Exhibit 10.1


 


EXECUTION COPY


 


IN
THE UNITED STATES DISTRICT COURT


FOR THE DISTRICT OF
COLORADO


 


Civil Action No. 01-CV-1451-REB-CBS


 


(Consolidated with Civil Action
Nos. 01-RB-1472, 01-RB-1527, 01-RB-1616. 01-RB-1799, 01-RB-1930, 01-RB-2083, 02-RB-333,
02-RB-374, 02-D-507, 02-RB-658, 02-RB-755, 02-RB-798, and 04-RB-238)


 


In re QWEST COMMUNICATIONS INTERNATIONAL INC. SECURITIES LITIGATION


 


STIPULATION OF PARTIAL SETTLEMENT


 


This Stipulation of Partial Settlement dated
as of November 21, 2005 (the “Stipulation”), is made and entered into
pursuant to Rule 23 of the Federal Rules of Civil Procedure and
contains the terms of a settlement by and among the Settling Parties to the
above-entitled Litigation: (i) the Lead Plaintiffs (on behalf of
themselves and each of the Class Members), by and through Lead Counsel;
and (ii) the Settling Defendants, by and through their counsel of record
in the Litigation.  The Stipulation is
intended by the Settling Parties to resolve fully, finally and forever
discharge and settle the Released Claims, upon and subject to the terms and
conditions hereof and subject to the approval of this Court.  All capitalized terms in this Stipulation
shall have the meanings specified for them herein.


 


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I.                 THE
LITIGATION


 


On July 27, 2001, New England Healthcare
Employees Pension Fund filed a class action complaint, entitled New England Health Care Employees Fund v. Qwest et
al., Civil Action No. 01-N-1451-REB-CBS, in the United States
District Court for the District of Colorado, alleging various violations of the
federal securities laws.  A number of
similar class action complaints were subsequently filed in the United States
District Court for the District of Colorado. 
Pursuant to the Private Securities Litigation Reform Act of 1995, all of
the related class action complaints were consolidated under the first filed
case No. 01-N-1451; New England Healthcare Employees Pension Fund,
Clifford Mosher, Tejinder Singh, and Satpal Singh were appointed Lead
Plaintiffs; and a consolidated class action complaint was filed.  Lead Plaintiffs filed amended complaints on December 3,
2001, April 5, 2002, May 2, 2002, August 21, 2002, and February 6,
2004.  In the Fifth Amended Complaint,
the named defendants in the Litigation were Qwest Communications International
Inc., Arthur Andersen LLP, Joseph Nacchio, Philip Anschutz, Robin Szeliga,
Robert Woodruff, Stephen Jacobsen, Drake Tempest, Marc Weisberg, James Smith,
Lewis Wilks, Craig Slater, Afshin Mohebbi, Gregory Casey, and Vinod Khosla.  The causes of action asserted in the
consolidated amended class action complaint were for violations of the
Securities Act of 1933 and the Securities Exchange Act of 1934.  Lead Plaintiffs sought to recover money
and/or other relief on behalf of themselves and a putative class.


 


On November 4, 2002, Lead Plaintiffs
moved for a temporary restraining order and a preliminary injunction to prevent
Qwest from selling certain assets, or, in the


 


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alternative,
to place the proceeds from that sale in trust. 
Qwest opposed that motion.  The
Court denied Lead Plaintiffs’ request for a temporary restraining order, and
following supplemental briefing and a hearing at which both sides presented evidence,
denied Lead Plaintiffs’ request for a preliminary injunction.


 


Defendants moved to dismiss Lead Plaintiffs’
various consolidated amended complaints, and Lead Plaintiffs opposed Defendants’
motions.  Defendants’ motions to dismiss
were granted in part and denied in part, with some Individual Defendants being
dismissed from the Litigation.  In other
instances, the claims or allegations against Defendants were narrowed.


 


Those Defendants not dismissed from the
Litigation filed answers denying all material allegations of Lead Plaintiffs’
Fifth Amended Complaint and asserted various defenses.  Lead Plaintiffs and Defendants engaged in
extensive discovery, which has been coordinated with discovery in several other
state and federal securities actions.  For
example, Qwest has produced more than 8,000,000 pages of documents, and
Lead Plaintiffs and Defendants have conducted more than 50 depositions.  Those depositions began in early 2005.


 


On March 14, 2005, Lead Plaintiffs filed
a motion for class certification, which Defendants opposed.  Upon Final Settlement Approval, this
Stipulation renders Lead Plaintiffs’ motion for class certification moot as to
the Settling Defendants.


 


II.             DEFENDANTS’
DENIALS OF WRONGDOING AND LIABILITY


 


The Defendants have denied and continue to
deny each and all of the claims and contentions alleged in the Litigation.  The Defendants expressly have denied and


 


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continue to
deny all charges of wrongdoing or liability against them arising out of any of
the conduct, statements, acts or omissions alleged, or that could have been
alleged, in the Litigation.  The
Defendants also have denied and continue to deny, inter alia, the allegations that the Lead Plaintiffs or the Class have
suffered any damages, and that the Lead Plaintiffs or the Class were
harmed by the conduct alleged in the Litigation.


 


Nonetheless, the Settling Defendants have
concluded that further conduct of the Litigation would be protracted and
expensive, and that it is desirable that the Litigation be fully and finally
settled in the manner and upon the terms and conditions set forth in this
Stipulation.  The Settling Defendants
also have taken into account the uncertainty and risks inherent in any
litigation, especially in complex cases like this Litigation.  The Settling Defendants have, therefore,
determined that it is desirable and beneficial to them that the Litigation be
settled in the manner and upon the terms and conditions set forth in this
Stipulation.


 


This Stipulation, and any and all exhibits or
documents referred to herein, or any terms or representations herein or
therein, or any action taken to carry out this Stipulation, are not, and shall
in no event be construed or be deemed to be, evidence of, or an admission or a
concession by the Defendants of any fault, liability, or damages
whatsoever.  The Defendants deny any and
all wrongdoing of any kind whatsoever and deny any liability to Lead Plaintiffs
or the Class Members.  The
Defendants do not concede any infirmity in the defenses they have asserted in
the Litigation, nor are any such defenses waived.  It is the intent of Lead Plaintiffs and the
Settling Defendants that this Stipulation not be used for any purpose of any
kind other than to enforce the


 


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provisions of
this Stipulation or the provisions of any related agreement, release, or
exhibit hereto, or in order to support a defense of res judicata, collateral estoppel, accord and satisfaction,
release, or other theory of claim or issue preclusion or similar defense.  Therefore, pursuant to this Stipulation, as
ordered by this Court, and pursuant to Federal Rule of Evidence 408, any
other Federal Rule of Evidence, the rules of evidence of the various
states, the rules of evidence followed by any quasi-judicial bodies,
including regulatory and self-regulatory organizations, and any other
applicable law, rule or regulation, the Settling Parties agree that the
fact of entering into or carrying out this Stipulation, the exhibits hereto,
and any negotiations and proceedings related hereto, and the settlement itself,
shall not be construed as, offered into evidence as, or deemed to be evidence
of, an admission or concession of liability by or an estoppel against any Defendant,
a waiver of any applicable statute of limitations or repose, and shall not be
offered by a party hereto into evidence, or considered, in any action or
proceeding against any Defendant in any judicial, quasi-judicial,
administrative agency, regulatory or self-regulatory organization, or other
tribunal, or proceeding for any purpose whatsoever, other than to enforce the
provisions of this Stipulation or the provisions of any related agreement,
release, or exhibit hereto, or in order to support a defense of res judicata, collateral estoppel, accord
and satisfaction, release or other theory of claim or issue preclusion or
similar defense.


 


Notwithstanding the foregoing, based upon the
publicly available information at the time of this Stipulation, Settling
Defendants agree that they will not contest that the Litigation was filed in
good faith, was not frivolous, and is being settled voluntarily in an


 


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amount and
manner that reasonably reflects the risks posed by the claims against the
Settling Defendants collectively.


 


III.         CLAIMS
OF THE LEAD PLAINTIFFS AND BENEFITS OF SETTLEMENT


 


The Lead Plaintiffs believe that the claims
asserted in the Litigation have merit and believe that the evidence developed
to date supports the claims.  However,
the Lead Plaintiffs and Lead Counsel recognize and acknowledge the expense and
length of continued proceedings necessary to prosecute the Litigation against
the Settling Defendants through trial and appeals.  The Lead Plaintiffs and Lead Counsel also
have taken into account the uncertain outcome and the risk of any litigation,
especially in complex actions such as this Litigation, as well as the
difficulties and delays inherent in such litigation.  The Lead Plaintiffs and Lead Counsel are also
mindful of the inherent problems of proof under and possible defenses to the
violations asserted in the Litigation. 
The Lead Plaintiffs and Lead Counsel believe that the settlement set
forth in the Stipulation confers substantial benefits upon the Class Members.  Based on their evaluation, the Lead
Plaintiffs and Lead Counsel have determined that the settlement set forth in
the Stipulation is in the best interests of the Class.


 


IV.        TERMS
OF STIPULATION AND AGREEMENT OF SETTLEMENT


 


NOW, THEREFORE, IT IS HEREBY STIPULATED AND
AGREED by and among the Lead Plaintiffs (for themselves and the Class Members)
and the Settling Defendants, by and through their respective counsel of record,
that, subject to the approval of the Court, the Litigation and the Released
Claims shall be finally and fully compromised, settled and released, and the
Litigation shall be dismissed with prejudice,


 


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as to all
Settling Defendants, upon and subject to the terms and conditions of this
Stipulation, as follows.


 


1.              Definitions


 


As used in the Stipulation the following
terms have the meanings specified below:


 


1.1.                              “Authorized
Claimant” means any Class Member whose claim for recovery has been allowed
pursuant to the terms of the Stipulation


 


1.2.                              “Arthur
Andersen LLP” means Arthur Andersen LLP, and all of its respective past and
present subsidiaries, parents, successors and predecessors, and all of its
current and former partners, members, principals, participating principals,
national directors, managing or other agents, management personnel, officers,
directors, shareholders, administrators, servants, employees, consultants,
advisors, attorneys, accountants, representatives, successors and assigns,
along with the heirs, spouses, executors, administrators, insurers, reinsurers,
representatives, estates, successors and assigns of any such person or
entities.


 


1.3.                              “Arthur
Andersen Released Parties” means Arthur Andersen LLP, AWSC Société Coopérative,
en liquidation, and all of their respective past and present subsidiaries,
parents, successors and predecessors, member firms, affiliates, related
entities, and divisions,  and all of
their respective current and former partners, members, principals,
participating principals, national directors, managing or other agents,
management personnel, officers, directors, shareholders, administrators,
servants, employees, consultants, advisors, attorneys, accountants,
representatives, successors


 


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and assigns, along with the heirs, spouses,
executors, administrators, insurers, reinsurers, representatives, estates,
successors and assigns of any such person or entities.


 


1.4.                              “Claimant”
means any Class Member who files a Proof of Claim in such form and manner,
and within such time, as the Court shall prescribe.


 


1.5.                              “Claims
Administrator” means Gilardi & Co. LLC.


 


1.6.                              “Class”
means all persons who purchased or otherwise acquired Qwest publicly traded
securities (including common stock, bonds, and options) from May 24, 1999
through July 28, 2002 (“Class Period”).  Excluded from the Class are Defendants
and any Persons affiliated with or related to any Defendant.  For purposes of this Paragraph, the persons
affiliated with or related to any Defendant are members of the immediate family
of each Individual Defendant, any entity in which any Defendant has a
controlling interest, officers and directors of Qwest and its subsidiaries and
affiliates, partners, shareholders, and members of Arthur Andersen LLP, and the
legal representatives, heirs, predecessors, successors and assigns of any such
excluded party.  Also excluded from the Class are
those Persons who request exclusion from the Class in such form and
manner, and within such time, as the Court shall prescribe.  Also excluded from the Class is any
current or former officer, director, employee, or agent of Qwest who has been
sued by the United States Securities and Exchange Commission in connection with
such Person’s affiliation with or conduct related to Qwest.


 


1.7.                              “Class Member”
means a Person who falls within the definition of the Class.


 


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1.8.                              “Defendants”
means Qwest Communications International Inc., Arthur Andersen LLP, and the
Individual Defendants.


 


1.9.                              “Effective
Date” means the first date by which all of the events and conditions specified
in ¶ 8.1 of the Stipulation have occurred.


 


1.10.                        “Escrow
Agent” means Lead Counsel.


 


1.11.                        “Final”
means: (i) if no appeal is timely filed, the expiration date of the time
for the filing or noticing of an appeal from the Judgment; or (ii) if an
appeal is timely filed, (a) the later of the date of final affirmance on
an appeal of the Judgment, the expiration of the time for a petition for a writ
of certiorari to review the affirmance, a denial of certiorari that has been
timely sought or, if certiorari is granted, the date of final affirmance of the
Judgment following review pursuant to that grant; or (b) the date of final
dismissal of any appeal from the Judgment or the final dismissal of any
proceeding on certiorari to review the Judgment.


 


1.12.                        “Final Settlement
Approval” means an order by the United States District Court for the District
of Colorado finally approving the terms of this Stipulation pursuant to FED.R.CIV.P.
23(e)(1)(A).


 


1.13.                        “Individual
Defendants” means Joseph Nacchio, Philip Anschutz, Robin Szeliga, Robert
Woodruff, Stephen Jacobsen, Drake Tempest, Marc Weisberg, James Smith, Lewis
Wilks, Craig Slater, Afshin Mohebbi, Gregory Casey, and Vinod Khosla.


 


1.14.                        “Individual
Settling Defendants” means Philip Anschutz, Robin Szeliga, Stephen Jacobsen,
Drake Tempest, Marc Weisberg, James Smith, Lewis Wilks, Craig Slater, Afshin
Mohebbi, Gregory Casey, and Vinod Khosla.


 


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1.15.                        “Judgment”
means the judgment to be rendered by the Court, substantially in the form
attached hereto as Exhibit B.


 


1.16.                        “Lead
Counsel” means Lerach, Coughlin, Stoia, Geller, Rudman & Robbins
LLP,  655 W. Broadway, Suite 1900,
San Diego, CA 92101-3301.


 


1.17.                        “Lead
Plaintiffs” means New England Healthcare Employees Pension Fund, Satpal Singh,
Tejinder Singh, and Clifford Mosher.


 


1.18.                        “Litigation”
means In re Qwest Communications Securities Litigation, Civil
Action No. 01-CV-1451-REB-CBS, including all putative class actions
consolidated therein.


 


1.19.                        “Net
Settlement Fund” means the Settlement Fund, together with any interest earned
thereon, less (i) any taxes, (ii) the cash allocated to Lead Counsel
for attorneys’ fees and expenses pursuant to any Fee and Expense Application (defined
in ¶ 7.1, below) approved by the Court pursuant to ¶¶ 7.1 and 7.2 hereof, and (iii) the
cash allocated to the Class Notice and Administration Fund pursuant to ¶
2.8 hereof.


 


1.20.                        “Non-Settling
Defendant” means Joseph P. Nacchio (“Nacchio”) and Robert S. Woodruff (“Woodruff”),
or either of them.  Nacchio and Woodruff
are expressly excluded from the definitions of Qwest, Related Parties, Released
Persons, Settling Defendants, and Settling Parties.


 


1.21.                        “Person”
means an individual, corporation, partnership, limited partnership, limited
liability partnership (LLP), limited liability corporation (LLC), association,
joint stock company, estate, legal representative, trust, unincorporated


 


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association, and any business or legal entity
and their spouses, heirs, predecessors, successors, representatives, or
assignees.


 


1.22.                        “Plan of
Allocation” means a plan or formula of allocation of the Settlement Fund
whereby the Net Settlement Fund shall be distributed to Authorized Claimants
after payment of expenses of notice and administration of the settlement, Taxes
and Tax Expenses and such attorneys’ fees, costs, expenses and interest as may
be awarded by the Court.  Any Plan of
Allocation is not part of the Stipulation and the Settling Defendants and the
Related Parties shall have no liability with respect thereto.


 


1.23.                        “Preliminary
Settlement Approval” means an order by the United States District Court for the
District of Colorado preliminarily approving the terms of this Stipulation and
ordering that notice be issued to the Class pursuant to FED.R.CIV.P.
23(e)(1)(B).


 


1.24.                        “Qwest”
means Qwest Communications International Inc., any and all successors,
subsidiaries, and affiliates of Qwest Communications International Inc.,  and any and all current and former officers,
directors, employees and agents of any of them, as well as any predecessors of
Qwest (including but not limited to U S WEST and any successors, subsidiaries,
and affiliates thereof) and their successors, subsidiaries, and affiliates, and
any and all current and former officers, directors, employees and agents of any
of them.  Notwithstanding the foregoing,
neither Nacchio nor Woodruff is included in the definition of Qwest.


 


1.25.                        “Related
Parties” means each of a Settling Defendant’s past or present directors,
officers, partners, members, employees, controlling shareholders, attorneys,


 


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accountants or auditors, banks or investment
banks, advisors, personal or legal representatives, insurers, reinsurers, predecessors,
successors, parents, subsidiaries, divisions, assigns, spouses, heirs, related
or affiliated entities, any partnership in which a Settling Defendant is a
general or limited partner, any entity in which a Settling Defendant has a
controlling interest, any member of an Individual Settling Defendant’s
immediate family, or any trust or foundation of which any Settling Defendant is
the settlor or which is for the benefit of any Individual Settling Defendant
and/or member(s) of his or her family. 
Notwithstanding the foregoing, neither Nacchio nor Woodruff is included
in the definition of Related Parties.


 


1.26.                        “Released
Claims” shall collectively mean all claims, demands, rights, liabilities and
causes of action of every nature and description whatsoever, whether based in
law or equity, on federal, state, local, foreign, statutory or common law, or
any other law, rule, or regulation (including, but not limited to, all claims
arising out of or relating to any acts, omissions, disclosures, public filings,
registration statements, financial statements, audit opinions, or statements by
the Settling Defendants, including without limitation, claims for negligence,
gross negligence, constructive or actual fraud, negligent misrepresentation,
conspiracy, or breach of fiduciary duty), whether known or unknown, whether or
not concealed or hidden, accrued or not accrued, foreseen or unforeseen,
matured and not matured, that were asserted or that could have been asserted directly,
indirectly, representatively or in any other capacity, at any time, in any
forum by Lead Plaintiffs, the Class Members, or the successors or assigns
of any Lead Plaintiff or Class Member, or any of them against the Released
Persons arising out of,


 


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based upon, or related in any way to: (a) the
purchase, acquisition, sale, or disposition of Qwest securities by any Lead
Plaintiffs or any Class Member during the Class Period and the
allegations that were made or could have been made in the Litigation; (b) the
purchase or other acquisition of, the retention of, the sale or other
disposition of, or any other transaction involving Qwest securities by any of
the Released Persons during the Class Period; or (c) the settlement
or resolution of the Litigation (including, without limitation, any claim for
attorneys’ fees by Lead Plaintiffs or any Class Member).  Released
Claims shall also include claims related to any tax effects or tax liabilities
(including any interest, penalties and representation costs) arising out of
this Stipulation or any payment or transfer made pursuant to this Stipulation.  Released Claims shall also include Unknown
Claims otherwise subject to this provision. 
Released Claims shall not include the claims asserted in the Second
Amended and Consolidated Complaint filed in the United States District Court
for the District of Colorado on May 21, 2003 in In re Qwest
Savings and Retirement Plan ERISA Litigation 02-CV-00464-REB-CBS
(and all cases consolidated therein).


 


1.27.                        “Released
Persons” means each and all of the Settling Defendants and their Related
Parties, and the Arthur Andersen Released Parties.  Notwithstanding the foregoing, neither
Nacchio nor Woodruff is included in the definition of Released Persons.


 


1.28.                        “SEC
Distribution Fund” means those funds paid by Qwest Communications International
Inc. pursuant to the Final Judgment as to Defendant Qwest Communications
International Inc. in Securities and
Exchange Commission v.


 


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Qwest Communications
International Inc., Civil Action No. 04-7-2179 (Oct. 21,
2004), into an account in the Court Registry Investment System initially
established in Securities and Exchange
Commission v. Augustine Cruciotti, Civil Action No. 04-D-1267
(MJW) (D. Colo.), that are made available for distribution to the Class pursuant
to the Plan of Allocation, together with such other funds paid into that same
account by other Persons pursuant to any separate final judgments or agreements
that those Persons have entered into or may enter into with the Securities and
Exchange Commission that are also made available for distribution to the Class pursuant
to the Plan of Allocation.


 


1.29.                        “Settlement
Fund” means the principal amount of $400,000,000.00 (FOUR HUNDRED million
dollars) in cash plus all interest earned thereon pursuant to this Stipulation and
the SEC Distribution Fund.


 


1.30.                        “Settling
Defendants” means, collectively, Qwest, Arthur Andersen LLP, and each of the
Individual Settling Defendants. 
Notwithstanding the foregoing, neither Nacchio nor Woodruff is included
in the definition of Settling Defendant.


 


1.31.                        “Settling
Parties” means, collectively, each of the Settling Defendants and the Lead
Plaintiffs on behalf of themselves and the Class Members.  Notwithstanding the foregoing, neither
Nacchio nor Woodruff is included in the definition of Settling Parties.


 


1.32.                        “Unknown
Claims” means any claims that any Class Member or Lead Plaintiffs do not
know or suspect to exist in his, her, its or their favor at the time of the
release of the Released Persons which, if known by him, her, it, or them might
have affected his, her, its or their settlement with and release of the
Released Persons, or


 


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might have affected his, her, its, or their
decision not to object to this settlement. 
With respect to any and all Released Claims, the Settling Parties
stipulate and agree that, upon the Effective Date, the Lead Plaintiffs shall
expressly, and each of the Class Members shall be deemed to have, and by
operation of the Judgment shall have, expressly waived the provisions, rights
and benefits of California Civil Code §1542, which provides:


 


A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.


 


The Lead Plaintiffs shall expressly, and each
of the Class Members shall be deemed to have, and by operation of the
Judgment shall have, expressly waived any and all provisions, rights and
benefits conferred by any law, or principle of common law, which is similar,
comparable or equivalent to California Civil Code §1542.  The Lead Plaintiffs and Class Members
may hereafter discover facts in addition to or different from those that he,
she, it or they now know or believe to exist or to be true with respect to the
subject matter of the Released Claims, but the Lead Plaintiffs shall have, and
each Class Member, upon the Effective Date, and by operation of the
Judgment shall be deemed to have, fully, finally, and forever settled and
released any and all Released Claims, known or unknown, suspected or
unsuspected, contingent or non-contingent, whether or not concealed or hidden,
which now exist, or heretofore have existed, upon any theory of law or equity
now existing or coming into existence in the future, including, but not limited
to, conduct that is negligent, intentional, with or without malice, or a


 


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breach of any duty, law or rule, without
regard to the subsequent discovery or existence of such different or additional
facts.  The Lead Plaintiffs acknowledge,
and the Class Members shall be deemed by operation of the Judgment to have
acknowledged, that the foregoing waiver was separately bargained for and a material
element of the settlement of which this release is a part.


 


2.              The
Settlement


 


a.                                       The
Settlement Fund


 


2.1                                 Qwest
Communications International Inc. (on behalf of itself and the Settling
Defendants and Released Persons) shall cause to be transferred $100,000,000.00
(one hundred million) in cash to an account controlled by the Escrow Agent no
later than 30 days after the Preliminary Settlement Approval.  If all or part of such $100 million is not
transferred to an account controlled by the Escrow Agent within 30 days after
the Preliminary Settlement Approval, such un-transferred amounts shall accrue
interest at rate of 7% annually until such time as the entire $100 million is
transferred.  Further, if all or part of
such $100 million is not transferred to an account controlled by the Escrow
Agent within 30 days after the Preliminary Settlement Approval, Lead Plaintiffs
may terminate this settlement; provided however, that the Lead Plaintiffs shall
provide Qwest Communications International Inc. written notice of their intent
to terminate, and allow Qwest Communications International Inc. 30 days to
cure.  Qwest Communications International
Inc. (on behalf of itself and the Settling Defendants and Released Persons) shall
cause to be transferred a second $100,000,000.00 (one hundred million) in cash
to an account controlled by the Escrow


 


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Agent no later than 30 days
after Final Settlement Approval.  If all
or part of such $100 million is not transferred to an account controlled by the
Escrow Agent within 30 days after Final Settlement Approval, such
un-transferred amounts shall accrue interest at rate of 7% annually until such
time as the entire $100 million is transferred. 
Further, if all or part of such $100 million is not transferred to an
account controlled by the Escrow Agent within 30 days after Final Settlement
Approval, the Lead Plaintiffs may terminate this settlement; provided however,
that the Lead Plaintiffs shall provide Qwest Communications International Inc.
written notice of their intent to terminate, and allow Qwest Communications
International Inc. 30 days to cure.  Qwest
Communications International Inc. (on behalf of itself and the Settling
Defendants and Released Persons) shall cause to be transferred another $200,000,000.00
(two hundred million) in cash plus interest that shall accrue from 30 days
after Final Settlement Approval at a rate of 3.75% annually to an account
controlled by the Escrow Agent by January 15, 2007.  If all or part of such $200 million plus
interest that shall accrue from 30 days after Final Settlement Approval at a
rate of 3.75% annually is not transferred to an account controlled by the
Escrow Agent by January 15, 2007, such un-transferred amounts shall accrue
interest at a rate of 7% annually until such time as the entire $200 million plus
interest that shall accrue from 30 days after Final Settlement Approval at a
rate of 3.75% annually is transferred. 
Further, if all or part of such $200 million plus interest that shall
accrue from 30 days after Final Settlement Approval at a rate of 3.75% annually
is not transferred to an account controlled by the Escrow Agent by January 15,
2007, the Lead Plaintiffs may terminate this settlement; provided however, that
the Lead


 


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Plaintiffs shall provide Qwest
Communications International Inc. written notice of their intent to terminate,
and allow Qwest Communications International Inc. 30 days to cure.  Notwithstanding any provision of this
Stipulation, no Individual Settling Defendant is obligated to make any of the
payments provided for hereunder.


 


2.2                                 Lead
Plaintiffs and Qwest Communications International Inc. shall use their best
efforts to persuade the Securities and Exchange Commission to apply to the
United States District Court for the District of Colorado for an order
authorizing and requiring that the SEC Distribution Fund be transferred to an
account controlled by the Escrow Agent for distribution pursuant to this
Stipulation and the Plan of Allocation. 
If the Securities and Exchange Commission advises the Settling Parties
that it will not apply to the United States District Court for the District of
Colorado for an order authorizing and requiring that the SEC Distribution Fund
be transferred to an account controlled by the Escrow Agent pursuant to the
terms of the Stipulation, if the United States District Court does not approve
such application, or, if for any other reason, the SEC Distribution Fund is not
distributed to the Class pursuant to this Stipulation and Plan of
Allocation, Lead Plaintiffs shall have the right, but shall not be required to,
withdraw from and terminate this Stipulation. 
Lead Counsel shall not apply for a fee based on the SEC Distribution
Fund.


 


2.3                                 It
is expressly acknowledged that Arthur Andersen LLP has agreed to contribute $10
million (ten million dollars) in connection with and as full consideration for this
settlement and shall have no obligation to make any additional contribution
either to


 


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Lead Plaintiffs, the Class, or
any of the Settling Defendants in connection with this Stipulation.


 


b.                                       The
Escrow Agent


 


2.4                                 The
Escrow Agent may invest the Settlement Fund deposited pursuant to ¶¶ 2.1 and
2.2 hereof in instruments backed by the full faith and credit of the United
States Government or fully insured by the United States Government or an agency
thereof and shall reinvest the proceeds of these instruments as they mature in
similar instruments at their then-current market rates.  The Escrow Agent shall bear all risks related
to investment of the Settlement Fund.


 


2.5                                 The
Escrow Agent shall not disburse the Settlement Fund except as provided in the
Stipulation, by an order of the Court, or with the written agreement of counsel
for Qwest Communications International Inc.


 


2.6                                 Subject
to further order and/or direction as may be made by the Court, the Escrow Agent
is authorized to execute such transactions on behalf of the Class Members
as are consistent with the terms of the Stipulation.


 


2.7                                 All
funds held by the Escrow Agent shall be deemed and considered to be in custodia legis of the Court, and shall
remain subject to the jurisdiction of the Court, until such time as such funds
shall be distributed pursuant to the Stipulation and/or further order(s) of the
Court.


 


2.8                                 Within
five (5) days after payment of the initial $100 million to the account
controlled by the Escrow Agent pursuant to ¶ 2.1 hereof, the Escrow Agent may
establish a “Class Notice and Administration Fund,” and may deposit up to
$5 million


 


19





















 


from the Settlement Fund in
it.  The Class Notice and
Administration Fund may be used by Lead Counsel to pay costs and expenses
reasonably and actually incurred in connection with providing notice to the
Class, locating Class Members, soliciting claims, assisting with the
filing of claims, administering and distributing the Net Settlement Fund to
Authorized Claimants, processing Proof of Claim and Release forms, and paying
escrow fees and costs, if any.  The Class Notice
and Administration Fund may also be invested and earn interest as provided for
in ¶ 2.4 of this Stipulation.


 


3.              Taxes


 


3.1                                 (a)                                  Settling
Parties and the Escrow Agent agree to treat the Settlement Fund as being at all
times a “qualified settlement fund” within the meaning of Treas. Reg. §1.468B-1.  In addition, the Escrow Agent shall timely
make such elections as necessary or advisable to carry out the provisions of
this ¶ 3.1, including the “relation-back election” (as defined in Treas. Reg.
§1.468B-1) back to the earliest permitted date. 
Such elections shall be made in compliance with the procedures and
requirements contained in such regulations. 
It shall be the responsibility of the Escrow Agent to timely and
properly prepare and deliver the necessary documentation for signature by all
necessary parties, and thereafter to cause the appropriate filing to occur.


 


(b)                                 For
the purpose of § 468B of the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder, the “administrator” shall be the
Escrow Agent.  The Escrow Agent shall
timely and properly file all informational and other tax reports and returns
necessary or advisable with respect to the Settlement Fund (including without
limitation the returns described in Treas. Reg. §1.468B-2(k)).


 


20





















 


Such returns (as well as the
election described in ¶ 3.1(a) hereof) shall be consistent with this ¶ 3.1
and in all events shall reflect that all Taxes (including but not limited to
any federal, state, or local Taxes, and any estimated Taxes, interest or
penalties) on the income earned by the Settlement Fund shall be paid out of the
Settlement Fund as provided in ¶ 3.1(c) hereof.


 


(c)                                  All
(i) Taxes (including but not limited to any federal, state, or local
Taxes, and any estimated Taxes, interest or penalties) arising with respect to
the income earned by the Settlement Fund, including any Taxes or tax detriments
that may be imposed upon the Settling Defendants or their counsel with respect
to any income earned by the Settlement Fund for any period during which the
Settlement Fund does not qualify as a “qualified settlement fund” for federal
or state income tax purposes (“Taxes”), and (ii) expenses and costs
incurred in connection with the operation and implementation of this ¶ 3.1
(including, without limitation, expenses of tax attorneys and/or accountants
and mailing and distribution costs and expenses relating to filing (or failing
to file) the reports and returns described in this ¶ 3.1) (“Tax Expenses”),
shall be paid out of the Settlement Fund; in all events the Released Persons
shall have no liability or responsibility for the Taxes or the Tax
Expenses.  The Escrow Agent shall
indemnify and hold each of the Released Persons harmless for Taxes and Tax
Expenses (including, without limitation, Taxes payable by reason of any payment
made to or for the benefit of the Class hereunder, and Taxes payable by
reason of any such indemnification). 
Further, Taxes and Tax Expenses shall be treated as, and considered to
be, a cost of administration of the Settlement Fund and shall be timely paid by
the


 


21





















 


Escrow Agent out of the Settlement
Fund without prior order from the Court and the Escrow Agent shall be obligated
(notwithstanding anything herein to the contrary) to withhold from distribution
to Authorized Claimants any funds necessary to pay such amounts including the
establishment of adequate reserves for any Taxes and Tax Expenses (as well as
any amounts that may be required to be withheld under Treas. Reg. §1.468B-2(l)(2));
neither the Settling Defendants nor their counsel are responsible nor shall
they have any liability therefor.  Nothing
in this ¶ 3.1 or any part of this Stipulation shall constitute or be considered
to be tax advice by the Released Persons or any of their respective
counsel.  The Settling Parties agree to
cooperate with the Escrow Agent, each other, and their tax attorneys and
accountants to the extent reasonably necessary to carry out the provisions of
this ¶ 3.1.


 


(d)                                 Released
Persons have made no representation or warranty with respect to the tax
treatment by any Lead Plaintiffs or Class Member of any payment or
transfer made pursuant to this Stipulation or derived from or made pursuant to
the Settlement Fund.


 


(e)                                  For
the purpose of this ¶ 3.1, references to the Settlement Fund shall include both
the Settlement Fund and the Class Notice and Administration Fund and shall
also include any earnings thereon.


 


4.              Notice
Order and Settlement Hearing


 


4.1                                 As
soon as practical following execution of the Stipulation, Lead Counsel shall
submit the Stipulation together with its Exhibits to the Court and shall apply
for entry of an order (the “Notice Order”), substantially in the form of Exhibit A
hereto,


 


22





















 


requesting, inter alia, Preliminary Settlement
Approval set forth in the Stipulation, and approval for the mailing of a
settlement notice (the “Notice”) and publication of a summary notice,
substantially in the forms of Exhibits A-1 and A-3 attached hereto.  The Notice shall include the general terms of
the settlement set forth in the Stipulation, the proposed Plan of Allocation,
the general terms of the Fee and Expense Application, and the date of the
Settlement Hearing as defined below.


 


4.2                                 Lead
Counsel shall request that, after notice is given, the Court hold a hearing
(the “Settlement Hearing”) and provide Final Settlement Approval for the
Litigation with respect to the Settling Defendants as set forth herein.  At or after the Settlement Hearing, Lead
Counsel also will request that the Court approve the proposed Plan of
Allocation and the Fee and Expense Application.


 


5.              Releases


 


5.1                                 Upon
the Effective Date, Lead Plaintiffs and each of the Class Members shall be
deemed to have, and by operation of the Judgment shall have: (i) fully,
finally, and forever released, relinquished and discharged all Released Claims
(including Unknown Claims) against the Released Persons, whether or not such Class Member
executes and delivers the Proof of Claim and Release, (ii) covenanted not
to sue any of the Released Persons or otherwise to assert, directly or
indirectly, any of the Released Claims against any of the Released Persons, and
(iii) agreed to be forever barred and enjoined from doing so, in any court
of law or equity, or in any other forum.


 


23





















 


5.2                                 The
Proof of Claim and Release to be executed by Class Members shall release
all Released Claims against the Released Persons and shall be substantially in
the form contained in Exhibit A-2 attached hereto.


 


5.3                                 Upon
the Effective Date, each of the Released Persons shall be deemed to have, and
by operation of the Judgment shall have, fully, finally, and forever released,
relinquished and discharged each and all of the Lead Plaintiffs, Class Members,
and Lead Counsel from all claims (including Unknown Claims), arising out of,
relating to, or in connection with the institution, prosecution, assertion,
settlement, or resolution of the Litigation or the Released Claims.


 


5.4                                 Upon
the Effective Date, Qwest and its Related Parties and the Arthur Andersen
Released Parties shall be deemed to have, and by operation of the Judgment
shall have, fully, finally, and forever released, relinquished and discharged
one another from all claims (including Unknown Claims), arising out of,
relating to, or in connection with the Released Claims.


 


6.              Administration
and Calculation of Claims, Final Awards and Supervision and Distribution of
Settlement Fund


 


6.1                                 The
Claims Administrator, subject to such supervision and direction of the Court
and/or Lead Counsel as may be necessary or as circumstances may require, shall
administer and calculate the claims submitted by Class Members and shall
oversee distribution of the Net Settlement Fund to Authorized Claimants.


 


6.2                                 The
Settlement Fund shall be applied as follows:


 


24





















 


(a)                                  to
pay Lead Counsel’s attorneys’ fees and expenses with interest thereon (the “Fee
and Expense Award”), and to pay Lead Plaintiffs’ expenses (including lost
wages) incurred in representing the Class if and to the extent allowed by
the Court;


 


(b)                                 to
pay all the costs and expenses reasonably and actually incurred in connection
with providing notice, locating Class Members, soliciting Class claims,
assisting with the filing of claims, administering and distributing the Net
Settlement Fund to Authorized Claimants, processing Proof of Claim and Release
forms and paying escrow fees and costs, if any;


 


(c)                                  to
pay the Taxes and Tax Expenses described in ¶ 3.1 hereof; and


 


(d)                                 to
distribute the Net Settlement Fund to Authorized Claimants as allowed by the Stipulation,
the Plan of Allocation, and the Court.


 


6.3                                 Upon
the Effective Date and thereafter, and in accordance with the terms of the
Stipulation, the Plan of Allocation, or such further approval and further
order(s) of the Court as may be necessary or as circumstances may require, the
Net Settlement Fund shall be distributed to Authorized Claimants, subject to
and in accordance with ¶¶ 6.4-6.9 hereof.


 


6.4                                 Within
ninety (90) days after the mailing of the Notice or such other time as may be
set by the Court, each Person claiming to be an Authorized Claimant shall be
required to submit to the Claims Administrator a completed Proof of Claim and
Release, substantially in the form of Exhibit A-2 attached hereto, signed
under penalty of perjury and supported by such documents as are specified in
the Proof of Claim and Release and as are reasonably available to the
Authorized Claimant.


 


25





















 


6.5                                 Except
as otherwise ordered by the Court, all Class Members who fail timely to
submit a Proof of Claim and Release within such period, or such other period as
may be ordered by the Court, or otherwise allowed, shall be forever barred from
receiving any payments pursuant to the Stipulation and the settlement set forth
herein, but will in all other respects be subject to and bound by the
provisions of the Stipulation, the releases contained herein, and the
Judgment.  Notwithstanding the foregoing,
Lead Counsel may, in their discretion, accept for processing late submitted
claims so long as the distribution of the Net Settlement Fund to Authorized
Claimants is not materially delayed.


 


6.6                                 The
Net Settlement Fund shall be distributed to the Authorized Claimants
substantially in accordance with a Plan of Allocation to be described in the
Notice and approved by the Court.  If any
funds remain in the Net Settlement Fund by reason of un-cashed checks or
otherwise, then, after the Claims Administrator has made reasonable and
diligent efforts to have Class Members who are entitled to participate in
the distribution of the Net Settlement Fund cash their distribution checks, any
balance remaining in the Net Settlement Fund one (1) year after the
initial distribution of such funds shall be re-distributed to Class Members
who have cashed their checks and who would receive at least $10.00 from such
re-distribution, after payment of any taxes, and unpaid costs or fees incurred
in administering the Net Settlement Fund for such re-distribution.  If after six months after such
re-distribution any funds shall remain in the Net Settlement fund, then such
balance shall be returned to Colorado-based non-


 


26





















 


sectarian, not-for-profit
501(c)(3) organization(s) providing legal services or otherwise in the
appropriate public interest designated by Lead Counsel.


 


6.7                                 The
Released Persons shall have no responsibility for, interest in, or liability
whatsoever with respect to the investment or distribution of the Net Settlement
Fund, the Plan of Allocation, the determination, administration, or calculation
of claims, the payment or withholding of Taxes, or any losses incurred in
connection therewith, except that Lead Counsel agrees to confer with counsel
for Qwest prior to submission of the Plan of Allocation.


 


6.8                                 No
Person shall have any claim against Lead Counsel or the Claims Administrator,
or their counsel, based on distributions made substantially in accordance with
the Stipulation and the settlement contained therein, the Plan of Allocation,
or further order(s) of the Court.  No
Person shall have any claim whatsoever against Settling Defendants, Settling
Defendants’ counsel, or any Released Persons arising from or related to any
distributions made, or not made, from the Settlement Fund.


 


6.9                                 It
is understood and agreed by the Settling Parties that any proposed Plan of
Allocation of the Net Settlement Fund including, but not limited to, any
adjustments to an Authorized Claimant’s claim set forth therein, is not a part
of the Stipulation and is to be considered by the Court separately from the
Court’s consideration of the fairness, reasonableness and adequacy of the
settlement set forth in the Stipulation, and any order or proceeding relating
to the Plan of Allocation shall not operate to terminate or cancel the Stipulation
or affect the finality of the Court’s Judgment approving the


 


27





















 


Stipulation and the settlement
set forth therein, or any other orders entered pursuant to the Stipulation.


 


7.              Lead
Counsel’s Attorneys’ Fees and Reimbursement of Expenses


 


7.1                                 Lead
Counsel may submit an application or applications (the “Fee and Expense
Application”) for distributions to them from the Settlement Fund for an award
of attorneys’ fees, and reimbursement of expenses incurred in connection with
prosecuting the Litigation, plus any interest on such attorneys’ fees and
expenses at the same rate and for the same periods as earned by the Settlement
Fund (until paid).  Lead Counsel reserve
the right to make additional applications for fees and expenses incurred.  The Lead Plaintiffs may submit an application
for reimbursement of their expenses (including lost wages) incurred in
representing the Class in the Litigation.


 


7.2                                 The
attorneys’ fees, expenses and costs, as awarded by the Court, shall be paid to
Lead Counsel from the Settlement Fund, as ordered, immediately after the Court
executes an order awarding such fees and expenses.  Lead Counsel shall allocate the attorneys’
fees amongst other Plaintiffs’ counsel in a manner in which they in good faith
believe reflects the contributions of such counsel to the prosecution and
settlement of the Litigation.  In the
event that (i) the Effective Date does not occur, (ii) the judgment
and/or order making such fee and expense award is reversed or modified, (iii) the
Stipulation is canceled or terminated for any reason, or (iv) if the
dismissal with prejudice of this Litigation does not become Final, and in the
event that the fee and expense award has been paid to any extent, then Lead
Counsel shall within five (5) business days from receiving notice from
Qwest Communications International Inc. or


 


28





















 


from a court of appropriate
jurisdiction, refund to the Settlement Fund the fees, expenses and costs
previously paid to them from the Settlement Fund plus interest thereon at the
same rate as earned on the Settlement Fund in an amount consistent with such
reversal or modification.  Each
Plaintiffs’ counsel’s law firm as a condition of receiving such fees and
expenses, on behalf of itself and each partner and/or shareholder of it, agrees
that the law firm and its partners and/or shareholders are subject to the
jurisdiction of the Court for the purpose of enforcing the provisions of this
paragraph and such other agreement between Qwest Communications International
Inc. and Lead Counsel.  Without
limitation, each such law firm and its partners and/or shareholders agree that
the Court may, upon application of Qwest Communications International Inc.,
summarily issue orders including, without limitation, judgments and attachment
orders and may make appropriate findings of or sanctions for contempt, against
them or any of them should such law firm fail timely to repay such fees and
expenses.


 


7.3                                 The
procedure for and the allowance or disallowance by the Court of any
applications by Lead Counsel for attorneys’ fees and expenses to be paid out of
the Settlement Fund are not part of the settlement set forth in the
Stipulation, and are to be considered by the Court separately from the Court’s
consideration of the fairness, reasonableness and adequacy of the settlement
set forth in the Stipulation, and any order or proceeding relating to the Fee
and Expense Application, or any appeal from any order relating thereto or
reversal or modification thereof, shall not operate to


 


29





















 


terminate or cancel the
Stipulation, or affect or delay the finality of the Judgment approving the
Stipulation and the settlement of the Litigation set forth therein.


 


7.4                                 Settling
Defendants and their Related Parties shall have no responsibility for the
allocation among Plaintiffs’ counsel, and/or any other Person who may assert
some claim thereto, of any fee and expense award that the Court may make in the
Litigation.


 


8.              Conditions
of Settlement, Effect of Disapproval, Cancellation or Termination


 


8.1                                 The
Effective Date of the Stipulation shall be conditioned on the occurrence of the
last to occur of the following events:


 


(a)                                  Qwest
Communications International Inc. has timely made or caused to be made its
contributions to the Settlement Fund as required by ¶¶ 2.1 and 2.2 hereof;


 


(b)                                 the
Court has entered the Notice Order, as required by ¶ 4.1 hereof;


 


(c)                                  the
Court has entered the Judgment, attached hereto as Exhibit B, or a
judgment substantially similar in all material respects to the Judgment
attached hereto as Exhibit B;


 


(d)                                 the
Judgment has become Final; and


 


(e)                                  Qwest
Communications International Inc. has waived or has not timely asserted any
right to withdraw from the Settlement, including those rights to terminate
provided under ¶¶ 8.2 and 11 hereof.


 


30





















 


8.2                                 Simultaneously
herewith, Qwest Communications International Inc. and the Lead Plaintiffs
(individually and on behalf of the Class) have entered into a “Supplemental
Agreement Regarding Requests for Exclusion” setting forth, among other things,
certain conditions under which this Stipulation may be withdrawn or terminated
by Qwest Communications International Inc. 
The Supplemental Agreement Regarding Requests for Exclusion shall not be
filed prior to the Settlement Hearing unless a dispute arises as to its terms
or Qwest Communications International Inc. exercises its rights thereunder.  In the event of a withdrawal from this
Stipulation pursuant to the Supplemental Agreement Regarding Requests for
Exclusion, this Stipulation shall become null and void and of no further force
and effect and the provisions of ¶ 8.4 hereof shall apply.


 


8.3                                 Upon
the occurrence of all of the events referenced in ¶ 8.1 hereof, any and all
remaining interest or right of Settling Defendants in or to the Settlement
Fund, if any, shall be absolutely and forever extinguished.  If all of the conditions specified in
¶ 8.1 hereof are not met, then the Stipulation shall be canceled and
terminated subject to ¶¶ 8.4 hereof unless Lead Counsel and counsel for
Settling Defendants mutually agree in writing within thirty (30) days of their
receipt of notice of any failed condition to proceed with the Stipulation.


 


8.4                                 Unless
otherwise ordered by the Court, in the event the Stipulation shall terminate,
be canceled, or not become effective for any reason, within five (5) business
days after written notification of such event is sent by counsel for Qwest
Communications International Inc. to the Escrow Agent, the Settlement Fund,
plus


 


31





















 


accrued interest (except the
portion constituting the SEC Distribution Fund), and the Class Notice and
Administration Fund, plus accrued interest, shall be refunded to Qwest
Communications International Inc., less expenses due and owing as set forth in
¶ 2.8, and the SEC Distribution Fund, plus accrued interest, shall be refunded
to the account in the Court Registry Investment System from which the SEC
Distribution Fund came or otherwise treated in accordance with written
instructions provided by the Securities and Exchange Commission, provided,
however, that neither the Lead Plaintiffs nor Lead Counsel shall have any
obligation to repay any amounts actually and properly disbursed from the Class Notice
and Administration Fund, and that any expenses already incurred and properly
chargeable to the Class Notice and Administration Fund pursuant to ¶ 2.8 hereof
and Taxes and Tax Expenses at the time of such termination or cancellation but
that have not been paid, shall be paid or retained in escrow by the Escrow
Agent in accordance with the terms of the Stipulation prior to the balance
being refunded.  At the request of Qwest,
the Escrow Agent or its designee shall apply for any tax refund owed on the
Settlement Fund and pay the proceeds to Qwest Communications International Inc.


 


9.              Class Certification


 


For purposes
of this Stipulation only, the Settling Parties will stipulate to certification
of the Class as defined herein. 
Settling Defendants expressly reserve the right to contest class
certification in the event this Settlement does not become effective for any
reason.  This Stipulation, whether or not
consummated, and any proceedings


 


32





















 


taken pursuant to it, shall not
be construed as or received in evidence as an admission, concession or
presumption that class certification is appropriate in this action.


 


10.       Preferences,
Voidable Transfers, or Fraudulent Transfers


 


The Settling Parties agree that, with respect
to any Settling Defendant, in the event of a final order of a court of
competent jurisdiction, not subject to any further proceedings, determining the
transfer of the Settlement Fund, or any portion thereof, by or on behalf of
such Settling Defendant to be a preference, voidable transfer, fraudulent
transfer or similar transaction under Title 11 of the United States Code
(Bankruptcy) or applicable state law and any portion thereof is required to be
refunded and such amount is not promptly deposited in the Settlement Fund by
any other Settling Defendant, then, at the election of Class Plaintiffs’
Counsel, as to such Settling Defendant only, the releases given and the
Judgments entered in favor of such Settling Defendant pursuant to the
Stipulation shall be null and void.  The
releases given and the Judgments entered in favor of other Settling Defendants
shall remain in full force and effect.


 


11.       Limitations
On Subsequent Claims Against Released Parties


 


11.1                           In
accordance with Section 21D-4(f)(7)(A) of the Private Securities
Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(f)(7)(A), each of the
Released Persons by virtue of the Judgment is discharged from all claims for
contribution that have been or may hereafter be brought by or on behalf of any
of the Non-Settling Defendants or any of the Settling Defendants based upon,
relating to, or arising out of the Released Claims.  Accordingly, (i) the Non-Settling
Defendants are hereby permanently barred, enjoined, and restrained from
commencing, prosecuting, or asserting any such claim for


 


33





















 


contribution against any
Released Person based upon, relating to, or arising out of the Released Claims,
and (ii) the Released Persons are hereby permanently barred, enjoined, and
restrained from commencing, prosecuting, or asserting any claim for
contribution against the Non-Settling Defendants based upon, relating to, or arising
out of the Released Claims.  For purposes
of Section 11 of this Stipulation only, Non-Settling Defendants shall
include any Person who Lead Plaintiffs may hereafter sue based upon, relating
to, or arising out of the Released Claims (“Reform Act Bar Order”).  Inclusion of the Reform Act Bar Order in the
Judgment is material to Settling Defendants’ decision to participate in this
Stipulation.


 


11.2                           The
Non-Settling Defendants and the Settling Defendants are hereby permanently
barred, enjoined, and restrained from commencing, prosecuting, or asserting any
claim, if any, however styled, whether for indemnification, contribution, or
otherwise and whether arising under state, federal, or common law, against the
Released Persons based upon, arising out of, or relating to the Released
Claims; and the Released Persons are permanently barred, enjoined, and
restrained from commencing, prosecuting, or asserting any other claim, if any, however
styled, whether for indemnification, contribution, or otherwise and whether
arising under state, federal, or common law, against the Non-Settling
Defendants based upon, arising out of, or relating to the Released Claims (the “Complete
Bar Order”).  In the event that the
Judgment fails to contain a Complete Bar Order substantially in conformity with
this ¶ 11.2, such failure shall not be a basis for Lead Plaintiffs or any Class Member
to terminate the settlement.


 


34





















 


11.3                           To the
extent (but only to the extent) not covered by the Reform Act Bar Order and/or
the Complete Bar Order, the Lead Plaintiffs, on behalf of themselves and the
Class, further agree that they will reduce or credit any settlement or judgment
(up to the amount of such settlement or judgment) they may obtain against a
Non-Settling Defendant by an amount equal to the amount of any settlement or
final, non-appealable judgment that a Non-Settling Defendant may obtain against
any of the Released Persons based upon, arising out of, relating to, or in
connection with the Released Claims or the subject matter thereof.  In the event that a settlement is reached
between Lead Plaintiffs or the Class and a Non-Settling Defendant, or
final judgment is entered in favor of Lead Plaintiffs or the Class against
a Non-Settling Defendant before the resolution 
of that Non-Settling Defendant’s potential claims against any Released
Person, any funds collected on account of such settlement or judgment shall not
be distributed, but shall be retained by the Escrow Agent  pending the resolution of any potential claim
by  the Non-Settling Defendant claim
against such Released Person(s) as provided in Paragraphs 11.3 and 11.4 of this
Stipulation.  In the event a Non-Settling
Defendant asserts a claim against a Released Person related to any claim or
judgment asserted against that Non-Settling Defendant, or settlement entered
into by that Non-Settling Defendant, arising from or related to a claim
asserted against that Non-Settling Defendant by Lead Plaintiffs or any other Class Member,
Qwest Communications International Inc. agrees to pay the reasonable costs of
defending any such claim that may be asserted against any Released Person by
any Non-Settling Defendant, and any such Released Person shall defend against such
claim in good faith and will not settle


 


35





















 


such claim without the prior
written consent of Lead Counsel and Qwest Communications International Inc.,
which consent shall not be unreasonably withheld.  Inclusion of this Paragraph 11.3 in the
Judgment is material to Settling Defendants’ decision to participate in this
Stipulation.


 


11.4                           The Class will
not settle any claim or judgment against a Non-Settling Defendant without
obtaining from the Non-Settling Defendant the release of any and all claims the
Non-Settling Defendant may have against any of the Released Persons based upon,
arising out of, relating to or in connection with the Released Claims or the
subject matter thereof, provided that each Settling Defendant shall execute and
provide to the Non-Settling Defendant a release in a form that is satisfactory
both to the Settling Defendants and the Non-Settling Defendant.  Inclusion of this Paragraph 11.4 in the
Judgment is material to Settling Defendants’ decision to participate in this
Stipulation.


 


12.       Miscellaneous
Provisions


 


12.1                           Notwithstanding
any other provision in this Stipulation, including ¶¶ 5.4, 11.1, 11.2, 11.3,
and 11.4, this Stipulation shall not cause the Released Persons and
Non-Settling Defendants to release the following potential claims between or
among themselves:


 


(a)                                  Claims
that arise from or relate to claims asserted by those Persons who request
exclusion from the Class in such form and manner, and within such time, as
the Court shall prescribe, and who assert claims that would have been Released
Claims under this Stipulation but for the Person’s exclusion from the Class;


 


36





















 


(b)                                 Claims
that arise from or relate to claims asserted in In re Qwest
Savings and Retirement Plan ERISA Litigation 02-CV-00464-REB-CBS,
including all actions consolidated therein.


 


(c)                                  Any
claims, rights or obligations concerning advancement of legal fees and
expenses, or the recovery of legal fees and expenses advanced or that may be
advanced, by Qwest Communications International Inc. or any subsidiary or
affiliate of Qwest Communications International Inc. to the Non-Settling
Defendants or any Released Person.


 


(d)                                 (i) the
November 12, 2003 Definitive Settlement Agreement and all documents attached
thereto and/or contemplated thereby relating to the settlement among Qwest
Communications International Inc. and certain Qwest Communications
International Inc. directors and officers and fiduciary liability insurance
carriers, or (ii) the Insureds Trust Agreement (as amended) made and
entered into as of June 1, 2004, by and among U.S. Bank Trust Association,
U.S. Bank Trust National Association, the Honorable Sam C. Pointer, Qwest
Communications International Inc. and Individual Beneficiaries as defined
therein.


 


(e)                                  Enforcement
of any breach of this Stipulation.


 


12.2                           The
Settling Parties (a) acknowledge that it is their intent to consummate
this Stipulation, and (b) agree to cooperate to the extent reasonably
necessary to effectuate and implement all terms and conditions of the
Stipulation.  Further, Qwest
Communications International Inc. and Arthur Andersen LLP will enter into an
agreement with Lead Counsel providing for Qwest Communications International
Inc.


 


37





















 


and Arthur Andersen LLP (a) to
attempt to make certain current and former employees available in connection
with Lead Plaintiffs’ continued prosecution of the above-captioned matter, and (b) to
make certain other discovery materials available consistent with its defense of
any other litigation or other proceeding.


 


12.3                           The
Settling Parties intend this settlement to be a final and complete resolution
of all disputes between them with respect to the Litigation.  The Stipulation compromises claims that are
contested and shall not be deemed an admission by any Settling Party as to the
merits of any claim or defense.  The
Settling Parties agree that the amount paid to the Settlement Fund and the
other terms of the Stipulation were negotiated in good faith by the Settling
Parties, and reflect a settlement that was reached voluntarily after
consultation with competent legal counsel. 
The Settling Parties reserve their right to rebut, in a manner that such
party determines to be appropriate, any contention made in any public forum
that the Litigation was brought or defended in bad faith or without a
reasonable basis.  The Settling Parties
agree not to oppose a finding in the Judgment that during the course of the
Litigation, the Settling Parties and their respective counsel at all times
complied with the requirements of Rule 11 of the Federal Rules of
Civil Procedure.


 


12.4                           Notwithstanding
anything to the contrary contained herein, the Lead Plaintiffs and each of the Class Members,
for themselves and any other persons claiming by, through, or on behalf of
them, acknowledge and agree that (i) in no event shall the Administrator
of Arthur Andersen LLP, any member of the Administrative Board of Arthur
Andersen LLP (or any officer, director, member or shareholder of any


 


38





















 


Administrative Board), any
present or former directors, officers, managers, partners, participating
principals, national directors or similar persons of Arthur Andersen LLP or any
of their respective agents or representatives (collectively, the “Andersen
Covered Persons”) have any personal liability with respect to the obligations
arising out of or relating to this Stipulation; and (ii) no Andersen
Covered Person shall be obligated to make, and no Andersen Covered Person in
fact will make, any capital contribution or other payment of any kind to Arthur
Andersen LLP in order for Arthur Andersen LLP to satisfy its obligations
arising out of or relating to this Stipulation. 
Notwithstanding this paragraph, Arthur Andersen LLP (but not Andersen
Covered Persons) is responsible for the contribution of $10 million (ten
million dollars) to this settlement, such payment to be made to Qwest
Communications International Inc.


 


12.5                           Neither
the Stipulation nor the settlement contained herein, nor any act performed or
document executed pursuant to or in furtherance of the Stipulation or the
settlement: (a) is or may be deemed to be or may be used as an admission
of, or evidence of, the validity of any Released Claim, or of any wrongdoing or
liability of the Released Persons or Non-Settling Defendants; or (b) is or
may be deemed to be or may be used as an admission of, or evidence of, any
fault or omission of any of the Released Persons or Non-Settling Defendants in
any civil, criminal or administrative proceeding in any court, administrative
agency or other tribunal.  Released
Persons may file the Stipulation and/or the Judgment in any action that may be
brought against them in order to support a defense or counterclaim based on
principles of res judicata,


 


39





















 


collateral estoppel, release,
good faith settlement, judgment bar or reduction or any other theory of claim
preclusion or issue preclusion or similar defense or counterclaim.


 


12.6                           The
protections afforded by the Protective Order governing the Litigation shall be
unaffected by this Stipulation.


 


12.7                           All of
the Exhibits to this Stipulation are material and integral parts hereof and are
fully incorporated herein by this reference.


 


12.8                           This
Stipulation may be amended or modified only by a written instrument signed by
or on behalf of all Settling Parties or their respective
successors-in-interest.


 


12.9                           This
Stipulation, the Exhibits attached hereto, the Supplemental Agreement Regarding
Requests for Exclusion, the executed Term Sheet between Qwest Communications
International Inc. and Arthur Andersen LLP, and the other agreements identified
herein, constitute the entire agreement among the parties hereto and no
representations, warranties or inducements have been made to any party
concerning the Stipulation, its Exhibits, or the Supplemental Agreement
Regarding Requests for Exclusion, other than the representations, warranties
and covenants contained and memorialized in such documents, and shall not be
amended except by a written instrument signed by the Settling Parties.  Except as otherwise provided herein, each
Settling Party shall bear its own costs.


 


12.10                     Lead Counsel,
on behalf of the Class, are expressly authorized by the Lead Plaintiffs to take
all appropriate action required or permitted to be taken by the Class pursuant
to the Stipulation to effectuate its terms and also are expressly


 


40





















 


authorized to enter into any
modifications or amendments to the Stipulation on behalf of the Class which
they deem appropriate.


 


12.11                     Each counsel
or other Person executing the Stipulation or any of its Exhibits on behalf of
any party hereto hereby warrants that such Person has the full authority to do
so.


 


12.12                     The
Stipulation may be executed in one or more counterparts.  All executed counterparts and each of them
shall be deemed to be one and the same instrument.  A complete set of original executed
counterparts shall be filed with the Court.


 


12.13                     The
Stipulation shall be binding upon, and inure to the benefit of, the successors
and assigns of the Settling Parties.


 


12.14                     The Court
shall retain jurisdiction with respect to implementation and enforcement of the
terms of this Stipulation, and all parties hereto submit to the jurisdiction of
the Court for purposes of implementing and enforcing the settlement embodied in
the Stipulation.


 


12.15                     This
Stipulation and the Exhibits hereto shall be considered to have been negotiated,
executed and delivered, and to be wholly performed, in the State of Delaware,
and the rights and obligations of the parties to the Stipulation shall be
construed and enforced in accordance with, and governed by, the internal,
substantive laws of the State of Delaware without giving effect to that State’s
choice-of-law principles.


 


41





















 


12.16                     Whenever
notice to Lead Plaintiffs or Lead Counsel is required to be given pursuant to
this Stipulation, it shall be delivered by both facsimile and federal express
to:


 


Keith Park


Lerach,
Coughlin, Stoia, Geller,


Rudman &
Robbins LLP


655 W.
Broadway, Suite 1900


San Diego, CA
92101-3301


Fax:  619-231-7423


 


12.17                     Whenever
notice to Qwest Communications International Inc. is required to be given
pursuant to this Stipulation, it shall be delivered by both facsimile and
federal express to:


 


Richard N.
Baer


General
Counsel


Qwest
Communications International Inc.


1801
California Street


Suite 5200


Denver,
Colorado 80112


Fax:  303-383-8444


 


and


 


Jonathan
Schiller


David Boyd


Alfred Levitt


Boies,
Schiller & Flexner LLP


5301 Wisconsin
Ave., N.W.


Washington DC
20015


(202) 237-2727
(phone)


(202) 237-6131
(fax)


 


42





















 


12.18                     Whenever notice
to other Settling Defendants is required to be given pursuant to this
Stipulation, it shall be delivered by both facsimile and federal express to the
signatories to this Stipulation or their respective counsel.


 


IN WITNESS
WHEREOF, the parties hereto have caused the Stipulation to be executed, by
their duly authorized attorneys, dated as of November    ,
2005.


 


 


	
  By:

  	
  /s/ William
  S. Lerach

  	
   

  	
   

  	
  By:

  	
  /s/ Jonathan
  D. Schiller

  	
   

  
	
   

  	
  William S.
  Lerach

  	
   

  	
   

  	
  Jonathan D.
  Schiller

  	
   

  
	
   

  	
  Patrick
  Coughlin

  	
   

  	
   

  	
  David R.
  Boyd

  	
   

  
	
   

  	
  Keith Park

  	
   

  	
   

  	
  Alfred P.
  Levitt

  	
   

  
	
   

  	
  Michael J.
  Dowd

  	
   

  	
   

  	
  Boies,
  Schiller & Flexner LLP

  	
   

  
	
   

  	
  Thomas E.
  Egler

  	
   

  	
   

  	
  5301
  Wisconsin Ave, NW

  	
   

  
	
   

  	
  Lerach,
  Coughlin, Stoia, Geller,

  	
   

  	
   

  	
  Suite 800

  	
   

  
	
   

  	
  Rudman &
  Robbins LLP

  	
   

  	
   

  	
  Washington,
  DC 20015

  	
   

  
	
   

  	
  655 W.
  Broadway, Suite 1900

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  San Diego,
  CA 92101-3301

  	
   

  	
   

  	
  Counsel for
  Qwest Communication

  International Inc.

  
	
   

  	
  Lead Counsel

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Frederick J. Baumann

  	
   

  	
   

  	
  By:

  	
  /s/ Bruce F.
  Black

  	
   

  
	
   

  	
  James M.
  Lyons

  	
   

  	
   

  	
  Bruce F.
  Black

  	
   

  
	
   

  	
  Frederick J.
  Baumann

  	
   

  	
   

  	
  Martin D.
  Litt

  	
   

  
	
   

  	
  Rothgerber
  Johnson & Lyons LLP

  	
   

  	
   

  	
  Michael J.
  Hofmann

  	
   

  
	
   

  	
  1200 17th
  Street, Suite 3000

  	
   

  	
   

  	
  Holme
  Roberts & Owen LLP

  	
   

  
	
   

  	
  Denver, CO
  80202-5855

  	
   

  	
   

  	
  1700 Lincoln
  Street, Suite 4100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Denver, CO
  80203

  	
   

  
	
   

  	
  Counsel for
  Vinod Khosla

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Counsel for
  Philip Anschutz & Craig

  Slater

  



 


43





















 


	
  By:

  	
  /s/ Mark T.
  Drooks

  	
   

  	
   

  	
  By:

  	
  /s/ James
  Nesland

  	
   

  
	
   

  	
  Mark T.
  Drooks

  	
   

  	
   

  	
  James
  Nesland

  	
   

  
	
   

  	
  Thomas V. Reichert

  	
   

  	
   

  	
  Paul
  Schwartz

  	
   

  
	
   

  	
  Bird,
  Marella, Boxer & Wolpert, PC

  	
   

  	
   

  	
  Cooley
  Godward LLP

  	
   

  
	
   

  	
  1875 Century
  Park East, 23rd Floor

  	
   

  	
   

  	
  380
  Interlocken Crescent, Suite 900

  
	
   

  	
  Los Angeles,
  CA 90067-2561

  	
   

  	
   

  	
  Broomfield,
  CO 80021-8023

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Counsel for
  Robin Szellga

  	
   

  	
   

  	
  Counsel for
  Drake Tempest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Elissa
  Preheim

  	
   

  	
   

  	
  By:

  	
  /s/ Greg
  Waller

  	
   

  
	
   

  	
  Scott B.
  Schreiber

  	
   

  	
   

  	
  Greg Waller

  	
   

  
	
   

  	
  John A.
  Freedman

  	
   

  	
   

  	
  Andrews
  Kurth LLP

  	
   

  
	
   

  	
  Elissa
  Preheim

  	
   

  	
   

  	
  600 Travis
  Street, Suite 4200

  	
   

  
	
   

  	
  Arnold &
  Porter

  	
   

  	
   

  	
  Houston,
  Texas 77002

  
	
   

  	
  555 Twelfth
  Street, NW

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Washington,
  DC 20004-1206

  	
   

  	
   

  	
  Attorneys
  for Defendant Gregory M. Casey

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Counsel for Arthur
  Andersen LLP

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Barbara
  Moses

  	
   

  	
   

  	
  By:

  	
  /s/ David A.
  Zisser

  	
   

  
	
   

  	
  Barbara
  Moses

  	
   

  	
   

  	
  David A.
  Zisser

  	
   

  
	
   

  	
  Morvillo,
  Abramowitz, Grand, Iason

  	
   

  	
   

  	
  Isaacson,
  Rosenbaum P.C.

  	
   

  
	
   

  	
  & Silberberg,
  P.C.

  	
   

  	
   

  	
  633 17th
  Street, Suite 2200

  	
   

  
	
   

  	
  565 Fifth
  Avenue

  	
   

  	
   

  	
  Denver, CO
  80202

  
	
   

  	
  New York, NY
  10017

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Counsel for
  Marc Weisberg

  	
   

  
	
   

  	
  Counsel for
  Afshin Mohebbi

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Coates
  Lear

  	
   

  	
   

  	
  By:

  	
  /s/ Stephanie
  E. Dunn

  	
   

  
	
   

  	
  Ty Cobb

  	
   

  	
   

  	
  Robert N.
  Miller

  	
   

  
	
   

  	
  Daniel F.
  Shea

  	
   

  	
   

  	
  Stephanie E.
  Dunn

  	
   

  
	
   

  	
  Coates Lear

  	
   

  	
   

  	
  Perkins
  Coie, LLP

  	
   

  
	
   

  	
  Hogan &
  Hartson L.L.P.

  	
   

  	
   

  	
  1899 Wynkoop
  St., Ste. 700

  
	
   

  	
  1200
  Seventeenth St., Suite 1500

  	
   

  	
   

  	
  Denver, CO
  80202

  	
   

  
	
   

  	
  Denver, CO
  80202

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attorneys
  for Lewis Wilks and

  Stephen Jacobsen

  	
   

  	
   

  	
  Attorneys
  for James A. Smith

  



 


44





















 


IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO


 


Civil Action No.
01-cv-1451-REB-CBS

(Consolidated with Civil Action Nos. 01-cv-1472-REB-CBS, 01-cv-1527-REB-CBS,
01-cv-1616-REB-CBS, 01-cv-1799-REB-CBS, 01-cv-1930-REB-CBS, 01-cv-2083-REB-CBS,
02-cv-0333-REB-CBS, 02-cv-0374-REB-CBS, 02-cv-0507-REB-CBS, 02-cv-0658-REB-CBS,
02-cv-755-REB-CBS, 02-cv-798-REB-CBS and 04-cv-0238-REB-CBS)


 


In re QWEST COMMUNICATIONS
INTERNATIONAL, INC. SECURITIES LITIGATION


 


[PROPOSED] ORDER PRELIMINARILY APPROVING
PARTIAL SETTLEMENT

AND APPROVING FORM AND MANNER OF NOTICE


 


EXHIBIT A


 





















 


WHEREAS, Lead
Plaintiffs (on behalf of themselves and the Class Members) in the
above-captioned consolidated litigation (the “Litigation”), have entered into a
Stipulation of Partial Settlement dated as of November     ,
2005 (the “Stipulation”) with Settling Defendants that is subject to review and
approval under Rule 23 of the Federal Rules of Civil Procedure (“Fed. R. Civ.
P.”)  and that, together with the
exhibits thereto, sets forth the terms and conditions for the proposed partial
settlement of the Litigation and the dismissal of the Litigation against the
Settling Defendants (as defined in the Stipulation) with prejudice; and the
Court having read and considered the Stipulation and the accompanying
documents; and the parties to the Stipulation having consented to entry of this
Order; and all capitalized terms used herein having the same meanings set forth
in the Stipulation;


 


NOW, THEREFORE, IT IS HEREBY ORDERED:


 


1.             (a)           The
Court hereby certifies, for settlement purposes only,(1) a class pursuant to
Fed. R. Civ. P. 23(b)(3), defined as follows:(2)


 


all persons who purchased or otherwise
acquired Qwest publicly traded securities (including common stock, bonds, and
options) from May 24, 1999 through July 28, 2002 (“Class Period”). Excluded
from the Class are Defendants and any Persons affiliated with or related to any
Defendant. For purposes of this paragraph, the persons affiliated with or
related to any Defendant are members of the immediate family of each Individual
Defendant, any entity in which any Defendant has a controlling interest,


 










(1)           Settling Defendants expressly reserve the right to contest
class certification in the event the settlement does not become effective for any
reason.


 


(2)           All capitalized terms not otherwise defined herein shall
have the meanings set forth in the Stipulation.


 


1





















 


officers and directors of Qwest and its
subsidiaries and affiliates, partners, shareholders, and members of Arthur
Andersen LLP, and the legal representatives, heirs, predecessors, successors
and assigns of any such excluded party. Also excluded from the Class are those
Persons who request exclusion from the Class in such form and manner, and
within such time, as the Court shall prescribe. 
Also excluded from the Class is any current or former officer, director,
employee, or agent of Qwest who has been sued by the United States Securities
and Exchange Commission in connection with such Person’s affiliation with or
conduct related to Qwest.


 


(b)           The Court finds that (i) members of the Class are so
numerous as to make joinder impracticable; (ii) the claims of the Lead
Plaintiffs are typical of the claims of the Class they seek to represent; (iii)
the interests of the members of the Class will be, and have been, fairly and
adequately represented by the Lead Plaintiffs and Lead Counsel; (iv) a class
action is superior to other available methods for the fair and efficient
adjudication of this Litigation; (v) common questions of law and fact exist as
to all members of the Class; and (vi) such common questions predominate over
any questions solely affecting individual members of the Class.


(c)           The Court finds that pursuant to Fed. R. Civ. P. 23, Lead
Plaintiffs New England Healthcare Employees Pension Fund, Satpal Singh,
Tejinder Singh, and Clifford Mosher are adequate class representatives.


 


2.             The terms of the Settlement as set forth in the
Stipulation, are preliminarily approved. 
A hearing (the “Settlement Hearing”), pursuant to Fed. R. Civ. P. 23(e),
shall be held before the Court on                         ,
2005, at        ..m. in Courtroom     
of the United States Courthouse, 901 19th Street, Room A-105, Denver, Colorado
(or such adjourned time or times as the Court may set without further notice to
the Class):


 


2





















 


(a)           to determine whether the terms of the settlement as set
forth in the Stipulation are fair, reasonable, adequate to the Class and should
be approved by the Court;


 


(b)           to determine whether the Judgment as provided under the
Stipulation should be entered;


 


(c)           to determine whether the proposed Plan of Allocation for
distributing the settlement proceeds among Class Members should be approved by
the Court;


 


(d)           to determine the amount of fees and expenses awarded to
Lead Counsel and the amounts that should be ordered reimbursed to the Lead
Plaintiffs for their expenses (including lost wages) incurred in prosecuting
the Litigation; and


 


(e)           to rule upon such other matters as the Court may deem
appropriate.


 


3.             The Court approves, in form and content, the Notice of
Pendency and Proposed Partial Settlement of Class Action (the “Notice”), the
Proof of Claim and Release, and the Summary Notice (the “Summary Notice”),
annexed as exhibits A-1, A-2, and A-3 respectively to the Stipulation and this
Order, and finds that the publication, mailing, and Internet posting of such
notices in the manner and form set forth in the Stipulation and as set forth
herein, meets the requirements of Rule 23 of the Fed. R. Civ. P., §21D(a)(7) of
the Exchange Act, 15 U.S.C. §78u-4(a)(7), as amended by the Private Securities
Litigation Reform Act of 1995, due process, the rules of this Court, and any
other applicable law, and is the best notice practicable under the
circumstances and shall constitute due and sufficient notice to all persons
entitled thereto.


 


3





















 


4.             Gilardi & Co. LLC is hereby appointed Claims
Administrator to supervise and administer the notice process as well as process
claims as more fully set forth in the Stipulation.


 


5.             (a)           On or
before                         ,
2005 (“Notice Date”), (i) a copy of the Notice and Proof of Claim and Release
substantially in the forms annexed as Exhibits A-1 and A-2 to the Stipulation
shall be mailed by first class mail to each member of the Class to the extent
shown by the records of Qwest or its transfer agent at the address set forth in
such records, and (ii) the Stipulation and all exhibits thereto shall be posted
on the Internet at the Claims Administrator’s Internet website,
www.gilardi.com.


 


(b)           On or before                         ,
2005, a copy of the Summary Notice, substantially in the form annexed as Exhibit
A-3 to the Stipulation, shall be published on two separate occasions in the
national edition of Investor’s Business Daily.


 


(c)           At or prior to the Settlement Hearing provided in
paragraph 2 of this Order, Lead Counsel shall file with the Court, proof, by
affidavit or declaration, of such mailing and publication.


 


6.             Within ten (10) days after the receipt of the Notice and
the Proof of Claim and Release, nominees who hold or held the publicly traded
securities of Qwest purchased or acquired during the period May 24, 1999
through July 28, 2002, inclusive, for the benefit of another Person shall
either (i) request additional copies of the Notice and the Proof of Claim form,
and, within ten days after the receipt of the additional copies of the Notice
and the Proof of Claim form, mail them to such beneficial owners and send a
statement to the Claims Administrator confirming that the mailings were made as
directed; or (ii) send a list


 


4





















 


of names and addresses of such beneficial
owners to the Claims Administrator who, in turn, shall promptly mail the Notice
and Proof of Claim to such beneficial owners. 
The Claims Administrator shall advise such nominees that their
reasonable costs in providing the Notice and Proof of Claim and Release to such
beneficial owners will be reimbursed upon submission of appropriate
documentation.


 


7.             Any member of the Class may be excluded from the Class
by complying on or before fifty (50) calendar days after the Notice Date, with
the instructions and procedures set forth in Section VIII of the Notice
regarding exclusion from the Class.  Any
Member of the Class who has not requested to be excluded from the Class in the
manner set forth in Section VIII of the Notice may, but is not required to,
enter an appearance in this Litigation pro
se or through counsel of his, her or its own choice.  Any member of the Class who does not enter an
appearance shall be represented by Lead Counsel.


 


8.             Any member of the Class who has not requested to be excluded
from the Class and who wants to object to the approval of the settlement on the
terms set forth in the Stipulation, the application by Lead Counsel for an
award of attorneys’ fees and expenses, reimbursement of the expenses (including
lost wages) of Lead Plaintiffs, or the proposed Plan of Allocation may do so by
appearing at the Settlement Hearing either in person or through an attorney or
by filing a written objection consisting of documents, briefs, or affidavits
with the Court.  As set forth in Section
XII of the Notice, in order to appear at the Settlement Hearing or otherwise
object to the settlement, any such Class Member must file a written notice of
objection with the Clerk of the Court on or before fifty (50) calendar days
after the Notice Date.  This written
objection must also be served by


 


5





















 


hand or first class mail on the parties set
forth in Section XIII of the Notice.  Any
Class Member who intends to object to the approval of the settlement on the
terms set forth in the Stipulation, the application by Lead Counsel for an
award of attorneys’ fees and expenses, reimbursement of the expenses (including
lost wages) of Lead Plaintiffs, or the proposed Plan of Allocation, and who
desires to present evidence at the Settlement Hearing must include in his, her
or its written objections the identity of any witnesses he, she or it may call
to testify, and any exhibits he, she or it intends to introduce into evidence
at the Settlement Hearing.  Any Class
Member who does not make his, her, or its objection in the manner provided for
herein shall be deemed to have waived such objection and shall forever be
foreclosed from making any objection to the fairness, reasonableness, or
adequacy of the proposed settlement as incorporated in the Stipulation, the
proposed Plan of Allocation, the awards to Plaintiffs’ Lead Counsel of
attorneys’ fees and expenses or any reimbursement of expenses of Lead
Plaintiffs (including lost wages), unless otherwise ordered by the Court.


 


9.             Class Members who want to participate in the settlement
shall complete and submit a Proof of Claim and Release in accordance with the
instructions contained therein.  Unless
the Court orders otherwise, all Proofs of Claim and Releases must be submitted
no later than ninety (90) calendar days after the Notice Date.  Any Class Member for whom a timely and valid
Proof of Claim and Release has not been submitted within the time provided for
shall, unless otherwise ordered by the Court, be barred from sharing in the
distribution of the proceeds of the settlement but shall nonetheless be bound
by the terms of the Judgment.


 


6





















 


10.           Neither Defendants nor Defendants’ counsel shall have any
responsibility for the Plan of Allocation or any application for attorneys’
fees or reimbursement of expenses submitted by Lead Counsel, and such matters
will be considered separately from the fairness, reasonableness and adequacy of
the proposed settlement.


 


11.           All proceedings against the Settling Defendants in the
Litigation are stayed until further order of the Court, except as may be
necessary to implement the settlement or comply with the terms of the
settlement.


 


12.           On the Effective Date, all members of the Class for whom
timely, valid, and complete requests for exclusion from the Class have not been
submitted in accordance with the provisions of Section VIII of the Notice shall
conclusively be deemed to have dismissed with prejudice all claims asserted
against the Settling Defendants in the Litigation and to have released all the
Released Claims, and shall be forever barred and enjoined from asserting,
prosecuting, or continuing the prosecution of any of the Released Claims
against the Settling Defendants pursuant to the terms of the Stipulation.


 


13.           Pending the final determination of the fairness,
reasonableness, and adequacy of the proposed settlement, no member of the
Class, other than those for whom timely, valid, and complete requests for
exclusion from the Class have been submitted, may, either directly,
representatively, or in any other capacity, prosecute, institute, or commence
any individual, class, or derivative action with respect to the Released Claims
against any of the Released Persons.


 


14.           The Court reserves the right to approve the settlement
with such modifications as may be agreed to by the Settling Parties, if
appropriate, without further


 


7





















 


notice to Class Members, and retains
jurisdiction to consider all further applications arising out of or connected
with the proposed settlement, as well as any applications for awards of fees
and expenses to counsel to the Class.


 


15.           The Claims Administrator, subject to such supervision of
the Court and/or Lead Counsel, as may be necessary or as circumstances may
require, shall provide notice to the Class and administer the processing of
Proof of Claim and Release forms.  All
reasonable costs incurred in identifying and notifying Class Members as well as
in administering the settlement fund shall be paid as set forth in the
Stipulation.


 


16.           All funds held by the Escrow Agent shall be deemed and
considered to be in custodia legis
of the Court, and shall remain subject to the jurisdiction of the Court.  Neither Settling Defendants nor their counsel
shall have any responsibility for the handling of the funds held by the Escrow
Agent.


 


17.           All papers in support of the settlement, the Plan of
Allocation, any application by Lead Counsel for attorneys’ fees and expenses and
reimbursement of the Lead Plaintiffs’ expenses (including lost wages) shall be
filed with the Court and served on or before forty (40) calendar days after the
Notice Date and any reply to objections shall be filed and served fourteen (14)
calendar days prior to the Settlement Hearing.


 


	
  DATED:

  	
   

  	
   

  	
   

  
	
   

  	
  THE HONORABLE ROBERT E. BLACKBURN

  UNITED STATES DISTRICT JUDGE

  



 


8





















 


IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO


 


Civil Action No. 01-cv-1451-REB-CBS

(Consolidated with Civil Action Nos. 01-cv-1472-REB-CBS, 01-cv-1527-REB-CBS,
01-cv-1616-REB-CBS, 01-cv-1799-REB-CBS, 01-cv-1930-REB-CBS, 01-cv-2083-REB-CBS,
02-cv-0333-REB-CBS, 02-cv-0374-REB-CBS, 02-cv-0507-REB-CBS, 02-cv-0658-REB-CBS,
02-cv-755-REB-CBS, 02-cv-798-REB-CBS and 04-cv-0238-REB-CBS)


 


In re QWEST COMMUNICATIONS
INTERNATIONAL, INC. SECURITIES LITIGATION


 


NOTICE OF PENDENCY AND PARTIAL SETTLEMENT OF
CLASS ACTION



EXHIBIT A-1


 





















 


TO:                            ALL PERSONS
OR ENTITIES THAT PURCHASED OR OTHERWISE ACQUIRED QWEST COMMUNICATIONS
INTERNATIONAL, INC. (“QWEST”) PUBLICLY TRADED SECURITIES (INCLUDING COMMON
STOCK, BONDS AND OPTIONS) FROM MAY 24, 1999 THROUGH JULY 28, 2002


 


PLEASE READ THIS NOTICE CAREFULLY AND IN ITS
ENTIRETY.  YOUR RIGHTS MAY BE AFFECTED BY
PROCEEDINGS IN THIS ACTION.  PLEASE NOTE
THAT IF YOU ARE A MEMBER OF THE CLASS YOU MAY BE ENTITLED TO SHARE IN THE
PROCEEDS OF THE SETTLEMENT FUND DESCRIBED IN THIS NOTICE.  TO CLAIM YOUR SHARE OF THIS FUND, YOU MUST
SUBMIT A VALID PROOF OF CLAIM AND RELEASE POSTMARKED ON OR BEFORE                           ,
2005.


 


This Notice has been sent to you pursuant to
Rule 23 of the Federal Rules of Civil Procedure and Orders of the United States
District Court for the District of Colorado (the “Court”).  The purpose of this Notice is to inform you
of the partial settlement of this consolidated class action (the “Litigation”)
and of the hearing to be held by the Court to consider the fairness,
reasonableness, and adequacy of the settlement. 
The partial settlement resolves the claims against the Settling
Defendants (defined below) but does not resolve the claims against Joseph P.
Nacchio (former Chief Executive Officer of Qwest) and Robert S. Woodruff
(former Chief Financial Officer of Qwest), who are not parties to this
settlement.  This Notice describes the
rights you may have in connection with the settlement and what steps you may
take in relation to the settlement and the Litigation.


 


The partial settlement creates a fund in the
principal amount of $400,000,000.00 in cash (the “Settlement Fund”).  The Settlement Fund may be increased under
certain circumstances described in this Notice and in the Stipulation of
Partial Settlement dated as of November     , 2005 (“Stipulation”).  Based on an estimate of the number of shares,


 


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bonds,
and options entitled to participate in the settlement and the anticipated
number of claims to be submitted by Class Member(s) (defined below), the
average distribution from the Settlement Fund would be approximately $0.    
per share before deduction of Court-approved fees and expenses (see the Plan of
Allocation below for a more detailed description of how the Settlement Fund
will be allocated to the different types of Qwest publicly traded
securities).  For all types of Qwest
securities, your actual recovery from the Settlement Fund will depend on a
number of variables including the number of claimants and the types and amounts
of securities they purchased, the type and number of Qwest publicly traded
securities you purchased, the expense of administrating the claims process and
the timing of your purchases and sales, if any (see Plan of Allocation below).


 


The Settling Parties to the Litigation do not
agree that the Lead Plaintiffs (defined below) would have prevailed on any of
the claims asserted in the Litigation, or on the average amount of damages per
security that would have been recoverable if Lead Plaintiffs were to have
prevailed on their claims.  Other issues
that are the subject of the Litigation on which the parties disagree include:
(1) whether any of the statements allegedly made or facts allegedly omitted by
the Settling Defendants were false, material or otherwise actionable; (2) the
extent to which external factors, such as general market conditions, influenced
the trading price of Qwest publicly traded securities at various times during
the Class Period (defined below); (3) the extent to which the various matters
that Lead Plaintiffs allege were materially false or misleading influenced (if
at all) the trading price of Qwest publicly traded securities at various times
during the Class Period; (4) the extent to which the various allegedly adverse
material facts that Lead Plaintiffs allege were omitted


 


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influenced
(if at all) the trading price of Qwest publicly traded securities at various
times during the Class Period; and (5) the appropriate economic model for
determining the amount by which the trading prices of Qwest publicly traded
securities were allegedly artificially inflated (if at all) at any time during
the Class Period.


 


Counsel for the Lead Plaintiffs believe that
the substantial recovery obtained given Qwest’s financial condition is the
largest possible recovery and is in the best interest of the Class (defined
below).  Because of the risks associated
with continuing to litigate and proceeding to trial, there was a danger that
the Lead Plaintiffs would not have prevailed on any of their claims, in which
case the Class would have received nothing. 
Indeed, the Settling Defendants assert that they never made any false or
misleading statements or omissions at any time. 
In addition, the amount of damages recoverable by the Class, if any, was
and continues to be vigorously challenged by the Settling Defendants.  If the Litigation were tried, recoverable
damages, if any, would have been limited to losses caused by conduct actionable
under the laws and, had the Litigation gone to trial, the Settling Defendants
intended to assert that all or most of the losses of the members of the Class
were caused by non-actionable market, industry or general economic
factors.  The Settling Defendants also
would have asserted that throughout the Class Period the uncertainties and
risks associated with Qwest’s business and financial condition as well as the
merger between Qwest and US West were fully and adequately disclosed.


 


Lead Counsel have not received any payment
for their services in conducting the Litigation on behalf of the members of the
Class, nor have they been reimbursed for their out-of-pocket expenditures.  If the settlement is approved by the Court,
Lead Counsel will


 


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apply
to the Court (1) for attorneys fees of up to 24% of the settlement proceeds,
and reimbursement of expenses incurred not to exceed $      
million, and (2) compensation of up to $                    
for each of the Lead Plaintiffs to reimburse them for their expenses (including
lost wages) incurred in prosecuting the Litigation, all to be paid from the
Settlement Fund.  If the amounts
requested by Lead Counsel are approved by the Court, the average cost would be
approximately $0.     per share.  The average cost per share could vary
depending on the number of shares for which valid claims are submitted.


 


This Notice is not an expression of any
opinion by the Court about the merits of any of the claims or defenses asserted
by any party in the Litigation.


 


For further information regarding this
Settlement you may contact: Rick Nelson, Lerach Coughlin Stoia & Robbins
LLP, 655 West Broadway, Suite 1900, San Diego, California 92101, Telephone:
800/449-4900.  Please do not contact the
Court or Qwest.


 


NOTICE OF SETTLEMENT
HEARING ON PROPOSED SETTLEMENT


 


A settlement hearing will be held on                           ,
2005, at              .m.,
before the Honorable Robert E. Blackburn, United States District Judge,
District of Colorado, United States Courthouse, 901 19th Street, Room A-105,
Denver, Colorado (the “Settlement Hearing”). 
The purpose of the Settlement Hearing will be to determine:
(1) whether the settlement consisting of $400,000,000 in cash (plus any
accrued interest) should be approved as fair, reasonable and adequate to members
of the Class; (2) whether the proposed plan to distribute the settlement
proceeds (the “Plan of Allocation”) is fair, reasonable, and adequate;
(3) whether the application by Lead Counsel for an award of attorneys’
fees and reimbursement of expenses and the Lead Plaintiffs’ request for


 


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reimbursement
of their expenses (including lost wages) should be approved; and
(4) whether the Litigation should be dismissed with prejudice and the
Released Persons (defined below) released from all Released Claims (defined
below) against them.  The Court may
adjourn or continue the Settlement Hearing or modify any dates set forth herein
without further notice to the Class.


 


I.              DEFINITIONS USED IN THIS NOTICE


 


1.             “Arthur Andersen
LLP” means Arthur Andersen LLP, and all of its respective past and present
subsidiaries, parents, successors and predecessors, and all of its current and
former partners, members, principals, participating principals, national
directors, managing or other agents, management personnel, officers, directors,
shareholders, administrators, servants, employees, consultants, advisors, attorneys,
accountants, representatives, successors and assigns, along with the heirs, spouses,
executors, administrators, insurers, reinsurers, representatives, estates, successors
and assigns of any such person or entities.


 


2.             “Arthur Andersen
Released Parties” means Arthur Andersen LLP, AWSC Société Coopérative, en
liquidation, and all of their respective past and present subsidiaries,
parents, successors and predecessors, member firms, affiliates, related
entities, and divisions, and all of their respective current and former
partners, members, principals, participating principals, national directors,
managing or other agents, management personnel, officers, directors,
shareholders, administrators, servants, employees, consultants advisors,
attorneys, accountants, representatives, successors and


 


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assigns, along with
the heirs, spouses, executors, administrators, insurers, reinsurers,
representatives, estates, successors and assigns of any such person or
entities.


 


3.             “Authorized
Claimant” means any Class Member whose claim for recovery has been allowed
pursuant to the terms of the Stipulation


 


4.             “Claims
Administrator” means Gilardi & Co. LLC.


 


5.             “Class” means all
persons who purchased or otherwise acquired Qwest publicly traded securities
(including common stock, bonds, and options) from May 24, 1999 through July 28,
2002 (“Class Period”). Excluded from the Class are Defendants and any Persons
affiliated with or related to any Defendant. For purposes of this paragraph,
the persons affiliated with or related to any Defendant are members of the
immediate family of each Individual Defendant, any entity in which any
Defendant has a controlling interest, officers and directors of Qwest and its
subsidiaries and affiliates, partners, shareholders, and members of Arthur
Andersen LLP, and the legal representatives, heirs, predecessors, successors
and assigns of any such excluded party. Also excluded from the Class are those
Persons who request exclusion from the Class in such form and manner, and
within such time, as the Court shall prescribe. Also excluded from the Class is
any current or former officer, director, employee, or agent of Qwest who has
been sued by the United States Securities and Exchange Commission in connection
with such Person’s affiliation with or conduct related to Qwest.


 


6.             “Class Member”
means a Person who falls within the definition of the Class.


 


7.             “Defendants” means
Qwest Communications International Inc., Arthur Andersen LLP, and the
Individual Defendants.


 


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8.             “Individual
Defendants” means Joseph Nacchio, Philip Anschutz, Robin Szeliga, Robert
Woodruff, Stephen Jacobsen, Drake Tempest, Marc Weisberg, James Smith, Lewis
Wilks, Craig Slater, Afshin Mohebbi, Gregory Casey, and Vinod Khosla.


 


9.             “Individual
Settling Defendants” means Philip Anschutz, Robin Szeliga, Stephen Jacobsen,
Drake Tempest, Marc Weisberg, James Smith, Lewis Wilks, Craig Slater, Afshin
Mohebbi, Gregory Casey, and Vinod Khosla.


 


10.           “Judgment” means the
judgment to be rendered by the Court, substantially in the form attached as
Exhibit B to the Stipulation.


 


11.           “Lead Counsel” means
Lerach, Coughlin, Stoia, Geller, Rudman & Robbins LLP, 655 W. Broadway,
Suite 1900, San Diego, CA 92101-3301.


 


12.           “Lead Plaintiffs”
means New England Healthcare Employees Pension Fund, Satpal Singh, Tejinder
Singh, and Clifford Mosher.


 


13.           “Net Settlement Fund”
means the Settlement Fund, together with any interest earned thereon, less (i)
any taxes, (ii) the cash allocated to Lead Counsel for attorneys’ fees and
expenses pursuant to any Fee and Expense Application approved by the Court pursuant
to ¶7.1 and 7.2 of the Stipulation, and (iii) the cash allocated to the Class
Notice and Administration Fund pursuant to ¶2.8 of the Stipulation.


 


14.           “Non-Settling
Defendant” means Joseph P. Nacchio (“Nacchio”) and Robert S. Woodruff (“Woodruff’),
or either of them. Nacchio and Woodruff are expressly excluded from the
definitions of Qwest, Related Parties, Released Persons, Settling Defendants,
and Settling Parties.


 


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15.           “Plan of Allocation”
means a plan or formula of allocation of the Settlement Fund whereby the Net
Settlement Fund shall be distributed to Authorized Claimants after payment of
expenses of notice and administration of the settlement, Taxes and Tax Expenses
and such attorneys’ fees, costs, expenses and interest as may be awarded by the
Court. Any Plan of Allocation is not part of the Stipulation and the Settling
Defendants and the Related Parties shall have no liability with respect
thereto.


 


16.           “Qwest” means Qwest
Communications International Inc., any and all successors, subsidiaries, and
affiliates of Qwest Communications International Inc., and any and all current
and former officers, directors, employees and agents of any of them, as well as
any predecessors of Qwest (including but not limited to US West and any
successors, subsidiaries, and affiliates thereof) and their successors,
subsidiaries, and affiliates, and any and all current and former officers,
directors, employees and agents of any of them. Notwithstanding the foregoing,
neither Nacchio nor Woodruff is included in the definition of Qwest.


 


17.           “Related Parties”
means each of a Settling Defendant’s past or present directors, officers,
partners, members, employees, controlling shareholders, attorneys, accountants
or auditors, banks or investment banks, advisors, personal or legal
representatives, insurers, reinsurers, predecessors, successors, parents,
subsidiaries, divisions, assigns, spouses, heirs, related or affiliated
entities, any partnership in which a Settling Defendant is a general or limited
partner, any entity in which a Settling Defendant has a controlling interest,
any member of an Individual Settling Defendant’s immediate family, or any trust
or foundation of which any Settling Defendant is the settlor or which is


 


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for the benefit of
any Individual Settling Defendant and/or member(s) of his or her family.
Notwithstanding the foregoing, neither Nacchio nor Woodruff is included in the
definition of Related Parties.


 


18.           “Released Claims”
shall collectively mean all claims, demands, rights, liabilities and causes of
action of every nature and description whatsoever, whether based in law or
equity, on federal, state, local, foreign, statutory or common law, or any other
law, rule, or regulation (including, but not limited to, all claims arising out
of or relating to any acts, omissions, disclosures, public filings,
registration statements, financial statements, audit opinions, or statements by
the Settling Defendants, including without limitation, claims for negligence,
gross negligence, constructive or actual fraud, negligent misrepresentation,
conspiracy, or breach of fiduciary duty), whether known or unknown, whether or
not concealed or hidden, accrued or not accrued, foreseen or unforeseen,
matured and not matured, that were asserted or that could have been asserted
directly, indirectly, representatively or in any other capacity, at any time,
in any forum by Lead Plaintiffs, the Class Members, or the successors or assigns
of any Lead Plaintiff or Class Member, or any of them against the Released
Persons arising out of, based upon, or related in any way to: (a) the purchase,
acquisition, sale, or disposition of Qwest securities by any Lead Plaintiffs or
any


 


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Class Member during
the Class Period and the allegations that were made or could have been made in
the Litigation; (b) the purchase or other acquisition of, the retention of, the
sale or other disposition of, or any other transaction involving Qwest
securities by any of the Released Persons during the Class Period; or (c) the
settlement or resolution of the Litigation (including, without limitation, any
claim for attorneys’ fees by Lead Plaintiffs or any Class Member). Released
Claims shall also include claims related to any tax effects or tax liabilities
(including any interest, penalties and representation costs) arising out of
this Stipulation or any payment or transfer made pursuant to this Stipulation.  Released Claims shall also include Unknown
Claims otherwise subject to this provision. Released Claims shall not include
the claims asserted in the Second Amended and Consolidated Complaint filed in
the United States District Court for the District of Colorado on May 21, 2003
in In re Qwest Savings and Retirement Plan
ERISA Litigation 02-CV-00464-REB-CBS (and all cases consolidated
therein).


 


19.           “Released Persons”
means each and all of the Settling Defendants and their Related Parties, and
the Arthur Andersen Released Parties. Notwithstanding the foregoing, neither
Nacchio nor Woodruff is included in the definition of Released Persons.


 


20.           “SEC Distribution
Fund” means those funds paid by Qwest Communications International Inc.
pursuant to the Final Judgment as to Defendant Qwest Communications
International Inc. in Securities and
Exchange Commission v. Qwest Communications International Inc., Civil
Action No. 04-7-2179 (Oct. 21, 2004), into an account in the Court Registry
Investment System initially established in Securities
and Exchange Commission v. Augustine Cruciotti, Civil Action No.
04-D-1267 (MJW) (D. Colo.), that are made available for distribution to the
Class pursuant to the Plan of Allocation, together with such other funds paid
into that same account by other Persons pursuant to any separate final
judgments or agreements that those Persons have entered into or may enter into
with the Securities and Exchange Commission that are also made available for
distribution to the Class pursuant to the Plan of Allocation.


 


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21.           “Settlement Fund”
means the principal amount of $400,000,000.00 (FOUR HUNDRED million dollars) in
cash plus all interest earned thereon pursuant to this Stipulation and the SEC
Distribution Fund.


 


22.           “Settling Defendants”
means, collectively, Qwest, Arthur Andersen LLP, and each of the Individual
Settling Defendants. Notwithstanding the foregoing, neither Nacchio nor
Woodruff is included in the definition of Settling Defendant.


 


23.           “Settling Parties”
means, collectively, each of the Settling Defendants and the Lead Plaintiffs on
behalf of themselves and the Class Members. Notwithstanding the foregoing,
neither Nacchio nor Woodruff is included in the definition of Settling Parties.


 


24.           “Unknown Claims”
means any claims that any Class Member or Lead Plaintiffs do not know or
suspect to exist in his, her, its or their favor at the time of the release of
the Released Persons which, if known by him, her, it, or them might have
affected his, her, its or their settlement with and release of the Released
Persons, or might have affected his, her, its, or their decision not to object
to this settlement. With respect to any and all Released Claims, the Settling
Parties stipulate and agree that, upon the Effective Date, the Lead Plaintiffs
shall expressly, and each of the Class Members shall be deemed to have, and by
operation of the Judgment shall have, expressly waived the provisions, rights
and benefits of California Civil Code §1542, which provides:


 


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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.


 


The Lead Plaintiffs shall expressly, and each
of the Class Members shall be deemed to have, and by operation of the Judgment
shall have, expressly waived any and all provisions, rights and benefits
conferred by any law, or principle of common law, which is similar, comparable
or equivalent to California Civil Code §1542. The Lead Plaintiffs and Class
Members may hereafter discover facts in addition to or different from those
that he, she, it or they now know or believe to exist or to be true with
respect to the subject matter of the Released Claims, but the Lead Plaintiffs
shall have, and each Class Member, upon the Effective Date, and by operation of
the Judgment shall be deemed to have, fully, finally, and forever settled and
released any and all Released Claims, known or unknown, suspected or
unsuspected, contingent or non-contingent, whether or not concealed or hidden,
which now exist, or heretofore have existed, upon any theory of law or equity
now existing or coming into existence in the future, including, but not limited
to, conduct that is negligent, intentional, with or without malice, or a breach
of any duty, law or rule, without regard to the subsequent discovery or
existence of such different or additional facts. The Lead Plaintiffs
acknowledge, and the Class Members shall be deemed by operation of the Judgment
to have acknowledged, that the foregoing waiver was separately bargained for
and a material element of the settlement of which this release is a part.


 


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II.                                     THE LITIGATION


 


On July 27, 2001, New England Healthcare
Employees Pension Fund filed a class action complaint, entitled New England Health Care Employees Fund v. Qwest et a/.,
Civil Action No. 01-N-1451-REB-CBS, in the United States District Court for the
District of Colorado, alleging various violations of the federal securities
laws. A number of similar class action complaints were subsequently filed in
the United States District Court for the District of Colorado.  Pursuant to the Private Securities Litigation
Reform Act of 1995, all of the related class action complaints were
consolidated under the first filed case No. 01-N-1451; New England Healthcare
Employees Pension Fund, Clifford Mosher, Tejinder Singh, and Satpal Singh were
appointed Lead Plaintiffs; and a consolidated class action complaint was
filed.  Lead Plaintiffs filed amended
complaints on December 3, 2001, April 5, 2002, May 2, 2002, August 21, 2002,
and February 6, 2004.  In the Fifth
Amended Complaint, the named defendants in the Litigation were Qwest
Communications International Inc., Arthur Andersen LLP, Joseph Nacchio, Philip
Anschutz, Robin Szeliga, Robert Woodruff, Stephen Jacobsen, Drake Tempest, Marc
Weisberg, James Smith, Lewis Wilks, Craig Slater, Afshin Mohebbi, Gregory
Casey, and Vinod Khosla. The causes of action asserted in the Fifth Amended
Complaint were for violations of the Securities Act of 1933 and the Securities
Exchange Act of 1934. Lead Plaintiffs sought to recover money and/or other
relief on behalf of themselves and a putative class.


 


On November 4, 2002, Lead Plaintiffs moved
for a temporary restraining order and a preliminary injunction to prevent Qwest
from selling certain assets, or, in the alternative, to place the proceeds from
that sale in trust. Qwest opposed that motion. The Court denied


 


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Lead
Plaintiffs’ request for a temporary restraining order, and following
supplemental briefing and a hearing at which both sides presented evidence,
denied Lead Plaintiffs’ request for a preliminary injunction.


 


Defendants moved to dismiss Lead Plaintiffs’
various consolidated amended complaints, and Lead Plaintiffs opposed Defendants’
motions. Defendants’ motions to dismiss were granted in part and denied in
part, with some Individual Defendants being dismissed from the Litigation. In
other instances, the claims or allegations against Defendants were narrowed.


 


Those Defendants not dismissed from the
Litigation filed answers denying all material allegations of Lead Plaintiffs’
Fifth Amended Complaint and asserted various defenses. Lead Plaintiffs and
Defendants engaged in extensive discovery, which has been coordinated with
discovery in several other state and federal securities actions. For example,
Qwest has produced more than 8,000,000 pages of documents, and Lead Plaintiffs
and Defendants have conducted more than 50 depositions. Those depositions began
in early 2005.


 


On March 14, 2005, Lead Plaintiffs filed a
motion for class certification, which Defendants opposed. Upon Final Settlement
Approval, the Stipulation renders Lead Plaintiffs’ motion for class
certification moot as to the Settling Defendants.


 


III.           CLAIMS OF THE LEAD PLAINTIFFS AND BENEFITS OF SETTLEMENT


 


The Lead Plaintiffs believe that the claims
asserted in the Litigation have merit and believe that the evidence developed
to date supports the claims. However, the Lead Plaintiffs and Lead Counsel
recognize and acknowledge the expense and length of


 


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continued
proceedings necessary to prosecute the Litigation against the Settling
Defendants through trial and appeals. The Lead Plaintiffs and Lead Counsel also
have taken into account the uncertain outcome and the risk of any litigation,
especially in complex actions such as this Litigation, as well as the
difficulties and delays inherent in such litigation. The Lead Plaintiffs and
Lead Counsel are also mindful of the inherent problems of proof under and
possible defenses to the violations asserted in the Litigation. The Lead
Plaintiffs and Lead Counsel believe that the settlement set forth in the
Stipulation confers substantial benefits upon the Class Members.  Based on their evaluation, the Lead Plaintiffs
and Lead Counsel have determined that the settlement set forth in the
Stipulation is in the best interests of the Class.


 


IV.                                DEFENDANTS’ STATEMENT AND
DENIALS OF WRONGDOING AND LIABILITY


 


The Defendants have denied and continue to
deny each and all of the claims and contentions alleged in the Litigation. The
Defendants expressly have denied and continue to deny all charges of wrongdoing
or liability against them arising out of any of the conduct, statements, acts
or omissions alleged, or that could have been alleged, in the Litigation. The
Defendants also have denied and continue to deny, inter alia, the allegations that the Lead Plaintiffs or the
Class have suffered any damages, and that the Lead Plaintiffs or the Class were
harmed by the conduct alleged in the Litigation.


 


Nonetheless, the Settling Defendants have
concluded that further conduct of the Litigation would be protracted and
expensive, and that it is desirable that the Litigation be fully and finally
settled in the manner and upon the terms and conditions set forth in the
Stipulation.  The Settling Defendants
also have taken into account the uncertainty and risks


 


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inherent
in any litigation, especially in complex cases like this Litigation. The
Settling Defendants have, therefore, determined that it is desirable and
beneficial to them that the Litigation be settled in the manner and upon the
terms and conditions set forth in this Stipulation.


 


V.                                    TERMS OF THE PROPOSED SETTLEMENT


 


The Settlement Fund consists of $400 million
in cash, plus any accrued interest thereon. 
Additionally, the Settlement Fund may include an additional
approximately $250 million in cash from the SEC Distribution Fund, should the
United States Securities and Exchange Commission agree that those monies may be
distributed pursuant to the Plan of Allocation. 
A portion of the Settlement Fund will be used for certain administrative
expenses, including costs of printing and mailing notice of the settlement, the
cost of publishing newspaper notices, payment of any taxes assessed against the
Settlement Fund and costs associated with the processing of claims
submitted.  In addition, as explained
below, a portion of the Settlement Fund may be awarded by the Court to Lead
Counsel as attorneys’ fees and for reimbursement of out-of-pocket expenses and
to Lead Plaintiffs for reimbursement of their expenses (including lost wages)
in representing the Class.  The balance
of the Settlement Fund (the “Net Settlement Fund”) will be distributed
according to the Plan of Allocation described below to the Class Members who
submit valid and timely Proof of Claim and Release forms.


 


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VI.                                PLAN OF ALLOCATION


 


The Net Settlement Fund will be distributed
to Class Members who submit valid and timely Proof of Claim and Release forms (“Authorized
Claimants”) under the Plan of Allocation described here.


 


The Net Settlement Fund will be distributed
to Class Members who submit valid, timely Proof of Claim forms (“Authorized
Claimants”) under the Plan of Allocation described below.  The Plan of Allocation provides that you will
be eligible to participate in the distribution of the Net Settlement Fund only
if you have a net loss on all transactions in Amazon common stock, notes/debt
or options.


 


Each Authorized Claimant shall be paid the
percentage of the Net Settlement Fund that each Authorized Claimant’s claim
bears to the total of the claims of all Authorized Claimants.  Payment in this manner shall be deemed
conclusive against all Authorized Claimants.


 


The total of all profits shall be subtracted
from the total of all losses from transactions during the Class Period to
determine if a Class Member has a claim. 
Only if a Class Member had a net loss, after all profits from
transactions in Amazon common stock, notes/debt or options during the Class
Period are subtracted from all losses, will such Class Member be eligible to
receive a distribution from the Net Settlement Fund.


 


Qwest Common Stock


 


1.                                       For shares of
Qwest common stock that were purchased from May 24,
1999 through June 19, 2001, and


 


a)                                      sold
prior to June 20, 2001, the claim per share is $0 per share;


 


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b)                                     sold
from June 20, 2001 to August 1, 2001, the claim per share is $1.74 per share;


 


c)                                      sold
from August 2, 2001 to September 26, 2001, the claim per share is $4.03 per
share;


 


d)                                     sold
from September 27, 2001 to October 30, 2001, the claim per share is $7.33 per
share;


 


e)                                      sold
from October 31, 2001 to February 12, 2002, the claim per share is $10.38 per
share;


 


f)                                        retained
at the end of February 12, 2002, the claim per share is $11.16 per share.


 


2.                                       For shares of
Qwest common stock that were acquired in the June 30,
2000 merger with U.S. West, and


 


a)                                      sold
prior to June 20, 2001, the claim per share is $0 per share;


 


b)                                     sold
from June 20, 2001 to August 1, 2001, the claim per share is $2.18 per share;


 


c)                                      sold
from August 2, 2001 to September 26, 2001, the claim per share is $5.04 per
share;


 


d)                                     sold
from September 27, 2001 to October 30, 2001, the claim per share is $9.16 per
share;


 


e)                                      sold
from October 31, 2001 to February 12, 2002, the claim per share is $12.98 per
share;


 


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f)                                        retained
at the end of February 12, 2002, the claim per share is $13.95 per share.


 


3.                                       For shares of
Qwest common stock that were purchased from June 20,
2001 through August 1, 2001, and


 


a)                                      sold
prior to August 2, 2001, the claim per share is $0 per share;


 


b)                                     sold
from August 2, 2001 to September 26, 2001, the claim per share is $2.29 per
share;


 


c)                                      sold
from September 27, 2001 to October 30, 2001, the claim per share is $5.59 per
share;


 


d)                                     sold
from October 31, 2001 to February 12, 2002, the claim per share is $8.64 per share;


 


e)                                      retained
at the end of February 12, 2002, the claim per share is $9.42 per share.


 


4.                                       For shares of
Qwest common stock that were purchased from August 2,
2001 through September 26, 2001, and


 


a)                                      sold
prior to September 27, 2001, the claim per share is $0 per share;


 


b)                                     sold
from September 27, 2001 to October 30, 2001, the claim per share is $3.30 per
share;


 


c)                                      sold
from October 31, 2001 to February 12, 2002, the claim per share is $6.35 per
share;


 


d)                                     retained
at the end of February 12, 2002, the claim per share is $7.13 per share.


 


19





















 


5.                                       For shares of
Qwest common stock that were purchased from September
27, 2001 through October 30, 2001, and


 


a)                                      sold
prior to October 31, 2001, the claim per share is $0 per share;


 


b)                                     sold
from October 31, 2001 to February 12, 2002, the claim per share is $3.05 per
share;


 


c)                                      retained
at the end of February 12, 2002, the claim per share is $3.83 per share.


 


6.                                       For shares of
Qwest common stock that were purchased from October 31,
2001 through February 12, 2002, and


 


a)                                      sold
prior to 2/13/2001, the claim per share is $0 per share;


 


b)                                     retained
at the end of February 12, 2002, the claim per share is $0.78 per share.


 


7.                                       For shares of
Qwest common stock that were purchased from 2/13/2002
through July 28, 2002, and


 


a)                                      sold
prior to 6/26/2002, the claim per share is $0;


 


b)                                     sold
from 6/26/2002 through 12/31/2002, the claim per share is the lesser of:


 


i)                                         $4.19
price per share less the sales price per share,


 


ii)                                      the
purchase price per share less the sales price per share, or


 


iii)                                   $0.10
per share;


 


c)                                      retained
at the end of 12/31/2002, the claim per share is $0 per share.


 


20





















 


PUBLICLY TRADED QWEST NOTES/DEBT


 


“July Exchange Notes” defined
as notes issued pursuant to July 12, 2001 Registration Statement:


 


Qwest Capital
Funding Note 7.25% due 2/15/2011


 


Qwest Capital
Funding Note 7.75% due 2/15/2031


 


“October Exchange Notes”
defined as notes issued pursuant to October 30, 2001 Registration Statement:


 


Qwest Capital
Funding Note 5.875% due 8/03/04


 


Qwest Capital
Funding Note 7.0% due 8/03/2009


 


Qwest Capital
Funding Note 7.625% due 8/03/21


 


July Exchange Notes


 


For Qwest July Exchange Notes purchased or otherwise acquired from 7/12/2001
through July 28, 2002, and


 


a)                                      sold
prior to January 1, 2004, the claim per $1,000 par value Note is the difference
between the purchase price per $1,000 par value Note and the sales price per
$1,000 par value Note;


 


b)                                     retained
at the end of December 31, 2003, the claim per $1,000 par value Note is $0.


 


October Exchange Notes


 


For Qwest October Exchange
Notes purchased or otherwise acquired from October
30, 2001 through July 28, 2002, and


 


21





















 


a)                                      sold
prior to January 1, 2004, the claim per $1,000 par value Note is 25 percent of the difference between the purchase price per
$1,000 par value Note and the sales price per $1,000 par value Note;


 


b)                                     retained
at the end of December 31, 2003, the claim per $1,000 par value Note is $0.


 


All Other Publicly Traded
Notes/Debt


 


For all other publicly traded
Qwest Notes/Debt purchased from October 30, 2001 through July
28, 2002, and


 


a)                                      sold
prior to January 1, 2004, the claim per $1,000 par value Note/Debt is 10  percent of the
difference between the purchase price per $1,000 par value Note/Debt and the
sales price per $1,000 par value Note/Debt;


 


b)                                     retained
at the end of December 31, 2003, the claim per $1,000 par value Note/Debt is
$0.


 


QWEST OPTIONS


 


Call Options


 


1.                                       For
Call Options on Qwest common stock that were purchased
during the period 5/24/99 through 7/28/02, and,


 


a)                                      owned at the end of one of the
following dates: June 19, 2001, August 1, 2001, September 26, 2001, October 30,
2001, February 12, 2002 or 6/25/2002, the claim per Call Option is the
difference between the price paid for the Call Option less the proceeds
received upon the settlement of the Call Option contract;


 


22





















 


b)                                     not owned at the end of one of the
following dates: June 19, 2001, August 1, 2001, September 26, 2001, October 30,
2001, February 12, 2002 or 6/25/2002, the claim per Call Option is $0.


 


2.               For Call Options on Qwest common stock
that were written during the period 5/24/99 through
7/28/02, the claim per Call Option is $0.


 


Put Options


 


1.                                       For
Put Options on Qwest common stock that were written
during the period 5/24/99 through 7/28/02, and


 


a)                                      owned at the end of one of the
following dates: June 19, 2001, August 1, 2001, September 26, 2001, October 30,
2001, February 12, 2002 or 6/25/2002, the claim per Put Option is the
difference between the amount paid upon settlement of the Put Option contract
less the initial proceeds received upon the sale of the Put Option contract.


 


b)                                     not owned at the end of one of the
following dates: June 19, 2001, August 1, 2001, September 26, 2001, October 30,
2001, February 12, 2002 or 6/25/2002, the claim per Put Option is $0.


 


2.                                       For
Put Options on Qwest common stock that were purchased
during the period 5/24/99 through 7/28/02, the claim per Put
Option is $0.


 


3.                                       Note:  In the case the option was exercised for
Qwest common stock, the amount paid, or proceeds received, upon the settlement
of the option contract equals the intrinsic value of the option using Qwest
common stock’s closing price on the date the option was exercised.


 


23





















 


The total recovery for publicly traded
notes/debt shall not exceed 5% of the Net Settlement Fund.  Total recovery for options shall not exceed
1% of the Net Settlement Fund.  Based on
the Section 11 claims under the Securities Act of 1933, shares of Qwest common
stock acquired in the June 30, 2000 Merger with U.S. West will receive a 25%
premium from shares purchased on the open market during the Class Period.  The date of purchase or sale is the “contract”
or “trade” date as distinguished from the “settlement” date.  The determination of the price paid per share
or security and the price received per share or security shall be exclusive of
all commissions, taxes, fees and charges.


 


For Settlement Class Members who held shares
at the beginning of the Settlement Class Period or made multiple purchases or
sales during the Settlement Class Period, the first-in, first-out (“FIFO”)
method will be applied to such holdings, acquisitions and sales for purposes of
calculating a claim.  Under the FIFO
method, sales of shares during the Settlement Class Period will be matched, in
chronological order, first against shares held at the beginning of the
Settlement Class Period.  The remaining
sales of shares during the Settlement Class Period will then be matched, in
chronological order, against shares purchased or acquired during the Settlement
Class Period.


 


The Court has reserved jurisdiction to allow,
disallow or adjust the claim of any Class Member on equitable grounds.


 


VII.                            PARTICIPATION IN THE CLASS


 


If you fall within the definition of the
Class, you are a Class Member unless you elect to be excluded from the Class (see Section VIII below).  If you do not request to be excluded from the
Class in the manner specified in Section VIII below, you will be bound by


 


24





















 


any
Judgment entered with respect to the settlement in the Litigation whether or not
you submit a Proof of Claim and Release form.


 


If you are a Class Member, you
need do nothing (other than timely file a properly completed Proof of Claim and
Release form if you wish to participate in the distribution of the Net
Settlement Fund).  Your interests will be
represented by Lead Plaintiffs and Lead Counsel.  If you choose, you may enter an appearance
individually or through your own counsel at your own expense; provided,
however, that in order to be heard at the Settlement Hearing or pose an objection
to the settlement, you and your counsel must follow the procedures set forth in
Section XII below.


 


TO
PARTICIPATE IN THE DISTRIBUTION OF THE NET SETTLEMENT FUND, YOU MUST TIMELY
COMPLETE AND RETURN THE PROOF OF CLAIM AND RELEASE FORM THAT ACCOMPANIES THIS
NOTICE. 
The Proof of Claim and Release form must be postmarked on or before                         ,
2006, and sent to the Qwest Claims Administrator at the address below.  Unless the Court orders otherwise, if you do
not timely submit a valid Proof of Claim and Release form, you will be barred
from receiving any payments from the Net Settlement Fund, but will in all other
respects be bound by the provisions of the Stipulation and the Judgment.


 


VIII.                        EXCLUSION FROM THE CLASS


 


You may request to be excluded from the
Class.  To do so, you must mail a written
request stating that you wish to be excluded from the Class to:


 


Qwest Claims Administrator

c/o Gilardi & Co. LLC

P.O. Box 5100

Larkspur, California 94977-5100


 


25





















 


In order to be valid and effective, the
request for exclusion must contain the following information:


 


First, list your name, address, and telephone
number


 


Second, for each purchase or other
acquisition of any Qwest stock, bonds, or options from May 24, 1999 through
July 28, 2002, identify (i) the date the stock, bonds, or options were
purchased or otherwise acquired; (ii) the number of shares, bonds, or options
that were purchased or otherwise acquired; and (iii) the price paid for each
share, bond, or option purchased or otherwise acquired.


 


Third, for each purchase or other acquisition
of any Qwest stock, bonds, or options from May 24, 1999 through July 28, 2002,
state whether such stock, bonds or options were sold or otherwise disposed of
and, for each such sale or disposition identify (i) the date the stocks, bonds,
or options were sold or otherwise disposed of; (ii) the number of shares,
bonds, or options that were sold or otherwise disposed of; and (iii) the price
obtained for each share, bond, or option sold or otherwise disposed of.


 


Fourth, separately identify the number of
shares of Qwest common stock (if any) acquired as a result of the merger
between Qwest and US West, the record date of which was June 30, 2000.


 


YOUR EXCLUSION
REQUEST MUST BE POSTMARKED ON OR BEFORE                     ,
2005, AND, IN ORDER TO BE VALID, MUST CONTAIN ALL OF THE FOREGOING
INFORMATION.  IF YOU SUBMIT A VALID
TIMELY, AND COMPLETE REQUEST FOR EXCLUSION, YOU SHALL HAVE NO RIGHTS UNDER THE
SETTLEMENT, SHALL NOT SHARE IN THE DISTRIBUTION OF THE NET SETTLEMENT


 


26





















 


FUND, AND SHALL NOT BE BOUND BY
THE STIPULATION OR THE FINAL JUDGMENT. 
IF YOUR EXCLUSION REQUEST FAILS TO CONTAIN ALL THE FOREGOING INFORMATION,
IT WILL BE INVALID AND YOU WILL BE BOUND BY THE TERMS AND CONDITIONS OF THE
STIPULATION AND JUDGMENT.


 


IX.                                DISMISSAL AND RELEASES


 


If the Settlement is approved, the Court will
enter a Judgment in the Litigation.  The
Judgment will dismiss the Released Claims with prejudice as to all Settling
Defendants.


 


The Judgment will also provide that all Class
Members who have not validly and timely requested to be excluded from the Class
shall be deemed to have released and forever discharged all Released Claims (to
the extent members of the Class have such claims) against all the Released
Persons.


 


X.                                    APPLICATION FOR FEES AND
EXPENSES


 


At the Settlement Hearing, Lead Counsel will
request the Court to award attorneys’ fees of     % of the
Settlement Fund, plus reimbursement of expenses, not to exceed $      
million, which were incurred in connection with the Litigation, plus interest
thereon.  Lead Counsel will not apply for
an award of attorneys’ fees and/or expenses based on the monies from the SEC
Distribution Fund.  In addition, certain
of the Lead Plaintiffs in the Litigation may seek compensation of up to $                  
each for their expenses incurred (including lost wages) in prosecuting the
Litigation.  This compensation will be
paid from the Settlement Fund and will not be paid from the SEC Distribution
Fund.  Class Members are not personally
liable for any such fees or expenses.  To
date, Lead Counsel have not


 


27





















 


received
any payment for their services in conducting the Litigation nor have counsel
been reimbursed for all of their out-of-pocket expenses incurred.


 


XI.                                CONDITIONS FOR SETTLEMENT


 


The settlement is conditioned upon the
occurrence of certain events described in the Stipulation.  Those events include, among other things:
(1) entry of the Judgment by the Court as provided for in the Stipulation;
and (2) expiration of the time to appeal from or alter or amend the
Judgment.  If, for any reason, any one of
the conditions described in the Stipulation is not met, the Stipulation might
be terminated and, if terminated, will become null and void, and the parties to
the Stipulation will be restored to their respective positions in the
Litigation prior to the Settlement.


 


XII.                            THE RIGHT TO BE HEARD AT THE
SETTLEMENT HEARING


 


Any Class Member who has not validly, timely,
and completely requested to be excluded from the Class, and who objects to any
aspect of the settlement, the Plan of Allocation, Lead Counsel’s application
for attorneys’ fees and expenses, or the Lead Plaintiffs’ request for
reimbursement may appear and be heard at the Settlement Hearing.  Any such person must file a written notice of
objection, filed with the Clerk of the Court on or before                     ,
2005, and served by hand or first class mail on each of the following:


 


CLERK OF THE COURT

DISTRICT OF COLORADO

United States Courthouse

901 19th Street, Room A-105

Denver, CO  80294


 


and


 


28





















 


LERACH COUGHLIN STOIA GELLER
  RUDMAN & ROBBINS LLP

KEITH F. PARK

655 West Broadway, Suite 1900

San Diego, CA  92101-3301


 


Lead Counsel for Plaintiffs


 


BOIES, SCHILLER & FLEXNER LLP

ALFRED LEVITT

5301 Wisconsin Ave., N.W., Suite 800

Washington, DC  20015


 


Counsel for Settling Defendant Qwest


 


ARNOLD & PORTER LLP

JOHN FREEDMAN

555 Twelfth Street, N.W.

Washington, DC  20004-1202


 


Counsel for Defendant Arthur Andersen LLP


 


Any such written objection must demonstrate
the objecting person’s membership in the Class, including the number and type
of Qwest publicly traded securities purchased and sold during the Class Period,
and contain a statement of the reasons for objection.  Only Class Members who have submitted written
notices of objection in this manner will be entitled to be heard at the
Settlement Hearing, unless the Court orders otherwise.  In addition, any Class Member who desires to
present evidence at the Settlement Hearing must include in his, her or its
written objections the identity of any witnesses he, she or it may call to
testify, and any exhibits he, she or it intends to introduce into evidence at
the Settlement Hearing.


 


XIII.                        SPECIAL NOTICE TO NOMINEES


 


If you, as nominee for a beneficial owner,
hold or held any Qwest publicly traded securities purchased or acquired during
the Class Period, then, within ten (10) days after


 


29





















 


you
receive this Notice, you must either: (1) request additional copies of the
Notice and the Proof of Claim form, and, within ten days after the receipt of
the additional copies of the Notice and the Proof of Claim form, send them by
first class mail to all such beneficial owners and send a statement to the
Claims Administrator confirming that the mailings  were made as directed; or (2) provide a
list of the names and addresses of such beneficial owners to the Qwest Claims
Administrator:


 


Qwest Claims Administrator

c/o Gilardi & Co. LLC

P.O. Box 5100

Larkspur, California 94977-5100


 


If you choose to mail the Notice and Proof of
Claim and Release yourself, you may obtain from the Qwest Claims Administrator
(without cost to you) as many additional copies of these documents as you will
need to complete the mailing.


 


Regardless of whether you choose to complete
the mailing yourself or elect to have the mailing performed for you, you may
obtain reimbursement for or advancement of reasonable administrative costs
actually incurred or expected to be incurred by you in connection with
forwarding the Notice and Proof of Claim and Release form and which would not
have been incurred but for the obligation to forward the Notice and Proof of
Claim and Release form, upon submission of appropriate documentation to the
Qwest Claims Administrator.


 


XIV.                       EXAMINATION OF PAPERS


 


This Notice is a summary and does not
describe all of the details of the Stipulation. 
For full details of the matters discussed in this Notice, you may review
the pleadings and Stipulation filed with the Court, which may be inspected
during business hours, at the office


 


30





















 


of
the Clerk of the Court, United States District Court, District of Colorado,
United States Courthouse, 901 19th Street, Room A-105, Denver, Colorado.  Further, the Stipulation, its exhibits, and
additional copies of this Notice and the Proof of Claim and Release are
available on the Internet at www.gilardi.com.


 


If you have any questions about the
settlement of the Litigation, you may contact Lead Counsel by writing:


 


LERACH COUGHLIN STOIA GELLER
  RUDMAN & ROBBINS LLP

KEITH F. PARK

655 West Broadway, Suite 1900

San Diego, CA  92101-3301


 


PLEASE DO NOT CONTACT THE COURT OR QWEST
REGARDING THIS NOTICE.


 


	
  DATED:

  	
   

  	
  , 2005

  	
  BY ORDER OF THE COURT

  
	
   

  	
  UNITED STATES DISTRICT COURT

  
	
   

  	
  DISTRICT OF COLORADO

  



 


31





















 


IN THE UNITED STATES DISTRICT
COURT

FOR THE DISTRICT OF COLORADO


 


Civil Action No. 01-cv-1451-REB-CBS

(Consolidated with Civil Action Nos. 01-cv-1472-REB-CBS, 01-cv-1527-REB-CBS, 01-cv-1616-REB-CBS,
01-cv-1799-REB-CBS, 01-cv-1930-REB-CBS, 01-cv-2083-REB-CBS, 02-cv-0333-REB-CBS,
02-cv-0374-REB-CBS, 02-cv-0507-REB-CBS, 02-cv-0658-REB-CBS, 02-cv-755-REB-CBS,
02-cv-798-REB-CBS and 04-cv-0238-REB-CBS)


 


In re QWEST COMMUNICATIONS INTERNATIONAL,
INC. SECURITIES LITIGATION


 


PROOF OF CLAIM AND RELEASE


 


EXHIBIT A-2


 





















 


I.                                         GENERAL INSTRUCTIONS


 


1.                                       To recover from the Settlement
Fund as a Class Member based on your claims in the consolidated action
entitled In re Qwest Communications International, Inc.
Securities Litigation, Civil Action No. 01-cv-1451-REB-CBS (the
“Litigation”), you must complete and sign this Proof of Claim and Release.  If you fail to execute and submit a timely,
properly completed and addressed (as set forth in paragraph 3 below) Proof of
Claim and Release, your claim may be rejected and you may be precluded from any
recovery from the Settlement Fund created in connection with the settlement of
the Litigation.


 


2.                                       Submission of this Proof of
Claim and Release, however, does not assure that you will share in the
Settlement Fund.


 


3.                                       YOU MUST MAIL YOUR COMPLETED AND
SIGNED PROOF OF CLAIM AND RELEASE POSTMARKED ON OR BEFORE                           ,
2006, ADDRESSED AS FOLLOWS:


 


Qwest Claims Administrator


c/o Gilardi & Co. LLC


P.O. Box 5100


Larkspur, California  94977-5100


 


If you are NOT a Class Member (as defined in the Notice of
Pendency and Partial Settlement of Class Action) DO NOT submit a Proof of
Claim and Release form.


 


If you are a Class Member and you have
not validly and timely requested exclusion, you will be bound by the terms of
the Final Judgment entered in the Litigation, WHETHER OR NOT YOU SUBMIT A PROOF
OF CLAIM AND RELEASE.


 


1





















 


II.                                     DEFINITIONS


 


All capitalized terms not otherwise defined herein shall have the same
meaning as set forth in the Notice of Pendency and Partial Settlement of Class Action
(“Notice”) that accompanies this Proof of Claim and Release.


 


III.                                 IDENTIFICATION OF CLAIMANT


 


1.                                       If you purchased Qwest publicly
traded securities during the Class Period and held the securities in your
name, you are the beneficial purchaser, seller or holder as well as the record
purchaser, seller or holder.  If,
however, you purchased Qwest publicly traded securities during the Class Period
and the securities were registered in the name of a third party, such as a
nominee or brokerage firm, you are the beneficial purchaser, seller or holder
of these securities, but the third party is the record purchaser, seller or
holder of these securities.


 


2.                                       Use Part I of this form
entitled “Claimant Identification” to identify each purchaser, seller or holder
of record (“nominee”), if different from the beneficial purchaser of Qwest
publicly traded securities which forms the basis of this claim.  THIS CLAIM MUST BE SUBMITTED BY THE ACTUAL
BENEFICIAL PURCHASER OR THE LEGAL REPRESENTATIVE OF SUCH PURCHASER OF QWEST
PUBLICLY TRADED SECURITIES UPON WHICH THIS CLAIM IS BASED.


 


3.                                       All joint beneficial purchasers,
sellers or holders must sign this claim. 
Executors, administrators, guardians, conservators and trustees must
complete and sign this claim on behalf of persons represented by them and their
authority must accompany this claim and their titles or capacities must be
stated.  The Social Security (or taxpayer


 


2





















 


identification) number and telephone number
of one of the beneficial owner(s) may be used in verifying this claim.  Failure to provide the foregoing information
could delay verification of your claim or result in rejection of your claim.


 


IV.                                IDENTIFICATION OF TRANSACTION(S)


 


1.                                       Use Part II of this form
entitled “Schedule of Transactions in Qwest Publicly Traded Securities” to
supply all required details of your transaction(s) in Qwest publicly traded
securities.  If you need more space or
additional schedules, attach separate sheets giving all of the required
information in substantially the same form. 
Sign and print or type your name on each additional sheet.


 


2.                                       On the schedules, provide all of
the requested information with respect to all of your holdings of Qwest publicly traded
securities as of May 24, 1999, all of your purchases and sales of Qwest
publicly traded securities which took place at any time beginning May 24,
1999 through and including July 28, 2002 (the “Class Period”), as
well as proof of your holdings of Qwest publicly traded securities as of the
close of trading on July 28, 2002, whether such transactions resulted in a
profit or a loss.  Failure to report all
such transactions may result in the rejection of your claim.


 


3.                                       List each purchase and sale in
the Class Period separately by security and in chronological order, by
trade date, beginning with the earliest. 
You must accurately provide the month, day and year of each such
transaction you list.


 


4.                                       The date of covering a “short sale”
is deemed to be the date of purchase of Qwest securities.  The date of a “short sale” is deemed to be
the date of sale of Qwest securities.


 


3





















 


5.                                       Broker confirmations or other
documentation of your transactions in Qwest publicly traded securities should
be attached to your claim.  Failure to
provide this documentation could delay verification of your claim or result in
rejection of your claim.


 


4





















 


UNITED STATES DISTRICT COURT


 


DISTRICT OF COLORADO


 


In re Qwest
Communications International, Inc. Securities Litigation


Civil Action No. 01-cv-1451-REB-CBS


 


PROOF OF CLAIM


 


Must be Postmarked No Later
Than:

                          ,
2006


 


Please Type or Print


 


PART I:                                                     CLAIMANT
IDENTIFICATION


 


	
   

  	
   

  	
   

  
	
  Beneficial Owner’s Name (First, Middle,
  Last)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Street Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  City

  	
   

  	
  State or Province

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Zip Code or Postal Code

  	
   

  	
  Country

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Individual

  
	
  Social Security Number or

  	
   

  	
   

  	
   

  	
   

  
	
  Taxpayer Identification Number

  	
   

  	
   

  	
  Corporation/Other

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Area Code

  	
   

  	
  Telephone Number (work)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Area Code

  	
   

  	
  Telephone Number (home)

  	
   

  
									



 


5





















 


	
   

  	
   

  	
   

  
	
  Record Owner’s Name (if different from
  beneficial owner listed above)

  	
   

  	
   

  



 


PART II:                                                 SCHEDULE OF
TRANSACTIONS IN QWEST PUBLICLY TRADED SECURITIES


 


A.                                   Number
of shares of Qwest common stock held at the beginning of trading on May 24,
1999:                                                 


 


B.                                     Number
and type of bonds held at beginning of trading on May 24, 1999:                                                             


 


C.                                     Number
of shares of Qwest common stock acquired in the Merger between Qwest and US
West: 


 


	
  Trade Date

  Month Day Year

  	
   

  	
  Number of Shares or Bonds

  Sold (specify)

  	
   

  	
  Total Sales Price

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


D.                                    Purchases
(May 24, 1999 – July 28, 2002, inclusive) of Qwest common stock and
bonds:


 


	
  Trade Date

  Month Day Year

  	
   

  	
  Number of Shares or Bonds

  Purchased (specify)

  	
   

  	
  Total Purchase Price

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


IMPORTANT:                                                                  Identify
by number listed above all purchases in which you covered a “short sale”:                                                  


6





















 


E.                                      Sales
(May 24, 1999 – July 28, 2002, inclusive) of Qwest common stock and
bonds:


 


	
  Trade Date

  Month Day Year

  	
   

  	
  Number of Shares or Bonds

  Sold (specify)

  	
   

  	
  Total Sales Price

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


F.                                      Number
of shares of Qwest common stock or bonds (specify) held at close of trading on July 28,
2002:                                                  


 


G.                                     For
bond purchasers, please list the following information for each bond purchased
during the Class Period that was later redeemed at any time:


 


	
  Type of Bond

  	
   

  	
  Date of Redemption

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


OPTION
TRANSACTIONS IN QWEST


 


H.                                    Number
of Qwest options held at beginning of trading on May 24, 1999                                                  


 


I.                                         Options:  Purchases and/or sales during the period May 24,
1999 – July 28, 2002, inclusive:


 


	
  Type

  [C]all

  [P]ut

  	
   

  	
  [B]uy

  [S]ell

  	
   

  	
  Trade Date

  Mth/Day/Year

  	
   

  	
  Number of

  Option Contracts

  Purchased/Sold

  	
   

  	
  Total Price

  	
   

  	
  Price

  Received

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


7





















 


J.                                        Number
of Qwest options held at close of trading on July 28, 2002:                                                  


 


If
you require additional space, attach extra schedules in the same format as
above.  Sign and print your name on each
additional page.


 


YOU
MUST READ THE RELEASE AND SIGN ON PAGE           .


 


8





















 


V.                                    SUBMISSION TO JURISDICTION OF
COURT AND ACKNOWLEDGMENTS


 


I (We) submit this Proof of Claim and Release under the terms of the
Stipulation of Partial Agreement of Settlement described in the Notice.  I (We) also submit to the jurisdiction of the
United States District Court for the District of Colorado with respect to my
(our) claim as a Class Member and for purposes of enforcing the release
set forth herein.  I (We) further
acknowledge that I (we) will be bound by and subject to the terms of any Final
Judgment that may be entered in the Litigation. 
I (We) agree to furnish additional information such as transactions in
other Qwest publicly traded securities to the Claims Administrator to support
this claim if requested to do so.  I (We)
have not submitted any other claim covering the same purchases, sales or
holdings of Qwest publicly traded securities during the Class Period and
know of no other person having done so on my (our) behalf.


 


VI.                                RELEASE


 


1.                                       I (We) hereby acknowledge full
and complete satisfaction of, and do hereby fully, finally and forever settle,
release and discharge from the Released Claims each and all of the Released
Persons as those terms are defined below.


 


2.                                       “Arthur Andersen LLP” means
Arthur Andersen LLP, and all of its respective past and present subsidiaries,
parents, successors and predecessors, and all of its current and former
partners, members, principals, participating principals, national directors,
managing or other agents, management personnel, officers, directors,
shareholders, administrators, servants, employees, consultants, advisors, attorneys,
accountants, representatives, successors and assigns, along with the heirs,


 


9





















 


spouses, executors, administrators, insurers,
reinsurers, representatives, estates, successors and assigns of any such person
or entities.


 


3.                                       “Arthur Andersen Released
Parties” means Arthur Andersen LLP, AWSC Société Coopérative, en liquidation,
and all of their respective past and present subsidiaries, parents, successors
and predecessors, member firms, affiliates, related entities, and divisions,
and all of their respective current and former partners, members, principals,
participating principals, national directors, managing or other agents,
management personnel, officers, directors, shareholders, administrators,
servants, employees, consultants advisors, attorneys, accountants, representatives,
successors and assigns, along with the heirs, spouses, executors,
administrators, insurers, reinsurers, representatives, estates, successors and
assigns of any such person or entities.


 


4.                                       “Individual Settling Defendants”
means Philip Anschutz, Robin Szeliga, Stephen Jacobsen, Drake Tempest, Marc
Weisberg, James Smith, Lewis Wilks, Craig Slater, Afshin Mohebbi, Gregory
Casey, and Vinod Khosla.


 


5.                                       “Qwest” means Qwest
Communications International Inc., any and all successors, subsidiaries, and
affiliates of Qwest Communications International Inc., and any and all current
and former officers, directors, employees and agents of any of them, as well as
any predecessors of Qwest (including but not limited to US West and any
successors, subsidiaries, and affiliates thereof) and their successors,
subsidiaries, and affiliates, and any and all current and former officers,
directors, employees and agents of any of them. 
Notwithstanding the foregoing, neither Nacchio nor Woodruff is included
in the definition of Qwest.


 


10





















 


6.                                       “Related Parties” means each of
a Settling Defendant’s past or present directors, officers, partners, members,
employees, controlling shareholders, attorneys, accountants or auditors, banks
or investment banks, advisors, personal or legal representatives, insurers,
reinsurers, predecessors, successors, parents, subsidiaries, divisions,
assigns, spouses, heirs, related or affiliated entities, any partnership in
which a Settling Defendant is a general or limited partner, any entity in which
a Settling Defendant has a controlling interest, any member of an Individual
Settling Defendant’s immediate family, or any trust or foundation of which any
Settling Defendant is the settlor or which is for the benefit of any Individual
Settling Defendant and/or member(s) of his or her family. Notwithstanding the
foregoing, neither Nacchio nor Woodruff is included in the definition of
Related Parties.


 


7.                                       “Released Claims” shall
collectively mean all claims, demands, rights, liabilities and causes of action
of every nature and description whatsoever, whether based in law or equity, on
federal, state, local, foreign, statutory or common law, or any other law,
rule, or regulation (including, but not limited to, ail claims arising out of
or relating to any acts, omissions, disclosures, public filings, registration
statements, financial statements, audit opinions, or statements by the Settling
Defendants, including without limitation, claims for negligence, gross
negligence, constructive or actual fraud, negligent misrepresentation,
conspiracy, or breach of fiduciary duty), whether known or unknown, whether or
not concealed or hidden, accrued or not accrued, foreseen or unforeseen,
matured and not matured, that were asserted or that could have been asserted
directly, indirectly, representatively or in any other capacity, at any time,
in any forum by Lead Plaintiffs, the


 


11





















 


Class Members, or the successors or
assigns of any Lead Plaintiff or Class Member, or any of them against the
Released Persons arising out of, based upon, or related in any way to: (a) the
purchase, acquisition, sale, or disposition of Qwest securities by any Lead
Plaintiffs or any Class Member during the Class Period and the
allegations that were made or could have been made in the Litigation; (b) the
purchase or other acquisition of, the retention of, the sale or other
disposition of, or any other transaction involving Qwest securities by any of
the Released Persons during the Class Period; or (c) the settlement
or resolution of the Litigation (including, without limitation, any claim for
attorneys’ fees by Lead Plaintiffs or any Class Member). Released Claims
shall also include claims related to any tax effects or tax liabilities
(including any interest, penalties and representation costs) arising out of
this Stipulation or any payment or transfer made pursuant to this Stipulation.
Released Claims shall also include Unknown Claims otherwise subject to this
provision. Released Claims shall not include the claims asserted in the Second
Amended and Consolidated Complaint filed in the United States District Court
for the District of Colorado on May 21, 2003 in In re Qwest Savings and Retirement Plan ERISA Litigation 02-CV-00464-REB-CBS
(and all cases consolidated therein).


 


8.                                       “Released Persons” means each
and all of the Settling Defendants and their Related Parties, and the Arthur
Andersen Released Parties. Notwithstanding the foregoing, neither Nacchio nor
Woodruff is included in the definition of Released Persons.


 


9.                                       “Settling Defendants” means,
collectively, Qwest, Arthur Andersen LLP, and each of the Individual Settling
Defendants. Notwithstanding the foregoing, neither Nacchio nor Woodruff is included
in the definition of Settling Defendant.


 


12





















 


10.                                 “Unknown Claims” means any
claims that any Class Member or Lead Plaintiffs do not know or suspect to
exist in his, her, its or their favor at the time of the release of the
Released Persons which, if known by him, her, it, or them might have affected
his, her, its or their settlement with and release of the Released Persons, or
might have affected his, her, its, or their decision not to object to this settlement.
With respect to any and all Released Claims, the Settling Parties stipulate and
agree that, upon the Effective Date, the Lead Plaintiffs shall expressly, and
each of the Class Members shall be deemed to have, and by operation of the
Judgment shall have, expressly waived the provisions, rights and benefits of
California Civil Code §1542, which provides:


 


A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.


 


The Lead Plaintiffs shall expressly, and each of the Class Members
shall be deemed to have, and by operation of the Judgment shall have, expressly
waived any and all provisions, rights and benefits conferred by any law, or
principle of common law, which is similar, comparable or equivalent to
California Civil Code §1542. The Lead Plaintiffs and Class Members may
hereafter discover facts in addition to or different from those that he, she,
it or they now know or believe to exist or to be true with respect to the
subject matter of the Released Claims, but the Lead Plaintiffs shall have, and
each Class Member, upon the Effective Date, and by operation of the
Judgment shall be deemed to have, fully, finally, and forever settled and
released any and all Released Claims, known or unknown, suspected or
unsuspected, contingent or non-contingent, whether or not concealed or


 


13





















 


hidden, which now exist, or heretofore have existed, upon any theory of
law or equity now existing or coming into existence in the future, including,
but not limited to, conduct that is negligent, intentional, with or without
malice, or a breach of any duty, law or rule, without regard to the subsequent
discovery or existence of such different or additional facts. The Lead
Plaintiffs acknowledge, and the Class Members shall be deemed by operation
of the Judgment to have acknowledged, that the foregoing waiver was separately
bargained for and a material element of the settlement of which this release is
a part.


 


11.                                 This release shall be of no
force or effect unless and until the Court approves the Stipulation of Partial
Settlement, and the Effective Date (as defined in the Stipulation) has
occurred.


 


12.                                 I (We) hereby warrant and
represent that I (we) have not assigned or transferred or purported to assign
or transfer, voluntarily or involuntarily, any matter released pursuant to this
release or any other part or portion thereof.


 


13.                                 I (We) hereby warrant and
represent that I (we) have included information about all of my (our) purchase
and sales transactions in Qwest publicly traded securities which occurred
during the Class Period and the number of securities held by me (us) at
the beginning of trading on May 24, 1999, and at the close of trading on July 28,
2002.


 


14.                                 I (We) hereby warrant and
represent that I (we) am (are) not excluded from the Class as defined
herein and in the Notice.


 


14





















 


SUBSTITUTE
FORM W-9


 


Request for Taxpayer
Identification Number (“TIN”) and Certification


 


PART I


 


	
  NAME:

  	
   

  



 


Check appropriate box:


 


	
  o                                    Individual/Sole
  Proprietor

  	
  o                                    Pension
  Plan

  
	
  o                                    Corporation

  	
  o                                    Partnership

  	
  o                                    Trust

  
	
  o                                    IRA

  	
  o                                    Other

  	
   

  



 


Enter TIN on appropriate
line.


 


For individuals, this is
your social security number (“SSN”).


 


For sole proprietors,
you must show your individual name, but you may also enter your business or “doing
business as” name.  You may enter either
your SSN or your Employer Identification Number (“EIN”).


 


For other entities, it
is your EIN.


 


	
           
       -           -
                     

  	
  or

  	
           
  -                    
                

  
	
  Social Security Number

  	
   

  	
  Employer Identification Number

  



 


PART II


 


For Payees Exempt from Backup
Withholding


 


If
you are exempt from backup withholding, enter your correct TIN in Part I
and write “exempt” on the following line: 
                                                                .


 


PART III


 


Certification


 


UNDER THE PENALTY OF PERJURY, I (WE) CERTIFY THAT:


 


1.                                       The number
shown on this form is my correct TIN; and


 


2.                                       I (We)
certify that I am (we are) NOT subject to backup withholding under the
provisions of Section 3406 (a)(1)(C) of the Internal Revenue Code
because:  (a) I am (we are) exempt
from backup withholding; or (b) I (we) have not been notified by the
Internal Revenue Service that I am (we are) subject to backup withholding as a


 


15





















 


result of a failure to
report all interest or dividends; or (c) the Internal Revenue Service has
notified me (us) that I am (we are) no longer subject to backup withholding.


 


16





















 


NOTE:                                                            If
you have been notified by the Internal Revenue Service that you are subject to
backup withholding, you must cross out Item 2 above.


 


SEE ENCLOSED FORM W-9
INSTRUCTIONS


 


The Internal Revenue Service does not require your consent to any
provision of this document other than the certification required to avoid
backup withholding.


 


I declare under penalty of perjury under the laws of the United States
of America that the foregoing information supplied by the undersigned is true
and correct.


 


Executed this                   
day of                                       ,

(Month / Year)


 


in                                           ,
                                                            .

(City)                                          (State
/ Country)


 


	
   

  	
   

  
	
   

  	
  (Sign your name here)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Type or print your name here)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Capacity of person(s) signing,

  
	
   

  	
  e.g., Beneficial
  Purchaser,

  
	
   

  	
  Executor or Administrator)

  



 


ACCURATE
CLAIMS PROCESSING TAKES A

SIGNIFICANT AMOUNT OF TIME.

THANK YOU FOR YOUR PATIENCE.


 


Reminder Checklist:


 


1.                                       Please sign
the above release and declaration.


 


2.                                       Remember to
attach supporting documentation, if available.


 


3.                                       Do not send
original or copies of stock certificates.


 


4.                                       Keep a copy
of your claim form for your records.


 


5.                                       If you
desire an acknowledgment of receipt of your claim form, please send it
Certified Mail, Return Receipt Requested.


 


17





















 


6.                                       If you move,
please send us your new address.


 


18





















 


IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO


 


Civil Action No. 01-cv-1451-REB-CBS

(Consolidated with Civil Action Nos. 01-cv-1472-REB-CBS, 01-cv-1527-REB-CBS,
01-cv-1616-REB-CBS, 01-cv-1799-REB-CBS, 01-cv-1930-REB-CBS, 01-cv-2083-REB-CBS,
02-cv-0333-REB-CBS, 02-cv-0374-REB-CBS, 02-cv-0507-REB-CBS, 02-cv-0658-REB-CBS,
02-cv-755-REB-CBS, 02-cv-798-REB-CBS and 04-cv-0238-REB-CBS)


 


In re QWEST COMMUNICATIONS INTERNATIONAL, INC. SECURITIES LITIGATION


 


SUMMARY NOTICE


 


EXHIBIT A-3


 





















 


 


TO:                            ALL PERSONS
OR ENTITIES THAT PURCHASED OR OTHERWISE ACQUIRED QWEST COMMUNICATIONS
INTERNATIONAL, INC. (“QWEST”) PUBLICLY TRADED SECURITIES (INCLUDING COMMON
STOCK, BONDS AND OPTIONS) FROM MAY 24, 1999 THROUGH JULY 28, 2002


 


YOU ARE HEREBY NOTIFIED that a Settlement
Hearing will be held on                          ,
2005, at            .m.,
before the Honorable Robert E. Blackburn, United States District Judge,
District of Colorado, United States Courthouse, 901 19th Street, Room A-105,
Denver, Colorado.  The Settlement Hearing
is to consider a partial settlement of certain litigation on behalf of the
class defined above (the “Litigation”). 
The purpose of the Settlement Hearing is to determine: (1) whether
the proposed partial settlement of the claims in the Litigation for the sum of
$400,000,000 (the “Settlement Fund”) should be approved by the Court as fair,
reasonable and adequate; (2) whether the Litigation should be dismissed
with prejudice against the Settling Defendants; (3) whether the Plan of
Allocation of the settlement proceeds is fair, reasonable and adequate and
should be approved; (4) whether the application of Lead Counsel for the
payment of attorneys’ fees and reimbursement of expenses incurred by Lead
Counsel in connection with the Litigation should be approved; and (5) whether
the application for reimbursement of the expenses (including lost wages) of the
Lead Plaintiffs in the Litigation should be approved.  All capitalized terms used herein shall have
the meaning assigned to them in the Stipulation.


 


If you purchased publicly traded securities
of Qwest during the period beginning May 24, 1999 through and including July
28, 2002, you may be a Class Member and your rights may be affected by the
partial settlement of the Litigation.


 


If you have not received a detailed Notice of
Pendency and Partial Settlement of Class Action (“Notice”) and a copy of the
Proof of Claim and Release, you may obtain


 


1





















 


copies
of the same by contacting: Qwest Claims Administrator, c/o Gilardi & Co.
LLC, P.O. Box 5100, Larkspur, California 94977-5100 or downloading these
documents at www.gilardi.com.  You may
also download the Stipulation of Partial Settlement at the same site.  These documents are also available for review
at the Court.


 


If you are a Class Member, in order to be
eligible to share in the distribution of the Settlement Fund, you must submit a
Proof of Claim and Release no later than                          ,
2005, establishing that you are entitled to recovery.  You will be bound by any Judgment rendered in
the Litigation whether or not you make a claim, unless you request exclusion
from the Class.


 


If you wish to request exclusion from the
class you must do so in writing by                         ,
2005 and in accordance with the procedures set forth in the Notice.  If you request exclusion from the class you
will not participate in the distribution of the Settlement Fund and you will
not be bound by the Judgment in the Litigation. 
If your exclusion request fails to contain all the information required
in the Notice, or otherwise fails to comply with the procedures set forth in
the Notice, it will be invalid and you will be bound by the terms and
conditions of the Stipulation and Judgment.


 


Any Class Member may file an objection to the
settlement, if he, she or it has any information why the proposed partial
settlement of the Litigation should not be approved or why judgment should not
be entered thereon; why any attorneys’ fees, costs, or expenses requested by
Lead Counsel or Lead Plaintiffs should not be awarded; or why the Plan of
Allocation should not be approved; provided, however, that no Class Member may
be entitled to appear at the Settlement Hearing or contest approval of the
terms and conditions


 


2





















 


of
the settlement unless, his, her or its objection or opposition, including the
basis therefor, is made in writing and mailed or delivered such that it is
filed with the Court and served on each of the following no later than                                    ,
2005:


 


CLERK OF THE COURT

DISTRICT OF COLORADO

United States Courthouse

901 19th Street, Room A-105

Denver, CO  80294


 


And


 


LERACH COUGHLIN STOIA GELLER
  RUDMAN & ROBBINS LLP

KEITH F. PARK

655 West Broadway, Suite 1900

San Diego, CA  92101-3301


 


Lead Counsel for Plaintiffs


 


BOIES, SCHILLER & FLEXNER LLP

ALFRED LEVITT

5301 Wisconsin Ave., N.W., Suite 800

Washington, DC  20015


 


Counsel for Settling Defendant Qwest


 


ARNOLD & PORTER LLP

JOHN FREEDMAN

555 Twelfth Street, N.W.

Washington, DC  20004-1202


 


Counsel for Defendant Arthur Andersen LLP


 


PLEASE DO NOT CONTACT
THE COURT OR QWEST REGARDING THIS NOTICE.


 


 


	
  DATED: 

  	
   

  	
  , 2005

  	
   

  	
  BY ORDER OF THE COURT 

  
	
   

  	
   

  	
  UNITED STATES DISTRICT COURT 

  
	
   

  	
   

  	
  DISTRICT OF COLORADO

  



 


3





















 


IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO


 


Civil Action No. 01-cv-1451-REB-CBS

(Consolidated with Civil Action Nos. 01-cv-1472-REB-CBS, 01-cv-1527-REB-CBS,
01-cv-1616-REB-CBS, 01-cv-1799-REB-CBS, 01-cv-1930-REB-CBS, 01-cv-2083-REB-CBS,
02-cv-0333-REB-CBS, 02-cv-0374-REB-CBS, 02-cv-0507-REB-CBS, 02-cv-0658-REB-CBS,
02-cv-755-REB-CBS, 02-cv-798-REB-CBS and 04-cv-0238-REB-CBS)


 


In re QWEST COMMUNICATIONS INTERNATIONAL, INC. SECURITIES LITIGATION


 


[PROPOSED] PARTIAL FINAL JUDGMENT
AND ORDER OF PARTIAL DISMISSAL WITH PREJUDICE


 


EXHIBIT B


 





















 


A hearing having been conducted by the Court
to determine whether the terms and conditions of the Stipulation of Partial
Settlement, dated as of November    , 2005 (the “Stipulation”)
are fair, reasonable and adequate for the settlement of all claims asserted by
the Lead Plaintiffs and members of the Class against the Settling Defendants,
due and adequate notice having been given to the Class required by the Court’s
Order Preliminarily Approving Settlement and Providing for Notice, and the
Court having considered all papers filed and proceedings had herein and
otherwise being fully informed in the premises and good cause appearing:


 


IT IS HEREBY ORDERED, ADJUDGED AND DECREED
THAT:


 


1.                                       The
Stipulation, including the definitions contained therein, is incorporated by
reference in this Judgment.


 


2.                                       The
Court has jurisdiction over the subject matter of the Litigation and all
parties to the Litigation, including Class Members.


 


3.                                       The
Court finds that the prerequisites for a class action under Federal Rules of
Civil Procedure (“Fed. R. Civ. P.”) 23(a) and (b)(3) have been satisfied in
that: (a) the number of Class Members is so numerous that joinder of all members
thereof is impracticable; (b) there are questions of law and fact common to the
Class; (c) the claims of the Lead Plaintiffs are typical of the claims of the
Class they seek to represent; (d) the Lead Plaintiffs have represented and will
fairly and adequately represent the interests of the Class; (e) the questions
of law and fact common to members of the Class predominate over any questions
affecting any individual members of the Class; and (f) a class action is
superior to other available methods for the fair and efficient adjudication of
the controversy.


 


1





















 


4.                                       Pursuant
to Fed. R. Civ. P. 23, this Court hereby finally certifies this Litigation as a
class action (for settlement purposes only) on behalf of all persons who
purchased or otherwise acquired Qwest publicly traded securities (including
common stock, bonds, and options) from May 24, 1999 through July 28, 2002 (“Class
Period”). Excluded from the Class are Defendants and any Persons affiliated with
or related to any Defendant. For purposes of this paragraph, the persons
affiliated with or related to any Defendant are members of the immediate family
of each Individual Defendant, any entity in which any Defendant has a
controlling interest, officers and directors of Qwest and its subsidiaries and
affiliates, partners, shareholders, and members of Arthur Andersen LLP, and the
legal representatives, heirs, predecessors, successors and assigns of any such
excluded party. Also excluded from the Class are those Persons who request
exclusion from the Class in such form and manner, and within such time, as the
Court shall prescribe. Also excluded from the Class is any current or former
officer, director, employee, or agent of Qwest who has been sued by the United
States Securities and Exchange Commission in connection with such Person’s
affiliation with or conduct related to Qwest.


 


5.                                       Notice
of the pendency of this Litigation as a class action and of the proposed
partial settlement was given to all Class Members who could be identified with
reasonable effort.  The form and method
of notifying the Class of the pendency of the Litigation as a class action and
of the terms and conditions of the proposed partial settlement met the
requirements of Fed. R. Civ. P. 23, §21D(a)(7) of the Exchange Act, 15 U.S.C.
§78u-4(a)(7), as amended by the Private Securities Litigation Reform Act of
1995, due process, the rules of this Court, and any other applicable law;
constituted the best notice practicable


 


2





















 


under the circumstances; and constituted due
and sufficient notice to all persons and entities entitled thereto.


 


6.                                       Pursuant
to Rule 23 of the Federal Rules of Civil Procedure, the Court approves the
settlement on the terms set forth in the Stipulation as fair, reasonable and
adequate to the Class, and the Settling Parties are directed to consummate the
Stipulation in accordance with its terms and conditions.


 


7.                                       The
Litigation is hereby dismissed with prejudice and without costs as against any
of the Settling Defendants or the Released Persons.


 


8.                                       Except
as to any claim of any individual or entity (identified on Exhibit 1 hereto)
who has validly and timely requested exclusion from the Class, upon the
Effective Date, Lead Plaintiffs and each of the Class Members shall be deemed
to have, and by operation of the Judgment shall have: (i) fully, finally, and
forever released, relinquished and discharged all Released Claims (including
Unknown Claims) against the Released Persons, whether or not such Class Member
executes and delivers the Proof of Claim and Release, (ii) covenanted not to
sue any of the Released Persons or otherwise to assert, directly or indirectly,
any of the Released Claims against any of the Released Persons, and (iii)
agreed to be forever barred and enjoined from doing so, in any court of law or
equity, or in any other forum.


 


9.                                       Upon
the Effective Date, each of the Released Persons shall be deemed to have, and
by operation of this Judgment shall have, fully, finally, and forever released,
relinquished and discharged the Lead Plaintiffs, each and all of the Class
Members (except as to any individual or entity who has validly, timely, and
completely requested exclusion


 


3





















 


from the Class), and Lead Counsel from all
claims (including Unknown Claims) arising out of, relating to, or in connection
with the institution, prosecution, assertion, settlement or resolution of the
Litigation, or the Released Claims.


 


10.                                 Neither
the Stipulation nor the settlement contained herein, nor any act performed or
document executed pursuant to or in furtherance of the Stipulation or the
settlement: (a) is or may be deemed to be or may be used as an admission of, or
evidence of, the validity of any Released Claim, or of any wrongdoing or
liability of the Released Persons or Non-Settling Defendants; or (b) is or may
be deemed to be or may be used as an admission of, or evidence of, any fault or
omission of any of the Released Persons or Non-Settling Defendants in any
civil, criminal or administrative proceeding in any court, administrative
agency or other tribunal.  Released
Persons may file the Stipulation and/or the Judgment in any action that may be
brought against them in order to support a defense or counterclaim based on
principles of res judicata,
collateral estoppel, release, good faith settlement, judgment bar or reduction
or any other theory of claim preclusion or issue preclusion or similar defense
or counterclaim.


 


11.                                 In
accordance with Section 21 D-4(f)(7)(A) of the Private Securities Litigation
Reform Act of 1995, 15 U.S.C. § 78u-4(f)(7)(A), each of the Released Persons by
virtue of this Judgment is discharged from all claims for contribution that
have been or may hereafter be brought by or on behalf of any of the
Non-Settling Defendants or any of the Settling Defendants based upon, relating
to, or arising out of the Released Claims. Accordingly, (i) the Non-Settling
Defendants are hereby permanently barred, enjoined, and restrained from
commencing, prosecuting, or asserting any such claim for contribution against
any


 


4





















 


Released Person based upon, relating to, or
arising out of the Released Claims, and (ii) the Released Persons are hereby
permanently barred, enjoined, and restrained from commencing, prosecuting, or
asserting any claim for contribution against the Non-Settling Defendants based
upon, relating to, or arising out of the Released Claims.  For purposes of Paragraphs 11, 12, 13, and 14
of this Judgment only, Non-Settling Defendants shall include any Person who
Lead Plaintiffs may hereafter sue based upon, relating to, or arising out of
the Released Claims (“Reform Act Bar Order”).


 


12.                                 The
Non-Settling Defendants and the Settling Defendants are hereby permanently
barred, enjoined, and restrained from commencing, prosecuting, or asserting any
claim, if any, however styled, whether for indemnification, contribution, or
otherwise and whether arising under state, federal, or common law, against the
Released Persons based upon, arising out of, or relating to the Released
Claims; and the Released Persons are permanently barred, enjoined, and
restrained from commencing, prosecuting, or asserting any other claim, if any,
however styled, whether for indemnification, contribution, or otherwise and
whether arising under state, federal, or common law, against the Non-Settling
Defendants based upon, arising out of, or relating to the Released Claims (the “Complete
Bar Order”).


 


13.                                 To
the extent (but only to the extent) not covered by the Reform Act Bar Order
and/or the Complete Bar Order, the Lead Plaintiffs, on behalf of themselves and
the Class, further agree that they will reduce or credit any settlement or
judgment (up to the amount of such settlement or judgment) they may obtain
against a Non-Settling Defendant by an amount equal to the amount of any
settlement or final, non-appealable judgment that a


 


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Non-Settling Defendant may obtain against any
of the Released Persons based upon, arising out of, relating to, or in
connection with the Released Claims or the subject matter thereof. In the event
that a settlement is reached between Lead Plaintiffs or the Class and a
Non-Settling Defendant, or final judgment is entered in favor of Lead
Plaintiffs or the Class against a Non-Settling Defendant before the resolution
of that Non-Settling Defendant’s potential claims against any Released Person,
any funds collected on account of such settlement or judgment shall not be
distributed, but shall be retained by the Escrow Agent pending the resolution
of any potential claim by the Non-Settling Defendant claim against such
Released Person(s) as provided in Paragraphs 11.3 and 11.4 of the Stipulation.  In the event a Non-Settling Defendant asserts
a claim against a Released Person related to any claim or judgment asserted
against that Non-Settling Defendant, or settlement entered into by that
Non-Settling Defendant, arising from or related to a claim asserted against
that Non-Settling Defendant by Lead Plaintiffs or any other Class Member, Qwest
Communications International Inc. agrees to pay the reasonable costs of
defending any such claim that may be asserted against any Released Person by
any Non-Settling Defendant, and any such Released Person shall defend against
such claim in good faith and will not settle such claim without the prior
written consent of Lead Counsel and Qwest Communications International Inc.,
which consent shall not be unreasonably withheld.


 


14.                                 The
Class will not settle any claim or judgment against a Non-Settling Defendant
without obtaining from the Non-Settling Defendant the release of any and all
claims the Non-Settling Defendant may have against any of the Released Persons
based upon, arising out of, relating to or in connection with the Released
Claims or the subject


 


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matter thereof, provided that each Settling
Defendant shall execute and provide to the Non-Settling Defendant a release in
a form that is satisfactory both to the Settling Defendants and the
Non-Settling Defendant.


 


15.                                 Any
Plan of Allocation submitted by Lead Plaintiffs’ or Lead Counsel or any order
regarding any attorneys’ fees and expense application shall in no way disturb
or affect this Judgment and shall be separate and apart from this Judgment.


 


16.                                 Without
affecting the finality of this Judgment in any way, this Court hereby retains
continuing jurisdiction over: (a) implementation of the settlement and any award
or distribution of the Settlement Fund, including interest earned thereon; (b)
disposition of the Settlement Fund; (c) hearing and determining applications
for attorneys’ fees, interest and expenses in the Litigation; and (d) the
Settling Parties for purposes of construing, enforcing and administering the
Stipulation.


 


17.                                 The
Court finds that, at all times in connection with the institution, prosecution,
defense and resolution of the Litigation, no Settling Party violated the
provisions of Fed. R. Civ. P. 11.


 


18.                                 No
Person shall have any claim against Lead Counsel or the Claims Administrator,
or their counsel, based on distributions made substantially in accordance with
the Stipulation and the settlement contained therein, the Plan of Allocation,
or further order(s) of the Court. No Person shall have any claim whatsoever
against Settling Defendants, Settling Defendants’ counsel, or any Released
Persons arising from or related to any distributions made, or not made, from
the Settlement Fund.


 


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19.                                 Without
further order of the Court, the Settling Parties may agree to reasonable
extensions of time to carry out any of the provisions of the Stipulation.


 


20.                                 In
the event that the Effective Date does not occur, this Order and Judgment shall
automatically be rendered null and void and shall be vacated and, in such
event, all orders entered and releases delivered in connection herewith shall
be null and void.


 


 


	
  DATED: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE HONORABLE ROBERT E. BLACKBURN

  
	
   

  	
   

  	
  UNITED STATES DISTRICT JUDGE

  



 


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