SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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Level 3 Communications, Inc.
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LEVEL 3 COMMUNICATIONS, INC.
3555 Farnam Street
Omaha, NE 68131
May 10, 1999
Dear Stockholder:
By this point you should have received by mail our 1998 Annual Report,
Proxy Statement dated April 26, 1999 and the Proxy card relating to the 1999
Annual Meeting of Stockholders.
Since the mailing of our proxy materials, we have received a number of
questions from our stockholders regarding the location of, and additional
information relating to, the Annual Meeting and the proposal to increase the
number of authorized shares of common stock, par value $.01 per share (the
"Common Stock"). For your convenience, we have compiled a short list of these
questions and answers. In addition, this letter clarifies two changes to our
Proxy Statement.
Question 1. Where will the Annual Meeting be held? How long will it last?
As a result of a greater than anticipated response from stockholders that
have indicated an interest in attending the Annual Meeting, we changed the
location of the Annual Meeting to a larger facility.
As stated in the Proxy Statement, the Annual Meeting of Stockholders will
be held at the Omaha Civic Auditorium Music Hall, 17th and Davenport,
Omaha, Nebraska, at 9:00 a.m. on May 27th, 1999.
Doors will open at 8:00 a.m., where there will be information booths, a
company store and refreshments. We expect the Annual Meeting to last
approximately two hours. Please note that the Annual Meeting this year is
not being held where it was held last year.
Question 2. How will the increase of authorized shares of Common Stock from 500
million to 1.5 billion affect the shares I hold?
Currently there is no agreement, arrangement or understanding relating to
an issuance and sale of Common Stock. A vote to increase the number of
authorized shares of Common Stock will provide Level 3 with the flexibility
for future activities required to support the business plan. If the
proposal is approved, these shares will be only authorized and not
immediately issued.
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As a matter of state corporate law, each corporation must state in their
Certificate of Incorporation the maximum number of shares of common stock
that can be issued by the corporation. To change this maximum number
requires a vote of the corporation's stockholders.
An increase in the authorized shares of Common Stock will provide Level 3
flexibility to engage in certain transactions with stock, such as
financings; investment opportunities; acquisitions of other companies;
stock dividends or splits; employee benefit plans; or other corporate
purposes the Board of Directors deems advisable.
* * *
The Compensation Committee Report contained in the Proxy Statement dated
April 26, 1999 inadvertently omitted the following paragraph from the end of the
report:
"Section 162(m) of the Internal Revenue Code, enacted in 1993,
generally disallows a tax deduction to public companies for compensation
over $1 million paid to the chief executive or any of the four other most
highly compensated executive officers. However, certain compensation
meeting a tax law definition of "performance-based" is generally exempt
from this deduction limit. The Company does not currently intend to qualify
cash compensation paid to executive officers for deductibility under
Section 162(m). Further, in general, the Company does not currently have a
policy that requires or encourages the Committee to qualify other types of
compensation awarded to executive officers for deductibility under Section
162(m). However, the Company has included provisions in the Level 3
Communications, Inc. 1995 Stock Plan designed to enable option grants made
to executive officers affected by Section 162(m) to qualify as
"performance-based" compensation if the Committee determines that it is
appropriate to make such qualifying grants."
Also, Annex A to the Proxy Statement contained a clerical error in that it
did not reflect the proposed full increase in the number of authorized shares of
Common Stock that was detailed in the Notice of the Annual Meeting, the Proxy
Statement and the Proxy card itself. Annex A should read in its entirety as
follows:
Annex A
Set forth below is the text of ARTICLE IV of the Restated Certificate of
Incorporation of Level 3 Communications, Inc. if the Common Stock Proposal is
approved:
"ARTICLE IV
AUTHORIZED CAPITAL STOCK
The total number of shares of capital stock which the Corporation
shall have the authority to issue is 1,518,500,000, consisting of
1,500,000,000 shares of Common Stock, par value $.01 per share (the "Common
Stock"), 8,500,000 shares shall be Class R
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Convertible Common Stock, par value $.01 per share (the "Class R Stock")
and 10,000,000 shares of Preferred Stock, par value $.01 per share
("Preferred Stock).
Ten shares of the Common Stock are hereby designated as Common
Stock, Non-Redeemable Series. The rights, powers, preferences, privileges
and limitations of Common Stock, Non-Redeemable Series shall be identical
to those of all other shares of Common Stock, except as described in
Articles V and IX hereof."
* * *
It is important that your shares be represented at the Annual Meeting,
regardless of the number you hold. If you have not already done so, please vote
your shares by returning the proxy card that was included with the Proxy
Statement, by calling the toll free telephone number that was included on the
proxy card or by accessing the Internet at the website included on the proxy
card. If you wish to revoke any proxy previously given (either my mail,
telephone or Internet), you must do so prior to the voting of the proxy at the
Annual Meeting, by delivering to the Secretary of Level 3 a written statement
revoking the proxy, by executing and delivering a later dated proxy, by calling
the toll free telephone number, by accessing the Internet or by voting in person
at the Annual Meeting.
Sincerely,
/s/ Walter Scott, Jr.
Walter Scott, Jr.
Chairman of the Board
