30. How will my shares be voted at meetings of shareholders?
For each meeting of shareholders, you will receive a proxy card which will enable you to vote all whole shares registered in your name as well as to direct Computershare to vote all whole shares credited to your account. If the proxy card is returned, properly signed and marked for voting, all of such shares will be voted
as marked. If you vote in person the shares registered in your name on any matter submitted to a meeting of shareholders and no other instructions are received by Computershare regarding shares credited to your account, the number of whole shares credited to your account will be added to the number of shares registered in your name which are voted on such matter.
31. What are the federal income tax consequences of participation in the Service?
In general, the federal income tax consequences with respect to receiving CenturyTel cash dividends will be the same for participants and non-participants in the Service. A purchase of shares with voluntary cash payments under the Service should be treated for federal income tax purposes as a direct purchase of shares by
you.
Under current federal income tax laws, you should not realize any taxable income when you receive certificates for whole shares credited to your account under the Service, either upon your request for such certificates or upon withdrawal from or termination of the Service. However, if you receive, upon withdrawal from or
termination of the Service, a cash payment for any whole share sold for you by Computershare (or sold by you after withdrawal from the Service), or for a fractional share then held in your account, you will realize a gain or loss measured by the difference between the amount of cash which you receive and your tax basis in such share or fraction credited to your account. For further information as to tax consequences of participation in the Service, you should consult with your own tax advisors.
32. What provision is made for shareholders subject to income tax withholding?
If you are subject to backup withholding of federal income tax, or if you are a foreign participant whose dividends are subject to U.S. income tax withholding, an amount equal to the dividends payable to you, less the amount of tax required to be withheld, will be applied to the purchase of shares for your account. Any amount
required to be withheld will be treated as a cash dividend paid to you for federal income tax purposes.
33. What is CenturyTel’s responsibility and Computershare’s under the Service?
CenturyTel and Computershare, in administering the Service, will not be liable for any act done in good faith or for any good faith omission to act, including, without limitation, any claim or liability arising out of any of the following:
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the failure to terminate your account upon your death or incapacity prior to receipt of written notice of your death or incapacity, accompanied by documentation deemed satisfactory to Computershare and CenturyTel |
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the price or prices at which shares are purchased or sold for your account, or any market price fluctuations after such purchases or sales are requested or made |
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the times when such purchases or sales are made |
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the value of the shares acquired and held for your account. |
34. When can issuances, purchases or sales of common stock be temporarily curtailed?
Temporary curtailment or suspension of issuances, purchases or sales of common stock may be implemented at any time when such transactions could reasonably be expected to contravene or be restricted by applicable law or by applicable regulations, interpretations or orders of the Securities and Exchange Commission, the New
York Stock Exchange or any other governmental agency or court having jurisdiction over our affairs. Under such circumstances, the completion of such transactions may be spread over a longer period than indicated above. In the event any such suspension of trading results in dividends not being reinvested for 30 days from the payment thereof or voluntary cash payments not being invested for 30 days from the receipt thereof, these funds will be refunded automatically to you without interest.
35. When can Computershare terminate my account?
Computershare in its sole discretion may terminate your account by notice in writing made to you at the address shown on Computershare’s records. If your account has been terminated by Computershare you will, within 30 days of such termination, receive the number of whole shares credited to your account, but will not
have the right to cause Computershare to sell such shares for your account. In every case of termination of your account, you will receive a cash payment, based on the current market price of the common stock, for any fractional share interest credited to your account.
36. May the Service be changed or discontinued?
We reserve the right to suspend, modify or terminate the Service in any manner and at any time. Notice will be sent to you of any suspension, material modification or termination. Any amendment, modification or supplement of the Service may include the appointment by us of a successor agent provided such successor is a bank
or trust company organized under the laws of the United States or any state thereof. We are authorized to pay to such successor agent for your account all dividends and distributions payable on shares of common stock authorized to be reinvested under the Service, which shall be applied by such successor agent as provided in the Service.
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37. What law governs the terms and conditions of the Service?
The terms and conditions of the Service and its operations are governed by the laws of the State of Illinois.
38. Can the Service be terminated by operation of law?
The delivery by you of a signed authorization form to Computershare shall constitute an appointment of Computershare as your agent, which appointment can be terminated only by terminating your account in the manner provided in response to Questions 27, 35 and 36 hereof. The authority conferred by the authorization form shall
not be terminated by operation of law, whether by your death or incapacity, the termination of any trust, the dissolution of any corporation or the occurrence of any other event.
USE OF PROCEEDS
We propose to use the net proceeds from any direct issuance of new shares to participants, when and as received, for investments in and advances to our subsidiaries or for other general corporate purposes.
SUMMARY DESCRIPTION OF SECURITIES
Our authorized capital stock consists of 800,000,000 shares of common stock, of which approximately 297,330,250 shares were outstanding as of August 20, 2009, and 2,000,000 shares of preferred stock, of which 9,434 shares were outstanding as of August 20, 2009. The following descriptions of the common stock and the preferred
stock are qualified in their entirety by reference to the relevant provisions of the Louisiana Business Corporation Law, our articles of incorporation (the “Articles”), our bylaws, and our registration statements filed under the Securities Exchange Act of 1934 pertaining to our common stock, which have been incorporated herein by reference. See “Where You Can Find More Information - Incorporation by Reference.”
Common Stock
Under our Articles, each share of common stock entitles the holder thereof to one vote on all matters duly submitted to a vote of shareholders. Holders of common stock do not have cumulative voting rights. As a result, the holders of more than 50% of the voting power may elect all of our directors if they so desire. Holders
of common stock do not have any pre-emptive rights to subscribe to any additional capital stock that we may issue.
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Preferred Stock
Under our Articles, the Board of Directors is authorized, without shareholder action, to issue preferred stock from time to time and to establish the designations, preferences and relative, optional or other special rights and qualifications, limitations and restrictions thereof, as well as to establish and fix variations
in the relative rights as between holders of any one or more series thereof. The authority of the Board of Directors includes, but is not limited to, the determination or establishment of each of the following with respect to each series of preferred stock that may be issued:
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the designation of such series |
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the number of shares initially constituting such series |
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the dividend rate and conditions and the dividend preferences, if any, in respect of the common stock and among the series of the preferred stock |
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whether, and upon what terms, the preferred stock shall be convertible into or exchangeable for any other of our securities |
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whether, and to what extent, holders of shares of a series of preferred stock will have voting rights |
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the restrictions, if any, upon the issue or reissue of any additional shares of preferred stock |
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whether, and on what terms and conditions, the shares may be redeemed by us (including sinking fund provisions) |
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the liquidation preferences, if any, in respect of the common stock and among the series of the preferred stock. |
As of August 20, 2009, 9,434 shares of our Series L preferred stock were outstanding. At such time, such shares were convertible into a total of 12,864 shares of common stock. Each holder of Series L preferred stock is entitled to receive cumulative
dividends prior to the distribution or declaration of dividends in respect of the common stock and is entitled to vote as a single class with the common stock. Each share of Series L preferred stock entitles the holder to one vote on all matters duly submitted to a vote of shareholders. Upon the Company’s dissolution or liquidation, the holders of the Series L preferred stock are entitled to receive, pro rata with all other such holders, a per share amount equal to $25.00 plus any unpaid and accumulated
dividends thereon. No trading market has developed for the Series L preferred stock, nor is it likely that one will develop in the foreseeable future.
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 83 of the Louisiana Business Corporation Law provides in part that we may indemnify any of our directors, officers, employees or agents against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with any action,
suit or proceeding to which he or she is or was a party or is threatened to be made a party (including any action by us or in our right) if such action arises out of his or her acts on our behalf and he or she acted in good faith not opposed to our best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Under Section 83, we may also advance expenses to the indemnified party provided that he or she agrees to repay those
amounts if it is later determined that he or she is not entitled to indemnification. Under Section 83, we also have the power to obtain and maintain insurance, or to create a form of self-insurance, on behalf of any person who is or was acting for us, regardless of whether we have the legal authority to indemnify the insured person against such liability.
Under Article II, Section 10 of our by-laws, which we refer to as the indemnification by-law, we are obligated to indemnify our current or former directors and officers, except that if any of our current or former directors or officers are held liable under or settle any derivative suit, we are permitted, but not obligated
to, indemnify the indemnified person to the fullest extent permitted by Louisiana law.
Our articles of incorporation authorize us to enter into contracts with directors and officers providing for indemnification to the fullest extent permitted by law. We have authorized indemnification contracts providing contracting directors or officers the procedural and substantive rights to indemnification
set forth in the indemnification by-law. We refer to these contracts as indemnification contracts. The right to indemnification provided by an indemnification contract applies to all covered claims, whether such claims arose before or after the effective date of the contract.
We maintain an insurance policy covering the liability of our directors and officers for actions taken in their official capacity. The indemnification contracts provide that, to the extent insurance is reasonably available, we will maintain comparable insurance coverage for each contracting party as long as he
or she serves as a director or officer and thereafter for so long as he or she is subject to possible personal liability for actions taken in such capacities.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933, and is therefore unenforceable.
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The foregoing is only a general summary of certain aspects of Louisiana law and our articles of incorporation and by-laws dealing with indemnification of directors and officers, and does not purport to be complete. It is qualified in its entirety by reference to (i) the relevant provisions of the Louisiana Business
Corporation Law and (ii) our articles of incorporation, by-laws, and form of indemnification contract, each of which is on file with the Securities and Exchange Commission.
LEGAL MATTERS
The validity of the common stock offered hereby has been passed upon for us by Jones, Walker, Waechter, Poitevent, Carrére & Denégre, L.L.P., New Orleans, Louisiana, our special counsel.
EXPERTS
Our consolidated financial statements and the related financial statement schedule as of December 31, 2008 and 2007 and for each of the years in the three-year period ended December 31, 2008 and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2008 have been
incorporated into this document by reference to our Annual Report on Form 10-K for the year ended December 31, 2008 in reliance upon the reports of KPMG LLP, independent registered public accounting firm, which are incorporated herein by reference, and upon the authority of said firm as experts in accounting and auditing. The audit report covering the December 31, 2008 consolidated financial statements contains an explanatory paragraph regarding the change in the method of accounting for uncertain
tax positions in 2007 and share-based payments and pension and postretirement benefits in 2006.
WHERE YOU CAN FIND MORE INFORMATION
Available Information
We file reports and other information with the Securities and Exchange Commission (the “Commission”). You may read and copy that information at the public reference room of the Commission at 450 Fifth Street, NW, Washington, D.C. 20549. You may call the Commission at 1-800-SEC-0330 for more information about
the public reference room. The Commission also maintains a Web site that contains reports and other information regarding issuers, like us, that file electronically with the Commission (http://www.sec.gov). Our common stock is listed on the New York Stock Exchange and you may obtain similar information about us at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
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Incorporation by Reference
The Commission allows us to “incorporate by reference” the information we file with it, which means that we can disclose important information to you by referring to documents on file with the Commission. We incorporate into this Prospectus the following documents that we have filed with the Commission pursuant
to the Securities Exchange Act of 1934 (the “Exchange Act”):
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2008. |
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Our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2009 and June 30, 2009. |
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Our Current Reports on Form 8-K filed January 16, 2009, January 29, 2009, February 19, 2009, April 30, 2009, June 4, 2009, July 1, 2009, and August 6, 2009. |
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The description of our common stock included in Amendment No. 3 to our Registration Statement on Form 8-A filed with the Commission on July 1, 2009 under the Exchange Act. |
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All documents filed by us with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to the termination of the offering of shares hereunder. |
This prospectus omits certain information contained in the Registration Statement on Form S-3 that we filed with the Commission on November 19, 1999. We registered 750,000 shares of our common stock for sale under the Registration Statement, most of which have already been sold as of the date of this Prospectus. You may
inspect and copy the Registration Statement and any of its amendments, including exhibits filed as a part it, as set forth above. In addition, we will provide to each person, including any beneficial owner, to whom a prospectus is delivered without charge upon written or oral request a copy of any or all information that has been incorporated by reference into the Registration Statement (other than exhibits to such documents unless such exhibits are specifically incorporated by reference into the documents that
the Registration Statement incorporates). You may request copies by writing or telephoning us at: CenturyTel, Inc.; 100 CenturyTel Drive; Monroe, Louisiana 71203; Attention: Stacey W. Goff, Executive Vice President, General Counsel and Secretary; telephone number: (318) 388-9500.
Any statements made in this prospectus or in a document incorporated by reference in this prospectus will be deemed to be modified or superseded to the extent that a statement contained in this prospectus or in any other subsequently filed incorporated document modifies or supersedes the statement.
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Forward-Looking Statements
Some of the statements made in the documents incorporated by reference in this prospectus are forward-looking statements which are subject to uncertainties that could cause our actual results to differ materially from such statements. These uncertainties are described in our above-referenced Annual Report on Form 10-K. You
are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update any of our forward-looking statements for any reason.