EXHIBIT (c)(4)
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CONFORMED COPY
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STANDSTILL AGREEMENT
STANDSTILL AGREEMENT, dated as of May 16, 1999 (this "Agreement"),
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between Global Crossing Ltd., a company formed under the laws of Bermuda
("Global") and U S West, Inc., a Delaware corporation ("USW")
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WHEREAS, Global and USW are parties to that certain Agreement and Plan
of Merger dated as of the date hereof (the "Merger Agreement"; capitalized
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terms used and not otherwise defined herein having the meaning set forth in the
Merger Agreement);
WHEREAS, in connection with the Merger Agreement, Global and USW have
entered into (i) a Tender Offer and Purchase Agreement dated the date hereof
(the "Tender Offer and Purchase Agreement") pursuant to which USW (or a direct
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or indirect subsidiary of USW) will acquire up to 39,259,305 shares of the
common stock, par value $0.01 per share, of Global ("Global Common Stock"), upon
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the terms and subject to the conditions set forth in the Tender Offer and
Purchase Agreement and (ii) a Voting Agreement (the "Voting Agreement"); and
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WHEREAS, USW and Global are entering into this Agreement to establish
certain arrangements with respect to the shares of Global Voting Securities to
be purchased by USW pursuant to the Tender Offer and Purchase Agreement, as well
as certain restrictions in respect of the capital stock of Global, corporate
governance and other related corporate matters;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
Section 1. Defined Terms. Unless otherwise defined herein:
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"Global Board of Directors" shall mean the board of directors of
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Global or any successor thereof.
"Global Combined Voting Power" at any measurement date shall mean the
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total number of votes which could have been cast in an election of members
of the Global Board of Directors had a meeting of the stockholders of
Global (or any successor thereof) been duly held based upon a record date
as of the measurement date if all Global Voting Securities then outstanding
and entitled to vote at such meeting were present and voted to the fullest
extent possible at such meeting.
"Global Voting Securities" shall mean, collectively, (i) Global Common
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Stock, (ii) any other securities entitled, or that may be entitled, to vote
generally for the election of members of the Global Board of Directors and
(iii) any other securities, warrants or options or rights of any nature
(whether or not issued by Global) that are convertible into, exchangeable
for, or exercisable for, or otherwise give the holder thereof any rights in
respect of (whether or not subject to the passage of time, contingencies or
contractual
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restrictions or any combination thereof), any security described in clause
(i) or (ii) of this definition (including, without limitation, Frontier
Corporation common stock).
"Group" means two or more persons acquiring, holding, voting or
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disposing of securities which would constitute a "person" within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
"person" means an individual, partnership, corporation, business
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trust, joint stock company, trust, unincorporated association, joint
venture or other entity of whatever nature.
"Reorganization Transaction" means (i) any merger, consolidation,
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recapitalization, liquidation or other business combination transaction
involving Global or any of its subsidiaries (or any successors to any of
such entities), (ii) any tender offer or exchange offer for any securities
of Global or any of its subsidiaries (or any successors to any of such
entities) or (iii) any sale or other disposition of assets of Global or any
of its subsidiaries (or any successors to any of such entities) in a single
transaction or in a series of related transactions in each of the foregoing
cases constituting individually or in the aggregate 5% or more of the
assets of Global (or any successor), or 5% or more of the then outstanding
Global Voting Securities.
"Standstill Period" shall mean the period commencing on the date
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hereof and continuing until the earlier of (a) the tenth anniversary of the
date hereof and (b) the Effective Time (as defined in the Merger
Agreement); provided, that if the Merger Agreement is terminated by Global
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pursuant to Section 9.1(b) or 9.1(h)(i) or by USW pursuant to Section
9.1(e), 9.1(d)(ii)(A) or 9.1(h)(iii), the Standstill Period shall expire on
the fifth anniversary of the date hereof.
Section 2. Covenants with Respect to Global Voting Securities and
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Other Matters.
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2.1 Acquisition of Global Voting Securities. During the Standstill
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Period, except for shares of Global Common Stock acquired pursuant to the Tender
Offer and Purchase Agreement, USW will not, and will cause its affiliates (other
than Global) not to, directly or indirectly, acquire, offer to acquire, agree to
acquire, become the beneficial owner of or obtain any rights in respect of any
Global Voting Securities; provided, that neither USW nor any of its affiliates
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shall be prohibited from buying Global Voting Securities directly from Global.
2.2 Disposition of Global Voting Securities. Until the later of the
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termination of the Merger Agreement and the termination of the Frontier Merger
Agreement (as defined in the Voting Agreement) (or the consummation of the
transactions pursuant thereto), USW will not, and will cause its affiliates not
to, directly or indirectly, sell, transfer any beneficial interest in, pledge,
lend, hypothecate or otherwise dispose of any Global Voting Securities (each
transaction described above, a "Transfer"). Subject in all respects to the
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preceding sentence, during the Standstill Period, USW will not, and will cause
its affiliates not to, directly or indirectly, Transfer
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any Global Voting Securities in any transaction that to the knowledge of USW
would result in any person or Group having, upon consummation of such Transfer
transaction, directly or indirectly, beneficial ownership of or the right to
acquire beneficial ownership of such number of Global Voting Securities as
represent more than 5% of the Global Combined Voting Power; provided that USW
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shall be permitted to Transfer Global Voting Securities in any transaction that
to the knowledge of USW would result in a Transfer to any person or Group that
would have, upon consummation of such Transfer transaction, directly or
indirectly, beneficial ownership of or the right to acquire beneficial ownership
of such number of Global Voting Securities as represent more than 5% but less
than 9.5% of the Global Combined Voting Power so long as such person or Group
agrees in writing to be bound by the terms of this Agreement. Notwithstanding
the preceding sentence, USW shall be permitted to sell, transfer or otherwise
dispose of Global Voting Securities (a) to one or more of its affiliates that is
directly or indirectly controlled by it (each, a "Permitted Transferee"), (b)
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pursuant to a tender or exchange offer for Global Voting Securities which is not
opposed by the Global Board of Directors, (c) in a merger, recapitalization,
business combination or other similar transaction or (d) as expressly provided
in Section 4.1 of the Tender Offer and Purchase Agreement; provided, that in the
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case of clause (a) the Permitted Transferee shall agree in writing to be bound
by the terms of this Agreement. USW shall not directly or indirectly transfer
all or any substantial part of the capital stock of any subsidiary which
purchases shares of Global Common Stock in accordance with the Tender Offer and
Purchase Agreement or any Permitted Transferee without first transferring to USW
or a Permitted Transferee of USW any Global Voting Securities held by such
subsidiary or Permitted Transferee.
2.3 Proxy Solicitations, Voting, etc. (a) During the Standstill
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Period, USW will not, and will cause its affiliates not to, directly or
indirectly, solicit proxies, assist any other person in any way, directly or
indirectly, in the solicitation of proxies, or otherwise become a "participant"
in a "solicitation," or assist any "participant" in a "solicitation" (as such
terms are defined in Rule 14a-1 of Regulation 14A under the Exchange Act as in
effect on the date of this Agreement) in opposition to the recommendation or
proposal of the Global Board of Directors, or submit any proposal for the vote
of stockholders of Global or any successor thereof or recommend or request or
induce or attempt to induce any other person to take any such actions, or seek
to advise, encourage or influence any other Person with respect to the voting of
Global Voting Securities, unless in each case it obtains the prior approval of
the Global Board of Directors to do so as evidenced by a formal resolution
adopted by the Global Board of Directors and recorded in its minutes.
(b) In furtherance of USW's obligations pursuant to Section 2.3(a),
during the Standstill Period USW shall, and shall cause its affiliates to, at
any annual or special meeting of stockholders at which members of the Global
Board of Directors are to be elected or in connection with a solicitation of
consents through which members of the Global Board of Directors are to be
elected, vote or cause to be voted (or give or cause to be given a written
consent or proxy with respect to) all Global Voting Securities beneficially
owned by it in favor of the election to the Global Board of Directors of the
individuals recommended by the Global Board of Directors.
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2.4 No Voting Trusts, Pooling Agreements, or Formation of Groups.
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Except as contemplated by the Voting Agreement, during the Standstill Period,
USW will not, and will cause its affiliates not to, directly or indirectly, join
in or in any other way participate in a pooling agreement, syndicate, voting
trust or other Group with respect to Global Voting Securities or otherwise act
in concert with any other person, for the purpose of acquiring, holding, voting
or disposing of Global Voting Securities.
2.5 Limitation on Various Other Actions. During the Standstill
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Period, USW will not, and will cause its affiliates not to, take any action,
alone or in concert with any other person, (a) to seek to effect a change in
control of Global, its successors or any of its affiliates, (b) to seek to
effect a Reorganization Transaction with respect to Global, its successors or
any of its affiliates, (c) to seek to effect any control or influence over the
management of Global, its successors or any of its affiliates, the Global Board
of Directors or the policies of Global, its successors or any of its affiliates,
(d) to advise, assist or encourage or finance (or assist or arrange financing to
or for) any other person in connection with any of the matters restricted by, or
to otherwise seek to circumvent the limitations of the provisions of, Section 2
of this Agreement (any such action described in clause (a), (b), (c) or (d) of
this Section 2.5, a "Global Transaction Proposal"), (e) to present to Global,
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its stockholders or any third party any proposal that can reasonably be expected
to result in a Global Transaction Proposal or in an increase in the Global
Combined Voting Power represented by Global Voting Securities beneficially owned
in the aggregate by USW and its successors or any of their affiliates that would
be prohibited by Section 2.1, (f) to publicly suggest or announce its
willingness or desire to engage in a transaction or group of transactions or
have another person engage in a transaction or group of transactions that would
result in (i) a Global Transaction Proposal or (ii) an increase in the Global
Combined Voting Power represented by Global Voting Securities beneficially owned
in the aggregate by USW and its respective successors or any of their affiliates
that would be restricted by Section 2.1, (g) to initiate, request, induce,
encourage or attempt to induce or give encouragement to any other person to
initiate, or otherwise provide assistance to any person who has made or is
contemplating making, any proposal that can reasonably be expected to result in
(i) a Global Transaction Proposal or (ii) an increase in the Global Combined
Voting Power represented by Global Voting Securities beneficially owned in the
aggregate by USW and its successors or any of their affiliates that would be
restricted by Section 2.1, or (h) to request a waiver, modification or amendment
of any of the provisions of Section 2 of this Agreement.
2.6 Representation. During the Standstill Period, if requested by
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Global, USW shall and shall cause each of its Permitted Transferees to be
present, in person or represented by proxy, at all meetings of stockholders of
Global at which members of the Global Board of Directors are to be elected so
that all Global Voting Securities beneficially owned by USW and each such
Permitted Transferee shall be counted for the purpose of determining the
presence of a quorum at such meetings and for voting such securities.
Section 3. Term of Agreement. This Agreement shall terminate on the
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last day of the Standstill Period.
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Section 4. Remedies. Each of the parties hereto acknowledges and
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agrees that (i) the provisions of this Agreement are reasonable and necessary to
protect the proper and legitimate interests of Global, and (ii) Global would be
irreparably damaged in the event any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that Global shall be entitled to preliminary
and permanent injunctive relief to prevent breaches of the provisions of this
Agreement by USW or any of its Permitted Transferees without the necessity of
proving actual damages or of posting any bond, and to enforce specifically the
terms and provisions hereof and thereof, which rights shall be cumulative and in
addition to any other remedy to which Global may be entitled hereunder or at law
or equity.
Section 5. General Provisions.
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5.1 Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
facsimile, telegram or telex or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
If to USW:
U S West, Inc.
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
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Attention: ▇▇▇▇▇▇ ▇. Block
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Global:
Global Crossing Ltd.
Wessex House
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Attention: K. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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and
Global Crossing Ltd.
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Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
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Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
5.2 Severability. If any term or other provision of this Agreement
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is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
5.3 Entire Agreement; Assignment. Except as may otherwise be agreed
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by the parties, this Agreement, the Voting Agreement, the Tender Offer and
Purchase Agreement and the Merger Agreement constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and undertakings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof. Neither this Agreement
nor any of the rights, interests or obligations under this Agreement shall be
assigned, in whole or in part, by operation of law or otherwise by any of the
parties without the prior written consent of the other parties.
5.4 Parties in Interest. This Agreement shall be binding upon and
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inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
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5.5 Governing Law. This Agreement shall be governed by, and
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construed in accordance with, the internal laws of the State of New York.
5.6 Headings. The descriptive headings contained in this Agreement
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are included for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
5.7 Counterparts. This Agreement may be executed in two or more
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counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
5.8. Submission to Jurisdiction. Each of the parties hereto (i)
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consents to submit itself to the personal jurisdiction of any Federal court
located in the State of New York or any New York state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated by
this Agreement, (ii agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
(ii agrees that it will not bring any action relating to this Agreement or any
of the transactions contemplated by this Agreement in any court other than a
Federal or state court sitting in the State of New York and (iv consents to
service being made through the notice procedures set forth in Section 5.1.
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IN WITNESS WHEREOF, USW and Global have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
U S WEST, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: President and Chief Executive Officer
GLOBAL CROSSING LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title: Chief Executive Officer
