<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
CenturyTel, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] 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:
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<PAGE> 2
CENTURYTEL
(add logo)
================================================================================
2000
NOTICE OF
ANNUAL MEETING
AND
PROXY STATEMENT
================================================================================
Thursday, May 11, 2000
2:00 p.m. local time
The Atrium
2001 Louisville Avenue
Monroe, Louisiana
<PAGE> 3
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF CENTURYTEL, INC.:
The Annual Meeting of Shareholders of CenturyTel, Inc. will be held at
2:00 p.m., local time, on May 11, 2000 at The Atrium, 2001 Louisville Avenue,
Monroe, Louisiana, for the following purposes:
1. to elect four Class III directors;
2. to consider and vote upon a proposal to approve the Company's 2000
Incentive Compensation Plan as set forth in the accompanying proxy
statement; and
3. 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,
2000 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
/s/ HARVEY P. PERRY
HARVEY P. PERRY, Secretary
Dated: March 20, 2000
---------------------------
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.
---------------------------
<PAGE> 4
[CENTURYTEL LETTERHEAD]
March 20, 2000
Dear Shareholder:
It is a pleasure to invite you to the Company's 2000 Annual Meeting of
Shareholders on Thursday, May 11, beginning at 2:00 p.m. local time, at The
Atrium, Monroe, Louisiana. I hope that you will be able to attend the meeting.
Most of you have received with this Proxy Statement a proxy card that
indicates the number of votes that you will be entitled to cast at the meeting
according to the records of the Company or your broker, bank or other nominee.
Each share of the Company that you have "beneficially owned" continuously since
May 30, 1987 will generally entitle you to ten votes; each other share entitles
you to one vote. Shares held through a broker, bank or other nominee are
presumed to have one vote per share. In lieu of receiving a proxy card,
participants in the Company's benefit plans have been furnished with voting
instruction cards. The reverse side of this letter describes the Company's
voting provisions in greater detail.
Regardless of how many shares you own or whether you plan to attend the
meeting in person, it is important that your shares be voted at the meeting.
Please specify your voting choices by marking the enclosed proxy card (or voting
instruction cards) and returning it or them promptly in the enclosed return
envelope.
Thank you for your interest and continued support.
Sincerely,
/s/ CLARKE M. WILLIAMS
Clarke M. Williams
Chairman of the Board
<PAGE> 5
VOTING PROVISIONS
SHAREHOLDERS
Record Shareholders. 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 and all other shares are
presumed to have only one vote per share. However, the Company's articles of
incorporation (the relevant provisions of which are reproduced below) set forth
a list of circumstances in which the foregoing presumptions may be refuted. If
you believe that the voting information set forth on your proxy card is
incorrect or a presumption made with respect to your shares should not apply,
please send a letter to the Company 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.
Beneficial Shareholders. All shares held through a broker, bank or
other nominee are presumed to have one vote per share. The Company's articles of
incorporation set forth a list of circumstances in which this presumption may be
refuted by the person who has held since May 30, 1987 all of the attributes of
beneficial ownership referred to in Article III(C)(2) reproduced below. If you
believe that some or all of your shares are entitled to ten votes, you may
follow one of two procedures. First, you may write a letter to the Company
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.
Other. 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 the party furnishing such letter of its decision, 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.
PARTICIPANTS IN BENEFIT PLANS
Participants in the Company's Stock Bonus Plan and PAYSOP, Employee
Stock Ownership Plan, Dollars & Sense Plan or Retirement Savings Plan for
Bargaining Unit Employees have received voting instruction cards in lieu of a
proxy card. For additional information, please refer to the enclosed
informational letter or letters supplied by the trustee of the plans in which
you participate.
EXCERPTS FROM THE COMPANY'S ARTICLES OF INCORPORATION
Paragraph C of Article III of the Company's articles of incorporation
provides as follows:
* * * *
(1) Each share of Common 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 . . . . . .
(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 . . . . . 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 . . . . . then such share of Common 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.
* * * *
(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.
* * * *
<PAGE> 6
CENTURYTEL, INC.
100 CENTURY PARK DRIVE
MONROE, LOUISIANA 71203
(318) 388-9500
---------------------------
PROXY STATEMENT
---------------------------
March 20, 2000
This proxy statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors (the "Board") of CenturyTel, 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 23, 2000.
As of March 13, 2000, the record date for determining shareholders
entitled to notice of and to vote at the Meeting (the "Record Date"), the
Company had outstanding 140,217,679 shares of common stock (the "Common Shares")
and 319,000 shares of Series L preferred stock which votes together with the
Common Shares as a single class on all matters ("Preferred Shares" and,
collectively with the Common Shares, "Voting Shares"). The Company's Restated
Articles of Incorporation (the "Articles") generally provide that holders of
Common 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 Common
Shares, including a presumption that each Common Share held by nominees or by
any holder other than a natural person or estate entitles such holder to only
one vote, unless the holder thereof furnishes the Company with evidence to the
contrary. Applying the presumptions described in Article III, the Company's
records indicate that 241,014,245 votes are entitled to be cast at the Meeting,
of which 240,695,245 (99.9%) are attributable to the Common Shares. All
percentages of voting power set forth in this proxy statement have been
calculated based on such number of votes.
If a shareholder is a participant in the Company's Automatic Dividend
Reinvestment and Stock Purchase Service, the Company's proxy card covers shares
credited to the shareholder's account under that plan, as well as shares
registered in the participant's name. However, the proxy card will not serve as
a voting instruction card for shares held for participants in the Company's
Stock Bonus Plan and PAYSOP, Employee Stock Ownership Plan, Dollars & Sense Plan
or Retirement Savings Plan for Bargaining Unit Employees. Instead, these
participants will receive from the plan trustees separate voting instruction
cards covering these shares. These voting instruction cards should be completed
and returned in the manner provided in the instructions that accompany such
cards.
-1-
<PAGE> 7
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 Innisfree
M&A Incorporated, New York, New York, to assist in the solicitation of proxies,
for which it will be paid a fee of $5,000 and will be reimbursed for certain
out-of-pocket expenses.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY OR VOTING INSTRUCTION CARD)
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.
Four Class III 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 four
below-named nominees, each of whom has been recommended for election by the
Board's Nominating Committee. Because no shareholder has timely nominated any
individuals to stand for election at the Meeting in accordance with the
Company's advance notification bylaw (which is described generally below under
the heading "Other Matters - Shareholder Nominations and Proposals"), the four
below-named nominees will be the only individuals that may be elected at the
Meeting. If for any reason any such 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 or her beneficial ownership of Common Shares 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. Unless otherwise indicated, none of the persons named
below beneficially owns more than 1% of the outstanding Common Shares or is
entitled to cast more than 1% of the total voting power.
-2-
<PAGE> 8
- --------------------------------------------------------------------------------
CLASS III DIRECTORS (FOR TERM EXPIRING IN 2003):
- --------------------------------------------------------------------------------
[Photo]
CALVIN CZESCHIN, age 64; a director since 1975; President and Chief
Executive Officer of Yelcot Telephone Company and Czeschin Motors.
Committee Memberships: Executive; Audit (Chairman); Shareholder
Relations
Shares Beneficially Owned: 350,869 (1)
- --------------------------------------------------------------------------------
[Photo]
F. EARL HOGAN, age 78; a director since 1968; managing partner of EDJ
Farms Partnership, a farming enterprise, for several years prior to his
retirement in December 1997.
Committee Memberships: Executive; Audit; Compensation
Shares Beneficially Owned: 36,465
- --------------------------------------------------------------------------------
[Photo]
HARVEY P. PERRY, age 55; a director since 1990; Executive Vice
President and Chief Administrative Officer of the Company since May
1999; Senior Vice President of the Company from 1985 to May 1999;
General Counsel and Secretary of the Company since 1984 and 1986,
respectively. Mr. Perry is the son-in-law of Clarke M. Williams.
Committee Membership: Executive
Shares Beneficially Owned: 233,894 (2), (3)
- --------------------------------------------------------------------------------
[Photo]
JIM D. REPPOND, age 58; a director since 1986; retired; Vice President-
Telephone Group of the Company from January 1995 to July 1996;
President-Telephone Group of the Company (or a comparable predecessor
position) from May 1987 to December 1994.
Committee Memberships: Executive; Insurance Evaluation
Shares Beneficially Owned: 63,922
- --------------------------------------------------------------------------------
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THESE PROPOSED NOMINEES.
- --------------------------------------------------------------------------------
-3-
<PAGE> 9
- --------------------------------------------------------------------------------
CLASS I DIRECTORS (TERM EXPIRES IN 2001):
- --------------------------------------------------------------------------------
[Photo]
WILLIAM R. BOLES, JR., age 43; a director since 1992; an executive
officer, director and practicing attorney with The Boles Law Firm
(formerly, Boles, Boles & Ryan).
Committee Memberships: Insurance Evaluation (Chairman); Shareholder
Relations
Shares Beneficially Owned: 4,829
- --------------------------------------------------------------------------------
[Photo]
W. BRUCE HANKS, age 45; a director since 1992; Vice President -
Strategic Issues of the Company since May 1999; Executive Vice
President-Chief Operating Officer of the Company from October 1998 to
May 1999; Senior Vice President-Corporate Development and Strategy of
the Company from October 1996 to October 1998;
President-Telecommunications Services of the Company (or a comparable
predecessor position) between July 1989 and October 1996.
Committee Membership: Insurance Evaluation
Shares Beneficially Owned: 291,202 (3)
- --------------------------------------------------------------------------------
[Photo]
C. G. Melville, Jr., age 59; a director since 1968; private investor
since 1992; retired executive officer of an equipment distributor.
Committee Memberships: Audit; Insurance Evaluation; Nominating
Shares Beneficially Owned: 19,726
- --------------------------------------------------------------------------------
[Photo]
GLEN F. POST, III, age 47; a director since 1985; Vice Chairman of the
Board, President and Chief Executive Officer of the Company.
Committee Membership: Executive
Shares Beneficially Owned: 875,128 (3)
- --------------------------------------------------------------------------------
-4-
<PAGE> 10
- --------------------------------------------------------------------------------
[Photo]
CLARKE M. WILLIAMS, age 78; a director since 1968; Chairman of the
Board of the Company. Mr. Williams, who is the father-in-law of Harvey
P. Perry, founded the Company's telephone business in 1946.
Committee Membership: Executive (Chairman)
Shares Beneficially Owned: 818,267 (3)
- --------------------------------------------------------------------------------
CLASS II DIRECTORS (TERM EXPIRES IN 2002):
- --------------------------------------------------------------------------------
[Photo]
VIRGINIA BOULET, age 46; a director since January 1995; Partner, Phelps
Dunbar, L.L.P., a law firm.
Committee Memberships: Audit; Shareholder Relations
Shares Beneficially Owned: 5,328 (4)
- --------------------------------------------------------------------------------
[Photo]
ERNEST BUTLER, JR., age 71; a director since 1971; Chairman, President
and a director of I. E. Butler Securities, Inc., an investment banking
firm, since February 1998; for over 30 years prior to such time, Mr.
Butler served as an executive officer of Stephens Inc., an investment
banking firm.
Committee Memberships: Audit; Compensation (Chairman);
Shareholder Relations
Shares Beneficially Owned: 722
- --------------------------------------------------------------------------------
[Photo]
JAMES B. GARDNER, age 65; a director since 1981; Managing Director of a
division of Service Asset Management Company, a financial services
firm, and business consultant; a director of Ennis Business Forms, Inc.
and NAB Asset Corporation; prior to April 1994, Mr. Gardner served as
an executive officer of various financial institutions or other
financial service companies.
Committee Memberships: Executive; Audit; Compensation
Shares Beneficially Owned: 3,500
- --------------------------------------------------------------------------------
-5-
<PAGE> 11
- --------------------------------------------------------------------------------
[Photo]
R. L. HARGROVE, JR., age 68; a director since 1985; retired as
Executive Vice President of the Company in 1987 after 12 years of
service as an officer; since 1987 Mr. Hargrove has provided part-time
financial and tax consulting services to local businesses and
individuals.
Committee Memberships: Executive; Audit; Shareholder Relations
(Chairman)
Shares Beneficially Owned: 66,682
- --------------------------------------------------------------------------------
[Photo]
JOHNNY HEBERT, age 71; a director since 1968; retired in 1999 after
serving as the president of family-owned electrical contracting
businesses for over 40 years.
Committee Memberships: Audit; Nominating (Chairman); Insurance
Evaluation
Shares Beneficially Owned: 12,282 (5)
- --------------------------------------------------------------------------------
(1) Constitutes 0.2% of the outstanding Common Shares and entitles Mr. Czeschin
to cast 1.5% of the total voting power; includes 11,997 shares owned by Mr.
Czeschin's wife, as to which he disclaims beneficial ownership.
(2) Includes 2,762 shares held as custodian for the benefit of his children.
(3) Includes (i) shares of time-vested and performance-based restricted stock
issued to the below-named officers under the Company's incentive
compensation plans ("Restricted Stock"), with respect to which such
officers have sole voting power but no investment power; (ii) shares
("Option Shares") that such officers have the right to acquire within 60
days of the Record Date pursuant to options granted under the Company's
incentive compensation plans; and (iii) shares (collectively, "Plan
Shares") allocated to such officers' accounts as of December 31, 1999 under
the Company's Stock Bonus Plan and PAYSOP and Employee Stock Ownership Plan
("ESOP"), and as of the Record Date under the Company's Dollars & Sense
Plan ("401(k) Plan"), with respect to which such officers have sole voting
power but no investment power, as follows:
<TABLE>
<CAPTION>
Name Restricted Stock Option Shares Plan Shares
- ------------------- ---------------- ------------- -----------
<S> <C> <C> <C>
Harvey P. Perry 14,678 151,858 37,987
W. Bruce Hanks 14,756 219,983 53,295
Glen F. Post, III 41,241 704,942 75,582
Clarke M. Williams 43,635 733,299 16,243
</TABLE>
(4) Includes 1,272 shares held by Ms. Boulet as custodian for the benefit of
her children, and 450 shares owned by Ms. Boulet's husband, as to which she
disclaims beneficial ownership.
(5) Includes 1,720 shares owned by Mr. Hebert's wife, as to which he disclaims
beneficial ownership.
---------------------------
-6-
<PAGE> 12
MEETINGS AND CERTAIN COMMITTEES OF THE BOARD
During 1999 the Board held four regular meetings and seven special
meetings.
The Board's Executive Committee, which met once during 1999, is
authorized to exercise all the powers of the Board to the extent permitted by
law.
The Board's Audit Committee meets periodically 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 otherwise monitoring the
operation of the Company's system of financial reporting, auditing, internal
controls and legal compliance. The Audit Committee held four meetings during
1999.
The Board's Nominating Committee, which held three meetings in 1999, 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.
Any shareholder who wishes to make a nomination for the election of directors
must do so in compliance with the procedures set forth in the Company's advance
notification bylaw, which is discussed below under the heading "Other Matters -
Shareholder Nominations and Proposals."
The Board's Compensation Committee held four meetings during 1999. The
Compensation Committee's Incentive Awards Subcommittee held three meetings
during 1999. Both the Committee and the Subcommittee are described further
below.
DIRECTOR COMPENSATION
Each director who is not an employee of the Company (an "outside
director") is paid an annual fee of $25,000 plus $1,500 for attending each
regular Board meeting, $2,000 for attending each special Board meeting and
$1,000 for attending each meeting of a Board committee. Each outside director
who chairs a Board committee or subcommittee is paid an additional $4,000 per
year. The Company permits each outside director to defer receipt of all or a
portion of his or her fees. Amounts so deferred earn interest equal to the
one-year Treasury bill rate. Each director is also reimbursed for expenses
incurred in attending meetings.
Under the Company's Outside Directors' Retirement Plan, outside
directors who have completed five years of Board service are entitled to
receive, upon normal retirement at age 70, 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. Outside
directors who have completed ten years of service can also receive these
payments upon early retirement at age 65, subject to certain benefit reductions.
In addition, this plan provides certain disability and preretirement death
benefits. The Company has established a trust to fund its obligations under this
plan, but participants' rights to these trust assets are no greater than the
rights
-7-
<PAGE> 13
of unsecured creditors. Outside directors whose service is terminated in
connection with a change in control of the Company are entitled to receive a
cash payment equal to the present value of their vested plan benefits,
determined in accordance with actuarial assumptions specified in the plan.
During 1999, Jim D. Reppond received consulting fees of $14,636 under a
ten-year agreement that the Company entered into with him in connection with his
retirement in 1996.
RETIREMENT POLICY
The Board has adopted a policy that generally prohibits a person from
standing for election to the Board if such person has attained age 72 as of the
election date. The policy exempts Clarke M. Williams, the Company's founder, and
permits F. Earl Hogan, Ernest Butler, Jr. and Johnny Hebert to each serve one
additional three-year term after attaining age 72.
PROPOSAL TO APPROVE THE CENTURYTEL, INC.
2000 INCENTIVE COMPENSATION PLAN
(ITEM 2 ON PROXY OR VOTING INSTRUCTION CARD)
GENERAL
The Board believes that the growth of the Company depends upon the
efforts of its officers and key employees and that the CenturyTel, Inc. 2000
Incentive Compensation Plan (the "Plan") will provide an effective means of
attracting and retaining qualified key personnel while enhancing their long-term
focus on maximizing shareholder value. The Plan has been adopted by the Board of
Directors, subject to approval by the shareholders at the Meeting. The principal
features of the Plan are summarized below. This summary is qualified in its
entirety, however, by reference to the Plan, which is attached to this Proxy
Statement as Exhibit A.
PURPOSE OF THE PROPOSAL
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. As a result of stock option grants to officers
and key employees in early 2000, less than 290,000 Common Shares remain
available for grants under the Company's 1995 Incentive Compensation Plan. The
Board believes that adoption of the new Plan is necessary to provide the Company
with the continued ability to attract, retain and motivate key personnel in a
manner that is tied to the interests of shareholders.
TERMS OF THE PLAN
ADMINISTRATION OF THE PLAN. The Incentive Awards Subcommittee (the
"Committee") of the Compensation Committee of the Board administers the Plan and
has authority to make awards under the Plan, to set the terms of the awards, to
interpret the Plan, to establish any rules or regulations
-8-
<PAGE> 14
relating to the Plan that it determines to be appropriate and to make any other
determination that it believes necessary or advisable for the proper
administration of the Plan. Subject to the limitations specified in the Plan,
the Committee may delegate its authority to appropriate personnel of the
Company.
ELIGIBILITY. Officers and key employees of the Company (including
officers who are also directors of the Company) will be eligible to receive
awards ("Incentives") under the Plan when designated as plan participants. The
Company currently has approximately 50 officers and 250 key employees eligible
to receive Incentives under the Plan. Over the past several years the Company
has granted awards to all of its officers and approximately 100 key employees
under its predecessor incentive compensation plans. The Plan also permits
consultants and advisers to receive Incentives, although neither the Company nor
the Committee has any current intention of awarding Incentives to consultants or
advisers. Incentives under the Plan may be granted in any one or a combination
of the following forms: (a) incentive stock options under Section 422 of the
Internal Revenue Code (the "Code"); (b) non-qualified stock options; (c)
restricted stock; and (d) other stock-based awards.
SHARES ISSUABLE THROUGH THE PLAN. A total of 4,000,000 Common Shares
are authorized to be issued under the Plan, representing approximately 2.9% of
the outstanding Common Shares. There are currently options to acquire
approximately 3,313,000 Common Shares outstanding under the Company's
predecessor incentive compensation plans. If the Plan is approved by the
shareholders at the Meeting, no additional Incentives will be granted under the
Company's predecessor incentive compensation plans.
The closing sale price of a Common Share, as quoted on the New York
Stock Exchange on March 17, 2000, was $36-1/2.
LIMITATIONS AND ADJUSTMENTS TO SHARES ISSUABLE THROUGH THE PLAN.
Incentives relating to no more than 600,000 Common Shares may be granted to a
single participant in one calendar year. No more than 500,000 Common Shares may
be issued as restricted stock or other stock-based awards.
For purposes of determining the maximum number of Common Shares
available for delivery under the Plan, Common Shares that are not delivered
because the Incentive is forfeited, canceled or settled in cash and shares that
are withheld to satisfy participants' applicable tax withholding obligations
will not be deemed to have been delivered under the Plan. Also, if the exercise
price of any stock option granted under the Plan is satisfied by tendering
Common Shares, only the number of shares issued net of the shares tendered will
be deemed delivered for purposes of determining the maximum number of Common
Shares available for delivery under the Plan. However, no more than 4,000,000
shares may be delivered upon exercise of stock options intended to qualify as
incentive stock options under Section 422 of the Code, and shares withheld to
cover taxes or shares delivered in payment of the exercise price will not be
credited against the 4,000,000 share limit applicable to incentive stock
options. In addition, if the delivery of any shares earned under an Incentive is
deferred for any reason, any additional shares attributable to dividends during
the deferral period will be disregarded for purposes of counting the maximum
number of Common Shares that may be issued.
-9-
<PAGE> 15
Proportionate adjustments will be made to all of the share limitations
provided in the Plan, including shares subject to outstanding Incentives, in the
event of any recapitalization, reclassification, stock dividend, stock split,
combination of shares or other change in the Common Shares, and the terms of any
incentive will be adjusted to the extent appropriate to provide participants
with the same relative rights before and after the occurrence of any such event.
AMENDMENTS TO THE PLAN. The Board may amend or discontinue the Plan at
any time. However, the shareholders must approve any amendment that would
materially increase the benefits accruing to participants under the Plan;
increase the number of Common Shares that may be issued under the Plan;
materially expand the classes of persons eligible to participate in the Plan; or
authorize the Company to reprice outstanding options. No amendment or
discontinuance of the Plan may materially impair any previously granted
Incentive without the consent of the recipient.
TYPES OF INCENTIVES. Each of the types of Incentives that may be
granted under the Plan is described below:
Stock Options. The Committee may grant non-qualified stock options or
incentive stock options to purchase Common Shares. The 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 Shares on the date of grant. The
term of an option will also be determined by the Committee; provided that the
term of an incentive stock option may not exceed 10 years. The Committee may
accelerate the exercisability of any stock option at any time. The 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 the option. Except for
adjustments permitted in the Plan to protect against dilution, without approval
of the shareholders, the exercise price of an outstanding option may not be
decreased after grant, nor may an option be surrendered to the Company as
consideration for the grant of a new option with a lower price.
The option exercise price may be paid (a) in cash; (b) in Common
Shares, subject to certain limitations; (c) in a combination of cash and Common
Shares; (d) through a "cashless" exercise arrangement with a broker approved in
advance by the Committee; or (e) in any other manner authorized by the
Committee.
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. Common Shares may be granted by the 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"). 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. All shares of restricted
stock will be subject to such restrictions as the Committee may provide in an
agreement with the participant, including provisions obligating the
-10-
<PAGE> 16
participant to forfeit or resell the shares to the Company in the event of
termination of employment or if specified performance goals or targets are not
met. 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.
Other Stock-Based Awards. The Plan also authorizes the Committee to
grant participants awards of Common Shares and other awards that are denominated
in, payable in, valued in whole or in part by reference to, or are otherwise
based on the value of, or the appreciation in value of, Common Shares ("other
stock-based awards"). The Committee has discretion to determine the participants
to whom other stock-based awards are to be made, the times at which such awards
are to be made, the size of such awards, the form of payment, and all other
conditions of such awards, including any restrictions, deferral periods or
performance requirements.
PERFORMANCE-BASED COMPENSATION UNDER SECTION 162(m). Stock options
granted in accordance with the terms of the Plan will qualify as
performance-based compensation under Section 162(m) (as described and defined
below under "Executive Compensation and Related Information - Report of
Executive Compensation Committee Regarding Executive Compensation.") Grants of
any restricted stock or other stock-based awards that the Company intends to
qualify as performance- based compensation under Section 162(m) must be made
subject to the achievement of pre- established performance goals. The
pre-established performance goals will be based upon any or a combination of the
following business criteria: earnings per share, return on assets, an economic
value added measure, shareholder return, earnings, return on equity, return on
investment, cash provided by operating activities, or increase in revenues, cash
flow or customers of the Company, or one or more operating divisions or
subsidiaries. For any performance period, the performance goals may be measured
on an absolute basis or relative to a group of peer companies selected by the
Committee, relative to internal goals, or relative to levels attained in prior
years.
The Committee has authority to use different targets from time to time
under the performance goals provided in the Plan. As a result, the regulations
under Section 162(m) require that the material terms of the performance goals be
reapproved by the shareholders every five years. To qualify as performance-based
compensation, grants of restricted stock and other stock-based awards will be
required to satisfy the other applicable requirements of Section 162(m).
TERMINATION OF EMPLOYMENT. If an employee participant ceases to be an
employee of the Company for any reason, including death, his outstanding
Incentives may be exercised or shall expire at such time or times as may be
determined by the Committee and described in the incentive agreement.
CHANGE OF CONTROL. In the event of a change of control of the Company,
as defined in the Plan, all Incentives will become fully vested and exercisable,
all restrictions or limitations on any Incentives will generally lapse and,
unless otherwise provided in the incentive agreement, all performance criteria
and other conditions relating to the payment of Incentives will generally be
deemed to be achieved or waived.
-11-
<PAGE> 17
In addition to the foregoing, upon a change of control the Committee
will have the authority to take a variety of actions regarding outstanding
Incentives. Within certain time periods, the Committee may (i) require that all
outstanding Incentives 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 Incentives in exchange for a stock or cash
payment for each Incentive equal in value to the per-share change of control
value, calculated as described in the Plan, over the exercise or base price,
(iii) make any equitable adjustments to outstanding Incentives as the Committee
deems necessary to reflect the corporate change or (iv) provide that an
Incentive shall become an Incentive 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 change of control if
the participant had been a shareholder.
LOANS TO PARTICIPANTS. In order to assist a participant in acquiring
Common Shares, the Committee may authorize the Company to loan cash to the
participant to cover the associated exercise price or the participant's tax
liability. The terms of the loan will be determined by the Committee. The
participant may not borrow an amount greater than the aggregate purchase price
of the Common Shares to be acquired pursuant to the Incentive plus the maximum
tax liability that may be incurred in connection therewith.
TRANSFERABILITY OF INCENTIVES. The Incentives awarded under the Plan
may not be transferred except (i) by will; (ii) by the laws of descent and
distribution; (iii) pursuant to a domestic relations order; or (iv) in the case
of stock options only, to immediate family members or to a partnership, limited
liability company or trust for which the sole owners, members or beneficiaries
are immediate family members, if permitted by the Committee and if so provided
in the stock option agreement.
PAYMENT OF WITHHOLDING TAXES. The Company may withhold from any
payments or stock issuances under the Plan, or collect as a condition of
payment, any taxes required by law to be withheld. Any participant may, but is
not required to, satisfy his or her withholding tax obligation by electing to
have the Company withhold, from the shares the participant would otherwise
receive, Common Shares having a value equal to the minimum amount required to be
withheld. This election must be made prior to the date on which the amount of
tax to be withheld is determined and is subject to the Committee's right of
disapproval.
AWARDS TO BE GRANTED
In early 2000, the Company granted stock options to 54 officers under a
three-year program designed by the Committee's independent consulting firm.
Although its plans are not yet complete, the Company intends to grant additional
options in early 2000, and to thereafter make further awards as necessary to
attract and retain key personnel.
-12-
<PAGE> 18
FEDERAL INCOME TAX CONSEQUENCES OF STOCK OPTIONS
Under existing federal income tax provisions, a participant who is
granted a stock option normally will not realize any income, nor will the
Company normally receive any deduction for federal income tax purposes, in the
year the option is granted.
When a non-qualified stock option granted pursuant to the Plan is
exercised, the participant will realize ordinary income measured by the
difference between the aggregate purchase price of the Common Shares acquired
and the aggregate fair market value of the Common Shares acquired on the
exercise date and, subject to the limitations of Section 162(m) of the Code, the
Company will be entitled to a deduction in the year the option is exercised
equal to the amount the participant 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 tax
preference, 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 in addition to the federal
individual income tax, and it is intended to ensure that individual taxpayers do
not completely avoid federal income tax by using preference items. 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 "holding
periods"). An employee disposing of such shares before the expiration of an
applicable 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 Shares received upon exercise before the expiration of an
applicable holding period.
If the exercise price of a non-qualified option is paid by the
surrender of previously owned shares, the basis and the holding period of the
previously owned shares carries over to the same number of shares received in
exchange for the previously owned shares. The compensation income recognized on
exercise of these options is added to the basis of the shares received. If the
exercised option is an incentive stock option and the shares surrendered were
acquired through the exercise of an incentive stock option and have not been
held for the applicable holding period, the optionee will recognize income on
such exchange, and the basis of the shares received will be equal to the fair
market value of the shares surrendered. If the applicable holding period has
been met on the date of exercise, there will be no income recognition and the
basis and the holding period of the previously owned shares will carry over to
the same number of shares received in exchange, and the remaining shares will
begin a new holding period and have a zero basis.
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<PAGE> 19
If, upon a change in control of the Company, the exercisability or
vesting of an Incentive is accelerated, any excess on the date of the change in
control of the fair market value of the shares or cash issued under accelerated
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 and
incentive stock options 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 options.
VOTE REQUIRED
Approval of the Plan requires the affirmative vote of the holders of at
least a majority of the shares of voting power present or represented by proxy
at the Meeting.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
PROPOSAL TO APPROVE THE 2000 INCENTIVE COMPENSATION PLAN.
VOTING SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding ownership of the
Company's Common Shares by (i) each person known to the Company to be the
beneficial owner of more than 5% of the outstanding Common Shares and (ii) all
of the Company's directors and executive officers as a group. The table also
sets forth similar information for two of the executive officers listed in the
Summary Compensation Table set forth elsewhere herein; similar information for
each other executive officer listed in such table is included under the heading
"Election of Directors." 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.
-14-
<PAGE> 20
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF PERCENT
OWNERSHIP OF OUTSTANDING OF VOTING
BENEFICIAL OWNER COMMON SHARES(1) COMMON SHARES(1) POWER(2)
---------------- ---------------- ---------------- ----------
<S> <C> <C> <C>
Principal Shareholders:
Regions Bank, as Trustee 8,897,592(3) 6.3% 28.5%
(the "Trustee") of the Stock Bonus
Plan and ESOP (the "Benefit Plans")
P. O. Box 7232
Monroe, Louisiana 71211
FMR Corp. 7,017,740(4) 5.0% 2.9%
82 Devonshire Street
Boston, Massachusetts 02109
Management:
R. Stewart Ewing 281,418(5) * *
David D. Cole 173,964(6) * *
All directors and executive 3,259,214(7) 2.3% 2.7%
officers as a group (17 persons)
</TABLE>
- ----------
* Represents less than 1%.
(1) Determined in accordance with Rule 13d-3 of the SEC based upon information
furnished by the persons listed. In addition to Common Shares, the Company
has outstanding Preferred Shares that vote together with the Common Shares
as a single class on all matters. A brokerage company owns of record more
than 5% of the Preferred Shares; however, the percentage of total voting
power held by such company is immaterial. For additional information
regarding the Preferred Shares, see page 1 of this proxy statement.
(2) 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 these shares entitle
the Trustee to cast ten votes per share.
(3) Substantially all of the 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.
(4) Based on share information as of February 14, 2000 contained in a Schedule
13G Report that FMR Corp. has filed with the SEC. Based on such
information, FMR Corp. has no voting power with respect to 6,867,000 of the
shares shown.
(5) Includes 14,668 shares of Restricted Stock, 219,983 Option Shares that Mr.
Ewing has the right to acquire within 60 days of the Record Date, 38,187
Plan Shares allocated to his account as of December 31, 1999 under the
Benefit Plans and as of the Record Date under the 401(k) Plan.
(6) Includes 12,320 shares of Restricted Stock, 126,208 Option Shares that Mr.
Cole has the right to acquire within 60 days of the Record Date, 23,827
Plan Shares allocated to his account as of December 31, 1999 under the
Benefit Plans and as of the Record Date under the 401(k) Plan, and 4,657
Plan Shares allocated to the account of his wife as of December 31, 1999
under the Benefit Plans and as of the Record Date under the 401(k) Plan, as
to which he disclaims beneficial ownership.
(7) Includes (i) 141,730 shares of Restricted Stock, (ii) 2,175,415 Option
Shares that such persons have the right to acquire within 60 days of the
Record Date, (iii) 245,533 Plan Shares allocated to their respective
accounts as of December 31, 1999 under the Benefit Plans and as of the
Record Date under the 401(k) Plan, (iv) 18,824 shares held of record by the
spouses of certain directors and executive officers, as to which beneficial
ownership is disclaimed, and (v) 4,434 shares held as custodian for the
benefit of the children of the directors and executive officers.
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<PAGE> 21
EXECUTIVE COMPENSATION AND RELATED INFORMATION
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 (collectively, the "named officers"). Following this table is
additional information regarding option exercises and grants of long-term
incentive awards during 1999. For additional information, see "- Report of
Compensation Committee Regarding Executive Compensation."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation Awards
-------------------------------------
Long-
No. of Term
Annual Compensation Restricted Securities Incentive
Name and Current ------------------------ Stock Underlying Plan All Other
Principal Position Year Salary Bonus(1) Awards(2) Options Payouts(3) Compensation(4)
- ------------------ ---- ----------- ------------ ----------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Clarke M. Williams 1999 $ 697,856 $ 385,866 $ 275,007 0 $ 0 $ 153,351
Chairman of the Board 1998 618,141 438,756 289,535 0 0 130,635
1997 535,854 1,011,430 151,563 197,983 59,220 98,619
Glen F. Post, III 1999 663,515 366,879 268,913 0 0 134,330
Vice Chairman of the 1998 575,437 408,445 277,098 0 0 113,094
Board, President and 1997 479,397 904,865 140,776 197,983 43,875 81,273
Chief Executive Officer
Harvey P. Perry 1999 306,054 140,840 79,488 0 0 62,962
Executive Vice President, 1998 279,079 132,507 83,800 0 0 45,197
Chief Administrative 1997 254,600 462,888 45,219 59,616 32,906 48,677
Officer, General Counsel
and Secretary
R. Stewart Ewing 1999 305,721 136,406 79,454 0 0 61,983
Executive Vice President 1998 278,763 131,381 83,737 0 0 43,003
and Chief Financial 1997 254,298 455,753 45,161 59,616 32,704 47,801
Officer
David D. Cole 1999 294,184 129,493 78,173 0 0 60,119
Senior Vice President - 1998 264,934 138,561 81,175 0 0 43,303
Operations Support 1997 233,336 439,649 42,699 59,616 20,264 43,956
</TABLE>
(1) The "Bonus" column reflects, for each year indicated, the cash portion of
annual incentive bonuses granted pursuant to the Company's annual incentive
programs and, for 1997 only, special cash bonuses for extraordinary
services during 1997 relating principally to the disposition of the
Company's competitive access provider and its December 1997 acquisition of
Pacific Telecom, Inc. These special cash bonuses were payable in the
following amounts: Mr. Williams, $761,666; Mr. Post, $681,415; Mr. Perry,
$361,885; Mr. Ewing, $361,963; and Mr. Cole $336,309. For additional
information on bonuses, see footnote (2) below.
-16-
<PAGE> 22
(2) The "Restricted Stock Awards" column reflects the value (determined as of
the award date) of:
o the portion of the officers' annual incentive bonuses awarded for
performance in 1997, 1998 and 1999 in the form of restricted stock
that vests generally upon the passage of time; and
o the portion of the officers' long-term incentive compensation awarded
in early 1997, 1998 and 1999 in the form of additional shares of
restricted stock that vest upon the passage of time (collectively, the
"Time-Vested Restricted Shares").
In addition, as part of the long-term incentive compensation granted to the
Company's officers in 1997, 1998, and 1999, each officer named above
received performance-based restricted shares (the "Performance-Based
Restricted Shares") that will vest based on the performance of the
Company's stock in relation to that of certain specified peer group
companies, all as described further below under the table entitled
"Long-Term Incentive Awards in Last Fiscal Year." The chart below sets
forth additional information as of December 31, 1999 regarding the named
officers' aggregate holdings of all Time-Vested Restricted Shares and
Performance-Based Restricted Shares and the aggregate value thereof,
determined as if all such restricted shares were fully vested. (This chart
reflects neither Time- Vested Restricted Shares granted in February 2000 as
incentive bonuses for the Company's 1999 performance nor unearned
performance shares with respect to which shares of Common Shares have not
been issued.)
<TABLE>
<CAPTION>
Performance- Aggregate
Time-Vested Based Value at
Restricted Restricted December 31,
Name Shares Shares Total 1999
- --------------- ------------ ------------ ------- ------------
<S> <C> <C> <C> <C>
Mr. Williams 35,674 10,899 46,573 $2,206,396
Mr. Post 31,832 10,899 42,731 2,024,381
Mr. Perry 13,502 3,282 16,784 795,142
Mr. Ewing 13,490 3,282 16,772 794,574
Mr. Cole 9,623 3,282 12,905 611,374
</TABLE>
Dividends are paid currently with respect to all shares described above For
additional information regarding the foregoing, see "- Report of
Compensation Committee Regarding Executive Compensation."
(3) The 1997 figures reflect the value of Common Shares issued as a result of
performance units awarded in 1993 being earned during 1997 based on the
post-1993 appreciation in the market value of the Common Shares.
(4) Comprised of the Company's (i) matching contributions to the 401(k) Plan,
as supplemented by matching contributions under the Company's Supplemental
Dollars & Sense 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), (iv) contributions pursuant to the
Stock Bonus Plan and ESOP valued as of December 31, 1999 (as supplemented
by contributions under the Company's Supplemental Defined Contribution
Plan), and (v) payment in 1999 of cash allowances in lieu of perquisites
offered in prior years, in each case for and on behalf of the named
officers as follows:
<TABLE>
<CAPTION>
Cash
Medical Life Stock Bonus Plan Allowance
401(k) Plan Plan Insurance and ESOP in Lieu
Name Year Contributions Premiums Premiums Contributions of Perquisites
- ------------------- ------ --------------- -------- ---------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Williams 1999 $ 0 $1,500 $58,124 $78,470 $15,257
1998 0 1,476 48,761 80,398 0
1997 0 1,454 39,439 57,726 0
Mr. Post 1999 40,904 1,500 2,062 74,607 15,257
1998 35,160 1,476 1,614 74,844 0
1997 26,953 1,454 1,222 51,644 0
Mr. Perry 1999 16,149 1,500 1,668 31,249 12,396
1998 12,315 1,476 1,350 30,056 0
1997 21,062 1,454 1,069 25,092 0
Mr. Ewing 1999 16,099 1,500 1,051 30,937 12,396
1998 10,749 1,476 820 29,958 0
1997 21,035 1,454 678 24,634 0
Mr. Cole 1999 15,871 1,500 697 29,655 12,396
1998 11,942 1,476 526 29,359 0
1997 18,391 1,454 413 23,698 0
</TABLE>
---------------------------
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<PAGE> 23
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, 1999 December 31, 1999
on Value ---------------------------- -----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------------------ -------- ----------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Clarke M. Williams 359,300 $15,084,382 733,299 0 $23,107,514 $0
Glen F. Post, III 100,000 5,065,220 704,942 0 22,483,692 0
Harvey P. Perry 180,205 7,132,710 151,858 0 4,871,996 0
R. Stewart Ewing 42,130 1,348,470 219,983 0 6,842,512 0
David D. Cole 0 0 126,208 0 4,019,111 0
</TABLE>
---------------------------
LONG-TERM INCENTIVE AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Performance or
Number of Other Period Until
Performance-Based Number of Maturation or
Name Restricted Shares(1) Performance Shares(1) Payout
- --------------------- -------------------- --------------------- -----------------
<S> <C> <C> <C>
Clarke M. Williams 3,633 3,636 December 31, 2003
Glen F. Post, III 3,633 3,636 December 31, 2003
Harvey P. Perry 1,094 1,095 December 31, 2003
R. Stewart Ewing 1,094 1,095 December 31, 2003
David D. Cole 1,094 1,095 December 31, 2003
</TABLE>
- ----------
(1) In early 1999, the Company granted performance-based restricted shares and
performance shares (collectively, "Performance-Based Incentive Shares"),
which constituted a portion of the long-term incentive compensation award
granted to each of the Company's officers. The performance-based restricted
shares will vest, and the performance shares will be earned, as of February
2004 based on the Company's total shareholder return for the five-year
period ending December 31, 2003 in relation to the total shareholder return
of the group of peer companies selected by the Company for purposes of
comparing its market performance against other companies as required by the
federal proxy rules (the "peer companies"). Under the terms of the
Performance-Based Incentive Shares, the number of such shares that will
vest or be earned at the end of the five-year period will depend on how the
Company's shareholder return compares to the average shareholder return of
those companies comprising the top, middle and lower tiers of the peer
companies to be included in the Company's 2004 proxy statement. If the
Company's shareholder return is less than the average shareholder return of
the lower third of the peer companies, no Performance-Based Incentive
Shares will vest or be earned. If the Company's shareholder return equals
or exceeds the average shareholder return of the lower third of the peer
companies, then up to 100% of the performance-based restricted shares will
vest depending upon how favorably the Company's shareholder return compares
to the average shareholder return of the middle third of the peer
companies. In addition, if the Company's shareholder return exceeds the
average shareholder return of the middle third of the peer companies, then
up to 100% of the performance shares will be earned depending upon how
favorably the Company's shareholder return compares to the average
shareholder return of the top third of the peer companies. If an officer's
employment is terminated before December 31, 2003 due to death, disability
or retirement, such officer will receive the pro rata portion of his
Performance-Based Incentive Shares based upon the number of full years that
have elapsed and the Company's shareholder return in comparison to the peer
companies.
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<PAGE> 24
REPORT OF COMPENSATION COMMITTEE REGARDING EXECUTIVE COMPENSATION
GENERAL. The Board's Compensation Committee, either directly or through
its Incentive Awards Subcommittee, monitors and establishes the compensation
levels of the Company's executive officers and directors, administers the
Company's incentive compensation programs, and performs other related tasks. The
Committee is composed entirely of Board members who are not employees of the
Company and the Subcommittee is composed entirely of Committee members who
qualify as "outside directors" under Section 162(m) of the Internal Revenue Code
of 1986 and as "non-employee directors" under Rule 16b-3 promulgated under the
Securities Exchange Act of 1934.
Compensation Objectives. During 1999, the Committee applied the
following compensation objectives in connection with its deliberations:
o compensating the Company's executive officers with salaries
commensurate with the median salaries of similarly-situated
executives at comparable companies
o providing a substantial portion of the executives'
compensation in the form of incentive compensation based upon
(i) the Company's annual, intermediate and long- term
performance and (ii) the individual, departmental or
divisional achievements of the executives
o encouraging team orientation
o providing sufficient benefit levels for executives and their
families in the event of disability, illness or retirement.
In addition, to the extent that it is practicable and consistent with
the Company's executive compensation objectives, the Committee intends to comply
with Section 162(m) of the Internal Revenue Code of 1986 and any regulations
promulgated thereunder (collectively, "Section 162(m)") in order to preserve the
deductibility of performance-based compensation in excess of $1 million per
taxable year to each of the named officers. If compliance with Section 162(m)
conflicts with the Committee's compensation objectives or is contrary to the
best interests of the shareholders, the Committee reserves the right to pursue
its objectives, regardless of the attendant tax implications.
Overview of 1999 Compensation. As described further below, during 1999
the Company's executive compensation was comprised of:
o salary
o a cash and stock incentive bonus
o grants of long-term incentive compensation in the form of
restricted stock and performance shares and
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<PAGE> 25
o 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 were
compared with those of comparable companies.
During 1999, the Committee retained an independent consulting firm to
review the Company's officer compensation programs. In connection with this
review, the consulting firm compared the Company's officer compensation
practices to that of a national group of several hundred companies. This group
included a number of telecommunications companies (including several of the peer
companies referred to in the Company's stock performance graph appearing
elsewhere herein), but also included other companies (excluding financial
service companies) that have revenue levels similar to the Company's.
SALARY. The salary of the Chief Executive Officer and each other
executive officer is based primarily on the officer's level of responsibility
and comparisons to prevailing salary levels for similar officers at comparable
companies. During 1999, the Committee's independent consulting firm surveyed the
compensation practices of the Company and comparable companies, and concluded
that the salaries of each of the Company's named officers should be raised
approximately 3.5%. The Committee believes these raises were consistent with its
objectives of (i) ensuring that the executive officers receive salaries
comparable to those of similarly-situated executives and (ii) applying a team
orientation to executive compensation.
The Chairman's compensation is determined in the same manner as the
compensation for all other executive officers, provided that his annual salary
cannot be reduced below the minimum salary to which he is entitled under his
1993 employment agreement described below under the heading "- Employment
Contract With Chairman and Change-in-Control Arrangements."
ANNUAL INCENTIVE BONUS PROGRAMS. The Company maintains (i) a
shareholder-approved short-term incentive program for its Chairman and its Chief
Executive Officer and (ii) an annual incentive bonus program for the Company's
other officers and managers. In connection with both of these bonus programs,
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. For 1999, the Committee
recommended target bonuses ranging from 40% to 55% of each executive officer's
salary if the targets were met, with up to double these amounts if the targets
were substantially exceeded and no bonuses if certain minimum target performance
levels were not attained. The bonuses payable to the Chairman and the President
are based solely upon the Company's overall financial performance measured in
terms of return on equity and, to a lesser extent, revenue growth. The bonuses
payable to each other executive officer are based partially upon the Company's
overall financial performance and partially upon the attainment of pre-approved
individual, departmental or divisional goals.
As a result of the Company exceeding both of its 1999 financial
targets, each of the Chairman and the Chief Executive Officer received a bonus
equal to approximately 73% of his 1999 salary.
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<PAGE> 26
Based upon the Company's financial performance and the attainment of individual
performance objectives, each other named officer received a bonus between
approximately 55% and 62% of his 1999 salary. The Incentive Awards Subcommittee
elected to pay the 1999 incentive bonuses principally in cash, with the
remainder being paid in the form of time-vested restricted stock that may not be
transferred by the officer for three years and which, subject to certain
exceptions, will be forfeited if the officer leaves the Company prior to the end
of the three-year period.
STOCK INCENTIVE PROGRAMS. The Company's current incentive compensation
programs authorize the Compensation Committee or the Incentive Awards
Subcommittee to grant stock options and various other stock-based incentives to
key personnel. The Committee and Subcommittee's philosophy with respect to stock
incentive awards is to strengthen the relationship between compensation and
growth in the market price of the Common Shares and thereby align the executive
officers' financial interests with those of the Company's shareholders.
Incentives granted under these programs become exercisable based upon
criteria established by the Compensation Committee or Incentive Awards
Subcommittee. The Subcommittee generally determines the size of option grants
based on the recipient's responsibilities and duties, and on information
furnished by the Subcommittee's consultants regarding stock option practices
among comparable companies. The Subcommittee also considers stock option grants
made by the Company in the past for overlapping performance periods.
1999 Grants. During 1999, the Subcommittee awarded to the Company's
officers the final annual installment of equity incentives pursuant to a
three-year program designed in early 1997. These awards consisted of (i)
time-vested restricted stock which will vest on the fifth anniversary of the
grant date if the officer remains employed by the Company on such date, subject
to earlier vesting upon death, disability, retirement or a change in control of
the Company, and (ii) performance-based restricted stock and performance shares
which will vest or be earned based on the performance of the Common Shares in
relation to that of the Company's peer group companies, as described above under
the table entitled "Long-Term Incentive Awards in Last Fiscal Year." In 1997,
the Subcommittee determined the size of each of the three annual installments
based on information furnished by the Committee's independent consulting firm
relating to the long-term incentive compensation practices among other
comparable companies. Based on the consulting firm's recommendations, the
Subcommittee granted awards to each executive officer having a value, determined
under the Black-Scholes valuation methodology and expressed as a percentage of
annual salary, commensurate with long-term incentive awards to comparable
executives at other comparable companies. No new options were granted to
executive officers during 1999.
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 Shares so as to further align employees' and shareholders'
financial interests. The Company also maintains the Stock Bonus Plan and ESOP,
which serve to further align employees' and shareholders' interests.
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<PAGE> 27
Additionally, the Company makes available to its officers a
supplemental life insurance plan, supplemental benefits under its medical
reimbursement plan, various defined benefit retirement plans (which are
described below under "- Pension Plans"), various nonqualified supplemental
benefit plans, and a disability salary continuation plan.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. The criteria, standards and
methodology used by the Committee and Subcommittee 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.
As discussed above under "- Salary," based on its review of data compiled by the
Committee's independent consulting firm and other information, the Committee
raised the annual salary of the Chief Executive Officer by 3.5% during 1999 to
$672,800. Application of the Committee's compensation criteria also resulted in
the Chief Executive Officer receiving for 1999 a bonus valued at approximately
73% of his base salary consisting of $366,879 and 3,391 shares of time-vested
restricted stock under the Company's Chairman/Chief Executive Officer short-term
incentive program. In addition, during 1999 the Chief Executive Officer was also
granted 3,636 shares of time-vested restricted stock, 3,633 shares of
performance-based restricted stock and 3,636 performance shares, all of which
are described further herein.
<TABLE>
<S> <C> <C>
Ernest Butler, Jr. James B. Gardner F. Earl Hogan
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As indicated above, the members of the Compensation Committee include
Ernest Butler, Jr., who, until February 1998, was an Executive Vice President
and Director of Stephens Inc., which has provided investment banking services to
the Company from time to time. The Compensation Committee maintains an Incentive
Awards Subcommittee, composed solely of James B. Gardner and F. Earl Hogan, for
purposes of, among other things, granting stock-based incentive awards and other
types of performance-based compensation.
PENSION PLANS
Supplemental Executive Retirement Plan. The Company maintains a
Supplemental Executive Retirement Plan (the "Supplemental Pension Plan")
pursuant to which certain officers who have completed at least five years of
service are generally entitled to receive a monthly payment upon attaining early
or normal retirement age under the plan. 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 Pension Plan
assuming retirement at age 65. Early retirement may be taken at age 55 by any
participant with ten or more years of service, with reduced benefits.
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<PAGE> 28
<TABLE>
<CAPTION>
Years of Service
------------------------------------
Compensation 15 20 25
- ------------ -------- -------- --------
<S> <C> <C> <C>
$ 400,000 $140,000 $160,000 $180,000
500,000 175,000 200,000 225,000
600,000 210,000 240,000 270,000
700,000 245,000 280,000 315,000
800,000 280,000 320,000 360,000
900,000 315,000 360,000 405,000
1,000,000 350,000 400,000 450,000
1,100,000 385,000 440,000 495,000
1,200,000 420,000 480,000 540,000
</TABLE>
The above table reflects the benefits payable under the Supplemental
Pension 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 actual amount of an officer's monthly
payment under the Supplemental Pension Plan is equal to (i) 3% of the officer's
"average monthly compensation" (defined below) times the officer's years of
service during his first ten years with the Company plus (ii) 1% of the
officer's "average monthly compensation" times his years of service after his
first ten years with the Company (up to a maximum of 15 additional years), minus
(iii) 4% of his estimated monthly Social Security benefits times his years of
service with the Company (up to a maximum of 25 years). Payments to retired
officers under this formula are increased by 3% per year to reflect cost of
living increases. "Average monthly compensation" means the officer's average
monthly compensation during the 36-month period within his last ten years of
employment in which he received his highest compensation. Participants added to
the plan after January 1, 2000 receive credit only for service while a plan
participant.
Under the Supplemental Pension Plan, the number of credited years of
service at December 31, 1999 was over 25 years for Mr. Williams, 23 years for
Mr. Post, 15 years for Mr. Perry, 17 years for Mr. Ewing and 17 years for Mr.
Cole. The compensation upon which benefits are based under such plan 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" (other than compensation included under the
"Bonus" column relating to the Company's special bonuses or included under the
"Restricted Stock Awards" column relating to the Time-Vested Restricted Shares
awarded as a component of long-term incentive compensation).
Predecessor Supplemental Retirement Plan. Mr. Williams has the option
of receiving retirement benefits under either the normal benefit formula for the
Supplemental Pension Plan or under a separate benefit formula (the "Alternative
Formula") that existed under a predecessor supplemental retirement plan in which
he held grandfathered rights when the Supplemental Pension Plan was adopted.
Under this Alternative Formula, Mr. Williams would be entitled upon retirement
to receive an annual benefit equal to 65% of his highest annual salary during
the last five years 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
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<PAGE> 29
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 Alternative Formula are less than those benefits he would receive under the
normal benefit formula of the Supplemental Pension Plan.
Broad-Based Pension Plan. The Company also maintains a qualified
defined benefit plan (the "Qualified Plan") pursuant to which all Company
employees (including officers) who have completed at least five years of service
are generally entitled to receive payments upon attaining early or normal
retirement age under the plan. The Company further maintains a companion non-
qualified defined benefit plan (the "Non-Qualified Plan") designed to pay
supplemental retirement benefits to officers in amounts equal to the benefits
that such officers would otherwise forego under the Qualified Plan due to
federal limitations on the amount of benefits payable to highly compensated
participants of qualified plans.
The following table reflects the total annual retirement benefits that
a participant with the indicated years of service and annual compensation level
may expect to receive under the Qualified and Non-Qualified Plans (collectively,
the "Broad-Based Pension Plan") assuming retirement at age 65. Upon attaining
age 55, participants with at least five years of service may elect to receive
reduced early retirement benefits.
<TABLE>
<CAPTION>
Years of Service
--------------------------------------------------------------
Compensation 5 10 15 20 25 30
- ------------ ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 400,000 $20,000 $ 40,000 $ 60,000 $ 80,000 $100,000 $120,000
500,000 25,000 50,000 75,000 100,000 125,000 150,000
600,000 30,000 60,000 90,000 120,000 150,000 180,000
700,000 35,000 70,000 105,000 140,000 175,000 210,000
800,000 40,000 80,000 120,000 160,000 200,000 240,000
900,000 45,000 90,000 135,000 180,000 225,000 270,000
1,000,000 50,000 100,000 150,000 200,000 250,000 300,000
1,100,000 55,000 110,000 165,000 220,000 275,000 330,000
1,200,000 60,000 120,000 180,000 240,000 300,000 360,000
</TABLE>
The above table reflects the total annual benefits payable under the
Broad-Based Pension 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 actual amount of a participant's total
monthly payment is equal to his number of years of service (up to a maximum of
30 years) multiplied by the difference between 1.0% of his average monthly
compensation during the 60-month period within his last ten years of employment
in which he received his highest compensation and 0.5% of his estimated monthly
Social Security benefits.
Under the Broad-Based Pension Plan, each executive officer began to
receive credit for years of service on January 1, 1999. The compensation upon
which benefits are based under such plan is the aggregate amount reported for
each respective officer under the columns in the Summary
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<PAGE> 30
Compensation Table appearing above that are entitled "Salary," "Bonus" and
"Restricted Stock Awards" (other than compensation included under the "Bonus"
column relating to the Company's special bonuses or included under the
"Restricted Stock Awards" column relating to the Time- Vested Restricted Shares
awarded as a component of long-term incentive compensation).
EMPLOYMENT CONTRACT WITH CHAIRMAN AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company has an employment agreement with Clark M. 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 has lapsed but the
agreement remains in effect from year to year, subject to the right of Mr.
Williams or the Company to terminate the agreement. If Mr. Williams is
terminated without cause or resigns under certain specified circumstances,
including following any change in control of the Company, he will be entitled to
receive certain severance benefits, including (i) a lump sum cash payment equal
to three times the sum of his annual salary and bonus, (ii) any such additional
cash payments as may be necessary to compensate him for any federal excise taxes
imposed upon contingent change in control payments, (iii) continued
participation in the Company's welfare benefit plans for three years and (iv)
continued use of the Company's aircraft for one year on terms comparable to
those previously in effect.
The Company also has agreements with each of its executive officers
(other than Mr. Williams) which entitle any such officer who is terminated
without cause or resigns under certain specified circumstances within three
years of any change in control of the Company to (i) receive a lump sum cash
severance payment equal to three times the sum of such officer's annual salary
and bonus, (ii) receive any such additional cash payments as may be necessary to
compensate him for any federal excise taxes imposed upon contingent change in
control payments, and (iii) continue to receive certain welfare benefits for
three years.
Under the above-referenced agreements, a "change in control" of the
Company would be deemed to occur upon (i) any person (as defined in the
Securities Exchange Act of 1934) becoming the beneficial owner of 30% or more of
the outstanding Common Shares or 30% or more of combined voting power of the
Company's voting securities, (ii) a majority of the Company's directors being
replaced, (iii) consummation of certain mergers, substantial asset sales or
similar business combinations, or (iv) approval by the shareholders of a
liquidation or dissolution of the Company.
In the event of a change in control of the Company, the Company's
benefit plans provide, among other things, that all restrictions on outstanding
time-vested and performance-based restricted stock will lapse, all outstanding
stock options will become fully exercisable, all performance shares will be
earned, phantom stock units credited under the Company's supplemental defined
contribution plan will be converted into cash and held in trust, and
post-retirement health and life insurance benefits will vest with respect to
certain current and former employees. In addition, participants in the
Supplemental Pension Plan who are terminated without cause or resign under
certain specified
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<PAGE> 31
circumstances within three years of the change in control will receive a cash
payment equal to the present value of their plan benefits (after providing age
and service credits of up to three years), determined in accordance with
actuarial assumptions specified in the plan.
PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Common Shares for the last five years with the cumulative total return of the
S&P 500 Index, the S&P 500 Telephone Index (the "S&P Telecom Index") and the
peer group of companies against which the Company compared its performance in
its last several proxy statements (the "Predecessor Peer Group"), in each case
assuming (i) the investment of $100 on January 1, 1995 at closing prices on
December 31, 1994 and (ii) reinvestment of dividends.
[INSERT GRAPH HERE]
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
CenturyTel $100.00 $108.82 $107.00 $174.44 $356.57 $376.99
S&P 500 Index $100.00 $137.50 $169.47 $226.03 $290.22 $349.08
S&P Telecom Index (1) $100.00 $143.45 $143.50 $198.99 $291.18 $306.65
Predecessor Peer Group (2) $100.00 $137.92 $148.13 $179.52 $239.74 $294.43
</TABLE>
- -----------------
(1) Consists of ALLTEL Corporation, Bell Atlantic Corporation, BellSouth
Corporation, GTE Corporation, SBC Communications Inc., US West, Inc.
and the Company, and is publicly available.
(2) Consists of ALLTEL Corporation, Cincinnati Bell, Inc., Citizens
Utilities Company, COMSAT Corporation, GTE Corporation, Telephone &
Data Systems, Inc., and the Company. The cumulative total stockholder
return of the Predecessor Peer Group also reflects the performance of
The Southern New England Telephone Company through the date of its
acquisition in 1998 and the performance of Aliant Communications, Inc.
and Frontier Corporation through the respective dates of their
acquisitions in 1999. In future years, the Company intends to measure
its performance against the S&P Telecom Index, in lieu of the
Predecessor Peer Group. The Company believes the S&P Telecom Index is
comprised of companies whose businesses and integrated service
offerings better match those of the Company.
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<PAGE> 32
CERTAIN TRANSACTIONS
The Company paid approximately $1,233,000 to The Boles Law Firm for
legal services rendered to the Company in 1999. William R. Boles, Jr., a
director of the Company since 1992, is President and a director and practicing
attorney with such firm, which has provided legal services to the Company since
1968.
The Company paid approximately $51,000 to Phelps Dunbar, L.L.P. for
legal services rendered to the Company in 1999. Virginia Boulet, a director of
the Company since 1995, is a partner in such firm.
During 1999, the Company paid approximately $716,000 to a real estate
firm owned by the brother of Harvey P. Perry, the Company's Executive Vice
President, Chief Administrative Officer, General Counsel and Secretary. 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 82 of its wireless tower sites in several states,
including locating and analyzing properties suitable for acquisition as wireless
tower sites, negotiating purchase terms with the land owners, and subleasing
wireless tower space.
During 1999, the Company purchased approximately $419,000 of electrical
contracting services from a firm owned by the wife and son of Johnny Hebert, a
director of the Company.
During 1999, the Company purchased approximately $65,000 of maintenance
services and other related aviation support services from Legacy Aviation, Inc.,
which has provided services to the Company since 1987. In 1995, Clarke M.
Williams, the Company's Chairman of the Board, purchased Legacy Aviation, Inc.
from unaffiliated parties.
During 1999, the Company paid in the ordinary course of business
approximately $64,000 for automobiles, computers and certain services from
companies owned and operated by Calvin Czeschin and his family. Mr. Czeschin is
a director of the Company.
During 1999, the Company purchased cleaning and groundskeeping services
from Richard O. Lee in exchange for approximately $77,000, a substantial portion
of which Mr. Lee used to compensate his assistants. Mr. Lee is the
brother-in-law of Glen F. Post, III, the Company's Vice Chairman, President and
Chief Executive Officer.
During 1999, the Company paid Steve Daigle approximately $101,000 in
salary and bonus for serving as Vice President - Product Management. Mr. Daigle
is the son-in-law of Jim D. Reppond, a director of the Company, and has been an
employee of the Company for five years.
In 2000, the Company expects to pay Martha Amman approximately $67,000
in salary and bonus (assuming that performance targets are attained) for serving
as Director of Field Human Resources. Ms. Amman is the sister of Harvey P.
Perry, the Company's Executive Vice President, Chief Administrative Officer,
General Counsel and Secretary, and has been an employee of the Company for two
years.
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<PAGE> 33
In 2000, the Company expects to pay Rhonda Woodard approximately
$66,000 in salary and bonus (assuming that performance targets are attained) for
serving as Director of Customer Service Centers. Ms. Woodard is the
sister-in-law of David Cole, an executive officer of the Company, and has been
an employee of the Company for eight years.
For further information, see "Compensation Committee Interlocks and
Insider Participation."
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Securities Exchange Act of 1934 requires the Company's executive
officers and directors, among others, to file certain beneficial ownership
reports with the SEC. During 1999, each of C. G. Melville, Jr., a director of
the Company, and Harvey P. Perry, a director and executive officer of the
Company, was inadvertently late in filing a statement of changes in beneficial
ownership for one transaction.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
KPMG LLP, independent certified public accountants for the Company for
1999, has been selected by the Board to serve again in that capacity for 2000. A
representative of such firm is expected to attend the Meeting and will be
available to respond to appropriate questions.
OTHER MATTERS
QUORUM AND VOTING OF PROXIES
The presence, in person or by proxy, of a majority of the total voting
power of the Voting Shares is necessary to constitute a quorum to organize the
Meeting. Shareholders voting or abstaining from voting on any issue will be
counted as present for purposes of constituting 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, 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 Company's
2000 Incentive Compensation Plan (the "Incentive Plan Proposal"). Shares as to
which the proxy holders have been instructed to abstain from voting will not be
treated as present and will therefore not affect the outcome of the vote.
Under the rules of the New York Stock Exchange, brokers who hold shares
in street name for customers may vote in their discretion on each matter
expected to come before the Meeting when they have not received voting
instructions from beneficial owners. If brokers who do not receive voting
instructions do not exercise such discretionary voting power (a "broker
non-vote"), shares that are not voted will be treated as present for purposes of
constituting a quorum to organize the Meeting but not present with respect to
the election of directors or the approval of the Incentive Plan Proposal.
Because the election of directors must be approved by plurality vote and the
Incentive
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<PAGE> 34
Plan Proposal must be approved by a majority of the voting power present or
represented at the Meeting, broker non-votes with respect to these matters will
not affect the outcome of the voting.
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, all properly
executed proxies will be voted as specified and, if no specifications are made,
will be voted in favor of the proposed nominees and the Incentive Plan Proposal.
Management has not timely received any notice that a shareholder
desires to present any matter for action at the Meeting in accordance with the
Company's advance notification bylaw (which is described below), and is
otherwise unaware of any matter for action by shareholders at the Meeting other
than the election of directors and the Incentive Plan Proposal. The enclosed
proxy and voting instruction cards, however, will confer discretionary voting
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
In order to be eligible for inclusion in the Company's 2001 proxy
materials pursuant to the federal proxy rules, any shareholder proposal to take
action at such meeting must be received at the Company's principal executive
offices by November 23, 2000. In addition, the Company's advance notification
bylaw provides that shareholders intending to nominate a director or bring any
other matter before a shareholders' meeting must furnish timely written notice.
In general, notice must be received by the Secretary of the Company between
November 12, 2000 and February 10, 2001 and must contain specified information
concerning, among other things, the matters to be brought before such meeting
and concerning the shareholder proposing such matters. (If the date of the 2001
annual meeting is more than 30 days earlier or later than May 11, 2001, notice
must be received by the Secretary of the Company 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.) The Company will be permitted to
disregard any nomination or submission of any other matter that fails to comply
with these bylaw procedures, and, in any event, the persons to be named in the
proxies solicited in connection with the 2001 annual meeting will have
discretionary voting authority with respect to any nomination or other matter
submitted untimely.
By Order of the Board of Directors
/s/ HARVEY P. PERRY
Harvey P. Perry
Secretary
Dated: March 20, 2000
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<PAGE> 35
EXHIBIT A
TO PROXY STATEMENT
CENTURYTEL, INC.
2000 INCENTIVE COMPENSATION PLAN
1. PURPOSE. The purpose of the 2000 Incentive Compensation Plan (this
"Plan") of CenturyTel, Inc. ("CenturyTel") is to increase shareholder value and
to advance the interests of CenturyTel and its subsidiaries (collectively, the
"Company") by furnishing a variety of equity incentives (the "Incentives")
designed to attract, retain and motivate officers, key employees, consultants
and advisors and to strengthen the mutuality of interests between such persons
and CenturyTel's shareholders. Incentives may consist of options to purchase
shares of CenturyTel's common stock, $1.00 par value per share (the "Common
Stock"), shares of restricted stock or other stock-based awards the value of
which is based upon the value of the Common Stock, all on terms determined under
this Plan. As used in this Plan, the term "subsidiary" means any corporation,
limited liability company or other entity of which CenturyTel 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, membership interests or other equity interests issued
thereby.
2. ADMINISTRATION.
2.1 COMPOSITION. This Plan shall be administered by the
compensation committee of the Board of Directors of CenturyTel, or by a
subcommittee of the compensation committee. The committee or
subcommittee that administers this 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 "non-employee director" under Rule 16b-3 under the Securities
Exchange Act of 1934 (the "1934 Act"), or any successor rule, and (b)
qualify as an "outside director" under Section 162(m) of the Code and
the regulations thereunder (collectively, "Section 162(m)").
2.2 AUTHORITY. The Committee shall have authority to award
Incentives under this Plan, to interpret this Plan, to establish any
rules or regulations relating to this Plan that it determines to be
appropriate, to enter into agreements with or provide notices to
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 this Plan. Its
decisions concerning matters relating to this Plan shall be final,
conclusive and binding 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 this Plan to directors in their capacities as such.
3. ELIGIBLE PARTICIPANTS. Key employees and officers of the Company
(including officers who also serve as directors of the Company) and consultants
and advisors to the Company shall become eligible to receive Incentives under
this Plan when designated by the Committee. Employees may be designated
individually or by groups or categories, as the Committee deems
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appropriate. With respect to participants not subject to Section 16 of the 1934
Act or Section 162(m), the Committee may delegate to appropriate personnel of
the Company its authority to designate participants, to determine the size, type
and terms of the Incentives to be received by those participants and to
determine any performance objectives for those participants. Any such delegation
by the Committee shall not include the authority to change or modify in any way
the terms of a previously granted Incentive or to take any other action
authorized herein to be taken by the Committee and not specifically permitted to
be delegated in this Section 3.
4. SHARES SUBJECT TO THIS PLAN. The shares of Common Stock with respect
to which Incentives may be granted under this Plan shall be subject to the
following:
4.1 TYPE OF COMMON STOCK. The shares of Common Stock with
respect to which Incentives may be granted under this Plan shall be
currently authorized but unissued shares or shares currently held or
subsequently acquired by the Company as treasury shares, including
shares purchased in the open market or in private transactions.
4.2 MAXIMUM NUMBER OF SHARES. Subject to the other provisions
of this Section 4, the maximum number of shares of Common Stock that
may be delivered to participants and their beneficiaries under this
Plan shall be 4,000,000 shares of Common Stock.
4.3 SHARE COUNTING. To the extent any shares of Common Stock
covered by an Incentive are not delivered to a participant or
beneficiary because the Incentive is forfeited or canceled, or the
shares of Common Stock are not delivered because the Incentive is paid
or settled in cash or used to satisfy the applicable tax withholding
obligation, such shares shall not be deemed to have been delivered for
purposes of determining the maximum number of shares of Common Stock
available for delivery under this Plan. In the event that shares of
Common Stock are issued as Incentives 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
this Plan. If the exercise price of any stock option granted under this
Plan is satisfied by tendering shares of Common Stock to the Company
(by either actual delivery or by attestation), only the number of
shares of Common Stock issued net of the shares of Common Stock
tendered shall be deemed delivered for purposes of determining the
maximum number of shares of Common Stock available for delivery under
this Plan.
4.4 LIMITATIONS ON NUMBER OF SHARES. Subject to Section 4.5,
the following additional limitations are imposed under this Plan:
(a) The maximum number of shares of Common Stock that
may be issued upon exercise of stock options intended to
qualify as incentive stock options under Section 422 of the
Code shall be 4,000,000 shares. Notwithstanding any other
provision herein to the contrary, (i) all shares issuable
under incentive stock options shall be counted against this
limit and (ii) shares that are issued and are later forfeited,
cancelled or reacquired by the Company, shares withheld to
satisfy
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withholding tax obligations and shares delivered in payment of
the Incentive price shall have no effect on this limitation.
(b) The maximum number of shares of Common Stock that
may be covered by Incentives granted under this Plan to any
one individual during any one calendar-year period shall be
600,000.
(c) The maximum number of shares of Common Stock that
may be issued as restricted stock or Other Stock-Based Awards
(as defined below) shall be 500,000 shares.
(d) If, after shares have been earned under an
Incentive, the delivery is deferred, any additional shares
attributable to dividends paid during the deferral period
shall be disregarded for purposes of the limitations of this
Section 4.
4.5 ADJUSTMENT. In the event of any recapitalization,
reclassification, stock dividend, stock split, combination of shares or
other change in the Common Stock, all limitations on numbers of shares
of Common Stock provided in this Section 4 and the number of shares of
Common Stock subject to outstanding Incentives shall be adjusted in
proportion to the change in outstanding shares of Common Stock. In
addition, in the event of any such change in the Common Stock, the
Committee shall make any other adjustment that it determines to be
equitable, including without limitation adjustments to the exercise
price of any option and any per share performance objectives of any
Incentive in order to provide participants with the same relative
rights before and after such adjustment.
5. STOCK OPTIONS. The Committee may grant incentive stock options (as
such term is defined in Section 422 of the Code) 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:
5.1 PRICE. The exercise price per share shall be determined by
the Committee, subject to adjustment under Section 4.5; provided that
in no event shall the exercise price be less than the Fair Market Value
(as defined below) of a share of Common Stock on the date of grant,
except in the case of a stock option granted in assumption of or in
substitution for an outstanding award of a company acquired by the
Company or with which the Company combines.
5.2 NUMBER. The number of shares of Common Stock subject to
the option shall be determined by the Committee, subject to the
limitations and adjustments provided in Section 4 hereof.
5.3 DURATION AND TIME FOR EXERCISE. Subject to earlier
termination as provided in Section 8.4 and 8.13, the term of each stock
option shall be determined by the Committee. Each stock option shall
become exercisable at such time or times during its term as shall be
determined by the Committee. The Committee may accelerate the
exercisability of any stock option at any time.
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5.4 REPURCHASE. Upon approval of the Committee, the Company
may repurchase all or a portion of a previously granted stock option
from a participant by mutual agreement before such option has been
exercised by payment to the participant of cash or Common Stock or a
combination thereof with a value equal to the amount per share by
which: (a) the Fair Market Value of the Common Stock subject to the
option on the business day immediately preceding the date of purchase
exceeds (b) the exercise price.
5.5 MANNER OF EXERCISE. A stock option may be exercised, 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 tender of the full purchase price for
such shares, which may be paid or satisfied by (a) cash; (b) check; (c)
delivery of shares of Common Stock, 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 and, unless otherwise
determined by the Committee, shall have been held by the optionee for
at least six months; (d) delivery of irrevocable written instructions
to a broker approved by the Company (with a copy to the Company) to
immediately sell a portion of the shares issuable under the option and
to deliver promptly to the Company the amount of sale proceeds (or loan
proceeds if the broker lends funds to the participant for delivery to
the Company) to pay the exercise price; or (e) in such other manner as
may be authorized from time to time by the Committee, provided that all
such payments shall be made or denominated in United States dollars. In
the case of delivery of an uncertified check, no shares shall be issued
until the check has been paid in full. In the case of delivery of
irrevocable instructions to a broker as permitted above, any shares
sold in order to finance the payment of the exercise price shall be
deemed to be validly issued in exchange for services previously
rendered. 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.
5.6 REPRICING. Except for adjustments pursuant to Section 4.5,
unless approved by the shareholders of the Company, the exercise price
for any outstanding option granted under this Plan may not be decreased
after the date of grant nor may an outstanding option granted under
this Plan be surrendered to the Company as consideration for the grant
of a new option with a lower exercise price.
5.7 INCENTIVE STOCK OPTIONS. Notwithstanding anything in this
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.
(a) Any incentive stock option authorized under this
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 was adopted
by the Board of Directors;
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(c) Unless sooner exercised, all incentive stock
options shall expire no later than ten years after the date of
grant;
(d) No incentive stock option 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; and
(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 this Plan or any other plan of the Company) 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.
5.8 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. The grant of such additional options under this Section 5.8
shall be made upon such other terms and conditions as the Committee may
from time to time determine.
6. RESTRICTED STOCK.
6.1 GRANT OF RESTRICTED STOCK. 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 this Plan. To the extent restricted stock is intended
to qualify as performance based compensation under Section 162(m), it
must meet the additional requirements imposed thereby.
6.2 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. Unless otherwise provided in
the Incentive Agreement, the Committee may in its discretion declare
the Restricted Period terminated upon a participant's death,
disability, retirement or other termination by the Company and permit
the sale or transfer of the restricted stock. The
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expiration of the Restricted Period shall also occur as provided under
Section 8.13 upon a Change of Control of the Company.
6.3 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 is subject to the terms and
conditions (including conditions of forfeiture) contained in
the CenturyTel, Inc. 2000 Incentive Compensation Plan (the
"Plan") and an agreement entered into between the registered
owner and CenturyTel, Inc. thereunder. Copies of this Plan and
the agreement are on file and available for inspection at the
principal office of the Company.
6.4 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.
6.5 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 4.5 due to a recapitalization, stock split or other change in
capitalization.
6.6 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 6.2 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 other
than those required by law, to the participant or the participant's
estate, as the case may be.
6.7 RIGHTS AS A SHAREHOLDER. Subject to the restrictions
imposed under the terms and conditions of this Plan and subject to any
other restrictions 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 Common 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.
6.8 PERFORMANCE-BASED RESTRICTED STOCK. Any grant of
restricted stock that is intended to qualify as "performance-based
compensation" under Section 162(m) shall be
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conditioned on the achievement of one or more performance measures. The
performance measures pursuant to which the restricted stock shall vest
shall be any or a combination of the following measures applied to the
Company, a subsidiary or a division: earnings per share, return on
assets, an economic value added measure, shareholder return, earnings,
return on equity, return on investment, cash provided by operating
activities, increase in cash flow, increase in revenues or customer
growth. For any performance period, such performance objectives may be
measured on an absolute basis or relative to a group of peer companies
selected by the Committee, relative to internal goals or relative to
levels attained in prior years. For grants of restricted stock intended
to qualify as "performance-based compensation," the grants of
restricted stock and the establishment of performance measures shall be
made during the period required under Section 162(m).
7. OTHER STOCK-BASED AWARDS.
7.1 GRANT OF OTHER STOCK-BASED AWARDS. The Committee may grant
to eligible participants "Other Stock-Based Awards," which shall
consist of awards, other than options or restricted stock provided for
in Sections 5 and 6, the value of which is based in whole or in part on
the value of shares of Common Stock. Other Stock-Based Awards may be
awards of shares of Common Stock or may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or
related to, shares of, or appreciation in the value of, Common Stock
(including, without limitation, securities convertible or exchangeable
into or exercisable for shares of Common Stock), as deemed by the
Committee consistent with the purposes of this Plan. The Committee
shall determine the terms and conditions of any Other Stock-Based Award
(including which rights of a shareholder, if any, the recipient shall
have with respect to Common Stock associated with any such award) and
may provide that such award is payable in whole or in part in cash. An
Other Stock-Based Award may be subject to the attainment of such
specified performance goals or targets as the Committee may determine,
subject to the provisions of this Plan. To the extent that an Other
Stock- Based Award is intended to qualify as "performance-based
compensation" under Section 162(m), it must meet the additional
requirements imposed thereby.
7.2 PERFORMANCE-BASED OTHER STOCK-BASED AWARDS. Any grant of
an Other Stock-Based Award that is intended to qualify as
"performance-based compensation" under Section 162(m) shall be
conditioned on the achievement of one or more performance measures. The
performance measures pursuant to which the Other Stock-Based Award
shall vest shall be any or a combination of the following measures
applied to the Company, a subsidiary or a division: earnings per share,
return on assets, an economic value added measure, stockholder return,
earnings, return on equity, return on investment, cash provided by
operating activities, increase in cash flow, increase in revenues or
customer growth. For any performance period, such performance
objectives may be measured on an absolute basis or relative to a group
of peer companies selected by the Committee, relative to internal goals
or relative to levels attained in prior years. For grants of Other
Stock-Based Awards intended to qualify as "performance-based
compensation," the grants of Other Stock-Based Awards and the
establishment of performance measures shall be made during the period
required under Section 162(m).
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8. GENERAL.
8.1 DURATION. Subject to Section 8.10, this Plan shall remain
in effect until all Incentives granted under this 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 this Plan or the applicable
Incentive Agreement and all restrictions imposed on shares of Common
Stock in connection with their issuance under this Plan have lapsed.
8.2 TRANSFERABILITY OF INCENTIVES. No Incentive granted
hereunder may be transferred, pledged, assigned or otherwise encumbered
by the holder thereof except:
(a) by will;
(b) by the laws of descent and distribution;
(c) pursuant to a domestic relations order, as
defined in the Code; or
(d) in the case of stock options only, if permitted
by the Committee and so provided in the Incentive Agreement or
an amendment thereto, (i) to Immediate Family Members, (ii) to
a partnership in which Immediate Family Members, or entities
in which Immediate Family Members are the sole owners, members
or beneficiaries, as appropriate, are the only partners, (iii)
to a limited liability company in which Immediate Family
Members, or entities in which Immediate Family Members are the
sole owners, members or beneficiaries, as appropriate, are the
only members, or (iv) to a trust for the sole benefit of
Immediate Family Members. "Immediate Family Members" means the
spouse and natural or adopted children or grandchildren of the
participant and their respective spouses. To the extent that
an incentive stock option is permitted to be transferred
during the lifetime of the participant, it shall be treated
thereafter as a non-qualified stock option.
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.
8.3 DIVIDEND EQUIVALENTS. In the sole and complete discretion
of the Committee, an Incentive may provide the holder thereof with
dividends or dividend equivalents, payable in cash, shares, other
securities or other property on a current or deferred basis.
8.4 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 and set forth in
the Incentive Agreement.
8.5 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
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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
restrictions 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.
8.6 INCENTIVE AGREEMENTS. An Incentive under this Plan shall
be subject to such terms and conditions, not inconsistent with this
Plan, as the Committee may, in its sole discretion, prescribe and set
forth in the Incentive Agreement. Such terms and conditions may provide
for the forfeiture of an Incentive or the gain associated with an
Incentive under certain circumstances to be set forth in the Incentive
Agreement, including if the participant competes with the Company or
engages in other activities that are harmful to the Company. All terms
and conditions of any Incentive shall be reflected in such form of
Incentive Agreement as is determined by the Committee. A copy of such
document shall be provided to the participant, and the Committee may,
but need not, require that the participant sign a copy of such
document. Such document is referred to in this Plan as an "Incentive
Agreement" regardless of whether a participant's signature is required.
8.7 WITHHOLDING.
(a) The Company shall have the right to withhold from
any payments or stock issuances under this Plan, or to collect
as a condition of payment, any taxes required by law to be
withheld.
(b) Any participant may, but is not required to,
satisfy his or her withholding tax obligation in whole or in
part by electing (the "Election") to have the Company withhold
from the shares the participant otherwise would receive shares
of Common Stock having a value equal to the minimum amount
required to be withheld. The value of the shares to be
withheld shall be based on the Fair Market Value of the Common
Stock on the date that the amount of tax to be withheld shall
be determined (the "Tax Date"). Each Election must be made
prior to the Tax Date. The Committee may disapprove of any
Election, may suspend or terminate the right to make
Elections, or may provide with respect to any Incentive that
the right to make Elections shall not apply to such Incentive.
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8.8 NO CONTINUED EMPLOYMENT. No participant under this Plan
shall have any right, because of his or her participation, 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.
8.9 DEFERRAL PERMITTED. Payment of cash or distribution 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.
8.10 AMENDMENT OR DISCONTINUANCE OF THIS PLAN. The Board may
amend or discontinue this Plan at any time; provided, however, that no
such amendment may:
(a) without the approval of the shareholders, (i)
increase, subject to adjustments permitted herein, the maximum
number of shares of Common Stock that may be issued through
this Plan, (ii) materially increase the benefits accruing to
participants under this Plan, (iii) materially expand the
classes of persons eligible to participate in this Plan, or
(iv) amend Section 5.6 to permit repricing of options, or
(b) materially impair, without the consent of the
recipient, an Incentive previously granted, except that the
Company retains all rights under Section 8.13 hereof.
8.11 DEFINITION OF FAIR MARKET VALUE. Whenever the "Fair
Market Value" of Common Stock or some other specified security must be
determined for purposes of this Plan, it shall be determined as
follows: (i) if the Common Stock or other security is listed on an
established stock exchange or any automated quotation system that
provides sale quotations, the closing sale price for a share thereof on
such exchange or quotation system on the applicable date and if shares
are not traded on such day, on the next preceding trading date, (ii) if
the Common Stock or other security 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 or other security is not regularly quoted, the fair market
value of a share thereof on the applicable date as established by the
Committee in good faith.
8.12 LOANS. In order to assist a participant in acquiring
shares of Common Stock pursuant to an Incentive granted under this
Plan, the Committee may authorize, 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 this 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 aggregate purchase price of the shares of Common
Stock to be acquired pursuant to the Incentive plus the maximum tax
liability that may be incurred in connection with the Incentive.
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8.13 CHANGE OF CONTROL. (a) A Change of Control shall mean:
(i) the acquisition by any person of
beneficial ownership of 30% or more of the
outstanding shares of the Common Stock or 30% or more
of the combined voting power of CenturyTel's then
outstanding securities entitled to vote generally in
the election of directors; provided, however, that
for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of
Control:
(A) any acquisition (other than a
Business Combination (as defined below)
which constitutes a Change of Control under
Section 8.13(a)(iii) hereof) of Common Stock
directly from the Company,
(B) any acquisition of Common Stock
by the Company,
(C) any acquisition of Common Stock
by any employee benefit plan (or related
trust) sponsored or maintained by the
Company or any corporation controlled by the
Company, or
(D) any acquisition of Common Stock
by any corporation pursuant to a Business
Combination that does not constitute a
Change of Control under Section 8.13(a)(iii)
hereof; or
(ii) individuals who, as of January 1, 2000,
constituted the Board of Directors of CenturyTel (the
"Incumbent Board") cease for any reason to constitute
at least a majority of the Board of Directors;
provided, however, that any individual becoming a
director subsequent to such date whose election, or
nomination for election by CenturyTel's shareholders,
was approved by a vote of at least two-thirds of the
directors then comprising the Incumbent Board shall
be considered a member of the Incumbent Board, unless
such individual's initial assumption of office occurs
as a result of an actual or threatened election
contest with respect to the election or removal of
directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a person
other than the Incumbent Board; or
(iii) consummation of a reorganization,
share exchange, merger or consolidation (including
any such transaction involving any direct or indirect
subsidiary of CenturyTel) or sale or other
disposition of all or substantially all of the assets
of the Company (a "Business Combination"); provided,
however, that in no such case shall any such
transaction constitute a Change of Control if
immediately following such Business Combination:
(A) the individuals and entities
who were the beneficial owners of
CenturyTel's outstanding Common Stock and
CenturyTel's voting securities entitled to
vote generally in the
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<PAGE> 46
election of directors immediately prior to
such Business Combination have direct or
indirect beneficial ownership, respectively,
of more than 50% of the then outstanding
shares of common stock, and more than 50% of
the combined voting power of the then
outstanding voting securities entitled to
vote generally in the election of directors
of the surviving or successor corporation,
or, if applicable, the ultimate parent
company thereof (the "Post-Transaction
Corporation"), and
(B) except to the extent that such
ownership existed prior to the Business
Combination, no person (excluding the Post-
Transaction Corporation and any employee
benefit plan or related trust of either
CenturyTel, the Post-Transaction Corporation
or any subsidiary of either corporation)
beneficially owns, directly or indirectly,
20% or more of the then outstanding shares
of common stock of the corporation resulting
from such Business Combination or 20% or
more of the combined voting power of the
then outstanding voting securities of such
corporation, and
(C) at least a majority of the
members of the board of directors of the
Post-Transaction Corporation were members of
the Incumbent Board at the time of the
execution of the initial agreement, or of
the action of the Board of Directors,
providing for such Business Combination; or
(iv) approval by the shareholders of
CenturyTel of a complete liquidation or dissolution
of CenturyTel.
For purposes of this Section 8.13, the term "person" shall
mean a natural person or entity, and shall also mean the group
or syndicate created when two or more persons act as a
syndicate or other group (including, without limitation, a
partnership or limited partnership) for the purpose of
acquiring, holding, or disposing of a security, except that
"person" shall not include an underwriter temporarily holding
a security pursuant to an offering of the security.
(b) Upon a Change of Control of the type described in
clause (a)(i) or (a)(ii) of this Section 8.13 or upon the
approval by the Board of Directors of CenturyTel of any Change
of Control of the type described in clause (a)(iii) or (a)(iv)
of this Section 8.13, all outstanding Incentives granted
pursuant to this Plan shall automatically become fully vested
and exercisable, all restrictions or limitations on any
Incentives shall automatically lapse and, unless otherwise
provided in the applicable Incentive Agreement, all
performance criteria and other conditions relating to the
payment of Incentives shall be deemed to be achieved or waived
by CenturyTel without the necessity of action by any person.
A-12
<PAGE> 47
(c) No later than 30 days after a Change of Control
of the type described in subsections (a)(i) or (a)(ii) of this
Section 8.13 and no later than 30 days after the approval by
the Board of a Change of Control of the type described in
subsections (a)(iii) or (a)(iv) of this Section 8.13, 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 alternatives listed below, which may vary
among individual participants and which may vary among
Incentives held by any individual participant:
(i) require that all outstanding options or
Other Stock-Based Awards be exercised on or before a
specified date (before or after such Change of
Control) fixed by the Committee, after which
specified date all unexercised options and Other
Stock-Based Awards and all rights of participants
thereunder shall terminate,
(ii) make such equitable adjustments to
Incentives then outstanding as the Committee deems
appropriate to reflect such Change of Control
(provided, however, that the Committee may determine
in its sole discretion that no adjustment is
necessary),
(iii) provide for mandatory conversion of
some or all of the outstanding options or Other
Stock-Based Awards held by some or all participants
as of a date, before or after such Change of Control,
specified by the Committee, in which event such
options and Other Stock-Based Awards 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 Other Stock-Based Award, as defined and
calculated below, over the exercise price of such
options or the exercise or base price of such Other
Stock-Based Awards or, in lieu of such cash payment,
the issuance of Common Stock or securities of an
acquiring entity having a Fair Market Value equal to
such excess, or
(iv) provide that thereafter, upon any
exercise of an option or Other Stock-Based Award that
entitles the holder to receive Common Stock, the
holder shall be entitled to purchase or receive under
such option or Other Stock-Based Award, in lieu of
the number of shares of Common Stock then covered by
such option or Other Stock-Based Award, the number
and class of shares of stock or other securities or
property (including, without limitation, cash) to
which the holder would have been entitled pursuant to
the terms of the agreement providing for the
reorganization, share exchange, merger, consolidation
or asset sale, if, immediately prior to such Change
of Control, the holder had been the record owner of
the number of shares of Common Stock then covered by
such option or Other Stock-Based Award.
A-13
<PAGE> 48
(d) For the purposes of paragraph (iii) of Section
8.13(c), the "Change of Control Value" shall equal the amount
determined by whichever of the following items is applicable:
(i) the per share price to be paid to
shareholders of CenturyTel in any such merger,
consolidation or other reorganization,
(ii) the price per share offered to
shareholders of CenturyTel in any tender offer or
exchange offer whereby a Change of Control takes
place,
(iii) in all other events, the fair market
value per share of Common Stock into which such
options being converted are exercisable, as
determined by the Committee as of the date determined
by the Committee to be the date of conversion of such
options, or
(iv) in the event that the consideration
offered to shareholders of CenturyTel in any
transaction described in this Section 8.13 consists
of anything other than cash, the Committee shall
determine the fair cash equivalent of the portion of
the consideration offered that is other than cash.
* * * * * * * * * *
Approved by the Board of Directors: February 22, 2000
A-14
<PAGE> 49
CENTURYTEL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
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 CenturyTel, 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, 2000, and at any and all adjournments thereof (the
"Meeting").
The Board of Directors recommends that you vote FOR the nominees and the
proposal listed on the reverse side hereof. In addition to serving as a Proxy,
this card will also serve as instructions to Harris Trust & Savings Bank (the
"Agent") to cast in the manner designated on the reverse side hereof the number
of votes allocable to the undersigned that are attributable to all shares of the
Company's common stock held in the name of the Agent and credited to the
dividend reinvestment plan account of the undersigned as of March 13, 2000, in
accordance with the provisions of the Company's dividend reinvestment plan. Upon
timely receipt of this Proxy, properly executed, all of the votes attributable
to your Voting Shares, including those Voting Shares held in the name of the
Agent, will be voted as specified. If this Proxy is properly executed but no
specific directions are given, all of your votes will be voted for the nominees
and the proposal.
(Please See Reverse Side)
<TABLE>
<S> <C> <C> <C> <C> <C>
1. To elect four Class III Directors.
FOR [ ] all nominees listed below (except as WITHHOLD AUTHORITY [ ] to vote for all nominees
marked to the contrary below) listed below
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST
BELOW:
Calvin Czeschin/F. Earl Hogan/Harvey P. Perry/Jim D. Reppond
2. To approve the Company's 2000 Incentive Compensation Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion to vote upon such other business as may properly come before the Meeting.
2000
---------------, -------------------------------------------
DATE NAME (PLEASE PRINT)
Please sign exactly as name appears on the certificate
or certificates representing shares to be voted by this
-------------------------------------------------------------------- proxy. When signing as executor, administrator,
SIGNATURE 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
ADDITIONAL SIGNATURE (IF JOINTLY HELD) authorized persons.
</TABLE>
<PAGE> 50
CENTURYTEL, INC.
VOTING INSTRUCTIONS
The undersigned (i) acting as a "named fiduciary" of the CenturyTel, Inc.
Stock Bonus Plan, PAYSOP and Trust, as amended (the "Stock Bonus Plan"), and
Employee Stock Ownership Plan and Trust, as amended (the "ESOP"), hereby
instructs Regions Bank (the "Trustee"), as trustee of the Stock Bonus Plan and
ESOP, to attend the annual meeting of shareholders of CenturyTel, Inc. (the
"Company") to be held on May 11, 2000, and any and all adjournments thereof
(the "Meeting"), and to cast thereat in the manner designated below (A) the
number of votes allocable to the undersigned that are attributable to all
shares (the "Shares") of the Company's common stock (except for PAYSOP shares)
held by the Trustee and credited to the noted account of the undersigned as of
December 31, 1999, in accordance with the provisions of the noted Plan (the
"Undersigned's Allocated Votes") and (B) the number of votes allocable to the
undersigned (determined pursuant to a formula specified in the applicable Plan)
that are attributable to all Shares (except for PAYSOP shares) held by the
Trustee as of December 31, 1999 that are unallocated or as to which properly
executed voting instructions are not timely received prior to the commencement
of the Meeting (the "Undersigned's Proportionate Votes") and (ii) further
instructs the Trustee, as trustee of the Stock Bonus Plan, to attend the
Meeting and to cast thereat in the manner designated below the number of votes
allocable to the undersigned that are attributable to all Shares held by the
Trustee and credited to the PAYSOP account of the undersigned as of December
31, 1999, in accordance with the provisions of the Stock Bonus Plan (referred
to individually as the "Undersigned's PAYSOP Votes" and collectively with the
Undersigned's Allocable Votes and the Undersigned's Proportionate Votes as the
"Undersigned's Votes").
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
STOCK BONUS PLAN (except for PAYSOP shares) NUMBER OF ALLOCATED SHARES AS OF DECEMBER 31, 1999:
- ------------------------------------------------------------------------------------------------------------------------------------
1. To elect four Class III Directors.
Undersigned's Allocable Votes: FOR [ ] all nominees listed below (except WITHHOLD AUTHORITY [ ] to vote for all nominees
as marked to the contrary below) listed below
Undersigned's Proportionate Votes: FOR [ ] all nominees listed below (except WITHHOLD AUTHORITY [ ] to vote for all nominees
as marked to the contrary below) listed below
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST
BELOW:
Undersigned's Allocable Votes: Calvin Czeschin / F. Earl Hogan / Harvey P. Perry / Jim D. Reppond
Undersigned's Proportionate Votes: Calvin Czeschin / F. Earl Hogan / Harvey P. Perry / Jim D. Reppond
2. To approve the Company's 2000 Incentive Compensation Plan.
Undersigned's Allocable Votes: [ ] FOR [ ] AGAINST [ ] ABSTAIN
Undersigned's Proportionate Votes: [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In its discretion to vote upon such other business as may properly come before the Meeting.
- ------------------------------------------------------------------------------------------------------------------------------------
PAYSOP SHARES NUMBER OF PAYSOP SHARES AS OF DECEMBER 31, 1999:
- ------------------------------------------------------------------------------------------------------------------------------------
1. To elect four Class III Directors.
FOR [ ] all nominees listed below (except WITHHOLD AUTHORITY [ ] to vote for all nominees
as marked to the contrary below) listed below
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST
BELOW:
Calvin Czeschin F. Earl Hogan Harvey P. Perry Jim D. Reppond
2. To approve the Company's 2000 Incentive Compensation Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In its discretion to vote upon such other business as may properly come before the Meeting.
- ------------------------------------------------------------------------------------------------------------------------------------
ESOP NUMBER OF ALLOCATED SHARES AS OF DECEMBER 31, 1999:
- ------------------------------------------------------------------------------------------------------------------------------------
1. To elect four Class III Directors.
Undersigned's Allocable Votes: FOR [ ] all nominees listed below (except WITHHOLD AUTHORITY [ ] to vote for all nominees
as marked to the contrary below) listed below
Undersigned's Proportionate Votes: FOR [ ] all nominees listed below (except WITHHOLD AUTHORITY [ ] to vote for all nominees
as marked to the contrary below) listed below
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST
BELOW:
Undersigned's Allocable Votes: Calvin Czeschin / F. Earl Hogan / Harvey P. Perry / Jim D. Reppond
Undersigned's Proportionate Votes: Calvin Czeschin / F. Earl Hogan / Harvey P. Perry / Jim D. Reppond
2. To approve the Company's 2000 Incentive Compensation Plan.
Undersigned's Allocable Votes: [ ] FOR [ ] AGAINST [ ] ABSTAIN
Undersigned's Proportionate Votes: [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In its discretion to vote upon such other business as may properly come before the Meeting.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Board of Directors of the Company recommends that you vote FOR the
nominees and the proposal listed above. Upon timely receipt of these
instructions, properly executed, the Undersigned's Votes will be cast in the
manner directed. If these instructions are properly executed but no specific
directions are given with respect to the Undersigned's Allocated Votes, the
Undersigned's Proportionate Votes or the Undersigned's PAYSOP Votes, these votes
will be cast for the nominees and the proposal.
Date:_____________, 2000 --------------------------------------
Signature of Participant
Please mark, sign, date and return these instructions promptly using
the enclosed envelope.
<PAGE> 51
VOTING INSTRUCTIONS OF NAMED FIDUCIARY - DOLLARS & SENSE PLAN SHARES
The undersigned, acting as a "named fiduciary" of the CenturyTel, Inc.
Dollars & Sense Plan and Trust, as amended (the "Dollars & Sense Plan"), hereby
instructs Merrill Lynch Trust Company FSB (the "Trustee"), as trustee of the
Dollars & Sense Plan, to attend the annual meeting of shareholders of
CenturyTel, Inc. (the "Company") to be held on May 11, 2000, and any and all
adjournments thereof (the "Meeting"), and to cast thereat in the manner
designated below (i) the number of votes allocable to the undersigned that are
attributable to all shares of the Company's common stock held by the Trustee and
credited to the Dollars & Sense Plan account of the undersigned as of March 13,
2000, in accordance with the provisions of the Dollars & Sense Plan (the
"Undersigned's Allocable Votes") and (ii) the number of votes allocable to the
undersigned (determined pursuant to a formula specified in the Dollars & Sense
Plan) that are attributable to all shares of the Company's common stock held by
the Trustee as of March 13, 2000 that are unallocated or as to which properly
executed voting instructions are not timely received prior to the commencement
of the Meeting (referred to individually as the "Undersigned's Proportionate
Votes" and collectively with the Undersigned's Allocable Votes as the
"Undersigned's Votes").
1. To elect four Class III Directors.
<TABLE>
<S> <C> <C>
Undersigned's Allocable Votes: FOR [ ] all nominees listed WITHHOLD AUTHORITY [ ] to vote
below (except as marked for all nominees listed below
to the contrary below)
Undersigned's Proportionate Votes: FOR [ ] all nominees listed WITHHOLD AUTHORITY [ ] to vote
below (except as marked for all nominees listed below
to the contrary below)
</TABLE>
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW:
Undersigned's Allocable Votes: Calvin Czeschin/F. Earl Hogan/Harvey P.
Perry/Jim D. Reppond
Undersigned's Proportionate Votes: Calvin Czeschin/F. Earl Hogan/Harvey P.
Perry/Jim D. Reppond
2. To approve the Company's 2000 Incentive Compensation Plan.
Undersigned's Allocable Votes: [ ] FOR [ ] AGAINST [ ] ABSTAIN
Undersigned's Proportionate Votes: [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In its discretion to vote upon such other business as may properly come
before the Meeting.
(Please See Reverse Side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR THE
NOMINEES AND THE PROPOSAL LISTED ON THE REVERSE SIDE HEREOF. Upon timely receipt
of these instructions, properly executed, the Undersigned's Votes will be cast
in the manner directed. If these instructions are properly executed but no
specific directions are given with respect to the Undersigned's Allocable Votes
or the Undersigned's Proportionate Votes, these votes will be cast for the
nominees and the proposal.
Date: , 2000
--------------------- ---------------------------------------
Signature of Participant
- ----------------------------------------------- ----------------------
Name of Participant: Number of Allocated
Shares as of March 13,
- ----------------------------------------------- 2000:
Mailing Address: 2000: ----------------------
Please mark, sign, date and return these instructions promptly using the
enclosed envelope.
- --------------------------------------------------------------------------------
<PAGE> 52
- --------------------------------------------------------------------------------
VOTING INSTRUCTIONS OF NAMED FIDUCIARY - RETIREMENT SAVINGS PLAN SHARES
The undersigned, acting as a "named fiduciary" of the CenturyTel, Inc.
Retirement Savings Plan for Bargaining Unit Employees and Trust, as amended (the
"Retirement Savings Plan"), hereby instructs Merrill Lynch Trust Company FSB
(the "Trustee"), as trustee of the Retirement Savings Plan, to attend the annual
meeting of shareholders of CenturyTel, Inc. (the "Company") to be held on May
11, 2000, and any and all adjournments thereof (the "Meeting"), and to cast
thereat in the manner designated below (i) the number of votes allocable to the
undersigned that are attributable to all shares of the Company's common stock
held by the Trustee and credited to the Retirement Savings Plan account of the
undersigned as of March 13, 2000, in accordance with the provisions of the
Retirement Savings Plan (the "Undersigned's Allocable Votes") and (ii) the
number of votes allocable to the undersigned (determined pursuant to a formula
specified in the Retirement Savings Plan) that are attributable to all shares of
the Company's common stock held by the Trustee as of March 13, 2000, that are
unallocated or as to which properly executed voting instructions are not timely
received prior to the commencement of the Meeting (referred to individually as
the "Undersigned's Proportionate Votes" and collectively with the Undersigned's
Allocable Votes as the "Undersigned's Votes").
1. To elect four Class III Directors.
<TABLE>
<S> <C> <C>
Undersigned's Allocable Votes: FOR [ ] all nominees listed WITHHOLD AUTHORITY [ ] to vote
below (except as marked for all nominees listed below
to the contrary below)
Undersigned's Proportionate Votes: FOR [ ] all nominees listed WITHHOLD AUTHORITY [ ] to vote
below (except as marked for all nominees listed below
to the contrary below)
</TABLE>
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW:
Undersigned's Allocable Votes: Calvin Czeschin/F. Earl Hogan/Harvey P.
Perry/Jim D. Reppond
Undersigned's Proportionate Votes: Calvin Czeschin/F. Earl Hogan/Harvey P.
Perry/Jim D. Reppond
2. To approve the Company's 2000 Incentive Compensation Plan.
Undersigned's Allocable Votes: [ ] FOR [ ] AGAINST [ ] ABSTAIN
Undersigned's Proportionate Votes: [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In its discretion to vote upon such other business as may properly come
before the Meeting.
(Please See Reverse Side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE FOR THE
NOMINEES AND THE PROPOSAL LISTED ON THE REVERSE SIDE HEREOF. Upon timely receipt
of these instructions, properly executed, the Undersigned's Votes will be cast
in the manner directed. If these instructions are properly executed but no
specific directions are given with respect to the Undersigned's Allocable Votes
or the Undersigned's Proportionate Votes, these votes will be cast for the
nominees and the proposal.
Date: , 2000
--------------------- ---------------------------------------
Signature of Participant
- ----------------------------------------------- ----------------------
Name of Participant: Number of Allocated
Shares as of March 13,
- ----------------------------------------------- 2000:
Mailing Address: ----------------------
Please mark, sign, date and return these instructions promptly using the
enclosed envelope.
- --------------------------------------------------------------------------------
24
