Attached files
Exhibit
3.3
CenturyTel,
Inc.
CORPORATE
GOVERNANCE GUIDELINES
(as
amended through February 23, 2010)
1.
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Director
Qualifications
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The Board
will have a majority of independent
directors. The Nominating and Corporate Governance Committee is
responsible for reviewing with the Board, on an annual basis, the requisite
skills and characteristics of new Board members as well as the composition of
the Board as a whole. This assessment will include members’
independence qualifications, as well as consideration of diversity, character,
judgment, skills and experience in the context of the needs of the Board at that
time. All directors must meet any additional qualifications
established under the Company’s organizational documents. It is the
general sense of the Board that no more than two management directors should
serve on the Board.
Nominees
for directorship will be selected in accordance with the qualifications,
criteria and procedures described in these guidelines and the Company’s bylaws,
as well as the policies and principles in the Committee’s charter and any
selection guidelines or criteria adopted thereunder. The invitation
to join the Board should be extended on behalf of the full Board by the Chairman
of the Nominating and Corporate Governance Committee and the Chairman of the
Board.
The Board
expects directors who change the job or responsibility they held when they were
elected to the Board to volunteer to resign from the Board. It is not
the sense of the Board that in every such instance the director should
necessarily leave the Board. There should, however, be an opportunity
for the Board, following a review by the Nominating and Corporate Governance
Committee, to determine the continued appropriateness of Board membership under
the circumstances.
No
director may serve on more than two other unaffiliated public company boards,
unless this prohibition is waived by the Board. No director may serve
on the board of a company or organization that competes with the Company or is
otherwise likely to raise a significant conflict of interest, unless such
service is approved by the Board. Directors should advise the
Chairman of the Board and the Chairman of the Nominating and Corporate
Governance Committee in advance of accepting an invitation to serve on another
public company board. No director may be appointed or nominated to a
new term if he or she would be age 75 or older at the time of the election or
appointment.
The Board
does not believe it should establish term limits. While term limits
could help insure that there are fresh ideas and viewpoints available to the
Board, they hold the disadvantage of losing the contribution of directors who
have been able to develop, over a period of time, increasing insight into the
Company and its operations and, therefore, provide an increasing contribution to
the Board as a whole. As an alternative to term limits, the
Nominating and Corporate Governance Committee will review each director’s
continuation on the Board at least once every three years. This will
allow each director the opportunity to conveniently confirm his or her desire to
continue as a member of the Board.
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Annually,
the Board will determine affirmatively which of its directors are independent
for purposes of complying with these guidelines and the listing standards of the
New York Stock Exchange (the “NYSE”). A director will not be
independent for these purposes unless the Board affirmatively determines that
the director does not, either directly or indirectly through the director’s
affiliates or associates, have a material commercial, banking, consulting,
legal, accounting, charitable, familial or other relationship with the Company
or its affiliates, other than as a director. In making these
determinations, the Board will consider all relevant facts and circumstances of
both the director and the director’s affiliates and associates, and the extent
to which any such relationship could reasonably be expected to interfere with
the exercise of independent judgment by the director. In no event,
however, will a director be determined to be independent if any of the
disqualifying events or conditions specified in Rule 303A.02(b) of the NYSE
Listed Company Manual (as such rule may from time to time be amended, restated,
supplemented or re-promulgated) apply to the director. A member of
the Audit Committee of the Board will not be deemed to be independent unless
such member meets the standards set forth both in this paragraph and
Rule 10A-3(b) promulgated under the Securities Exchange Act of 1934, as amended
(as such rule may from time to time be amended, restated, supplemented or
re-promulgated). For purposes of this paragraph, the terms
“affiliates” and “associates” will have the meanings ascribed to them in Rule
405 promulgated under the Securities Act of 1933, as amended (as such rule may
from time to time be amended, restated, supplemented or
re-promulgated).
2.
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Director
Responsibilities
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The basic
responsibility of the directors is to exercise their business judgment to act in
what they reasonably believe to be in the best interests of the Company and its
shareholders. In discharging that obligation, directors should be
entitled to rely on the honesty and integrity of the Company’s senior executives
and its outside advisors and auditors. The directors shall also be
entitled to have the Company purchase reasonable directors’ and officers’
liability insurance on their behalf, to the benefits of indemnification to the
extent permitted by law and the Company’s by-laws and any indemnification
agreements, and to exculpation as provided by state law and the Company’s
articles of incorporation.
Directors
are expected to (i) attend the annual shareholders meeting, (ii) attend Board
meetings and meetings of committees on which they serve, and (iii) spend the
time needed and meet as frequently as necessary to properly discharge their
responsibilities. Information and data that are important to the
Board’s understanding of the business to be conducted at a Board or committee
meeting should generally be distributed in writing to the directors before the
meeting, and directors should review these materials in advance of the
meeting.
Each
Board member is free to suggest the inclusion of items on the
agenda. Each Board member is free to raise at any Board meeting
subjects that are not on the agenda for that meeting. The Board will
review the Company’s long-term strategic plans and the principal issues that the
Company will face in the future at least once a year, preferably in an off-site
planning session dedicated primarily to such issues.
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The Board
believes that management speaks for the Company. Individual Board
members may, from time to time, meet or otherwise communicate with various
constituencies that are involved with the Company. However, it is
expected that Board members would do this with the knowledge of the management
and, absent unusual circumstances or as contemplated by the committee charters,
only at the request of management.
If a
director wishes to resign, retire or not to stand for reelection at the end of
his or her current term, the director will notify the Chair of the Nominating
and Corporate Governance Committee in writing, with a copy to the
Secretary. Unless otherwise determined by the Board, when a
management director retires or ceases to be an active employee for any other
reason, that director will be considered to have resigned concurrently from the
Board.
3.
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Board
Committees
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The Board
will have at all times an Audit Committee, a Compensation Committee and a
Nominating and Corporate Governance Committee. All of the members of
these committees will be independent directors, as defined in Section 1
above.
Committee
members will be appointed by the Board upon recommendation of the Nominating and
Corporate Governance Committee with consideration of the desires of individual
directors. It is the sense of the Board that consideration should be
given to rotating committee members periodically, but the Board does not believe
that rotation should be mandated as a policy. Any appointments or
removals of committee members will be made by the Board in accordance with the
Company’s bylaws.
Each key
committee will have its own charter. The charters will set forth the
purposes, goals and responsibilities of the committees as well as qualifications
for committee membership, procedures for committee member appointment and
removal, committee structure and operations and committee reporting to the
Board. The charters will also provide that each key committee will
annually evaluate its performance.
The Chair
of each committee, in consultation with the committee members, will determine
the frequency and length of the committee meetings consistent with any
requirements set forth in the committee’s charter. The Chair of each
committee, in consultation with members of the committee and others specified in
the committee’s charter, will develop the committee’s agenda.
The Board
and each committee have the power to hire independent legal, financial or other
advisors as they may deem necessary, without consulting or obtaining the
approval of any officer of the Company in advance.
Each
committee may meet in executive session as often as it deems appropriate, and
shall have the power to obtain and review any information that the committee
deems necessary to perform the functions described in its charter.
The Board
may, from time to time, establish or maintain additional committees as necessary
or appropriate.
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4.
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Chairman;
Lead Outside Director
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The Board
shall elect from among its members a Chairman. The Chairman may be a
director who also has executive responsibilities, including the CEO (an
“Executive Chair”), or may be one of the Company’s independent directors (a
“Non-Executive Chair”). The Board believes it is in the best
interests of the Company for the Board to remain flexible with respect to
whether to elect an Executive Chair or a Non-Executive Chair so that the Board
may provide for succession planning and respond effectively to changes in
circumstances.
The
Chairman’s responsibilities include:
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(a)
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presiding
at meetings of the Board;
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(b)
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overseeing
the management, development and functioning of the
Board;
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(c) in
consultation with the CEO (if different), planning and organizing the activities
of the Board and the schedule for Board meetings; and
(d) in
consultation with the CEO (if different), establishing the agendas for Board
meetings.
The
non-management directors will meet in executive session at least quarterly in
conjunction with regularly-scheduled Board meetings and will, subject to the
other terms of this paragraph, elect from among the independent directors a lead
outside director at least annually. The lead outside director may
call additional meetings of the non-management directors at any
time. At all times during which the Chairman is a Non-Executive
Chair, all of the functions and responsibilities of the lead outside director
shall be performed by the Non-Executive Chair.
The lead
outside director’s responsibilities include:
(a) coordinating,
developing an agenda for, and presiding at each meeting of the non-management
directors; and
(b) providing
direction to the CEO on the quality, quantity, and timeliness of the flow of
information from management that is necessary for the non-management directors
to perform their duties effectively and responsibly, with the understanding that
the non-management directors will receive any information requested on their
behalf by the lead outside director.
5.
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Director
Access to Officers and Employees
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Directors
have full and free access to officers and employees of the
Company. Any meetings or contacts that a director wishes to initiate
may be arranged through the CEO or the Secretary or directly by the
director. The directors will use their judgment to ensure that any
such contact is not disruptive to the business operations of the Company and
will, to the extent not inappropriate, copy the CEO on any written
communications between a director and an officer or employee of the
Company.
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The Board
welcomes regular attendance at each Board meeting of the executive officers of
the Company and such other Company personnel as the Board or the CEO may
designate.
6.
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Director
Compensation
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The
Compensation Committee shall review annually director compensation and benefits,
and recommend any proposed changes to the Board for approval, subject to the
terms, conditions and exceptions set forth in the committee’s
charter. The Compensation Committee will consider whether directors’
independence may be jeopardized if director compensation and perquisites exceed
customary levels, or if the Company makes substantial charitable contributions
to organizations with which a director (or one of the director’s immediate
family members) is affiliated.
7.
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Director
Orientation and Continuing
Education
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The
Nominating and Corporate Governance Committee shall maintain an Orientation
Program for new directors. All new directors must participate in the
Company’s Orientation Program, which should be conducted as soon as practicable
after new directors are elected or appointed. This orientation may
include presentations by senior management to familiarize new directors with the
Company’s strategic plans, its significant financial, accounting and risk
management issues, its corporate compliance programs (which include its code of
business conduct and ethics), its principal officers, and its internal and
independent auditors. All other directors are also invited to attend
the Orientation Program.
The
Company will also maintain a Continuing Education Program for directors,
pursuant to which it will endeavor to periodically update directors on industry,
technological and regulatory developments, and to provide adequate resources to
support directors in understanding the Company’s business and matters to be
acted upon at board and committee meetings.
8.
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CEO
Evaluation and Management
Succession
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The
Nominating and Corporate Governance Committee will conduct an annual review of
the CEO’s performance. The Nominating and Corporate Governance
Committee will provide a report of its findings to the Board of Directors (with
appropriate recusals of the CEO and other management directors, as necessary) to
enable the Board to ensure that the CEO is providing the best leadership for the
Company in the long- and short-term.
The
Nominating and Corporate Governance Committee should report periodically to the
Board on succession planning. The entire Board will consult
periodically with the Nominating and Corporate Governance Committee regarding
potential successors to the CEO. The CEO should at all times make
available his or her recommendations and evaluations of potential successors,
along with a review of any development plans recommended for such
individuals.
9.
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Annual
Evaluation
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The Board
of Directors will conduct an annual self-evaluation to determine whether it and
its committees are functioning effectively. The Nominating and
Corporate Governance Committee will receive comments from all directors and
report annually to the Board with an assessment of the Board’s performance,
which will be discussed with the full Board. The assessment will
focus on the Board’s contribution to the Company and specifically focus on areas
in which the Board or management believes that the Board could
improve. The Nominating and Corporate Governance Committee will also,
no less than annually, review these guidelines and recommend any proposed
changes to the Board for approval.
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10.
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Recoupment
of Compensation
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In
addition to any other remedies available to the Company and subject to
applicable law, if the Board or any committee of the Board determines that any
bonus, incentive payment, commission, equity award or other compensation awarded
to or received by an executive officer was based on any financial or operating
result that was impacted by the executive officer’s knowing or intentional
fraudulent or illegal conduct, the Board or a Board committee may recover from
the executive officer the compensation it considers appropriate under the
circumstances. The Board has sole discretion to make any and all
determinations under this paragraph.
11.
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Stock
Ownership Guidelines
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The
Company expects its executive officers to beneficially own CenturyLink stock
equal in market value to specified multiples of their annual base
salary. For any year during which an executive does not meet his or
her ownership target, the executive is expected to hold a specified
percentage of the
CenturyLink stock that the executive acquires through the Company’s equity
compensation programs, excluding shares sold to pay taxes associated with the
acquisition thereof. Each of these ownership multiples and holding
percentages will be set from time to time by the Compensation Committee and will
be disclosed in the Company’s annual proxy statement.
Unvested
restricted stock and shares held through the Company’s benefit plans count
towards the ownership targets, which are calculated based on trailing average
stock prices and reviewed at least every three years. Each executive
officer has three years from the date they first become subject to a particular
ownership level to attain that target. The Compensation Committee
administers these stock ownership guidelines, and may modify their terms and
grant hardship exceptions in its discretion.
12.
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Standards
of Business Conduct and Ethics
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All of
the Company’s directors, officers and employees are required to abide by the
Company’s long-standing ethics and compliance policies and programs, which
include standards of business conduct. The Company’s program and
related procedures cover all areas of professional conduct, including employment
policy, conflicts of interests, protection of confidential information, as well
as strict adherence to all laws and regulations applicable to the conduct of the
Company’s business.
Any
waiver of the Company’s policies, principles or guidelines relating to business
conduct or ethics for executive officers or directors may be made only by the
Board or a duly authorized committee thereof, and will be promptly disclosed as
required by applicable law or stock exchange regulations.
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Originally
adopted by the Nominating and Corporate Governance Committee and the Board
of Directors on February 17, 2003 and February 25, 2003,
respectively.
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Sections
1, 3, 6 and 7 amended by the Nominating and Corporate Governance Committee
and the Board of Directors on November 18, 2003 and November 20, 2003,
respectively.
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Sections
1, 3 and 9 amended by the Nominating and Corporate Governance Committee
and the Board of Directors on February 19, 2004 and February 25, 2004,
respectively.
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Section
1 amended by the Nominating and Corporate Governance Committee and the
Board of Directors on February 18, 2005 and February 22, 2005,
respectively.
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Sections
1, 2, 4, 5, 8 and 9 amended by the Nominating and Corporate Governance
Committee and the Board of Directors on February 16, 2006 and February 21,
2006, respectively.
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Section
1 (last sentence of the fourth paragraph) amended by the Nominating and
Corporate Governance Committee and the Board of Directors on August 17,
2007 and August 21, 2007,
respectively.
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Sections 1
and 2 amended, Sections 4 and 10 added, and former Sections 4 to
9 renumbered, in each case by both the Nominating and Corporate Governance
Committee and the Board of Directors on June 30,
2009.
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Section 1
(first, sixth and former seventh paragraphs) amended by the Nominating and
Corporate Governance Committee and the Board of Directors on
August 11, 2009 and August 24, 2009,
respectively.
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Sections 6
and 12 amended and Section 11 added by the Nominating and Corporate
Governance Committee and the Board of Directors on February 19, 2010
and February 23, 2010,
respectively.
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