relating to such Offer, including the Prospectus and the
related Letter of Transmittal, and tendering Old Preferred Securities as
directed by beneficial owners thereof; provided that under no circumstances
shall any fee bc paid to Soliciting Dealers more than once with respect to any
Old Preferred Security. No Soliciting Dealer is required to make any
recommendation to holders of Old Preferred Securities as to whether to tender
or refrain from tendering in the applicable Offer. No assumption is made, in
making payment to any Soliciting Dealer, that its activities in connection
with an
Offer included any activities other than those described above, and for all
purposes noted in all materials relating to the Offers, the term "solicit"
shall be deemed to mean no more than processing Old Preferred Securities
tendered or forwarding to customers materials regarding the Offers.
In order to receive a solicitation fee, the Soliciting Dealer must return
a Notice of Solicited Tenders to the Exchange Agent within two business days
after the applicable Expiration Date. Such Notice of Solicited Tenders for the
Old Series I Preferred Securities is attached hereto on page 4, and such
Notice of Solicited Tenders for the Old Series II Preferred Securities is
attached hereto on page 5. No solicitation fee shall be payable to a
Soliciting Dealer in respect of Old Preferred Securities (i) beneficially
owned by such Soliciting Dealer or (ii) registered in the name of such
Soliciting Dealer unless such Old Preferred Securities are held by such
Soliciting Dealer as nominee and such Old Preferred Securities are being
tendered for the benefit of one or more beneficial owners identified on the
applicable Letter of Transmittal or the applicable Notice of Solicited
Tenders. No solicitation fee shall be payable to the Soliciting Dealer with
respect to the tender of Old Preferred Securities by the holder of record, for
the benefit of the beneficial owner, unless the beneficial owner has
designated such Soliciting Dealer.
No solicitation fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer any portion of such
fee to a tendering holder (other than itself). No broker, dealer, bank, trust
company or fiduciary shall be deemed to be the agent of U S WEST, Capital
Funding, the New Series I Trust, the New Series II Trust, the Old Series I
Trust, the Old Series II Trust, the trustee of any trust, the Exchange Agent,
the Information Agent or the Dealer Managers for purposes of the Offers.
Capital Funding will, upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding materials to their customers. Capital Funding
will pay all stock transfer taxes applicable to the acceptance of Old
Preferred Securities pursuant to the Offers, in each case, subject to
Instruction 5 of the applicable Letter of Transmittal.
Soliciting Dealers should take care to ensure proper record-keeping to
document their entitlement to any solicitation fee.
All questions as to the validity, form and eligibility (including time of
receipt) of Notices of Solicited Tenders will be determined by the Exchange
Agent, in its sole discretion, which determination will be final and binding.
Neither the Exchange Agent nor any other person will be under any duty to give
notification of any defects or irregularities in any Notice of Solicited
Tender or incur any liability for failure to give such notification.
Any inquiries you may have with respect to the Offers should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent at the address and telephone number set forth on the back
cover of the Prospectus.
Very truly yours,
MERRILL LYNCH & CO.
LEHMAN BROTHERS INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
AS THE AGENT OF U S WEST, CAPITAL FUNDING, THE OLD SERIES I TRUST, THE OLD
SERIES II TRUST, THE NEW SERIES I TRUST, THE NEW SERIES II TRUST, THE TRUSTEES
OF ANY TRUST, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE EXCHANGE
AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH EITHER OR BOTH OF THE
OFFERS OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED
THEREIN.
NOTICE OF SOLICITED TENDERS
ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO THE EXCHANGE AGENT
WITHIN THREE BUSINESS DAYS AFTER THE APPLICABLE EXPIRATION DATE TO THE ADDRESS
SET FORTH ON THE BACK COVER OF THE PROSPECTUS. NOTICES MAY BE DELIVERED BY
FACSIMILE TO THE EXCHANGE AGENT AT (201) 222-4720 (CONFIRM RECEIPT BY
TELEPHONE (201) 222-4707).
ALL QUESTIONS CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE
DIRECTED TO THE INFORMATION AGENT AS FOLLOWS: BEACON HILL PARTNERS, INC., 90
BROAD STREET, NEW YORK, NEW YORK 10004, (800) 787-3120 (TOLL-FREE); BANKS AND
BROKERS CALL COLLECT, (212) 843-8500.
OLD SERIES I PREFERRED SECURITIES
List below the number of Old Series I Preferred Securities whose tender
you have solicited. All Old Series I Preferred Securities beneficially owned
by a beneficial owner, whether in one account or several, and in however many
capacities, must be aggregated for purposes of completing the tables below.
Any questions as to what constitutes beneficial ownership should be directed
to the Exchange Agent. If the space below is inadequate, list the Old Series I
Preferred Securities on a separate signed schedule and affix the list to this
Notice of Solicited Tenders. PLEASE DO NOT COMPLETE THE SECTIONS OF THE TABLES
HEADED "TO BE COMPLETED ONLY BY EXCHANGE AGENT."
BENEFICIAL OWNERS OF FEWER THAN 10,000 OLD SERIES I PREFERRED SECURITIES
SOLICITATION FEE $0.50 PER OLD PREFERRED SECURITY TENDERED FOR NEW PREFERRED
SECURITY
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NUMBER OF SECURITIES
DTC PARTICIPANT TENDERED FOR NEW NUMBER OF BENEFICAL
NUMBER VOI TICKET NUMBER PREFERRED SECURITIES OWNER(S) REPRESENTED
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SOLICITATION FEE $0.375 PER OLD PREFERRED SECURITY TENDERED FOR CASH
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NUMBER OF BENEFICAL
DTC PARTICIPANT NUMBER OF SECURITIES OWNER(S)
NUMBER VOI TICKET NUMBER TENDERED FOR CASH REPRESENTED
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BENEFICIAL OWNERS OF 10,000 OR MORE OLD SERIES I PREFERRED SECURITIES
SOLICITATION FEE $0.250 PER PREFERRED SECURITY
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DTC PARTICIPANT VOI TICKET NUMBER OF SECURITIES NUMBER OF BENEFICAL NAME OF SOLICITING
NUMBER NUMBER TENDERED OWNER(S) REPRESENTED DEALER
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OLD SERIES II PREFERRED SECURITIES
List below the number of Old Series II Preferred Securities whose tender
you have solicited. All Old Series II Preferred Securities beneficially owned
by a beneficial owner, whether in one account or several, and in however many
capacities must be aggregated for purposes of completing the tables below. Any
questions as to what constitutes beneficial ownership should be directed to
the Exchange Agent. If the space below is inadequate, list the Old Series II
Preferred Securities on a separate signed schedule and affix the list to this
Notice of Solicited Tenders. PLEASE DO NOT COMPLETE THE SECTIONS OF THE TABLES
HEADED "TO BE COMPLETED ONLY BY EXCHANGE AGENT."
BENEFICIAL OWNERS OF FEWER THAN 10,000 OLD SERIES II PREFERRED SECURITIES
SOLICITATION FEE $0.50 PER OLD PREFERRED SECURITY TENDERED FOR NEW PREFERRED
SECURITY
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NUMBER OF SECURITIES
DTC PARTICIPANT TENDERED FOR NEW NUMBER OF BENEFICAL
NUMBER VOI TICKET NUMBER PREFERRED SECURITIES OWNER(S) REPRESENTED
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SOLICITATION FEE $0.375 PER OLD PREFERRED SECURITY TENDERED FOR CASH
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NUMBER OF SECURITIES
DTC PARTICIPANT TENDERED FOR NEW NUMBER OF BENEFICAL
NUMBER VOI TICKET NUMBER PREFERRED SECURITIES OWNER(S) REPRESENTED
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BENEFICIAL OWNERS OF 10,000 OR MORE OLD SERIES II PREFERRED SECURITIES
SOLICITATION FEE $0.250 PER PREFERRED SECURITY
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DTC PARTICIPANT VOI TICKET NUMBER OF SECURITIES NUMBER OF BENEFICAL NAME OF SOLICITING
NUMBER NUMBER TENDERED OWNER(S) REPRESENTED DEALER
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The undersigned hereby confirms that: (i) it has complied with the
applicable requirements of the Securities Exchange Act of 1934, as amended,
and the applicable rules and regulations thereunder, in connection with such
solicitation; (ii) it is entitled to such compensation for such solicitation
under the terms and conditions of the Prospectus (unless the undersigned is
not being compensated for such solicitation); (iii) in soliciting tenders of
Old Preferred Securities, it has used no soliciting materials other than those
furnished by Capital Funding; and (iv) if it is a foreign broker or dealer not
eligible for
membership in the NASD, it has agreed to conform to the NASD's Rules of Fair
Practice in making solicitations outside the United States to the same extent
as though it were an NASD member.
Print Firm Name ------------------ Address ------------------
Authorized Signature ------------------ City, State, Zip Code ------------------
Area Code and Telephone Number ------------------ Attention ------------------