SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use
of Commission
Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Century Telephone Enterprises, Inc.
_______________________________________________________
(Name of Registrant as Specified In Its Charter)
Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P.
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which
transaction applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-
11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
Preliminary Copy Filed With
the Commission on February 6, 1995
[CTEI LETTERHEAD]
Dear Shareholder:
The enclosed proxy card solicited on behalf of the Board of
Directors of Century Telephone Enterprises, Inc. (the "Company")
indicates the number of votes that you will be entitled to cast at the
Company's Annual Meeting of Shareholders to be held May 11,
1995 (the "Annual Meeting"), according to the stock records of the
Company. The Company's Articles of Incorporation, the relevant
provisions of which are printed on the reverse side of this letter,
provide that each voting share of the Company that has been
"beneficially owned" continuously since May 30, 1987 entitles the
holder thereof to ten votes, subject to compliance with certain
procedures; each other voting share entitles the holder thereof to
one vote. In general, shares registered in the name of any natural
person or estate that are represented by certificates dated prior to
May 30, 1987 are presumed to have ten votes per share. All other
shares are presumed to have only one vote per share.
The Articles of Incorporation, however, set forth a list of
circumstances in which the foregoing presumption may be refuted.
Please review the provisions on the reverse side of this letter and,
if you believe that the information set forth on your proxy card is
incorrect or a presumption made with respect to your shares should
not apply, send a letter to the Company at the above address briefly
describing the reasons for your belief. Merely marking the proxy
card will not be sufficient notification to the Company that you
believe the voting information thereon is incorrect.
The Company will consider all letters received prior to the
date of the Annual Meeting and, when a return address is provided
in the letter, will promptly advise each shareholder concerned of its
decision with respect thereto, although in many cases the Company
will not have time to inform a shareholder of its decision prior to
the time the shares are voted. In limited circumstances, the
Company may require additional information before a
determination will be made. If you have any questions about the
Company's voting procedures, please call the Company at (318)
388-9500.
Clarke M. Williams
Chairman of the Board
March _____, 1995
Preliminary Copy Filed With
the Commission on February 6, 1995
[CTEI LETTERHEAD]
Dear Shareholder:
The enclosed proxy card solicited on behalf of the Board of
Directors for Century Telephone Enterprises, Inc. (the "Company")
indicates the number of shares that you will be entitled to have
voted at the Company's Annual Meeting of Shareholders to be held
May 11, 1995 (the "Annual Meeting"), according to the records of
your broker, bank or other nominee.
The Company's Articles of Incorporation, the relevant
provisions of which are printed on the reverse side of this letter,
provide that each voting share of the Company that has been
"beneficially owned" continuously since May 30, 1987 entitles the
holder thereof to ten votes, subject to compliance with certain
procedures; each other voting share entitles the holder thereof to
one vote. All shares held through a broker, bank or other nominee,
however, are presumed to have one vote per share. The Articles of
Incorporation set forth a list of circumstances in which this
presumption may be refuted by the person who has held all of the
attributes of beneficial ownership referred to in Paragraph 3 of the
voting provisions printed on the reverse side of this letter since
May 30, 1987. Please review those provisions and, if you believe
that some or all of your shares are entitled to ten votes, you may
follow one of the two procedures outlined below.
First, you may write a letter to the Company at the above
address describing the reasons for your belief. The letter should
contain your name (unless you prefer to remain anonymous), the
name of the brokerage firm, bank or other nominee holding your
shares, your account number with such nominee and the number of
shares you have beneficially owned continuously since May 30,
1987. Alternatively, you may ask your broker, bank or other
nominee to write a letter to the Company on your behalf stating
your account number and indicating the number of shares that you
have beneficially owned continuously since May 30, 1987. In
either case, your letter should indicate how you wish to have your
shares voted at the Annual Meeting so that, once a determination
as to voting power is made, your votes may be counted.
The Company will consider all letters received prior to the
date of the Annual Meeting and, when a return address is provided
in the letter, will promptly advise each beneficial owner or
nominee, as the case may be, concerned of its decision with respect
thereto, although in many cases the Company will not have time to
inform an owner or nominee of its decision prior to the time the
shares are voted. In limited circumstances, the Company may
require additional information before a determination will be made.
If you have any questions about the Company's voting procedures,
please call the Company at (318) 388-9500.
Clarke M. Williams
Chairman of the Board
March _____, 1995
Preliminary Copy Filed With
the Commission on February 6, 1995
[CTEI LETTERHEAD]
Dear Participants in the Company's Stock Bonus Plan, Employee
Stock Ownership Plan, Dollars & Sense Plan or Retirement
Savings Plan for Bargaining Unit Employees:
As a participant in one or more of the above-listed plans
you are entitled to direct the exercise of voting power with respect
to shares of the Company's Common Stock held in such plans. If
you choose to do so, all of your instructions (subject to certain
limited exceptions) will be deemed to be made by you in your
capacity as a "named fiduciary" under the plans, which require you
to direct your votes in a manner that you believe to be prudent and
in the best interests of the participants of each respective plan. If
you wish to direct the exercise of such voting power in such
manner, please complete and return the enclosed voting instruction
cards no later than the close of business on May 9, 1995 in
accordance with the accompanying instructions.
Most of you will receive the attached proxy materials of the
Company from both (i) Regions Bank of Louisiana ("Regions
Bank"), which is the trustee for the Company's Stock Bonus and
Employee Stock Ownership Plans, and (ii) Wells Fargo Bank,
National Association ("Wells Fargo"), which is the trustee for the
Company's Dollars & Sense and Retirement Savings Plans. To
ensure that your voting instructions are counted, please carefully
review the instructions separately provided by each such trustee.
It is important that all voting instruction cards relating to the Stock
Bonus or Employee Stock Ownership Plans are returned ONLY to
Regions Bank and that all voting instruction cards relating to the
Dollars & Sense and Retirement Savings Plans are returned ONLY
to Wells Fargo.
If after reading the accompanying instructions you have any
questions regarding the enclosed voting instruction cards, please
contact the trustee responsible for administering the plan or plans
to which your questions relate.
Clarke M. Williams
Chairman of the Board
March _____, 1995
Preliminary Copy Filed With
the Commission on February 6, 1995
CENTURY TELEPHONE ENTERPRISES, INC.
P. O. Box 4065
Monroe, Louisiana 71211
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF
CENTURY TELEPHONE ENTERPRISES, INC.
The Annual Meeting of Shareholders of Century Telephone
Enterprises, Inc. (the "Company") will be held at 2:00 p.m., local
time, on May 11, 1995, at the Holiday Inn Professional
Centre/Atrium, 2001 Louisville Avenue, Monroe, Louisiana, for the
following purposes:
1. To elect five Class I directors;
2. To consider and vote upon amendments to the
Company's articles of incorporation to:
(a) increase the number of authorized shares of
common stock from 100 million to 175
million shares;
(b) require shareholders to provide advance
notice of their intentions to nominate
directors or bring other matters before
shareholders' meetings;
(c) clarify, and in certain limited instances
expand, the protections currently afforded
under the Company's "fair price" article; and
(d) add, delete or revise certain other articles
principally for the purpose of clarifying,
simplifying and updating the articles, all as
described further in the accompanying proxy
statement.
3. To consider and vote upon a proposal to approve the
Company's 1995 Incentive Compensation Plan as set
forth in the accompanying proxy statement; and
4. To transact such other business as may properly
come before the meeting and any adjournments
thereof.
The Board of Directors has fixed the close of business on
March 13, 1995, as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting and all
adjournments thereof.
By Order of the Board of Directors
HARVEY P. PERRY
Secretary
Dated: March _____, 1995
________________________________________
SHAREHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. EVEN IF YOU
EXPECT TO ATTEND, IT IS IMPORTANT THAT YOU PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD PROMPTLY. IF YOU PLAN TO ATTEND AND WISH TO VOTE YOUR
SHARES PERSONALLY, YOU MAY DO SO AT ANY TIME BEFORE YOUR PROXY IS VOTED.
________________________________________
Preliminary Copy Filed With
the Commission on February 6, 1995
CENTURY TELEPHONE ENTERPRISES, INC.
____________________
PROXY STATEMENT
(dated March _____, 1995)
____________________
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 1995
This proxy statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors (the
"Board") of Century Telephone Enterprises, Inc. (the "Company")
for use at its annual meeting of shareholders to be held at the time
and place set forth in the accompanying notice, and at any
adjournments thereof (the "Meeting"). This proxy statement is first
being mailed to shareholders of the Company on or about March
____, 1995.
On March 13, 1995, the record date for determining
shareholders entitled to notice of and to vote at the Meeting (the
"Record Date"), the Company had outstanding __________ shares
of common stock (the "Common Stock") and [18,162] shares of
preferred stock that votes together with the Common Stock as a
single class (collectively, "Voting Shares"). The Company's
Restated Articles of Incorporation (the "Articles") generally provide
that holders of Voting Shares that have been beneficially owned
continuously since May 30, 1987 are entitled to cast ten votes per
share, subject to compliance with certain procedures. Article III of
the Articles and the voting procedures adopted thereunder contain
several provisions governing the voting power of the Voting
Shares, including a presumption that each Voting Share held by
nominees or by any holder other than a natural person or estate
entitles such holder to only one vote, unless the record holder
thereof furnishes the Company with evidence to the contrary.
Applying the presumptions described in Article III, the Company's
records indicate that __________ votes are entitled to be cast at the
Meeting. All percentages of voting power set forth in this proxy
statement have been calculated based on such number of votes.
The Company will pay all expenses of soliciting proxies for
the Meeting. Proxies may be solicited personally, by mail, by
telephone or by facsimile by the Company's directors, officers and
employees, who will not be additionally compensated therefor. The
Company will also request persons holding Voting Shares in their
names for others, such as brokers, banks and other nominees, to
forward proxy materials to their principals and request authority for
the execution of proxies, for which the Company will reimburse
them for expenses incurred in connection therewith. The Company
has retained Hill and Knowlton, Inc. to assist in the solicitation of
proxies, for which it will be paid a fee of $7,500 and will be
reimbursed for certain out-of-pocket expenses.
ELECTION OF DIRECTORS
The Articles authorize a board of directors of 14 members
divided into three classes. Members of the respective classes hold
office for staggered terms of three years, with one class elected at
each annual shareholders' meeting. Five Class I directors will be
elected at the Meeting. Unless authority is withheld, all votes
attributable to the shares represented by each duly executed and
delivered proxy will be cast for the election of each of the five
below-named Class I nominees, each of whom has been
recommended for election by the Board's Nominating Committee.
If for any reason any proposed nominee should decline or become
unable to stand for election as a director, which is not anticipated,
votes will be cast instead for another candidate designated by the
Board, without resoliciting proxies.
The following provides certain information with respect to
each proposed nominee and each other director whose term will
continue after the Meeting, including his beneficial ownership of
shares of Common Stock determined in accordance with Rule 13d-
3 of the Securities and Exchange Commission ("SEC"). Unless
otherwise indicated, (i) all information is as of the Record Date, (ii)
each person has been engaged in the principal occupation shown
for more than the past five years and (iii) shares beneficially owned
are held with sole voting and investment power. None of the
persons named below beneficially owns Voting Shares entitling him
to vote in excess of 1% of the total voting power.
_______________________________________________________________________
Class I Directors (for term expiring in 1998):
_______________________________________________________________________
William R. Boles, Jr., age 38; a director since 1992;
Vice President and a director and practicing attorney
with Boles, Boles & Ryan, a professional law
Director corporation.
Photo
Committee Memberships: Insurance Evaluation
Shares Beneficially Owned: 2,054
_______________________________________________________________________
W. Bruce Hanks, age 40; a director since 1992;
President-Telecommunications Services of the Company
(or a comparable predecessor position) since July 1989.
Director
Photo Committee Memberships: Insurance Evaluation
Shares Beneficially Owned: ____________<FN1>
_______________________________________________________________________
C. G. Melville, Jr., age 54; a director since 1968;
private investor; restaurant proprietor from March
1991 to July 1992; President, Melville Equipment,
Director Inc., a distributor of marine and industrial
Photo equipment, prior to March 1991.
Committee Memberships: Audit; Nominating
Shares Beneficially Owned: 15,033
_______________________________________________________________________
Glen F. Post, III, age 42; a director since 1985;
Vice Chairman of the Board and Chief Executive
Officer of the Company since 1992 and President since
Director 1990; Chief Operating Officer from 1988 to 1992.
Photo
Committee Membership: Executive
Shares Beneficially Owned: ____________<FN1>
_______________________________________________________________________
Clarke M. Williams, age 73; a director since 1968;
Chairman of the Board; Chief Executive Officer from
the Company's incorporation in 1968 to 1989 and from
Director 1990 to 1992. Mr. Williams, who is the father-in-law
Photo of Harvey P. Perry, founded the Company's telephone
business in 1946.
Committee Membership: Executive (Chairman)
Shares Beneficially Owned: ____________<FN1>
_______________________________________________________________________
The Board unanimously recommends a vote FOR each of these proposed
nominees.
_______________________________________________________________________
_______________________________________________________________________
Class II Directors (term expires in 1996):
_______________________________________________________________________
Virginia Boulet, age 41; a director since January
1995(2); Partner, Phelps Dunbar, L.L.P., a law firm,
since March 1992; Partner, Jones, Walker, Waechter,
Director Poitevent, Carrere & Denegre, L.L.P., a law firm,
Photo from January 1989 to March 1992.
[Committee Memberships:]
[Shares Beneficially Owned:]
_______________________________________________________________________
Ernest Butler, Jr., age 66; a director since 1971;
Executive Vice President and Director, Stephens Inc.,
an investment banking firm.
Director Committee Memberships: Audit; Compensation (Chairman);
Photo Shareholder Relations
(Chairman)
Shares Beneficially Owned: 337
_______________________________________________________________________
James B. Gardner, age 60; a director since 1981;
Managing Director of a division of Service Management
Company, a financial services firm, and
Chairman of a division of Affiliated Computer Service,
Inc., a data services provider, since May 1994;
President and Chief Executive Officer, Pacific
Southwest Bank, F.S.B. from November 1991 to April
1994; from March 1991 to November 1991, Chairman of
Director the Board and President of Elm Interests, Inc., a
Photo corporation formed to acquire and operate Bluebonnet
Savings Bank, F.S.B.; President and Chief Executive
Officer of Marquette National Life Insurance Company
and an officer of its parent corporation from August
1990 to March 1991; served from July 1987 to August
1990 as an executive officer of either Bank One,
Texas, N.A., MBank Dallas, N.A. or the federal bridge
bank organized to acquire MBank Dallas, N.A.
Mr. Gardner has also been a director of Ennis Business
Forms, Inc. since 1970.
Committee Memberships: Executive; Audit; Compensation
Shares Beneficially Owned: 1,012
_______________________________________________________________________
R. L. Hargrove, Jr., age 63; a director since 1985;
certified public accountant; retired as Executive
Vice President of the Company in 1987.
Director
Photo Committee Memberships: Executive; Audit; Shareholder
Relations
Shares Beneficially Owned: 29,987
_______________________________________________________________________
Johnny Hebert, age 66; a director since 1968; private
investor; retired as Vice President of River City
Electric, an electrical contracting firm, during 1994.
Director
Photo Committee Memberships: Audit; Nominating (Chairman);
Insurance Evaluation (Chairman)
Shares Beneficially Owned: 3,162<FN3>
_______________________________________________________________________
Nominees for Election as Class III Directors (term expires in 1997):
_______________________________________________________________________
Calvin Czeschin, age 59; a director since 1975;
President and Chief Executive Officer of Yelcot
Telephone Company, Czeschin Chrysler, Inc. and
Director ComputerMart, Inc.
Photo
Committee Memberships: Executive; Audit (Chairman)
Shares Beneficially Owned: 110,332<FN4>
_______________________________________________________________________
F. Earl Hogan, age 73; a director since 1968; Managing
Partner of EDJ Farms Partnership, a farming enterprise.
Director Committee Memberships: Executive; Audit; Insurance
Photo Evaluation
Shares Beneficially Owned: 17,600
_______________________________________________________________________
Harvey P. Perry, age 50; a director since 1990; Senior
Vice President, Secretary and General Counsel of the
Company. Mr. Perry is the son-in-law of Clarke M.
Director Williams.
Photo
Committee Membership: Executive
Shares Beneficially Owned: ___________<FN1><FN5>
_______________________________________________________________________
Jim D. Reppond, age 53; a director since 1986; Vice
President of the Company since January 1, 1995;
President-Telephone Group of the Company (or a
Director comparable predecessor position) from May 1987 to
Photo December 31, 1994.
Committee Memberships: Executive; Insurance
Evaluation
Shares Beneficially Owned: ____________<FN1>
_______________________________________________________________________
<FN1> Includes (i) shares of restricted stock issued under, and subject
to the restrictions of, the Company's incentive compensation
plans ("Restricted Stock"), (ii) shares ("Option Shares") that
the below-named individuals have the right to acquire within
60 days of the Record Date pursuant to options granted under
the Company's 1988 and 1990 Incentive Compensation
Programs and (iii) shares (collectively, "Plan Shares")
allocated to such individuals' accounts as of December 31,
1994 under the Company's Stock Bonus Plan and Employee
Stock Ownership Plan ("ESOP"), and as of the Record Date
under the Company's Dollars & Sense Plan ("401(k) Plan"),
as follows:
Restricted
Name Stock Option Shares Plan Shares
_________________ _____________ _______________ _____________
W. Bruce Hanks
Glen F. Post, III
Clarke M. Williams
Harvey P. Perry
Jim D. Reppond
<FN2> Ms. Boulet replaced Tom S. Lovett, who retired as a Class II
Director in January 1995.
<FN3> Includes 750 shares owned by Mr. Hebert's wife, as to which
he disclaims beneficial ownership.
<FN4> Includes 5,332 shares owned by Mr. Czeschin's wife, as to
which he disclaims beneficial ownership.
<FN5> Includes 12,335 shares owned by Mr. Perry's wife, as to
which he disclaims beneficial ownership, and 543 shares held
as custodian for the benefit of his children.
___________________
Meetings and Certain Committees of the Board
During 1994 the Board held four regular meetings and one
special meeting.
The Board's Executive Committee, which met five times
during 1994, is authorized to exercise all the powers of the Board
to the extent permitted by law.
The Board's Audit Committee meets with the Company's
independent and internal auditors and the Company's personnel
responsible for preparing its financial reports and is responsible for
reviewing the scope and results of the auditors' examination of the
Company, discussing with the auditors the scope, reasonableness
and adequacy of internal accounting controls, considering and
recommending to the Board a certified public accounting firm for
selection as the Company's independent auditors, and directing and
supervising any special investigations as instructed by the Board.
The Audit Committee held three meetings during 1994.
The Board's Nominating Committee, which held three
meetings in 1994, is responsible for recommending to the Board
both a proposed slate of nominees for election as directors and the
individuals proposed for appointment as officers.
The Board's Compensation Committee, which is described
further below, held four meetings during 1994.
Director Compensation
Each director who is not an employee of the Company is
paid an annual fee of $21,000 plus $1,500 for attending each
regular Board meeting, $2,000 for attending each special Board
meeting and $750 for attending each meeting of a Board
committee. Each director is also reimbursed for expenses incurred
in attending meetings.
Under the Company's Outside Directors' Retirement Plan,
non-employee directors who have completed five years of Board
service are entitled to receive, upon normal retirement, monthly
payments that on a per annum basis equal the director's annual rate
of compensation for Board service at retirement plus the fee
payable for attending one special board meeting. In addition, this
plan provides certain disability and preretirement death benefits.
PROPOSALS TO APPROVE AMENDMENTS TO THE COMPANY'S
ARTICLES OF INCORPORATION
The Board of Directors of the Company has approved a
number of amendments to the Company's Restated Articles of
Incorporation (the "Articles") and has directed that they be
submitted to a vote of the shareholders at the Meeting in the form
of four separate proposals (the "Amendment Proposals"), each of
which is further described below.
To be adopted, each Amendment Proposal must receive the
affirmative vote of holders of two-thirds of the voting power
present or represented at the Meeting, except for Amendment
Proposal No. 3 described below, which must receive the affirmative
vote of the holders of a majority of the Company's total voting
power. Each Amendment Proposal will be voted upon
independently, and the adoption of none of the Amendment
Proposals is contingent upon the adoption of any other. The
Company anticipates that the Amendment Proposals, if adopted by
the shareholders, will become effective immediately after the
Meeting.
In connection with formulating the Amendment Proposals,
the Board in certain instances has grouped together into a single
proposal interrelated recommendations that have been proposed for
substantially similar reasons or purposes. In such instances,
shareholders should weigh the merits of each element of the
Amendment Proposal before voting on the proposal as a whole.
The only way to defeat a particular portion of an Amendment
Proposal as to which a shareholder is opposed is to defeat the entire
proposal.
THE BOARD OF DIRECTORS BELIEVES THAT THE AMENDMENT
PROPOSALS ARE IN THE BEST INTERESTS OF THE COMPANY AND ITS
SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS A VOTE FOR
APPROVAL OF EACH. The following discussion is qualified in its
entirety by reference to Exhibit A hereto, which contains the text
of the Articles after giving effect to the Amendment Proposals.
Certain General Effects of the Amendment Proposals
Certain of the Amendment Proposals seek to clarify, modify
or expand provisions currently contained in the Articles that are
intended to encourage any person desiring to acquire a controlling
interest in the Company to do so through a transaction negotiated
with the Company's Board of Directors rather than through a
hostile takeover attempt. These currently-existing provisions are
intended to assure that any acquisition of control of the Company
will be subject to review by the Board to take into account, among
other things, the interests of all of the Company's shareholders.
However, some shareholders may find these provisions to be
disadvantageous to the extent that they could limit or preclude
meaningful shareholder participation in certain transactions and
render more difficult or discourage certain takeovers in which
shareholders might receive for some or all of their shares a price
that is higher than the prevailing market price at the time the
takeover attempt is commenced. These provisions might further
render more difficult or discourage proxy contests, the assumption
of control by a person of a large block of the Company's voting
stock or other attempts to influence or replace the Company's
incumbent management.
Among the principal measures previously adopted by the
Company that are intended to encourage persons to negotiate with
the Board are (i) the Company's rights agreement, pursuant to
which the Company has issued preferred stock purchase rights, each
of which entitles the holder, subject to certain exceptions, to
purchase shares of the Company's preferred stock upon the
occurrence of certain events, including the acquisition by an
unaffiliated person of 15% or more of the outstanding Common
Stock or the announcement of an offer that could result in the
offeror acquiring 30% or more of the outstanding Common Stock,
(ii) a time-phased voting system that, subject to certain exceptions,
entitles the holder of each outstanding Voting Share beneficially
owned by the same person continuously since May 30, 1987 to cast
ten votes with respect to matters submitted to the shareholders for
their consideration, (iii) a section of the Articles (the "Fair Price
Article") that requires various corporate actions involving an
Interested Shareholder (which is defined below) to be approved by,
among other votes, the holders of 80% of the Company's total
voting power and 66 2/3% of the total voting power excluding
shares held by the Interested Shareholder and his affiliates, unless,
among other exceptions, the transaction satisfies certain minimum
price, form of consideration and procedural requirements, and (iv)
provisions in the Articles that require the Board of Directors, when
considering a tender offer, exchange offer or similar transactions,
to consider, among other factors, the social and economic effects
of the proposal on the Company, its subsidiaries, and their
respective employees, customers, creditors and communities.
In addition, (i) the Articles currently provide for a classified
board, authorize the issuance of "blank check" preferred stock,
restrict the ability of shareholders to call special shareholders'
meetings or act by written consent, require supermajority votes to
effect certain corporate actions, and limit the ability of shareholders
to recover monetary damages from directors and officers, (ii) the
Company has entered into severance agreements with each of its
executive officers and indemnification agreements with each of its
officers and directors, and (iii) approximately _____% of the
Company's total voting power is held by the trustee for two of the
Company's employee benefit plans, each of which require the
Trustee to cast such voting power as directed by the plan's
participants in the manner described further herein. Each of these
may be deemed to have certain anti-takeover effects.
The Amendment Proposals have not been proposed in
response to any pending or threatened contest for the election of
directors or control of the Company and the Board has no reason
to believe that any person is currently planning any transactions
that would have such effects.
Amendment Proposal No. 1 - Increase of the Authorized Common Stock
General. The Company is currently authorized under the
Articles to issue up to 100 million shares of Common Stock. As
of the Record Date, __________ shares of Common Stock were
outstanding or reserved for issuance. As described further below,
the Board believes that the current amount of unreserved shares of
Common Stock available for issuance in the future is inadequate.
Accordingly, the Board proposes to amend the Articles to increase
the authorized number of shares of Common Stock from 100
million to 175 million.
Purposes and Effects of the Proposal. This Proposal is
intended to increase the Company's flexibility by increasing the
number of shares of Common Stock that can be issued without
further shareholder approval. The Board believes that the adoption
of this Proposal will enable the Company promptly and
appropriately to respond to business opportunities, such as
opportunities to raise additional equity capital or to finance
acquisitions with Common Stock, and to issue additional shares in
connection with stock splits, stock dividends and employee benefit
plans. Given the limited number of shares currently available for
issuance, the Company may not be able in the future to effect
certain of these transactions without obtaining shareholder approval
for an increase in the authorized number of shares of Common
Stock. For instance, the Company is currently unable to effect a
two-for-one stock split without shareholder approval. The cost,
prior notice requirements and delay involved in obtaining
shareholder approval at the time that corporate action may become
desirable could eliminate the opportunity to effect the action or
reduce the anticipated benefits.
Although the Company is continually reviewing various
acquisitions and other transactions that could result in the issuance
of shares of the of the Company's capital stock, the Board of
Directors has no present plans to issue additional shares of capital
stock except for shares of Common Stock as may be required in
connection with (i) the conversion of outstanding convertible
securities, (ii) issuances pursuant to currently outstanding options
and other equity incentives, and (iii) issuances pursuant to the
Company's dividend reinvestment plan, employee stock purchase
plan, restricted stock plan or other employee benefit plans.
Although the Company has no current plans to declare a stock split
or stock dividend, the Company has declared three stock splits
(effected as stock dividends) since June 1988 and may from time
to time consider additional splits or dividends if the circumstances
warrant.
The additional shares of Common Stock proposed to be
authorized, together with existing authorized and unissued shares,
generally will be available for issuance without any requirement for
further shareholder approval, unless shareholder action is required
by applicable law or by the rules of the New York Stock Exchange
or of any other stock exchange on which the Common Stock may
then be listed. Although the Board will authorize the issuance of
additional shares only when it considers doing so to be in the best
interest of shareholders, the issuance of additional Common Stock
may, among other things, have a dilutive effect on earnings per
share of Common Stock and on the voting rights of holders of
Voting Shares. Shareholders of the Company do not have any
preemptive rights to subscribe for additional shares of Common
Stock that may be issued. In addition, although the Board has no
current plans to do so, shares of Common Stock could be issued in
various transactions that would make a change in control of the
Company more difficult or costly and, therefore, less likely. For
example, shares of Common Stock could be sold privately to
purchasers who might support the Board in a control contest or to
dilute the voting or other rights of a person seeking to obtain
control. However, as indicated above, the Company is not aware
of any effort by anyone to obtain control of the Company, and the
Company has no present intention to use the increased shares of
authorized Common Stock for any such purposes.
The Board of Directors unanimously recommends that you vote
for this Proposal.
Amendment Proposal No. 2 - Addition of New Article Relating
to Shareholder Nominations and Proposals
The Company's Board of Directors recommends that the
Articles be amended to add new Article VI(C) (the "Advance
Notice Article"), which generally provides that shareholders who
wish to nominate directors or submit other matters for consideration
at shareholders' meetings must provide advance notice to the
Company. The full text of this Article, as proposed to the
shareholders for adoption, is included in Exhibit A.
Description of Proposal. As proposed, the Advance Notice
Article provides that nominations for the election of directors and
proposals to bring other matters before a shareholders' meeting
may be made by the Board of Directors or voting shareholders of
record. Under this Article, shareholders intending to make a
nomination or bring any other matter before a shareholders'
meeting must furnish timely written notice. To be timely, the
notice must be received by the Company not less than 60 days nor
more than 120 days prior to the first anniversary of the previous
year's annual meeting, subject to certain exceptions applicable
principally to special meetings.
The notice to the Company from a shareholder intending to
nominate a person for election as a director or to propose other
matters at a shareholders' meeting must contain certain information,
including the name, age and address of the shareholder proposing
such action and any persons acting in concert with such
shareholder, a representation by such shareholder that such
shareholder is a holder of record of the Company's capital stock
and intends to appear at the meeting in person to make the
nomination or bring up the specified matter. In the case of
nominations for directors, the notice must also include (i) the name,
age, address and principal occupation of each nominee, (ii) a
description of all arrangements between the nominating shareholder
and each nominee, (iii) other information required to be included
in a proxy statement pursuant to the proxy rules of the Securities
and Exchange Commission (including information concerning
whether such nominee has been involved in certain proceedings
which may be material to an evaluation of the nominee's ability or
integrity), and (iv) the consent of each nominee to serve as director
of the Company if elected and an affidavit that such nominee meets
the qualifications specified in newly-proposed Article IV(F) (the
"Proposed Qualifications"), which the Board has recommended for
approval at the Meeting. See "- Amendment Proposal No. 4 -
Other Changes to Articles -- Directors' Qualifications." In the case
of other proposed business, the shareholder's notice must set forth
a description of the business, the reasons for conducting such
business at the meeting and any material interest of the shareholder
therein. The chairman of the meeting will have the power to
disregard any nomination or other matter that fails to comply with
these proposed procedures.
With respect to proposals by shareholders to propose matters
other than the nomination of directors, the Advance Notice Article
provides that only the first ten proposals of which the Company
receives sufficient notice will be recognized. In addition, the
Company would be authorized under the Article to disregard
proposals that (i) are substantially duplicative of a prior-received
proposal to be voted upon at an upcoming meeting, (ii) deal with
substantially the same subject matter as a prior proposal that was
voted upon within the preceding five years and which failed to
receive affirmative votes in excess of certain specified levels which
range, depending on the circumstances, between 3% and 10%, or
(iii) in the judgment of the Board of Directors, are not proper
subjects for action by shareholders under Louisiana law.
Reasons For and Effects of the Proposal. Currently
neither the Articles nor the Bylaws prescribe any procedures
governing the shareholders' rights to nominate directors or bring
other matters before shareholders' meetings. Subject to certain
restrictions under Louisiana law, currently the Company's
shareholders can nominate directors or propose other matters from
the floor at a shareholders' meeting, without prior notice to the
Board or other shareholders.
The Advance Notice Article will afford the Board an
opportunity to consider in an orderly and informed manner the
qualifications of proposed nominees and the merits of any other
proposed business, and, to the extent it deems it necessary or
desirable, to advise shareholders and make recommendations or
propose alternatives with respect thereto. The Board believes the
Advance Notice Article will further the objectives of the Board to
identify candidates who have the experience, qualifications and
proven accomplishments to effectively serve the Company and to
identify other proposals that may advance the best interest of the
Company and its shareholders. The Board believes that it is
advantageous to be able to consider in advance the qualifications
of any proposed nominee and the merits of any other proposed
business, as opposed to being confronted with unexpected
nominations or proposals at or shortly before the meeting.
Moreover, by permitting the Company to disregard matters that are
belated, duplicative or otherwise not in accordance with the
Article's terms and conditions, the Board believes the Article will
facilitate orderly and constructive shareholders' meetings.
As indicated above, the Advance Notice Article will enable
the Board of Directors to disregard a timely-received proposal if it
is substantially duplicative of other proposals, is substantially
similar to proposals that previously elicited little shareholder
support, is not a proper subject for shareholder action, or is
submitted after ten other proposals have already been received by
the Company. Moreover, the Article will permit the Board to
assess whether a proposed nominee meets the Proposed
Qualifications. Subject to these limited exceptions, the Article does
not give the Board the power to reject shareholders' proposals to
nominate directors or bring other matters before shareholders'
meetings if the prescribed procedures are followed. However, the
Article may have the effect of precluding both contests for the
election of directors and proposals by shareholders of actions to be
taken by the Company if the procedures specified in the Article are
not followed and may discourage or deter a third party from
conducting a solicitation of proxies or otherwise attempting to elect
its own slate of directors or proposing that the Company take
certain actions, without regard to whether such actions might be
harmful or beneficial to the Company and its shareholders. As
indicated above, however, the Article has not been proposed in
response to any pending or threatened contest for the election of
directors.
Nothing in the Advance Notice Article will affect the rights
of shareholders under the proxy rules of the Securities and
Exchange Commission to request that their proposals be included
in the Company's proxy statements or to solicit their own proxies.
If this Article is adopted at the Meeting, shareholders who desire
to pursue these rights at future meetings will be required to comply
with both the Advance Notice Article and the proxy rules.
The Board of Directors unanimously recommends that you
vote for this Proposal.
Amendment Proposal No. 3 - Clarification of Protections
Afforded Under the Fair Price Article
General. The Company's Board of Directors recommends
that the Fair Price Article currently in effect be amended to (i)
clarify the definitions of Interested Shareholders and Business
Combinations, (ii) provide a mechanism for resolving certain
disputes and (iii) make certain other ancillary and clarifying
changes.
Description and Purpose of Proposed Amendments. The
current Fair Price Article, which was approved by the shareholders
in 1985, is closely modeled on the Louisiana "fair price" statute
adopted by the Louisiana legislature in 1984. The current Article
defines an Interested Shareholder generally as any person, other
than the Company's benefit plans and related trusts, who
beneficially owns capital stock representing more than 10% of the
Company's total voting power. This definition is similar to the
1984 statute's original definition. In 1988, the Louisiana legislature
expanded this definition to include any person who is an affiliate
of a corporation and held 10% or more of the corporation's total
voting power within the prior two years. The effect of this
expanded definition is to deter or prevent a person from seeking to
circumvent the statute's protection by acquiring a significant
interest in a corporation, causing himself to, among other things, be
elected an officer or director, and thereafter proposing a Business
Combination after he has divested his voting power below 10%.
The Board recommends amending the definition of Interested
Shareholder in the Fair Price Article to match the statute's
expanded definition.
As indicated above, subject to certain exceptions the
Company's Fair Price Article currently requires various corporate
actions (defined in such article as "Business Combinations")
involving an Interested Shareholder to be approved by various
supermajority votes. Currently, the Fair Price Article defines
Business Combinations broadly to include most corporate actions
that an Interested Shareholder might contemplate after acquiring a
controlling interest in the Company in order to increase his share
ownership or reduce his acquisition debt, including squeeze-out
mergers, significant asset sales, liquidation of the Company, and
stock issuances or reclassifications that benefit the Interested
Shareholder. Although the Fair Price Article currently contains
express provisions designed to deter an Interested Shareholder from
seeking loans, guarantees, pledges, tax credits or other financial
assistance or tax advantages from the Company that
disproportionately benefit such person, it is not entirely clear
whether all of these transactions would constitute Business
Combinations. The Board recommends clarifying the definition of
Business Combination to expressly include these transactions. The
Board believes this clarification may deter or prevent a person from
proposing these types of abusive transactions, will strengthen the
incentives of a person interested in obtaining a controlling interest
in the Company to negotiate with the Board, and will reduce the
likelihood of litigation regarding whether these types of transactions
constitute Business Combinations.
The Fair Price Article currently does not contain a
mechanism for resolving disputes regarding whether the Article is
applicable with respect to any particular person or transaction. The
Board of Directors recommends that the Articles be amended to
include new Article V(D), which generally provides that the Board
of Directors will have the power to make binding good faith
determinations regarding the applicability of the Article, including
whether any particular person is an Interested Shareholder, the
number of shares owned by such person, and whether any
particular transaction constitutes a Business Combination. The
Board of Directors believes this amendment will strengthen the
protection of the Article by reducing the likelihood of an Interested
Shareholder instituting lawsuits that lack merit or attempting to
circumvent the purpose and intents of the Article.
Finally, the Board of Directors recommends that the Fair
Price Article be reorganized to move non-related topics to other
articles, to combine and condense certain related provisions, to
make technical changes to the Article's definitions that eliminate or
shorten certain definitions and conform others more closely to those
used in Louisiana's "fair price" statute, and to make certain other
ancillary changes, all in an effort to clarify and prevent the
circumvention of the terms, purposes and intents of the Article.
Shareholders are urged to review newly-proposed Article V
set forth in Exhibit A, which reflects all of the above-described
proposed changes in their entirety. In connection with reviewing
this Proposal, shareholders are further urged to review the
discussion above under the caption "- Certain General Effects of the
Amendment Proposals."
The Board of Directors unanimously recommends that you
vote for this Proposal.
Amendment Proposal No. 4 - Other Changes to Articles
The Board of Directors has approved a number of
amendments to the Articles that are designed generally to conform
certain articles to the bylaws, to clarify the Board's powers in
certain specific instances, to update and modernize certain other
articles, and to simplify, consolidate and reorder various other
provisions. Due to their relatively limited scope and interrelated
nature, these proposed amendments are being presented to the
shareholders as a single Amendment Proposal.
As described further below, the proposed amendments seek
to (i) add a new article conforming to the Company's current bylaw
that requires directors to meet certain qualifications designed to
ensure that the Company does not forfeit the benefits associated
with its federal communications licenses, (ii) clarify the authority
of the Board to take certain steps to limit the liability of directors
and officers in connection with shareholder suits, and (iii) update,
modernize, simplify, consolidate and reorder the Articles as
described further below.
Directors' Qualifications. Pursuant to regulations adopted
by the Federal Communications Commission (the "FCC") that
implement the Anti-Drug Abuse Act of 1988, the FCC cannot issue
any new, modified or renewed licenses to, or act upon any
applications of, any company unless such company provides certain
certifications regarding the absence of drug offenses by the
Company's officers and directors. As a result of these regulations
and in light of the significance of the Company's FCC licenses to
its business, in 1992 the Board of Directors amended the
Company's bylaws to provide that no person is eligible for
nomination, election or service as a director who shall (i) in the
Board's opinion fail to respond satisfactorily respecting any inquiry
of the Company for information to enable the Company to make
any certification required under the Anti-Drug Abuse Act of 1988,
(ii) have been arrested or convicted for the distribution or
possession of controlled substances, subject to certain exceptions,
or (iii) have engaged in actions that could lead to such an arrest or
conviction and that the Board determines would make it unwise for
such person to serve as a director. The Board believes that a
parallel provision should be included in the Articles, which are
more readily available to the public and may not be amended
without shareholder approval. Accordingly, the Board recommends
the addition of new Article V(F), which provide for the same
protections as are currently in effect in the bylaws.
Authority of Board to Limit Liability. As permitted by
Louisiana law, the Articles currently provide that (i) no director or
officer shall be liable for monetary damages for breach of his
fiduciary duty, subject to certain exceptions including liability for
breaches of the duty of loyalty, and (ii) the Board may cause the
Company to enter into indemnification agreements with
management and may adopt indemnification bylaws. Louisiana law
further permits corporations to procure liability insurance for
officers and directors and to create self-insurance arrangements.
The Board recommends that the current Articles be clarified to
provide that the Board may exercise these powers to procure and
self-fund insurance arrangements covering officers and directors,
notwithstanding the potential conflicts raised in connection with
their authorization of such arrangements. The Board further
recommends that the Articles be clarified to expressly provide that
the Board may cause the Company to approve for its subsidiaries'
officers and directors limitation of liability, indemnification and
insurance provisions comparable to the Company's. While the
Board believes it already has these powers under applicable law,
the Board believes these clarifications will help prevent disputes
regarding its authority, thereby enhancing their ability to provide
for arrangements designed to ensure that the Company remains able
to attract and retain the best possible directors and officers.
Shareholders are urged to review Article VII set forth in Exhibit A,
which reflects the above-described changes.
Additional Updating, Modernizing, Simplifying,
Consolidating and Reordering. The Board has approved several
miscellaneous amendments that seek to update, modernize,
simplify, consolidate and reorder the Articles. If adopted, these
proposed amendments would (i) eliminate the requirement that the
Company's stock be represented by certificates in anticipation of
currently pending proposals to develop direct registration systems
which, if implemented, may permit investors to directly register
their ownership of Common Stock with the Company without
receiving a stock certificate, (ii) condense and simplify the Article
that currently permits the Board of Directors to issue "blank-check"
preferred stock, (iii) correct references to laws or regulations no
longer in effect, (iv) add a clarifying definition of total voting
power, and (v) reorder various articles in an effort to group similar
topics together. All such proposed changes are reflected in the
proposed Articles attached as Exhibit A. The Board does not
believe that these miscellaneous changes will have any significant
effect on the current rights, powers or obligations of the Company
or its shareholders.
The Board of Directors unanimously recommends that you
vote for this Proposal.
PROPOSAL TO APPROVE THE CENTURY TELEPHONE ENTERPRISES, INC.
1995 INCENTIVE COMPENSATION PLAN
General
The Board of Directors of the Company believes that the
growth of the Company depends significantly upon the efforts of
its directors, officers and key employees and that such individuals
are best motivated to put forth maximum effort on behalf of the
Company if they own an equity interest therein. In accordance
with this philosophy, the Board of Directors has unanimously
adopted the Company's 1995 Incentive Compensation Plan (the
"Plan") and has directed that it be submitted for approval by the
shareholders at the Meeting. The affirmative vote of a majority of
the voting power present or represented at the Meeting is necessary
for the shareholders to approve the Plan. The following summary
of the Plan is qualified in its entirety by reference to the Plan,
which is attached to this Proxy Statement as Exhibit B.
Officers and other key employees of the Company will be
eligible to receive awards ("Incentives") under the Plan when
designated by the Compensation Committee of the Board of
Directors or a subcommittee thereof (the "Compensation
Committee"). The Compensation Committee estimates that the
Company currently has approximately 75 employees who could be
designated as key employees under the Plan. Incentives under the
Plan may be granted in any one or a combination of the following
forms: (a) incentive and non-qualified stock options; (b) stock
appreciation rights; (c) restricted stock; and (d) performance shares.
[Directors who are not also full-time employees of the Company
("Outside Directors") will also receive annual grants of stock
options under the Plan. The Company currently has nine Outside
Directors.]
General Purposes of the Proposal
The Board of Directors is committed to creating and
maintaining a compensation system based to a significant extent on
grants of equity-based incentive awards. The Board of Directors
believes that providing members of management and key personnel
with a proprietary interest in the growth and performance of the
Company is crucial to stimulating individual performance while at
the same time enhancing shareholder value. The Board further
believes that the Plan will assist the Company in attracting,
retaining and motivating management and key personnel in a
manner that is tied to the interests of shareholders.
As described further below, the Plan will replace the
Company's 1988 and 1990 Incentive Compensation Programs (the
"Prior Plans") as to future awards if it is approved at the Meeting.
The Plan updates, modernizes, eliminates and clarifies several
provisions included in the Prior Plans, and includes certain new
terms. Among these new terms are provisions that (i)
[automatically grant stock options annually to Outside Directors,]
(b) permit the Compensation Committee, in connection with any
participant's payment of the exercise price of an option in shares
of Common Stock, to award an additional option to purchase the
same number of shares as were surrendered, (c) permit the
Committee to take one or more alternative actions with respect to
outstanding Incentives in the event of a change of control of the
Company, and (d) empower the Committee to permit the
transferability of Incentives if allowed under applicable securities
and tax laws. In addition, the Plan has been designed so that
Incentives granted thereunder can qualify as performance-based
compensation and be excluded from the $1 million limit on
deductible compensation imposed by Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"). Approval of the
Plan will also increase the number of shares of Common Stock
available for equity-based incentive awards. The Board of
Directors believes these changes will improve its ability to achieve
the goals of the Company's incentive compensation programs.
Terms of the Plan
Shares Issuable through the Plan. A total of two million
shares of Common Stock are authorized to be issued under the
Plan, representing approximately 3.4% of the outstanding shares of
Common Stock as of the Record Date. Incentives with respect to
no more than 200,000 shares may be granted to a single participant
in one calendar year. A total of 491,984 shares remain available
for issuance under the Prior Plans. If the Plan is approved by the
shareholders at the Meeting, no further awards will be made under
the Prior Plans. A total of 422,641 shares also remain available for
issuance under the Company's 1983 Restricted Stock Plan (the
"1983 Plan"). It is contemplated that the 1983 Plan will continue
to be utilized to pay a portion of the Company's annual bonuses in
the form of restricted stock. See "Executive Compensation and
Related Information - Report of Compensation Committee
Regarding Executive Compensation - Annual Bonus."
Proportionate adjustments will be made to the number of
shares of Common Stock subject to the Plan in the event of any
recapitalization, stock dividend, stock split, combination of shares
or other change in the Common Stock. The Compensation
Committee may also amend the terms of any Incentive to the extent
appropriate to provide participants with the same relative rights
before and after the occurrence of such an event. Shares of
Common Stock subject to Incentives that are cancelled, terminated
or forfeited, or shares of Common Stock that are issued as
Incentives and forfeited or reacquired by the Company, will again
be available for issuance under the Plan.
On ______, 1995, the closing sale price of a share of
Common Stock, as reported on the New York Stock Exchange
Composite Tape, was $__________.
Administration of the Plan. The Compensation Committee
administers the Plan and has plenary authority to award Incentives
under the Plan, to interpret the Plan, to establish any rules or
regulations relating to the Plan that it determines to be appropriate,
to delegate its authority as appropriate, and to make any other
determination that it believes necessary or advisable for the proper
administration of the Plan.
Amendments to the Plan. The Board may amend or
discontinue the Plan at any time, except that any amendment that
would materially increase the benefits under the Plan, materially
increase the number of securities that may be issued under the Plan
or materially modify the eligibility requirements must be approved
by the shareholders. [In addition, the provisions of the Plan that
pertain to the stock options for Outside Directors may not be
amended more than once every six months, except to comply with
the Code.] Except in limited circumstances, no amendment or
discontinuance may change or impair any previously-granted
Incentive without the consent of the recipient thereof.
Types of Incentives. The Compensation Committee will be
authorized under the Plan to grant stock options, restricted stock,
stock appreciation rights and performance shares, each of which is
described further below.
Stock Options. The Compensation Committee may grant
non-qualified stock options or incentive stock options to purchase
shares of Common Stock. The Compensation Committee will
determine the number and exercise price of the options, and the
time or times that the options become exercisable, provided that the
option exercise price may not be less than the fair market value of
the Common Stock on the date of grant. The term of an option
will also be determined by the Compensation Committee, provided
that the term of an incentive stock option may not exceed 10 years.
No stock option granted to an officer, director or beneficial owner
of more than 10% of the Common Stock who is subject to Section
16 of the Securities Exchange Act of 1934 (the "1934 Act") may
be exercised within the six-month period immediately following the
date of grant. Any provision in the Plan or a stock option
agreement notwithstanding, the Compensation Committee may
accelerate the exercisability of any stock option at any time. The
Compensation Committee may also approve the purchase by the
Company of an unexercised stock option from the optionee by
mutual agreement for the difference between the exercise price and
the fair market value of the shares covered by such option.
The option exercise price may be paid in cash, in shares of
Common Stock held for at least six months, in a combination of
cash and shares of Common Stock, or through a broker-assisted
exercise arrangement approved by the Compensation Committee.
If an optionee exercises an option while employed by the Company
or a subsidiary and pays the exercise price with previously owned
shares of Common Stock, the Compensation Committee may grant
to the optionee an additional option to purchase the same number
of shares as were surrendered at an exercise price equal to the fair
market value of the Common Stock on the date of grant.
Incentive stock options will be subject to certain additional
requirements necessary in order to qualify as incentive stock
options under Section 422 of the Code.
Restricted Stock. Shares of Common Stock may be granted
by the Compensation Committee to an eligible employee and made
subject to restrictions on sale, pledge or other transfer by the
employee for a certain period (the "Restricted Period"). All shares
of restricted stock will be subject to such restrictions as the
Compensation Committee may provide in an agreement with the
employee, including, among other things, that the shares are
required to be forfeited or resold to the Company in the event of
termination of employment or in the event specified performance
goals or targets are not met. A Restricted Period of at least three
years is required, except that if the vesting of the shares of
restricted stock is subject to the attainment of performance goals,
the Restricted Period may be one year or more. The Compensation
Committee may prescribe conditions for the lapse of restrictions
prior to the end of the Restricted Period in the case of death,
disability, retirement or other termination of employment, but
shares of restricted stock granted to an employee subject to Section
16 of the 1934 Act must be subject to a Restricted Period of at
least six months. Subject to the restrictions provided in the
agreement and the Plan, a participant receiving restricted stock shall
have all of the rights of a shareholder as to such shares.
Stock Appreciation Rights. A stock appreciation right or
"SAR" is a right to receive, without payment to the Company, a
number of shares of Common Stock, cash or any combination
thereof, the amount of which is determined pursuant to the formula
described below. A SAR may be granted in conjunction with a
stock option or alone without reference to any stock option. A
SAR granted in conjunction with a stock option may be granted
concurrently with the grant of such option or at such later time as
determined by the Compensation Committee and as to all or any
portion of the shares subject to the option.
The Plan confers on the Compensation Committee discretion
to determine the number of shares to which a SAR will relate as
well as the duration and exercisability terms of a SAR. In the case
of a SAR granted with respect to a stock option, the number of
shares of Common Stock to which the SAR pertains will be
reduced in the same proportion that the holder exercises the related
option. Unless otherwise provided by the Compensation
Committee, a SAR will be exercisable for the same time period as
any stock option to which it relates. No SAR granted to an officer
subject to Section 16 of the 1934 Act may be exercised during the
first six months of its term. Notwithstanding any provision in the
Plan or a stock appreciation right agreement, the Compensation
Committee may accelerate the exercisability of an SAR at any time.
Upon exercise of an SAR, the holder is entitled to receive
an amount that is equal to the aggregate amount of the appreciation
in the shares of Common Stock as to which the SAR is exercised.
For this purpose, the "appreciation" in the shares consists of the
amount by which the fair market value of the shares of Common
Stock on the exercise date exceeds (a) in the case of a SAR related
to a stock option, the purchase price of the shares under the option
or (b) in the case of a SAR granted alone without reference to a
related stock option, an amount determined by the Compensation
Committee at the time of grant. The Committee may pay the
amount of this appreciation to the holder of the SAR by the
delivery of Common Stock, cash, or any combination of Common
Stock and cash.
Performance Shares. Performance Shares consist of the
grant by the Company to an eligible employee of a contingent right
to receive shares of Common Stock or cash with or without any
payment by the employee. Each performance share will be subject
to the achievement of performance objectives by the Company, an
operating division or a subsidiary by the end of a specified period.
The number of shares granted and the performance criteria will be
determined by the Compensation Committee. The award of
performance shares shall not create any rights in a participant as a
shareholder of the Company until the issuance of shares of
Common Stock with respect to an award. Performance shares may
be awarded in conjunction with the grant of dividend equivalent
payment rights that entitle a participant to receive an amount equal
to the cash dividends paid on an equal number of shares of
Common Stock during the period beginning on the date of grant of
an award and ending on the date on which the award is paid or is
forfeited.
Termination of Employment. If a participant ceases to be
an employee of the Company for any reason, including death, any
Incentive may be exercised, shall vest or shall expire at such time
or times as may be determined by the Committee in the Incentive
agreement.
Loans to Participants. The Committee may authorize the
extension of a loan to a participant by the Company to cover the
participant's tax liability that arises in connection with an Incentive.
The terms of the loan will be determined by the Committee.
Change of Control. If (a) the Company is not the surviving
entity in a merger, consolidation or other reorganization, (b) the
Company sells, leases or exchanges all or substantially all of its
assets, (c) the Company is to be dissolved or liquidated, (d) any
person or entity, other than an employee benefit plan of the
Company or a related trust, acquires or gains control of more than
30% of the outstanding shares of the Company's voting stock or (e)
in connection with a contested election of directors, the persons
who were directors of the Company before the election no longer
constitute a majority of the Board (collectively, "corporate
changes"), all outstanding Incentives will automatically become
exercisable and vested and all performance criteria will be waived,
and, in addition, the Compensation Committee will have the
authority to take several actions regarding outstanding Incentives.
Within certain time periods, the Compensation Committee may (i)
require that all outstanding stock options and/or SARs remain
exercisable only for a limited time, after which time all such
Incentives will terminate, (ii) require the surrender to the Company
of some or all outstanding options and SARs in exchange for a
cash or Common Stock payment for each option or SAR equal in
value to the per share change of control value, calculated as
described in the Plan, over the exercise price, (iii) make any
equitable adjustment to outstanding Incentives as the Compensation
Committee deems necessary to reflect the corporate change or (iv)
provide that an option or SAR shall become an option or SAR
relating to the number and class of shares of stock or other
securities or property (including cash) to which the participant
would have been entitled in connection with the corporate change
if the participant had been the holder of record of the number of
shares of Common Stock then covered by such options or SARs.
The Board of Directors believes that providing the
Compensation Committee with the choices outlined above will
permit the Committee to review all relevant tax, accounting and
other issues relating to the treatment of outstanding Incentives at
the time of the corporate change, and thereby enable the Committee
to choose the treatment that will best serve the participants and the
Company. Although the automatic vesting of Incentives and other
certain actions permitted to be taken by the Compensation
Committee in the event of a change of control could discourage a
takeover of the Company, these provisions have not been included
for the purpose of making the Company a less attractive takeover
target.
Transferability of Incentives. Options, SARs and
performance shares are not transferable except (a) by will, (b) by
the laws of descent and distribution, (c) pursuant to a domestic
relations order or (d) to family members , to a trust for the benefit
of family members or to charitable institutions, if permitted by the
Committee after considering tax and securities law consequences
and so provided in the Incentive agreement.
[Stock Options for Outside Directors. Beginning in 1995,
each Outside Director will automatically receive non-qualified
options to purchase 1,000 shares of Common Stock on the day
following the Company's annual meeting of shareholders. Each
person who becomes an Outside Director between annual meetings
will receive a pro-rated number of options. The exercise price of
the options will be equal to the fair market value of a share of
Common Stock on the date of grant. The options will become
exercisable six months after the date of grant and will have a term
of ten years. However, the options will become immediately
exercisable in the event of death, disability or retirement from the
Board on or after reaching age 65.]
Awards To Be Granted
The Compensation Committee has not made a determination
as to which key employees will receive Incentives under the Plan
or the amounts or types of Incentives that may be granted. [Based
on the current number of Outside Directors, options to purchase
9,000 will be granted each year as long as the Plan remains in
effect and shares remain available for issuance under the Plan.]
Federal Income Tax Consequences
Under existing federal income tax provisions, a participant
who receives stock options SARs or performance shares or who
receives shares of restricted stock that are subject to restrictions
which create a "substantial risk of forfeiture" (within the meaning
of Section 83 of the Code) will not normally realize any income,
nor will the Company normally receive any deduction for federal
income tax purposes in the year such Incentive is granted.
When a non-qualified stock option granted pursuant to the
Plan is exercised, the employee will realize ordinary income
measured by the difference between the aggregate purchase price
of the shares of Common Stock as to which the option is exercised
and the aggregate fair market value of the shares of Common Stock
on the exercise date, and the Company will be entitled to a
deduction in the year the option is exercised equal to the amount
the employee is required to treat as ordinary income.
An employee generally will not recognize any income upon
the exercise of any incentive stock option, but the excess of the fair
market value of the shares at the time of exercise over the option
price will be an item of adjustment, which may, depending on
particular factors relating to the employee, subject the employee to
the alternative minimum tax imposed by Section 55 of the Code.
The alternative minimum tax is imposed to the extent it exceeds
federal regular individual income tax, and it is intended to ensure
that individual taxpayers who have economic income do not avoid
income tax by taking advantage of exclusions, deductions and
credits for regular tax purposes. An employee will recognize
capital gain or loss in the amount of the difference between the
exercise price and the sale price on the sale or exchange of stock
acquired pursuant to the exercise of an incentive stock option,
provided the employee does not dispose of such stock within two
years from the date of grant and one year from the date of exercise
of the incentive stock option (the "required holding periods"). An
employee disposing of such shares before the expiration of the
required holding period will recognize ordinary income generally
equal to the difference between the option price and the fair market
value of the stock on the date of exercise. The remaining gain, if
any, will be capital gain. The Company will not be entitled to a
federal income tax deduction in connection with the exercise of an
incentive stock option, except where the employee disposes of the
Common Stock received upon exercise before the expiration of the
required holding period.
If the exercise price of an option is paid by the surrender of
previously owned shares, the basis of the previously owned shares
carries over to the shares received in replacement therefor. If the
option is a non-qualified option, the income recognized on exercise
is added to the basis. If the option is an incentive stock option, the
optionee will recognize gain if the shares surrendered were acquired
through the exercise of an incentive stock option and have not been
held for the applicable holding period. This gain will be added to
the basis of the shares received in replacement of the previously
owned shares.
When a SAR is exercised, the employee will recognize
ordinary income in the year the SAR is exercised equal to the value
of the appreciation that he is entitled to receive pursuant to the
formula previously described, and the Company will be entitled to
a deduction in the same year and in the same amount.
An employee who receives restricted stock or performance
shares will normally recognize taxable income on the date the
shares become transferable or no longer subject to substantial risk
of forfeiture or on the date of their earlier disposition. The amount
of such taxable income will be equal to the amount by which the
fair market value of the shares of Common Stock on the date such
restrictions lapse (or any earlier date on which the shares are
disposed of) exceeds their purchase price, if any. An employee
may elect, however, to include in income in the year of purchase
or grant the excess of the fair market value of the shares of
Common Stock (without regard to any restrictions) on the date of
purchase or grant over its purchase price. Subject to the limitations
imposed by Section 162(m) of the Code, the Company will be
entitled to a deduction for compensation paid in the same year and
in the same amount as income is realized by the employee.
Dividends currently paid to the participant will be taxable
compensation income to the participant and deductible by the
Company.
If, upon a change in control of the Company, the
exercisability or vesting of an Incentive granted under the Plan is
accelerated, any excess on the date of the change in control of the
fair market value of the shares or cash issued under Incentives over
the purchase price of such shares, if any, may be characterized as
Parachute Payments (within the meaning of Section 280G of the
Code) if the sum of such amounts and any other such contingent
payments received by the employee exceeds an amount equal to
three times the "Base Amount" for such employee. The Base
Amount generally is the average of the annual compensation of
such employee for the five years preceding such change in
ownership or control. An Excess Parachute Payment, with respect
to any employee, is the excess of the Parachute Payments to such
person, in the aggregate, over and above such person's Base
Amount. If the amounts received by an employee upon a change
in control are characterized as Parachute Payments, such employee
will be subject to a 20% excise tax on the Excess Parachute
Payment, and the Company will be denied any deduction with
respect to such Excess Parachute Payment.
This summary of federal income tax consequences of non-
qualified stock options, incentive stock options, restricted stock and
performance shares does not purport to be complete. Reference
should be made to the applicable provisions of the Code. There
also may be state and local income tax consequences applicable to
transactions involving Incentives.
The Board of Directors unanimously recommends that you
vote for approval of the 1995 Incentive Compensation Plan.
VOTING SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding
ownership of the Company's Common Stock by (i) each person
known to the Company to be the beneficial owner of more than 5%
of the outstanding Common Stock and (ii) all of the Company's
directors and executive officers as a group. Unless otherwise
indicated, all information is presented as of the Record Date and all
shares indicated as beneficially owned are held with sole voting and
investment power.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Name and Address of Beneficial of Voting
Beneficial Owner Ownership<FN1> Power<FN2>
_________________ _____________ __________
<S> <C> <C>
Principal Shareholders:
Regions Bank of Louisiana, as Trustee <FN3>
(the "Trustee") of the Stock Bonus
Plan and ESOP (the "Benefit Plans")
P. O. Box 7232
Monroe, Louisiana 71211
Putnam Investments, Inc. <FN4>
One Post Office Square
Boston, Massachusetts 02109
Gabelli Funds, Inc. <FN5>
One Corporate Center
Rye, New York 10580-1434
Management Group:
All directors and executive <FN6>
officers as a group (16 persons)
____________________
</TABLE>
<FN1> Determined in accordance with Rule 13d-3 of the SEC
based upon information furnished by the persons listed.
Although several persons beneficially own in excess of 5%
of certain classes of the Company's voting preferred stock,
the percentage of voting power held by these persons is
immaterial.
<FN2> Based on the Company's records and, with respect to all
shares held of record by the Trustee, based on information
the Trustee periodically provides to the Company to
establish that certain of the Trustee's shares entitle it to ten
votes per share.
<FN3> All voting power attributable to these shares is directed by
the participants of the Benefit Plans, each of whom is
deemed, subject to certain limited exceptions, to tender such
instructions as a "named fiduciary" under such plans, which
requires the participants to direct their votes in a manner
that they believe to be prudent and in the best interests of
the participants of each respective plan.
<FN4> Based on share ownership information as of
_______________, 1995 contained in a Schedule 13G
Report that Putnam Investments, Inc. has filed with the
SEC. Based on such information, Putnam Investments, Inc.
(i) shares voting power with respect to __________ of the
shares shown and (ii) shares dispositive power with respect
to all of the shares shown.
<FN5> Based on share ownership information as of
________________ contained in a Schedule 13D Report
and amendments thereto that Gabelli Funds, Inc. has filed
with the SEC. Based on such information, Gabelli Funds,
Inc. (i) does not have authority to vote __________ of the
shares shown and (ii) shares voting and dispositive power
with respect to __________ of the shares shown.
<FN6> Includes (i) ____________ shares of Restricted Stock, (ii)
____________ Option Shares that such persons have a right
to acquire within 60 days of the Record Date, (iii)
____________ Plan Shares allocated to their respective
accounts as of December 31, 1994 under the Benefit Plans
and as of the Record Date under the 401(k) Plan, (iv)
18,284 shares held of record by the spouses of certain
directors and executive officers, as to which beneficial
ownership is disclaimed, and (v) 543 shares held as
custodian for the benefit of the children of a director and
executive officer.
___________________
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Report of Compensation Committee Regarding Executive Compensation
General. The Board's Compensation Committee, among
other things, monitors and evaluates the compensation levels of the
Company's executive officers and directors and administers the
Company's restricted stock and incentive compensation programs.
All determinations of the Committee are submitted to the full
Board for its ratification, except for awards under certain of the
Company's stock-based compensation programs and certain other
determinations that require action by independent directors. Under
the Company's Bylaws, the Company may not, among other things,
set the salaries or change the benefits of its executive officers
without the approval of the Compensation Committee. The
Committee is composed entirely of Board members who are not
employees of the Company.
The Committee periodically consults with nationally
recognized consulting firms to assist it in evaluating the Company's
executive compensation. With the assistance of the Committee and
its consultants, the Board has adopted an executive compensation
philosophy statement setting forth the Company's compensation
objectives, which include:
. if justified by corporate performance, compensating
the executive group at rates higher than those of
comparable companies in an effort to hire, develop,
reward and retain key executives
. providing incentive compensation tied to the
Company's annual, intermediate and long-term
performance
. encouraging team orientation
. providing sufficient benefit levels for executives and
their families in the event of disability, illness or
retirement
. structuring executive compensation to ensure its full
deductibility under the Omnibus Budget
Reconciliation Act of 1993
At present, the Company's executive compensation is
comprised of (i) salary, (ii) an annual cash and stock incentive
bonus, (iii) additional incentive compensation in the form of stock
options and a stock retention program, and (iv) other benefits
typically provided to executives of comparable companies, all as
described further below. For each such component of
compensation, the Company's compensation levels are compared
with those of comparable companies. For purpose of establishing
these comparable compensation levels, the Company compares
itself to a national group of several hundred companies selected by
management and its consultants. This group consists of a
substantial number of telecommunications companies (including
most of the 12 companies comprising the "Value Line
Telecommunications/Other Majors Index" referred to in the
Company's stock performance graph appearing elsewhere herein),
but also includes a large number of other companies that have
revenue levels similar to the Company's. Compensation data from
telecommunications companies is given substantially more weight
than data from other companies in establishing comparable
compensation levels.
Salary. The salary of each executive officer, including the
Chief Executive Officer, is based primarily on the officer's level of
responsibility and comparisons to prevailing salary levels for
similar positions at comparable companies. Based on these criteria,
the Committee seeks to provide the Company's executive officers
with salaries that are at least commensurate with the median salary
levels at comparable companies. In connection with reviewing and
establishing salaries, the Committee typically also reviews the
Company's financial performance during the prior year. However,
these criteria are given less weight in determining salaries
principally due to the Committee's belief that it is more appropriate
to reward positive performance through bonuses, stock options and
other incentive compensation programs. Notwithstanding this, the
Committee believes it is appropriate to establish salaries in excess
of median salary levels when warranted by the Company's financial
performance in relation to comparable companies. Although the
individual performance of each executive officer is reviewed, the
Committee historically has not attempted to reward individual
achievement through the salary component of compensation due to
the inherent subjectivity of such evaluations and the detrimental
effect this might have on the Company's team orientation to
executive compensation.
During 1994, the Committee agreed to increase the salary
of each executive officer between 4 to 5%. In connection with
this, the Committee reviewed compensation information for
comparable companies previously prepared by the Company's
consultants and updated by management, along with the Company's
return on equity, revenue growth and earnings growth for the prior
year. These raises resulted in the Company's Chief Executive
Officer receiving a salary approximately equal to the median salary
for chief executive officers at comparable companies and all other
executive officers receiving salaries in excess of the median salaries
of comparable executives at other companies. The Committee
believes these raises were consistent with its objectives of (i)
ensuring that the executive officers receive salaries at least equal to
those of comparable executives, (ii) providing above-market salaries
when warranted by the Company's financial performance, and (iii)
applying a team orientation to executive compensation.
Annual Bonus. In connection with the Company's annual
incentive bonus program, the Compensation Committee annually
establishes target performance levels and the amount of bonus
payable if these targets are met, which typically is defined in terms
of a percentage of each officer's salary. In early 1994 the
Committee recommended that the executive officers receive an
incentive bonus for 1994 equal to 25% of their annual salaries if
the Committee's 1994 targets were attained, with no bonus being
payable if certain minimum target performance levels were not
attained, and a bonus of up to 50% of salary being payable if the
Committee's 1994 targets were substantially exceeded. Although
the Committee may choose any measure of financial performance
that it deems appropriate, the Committee for the past several years
has used return on equity and revenue growth (as adjusted for
certain non-recurring transactions specified in administrative
guidelines prepared in 1990), but has weighted return on equity
more heavily than revenue growth in order to reflect the
Committee's desire to more closely tie executive compensation to
shareholder return.
In determining the size of the executive officers' target
bonuses, the Compensation Committee reviews information
furnished by its consultants as to the bonus practices among
comparable companies. The annual bonuses paid to the Company's
Chief Executive Officer has typically been substantially less than
the median annual bonus paid to CEOs at comparable companies,
[and the annual bonuses paid to the Company's other executive
officers has typically approximated or been slightly below the
median annual bonuses paid by comparable companies.] To
compensate for this, the Company seeks to provide its executives
with the opportunity to earn above-average levels of stock incentive
compensation.
As a result of the Company exceeding its 1994 targets for
both return on equity and revenue growth, each executive officer
has received a bonus equal to _____% of his 1994 salary. The
Compensation Committee determined to pay _____% of each
executive officer's incentive bonus in cash and _____% in
Restricted Stock that may not be transferred by the officer for five
years and will be forfeited if prior to that time he leaves the
Company, other than as a result of death, disability or retirement.
As a result, the realization of a significant portion of the 1994
bonus is tied to the Company's future stock price performance.
Similar to its policy with respect to salaries, the Committee
traditionally has refrained from rewarding individual achievement
through the use of bonuses. However, in 1993 and 1994 the
Committee has approved a special incentive bonus for the
Company's President - Telecommunications Services based upon
attainment of certain quantitative goals relating to cellular revenue
growth (weighted 40%), operating expenses (weighted 30%) and
subscriber growth (weighted 10%), and certain specified
nonquantitative goals (weighted 20%). Under the special bonus,
this officer may receive a cash bonus of 10% of his salary if all
goals are met, with lesser amounts being payable for partial
satisfaction of one or more of these goals, and a bonus of up to
20% of salary being payable if all goals are substantially exceeded.
The 10% target bonus is designed to sufficiently reward this
executive for successful development of a line of business that the
Company believes has above-average growth potential, while at the
same time ensuring that the amount received is not large enough to
conflict with the Company's team approach to executive
compensation. For 1994, this special bonus resulted in an
additional cash payment of $____________ to such officer. The
Committee has approved a similar arrangement for this officer for
1995 and is currently exploring the possibility of reserving a
portion of future bonus pools for discretionary bonus awards to
executive officers based on their role in significant contributions
benefiting the Company and its shareholders.
Stock Incentive Programs. The Company's current
incentive compensation programs authorize the Compensation
Committee to grant stock options and various other incentives to
key personnel. The Committee's philosophy with respect to stock
incentive awards is to strengthen the relationship between
compensation and increases in the market price of the Common
Stock and thereby ally the executive officers' financial interests
with those of the Company's shareholders. For a description of the
Company's proposal to approve a new incentive compensation
program, see "Approval of the Company's 1995 Incentive
Compensation Program."
Options. Options granted under these programs become
exercisable based upon criteria established by the Compensation
Committee. The Compensation Committee determines the size of
option grants based on information furnished by the Committee's
consultants regarding stock option practices among comparable
companies and by applying compensation multiples designed to
create greater opportunities for stock ownership the greater one's
responsibilities and duties. The Committee also assesses the degree
to which outstanding unexercised options held by the executive
officers continue to provide appropriate incentives to improve the
Company's performance. In 1993 and 1994 the Committee
determined that it was unnecessary to award any new options.
Stock Retention Program. To provide an incentive for
officers to acquire and hold Common Stock, the Compensation
Committee instituted a stock retention program in 1993. Under this
program, each executive officer who in 1993 voluntarily purchased
a specified number of shares of Common Stock was awarded (i) an
equal number of shares of Restricted Stock, all of which will be
forfeited if within three years the purchased shares are sold or if
the officer's employment terminates, other than as a result of death,
disability or retirement, and (ii) performance units entitling the
officer to earn a number of shares of Common Stock equal to 40%
of the number of shares purchased. These shares will be earned
only if the ten-day average closing price of the Common Stock
increases by 30% over the price on the award date at any time
prior to the fifth anniversary of the award, but may in no event be
issued prior to the third anniversary date of the award. The
executive officers are paid dividend equivalent cash payments with
respect to unearned performance units at the dividend rate
applicable to the underlying Common Stock. The Company
arranged and guaranteed loans to officers for the purchase of shares
in 1993 under this program. No awards were made under this
program during 1994.
Other Benefits. The Company maintains certain broad-
based employee benefit plans in which the executive officers are
generally permitted to participate on terms substantially similar to
those relating to all other participants, subject to certain legal
limitations on the amounts that may be contributed or the benefits
that may be payable thereunder. The Board has determined to have
the Company's matching contribution under the 401(k) Plan
invested in Common Stock so as to further align employees' and
shareholders' financial interests. The Company also maintains the
Bonus Plan and ESOP, which serve to further align employees' and
shareholders' interests.
Additionally, the Company makes available to its officers
a supplemental life insurance plan, supplemental benefits under its
medical reimbursement plan, a supplemental retirement plan (which
is described below under "- Pension Plan"), a supplemental defined
contribution plan, a supplemental 401(k) plan, and a disability
salary continuation plan.
Compensation of Chief Executive Officer. The criteria,
standards and methodology used by the Committee in reviewing
and establishing the Chief Executive Officer's salary, bonus and
other compensation are the same as those used with respect to all
other executive officers, as described above. Application of these
criteria in 1994 resulted in the Chief Executive Officer receiving
for 1994 (i) a salary of $336,129, representing a 4.3% increase over
his 1993 salary, and (ii) a bonus consisting of $__________ cash
and ________ shares of Restricted Stock, which in the aggregate
was valued on the date of grant at _____% of his base salary.
Ernest Butler, Jr. James B. Gardner [add name of Mr. Lovett's
replacement, if any]
Compensation Committee Interlocks and Insider Participation
As indicated above, the members of the Compensation
Committee are Ernest Butler, Jr., James B. Gardner and
___________________. Mr. Butler is Executive Vice President of
Stephens Inc., which has provided, and is expected to continue to
provide, investment banking services to the Company from time to
time. During 1994, Stephens Inc. was a co-manager of the
Company's $150 million offering of senior notes.
Summary of Compensation
The following table sets forth certain information regarding
the compensation of (i) the Company's Chief Executive Officer and
(ii) each of the Company's four most highly compensated executive
officers other than the Chief Executive Officer.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation Awards
________________________
No. of
Annual Compensation Restricted Securities
Name and Current _________________________ Stock Underlying Al Other
Principal Position Year Salary Bonus Awards<FN1> Options Compensation<FN2>
________________________ ____ ________ _________ __________ __________ _______________
<S> <C> <C> <C> <C> <C> <C>
Clarke M. Williams 1994 $448,161 $ $ 0 $
Chairman of the Board 1993 429,710 103,130 178,554 0 42,554
1992 412,648 123,795 82,545 97,500 40,768
Glen F. Post, III 1994 336,129 0
Vice Chairman of the 1993 322,288 77,349 132,229 0 20,366
Board, President and 1992 302,899 90,870 60,587 75,000 18,150
Chief Executive Officer
W. Bruce Hanks 1994 217,930 0
President- 1993 209,796 69,627 93,051 0 18,589
Telecommunications 1992 204,534 61,360 40,899 52,500 16,485
Services
Harvey P. Perry 1994 212,440 0
Senior Vice President, 1993 202,496 48,599 92,896 0 18,442
Secretary and General 1992 194,632 58,390 38,927 52,500 16,123
Counsel
R. Stewart Ewing, Jr. 1994 212,178 0
Senior Vice President 1993 202,256 48,541 92,605 0 18,164
and Chief Financial 1992 194,491 58,347 38,897 52,500 15,872
Officer
________________
</TABLE>
<FN1> Represents for each year shown the number of shares of
Restricted Stock awarded in connection with the Company's
annual incentive bonuses, multiplied by the per share closing
price of the Common Stock on the award date, plus, for 1993
only, the number of shares of Restricted Stock awarded in
connection with the Company's stock retention program,
multiplied by the per share closing price of the Common
Stock on the award date. For additional information on the
terms of the Restricted Stock, see "Executive Compensation
and Related Information - Report of Compensation
Committee Regarding Executive Compensation." At
December 31, 1994, the named executive officers held the
following aggregate number of shares of Restricted Stock
with the following year-end values: Mr. Williams, 17,506
shares ($516,427); Mr. Post, 11,778 shares ($347,451); Mr.
Hanks, 8,958 shares ($264,261); Mr. Perry, 8,577 shares
($253,022); and Mr. Ewing, 8,311 shares ($245,175). These
amounts do not reflect awards of Restricted Stock granted in
February 1995 as incentive bonuses for the Company's 1994
performance. Dividends declared with respect to the shares
of Restricted Stock are paid currently.
<FN2> Comprised of the Company's (i) matching contributions to the
401(k) Plan, (ii) premium payments under a medical
reimbursement plan that are attributable to benefits in excess
of those provided generally for other employees, (iii)
premium payments for life insurance policies providing death
benefits to the executive officers' beneficiaries (and no other
benefit to such officers), and (iv) contributions pursuant to the
Stock Bonus Plan and ESOP valued as of December 31, 1994
(as supplemented in 1994 by contributions under the
Company Supplemental Defined Contribution Plan), in each
case for and on behalf of the named executive officers as
follows:
<TABLE>
<CAPTION>
Medical Life Stock Bonus
401(k) Plan Plan Insurance Plan and ESOP
Name Year Contributions Premiums Premiums Contributions
__________________ ____ _____________ ________ ________ _____________
<S> <C> <C> <C> <C> <C>
Clarke M. Williams 1994 $ 0 $ 1,344 $ 29,245 $
1993 0 1,344 25,923 15,287
1992 2,182 1,344 23,131 14,111
Glen F. Post, III 1994 4,135 1,344 628
1993 3,164 1,344 571 15,287
1992 2,182 1,344 513 14,111
W. Bruce Hanks 1994 4,424 1,344 384
1993 3,285 1,344 361 13,599
1992 2,182 1,344 348 12,611
Harvey P. Perry 1994 4,429 1,344 756
1993 3,323 1,344 669 13,106
1992 2,182 1,344 597 12,000
R. Stewart Ewing, Jr. 1994 4,429 1,344 445
1993 3,323 1,344 397 13,110
1992 2,182 1,344 354 11,992
_________________________________
</TABLE>
Option Exercises and Holdings
The following table sets forth certain information concerning
the exercise of options during 1994 and unexercised options held at
December 31, 1994.
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values
<TABLE>
<CAPTION>
No. of Number of Securities Value of Unexercised
Shares Underlying Unexercised in-the-Money Options at
Acquired Options at December 31, 1994 December 31, 1994
on Value ____________________________ ____________________________
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
__________________ ________ ________ ___________ _____________ ___________ _____________
<S> <C> <C> <C> <C> <C> <C>
Clarke M. Williams 0 $ 0 596,203 30,835 $8,104,903 $241,438
Glen F. Post, III 15,000 340,500 223,782 12,950 2,213,523 101,399
W. Bruce Hanks 37,373 586,069 103,666 8,528 496,705 66,774
Harvey P. Perry 27,500 566,215 120,528 7,817 899,557 61,207
R. Stewart Ewing, Jr. 3,537 71,796 93,717 6,870 418,804 53,792
</TABLE>
Pension Plan
The Company has a Supplemental Executive Retirement
Plan (the "Supplemental Plan") pursuant to which each officer who
has completed at least five years of service is entitled to receive a
monthly payment upon retirement or, under certain circumstances,
attainment of age 55. The following table reflects the annual
retirement benefits that a participant with the indicated years of
service and compensation level may expect to receive under the
Supplemental Plan assuming retirement at age 65. Early retirement
may be taken at age 55 by any person with 15 or more years of
service, with reduced benefits.
Annual Benefit Payable on Retirement
Years of Service
__________________________________________________
Compensation 15 20 25 30
____________ _________ _________ _________ ________
$250,000 $ 56,250 $ 75,000 $ 93,750 $112,500
300,000 67,500 90,000 112,500 135,000
350,000 78,750 105,000 131,250 157,500
400,000 90,000 120,000 150,000 180,000
450,000 101,250 135,000 168,750 202,500
500,000 112,500 150,000 187,500 225,000
550,000
600,000
650,000
700,000
The above table reflects the benefits payable under the
Supplemental Plan assuming such benefits will be paid in the form
of a monthly lifetime annuity and before reductions relating to the
receipt of Social Security benefits as described below. The amount
of an officer's monthly payment under the Supplemental Plan is
equal to his number of years of service (up to a maximum of 30
years) multiplied by the difference between 1.5% of his average
monthly compensation during the 36-month period within his last
ten years of employment in which he received his highest
compensation and 3 1/3% of his estimated monthly Social Security
benefit.
Under the Supplemental Plan, the number of credited years
of service at December 31, 1994 was over 30 years for Mr.
Williams, 18 years for Mr. Post, 14 years for Mr. Hanks, 11 years
for Mr. Ewing and 10 years for Mr. Perry, and the compensation
upon which benefits are based is the aggregate amount reported for
each respective officer under the columns in the Summary
Compensation Table appearing above that are entitled "Salary",
"Bonus" and "Restricted Stock Awards" (less, for 1993 only,
amounts included under the "Restricted Stock Awards" column that
are attributable to shares of Restricted Stock awarded in connection
with the Company's stock retention program).
Mr. Williams has the option of receiving retirement benefits
under either the Supplemental Plan or under a separate
supplemental retirement plan (the "Other Plan") in which he held
grandfathered rights when the Supplemental Plan was adopted.
Under this Other Plan, Mr. Williams would be entitled upon
retirement to receive an annual benefit equal to 65% of his highest
annual salary during the last five year of employment. This benefit
is reduced by (i) his Social Security benefit, determined as of the
date of retirement, and (ii) the value of his Stock Bonus Plan and
related Paysop accounts converted to a monthly annuity. The
salary upon which benefits are based is the amount reported under
the "Salary" column in the Summary Compensation Table
appearing above. Currently, the benefits Mr. Williams would
receive upon retirement under the Supplemental Plan significantly
exceed the benefits he would receive under the Other Plan. The
Company anticipates that this benefit level differential will continue
for the foreseeable future.
Employment Contracts
The Company has agreements with certain executive
officers, including Messrs. Post, Hanks, Perry and Ewing, providing
for a severance payment if such officer is terminated without cause
or resigns under certain specified circumstances within three years
following any change in control of the Company. "Change in
control" is defined as the occurrence of any event relating to the
Company that would be required to be reported to the Securities
and Exchange Commission under Schedule 14A of Regulation 14A.
The severance payment is equal to three times the officer's annual
salary if the Board did not approve, and one year's salary if the
Board did approve, the change in control. In no event, however,
may a severance payment exceed the amount allowable to the
Company as a deduction for federal tax purposes.
The Company also has an employment agreement with Mr.
Williams providing for, among other things, a minimum annual
salary of $436,800, participation in all of the Company's employee
benefit plans and use of the Company's aircraft. The agreement's
initial three-year term lapses in May 1996 but thereafter continues
from year to year, subject to the right of Mr. Williams or the
Company to terminate the agreement as of the third anniversary or
any subsequent anniversary date. If Mr. Williams is terminated
without cause or resigns under certain specified circumstances,
including following any change in control of the Company (defined
in the same manner as in the agreements described in the preceding
paragraph), he will be entitled to receive, in addition to all amounts
to which he is entitled pursuant to the Company's termination
policies then in effect, certain severance benefits, including (i) a
lump sum payment equal to three times his annual compensation,
(ii) continued participation in the Company's employee benefit
plans for three years and (iii) continued use of the Company's
aircraft for one year on terms comparable to those previously in
effect. If Mr. Williams terminates his employment following a
change in control of the Company, he will be entitled to receive,
in addition to any other amounts due, amounts sufficient to
reimburse him for any excise or income taxes payable as a result
of his receipt of severance benefits under the agreement.
Performance Graph
The graph below compares the cumulative total shareholder
return on the Common Stock for the last five years with the
cumulative total return on the S&P 500 Index and the Value Line
Telecommunications/Other Majors Index, in each case assuming (i)
the investment of $100 on January 1, 1990 at closing prices on
December 31, 1989 and (ii) reinvestment of dividends. The Value
Line Telecommunications/Other Majors Index is prepared by Value
Line, Inc., consists of 12 telecommunications companies, including
the Company, and is available by contacting Value Line, Inc.
directly.
[GRAPH TO COME.]
<TABLE>
<CAPTION>
December 31,
______________________________________________________________________________________
1989 1990 1991 1992 1993 1994
______________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Century Telephone Enterprises, Inc. $100 $89 $ 87 $124 $113 $131
______________________________________________________________________________________
S&P 500 Index $100 $97 $126 $136 $150 $152
______________________________________________________________________________________
Value Line Telecommunications/
Other Majors Index $100 $85 $103 $113 $126 $117
______________________________________________________________________________________
</TABLE>
Certain Transactions and Filings
The Company paid approximately $445,000 to Boles, Boles
& Ryan, a professional law corporation, for legal services rendered
to the Company in 1994. William R. Boles, Jr., a director of the
Company since 1992, is Vice President and a director and
practicing attorney with such firm, which has provided legal
services to the Company since 1968.
During 1994, the Company paid approximately $739,000 to
a real estate firm owned by the brother of Harvey P. Perry, the
Company's Senior Vice President, Secretary and General Counsel.
In exchange for such payments (a substantial portion of which were
used to compensate subcontractors and vendors and to recoup other
out-of-pocket costs), such firm provided a variety of services with
respect to several of the Company's office sites and over 120
of its cellular tower sites in several states, including locating and
analyzing properties suitable for acquisition as cellular tower sites,
negotiating purchase terms with the land owners, and subleasing
cellular tower space.
During 1994, the Company purchased approximately
$376,000 of electrical contracting services from a firm owned by
the wife and son of Johnny Hebert, a director of the Company.
During 1994, the Company purchased in the ordinary course
of business approximately $83,000 of automobiles, computers and
computer repair services from companies owned and operated by
Calvin Czeschin, a director of the Company. During 1994, the
Company, a local telephone company owned and operated by Mr.
Czeschin and a third telephone company collaborated to build a 60-
mile fiber optic route in Arkansas to replace a microwave radio
route jointly used by all three companies. In connection with this
project, the Company acted as the general contractor for Mr.
Czeschin's company for purposes of constructing the 9.7-mile
portion of the route located in the franchised service territory of
Mr. Czeschin's company. In exchange for these and other ancillary
services, the Company was reimbursed approximately $427,000,
which represented 100% of the Company's engineering and direct
construction costs.
[Add 16b reporting violations, if any.]
For further information see "- Compensation Committee
Interlocks and Insider Participation."
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
KPMG Peat Marwick, independent certified public
accountants for the Company for 1994, has been selected by the
Board to serve again in that capacity for 1995. A representative of
such firm is expected to attend the Meeting, will have an
opportunity to make a statement if he or she wishes to do so, and
will be available to respond to appropriate questions.
OTHER MATTERS
Quorum and Voting of Proxies
The presence, in person or by proxy, of two-thirds of the
total voting power of the Voting Shares is necessary to constitute
a quorum to organize the Meeting.
If a quorum is present, directors will be elected by plurality
vote and, as such, withholding authority to vote in the election of
directors will not affect whether the proposed nominees named
herein are elected. As indicated above, (i) the affirmative vote of
the holders of two-thirds of the voting power present or represented
at the Meeting will be required to approve the Amendment
Proposals, except for Amendment Proposal No. 3, which must
receive the affirmative vote of the holders of a majority of the
Company's total voting power and (ii) the affirmative vote of the
holders of a majority of the voting power present or represented at
the Meeting will be required to approve the proposal to adopt the
Company's 1995 Incentive Compensation Plan (the "Incentive Plan
Proposal"). For purposes of determining the amount of voting
power present with respect to the votes to be taken with respect to
the Incentive Plan Proposal and Amendment Proposals No. 1, 2 and
4, shares as to which the proxy holders have been instructed to
abstain from voting will not be treated present and will therefor not
affect the outcome of the vote. Abstaining with respect to
Amendment Proposal No. 3 will have the same effect as a negative
vote.
Under the rules of the New York Stock Exchange, brokers
who hold shares in street name for customers generally have the
authority to vote in their discretion on matters when they have not
received voting instructions from beneficial owners, subject to
several specified exceptions. Brokers that do not receive such
instructions will be entitled to vote in their discretion with respect
to the Company's election of directors and each Amendment
Proposal, but will not be entitled to vote in their discretion with
respect to the Incentive Plan Proposal. If, with respect to any
particular matter, brokers do not have such discretionary voting
power or elect not to exercise such discretionary power with respect
to shares as to which no instructions are received, such shares will
be treated as present for purposes of constituting a quorum but not
present with respect to such matter and will not effect the outcome
of any vote, except the vote with respect to Amendment Proposal
No. 3, in which instance such broker "non-votes" will have the
same effect as a negative vote.
Voting Shares represented by all properly executed proxies
received in time for the Meeting will be voted at the Meeting. A
proxy may be revoked at any time before it is exercised by filing
with the Secretary of the Company a written revocation or a duly
executed proxy bearing a later date, or by attending the Meeting
and voting in person. Unless revoked, the proxy will be voted as
specified and, if no specifications are made, will be voted in favor
of the proposed nominees and the proposals described herein.
Management is unaware of any matter for action by
shareholders at the Meeting other than the election of directors and
the other proposals described herein. The enclosed proxy, however,
will confer discretionary authority with respect to any other matter
that may properly come before the Meeting. It is the intention of
the persons named therein to vote in accordance with their best
judgment on any such matter.
Shareholder Nominations and Proposals
As described above under the heading "Approval of
Amendments to the Company's Articles of Incorporation -
Amendment Proposal No. 2 - Addition of New Article Relating to
Shareholder Nominations and Proposals," the Board of Directors
has recommended an amendment to the Articles that would require
shareholders intending to nominate a person for election as a
director or to bring other matters before a shareholders' meeting to
provide advance written notice and follow certain other procedures.
If this amendment is adopted by the shareholders, the advance
written notice required thereunder in connection with the
Company's 1996 annual shareholders' meeting must be received by
the Company between January 12, 1996 and March 12, 1996. In
order to be considered for inclusion in the Company's 1996 proxy
materials pursuant to the proxy rules of the Securities and
Exchange Commission, shareholder proposals must be received by
the Company on or before January 12, 1996.
By Order of the Board of Directors
Harvey P. Perry
Secretary
Dated: March _____, 1995
Preliminary Copy Filed With
the Commission on February 6, 1995
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CENTURY TELEPHONE ENTERPRISES, INC.
The undersigned hereby constitutes and appoints Clarke M. Williams or
Glen F. Post, III, or either of them, proxies for the undersigned, with full
power of substitution, to represent the undersigned and to cast the number of
votes attributable to all of the shares of common stock and voting preferred
stock (collectively, the "Voting Shares") of Century Telephone Enterprises,
Inc. (the "Company") that the undersigned is entitled to vote at the annual
meeting of shareholders of the Company to be held on May 11, 1995, and at any
and all adjournments thereof (the "Meeting").
1. To elect five Class I Directors.
FOR [ ] all nominees listed WITHHOLD AUTORITY [ ] to vote for
below (except as all nominees
marked to the listed below
contrary below)
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below:
William R. Boles, Jr. W. Bruce Hanks C. G. Melville, Jr.
Glen F. Post, III Clarke M. Williams
2. Proposals described in the Proxy Statement for the Meeting to amend the
Company's articles of incorporation to:
(a) increase the number of authorized shares of common stock from 100
million to 175 million
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) require shareholders to provide advance notice to nominate directors
or bring other matters before shareholders' meetings
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Please See Reverse Side)
(c) clarify, and in certain limited instances expand, the protections
currently afforded under the Company's "fair price" article
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) effect the other changes described in the Proxy Statement for the
Meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve the Company's 1995 Incentive Compensation Program
described in the Proxy Statement for the Meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion to vote upon such other business as may properly
come before the Meeting.
The Board of Directors recommends that you vote FOR the nominees and the
proposals listed above. This Proxy will be voted as specified.
If no specific directions are given, all of the votes attributable to your
voting shares will be voted for the nominees and the proposals.
_____________ _________________________
DATE NAME (PLEASE PRINT)
________________________________________ Please sign exactly as name
SIGNATURE appears on the certificate or
certificates representing shares
to be voted by this proxy. When
_________________________________________ signing as executor,
ADDITIONAL SIGNATURE (IF JOINTLY HELD) adminstrator, attorney, trustee
or guardian, please give full
title as such. If a corporation,
please sign in full corporate name
by president or other authorized
officer. If a partnership, please
sign in partnership name by
authorized persons.
EXHIBIT A
PROPOSED ARTICLES OF INCORPORATION
OF
CENTURY TELEPHONE ENTERPRISES, INC.
Set forth below are the articles of incorporation of the
Company, as restated, assuming the adoption of each of the
Amendment Proposals, pursuant to which the Board of Directors
proposes to amend such articles by (i) amending paragraphs A(1),
B, C and D of Article III and reordering the Article's
paragraphing, (ii) amending the second paragraph of Article IV
and renumbering the entire article as Article VII, (iii)
consolidating the provisions of Article V into Article VII(B),
(iv) renumbering Article VI as Article VIII, (v) amending Article
VII and renumbering it as Article VI(B), (vi) amending paragraphs
A, C, D and E of Article VIII and consolidating and reordering
such amended provisions into Article V, (vii) amending paragraph
B of Article VIII and renumbering such amended provisions as
Article IV, (viii) renumbering Article IX as Article VI(A), (ix)
renumbering Article X as Article IV(E), (x) amending paragraphs A
and B of Article XI and renumbering such amended provisions as
Article IX, (xi) amending paragraph C of Article XI and
renumbering it as Article V(E), and (xii) adding new provisions
as Articles IV(F), V(D), VI(C) and VII(C).
* * * * * * * * * *
[Articles I and II, which will not be amended, are
intentionally omitted.]
ARTICLE III
Capital
A. Authorized Stock. The Corporation shall be authorized
to issue an aggregate of 177 million shares of capital stock, of
which 175 million shares shall be Common Stock, $1.00 par value
per share, and two million shares shall be Preferred Stock,
$25.00 par value per share.
B. Preferred Stock. Shares of Preferred Stock may be
issued from time to time in one or more series. Authority is
hereby vested in the Board of Directors of the Corporation to
amend these Articles of Incorporation from time to time to fix
the preferences, limitations and relative rights as between the
Preferred Stock and the Common Stock, to fix the number of shares
constituting any series of Preferred Stock and the designation
thereof, and to fix variations in the preferences, limitations
and relative rights as between different series of Preferred
Stock.
C. Voting Rights. (1) Each share of Common Stock and
each outstanding share of the Series A and H Preferred Stock
("Voting Preferred Stock") which has been beneficially owned
continuously by the same person since May 30, 1987 will entitle
such person to ten votes with respect to such share on each
matter properly submitted to the shareholders of the Corporation
for their vote, consent, waiver, release or other action when the
Common Stock and the Voting Preferred Stock vote together with
respect to such matter.
(2) (a) For purposes of this paragraph C, a change in
beneficial ownership of a share of the Corporation's stock shall
be deemed to have occurred whenever a change occurs in any person
or group of persons who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise
has or shares (i) voting power, which includes the power to vote,
or to direct the voting of such share; (ii) investment power,
which includes the power to direct the sale or other disposition
of such share; (iii) the right to receive or retain the proceeds
of any sale or other disposition of such share; or (iv) the right
to receive distributions, including cash dividends, in respect to
such share.
(b) In the absence of proof to the contrary
provided in accordance with the procedures referred to in
subparagraph (4) of this paragraph C, a change in beneficial
ownership shall be deemed to have occurred whenever a share of
stock is transferred of record into the name of any other person.
(c) In the case of a share of Common Stock or
Voting Preferred Stock held of record in the name of a
corporation, general partnership, limited partnership, voting
trustee, bank, trust company, broker, nominee or clearing agency,
or in any other name except a natural person, if it has not been
established pursuant to the procedures referred to in
subparagraph (4) that such share was beneficially owned
continuously since May 30, 1987 by the person who possesses all
of the attributes of beneficial ownership referred to in clauses
(i) through (iv) of subparagraph (2)(a) of this paragraph C with
respect to such share of Common Stock or Voting Preferred Stock,
then such share of Common Stock or Voting Preferred Stock shall
carry with it only one vote regardless of when record ownership
of such share was acquired.
(d) In the case of a share of stock held of
record in the name of any person as trustee, agent, guardian or
custodian under the Uniform Gifts to Minors Act, the Uniform
Transfers to Minors Act or any comparable statute as in effect in
any state, a change in beneficial ownership shall be deemed to
have occurred whenever there is a change in the beneficiary of
such trust, the principal of such agent, the ward of such
guardian or the minor for whom such custodian is acting.
(3) Notwithstanding anything in this paragraph C to
the contrary, no change in beneficial ownership shall be deemed
to have occurred solely as a result of:
(a) any event that occurred prior to May 30,
1987, including contracts providing for options, rights of first
refusal and similar arrangements, in existence on such date to
which any holder of shares of stock is a party;
(b) any transfer of any interest in shares of
stock pursuant to a bequest or inheritance, by operation of law
upon the death of any individual, or by any other transfer
without valuable consideration, including a gift that is made in
good faith and not for the purpose of circumventing this
paragraph C;
(c) any change in the beneficiary of any trust,
or any distribution of a share of stock from trust, by reason of
the birth, death, marriage or divorce of any natural person, the
adoption of any natural person prior to age 18 or the passage of
a given period of time or the attainment by any natural person of
a specified age, or the creation or termination of any
guardianship or custodian arrangement; or
(d) any appointment of a successor trustee,
agent, guardian or custodian with respect to a share of stock.
(4) For purposes of this paragraph C, all
determinations concerning changes in beneficial ownership, or the
absence of any such change, shall be made by the Corporation.
Written procedures designed to facilitate such determinations
shall be established by the Corporation and refined from time to
time. Such procedures shall provide, among other things, the
manner of proof of facts that will be accepted and the frequency
with which such proof may be required to be renewed. The
Corporation and any transfer agent shall be entitled to rely on
all information concerning beneficial ownership of a share of
stock coming to their attention from any source and in any manner
reasonably deemed by them to be reliable, but neither the
Corporation nor any transfer agent shall be charged with any
other knowledge concerning the beneficial ownership of a share of
stock.
(5) Each share of Common Stock acquired by reason of
any stock split or dividend shall be deemed to have been
beneficially owned by the same person continuously from the same
date as that on which beneficial ownership of the share of Common
Stock, with respect to which such share of Common Stock was
distributed, was acquired.
(6) Each share of Common Stock acquired upon
conversion of the outstanding Series A and H Preferred Stock of
the Corporation ("Convertible Stock") shall be deemed to have
been beneficially owned by the same person continuously from the
date on which such person acquired the Convertible Stock
converted into such share of Common Stock.
(7) Where a holder beneficially owns shares having ten
votes per share and shares having one vote per share, and
transfers beneficial ownership of less than all of the shares
held, the shares transferred shall be deemed to consist, in the
absence of evidence to the contrary, of the shares having one
vote per share.
(8) Shares of Common Stock held by the Corporation's
employee benefit plans will be deemed to be beneficially owned by
such plans regardless of how such shares are allocated to or
voted by participants, until the shares are actually distributed
to participants.
(9) Each share of Common Stock, whether at any
particular time the holder thereof is entitled to exercise ten
votes or one, shall be identical to all other shares of Common
Stock in all other respects.
(10) Each share of Voting Preferred Stock, whether at
any particular time the holder thereof is entitled to exercise
ten votes or one, shall be identical in all other respects to all
other shares of Voting Preferred Stock in the same designated
series.
(11) Each share of Common Stock issued by the
Corporation in a business combination transaction shall be deemed
to have been beneficially owned by the person who received such
share in the transaction continuously for the shortest period, as
determined in good faith by the Board of Directors, that would be
permitted for the transaction to be accounted for as a pooling of
interests, provided that the Audit Committee of the Board of
Directors has made a good faith determination that (a) such
transaction has a bona fide business purpose, (b) it is in the
best interests of the Corporation and its shareholders that such
transaction be accounted for as a pooling of interests under
generally accepted accounting principals and (c) such issuance of
Common Stock does not have the effect of nullifying or materially
restricting or disparately reducing the per share voting rights
of holders of an outstanding class or classes of voting stock of
the Corporation. Notwithstanding the foregoing, (i) the
Corporation shall not issue shares in a business combination
transaction if such issuance would result in a violation of any
rule or regulation regarding the per share voting rights of
publicly-traded securities that is promulgated by the Securities
and Exchange Commission or the principal exchange upon which the
Common Stock is then listed for trading and (ii) nothing herein
shall be interpreted to require the Corporation to account for
any business combination transaction in any particular manner.
D. Non-Assessability; Transfers; Pre-emptive Rights. The
stock of this Corporation shall be fully paid and non-assessable
when issued and shall be personal property. No transfer of such
stock shall be binding upon this Corporation unless such transfer
is made in accordance with these Articles and the by-laws of this
Corporation and duly recorded in the books thereof. No
stockholder shall have any pre-emptive right to subscribe to any
or all additions to the stock of this Corporation.
[The remainder of Article III, which sets forth the terms
and conditions of the Company's Series A, H, K and AA Preferred
Stock, has been intentionally omitted.]
ARTICLE IV
Directors
A. Number of Directors. The number of directors
comprising the Board of Directors of this Corporation (exclusive
of directors who may be elected by the holders of any one or more
series of Preferred Stock voting separately) shall be 14 unless
otherwise determined from time to time by resolution adopted by
the affirmative votes of both (i) 80% of the directors then in
office and (ii) a majority of the Continuing Directors (as
defined in Article V(C)), voting as a separate group, provided,
however, that no decrease in the number of directors shall
shorten the term of any incumbent director.
B. Classification. The Board of Directors, other than
those who may be elected by the holders of any one or more series
of Preferred Stock voting separately, shall be divided, with
respect to the time during which they shall hold office, into
three classes, designated Class I, II and III, as nearly equal in
number as possible. Any increase or decrease in the number of
directors shall be apportioned by the Board of Directors so that
all classes of directors shall be as nearly equal in number as
possible. At each annual meeting of shareholders, directors
chosen to succeed those whose terms then expire shall be elected
to hold office for a term expiring at the annual meeting of
shareholders held in the third year following the year of their
election and until their successors are duly elected and
qualified.
C. Vacancies. Except as provided in Article IV(G) hereof,
any vacancy on the Board (including any vacancy resulting from an
increase in the authorized number of directors or from a failure
of the shareholders to elect the full number of authorized
directors) may, notwithstanding any resulting absence of a quorum
of directors, be filled only by the Board of Directors, acting by
vote of both (i) a majority of the directors then in office and
(ii) a majority of all the Continuing Directors, voting as a
separate group, and any director so appointed shall serve until
the next shareholders' meeting held for the election of directors
of the class to which he shall have been appointed and until his
successor is duly elected and qualified.
D. Removal. Subject to Article IV(G) hereof and
notwithstanding any other provisions of these Articles or the
Bylaws of this Corporation, any director or the entire Board of
Directors may be removed at any time, but only for cause, by the
affirmative vote at a meeting of shareholders called for such
purpose of the holders of both (i) a majority of the Total Voting
Power (as defined in Article V(C) hereof) entitled to be cast by
the holders of Voting Stock (as defined in Article V(C) hereof),
voting together as a single class, and (ii) a majority of the
Total Voting Power entitled to be cast by the Independent
Shareholders (as defined in Article V(C)), voting as a separate
group. At the same meeting in which the shareholders remove one
or more directors, a successor or successors may be elected for
the unexpired term of the director or directors removed. Except
as set forth in this Article, directors shall not be subject to
removal.
E. Tender Offers and Other Extraordinary Transactions. In
connection with the exercise of its judgment in determining what
is in the best interest of the Corporation and its stockholders
when evaluating a Business Combination or a tender or exchange
offer or a proposal by another Person or Persons to make a tender
or exchange offer, the Board of Directors of the Corporation
shall consider, in addition to the adequacy of the amount to be
paid in connection with any such transaction, all of the
following factors and any other factors which it deems relevant:
(i) the social and economic effects of the transaction on the
Corporation and its subsidiaries, and their respective employees,
customers, creditors and other elements of the communities in
which they operate or are located, (ii) the business and
financial condition and earnings prospects of the acquiring
Person or Persons, including, but not limited to, debt service
and other existing or likely financial obligations of the
acquiring Person or Persons, and the possible effect of such
conditions upon the Corporation and its Subsidiaries and the
other elements of the communities in which the Corporation and
its subsidiaries operate or are located, and (iii) the
competence, experience and integrity of the acquiring Person or
Persons and its or their management.
F. Board Qualifications. (1) Except as otherwise
provided in Article IV(G) hereof, no person shall be eligible for
nomination, election or service as a director of the Corporation
who shall:
(a) in the opinion of the Board of Directors fail
to respond satisfactorily to the Corporation respecting any
inquiry of the Corporation for information to enable the
Corporation to make any certification required by the
Federal Communications Commission under the Anti-Drug Abuse
Act of 1988 or to determine the eligibility of such person
under this Article;
(b) have been arrested or convicted of any
offense concerning the distribution or possession of, or
trafficking in, drugs or other controlled substances,
provided that in the case of an arrest the Board of
Directors may in its discretion determine that
notwithstanding such arrest such persons shall remain
eligible under this Article; or
(c) have engaged in actions that could lead to
such an arrest or conviction and that the Board of Directors
determines would make it unwise for such person to serve as
a director of the Corporation.
(2) Any person serving as a director of the
Corporation shall automatically cease to be a director on such
date as he ceases to have the qualifications set forth in
paragraph (1) above, and his position shall be considered vacant
within the meaning of Article IV(C) hereof.
G. Directors Elected by Preferred Shareholders.
Notwithstanding anything in these Articles of Incorporation to
the contrary, whenever the holders of any one or more series of
Preferred Stock shall have the right, voting separately as a
class, to elect one or more directors of the Corporation, the
provisions of these Articles of Incorporation (as they may be
duly amended from time to time) fixing the rights and preferences
of such Preferred Stock shall govern with respect to the
nomination, election, term, removal, vacancies or other related
matters with respect to such directors.
ARTICLE V
Certain Business Combinations
A. Supermajority Vote. In addition to any affirmative
vote otherwise required by law or these Articles of Incorporation
(notwithstanding the fact that a lesser percentage may be
specified by law or these Articles of Incorporation) and except
as otherwise expressly provided in Article V(B):
(1) any merger, consolidation or share exchange of the
Corporation or any Subsidiary with an Interested Shareholder
or with any other corporation, whether or not itself an
Interested Shareholder, which is, or after such merger,
consolidation or share exchange would be, an Affiliate or
Associate of an Interested Shareholder who was an Interested
Shareholder prior to the transaction;
(2) any sale, lease, transfer, exchange, mortgage,
pledge, loan, advance, or other similar disposition (in one
or more series of transactions), with or for the direct or
indirect benefit of any Interested Shareholder or any
Affiliate or Associate thereof, of any assets of the
Corporation or any Subsidiary having, measured at the time
the transaction or transactions are approved by the Board of
Directors, an aggregate book value or Market Value as of the
end of the Corporation's most recently ended fiscal quarter
of $1 million or more;
(3) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation or any
Subsidiary;
(4) the issuance or transfer by the Corporation or any
Subsidiary, in one transaction or in a series of
transactions in any twelve-month period, of any Equity
Securities of the Corporation or any Subsidiary that have an
aggregate Market Value of $1 million or more to any
Interested Shareholder or any Affiliate or Associate
thereof, except pursuant to the exercise of warrants or
rights to purchase securities offered pro rata to all
holders of the Corporation's Voting Stock or by any other
method affording substantially proportionate treatment to
the holders of Voting Stock;
(5) any reclassification or recapitalization of
securities of the Corporation, including any reverse stock
split, any merger, consolidation or share exchange of the
Corporation with any Subsidiary, or any other transaction
(whether or not involving an Interested Shareholder) that
has the effect, directly or indirectly, in one transaction
or a series of transactions, of increasing the voting power
(regardless of when exercisable) or the proportionate amount
of the outstanding shares of any class or series of Equity
Securities of the Corporation or any Subsidiary directly or
indirectly beneficially owned by any Interested Shareholder
or any Affiliate or Associate thereof;
(6) any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax
advantages provided by the Corporation or any Subsidiary to
an Interested Shareholder or any Affiliate or Associate
thereof, except proportionately as a shareholder; or
(7) any agreement, contract or other arrangement
providing directly or indirectly for any of the foregoing;
shall require (i) the approval by a majority of both the
directors then in office and a majority of the Continuing
Directors, voting as a separate group, and (ii) the affirmative
vote of both 80% of the Total Voting Power entitled to be cast by
the holders of Voting Stock, voting together as a single class,
and two-thirds of the Total Voting Power entitled to be cast by
the Independent Shareholders present or duly represented at a
meeting, voting together as a separate class. In addition, a
proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder shall be
mailed to all shareholders of the Corporation at least 30 days
prior to the consummation of such Business Combination
(regardless of whether such proxy or information statement is
required pursuant to such act).
B. Exceptions to Supermajority Vote Requirements. If all
conditions specified in either of paragraphs 1 or 2 below are
met, the provisions of Article V(A) shall not be applicable to
any Business Combination, and such Business Combination shall
require only the affirmative vote of two-thirds of the Total
Voting Power entitled to be cast by the holders of Voting Stock
present or duly represented at a shareholders' meeting called for
such purpose and such other votes as may be required by law, any
other provisions or these Articles of Incorporation or the
Bylaws, and shall further require only the delivery of such proxy
or information statements, if any, as may be required by law:
(1) The Business Combination shall have been approved
prior to the time such Interested Shareholder became an
Interested Shareholder by a majority of the directors then
in office and a majority of the Continuing Directors, voting
as a separate group; or
(2) All of the following five conditions have been
met:
(a) The aggregate amount of the cash and the
Market Value as of the Valuation Date of consideration
other than cash to be received per share by holders of
Common Stock in such Business Combination is at least
equal to the highest of the following:
1. the highest per share price, including
any brokerage commissions, transfer taxes and
soliciting dealer's fees, paid by the Interested
Shareholder for any shares of Common Stock
acquired by it within the two-year period
immediately prior to the Announcement Date or in
the transaction in which it became an Interested
Shareholder, whichever is higher;
2. the Market Value per share of Common
Stock on the Announcement Date or on the
Determination Date, whichever is higher; or
3. the price per share equal to the Market
Value per share of Common Stock determined
pursuant to clause (2) immediately preceding,
multiplied by a fraction, the numerator of which
is the highest per share price, including any
brokerage commissions, transfer taxes and
soliciting dealers' fees, paid by the Interested
Shareholder for any shares of Common Stock
acquired by it within the two-year period
immediately prior to the Announcement Date, and
the denominator of which is the Market Value per
share of Common Stock on the first date in such
two-year period on which the Interested
Shareholder acquired any shares of Common Stock.
(b) The aggregate amount of the cash and the
Market Value as of the Valuation Date of consideration
other than cash to be received per share by holders of
shares of any class or series of outstanding stock
other than Common Stock is at least equal to the
highest of the following, whether or not the Interested
Shareholder has previously acquired any shares of any
such class or series of stock:
1. the highest per share price, including
any brokerage commissions, transfer taxes and
soliciting dealers' fees, paid by the Interested
Shareholder for any shares of such class or series
of stock acquired by it within the two-year period
immediately prior to the Announcement Date or in
the transaction in which it became an Interested
Shareholder, whichever is higher;
2. the highest preferential amount per
share to which the holders of shares of such class
or series of stock are entitled in the event of
any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
3. the Market Value per share of such class
or series of stock on the Announcement Date or on
the Determination Date, whichever is higher; or
4. the price per share equal to the Market
Value per share of such class or series of stock,
determined pursuant to clause (3) immediately
preceding, multiplied by a fraction, the numerator
of which is the highest per share price, including
any brokerage commissions, transfer taxes and
soliciting dealers' fees, paid by the Interested
Shareholder for any shares of any such class or
series of Voting Stock acquired by it within the
two-year period immediately prior to the
Announcement Date, and the denominator of which is
the Market Value per share of the same class or
series of voting stock on the first day in such
two-year period on which the Interested
Shareholder acquired any shares or the same class
or series of Voting Stock.
(c) The consideration to be received by holders
of any class or series of outstanding stock is to be in
cash or in the same form as the Interested Shareholder
has previously paid for shares of the same class or
series of stock. If the Interested Shareholder has
paid for shares of any class of stock with varying
forms of consideration, the form of consideration for
such class of stock shall be either in cash or the form
used to acquire the largest number of shares of such
class or series of stock previously acquired by it. In
making any price calculation under paragraph 2 of this
Article V(B), appropriate adjustments shall be made to
reflect any reclassification or stock split (including
any reverse stock split), stock dividend,
recapitalization, reorganization or any similar
transaction which has the effect or increasing or
reducing the number of outstanding shares of stock.
(d) After the Interested Shareholder has become
an Interested Shareholder and prior to the consummation
of such Business Combination:
1. there shall have been no failure to
declare and pay at the regular date therefor any
full periodic dividends, whether or not
cumulative, on any outstanding Preferred Stock of
the Corporation or other capital stock entitled to
a preference over the Common Stock as to dividends
or upon liquidation;
2. there shall have been no reduction in
the annual rate of dividends paid on the Common
Stock, except as necessary to reflect any
subdivision of the Common Stock, and no failure to
increase the annual rate of dividends as necessary
to reflect any reclassification (including any
reverse stock split), recapitalization,
reorganization or other similar transaction which
has the effect of reducing the number of
outstanding shares of Common Stock; and
3. the Interested Shareholder did not
become the Beneficial Owner of any additional
shares of stock of the Corporation except as part
of the transaction which resulted in such
Interested Shareholder becoming an Interested
Shareholder or by virtue of proportionate stock
splits or stock dividends.
The provisions of clauses (1) and (2) immediately
preceding shall not apply if no Interested Shareholder
or any Affiliate or Associate thereof voted as a
director of the Corporation in favor of foregoing or
reducing dividends in the manner specified in such
clauses and the Interested Shareholder, within ten days
after any such act or failure to act that resulted in
such loss or diminution of dividends, notifies the
Board of Directors of the Corporation in writing that
the Interested Shareholder disapproves thereof and
requests in good faith that the Board of Directors
rectify such act or failure to act.
(e) After the Interested Shareholder has become
an Interested Shareholder, the Interested Shareholder
shall not have received the benefit, directly or
indirectly, except proportionately as a shareholder, of
any loans, advances, guarantees, pledges or other
financial assistance provided by the Corporation or any
Subsidiary, whether in anticipation of or in connection
with such Business Combination or otherwise.
C. Definitions. For purposes of these Articles of
Incorporation or the Bylaws of this Corporation:
(1) "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations promulgated under the
Exchange Act (the term "registrant" in such Rule 12b-2
meaning in this case the Corporation), provided, however,
that in no event shall the Corporation, any of its
Subsidiaries, any employee benefit plan or any of the other
persons or entities exempted from the definition of
Interested Shareholder in Article V(C) hereof be deemed to
be an Affiliate or Associate of any Interested Shareholder.
(2) "Announcement Date" means the first general public
announcement of the proposal or intention to make a proposal
to consummate a Business Combination or its first
communication generally to shareholders of the Corporation,
whichever is earlier.
(3) A person shall be deemed to be the "Beneficial
Owner" of any shares of capital stock (regardless whether
owned of record):
(a) Which that person or any of its Affiliates or
Associates, directly or indirectly, owns beneficially;
or
(b) Which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether
exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding; or
(c) Which are beneficially owned, directly or
indirectly, by any other person with which such person
or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any
shares of voting capital stock of the Corporation or
any Subsidiaries.
(4) "Business Combination" means any transaction
referred to in any one or more of the clauses (1) through
(7) of Article V(A).
(5) "Capital Stock" means any Common Stock, Preferred
Stock or other shares of capital stock of the Corporation,
or any bonds, debentures, or other obligations granted
voting rights by the Corporation pursuant to La. R.S.
12:75H.
(6) "Continuing Director" means any member of the
Board of Directors who is not an Interested Shareholder or
an Affiliate or Associate thereof, and who was a director of
the Corporation prior to the time the Interested Shareholder
became an Interested Shareholder, and any other member of
the Board of Directors who is not an Interested Shareholder
or an Affiliate or Associate thereof, and was recommended or
elected by a majority of the Continuing Directors at a
meeting at which a quorum consisting of a majority of the
Continuing Directors was present, provided that, in the
absence of an Interested Shareholder, any reference to
"Continuing Directors" shall mean all the directors then in
office.
(7) "Determination Date" means the date on which an
Interested Shareholder first became an Interested
Shareholder.
(8) "Employee Benefit Plan" means any option, bonus,
profit sharing, employee stock ownership, dividend
reinvestment, savings or similar plan of the Corporation or
any Subsidiary, or any trust related thereto.
(9) "Equity Security" means (a) any stock or similar
security, certificate of interest, or participation in any
profit-sharing agreement, voting trust certificate, or
certificate of deposit for the foregoing, (b) any security
convertible, with or without consideration, into an equity
security, or any warrant or other security carrying any
right to subscribe to or purchase an equity security, or (c)
any put, call, straddle, or other option, right or privilege
to acquire an equity security from or to sell an equity
security to another without being bound to do so.
(10) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(11) "Independent Shareholder" means a holder of Voting
Stock who is not an Interested Shareholder or an Affiliate
or Associate thereof.
(12) "Interested Shareholder" means any person (other
than the Corporation, any Subsidiary, any Employee Benefit
Plan, any fiduciary with respect to an Employee Benefit Plan
acting in such capacity, or any Affiliate or Associate of
any of the foregoing) who (a) is the Beneficial Owner,
directly or indirectly, of shares of capital stock
(including two or more classes or series voting together as
a single class) representing 10% or more of the outstanding
Total Voting Power entitled to vote for the election of
directors, or (b) is an Affiliate or Associate of the
Corporation and at any time within the two-year period
immediately prior to the date in question was the Beneficial
Owner, directly or indirectly, of shares of capital stock
(including two or more classes or series voting together as
a single class) representing 10% or more of the outstanding
Total Voting Power entitled to vote for the election of
directors. For the purpose of determining whether a person
is an Interested Shareholder, the number of shares of Voting
Stock deemed to be outstanding shall include shares deemed
owned by the person through application of paragraph 3 of
Article V(C) but shall not include any other shares of
Voting Stock that may be issuable pursuant to any agreement,
arrangement, or understanding or upon exercise of conversion
rights, warrants or options, or otherwise.
(13) "Market Value" means:
(a) in the case of stock, the highest closing
sale price during the 30 calendar day period
immediately preceding the date in question of a share
of such stock on the Composite Tape for New York Stock
Exchange listed stocks, or, if such stock is not quoted
on such Composite Tape, on the New York Stock Exchange,
or if such stock is not listed on such exchange, on the
principal United States securities exchange registered
under the Exchange Act on which such stock is listed,
or, if such stock is not listed on any such exchange,
the highest closing sales price during the 30 calendar
day period immediately preceding the date in question
as reported by the National Association of Securities
Dealers, Inc. for securities traded on the National
Market System of the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ"),
or, if such stock is not traded in such system, the
closing bid quotation with respect to a share of such
stock during the 30 calendar day period preceding the
date in question on NASDAQ, or any similar system then
in use, or if no such quotation is available, the fair
market value on the date in question of a share of such
stock as determined by a majority of the Continuing
Directors at a meeting of the Board of Directors at
which a quorum consisting of at least a majority of the
then Continuing Directors is present; and
(b) in the case of property other than cash or
stock, the fair market value or such property on the
date in question as determined by a majority of the
Continuing Directors at a meeting of the Board of
Directors at which a quorum consisting of at least a
majority of the then Continuing Directors is present.
(14) A "person" means any individual, firm, corporation
or other entity, or a group of persons acting or agreeing to
act together in the manner set forth in Rule 13d-5 under the
Securities Exchange Act of 1934.
(15) "Subsidiary" means any corporation of which voting
stock having a majority of the votes entitled to be cast
generally in the election of directors is owned, directly or
indirectly, by the Corporation.
(16) "Total Voting Power," when used in reference to
any particular matter properly brought before the
shareholders for their consideration and vote, means the
total number of votes that holders of Capital Stock are
entitled to cast with respect to such matter.
(17) "Valuation Date" means:
(a) for a Business Combination voted upon by
shareholders, the later of the day prior to the date of
the shareholders' vote or the date 20 business days
prior to the consummation of the Business Combination;
and
(b) for a Business Combination not voted upon by
shareholders, the date of the consummation of the
Business Combination.
(18) "Voting Stock" means shares of Capital Stock
entitled to vote generally in an election of directors.
D. Determinations. For the purpose of this Article V, so
long as Continuing Directors constitute at least a majority of
the entire Board of Directors, the Board of Directors shall have
the power to make a good faith determination, on the basis of
information known to them, of: (1) the number of shares of
capital stock of which any person or entity is the Beneficial
Owner, (2) whether any person or entity is an Interested
Shareholder or an Affiliate or Associate thereof, (3) whether any
person or entity has an agreement, arrangement or understanding
with another as to the matters referred to in the definition of
Beneficial Owner herein, (4) whether any transaction constitutes
a Business Combination (including the power to determine in good
faith the book value or Market Value of the assets of the
Corporation or any Subsidiary) or is a transaction with or for
the benefit of an Interested Shareholder, (5) whether any of the
events referred to in subsection (B)(2)(d) of this Article V have
occurred, and (6) such other matters with respect to which a
determination is required under this Article V. All such good
faith determinations by the Board of Directors shall be
conclusive and binding for all purposes of this Article V.
E. Benefit of Statute. This Corporation claims and shall
have the benefits of La.R.S. 12:132-134, provided, however, that
the provisions of La.R.S. 12:132-134 shall not apply to any
"business combination" (as defined in La. R.S. 12:132(4))
involving any Employee Benefit Plan (as defined in Article V(C))
or any fiduciary with respect to any such plan acting in such
capacity.
ARTICLE VI
Shareholders' Meetings
A. Written Consents. Any action required or permitted to
be taken at any annual or special meeting of shareholders may be
taken only upon the vote of the shareholders, present in person
or represented by duly authorized proxy, at an annual or special
meeting duly noticed and called, as provided in the Bylaws of the
Corporation, and may not be taken by a written consent of the
shareholders pursuant to the Business Corporation Law of the
State of Louisiana.
B. Special Meetings. Subject to the terms of any
outstanding class or series of Preferred Stock that entitles the
holders thereof to call special meetings, a majority of the Total
Voting Power of the Corporation shall be required to cause the
Secretary of the Corporation to call a special meeting of
shareholders pursuant to La. R.S. 12:73B (or any successor
provision). Nothing in this Article VI shall limit the power of
the President of the Corporation or its Board of Directors to
call a special meeting of shareholders.
C. Notice of Shareholder Nominations and Shareholder
Business. (1) At any meeting of the shareholders, only such
business shall be conducted as shall have been properly brought
before the meeting. Except as otherwise provided in Article
IV(G), nominations for the election of directors at a meeting at
which directors are to be elected may be made by or at the
direction of the Board of Directors, or a committee duly
appointed thereby, or by any shareholder of record entitled to
vote generally for the election of directors who complies with
the procedures set forth below. Other matters to be properly
brought before a meeting of the shareholders must be (a)
specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors, including
matters covered by Rule 14a-8 of the Securities and Exchange
Commission, (b) otherwise properly brought before the meeting by
or at the direction of the Board of Directors, or (c) otherwise
properly brought before the meeting by any shareholder of record
entitled to vote at such meeting who complies with the procedures
set forth below.
(2) A notice of the intent of a shareholder to make a
nomination or to bring any other matter before the meeting shall
be made in writing and received by the Secretary of the
Corporation not more than 120 days and not less than 60 days in
advance of the first anniversary of the preceding year's annual
meeting of shareholders or, in the event of a special meeting of
shareholders or an annual meeting scheduled to be held either 30
days earlier or later than such anniversary date, such notice
shall be received by the Secretary of the Corporation within 15
days of the earlier of the date on which notice of such meeting
is first mailed to shareholders or public disclosure of the
meeting date is made.
(3) Every such notice by a shareholder shall set
forth:
(a) the name, age, business address and
residential address of the shareholder of record who intends
to make a nomination or bring up any other matter, and any
person acting in concert with such shareholder;
(b) a representation that the shareholder is a
holder of record of shares of the Corporation's capital
stock that accord such shareholder the voting rights
specified in paragraph (1) above and that the shareholder
intends to appear in person at the meeting to make the
nomination or bring up the matter specified in the notice;
(c) with respect to notice of an intent to make a
nomination, a description of all agreements, arrangements or
understandings among the shareholder, any person acting in
concert with the shareholder, each proposed nominee and any
other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be
made by the shareholder;
(d) with respect to notice of an intent to make a
nomination, (i) the name, age, business address and
residential address of each person proposed for nomination,
(ii) the principal occupation or employment of such person,
(iii) the class and number of shares of capital stock of the
Corporation of which such person is the beneficial owner,
and (iv) any other information relating to such person that
would be required to be disclosed in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange
Commission had such nominee been nominated by the Board of
Directors; and
(e) with respect to notice of an intent to bring
up any other matter, a complete and accurate description of
the matter, the reasons for conducting such business at the
meeting, and any material interest of the shareholder in the
matter.
(4) Notice of an intent to make a nomination shall be
accompanied by the written consent of each nominee to serve as a
director of the Corporation if so elected and an affidavit of
each such nominee certifying that he meets the qualifications
specified in Article IV(F). The Corporation may require any
proposed nominee to furnish such other information as may be
reasonably required by the Corporation to determine the
eligibility and qualifications of such person to serve as a
director.
(5) With respect to any proposal by a shareholder to
bring before a meeting any matter other than the nomination of
directors, the following shall govern:
(a) Only the first ten proposals of which the
Secretary of the Corporation receives sufficient notice
shall be properly brought before the meeting.
(b) If the Secretary of the Corporation has
received sufficient notice of a proposal that may properly
be brought before the meeting, a proposal sufficient notice
of which is subsequently received by the Secretary and that
is substantially duplicative of the first proposal shall not
be properly brought before the meeting. If in the judgment
of the Board of Directors a proposal deals with
substantially the same subject matter as a prior proposal
submitted to shareholders at a meeting held within the
preceding five years, it shall not be properly brought
before any meeting held within three years after the latest
such previous submission if (i) the proposal was submitted
at only one meeting during such preceding period and it
received affirmative votes representing less than 3% of the
total number of votes cast in regard thereto, (ii) the
proposal was submitted at only two meetings during such
preceding period and it received at the time of its second
submission affirmative votes representing less than 6% of
the total number of votes cast in regard thereto, or (iii)
the proposal was submitted at three or more meetings during
such preceding period and it received at the time of its
latest submission affirmative votes representing less than
10% of the total number of votes cast in regard thereto.
(c) Notwithstanding compliance with all of the
procedures set forth above in this Article, no proposal
shall be deemed to be properly brought before a meeting of
shareholders if, in the judgment of the Board, it is not a
proper subject for action by shareholders under Louisiana
law.
(6) At the meeting of shareholders, the chairman shall
declare out of order and disregard any nomination or other matter
not presented in accordance with the foregoing procedures or
which is otherwise contrary to the foregoing terms and
conditions.
(7) Nothing in this Article shall be deemed to affect
any rights of shareholders to request inclusion of proposals in
the Corporation's proxy statement or to solicit their own proxies
pursuant to the proxy rules of the Securities and Exchange
Commission.
ARTICLE VII
Limitation of Liability and Indemnification
A. Limitation of Liability. No director or officer of the
Corporation shall be liable to the Corporation or to its
shareholders for monetary damages for breach of his fiduciary
duty as a director or officer, provided that the foregoing
provision shall not eliminate or limit the liability of a
director or officer for (1) any breach of his duty of loyalty to
the Corporation or its shareholders; (2) acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law; (3) liability for unlawful distributions of the
Corporation's assets to, or redemptions or repurchases of the
Corporation's shares from, shareholders of the Corporation, under
and to the extent provided in La. R.S. 12:92D; or (4) any
transaction from which he derived an improper personal benefit.
B. Authorization of Further Actions. The Board of
Directors may (1) cause the Corporation to enter into contracts
with its directors and officers providing for the limitation of
liability set forth in this Article to the fullest extent
permitted by law, (2) adopt By-laws or resolutions, or cause the
Corporation to enter into contracts, providing for
indemnification of directors and officers of the Corporation and
other persons (including but not limited to directors and
officers of the Corporation's direct and indirect Subsidiaries)
to the fullest extent permitted by law and (3) cause the
Corporation to exercise the insurance powers set forth in La.
R.S. 12:83F, notwithstanding that some or all of the members of
the Board of Directors acting with respect to the foregoing may
be parties to such contracts or beneficiaries of such By-laws or
resolutions or the exercise of such powers. No repeal or
amendment of any such By-laws or resolutions limiting the right
to indemnification thereunder shall affect the entitlement of any
person to indemnification whose claim thereto results from
conduct occurring prior to the date of such repeal or amendment.
C. Subsidiaries. The Board of Directors may cause the
Corporation to approve for the officers and directors of its
direct and indirect Subsidiaries limitation of liability,
indemnification and insurance provisions comparable to the
foregoing.
D. Amendment of Article. Notwithstanding any other
provisions of these Articles of Incorporation, the affirmative
vote of the holders of at least 80% of the Total Voting Power
shall be required to amend or repeal this Article VII, and any
amendment or repeal of this Article shall not adversely affect
any elimination or limitation of liability of a director or
officer of the Corporation under this Article with respect to any
action or inaction occurring prior to the time of such amendment
or repeal.
ARTICLE VIII
Reversion
Except for cash, shares or other property or rights payable
or issuable to the holders of Preferred Stock, the rights to
which shall be determined under applicable state law, Cash,
property or share dividends, shares issuable to shareholders in
connection with a reclassification of stock, and the redemption
price of redeemed shares, that are not claimed by the
shareholders entitled thereto within one year after the dividend
or redemption price became payable or the shares became issuable,
despite reasonable efforts by the Corporation to pay the dividend
or redemption price or deliver the certificates for the shares to
such shareholders within such time, shall, at the expiration of
such time, revert in full ownership to the Corporation, and the
Corporation's obligation to pay such dividend or redemption price
or issue such shares, as the case may be, shall thereupon cease,
provided, however, that the Board of Directors may, at any time,
for any reason satisfactory to it, but need not, authorize (i)
payment of the amount of any cash or property dividend or
redemption price or (ii) issuance of any shares, ownership of
which has reverted to the Corporation pursuant to this Article,
to the person or entity who or which would be entitled thereto
had such reversion not occurred.
ARTICLE IX
Amendments
A. Charter Amendments. Articles IV (other than paragraphs
F and G), V, VI(A) and IX of these Articles of Incorporation
shall not be amended in any manner (whether by modification or
repeal of an existing Article or Articles or by addition of a new
Article or Articles) except upon resolutions adopted by the
affirmative vote of both (i) 80% of the Total Voting Power
entitled to be cast by the holders of outstanding shares of
Voting Stock, voting together as a single group, and (ii) two-
thirds of the votes entitled to be cast by the Independent
Shareholders present or duly represented at a shareholders'
meeting, voting as a separate group; provided, however, that if
such resolutions shall first be adopted by both a majority of the
directors then in office and a majority of the Continuing
Directors, voting as a separate group, then such resolutions
shall be deemed adopted by the shareholders upon the affirmative
vote of a majority of the Total Voting Power entitled to be cast
by the holders of outstanding shares of Voting Stock, voting as a
single group.
B. Bylaw Amendments. Bylaws of this Corporation may be
altered, amended, or repealed or new Bylaws may be adopted by:
(1) the shareholders, but only upon the affirmative
vote of both (i) 80% of the Total Voting Power
entitled to be cast by the holders of outstanding
shares of Voting Stock, voting together as a
single group, and (ii) two-thirds of the Total
Voting Power entitled to be cast by the
Independent Shareholders present or duly
represented at a shareholders' meeting, voting as
a separate group; or
(2) the Board of Directors, but only upon the
affirmative vote of both (i) a majority of the
directors then in office and (ii) a majority of
the Continuing Directors, voting as a separate
group.
* * * * * * * *
EXHIBIT B
CENTURY TELEPHONE ENTERPRISES, INC.
1995 INCENTIVE COMPENSATION PLAN
1. Purpose. The purpose of the 1995 Incentive Compensation
Plan (the "Plan") of Century Telephone Enterprises, Inc.
("Century") is to increase shareholder value and to advance the
interests of Century and its subsidiaries (collectively, the
"Company") by furnishing a variety of economic incentives (the
"Incentives") designed to attract, retain and motivate employees,
officers and directors and to strengthen the mutuality of
interests between such employees, officers and directors and
Century's shareholders. Incentives may consist of opportunities
to purchase or receive shares of common stock, $1.00 par value
per share, of Century (the "Common Stock"), on terms determined
under the Plan. As used in the Plan, the term "subsidiary" means
any corporation of which Century owns (directly or indirectly)
within the meaning of Section 425(f) of the Internal Revenue Code
of 1986, as amended (the "Code"), 50% or more of the total
combined voting power of all classes of stock. No Incentives
shall be granted hereunder unless the Plan is first approved by
the shareholders of Century.
2. Administration.
2.1 Composition. The Plan shall be administered by the
compensation committee of the Board of Directors of Century,
or by a subcommittee of the compensation committee. The
committee or subcommittee that administers the Plan shall
hereinafter be referred to as the "Committee". The Committee
shall consist of not fewer than two members of the Board of
Directors, each of whom shall (a) qualify as a "disinterested
person" under Rule 16b-3 under the Securities Exchange Act of
1934 (the "1934 Act"), as currently in effect or any
successor rule, and (b) beginning on the date of Century's
1996 annual meeting of shareholders, qualify as "outside
directors" under Section 162(m) of the Code.
2.2 Authority. The Committee shall have plenary
authority to award Incentives under the Plan, to interpret
the Plan, to establish any rules or regulations relating to
the Plan that it determines to be appropriate, to enter into
agreements with participants as to the terms of the
Incentives (the "Incentive Agreements") and to make any other
determination that it believes necessary or advisable for the
proper administration of the Plan. Its decisions in matters
relating to the Plan shall be final and conclusive on the
Company and participants. The Committee may delegate its
authority hereunder to the extent provided in Section 3
hereof. The Committee shall not have authority to award
Incentives under the Plan to directors in their capacities as
such[, provided, however, that directors of Century who are
not also full-time employees of the Company ("Outside
Directors") may receive awards under the Plan as specifically
provided in Section 11 hereof].
3. Eligible Participants. Key employees of the Company
(including officers and directors who are full-time employees of
the Company, but excluding Outside Directors) shall become
eligible to receive Incentives under the Plan when designated by
the Committee. Employees may be designated individually or by
groups or categories, as the Committee deems appropriate. With
respect to participants not subject to Section 16 of the 1934
Act, the Committee may delegate to appropriate personnel of the
Company its authority to designate participants, to determine the
size and type of Incentive to be received by those participants
and to determine or modify performance objectives for those
participants. Outside Directors may participate in the Plan only
as specifically provided in Section 11 hereof.
4. Types of Incentives. Incentives may be granted under the
Plan to eligible participants in any of the following forms,
either individually or in combination, (a) incentive stock
options and non-qualified stock options; (b) stock appreciation
rights ("SARs") (c) restricted stock; and (d) performance shares.
5. Shares Subject to the Plan.
5.1. Number of Shares. Subject to adjustment as
provided in Section 10.6, a total of 2 million shares of
Common Stock are authorized to be issued under the Plan.
Incentives with respect to no more than 200,000 shares of
Common Stock may be granted through the Plan to a single
participant in one calendar year. No more than 500,000
shares may be issued through the Plan as restricted stock.
In the event that a stock option, SAR or performance share
granted hereunder expires or is terminated or cancelled prior
to exercise or payment, any shares of Common Stock that were
issuable thereunder may again be issued under the Plan. In
the event that shares of Common Stock are issued as
Incentives under the Plan and thereafter are forfeited or
reacquired by the Company pursuant to rights reserved upon
issuance thereof, such forfeited and reacquired shares may
again be issued under the Plan. If an Incentive is to be
paid in cash by its terms, the Committee need not make a
deduction from the shares of Common Stock issuable under the
Plan with respect thereto. If and to the extent that an
Incentive may be paid in cash or shares of Common Stock, the
total number of shares available for issuance hereunder shall
be debited by the number of shares payable under such
Incentive, provided that upon any payment of all or part of
such Incentive in cash, the total number of shares available
for issuance hereunder shall be credited with the appropriate
number of shares represented by the cash payment, as
determined in the sole discretion of the Committee.
Additional rules for determining the number of shares granted
under the Plan may be made by the Committee, as it deems
necessary or appropriate.
5.2. Type of Common Stock. Common Stock issued under
the Plan may be authorized and unissued shares or issued
shares held as treasury shares.
6. Stock Options. A stock option is a right to purchase
shares of Common Stock from Century. Stock options granted under
this Plan may be incentive stock options or non-qualified stock
options. Any option that is designated as a non-qualified stock
option shall not be treated as an incentive stock option. Each
stock option granted by the Committee under this Plan shall be
subject to the following terms and conditions:
6.1. Price. The exercise price per share shall be
determined by the Committee, subject to adjustment under
Section 10.6; provided that in no event shall the exercise
price be less than the Fair Market Value of a share of Common
Stock on the date of grant.
6.2. Number. The number of shares of Common Stock
subject to the option shall be determined by the Committee,
subject to Section 5.1 and subject to adjustment as provided
in Section 10.6.
6.3. Duration and Time for Exercise. Subject to earlier
termination as provided in Section 10.4, the term of each
stock option shall be determined by the Committee. Subject
to Section 10.12, each stock option shall become exercisable
at such time or times during its term as shall be determined
by the Committee, provided, however, that, except as provided
below, no stock option granted to an officer or director of
Century who is subject to Section 16 of the 1934 Act (an
"Insider") shall be exercisable within the six-month period
immediately following the date of grant. Notwithstanding the
foregoing, the Committee may accelerate the exercisability of
any stock option at any time, except to the extent of any
automatic acceleration of stock options under Section 10.12.
6.4. Repurchase. Upon approval of the Committee, the
Company may repurchase a previously granted stock option from
a participant by mutual agreement before such option has been
exercised by payment to the participant of the amount per
share by which: (i) the Fair Market Value (as defined in
Section 10.13) of the Common Stock subject to the option on
the business day immediately preceding the date of purchase
exceeds (ii) the exercise price.
6.5. Manner of Exercise. A stock option may be exer-
cised, in whole or in part, by giving written notice to the
Company, specifying the number of shares of Common Stock to
be purchased. The exercise notice shall be accompanied by
the full purchase price for such shares. The option price
shall be payable in United States dollars and may be paid by
(a) cash; (b) uncertified or certified check; (c) unless
otherwise determined by the Committee, by delivery of shares
of Common Stock held by the optionee for at least six months,
which shares shall be valued for this purpose at the Fair
Market Value on the business day immediately preceding the
date such option is exercised; (d) by the simultaneous
exercise of options and sale of the shares of Common Stock
acquired upon exercise, pursuant to a brokerage arrangement
that has been approved in advance by the Committee, with the
proceeds from such sale delivered in payment of the exercise
price; or (e) in such other manner as may be authorized from
time to time by the Committee. In the case of delivery of an
uncertified check upon exercise of a stock option, no shares
shall be issued until the check has been paid in full. Prior
to the issuance of shares of Common Stock upon the exercise
of a stock option, a participant shall have no rights as a
shareholder.
6.6. Incentive Stock Options. Notwithstanding anything
in the Plan to the contrary, the following additional
provisions shall apply to the grant of stock options that are
intended to qualify as Incentive Stock Options (as such term
is defined in Section 422 of the Code):
(a) Any Incentive Stock Option agreement authorized
under the Plan shall contain such other provisions as the
Committee shall deem advisable, but shall in all events
be consistent with and contain or be deemed to contain
all provisions required in order to qualify the options
as Incentive Stock Options.
(b) All Incentive Stock Options must be granted
within ten years from the date on which this Plan is
adopted by the Board of Directors.
(c) Unless sooner exercised, all Incentive Stock
Options shall expire no later than ten years after the
date of grant.
(d) No Incentive Stock Options shall be granted to
any participant who, at the time such option is granted,
would own (within the meaning of Section 422 of the Code)
stock possessing more than 10% of the total combined
voting power of all classes of stock of the employer
corporation or of its parent or subsidiary corporation.
(e) The aggregate Fair Market Value (determined with
respect to each Incentive Stock Option as of the time
such Incentive Stock Option is granted) of the Common
Stock with respect to which Incentive Stock Options are
exercisable for the first time by a participant during
any calendar year (under the Plan or any other plan of
Century or any of its subsidiaries) shall not exceed
$100,000. To the extent that such limitation is
exceeded, such options shall not be treated, for federal
income tax purposes, as incentive stock options.
6.7 Equity Maintenance. If a participant exercises an
option during the term of his employment with the Company,
and pays the exercise price (or any portion thereof) through
the surrender of shares of outstanding Common Stock owned by
the participant, the Committee may, in its discretion, grant
to such participant an additional option to purchase the
number of shares of Common Stock equal to the shares of
Common Stock so surrendered by such participant. Any such
additional options granted by the Committee shall be
exercisable at the Fair Market Value of the Common Stock
determined as of the business day immediately preceding the
respective dates such additional options may be granted. As
stated above, such additional options may be granted only in
connection with the exercise of options by the participant
during the term of his active employment with the Company.
The grant of such additional options under this Section 6.7
shall be made upon such other terms and conditions as the
Committee may from time to time determine.
7. Restricted Stock
7.1 Grant of Restricted Stock. The Committee may award
shares of restricted stock to such key employees as the
Committee determines to be eligible pursuant to the terms of
Section 3. An award of restricted stock may be subject to
the attainment of specified performance goals or targets,
restrictions on transfer, forfeitability provisions and such
other terms and conditions as the Committee may determine,
subject to the provisions of the Plan. To the extent
restricted stock is intended to qualify as performance based
compensation under Section 162(m) of the Code, it must meet
the additional requirements imposed thereby.
7.2 The Restricted Period. At the time an award of
restricted stock is made, the Committee shall establish a
period of time during which the transfer of the shares of
restricted stock shall be restricted (the "Restricted
Period"). Each award of restricted stock may have a
different Restricted Period. A Restricted Period of at least
three years is required, except that if vesting of the shares
is subject to the attainment of specified performance goals,
a Restricted Period of one year or more is permitted. In
addition, any participant subject to Section 16 of the 1934
Act shall be prohibited from selling or otherwise
transferring shares of restricted stock for a period of six
months from the grant thereof. The expiration of the
Restricted Period shall also occur as provided under Section
10.4 and under the conditions described in Section 10.12
hereof.
7.3 Escrow. The participant receiving restricted stock
shall enter into an Incentive Agreement with the Company
setting forth the conditions of the grant. Certificates
representing shares of restricted stock shall be registered
in the name of the participant and deposited with the
Company, together with a stock power endorsed in blank by the
participant. Each such certificate shall bear a legend in
substantially the following form:
The transferability of this certificate and the
shares of Common Stock represented by it are subject
to the terms and conditions (including conditions of
forfeiture) contained in the Century Telephone
Enterprises, Inc. 1995 Incentive Compensation Plan
(the "Plan"), and an agreement entered into between
the registered owner and Century Telephone
Enterprises, Inc. thereunder. Copies of the Plan and
the agreement are on file at the principal office of
the Company.
7.4 Dividends on Restricted Stock. Any and all cash and
stock dividends paid with respect to the shares of restricted
stock shall be subject to any restrictions on transfer,
forfeitability provisions or reinvestment requirements as the
Committee may, in its discretion, prescribe in the Incentive
Agreement.
7.5 Forfeiture. In the event of the forfeiture of any
shares of restricted stock under the terms provided in the
Incentive Agreement (including any additional shares of
restricted stock that may result from the reinvestment of
cash and stock dividends, if so provided in the Incentive
Agreement), such forfeited shares shall be surrendered and
the certificates cancelled. The participants shall have the
same rights and privileges, and be subject to the same
forfeiture provisions, with respect to any additional shares
received pursuant to Section 10.6 due to a recapitalization,
merger or other change in capitalization.
7.6 Expiration of Restricted Period. Upon the
expiration or termination of the Restricted Period and the
satisfaction of any other conditions prescribed by the
Committee or at such earlier time as provided for in Section
7.2 and in the Incentive Agreement or an amendment thereto,
the restrictions applicable to the restricted stock shall
lapse and a stock certificate for the number of shares of
restricted stock with respect to which the restrictions have
lapsed shall be delivered, free of all such restrictions and
legends, except any that may be imposed by law, to the
participant or the participant's estate, as the case may be.
7.7 Rights as a Shareholder. Subject to the terms and
conditions of the Plan and subject to any restrictions on the
receipt of dividends that may be imposed in the Incentive
Agreement, each participant receiving restricted stock shall
have all the rights of a shareholder with respect to shares
of stock during any period in which such shares are subject
to forfeiture and restrictions on transfer, including without
limitation, the right to vote such shares.
8. Stock Appreciation Rights. A SAR is a right to receive,
without payment to the Company, a number of shares of Common
Stock, cash or any combination thereof, the amount of which is
determined pursuant to the formula set forth in Section 8.4. A
SAR may be granted (a) with respect to any stock option granted
under the Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Committee (as
to all or any portion of the shares of Common Stock subject to
the stock option), or (b) alone, without reference to any related
stock option. Each SAR granted by the Committee under the Plan
shall be subject to the following terms and conditions:
8.1 Number. Each SAR granted to any participant shall
relate to such number of shares of Common Stock as shall be
determined by the Committee, subject to Section 5.1 and
subject to adjustment as provided in Section 10.6. In the
case of a SAR granted with respect to a stock option, the
number of shares of Common Stock to which the SAR pertains
shall be reduced in the same proportion that the holder of
the option exercises the related stock option.
8.2 Duration and Time for Exercise. Subject to Section
10.12, the term and exercisability of each SAR shall be
determined by the Committee. Unless otherwise provided by
the Committee in the Incentive Agreement, each SAR issued in
connection with a stock option shall become exercisable at
the same time or times, to the same extent and upon the same
conditions as the related stock option. No SAR granted to a
person subject to Section 16 of the 1934 Act may be exercised
during the first six months of its term. Notwithstanding the
foregoing, the Committee may in its discretion accelerate the
exercisability of any SAR at any time, except to the extent
of any automatic acceleration of SARs under Section 10.12.
8.3 Exercise. A SAR may be exercised, in whole or in
part, by giving written notice to the Company, specifying the
number of SARs that the holder wishes to exercise. The
Company shall, within 30 days of receipt of notice of
exercise by the Company, deliver to the exercising holder
certificates for the shares of Common Stock or cash or both,
as determined by the Committee, to which the holder is
entitled pursuant to Section 8.4.
8.4 Payment. Subject to the right of the Committee to
deliver cash in lieu of shares of Common Stock, the number of
shares of Common Stock that shall be issuable upon the
exercise of an SAR shall be determined by dividing:
(a) the number of shares of Common Stock as to which
the SAR is exercised multiplied by the dollar amount of
the appreciation in such shares (for this purpose, the
"appreciation" shall be the amount by which the Fair
Market Value of the shares of Common Stock subject to the
SAR on the Exercise Date exceeds (1) in the case of a SAR
related to a stock option, the purchase price of the
shares of Common Stock under the stock option or (2) in
the case of a SAR granted alone, without reference to a
related stock option, an amount equal to the Fair Market
Value of a share of Common Stock on the date of grant,
which shall be determined by the Committee at the time of
grant, subject to adjustment under Section 10.6); by
(b) the Fair Market Value of a share of Common Stock
on the Exercise Date.
In lieu of issuing shares of Common Stock upon the
exercise of a SAR, the Committee may elect to pay the holder
of the SAR cash equal to the Fair Market Value on the
Exercise Date of any or all of the shares which would
otherwise be issuable. No fractional shares of Common Stock
shall be issued upon the exercise of a SAR; instead, the
holder of a SAR shall be entitled to receive a cash
adjustment equal to the same fraction of the Fair Market
Value of a share of Common Stock on the Exercise Date or to
purchase the portion necessary to make a whole share at its
Fair Market Value on the Exercise Date.
9. Performance Shares. A performance share consists of an
award that may be paid in shares of Common Stock or in cash, as
described below. The award of performance shares shall be
subject to such terms and conditions as the Committee deems
appropriate.
9.1 Performance Objectives. Each performance share
will be subject to performance objectives for Century or one
of its subsidiaries, divisions or departments to be achieved
by the end of a specified period. The number of performance
shares awarded shall be determined by the Committee and may
be subject to such terms and conditions as the Committee
shall determine. If the performance objectives are achieved,
each participant will be paid (a) a number of shares of
Common Stock equal to the number of performance shares
initially granted to that participant; (b) a cash payment
equal to the Fair Market Value of such number of shares of
Common Stock on the date the performance objectives are met
or such other date as may be provided by the Committee or (c)
a combination of shares of Common Stock and cash, as may be
provided by the Committee. If such objectives are not met,
each award of performance shares may provide for lesser
payments in accordance with a pre-established formula set
forth in the Incentive Agreement. To the extent a
performance share is intended to qualify as performance based
compensation under Section 162(m) of the Code, it must meet
the additional requirements imposed thereby.
9.2 Not a Shareholder. The award of performance shares
to a participant shall not create any rights in such partic-
ipant as a shareholder of the Company, until the payment of
shares of Common Stock with respect to an award, at which
time such stock shall be considered issued and outstanding.
9.3 Dividend Equivalent Payments. A performance share
award may be granted by the Committee in conjunction with
dividend equivalent payment rights or other such rights.
Dividend equivalent payments may be made to the participant
at the time of the payment of the dividend or issuance of the
other right or at the end of the specified performance period
or may be deemed to be invested in additional performance
shares at the Fair Market Value of a share of Common Stock on
the date of payment of the dividend or issuance of the right.
10. General.
10.1. Duration. Subject to Section 10.11, the Plan
shall remain in effect until all Incentives granted under the
Plan have either been satisfied by the issuance of shares of
Common Stock or the payment of cash or been terminated under
the terms of the Plan and all restrictions imposed on shares
of Common Stock in connection with their issuance under the
Plan have lapsed.
10.2 Transferability of Incentives. Options, SARs and
performance shares granted under the Plan shall not be
transferable except: (a) by will; (b) by the laws of descent
and distribution; (c) to family members, to a trust for the
benefit of family members or to charitable institutions, if
permitted by the Committee and provided in the Incentive
Agreement, after a determination that the ability to transfer
the Incentive will not result in the grant of the Incentive
being taxable and, with respect to such Incentives to
Insiders, if permitted by Rule 16b-3 under the 1934 Act; or
(d) pursuant to a domestic relations order, as defined by the
Code. Options or SARs may be exercised during the lifetime
of a participant only by the participant or by the
participant's guardian or legal representative. Any
attempted assignment, transfer, pledge, hypothecation or
other disposition of an Incentive, or levy of attachment or
similar process upon the Incentive not specifically permitted
herein, shall be null and void and without effect.
10.3. Non-transferability of Common Stock. Any shares
of Common Stock awarded to an Insider as restricted stock or
in payment of a performance share award must be held for a
period of six months from the date of grant, unless otherwise
permitted to be transferred and still be in compliance with
Rule 16b-3 under the 1934 Act.
10.4. Effect of Termination of Employment or Death. In
the event that a participant ceases to be an employee of the
Company for any reason, including death, disability, early
retirement or normal retirement, any Incentives may be
exercised, shall vest or shall expire at such times as may be
determined by the Committee in the Incentive Agreement.
10.5. Additional Condition. Anything in this Plan to
the contrary notwithstanding: (a) the Company may, if it
shall determine it necessary or desirable for any reason, at
the time of award of any Incentive or the issuance of any
shares of Common Stock pursuant to any Incentive, require the
recipient of the Incentive, as a condition to the receipt
thereof or to the receipt of shares of Common Stock issued
pursuant thereto, to deliver to the Company a written
representation of present intention to acquire the Incentive
or the shares of Common Stock issued pursuant thereto for his
own account for investment and not for distribution; and (b)
if at any time the Company further determines, in its sole
discretion, that the listing, registration or qualification
(or any updating of any such document) of any Incentive or
the shares of Common Stock issuable pursuant thereto is
necessary on any securities exchange or under any federal or
state securities or blue sky law, or that the consent or
approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with the award
of any Incentive, the issuance of shares of Common Stock
pursuant thereto, or the removal of any restrictions imposed
on such shares, such Incentive shall not be awarded or such
shares of Common Stock shall not be issued or such restric-
tions shall not be removed, as the case may be, in whole or
in part, unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free
of any conditions not acceptable to the Company.
10.6. Adjustment. In the event of any recapitalization,
stock dividend, stock split, combination of shares or other
change in the Common Stock, the number of shares of Common
Stock then subject to the Plan, including shares subject to
outstanding Incentives, shall be adjusted in proportion to
the change in outstanding shares of Common Stock. In the
event of any such adjustments, the purchase price of any
option, the performance objectives of any Incentive, and the
shares of Common Stock issuable pursuant to any Incentive
shall be adjusted as and to the extent appropriate, in the
reasonable discretion of the Committee, to provide partici-
pants with the same relative rights before and after such
adjustment.
10.7. Incentive Agreements. The terms of each Incentive
shall be stated in an agreement approved by the Committee.
The Committee may also determine to enter into agreements
with holders of options to reclassify or convert certain
outstanding options, within the terms of the Plan, as
Incentive Stock Options or as non-qualified stock options.
10.8. Withholding. The Company shall have the right to
withhold from any payments made under the Plan or to collect
as a condition of payment, any taxes required by law to be
withheld.
10.9. No Continued Employment. No participant under the
Plan shall have any right, because of his or her par-
ticipation, to continue in the employ of the Company for any
period of time or to any right to continue his or her present
or any other rate of compensation.
10.10. Deferral Permitted. Payment of cash or distribu-
tion of any shares of Common Stock to which a participant is
entitled under any Incentive shall be made as provided in the
Incentive Agreement. Payment may be deferred at the option
of the participant if provided in the Incentive Agreement.
10.11. Amendment of the Plan. The Board may amend or
discontinue the Plan at any time; provided, however, that
Section 11 of the Plan may not be amended more than once
every six months other than to comport with changes in the
Code, the Employee Retirement Income Security Act or the
rules thereunder. In addition, no amendment or
discontinuance shall, subject to adjustments permitted under
Section 10.6, change or impair, without the consent of the
recipient, an Incentive previously granted, except that the
Company retains the right to (a) convert any outstanding
Incentive Stock Option to a non-qualified stock option, or
(b) require the forfeiture of an Incentive if a participant's
employment is terminated for cause, and (c) exercise all
rights under Section 10.12.
10.12 Change of Control. Notwithstanding anything to
the contrary in the Plan or any related Incentive Agreement,
if (i) Century shall not be the surviving entity in any
merger, consolidation or other reorganization (or survives
only as a subsidiary of an entity other than a previously
wholly-owned subsidiary of the Company), (ii) the Company
sells, leases or exchanges all or substantially all of its
assets to any other person or entity (other than a wholly-
owned subsidiary of the Company), (iii) Century is to be
dissolved or liquidated, (iv) any person or entity, including
a "group" as contemplated by section 13(d)(3) of the 1934
Act, other than an employee benefit plan of the Company or a
related trust, acquires or gains ownership or control
(including, without limitation, power to vote) of more than
30% of the outstanding shares of Century's voting stock, or
(v) as a result of or in connection with a contested election
of directors, the persons who were directors of Century
before such election shall cease to constitute a majority of
the Board of Directors of Century (each such event is
referred to herein as a "Corporate Change"), then upon the
approval by the Board of Directors of Century of any
Corporate Change of the type described in clause (i) to (iii)
or upon a Corporate Change described in clause (iv) or (v),
all outstanding options and SARs shall automatically become
fully exercisable, all restrictions or limitations on any
Incentives shall lapse and all performance criteria and other
conditions relating to the payment of Incentives shall be
deemed to be achieved and waived by the Company, without the
necessity of any action by any person. In addition, no later
than (a) 30 days after the approval by the Board of Directors
of Century of any Corporate Change of the type described in
clauses (i) to (iii) or (b) 30 days after a Corporate Change
of the type described in clause (iv) or (v), the Committee,
acting in its sole discretion without the consent or approval
of any participant (and notwithstanding any removal or
attempted removal of some or all of the members thereof as
directors or committee members), may act to effect one or
more of the following alternatives, which may vary among
individual participants and which may vary among Incentives
held by any individual participant: (1) require that all
outstanding options and/or SARs be exercised on or before a
specified date (before or after such Corporate Change) fixed
by the Committee, after which specified date all unexercised
options and SARs and all rights of participants thereunder
shall terminate, (2) provide for mandatory conversion of some
or all of the outstanding options and SARs held by some or
all participants as of a date, before or after such Corporate
Change, specified by the Committee, in which event such
options and SARs shall be deemed automatically cancelled and
the Company shall pay, or cause to be paid, to each such
participant an amount of cash per share equal to the excess,
if any, of the Change of Control Value of the shares subject
to such option or SAR, as defined and calculated below, over
the exercise price(s) of such options or SARs, or, in lieu of
such cash payment, the issuance of Common Stock having a Fair
Value Market equal to such excess, (3) make such equitable
adjustments to Incentives then outstanding as the Committee
deems appropriate to reflect such Corporate Change (provided,
however, that the Committee may determine in its sole
discretion that no adjustment is necessary to Incentives then
outstanding) or (4) provide that thereafter upon any exercise
of an option or SAR theretofore granted the participant shall
be entitled to purchase under such option or SAR, in lieu of
the number of shares of Common Stock then covered by such
option or SAR, the number and class of shares of stock or
other securities or property (including, without limitation,
cash) to which the participant would have been entitled
pursuant to the terms of the agreement providing for the
merger, consolidation, asset sale, dissolution or other
Corporate Change of the type described in clause (i) to (iii)
above, if, immediately prior to such Corporate Change, the
participant had been the holder of record of the number of
shares of Common Stock then covered by such options or SARs.
For the purposes of clause (2) above, the "Change of Control
Value" shall equal the amount determined by whichever of the
following items is applicable: (i) the per share price
offered to shareholders of Century in any such merger,
consolidation or other reorganization, determined as of the
date of the definitive agreement providing for such
transaction, (ii) the price per share offered to shareholders
of Century in any tender offer or exchange offer whereby a
Corporate Change takes place, or (iii) in all other events,
the Fair Market Value per share of Common Stock into which
such options or SARs being surrendered are exercisable, as
determined by the Committee as of the date determined by the
Committee to be the date of cancellation and surrender of
such options or SARs. In the event that the consideration
offered to shareholders of Century in any transaction
described herein consists of anything other than cash, the
Committee shall determine the fair cash equivalent of the
portion of the consideration offered which is other than
cash.
10.13. Definition of Fair Market Value. Whenever "Fair
Market Value" of Common Stock shall be determined for pur-
poses of this Plan, it shall be determined as follows: (i) if
the Common Stock is listed on an established stock exchange
or any automated quotation system that provides sale
quotations, the closing sale price for a share of the Common
Stock on such exchange or quotation system on the applicable
date; (ii) if the Common Stock is not listed on any exchange
or quotation system, but bid and asked prices are quoted and
published, the mean between the quoted bid and asked prices
on the applicable date, and if bid and asked prices are not
available on such day, on the next preceding day on which
such prices were available; and (iii) if the Common Stock is
not regularly quoted, the fair market value of a share of
Common Stock on the applicable date as established by the
Committee in good faith.
10.14. Compliance with Section 16. It is the intent of
the Company that the Plan and Incentives hereunder satisfy
and be interpreted in a manner, that, in the case of
participants who are or may be Insiders, satisfies the
applicable requirements of Rule 16b-3, so that such persons
will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the 1934 Act and will not
be subjected to avoidable liability thereunder. If any
provision of the Plan or of any Incentives would otherwise
frustrate or conflict with the intent expressed in this
Section 10.14, that provision to the extent possible shall be
interpreted and deemed amended so as to avoid such conflict.
To the extent of any remaining irreconcilable conflict with
such intent, the provision shall be deemed void as applicable
to Insiders.
10.15. Loans. In order to assist a participant to
satisfy his tax liabilities arising in connection with an
Incentive granted under the Plan, the Committee may
authorize, subject to the provisions of Regulation G of the
Board of Governors of the Federal Reserve System, at either
the time of the grant of the Incentive, at the time of the
acquisition of Common Stock pursuant to the Incentive, or at
the time of the lapse of restrictions on shares of restricted
stock granted under the Plan, the extension of a loan to the
participant by the Company. The terms of any loans,
including the interest rate, collateral and terms of
repayment, will be subject to the discretion of the
Committee. The maximum credit available hereunder shall be
equal to the maximum tax liability that may be incurred in
connection with the Incentive.
11. Stock Options for Outside Directors.
11.1 Eligibility. Each Outside Director shall be
automatically granted a non-qualified stock option to acquire
1,000 shares of Common Stock on the day following the Century
annual meeting of shareholders. Each person who becomes an
Outside Director between annual meetings will be entitled to
receive the pro rata portion of stock options to acquire
1,000 shares of Common Stock based on the number of full
calendar months between the date that the person becomes an
Outside Director and the next date of grant, as provided
herein, and to receive the stock options to which he may
subsequently become entitled as provided herein.
11.2 Exercisability of Stock Options. The stock options
granted to Outside Directors under this Section 11 shall
become exercisable six months following the date of grant;
provided, however, that such stock options shall become
immediately exercisable in the event of retirement from the
Board on or after reaching age 65, death or disability.
Stock options granted to an Outside Director under the terms
of this Section 11 shall expire ten years after the date of
grant.
11.3 Exercise Price. The exercise price of the stock
options granted to Outside Directors shall be equal to 100%
of the Fair Market Value, as defined in the Plan, of a share
of Common Stock on the date of grant. The exercise price may
be paid as provided in Section 6.5 hereof.
Adopted by the Compensation Committee: ________________, 1995.
Ratified by the Board of Directors: ________________, 1995.
Approved by the Shareholders: ________________, 1995.
