Nearly a month after his $9.85 billion bid for MCI failed, Qwest CEO Richard Notebaert will convene an annual meeting today where shareholders...

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DENVER — Nearly a month after his $9.85 billion bid for MCI failed, Qwest CEO Richard Notebaert will convene an annual meeting today where shareholders are hoping to hear what the company’s future holds.

Qwest, which offers local service in 14 Midwestern and Western states including Washington, could acquire assets, such as local exchanges or smaller companies; could be acquired; or stay its current course.

“I think everyone is concerned they would have a difficult time remaining viable as a stand-alone company, but what options are out there?” asked shareholder Mimi Hull, president of the Association of US West Retirees. “I think that’s looming in a lot of shareholders’ minds.”

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Qwest absorbed US West in a 1999 merger.

Among the proposals that will be voted on are three from shareholders, including one requiring Qwest’s board to pursue legal remedies to recover certain performance-based compensation from executives if financial results must be substantially restated.

A second would require Qwest to seek shareholder approval of certain benefits for senior executives.

A third would require Qwest to ensure members of certain board committees meet the definition of independent as designated by the Council of Institutional Investors.

The company has recommended against all three proposals and is seeking approval for the election of three board directors and an independent auditor.

After a contentious three-month battle, Qwest withdrew its offer for MCI on May 2, allowing the long-distance carrier to pursue its $8.54 billion deal with Verizon.

Qwest and BellSouth are the remaining independents among phone companies formed by the 1984 breakup of the national Bell monopoly.

Qwest, which lacks a wireless division, faces hurdles as it tries to shrink $17 billion in debt while dealing with competition from cellphones and Internet-based phone services. It reported revenue was essentially unchanged in the first quarter, although it had gains in long-distance and DSL lines.

“We’ve had a number of challenges to overcome that are unique to Qwest, but we’ve also seen some strong indicators of performance in our organization,” Qwest spokesman Bob Toevs said.

Notebaert previously has said he supports a company that can compete with the two merged ones. He also has said Qwest could look at possible acquisitions if either new company spins off assets.

Telecommunications analyst Donna Jaegers of Janco Partners says this is the time for Qwest executives to look for potential acquisitions.

“They still need to deal with the main issue, which is that they don’t have enough customers on their long-distance network,” she said.

Qwest also has faced legal challenges, agreeing last year to pay a $250 million fine to settle civil fraud charges by the Securities and Exchange Commission without admitting wrongdoing. The SEC had accused Qwest of a “massive financial fraud” for falsely reporting sales or trades of capacity on its fiber-optic cables as recurring revenue.