The table below illustrates upcoming offering periods and the corresponding enrollment deadlines.

Transcription

1 CenturyLink Employee Stock Purchase Plan (ESPP) Frequently sked uestions What is an Employee Stock Purchase Plan? The Employee Stock Purchase plan (ESPP) allows eligible employees to acquire shares of CenturyLink common stock at a discounted rate, through convenient payroll contributions. How does the ESPP work, generally? If you are an eligible employee, you may designate 1% to 20% of your eligible compensation to be withheld from each bi-weekly paycheck. These contributions are used to purchase shares of CenturyLink stock at the end of each semi-annual offering period. The purchase price is 85% of the fair market value on either the first trading day or the last trading day of the offering period, whichever is lower. Who is eligible to participate? To enroll in the plan, you must have been a full-time or part-time U. S. based CenturyLink employee, excluding Tel-US, either bargained or non-bargained, for at least 20 calendar days prior to the beginning of each offering period. In addition, to make a purchase, you must be a full-time or part-time employee on both the first and last days of the offering period. What is eligible compensation? Your eligible compensation is your base pay, including regular time, vacation, personal days, paid time off and holidays. Commissions, bonuses, disability payments, overtime, differentials and expense reimbursements are not considered eligible compensation for purposes of ESPP contributions. What is an offering period? n offering period is a six-month period during which your payroll contributions will accumulate for the purpose of purchasing stock at the end of each period. The semiannual offering periods begin on January 1 and July 1 each year. What is an enrollment period? The ESPP is open for enrollment two times per year. The enrollment period is the first 20 days of the calendar month preceding the applicable offering period in which eligible employees can enroll in the ESPP or change their contribution percentage. The enrollment period for each offering period ends 10 calendar days prior to the start of the offering period. The table below illustrates upcoming offering periods and the corresponding enrollment deadlines. Offering Period Begin End Purchase Open Enrollment 1/1/12 6/30/12 6/29/12 12/1/2011 to 12/20/11 7/1/12 12/31/12 12/31/12 6/1/2012 to 6/20/12 If I enroll during the enrollment period, can I change or cancel my contribution percentage? Yes, you may change your contribution percentage at any time during the enrollment period for the upcoming offering period; however, once the enrollment period ends you cannot change your contribution during the applicable offering period. You can cancel your contribution during the offering period and either leave your accumulated contributions in the ESPP to purchase shares on the next purchase date, or you can request a refund to be paid as soon as administratively feasible. CenturyLink ESPP F Page 1

2 Is there a pre-tax option for my ESPP contributions? No, your ESPP contributions are after tax only. Will the Company match my ESPP contributions? No, there is no Company match in the ESPP. When will my payroll contributions begin? Payroll contributions will begin with the first paycheck during the offering period for which you enroll. Do I need to re-enroll for each offering period? Once you have enrolled in the CenturyLink ESPP, your contributions will continue at the same rate until you change or cancel them in accordance with the plan. If an offering period lasts six months, and purchases are only made at the end of the offering period, what happens to my payroll contributions during the offering period? ll payroll contributions received during the offering period will be held by CenturyLink without interest and may be used by CenturyLink for any corporate purpose. t the end of the offering period, the total amount contributed by you will be used to purchase shares, (within the ESPP limitations described below.) Can I designate a specific dollar value contribution versus a percentage? No, contributions are based on percentage of eligible compensation only. Can I contribute additional funds over and above my contribution percentage in order to purchase additional shares? No, once you have designated a contribution percentage, that rate will remain in place until you change it during a subsequent enrollment period. You may not contribute additional funds during an offering period. What is the purchase date? The purchase date is the last trading day, according to the New York Stock Exchange (NYSE), of an offering period. CenturyLink ESPP F Page 2

3 What is the purchase price? The purchase price will be 85% of the fair market value (FMV) closing price on either the first trading day or the last trading day of the offering period, whichever is lower. Regardless of which trading day is used to calculate the purchase price, the purchase will always occur on the last trading day of the offering period. The scenarios below illustrate the calculation of the purchase price when CenturyLink s stock price increases or decreases during an offering period. The prices in the scenarios are hypothetical and for illustrative purposes only. Scenario #1 - FMV increases during the offering period: First trading day of offering FMV close price: $40 85% of FMV = $34.00 period: January 2, 2012 Last trading day of offering FMV close price: $45 85% of FMV = $38.25 period: June 29, 2012 Your per share purchase price is $ Purchase will be made on 6/29/12. Scenario #2 - FMV decreases during the offering period: First trading day of offering FMV close price: $42 85% of FMV = $35.70 period: January 2, 2012 Last trading day of offering FMV close price: $38 85% of FMV = $32.30 period: June 29, 2012 Your per share purchase price is $ Purchase will be made on 6/29/12. re there any limitations as to the number of shares I can purchase? Yes, under IRS regulations, you may not purchase more than $25,000 worth of CenturyLink shares through the ESPP during any calendar year. This limit is based on the value of the shares purchased, and not your contribution amount or your discounted purchase price. How will I receive my shares once they re purchased? Following your initial purchase, an account will be established for you with E*Trade Financial or another financial institution designated by CenturyLink. Your shares generally will be deposited into this account within five business days following the purchase date. fter the shares have been allocated to your account, you may sell or transfer them at any time, subject to insider trading rules. Will I incur brokerage fees? No brokerage fees will apply towards the purchase; however, you will be responsible for brokerage fees associated with any subsequent sale, transfer or certificate transaction. Will I receive rights as a shareholder on my purchased shares? Yes, once the shares are purchased you will receive all rights of a shareholder with respect to those shares, including voting rights and dividends, if any. ny dividends earned on shares held in your ESPP account will be automatically reinvested in the Plan and used to purchase additional CenturyLink shares. Shares acquired through dividend reinvestment will be purchased at the market price on the day it is purchased. The 15% discount will not apply to stock purchased with dividends. lthough cash dividends paid to you through the plan are automatically reinvested to purchase more stock, all dividends are considered taxable income. Therefore, at the end of the year, you will receive a tax document reflecting the dollar value of the dividends paid to you on your plan shares. CenturyLink ESPP F Page 3

4 Will I have the option to receive my dividends via a check instead of having them reinvested? No, dividends on shares that are held in your ESPP account are automatically reinvested in the Plan, and there is no option to receive these dividends in cash. What if my employment ends during an offering period? If your employment terminates during an offering period, you will not be eligible to purchase shares at the end of the offering period. Contributions made during the offering period will be refunded to you as soon as administratively feasible following your termination of employment. If I participated in the 7/1/11 through 12/31/11 offering period, will I be automatically enrolled in the 1/1/12 through 6/30/12 offering period? Yes, if you are currently participating in the 7/1/11 through 12/31/11 offering period, you will be automatically enrolled for the 1/1/12 through 6/30/12 offering period at the same contribution percentage. If you do not want to make any changes, you do not need to take any action at this time. However, if you want to increase or decrease your contribution percentage, or you do not wish to participate in the upcoming offering period, you will need to make those changes during the current enrollment period which ends on December 20, How do I enroll or make changes to my existing contribution for the upcoming offering period? You can enroll or make changes to your existing contribution for the upcoming offering period through the online self-service tool located at What if I have been notified that I am on the Blackout List under CenturyLink s Policy Statement on Insider Trading? m I prohibited from participating in the ESPP? If you have been notified that you are on the Blackout List under CenturyLink s Policy Statement on Insider Trading you may participate in the ESPP, provided that you comply with the trading and preclearance requirements under the Policy Statement on Insider Trading. For example, you must preclear with the Legal Department any transaction in the ESPP, including enrolling in the plan, changing your contribution election, or canceling your participation. You do not need to preclear prior to the automatic purchase at the end of each offering period. Where can I get more information about the CenturyLink ESPP? If you still have questions regarding the ESPP, please contact E*Trade at , or the CenturyLink 401(k) and ESPP benefit department at CenturyLink ESPP F Page 4

5 Legacy west Participants: When I participated in the former west ESPP, I was able to change or cancel my contribution at any time. How is the CenturyLink ESPP different? The west ESPP had 12 one-month offering periods per year and purchases were made at the end of each monthly offering period. In the west ESPP participants could also make enrollment and contribution changes at any time during the monthly offering period. Under the CenturyLink ESPP, there are only two six-month offering periods per year. Purchases are made at the end of each offering period; however, unlike the west ESPP, participants may not make contribution changes during the offering period. Enrollment and contribution changes may only occur during the enrollment period preceding each offering period. What will happen to the shares I purchased through the former west ESPP? Shares held in your west ESPP account have been converted to CenturyLink shares and will continue to be held in a Morgan Stanley Smith Barney account, unless you choose to transfer those shares to a different account. You may not combine them with your CenturyLink ESPP shares held at E*Trade. To the extent that you continue to hold these shares, you will retain all rights associated with CenturyLink shares generally. ny dividends paid on shares held in your Morgan Stanley Smith Barney account will continue to be paid in cash via a check mailed to your address on record with Morgan Stanley Smith Barney. You can continue to monitor or trade these shares through Morgan Stanley Smith Barney, at or (877) This plan is governed by a plan document. In the event of any discrepancy between any information in this document and the plan document, the plan document shall govern. You can review the plan document on the Company intranet. CenturyLink ESPP F Page 5