FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
LEVEL 3 COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 47-0210602
(State of incorporation) (I.R.S. Employer
Identification No.)
3555 Farnam Street
Omaha, Nebraska 68131
(Address of principal (Zip code)
executive offices)
LEVEL 3 COMMUNICATIONS, INC.
1995 STOCK PLAN
(Full title of the plan)
Matthew J. Johnson, Esq.
Level 3 Communications, Inc.
3555 Farnam Street
Omaha, Nebraska 68131
(402) 536-3613
(Name, address and telephone number
of agent for service)
Calculation of Registration Fee
Proposed
Maximum Proposed
Amount Offering Maximum Amount of
Title of Securities to be Price Per Offering Registration
to be Registered Registered1 Share2 Price3 Fee
__________________________________________________________________________
Common Stock, par value
$.01 per share
("Common Stock") 425,000 $3.51 $1,491,750 $448
1 Represents the shares of Common Stock issuable pursuant to the Level 3
Communications, Inc. (the "Company") 1995 Stock Plan, as amended April 1,
1998 (the "Plan"), to holders of options to acquire common stock of
XCOM Technologies, Inc., which was acquired by the Company on April 24, 1998.
2 Calculated pursuant to Rule 457(h) under the Act.
3 Calculated pursuant to Rule 457(h) under the Act.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Items 1 and 2.
The information furnished to participants is not
required to be filed with this registration statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed with the Securities
and Exchange Commission by the Company are incorporated
by reference in this registration statement:
(a) The Company's annual report on Form 10-K
for the fiscal year ended December 27, 1997, as
amended by Form 10-K/A amendments filed April 23,
1998 and April 27, 1998.
(b) All other reports filed pursuant to
Sections 13(a) or 15(d) of the Securities Exchange
Act of 1934 since December 28, 1997.
(c) The description of the Company's Common
Stock contained in the Company's Registration
Statement on Form S-4 filed November 10, 1997 (SEC
File No. 333-34627).
All documents filed hereafter by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, prior to the filing of a post-
effective amendment which indicates that all securities
offered have been sold or which deregisters all
securities then remaining unsold, will be deemed to be
incorporated by reference in this registration
statement and to be a part hereof from the date of
filing of such documents.
Item 4. Description of Securities
Inapplicable.
Item 5. Interests of Named Experts and Counsel
The legality of the securities offered by this
Prospectus have been passed upon for the Company by
Matthew J. Johnson, Vice President-Corporate Legal of
the Company. Mr. Johnson owns shares of the Company's
Common Stock, and has been granted options to purchase
Common Stock pursuant to the Plan.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law
permits a corporation to indemnify its officers and
directors to the extent provided in that statute. The
Company's Certificate of Incorporation and By-laws
contain provisions intended to indemnify officers and
directors against liability to the fullest extent
permitted by applicable law. The Delaware General
Corporation Law empowers the Company to maintain
insurance on behalf of officers and directors against
liabilities incurred while acting in such capacities.
The Company maintains such insurance.
Item 7. Exemption from Registration Claimed
Inapplicable.
Item 8. Exhibits
Exhibits filed as a part of this Registration
Statement are listed below. Exhibits incorporated by
reference are indicated in parentheses.
Exhibit
Number Description
4.1 Restated Certificate of Incorporation
(Exhibit 3.1 to the Company's Report on Form 8-A
dated March 31, 1998).
4.3 By-laws (Exhibit 3.4 to the Report on Form
8-A dated March 31, 1998).
4.4 Level 3 Communications, Inc. 1995 Class D
Stock Plan, as amended April 1, 1998.
5 Opinion of Matthew J. Johnson, Esq., with
respect to legality of securities being
registered.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Counsel (included in Exhibit 5).
24 Power of Attorney (set forth in signature page
to this Registration Statement).
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment
to the Registration Statement:
(i) to include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any
facts or events arising after the
effective date of the Registration
Statement (or the most recent post-
effective amendment thereof) which,
individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement; and
(iii) to include any material
information with respect to the plan of
distribution not previously disclosed in
the Registration Statement or any
material change to such information in
the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information
required to be included in a post-effective
amendment by those paragraphs is contained in
periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any
liability under the Act, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered, and
the offering of such securities at that time shall
be deemed to be the initial bona fide offering.
(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes
that, for purposes of determining any liability under
the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement
shall be deemed to be a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to
deliver or cause to be delivered with the prospectus,
to each person to whom the prospectus is sent or given,
the latest annual report to security holders that is
incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of
Rule 14a-3 or Rule 14c-3 under the Securities Exchange
Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X
is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly
report that is specifically incorporated by reference
in the prospectus to provide such interim financial
information.
(d) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and
Exchange Commission such indemnification is against
public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of
the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director,
officer or controlling person in connection with the
securities being registered, the registrant will,
unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of issue.
POWER OF ATTORNEY
Each of the undersigned officers and directors of
the Company hereby severally constitutes and appoints
Terrence J. Ferguson, Matthew J. Johnson and Neil J.
Eckstein, and each of them, their true and lawful
attorneys-in-fact for the undersigned, in any and all
capacities, each with full power of substitution, to
sign any and all amendments to this Registration
Statement (including post-effective amendments), and to
file the same with exhibits thereto and other documents
in connection therewith, with the Commission, granting
unto said attorneys-in-fact, and each of them, full
power and authority to do and perform each and every
act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and
purposes as he might or could do in person, hereby
ratifying and confirming all that each said attorney-
in-fact, or any of them, may lawfully do or cause to be
done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933, the registrant certifies it has reasonable
grounds to believe that it meets all the requirements
for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City
of Omaha, State of Nebraska on the 14th day of May,
1998.
LEVEL 3 COMMUNICATIONS, INC.
By: /s/ James Q. Crowe
James Q. Crowe
President
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below
by the following persons on behalf of the registrant
and in the capacities indicated as of the 14th day of
May, 1998.
/s/ James Q. Crowe Chairman of the Board and President
James Q. Crowe (Director and Principal Executive Officer)
/s/ R. Douglas Bradbury Chief Financial Officer
R. Douglas Bradbury (Director and Principal Financial Officer)
/s/ Eric J. Mortensen Controller
Eric J. Mortensen (Principal Accounting Officer)
/s/ Walter Scott, Jr. /s/ Robert B. Daugherty
Walter Scott, Jr., Director Robert B. Daugherty, Director
/s/ William L. Grewcock Charles M. Harper
William L. Grewcock, Director Charles M. Harper, Director
/s/ Richard R. Jaros /s/ Robert E. Julian
Richard R. Jaros, Director Robert E. Julian, Director
/s/ David C. McCourt /s/ Kenneth E. Stinson
David C. McCourt, Director Kenneth E. Stinson, Director
/s/ Michael B. Yanney
Michael B. Yanney, Director
LEVEL 3 COMMUNICATIONS, INC.
INDEX TO EXHIBITS
Exhibit
No. Description of Exhibit
4.4 Level 3 Communications, Inc. 1995 Class D
Stock Plan (as amended April 1, 1998)
5 Legal opinion of Matthew J. Johnson, Esq.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Coopers & Lybrand L.L.P.
Exhibit 5
LEVEL 3 COMMUNICATIONS, INC.
3555 Farnam Street
Omaha, Nebraska 68131
(402) 536-3677
Fax: (402) 536-3645
May 14, 1998
Level 3 Communications, Inc.
3555 Farnam Street
Omaha, Nebraska 68131
Gentlemen:
I have acted as counsel to Level 3 Communications, Inc., a
Delaware corporation (the "Company"), in connection with the
preparation of a Registration Statement on Form S-8 (the
"Registration Statement") relating to the offer and sale by the
Company of up to 375,000 shares of its Class D Diversified Group
Convertible Exchangeable Common Stock, par value $.01 per share
("Class D Stock"), pursuant to the 1995 Stock Plan of the
Company (as amended April 1, 1998).
In reaching the conclusions set forth below, I have examined
such certificates of public officials and corporate documents and
records and have made such other investigations, as I have
considered necessary. As to various matters of fact, I have
relied on responses to inquiries made of officers and employees of
the Company or its subsidiaries.
Based on the foregoing, I am of the opinion that the Common
Stock, when issued, will be duly authorized, validly issued, fully
paid and nonassessable.
I am admitted to practice solely in the State of Nebraska.
The opinions set forth above are limited to the General
Corporation Law of the State of Delaware, and I express no opinion
with respect to the laws of any other jurisdiction.
I consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Matthew J. Johnson
Vice President-Legal
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement of Level 3 Communications, Inc. (formerly known as Peter
Kiewit Sons', Inc.) on Form S-8 of our report dated March 30, 1998
on our audits of the consolidated financial statements of Level 3
Communications, Inc. (formerly known as Peter Kiewit Sons', Inc.)
as of December 27, 1997 and December 28, 1996 and for each of the
three years in the period ended December 27, 1997 which report is
included in the Annual Report on Form 10-K/A of Peter Kiewit Sons', Inc.
Coopers & Lybrand L.L.P.
/s/ Coopers & Lybrand L.L.P.
Omaha, Nebraska
May 14, 1998
Exhibit 4.4
LEVEL 3 COMMUNICATIONS, INC.
1995 STOCK PLAN
(Amended and Restated as of April 1, 1998)
ARTICLE I.
NAME AND PURPOSE
1.1. Name. The name of the Plan is the Level 3 Communications,
Inc. 1995 Stock Plan (Amended and Restated as of April 1, 1998).
1.2. Purpose. The purpose of the Plan is to increase the value of
Shares and the profitability of the Company and its subsidiaries
(i) by enabling the Company to attract, retain, motivate and reward
certain Employees and (ii) by aligning the interests of those
Employees with the interests of the Company and the holders of
Shares.
ARTICLE II.
DEFINITIONS
2.1. "Affiliate" means any corporation, partnership, or other
entity with respect to which the Company owns, directly or
indirectly, fifty percent or more of the issued and outstanding
capital stock or other equity interests (measured in terms of total
dollar value if the corporation, partnership or other entity has
outstanding more than one class of capital stock or other equity
interests).
2.2. "Agreement" means any written agreement, document or
instrument that evidences a grant of an Award to a Participant and
the terms, conditions and provisions of, and restrictions upon, the
Award.
2.3. "Award" means any grant pursuant to the Plan of Incentive
Stock Options, Nonqualified Stock Options, Restricted Shares,
bargain Shares, bonuses of Shares, performance shares, Stock
Appreciation Rights or other stock benefit or stock-based benefit
granted to a Participant under this Plan.
2.4. "Board" means the Board of Directors of the Company.
2.5. "Certificate" means the certificate of incorporation of the
Company, as amended from time to time.
2.6. "Change in Control" means the occurrence of any of the
following events:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
(a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 30% or more (on a
fully diluted basis) of either (i) the then outstanding shares of
common stock of the Company, taking into account as outstanding
for this purpose such common stock issuable upon the exercise of
options or warrants, the conversion of convertible stock or debt,
and the exercise of any similar right to acquire such common
stock (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control:
(a) any acquisition by the Company or any "affiliate", within
the meaning of 17 C.F.R. Section 230.405 (an "Affiliate"), of the
Company, (b) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or an
Affiliate of the Company, or (c) any acquisition by any Person
pursuant to a transaction which complies with clauses (a), (b)
and (c) of subsection (iii) of this Section 2.6,; or
(ii) Individuals who, as of April 1, 1998, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any
individual becoming a director subsequent to April 1, 1998 whose
election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose 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
or entity other than the Board; or
(iii) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), unless,
following such Business Combination, (a) all or substantially all
of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly,
more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, of the corporation resulting from such
Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, and (b) no Person (excluding any
employee benefit plan (or related trust) sponsored or maintained
by the Company or an Affiliate of the Company, or such
corporation resulting from such Business Combination or any
Affiliate of such corporation) beneficially owns, directly or
indirectly, 50% or more (on a fully diluted basis) of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination, taking into
account as outstanding for this purpose such common stock
issuable upon the exercise of options or warrants, the conversion
of convertible stock or debt, and the exercise of any similar
right to acquire such common stock, or the combined voting power
of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the
Business Combination and (c) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action
of the Board, providing for such Business Combination; or
(iv) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing provisions of Section 2.5 hereof, a
"Change in Control" will not be deemed to have occurred as a
result of the consummation of the Separation Transaction, or as a
result of any event or transaction occurring prior to the
consummation of the Separation Transaction.
In addition, the Committee may, by a written determination prior
to the consummation of an event or transaction, determine that
such event or transaction does not constitute a Change in
Control, provided that the Committee reasonably concludes that
such event or transaction (i) is not likely to result in a
significant change to the identities of the persons functioning
as senior management of the Company, either immediately in the
foreseeable future (it being understood that the Committee need
not conclude that no changes in senior management are likely to
occur), and (ii) is not likely to result in control of the Board
(or a significant portion of the Board's functions) being
transferred to a single Person other than an Affiliate of the
Company or any employee benefit plan (or related trust) sponsored
or maintained by the Company or an Affiliate of the Company,
either immediately or in the foreseeable future.
2.7. "Class D Conversion Price" has the meaning ascribed to it in
the Certificate prior to April 1, 1998.
2.8. "Class D Per Share Price" has the meaning ascribed to it in
the Certificate prior to April 1, 1998.
2.9. "Class D Stock" means the Class D Diversified Group
Convertible Exchangeable Common Stock, par value $0.0625, issued by
the Company, prior to the redesignation of Class D Stock as Stock
as of April 1, 1998.
2.10. "Code" means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated under the Code.
2.11. "Committee" means the Board or a committee or committees of
the Board appointed by the Board to administer this Plan.
2.12. "Company" means Level 3 Communications, Inc., a Delaware
corporation.
2.13. "Effective Date" means September 25, 1995.
2.14. "Employee" means any person who, with respect to the Company,
is considered an "employee," as such term is defined in Rule
A.1.(a) to Form S-8 issued by the Securities and Exchange
Commission (as such Rule may be renumbered from time to time) and
who (a) is employed on a full-time basis by the Company or an
Affiliate, (b) is a member of the Board of Directors of the Company
or any Affiliate, or (c) provides services to the Company or any
Affiliate in a capacity as other than an employee or a director, in
each case at the time of the grant of the related Award.
2.15. "Exchange Act" means the Securities Exchange Act of 1934.
2.16. "Fair Market Value" means: (a) prior to April 1, 1998, with
respect to Class D Stock, (i) the Class D Per Share Price, or (ii)
the fair market value of Class D Stock determined by such other
reasonable method of valuation adopted by the Committee; and
(b) on and after April 1, 1998, with respect to Stock, (i) the
closing price per share of Stock on the national securities
exchange on which Stock is principally traded, on the next
preceding date on which there was a sale of Stock on such exchange,
or (ii) if the Stock is not listed or admitted to trading on any
such exchange, the last sale price of a share of Stock as reported
by the National Association of Securities Dealers Inc. Automated
Quotation ("NASDAQ") system on the next preceding date on which
such bid and asked prices were reported, or (iii) if the Stock is
not then listed on any securities exchange or prices therefor are
not then quoted in the NASDAQ system, the value determined by the
Committee in good faith.
2.17. "Fiscal Year" means the taxable year of the Company for
federal income tax purposes, including the taxable year in which
the Plan is adopted.
2.18. "Incentive Stock Option" means any Option that is intended, at
the time it is granted, to be an incentive stock option within the
meaning of Section 422 of the Code.
2.19. "Nonqualified Stock Option" means any Option that is not an
Incentive Stock Option.
2.20. "Outperform Stock Option" means a Stock-based Award having
terms and conditions reflected in an "Outperform Stock Option Award
Agreement" entered into between the Company and a Participant.
2.21. "Option" means any option to purchase Shares that is granted
pursuant to Section 6.1.
2.22. "Participant" means any Employee who is granted an Award
pursuant to this Plan.
2.23. "Plan" means the Level 3 Communications, Inc. 1995 Stock Plan
(Amended and Restated as of April 1, 1998), as it may be further
amended from time to time.
2.24. "Publicly Traded" has the meaning ascribed to it in the
Certificate prior to March 31, 1998.
2.25. "Representative" means a member of the Committee acting on
behalf of the Committee, or an Employee appointed by the Committee
to exercise some or all of the authority of the Committee.
2.26. "Restricted Shares" means any Shares that are granted pursuant
to Section 7.1 subject to restrictions on transfer, to forfeiture
under certain circumstances and to such other restrictions as the
Committee deems appropriate (including restrictions on the exercise
of voting rights or the right to receive dividends, or a
requirement to reinvest dividends).
2.27. "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, as it may be amended from time to time, or any successor rule
in effect from time to time.
2.28. "Separation Transaction" means the March 31, 1998 transaction
effecting the separation of the construction business from the
other businesses of the Company, as described in the Company's
Registration Statement on Form S-4 (Registration No. 333-34627).
2.29. "Share" means, prior to 5:00 p.m. CST, March 31, 1998, a share
of Class D Stock and, on and after that time, a share of Stock.
2.30. "Stock" means common stock of the Company, par value $0.01 per
share, subsequent to the redesignation of Class D Stock as such
common stock as of 5:00 p.m. CST, March 31, 1998.
2.31. "Stock Appreciation Right" means an Award pursuant to which a
Participant shall be paid the increase in value of one or more
Shares from the date of grant of such Award until the date of
exercise of such Award, in cash or Shares, and subject to such
terms and conditions as the Committee deems appropriate and as may
be reflected in an Award Agreement (including the number of Shares
subject to such Stock Appreciation Right, the date or dates on
which the Stock Appreciation Right becomes exercisable or
exercised, either wholly or in part, and the expiration date of the
Stock Appreciation Right).
2.32. "Term" means the term of this Plan, as set forth in Section
11.2.
ARTICLE III.
ELIGIBILITY AND PARTICIPATION
3.1. Eligibility. Every Employee is eligible to become a
Participant. A person who is not an Employee is not eligible to
become a Participant.
3.2. Participation. The Committee will select Employees to
participate in the Plan from time to time, in its sole discretion.
An Employee cannot become a Participant unless such person is
selected by the Committee to participate in the Plan. In selecting
such persons to participate in the Plan, the Committee may consider
the past, present and expected future performance of the
individual, the effort of the individual, the length of service of
the individual, the level of responsibility of the individual and
such other factors as the Committee deems appropriate.
ARTICLE IV.
AWARDS
4.1. Types of Awards. The Committee will determine the Awards to
be granted to each Participant. The Committee may grant Awards in
any one or any combination of (a) Incentive Stock Options; (b)
Nonqualified Stock Options; (c) Restricted Shares; (d) Outperform
Stock Options; (e) bargain purchases of Shares; (f) bonuses of
Shares; (g) the grant of Shares based on performance or the
satisfaction of other conditions; (h) Stock Appreciation Rights; or
(i) any other form of stock benefit or stock-related benefit.
4.2. Terms and Conditions of Awards. The Committee will determine
all terms, conditions and provisions of, and restrictions upon, any
grant of Awards. Without limiting the Committee's authority, the
Committee may: (a) make the grant of Awards conditional upon an
election by a Participant to defer payment of a portion of his
salary; (b) give a Participant a combination of Awards or a choice
between two Awards; (c) grant Awards in the alternative so that
acceptance of or exercise of one Award cancels the right of a
Participant to another; (d) grant Awards subject to any condition
that the Committee deems appropriate; (e) provide that grants of
Awards in Shares or Share equivalents will include dividend or
dividend equivalent payments or dividend credit rights; and (f)
provide any vesting schedule for Awards as the Committee deems
appropriate. The Committee may waive any term, condition,
provision or restriction, in its sole discretion.
4.3. Agreements. Each grant of an Award to a Participant will be
evidenced by an Agreement executed by the Participant and a
Representative (on behalf of the Company and the Committee).
Subject to the terms and conditions of this Plan, the Committee, in
its sole and absolute discretion, will determine the form and
content of all Agreements. Agreements with respect to a specific
type of Award need not be identical.
4.4. Modification or Termination of Awards. The Committee, in its
sole discretion, may modify, cancel or terminate any Award at any
time if a Participant is not in compliance with this Plan, the
related Agreement or any rules adopted by the Committee.
4.5. Optional Deferral. The Committee may defer the right to
receive any Award, or the proceeds of the exercise of any Award, at
the request of a Participant, for such period and upon such terms
as the Committee determines. Any such deferral may, at the
discretion of the Committee, involve crediting of interest on
deferrals denominated in cash and crediting of dividend equivalents
on deferrals denominated in Shares.
4.6. Code Section 162(m). The Committee, in its sole discretion,
may require that one or more Agreements provide that, in the event
that Section 162(m) of the Code or any similar provision would
operate to disallow a deduction by the Company for all or part of
any Award, a Participant's receipt of the portion of such Award
that would not be deductible by the Company will be deferred until
the next succeeding year or years in which such portion may be paid
without causing the Participant's remuneration for such year to
exceed the limit set forth in Section 162(m) of the Code. Any such
deferred amounts denominated in cash shall have earnings credited
thereon at a market rate of interest, as reasonably determined by
the Committee, and any such deferred amounts denominated in Shares
shall have dividend equivalents credited thereon, and earnings
subsequently credited on such dividend equivalents at a market rate
of interest, as reasonably determined by the Committee.
4.7. Code Section 280G. The Committee, in its sole discretion, may
(but need not) provide in any Award Agreement for the payment of
additional amounts in respect of the Award in order to make a
Participant whole for some or all of the excise taxes imposed on a
Participant pursuant to Section 4999 of the Code in the event that
the grant, exercise, vesting or payment of such Award is deemed to
be an "excess parachute payment" for purposes of Section 280G of
the Code. The terms and conditions of such additional payments
shall be as determined by the Committee and reflected in the Award
Agreement.
ARTICLE V.
SHARES SUBJECT TO PLAN
5.1. Aggregate Limitation. The Committee may not grant Awards
under this Plan with respect to more than 35,000,000 Shares during
the Term. It is noted that this number reflects the December 26,
1997 dividend of four Shares per Share.
5.2. Individual Limitations. The Committee may not grant Options
or Stock Appreciation Rights under this Plan to any Participant
during the Term with respect to more than 5,000,000 Shares. It is
noted that this number reflects the December 26, 1997 dividend of
four Shares per Share.
5.3. Unused Shares. If any Award expires or terminates, or if any
Award is surrendered, canceled or forfeited without having been
fully exercised, the Committee may again grant Awards with respect
to the unused Shares allocable to the expired, terminated,
surrendered, canceled or forfeited Award.
ARTICLE VI.
OPTIONS
6.1. Grant. The Committee may grant Options to any Employee. The
Committee will determine the terms, conditions and provisions of,
and the restrictions on, any Options, including the number of
shares subject to such Options, the date or dates on which the
Options become exercisable, either wholly or in part, and the
expiration date of the Options. A Participant to whom an Option is
granted will not be deemed the holder of any Shares subject to the
Option until the Shares are fully paid, and issued and delivered to
him following exercise of the Option.
6.2. Incentive Stock Options. Incentive Stock Options must include
such terms and conditions as determined by the Committee to be
reasonably necessary to cause the Options to qualify as incentive
stock options under Section 422 of the Code.
6.3. Exchange. The Committee may grant Options to a Participant
holding unexercised outstanding Options, or unexercised outstanding
Options granted under another stock plan of the Company, on the
condition that the Participant surrenders for cancellation some or
all of those unexercised outstanding options.
6.4. Substitution. The Committee may grant Options from time to
time in substitution for similar rights held by employees of other
entities who become Employees as a result of a merger or
consolidation of the other entity with the Company or an Affiliate,
the acquisition by the Company or an Affiliate of the assets of the
other entity, or the acquisition by the Company or an Affiliate of
an equity interest in another entity.
6.5. Exercise Price. The Committee may grant Options pursuant to
this Plan, other than Incentive Stock Options, with a per share
exercise price that is less than the Fair Market Value of one
Share, as of the date of the grant.
6.6. Vesting. Options granted pursuant to this Plan will vest and
become exercisable as determined by the Committee in its sole
discretion and as reflected in an Award Agreement.
ARTICLE VII.
RESTRICTED SHARES
7.1. Grant. The Committee may grant Restricted Shares to any
Participant. The Committee may make grants of Restricted Shares at
such cost, or at no cost, as determined by the Committee in its
sole discretion.
7.2. Beneficial Ownership. Except as set forth in an Agreement
relating to Restricted Shares, each Participant who is awarded
Restricted Shares will have the entire beneficial ownership of, and
all rights and privileges of a stockholder with respect to, the
Restricted Shares awarded to him. Notwithstanding the above,
Restricted Shares may not be sold, transferred, pledged or
otherwise encumbered during the restricted period set by the
Committee.
ARTICLE VIII.
OTHER AWARDS
8.1. Grants. The Committee may grant any other stock or stock-
related awards to a Participant under this Plan that the Committee
deems appropriate, including, but not limited to, Stock
Appreciation Rights, Outperform Stock Options, bargain purchases of
Shares, bonuses of Shares and the grant of Shares based on
performance or upon the satisfaction of other conditions.
ARTICLE IX
CHANGES IN CAPITAL STRUCTURE AND CHANGE IN CONTROL
9.1 Changes in Capital Structure. Awards granted under the Plan
and any agreements evidencing such Awards, the maximum number of
Shares subject to all Awards and the maximum number of shares
with respect to which any one person may be granted Options,
Outperform Stock Options or Stock Appreciation Rights or other
stock or stock related awards during the Term shall be subject to
adjustment or substitution, as determined by the Committee in its
sole discretion, as to the number, price or kind of a Share or
other consideration subject to such Awards or as otherwise
determined by the Committee to be equitable (i) in the event of
changes in the outstanding Shares or in the capital structure of
the Company by reason of stock dividends, stock splits, reverse
stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant
changes in capitalization occurring after the date of grant of
any such Award, or (ii) in the event of any change in applicable
laws or any change in circumstances which results in or would
result in any substantial dilution or enlargement of the rights
granted to, or available for, Participants in the Plan, or which
otherwise warrants equitable adjustment because it interferes
with the intended operation of the Plan. In addition, in the
event of any such adjustments or substitution, the aggregate
number of Shares available under the Plan shall be appropriately
adjusted by the Committee, whose determination shall be
conclusive. Any adjustment in Incentive Stock Options under this
Section 9.1 shall be made only to the extent not constituting a
"modification" within the meaning of Section 424(h)(3) of the
Code, and any adjustments under this Section 9.1 shall be made in
a manner which does not adversely affect the exemption provided
pursuant to Rule 16b-3 under the Exchange Act. Further, with
respect to Awards intended to qualify as "performance-based
compensation" under Section 162(m) of the Code, such adjustments
or substitutions shall be made only to the extent that the
Committee determines that such adjustments or substitutions may
be made without a loss of deductibility for Awards under Section
162(m) of the Code, unless the Committee specifically determines
otherwise. The Company shall give each Participant notice of an
adjustment hereunder and, upon notice, such adjustment shall be
conclusive and binding for all purposes.
Notwithstanding the above, in the event of any of the following
that does not constitute a Change in Control:
A. The Company is merged or consolidated with another
corporation or entity and, in connection therewith, consideration
is received by stockholders of the Company in a form other than
stock or other equity interests of the surviving entity;
B. All or substantially all of the assets of the Company are
acquired by another Person;
C. The reorganization or liquidation of the Company; or
D. The Company shall enter into a written agreement to undergo
an event described in clauses A, B or C above,
then the Committee may, in its discretion and upon at least 10
days advance notice to the affected persons, cancel any
outstanding Awards and pay to the holders thereof, in cash or
stock, or any combination thereof, the value of such Awards based
upon the price per Share received or to be received by other
stockholders of the Company in the event. The terms of this
Section 9.1 may be varied by the Committee in any particular
Award Agreement.
9.2 Effect of Change in Control. Except to the extent reflected
in a particular Award Agreement:
(a) The Committee, in its sole discretion, may (but need not)
provide in any Award Agreement that, in the event of a Change in
Control, notwithstanding any vesting schedule otherwise effective
with respect to the Award, (i) in the case of Options or Stock
Appreciation Rights, the Award shall become immediately exercisable
with respect to 100 percent of the Shares subject thereto, (ii) in
the case of Restricted Shares, any restrictions shall expire
immediately with respect to 100 percent of such Restricted Shares
and (iii) in the case of any other Award, any other vesting or
restricted period to which such Award is subject shall expire as to
100 percent of such Award.
(b) In addition, in the event of a Change in Control, the
Committee may in its discretion and upon at least 10 days' advance
notice to the affected persons, cancel any outstanding Awards and
pay to the holders thereof, in cash or stock, or any combination
thereof, the value of such Awards based upon the price per share
received or to be received by other shareholders of the Company in
the event.
9.3 Binding Upon Successors. The obligations of the Company
under this Plan shall be binding upon any successor corporation
or organization resulting from the merger, consolidation or other
reorganization of the Company, or upon any successor corporation
or organization succeeding to substantially all of the assets and
business of the Company. Subject to the actions which the
Committee may take with respect to Awards in accordance with
Sections 9.1 and 9.2, the Company agrees that it will make
appropriate provisions for the preservation of Participants'
rights under the Plan in any agreement or plan which it may enter
into or adopt to effect any such merger, consolidation,
reorganization or transfer of assets.
ARTICLE IX.
ADMINISTRATION
9.1. Administration. The Committee will administer this Plan. The
Board may appoint a separate committee or committees to administer
portions of the Plan applicable to persons subject to Rule 16b-3,
Section 162(m) of the Code or other similar provisions of law. The
Committee may act either through majority vote of the Committee at
a meeting for which a quorum is present, or through the written
consent of a majority of the members of the Committee in lieu of a
meeting. The Committee will maintain such books, accounts and
records relating to the Plan and to Committee proceedings as it
considers appropriate. The Committee may designate Employees to
assist the Committee in the administration of the Plan and to act
as Representatives of the Committee, and in that capacity to
exercise any or all of the authority of the Committee under this
Plan, and may grant authority to those Employees to execute any and
all agreements contemplated by this Plan and any other documents
reasonably required to implement this Plan. The Committee may
employ agents, attorneys, accountants or other third parties for
such purposes as the Committee considers appropriate.
9.2. Discretion and Authority. Subject to the express limitations
set forth in this Plan, the Committee, in its sole and absolute
discretion, may take any and all actions necessary, advisable or
appropriate to implement the Plan and may make any and all
determinations deemed appropriate for the administration of the
Plan, including actions and determinations with respect to (a) the
Participants in the Plan, (b) adequacy of consideration received by
the Company in exchange for Awards granted under the Plan, (c) the
types and amounts of Awards to be granted to Participants or to any
particular Participant, (d) the terms, conditions and provisions
of, and restrictions on, all Awards, (e) amounts payable, if any,
by a Participant in connection with the grant, award or receipt of
any Award, (f) restrictions on transfer of any Award by a
Participant, and (g) the circumstances under which any Award may
expire, terminate or be surrendered, canceled or forfeited.
9.3. Payment. Upon the exercise of an Option or in the case of any
other Award that requires a payment by a Participant to the
Company, the amount due the Company may be paid (a) in cash; (b) by
the surrender of all or part of an Award (including the Award being
exercised); (c) by the tender to the Company of Shares acquired by
the Participant on the open market or owned by the Participant for
at least six months and registered in his or her name having a Fair
Market Value equal to the amount due to the Company; (d) by
delivering to the Committee a copy of irrevocable instructions to a
stockbroker to deliver promptly to the Company an amount of sale or
loan proceeds sufficient to pay the exercise price, in the case of
an Option; (e) in other property, rights and credits deemed
acceptable by the Committee, including the Participant's promissory
note; or (f) by any combination of the payment methods specified in
(a) through (e). Notwithstanding the foregoing, any method of
payment other than in cash may be used only with the consent of the
Committee or if and to the extent so provided in the related
Agreement. The proceeds of the sales of Shares purchased pursuant
to an Option and any payment to the Company for other Awards will
be added to the general funds of the Company or to the reacquired
Shares held by the Company, as the case may be, and used for the
corporate purposes of the Company as the Board determines.
9.4. Rules. The Committee may make, amend and rescind such rules
and regulations and establish, modify or repeal such procedures as
it deems appropriate for the administration of the Plan. The
Committee may make special rules or regulations that apply only to
persons covered by Rule 16b-3, Section 162(m) of the Code or other
provisions of law.
9.5. Interpretation. In the event of a disagreement as to the
interpretation of the Plan, any rule, regulation or procedure under
the Plan, or as to any right or obligation arising from or related
to the Plan (including but not limited to under an Agreement), the
interpretation of the Committee will be final and binding.
9.6. Legal Requirements. The Committee will cause the Plan, and
any grants or awards of Awards, to comply with all applicable laws.
ARTICLE X.
AMENDMENT AND TERMINATION
10.1. Amendment. The Committee may amend the Plan from time to time
as it deems appropriate. The Committee, however, may not amend any
provision of Article V, Section 6.2 or this Article X without the
approval of the Board. No amendment to this Plan may deprive a
Participant of any Award or rights with respect to an Award without
the Participant's consent.
10.2. Term. The Plan will terminate on the tenth anniversary of the
Effective Date. The Board, however, may terminate the Plan at any
time. Neither amendment nor termination of the Plan will deprive
Participants of their rights with respect to outstanding Awards.
ARTICLE XI.
MISCELLANEOUS
11.1. Continuation of Employment. Neither this Plan nor any Award
granted under this Plan confers upon any Employee any right to
continue in the service of the Company or any Affiliate or limits
the right of the Company to terminate an Employee's service at will
at any time.
11.2. Discretionary Acceleration of Vesting. The Committee may
accelerate the vesting, exercisability or payment of any Award at
any time and for any reason as it determines in its sole discretion
(including but not limited to retirement of a Participant).
11.3. Unfunded Plan. This Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With
respect to any payments or deliveries of Shares not yet made to a
Participant by the Company, nothing contained in this Plan will
give any Participant rights that are greater than those of a
general creditor of the Company. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations to
deliver Shares or payments under the Plan.
11.4. Designation of Beneficiary. A Participant may file with the
Committee a written designation of a beneficiary or beneficiaries
(subject to such limitations as to the classes and numbers of
beneficiaries and contingent beneficiaries as the Committee may
from time to time prescribe) to exercise, in the event of the death
of the Participant, an Option, Outperform Stock Option or Stock
Appreciation Right, or to receive, in such event, any Awards. The
Committee reserves the right to review and approve beneficiary
designations. A Participant may from time to time revoke or change
any such designation of beneficiary and any designation of
beneficiary under the Plan will be controlling over any other
disposition, testimony or otherwise; provided, however, that if the
Committee will be in doubt as to the right of any such beneficiary
to exercise any Option, Outperform Stock Option or Stock
Appreciation Right, or to receive any Award, the Committee may
determine to recognize only the legal representative of the
recipient.
11.5. Nontransferability. Unless otherwise determined by the
Committee or specified in an Agreement, (a) no Award granted under
this Plan may be transferred or assigned by the Participant to whom
it is granted other than by beneficiary designation, will, or
pursuant to the laws of descent and distribution, and (b) an Award
granted under this Plan may be exercised, during the Participant's
lifetime, only by the Participant or by the Participant's guardian
or legal representative.
11.6. Rule 16b-3. With respect to Participants subject to Section
16 of the Exchange Act, transactions under this Plan are intended
to comply with all applicable provisions of Rule 16b-3 or its
successors under the Exchange Act, and the provisions of the Plan
shall be construed accordingly.
11.7. No Effect on Other Awards. The receipt of Awards under the
Plan shall have no effect on any benefits to which a Participant
may be entitled from his or her employer, under another plan or
otherwise, or preclude a Participant from receiving any such
benefits.
11.8. Withholding. If the Company is required to withhold any taxes
in connection with an Award, and a Participant is obligated to pay
to the Company any or all of the amount required to be withheld,
the Committee may permit the Participant to satisfy the withholding
obligation, in whole or in part, either (a) by having the Company
withhold from any Shares to be issued upon the receipt of an Award
with a Fair Market Value sufficient to satisfy the withholding
amount due, or (b) by delivering to the Company sufficient Shares
to satisfy the withholding amount due. In the absence of such
Committee permission, the withholding obligation shall be satisfied
by the payment of cash or its equivalent by the Participant to the
Company. The Company shall have no obligation to deliver to a
Participant Shares or other consideration in respect of an Award
until arrangements satisfactory to the Committee have been made to
satisfy any required withholding obligation of the Company.
11.9. Effective Date. This Plan is originally effective as of
September 25, 1995, and has been amended and restated by the Board
effective as of October 22, 1997, further amended and restated
effective as of November 10, 1997 and further amended and restated
effective as of April 1, 1998.
11.10. Liability. No member of the Board or the Committee, or
any officer or employee of the Company or its subsidiaries, will be
personally liable for any action, omission or determination made in
good faith or upon the advice of counsel in connection with the
Plan or any Award granted or awarded under the Plan.
11.11. Governing Law. The law of the state of Delaware will
govern issues related to the validity and issuance of Shares. All
other terms, conditions and provisions of, and restrictions upon,
this Plan, and Awards granted hereunder, will be construed and
administered in accordance with the law of the state in which the
Company's principal executive offices are located.
11.12. Conflict. Unless specifically stated otherwise in an
Agreement, if a term, condition or provision of, or restriction
upon, the Plan conflicts with the term, condition or provision of,
or restriction upon, any Agreement, the term of the Plan will
control.
As Amended and Restated
By Action of the Board of
Directors of Level 3 Communications, Inc.
as of April 1, 1998
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of Level 3 Communications, Inc. (formerly known as
Peter Kiewit Sons', Inc.) on Form S-8 of our report dated March 13,
1998, on our audits of the consolidated financial statements and
financial statement schedules of RCN Corporation and Subsidiaries
as of December 31, 1997 and 1996, and for the years ended December 31,
1997, 1996 and 1995, which report is incorporated by reference in
the Annual Report on Form 10-K/A of Peter Kiewit Sons', Inc.
Coopers & Lybrand L.L.P.
/s/ Coopers & Lybrand L.L.P.
Omaha, Nebraska
May 14, 1998
