CenturyLink 2015 Annual Report Download - page 33

Issuable under the Plan”). The Director Limit is a limit specific to non-employee directors that is considerably
lower than the general participant limits. The Director Limit would apply only to equity-based compensation
granted to non-employee directors under the Plan.
If shareholders approve this Plan Proposal, we will be able to continue to grant awards under the Plan
designed to qualify for the performance-based exception from the Section 162(m) deductibility limitation and
any equity grants made to our non-employee directors under the Plan will be limited by the Director Limit. If
shareholders do not approve this Plan Proposal, we will continue to grant awards under the Plan, but any
performance-based awards will no longer be eligible for the Section 162(m) exception for performance-based
compensation. In addition, if shareholders do not approve this Plan Proposal, the only Plan limits that will be
applicable to awards to non-employee directors will be the general participant limits described above.
While reapproval of the performance goals is required for certain awards under the Plan to qualify as for the
performance-based exception from Section 162(m), not all awards under the Plan or other compensation
approved by the Committee are intended to qualify for this exception or otherwise be deductible. Further, there is
no guarantee that awards intended to qualify for tax deductibility under Section 162(m) will ultimately be viewed
as so qualifying by the Internal Revenue Service. Finally, nothing in this Plan Proposal precludes the Company
or the Committee from granting awards that do not qualify for tax deductibility under Section 162(m).
Summary of the Plan
Administration of the Plan. The Committee (or a subcommittee of the Committee) generally administers
the Plan, and has the authority to make awards under the Plan, including setting the terms of the awards. The
Committee also generally has the authority to interpret the Plan, to establish any rules or regulations relating to
the Plan that it determines to be appropriate, and to make any other determination that it believes necessary or
advisable for proper administration of the Plan. Subject to the limitations specified in the Plan, the Committee
may delegate its authority to our Chief Executive Officer or his designee with respect to grants to employees or
consultants who are not subject to Section 16 of Exchange Act or Section 162(m) of the Code.
Eligibility. Key employees, officers, and directors of CenturyLink and our consultants or advisors are
eligible to receive awards (“Incentives”) under the Plan. During 2015, approximately 950 employees and 11 non-
employee directors participated in the Plan and we anticipate a similar level of officer and director participation
in 2016. Incentives under the Plan may be granted in any one or a combination of the following forms: incentive
stock options under Section 422 of the Code, non-qualified stock options, stock appreciation rights, restricted
stock, restricted stock units, and other stock-based awards. Each of these types of Incentives is discussed in more
detail in “Types of Incentives” below.
Shares Issuable through the Plan. A total of 30,000,000 of our Common Shares are authorized for issuance
under the Plan. This figure represents approximately 5.5% of the outstanding Common Shares as of our record
date of March 30, 2016. The closing price of a Common Share on March 30, 2016, as quoted on the NYSE, was
$31.87. As detailed in the chart below under the heading “Equity Compensation Plan Information,” there were
20,759,094 Common Shares remaining available for grant under the Plan as of December 31, 2015.
Limitations and Adjustments to Shares Issuable under the Plan. Currently under the Plan, Incentives
relating to no more than 600,000 Common Shares may be granted to a single participant in any fiscal year.
Grants of restricted stock, restricted stock units, or other stock-based amounts are generally subject to minimum
vesting periods, except that grants of up to an aggregate of 1,500,000 Common Shares may be made without
compliance with these minimums. These minimum vesting periods, as well as certain exceptions, are discussed
below under “Types of Incentives – Restricted Stock.” A maximum of 30,000,000 Common Shares may be
issued upon exercise of options intended to qualify as incentive stock options under the Code.
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