CenturyLink 2015 Annual Report Download - page 36

be based upon any or a combination of the following criteria applied to CenturyLink or one or more of our
divisions, subsidiaries, or lines of business: return on equity, cash flow, assets, or investment; shareholder return;
target levels of, or changes in, revenues, operating income, cash flow, cash provided by operating activities,
earnings, or earnings per share; achievement of business or operational goals, such as market share, customer
growth, customer satisfaction, new product or services revenue, or business development; strategic business
criteria, consisting of one or more objectives based on meeting specified revenue, market share, market
penetration, or geographic business expansion goals, objectively-identified project milestones, production
volume levels, costs targets, and goals relating to acquisitions or divestitures; or an economic value-added
measure. At the time it sets performance goals, the Committee may define cash flow, revenues, and the other
terms listed above as it sees fit. 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
industry benchmarks, or relative to levels attained in prior years. Performance measurements may be adjusted as
specified under the Plan to exclude the effects of non-recurring transactions or changes in accounting standards.
Our Committee may use different targets from time to time within the scope of the Plan’s performance goals
listed above. The regulations under Section 162(m) require that the material terms of the performance goals be
reapproved by our shareholders every five years. To qualify as performance-based compensation, grants of
restricted stock, restricted stock units, and other stock-based awards will be required to satisfy the other
applicable requirements of Section 162(m).
Termination of Employment. In the event that a participant ceases to be an employee of CenturyLink or its
subsidiaries or to provide services to us 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 provided in the applicable
incentive agreement or as may be otherwise determined by the Committee.
Change in Control. Upon a change in control of CenturyLink, as defined in the Plan or the applicable
incentive agreement, all outstanding Incentives granted under the Plan will remain outstanding in accordance
with their terms, unless otherwise provided in the applicable incentive agreement, or unless the Committee takes
specific action permitted by the Plan.
In the event of a change of control of CenturyLink, the Plan permits the Committee to take a variety of
actions regarding outstanding Incentives. Within certain time periods and under certain conditions, the
Committee may:
• require that all outstanding Incentives be exercised by a certain date;
• require the surrender to CenturyLink 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;
• make any equitable adjustment to outstanding Incentives as the Committee deems necessary to reflect
our corporate changes; or
• 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 transaction if the participant had been a shareholder.
Transferability of Incentives. No Incentives granted under the Plan may be transferred, pledged, assigned,
or otherwise encumbered by a participant except: (a) by will; (b) by the laws of descent and distribution; (c) if
permitted by the Committee and so provided in the applicable incentive agreement, pursuant to a domestic
relations order, as defined in the Code; or (d) as to options only, if permitted by the Committee and so provided
in the applicable incentive agreement, to immediate family members or to a partnership, limited liability
company or trust for which the sole owners, members or beneficiaries are the participant or immediate family
members.
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