The following open letter to stockholders was released today by James Q. Crowe, CEO of Level 3 Communications, Inc. (Nasdaq:LVLT):
Dear fellow stockholders:
As you know from my past communications, during the last few years I have been selling a small percentage of my Level 3 shares in daily transactions in order to diversify my investments and to pay down personal debt, which I originally incurred to buy Level 3 shares. I made these sales by depositing stock in an irrevocable trust and instructing the trustee to sell a fixed amount of shares, regardless of the stock price, in the public stock market.
I believed that announcing my plans in advance and using an irrevocable trust would help assure our stockholders that I wasn't selling shares based on knowledge about the company's prospects that they didn't have. I also believed that, since the sales represented a relatively small percentage of my holdings, stockholders would be reassured as to my commitment to the company it is my privilege to lead.
However, since I started my program of stock sales, conditions in our industry have changed in a way that many observers believe is unprecedented. This, of course, is no news to you; it is the subject of daily discussion in virtually every news and media outlet.
In addition, many of our investors have communicated to me their concern that my sales, as well as sales by other senior executives, while perhaps well intentioned, have added to the negative sentiment about our company and have caused some to question our confidence in the company's future.
Given these facts, effective with the close of trading on June 22, 2001, Kevin J. O'Hara, our President and COO; Sureel A. Choksi, our CFO; and Walter Scott, Jr., our Chairman of the Board of Directors; and I have agreed not to sell shares of common stock of the company until further notice.
With respect to my existing irrevocable trust, the trustee has indicated to me that he would discontinue sales until further notice. The balance of the remaining, unsold shares will stay in the irrevocable trust.
In conjunction with today's stock sale suspension announcement, Walter Scott, through a partnership controlled by him and certain members of his family, has agreed to purchase from me, in a private transaction, approximately 2.95 million shares of common stock. The shares purchased by the Scott partnership will also be subject to Mr. Scott's agreement not to sell.
I intend to use the proceeds from this transaction to repay the pre-existing debt obligations that I have been satisfying in part with my prior stock sales. It is also the intent of my transaction with the Scott partnership to permit me not to have to sell any additional shares of Level 3 stock in order to satisfy debt obligations. I expect to complete this transaction by June 22, 2001. The transaction will also increase the stake of Mr. Scott and his family interests in Level 3, and are evidence of his continuing confidence in Level 3.
Sales by the executives listed above occurring prior to June 22, 2001 will be reported on an SEC Form 4 filing on or about July 10, 2001. I hope that this reminder will avoid any confusion, and make it clear that any reported sales occurred prior to the effective date of this announcement.
About Level 3 Communications
Level 3 Communications, Inc. (NASDAQ: LVLT), an international communications company, operates one of the largest Internet backbones in the world, connecting 180 markets in 18 countries. The company serves a broad range of wholesale, enterprise and content customers with a comprehensive suite of services including: Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice and voice over IP services, content delivery and media distribution services. These services provide the building blocks to enable Level 3’s customers to meet their growing demands for advanced communications solutions. The company’s Web address is www.Level3.com.
"Level 3 Communications,” "Level 3," the red 3D brackets and the Level 3 Communications logo are registered service marks of Level 3 Communications, LLC in the United States and/or other countries. Level 3 services are provided by wholly owned subsidiaries of Level 3 Communications, Inc. Any other service, product or company names recited herein may be trademarks or service marks of their respective owners.
Forward-Looking Statement
Some of the statements that we make in this press release are forward looking in nature. These statements are based on management’s current expectations or beliefs. These forward looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside our control, which could cause actual events to differ materially from those expressed or implied by the statements. The most important factors that could prevent us from achieving our stated goals include, but are not limited to our ability to: successfully integrate acquisitions; increase the volume of traffic on our network; defend our intellectual property and proprietary rights; develop new products and services that meet customer demands and generate acceptable margins; successfully complete commercial testing of new technology and information systems to support new products and services; attract and retain qualified management and other personnel; and meet all of the terms and conditions of our debt obligations. Additional information concerning these and other important factors can be found within Level 3’s filings with the Securities and Exchange Commission. Statements in this press release should be evaluated in light of these important factors. Level 3 is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
